This is the exact questions the professor asked:

Estimating operating taxes:Determine the operating tax rate. Apply the operating tax rate to operating profit to determine after-tax operating profit. To find the operating tax rate, proceed in three steps.

1. First, use the tax reconciliation table to determine the marginal tax rate.
2. Next, apply the marginal tax rate to EBITA to determine statutory taxes on EBITA. This will differ from the estimated tax charge. The estimated tax charge uses earnings before taxes as its base.
3. Finally, segment the remaining tax items into operating taxes related to current, ongoing core operations and nonoperating taxes. Similar to operating income, evaluating whether or not a component is ongoing and related to core operations is subjective. Therefore, comment on why you have classified each component a particular way.

The professor gave us 3 sheets with data.

• Other operating Income
• Other operating charges
• Taxes on income ( the tax reconciliation table)

They are supplied below.

Taxes on income

Earnings before taxes on income and analysis of taxes in million euros 2008 2009

Earnings before tax 1,627 885 Current taxes 570 239 Deferred taxes -176 18

Taxes on income 394 257

Main components of tax expense and income in million euros 2008 2009 Current tax expense / income in thereporting year 583 259

Current tax adjustments for prior years -13 - 20 Deferred tax expense / income fromtemporary differences -144 47 Deferred tax expense / income fromchanges in tax rates 5 3

Increase / decrease in valuationallowances on deferred tax assets 8 -13

Other operating income in million euros 2008 2009 Gains on disposal of non-current assets 14 10 Profits on sale of businesses 8 - Income from release of provisions 44 38 Income from release of valuationallowances for doubtful debts 6 2 Write-ups of non-current assets - 3 Sundry operating income 88 87 Total 160 140

Other operating charges in million euros 2008 2009 Write-downs of miscellaneous assets 4 - Losses on disposal of non-current assets 17 22 Goodwill impairment losses - 46 Sundry operating expenses 54 97 Total 75 165