Financial Statements - Solvay

74
Solvay Global Annual Report 2008
Non-recurring items break down as follows:
EUR Million 2007 2008
Impairments -123 54
Other expenses and income 154 -34
Non-recurring items 31 20
The EUR 54 million of asset impairments relates mainly to:
– in the Chemicals Sector, the reversal of the impairment of the trona mine tangible assets in the United States (natural
soda ash) in an amount of EUR 92 million (before taxes) due to the improvement of the expected cash fl ows;
– in the Chemicals Sector, impairments linked to the reorganization of SBU Molecular Solutions (EUR 17 million, of which
EUR 5 million in respect of intangible assets);
– in the Pharmaceuticals Sector, impairment of tangible assets linked to the pursual of the “INSPIRE” project
(EUR 10 million).
The other non-recurring items produced a net loss of EUR 34 million.
Income items include here the capital gains on the sale of Solvay Engineered Polymers (EUR 30 million).
Expense items consist essentially of restructuring costs, in particular EUR 38 million in relation to the “INSPIRE” project
and EUR 10 million in respect of Solvay Benvic in Belgium.
(10) Charges on net indebtedness
EUR Million 2007 2008
Cost of borrowings -106 -138
Interest on lending and short-term deposits 23 26
Other gains and losses on net indebtedness 2 18
Charges on net indebtedness -82 -93
The average net indebtedness for 2008 amounts to EUR 1 634 million, above the average level of EUR 1 450 million in 2007.
Average interest charges on borrowings rose from 5.5 % in 2007 to 5.7 % in 2008 excluding the payment of the interest
due on the milestone paid to the former Fournier shareholders (EUR 10 million). Including the latter, they rose from 5.5 %
in 2007 to 6.1 % in 2008. The returns on cash and cash equivalents deteriorated from 4.7 % to 4.2 %.
Borrowing costs incorporated into the cost of assets amounted in 2008 to EUR 8 million (EUR 2 million in 2007).
The weighted average capitalization rate generally used is 5.8 % a year (4.3 % a year in 2007).
(11) Income/loss from available-for-sale investments
The loss from available-for-sale investments amounts to EUR -299 million, which results from:
• the impairment loss of EUR -309 million on the Fortis shares available for sale (15.7 million shares impaired, based on
the difference between the cost of EUR 20.6 /share and the market value of EUR 0.93 /share on December 31, 2008);
• dividends of EUR 9 million paid in 2008 by Fortis and of EUR 0.4 million by Sofi na (compared with EUR 20 million of
Fortis and EUR 4 million of Sofi na dividends last year).
(12) Income taxes and deferred taxes
(12a) Income taxes
Components of the tax charge
The tax charge on earnings consists of current and deferred tax.