46 47
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. 
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.
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. 
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.
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.
R E C L A S S I F I C A T I O N S
Certain prior year amounts have been reclassified to conform to the 
2003 presentation.
Restructuring Related Charges
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-
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 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 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