Mercedes 2006 Annual Report Download - page 68

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In addition, the comparatively low effective tax rate in 2006
reflects the composition of the Group’s pre-tax earnings, which
included largely tax-free income from two financial transactions
to hedge the price risks of EADS shares.
Furthermore, income tax benefits arose in 2006 as a result of
an agreement with the U.S. Internal Revenue Service regarding
the claim for research and development credits and reflecting
adjustments to certain deferred tax balances and income tax
reserves, largely offset by additionally necessary income tax
reserves related to the ongoing cross-border transfer pricing audits.
In total, the income tax benefits associated with these effects
amounted to €0.2 billion.
Opposite, the Group recorded additional valuation allowances on
deferred tax assets of foreign subsidiaries.
In the year 2005, the effective tax rate was additionally reduced
by partially tax-free income from the settlement agreement
associated with our investment in MFTBC, the sale of Daimler-
Chrysler’s shares in MMC and the sale of other securities.
Additional information on income taxes can be found in Note 8
of the Notes to the Consolidated Financial Statements.
DaimlerChrysler’s net income increased by €0.4 billion to €3.2
billion (2005: €2.8 billion). Based on the reported net income,
earnings per share amounted to €3.16 compared with €2.80 in
2005.
The increase in net income reflects in particular the improvement
in operating profit (€0.3 billion) and in net interest income and
other financial income (€0.9 billion). There was an opposing effect
from the increase in the income tax expense (€0.2 billion). An
additional factor is that income from investments in 2005 included
a net gain realized in the context of the sale of DaimlerChrysler’s
remaining shares in MMC (€0.7 billion).
Dividend
The Board of Management and the Supervisory Board will
recommend to the shareholders for their approval at the Annual
Meeting to be held on April 4, 2007 that €1,542 million of
unappropriated profits of DaimlerChrysler AG or €1.50 per share
be distributed to the shareholders. The proposed dividend
takes account not only of the development of operating profit
and cash flow in 2006, but also of our expectations for the
coming years.
A dividend of €1,527 million or €1.50 per share was distributed
for 2005.
2002 2003 2004 2005
1.50
1.00
0.50
0
Dividend per share
(in €)
2006