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## Note 3—Income Taxes 

The Company estimates that the fair value of its long-term debt approximates book value. 

The components of income before income taxes and the provision for income taxes are as follows: 

<img src='content_image/31890.jpg'>

At December 31, 2004, the Company had $7,863 of foreign tax loss carryforwards, of which $2,010 expire at various dates through 2009 and the balance can be carried forward indefinitely. A valuation allowance of $3,213 and $2,063 at December 31, 2004 and 2003, respectively, has been recorded which relates to the foreign net operating loss carryforwards and foreign tax credits. The net change in the valuation allowance for deferred tax assets was an increase of $1,150 and $751 in 2004 and 2003, respectively. In 2004 the net change in the valuation allowance was related to foreign net operating loss and credit carryforwards. In 2003 the net change in the valuation allowance was related to foreign net operating loss carryforwards. 

Differences between the U.S. statutory federal tax rate and the Company's effective income tax rate are analyzed below: 

<img src='content_image/31892.jpg'>

