SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
\X\ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 for the fiscal year ended December 31, 2001, or
\ \ TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the transition period from ___________ to _______________
Commission file number 001-00434
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below: The Procter & Gamble Subsidiaries Savings Plan,
The Procter & Gamble Company, Two Procter & Gamble Plaza, Cincinnati, Ohio
45202.
B. 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.
REQUIRED INFORMATION
Item 4. Plan Financial Statements and Schedules Prepared in Accordance With the
Financial Reporting Requirements of ERISA.
THE PROCTER & GAMBLE
SUBSIDIARIES SAVINGS PLAN
FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 2001 AND 2000 AND SUPPLEMENTAL
SCHEDULE AS OF DECEMBER 31, 2001 AND
INDEPENDENT AUDITORS' REPORT
THE PROCTER & GAMBLE SUBSIDIARIES SAVINGS PLAN
TABLE OF CONTENTS
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PAGE
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits as of
December 31, 2001 and 2000 2
Statements of Changes in Net Assets Available for Benefits for
the Years Ended December 31, 2001 and 2000 3
Notes to Financial Statements for the Years Ended
December 31, 2001 and 2000 4
SUPPLEMENTAL SCHEDULE - Assets Held for Investment Purposes
(Schedule H, Part IV, Line 4i of Form 5500), December 31, 2001 10
SUPPLEMENTAL SCHEDULES OMITTED - The following schedules were omitted
because of the absence of conditions under which they are required:
Reportable Transactions
Assets Acquired and Disposed of Within the Plan Year
Party-in-Interest Transactions
Obligations in Default
Leases in Default
INDEPENDENT AUDITORS' REPORT
To The Procter & Gamble Master Savings Plan Committee:
We have audited the accompanying statements of net assets available for benefits
of The Procter & Gamble Subsidiaries Savings Plan (the "Plan") as of December
31, 2001 and 2000, and the related statements of changes in net assets available
for 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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit 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, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
2001 and 2000 and the changes in net assets available for benefits for the years
then ended in conformity with accounting principles generally accepted in the
United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule listed in the
Table of Contents 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 schedule is the responsibility of the Plan's management. Such schedule
has been subjected to the auditing procedures applied in our audit of the basic
2001 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/ DELOITTE & TOUCHE LLP
--------------------------
DELOITTE & TOUCHE LLP
June 10, 2002
THE PROCTER & GAMBLE SUBSIDIARIES SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2001 AND 2000
-----------------------------------------------------------------------------------------
2001 2000
---- ----
ASSETS - Investments at fair value:
Procter & Gamble Common Stock Fund $ 6,706,757
Mutual funds 91,390,270
Loans to participants 2,628,726
Investment in the Procter and Gamble Master Savings Trust $ 11,785,585
------------ ------------
Total assets 100,725,753 11,785,585
LIABILITIES - Accrued administrative expenses 2,035 8,377
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $100,723,718 $ 11,777,208
============ ============
See notes to financial statements.
THE PROCTER & GAMBLE SUBSIDIARIES SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------------------
2001 2000
---- ----
ADDITIONS - Investment income (loss):
Net appreciation in fair value of investments $ 2,173,293
Interest and dividend income 438,279
Equity in net losses of the Procter and Gamble
Master Savings Trust (1,055,736) $ (1,782,439)
------------ ------------
Total changes 1,555,836 (1,782,439)
------------ ------------
DEDUCTIONS:
Distributions and withdrawals to participants 1,317,849 1,320,148
Administrative expenses 19,852 34,584
------------ ------------
Total deductions 1,337,701 1,354,732
------------ ------------
NET INCREASE (DECREASE) PRIOR TO TRANSFERS 218,135 (3,137,171)
TRANSFERS FROM AFFILIATED PLANS 88,728,375
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 11,777,208 14,914,379
------------ ------------
End of year $100,723,718 $ 11,777,208
============ ============
See notes to financial statements.
THE PROCTER & GAMBLE SUBSIDIARIES SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
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1. DESCRIPTION OF THE PLAN
The following brief description of The Procter & Gamble Subsidiaries
Savings Plan (the "Plan) is provided for general information only.
Participants should refer to the Plan agreement for more complete
information.
GENERAL - The Plan was established effective March 2, 1990 upon the
acquisition of the Hawaiian Punch Division of DelMonte by The Procter &
Gamble Company ("Company"). Effective March 14, 1996, the Sundor Brands
Savings Plan, Max Factor Savings Plan and Speas Savings Plan were merged
into the Plan. Effective November 2, 2001, the Tambrands, Inc. Savings
Plan ("Tambrands") was merged into the Plan. Effective December 1, 2001,
the Iams Company Savings Plan ("Iams") and Recovery Engineering, Inc.
Salary Savings Plan ("Pur") were merged into the Plan. The Plan is a
voluntary defined contribution plan covering all eligible employees of
Sundor Group, Inc., including the Sundor Brands and Hawaiian Punch
divisions, Max Factor & Company, Speas Company, Tambrands Company, Iams
Company and Pur Company, all subsidiaries of the Company. The Plan is
subject to the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA).
CONTRIBUTIONS AND VESTING - Effective April 1996, all contributions to the
Plan were suspended and all participants became fully vested. Tambrands,
Iams and Pur Savings Plans were frozen prior to conversion into the Plan.
DISTRIBUTIONS - The Plan provides for benefits to be paid upon retirement,
disability, death, or separation other than retirement as defined by the
Plan document. Plan benefits may be made in a lump sum of cash or shares
of common stock, in installment payments over a period not to exceed 180
months or an annuity. Retired or terminated employees shall commence
benefit payments upon attainment of age 70 1/2.
WITHDRAWALS - A participant may withdraw any portion of after-tax
contributions once in any six-month period. Participants who have attained
age 59 1/2 or have demonstrated financial hardship may withdraw all or any
portion of their before-tax contributions once in any six-month period.
PLAN TERMINATION - Although the Company has not expressed any intent to do
so, it has the right under the Plan to terminate the Plan subject to the
provisions of ERISA.
ADMINISTRATION - The Plan is administered by the Master Savings Plan
Committee consisting of four members appointed by the Board of Directors
of the Company, except for duties specifically vested in the trustee,
American Century, effective November 1, 2001 ("current trustee") or PNC
Bank, Ohio, N.A. ("prior trustee"), who is also appointed by the Board of
Directors of the Company.
LOANS - The Plan has a loan feature under which active participants may
borrow up to 50% of the current value of their vested account values
exclusive of amounts attributable to Company contributions (up to a
maximum of $50,000). Loans are repaid via payroll deduction over a period
of up to five years, except for loans used to purchase a primary residence
which are repaid via payroll deduction over a period of up to 10 years.
Principal and interest paid is credited to applicable funds in the
borrower's account. Former Company employees with deferred balances may
not borrow against their accounts. Upon participant termination or
retirement, the outstanding loan balance is treated as a distribution to
the participant.
TRANSFERS FROM AFFILIATED PLANS - Amount represents account balances of
Tambrands, Iams and Pur employees transferred into the Plan.
PARTICIPANT ACCOUNTS AND INVESTMENT OPTIONS - Each participant's account
is credited with an allocation of the Plan's earnings or losses. The
benefit to which a participant is entitled is limited to the benefit that
can be provided from their account. As of November 1, 2001 and after
conversion to the current trustee from the prior trustee, participants can
allocate their account in one or all of the following investment options
offered by the plan:
AMERICAN CENTURY HERITAGE FUND - The prospectus states that this fund
invests in a portfolio of equity securities issued by small to medium
companies.
J.P. MORGAN PRIME MONEY MARKET FUND - The prospectus states that this
fund invests in short length maturity, interest-bearing instruments.
J.P. MORGAN BOND FUND - The prospectus states that this fund invests in
a diversified portfolio of publicly and privately traded corporate,
government, private placement, asset backed, and mortgage backed bonds.
PUTNAM INTERNATIONAL GROWTH FUND - The prospectus for this fund
indicates that it invests in a diversified portfolio of equity
securities of foreign corporations.
J.P. MORGAN DISCIPLINED EQUITY FUND - The prospectus states that this
fund invests in equity securities of approximately 300 domestic, large
company stocks.
COMPANY STOCK FUND - This fund invests in shares of The Procter &
Gamble Company common stock.
PRE-MIXED PORTFOLIO FUNDS - Three funds invested in varying percentages
to the investment options noted above, excluding the Company Stock
Fund.
Through November 1, 2001 and until conversion to the current trustee from
the prior trustee, participants could allocate their account in one or all
of the following investment options offered by the Plan:
ENHANCED CASH FUND - The prospectus states that this fund invests in
short to medium length maturity, interest-bearing instruments.
COMPANY STOCK FUND - This fund invests in shares of The Procter &
Gamble Company common stock.
ACTIVE FIXED-INCOME CORE FUND - The prospectus states that this fund
invests in a diversified portfolio of publicly and privately traded
corporate, government, international, and mortgage backed bonds.
DISCIPLINED EQUITY FUND - The prospectus states that this fund invests
in equity securities of approximately 300 domestic, large company
stocks.
DIVERSIFIED FUND - The prospectus states that this fund invests in a
balanced portfolio consisting of both equity and fixed securities.
INTERNATIONAL EQUITY FUND - The prospectus states that this fund
invests in a diversified portfolio of equity securities of foreign
corporations.
SMALL COMPANY EQUITY II FUND - The prospectus states that this fund
invests in a portfolio of equity securities issued by small companies.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The accompanying financial statements have been
prepared on the accrual basis of accounting and the Plan's net assets and
transactions are recorded at fair value. The Plan's investment in The
Procter & Gamble Company common stock, Putnam International Fund and
American Century Heritage Fund are valued at the closing prices on an
established security exchange. The Plan's J.P. Morgan investment funds
(funds) are valued by the fund manager, J.P. Morgan Investment Management,
Inc., based upon the fair value of the funds' underlying investments.
Income from investments is recognized when earned and is allocated to each
plan participating in the Plan by the current trustee and the prior
trustee and to each participant's account by the Plan's recordkeeper.
EXPENSES OF THE PLAN - Investment management expenses were paid by the
Company after November 1, 2001. Prior to November 1, 2001 and 2000,
Investment management expenses were paid by the Plan. All other fees are
paid by the Company.
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 amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
The Plan invests in Company common stock and in various mutual funds which
include investments in U.S. Government securities, corporate debt
instruments, and corporate stocks. Investment securities, in general, are
exposed to various risks, such as interest rate, credit, and overall
market volatility. Due to the level of risk associated with certain
investment securities, it is reasonably possible that changes in the
values of investment securities will occur in the near term and that such
changes could materially affect the amounts reported in the statements of
net assets available for plan benefits.
ACCOUNTING POLICIES - On January 1, 2001, the Plan adopted Statement of
Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative
Instruments and Hedging Activities, as amended by SFAS No. 138, Accounting
for Certain Derivative Instruments and Certain Hedging Activities. SFAS
No. 133 establishes accounting and reporting standards for derivative
instruments and for hedging activities. It requires that all derivatives,
including those embedded in other contracts, be recognized as either
assets or liabilities and that those financial instruments be measured at
fair value. The accounting for changes in the fair value of derivatives
depends on their intended use and designation. The adoption of SFAS No.
133 did not have a material effect on the Plan's financial statements.
3. TAX STATUS
The Internal Revenue Service has determined and informed the Company by
letter dated March 7, 2002 that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code (IRC).
The Plan has been amended since receiving the latest determination letter.
However, the plan administrator believes that the Plan is designed and is
currently being operated in compliance with the applicable provisions of
the IRC at December 31, 2001 and 2000. Therefore, they believe that the
Plan was qualified and tax-exempt as of December 31, 2001 and 2000 and no
provision for income taxes has been reflected in the accompanying
financial statements.
4. INVESTMENTS
The following is a summary of the Plan's investments for the year ended
December 31, 2001. Investments that represent five percent or more of the
Plan's net assets are separately identified.
Description 2001
----------- ----
Procter & Gamble common stock $ 6,706,757
J.P. Morgan Disciplined Equity Fund 46,289,792
J.P. Morgan Money Market Fund 20,086,960
American Century Heritage Fund 11,827,951
Putnam International Growth Fund 7,420,821
J.P. Morgan Bond Fund 5,764,746
Other 2,628,726
------------
Total $100,725,753
============
Interest and dividend income and changes in the Plan's investments after
November 1, 2001, which include investments bought and sold as well as
held during the year ended December 31, 2001, consist of the following:
2001
----
Dividend income $ 31,500
Interest income 406,779
------------
438,279
Net appreciation in fair value of: ------------
Mutual funds 1,913,640
Procter & Gamble common stock 259,653
------------
2,173,293
------------
Total $ 2,611,572
============
5. INTEREST IN MASTER TRUST
Effective January 1, 1993, the Company formed the Master Trust in
accordance with a master trust agreement with PNC Bank. Effective November
1, 2001 and upon conversion to American Century, the Plan no longer
participates in the Master Trust.
Use of a master trust permitted the commingling of investments that fund
various Company-sponsored defined contribution plans for investment and
administrative purposes. Although assets are commingled in the Master
Trust, PNC Bank maintains records for the purpose of allocating
contributions and changes in net assets of the Master Trust to
participating plans based upon each plan's proportionate interest in the
Master Trust. The following represents the 2001 and 2000 audited financial
information regarding the net assets and investment income of the Master
Trust:
Investment income (loss) from the Master Trust for the year ended
December 31, 2001 is summarized as follows:
COMPANY JP MORGAN
STOCK FUND FUNDS TOTAL
---------- --------- -----
Net appreciation (depreciation) in fair value
of investments $ 221,329 $ (9,489,678) $ (9,268,349)
Dividends 1,258,927 1,258,927
Interest 2,848 110,122 112,970
----------- ------------ ------------
Total $ 1,483,104 $ (9,379,556) $ (7,896,452)
=========== ============ ============
Plan's equity in net losses of Master Trust $ (108,565) $ (947,171) $ (1,055,736)
=========== ============ ============
Investments, at fair value, held by the Master Trust at December 31,
2000 are summarized as follows:
COMPANY JP MORGAN
STOCK FUND FUNDS TOTAL
---------- --------- -----
The Procter & Gamble Company common
stock $ 70,010,072 $ 70,010,072
Mutual funds $147,674,640 147,674,640
Short-term investments 1,799 3,796 5,595
Accrued interest and dividends 139 1,912 2,051
------------ ------------ -------------
Total investments at fair value $ 70,012,010 $147,680,348 $217,692,358
============ ============ ============
Plan's investment in Master Trust $ 3,367,793 $ 8,417,792 $ 11,785,585
============ ============ ============
Plan's percentage ownership interest in
Master Trust 5 % 6 % 5 %
============ ============ ============
Investment loss from the Master Trust for the year ended December 31,
2000 is summarized as follows:
COMPANY JP MORGAN
STOCK FUND FUNDS TOTAL
---------- --------- -----
Net depreciation in fair value of investments $(25,585,173) $ (8,079,528) $(33,664,701)
Dividends 1,183,956 1,183,956
Interest 4,967 10,478 15,445
------------ ------------ -------------
Total $(24,396,250) $ (8,069,050) $(32,465,300)
============ ============ ============
Plan's equity in net losses of Master Trust $ (1,224,580) $ (557,859) $ (1,782,439)
============ ============ ============
6. DISTRIBUTIONS PAYABLE
Distributions payable to participants at December 31, 2001 and 2000 are
approximately $44,155 and $700, respectively.
7. SUBSEQUENT EVENTS
Effective March 1, 2002, the Richardson-Vicks Savings Plan was merged into
the Plan. Effective May 1, 2002, The Procter and Gamble Subsidiary Savings
and Investment Plan and the Procter & Gamble Pharmaceuticals Savings Plan
were merged into the Plan.
******
THE PROCTER & GAMBLE SUBSIDIARIES SAVINGS PLAN
ASSETS HELD FOR INVESTMENT (SCHEDULE H, PART IV, LINE 4I OF FORM 5500),
DECEMBER 31, 2001 (A)
--------------------------------------------------------------------------------
INVESTMENT FAIR VALUE
Procter & Gamble common stock $ 6,706,757
J.P. Morgan Disciplined Equity Fund 46,289,792
J.P. Morgan Money Market Fund 20,086,960
American Century Heritage Fund 11,827,951
Putnam International Growth Fund 7,420,821
J.P. Morgan Bond Fund 5,764,746
Loans to participants - 486 loans with
maturities ranging from January 2002 to October 2016
and interest rates ranging from 6.5% to 11.5% 2,628,726
------------
$100,725,753
============
(A) The information in this schedule was certified by the trustee of the Plan.
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 PROCTER & GAMBLE SUBSIDIARIES SAVINGS PLAN
/S/THOMAS J. MESS
Date: June 28, 2002 ------------------------------------------
Thomas J. Mess
Secretary for Trustees
EXHIBIT INDEX
Exhibit No. Page No.
23 Consent of Deloitte & Touche