Notes to the financial statements
note 14 Property, plant and equipment
Movements in property, plant and equipment for 2012 are shown below:
Amounts in NOK million planes etc.Ships, air- Machinery, vehicles Buildings Land Under con-struction developmentFields under
Production plant, inclu-
ding wells Total
Cost balance as at 1 January 2012 9 527 1 234 1 069 925 351 803 95 14 005
Acquisitions through business combination 1 2 783 33 - - - 819
Other acquisitions 1) 2 004 113 13 1 265 2 576 776 5 747
Other disposals (405) (21) - - - (418) - (844)
Reclassification from intangible assets and from under construction 142 171 15 (13) (315) 202 - 202
Effect of movements in foreign exchange (562) (51) (35) (8) (10) - - (668)
Cost balance as at 31 December 2012 10 706 1 448 1 844 937 290 3 164 871 19 261
Accumulated depreciation and impairment losses as at 1 January 2012 (2 691) (804) (576) (38) (75) - (47) (4 231)
Depreciation charge of the year (633) (127) (37) (4) 30 - (82) (854)
Impairment (83) - (44) - (25) (1 800) (164) (2 115)
Other disposals 292 19 - - (30) - - 281
Effect of movements in foreign exchange 162 33 19 2 4 - - 220
Accumulated depreciation and impairment losses as at 31 December 2012 (2 953) (879) (638) (40) (96) (1 800) (294) (6 699)
Carrying amount as at 31 December 2012 7 754 570 1 206 897 194 1 364 577 12 562
Investment not paid 7 - - - 5 - 496 508
Book value of leasing agreements recorded in the balance sheet - - - - -
1) Capitalised interest in 2012 amount to NOK 13 million.
Specification by company as at 31 December 2012:
Amounts in NOK million planes etc.Ships, air- Machinery, vehicles Buildings Land Under con-struction developmentFields under
Production plant, inclu-
ding wells Total
Industrial holdings:
Det norske oljeselskap - 52 - - - 1 364 577 1 993
Ocean Yield 6 389 1 - - 69 - - 6 459
Aker BioMarine 423 230 - - - - - 652
Aker Seafoods 371 103 137 2 - - - 614
Total industrial holdings 7 183 385 137 2 69 1 364 577 9 718
Financial investments:
Converto Capital Fund 294 170 234 74 24 - - 796
Aker ASA and holding companies 148 13 13 2 - - - 176
Other operations and eliminations 128 2 822 819 101 - - 1 872
Carrying amount as at 31 December 2012 7 754 570 1 206 897 194 1 364 577 12 562
Introduction
Total property, plant and equipment amounted to NOK 12 562 million at end of 2012, a change of NOK 2 788 million from end of 2011
Ships, airplanes and similar totaling NOK 7 754 million at end of 2012, can mainly be attributed to ships within the business segments Ocean Yield, Aker BioMarine, Aker Seafoods and Converto Capi- tal Fund (Ocean Harvest) of NOK 6 389 million, NOK 423 million, NOK 371 million and NOK 294 million respectively. In addition, the book value of Antarctic Navigator is NOK 167 million at end of 2012.
The changes of NOK 2 788 million in 2012, stem from investments in ships in Ocean Yield and Aker Seafoods.
Land totaling NOK 897 million at end of 2012 is mainly located on Fornebu outside Oslo. The changes in 2012 amounts to NOK10 million.
Building totaling NOK 1 206 million is attributa- ble to buildings in Converto Capital Fund’s subsidi- ary Aker Philadelphia Shipyard’s facility in Philadel- phia, fish processing facilities in Norway and France, buildings owned by Fornebuporten and buildings owned by the subsidiary Aker Seafoods.
The change in 2012 of NOK 713 million is pri- marily attributable to the purchase of buildings by Fornebuporten.
Det norske oljeselskap has fields under develop- ment and production plant including wells of NOK 1 364 million and NOK 577 million respectively. The change in 2012 is attributable to investments that offset some of the sales and write-downs.
Machinery and vehicles totaling NOK 570 million comprise primarily of fishing equipment in Aker Bio-
Marine and Aker Seafoods and equipment in Con- verto Capital Fund’s subsidiaries Aker Philadelphia and Norway Seafoods.
Change in 2012 is NOK 140 million.
Ships, airplane etc.
The investment in ships of NOK 2 004 million is mainly attributable to Ocean Yield purchase of Lewek Connector of NOK 1 883 million (USD 315 million) and NOK 100 million in Aker BioMarine in connection with rebuilding of Antarctic Sea and Saga Sea.
An impairment loss in 2012 of NOK 83 million is primarily attributable to the impairment of Antarctic Navigator of NOK 44 million to NOK 167 million (USD 30 million) and FPSO-candidate (SMART 2) in Aker Floating Production of NOK 34 million.
The FPSO-candidate (SMART 2) was sold in 2012 for NOK 65 million (USD 11 million), NOK 34 million below book value at the beginning of the year.
Depreciation in 2012 was NOK 633 million. The Hull’s depreciation plan is between 20 and 25 years, while machinery and equipment on board is between 5 year and 10 years.
Machinery, vehicles
Investment in machinery and vehicles of NOK 113 million is mainly attributable to investments made by Aker Philadelphia Shipyard of NOK 47 million and smaller investments made in Aker Seafoods, Aker BioMarine, Norway Seafoods and Det norske oljeselskap.
Depreciation in 2012 of NOK 127 million primar- ily comprise of NOK 28 million in Aker BioMarine, NOK 18 million in Det norske oljeselskap, NOK 18 million in Aker Seafoods and NOK 56 million in companies owned by Converto Capital Fund.
Land and buildings
The acquisition of subsidiaries and investment in land and building totaling NOK 829 million is mainly attributable to the Real estate investment by Fornebuporten.
An impairment of NOK 44 million in 2012 is attributable to the subsidiary Norway Seafoods’ assessment of the value of the company’s opera- tions in France following a sales agreement entered into in January 2013.
Land is not depreciated, while buildings depreci- ation plan is between 20 and 50 year.
Under construction
This year’s investment is NOK 265 million and is attributable to investments by Fornebuporten of NOK 96 million, advance payments on vessels under construction in Ocean Yield and the rebuild- ing of Antarctic Sea in Aker BioMarine of NOK 96 million.
Fields under development
Fields under development in Det norske oljesel- skap is Jette, and this year’s investment is NOK 2 576 million.
The company experienced technical challenges with the completion of the first production well on the Jette field. As a result, the company revised the
development drilling plan. The revised plan results in higher drilling costs and reduced estimated recoverable reserves compared to the original plan. This causes reduced profitability of the field. Conse- quently, Det norske performed an impairment assessment and recorded an impairment charge in the third quarter of NOK 1 881 million before tax.
Production plant, including wells
Production plant in Det norske oljeselskap can mainly be attributed to the Jotun field. This year’s investment is NOK 776 million, of which NOK 495 million is accrued removal costs.
During the year the subsidiary Det norske olje- selskap’s fixed assets related to the producing fields Glitne and Jotun were impaired with NOK 164 million before tax. The impairment was mainly due to the increase in the estimate of the abandonment provision.
Effect of exchange rate fluctuations
The effect of exchange rate fluctuations accounts for NOK 448 million and is mainly attributable to the fluctuations in the USD/NOK ratio for the sub- sidiaries Aker Floating Production, Connector and Aker Philadelphia Shipyard. Based on the value recognised in the balance on 31 December 2012 a 10 per cent decline of the USD exchange rate will amount to a reduction in the value of property, plant and equipment of NOK 0.6 billion.
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Movements in property, plant and equipment for 2011 are shown below:
Amounts in NOK million planes etc.Ships, air- Machinery, vehicles Buildings Land Under con-struction developmentFields under
Production plant, inclu-
ding wells Total
Cost balance as at 1 January 2011 20 061 1 418 1 090 123 146 - - 22 837
Acquisitions through business combination - 54 - - - 336 92 482
Other acquisitions 1) 111 76 8 800 195 266 4 1 459
Sale of operations (10 429) (23) (1) - - - - (10 452)
Other disposals (6) (299) (37) - 6 - (1) (337)
Reclassification from intangible assets and from under construction - - - 202 - 202
Effect of movements in foreign exchange (209) 8 9 2 4 - - (186)
Cost balance as at 31 December 2011 9 527 1 234 1 069 925 351 803 95 14 005
Accumulated depreciation and impairment losses as at 1 January 2011 (2 436) (996) (555) (32) (23) - - (4 043)
Depreciation charge of the year (627) (123) (36) (4) 4 - (17) (803)
Impairment (112) - - - (39) - (30) (181)
Sale / disposal of operations 587 24 - - - - - 611
Other disposals (24) 298 20 - - - - 294
Effect of movements in foreign exchange (79) (7) (4) (1) (17) - - (108)
Accumulated depreciation and impairment losses as at 31 December 2011 (2 691) (804) (576) (38) (75) - (47) (4 231)
Carrying amount as at 31 December 2011 6 836 430 493 887 276 803 48 9 774
Book value of leasing agreements recorded in the balance sheet - - - - - - - -
1) Capitalised interest in 2011 amount to NOK 0 million
Specification by company as at 31 December 2011:
Amounts in NOK million
Ships, air- planes etc.
Machinery,
vehicles Buildings Land
Under con- struction Fields under development Production plant, inclu-
ding wells Total
Industrial holdings:
Det norske oljeselskap - 51 - - - 803 48 902
Aker BioMarine 245 89 - - 255 - - 590
Total industrial holdings 245 140 - - 255 803 48 1 492
Financial investments:
Converto Capital Fund 756 269 444 86 21 - - 1 575
Aker ShipLease 1 438 - - - - 1 438
Aker Floating Production 3 966 1 - - - - - 3 967
Aker ASA and holding companies 158 19 14 2 - - - 192
Other operations and eliminations 274 2 36 800 - - - 1 111
Carrying amount as at 31 December 2011 6 836 430 493 887 276 803 48 9 774