The following table presents certain consolidated earnings data as a percentage of net sales: YEAR ENDED JUNE 30 2003 2002 2001 Net sales 100.0% 100.0% 100.0% Cost of sales 26.1 26.8 26.3 Gross profit 73.9 73.2 73.7 Operating expenses: Selling, general and administrative 63.4 63.3 61.5 Restructuring — 2.3 0.8 Special charges 0.4 — 0.3  Related party royalties 0.4 0.4 0.5 64.2 66.0 63.1 Operating income 9.7 7.2 10.6 Interest expense, net 0.2 0.2 0.2 Earnings before income taxes, minority interest and accounting change 9.5 7.0 10.4 Provision for income taxes 3.1 2.4 3.7 Minority interest, net of tax (0.1) (0.1) (0.1) Net earnings before accounting change 6.3 4.5 6.6 Cumulative effect of a change in accounting principle, net of tax — (0.4) (0.1) Net earnings 6.3% 4.1% 6.5% The following tables present reconciliations of our financial results for the fiscal years ended June 30, 2003, 2002 and 2001 as reported in conformity with generally accepted accounting principles in the United States (“GAAP”) and those results adjusted to exclude certain charges described above each table. We have presented these reconciliations because of the special nature of the charges or the fact that they are not necessarily comparable from period to period. We believe that such measures provide investors with a view of our ongoing business trends and results of operations. This is consistent with the approach used by management in its evaluation and monitoring of such trends and results and provides investors with a base for evaluating future periods. While we consider the non-GAAP financial measures useful in analyzing our results, it is not intended to replace, or act as a substitute for, any presentation included in the consolidated financial statements prepared in conformity with GAAP. The table below reconciles the fiscal 2003 results as reported and results prior to adjustment for a special pre-tax charge of $22.0 million, or $13.5 million after-tax, equal to $.06 per diluted common share, in connection with the proposed settlement of a class action lawsuit brought against us and a number of other defendants (see “Item 3. Legal Proceedings.”). The amount of the charge in this case is significantly larger than similar charges we have incurred individually or in the aggregate for legal proceedings in any prior year and we do not expect to take a charge of a similar magnitude for a single matter like it in the near future. YEAR ENDED JUNE 30, 2003 Results as Reported Reconciling Items Non-GAAP Results (In millions, except per share data) Net sales $5,117.6 $ — $5,117.6 Cost of sales 1,335.7 — 1,335.7 Gross profit 3,781.9 — 3,781.9 Gross margin  73.9% 73.9% Operating expenses 3,286.8 22.0 3,264.8 Operating expense margin 64.2% 63.8% Operating income 495.1 22.0 517.1 Operating income margin 9.7% 10.1% Provision (benefit) for income taxes 160.5 (8.5) 169.0 Net earnings $ 319.8 $13.5 $ 333.3 Diluted net earnings per common share $ 1.26 $ .06 $ 1.32 The table below reconciles the fiscal 2002 results as reported and results prior to adjustment for (i) pre-tax restructuring charges of $117.4 million, or $76.9 million after-tax, equal to $.32 per diluted common share (see “Results of Operations — THEEST{E LAUDER COMPANIES INC. 42