Net income

Income tax

Due to the current economic conditions, we have assessed the deferred tax positions. We derecognized an amount of €133 million as we considered it not probable that these deferred tax assets can be utilized against future taxable income.

Many incidentals, such as the goodwill impairment and the transaction loss of the businesses that we divested, are tax-exempt. Excluding incidentals, the tax rate was 27 percent (2007: 27 percent).

Discontinued operations

Discontinued operations reflects the results related to the on-sale to Henkel of the former ICI Adhesives and Electronic Material businesses. We received an amount of €3.6 billion before final settlement adjustments. At year-end 2008, we recognized a receivable of €123 million for the settlement of the transaction. The gain on discontinued operations was mainly due to deferred results from the divestment of Organon BioSciences in November 2007.

During 2008, we classified National Starch as a discontinued operation. However, the intended sale did not take place in 2008 and, in accordance with IFRS, we have re-classified National Starch within continuing operations.

Earnings per share and dividend

Net income from continuing operations before incidentals declined by 14 percent to €742 million. The effect on earnings per share from continuing operations before incidentals was mitigated to a decline by 4 percent due to the share buyback program in 2008 and 2007.

An interim 2008 dividend of €0.40 per common share was paid on November 10, 2008. We propose to maintain a final dividend of €1.40, resulting in a total dividend for 2008 of €1.80 (2007: €1.80).