Unilever PLC — Annual Report 2007

Jun 29, 2007

11-K 1 w36559be11vk.htm FORM 11-K UNICARE SAVINGS PLAN e11vk PAGEBREAK

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 11-K

ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

þ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the fiscal year ended December 31, 2006

OR

o TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from to

Commission File Number 1-4547 (Unilever N.V.)

A. Full title of the plan and the address of the plan, if different from that of the issuer named below:

UNICARE SAVINGS PLAN

UNILEVER UNITED STATES, INC. 700 SYLVAN AVENUE ENGLEWOOD CLIFFS, NEW JERSEY 07632

B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

UNILEVER N.V. WEENA 455 3013 AL, ROTTERDAM THE NETHERLANDS

UNILEVER PLC UNILEVER HOUSE BLACK FRIARS LONDON EC4 PBQ ENGLAND

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Unicare Savings Plan

Required Information

A. Signature	S-1
B.
Financial Statements and Schedules:
Report of Independent Registered Public Accounting Firm	1
Financial Statements
Statements of Net Assets Available for Benefits
as of December 31, 2006 and 2005	2
Statements of Changes in Net Assets Available for Benefits for
the years ended December 31, 2006 and 2005	3
Notes to Financial Statements	4–15
Supplemental Schedules (*)
Schedule H – Line 4a – Schedule of Delinquent Participant Contributions	16
Schedule H – Line 4i – Schedule of Assets (Held at End of Year)	17

(*) Other supplemental schedules required by 29 CFR 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 not been included as they are not applicable.

C. Exhibit

23.1 Consent of Independent Registered Public Accounting Firm

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Unicare Savings Plan

SIGNATURE

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.

UNICARE SAVINGS PLAN
By:	/s/ Stephen Pass STEPHEN PASS
	DIRECTOR OF BENEFITS

Date: June 29, 2007

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Report of Independent Registered Public Accounting Firm

To the Participants and Administrator of the Unicare Savings Plan

In our opinion, the accompanying statements of net assets available for benefits and the related statements of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the Unicare Savings Plan (the “Plan”) at December 31, 2006 and December 31, 2005, 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. 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 of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) and schedule of delinquent participant contributions are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are 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. These supplemental schedules are the responsibility of the Plan’s management. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole.

/s/ PricewaterhouseCoopers LLP

Florham Park, New Jersey June 21, 2007

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Unicare Savings Plan

Statements of Net Assets Available for Benefits

As of December 31, 2006 and 2005

	2006	2005
Assets
Investment in the Unilever United States, Inc.
Master Trust, at fair value	$ 1,625,317,878	$ 1,569,171,207
Loans to participants	24,721,346	22,715,364
Total investments	1,650,039,224	1,591,886,571
Receivables
Employer contributions	712,563	703,634
Participant contributions	1,393,126	1,399,567
Net assets, at fair value	1,652,144,913	1,593,989,772
Adjustment from fair value to contract value for
interest in the Master Trust relating to fully
benefit-responsive investment contracts	1,216,236	(1,209,266	)
Net assets available for benefits	$ 1,653,361,149	$ 1,592,780,506

The accompanying notes are an integral part of these financial statements.

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Unicare Savings Plan

Statements of Changes in Net Assets Available for Benefits

For the years ended December 31, 2006 and 2005

	2006	2005
Additions
Additions to net assets attributed to:
Net investment income from Plan interest in
Unilever United States Inc. Master Trust	$ 151,321,683	$ 104,608,759
Interest from participant loans	1,621,055	1,389,085
Contributions and other additions:
Contributions from participants	53,904,839	52,307,016
Contributions from employer	26,289,976	25,311,663
Rollover contributions	15,890,420	15,360,618
Transfer from other plan	29,163,169	—
Total additions	278,191,142	198,977,141
Deductions
Deductions to net assets attributed to:
Benefits paid to participants	217,322,379	195,178,611
Administrative expenses	288,120	206,492
Total deductions	217,610,499	195,385,103
Net additions	60,580,643	3,592,038
Net assets available for benefits:
Beginning of year	1,592,780,506	1,589,188,468
End of year	$ 1,653,361,149	$ 1,592,780,506

The accompanying notes are an integral part of these financial statements.

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Unicare Savings Plan

Notes to Financial Statements

December 31, 2006 and 2005

| 1. |
| --- |
| The Unicare Savings Plan (the “Plan”) is a defined contribution plan that is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”). Assets of the
Plan along with other assets from defined contribution plans sponsored by Unilever United
States, Inc. (the “Company” or “UNUS”) are maintained in the Unilever United States, Inc.
Master Trust (the “Master Trust”). The following brief description of the Plan is provided
for general information purposes only. Participants should refer to the Summary Plan
Description for more complete information. |
| Eligibility |
| All employees of the Company and its subsidiaries, divisions and branches scheduled to work
twenty or more hours a week, all employees of Good Humor-Breyer’s at the Huntington, Indiana
plant represented by the Retail, Wholesale and Department Store Union, UFCW AFL-CIO and its
United Dairy Workers Local 835 and all employees of Ben & Jerry’s Homemade at the St. Albans,
Vermont plant represented by the International Brotherhood of Electrical Workers Local 300
are eligible to participate in the Plan, except for: |

•	employees covered by certain other collective bargaining agreements;
•	temporary employees;
•	weekly paid employees of Bestfoods Caribbean, employees of Unilever Home & Personal
Care Manufacturing Company in Las Piedras, Puerto Rico.

| Contributions |
| --- |
| Plan participants are permitted to make voluntary contributions to the Plan through payroll
deductions. Before-tax contributions, representing 401(k) contributions, are deposited in a
“before-tax account” and after-tax contributions, where applicable, are deposited in an
“after-tax account”. Before-tax contributions per participant were limited to $15,000 for
2006 and $14,000 for 2005. |
| The maximum permitted contributions vary at the discretion of the Company and are as follows: |

| A) | Employees of Bradley Woods Company: 1 to 60% of eligible compensation on a
before-tax basis; |
| --- | --- |
| B) | All other employees: 1% to 20% of eligible compensation through payroll
deductions on a before-tax basis, an after-tax basis or a combination of both, provided
that the maximum participant contributions to the before-tax and after-tax accounts do
not exceed 20% of eligible compensation. |

Participants who will be age 50 or older by the end of the Plan year are eligible to make before-tax catch-up contributions. Catch-up contributions are limited to $5,000 and $4,000 for eligible employees for 2006 and 2005, respectively.

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Unicare Savings Plan Notes to Financial Statements December 31, 2006 and 2005

The Company has a matching program in which the employer contributes a portion of participant contributions to the participant’s account. These contributions are recorded in a “company matching account.” Company matching contributions vary at the discretion of the Company and are as follows:

A)	Legacy employees of Bestfoods: 100% of the first 6% of eligible earnings;
B)	Remaining employees who are covered under the cash balance formula of the Unicare
Retirement Plan: 100% of the first 5% of eligible earnings;
C)	Remaining employees who are covered under the final average pay formula of the
Unicare Retirement Plan: 100% of the first 3% of eligible earnings and 50% of the next
2% of eligible earnings.

| All contributions are deposited in the Master Trust. |
| --- |
| Participant Accounts |
| Each participant’s account is credited with (a) the participant’s contribution, (b) the
Company’s contribution, and (c) an allocation of Plan earnings and administrative expenses.
Allocations are based on participant earnings or account balances, as defined. The benefit
to which a participant is entitled is the benefit that can be provided from the vested
portion of the participant’s account. At December 31, 2006 and 2005, there were 14,019 and
13,798 participants, respectively. |
| Vesting |
| Participants are fully vested in all of their contributions in the before-tax and after-tax
accounts as well as the earnings thereon. Vesting provisions relating to Company matching
contributions vary at the discretion of the Company and are as follows: |
| All employees unless otherwise noted: 100% immediately; |
| Employees of Bradley Woods Company: 33-1/3% after 1 year of service; 66-2/3% after 2 years of
service; and 100% after 3 years of service. |
| Amounts forfeited by nonvested participants who terminated employment during the years ended
December 31, 2006 and 2005 were $56,194 and $3,812, respectively. The balance of forfeitures
were $363,642 and $106,859 as of December 31, 2006 and 2005, respectively. Forfeitures are
available to reduce Company match contributions and administrative expenses. |
| Payment of Benefits |
| During employment, participants may withdraw all or part of their “after-tax account,” where
applicable, and earnings thereon. Participants may apply for financial hardship withdrawal
of up to 100% of the value of their “after-tax account,” where applicable, and the eligible
portion of their vested before-tax account based on plan provisions, prior to attaining age
59-1/2, provided the withdrawal does not exceed the amount of the hardship. Upon attainment
of age 59-1/2, participants may withdraw all or part of their “before -tax account”, “after
-tax account”, where applicable, and “company matching account”. |
| Upon termination of employment, participants are entitled to all of their vested balances. |

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Unicare Savings Plan Notes to Financial Statements December 31, 2006 and 2005

| Terminated employees whose vested balances exceed $1,000 ($5,000 prior to March 28, 2005) at
termination may elect to leave their account balances in the Plan until they attain age
70-1/2 at which time Internal Revenue Service (“IRS”) regulations require minimum
distributions to be made. Failure to make a voluntary election to defer payment will result
in a total distribution of vested Plan balances at age 65. Terminated employees whose vested
balances are under $1,000 ($5,000 prior to March 28, 2005) will be subject to an involuntary
distribution. |
| --- |
| Participants who retire under the provisions of certain defined benefit plans sponsored by
the Company may roll over their lump sum distribution to the Plan to be invested until they
attain age 70-1/2 at which time IRS regulations require minimum distributions to be made. |
| Plan Transfer |
| During 2006, approximately $29 million of assets from the Ben & Jerry’s Homemade Plan were
transferred into the Plan. Such amount included approximately $548,000 of participants’
loans. The Ben & Jerry’s Homemade Plan was a qualified structured 401(k) plan of a business
unit of the Unilever group. |
| Investments |
| Participants have the option to invest in, and direct the Company matching contributions
towards a wide variety of funds including money market, fixed income, balanced, equity and
the Unilever N.V. Stock Fund. The funds are as follows: |

| • | The INVESCO (also known as PRIMCO) Interest Income Fund is primarily invested in a
diversified portfolio of investment contracts issued by high quality financial
institutions such as insurance companies and banks. Each contract has its own specific
terms, including interest rate and maturity date. The crediting interest rates at
December 31, 2006 and 2005 for the contracts range from 4.65% to 5.32% and 3.74% to
6.99%, respectively. The average crediting interest rates at December 31, 2006 and 2005
for the contracts are 5.20% and 4.78%, respectively. |
| --- | --- |
| • | Fidelity Asset Manager Fund, NTGI-QM Equity Index Fund, Fidelity Magellan Fund, PIMCO
Total Return Fund Institutional Class, Harbor Capital Appreciation Fund, Unilever N.V.
Stock Fund, Fidelity Growth & Income Portfolio Fund, Fidelity Contrafund, T. Rowe Price
Small Cap Stock Fund, American Funds Washington Mutual Investors Fund – Class A,
Fidelity Select Health Care Portfolio Fund, Fidelity Select Technology Portfolio Fund,
Fidelity Select Financial Services Portfolio Fund, Fidelity Select Natural Resources
Portfolio Fund, NTGI-QM Collective Daily Russell 1000 Value Equity Index Fund, Legg
Mason Partners Emerging Markets Equity Fund and the Fidelity Select International Equity
Portfolio Fund. |

| Loans to Plan Participants |
| --- |
| At the request of the Plan participants, loans are permitted up to the lesser of $50,000
reduced by the largest outstanding loan balance in the previous 12 months or one-half of the
participants’ vested interest in accounts less any outstanding loans. Loans bear interest at
a fixed rate based on the Wall Street Journal published prime rate plus one percent, adjusted
quarterly. Loans relating to the acquisition or construction of a participant’s principal
residence are to be repaid within fifteen years. All other loans are required to be repaid
within five years. |

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Unicare Savings Plan Notes to Financial Statements December 31, 2006 and 2005

	Administration
	The Plan provides that the Benefits Administration Committee is responsible for the general
administration of the Plan.
2.	Summary of Significant Accounting Policies
	Basis of Accounting
	The financial statements of the Plan are prepared on the accrual basis of accounting in
conformity with accounting standards generally accepted in the United States of America.
	Certain prior period amounts have been reclassified to conform to the current year
presentation.
	Valuation of Master Trust Investments and Income Recognition
	The assets of the Plan have been commingled in the Master Trust with the assets of the
Savings Plan for Union Employees of Unilever and the Good Humor-Breyers Savings Plan for
investment and administrative purposes. The investment in the Master Trust represents the
Plan’s interest in the net assets of the Master Trust. The Plan’s investment is stated at
fair value and is based on the beginning of the year value of the Plan’s interest in the
Master Trust plus contributions and allocated investment income less distributions and
allocated expenses. Participants’ loans are valued at cost plus accrued interest, which
approximates fair value.
	The Plan presents in the Statement of Changes in Net Assets Available for Benefits the
investment income for Plan interest in the Master Trust, which consists of its allocated
share of investment income, realized gains and losses and the unrealized appreciation
(depreciation) from the Master Trust.
	The Plan’s interest in the Master Trust represents more than 5 percent of the Plan’s net
assets as of December 31, 2006 and 2005.
	Investment Contracts
	As of December 31, 2006, the Plan adopted the provisions of the Financial Accounting
Standards Board Staff Position (“FSP”) Nos. AAG INV-1 and SOP 94-4-1, reporting of Fully
Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the
AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans.
The FSP clarifies the definition of fully benefit-responsive investment contracts for
contracts held by defined contribution plans along with the financial statement presentation
and disclosure of such contracts. Investment contracts held by a defined-contribution plan
are required to be reported at fair value. However, contract value is the relevant
measurement attribute for that portion of the net assets available for benefits of a
defined-contribution plan attributable to fully benefit-responsive investment contracts
because contract value is the amount participants would receive if they were to initiate
permitted transactions under the terms of the plan. As required by the FSP, the Statements
of Net Assets Available for Benefits presents the fair value of the investment contracts as
well as the adjustment of the fully benefit-responsive investment contracts from fair value
to contract value. The Statements of Changes in Net Assets Available for Benefits is
prepared on a contract value basis. In adopting the provisions of this FSP, there were no
accounting effects to the Plan’s financial statements, other than the requisite presentation
of investment contracts’ fair values in the accompanying Statements of Net Assets Available
for Benefits.
	Further information on the Plan’s investment contracts is included in Note 4.

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Unicare Savings Plan Notes to Financial Statements December 31, 2006 and 2005

	Benefit Payments Benefit payments are recorded when paid.
	Administrative Expenses
	Investment management fees for all funds, excluding the Unilever N.V. Stock Fund, are paid by
the Plan. All other administrative expenses are paid by the Company.
	Use of Estimates
	The preparation of financial statements in conformity with accounting standards generally
accepted in the United States of America 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 at the date of the financial statements.
These significant estimates include fair market values of investments. Actual results could
differ from those estimates.
	Risks and Uncertainties
	The Plan provides for various investment options in any combination of stocks, commingled
funds, mutual funds, and other investment securities. Investment securities are exposed to
various risks, such as interest rate, market and credit. Due to the level of risk associated
with certain investment securities and the level of uncertainty related to changes in the
value of investment securities, it is at least reasonably possible that changes in risks in
the near term would materially affect participants’ account balances and the amounts reported
in the Statement of Net Assets Available for Benefits.
	The Master Trust is exposed to credit loss in the event of non-performance by the companies
with whom guaranteed investment contracts are placed. However, the Plan administrator does
not anticipate non-performance by these companies. The Plan administrator believes that the
risk to the Master Trust portfolio from credit loss is not material due to the diversified
nature of the assets held.
3.	Tax Status of the Plan
	The Plan received a favorable tax determination letter, effective August 4, 2003, in which
the Internal Revenue Service stated that the Plan, as then designed, was in compliance with
the applicable requirements of the Internal Revenue Code. Although the Plan has been amended
since then, the Plan administrator and the Plan’s tax counsel believe that the Plan is
designed and is currently being operated in compliance with the applicable provisions of the
Internal Revenue Code. Therefore, no provision for income taxes has been included in the
Plan’s financial statements.
4.	Investments Held by the Master Trust
	The Master Trust comprises the assets of the Plan, the Savings Plan for Union Employees of
Unilever and the Good Humor-Breyers Savings Plan, all affiliated plans of UNUS. The Plan
has an undivided interest in certain assets of the Master Trust and sole interests in other
assets of the Master Trust. Certain investment assets of the Master Trust, related earnings
and expenses are allocated to the plans participating in the Master Trust based upon the
total of each individual participant’s share of the Master Trust. On an overall basis, the
Plan has a 91.6% and 91.5% interest in the investments of the Master Trust as of December 31,
2006 and 2005, respectively.

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Unicare Savings Plan Notes to Financial Statements December 31, 2006 and 2005

The Plan’s interest in the Master Trust represents more than 5% of the Plan’s net assets.
The Plan’s approximate share of investments held by the Master Trust at December 31, 2006 and
2005 were as follows:

Short-term Investment Fund	88.3 %	88.6 %
Mutual funds	93.2 %	93.3 %
Commingled funds	94.4 %	91.8 %
Synthetic Guaranteed Investment Contracts	88.3 %	88.6 %
Unilever N.V. Stock	89.6 %	89.4 %

As of December 31, 2006 and 2005, the investment categories of the Master Trust was as follows:

	2006	2005
Investments at fair value
Mutual funds	$ 753,181,735	$ 699,533,333
Synthetic Guaranteed Investment Contracts	613,887,040	431,555,631
Commingled funds	337,594,175	527,528,924
Unilever N.V. Stock	47,110,209	42,933,848
Short-term Investment Fund	22,426,878	12,918,141
Master Trust and Investments at fair value	1,774,200,037	1,714,469,877
Adjustment to Contract Value	1,377,391	(1,364,860	)
Net Amount	$ 1,775,577,428	$ 1,713,105,017

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Unicare Savings Plan Notes to Financial Statements December 31, 2006 and 2005

The following presents investments that represent 5 percent or more of the Master Trust’s net assets as of December 31, 2006 and 2005:

	2006
Investments at Fair Value as Determined by
Quoted Market Price
Mutual Funds
Fidelity Magellan Fund, 1,649,204 and 1,489,615
shares, respectively	$ 147,636,717	$	158,554,637
PIMCO Total Return Institutional Fund, 8,747,482 and
9,083,446 shares, respectively	90,798,868		95,376,186
Harbor Capital Appreciation Fund, 2,453,821 and
2,854,733 shares, respectively	81,834,925	*	93,235,578
Fidelity Contrafund, 1,813,312 and 1,569,541 shares,
respectively	118,227,958		101,643,495
Investments at Estimated Fair Value
Synthetic Guaranteed Investment Contracts
Synthetic Guaranteed Investment Contract JP Morgan Chase Contract # 441619-IAAA	105,900,806		92,248,916
Synthetic Guaranteed Investment Contract State Street Bank and Trust Company Contract
# 103108	106,076,485		91,270,904
Synthetic Guaranteed Investment Contract Bank of America Contract # 99-052	105,936,516		86,780,441
Synthetic Guaranteed Investment Contract IXIS Financial Contract # 1419-01	127,502,961		—	**
Commingled Funds
Fidelity Select International, 742,597 and 672,545
shares, respectively	101,327,359		71,800,896	*
NTGI-QM Equity Index Fund, 13,231,580 and
15,277,640 shares, respectively	164,468,535		163,929,076
AMVESCAP National Trust Company Pooled Stable
Value Fund	—	**	229,563,302

*	Less than 5%.
**	The investment was not held by the Master Trust in the respective year.

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Unicare Savings Plan Notes to Financial Statements December 31, 2006 and 2005

As of December 31, 2006, the fully-benefit-responsive contracts of the Master Trust were as follows:

	Major
	Credit
	Ratings	Investments	Adjustment to
	(unaudited)	at fair value	contract value
IXIS Financial (IGT AAA Asset-Backed
Securities Fund)	AAA	$ 127,502,961	$ (94,707	)
State Street Bank (IGT WAM AAA or
Better Intermediate Fund)	AA	106,076,485	83,569
Bank of America (IGT Intermediate
Government Fund)	AA+	105,936,516	257,499
JP Morgan Chase (IGT PIMCO AAA or
Better Intermediate Fund)	AA	105,900,806	243,325
ING Life & Annuity (IGT Short-term
Bond Fund)	AA	80,456,225	819,046
UBS AG (IGT Short-term Bond Fund)	AA+	77,329,689	(4,736	)
UBS AG (US Treasury Note)	AA+	10,684,358	73,395
		$ 613,887,040	$ 1,377,391

As of December 31, 2005, the fully-benefit-responsive contracts of the Master Trust were as follows:

	Major
	Credit
	Ratings	Investments	Adjustment to
	(unaudited)	at fair value	contract value
JP Morgan Chase (IGT Intermediate
Government Fund)	AA-	$ 92,248,916	$ (366,520	)
State Street Bank (IGT Intermediate
Government Fund)	AA	91,270,904	(376,569	)
Bank of America (IGT Intermediate
Government Fund)	AA-	86,780,441	(465,534	)
IXIS Financial (IGT AAA Asset-Backed
Securities Fund)	AAA	79,586,387	(314,616	)
ING Life & Annuity (IGT Short-term
Bond Fund)	AA	64,894,195	(4,923	)
UBS AG (US Treasury Note)	AA+	16,774,788	163,302
		$ 431,555,631	$ (1,364,860	)

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Unicare Savings Plan Notes to Financial Statements December 31, 2006 and 2005

The net investment income of the Master Trust net assets for the years ended December 31, 2006 and 2005 were as follows:

	2006		2005
Net appreciation (depreciation) in fair value
of net investments
Investments at Fair Value as Determined by Quoted
Market Price
Mutual funds	$ (13,269,313	)	$ 31,027,278
Unilever N.V. stock	7,861,687		1,420,101
Investments at Estimated Fair Value
Commingled funds	57,626,588		18,868,593
Net appreciation (depreciation)	52,218,962		51,315,972
Interest	31,825,809		31,743,638
Dividends	79,361,051		30,345,793
Total net investment income	$ 163,405,822		$ 113,405,403

| Investment Valuation and Income Recognition of Master Trust |
| --- |
| Master Trust investments are stated at fair value. Investments in mutual funds are valued at
the net asset value of shares held at year end while investments in commingled funds are
stated at fair value based on year end market prices. Unilever N.V. common stock is valued
at the last close price at end of the year. Short-term investments are valued at amortized
cost, which is cost plus accrued interest, which approximates fair value. Investment
contracts are stated at fair value based on the sum of the fair value of the underlying
investments and the fair value of the wrapper. |
| Purchases and sales of securities are recorded as of the trade date. Dividend income is
recorded on the ex-dividend date and interest is recorded on the accrual basis. |
| Investment income for the Master Trust includes net appreciation (depreciation) of
investments, as well as, interest and dividends from investments. The net appreciation
(depreciation) of investments held in the Master Trust consists of the realized gains
(losses) and the unrealized appreciation (depreciation) on these investments. |
| Investment Contracts |
| The Master Trust entered into benefit-responsive investment contracts, such as synthetic
guaranteed investment contracts, with various third party financial institutions. These
benefit-responsive investment contracts are held through the INVESCO (also known as PRIMCO)
Interest Income Fund. Contract values represent contributions made to the investment
contract plus earnings, less participant withdrawals and administrative expenses. |
| A synthetic GIC provides for a fixed return on principal over a specified period of time
through fully benefit-responsive wrapper contracts issued by third party financial
institutions which are backed by underlying assets owned by the Master Trust. The wrapper
contract amortizes the realized and unrealized gains and losses on the underlying fixed
income investments, typically over the duration of the investments, through adjustments to
the future interest crediting rate (which is the rate earned by participants in the Fund for
the underlying investments). The issuer of the |

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Unicare Savings Plan Notes to Financial Statements December 31, 2006 and 2005

| wrapper contract provides assurance that the adjustments to the interest crediting rate do
not result in a future interest crediting rate that is less than zero. An interest crediting
rate less than zero would result in a loss of principal or accrued interest. |
| --- |
| Calculating the Interest Crediting Rate in Wrapper Contracts The key factors that influence future interest crediting rates for a wrapper contract include: |

•	The level of market interest rates
•	The amount and timing of participant contributions, transfers, and withdrawals
into/out of the wrapper contract
•	The investment returns generated by the fixed income investments that back the
wrapper contract
•	The duration of the underlying investments backing the wrapper contract

| Wrapper contracts’ interest crediting rates are typically reset on a monthly or quarterly
basis. While there may be slight variations from one contract to another, most wrapper
contracts use a formula that is based on the characteristics of the underlying fixed income
portfolio. Over time, the crediting rate formula amortizes the Fund’s realized and
unrealized market value gains and losses over the duration of the underlying investments. |
| --- |
| Because changes in the market interest rates affect the yield to maturity and the market
value of the underlying investments, they can have a material impact on the wrapper
contract’s interest crediting rate. In addition, participant withdrawals and transfers from
the Fund are paid at contract value but funded through the market value liquidation of the
underlying investments, which also impacts the interest crediting rate. The resulting gains
and losses in the market value of the underlying investments relative to the wrapper contract
value are presented on the Plan’s Statements of Net Assets Available for Benefits as the
“Adjustment from Fair Value to Contract Value”. If the Adjustment from Fair Value to
Contract Value is positive for a given contract, this indicates that the wrapper contract
value is greater than the market value of the underlying investments. The embedded market
value losses will be amortized in the future through a lower interest crediting rate than
would otherwise be the case. And if the Adjustment from Fair Value to Contract Value figure
is negative, this indicates that the wrapper contract value is less than the market value of
the underlying investments. The amortization of the embedded market value gains will cause
the future interest crediting rate to be higher than it otherwise would have been. |
| All wrapper contracts provide for a minimum interest crediting rate of zero percent. In the
event that the interest crediting rate should fall to zero and the requirements of the
wrapper contract are satisfied, the wrapper issuers will pay to the Plan the shortfall
needed to maintain the interest crediting rate at zero. This helps to ensure that
participants’ principal and accrued interest will be protected. |
| Events That Limit the Ability of the Plan to Transact at Contract Value In certain circumstances, the amount withdrawn from the wrapper contract would be payable at
fair value rather than at contract value. These events include termination of the Plan, a
material adverse change to the provisions of the Plan, if the employer elects to withdraw
from a wrapper contract in order to switch to a different investment provider, or if the
terms of a successor plan (in the event of the spin-off or sale of a division) do not meet
the wrapper contract issuer’s underwriting criteria for issuance of a clone wrapper contract.
The events described above that |

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Unicare Savings Plan Notes to Financial Statements December 31, 2006 and 2005

| could result in the payment of benefits at market value rather than contract value are not
probable of occurring in the foreseeable future. |
| --- |
| Issuer-Initiated Contract Termination |
| Examples of events that would permit a wrapper contract issuer to terminate a wrapper
contract upon short notice include the Plan’s loss of its qualified status, un-cured material
breaches of responsibilities, or material and adverse changes to the provisions of the Plan.
If one of these events was to occur, the wrapper contract issuer could terminate the wrapper
contract at the market value of the underlying investments (or in the case of a traditional
GIC, at the hypothetical market value based upon a contractual formula). |
| The contract values of the synthetic GICs were approximately $615 million and $430 million at
December 31, 2006 and 2005, respectively. Included in the contract values of the synthetic
GICs are approximately $1.4 million at December 31, 2006 and 2005, attributable to wrapper
contract providers representing the amounts by which the value of the investment contracts
are greater than, in 2006, and less than, in 2005, the value of the underlying assets. |
| As of December 31, 2006 and 2005, the average yields for synthetic GICs were as follows: |

Average yields for synthetic GICs — Based on actual earnings	5.12 %	4.65 %
Based on interest rate credited to participants	5.22 %	4.76 %

5.	Transactions with Related Parties and Parties-in-Interest
	The Unilever N.V. Stock Fund invests in shares of Unilever N.V. Stock. This fund is designed
as a means for employees to participate in the potential long-term growth of Unilever N.V.
The Master Trust held 1,728,815 and 625,402 shares at December 31, 2006 and 2005,
respectively, of common stock in Unilever N.V. The Master Trust also earned dividend income
from the common stock of approximately $2.0 million and $1.5 million for the years ended
December 31, 2006 and 2005, respectively.
	Certain Master Trust investments consist of units in investment funds managed by Fidelity.
Fidelity owns these investment funds, and is a party-in-interest as defined by ERISA. In the
opinion of the Plan administrator, fees paid during the year for services rendered by
parties-in-interest were based on customary and reasonable rates for such services.
6.	Plan Termination
	Although it has not expressed any intent to do so, the Company has the right under the Plan
to discontinue its contributions at any time and terminate the Plan, subject to the
provisions of ERISA. In the event of the Plan termination, the participant’s rights to their
accrued benefits are non-forfeitable. Any unallocated assets of the Plan shall be allocated
to participant accounts and distributed in such a manner as the Company may determine.

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Unicare Savings Plan Notes to Financial Statements December 31, 2006 and 2005

| 7. |
| --- |
| In July 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No.
48 (“FIN 48”), Accounting for Uncertainty in Income Taxes, an interpretation on FASB Statement
No. 109. This interpretation, which is effective for fiscal year beginning after December 15,
2006, clarifies the accounting for uncertainty in tax positions taken or expected to be taken
in a tax return. FIN 48 provides guidance on the measurement, recognition, classification and
disclosure of tax positions, along with accounting for the related interest and penalty. The
Plan administrator and the Plan’s tax counsel believe that the Plan is designed and is
currently being operated in compliance with the applicable requirements of the Internal
Revenue Code (“IRC”) (see Note 3). Accordingly, the adoption of FIN 48 is not expected to have
a material impact on the Plan’s net assets available for benefits and changes in net assets in
net assets available for benefits. |
| In September 2006, the FASB issued
Statement No. 157, Fair Value
Measurements (“FAS 157”). This
statement defines fair value,
establishes a framework for
measuring fair value and expands
disclosures about fair value
measurements . FAS 157 is effective
for fiscal years beginning after
November 15, 2007, and interim
periods within those fiscal years.
The Plan is currently evaluating the
statement’s impact on its financial
statements. |

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Unicare Savings Plan

Schedule H — Line 4a — Schedule of Delinquent Participant Contributions

December 31, 2006

Participant Contribution Transferred Late to Plan	Total that Constitute Nonexempt Prohibited Transactions
$381 (A)	$381 (B)

(A)	Pertains to only one participant.
(B)	Such amount was remitted to the Plan in 2006.

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Unicare Savings Plan

Schedule H — Line 4i — Schedule of Assets (Held at End of Year)

December 31, 2006

	(b) Identify of Issue, Borrower	(c) Description of Investment Including — Maturity Date, Rate of Interest, Collateral, Par		(e) Current
	(a) Lessor or Similar Party	or Maturity Value	(d) Cost**	Value
*	Participants’ Loans	Interest rates ranging from 5.0% to 10.5% and with maturities through 2035		$ 24,721,346
*	Investment in Master Trust at fair value			$ 1,625,317,878
	Adjustment from fair value to contract value
for interest in Master Trust relating to
fully-benefit responsive investment contracts			1,216,236
	Investment in Master Trust at contract value			$ 1,626,534,114

*	Denotes a party-in-interest to the Plan
**	Not applicable

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Unicare Savings Plan Index

INDEX OF EXHIBIT

Exhibit Number	Exhibit
23.1	Consent of Independent Registered Public Accounting Firm

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