sain t-gobain annu al report 2008 annual report
sain t-gobain annu al report 2008 annual report
sain t-gobain annu al report 2008 annual report
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The plan costs are c<strong>al</strong>culated under IFRS 2 in the same way as for non-leveraged plans (see Note 1), but <strong>al</strong>so take into account the<br />
advantage accruing to employees who have access to share prices with a volatility profile adapted to institution<strong>al</strong> investors<br />
(corresponding to the opportunity gain in the table below).<br />
The leveraged plan cost recorded in the income statement amounted to €8.5 million in <strong>2008</strong> (2007: €4.2 million), net of the lockup<br />
cost for employees and the opportunity gain of €29.9 million (2007: €14.2 million).<br />
The following table shows the main features of the leveraged plans, the amounts invested in the plans and the v<strong>al</strong>uation<br />
assumptions applied in <strong>2008</strong> and 2007.<br />
<strong>2008</strong> 2007<br />
Plan characteristics<br />
Grant date February 22 February 23<br />
Plan duration (in years) 5 5<br />
Benchmark price (in €) 51.75 72.56<br />
Purchase price (in €) 43.99 61.68<br />
Discount (in %)) 15.00% 15.00%<br />
(a) Tot<strong>al</strong> discount on the grant date (in %) 17.18% 16.19%<br />
Employee investments (€ millions) 18.5 8.9<br />
Tot<strong>al</strong> investment in the plan (€ millions) 184.8 89.0<br />
Tot<strong>al</strong> number of shares purchased 4,199,902 1,442,584<br />
V<strong>al</strong>uation assumptions<br />
Interest rate paid by employees (1) 7.57% 7.36%<br />
5-year risk-free interest rate 3.61% 4.02%<br />
Repo rate 0.25% 0.25%<br />
Retail/institution<strong>al</strong> volatility spread (2) 5.50% 4.00%<br />
(b) Lock-up discount (in %) (3) 15.00% 15.00%<br />
(c) Opportunity gain (in %) 1.62% 1.65%<br />
(d) Tot<strong>al</strong> cost to the Group (in %) (a-b+c) 3.80% 2.84%<br />
(1) A 0.5-point decline in borrowing costs for the employee would have no impact on the <strong>2008</strong> cost as c<strong>al</strong>culated in accordance with IFRS 2 because the lock-up cost<br />
exceeds the discount.<br />
(2) A 0.5-point increase in the retail/institution<strong>al</strong> rate spread would have an impact of €0.5 million on the <strong>2008</strong> cost as c<strong>al</strong>culated in accordance with IFRS 2.<br />
(3) The interest rate used to c<strong>al</strong>culate the lock-up cost is capped at the discount percentage.<br />
NOTE 13<br />
Provisions for pensions and other employee benefits<br />
Dec. 31, Dec. 31, Dec. 31,<br />
(in € millions) <strong>2008</strong> 2007 2006<br />
154<br />
Pensions 1,681 1,058 1,415<br />
Length-of-service awards 207 233 236<br />
Post-employment he<strong>al</strong>thcare benefits 367 341 363<br />
Tot<strong>al</strong> provisions for pensions and other post-employment benefit obligations 2,255 1,632 2,014<br />
He<strong>al</strong>thcare benefits 50 44 51<br />
Long-term disability benefits 38 38 45<br />
Other long-term benefits 100 93 93<br />
Provisions for pensions and other employee benefits 2,443 1,807 2,203<br />
The following table shows projected benefit obligations under pension and other post-employment benefit plans and the related<br />
plan assets:<br />
Dec. 31, Dec. 31, Dec. 31,<br />
(in € millions) <strong>2008</strong> 2007 2006<br />
Projected benefit obligations 2,255 1,632 2,014<br />
Plan assets 206 147 120<br />
Net projected benefit obligations 2,049 1,485 1,894<br />
Saint-Gobain – Financi<strong>al</strong> Report <strong>2008</strong>