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At Dec. 30, 2001, the accumulated postretirement benefit obligation was determined using a discount rate of 7.25% and a health care cost trend rate of 7% for pre-age 65 benefits, decreasing to 5% in the year 2004 and thereafter. For post-age 64 benefits, the health care cost trend rate used was 10%, declining to 5% in the year 2005 and thereafter. 

At Dec. 31, 2000, the accumulated postretirement benefit obligation was determined using a discount rate of 7.625% and a health care cost trend rate of 8% for pre-age 65 benefits, decreasing to 5% in the year 2005 and thereafter. For post-age 64 benefits, the health care cost trend rate used was 12%, decreasing to 5% in the year 2005 and thereafter. 

The company’s policy is to fund the above-mentioned benefits as claims and premiums are paid. 

The effect of a 1% increase in the health care cost trend rate used would result in increases of approximately $27 million in the 2001 postretirement benefit obligation and $3 million in the aggregate service and interest components of the 2001 expense. The effect of a 1% decrease in the health care cost trend rate used would result in decreases of approximately $23 million in the 2001 postretirement benefit obligation and $3 million in the aggregate service and interest components of the 2001 expense. 

## NOTE 7 

## Income taxes 

The provision for income taxes on income from continuing operations consists of the following: 

In thousands of dollars 

<img src='content_image/30850.jpg'>

In thousands of dollars 

<img src='content_image/30851.jpg'>

In thousands of dollars 

<img src='content_image/30852.jpg'>

In addition to the income tax provision presented above for continuing operations, the company also recorded federal and state income taxes payable on discontinued operations of $891 million in 2000 and $28 million in 1999. 

The provision for income taxes on continuing operations exceeds the U.S. federal statutory tax rate as a result of the following differences: 

<img src='content_image/30846.jpg'>

The company has not provided for U.S. taxes on a portion of earnings from its U.K. operations which it considers perma- nently invested in these operations. 

