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7. OTHER INCOME AND OTHER EXPENSES Other income mainly comprises the book profit of EUR 34.0 million on the transfer of the European harbor towage activities (see note 5.3) into the KOTUG SMIT Towage joint venture, the result on the bargain purchase regarding the assets and activities of STRABAG Wasserbau of EUR 11.0 million (see note 5.2), the result on the sale of SMIT Amandla Marine amounting to EUR 8.3 million (see note 5.4), reversal of an impairment amounting to EUR 1.3 million and positive book results on the disposal of equipment of EUR 4.7 million (2015: EUR 8.4 million).

Other expenses relates to the book loss on the disposal of equipment amounting EUR 0.3 million (2015: EUR 4.6 million).

8. RAW MATERIALS, CONSUMABLES, SERVICES AND SUBCONTRACTED WORK As part of this line item the operating lease costs relating to leased equipment are reported for an amount of EUR 34 million (2015: EUR 35 million). In 2015 expenses for reorganization were incurred for an amount of EUR 2.7 million. For reorganization expenses 2016, we refer to note 9 Personnel expenses below.

9. PERSONNEL EXPENSES

2015

2016

Wages and salaries Social security expenses

- 406,316 - 45,982 - 43,277 - 17,513 - 513,088

- 373,146 - 37,318 - 24,267 - 16,724 - 451,455

Pension expenses for defined benefit pension plans Pension expenses for defined contribution pension plans

A number of senior managers participate in an incentive plan based upon the development of the share price, which is settled on a cash basis. The fair value of the related liability for the year, is included as part of the personnel expenses in the statement of profit or loss. The related charge for 2016 amounted to EUR 0.4 million (2015: EUR 3.6 million) and the corresponding liability was EUR 4.4 million (2015: EUR 6.5 million). For the remuneration of the Board of Management and the Supervisory Board refer to note 30.2.

Intangible assets ANNUAL REPORT 2016 – BOSKALIS FINANCIAL STATEMENTS 2016 Property, plant and equipment Impairment losses in joint ventures

Pension expenses for defined benefit pension plans include settlement and curtailment gains amounting to EUR 13.3 million (see note 25).

During the year expenses for reorganization were incurred for an amount of EUR 11.6 million mainly in connection with fleet rationalization and related staff reduction.

10. IMPAIRMENT LOSSES Goodwill and other intangible assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment. Other non-financial assets that are subject to depreciation and amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

2015

2016

-

- 382,269 - 366,217 - 748,486 - 94,155 - 842,641

- 14,533 - 14,533

-

- 14,533

In 2016 the Group incurred a non-cash impairment loss of EUR 843 million. This charge is almost entirely related to the services part of the Groups’ offshore oil and gas activities. In some of the service-related offshore energy market segments there is a structural imbalance between supply and demand, particularly in the heavy marine transport segment. This has put utilization, rates and margins under pressure.