A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T  compared to $1,062.0 million for 2002.  Sales of interconnect products and  assemblies increased 20% compared to  2002 ($1,072.0 million in 2003 versus  $892.3 million in 2002). Sales increased  in the Company’s major end markets  including military/aerospace, mobile communications, industrial, automotive  and computer/data communications markets. The increases occurred in all  major geographic regions, with approximately one third of the increase  attributable to the effect of currency  translation, as detailed below. The  remaining increase was attributable to the  continuing development of new application specific and value added  products, economic improvement in some of the Company’s major end  markets and acquisitions in 2002 and  2003. The increase in military/aerospace  sales (approximately $47 million) relates  primarily to increased demand on military programs and avionics applications in North America and  Europe, and an acquisition ($8 million). The increase in sales in the mobile  communications markets (approximately  $42 million) is attributable to the  acquisition of companies in North America and China serving the network  infrastructure market (approximately $18  million) and increases in Asia in sales of  handset products. The increase in sales  in the industrial market (approximately  $36 million) reflects increases resulting  from acquisitions in North America  (approximately $16 million) and increased sales in Europe. Automotive  sales increased approximately $33 million primarily in Europe and to a  lesser extent in North America reflecting  increased use of safety and telematic  applications in cars. Sales to the  computer and data communications related markets increased approximately  $23 million; a cable assembly acquisition  in North America contributed one-third  of the increase and the remainder reflects  increased sales in Europe and Asia.  Sales of cable products decreased 1%  compared to 2002 ($167.5 million in  2003 versus $169.7  million in 2002).  Such decrease is generally attributable to  continuing low levels of capital spending  by U.S. and international cable television  operators for cable system upgrades and  expansion. The lower levels of spending  are not expected to change significantly  in the near term.  Geographically, sales in the U.S. in  2003 increased approximately 11% compared to 2002 ($555.9 million in  2003 versus $501.1 million in 2002);  international sales for 2003 increased  approximately 22% in U.S. dollars  ($683.6 million in 2003 versus $560.9 million in 2002) and increased  approximately 12% in local currency  compared to 2002. The comparatively  weak U.S. dollar in 2003 had the  currency effect of increasing net sales by  approximately $63.9 million when compared to foreign currency translation  rates in 2002. The gross profit margin as a  percentage of net sales (including depreciation in cost of sales) remained  constant at 31% for 2003 and 2002. An  increase in margins in the interconnect  products and assemblies segment was  offset by a decline in margins in the cable  products segment. The operating margin  for interconnect products and assemblies  increased approximately 2% compared to  the prior year, the increase is generally  attributable to the effects of higher sales  volume and cost reduction activities  relating to purchased materials and  increased activity in low cost labor areas.  The increase was offset by a decline in  operating profit margins for cable products of approximately 6% compared  to the prior year due primarily to higher  material costs and change in product mix. Selling, general and administrative  expenses were $177.4 million and $152.9  million in 2003 and 2002, respectively,  and remained constant at approximately  14% of sales. Research and development  expenditures increased approximately $2.2 million, reflecting increases in  expenditures for new product development. Selling and marketing  expenses remained constant at approximately 7% of sales. Shipping  expense, which relates primarily to sales  of cable products to the broadband  market, remained stable, commensurate  with sales for those products. Administrative expenses increased by  approximately $6.9 million, due primarily to increases in costs relating to  insurance, pensions and medical benefits.  Interest expense was $29.5 million  for 2003 compared to $45.9 million for  2002. The decrease is primarily attributable to lower interest rates including the effect of the refinancing  completed in the second quarter of 2003  (see Liquidity and Capital Resources)  and lower average debt levels. Expenses for early extinguishment  of debt totaling $10.4 million in 2003,  relate to the refinancing of the Company’s senior credit facilities. Such  one-time expenses include the call  premium related to the redemption of the  Company’s Senior Subordinated Notes  of $4.7 million, write-off of unamortized  deferred debt issuance costs of $3.9  million and other related fees and  expenses of $1.8 million. Other expenses, net, for 2003 and  2002 was $7.0 million and $5.4 million,  respectively. Other expenses, net, is  comprised primarily of foreign currency  transaction losses ($1.3 million in 2003  and $2.7 million in 2002), reflecting the  relative weakness of the U.S. dollar in  2003 and 2002, program fees on sale of  accounts receivable ($1.5 million in 2003  and $1.8 million in 2002), reflecting  lower receivable fee rates in 2003,  minority interests ($2.4 million in 2003  and $1.8 million in 2002) and agency and  commitment fees on the Company's  credit facilities ($0.8 million in 2003 and  $0.6 million in 2002). In addition, in  2003 the Company incurred $1.0 million  in expenses relating to a secondary stock offering (for which the Company   did not receive any proceeds), and in  2002 the Company realized $1.5 million  of income relating to a license fee  settlement. See Note 8 to the Company's  Consolidated Financial Statements for  details of the components of other  expenses, net. The provision for income taxes for  2003 was at an effective rate of 34%  compared to 34.5% in 2002.  Liquidity and Capital Resources  Cash provided by operating activities totaled $208.3 million, $170.0  million and $120.6 million for 2004,  29