37 capacity of the production facilities. The Company is  currently evaluating the potential impact of this stan- dard on its financial position and results of operations,  but does not believe the impact of the change will be  material. 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 Deduction 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.  The Jobs Creation Act provides a deduction for  income from qualified domestic production activi- ties, 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.  Accordingly, 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 incen- tive for U.S. corporations to repatriate accumulated  income earned abroad by providing an 85 percent divi- dends received deduction for certain dividends from  controlled foreign corporations. The deduction is subject  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 state- ments the effects of the one-time tax benefit on the repa- triation of foreign earnings. Under SFAS No. 109, com- panies are normally required to reflect the effect of new  tax law changes in the period of enactment. FSP 109-2  provides companies additional time to determine the  Reclassifications – Certain prior year amounts as well as  unaudited quarterly financial data presented in the accom- panying consolidated financial statements have been reclas- sified to conform to the current year financial statement  presentation. These reclassifications had no impact on pre- viously reported net income or stockholders’ equity. 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 state- ments from the date of grant. Accordingly, the adoption  of SFAS No. 123(R)’s fair value method will have a sig- nificant 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 approximated the impact  of SFAS No. 123 as shown in the table above (see discus- sion in Stock-Based Compensation above). 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. amount of earnings, if any, that they intend to repatriate  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.