Proctor and Gamble 2008 Annual Report Download - page 73
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Please find page 73 of the 2008 Proctor and Gamble annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.NotestoConsolidatedFinancialStatements TheProcter&GambleCompany 71
Amountsinmillionsofdollarsexceptpershareamountsorasotherwisespecied.
Cash Flows. Management’sbestestimateofcashrequirementsfor
thedenedbenetretirementplansandotherretireebenetplans
fortheyearendingJune30,2009,is$575and$22,respectively.For
thedenedbenetretirementplans,thisiscomprisedof$180in
expectedbenetpaymentsfromtheCompanydirectlytoparticipants
ofunfundedplansand$395ofexpectedcontributionstofunded
plans.Forotherretireebenetplans,thisiscomprisedofexpected
contributionsthatwillbeuseddirectlyforbenetpayments.Expected
contributionsaredependentonmanyvariables,includingthevariability
ofthemarketvalueoftheplanassetsascomparedtothebenet
obligationandothermarketorregulatoryconditions.Inaddition,we
takeintoconsiderationourbusinessinvestmentopportunitiesand
resultingcashrequirements.Accordingly,actualfundingmaydiffer
signicantlyfromcurrentestimates.
Totalbenetpaymentsexpectedtobepaidtoparticipants,which
includepaymentsfundedfromtheCompany’sassets,asdiscussed
above,aswellaspaymentspaidfromtheplans,areasfollows:
Other
Pension Retiree
YearsendingJune30 Benets Benets
2009 $ 500 $ 204
2010 505 222
2011 518 240
2012 520 256
2013 537 271
2014–2018 2,974 1,590
WemaintaintheESOPtoprovidefundingforcertainemployee
benetsdiscussedintheprecedingparagraphs.
TheESOPborrowed$1.0billionin1989andtheproceedswereused
topurchaseSeriesAESOPConvertibleClassAPreferredStocktofund
aportionoftheU.S.DCplan.Principalandinterestrequirementsof
theborrowingwerepaidbytheTrustfromdividendsonthepreferred
sharesandfromadvancesprovidedbytheCompany.Theoriginal
borrowingof$1.0billionhasbeenrepaidinfull,andadvancesfrom
theCompanyof$197remainoutstandingatJune30,2008.Each
shareisconvertibleattheoptionoftheholderintooneshareofthe
Company’scommonstock.Thedividendforthecurrentyearwasequal
tothecommonstockdividendof$1.45pershare.Theliquidation
valueis$6.82pershare.
In1991,theESOPborrowedanadditional$1.0billion.Theproceeds
wereusedtopurchaseSeriesBESOPConvertibleClassAPreferred
Stocktofundaportionofretireehealthcarebenets.Theseshares,
netoftheESOP’sdebt,areconsideredplanassetsoftheOtherRetiree
Benetsplandiscussedabove.Debtservicerequirementsarefundedby
preferredstockdividends,cashcontributionsandadvancesprovided
bytheCompany,ofwhich$194isoutstandingatJune30,2008.
Eachshareisconvertibleattheoptionoftheholderintooneshareof
theCompany’scommonstock.Thedividendforthecurrentyearwas
equaltothecommonstockdividendof$1.45pershare.Theliquidation
valueis$12.96pershare.
AspermittedbySOP93-6,“EmployersAccountingforEmployee
StockOwnershipPlans,”wehaveelected,whereapplicable,tocontinue
ourpractices,whicharebasedonSOP76-3,“AccountingPractices
forCertainEmployeeStockOwnershipPlans.”ESOPdebt,whichis
guaranteedbytheCompany,isrecordedasdebt(seeNote5)withan
offsettotheReserveforESOPdebtretirement,whichispresented
withinShareholders’Equity.AdvancestotheESOPbytheCompany
arerecordedasanincreaseintheReserveforESOPDebtRetirement.
InterestincurredontheESOPdebtisrecordedasinterestexpense.
Dividendsonallpreferredshares,netofrelatedtaxbenets,are
chargedtoretainedearnings.
TheseriesAandBpreferredsharesoftheESOPareallocatedto
employeesbasedondebtservicerequirements,netofadvances
madebytheCompanytotheTrust.Thenumberofpreferredshares
outstandingatJune30wasasfollows:
Sharesinthousands 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
Forpurposesofcalculatingdilutednetearningspercommonshare,
thepreferredsharesheldbytheESOPareconsideredconvertedfrom
inception.
InconnectionwiththeGilletteacquisition,weassumedtheGillette
ESOP,whichwasestablishedtoassistGilletteemployeesinnancing
retireemedicalcosts.TheseESOPaccountsareheldbyparticipantsand
mustbeusedtoreducetheCompany’sotherretireebenetobligations.
Suchaccountsreducedourobligationby$201atJune30,2008.