incentive tax deduction for U.S. corporations to repatri- ate cash from foreign subsidiaries at a reduced tax rate  (a deduction equal to 85% of cash dividends received in  the year elected that exceeds a base-period amount) and  significantly revises the taxation of U.S. companies doing  business abroad. As of December 31, 2004, accumulated and undistrib- uted earnings of Diodes-China and Diodes-Shanghai  are approximately $44.2 million, including $25.0 mil- lion of restricted earnings (which are not available for  dividends). Through March 31, 2002, the Company had  not recorded deferred U.S. Federal or state tax liabilities  (estimated to be $8.9 million as of March 31, 2002) on  these cumulative earnings since the Company, at that  time, considered this investment to be permanent, and  had no plans or obligation to distribute all or part of that  amount from China to the United States. Beginning in  April 2002, the Company began to record deferred taxes  on a portion of the China earnings in preparation of a  dividend distribution. In the year ended December 31,  2004, the Company received a dividend of approximately  $5.7 million from its Diodes-China subsidiary, for which  the tax effect is included in U.S. Federal and state tax- able income. As of December 31, 2004, the Company has  recorded approximately $2.0 million in deferred taxes on  the cumulative earnings of Diodes-China and Diodes- Shanghai. At December 31, 2004, the Company made a mini- mum estimate for repatriating cash from its subsidiar- ies in China and Hong Kong of $8.0 million under the  AJCA, and recorded an income tax expense of approxi- mately $1.3 million. Under the guidelines of the AJCA,  the Company will develop a required domestic reinvest- ment plan, covering items such as U.S. bank debt repay- ment, U.S. capital expenditures and U.S. research and  development activities, among others, to cover the $8.0  million minimum dividend repatriation. In addition,  the Company will complete a quantitative analysis of the  benefits of the AJCA, the foreign tax credit implications,  and state and local tax consequences of a dividend to  maximize the tax benefits of a 2005 dividend. At December 31, 2003 and 2004, the Company’s  deferred tax assets and liabilities are comprised of the  following items: The Company is evaluating the need to provide addi- tional deferred taxes for the future earnings of Diodes- China, Diodes-Shanghai, and Diodes-Hong Kong  to the extent such earnings may be appropriated for  distribution to the Company’s corporate office in North  America, and as further investment strategies with  respect to foreign earnings are determined. Should the  Company’s North American cash requirements exceed  the cash that is provided through the domestic credit  facilities, cash can be obtained from the Company’s for- eign subsidiaries. However, the distribution of any unap- propriated funds to the U.S. will require the recording of  income tax provisions on the U.S. entity, thus reducing  net income. On October 22, 2004, the President of the United  States signed the American Jobs Creation Act (AJCA)  into law. Originally intended to repeal the extraterrito- rial income (ETI) exclusion, which had triggered tariffs  by the European Union, the AJCA expanded to cover a  wide range of business tax issues. Among other items,  the AJCA establishes a phased repeal of the ETI, a new  At December 31, 2004, the Company had Federal and  state net operating loss (NOL) carryforwards of approxi- mately $17.0 million and $20.2 million, respectively,  available to offset future regular and alternative mini- mum taxable income. The Federal NOL carryforwards  will begin to expire in 2016 and the state NOL carryfor- wards will begin to expire in 2006. 41 2003  2004 Deferred tax assets, current Inventory cost  $ 272,000  $ 364,000 Accrued expenses and accounts receivable  566,000  702,000 Net operating loss carryforwards,  foreign tax credits and other  4,709,000  1,387,000 $ 5,547,000  $ 2,453,000 Deferred tax assets, non-current Plant, equipment and intangible assets  $(2,380,000)  $(2,632,000) Net operating loss carryforwards,  foreign tax credits and other  4,196,000  10,602,000 $ 1,816,000  $ 7,970,000