Saint Gobain - Registration document 2016

9 FINANCIAL AND ACCOUNTING INFORMATION 1. 2016 Consolidated Financial Statements

Income tax expense breaks down as follows:

For investments in subsidiaries, deferred tax is recognized on the difference between the consolidated carrying amount of the investments and their tax basis when it is probable that the temporary difference will reverse in the foreseeable future. income statement, unless they relate to items that are recognized directly in equity, in which case the deferred tax is also recognized in equity. Deferred taxes are recognized as income or expense in the In the balance sheet, changes in the net deferred tax liability break down as follows:

2016

2015

(in € millions)

CURRENT TAXES

(325)

(457)

France

(45)

(40)

Outside France

(280)

(417)

DEFERRED TAXES

(91)

209

France

86

219

Outside France

(177)

(10)

TOTAL INCOME TAX EXPENSE

(416)

(248)

asset/(liability) Net deferred tax

(in € millions)

expense using a tax rate of 34.43% in 2016 and 2015, and can be analyzed as follows: Theoretical tax expense was reconciled with current tax

AT JANUARY 1, 2015

714

Deferred tax (expense)/benefit

202

Changes in deferred taxes relating to actuarial gains and losses (IAS 19)

2016

2015

(in € millions)

(18)

Theoretical tax expense at French tax rate

(596)

(214)

Liability method on actuarial gains and losses

(33)

Impact of different tax rates

161

116

Translation adjustments

52

Asset impairment, capital gains and losses and anti-trust provision

Impact of changes in scope of consolidation and other

(46)

(8)

(125)

AT DECEMBER 31, 2015

871

Deferred tax assets not recognized

(75)

(31)

Deferred tax (expense)/benefit

(91)

Liability method

67

6

and losses (IAS 19) Changes in deferred taxes relating to actuarial gains

value-added contribution for businesses (CVAE) Research tax credit, tax credit for competitiveness and employment (CICE) and

76

5

6

Liability method on actuarial gains and losses

(51)

Costs related to dividends

(5)

(1)

Translation adjustments

29

Other taxes and provision writebacks

35

(5)

Impact of changes in scope of consolidation and other

(9)

TOTAL INCOME TAX EXPENSE

(416)

(248)

AT DECEMBER 31, 2016

825

Changes in deferred tax rates led the Group to recognize an income tax gain of €67 million in 2016 (€6 million gain in 2015). The main contributors to this item were France and the United Kingdom. The impact of the different tax rates applicable outside France explains the contribution of countries with low tax rates. The main contributing countries are the United Kingdom, Czech Republic, Switzerland, Sweden and Poland. substantively enacted at the end of the reporting period. assets and liabilities and their tax basis. Deferred tax assets and liabilities are measured at the tax rates expected to apply to the period when the asset is realized or the liability settled, based on the tax laws that have been enacted or Deferred taxes are recorded using the balance sheet method for temporary differences between the carrying amount of No deferred tax liability is recognized in respect of undistributed earnings of subsidiaries that are not intended to be distributed. Deferred tax 10.2.

The table below shows the main deferred tax components:

Dec. 31, 2016 Dec. 31, 2015

(in € millions)

Pensions

846

1,011

Brands

(474)

(552)

Depreciation and amortization, accelerated capital allowances and tax-driven provisions

(887)

(916)

Tax loss carry-forwards

765

780

Other

575

548

NET DEFERRED TAX

825

871

Of which: Deferred tax assets

1,188

1,337

Deferred tax liabilities

(363)

(466)

Netherlands). Kingdom, Spain, Germany, the United States and the tax group where applicable (mainly in France, the United Deferred taxes are offset at the level of each tax entity, i.e., by Kingdom, €54 million in India, €43 million in Switzerland, and December 31, 2015), including €88 million in the United December 31, 2016 amounted to €363 million (€466 million at (€219 million). Deferred tax liabilities recognized at primarily in the United States (€533 million) and in Germany December 31, 2016 (€1,337 million at December 31, 2015), Deferred tax assets of €1,188 million were recognized at

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SAINT-GOBAIN - REGISTRATION DOCUMENT 2016