Common use of Reporting Currency Clause in Contracts

Reporting Currency. Effective January 1, 2002, the Company changed its reporting currency from the U.S. dollar to the Euro. The reason for this change is because a significant majority of the Company's business transactions are originally denominated in Euros. The Company's functional currency and reporting currency are now the same. Prior years' financial statements had been reported in U.S. dollars, but have been restated into Euros using the guidance of Statement of Financial Accounting Standards No. 52, "Foreign Currency Translation" ("SFAS 52"). Therefore, the financial statements for prior years depict the same trends that the previous financial statements presented in U.S. dollars show. The Euro was initially implemented by the European Community on January 1, 1999. By adopting the Euro as the Company's reporting currency, most of the cumulative foreign currency translation losses were eliminated from the Company's balance sheets and most of the foreign currency translation losses were eliminated from the Company's statements of comprehensive income. Prior to the restatement, at December 31, 2001, there was a cumulative foreign currency translation loss of $64,016 (in thousands of U.S. dollars) included as part of shareholders' equity in the balance sheet. In conjunction with the restatement, the majority of this amount was eliminated. During the six months ended June 30, 2001, there was a foreign currency translation loss of $13,004 (in thousands of U.S. dollars) included as part of comprehensive income (loss). In conjunction with the restatement, the majority of this amount was eliminated. For periods prior to 1999, when the Company's functional currency was the German deutschmark, the financial statements were restated using a fixed rate of 0.5113 Euros to each deutschmark. As a result of using the fixed exchange rate, the Company's consolidated financial statements for those periods may not be comparable to the financial statements of companies from other countries reporting in the Euro.