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Notes to the consolidated financial statements
As of December 31, 2008, 2007 and 2006

16.Property, plant and equipment

The movements in 2008 were as follows:

  Network equipment Land and Buildings Construction in Progress Other(i) Total
  US$ '000 US$ '000 US$ '000 US$ '000 US$ '000
Opening balance, net 1,557,003 51,979 381,984 75,156 2,066,122
Change in the composition of the Group (note 4) (iv) 55,040 2,751 8,167 5,239 71,197
Additions 52,071 1,536 1,204,621 63,088 1,321,316
Disposals (25,486) (646) (1,153) (1,190) (28,475)
Impairments(ii) (8,544) – – – (8,544)
Depreciation charge (iii) (418,221) (4,804) – (31,761) (454,786)
Asset retirement obligations 12,505 – – – 12,505
Transfers 1,204,341 15,490 (1,235,501) 15,670 –
Transfer to assets held for sale (14,747) (132) (636) (2,462) (17,977)
Exchange rate movements (119,357) (2,369) (47,007) (5,401) (174,134)
Closing Balance 2,294,605 63,805 310,475 118,339 2,787,224
As at December 31,
2008		          
Cost or valuation 3,443,381 78,602 310,475 222,662 4,055,120
Accumulated depreciation (1,148,776) (14,797) – (104,323) (1,267,896)
Net 2,294,605 63,805 310,475 118,339 2,787,224

The movements in 2007 were as follows:

  Network equipment Land and Buildings Construction in Progress Other(i) Total
  US$ '000 US$ '000 US$ '000 US$ '000 US$ '000
Opening balance, net 933,381 32,628 231,638 69,512 1,267,159
Additions 62,765 3,336 948,238 21,821 1,036,160
Disposals (5,551) (139) – (227) (5,917)
Impairments(ii) (1,722) – – (29) (1,751)
Depreciation charge (iii) (286,497) (1,385) – (18,053) (305,935)
Asset retirement obligations 10,690 – 4,615 – 15,305
Other movements (7,780) – – – (7,780)
Transfers 792,292 16,199 (808,491) – –
Exchange rate movements 59,425 1,340 5,984 2,132 68,881
Closing Balance 1,557,003 51,979 381,984 75,156 2,066,122
As at December 31,
2007		          
Cost or valuation 2,228,969 64,883 381,984 130,300 2,806,136
Accumulated depreciation (671,966) (12,904) – (55,144) (740,014)
Net 1,557,003 51,979 381,984 75,156 2,066,122
  • (i) The caption "Other" mainly includes office equipment and motor vehicles.
  • (ii) For the year ended December 31, 2008, Millicom recorded an impairment charge of $9 million, mainly related to its operation in Sierra Leone (see note 6); for the year ended December 31, 2007, Millicom recorded an impairment charge of $2 million for network equipment, mainly related to its operation in Bolivia.
  • (iii) The depreciation charge for network equipment is recorded under the caption “Cost of sales” and the depreciation charge for land and buildings and other is recorded under the caption “General and administrative expenses”.
  • (iv) The change in the composition of the Group corresponded to the acquisition of Amnet.

The amount of borrowing costs capitalized for the year ended December 31, 2008 was $9 million (2007: $5 million).

The following table provides details of cash used for the purchase of property, plant and equipment:

  2008 2007(i) 2006(i)
  US$ '000 US$ '000 US$ '000
Additions 1,321,316 1,036,160 724,408
Additions from discontinued operations (10,766) (5,731) (126,965)
Subtotal 1,310,550 1,030,429 597,443
Suppliers advances 71,609 19,561 40,171
Change in capex payable (32,466) (170,968) (127,782)
Vendor financing (see note 27) (48,632) (23,041) (65,870)
Capitalised interests (8,575) (5,381) (4,500)
Cash used from continuing operations for purchase of property, plant and equipment 1,292,486 850,600 439,462
  • (i) Figures for 2007 and 2006 have been adjusted, reclassifying Millicom operation in Sierra Leone

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