12 Property, plant and equipment

Property, plant and equipment of €15,399 million (€14,851 million at 31 December 2013) breaks down as follows:

Property, plant and equipment (€15,399 million, compared with €14,851 million at 31 December 2013) relates mainly to transportation (€12,385 million), storage (€2,696 million), distribution (€226 million) and regasification (€88 million) infrastructure.

Investments¹⁸ (€913 million) refer mainly to the transportation (€664 million), storage (€229 million) and distribution segments (€12 million).

During the year, Snam capitalised €36 million of financial expenses (€34 million in 2013).

Depreciation (€530 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.

During the year, there were no changes in the estimated useful life of assets or in the depreciation rates applied and explained by category in Note 3 – “Measurement criteria – Property, plant and equipment”.

Capital contributions from government authorities and other entities (€76 million and €282 million; €75 million and €257 million respectively at 31 December 2013) are recorded as a deduction in the net value of property, plant and equipment.

Changes in the scope of consolidation of €29 million relate to the acquisition by Italgas S.p.A. of control of A.E.S.¹⁹

Disposals (€9 million) relate mainly to sections of pipelines and some components of compression stations.

Impairment losses and reversals (€6 million) refer essentially to the impairment of auxiliary piping in the transportation segment.

The value of plant and equipment includes site dismantling and restoration costs (€322 million), relating mainly to natural gas storage (€196 million) and transportation (€123 million) sites.

Other changes and reclassifications (€151 million) relate essentially to: (i) the change in estimated (discounted) costs for site restoration and dismantling (+€157 million) in the natural gas storage and transportation segments, which are offset by the recognition of a specific provision²⁰; (ii) the change in stocks of pipes and related accessory materials purchased for investment purposes and not yet used in the production of plants in the natural gas transportation segment (+€35 million); and (iii) grants for the period (−€31 million).

Contractual commitments to purchase property, plant and equipment, and to provide services related to the construction thereof, are reported in Note 24 – “Guarantees, commitments and risks”.

Property, plant and equipment by business segment

Pursuant to the provisions of IFRS 8 – “Operating segments”, a breakdown of property, plant and equipment by business segment appears below: