FINANCIAL AND ACCOUNTING INFORMATION wil l probably not reverse in the foreseeable future average number of ordinary shares outstanding and (iii) the initial recognition of assets or liabilities induring the period. Di luted earnings per share a transaction that is not a business combination and is calculated by adjusting the profit or loss that affects neither accounting nor taxable profit. attributable to ordinary shareholders and the The amount of deferred tax provided is based on weighted average number of ordinary shares the expected manner of realization or settlement of outstanding for the effects of al l dilutive potential the carrying amount of assets and liabilities, using ordinary shares, which comprise share options tax rates enacted or substantively enacted at the and free shares granted to employees. balance sheet date. A deferred tax asset is recognized only to the 4. Business combinations extent that it is probable that future taxable profits In 2017, the Group didn’t proceed to any business wil l be available to recover this asset. Deferred combination. tax assets are reduced to the extent that it is no longer probable that the related tax benefit wil l In 2016, Rexel acquired a 100% ownership interest be realized. Practical ly, this is achieved through a in Sofinther, a French €116 mi l l ion annual sales valuation al lowance recognized against deferred distribution company specializing in thermal, heating tax assets. and control solutions. This acquisition was completed on January 4, 2016 for a total consideration of Deferred tax assets and liabilities are offset when €81.6 million. As part of the purchase price allocation, there is a legally enforceable right to offset current the Group recognized customer relationships of tax assets and liabilities and when they relate to €23.4 million with a useful life of 8 years. Goodwill income tax levied by the same tax jurisdiction and arising on this acquisition amounted to €31.8 million. the Group intends to settle its current tax assets and Sofinther has been consol idated starting on its liabilities on a net basis. acquisition date. 5 Information as to the calculation of income tax on In addition, the Group acquired the following non- the profit for the periods presented is included in material entities in the first quarter of 2016: note 11. •Cordia, a French distributor of fire prevention 3.19 Segment reporting equipment and services; In accordance with IFRS 8 “Operating segments”, • Brohl & Appel l, a US company special ized in operating segments are based on the Group’s industrial automation. management reporting structure. The information is shown by geographic zone consistently with Group’s 5. Divestments internal organization. In 2017, as part of its divestment program, the Based on this structure, the reportable segments Group disposed of al l its operations in South East are: Asia including Thai land, Indonesia, Singapore, Vietnam, the Philippines, Macau and Malaysia. These • Europe divestments were completed in two separate sale •North America transactions as follows: • Asia-Pacific •On May 25, 2017, the Group completed the sale of Lenn International Pte Ltd, an Oil & Gas cable The Group’s financial reporting is reviewed monthly distributor based in Singapore, to its management by the Chief Executive Officer acting as the Chief for a consideration of €3.5 million. The divestment operating decision maker. loss was €11.1 million before tax (€10.1 million after tax). 3.20 Earnings per share The Group presents basic and diluted earnings per •Effective on December 19, 2017, Rexel sold to share data for its ordinary shares. American Industrial Acquisition Corporation, a private equity firm, its interest in Rexel South East Basic earnings per share is calculated by dividing Asia, a subsidiary control ling the overal l Rexel’s the profit or loss attributable to ordinary operations in South East Asia. Rexel contributed shareholders of the company by the weighted €26.6 mil lion in cash to the disposed entity at REXEL 2017 – REGISTRATION DOCUMENT 229