TomTom 2008 Annual Report Download - page 62

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60 / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OF TOMTOM NV
8. ADDITIONAL INFORMATION REGARDING OPERATING EXPENSES (continued)
Average number of employees
The average number of employees in 2008 was 2,703 (2007: 1,078). At 31 December 2008, the Group had 3,498
(2007: 1,337) employees.
Operating expenses include an amount of €72.8 million for depreciation and amortisation expenses (2007: €23.5
million).
(€ in thousands) 2008 2007
Amortisation expenses 55,414 16,611
Depreciation expenses 17,350 6,867
72,764 23,478
The costs for operating leases in 2008 amounted to €17.4 million (2007: €2.7 million).
9. FINANCIAL INCOME AND EXPENSES
Financial income and expenses include the following items.
(€ in thousands) 2008 2007
Interest income 13,991 20,102
Interest expense -66,046 -981
Interest result -52,055 19,121
Other financial result -3,966 0
Exchange rate result 76,114 -16,330
Other financial result 72,148 -16,330
A substantial part of the foreign exchange gain is related to results on hedge contracts to sell GB pounds and to
purchase US dollars in order to pay our most significant contract manufacturers. This gain is made up of both
realised and unrealised amounts.
The interest expense relates to interest paid on our borrowings (see note 23).
10. INCOME TAX
The activities of the Group are subject to corporate income tax in several countries, depending on presence and
activity. The applicable statutory tax rates vary between 25% and 40%. This, together with timing differences, can
cause the effective tax rate to differ from the Dutch corporate tax rate.
(€ in thousands) Note 2008 2007
Current tax expense 60,832 118,804
Deferred tax 24 17,298 -12,852
Through equity 05,822
Other permanent differences 02,345
Total tax expense for calculating effective tax rate 78,130 114,119
The effective tax rate, based on income before taxes, excluding impairment, was 30.8% (2007: 26.5%). The
reconciliation between the tax charge on the basis of the Dutch tax rate and the effective tax rate is as follows:
2008 2007
Effective tax rate (excluding impairment) 30.8% 26.5%
Effect impairment charge -40.6% 0.0%
Effective tax rate (including impairment) -9.8% 26.5%