7. Income Taxes:

The provision for income taxes consisted of the following (in thousands):

	Fiscal 2003			Fiscal 2002			Fiscal 2001
Income before income taxes	$	89,128		$	76,320		$	61,421
Income tax provision:
Current:
Federal	$	16,064		$	13,385		$	15,595
State		3,344			2,502			2,129
Total current		19,408			15,887			17,724
Deferred		11,884			11,358			4,388
Total	$	31,292		$	27,245		$	22,112

The following is a reconciliation between the U.S. federal statutory rate and the effective tax rate:

		Fiscal 2003		Fiscal 2002		Fiscal 2001
Tax at U.S. federal statutory rate		35.0	%	35.0	%	35.0	%
State and district income taxes net of
federal income tax benefit		3.6		3.7		3.3
FICA tip credit and other credits		(3.7	)	(3.4	)	(2.6	)
Deferred compensation, dividends
received deduction and other		0.2		0.4		0.3
Effective tax rate		35.1	%	35.7	%	36.0	%

The temporary differences which give rise to deferred income tax assets and liabilities are as follows (in thousands):

		December 30, 2003			December 31, 2002
Current deferred tax assets/(liabilities):
	Employee benefits	$	4,055		$	2,885
	Insurance		4,803			2,866
	Inventory		(3,112	)		(2,506	)
	Other, net		(1,021	)		(1,085	)
	Total	$	4,725		$	2,160
Noncurrent deferred tax assets/(liabilities):
	Property and equipment	$	(40,634	)	$	(24,560	)
	Tax credit carryforwards		3,271			2,348
	Other, net		1,642			(73	)
	Total	$	(35,721	)	$	(22,285	)

The Company's tax credit carryforwards, representing primarily FICA tip credits, begin to expire in 2021. We have not recorded a valuation allowance against these credits as we believe it is more likely than not that future taxable income will be sufficient to fully realize the benefit of these credits.