15 – Property, plant and equipment Machinery and technical equipment contain oil and gas deposits, including related wells, production facilities and further infrastructure, which are depreciated according to the unit of production method. (XLS:) Download Development of property, plant and equipment 2017 (million €) Land, land rights and buildings Machinery and technical equipment Thereof depreciation according to the unit of production method Miscellaneous equipment and fixtures Construction in progress Total Cost Balance as of January 1, 2017 11,257 49,893 7,180 4,437 5,989 71,576 Changes in scope of consolidation – 14 – – 1 15 Additions 171 1,292 450 272 2,285 4,020 Additions from acquisitions – 7 – 1 – 8 Disposals (131) (825) (17) (280) (36) (1,272) Transfers 367 2,635 890 128 (2,945) 185 Currency effects (495) (2,458) (563) (171) (495) (3,619) Balance as of December 31, 2017 11,169 50,558 7,940 4,387 4,799 70,913 Accumulated depreciation Balance as of January 1, 2017 5,969 35,655 3,711 3,308 231 45,163 Changes in scope of consolidation – 14 – – – 14 Additions 385 2,878 931 335 (12) 3,586 Disposals (95) (761) (3) (266) (32) (1,154) Transfers – (50) – (1) 53 2 Currency effects (194) (1,626) (310) (112) (24) (1,956) Balance as of December 31, 2017 6,065 36,110 4,329 3,264 216 45,655 Net carrying amount as of December 31, 2017 5,104 14,448 3,611 1,123 4,583 25,258 Additions to property, plant and equipment arising from investment projects amounted to €4,020 million in 2017. Material investments included the acetylene plant currently under construction as well as plants for the production of catalysts in Ludwigshafen, Germany. Additions also comprised the construction of an aroma ingredients complex in Kuantan, Malaysia, and the modification of production plants for plasticizers in Pasadena, Texas, which have already partly started up. Material investments were also made for the construction of oil and gas facilities and wells in Europe and South America. Furthermore, investments were particularly made at the sites in Ludwigshafen, Germany; Antwerp, Belgium; Shanghai, China; Freeport, Texas; Geismar, Louisiana; and Port Arthur, Texas. Government grants for the funding of investment measures reduced asset additions by €9 million. Acquisitions led to an increase in property, plant and equipment in the amount of €8 million primarily from the acquisition of GRUPO Thermotek in Monterrey, Mexico. In 2017, impairments of €262 million were included in accumulated depreciation. These pertained largely to machinery and technical equipment and resulted primarily from the full impairment of a production plant in the Chemicals segment due to overcapacities. The recoverable amount equaled value in use and the weighted average cost of capital rate before taxes was 10.27%. Depreciation also included impairments in the Oil & Gas segment, which were overcompensated by reversals in the same segment. These primarily concerned construction in progress. In total, reversals of impairments in additions to accumulated depreciation amounted to €182 million. Disposals of property, plant and equipment were largely attributable to the sale of the Bleaching Clay and Mineral Adsorbents businesses; the production site for electrolytes in Suzhou, China; the inorganic specialties business; and the leather chemicals business. For more information on divestitures, see Note 2.4 The transfers largely concerned the confirmed oil and gas deposits in the Maria field in Norway from intangible assets to machinery and technical equipment. Currency effects reduced property, plant and equipment by €1,663 million and arose mainly from the depreciation of the U.S. dollar relative to the euro. (XLS:) Download Development of property, plant and equipment 2016 (million €) Land, land rights and buildings Machinery and technical equipment Thereof depreciation according to the unit of production method Miscellaneous equipment and fixtures Construction in progress Total Cost Balance as of January 1, 2016 10,711 45,805 5,972 4,216 6,502 67,234 Changes in scope of consolidation (1) – – 2 – 1 Additions 183 1,300 309 203 2,536 4,222 Additions from acquisitions 77 54 – 18 6 155 Disposals (194) (760) (30) (213) (88) (1,255) Transfers 322 2,796 716 165 (3,145) 138 Currency effects 159 698 213 46 178 1,081 Balance as of December 31, 2016 11,257 49,893 7,180 4,437 5,989 71,576 Accumulated depreciation Balance as of January 1, 2016 5,637 32,965 2,827 3,152 220 41,974 Changes in scope of consolidation (1) – – – – (1) Additions 376 2,930 939 307 78 3,691 Disposals (100) (658) (28) (182) (73) (1,013) Transfers (1) 1 – 1 – 1 Currency effects 58 417 (27) 30 6 511 Balance as of December 31, 2016 5,969 35,655 3,711 3,308 231 45,163 Net carrying amount as of December 31, 2016 5,288 14,238 3,469 1,129 5,758 26,413 Additions to property, plant and equipment arising from investment projects amounted to €4,222 million in 2016. Material investments were primarily related to the construction of an integrated aroma ingredients complex in Kuantan, Malaysia, the TDI complex in Ludwigshafen, Germany, and the expansion of the dicamba plant in Beaumont, Texas, which were partially started up in 2016. Further material asset additions included the construction of an ammonia plant in Freeport, Texas, and oil and gas production facilities and wells in Europe and South America. In addition, investments for expansion purposes were particularly made at the sites in Ludwigshafen, Germany; Geismar, Louisiana; Port Arthur, Texas; and Antwerp, Belgium. Government grants of €1 million were deducted from asset additions. Due to acquisitions, property, plant and equipment rose by €155 million primarily from the acquisition of the global surface treatment provider Chemetall from Albemarle Corp., Charlotte, North Carolina. In 2016, impairments of €254 million were included in accumulated depreciation. These pertained largely to impairments of €133 million on machinery and technical equipment as well as buildings due to the new strategic direction of individual businesses in the Chemicals and Functional Materials & Solutions segments. The recoverable amount of these assets equals their value in use amounting to €72 million. The weighted average cost of capital rate before taxes applied ranged between 9.4% and 12.8%. In 2016, additions to accumulated depreciation contained reversals of impairments of €2 million. Disposals of property, plant and equipment were largely attributable to the sale of assets of the global polyolefin catalysts business to W.R. Grace & Co., Columbia, Maryland; the sale of the worldwide photoinitiator business to IGM Resins B.V., Waalwijk, Netherlands; the sale of the 25% share in the Byrding field to Statoil; and the sale of industrial coatings business to the AkzoNobel Group. Currency effects arose particularly from the appreciation of the U.S. dollar as well as the Brazilian real relative to the euro. back next