Property, plant and equipment of €14,053 million (€13,533 million at 31 December 2010) comprise:
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31.12.2010 |
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(€ million) |
Net opening value (*) |
Amortisation and depreciation |
Disposals |
Other changes |
Net closing value |
Gross closing value |
Provision for amortisa- | |||||
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Land |
135 |
1 |
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1 |
137 |
137 |
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Buildings |
392 |
8 |
(12) |
(3) |
7 |
392 |
593 |
201 | ||||
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Plant and equipment (*) |
10,702 |
28 |
(461) |
(5) |
531 |
10,795 |
15,338 |
4,543 | ||||
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Industrial and commercial equipment |
63 |
17 |
(16) |
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1 |
65 |
206 |
141 | ||||
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Other assets |
14 |
1 |
(6) |
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3 |
12 |
85 |
73 | ||||
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Non-current assets under construction and payments on account |
1,672 |
1,062 |
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(1) |
(601) |
2,132 |
2,132 |
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12,978 |
1,117 |
(495) |
(9) |
(58) |
13,533 |
18,491 |
4,958 | ||||
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31.12.2011 |
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(€ million) |
Net opening value (*) |
Investments |
Amortisation and depreciation |
Disposals |
Other changes |
Net closing value |
Gross closing value |
Provision for amortisa- | ||
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Land |
137 |
2 |
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11 |
150 |
150 |
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Buildings |
392 |
3 |
(12) |
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17 |
400 |
598 |
198 | ||
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Plant and equipment (*) |
10,795 |
136 |
(452) |
(15) |
1,022 |
11,486 |
16,497 |
5,011 | ||
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Industrial and commercial equipment |
65 |
16 |
(17) |
(3) |
5 |
66 |
218 |
152 | ||
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Other assets |
12 |
1 |
(6) |
|
12 |
19 |
81 |
62 | ||
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Non-current assets under construction and payments on account |
2,132 |
994 |
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(1,194) |
1,932 |
1,932 |
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13,533 |
1,152 |
(487) |
(18) |
(127) |
14,053 |
19,476 |
5,423 | ||
Property, plant and equipment (€14,053 million) relate to natural gas transportation infrastructure (€11,755 million), storage (€1,984 million), distribution (€225 million) and regasification (€89 million).
Investments of €1,152 million16 refer to the natural gas transportation (€850 million), storage (€286 million), and distribution (€13 million) business segments, as well as to LNG regasification (€3 million).
The financial expenses capitalised during the year amounted to €37 million (€37 million in 2010). The interest rate used for the capitalisation of financial expenses is between 2.1% and 3.3% (between 2.6% and 3.1% in 2010).
Depreciation(€487 million) refers to economic and technical depreciation determined on the basis of the useful life of the assets or their remaining possible use by the company.
The main annual depreciation rates adopted are included in the following ranges:
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Annual depreciation rate (%) |
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Buildings |
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- Buildings |
2-2.5 or more, depending on residual life |
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Plant and equipment - Transportation |
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- Pipelines |
2 or more, depending on residual life |
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- Plants |
5 or more, depending on residual life |
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- Gas reduction/regulation plants |
5 or more, depending on residual life |
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Plant and equipment – Storage |
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- Pipes |
2-2.5 |
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- Treatment and compression stations |
4-5 or more, depending on residual life |
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- Storage wells |
1.66 |
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Plant and equipment – Regasification |
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- LNG plants |
4 or more, depending on residual life |
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Other plant and equipment |
2.5-12.5 |
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Metering devices |
5 or more, depending on residual life |
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Industrial and commercial equipment |
4-35 |
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Other assets |
10-25 |
Disposalsof €18 million primarily concern sections of pipelines and some components of compression stations (€15 million overall).
Other changes (-€127 million) relate to: (i) the adjustment of the timing of expenditure relating to charges for site dismantling and restoration in the natural gas storage segment (-€135 million) which involved an upward adjustment of 20 years (corresponding to the duration of any possible extensions) of the estimate of the amount of time required to discharge all obligations17 ; (ii) grants for the period (-€13 million); (iii) the change in inventory of piping purchased for investment purposes and not yet used in plant construction (€21 million).
Government grants for capital expenditure and grants from other parties reducing the net value of property, plant and equipment amount respectively to €75 million (€76 million at 31 December 2010) and €220 million (€211 million at 31 December 2010). At 31 December 2011, there are no uncollected government grants (€5 million at 31 December 2010).
The value of plant and equipment includes site dismantling and restoration costs totalling €22 million, relating mainly to natural gas storage sites (€18 million).
Summarised below are changes occurring in provisions for depreciation and impairment losses over the year:
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Provision for amortisation, depreciation and impairment losses |
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(€ million) |
31.12.2010 |
Increases |
Other changes |
31.12.2011 |
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Buildings |
201 |
12 |
(15) |
198 |
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Plant and equipment |
4,543 |
452 |
16 |
5,011 |
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Industrial and commercial equipment |
141 |
17 |
(6) |
152 |
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Other assets |
73 |
6 |
(17) |
62 |
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|
4,958 |
487 |
(22) |
5,423 |
Contractual commitments for the purchase of property, plant and equipment, and for the provision of goods and services related to their construction, are disclosed in Note 28 “Guarantees, commitments and risks”.
Property, plant and equipment by business segment
Property, plant and equipment are broken down by business segment as follows:
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(€ million) |
31.12.2010 |
31.12.2011 |
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Gross property, plant and equipment |
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Business segments |
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- Transportation |
15,400 |
16,225 |
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- Regasification |
124 |
128 |
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- Storage |
2,497 |
2,643 |
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- Distribution |
470 |
480 |
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Total |
18,491 |
19,476 |
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Provision for amortisation, depreciation and impairment losses |
|
|
|
- Transportation |
(4,072) |
(4,470) |
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- Regasification |
(35) |
(39) |
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- Storage |
(608) |
(659) |
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- Distribution |
(243) |
(255) |
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Total |
(4,958) |
(5,423) |
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Net property, plant and equipment |
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- Transportation |
11,328 |
11,755 |
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- Regasification |
89 |
89 |
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- Storage |
1,889 |
1,984 |
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- Distribution |
227 |
225 |
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|
13,533 |
14,053 |
16 The investments for the period are broken down by business segment in the “Business segment operating performance” section of the Directors’ report.
17 Electricity and Gas Authority Resolution ARG/gas 119/10 provides for a specific portion of revenue to be set aside for the remuneration of storage site restoration costs, taking into account the maximum duration of the concession (40 years from the date the concession was granted, including possible extensions), so as to enable full recovery of costs. Based on the provisions of IFRIC 1, “Changes in liabilities recognised for dismantling and restoration and similar liabilities”, the company has adjusted the estimated time required to extinguish obligations relating to charges for site dismantling and restoration to bring it into line with tariff remuneration. The impact of this adjustment on net profit, net of the tax effect, is around €20 million.
