gesp2008.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
11-K
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x
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ANNUAL
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
[NO FEE REQUIRED] FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007,
OR
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o
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TRANSITION
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
[NO FEE REQUIRED] FOR THE TRANSITION PERIOD FROM FOR THE TRANSITION PERIOD
FROM __________ TO __________
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Registration
number: 333-128859 and 333-146904
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A.
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Full
title of the plan and the address of the plan, if different from that of
the issuer named below: The Gillette Company Employees' Savings
Plan.
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B.
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Name
of issuer of the securities held pursuant to the plan and the address of
its principal executive office: The Procter & Gamble Company, One
Procter & Gamble Plaza, Cincinnati, Ohio
45202
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REQUIRED
INFORMATION
The
following audited financial statements are enclosed with this
report:
1.
Statement of Net Assets Available for Plan Benefits as of December 31, 2007 and
December 31, 2006.
2.
Statement of Changes in Net Assets Available for Plan Benefits for the years
ended December 31, 2007 and 2006.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Trustees (or
other persons who administer the employee benefit plan) have duly caused this
Annual Report to be signed on its behalf by the undersigned hereunto duly
authorized.
The
Gillette Company
Employees'
Savings Plan
Date:
June 27, 2008
By: __/s/ Thomas J.
Mess_________________________
Thomas J. Mess
Secretary, Trustee of The Procter & Gamble Commercial
Employees' Savings Plan
EXHIBIT
INDEX
Exhibit
No.
23 Consent of Plante & Moran,
PLLC
The
Gillette Company
Employees’
Savings Plan
Financial
Report
December
31, 2007
The
Gillette Company Employees' Savings Plan
| |
Contents |
| |
|
| Report
Letter |
1 |
| |
|
| Statement of Net
Assets Available for Plan Benefits |
2
|
| |
|
| Statement of
Changes in Net Assets Available for Plan Benefits |
3
|
| |
|
| Notes to Financial
Statements |
4-14
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| |
|
| Schedule of Assets
Held at End of Year |
Schedule 1 |
Report of
Independent Registered Public Accounting Firm
To the
Master Savings Plan Committee
The
Gillette Company Employees’ Savings
Plan
We have
audited the accompanying statement of net assets available for plan benefits of
The Gillette Company Employees’ Savings Plan as of December 31, 2007 and 2006
and the related statement of changes in net assets available for plan benefits
for the years then ended. These financial statements are the responsibility of
the Plan’s management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the net assets available for plan benefits of the Plan as of
December 31, 2007 and 2006, and the changes in net assets available for plan
benefits for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
Our
audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
at end of year as of December 31, 2007 is presented for the purpose of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor’s Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule is the responsibility of the
Plan's management. This supplemental schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/
Plante & Moran, PLLC
Southfield,
Michigan
June 26,
2008
The
Gillette Company Employees' Savings Plan
Statement
of Net Assets Available for Plan Benefits
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December
31
|
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2007
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|
2006
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Assets
|
|
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Participant
directed investments:
|
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Plan
interest in The Gillette Company
|
|
|
|
|
|
|
Master
Savings Plan Trust
|
|
$
|
2,217,720,545
|
|
$
|
|
|
|
Participant
loans
|
|
|
23,958,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net
assets available for plan benefits, at fair value
|
|
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2,241,679,165
|
|
|
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|
|
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|
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Adjustment
from fair value to contract value for fully-benefit
|
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responsive
investment contracts held in master trust
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(2,166,686)
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|
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Net
Assets Available for Plan Benefits
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$
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2,239,512,479
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|
$
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|
|
|
|
|
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|
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See Notes to Financial
Statements.
The
Gillette Company Employees' Savings Plan
Statement
of Changes in Net Assets Available for Plan Benefits
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|
Year
Ended December 31
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2007
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|
2006
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Additions
to Net Assets Attributed to
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Plan
interest in investment income from
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The
Gillette Company Master Savings Plan Trust
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$
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272,849,449
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$
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|
|
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|
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Interest on
participant loans
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1,779,531
|
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Contributions:
|
|
|
|
|
|
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Employee
|
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47,673,795
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|
|
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Employer
|
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24,121,193
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|
|
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|
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Total
contributions
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71,794,988
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|
|
|
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|
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|
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Total
additions
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346,423,968
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|
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Deductions
from Net Assets Attributed to
|
|
|
|
|
|
|
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Benefit
payments paid directly to participants
|
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(300,228,259)
|
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|
|
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Net
Increase (Decrease) Prior to Transfers
|
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46,195,709
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|
|
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|
|
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Transfer to
The Gillette Company ESOP (Note 1)
|
|
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(192,454)
|
|
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|
|
|
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Net
Increase (Decrease) in Net Assets Available
|
|
|
|
|
|
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for
Plan Benefits
|
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46,003,255
|
|
|
|
|
|
|
|
|
|
|
|
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Net
Assets Available for Plan Benefits
|
|
|
|
|
|
|
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Beginning of
year
|
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2,193,509,224
|
|
|
|
|
|
|
|
|
|
|
|
|
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End of
year
|
|
$
|
2,239,512,479
|
|
$
|
|
|
See Notes to Financial
Statements.
The
Gillette Company Employees' Savings Plan
Notes
to Financial Statements
December
31, 2007 and 2006
Note
1 - Description of Plan
The Gillette
Company Employees’ Savings Plan (the "Plan") is sponsored by The Gillette
Company, a subsidiary of The Procter & Gamble Company
(collectively, the
"Company"). The
following description provides only general information and participants should
refer to the plan document for a more
complete
description of the Plan’s provisions.
General - The Plan is a defined contribution
plan subject to the provisions of the Employee Retirement Income Security Act of
1974 (ERISA), as amended. Regular
employees of
The Gillette Company
and its participating subsidiaries are eligible to join the Plan on their date
of hire, with the exception of the following employees:
(i) Any employee who
is hired by a Participating Company after September 30, 2006, excluding
employees located in the Iowa City Manufacturing location that are
covered by a
collective bargaining
agreement
(ii) Any employee who
is eligible to participate in The Procter & Gamble Profit Sharing Trust and
Employee Ownership Plan
(iii) Any employee
who is eligible to participate in The Profit Sharing Retirement Plan of The
Procter & Gamble Commercial Company or
The Procter &
Gamble Commercial Company Employees'
Savings Plan
At no time
may an employee be eligible to contribute to and receive Company contributions
from both this Plan and either The Profit Sharing Retirement Plan of
The Procter
& Gamble Commercial Company,
The Procter & Gamble Commercial Company Employees' Savings Plan or The
Procter & Gamble
Profit
Sharing Trust and Employee Ownership Plan.
Participant
Contributions - Eligible employees may voluntarily contribute from 2
percent to 10 percent of their compensation as matched savings and from
1 percent to
5 percent of their compensation
as unmatched savings. All contributions must be in 1 percent
increments.
All matched
savings contributed by an employee are divided equally between tax deferred and
taxed savings. Unmatched savings may be designated by an employee to
be either tax
deferred or taxed,
but not both. Tax deferred contributions made by an employee in any plan year
may not exceed the annual limit set by law.
Effective
October 1, 2007, the Plan was amended to allow participants who have attained
age 50 before the close of the plan year to make catch-up contributions
as provided
by the Internal Revenue Code.
The
Gillette Company Employees' Savings Plan
Notes
to Financial Statements
December
31, 2007 and 2006
Note
1 - Description of Plan (Continued)
Effective
January 1, 2008, no further contributions may be made to the Plan for any
participant who is not included in a unit covered by a collective bargaining
agreement that expressly provides for the application of the Plan to the
employees of such unit. Effective January 1, 2008, employees of the Company not
covered by a collective bargaining agreement are eligible to participate in The
Procter & Gamble Savings Plan. Participant contributions are
expected to decrease by 90 percent for 2008.
Employer
Contributions - The Company contributes $1.00 for every $1.00 of each
participant’s matched savings for the first 5 percent of each participant’s
compensation contributed and $0.20 for every $1.00 of the next 5 percent of each
participant’s compensation contributed.
Transfers
- Transfers into the Plan from The Gillette Company Employee Stock
Ownership Plan (the “ESOP”) may occur if participants are terminated and do not
elect payout of their ESOP balances within one full fiscal quarter from the date
of their termination. During 2007 and 2006, certain participant
balances were transferred back to the ESOP as they had made the appropriate
election and were mistakenly transferred to the Savings
Plan.
Vesting
- Participants are immediately vested in their own employee contributions plus
the actual earnings thereon. Matching contributions from the Company
vest
after the participant has
completed the
earliest of three
years of service, two years from date of entry into the Plan, or the attainment
of age 65. Participants are also
100 percent vested in the Company
contributions credited to
their accounts upon death, retirement, total and permanent
disability, or
Company-initiated termination
(other than for
cause as determined by the Company).
Participants’
Accounts - A separate account is established for each participant at the
time of enrollment in the Plan. The balance in each account is
invested, in accordance with the directions given by the participant, in one or
more of the Plan's investment fund offerings, including an option to invest in
Company stock. Participants may direct their account balance in any
of the various funds offered by the Plan.
Participants
are entitled to exercise voting rights for the shares of Company stock allocated
to their accounts.
The
Gillette Company Employees' Savings Plan
Notes
to Financial Statements
December
31, 2007 and 2006
Note
1 - Description of Plan (Continued)
Participant
Loans - The maximum loan available to each participant is the lesser of
(1) $50,000 reduced by the highest outstanding loan balance due from the
participant during the preceding twelve months or (2) 50 percent of the
participant’s vested account balance, reduced by the current outstanding loan
balance due from the participant. The minimum loan amount available
to participants is $500. Each loan shall bear interest at a rate
determined by the Master Savings Plan Committee. Repayment of the loan must be
made over a period not to exceed five years.
Plan
Expenses - The Company is the sponsor of the Plan. The Master
Savings Plan Committee, as provided in the plan agreement, has responsibility
for the administration of the Plan. Fidelity Management Trust Company
functions as trustee. Investment management fees are paid by the Plan
in accordance with the plan agreement. Certain other administrative
fees are paid by the Company.
Plan
Earnings - As of the close of each business day, the plan trustee is
responsible for determining the fair market value of each of the investment
options, which includes all accrued earnings. The increase or
decrease in the fair market value of each investment fund since the preceding
business day is allocated among the participant accounts invested in each fund
based on the proportionate number of shares or units of the fund held by each
participant at the close of the preceding business day.
With
respect to the Company’s stock fund, the trustee is responsible for determining
the participants’ accounts entitled to receive each quarterly dividend
and the number of shares to be
credited to each account,
as of the
quarterly ex-dividend date. Any interest or other income earned by
the Fund, other than dividends,
is allocated quarterly to participant
accounts on a proportionate
basis.
Benefit
Payments - A participant, surviving spouse, or other beneficiary may
elect to receive their account balance as a partial or total withdrawal or may
elect to have the proceeds of the distribution used to purchase an annuity
contract for his or her benefit through an insurer of his/her
choice.
Early
withdrawals may also be made in the event of financial hardship and other
circumstances, based upon special guidelines detailed in the plan
document.
Forfeitures
- Forfeitures by plan participants are used to reduce Company
contributions.
The
Gillette Company Employees' Savings Plan
Notes
to Financial Statements
December
31, 2007 and 2006
Note
2 - Summary of Significant Accounting Policies
Investments
- Investments are allocations of the assets of The Gillette Company Master
Savings Plan Trust (the Savings Plan Trust) based upon the proportionate
interest of the Plan in the Savings Plan Trust. See Note 4 for a
detailed description of the Savings Plan Trust.
Investments
of the Savings Plan Trust are stated at fair value except for fully
benefit-responsive synthetic guaranteed investment contracts which are valued at
contract value. Fair value for shares of The Procter
& Gamble Company common stock held in the Savings Plan Trust is defined as
the closing price of the common stock as reported by the New York Stock
Exchange. The fair value of investments is determined daily by the
trustee on a per-share basis using security prices quoted on national exchanges
for mutual funds, and amortized cost in the case of any short-term mutual funds
and money market securities held. The fair value of the commingled
fund is based on the fair value of the underlying investments held in the fund.
Participant loans are valued at their outstanding balances, which approximates
fair value.
The
Financial Accounting Standards Board Staff Position AAG INV-1 and SOP 94-4-1,
Reporting
of Fully Benefit-Responsive Investment Contracts Held by Certain Investment
Companies Subject to the AICPA Investment Company Guide and Defined-Contribution
Health and Welfare and Pension Plans, requires the statement of net
assets available for plan benefits present the fair value of the investment
contracts as well as the adjustment of the fully-benefit responsive investment
contracts from fair value to contract value. The related activity is
presented at contract value in the statement of changes in net assets available
for plan benefits. Contract value represents investments at cost plus
accrued interest income less amounts withdrawn to pay benefits. The
fair value of these investment contracts is based on discounting the related
cash flows utilizing current yields of similar investments with comparable
durations.
The
Gillette Company Employees' Savings Plan
Notes
to Financial Statements
December
31, 2007 and 2006
Note
2 - Summary of Significant Accounting Policies (Continued)
Synthetic
Investment Contracts - The
Savings Plan Trust invests in synthetic investment contracts (synthetic
GICs). A synthetic GIC is a wrap contract paired with an underlying
investment or investments, usually a portfolio, owned by the master trust, of
high-quality, intermediate term fixed income securities. The master
trust purchases a wrapper contract from a financial services
institution. Synthetic GICs credit a stated interest rate for a
specified period of time. Investment gains and losses are amortized
over the expected duration through the calculation of the interest rate
applicable to the master trust on a prospective basis. Synthetic GICs
provide for a variable crediting rate, which typically resets at least
quarterly, and the issuer of the wrap contract provides assurance that future
adjustments to the crediting rate cannot result in a crediting rate less than
zero. The crediting rate is primarily based on the current
yield-to-maturity of the covered investments, plus or minus amortization of the
difference between the market value and contract value of the covered
investments over the duration of the covered investments at the time of
computation. The crediting rate is most impacted by the change in the
annual effective yield to maturity of the underlying securities, but is also
affected by the differential between the contract value and the market value of
the covered investments. This difference is amortized over the
duration of the covered investments. Depending on the change in
duration from reset period to reset period, the magnitude of the impact to the
crediting rate of the contract to market difference is heightened or
lessened. The crediting rate can be adjusted periodically and is
usually adjusted either monthly or quarterly, but in no event is the crediting
rate less than 0%.
Certain
events limit the ability of the master trust to transact at contract value with
the financial institution issuer. Such events include the following:
(i) amendments to the plan documents (including complete or partial plan
termination or merger with another plan) (ii) changes to the master trust’s
prohibition on competing investment options or deletion of equity wash
provisions; (iii) bankruptcy of the plan sponsor or other plan sponsor events
(e.g. divestitures or spin-offs of a subsidiary) which cause a significant
withdrawal from the master trust or (iv) the failure of the trust to qualify for
exemption from federal income taxes or any required prohibited transaction to
qualify for exemption under ERISA. The plan administrator does not
believe that the occurrence of any such event, which would limit the
participant’s ability to transact at contract value, is probable.
The
Gillette Company Employees' Savings Plan
Notes
to Financial Statements
December
31, 2007 and 2006
Note
2 - Summary of Significant Accounting Policies (Continued)
The
synthetic investment contracts generally impose conditions on both the master
trust and the issuer. If an event of default occurs and is not cured,
the non-defaulting party may terminate the contract. The following
may cause the master trust to be in default: a breach of material obligation
under the contract; a material misrepresentation; or a material amendment to the
plan agreements. The issuer may be in default if it breaches a
material obligation under the investment contract; makes a material
misrepresentation; has a decline in its long term credit rating below a
threshold set forth in the contract; is acquired or reorganized and the
successor issuer does not satisfy the investment or credit guidelines applicable
to issuers. If, in the event of default of an issuer, the master
trust were unable to obtain a replacement investment contract, withdrawing plans
may experience losses if the value of the master trust’s assets no longer
covered by the contract is below contract value. The master trust may
seek to add additional issuers over time to diversify the master trust’s
exposure to such risk, but there is no assurance the master trust may be able to
do so. The combination of the default of an issuer and an inability
to obtain a replacement agreement could render the master trust unable to
achieve its objective of maintaining a stable contract value. The
terms of an investment contract generally provide for settlement of payments
only upon termination of the contract or total liquidation of the covered
investments. Generally, payments will be made pro-rata, based on the
percentage of investments covered by each issuer. Contract
termination occurs whenever the contract value or market value of the covered
investments reaches zero or upon certain events of default. If the
contract terminates due to issuer default (other than a default occurring
because of a decline in its rating), the issuer will generally be required to
pay to the master trust the excess, if any, of contract value over market value
on the date of termination. If a synthetic GIC terminates due to a
decline in the ratings of the issuer, the issuer may be required to pay to the
master trust the cost of acquiring a replacement contract (i.e. replacement
cost) within the meaning of the contract. If the contract terminates
when the market value equals zero, the issuer will pay the excess of contract
value over market value to the master trust to the extent necessary for the
master trust to satisfy outstanding contract value withdrawal
requests. Contract termination also may occur by either party upon
election and notice.
The
Gillette Company Employees' Savings Plan
Notes
to Financial Statements
December
31, 2007 and 2006
Note
2 - Summary of Significant Accounting Policies (Continued)
Since
synthetic GICs are fully benefit-responsive, contract value is the relevant
measurement attribute for that portion of the net assets available for benefits
attributable to the synthetic GICs. Contract value represents
contributions made under the contract, plus earnings, less participant
withdrawals and administrative expenses. Participants may ordinarily
direct the withdrawal or transfer of all or a portion of their investment at
contract value.
| |
|
2007 |
|
|
2006 |
|
| |
|
|
|
|
|
|
| Average yield for
Synthetic GICs in the Savings Plan Trust |
|
|
|
|
|
|
| Based
on actual earnings |
|
|
4.78 |
% |
|
|
5.03 |
% |
| Based
on interest rate credited to participants |
|
|
4.49 |
% |
|
|
4.35 |
% |
Payment
of Benefits - Benefits are recorded when paid.
Use
of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and changes therein and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of additions and deductions during the reporting
period. Actual results could differ from those
estimates.
Risks
and Uncertainties – The Plan invests in various investment
securities. Investment securities are exposed to various risks such
as interest rate, market, and credit risks. Due to the level of risk
associated with certain investment securities, it is at least reasonably
possible that changes could materially affect participants’ account balances and
the amounts reported in the statement of net assets available for
benefits.
New
Accounting Pronouncement - In
September 2006, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 157, Fair
Value Measurements ("SFAS 157"). SFAS 157 defines fair value, establishes
a framework for measuring fair value in accordance with generally accepted
accounting principles, and expands disclosures about fair value measurements.
The provisions of SFAS 157 are effective for the plan year beginning January 1,
2008. The Company is currently evaluating the impact, if any, of the provisions
of SFAS 157 on the Plan’s financial statements.
The
Gillette Company Employees' Savings Plan
Notes
to Financial Statements
December
31, 2007 and 2006
Note
3 - Plan Termination
The
Company expects the Plan to continue indefinitely, but reserves the right to
amend or terminate the Plan, subject to restrictions, at its
discretion.
If the
Plan is terminated or if contributions are completely discontinued, each
participant’s interest in that portion of their account balance attributable to
Company contributions shall become fully vested. Upon termination of
the Plan, the Savings Plan Trust may continue in existence at the direction of
the board of directors of the Company, subject to the provisions of the Plan and
the Savings Plan Trust agreement, or the Savings Plan Trust may be terminated
and the assets distributed to participants. Further, in the event the
Plan was terminated after the merger between The Procter & Gamble Company
and The Gillette Company, the Plan’s trust would be continued so long as it held
plan assets, and distributions would be made to participants by the trustee as
if the Plan had not been terminated.
The
Gillette Company Employees' Savings Plan
Notes
to Financial Statements
December
31, 2007 and 2006
Note
4 - Master Trust
Assets of the Savings Plan
Trust are held in trust by Fidelity Management Trust Company. The plans
participating in the Savings Plan Trust are The Gillette Company Employees’
Savings Plan and The Gillette Company Employee Stock Ownership
Plan. Trust income is allocated ratably between the plans in
accordance with the assets of each plan invested in the Savings Plan
Trust. The assets of the Savings Plan Trust at December 31, 2007 and
2006 are
as follows:
| |
|
2007
|
|
2006
|
| Assets, at fair
value: |
|
|
|
|
| Marketable
securities: |
|
|
|
|
|
The
Procter & Gamble Company Stock Fund
|
|
$ |
1,469,770,182 |
$ |
1,454,309,410 |
| Registered investment
companies: |
|
|
|
|
|
| AF
Washington Mutual Investors Fund- |
|
|
|
|
|
| Class
R-5 |
|
|
33,379,851 |
|
31,201,036
|
| Allianz
CCM Mid Cap-Institutional Class |
|
|
45,896,655 |
|
36,493,626
|
| Fidelity
Diversified International Fund |
|
|
113,865,858 |
|
94,791,486
|
| Fidelity
Emerging Markets Fund |
|
|
76,362,652 |
|
47,356,526
|
| Fidelity
Growth & Income Portfolio |
|
|
36,026,674 |
|
39,681,981
|
| Fidelity
Growth Company Fund |
|
|
127,979,258 |
|
114,332,335
|
| Fidelity
Magellan Fund |
|
|
94,159,290 |
|
87,380,704
|
| Fidelity
Retirement Government Money Market |
|
|
|
|
|
| Portfolio |
|
|
50,921,067 |
|
45,774,875
|
| Fidelity
Short Term Investment Fund |
|
|
8,538,137 |
|
4,386,827
|
| Fidelity
U.S. Bond Index Fund |
|
|
40,416,757 |
|
36,383,191
|
| Royce
Low PR Stock |
|
|
27,080,352 |
|
24,358,327 |
| Vanguard
Balanced Index-Institutional Class |
|
|
56,046,694 |
|
51,662,695 |
| Vanguard
Total Stock Market Issue- |
|
|
|
|
|
| Institutional
Class |
|
|
29,339,269 |
|
24,107,911 |
| Commingled
Pool: |
|
|
|
|
|
| Fidelity
U.S. Equity Index Commingled Fund |
|
|
109,274,539 |
|
115,844,767 |
| Synthetic
investment contracts |
|
|
326,238,612 |
|
349,315,341 |
| Pending
transactions and other |
|
|
(587,621) |
|
(1,219,282) |
| |
|
|
|
|
|
| Total
assets at fair value |
|
|
2,644,708,226 |
|
2,556,161,756 |
| |
|
|
|
|
|
| Adjustment
from fair value to contract value for |
|
|
|
|
|
| synthetic
investment contracts |
|
|
(2,166,686) |
|
4,895,579
|
| |
|
|
|
|
|
| Total
assets |
|
$ |
2,642,541,540 |
$ |
2,561,057,335 |
The
Gillette Company Employees' Savings Plan
Notes
to Financial Statements
December
31, 2007 and 2006
Note 4 - Master Trust
(Continued)
| |
|
2007 |
|
2006 |
| |
|
|
|
|
| Assets
allocated to The Gillette Company |
|
|
|
|
| Employees'
Savings Plan |
$ |
2,215,553,859 |
$ |
2,168,318,405 |
| |
|
|
|
|
| Assets
allocated to The Gillette Company |
|
|
|
|
| Employees
Stock Ownership Plan |
$ |
426,987,681 |
$ |
392,738,930 |
The
investment income of the Savings Plan Trust for the years ended December 31,
2007 and 2006 is as follows:
| |
|
2007 |
|
2006 |
| |
|
|
|
|
| Investment
income (loss): |
|
|
|
|
| Net
appreciation (depreciation) in fair value of |
|
|
|
|
| investments: |
|
|
|
|
| The
Procter & Gamble Company |
|
|
|
|
| Stock
Fund |
$ |
190,297,910 |
$ |
150,578,445 |
| AF
Washington Mutual Investors Fund- |
|
|
|
|
| Class
R-5 |
|
(1,176,193) |
|
3,154,665 |
| Allianz
CCM Mid Cap-Institutional Class |
|
3,546,263 |
|
(2,283,334) |
| Fidelity
Diversified International Fund |
|
7,531,614 |
|
9,497,856 |
| Fidelity
Emerging Markets Fund |
|
19,194,523 |
|
10,440,093 |
| Fidelity
Growth & Income Portfolio |
|
(4,689,236) |
|
(2,933,145) |
| Fidelity
Growth Company Fund |
|
20,803,184 |
|
10,065,304 |
| Fidelity
Magellan Fund |
|
4,267,258 |
|
(14,809,819) |
| Fidelity
U.S. Bond Index Fund |
|
147,540 |
|
(107,011) |
| John
Hancock Small Cap Growth Fund- |
|
|
|
|
| Class
A |
|
- |
|
1,509,471 |
| Royce
Low PR Stock |
|
(3,251,363) |
|
(1,058,434) |
| Vanguard
Balanced Index-Institutional Class |
|
1,610,180 |
|
3,639,265 |
|
Vanguard Total Stock
Market Index Fund- |
|
|
|
|
| Institutional
Class |
|
862,209 |
|
2,548,238 |
| Fidelity
U.S. Equity Index Commingled Pool |
|
6,336,421 |
|
16,558,399 |
| Dividends |
|
75,610,815 |
|
76,895,479 |
| Interest |
|
15,447,896 |
|
16,715,456 |
| |
|
|
|
|
| Net
investment income |
$ |
336,539,021 |
$ |
280,410,928 |
The
Gillette Company Employees' Savings Plan
Notes
to Financial Statements
December
31, 2007 and 2006
Note
5 - Income Taxes
A
favorable tax determination letter was received from the Internal Revenue
Service on March 13, 2002 stating that the existing Plan and its underlying
trust qualified under Section 401(a) of the Internal Revenue Code of 1986 (the
Code) as a profit-sharing plan, and are exempt from federal income
taxes. Further, the features of the Plan relating to tax-deferred
savings qualified under Section 401(k) of the Code. The Plan has been
amended since receiving the determination letter. However, the
Company believes the Plan is designed and is currently being operated in
compliance with the applicable provisions of the Code.
Note
6 - Party-in-Interest Transactions
Certain
plan assets are in investment funds managed by Fidelity Management Trust Company
or its affiliates. Fidelity Management Trust Company is the trustee
of the Plan and, therefore, these transactions qualify as party-in-interest
transactions as defined under ERISA guidelines.
Note
7 - Reconciliation to Form 5500
The
following is a reconciliation of net assets available for benefits per the
financial statements to Form 5500 at December 31, 2007 and 2006:
| |
|
2007 |
|
2006 |
| Net assets
available for benefits |
|
|
|
|
| per
financial statements |
$ |
2,239,512,479 |
$ |
2,193,509,224 |
| Adjustment to
fair value for Synthetic GICs |
|
|
|
|
| held
in the Savings Plan Trust |
|
2,166,686 |
|
(4,895,579) |
| |
|
|
|
|
| Net assets
available for benefits per Form 5500 |
$ |
2,241,679,165 |
$ |
2,188,613,645 |
The
following is a reconciliation of investment income per the financial statements
to Form 5500 for the years ended December 31, 2007 and 2006:
| |
|
2007 |
|
2006 |
| Total
investment income per financial statements |
$ |
274,628,980 |
$ |
233,897,692 |
| Adjustment to
fair value for Synthetic GICs |
|
|
|
|
| held
in the Savings Plan Trust |
|
7,062,265 |
|
(4,895,579) |
| |
|
|
|
|
| Total
investment income per Form 5500 |
$ |
281,691,245 |
$ |
229,002,113 |
The
Gillette Company Employees' Savings Plan
Schedule
of Assets Held at End of Year
Form
5500, Schedule H, Item 4i
EIN
04-1366970, Plan No. 002
December 31,
2007
|
(a)(b)
Identity of Issuer,
Borrrower,
Lessor, or Similar
Party
|
(c)
Decscription
of investment
|
(d)
Cost
|
(e)
Current
Value
|
| |
|
|
|
| Participants |
Participant loans
bearing interest at 5.00% to 10.50% |
$ -
|
$ 23,958,620 |
Schedule 1
EXHIBIT
NO. 23
Consent
of Independent Registered Public Accounting Firm
We
consent to the incorporation by reference in the
registration statements (Nos. 333-128859 and 333-146904) on Form S-8 of our
report dated June 26, 2008 appearing in the annual report on Form 11-K of The
Gillette Company Employees’ Savings Plan for the year ended December 31,
2007.
/s/ Plante & Moran,
PLLC
Southfield,
Michigan
June 27,
2008