9. OPERATING SEGMENTS

The Tyre segment is the only operating segment for which separate information has been reported at December 31, 2011. There was no change from December 31, 2010.

The structure of the operating segments reflects the organisation of the Group’s internal reporting.

Segment results for 2011 are as follows:

(in thousands of euro)
  TYRE OTHER ACTIVITIES ELIMINATIONS AND ADJUSTMENTS TOTAL 2011
Sales to third parties 5,600,259 54,534 - 5,654,793
Sales to Group companies 1,380 16,734 (18,114) -
Total net sales 5,601,639 71,268 (18,114) 5,654,793
Gross operating profit ° 857,731 (50,930) - 806,801
Depreciation and amortisation (213,808) (11,127) - (224,935)
Operating income (loss) 643,923 (62,057) - 581,866
Net income (loss) from equity investments (1,303) 160,670 (176,685) (17,318)
Financial income (expenses) (90,074) 634 - (89,440)
Net income (loss) before income taxes 552,546 99,247 (176,685) 475,108
Income taxes (181,166) 146,708 - (34,457)
Net income (loss) from continuing operations 371,380 245,955 (176,685) 440,651

Net income (loss) from discontinued operations       -
 
Net income (loss)       440,651
 
° of which impairment of property, plant and equipment and intangible assets (222) (5,760) - (5,982)

 

Segment results for 2010 are as follows:

(in thousands of euro)
  TYRE OTHER ACTIVITIES ElIMINATIONS AND ADJUSTMENTS TOTAl 2010
Sales to third parties 4,771,141 77,277 - 4,848,418
Sales to Group companies 860 17,529 (18,389) -
Total net sales 4,772,001 94,806 (18,389) 4,848,418
Gross operating profit (°) 661,135 (32,144) - 628,991
Depreciation and amortisation (208,039) (13,189) - (221,228)
Operating income (loss) 453,096 (45,333) - 407,763
Net income (loss) from equity investments 277 244,506 (221,326) 23,457
Financial income (expenses) (66,392) 599 - (65,793)
Net income (loss) before income taxes 386,981 199,772 (221,326) 365,427
Income taxes (134,429) (2,929) - (137,358)
Net income (loss) from continuing operations 252,552 196,843 (221,326) 228,069

Net income (loss) from discontinued operations       (223,840)
 
Net income (loss)       4,229
 
(°) of which impairment of property, plant and equipment and intangible assets (7,369) - - (7,369)

Please refer to note 39 for a breakdown of the result of discontinued operations in 2010.

 

The assets, liabilities and capital expenditure broken down by segment at December 31, 2011 are as follows:

(in thousands of euro)
  TYRE OTHER ACTIVITIES ELIMINATIONS AND ADJUSTMENTS TOTAL 12/31/2011
Segment assets 5,061,992 2,813,601 (2,607,970) 5,267,623
Investments in associates 11,708 120,450 7,955 140,113
Total allocated assets 5,073,700 2,934,051 (2,600,015) 5,407,736
Unallocated assets       1,588,070
Total assets       6,995,806
Segment liabilities 2,517,772 321,611 (79,350) 2,760,033
Unallocated liabilities       2,044,195
Total liabilities       4,804,228
 
Purchase of property, plant and equipment 611,069 6,717 - 617,786
Purchase of intangible assets 92,461 1,699 - 94,160

 

The assets, liabilities and capital expenditure broken down by segment at December 31, 2010 are as follows:

(in thousands of euro)
  TYRE OTHER ACTIVITIES ELIMINATIONS AND ADJUSTMENTS TOTAL 12/31/2010
Segment assets 4,127,756 274,010 (42,596) 4,359,170
Investments in associates 13,590 133,494 5,843 152,927
Total allocated assets 4,141,346 407,504 (36,753) 4,512,097
Unallocated assets       1,106,703
Total assets       5,618,800
Segment liabilities 1,954,560 271,044 (22,696) 2,202,908
Unallocated liabilities       1,387,909
Total liabilities       3,590,817
 
Purchase of property, plant and equipment 402,091 30,978 - 433,069
Purchase of intangible assets 2,948 1,880 - 4,828

 

Segment assets consist mainly of property, plant and equipment and intangible assets, leased assets, inventories, trade receivables and other receivables. Financial receivables, cash equivalents, other financial assets, securities held for trading and both current and deferred tax assets are excluded.

Segment liabilities mainly comprise trade payables and other payables, advances from customers and provisions for contingent liabilities and employee benefits. Financial payables and both current and deferred tax liabilities are excluded.

The purchase of property, plant and equipment relates mainly to completion of the new plants in Mexico and China, to increase the production mix, improve the qualitative capability of plants and improve occupational health and safety and environmental management at the factories.

The purchase of intangible assets mainly consists of goodwill (determined on a provisional basis) resulting from acquisition of the company OJSC Kirov Tyre Plant and LLC Amtel-Russian Tyres, with head office in Russia.

Net sales by geographical area are shown below. They are allocated on the basis of the country in which the customer is resident.

(in thousands of euro) 
  2011 2010
Europe:        
- Italy 479,838 8.49% 485,450 10.01%
- Rest of Europe 1,844,080 32.61% 1,503,531 31.01%
Nafta 561,320 9.93% 477,394 9.85%
Central and South America 1,915,467 33.87% 1,632,044 33.66%
Asia/Pacific 352,815 6.24% 286,922 5.92%
Middle East/Africa 501,273 8.86% 463,077 9.55%
  5,654,793 100.00% 4,848,418 100.00%

 

Non-current assets by geographical area are shown below. They are allocated on the basis of the country where these assets are located.

(in thousands of euro)
  12/31/2011 12/31/2010
Europe:        
- Italy 437,500 13.29% 395,275 13.99%
- Rest of Europe 622,837 18.93% 535,884 18.96%
Nafta 163,728 4.98% 58,191 2.06%
Central and South America 628,540 19.10% 589,762 20.87%
Asia/Pacific 310,560 9.44% 216,597 7.66%
Middle East/Africa 212,428 6.45% 195,697 6.93%
Non-current assets not allocated 915,321 27.81% 834,461 29.53%
  3,290,915 100.00% 2,825,867 100.00%

 

The non-current assets shown in the table above consist of property, plant and equipment and intangible assets, excluding goodwill. The unallocated non-current assets pertain to goodwill (see note 11).