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of the Securities Exchange Act of 1934
00198, Rome
Italy
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Corporate | ||||
Enel SpA | ||||
Domestic Generation | ||||
and Energy Management | Domestic Infrastructure | |||
Division | and Networks Division | Domestic Sales Division | ||
> Enel Produzione(1) | > Enel Distribuzione | > Enel Distribuzione | ||
> Enel Trade | > Enel Rete Gas | > Enel Gas | ||
> Enel Sole | > Enel Energia | |||
> Deval | > Enel.si | |||
> Deval |
Services and | ||||
International Division | Other Activities | |||
> Viesgo Generación | > Viesgo Energía | > Enel Servizi (formerly Enel Ape)(2) | ||
> Enel Unión Fenosa Renovables | > Electrica Banat | > Sfera | ||
> Maritza | > Electrica Dobrogea | > Dalmazia Trieste | ||
> Enel North America | > Electra de Viesgo Distribución | > Enelpower | ||
> Enel Latin America | > Enel Servicii | > Enel.NewHydro | ||
> Enel Viesgo Servicios | > Enel.Factor | |||
> Enel.Re |
(1) | From January 1, 2005 Enel Green Power, Enel Logistica Combustibili and Conphoebus were merged into Enel Produzione. | |
(2) | From January 1, 2005 Enel.it and Enel Facility Management were merged into Enel Servizi (formerly Enel Ape). |
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Board of Directors | Board of Auditors | |
Chairman | Chairman | |
Piero Gnudi | Eugenio Pinto | |
Chief Executive Officer and General Manager | Auditors | |
Fulvio Conti | Carlo Conte | |
Franco Fontana | ||
Directors | ||
Giulio Ballio | Alternate auditors | |
Augusto Fantozzi | Giancarlo Giordano | |
Alessandro Luciano | Paolo Sbordoni | |
Fernando Napolitano | ||
Francesco Taranto | Independent auditors | |
Gianfranco Tosi | KPMG SpA | |
Francesco Valsecchi | ||
Secretary | ||
Claudio Sartorelli |
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The Chief Executive Officer | ||
Fulvio Conti |
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2005 | 2004 | |||||||
Income data(millions of euro) | ||||||||
Revenues | 34,059 | 31,011 | ||||||
Gross operating margin | 7,745 | 8,071 | ||||||
Operating income | 5,538 | 5,870 | ||||||
Income before minority interests | 4,132 | 2,747 | ||||||
Group net income | 3,895 | 2,631 | ||||||
Financial data(millions of euro) | ||||||||
Net capital employed | 31,728 | 43,580 | ||||||
Net financial debt | 12,312 | 24,514 | ||||||
Shareholders’ equity (including minority interests) | 19,416 | 19,066 | ||||||
Cash flow from operations | 5,693 | 4,835 | ||||||
Capital expenditure on tangible and intangible assets | 3,257 | 3,834 | ||||||
Per share data (euro) | ||||||||
Group net income per share | 0.63 | 0.43 | ||||||
Group shareholders’ equity per share in circulation at period-end | 3.10 | 2.94 | ||||||
Operating data | ||||||||
Domestic electricity sales on the free and regulated market (TWh)(1) | 148.2 | 157.8 | ||||||
Electricity transported on the domestic distribution network (TWh)(1) | 251.0 | 250.7 | ||||||
Gas sales (billions of cubic meters) | 6.7 | 6.9 | ||||||
- of which to end-users (billions of cubic meters) | 5.1 | 5.2 | ||||||
Net electricity generated by Enel in Italy (TWh) | 112.1 | 125.9 | ||||||
Employees at period-end (no.) | 51,778 | 61,898 | ||||||
Shares in circulation at period-end (no.) | 6,157,071,646 | 6,103,521,864 | ||||||
Market indicators | ||||||||
Average Brent oil price ($/b) | 54.4 | 38.2 | ||||||
Average price of low-sulfur fuel oil ($/t)(2) | 272.9 | 182.1 | ||||||
Average price of coal ($/t fob)(3) | 46.4 | 50.0 | ||||||
Average dollar/euro exchange rate | 1.244 | 1.244 | ||||||
Six-month Euribor rate (average for the year) | 2.24 | % | 2.15 | % |
(1) | Excluding sales to resellers. | |
(2) | Platt’s CIF Med index. | |
(3) | Coal Week International Index for the mix considered by the Authority for Electricity and Gas. |
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Gross operating | ||||||||||||||||||||||||
Millions of euro | Revenues | margin | Operating income | |||||||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2005 | 2004 | |||||||||||||||||||
Generation and Energy Management | 14,215 | 13,028 | 3,704 | 3,780 | 2,565 | 2,531 | ||||||||||||||||||
Networks, Infrastructure and Sales | 20,422 | 19,254 | 3,737 | 3,530 | 2,778 | 2,693 | ||||||||||||||||||
Services and Other Activities | 1,660 | 1,794 | 249 | 214 | 154 | 106 | ||||||||||||||||||
Parent Company | 1,103 | 1,649 | 67 | 652 | 53 | 647 | ||||||||||||||||||
Eliminations and adjustments | (3,341 | ) | (4,714 | ) | (12 | ) | (105 | ) | (12 | ) | (107 | ) | ||||||||||||
Total — continuing operations | 34,059 | 31,011 | 7,745 | 8,071 | 5,538 | 5,870 |
Net capital | ||||||||||||||||||||||||
Millions of euro | Capital expenditure | employed | Employees (no.) | |||||||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2005 | 2004 | |||||||||||||||||||
Generation and Energy Management | 1,027 | 857 | 14,700 | 14,931 | 9,904 | 10,828 | ||||||||||||||||||
Networks, Infrastructure and Sales | 1,692 | 1,711 | 13,421 | 12,334 | 35,783 | 35,537 | ||||||||||||||||||
Services and Other Activities | 99 | 112 | 639 | 885 | 5,522 | 3,826 | ||||||||||||||||||
Parent Company | 11 | 10 | — | — | 569 | 590 | ||||||||||||||||||
Discontinued operations | 428 | 1,144 | — | 15,164 | — | 11,117 | ||||||||||||||||||
Eliminations and adjustments | — | — | 2,968 | 266 | — | — | ||||||||||||||||||
Total — Group | 3,257 | 3,834 | 31,728 | 43,580 | 51,778 | 61,898 |
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§ | the modification of the procedures for setting the price of electricity sold by Enel to the Single Buyer; |
§ | the procedure for allocating interconnection capacity to enable performance of the long-term contracts. |
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§ | the authorization for the restart, until March 31, 2006, of oil-fired plants with a power capacity of more than 300 MW that are currently not in service owing to the restrictions contained in the related ministerial authorizations. The measures enable third-party generation plants with a capacity of about 2,000 MW to re-enter service; |
§ | the possibility to suspend, until March 31, 2006, emissions restrictions on oil-fired plants. This suspension permits the operation of low-sulfur fuel oil and multifuel plants and regards the Enel power plants at Montalto di Castro, Piombino, Rossano Calabro, Termini Imerese, Cavriglia and Livorno. The operational procedures for implementing the measures were specified in decrees issued by the Ministries for Productive Activities, the Environment and Health. |
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2005 | 2004 | |||||||
Gross operating margin per share (euro) | 1.26 | 1.32 | ||||||
Operating income per share (euro) | 0.90 | 0.96 | ||||||
Group net earnings per share (euro) | 0.63 | 0.43 | ||||||
Dividend per share (euro) | 0.63 | (1) | 0.69 | |||||
Pay-out ratio(2) (%) | 100 | 161 | ||||||
Group shareholders’ equity per share (euro) | 3.10 | 2.94 | ||||||
Share price - 12-month high (euro) | 7.48 | 7.25 | ||||||
Share price - 12-month low (euro) | 6.32 | 5.21 | ||||||
Average share price in December (euro) | 6.75 | 7.07 | ||||||
Market capitalization(3) (millions of euro) | 41,543 | 43,155 | ||||||
No. of shares outstanding at December 31 (millions) | 6.157 | 6.104 |
(1) | Dividend proposed by the Board of Directors on March 22, 2006 equal to€0.44 per share as the balance on the 2005 dividend (in addition to the€0.19 paid as an interim dividend in November 2005). | |
(2) | Calculated on Group net income. | |
(3) | Calculated on average share price in December. |
Current(1) | Dec. 31, 2005 | Dec. 31, 2004 | Dec. 31, 2003 | ||||||||||||||
Enel stock weighting in: | |||||||||||||||||
- MIB30 Index | 8.65 | % | 8.75 | % | 10.46 | % | 8.58 | % | |||||||||
- FT-SE E300 Electricity Index | 20.37 | % | 23.22 | % | 28.12 | % | 15.75 | % |
Rating | Current(1) | Dec. 31, 2005 | Dec. 31, 2004 | Dec. 31, 2003 | ||||||
Standard & Poor’s | Outlook | Negative | Stable | Stable | Negative | |||||
Medium/long-term | A+ | A+ | A+ | A+ | ||||||
Short term | A-1 | A-1 | A-1 | A-1 | ||||||
Moody’s | Outlook | Stable | Stable | Stable | Negative | |||||
Medium/long-term | Aa3 | Aa3 | A1 | A1 | ||||||
Short term | P-1 | P-1 | P-1 | P-1 |
(1) | At February 28, 2006. |
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§ | financial data, presentations, on-line updates on the share price; | |
§ | information on corporate bodies and the regulations of shareholders’ meetings; | |
§ | periodic updates on corporate governance issues. |
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(source: Terna Rete Elettrica Nazionale SpA, formerly the Independent System Operator, or ISO)
Millions of kWh | ||||||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||||||
Gross electricity generation: | ||||||||||||||||
- thermal | 252,412 | 246,125 | 6,287 | 2.6 | % | |||||||||||
- hydroelectric | 42,482 | 49,908 | (7,426 | ) | -14.9 | % | ||||||||||
- geothermal and other resources | 7,465 | 7,288 | 177 | 2.4 | % | |||||||||||
Total gross electricity generation | 302,359 | 303,321 | (962 | ) | -0.3 | % | ||||||||||
Auxiliary services consumption | (12,704 | ) | (13,299 | ) | 595 | 4.5 | % | |||||||||
Net electricity generation | 289,655 | 290,022 | (367 | ) | -0.1 | % | ||||||||||
Net electricity imports | 49,155 | 45,635 | 3,520 | 7.7 | % | |||||||||||
Electricity delivered to the network | 338,810 | 335,657 | 3,153 | 0.9 | % | |||||||||||
Consumption for pumping | (9,369 | ) | (10,300 | ) | 931 | 9.0 | % | |||||||||
Electricity demand | 329,441 | 325,357 | 4,084 | 1.3 | % |
§ | Domestic electricity demandgrew by 1.3% over 2004 to reach 329.4 billion kWh, 85.1% of which was covered by net domestic generation for consumption, with the remaining 14.9% being covered by net imports; | |
§ | despite the increase in demand,gross electricity generation fell slightly (-0.3%). Last year was characterized by a sharp contraction in hydroelectric generation (-7.4 billion kWh), which was related to a deterioration in water availability and only partially offset by growth in thermal and geothermal electricity generation and other sources (+6.5 billion kWh); | |
§ | net importsposted an increase of 7.7% to reach 49.2 billion kWh (45.6 billion kWh in 2004), in part due to the activation of the new 380kV San Fiorano-Robbia power line. |
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Millions of kWh | ||||||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||||||
Net electricity generation | 112,087 | 125,868 | (13,781 | ) | -10.9 | % | ||||||||||
Electricity purchases | 173,683 | 152,525 | 21,158 | 13.9 | % | |||||||||||
Sales to wholesalers(1) | 114,811 | 99,804 | 15,007 | 15.0 | % | |||||||||||
Sales on the regulated market(2) | 129,676 | 136,961 | (7,285 | ) | -5.3 | % | ||||||||||
Sales on the free market(2) | 18,484 | 20,840 | (2,356 | ) | -11.3 | % | ||||||||||
Electricity transported on Enel’s network | 251,045 | 250,652 | 393 | 0.2 | % |
(1) | Sales made by generation companies and sales to resellers | |
(2) | Excluding sales to resellers |
§ | Net electricity generation, totaling 112.1 billion kWh, fell 10.9% from 2004. In particular, 10 billion kWh of the decrease is attributable to thermal generation and 3.8 billion kWh to hydro generation; |
§ | electricity purchases, totaling 173.7 billion kWh, rose 13.9%, connected with the start of operations of the Power Exchange on April 1, 2004, and of operations of the Single Buyer, which has become a de facto third party in transactions between the Group’s power generation and distribution companies; |
§ | wholesale salescame to 114.8 billion kWh, with the 15.0% growth over the previous year being due to the launch of the Power Exchange for electricity, as mentioned above; |
§ | sales on the regulated market(excluding sales to resellers) came to 129.7 billion kWh, a decline of 5.3% attributable to the opening up of the market, the sale of the distribution network in the province of Trento on July 1, 2005, and the recognition in 2004 of the upward revision of estimates made at December 31, 2003, of volumes of electricity distributed and sold in 2003 and not yet measured and billed; |
§ | sales on the free marketcame to 18.5 billion kWh, a decrease of 11.3% due primarily to lower sales to large electricity users (customers with an annual consumption of over 100 million kWh) and wholesalers due to the decision to reposition the customer portfolio; |
§ | totalenergy transportedon Enel’s network in 2005 is essentially in line that the previous year (+0.2%). Excluding the impact of the upward revision of amounts of electricity recorded in 2004, the volume of electricity transported in 2005 shows growth of around 1.3% over the previous year. |
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§ | The averageBrent crudeprice for spot transactions in 2005 increased by 42.4% from 2004, rising from $38.20 to $54.40 a barrel. Along with the worsening of the geopolitical environment in the Middle East, the rise in prices, particularly in the second half of the year, was also influenced by developments in the US market due to a number of exceptionally violent hurricanes in the third quarter, which reduced oil production and shut down a number of refineries as a result of significant infrastructure damage; |
§ | the price offuel oil(Platt’s CIF Med index) increased significantly over the previous year. In particular, the average price of high-sulfur fuel oil rose to $233.50 per ton from $154.50 per ton in 2004 (+51.1%), while low-sulfur fuel oil increased in 2005 to $272.90 per ton ($182.10 per ton in 2004), an increase of 49.9%; |
§ | the average price ofsteam coalon the international market (Coal Week International index for the mix considered by the Authority for Electricity and Gas) posted a slight decline from 2004, going from $50.00 per ton to $46.40 per ton (-7.2%); |
§ | in 2005, the average price ofnatural gasrose significantly due to the steady increase in the price of petroleum products, to which they are structurally linked. |
§ | sale of the company NewReal (real estate) on July 14, 2004; |
§ | acquisition on September 15, 2004, of controlling interests in Ottogas Rete and Ottogas Vendita (distribution and sale of natural gas to end-users); |
§ | acquisition on December 14, 2004, of controlling interests in Italgestioni and Italgestioni Gas (distribution and sale of natural gas to end-users); |
§ | acquisition of controlling interests in Electrica Banat and Electrica Dobrogea (distribution and sale of electricity in Romania) on April 28, 2005; |
§ | sale of a 62.75% stake in Wind on August 11, 2005, and related deconsolidation by classifying the remaining 37.25% stake among non-current financial assets; |
§ | sale of a 43.85% stake in Terna SpA, which took place in two transactions (13.86% on March 31, 2005, and 29.99% on September 15, 2005), and the related deconsolidation effective as of September 15, 2005. |
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Millions of euro | ||||||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||||||
TOTAL REVENUES | 34,059 | 31,011 | 3,048 | 9.8 | % | |||||||||||
TOTAL COSTS | 26,314 | 22,940 | 3,374 | 14.7 | % | |||||||||||
GROSS OPERATING MARGIN | 7,745 | 8,071 | (326 | ) | -4.0 | % | ||||||||||
Depreciation, amortization and impairment losses | 2,207 | 2,201 | 6 | 0.3 | % | |||||||||||
OPERATING INCOME | 5,538 | 5,870 | (332 | ) | -5.7 | % | ||||||||||
- Net financial expense and result of investments accounted for using the equity method | (744 | ) | (852 | ) | 108 | 12.7 | % | |||||||||
INCOME BEFORE TAXES | 4,794 | 5,018 | (224 | ) | -4.5 | % | ||||||||||
- Income taxes | 1,934 | 2,116 | (182 | ) | -8.6 | % | ||||||||||
INCOME FROM CONTINUING OPERATIONS | 2,860 | 2,902 | (42 | ) | -1.4 | % | ||||||||||
INCOME FROM DISCONTINUED OPERATIONS | 1,272 | (155 | ) | 1,427 | — | |||||||||||
NET INCOME (Group and minority interests) | 4,132 | 2,747 | 1,385 | 50.4 | % | |||||||||||
Minority interests | 237 | 116 | 121 | — | ||||||||||||
Group net income | 3,895 | 2,631 | 1,264 | 48.0 | % | |||||||||||
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Millions of euro | ||||||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||||||
adjusted | ||||||||||||||||
GROSS OPERATING MARGIN | 7,745 | 7,003 | 742 | 10.6 | % | |||||||||||
OPERATING INCOME | 5,538 | 4,802 | 736 | 15.3 | % | |||||||||||
INCOME FROM CONTINUING OPERATIONS | 2,860 | 2,232 | 628 | 28.1 | % |
Millions of euro | ||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||
Electricity sales and Electricity Equalization Fund contributions | 29,008 | 25,098 | 3,910 | |||||||||
Gas sold to end-users | 1,556 | 1,374 | 182 | |||||||||
Net revenues from commodity risk management | 272 | (16 | ) | 288 | ||||||||
Capital gains on disposal of assets | 131 | 13 | 118 | |||||||||
Other services, sales and revenues | 3,092 | 4,542 | (1,450 | ) | ||||||||
Total | 34,059 | 31,011 | 3,048 |
§ | a€1,427 million increase in revenues from foreign operations (from€1,246 million to€2,673 million), of which€669 million relating to international electricity trading,€300 million to Spanish generation companies, and€448 million to foreign distribution companies (of which€298 million recorded by the new Romanian companies Electrica Banat and Electrica Dobrogea, which were acquired on April 28, 2005); |
§ | growth of€334 million in revenues related to the remuneration of ancillary services, which were launched on April 1, 2004; |
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§ | growth of€101 million in revenues for the transport and sale of electricity in the domestic free and regulated markets; |
§ | the award of€100 million in contributions from the Electricity Equalization Fund and similar items related to the recovery of charges for green certificates incurred in 2002 and 2003. |
§ | recognition in the amount of€1,068 of non-recurring revenues in 2004 relating to the attribution, with a decree issued on August 6, 2004 by the Ministry for Productive Activities, of the right to reimbursement of the non-recoverable generation costs and the stranded costs related to Nigerian gas incurred for the period 2000-2003; |
§ | a reduction of€448 million (down 50.1%) in sales of fuels for trading purposes due to a decline in volumes handled during the year. The contraction was due primarily to Enel Trade’s greater focus on the supply of gas to Group companies; |
§ | a€319 million decline in revenues for contract work in progress due to the reduction in engineering and construction for third parties both in Italy and abroad; |
§ | recognition in 2005 of€338 million of previous years’ regulatory items relating to reserve services provided to the ISO. |
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Millions of euro | ||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||
Electricity from third parties | 14,321 | 10,380 | 3,941 | |||||||||
Consumption of fuel for electricity generation | 3,910 | 3,598 | 312 | |||||||||
Fuel for trading and gas for resale to end-users | 1,604 | 1,795 | (191 | ) | ||||||||
Materials | 798 | 1,027 | (229 | ) | ||||||||
Personnel | 2,762 | 3,224 | (462 | ) | ||||||||
Services, leases and rentals | 3,057 | 3,106 | (49 | ) | ||||||||
Other operating costs | 911 | 783 | 128 | |||||||||
Capitalized expenses | (1,049 | ) | (973 | ) | (76 | ) | ||||||
Total | 26,314 | 22,940 | 3,374 |
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§ | an increase in leasing and rental costs of€36 million due, essentially, to the sale of NewReal in 2004; |
§ | an increase in fees for the use of water in power generation in the amount of€14 million; |
§ | an increase of€11 million for sales services, primarily in the Networks, Infrastructure and Sales Divisions. |
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Millions of euro | ||||||||||||
at Dec. 31, 2005 | at Dec. 31, 2004 | 2005-2004 | ||||||||||
Net non-current assets: | ||||||||||||
- Property, plant and equipment and intangible assets | 30,795 | 40,064 | (9,269 | ) | ||||||||
- Goodwill | 1,575 | 6,709 | (5,134 | ) | ||||||||
- Investments accounted for using the equity method | 1,797 | 190 | 1,607 | |||||||||
- Other non-current assets (net) | 1,469 | (266 | ) | 1,735 | ||||||||
Total | 35,636 | 46,697 | (11,061 | ) | ||||||||
Net current assets: | ||||||||||||
- Trade receivables | 8,316 | 8,027 | 289 | |||||||||
- Inventories | 884 | 1,345 | (461 | ) | ||||||||
- Other current assets (liabilities) and net receivables from Electricity Equalization Fund | (1,882 | ) | (1,798 | ) | (84 | ) | ||||||
- Trade payables | (6,610 | ) | (6,818 | ) | 208 | |||||||
Total | 708 | 756 | (48 | ) | ||||||||
Gross capital employed | 36,344 | 47,453 | (11,109 | ) | ||||||||
Provisions: | ||||||||||||
- Post-employment and other employee benefits | (2,662 | ) | (2,910 | ) | 248 | |||||||
- Provisions for risks and charges and net deferred taxes | (1,954 | ) | (963 | ) | (991 | ) | ||||||
Total | (4,616 | ) | (3,873 | ) | (743 | ) | ||||||
Net capital employed | 31,728 | 43,580 | (11,852 | ) | ||||||||
Total shareholders’ equity | 19,416 | 19,066 | 350 | |||||||||
Net financial debt | 12,312 | 24,514 | (12,202 | ) |
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§ | the fair value recognition of the 5.12% stake in Terna (€213 million) and the 5.2% stake in Weather Investments Srl (€286 million); |
§ | the reclassification of the Electricity Equalization Fund receivable for the portion of repayment of the stranded costs due beyond one year (€847 million); |
§ | recognition of the deposit for the purchase of a 66% stake in the share capital of Slovenské Elektrárne (€168 million); |
§ | lower net financial liabilities related to hedging derivatives transactions in the amount of€75 million. |
§ | an increase intrade receivablesin the amount of€289 million, due primarily to the increase in receivables for the sale and transport of electricity and gas and the consolidation of the Romanian companies, net of the deconsolidation of Wind and Terna; |
§ | a decrease ininventoriesin the amount of€461 million, related primarily to plant construction and maintenance activities of the Networks and Infrastructure Division, as well as to the deconsolidation of Wind and Terna; |
§ | an increase of€84 million inother current liabilities (net). Excluding the reclassification of€847 million to non-current assets related to the Electricity Equalization Fund receivable,other current liabilities (net)fell by€763 million, due mainly to the following transactions: |
- | a decline of€246 million in other current liabilities related primarily to the deconsolidation of Wind and Terna, which was partially offset by the acquisition and consolidation of the Romanian companies; | ||
- | an increase in other current assets of€258 million, essentially connected with the increase in Single Buyer receivables for the Networks, Infrastructure and Sales Divisions; |
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- | an increase of€406 million in net tax receivables as a result of the payment of€1,815 million, primarily as a payment on account, and the recognition of current taxes for the year in the amount of€1,412 million; | ||
- | a decrease in net financial liabilities related to derivative transactions in the amount of€173 million; | ||
- | a reduction of€333 million in the net VAT receivable; |
§ | a reduction of€208 million intrade payablesdue to the deconsolidation of Wind and Terna, which was partially offset by the increase in payables for the purchase of energy by the Networks, Infrastructure and Sales Divisions. |
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Millions of euro | ||||||||||||
at Dec. 31, 2005 | at Dec. 31, 2004 | 2005–2004 | ||||||||||
Long-term debt: | ||||||||||||
- Bank loans | 2,782 | 11,101 | (8,319 | ) | ||||||||
- Bonds | 8,043 | 8,866 | (823 | ) | ||||||||
- Other loans | 142 | 324 | (182 | ) | ||||||||
Long-term debt | 10,967 | 20,291 | (9,324 | ) | ||||||||
- Long-term financial receivables | (63 | ) | (1,595 | ) | 1,532 | |||||||
Net long-term debt | 10,904 | 18,696 | (7,792 | ) | ||||||||
Short-term debt: | ||||||||||||
Bank loans: | ||||||||||||
- Short-term portion of long-term debt | 399 | 472 | (73 | ) | ||||||||
- Use of revolving credit lines | — | 400 | (400 | ) | ||||||||
- Other short-term bank debt | 970 | 2,160 | (1,190 | ) | ||||||||
Short-term bank debt | 1,369 | 3,032 | (1,663 | ) | ||||||||
- Bonds (short-term portion) | 487 | 875 | (388 | ) | ||||||||
- Other loans (short-term portion) | 49 | 50 | (1 | ) | ||||||||
- Commercial paper | 275 | 2,441 | (2,166 | ) | ||||||||
- Other short-term financial loans | 116 | 191 | (75 | ) | ||||||||
Other short-term debt | 927 | 3,557 | (2,630 | ) | ||||||||
- Long-term financial receivables (short-term portion) | (3 | ) | (2 | ) | (1 | ) | ||||||
- Factoring receivables | (374 | ) | (391 | ) | 17 | |||||||
- Financial receivables from associates | (3 | ) | (15 | ) | 12 | |||||||
- Cash and cash equivalents | (508 | ) | (363 | ) | (145 | ) | ||||||
Net short-term debt | 1,408 | 5,818 | (4,410 | ) | ||||||||
NET FINANCIAL DEBT | 12,312 | 24,514 | (12,202 | ) |
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Millions of euro | ||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||
Cash flows from operating activities | 5,693 | 4,835 | 858 | |||||||||
Cash flows from investing/disinvesting activities | 1,092 | (1,953 | ) | 3,045 | ||||||||
Cash flows from financing activities | (6,654 | ) | (2,966 | ) | (3,688 | ) |
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Continuing operations | Discontinued operations | |||||||||||||||||||||||||||||||||||||||||||
Networks, | Services | Eliminations | Eliminations | |||||||||||||||||||||||||||||||||||||||||
Generation and | Infrastructure, and | and Other | Parent | and | Transmission | and | ||||||||||||||||||||||||||||||||||||||
Millions of euro | Energy Management | Sales | Activities | Company | adjustments | Total | Networks | Telecommunications | adjustments | Total | TOTAL | |||||||||||||||||||||||||||||||||
Revenues from third parties | 12,518 | 20,081 | 374 | 872 | 214 | 34,059 | 711 | 2,604 | (62 | ) | 3,253 | 37,312 | ||||||||||||||||||||||||||||||||
Revenues from other divisions | 1,697 | 341 | 1,286 | 231 | (3,555 | ) | — | 29 | 144 | (173 | ) | — | — | |||||||||||||||||||||||||||||||
Total revenues | 14,215 | 20,422 | 1,660 | 1,103 | (3,341 | ) | 34,059 | 740 | 2,748 | (235 | ) | 3,253 | 37,312 | |||||||||||||||||||||||||||||||
Operating income by division | 2,565 | 2,778 | 154 | 53 | (12 | ) | 5,538 | 406 | 167 | (1 | ) | 572 | 6,110 | |||||||||||||||||||||||||||||||
Net financial income (expense) | — | — | — | — | — | (744 | ) | — | — | — | (240 | ) | (984 | ) | ||||||||||||||||||||||||||||||
Income taxes | — | — | — | — | — | 1,934 | — | — | — | 213 | 2,147 | |||||||||||||||||||||||||||||||||
Net income before capital gains | — | — | — | — | — | 2,860 | — | — | — | 119 | 2,979 | |||||||||||||||||||||||||||||||||
Gains on disposal of assets | — | — | — | — | — | — | — | — | — | 1,153 | 1,153 | |||||||||||||||||||||||||||||||||
Net income (Group and minority interests) | — | — | — | — | — | 2,860 | — | — | — | 1,272 | 4,132 |
Continuing operations | Discontinued operations | |||||||||||||||||||||||||||||||||||||||||||
Networks, | Services | Eliminations | Eliminations | |||||||||||||||||||||||||||||||||||||||||
Generation and | Infrastructure, and | and Other | Parent | and | Transmission | and | ||||||||||||||||||||||||||||||||||||||
Millions of euro | Energy Management | Sales | Activities | Company | adjustments | Total | Networks | Telecommunications | adjustments | Total | TOTAL | |||||||||||||||||||||||||||||||||
Revenues from third parties | 10,070 | 19,105 | 742 | 1,200 | (106 | ) | 31,011 | 967 | 4,474 | (2 | ) | 5,439 | 36,450 | |||||||||||||||||||||||||||||||
Revenues from other divisions | 2,958 | 149 | 1,052 | 449 | (4,608 | ) | — | 50 | 253 | (303 | ) | — | — | |||||||||||||||||||||||||||||||
Total revenues | 13,028 | 19,254 | 1,794 | 1,649 | (4,714 | ) | 31,011 | 1,017 | 4,727 | (305 | ) | 5,439 | 36,450 | |||||||||||||||||||||||||||||||
Operating income by division | 2,531 | 2,693 | 106 | 647 | (107 | ) | 5,870 | 490 | (1,616 | ) | 8 | (1,118 | ) | 4,752 | ||||||||||||||||||||||||||||||
Net financial income (expense) | — | — | — | — | — | (852 | ) | — | — | — | (467 | ) | (1,319 | ) | ||||||||||||||||||||||||||||||
Income taxes | — | — | — | — | — | 2,116 | — | — | — | (618 | ) | 1,498 | ||||||||||||||||||||||||||||||||
Net income before capital gains | — | — | — | — | — | 2,902 | — | — | — | (967 | ) | 1,935 | ||||||||||||||||||||||||||||||||
Gains on disposal of assets | — | — | — | — | — | — | — | — | — | 812 | 812 | |||||||||||||||||||||||||||||||||
Net income (Group and minority interests) | — | — | — | — | — | 2,902 | — | — | — | (155 | ) | 2,747 |
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§ | Electricity: |
- | generation in Italy through Enel Produzione (thermal, hydroelectric, geothermal and wind power); | ||
- | generation abroad through the following companies: Viesgo Generación and Enel Unión Fenosa Renovables (Spain), Maritza (Bulgaria), Enel ESN Energo (Russia), Enel North America (North America), and Enel Latin America (Central and South America); | ||
- | sales on the domestic market to large electricity users (end-users with annual consumption in excess of 100 million kWh) and resellers, through Enel Trade; | ||
- | trading on international markets, also through Enel Trade. |
§ | Energy products, through Enel Trade: |
- | procurement of energy goods for all Group activities (electricity generation, trading, sale of natural gas to end-users); | ||
- | sale of natural gas to distributors; | ||
- | trading on international markets. |
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Millions of euro | ||||||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||||||
Italy | ||||||||||||||||
Revenues | 13,376 | 12,446 | 930 | 7.5 | % | |||||||||||
Gross operating margin | 3,415 | 3,565 | (150 | ) | -4.2 | % | ||||||||||
Operating income | 2,403 | 2,435 | (32 | ) | -1.3 | % | ||||||||||
International operations | ||||||||||||||||
Revenues | 914 | 622 | 292 | 46.9 | % | |||||||||||
Gross operating margin | 290 | 215 | 75 | 34.9 | % | |||||||||||
Operating income | 162 | 96 | 66 | 68.8 | % | |||||||||||
Eliminations | ||||||||||||||||
Revenues | (75 | ) | (40 | ) | (35 | ) | -87.5 | % | ||||||||
Total | ||||||||||||||||
Revenues | 14,215 | 13,028 | 1,187 | 9.1 | % | |||||||||||
Gross operating margin | 3,704 | 3,780 | (76 | ) | -2.0 | % | ||||||||||
Operating income | 2,565 | 2,531 | 34 | 1.3 | % | |||||||||||
Net capital employed | 14,700 | 14,931 | (231 | ) | -1.5 | % | ||||||||||
Operating assets | 19,622 | 18,882 | 740 | 3.9 | % | |||||||||||
Operating liabilities | 4,247 | 3,491 | 756 | 21.7 | % | |||||||||||
Employees at year-end (no.) | 9,904 | 10,828 | (924 | ) | -8.5 | % | ||||||||||
Capital expenditure | 1,027 | 857 | 170 | 19.8 | % |
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47
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On January 13, 2005, the Authority for Electricity and Gas initiated an inquiry regarding pricing on the Power Exchange from January 10 to 14, 2005. Its findings were published in April together with findings on inquiries regarding pricing on the Power Exchange in June 2004 (Resolution no. 25/05).
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On February 23, 2006, with regard to the Emissions Trading Scheme (ETS), which was established to foster the reduction of greenhouse gas emissions, the Ministry for the Environment issued Decree no. DEC/RAS/074/2006 regarding the allocation and issuance of CO2 allowances for the period 2005-2007 pursuant to the provisions of Article 11(1) of Directive 2003/87/EC of the European Parliament and of the Council.
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Millions of kWh | ||||||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||||||
Thermal | 81,823 | 91,854 | (10,031 | ) | -10.9 | % | ||||||||||
Hydroelectric | 24,883 | 28,659 | (3,776 | ) | -13.2 | % | ||||||||||
Geothermal | 5,012 | 5,120 | (108 | ) | -2.1 | % | ||||||||||
Other sources | 369 | 235 | 134 | 57.0 | % | |||||||||||
Total | 112,087 | 125,868 | (13,781 | ) | -10.9 | % |
Millions of kWh | ||||||||||||||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||||||||||||||
High-sulfur fuel oil (S>0.5%) | 5,253 | 6.0 | % | 9,310 | 9.6 | % | (4,057 | ) | -43.6 | % | ||||||||||||||
Low-sulfur fuel oil (S<0.5%) | 10,943 | 12.6 | % | 12,512 | 12.8 | % | (1,569 | ) | -12.5 | % | ||||||||||||||
Total fuel oil | 16,196 | 18.6 | % | 21,822 | 22.4 | % | (5,626 | ) | -25.8 | % | ||||||||||||||
Natural gas | 39,072 | 45.0 | % | 42,007 | 43.1 | % | (2,935 | ) | -7.0 | % | ||||||||||||||
Coal | 31,469 | 36.2 | % | 32,286 | 33.2 | % | (817 | ) | -2.5 | % | ||||||||||||||
Orimulsion and other fuels | 209 | 0.2 | % | 1,273 | 1.3 | % | (1,064 | ) | -83.6 | % | ||||||||||||||
TOTAL | 86,946 | 100.0 | % | 97,388 | 100.0 | % | (10,442 | ) | -10.7 | % |
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Millions of euro | ||||||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||||||
Generation plants: | ||||||||||||||||
- thermal | 487 | 345 | 142 | 41.2 | % | |||||||||||
- hydroelectric | 178 | 174 | 4 | 2.3 | % | |||||||||||
- geothermal | 84 | 55 | 29 | 52.7 | % | |||||||||||
- alternative energy resources | 19 | 70 | (51 | ) | -72.9 | % | ||||||||||
Total generation plants | 768 | 644 | 124 | 19.3 | % | |||||||||||
Other investments in property, plant and equipment | 10 | 22 | (12 | ) | -54.5 | % | ||||||||||
Investments in intangible assets | 20 | 15 | 5 | 33.3 | % | |||||||||||
TOTAL CAPITAL EXPENDITURE | 798 | 681 | 117 | 17.2 | % |
MW | Total | Total | ||||||||||
at Dec. 31, 2005 | at Dec. 31, 2004 | 2005-2004 | ||||||||||
Thermal plants | 26,902 | 26,837 | 65 | |||||||||
Hydroelectric plants | 14,363 | 14,318 | 45 | |||||||||
Geothermal plants | 671 | 642 | 29 | |||||||||
Alternative sources | 280 | 250 | 30 | |||||||||
Total | 42,216 | 42,047 | 169 |
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§ | a€587 million increase in revenues from electricity sales by Enel Trade due primarily to greater trading on international markets; |
§ | recording of prior-year regulatory items in the amount of€438 million, of which€338 million in respect of the remuneration of reserve services provided to the ISO from 2002 to March 31, 2004, and€100 million for the reimbursement of charges incurred in 2002 and 2003 for green certificates. These items were partially offset by the effects of the application of Resolution no. 20/04 of the Authority, which led to an adjustment in the price of energy sold to Enel Distribuzione and to the ISO in March 2004 in the amount of€191 million; |
§ | the increase of€311 million in net revenues from commodity risk management, related essentially to gains on contracts for differences with the Single Buyer; |
§ | a€624 million increase in revenues from the sale of energy generated by Enel Produzione, including the remuneration of ancillary services launched on April 1, 2004; |
§ | a€170 million increase in income from the sale of natural gas to the Sales Division; |
§ | a decrease of€448 million in revenues from the sale of fuel for trading, which was the net result of a€32 million increase in gas sales and a€480 million decline in sales of other fuels. The reduction originated mainly from Enel Trade’s increased focus on the supply of fuels and gas for Group companies; |
§ | the recognition in 2004 of gains of€513 million related to stranded costs incurred during the period 2000-2003. |
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Enel | Enel | Enel Unión | ||||||||||||||||||||||||||||||
North | Latin | Viesgo | Fenosa | |||||||||||||||||||||||||||||
MW | America | America | Group | Renovables | Maritza | Total | Total | |||||||||||||||||||||||||
at Dec. 31, 2005 | at Dec. 31, 2004 | 2005-2004 | ||||||||||||||||||||||||||||||
Thermal | — | — | 1,592 | — | 549 | 2,141 | 2,141 | — | ||||||||||||||||||||||||
Hydroelectric | 313 | 174 | 672 | — | — | 1,159 | 1,129 | 30 | ||||||||||||||||||||||||
Wind | 67 | 24 | — | 321 | — | 412 | 350 | 62 | ||||||||||||||||||||||||
Biomass and biogas | 22 | — | — | — | — | 22 | 21 | 1 | ||||||||||||||||||||||||
Cogeneration | — | — | — | 52 | — | 52 | 52 | — | ||||||||||||||||||||||||
Total | 402 | 198 | 2,264 | 373 | 549 | 3,786 | 3,693 | 93 |
Millions of kWh | ||||||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||||||
Thermal | 9,781 | 8,484 | 1,297 | 15.3 | % | |||||||||||
Hydroelectric | 2,887 | 2,890 | (3 | ) | -0.1 | % | ||||||||||
Other sources | 957 | 947 | 10 | 1.1 | % | |||||||||||
Total | 13,625 | 12,321 | 1,304 | 10.6 | % |
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Millions of euro | ||||||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||||||
Generation plants: | ||||||||||||||||
- thermal | 83 | 110 | (27 | ) | -24.6 | % | ||||||||||
- hydroelectric | 28 | 14 | 14 | 100.0 | % | |||||||||||
- alternative energy sources | 111 | 52 | 59 | 113.5 | % | |||||||||||
Total generation plants | 222 | 176 | 46 | 26.1 | % | |||||||||||
Other investments in property, plant and equipment | 3 | — | 3 | |||||||||||||
Investments in intangible assets | 4 | — | 4 | |||||||||||||
TOTAL | 229 | 176 | 53 | 30.1 | % |
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§ | Networks and Infrastructure, which brings together electricity and gas network management operations; |
§ | Sales, responsible for developing an integrated range of products and services in the field of electricity and gas through specialized distribution channels. |
Millions of euro | ||||||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||||||
Electricity — Domestic operations | ||||||||||||||||
Revenues | 17,905 | 17,474 | 431 | 2.5 | % | |||||||||||
Gross operating margin | 3,303 | 3,228 | 75 | 2.3 | % | |||||||||||
Operating income | 2,487 | 2,505 | (18 | ) | -0.7 | % | ||||||||||
Electricity — International operations | ||||||||||||||||
Revenues | 913 | 391 | 522 | 133.5 | % | |||||||||||
Gross operating margin | 192 | 77 | 115 | 149.4 | % | |||||||||||
Operating income | 143 | 46 | 97 | 210.9 | % | |||||||||||
Electricity — Total | ||||||||||||||||
Revenues | 18,818 | 17,865 | 953 | 5.3 | % | |||||||||||
Gross operating margin | 3,495 | 3,305 | 190 | 5.7 | % | |||||||||||
Operating income | 2,630 | 2,551 | 79 | 3.1 | % | |||||||||||
Gas | ||||||||||||||||
Revenues | 1,602 | 1,396 | 206 | 14.8 | % | |||||||||||
Gross operating margin | 242 | 225 | 17 | 7.6 | % | |||||||||||
Operating income | 148 | 142 | 6 | 4.2 | % | |||||||||||
Eliminations and adjustments | ||||||||||||||||
Revenues | 2 | (7 | ) | 9 | — | |||||||||||
Total | ||||||||||||||||
Revenues | 20,422 | 19,254 | 1,168 | 6.1 | % | |||||||||||
Gross operating margin | 3,737 | 3,530 | 207 | 5.9 | % | |||||||||||
Operating income | 2,778 | 2,693 | 85 | 3.2 | % | |||||||||||
Net capital employed | 13,421 | 12,334 | 1,087 | 8.8 | % | |||||||||||
Operating assets | 23,154 | 20,806 | 2,348 | 11.3 | % | |||||||||||
Operating liabilities | 9,298 | 8,285 | 1,013 | 12.2 | % | |||||||||||
Employees at year-end (no.) | 35,783 | 35,537 | 246 | 0.7 | % | |||||||||||
Capital expenditure | 1,692 | 1,711 | (19 | ) | -1.1 | % |
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The sector includes:
§ | Enel Distribuzione (electricity distribution network serving the free and regulated markets; sale of electricity on the regulated market); |
§ | Deval (activities similar to those of Enel Distribuzione, but limited to the Valle d’Aosta region); |
§ | Enel Energia (sale of electricity on the free market to customers with an annual consumption of less than 100 million kWh); |
§ | Enel Sole (public and artistic lighting) and Enel.si (franchising). |
§ | the Authority must adopt criteria that include the revaluation of infrastructure; |
§ | the Authority must set a risk-free yield which is at least in line with that of long-term government securities, as well as a symmetrical allocation between users and companies of the gains from any greater efficiency achieved compared with the targets set in the price-cap mechanism, which is applied to the rate components that cover operating costs and depreciation. |
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§ | the possibility for distributors to autonomously set the price for the provision of electricity distribution to non-residential end-users, both on the free and regulated markets, in compliance with the revenue constraints set by the Authority (allowed revenues), in line with the regulations in effect for the first regulatory period; |
§ | the application of the Authority’s rates for transmission services, metering services, and the purchase of electricity and its sale on the regulated market; |
§ | the application of the Authority’s rates for residential users, differentiated by amount of power used; |
§ | the possibility for distributors to offer additional rate options to those set by the Authority, subject to the Authority’s approval. |
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With resolution no. 7/06, the Authority established a primary energy savings objective for Enel Distribuzione for 2006 of roughly 170,000 metric tons petroleum equivalent (TPE).
In 2005, in application of Legislative Decree 79/99, procedures continued for the sale by Enel Distribuzione of distribution networks to municipal utilities that request them, as well as for the acquisition of the networks of municipal utilities not entitled to hold concessions.
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Millions of euro | ||||||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||||||
Investments in distribution networks: | ||||||||||||||||
- high-voltage | 164 | 175 | (11 | ) | -6.3 | % | ||||||||||
- medium-voltage | 401 | 411 | (10 | ) | -2.4 | % | ||||||||||
- low-voltage | 754 | 805 | (51 | ) | -6.3 | % | ||||||||||
Total | 1,319 | 1,391 | (72 | ) | -5.2 | % | ||||||||||
Other investments in property, plant and equipment | 118 | 85 | 33 | 38.8 | % | |||||||||||
Investments in intangible assets | 98 | 92 | 6 | 6.5 | % | |||||||||||
TOTAL | 1,535 | 1,568 | (33 | ) | -2.1 | % |
km | no. | km | no. | km | no. | |||||||||||||||||||
at Dec. 31, 2005 | at Dec. 31, 2004 | 2005-2004 | ||||||||||||||||||||||
High-voltage lines | 18,952 | — | 19,114 | — | (162 | ) | — | |||||||||||||||||
Primary substations | — | 2,025 | — | 2,013 | — | 12 | ||||||||||||||||||
Medium-voltage lines | 335,151 | — | 335,841 | — | (690 | ) | — | |||||||||||||||||
Secondary substations | — | 411,404 | — | 410,657 | — | 747 | ||||||||||||||||||
Low-voltage lines | 736,026 | — | 734,890 | — | 1,136 | — |
§ | a€553 million increase in the transport and sale of electricity to end-users for Enel Distribuzione and Deval, essentially attributable to the adjustment of the rate component connected with the cost of electricity purchases. This increase was partially offset by a decline in sales to resellers in the amount of€252 million as a result of the start of operations with the Single Buyer on April 1, 2004. In 2004, such |
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revenues included the upward revision of estimates made at December 31, 2003 of volumes of electricity distributed and sold in 2003, not yet measured and billed; | ||
§ | a€168 million increase in revenues recorded by Enel Energia due both to higher quantities sold and higher average unit prices; | |
§ | a€135 million decrease in revenues related to bonuses received for electricity service quality and continuity following the award in 2004 of bonuses related to 2003 and 2004. This reduction was offset by lower charges related to the promotion of energy efficiency and green certificates for a total of€68 million; | |
§ | an increase in capital gains on disposals in the amount of€89 million, primarily related to the sale of the business unit involved in the distribution and sale of electricity in the Trento province; | |
§ | a€41 million decrease in revenues from franchising activities (Enel.si). |
Millions of kWh | Millions of kWh | |||||||||||||||||||||||||||||||
Transported | Sold on the | Transported | Sold on the | |||||||||||||||||||||||||||||
for the free | regulated | Millions | for the free | regulated | Millions | |||||||||||||||||||||||||||
market | market | Total | of euro | market | market | Total | of euro | |||||||||||||||||||||||||
2005 | 2004 | |||||||||||||||||||||||||||||||
High-voltage | 46,212 | 5,319 | 51,531 | 611 | 45,083 | 4,827 | 49,910 | 529 | ||||||||||||||||||||||||
Medium-voltage | 67,060 | 20,247 | 87,307 | 2,641 | 63,372 | 23,966 | 87,338 | 2,782 | ||||||||||||||||||||||||
Low-voltage | 8,098 | 104,111 | 112,209 | 12,260 | 5,236 | 108,168 | 113,404 | 11,791 | ||||||||||||||||||||||||
Total | 121,370 | 129,677 | 251,047 | 15,512 | 113,691 | 136,961 | 250,652 | 15,102 |
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Millions | Millions | Millions | Millions | Millions | Millions | |||||||||||||||||||
of euro | of kWh | of euro | of kWh | of euro | of kWh | |||||||||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||||||||||||||
Sales to eligible end-users | 801 | 8,326 | 643 | 7,348 | 158 | 978 | ||||||||||||||||||
Sales to other operators | 6 | 100 | 5 | 113 | 1 | (13 | ) | |||||||||||||||||
Intragroup adjustments | — | — | 7 | — | (7 | ) | — | |||||||||||||||||
Total | 807 | 8,426 | 655 | 7,461 | 152 | 965 |
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Millions of euro | ||||||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||||||
Investments in distribution networks: | ||||||||||||||||
- high-voltage | 18 | 16 | 2 | 12.5 | % | |||||||||||
- medium-voltage | 24 | 18 | 6 | 33.3 | % | |||||||||||
- low-voltage | 20 | 10 | 10 | 100.0 | % | |||||||||||
Total distribution networks | 62 | 44 | 18 | 40.9 | % | |||||||||||
Other investments in property, plant and equipment | 6 | 9 | (3 | ) | -33.3 | % | ||||||||||
TOTAL | 68 | 53 | 15 | 28.3 | % |
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§ | Enel Rete Gas, Avisio Energia and Co.Im Gas, owners of the distribution networks and the related concessions for their management, which are granted at the local level; | |
§ | Enel Gas, which handles the sale of gas to end-users. This segment of the market does not require a concession and has been completely liberalized since January 1, 2003. |
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Millions of euro | ||||||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||||||
Investments in gas distribution networks | 70 | 80 | (10 | ) | -12.5 | % | ||||||||||
Other investments in property, plant and equipment | 2 | 2 | — | — | ||||||||||||
Investments in intangible assets | 17 | 9 | 8 | 88.9 | % | |||||||||||
Total | 89 | 91 | (2 | ) | -2.2 | % |
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Millions of euro | ||||||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||||||
Parent Company | ||||||||||||||||
Revenues | 1,103 | 1,649 | (546 | ) | -33.1 | % | ||||||||||
Gross operating margin | 67 | 652 | (585 | ) | -89.7 | % | ||||||||||
Operating income | 53 | 647 | (594 | ) | -91.8 | % | ||||||||||
Employees at year-end (no.) | 569 | 590 | (21 | ) | -3.6 | % | ||||||||||
Capital expenditure | 11 | 10 | 1 | 10.0 | % | |||||||||||
Services and Other Activities | ||||||||||||||||
Revenues | 1,660 | 1,794 | (134 | ) | -7.5 | % | ||||||||||
Gross operating margin | 249 | 214 | 35 | 16.4 | % | |||||||||||
Operating income | 154 | 106 | 48 | 45.3 | % | |||||||||||
Net capital employed | 639 | 885 | (246 | ) | -27.8 | % | ||||||||||
Operating assets | 2,927 | 3,510 | (583 | ) | -16.6 | % | ||||||||||
Operating liabilities | 2,377 | 3,981 | (1,604 | ) | -40.3 | % | ||||||||||
Employees at year-end (no.) | 5,522 | 3,826 | 1,696 | 44.3 | % | |||||||||||
Capital expenditure | 99 | 112 | (13 | ) | -11.6 | % |
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§ | the merger of Enel Facility Management and Enel.it into Ape Gruppo Enel took place with effect from January 1, 2005. The company resulting from the merger assumed the name Enel Ape Srl; | |
§ | on January 1, 2005, Enel Ape acquired the information and communication technology units of Enel Distribuzione and Enel Produzione. This led to Enel Ape taking on an additional 234 people; | |
§ | on April 1, 2005, Enel Ape acquired the administration units of Enel SpA, Enel Distribuzione, and Enel Produzione, which led to the addition of 957 employees for Enel Ape; | |
§ | On July 1, 2005, the Group companies transferred their services units to Enel Ape, with the consequent transfer of all related contracts and 932 employees. |
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Millions of euro | ||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||
Operating income | 572 | (1,118 | ) | 1,690 | ||||||||
Net financial expense | (240 | ) | (467 | ) | 227 | |||||||
Income taxes | 213 | (618 | ) | 831 | ||||||||
Net income before capital gains | 119 | (967 | ) | 1,086 | ||||||||
Gains on disposal of equity investments | 1,153 | 812 | 341 | |||||||||
Income from discontinued operations | 1,272 | (155 | ) | 1,427 |
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§ | continue the digital metering project, with the completion of the installation of more than 30 million meters; | |
§ | continue the re-engineering of the processes managed by the Networks, with the objective of improving the quality of service provided to our customers; | |
§ | maintain the optimization of the return on our investments, while improving the level of service quality through a selection process aimed at reducing the risk of failures; | |
§ | develop the electricity market and prepare for the liberalization expected to take place in 2007 with the implementation of new electricity service options, as well as combined electricity and gas packages. |
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§ | the diagnostics systems for the new geothermal plants of Nuova Larderello and Nuova San Martino have been completed and placed in service. They will provide automatic diagnostics capabilities for remotely controlled plants; | |
§ | research has continued into low-cost fuels and into the optimization of combustion processes. Additional studies and testing have examined the combustion system of the recently acquired gas turbines, with the development of innovative solutions for reducing combustion noise, which is responsible for instability problems and operational shutdowns; | |
§ | research and testing as part of the “zero emissions” project has continued, with the successful completion of a number of tests. A technical and financial study for the use of dry cooling towers, replacing the wet towers currently used in the geothermal cycle, was also conducted; | |
§ | the development of technologies and management tools for the full recycling of ash produced in coal-fired thermal plants continued with the refining of technologies to verify the efficiency of the reduction of incompletely combusted material in ash and the production of special-use materials; | |
§ | as part of the “advanced generation techniques” project and the development of renewable resource systems, the “Archimede” project, launched by Enel in cooperation with Enea in 2003, continued last year. The project seeks to develop a new solar energy technology that uses parabolic mirrors and high temperature solar collectors; | |
§ | with regard to the studies into carbon dioxide, we have begun participating in the “Dynamis” project, which is funded by the European Union and seeks to study the |
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optimal configuration and characteristics of an electricity generation system using fossil fuels while separating the carbon dioxide; | ||
§ | in the context of the “Hydrogen Park” consortium (now a limited-liability consortium company), which Enel joined in January 2004, the development and testing of technologies for the production of hydrogen from coal and of an advanced hydrogen-powered thermoelectric cycle has continued. The preliminary project for the design of a 12 MW test hydrogen plant for the generation of electricity and heat, to be installed at the Fusina plant, has been completed. The plant consists of a hydrogen gas turbine with steam injection and exhaust heat recovery, producing very low emissions and high efficiencies. It will be fueled with the hydrogen currently available at the Marghera petrochemical complex; | |
§ | the study of a new process based on the pyrolysis of coal continued. After modeling and laboratory research demonstrated the process’s potential, initial testing of a 3.2 MW plant was carried out at the Bastardo (Perugia) plant. |
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§ | the identification and description of the skills of the key positions in core and support processes, both for Enel as a whole and for the individual Divisions; | |
§ | the extension of the process of evaluating skills, performance and potential. |
§ | strengthening management through action learning and learning tours for young managers already in key corporate positions; | |
§ | supporting change management and excellence and efficiency enhancement; | |
§ | promoting a shared Enel culture and knowledge base through corporate training (for new recruits and new middle and senior management); | |
§ | general campaigns targeting broader employee populations, particularly the corporate social responsibility project, which involved all of the Company’s middle and senior management. |
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§ | strengthening the integration of compensation and evaluation processes; | |
§ | increasing the variable component of compensation linked to company performance; | |
§ | taking selective action with the fixed component of compensation, confirming a merit-based policy aimed at rewarding high-value skills within each professional family. |
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Employees at Dec. 31, 2004 | 61,898 | |||||||
Changes in scope of consolidation: | ||||||||
- Delta | 168 | |||||||
- Enel North America (St. Felicien) | 29 | |||||||
- Electrica Banat | 2,014 | |||||||
- Electica Dobrogea | 1,615 | |||||||
- Enel ESN Energo | 9 | |||||||
- Enel Servicii | 4 | |||||||
- Easygas | 2 | |||||||
- Metanodotti Padani | 12 | |||||||
- Disposal of TLC Group | (8,270 | ) | ||||||
- Disposal of the Terna Group | (2,899 | ) | ||||||
- Disposal of the Trento business unit | (259 | ) | ||||||
- Disposal of the Rete Gas business unit | (15 | ) | ||||||
- Disposal of Enel.Hydro | (1 | ) | ||||||
(7,591 | ) | |||||||
Hirings | 979 | |||||||
Terminations of employment | (3,508 | ) | ||||||
(2,529 | ) | |||||||
Employees at Dec. 31, 2005 | 51,778 | |||||||
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§ | to revoke, with regard to the part not yet exercised by the Board of Directors, the enabling authority to increase the share capital granted in December 1999, while confirming all the acts carried out in the exercise of this power; | |
§ | to again grant the Board of Directors the authority to increase share capital by a maximum of€60,630,750 (slightly less than 1% of capital at the time), endowed with the same characteristics as the authority granted in December 1999 and potentially involving all the executives of Enel and/or its subsidiaries pursuant to Article 2359 of the Civil Code. |
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§ | to revoke, with regard to the part not yet exercised by the Board of Directors, the enabling authority to increase share capital granted in May 2001, while confirming all the acts carried out in the exercise of this power; | |
§ | to grant the Board of Directors new authority to increase share capital by a maximum of€47,624,005 (about 0.8% of capital at the time), endowed with the same characteristics as the authority granted in December 1999 and May 2001 and to be used to serve the stock-option plan for 2003, as already approved by the Board of Directors in April 2003. |
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2001 Plan | 2002 Plan | 2003 Plan | 2004 Plan | 2005 Plan | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(year of expiration: 2005) | (year of expiration: 2007) | (year of expiration: 2008) | (year of expiration: 2009) | (year of expiration: 2010) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average exercise | Exercise | Exercise | Exercise | Market | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number | Exercise price | Market price | Number | price | Market price | Number | price | Market price | Number | price | Market price | Number | price | price | ||||||||||||||||||||||||||||||||||||||||||||||
Rights | of options | (euro) | (euro) | of options | (euro) | (euro) | of options | (euro) | (euro) | of options | (euro) | (euro) | of options | (euro) | (euro) | |||||||||||||||||||||||||||||||||||||||||||||
Rights outstanding at January 1, 2005 | 16,690,142 | 7.272 | 7.240 | 12,819,944 | 6.430 | 7.240 | 28,044,186 | 5.240 | 7.240 | 37,296,550 | 6.242 | 7.240 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
New rights granted in 2005 | — | — | — | — | — | — | — | — | — | — | — | — | 28,757,000 | 7.273 | 7.425 | (*) | ||||||||||||||||||||||||||||||||||||||||||||
Rights exercised in 2005 | 16,301,333 | 7.272 | 7.432 | (*) | 10,697,094 | 6.431 | 7.494 | (*) | 14,158,373 | 5.240 | 7.449 | (*) | 12,392,982 | 6.242 | 7.114 | (*) | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Rights lapsed in 2005 | 388,809 | 7.272 | 7.322 | (*) | 48,500 | 6.426 | 7.229 | (*) | 50,726 | 5.240 | 7.229 | (*) | 394,500 | 6.242 | 7.084 | (*) | 28,757,000 | (**) | 7.273 | 6.640 | (*) | |||||||||||||||||||||||||||||||||||||||
Rights outstanding at December 31, 2005 | — | 7.272 | 6.632 | 2,074,350 | 6.426 | 6.632 | 13,835,087 | 5.240 | 6.632 | 24,509,068 | 6.242 | 6.632 | — | 7.273 | 6.632 | |||||||||||||||||||||||||||||||||||||||||||||
- exercisable at December 31, 2005 | — | 7.272 | 6.632 | 2,074,350 | 6.426 | 6.632 | 2,203,002 | 5.240 | 6.632 | 4,718,900 | 6.242 | 6.632 | — | 7.273 | 6.632 |
(*) | Market prices are calculated on the basis of Consob instructions set out in recommendation no. 11508 of February 15, 2000 regarding disclosures on stock option plans. | |
(**) | Declared lapsed by the Enel Board of Directors at the meeting of March 22, 2006. |
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§ | a Board of Directors entrusted with the management of the Company; | |
§ | a Board of Statutory Auditors responsible for (i) ensuring compliance with the law and the Company’s bylaws, in addition to the application of correct management |
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principles in the carrying out of business, and (ii) checking the adequacy of the Company’s organizational structure, internal audit system and administration; | ||
§ | Shareholders’ Meetings, called to resolve — either in an Ordinary or an Extraordinary session — among other things on (i) the appointment and removal of members of the Board of Directors and of the Board of Statutory Auditors, as well as their compensation and responsibilities, (ii) the approval of the financial statements and the allocation of net income, (iii) the acquisition and sale of own shares, (iv) amendments to the Company’s by-laws, and (v) the issue of convertible bonds. |
§ | establishes the system of corporate governance within the Company and the Group and sees to the constitution and the definition of the functions of the Board’s internal committees, whose members it appoints; |
§ | delegates and revokes the powers of the Chief Executive Officer, defining their content, limits and the procedures, if any, for exercising them. On the basis of the delegations in force, the Chief Executive Officer is vested with the broadest powers |
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for the management of the Company, with the exception of those attributed otherwise by the law or the Company’s bylaws or reserved to the Board of Directors according to the resolutions of the latter and described below; | ||
§ | receives, together with the Board of Statutory Auditors, constant and exhaustive information from the Chief Executive Officer regarding the activities carried out in the exercise of his powers, which is summarized in a special quarterly report. In particular, with regard to all the most significant transactions carried out using the powers of his office (including atypical or unusual transactions or transactions with related parties whose approval is not reserved to the Board of Directors), the Chief Executive Officer reports to the Board on (i) the features of the transactions, (ii) the parties concerned and any relation they might have with Group companies, (iii) the procedures for determining the considerations concerned, and (iv) the related effects on the income statement and the balance sheet; | |
§ | determines, on the basis of the proposals formulated by the related Committee and having received the opinion of the Board of Statutory Auditors, the compensation of the Chief Executive Officer and of other Directors holding specific offices; | |
§ | evaluates, on the basis of the analyses and proposals made by the special Committee, the criteria adopted for the compensation of the top management of the Company and the Group and decides with regard to the adoption of the incentive plans addressed to executives; | |
§ | defines the general organizational set-up of the Company and the Group and the corporate structure of the latter, verifying their adequacy; | |
§ | reviews and approves strategic, business and financial plans. In this context, the current division of powers within the Company specifically provides for the Board of Directors to resolve on the approval of: |
– | the annual budget and the long-term plan (which include the aggregates of the annual budgets and long-term plans of Group companies); | ||
– | strategic agreements, also determining — upon proposal by the Chief Executive Officer and after the Chairman has expressed his opinion — the strategic objectives of the Company and the Group; |
§ | examines and approves transactions having a significant impact on the balance sheet, income statement or cash-flow statement, particularly in cases where they are carried out with related parties or otherwise characterized by a potential conflict of interest. | |
§ | In particular, all financial transactions of a significant size — by which is meant taking on loans exceeding the value of€50 million, as well as granting loans and issuing guarantees in favor of third parties exceeding the value of€25 million — must be approved beforehand (if they concern the Company) or evaluated (if they refer to Group companies) by the Board of Directors. In addition, the acquisition |
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and disposal of equity investments amounting to more than€25 million must be approved beforehand (if they are carried out directly by the Company) or subjected to evaluations (if they concern Group companies) by the same Board of Directors. Finally, the latter approves agreements (with ministries, local governments, etc.) that entail expenditure commitments exceeding€25 million; | ||
§ | provides for the exercise of voting rights at Shareholders’ Meetings of the companies directly controlled by the Parent Company and designates the Directors and Statutory Auditors of the aforesaid companies; | |
§ | appoints the General Manager and grants the related powers; | |
§ | evaluates the general management of the Company, with particular reference to conflicts of interest, using information received from the Chief Executive Officer and the Internal Control Committee, and verifies periodically the achievement of the objectives set; | |
§ | formulates proposals to submit to Shareholders’ Meetings and reports to the Shareholders at the latter. |
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§ | Piero Gnudi, 67, Chairman (designated on the slate presented by the Ministry of the Economy and Finance). |
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§ | Fulvio Conti, 58, Chief Executive Officer and General Manager (designated on the slate presented by the Ministry of the Economy and Finance). |
§ | Giulio Ballio, 66, Director (designated on the slate presented by institutional investors). |
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§ | Augusto Fantozzi, 65, Director (designated on the slate presented by institutional investors). |
§ | Alessandro Luciano, 54, Director (designated on the slate presented by the Ministry of the Economy and Finance). |
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§ | Fernando Napolitano, 41, Director (designated on the slate presented by the Ministry of the Economy and Finance). |
§ | Francesco Taranto, 65, Director (designated on the slate presented by institutional investors). |
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§ | Gianfranco Tosi, 58, Director (designated on the slate presented by the Ministry of the Economy and Finance). |
§ | Francesco Valsecchi, 41, Director (designated on the slate presented by the Ministry of the Economy and Finance). |
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(i) | do not (directly, indirectly or on behalf of third parties) have, nor have recently had, financial relations with the Company, its subsidiaries, its |
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executive Director or the controlling shareholder of such importance as to influence their independence of judgment; | ||
(ii) | do not hold (directly, indirectly or on behalf of third parties) an amount of shares in the Company that would allow them to exercise control or considerable influence over it, even through shareholders’ agreements; | |
(iii) | are not part of the immediate family of the executive Director or of individuals who are in the situations described in points (i) and (ii) above. |
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§ | to assist the Board of Directors in establishing the guidelines for the internal audit system and in periodically checking the adequacy and the actual functioning of the latter; | |
§ | to evaluate the audit working plan drawn up by the executive in charge of internal auditing and receive his periodic reports; | |
§ | to evaluate, together with the accounting heads of the Company and the external auditor, the adequacy of the accounting standards used and their uniformity for the purpose of preparing the consolidated financial statements; | |
§ | to evaluate the proposals made by external auditors applying for appointment, as well as the audit plan prepared for the external audit and the results contained in the external auditor’s letter and report; | |
§ | to report periodically to the Board of Directors on the work performed and the adequacy of the internal audit system; |
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§ | to perform any other task delegated by the Board of Directors, in particular concerning relations with the external auditor. |
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§ | Eugenio Pinto, 46, Chairman (designated by the Ministry of the Economy and Finance). |
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§ | Carlo Conte, 58, regular Auditor (designated on the slate presented by the Ministry of the Economy and Finance). |
§ | Franco Fontana, 62, regular Auditor (designated on the slate presented by institutional investors). |
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§ | “line auditing”, made up by the whole of auditing activities that individual operating units or Group companies carry out on their own processes. Such auditing activities are primarily the responsibility of operating executives and are considered an integral part of every corporate process; | |
§ | “internal auditing”, entrusted to the Company’s related department, is aimed essentially at the identification and containment of corporate risk of any nature. Such objective is pursued through the monitoring of line auditing, both in terms of the adequacy of the audits themselves and of the results actually achieved by their application. This audit activity is therefore applied to all corporate processes of the Company and of Group companies. The personnel in charge of said processes is responsible for indicating both the corrective actions deemed necessary and for carrying out follow-up actions aimed at checking the results of the measures suggested. |
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§ | promptly inform the Board of Directors about the existence of such interest, specifying its nature, terms, origin and significance; | |
§ | leave the Board meeting when the matter is discussed if such action does not leave the Board without a quorum. |
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§ | application of the obligations of transparency regarding internal dealing to about 30 important persons in the Group (in addition to the Directors, the regular Statutory Auditors and the General Manager of the Parent Company). In order to ensure sufficient flexibility to the category of important persons, furthermore, it is provided that the aforesaid obligations of transparency may be extended to other persons, the identification of whom is entrusted individually to the Chairman and the Chief Executive Officer of the Parent Company; | |
§ | halving of the threshold value of the transactions of which the market must be informed quarterly (from€50,000 to€25,000) or immediately after they have been carried out (from€250,000 to€125,000); |
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§ | application of the obligations of transparency also to the exercise of stock options or pre-emptive rights by important persons; | |
§ | prohibition for important persons to carry out transactions (other than those regarding pre-emptive rights) during the 30 days preceding the approval of the proposed financial statements of Enel SpA and the half-year report by the latter’s Board of Directors. It is also provided that the aforesaid Board may identify additional blocking periods during the year in conjunction with particular events; | |
§ | establishment of an adequate penalty system for important persons who violate the provisions of the internal dealing code. |
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§ | general principles regarding relations with stakeholders, which abstractly define the reference values guiding the Group in the carrying out of its activities. Among the aforesaid principles, specific mention should be made of the following: honesty, impartiality, confidentiality, shareholder value, the value of human resources, the transparency and completeness of information, service quality, and the protection of the environment; |
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§ | criteria of behavior towards each class of stakeholders, which specify the guidelines and rules that Enel’s officers and employees must follow in order to ensure observance of the general principles and prevent the risk of unethical behavior; | |
§ | implementation mechanisms, which describe the control system devised to ensure observance of the code of ethics and its continual improvement. |
§ | honest and transparent financial management, which gives due consideration to conflicts of interests; | |
§ | fair, comprehensible, complete, exact and prompt information in the documents sent to the authorities supervising financial markets and in all other public notices; | |
§ | compliance with government rules and regulations; | |
§ | the establishment of internal procedures aimed at ensuring that any violations of the provisions of the code are promptly communicated to the persons designated therein; | |
§ | adequate public transparency regarding observance of the provisions of the code. |
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Nomination | Executive | |||||||||||||||||||||||||||||||||
Number of | Internal Control | Compensation | Committee | Committee | ||||||||||||||||||||||||||||||
Non- | other offices | Committee | Committee | (if any) | (if any) | |||||||||||||||||||||||||||||
Office | Members | Executive | Executive | Independent | **** | ** | *** | **** | *** | **** | *** | **** | *** | **** | ||||||||||||||||||||
Chairman | Gnudi Piero(1) | X | X | 100 | % | 4 | X | 100 | % | |||||||||||||||||||||||||
Chief Executive Officer/General Manager | Conti Fulvio(3) | X | 100 | % | — | |||||||||||||||||||||||||||||
Chief Executive Officer/General Manager | Scaroni Paolo(2) | X | 100 | % | 4 | |||||||||||||||||||||||||||||
Director | Ballio Giulio*(3) | X | X | 73 | % | — | X | 100 | % | |||||||||||||||||||||||||
Director | Fantozzi Augusto*(3) | X | X | 100 | % | 1 | X | 100 | % | Non Existent | Non Existent | |||||||||||||||||||||||
Director | Luciano Alessandro(3) | X | X | 100 | % | 1 | X | 100 | % | |||||||||||||||||||||||||
Director | Miccio Mauro(2) | X | X | 100 | % | 1 | X | 100 | % | |||||||||||||||||||||||||
Director | Morganti Franco*(2) | X | X | 100 | % | 1 | X | 100 | % | |||||||||||||||||||||||||
Director | Napolitano Fernando(1) | X | X | 86 | % | 2 | X | 100 | % | |||||||||||||||||||||||||
Director | Taranto Francesco*(1) | X | X | 100 | % | 4 | X | 100 | % | �� | ||||||||||||||||||||||||
Director | Tosi Gianfranco(1) | X | X | 100 | % | — | X | 80 | % | X | 100 | % | ||||||||||||||||||||||
Director | Valsecchi Francesco(3) | X | X | 100 | % | 1 | X | 100 | % |
Number of meetings held in 2005: Board of Directors:21; Internal Control Committee:7; Compensation Committee:13; Nomination Committee:N.A.; Executive Committee:N.A.
(1) | In office for all of 2005. | |
(2) | In office until May 2005. | |
(3) | In office from May 2005. | |
* | The presence of an asterisk indicates that the director was designated on a slate presented by minority shareholders. | |
** | This column shows the number of financial, banking, insurance or other large companies or companies that are listed on regulated markets, including foreign ones, in which the person concerned serves as director or member of the board of auditors. | |
*** | In these columns, an “x” indicates the committees of which each director is a member. It should be noted that during 2005 Gianfranco Tosi was first a member of the Internal Control Committee (January-May) and then of the Compensation Committee (July-December). | |
**** | These columns show the percentages of the meetings of, respectively, the Board of Directors and the committees attended by each director, taking into account the period of time during which he was in office in 2005. All absences were justified. |
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Percentage of Board | ||||||||||
Office | Members | meetings attended | Number of other offices** | |||||||
Chairman | Pinto Eugenio*** | 100 | % | 3 | ||||||
Chairman | Provasoli Angelo**** | 100 | % | — | ||||||
Regular Auditor | Conte Carlo | 100 | % | — | ||||||
Regular Auditor | Fontana Franco* | 100 | % | — | ||||||
Alternate Auditor | Giordano Giancarlo | N.A. | — | |||||||
Alternate Auditor | Sbordoni Paolo* | N.A. | — |
* | The presence of an asterisk indicates that the statutory auditor was designated on a slate presented by minority shareholders. |
** | This column shows the number of other companies listed on regulated Italian markets in which the person concerned serves as director or member of the board of auditors. | |
*** | In office from May 2005. | |
**** | In office until May 2005. |
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Summary of the reasons for any deviation | ||||||
Yes | No | from the recommendations of the Code | ||||
Delegation system and transactions with related parties | ||||||
Has the board of directors delegated powers and established: | X | |||||
A) their limits | X | |||||
B) how they are to be exercised | X | |||||
C) how often it is to be informed? | X | |||||
Has the board of directors reserved the power to examine and approve transactions having a significant impact on the balance sheet, income statement or cash-flow statement (including transactions with related parties)? | X | |||||
Has the board established the guidelines and criteria for identifying “significant” transactions? | X | |||||
Are the aforesaid guidelines and criteria described in the report? | X | |||||
Has the board of directors established special procedures for the examination and approval of transactions with related parties? | X | |||||
Are the procedures for approving transactions with related parties described in the report? | X | |||||
Procedures of the most recent election of the board of directors and the board of statutory auditors | ||||||
Were the candidacies for the office of director filed at least ten days beforehand? | X | |||||
Were the candidacies for the office of director accompanied by exhaustive information? | X | |||||
Were the candidacies for the office of director accompanied by statements as to whether or not they qualified as independent? | X | |||||
Were the candidacies for the office of statutory auditor filed at least ten days beforehand? | X | This procedure was duly observed the last time the entire board of statutory auditors was elected (2004), when the slate-vote mechanism was applied. When the chairman of the board of statutory auditors was replaced (during 2005), the candidacies were not filed beforehand because the election did not take place by slate vote. | ||||
Were the candidacies for the office of statutory auditor accompanied by exhaustive information? | X | |||||
Shareholders’ meetings | ||||||
Has the company approved rules for shareholders’ meetings? | X | |||||
Are the rules attached to the report or is it stated where they can be obtained/downloaded? | X | |||||
Internal audit | �� | |||||
Has the company appointed the person in charge of internal auditing? | X | |||||
Is the person in charge hierarchically independent of heads of operating areas? | X | |||||
Organizational position of the person in charge of internal auditing | Head of the internal auditing department | |||||
Investor relations | ||||||
Has the company appointed a head of investor relations? | X | |||||
Organizational unit of the head of investor relations and related contact information | § | Relations with institutional investors: Investor Relations — Viale Regina Margherita, 137 - 00198 Rome, Italy — tel. ++39.06.83053437 - fax ++39.06.83053771 - e-mail:investor.relations@enel.it | ||||
§ | Relations with retail shareholders: Department of Corporate Affairs — Viale Regina Margherita, 137 - 00198 Rome, Italy - - tel. ++39.06.83052081 - fax ++39.06.83052129 - e-mail:azionisti.retail@enel.it |
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Millions of euro | Note | |||||||||||
2005 | 2004 | |||||||||||
A | Revenues | |||||||||||
Revenues from sales and services | 6 | 32,272 | 28,658 | |||||||||
Other revenues | 7 | 1,787 | 2,353 | |||||||||
[Subtotal] | 34,059 | 31,011 | ||||||||||
B | Costs | |||||||||||
Raw materials and consumables | 8 | 20,633 | 16,800 | |||||||||
Services | 9 | 3,057 | 3,106 | |||||||||
Personnel | 10 | 2,762 | 3,224 | |||||||||
Depreciation, amortization and impairment losses | 11 | 2,207 | 2,201 | |||||||||
Other operating expenses | 12 | 911 | 783 | |||||||||
Capitalized costs | 13 | (1,049 | ) | (973 | ) | |||||||
[Subtotal] | 28,521 | 25,141 | ||||||||||
C | Operating income | 5,538 | 5,870 | |||||||||
D | Financial income (expense) and income (expense) from investments | 14 | (714 | ) | (827 | ) | ||||||
E | Income (expense) from investments accounted for using the equity method | 15 | (30 | ) | (25 | ) | ||||||
F | Income before taxes | 4,794 | 5,018 | |||||||||
G | Income taxes | 16 | 1,934 | 2,116 | ||||||||
H | Income from continuing operations | 2,860 | 2,902 | |||||||||
I | Income from discontinued operations | 5 | 1,272 | (155 | ) | |||||||
L | Income for the period (shareholders of Parent Company and minority interests) | 4,132 | 2,747 | |||||||||
M | Attributable to minority interests | 237 | 116 | |||||||||
N | Attributable to shareholders of Parent Company | 3,895 | 2,631 | |||||||||
Earnings per share (euro) | 0.67 | 0.45 | ||||||||||
Diluted earnings per share (euro) | 0.67 | (1) | 0.45 | |||||||||
Earnings from continuing operations per share | 0.46 | 0.48 | ||||||||||
Diluted earnings from continuing operations per share | 0.46 | (1) | 0.48 | |||||||||
Earnings from discontinued operations per share | 0.21 | (0.03 | ) | |||||||||
Diluted earnings from discontinued operations per share | 0.21 | (1) | (0.03 | ) |
(1) | Calculated by adjusting the average number of ordinary shares for the period (6,171,352,406) to take account of the diluting effect of stock options for the period (€29 million), |
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Millions of euro | Note | |||||||||||
ASSETS | at Dec, 31. 2005 | at Dec, 31. 2004 | ||||||||||
A | Non-current assets | |||||||||||
Property, plant and equipment | 17 | 30,188 | 36,702 | |||||||||
Intangible assets | 18 | 2,182 | 10,071 | |||||||||
Deferred tax assets | 19 | 1,778 | 2,953 | |||||||||
Investments accounted for using the equity method | 20 | 1,797 | 190 | |||||||||
Non-current financial assets | 21 | 836 | 1,776 | |||||||||
Other non-current assets | 22 | 975 | 154 | |||||||||
[Total] | 37,756 | 51,846 | ||||||||||
B | Current assets | |||||||||||
Inventories | 23 | 884 | 1,345 | |||||||||
Trade receivables | 24 | 8,316 | 8,027 | |||||||||
Tax receivables | 25 | 789 | 854 | |||||||||
Current financial assets | 26 | 569 | 509 | |||||||||
Cash and cash equivalents | 27 | 476 | 331 | |||||||||
Other current assets | 28 | 1,712 | 2,466 | |||||||||
[Total] | 12,746 | 13,532 | ||||||||||
TOTAL ASSETS | 50,502 | 65,378 |
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Millions of euro | Note | |||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | at Dec. 31, 2005 | at Dec. 31, 2004 | ||||||||||
C | Equity attributable to the shareholders of the Parent Company | 29 | ||||||||||
Share capital | 6,157 | 6,104 | ||||||||||
Other reserves | 4,219 | 3,878 | ||||||||||
Retained earnings (losses carried forward) | 5,955 | 7,354 | ||||||||||
Net income for the year(1) | 2,726 | 617 | ||||||||||
[Total] | 19,057 | 17,953 | ||||||||||
D | Equity attributable to minority interests | 359 | 1,113 | |||||||||
TOTAL SHAREHOLDERS’ EQUITY | 19,416 | 19,066 | ||||||||||
E | Non-current liabilities | |||||||||||
Long-term loans | 30 | 10,967 | 20,291 | |||||||||
Termination indemnities and other employee benefits | 31 | 2,662 | 2,910 | |||||||||
Provisions for risks and charges | 32 | 1,267 | 1,404 | |||||||||
Deferred tax liabilities | 33 | 2,464 | 2,512 | |||||||||
Non-current financial liabilities | 34 | 262 | 370 | |||||||||
Other non-current liabilities | 35 | 18 | 218 | |||||||||
[Total] | 17,640 | 27,705 | ||||||||||
F | Current liabilities | |||||||||||
Short-term loans | 36 | 1,361 | 5,192 | |||||||||
Current portion of long-term loans | 30 | 935 | 1,397 | |||||||||
Trade payables | 37 | 6,610 | 6,818 | |||||||||
Income tax payable | 28 | 99 | ||||||||||
Current financial liabilities | 38 | 294 | 493 | |||||||||
Other current liabilities | 39 | 4,218 | 4,608 | |||||||||
[Total] | 13,446 | 18,607 | ||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 50,502 | 65,378 |
(1) | Net of interim dividend, equal to€1,169 million (€2,014 million for 2004). |
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Millions of euro | ||||||||
2005 | 2004 | |||||||
Income for the period (shareholders of Parent Company and minority interests) | 4,132 | 2,747 | ||||||
Adjustments for: | ||||||||
Amortization of intangible assets | 308 | 491 | ||||||
Depreciation of property, plant and equipment | 2,561 | 2,994 | ||||||
Exchange rate gains and losses (including cash and cash equivalents) | 22 | (1 | ) | |||||
Provisions | 781 | 1,042 | ||||||
Financial (income)/expense | 808 | 1,001 | ||||||
Income taxes | 2,147 | 1,498 | ||||||
(Gains)/losses and other non-monetary items | (1,295 | ) | 1,081 | |||||
Cash flows from operating activities before changes in net current assets | 9,464 | 10,853 | ||||||
Increase/(Decrease) in provisions including termination benefits | (814 | ) | (1,078 | ) | ||||
(Increase)/Decrease in inventories | 125 | (39 | ) | |||||
(Increase)/Decrease in trade receivables | (1,919 | ) | (768 | ) | ||||
(Increase)/Decrease in financial and non-financial assets/liabilities | 250 | (1,546 | ) | |||||
Increase/(Decrease) in trade payables | 1,265 | 819 | ||||||
Interest income and other financial income collected | 202 | 341 | ||||||
Interest expense and other financial expense paid | (1,065 | ) | (1,473 | ) | ||||
Income taxes paid | (1,815 | ) | (2,274 | ) | ||||
Cash flows from operating activities (a) | 5,693 | 4,835 | ||||||
Investments in property, plant and equipment | (3,037 | ) | (3,538 | ) | ||||
Investments in intangible assets | (220 | ) | (296 | ) | ||||
Investments in entities (or business units) less cash and cash equivalents acquired | (524 | ) | (126 | ) | ||||
Disposals of entities (or business units) less cash and cash equivalents sold | 4,652 | 1,941 | ||||||
(Increase)/Decrease in other investing activities | 221 | 66 | ||||||
Cash flows from investing/disinvesting activities (b) | 1,092 | (1,953 | ) | |||||
Change in net financial debt | (3,524 | ) | 1,039 | |||||
Dividends paid | (3,472 | ) | (4,256 | ) | ||||
Increase in share capital and reserves due to the exercise of stock options | 339 | 241 | ||||||
Capital contributed by minority shareholders | 3 | 10 | ||||||
Cash flows from financing activities (c) | (6,654 | ) | (2,966 | ) | ||||
Impact of exchange rate fluctuations on cash and cash equivalents (d) | 14 | (5 | ) | |||||
Increase/(Decrease) in cash and cash equivalents (a+b+c+d) | 145 | (89 | ) | |||||
Cash and cash equivalents at beginning of the period | 363 | 452 | ||||||
Cash and cash equivalents at end of the period | 508 | 363 |
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Share capital and reserves attributable to the shareholders of the Parent Company | ||||||||||||||||||||||||||||||||||||||||||||
Translation | Equity | |||||||||||||||||||||||||||||||||||||||||||
of financial | Reserve from | attributable to | Equity | |||||||||||||||||||||||||||||||||||||||||
Share | statements in | measurement of | shareholders | attributable to | ||||||||||||||||||||||||||||||||||||||||
Share | premium | Legal | Statutory | Retained | currencies | financial | Net income | of Parent | minority | |||||||||||||||||||||||||||||||||||
capital | reserve | reserve | reserves | earnings | other than euro | instruments | for the year | Company | interests | Total | ||||||||||||||||||||||||||||||||||
January 1, 2004 | 6,063 | — | 1,453 | 2,215 | 7,382 | 18 | (200 | ) | 2,509 | 19,440 | 181 | 19,621 | ||||||||||||||||||||||||||||||||
Exercise of stock options | 41 | 208 | — | — | (8 | ) | — | — | — | 241 | — | 241 | ||||||||||||||||||||||||||||||||
Other changes | — | — | — | — | (105 | ) | — | — | — | (105 | ) | 816 | 711 | |||||||||||||||||||||||||||||||
Allocation of income | — | — | — | — | 314 | — | — | (314 | ) | — | — | — | ||||||||||||||||||||||||||||||||
Dividends paid | — | — | — | — | — | — | — | (2,195 | ) | (2,195 | ) | — | (2,195 | ) | ||||||||||||||||||||||||||||||
Interim dividends | — | — | — | — | — | — | — | (2,014 | ) | (2,014 | ) | — | (2,014 | ) | ||||||||||||||||||||||||||||||
Net income for year recognized in equity | — | — | — | — | — | (16 | ) | (29 | ) | — | (45 | ) | — | (45 | ) | |||||||||||||||||||||||||||||
Net income for year recognized in income statement | — | — | — | — | — | — | — | 2,631 | 2,631 | 116 | 2,747 | |||||||||||||||||||||||||||||||||
December 31, 2004 | 6,104 | 208 | 1,453 | 2,215 | 7,583 | 2 | (229 | ) | 617 | 17,953 | 1,113 | 19,066 | ||||||||||||||||||||||||||||||||
Exercise of stock options | 53 | 303 | — | — | (17 | ) | — | — | — | 339 | 339 | |||||||||||||||||||||||||||||||||
Change in scope of consolidation | — | — | — | — | — | — | — | — | — | (892 | ) | (892 | ) | |||||||||||||||||||||||||||||||
Other changes | — | — | — | — | (16 | ) | — | — | — | (16 | ) | (7 | ) | (23 | ) | |||||||||||||||||||||||||||||
Dividends paid | — | — | — | — | (1,597 | ) | — | — | (617 | ) | (2,214 | ) | (89 | ) | (2,303 | ) | ||||||||||||||||||||||||||||
Interim dividends | — | — | — | — | — | — | — | (1,169 | ) | (1,169 | ) | — | (1,169 | ) | ||||||||||||||||||||||||||||||
Net income for year recognized in equity | — | — | — | — | — | 38 | 231 | — | 269 | (3 | ) | 266 | ||||||||||||||||||||||||||||||||
Net income for year recognized in income statement | — | — | — | — | — | — | — | 3,895 | 3,895 | 237 | 4,132 | |||||||||||||||||||||||||||||||||
December 31, 2005 | 6,157 | 511 | 1,453 | 2,215 | 5,953 | 40 | 2 | 2,726 | 19,057 | 359 | 19,416 |
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Notes to the financial statements | ||
Introduction Following the entry into force of Regulation (EC) 1606/2002 of the European Parliament and the European Council of July 19, 2002, as from the 2005 financial year companies whose securities are listed on a regulated market of any Member State of the European Union shall, for the first time, prepare their consolidated financial statements in conformity with the international accounting standards issued by the International Accounting Standards Board and endorsed by the European Commission. Accordingly, as from January 1, 2005, the Enel Group has adopted international accounting standards with a transition date of January 1, 2004. Under the options permitted by Legislative Decree 38/2005, Enel SpA, the Parent Company, has elected to not adopt International Financial Reporting Standards (IFRS) in the preparation of its individual statutory financial statements at December 31, 2005, which have therefore been prepared in accordance with Italian GAAP. A reconciliation of shareholders’ equity at December 31, 2005 and 2004 and net income for the year of Enel SpA prepared in accordance with Italian GAAP and the corresponding values under IFRS is presented in the annex. | ||
1. | Accounting policies and measurement criteria | |
Enel SpA has its registered office in Italy. The consolidated financial statements of the Company for the year ending December 31, 2005 comprise the financial statements of the Company and its subsidiaries (“the Group”) and the Group’s holdings in associated companies and joint ventures. A list of the subsidiaries included in the scope of consolidation is reported in the annex. | ||
These financial statements were approved for publication by the Board on March 22, 2006. | ||
Compliance with IFRS/IAS | ||
The consolidated financial statements of the Enel Group for the year ended December 31, 2005 have been prepared in accordance with international accounting standards (International Accounting Standards (IAS) or International Financial Reporting Standards (IFRS)), the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) and the Standing Interpretations Committee (SIC) endorsed by the European Commission (hereinafter, “IFRS”). | ||
The accounting policies applied in these consolidated financial statements are in conformity with those adopted in the preparation of the opening balance at January 1, |
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2004, the income statement for the year 2004 and the balance sheet at December 31, 2004 pursuant to the IFRS, as indicated in note 45 “Transition to International Financial Reporting Standards (IFRS)”, which may be consulted for further details on the options elected by the Group on first-time adoption. | ||
Basis of presentation | ||
The consolidated financial statements consist of the consolidated income statement, the consolidated balance sheet, the consolidated statement of cash flows , the statement of changes in equity and the related notes. | ||
The consolidated income statement is classified on the basis of the nature of costs, while the indirect method is used for the cash flow statement. | ||
The consolidated financial statements are presented in euro. All figures are shown in millions of euro unless stated otherwise. | ||
Use of estimates | ||
Preparing the consolidated financial statements under IFRS requires the use of estimates and assumptions that impact the carrying amount of assets and liabilities and the related information on the items involved as well as the disclosure required for contingent assets and liabilities at the balance sheet date. The estimates and the related assumptions are based on previous experience and other factors considered reasonable in the circumstances. They are formulated when the carrying amount of assets and liabilities is not easily determined from other sources. The actual results may differ from these estimates. The provisions for doubtful accounts, inventory obsolescence, amortization/depreciation, impairment losses, employee benefits, taxation and other provisions are based on these estimates. The estimates and assumptions are periodically reviewed and the impact of any change is recognized in profit or loss where such change regards only the period under consideration. If the review should involve both current and future periods, the change is recognized in the period in which the review is conducted and in the related future periods. | ||
Subsidiaries | ||
Subsidiaries comprise those entities for which the Group has the direct or indirect power to determine their financial and operating policies for the purposes of obtaining the benefits of their activities. In assessing the existence of a situation of control, account is also taken of potential voting rights that are effectively exercisable or convertible. The financial statements of the subsidiaries are consolidated as from the date control is acquired until such control ceases. |
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Associated companies | ||
Associated companies comprise those entities in which the Enel Group has a significant influence. They are initially recognized at cost and are subsequently measured using the equity method. The Group’s share of profit or loss is recognized in the consolidated financial statements from the date on which it acquires the significant influence over the entity until such influence ceases. Should the Group’s share of the loss for the period exceed the carrying amount of the investment, the latter is cancelled and any excess recognized in a provision if the Group has a legal or constructive obligation to cover the associate’s loss. | ||
Joint ventures | ||
Interests in joint ventures – enterprises in which the Group exercises joint control with other entities – are consolidated using the proportionate method. The Group recognizes its share of the assets, liabilities, revenues and expenses on a line-by-line basis in proportion to the Group’s share in the entity from the date on which joint control is acquired until such control ceases. | ||
Consolidation procedures | ||
All financial statements used to prepare the consolidated financial statements were drawn up as at and for the year ended December 31, 2005. | ||
All intragroup balances and transactions, including any unrealized profits or losses on transactions within the Group, are eliminated, net of the theoretical tax effect, if material. Unrealized profits and losses with associates and joint ventures are eliminated for the part pertaining to the Group. | ||
In both cases, unrealized losses are eliminated except when relating to impairment. | ||
Translation of foreign currency items | ||
Each subsidiaries company prepares its financial statements in the functional currency of the economy in which it operates. | ||
All transactions in currencies other than the functional currency are recognized in these financial statements at the exchange rate prevailing on the date of the transaction. Monetary assets and liabilities denominated in a foreign currency other than the functional currency are later adjusted using the balance sheet exchange rate. Any exchange rate differences are recognized in profit or loss. | ||
Non-monetary assets and liabilities in foreign currency stated at historic cost are translated using the exchange rate prevailing on the date of initial recognition of the transaction. Non-monetary assets and liabilities in foreign currency carried at fair value are translated using the exchange rate prevailing on the date the related carrying amount is determined. |
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Translation of financial statements denominated in a foreign currency | ||
For the purposes of the consolidated financial statements, all profits/losses, assets and liabilities are stated in euro, which is the functional currency of the Parent Company, Enel SpA. | ||
In order to prepare the consolidated financial statements, financial statements in functional currencies other than the euro are translated into euro by applying the relevant period-end exchange rate to the assets and liabilities, including goodwill and consolidation adjustments, and the average exchange rate for the period, which approximates the exchange rates prevailing at the date of the respective transactions, to the income statement captions. Any resulting exchange rate gains or losses are recognized directly in equity in a special reserve. The gains and losses are taken to profit or loss on the disposal of the subsidiary. | ||
Business combinations | ||
All business combinations are recognized using the purchase method, where the purchase cost is equal to fair value at the date of the exchange of the assets acquired and the liabilities assumed, plus any costs directly attributable to the acquisition. This cost is allocated by recognizing the assets, liabilities and identifiable contingent liabilities of the acquiree at their fair values. Any positive difference between the purchase costs and the fair value of the share of the net assets acquired pertaining to the Group is recognized as goodwill. Any negative difference is recognized in profit or loss. | ||
On first-time adoption of the IFRS, the Group elected to not apply IFRS 3 (Business combinations) retrospectively to acquisitions carried out before January 1, 2004. Accordingly, the goodwill associated with acquisitions carried out prior to the IFRS transition date is still carried at the amount reported in the last consolidated financial statements prepared on the basis of previous accounting standards (December 31, 2003). | ||
Property, plant and equipment | ||
Property, plant and equipment is recognized at historic cost, including directly attributable ancillary costs necessary for the asset to be ready for use. It is increased by the present value of the estimate of the costs of dismantling and removing the asset where there is a legal or constructive obligation to do so. The corresponding liability is recognized in a provision under provisions for risks and charges. Financial charges in respect of loans granted for the purchase of the assets are recognized in profit or loss in the year they accrue. | ||
Subsequent expenditure relating to an item of property, plant and equipment is recognized as an increase in the carrying amount of the asset when it is probable that future economic benefits deriving from the cost incurred to replace a component of |
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such item will flow to the enterprise and the cost of the item can be reliably determined. All other expenditure is recognized as an expense in the period in which it is incurred. Where major components of property, plant and equipment have different useful lives, the components are recognized separately. | ||
Certain property, plant and equipment that were revalued at January 2004 (the transition date) or in previous periods are recognized at their revalued amount, which is considered as their deemed cost at the revaluation date. | ||
Property, plant and equipment is reported net of accumulated depreciation and any impairment losses determined as set out below. Depreciation is calculated on a straight-line basis over the item’s estimated useful life, which is checked annually, and any changes are reflected on a prospective basis. Depreciation commences when the asset is ready for use. | ||
The estimated useful life of the main items of property, plant and equipment is as follows: |
Useful life | ||||
Civil buildings | 40 years | |||
Hydroelectric power plants(1) (2) | 40 years | |||
Thermoelectric power plants(1) (3) | 40 years | |||
Geothermal power plants(4) | 20 years | |||
Alternative energy power plants(5) | 20 years | |||
Transport lines | 40 years | |||
Transformation plant | 32-42 years | |||
Medium- and low-voltage distribution networks | 30-40 years | |||
Gas distribution networks and meters | 25-50 years | |||
Telecommunications systems and networks | 5.5-20 years | |||
Industrial and commercial equipment | 4 years |
(1) | Excluding assets to be relinquished at end of concession, which are depreciated over the duration of the concession if shorter than useful life. | |
(2-5) | Useful life as from January 1, 2005; previously it was equal to (2) 40 years; (3) 20 years; (4) 12.5 years; (5) 21.3 years. For additional details, please see note 17. |
Land, both unbuilt and on which civil and industrial buildings stand, is not depreciated as it has an indefinite useful life. | ||
Enel is the concession holder for the distribution and sale of electricity to the regulated market (non-elegible customers). The concession, granted by the Ministry for Productive Activities, was issued free of charge and terminates on December 31, 2030. If the concession is not renewed upon expiry, the grantor is required to pay Enel an indemnity, at current values, for the assets owned by Enel that serve the concession. These assets, which comprise the electricity distribution networks, are recognized under “Property, plant and equipment” and are depreciated over their useful lives. |
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The same accounting treatment is used for the gas distribution networks operated under municipal concessions. | ||
The Group’s plants include assets to be relinquished free of charge under the terms of the concession. These mainly regard major water diversion works and the public lands used for the operation of the thermal power plants. The concessions terminate in 2029, and in 2020 respectively (2010 for plants in the Autonomous Provinces of Trento and Bolzano). If the concessions are not renewed, at those dates all intake and governing works, penstocks, outflow channels and other plants on public lands will be relinquished free of charge to the State in good operating condition. | ||
Accordingly, depreciation on assets to be relinquished is calculated over the shorter of the term of the concession and the remaining useful life of the asset. | ||
Property, plant and equipment acquired under finance leases, whereby all risks and rewards incident to ownership are substantially transferred to the Group, are recognized as Group assets at the lower of fair value and the present value of the minimum lease payments due, including the payment required to exercise any purchase option. The corresponding liability due to the lessor is recognized under financial payables. The assets are depreciated on the basis of their useful lives. If it is not reasonably certain that the Group will acquire the assets at the end of the lease, they are depreciated for a period equal to the shorter of the term of the lease and the useful life of the assets. | ||
Leases where the lessor substantially retains all risks and rewards incident to ownership are classified as operating leases. Operating lease costs are taken to profit or loss on a systematic basis over the term of the lease. | ||
Intangible assets | ||
Intangible assets, which all have a finite useful life, are measured at cost, shown net of accumulated amortization and any impairment losses, determined as set out below. Amortization is calculated on a straight-line basis over the item’s estimated useful life, which is checked annually and any changes are reflected on a prospective basis. Amortization commences when the asset is ready for use. | ||
The estimated useful life of the main intangible assets is reported in the notes to the caption. | ||
Goodwillderiving from the acquisition of subsidiaries, associated companies or joint ventures is allocated to each of the cash-generating units identified. After initial recognition, goodwill is not amortized and is adjusted for any impairment losses, determined using the criteria described later in this document. Goodwill relating to investments in associates is included in their carrying amount. |
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Impairment losses | ||
Property, plant and equipment and intangible assets with a finite life are tested for impairment at least once a year. If such impairment is found, the recoverable amount of any property, plant and equipment and intangible assets with a definite life is estimated. | ||
The recoverable amount of goodwill and intangible assets with an indefinite useful life, where present, as well as that of intangible assets not yet available for use, is estimated annually. | ||
The recoverable amount is the higher of an asset’s selling price and its value in use. Value in use is determined by discounting estimated future cash flows using a pre-tax discount rate that reflects the current market assessment of the time value of money and the specific risks of the asset. The recoverable amount of assets that do not generate independent cash flows is determined based on the cash-generating unit to which the asset belongs. | ||
An impairment loss is recognized in the income statement if an asset’s carrying amount or that of the cash-generating unit to which it is allocated is higher than its recoverable amount. | ||
Impairment losses of cash generating units are first charged against the carrying amount of any goodwill attributed to it and then against the value of other assets, in proportion to its carrying amount. | ||
With the exception of those recognized for goodwill, impairment losses are reversed if the impairment is no longer present or there has been a change in the assumptions used to determine the recoverable amount. | ||
Inventories | ||
Inventories are measured at the lower of cost and estimated realizable value. Average weighted cost is used, which includes related ancillary charges. | ||
Financial instruments | ||
Debt securities | ||
Debt securities that the Company intends and is able to hold until maturity are recognized at the trade date and, upon initial recognition, are measured at fair value including transaction costs; subsequently, they are measured at amortized cost using the effective interest rate method, net of any impairment losses. | ||
Debt securities held for trading are initially recognized at fair value and subsequent variations are recognized in profit or loss. | ||
Equity investments in other entities and other financial assets |
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§ | revenues from the sale of goods are recognized when the significant risks and rewards of ownership are transferred to the buyer; | |
§ | revenues from the rendering of services are recognized in line with the stage of completion of the services. Where the revenue cannot be reliably estimated, it is recognized to the extent of the costs incurred that are expected to be recovered; | |
§ | revenues from the sale and transport of electricity and gas are recognized when the supply or service is provided, even if these have not yet been invoiced, and are determined using estimates as well as the fixed meter reading figures. Where applicable, this revenue is based on the rates and related constrictions established by law, the Authority for Electricity and Gas and the corresponding foreign authorities during the applicable period. |
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2. | Risk management | |
As part of its operations, Enel is exposed to different market risks, notably the risk of changes in interest rates, exchange rates and commodity prices. | ||
To minimize this exposure, Enel enters into derivatives contracts to hedge individual transactions and overall exposures using instruments available on the market. | ||
Transactions that qualify for hedge accounting under IFRS are designated as hedging transactions, while those entered into with the intention of hedging but that do not qualify for hedge accounting are classified as trading transactions. Enel does not use derivatives for speculative purposes. | ||
The financial assets and liabilities associated with derivative instruments are classified as: |
§ | cash flow hedges, related to hedging the risk of changes in the cash flows on certain long-term floating-rate loans; | ||
§ | fair value hedges, related to hedging the risk of changes in the fair value of fixed-rate liabilities; | ||
§ | trading derivatives, related to hedging interest and exchange rate risk and commodity risk but which do not qualify for recognition under IAS 39 as hedges of specific assets, liabilities, commitments or future transactions. |
The fair value is determined using the official prices for instruments traded on regulated markets for interest rate derivatives and loans covered by fair value hedges. The fair value of instruments not listed on regulated markets is determined by discounting expected future cash flows on the basis of the market interest rate yield curve at the balance sheet date and translating amounts in currencies other than the euro using period-end interest rates provided by the European Central Bank. Where possible, contracts relating to commodities are measured using market prices related to the same instruments on both regulated and other markets. Contracts for differences are measured using a model based on the forward prices at the valuation date for the energy commodities analyzed, estimating developments in the electricity market in the reference period. | ||
The measurement techniques used for the open derivatives positions at the end of the year are the same as those adopted the previous year. Accordingly, the impact on profit or loss and shareholders equity of such measurement is essentially attributable to normal market developments. The credit risk in respect of the derivatives portfolio is considered negligible since transactions are conducted solely with leading Italian and international banks, diversifying the exposure among different institutions. | ||
Interest rate risk | ||
Various types of derivatives are used to reduce the amount of debt exposed to interest rate fluctuations and to reduce borrowing costs. These include interest rate swaps, |
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2006 | 2007 | 2008 | 2009 | 2010 | Beyond | |||||||||||||||||||
62 | 45 | 41 | 25 | 21 | 91 |
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Buyer. In both cases, the Single Buyer pays Enel a fixed premium equal to the amount set by the auction for the relevant product. For “two-way” contracts, the difference is paid to the Single Buyer if the SNP exceeds the strike price and to Enel in the opposite case. No premium is envisaged for these contracts. | ||
For energy sold on the Power Exchange, Enel manages the residual risk not stabilized through “two-way” contracts for differences by assessing the exposure to market price fluctuations in relation to generation cost developments in Italy. The measurement of this exposure is also based on the effectiveness of the hedging strategies implemented. | ||
The current regulatory framework also allows producers to sell electricity to eligible customers on the free market through bilateral negotiations. This type of contract can be linked to both fixed and variable prices. The exposure to possible price fluctuations is hedged with derivatives. | ||
Finally, as part of commercial activities related to purchasing fuels for thermal generation and the sale of electricity and gas to eligible customers, Enel grants trade credit to external counterparties. The counterparties selected are carefully monitored through the assessment of the related credit risk and the pledge of suitable guarantees and/or security deposits to ensure adequate protection from default risk. | ||
The notes to the consolidated financial statements show the notional amount and the fair value of each derivative type at December 31, 2005, grouped into current and non-current financial assets and liabilities. |
3. | Changes in the scope of consolidation | |
Compared with 2004, the scope of consolidation has changed primarily as a result of the following operations: |
§ | the sale of NewReal (real estate sector) on July 14, 2004; | ||
§ | the acquisition of controlling investments in Ottogas Rete and Ottogas Vendita (distribution and sale of natural gas to end-users) on September 15, 2004; | ||
§ | the acquisition of controlling investments in Italgestioni and Italgestioni Gas (distribution and sale of natural gas to end-users) on December 14, 2004; | ||
§ | the acquisition of controlling investments in Electrica Banat and Electrica Dobrogea (electricity distribution and sales in Romania) on April 28, 2005; | ||
§ | the disposal of 62.75% of Wind on August 11, 2005 and its deconsolidation, with the reclassification of the remaining stake of 37.25% under non-current financial assets; | ||
§ | the disposal of 43.85% of Terna and its deconsolidation as from September 15, 2005. |
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Millions of euro | ||||
Property, plant and equipment | 305 | |||
Intangible assets | 3 | |||
Trade receivables and inventories | 57 | |||
Cash and cash equivalents and other current assets | 133 | |||
Total assets | 498 | |||
Trade payables | (61 | ) | ||
Other financial liabilities and other current liabilities | (91 | ) | ||
Other provisions and other payables | (191 | ) | ||
Total liabilities | (343 | ) | ||
Total net assets acquired | 155 | |||
Negative goodwill | (24 | ) | ||
Value of operation at December 31, 2005 | 131 | |||
of which to current financial liabilities | (15 | ) | ||
CASH FLOW AT DECEMBER 31, 2005 | 116 |
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Continuing operations | Discontinued operations | |||||||||||||||||||||||||||||||||||||||||||
Generation | Networks, | Services | Eliminations | Telecom | Eliminations | |||||||||||||||||||||||||||||||||||||||
and Energy | Infrastructure | and Other | Parent | and | Transmission | municatio | and | |||||||||||||||||||||||||||||||||||||
Millions of euro | Management | and Sales | Activities | Company | adjustments | Total | Networks | ns | adjustments | Total | TOTAL | |||||||||||||||||||||||||||||||||
Revenues from third parties | 12,518 | 20,081 | 374 | 872 | 214 | 34,059 | 711 | 2,604 | (62 | ) | 3,253 | 37,312 | ||||||||||||||||||||||||||||||||
Revenues from other divisions | 1,697 | 341 | 1,286 | 231 | (3,555 | ) | — | 29 | 144 | (173 | ) | — | — | |||||||||||||||||||||||||||||||
Total revenues | 14,215 | 20,422 | 1,660 | 1,103 | (3,341 | ) | 34,059 | 740 | 2,748 | (235 | ) | 3,253 | 37,312 | |||||||||||||||||||||||||||||||
Gross operating margin | 3,704 | 3,737 | 249 | 67 | (12 | ) | 7,745 | 524 | 903 | (1 | ) | 1,426 | 9,171 | |||||||||||||||||||||||||||||||
Amortization, depreciation and impairment losses | 1,139 | 959 | 95 | 14 | — | 2,207 | 118 | 736 | — | 854 | 3,061 | |||||||||||||||||||||||||||||||||
Operating income | 2,565 | 2,778 | 154 | 53 | (12 | ) | 5,538 | 406 | 167 | (1 | ) | 572 | 6,110 | |||||||||||||||||||||||||||||||
Net financial income (expense) and income (expense) from investments accounted for using the equity method | — | — | — | — | — | (744 | ) | — | — | — | (240 | ) | (984 | ) | ||||||||||||||||||||||||||||||
Income taxes | — | — | — | — | — | 1,934 | — | — | — | 213 | 2,147 | |||||||||||||||||||||||||||||||||
Net income before capital gains | — | — | — | — | — | 2,860 | — | — | — | 119 | 2,979 | |||||||||||||||||||||||||||||||||
Gains on disposal of assets | — | — | — | — | — | — | — | — | — | 1,153 | 1,153 | |||||||||||||||||||||||||||||||||
Net income (Group and minority interests) | — | — | — | — | — | 2,860 | — | — | — | 1,272 | 4,132 | |||||||||||||||||||||||||||||||||
Operating assets | 19,622 | 23,154 | 2,927 | — | (1,850 | ) | 43,853 | — | — | — | — | 43,853 | ||||||||||||||||||||||||||||||||
Operating liabilities | 4,247 | 9,298 | 2,377 | — | (1,552 | ) | 14,370 | — | — | — | — | 14,370 | ||||||||||||||||||||||||||||||||
Capital expenditure | 1,027 | 1,692 | 99 | 11 | — | 2,829 | 142 | 286 | — | 428 | 3,257 |
Continuing operations | Discontinued operations | |||||||||||||||||||||||||||||||||||||||||||
Generation | Networks, | Services | Eliminations | Telecom | Eliminations | |||||||||||||||||||||||||||||||||||||||
and Energy | Infrastructure | and Other | Parent | and | Transmission | municatio | and | |||||||||||||||||||||||||||||||||||||
Millions of euro | Management | and Sales | Activities | Company | adjustments | Total | Networks | ns | adjustments | Total | TOTAL | |||||||||||||||||||||||||||||||||
Revenues from third parties | 10,070 | 19,105 | 742 | 1,200 | (106 | ) | 31,011 | 967 | 4,474 | (2 | ) | 5,439 | 36,450 | |||||||||||||||||||||||||||||||
Revenues from other divisions | 2,958 | 149 | 1,052 | 449 | (4,608 | ) | — | 50 | 253 | (303 | ) | — | — | |||||||||||||||||||||||||||||||
Total revenues | 13,028 | 19,254 | 1,794 | 1,649 | (4,714 | ) | 31,011 | 1,017 | 4,727 | (305 | ) | 5,439 | 36,450 | |||||||||||||||||||||||||||||||
Gross operating margin | 3,780 | 3,530 | 214 | 652 | (105 | ) | 8,071 | 649 | 1,421 | 14 | 2,084 | 10,155 | ||||||||||||||||||||||||||||||||
Amortization, depreciation and impairment losses | 1,249 | 837 | 108 | 5 | 2 | 2,201 | 159 | 3,037 | 6 | 3,202 | 5,403 | |||||||||||||||||||||||||||||||||
Operating income | 2,531 | 2,693 | 106 | 647 | (107 | ) | 5,870 | 490 | (1,616 | ) | 8 | (1,118 | ) | 4,752 | ||||||||||||||||||||||||||||||
Net financial income (expense) and income (expense) from investments accounted for using the equity method | — | — | — | — | — | (852 | ) | — | — | — | (467 | ) | (1,319 | ) | ||||||||||||||||||||||||||||||
Income taxes | — | — | — | — | — | 2,116 | — | — | — | (618 | ) | 1,498 | ||||||||||||||||||||||||||||||||
Net income before capital gains | — | — | — | — | — | 2,902 | — | — | — | (967 | ) | 1,935 | ||||||||||||||||||||||||||||||||
Gains on disposal of assets | — | — | — | — | — | — | — | — | — | 812 | 812 | |||||||||||||||||||||||||||||||||
Net income (Group and minority interests) | — | — | — | — | — | 2,902 | — | — | — | (155 | ) | 2,747 | ||||||||||||||||||||||||||||||||
Operating assets | 18,882 | 20,806 | 3,510 | — | (2,405 | ) | 40,793 | 4,585 | 12,940 | — | 17,525 | 58,318 | ||||||||||||||||||||||||||||||||
Operating liabilities | 3,491 | 8,285 | 3,981 | — | (3,060 | ) | 12,697 | 571 | 2,181 | — | 2,752 | 15,449 | ||||||||||||||||||||||||||||||||
Capital expenditure | 857 | 1,711 | 112 | 10 | — | 2,690 | 277 | 868 | — | 1,144 | 3,834 |
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Millions of euro | ||||||||
2005 | 2004 | |||||||
Total assets (consolidated financial statements) | 50,502 | 65,378 | ||||||
Non-current financial assets | 2,601 | 358 | ||||||
Current financial assets | 156 | 57 | ||||||
Cash and cash equivalents | 476 | 331 | ||||||
Tax receivables | 3,416 | 6,314 | ||||||
Sector assets | 43,853 | 58,318 | ||||||
- of which: | ||||||||
Generation and Energy Management | 19,622 | 18,882 | ||||||
Networks, Infrastructure and Sales | 23,154 | 20,806 | ||||||
Other Activities | 2,927 | 3,510 | ||||||
Parent Company, eliminations and adjustments | (1,850 | ) | (2,405 | ) | ||||
Telecommunications and Transmission Networks | — | 17,525 | ||||||
Total liabilities (consolidated financial statements) | 31,086 | 46,312 | ||||||
Non-current financial liabilities | 262 | 377 | ||||||
Current financial liabilities | 294 | 463 | ||||||
Long and short-term loans | 13,262 | 26,905 | ||||||
Tax liabilities | 2,898 | 3,118 | ||||||
Sector liabilities | 14,370 | 15,449 | ||||||
- of which: | ||||||||
Generation and Energy Management | 4,247 | 3,491 | ||||||
Networks, Infrastructure and Sales | 9,298 | 8,285 | ||||||
Other Activities | 2,377 | 3,981 | ||||||
Parent Company, eliminations and adjustments | (1,552 | ) | (3,060 | ) | ||||
Telecommunications and Transmission Networks | — | 2,752 |
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Millions of euro | ||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||
Operating income | 572 | (1,118 | ) | 1,690 | ||||||||
Net financial expense | (240 | ) | (467 | ) | 227 | |||||||
Income taxes | 213 | (618 | ) | 831 | ||||||||
Net income before capital gains | 119 | (967 | ) | 1,086 | ||||||||
Gains on disposal of assets | 1,153 | 812 | 341 | |||||||||
NET INCOME ON DISCONTINUED OPERATIONS | 1,272 | (155 | ) | 1,427 |
Millions of euro | ||||
2005 | ||||
Property, plant and equipment, intangible assets and goodwill | (13,922 | ) | ||
Other non-current assets (net) | 543 | |||
Inventories and trade receivables | (1,739 | ) | ||
Cash and cash equivalents | (413 | ) | ||
Other current assets (net) | 448 | |||
Trade payables, other provisions and other payables | 2,540 | |||
Gross financial debt | 8,839 | |||
Net assets sold | (3,704 | ) | ||
Gross cash flow | (4,869 | ) | ||
Cash and cash equivalents | 413 | |||
Net cash flow | (4,456 | ) |
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Millions of euro | ||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||
Revenues from the sale and transport of electricity and contributions from Electricity Equalization Fund | 29,008 | 25,098 | 3,910 | |||||||||
Revenues from the sale and transport of natural gas to end-users | 1,556 | 1,374 | 182 | |||||||||
Revenues from fuel sales | 446 | 894 | (448 | ) | ||||||||
Connection fees for the electricity and gas networks | 656 | 657 | (1 | ) | ||||||||
Revenues for contract work in progress | 290 | 609 | (319 | ) | ||||||||
Other sales and services | 44 | 42 | 2 | |||||||||
Net revenues (charges) from commodity risk management | 272 | (16 | ) | 288 | ||||||||
Total | 32,272 | 28,658 | 3,614 |
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Millions of euro | ||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||
Income | ||||||||||||
Realized on contracts for differences | 289 | — | 289 | |||||||||
Realized on other contracts | 113 | 92 | 21 | |||||||||
Total realized income | 402 | 92 | 310 | |||||||||
Unrealized on contracts for differences | 43 | — | 43 | |||||||||
Unrealized on other contracts | 48 | 15 | 33 | |||||||||
Total unrealized income | 91 | 15 | 76 | |||||||||
Total income | 493 | 107 | 386 | |||||||||
Charges | ||||||||||||
Realized on other contracts | (188 | ) | (103 | ) | (85 | ) | ||||||
Total realized charges | (188 | ) | (103 | ) | (85 | ) | ||||||
Unrealized on other contracts | (33 | ) | (20 | ) | (13 | ) | ||||||
Total unrealized charges | (33 | ) | (20 | ) | (13 | ) | ||||||
Total charges | (221 | ) | (123 | ) | (98 | ) | ||||||
NET INCOME (CHARGES) FROM COMMODITY RISK MANAGEMENT | 272 | (16 | ) | 288 |
Millions of euro | ||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||
Prior-year’ regulatory items | 338 | — | 338 | |||||||||
Reimbursement of stranded costs for Nigerian gas | 158 | 1,219 | (1,061 | ) | ||||||||
Gains on sale of equity investments | 131 | 13 | 118 | |||||||||
Bonus for service continuity | 115 | 250 | (135 | ) | ||||||||
Other | 1,045 | 871 | 174 | |||||||||
Total | 1,787 | 2,353 | (566 | ) |
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Millions of euro | ||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||
Electricity purchases | 14,321 | 10,380 | 3,941 | |||||||||
Fuel and gas purchases | 5,514 | 5,393 | 121 | |||||||||
Materials purchases | 798 | 1,027 | (229 | ) | ||||||||
Total | 20,633 | 16,800 | 3,833 | |||||||||
of which capitalized | (665 | ) | (673 | ) | (8 | ) |
Millions of euro | ||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||
Electricity transport | 1,048 | 1,068 | (20 | ) | ||||||||
Maintenance and repairs | 395 | 347 | 48 | |||||||||
Telephone and postal | 144 | 133 | 11 | |||||||||
Services by deconsolidated companies | 127 | 213 | (86 | ) | ||||||||
Services and tenders for contract work in progress | 120 | 260 | (140 | ) | ||||||||
Advertising and publications | 62 | 63 | (1 | ) | ||||||||
Leases and rentals | 387 | 349 | 38 | |||||||||
Other | 774 | 673 | 101 | |||||||||
Total | 3,057 | 3,106 | (49 | ) |
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Millions of euro | ||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||
Wages and salaries | 1,957 | 1,989 | (32 | ) | ||||||||
Social security contributions | 529 | 537 | (8 | ) | ||||||||
Termination benefits | 111 | 97 | 14 | |||||||||
Other costs | 165 | 601 | (436 | ) | ||||||||
Total | 2,762 | 3,224 | (462 | ) | ||||||||
Of which capitalized | (384 | ) | (300 | ) | 84 |
Average number | Headcount | |||||||||||||||
2005 | 2004 | 2005-2004 | at Dec. 31, 2005 | |||||||||||||
Senior managers | 618 | 581 | 37 | 562 | ||||||||||||
Middle managers | 4,144 | 4,024 | 120 | 4,103 | ||||||||||||
Employees | 29,231 | 29,515 | (284 | ) | 28,480 | |||||||||||
Workers | 19,369 | 17,278 | 2,091 | 18,633 | ||||||||||||
Total continuing operations | 53,362 | 51,398 | 1,964 | 51,778 | ||||||||||||
Discontinued operations | 6,722 | 10,820 | (4,098 | ) | — | |||||||||||
TOTAL | 60,084 | 62,218 | (2,134 | ) | 51,778 |
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Millions of euro | ||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||
Depreciation of property, plant and equipment | 1,918 | 1,990 | (72 | ) | ||||||||
Amortization of intangible assets | 138 | 121 | 17 | |||||||||
Impairment losses | 151 | 90 | 61 | |||||||||
Total | 2,207 | 2,201 | 6 |
Millions of euro | ||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||
Provisions for risks and charges | 212 | 203 | 9 | |||||||||
Purchase of green certificates | 119 | 104 | 15 | |||||||||
Charges for CO2 emissions | 228 | — | 228 | |||||||||
Taxes and duties | 144 | 158 | (14 | ) | ||||||||
Other | 208 | 318 | (110 | ) | ||||||||
Total | 911 | 783 | 128 |
Millions of euro | ||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||
Personnel | (384 | ) | (300 | ) | 84 | |||||||
Materials | (665 | ) | (673 | ) | (8 | ) | ||||||
Total | (1,049 | ) | (973 | ) | 76 |
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Millions of euro | ||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||
Financial income: | ||||||||||||
- interest and other income from non-current financial assets | 29 | 49 | (20 | ) | ||||||||
- foreign exchange gains | 23 | 165 | (142 | ) | ||||||||
- income from derivative instruments | 68 | 29 | 39 | |||||||||
- other income | 99 | 118 | (19 | ) | ||||||||
Total income | 219 | 361 | (142 | ) | ||||||||
Financial expense: | ||||||||||||
- interest and other charges on financial debt | (686 | ) | (771 | ) | 85 | |||||||
- foreign exchange losses | (52 | ) | (143 | ) | 91 | |||||||
- expense on derivative instruments | (94 | ) | (135 | ) | 41 | |||||||
- discounting of post-employment and other employee benefits | (112 | ) | (134 | ) | 22 | |||||||
Total financial expense | (944 | ) | (1,183 | ) | 239 | |||||||
Total financial income (expense) | (725 | ) | (822 | ) | 97 | |||||||
Income (expense) from investments: | ||||||||||||
- income from investments | 11 | 4 | 7 | |||||||||
- expense on investments | — | (9 | ) | 9 | ||||||||
Total income (expense) from investments | 11 | (5 | ) | 16 | ||||||||
TOTAL | (714 | ) | (827 | ) | 113 |
Millions of euro | ||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||
Income from associates | 7 | 8 | (1 | ) | ||||||||
Expense on associates | (37 | ) | (33 | ) | (4 | ) | ||||||
Total | (30 | ) | (25 | ) | (5 | ) |
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Millions of euro | ||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||
Current taxes | 1,398 | 1,328 | 70 | |||||||||
Difference on estimated income taxes from prior years | 14 | (14 | ) | 28 | ||||||||
Deferred tax assets | 277 | 459 | (182 | ) | ||||||||
Deferred tax liabilities | 245 | 343 | (98 | ) | ||||||||
Total | 1,934 | 2,116 | (182 | ) |
Millions of euro | ||||||||||||||||
2005 | 2004 | |||||||||||||||
Income before taxes | 4,794 | 5,018 | ||||||||||||||
Theoretical tax due calculated as 33% of pre-tax income | 1,582 | 33.0 | % | 1,656 | 33.0 | % | ||||||||||
Permanent differences and minor items | (12 | ) | -0.3 | % | 103 | 2.1 | % | |||||||||
Difference on estimated income taxes from prior years | 14 | 0.3 | % | (14 | ) | -0.3 | % | |||||||||
IRAP | 350 | 7.3 | % | 371 | 7.4 | % | ||||||||||
Income tax for the year | 1,934 | 40.3 | % | 2,116 | 42.2 | % |
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17. | Property, plant and equipment –€30,188 million | |
Developments in property, plant and equipment in 2004 and 2005 are shown below: |
Ordinary | ||||||||||||||||||||||||||||||||
Assets | Change in | Exchange | disposals | |||||||||||||||||||||||||||||
entering | scope of | rate gains | and other | |||||||||||||||||||||||||||||
Millions of euro | Investments | service | Depreciation | consolidation | (losses ) | changes | ||||||||||||||||||||||||||
at Jan. 1, 2004 | at Dec. 31, 2004 | |||||||||||||||||||||||||||||||
Land | 865 | 1 | 4 | — | (69 | ) | — | (450 | ) | 351 | ||||||||||||||||||||||
Buildings | 4,620 | 66 | 70 | (168 | ) | (1,345 | ) | — | 400 | 3,643 | ||||||||||||||||||||||
Plant and machinery | 29,395 | 2,067 | 1,235 | (2,639 | ) | 154 | (17 | ) | (72 | ) | 30,123 | |||||||||||||||||||||
Industrial and commercial equipment | 134 | 17 | — | (26 | ) | (1 | ) | — | (23 | ) | 101 | |||||||||||||||||||||
Other assets | 386 | 82 | 11 | (120 | ) | — | — | (36 | ) | 323 | ||||||||||||||||||||||
Leasehold improvements | 109 | 20 | 8 | (41 | ) | — | — | (8 | ) | 88 | ||||||||||||||||||||||
Total assets in use | 35,509 | 2,253 | 1,328 | (2,994 | ) | (1,261 | ) | (17 | ) | (189 | ) | 34,629 | ||||||||||||||||||||
Assets under construction and advances | 2,141 | 1,285 | (1,328 | ) | — | (12 | ) | — | (13 | ) | 2,073 | |||||||||||||||||||||
TOTAL | 37,650 | 3,538 | — | (2,994 | ) | (1,273 | ) | (17 | ) | (202 | ) | 36,702 |
Ordinary | ||||||||||||||||||||||||||||||||
Assets | Changes in | Exchange | disposals | |||||||||||||||||||||||||||||
entering | Depreciation | scope of | rate gains | and other | ||||||||||||||||||||||||||||
Millions of euro | Investments | service | (1) | consolidation | (losses ) | changes | ||||||||||||||||||||||||||
at Dec. 31, 2004 | at Dec. 31, 2005 | |||||||||||||||||||||||||||||||
Land | 351 | 1 | 2 | — | (16 | ) | 1 | 52 | 391 | |||||||||||||||||||||||
Buildings | 3,643 | 64 | 48 | (210 | ) | (325 | ) | — | 133 | 3,353 | ||||||||||||||||||||||
Plant and machinery | 30,123 | 1,743 | 766 | (2,191 | ) | (6,329 | ) | 245 | (211 | ) | 24,146 | |||||||||||||||||||||
Industrial and commercial equipment | 101 | 16 | 1 | (24 | ) | (10 | ) | — | (4 | ) | 80 | |||||||||||||||||||||
Other assets | 323 | 56 | 15 | (101 | ) | (119 | ) | — | (23 | ) | 151 | |||||||||||||||||||||
Leasehold improvements | 88 | 13 | 10 | (35 | ) | (59 | ) | — | 10 | 27 | ||||||||||||||||||||||
Total assets in use | 34,629 | 1,893 | 842 | (2,561 | ) | (6,858 | ) | 246 | (43 | ) | 28,148 | |||||||||||||||||||||
Assets under construction and advances | 2,073 | 1,144 | (842 | ) | — | (600 | ) | 1 | 264 | 2,040 | ||||||||||||||||||||||
TOTAL | 36,702 | 3,037 | — | (2,561 | ) | (7,458 | ) | 247 | 221 | 30,188 |
(1) | Includes€643 million in respect of Telecommunication and Transmission Networks sectors until date of deconsolidation. |
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§ | deconsolidation of Transmission Networks and Telecommunications sectors following the sale in 2005 of the Group’s majority stakes in Terna and Wind (down€7,823 million); | |
§ | acquisition of Electrica Banat and Electrica Dobrogea (up€305 million); | |
§ | acquisition of new companies in the United States (up€35 million); | |
§ | acquisition of Metanodotti Padani and Metanodotti Trentini (up€25 million). |
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Accumulated | ||||||||||||
Millions of euro | Gross value | depreciation | Net value | |||||||||
Power plants:(1) | ||||||||||||
- thermal | 17,654 | 10,745 | 6,909 | |||||||||
- hydro | 8,220 | 3,820 | 4,400 | |||||||||
- geothermal | 1,772 | 1,051 | 721 | |||||||||
- alternative energy resources | 474 | 105 | 369 | |||||||||
Total power plants | 28,120 | 15,721 | 12,399 | |||||||||
Transport lines and transformer stations | 7,475 | 3,517 | 3,958 | |||||||||
Electricity distribution networks | 36,275 | 24,856 | 11,419 | |||||||||
Telecommunications networks | 5,616 | 2,530 | 3,086 | |||||||||
Gas distribution networks | 2,708 | 1,036 | 1,672 | |||||||||
Primary and secondary substations | 1,253 | 648 | 605 | |||||||||
Offices, warehouses etc.(2) | 1,025 | 254 | 771 | |||||||||
Equipment and other assets | 2,206 | 1,487 | 719 | |||||||||
Total assets in use | 84,678 | 50,049 | 34,629 | |||||||||
Assets under construction and advances | 2,073 | — | 2,073 | |||||||||
TOTAL at Dec. 31, 2004 | 86,751 | 50,049 | 36,702 |
Accumulated | ||||||||||||
Millions of euro | Gross value | depreciation | Net value | |||||||||
Power plants:(1) | ||||||||||||
- thermal | 17,951 | 11,430 | 6,521 | |||||||||
- hydro | 8,361 | 3,939 | 4,422 | |||||||||
- geothermal | 1,726 | 1,093 | 633 | |||||||||
- alternative energy resources | 706 | 140 | 566 | |||||||||
Total power plants | 28,744 | 16,602 | 12,142 | |||||||||
Electricity distribution networks | 37,330 | 25,048 | 12,282 | |||||||||
Gas distribution networks | 2,655 | 1,029 | 1,626 | |||||||||
Primary and secondary substations | 1,289 | 615 | 674 | |||||||||
Offices, warehouses etc.(2) | 988 | 116 | 872 | |||||||||
Equipment and other assets | 1,542 | 990 | 552 | |||||||||
Total assets in use | 72,548 | 44,400 | 28,148 | |||||||||
Assets under construction and advances | 2,040 | — | 2,040 | |||||||||
TOTAL at Dec. 31, 2005 | 74,588 | 44,400 | 30,188 |
(1) | The values also include industrial land and buildings. | |
(2) | The values include non-industrial buildings (offices, warehouses, parking facilities etc), buildings for civil use and non-appurtenant land. |
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Millions of euro | ||||||||||||
2005 | 2004 | 2005-2004 | ||||||||||
Power plants: | ||||||||||||
- thermal | 570 | 455 | 115 | |||||||||
- hydro | 206 | 188 | 18 | |||||||||
- geothermal | 84 | 55 | 29 | |||||||||
- alternative energy resources | 130 | 122 | 8 | |||||||||
Total power plants | 990 | 820 | 170 | |||||||||
Transport lines and transformer stations | 133 | 267 | (134 | ) | ||||||||
Electricity distribution networks | 1,381 | 1,435 | (54 | ) | ||||||||
Gas distribution networks | 70 | 80 | (10 | ) | ||||||||
Telecommunication networks | 251 | 680 | (429 | ) | ||||||||
Land, buildings and other assets and equipment | 212 | 256 | (44 | ) | ||||||||
TOTAL CAPITAL EXPENDITURE | 3,037 | 3,538 | (501 | ) |
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Assets | Exchange | Changes in | ||||||||||||||||||||||||||||||
entering | rate gains | scope of | Other | |||||||||||||||||||||||||||||
Millions of euro | Increases | service | (losses) | consolidation | Amortization | changes | ||||||||||||||||||||||||||
at Jan. 1, 2004 | at Dec. 31, 2004 | |||||||||||||||||||||||||||||||
Development costs | 9 | 1 | — | — | — | (4 | ) | — | 6 | |||||||||||||||||||||||
Industrial patents and intellectual property rights | 469 | 157 | 7 | — | — | (228 | ) | 6 | 411 | |||||||||||||||||||||||
Concessions, licenses, trademarks and similar rights | 2,664 | 5 | — | — | — | (142 | ) | (1 | ) | 2,526 | ||||||||||||||||||||||
Assets under development and advances | 189 | 117 | (117 | ) | — | (2 | ) | — | (13 | ) | 174 | |||||||||||||||||||||
Other: | ||||||||||||||||||||||||||||||||
- software development | 95 | — | 110 | — | — | (59 | ) | (20 | ) | 126 | ||||||||||||||||||||||
- other | 75 | 16 | — | (4 | ) | 15 | (16 | ) | 33 | 119 | ||||||||||||||||||||||
Total other | 170 | 16 | 110 | (4 | ) | 15 | (75 | ) | 13 | 245 | ||||||||||||||||||||||
Goodwill | 8,343 | — | — | — | 47 | — | (1,681 | ) | 6,709 | |||||||||||||||||||||||
TOTAL | 11,844 | 296 | — | (4 | ) | 60 | (449 | ) | (1,676 | ) | 10,071 |
Assets | Exchange | Changes in | ||||||||||||||||||||||||||||||
entering | rate gains | scope of | Amortization | Other | ||||||||||||||||||||||||||||
Millions of euro | Increases | service | (losses) | consolidation | (1) | changes | ||||||||||||||||||||||||||
at Dec. 31, 2004 | at Dec. 31, 2005 | |||||||||||||||||||||||||||||||
Development costs | 6 | — | — | — | — | — | (6 | ) | — | |||||||||||||||||||||||
Industrial patents and intellectual property rights | 411 | 72 | 59 | — | (245 | ) | (149 | ) | (15 | ) | 133 | |||||||||||||||||||||
Concessions, licenses, trademarks and other similar rights | 2,526 | 36 | — | 1 | (2,410 | ) | (96 | ) | 20 | 77 | ||||||||||||||||||||||
Assets under development and advances | 174 | 97 | (68 | ) | — | (70 | ) | — | (1 | ) | 132 | |||||||||||||||||||||
Other: | ||||||||||||||||||||||||||||||||
- software development | 126 | 11 | 9 | — | — | (52 | ) | 11 | 105 | |||||||||||||||||||||||
- other | 119 | 1 | — | 9 | 26 | (11 | ) | 16 | 160 | |||||||||||||||||||||||
Total other | 245 | 12 | 9 | 9 | 26 | (63 | ) | 27 | 265 | |||||||||||||||||||||||
Goodwill | 6,709 | 3 | — | 23 | (5,120 | ) | — | (40 | ) | 1,575 | ||||||||||||||||||||||
TOTAL | 10,071 | 220 | — | 33 | (7,819 | ) | (308 | ) | (15 | ) | 2,182 |
(1) | Includes€170 million in respect of Telecommunications and Transmission Networks sectors until date of deconsolidation. |
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Discount rate | ||||||||||||||||||||||||
Explicit period | ||||||||||||||||||||||||
Cash flow | ||||||||||||||||||||||||
Millions of euro | Amount | Tax rate | Growth rate(1) | WACC | (2) | Ke(3) | period | |||||||||||||||||
at Dec. 31, 2005 | ||||||||||||||||||||||||
Viesgo Generacion | 657 | 35 | % | no terminal value | 6.7 | % | 15 years | |||||||||||||||||
Electra de Viesgo Distribucion | 24 | 35 | % | 1.5 | % | 6 | % | — | 10 years | |||||||||||||||
Enel Rete Gas/Enel Gas | 583 | 38 | % | 0 | % | 7 | % | — | 15 years | |||||||||||||||
Enel North America | 85 | 40.4 | % | 0 | % | 6.2 | % | — | 10 years | |||||||||||||||
Enel Latin America | 73 | 25.5 | % | 2 | % | 10.9 | % | 11 years | ||||||||||||||||
Enel Unión Fenosa Renovables | 131 | 35 | % | no terminal value | — | 9.3 | % | 20 years | ||||||||||||||||
Maritza | 15 | 15 | % | no terminal value | — | 10.2 | % | 17 years | ||||||||||||||||
WISCO | 7 | 39 | % | no terminal value | 7.5 | % | 20 years | |||||||||||||||||
Total | 1,575 |
(1) | Perpetual growth rate of cash flow after explicit period. | |
(2) | WACC represents the weighted average capital cost. | |
(3) | Ke represents the expected return on capital invested. |
19. | Deferred tax assets –€1,778 million | ||
Changes in deferred tax assets, grouped by type of temporary difference and determined using current tax rates, are shown below. |
Increase/(Decrease) | Change | |||||||||||||||||||
taken to income | Other | in scope of | ||||||||||||||||||
Millions of euro | statement(1) | changes | consolidation | |||||||||||||||||
at Dec. 31, 2004 | at Dec. 31, 2005 | |||||||||||||||||||
Nature of the temporary differences: | ||||||||||||||||||||
Impairment of property, plant and equipment and intangible assets | 83 | 5 | (1 | ) | (19 | ) | 68 | |||||||||||||
Accruals to provisions for risks and charges and impairment losses with deferred deductibility | 995 | (251 | ) | 11 | (188 | ) | 567 | |||||||||||||
Tax losses carried forward | 845 | (86 | ) | (2 | ) | (632 | ) | 125 | ||||||||||||
Measurement of financial assets | 164 | (11 | ) | 36 | (37 | ) | 152 | |||||||||||||
Other items | 866 | 23 | 5 | (28 | ) | 866 | ||||||||||||||
Total | 2,953 | (320 | ) | 49 | (904 | ) | 1,778 |
(1) | Includes a reduction of€43 million relating to Telecommunications and Transmission Networks sectors assets until date of deconsolidation. |
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§ | the recognition of the deductible share for 2005 (€247 million) referring to prior impairments of investments on which tax deductibility was deferred over more than one year; | ||
§ | a net decrease (€86 million) attributable mainly to Wind tax losses carry forward until the date of its removal from the scope of consolidation; | ||
§ | change in the scope of consolidation essentially attributable to the deconsolidation of Wind (€852 million). |
Other changes essentially consist of the tax effect recognized directly in equity and the measurement of hedging instruments and other financial assets at fair value (€36 million). No deferred tax assets were recorded in relation to the prior tax losses of two holding companies located in the Netherlands and Luxemburg (€660 million), because the tax laws in force in the countries in question do not treat the expected income (dividends) of the companies as taxable. | ||
20. | Investments accounted for using the equity method —€1,797 million | |
Investments in associated companies accounted for using the equity method are as follows: |
Millions of euro | % holding | % holding | ||||||||||||||||||
at Dec. 31, 2005 | At Dec. 31, 2004 | 2005-2004 | ||||||||||||||||||
Wind Telecomunicazioni SpA | 1,728 | 37.25 | % | — | — | 1,728 | ||||||||||||||
Gesam SpA | 14 | 40.00 | % | 13 | 40.00 | % | 1 | |||||||||||||
Idrosicilia SpA | 9 | 40.00 | % | — | — | 9 | ||||||||||||||
Cesi SpA | 7 | 25.92 | % | 10 | 40.92 | % | (3 | ) | ||||||||||||
Immobiliare Foro Bonaparte SpA | — | — | 95 | 49.00 | % | (95 | ) | |||||||||||||
Leasys SpA | — | — | 13 | 49.00 | % | (13 | ) | |||||||||||||
Idrolatina Srl | — | — | 8 | 46.88 | % | (8 | ) | |||||||||||||
Brindisi LNG SpA | — | — | 8 | 50.00 | % | (8 | ) | |||||||||||||
Others | 39 | — | 43 | — | (4 | ) | ||||||||||||||
Total | 1,797 | 190 | 1,607 |
§ | the inclusion of the residual stake in Wind (accounted for using the equity method) still held by Enel after the disposal in 2005 of 62.75% of that company; | ||
§ | the elimination of the value of the investment in Immobiliare Foro Bonaparte following the spin-off in favour of Dalmazia Trieste; | ||
§ | the sale of the investments in Leasys, Idrolatina and Brindisi LNG; | ||
§ | the sale of 20% of Idrosicilia and the consequent reclassification of the remainder under investments accounted for using the equity method; |
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§ | a reduction in the investment in Cesi following the removal of Terna from the scope of consolidation. |
Millions of euro | ||||||||||||
at Dec. 31, 2005 | at Dec. 31, 2004 | 2005-2004 | ||||||||||
Investments in other companies | 594 | 69 | 525 | |||||||||
Receivables due from associates and other investments | 34 | — | 34 | |||||||||
Advance paid on the acquisition of Slovenské Elektrárne | 168 | — | 168 | |||||||||
Financial receivables due from financing entities | 27 | 1,595 | (1,568 | ) | ||||||||
Cash flow hedge and fair value hedge derivatives | 11 | 44 | (33 | ) | ||||||||
Other items | 2 | 68 | (66 | ) | ||||||||
Total | 836 | 1,776 | (940 | ) |
Equity investments in other companies are measured at fair value, if it can be determined, or at acquisition cost if not. For listed companies, the fair value is determined by the market value of their shares at the end of the financial period. The fair value of unlisted companies is determined by a reliable valuation of their significant assets. |
Millions of euro | % holding | % holding | ||||||||||||||||||
at Dec. 31, 2005 | at Dec. 31, 2004 | 2005-2004 | ||||||||||||||||||
Weather Investments | 286 | 5.20 | % | — | — | 286 | ||||||||||||||
Terna | 213 | 5.12 | % | — | — | 213 | ||||||||||||||
Red Electrica Espanola | 35 | 1.00 | % | 15 | 1.00 | % | 20 | |||||||||||||
LaGeo SA | 25 | 12.50 | % | 25 | 12.50 | % | — | |||||||||||||
Echelon Corporation | 20 | 7.54 | % | 16 | 7.28 | % | 4 | |||||||||||||
Tri Alpha Energy | 7 | 6.74 | % | — | — | 7 | ||||||||||||||
Sheldon Springs Hydro Associates | — | — | 8 | 1.00 | % | (8 | ) | |||||||||||||
Other | 8 | — | 5 | — | 3 | |||||||||||||||
Total | 594 | 69 | 525 |
The increase of€525 million derives from the investments of 5.1% of Terna and 5.2% of Weather Investments. The remaining 1.02% of the investment in Terna is classified under current assets following the recognition in January 2006 of the bonus share granted to participants in the public offering of Terna shares launched by Enel in June 2004. |
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Millions of euro | Nominal value | Fair value | ||||||||||||||||||
at Dec. 31, 2005 | at Dec. 31, 2004 | at Dec. 31, 2005 | at Dec. 31, 2004 | 2005-2004 | ||||||||||||||||
Cash flow hedge derivatives: | ||||||||||||||||||||
- interest rates | 327 | 327 | 11 | 5 | 6 | |||||||||||||||
Fair value hedge derivatives: | ||||||||||||||||||||
- interest rates | — | 1,200 | — | 39 | (39 | ) | ||||||||||||||
Total | 327 | 1,527 | 11 | 44 | (33 | ) |
Millions of euro | ||||||||||||
at Dec. 31, 2005 | at Dec. 31, 2004 | 2005-2004 | ||||||||||
Tax receivables falling due at more than 12 months | — | 16 | (16 | ) | ||||||||
Receivables from Electricity Equalization Fund | 847 | — | 847 | |||||||||
Other long-term receivables: | ||||||||||||
- advances to suppliers | 6 | 2 | 4 | |||||||||
- tax paid on account on employee termination indemnities | 19 | 33 | (14 | ) | ||||||||
- security deposits | — | 5 | (5 | ) | ||||||||
- loans to employees | 44 | 52 | (8 | ) | ||||||||
- other receivables | 59 | 46 | 13 | |||||||||
Total | 128 | 138 | (10 | ) | ||||||||
TOTAL | 975 | 154 | 821 |
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Millions of euro | ||||||||||||
at Dec. 31, 2005 | at Dec. 31, 2004 | 2005-2004 | ||||||||||
Raw materials, consumables and supplies: | ||||||||||||
- fuel | 585 | 590 | (5 | ) | ||||||||
- materials, equipment and other inventories | 115 | 499 | (384 | ) | ||||||||
Total | 700 | 1,089 | (389 | ) | ||||||||
Buildings available for sale | 166 | 208 | (42 | ) | ||||||||
Finished products and goods | — | 44 | (44 | ) | ||||||||
Advances | 18 | 4 | 14 | |||||||||
TOTAL | 884 | 1,345 | (461 | ) |
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Millions of euro | ||||||||||||
at Dec. 31, 2005 | at Dec. 31, 2004 | 2005-2004 | ||||||||||
Customers: | ||||||||||||
- sale and transport of electricity | 6,850 | 5,532 | 1,318 | |||||||||
- distribution and sale of natural gas to end-users | 611 | 516 | 95 | |||||||||
- other activities | 506 | 652 | (146 | ) | ||||||||
Total | 7,967 | 6,700 | 1,267 | |||||||||
Trade receivables for telecommunication and transmission services | — | 1,212 | (1,212 | ) | ||||||||
Trade receivables due from associates | 290 | 19 | 271 | |||||||||
Receivables for contract work in progress | 59 | 96 | (37 | ) | ||||||||
TOTAL | 8,316 | 8,027 | 289 |
Millions of euro | ||||
Total at Jan 1, 2004 | 328 | |||
Accruals | 241 | |||
Utilization | (83 | ) | ||
Total at Dec. 31, 2004 | 486 | |||
Accruals | 188 | |||
Utilization | (29 | ) | ||
Changes in scope of consolidation | (305 | ) | ||
Other changes | 7 | |||
Total at Dec. 31, 2005 | 347 |
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25. | Tax receivables –€789 million | |
Tax receivables at December 31, 2005 totaled€789 million and refer for the most part to receivables in respect of direct taxes of€568 million. The amount includes€488 million in IRES tax credits arising from the application of the national tax consolidation mechanism, which will be offset against taxes payable on account in 2006. | ||
26. | Current financial assets –€569 million |
Millions of euro | ||||||||||||
at Dec. 31, 2005 | At Dec. 31, 2004 | 2005-2004 | ||||||||||
Receivables for factoring advances | 374 | 391 | (17 | ) | ||||||||
Derivative contracts | 115 | 27 | 88 | |||||||||
Other securities | 28 | 32 | (4 | ) | ||||||||
Investments | 43 | 2 | 41 | |||||||||
Other | 9 | 57 | (48 | ) | ||||||||
Total | 569 | 509 | 60 |
The€17 million decrease in receivables for factoring advances is mainly due to a reduction in the amounts discounted by suppliers, associated in part by a decline in trade payables. | ||
The following tables show the notional values and the fair value of the derivative contracts, grouped by hedge type and designation: |
Millions of euro | Nominal amount | Fair value | ||||||||||||||||||
at Dec. 31, 2005 | at Dec. 31, 2004 | at Dec. 31, 2005 | at Dec. 31, 2004 | 2005-2004 | ||||||||||||||||
Cash flow hedge derivatives: | ||||||||||||||||||||
- interest rates | 60 | 4 | — | — | — | |||||||||||||||
- exchange rates | 1 | 100 | — | 7 | (7 | ) | ||||||||||||||
- commodities | 1,372 | — | 57 | — | 57 | |||||||||||||||
Total | 1,433 | 104 | 57 | 7 | 50 | |||||||||||||||
Trading derivatives: | ||||||||||||||||||||
- interest rates | 60 | 60 | 1 | 2 | (1 | ) | ||||||||||||||
- exchange rates | 703 | 361 | 9 | 4 | 5 | |||||||||||||||
- commodities | 7,179 | 5,690 | 48 | 14 | 34 | |||||||||||||||
Total | 7,942 | 6,111 | 58 | 20 | 38 | |||||||||||||||
TOTAL | 9,375 | 6,215 | 115 | 27 | 88 |
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§ | two-way contracts for differences, with a notional value of€1,372 million and a fair value of€57 million; | ||
§ | one-way contracts for differences, with a notional value of€6,266 million and a fair value of€43 million; | ||
§ | commodity derivatives on fuels, energy and metals with a notional value of€913 million and a fair value of€5 million. |
At December 31, 2004, one-way contracts for differences had a notional value of€5,133 million and a fair value of nil, while commodity derivatives relating to fuels and energy had a notional value of€557 million and a fair value of€14 million. | ||
“Investments” entirely consist of the fair value of the 1.02% equity interest in Terna in respect of bonus share granted to Terna shareholders. | ||
27. | Cash and cash equivalents –€476 million | |
Cash and cash equivalents, detailed in the table below, are not restricted by any encumbrances, apart from€24 million primarily in respect of deposits pledged to secure transactions carried out by Enel North America. |
Millions of euro | ||||||||||||
at Dec. 31, 2005 | at Dec. 31, 2004 | 2005-2004 | ||||||||||
Bank deposits | 432 | 322 | 110 | |||||||||
Post Office deposits | 40 | 7 | 33 | |||||||||
Cash and cash equivalents on hand | 4 | 2 | 2 | |||||||||
Total | 476 | 331 | 145 |
28. | Other current assets –€1,712 million |
Millions of euro | ||||||||||||
at Dec. 31, 2005 | at Dec. 31, 2004 | 2005-2004 | ||||||||||
Electricity Equalization Fund | 816 | 1,682 | (866 | ) | ||||||||
Receivables due from employees | 9 | 10 | (1 | ) | ||||||||
Receivables due from others | 887 | 774 | 113 | |||||||||
Total | 1,712 | 2,466 | (754 | ) |
Short-term receivables from the Electricity Equalization Fund at the end of the financial year amounted to€816 million, which includes€169 million in reimbursements for stranded costs which the Group expects to receive in 2006. | ||
Including the portion of receivables classified as long-term (€847 million), total receivables due from the Electricity Equalization Fund amount to€1,663 million, partially offset by payables of€406 million (€512 million at December 31, 2004). |
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Equity attributable to the shareholders of the Parent Company | ||
29. | Equity attributable to the shareholders of the Parent Company –€19,057 million In 2005, 53,549,782 options that had been distributed under the stock option plans for 2001, 2002, 2003 and 2004 were exercised. The exercise of these options generated an increase in equity of€339 million, mainly owing to an increase in share capital of€53 million and in the share premium reserve of€286 million. In addition, as regards the exercised options, the share premium reserve increased by a further€17 million as a result of the reclassification of the specific stock option reserve. | |
Share capital –€6,157 million | ||
Share capital is represented by 6,157,071,646 ordinary shares with a par value of€1.00 each. Based on the shareholders register and other available information, at December 31, 2005 no shareholders held more than 2% of the total share capital, apart from the Ministry for the Economy and Finance, which holds 21.4%, and its subsidiary Cassa Depositi e Prestiti SpA, which holds 10.2%. | ||
Other reserves –€4,219 million | ||
Share premium reserve –€511 million The change in the course of the year was attributable to the exercise of stock options by management. | ||
Legal reserve –€1,453 million | ||
Reserve pursuant to Law –€2,215 million | ||
This regards the remaining portion of the value adjustments carried out when Enel was transformed from a public entity to a company limited by shares. Pursuant to Article 47 of the Uniform Tax Code (Testo Unico Imposte sul Reddito), this amount does not constitute taxable income when distributed. | ||
Foreign currency translation reserve —€40 million The increase in this aggregate in 2005 was attributable to the appreciation in the functional currency against the foreign currencies used by subsidiaries. |
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Retained earnings (losses) carried forward –€5,955 million | ||
This item includes€130 million in losses not yet realized at the end of the year in respect of the measurement of cash flow hedges and recognized directly in equity, as well as€132 million in unrealized gains arising in respect of the fair value measurement of financial assets. | ||
Non-current liabilities | ||
30. | Long-term loans (including the current portions) –€11,902 million The aggregate includes long-term payables in respect of bonds, bank loans and other loans in euro and other currencies, including the portion falling due within twelve months. | |
The long-term debt at December 31, 2005 includes€1,370 million in bonds guaranteed by the Italian government (€1,412 million at end of 2004) and bank loans guaranteed by the Italian government amounting to€91 million (€133 million at end-2004). | ||
The following table shows long-term debt and repayment schedules at December 31, 2005, grouped by loan and interest rate type. |
Nominal | Long term | Current | |||||||||||||||||||||||||||||||||||||||||||||||
Millions of euro | Maturity | Balance at | value at | Balance at | portion | portion | Maturing in | ||||||||||||||||||||||||||||||||||||||||||
Dec. 31, 2005 | Dec. 31, 2004 | 2006 | 2007 | 2008 | 2009 | 2010 | beyond | ||||||||||||||||||||||||||||||||||||||||||
Bonds: | |||||||||||||||||||||||||||||||||||||||||||||||||
- listed, fixed rate | 2006-2033 | 5,621 | 5,663 | 7,200 | 5,396 | 225 | — | 997 | — | 100 | 4,299 | ||||||||||||||||||||||||||||||||||||||
- listed, floating rate | 2006-2012 | 799 | 802 | 402 | 633 | 166 | — | 50 | 86 | 100 | 397 | ||||||||||||||||||||||||||||||||||||||
- unlisted, fixed rate | 2006-2008 | 94 | 118 | 163 | 58 | 36 | — | 58 | — | — | — | ||||||||||||||||||||||||||||||||||||||
- unlisted, floating rate | 2006-2032 | 1,933 | 1,933 | 1,851 | 1,912 | 21 | 22 | 21 | 330 | 79 | 1,460 | ||||||||||||||||||||||||||||||||||||||
- EU institutions, fixed rate | 2006-2009 | 77 | 77 | 116 | 41 | 36 | 31 | 9 | 1 | — | — | ||||||||||||||||||||||||||||||||||||||
- EU institutions, floating rate | 2006-2009 | 6 | 6 | 9 | 3 | 3 | 1 | 1 | 1 | — | — | ||||||||||||||||||||||||||||||||||||||
Total | 8,530 | 8,599 | 9,741 | 8,043 | 487 | 54 | 1,136 | 418 | 279 | 6,156 | |||||||||||||||||||||||||||||||||||||||
Bank loans: | |||||||||||||||||||||||||||||||||||||||||||||||||
- fixed rate | 2006-2015 | 80 | 80 | 89 | 71 | 9 | 6 | 6 | 6 | 6 | 47 | ||||||||||||||||||||||||||||||||||||||
- floating rate | 2006-2023 | 777 | 791 | 8,056 | 587 | 190 | 55 | 111 | 55 | 61 | 305 | ||||||||||||||||||||||||||||||||||||||
- EU institutions, fixed rate | 2006-2009 | 86 | 86 | 121 | 56 | 30 | 30 | 12 | 14 | — | — | ||||||||||||||||||||||||||||||||||||||
- EU institutions, floating rate | 2006-2018 | 2,238 | 2,238 | 3,307 | 2,068 | 170 | 164 | 209 | 209 | 209 | 1,277 | ||||||||||||||||||||||||||||||||||||||
Total | 3,181 | 3,195 | 11,573 | 2,782 | 399 | 255 | 338 | 284 | 276 | 1,629 | |||||||||||||||||||||||||||||||||||||||
Non-bank loans | |||||||||||||||||||||||||||||||||||||||||||||||||
- fixed rate | 2006-2026 | 138 | 138 | 131 | 96 | 42 | 12 | 14 | 8 | 7 | 55 | ||||||||||||||||||||||||||||||||||||||
- floating rate | 2006-2020 | 53 | 53 | 243 | 46 | 7 | 2 | 2 | 2 | 2 | 38 | ||||||||||||||||||||||||||||||||||||||
Total | 191 | 191 | 374 | 142 | 49 | 14 | 16 | 10 | 9 | 93 | |||||||||||||||||||||||||||||||||||||||
TOTAL | 11,902 | 11,985 | 21,688 | 10,967 | 935 | 323 | 1,490 | 712 | 564 | 7,878 |
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Nominal | Nominal | Effective | ||||||||||||||||||
Balance at | value at | interest rate | interest rate | |||||||||||||||||
Dec. 31, 2004 | Dec. 31, 2005 | Dec. 31, 2005 | Dec. 31, 2005 | Dec. 31, 2005 | ||||||||||||||||
Euro | 20,878 | 11,444 | 11,503 | 3.83 | % | 3.84 | % | |||||||||||||
US dollar | 212 | 185 | 185 | 6.49 | % | 6.57 | % | |||||||||||||
Pound sterling | 63 | 62 | 62 | 5.86 | % | 5.86 | % | |||||||||||||
Swiss franc | 30 | 22 | 22 | 6.70 | % | 6.70 | % | |||||||||||||
Japanese yen | 116 | 109 | 133 | 1.41 | % | 1.51 | % | |||||||||||||
Brazilian real | 332 | — | — | — | — | |||||||||||||||
Other currencies | 57 | 80 | 80 | 8.79 | % | 8.79 | % | |||||||||||||
Total non-euro currencies | 810 | 458 | 482 | |||||||||||||||||
TOTAL | 21,688 | 11,902 | 11,985 |
Changes in | Exchange | |||||||||||||||||||||||
scope of | New | rate | ||||||||||||||||||||||
Nominal value | Repayments | consolidation | financing | differences | Nominal value | |||||||||||||||||||
at Dec. 31, 2004 | at Dec. 31, 2005 | |||||||||||||||||||||||
Bonds | 9,782 | (880 | ) | (1,390 | ) | 1,087 | — | 8,599 | ||||||||||||||||
Bank loans | 11,672 | (2,756 | ) | (6,525 | ) | 664 | 140 | 3,195 | ||||||||||||||||
Non-bank loans | 374 | (22 | ) | (191 | ) | 8 | 22 | 191 | ||||||||||||||||
Total | 21,828 | (3,658 | ) | (8,106 | ) | 1,759 | 162 | 11,985 |
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7-year bond - floating rate portion | 7-year bond - fixed rate portion | |||
Amount | €400 million | €600 million | ||
Repayment | Single amount on March 14, 2012 | Single amount on March 14, 2012 | ||
Interest rate | Six-month Euribor + 0.10% | 3.625% annually | ||
Issue price | 100.00 | 99.836 | ||
Early repayment | Not allowed | Not allowed | ||
Listed on stock exchange of | Milan | Milan |
Book | Book | |||||||||||||||
Millions of euro | value | Fair value | value | Fair value | ||||||||||||
at Dec. 31, 2005 | at Dec. 31, 2004 | |||||||||||||||
Bonds: | 8,530 | 9,061 | 9,741 | 10,168 | ||||||||||||
- fixed-rate portion | 5,792 | 6,235 | 7,484 | 7,909 | ||||||||||||
- floating-rate portion | 2,738 | 2,826 | 2,257 | 2,259 | ||||||||||||
Bank loans: | 3,181 | 3,185 | 11,573 | 11,659 | ||||||||||||
- fixed-rate bank loans | 166 | 173 | 210 | 223 | ||||||||||||
- floating-rate bank loans | 3,015 | 3,012 | 11,363 | 11,436 | ||||||||||||
Non-bank loans: | 191 | 191 | 374 | 375 | ||||||||||||
- fixed-rate loans | 138 | 138 | 131 | 131 | ||||||||||||
- floating-rate loans | 53 | 53 | 243 | 244 | ||||||||||||
Total | 11,902 | 12,437 | 21,688 | 22,202 |
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Millions of euro | ||||||||||||
at Dec. 31, 2005 | at Dec. 31, 2004 | 2005-2004 | ||||||||||
Bonds: | 8,043 | 8,866 | (823 | ) | ||||||||
- fixed-rate portion | 5,495 | 6,626 | (1,131 | ) | ||||||||
- floating-rate portion | 2,548 | 2,240 | 308 | |||||||||
Bank loans: | 2,782 | 11,101 | (8,319 | ) | ||||||||
- fixed-rate bank loans | 127 | 156 | (29 | ) | ||||||||
- floating-rate bank loans | 2,655 | 10,945 | (8,290 | ) | ||||||||
Non-bank loans: | 142 | 324 | (182 | ) | ||||||||
- fixed-rate portion | 96 | 119 | (23 | ) | ||||||||
- floating-rate portion | 46 | 205 | (159 | ) | ||||||||
Total | 10,967 | 20,291 | (9,324 | ) |
Millions of euro | ||||||||||||
at Dec. 31, 2005 | at Dec. 31, 2004 | 2005-2004 | ||||||||||
Bonds: | 487 | 875 | (388 | ) | ||||||||
- fixed-rate portion | 297 | 858 | (561 | ) | ||||||||
- floating-rate portion | 190 | 17 | 173 | |||||||||
Bank loans: | 399 | 472 | (73 | ) | ||||||||
- fixed-rate bank loans | 39 | 54 | (15 | ) | ||||||||
- floating-rate bank loans | 360 | 418 | (58 | ) | ||||||||
Non-bank loans: | 49 | 50 | (1 | ) | ||||||||
- fixed-rate portion | 42 | 12 | 30 | |||||||||
- floating-rate portion | 7 | 38 | (31 | ) | ||||||||
Total | 935 | 1,397 | (462 | ) |
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31. | Post-employment and other employee benefits —€2,662 million | |
The Group offers its employees a variety of benefits, including termination benefits, additional months’ pay, indemnities in lieu of notice, loyalty bonuses, a company supplementary pension plan, a healthcare plan and electricity discounts. The item includes accruals made to cover post-employment benefits under defined-benefit plans and other long-term benefits to which employees have a statutory or contractual right. The benefits consist of the following: | ||
Termination benefits Under Italian law, upon the termination of an employment relationship, the former employee has the right to receive termination benefits for each year of service equal to the employee’s gross annual salary, divided by 13.5. The entitlement is increased each year by an amount corresponding to 75% of the rise in the cost-of-living index plus 1.5 points. | ||
Additional months’ pay and similar benefits In accordance with the national collective bargaining agreement for workers in the electricity industry, workers hired up to July 2001 and managers hired or appointed until 1999 who leave the company after reaching the maximum working age or after accruing sufficient seniority to be eligible for a pension are entitled to several additional months’ pay in addition to their termination benefits. The benefit is fixed and is not revalued. | ||
Loyalty bonus The loyalty bonus is awarded to employees hired under the national collective bargaining agreement for workers in the electricity industry who have reached specified seniority levels in the company (25 and 35 years of service). The bonus is calculated on the basis of the gross monthly wage payable to the eligible party at the date of distribution. It is equal to one third of the monthly wage for employees with seniority of 25 years and an entire month’s pay for employees with seniority of 35 years. | ||
Company supplementary pension plan The company supplementary pension plan is provided to a number of senior managers who retired before March 31, 1998. They receive a supplementary pension in addition to that to which they are entitled by law. This liability only changes as a result of payment of benefits and changes in the actuarial parameters used. |
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The national collective bargaining agreement for electricity workers stipulates that employees in service hired before July 1, 1996 and retired workers shall receive a discount on the cost of electricity supplied to them for domestic use up to a specified annual level of consumption.
Millions of euro | ||||||||
2005 | 2004 | |||||||
Benefits due on termination of employment and other long-term benefits | ||||||||
Liabilities at the beginning of the year | 1,696 | 1,887 | ||||||
Service cost | 83 | (1) | 90 | |||||
Interest cost: | 68 | (1) | 90 | |||||
Benefit paid | (229 | ) | (371 | ) | ||||
Changes in scope of consolidation | (113 | ) | — | |||||
Unrecognized actuarial (gains)/losses in year | (3 | ) | — | |||||
Actuarial liabilities at end of year | 1,502 | 1,696 | ||||||
Liabilities at end of year | 1,505 | 1,696 | ||||||
Post employment benefits under defined-benefit plans | ||||||||
Liabilities at the beginning of the year | 1,214 | 1,137 | ||||||
Service cost | 8 | (1) | 74 | |||||
Interest cost | 49 | (1) | 54 | |||||
Benefit paid | (53 | ) | (51 | ) | ||||
Changes in scope of consolidation | (61 | ) | — | |||||
Unrecognized actuarial (gains)/losses in year | 19 | — | ||||||
Actuarial liabilities at end of year | 1,176 | 1,214 | ||||||
Liabilities at end of year | 1,157 | 1,214 |
(1) | Includes Telecommunications and Transmission Networks sectors until date of deconsolidation. |
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The above liabilities are reported net of plan assets, whose fair value at period-end amounted to€304 million, including unrecognized actuarial losses of€9 million. The expected return on the plan assets is equal to 4.2% (5.0% in 2004). | ||
The cost of employee benefits in 2005 came to€257 million (€361 million in 2004), of which€117 million in respect of interest cost (€144 million in 2004) and€140 million recognized under personnel costs (€49 million of which refer to benefits paid in 2005). | ||
The main actuarial assumptions used to calculate the liabilities in respect of employee benefits are as follows: |
2005 | 2004 | |||||||
Discount rate | 4.00 | % | 4.25 | % | ||||
Rate of increase in personnel costs | 3.00 | % | 3.00 | % | ||||
Rate of increase in healthcare costs | 3.00 | % | 3.00 | % |
32. | Provisions for risks and charges –€1,267 million |
Taken to loss | Changes in | Utilization | ||||||||||||||||||
on income | scope of | and other | ||||||||||||||||||
Millions of euro | statement(1) | consolidation | changes | |||||||||||||||||
at Dec. 31, 2004 | at Dec. 31, 2005 | |||||||||||||||||||
Provision for litigation, risks and other charges: | ||||||||||||||||||||
- litigation | 382 | 56 | (38 | ) | (59 | ) | 341 | |||||||||||||
- CO2emissions charges | 228 | 228 | ||||||||||||||||||
- other | 727 | 171 | (134 | ) | (187 | ) | 577 | |||||||||||||
Total | 1,109 | 455 | (172 | ) | (246 | ) | 1,146 | |||||||||||||
Provision for early-retirement incentives | 295 | 69 | (8 | ) | (235 | ) | 121 | |||||||||||||
TOTAL | 1,404 | 524 | (180 | ) | (481 | ) | 1,267 |
(1) | Includes€15 million in respect of Telecommunications and Transmission Networks sectors until their deconsolidation. |
Litigation | ||
This provision covers contingent liabilities that could arise in respect of pending litigation and other disputes. It includes an estimate of the potential liability relating to disputes that arose during the financial year as well as revised estimates of the potential costs associated with disputes initiated in prior periods. The estimates are based on the opinions of internal and external legal counsel. | ||
Other Other accruals refer to various risks and charges, mainly in connection with plant operation and transformation, regulatory disputes, penalties and other expenses |
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related to engineering and construction, as well as disputes with local authorities regarding sundry duties and fees. | ||
Provision for early retirement incentives The “Provision for early retirement incentives” includes the estimated charges relating to binding agreements for the voluntary termination of employment contracts in response to restructuring needs that employees have already signed or are likely to sign. | ||
33. | Deferred tax liabilities –€2,464 million | |
The table reports changes in “Deferred tax liabilities” by type of temporary difference, determined on the basis of the current tax rates. | ||
Changes in deferred tax liabilities |
Increase | ||||||||||||||||||||
(decrease) | ||||||||||||||||||||
taken to | Changes in | |||||||||||||||||||
income | Other | scope of | ||||||||||||||||||
Millions of euro | statement(1) | changes | consolidation | |||||||||||||||||
at Dec. 31, 2004 | at Dec. 31, 2005 | |||||||||||||||||||
Nature of the temporary differences: | ||||||||||||||||||||
Differences on non-current and financial assets | 2,100 | 282 | 20 | (502 | ) | 1,900 | ||||||||||||||
Income subject to deferred taxation | 98 | (41 | ) | — | — | 57 | ||||||||||||||
Allocation of goodwill to assets | 61 | (3 | ) | 39 | — | 97 | ||||||||||||||
Measurement of financial instruments | 12 | (19 | ) | 105 | (2 | ) | 96 | |||||||||||||
Other items | 241 | 64 | — | 9 | 314 | |||||||||||||||
Total | 2,512 | 283 | 164 | (495 | ) | 2,464 |
(1) | Includes a postive effect of€38 million in respect of Telecommunications and Transmission Networks sectors until date of deconsolidation. |
The caption includes the deferred tax liabilities recognized from consolidated companies on differences between depreciation charged for tax purposes, including accelerated depreciation, and depreciation based on the estimated useful lives of assets. They also include income subject to deferred taxation. The decrease connected with the change in the scope of consolidation refers exclusively to the exit of Terna. “Other changes” mainly regard the deferred tax effect of the fair value measurement of hedges. |
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34. | Non-current financial liabilities –€262 million | |
These consist of the fair value measurement of cash flow hedge derivatives. The following table shows the related notional amount and fair value: |
Millions of euro | Notional amount | Fair value | ||||||||||||||||||
at Dec. 31, 2005 | at Dec. 31, 2004 | at Dec. 31, 2005 | at Dec. 31, 2004 | 2005-2004 | ||||||||||||||||
Cash flow hedge derivatives: | ||||||||||||||||||||
- interest rates | 3,749 | 6,268 | 262 | 370 | (108 | ) |
Derivatives at December 31, 2005 were mostly composed of interest rate hedges on a number of long-term floating-rate loans. As the derivatives are exactly correlated with the underlying loan, the negative fair value of such positions, primarily the result of a significant reduction in market interest rates in recent years, has been largely offset by the reduction in financial expense relating to the hedged liabilities. | ||
The decrease in the year in both the notional value and fair value of the derivatives was essentially the direct consequence of the deconsolidation of Wind and Terna debt. |
35. | Other non-current liabilities –€18 million |
Millions of euro | ||||||||||||
at Dec. 31, 2005 | at Dec. 31, 2004 | 2005-2004 | ||||||||||
Payables due to Ferrovie dello Stato for TLC network | — | 202 | (202 | ) | ||||||||
Other items | 18 | 16 | 2 | |||||||||
Total | 18 | 218 | (200 | ) |
The decrease in payables to Ferrovie dello Stato (Italian State Railways) with respect to their level at December 31, 2004 is attributable to the deconsolidation of Wind. | ||
Current liabilities | ||
36. | Short-term loans –€1,361 million | |
At December 31, 2005, short-term loans totaled€1,361 million, a decrease of€3,831 million with respect to December 31, 2004, as detailed below. |
Millions of euro | Book value | Fair value | Book value | Fair value | Book value | Fair value | ||||||||||||||||||
at Dec. 31, 2005 | at Dec. 31, 2004 | 2005-2004 | ||||||||||||||||||||||
Short-term amounts due to banks | 970 | 970 | 2,560 | 2,562 | (1,590 | ) | (1,592 | ) | ||||||||||||||||
Commercial paper | 275 | 275 | 2,441 | 2,441 | (2,166 | ) | (2,166 | ) | ||||||||||||||||
Other short-term financial payables | 116 | 116 | 191 | 191 | (75 | ) | (75 | ) | ||||||||||||||||
Total | 1,361 | 1,361 | 5,192 | 5,194 | (3,831 | ) | (3,833 | ) |
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Payables represented by commercial paper relate to issues at year-end in the context of the€1,500 million program launched in 2001 by Enel Investment Holding and guaranteed by Enel SpA, the maximum amount of which was raised to€2,500 million in May 2004. In November 2005, the ceiling amount was raised to€4,000 million and the issuer of the commercial paper was changed from Enel Investment Holding to Enel Finance International, with Enel SpA retaining its responsibility as guarantor. At December 31, 2005, issues under the program totaled€275 million. The nominal value of the commercial paper is€276 million, and is denominated in euro (€240 million) and pounds sterling (the equivalent of€36 million). The exchange rate risk in respect of currencies other than the euro are fully hedged by currency swaps. | ||
37. | Trade payables –€6,610 million | |
The item totals€6,610 million, a decline of€208 million compared with December 31, 2004, and includes payables for the supply of electricity, fuel, materials and equipment for tenders and sundry services. The change during the year mainly reflects the removal of Wind and Terna from the scope of consolidation. This was partly offset by the increase in payables for electricity purchases from the Networks, Infrastructure and Sales Divisions. | ||
38. | Current financial liabilities –€294 million |
Millions of euro | ||||||||||||
at Dec. 31, 2005 | at Dec. 31, 2004 | 2005-2004 | ||||||||||
Deferred financial liabilities | 176 | 240 | (64 | ) | ||||||||
Trading and cash flow hedge derivatives | 103 | 188 | (85 | ) | ||||||||
Other items | 15 | 65 | (50 | ) | ||||||||
Total | 294 | 493 | (199 | ) |
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The following table shows the notional value and fair value of the derivative contracts: |
Millions of euro | Nominal value | Fair value | ||||||||||||||||||
at Dec. 31, 2005 | at Dec. 31, 2004 | at Dec. 31, 2005 | at Dec. 31, 2004 | 2005-2004 | ||||||||||||||||
Cash flow hedge derivatives: | ||||||||||||||||||||
- interest rates | 191 | 415 | 10 | 11 | (1 | ) | ||||||||||||||
- exchange rates | 20 | 40 | — | 2 | (2 | ) | ||||||||||||||
- commodities | — | — | — | — | — | |||||||||||||||
Total | 211 | 455 | 10 | 13 | (3 | ) | ||||||||||||||
Trading derivatives: | ||||||||||||||||||||
- interest rates | 610 | 2,109 | 55 | 86 | (31 | ) | ||||||||||||||
- exchange rates | 1,147 | 1,368 | 15 | 67 | (52 | ) | ||||||||||||||
- commodities | 125 | 18 | 13 | 12 | 1 | |||||||||||||||
- other | — | — | 10 | 10 | — | |||||||||||||||
Total | 1,882 | 3,495 | 93 | 175 | (82 | ) | ||||||||||||||
TOTAL | 2,093 | 3,950 | 103 | 188 | (85 | ) |
Trading derivatives in interest and exchange rates primarily include transactions entered into for hedging purposes, but which do not qualify for hedge accounting under IFRS. Trading derivatives in commodities essentially refer to fuel and energy trading activities and, at December 31, 2005, showed a net notional value of€125 million (€18 million at December 31, 2004) and a fair value of€13 million (€12 million at December 31, 2004). | ||
39. | Other current liabilities –€4,218 million |
Millions of euro | ||||||||||||
at Dec. 31, 2005 | at Dec. 31, 2004 | 2005-2004 | ||||||||||
Advances | 121 | 151 | (30 | ) | ||||||||
Tax payables | 199 | 239 | (40 | ) | ||||||||
Payables due to the Electricity Equalization Fund | 406 | 512 | (106 | ) | ||||||||
Social security contributions payable | 144 | 176 | (32 | ) | ||||||||
Payables due to employees | 353 | 306 | 47 | |||||||||
Payables due to customers for security deposits and reimbursements | 1,755 | 1,728 | 27 | |||||||||
Other | 1,240 | 1,496 | (256 | ) | ||||||||
Total | 4,218 | 4,608 | (390 | ) |
Payables to the Electricity Equalization Fund amounted to€406 million, a decline of€106 million compared with December 31, 2004. Details of the position are discussed under the relevant asset items. |
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Payables to customers for security deposits refer to amounts received from customers under the terms of contracts for the delivery of electricity which, upon the finalization of contracts, are booked as current liabilities because the company does not have an unconditional right to defer the repayment of the liabilities beyond twelve months. | ||
40. | Related parties | |
As the entity responsible for the generation, transmission and distribution of electricity in Italy, Enel provides services to a number of State-controlled companies. In the current regulatory framework, Enel concludes transactions with the Terna – Rete Elettrica Nazionale, the Single Buyer, the ISO (GRTN) and the Market Operator (each of which is entirely controlled either directly or indirectly by the Ministry for the Economy and Finance). | ||
Fees for the transport of electricity payable to Terna and certain charges paid to the Market Operator are determined by the Authority for Electricity and Gas. | ||
Transactions relating to purchases and sales of electricity concluded with the Market Operator on the Power Exchange and with the Single Buyer are settled at market prices. | ||
Companies in the Networks, Infrastructure and Sales Divisions acquire electricity from the Single Buyer and the ISO, in addition to paying Terna fees for the use of the National Transmission Network (NTN). Companies that are part of the Generation and Energy Management Division, in addition to paying fees for the use of the NTN to Terna, acquire from and sell electricity to the Market Operator on the Power Exchange and sell electricity to the Single Buyer. | ||
Enel also acquires fuel for generation and gas distribution and sale from ENI, a company controlled by the Ministry for the Economy and Finance. |
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Balance Sheet | Income Statement | |||||||||||||||
Millions of euro | Receivables | Payables | Costs | Revenues | ||||||||||||
at Dec. 31, 2005 | 2005 | |||||||||||||||
Continuing operations: | ||||||||||||||||
- Single Buyer | 653 | 2,199 | 10,150 | 1,160 | ||||||||||||
- ISO | 200 | 231 | 1,294 | 1,745 | ||||||||||||
- Market Operator | 1,230 | 210 | 1,159 | 6,308 | ||||||||||||
- Italian Post Office | 1 | 20 | 98 | 14 | ||||||||||||
- ENI | 2 | 589 | 1,848 | 123 | ||||||||||||
- Terna(1) | 378 | 334 | 292 | 316 | ||||||||||||
Discontinued operations: | ||||||||||||||||
- ISO | — | — | — | 710 | ||||||||||||
- Italian Post Office | — | — | 1 | 1 | ||||||||||||
Total | 2,464 | 3,583 | 14,842 | 10,377 |
(1) | Costs and revenues refer to the period from the date of deconsolidation to December 31, 2005. |
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Balance Sheet | Income Statement | |||||||||||||||
Millions of euro | Receivables | Payables | Costs | Revenues | ||||||||||||
at Dec. 31, 2005 | 2005 | |||||||||||||||
Continuing operations: | ||||||||||||||||
- Wind Telecomunicazioni SpA(1) | 291 | 193 | 134 | 26 | ||||||||||||
- Cesi SpA | 4 | 24 | 23 | 4 | ||||||||||||
- Immobiliare Foro Bonaparte SpA(2) | — | — | 20 | — | ||||||||||||
- Leasys SpA(2) | — | — | 152 | 2 | ||||||||||||
Discontinued operations: | ||||||||||||||||
- Wind Telecomunicazioni SpA(1) | — | — | 4 | — | ||||||||||||
- Cesi SpA | — | — | 1 | — | ||||||||||||
- Immobiliare Foro Bonaparte SpA(2) | — | — | 1 | — | ||||||||||||
- Leasys SpA(2) | — | — | 10 | — | ||||||||||||
- Idrolatina Srl(2) | — | — | 2 | — | ||||||||||||
Total | 295 | 217 | 347 | 32 |
(1) | Costs and revenues refer to the period from the date of deconsolidation to December 31, 2005. | |
(2) | Costs and revenues refer to the period from January 1, 2005 until date of disposal. |
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41. | Contractual commitments and guarantees | |
The commitments entered into by the Enel Group and the guarantees given to third parties are shown below: |
Millions of euro | ||||||||||||
at Dec. 31, 2005 | at Dec. 31, 2004 | 2005-2004 | ||||||||||
Guarantees given | ||||||||||||
Sureties given in favor of: | ||||||||||||
- third parties | 1,244 | 825 | 419 | |||||||||
Total | 1,244 | 825 | 419 | |||||||||
Other commitments | ||||||||||||
Commitments to suppliers for: | ||||||||||||
- electricity purchases | 4,013 | 3,642 | 371 | |||||||||
- fuel purchases | 51,647 | 28,542 | 23,105 | |||||||||
- various supplies | 4,111 | 2,101 | 2,010 | |||||||||
- tenders | 204 | 2,032 | (1,828 | ) | ||||||||
- other | 3 | 52 | (49 | ) | ||||||||
Total | 59,978 | 36,369 | 23,609 | |||||||||
TOTAL | 61,222 | 37,194 | 24,028 |
Guarantees granted to third parties at December 31, 2005 amounted to€1,244 million and include€744 million in commitments relating to the sale of real estate assets in connection with regulations on the termination of leases, in addition to rent receivable for a period of six years and six months from July 2004. The value of such guarantees is reduced annually by a specified amount. | ||
Commitments for electricity mainly regard imports from France, Switzerland and Germany, which at December 31, 2005 amounted to€4,013 million, of which€3,686 million refers to the period 2006-2010 and€327 million to the period 2011-2015. | ||
Commitments for the purchase of fuels are determined with reference to the parameters and exchange rates applicable at the end of the financial year (given that fuel prices vary and are mainly set in foreign currencies). The total at year-end was€51,647 million, and consisted of the following: |
Millions of euro | Natural gas | Fuel oil | Coal | Logistic services | Total | |||||||||||||||
Period: | ||||||||||||||||||||
- 2006-2010 | 18,209 | 117 | 504 | 236 | 19,066 | |||||||||||||||
- 2011-2015 | 17,301 | — | 206 | 60 | 17,567 | |||||||||||||||
- 2016-2020 | 13,227 | — | 207 | 46 | 13,480 | |||||||||||||||
- 2021 and beyond | 1,410 | — | 124 | — | 1,534 | |||||||||||||||
Total | 50,147 | 117 | 1,041 | 342 | 51,647 |
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42. | Contingent liabilities and assets | |
Litigation on rates | ||
Enel is the target of a series of suits filed by a number of customers that consume large amounts of electricity and who have challenged, in full or in part, the legitimacy of the measures with which first the Interministerial Price Committee (CIP) and then the Authority for Electricity and Gas determined changes in electricity rates in the past. To date, the courts have generally rejected the complaints lodged and an examination of the rulings would indicate that the chance of unfavorable judgements is remote. | ||
Environmental litigation | ||
Litigation regarding environmental issues primarily concerns the installation and operation of power lines and equipment of Enel Distribuzione, which succeeded Enel in the related relationships. | ||
Enel Distribuzione has been involved in a number of civil and administrative suits relating to requests for the transfer or modification of power lines on the basis of their alleged potential to cause harm, despite the fact that they have been installed in compliance with current regulations. | ||
In a number of proceedings claims for damages for harm caused by electromagnetic fields have been lodged. Recourse to legal action requesting the immediate suspension or modification of plant operations by residents who live near power lines is frequent. Nevertheless, the outcome of litigation on these issues continues to be favorable to Enel, with only sporadic precautionary rulings against the Group. All of these have been appealed, so that at the present date there are no final rulings against Group companies, and no damages for physical harm have ever been granted. | ||
There have also been a number of proceedings concerning electromagnetic fields generated by medium- and low-voltage transformer substations within buildings, in which the equipment has always been in compliance with induction limits set by current regulations. | ||
Litigation concerning the effect of electromagnetic fields moved in Enel’s favor following the entry into force of the framework law on electromagnetic emissions (Law 36 of February 22, 2001) and the related implementing regulations (Prime Minister’s Orders no. 11719 of July 8, 2003 and no. 11723 of July 8, 2003). The new law seeks to harmonize regulation of the field at the national level, setting rules that apply to the entire country and defining exposure limits, alert thresholds and quality objectives, which were specified in the implementing orders of 2003. The new regulations apply to low frequency infrastructure such as transmission and distribution lines and distribution substations, as well as high frequency infrastructure used for telephone services, including mobile telephone services. The new regulations also introduce a ten-year |
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Ordinance of the Region of Lazio of February 10, 2006: Suspension of work on maritime infrastructure for the transformation of the Torrevaldaliga Nord power plant to coal | ||
With the measure of February 10, 2006 the President of the Region of Lazio ordered the immediate suspension of work on the construction of maritime infrastructure for the reconversion of the Torrevaldaliga Nord plant to coal and requested that an environmental impact assessment (EIA) be conducted because of an alleged threat to the environment. The suspension of the works was ordered on the basis of the assertion that such works cannot be authorized under the procedures (already completed) envisaged by Law 55/02 (designed to unblock construction of power plants) but are instead subject to a separate EIA pursuant to Directive 97/11/EC, held to be immediately applicable under Italian law. | ||
The suspension order by the Region of Lazio will quickly lead to the stoppage of all works associated with the conversion of the power plant to coal, with a consequent loss of jobs. The economic loss that would be caused by a protracted suspension, bearing in mind the spending commitments already undertaken with the contractors, would amount to more than€1 billion, out of total expenditure for the project of€1.5 billion. | ||
Enel feels that the Region’s action is illegitimate on a number of grounds and immediately appealed to the Lazio Regional Administrative Court asking for a preliminary injunction suspending its validity. | ||
43. | Subsequent events | |
Memorandum of understanding with the Russian energy trader RusEnergoSbyt | ||
On March 2, 2006 Enel announced the signing of a memorandum of understanding to acquire a 50% stake for $105 million in RusEnergoSbyt (RES), a company active in the energy trading market and controlled by Grigory Berezkin, Chairman of the ESN Group. Thanks to this agreement, Enel gains access to the electricity market of the Russian Federation in collaboration with the largest supplier in the Russian power sector, which has been operating in the wholesale and retail markets since 2003. | ||
With this transaction Enel strengthens its position in the Russian market, where the Company has operated since 2004, managing the combined-cycle North West Thermal Power Plant in St. Petersburg under an agreeement with RAO UES. | ||
The alliance with RES is part of Enel’s European expansion strategy and is intended to position the Company to take advantage of any new opportunities offered by the liberalization of the Russian market. |
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Disposal of power distribution and sale assets | ||
On March 13, 2006, Enel and Hera SpA signed a preliminary agreement for the disposal of the power grid of 18 towns in the province of Modena. The price was set at€107.5 million, on which an advance payment of€17.5 million has been made. The business unit includes more than 3,700 km of network, about 80,000 customers and 42 employees. The transaction marks the completion of the agreement reached in the protocol of understanding signed in February 2005 between Enel and Meta Modena SpA, which has been merged into Hera SpA since January 1, 2006. | ||
44. | Stock option plans | |
The following table summarizes developments in 2005 in the stock-option plans described earlier, detailing the main assumptions used in calculating their fair value. |
Number of options | 2001 Plan | 2002 Plan | 2003 Plan | 2004 Plan | 2005 Plan | Total | ||||||||||||||||||
Options granted | 19,193,468 | (1) | 41,748,500 | 47,624,005 | 38,527,550 | 147,093,522 | ||||||||||||||||||
Options exercised at December 31, 2004 | — | 24,104,556 | 16,342,119 | — | — | 40,446,675 | ||||||||||||||||||
Options lapsed at December 31, 2004 | 2,503,326 | 4,824,000 | 3,237,700 | 1,231,000 | — | 11,796,026 | ||||||||||||||||||
Options outstanding at January 1, 2005 | 16,690,142 | 12,819,944 | 28,044,186 | 37,296,550 | — | 94,850,822 | ||||||||||||||||||
New options granted in 2005 | — | — | — | — | 28,757,000 | 28,757,000 | ||||||||||||||||||
Options exercised in 2005 | 16,301,333 | 10,697,094 | 14,158,373 | 12,392,982 | — | 53,549,782 | ||||||||||||||||||
Options lapsed in 2005 | 388,809 | 48,500 | 50,726 | 394,500 | 28,757,000 | 29,639,535 | ||||||||||||||||||
Options outstanding at December 31, 2005 | — | 2,074,350 | 13,835,087 | 24,509,068 | — | 40,418,505 | ||||||||||||||||||
- of which exercisable at December 31, 2005 | — | 2,074,350 | 2,203,002 | 4,718,900 | — | 8,996,252 | ||||||||||||||||||
Fair value at grant date (euro) | 0.48 | 0.17 | 0.37 | 0.18 | 0.27 | |||||||||||||||||||
Volatility | 27 | % | 28 | % | 28 | % | 17 | % | 15 | % | ||||||||||||||
Option expiry | June 05 | Dec. 07 | Dec. 08 | Dec. 09 | Dec. 10 | |||||||||||||||||||
Average expected annual dividends | 0.36 | 0.28 | 0.28 | 0.36 | 0.42 | |||||||||||||||||||
Risk-free interest rate | 4.05 | % | 2.82 | % | 2.82 | % | 2.72 | % | 3.30 | % | ||||||||||||||
Vesting period (regards last tranche for each plan) | 2001-2004 | 2002-2005 | 2003-2006 | 2004-2008 | 2005-2009 |
(1) | Portion actually exercisable (56%) of total options granted (34,274,050). |
As established by the Board of Directors, executives were divided into different brackets, with the executives receiving a different number of options depending on the bracket to which they belong. | ||
The right to subscribe the shares is subordinated to the executives concerned remaining employed within the Group, with a number of exceptions (for example, termination of employment because of retirement or permanent invalidity, exit from the Group of the company at which the executive is employed, and succession) specifically governed by the Regulations |
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The options may be exercised subject to a number of specific suspensory conditions. These include exceeding Group EBITDA forecasts and the performance of Enel shares with respect to the benchmark index indicated in the Regulations. |
45. | Transition to International Financial Reporting Standards (IFRS) | |
The Enel Group has adopted International Financial Reporting Standards (IFRS) endorsed by the European Commission starting from 2005, with the transition date to IFRS at January 1, 2004. The Group’s last consolidated financial statements prepared under Italian GAAP were those for the year ended December 31, 2004. | ||
As required by IFRS 1, this note includes the reconciliation schedules of the figures presented previously under Italian GAAP and those that have been restated under IFRS, together with the related notes on the adjustments. | ||
The reconciliation schedules have been prepared only for the purposes of the process of the transition to IFRS, for the preparation of the first set of consolidated financial statements in accordance with IFRS as approved by the European Commission. They do not include the comparative figures and explanatory notes that would be required to give a complete picture of the consolidated financial position and results of the Enel Group in accordance with IFRS. | ||
Please note that some of the information reported in the document “Transition to International Financial Reporting Standards (IFRS)” approved and published on June 14, 2005, has been reclassified and supplemented without altering the effects of the transition on shareholders’ equity at December 31, 2004 and the income statement for 2004. | ||
The schedules have been prepared using the same accounting policies adopted in preparing the consolidated financial statements at December 31, 2005, which are discussed in note no. 1. | ||
Adoption of IFRS 1 | ||
In adopting International Financial Reporting Standards, the Group has applied IFRS 1 — First-time adoption and has availed itself of certain exemptions. | ||
The exemptions allowed by IFRS 1 and applicable to the Group, as used to prepare the opening balance sheet, are set out below: |
§ | business combinations: the Group hasnotapplied IFRS 3 retrospectively to business combinations that took place before the transition date; | ||
§ | measurement of property, plant and equipment and of intangible assets at fair value or deemed cost: the Grouphasapplied the revalued amount method to certain asset categories; | ||
§ | employee benefits: the Grouphasdecided to recognize all cumulative actuarial gains and losses existing at January 1, 2004, while it has opted for the corridor |
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approach for all subsequent actuarial gains and losses; | ||
§ | translation reserve for balance sheets of consolidated entities from countries outside the euro area: as permitted by IFRS 1, the Group hasnotavailed itself of the exemption and has maintained the net cumulative exchange rate differences arising from prior translations of financial statements of foreign entities as determined prior to the transition date; | |
§ | share-based payment: the Group hasnot applied the exemption allowed by IFRS 1 for share-based payments and has applied IFRS 2 to all the plans existing at January 1, 2004; | |
§ | classification and measurement of financial instruments: the Group hasnotpostponed the transition date for IAS 32 and IAS 39 to January 1, 2005, and has taken the related effects into account in the opening balance sheet at January 1, 2004; | |
§ | designation of financial instruments at fair value through profit and loss or as available for sale: the Grouphasdecided to adopt this method at the transition date (January 1, 2004) rather than at the initial recognition date for IAS 39. |
§ | figures calculated under Italian GAAP reclassified for IFRS purposes; |
§ | adjustments for alignment with IFRS. |
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Italian GAAP | IAS/IFRS | |||||||||||||||
Millions of euro | reclassified for IAS | adjustments | IAS/IFRS | Notes | ||||||||||||
ASSETS | ||||||||||||||||
Non-current assets | ||||||||||||||||
Property, plant and equipment | 37,265 | 385 | 37,650 | 1 | ||||||||||||
Intangible assets | 13,422 | (1,578 | ) | 11,844 | 2-3 | |||||||||||
Deferred tax assets | 2,038 | 479 | 2,517 | 4 | ||||||||||||
Investments accounted for using the equity method | 255 | — | 255 | |||||||||||||
Non-current financial assets | 1,630 | (5 | ) | 1,625 | 5 | |||||||||||
Other non-current assets | 172 | — | 172 | |||||||||||||
Total non-current assets | 54,782 | (719 | ) | 54,063 | ||||||||||||
Current assets | ||||||||||||||||
Inventories | 1,321 | 12 | 1,333 | |||||||||||||
Trade receivables | 7,321 | (52 | ) | 7,269 | 6-7 | |||||||||||
Current financial assets | 627 | — | 627 | |||||||||||||
Cash and cash equivalents | 424 | — | 424 | |||||||||||||
Other current assets | 1,986 | (55 | ) | 1,931 | 8 | |||||||||||
Total current assets | 11,679 | (95 | ) | 11,584 | ||||||||||||
TOTAL ASSETS | 66,461 | (814 | ) | 65,647 |
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Italian GAAP | IAS/IFRS | |||||||||||||||
Millions of euro | reclassified for IAS | adjustments | IAS/IFRS | Notes | ||||||||||||
LIABILITIES | ||||||||||||||||
Shareholders’ equity | ||||||||||||||||
Share capital | 6,063 | — | 6,063 | |||||||||||||
Other reserves | 3,669 | (1,685 | ) | 1,984 | ||||||||||||
Retained earnings | 8,884 | — | 8,884 | |||||||||||||
Net income for the period | 2,509 | — | 2,509 | |||||||||||||
Group shareholders’ equity | 21,125 | (1,685 | ) | 19,440 | ||||||||||||
Minority interests | 190 | (9 | ) | 181 | ||||||||||||
TOTAL SHAREHOLDERS’ EQUITY | 21,315 | (1,694 | ) | 19,621 | ||||||||||||
Non-current liabilities | ||||||||||||||||
Long-term loans | 18,597 | (35 | ) | 18,562 | 9 | |||||||||||
Termination indemnities and other employee benefits | 1,767 | 1,257 | 3,024 | 10 | ||||||||||||
Provisions for risks and charges | 1,417 | (190 | ) | 1,227 | 11 | |||||||||||
Deferred tax liabilities | 2,515 | (461 | ) | 2,054 | 12 | |||||||||||
Other non-current liabilities | 329 | — | 329 | |||||||||||||
Total non-current liabilities | 24,625 | 571 | 25,196 | |||||||||||||
Current liabilities | ||||||||||||||||
Short-term loans | 4,145 | — | 4,145 | |||||||||||||
Current portion of long-term loans | 3,986 | — | 3,986 | |||||||||||||
Trade payables | 6,061 | (37 | ) | 6,024 | 13 | |||||||||||
Income tax payable | 714 | — | 714 | |||||||||||||
Current financial liabilities | 373 | 391 | 764 | 14 | ||||||||||||
Other current liabilities | 5,242 | (45 | ) | 5,197 | 15 | |||||||||||
Total current liabilities | 20,521 | 309 | 20,830 | |||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 66,461 | (814 | ) | 65,647 |
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Italian GAAP | IAS/IFRS | |||||||||||||||
Millions of euro | reclassified for IAS | adjustments | IAS/IFRS | Notes | ||||||||||||
ASSETS | ||||||||||||||||
Non-current assets | ||||||||||||||||
Property, plant and equipment | 36,546 | 156 | 36,702 | 1 | ||||||||||||
Intangible assets | 11,430 | (1,359 | ) | 10,071 | 2-3 | |||||||||||
Deferred tax assets | 2,339 | 614 | 2,953 | 4 | ||||||||||||
Investments accounted for using the equity method | 190 | — | 190 | |||||||||||||
Non-current financial assets | 1,731 | 45 | 1,776 | 5 | ||||||||||||
Other non-current assets | 154 | — | 154 | |||||||||||||
Total non-current assets | 52,390 | (544 | ) | 51,846 | ||||||||||||
Current assets | ||||||||||||||||
Inventories | 1,345 | — | 1,345 | |||||||||||||
Trade receivables | 8,090 | (63 | ) | 8,027 | 6-7 | |||||||||||
Current financial assets | 553 | (44 | ) | 509 | ||||||||||||
Cash and cash equivalents | 331 | — | 331 | |||||||||||||
Other current assets | 3,367 | (47 | ) | 3,320 | 8 | |||||||||||
Total current assets | 13,686 | (154 | ) | 13,532 | ||||||||||||
TOTAL ASSETS | 66,076 | (698 | ) | 65,378 |
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Italian GAAP | IAS/IFRS | |||||||||||||||
Millions of euro | reclassified for IAS | adjustments | IAS/IFRS | Notes | ||||||||||||
LIABILITIES | ||||||||||||||||
Shareholders’ equity | ||||||||||||||||
Share capital | 6,104 | — | 6,104 | |||||||||||||
Other reserves | 3,868 | (1,816 | ) | 2,052 | ||||||||||||
Retained earnings | 9,183 | (3 | ) | 9,180 | ||||||||||||
Net income for the period | 692 | (75 | ) | 617 | ||||||||||||
Group shareholders’ equity | 19,847 | (1,894 | ) | 17,953 | ||||||||||||
Minority interests | 1,131 | (18 | ) | 1,113 | ||||||||||||
TOTAL SHAREHOLDERS’ EQUITY | 20,978 | (1,912 | ) | 19,066 | 24 | |||||||||||
Non-current liabilities | ||||||||||||||||
Long-term loans | 20,334 | (43 | ) | 20,291 | 9 | |||||||||||
Termination indemnities and other employee benefits | 1,574 | 1,336 | 2,910 | 10 | ||||||||||||
Provisions for risks and charges | 1,494 | (90 | ) | 1,404 | 11 | |||||||||||
Deferred tax liabilities | 2,906 | (394 | ) | 2,512 | 12 | |||||||||||
Non-current financial liabilities | 4 | 366 | 370 | 14 | ||||||||||||
Other non-current liabilities | 218 | — | 218 | |||||||||||||
Total non-current liabilities | 26,530 | 1,175 | 27,705 | |||||||||||||
Current liabilities | ||||||||||||||||
Short-term loans | 5,192 | — | 5,192 | |||||||||||||
Current portion of long-term loans | 1,397 | — | 1,397 | |||||||||||||
Trade payables | 6,706 | (37 | ) | 6,669 | 13 | |||||||||||
Payables for contract work in progress | 149 | — | 149 | |||||||||||||
Income tax payable | 99 | — | 99 | |||||||||||||
Current financial liabilities | 379 | 114 | 493 | 14 | ||||||||||||
Other current liabilities | 4,646 | (38 | ) | 4,608 | 15 | |||||||||||
Total current liabilities | 18,568 | 39 | 18,607 | |||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 66,076 | (698 | ) | 65,378 |
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Italian GAAP | IAS/IFRS | |||||||||||||||
Millions of euro | reclassified for IAS | adjustments | IAS/IFRS | Notes | ||||||||||||
Ordinary revenues | 36,489 | — | 36,489 | |||||||||||||
Non-recurring revenues | 999 | (135 | ) | 864 | ||||||||||||
TOTAL REVENUES | 37,488 | (135 | ) | 37,353 | 16 | |||||||||||
Personnel | 3,790 | 3 | 3,793 | 17 | ||||||||||||
Fuel for thermal generation | 3,598 | — | 3,598 | |||||||||||||
Purchased power | 10,465 | — | 10,465 | |||||||||||||
Interconnection and roaming | 1,346 | — | 1,346 | |||||||||||||
Services, leases and rentals | 4,003 | 19 | 4,022 | 18 | ||||||||||||
Fuel for trading and gas for resale to end-uers | 1,795 | — | 1,795 | |||||||||||||
Materials | 1,255 | — | 1,255 | |||||||||||||
Other | 1,148 | (4 | ) | 1,144 | ||||||||||||
Capitalized costs | (1,032 | ) | — | (1,032 | ) | |||||||||||
Amortization, depreciation and impairment losses | 5,536 | (133 | ) | 5,403 | 19 | |||||||||||
Provisions | 20 | (20 | ) | — | 20 | |||||||||||
OPERATING INCOME | 5,564 | — | 5,564 | |||||||||||||
Net financial income (expense) | (1,149 | ) | (170 | ) | (1,319 | ) | 21 | |||||||||
INCOME BEFORE EXTRAORDINARY ITEMS AND INCOME TAX | 4,415 | (170 | ) | 4,245 | ||||||||||||
Extraordinary income | — | — | — | |||||||||||||
(Extraordinary expense) | (66 | ) | 66 | — | 22 | |||||||||||
INCOME BEFORE TAXES | 4,349 | (104 | ) | 4,245 | ||||||||||||
Income taxes | 1,517 | (19 | ) | 1,498 | 23 | |||||||||||
INCOME BEFORE MINORITY INTERESTS | 2,832 | (85 | ) | 2,747 | ||||||||||||
Minority interests | (126 | ) | 10 | (116 | ) | |||||||||||
NET INCOME | 2,706 | (75 | ) | 2,631 |
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§ | elimination of the accumulated depreciation of appurtenance land, which under IFRS has to be separated from the plant and can no longer be depreciated (+€70 million at January 1, 2004 and +€72 million at December 31, 2004 — see note 1Reconciliation of shareholders’ equityattached to these notes); |
§ | reversal of impairment losses on property, plant and equipment due to redefinition of the depreciation plan based on a review of the remaining useful lives of the relevant assets (+€153 million at January 1, 2004 and +€56 million at December 31, 2004 — see note (a) inReconciliation of shareholders’ equityattached to these notes); |
§ | capitalization of dismantling and restoration charges (+€27 million at January 1, 2004 and +€24 million at December 31, 2004, see note (a) inReconciliation of shareholders’ equity attached to these notes) and simultaneous accrual to a provision for charges for the estimated present value of future costs on the liabilities side of the balance sheet (see note 11); |
§ | reversal of a provision for plant demolition that did not comply with the recognition criteria of IFRS (+€15 million at January 1, 2004 and +€35 million at December 31, 2004); |
§ | reversal, separation and recalculation of the depreciation for significant plant components to comply with component analysis approach (-€21 million at January 1, 2004 and -€32 million at December 31, 2004; see note (a) inReconciliation of shareholders’ equityattached to these notes); |
§ | writeoff of connection fees for the gas sector and the related deferral to the income statement using the same method applied for the related costs (-€38 million at January 1, 2004 and -€59 million at December 31, 2004); |
§ | recognition of buildings appraised at the end of 2003 at fair value (+€179 million at January 1, 2004 and +€61 million at December 31, 2004). |
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Millions of euro | ||||||||
Jan. 1, 2004 | Dec. 31, 2004 | |||||||
Start-up costs | (26 | ) | (21 | ) | ||||
Research, development and advertising | (31 | ) | (1 | ) | ||||
Deferred charges | (22 | ) | (14 | ) | ||||
Effect of discounting of “other similar rights” | (76 | ) | (83 | ) | ||||
Extraordinary contribution for the suppression of the Electricity Industry Employee Pension Fund | (1,423 | ) | (1,334 | ) | ||||
Total | (1,578 | ) | (1,453 | ) |
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§ | the adjustment of foreign currency medium- to long-term payables using the period-end exchange rate, equal to -€33 million at January 1, 2004 and -€28 million at December 31, 2004, from the method used under Italian GAAP, where these payables were recognized using the hedge exchange rate; | |
§ | adoption of the amortized cost method to measure medium- to long-term bank loans and bond issues equal to -€2 million at January 1, 2004 and -€15 million at December 31, 2004. |
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Millions of euro | ||||||||
Jan. 1, 2004 | Dec. 31, 2004 | |||||||
Termination benefit | (60 | ) | (80 | ) | ||||
Electricity discounts | 952 | 1,014 | ||||||
Other benefits | 365 | 402 | ||||||
Total | 1,257 | 1,336 |
Millions of euro | ||||||||
Jan. 1, 2004 | Dec. 31, 2004 | |||||||
Provision for dismantling and restoration charges | 40 | 43 | ||||||
Provision for demolition of plant | (103 | ) | (103 | ) | ||||
Provision for company restructuring | (76 | ) | (30 | ) | ||||
Other provisions | (51 | ) | — | |||||
Total | (190 | ) | (90 | ) |
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§ | elimination of a €114 million capital gain generated on the sale of the investment in NewReal following the restating at fair value of buildings appraised at the end of 2003; | |
§ | reversal of the release of €23 million from the restructuring provision by NewReal already adjusted for during first-time adoption. |
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Millions of euro | ||||
Dec. 31, 2004 | ||||
Amortization of goodwill | (102 | ) | ||
Amortization of intangible assets | (51 | ) | ||
Amortization of FPE contribution | (88 | ) | ||
Component analysis | 11 | |||
Impairment of plants | 97 | |||
Total | (133 | ) |
§ | a €241 million decrease due to the elimination of amortization of goodwill, intangible assets and the extraordinary contribution (FPE), which is no longer allowed under IFRS; | |
§ | a €108 million increase due to the separation and recalculation of significant plant components (“component analysis”) and greater depreciation charges following the reversal of impairment of plant parts and review of remaining useful life. |
§ | the financial component arising from the discounting of employee benefits (+€144 million); | |
§ | the ineffective portion of hedges related to derivative financial instruments (+€29 million). |
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Income before | ||||||||||||||
Shareholders’ | Shareholders’ | minority interests for | ||||||||||||
equity at January | equity at December | year ending | ||||||||||||
Notes | 1, 2004 | 31, 2004 | December 31, 2004 | |||||||||||
ITALIAN GAAP | 21,315 | 20,978 | 2,832 | |||||||||||
Adjustments: | ||||||||||||||
- Property, plant and equipment and related depreciation | a | 330 | 79 | (246 | ) | |||||||||
- Start-up, development and advertising costs and other intangible assets | b | (1,501 | ) | (1,372 | ) | 138 | ||||||||
- Goodwill | c | — | 94 | 103 | ||||||||||
- Derivative financial instruments | d | (391 | ) | (480 | ) | (29 | ) | |||||||
- Other employee costs (e.g. termination benefits, stock option plans, Asem healthcare scheme, etc.) | e | (1,257 | ) | (1,336 | ) | (87 | ) | |||||||
- Provisions for risks and charges (restructuring, demolition, breakdowns, etc.) | f | 241 | 168 | (73 | ) | |||||||||
- Other adjustments | g | (54 | ) | (71 | ) | 95 | ||||||||
Tax impact of the adjustments | 938 | 1,006 | 14 | |||||||||||
Total adjustments net of tax effects | (1,694 | ) | (1,912 | ) | (85 | ) | ||||||||
IFRS | 19,621 | 19,066 | 2,747 |
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§ | recognition of the fair value of the derivative asset or liability in the balance sheet; | |
§ | recognition of a cash flow hedge reserve in equity for the effective part of the hedge; | |
§ | recognition of the ineffective part of the hedge in the income statement. |
§ | recognition of the derivative asset or liability in the balance sheet at its fair value; | |
§ | set-off of the change in fair value of the hedged risk against the hedged item. |
§ | re-recognition and remeasurement of: |
– | the liability for the electricity discount; | ||
– | the liability for the loyalty bonus. |
§ | application of different measurement criteria for: |
– | termination benefits; | ||
– | provisions for additional months’ pay and indemnities in lieu of notice; | ||
– | provisions for the supplementary pension plan. |
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Dec. 31, 2004 | ||||
Net financial debt under Italian GAAP | 24,296 | |||
- Application of amortized cost method to short-term and medium to long-term debt(1) | (158 | ) | ||
- Change in fair value calculated on bonds hedged by fair value hedges | 35 | |||
- Change in exchange rates on debt hedged against exchange rate risks on short-term and medium to long-term debt | (54 | ) | ||
- Medium to long-term payables to other financing entities(2) | 216 | |||
- Short-term payables to other financing entities for securitizations | 214 | |||
- Other | (36 | ) | ||
Net financial debt under IFRS | 24,514 |
(1) | Includes premiums, discounts and transaction costs directly related to the debts no longer shown separately in the line items established by Italian GAAP. | |
(2) | Reclassification of the payable due to the Ministry for the Economy and Financefor the UMTS license. |
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Shareholders’ | Shareholders’ | |||||||||||||||
Net income | equity at | Net income | equity at | |||||||||||||
Millions of euro | 2005 | Dec. 31, 2005 | 2004 | Dec. 31, 2004 | ||||||||||||
Enel SpA’s Italian GAAP financial statements | 2,715 | 14,972 | 7,272 | 15,301 | ||||||||||||
IFRS/IAS adjustments: | ||||||||||||||||
- Other personnel costs | (7 | ) | (29 | ) | 3 | (31 | ) | |||||||||
- Derivatives | 3 | (139 | ) | (7 | ) | (145 | ) | |||||||||
- Measurement of financial assets | (42 | ) | 140 | — | — | |||||||||||
- Other adjustments | 4 | 18 | 3 | 11 | ||||||||||||
- Tax effects of adjustments | (1 | ) | 53 | — | 20 | |||||||||||
Total adjustments net of tax effects | (43 | ) | 43 | (1 | ) | (145 | ) | |||||||||
Enel SpA’s IFRS/IAS balances | 2,672 | 15,015 | 7,271 | 15,156 | ||||||||||||
- Carrying amount and adjustments to the value of consolidated subsidiaries and companies accounted for using the equity method | 257 | (17,311 | ) | 3,244 | (22,713 | ) | ||||||||||
- Shareholders’ equity and net income (on a comparable basis) of consolidated subsidiaries and companies accounted for using the equity method, net of minority interests | 2,522 | 21,219 | (721 | ) | 25,047 | |||||||||||
- Goodwill arising on consolidation, related amortization and impairment losses | — | (277 | ) | (1,656 | ) | 5,028 | ||||||||||
- Intragroup dividends | (1,610 | ) | — | (1,947 | ) | — | ||||||||||
- Elimination of unrealized gains among Group companies, net of the related tax effects and other minor adjustments | 54 | 411 | (3,560 | ) | (4,565 | ) | ||||||||||
GROUP | 3,895 | 19,057 | 2,631 | 17,953 | ||||||||||||
MINORITY INTERESTS | 237 | 359 | 116 | 1,113 | ||||||||||||
CONSOLIDATED FINANCIAL STATEMENTS | 4,132 | 19,416 | 2,747 | 19,066 |
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Currency | ||||||||||||||||||||||
of | Group % | |||||||||||||||||||||
Company name | Registered office | Activity | Share capital | account | holding | Held by | % | |||||||||||||||
at Dec. 31, 2005 | ||||||||||||||||||||||
Parent Company: | ||||||||||||||||||||||
Enel SpA | Rome | Holding | 6,157,071,646 | euro | — | |||||||||||||||||
Subsidiaries: | ||||||||||||||||||||||
Avisio Energia SpA | Trento | Gas distribution | 6,500,000 | euro | 100.00 | Enel Rete Gas SpA | 100.00 | |||||||||||||||
Barras Electricas Galaico Asturianas SA | Lugo (Spain) | Electricity distribution | 15,689,796.62 | euro | 54.95 | Electra de Viesgo Distribucion SL | 54.95 | |||||||||||||||
Barras Electricas Generacion SL | Lugo (Spain) | Electricity generation | 1,374,136.05 | euro | 100.00 | Barras Electricas Galaico Asturianas SA | 100.00 | |||||||||||||||
Carbones Colombianos del Cerrejon SA | Bogotà (Colombia) | Exploitation of coal mines | 5,806,149,114 | COP | 99.99 | Pragma Energy SA Enel Investment Holding BV | 90.89 9.10 | |||||||||||||||
Cise Srl | Rome | Real estate management | 318,291,049 | euro | 100.00 | Enel SpA | 100.00 | |||||||||||||||
Co.Im Gas SpA | S. Maria a Colle (Lucca) | Management of gas distribution and sales plants | 1,479,000 | euro | 80.00 | Enel Rete Gas SpA | 80.00 | |||||||||||||||
Concert Srl | Rome | Product, plant and equipment certification | 10,000 | euro | 51.00 | Enel Produzione SpA | 51.00 | |||||||||||||||
Dalmazia Trieste Srl | Rome | Real estate management | 5,585,698 | euro | 100.00 | Cise Srl Enel Ape Srl(formerly Ape Gruppo Enel Srl) | 69.91 30.09 | |||||||||||||||
Deval SpA | Aosta | Electricity distribution and sale in Valle D’Aosta | 37,500,000 | euro | 51.00 | Enel SpA | 51.00 | |||||||||||||||
Deval Energie Srl | Aosta | Electricity sale | 200,000 | euro | 100.00 | Deval SpA | 100.00 | |||||||||||||||
Easygas Srl | Milan | Gas sale | 10,000 | euro | 100.00 | Enel Gas SpA | 100.00 | |||||||||||||||
Electra de Viesgo Distribucion SL | Santander (Spain) | Electricity distribution and sale | 77,792,000 | euro | 100.00 | Enel Distribuzione SpA | 100.00 | |||||||||||||||
Electrica Banat SA | Timisoara (Romania) | Electricity distribution | 463,474,090 | RON | 51.00 | Enel Distribuzione SpA | 51.00 | |||||||||||||||
Electrica Dobrogea SA | Costanza (Romania) | Electricity distribution | 338,970,050 | RON | 51.00 | Enel Distribuzione SpA | 51.00 | |||||||||||||||
Enel Ape Srl(formerly Ape Gruppo Enel Srl) | Rome | Personnel administration activities, information technology and services to companies | 50,000,000 | euro | 100.00 | Enel SpA | 100.00 | |||||||||||||||
Enel Capital Srl | Rome | Research in the field of innovation technology | 8,500,000 | euro | 100.00 | Enel SpA | 100.00 | |||||||||||||||
Enel Comercializadora de Gas SA | Santander (Spain) | Gas and electricity sale | 61,000 | euro | 100.00 | Enel Trade SpA | 100.00 | |||||||||||||||
Enel Distribuzione SpA | Rome | Electricity distribution | 6,119,200,000 | euro | 100.00 | Enel SpA | 100.00 | |||||||||||||||
Enel Energia SpA | Rome | Electricity sale | 1,414,000 | euro | 100.00 | Enel SpA | 100.00 | |||||||||||||||
Enel ESN Energo LLC | Moscow (Russia) | Management and maintenance of electricty generation plants | 1,000,000 | RUB | 100.00 | Enel ESN Management BV | 100.00 | |||||||||||||||
Enel ESN Management BV | Amsterdam (Holland) | Holding company | 18,000 | euro | 75.00 | Enel Produzione SpA | 75.00 | |||||||||||||||
Enel.Factor SpA | Rome | Factoring | 12,500,000 | euro | 100.00 | Enel SpA | 100.00 | |||||||||||||||
Enel Finance International SA | Luxembourg | Finance | 1,391,900,230 | euro | 100.00 | Enel SpA | 100.00 |
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Currency | ||||||||||||||||||||||
of | Group % | |||||||||||||||||||||
Company name | Registered office | Activity | Share capital | account | holding | Held by | % | |||||||||||||||
at Dec. 31, 2005 | ||||||||||||||||||||||
Enel Gas SpA | Milan | Gas and electricity sale | 302,039 | euro | 100.00 | Enel Distribuzione SpA | 100.00 | |||||||||||||||
Enel Green Power International SA | Luxembourg | Holding of companies operating in electricity generation from renewable resources | 156,650,000 | euro | 100.00 | Enel Produzione SpA Enel Investment Holding BV | 67.11 32.89 | |||||||||||||||
Enel Investment Holding BV | Amsterdam (Holland) | Holding company | 1,593,050,000 | euro | 100.00 | Enel SpA | 100.00 | |||||||||||||||
Enel Ireland Finance Ltd | Dublin (Irleland) | Finance | 1,000,000 | euro | 100.00 | Enel Finance International SA | 100.00 | |||||||||||||||
Enel Latin America LLC(1) | Wilmington (Delaware – USA) | Electricity generation from renewable resources | — | — | 100.00 | Enel Green Power International SA | 100.00 | |||||||||||||||
Enel M@p Srl | Rome | Metering, remote control and communication services managed on the electricity network | 100,000 | euro | 100.00 | Enel Distribuzione SpA | 100.00 | |||||||||||||||
Enel.NewHydro Srl | Rome | Engineering, water systems | 1,000,000 | euro | 100.00 | Enel SpA | 100.00 | |||||||||||||||
Enel North America Inc.(1) | Wilmington (Delaware – USA) | Electricity generation from renewable resources | 14.25 | USD | 100.00 | Enel Green Power International SA | 100.00 | |||||||||||||||
Enelpower SpA | Milan | Engineering and contracting | 10,000,000 | euro | 100.00 | Enel SpA | 100.00 | |||||||||||||||
Enelpower Contractor and Development Saudi Arabia Ltd | Riyadh (Saudi Arabia) | Power plant construction, management and maintenance | 5,000,000 | SR | 51.00 | Enelpower SpA | 51.00 | |||||||||||||||
Enelpower do Brasil Ltda | Rio de Janeiro (Brazil) | Engineering and contracting | 1,242,000 | R$ | 99.99 | Enelpower SpA | 99.99 | |||||||||||||||
Enelpower UK Ltd | London (United Kingdom) | Engineering and contracting | 1,000 | GBP | 100.00 | Enelpower SpA | 100.00 | |||||||||||||||
Enel Produzione SpA | Rome | Electricity generation | 6,352,138,606 | euro | 100.00 | Enel SpA | 100.00 | |||||||||||||||
Enel.Re Ltd | Dublin (Ireland) | Reinsurance | 3,000,000 | euro | 100.00 | Enel Investment Holding BV | 100.00 | |||||||||||||||
Enel Rete Gas SpA | Milan | Gas distribution | 54,139,160 | euro | 99.82 | Enel Distribuzione SpA | 99.82 | |||||||||||||||
Enel Service UK Ltd | London (United Kingdom) | Services | 100 | GBP | 100.00 | Enel Trade SpA | 100.00 | |||||||||||||||
Enel Servicii Srl | Bucharest (Romania) | Services to companies | 200,000 | RON | 100.00 | Enel SpA Enel Distribuzione SpA | 80.00 20.00 | |||||||||||||||
Enel.si — Servizi integrati Srl | Rome | Engineering and energy related services | 5,000,000 | euro | 100.00 | Enel SpA | 100.00 | |||||||||||||||
Enel Sole Srl | Rome | Public lighting systems | 4,600,000 | euro | 100.00 | Enel SpA | 100.00 | |||||||||||||||
Enel Trade SpA | Rome | Fuel trading and logistics - Electricity sale | 100,885,000 | euro | 100.00 | Enel SpA | 100.00 | |||||||||||||||
Enel Union Fenosa Renovables SA | Madrid (Spain) | Electricity generation from renewable resources | 32,505,000 | euro | 80.00 | Enel Viesgo Renovables SL | 80.00 | |||||||||||||||
Enel Viesgo Renovables SL | Santander (Spain) | Holding of electricity companies | 35,603,006 | euro | 100.00 | Viesgo Generacion SL | 100.00 | |||||||||||||||
Enel Viesgo Servicios SL | Santander (Spain) | Services to companies | 3,010 | euro | 100.00 | Enel SpA Enel Produzione SpA Enel Distribuzione SpA | 60.00 20.00 20.00 |
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of | Group % | |||||||||||||||||||||
Company name | Registered office | Activity | Share capital | account | holding | Held by | % | |||||||||||||||
at Dec. 31, 2005 | ||||||||||||||||||||||
Energias Especiales de Andalucia SA | Seville (Spain) | Electricity generation from renewable resources | 20,000 | euro | 100.00 | EUFER Renovables Ibericas 2004 SA | 100.00 | |||||||||||||||
Energias Especiales de Careon SA | La Coruna (Spain) | Electricity generation from renewable resources | 270,450 | euro | 77.00 | Enel Union Fenosa Renovables SA | 77.00 | |||||||||||||||
Energias Especiales de Castelo SA | Madrid (Spain) | Electricity generation from renewable resources | 437,400 | euro | 100.00 | Enel Union Fenosa Renovables SA | 100.00 | |||||||||||||||
Energias Especiales de Pena Armada SA | Madrid (Spain) | Electricity generation from renewable resources | 963,300 | euro | 80.00 | Enel Union Fenosa Renovables SA | 80.00 | |||||||||||||||
Energias Especiales del Alto Ulla SA | Madrid (Spain) | Electricity generation from renewable resources | 360,600 | euro | 100.00 | Enel Union Fenosa Renovables SA | 100.00 | |||||||||||||||
Energias Especiales del Noroeste SA | Madrid (Spain) | Electricity generation from renewable resources | 6,812,040 | euro | 100.00 | Enel Union Fenosa Renovables SA | 100.00 | |||||||||||||||
Energias Renovables Montes de San Sebastian SL | Madrid (Spain) | Electricity generation from renewable resources | 705,000 | euro | 100.00 | Enel Union Fenosa Renovables SA | 100.00 | |||||||||||||||
Eolica del Cordal de Montouto SL | Madrid (Spain) | Electricity generation from renewable resources | 160,000 | euro | 100.00 | Enel Union Fenosa Renovables SA | 100.00 | |||||||||||||||
EUFER Comercializadora SL | Madrid (Spain) | Electricity generation from renewable resources | 60,000 | euro | 100.00 | Enel Union Fenosa Renovables SA | 100.00 | |||||||||||||||
EUFER Renovables Ibericas 2004 SA | Madrid (Spain) | Electricity generation from renewable resources | 5,100,000 | euro | 100.00 | Enel Union Fenosa Renovables SA | 100.00 | |||||||||||||||
Geotermica Nicaraguense SA | Managua (Nicaragua) | Electricity generation from renewable resources | 50,000 | NIO | 60.00 | Enel Produzione SpA | 60.00 | |||||||||||||||
Hydrogen Park — Marghera per l’idrogeno Scrl | Venice | Promotion of studies and projects for the use of hydrogen | 215,000 | euro | 53.49 | Enel Produzione SpA | 53.49 | |||||||||||||||
Iridea Srl | Milan | Advisory and consulting services | 1,250,000 | euro | 100.00 | Enel Gas SpA | 100.00 | |||||||||||||||
Maritza East III Power Company AD | Sofia (Bulgaria) | Electricity generation | 265,943,600 | leva | 73.00 | Maritza East III Power Holding BV | 73.00 | |||||||||||||||
Maritza East III Power Holding BV | Amsterdam (Holland) | Holding company | 100,000,000 | euro | 60.00 | Enel Produzione SpA | 60.00 | |||||||||||||||
Metanodotti Padani SpA | Milan | Gas distribution | 309,600 | euro | 100.00 | Enel Rete Gas SpA | 100.00 | |||||||||||||||
Metanodotti Trentini Srl | Milan | Gas distribution | 10,400 | euro | 100.00 | Metanodotti Padani SpA | 100.00 | |||||||||||||||
Parque Eolico de San Andrés SA(formerly Parque Eolico de Coucepenido SA) | La Coruna (Spain) | Electricity generation from renewable resources | 552,920 | euro | 82.00 | Enel Union Fenosa Renovables SA | 82.00 | |||||||||||||||
Parque Eolico La Losilla SA | Madrid (Spain) | Electricity generation from renewable resources | 60,400 | euro | 100.00 | EUFER Renovables Ibericas 2004 SA | 100.00 | |||||||||||||||
Pragma Energy SA | Lugano (Switzerland) | Coal trading | 4,000,000 | CHF | 100.00 | Enel Investment Holding BV | 100.00 | |||||||||||||||
Reti Gas Scrl | Milan | Construction of gas distribution networks | 11,000 | euro | 95.00 | Enel Rete Gas SpA | 95.00 | |||||||||||||||
Sfera — Società per la formazione e le risorse aziendali Srl | Rome | Human resources and training | 2,000,000 | euro | 100.00 | Enel SpA | 100.00 | |||||||||||||||
Sistemas Energeticos Manon Ortigueira SA | Ortigueira (Spain) | Electricity generation from renewable resources | 4,507,500 | euro | 86.00 | Enel Union Fenosa Renovables SA | 86.00 |
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Currency | ||||||||||||||||||||||
of | Group % | |||||||||||||||||||||
Company name | Registered office | Activity | Share capital | account | holding | Held by | % | |||||||||||||||
at Dec. 31, 2005 | ||||||||||||||||||||||
Viesgo Energia SL | Santander (Spain) | Electricity and gas sale | 1,000,000 | euro | 100.00 | Electra de Viesgo Distribucion SL | 100.00 | |||||||||||||||
Viesgo Generacion SL | Santander (Spain) | Electricity generation and sale | 425,311,006 | euro | 100.00 | Enel Produzione SpA | 100.00 | |||||||||||||||
Water & Industrial Services Company SpA | Monza | Sewage treatment | 15,615,000 | euro | 51.00 | Enel.NewHydro Srl | 51.00 |
(1) | The companies held by Enel North America Inc. and Enel Latin America LLC and fully consolidated on a line-by-line basis are listed separately. |
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Currency | ||||||||||||||||||||
Share capital | of | Group % | ||||||||||||||||||
Company name | Registered office | (2) | account | holding(3) | Held by | % | ||||||||||||||
at Dec. 31, 2005 | ||||||||||||||||||||
Parent Company: | ||||||||||||||||||||
Enel North America Inc. | Wilmington (Delaware - USA) | 14.25 | USD | 100.00 | Enel Green Power International SA | 100.00 | ||||||||||||||
Subsidiaries: | ||||||||||||||||||||
Agassiz Beach LLC | Minneapolis (Minnesota - USA) | — | — | 49.00 | CHI Minnesota Wind LLC | 49.00 | ||||||||||||||
Aquenergy Systems Inc. | Greenville (South Carolina - USA) | 10,500 | USD | 100.00 | Consolidated Hydro Southeast Inc. | 100.00 | ||||||||||||||
Asotin Hydro Company Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | Enel North America Inc. | 100.00 | ||||||||||||||
Autumn Hills LLC | Minneapolis (Minnesota - USA) | — | — | 49.00 | CHI Minnesota Wind LLC | 49.00 | ||||||||||||||
Aziscohos Hydro Company Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | Enel North America Inc. | 100.00 | ||||||||||||||
Barnet Hydro Company LP | Burlington (Vermont - USA) | — | — | 100.00 | Sweetwater Hydroelectric Inc. CHI Acquisitions II Inc. | 90.00 10.00 | ||||||||||||||
Beaver Falls Water Power Company | Philadelphia (Pennsylvania - USA) | — | — | 67.50 | Beaver Valley Holdings Ltd. | 67.50 | ||||||||||||||
Beaver Valley Holdings Ltd. | Philadelphia (Pennsylvania - USA) | 2 | USD | 100.00 | Hydro Development Group Inc. | 100.00 | ||||||||||||||
Beaver Valley Power Company | Philadelphia (Pennsylvania - USA) | 30 | USD | 100.00 | Hydro Development Group Inc. | 100.00 | ||||||||||||||
Black River Hydro Assoc. | New York (New York - USA) | — | — | 75.00 | (Cataldo) Hydro Power Associates | 75.00 | ||||||||||||||
Boott Field LLC | Wilmington (Delaware - USA) | — | — | 100.00 | Boott Hydropower Inc. | 100.00 | ||||||||||||||
Boott Hydropower Inc. | Boston (Massachusetts - USA) | — | — | 100.00 | Boot Sheldon Holdings LLC | 100.00 | ||||||||||||||
Boott Sheldon Holdings LLC | Wilmington (Delaware - USA) | — | — | 100.00 | Hydro Finance Holding Company Inc. | 100.00 | ||||||||||||||
BP Hydro Associates | Boise (Idaho - USA) | — | — | 100.00 | CHI Idaho Inc. CHI Magic Valley Inc. | 68.00 32.00 | ||||||||||||||
BP Hydro Finance Partnership | Salt Lake City (Utah - USA) | — | — | 100.00 | BP Hydro Associates Fulcrum Inc. | 75.92 24.08 | ||||||||||||||
Bypass Limited | Boise (Idaho - USA) | — | — | 100.00 | Northwest Hydro Inc. CHI West Inc. Eldorado Hydro | 69.35 29.65 1.00 | ||||||||||||||
Bypass Power Company | Los Angeles (California - USA) | — | — | 100.00 | CHI West Inc. | 100.00 | ||||||||||||||
Canastota Wind Power LLC | Wilmington (Delaware - USA) | — | — | 100.00 | Essex Company | 100.00 | ||||||||||||||
(Cataldo) Hydro Power Associates | New York (New York - USA) | — | — | 100.00 | Hydro Development Group Inc. CHI Black River Inc. | 50.00 50.00 | ||||||||||||||
CHI Acquisitions Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | Enel North America Inc. | 100.00 | ||||||||||||||
CHI Acquisitions II Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | CHI Finance LLC | 100.00 | ||||||||||||||
CHI Black River Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | CHI Finance LLC | 100.00 | ||||||||||||||
CHI Canada Inc. | Montreal (Québec - Canada) | 100 | CAD | 100.00 | CHI Finance LLC | 100.00 | ||||||||||||||
CHI Dexter Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | CHI Finance LLC | 100.00 | ||||||||||||||
CHI Finance LLC | Wilmington (Delaware - USA) | — | — | 100.00 | Enel North America Inc. | 100.00 | ||||||||||||||
CHI Highfalls Inc. | Wilmington (Delaware - USA) | — | — | 100.00 | CHI Finance LLC | 100.00 | ||||||||||||||
CHI Hydroelectric Company Inc. | St. John (Newfoundland - Canada) | 100 | CAD | 100.00 | CHI Canada Inc. | 100.00 | ||||||||||||||
CHI Idaho Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | CHI Acquisitions Inc. | 100.00 | ||||||||||||||
CHI Magic Valley Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | CHI Acquisitions Inc. | 100.00 | ||||||||||||||
CHI Minnesota Wind LLC | Wilmington (Delaware - USA) | — | — | 100.00 | CHI Finance LLC | 100.00 | ||||||||||||||
CHI Mountain States Operations Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | CHI Acquisitions Inc. | 100.00 | ||||||||||||||
CHI Operations Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | Enel North America Inc. | 100.00 | ||||||||||||||
CHI Power Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | Enel North America Inc. | 100.00 | ||||||||||||||
CHI Power Marketing Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | Enel North America Inc. | 100.00 | ||||||||||||||
CHI S.F. LP | Montreal (Québec - Canada) | — | — | 100.00 | CHI Canada Inc. CHI Hydroelectric Co. Inc. | 99.00 1.00 | ||||||||||||||
CHI Universal Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | Enel North America Inc. | 100.00 | ||||||||||||||
CHI West Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | CHI Acquisitions Inc. | 100.00 | ||||||||||||||
CHI Western Operations Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | CHI Acquisitions Inc. | 100.00 |
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Currency | ||||||||||||||||||||
Share capital | of | Group % | ||||||||||||||||||
Company name | Registered office | (2) | account | holding(3) | Held by | % | ||||||||||||||
at Dec. 31, 2005 | ||||||||||||||||||||
Coneross Power Corporation Inc. | Greenville (South Carolina - USA) | 110,000 | USD | 100.00 | Aquenergy Systems Inc. | 100.00 | ||||||||||||||
Consolidated Hydro Mountain States Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | CHI Acquisitions Inc. | 100.00 | ||||||||||||||
Consolidated Hydro New Hampshire Inc. | Wilmington (Delaware - USA) | 130 | USD | 100.00 | CHI Universal Inc. | 100.00 | ||||||||||||||
Consolidated Hydro New York Inc. | Wilmington (Delaware - USA) | 200 | USD | 100.00 | Enel North America Inc. | 100.00 | ||||||||||||||
Consolidated Hydro Southeast Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | CHI Acquisitions II Inc. | 100.00 | ||||||||||||||
Consolidated Pumped Storage Inc. | Wilmington (Delaware - USA) | 100 | USD | 80.00 | Enel North America Inc. | 80.00 | ||||||||||||||
Copenhagen Associates | New York (New York - USA) | — | — | 100.00 | Hydro Development Group Inc. CHI Dexter Inc. | 50.00 50.00 | ||||||||||||||
Crosby Drive Investments Inc. | Boston (Massachusetts - USA) | — | — | 100.00 | Asotin Hydro Company Inc. | 100.00 | ||||||||||||||
El Dorado Hydro | Los Angeles (California - USA) | — | — | 100.00 | Olympe Inc. Motherlode Hydro Inc. | 82.50 17.50 | ||||||||||||||
Essex Company | Boston (Massachusetts - USA) | — | — | 100.00 | Enel North America Inc. | 100.00 | ||||||||||||||
Florence Hills LLC | Minneapolis (Minnesota - USA) | — | — | 49.00 | CHI Minnesota Wind LLC | 49.00 | ||||||||||||||
Fulcrum Inc. | Boise (Idaho - USA) | 1,002.50 | USD | 100.00 | Consolidated Hydro Mountain States Inc. | 100.00 | ||||||||||||||
Gauley Hydro LLC | Wilmington (Delaware - USA) | — | — | 100.00 | Essex Company | 100.00 | ||||||||||||||
Gauley River Management Corporation | Burlington (Vermont - USA) | — | — | 100.00 | CHI Finance LLC | 100.00 | ||||||||||||||
Gauley River Power Partners LP | Burlington (Vermont - USA) | — | — | 100.00 | Gualey Hydro LLC Gualey River Management Corporation | 99.00 1.00 | ||||||||||||||
Gestion Cogeneration Inc. | Montreal (Québec - Canada) | 100 | CAD | 60.00 | Hydrodev Inc. | 60.00 | ||||||||||||||
Hadley Ridge LLC | Minneapolis (Minnesota - USA) | — | — | 49.00 | CHI Minnesota Wind LLC | 49.00 | ||||||||||||||
Highfalls Hydro Company Inc. | Wilmington (Delaware - USA) | — | — | 100.00 | CHI Finance LLC | 100.00 | ||||||||||||||
Hope Creek LLC | Minneapolis (Minnesota - USA) | — | — | 49.00 | CHI Minnesota Wind LLC | 49.00 | ||||||||||||||
Hosiery Mills Hydro Company Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | CHI Acquisitions Inc. | 100.00 | ||||||||||||||
Hydrodev Inc. | Montreal (Québec - Canada) | 100 | CAD | 100.00 | CHI Canada Inc. | 100.00 | ||||||||||||||
Hydro Development Group Inc. | New York (New York - USA) | 12.25 | USD | 100.00 | CHI Acquisitions II Inc. | 100.00 | ||||||||||||||
Hydro Energies Corporation | Burlington (Vermont - USA) | 5,000 | USD | 100.00 | CHI Finance LLC | 100.00 | ||||||||||||||
Hydro Finance Holding Company Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | Enel North America Inc. | 100.00 | ||||||||||||||
Jack River LLC | Minneapolis (Minnesota - USA) | — | — | 49.00 | CHI Minnesota Wind LLC | 49.00 | ||||||||||||||
Jessica Mills LLC | Minneapolis (Minnesota - USA) | — | — | 49.00 | CHI Minnesota Wind LLC | 49.00 | ||||||||||||||
Julia Hills LLC | Minneapolis (Minnesota - USA) | — | — | 49.00 | CHI Minnesota Wind LLC | 49.00 | ||||||||||||||
Kings River Hydro Company Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | CHI Finance LLC | 100.00 | ||||||||||||||
Kinneytown Hydro Company Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | Enel North America Inc. | 100.00 | ||||||||||||||
LaChute Hydro Company Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | Enel North America Inc. | 100.00 | ||||||||||||||
Lawrence Hydroelectric Associates LP | Boston (Massachusetts - USA) | — | — | 100.00 | Essex Company Crosby Drive Investments Inc. | 92.50 7.50 | ||||||||||||||
Littleville Power Company Inc. | Boston (Massachusetts - USA) | — | — | 100.00 | Hydro Development Group Inc. | 100.00 | ||||||||||||||
Lower Saranac Corporation | New York (New York - USA) | 2 | USD | 100.00 | Twin Saranac Holdings LLC | 100.00 | ||||||||||||||
Lower Saranac Hydro Partners LP | Wilmington (Delaware - USA) | — | — | 100.00 | Twin Saranac Holdings LLC Lower Saranac Corporation | 99.00 1.00 | ||||||||||||||
Mascoma Hydro Corporation | Concord (New Hampshire - USA) | — | — | 100.00 | CHI Acquisitions II Inc. | 100.00 | ||||||||||||||
Metro Wind LLC | Minneapolis (Minnesota - USA) | — | — | 49.00 | CHI Minnesota Wind LLC | 49.00 | ||||||||||||||
Mill Shoals Hydro Company Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | CHI Finance LLC | 100.00 | ||||||||||||||
Minnewawa Hydro Company Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | Enel North America Inc. | 100.00 |
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Currency | ||||||||||||||||||||
Share capital | of | Group % | ||||||||||||||||||
Company name | Registered office | (2) | account | holding(3) | Held by | % | ||||||||||||||
at Dec. 31, 2005 | ||||||||||||||||||||
Missisquoi Associates | Los Angeles (California - USA) | — | — | 100.00 | Sheldon Springs Hydro Associates LP Sheldon Vermont Hydro Company Inc. | 99.00 1.00 | ||||||||||||||
Motherlode Hydro Inc. | Los Angeles (California - USA) | — | — | 100.00 | CHI West Inc. | 100.00 | ||||||||||||||
Newbury Hydro Company | Burlington (Vermont - USA) | — | — | 100.00 | CHI Acquisitions II Inc. Sweetwater Hydroelectric Inc. | 99.00 1.00 | ||||||||||||||
Newind Group Inc. | St. John (Newfoundland - Canada) | 100 | CAD | 100.00 | CHI Canada Inc. | 100.00 | ||||||||||||||
Northwest Hydro Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | CHI West Inc. | 100.00 | ||||||||||||||
Notch Butte Hydro Company Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | CHI Finance LLC | 100.00 | ||||||||||||||
Olympe Inc. | Los Angeles (California - USA) | — | — | 100.00 | CHI West Inc. | 100.00 | ||||||||||||||
Ottauquechee Hydro Company Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | CHI Finance LLC | 100.00 | ||||||||||||||
Pelzer Hydro Company Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | Consolidated Hydro Southeast Inc. | 100.00 | ||||||||||||||
Pyrites Associates | New York (New York - USA) | — | — | 100.00 | Hydro Development Group Inc. CHI Dexter Inc. | 50.00 50.00 | ||||||||||||||
Rock Creek Limited Partnership | Los Angeles (California - USA) | — | — | 100.00 | El Dorado Hydro Olympe Inc. Motherlode Hydro Inc. | 99.00 0.82 0.18 | ||||||||||||||
Ruthton Ridge LLC | Minneapolis (Minnesota - USA) | — | — | 49.00 | CHI Minnesota Wind LLC | 49.00 | ||||||||||||||
SE Hazelton A. LP | Los Angeles (California - USA) | — | — | 100.00 | CHI West Inc. Bypass Power Company | 99.00 1.00 | ||||||||||||||
Sheldon Springs Hydro Associates LP | Wilmington (Delaware - USA) | — | — | 100.00 | Boott Sheldon Holdings LLC Sheldon Vermont Hydro Company Inc. | 99.00 1.00 | ||||||||||||||
Sheldon Vermont Hydro Company Inc. | Wilmington (Delaware - USA) | — | — | 100.00 | Boott Sheldon Holdings LLC | 100.00 | ||||||||||||||
Slate Creek Hydro Associates LP | Los Angeles (California - USA) | — | — | 95.00 | Slate Creek Hydro Company Inc. | 95.00 | ||||||||||||||
Slate Creek Hydro Company Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | CHI Acquisitions II Inc. | 100.00 | ||||||||||||||
Soliloquoy Ridge LLC | Minneapolis (Minnesota - USA) | — | — | 49.00 | CHI Minnesota Wind LLC | 49.00 | ||||||||||||||
Somersworth Hydro Company Inc. | Wilmington (Delaware - USA) | 100 | USD | 100.00 | CHI Universal Inc. | 100.00 | ||||||||||||||
Southwest Transmission LLC | Minneapolis (Minnesota - USA) | — | — | 49.00 | CHI Minnesota Wind LLC | 49.00 | ||||||||||||||
Spartan Hills LLC | Minneapolis (Minnesota - USA) | — | — | 49.00 | CHI Minnesota Wind LLC | 49.00 | ||||||||||||||
St. — Felicien Cogeneration Limited Partnership | Montreal (Québec - Canada) | — | — | 61.50 | CHI S.F. LP Gestion Cogeneration Inc. | 57.50 4.00 | ||||||||||||||
Summit Energy Storage Inc. | Wilmington (Delaware - USA) | 8,200 | USD | 69.32 | Enel North America Inc. | 69.32 | ||||||||||||||
Sun River LLC | Minneapolis (Minnesota - USA) | — | — | 49.00 | CHI Minnesota Wind LLC | 49.00 | ||||||||||||||
Sweetwater Hydroelectric Inc. | Concord (New Hampshire - USA) | 250 | USD | 100.00 | CHI Acquisitions II Inc. | 100.00 | ||||||||||||||
The Great Dam Corporation | Boston (Massachusetts - USA) | 100 | USD | 100.00 | Lawrence Hydroelectric Associates LP | 100.00 | ||||||||||||||
TKO Power Inc. | Los Angeles (California - USA) | — | — | 100.00 | CHI West Inc. | 100.00 | ||||||||||||||
Triton Power Company | New York (New York - USA) | — | — | 100.00 | Highfalls Hydro Company Inc. CHI Highfalls Inc. | 98.00 2.00 | ||||||||||||||
Tsar Nicholas LLC | Minneapolis (Minnesota - USA) | — | — | 49.00 | CHI Minnesota Wind LLC | 49.00 | ||||||||||||||
Twin Falls Hydro Associates LP | Seattle (Washington - USA) | — | — | 99.51 | Twin Saranac Holdings LLC Twin Falls Hydro Company Inc. | 99.00 0.51 | ||||||||||||||
Twin Falls Hydro Company Inc. | Wilmington (Delaware - USA) | 10 | USD | 100.00 | Twin Saranac Holdings LLC | 100.00 | ||||||||||||||
Twin Lake Hills LLC | Minneapolis (Minnesota - USA) | — | — | 49.00 | CHI Minnesota Wind LLC | 49.00 | ||||||||||||||
Twin Saranac Holdings LLC | Wilmington (Delaware - USA) | — | — | 100.00 | Enel North America Inc. | 100.00 | ||||||||||||||
Western New York Wind Corporation | New York (New York - USA) | 300 | USD | 100.00 | Enel North America Inc. | 100.00 | ||||||||||||||
Willimantic Power Corporation | Hartford (Connecticut - USA) | — | — | 100.00 | CHI Acquisitions Inc. | 100.00 | ||||||||||||||
Winter’s Spawn LLC | Minneapolis (Minnesota - USA) | — | — | 49.00 | CHI Minnesota Wind LLC | 49.00 |
(1) | All the companies are engaged in electricity generation from renewable resources. | |
(2) | In many cases, the subsidiaries are formed as entities that do not require the payment of share capital. | |
(3) | For companies in which the holding is less than 50% Enel North America Inc. holds preference shares that enable it to determine the financial and operational policies of the company and therefore to exercise a dominant influence. |
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Currency | |||||||||||||||||||||
of | Group % | ||||||||||||||||||||
Company name | Registered office | Share capital(2) | account | holding(3) | Held by | % | |||||||||||||||
at Dec. 31, 2005 | |||||||||||||||||||||
Parent Company: | |||||||||||||||||||||
Enel Latin America LLC | Wilmington (Delaware - USA) | — | — | 100.00 | Enel Green Power International SA | 100.00 | |||||||||||||||
Subsidiaries: | |||||||||||||||||||||
Agricola Rio Sahuil Ltda | Santiago (Chile) | 200,000,000 | CLP | 99.90 | Agricola Y Constructora Rio Guanehue SA | 99.90 | |||||||||||||||
Agricola Y Constructora Rio Guanehue SA | Santiago (Chile) | — | — | 100.00 | Empresa Electrica Panguipulli SA Enel Chile Ltda(formerly Energia de Los Lagos Ltda) | 99.93 0.07 | |||||||||||||||
Central American Power Services Inc. | Wilmington (Delaware - USA) | 1 | USD | 100.00 | Enel Latin America LLC | 100.00 | |||||||||||||||
Conexion Energetica Centroamericana El Salvador SA | San Salvador (El Salvador) | 1,693,100 | SVC | 100.00 | Grupo EGI SA de cv Enel Latin America LLC | 99.99 0.01 | |||||||||||||||
Constructora Cerro Pitren Ltda | Santiago (Chile) | 200,000,000 | CLP | 99.90 | Agricola Y Constructora Rio Guanehue SA | 99.90 | |||||||||||||||
EGI Costa Rica Viento SA | Santa Ana (Costa Rica) | 100,000 | CRC | 100.00 | Energia Global de Costa Rica SA | 100.00 | |||||||||||||||
Electrificadora Ecologica SA | Santa Ana (Costa Rica) | 1,200,000 | CRC | 100.00 | ZMZ General SA | 100.00 | |||||||||||||||
Empresa Electrica Panguipulli SA | Santiago (Chile) | — | — | 100.00 | Enel Chile Ltda(formerly Energia de Los Lagos Ltda) Energia Alerce Ltda | 99.99 0.01 | |||||||||||||||
Empresa Electrica Puyehue SA | Santiago (Chile) | 11,169,752,000 | CLP | 100.00 | Enel Chile Ltda(formerly Energia de Los Lagos Ltda) Energia Alerce Ltda | 99.90 0.10 | |||||||||||||||
Empresa Nacional de Geotermia SA | Santiago (Chile) | — | — | 51.00 | Enel Chile Ltda(formerly Energia de Los Lagos Ltda) | 51.00 | |||||||||||||||
Enel Chile Ltda(formerly Energia de Los Lagos Ltda) | Santiago (Chile) | 15,414,240,752 | CLP | 100.00 | Energia Alerce Ltda Enel Latin America LLC | 99.99 0.01 | |||||||||||||||
Enel Guatemala SA(formerly Conexion Energetica Centroamericana SA) | Guatemala | 5,000 | GTQ | 100.00 | Enel Latin America LLC Enel Green Power International SA | 98.00 2.00 | |||||||||||||||
Energia Alerce Ltda | Santiago (Chile) | 1,000,000 | CLP | 100.00 | Enel Latin America LLC Enel Green Power International SA | 99.90 0.10 | |||||||||||||||
Energia Global SA de cv | Andover (Massachusetts - USA) | 50,000 | MXN | 99.00 | Enel Latin America LLC | 99.00 | |||||||||||||||
Energia Global de Costa Rica SA | Santa Ana (Costa Rica) | 100,000 | CRC | 100.00 | Enel Latin America LLC | 100.00 | |||||||||||||||
Energia Global Operaciones SA | Santa Ana (Costa Rica) | 10,000 | CRC | 100.00 | Energia Global de Costa Rica SA | 100.00 | |||||||||||||||
Generadora de Occidente Ltda | Guatemala | 5,000 | GTQ | 100.00 | Enel Latin America LLC Enel Guatemala SA(formerly Conexion Energetica Centroamericana SA) | 99.00 1.00 | |||||||||||||||
Generadora Montecristo SA | Guatemala | 5,000 | GTQ | 100.00 | Enel Latin America LLC Enel Guatemala SA(formerly Conexion Energetica Centroamericana SA) | 99.00 1.00 | |||||||||||||||
Grupo EGI SA de cv | San Salvador (El Salvador) | 200,000 | SVC | 100.00 | Enel Latin America LLC Enel Green Power International SA | 99.95 0.05 | |||||||||||||||
Molinos de Viento del Arenal SA | Santa Ana (Costa Rica) | 9,709,200 | USD | 49.00 | Electrificadora Ecologica SA | 49.00 | |||||||||||||||
Operacion Y Mantenimiento Tierras Morenas SA | Santa Ana (Costa Rica) | 30,000 | CRC | 85.00 | Electrificadora Ecologica SA | 85.00 | |||||||||||||||
P.H. Don Pedro SA | Santa Ana (Costa Rica) | 100,001 | CRC | 32.86 | Energia Global de Costa Rica SA | 32.86 | |||||||||||||||
P.H.Guacimo SA | Santa Ana (Costa Rica) | 50,000 | CRC | 40.00 | Enel Latin America LLC Energia Global de Costa Rica SA | 30.00 10.00 | |||||||||||||||
P.H. Rio Volcan SA | Santa Ana (Costa Rica) | 100,001 | CRC | 44.84 | Energia Global de Costa Rica SA | 44.84 | |||||||||||||||
Tecnoguat SA | Guatemala | 1,000,000 | GTQ | 75.00 | Enel Latin America LLC | 75.00 | |||||||||||||||
ZMZ General SA | Santa Ana (Costa Rica) | 500,000 | CRC | 51.00 | EGI Costa Rica Viento SA | 51.00 |
(1) | All the companies are engaged in electricity generation from renewable resources. | |
(2) | In many cases, the subsidiaries are formed as entities that do not require the payment of share capital. | |
(3) | For companies in which the holding is less than 50% Enel Latin America LLC holds preference shares that enable it to determine the financial and operational policies of the company and therefore to exercise a dominant influence. |
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Currency | ||||||||||||||||||||||
of | Group % | |||||||||||||||||||||
Company name | Registered office | Activity | Share capital | account | holding | Held by | % | |||||||||||||||
at Dec. 31, 2005 | ||||||||||||||||||||||
Aridos Energias Especiales SL | Villabilla (Spain) | Electricity generation from renewable resources | 600,000 | euro | 41.05 | Enel Union Fenosa Renovables SA | 41.05 | |||||||||||||||
Azucarera Energias SA | Madrid (Spain) | Electricity generation from renewable resources | 570,600 | euro | 40.00 | Enel Union Fenosa Renovables SA | 40.00 | |||||||||||||||
Boiro Energia SA | Boiro (Spain) | Electricity generation from renewable resources | 601,010 | euro | 40.00 | Enel Union Fenosa Renovables SA | 40.00 | |||||||||||||||
Cogeneracion del Noroeste SL | Santiago de Compostela (Spain) | Electricity generation from renewable resources | 3,606,000 | euro | 40.00 | Enel Union Fenosa Renovables SA | 40.00 | |||||||||||||||
Depuracion Destilacion Reciclaje SL | Boiro (Spain) | Electricity generation from renewable resources | 600,000 | euro | 40.00 | Enel Union Fenosa Renovables SA | 40.00 | |||||||||||||||
Energias Especiales Alcoholeras SA | Madrid (Spain) | Electricity generation from renewable resources | 82,000 | euro | 50.00 | Enel Union Fenosa Renovables SA | 50.00 | |||||||||||||||
Energias Especiales del Bierzo SA | Torre del Bierzo (Spain) | Electricity generation from renewable resources | 1,635,000 | euro | 50.00 | Enel Union Fenosa Renovables SA | 50.00 | |||||||||||||||
Gallega de Cogeneracion SA | Santiago de Compostela (Spain) | Electricity generation from renewable resources | 1,803,000 | euro | 40.00 | Enel Union Fenosa Renovables SA | 40.00 | |||||||||||||||
Parque Eolico de Barbanza SA | Santiago de Compostela (Spain) | Electricity generation from renewable resources | 3,606,000 | euro | 25.00 | Enel Union Fenosa Renovables SA | 25.00 | |||||||||||||||
Parque Eolico de Malpica SA | La Coruna (Spain) | Electricity generation from renewable resources | 950,057.50 | euro | 30.16 | Enel Union Fenosa Renovables SA | 30.16 | |||||||||||||||
Parque Eolico Montes de las Navas SA | Madrid (Spain) | Electricity generation from renewable resources | 6,540,000 | euro | 20.00 | Enel Union Fenosa Renovables SA | 20.00 | |||||||||||||||
Ufefys SL | Aranjuez (Spain) | Electricity generation from renewable resources | 2,373,950 | euro | 40.00 | Enel Union Fenosa Renovables SA | 40.00 |
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Currency | |||||||||||||||||||||||
of | Group % | ||||||||||||||||||||||
Company name | Registered office | Activity | Share capital | account | holding | Held by | % | ||||||||||||||||
at Dec. 31, 2005 | |||||||||||||||||||||||
Aes Distribuidores Salvadorenos Y Compania S. en C. de cv | San Salvador (El Salvador) | Electricity generation from renewable resources | 200,000 | SVC | 20.00 | Grupo EGI SA de cv | 20.00 | ||||||||||||||||
Aes Distribuidores Salvadorenos Ltda de cv | San Salvador (El Salvador) | Electricity generation from renewable resources | 200,000 | SVC | 20.00 | Grupo EGI SA de cv | 20.00 | ||||||||||||||||
Alpe Adria Energia SpA | Udine | Engineering, construction and management of engineering power lines | 120,000 | euro | 45.00 | Enel Produzione SpA | 45.00 | ||||||||||||||||
CESI — Centro Elettrotecnico Sperimentale Italiano Giacinto Motta SpA | Milan | Research and testing | 8,550,000 | euro | 25.92 | Enel SpA | 25.92 | ||||||||||||||||
Compagnia Porto di Civitavecchia SpA | Civitavecchia (Rome) | Harbor construction | 516,000 | euro | 25.00 | Enel Produzione SpA | 25.00 | ||||||||||||||||
Eneco Energia Ecologica Srl | Predazzo (Trento) | Area heating networks | 1,239,510 | euro | 49.02 | Avisio Energia SpA | 49.02 | ||||||||||||||||
Energias Ambientales de Somozas SA | La Coruna (Spain) | Electricity generation from renewable resources | 1,250,000 | euro | 19.40 | Enel Union Fenosa Renovables SA | 19.40 | ||||||||||||||||
Energias Ambientales EASA SA | La Coruna (Spain) | Electricity generation from renewable resources | 15,491,460 | euro | 30.00 | Enel Union Fenosa Renovables SA | 30.00 | ||||||||||||||||
Enerlasa SA | Madrid (Spain) | Electricity generation from renewable resources | 1,021,700 | euro | 45.00 | Enel Union Fenosa Renovables SA | 45.00 | ||||||||||||||||
Gesam SpA | Lucca | Gas distribution | 28,546,672 | euro | 40.00 | Enel Rete Gas SpA | 40.00 | ||||||||||||||||
Hipotecaria de Santa Ana Ltda de cv | San Salvador (El Salvador) | Electricity generation from renewable resources | 100,000 | SVC | 20.00 | Grupo EGI SA de cv | 20.00 | ||||||||||||||||
Idrosicilia SpA | Palermo | Water sector | 22,520,000 | euro | 40.00 | Enel SpA | 40.00 | ||||||||||||||||
O&M Cogeneration Inc. | Montreal (Quebèc – Canada) | Electricity generation from renewable resources | 15 | CAD | 33.33 | Hydrodev Inc. | 33.33 | ||||||||||||||||
Promociones Energeticas del Bierzo SL | Ponferrada (Spain) | Electricity generation from renewable resources | 12,020 | euro | 50.00 | Enel Union Fenosa Renovables SA | 50.00 | ||||||||||||||||
SIET — Società Informazioni Esperienze Termoidrauliche SpA | Piacenza | Studies, design and research in thermal generation | 1,128,648 | euro | 41.55 | Enel.NewHydro Srl | 41.55 | ||||||||||||||||
Sotavento Galicia SA | Santiago de Compostela (Spain) | Electricity generation from renewable resources | 601,000 | euro | 18.00 | Enel Union Fenosa Renovables SA | 18.00 | ||||||||||||||||
Star Lake Hydro Partnership | St. John (Newfoundland – Canada) | Electricity generation from renewable resources | — | — | 49.00 | CHI Hydroelectric Company Inc. | 49.00 | ||||||||||||||||
Tirmadrid SA | Valdemingomez (Spain) | Electricity generation from renewable resources | 16,828,000 | euro | 18.64 | Enel Union Fenosa Renovables SA | 18.64 | ||||||||||||||||
WIND Telecomunicazioni SpA | Rome | Telecommunications | 147,100,000 | euro | 37.25 | Enel SpA | 37.25 |
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Currency | |||||||||||||||||||||||
of | Group % | ||||||||||||||||||||||
Company name | Registered office | Activity | Share capital | account | holding | Held by | % | ||||||||||||||||
at Dec. 31, 2005 | |||||||||||||||||||||||
Centro Energia Viterbo SpA | Viterbo | Research in the field of renewable resources | 260,000 | euro | 14.00 | Enel Rete Gas SpA | 14.00 | ||||||||||||||||
CO.FA.S.E. Srl | Canazei (Trento) | Cogeneration of electrical and thermal energy | 25,500 | euro | 14.00 | Avisio Energia SpA | 14.00 | ||||||||||||||||
Exstream Solutions Inc. | Cambridge (Massachusetts -USA) | Transmission of multimedia content and development of distance learning platforms | 11,940.79 | USD | 15.09 | Enel Investment Holding BV | 15.09 | ||||||||||||||||
GALSI SpA | Milan | Engineering in energy and infrastructure sector | 3,850,000 | euro | 13.50 | Enel Produzione SpA | 13.50 | ||||||||||||||||
International Multimedia University Srl | Rome | Distance learning | 24,000 | euro | 13.04 | Sfera Srl | 13.04 | ||||||||||||||||
LaGeo SA de cv | Ahuachapan (El Salvador) | Electricity generation from renewable resources | 1,868,695,400 | SVC | 12.50 | Enel Produzione SpA | 12.50 |
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Currency | |||||||||||||||||||||||
of | Group % | ||||||||||||||||||||||
Company name | Registered office | Activity | Share capital | account | holding | Held by | % | ||||||||||||||||
at Dec. 31, 2005 | |||||||||||||||||||||||
Central Parks Srl (in liquidation) | Rome | — | 63,991 | euro | 40.00 | Enel.NewHydro Srl | 40.00 | ||||||||||||||||
Climare Scrl (in liquidation) | Genoa | — | 30,600 | euro | 66.66 | Enel Distribuzione SpA | 66.66 | ||||||||||||||||
Enel Green Power Hellas SA (in liquidation) | Athens (Greece) | — | 58,700 | euro | 100.00 | Enel Produzione SpA | 100.00 | ||||||||||||||||
Enelco SA | Athens (Greece) | Power plant construction, management and maintenance | 587,000 | euro | 50.00 | Enelpower SpA | 50.00 | ||||||||||||||||
Euromedia Luxembourg One SA (in liquidation) | Luxembourg | — | 44,887,500 | USD | 28.57 | Enel Investment Holding BV | 28.57 | ||||||||||||||||
Hydrodev Limited Partnership | Montreal (Québec - Canada ) | Electricity generation from renewable resources | — | — | 49.00 | CHI Canada Inc. Hydrodev Inc. | 48.90 0.10 | ||||||||||||||||
Pragma Energy Services Ltd (in liquidation) | London (United Kingdom) | — | 2 | GBP | 100.00 | Pragma Energy SA | 100.00 | ||||||||||||||||
Q-Channel SpA (in liquidation) | Rome | — | 1,607,141 | euro | 24.00 | Enel Ape Srl(formerly Ape Gruppo Enel Srl) | 24.00 | ||||||||||||||||
So.l.e. Milano H Scrl (in liquidation) | Rome | — | 10,000 | euro | 70.00 | Enel Sole Srl | 70.00 | ||||||||||||||||
Teggs SpA (in liquidation) | Milan | — | 100,000 | euro | 40.00 | Enel Investment Holding BV | 40.00 |
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§ | represents a significant independent business or geographical area in which the business operates; |
§ | is part of a larger plan for the disposal of an autonomous business unit or a geographical area of operations; |
§ | is a subsidiary acquired exclusively to be resold. |
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Enel Società per Azioni | ||||||
By: | /s/ Avv. Claudio Sartorelli | |||||
Name: Avv. Claudio Sartorelli | ||||||
Title: Secretary of Enel Società per Azioni |