6. INCOME TAXES
The provision for income taxes from continuing operations consists of the following (in thousands):
| 2006 | 2005 | 2004 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Current income tax expense: Federal |
$ | 98,267 | $ | 32,264 | $ | 66,625 | |||||
| State | 12,170 | 9,829 | 13,011 | ||||||||
| Foreign | 1,391 | 1,184 | 1,098 | ||||||||
| Total current income tax expense | 111,828 | 43,277 | 80,734 | ||||||||
| Deferred income tax (benefit) expense: Federal |
(18,638 | ) | (8,912 | ) | 1,896 | ||||||
| State | (1,742 | ) | (1,222 | ) | 252 | ||||||
| Total deferred income tax (benefit) expense | (20,380 | ) | (10,134 | ) | 2,148 | ||||||
| $ | 91,448 | $ | 33,143 | $ | 82,882 | ||||||
A reconciliation between the reported provision for income taxes from continuing operations and the amount computed by applying the statutory Federal income tax rate of 35% to income before provision for income taxes is as follows (in thousands):
| 2006 | 2005 | 2004 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Income tax expense at statutory rate | $ | 106,889 | $ | 67,060 | $ | 82,273 | |||||
| FICA tax credit | (22,774 | ) | (30,032 | ) | (17,506 | ) | |||||
| State income taxes, net of Federal benefit | 6,778 | 5,594 | 8,621 | ||||||||
| Goodwill impairment | — | (9,450 | ) | 9,450 | |||||||
| Stock-based compensation | 4,077 | — | — | ||||||||
| Other | (3,522 | ) | (29 | ) | 44 | ||||||
| $ | 91,448 | $ | 33,143 | $ | 82,882 | ||||||
The income tax effects of temporary differences that give rise to significant portions of deferred income tax assets and liabilities as of June 28, 2006 and June 29, 2005 are as follows (in thousands):
| 2006 | 2005 | ||||||
|---|---|---|---|---|---|---|---|
| Deferred income tax assets: Leasing transactions |
$ | 24,386 | $ | 16,980 | |||
| Stock-based compensation | 6,501 | 1,287 | |||||
| Insurance reserves | 6,003 | 7,548 | |||||
| Restructuring charges and other impairments | 2,139 | 8,081 | |||||
| Employee benefit plans | 1,295 | 10,624 | |||||
| Other, net | 27,795 | 31,200 | |||||
| Total deferred income tax assets | 68,119 | 75,720 | |||||
| Deferred income tax liabilities: Depreciation and capitalized interest on property and equipment |
14,967 | 47,360 | |||||
| Prepaid expenses | 20,124 | 19,711 | |||||
| Goodwill and other amortization | 14,497 | 11,887 | |||||
| Captive insurance | 6,823 | 10,946 | |||||
| Other, net | 10,086 | 20,049 | |||||
| Total deferred income tax liabilities | 66,497 | 109,953 | |||||
| Net deferred income tax asset (liability) | $ | 1,622 | $ | (34,233 | ) | ||