48 expd 02 Note 1 technical knowledge of customs rules and regulations in the multitude of countries in which the Company has offices. Revenues related to customs brokerage and import services are recognized upon completion of the services.  Arranging international shipments is a complex task. Each actual movement can require multiple services. In some instances, the Company is asked to perform only one of these services. However, in most instances, the Company may perform multiple services. These services include destination breakbulk services and value added ancillary services such as local transportation, export customs formalities, distribution services and logistics management. Each of these services has an associated fee, which is recognized as revenue upon completion of the service. 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 Company policy perhaps supplemented by customer specific negotiations between the offices involved. Each of the Company’s branches are independent profit centers and the primary 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 expense 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.” In November 2001, the FASB staff issued Topic D-103 (subsequently recharacterized as EITF 01-14), “Income Statement Characterization of Reimbursements Received for ‘Out of Pocket’ Expenses Incurred.” This staff announcement clarified certain provisions of EITF 99-19 “Reporting Revenue Gross as a Principal versus Net as an Agent,” and among other things established when reimbursements are required to be shown gross as opposed to net. EITF 01-14 also directed that the new rules should be applied in financial reporting periods beginning after December 15, 2001. Beginning in the first quarter of 2002, the Company has complied with the guidance in EITF 01-14. Prior to the adoption of EITF 01-14, the Company recorded such reimbursements on a net basis. The Company has reclassified amounts in the 2001 and 2000 presentations to conform with the current presentation. The amounts reclassified resulted in an increase to Total Revenues and Transportation Costs of $230,437 in 2001 and $211,545 in 2000. There was no impact on net revenue nor was there any impact on operating income and net earnings as a result of this change.