Table of Contents 

Recent Accounting Pronouncements 

In August 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 144, 

Accounting for the Impairment or Disposal of 

Long Lived Assets 

, that is applicable to financial statements issued for fiscal years beginning after December 15, 2001. The FASB's new rules 

on asset impairment supersede SFAS No. 121, 

Accounting for the Impairment of Long Lived Assets and for Long Lived Assets to Be Disposed 

Of 

, and portions of Accounting Principles Bulletin Opinion 30, 

Reporting the Results of Operations 

. This standard provides a single 

accounting model for long lived assets to be disposed of and significantly changes the criteria that would have to be met to classify an asset as 

held for sale. Classification as held for sale is an important distinction since such assets are not depreciated and are stated at the lower of fair 

value and carrying amount. This standard also requires expected future operating losses from discontinued operations to be displayed in the 

period(s) in which the losses are incurred, rather than as of the measurement date as presently required. The provisions of this standard are not 

expected to have a significant effect on our financial position or operating results.  

In June 2001, the FASB issued SFAS No. 143, 

Accounting for Asset Retirement Obligations 

. This statement establishes accounting 

standards for recognition and measurement of a liability for an asset retirement obligation and the associated asset retirement cost. This 

statement is effective for financial statements issued for fiscal years beginning after June 15, 2002. We do not expect the adoption of SFAS No. 

143 to have a material effect on our financial position or results of operations.  

In June 2001, the FASB issued SFAS No. 141, 

Business Combinations 

and SFAS No. 142, 

Goodwill and Other Intangible Assets 

. SFAS 

No. 141 requires business combinations initiated after June 30, 2001 to be accounted for using the purchase method of accounting, and 

broadens the criteria for recording intangible assets separate from goodwill. Recorded goodwill and intangibles will be evaluated against these 

new criteria and may result in certain intangibles being subsumed into goodwill, or alternatively, amounts initially recorded as goodwill may be 

separately identified and recognized apart from goodwill. SFAS No. 142 requires the use of a nonamortization approach to account for 

purchased goodwill and certain intangibles. Under a nonamortization approach, goodwill and certain intangibles will not be amortized into 

results of operations, but instead would be reviewed for impairment and written down and charged to results of operations only in the periods 

in which the recorded value of goodwill and certain intangibles is more than their fair value. The provisions of each statement that apply to 

goodwill and intangible assets acquired prior to June 30, 2001 were adopted on January 1, 2002. As we have previously disclosed, we expect to 

incur a non cash charge estimated to range from $100 million to $200 million, which will be recorded in the first quarter of 2002 for the 

cumulative effect of adopting SFAS No. 142 Goodwill and Other Intangible Assets. We have retained an independent valuation firm to conduct 

the valuation analysis pursuant to SFAS 142 and we expect to receive the results of their analysis by the end of April 2002. There can be no 

assurance that the results of the analysis by this independent valuation firm will not result in a non cash charge less than or in excess, perhaps 

substantially, of the amount previously estimated and disclosed by us.  

SFAS No. 133, 

Accounting for Derivative Instruments and Hedging Activities 

, is effective for us for the fiscal year beginning January 1, 

2001. SFAS No. 133 as amended and interpreted, established accounting and reporting standards for derivative instruments, including certain 

derivative instruments embedded in other contracts, and for hedging activities. All derivatives, whether designated in hedging relationships or 

not, are required to be recorded on the balance sheet at fair value. If the derivative is designated as a cash flow hedge, changes in fair value of 

the derivative and the hedged item will be recorded in other comprehensive income and will be recognized on the income statement when the 

hedged item affects earnings. SFAS No. 133 defines new requirements for designation and documentation of hedging relationships as well as 

ongoing effectiveness assessments in order to use hedge accounting. For a derivative that does not qualify as a hedge, changes in fair value will 

be recognized in earnings.  

We have determined that certain warrants held to purchase stock in other companies are derivative instruments under SFAS No. 133. We 

recorded a cumulative effect of change in accounting principle in net income of $3.2 million on January 1, 2001 to record these warrants on the 

balance sheet at fair value. Except as it relates to these warrants, management does not expect the adoption of SFAS No. 133 to have a 

significant impact on our financial position, results of operations or cash flows.  

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