RUBIS_REGISTRATION_DOCUMENT_2017

FINANCIAL STATEMENTS 9

2017 consolidated financial statements and notes

5.10 INCOME TAX

5.10.1 Income Tax On French Tax Group Companies

enterprises liable for corporate income tax, for periods ended from December 31, 2017 to December 30, 2018. The exceptional contribution is due from entities or tax groups with sales revenue greater than €1 billion. The contribution is equal to 15% of the corporate income tax due. The tax consolidation Group in France exceeds the first threshold, and consequently the net income of the French tax consolidation is taxed at the rate of 39.43%. Deferred tax assets and liabilities Deferred income tax expense is determined using the method described in note 4.6.

The 2018 Finance Act contains a gradual reduction in the rate of income tax to 25.83% in 2022 for all companies. This reduction will be made in successive steps depending on revenue. The Group will take full advantage of this measure starting in 2022. The 2017 consolidated financial statements include income of €1.6 million due to this future rate reduction. The IFRS provide that deferred tax assets and liabilities must be measured using the tax rate in effect at the time of their probable use. This measurement will be updated at each balance sheet date.

Current income tax expense Current income tax expense corresponds to the amount of income tax payable to the tax authorities for the fiscal period, in accordance with applicable regulations and tax rates in effect in France. The base tax rate in France is 33.33%. The Social Security Finance Act No. 99- 1140 of December 29, 1999 established an additional tax of 3.3% of the base tax payable; the legal tax rate for French companies was thus increased by 1.1%. The amending Finance Ac t of 2017 established an exceptional contribution for

5.10.2 Reconciliation between theoretical income tax applicable in France and actual income tax expense

12/31/2017

Income

Tax

Rate

(in thousands of euros)

INCOME AT THE NORMAL RATE

359,015

(123,609)

34.43% -13.1% 1.1% 0.4% -1.4% 0.6% -0.2% 0.0% -0.6% 0.4% 0.5% 22.1%

Geographic impact

46,926 (4,100) (1,482)

Distribution tax (share of cost and expenses, withholding tax)

Special 3% tax on dividends

Repayment of special 3% tax on dividends

5,201

Additional contribution in France

(2,089)

Permanent differences Tax adjustments and risks

777 (13)

Impact of operations taxed at a reduced rate

1,981

Effect of changes in rate

(1,411) (1,620) (79,437)

Other

INCOME BEFORE TAX AND SHARE OF NET INCOME FROM JOINT VENTURES

359,015

Share of net income from joint ventures

3,260

INCOME BEFORE TAX

362,275

(79,437)

21.9%

5.11 EARNINGS PER SHARE

ACCOUNTING POLICIES Basic earnings per share is calculated by dividing net income, Group share by the weighted average number of shares outstanding during the fiscal year. The weighted average number of shares outstanding is calculated based on any changes in share capital during the period, multiplied by a weighting factor depending on the time, and adjusted, where applicable, to take into account the Group’s treasury share holdings. Diluted net earnings per share is calculated by dividing net income, Group share by the weighted average number of ordinary shares outstanding, increased by the maximal amount of impact from the conversion of all dilutive instruments. In both cases, the shares included in the calculation of the weighted average number of shares outstanding during the fiscal year are those which provide unlimited entitlement to earnings. The table below presents the income and shares used to calculate basic earnings and diluted earnings per share. 2017 Registration Document I RUBIS 222