Notes to Consolidated Financial Statements 44 Following are the gross components of deferred tax assets and liabili- ties as of December 31, 2004 and 2003: in nature. The excess amount will become taxable on a repatriation  of assets or sale or liquidation of the investment. It is not practicable  to determine the unrecognized deferred tax liability on the excess  amount because the actual tax liability on the excess amount, if any,  is dependent on circumstances existing when remittance occurs.  Detailed balance sheet data are as follows: The foreign tax credits will expire beginning in 2012 through 2014.  The R&D tax credits will expire beginning in 2022 through 2024. The  company also has deferred tax assets for minimum tax credits of  $3.2 million, which can be carried forward indefinitely. No deferred income taxes have been provided on the excess of the  amount for financial reporting over the tax basis of investments  in foreign subsidiaries or foreign corporate joint ventures totaling  $353.9 million in 2004, as these amounts are essentially permanent  The other non-current assets are primarily comprised of amounts  from the U.S., France and Korea. The other long-term liabilities are  primarily comprised of amounts from Germany, Italy, U.K., Japan,  and Canada. The non-current deferred tax asset in 2003 of $48.5  million was previously presented as a reduction of the non-current  deferred tax liability; this amount has been reclassified to other  non-current assets on the 2003 Consolidated Balance Sheets and  the reclassification is not material to the Company’s Consolidated  Financial Statements. The deferred tax assets (current and non-current) and liabilities recog- nized in the Company’s Consolidated Balance Sheets are as follows: The Company has a 50% interest in NSK-Warner, a joint venture based  in Japan that manufactures automatic transmission components. The  Company’s share of the earnings or losses reported by NSK-Warner  is accounted for using the equity method of accounting. NSK-Warner  has a fiscal year-end of March 31. The Company’s equity in the earn- ings of NSK-Warner consists of the 12 months ended November 30  so as to reflect earnings on as current a basis as is reasonably  (a) The $11.5 million impact of derivatives on debt from the interest rate swaps as of December 31, 2003 has been reclassified to long-term debt with a corresponding non-current  asset. The reclassification is not material to the Company’s Consolidated Financial Statements. Following is a summary of notes payable and long-term debt. The weighted average interest rate on all borrowings for 2004 and 2003 was 5.1%  and 4.9%, respectively. Purchases from NSK-Warner for the years ended December 31,  2004, 2003 and 2002 were $19.9 million, $16.9 million and $15.1  million, respectively. The equity of NSK-Warner as of November 30, 2004, was $278.3  million, there was no debt and their cash and securities were  $92.4 million.  feasible. NSK-Warner is the joint venture partner with a 40% interest  in the Drivetrain Group’s Korean subsidiary, BorgWarner Transmission  Systems Korea Inc. Dividends received from NSK-Warner were $23.9  million in 2004, $9.7 million in 2003, and $8.4 million in 2002. Following are summarized financial data for NSK-Warner, translated  using the ending or periodic rates as of and for the years ended  November 30, 2004, 2003 and 2002 (unaudited): The Company’s investment in Aktiengesellschaft Kühnle, Kopp & Kausch (AGK), an unconsolidated subsidiary of the Company,  has been recorded in “Investment in business held for sale” in the  Consolidated Balance Sheets. Effective February 17, 2005, the  Company signed a Share Transfer Agreement (STA) for the sale of  its 95.42% interest in AGK with Turbo Group GmbH. The STA will  become effective no later than seven (7 banking days after receipt  of approval from both the German Fed e ral Cartel Office and the  Austrian merger control authority. The tr ansaction is anticipated to  close before March 31, 2005. The proc e eds, net of closing costs,  are expected to be approximately  € 39 . 8 million. The investment is  carried on a cost basis, with dividends  r eceived from AGK applied  against the carrying value of the asset. Following is summarized balance sheet dat a as of September 30, 2004  and 2003 for AGK (unaudited), which is th e l atest available. The assets  and liabilities reported in Euros were tran slated using the respective  year-end exchange rate: 45 BorgWarner Inc.  and Consolidated Subsidiaries Investment in business held for sale NOTE 6 NOTES PAYABLE AND LONG-TERM DEBT NSK-Warner NOTE 5 BALANCE SHEET INFORMATION millions of dollars 2004 2003 Current deferred tax assets: Foreign tax credits  $ 9.0 $ 7.1 Research and development credits  6.0 7.6 Employee related 5.1 5.8 Warranties — 5.7 Other 2.5 6.6  Total current deferred tax assets  $ 22.6 $ 32.8 Non-current deferred tax assets: Pension and other post retirement benefits  $ 92.1 $ 90.4 Other comprehensive income  36.3 33.1 Employee related 9.0 8.7 Goodwill 3.5 13.9 Litigation and environmental  9.2 7.9 Warranties 7.7 — Foreign tax credits  2.6 — Research and development credits  4.9 — Other 5.3  1.0  Non-current deferred tax assets   $ 170.6 $ 155.0 Non-current deferred tax liabilities: Fixed assets  $(163.4) $(163.8) Lease obligation – production equipment   (9.0) — Other (7.0) — Non-current deferred tax liabilities  $(179.4) $(163.8) Net deferred tax asset (current and non-current) $ 13.8 $ 24.0 millions of dollars 2004  2003 Deferred income taxes – current assets  $ 22.6 $ 32.8 Other non-current assets  51.8 48.5 Other long-term liabilities  (60.6) (57.3) Net deferred tax asset  (current and non-current)  $ 13.8 $ 24.0 millions of dollars December 31, 2004 2003 Receivables: Customers  $453.9 $374.6 Other 56.1 46.0 Gross receivables 510.0 420.6 Less allowance for losses  10.9  5.7 Net receivables $499.1 $414.9 Inventories:  Raw material $104.6 $95.5 Work in progress  69.8 65.1 Finished goods 49.0 40.7 Total inventories $223.4 $201.3 Investments and advances: NSK-Warner  $188.2 $172.1 Other 5.5 5.2 Total investments and advances  $193.7 $177.3 Other non-current assets: Deferred pension assets   $113.1 $90.8 Product liability insurance receivable  27.3 27.9 Deferred income taxes, net  51.8 48.5 Other 28.8 29.9 Total other non-current assets $221.0 $197.1 Accounts payable and accrued expenses: Trade payables $390.6 $300.0 Payroll and related  74.5 63.7 Insurance 25.2 24.0 Warranties 16.1 17.6 Product liability accrual  13.5 13.7 Other 88.1 55.0 Total accounts payable and  accrued expenses $608.0 $474.0 Other long-term liabilities: Environmental accruals $ 25.7 $ 19.6 Warranties 10.3 11.1 Deferred income taxes, net  60.6 57.3 Product liability accrual  27.3 27.9 Other 119.0 114.5 Total other long-term liabilities  $242.9 $230.4 $_{millions of dollars}$  2004 2003 December 31,  Current Long-Term  Current  Long-Term Bank borrowings and other  $ 9.2 $ 6.1  $ 2.9 $ 42.5 Term loans due through 2011 (at an average rate of 3.3% in 2004 and 3.3% in 2003)  7.3 26.9 7.1 31.4 7% Senior Notes due 2006, net of unamortized discount ($139 million converted to  floating rate of 4.5% by interest rate swap at December 31, 2004) — 139.0 — 139.4 6.5% Senior Notes due 2009, net of unamortized discount ($100 million converted to  floating rate of 5.2% by interest rate swap at December 31, 2004) — 136.1 — 164.7 8% Senior Notes due 2019, net of unamortized discount ($75 million converted to  floating rate of 5.4% by interest rate swap at December 31, 2004) — 133.9 — 133.9 7.125% Senior Notes due 2029, net of unamortized discount   — 119.1  — 122.1 Carrying amount of notes payable and long-term debt  16. 5  561.1 10.0 634.0 Impact of derivatives on debt (a)  — 6.9  —  11.5 Total notes payable and long-term debt  $16.5 $568.0  $10.0 $645.5 millions of dollars 2004  2003 Current assets  $132.3 $79.9 Non-current assets  65.7  57.9 Current liabilities  79.7 43.7 Non-current liabilities  54.0 41.6 millions of dollars  2004   2003  2002 Balance sheets: Current assets $242.3 $210.7 $176.0 Non-current assets 180.7 173.3 151.0 Current liabilities 126.2 108.8 85.2 Non-current liabilities 18.5 14.8 10.7 Statements of operations: Net sales $443.5 $356.5 $303.8 Gross profit 97.3 71.4 69.8 Net income 52.6 34.5 34.0