SEC Info - Procter & Gamble Co - ‘11-K’ for 6/30/14

THE PROCTER & GAMBLE SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS

AS OF AND FOR THE YEARS ENDED JUNE 30, 2014 AND 2013

1.	DESCRIPTION OF THE PLAN

The following brief description of The Procter & Gamble Savings Plan (the "Plan") is provided for general information only. Participants should refer to the Plan agreement for more complete information.

General — The Plan is a voluntary defined contribution plan that covers substantially all domestic employees of The Procter & Gamble Company (the "Company") and certain of its subsidiaries. The Plan is the Company's active 401(k) plan with ongoing contributions funded by employee contributions. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).

The Gillette Company Employee Stock Ownership Plan (the "Gillette ESOP"), another qualified plan sponsored by the Company, transferred balances for terminated employees who were not eligible for retiree medical coverage under the companies' health care plan(s) to the Plan, as allowed under both the Gillette ESOP and the Plan. During the fiscal years ended June 30, 2014 and 2013, transfers from the Gillette ESOP to the Plan totaled $927,090 and $359,386, respectively.

The employees of Natura Pet Products, Inc., an acquisition of the Company, began participating in the Plan effective August 1, 2012.

Contributions — The Plan allows contributions by eligible employees. Participants can elect to contribute a portion of their pre‑tax compensation, as defined by the Plan, up to Internal Revenue Service (IRS) limits. Participants can rollover balances from conduit individual retirement accounts and qualified plans of former employers. In accordance with IRS regulations, participants age 50 or older are eligible to contribute for the calendar years ended December 31, 2014 and 2013, an additional $5,500 as a "catch‑up" contribution in excess of the maximum 401(k) contributions of $17,500.

Qualified Nonelective Contributions (QNEC) — The Plan recorded QNEC during the years ended June 30, 2014 and 2013, of $99,853 and $6,978, respectively, to provide for certain participants who were not given the opportunity to contribute their elected amounts due to certain administrative errors. The QNEC are immediately 100% vested to the employees. The contributions were made in accordance with IRS regulations and do not affect the tax status of the Plan and are reflected as employer contributions on the statements of changes in net assets available for benefits.

Participant Accounts — Individual accounts are maintained for each Plan participant. Each participant's account is credited with the participant's contribution, an allocation of the Plan's earnings or losses, administrative expenses, and participant withdrawals. The benefit to which a participant is entitled is limited to the benefit that can be provided from their account. Participants can allocate their account to one or all of the investment options offered by the Plan.

Investments — Participants direct the investment of their accounts into various investment options offered by the Plan. During the years ended June 30, 2013 and June 30, 2014, the Plan changed the investment options offered by the Plan. The Plan currently offers common stock and common collective trust funds as investment options for participants.

Vesting — Participants are 100% vested to the assets in their Plan accounts.

Notes Receivable from Participants — The Plan has a loan feature under which active participants may borrow up to 50% of the current value of their vested account balances exclusive of amounts attributable to previous Company contributions (up to a maximum of $50,000). Loans are repaid via payroll deduction over a period of up to 54 months, except for loans used to purchase a primary residence, which are repaid via payroll deduction over a period of up to 114 months. Principal and interest paid is credited to applicable funds in the borrower's account. Participants who are former employees are not allowed to borrow against their account balances. Upon participant termination or retirement, the outstanding loan balance is treated as a distribution to the participant if repayment is not made by the participant within 90 days of separation, or if an on‑going repayment arrangement has not been made with the Plan. Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Delinquent participant loans are recorded as distributions based on the terms of the Plan document.

Payment of Benefits — 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 and/or shares of Company common stock; in annual installments over not more than 20 years, or variable amounts paid monthly. Retired or terminated employees shall commence required minimum benefit payments after the attainment of age 70 1/2.

A participant may withdraw any portion of after‑tax contributions, which were derived from previously merged plans, once in any three‑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. Following a hardship withdrawal, participants are not allowed to contribute to the Plan for a period of 12 months.

Account balances attributable to terminated employees are $1,150,854,259 and $1,034,006,509 as of June 30, 2014 and 2013, respectively.

Plan Amendment — The Company has the right to amend the Plan at any time. However, no amendment can reduce the amount of any participant's account or the participant's vested percentage of that account.

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting — The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).

Use of Estimates — The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and changes therein and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

Risks and Uncertainties — The Plan utilizes various investment instruments, including Company common stock, The J.M. Smucker Company ("Smucker's") common stock, and various common collective trust 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 financial statements.

Investment Valuation and Income Recognition — The Plan's investments are stated at fair value. Fair value of a financial instrument is the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. Quoted market prices, when available, are used to value investments. The cost of securities sold, transferred, or distributed is determined by the weighted‑average cost of securities allocated to the participant's account.

Purchases and sales of securities are recorded on a trade‑date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex‑dividend date. Net appreciation (depreciation) includes the Plan's gains and losses on investments bought and sold as well as held during the year.

Management fees and operating expenses charged to the Plan for investments are deducted from income earned on a daily basis and are not separately reflected. Consequently, management fees and operating expenses are reflected as a reduction of investment return for such investments.

Administrative Expenses — Investment management expenses are paid by the Plan and are netted against investment income. Loan processing fees are paid by the participants through reduction in their investment balances. Recordkeeping fees of the Plan are paid by the Plan and/or participants through a reduction in their investment balances. In addition, fees paid to other vendors are paid by the Plan.

Payment of Benefits — Benefit payments to participants are recorded upon distribution.

3.	FAIR VALUE MEASUREMENTS

ASC 820, Fair Value Measurements and Disclosures, provides a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value, as follows: Level 1, which refers to securities valued using unadjusted quoted prices from active markets for identical assets; Level 2, which refers to securities not traded on an active market but for which observable market inputs are readily available; and Level 3, which refers to securities valued based on significant unobservable inputs. Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Asset Valuation Methodologies — Valuation methodologies maximize the use of relevant observable inputs and minimize the use of unobservable inputs. The following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at June 30, 2014 and 2013.

Common Stocks — Valued at the closing price reported on the active market on which the individual securities are traded.

Common Collective Trust Funds — Valued at the net asset value of units of a bank collective trust. The net asset value is used as a practical expedient to estimate fair value. The net asset value is based on the fair value of the underlying investments held by the fund less its liabilities. This practical expedient is not used when it is determined to be probable that the fund will sell the investment for an amount different than the reported net asset value. Participant transactions (purchases and sales) may occur daily. Redemption for common collective trusts is permitted daily with no other restrictions or notice periods and there are no unfunded commitments.

Cash Equivalents — Held primarily in short-term money market funds, which are valued at cost plus accrued interest.

Transfers between Levels — The availability of observable market data is monitored to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. The Plan's policy is to recognize transfers between levels at the actual date of the event or change in circumstances that caused the transfer.

We evaluate the significance of transfers between levels based upon the nature of the financial instrument and size of the transfer relative to total net assets available for benefits. For the years ended, June 30, 2014 and 2013, there were no transfers between levels.

The following tables set forth by level within the fair value hierarchy a summary of the Plan's investments measured at fair value on a recurring basis at June 30, 2014 and 2013.

	Fair Value Measurements at June 30, 2014, Using
	Quoted Prices in
	Active Markets	Significant Other	Significant
	for Identical	Observable	Unobservable
	Assets (Level 1)	Inputs (Level 2)	Inputs (Level 3)	Total

Cash	$ 226,175	$ -	$ -	$ 226,175
Common collective
trusts:
Equity		1,348,173,408		1,348,173,408
Fixed income		472,185,377		472,185,377
Other		90,366,072		90,366,072
Common stock	1,174,221,588			1,174,221,588

Total	$1,174,447,763	$1,910,724,857	$ -	$3,085,172,620

	Fair Value Measurements at June 30, 2013, Using
	Quoted Prices in
	Active Markets	Significant Other	Significant
	for Identical	Observable	Unobservable
	Assets (Level 1)	Inputs (Level 2)	Inputs (Level 3)	Total

Cash	$ 986,716	$ -	$ -	$ 986,716
Common collective
trusts:
Equity		1,091,731,098		1,091,731,098
Fixed income		470,541,382		470,541,382
Other		78,592,612		78,592,612
Common stock	1,171,604,306			1,171,604,306

Total	$1,172,591,022	$1,640,865,092	$ -	$2,813,456,114

4.	INVESTMENTS

The Plan's investments that represent 5% or more of the Plan's net assets available for benefits as of June 30, 2014 and 2013, are as follows:

Description at Fair Value	2014	2013

*Company Common Stock	$ 1,171,108,058	$ 1,168,387,836
BlackRock World Equity Index Fund	200,253,157	300,422,700
BlackRock Money Market Fund	195,071,273	210,654,463
BlackRock US Intermediate-Term Bond Index Fund	229,391,180	221,189,596
BlackRock Small Cap Equity Index Fund	264,225,706	224,021,513
BlackRock Large Cap Equity Index Fund	591,025,007	567,286,885
BlackRock Global Equity Index Fund	292,669,537	-

*Indicates party in interest

During the years ended June 30, 2014 and 2013, the Plan's investments, including gains and losses on investments bought and sold as well as held during the year, appreciated in value as follows:

	2014	2013

Net appreciation in fair value of:
Common collective trust funds	$ 273,216,727	$ 177,707,519
Company common stock	24,833,988	249,439,193
Smucker's common stock	94,993	927,020

Net appreciation in fair value of investments	$ 298,145,708	$ 428,073,732

5.	EXEMPT PARTY‑IN‑INTEREST TRANSACTIONS

J. P. Morgan Retirement Plan Services is the recordkeeper, as chosen by the Plan Committee. J. P. Morgan Investment Advisors and J.P. Morgan Retirement Plan Services are both affiliates of J.P. Morgan Chase Bank. J. P. Morgan Chase Bank is also the trustee of the Plan as defined by the Plan. Therefore, these transactions qualify as party‑in‑interest transactions. Fees paid by the Plan for investment management services were included as a reduction of the return earned on each fund.

At June 30, 2014 and 2013, the Plan held 14,901,489 and 15,175,839 shares, respectively, of common stock of the Company, the sponsoring employer, with a cost basis of $697,413,211 and $681,821,465, respectively. During the years ended June 30, 2014 and 2013, the Plan recorded dividend income on Company common stock of $36,830,271 and $35,905,339, respectively.

During the years ended June 30, 2014 and 2013, the Plan's investment in Company common stock, including gains and losses on investments bought and sold as well as held during the year, appreciated in value by $24,833,988 and $249,439,193, respectively.

6.	PLAN TERMINATION

Although it has not expressed any intention to do so, the Company has the right under the Plan to terminate the Plan subject to the provisions set forth in ERISA.

7.	FEDERAL INCOME TAX STATUS

The Internal Revenue Service has determined and informed the Company by a letter dated October 22, 2013, that the Plan and related trust were designed in accordance with the applicable regulations of the Internal Revenue Code. The Plan is subject to routine audits by taxing jurisdictions at any time. The Plan has been amended since receiving the determination letter. However, the Company and Plan management have concluded that the Plan, as designed and operated, complies with the applicable requirements of the Internal Revenue Code and the Plan and related trust remain tax‑exempt. Therefore, no provision for income taxes has been included in the Plan's financial statements.

8.	NONEXEMPT PARTY-IN-INTEREST TRANSACTIONS

The Company remitted various participant contributions to the trustee on dates later than required by Department of Labor (DOL) Regulation 2510.3-102 as indicated in the table below. The Company filed Forms 5330 with the IRS and paid the required excise tax on the transactions. In addition, participant accounts were credited with the amount of investment income that would have been earned had the participant contributions been remitted on a timely basis.

Date of Remittance	Due Date	Amount

December 23, 2013	September 27, 2013	$ 250

December 23, 2013	October 28, 2013	1,917

December 23, 2013	November 27, 2013	1,917

June 27, 2014	April 28, 2014	1,400

August 28, 2014	April 28, 2014	742

9.	RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500

The following is a reconciliation of net assets available for benefits per the financial statements as of June 30, 2014 and 2013, to Form 5500:

	2014	2013

Net assets available for benefits per the financial
statements	$ 3,109,439,734	$ 2,837,349,437
Less certain deemed distributions of participant loans	(3,253,937)	(2,704,413)

Net assets available for benefits per the Form 5500	$ 3,106,185,797	$ 2,834,645,024

The following is a reconciliation of the increase in net assets per the financial statements for the year ended June 30, 2014, to Form 5500 net income:

Net increase in assets available for benefits per the financial
statements prior to transfer in	$ 271,163,207
Less certain deemed distributions of participant loans and related interest	(549,524)

Net gain per the Form 5500	$ 270,613,683

The following is a reconciliation of net investment income per the financial statements for the year ended June 30, 2014, to Form 5500:

Net investment income per the financial statements	$ 335,369,241
Add interest on loans to participants	1,100,867
Less interest on deemed distribution	(190,170)

Net investment income per the Form 5500	$ 336,279,938

The following is a reconciliation of benefits paid to participants per the financial statements for the year ended June 30, 2014, to Form 5500:

Benefits paid to participants per the financial statements	$ 165,928,020
Less current loan defaults	(171,937)
Plus current deemed distributions	531,291

Benefits paid to participants per the Form 5500	$ 166,287,374

******

SUPPLEMENTAL SCHEDULES

THE PROCTER & GAMBLE SAVINGS PLAN

FORM 5500, SCHEDULE H, PART IV, LINE 4i — SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF JUNE 30, 2014

EIN: 31-0411980
PLAN: 042


	Identity of Issuer	Description of Investment	Fair Value

	INVESTMENTS AT FAIR VALUE:
*	J.P. Morgan	Interest bearing cash	$ 226,175
*	The Procter & Gamble Company	Common stock	1,171,108,058
	The J.M. Smucker Company	Common stock	3,113,530
	Common Collective Trust Fund:
	BlackRock	MSCI ACWI EX-U.S. Index Non-Lendable Fund F	200,253,157
	BlackRock	US Debt Index Non-Lendable Fund E	229,391,180
	BlackRock	Russell 2000 Index Non-Lendable Fund E	264,225,706
	BlackRock	Equity Index Fund EX	591,025,007
	BlackRock	Money MarketFund -W	195,071,273
	BlackRock	MSCI ACWI EX-U.S. IMI Index Non-Lendable Fund F	292,669,537
*	State Street Global Advisors	SSgA US Short Term Government/Credit Bond Index	47,722,924
*	State Street Global Advisors	SSgA Real Return Ex-Natural Resources Equity Non-Lending	90,366,072
*	Loans to participants	Series Fund Various participants, interest rates ranging from
		4.25% to 9.25% various maturities through December 2021	21,013,178

	TOTAL INVESTMENTS		$ 3,106,185,797

*	Denotes party-in-interest.

TABLE OF CONTENTS

			Page

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			1

FINANCIAL STATEMENTS:

Statements of Net Assets Available for Benefits as of June 30, 2014 and 2013			2

Statements of Changes in Net Assets Available for Benefits for the Years Ended June 30, 2014 and 2013			3

Notes to Financial Statements as of and for the Years Ended June 30, 2014 and 2013			4-10

SUPPLEMENTAL SCHEDULES:			11

Form 5500, Schedule H, Part IV, Line 4i - Schedule of Assets (Held at End of Year) as of June 30, 2014			12

Form 5500, Schedule H, Part IV, Line 4a - Schedule of Delinquent Participant Contributions for the Year Ended June 30, 2014			13

NOTE: All other schedules required by Section 2520.103-10 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.

THE PROCTER & GAMBLE SAVINGS PLAN

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED JUNE 30, 2014 AND 2013


		2014		2013

INVESTMENT INCOME:
Net appreciation in fair value of investments	$ 298,145,708		$ 428,073,732
Interest	322,931		579,670
Dividends	36,900,602		35,974,810

Total investment income — net	335,369,241		464,628,212

INTEREST INCOME ON NOTES RECEIVABLE
FROM PARTICIPANTS	1,100,867		1,125,102

CONTRIBUTIONS:
Employer contributions	99,853		6,978
Employee contributions	100,961,405		100,138,628
Employee rollovers	1,157,089		3,342,092

Total contributions	102,218,347		103,487,698

DEDUCTIONS:
Benefits paid to participants	165,928,020		252,924,353
Administrative expenses	1,597,228		1,538,019

Total deductions	167,525,248		254,462,372

NET INCREASE IN NET ASSETS
PRIOR TO TRANSFER	271,163,207		314,778,640

TRANSFERS FROM OTHER QUALIFIED PLANS — Net	927,090		359,386

NET INCREASE IN NET ASSETS	272,090,297		315,138,026

NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year	2,837,349,437		2,522,211,411

End of year	$ 3,109,439,734		$ 2,837,349,437


See notes to financial statements.

THE PROCTER & GAMBLE SAVINGS PLAN
EIN: 31-0411980
Plan No: 042

FORM 5500, SCHEDULE H, PART IV, QUESTION 4a — SCHEDULE OF DELINQUENT PARTICIPANT CONTRIBUTIONS
FOR THE YEAR ENDED JUNE 30, 2014


	Total That Constitute Nonexempt Prohibited
	Transactions			Total Fully
			Contributions	Corrected
	Contributions	Contributions	Pending	under VFCP
	Not	Corrected	Correction	and PTE
Participant Contributions Transferred Late to the Plan	Corrected	Outside VFCP	in VFCP	2002-51

Check here if late participant loan contributions are included	$ 742	$ 5,484	$	$

This ‘11-K’ Filing	Date	Other Filings

	12/31/14	10-Q, 11-K, SD
Filed on:	10/30/14	4
	10/29/14	4, 424B5
	8/28/14	4
For Period End:	6/30/14	10-K, 11-K, 4, 5, 8-K
	6/27/14
	4/28/14	4
	12/31/13	10-Q, 11-K, 8-K, SD
	12/23/13
	11/27/13
	10/28/13	4, 8-K
	10/22/13
	9/27/13
	6/30/13	10-K, 11-K
	8/1/12
		List all Filings

Procter & Gamble Co – ‘11-K’ for 6/30/14

On: Thursday, 10/30/14, at 1:34pm ET · For: 6/30/14 · Accession #: 862335-14-23 · File #: 1-00434

Previous ‘11-K’: ‘11-K’ on 9/26/14 for 6/30/14 · Next: ‘11-K’ on 11/14/14 for 6/30/14 · Latest: ‘11-K’ on 3/22/24 for 12/31/23

Annual Report by an Employee Stock Purchase, Savings or Similar Plan — Form 11-K
Filing Table of Contents

11-K — 2014 P&G Savings Plan

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Dates Referenced Herein and Documents Incorporated by Reference

THE PROCTER & GAMBLE SAVINGS PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF JUNE 30, 2014 AND 2013


		2014		2013

PARTICIPANT-DIRECTED INVESTMENTS — At fair value:
Cash	$ 226,175		$ 986,716
The Procter & Gamble Company common stock	1,171,108,058		1,168,387,836
The J.M. Smucker Company common stock	3,113,530		3,216,470
Common collective trust funds	1,910,724,857		1,640,865,092

Total participant-directed investments — at fair value	3,085,172,620		2,813,456,114

RECEIVABLES — Notes receivable from participants	24,267,114		23,893,323

NET ASSETS AVAILABLE FOR BENEFITS	$ 3,109,439,734		$ 2,837,349,437


See notes to financial statements.