The principal components of deferred taxes are as follows (U.S. dollars in thousands): The components of deferred taxes, net on a jurisdiction basis are as follows (U.S. dollars in thousands): The Company has considered projected future taxable income and ongoing tax planning strategies in determining that  no valuation allowance is required. The net operating loss carryforwards begin expiring in 2008, while the foreign tax credits begin expiring in 2010.  Utilization of these loss and credit carryforwards is subject to annual limitations; however, management believes that it is  more likely than not that the Company will generate sufficient taxable income in the appropriate carry forward periods to  realize the benefit of the net deferred tax assets. The Company is subject to regular audits by federal, state and foreign tax authorities. These audits may result in pro- posed assessments that may result in additional tax liabilities. The Company accounts for any income tax contingencies in  accordance with SFAS No. 5, “Accounting for Contingencies.” 67 December  31 , 2003 2004 Deferred tax assets: Inventory differences $  4 , 362 $  2,373 Foreign tax differential 10 , 810 13 , 417 Accrued expenses not deductible until paid 25,780 26,059 Withholding tax 3 , 773 1 , 088 Minimum tax credit 18 , 380 18 , 228 Net operating losses 14,158 5,209 Controlled foreign corporation net losses 6 , 465 7 , 664 Capitalized research and development 8 , 803 10 , 668 Prepaid selling expenses 10 , 992 — Other 3,136 2,771 Gross deferred tax assets 106 , 659 87,477 Deferred tax liabilities: Exchange gains and losses 7 , 762 7 , 210 Pharmanex intangibles step-up 16 , 256 15 , 961 Amortization of intangibles 4 , 410 4 , 567 Prepaid expenses — 5,153 Other 4 , 115 5 , 426 Gross deferred tax liabilities 32 , 543 38,317 Deferred taxes, net $  74 , 116 $ 49,160 December  31 , 2003 2004 Net current deferred tax assets $  41,326 $  22 , 215 Net noncurrent deferred tax assets 32,936 34,856 Total net deferred tax assets 74 , 262 57 , 071 Net current deferred tax liabilities — 8 Net noncurrent deferred tax liabilities 146 7 , 903 Total net deferred tax liabilities 146 7 , 911 Deferred taxes, net $  74 , 116 $  49 , 160