6.3.7Net Financing Costs

2015

2014

Interest income on loans & receivables

24

25

Interest income on Held-to-Maturity investments

1

1

Net gain on financial instruments at fair value through profit and loss

-

4

Net foreign exchange gain

-

1

Other financial income

0

-

Financial Income

25

31

Interest expenses on financial liabilities at amortised cost

(132)

(89)

Interest expenses on hedging derivatives

(61)

(68)

Interest addition to provisions

(2)

(5)

Net cash flow hedges ineffectiveness

(5)

(5)

Net foreign exchange loss

-

-

Impairment of financial assets

-

(29)

Other financial expenses

-

-

Financial Expenses

(200)

(196)

Net financing costs

(175)

(166)

The increase in interest expenses in 2015 is mainly related to interest paid on the facility of FPSO Cidade de Ilhabela upon commencement of production in November 2014.

The interest expenses are disclosed net of US$ 48 million capitalized interest (2014: US$ 54 million) related to FPSO projects under construction.

In 2014, the US$ 29 million impairment of financial asset was related to a dispute with a US-based client on a joint venture (Note 6.3.2 Operating segments). The financial asset remains impaired.