The provision (benefit) for income taxes from continuing operations consisted of:

(In thousands) Years Ended December 31,	2000		1999		1998
Current:     Federal	$	321,484	$	290,020	$	422,309
Foreign	292,798		419,992		463,331
	614,282		710,012		885,640
Deferred:     Federal	(836,883)		(1,399,709)		82,275
Foreign	22,601		(10,359)		(30,323)
	(814,282)		(1,410,068)		51,952
	$	(200,000)	$	(700,056)	$	937,592

    Net deferred tax assets from continuing operations, inclusive of valuation allowances for certain deferred tax assets from continuing operations, were reflected on the Consolidated Balance Sheets at December 31 as follows:

(In thousands) Years Ended December 31,	2000	1999
Net current deferred tax assets	$ 2,595,662	$ 1,013,410
Net noncurrent deferred tax assets	795,441	1,461,582
Net deferred tax assets	$ 3,391,103	$ 2,474,992

    Deferred income taxes are provided for temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities. Deferred tax assets result principally from the recording of certain accruals and reserves, which currently are not deductible for tax purposes. Deferred tax liabilities result principally from the use of accelerated depreciation for tax purposes and timing differences of equity investments.
    The components of the Company's deferred tax assets and liabilities from continuing operations at December 31 were as follows:

(In thousands) Years Ended December 31,	2000	1999
Deferred tax assets:     Diet drug litigation accruals	$ 2,157,951	$ 1,421,346
Product litigation and environmental liabilities and other operating accruals	708,247	598,431
Postretirement, pension and other employee benefits	592,709	509,438
Net operating loss and other tax credit carryforwards	4,134	105,639
Goodwill impairment	60,000	-
Restructuring and reorganization accruals	214,758	177,464
Inventory reserves	94,393	86,752
Investments and advances	38,894	39,045
Other	81,970	68,124
Total deferred tax assets	3,953,056	3,006,239
Deferred tax liabilities:     Depreciation	(277,512)	(260,261)
Pension and other employee benefits	(54,751)	(49,050)
Equity investments	(102,945)	-
Other	(75,592)	(70,527)
Total deferred tax liabilities	(510,800)	(379,838)
Deferred tax asset valuation allowances	(51,153)	(151,409)
Net deferred tax assets from continuing operations	$ 3,391,103	$ 2,474,992

    Valuation allowances have been established for certain deferred tax assets related to net operating loss carryforwards and portions of other deferred tax assets as the Company determined that it was more likely than not that these benefits will not be realized. During 2000 and 1999, the valuation allowance decreased by $100,256,000 and $97,642,000, respectively. The decrease of the valuation allowance in 2000 related to a reduction in net operating loss carryforwards as a result of the deconsolidation of Immunex (see Note 2). The 1999 valuation allowance decrease was due primarily to the utilization of net operating loss carryforwards.
    The Company has provided for federal income taxes on unremitted earnings from its subsidiaries overseas that are expected to be remitted back to the United States. Federal income taxes for unremitted earnings which are permanently reinvested overseas were not material.
    Reconciliations between the Company's effective tax rate and the U.S. statutory rate from continuing operations, excluding the effect of the termination fee in 2000 (see Note 3), gain on the sale of Immunex common stock in 2000 (see Note 2) and the diet drug litigation charges in 2000 and 1999 (see Note 10), were as follows:

Tax Rate Years Ended December 31,	2000	1999	1998
U.S. statutory rate	35.0%	35.0%	35.0%
Effect of Puerto Rico and Ireland manufacturing operations	(11.0)	(9.3)	(5.7)
Research credits	(2.2)	(1.5)	(1.1)
Goodwill amortization	1.9	1.8	1.7
Goodwill impairment	3.0	-	-
Gain on sale of business	-	-	3.1
Other, net	(0.8)	0.8	(2.7)
Effective tax rate	25.9%	26.8%	30.3%

    Including the effect of the termination fee and the gain on the sale of Immunex common stock in 2000, which had tax provisions of 35.0% and 31.4%, respectively, and the 28.3% tax benefit associated with the 2000 litigation charge, the overall effective tax rate from continuing operations in 2000 was an 18.2% tax benefit. Including the effect of the 1999 litigation charge, which had a 30.8% tax benefit, the overall effective tax rate from continuing operations in 1999 was a 36.7% tax benefit. The difference in the tax benefit related to the 2000 and 1999 litigation charges versus the statutory rate of 35.0% was caused by provisions of $500,000,000 and $200,000,000 in 2000 and 1999, respectively, for additional federal income taxes, net of tax credits, that will be paid as the Company plans to remit certain overseas earnings, taxed at a lower rate than in the United States, to the United States for diet drug litigation settlement payments.
    Total income tax payments, net of tax refunds, for continuing and discontinued operations in 2000, 1999 and 1998 amounted to $1,038,265,000, $717,174,000 and $897,361,000, respectively.