Contents

• Annual Report
• Financial Statements
• Corporate Governance

Notes to the Consolidated Financial Statements – Contents

3. Operating Segments

3.1. Reportable segments

The tables below set forth data on revenue, costs and profits/losses, as well as assets, equity and liabilities of the Group’s reporting segments for the periods ended December 31st 2012 and December 31st 2011.

in PLN m

Period ended December 31st 2012	Exploration and production	Trade and storage	Distribution	Generation	Other activities	Eliminations	Total
Income statement
Sales to external customers	3,121	23,353	153	1,893	210	-	28,730
Intercompany sales	1,204	360	3,430	64	333	(5,391)	-
Total segment revenue	4,325	23,713	3,583	1,957	543	(5,391)	28,730
Depreciation and amortisation expenses	(613)	(162)	(819)	(456)	(19)	-	(2,069)
Other costs	(2,359)	(23,226)	(1,886)	(1,486)	(544)	5,373	(24,128)
Total segment costs	(2,972)	(23,388)	(2,705)	(1,942)	(563)	5,373	(26,197)
Operating profit/(loss)	1,353	325	878	15	(20)	(18)	2,533
Net finance costs							(164)
Share in net profit/(loss) of equity-accounted entities		173					173
Profit/loss before tax							2,542
Income tax expense							(308)
Net profit/(loss)							2,234
Statement of financial position
Segment’s assets	16,580	18,650	13,089	4,345	483	(7,278)	45,869
Investments in equity-accounted entities		771					771
Unallocated assets							153
Deferred tax assets							1,124
Total assets							47,917
Total equity							27,247
Segment liabilities	5,823	3,937	2,234	2,870	171	(6,943)	8,092
Unallocated liabilities							10,642
Deferred tax liabilities							1,936
Total liabilities and equity							47,917
Other information on the segment
Capital expenditure on property, plant and equipment and intangible assets	(1,676)	(719)	(1,141)	(196)	(29)	(27)	(3,788)
Impairment losses on assets	(1,132)	(1,686)	(97)	(33)	(9)	1	(2,956)
Impairment losses on unallocated assets							(41)

in PLN m

Period ended December 31st 2011	Exploration and production	Trade and storage	Distribution	Generation	Other activities	Eliminations	Total
Income statement
Sales to external customers	2,879	19,831	141	-	153	-	23,004
Intercompany sales	1,202	155	3,329	-	435	(5,121)	-
Total segment revenue	4,081	19,986	3,470	-	588	(5,121)	23,004
Depreciation and amortisation expenses	(607)	(129)	(823)	-	(15)	-	(1,574)
Other costs	(2,159)	(20,056)	(1,864)	-	(564)	5,085	(19,558)
Total segment costs	(2,766)	(20,185)	(2,687)	-	(579)	5,085	(21,132)
Operating profit/(loss)	1,315	(199)	783	-	9	(36)	1,872
Net finance costs							(17)
Share in net profit/(loss) of equity-accounted entities		43					43
Profit/loss before tax							1,898
Income tax expense							(143)
Net profit/(loss)							1,755
Statement of financial position
Segment’s assets	15,875	12,214	12,603	-	549	(4,276)	36,965
Investments in equity-accounted entities		598					598
Unallocated assets							341
Deferred tax assets							920
Total assets							38,824
Total equity							25,218
Segment liabilities	2,177	2,798	1,915	-	120	(3,937)	3,073
Unallocated liabilities							8,961
Deferred tax liabilities							1,572
Total liabilities and equity							38,824
Other information on the segment
Capital expenditure on property, plant and equipment and intangible assets	(2,788)	(617)	(1,139)	-	(19)	57	(4,506)
Impairment losses on assets	(978)	(1,711)	(91)	-	(12)	1	(2,791)
Impairment losses on unallocated assets							(38)

3.2. Geographical areas

The Group trades primarily on the domestic market (Poland). In 2012, revenue from export sales to external customers accounted for 5.84% (4.40% in 2011) of the total revenue from sales to external customers.

in PLN m

	Period from Jan 1 – Dec 31 2012	Period from Jan 1 – Dec 31 2011
Domestic sales:	27,051	21,992
High-methane gas	21,960	18,965
Nitrogen-rich gas	1,389	1,217
Crude oil	687	638
Helium	48	22
Propane-butane gas	66	60
Natural gasoline	7	5
LNG	54	38
Electricity	841	11
Heat	978	-
Certificates of origin for electricity	125	-
Gas storage services	36	31
Geophysical and geological services	90	338
Drilling and well servicing services	243	254
Construction and erection	87	112
Designing services	19	25
Hotel services	32	31
Other services	203	111
Other products	51	19
Materials and goods	29	18
Connection charge	106	97
Export sales:	1,679	1,012
High-methane gas*	349	49
Crude oil	569	457
Helium	113	36
Electricity	1	-
Geophysical and geological services	239	110
Drilling and well servicing services	343	324
Construction and erection	36	20
Other services	10	4
Other products	19	12
Total	28,730	23,004

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* By PST GmbH in Western Europe.

The Group sells its products and services to customers in the following countries: Switzerland, Germany, Uganda, Kazakhstan, Egypt, India, Pakistan, Austria, Denmark, Slovenia, Ukraine, Norway, United States of America, and United Arab Emirates.

Most of the Group’s non-current assets (other than financial instruments) are also located in Poland. The value of non-current assets located abroad as at December 31st 2012 represented 15.61% of the Group's total assets (December 31st 2011: 14.56%).

in PLN m

	Dec 31 2012	Dec 31 2011
Value of non-current assets other than financial instruments located in Poland	29,487	25,348
Value of non-current assets other than financial instruments located abroad*	5,454	4,321
Total	34,941	29,669

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* As at December 31st 2012, PLN 4,125m was attributable to PGNiG Norway AS (December 31st 2011: PLN 3,846m).

3.3. Key customers

The Group does not have any single external customer which would account for 10% or more of total revenue earned by the Group.

Polish Oil & Gas Company (PGNiG SA) KRS 0000059492, NIP 525-000-80-28, share capital 5,900,000,000 PLN – fully paid Headquarters – 25 M. Kasprzaka Street, 01-224 Warsaw, Poland Phone: +48 22 589 45 55, Fax: +48 22 691 82 73