Financial Statements - Solvay

For the Pharmaceuticals Sector, which represents 75 % of the Group’s R&D expense budgets, the 3.2 % increase is
explained by higher expenses for the write-off of clinical supply for SLV308 phase III combined with higher bifeprunox
expenses related to the termination of 4 clinical studies. On the other hand, expenses have been reduced by the reversal
of the Bipolar provision of EUR 25 million that was included in the bifeprunox development with Wyeth.
(6) Other operating gains and losses
EUR Million 2007 2008
Start-up, formation and preliminary study costs -33 -38
Cost of closures and demolitions -15 -15
Costs of trials and tests -5 -3
Balance of other gains and losses 10 46
Other operating gains and losses -44 -10
Start-up costs relate mainly to the Weesp site in the Netherlands, where the Pharmaceuticals Sector is building a facility
to produce INFLUVAC ® cell-cultured fl u vaccine (EUR -26 million in 2008 versus EUR -18 million in 2007), and to the new
hydrogen peroxide plant in Belgium (EUR -4 million).
The balance of the other gains and losses item includes in particular:
• the gain from the sale of underground cavities in Germany (EUR 51 million compared with EUR 52 million in 2007),
• the gain from the sale of licences of pharmaceutical products (EUR 43 million compared with EUR 15 million in 2007),
• restructuring charges (EUR -22 million compared with EUR -20 million in 2007),
• the temporary shutdown costs of plants in the Vinyls activity (EUR -17 million),
• a change in post-employment benefi ts in the United States (EUR 17 million),
• the net impact of changes in HSE provisions (EUR -39 million compared with EUR -22 million in 2007).
(7) Other fi nancial gains and losses
EUR Million 2007 2008
Cost of discounting provisions -42 -43
Income from investments and interest on loans to joint ventures and non-consolidated companies 17 14
Net foreign exchange gains and losses 16 4
Balance of other gains and losses -7 22
Other fi nancial gains and losses -16 -2
The foreign exchange gains and losses relate to profi ts and losses realized on fi nancial instruments recognized as cash
fl ow hedges.
(8) REBIT
REBIT (recurring EBIT) is equal to current operating earnings, i.e. excluding non-recurring earnings.
This item decreased by 19 % from EUR 1 192 million to EUR 965 million in 2008.
(9) Non-recurring items
Non-recurring items mainly include:
• gains and losses on the sale of subsidiaries, joint-ventures, affi liates accounted for under the equity method that do not
qualify as discontinued operations, available-for-sale investments; gains and losses on the sale of real estate not directly
linked to an operating activity;
• restructuring charges associated with the shutdown of an activity;
• impairment of tangible assets, intangible assets and goodwill associated with the shutdown of an activity and/or
a restructuring plan;
• the impact of signifi cant litigation.
Financial
73
Solvay Global Annual Report 2008
Financial