13. Intangible assets
Intangible assets, which amount to €810 million (€5,275 million at 31 December 2015) break down as follows:
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31.12.2015 |
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|
Finite useful life |
Indefinite useful life |
|
||||||
(€ million) |
Service concession agreements |
Industrial patent rights and intellectual property rights |
Concessions, licences, trademarks and similar rights |
Other intangible |
Non-current assets under construction and payments on account |
Goodwill |
Total |
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|
|||||||||
Cost at 31.12.2014 |
6,858 |
808 |
741 |
54 |
44 |
9 |
8,514 |
||
Investments (*) |
321 |
5 |
|
16 |
84 |
|
426 |
||
Disposals (*) |
(37) |
(2) |
|
|
|
|
(39) |
||
Other changes |
(16) |
79 |
3 |
(1) |
(78) |
|
(13) |
||
Change in scope of consolidation |
138 |
|
|
|
|
|
138 |
||
Cost at 31.12.2015 |
7,264 |
890 |
744 |
69 |
50 |
9 |
9,026 |
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|
|
|
|
|
|
|
|
||
Provisions for amortisation and depreciation at 31.12.2014 |
(2,659) |
(649) |
(80) |
(49) |
|
|
(3,437) |
||
Amortisation and depreciation – continuing operations |
|
(39) |
(3) |
|
|
|
(42) |
||
Amortisation and depreciation – discontinued operations |
(230) |
(23) |
|
(6) |
|
|
(259) |
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Disposals (*) |
25 |
2 |
|
|
|
|
27 |
||
Other changes |
(6) |
|
|
|
|
|
(6) |
||
Change in scope of consolidation |
(33) |
|
|
|
|
|
(33) |
||
Provisions for amortisation and depreciation at 31.12.2015 |
(2,903) |
(709) |
(83) |
(55) |
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|
(3,750) |
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|
|
|
|
|
|
|
|
||
Provision for impairment losses at 31.12.2014 |
|
|
(1) |
|
|
|
(1) |
||
Provision for impairment losses at 31.12.2015 |
|
|
(1) |
|
|
|
(1) |
||
Net balance at 31.12.2014 |
4,199 |
159 |
660 |
5 |
44 |
9 |
5,076 |
||
Net balance at 31.12.2015 |
4,361 |
181 |
660 |
14 |
50 |
9 |
5,275 |
||
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31.12.2016 |
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|
Finite useful life |
Indefinite useful life |
|
||||||
(€ million) |
Service concession agreements |
Industrial patent rights and intellectual property rights |
Concessions, licences, trademarks and similar rights |
Other intangible assets |
Non-current assets under construction and payments on account |
Goodwill |
Total |
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|
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Cost at 31.12.2015 |
7,264 |
890 |
744 |
69 |
50 |
9 |
9,026 |
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Investments (*) |
258 |
|
|
3 |
75 |
|
336 |
||
Disposals (*) |
(39) |
|
|
|
|
|
(39) |
||
Other changes |
(39) |
89 |
11 |
7 |
(78) |
|
(10) |
||
Change in scope of consolidation |
(7,444) |
(332) |
|
(37) |
(27) |
(9) |
(7,849) |
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Cost at 31.12.2016 |
|
647 |
755 |
42 |
20 |
|
1,464 |
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|
|
|
|
|
|
|
|
||
Provisions for amortisation and depreciation at 31.12.2015 |
(2,903) |
(709) |
(83) |
(55) |
|
|
(3,750) |
||
Amortisation and depreciation – continuing operations |
|
(43) |
(3) |
|
|
|
(46) |
||
Amortisation and depreciation – discontinued operations |
(197) |
(24) |
|
(7) |
|
|
(228) |
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Disposals (*) |
23 |
|
|
|
|
|
23 |
||
Other changes |
9 |
(12) |
(7) |
(4) |
|
|
(14) |
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Change in scope of consolidation |
3,068 |
269 |
|
24 |
|
|
3,361 |
||
Provisions for amortisation and depreciation at 31.12.2016 |
|
(519) |
(93) |
(42) |
|
|
(654) |
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|
|
|
|
|
|
|
|
||
Provision for impairment losses at 31.12.2015 |
|
|
(1) |
|
|
|
(1) |
||
Other changes |
(1) |
|
1 |
|
|
|
|
||
Change in scope of consolidation |
1 |
|
|
|
|
|
1 |
||
Provision for impairment losses at 31.12.2016 |
|
|
|
|
|
|
|
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Net balance at 31.12.2015 |
4,361 |
181 |
660 |
14 |
50 |
9 |
5,275 |
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Net balance at 31.12.2016 |
|
128 |
662 |
|
20 |
|
810 |
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Industrial patent rights and intellectual property rights of €128 million (€181 million at 31 December 2015) mainly concern information systems and applications in support of operating activities.
Concessions, licences, trademarks and similar rights (€662 million compared with €660 million at 31 December 2015) refer essentially to concessions for natural gas storage activities (€656 million) and, specifically to the concessions of Settala (€226 million), Sergnano (€126 million), Fiume Treste (€91 million) and Brugherio (€56 million). The value of the storage concessions is represented by the reserves of natural gas in the fields (“cushion gas”21).
Investments (€336 million) mainly relate to continuing operations (€52 million) and refer mainly to the transportation (€42 million)22 and discontinued operations (€284 million) segments.
The changes in the scope of consolidation (€4,487 million, net of the related provisions for depreciation, amortisation and impairment losses) refer to the deconsolidation of the assets of Italgas Reti S.p.A. following the loss of control after the transaction separating the natural gas distribution business from Snam S.p.A.
Amortisation of continuing operations (€46 million) refers to economic and technical amortisation determined on the basis of the finite useful life of the intangible assets or their remaining possible use by the Company.
Due to the nature of the activities carried out by the Group, i.e. 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 AEEGSI, net of flat-fee components23, 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 AEEGSI for the definition of the return on assets, the CGUs are represented by the business units (BUs) that carry out regulated activities in the natural gas transportation, regasification and storage sectors.
As defined above, the recoverable value of property, plant and equipment, including compulsory inventories, and intangible assets is around €19 billion24.
Other changes (€24 million, net of the depreciation and impairment provisions) mainly consist of grants during the period (€23 million).
Contractual commitments to purchase intangible assets, and to provide services related to the development thereof, are reported in Note 23 – “Guarantees, commitments and risks”.
Intangible assets by business segment
Intangible assets by business segment, break down as illustrated below:
| Download XLS (17 kB) |
(€ million) |
31.12.2015 |
31.12.2016 |
Historical cost |
9,026 |
1,464 |
Transportation |
530 |
573 |
Storage |
819 |
824 |
Distribution |
7,615 |
|
Regasification |
3 |
4 |
Corporate and other activities |
59 |
63 |
Provision for amortisation, depreciation and impairment losses |
(3,751) |
(654) |
Transportation |
(426) |
(458) |
Storage |
(140) |
(147) |
Distribution |
(3,142) |
|
Regasification |
(3) |
(3) |
Corporate and other activities |
(40) |
(46) |
Net balance |
5,275 |
810 |
Transportation |
104 |
115 |
Storage |
679 |
677 |
Distribution |
4,473 |
|
Regasification |
|
1 |
Corporate and other activities |
19 |
17 |
21 Cushion gas is not depreciated.
22 Investments by business segment are shown in the “Business segment operating performance” section of the Directors’ Report.
23 The RAB is used to determine the service tariffs and, therefore, the cash flows generated by the assets. The RAB value is defined through the historical cost method revalued as far as Fixed capital is concerned and on a flat-fee basis for the Working capital, severance pay and, with reference to the storage sector, the site dismantling and restoration provision.
24 Estimated value as at 31 December 2016.