Weighted Weighted Exercise Options Average Options Average Price Outstanding Remaining Life Exercisable Remaining Life Employee plan $5.25 2,750 1.83 2,750 1.83 $5.90 204,000 7.16 81,600 7.16 $7.063 15,500 0.13 15,500 0.13 $10.51 81,700 8.18 16,340 8.18 $18.47 394,250 8.81 394,250 8.81 698,200 8.03 510,440 8.23 Director plan $6.00 6,000 0.36 6,000 0.36 $7.50 35,000 1.12 35,000 1.12 $10.51 15,000 5.17 15,000 5.17 56,000 2.12 56,000 2.12 2004 2003 2002 U.S. federal statutory tax rate 35.0% 35.0% 34.0% Permanent book vs. tax differences (0.9) — (0.3) Foreign tax rate differentials (0.2) (1.7) 5.0 State taxes, net of federal benefit 5.9 4.9 7.4 Write-off of foreign investment — — (18.9) Reserve adjustments and other (9.5) (3.1) 3.6 Consolidated effective tax  30.3% 35.1% 30.8% (dollars in thousands) 2004 2003 2002 Domestic $ 31,712 $ 26,928 $ 5,998 Foreign 2,132 1,893 2,816 Total $ 33,844 $ 28,821 $ 8,814 (dollars in thousands) 2004 2003 2002 Federal $ 7,126 $ 7,661 $ 1,495 State and local 2,467 2,282 790 Foreign 663 180 427 Total $ 10,256 $ 10,123 $ 2,712 Current $ 2,682 $ 11,011 $ 1,922 Deferred 7,574 (888) 790 Total $ 10,256 $ 10,123 $ 2,712 (dollars in thousands) 2004 2003 Deferred tax assets: Warranty reserves $ 3,959 $ 4,514 Inventory reserves 2,110 2,146 Receivable related reserves 1,189 1,156 Accrued severance and plant closure 1,128 3,578 Accrued retirement benefits 1,110 2,594 Product liability reserves 490 1,173 Unicap 259 406 Payroll related — 1,433 Foreign net operating loss carry-forwards — 211 Other 816 1,406 Gross deferred tax assets 11,061 18,617 Valuation allowance — — Deferred tax assets $ 11,061 $ 18,617 Deferred tax liabilities: Intangible assets $ (10,651) $ (10,651) Depreciation (2,973) (2,922) LIFO reserves (6) (469) Deferred tax liabilities  $ (13,630) $ (14,042) The following summarizes the options outstanding and  exercisable for the employee stock plan by exercise price, at January 1, 2005: Reconciliation of the differences between income taxes computed at the federal statutory rate to the effective rate are  as follows: Earnings before taxes is summarized as follows: At January 1, 2005 and January 3, 2004, the company had recorded the following deferred tax assets and liabilities, which were comprised of the following: The provision (benefit) for income taxes is summarized  as follows: 29 (7) Income Taxes