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 FIN 46R is effective at the end of the first interim period ending after  March 15, 2004. Entities that have adopted FIN 46 prior to this effective  date can continue to apply the provision of FIN 46 until the effective date  of FIN 46R. The Company adopted FIN 46 on January 3, 2004, and it did  not have an impact on the Company’s financial statements.  duction into other U.S. manufacturing locations. Charges for the  closures totaled $15.7 million, which consists of $6.7 million of acceler- ated depreciation of machinery and equipment which was recorded in  cost of sales, $3.4 million of severance, and $5.6 million of facility exit,  production relocation, and other costs which were recorded as restruc- turing costs. A total of 316 members were terminated and received  severance due to these shutdowns. The closures and consolidation are  substantially complete. The Financial Accounting Standards Board finalized SFAS  No. 150, “Accounting for Certain Financial Instruments with Charac- teristics of both Liabilities and Equity,” effective for financial instru- ments entered into or modified after May 31, 2003, and otherwise is  effective at the beginning of the first interim period beginning after  June 15, 2003. The adoption of SFAS No. 150 did not have an impact  on the Company’s financial statements. The Hazleton, Pennsylvania, facility is an owned facility and  has been reclassified to current assets as it is currently being held as  available for sale. It is included in the “Prepaid expenses and other cur- rent assets” in the January 3, 2004, condensed consolidated balance  sheet at its carrying value of $2.1 million. The Milan, Tennessee, facility  is a leased facility that is no longer being used in the production of  goods. The restructuring expense for 2003 included $1.4 million of  costs that will continue to be incurred under the lease contract reduced  by estimated sublease rentals that could be reasonably obtained. During 2002, the Financial Accounting Standards Board  finalized SFAS No. 146, “Accounting for Costs Associated with Exit or  Disposal Activities” for exit and disposal activities that are initiated  after December 31, 2002. This Statement requires that a liability for a  cost associated with an exit or disposal activity be recognized when the  liability is incurred. The Company applied this statement to its 2003  restructuring activities which resulted in a charge of $8.5 million  during 2003.  During 2002, the Company recorded a pretax charge of  approximately $5.4 million due to the shutdown of an office furniture  facility in Jackson, Tennessee. A total of 125 members were terminated  and received severance due to this shutdown. During the second quar- ter of 2003, a restructuring credit of approximately $0.6 million was  taken back into income relating to this charge. This was due to the fact  that the Company was able to exit a lease with the lessor at more favor- able terms than previously estimated. The Financial Accounting Standards Board also issued  Interpretation No. 45, “Guarantor’s Accounting and Disclosure  Requirements for Guarantees, Including Indirect Guarantees of  Indebtedness to Other.” FIN 45 clarifies the requirements of SFAS  No. 5, “Accounting for Contingencies” relating to the guarantor’s  accounting for and disclosure of the issuance of certain types of guar- antees. The provisions for initial recognition and measurement are  effective on a prospective basis for guarantees that are issued or modi- fied after December 31, 2002. The adoption did not have a material  impact on the Company’s financial statements. During the second quarter of 2001, the Company recorded a  pretax charge of $24.0 million or $0.26 per diluted share for a restruc- turing plan that involved consolidating physical facilities, discontinuing  low-volume product lines, and reductions of workforce. Included in the  charge was the closedown of three of its office furniture facilities located  in Williamsport, Pennsylvania; Tupelo, Mississippi; and Santa Ana,  California. Approximately 500 members were terminated and received  severance due to the closedown of these facilities. During the second  quarter of 2002, a restructuring credit of approximately $2.4 million  was taken back into income relating to this charge. This was mainly due  to the fact that the Company was able to exit a lease with a lessor at  more favorable terms than originally estimated and the Company’s  ability to minimize the number of members terminated as compared to  the original plan. In December 2003, the Financial Accounting Standards  Board issued a revised SFAS No. 132, “Employers’ Disclosures about  Pensions and Other Postretirement Benefits.” In 2003, the Company  adopted the revised disclosure requirements of this pronouncement. Certain prior year amounts have been reclassified to conform to the  2003 presentation. As a result of the Company’s business simplification and cost reduction  strategies, the Company closed two office furniture facilities located in  Milan, Tennessee, and Hazleton, Pennsylvania, and consolidated pro- The following table details the change in restructuring  reserve for the last three years: RECLASSIFICATIONS Restructuring Related Charges 46