14. PROVISION FOR INCOME TAXES The provision for income taxes on income from continuing operations consisted of: Deferred income taxes arise from temporary differences between the tax bases of assets and liabilities and their recorded amounts in the financial statements. A summary of the components of deferred tax liabilities and assets at December 31 follows: The difference between the Corporation’s effective income tax rate and the United States statutory rate is reconciled below: Income (loss) from continuing operations before income taxes consisted of the following: *ReGLYPH<223>ects high effective tax rates in certain foreign jurisdictions, including special taxes in the United Kingdom and Norway, and losses in other jurisdictions which were beneGLYPH<222>ted at lower rates. (b)  Foreign income includes the CorporationGLYPH<213>s Virgin Islands, shipping and other operations located outside of the United States. (a)  Includes substantially all of the CorporationGLYPH<213>s interest expense and the results of hedging activities. (b)  Includes beneGLYPH<222>t of $48 million relating to prior year refunds of United Kingdom Advance Corporation Taxes and deductions for exploratory drilling. Millions of dollars 2003 2002 2001 United States Federal Current $(180) $3 0 $5 7 Deferred 78 (158) 50 State (13) 5 27 (115) (123) 134 Foreign Current 431 401 355 Deferred (2) (141) 13 429 260 368 Adjustment of deferred tax  liability for foreign  income tax rate change GLYPH<209> 43 GLYPH<209> Total provision for income  taxes on continuing  operations $ 314 (a) $ 180 $502 (b) (a)  Includes beneGLYPH<222>t of $30 million relating to certain prior year foreign exploration expenses. Millions of dollars 2003 2002 Deferred tax liabilities Fixed assets and investments $1,391 $ 943 Foreign petroleum taxes 281 256 Other 226 138 Total deferred tax liabilities 1,898 1,337 Deferred tax assets Accrued liabilities 209 124 Dismantlement liability 169 GLYPH<209> Net operating loss carryforwards 551 543 Tax credit carryforwards 155 61 Other 64 33 Total deferred tax assets 1,148 761 Valuation allowance (93) (95) Net deferred tax assets 1,055 666 Net deferred tax liabilities $ 843 $ 671 2003 2002 2001 United States statutory rate 35.0% (35.0)% 35.0% Effect of foreign operations,  including foreign tax credits 4.6 321.5* 2.8 Loss on repurchase of bonds (.6) (15.4) GLYPH<209> State income taxes, net of  Federal income tax benefit (1.1) 8.1 1.3 Prior year adjustments 2.8 (1.5) (1.5) Other (.4) (.1) .5 Total 40.3% 277.6% 38.1% Millions of dollars 2003 2002 2001 United States  $ (245) (a) $(378) $ 330 Foreign (b) 1,026 313 988 Total income from  continuing operations $ 781 $ (65) $1,318 51