9. GOODWILL

Goodwill represents the difference between the amount paid for the acquisition and the net assets fair value of REN Atlântico, S.A. on the acquisition date under the natural gas business unbundling process. At 31 December 2014 Goodwill was as follows:

Percentage interest held Goodwill

Subsidiaries

Year of acquisition

Acquisition cost

%

Amount

2013

Increases

Decreases

2014

REN Atlântico , Terminal de GNL, S.A. 2006

32,580

100%

28,806

3,774

-

-

3,774

Impairment test of Goodwill

REN made the impairment test of goodwill at 31 December 2014 and 2013, at the cash generating unit level to which REN Atlântico belongs. The business of REN Atlântico is subject to a concession contract and regulated tariffs so that the recoverable amount was determined based on value-in-use calculations. The cash flow projections considered the expected regulatory terms in place for the remaining term of the concession (concession for a period of 40 years beginning on the 26 September 2006), which cash inflows associated to cash-generating unit correspond to the regulated remuneration obtained over the net book value of the underlying investments, which is decreasing along the projections from the year ended 2014 until end the of concession.

The cash flow was discounted considering an average market pre-tax interest rate, adjusted for the natural gas regasification activities risk, of 7.48% (post-tax discount rate of 5.54%, 5.79% in 2013).

Assumptions

Cash generation unit

Method

Cash flow

Growing factor

Discounted rate

REN Atlântico , Terminal de GNL, S.A.

DFC (Discounted Cash Flow)

Operating flow projected to the remaining concession period

Decreasing rate in accordance with the average rate of assets depreciation

7,48% (pre-tax) 5,54% (post-tax)

In accordance with the assumptions followed no impairment losses were noted in the caption “Goodwill”.

The Group made sensitivity analysis considering a variation of 10% on the return rate of the assets, and no impairment was identified.