some of the implementation issues related to SFAS No. 121. SFAS No. 144 also broadens the presentation of discontinued operations to include more disposal transactions. The Company adopted this Statement effective April 1, 2002, as required. In accordance with this Statement, the Company measures impairment when events or circumstances indicate an asset’s carrying value may not be recoverable. The estimate of an asset’s fair value used in the measuring for impairment is based on the best available evidence at the time, which may include broker quotes, values of similar transactions and/or discounting the probability-weighted future cash flows expected to be generated by the asset. This statement was used as a basis for reporting the Company’s discontinued operations and calculating the asset impairments occurring as a result of the disposal. See further discussion of the impact of this Statement on the Company’s financial position and results of operations in Notes 2 and 3. In April 2002, the FASB issued SFAS No. 145, ‘‘Rescission of FASB Statements No. 4, 44 and 64, Amend- ment of FASB Statement No. 13, and Technical Corrections.’’ SFAS No. 145 requires gains and losses on extinguishments of debt to be reclassified as income or loss from continuing operations rather than as extraordi- nary items as previously required by SFAS No. 4, ‘‘Reporting Gains and Losses from Extinguishment of Debt.’’ The provisions of SFAS No. 145 related to the rescission of SFAS No. 4 are effective for fiscal years beginning after May 15, 2002, with restatement of prior period gains and losses on the extinguishment of debt to be classified as income or loss from continuing operations rather than as an extraordinary item as previously required. The Company early adopted this Statement effective March 31, 2003. During Fiscal 2001, the Company entered into a new bank agreement and terminated the old agreement. The related deferred financing costs of $0.8 million written-off as a result of the termination, which were previously recorded as an extraordinary charge, have been reclassified to continuing operations in the accompanying Consolidated Statement of Operations. In June 2002, the FASB issued SFAS No. 146, ‘‘Accounting for Exit or Disposal Activities.’’ SFAS No. 146 is effective for exit or disposal activities initiated after December 31, 2002. SFAS No. 146 requires that liabilities for one-time termination benefits that will be incurred over future service periods should be measured at the fair value as of the termination date and recognized over the future service period. This statement also requires that liabilities associated with disposal activities should be recorded when incurred. These liabilities should be adjusted for subsequent changes resulting from revisions to either the timing or amount of estimated cash flows, discounted at the original credit-adjusted risk-free rate. Interest on the liability would be accreted and charged to expense as an operating item. The Company adopted this Statement effective January 1, 2003 and used the guidelines as a basis for reporting exit and disposal activities related to the Company’s discontinued operations and restructuring. See further discussion of the impact on the Company’s financial position and results of operations in Notes 2 and 3. In November 2002, the FASB issued Interpretation No. 45, ‘‘Guarantor’s Accounting and Disclosure Require- ments for Guarantees, Including Indirect Guarantees of Indebtedness of Others,’’ (‘‘FIN 45’’) which clarifies the required disclosures to be made by a guarantor in their interim and annual financial statements about its obligations under certain guarantees that it has issued. FIN 45 also requires a guarantor to recognize, at the inception of the guarantee, a liability for the fair value of the obligation undertaken for those guarantees initiated or modified after December 31, 2002. As of March 31, 2003, the Company does not have any outstanding guarantees that would require additional disclosure. The Company will adopt prospectively the initial recognition and measurement provisions of this Interpretation for guarantees, if any, issued after March 31, 2003. In December 2002, the FASB issued SFAS No. 148, ‘‘Accounting for Stock-Based Compensation — Transition and Disclosure.’’ This Statement amends SFAS No. 123, ‘‘Accounting for Stock-Based Compensation,’’ to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock- based employee compensation. In addition, this Statement amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The transition provisions and increased disclosure requirements are effective for the year ended March 31, 2003. The Company has adopted the provisions of SFAS No. 148 as of March 31, 2003. In January 2003, the FASB issued Interpretation No. 46, ‘‘Consolidation of Variable Interest Entities,’’ (‘‘FIN 46’’) which provides guidance on identifying and assessing interests in variable interest entities to decide whether to consolidate that entity. FIN 46 requires consolidation of existing unconsolidated variable interest entities if the entities do not effectively disperse risk among parties involved. The company was required to adopt this Interpretation in the fourth quarter of Fiscal 2003, for any variable interest entities created subsequent to January 31, 2003 and is required to adopt the provisions on July 1, 2003 for entities created prior to February 1, 2003. The company does not have any variable interest entities, and therefore the adoption of this Standard did not have an impact on the Company’s financial position or results of operations. 35