2007 Interactive Registration Document - Renault

7 – OTHER OPERATING INCOME AND EXPENSES
(€ million) 2007 2006 2005
Restructuring and workforce adjustment
costs and provisions
Gains and losses on disposal of businesses
(143) (241) (109)
or operating entities
Gains and losses on disposal of property,
plant and equipment and intangible assets
(63) (59) 119
(except vehicle sales) 86 109 148
Unusual items 4 5 33
TOTAL (116) (186) 191
A – Restructuring and workforce adjustment costs
and provisions
These costs and provisions arise principally from the implementation of
restructuring measures in certain businesses, and adjustment of workforce
levels, particularly in Spain in 2006.
B – Gains and losses on disposal of businesses
or operating entities
Gains and losses on sales of businesses or operating entities include a gain of
€150 million in 2005 on the sale of Renault’s 17.88% investment in Nissan
Diesel Motors Co. Ltd.
C – Gains and losses on disposal of property,
plant and equipment and intangible assets
(except vehicle sales)
Most of the gain on disposal of property, plant and equipment and intangible
assets results from sales of land (in Spain and France) during the years
presented.
8 – FINANCIAL EXPENSE
Other fi nancial income and expenses comprise:
(€ million)
Change in fair value of redeemable shares
2007 2006 2005
(note 24-A) 53 (31) (271)
Other 124 202 39
TOTAL 177 171 (232)
Foreign exchange gains and losses included under “Other” represented a net
loss of €4 million in 2007 (compared to a net gain of €18 million in 2006 and
a loss of €8 million loss in 2005).
In 2006, “Other” included a €135 million profi t on the sale of Scania shares.
✦ Global Reporting Initiative (GRI) Directives
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FINANCIAL STATEMENTS 07
CONSOLIDATED FINANCIAL STATEMENTS
9 – CURRENT AND DEFERRED TAXES
As Renault SA elected to determine French income taxes under the domestic
tax consolidation regime when it was formed, this is the regime applicable to
the Group in which Renault SA is taxed in France.
The Renault group also applies other optional tax consolidation systems in
Germany, Spain, the UK, the Netherlands and Portugal.
A – Current and deferred tax expense
Breakdown of the tax charge
(€ million) 2007 2006 2005
Current income taxes (313) (341) (305)
Deferred tax credits (charges) 58 86 (26)
CURRENT AND DEFERRED TAXES (255) (255) (331)
In 2007, €323 million of current income taxes were generated by foreign entities
(€269 million in 2006 and €253 million in 2005).
The amount of deferred taxes reported in the income statement includes a
€12 million charge resulting from tax rate changes during 2007 (tax rate
changes generated income of €16 million in 2006 and an expense of €7 million
in 2005).
Current taxes paid by the Group during 2007 totalled €243 million (€309 million
in 2006 and €430 million in 2005).
B – Reconciliation between the French corporate income
tax rate and the Group’s effective tax rate
2007 2006 2005
French tax rate
Effect of differences between local rate and
34.4% 34.4 % 34.9 %
the French rate (5.7%) (8.3%) (2.4%)
Tax credits
Deferred tax liabilities on net income
(6.6%) (7.6%) (9.1%)
(distributed or undistributed) of associates
Change in unrecognised deferred tax
1.9% 4.3 % 3.8 %
assets 1.3% (0.6%) (0.6%)
Other impacts (1) (5.9 %) 5.0 % 1.3 %
Effective tax rate before share in net
income of associates 19.4% 27.2 % 27.9 %
(1) Other impacts mainly comprise : permanent differences, income subject to reduced tax rates
and the cost of tax reassessments.
The effective tax rate for 2007 (excluding the impact of Renault’s shares in net
income of associates) was 19% (27% in 2006 and 28% in 2005), largely due
to the reimbursement of Italian tax credits and recognition of certain deferred
tax assets on loss carryforwards in Brazil and Argentina, due to the continuing
improvement in profi tability prospects in those countries.
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Registration Document Renault 2007 203