sain t-gobain annu al report 2008 annual report

A €37.6 million decrease in provision reversals to offset
losses on sales of Compagnie de Saint Gobain shares recorded
in exceptional expense. These losses represented just
€2.3 million in 2008 compared with €39.9 million in 2007,
reflecting the sharp drop in the number of stock options
exercised during the year (115,490 options versus 2,460,265 in
prior year).
A €17.9 million write-down of Compagnie de Saint-Gobain
shares held for allocation on exercise of stock options.
Write-downs were recorded in all cases where the weighted
average share price for the month of December was less than
the option exercise price.
These unfavorable changes were partly offset by an
€8.9 million decrease in amortization of debt issuance costs.
The amount billed, representing taxable income, came
to €2.0 million and was included in exceptional items.
A net loss of €6.4 million on sales of the Company’s shares
under the liquidity contract managed by Exane.
Net write-backs of provisions for taxes in the amount
of €6.4 million.
€5.1 million in expenses to prepare the sale of investments
in subsidiaries and affiliates.
€0.9 million in expenses corresponding to the Company’s
total funding commitment, as co-founder, to the Saint-Gobain
Initiatives international corporate foundation (including
€0.1 million for 2008 and €0.8 million for the years 2009
to 2012).
NOTE 3
Exceptional income and expense
The Company reported net exceptional expense
of €5.2 million in 2008, primarily comprising:
A €1.7 million gain on the transfer of the entire capital
of Saint-Gobain SFM to Vertec, as part of an internal
reorganization.
A €2.3 million loss on Compagnie de Saint-Gobain shares
sold upon exercise of stock options, which was offset by a
write-back from the provision for impairment of the shares
recognized in financial income. However, for the first time in
2008, in line with the new tax rules (published in the Bulletin
Officiel des Impôts issue no. 4N-1-08 dated April 9, 2008), the
loss was billed to the companies that employed the option
holders at the grant date, in order to preserve its deductibility.
NOTE 4
Income taxes
The Company recorded a net income tax benefit of €160.5
million in 2008, corresponding primarily to:
French group relief of €141.7 million for 2008, net of income
tax expense of €60.5 million due by Compagnie de Saint-
Gobain on a stand-alone basis.
Net income tax expense of €8 million in respect of tax
reassessments and adjustments related to prior years.
A tax benefit of €27.0 million for the Company’s German
branch under the German group relief regime (Organschaft).
NOTES THE PARENT COMPANY FINANCIAL STATMENTS
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Saint-Gobain – Financial Report 2008