Reclassified statement of financial position of Terna S.p.A.

The reclassified statement of financial position of Terna S.p.A. at 31 December 2011 and 2010 is summarised below. The table is obtained by reclassifying the data stated in the Statement of financial position.

In millions of eurosAt 31 December 2011At 31 December 2010Change
Net non-current assets      
- Intangible assets and goodwill 362.6 362.6 0.0
- Property, plant and equipment 7,514.0 6,687.7 826.3
- Financial assets (1) 629.4 590.0 39.4
Total 8,506.0 7,640.3 865.7
Net working capital      
Trade receivables (2) 606.2 511.3 94.9
Inventories 12.4 11.4 1.0
Other assets (3) 17.4 17.6 (0.2)
Trade payables (4) 722.9 491.2 231.7
Payables for pass-through energy items, net (5) 247.0 77.3 169.7
Net tax liabilities (6) 96.5 67.0 29.5
Other liabilities (7) 284.7 287.9 (3.2)
Total (715.1) (383.1) (332.0)
Gross invested capital 7,790.9 7,257.2 533.7
Sundry provisions (8) 430.6 511.1 (80.5)
Net invested capital in continuing operations 7,360.3 6,746.1 614.2
Net invested capital in discontinued operations 0.0 4.6 (4.6)
Total net invested capital 7,360.3 6,750.7 609.6
Equity 2,555.3 2,546.9 8.4
Net financial debt from continuing operations 4,805.0 4,458.4 346.6
Net financial debt from discontinued operations 0.0 (254.6) 254.6
Total net financial debt (9) 4,805.0 4,203.8 601.2
Total 7,360.3 6,750.7 609.6

 

Reported in the statement of financial position as: (1) “Other non-current assets” and “Non-current financial assets” for the value of equity investments (€622.8 million); (2) “Trade receivables” net of receivables for energy-related pass-through revenue (€1,077.8 million); (3) “Other current assets” net of other tax assets (€7.9 million) and “Current financial assets” in relation to the amount of deferred financial assets (€8.2 million); (4) “Trade payables” net of the payable for energy-related pass-through costs (€1,324.8 million); (5) “Trade receivables” for the value of receivables for pass-through energy revenue (€1,077.8 million) and “Trade payables” for the value of payables for pass-through energy costs (€1,324.8 million); (6) “Income tax assets”, “Other current assets” for the value of other tax receivables (€7.9 million), “Other current liabilities” for the value of other tax payables (€20.4 million) and “Income tax liabilities”; (7) “Other non-current liabilities”, “Current financial liabilities” and “Other current liabilities” net of other tax liabilities (€20.4 million); (8) “Employee benefits”, “Provisions for risks and charges” and “Deferred tax liabilities”; (9) “Long-term loans”, “Current portion of long-term loans”, “Non-current financial liabilities”, “Cash and cash equivalents”, “Non-current financial assets” for the value of the loan to Terna Rete Italia and FVH derivatives (€500 million and €521.8 million, respectively) and “Current financial assets” for the value of deposit certificates (€150.0 million).

The €865.7 million increase in net non-current assets since 31 December 2010, is attributable to:

  • property, plant and equipment, which increased by €826.3 million.

The following is a breakdown of the changes in property, plant and equipment for the year:

In millions of euros  
Investments  
Transmission lines 431.8
Transforming stations 569.4
Other 121.5
Total investments 1,122.7
Depreciation  (299.1)
Disposals, impairment losses and other changes (15.3)
Intra-group transactions 18.0
Total 826.3

 

The increase (€826.3 million) is the net effect of new capital expenditures (€1,122.7 million), depreciation (a negative €299.1 million) and disposals, impairment and other net reductions (a negative €15.3 million) during the year. It also reflects the acquisition of the transmission plants from the subsidiary Terna Rete Italia (€19.6 million) in order to carry out a series of urgent interventions for the development and renewal of the NTG and sale to the subsidiary SunTergrid (€1.6 million) of the MV/HV electrical utilities substation for the connection of the photovoltaic plant of Lanuvio;

  • financial assets, which show an increase of €39.4 million, mainly due to the acquisition of 22.09% in the share capital of the Montenegro company CGES (€34.2 million) and an additional interest (+2.5%) in the associate CESI (€2.7 million). The caption also reflects the establishment by the Parent Company of the companies Terna Crna Gora and Terna Plus, as extensively described in the paragraph entitled “Significant events” (€2 million).

Net working capital stands at a negative €715.1 million and generated €332 million in liquidity during the year essentially deriving from the following:

  • trade payables: increases in amounts due to suppliers (€231.7 million) for the increase in investing activities during the last period of the financial year and also as a result of the payments made during the first few days of the next financial year;
  • net payables for pass-through energy items: the increase (€169.7 million) is largely related to:
    • increase in net debt relating to the capacity payment (€110.8 million);
    • increase in payables linked to the essential production units for the safety of the electrical system (€84.7 million);
  • net tax liabilities: the increase of €29.5 million mainly originates from the greater amounts owing to the tax authorities for current taxes (€19.1 million), net payable for VAT (€15.2 million) after the recognition of greater receivables and withholdings on interest accrued on financial assets (€4.5 million);
  • trade receivables: increase of €94.9 million mainly refers to the price for transmission activities, for €51.9 million, chiefly as a result of the recognition of the receivable due from CCSE related to the “mitigation” mechanism in consumption established by Resolution ARG/elt 188/08, of the adjustment of the receivable for the incentive connected with the reduction in volumes provisioned on the Market for Dispatching Services (€66 million) and with the quality of the transmission service (€7.7 million); these changes have been partly compensated for by the receipts during the financial year in relation to receivables ascertained in 2009 for said incentive (Market for Dispatching Services).

The gross invested capital therefore amounts to €7,790.9 million, recording an increase of €533.7 million as compared with 31 December 2010.

Sundry provisions, amounting to €430.6 million, post a decrease of €80.5 million, mainly due to:

  • the release of the provision set aside in 2009 (€33.8 million inclusive of the exchange gains or losses) for contractual obligations maturing during the financial year, deriving from the sale of the controlling stake in Terna Participações;
  • the recognition for €24.4 million of the deferred tax asset on the change of the fair value associated with the cash flow hedges;
  • the accrual for deferred tax assets for tax recognition of the goodwill recorded in the consolidated financial statements deriving from the acquisition of the subsidiary Terna Rete Italia S.r.l. (formerly TELAT) established by Italian Law Decree no. 98 of 6 July 2011 (amounting to €39.8 million);
  • the use of the provision for deferred tax liabilities recorded on previous allocations for additional amortisation/depreciation with respect to the tax relevant shares (€39.1 million);
  • the adjustment of net deferred tax liabilities at the start of the year, as a result of the IRES (the “Robin Hood Tax”, €52.8 million) and IRAP (€2.7 million) taxes, as described previously.

Net invested capital stands at €7,360.3 million and is financed through equity for €2,555.3 million (as compared with €2,546.9 million as of 31 December 2010) and by net financial debt for €4,805.0 million (+€346.6 million as compared with 31 December 2010).

The debt/equity ratio (net financial debt/equity) stands at 1.88

The following is a breakdown of net financial debt:

In millions of euro At 31 December 2011 At 31 December 2010 Change
Long-term debt (inclusive of the short-term portion) and related hedges 6,388.0 5054.0 1334.0
Short-term loans 0.0 73.1 (73.1)
Short-term investments (150.0) 0.0 (150.0)
Cash and cash equivalents (1,114.3) (150.1) (964.2)
Financial transactions with subsidiaries      
Loan to Terna Rete Italia (500.0) (500.0) 0.0
Net current a/c position of intercompany treasury 181.3 (18.6) 199.9
Net financial debt from continuing operations 4,805.0 4,458.4 346.6
Financial debt from discontinued operations and assets held for sale 0 (254.6) 254.6
Total net financial debt 4,805.0 4,203.8 601.2

For a breakdown of the individual components of this net debt at 31 December 2011, see “Cash flows” below.