Management’s Discussion and Analysis (Continued)

Financing cash flows relate primarily to the Company’s borrowings under its credit lines and treasury stock purchases. In June 2001, the Company entered into a five-year $265 million competitive advance and multicurrency credit facility. The credit facility provides for a term loan of $150 million and a revolving credit facility of $115 million, $37 million of which is available in foreign currency borrowings. As of December 31, 2001, the Company had $112 million of term loans and $68 million of revolving loans outstanding. The term loan is payable over five years, $13.6 million of which is due in 2002. The credit facility includes customary financial and other covenants that require the maintenance of certain ratios including maximum leverage and interest coverage and restrict the Company’s ability to make certain investments, incur debt and dispose of assets. Borrowings under the credit facility are, at the option of the borrower, at one of several rates including LIBOR plus .60% to 2.0% basis points, based upon the credit rating of the Company and the loan type. In addition, the Company has the option to request participating banks to bid on loan participation at lower rates than those contractually provided by the credit facility. The credit facility requires the Company to pay annual fees of 1/15 of 1% to ½ of 1% based upon the credit rating of the Company. The proceeds from the credit facility will be used for general corporate purposes, including working capital, debt repayment, stock repurchases, investments and acquisitions.

In 1998, the Company completed a $100 million senior unsecured note offering (“the Notes”), bearing a coupon rate of 7.13% with an effective rate of 7.22%. The Notes will mature on May 1, 2008, with interest on the Notes to be paid semi-annually. The Company used the net proceeds from the offering of approximately $99 million to repay amounts outstanding under the Company’s previous credit facility.

Through December 31, 2001, the Company had repurchased 21.1 million shares of its common stock at a total cost of $314.0 million, including 12.0 million shares at a cost of $185.7 million during the year ended December 31, 2001. The Company has received authorization from its Board of Directors to repurchase up to an additional 5.3 million shares under the terms of the repurchase plan. Subsequent to December 31, 2001, the Company repurchased 1.3 million shares of outstanding common stock at a total cost of $28.8 million.

The Company believes that cash flows from operations and available financing capacity are adequate to meet the expected operating, investing, financing and debt service requirements of the business for the immediate future.

Impact of Recently Issued Accounting Standards

The Company has adopted SFAS No. 142, “Goodwill and Other Intangible Assets,” effective January 1, 2002, which updates accounting and reporting standards for the amortization of goodwill and recognition of other intangible assets. SFAS No. 142 requires goodwill to be assessed on at least an annual basis for impairment using a fair value basis. Because the Company operates in one reporting unit in accordance with SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information” and EITF 98-3, “Determining Whether a Nonmonetary Transaction Involves Receipt of Productive Assets or of a Business”, the fair value of the Company’s total assets are used to determine if goodwill may be impaired. According to SFAS No. 142, quoted market prices in active markets are the best evidence of fair value and shall be used as the basis for the measurement if available. The Company will no longer be required to record goodwill amortization expense of approximately $2.0 million per year and does not expect to recognize any impairment on its goodwill balances as a result of the adoption of SFAS No. 142. The Company will perform the initial assessment of the fair value of its goodwill balances during the first quarter of 2002.

In June 2001, the FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations,” which addresses the accounting and reporting standards for the retirement of tangible long-lived assets and the associated asset retirement costs. SFAS No. 143 requires the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The Company will be required to adopt SFAS No. 143 by January 1, 2003. The Company does not expect the adoption of SFAS No. 143 to have a material effect on the Company’s earnings or comprehensive income.