Proctor and Gamble 2007 Annual Report Download - page 64

Millions of dollars except per share amounts or as otherwise specied.
Notes to Consolidated Financial Statements
The Procter & Gamble Company
62
At June 30, 2007, there was $622 of compensation cost that has not
yet been recognized related to nonvested stock-based awards. That
cost is expected to be recognized over a remaining weighted average
period of 1.9 years.
Cash received from options exercised was $1,422, $1,229 and $455
in 2007, 2006 and 2005, respectively. The actual tax benet realized
for the tax deductions from option exercises totaled $265, $242 and
$149 in 2007, 2006 and 2005, respectively.
NOTE 9


We offer various postretirement benets to our employees.

We have dened contribution plans which cover the majority of our
U.S. employees, as well as employees in certain other countries. These
plans are fully funded. We generally make contributions to participants’
accounts based on individual base salaries and years of service. The
primary U.S. dened contribution plan (the U.S. DC plan) comprises
the majority of the balances and expense for the Company’s dened
contribution plans. For the U.S. DC plan, the contribution rate is set
annually. Total contributions for this plan approximated 15% of total
participants’ annual wages and salaries in 2007, 2006 and 2005.
We maintain The Procter & Gamble Prot Sharing Trust (Trust) and
Employee Stock Ownership Plan (ESOP) to provide a portion of the
funding for the U.S. DC plan, as well as other retiree benets. Operating
details of the ESOP are provided at the end of this Note. The fair
value of the ESOP Series A shares allocated to participants reduces
our cash contribution required to fund the U.S. DC plan. Total dened
contribution expense was $273, $249 and $215 in 2007, 2006 and
2005, respectively.

We offer dened benet retirement pension plans to certain employees.
These benets relate primarily to local plans outside the U.S., and to a
lesser extent, plans assumed in the Gillette acquisition covering U.S.
employees. These acquired Gillette plans will be frozen effective
January 1, 2008.
We also provide certain other retiree benets, primarily health care and
life insurance, for the majority of our U.S. employees who become
eligible for these benets when they meet minimum age and service
requirements. Generally, the health care plans require cost sharing
with retirees and pay a stated percentage of expenses, reduced by
deductibles and other coverages. These benets are primarily funded
by ESOP Series B shares, as well as certain other assets contributed by
the Company.
As discussed in Note 1, we adopted SFAS 158 on June 30, 2007, on
the required prospective basis. Our June 30, 2007 disclosure is in
accordance with the new requirements.
Obligation and Funded Status. We use a June 30 measurement date
for our dened benet retirement plans and other retiree benet plans.
The following provides a reconciliation of benet obligations, plan
assets and funded status of these plans:
Pension Benets
(1) Other Retiree Benets
(2)
Years ended June 30  2006  2006


Benefit obligation at
beginning of year (3)  $ 5,626  $3,079
Service cost  265  97
Interest cost  383  179
Participants’ contributions  19  35
Amendments  65 
—
Actuarial (gain) loss  (754)  (466)
Acquisitions (divestitures)  3,744
 506
Curtailments and settlements  (9) 
—
Special termination benefits  —  1
Currency translation
and other  247  22
Benefit payments  (342)  (167)

 (3)  9,244  3,286

Fair value of plan assets
at beginning of year  2,572  2,700
Actual return on
plan assets  481  234
Acquisitions (divestitures)  2,889
 288
Employer contributions  427  21
Participants’ contributions  19  35
Currency translation
and other  157  (1)
ESOP debt impacts (4)
 —  (19)
Benefit payments  (342)  (167)

  6,203  3,091
  (3,041)  (195)
(1) Primarily non-U.S.-based dened benet retirement plans.
(2) Primarily U.S.-based other postretirement benet plans.
(3) For the pension benet plans, the benet obligation is the projected benet obligation.
For other retiree benet plans, the benet obligation is the accumulated postretirement
benet obligation.
(4) Represents increases in the ESOP’s debt, which is netted against plan assets for Other
Retiree Benets.