Reclassified statement of financial position of the Group

Reclassified consolidated statement of financial position of the Terna Group at 31 December 2012 and 31 December 2011, is presented below.

€ million  at 31.12.2012 at 31.12.2011 Change
Net non-current assets      
- Intangible assets and goodwill 471 471 -
- Property, plant and equipment 9,342 8,618 724
- Financial assets (1) 81 74 7
Total 9,894 9,163 731
Net working capital      
- Trade receivables (2) 744* 612 132
- Inventories 7 16 (9)
- Other assets (3) 32 15 17
- Trade payables (4) 712 705 7
- Net payables for pass-through energy items, net (5) 440* 247 193
- Net tax liabilities (6) 36 121 (85)
- Other liabilities (7) 366 294 72
Total (771) (724) (47)
Gross invested capital 9,123 8,439 684
Sundry provisions (8) 474 565 (91)
NET INVESTED CAPITAL 8,649 7,874 775
Equity attributable to owners of the Parent 2,794 2,751 43
Net financial debt (9) 5,855 5,123 732
TOTAL 8,649 7,874 775
*net of the items used to offset against an operator in the electricity market, paid in January 2013 Reported in the consolidated statement of financial position as: (1) “Equity-accounted investees”, “Other non-current assets” and “Non-current financial assets” for the carrying amount of the other investments (€0.8 million); (2) “Trade receivables” net of energy-related pass-through energy revenue (€1,018.1 million) and the items used to offset against an operator in the electricity market, paid in January 2013 (€122.0 million); (3) the item “Other current assets” net of other tax assets (€48.5 million) and “Current financial assets” (€21.3 million); (4) the item “Trade payables” net of the energy-related pass-through costs (€1,580.1 million); (5) the items “Trade receivables” for the value of receivables for pass-through energy revenue (€1,018.1 million) and “Trade payables” for the value of payables for pass-through energy costs (€1,580.1 million), net of the items used to offset against an operator in the electricity market, paid in January 2013 (€122.0 million); (6) “Income tax assets”, “Other current assets” for the amount of other tax receivables (€48.5 million), “Other current liabilities” for the amount of other tax liabilities (€8.0 million) and “Income tax liabilities”; (7) “Other non-current liabilities”, “Current financial liabilities” and “Other current liabilities” net of other tax liabilities (€154.8 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 FVH derivatives (€754.9 million).

The increase in net non-current assets amounting to €731 million with respect to the figures of 31 December 2011, is mainly due to the item property, plant and equipment (amounting to a positive €724 million), as a result of the joint effect of:

  • investments for €1,181 million of which €1,153 million in core business and 28 million in non-core business;
  • amortisation and depreciation for the year of €366 million;
  • impairment of fixed assets for the capitalisations carried out in previous periods due to accruals to the risk provision "Projects for urban and environmental renewal", currently considered unlikely by the Parent Company (for €43 million);
  • set-up grants related to plants recorded for €25 million and other changes and disposals for approximately €23 million.

Intangible assets and goodwill show a balance in line with the previous financial year of €54 million (of which €38 million in dispatching infrastructures), entirely set off by the value of the depreciation for the year (€54 million, of which, in particular €29 million relates to the depreciation of the dispatching infrastructures and €6 million to the amortisation of the concession).

The net carrying amount of the infrastructures used by the dispatching service totalled €149 million at 31 December 2012 (compared with €141 million at 31 December 2011).

Total investments made by the Group in 2012 amounted to €1,235 million (of which 28 million in non-core business) up 0.5% from the 1,229 million recorded in 2011.

Financial assets increased by €7 million, essentially due to adjustment to end-of-period shareholders' equity of Terna S.p.A.'s equity interest in the associate CESI (+€6 million) - in which the Group acquired a further stake during 2012, for approximately 0.292%.

Net working capital amounted to -€771 million and during the period generated liquidity of €47 million compared to financial year 2011, mainly owing to the combined effect of:

  • an increase in net payables for pass-through energy items for electricity dispatching services of the Parent Company, for €193 million; in particular the change is due to:
    • reduction of net receivables connected to Uplift (€117 million);
    • increase in net debt deriving from virtual interconnection activities (€66 million);
    • increase in net debt relating to provisioning of interruptible resources (€23 million);
  • an increase in other liabilities (€72 million), mainly owing to the higher security deposits received from electricity market operators connected with dispatch contracts (+€36 million) and greater liabilities for unsettled net interest expense for the period (+€35 million) relating mainly to the bond loans issued during the financial year;
  • an increase in trade receivables of €132 million, mainly referring to the CTR fees (€113 million) generally due to the recognition of the receivable due from CCSE for the revenue for the period deriving from the "mitigation" mechanism pursuant to Resolution 118/08, as well as to orders and other unregulated activities for third parties carried out by the Group in the period (+€51 million, including €17 million from Wind for fibre optic housing);
  • a decrease in net tax liabilities of €85 million due mainly to lower payables for income taxes (down €28 million, essentially attributable to the lower balance paid in the previous financial year, because that did not take into account, as provided for, the new regulations introduced in the second half of 2011, in line with what is referred to as the "Robin Hood Tax"), to the increase in net receivables from the tax authority for VAT (€48 million) and the recognition of the IRES credit pursuant to Legislative Decree 16/2012 of 2 March 2012 (€8.0 million).

It is specified that the changes in trade receivables and net payables for pass-through energy items referred to above do not take into account the items used to offset against an operator in the electricity market (€122 million), paid in January 2013.

Gross invested capital, therefore, amounted to €9,123 million, recording an increase compared with the previous financial year of €684 million.

Other provisions fell by €91 million, mainly due to:

  • a decrease in the risk provision "Projects for urban and environmental renewal" for the release of the earlier accrual currently considered unlikely (€43 million) and for net use for the effective contractual payments (€11 million) by the Parent Company;
  • use of amounts set aside previously for deferred tax liabilities by the Parent Company Terna and the subsidiary Terna Rete Italia S.r.l. relating to additional amortisation and depreciation over the assets’ estimated useful life (€42 million and €7 million respectively);
  • recording of the deferred tax asset on the change in the fair value associated with the derivative cash flow hedging instruments for €11 million;
  • accruals made to the provision for risks related to the IMU tax, estimated by applying Memorandum 6/2012 of the Agency of the Territory (land registry) on registering the land of the Parent Company's electrical stations (€16 million).

Net invested capital amounted to €8,649 million, an increase of €775 million compared with 31 December 2011 and is financed through shareholders' equity for €2,794 million (compared with €2,751 million at 31 December 2011) and through net financial debt for €5,855 million (+€732 million compared with the 5,123 million of 31 December 2011).

At 31 December 2012, the debt/equity ratio therefore came out at 2.1.