27 normal capacity of the production facilities. The Com- pany is currently evaluating the potential impact of this  standard on its financial position and results of opera- tions, but does not believe the impact of the change will  be material. new tax law changes in the period of enactment. FSP  109-2 provides companies additional time to determine  the amount of earnings, if any, that they intend to repa- triate under the Jobs Creation Act’s provisions. See Note  8 for more discussion of the impact of the Jobs Creation  Act, including the Company’s status on the repatriation  of foreign earnings. On October 22, 2004, a new tax law was passed, the  American Jobs Creation Act of 2004 (the “Jobs Creation  Act”), which raised a number of issues with respect to  accounting for income taxes. In response, on December  21, 2004, the FASB issued two FASB Staff Positions  (FSP), FSP 109-1 – “ Application of FASB Statement No. 109, Accounting for Income Taxes, to the Tax Deduc- tion on Qualified Production Activities Provided by the  American Jobs Creation Act of 2004 ” and FSP 109-2  – “ Accounting and Disclosure Guidance for the Foreign  Earnings Repatriation Provision within the American Jobs  Creation Act of 2004 ,” which became effective for the  Company upon issuance.  In December 2004, the FASB issued SFAS No.  123(R). This new standard requires companies to adopt  the fair value methodology of valuing stock-based  compensation and recognizing that valuation in the  financial statements from the date of grant. Accordingly,  the adoption of SFAS No. 123(R)’s fair value method  will have a significant impact on the Company’s results  of operations, although it will have no impact on the  Company’s overall financial position. The impact of  adoption of SFAS No. 123(R) cannot be predicted at  this time because it will partially depend on levels of  share-based payments granted in the future. However,  had the Company adopted SFAS No. 123(R) in prior  periods, the impact of that standard would have ap- proximated the impact of SFAS No. 123 as shown in  the Stock-based Compensation table (see Note 1). SFAS  No. 123(R) also requires the benefits of tax deductions in  excess of recognized compensation cost to be reported as  a financing cash flow, rather than as an operating cash  flow as required under current literature. The Company  is currently evaluating several option valuation models  in order to calculate the required compensation expense.  The Company has elected to adopt the provisions of  SFAS No. 123(R) on a modified prospective application  method effective July 1, 2005, with no restatement of  any prior periods. SFAS No. 123(R) is effective for the  Company as of the beginning of the first interim report- ing period that begins after June 15, 2005. The Jobs Creation Act provides a deduction for income from qualified domestic production activities, to  be phased in from 2005 through 2010, which is intended  to replace the existing extra-territorial income exclusion  for foreign sales. In FSP 109-1, the FASB decided the  deduction for qualified domestic production activities  should be accounted for as a special deduction under  SFAS No. 109, rather than as a rate reduction. Accord- ingly, any benefit from the deduction will be reported in the period in which the deduction is claimed on the  tax return and no adjustment to deferred taxes at  December 31, 2004, is required.  The Jobs Creation Act also creates a temporary  incentive for U.S. corporations to repatriate accumu- lated income earned abroad by providing an 85 percent  dividends received deduction for certain dividends from  controlled foreign corporations. The deduction is sub- ject to a number of limitations and uncertainty remains  as to how to interpret numerous provisions in the Act.  FSP 109-2 addresses when to reflect in the financial  statements the effects of the one-time tax benefit on the  repatriation of foreign earnings. Under SFAS No. 109,  companies are normally required to reflect the effect of 