The Company follows a policy of accelerating international currency settlements to manage its foreign exchange exposure. Accordingly, the Company enters into foreign currency hedging transactions only in limited locations where there are regulatory or commercial limitations on the Company’s ability to move money freely around the world. Such hedging activity during 2002, 2001 and 2000 was insignificant. Net foreign currency gains realized during 2002 were $70. Net foreign currency losses realized during 2001 were $366. Net foreign currency gains realized during 2000 were $309. 

## K. Comprehensive Income 

Comprehensive income consists of net income and other gains and losses affecting share- holders’ equity that, under generally accepted accounting principles in the United States, are excluded from net income. For the Company, these consist of foreign currency translation gains and losses, net of related income tax effects. 

## L. Segment Reporting 

The Company is organized functionally in geographic operating segments. Accord- ingly, management focuses its attention on revenues, net revenues, operating income, identifiable assets, capital expenditures, depreciation and amortization and equity generated in each of these geographical areas when evaluating effectiveness of geographic management. The Company charges its subsidiaries and affiliates for ser- vices rendered in the United States on a cost recovery basis. Transactions among the Company’s various offices are conducted using the same arms-length pricing method- ologies the Company uses when its offices transact business with independent agents. 

## M. Use of Estimates 

The preparation of financial statements in conformity with generally accepted account- ing principles requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. 

## N. Reclassification 

Certain prior year amounts have been reclassified to conform with the 2002 presenta- tion. 

