Typically, the fees for each of these services are quoted as separate components, however, customers on occasion will request an all-inclusive rate for a set of services known in the industry as “door-to-door service.” This means that the customer is billed a single rate for all services from pickup at origin to delivery at destination. In these instances, the revenue for origin and destination services, as well as revenue that will be characterized as freight charges, is allocated to branches as set by preexisting Com- pany policy perhaps supplemented by customer specific negotiations between the offices involved. Each of the Company’s branches are independent profit centers and the pri- mary compensation for the branch management group comes in the form of incentive-based compensation calculated directly from the operating income of that branch. This compensation structure ensures that the allocation of revenue and ex- pense among components of services, when provided under an all-inclusive rate, are done in an objective manner on a fair value basis, in accordance with Emerging Issues Task Force (EITF) 00-21, “Revenue Arrangements with Multiple Deliverables.” While judgments and estimates are a necessary component of any system of account- ing, the Company’s use of estimates is limited primarily to the following areas that in the aggregate are not a major component of the Company’s statement of earnings: In addition, certain undistributed earnings of the Company’s subsidiaries accumu- lated through December 31, 1992 would, under most circumstances, be subject to some additional United States income tax if distributed to the Company. The Company has not provided for this additional income tax because the Company intends to reinvest such earnings to fund the expansion of its foreign activities, or to distribute them in a manner in which no significant additional taxes would be incurred. Management be- lieves that the methods utilized in all of these areas are non-aggressive in approach and consistent in application. Management believes that there are limited, if any, alterna- tive accounting principles or methods which could be applied to the Company’s transactions. While the use of estimates means that actual future results may be differ- ent from those contemplated by the estimates, the Company believes that alternative principles and methods used for making such estimates would not produce materially different results than those reported. 71 expd 02 MD&A • accounts receivable valuation, • the useful lives of long-term assets, • the accrual of costs related to ancillary services the Company provides, and • establishment of adequate insurance liabilities for the portion of the freight related exposure which the Company has self insured.