Notes to the parent company financial statements

Tools

1. Other operating income

MEUR	2016	2015
Rental income	1	1
Services to Group companies	71	75
Profit on sales of fixed assets	1	1
Other	1	2
Total	74	78

2. Personnel expenses

MEUR	2016	2015
Wages and salaries	27	36
Pension costs	4	5
Other compulsory personnel costs	2	2
Total	33	43

Salaries and remunerations paid to senior management
The President and CEO and his deputy and members of the Board of Directors	4	5

The President and CEO has the right to retire at the age of 63 years. The members of the Board of Management are entitled to retire on reaching the statutory retirement age. One member of the Board of Management is entitled to retire earlier, on reaching 60 years of age.
The Company's Board of Directors decides the remunerations of the President and CEO and his immediate subordinates.
Additional information about Management remuneration can be found in Consolidated Financial Statements Note 29.
Personnel on average during the year	282	279

3. Depreciation and amortisation

MEUR	2016	2015
Depreciation and amortisation according to plan
Other long-term expenditure	5	7
Total depreciation according to plan	6	8

Tax depreciations	5	5
Depreciation difference	1	3

Depreciation difference
Depreciation difference on 1 January	3	6
Change in the depreciation difference	-1	-3
Depreciation difference on 31 December	2	3

4. Financial income and expenses

MEUR		2016	2015
Dividend income
	From Group companies	286	270
Total		286	270

Other interest income
	From Group companies	23	20
Total		23	21

Other financial income
	From Group companies	9	11
	From other companies	6	7
Total		15	17

Exchange gains and losses		2	4

Interest expenses
	To Group companies	-5	-4
	To other companies	-9	-10
Total		-14	-14

Other financial expenses
	To Group companies	-7	-10
	To other companies	-16	-13
Total		-22	-23

Financial income and expenses, total		290	276

6. Fixed assets

Intangible assets

MEUR		Other intangible assets	Other long-term expenditures	Construction in progress	Total 2016	Total 2015
Acquisition cost at January 1		1	124	1	126	136
Additions			1		1	2
Disposals		-1			-1	-12
Reclassifications			1	-1
Acquisition cost at December 31			126		126	126

Accumulated amortisation at January 1		-1	-112		-113	-119
Accumulated amortisation on disposals and other changes		1			1	12
Amortisation during the financial period			-5		-5	-7
Accumulated amortisation at December 31			-117		-117	-113

Carrying amount at 31 December 2016			9		9
Carrying amount at 31 December 2015			12	1		13


Tangible assets

MEUR	Land and water	Buildings and structures	Machinery and equipment	Other tangible assets	Total 2016	Total 2015
Acquisition cost at January 1	8	11	5	1	27	31
Additions			1		1	1
Disposals	-1		-1		-5	-5
Reclassifications
Acquisition cost at December 31	7	11	5	1	27	27

Accumulated depreciation at January 1		-10	-5	-1	-16	-21
Accumulated amortisation on disposals and other changes						5
Accumulated depreciation at December 31		-10	-5	-1	-16	-16

Carrying amount at 31 December 2016	7	1	1		10
Carrying amount at 31 December 2015	8	1	1			10


Shares and securities

MEUR			Shares in Group companies	Shares in other companies	Total 2016	Total 2015
Acquisition cost at January 1			950	2	951	952
Additions
Acquisition cost at December 31			950	2	951	951

Carrying amount at 31 December 2016			950	2	951
Carrying amount at 31 December 2015			950	2		951

7. Non-current receivables

MEUR	2016	2015
Receivables from Group companies
Loan receivables	103	114
Total	103	114

8. Current receivables from Group companies

MEUR	2016	2015
Trade receivables	7	6
Loan receivables	1 928	2 099
Derivatives	24	40
Prepaid expenses and accrued income	37	3
Total	1 996	2 148

9. Prepaid expenses and accrued income

MEUR	2016	2015
Derivatives	11	12
Other financial items	1	3
Income and other taxes		12
Insurance receivables	1	6
Other	2	2
Total	16	36

10. Shareholders' equity

MEUR	2016	2015
Share capital
Share capital on January 1	336	336
Share capital on December 31	336	336

Share premium reserve
Share premium reserve on January 1	61	61
Share premium reserve on December 31	61	61

Retained earnings
Retained earnings on January 1	1 053	1 003
Dividends paid	-237	-227
Result for the financial period	282	277
Retained earnings on December 31	1 097	1 053

Total shareholders' equity	1 494	1 450

Distributable equity	1 097	1 053

11. Liabilities

MEUR			2016	2015
Non-current
Interest-bearing			508	475
Total			508	475

Current
Non-interest-bearing			84	101
Interest-bearing			1 290	1 387
Total			1 374	1 487


Debt with maturity profile

2016	Current	Long-term
MEUR	<1 year	1-5 years	>5 years	Total
Loans from financial institutions	88	314	185	588
Loans from pension institutions	10	8		18
Total	99	322	185	606

2015	Current	Long-term
MEUR	<1 year	1-5 years	>5 years	Total
Loans from financial institutions	66	271	186	523
Loans from pension institutions	27	18		45
Total	93	289	186	568

12. Accrued expenses and deferred income

MEUR	2016	2015
Derivatives	44	29
Personnel costs	12	21
Interest and other financial items	3	8
Other	3	4
Total	62	62

13. Liabilities to Group companies

MEUR	2016	2015
Trade payables	6	5
Other current liabilities	1 191	1 164
Derivatives	9	18
Accrued expenses and deferred income	1	1
Total	1 207	1 189

14. Derivative financial instruments


MEUR	With external financial institutions	With Group companies	Total 2016
Nominal values of derivative financial instruments
Currency forwards, transaction risk	1 573	1 190	2 763
Interest rate swaps	165		165
Cross currency swaps	81		81
			3 009

Fair values of derivative financial instruments
Currency forwards, transaction risk	-22	18	-4
Interest rate swaps	-4		-4
Cross currency swaps	-10		-10
Total			-18


MEUR	With external financial institutions	With Group companies	Total 2015
Nominal values of derivative financial instruments
Currency forwards, transaction risk	2 165	1 646	3 811
Interest rate swaps	185		185
			3 996

Fair values of derivative financial instruments
Currency forwards, transaction risk	-18	22	4
Interest rate swaps	-4		-4
Total

Foreign currency forward contracts are against transactional risks and are matched against the hedged cashflows. Interest rate swaps are denominated in euros and their average interest-bearing period is 26 months. The average maturity for cross currency swaps is 53 months.

15. Collateral, contingent liabilities and other commitments

	2016	2015
MEUR	Debt in balance sheet	Debt in balance sheet
Guarantees and contingent liabilities
On behalf of Group companies	921	743
Total	921	743

Future nominal lease payments
Payable within one year	2	2
Payable after one year	13	16
Total	16	18

16. Related party loans and other commitments

There are no loans receivables from senior management and the members of the Board of Directors. No pledges or other commitments were given on behalf of senior management or shareholders. In Note 29 in Consolidated Financial Statements, related party disclosures are specified. Related parties comprise the Board of Directors, the President and CEO, the Board of Management as well as the associated companies and joint ventures. In Notes 8 and 13 in Parent Company financial statement, receivables and liabilities from Group companies are specified.

17. Auditors' fees and services

The following fees were paid to auditors and accounting firms for audits and other services.

In 2016, the AGM appointed the audit firm KPMG Oy Ab as Wärtsilä Corporation's auditor.

Auditors' fees

TEUR	2016	2015
Audit	158	191
Tax advisory	200	201
Other services	116	138
Total	474	530

Note

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