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 and
Investment 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 AND
INVESTMENT 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 AND
INVESTMENT PLAN
TABLE OF CONTENTS
--------------------------------------------------------------------------------
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
(Schedule H, Part IV, Line 4i of Form 5500), December 31, 2001 8
SUPPLEMENTAL SCHEDULES OMITTED - The following schedules were omitted
because of the absence of conditions under which they are required or
due to their inclusion in information filed by The Procter & Gamble
Master Savings Trust:
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 and Investment 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
AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------
2001 2000
---- ----
ASSETS:
Investment in The Procter & Gamble Master
Savings Trust, at fair value $ 28,986,204 $ 5,609,933
Loans to participants 869,392 56,681
Investment income receivable 33,288 892
------------ ----------
Total assets 29,888,884 5,667,506
LIABILITIES - Accrued administrative expenses 21,192 4,946
------------ -----------
NET ASSETS AVAILABLE FOR BENEFITS $ 29,867,692 $ 5,662,560
============ ============
See notes to financial statements.
THE PROCTER & GAMBLE SUBSIDIARIES SAVINGS
AND INVESTMENT 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):
Equity in net earnings (losses) of
The Procter & Gamble Master Savings Trust $ 779,661 $ (482,315)
Interest 77,313 5,789
------------ -----------
Total changes 856,974 (476,526)
------------ -----------
DEDUCTIONS:
Distributions and withdrawals to participants 2,247,317 724,897
Administrative expenses 67,409 20,370
------------ -----------
Total deductions 2,314,726 745,267
------------ -----------
NET DECREASE PRIOR TO TRANSFER (1,457,752) (1,221,793)
TRANSFER FROM AFFILIATED PLANS 25,662,884
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 5,662,560 6,884,353
------------ -----------
End of year $ 29,867,692 $ 5,662,560
============ ===========
See notes to financial statements.
THE PROCTER & GAMBLE SUBSIDIARIES SAVINGS
AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following brief description of The Procter & Gamble Subsidiaries
Savings and Investment Plan (the "Plan") is provided for general
information purposes only. Participants should refer to the Plan agreement
for more complete information.
GENERAL - The Plan was established effective April 1, 1989 and is subject
to the provisions of the Employee Retirement Income Security Act of 1974
(ERISA). The Plan is a defined contribution plan covering substantially
all employees of Maryland Club Foods, Inc., all eligible employees of
Shulton, Inc., former employees of Fisher Nut Company who were members of
the Twin Cities Bakery and Confectionery Workers Union, Local No. 22, and
all eligible employees of Dover Baby Wipes Company and Giorgio Beverly
Hills, Inc. Maryland Club Foods, Inc. was sold in May 1994 and Fisher Nut
Company was dissolved in July 1998. Effective March 14, 1996, the Shulton
Savings Plan and Fisher Nut Savings Plan were merged into the Maryland
Club Foods, Inc. Retirement Savings Plan and The Procter & Gamble Company
("Company"), plan sponsor, changed the Plan name to The Procter & Gamble
Subsidiaries Savings and Investment Plan. Effective May 1, 2001, the Dover
Savings and Investment Plan ("Dover") and the Giorgio Employee Savings
Plan ("Giorgio") were merged into the Plan.
CONTRIBUTIONS AND VESTING - Effective April 1996, all contributions to the
Plan were suspended and all participants became fully vested. Dover and
Giorgio contributions were suspended prior to merging with 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 or in installment payments over a period not to exceed 120
months. 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 - Subsequent to December 31, 2001, the Company terminated
the Plan subject to the provisions of ERISA (Note 6).
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, PNC
Bank, Ohio, N.A. ("PNC Bank"), who is also appointed by the Board of
Directors of the Company.
TRANSFER FROM AFFILIATED PLANS - Amounts represent account balances of
Dover and Giorgio Company employees transferred into the Plan.
LOANS - The Plan allows participants to borrow funds from their accounts
in certain circumstances up to maximum amounts specified in the Plan
agreement. Loans are repayable in at least monthly installments of
principal and interest over a maximum term of five years (fifteen years if
the loan is used to purchase a primary residence). Principal and interest
paid is credited to applicable funds in the borrower's account. Upon
termination or retirement, the outstanding loan balance will be treated as
a distribution to the participant.
PARTICIPANT ACCOUNTS AND INVESTMENT OPTIONS - Each participant account is
credited with an allocation of Plan earnings. The benefit to which a
participant is entitled is the vested benefit that can be provided from
the participant's account. Participants may allocate their accounts in one
or all of the following investment options offered by the Plan (Note 4):
ENHANCED CASH FUND - The prospectus indicates that this fund invests in
short to medium length maturity, interest-bearing instruments.
COMPANY STOCK FUND - A fund that invests in shares of The Procter &
Gamble Company common stock.
ACTIVE FIXED-INCOME CORE FUND - The prospectus indicates 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 indicates that this fund
invests in equity securities of approximately 300 domestic, large
company stocks.
DIVERSIFIED FUND - The prospectus indicates that this fund invests in a
balanced portfolio consisting of both equity and fixed securities.
INTERNATIONAL EQUITY FUND - The prospectus indicates that this fund
invests in a diversified portfolio of equity securities of foreign
corporations.
SMALL COMPANY EQUITY II FUND - The prospectus indicates 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 Company
common stock is valued at the closing price on an established security
exchange. The Plan's investment funds (funds) are valued by the fund
manager, JP 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
Procter & Gamble Master Savings Trust (Master Trust) by PNC Bank and to
each participant's account by the Plan's recordkeeper.
EXPENSES OF THE PLAN - Investment management expenses were paid by the
Plan in 2001 and 2000. All other fees were 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 this
standard did not have a material effect on the Plan's financial
statements.
3. INCOME TAX STATUS
The Internal Revenue Service (IRS) 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. INTEREST IN MASTER TRUST
Effective January 1, 1993, the Company formed the Master Trust in
accordance with a master trust agreement with PNC Bank.
Use of a master trust permits the commingling of various investments that
fund 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.
Investments, at fair value, held by the Master Trust at
December 31, 2001 are summarized as follows:
COMPANY JP MORGAN
STOCK FUND FUNDS TOTAL
---------- --------- -----
The Procter & Gamble Company common
stock $ 64,337,834 $ 64,337,834
Mutual funds $123,901,015 123,901,015
Short-term investments 4,291 8,264 12,555
Accrued interest and dividends 39,992 39,992
------------ ------------ ------------
Total investments at fair value $ 64,342,125 $123,949,271 $188,291,396
============ ============ ============
Plan's investment in Master Trust $ 7,567,250 $ 21,418,954 $ 28,986,204
============ ============ ============
Plan's percentage ownership interest in
Master Trust 12 % 17 % 15 %
============ ============ ============
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 earnings (losses) of
Master Trust $ 1,840,113 $ (1,060,452) $ 779,661
============ ============ ============
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 $ 625,519 $ 4,984,414 $ 5,609,933
============ ============ ============
Plan's percentage ownership interest in
Master Trust 1 % 3 % 3 %
============ ============ ============
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 $ (235,451) $ (246,864) $ (482,315)
============ ============ ============
5. DISTRIBUTIONS PAYABLE
Distributions payable to participants at December 31, 2001 and 2000 are
approximately $260,000 and $0, respectively.
6. SUBSEQUENT EVENT
Effective May 1, 2002, the Plan was converted from the Master Trust with
PNC Bank to American Century and merged into The Procter and Gamble
Subsidiaries Savings Plan.
******
THE PROCTER & GAMBLE SUBSIDIARIES SAVINGS AND
INVESTMENT PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT
(SCHEDULE H, PART IV, LINE 4I OF FORM 5500)
DECEMBER 31, 2001
-----------------------------------------------------------------------------------------------
IDENTITY OF ISSUER,
BORROWER, LESSOR FAIR
OR SIMILAR PARTY DESCRIPTION OF INVESTMENT VALUE
------------------ ------------------------- -----
Participant Loans 116 loans with maturities ranging from
January 2002 to May 2010 and interest rates ranging
from 5.75%-10.5% $ 869,392
=========
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