H O N I N D U S T R I E S I n c . a n d S U B S I D I A R I E S Long-Term Debt Accounts Payable and Accrued Expenses Selling and Administrative Expenses 48 (In thousands) 2003 2002  2001  Freight expense for shipments to customers  $ 105,933 $ 98,876  $ 103,489 Amortization of  intangible and other assets  4,625 4,317  12,646 Product development costs  25,791 25,849  21,415 Other selling and administrative expenses  344,395  325,147  326,656 $ 480,744 $ 454,189  $ 464,206 (In thousands) 2003 2002  2001  Trade accounts payable  $ 44,295 $ 66,204  $  53,660 Compensation  22,803 20,686  13,663 Profit sharing and  retirement expense  30,365 26,788  26,020 Vacation pay  13,745 14,095  13,881 Marketing expenses  44,795 59,224  54,861 Casualty self-insurance expense  9,385 10,973  17,189 Other accrued expenses  45,848 54,175 36,910 $211,236 $ 252,145  $  216,184 (In thousands except for per share data) 2003 2002  2001  Reported net income  $ 98,105 $ 91,360  $ 74,407 Add back: Goodwill  amortization, net of tax  –  –  5,611 Add back: Trademark  amortization, net of tax  –  –  149 Adjusted net income  $ 98,105 $ 91,360  $ 80,167 Diluted earnings per share:  Reported net income $  1.68 $  1.55  $  1.26 Goodwill & trademark  amortization, net of tax  – –  .10 Adjusted net income  $  1.68 $  1.55  $  1.36 (In thousands) 2004  $ 26,243 2005 117 2006  95 2007 52 2008  43 Thereafter  2,383 (In thousands) 2003 2002  2001  Industrial development revenue  bonds, various issues, payable  through 2018 with interest  at 1.49-5.40% per annum  $ 2,300 $ 7,938  $ 23,995 Convertible debentures  payable to individuals, with  interest at 5.5% per annum  26,130  40,443  58,074 Other notes and amounts  503 736 3,285 Total debt 28,933 49,117  85,354 Less: current portion  26,243  40,564  5,784 Long-term debt  $ 2,690 $  8,553  $ 79,570 Office  Hearth (In thousands) Furniture  Products  Total Balance as of December 29, 2001  $ 43,611  $ 143,083  $ 186,694 (after SFAS 142 reclassification) Goodwill increase during period  –  5,710  5,710 Net goodwill disposed of  during period  –  (9)  (9) Balance as of December 28, 2002  $ 43,611  $ 148,784  $ 192,395 Adjustment for a prior acquisition  –  (309)  (309) Balance as of January 3, 2004  $ 43,611  $ 148,475  $192,086 The changes in the carrying amount of goodwill since December 29,  2001, are as follows by reporting segment: The goodwill increase in 2002 relates to additional purchase consider- ation associated with debentures issued in connection with a prior  acquisition. The decrease in goodwill in 2003 is due to an adjustment  relating to a prior acquisition. The following schedule reports the adjusted net income for  the goodwill and indefinite-lived trademark amortization effect: Aggregate maturities of long-term debt are as follows: The convertible debentures are payable to the former owners of busi- nesses that were acquired by the Company. Following the acquisition  some of these individuals continued as members of the Company. The  convertible debentures are convertible into cash. The debentures con- tain certain conversion features that are recorded as earned. During  2003 the Company recorded approximately $3 million of appreciation  on these debentures. Certain of the above borrowing arrangements include  covenants which limit the assumption of additional debt and lease  obligations. The Company has been and currently is in compliance  with the covenants related to these debt agreements. The fair value  of the Company’s outstanding long-term debt obligations at year- end 2003 approximates the recorded aggregate amount.