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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.
11. FINANCE INCOME AND EXPENSES
2016 2015
Interest income on short-term bank deposits 1,001 1,163
Finance income 1,001 1,163
Interest expenses - 30,014 - 30,333
Expenses prepayment US private placement - 40,264 -
Change in fair value of (hedging instruments regarding) borrowings - 178 - 722
Other expenses - 1,860 - 1,919
Finance expenses - 72,316 - 32,974
Net finance expenses recognized in consolidated statement of profit or loss - 71,315 - 31,811
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 and
EUR 9.9 million expenses relating to the unwinding of the related cross-currency interest rate swaps
. 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.
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ANNUAL REPORT 2016 – BOSKALIS