Mercedes 2008 Annual Report Download - page 64

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The income tax expense amounted to €1.1 billion in 2008
(2007: €4.3 billion); the effective tax rate was 39% in 2008. The
effective tax rate in 2008, which is slightly higher than the
expected tax rate, is partially the result of impairments recognized
on deferred tax assets at foreign subsidiaries. Furthermore,
pretax income includes losses related to our equity interest in
Chrysler, not all of which were tax deductible. In the prior year,
the high effective tax rate (47%) and high income tax expense were
mainly caused by impairments recognized on deferred tax assets
relating to Chrysler; until the deconsolidation of Chrysler, deferred
taxes were recognized at the Chrysler entities and resulted
from temporary differences between commercial accounting and
tax accounting. Although these deferred tax assets are still
assigned to the Daimler Group, the conditions for the realization
of future tax advantages have changed due to the Chrysler
transaction, so the deferred tax assets had to be impaired by €2.2
billion in 2007. Further information on income taxes is provided
in Note 8 of the Notes to the Consolidated Financial Statements.
Net profit from continuing operations amounted to €1.7
billion (2007: €4.9 billion). The decrease is primarily a reflection
of the lower EBIT of €2.7 billion (2007: €8.7 billion) and a lower
income tax expense. Earnings per share from continuing operations
amounted to €1.71 (2007: €4.67).
The result of discontinued operations (after taxes) amounted
to a loss of €0.3 billion in 2008 (2007: loss of €0.9 billion). The
expenses recognized in 2008 are primarily related to the reim-
bursement of costs to our joint-venture Beijing Benz-Daimler-
Chrysler Automotive which incur as a result of the transfer of
a majority interest in the Chrysler activities (see Note 2 of the
Notes to the Consolidated Financial Statements for further infor-
mation). The prior-year loss of €0.9 billion includes the operating
result, net interest result and income taxes of the Chrysler acti-
vities until August 3, 2007, as well as the result of the decon-
solidation.
Net profit amounted to €1.4 billion (2007: €4.0 billion) and
earnings per share amounted to €1.41 (2007: €3.83).
Dividend
The Board of Management and the Supervisory Board recommend
to the shareholders for their approval at the Annual Meeting to
be held on April 8, 2009 that the dividend be reduced from €2.00
per share to €0.60 per share. Related to the number of shares
entitled to a dividend at December 31, 2008, this constitutes a
dividend distribution of €556 million (2007: €1,928 million).
The main reasons for the dividend adjustment are the level of
earnings achieved in 2008 and the difficulty in estimating the
future development of the world economy and the automotive
markets.
in €
Dividend per share
2.50
2.00
1.50
1.00
0.50
0
2006
2005 2007
2008