FINANCIAL AND ACCOUNTING INFORMATION Analysis of deferred tax assets and l iabil ities by A valuation al lowance on deferred tax assets of nature is as follows: €160.1 mil lion was recognized as of December 31, 2017 (€155.4 mil lion as of December 31, 2016), as AS OF DECEMBER 31, a result of the recoverabil ity assessment of the (in millions of euros) 2017 2016 net deferred tax assets by each tax entity. The Intangible assets (292.6) (385.4) recoverable amount excludes risks arising from notified tax reassessments that are contested by the Property, plant and equipment (5.9) (2.1) Group and is based on the expected taxable profits Financial assets 21.1 24.8 over the next 5 years. Trade accounts receivable 12.8 14.2 As of December 31, 2017, deferred tax assets Inventories 14.9 22.2 arising on tax losses carried forward that are not Employee benefits 86.8 95.0 expected to be used within five years were subject to a valuation allowance mostly in Spain, the United Provisions 7.1 11.4 Kingdom, Germany and Italy. The expiry date of Financing fees (3.2) (4.9) such tax losses carried forward is as follows: Other items (11.1) 3.7 AS OF DECEMBER 31, Tax losses carried forward 252.2 264.6 (in millions of euros) 2017 2016 Deferred tax assets / (liabilities), net 82.3 43.8 One year 0.0 – Valuation allowance on deferred Two years 0.5 – tax assets (160.1) (155.4) Three years 0.3 1.5 Net deferred tax assets / Four years 2.1 1.1 (liabilities) (77.8) (111.6) 5 Five years 4.0 4.1 of which deferred tax assets 95.9 128.4 Thereafter 562.5 494.4 of which deferred tax liabilities (173.7) (240.0) Total tax losses carried forward (tax basis) subject to a valuation allowance 569.4 501.1 11.3 Effective tax rate FOR THE YEAR ENDED DECEMBER 31, (in millions of euros) 2017 2016 Income before tax and before share of profit in associates 176.4 250.7 French legal tax rate 34.4% 34.4% Income tax calculated at the legal tax rate (60.7) (86.3) 2017 Exceptionnal 15% contribution to French tax rate (4.9) 2.8% – Differences of tax rates between French and foreign jurisdictions 4.8 (2.7%) 9.1 (3.6%) Changes in tax rates (1) 62.6 (35.5%) 7.4 (3.0%) (Current year losses unrecognized), prior year losses recognized (10.4) 5.9% (14.8) 5.9% (Non-deductible expenses), tax exempt revenues(2) (49.6) 28.1% (21.1) 8.4% Others(3) (13.2) 7.5% (10.6) 4.2% Actual income tax expense (71.5) 40.5% (116.4) 46.4% (1)I ncluding in 2017, (i) a €56.0 million gain relating to the decrease in the US federal tax rate from 35% to 21% effective in 2018 and (ii) a €6.9 million gain relating to the progressive decrease in French tax rate, from 34.4% to 25.8% effective in 2022. (2) I ncluding tax impact of non-deductible goodwill impairment expense of €36.9 million (€9.8 million in 2016). (3) I ncluding in 2017 (i) the tax effect of the non-deductible disposal loss on Rexel South East Asia disposal of €9.8 million, (ii) a €9.9 million gain following a claim brought to the French tax authorities, with respect to the refund of 3% tax imposed on distributions of dividends (for the years 2013 to 2017), that has been declared unconstitutional and (iii) a tax levy calculated on added value in France (CVAE) for €6.7 million (€6.8 million in 2016). REXEL 2017 – REGISTRATION DOCUMENT 233