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NotestoConsolidatedFinancialStatements TheProcter&GambleCompany 65
Amountsinmillionsofdollarsexceptpershareamountsorasotherwisespecied.
NOT E 5

June30  2007

Currentportionoflong-termdebt   $ 2,544
Commercialpaper  9,410
FloatingratenotedueFebruary2009 
Other  85
  12,039
Theweightedaverageshort-terminterestrateswere2.7%and5.0%
asofJune30,2008and2007,respectively,includingtheeffectsof
interestrateswapsdiscussedinNote6.
June30  2007

4.30%USDnotedueAugust2008    $  500
3.50%USDnotedueDecember2008   650
FloatingratenotedueJuly2009 
FloatingratenotedueAugust2009 
6.88%USDnotedueSeptember2009   1,000
4.88%EURnotedueOctober2011 
3.38%EURnotedueDecember2012  1,882
4.50%EURnotedueMay2014  2,016
4.95%USDnotedueAugust2014  900
4.85%USDnotedueDecember2015   700
5.13%EURnotedueOctober2017 
4.13%EURnotedueDecember2020   806
9.36%ESOPdebenturesdue2008–2021(1)  968
4.88%EURnotedueMay2027  1,344
6.25%GBPnotedueJanuary2030  1,001
5.50%USDnotedueFebruary2034   500
5.80%USDnotedueAugust2034  600
5.55%USDnotedueMarch2037  1,400
Capitalleaseobligations   628
Allotherlong-termdebt  11,024
Currentportionoflong-termdebt  (2,544)
  23,375
(1)DebtissuedbytheESOPisguaranteedbytheCompanyandmustberecordedasdebtofthe
CompanyasdiscussedinNote9.
Long-termweightedaverageinterestrateswere4.5%and3.3%as
ofJune30,2008and2007,respectively,includingtheeffectsof
interestrateswapsandnetinvestmenthedgesdiscussedinNote6.
Thefairvalueofthelong-termdebtwas$23,276and$23,122at
June30,2008and2007,respectively.Long-termdebtmaturities
duringthenextveyearsareasfollows:2009–$1,746;2010–$5,508;
2011–$43;2012–$1,643;and2013–$2,240.
NOT E 6

Asamultinationalcompanywithdiverseproductofferings,weare
exposedtomarketrisks,suchaschangesininterestrates,currency
exchangeratesandcommodityprices.Tomanagethevolatility
relatedtotheseexposures,weevaluateexposuresonaconsolidated
basistotakeadvantageoflogicalexposurenettingandcorrelation.
Fortheremainingexposures,weenterintovariousnancialtransactions,
whichweaccountforunderSFAS133,“AccountingforDerivative
InstrumentsandHedgingActivities,”asamendedandinterpreted.
Theutilizationofthesenancialtransactionsisgovernedbyour
policiescoveringacceptablecounterpartyexposure,instrumenttypes
andotherhedgingpractices.Wedonotholdorissuederivative
nancialinstrumentsforspeculativetradingpurposes.
Atinception,weformallydesignateanddocumentqualifyinginstru-
mentsashedgesofunderlyingexposures.Weformallyassess,both
atinceptionandatleastquarterlyonanongoingbasis,whetherthe
nancialinstrumentsusedinhedgingtransactionsareeffectiveat
offsettingchangesineitherthefairvalueorcashowsoftherelated
underlyingexposure.Fluctuationsinthevalueoftheseinstruments
generallyareoffsetbychangesinthefairvalueorcashowsofthe
underlyingexposuresbeinghedged.Thisoffsetisdrivenbythehigh
degreeofeffectivenessbetweentheexposurebeinghedgedandthe
hedginginstrument.Anyineffectiveportionofachangeinthefair
valueofaqualifyinginstrumentisimmediatelyrecognizedinearnings.

Wehavecounterpartycreditguidelinesandnormallyenterinto
transactionswithinvestmentgradenancialinstitutions.Counterparty
exposuresaremonitoreddailyanddowngradesincreditratingare
reviewedonatimelybasis.Creditriskarisingfromtheinabilityofa
counterpartytomeetthetermsofournancialinstrumentcontracts
generallyislimitedtotheamounts,ifany,bywhichthecounterparty’s
obligationsexceedourobligationstothecounterparty.Wehavenot
incurredanddonotexpecttoincurmaterialcreditlossesonourrisk
managementorothernancialinstruments.

Ourpolicyistomanageinterestcostusingamixtureofxed-rateand
variable-ratedebt.Tomanagethisriskinacost-efcientmanner,we
enterintointerestrateswapsinwhichweagreetoexchangewith
thecounterparty,atspeciedintervals,thedifferencebetweenxed
andvariableinterestamountscalculatedbyreferencetoanagreed-
uponnotionalprincipalamount.
InterestrateswapsthatmeetspeciccriteriaunderSFAS133are
accountedforasfairvalueandcashowhedges.Therewerenofair
valuehedginginstrumentsatJune30,2008,orJune30,2007.For
cashowhedges,theeffectiveportionofthechangesinfairvalueof
thehedginginstrumentisreportedinothercomprehensiveincome
(OCI)andreclassiedintointerestexpenseoverthelifeoftheunder-
lyingdebt.Theineffectiveportion,whichisnotmaterialforanyyear