Mercedes 2004 Annual Report Download - page 132

In 2002, income tax credits from dividend distribution reflected
the tax benefit from the 2001 dividend distribution of €1.00 per
Ordinary Share paid in 2002.
The Group has various open income tax years unresolved with
the taxing authorities in various jurisdictions. The open years are
either currently under review by certain taxing authorities or not
yet under examination. The Group believes it has adequately
accrued for any future income taxes that may be owed for all
open years. In 2003, the line “foreign tax rate differential” above
included a tax benefit and related interest of €571 million which
resulted in connection with agreements reached with the U.S. tax
authorities on a claim pertaining to additional research and
development credits for tax years 1986 through 1998. In 2003,
the line “tax free income and non-deductible expenses” included
a tax expense and related interest of €318 million pertaining pri-
marily to tax costs associated with developments resulting from
the examination by the German tax authorities of the Group’s
German tax returns for the years 1994 to 1998.
Deferred income tax assets and liabilities are summarized as
follows:
At December 31, 2004, the Group had corporate tax net operat-
ing losses (“NOLs”) amounting to €1,705 million (2003: €2,991
million), trade tax NOLs amounting to €81 million (2003: €40 mil-
lion) and tax credit carryforwards amounting to €1,640 million
(2003: €1,700 million). The corporate tax NOLs mainly relate to
losses of U.S. companies and are partly limited in their use to the
Group. Of the total amount of corporate tax NOLs at December
31, 2004, €297 million expire at various dates from 2005 through
2009, €1,076 million expire in 2024 and €332 million can be
carried forward indefinitely. The tax credit carryforwards relate to
U.S. companies and are partly limited in their use to the Group.
Of the total amount of credit carryforwards at December 31,
2004 €99 million expire from 2005 through 2019, €993 million
expire in 2024 and €548 million can be carried forward indefi-
nitely. The trade tax NOLs are not limited in their use.
The valuation allowances, which relate to deferred tax assets of
foreign companies that management believes will more likely
than not expire without benefit decreased by €56 million from
December 31, 2003 to December 31, 2004. In future periods
management’s estimate of the amount of the deferred tax assets
considered realizable may change, and hence the valuation
allowances may increase or decrease.
Net deferred income tax assets and liabilities in the consolidated
balance sheets are as follows:
DaimlerChrysler recorded deferred tax liabilities for non-German
withholding taxes of €222 million (2003: €239 million) on €4,434
million (2003: €4,782 million) in cumulative undistributed earn-
ings of non-German subsidiaries and additional German tax of
€85 million (2003: €92 million) on the future payout of these for-
eign dividends to Germany because as of today, the earnings are
not intended to be permanently reinvested in those operations.
128
(in millions of €)
2004 2003
699
2,678
651
671
834
2,643
4,315
5,460
3,000
1,371
151
22,473
(429)
22,044
(852)
(3,798)
(6,699)
(4,540)
(370)
(2,096)
(148)
(307)
(887)
(406)
(20,103)
1,941
637
2,387
727
565
658
3,252
4,121
4,573
2,454
1,069
92
20,535
(485)
20,050
(942)
(3,702)
(6,333)
(4,158)
(366)
(2,124)
(166)
(331)
(1,020)
(956)
(20,098)
(48)
At December 31,
Property, plant and equipment
Investments and long-term financial assets
Equipment on operating leases
Inventories
Receivables
Net operating loss and tax credit carryforwards
Pension plans and similar obligations
Other accrued liabilities
Liabilities
Deferred income
Other
Valuation allowances
Deferred tax assets
Intangible assets
Property, plant and equipment
Equipment on operating leases
Receivables
Prepaid expenses
Pension plans and similar obligations
Other accrued liabilities
Taxes on undistributed earnings of
non-German subsidiaries
Liabilities
Other
Deferred tax liabilities
Deferred tax assets (liabilities), net
4,130
(2,189)
1,941
(in millions of €)
1,982
(595)
1,387
thereof
non-current
2,688
(2,736)
(48)
1,861
(2,099)
(238)
Totalthereof
non-current
Total
At December 31, 2004 At December 31, 2003
Deferred tax assets
Deferred tax liabilities
Deferred tax assets (liabilities),
net