NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (thousands of dollars unless otherwise indicated) The provisions for income taxes included estimated taxes payable on that portion of retained earnings of foreign subsidiaries expected to be received by the Com- pany. The effect of the repatriation provisions of the American Jobs Creation Act of 2004 and the provisions of APB No. 23, “Accounting for Income Taxes – Special Areas,” was $2,693 in 2004. A provision was not made with respect to $13,399 of retained earnings at Decem- ber 31, 2004 that have been invested by foreign sub- sidiaries. It was not practicable to estimate the amount of unrecognized deferred tax liability for undistributed foreign earnings. Significant components of income before income taxes, minority interest and cumulative effect of change in accounting principle as used for income tax purposes, were as follows: A portion of the transitional impairment charge recorded in the first quarter of 2002 (see Note 2) related to goodwill that was not deductible for tax purposes. This is not reflected in the statutory federal income tax rate reconciliation above because the transitional impairment charge was recorded as a cumulative effect of change in accounting principle. The remaining por- tion of the impairment charge created federal, state, for- eign and local deferred tax benefits in the amount of $64,476 due to the temporary differences between the carrying amounts for financial statement purposes and amounts used for tax purposes. The increase in the ESOP dividends deduction was the result of increases to the annual dividend payable for 2004 versus 2003 and changes in plan design which resulted in an increase in deductible dividends. A reconciliation of the statutory federal income tax rate to the effective tax rate follows: 2004 2003 2002 Statutory federal income tax rate .................. 35.0% 35.0% 35.0% Effect of: State and local income taxes .............. 3.0 2.5 2.5 Investment vehicles ........ (1.6) (0.6) 0.8 ESOP dividends .............. (4.2) (1.0) (1.0) Other - net...................... (0.2) 0.6 0.2 Effective tax rate.................... 32.0% 36.5% 37.5% 2004 2003 2002 Domestic ................ $ 520,454 $ 492,592 $ 458,535 Foreign .................... 59,741  30,334  38,629 $ 580,195  $ 522,926  $ 497,164 2004 2003 2002 Income before cumulative effect of change in accounting principle.............. $ 393,254  $ 332,058  $ 310,701  Cumulative effect of change in accounting principle -  net of income taxes of $64,476................................................................ (183,136) Net income .................................................................................................. $ 393,254  $ 332,058  $ 127,565  Basic Average common shares outstanding ...................................................... 140,801,836  144,846,933  150,437,900  Per common share: Income before cumulative effect of change in accounting principle ...... $ 2.79  $ 2.29  $ 2.07  Cumulative effect of change in accounting principle ............................ (1.22) Net income........................................................................................... $ 2.79  $ 2.29  $ .85  Diluted Average common shares outstanding ...................................................... 140,801,836  144,846,933  150,437,900  Non-vested restricted stock grants ........................................................... 870,313  614,458  318,433  Stock options and other contingently issuable shares .............................. 3,063,440  1,543,885  1,678,977  Average common shares assuming dilution .............................................. 144,735,589  147,005,276  152,435,310  Per common share: Income before cumulative effect of change in accounting principle ...... $ 2.72  $ 2.26  $ 2.04  Cumulative effect of change in accounting principle ............................ (1.20) Net income........................................................................................... $ 2.72  $ 2.26  $ .84  NOTE 15—NET INCOME PER COMMON SHARE 66