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NotestoConsolidatedFinancialStatements TheProcter&GambleCompany 71
Amountsinmillionsofdollarsexceptpershareamountsorasotherwisespecied.
Cash Flows. Management’sbestestimateofcashrequirementsfor
thedenedbenetretirementplansandotherretireebenetplans
fortheyearendingJune30,2009,is$575and$22,respectively.For
thedenedbenetretirementplans,thisiscomprisedof$180in
expectedbenetpaymentsfromtheCompanydirectlytoparticipants
ofunfundedplansand$395ofexpectedcontributionstofunded
plans.Forotherretireebenetplans,thisiscomprisedofexpected
contributionsthatwillbeuseddirectlyforbenetpayments.Expected
contributionsaredependentonmanyvariables,includingthevariability
ofthemarketvalueoftheplanassetsascomparedtothebenet
obligationandothermarketorregulatoryconditions.Inaddition,we
takeintoconsiderationourbusinessinvestmentopportunitiesand
resultingcashrequirements.Accordingly,actualfundingmaydiffer
signicantlyfromcurrentestimates.
Totalbenetpaymentsexpectedtobepaidtoparticipants,which
includepaymentsfundedfromtheCompany’sassets,asdiscussed
above,aswellaspaymentspaidfromtheplans,areasfollows:
    Other
   Pension Retiree
YearsendingJune30    Benets Benets

2009 $ 500 $ 204
2010    505 222
2011    518 240
2012    520 256
2013    537 271
2014–2018    2,974 1,590

WemaintaintheESOPtoprovidefundingforcertainemployee
benetsdiscussedintheprecedingparagraphs.
TheESOPborrowed$1.0billionin1989andtheproceedswereused
topurchaseSeriesAESOPConvertibleClassAPreferredStocktofund
aportionoftheU.S.DCplan.Principalandinterestrequirementsof
theborrowingwerepaidbytheTrustfromdividendsonthepreferred
sharesandfromadvancesprovidedbytheCompany.Theoriginal
borrowingof$1.0billionhasbeenrepaidinfull,andadvancesfrom
theCompanyof$197remainoutstandingatJune30,2008.Each
shareisconvertibleattheoptionoftheholderintooneshareofthe
Company’scommonstock.Thedividendforthecurrentyearwasequal
tothecommonstockdividendof$1.45pershare.Theliquidation
valueis$6.82pershare.
In1991,theESOPborrowedanadditional$1.0billion.Theproceeds
wereusedtopurchaseSeriesBESOPConvertibleClassAPreferred
Stocktofundaportionofretireehealthcarebenets.Theseshares,
netoftheESOP’sdebt,areconsideredplanassetsoftheOtherRetiree
Benetsplandiscussedabove.Debtservicerequirementsarefundedby
preferredstockdividends,cashcontributionsandadvancesprovided
bytheCompany,ofwhich$194isoutstandingatJune30,2008.
Eachshareisconvertibleattheoptionoftheholderintooneshareof
theCompany’scommonstock.Thedividendforthecurrentyearwas
equaltothecommonstockdividendof$1.45pershare.Theliquidation
valueis$12.96pershare.
AspermittedbySOP93-6,“EmployersAccountingforEmployee
StockOwnershipPlans,”wehaveelected,whereapplicable,tocontinue
ourpractices,whicharebasedonSOP76-3,“AccountingPractices
forCertainEmployeeStockOwnershipPlans.”ESOPdebt,whichis
guaranteedbytheCompany,isrecordedasdebt(seeNote5)withan
offsettotheReserveforESOPdebtretirement,whichispresented
withinShareholders’Equity.AdvancestotheESOPbytheCompany
arerecordedasanincreaseintheReserveforESOPDebtRetirement.
InterestincurredontheESOPdebtisrecordedasinterestexpense.
Dividendsonallpreferredshares,netofrelatedtaxbenets,are
chargedtoretainedearnings.
TheseriesAandBpreferredsharesoftheESOPareallocatedto
employeesbasedondebtservicerequirements,netofadvances
madebytheCompanytotheTrust.Thenumberofpreferredshares
outstandingatJune30wasasfollows:
Sharesinthousands  2007 2006
Allocated  60,402 61,614
Unallocated  20,807 23,125
 81,209 84,739
Allocated  21,105 21,733
Unallocated  44,642 45,594
 65,747 67,327
Forpurposesofcalculatingdilutednetearningspercommonshare,
thepreferredsharesheldbytheESOPareconsideredconvertedfrom
inception.
InconnectionwiththeGilletteacquisition,weassumedtheGillette
ESOP,whichwasestablishedtoassistGilletteemployeesinnancing
retireemedicalcosts.TheseESOPaccountsareheldbyparticipantsand
mustbeusedtoreducetheCompany’sotherretireebenetobligations.
Suchaccountsreducedourobligationby$201atJune30,2008.