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FINANCIAL AND ACCOUNTING INFORMATION
3. Compagnie de Saint-Gobain annual financial statements (parent company)
267
SAINT-GOBAIN
- REGISTRATION DOCUMENT 2016
statement.
for hedge accounting are recognized in the income
cross-currency swaps to hedge its exposure to fluctuations in
interest rates.
The Company uses mainly interest rate swaps and
statement on a symmetrical basis against income and
expenses on the hedged items.
Financial income and expenses on interest rate swaps and
cross-currency swaps are recognized in the income
are recognized in the income statement at market value.
Interest rate options that do not qualify for hedge accounting
The portion of the unrealized gain or loss on interest rate
options qualifying for hedge accounting that represents the
extrinsic (time) value is taken to income, and the portion that
represents the intrinsic value is recorded in the balance sheet.
hedged items.
these swaps are recognized in the income statement on a
symmetrical basis against the income and expenses on the
subsidiaries are hedged by the Company, mainly using energy
and raw materials swaps. Financial income and expenses on
The commodity price risks (energy and raw materials) of
using cash-settled equity swaps, which qualify for hedge
accounting.
The risk of fluctuations in the Saint-Gobain share price that
could affect the cost of performance unit plans is hedged
Tax consolidation agreements
accounting period starting January 1, 2007.
period covered by this agreement was 2004-2006. The
Company chose not to renew this agreement for the
income tax on its worldwide taxable income as provided for
under Article 209 quinquies of the French Tax Code. The last
Compagnie de Saint-Gobain was previously assessed for
which rejected on September 21, 2016, an appeal from the tax
administration.
expense. Most of this provision has been written back in 2016
following a favourable ruling by the French Conseil d’État,
following the non-renewal of this agreement. Movements in
this provision are recorded under exceptional income or
accounts for taxes that may be payable in future periods
A tax provision is recorded in Compagnie de Saint-Gobain’s
Tax Code has remained in effect.
As a result, since January 1, 2007 only the tax consolidation
regime provided for in Articles 223 A et seq. of the French
consolidated subsidiaries. In their relationship with
Compagnie de Saint-Gobain, the consolidating parent
The tax consolidation agreements between Compagnie de
Saint-Gobain and its subsidiaries provide for tax neutrality for
parent company during the consolidation period.
subsidiary leaves the Group, they are not, in principle, entitled
to any payments for losses transferred to the consolidating
company, the subsidiaries discharge their taxes as if they had
been taxed on a stand-alone basis. When a loss-making
OPERATING INCOME
NOTE 2
compared with the amounts recorded in 2015.
This was mainly due to the increase of actuarial losses on
pension and other post-employment benefit obligations
Operating income declined by €15.8 million in 2016 (loss of
€33.4 million versus an operating loss of €17.6 million in 2015).
NET FINANCIAL INCOME
NOTE 3
Net financial income increased by €171.6 million, from
€773.8 million in 2015 to €945.4 million, largely reflecting:
subsidiaries of the German branch);
subsidiaries and 2016 profit transferred from the
a €179.3 million increase in income from investments in
subsidiaries and affiliates (dividends received from
investments net of interest expense incurred;
a €9.4 million decrease in income from loans and
compared with 2015 (net expense of €20.2 million in 2016
versus €20.1 million in 2015);
a net of provisions accruals and reversals unchanged
A foreign exchange gain increase of €1.9 million.
EXCEPTIONAL INCOME AND EXPENSE
NOTE 4
reversal following a ruling handed down in our favour by the
French Conseil d’État on September 21, 2016, in connection
The Company reported a net exceptional income of
€8.4 million primarily due to a €31 million tax provision
reversal was partially offset by the booking of provisions for
performance share and performance unit Group Plans.
with a dispute with the tax administration following our exit
from the worldwide tax consolidation regime. This provision