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15 Intangible assets

Intangible assets of €4,710 million (€4,593 million at 31 December 2012) comprise:

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31.12.2012

(€ million)

Net opening value

Invest­ments

Amor­tisa­tion, de­precia­tion and impair­ment losses

Disposals

Other changes

Net closing value

Gross closing value

Provision for amor­tisation and impair­ment losses (*)

(*)

Including impairment losses of €1 million.

(**)

The net book value at 31 December 2012 of expenses relating to the distribution service concession (€18 million) was reclassified from “Concessions, licences, trademarks and similar rights” to “Service concession agreements”.

Intangible assets with a finite useful life

 

 

 

 

 

 

 

 

- Service concession agreements (**)

3,618

321

(143)

(929)

900

3,767

6,004

2,237

- Industrial patent rights and intellectual property rights

87

5

(38)

(2)

70

122

663

541

- Concessions, licences, trademarks and similar rights (**)

686

 

(9)

 

(18)

659

735

76

- Non-current assets under construction and payments on account

44

57

 

 

(70)

31

31

 

- Other intangible assets

 

5

 

 

 

5

52

47

 

4,435

388

(190)

(931)

882

4,584

7,485

2,901

Intangible assets with an indefinite useful life

 

 

 

 

 

 

 

 

- Goodwill

9

 

 

 

 

9

9

 

 

4,444

388

(190)

(931)

882

4,593

7,494

2,901

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31.12.2013

(€ million)

Net opening value

Invest­ments

Amor­tisa­tion, de­precia­tion and impair­ment losses

Disposals

Other changes

Net closing value

Gross closing value

Provision for amor­tisation and impair­ment losses (*)

(*)

Including impairment losses of €1 million.

Intangible assets with a finite useful life

 

 

 

 

 

 

 

 

- Service concession agreements

3,767

319

(181)

(14)

(32)

3,859

6,242

2,383

- Industrial patent rights and intellectual property rights

122

10

(48)

 

57

141

737

596

- Concessions, licences, trademarks and similar rights

659

1

(2)

 

1

659

737

78

- Non-current assets under construction and payments on account

31

64

 

 

(58)

37

37

 

- Other intangible assets

5

 

 

 

 

5

53

48

 

4,584

394

(231)

(14)

(32)

4,701

7,806

3,105

Intangible assets with an indefinite useful life

 

 

 

 

 

 

 

 

- Goodwill

9

 

 

 

 

9

9

 

 

4,593

394

(231)

(14)

(32)

4,710

7,815

3.105

Concession agreements (€3,859 million) relate to natural gas distribution activities in Italy carried out under the concession system as assigned by local public authorities. Tenders for new natural gas distribution service concessions will no longer be issued by each municipality, but by the 177 multi-municipality minimum geographical areas (known as ATEMs) created by a dedicated Ministerial Decree, published in the Official Gazette in 2011.

Legislative Decree 164/00 stipulated that the new duration of the concessions, which must be put out to tender, may not exceed 12 years.

Industrial patent rights and intellectual property rights of €141 million (€122 million at 31 December 2012) mainly concern information systems and applications in support of operating activities.

Concessions, licences, trademarks and similar rights (€659 million) refer essentially to concessions for the natural gas storage business.

Intangible assets with an indefinite useful life consist only of the goodwill recognised in 2008 following the acquisition by Italgas of 100% of the shares of Siciliana Gas (€9 million).

Investments in intangible assets of €394 million (€388 million at 31 December 2012) refer mainly to: (i) the construction and upgrading of natural gas distribution infrastructure (€319 million); and (ii) investment projects in progress (€64 million), relating mainly to the development of information systems.

Other changes (-€32 million) relate essentially to: (i) grants for the period (-€46 million); and (ii) the acquisition of concessions to exercise natural gas distribution activities (+€14 million).

Government grants for capital expenditure and grants from other parties reducing the net value of intangible assets amounted respectively to €368 million (€343 million at 31 December 2012) and €365 million (€487 million at 31 December 2012) and essentially concern the natural gas distribution segment. At 31 December 2013, uncollected government grants amounted to €1 million (the same as at 31 December 2012).

The main amortisation rates adopted on an annual basis are the following:

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Annual amortisation rate (%)

Service concession agreements

 

 

 

Infrastructure:

 

- Gas distribution network

2

- Gas derivation plants

2.5

- Distribution metering equipment

5-7.5 or greater, depending on residual life

Concession expenses

8.3

Other intangible fixed assets

 

- Industrial patent rights and intellectual property rights

20-33

- Other intangible assets

20, or according to the duration of the contract

Existing contractual commitments for the purchase of intangible assets, and of services related to their development, are disclosed in Note 30, “Guarantees, commitments and risks”.

Intangible assets by business segment

Intangible assets are broken down by business segment as follows:

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(€ million)

31.12.2012

31.12.2013

Gross intangible assets

 

 

Business segments

 

 

- Transportation

423

456

- Regasification

2

3

- Storage

795

801

- Distribution

6,234

6,509

- Corporate

40

46

Total

7,494

7,815

Provision for amortisation and impairment losses

 

 

- Transportation

(345)

(369)

- Regasification

(2)

(2)

- Storage

(122)

(127)

- Distribution

(2,401)

(2,574)

- Corporate

(31)

(33)

Total

(2,901)

(3,105)

Net intangible assets

 

 

- Transportation

78

87

- Regasification

 

1

- Storage

673

674

- Distribution

3,833

3,935

- Corporate

9

13

 

4,593

4,710

Due to the nature of the activities carried out by the Group, or of regulated activities in the gas supply chain, the recoverable value of property, plant and equipment and intangible assets was defined in keeping with the estimated value of net invested capital recognised for such assets for tariff purposes (regulatory asset base, or RAB) by the Electricity and Gas Authority, net of flat-fee components18, the provision for employee severance pay (TFR) and grants received.

For the purposes of identifying cash-generating units (CGUs) and allocating any goodwill, in accordance with the segmentation defined by the Electricity and Gas Authority for the definition of return on assets, the CGUs are represented by the business units (BUs) that carry out regulated activities in the natural gas transportation, regasification, storage and distribution sectors. For the distribution sector, in view of the specific applicable regulation, the CGUs are identified with ATEMs.

The recoverable value of property, plant and equipment, including compulsory inventories, and intangible assets is around €23.7 billion19.

18 The RAB is the reference basis for determining service tariffs and, therefore, the cash flows generated by the assets. The value of the RAB is defined using the historical cost method, revalued for fixed capital, and on a flat-fee basis for working capital.

19 Estimated value as at 31 December 2013.

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