Financial Review 24 The Procter & Gamble Company and Subsidiaries Currency Rate Exposure Commodity Price Exposure Restructuring Program initiated a multi-year restructuring program. The program is designed to accelerate growth and deliver cost reductions  by streamlining management decision-making, manufactur- ing and other work processes and discontinuing under-per- forming businesses and initiatives. Technology improvements,  as well as standardization of manufacturing and other work  processes allow the Company to streamline its operations.  This resulted in the consolidation of manufacturing activity  and various business processes. Based on the Company’s overall interest rate exposure as of and during the year ended June 30, 2002, including derivative and other instruments sensitive to interest rates,  the Company does not believe a near-term change in interest  rates, at a 95% confidence level based on historical interest  rate movements, would materially affect the Company’s financial statements. The Company manufactures and sells its products in a number of countries throughout the world and, as a result, is  exposed to movements in foreign currency exchange rates. The primary purpose of the Company’s foreign currency  hedging activities is to reduce the risk that the Company’s financial position will be adversely affected by short-term  changes in exchange rates. Corporate policy prescribes the  range of allowable hedging activity. The Company primarily  utilizes forward exchange contracts and purchased options  with maturities of less than 18 months.  The total cost of the program is expected to be $5.6 billion  before tax ($4.4 billion after tax). Through 2002, cumulative  charges are $4.1 billion before tax ($3.3 billion after tax). The  remaining charges are expected to continue through fiscal  2004. Given the nature and duration of the program, costs  to be incurred in future years are subject to varying degrees  of estimation for key assumptions, such as actual timing of  execution, currency effects, enrollment impacts and other  variables. All restructuring costs are reported in the corporate  segment. In addition, the Company enters into certain foreign currency  swaps with maturities of up to five years to hedge intercom- pany financing transactions. The Company also utilizes purchased foreign currency options with maturities of gener- ally less than 18 months and forward exchange contracts to  hedge against the effect of exchange rate fluctuations on  royalties and income from international operations. Summary of Restructuring Charges Based on the Company’s overall currency rate exposure as of  and during the year ended June 30, 2002, including deriva- tive and other instruments sensitive to foreign currency  movements, the Company does not believe a near-term  change in currency rates, at a 95% confidence level based  on historical currency rate movements, would materially affect the Company’s financial statements.  Raw materials used by the Company are subject to price volatility caused by weather, supply conditions, political and  economic variables and other unpredictable factors. The  Company uses futures, options and swap contracts to manage the volatility related to the above exposures. Commodity hedging activity is not considered material to the  Company’s financial statements.  Separations represent the cost of packages offered to employees, which are generally accrued upon employee acceptance. The separation packages, predominantly volun- tary, are formula driven based on salary levels and past service. Separation costs are charged to cost of products sold  for manufacturing employees and marketing, research, administrative and other for all other employees. Approximately 16,600 separation packages have been provided for through June 30, 2002: 7,400 in 2002 and  9,200 from 1999 to 2001. While all geographies and businesses are impacted by the enrollment reduction programs, a higher number of United States employees are  affected, given the concentration of operations. Net enroll- ment for the Company may decline by less than the total  separations, as terminations will be offset by increased enrollment at remaining sites, acquisitions and other impacts. In 1999, concurrent with a reorganization of its operations  into product-based global business units, the Company (in millions of dollars) Separations Accelerated Depreciation Asset Write-Downs Other  Total (before tax) Total (after tax) $153 386 64 211 814 688 $341 276 731 502 1,850 1,475 $393 135 208 222 958 706 Years Ended June 30 2002 2001 2000