FINANCIAL AND ACCOUNTING INFORMATION Accounting principles are defined by the French in 2016) and release of provisions for €0.2 mil lion Autorité des Normes Comptables(ANC) regulation (€1.4 million in 2016). 2015-05 (see 2.7): Operating expenses amount to €25.6 mi l l ion •Real ized and unreal ized results arising from (€24.0 million in 2016) and mainly comprise fees and derivatives instruments are accounted in income other expenses for €5.6 million (€5.7 million in 2016), statement over the life of hedged items in order personnel costs and other charges for €4.6 million to match results arising from those underlying (€5.4 million in 2016), bank charges for €6.0 million contracts, related to the unused faci l ities under Senior Changes in fair value of derivatives are not Credit (€5.3 million in 2016), bonds issue costs for •recognized on the balance sheet unless the €9.3 million (€7.5 million in 2016), and depreciation recognition of such changes leads to a symmetrical and provisions for €0.1 million (€0.1 million in 2016). treatment of the hedged item. 3.2 Net financial income •Hedging gain or loss is reported in the same line Net financial expense amounts to €46.8 mil l ion item as the hedged item. (€241.7 million net income in 2016), comprising: 2.7 Change in accounting rules •€41.6 mil lion of financial income (€352.7 mil lion in 2016) relating to interests on loans to its As of January 1, 2017, Rexel adopted the ANC subsidiaries for an amount of €23.1 mil lion, net regulation 2015-05. This regulation relates to foreign exchange income for €2.4 mil l ion, the forwards contracts and hedging derivatives. This result of sales of Rexel’s own shares for €0.9 million new regulation is treated as a change in accounting and to other financial incomes for €15.2 million. rules as stated in 122-2 article of the Plan Comptable 2016 financial income also included an interim Général (PCG). However, according to the first time dividend received for €298.0 million. adoption provision of regulation 2015-05, Rexel decided to limit prior year restatement to ongoing •€88.4 million of financial expenses (€111.0 million hedging transactions. in 2016) mainly including interests of the senior unsecured notes for €53.0 mil lion, €24.7 mil lion The appl ication of this new regulation had no of redemption premiums associated with the significant impact on Rexel financial statements. repayment of the senior notes due 2020 and 2022, and other financial expenses and depreciation for 2.8 Key events of the period €10.7 million. Rexel entered into two refinancing transactions with the aim of extending its debt maturity profile 3.3 Non-recurring income and expenses and optimizing its overal l cost of financing. Rexel Non-recurring income and expenses amount to issued 2.625% €300 million senior notes due 2024 in €(1.5) million (€(4.1) million in 2016) and are related February 2017 and 2.125% €500 million senior notes to change in corporate management positions. due 2025 in November 2017. Proceeds received from these issuances were used to early repay the 3.4 Compensation of company officers remaining outstanding 5.25% US$500 million senior notes due 2020 representing US$330 mil l ion in Board attendance fees paid to company officers in principal amount and the 3.25% €500 million senior 2017 amount to €0.8 million (€0.5 million in 2016). notes due 2022. Compensation and indemnities paid to company officers in 2017 amount to €2.8 million (€4.8 million 3. Notes to the income statement in 2016). 3.1 Operating revenues and expenses 3.5 Income taxes In 2017, operating income amounts to €2.1 mil lion Under the group tax consolidation agreement, Rexel (€2.9 mil lion in 2016) in connection with services is liable for the payment of al l tax due by the tax provided to subsidiaries for €1.9 million (€1.5 million group. Each subsidiary recognizes its individual REXEL 2017 – REGISTRATION DOCUMENT 282