Tiscali 2008 Annual Report Download - page 79

Restructuring costs and other writedowns (note 8)
EUR (000) 31.12.2008 31.12.2007
Restructuring costs and other writedowns 78,853 39,686
Total 78,853 39,686
Restructuring costs and other writedowns, amounting to EUR
78.8 million, are mainly attributable to the following factors:
•restructuring charges of the UK subsidiaries for EUR 42.1
million, essentially relating to the restructuring of the Pipex
division business, as well as the reversal of the Pipex
Internet and Bulldog brands for EUR 7.9 million;
•restructuring charges of the Italian and Parent Company
activities for a total of EUR 11.5 million, which reflect the
corporate reorganization plan in agreement with the Trade
Union Organizations;
•the writedown of tangible assets (EUR 3.1 million) and
intangible assets (EUR 8.8 million) carried out by the
subsidiary Tiscali Italia S.p.A (see the notes relating to
changes in assets:
Intangible assets (note 15) on page 81
and
Properties, plant and machinery (note 16) on page 82.
Other atypical (income) Charges (note 10)
No other atypical income or charges were recorded during the year.
Financial income (Charges) (note 9)
Net financial income (charges)
A breakdown of net financial income (charges) for the year, presenting
a negative balance of EUR 96.5 million, is provided below.
EUR (000) 31.12.2008 31.12.2007
Financial income
Interest on bank deposits 4,993 2,823
Interest income 1,792 1,403
Other financial income 721 13
Total 7,506 4,239
Financial charges
Interest on bonds 2,997 59
Interest and other charges due to banks 57,884 77,245
Other financial charges 43,093 (427)
Total 103,974 76,877
Net financial income (charges) (96,468) (72,638)
The item Financial income mainly includes interest income on
bank deposits for EUR 4.9 million.
The item financial charges totalling EUR 103.9 million essentially
comprises the following elements:
•impact of the conversion of the convertible bond, on 15
September 2008, amounting in total to EUR 11 million,
of which EUR 8 million deriving from the reversal of the
fair value of the early conversion options and EUR 3 million
attributable to interest expense on the loan.
•bank interest expense on the Banca Intesa San Paolo &
JP Morgan loan for around EUR 54 million, plus other
interest and bank charges totalling EUR 8 million;
•interest expense on finance leases for EUR 6.3 million, of
which EUR 1.5 million attributable to the UK subsidiaries
and EUR 4.8 million attributable to Tiscali Italia S.p.A.;
•interest expense on the shareholders’ loan (Andalas) for
EUR 2.7 million;
•effects of the valuation at fair value of the IRS relating to
the Banca Intesa San Paolo & JPMorgan debt, which
presents a negative balance of EUR 10.8 million;
•interest expense on the residual debt due to the former
shareholders of VNL for EUR 6.4 million;
•interest expense on trade payables totalling EUR 4.7 million.
Other net financial income (charges)
The item Other net financial income (charges) presented a
zero balance in the period, while at 31 December 2007 the
balance came to EUR 17.9 million and included the refinancing
costs linked to the transactions with Silver Point (EUR 13.3
million, essentially relating to the early paying off of the loan)
and with Banca Intesa SanPaolo (EUR 4.5 million) relating to
the bridging loan on the sale in the Netherlands.
EUR (000) 31.12.2008 31.12.2007
Other net financial income (charges) - (17,881)
Total - (17,881)
Income taxes (note 11)
EUR (000) 31.12.2008 31.12.2007
Current taxes 792 2,272
Deferred taxes 64,092 (19,796)
Net taxes for the year (64,884) 17,525
Current taxes are mainly represented by IRAP (regional business
tax) payable by the Italian companies, while the tax liability
referring to deferred taxation represents the reversal of the
portion of the same not considered recoverable on the basis
of updated estimates.
The item Deferred taxes includes the following elements:
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CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES