Financial Review 20 The Procter & Gamble Company and Subsidiaries The Company has purchase commitments for materials, supplies, services and fixed assets as part of the normal  course of business. In the aggregate, such commitments are  not at prices in excess of current market rates. Due to the  proprietary nature of many of the Company’s materials and  processes, certain supply contracts contain penalty provisions  for early termination. The Company does not expect changes  in such provisions to materially affect results of operations or  its financial condition. This conclusion is made based upon  reasonably likely outcomes assumed by reference to historical  experience and current business plans. As discussed previously, the Company’s primary source of liquidity is cash generated from operations. Additionally, the  Company is able to support its short-term liquidity, if necessary, through agreements with a diverse group of creditworthy financial institutions. The Company has never  drawn on these facilities and does not intend to do so in the  foreseeable future. However, should the facilities be needed,  when combined with cash on hand, the Company believes  they would provide the Company with sufficient credit fund- ing to cover any short-term financing requirements. The following pages provide perspective on the Company’s  business segments. Product-based segment results exclude  items that are not included in measuring business perform- ance for management reporting purposes, most notably certain financing, investing, employee benefit and restructur- ing costs. Sales in companies over which the Company exerts signifi- cant influence, but does not control the financial and operating decisions, are reported for segment purposes in a manner similar to consolidated subsidiaries. Taxes are reflected in the business segments at estimated local statuto- ry tax rates. The effects of these conventions are eliminated  in the corporate segment to adjust management reporting  conventions to accounting principles generally accepted in  the United States of America.  Pharmaceuticals continued to deliver strong results with  worldwide volume up 29%, behind the strength of Actonel,  the Company’s post-menopausal osteoporosis drug. In 2001, health care unit volume increased 15%, driven by  the excellent performance of the pet health and nutrition,  pharmaceuticals and oral care businesses. Net sales were  Pet health and nutrition volume increased 10% behind continued growth in the United States. Global growth was  driven by new product innovation and expansion into new  geographies and channels outside the United States in the  second half of the year. Oral care led the volume growth, up significantly versus  2001. The global Crest brand continued to grow behind  strength across the portfolio, including Crest SpinBrush,  Crest Whitestrips and the base dentifrice business. In 2002,  Crest joined the ranks of the Company’s billion dollar brands. Health care delivered exceptional results, as strength in the  oral care and pharmaceutical businesses drove a 15% increase in unit volume and a 14% increase in net sales. Net  sales were $4.98 billion in 2002. Excluding a 1% negative  impact of foreign exchange, net sales grew 15%. Health  care’s volume growth from high-margin products funded in- creased marketing investments and yielded a net earnings  increase of 34% to $521 million. Health Care Segment Results 2002 Net Earnings by Business Segment Purchase Commitments 30% commitments or related party transactions that are considered material. The Company is not aware of factors  that are reasonably likely to adversely affect liquidity trends,  other than the factors discussed in the Forward-Looking  Statements. Health Care Fabric and Home Care Baby, Feminine and Family Care Beauty Care Food and Beverage 36% 8% 23% 10% 23%