The current and deferred components of the provision for income taxes were as follows: The company’s net deferred tax assets at December 31 were as follows: Deferred tax assets for 2002 and 2001 are primarily related to reserves not yet deducted for tax purposes of $2.8 billion in both years; deferred compensation of $337 million and $344 million, respectively; deferred cardmember fees of $287 million and $278 million, respectively; and deferred taxes related to net unrealized derivatives losses of $289 million and $147 million, respectively. Deferred tax liabilities for 2002 and 2001 are mainly related to deferred acquisition costs of $1,053 million and $1,025 million, respectively; depreciation and amortization of $586 million and $413 million, respectively; deferred taxes related to net unrealized securities gains of $589 million and $172 million, respectively; and deferred taxes related to asset securitizations of $233 million and $181 million, respectively. The principal reasons that the aggregate income tax provision is different from that computed by using the U.S. statutory rate of 35% are as follows: Net income taxes paid by the company during 2002, 2001 and 2000 were $872 million, $545 million and $858 million, respectively, and include estimated tax payments and cash settlements relating to prior tax years. The items comprising comprehensive income in the Consolidated Statements of Shareholders’ Equity are presented net of income tax provision (benefit). The changes in net unrealized securities gains are presented net of tax provision of $415 million, $258 million and $81 million for 2002, 2001 and 2000, respectively. The changes in net unrealized losses on derivatives are presented net of tax (benefit) of ($130 million) and ($159 million) for 2002 and 2001, respectively. Foreign currency translation adjustments are presented net of tax (benefit) provision of ($14 million), ($21 million) and $18 million for 2002, 2001 and 2000, respectively. Minimum pension liability adjustment is presented net of tax provision (benefit) of $29 million and ($55 million) for 2002 and 2001, respectively. I 79 AXP I NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Millions) 2002 2001 2000 Combined tax at U.S. statutory rate $ 1,304 $ 559 $ 1,368 Changes in taxes resulting from: Tax-preferred investments (237) (247) (211) Tax-exempt element of dividend income (34) (27) (26) Foreign income taxed at rates other than U.S. statutory rate (34) (27) (38) State and local income taxes 52 38 50 All other 5 (11) (45) Income tax provision $ 1,056 $ 285 $ 1,098 (Millions) 2002 2001 Deferred tax assets $ 4,486 $ 4,269 Deferred tax liabilities 2,952 2,318 Net deferred tax assets $ 1,534 $ 1,951 (Millions) 2002 2001 2000 Current $ 903 $ 765 $ 1,209 Deferred 153 (480) (111) Total $ 1,056 $ 285 $ 1,098