Note D: Taxes on Earnings
The provision for taxes consists of the following:
| ($000) | 2000 | 1999 | 1998 |  | | Current | | | | | | | | Federal | $ | 74,880 | $ | 85,952 | $ | 75,847 | | State | | 12,537 | | 15,717 | | 14,136 | | | | | 87,417 | | 101,669 | | 89,983 | | Deferred | | | | | | | | Federal | | 8,052 | | (5,081) | | (4,107) | | State | | 1,963 | | (215) | | (304) | | | | | 10,015 | | (5,296) | | (4,411) | | | Total | $ | 97,432 | $ | 96,373 | $ | 85,572 | |
In 2000, 1999 and 1998, the company realized tax benefits of $4.8 million, $9.2 million and $10.9 million, respectively, related to stock options exercised and the vesting of restricted stock that were credited to additional paid-in capital.
The provision for taxes for financial reporting purposes is different from the tax provision computed by applying the statutory federal income tax rate. The differences are reconciled as follows:
| | 2000 | 1999 | 1998 | | | Federal income taxes at the statutory rate | 35% | 35% | 35% | | Increased income taxes resulting from state income | | | | | taxes (net of federal benefit) and other, net | 4% | 4% | 4% | | | | 39% | 39% | 39% | |
The components of the net deferred tax assets at year-end are as follows:
| ($000) | 2000 | 1999 | | | Deferred Tax Assets | | | | Deferred compensation | $ 19,505 | $ 20,362 | | Non-deductible reserves | 2,532 | 6,840 | | Straight-line rent | 5,519 | 4,989 | | Employee benefits | 3,552 | 4,782 | | California franchise taxes | 2,949 | 3,367 | | Reserve for uninsured losses | 243 | 553 | | All other | 1,834 | 1,145 | | | | 36,134 | 42,038 | | Deferred Tax Liabilities |
| | | Depreciation | (22,974) | (18,938) | | Inventory | (4,956) | (4,304) | | Supplies | (2,174) | (2,006) | | Prepaid expenses | (474) | (614) | | All other | (569) | (1,174) | | | | (31,147) | (27,036) | | | Net Deferred Tax Assets | $ 4,987 | $ 15,002 | |
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