VII. Property, plant and equipment

The following tables show movements in “Property, plant and equipment” in 2015 and 2014.

(€m)

Land and buildings

Leasehold improvements

Plant and machinery

Industrial and commercial equipment

Assets to be transferred free of charge

Other

Assets under construction and payments on account

Total

Gross carrying amount

               

Balance at 1 January 2014

163,957

971,328

216,370

745,367

450,963

50,069

94,556

2,692,610

Change in consolidation scope

-

570

-

455

-

(13)

-

1,012

Exchange rate gains (losses)

1,218

80,802

2,188

38,575

-

498

8,982

132,263

Increase

908

11,590

2,545

17,789

8,399

1,273

141,511

184,015

Decrease

(167)

(88,052)

(13,483)

(40,715)

(75,435)

(1,141)

(474)

(219,467)

Other movements

723

64,282

4,077

47,181

8,221

1,948

(124,333)

2,099

Balance at 31 December 2014

166,639

1,040,520

211,697

808,652

392,148

52,634

120,242

2,792,532

Change in consolidation scope

-

(17,830)

-

(6,324)

-

(88)

(601)

(24,843)

Exchange rate gains (losses)

6,568

72,161

10,649

33,866

-

1,210

8,313

132,767

Increase

1,505

16,375

1,550

11,173

7,435

1,000

171,837

210,875

Decrease

(12,553)

(105,351)

(14,147)

(85,007)

(12,098)

(3,830)

(202)

(233,188)

Other movements

266

102,059

(6,591)

84,736

10,724

85

(189,837)

1,442

Balance at 31 December 2015

162,425

1,107,934

203,158

847,096

398,209

51,011

109,752

2,879,585

                 

Depreciation/Impairment losses

               

Balance at 1 January 2014

(84,125)

(674,088)

(171,967)

(576,022)

(358,322)

(45,549)

-

(1,910,073)

Change in consolidation scope

-

-

-

52

-

13

-

65

Exchange rate gains (losses)

(796)

(51,417)

(1,852)

(26,269)

-

(426)

-

(80,760)

Increase

(4,188)

(67,523)

(11,663)

(63,896)

(22,223)

(2,288)

-

(171,781)

Impairment losses

(837)

(2,080)

(1,047)

(1,814)

(4,304)

(52)

-

(10,134)

Decrease

167

87,791

13,387

39,880

75,396

1,128

-

217,749

Other movements

52

(1,148)

63

(1,659)

363

(366)

-

(2,695)

Balance at 31 December 2014

(89,727)

(708,465)

(173,079)

(629,728)

(309,090)

(47,540)

-

(1,957,629)

Change in consolidation scope

-

12,247

-

4,617

-

88

-

16,952

Exchange rate gains (losses)

(4,310)

(45,667)

(8,055)

(23,877)

-

(1,077)

-

(82,986)

Increase

(3,932)

(81,862)

(11,283)

(71,986)

(23,171)

(2,361)

-

(194,595)

Impairment losses

(546)

(5,347)

(2,960)

(543)

(3,133)

(27)

-

(12,556)

Decrease

10,748

105,240

12,942

84,031

12,077

3,827

-

228,865

Other movements

3

1,469

9,788

(13,645)

(5)

738

-

(1,652)

Balance at 31 December 2015

(87,764)

(722,385)

(172,647)

(651,131)

(323,322)

(46,352)

-

(2,003,601)

                 

Carrying amount

               

31 December 2014

76,912

332,055

38,618

178,924

83,058

5,094

120,242

834,903

31 December 2015

74,661

385,549

30,511

195,965

74,887

4,659

109,752

875,984

Investments in 2015 amounted to € 210,875k, while the net carrying amount of disposals was € 4,323k. The disposals generated net gains of € 4,788k. The directors’ report contains a more detailed analysis of capital expenditure. The change in scope of consolidation refers mainly to the sale of the last four Travel Retail contracts in North America to the World Duty Free group (see section 2.2.2, Disposals).

In addition to depreciation of € 194,595k, impairment testing of individual locations resulted in net impairment losses of € 12,556k, including the reversal of losses charged in previous years (up to historical amortized cost as of the reversal date) where the reasons for impairment no longer exist. Consistently with the method followed in 2014, impairment testing was based on the estimated future cash flows for each location (without incorporating any assumed efficiency gains), discounted at the average cost of capital, which reflects the cost of money and the specific business risk associated with each country.

Leasehold improvements refer to expenses incurred to set up or adapt leased premises and concessions. This includes costs for the development of locations managed at airports, at shopping centers in North America, and at several motorway locations.

In accordance with the financial method, this item includes the contractual value of the following property, plant and equipment held under finance leases:

 

31.12.2015

31.12.2014

(€m) 

Gross amount

Accumulated depreciation and impairment losses

Carrying amount

Gross amount

Accumulated depreciation and impairment losses

Carrying amount

Land and buildings

5,536

(3,623)

1,913

6,569

(4,467)

2,102

Assets to be transferred free of charge

5,108

(3,356)

1,752

5,108

(3,172)

1,936

Industrial and commercial equipment

688

(368)

320

1,841

(1,030)

811

Total

11,332

(7,347)

3,985

13,518

(8,669)

4,849

The financial payable for these goods amounts to € 5,675k and is included under “Other financial liabilities” (current) for € 639k (€ 666k at the end of 2014) and “Other financial liabilities” (non-current) for € 5,036k (€ 5,630k the previous year) (Notes XVII and XX). Future lease payments due after 31 December 2015 amounted to € 8,692k (€ 9,652k at the end of 2014).