31. Segment information

The information about business segments has been prepared in accordance with the provisions of IFRS 8 “Operating segments”, which requires the information to be presented in a manner consistent with the procedures adopted by the Company’s management when taking operational decisions. Consequently, the identification of the operating segments and the information presented are defined on the basis of the internal reporting used for 2016 by the Company’s management for allocating resources to the different segments and for analysing the respective performances.

Following the operation of separating the natural gas business in Italy from Snam, which led to the transfer of the entire equity investment held by Snam S.p.A. in Italgas Reti S.p.A.to Italgas S.p.A., the business segments for which information is provided are natural gas transportation (“Transportation”), LNG regasification (“Regasification”) and natural gas storage (“Storage”). They relate to activities carried out predominantly by Snam Rete Gas, GNL Italia and Stogit.

As revealed on 13 October 2016, Snam announced significant changes to its organisation, effective from 1 November 2016. Any impacts of these organisational changes on the breakdown of the Snam Group business segments will be reflected in the segment reporting pursuant to IFRS 8 from the first quarter of 2017, following the definition of the internal reporting which will be used by company management.

The information by business segment as at 31 December 2016 is listed below, compared with the figures as at 31 December 2015.

Revenue is generated by applying regulated tariffs or market conditions. The revenue was generated entirely in Italy; costs were incurred almost entirely in Italy.