Right-of-use assets and lease liabilities

12 Months Ended

Dec. 31, 2023

Right-of-use assets and lease liabilities

Right-of-use assets and lease liabilities

13 Right-of-use assets and lease liabilities

(€ million)	Floating production storage and offloading vessels (FPSO)		Drilling rig		Naval facilities and related logistic bases for oil and gas transportation		Motorway concessions and service stations		Oil and gas distribution facilities		Office buildings		Vehicles		Other		Total
2023
Net carrying amount - beginning of the year	2,142		148		682		457		19		595		42		361		4,446
Additions	14		570		402		133		19		110		14		322		1,584
Depreciation^(a)	(145	)	(219	)	(315	)	(74	)	(18	)	(125	)	(12	)	(65	)	(973	)
Impairments					(3	)			(2	)					(36	)	(41	)
Reversals					3										2		5
Currency translation differences	(71	)	(8	)	(5	)	4				(2	)			(7	)	(89	)
Changes in the scope of consolidation											3				10		13
Other changes	37		(42	)	(40	)	(28	)	(1	)	(1	)	(27	)	(9	)	(111	)
Net carrying amount - end of the year	1,977		449		724		492		17		580		17		578		4,834
Gross carrying amount - end of the year	2,409		985		1,593		822		81		1,039		47		826		7,802
Provisions for depreciation and impairment	432		536		869		330		64		459		30		248		2,968
2022
Net carrying amount - beginning of the year	2,667		183		575		454		14		618		48		262		4,821
Additions	1,342		189		530		76		28		108		21		110		2,404
Depreciation ^(a)	(226	)	(197	)	(303	)	(70	)	(13	)	(130	)	(21	)	(53	)	(1,013	)
Impairments					(5	)			(5	)			(1	)	(7	)	(18	)
Reversals					14												14
Currency translation differences	239		12		10		3				3						267
Changes in the scope of consolidation	(1,878	)	(34	)	(39	)					(1	)			73		(1,879	)
Other changes	(2	)	(5	)	(100	)	(6	)	(5	)	(3	)	(5	)	(24	)	(150	)
Net carrying amount - end of the year	2,142		148		682		457		19		595		42		361		4,446
Gross carrying amount - end of the year	2,507		516		1,360		734		87		1,010		86		562		6,862
Provisions for depreciation and impairment	365		368		678		277		68		415		44		201		2,416

(a) Before capitalization of depreciation of tangible assets

Right-of-use assets (RoU) of €4,834 million related: (i) for €2,959 million (€2,653 million at December 31, 2022) to the Exploration & Production segment and mainly comprised leases of certain FPSO vessels hired in connection with operations at offshore development projects in Ghana (OCTP) and Area 1 in Mexico with an expected term ranging between 13 and 17 years, including a renewal option as well as multi-year leases of offshore drilling rigs; (ii) for €965 million (€800 million at December 31, 2022) to the Enilive, Refining and Chemicals segment relating to highways concessions to market fuels, land leases, leases of service stations for the sale of oil products, leasing of vessels for shipping activities and the car fleet dedicated to the car sharing business; (iii) for €519 million (€548 million at December 31, 2022) to the Corporate and Other activities segment mainly regarding property rental contracts.

The increase recorded in 2023 mainly referred to: (i) the Exploration & Production segment for €1,023 million relating to rental of drilling rigs (€570 million) and vessels and related logistics equipments for Oil & Gas transport (€167 million); (ii) the Enilive and Refining business line for €408 million, relating in particular to lease of vessels for shipping and storage activities of Eni Trade & Biofuels SpA (€220 million), new contracts and extension of existing contracts relating motorway concessions, land leases, service station leases and the car fleet dedicated to the car sharing business (€146 million); (iii) to the Corporate and Other activities segment for €63 million relating in particular to leasing of assets for staff activities (€44 million).

The main leasing contracts signed for which the asset is not yet available concern: (i) a contract with a nominal value of €437 million relating to leasing of office buildings with an expiry date of 20 years including an extension option of 6 years; (ii) storage capacity and time charter vessels rental contracts of €131 million.

Main future cash outflows potentially due not reflected in the measurements of lease liabilities related to: (i) options for the extension or termination of lease for office buildings of €1,177 million; (ii) extension options related to ancillary assets in the upstream business for €545 million; (iii) extension options related to service stations for the sale of oil products of €133 million.

Liabilities for leased assets were as follows:

(€ million)	Current portion of long-term lease liabilities		Long-term lease liabilities		Total
2023
Carrying amount at the beginning of the year	884		4,067		4,951
Additions			1,584		1,584
Decreases	(949	)	(14	)	(963	)
Currency translation differences	(16	)	(81	)	(97	)
Changes in the scope of consolidation	1		12		13
Other changes	1,208		(1,360	)	(152	)
Carrying amount at the end of the year	1,128		4,208		5,336
2022
Carrying amount at the beginning of the year	948		4,389		5,337
Additions			2,401		2,401
Decreases	(980	)	(14	)	(994	)
Currency translation differences	43		242		285
Changes in the scope of consolidation	(299	)	(1,654	)	(1,953	)
Other changes	1,172		(1,297	)	(125	)
Carrying amount at the end of the year	884		4,067		4,951

Lease liabilities related for €480 million (€494 million at December 31, 2022) to the portion of the liabilities attributable to joint operators in Eni-led projects which will be recovered through the mechanism of the cash calls.

Total cash outflows for leases consisted of the following: (i) cash payments for the principal portion of the lease liability for €963 million; (ii) cash payments for the interest portion of €255 million.

Lease liabilities stated in U.S. dollars and euro amounted to €3,573 million and €1,608 million, respectively.

Other changes in right-of-use assets and lease liabilities essentially related to early termination or renegotiation of lease contracts.

Liabilities for leased assets with related parties are described in note 36 — Transactions with related parties.

The amounts recognised in the profit and loss account consist of the following:

(€ million)	2023		2022		2021
Other income and revenues
Income from remeasurement of lease liabilities	17		6		18
	17		6		18
Purchases, services and other
Short-term leases	59		113		85
Low-value leases	37		27		31
Variable lease payments not included in the measurement of lease liabilities	20		14		14
Capitalized direct cost associated with self-constructed assets - tangible assets	(5	)	(5	)	(4	)
	111		149		126
Depreciation and impairments
Depreciation of RoU leased assets	973		1,013		928
Capitalized amortization of RoU leased assets - tangible assets	(199	)	(186	)	(110	)
Impairments of RoU leased assets	41		18		59
Reversals of RoU leased assets	(5	)	(14	)
	810		831		877
Finance income (expense) from leases
Interests on lease liabilities	(267	)	(315	)	(304	)
Capitalized finance expense of RoU leased assets - tangible assets	11		8		5
Net currency translation differences on lease liabilities	19		(4	)	(34	)
	(237	)	(311	)	(333	)