Coca Cola 2004 Annual Report Download - page 109

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Coca-Cola Company and Subsidiaries
NOTE 15: INCOME TAXES (Continued)
The tax effects of temporary differences and carryforwards that give rise to deferred tax assets and liabilities
consist of the following (in millions):
December 31, 2004 2003
Deferred tax assets:
Property, plant and equipment $71$87
Trademarks and other intangible assets 65 68
Equity method investments (including translation adjustment) 530 485
Other liabilities 149 242
Benefit plans 594 669
Net operating/capital loss carryforwards 856 711
Other 257 195
Gross deferred tax assets 2,522 2,457
Valuation allowance (854) (630)
Total deferred tax assets1$ 1,668 $ 1,827
Deferred tax liabilities:
Property, plant and equipment $ (684) $ (737)
Trademarks and other intangible assets (247) (247)
Equity method investments (including translation adjustment) (612) (468)
Other liabilities (71) (55)
Other (180) (211)
Total deferred tax liabilities $ (1,794) $ (1,718)
Net deferred tax assets (liabilities) $ (126) $ 109
1Deferred tax assets of $324 million and $446 million were included in the consolidated balance sheet
line item other assets at December 31, 2004 and 2003, respectively.
On December 31, 2004 and 2003, we had approximately $194 million and $160 million, respectively, of net
deferred tax assets located in countries outside the United States.
On December 31, 2004, we had $3,258 million of loss carryforwards available to reduce future taxable
income. Loss carryforwards of $861 million must be utilized within the next five years; $550 million must be
utilized within the next 10 years and the remainder can be utilized over a period greater than 10 years.
NOTE 16: SIGNIFICANT OPERATING AND NONOPERATING ITEMS
Operating income in 2004 reflected the impact of $480 million of expenses primarily related to impairment
charges for franchise rights and certain manufacturing investments. These impairment charges were recorded in
the consolidated statement of income line item other operating charges.
In the second quarter of 2004, we recorded impairment charges totaling approximately $88 million. These
impairments primarily related to the write-downs of certain manufacturing investments and an intangible asset.
As a result of operating losses, management prepared analyses of cash flows expected to result from the use of
the assets and their eventual disposition. Because the sum of the undiscounted cash flows was less than the
carrying value of such assets, we recorded an impairment charge to reduce the carrying value of the assets to
fair value.
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