The Corporation has not recorded deferred income taxes applicable to undistributed earnings of foreign subsidiaries that are expected to be indefinitely reinvested in foreign operations. Undistributed earnings amounted to approxi- mately $2.6 billion at December 31, 2003 and include amounts which, if remitted, would result in U.S. income taxes at less than the statutory rate, because of available foreign tax credits. If the earnings of such foreign sub- sidiaries were not indefinitely reinvested, a deferred tax liabil- ity of approximately $100 million would have been required. The table above excludes the effect of out-of-the-money options on 4,170,000 shares, 633,000 shares and 139,000 shares in 2003, 2002 and 2001, respectively. In 2002, the table also excludes the antidilutive effect of 461,000 non- vested common shares, 424,000 stock options and 205,000 shares of convertible preferred stock. Earnings per share are as follows: For income tax reporting at December 31, 2003, the Corpo- ration has alternative minimum tax credit carryforwards of approximately $120 million, which can be carried forward indefinitely. The Corporation also has approximately $35 million of general business credits. At December 31, 2003, the Corporation has a net operating loss carryforward in the United States of approximately $450 million. At December 31, 2003, a net operating loss carryforward of approximately $500 million is also available to offset the Corporation’s share of HOVENSA joint venture income and to reduce taxes on interest from the PDVSA note. In addition, a foreign exploration and production subsidiary has a net operating loss carryforward of approximately $550 million. Income taxes paid (net of refunds) in 2003, 2002 and 2001 amounted to $361 million, $410 million and $605 million, respectively. The weighted average number of common shares used in the basic and diluted earnings per share computations for each year are summarized below: In 2003, the Corporation issued 13,500,000 shares of 7% cumulative mandatory convertible preferred stock. Divi- dends are payable on March 1, June 1, September 1 and December 1 of each year. The cumulative mandatory con- vertible preferred shares have a liquidation preference of $675 million ($50 per share). Each cumulative mandatory convertible preferred share will automatically convert on December 1, 2006 into .8305 to 1.0299 shares of common stock, depending on the average closing price of the Cor- poration’s common stock over a 20-day period before con- version. The Corporation has reserved 13,903,650 shares of common stock for the conversion of these preferred shares. Holders of the cumulative mandatory convertible preferred stock have the right to convert their shares at any time prior to December 1, 2006 at the rate of .8305 share of common stock for each preferred share converted. The cumulative mandatory convertible preferred shares do not have voting rights, except in certain limited circumstances. 15. STOCKHOLDERSGLYPH<213> EQUITY AND NET INCOME PER SHARE 2003 2002 2001 Basic Continuing operations $5.21 $(2.78) $ 9.26 Discontinued operations 1.91 .30 1.12 Cumulative effect of change  in accounting .07 GLYPH<209> GLYPH<209> Net income (loss) $7.19 $(2.48) $10.38 Diluted Continuing operations $5.17 $(2.78) $ 9.15 Discontinued operations 1.87 .30 1.10 Cumulative effect of change  in accounting .07 GLYPH<209> GLYPH<209> Net income (loss) $7.11 $(2.48) $10.25 Thousands of shares 2003 2002 2001 Common shares—basic 88,618 88,187 88,031 Effect of dilutive securities Convertible preferred stock 1,425 GLYPH<209> 205 Nonvested common stock 290 GLYPH<209> 425 Stock options 9 GLYPH<209> 468 Common shares—diluted 90,342 88,187 89,129 52