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## MANAGEMENT’ S DISCUSSION & ANALYSIS 

## Recent Accounting Changes 

The Company adopted SFAS 141, “Business Combinations,” and SFAS 142, “Goodwill and Other Intangible Assets.” SFAS 141 requires companies to account for acquisitions entered into after June 30, 2001, using the purchase method and establishes criteria to be used in determining whether acquired intangible assets are to be recorded separately from goodwill. SFAS 142 sets forth the accounting for goodwill and other intangible assets. Goodwill and other intangible assets with indefinite lives are no longer amortized but instead are evaluated at least annually for impairment by comparing the carrying value to the fair value at the reporting unit level. Intangible assets with finite lives will be amortized over their useful lives. SFAS 142 is effective for acquisitions completed after June 30, 2001, and, as of January 1, 2002, became effective for all other prior acquisitions. 

In August 2001, SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” was issued. This statement was effective on January 1, 2002, for the Company. Adoption of this standard did not have a material impact on the Company’s financial position, results of operations or cash flows. 

In April 2002, SFAS 145, “Rescission of FASB Statements No. 4, 44, and 64, amendment of FASB Statement No. 13, and Technical Corrections,” was issued. The standard eliminates an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. The adoption of this statement is not expected to have a material impact on the Company’s financial position, results of operations or cash flows. 

In June 2002, SFAS 146, “Accounting for Costs Associated with Exit or Disposal Activities,” was issued. This statement provides guidance on the recognition and measurement of liabilities associated with exit or disposal activities and requires that such liabilities be recognized when incurred. This statement is effective for exit or disposal activities that are initiated after December 31, 2002, and does not impact the Company’s existing accruals. Adoption of this standard may impact the timing of recognition of costs associated with future exit and disposal activities. 

In November 2002, the FASB issued FASB Interpretation 45 (FIN 45), “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others.” FIN 45 expands disclosure requirements and requires that a guarantor recognize, at fair value, a liability for its obligation under a guarantee. The recognition and measurement requirements are effective on a prospective basis for guarantees issued or modified after December 31, 2002. Management believes that FIN 45 will not have a material impact on the Company’s financial position, results of operations or cash flows. The Company has complied with the expanded disclosure requirements. 

In December 2002, SFAS 148, “Accounting for Stock Compensation — Transition and Disclosure,” was issued. This statement addresses transition provisions and disclosure requirements. The Company has complied with the amended disclosure requirements. 

## Forward-Looking Statements 

This Annual Report may contain certain forward-looking statements as defined in the Public Securities Litigation and Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those contained in the statements. Investors are encouraged to consider these risks and uncertainties as described within the Company’s periodic filings with the Securities and Exchange Commission, including the following: the ability of the Company to integrate newly acquired businesses and to realize acquisition synergies on schedule; changes in market demand for the types of products and services produced and sold by the Company; the Company’s success in identifying and attracting customers in new markets; the Company’s timely ability to develop new and enhanced products to meet customers’ needs; the effectiveness of the Company’s marketing and sales programs; increased competitive activities that could adversely affect customer demand for the Company’s products; changes in economic and political conditions worldwide and in the locations where the Company does business; interest and foreign exchange rate fluctuations; and regulatory changes. 

