content_image/94813.jpg content_image/94814.jpg content_image/94815.jpg content_image/94816.jpg content_image/94817.jpg content_image/94818.jpg
Estimated future benefit payments for the next 10 years are as follows: 

<img src='content_image/94813.jpg'>

The assumed discount rate was 6.0% for 2004 and 2003, respectively. 

The assumed annual rate of increase in the cost of covered health care benefits is 8.0% for 2005. It is assumed to decrease gradually to 4.5% in the year 2011 and remain at that level thereafter. Changing the assumed health care cost trend would have the following effect: 

<img src='content_image/94814.jpg'>

In December of 2003, the Medicare Prescription Drug Improvement and Modernization Act of 2003 (the Act) was enacted in the U.S. The Act introduced a prescription drug benefit under Medicare as well as a federal subsidy of 28% of drug costs between $250 and $5,000, tax-free (the Subsidy), to sponsors of retiree health benefit plans that provide a benefit that meets certain criteria. The Company’s other postretirement plans covering U.S. retirees currently provide certain prescription benefits to eligible participants. The Company’s actuaries have determined that one of the Company’s prescription drug plans for retirees and their dependents retired prior to January 1, 2004 provides a bene- fit that is at least actuarially equivalent to Medicare Part D under the Act. 

In connection with the adoption of FASB Staff Position 106-2, the Act had the effect of reducing the accumulated postretirement benefit obligation by $3.0 million. This resulted in an unrecognized net gain to the plan, which is currently being amortized. The annual reduction in the Company’s other postretirement benefits expense due to the Subsidy is expected to be approximately $0.4 million, which includes the amortization of the unrecognized net gain. The provisions of the Act do not have a material effect on the consolidated finan- cial statements. 

## 11. INCOME TAXES 

The provision for income taxes consists of the following: 

<img src='content_image/94815.jpg'>

The components of income from consolidated continuing operations before income taxes follow: 

<img src='content_image/94816.jpg'>

A reconciliation of the U.S. federal statutory rate with the effective tax rate follows: 

<img src='content_image/94817.jpg'>

Deferred tax assets and liabilities are comprised of the following: 

<img src='content_image/94818.jpg'>

