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## 9. INCOME TAXES 

The income tax provision in the Consolidated Statements of Income is as follows (in thousands) : 

<img src='content_image/109338.jpg'>

The provision for income taxes differs from the amount computed by applying the Federal statutory rate to income before income taxes for the following reasons (in thousands) : 

<img src='content_image/109339.jpg'>

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2003 and 2002 are as follows (in thousands) : 

<img src='content_image/109340.jpg'>

The Company concluded that it is more likely than not that the deferred tax assets at December 31, 2003 will be realized in the ordinary course of operations based on scheduling of deferred tax liabilities and income from operating activities. 

Tax benefits on stock option exercises of $864,000, $468,000 and $13,000 were credited directly to stockholders’ equity for 2003, 2002 and 2001, respectively. 

Net deferred tax assets are classified in the Consolidated Balance Sheets as follows (in thousands) : 

<img src='content_image/109341.jpg'>

Also, included in prepaid expenses and other current assets are Federal income tax refunds receivable of $852,000 and $1,742,000 at December 31, 2003 and 2002, respectively. 

