Note 1 - Formation and Background Note 2 - Summary of Significant Accounting Policies Note 3 - Change in Accounting Principle Note 4 - Acquisitions Note 5 - Fair Value of Financial Instruments Note 6 - Accounts Receivable Note 7 - Inventories Note 8 - Other Current Assets Note 9 - Property, Plant and Equipment Note 10 - Goodwill and Other Intangible Assets Note 11 - Accounts Payable Note 12 - Accrued and Other Current Liabilities Note 13 - Debt Note 14 - Commitments and Contingencies Note 15 - Stockholders' Equity Note 16 - Earnings Per Share Note 17 - Income Taxes Note 18 - Retirement Benefits Note 19 - Stock and Other Plans Note 20 - Restructuring and Other Charges Note 21 - Segment and Geographical Financial Information Note 22 - Related Parties Note 23 - Subsequent Events Note 24 - Accounting Pronouncements Note 25 - Unaudited Quarterly Financial Information NOTE 17 INCOME TAXES The domestic and foreign components of income before income taxes are as follows (in millions): The components of the income tax provision are as follows (in millions): The principal items accounting for the differences in taxes on income computed at the applicable U.S. statutory rate and as recorded are as follows (in millions): The tax effects of temporary items that gave rise to significant portions of the deferred tax accounts are as follows at December 31 (in millions): Deferred tax assets include the benefit of net operating loss carryforwards subject to appropriate valuation allowances. The Company evaluates the tax benefits of operating loss carryforwards on an ongoing basis taking into consideration such factors as the future reversals of existing taxable temporary differences, projected future operating results, the available carryforward period and other circumstances. At December 31, 2002, the Company had accumulated net operating loss carryforwards for tax purposes expiring as follows (in millions): SFAS 109 requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. The valuation allowances at December 31, 2002 and 2001 predominantly represent allowances against foreign and state net operating losses which are not anticipated to result in future tax benefits. Undistributed earnings of the Company’s foreign subsidiaries amounted to approximately $84.1 million at December 31, 2002. Upon distribution of those earnings in the form of dividends or otherwise, the Company would be subject to both U.S. income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to the various foreign countries. The Company intends to periodically make distributions from its foreign subsidiaries to its U.S. parent. These distributions will only be made at such time that they are deemed to be tax efficient. The Company does not anticipate any additional U.S. tax liability above that which has previously been recorded.