185000000 IT Holding Finance SA

IT HOLDING S.p.A. Notes to the consolidated financial statements for the year ended December 31, 2004
Deferred tax expense
2004 2003
(In thousands of Euros)
Origination and reversal of temporary differences (2,088) (5,656)
Benefit of tax losses recognised 365 (2,542)
Subtotal (1,723) (8,198)
Tax benefit on parent company's dividends - (25,866)
Total (1,723) (34,064)
Total income tax expense in income statement 13,809 (21,729)
Tax benefit on parent Company’s dividends in the year 2003, represents the receivable that IT HOLDING, which
was in a tax loss position, earned versus tax authorities on the dividends received during the year 2003 from Ittierre
S.p.A..
The details and movements of deferred tax assets and liabilities are described in note 19, Deferred tax assets and
liabilities.
The reconciliation between the actual and theoretical tax rates for 2003 and 2004 is as follows:
(In thousands of Euros)
2004 2003
Income (loss) before tax 2,575 (84,772)
Income tax using the domestic corporation tax rate 33.00% 850 33.00% (27,975)
Temporary differences unrecognised (2,841) (5,287)
Benefit of tax losses unrecognised (12,760) 14,489
IRAP 6,298 5,424
Foreign company 902 950
Permanent differences 19,031 15,889
Current tax prior years 1,392 -
Tax benefit on dividends - (25,866)
Others 937 647
Total income tax expenses in income statement 13,809 (21,729)
(9) Significant Events after the Year-end
On January 11, 2005, IT HOLDING Finance S.A., a wholly-owned subsidiary, concluded the voluntary partial
tender offer made on December 13, 2004 for the repurchase of 80% of the “Euro 200 million 7% Guaranteed notes
due 2005” of which Euro 175 million were still outstanding at the offer date. Following the tender offer, the
Group repurchased notes for a nominal value of Euro 80,434 thousand and total consideration of Euro 84,878
thousand. The notes were repurchased with part of the proceeds arising from the senior notes due 2012 issued
October 2004 held in an escrow account (see note 11). The loss realized upon repurchase of the notes, amounting
to Euro 603 thousand was accrued for at December 31, 2004 and is included in the income statement caption
“financial income (charges)” (see note 6).
On March 4, 2005 IT HOLDING Finance S.A. placed an additional Euro 35 million of senior notes due 2012 at an
issue price of 100.5% to be treated as a single class with the 2012 senior notes issued in October 2004. The net
proceeds will be used, together with the remaining proceeds from the October 2004 issue, to fund the repurchase
of the remaining outstanding “Euro 200 million 7% Guaranteed notes due 2005”.
On March 17, 2005, the Board of Directors called an extraordinary shareholders’ meeting to be held on April 20,
2005 (April 22, on second call) to grant the Board the power to increase the share capital on one or more occasions,
through payment and with a share premium, with the exclusion of the option in accordance with paragraph 5 of
article 2441 of the Italian Civil Code, for a maximum nominal amount of Euro 8 million and a total counter-value
not to exceed Euro 100 million, as well as to change article 5 of the Company’s bylaws accordingly. Management
intends to execute the faculty to increase the share capital, at least partially, by December 31, 2005.
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