LOREAL_Registration_Document_2017

2017 Consolidated Financial Statements* NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Closing balances 11.1.1.

31.12.2017

31.12.2016

31.12.2015

€ millions

Non-current provisions for liabilities and charges

434.9 434.9 889.2 146.0 303.6 439.6

333.3 333.3 810.7

195.9 195.9 754.6

Other non-current provisions (1)

Current provisions for liabilities and charges

Provisions for restructuring Provisions for product returns Other current provisions (1)

47.5

50.9

323.4 439.8

309.3 394.4

TOTAL 950.4 This item notably includes provisions for tax risks and litigation, as well as industrial, environmental and commercial risks relating to operations (breach of contract), (1) personnel costs, investments in associates when the Group's share in the net asset is negative, as well as risks relating to investigations carried out by competition authorities (note 11.2.2.a and b). At end-December 2017, some L’Oréal subsidiaries in France received a reassessment proposal relative to 2014 financial year, mainly concerning corporate tax. After consulting with its tax advisors, L’Oréal decided to contest these reassessments and sought the legal means of recourse to ensure its defence. In January 2015, decree 8.393/2015 stated that commercial companies in Brazil would be liable for the indirect IPI tax on certain products as from 1 May 2015. L’Oréal is challenging the legal grounds of this decree and its application and considers that the provisions recognised in the financial statements are adequate to cover its tax risks and litigation. Changes in provisions for liabilities and charges during the period 11.1.2. 1,324.1 1,144.0

Reversals (used) (2)

Reversals (not used) (2)

4

31.12.2017

31.12.2015 31.12.2016 Charges (2)

Other (1)

€ millions

Provisions for restructuring Provisions for product returns

50.9

47.5

156.6 331.1 257.0 744.7

-41.8

-10.1 -54.9 -68.6

-6.0

146.0 303.6 874.5

309.3 590.2 950.4

323.4 773.1

-276.7 -129.3 -447.8

-19.4 42.3 16.9

Other provisions for liabilities and charges

TOTAL

1,144.0

-133.7

1,324.1

Mainly resulting from translation differences and €67.1 million relating to the dispute on IPI with the tax administration in Brazil (note 11.2.1.). (1) These figures can be analysed as follows: (2)

Charges

Reversals (used)

Reversals (not used)

€ millions

Other income and expenses s

156.9 494.1

-44.0

-10.1 -89.4

Operating profit s

-388.4

Financial (income)/expense s

-

-

-

Income tax s

93.7

-15.4

-34.2

The change in this caption in 2016 can be analysed as follows:

Reversals (used) (2)

Reversals (not used) (2)

31.12.2014 31.12.2015 Charges (2)

Other (1)

31.12.2016

€ millions

Provisions for restructuring Provisions for product returns

65.5

50.9

48.5

-40.4

-6.1

-5.4

47.5

244.4 605.7 915.6

309.3 590.2 950.4

303.1 219.7 571.3

-216.8 -115.2 -372.4

-79.3 -51.8

7.2

323.4 773.1

Other provisions for liabilities and charges

130.1 131.9

TOTAL 1,144.0 Mainly resulting from translation differences, scope of consolidation changes and €58.4 million relating to the dispute on IPI with the tax administration in Brazil (1) (note 11.2.1.). These figures can be analysed as follows: (2) -137.2

Charges

Reversals (used)

Reversals (not used)

€ millions

Other income and expenses s

50.6

-40.5

-7.8

Operating profit s

480.2

-322.2

-107.1

Financial (income)/expense s

-

-

-

Income tax s

40.5

-9.7

-22.3

REGISTRATION DOCUMENT / L'ORÉAL 2017

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