Mercedes 1998 Annual Report Download - page 89

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Deferred tax assets 5,0163,979 5,688 4,400
Deferred tax liabilities 4,165 2,884 2,502 1,609
Deferred tax assets, net 851 1,095 3,186 2,791
December 31, 1998 December 31, 1997
Total thereof Total thereof
non-current non-current
9. EXTRAORDINARY ITEM
In December 1998, DaimlerChrysler extinguished € 257
($ 300) of the outstanding principal amount of its Auburn Hills
Trust Guaranteed Exchangeable Certificates due 2020 (the
“Certificates”) at a cost of € 454 ($ 530). The extinguishment of
the Certificates resulted in an extraordinary after tax loss of
€ 129 ($ 143) (net of income tax benefit of € 78 ($ 87)). At
December 31, 1998, € 214 ($ 250) of the Certificates remained
outstanding. The remaining Certificates are not redeemable
prior to maturity and carry a current interest rate of 12 percent.
In December 1996, DaimlerChrysler extinguished € 437
($ 550), or 50 percent, of the outstanding principal amount of
its Auburn Hills Trust Guaranteed Exchangeable Certificates
due 2020 at a cost of € 683 ($ 859). The extinguishment of the
Certificates resulted in an extraordinary after tax loss of € 147
($191) (net of income tax benefit of € 90 or $ 118).
10. INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT, NET
Information with respect to changes to the Group’s intangible
assets and property, plant and equipment is presented in the
Consolidated Fixed Assets Schedule included herein.
Intangible assets represent principally goodwill from the
formation of Adtranz and the acquisition of American Motors
Corporation. Intangible assets also include intangible pension
assets.
Net deferred income tax assets and liabilities in the
consolidated balance sheets are as follows:
DaimlerChrysler provided foreign withholding taxes of € 297
(1997: € 390) on € 5,948 (1997: € 7,789) in cumulative
undistributed earnings of foreign subsidiaries because these
earnings are not intended to be permanently reinvested in
those operations. The Group did not provide income taxes or
foreign withholding taxes on € 6,016 (1997: € 4,907) in
cumulative earnings of foreign subsidiaries because these
earnings are intended to be indefinitely reinvested in those
operations. It is not practicable to estimate the amount of
unrecognized deferred tax liabilities for these undistributed
foreign earnings.
Including the items charged or credited directly to related
components of shareholders’ equity, the provision (benefit) for
income taxes consists of the following:
19971998
Year ended December 31,
1996
85
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Property, plant and equipment include buildings, technical
equipment and other equipment capitalized under capital lease
agreements of € 394 (1997: € 376). Depreciation expense on
assets under capital lease arrangements was € 38 (1997: € 29;
1996: € 44).
Provision (benefit) for income taxes
before extraordinary items 3,075 (482) 1,547
Income tax benefit of extraordinary items (78) – (90)
Stockholders’ equity for employee stock
option expense in excess of amounts
recognized for financial purposes (212) (39) (32)
Stockholders’ equity for items of other
comprehensive income 296 176 64
3,081 (345) 1,489
NOTES TO THE CONSOLIDATED BALANCE SHEETS