Boskalis_Annual_Report_2016

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Goodwill The changed market circumstances in some of the service-related offshore energy market segments have resulted in a downward adjustment of the projected future cash flows for the cash-generating unit Offshore Energy. After recognizing a EUR 382 million goodwill impairment charge, the carrying amount and recoverable amount of the cash-generating unit Offshore Energy amounted to EUR 1.4 billion as at 31 December 2016, based on a value-in-use calculation. Property, plant and equipment Also, an impairment loss on property, plant and equipment of EUR 366 million was recorded, mainly related to Offshore Energy vessels. The recoverable amounts are determined based on the higher of the fair value less costs to sell (determined by external valuator) and value-in-use calculations using discounted cash flow models. The pre-tax discount rates used in the calculations vary from 7.0% to 7.6%. Joint ventures The share in impairment losses accounted for by joint ventures, mainly Smit Lamnalco, relate to impairments on vessels due to poor market conditions which are expected to continue in subsequent years. Impact on earnings per share The non-cash impairment charges of EUR 843 million (after tax EUR 840 million) has an impact of EUR -6.56 per share and results in a net-loss and negative earnings per share of EUR -4.40. Earnings per share excluding the impact of the abovementioned non-cash impairment charges are positive and amounts to EUR 2.16. See also note 23.5.

11. FINANCE INCOME AND EXPENSES

2015

2016

Interest income on short-term bank deposits

1,163 1,163

1,001 1,001

Finance income

Interest expenses

- 30,333

- 30,014 - 40,264

Expenses prepayment US private placement

-

Change in fair value of (hedging instruments regarding) borrowings

- 722

- 178

Other expenses Finance expenses

- 1,919 - 32,974

- 1,860 - 72,316

Net finance expenses recognized in consolidated statement of profit or loss

- 31,811

- 71,315

Early repayment of the 2010 private placement notes resulted in expenses and respective accrued liabilities related to make-whole payments of EUR 30.0 million, due to the noteholders (see note 24) and EUR 9.9 million expenses relating to the unwinding of the related cross-currency interest rate swaps (see note 24). Following the early repayment, the related cross-currency interest rate swaps no longer qualified for hedge accounting. In addition the expenses regarding the prepayment of the US private placement also include the impairment of capitalized transaction costs incorporated in the carrying amount for early repayment of financing of EUR 0.4 million. Amortization and impairments relating to other loans amount to EUR 0.7 million (2015: EUR 1.3 million) and commitment fees paid to EUR 1.0 million (2015: EUR 0.8 million). The fair value adjustments for loans (with regard to hedging instruments) include EUR 9.9 million negative (2015: EUR 41.5 million negative) for foreign currency translation effects on loans and other financing obligations, as well as an equal but opposite amount for foreign currency translations on the related derivatives.

ANNUAL REPORT 2016 – BOSKALIS