Components of income tax expense, excluding discontinued operations, were as follows for the years ended December 31, 2000, 1999 and 1998:

Millions of Dollars			2000		1999		1998
Current:
	Federal		$ 18		$(112)		$ 13
	State		3		2		(2)
Total current			21		(110)		11
Deferred:
	Federal		423		516		261
	State		24		13		15
	Benefit of net operating loss		–		–		(350)
Total deferred			447		529		(74)
Total			$ 468		$ 419		$(63)

Deferred tax liabilities (assets) comprised the following at December 31, 2000 and 1999:

Millions of Dollars		2000		1999
Net current deferred tax asset		$ (89)		$ (111)
Excess tax over book depreciation		7,670		7,497
State taxes – net		517		501
Long-term liabilities		(264)		(374)
Retirement benefits		(305)		(315)
Alternative minimum tax credits		(247)		(218)
Net operating loss		(445)		(559)
Other		217		183
Net long-term deferred tax liability		7,143		6,715
Net deferred tax liability		$7,054		$6,604

At December 31, 2000, the Corporation has a deferred tax asset reflecting the benefits of $1,271 million in net operating loss carryforwards, which expires as follows:

Millions of Dollars
Expiring December 31:
	2003		$ 104
	2004		134
	2005		136
	2006		226
	2007-2018		671
Total			$1,271

The Internal Revenue Code limits a corporation's ability to utilize its net operating loss carryforwards. The Corporation does not expect these limits to impact its ability to utilize its carryforwards. The Corporation has analyzed its deferred tax assets and believes a valuation allowance is not necessary.

For the years ending December 31, 2000, 1999 and 1998, a reconciliation between statutory and effective tax rates of continuing operations is as follows:

		2000			1999			1998
Statutory tax rate		35.0	%		35.0	%		(35.0)	%
State taxes – net		1.4			0.8			(1.6)
Goodwill amortization and impairment		–			0.1			28.4
Dividend exclusion		(1.1)			(1.0)			(1.7)
Tax settlements		–			(1.3)			–
Other		0.4			1.3			0.8
Effective tax rate		35.7	%		34.9	%		(9.1)	%

The Internal Revenue Service is currently examining the Corporation's tax returns for 1986 through 1998. All years prior to 1986 are closed. The Corporation believes it has adequately provided for federal and state income taxes.