DuPont 2005 Annual Report Download - page 78

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E. I. du Pont de Nemours and Company
Notes to Consolidated Financial Statements (continued)
(Dollars in millions, except per share)
Income (loss) before income taxes and minority interests shown below is based on the location of the corporate unit to which
such earnings are attributable. However, since such earnings are often subject to taxation in more than one country, coupled
with the impact of exchange gains/losses, the income tax provision shown above as United States or international does not
correspond to the earnings shown in the following table:
2005 2004 2003
United States (including exports) $2,790 $ (714) $ (428)
International 768 2,156 571
$3,558 $1,442 $ 143
Under the tax laws of various jurisdictions in which the company operates, deductions or credits that cannot be fully utilized
for tax purposes during the current year may be carried forward or back, subject to statutory limitations, to reduce taxable
income or taxes payable in future or prior years. At December 31, 2005, the tax effect of such carryforwards/backs, net of
valuation allowance approximated $1,086. Of this amount, $878 has no expiration date, $20 expires after 2005 but before the end
of 2010, and $188 expires after 2010.
At December 31, 2005, unremitted earnings of subsidiaries outside the United States totaling $7,031 were deemed to be
permanently reinvested. No deferred tax liability has been recognized with regard to the remittance of such earnings. It is not
practical to estimate the income tax liability that might be incurred if such earnings were remitted to the United States.
9. Cumulative Effect of a Change in Accounting Principle
On January 1, 2003, the company adopted SFAS No. 143, which requires the company to record an asset and related liability
for the costs associated with the retirement of long-lived tangible assets when a legal liability to retire the asset exists.
The company has recorded asset retirement obligations primarily associated with closure, reclamation, and removal costs for
mining operations related to the production of titanium dioxide in Coatings & Color Technologies. The adoption of SFAS No. 143
resulted in a charge of $46 ($29 after-tax) which has been reported as a cumulative effect of a change in accounting principle.
Such amount represents the difference between assets and liabilities recognized prior to the application of this statement and
the net amounts recognized pursuant to this statement.
F-19