9. INCOME TAXES The income tax provision in the Consolidated Statements of Income is as follows  (in thousands) Year Ended December 31, 2003 2002 2001 Current: Federal $10,009 $7,137 $5,706 State 1,476 998 574 Deferred: Federal 516 1,475 111 State (133) 273 (27) Total income tax provision $11,868 $9,883 $6,364 Year Ended December 31, 2003 2002 2001 Income tax at Federal statutory rate $10,935 $8,976 $5,668 State income taxes, net of Federal income tax benefit 873 826 356 Non-deductible expenses 90 79 465 Other (30) 2 (125) Provision for income taxes $11,868 $9,883 $6,364 December 31, 2003 2002 Deferred tax assets: Accounts receivable $ 465 $ 452 Inventories 885 683 Goodwill and other assets 4,055 4,454 Accrued insurance 764 349 Employee benefits 836 793 Other accruals 711 867 Total deferred tax assets 7,716 7,598 Deferred tax liabilities: Fixed assets 3,920 3,517 Net deferred tax asset $3,796 $4,081 December 31, 2003 2002 Prepaid expenses and other current assets $3,547 $3,214 Other assets 249 867 $3,796 $4,081 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. 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) : DREW INDUSTRIES INCORPORATED 2003 ANNUAL REPORT 31 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) : 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) :