5 Alabama State Industrial Development Authority Financing and Economic Incentives 4 Property, Plant and Equipment At December 31, 2002 and 2001, property, plant and equipment was comprised of the following: In conjunction with an expansion of its Huntsville, Alabama, facility, ADTRAN was approved for participation in  an incentive program offered by the State of Alabama Industrial Development Authority (the “Authority”). Pursuant  to the program, on January 13, 1995, the Authority issued $20,000,000 of its taxable revenue bonds and loaned the  proceeds from the sale of the bonds to ADTRAN. The bonds were originally purchased by AmSouth Bank of Alabama, Birmingham, Alabama, (the “Bank”). First Union National Bank of Tennessee, Nashville, Tennessee, (the “Bondholder”) purchased the original bonds from the Bank and made further advances to the Authority, bringing the total amount  outstanding to $50,000,000. An Amended and Restated Taxable Revenue Bond (“Amended and Restated Bond”), was issued and the original financing agreement was amended. The Amended and Restated Bond bears interest, payable monthly. In 2002, the interest rate was 5%. The Amended and Restated Bond matures on January 1, 2020. ADTRAN is required to make payments to the Authority in amounts necessary to pay the principal of and interest on the Amended and Restated Bond. Included in long-term investments is $50,000,000, which is restricted money market funds, which serves as collateral deposit against the principal of this bond. In conjunction with this program, ADTRAN is eligible  to receive certain economic incentives from the state of Alabama that reduce the amount of payroll withholdings  that ADTRAN is required to remit to the state for those employment positions that qualify under the program. ADTRAN’s economic incentives realized for the years ended December 31, 2002, 2001 and 2000 were  $1,156,000, $1,326,221 and $1,553,398, respectively. 6 Income Taxes A summary of the components of the provision for income taxes for the years ended December 31, 2002, 2001 and  2000 is as follows: At December 31, 2002 ) 2001 ) Land $4,263,104) $4,263,104) Building 70,296,407) 70,151,495) Land improvements 14,442,095) 14,430,404) Office machinery and equipment 51,122,548) 49,890,659) Engineering machinery and equipment 51,144,560) 51,490,165) Total property, plant and equipment 191,268,714 ) 190,225,827 ) Less accumulated depreciation (85,094,881) (70,092,382) Total property, plant and equipment (net) $106,173,833 ) $120,133,445 ) 2002 ) 2001 ) 2000 ) Current Federal $9,864,051) $6,919,148) $58,300,783) State 857,743) 2,016,912) 3,914,293) Total Current 10,721,794 ) 8,936,060 ) 62,215,076 ) Deferred tax provision (benefit) (3,321,183) (2,527,095) 16,411) Total provision for income taxes $7,400,611 ) $6,408,965 ) $62,231,487 ) 29 Financial Results The provision for income taxes differs from the amounts computed by applying the Federal statutory rate due to  the following: 2002 ) 2001 ) 2000 ) Tax provision computed at the federal statutory rate (35% in 2002, 2001 and 2000) $11,261,801) $8,307,916) $64,061,831) State income tax provision, net of federal benefit 1,380,277) 2,314,296) 4,097,688) Federal research credits (2,200,000) (2,386,068) (2,970,013) Tax-exempt income (1,724,295) (897,771) (1,060,586) State tax incentives (1,156,201) (1,326,221) (1,553,398) Other (160,971) 396,813) (344,035) Total provision for income taxes $7,400,611 ) $6,408,965 ) $62,231,487