Income statement

(in millions of euro)

2008

2007

Financial income (expenses), net

30.5

(63.6)

Income (expenses) from investments, net

(181.0)

263.8

Other operating income (expenses)

(37.4)

(30.4)

Income (loss) before taxes

(187.9)

169.8

Income taxes

(1.6)

3.7

Income (loss) from continuing operations

(189.5)

173.5

Income (loss) from discontinued operations

-

(72.8)

Total income (loss) for the year

(189.5)

100.7

The loss for the year amounts to Euros 189.5 million compared to income in the previous year of Euros 100.7 million. The most important items are described below:

  • financial income (expenses) net, shows an improvement of Euros 94.1 million compared to 2007. The change is mainly due to the effect of higher average liquidity in 2008 compared to 2007. An analysis is presented below:

(in millions of euro)

2008

2007

Interest expenses

(45.0)

(85.6)

Other financial expenses

(5.3)

(7.6)

Interest income

80.0

28.8

Other financial income

0.8

0.8

Total income (loss) for the year

30.5

(63.6)

  • details of income (expenses) from investments, net are presented in the following table:

(in millions of euro)

2008

2007

Dividends

Pirelli Tyre S.p.A.

54.9

42.7

Pirelli & C. Real Estate S.p.A.

48.6

44.1

Pirelli Holding N.V.

11.0

557.4

Mediobanca S.p.A.

9.8

9.8

Sipir Finance N.V.

9.5

5.5

Telecom Italia S.p.A.

3.8

6.6

Other companies

10.2

9.9

 

147.8

676.0

Impairment losses

Pirelli Finance (Luxembourg) S.A.

(167.1)

(16.7)

RCS Mediagroup S.p.A.

(65.7)

-

Telecom Italia S.p.A.

(46.1)

(23.7)

Pirelli Uk Ltd

(31.8)

29.0

CyOptics Inc,

(8.7)

-

PGT Photonics S.p.A.

(6.4)

-

Pirelli Holding N.V.

-

(385.7)

Pirelli Broadband Solutions S.p.A.

-

(16.5)

Other companies

(4.3)

(5.2)

 

(330.1)

(418.8)

Gains from sales

1.3

6.6

 

(181.0)

263.8

  • other operating income (expenses) went from Euros 30.4 million in 2007 to Euros 37.4 million.

The reduction is primarily due to the presence, in 2007, of income of Euros 10 million relating to the last payment of royalties for the use of Pirelli intellectual property rights by the Energy and Telecom Cables and Systems companies sold in 2005;

  • income taxes show a charge compared to last year principally as a result of a reduction in the tax benefit on the Group consolidated tax return;
  • in 2007, income (loss) from discontinued operations included: the gain realized on the sale to Goldman Sachs International of 4,763 warrants that had been obtained as part of the sale of the Energy and Telecom Cables and Systems activities in July 2005 (Euros 91.0 million); the net loss, including transaction costs net of revenues for services rendered to Olimpia S.p.A., originating from the sale of the investment in Olimpia S.p.A. (Euros 159.7 million); the adjustment of the provision for future liabilities and charges on the guarantees provided to the buyer as part of the sale of the Energy and Telecom Cables and Systems activities (Euros 4.1 million).