REGISTRATION DOCUMENT AND FINANCIAL REPORT - Iliad

20. FINANCIAL INFORMATION CONCERNING THE COMPANY’S ASSETS AND LIABILITIES,
FINANCIAL POSITION AND PROFITS AND LOSSES
20.1 CONSOLIDATED FINANCIAL STATEMENTS FOR 2007, 2006 AND 2005
Movements in deferred taxes in 2006 can be analyzed as follows:
Type of movement
Value of
DT assets/
(liabilities) at
Jan. 1, 2006 Credits (Charges)
Changes
in Group
structure
Currency
translation Other 31
Value of
DT assets/
(liabilities) at
Dec. 31, 2006
Recognition of deferred tax assets
arising from tax loss
carryforwards .................... 0 0 0 0 0 0 0
Consolidation entries ............. 799 1,832 735 0 0 (11,716) (9,820)
Temporary differences ........... 687 2,654 687 0 0 0 2,654
Other ............................ (18,684) 0 0 0 0 0 (18,684)
Total ............................ (17,198) 4,486 1,422 0 0 (11,716) (25,850)
DT assets at Jan. 1, 2006 .................. 2,232 DT assets at Dec. 31, 2006 ............. 3,728
DT liabilities at Jan. 1, 2006 .............. 19,430 DT liabilities at Dec. 31, 2006 .......... 29,578
Net DT liabilities at Jan. 1, 2006 ........ (17,198) Net DT liabilities at Dec. 31, 2006 .... (25,850)
Unrecognized deferred tax assets
Unrecognized deferred tax assets concern:
• tax loss carryforwards of companies outside the Iliad tax group which have been in a loss-making position
for several years and are not expected to return to profit in the near future;
• tax loss carryforwards that are not expected to be utilized based on the projected future earnings of the
companies concerned at the balance sheet date, or when the companies concerned have been historically
loss-making and their turnaround is in progress.
Unrecognized deferred taxes break down into the following broad categories:
(in € thousands) At Dec. 31, 2007 At Dec. 31, 2006
• Temporary differences ..................................................... 0 1
• Tax loss carryforwards ..................................................... 3,756 3,801
• Consolidation entries ...................................................... 14 11
Total ........................................................................... 3,770 3,813
NOTE 13: PROFIT FROM DISCONTINUED OPERATIONS
On February 7, 2007 Iliad sold its entire interest in Kertel SA, a company specialized in prepaid phone cards
which was part of the Group’s Traditional Telephony business segment.
Kertel was sold for €20,661,000, including €6 million in vendor finance repayable between June 29, 2007 and
December 31, 2007. The first two repayments of €2 million were received in 2007 and the final installment was
received in early 2008.
The sale agreement includes an earn-out clause based on Kertel’s EBIDTA for 2007, as follows:
• €1 million for EBITDA between €4 million and €4.75 million.
• €1.5 million for EBITDA between €4.75 million and €5.55 million.
• €2 million for EBITDA above €5.55 million.
31 Other movements correspond to the deferred tax impact of the equity component of the 2006 bond issue (see Note 29).
128 - Iliad – Registration Document 2007