RELATED-PARTY. TRANSACTIONS 2003 2002 Inventory ; ; ; ; ; ; ; ; ; $ 32,271 $ 42,883 The Parent and certain of its subsidiaries supply the Company with certain inventory and machinery and equipment. Purchases of such items for the years ended December 31, 2003 and 2002 were as follows: Machinery and equipment—including construction-in-progress and spare parts 5,300 8,204 The Company also purchases certain inventory items from equity affiliates of the Parent. The purchases of such items during 2003 and 2002 were $9,251 and $5,204, respectively. The amounts due to these equity affiliates at December 31, 2003 and 2002 were $704 and $276, respectively, and are included in accounts payable-trade in the accompanying consolidated balance sheets. Pursuant to a licensing agreement, the Company pays royalties to the Parent for technical know-how associated with the manufacturing process developed by the Parent. The technical know-how includes trademarks, patents and technical services. Royalty expense amounted to $20,180 and $19,991 in 2003 and 2002, respectively, and has been included in selling, general and administrative expenses in the accompanying consolidated statements of operations. The Company has several debt instruments with a subsidiary of the Parent. Refer to Notes 8 and 9 for a discussion of the terms of these debt arrangements. Potentie¨le kopers van Obligaties wordt gewezen op de hierna opgenomen geconsolideerde (niet- geauditeerde) halfjaarresultaten 2004 (eerste helft van 2004) van de Emittent. During the first half of 2004 sales and profits increased significantly compared with the same period in 2003. The generally improved economic climate in North America coupled with a weaker dollar provided for higher sales volumes and improved margins. Selling prices increased substantially as raw material cost of wire rod increased. In part offsetting the increased profits was a US$6 million increase in research and development expenditures during this period.
