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## Asset Write-Downs 

Asset write-downs relate to the establishment of new carrying values for assets held for sale or disposal. These assets represent excess capacity in the process of being removed from service or disposed as well as businesses held for sale in the next 12 months. These assets were written down to the amounts expected to be realized upon sale or disposal, less minor disposal costs. 

Additionally, asset write-downs include certain manufacturing assets that are expected to operate at levels significantly below their planned capacity, primarily capital expansions related to recent initiatives that have not met expectations. The projected cash flows from such assets over their remaining useful lives are no longer estimated to be greater than their current carrying values; therefore, they were written down to estimated fair value, generally determined by reference to discounted expected future cash flows. Such before-tax charges represented approximately $45 in 2002, $160 in 2001 and $0 in 2000. 

## Accelerated Depreciation 

Charges for accelerated depreciation relate to long-lived assets that will be taken out of service prior to the end of their normal service period due to manufacturing consolidations, technology standardization, plant closures or strategic choices to discontinue initiatives. The Company has shortened the estimated useful lives of such assets, resulting in incremental depreciation expense. 

## Other Restructuring Charges 

Other costs incurred as a direct result of the program include relocation, training, certain costs associated with discontinuation of initiatives and the establishment of global business services and the new legal and organization structure. 

## Note 3 Acquisitions and Spin-off 

## Acquisitions 

The purchase method of accounting was used for acquisitions in all periods presented. In 2002, acquisitions totaled $5.5 billion, resulting in additions to goodwill of $3.6 billion and other intangible assets of $1.7 billion (see Note 4). These acquisitions consisted primarily of Clairol along with an incremental payment for Dr. John’s Spinbrush. 

On November 16, 2001, the Company completed the acquisition of the Clairol business from the Bristol-Myers Squibb Company for approximately $5.0 billion in cash, financed primarily with debt. Total cash paid includes final purchase price adjustments based on a working capital formula. The Clairol business consists of hair care, hair colorants and personal care products, giving the Company entry into the hair 

colorant market, while providing potential for significant synergies. The operating results of the Clairol business are reported in the Company’s beauty care segment from November 16, 2001. 

The following table provides pro forma results of operations for the years ended June 30, 2002, 2001 and 2000, as if Clairol had been acquired as of the beginning of each fiscal year presented. The pro forma results include adjustments for estimated interest expense on acquisition debt and amortization of intangible assets, excluding goodwill and indefinite-lived intangibles. However, pro forma results do not include any anticipated cost savings or other effects of the planned integration of Clairol. Accordingly, such amounts are not necessarily indicative of the results that would have occurred if the acquisition had closed on the dates indicated, or that may result in the future. 

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The initial purchase price allocation of the Clairol business resulted in the following condensed balance sheet of assets acquired and liabilities assumed. It is anticipated that there will be changes to the initial allocation as fair values are finalized next quarter, but the Company does not expect these changes to have a material impact on the results of operations or financial condition of the Company in future periods. 

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(1) Approximately $2.6 billion is expected to be deductible for tax purposes. 

The Clairol acquisition resulted in $1,533 in total intangible assets acquired with $1,220 allocated to trademarks with indefinite lives. The remaining $313 of acquired intangibles have determinable useful lives and were assigned to trademarks of $128, patents and technology of $146 and other intangible assets of $39. Total intangible assets acquired with determinable lives have a weighted average useful life of 9 years (11 years for trademarks, 9 years for patents and technology and 5 years for other intangible assets). 

