Mercedes 2006 Annual Report Download - page 184

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At December 31, 2006, the Group had corporate tax net operating
losses (“NOLs”) amounting to €1,909 million (2005: €1,528 million),
trade tax NOLs amounting to €26 million (2005: €129 million)
and tax credit carryforwards amounting to €1,036 million (2005:
€868 million). The corporate tax NOLs mainly relate to losses
of foreign companies and are partly limited in their use to the
Group. Of the total amount of corporate tax NOLs at December 31,
2006, €25 million expires at various dates from 2007 through
2010, €310 million in 2011, €373 million in 2012, €276 million in
2013, €110 million expires at various dates from 2014 through
2025, €509 million in 2026 and €306 million can be carried for-
ward indefinitely. The tax credit carryforwards mainly relate
to US companies and are partly limited in their use to the Group.
Of the total amount of tax credit carryforwards at December 31,
2006, €64 million expires from 2007 through 2020, €416 million
expire from 2021 through 2026 and €556 million can be carried
forward indefinitely. The trade tax NOLs are not limited in their use.
The companies of the Off-Highway business unit, which were
shown in 2005 as held for sale, were included at December 31,
2005 in the corporate and trade tax NOLs with €21 million each.
The valuation allowances, which relate to deferred tax assets of
foreign companies that DaimlerChrysler believes will more
likely than not expire without benefit increased by €227 million
from December 31, 2005 to December 31, 2006. In future
periods, DaimlerChrysler’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 €169 million (2005: €188 million) on
€3,371 million (2005: €3,764 million) in cumulative undistributed
earnings of non-German subsidiaries and additional German tax
of €65 million (2005: €73 million) on the future payout of these
foreign dividends to Germany because the earnings are currently
not intended to be permanently reinvested in those operations.
The Group did not provide income taxes or non-German withholding
taxes on €10,479 million (2005: €13,831 million) in cumulative
earnings of non-German subsidiaries because the 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 stockholders’ equity and the benefit from changes
in accounting principles, the expense (benefit) for income taxes
consists of the following:
In 2006, tax benefits of €25 million from the reversal of deferred
tax asset valuation allowances at subsidiaries were recorded as
a reduction of investor level goodwill.
In 2004, tax benefits of €2 million from the reversal of deferred
tax asset valuation allowances at subsidiaries of MMC were
recorded as a reduction of the investor level goodwill relating to
the Group’s investment in MMC.
At December 31, 2005
thereof
Total non-current
2,816
(587)
2,229
6,093
(717)
5,376
7,249
(4,203)
3,046
2,880
(4,099)
(1,219)
Deferred tax assets
Deferred tax liabilities
Deferred tax assets
(liabilities), net
(in millions of €)
At December 31, 2006
thereof
Total non-current
Year ended December 31,
2004
20052006
706
(3)
(1,797)
–
(1,094)
513
(3)
(1,065)
–
(555)
1,177
–
(754)
(9)
414
Expense for income taxes
of continuing operations
Income tax benefit from changes
in accounting principles
Stockholders’ equity for items in
accumulated other comprehensive
loss
Stockholders’ equity for US
employee stock option expense in
excess of amounts recognized for
financial purposes
(in millions of €)