21. Property, plant and equipment

Leases

As of 30 September 2018, property, plant and equipment totalling €5,314 million (30/9/2017: €6,822 million) was recorded. The development of property, plant and equipment is shown in the following table:

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€ million	Land and buildings	Other plant, business and office equipment	Assets under construction	Total
Acquisition or production costs
As of 1/10/2016	9,248	4,818	177	14,243
Currency translation	−38	−52	−1	−90
Additions to consolidation group	34	25	2	61
Additions	125	189	256	571
Disposals	−229	−183	−13	−425
Reclassifications in accordance with IFRS 5	−3	−2	0	−5
Transfers	84	131	−226	−11
As of 30/9 – 1/10/2017	9,223	4,927	195	14,344
Currency translation	−138	−88	−5	−231
Additions to consolidation group	0	0	0	0
Additions	178	169	315	662
Disposals	−248	−238	−10	−496
Reclassifications in accordance with IFRS 5	−2,134	−1,157	−56	−3,346
Transfers	−53	315	−282	−19
As of 30/9/2018	6,828	3,928	158	10,914
Depreciation
As of 1/10/2016	4,124	3,122	17	7,264
Currency translation	−24	−28	0	−51
Additions, scheduled	306	291	0	597
Additions, impairment	37	9	0	46
Disposals	−153	−168	−7	−327
Reclassifications in accordance with IFRS 5	0	−1	0	−1
Reversals of impairment losses	−2	−1	0	−3
Transfers	2	−3	0	−2
As of 30/9 – 1/10/2017	4,290	3,221	11	7,522
Currency translation	−39	−47	−1	−86
Additions, scheduled	287	302	0	589
Additions, impairment	22	11	1	34
Disposals	−153	−228	−1	−382
Reclassifications in accordance with IFRS 5	−1,259	−814	0	−2,073
Reversals of impairment losses	−3	0	0	−3
Transfers	−79	78	0	−1
As of 30/9/2018	3,066	2,524	10	5,600
Carrying amount as of 1/10/2016	5,124	1,695	160	6,979
Carrying amount as of 30/9/2017	4,932	1,705	184	6,822
Carrying amount as of 30/9/2018	3,763	1,404	148	5,314

The decline in property, plant and equipment of €1,508 million was mainly the result of reclassifications of property, plant and equipment to assets held for sale in conjunction with the disposal of the hypermarket business in the amount of €1,253 million. In addition, negative currency effects of €144 million (2016/17: €−39 million) and real estate disposals of €95 million (2016/17: €−77 million) resulted in a reduction in property, plant and equipment.

Impairments of €34 million (2016/17: €46 million) were recognised in the ongoing financial year. These primarily effect the hypermarket business for sale due to the negative sales and earnings development.

Restrictions on titles in the form of liens and encumbrances for items of property, plant and equipment amounted to €19 million, of which €7 million related to discontinued operations (30/9/2017: €22 million; of which discontinued operations: €10 million).

Contractual commitments for the acquisition of property, plant and equipment in the amount of €88 million were entered into, including €4 million for discontinued operations (30/9/2017: €128 million; of which discontinued operations: €3 million).

Up to 1 year

1 to 5 years

Over 5 years

Operating leases 30/9/2017

Future lease payments due (nominal)

from discontinued operations

Assets available to METRO under the terms of finance leases were recognised at €468 million (30/9/2017: €825 million, of which €339 million relate to discontinued operations); they essentially relate to leased buildings.

Finance leases generally have terms of 15 to 25 years with options under expiration to extend them at least once for 5 years. The interest rates in the leases vary by market and date of signing between 1.91% and 6.56%.

In addition to finance leases, METRO also signed other types of leases classified as operating leases based on their economic value. Operating leases also essentially concern leased buildings and generally have an initial term of up to 15 years. The interest rates in the leases are based partly on variable and partly on fixed rents.

Payments due under finance and operating leases in subsequent periods are shown as follows:

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€ million	Up to 1 year	1 to 5 years	Over 5 years
Finance leases 30/9/2017
Future lease payments due (nominal)	167	620	903
Discount	−10	−124	−424
Present value	157	495	480
of which discontinued operations	58	185	193
Operating leases 30/9/2017
Future lease payments due (nominal)	633	2,039	2,701
of which discontinued operations	212	659	796

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€ million	Up to 1 year	1 to 5 years	Over 5 years
Finance leases 30/9/2018
Future lease payments due (nominal)	126	373	517
Discount	−10	−88	−268
Present value	116	286	250
Operating leases 30/9/2018
Future lease payments due (nominal)	623	2,097	2,611
of which discontinued operations	209	670	620

Future payments due on finance leases contain purchase payments amounting to €13 million (30/9/2017: €19 million; of which discontinued operations: €0 million) required for the exercise of more favourable purchase options. The nominal value of future lease payments due to METRO from the subleasing of assets held under finance leases amounts to €150 million (30/9/2017: €245 million; of which discontinued operations: €69 million).

The nominal value of future lease payments due to METRO from the subleasing of assets held under operating leases amounts to €443 million, of which €80 million are attributable to discontinued operations (30/9/2017: €437 million; of which discontinued operations: €79 million).

Profit or loss for the period includes expenses from leases totalling €692 million (2016/17: €696 million). €204 million (2016/17: €212 million) of which apply to discontinued operations. Income from tenancy agreements totals €259 million (2016/17: €257 million), €49 million (2016/17: €48 million) of which apply to discontinued operations.

Contingent lease payments from finance leases recognised as expenses during the period amount to €1 million (2016/17: €4 million), €2 million (2016/17: €5 million) of which apply to discontinued operations. Contingent lease payments from operating leases recognised as expenses during the period amount to €11 million (2016/17: €12 million), €3 million (2016/17: €3 million) of which apply to discontinued operations.

Conditional lease payments are sales-dependent, use-based, price-indexed payments.

Lease payments due in subsequent periods from entities outside METRO for the rental of properties that are legally owned by METRO (METRO as lessor) are shown below:

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Currency effects

Currency effects result from situations where identical quantities of currency units are translated into another currency at differing exchange rates.

Glossary