Annual Report 2014
enel.com
Annual Report 2014
Contents
Report on operations
Reports
Report of the Board of Auditors to the Shareholders' Meeting of
Enel SpA | 360
Report of the independent audit firm on the 2014 financial
statements of Enel SpA | 368
Report of the independent audit firm on the 2014 consolidated
financial statements of the Enel Group | 372
Summary of the resolutions of the Ordinary and Extraordinary
Shareholders’ Meeting | 376
Attachments
Subsidiaries, associates and other significant equity investments
of the Enel Group at December 31, 2014 | 380
Report on Corporate Governance and Ownership Structure | 418
Enel organizational model | 6
Corporate Boards | 9
Letter to shareholders and other stakeholders | 11
Summary of results | 14
Overview of the Group’s operations, performance
and financial position | 23
Results by business area | 34
Performance and financial position of Enel SpA | 58
Significant events in 2014 | 63
Reference scenario | 74
Main risks and uncertainties | 102
Outlook | 107
Other information | 108
Sustainability | 111
Related parties | 132
Reconciliation of shareholders’ equity and net income of Enel SpA
and the corresponding consolidated figures | 133
Consolidated financial statements
Consolidated financial statements | 136
Notes to the consolidated financial statements | 143
Declaration of the Chief Executive Officer and the
officer responsible for the preparation of corpora-
te financial reports | 286
Separate financial statements of Enel SpA
Separate financial statements | 290
Notes to the financial statements | 297
Declaration of the Chief Executive Officer and the
officer responsible for the preparation of corpora-
te financial reports | 356
3
4
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Report
on operations
Enel organizational model
On July 31, 2014, the Enel Group adopted a new organizational structure, based on a matrix of divisions and
geographical areas, focused on the industrial objectives of the Group, with clear specification of roles and
responsibilities in order to:
> pursue and maintain technological leadership in the sectors in which the Group operates, ensuring ope-
rational excellence;
> maximize the level of service offered to customers in local markets.
Thanks to this organization, the Group can benefit from reduced complexity in the execution of manage-
ment actions and the analysis of key factors in value creation.
DIVISIONS
Global
Infrastructure
& Networks
Global
Generation
Renewable
Energy
Global
Trading
Upstream
Gas
Italy
Iberia
Latin
America
Eastern
Europe
REGIONS/
COUNTRIES
KPI:
Revenues
Operating expenses (staff/services)
Cash flow
•
•
•
KPI:
• Optimization of investments
• Best practice sharing and
efficiency gains
More specifically, the new Enel Group structure is organized into:
> Divisions (Global Infrastructure and Networks, Global Generation, Global Trading, Renewable Energy, and
Upstream Gas), which are responsible for managing and developing assets, optimizing their performance
and the return on capital employed in the various geographical areas in which the Group operates. The
Divisions are also tasked with improving the efficiency of the processes they manage and sharing best
practices at the global level. The Group can benefit from a centralized industrial vision of projects in the
various business areas. Each project will be assessed not only on the basis of its financial return, but also
on the basis of the best technologies available at the Group level;
> Regions and countries (Italy, Iberia, Latin America, Eastern Europe), which are responsible for managing
relationships with institutional bodies and regulatory authorities, as well as selling electricity and gas, in
each of the countries in which the Group is present, while also providing staff and other service support
to the Divisions;
> Global service functions (Procurement and ICT), which are responsible for managing information and com-
munication technology activities and procurement at the Group level;
> Holding company functions (Administration, Finance and Control, Human Resources and Organization,
Communication, Legal and Corporate Affairs, Audit, European Union Affairs, and Innovation and Sustai-
nability), which are responsible for managing governance processes at the Group level.
6
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS The new organization will modify the reporting structure, the analysis of the Group’s performance and fi-
nancial position and, accordingly, the representation of consolidated results only from the start of 2015.
Consequently, in this Annual Report 2014, in line with practice in previous periods, the results by business
area are discussed using the previous organizational structure, taking account of the provisions of IFRS 8
concerning the “management approach”.
More specifically, the previous operational model, adopted in early 2012, provided for the organization of
the Group on the basis of:
> Holding company functions, which are responsible for directing and controlling strategic activities for the
entire Group;
> Global service functions, which are responsible for providing services to the Group, maximizing synergies
and economies of scale;
> Business lines, represented by six Divisions, as well as the Upstream Gas function (which pursued selective
vertical integration to increase the competitiveness, security and flexibility of strategic sourcing to meet
Enel’s gas requirements) and the Carbon Strategy function (which operated in the world’s CO2 certificate
markets).
The activities of the individual Divisions are set out below.
The Generation, Energy Management and Sales Italy Division is responsible for:
> the generation and sale of electricity:
- generation from thermal and schedulable hydroelectric power plants in Italy (through Enel Produzione
and other smaller companies);
- trading on international and Italian markets, primarily through Enel Trade;
> provisioning for all of the Group’s needs and the sale of energy products, including the sale of natural gas
to distributors, through Enel Trade;
> the development of natural gas regasification (Nuove Energie);
> commercial activities in Italy, with the objective of developing an integrated package of electricity and gas
products and services for end users. More specifically, it is responsible for the sale of electricity on the re-
gulated market (Enel Servizio Elettrico) and the sale of electricity on the free market and the sale of natural
gas to end users (Enel Energia). As from July 1, 2013, these activities have been expanded to include retail
plant and franchising operations in Italy following the acquisition of Enel.si from the Renewable Energy
Division.
The Infrastructure and Networks Division is primarily responsible for the distribution of electricity (Enel
Distribuzione) and public and artistic lighting (Enel Sole) in Italy.
The Iberia and Latin America Division focuses on developing Enel Group’s presence and coordinating its
operations in the electricity and gas markets of Spain, Portugal and Latin America. The geographical areas in
which it operates are as follows:
> Europe, with the generation, distribution and sale of electricity and the sale of natural gas in Spain and
Portugal;
> Latin America, with the generation, distribution and sale of electricity in Chile, Brazil, Peru, Argentina and
Colombia.
The International Division supports the Group’s strategies for international growth, as well as managing
and integrating the foreign businesses outside the Iberian and Latin American markets, monitoring and de-
veloping business opportunities that should present themselves on the electricity and fuel markets. The chief
7
geographical areas of operation for this Division are:
> central Europe, where the Division is active in power generation in Slovakia and Belgium (Slovenské
elektrárne and Marcinelle Energie) and electricity sales in France (Enel France);
> south-eastern Europe, mainly with the development of generation capacity (Enel Productie) and electrici-
ty distribution and sales in Romania (Enel Distributie Banat, Enel Distributie Dobrogea, Enel Energie, Enel
Distributie Muntenia and Enel Energie Muntenia);
> Russia, with power generation and electricity sales activities (Enel Russia OJSC).
The Renewable Energy Division has the mission of developing and managing operations for the genera-
tion of electricity from renewable resources, ensuring their integration within the Group in line with the Enel
Group’s strategies. The geographical areas of operation for this Division, which in 2014 were modified with
regard to operations in the Iberian peninsula, are:
> Europe, with power generation from non-schedulable hydroelectric plants, as well as geothermal, wind
and solar plants in Italy (Enel Green Power and other minor companies), Greece (Enel Green Power Hellas),
France (Enel Green Power France), Romania (Enel Green Power Romania), Bulgaria (Enel Green Power Bul-
garia) and Spain and Portugal (Enel Green Power España);
> Latin America, with power generation from renewable sources (various companies);
> North America, with power generation from renewable sources (Enel Green Power North America).
The mission of the Engineering and Research Division (formerly Engineering and Innovation) is to serve the
Group by managing the engineering processes related to the development and construction of power plants
(conventional and nuclear), while meeting the quality, temporal and financial objectives set for it. In addition,
it is responsible for coordinating nuclear technology operations, providing independent monitoring of the
Group’s nuclear activities with regard to safety issues. Finally, it manages research activities identified in the
process of managing innovation, with a focus on strategic research and technology scouting.
Finally, on the basis of the criteria set out by IFRS 8, the generation and energy management results of the
Generation, Energy Management and Sales Italy Division are shown separately from the results pertaining to
electricity sales in Italy, consistent with the structure of internal reporting to top management. In addition,
account was also taken of the possibilities for the simplification of disclosures associated with the materia-
lity thresholds also established under IFRS 8 and, therefore, the item “Other, eliminations and adjustments”
includes not only the effects from the elimination of intersegment transactions, but also the figures for the
Parent Company, Enel SpA, the Services and Other Activities area and the Engineering and Research Division,
as well as the Upstream Gas function.
8
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Corporate Boards
Board of Directors
Chairman
Chief Executive
Directors
Secretary
Patrizia Grieco
Manager
Officer and General
Francesco Starace
Claudio Sartorelli
Alessandro Banchi
Alberto Bianchi
Paola Girdinio
Alberto Pera
Anna Chiara Svelto
Angelo Taraborrelli
Board of Auditors
Chairman
Auditors
Alternate auditors
Sergio Duca
Lidia D’Alessio
Gennaro Mariconda
Giulia De Martino
Pierpaolo Singer
Franco Luciano Tutino
Independent auditors
Reconta
Ernst & Young SpA
9
Powers
Board of Directors
The Board is vested by the bylaws with the broadest powers for the ordinary and extraordinary management
of the Company, and specifically has the power to carry out all the actions it deems advisable to implement
and attain the corporate purpose.
Chairman of the Board of Directors
The Chairman is vested by the bylaws with the powers to represent the Company and to sign on its behalf,
presides over Shareholders’ Meetings, convenes and presides over the Board of Directors, and ascertains
that the Board’s resolutions are carried out. Pursuant to a Board resolution of May 23, 2014, the Chairman
has been vested with a number of additional non-executive powers.
Chief Executive Officer
The Chief Executive Officer is also vested by the bylaws with the powers to represent the Company and to
sign on its behalf, and in addition is vested by a Board resolution of May 23, 2014 with all powers for mana-
ging the Company, with the exception of those that are otherwise assigned by law or the bylaws or that the
aforesaid resolution reserves for the Board of Directors.
10
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Letter to shareholders
and other stakeholders
Dear shareholders and stakeholders,
the year 2014 was one of great change for the Enel Group. We launched a series of strategic and managerial
initiatives to rise to the challenges of an increasingly dynamic and complex environment. In the 1st Half of
the year, we focused on the buyout of minority shareholders in Latin America and the launch of the disposal
of assets in Eastern Europe. In the 2nd Half, after the appointment of the new Board of Directors and top
management, we launched the new organizational structure, a key element in enhancing our efficiency and
accelerating our refocusing.
In line with the reorganization effort, we undertook a corporate restructuring by separating Endesa from the
Enersis subsidiary, which is in charge of operations in five Latin American countries. Finally, we sold a stake of
about 22% of Endesa, increasing its liquidity on the market.
Thanks to these steps we brought debt to our target level, and we can now turn to face the new challenges
of the coming years.
The macroeconomic environment
The global macroeconomic environment in the past year has been marked by uneven, halting economic
performance. Among the mature markets, the United States has established itself as the locomotive of
global growth, while Europe has once again demonstrated the difficulties it is facing in sparking a real and
lasting recovery. The emerging markets showed the first signs of a slowdown, while maintaining relatively
strong levels of growth. The fall in oil prices, the depreciation of the euro as a result of both the expectations
of rising interest rates in the US and the quantitative easing in the euro area, the violent Russian currency
crisis and tensions in Ukraine all had a major impact last year. In the coming months, some of these factors
will help foster a revival of growth of the European economies, such as Italy and Spain, where the Enel
Group is present, stimulating household consumption through increased access to credit and increasing
current levels of industrial production. The expected economic recovery will then generate a rise in elec-
11
tricity consumption from the trough reached this year, albeit partially contained by the development of
energy efficiency. The countries of Latin America, after a decade of strong expansion, showed some signs
of slowing down. The decrease in the pace of growth in world trade, the fall in commodity prices and the
excessive volatility of certain currencies have all impacted current economic performance, but have not
diverted the medium-term trend in development, which remains based on fundamentals such as high rates
of population growth, increasing consumption and spreading urbanization, all of which will lead to strong
growth in demand for electricity and gas.
Management initiatives
Despite such a complex environment, the Group managed to achieve the objectives announced to the mar-
ket thanks to the soundness of its strategy, the technological leadership developed over the years and the
swift implementation of management initiatives in 2014. The buyback of non-controlling interests in Latin
America enabled Enersis, the Enel company heading Group operations in South America, to increase its
stake in the capital of a number of companies in which it already held a significant interest, such as Coelce,
Edegel and Gas Atacama. These transactions are part of a broader plan for reorganization and corporate
restructuring in Latin America, in which we have decided to separate our activities in the Iberian peninsula
from those in Latin America, enabling Enersis to report directly to Enel SpA and simultaneously increasing
our stake in that Chilean company by about 5%. As part of the process of reducing our debt, we continued
to implement the disposal program, previously announced to investors. In particular, the public offering of
21.92% of Endesa, carried out after the separation from Enersis, and other smaller operations enabled us to
achieve our targets.
Last but not least, the Group reorganization, which saw the creation of five global business lines (Infrastruc-
ture and Networks, Generation, Renewable Energy, Trading and Upstream Gas), which are responsible for
the allocation of investments in their respective areas and the sharing of best practices at the Group level,
and four geographical areas (Italy, Iberia, Latin America and Eastern Europe), whose primary task is to su-
stain revenue and the generation of cash flow.
This new and more responsive structure has also simplified and streamlined the units of the Parent Com-
pany, which enters 2015 with a more simple and agile form.
Performance in 2014
Revenue in 2014 totaled €75.8 billion, down 3.7% compared with €78.7 billion in 2013, mainly due to the
reduction in revenue from electricity sales, itself a consequence of a decline in quantities sold, compounded
by the adverse impact of developments in the exchange rates of the currencies of some of the countries
in which the Group operates (particularly in Latin America and Russia). EBITDA amounted to €15.7 billion,
down 5.6% from €16.7 billion in 2013, mainly due to the different contribution of disposals to performance
in the two years. Excluding these items, EBITDA amounted to €15.5 billion (€15.8 billion in 2013), a reduction
of 1.9%, essentially due to changes in exchange rates. This factor was partially offset by the improvement
in the margin on electricity sales on the Italian market. Net financial debt at the end of 2014 amounted to
€37.4 billion (excluding €0.6 billion regarding net assets classified as “held for sale”), a decrease of €2.3
billion from €39.7 billion at the end of 2013. The decline reflects the positive effects of ordinary operations,
which were particularly significant in the 4th Quarter of the year, as well as cash flow generated by extraor-
dinary transactions. These positive effects were partially offset by the cash requirements of the payment of
dividends and investments for the period, as well as exchange rate losses (€1.1 billion), primarily in respect
of medium- and long-term debt denominated in currencies other than the euro.
12
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Future strategy and forecasts for 2015
In order to compete effectively in the macroeconomic environment of today and tomorrow and, at the same
time, seize new business opportunities in the energy industry, the Enel Group is shifting to a new industrial
strategy based on four key pillars: i) achieving high levels of operating efficiency through the optimal mana-
gement of the costs and maintenance capex of our assets; ii) reviving the Group’s “industrial” growth with
a sharp increase in growth capex; iii) actively managing our portfolio with a view to creating value; and iv)
the Group’s new dividend policy. The Enel Group’s new business plan therefore sets out the priorities and
action plans necessary to pursue these objectives. In order to boost operating efficiency, we will leverage
our new Global Business Lines in order to share internal best practices for optimizing operating expenses
and managing assets efficiently. The new path to industrial growth will be sustained by major investment
in promising markets and businesses, beginning with renewables, by expanding our positioning in areas
where we are already operating, such as in Latin America, and entering new countries, partly with a view
to subsequently positioning ourselves in other businesses. Other growth areas will include new smart di-
stribution grids and expanding our range of value-added products and services in retail markets. The active
management of our portfolio will be targeted at the disposal of non-strategic assets and subsequent rein-
vestment of the proceeds in order to create value and rationalize the Group structure. Finally, the introduc-
tion of a new dividend policy is designed to lend certainty to the pay-out in the near term, with the potential
for significant growth in the medium to long term.
The Group has a unique presence in the world utilities market, thanks both to its size, its technological
diversification, its presence along the entire value chain and its geographical diversification. Our new orga-
nizational structure gives management a tool to leverage these characteristics to create even more value in
a rapidly evolving global environment.
The Chairman of the Board of Directors
The Chief Executive Officer
Patrizia Grieco
Francesco Starace
13
Summary of results
Electricity
sold (TWh)
261.0
Electricity
transported (TWh)
Net electricity
generation (TWh)
Net electricity
generation by source (TWh)
395.4
283.1
283.1
Abroad
173.4
Abroad
173.6
Abroad
211.3
Gas sales
(billions of m3)
7.8
Abroad
4.3
Italy
3.5
Capital expenditure
by business area (millions of euro)
6,701
Italy
87.6
Italy
221.8
Italy
71.8
94.9
Renewables
34%
Coal
29%
Nuclear
14%
combined
gas turbine
Oil and
10%
Gas
cycle
13%
Net electricity generation
by renewable resource (TWh)
Hydroelectric
78%
Employees
by business area
68,961
Wind
15%
Geothermal
Biomass
6%
and solar 1%
International
936
Iberia and
Latin America
2,602
Sales
111
Generation
and Energy
Management
285
Infrastructure
and Networks
996
Renewable
Energy
1,658
Other,
eliminations
and adjustments
113
International
Iberia and
10,403
Latin America
Sales
3,633
22,801
Generation
and Energy
Infrastructure
and Networks
Management
17,398
Renewable
Other,
Energy
3,609
eliminations
and adjustments
5,314
5,803
Performance data 2014 (millions of euro)
(as compared with 2013 restated)
Employees
by geographical area
Revenue
75,791
-3.7%
Gross operating margin
15,757
-5.6%
Operating income
3,087
-68.3%
Net income
772
Iberian peninsula
16%
19%
4%
Russia
48%
13%
Latin America
Italy
Other countries
Electricity
sold (TWh)
261.0
Electricity
Net electricity
transported (TWh)
generation (TWh)
Net electricity
generation by source (TWh)
395.4
283.1
283.1
Abroad
173.4
Abroad
173.6
Abroad
211.3
Italy
87.6
Italy
221.8
Renewables
34%
Coal
29%
Nuclear
14%
Gas
combined
cycle
13%
Oil and
gas turbine
10%
Net electricity generation
by renewable resource (TWh)
Italy
71.8
94.9
Hydroelectric
78%
Employees
by business area
68,961
Wind
15%
Geothermal
6%
Biomass
and solar 1%
Gas sales
(billions of m3)
7.8
Abroad
4.3
Italy
3.5
Capital expenditure
by business area (millions of euro)
6,701
International
Iberia and
936
Latin America
Sales
111
2,602
Generation
and Energy
Infrastructure
and Networks
Management
996
Renewable
Other,
Energy
1,658
eliminations
and adjustments
285
113
International
10,403
Iberia and
Latin America
22,801
Sales
3,633
Generation
and Energy
Management
5,314
Infrastructure
and Networks
17,398
Renewable
Energy
3,609
Other,
eliminations
and adjustments
5,803
Performance data 2014 (millions of euro)
(as compared with 2013 restated)
Employees
by geographical area
Revenue
75,791
-3.7%
Gross operating margin
Operating income
Net income
15,757
-5.6%
3,087
-68.3%
772
16%
Iberian peninsula
4%
Russia
Latin America
Italy
Other countries
19%
48%
13%
Performance data
Revenue
Revenue in 2014 amounted to €75,791 million, a decrease
of €2,872 million (-3.7%) on 2013. The decline is essential-
ly attributable to the decrease in revenue from the sale of
electricity, largely due to a fall in amounts sold, the adverse
impact of changes in the exchange rates of the currencies
of a number of the countries in which the Group operates
against the euro, and the smaller contribution to perfor-
mance of disposal of strategic equity interests. These factors
were only partly offset by an increase in revenue from the
Millions of euro
-3.7%
75,791
78,663
2014
2013 restated
sale of fuels.
Millions of euro
Sales
Generation and Energy Management
Infrastructure and Networks
Iberia and Latin America
International
Renewable Energy
Other, eliminations and adjustments
Total
2014
15,226
22,606
7,366
30,547
5,278
2,921
(8,153)
75,791
2013 restated
Change
16,921
22,798
7,698
30,674
6,296
2,769
(8,493)
78,663
(1,695)
(192)
(332)
(127)
(1,018)
152
340
(2,872)
-10.0%
-0.8%
-4.3%
-0.4%
-16.2%
5.5%
4.0%
-3.7%
Gross operating margin
The gross operating margin in 2014 amounted to €15,757
million, down 5.6% compared with 2013. Excluding the
impact of non-recurring transactions, the gross operating
margin came to €15,502 million (€15,769 million in 2013),
a decline of €267 million (-1.7%). The change reflected the
adverse effects of changes in exchange rates, the impact of
Millions of euro
-5.6%
15,757
16,691
which was offset by the improvement in the margin on sales
2014
2013 restated
of electricity on the domestic market.
Millions of euro
Sales
Generation and Energy Management
Infrastructure and Networks
Iberia and Latin America
International
Renewable Energy
Other, eliminations and adjustments
Total
16
2013 restated
Change
2014
1,081
1,163
3,979
6,294
1,204
1,938
98
866
1,084
4,009
6,638
1,293
1,780
1,021
15,757
16,691
215
79
(30)
(344)
(89)
158
(923)
(934)
24.8%
7.3%
-0.7%
-5.2%
-6.9%
8.9%
-90.4%
-5.6%
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS
Operating income
Millions of euro
Operating income in 2014 amounted to €3,087 million, a
decrease of 68.3% compared with 2013 (€9,740 million). In
addition to the decline in the gross operating margin, the
contraction is attributable to an increase in impairment los-
ses in 2014 compared with 2013. More specifically, while in
2013 the item was entirely accounted for by the writedown
-68.3%
3,087
9,740
of part of the goodwill of the Enel Russia cash generating
2014
2013 restated
unit (formerly Enel OGK-5), in 2014 impairment losses were
recognized after impairment testing in the total amount of
€6,427 million. The impairment included adjustments to fair
value of the net assets held for sale pertaining to Slovenské
elektrárne (€2,878 million), conventional generation assets
in Italy (€2,108 million), and water use rights for a number
of rivers in the Aysén region of Chile (€589 million).
Millions of euro
Sales
Generation and Energy Management
Infrastructure and Networks
Iberia and Latin America
International
Renewable Energy
Other, eliminations and adjustments
Total
2014
455
(1,539)
2,943
2,789
(2,682)
1,124
(3)
3,087
2013 restated
Change
362
493
3,029
3,767
(23)
1,205
907
9,740
93
(2,032)
(86)
(978)
(2,659)
(81)
(910)
(6,653)
25.7%
-
-2.8%
-26.0%
-
-6.7%
-
-68.3%
17
Millions of euro
6.000
5.000
4.000
3.000
2.000
1.000
0
-83.8%
772
255
517
4,780
1,545
3,235
2014
2013 restated
Earnings per share
€0.06
Earnings per share
€0.34 euro
Group
Non-controlling
interests
Millions of euro
6.000
5.000
4.000
3.000
2.000
1.000
0
-4.3%
88,528
51,145
37,383
92,538
52,832
39,706
2014
2013 restated
Group shareholders’
equity per share
€3.35
Group shareholders’
equity per share
€3.82
Net financial
debt
Shareholders’ equity
(including non-controlling
interests)
Net income
Net income pertaining to shareholders of the Parent
Company amounted to €517 million in 2014, compared
with €3,235 million the previous year. The decrease is
essentially attributable to the decline in operating income,
the increase in net financial expense and impairment losses
on a number of minority interests held by the Group. These
factors were partly offset by lower taxes for 2014, which
reflected the recognition of a tax credit of €1,392 million in
respect of dividends distributed by Endesa following major
corporate operations carried out in the last Quarter of 2014,
and the impact on deferred taxation of impairment losses.
Financial data
Net capital employed
Net capital employed, including net assets held for sale
of €1,488 million (mainly related to Slovenské elektrárne),
amounted to €88,528 million at December 31, 2014 and was
financed by equity pertaining to shareholders of the Parent
Company and non-controlling interests of €51,145 million
and net financial debt of €37,383 million. At December 31,
2014, the debt/equity ratio came to 0.73 (0.75 at December
31, 2013).
Net financial debt came to €37,383 million, a decrease of
€2,323 million compared with December 31, 2013. More
specifically, cash flows from operations, the disposal of a
number of non-strategic assets and the proceeds of the
disposal of 21.92% of Endesa in November in a public offer
more than covered capital expenditure in the period and
the payment of dividends.
18
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Cash flows from operations
Cash flows from operations amounted to €10,058 million
in 2014, up €2,804 million on the previous year.
Capital expenditure
Capital expenditure amounted to €6,701 million in 2014
(of which €6,019 million in respect of property, plant and
equipment), an increase of €781 million on 2013.
Millions of euro
+38.7%
10,058
7,254
2014
2013 restated
Millions of euro
+13.2%
6,701
5,920
2014
2013 restated
Millions of euro
Sales
Generation and Energy Management
Infrastructure and Networks
Iberia and Latin America
International
Renewable Energy
Other, eliminations and adjustments
Total
2014
2013 restated
Change
111
285
996
2,602
936
1,658
113
6,701
99
313
1,046
2,160
924
1,294 (1)
84
5,920
12
(28)
(50)
442
12
364
29
781
12.1%
-8.9%
-4.8%
20.5%
1.3%
28.1%
34.5%
13.2%
(1) The figure for 2013 does not include €1 million regarding units classified as “held for sale”.
Operations
Net electricity generated by Enel (TWh)
Electricity transported on the Enel distribution network (TWh)
Electricity sold by Enel (TWh) (1)
Gas sold to end users (billions of m3)
Employees at year-end (no.) (2)
Italy
Abroad
Total
Italy
Abroad
Total
2014
211.3
173.6
173.4
4.3
71.8
221.8
87.6
3.5
283.1
395.4
261.0
7.8
2013
210.6
173.7
178.3
4.5
71.2
228.9
92.2
4.1
281.8
402.6
270.5
8.6
33,405
35,556
68,961
34,246
36,096
70,342
(1) Excluding sales to resellers.
(2) Includes 4,430 in units classified as “held for sale” at December 31, 2014 (37 at December 31, 2013 restated).
19
Net electricity generation
by source (2014)
13%
Net electricity generated by Enel in 2014 rose by 1.3 TWh
(+0.5%), with an increase in generation abroad (+0.7 TWh)
and in Italy (+0.6 TWh). More specifically, the increase in re-
34%
newables generation (+3.6 TWh), thanks to an expansion of
14%
10%
29%
Renewables Coal
Oil and gas turbine
Nuclear
Gas combined cycle
Electricity sold by geographical area
(2014)
6%
24%
34%
36%
Italy
Iberian peninsula
Latin America
Other countries
Employees by geographical area
(at December 31, 2014)
13%
installed capacity and more favorable weather conditions,
was more than offset by a reduction in nuclear generation
(-1.3 TWh), with an especially sharp contraction in Spain,
and in thermal generation (-1.0 TWh), attributable to the
shut-down of a number of plants in Latin America.
Electricity transported on the Enel distribution net-
work came to 395.4 TWh, a decrease of 7.2 TWh (-1.8%),
essentially due to the decline in electricity demand in Italy
and Spain, only partly offset by the growth posted in Latin
America, especially Brazil.
Electricity sold by Enel decreased by 9.5 TWh (-3.5%),
mainly reflecting a decrease in quantities sold in Italy (-4.6
TWh), France (-4.6 TWh) and the Iberian peninsula (-2.2
TWh), only partly offset by higher sales in Latin America
(+1.9 TWh).
At December 31, 2014, Enel Group employees numbered
68,961 (-1,381 on the end of 2013). The contraction in the
Group workforce is attributable to the balance between
new hirings and terminations (for a net decrease of 1,404)
and the change in the scope of consolidation (an increase
of 23).
48%
19%
4%
16%
Italy
Iberian peninsula
Russia
Latin America
Other countries
Sales
Generation and Energy Management (1)
Infrastructure and Networks
Iberia and Latin America (2)
International (3)
Renewable Energy
Other, eliminations and adjustments
Total
Employees (no.)
2014
3,633
5,314
17,398
22,801
10,403
3,609
5,803
68,961
2013 restated
3,687
5,621
17,689
22,541
11,439
3,469
5,896
70,342
(1) Includes 41 in units classified as “held for sale” at December 31, 2014.
(2) Includes 15 in units classified as “held for sale” at December 31, 2014.
(3) Includes 4,374 in units classified as “held for sale” at December 31, 2014 (37 at December 31, 2013 restated).
20
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Restatement of the
income statement
and the balance sheet
> the application of the new provisions of IAS 32, applica-
ble since January 1, 2014 with retrospective effect, con-
cerning the offsetting of financial assets and liabilities
under certain conditions, which led to the restatement
of several items in the consolidated balance sheet at De-
cember 31, 2013. These changes did not have an impact
The figures in the income statement and the balance sheet at
on consolidated shareholders’ equity;
December 31, 2013, reported here for comparative purposes
> the definitive allocation of the purchase prices for a
only, have been restated to reflect:
number of companies in the Renewable Energy Division
> the application of the new IFRS 11, applicable since Ja-
(including Parque Eólico Talinay Oriente) in transactions
nuary 1, 2014 with retrospective effect, under which the
that had been completed after December 31, 2013. As
only permissible method for accounting for joint ven-
a result, a number of items in the balance sheet at that
tures is the equity method. This change eliminated the
date were restated.
option, permitted under the previous IAS 31 and utilized
previously by the Group, of consolidating such interests
For more detail, please see note 4 to the consolidated financial
on a proportionate basis, resulting in the restatement
statements in this Annual Report 2014.
of all the income statement and balance sheet figures,
The following tables show the impact of the restatement on
although this did not change the Group’s net result or
revenue, the gross operating margin and operating income in
consolidated shareholders’ equity;
2013, by business area.
Revenue
Millions of euro
Sales
Generation and Energy Management
Infrastructure and Networks
Iberia and Latin America
International
Renewable Energy
Other, eliminations and adjustments
Total
Gross operating margin
Millions of euro
Sales
Generation and Energy Management
Infrastructure and Networks
Iberia and Latin America
International
Renewable Energy
Other, eliminations and adjustments
Total
Operating income
Millions of euro
Sales
Generation and Energy Management
Infrastructure and Networks
Iberia and Latin America
International
Renewable Energy
Other, eliminations and adjustments
Total
2013
16,921
22,919
7,698
30,935
7,737
2,827
(8,502)
80,535
2013
866
1,176
4,008
6,746
1,405
1,788
1,022
17,011
2013
362
554
3,028
3,836
85
1,171
908
9,944
Effect of IFRS 11
2013 restated
-
(121)
-
(261)
(1,441)
(58)
9
(1,872)
16,921
22,798
7,698
30,674
6,296
2,769
(8,493)
78,663
Effect of IFRS 11
2013 restated
-
(92)
-
(108)
(112)
(8)
-
(320)
866
1,084
4,008
6,638
1,293
1,780
1,022
16,691
Effect of IFRS 11
2013 restated
-
(61)
-
(69)
(108)
34
-
(204)
362
493
3,028
3,767
(23)
1,205
908
9,740
21
Sustainability indicators
ISO 14001-certified net efficient capacity (% of total)
Average efficiency of thermal plants (%)
Total specific emissions of CO2 from net generation (gCO2/kWheq) (1)
“Zero-emission” generation (% of total)
Enel injury frequency rate (2)
Enel injury severity rate (3)
Serious and fatal injuries at Enel
Serious and fatal injuries at contractors
Average hours of training per employee
Verified violations of the Code of Ethics (4)
2014
2013 restated
Change
94.3
40.3
395
47.4
1.32
0.07
4
38
42.3
27
93.9
39.8
396
46.8
1.43
0.07
13
26
40.0
36
0.4
0.5
(1)
0.6
(0.1)
-
(9)
12
2.3
(9)
0.4%
1.3%
-0.3%
1.3%
-7.8%
-
-69.2%
46.2%
5.8%
-25.0%
(1) Specific emissions are calculated as total emissions from simple thermal generation and co-generation of electricity and heat as a ratio of total renewables
generation, nuclear generation, simple thermal generation and co-generation of electricity and heat (including the contribution of heat in MWh equivalent).
(2) The indicator is calculated as the ratio between the total number of injuries and the number of hours worked, in millions (INAIL standard).
(3) The indicator is calculated as the ratio between the number of days lost for injuries and the number of hours worked, in thousands (INAIL standard).
(4) The analysis of reports received in 2013 was completed in 2014. For that reason, the number of verified violations for 2013 was restated from 27 to 36.
The proportion of ISO 14001-compliant capacity was equal
and intensive information, training and awareness-raising
to 94.3% at December 31, 2014. The rise reflects the new
activities conducted in order to disseminate a culture of
installed capacity of Enel Green Power.
safety at all levels and to promote the adoption of safe be-
In 2014 the average efficiency of thermal plants increased
havior, as well as the ongoing implementation of measu-
from the 39.8% posted in 2013 to 40.3%, the result of gre-
res to enhance workplace health and safety standards and
ater operation of the most efficient thermal plants.
management processes.
Specific emissions of CO2 were unchanged compared with
2013.
Serious and fatal injuries involving Enel personnel decrea-
sed by about 70% compared with 2013, even though there
In 2014, 47.4% of Enel’s generation came from zero-emis-
were 3 fatal workplace accidents. Serious and fatal injuries
sions resources, an increase of 1.3% compared with 2013.
involving the employees of contractors working for Enel
The percentage rise is due to the increase in installed re-
increased by 12 compared with 2013.
newables generation capacity in 2014, which amounted
The average number of hours of training per employee
to 630 MW, confirming the Group’s commitment to deve-
showed an increase of 5.8%, on the previous year, under-
loping carbon-free generation, which will continue in the
scoring Enel’s constant commitment to this area.
years to come.
As regards the Code of Ethics, the number of verified vio-
The Enel injury frequency rate declined by 7.8%, while the
lations declined by 25%, essentially in line with the reduc-
injury severity rate was unchanged, thanks to constant
tion in the number of reports received during the year.
22
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Overview of the Group’s
operations, performance
and financial position
> Net current assets: calculated as the difference between
“Current assets” and “Current liabilities” with the excep-
tion of:
- “Long-term financial receivables (short-term portion)”,
“Receivables for factoring advances”, “Securities”, “Fi-
nancial receivables and cash collateral” and “Other fi-
nancial receivables”;
- “Cash and cash equivalents”;
- “Short-term borrowings” and the “Current portion of
long-term borrowings”.
> Net assets held for sale: calculated as the algebraic sum of
“Assets held for sale” and “Liabilities held for sale”.
> Net capital employed: calculated as the algebraic sum of
“Net non-current assets” and “Net current assets”, provi-
sions not previously considered, “Deferred tax liabilities”
and “Deferred tax assets”, as well as “Net assets held for
sale”.
> Net financial debt: a financial structure indicator, deter-
mined by “Long-term borrowings”, the current portion of
such borrowings and “Short-term borrowings” less “Cash
and cash equivalents”, “Current financial assets” and
“Non-current financial assets” not previously considered
in other balance sheet indicators. More generally, the net
financial debt of the Enel Group is calculated in confor-
mity with paragraph 127 of Recommendation CESR/05-
054b implementing Regulation (EC) 809/2004 and in line
with the CONSOB instructions of July 26, 2007, net of fi-
nancial receivables and long-term securities.
Definition of
performance
indicators
In order to present the results of the Group and the Parent
Company and analyze its financial structure, Enel has pre-
pared separate reclassified schedules that differ from those
envisaged under the IFRS-EU adopted by the Group and
Enel SpA and presented in the consolidated and separate
financial statements, respectively. These reclassified sche-
dules contain different performance indicators from those
obtained directly from the consolidated and separate fi-
nancial statements, which management feels are useful in
monitoring Group and Parent Company performance and
representative of the financial performance of our busi-
ness. In accordance with Recommendation CESR/05-178b
published on November 3, 2005, the criteria used to calcu-
late these indicators are described below.
> Gross operating margin: an operating performance indi-
cator, calculated as “Operating income” plus “Deprecia-
tion, amortization and impairment losses”.
> Group net ordinary income: this is Group net income pro-
duced by ordinary operations.
> Net non-current assets: calculated as the difference
between “Non-current assets” and “Non-current liabili-
ties” with the exception of:
- “Deferred tax assets”;
- “Securities held to maturity”, “Financial investments in
funds or portfolio management products at fair value
through profit or loss”, “Securities available for sale”
and “Other financial receivables”;
- “Long-term borrowings”;
- “Post-employment and other employee benefits”;
- “Provisions for risks and charges”;
- “Deferred tax liabilities”.
23
Main changes in the scope of consolidation
In the two periods under review, the scope of consolidation changed as a result of the following main transactions.
2013
2014
> Acquisition, on March 22, 2013, of 100% of Parque Eólico
> Loss of control, as from January 1, 2014, of SE Hydro-
Talinay Oriente, a company operating in the wind gene-
power, under agreements signed in 2010 upon the ac-
ration sector in Chile;
quisition of the company, providing for the change in
> acquisition, on March 26, 2013, of 50% of PowerCrop,
governance structure as from that date. This resulted in
a company operating in the biomass generation sector;
the Enel Group no longer meeting the requirements for
in view of the joint control exercised over the company
control of the company, which has instead become an
together with another operator, the company is now
entity under joint control. With these new governance
accounted for using the equity method under the provi-
arrangements, the investment was reclassified as a joint
sions of IFRS 11;
operation under IFRS 11;
> disposal, on April 8, 2013, of 51% di Buffalo Dunes Wind
> acquisition, through a tender offer in effect between
Project, a company operating in the wind generation sec-
January 14, 2014 and May 16, 2014, of an additional
tor in the United States;
15.18% stake in Coelce, an electricity distribution com-
> acquisition, on May 22, 2013, of 26% of Chisholm View
pany in Brazil, already under the Group’s control prior to
Wind Project and Prairie Rose Wind, two companies ope-
the tender offer;
rating in the wind generation sector in the United States
> acquisition, on April 22, 2014, of 50% of Inversiones Gas
in which the Group held a stake of 49%; as a result of
Atacama, a company operating in the natural gas tran-
the purchase, the companies are no longer accounted for
sport and electricity generation sector in Chile in which
using the equity method but are now consolidated on a
the Group already held 50%; therefore, the company
line-by-line basis;
is now consolidated on a line-by-line basis rather than
> acquisition, on August 9, 2013, of 70% of Domus Energia
using equity method accounting;
(now Enel Green Power Finale Emilia), a company opera-
> acquisition, on May 12, 2014, of 26% of Buffalo Dunes
ting in the biomass generation sector;
Wind Project, a company operating in the wind gene-
> acquisition, on October 31, 2013, of 100% of Compañía
ration sector in the United States in which the Group
Energética Veracruz, a company operating in the deve-
already held 49%; therefore, the company is now con-
lopment of hydroelectric plants in Peru;
solidated on a line-by-line basis rather than using equity
> disposal, on November 13, 2013, of 40% of Artic Russia,
method accounting;
with the consequent deconsolidation of the interest held
> acquisition, on July 22, 2014, of the remaining 50% of
by the latter in SeverEnergia;
Enel Green Power Solar Energy, an Italian company ope-
> acquisition, in November and December 2013, of nine
rating in the development, design, construction and ope-
companies (representing three business combinations)
ration of photovoltaic plants, in which the Group had
operating in the development of wind power projects in
previously held 50%; therefore, the company is now con-
the United States;
solidated on a line-by-line basis rather than using equity
> disposal, on December 20, 2013, of the remaining stake
method accounting;
in Enel Rete Gas, previously accounted for using the equi-
> acquisition, on September 4, 2014, of the remaining 39%
ty method.
24
of Generandes Perú (previously controlled through a sta-
ke of 61%), a company that controls, with an interest of
54.20%, Edegel, a company operating in the power ge-
neration sector in Peru;
> acquisition, on September 17, 2014, of 100% of Osage
Wind LLC, a company that owns a 150 MW wind deve-
lopment project in the United States. In October 2014,
a stake of 50% in the company was sold. Consequently,
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS the company, held under joint control, began to be ac-
In addition, following the internal reorganization of the
counted for using the equity method;
Group designed to restructure the holdings of the Iberia and
> disposal, on November 21, 2014, of 21.92% of Endesa in
Latin America Division, there were a number of changes in
a public offering. The operation did not involve any loss
non-controlling interests in a number of subsidiaries. More
af control;
specifically, on October 23, 2014 Endesa (of which the Group
> during 2014, agreements were completed for the ac-
holds 92.06%) sold 100% of Endesa Latinoamérica (an in-
quisition of wind and solar projects in Chile, in the total
vestment holding company that owned 40.32% of Enersis)
amount of about €7 million, and a wind project in Uru-
and 20.3% of Enersis, the parent company for operations in
guay for €4 million;
Latin America, to Enel Energy Europe, now Enel Iberoaméri-
> disposal in December 2014 of the entire stake (36.2%)
ca (a wholly-owned subsidiary). The operation increased the
held in LaGeo, a geothermal generation company in El
Group’s stake in Enersis by 4.81%.
Salvador;
> disposal in December 2014 of 100% of Enel Green Power
France, a renewables generator in France.
Group performance
Millions of euro
Total revenue
Total costs
Net income/(expense) from commodity contracts measured at fair value
2014
75,791
59,809
(225)
2013
restated
78,663
61,594
(378)
GROSS OPERATING MARGIN
15,757
16,691
Depreciation, amortization and impairment losses
OPERATING INCOME
Financial income
Financial expense
12,670
3,087
3,326
6,456
6,951
9,740
2,449
5,253
Total financial income/(expense)
(3,130)
(2,804)
Share of income/(losses) of equity investments accounted for using the
equity method
INCOME BEFORE TAXES
Income taxes
NET INCOME FROM CONTINUING OPERATIONS
NET INCOME FROM DISCONTINUED OPERATIONS
NET INCOME (Group and non-controlling interests)
Net income attributable to shareholders of the Group
Net income attributable to non-controlling interests
(35)
(78)
(850)
772
-
772
517
255
217
7,153
2,373
4,780
-
4,780
3,235
1,545
Change
(2,872)
(1,785)
153
(934)
5,719
-3.7%
-2.9%
-40.5%
-5.6%
82.3%
(6,653)
-68.3%
877
1,203
(326)
(252)
(7,231)
(3,223)
35.8%
22.9%
-11.6%
-
-
-
(4,008)
-83.8%
-
-
(4,008)
-83.8%
(2,718)
(1,290)
-84.0%
-83.5%
25
Revenue
Millions of euro
Electricity sales and transport and transfers from the Electricity Equalization
Fund and similar bodies
Gas sold and transported to end users
Remeasurement at fair value after changes in control
Gains on the disposal of assets
Other services, sales and revenue
Total
2014
59,844
4,087
82
292
11,486
75,791
2013
restated
65,504
4,452
21
943
7,743
78,663
Change
(5,660)
(365)
61
(651)
3,743
(2,872)
-8.6%
-8.2%
-
-69.0%
48.3%
-3.7%
Revenue from electricity sales and transport and tran-
> €82 million from the adjustment to the sale price of Artic
sfers from the Electricity Equalization Fund and similar
Russia, which was sold in the 4th Quarter of 2013. The
bodies in 2014 amounted to €59,844 million, down €5,660
adjustment was made in the 1st Quarter of 2014 with the
million compared with 2013 (-8.6%). The decline, which also
triggering of the earn-out clause included in the agree-
reflects the adverse impact of exchange rate developments,
ments reached with the buyer prior to closing the sale;
especially in Russia, Chile and Brazil, is attributable to the
> €31 million from the gain on the sale of 100% of Enel
following factors:
Green Power France.
> a decrease of €2,958 million in revenue from wholesale
electricity sales, mainly due to a decline in sales on elec-
The gain from remeasurement at fair value after changes
tricity exchanges, only marginally offset by greater sales
in control amounted to €82 million in 2014 (€21 million in
under bilateral contracts with generation companies;
2013). The gain is attributable to the remeasurement at fair
> a reduction of €1,662 million in revenue from the sale of
value of the assets and liabilities attributable to the Group:
electricity to end users, of which €1,477 million on regu-
> following the loss of control, as from January 1, 2014, of
lated markets and €185 million on free markets, essen-
SE Hydropower following changes in its governance ar-
tially associated with the decline in electricity demand;
rangements (€50 million);
> a decrease of €807 million in revenue from electricity tra-
> already held by Enel prior to the acquisition of full control
ding, as volumes handled declined;
of Inversiones Gas Atacama (€29 million) and Buffalo Du-
> a decrease of €470 million in revenue from the transport
nes Wind Project (€3 million).
of electricity, due essentially to a decline in revenue from
In 2013, these gains regarded the Group’s residual holding
the transport of electricity on the regulated market;
(49%) following the loss of control of Buffalo Dunes Wind
> an increase of €237 million in revenue from transfers
Project.
from the Electricity Equalization Fund and similar bo-
dies, essentially reflecting changes in the regulatory fra-
Income from other services, sales and revenue in 2014
mework for companies operating in the non-peninsular
amounted to €11,486 million (€7,743 million in 2013), an
market in Spain.
increase of €3,743 million (+48.3%) on the previous year.
The rise is essentially due to the following factors:
Revenue from gas sold and transported to end users
> an increase of €3,035 million in revenues from the sale of
amounted to €4,087 million, down €365 million (-8.2%) on
fuels for trading, including revenues for shipping services,
the previous year. The contraction mainly reflects the decli-
essentially due to an increase in volumes handled against
ne in revenue from the transport of gas to end users, prima-
a reduction in generation activities, and an increase of
rily owing to a decrease in amounts transported.
€893 million in sales of environmental certificates, mainly
Gains on the disposal of assets amounted to €292 million
> a decrease of €156 million in connection fees, together
in 2014. They essentially regard:
with a reduction of €71 million in government grants to
> €123 million from the gain on the disposal of the stake in
the Argentine distribution company Edesur concerning
LaGeo, a geothermal generation company in El Salvador;
the Mecanismo de Monitoreo de Costos.
green certificates and CO2 emissions allowances;
26
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS
Costs
Millions of euro
Electricity purchases
Consumption of fuel for electricity generation
Fuel for trading and gas for sale to end users
Materials
Personnel
Services, leases and rentals
Other operating expenses
Capitalized costs
Total
2014
23,317
6,005
7,848
2,275
4,864
14,662
2,362
(1,524)
59,809
2013
restated
Change
27,325
(4,008)
6,675
5,196
1,550
4,555
14,906
2,821
(1,434)
61,594
(670)
2,652
725
309
(244)
(459)
(90)
(1,785)
-14.7%
-10.0%
51.0%
46.8%
6.8%
-1.6%
-16.3%
-6.3%
-2.9%
Costs for electricity purchases amounted to €23,317 mil-
lowing the implementation of the measures provided for in
lion in 2014, a decrease of €4,008 million (-14.7%). The
Article 4 of Law 92/2012 and the concomitant termination
decline essentially reflects the impact of lower purchases
of the transition-to-retirement plan. Excluding these fac-
on electricity exchanges (€3,105 million) and lower costs
tors, personnel costs declined by €206 million, essentially
for electricity purchases on domestic and foreign markets
owing to the contraction in the average workforce, which
(€853 million), essentially connected with the general de-
was especially large in Italy (794 employees) as a result of
crease in demand.
the early retirement plans.
Costs for the consumption of fuel for electricity gene-
The Enel Group’s workforce at December 31, 2014 numbe-
ration in 2014 amounted to €6,005 million, a decrease of
red 68,961 (70,342 at December 31, 2013), of whom 52%
€670 million compared with the previous year (-10.0%), es-
were employed abroad.
sentially attributable to the impact of the decline in volu-
The Group’s workforce decreased by 1,381 during the year,
mes of electricity from thermal generation and the average
reflecting the balance between new hirings and termina-
purchase prices of the associated fuel.
tions (a decrease of 1,404) and the change in the scope of
Costs for the purchase of fuel for trading and gas for sale
an additional 50% of Inversiones Gas Atacama (a gain of 163
to end users came to €7,848 million, an increase of €2,652
employees), the disposal of Enel Green Power France (a de-
million (51.0%) on 2013. The rise reflects an increase in in-
crease of 48 employees), the change in the method of con-
termediation in commodity markets, as discussed under
solidating SE Hydropower from full line-by-line to proportio-
consolidation, essentially attributable to the acquisition of
revenue.
nate following the loss of control as a result of the changes in
governance arrangements (a decrease of 51 employees) and
Costs for materials amounted to €2,275 million in 2014, an
other minor disposals (a decrease of 41 employees).
increase of €725 million on 2013, mainly due to changes in
The change compared with December 31, 2013 breaks
inventories of CO2 emissions allowances and environmental
certificates.
down as follows.
Personnel costs in 2014 amounted to €4,864 million, an incre-
Change in scope of consolidation
Balance at December 31, 2013 restated
ase of €309 million (+6.8%) compared with the previous year.
More specifically, the rise mainly reflects the voluntary early
retirement plan introduced in Spain in 2014, which invol-
ved the recognition of a charge of €345 million, as well as
Hirings
Terminations
Balance at December 31, 2014 (1)
the net benefit (€170 million) recognized in Italy in 2013 fol-
2013).
27
(1) Includes 4,430 in units classified as “held for sale” (37 at December 31,
70,342
23
4,821
(6,225)
68,961
Costs for services, leases and rentals in 2014 amounted
plant in Slovakia in the amount of €103 million;
to €14,662 million, a decrease of €244 million (-1.6%) on
> an increase of €698 million in impairment of intangible
2013. The change is essentially related to the decrease in
assets (mainly attributable to the impairment of water
electricity transport costs (€294 million), related to the
use rights for a number of rivers in the Aysén region of
decline in consumption in the main markets in which the
Chile);
Group operates. Another factor was the decrease in ope-
> a decrease of €551 million in impairment of goodwill.
rating costs of electrical systems (€265 million), including
More specifically, writedowns in 2014 regarded the Enel
fees for transport capacity use rights in respect of the
Russia and Enel Green Power Hellas CGUs totaling €194
Energy Markets Operator (GME). These effects were partly
million; in 2013, the item included the partial impairment
offset by an increase in costs for leases and rentals, which
of goodwill on the Enel Russia CGU in the amount of
among other factors includes the effects of the changes in
€744 million;
water use fees in Spain introduced with Law 15/2012.
> an increase of €135 million in impairment losses on trade
receivables.
Other operating expenses in 2014 amounted to €2,362
These factors were only partly offset by a decrease of €122
million, a decrease of €459 million on the previous year
million in depreciation, due in part to the extension in 2013
(-16.3%). More specifically, the decline mainly reflects the
of the useful life of nuclear plants in Spain.
impact of the recognition in 2013 of taxes on conventio-
nal generation introduced in Spain with Law 15/2012 and
Operating income for 2014 amounted to €3,087 million,
a reduction in costs for charges for emissions. These fac-
a decrease of €6,653 million compared with the previous
tors were partly offset by an increase in costs associated
year (-68.3%).
with the reintroduction of the Bono Social in Spain totaling
€204 million.
Net financial expense in 2014 amounted to €3,130 mil-
lion, an increase of €326 million compared with the pre-
Capitalized costs amounted to €1,524 million in 2014
vious year (€2,804 million), mainly accounted for by:
(€1,434 million in 2013), with the increase mainly reflecting
> an increase of €221 million in interest expense on net fi-
the rise in investments.
nancial debt;
> an increase of €1,616 million in net income from deriva-
Net income/(expense) from commodity contracts me-
tives, which more than offset the rise of €1,551 million in
asured at fair value showed net charges of €225 million
net exchange rate losses;
in 2014 (€378 million the previous year). More specifically,
> a reduction of €78 million in net income from equity in-
the net charges for 2014 reflect €43 million in net realized
vestments, essentially reflecting the recognition in 2013
income for the period (€264 million of net charges in 2013)
of the gain on the disposal of Medgaz (€64 million);
and net charges from the fair value measurement of deri-
> a writedown of financial assets (€92 million) in respect of
vatives positions open at the end of the year in the amount
service concessions following a rate review for the Brazi-
of €268 million (€114 million in 2013).
lian companies Ampla and Coelce in 2014;
> the impact of a writeback of €66 million in 2013 in re-
Depreciation, amortization and impairment losses to-
spect of the receivable due from the Slovakian National
taled €12,670 million, an increase of €5,719 million (82.3%).
Nuclear Fund, the effect of which was entirely offset
The rise largely reflects the net impact of:
by the income of the same amount recognized in 2014
> an increase of €2,878 million in impairment of Slovenské
following the renegotiation of a finance lease for the
elektrárne, classified under assets held for sale, following
Gabčíkovo hydroelectric plant, which brought forward
their measurement at estimated realizable value as de-
the expiry of the contract to 2015, from its original expi-
termined on the basis of bids received;
ration date of 2036;
> an increase of €2,727 million in impairment of property,
> a reduction of €78 million in charges for the with-re-
plant and equipment, essentially comprising conventio-
course assignment of trade receivables;
nal generation plants in Italy in the amount of €2,096
> an increase of €36 million in expense for the accretion of
million in 2014, thermal plants in Russia, with impairment
provisions.
losses of €205 million, and the Gabčíkovo hydroelectric
28
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS
The share of income/(losses) of equity investments ac-
€850 million (a liability of €2,373 million in 2013). More
counted for using the equity method showed net los-
specifically, the difference in the tax burden for 2014 (com-
ses of €35 million in 2014, a deterioration of €252 million
pared with an effective rate of 33.2% in 2013) reflected
compared with the previous year. The decline included the
the grant of a tax credit of €1,392 million in respect of the
impairment losses on the investment in Centrales Hidro-
distribution of dividends by Endesa in the 4th Quarter, as
eléctricas de Aysén amounting to €88 million (as a result of
well as the tax effect of impairment losses. In addition,
the uncertainty concerning permits for the development
the tax burden in 2014 reflected the net benefit of €138
of a hydroelectric plant in Chile) and in the Greek compa-
million from changes in tax rates in Spain, Chile, Colombia,
nies of the Renewable Energy Division (“Elica 2”) in the to-
Peru and Italy. The change in the latter case was associated
tal amount of €89 million.
with the court ruling that the Robin Hood Tax was uncon-
stitutional, closing a long-running administrative dispute.
Income taxes for 2014 showed a net creditor position of
Analysis of the Group’s financial position
Millions of euro
Net non-current assets:
- property, plant and equipment and intangible assets
- goodwill
- equity investments accounted for using the equity method
- other net non-current assets/(liabilities)
Total net non-current assets
Net current assets:
- trade receivables
- inventories
- net receivables due from the Electricity Equalization Fund and similar bodies
- other net current assets/(liabilities)
- trade payables
Total net current assets
Gross capital employed
Sundry provisions:
- post-employment and other employee benefits
- provisions for risks and charges and net deferred taxes
Total provisions
Net assets held for sale
Net capital employed
Total shareholders’ equity
Net financial debt
at Dec. 31,
2014
at Dec. 31, 2013
restated
Change
89,844
14,027
872
(741)
104,002
12,022
3,334
(2,994)
(4,827)
(13,419)
(5,884)
98,118
(3,687)
(7,391)
(11,078)
1,488
88,528
51,145
37,383
98,499
14,967
1,372
(1,209)
(8,655)
(940)
(500)
468
113,629
(9,627)
11,378
3,555
(2,567)
(5,058)
(12,363)
(5,055)
644
(221)
(427)
231
(1,056)
(829)
108,574
(10,456)
(3,677)
(12,580)
(16,257)
221
92,538
52,832
39,706
(10)
5,189
5,179
1,267
(4,010)
(1,687)
(2,323)
-8.8%
-6.3%
-36.4%
-38.7%
-8.5%
5.7%
-6.2%
-16.6%
-4.6%
8.5%
-16.4%
-9.6%
0.3%
-41.2%
31.9%
-
-4.3%
-3.2%
-5.9%
Property, plant and equipment and intangible assets (inclu-
Aysén region of Chile), and exchange rate losses of €917
ding investment property) came to €89,844 million at De-
million. These factors were partly offset by capital expendi-
cember 31, 2014, a decrease of €8,655 million. The decrea-
ture of €6,701 million for the year.
se is essentially attributable to the reclassification to assets
held for sale, notably those of Slovenské elektrárne (€5,966
Goodwill amounted to €14,027 million, a decrease of €940
million), depreciation, amortization and impairment losses
million compared with December 31, 2013. The change is
for the year (€8,835 million, of which €2,108 million in re-
essentially due to the impairment loss recognized following
spect of the impairment recognized on conventional ge-
the impairment testing of the Enel Russia CGU (€160 mil-
neration plants in Italy and €589 million in respect of the
lion) and the reclassification of the goodwill of Slovenské
impairment of water use rights for a number of rivers in the
elektrárne (€697 million), which was then written down fol-
29
lowing an assessment of its estimated realizable value. The-
> an increase in net receivables due from the Electricity
se factors were compounded by the impact of the apprecia-
Equalization Fund and similar bodies of €427 million, the
tion of the euro against other currencies (about €52 million)
consequence of the application of equalization mechani-
and the decrease in goodwill from the disposal of entities, in
sms to electricity purchases;
particular Enel Green Power France, more than offset by the
> an increase in other net current assets less related liabi-
goodwill recognized in the acquisitions of Inversiones Gas
lities of €231 million. The change is the result of the fol-
Atacama and Buffalo Dunes Wind Project.
lowing developments:
- a decrease of €74 million in other receivables, mainly
Equity investments accounted for using the equity method
due to a reduction in receivables in respect of derivati-
amounted to €872 million, a decrease of €500 million com-
ves on commodities;
pared with December 31, 2013. The decline reflected the
- a decrease in net income tax receivables of €170 mil-
acquisition of control of Inversiones Gas Atacama, Buffalo
lion, mainly due to a decline in payments on account in
Dunes Wind Project and Enel Green Power Solar Energy,
2014 by Enel SpA;.
which had previously been recognized under this item but
- a decline of €224 million in other current liabilities as
are now consolidated on a line-by-line basis, as well as the
a result of the increase in liabilities for dividends to be
disposal of shareholdings in the Spanish company Tirme
paid to non-controlling shareholders, partly in reflec-
and the Salvadoran company LaGeo. In addition, the item
tion of the dilution of the holding in Endesa;
was also impacted by the impairment of the investments in
- an increase in net current financial assets of €251 mil-
Centrales Hidroeléctricas de Aysén and the companies ac-
lion, essentially due to the rise in the fair value of com-
counted for at equity held in Greece (“Elica 2”) for a total
modity derivatives, partly offset by developments in
of €177 million. The decreases engendered by these non-
the fair value of derivatives on exchange rates;
recurring operations were partly offset by the net income
> an increase in trade payables of €1,056 million.
attributable to the shareholders of the Parent Company ear-
ned by the companies.
Sundry provisions amounted to €11,078 million, an incre-
ase of €5,179 million compared with the previous year. The
Other net non-current liabilities at December 31, 2014
rise essentially reflects the following factors:
amounted to €741 million, a decrease of €468 million com-
> a decrease of €2,733 million in provisions for risks and
pared with December 31, 2013 (net liabilities of €1,209 mil-
charges. The decline is mainly attributable to the reclas-
lion).
sification to liabilities held for sale of the nuclear de-
The change is mainly attributable to the following factors:
commissioning provision for the Slovakian plants, the
> an increase of €667 million in net assets in respect of cash
decrease in the provision for litigation as a result of the
flow hedge derivatives on exchange rates, only partly of-
settlement agreement to resolve the dispute between
fset by a decrease in the net fair value of the analogous
Enel Distribuzione and A2A, and the use of the early re-
interest rate hedges;
tirement incentive provisions in Italy and in Spain; in the
> a decrease in net deferred income (€36 million) and the
latter case, the use was partly offset by the new voluntary
value of other equity investments (€72 million), including
early retirement plan;
the remeasurement to fair value of the investment in Ba-
> a decrease of €2,456 million in net deferred tax liabilities,
yan Resources.
mainly due to the recognition of deferred tax assets by
Enel Iberoamérica (formerly Enel Energy Europe) on di-
Net current assets came to a negative €5,884 million at De-
vidends received in non-recurring operations carried out
cember 31, 2014, up €829 million compared with December
in the last Quarter of 2014 in the amount of €1,392 mil-
31, 2013. The change is attributable to the following factors:
lion. Other factors were the net impact of the reclassifi-
> an increase in trade receivables of €644 million, mainly
cation of deferred tax assets and liabilities of the compa-
due to a rise in receivables as a result of the increase in
nies classified as held for sale and changes in tax rates in
sales of fuels, especially gas;
Spain, Chile and Colombia in 2014, as well as the impact
> a decrease in inventories of €221 million, largely due to
of the elimination of the Robin Hood Tax in Italy.
a contraction of about €202 million in stocks of nuclear
fuel;
30
Net assets held for sale amounted to €1,488 million at De-
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS
cember 31, 2014 (€221 million at December 31, 2013). They
Net capital employed at December 31, 2014 amounted to
include the net assets of Slovenské elektrárne, SE Hydropo-
€88,528 million and was funded by shareholders’ equity attri-
wer and other minor companies that in view of the deci-
butable to the shareholders of the Parent Company and non-
sions taken by management meet the requirements of IFRS
controlling interests in the amount of €51,145 million and
5 for classification as assets held for sale.
net financial debt of €37,383 million. At December 31, 2014,
the debt/equity ratio was 0.73 (0.75 at December 31, 2013).
Analysis of the Group financial structure
Net financial debt
Net financial debt and changes in the period are detailed in the table below.
Millions of euro
Long-term debt:
- bank borrowings
- bonds
- other borrowings
Long-term debt
Long-term financial receivables and securities
Net long-term debt
Short-term debt:
Bank borrowings:
- short-term portion of long-term bank borrowings
- other short-term bank borrowings
Short-term bank borrowings
Bonds (short-term portion)
Other borrowings (short-term portion)
Commercial paper
Cash collateral and other financing on derivatives
Other short-term financial payables
Other short-term debt
Long-term financial receivables (short-term portion)
Factoring receivables
Financial receivables and cash collateral
Other short-term financial receivables
Cash and cash equivalents with banks and short term securities
Cash and cash equivalents and short-term financial receivables
Net short-term debt
NET FINANCIAL DEBT
Net financial debt of “Assets held for sale”
at Dec. 31,
2014
at Dec. 31, 2013
restated
Change
7,022
39,749
1,884
48,655
(2,701)
45,954
824
30
854
4,056
245
2,599
457
166
7,523
(1,566)
(177)
(1,654)
(323)
(13,228)
(16,948)
(8,571)
37,383
620
7,873
41,483
1,549
50,905
(4,965)
45,940
1,750
118
1,868
2,648
260
2,202
119
45
5,274
(2,976)
(263)
(1,720)
(527)
(7,890)
(13,376)
(6,234)
39,706
(10)
(851)
(1,734)
335
(2,250)
2,264
14
(926)
(88)
(1,014)
1,408
(15)
397
338
121
2,249
1,410
86
66
204
(5,338)
(3,572)
(2,337)
(2,323)
630
-10.8%
-4.2%
21.6%
-4.4%
-45.6%
-
-52.9%
-74.6%
-54.3%
53.2%
-5.8%
18.0%
-
-
42.6%
47.4%
32.7%
3.8%
38.7%
-67.7%
-26.7%
37.5%
-5.9%
-
Net financial debt amounted to €37,383 million at De-
More specifically, long-term bank borrowings amounted to
cember 31, 2014, a decrease of €2,323 million compared
€7,022 million, a decline of €851 million, primarily reflecting:
with December 31, 2013. In particular, the increase of €14
> the reclassification of borrowings held by Slovenské
million in net long-term debt was partly offset by a decre-
elektrárne at the end of 2014 to “assets held for sale” in
ase of €2,337 million in net short-term debt.
the amount of €1,557 million;
31
> the repayment of credit facilities in the amount of €450
compared with the end of 2013, the result of a decrease in
million by Slovenské elektrárne;
short-term bank borrowings amounting to €1,014 million (es-
> the repayment of EIB loans by Enel Distribuzione in the
sentially due to a decrease in the short-term portion of credit
amount of €266 million;
facilities and bank borrowings in the amount of about €926
> the repayment of €880 million by Endesa;
million), a decrease of €3,572 million in cash and cash equiva-
> repayments by Enersis in the total amount of €221 million.
lents and short-term financial receivables and an increase in
These developments were partly offset by drawings on lines
other short-term debt of €2,249 million.
of financing by Enersis in the amount of €105 million, EIB lo-
Commercial paper includes issues by Enel Finance Interna-
ans to Enel Green Power International in the amount of €150
tional, Endesa Latinoamérica, and Endesa Capital in the to-
million and bank borrowings in the amount of €153 million,
tal amount of €2,599 million. Finally, cash collateral paid to
EIB loans to Enel Produzione in the amount of €150 million,
counterparties in over-the-counter derivatives transactions on
to Enel Green Power Chile in the amount of €103 million, to
interest rates, exchange rates and commodities totaled €1,654
Enel Green Power Brasil in the amount of €217 million, to Slo-
million, while cash collateral received from such counterpar-
venské elektrárne in the amount of €855 million and to Enel
ties amounted to €457 million.
Green Power México in the amount of €77 million.
Cash and cash equivalents and short-term financial receivables
amounted to €16,948 million, an increase of €3,572 million
Bonds amounted to €39,749 million, a decrease of €1,734
compared with the end of 2013, mainly reflecting an increa-
million on the end of 2013, mainly reflecting the repayment
se in liquidity held with banks and short-term securities in the
of a €1,000 million bond issued by Enel SpA in 2007, the re-
amount of €5,338 million and a decrease in the current por-
payment of a $1,250 million bond issued by Enel Finance In-
tion of long-term financial receivables in the amount of €1,410
ternational, repayments of bonds issued by Enel Finance Inter-
million, which is discussed in greater detail in note 27.1.
national in the amount of €762 million and new issues carried
out in 2014, including the issue of hybrid financial instruments
Among major transactions in 2014, on April 24, 2014, Enel
by Enel SpA (€1,000 million fixed-rate 5%, maturing on Janua-
SpA renegotiated a bilateral revolving credit facility in the
ry 15, 2075 with a call option at January 15, 2020 and £500
overall amount of €550 million, falling due in 2016, replacing
million fixed-rate 6.625%, maturing on September 15, 2076,
the credit facility obtained on July 18, 2013, falling due in July
with a call option at September 15, 2021).
2015, in the amount of €400 million.
These effects were partly offset by the reclassification to short
term of the current portion of a bond issued by Enel Finan-
In addition, as part of the optimization of finance operations
ce International in 2011 in the amount of €1,195 million and
and the active management of maturities and the cost of
bonds issued by Endesa in the amount of €480 million.
funds, on October 28, 2014 Enel Finance International repur-
chased its own bonds, secured by Enel, in the total amount of
Net short-term debt showed a creditor position of €8,571
about €762 million.
million at December 31, 2014, a decrease of €2,337 million
Cash flows
Millions of euro
Cash and cash equivalents at the beginning of the period (1)
Cash flows from operating activities
Cash flows from investing/disinvesting activities
Cash flows from financing activities
Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the period (2)
2014
7,900
10,058
(6,137)
1,536
(102)
13,255
2013 restated
9,768
7,254
(4,103)
(4,598)
(421)
7,900
Change
(1,868)
2,804
(2,034)
6,134
319
5,355
(1) Of which cash and cash equivalents equal to €7,873 million at January 1, 2014 (€9,726 million at January 1, 2013), short-term securities equal to €17 million
at January 1, 2014 (€42 million at January 1, 2013) and cash and cash equivalents pertaining to assets held for sale in the amount of €10 million at January
1, 2014 (none at January 1, 2013).
(2) Of which cash and cash equivalents equal to €13,088 million at December 31, 2014 (€7,873 million at December 31, 2013), short-term securities equal to
€140 million at December 31, 2014 (€17 million at December 31, 2013) and cash and cash equivalents pertaining to assets held for sale equal to €27 million
at December 31, 2014 (€10 million at December 31, 2013).
32
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Cash flows from operating activities in 2014 amounted to
> the acquisition of an additional 39% (€321 million) of
€10,058 million, an increase of €2,804 million on the pre-
Generandes Perú (already controlled through a stake of
vious year, reflecting the decreased use of cash connected
61%), a company which holds a controlling interest of
with the change in net current assets, which was only
54.20% of Edegel;
partly offset by the decline in operating income.
> the acquisition of non-controlling interests of 4.81%
(€659 million including transaction costs) of Enersis, fol-
Cash flows from investing/disinvesting activities absorbed
lowing the disposal by Endesa to Enel Energy Europe
funds in the amount of €6,137 million compared with
(now Enel Iberoamérica) of 100% of Endesa Latinoméri-
€4,103 million in 2013. More specifically:
ca (now Enel Latinoamérica) and 20.3% of Enersis;
> investments in property, plant and equipment and in
> the disposal of 21.92% of Endesa in a public offering
intangible assets amounted to €6,701 million, up €781
(€3,087 million net of transaction costs).
million on the previous year, mainly due to the increase in
expenditure by the Renewable Energy Division;
Cash flows from operating activities in the amount of
> investments in entities or business units, net of cash and
€10,058 million and cash flows from financing activities
cash equivalents acquired, amounted to €73 million, and
totaling €1,536 million more than covered the cash requi-
regarded business combinations involving the acquisi-
rements of investing activities in the amount of €6,137 mil-
tion of control of a number of companies. These included
lion. The difference is reflected in the increase in cash and
the acquisition of an additional 50% of Inversiones Gas
cash equivalents, which at December 31, 2014 amounted
Atacama, the acquisition of an additional 26% of Buffa-
to €13,255 million, compared with €7,900 million at the
lo Dunes Wind Project (following which Enel’s stake rose
end of 2013. The change also reflects exchange rate losses
to 75%), the acquisition of 100% of Aurora Distributed
of €102 million.
Solar, and the acquisition of an additional 50% of Enel
Green Power Solar Energy;
> disposals of entities or business units, net of cash and
cash equivalents sold, amounted to €312 million and re-
gard the disposal of 100% of Enel Green Power France,
the collection of the price adjustment on the disposal in
2013 of Artic Russia, the disposal of Construcciones y Pro-
yectos Los Maitenes, and the disposal of smaller compa-
nies of the Renewable Energy Division;
> liquidity generated by other investing/disinvesting acti-
vities amounted to €325 million, comprising the disposal
of 36.2% of LaGeo, the disposal of the investment in Tir-
me, the acquisition of 100% and subsequent disposal of
50% of Osage Wind, and other ordinary disinvestments
during the period.
Cash flows from financing activities generated cash in
the amount of €1,536 million, compared with cash ab-
sorption of €4,598 million in 2013. More specifically, the
positive impact of new issues of hybrid instruments and
net proceeds from disposals/acquisitions of non-control-
ling interests was only partly offset by cash requirements
associated with the payment of dividends to the Group’s
non-controlling shareholders. More specifically, transac-
tions in non-controlling interests regarded:
> the acquisition of an additional 15.18% of Coelce (€180
million) in Brazil;
33
Average number of electricity customers
Average number of gas customers
Free
market
5,473,322
4,769,204
3,470,692
3,245,996
2014
2013
restated
Performance 2014 (millions of euro)
2014
2013
restated
Revenue
15,226
Gross operating margin
1,081
Capital
expenditure
111
Results by business area
The representation of performance by business area presen-
vely as from January 1, 2014 prompted the restatement, for
ted here is based on the approach used by management in
comparative purposes only, of the performance figures for
monitoring Group performance for the two periods under
2013 of the Divisions and business areas of the Group. In
review, taking account of the operational model adopted
addition, those changes led to appropriate adjustments of
by the Group as described above. As discussed in the sec-
the operational data for those Divisions and business areas,
tion “Summary of results”, amendments of a number of the
where affected, for 2013.
IFRS-EU adopted by the Group and applicable retrospecti-
Segment information for 2014 and 2013
Results for 2014 (1)
Millions of euro
Revenues from third parties
Revenues from transactions with
other segments
Total revenue
Net income/(expense) from
commodity contracts measured at
fair value
Gross operating margin
Depreciation, amortization and
impairment losses
Operating income
Capital expenditure
Sales
15,116
110
15,226
(34)
1,081
626
455
111
GEM
18,908
3,698
22,606
(146)
1,163
2,702
(1,539)
285
Infra. &
Networks
Iberia & Latin
America
3,618
30,412
3,748
7,366
135
30,547
3,979
1,036
2,943
996
(115)
6,294
3,505
2,789
2,602
Int’l
4,920
358
5,278
(5)
1,204
3,886
(2,682)
936
Other,
eliminations
and
adjustments
Renewable
Energy
Total
2,662
155
75,791
259
2,921
(8,308)
-
(8,153)
75,791
76
1,938
814
1,124
1,658
(1)
98
(225)
15,757
101
12,670
(3)
113
3,087
6,701
(1) Segment revenues include both revenues from third parties and revenue flows between the segments. An analogous approach was taken for other income
and costs for the period.
Results for 2013 restated (1) (2)
Millions of euro
Revenues from third parties
Revenues from transactions with
other segments
Total revenue
Net income/(expense) from
commodity contracts measured at
fair value
Gross operating margin
Depreciation, amortization and
impairment losses
Operating income
Capital expenditure
Sales
16,704
217
16,921
(82)
866
504
362
99
GEM
18,758
4,040
22,798
(165)
1,084
591
493
313
Infra. &
Networks
Iberia & Latin
America
3,669
30,563
4,029
7,698
-
4,008
980
3,028
1,046
111
30,674
(148)
6,638
2,871
3,767
2,160
Other,
eliminations
and
adjustments
Renewable
Energy
Total
2,281
1,026
78,663
488
2,769
(9,519)
-
(8,493)
78,663
21
1,780
-
(378)
1,022
16,691
575
1,205
1,294 (3)
114
908
84
6,951
9,740
5,920
Int’l
5,662
634
6,296
(4)
1,293
1,316
(23)
924
(1) Segment revenues include both revenues from third parties and revenue flows between the segments. An analogous approach was taken for other income
and costs for the period.
(2) The figures have been restated as a result of the change, with retrospective effect, in accounting treatment with IFRS 11.
(3) Does not include €1 million regarding units classified as “held for sale”.
34
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONSRegulated market21,734,57523,050,677 1 Sales
Average number of electricity customers
Average number of gas customers
Free
market
5,473,322
4,769,204
3,470,692
3,245,996
2014
2013
restated
Performance 2014 (millions of euro)
2014
2013
restated
Revenue
15,226
Gross operating margin
1,081
Capital
expenditure
111
Operations
Electricity sales
Millions of kWh
Free market:
- mass-market customers
- business customers (1)
- safeguard market customers
Total free market
Regulated market:
- enhanced protection market customers
TOTAL
2014
2013 restated
Change
25,148
10,742
1,479
37,369
49,734
87,103
25,913
9,265
1,721
36,899
54,827
91,726
(765)
1,477
(242)
470
(5,093)
(4,623)
(1) Large customers and energy-intensive users (annual consumption greater than 1 GWh).
-3.0%
15.9%
-14.1%
1.3%
-9.3%
-5.0%
35
Regulated market21,734,57523,050,677 Average number of customers
Free market:
- mass-market customers
- business customers (1)
- safeguard market customers
Total free market
Regulated market:
2014
2013 restated
Change
5,387,579
4,693,080
694,499
51,215
34,528
38,566
37,558
12,649
(3,030)
5,473,322
4,769,204
704,118
- enhanced protection market customers
21,734,575
23,050,677
(1,316,102)
TOTAL
27,207,897
27,819,881
(611,984)
(1) Large customers and energy-intensive users (annual consumption greater than 1 GWh).
14.8%
32.8%
-8.1%
14.8%
-5.7%
-2.2%
Electricity sold in 2014 amounted to 87,103 million kWh,
from the regulated system to the free market, was only
down 4,623 million kWh compared with the previous year.
partly offset by an increase in volumes delivered to business
More specifically, the decline in sales on the regulated mar-
customers.
ket, essentially reflecting the ongoing shift of customers
Gas sales and customers
Gas sales (millions of m3)
- mass-market customers (1)
- business customers
Total sales
2014
2013 restated
Change
2,937
559
3,496
3,394
707
4,101
(457)
(148)
(605)
Average number of customers
3,470,692
3,245,996
224,696
(1) Includes residential customers and microbusinesses.
-13.5%
-20.9%
-14.8%
6.9%
Gas sold in 2014 amounted to 3,496 million cubic meters,
with the previous year, affecting all categories of customer
a decrease of 605 million cubic meters (-14.8%) compared
and mainly reflecting the adverse economic climate in Italy.
Performance
Millions of euro
Revenue
Gross operating margin
Operating income
Capital expenditure
2014
2013 restated
Change
15,226
1,081
455
111
16,921
(1,695)
-10.0%
866
362
99
215
93
12
24.8%
25.7%
12.1%
Revenue in 2014 amounted to €15,226 million, a decrease
ted electricity market, mainly associated with the de-
of €1,695 million compared with 2013 (-10.0%), reflecting
cline in quantities sold (-5.1 TWh) and the reduction in
the following main factors:
revenues from the rate component covering generation
> a decrease of €1,055 million in revenue on the regula-
costs. These factors were only partly offset by an increase
36
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS in revenue recognized for sales services and the positive
> an increase of €239 million in the margin on the free mar-
impact of €109 million from prior-year items, essentially
ket for electricity and gas, due mainly to the rise in the
associated with equalization payments for purchases the
unit margins on both commodities, partly offset by gre-
previous year;
ater costs essentially linked to customer acquisition and
> a decrease of €359 million in revenue from the sale of
management;
natural gas to end users, essentially connected with the
> a decrease of €24 million in the margin on the regula-
decline in volumes sold, especially in the mass-market
ted electricity market, largely due to a decline in services
segment;
rendered to the companies of the Infrastructure and Net-
> a decrease of €293 million in revenue on the free electri-
works Division. This factor was only partly offset by an in-
city market, largely as a result of the decline in average
crease of €39 million in the margin on electricity, despite
sales prices charged to the various customer segments, as
the decline in quantities sold, and a reduction in certain
well as the recognition of prior-year charges as a result of
operating expenses.
the adjustment of volumes notified to the national grid
operator. These factors were only partly offset by a rise in
Operating income in 2014, after depreciation, amortiza-
volumes sold (+0.5 TWh).
tion and impairment losses of €626 million (€504 million in
2013), came to €455 million, an increase of €93 million com-
The gross operating margin in 2014 totaled €1,081 mil-
pared with 2013, mainly reflecting the developments in the
lion, an increase of €215 million compared with 2013
gross operating margin and an increase of €111 million in
(+24.8%). More specifically, the rise reflects:
impairment losses on trade receivables.
Capital expenditure
Capital expenditure amounted to €111 million, broadly in line with 2013 (€99 million).
37
2 Generation and Energy Management
Net efficient generation capacity (MW)
Performance 2014 (millions of euro)
33,690
36,220
Thermal
22,463
Thermal
24,629
Revenue
22,606
Gross operating
margin
1,163
Hydroelectric
11,186
Hydroelectric
11,550
Alternative
energy resources
41
Alternative
energy resources
41
2014
2013
restated
Capital expenditure
285
Operations
Net electricity generation
Millions of kWh
Thermal
Hydroelectric
Other resources
Total net generation
- of which Italy
- of which Belgium
2014
2013 restated
Change
42,528
15,861
8
58,397
57,707
690
42,728
16,612
9
59,349
57,976
1,373
(200)
(751)
(1)
(952)
(269)
(683)
-0.5%
-4.5%
-11.1%
-1.6%
-0.5%
-49.7%
In 2014, net electricity generation by the Generation and
The impact of this change was only partially offset by the
Energy Management business area amounted to 58,397
rise in hydroelectric output (+700 million kWh) connected
million kWh, a decrease of 1.6% compared with 2013. The
with the improved water conditions in the period.
decrease in hydroelectric output (-751 million kWh) is lar-
Thermal generation in Italy increased by 483 million kWh,
gely due to the change in the scope of consolidation of SE
thanks to the good performance of coal-fired plants. Bel-
Hydropower (-1,451 million kWh) following the changes
gium registered a decline in the output of the Marcinelle
in governance arrangements at that company, which led
Energie plant (-683 million kWh), which until the end of
to the loss of control and a change in the method of ac-
2014 was operated through a tolling agreement, reflecting
counting for the entity from full consolidation to proportio-
the unfavorable conditions in the northern European mar-
nate consolidation, as it now qualifies as a joint operation.
ket.
38
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Contribution to gross thermal generation
Millions of kWh
High-sulfur fuel oil (S>0.25%)
Low-sulfur fuel oil (S<0.25%)
Total fuel oil
Natural gas
Coal
Other fuels
TOTAL
2014
2013 restated
Change
475
24
499
7,761
37,146
498
1.0%
0.1%
1.1%
16.9%
80.9%
1.1%
426
165
591
9,616
35,106
696
0.9%
0.4%
1.3%
20.9%
76.3%
1.5%
45,904
100.0%
46,009
100.0%
49
(141)
(92)
(1,855)
2,040
(198)
(105)
11.5%
-85.5%
-15.6%
-19.3%
5.8%
-28.4%
-0.2%
Gross thermal generation in 2014 totaled 45,904 million kWh,
in the competitiveness of conventional thermal generation in
a decline of 105 million kWh (-0.2%) compared with 2013. The
the Italian fuel mix, in an environment of falling demand for
decrease was experienced by all the major fuel types, with the
electricity as a result of the recession in Italy.
exception of coal. It was essentially connected with the decline
Net efficient generation capacity
MW
Thermal plants (1)
Hydroelectric plants
Alternative energy resources
Total
at Dec. 31, 2014 at Dec. 31, 2013 restated
Change
22,463
11,186
41
33,690
24,629
11,550
41
(2,166)
(364)
-8.8%
-3.2%
-
-
36,220
(2,530)
-7.0%
(1) Of which 5,460 MW unavailable due to long-term technical issues (3,631 MW at December 31, 2013).
Net efficient capacity in 2014 totaled 33,690 MW, a reduc-
the Ministries for the Environment and for Economic Deve-
tion of 2,530 MW on the previous year.
lopment to shut down generation assets pursuant to the
The increase in unavailability due to long-term technical
provisions of Law 290 of October 27, 2003.
issues is mainly connected with additional requests from
Performance
Millions of euro
Revenue
Gross operating margin
Operating income
Capital expenditure
2014
22,606
1,163
(1,539)
285
2013 restated
Change
22,798
1,084
493
313
(192)
79
(2,032)
(28)
-0.8%
7.3%
-
-8.9%
Revenue in 2014 amounted to €22,606 million, a decrease
les on the Power Exchange (€3,713 million), associated
of €192 million (-0.8%) compared with 2013. The decline is
with the decline in output in a market with lower ave-
mainly attributable to the following factors:
rage sales prices, was only partly offset by an increase in
> a decrease of €2,685 million in revenue from electricity
revenue from electricity sales to other domestic resellers
sales. More specifically, the reduction in revenue from sa-
(€904 million), as well as an increase in revenue from
39
electricity sales to other Group companies, notably the
> an increase of €170 million in the margin on sales and
Italian companies operating in end-user markets (€149
trading of natural gas and other commodities;
million);
> the above-mentioned gain of €50 million from the reme-
> a decrease of €811 million in revenue from trading on
asurement at fair value of the assets and liabilities of SE
international electricity markets, essentially due to the
Hydropower, partly offset by a decline in the margin as a
reduction in quantities handled (-4.3 TWh);
result of the change in the scope of consolidation of the
> an increase of €2,392 million in revenue from fuel tra-
company (€29 million);
ding, largely due to an increase in the volume of natural
> a reduction of €72 million in the generation margin, es-
gas transactions (€2,433 million);
sentially due to the decline in electricity sales prices, the ef-
> gains from the remeasurement at fair value of the as-
fects of which were only partly offset by an improvement
sets and liabilities of SE Hydropower (€50 million), to the
in the generation mix thanks to better water condition,
extent corresponding to the Group’s interest in the com-
and by an increase in the margin on green certificates;
pany, due to the loss of control following changes in that
> an increase in operating expenses, as well as the net ne-
company’s governance arrangements as from January 1,
gative impact of the measurement of outstanding com-
2014. Those gains were only partly offset by the reduc-
modity risk instruments at the end of the year.
tion of €62 million in the company’s contribution to the
revenue of the area, as a result of the change in the me-
The operating result showed a loss of €1,539 million, a
thod of consolidation noted earlier;
deterioration of €2,032 million from the income of €493
> an increase of €848 million in revenue from the sale of
million posted in 2013. The development reflects the incre-
CO2 emissions allowances and green certificates as a
result, respectively, of an increase in volumes handled
ase in impairment losses, only partly offset by a decline in
amortization and depreciation following the revision of the
(owing to greater market volatility) and the adoption of
useful lives of certain plants. More specifically, the impai-
a portfolio optimization strategy.
rment losses registered in 2014 following the impairment
The gross operating margin in 2014 totaled €1,163 mil-
million, reflecting the ongoing economic crisis in Italy and
lion, an increase of €79 million (+7.3%) on the €1,084 mil-
the adverse impact of these conditions on the conventional
lion posted in 2013. The rise is attributable to:
generation segment.
testing of the Enel Produzione CGU amounted to €2,108
Capital expenditure
Millions of euro
Power plants:
- thermal
- hydroelectric
- alternative energy resources
Total power plants
Other investments in property, plant and equipment and intangible
assets
TOTAL
2014
2013 restated
Change
187
69
1
257
28
285
210
71
5
286
27
313
(23)
(2)
(4)
(29)
1
(28)
-11.0%
-2.8%
-80.0%
-10.1%
3.7%
-8.9%
Capital expenditure amounted to €285 million, of which
construction of the new Porto Empedocle facility, sundry
€257 million in respect of power plants. The main investments
works at the Brindisi and Torrevaldaliga Nord plants, and
in 2014 included the continuation of the construction or re-
other work on the Soverzene and Gerosa plants.
furbishment of thermal plants (€187 million), including the
40
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS 3 Infrastructure and Networks
Electricity distribution network (km)
Total electricity
distribution network
1,136,667
High-voltage
lines
20
Medium-voltage
lines
350,358
Low-voltage
lines
786,289
Performance 2014 (millions of euro)
Capital expenditure
996
Revenue
7,366
Gross
operating
margin
3,979
Operations
Electricity distribution and transmission networks
High-voltage lines at year-end (km)
Medium-voltage lines at year-end (km)
Low-voltage lines at year-end (km)
20
350,358
786,289
-
349,386
782,624
Total electricity distribution network (km)
1,136,667
1,132,010
20
972
3,665
4,657
Electricity transported on Enel’s distribution network (millions of kWh) (1)
221,850
228,918
(7,068)
-
0.3%
0.5%
0.4%
-3.1%
2014
2013 restated
Change
(1) The figure for 2013 reflects a more accurate determination of amounts transported.
The electricity distribution network expanded by 4,657 km,
on the Enel network in Italy in 2014 amounted to 221,850
essentially due to new connections of customers, both end
million kWh, a decrease of 3.1% compared with the previous
users and generators, to distribution grids, although this re-
year, reflecting the decline in domestic demand.
presented a decline on the previous year. Energy transported
41
Performance
Millions of euro
Revenue
Gross operating margin
Operating income
Capital expenditure
2014
7,366
3,979
2,943
996
2013 restated
Change
7,698
4,008
3,028
1,046
(332)
(29)
(85)
(50)
-4.3%
-0.7%
-2.8%
-4.8%
Revenue in 2014 amounted to €7,366 million, a decrease of
fee equalization mechanism;
€332 million (-4.3%) on the previous year. The decline is es-
- the decline in quantities transported.
sentially due to:
These factors were only partly offset by an increase in di-
> the recognition of adjustments and revisions of estimates
stribution rates and grants from the Electricity Equaliza-
from prior years totaling €224 million;
tion Fund;
> a decrease in connection fees amounting to €100 million,
> a reduction of €103 million in connection fees from new
largely due to the year-on-year decline in the number of
customers;
connections noted above;
> an improvement (€268 million) in the margin on white
> a reduction of rate revenues amounting to €96 million,
certificates due to the cost reimbursement mechanism
largely due to the registration in 2013 of the connection
for the purchase of such certificates as a result of the
fee equalization mechanism (Resolution 607/2013 of the
changes introduced with Authority Resolution 13/2014;
Authority for Electricity, Gas and the Water System – the
> the positive adjustment of €63 million of the provisions
Authority), and to the decrease in quantities transported.
for risks and charges, carried out in early 2014, following
These factors were only partly offset by an increase in di-
the settlement agreement between Enel Distribuzione,
stribution rates as a result of the above resolution;
A2A and A2A Reti Elettriche, which provided for Enel Di-
> an increase of €81 million in grants from the Electricity
stribuzione to pay €89 million to A2A Reti Elettriche, with
Equalization Fund for the sale of white certificates.
the waiver by the latter of any further claim.
The gross operating margin amounted to €3,979 million, a
Operating income, after depreciation, amortization and im-
decrease of €29 million (-0.7%) largely attributable to:
pairment losses of €1,036 million (€980 million in 2013), tota-
> a decrease of €235 million in the margin on electricity,
led €2,943 million, a decrease of €85 million on the previous
reflecting:
year (-2.8%). The decline is largely due to the increase of €46
- the prior-year items noted earlier;
million in impairment losses on trade receivables.
- the effect of the registration in 2013 of the connection
Capital expenditure
Millions of euro
Electricity distribution networks
Other investments in property, plant and equipment and intangible assets
Total
2014
2013 restated
Change
996
-
996
997
49
1,046
(1)
(49)
(50)
-0.1%
-
-4.8%
Capital expenditure in 2014 amounted to €996 million, a
nections for customers and generation plants, only partly
decrease of €50 million on the previous year. The decrease is
offset by an increase in expenditure on service quality.
mainly accounted for by a reduction in expenditure on con-
42
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS 4 Iberia and Latin America
Net efficient generation capacity (MW)
Performance 2014 (millions of euro)
38,315
37,299
Thermal
21,405
Thermal
20,569
Nuclear
3,318
Nuclear
3,318
Revenue
30,547
Hydroelectric
13,514
Hydroelectric
13,334
Revenue
by geographical area
Gross
operating margin
6,294
Gross operating margin
by geographical area
Wind
78
2014
Wind
78
2013 restated
Electricity distribution network (km)
Total electricity
distribution
network
626,280
High-voltage
lines
31,686
Medium-voltage
lines
272,644
Low-voltage
lines
321,950
Europe
20,900
Latin
America
9,647
Europe
3,203
Latin
America
3,091
Iberia
993
Latin America
1,609
Capital expenditure
2,602
Operations
Net electricity generation
Millions of kWh
Thermal
Nuclear
Hydroelectric
Wind
Total net generation
- of which Iberian peninsula
- of which Argentina
- of which Brazil
- of which Chile
- of which Colombia
- of which Peru
2013 restated
Change
2014
62,283
24,762
42,777
158
63,472
25,892
40,379
145
129,980
129,888
69,681
14,390
5,225
18,063
13,559
9,062
68,439
15,743
4,992
19,438
12,747
8,529
(1,189)
(1,130)
2,398
13
92
1,242
(1,353)
233
(1,375)
812
533
-1.9%
-4.4%
5.9%
9.0%
0.1%
1.8%
-8.6%
4.7%
-7.1%
6.4%
6.2%
43
Net electricity generation by the Division came to 129,980
ca, conversely, net electricity output fell by 1,150 million
million kWh, an increase of 92 million kWh on 2013.
kWh, mainly due to lower thermal generation in Argentina
In particular, in 2014 net generation in the Iberian penin-
and Chile, reflecting in particular the shutdown of the Bo-
sula increased by 1,242 million kWh (+1.8%) as a result of
camina II plant, only partly offset by an increase in hydro-
greater thermal output (+9.4%), only partly offset by a de-
electric output in Chile and Colombia thanks to improved
cline in nuclear and hydroelectric output, the latter due to
water conditions.
better water conditions the previous year. In Latin Ameri-
Contribution to gross thermal generation
Millions of kWh
High-sulfur fuel oil (S>0.25%)
Natural gas
Coal
Nuclear fuel
Other fuels
Total
2014
2013 restated
Change
7,050
24,541
27,958
25,776
5,831
7.7%
26.9%
30.7%
28.3%
6.4%
7,789
24,233
27,154
26,983
6,400
8.4%
26.2%
29.3%
29.2%
6.9%
(739)
308
804
(1,207)
(569)
91,156
100.0%
92,559
100.0%
(1,403)
-9.5%
1.3%
3.0%
-4.5%
-8.9%
-1.5%
Gross thermal generation by the Division in 2014 came to
ar and fuel-oil generation, only partly offset by an increase
91,156 million kWh, a decrease of 1,403 million kWh on the
in coal and natural gas generation.
previous year (-1.5%), mainly owing to the decline in nucle-
Net efficient generation capacity
MW
Thermal
Nuclear
Hydroelectric
Wind
Total net efficient capacity
- of which Iberian peninsula
- of which Argentina
- of which Brazil
- of which Chile
- of which Colombia
- of which Peru
at Dec. 31, 2014
at Dec. 31, 2013
restated
Change
21,405
3,318
13,514
78
38,315
21,713
4,403
976
6,286
3,012
1,925
20,569
3,318
13,334
78
37,299
21,699
4,403
977
5,521
2,878
1,821
836
-
180
-
1,016
14
-
(1)
765
134
104
4.1%
-
1.3%
-
2.7%
0.1%
-
-0.1%
13.9%
4.7%
5.7%
Net efficient generation capacity at December 31, 2014
Inversiones Gas Atacama, which enable the consolidation
came to 38,315 MW, an increase of 1,016 MW on the end
of the 781 MW thermal plant in the Atacama desert.
of 2013. The rise includes the impact of the acquisition of
44
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Electricity distribution and transport networks
2014
2013 restated
Change
High-voltage lines at year-end (km)
Medium-voltage lines at year-end (km)
Low-voltage lines at year-end (km)
31,686
272,644
321,950
31,428
270,409
329,419
Total electricity distribution network (km)
626,280
631,256
Electricity transported on Enel’s distribution network (millions
of kWh)
159,512
159,704
- of which Iberian peninsula
- of which Argentina
- of which Brazil
- of which Chile
- of which Colombia
- of which Peru
96,404
14,980
19,982
13,257
8,225
6,664
98,456
14,953
18,799
13,030
8,010
6,456
258
2,235
(7,469)
(4,976)
(192)
(2,052)
27
1,183
227
215
208
0.8%
0.8%
-2.3%
-0.8%
-0.1%
-2.1%
0.2%
6.3%
1.7%
2.7%
3.2%
At December 31, 2014, the size of the electricity distribu-
kWh, a decrease of 192 million kWh, which reflects the
tion network of the Iberia and Latin America Division had
divergent developments in electricity demand in the two
decreased by 4,976 km, with an especially significant con-
areas covered by the Division: demand fell in the Iberian
traction in low-voltage lines in Spain, partly offset by the
peninsula and expanded in Latin America, especially in
expansion of the grid in the Latin American countries.
Brazil and Colombia.
Electricity transported in 2014 came to 159,512 million
Electricity sales
Millions of kWh
Free market
Regulated market
Total
- of which Iberian peninsula
- of which Argentina
- of which Brazil
- of which Chile
- of which Colombia
- of which Peru
2014
2013 restated
Change
99,819
57,217
101,806
55,565
157,036
157,371
93,928
14,980
19,982
13,257
8,225
6,664
96,123
14,953
18,799
13,030
8,010
6,456
(1,987)
1,652
(335)
(2,195)
27
1,183
227
215
208
-2.0%
3.0%
-0.2%
-2.3%
0.2%
6.3%
1.7%
2.7%
3.2%
Electricity sales to end users in 2014 amounted to 157,036
the economic crisis was only partly offset by the rise in quan-
million kWh, a decrease of 335 million kWh compared with
tities sold in Latin America (+1,860 million kWh), the conse-
2013. The contraction in quantities sold in the Iberian pe-
quence of a rise in electricity demand, with especially large
ninsula (-2,195 million kWh) owing to the continuation of
rises in Brazil and Colombia.
45
Performance
Millions of euro
Revenue
Gross operating margin
Operating income
Capital expenditure
2014
2013 restated
Change
30,547
6,294
2,789
2,602
30,674
6,638
3,767
2,160
(127)
(344)
(978)
442
-0.4%
-5.2%
-26.0%
20.5%
The table below shows performance by geographical area.
Millions of euro
Revenue
Gross operating margin
Operating income
2014
2013
restated
Change
Europe
20,900
21,123
(223)
Latin America
9,647
9,551
96
2014
3,203
3,091
2013
restated
3,195
3,443
Total
30,547
30,674
(127)
6,294
6,638
Change
8
(352)
(344)
2014
1,240
1,549
2013
restated
1,382
2,385
Change
(142)
(836)
2,789
3,767
(978)
Revenue in 2014 declined by €127 million, reflecting:
The gross operating margin amounted to €6,294 mil-
> a decrease of €223 million in revenue in Europe, largely
lion, a decrease of €344 million (-5.2%) compared with
due to:
2013, reflecting:
- the fall in electricity demand, which had an adverse im-
> an increase of €8 million in the gross operating margin in
pact on amounts generated and sold on the end-user
Europe, essentially due to the improvement in the mar-
market, against a background of lower average whole-
gin on regulated businesses (mainly attributable to extra-
sale prices and prices in end-user markets;
peninsular generation), offset by a decline in the margin
- a decrease in revenue from the transport of natural gas
on unregulated activities and the charges recognized in
owing to lower sales prices.
2014 in respect of a new early retirement incentive plan;
These factors were partly offset by an increase in grants
> a decrease of €352 million in the gross operating margin
for extra-peninsular generation (€217 million), the net
in Latin America, essentially due to:
effect of a rise in grants due to a number of changes in
- exchange rate effects totaling €294 million, largely of-
the regulatory framework in Spain and a decline in grants
fset by the improvement in the margin due to an incre-
associated with the reduction in generation;
ase in output in an environment of rising prices;
> an increase of €96 million in revenue in Latin America,
- an increase electricity provisioning costs, due in parti-
largely attributable to:
cular to the shutdown of the Bocamina II plant in Chile,
- the change in the scope of consolidation with the ac-
which forced the Group to increase its recourse to the
quisition of an additional 50% of Gas Atacama (€150
spot and pool markets to meet customer demand;
million), thereby acquiring control and consequently
- an increase in operating expenses in Argentina to cope
consolidating the company on a full line-by-line basis;
with the service interruptions caused by the heat emer-
- rate increases in various Latin American countries,
gency in early 2014, as well as a decrease in grants to
especially for distribution companies in Brazil;
Edesur under the Mecanismo de Monitoreo de Costos
- an increase in revenue from electricity sales, especially
compared with the previous year.
in Colombia and Peru owing to an increase in volumes
handled and a rise in average sales prices;
Operating income in 2014 came to €2,789 million, a de-
- adverse developments in the exchange rates of local
crease of €978 million compared with 2013, in line with
currencies against the euro, with an overall negative
the change in the gross operating margin. The increase in
impact of €1,208 million.
impairment losses in 2014 includes the impact of the im-
46
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS pairment losses on rights held by Endesa Chile to use wa-
restrictions (€589 million). Another factor was the impai-
ter resources in the region of Aysén, which were recogni-
rment losses recognized on a number of smaller conces-
zed as a result of the uncertainty about the continuation
sions held by the Group in Portugal and Spain (totaling
of the project owing to a number of legal and procedural
€66 million).
Capital expenditure
Millions of euro
Power plants:
- thermal
- hydroelectric
- nuclear
- alternative energy resources
Total power plants
Electricity distribution networks
Other investments in property, plant and equipment and
intangible assets
TOTAL
2014
2013 restated
Change
508
385
138
4
1,035
1,049
518
2,602
326
366
128
-
820
919
421
2,160
182
19
10
4
215
130
97
442
55.8%
5.2%
7.8%
-
26.2%
14.1%
23.0%
20.5%
Capital expenditure amounted to €2,602 million, an incre-
€427 million in Latin America, also including investments on
ase of €442 million on the previous year. In particular, capi-
plants operated on a concession basis). Investment in power
tal expenditure in 2014 concerned work on the distribution
plants (€1,035 million) focused primarily on the construction
network (€1,049 million, of which €502 million in Europe and
of the El Quimbo hydroelectric plant in Colombia.
47
5 International
Net efficient generation capacity (MW)
Performance 2014 (millions of euro)
14,481
14,912
Thermal
10,310
Thermal
10,742
Nuclear
1,814
Hydroelectric
2,329
Other
resources
28
2014
Nuclear
1,814
Hydroelectric
2,329
Other
resources
27
2013
restated
Electricity distribution network (km)
Total electricity
distribution
network
91,132
High-voltage
lines
6,572
Medium-voltage
lines
34,998
Low-voltage
lines
49,562
Revenue
5,278
Gross
operating
margin
1,204
Revenue
by geographical area
Gross operating margin
by geographical area
Central
Europe
2,776
South-eastern
Europe
1,008
Russia
1,494
Central
Europe
547
Russia
358
South-
eastern
Europe
299
Central Europe
665
South-eastern Europe
83
Russia
188
Capital expenditure
936
Operations
Net electricity generation
Millions of kWh
Thermal
Nuclear
Hydroelectric
Other sources
Total net generation
- of which Russia
- of which Slovakia
48
2014
2013 restated
Change
44,229
14,420
4,225
52
62,926
42,376
20,550
43,802
14,624
4,759
59
63,244
41,901
21,343
427
(207)
(534)
(7)
(318)
475
(793)
1.0%
-1.4%
-11.2%
-11.9%
-0.5%
1.1%
-3.7%
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Net efficient generation capacity (MW)
Performance 2014 (millions of euro)
14,481
14,912
Thermal
10,310
Thermal
10,742
Nuclear
1,814
Hydroelectric
2,329
Other
resources
28
2014
Nuclear
1,814
Hydroelectric
2,329
Other
resources
27
2013
restated
Electricity distribution network (km)
Total electricity
distribution
network
91,132
High-voltage
Medium-voltage
Low-voltage
lines
6,572
lines
34,998
lines
49,562
Revenue
5,278
Gross
operating
margin
1,204
Revenue
by geographical area
Gross operating margin
by geographical area
Central
Europe
2,776
South-eastern
Russia
1,494
Europe
1,008
Central
Europe
547
Russia
358
South-
eastern
Europe
299
Central Europe
665
South-eastern Europe
83
Russia
188
Capital expenditure
936
Net generation in 2014 came to 62,926 million kWh, a de-
(-534 million kWh), only partly offset by the increase in ther-
crease of 318 million kWh compared with 2013. The decline
mal generation posted by Enel Russia (formerly Enel OGK-5,
is attributable to the decrease in hydroelectric generation
+475 million kWh).
by Slovenské elektrárne compared with the previous year
Contribution to gross thermal generation
Millions of kWh
High-sulfur fuel oil (S>0.25%)
Natural gas
Coal
Nuclear fuel
Total
2014
2013 restated
Change
186
25,325
21,255
15,499
0.3%
40.7%
34.1%
24.9%
120
23,159
23,027
15,720
0.2%
37.3%
37.1%
25.4%
62,265
100.0%
62,026
100.0%
66
55.0%
2,166
(1,772)
(221)
239
9.4%
-7.7%
-1.4%
0.4%
Gross thermal generation in 2014 increased by 239 million
plants in Russia, entirely offsetting the decline in genera-
kWh, to 62,265 million kWh, compared with 62,026 mil-
tion with other resources. More specifically, the decrease
lion kWh in 2013. The rise is attributable to an increase in
in coal generation is attributable to a number of technical
natural gas generation and the output of combined-cycle
shutdowns at the Reftinskaya plant.
Net efficient generation capacity
MW
Thermal
Nuclear
Hydroelectric
Other resources
Total net efficient capacity
- of which Russia
- of which Slovakia
- of which Belgium
at Dec. 31, 2014
at Dec. 31, 2013
restated
Change
10,310
1,814
2,329
28
14,481
9,107
4,968
406
10,742
(432)
-4.0%
1,814
2,329
27
14,912
9,107
5,399
406
-
-
1
(431)
-
(431)
-
-
-
-
-2.9%
-
-8.0%
-
Net efficient generation capacity decreased by 431 MW in 2014, attributable to the decommissioning of one of the
units of the Vojany coal-fired plant in Slovakia.
Electricity distribution and transport networks
High-voltage lines at year-end (km)
Medium-voltage lines at year-end (km)
Low-voltage lines at year-end (km)
Total electricity distribution network (km)
Electricity transported on Enel’s distribution network (millions of kWh)
2014
2013 restated
Change
6,572
34,998
49,562
91,132
14,063
6,586
34,923
49,397
90,906
13,996
(14)
75
165
226
67
-0.2%
0.2%
0.3%
0.2%
0.5%
49
At December 31, 2014 the size of the electricity distri-
voltage connections installed during the year.
bution network (located entirely in Romania) showed
Electricity transported increased by 0.5%, going from
an increase of 226 km, largely attributable to new low-
13,996 million kWh to 14,063 million kWh in 2014.
Electricity sales
Millions of kWh
Free market
Regulated market
Total
- of which Romania
- of which France
- of which Slovakia
2014
2013 restated
Change
10,410
13,737
5,926
7,210
(3,327)
(1,284)
16,336
20,947
(4,611)
8,156
3,442
4,738
8,754
8,068
4,125
(598)
(4,626)
613
-24.2%
-17.8%
-22.0%
-6.8%
-57.3%
14.9%
Electricity sold by the
International Division
in 2014
ket, which has been fully operational since the start of
amounted to 16,336 million kWh, a decrease of 4,611 mil-
2014;
lion kWh (-22.0% compared with 2013). The decline is attri-
> a decrease of 4,626 million kWh in sales by Enel France,
butable to:
largely attributable to the decline in volumes of availa-
> a reduction of 598 million kWh in sales in Romania, re-
ble capacity;
flecting the gradual liberalization of the business mar-
> an increase of 613 million kWh in sales in Slovakia.
Performance
Millions of euro
Revenue
Gross operating margin
Operating income
Capital expenditure
The table below shows performance by geographical area.
2014
5,278
1,204
(2,682)
936
2013 restated
Change
6,296
1,293
(23)
924
(1,018)
(89)
(2,659)
12
-16.2%
-6.9%
-
1.3%
Gross operating margin
Operating income
Millions of euro
Central Europe
South-eastern Europe
Russia
Total
Revenue
2013
restated
3,488
1,116
1,692
2014
2,776
1,008
1,494
Change
2014
(712)
(108)
(198)
547
299
358
2013
restated
605
289
399
Change
2014
(2,676)
195
(201)
(58)
10
(41)
(89)
2013
restated
360
154
(537)
Change
(3,036)
41
336
5,278
6,296
(1,018)
1,204
1,293
(2,682)
(23)
(2,659)
Revenue in 2014 amounted to €5,278 million, a decrease
pe, largely attributable to the fall in revenue in Slovakia
of €1,018 million on the previous year (€6,296 million). This
(-€397 million), as a result of lower sales prices, and in
performance reflected the following factors:
France (-€315 million), as a result of the reduction in the
> a decrease of €712 million in revenue in central Euro-
volume of available capacity;
50
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS
> a decrease of €198 million in revenue in Russia, reflecting
against the euro was only partially offset by an increase
the sharp depreciation of the ruble against the euro. This
in average sales prices for electricity;
factor entirely offset the increase in sales revenue in local
> an increase of €10 million in the gross operating margin
currency as a result of an increase in sales prices on the
in south-eastern Europe, mainly due to lower operating
electricity market;
expenses in Romania.
> a decrease of €108 million in revenue in south-eastern
Europe, entirely attributable to Romania as a result of the
The operating result in 2014 showed a loss of €2,682 mil-
decline in prices on the free market.
lion, a deterioration of €2,659 million on the previous year
after an increase of €2,570 million in depreciation, amor-
The gross operating margin amounted to €1,204 million,
tization and impairment losses. The latter development is
a decrease of €89 million on 2013 (€1,293 million). The fall
largely attributable to the impairment loss recognized on
is associated with the following factors:
Slovenské elektrárne (€2,878 million) to align the carrying
> a decrease of €58 million in the gross operating margin in
amount of its assets with their estimated realizable value,
central Europe, attributable in part to generation in Slo-
as determined on the basis of the non-binding offers recei-
vakia (-€171 million), the result of a contraction in output
ved so far. Another factor was the impairment loss on the
and lower electricity prices. The decline was offset by the
goodwill and plant assets of the Enel Russia CGU (formerly
impact of the recognition in 2013 of provisions for risks
Enel OGK-5) to reflect the expected contraction in future
and charges in respect of litigation concerning a number
cash flows as a result of the persistent signs of slowing in
of investments in foreign entities and by the improve-
economic growth and the consequent contraction in fore-
ment in the margin in France;
cast price growth in the medium term (equal to €365 mil-
> a decrease of €41 million in the gross operating margin in
lion in 2014 and €744 million in 2013).
Russia, where the impact of the depreciation of the ruble
Capital expenditure
Millions of euro
Power plants:
- thermal
- hydroelectric
- nuclear
Total power plants
Electricity distribution networks
Other investments in property, plant and equipment and
intangible assets
TOTAL
2014
2013 restated
Change
189
6
649
844
70
22
936
196
7
594
797
96
31
924
(7)
(1)
55
47
-3.6%
-14.3%
9.3%
5.9%
(26)
-27.1%
(9)
12
-29.0%
1.3%
Capital expenditure amounted to €936 million, an increa-
a decrease in investment in electricity distribution plants in
se of €12 million on the previous year, largely reflecting an
Romania and a reduction in expenditure on power plants in
increase in nuclear expenditure in Slovakia, partly offset by
Russia.
51
6 Renewable Energy
Net efficient generation capacity (MW)
Total
renewable
energy
9,626
Hydroelectric
2,624
Geothermal
833
Wind
5,696
Other resources
473
Performance 2014 (millions of euro)
Revenue
by geographical area
Gross operating margin
by geographical area
Europe
1,988
Latin
America
537
North
America
396
Europe
1,460
Latin
America
202
North
America
276
Europe
399
Latin America
927
North America
332
Capital expenditure
1,658
Revenue
2,921
Gross
operating
margin
1,938
Operations
Net electricity generation
Millions of kWh
Hydroelectric
Geothermal
Wind
Other resources
Total
- of which Italia
- of which Iberian peninsula
- of which France
- of which Greece
- of which Romania and Bulgaria
- of which United States and Canada
- of which Panama, Mexico, Guatemala and Costa Rica
- of which Brazil and Chile
- of which other countries
2014
11,452
5,954
13,896
496
31,798
14,117
4,359
347
488
1,351
6,674
2,904
1,550
8
2013 restated
Change
10,921
5,581
12,086
710
29,298
13,225
4,792
362
566
1,166
5,360
2,703
1,124
-
531
373
1,810
(214)
2,500
892
(433)
(15)
(78)
185
1,314
201
426
8
4.9%
6.7%
15.0%
-30.1%
8.5%
6.7%
-9.0%
-4.1%
-13.8%
15.9%
24.5%
7.4%
37.9%
-
Net electricity generation by the Division came to 31,798
year. Of the total increase, 1,608 million kWh is attributa-
million kWh in 2014, up 2,500 million kWh on the previous
ble to greater generation abroad, mainly due to greater
52
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS
wind generation in the United States (+1,481 million kWh,
conditions) and a contraction in hydroelectric output in the
associated with the consolidation of Buffalo Dunes Wind
United States (-147 million kWh). Power generation in Italy
Project), in Chile (+306 million kWh, as a result of the increa-
increased by 892 million kWh in 2014, reflecting the rise in
se in installed capacity), in Romania (+162 million kWh) and
hydroelectric output (+638 million kWh, thanks to more
in Mexico (+111 million kWh). These factors were only partly
favorable water conditions) and geothermal output (+247
offset by a reduction in wind generation in the Iberian pe-
million kWh).
ninsula (-218 million kWh, owing to less favorable weather
Net efficient generation capacity
MW
Hydroelectric
Geothermal
Wind
Other resources
Total
- of which Italy
- of which Iberian peninsula
- of which France
- of which Greece
- of which Romania and Bulgaria
- of which United States and Canada
- of which Panama, Mexico, Guatemala and Costa Rica
- of which Brazil and Chile
- of which other countries
at Dec. 31, 2014
at Dec. 31, 2013
restated
Change
2,624
833
5,696
473
9,626
3,133
1,836
-
290
576
2,623
795
5,085
310
8,813
3,057
1,857
186
290
576
2,083
1,683
816
882
10
715
449
-
1
38
611
163
813
76
(21)
(186)
-
-
400
101
433
10
-
4.8%
12.0%
52.6%
9.2%
2.5%
-1.1%
-
-
-
23.8%
14.1%
96.4%
-
Total net efficient capacity showed an increase of 813 MW,
a number of solar plants in Chile and Italy. Finally, the incre-
of which 737 MW outside of Italy. More specifically, the in-
ase in net installed geothermal capacity mainly regards a
crease in net installed wind capacity mainly regards new
number of plants in Italy.
plants in the United States (400 MW), Brazil (198 MW), Me-
These factors were partly offset by the disposal of Enel Gre-
xico (100 MW) and Chile (99 MW). The increase in genera-
en Power France in December 2014, which led to the de-
tion from other resources reflects the entry into service of
consolidation of 186 MW in France.
Performance
Millions of euro
Revenue
Gross operating margin
Operating income
Capital expenditure
2014
2013 restated
Change
2,921
1,938
1,124
1,658
2,769
1,780
1,205
1,294 (1)
152
158
(81)
364
5.5%
8.9%
-6.7%
28.1%
(1) The figure for 2013 does not include €1 million in investments regarding units classified as “held for sale”.
53
The table below shows performance by geographical area.
Millions of euro
Revenue
Gross operating margin
Operating income
Europe
Latin America
North America
Total
2014
2013
restated
1,988
1,998
537
396
407
364
Change
2014
2013
restated
Change
2014
2013
restated
Change
(10)
130
32
1,460
1,331
202
276
203
246
129
(1)
30
833
142
149
926
140
139
(93)
2
10
2,921
2,769
152
1,938
1,780
158
1,124
1,205
(81)
Revenue increased by €152 million (5.5%), going from
The gross operating margin amounted to €1,938 million,
€2,769 million to €2,921 million. The change reflects:
up €158 million (8.9%) compared with 2013. The change is
> an increase of €130 million in revenue in Latin America,
attributable to:
due to the increase in output, mainly in Chile, Mexico and
> an increase of €129 million in the margin posted in Euro-
Brazil;
pe; excluding the non-recurring items mentioned under
> an increase of €32 million in revenue in North America;
revenue, the gross operating margin would have decli-
excluding the financial impact (gains and remeasure-
ned by €41 million, largely due to the fall in prices in Italy
ment at fair value) of the disposal of shareholdings in the
and Spain, partly offset by the recognition of the indem-
two periods considered, revenue would have increased
nity provided for in the off-take agreement with Sharp
by €64 million, mainly due to the increase in generation;
concerning the purchase of the entire output of 3SUN;
> a decrease of €10 million in revenue in Europe; excluding
> a rise of €30 million for the North American area; exclu-
the proceeds from the disposal of shareholdings during
ding the non-recurring items discussed under revenue,
the final Quarter of 2014, the decrease would have been
the margin would have increased by €62 million, in line
€180 million, largely due to:
with developments in revenue.
- a decline of €63 million in revenue from the sale of pho-
tovoltaic panels in Italy as a result of the exit from the
Operating income amounted to €1,124 million, a decrease
scope of consolidation of Enel.si following its sale to the
of €81 million, after an increase in depreciation, amortization
Sales Italy business in the 2nd Half of 2013. This factor
and impairment losses of €239 million, largely due to the en-
was partly offset by the recognition of the indemnity
try into service of new plants and the impairment losses re-
provided for in the off-take agreement with Sharp con-
cognized following the impairment testing of the Enel Green
cerning the purchase of the entire output of 3SUN;
Power Hellas CGU.
- a decrease in revenue from electricity sales in the Ibe-
rian peninsula as a result of the regulatory changes in-
troduced in Spain with Royal Decree Law 9/2013.
54
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Capital expenditure
Millions of euro
Power plants:
- hydroelectric
- geothermal
- alternative energy resources
Total power plants
Other investments in property, plant and equipment and
intangible assets
TOTAL
2014
2013 restated
Change
196
169
1,251
1,616
42
1,658
109
226
923
1,258
36
1,294 (1)
87
(57)
328
358
6
364
79.8%
-25.2%
35.5%
28.5%
16.7%
28.1%
(1) The figure for 2013 does not include €1 million in investments regarding units classified as “held for sale”.
Capital expenditure in 2014 amounted to €1,658 million,
(€77 million); photovoltaic plants in Chile (€198 million);
an increase of €364 million on the previous year.
hydroelectric plants in Italy, Brazil, Costa Rica, Guatemala,
Investments mainly regarded wind farms in Latin America
Chile and the United States (€196 million) and geothermal
(€601 million), North America (€313 million) and Europe
plants in Italy and North America (€169 million).
55
7 Other, eliminations and adjustments
Operations
Hydrocarbon reserves and annual output
Hydrocarbon reserves:
Proven reserves (1P) of hydrocarbons at the end of the year (millions of barrels of
oil equivalent)
- of which proven reserves (1P) of natural gas at the end of the year (billions of m3)
Proven and probable reserves (2P) of hydrocarbons at the end of the year (millions
of barrels of oil equivalent)
- of which proven and probable reserves (2P) of natural gas at the end of the year
(billions of m3)
Annual output:
Hydrocarbon output (millions of barrels of oil equivalent)
- of which natural gas (billions of m3)
2014
2013 restated
Change
18
2
46
6
-
-
18
2
46
6
29
3.9
-
-
-
-
(29)
(3.9)
In 2012, the Upstream Gas function initiated the process
at the end of 2014 are located:
of certifying the reserves of the assets it had under deve-
> in Algeria, where the Group, through Enel Trade, holds
lopment, for which the function used an independent
a stake of 18.4% of the “Isarene” permit in partnership
certifier, DeGolyer & McNaughton. On the basis of the as-
with Petroceltic International and Sonatrach (an Alge-
sessment performed in 2012 and taking account of the di-
rian state-owned company);
sposal of the stake held in SeverEnergia in 2013, Enel’s sha-
> in Italy, where the Group, through Enel Longanesi Deve-
re in 2014 is equal to 18 million barrels of oil equivalent of
lopment, holds 33.55% of the hydrocarbon extraction
proven reserves and 46 million barrels of oil equivalent of
permit at Bagnacavallo.
proven and probable reserves. Projects under development
Performance
Millions of euro
Revenue (net of eliminations)
Gross operating margin
Operating income
Capital expenditure
2014
2,013
98
(3)
113
2013 restated
Change
2,885
1,022
908
84
(872)
(924)
(911)
29
-30.2%
-90.4%
-
34.5%
Revenue, net of eliminations, amounted to €2,013 mil-
in SeverEnergia, recognized in 2013 (capital gain of €964
lion in 2014, a decrease of €872 million on the previous
million) and in 2014 (income of €82 million from the price
year (-30.2%). Excluding the gains from the disposal of
adjustment under the earn-out clause of the sale contract
Artic Russia, and indirectly the interest held by the latter
with the buyer), revenue would have increased by €10 mil-
56
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS
lion compared with 2013. The performance is essentially
provisions for the transition-to-retirement plan following
attributable to:
its termination in September 2013, only partly offset by the
> an increase of €34 million in revenue from engineering
provision for the obligations assumed in implementation
activities, largely attributable to activities at the Porto
of Article 4, paragraphs 1-7 ter, of Law 92/2012 (the “For-
Empedocle regasification terminal and the Brindisi plant,
nero Act”), and to the contraction in margins on a number
as well as environmental upgrading at the Litoral de Al-
of services provided to other Group Divisions.
meria coal-fired plant;
> a decrease in revenue in the Services and other activities
The operating result in 2014 showed a loss of €3 million,
area, mainly associated with the support and staff servi-
a deterioration of €911 million compared with 2013, ta-
ces provided to the other Group companies.
king account of the effects of the sale of Artic Russia and a
reduction of €13 million in depreciation, amortization and
The gross operating margin in 2014 amounted to €98
impairment losses.
million, a decrease of €924 million compared with 2013,
largely due to the dual impact of the disposal of Artic Rus-
sia discussed above. Excluding this factor, the gross ope-
Capital expenditure
rating margin declined by €42 million. The contraction is
Capital expenditure in 2014 amounted to €113 million,
largely attributable to the effect of the recognition in 2013
an increase of €29 million compared with 2013, mainly as-
of lower personnel costs connected with the reversal of
sociated with software development.
57
Performance and financial position
of Enel SpA
Performance
The following table summarizes the performance of Enel SpA in 2014 and 2013.
Millions of euro
Revenue
Revenue from services
Other revenue and income
Total
Costs
Electricity purchases and consumables
Services, leases and rentals
Personnel
Other operating expenses
Total
Gross operating margin
Depreciation, amortization and impairment losses
Operating income
Net financial income/(expense) and income from equity investments
Income from equity investments
Financial income
Financial expense
Total
Income before taxes
Income taxes
NET INCOME FOR THE YEAR
2014
2013
Change
245
1
246
2
185
120
19
326
(80)
543
(623)
1,818
2,412
3,331
899
276
(282)
558
269
6
275
6
230
90
14
340
(65)
9
(74)
2,028
1,812
2,602
1,238
1,164
(208)
1,372
(24)
(5)
(29)
(4)
(45)
30
5
(14)
(15)
534
(549)
(210)
600
729
(339)
(888)
(74)
(814)
Revenue from services totaled €245 million (€269 million
million on the previous year. The item is essentially compo-
in 2013) and essentially regards services provided to subsi-
sed of the rebilling of costs for the personnel of Enel SpA
diaries as part of Enel SpA’s direction and coordination fun-
seconded to other Group companies.
ctions and the rebilling of costs incurred by Enel SpA but
pertaining to the subsidiaries.
Costs
for electricity purchases and consumables
The decrease of €24 million is mainly attributable to a de-
amounted to €2 million in 2014. They are entirely accounted
cline in pass-through rebilling of a number of Group com-
for by purchases of materials, whereas in 2013 they inclu-
panies for costs in respect of business combinations and
ded the second revision of prices in the long-term import
corporate reorganizations, as well as a reduction in revenue
contract with Alpiq, which, although it expired on Decem-
from management fees and in revenue from services provi-
ber 31, 2011, provided for that revision to take place within
ded to the subsidiaries.
three years of the invoice date (€4 million).
Other revenue and income came to €1 million, down €5
Costs for services, leases and rentals amounted to €185
58
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS
million in 2014, of which charges from third parties in the
The operating result showed a loss of €623 million, a dete-
amount of €127 million and from Group companies in the
rioration of €549 million on 2013.
amount of €58 million. The costs attributable to third par-
ties mainly regarded communication expenses, technical
Income from equity investments amounted to €1,818
and professional services as well as strategic, management
million. The item regards dividends approved in 2014 by
and corporate organization consulting. Those in respect of
subsidiaries, associates and other companies and shows a
services provided by Group companies regard IT and admi-
decrease of €210 million on the previous year (€2,028 mil-
nistrative services and purchasing, as well as rental income
lion in 2013), largely due to the reduction in dividends distri-
and personnel training received from Enel Italia Srl, and
buted by Enel Distribuzione SpA (€252 million).
costs for the personnel of a number of Group companies
seconded to Enel SpA. The total decrease compared with
Net financial expense amounted to €919 million and es-
2013 amounted to €45 million and is attributable to lower
sentially reflects interest expense on financial debt (€1,038
costs in respect of services rendered by non-Group counter-
million) and net costs on interest rate derivatives (€81 mil-
parties (€24 million) and a reduction in costs in respect of
lion), offset by interest and other income on financial assets
services rendered by Group companies (€21 million).
(totaling €212 million).
Personnel costs totaled €120 million in 2014, an increase of
lion, mainly reflecting the joint impact of an increase in inte-
€30 million on the previous year. The rise is essentially attri-
rest and other expense on financial debt (€71 million) and a
butable to the increase in “wages and salaries” and the as-
reduction in interest and other income on current and non-
sociated social security contributions (a total of €12 million),
current financial assets (€40 million), attributable to chan-
The increase on the previous year amounted to €129 mil-
the increase in early retirement incentives (€6 million) and
ges in the debt and in interest rates.
in charges for the “Long Term Incentive Plan” (€4 million),
as well as the impact of the recognition in 2013 of the re-
Income taxes showed a tax receivable of €282 million,
lease of provisions for the transition-to-retirement plan (€6
mainly due to the reduction in taxable income for IRES pur-
million).
poses, as a result of the exclusion of 95% of dividends re-
ceived from subsidiaries. The estimate of income taxes also
Other operating expenses amounted to €19 million in
takes account of the deductibility of Enel SpA interest ex-
2014, up €5 million compared with 2013, essentially due to
pense for the Group’s consolidated taxation mechanism in
a reduction in releases of the provision for litigation.
accordance with corporate income tax law (Article 96 of the
The gross operating margin was a negative €80 million, a
the difference between the two years in the amount of divi-
deterioration of €15 million on the previous year.
dends received from subsidiaries and the non-deductibility
Uniform Income Tax Code). This essentially reflected both
Depreciation, amortization and
impairment
losses
ting the requirements of Article 87 of the Uniform Income
of impairment losses on equity investments in 2014 mee-
amounted to €543 million in 2014, up €534 million on the
Tax Code.
previous year. The rise is largely attributable to the impai-
rment loss recognized on the interest in Enel Produzione
Net income for the year totaled €558 million, compared
SpA (€512 million) and in Enel Ingegneria e Ricerca SpA (€19
with €1,372 million the previous year.
million) as well as greater amortization and depreciation.
59
Analysis of financial position
Millions of euro
Net non-current assets:
- property, plant and equipment and intangible assets
- equity investments
- net other non-current assets/(liabilities)
Total
Net current assets:
- trade receivables
- net other current assets/(liabilities)
- trade payables
Total
Gross capital employed
Provisions:
- post-employment and other employee benefits
- provisions for risks and charges and net deferred taxes
Total
Net capital employed
Shareholders’ equity
NET FINANCIAL DEBT
at Dec. 31, 2014
at Dec. 31, 2013
Change
19
38,754
(299)
38,474
132
(533)
(139)
(540)
20
39,289
(500)
38,809
216
(433)
(212)
(429)
37,934
38,380
(302)
115
(187)
37,747
25,136
12,611
(336)
126
(210)
38,170
25,867
12,303
(1)
(535)
201
(335)
(84)
(100)
73
(111)
(446)
34
(11)
23
(423)
(731)
308
Net non-current assets amounted to €38,474 million, a de-
of tax authorities for the IRES of companies participating
cline of €335 million. The change is essentially the net result
in the consolidated taxation mechanism (€533 million),
of:
partly offset by an increase in the income tax receivables
> a decrease of €535 million attributable to the impairment
of Enel SpA (€371 million);
of equity investments in Enel Produzione SpA (€512 mil-
> a decrease of €73 million in trade payables.
lion), Enel Ingegneria e Ricerca SpA (€19 million) and El-
cogas SA (€4 million);
Net capital employed at December 31, 2014 came to
> a decrease of €201 million in “net other non-current liabi-
€37,747 million, funded by shareholders’ equity of €25,136
lities”, essentially due to the increase in the value of non-
million and net financial debt of €12,611 million.
current derivatives (€624 million), partly offset by a rise in
the value of derivatives classified as non-current liabilities
Shareholders’ equity came to €25,136 million at Decem-
(€386 million).
ber 31, 2014, a decrease of €731 million on the previous
year. The change is attributable to the distribution of the
Net current assets came to a negative €540 million, an in-
dividend for 2013 of €1,223 million (€0.13 per share) and
crease of €111 million on the negative €429 million at De-
the recognition of net income for the year of €492 million
cember 31, 2013. The change is attributable to:
(including a loss recognized directly in equity of €66 million,
> a decrease of €84 million in trade receivables from Group
largely attributable to the change, net of tax effects, of the
companies, largely attributable to the improvement in
reserve for cash flow hedge derivatives).
the invoicing and collection process and to the decline
in revenues from management fees and for service acti-
Net financial debt came to €12,611 million at the end of
vities;
the year, with a debt/equity ratio of 50.2% (47.5% at the
> an increase of €100 million in “net other current liabili-
end of 2013).
ties”, mainly in respect of the debtor position in respect
60
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS
Analysis of the financial structure
Net financial debt and changes in the period are detailed in the table below.
Millions of euro
Long-term debt:
- bonds
Long-term debt
- financial receivables from others
- debt assumed and loans to subsidiaries
Net long-term debt
Short-term debt/(liquidity):
- short-term portion of long-term borrowings
- short-term bank borrowings
- short-term debt due to Group companies
- cash collateral received
Short-term debt
- short-term portion of loans assumed/granted
- short-term loans to Group companies
- other short-term financial receivables
- cash collateral paid
- net short-term financial position with Group companies
- cash and cash equivalents and short-term securities
Net short-term debt/(liquidity)
NET FINANCIAL DEBT
at Dec. 31, 2014
at Dec. 31, 2013
Change
17,288
17,288
(4)
(117)
17,167
2,363
3
500
423
3,289
-
-
(3)
(672)
(198)
(6,972)
(4,556)
12,611
17,764
17,764
(5)
(117)
17,642
1,061
4
-
118
1,183
(21)
(500)
-
(1,018)
(1,860)
(3,123)
(5,339)
12,303
(476)
(476)
1
-
(475)
1,302
(1)
500
305
2,106
21
500
(3)
346
1,662
(3,849)
783
308
Net financial debt at December 31, 2014 amounted to
> the repayment of €500 million by the subsidiary Enel Fi-
€12,611 million, an increase of €308 million, the result of a
nance International NV on the Intercompany Revolving
decrease in the net short-term creditor position (€783 mil-
Facility Agreement granted by Enel SpA in 2013;
lion) and a decrease in net long-term financial debt (€475
> drawings on the Intercompany Short Term Deposit Agre-
million).
ement (a short-term credit facility with Enel Finance In-
The main transactions in 2014 impacting debt can be sum-
ternational NV) in the amount of €500 million.
marized as follows:
> the issue of two hybrid bonds in the total amount of
Cash and cash equivalents amounted to €6,972 million,
€1,602 million;
an increase on December 31, 2013 of €3,849 million, due
> the repayment of a retail bond issued in 2007 in the
mainly to the impact on the central treasury of the extraor-
amount of €1,000 million;
dinary corporate transactions associated with the optimiza-
> the repayment of two tranches of the Ina and Ania bonds
tion of the corporate structure of the Group, as well lower
and the repurchase of own bonds in the total amount of
tax payments in 2014.
€103 million;
61
Cash flows
Millions of euro
Cash and cash equivalents at the start of the year
Cash flows from operating activities
Cash flows from investing/disinvesting activities
Cash flows from financing activities
Cash and cash equivalents at the end of the year
2014
3,123
926
(11)
2,934
6,972
2013
6,461
1,669
(113)
(4,894)
3,123
Change
(3,338)
(743)
102
7,828
3,849
Cash flows from operating activities came to a positive €926
Cash flows in respect of financing activities were a positi-
million (€1,669 million in 2013). The change is essentially
ve €2,934 million (a negative €4,894 million in 2013). They
attributable to dividends from subsidiaries, partially offset
were generated by the transactions discussed earlier under
by balance of interest paid and collected and payments on
net financial debt.
account of IRES on behalf of all Group companies participa-
ting in the consolidated taxation mechanism.
In 2014, the cash flows generated by operating activities
Cash flows from investing activities were a negative €11
activities, increased cash and cash equivalents by €3,849
million (a negative €113 million in 2013). They essentially
million. Consequently, cash and cash equivalents at Decem-
regard investments in property, plant and equipment and
ber 31, 2014 amounted to €6,972 million, compared with
intangible assets.
€3,123 million at the start of the year.
and financing activities, as well as those used by investing
62
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS
Significant events in 2014
8
January
Issue of hybrid financial
instruments
> £500 million maturing on September 15, 2076, issued at
a price of 99.317 with an annual fixed coupon of 6.625%
(swapped into euros at a rate of about 5.60%) until the
first early redemption date set for September 15, 2021.
As from that date and until maturity, the rate will be
In execution of the resolution of the Board of Directors of
equal to the 5-year GBP swap rate plus a spread of 408.9
Enel of May 7, 2013, on January 8, 2014, Enel launched a
basis points and interest rate step-ups of 25 basis points
multi-tranche issue of non-convertible bonds for institutio-
from September 15, 2026 and an additional 75 basis
nal investors on the international market in the form of su-
points from September 15, 2041.
bordinated hybrid instruments with an average maturity of
The offering was led by a syndicate of banks comprising, for
about 61 years, denominated in euros and pounds sterling,
the euro tranche, Banca Imi, Banco Bilbao Vizcaya Argen-
in the total amount of approximately €1.6 billion.
taria SA, BNP Paribas, Crédit Agricole-CIB, Deutsche Bank,
The issue forms part of the measures to strengthen the fi-
ING, J.P. Morgan, Mediobanca, Natixis, Société Générale
nancial structure of the Enel Group set out in the business
Corporate & Investment Banking, UniCredit Bank, and, for
plan presented to the financial community on March 13,
the sterling tranche, Barclays, BNP Paribas, Deutsche Bank,
2013.
HSBC, J.P. Morgan, The Royal Bank of Scotland, Santander
The transaction was structured in the following two tran-
Global Banking & Markets, UBS Investment Bank.
ches:
> €1,000 million maturing on January 15, 2075, issued at a
price of 99.368 with an annual fixed coupon of 5% until
the first early redemption date set for January 15, 2020.
As from that date and until maturity, the rate will be
equal to the 5-year euro swap rate plus a spread of 364.8
13
January
Agreement for the development
of geothermal generation and
smart grids in Mexico
basis points and interest rate step-ups of 25 basis points
On January 13, 2014, Enel signed a memorandum of under-
from January 15, 2025 and a further 75 basis points from
standing with the Instituto de Investigaciones Eléctricas, the
January 15, 2040;
Mexican electricity research body, aimed at cooperation in
63
geothermal generation as well as smart grids. Through this
agreement the two parties will cooperate to exchange infor-
mation and experiences regarding smart grids and geother-
mal generation by means of pilot projects, training programs
and technology transfers in the respective areas of interests.
24
March
Enel Green Power receives a
€153 million loan from Banco
Santander
The Mexican government aims at implementing smart grids
On March 24, 2014, Enel Green Power, acting through its
projects in the country to improve efficiency and the quality
Dutch subsidiary Enel Green Power International BV, sig-
of the service. This will be accompanied by diversification of
ned a €153 million loan agreement with Banco Santander
power generation as a key to strengthening the security of
as lender and sole agent. The agreement is covered by the
the supply by increasing the contribution of renewables to
Spanish Export Credit Agency (“CESCE”). The 12-year term
the country’s energy mix.
loan bears an interest rate in line with the market bench-
14
January
Acquisition of an additional
15.18% stake in Coelce
As part of the reorganization of equity investments in Latin
America following the Enersis capital increase in 2013, on
mark and is intended to finance investments in wind farms
located in Mexico.
8
April
Memorandum of understanding
with State Grid Corporation of
China
January 14, 2014, Enersis, the Chilean subsidiary of the Enel
On April 8, 2014, Enel signed a memorandum of understan-
Group, launched a friendly tender offer for about 42% of
ding in Beijing with State Grid Corporation of China, the
Companhia Energética do Ceará (“Coelce”), which opera-
world’s largest power distribution and transmission com-
tes in the electricity distribution sector in Brazil, of which it
pany and the Chinese leader in the sector. The agreement
already indirectly holds about 58%. After the conclusion of
focuses on cooperation in the field of smart grid technolo-
the offering period, on February 17, 2014, Enersis had ac-
gies for sustainable urban development and the exchange
quired an additional 15.13% of Coelce on Brazil’s Bovespa
of experience in renewables generation.
exchange, for about $242 million (€176 million). For ordina-
ry shares only, in accordance with Brazilian law, the offer re-
mained open for a further 90 days in order to give sharehol-
ders who did not take up the offer the time they need to
decide. Taking account of additional purchases, the number
of shares held by Enersis at the close of the offering period
8
April
Contracts to supply gas from the
United States
equaled 15.18% of the Brazilian company’s share capital, at
On April 8, 2014, Enel signed two 20-year contracts with
a total cost of €180 million.
Corpus Christi Liquefaction, a subsidiary of Cheniere Ener-
15
January
Price adjustment in the disposal
of Artic Russia
gy, for the supply of LNG (liquefied natural gas) from shale
gas fields in the United States, for a total of 3 billion cubic
meters a year, of which 2 billion cubic meters for the Ibe-
rian market and about 1 billion cubic meters for the Italian
market. Thanks to the agreements, Enel has increased the
diversification and flexibility of its gas supply portfolio for
On January 15, 2014, Eni announced the sale of its 60%
the coming years.
stake in Artic Russia, held through Eni International, to the
Both contracts have a term of 20 years, with an option for a
Russian company Yamal Development. Considering the
further 10 years, with the agreements taking force as from
agreements signed by Itera and the Enel Group prior to the
the first deliveries, which are expected to begin in 2018.
completion of the sale of Enel’s 40% stake in Artic Russia,
The gas will be supplied as LNG, on a free on board (FOB)
the Group asked Itera to adjust the price of Artic Russia by
basis, therefore with full flexibility of destination, at the
around $112 million, which was collected on July 11, 2014.
Corpus Christi terminal that Cheniere Energy is building on
the Texas coast, an area that is closely integrated with the
64
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS country’s main gas pipelines. From there, the fuel will be
Regulatory Commission. Enel Green Power North America
transported to the Group’s regasification facilities.
therefore holds 75% of the “Class A” shares of the company
22
April
Acquisition of an additional 50%
of Inversiones Gas Atacama
operating the wind farm, while the GE Capital subsidiary re-
tains a 25% stake.
The Buffalo Dunes wind farm, located in Kansas, has been
operational since December 2013 and was the largest wind
project in the United States to start operation last year. The
plant required a total investment of about $370 million and
On April 22, 2014, Endesa Chile completed the acquisition
is supported by a long-term power purchase agreement.
of 50% of Inversiones Gas Atacama from Southern Cross for
In July 2013, Enel Green Power North America Development
a total of $309 million (around €224 million). As a result of
and EFS Buffalo Dunes had signed a capital contribution
this acquisition, which terminated the shareholders’ agree-
agreement with a consortium headed by JPM Capital Cor-
ment signed by the two partners in August 2007, the Group
poration, together with Wells Fargo Wind Holdings LLC,
indirectly holds 100% of the Chilean company (previously
Metropolitan Life Insurance Company and State Street Bank
it held 50%), with a book value equal to €174 million. The
and Trust Company, obtaining financing of about $260 mil-
purchase price also includes loans granted to Atacama Paci-
lion for the project.
fic Energy Finance (a subsidiary of Southern Cross), which at
the transaction date amounted to about $29 million (about
€22 million). Inversiones Gas Atacama operates a 781-MW
thermal plant in northern Chile, a gas pipeline between the
cities of Mejillones and Taltal and another pipeline that con-
15
May
nects Chile with Argentina.
Enel Green Power and IFC sign a
$200 million loan agreement for
the development of renewables
in Brazil
30
April
Acquisition of an additional 39%
of Generandes Perú
On May 15, 2014, Enel Green Power, acting through its Bra-
zilian subsidiary Enel Brasil Participações Ltda, the holding
company for the Brazilian subsidiaries of the Enel Green Po-
wer group, and IFC, a member of the World Bank Group,
signed a $200 million loan agreement. The loan will help
finance the construction of over 300 MW of wind plants in
On April 30, 2014, the Chilean subsidiary Enersis signed a
the states of Bahia, Pernambuco and Rio Grande do Norte,
contract to purchase 39% of the share capital of Generandes
located in north-eastern Brazil.
Perú (which in turn holds 54.2% of Edegel) from Inkia Ame-
The IFC 10-year term loan bears an interest rate in line with
ricas Holding Limited for $413 million (around €300 million).
the market benchmark and is secured by a parent company
guarantee issued by Enel Green Power.
12
May
Acquisition of control of the
Buffalo Dunes wind farm
On May 12, 2014, Enel Green Power North America (“EGP
11
June
Memorandum of understanding
with leading Chinese electricity
companies
NA“) signed an agreement to purchase an additional 26%
On June 11, 2014, Enel signed two agreements with the he-
of the “Class A” shares of Buffalo Dunes Wind Project LLC,
ads of China Huaneng Group and China National Nuclear
the company operating the 250-MW Buffalo Dunes wind
Corporation, leading Chinese electricity companies.
farm, from EFS Buffalo Dunes LLC, a GE Capital subsidiary,
Following up on the joint work begun in 2009 in the field
for about $60 million.
of carbon capture and storage, Enel and China Huaneng
The option to purchase the additional interest was provided
Group have decided to further expand and deepen their
for in the original agreement between Enel Green Power
relationship, forging a collaborative effort in the areas of
North America and the GE Capital subsidiary. The transac-
scientific and technological cooperation, the development
tion was closed following approval by the Federal Energy
of projects for the use of electricity from conventional and
65
renewable energy sources, management research in the
Colbun was notified of these resolutions on July 14, 2014.
fields of social economy, sustainable development, policies
After having assessed the documentation received, the
and regulation, as well as management of carbon assets
Company is now analyzing its legal options for best protec-
and carbon strategy.
ting the Group’s interest in Chile.
The memorandum of understanding with China National
Nuclear Corporation, the state-owned company responsible
for all aspects of nuclear programs in China, establishes a
framework for the exchange of information and best prac-
tices related to the development, design, construction, ope-
ration and maintenance of nuclear power plants.
10
July
Start of disposal of equity
investments in Slovakia and
Romania
8
July
Capital contribution agreement
for two wind plants in the
United States
At its meeting of July 10, 2014, the Board of Directors of Enel
SpA examined developments in the disposal program being
implemented to strengthen the Group’s financial structu-
re, as provided for in the 2014-2018 business plan. More
specifically, the Chief Executive Officer informed the Board
that, as part of that program, possible disposals by the Enel
On July 8, 2014, Enel Green Power North America (“EGP
Group would include:
NA”) signed a capital contribution agreement for about
> 66% of Slovenské elektrárne (held by Enel through Enel
$400 million with a consortium led by the J.P. Morgan in-
Produzione), Slovakia’s main power generation com-
vestment bank. Under the agreement, the consortium has
pany, with a market share of close to 80%;
committed to funding the 150-MW Origin wind project lo-
> 64.4% of Enel Distributie Muntenia and Enel Energie
cated in Oklahoma and the 200-MW Goodwell project in
Muntenia, 51% of Enel Distributie Banat, Enel Distributie
Oklahoma and Texas. The consortium disbursed the funds
Dobrogea and Enel Energie, and 100% of Enel Romania,
for Origin in November 2014, once the plant entered servi-
a services company (all held by Enel through Enel In-
ce, and will disburse the funds for Goodwell the 4th Quarter
vestment Holding).
of 2015, subject to compliance with the requirements set
For both Slovakia and Romania, the Group has formally noti-
out in the agreement. Both projects are associated with
fied the subsidiaries and their non-controlling shareholders
long-term power purchase agreements. Within the fra-
(state-controlled companies or entities) of the start of the
mework of the agreement, the J.P. Morgan-led consortium
disposal process, and has appointed the financial advisors
will make a capital contribution totaling about $400 million
(BNP Paribas and Deutsche Bank for the Slovakian assets
to EGP NA. In exchange, the consortium will receive an equi-
and Citigroup and UniCredit for the Romanian assets) and
ty interest with limited voting rights. This interest will allow
legal counsel that will be providing support for the opera-
the consortium to obtain a percentage of the tax benefits to
tion.
be attributed to the Origin and Goodwell projects.
On February 25, 2015, the Board of Directors, under the gui-
9
July
Chilean government resolutions
on the Aysén hydroelectric
project
delines set out in the new business plan, decided to suspend
the process of disposing of distribution and sale assets in
Romania and to continue with the disposal of generation
assets held in Slovakia.
For more information, please see note 30 - Assets and liabi-
lities held for sale.
On July 9, 2014, the Chilean government’s Committee of
Ministers issued Resolutions 569 and 570 in response to pe-
titions filed by citizens and local communities, voiding the
previous Resolution 225/2011 issued by the Comisión de
Evaluación de la Región de Aysén that had granted an envi-
ronmental permit for the hydroelectric project proposed by
11
July
Agreement reached
between EGP, Sharp and
STMicroelectronics
Centrales Hidroeléctricas de Aysén, a joint venture between
On July 11, 2014, Enel Green Power SpA (“EGP”) and Sharp
Endesa Chile and Colbun.
Corporation reached an agreement for Enel Green Power to
66
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS assume Sharp’s obligations arising from the off-take agre-
ement under which EGP and Sharp had committed to pur-
chasing the entire output of photovoltaic panels manufac-
tured at the Catania factory of 3SUN, the equally held joint
venture between Enel Green Power, Sharp and STMicro-
4
September
Acquisition of 21.1% of Edegel
electronics. The panels produced at the factory, which are
On September 4, 2014, Enersis, the Chilean subsidiary of
especially well-suited for high-temperature applications, are
the Enel Group, successfully completed an operation begun
used by EGP to build its photovoltaic plants in the various
the previous April to acquire a majority stake in Edegel, a
geographical areas envisaged in the company’s 2014-2018
Peruvian generation company with 1,524 MW of installed
business plan, including South America and South Africa.
capacity. The transaction involved the acquisition, for $421
The price to be paid by Sharp to EGP was set at €95 million,
million, of all the shares indirectly held by Inkia Americas
divided into a number of instalments, the last of which will
Holdings Limited in Generandes Perú (the company that
be paid in March 2015. Following this agreement, on July
controls Edegel with a holding of 54.20%), equal to 39.01%
22, 2014, EGP acquired (for €30 million) Sharp’s 50% stake
of its share capital. Accordingly, Enersis now has a direct and
in Enel Green Power & Sharp Solar Energy Srl, the equally
indirect stake of 58.6% in Edegel, increasing its holding by
held joint venture created to develop, build and operate
21.1% from the 37.5% already held indirectly through its
photovoltaic plants, using the photovoltaic panels manu-
subsidiary Endesa Chile.
factured at the 3SUN plant. The acquisition gave the Group
100% control of Enel Green Power & Sharp Solar Energy.
Finally, on July 23, 2014, EGP signed an agreement with the
other partner in the joint venture, STMicroelectronics, un-
der which STMicroelectronics will pay EGP €15 million, fully
freeing STMicroelectronics from any obligations associated
24
September
Agreement with Hubject for
electric mobility
with participation in the joint venture or in respect of EGP.
On September 24, 2014, Enel Distribuzione and Hubject (a
The accord also provides for EGP to buy out the interests
German company that since 2013 has operated the European
held by the other venturers, Sharp Corporation and STMi-
eRoaming platform bringing together more than 120 opera-
croelectronics, in 3SUN. The agreement will become effecti-
tors) announced the signature of a memorandum of under-
ve subject to the approval of the lender banks and the com-
standing under which the parties will work together for the
petent authorities (where necessary).
development of an Europe-wide eRoaming platform. Through
20
July
Amendments of the bylaws
eRoaming, electric vehicle drivers can recharge their vehicles at
facilities that are not owned or operated by the utility of which
they are customers. The goal of the agreement is to enable
electric vehicle recharging at around 5,000 stations across an
area spanning from Sicily to Lapland, with automatic debiting
of the charge to customer’s ordinary utility bills.
On July 20, 2014, the Board of Directors of Enel SpA appro-
The collaboration between Enel and Hubject in the eRoaming
ved a number of amendments of the bylaws with a view
field is one of the main outcomes of Green eMotion, the EU re-
to ensuring their compliance with the provisions intro-
search project on electric mobility grouping 43 partners drawn
duced by Decree Law 21 of March 15, 2012 (ratified with
from industry, the energy sector, electric vehicle manufactu-
amendments with Law 56 of May 11, 2012) concerning the
rers, local authorities, universities and research institutions.
special powers of the Italian government in strategic indu-
stries and to eliminating references to a number of autho-
rizations to increase share capital (mainly in the service of
stock option plans) that, having been approved some time
ago, have now been executed or are no longer in effect.
30
September
Acquisition of upstream licenses
in Algeria
On September 30, 2014, Enel was awarded, in partnership
with the multinational Dragon Oil, two gas exploration
67
blocks within the framework of the fourth bid round to
offer conducted between October 20 and 27, 2014, purchased
award hydrocarbon exploration and exploitation contracts
notes it had issued and that are listed on the Dublin exchange
launched in January 2014 by Algeria’s state oil licensing
and guaranteed by Enel for a total of around €762 million.
body.
The operation was performed as part of efforts to optimize
Enel will hold 70% of the partnership for Msari Akabli in
Enel Finance International’s finance operations and is aimed at
south-eastern Algeria, where promising oil and gas discove-
actively managing maturities and debt servicing costs.
ries have been already made, and will serve as project ope-
rator, while Dragon Oil will hold the remaining 30%.
At Tinrhert Nord, situated in the Illizi basin in western Alge-
ria, an area with a number of producing oil fields and whe-
re Enel already holds the South East Illizi concession, Enel
will hold 30% of the partnership and Dragon Oil (serving as
4
November
Appointment of officer
responsible for the preparation
of the financial reports
project operator) will hold 70%.
On November 4, 2014, the Board of Directors of Enel, after
14
October
Memorandum of
understanding with Bank of
China
receiving a favorable opinion from the Board of Auditors,
appointed Alberto De Paoli as the officer responsible for the
preparation of the financial reports of Enel SpA, replacing
Luigi Ferraris, starting from November 12, 2014. He also
replaced Luigi Ferraris as the Chief Financial Officer of the
Company starting from that date.
On October 14, 2014, Enel signed a memorandum of un-
derstanding with Bank of China, a leader in the Chinese
banking sector. The agreement calls for undertaking a joint
assessment of future, potential financial transactions over
the next five years. Specifically, Bank of China declares itself
available, through its headquarters and global network, to
7
November
Agreement for the sale of SE
Hydropower and SF Energy
grant potential financing facilities to Enel of up to €1 bil-
On November 7, 2014, Enel Produzione and Società Elettrica
lion, subject to a joint assessment with Enel. These facilities
Altoatesina SpA (“SEL”, a company controlled by the Autono-
include loans, credit support as well as project and trade
mous Province of Bolzano) signed contracts for the sale of the
finance and, if employed, will be used to partially finance
stakes held by Enel Produzione in SE Hydropower and SF Ener-
Enel Group projects in China and elsewhere. Moreover, ba-
gy for a total of €400 million.
sed upon its experience in the renminbi (“RMB”) currency
More specifically, the price for the sale of the 40% stake held
market, Bank of China will provide its advisory services to
by Enel Produzione in SE Hydropower is expected to total €345
Enel for its operations in that market. In turn, Enel will re-
million. The completion of the transaction is conditional on the
gard Bank of China as its strategic partner for global RMB-
approval of the Italian antitrust authorities and on SEL obtai-
denominated transactions and will consider the possibility
ning a commitment from the banks to provide the funding for
of using RMB as the base currency for its transactions with
the purchase of the above shareholding.
Bank of China. Other services Bank of China will provide in-
The price for the sale of the stake held by Enel Produzione in SF
clude hedging instruments, financial consulting, as well as
Energy (whose share capital is held in equal amounts by Enel
support in relationships with strategic partners in the China
Produzione, SEL and Dolomiti Energia) is expected to amount
and Asia region.
31
October
Enel Finance International
repurchases bonds
to €55 million. The completion of the transaction is subject to
the right of pre-emption held pro-rata by the shareholder Do-
lomiti Energia and is also conditional on SEL obtaining a com-
mitment from the banks to provide the funding for the purcha-
se of the above shareholding.
This transaction is part of the disposal plan announced by Enel
to the market and will enable the Group to reduce its consoli-
On October 31, 2014, Enel Finance International, a wholly-
dated net financial debt by an amount equal to about the total
owned subsidiary of Enel, following the non-binding tender
price reported above.
68
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS 14
November
Enel Green Power signs a $104
million loan agreement with
Banco Santander
25
November
Reorganization of operations
in the Iberian peninsula and in
Latin America
On November 14, 2014, Enel Green Power SpA (“EGP”), acting
Approval of the reorganization plan
through its fully owned subsidiary Dominica Energía Limpia,
On July 30, 2014, the Board of Directors of Enel SpA approved
signed a $104 million loan agreement with Banco Santander
plans to reorganize Group operations in the Iberian peninsula
as lender, sole lead arranger and agent. The agreement is co-
and in Latin America. The main objectives of the project are:
vered by the Spanish Export Credit Agency (“CESCE”).
> to align the corporate structure with the new organiza-
The 15-year term loan is secured by a parent company gua-
tional structure of the Group, simplify the chain of control
rantee issued by EGP. The loan is aimed at supporting the
of the companies operating in Latin America and crea-
investment executed in the company’s 100-MW “Dominica
ting the conditions for optimizing the Group’s cash flows;
I” wind farm, which amounts to approximately $196 million.
> to focus the operations of Endesa as the leading com-
The operating plant, located in the municipality of Charcas,
pany in energy markets in the Iberian peninsula, by me-
in the state of San Luis Potosí, Mexico, is comprised of fifty
ans of a new business plan focused on the development
2-MW turbines and is capable of generating up to 260 GWh
of current business platforms and leveraging the compe-
per year.
titiveness of operations in Spain and Portugal.
The loan bears an interest rate in line with the market bench-
mark and is the second granted to the Enel Green Power
Binding proposal of Enel Energy Europe to Endesa for
Group by Banco Santander with the coverage of CESCE in
the acquisition of the interests in Enersis and Endesa La-
2014, increasing the overall amount relating to such loans up
tinoamérica
to more than €230 million.
On September 11, 2014, the Board agreed and approved:
19
November
Enel admitted to CDP Italy
Climate Disclosure Leadership
Index 2014 and STOXX Global
ESG Leaders index
> the presentation to Endesa by Enel Energy Europe, now
Enel Iberoamérica, a wholly-owned Spanish subsidiary of
Enel, which in turn holds 92.06% of Endesa, of a binding
proposal for the acquisition of the 60.62% interest held
directly and indirectly by Endesa in the Chilean company
Enersis, parent company for operations in Latin America.
On November 19, 2014, the Enel Group was admitted to the
More specifically, the stakes to be acquired are 20.30% of
prestigious CDP Italy Climate Disclosure Leadership Index
Enersis held directly by Endesa and 100% of Endesa La-
2014, published in the CDP Italy 100 Climate Change Report
tinoamérica, which in turn holds 40.32% of Enersis. The
2014. Enel was ranked in the index as a leading company
proposal provides for a total purchase price for the above
in terms of quality, comprehensiveness and transparency of
interests in an amount equal to €8,252.9 million (based
climate change data it made available to the market throu-
upon an implicit price for Enersis shares of 215.0 Chilean
gh CDP, the international NGO promoting sustainable eco-
pesos, equal to €0.28 at the exchange rate prevailing on
nomy.
September 10, 2014), net of overheads and the net liabi-
Furthermore, Enel was admitted for the first time to the
lities of Endesa Latinoamérica, equal to a negative €144
STOXX Global ESG Leaders index, a benchmark designed
million. The price was determined using international
to measure the performance of companies demonstrating
valuation procedures and methods generally accepted
strong Environmental, Social and Governance (ESG) prac-
for these operations, supported by the fairness opinion
tices. The index was created by financial services supplier
issued by Mediobanca as a financial advisor;
STOXX Limited, which is in turn owned by the German and
> the concomitant presentation by Enel Iberoamérica of a
the Swiss stock exchanges.
proposal for Endesa to distribute an extraordinary cash
dividend, in an amount equal to the consideration re-
ceived by Endesa for the sale of 60.62% of Enersis, the
payment of which will be dependent upon the execution
of the sale.
69
The proposal regarding the purchase of 60.62% of Enersis
ry cash dividend equal to €0.76 per share, for an overall
provides for, inter alia, a clause under which, for a period of
amount of about €800 million, to be paid in 2015;
two years from the closing date of such transaction, Enel
- for 2015 and 2016, the target of an annual increase of
Iberoamérica shall pay Endesa, in the event of the sale for
at least 5% in the ordinary cash dividend of €0.76 per
cash of a stake in the share capital of Enersis to a non-Enel
share;
Group purchaser that reduces the total stake held (directly
- payment of the ordinary dividends to be made in two
or indirectly) to below 60.62%, any positive difference
instalments, during the months of January and July, in
between the price per Enersis share upon which such sale is
conformity with the usual practice of Endesa’s main
based and that on which the purchase of 60.62% of Enersis
competitors.
is based, multiplied by the number of Enersis shares sold.
Acceptance by Endesa Shareholders’ Meeting of Enel
Acceptance of Enel Energy Europe’s proposal by Ende-
Energy Europe’s proposal and resolutions on the distri-
sa’s Board of Directors
bution of dividends
Both the proposal for the sale of 60.62% of Enersis and that
On October 21, 2014, the Endesa Shareholders’ Meeting
for the extraordinary cash dividend were then examined by
approved the binding proposal presented by the Board of
the Board of Directors of Endesa, which on September 17,
Directors of Endesa regarding the abovementioned acquisi-
2014, approved the operation, submitting it for approval to
tion of Enersis and the distribution of the two extraordinary
the Shareholders’ Meeting based on the proposals formu-
cash dividends.
lated by a special internal committee comprised entirely of
independent directors, which had been mandated to verify
Resolution of the Board of Directors of Enel SpA for the
that the reorganization plan is in line with the corporate
placement by Enel Energy Europe of a portion of the
interests of Endesa from an economic, financial, legal and
share capital of Endesa on the market
strategic standpoint.
Finally, on November 4, 2014, the Board of Directors appro-
ved the placement by Enel Energy Europe, now Enel Ibero-
Approval of the Board of Directors of Endesa of the di-
américa, of Endesa shares on the market. The initial amount
stribution of an extraordinary dividend and Endesa’s
to be placed will be equal to 17% of Endesa’s share capital
new dividend policy
and may reach up to a maximum of 22%, including in any
On October 7, 2014, the Board of Directors of Endesa, in the
case the greenshoe option (under such option, the Joint
context of updating that company’s business plan, discus-
Global Coordinators may acquire up to a maximum of 15%
sed and approved the following:
of the shares to be placed).
> the distribution of a further extraordinary cash dividend,
by way of an interim dividend on profits for 2014, equal
Public offering of Endesa shares
to €6.00 per share, for an overall amount of €6,353 mil-
On November 6, 2014, the Spanish securities market autho-
lion, with the aim of establishing a more balanced and
rity, Comisión Nacional del Mercado de Valores (“CMNV”),
efficient financial structure. The dividend is being paid
approved the publication of the prospectus for the above
in addition to the extraordinary dividend announced on
placement of shares, consisting of:
September 17, 2014, submitted for approval to Endesa’s
> a public offering of shares in Spain to retail investors,
shareholders at the extraordinary meeting of October 21,
representing 15% of the Initial Offer (excluding the
2014, equal to €7.795 per share, for an overall amount of
greenshoe option), with the possibility of re-allotting a
€8,253 million, related to the sale to Enel Energy Europe,
portion of the shares originally aimed at the Institutional
now Enel Iberoamérica, of the 60.62% interest held both
Offer to the Public Offer (so-called clawback provision), in
directly and indirectly by Endesa in the share capital of
which case the amount of the Public Offer could be rai-
the Chilean company Enersis;
sed up to a maximum of 30% of the Initial Offer and up
> a new dividend policy for the financial years 2014-2016
to a maximum of 23.27% of the Maximum Offer (exclu-
which, given the greater cash flows expected to be gene-
ding the greenshoe option). The maximum price for the
rated by Endesa, includes the following:
Endesa shares to be placed through the Public Offer,
- for 2014, in addition to the two extraordinary cash divi-
which began on November 7, 2014, was set at €15.535
dends mentioned above, the distribution of an ordina-
per share, corresponding to the highest of the closing
70
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS prices for Endesa shares reported on the Spanish stock
over-allotted and under the greenshoe option if exercised),
exchange between October 29 and November 5, 2014.
equal to 21.92% of the share capital of Endesa, for a total
The final price for the Public Offer is equal to the lesser
value of €3,133 million. The number of shares for the Glo-
of the aforementioned maximum price and the price set
bal Offer was determined by taking account of the demand
for the Institutional Offer. A bonus share incentive will be
from institutional investors, the Global Offer price and mar-
available for the Public Offer, providing for the awarding
ket conditions. The definitive number of shares allotted
of one free Endesa share for every 40 shares purchased
through the Global Offer was therefore equal to 34,810,500
during the Public Offer and held for 12 months without
shares for the Public Offer and 197,259,500 shares for the
interruption from the date of settlement. A mechanism
Institutional Offer (including 30,270,000 shares under the
for preferred allotment of the shares under the Public Of-
greenshoe option). The shares placed through the Public
fer to shareholders of Endesa as of November 5, 2014 is
Offer were allotted to retail investors as indicated in the
also envisaged;
prospectus. The offer aimed at institutional investors was
> an offering of shares to Spanish and international insti-
handled by a consortium of banks led by Banco Santander,
tutional investors, totaling 85% of the Initial Offer (exclu-
BBVA, Credit Suisse and J.P. Morgan as Joint Global Coordi-
ding the greenshoe option and unless the clawback
nators, while Goldman Sachs International, Morgan Stanley
provision for the Public Offer is exercised). The price for
and UBS Limited acted as Joint Bookrunners.
the shares placed through the Institutional Offer, which
BBVA and Banco Santander also coordinated the consor-
began on November 13, 2014, was determined on No-
tium handling the offer to retail investors in Spain. Medio-
vember 20, 2014 in consultation with the Joint Global
banca acted as financial advisor to Enel and to Enel Ibero-
Coordinators, taking into account, among other conside-
américa (in its capacity as offeror).
rations, the quantity and quality of the orders received
for the Institutional Offer, as well as the overall demand
Exercise of greenshoe option
relating to the Global Offer and market conditions.
On November 25, 2014, Credit Suisse Securities (Europe) Li-
On November 19, 2014, the Public Offer was closed. Accor-
mited, acting as Stabilization Agent on behalf of the consor-
ding to the information provided by the Joint Global Coordi-
tium of banks handling the Public Offer aimed at institutio-
nators, demand totaled approximately 1.7 times the amount
nal investors, fully exercised the greenshoe option for a total
initially offered. Considering the results of the Public Offer,
of 30,270,000 Endesa shares at the offer price of €13.50 per
Enel Energy Europe, now Enel Iberoamérica, having taken
share. Following the exercise of the greenshoe option, the
advice from the Joint Global Coordinators, decided to avail
Global Offer, launched by Enel Energy Europe, now Enel Ibe-
itself of the possibility to increase the number of shares ori-
roamérica, therefore involved the sale of 232,070,000 Ende-
ginally intended for retail investors, allocating to the Public
sa shares, equal to 21.92% of the company’s share capital,
Offer a further 11,333,823 shares, thus increasing the total
for a total consideration of €3,132,945,000.
number of shares for retail investors to 34,810,500 shares.
With the exercise of the greenshoe option, the stabiliza-
The allocation of the shares to retail investors was made in
tion period, which had initially been scheduled to end on
accordance with the provisions indicated in the prospectus.
December 15, 2014, was concluded. Credit Suisse Securities
Subsequently, on November 23, 2014, the Board of Direc-
(Europe) Limited had not carried out any stabilization tran-
tors of Enel SpA, having taken advice from the Joint Global
sactions in Endesa shares.
Coordinators, decided, within the scope of its powers, to set
the price for the offer aimed at institutional investors (“Insti-
tutional Offer”) at €13.50 per Endesa share.
The price will also be applied to the offer for retail investors
(the “Public Offer” and, together with the Institutional Offer,
the “Global Offer”), since, as previously announced to the
27
November
Enel signs an agreement with
China’s ZTE Corporation on
electric mobility, smart grids
and renewables
market, the Public Offer price will be equal to the lesser of
On November 27, 2014, Enel SpA signed a framework agre-
the maximum price for the Public Offer (equal to €15.535
ement with ZTE Corporation, a leading Chinese IT company.
per share) and the price set for the Institutional Offer.
This agreement will kick-start cooperation between the two
The number of shares to be placed through the Global Offer
groups in the areas of electric mobility, smart grids and re-
was set at 232,070,000 shares (including 30,270,000 shares
newable generation to achieve strategic objectives through
71
the development of sustainable, innovative technologies.
Regarding electric mobility, Enel and ZTE have agreed to
share information on the technological solutions developed
by both companies on vehicle charging, as well as exploring
integrated solutions and synergies for a possible joint com-
11
December
Enel Green Power and Itaú
Unibanco sign a $100 million
loan agreement
mercial development.
On December 11, 2014, Enel Green Power, acting through
On smart grids, the parties have agreed to evaluate busi-
its Brazilian subsidiary Enel Brasil Participações, and Itaú Uni-
ness opportunities in markets of common interest, based on
banco signed a 10-year term loan agreement for over 260
Enel’s technology and solutions in the field.
million Brazilian reais (approximately $100 million). The loan
In the renewable sector, Enel and ZTE will start collaborating
with Itaú, arranged by the International Finance Corpora-
on existing Enel projects to identify optimization opportuni-
tion (“IFC”), will cover part of the investment to construct
ties to better integrate IT solutions toward improving per-
over 260 MW of wind power in the states of Bahia, Pernam-
formance of renewable power plants.
buco and Rio Grande do Norte, located in north-eastern
A dedicated effort will focus on cooperation in off-grid re-
Brazil. The loan comes on top of the $200 million Brazilian
newable generation, including collaboration at the Ollagüe
Real-linked loan closed in May 2014 on IFC’s own account,
site in Chile. In Ollagüe, a village near the Bolivian border,
in support of Enel Green Power’s wind power development
Enel Green Power is constructing an innovative 232 kW off-
projects in those areas.
grid hybrid plant combining photovoltaic power and a mi-
ni-wind turbine generator coupled with an energy storage
system. Such a collaborative effort addressing the Ollagüe
project is aimed at exploring possible optimization and
identifying further development opportunities for similar
12
December
installations.
1
December
Enel Green Power awarded
114 MW of wind capacity in
Brazilian public tender
Sale of LaGeo
On December 12, 2014, Enel Green Power (“EGP”) and Inver-
siones Energéticas (“INE”), the Salvadorian state-owned ener-
gy company, signed an agreement for the sale of the 36.2%
stake EGP owns in LaGeo (the EGP and INE joint venture for
the development of geothermal power in El Salvador) to INE
which is already the majority shareholder of the Salvadorian
On December 1, 2014, following the A-5 Brazilian public
company with a 63.8% stake.
auction, Enel Green Power was awarded the right to sign
With this agreement EGP sold off its entire shareholding in
20-year power supply contracts with a pool of Brazilian
LaGeo to INE for approximately $280 million (about €224 mil-
electricity distribution companies with power produced by
lion), thereby closing its operations in the country.
a new 114-MW wind project.
EGP and INE began negotiations under the umbrella of the In-
The wind farm, Morro do Chapéu, will be constructed in Ba-
ternational Centre for Settlement of Investment Disputes (IC-
hia state, in north-eastern Brazil, where the company alre-
SID) of the World Bank in Washington D.C. aimed at finding a
ady manages approximately 400 MW of wind projects in
mutually beneficial solution and ending an eight-year dispute
operation or under construction and over 254 MW of pho-
between the two companies.
tovoltaic projects awarded within the last “Leilão de Reser-
The sale was made under the framework of a settlement agre-
va” public tender.
ement signed with the El Salvadorian government in regard
Morro do Chapéu, with a total installed capacity of 114 MW
to ongoing ICSID litigation. The full effectiveness of the final
and an average load factor of more than 50%, equivalent to
settlement of the dispute with the Republic of El Salvador is
approximately 4,500 hours of energy production per year,
subject to certain conditions (termination of the pending lo-
will be able to generate over 500 GWh per year, avoiding
cal litigation against EGP and its representatives) to be verified
the annual emission of over 150,000 tons of CO2 into the
atmosphere.
within the next six months.
72
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS 18
December
Sale of Enel Green Power France
On December 18, 2014, Enel Green Power International
(“EGPI”), a wholly-owned subsidiary of Enel Green Power, sold
the entire share capital of Enel Green Power France (“EGP Fran-
ce”) to Boralex EnR, an indirect French subsidiary of the Cana-
dian company Boralex Inc. for a total of €298.4 million, inclu-
ding the reimbursement of an outstanding shareholder loan
granted to EGP France. With this sale, Enel Green Power exits
the renewable energy sector in France.
The total of €298.4 million paid to EGPI accounts for a €3.3 mil-
lion net cash position and is subject to a price adjustment in line
with the standard procedures for this type of transactions. The
full amount was paid at the closing of the transaction.
73
Reference scenario
Enel and the financial markets
Gross operating margin per share (euro)
Operating income per share (euro)
Group net earnings per share (euro)
Group net ordinary earnings per share (euro)
Dividend per share (euro)
Group shareholders’ equity per share (euro)
Share price - 12-month high (euro)
Share price - 12-month low (euro)
Average share price in December (euro)
Market capitalization (millions of euro) (1)
No. of shares outstanding at December 31 (millions)
(1) Calculated on average share price in December.
Enel stock weighting in:
- FTSE MIB index
- Bloomberg World Electric index
Rating
Standard & Poor’s
Outlook
Medium/long-term
Short-term
Outlook
Medium/long-term
Short-term
Outlook
Medium/long-term
Short-term
Moody’s
Fitch
(1) Figures updated to January 31, 2015.
2014
2013 restated
1.68
0.33
0.05
0.32
0.14
3.35
4.46
3.13
3.75
35,307
9,403
1.78
1.04
0.34
0.33
0.13
3.82
3.38
2.30
3.10
29,190
9,403
Current (1)
at Dec. 31, 2014
at Dec. 31, 2013
at Dec. 31, 2012
9.49%
2.94%
Stable
BBB
A-2
9.45%
2.89%
Stable
BBB
A-2
8.82%
3.12%
11.02%
3.17%
Stable
Negative
BBB
A-2
BBB+
A-2
Negative
Negative
Negative
Negative
Baa2
P2
Stable
BBB+
F2
Baa2
P2
Baa2
P2
Baa2
P2
Stable Watch Negative
Watch Negative
BBB+
F2
BBB+
F2
BBB+
F2
In 2014, the United States experienced an acceleration in
decline in inflation expectations, posting record lows in
economic growth, which remained weak in the emerging
many countries.
economies, the euro area and Japan. The outlook for global
expansion is clouded by the risk of a further slowdown in
In this economic climate, the main European equity indices
the Chinese economy and a deterioration in the economic
closed 2014 largely unchanged. The FTSE Italia All Share po-
and financial situation in Russia.
sted a loss of just -0.3%. Conversely, the European utilities
In the advanced economies, 2014 saw a continuation of
segment ran counter to this trend, closing the year sharply
the decline in long-term interest rates. Yields on the 10-
higher (about +13% on the close of the previous year).
year government securities of the euro-area countries con-
As regards Enel shares, 2014 ended with the stock price up
tinued to subside over the course of the year owing to the
significantly at €3.696 a share, a gain of 16% on the close of
74
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS
2013, outperforming both the Italian index and the Europe-
For further information we invite you to visit the Investor Re-
an utilities index.
lations section of our corporate website (http://www.enel.
com/en-GB/investor/), which contains financial data, pre-
On June 26, 2014 Enel paid the dividend on 2013 profits of
sentations, on-line updates of the share price, information
€0.13 a share.
on corporate bodies and the regulations of Shareholders’
Meetings, as well as periodic updates on corporate gover-
At December 31, 2014, the Ministry for the Economy and Fi-
nance issues.
nance held 31.2% of Enel, while institutional investors held
44.7% and individual investors held the remaining 24.1%.
We have also created contact centers for private investors
On February 26, 2015, the Ministry for the Economy and Fi-
(which can be reached by phone at +39-0683054000 or by
nance sold a stake of 5.74% in the Company. Following the
e-mail at azionisti.retail@enel.com) and for institutional in-
transaction, the Ministry’s holding declined from 31.24% to
vestors (phone: +39-0683051; e-mail: investor.relations@
25.50%.
enel.com).
Performance of Enel share price and the Bloomberg World Electric and FTSE Italia All Share
indices from January 1, 2014 to February 5, 2015
EURO
4.5
4.3
4.1
3.9
3.7
3.5
3.3
3.1
2.9
2.7
2.5
Jan
14
Feb
14
Mar
14
Apr
14
May
14
Jun
14
Jul
14
Aug
14
Sep
14
Oct
14
Nov
14
Dec
14
Jan
15
Feb
15
Enel
Bloomberg World Electric
STOXX 600 Utilities
FTSE Italia All Share
75
Economic and energy conditions in 2014
Economic developments
Economic growth in 2014 differed among the main geo-
in the foreign exchange market, increased inflation and
graphical areas. Of the advanced economies, the United
eroded competitiveness, especially vis-à-vis countries that
States acted as the driver of the world economy (+2.2% in
export manufactured goods (largely the south-east Asian
2014), while Europe and Japan struggled to sustain a reco-
countries). Recent years have seen an outflow of foreign
very, which continues to lag. The emerging economies saw
direct investment in emerging economies (with foreign di-
growth slow sharply from the pace experienced in recent
rect investment - FDI of less than 1% of GDP in 2014 for the
years.
first time in 15 years). The most vulnerable countries were
More specifically, the United States was the beneficiary of
those most specialized in commodity exports (such as Ar-
a strong recovery in domestic consumption, buoyed by the
gentina, Brazil, Colombia, Peru and Russia) and countries
return of employment to its pre-crisis levels, the rise in wa-
with current account deficits (South Africa, Brazil, Indonesia
ges and the recovery in the real estate sector (these deve-
and Peru). In Latin America, Argentina and Brazil struggled
lopments prompted the FED’s announcement that it would
the most. The Argentine economy has been struggling with
bring its monetary stimulus to an end). The difficulties en-
a currency crisis for a number of years now, with a real in-
countered by the mature economies also affected the Ja-
flation rate of more than 30%, a persistent contraction in
panese economy, which in 2014 saw growth stagnate at
exports, a large budget deficit and an unresolved foreign-
around 0% of GDP, with even a fiscal stimulus in the form of
currency debt crisis. Brazil continues to be afflicted by high
increased public spending having a smaller than expected
inflation, modest growth, and large budget and current
impact.
account deficits that are jeopardizing the status of its so-
For the euro area, 2014 ended with modest growth
vereign debt. Chile, Colombia and Peru displayed signs of
(+0.8%), impeded mainly by the slowdown in consumption
a slowdown in 2014, although they still posted positive
and by low inflation. Italy was the only G7 country to post a
growth rates (+1.8%, +5.1%, +2.6% respectively). Chile was
contraction in GDP in 2014 (-0.4%), the worst performance
affected by a decline in demand from China (its main tra-
among the more highly indebted European countries. By
ding partner), the slowdown in FDI in the minerals industry
contrast, Spain continued to display significant signs of re-
and high inflation (with core inflation well above the tar-
covery, registered growth of 1.4% in 2014. The country be-
get of 3%). The collapse of oil prices was the main adverse
nefitted from the recovery in the labor market and the de-
factor for Colombia (exports of crude oil and refined pro-
cline in energy costs, factors that are sustaining the revival
ducts accounted for 55% of total foreign sales), with a con-
of private consumption and the improvement in the trade
sequent deterioration in the current account deficit (more
balance (with the increase in exports also being supported
than 5% of GDP). In Peru, in 2014 the outflow of foreign
by the weakness of the euro).
investment and the decline in metals prices (copper, gold,
Growth in the emerging economies slowed compared with
silver), which account for 70% of total exports, gave rise to
the previous year (+4.4% compared with +4.7% in 2013). A
a decline in commodity prices.
number of factors played a role, such as the deterioration in
The year 2014 was especially challenging for Russia, which
the outlook for growth in China and the fall in commodity
is mired in a recession worsened by the collapse in the price
prices. The Chinese slowdown will dampen the propensity
of Brent oil and the international sanctions imposed in re-
to invest in capital goods (from the emerging economies)
sponse to the Ukraine crisis, which have severely restricted
and will spur greater demand for durables (from the advan-
access to capital markets. GDP growth came in at 0.6% in
ced economies), with dangerous repercussions for the
2014, compared with 1.3% in 2013. In order to counter the
emerging economies that export raw materials (Argentina,
fall in the ruble, the Russian central bank (CBR) raised offi-
Brazil, Chile, Colombia, Indonesia, Peru, Russia and South
cial rates by 750 bp in December, bringing them to 17%,
Africa). For the latter, the collapse of commodity prices in
and said it would maintain a restrictive policy stance until
2014 as a result of the global economic slowdown helped
Brent prices returned to a level consistent with budget ba-
slow growth, caused current account balances and bud-
lance.
get deficits to deteriorate, sparked considerable volatility
76
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS The following table shows the growth rates of GDP in the main countries in which Enel operates.
Annual real GDP growth
%
Italy
Spain
Portugal
Greece
France
Romania
Russia
Brazil
Chile
Colombia
Mexico
Peru
Canada
USA
2014
-0.4
1.4
0.8
1.0
0.4
2.9
0.6
-0.1
1.8
5.1
2.2
2.5
2.4
2.4
Source: National statistical institutes and Enel based on data from ISTAT, INE, EUROSTAT, IMF, OECD and Global Insight.
Developments in the main market indicators
Money market
1.60
1.55
1.50
1.45
1.40
1.35
1.30
1.25
1.20
1.15
1.10
Feb
2012
Sep
2012
Apr
2013
Nov
2013
May
2014
Dec
2014
Euro - US dollar
3-month Euribor
2013
-1.9
-1.2
-1.4
-4.0
0.4
3.5
1.3
2.5
4.1
4.7
1.4
5.8
2.0
2.2
1.2
1.0
0.8
0.6
0.4
0.2
0
77
International commodity prices
In 2014 the price of Brent, which was $55.8/barrel at year-
supply by 2.8 million barrels/day (compared with growth in
end (compared with $110.8/barrel in 2013), experienced a
demand of 0.7 million barrels/day).
sharp fall the likes of which had not been seen since the oil
The impact of these factors was compounded by the re-
shock at the end of 2008, for reasons mainly related to struc-
luctance shown by the OPEC countries at the end of 2014,
tural developments in supply and demand.
Saudi Arabia first and foremost, to reduce production levels
On the demand side, several factors slowed consumption,
in order to maintain market shares. In addition to these fun-
including (i) the slowdown in global economic growth and
damentals, a number of financial factors, such as the termi-
(ii) stringent environmental constraints that have discoura-
nation of expansionary monetary measures (quantitative
ged consumption. The supply side was characterized by (i)
easing) and the resulting expected increase of interest rates
the strong expansion in unconventional production in the
by the Federal Reserve, have further increased downward
United States and Canada (tight oil) and (ii) the strong re-
pressures.
covery in Libyan output over the past year, which increased
Commodity prices
900
800
700
600
500
400
300
200
100
0
Jan
12
Mar
12
May
12
Jul
12
Sep
12
Nov
12
Jan
13
Mar
13
May
13
Jul
13
Sep
13
Nov
13
Jan
14
Mar
14
May
14
Jul
14
Sep
14
Nov
14
Zeebrugge Gas (€/toe)
API2 coal (€/toe)
Brent (€/toe)
The abrupt drop in Brent oil prices only impacted gas and
which is also affected by excess supply, caused transport
coal prices in the final month of the year. The price of coal
costs to plunge by about 50% in December alone.
amounted to $71.3/metric ton at the end of the year, a re-
The spot price of natural gas at the Zeebrugge hub in Europe
duction of 13% on the previous year. The growth in energy
contracted by 25% over the course of the year, going from
demand is slowing and in many mature markets has turned
64.8 pence/therm (2013) to 48.4 pence/therm (2014). The
negative as a result of the combined impact of the deterio-
decline was driven by the weakness of demand for thermal
ration in economic conditions, new energy efficiency mea-
generation purposes and residential uses. With regard to
sures, stringent environmental policies and the ever increa-
thermal generation in particular, the reduction in demand
sing competition from renewables, giving rise to a surplus of
associated with the economic slowdown and weather fac-
supply on the market.
tors was compounded by the expansion of renewables ge-
In addition, structural conditions in the shipping market,
neration.
78
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Electricity markets
Electricity demand
Developments in electricity demand
GWh
Italy
Spain
Romania
Russia (1)
Slovakia
Argentina
Brazil (2)
Chile (2) (3)
Colombia
2014
309,006
243,395
50,452
772,255
27,950
130,654
474,033
49,409
63,772
2013
318,475
246,372
49,809
767,804
28,682
129,166
463,626
48,136
60,885
Change
-3.0%
-1.2%
1.3%
0.6%
-2.6%
1.2%
2.2%
2.6%
4.7%
(1) Europe/Urals.
(2) Net of grid losses.
(3) Figure for the SIC - Sistema Interconectado Central.
Source: Enel based on TSO figures.
In Europe, electricity demand decreased in the Mediterra-
Russia, demand increased slightly (+0.6%) in 2014 compa-
nean countries, primarily due to the slowdown in industrial
red with the previous year. Demand continued to rise in La-
consumption and to weather effects. More specifically, in
tin America, with a significant increase in Colombia (+4.7%)
Italy (-3.0%) and Spain (-1.2%) the negative performance
and smaller gains in Chile (+2.6%), Argentina (+1.2%) and
of the industrial sector and the macroeconomic uncertainty
Brazil (+2.2%).
had a decisive impact on the level of electricity demand. In
Italy
Domestic electricity generation and demand
Millions of kWh
Net electricity generation:
- thermal
- hydroelectric
- wind
- geothermal
- photovoltaic
Total net electricity generation
Net electricity imports
Electricity delivered to the network
Consumption for pumping
Electricity demand
2014
2013
Change
165,684
183,404
(17,720)
58,067
14,966
5,541
23,299
267,557
43,703
311,260
(2,254)
309,006
54,068
14,812
5,319
21,229
278,832
42,138
320,970
(2,495)
318,475
3,999
154
222
2,070
(11,275)
1,565
(9,710)
241
(9,469)
Source: Terna - Rete Elettrica Nazionale (monthly report - December 2014).
-9.7%
7.4%
1.0%
4.2%
9.8%
-4.0%
3.7%
-3.0%
9.7%
-3.0%
79
Domestic electricity demand in 2014 decreased by 3.0% on
11,275 million kWh, to 267,557 million kWh. More speci-
2013, to 309,006 million kWh. Of total electricity demand,
fically, in an environment of depressed electricity demand,
85.9% was met by net domestic electricity generation for
the increase in hydroelectric generation (3,999 million
consumption (86.8% in 2013) with the remaining 14.1%
kWh), mainly attributable to improved water availability
being met by net electricity imports (13.2% in 2013).
conditions, and the rise on other renewables generation
Net electricity imports in 2014 increased by 1,565 million
mal generation up 222 million kWh and wind generation
kWh, mainly as a result of lower average sales prices on in-
up 154 million kWh) as a result of the expansion in installed
ternational markets.
capacity in the country, led to a reduction in thermal gene-
(photovoltaic generation up 2,070 million kWh, geother-
Net electricity generation in 2014 decreased by 4.0% or
ration of 17,720 million kWh.
Spain
Electricity generation and demand in the peninsular market
Millions of kWh
Net electricity generation
Consumption for pumping
Net electricity exports (1)
Electricity demand
2014
253,429
(5,330)
(4,704)
243,395
2013
260,331
(5,958)
(8,001)
246,372
Change
(6,902)
628
3,297
(2,977)
-2.7%
10.5%
41.2%
-1.2%
(1) Includes the balance of trade with the extra-peninsular system.
Source: Red Eléctrica de España (Estadística diaria - December 2014 report). Volumes for 2013 are updated to November 30, 2014.
Electricity demand in the peninsular market in 2014 declined
in exports and an increase in imports, due to lower average
by 1.2% compared with 2013, to 243,395 million kWh. De-
sales prices on international markets.
mand was entirely met by net domestic generation for con-
sumption.
Net electricity generation in 2014 contracted by 2.7% or 6,902
million kWh., essentially due to lower demand for electricity
Net electricity exports in 2014 decreased by 41.2% compared
in the peninsular market.
with 2013, essentially reflecting the net impact of a decrease
Electricity generation and demand in the extra-peninsular market
Millions of kWh
Net electricity generation
Net electricity imports
Electricity demand
2014
13,290
1,298
14,588
2013
13,441
1,269
14,710
Change
(151)
29
(122)
-1.1%
2.3%
-0.8%
Electricity demand in the extra-peninsular market in 2014
Net electricity generation in 2014 fell by 1.1% or 151 million
decreased by 0.8% compared with 2013, falling to 14,588
kWh as a result of lower demand for electricity in the extra-
million kWh. Of total demand, 91.1% was met by net ge-
peninsular market.
neration in the extra-peninsular areas and 8.9% by net im-
ports.
Net electricity imports in 2014 amounted to 1,298 million
kWh, all of which regarded trade with the Iberian peninsula.
80
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS
Electricity prices
Electricity prices
Italy
Spain
Russia
Slovakia
Brazil
Chile
Colombia
Average baseload price
2014 (€/MWh)
Change in baseload
price 2014-2013
Average peakload price
2014 (€/MWh)
Change in peakload
price 2014-2013
52.1
42.1
21.7
33.6
220.7
101.5
84.9
-17.3%
-4.8%
-12.6%
-9.8%
140.7%
-12.5%
19.1%
55.7
46.4
25.0
42.9
263.6
208.7
180.5
-16.2%
-3.5%
-12.6%
-12.2%
36.3%
-5.8%
7.2%
Price developments in the main markets
Eurocents/kWh
Final market (residential) (1)
Italy
France
Portugal
Romania
Spain
Slovakia
Final market (industrial) (2)
Italy
France
Portugal
Romania
Spain
Slovakia
2014
2013
Change
15.4
10.6
12.7
9.1
17.7
12.2
10.8
7.4
10.3
7.5
11.9
11.1
15.0
10.5
12.3
8.9
17.7
13.8
11.2
7.2
10.1
8.6
11.5
12.3
2.6%
1.0%
3.4%
1.9%
-
-11.0%
-3.6%
3.8%
1.6%
-12.6%
2.7%
-10.2%
(1) Half-year price net of taxes – annual consumption of between 2,500 kWh and 5,000 kWh.
(2) Half-year price net of taxes – annual consumption of between 500 MWh and 2,000 MWh.
Source: Eurostat.
Electricity price developments in Italy
1st
Quarter
2nd
Quarter
3rd
Quarter
4th
Quarter
1st
Quarter
2nd
Quarter
3rd
Quarter
4th
Quarter
2014
2013
Power Exchange - PUN IPEX (€/MWh)
52.4
46.5
50.5
58.8
63.8
57.4
65.5
65.1
Average residential user with annual
consumption of 2,700 kWh (eurocents/kWh):
price including taxes
19.2
19.0
19.0
19.3
19.1
18.9
19.2
19.0
Source: GME (Energy Markets Operator); Authority for Electricity, Gas and the Water System.
In Italy, the average uniform national sales price of electrici-
The average annual price (including taxes) for residential
ty on the Power Exchange fell sharply compared with 2013,
users set by the Authority for Electricity, Gas and the Water
dropping by 17.3%.
System was essentially unchanged on the previous year.
81
Natural gas markets
Gas demand
Millions of m3
Italy
Spain
2014
61,501
25,897
2013
69,478
28,662
Change
(7,977)
(2,764)
-11.5%
-9.6%
Demand for natural gas in 2014 contracted sharply both in
se economic conditions and the mix of generation sources,
Italy and Spain. The drop was mainly attributable to adver-
characterized by the growing use of renewable energy.
Italy
Domestic gas demand
Millions of m3
Residential and civil
Industrial and services
Thermal generation
Other (1)
Total
2014
29,239
13,098
17,368
1,796
61,501
2013
33,709
13,174
20,672
1,923
69,478
Change
(4,470)
(77)
(3,304)
(127)
(7,977)
-13.3%
-0.6%
-16.0%
-6.6%
-11.5%
(1) Includes other consumption and losses.
Source: Enel based on data from the Ministry for Economic Development and Snam Rete Gas.
Domestic demand for natural gas in 2014 totaled 61,501
sentially the result of lower generation volumes, was com-
million cubic meters, a decrease of 11.5% on the previous
pounded by a decrease in consumption for domestic and
year.
civil uses, attributable to the impact of colder weather in
The contraction in consumption for thermal generation, es-
2013.
Price developments
Average residential user with annual
consumption of 1,400 m3 (eurocents/
m3): price including tax
1st
Quarter
2nd
Quarter
3rd
Quarter
4th
Quarter
1st
Quarter
2nd
Quarter
3rd
Quarter
4th
Quarter
2014
2013
86.3
83.0
77.8
82.0
92.8
88.9
88.4
86.2
Source: Authority for Electricity, Gas and the Water System.
The annual average sales price of natural gas in Italy decreased by 7.6% in 2014.
82
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS
Regulatory and rate issues
The European regulatory framework
State aid modernization process
On May 8, 2012, the European Commission set out a reform
plan to modernize the framework of rules and controls con-
cerning state aid. The three main, closely linked objectives
are: foster growth in a strengthened, dynamic and compe-
titive internal market; focus enforcement on cases with the
biggest impact on the internal market; and streamlined ru-
les and faster decisions. The European framework for state
aid for the energy sector includes the Environmental and
Energy Aid Guidelines (EEAG), the General Block Exemption
Regulation (GBER) and the Research, Development and In-
novation Programme (RDI) Guidelines.
On April 9, 2014 the Commission approved the revised EEAG
for the 2014-2020 term, entering into force as of July 1, 2014.
These promote a gradual transition to market-based mecha-
Market Abuse Rules (MAR and
MAD)
Regulation (EU) 596/2014 on market abuse (MAR) and Di-
rective 2014/57/EU on criminal sanctions for market abuse
(MAD) were published in the Official Journal of the Europe-
an Union on June 12, 2014.
The new rules, which replace Directive 2003/6/EC and will
enter force in June 2016, update and strengthen the exi-
sting framework to ensure investor protection and the inte-
grity of the financial markets.
Energy Efficiency
Communication 2014
nisms, such as auctions or feed-in premiums, for supporting
On July 23, 2014, the European Commission published
renewable energy, establish criteria for supporting large
the Energy Efficiency Communication, which analyzes the
energy consumers that face international competition and
regulatory period through 2020 and seeks to identify the
include provisions for infrastructure aid and mechanisms for
potential gains achievable by 2030. With regard to the for-
ensuring secure and adequate supplies (for example, capaci-
mer issue, it found that with current measures the EU will
ty remuneration mechanisms) in the internal energy market.
achieve energy savings of 18-19% by 2020, compared with
Rules on the provision of
investment services (MiFID II)
The new framework of rules governing the provision of in-
vestment services in Europe (“MiFID II”) was published in the
Official Journal of the European Union on June 12, 2014. Mi-
FID II is comprised of Directive 2014/65/EU (MiFID) and Re-
gulation (EU) 600/2014 (MiFIR), which replace the previous
MiFID Directive 2004/39/EC.
Among other things, the new rules expand the scope of appli-
cation of the financial regulations, broadening the definition
of financial instruments and narrowing the exemptions cur-
rently available to companies that trade commodity derivati-
ves, including electricity and gas.
The MiFID II rules shall apply starting from January 2017. Prior
to that date the Member States must transpose the Directive,
while the European Commission and the European Securities
and Markets Authority (ESMA) will be responsible for defining
and adopting the implementing and delegating measures
provided for under MiFID II.
the original target of 20%. In the light of this, the Com-
mission asserts that if all Member States work to properly
implement the agreed legislation, the 20% target can be
reached without the need for additional measures. For the
period after 2020, the Commission has proposed a target
of a 30% reduction in energy use by 2030 compared with
2007 projections.
Industrial Emissions Directive
As part of the process of implementing the Industrial Emis-
sions Directive (Directive 2010/75/EU) the European Com-
mission is working to update the reference document on
best available techniques for large combustion plants (BREF
LCP), which includes the emissions levels associated with the
best available technologies to be considered in the integra-
ted environmental permitting process. The completion of
the review process scheduled for the end of 2015 could be
delayed until the early months of 2016.
83
The Italian regulatory
framework
The current structure of the Italian electricity market is the
Sales Division
Electricity
result of the liberalization process begun in 1992 with Direc-
tive 1992/96/EC, transposed into Law with Legislative De-
Retail market
cree 79/1999. This decree provided for: the liberalization of
As provided for by Directive 2003/54/EC, starting from
electricity generation and sale; reserving transmission and
July 1, 2007 all end users may freely choose their electri-
ancillary services to an independent network operator; the
city supplier on the free market or participate in regulated
granting of concessions for distribution to Enel and other
markets. Law 125/2007 identified these regulated markets
companies run by local governments; the unbundling of
as the “enhanced protection” market (for residential custo-
network services from other activities.
mers and small businesses with low-voltage connections)
The introduction of Directives 2003/54/EC and 2009/72/
and the “safeguard” market (for large customers not eligi-
EC (transposed with Law 125/2007 and Legislative Decree
ble for enhanced protection services).
93/2011, respectively) in Italy lent further impetus to the
Free-market operators are awarded contracts to provide
process, particularly through the complete opening of the
safeguard services on a geographical basis through th-
retail market and the confirmation of the total independen-
ree-year auctions. Enel Energia was awarded contracts to
ce of the national transmission network operator (already
provide services to five of the ten areas subject to auction
provided for in the Decree of the Prime Minister of May 11,
for the 2014-2016 period (Veneto, Emilia Romagna, Friuli
2004) by separating its ownership from that of other electri-
Venezia Giulia, Sardinia, Campania, Abruzzo, Calabria and
city operators.
Sicily).
The process of liberalizing the natural gas market began
By contrast, enhanced protection service is provided by
with Directive 1998/30/EC, transposed in Italy through Le-
sellers connected with distributors. The prices and related
gislative Decree 164/2000, calling for the liberalization of
terms are set by the Authority and are updated quarterly
the import, production and sale of gas and the separation
based on criteria designed to ensure that the operators’
of network infrastructure management from other activi-
costs are covered. More specifically, the Authority annually
ties through the establishment of distinct companies. As re-
updates the component for covering the operators’ costs
gards the model for unbundling transport from other non-
in the enhanced protection market (RCV) so as to ensure
network activities, with Resolution 515/2013/R/gas, the
that their costs are covered (operating costs, delinquency
Authority for Electricity, Gas and the Water System (the “Au-
charges and amortization and depreciation) and that they
thority”) mandated the transition to ownership unbundling
receive a fair return on capital.
pursuant to Directive 2009/73/EC.
Operators set their own prices for free market services,
with the Authority’s role limited to setting rules to protect
both customers and operators.
In this role, the Authority has adopted a number of measu-
res aimed at containing operators’ credit risk, which has ri-
sen in recent years due in particular to the economic crisis.
The Authority is in the process of launching the Integrated
Information System (IIS). This system, established under
Law 129/2010, is designed to manage the flow of infor-
mation between gas and electricity market operators and
is based upon a central databank of withdrawal points,
initially created for the electricity sector, that will be exten-
ded to the gas sector starting from 2015.
84
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Gas
Retail market
Generation and Energy
Management Division
Legislative Decree 164/2000 established that, as from Ja-
nuary 1, 2003, all customers may freely choose their natural
Electricity
gas supplier on the free market.
However, alongside this, operators must offer a safeguard
Wholesale production and market
service to their customers (only for residential customers
Electricity generation was completely liberalized in 1999
pursuant to Decree Law 69 of June 21, 2013), together with
with Legislative Decree 79/1999 and can be performed by
their own commercial offers, at the regulated prices establi-
anyone possessing a specific permit.
shed by the Authority.
The electricity generated can be sold wholesale on the or-
If there is no company supplying this service, the continuity
ganized spot market (IPEX), managed by the Energy Mar-
of supply for small customers not in arrears on bill payments
kets Operator (GME), and through organized and over-
(residential and other uses with an annual consumption of
the-counter platforms for trading forward contracts. The
less than 50,000 standard cubic meters) and for users in-
organized platform includes the Forward Electricity Market
volved in providing public services shall by ensured by the
(FEM), managed by the GME, in which forward electrici-
supplier of last resort. If the customer is in arrears with bill
ty contracts with physical delivery are traded. Trading can
payments or it is not possible for the supplier of last resort
also be conducted in derivatives with electricity as their un-
to provide service, supply continuity is ensured by the de-
derlying. The organized market for such transactions is the
fault distribution supplier selected, like the supplier of last
forward market (IDEX), operated by Borsa Italiana, while fi-
resort, through voluntary tenders for geographically-based
nancial derivatives can also be negotiated on OTC platforms.
contracts. The public procedures carried out in September
Generators may also sell electricity to companies engaged in
2014 identified the suppliers of last resort for the period
energy trading, to wholesalers that buy electricity for resale
October 1, 2014 - September 30, 2016. Enel Energia was
at retail, and to the Acquirente Unico (Single Buyer), whose
identified as supplier of last resort for 7 out of the 8 geo-
duty is to ensure the supply of energy to enhanced protec-
graphical areas covered by the auction and as default distri-
tion customers.
bution supplier for 6 out of 8 areas.
In addition, for the purposes of the provision of dispatching
Starting from October 1, 2013, the reform of the financial
services, which is the efficient management of the flow of
terms and conditions applied to safeguard customers ente-
electricity on the grid to ensure that deliveries and withdra-
red force. In this situation, the Authority modified the pro-
wals are balanced, electricity generated may be sold on a
cedures for determining raw material component, indexing
dedicated market, the Ancillary Services Market (ASM), whe-
it fully to spot market prices, introduced graduality compo-
re Terna procures the required resources from generators.
nents (including one specifically for the renegotiation of
The Authority and the Ministry for Economic Development
long-term contracts) and increased the component cove-
are responsible for regulating the electricity market. More
ring retail sales costs to enhance cost-reflectivity.
specifically, with regard to dispatching services, the Authori-
With regard to the raw material cost component (QE), on
ty has adopted a number of measures regulating plants es-
January 24, 2014, the Regional Administrative Court of
sential to the security of the electrical system. These plants
Lombardy, in the course of an action brought by Enel Ener-
are deemed essential based on their geographical location,
gia and Enel Trade, voided the resolutions by which the Au-
their technical features and their importance to the solution
thority changed the formula for determining (and thereby
of certain critical grid issues by Terna. In exchange for being
reducing) the QE component for the 2010-2011 and 2011-
required to have electricity available and providing binding
2012 gas years. On April 10, 2014, the Authority filed an
offers, these plants receive special remuneration determi-
appeal with the Council of State.
ned by the Authority.
With Decree Law 91 of June 24, 2014, all schedulable gene-
ration units located in Sicily with a capacity of more than 50
MW were declared “essential to system security”. The mea-
sure will be in force until the completion of the “Sorgente-
85
Rizziconi” interconnector between Sicily and Calabria and
Authority. In applying this mechanism, the Ministry for Eco-
the other works needed to increase interconnection capa-
nomic Development (MED) selected several of Enel Produ-
city. The essentially units are required, starting from January
zione’s plants using fuel oil for 2012-2013 and 2013-2014
1, 2015, to offer supply on energy and service markets and
gas years. The MED did not employ this mechanism for the
are entitled to fees to cover incurred generation costs based
2014-2015 gas year.
upon rules analogous to those that already apply to other
plans essential to system security.
Since the launch of the market in 2004, the regulations have
provided for a form of administered compensation for ge-
neration capacity. In particular, plants that make their ca-
Gas
Wholesale market
pacity available for certain periods of the year identified in
The extraction, import (from EU countries) and export of
advance by the grid operator to ensure the secure operation
natural gas have been liberalized.
of the national electrical system receive a special fee.
According to the provisions of Legislative Decree 130/2010,
In August 2011, the Authority published Resolution
operators cannot hold a market share that exceeds 40% of
98/2011, which establishes the criteria for introducing a
domestic consumption. This limit may be raised to 55% if
market mechanism for compensating generation capacity
the operator commits to creating 4 billion cubic meters in
that replaces the current administered reimbursement. This
new storage capacity by 2015. Under this provision, the
mechanism involves holding auctions through which Terna
Ministry for Economic Development approved Eni’s propo-
will purchase from generators the capacity required to en-
sed plan to create new storage in early 2011. As of today,
sure that the electricity system is adequately supplied in the
2.6 billion cubic meters in new storage capacity has been
coming years.
created. Law 9/2014 establishes that, in order to limit the
With a Decree of the Minister for Economic Development
costs for the system, the remaining storage capacity (up to
of June 30, 2014, the capacity market operational mechani-
4 billion cubic meters) be created only if there is market de-
sm previously issued for consultation by the Authority was
mand for it. The operators have not shown any interest in
approved.
the auctions held and, therefore, no further storage capaci-
The mechanism is based on the allotment, by auction, of op-
ty has been created.
tion contracts (reliability options) that provide for payment
Following the approval of the Parliamentary committe-
of a premium, established in the auction with the setting
es and the positive opinion of the Authority, on March 6,
of a marginal price, against which a generator undertakes
2013, the ministerial decree approving the rules for the na-
to return any positive difference between the price formed
tural gas forward market was signed, with operations be-
on the spot electricity and auxiliary services market and a
ginning on September 2, 2013. The forward market com-
benchmark price set ex-ante in the option contract.
pleted the structure of the Italian wholesale market, joining
The rules approved provide for a cap and a floor for the pre-
the spot trading platform (the “Gas Exchange”), which has
mium to be paid for existing capacity. The floor is paid for all
been operating since 2010, and the balance market begun
existing capacity and will be set by the Authority.
in December 2011 under the rules set by the Authority.
The first auctions for the award of option contracts will be
held in 2015, with delivery as from 2019-2020.
In order to cope with emergencies in the gas system, such
Transport, storage and regasification
as the one that occurred between February 6 and 16, 2012,
Transport, storage and regasification (of LNG) are subject to
Decree Law 83/2012 – ratified with Law 134 of August 7,
regulation by the Authority, which sets the rate criteria for
2012 – required the identification on an annual basis as
engaging in these activities at the start of each regulatory
from the 2012-2013 gas year of thermal generation plants
period (lasting 4 years) and updates the payments annually.
that can contribute to the security of the system thanks
With regard to gas transport rates, Enel Trade filed an appe-
to the use of fuels other than gas. Such plants, which are
al with the Regional Administrative Court challenging the
different from those essential to the electrical system, are
resolutions establishing the rate criteria for the 2014-2017
entitled to reimbursement of the costs incurred in ensuring
period and the approval of the amounts due for 2014. The
availability in the period from January 1 to March 31 of each
dispute concerning the previous rate period (2010-2013),
gas year on the basis of the procedures established by the
for which the Regional Administrative Court of Lombar-
86
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS dy accepted Enel Trade’s claim, is still pending before the
were envisaged for investments as from 2012 and further
Council of State.
increases (between 1.5% and 2%) are also envisaged for
Storage is carried out under a concession (for a maximum of
certain categories of investments (for example, medium-
20 years) issued by the Ministry for Economic Development
voltage lines in historical town centers, connection in areas
(MED) to applicants that satisfy the requirements of Legi-
with a high density of renewables generation). The X-factor
slative Decree 164/2000. The Decree of February 19, 2014
used in updating the operating costs component is 2.8%
of the MED changed the criteria for allocating capacity,
for distribution and 7.1% for metering.
establishing that it will be assigned solely through auction.
Electricity distribution is also subject to service quality rules,
LNG activities are subject to the grant of a special ministe-
under which the Authority establishes the annual trend le-
rial permit.
vels for the following service continuity indicators for custo-
Access to transport, storage and regasification capacity is
mers connected to low-voltage service:
provided through non-discriminatory mechanisms esta-
> duration of long service interruptions;
blished by the Authority, in order to guarantee third-part
> number of long and short interruptions.
access (TPA). The Ministry for Economic Development may
Each year distributors receive bonuses or penalties depen-
grant an exemption from the TPA rules to companies that
ding on whether their actual performance as determined
own storage or regasification plants or cross-border gas in-
using these efficiency indicators is better or worse than the
terconnectors. The exemption is granted upon the explicit
established trend values.
request of the companies involved and on the basis of an
With Resolution 483 of October 9, 2014, the Authority ini-
assessment of the benefits of the infrastructure for the sy-
tiated the process of defining the regulations on electricity
stem.
distribution and metering rates and service quality for the
Infrastructure and
Networks Division
Electricity
Distribution and metering
Enel Distribuzione provides distribution and metering
within the Infrastructure and Networks Division under a
30-year concession set to expire in 2030.
The distribution rates are set by the Authority at the start
of each regulatory period (lasting 4 years) based on cove-
ring the total cost of providing distribution and metering
services, considering operating costs, depreciation and an
appropriate return on capital.
The rate component covering operating costs is updated
annually using a price-cap mechanism (i.e. based on the
inflation rate and an annual rate of reduction of unit costs
called the X-factor). The return-on-capital and depreciation
components are revised each year to take account of new
investments, depreciation and the revaluation of existing
assets using the deflator for gross fixed capital formation.
For the 2014-2015 period, the Authority has reduced the
return-on-capital for distribution rate to 6.4% on the basis
of the yield on 10-year Italian government bonds (BTP).
In addition, increases of the return-on-capital rate of 1%
new regulatory period.
Energy efficiency
White certificates
Energy efficiency in final uses has been promoted in Italy
mainly through the Energy Efficiency Certificate mechani-
sm (EECs or white certificates) launched on January 1, 2005
in accordance with the provisions of the related decrees of
July 20, 2004.
The mechanism requires the MED to determine the natio-
nal energy savings targets that must be achieved each year
by distribution companies.
With the Decree of December 28, 2012, the MED establi-
shed the energy savings targets for the 2013-2016 period.
In order to avoid penalties, distributors must demonstrate
by May 31 of each year that they hold a number of whi-
te certificates equal to at least 50% (60% for years 2015-
2016) of their obligation, with the residual obligation be
covered in the subsequent years.
The Decree also set out the process for transferring mana-
gement of the white certificate mechanism to the Energy
Services Operator (GSE), while the Authority will remain
responsible for determining the rate grant using the new
criteria set out in the ministerial decree.
The Authority, with its Resolution 13/2014 of January 23,
2014, introduced a mechanism for recovering the costs of
87
purchasing white certificates. It allows distributors to reco-
on a system of comprehensive feed-in tariffs that have been
ver a cost equal to the market average, less a spread of €2
reduced by an average of 40% from the previous system.
per certificate.
The Decree sets an annual ceiling on total incentives (inclu-
The potential financial impact of the mechanism is signifi-
ding those already paid out under the previous Energy Ac-
cantly reduced, although distributors are still subject to the
counts) of €6.7 billion, which was reached on June 6, 2013.
“physical” obligation to deliver the EECs in order to meet
As a result the incentives under the Fifth Energy Account
the national targets.
ended as from July 6, 2013.
On June 30, 2014, the Authority set the definitive rate sub-
sidy for 2013 equal to €110.27/toe and the preliminary
rate subsidy for 2014 at €110.39/toe. The preliminary rate
subsidy will be revised based upon the final market prices
for the reference period.
Legislative Decree 102 of July 4, 2014, implementing Di-
rective 2012/27/EU on energy efficiency, set out the cu-
mulative national energy savings target for the 2014-2020
period to be achieved using a variety of incentives. It also
established that the EEC mechanism must result in a saving
at least 60% of such target by 2020.
The decree also required the MED, in the course of updating
the guidelines on the procedures for issuing EECs, to include
measures for making the mechanism more efficient, enhan-
cing energy savings achieved through measures aimed at im-
proving practices and preventing speculative practices.
Renewable Energy
Division
Renewable resources
other than solar power:
green certificates and
comprehensive tariffs
The primary incentive mechanism used is green certificates (in-
troduced with Legislative Decree 79/1999). Under this system,
electricity producers and importers are required to deliver a
share of renewable energy. This obligation can be satisfied by
purchasing green certificates from renewables generators.
The amount of the incentive depends upon the market va-
lue at which operators can purchase green certificates to
meet their obligation. This market value is set within a ran-
ge. The maximum value is equal to the price at which the
GSE places the certificates it holds on the market (calculated
as provided for in Article 2(148) of Law 244/2007), which
came to €114.46/MWh of renewables generation in 2013.
The minimum price is equal to the price at which the GSE
withdraws green certificates exceeding the required share
In Italy, a variety of mechanisms, differing by resource and
from the market. For the years in the period from 2012 to
size of plant, are used to encourage electricity generation
2015, that price is set at 78% of the difference between a
from renewable resources. The objectives and support in-
pre-set amount (€180/MWh) and the average sale price for
struments are established by Parliament in a manner consi-
electricity for the preceding year.
stent with EU directives in this sector, while implementation
Legislative Decree 28/2011, transposing Directive 2009/28/
is handled by the Energy Services Operator (GSE), which is
EC, and the associated ministerial Decree of July 6, 2012,
responsible for managing incentives for renewables.
substantially revised existing incentive mechanisms for
Solar power incentives -
Energy Account
Photovoltaic plants receive incentives through the so-called
Energy Account, which consists of the payment of feed-in
premiums over and above the price of the electricity for po-
wer delivered to the grid over 20 years.
With the ministerial Decree of July 5, 2012, the incentive
system for photovoltaics was overhauled in order to ensu-
re the more orderly growth of the sector and realign tariffs
with European averages. The Fifth Energy Account is based
plants that will enter service as from January 1, 2013.
More specifically, small plants (with a capacity of up to 5
MW, as well as hydroelectric plants up to 10 MW and geo-
thermal plants up to 20 MW) will receive incentives through
a comprehensive feed-in tariff mechanism, with rates (set
in the Decree) differentiated by type and size of the plant.
Larger plants will qualify for comprehensive incentives esta-
blished on the basis of Dutch auctions run by the GSE. Plant
owners must submit bids for a percentage reduction from
the opening price, equal to the comprehensive rate for the
last capacity bracket for small plants.
The green certificates mechanism will be gradually elimina-
ted through:
88
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS > the progressive reduction of the mandatory share to zero
increase in non-schedulable renewable resource plants
by 2015;
– essentially photovoltaic and wind – the Authority, with
> the provision of incentives to plants already participating
Resolution 281/2012, decided to eliminate the previous
in the green certificate system through rates equivalent
exemption from imbalancing payments as from January 1,
to the current withdrawal value of certificates (as from
2013, in order to foster better programming and integra-
2015).
tion of such plants into the national electrical system.
In order to ensure control of incentive costs, the Decree of
Following an appeal lodged by a number of associations of
July 6, 2012 set a ceiling of €5.8 billion on aggregate annual
renewables generators, the Council of State voided Resolu-
cost – including plants already receiving incentives through
tion 281/2012, at the same time establishing the standards
the green certificate system – of incentives for resources
to be followed by the Authority in properly regulating the
other than solar power.
subject matter. More specifically, the Council of State clarified
Restructuring of incentives
that non-schedulable renewable resource plants must parti-
cipate in sharing imbalancing costs, thereby avoiding impro-
per socialization of costs. Likewise, the regulation must take
Decree Law 145 of December 23, 2013, ratified as amen-
into account the specific characteristics of each resource in
ded by Law 9 of February 21, 2014, introduced a measure
terms of predicting the delivery of electricity to the grid.
for distributing over time a portion of the costs associated
The Authority, with Resolution 522 of October 23, 2014,
with incentives for renewable resources. More specifically,
reimposed imbalancing payments on NSRRs, in accordance
those who generate electricity from renewable resources
with the guidelines of the Council of State, starting from Ja-
other than solar power are given the option of extending
nuary 1, 2015.
the incentive period for seven years in exchange for a reduc-
tion in the incentive received. Non-participating producers
continue to receive the incentives under the original terms
(rate and duration), but lose the right to further incentives
for the same location involving electricity rates for 10 years
after the expiration of the incentive period.
Decree Law 91 of June 24, 2014 established that, starting
from January 1, 2015, the subsidized rate for energy gene-
rated by solar plants with a nominal capacity of more than
200 kW be restructured over an incentive period of 24 years,
Iberia and Latin America
Division
Spain
General information
rather than 20, without the imposition of interest. As an al-
In order to address the rate deficit problem, Law 24/2013,
ternative to restructuring the incentive, solar power produ-
amending Law 54/1997, which governed the electricity
cers may elect to reduce the incentive by 8% over the remai-
market, was published on December 26, 2013. The law
ning incentive period, that is, until the start of the 21st year
established a new mechanism for market operation and
of the incentive period. Those who accept the restructured
the regime applicable to sector activities and operators.
incentive will be able to take advantage of a subsidized loan
More specifically, it introduced the key principle concerning
from Cassa Depositi e Prestiti, in a maximum amount equal
the economic and financial sustainability of the electrical
to the difference between the incentive due at December
system. According to this principle, revenues must be suf-
31, 2014 and the “restructured” incentive.
ficient to cover all costs. In order to achieve this balance,
Imbalancing for non-
schedulable plants
In addition to direct incentives (special rates and green certi-
ficates), non-schedulable renewable resources (NSRRs) were
exempt from fees for imbalancing (the difference between
actual power delivered to the grid and planned power de-
liveries defined on the basis of energy markets). With the
a system for revising rates was introduced. The tempora-
ry differences between system costs and revenues will
be financed proportionally by all the participants in the
payment system. The law recognized a deficit cap of €3.6
billion for 2013, which can be securitized, in accordance
with the process set out in the regulation, and must be
recovered within 15 years. The government budget will
finance 50% of the annual compensation for the penin-
sular and extra-peninsular electrical system (Sistema Eléc-
89
trico Insular y Extrapeninsular - SEIE). The law establishes a
National coal subsidy
compensation rate for regulated activities fixed during the
initial regulatory period (which will end in December 2019)
equal to the average yield on 10-year Spanish government
securities plus 200 basis points (300 basis points for plants
that generate electricity from renewable energy resources,
co-generation and residual waste).
Along with the publication of Law 24/2013, the go-
vernment began to craft regulations governing: transport,
distribution and generation within the SEIE, renewables,
self-consumption, capacity payments and electricity sales.
A portion of these measures were launched in 2013 and
2014.
The gas sector is primarily regulated by Law 34/1998,
amended by Law 12/2007.
Regulated-activity deficit
In order to quantify the deficit for 2013, which is subject to
securitization, Law 24/2013 required that a supplementary
payment be made prior to December 1, 2014. This payment
was approved on November 26, 2014, resulting in a final defi-
cit of €3.5 billion, securitized by financial institutions.
Based upon the note issued by the Spanish national markets
and competition commission (Comisión Nacional de los Mer-
December 31, 2014 marked the conclusion of the period of
effect of Royal Decree 134/2010, which governed the pro-
cess of lifting the restrictions intended to promote a secure
coal supply. The decision of the European Commission ap-
proving the measure stated that the mechanism cannot be
extended.
Voluntary Price for Small Consumers
(PVPC)
Starting from April 2014, the Tarifa de Último recurso (TUR)
was replaced by the Precio Voluntario para el Pequeño Con-
sumidor (PVPC). This will be the price that the Comercializa-
dora de Último Recurso (CUR) will be required to offer eligi-
ble customers.
The cost of producing electricity contained in the PVPC will
be calculated based upon hourly prices reported in the day-
ahead and intraday markets for the corresponding billing
period. In addition to these costs the PVPC also covers the
costs of adapting their systems and other supply-related
costs. Furthermore, CURs are required to offer a fixed annual
price as an alternative to customers eligible for the PVPC.
cados y la Competencia - CNMC) and the calculations con-
Social bonus
tained in Regulation IET/2444/2014 of December 19, 2014,
which sets out the electricity access rates for 2015, rate balan-
ce should be achieved in 2014.
Renewable energy resources, co-
generation and waste
Law 24/2013 introduced the social bonus as a public service
obligation, the cost of which is borne by the parent compa-
nies of companies that generate, distribute and sell electri-
city in proportion to the sum of connection points and num-
ber of customers served. Endesa’s share was set at 41.61%
for 2014.
In 2014, development of the regulatory framework for
plants that generate electricity from renewable energy re-
Voluntary service interruptions
sources, co-generation and waste was completed:
> the remuneration system guarantees a return capital em-
ployed based upon the average yield on 10-year Spanish
government securities plus 300 basis points. This remu-
neration will be revised every six years;
> in addition to the revenues received from the sale of elec-
tricity on the market, plants will receive a fixed amount
intended to help them recover their investment costs.
Furthermore, if the production cost is higher than the
expected market price, the producer will receive supple-
mental remuneration to offset the difference;
> for new plants, the incentive amount will be determined
using competitive mechanisms.
Voluntary service interruption is a compensated service,
provided by those consumers who are to reduce their con-
sumption when the system is under stress, making it possible
to efficiently manage demand.
Regulation IET/2013/2013 requires that voluntary service in-
terruption be assigned through an auction managed by the
System Operator so as to ensure effective performance of
the service and to minimize the costs to the system. During
November and December 2014, two auctions were held to
assign the service. The cost for voluntary service interruption
will amount to €508 million in 2015. This amount is no longer
a regulated cost for the system since it is financed by the end
customers who buy such electricity.
90
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Extra-peninsular electrical systems
Other regulatory changes
Law 17/2013, which addresses the security of supply and
On October 15, 2014, Law 18/2014 concerning urgent me-
the promotion of competition in the island and extra-penin-
asures for expansion, competition and efficiency enhance-
sular electrical systems, established that new plants in these
ment was approved. Among other things, the law reforms
electrical systems owned by companies (or groups of com-
the methods for remunerating the gas system with the goal
panies) that hold more than 40% of the installed capacity in
of making it economically sustainable and of minimizing the
the specific electrical system receive the peninsular market
costs for the end consumer. Furthermore, the law introdu-
price (there are, however, a few exceptions to this rule).
ces the National Energy Efficiency Fund to help achieve the
The law also provides that the System Operator will be the
energy efficiency targets.
sole owner of pumping and regasification plants.
During 2014, work on transposing the guidelines set out in
Law 17/2013 continued. In the course of this, the proposed
Latin America
Royal Decree governing the generation and dispatching in the
The Division operates in Latin America (Argentina, Brazil,
island and extra-peninsular systems, currently under discus-
Chile, Colombia and Peru) through Endesa. Each country has
sion, establishes a system similar to the present one, which
its own regulatory framework, the main features of which
is comprised of a reimbursement of fixed costs (investment
are described below for the various business activities.
costs, operating costs and overheads) and a reimbursement
for variable costs (to cover fuel costs and variable maintenan-
ce and operating costs). In January 2015, the Ministry of Indu-
Generation
stry, Energy and Tourism presented a new draft of the Royal
Under the regulations established by the competent autho-
Decree, which also incorporates taxation drawn from Law
rities (regulatory authorities and ministries) in the various
15/2012 on fiscal measures for energy sustainability.
countries, operators are free to make their own decisions
In addition, in accordance with Law 24/2013 on the elec-
concerning investment in generation. Only in Argentina, fol-
tricity sector, the remuneration rate for net investments is
lowing the change in energy policy in recent years, is there a
equal to the average yield on 10-year Spanish government
regulatory framework that envisages greater public control
securities plus 200 basis points.
of investments. In Brazil plans for new generation capacity
Distribution
are imposed by ministerial order, and this capacity is develo-
ped through auctions open to all.
All of the countries have a centralized dispatching system
Royal Decree 1048/2013 establishes the principles for the
with a system marginal price. Usually, the merit order is cre-
remuneration of the distribution of electricity with incor-
ated based on variable production costs that are measured
porates factors that will guide future compensation for this
periodically, with the exception of Colombia, where the me-
activity. The principles set out in the decree are as follows:
rit order is based on the bids of market operators.
> only the costs required to provide distribution service are
Currently in Argentina and Peru, regulatory measures are
remunerated;
in place governing the formulation of the spot market pri-
> mechanisms for controlling investments are established;
ce. In Argentina, the measure, adopted in 2002 following
> investments that have not yet been amortized or depre-
the economic and energy crisis that affected that country,
ciated are remunerated on the basis of the net value of
is based on the assumption that there are no restrictions
the asset and the rate of remuneration is equal to the
on the supply of gas in the country. Nevertheless, in view
average yield on Spanish government securities plus 200
of the current financial challenges faced by the wholesale
basis points;
market, the government has announced its intention to
> in order to improve quality and reduce losses and fraud,
modify the existing regulatory framework and, in 2013-
the regulation includes incentive and penalty mechani-
2014, develop an electricity market based on a cost-plus
sms;
model.
> during 2014 and lasting until the new regulatory period
Long-term auction mechanisms are widely used for whole-
begins, the remuneration for distribution was calculated
sale energy and/or capacity sales. These systems guarantee
by applying the methodology envisaged in the second
continuity of supply and offer greater stability to generation
annex to Royal Decree Law 9/2013.
companies, with the expectation that this encourages new
91
investments. Long-term sales contracts (up to 30 years) are
part in a variety of activities in the electricity sector (gene-
used in Chile, Brazil, Peru and Colombia. In Brazil, the price
ration, distribution, sales). Usually, greater restrictions are
at which electricity is sold is based on the average long-term
imposed on participation in transmission activities so as to
auction prices for new and existing energy. In Colombia, the
ensure that all operators have adequate access to the net-
price is set by auction between the operators, which usually
work. There are special restrictions on generation and distri-
enter into medium-term contracts (up to four years). Final-
bution companies holding stakes in transmission companies
ly, a regulatory framework recently introduced in Chile and
in Argentina, Chile and Colombia. Furthermore, in Colombia
Peru allows distribution companies to sign long-term con-
companies formed after 1994 may not adopt or maintain a
tracts to sell electricity on regulated end-user markets.
vertically-integrated structure.
Chile, Peru and Brazil have also approved legislation to en-
As to concentration within the industry, Argentina, Brazil
courage the use of unconventional renewable resources,
and Chile have not set any specific restrictions on vertical
which sets out the objectives for the contribution of renewa-
or horizontal integration, while in Peru business combina-
ble resources to the energy mix and governs their generation.
tions require prior authorization above certain thresholds.
Distribution and sale
In Colombia, no company may control more than 25% of
the generation and sales markets, while in Brazil, as pre-
viously mentioned, there are no explicit restrictions on in-
Distribution is performed mainly under concession arrange-
tegration in the electricity sector, although administrative
ments, using long-term contracts (ranging from 30 to 95 ye-
authorization is required for business combinations that
ars or in some cases with unspecified terms), with regulations
would result in market share of over 40%, or that involve a
governing prices and network access. Distribution rates are
company whose annual turnover exceeds BRL 400 million
revised every four years (Chile, Peru and the region of Brazil
(about €177 million).
served by Coelce) or five years (Colombia and the region of
Brazil served by Ampla). As a result of the Ley de Emergencia
Económica (the economic emergency law) of 2002, no rate
Chile
reviews have yet been conducted in Argentina, despite rules
mandating such revisions every five years.
Law on interconnection
On January 30, 2014, a law on interconnection derogating from
In Chile, Brazil and Peru, distribution companies hold auctions
the provisions of the General Law on electricity services was pro-
to procure electricity for regulated market customers, while
mulgated. Under the new provisions, the state may promote
in Colombia sales companies negotiate prices directly with
interconnection projects between the northern interconnected
generation companies, passing through the average market
system (SING) and the central interconnected system (SIC).
price to end users. In general, all countries have implemen-
ted a remuneration approach based on the RAB and a rate of
return tied to the WACC, which ensures remuneration of the
capital employed.
Energy Agenda
On May 15, 2014, President Michelle Bachelet presented the
new Energy Agenda containing the primary energy policy
The liberalization of the end-user market is generally at a
targets. The document sets out the timetable and identifies
fairly advanced stage, though not yet complete. Eligibility
the parties involved in the next regulatory steps to be taken
thresholds are set at 30 kW in Argentina (20% of volumes
and lays out the plans of investments that the government
in 2010), 3 MW in Brazil (30% of volumes), 0.3 MW in Chi-
intends to make by the end of its term.
le (40% of volumes), 0.1 MW in Colombia (35% of volumes
More specifically, the Agenda envisages a more active role
in 2010) and 0.2 MW in Peru (44% of volumes). Free-market
by the state and calls for reducing marginal electricity costs
customers can sign bilateral contracts with generation com-
on Chile’s Sistema Interconectado Central, or “SIC” (30% re-
panies for electricity. The regulatory authorities set the rates
duction in the 2013 average by 2017), redefining the rules
for regulated market customers.
for auctions between generators and distributors in order
Limits on concentration and vertical
integration
to reduce the resulting price (25% reduction over the next
10 years as compared with the 2013 price), setting a target
for 45% of new installed capacity to be supplied by uncon-
ventional renewable energy (ERNC) by 2025, establishing
In principle, existing legislation permits companies to take
the target of cutting energy consumption by 20% by 2020,
92
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS establishing a system for participation in energy planning,
which permits distributors to turn to the Conta de Desenvol-
developing interconnection projects between the SIC and
vimento Energético (CDE) to cover additional costs arising
the SING (Sistema Interconectado del Norte Grande) and, fi-
from their involuntary exposure to the spot market and
nally, introducing a new law for the promotion of geother-
from thermal dispatching. The Brazilian regulation guaran-
mal power by 2015.
tees full coverage during the subsequent rate cycle.
Furthermore, the Agenda contains both short-term (aimed
Also for this purpose, on April 2, 2014, the government
at making access to regasification structures more transpa-
published Decree 8.221, which, as an alternative to the re-
rent) and long-term measures (aimed at expanding current
covery of additional costs through the rate cycle, envisages
capacity) for encouraging the use of natural gas in genera-
providing immediate financial coverage for distributors by
ting electricity.
Argentina
setting up a new regulated environmental trading account
(Conta ACR), which will be managed by the Câmara de Co-
mercialização de Energia Elétrica (CCEE). On April 28, 2014,
following the receipt of bank financing, the CCEE reimbur-
Resolution 529/2014
On May 20, 2014 the Secretaría de Energía published Reso-
sed Ampla and Coelce for a part of the higher costs incurred
as a result of this involuntary exposure to the spot market
lution 529/2014, which updated, retroactively starting from
price and the coverage of the higher costs of transporting
February 2014, the remuneration received by generation
the electricity from the generation plant.
companies, previously established by Resolution 95/2013.
On November 25, 2014, ANEEL approved the new ceiling
In addition to raising the remuneration for fixed and varia-
and floor on the differences settlement price (Precio de Li-
ble costs, the new resolution introduces a new item inten-
quidación de las Diferencias - PLD) for 2015. The decision
ded to cover extraordinary maintenance costs, which will
has generated a great deal of debate, beginning with public
be paid through the issuance of LVFVDs (Liquidaciones de
consultation 09/2014 and subsequently at the public hea-
Venta con Fecha de Vencimiento a Definir).
ring 54/2014.
Secretaría de Energía Note 4012
On June 24, 2014 the Secretaría de Energía approved Note
The main effect of the new limits is that of reducing the fi-
nancial impact of possible future risks associated with con-
tractual exposure on the spot market on distributors, as well
4012, which establishes the inflation rate (cost monitoring me-
as mitigating the irreversible risk of business and financial
chanism “MMC” index) for EDESUR for the period between Oc-
exposure if production falls below contractual requirements
tober 2013 and March 2014 and allows it to be offset against
on producers.
the corresponding debt in respect of the PUREE program for
This settlement mechanism ensures that the 2014 deficit is
the same period, as was previously allowed for the period
offset by appropriate rates in 2015.
between February 2013 and September 2013 by Note 6852.
Finally, on December 10, 2014, an addendum to the conces-
Brazil
Technical note 112/2014-SRE-ANEEL - revi-
sion of 2014-2018 Ampla rates
On April 7, 2014, the regulator, ANEEL, approved technical
note 112/2014-SRE-ANEEL concerning the revision of the
rates applied by electricity distributor Ampla, taking effect
as from March 15, 2014. It ensures recognition of all capital
sion contract for Brazilian distributors (Ampla and Coelce) was
signed, permitting the recognition of receivables associated
with the 2014 deficit, ensuring their recovery through reco-
gnition of the regulated assets as part of the capital that can
be offset at the end of the concession period, in the event it is
not possible to offset it during the contract period via the rate.
Full recognition of ICMS costs
On March 11, 2014, ANEEL, during the 7th ordinary meeting
expenditure and operating costs incurred by the distributor.
of its board, approved Coelce’s request to fully recognize
The average increase for consumers will be equal to 2.64%,
both future and past (from 2003 to 2013) sales tax (ICMS)
applicable starting from April 8, 2014.
paid to generators. Recovery of the amounts through rates
Involuntary exposure of distributors to the
spot market
On March 7, 2014, the government published Decree 8.203,
On May 20, 2014, the federal public prosecutor’s office re-
quested that the adjustment of Coelce’s rates be suspen-
ded. The action is aimed at stopping the recovery of ICMS
will take place over four years, starting from April 2014.
93
through the rate, as established by ANEEL, thereby limiting
delaying the closing of two nuclear power plants and intro-
the rate increase to 13.68% (rather than 16.77%).
ducing support instruments for conventional plants.
International Division
France
Law 344/2014 - Suspension of
regulated electricity and gas rates for
industrial customers
Romania
Market coupling
On April 29, 2014, the Romanian national regulator (ANRE)
published the market coupling model integrating the Slo-
vakian, Czech and Hungarian day-ahead trading markets.
On September 11, 2014, ANRE approved the regulation
establishing its rules of operation. The common trading
On March 27, 2014, the country’s Official Journal publi-
platform went live on November 19, 2014.
shed Law 344/2014, establishing the gradual abolition of
regulated electricity and gas rates for industrial consumers,
starting from January 1, 2015 for the gas sector and from
Regulated rates
January 1, 2016 for the electricity sector.
Based upon the calendar for liberalizing the Romanian re-
On June 18, 2014, the energy transition bill, which sets out
tail market, the electricity rates for residential customers
the four basic guidelines for the new national energy stra-
for 2014 remain regulated by 80% in the first Half of the
tegy, was presented:
year and 70% in the second Half. Non-residential custo-
> cutting greenhouse gases by 40% by 2030 compared
mers are no longer eligible for regulated rates starting
with 1990 levels;
from July 1, 2014. As of that date residential customers
> achieving a renewable energy target of 32% of overall
received a 2.6% reduction in the average final unit price,
gross energy consumption by 2030 (around 40% of ove-
mainly as a result of the 46% decline in the co-generation
rall electricity consumption);
tax. However, this reduction was partly offset by the intro-
> reducing overall energy consumption by 50% by 2050;
duction of a new tax on special construction, which affects
> capping nuclear capacity at 63.2 GW and reducing the
the cost of generation and has caused a 1.89% increase in
share of nuclear power to 50% of domestic generation
the regulated rate.
by 2025.
The bill was adopted by the National Assembly on October
14, 2014 and will be sent to the Senate for examination
Energy efficiency
within the next few months.
Law 121 on energy efficiency, issued on July 18, 2014, impo-
Belgium
sed new obligations on sellers in terms of information that
must be disclosed in billing. Furthermore, it establishes the
criteria for launching the new smart metering systems and
On March 26, 2014 the law creating a strategic reserve
requires that distribution companies must have an energy
designed to provide a secure energy supply was adopted.
manager and perform an energy audit every four years.
Under the law, an operator that decides to close a plant
At the same time, the launch of smart meter pilot projects
must notify the regulator well ahead of time and, if the
was postponed from 2014 to 2015, with a resulting exten-
regulator believes it necessary, it must present an offer to
sion of the timeline for their wide-scale installation.
make the plant available to the grid operator, who will use
it to maintain balance in the system. The law prohibits the
closure of thermal plants that are needed to provide a se-
Distribution rates
cure supply of energy.
On November 5, 2014, the national regulator made the fol-
On July 22, 2014, the tender for the construction of two new
lowing changes to the methodology for determining the
gas plants was concluded. However, no bid was accepted.
distribution rates approved in 2013 for the third regulatory
The new Belgian government, formed on October 10, 2014,
period covering the years 2014 through 2018:
announced various measures in the energy field, including
> distributors will benefit from efficiencies achieved with
94
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS regard to grid losses at the end of the regulatory period,
The heat market
rather than on an annual basis;
> for the fourth regulatory period (2019-2023), the Regu-
latory Asset Base (RAB) recognized at the beginning of
2019 will no longer be indexed to the inflation rate;
> the ex-post bonus of 0.5% on the Weighted Average
Cost of Capital (WACC) for smart meters was eliminated.
In addition, on December 12, 2014, the regulator, ANRE,
reduced the real pre-tax WACC recognized from 8.52% to
7.7% starting from January 1, 2015. The new distribution
rates for 2015 were published on December 19, 2014. Only
the rates for the distribution company Banat experienced a
reduction of 2-3%.
Russia
Government Decree 505/2014 -
Decisions on wholesale and capacity
rates
On June 4, 2014, the government published the decree
establishing that capacity market (KOM) prices will remain
as indexed for 2014 (equal to 6.5%, in line with the increase
in the CPI for 2013) and eliminating, starting from 2015, in-
dexing for KOM prices and the regulated capacity and ener-
gy rates for 2014 and 2015.
Government Decree 820/2014
- Rules on the operation of the
wholesale electricity market and
capacity auctions for 2014
With Government Decree 820/2014, published on August
20, 2014, the Government presented more stringent requi-
rements for participation in auctions, seeking to encourage
generation companies to comply with planned maintenan-
ce schedules and the orders of the system operator. The
main measures envisaged in the decree include:
> the elimination of capacity payments if limits set by the
system operator for maintenance are exceeded (180 days
a year or 360 days over four years);
> an increase, as from January 2015, in the value of a num-
ber of penalty coefficients pre-agreed with power gene-
rators;
> introduction of an option to submit capacity bids for
plants in operation for more than 55 years and a live ste-
am pressure of less than 9 megapascal only if they had a
utilization factor of more than 8% the previous year.
On October 2, 2014, Government Decree 1949/2014 was
published, setting out the main stages of the reform of the
heat market. With regard to the liberalization of prices for
end users, the decree provides for a transition period du-
ring which prices are defined with respect to the price of a
domestic boiler (to be calculated using an as-yet undefined
method) using annual indexing of rates. The decree also de-
fines the “Unified Heat Suppliers” (UHS) who act as system
operators, suppliers and commercial distributors in their
respective zones. The implementation of the new market
design should be completed by the start of 2023. The tran-
sition period will begin in 2015, during which the detailed
measures for implementing the reform are expected to be
issued.
On December 1, 2014, Federal Law 404/2014 concerning
heat supplies was enacted. It represents one of the first im-
plementing acts of the reform of the heat market. The law
introduces, with effect from January 1, 2015, the possibility
of entering into bilateral contracts for heat producers and
consumers of steam and/or industrial users of directly con-
nected heat, with prices being negotiable up to a ceiling de-
termined on the basis of the relevant tariffs. As from January
1, 2018, it will also be possible to use bilateral contract for
the supply of steam and/or heat at fully liberalized prices
for directly connected industrial users, with the exception of
users with an annual consumption of less than 50,000 giga-
calories (GCal) (including residential customers).
Start of trading on gas exchange
On October 24, 2014, trading began on the first gas exchan-
ge in Russia, established by the St. Petersburg International
Mercantile Exchange (SPIMEX). For now, the only contracts
traded are for volumes to be delivered in the subsequent
month, but in the near future the exchange will also offer
weekly and daily products. Gazprom and other indepen-
dent gas producers are being encouraged to channel some
of their output through the trading platform. The exchan-
ge rules give Gazprom the right to handle half of the vo-
lumes, with independent suppliers handling the remainder.
For 2015, the goal is to achieve a trading volume of at least
35 billion cubic meters. The volumes of gas traded on the
exchange have priority in transportation. The launch of the
gas exchange is a key stage in the liberalization of the gas
market and enhancing price transparency.
95
Slovakia
General information
> suppliers of auxiliary services and suppliers electric elec-
tricity to the transmission grids, as well as hydroelectric
plants with an installed capacity of less than 5 MW, were
exempted from the mechanism;
The wholesale market has been liberalized completely and
> as regards the must-run obligation of the ENO plant, the
has become increasingly liquid thanks to transparent, well-
variable costs directly associated with the purchase of li-
operated regional trading platforms. The Slovakia - Czech
Republic - Hungary market coupling project seeks to improve
gnite, the purchase of CO2 allowances and other costs
(water, naphtha, other additives) will be considered as
the conditions necessary to increase liquidity and short-term
eligible costs and will be reimbursed. Fixed costs will
balancing.
be adjusted on the basis of the utilization factor of the
More than half of the electricity generated in Slovakia is produ-
plant.
ced by nuclear power plants, following by conventional ther-
mal and hydroelectric power. Lignite is the only domestic fossil
fuel used in electricity generation. This is the reason its use is
Energy efficiency
considered to be in the “general economic interest” and is re-
Directive 2012/27/EC on energy efficiency was transposed
gulated under special rules, which govern the operation of the
into national legislation in October 2014. The main ele-
Nováky power plant (ENO). The remuneration system will be
ments of the law transposing the directive are: the defini-
in effect until 2020 and the local regulatory authority (URSO)
tion of a regulatory framework for energy efficiency in order
recognizes the costs incurred by the plant in an annual decree.
to achieve the targets set out in the directive; the establi-
The regulation of renewables generation underwent a swee-
shment of non-binding targets for energy companies; the
ping reform with the enactment of Law 309/2009. The sup-
introduction of energy savings obligations in the residential
port mechanism uses a feed-in tariff guaranteed for 15 years.
sector; the definition and implementation of energy audits,
All customers can choose their own supplier and the market
energy services and energy performance contracts; and the
has been entirely liberalized since 2007. Final prices for resi-
specification of the rights and duties of national monitoring
dential customers and small and medium-sized companies
authorities.
that consume no more than 30 MWh per year are still regula-
ted by the local regulatory authority (URSO).
On November 5, 2014, the government adopted a new ener-
gy policy that sets the objectives and priorities for the energy
Suspension of the Gabčíkovo
hydroelectric plant
sector through 2035, including the construction of a nucle-
Following the Slovakian government’s decision to termina-
ar power plant, the continuation of the rules applied to the
te the contract between Slovenské elektrárne and the state-
Nováky thermal plant and the extension of the operating per-
owned company Vodohospodárska výstavba, operation of
mit for the Slovenské elektrárne nuclear plant.
the Gabčíkovo hydroelectric plant will be suspended as of
March 10, 2015.
Decree on the regulation of the
electricity industry
URSO Decree 221/2013 on the regulation of the electricity
industry received final approval in July 2013. The main issues
Renewable Energy
Division
addressed can be summarized as follows:
> with regard to fees for access to the transmission and di-
Bulgaria
stribution grids (G-component), an access fee was levied
on generators connected to the transmission or distribu-
tion grids, to apply as from 2014. The fee was set at a
maximum of €0.5/MWh for generators connected to the
transmission grid, while for generators connected to the
distribution grid the fee is calculated at 30% of the cost
of the reserved capacity, with no cap;
The Bulgarian incentive system primarily uses resource-
based feed-in tariffs. On-shore wind plants, photovoltaic
plants, hydroelectric plants of less than 10 MW and biomass
plants of less than 5 MW are eligible for these incentives.
The government made the following amendments to the
law on renewable resources:
> reduced the incentive period from 15 to 12 years for all
96
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS resources, except for photovoltaic, for which the period
> reduction of feed-in tariffs for new plants entering service
was cut from 25 to 20 years;
after April 1, 2014;
> the rates are calculated annually (June) and are held con-
> elimination of the mechanism for adjusting the feed-in ta-
stant during the entire incentive period (without inde-
riffs at 25% of the consumer price index;
xing);
> extension of the validity of power purchase agreements
> eligibility for incentives takes effect as from the date the
(PPAs) by seven years on certain conditions.
work is completed.
In the course of approving the 2014 Budget Act, two further
measures charged to renewables generators were introdu-
Romania
ced, which take effect as from January 2014:
The main form of incentive in Romania for all renewable ener-
> a tax of 20% on profits from the sale of electricity;
gy resources is the green certificates system. The only excep-
> a cap on the amount of electricity that can be sold to
tion regards hydroelectric plants with a capacity of more than
the national market operator (NEK) at the preferential
10 MW, which are not eligible for any incentive mechanism.
prices.
Sellers are required to purchase a specified share of renewa-
In June 2014, the Bulgarian regulator began to require re-
ble energy each year through the purchase of green certifica-
newable energy producers to make imbalancing payments.
tes on the basis of annual targets set by law for the share of
In order to stabilize the balancing market, the government
gross generation from renewables. The Romanian regulator
announced a number of measures in December, such as in-
publishes the mandatory share, revised to balance supply and
troducing a ceiling on imbalancing prices (range of between
demand. The value of the green certificates varies on the ba-
€0 and €100/MWh) and a number of changes to the metho-
sis of coefficients that differ by generation technology. The
dology for calculating imbalancing costs.
price of the green certificates is determined by law within a
Greece
specified range (cap & floor). Sellers are subject to penalties
in the event of non-compliance. The measure temporarily
modifying the green certificate system (EGO 57/2013) was is-
The Greek incentive system uses a feed-in tariff differen-
sued in June and received final approval in December 2013. It
tiated by renewable energy resource. The incentives are
temporary suspended (from July 1, 2013 to March 31, 2017)
awarded through a 20-year contract for all resources, with
trade in part of the green certificates due to renewables ge-
the exception of roof-mounted photovoltaic systems with a
nerators. Trading in the deferred green certificates could gra-
capacity of less than 10 kW, which have a 25-year contract.
dually resume after April 1, 2017 for photovoltaic and mini-
Law 4092/2012, partially modified in May 2013 by Law
hydro and after January 1, 2018 for wind, continuing until
4153/2013, introduced a temporary tax (July 2012 - June
December 2020.
2014) on the revenues of existing renewable energy plants
On December 16, 2013, Resolution 994/2013 was published.
(equal to 10% for all renewable technologies except for
It reduced the number of green certificates for new plants as
photovoltaic, for which the tax is either 37-42% or 34-40%
from January 1, 2014. More specifically, 1.5 certificates per
based upon the plant’s commercial operation date).
MWh of wind generation until 2017 (after 2017, 0.75 green
On March 30, 2014, the Greek parliament approved Law
certificates), 3 certificates per MWh of photovoltaic output
4254 – the so-called “New Deal” – seeking to rationalize sub-
and 2.3 certificates per MWh of hydroelectric generation.
sidies for renewables. The main changes, which took effect
On March 19, 2014, the Romanian government reduced the
as from April 1, 2014, include:
share of electricity generated from renewables to be incenti-
> a partial reduction of the revenues registered in 2013
vized in 2014 to 11.1% from 15%.
with the issue of a credit note (10% on revenues from
On June 11, 2014 the government approved a Decision, pu-
wind and mini-hydro and 35-37.5% on revenues from
blished in the Official Journal on July 4, 2014, that introduces
photovoltaics);
a mechanism for the exemption from the obligation to ac-
> a reduction, as from April 1, 2014, of the feed-in tariffs
quire green certificates for a number of large electricity users.
(FITs) applied to existing plants of about 6% for wind and
The measure was approved by the European Commission on
mini-hydro plants and about 45% on photovoltaic plants,
October 15, 2014. The support system, which has a term of
and the consequent elimination of the Turnover Tax in for-
10 years and is applicable as from December 1, 2014, will re-
ce until the end of June 2014;
duce the obligation in a variable amount depending on the
97
level of consumption and expenditure on electricity of each
the next phase of the process. With regard to the appeal of
company, up to a maximum of 85%.
the Ministerial Order, the Spanish Supreme Court was asked
On December 12, 2014 the government approved the share
for additional information and, once this information is pre-
of electricity generated from renewables to be incentivized in
sented, Enel Green Power will have 20 business days starting
2015 to 11.9% from 16%.
from the date of receipt of such documentation in which to
Spain
submit its claims.
On August 5, 2014, Ministerial Order IET/1459/2014 was pu-
blished. It defines the parameters for remuneration and the
The Spanish incentive system for renewables was mainly ba-
mechanism for assigning specific remuneration rules to new
sed on feed-in tariff and feed-in premium mechanisms. The
wind and photovoltaic plants in the extra-peninsular electri-
energy policies for both 2012 and 2013 mainly focused on
cal systems.
the need to resolve the “rate deficit” problem. That is why,
with Royal Decree Law 1/2012, the Spanish government su-
spended the pre-register procedures and eliminated incenti-
Portugal
ve mechanisms for new renewable energy projects not alrea-
The rate system for wind farms is primarily based upon a feed-
dy entered in the register.
in tariff mechanism. On June 24, 2014, Decree Law 94/2014
Law 15/2012 introduced a tax of 7% on electricity generated
was published in an effort to increase the capacity of existing
with any technology and a royalty of 22% for the use of water
wind farms that meet certain technical requires and wind re-
for electricity generation (reduced by 90% for plants with a
sources. The Decree Law governs the conditions for delive-
capacity of less than 50 MW).
ring power in excess of the connection capacity to the grid
In 2013, Royal Decree 2/2013 eliminated the option of remu-
and the associated remuneration.
neration based on the market price plus a feed-in premium,
leaving only the feed-in tariff option (price of energy inclu-
ded) or the market price, with no premium, and modified the
Latin America
basis of the indexing used for the feed-in tariff for renewables
The development of renewable energy resources in Latin
and cogeneration.
America is less diversified than in Europe. In particular, the
As part of the reform of the electricity sector begun in July
territory has historically had electric matrixes with a large
2013 through the adoption of Royal Decree Law 9/2013, on
number of major hydroelectric plants, although in the last
June 6, 2014 Royal Decree 413/2014, regulating production
few years a gradual diversification has been under way. The
from renewable energy resources, co-generation and resi-
main remunerative approach involves long-term power pur-
dual waste, was approved. The decree introduces a new re-
chase agreements (PPA), tax incentives and facilitated tran-
muneration system based on the concept of “reasonable pro-
sport rates.
fitability”, which is equal to the yield on 10-year government
securities plus 300 basis points. For the first regulatory pe-
riod, lasting six years starting from June 2013, the return on
Brazil
investment is expected to be 7.4% in real terms before taxes.
The incentive system for renewable energy in Brazil was crea-
The new system calls for remuneration based on the sale of
ted in 2002 with the implementation of a feed-in mechanism
electricity at the market price, to which supplemental annual
(PROINFA), and was then harmonized with the sales system
remuneration is added only in the event the market price is
for conventional power using competitive auctions. The auc-
not enough to ensure the established reasonable profitabili-
tions are divided between new plants and existing plants and
ty. Any supplemental remuneration is calculated based upon
comprise:
the standard operating and investment costs of an efficient,
> Leilão Fontes Alternativas, reserved to renewable wind,
well-run company and for clusters of plants. These standard
biomass and hydroelectric technologies up to 50 MW;
parameters were determined on June 20, 2014 with the ap-
> Leilão Energia de Reserva, for which all projects that will en-
proval of Ministerial Order IET/1045/2014. On July 8, 2014,
ter operation within three years of the date on which the
Enel Green Power filed an administrative appeal of Royal De-
auction is held are eligible. These auctions are normally or-
cree 413/2014 and Ministerial Order IET/1045/2014. As to
ganized to increase reserve capacity and/or promote the
the appeal of the Royal Decree, the company is waiting for
development of certain technologies (such as renewables);
98
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS > Leilão de Energia Nova, for which all projects that will
All renewable energy resources are eligible for the purposes
enter operation more than three years after the date on
of meeting the requirement. For hydroelectric plants with a
which the auction is held are eligible. These auctions are
capacity of up to 40 MW, the system provides for a correcti-
divided into A-3 and A-5 auctions on the basis of the ge-
ve factor which counts all of the first 20 MW and a declining
nerator’s obligation to supply the energy awarded after
proportion of the capacity between 20 and 40 MW. The me-
three or five years.
chanism also establishes penalties for failure to achieve the
An auction typically has two phases: the descending-clock
mandatory share.
phase in which the auction organizer establishes the opening
In May 2014, the country’s new Energy Agenda was presen-
price for the auction and the generators submit decreasing
ted, setting out the primary energy policy targets, the next
bids; and the pay-as-bid phase in which the remaining gene-
regulatory steps to be taken and the plans of investments
rators further reduce the price until the supply of power co-
that the government intends to make in its next term. Spe-
vers all the demand up for auction. The winning bidders are
cifically with regard to renewables, the Agenda confirms the
granted long-term contracts whose term varies by resource:
target of cutting energy consumption by 20% by 2025 and
15 years for thermal biomass plants, 20 years for wind plants
introduces an additional target that 45% of new capacity to
and 30 years for hydroelectric plants.
be installed between 2014-2025 be supplied by renewable
Four auctions were held in 2014, resulting in contracts being
power plants.
signed for a total of more than 8 GW (of which more than 90%
for new capacity). More specifically, on October 31, 2014, the
first federal reserve auction, with a block of capacity reserved
Mexico
for solar power was held, with around 890 MW awarded.
In 2014, the laws and regulations resulting from the im-
On December 17, 2014, the Ministry of Energy published
portant energy reform measures, published on December
the new sector expansion plan (PDE2023 - Plano Decenal de
20, 2013 and intended to reorganize the energy and oil
Expansão de Energia), which envisages significant growth in
industries, were gradually approved and published.
renewable capacity. Based upon the plan presented, the go-
In August, the secondary energy reform legislation was pu-
vernment estimates that wind capacity will rise an average of
blished. With regard to the electricity sector, the following
2 GW per year until 2023, while solar and biomass capacity
were published:
will account for around 13% of total installed capacity in Bra-
> Ley de la Industria Eléctrica, which calls for the introduc-
zil by 2023.
tion of a competitive power generation market and the
On November 25, 2014, with Resolution 1832, the regulator,
creation of an independent operator to manage the
ANEEL, modified the range in which the differences settle-
market, the introduction of a clean energy certificates
ment price (Preço de liquidação das diferenças - PLD) is per-
mechanism and the establishment of rules governing the
mitted to fluctuate, setting the new floor (around €12/MWh)
transition period prior to the official launch of the whole-
and ceiling (around €151/MWh).
sale power market;
Chile
> Ley de Energía Geotérmica, which defines a special regu-
latory framework for exploration activities and electricity
generation from geothermal resources, the mechanism
Chile has a system mandating achievement of specified re-
for identifying areas to be concessioned and the proce-
newable energy targets for those who withdraw power for
dures for awarding such concessions;
sale through distributors or sales companies. The law sets two
> Ley de la Comisión Federal de Electricidad, which redefi-
different targets based upon the date the contract is signed:
nes the role and structure of the former public electricity
> for all power under contract between August 31, 2007
monopolist (Federal Electricity Commission - CFE).
and June 30, 2013, renewable resources are to account
On October 31, 2014 the relative regulations, including the
for 5% of the electricity starting from 2014, an amount
guidelines for a “Certificados de Energía Limpia” mechanism
that will increase by 0.5% per year to reach a share of
to achieve the target of 35% of electricity generated from
10% by 2024;
non-polluting resources by 2024, were published. This re-
> for all contracts signed starting from July 1, 2013, Law
quirement will come into force starting from 2018 and the
20698 of 2013 sets a target of 20% by 2025 to be achie-
corresponding target will be determined by March 2015.
ved by gradually raising the initial share of 6% in 2014.
In preparation for the launch of the wholesale market,
99
scheduled for January 1, 2016, the independent mar-
Panama
ket operator (CENACE - Centro Nacional de Control de la
Energía) was officially established.
With regard to the remuneration of plants generating po-
wer from renewable resources, the regulatory framework
prior to the reform was based upon the renewables pro-
motion law (LAERFTE), published in 2008. Specifically, pri-
vate investors participated as either as independent power
producers who sold all their output to the Comisión Fede-
ral de Electricidad using auction mechanisms, self-suppliers
or small-scale producers (with an installed capacity of less
than 30 MW) who sold their output at rates governed by
the Comisión Federal de Electricidad.
In line with the new regulatory structure:
> plants in operation on the date the market is launched
and those party to an interconnection contract will be
permitted to maintain the remuneration arrangement
they had prior to the reform;
> new plants and those that are not yet party to an inter-
connection contract will be able to take advantage of
a different sales system introduced under the reform
(auctions for supplying regulated customers, bilateral
contract with free-market customers and wholesale spot
On June 12, 2013, in line with an energy policy directed at
diversifying the energy mix, the Panamanian government
ratified Law 605, which establishes tax incentives to support
the development of solar power. The new incentives pro-
vide for an exemption from import tax, tax credits and the
option of acceleration depreciation.
On March 31, 2014, the President of the Republic published
Resolution 41, authorizing payment of $75 million, to be
spread out between March 31, 2014 and December 31,
2016, to the Enel Group hydroelectric plant Fortuna. This
amount was authorized as a result of production restric-
tions imposed by the government on the plant due to the
government’s delay in expanding the Panama transmission
grid.
On October 22, 2014 Resolution AN 7966 was published,
introducing the option of exporting electricity through the
Regional Electricity Market. The measure will allow market
operators to bypass the current limitations of the transmis-
sion grid in expectation of its expansion, which is scheduled
to occur between 2016 and 2017.
market) that is currently being defined.
Costa Rica
In the first few months of 2015 the Federal Electricity Com-
mission (Comisión Federal de Electricidad) will identify the
sites where it plans to autonomously develop geothermal
power and those sites that will later be auctioned off to
private investors for development (Ronda Zero).
Central America
SIEPAC - Regional Electricity Market
The final section of the SIEPAC transmission line for the Re-
gional Electricity Market (REM), officially launched on June
1, 2013 by the regional regulator (CRIE - Comisión Regional
de Interconexión Eléctrica), was completed on September
29, 2014.
During the second Half of 2014, CRIE also issued a series of
resolutions designed to complete the regional regulations
and terminate the transitional system in place since March
2013. The implementation of regional regulations marks
the first step towards the consolidation of the rules gover-
ning cross-border trade in electricity among six countries in
Central America (Guatemala, El Salvador, Honduras, Nicara-
gua, Costa Rica and Panama).
The regulator, ARESEP, modified the rates for new and exi-
sting renewable power plants based upon the results of a
series of public consultations held in November. The chan-
ges will have a positive impact on existing plants (hydro-
electric and wind), the rates for which were increased by
13%. However, the effect on new plants will be negative
since the rate was reduced by 16% compared with the
2014 level.
USA
The United States has a two-level renewables incentive sy-
stem. The federal level envisages various types of support,
including tax incentives for production and investment (the
Production Tax Credit and the Investment Tax Credit), acce-
lerated depreciation and federal subsidies. At the state level,
the main incentive is a Renewable Portfolio Standard (RPS)
mechanism, i.e. a system of mandatory percentages of ge-
neration from renewables for utilities, with targets differing
from state to state. Most states have adopted systems of tra-
dable certificates but there is no corresponding platform acti-
ve at the federal level.
The Production Tax Credit (PTC), the tax incentive to encou-
rage renewable electricity generation, expired at the end
100
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS of 2013. It was renewed by the Tax Increase Prevention Act
Purchase Agreement with the national utility, Eskom, with
of December 20, 2014. Thanks to this extension, eligible
payments guaranteed by the government.
projects that were “under construction” by December 31,
2014 could qualify for the PTC. The Internal Revenue Service
(IRS) is expected to issue additional guidelines defining the
concept of “continuous efforts”, which is required for quali-
fication, in the first and second Quarter of 2015.
The Investment Tax Credit, the tax incentive for investment in
renewables, is still applicable to plants that enter service by
December 31, 2016.
On June 2, 2014, the Environmental Protection Agency
(EPA) published a proposed regulation for fossil-fuel power
plants currently in operation that aims to achieve a 30% re-
duction in CO2 emissions by 2030 as compared with 2005
levels. Specific emission-reduction targets were established
for each state and they were given ample flexibility in the
policies and strategies to be adopted. The consultation pha-
se has been completed and the proposal is currently being
revised, but the EPA expects it to be definitively approved by
the third Quarter of 2015. In that case, the states will have
until June 2016 to present their plans for reaching the tar-
gets to the EPA.
South Africa
In May 2011, South Africa approved a target of 17.8 GW of
installed renewable capacity by 2030 based upon the long-
term energy strategy set out in the 2010-2030 Integrated
Resource Plan. The primary tool to be used in achieving this
target is the Renewable Energy Independent Power Pro-
ducer Procurement (REIPPPP), an auction system launched
in 2011 that seeks to install around 7 GW in new renew-
able capacity between 2014 and 2020 (hydroelectric <40
MW, concentrated solar and photovoltaic, wind, biomass,
biogas and landfill gas power). Currently, fiive rounds (bid
windows) are scheduled, four of which have already been
held. As of now, around 5,000 MW of capacity has been
awarded, including Round 4, the winners of which will be
announced in the first Quarter of 2015.
After a pre-qualification phase, which is concerned with
technical and financial issues, qualified projects are cho-
sen based upon two criteria: the bid price (weighted 70%)
and the economic development content of the project
(weighted 30%). The latter is based upon a series of pa-
rameters focusing on the economic development of the
country, including local content and the creation of jobs
for South Africans, especially non-whites.
The winners will be invited to enter into a 20-year Power
101
Main risks and uncertainties
Due to the nature of its business, the Group is exposed to
country/business line level, for managing and controlling
a variety of risks, notably market risks, credit risk, liquidity
financial risks (market, credit and liquidity risks) that assign
risk, industrial and environmental risks and regulatory risk.
strategic policy-making and supervision responsibilities for
In order to mitigate its exposure to these risks, the Group
risk management to special committees, establish policies
conducts specific analysis, monitoring, management and
and procedures for identifying risk management and con-
control activities, as described in this section.
trol roles and responsibilities and define a system of opera-
From an organizational standpoint, Enel adopts governance
tional limits.
arrangements, both at the Group level and at the Division/
Risks connected with market liberalization
and regulatory developments
The energy markets in which the Group operates are cur-
generation mix, improving the competitiveness of plants
rently undergoing gradual liberalization, which is being im-
through cost leadership, seeking out new high-potential
plemented using different approaches and timetables from
markets and developing renewable energy resources with
country to country.
appropriate investment plans in a variety of countries.
As a result of these processes, the Group is exposed to incre-
The Group often operates in regulated markets or regulated
asing competition from new entrants and the development
regimes, and changes in the rules governing operations in
of organized markets.
such markets and regimes, and the associated instructions
The business risks generated by the natural participation
and requirements with which the Group must comply, can
of the Group in such markets have been addressed by in-
impact our operations and performance.
tegrating along the value chain, with a greater drive for
In order to mitigate the risks that such factors can engender,
technological innovation, diversification and geographical
Enel has forged closer relationships with local government
expansion. More specifically, the initiatives taken have incre-
and regulatory bodies, adopting a transparent, collabo-
ased the customer base in the free market, with the aim of
rative and proactive approach in tackling and eliminating
integrating downstream into final markets, optimizing the
sources of instability in regulatory arrangements.
Risks connected with CO2 emissions
In addition to being one of the factors with the largest po-
tential impact on Group operations, emissions of carbon
dioxide (CO2) are also one of the greatest challenges facing
the Group in safeguarding the environment.
tigate the risk factors associated with CO2 regulations, the
Group monitors the development and implementation of
EU and Italian legislation, diversifies its generation mix to-
wards the use of low-carbon technologies and resources,
EU legislation governing the emissions trading scheme im-
with a focus on renewables and nuclear power, develops
poses costs for the electricity industry, costs that could rise
strategies to acquire allowances at competitive prices and,
substantially in the future. In this context, the instability of
above all, enhances the environmental performance of its
the emissions allowance market accentuates the difficulties
generation plants, increasing their energy efficiency.
of managing and monitoring the situation. In order to mi-
102
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Market risks
As part of its operations, Enel is exposed to a variety of
separation of units responsible for operations and those in
market risks, notably the risk of changes in interest rates,
charge of managing risk.
exchange rates and commodity prices.
The financial risk governance system also defines a system
The financial risk governance arrangements adopted by the
of operating limits at the Group and individual Division/
Group establish specific internal committees responsible for
business line levels for the various types of risk, which are
policy setting and supervision of risk management, as well
monitored periodically by risk management units.
as specific policies at the Group and individual Division/bu-
To maintain market risk within the limits set out in the
siness line levels that establish the roles and responsibilities
Group’s risk management policies, Enel uses derivatives
for risk management, monitoring and control processes,
obtained in the market.
ensuring compliance with the principle of organizational
Risks connected with commodity prices and supply
continuity
Given the nature of its business, Enel is exposed to changes
risk and the implementation of a hedging strategy using
in the prices of fuel and electricity, which can have a signifi-
derivatives.
cant impact on its results.
For a more detailed examination of commodity risk mana-
To mitigate this exposure, the Group has developed a stra-
gement and the outstanding derivatives portfolio, please
tegy of stabilizing margins by contracting for supplies of
see note 41 of the consolidated financial statements.
fuel and the delivery of electricity to end users or wholesa-
In order to limit the risk of interruptions in fuel supplies,
lers in advance.
the Group has diversified fuel sources, using suppliers from
The Group has also implemented a formal procedure that
different geographical areas and encouraging the construc-
provides for the measurement of the residual commodity
tion of transportation and storage infrastructure.
risk, the specification of a ceiling for maximum acceptable
Exchange rate risk
The Group is exposed to the risk that changes in the exchan-
> financial assets/liabilities measured at fair value.
ge rates between the euro and the main other currencies
The consolidated financial statements are also exposed to
could give rise to adverse changes in the euro value of per-
the exchange rate risk associated with the consolidation va-
formance and financial aggregates denominated in foreign
lues of equity investments denominated in currencies other
currencies. The exposure to exchange rate risk, which is
than the euro (translation risk).
mainly denominated in US dollars, is attributable to:
Exchange rate risk is managed within the Group policies for
> cash flows in respect of the purchase or sale of fuel or
managing financial risks, which provide for the stabilization
electricity on international markets;
of the effects of changes in exchange rates with the exclu-
> cash flows in respect of investments in foreign currency,
sion of translation risk. To this end, the Group has develo-
dividends from unconsolidated foreign subsidiaries or
ped operational processes that ensure the systematic cove-
the purchase or sale of equity investments;
rage of exposures through appropriate hedging strategies,
> financial liabilities assumed by the holding company or
which typically involve the use of financial derivatives.
the individual subsidiaries denominated in currencies
For more details, please see note 41 of the consolidated fi-
other than the currency of account or functional currency
nancial statements.
of the company holding the liability;
103
Interest rate risk
The nature of the financial risks to which the Group is expo-
Our interest rate risk management policy seeks to maintain
sed is such that changes in interest rates could give rise to
the risk profile established within the framework of the for-
increases in net financial expense or adverse changes in the
mal risk governance procedures of the Group, curbing bor-
value of assets/liabilities measured at fair value.
rowing costs over time and limiting the volatility of results.
The main source of exposure to interest rate risk for the Enel
This goal is pursued through the strategic diversification of
Group comes from the fluctuation in the interest rates as-
the nature of our financial assets and liabilities and the use
sociated with its floating-rate debt and from the need to
of derivatives on over-the-counter markets.
refinance debt falling due on changing market terms and
For more details, please see note 41 of the consolidated fi-
conditions.
nancial statements.
Credit risk
The Group’s commercial, commodity and financial opera-
As part of the management of credit risk even more effec-
tions expose it to credit risk, i.e. the possibility that an unex-
tively, for a number of years the Group has carried out non-
pected change in the creditworthiness of a counterparty
recourse assignments of receivables for specific segments of
could impact the creditor position, in terms of insolvency
the commercial portfolio. Partly in view of the macroecono-
(default risk) or changes in its market value (spread risk).
mic environment, as from 2011 the use of assignments was
Beginning in the last few years, with the instability and
extended both geographically and to invoiced receivables
uncertainty of the financial markets and the global econo-
and receivables to be invoiced of companies operating in
mic crisis, average payment times for trade receivables by
other segments of the electricity industry than retail sales
counterparties have increased. In order to pursue the mini-
(such as, for example, receivables from generation activities,
mization of credit risk, the Group’s general policy calls for
sales of electricity as part of energy management opera-
the application of uniform criteria in all the main regions/
tions, the sale of green certificates or electricity transport
countries/business lines for measuring credit exposures in
services).
order to promptly identify any deterioration in credit quality
All of the above transactions are considered as non-recourse
– determining any mitigation actions to implement – and
transactions for accounting purposes and therefore invol-
to enable the consolidation and monitoring of exposures at
ved the full derecognition of the corresponding assigned
the Group level.
assets from the balance sheet, as the risks and rewards asso-
As regards credit risk in respect of commodities transactions,
ciated with them have been transferred.
Enel uses a uniform counterparty assessment system across
the Group, which has also been implemented at the local
level. Beginning in 2013, portfolio limits approved by the
Liquidity risk
Group Credit Risk Committee were applied and monitored by
Liquidity risk is the risk that the Group, while solvent, would
region/country/business line and at the consolidated level.
not be able to discharge its obligations in a timely manner
As to credit risk in respect of financial transactions, including
or would only be able to do so on unfavorable terms owing
those involving derivatives, risk is minimized by selecting
to factors connected to the perception of its riskiness by the
counterparties with high credit ratings from among lea-
market or to systemic crises (credit crunches, sovereign debt
ding Italian and international financial institutions, portfo-
crises, etc.).
lio diversification, entering into margin agreements for the
As part of the Group’s formal risk governance procedures,
exchange of cash collateral, and/or the use of netting arran-
risk management policies are designed to maintain a level
gements. In 2014, operating limits on credit risk approved
of liquidity sufficient to meet its obligations over a specified
by the Group Financial Risk Committee were again applied
time horizon, without having recourse to additional sources
and monitored, using an internal valuation system, at both
of financing, as well as to maintain a prudential liquidity buf-
the individual region/country/business line level and at the
fer sufficient to meet unexpected obligations. In addition, in
consolidated level.
order to ensure that the Group can discharge its medium and
104
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS long-term commitments, Enel pursues a borrowing strategy
efforts and the large contribution of regulated activities.
that provides for a diversified structure of financing sources
At the end of the year Enel’s rating was: (i) “BBB” for Stan-
to which it can turn and a balanced maturity profile. Liquidity
dard & Poor’s with a stable outlook; (ii) “BBB+”, with a stable
requirements are primarily met through cash flows genera-
outlook for Fitch; and (iii) “Baa2”, with a negative outlook
ted by normal operations, ensuring the appropriate manage-
for Moody’s.
ment of any excess liquidity.
In order to optimize liquidity management within the Group,
Enel SpA (directly and through its subsidiary Enel Finance
Country risk
International NV) meets the cash needs of the Group com-
By now, more than 50% of the revenues of the Enel Group
panies through centralized access to the money and capital
are generated outside Italy. The major international expan-
markets and provides management and coordination servi-
sion of the Group – located, among other countries, in Latin
ces for Group companies that can access market financing
America and Russia – therefore requires the Group to assess
directly.
its exposure to country risk, namely the macroeconomic,
Underscoring the Enel Group’s continued capacity to access
financial, regulatory, market, geopolitical and social risks
the credit market despite the recent crisis in the financial mar-
whose manifestation could have a negative impact on inco-
kets, in 2014 the Group carried out bond issues with a total
me or jeopardize corporate assets. In order to mitigate this
value of €2.4 billion, of which €1.6 billion by Enel SpA, in the
form of risk, the Group has adopted a country risk calcula-
form of hybrid instruments, and €436 million by Endesa Chile
tion model (using a shadow rating approach) that specifi-
in the form of Yankee Bonds.
cally monitors the level of country risk in the areas in which
In the final Quarter of 2014, Enel Finance International NV
the Group operates.
initiated a liability management program in the total amount
Overall, the world economy experienced a hesitant recovery
of €4 billion, to be executed by December 31, 2015. It is in-
in economic activity in 2014, and the risk of a relapse in the
tended to optimize the management of excess liquidity, ena-
next two years still threatens. World trade, which is expan-
bling the reduction of gross debt, lowering the average cost
ding more slowly than in the period before the financial cri-
of funds and improving the maturity profile.
sis six years ago, struggled to gain traction until the autumn
The Company subsequently carried out its first transaction
of last year.
with the repurchase of its own bonds with a total nominal
In Europe, growth in 2015 is forecast to rise to 1.7% for the
value of €762 million.
European Union as a whole and 1.3% for the euro area,
For more information, please see note 40 “Financial instru-
while in 2016 those rates are expected to rise to 2.1% and
ments” to the consolidated financial statements.
1.9% respectively, thanks to stronger internal and external
Rating risk
demand, a very accommodative monetary policy stance and
a broadly neutral fiscal stance.
The prospects for growth in Europe as a whole are still dam-
Credit ratings, which are assigned by rating agencies, impact
pened by an unfavorable environment for investment and
the possibility of a company to access the various sources of
high unemployment. Key developments last autumn impro-
financing and the associated cost of that financing. Any re-
ved the short-term outlook, however: oil prices fell more ra-
duction in the rating could limit access to the capital market
pidly than before, the euro depreciated sharply, the ECB an-
and increase finance costs, with a negative impact on the
nounced it would begin a quantitative easing program and
performance and financial situation of the company.
the European Commission presented its investment plan for
At the end of 2014, despite the downgrade of Italian Repu-
Europe. All of these factors will have a positive impact on
blic securities (BBB- with a stable outlook, compared with
growth.
BBB and a negative outlook previously), Standard & Poor’s
The macroeconomic projections for the US economy are
confirmed Enel’s rating at BBB with a stable outlook.
very optimistic, reflecting the highly expansionary monetary
That decision mainly reflected the Group’s broad geographi-
policy stance and the very positive data on unemployment,
cal and technological diversification outside Europe, as well
which has fallen considerably.
as the expectation that the Company will achieve and main-
The outlook for other areas of the world is mixed, althou-
tain performance and financial targets commensurate with
gh still positive. In Japan, the increase in value-added tax in
its current rating as a result of its continued deleveraging
April 2014 harmed the economy more than expected. Given
105
the expansionary stance of monetary policy, in the coming
Any residual risk is managed using specific insurance poli-
Quarters the Japanese economy should return to moderate
cies to protect corporate assets and provide liability covera-
growth. In China, economic activity has remained relatively
ge in the event of harm caused to third parties by accidents,
robust, but is structurally low (6-7%), which is hardly surpri-
including pollution, that may occur during the production
sing given the level of development the country has achie-
and distribution of electricity and gas.
ved and the potential constraint represented by the labor
As part of its strategy of maintaining and developing its cost
force. The situation in other major emerging economies is
leadership in the markets in which it has generation ope-
varied: while the Indian economy is picking up steam, the
rations, the Group is involved in numerous projects for the
recovery in Brazil is shaky. Once again, expectations for Rus-
development, improvement and reconversion of its plants.
sia have deteriorated: as a result of the geopolitical tensions
These projects are exposed to the risks commonly associa-
over Ukraine and the low price of oil, the country has slipped
ted with construction activities, which the Group mitigates
into a recession that threatens to trigger a foreign exchange
by requiring its suppliers to provide specific guarantees and,
crisis. The state of alert in the Middle East and North Afri-
where possible, obtaining insurance coverage against all
ca remains high owing to developments in Syria and Libya,
phases of construction risk.
which could trigger lasting changes in regional and global
New risk assessment models were also developed for
balances, with consequent uncertainty that could impact
project risk management, which enable the Group, as part
the global macroeconomic environment.
of its capital intensive initiatives, to measure the quantitati-
ve and statistical aspects of postponements of the commer-
cial operation date and the potential increase in investment
costs due to the associated risks, including those posed by
environmental factors.
With regard to nuclear power generation, Enel operates in
Slovakia through Slovenské elektrárne and in Spain throu-
gh Endesa. In relation to its nuclear activities, the Group is
exposed to operational risk and may face additional costs
because of, inter alia, accidents, safety violations, acts of ter-
rorism, natural disasters, equipment malfunctions, malfun-
ctions in the storage, movement, transport and treatment
of nuclear substances and materials. In the countries where
Enel has nuclear operations, specific laws based on interna-
tional conventions require operators to obtain insurance co-
verage for liability for risks associated with the use and tran-
sport of nuclear fuel, with coverage ceilings and other terms
and conditions set by law. Other mitigating measures have
been taken in accordance with international best practices.
Industrial and
environmental risks
Breakdowns or accidents that temporarily interrupt opera-
tions at Enel’s plants represent an additional risk associated
with the Group’s business.
Industrial and environmental risks are managed by the
Global Generation business line using statistical modeling
techniques, which assess risks in probabilistic and moneta-
ry terms for each plant/grid/project. In addition to typically
industrial risk models (business interruption, operation and
maintenance), Enel has developed models to measure di-
saster risks linked to seismic events, a model for assessing
fire risks and environmental models to assess the exposure
of each plant to risks involving all possible segments of the
environment, such as the air, water, land and underground.
All of this is done with the objective of identifying the most
critical areas and preparing appropriate instruments to safe-
guard the industrial value of plants.
During 2014, Enel developed an assessment model for in-
dustrial and environmental risks for the Upstream Gas area.
In addition, we also conducted exercises to assess risks as-
sociated with the operation of the distribution networks
managed by the Infrastructure and Networks business line.
In order to mitigate such risks, the Group adopts leading
prevention and protection strategies, including preventive
and predictive maintenance techniques and technology
surveys to identify and control risks, and recourse to inter-
national best practices.
106
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Outlook
In order to compete effectively in the macroeconomic envi-
include managing new smart distribution grids and expan-
ronment of today and tomorrow and, at the same time, seize
ding our range of value-added products and services in retail
new business opportunities in the energy industry, the Enel
markets. The active management of our portfolio will be tar-
Group is shifting to a new industrial strategy based on four
geted at the disposal of non-strategic assets and subsequent
key pillars: i) achieving high levels of operating efficiency
reinvestment of the proceeds in order to create value and
through the optimal management of the costs and mainte-
rationalize the Group structure. Finally, Enel has decided to
nance capex of our assets; ii) reviving the Group’s “industrial”
introduce a new dividend policy, which lends certainty to the
growth with a sharp increase in growth capex; iii) actively ma-
pay-out in the short term and creates scope for substantial
naging our portfolio with a view to creating value; and iv) the
growth in the medium to long term.
Group’s new dividend policy. The Enel Group’s new business
The Group has a unique presence in the world utilities mar-
plan therefore sets out the priorities and action plans neces-
ket, thanks both to its size in absolute terms and its highly
sary to pursue these objectives. In order to boost operating
diversified base of generation technologies. In addition, we
efficiency, we will leverage our new global business lines in
have established a well-balanced position along the entire
order to share internal best practices for optimizing opera-
value chain and are extremely well diversified geographically.
ting expenses and managing assets efficiently. The new path
Our new organizational structure will enable management
to industrial growth will be sustained by major investment in
to exploit these strengths effectively, expanding our sources
promising growth markets and businesses, beginning with
of value creation more rapidly and more incisively in the hi-
renewables, by expanding our positioning in areas where we
ghly turbulent and diversified evolution of the global envi-
are already operating, such as in Latin America, and entering
ronment in which we operate.
new countries, partly with a view to subsequently positio-
On the basis of the key factors outlined above, the targets set
ning ourselves in other businesses. Other growth areas will
out in the business plan are reported below.
2016
~15.0
~3.1
0.18
55
24
2017
~15.6
~3.4
60
27
CAGR 2015-2019
~3%
~10%
~17%
~9%
Recurring EBITDA
Net ordinary income
Minimum dividend
Pay-out
Operating cash flow/Net financial
debt
Billions of euro
Billions of euro
euro/share
%
%
Gross capex
Cash flow from operations
Free cash flow
Billions of euro
Billions of euro
Billions of euro
Net free cash flow (after dividends)
Billions of euro
2015
~15.0
~3.0
0.16
50
21
2015-2019
34.0
~49.5
~15.5
~1.5
107
Other information
Non-EU subsidiaries
At the date of approval by the Board of Directors of the fi-
Enersis SA (a Chilean company belonging to the Endesa
nancial statements of Enel SpA for 2014 – March 18, 2015
Group); and 17) Enel Russia (a Russian subsidiary of Enel
– the Enel Group meets the “conditions for the listing of sha-
Investment Holding BV);
res of companies with control over companies established
> the balance sheet and income statement for the 2014 fi-
and regulated under the law of non-EU countries” (herei-
nancial statements of the above companies included in
nafter “non-EU subsidiaries”) established by CONSOB with
the reporting package used for the purpose of preparing
Article 36 of the Market Rules (approved with Resolution
the consolidated financial statements of the Enel Group
16530 of June 25, 2008, as amended).
will be made available to the public by Enel SpA (pur-
Specifically, we report that:
suant to Article 36, paragraph 1a) of the CONSOB Market
> in application of the materiality criteria for the purposes
Rules) at least 15 days prior to the day scheduled for the
of consolidation provided for in Article 36, paragraph 2,
Ordinary Shareholders’ Meeting called to approve the
of the CONSOB Market Rules, 17 non-EU subsidiaries of
2014 financial statements, together with the summary
the Enel Group have been identified to which the rules in
statements showing the essential data of the latest an-
question apply on the basis of the consolidated accounts
nual financial statements of subsidiaries and associated
of the Enel Group at December 31, 2013.
companies (pursuant to the applicable provisions of Ar-
They are: 1) Ampla Energia e Serviços SA (a Brazilian com-
ticle 77, paragraph 2-bis, of the CONSOB Issuers Regula-
pany belonging to the Endesa Group); 2) Chilectra SA (a
tion approved with Resolution 11971 of May 14, 1999,
Chilean company belonging to the Endesa Group); 3)
as amended);
Compañía Distribuidora y Comercializadora de Energía
> the articles of association and composition and powers
- Condensa SA ESP (a Colombian company belonging
of the control bodies from all the above subsidiaries have
to the Endesa Group); 4) Companhia de Interconexão
been obtained by Enel SpA and are available in updated
Energética SA - CIEN (a Brazilian company belonging to
form to CONSOB where the latter should request such in-
the Endesa Group); 5) Compañía Eléctrica do Tarapacá
formation for supervisory purposes (pursuant to Article
SA - Celta (a Chilean company belonging to the Endesa
36, paragraph 1b) of the CONSOB Market Rules);
Group); 6) Companhia Energética do Cearà - Coelce SA
> Enel SpA has verified that the above subsidiaries:
(a Brazilian company belonging to the Endesa Group);
- provide the auditor of the Parent Company, Enel SpA,
7) Edegel SA (a Peruvian company belonging to the En-
with information necessary to perform annual and in-
desa Group); 8) Emgesa SA ESP (a Colombian company
terim audits of Enel SpA (pursuant to Article 36, para-
belonging to the Endesa Group); 9) Empresa de Distri-
graph 1 c-i) of the CONSOB Market Rules);
bución Eléctrica de Lima Norte - Edelnor SAA (a Peruvian
- use an administrative and accounting system appro-
company belonging to the Endesa Group); 10) Empresa
priate for regular reporting to the management and
Distribuidora Sur - Edesur SA (an Argentine company
auditor of the Parent Company, Enel SpA, of income
belonging to the Endesa Group); 11) Empresa Nacional
statement, balance sheet and financial data necessa-
de Electricidad - Endesa Chile SA (a Chilean company
ry for preparation of the consolidated financial state-
belonging to the Endesa Group); 12) Endesa Brasil SA (a
ments (pursuant to Article 36, paragraph 1 c-ii) of the
Brazilian company belonging to the Endesa Group); 13)
CONSOB Market Rules).
Enel Green Power Chile Limitada (a Chilean company be-
longing to the Enel Green Power Group); 14) Enel Green
Power North America Inc. (a US company belonging to
the Enel Green Power Group); 15) Enel Kansas LLC (a US
company belonging to the Enel Green Power Group); 16)
108
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Approval of the financial statements
The Shareholders’ Meeting to approve the financial state-
mit of 120 days from the close of the financial year, permitted
ments, as provided for by Article 9.2 of the bylaws of Enel
under Article 2364, paragraph 2, of the Italian Civil Code, is
SpA, shall be called within 180 days of the close of the finan-
justified by the fact that the Company is required to prepare
cial year. The use of that time limit rather than the ordinary li-
consolidated financial statements.
Disclosures on financial instruments
The disclosures on financial instruments required by Article
ment”, note 33 “Derivatives and hedge accounting” and note
2428, paragraph 2, no. 6-bis of the Civil Code are reported
34 “Fair value measurement” to the separate financial state-
in note 31 “Financial instruments”, note 32 “Risk manage-
ments of Enel SpA.
Transactions with related parties
For more information on transactions with related parties, please see note 35 to the separate financial statements of Enel SpA.
Own shares
The Company does not hold treasury shares nor did it engage in transactions involving own shares during the year.
Atypical or unusual operations
Pursuant to the CONSOB Notice of July 28, 2006, Enel did not
the transfer price or timing could give rise to doubts concer-
carry out any atypical or unusual operations in 2014.
ning the propriety and/or completeness of disclosure, con-
Such operations include transactions whose significance, size,
flicts of interest, preservation of company assets or protection
nature of the counterparties, object, method for calculating
of minority shareholders.
Subsequent events
Significant events following the close of the year are discussed in note 50 to the consolidated financial statements.
109
110
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Sustainability
111
How we operate
At Enel, sustainability is a strategic, integrated part of busi-
ting and managing any socio-environmental impact.
ness management, development and growth with a view
Framing this entire process are the principles of ethics,
to creating value over the medium to long term, both for
transparency, anti-corruption, human rights and safety
the Company and for all of our stakeholders.
that have always been a distinctive feature of Enel’s ope-
rations and which are a part of policies and standards of
For the first time under Enel’s new organizational struc-
conduct that are applicable throughout the Group.
ture, a specific Innovation & Sustainability unit reports
directly to the Chief Executive Officer so as to undersco-
In 2012, in recognition of the latest international trends
re the fact that these two areas of activity make an inte-
and innovations, Enel began a process of identifying and
gral contribution to creating a new model of business and
assessing the interests and expectations of the various
competitiveness for the Company. At the country level, we
stakeholders and integrating them into business strategy
have also appointed sustainability managers, who report
in accordance with the procedures and processes throu-
directly to the country manager in order to implement the
gh which the Company is meeting their expectations (i.e.
Group’s strategy guidelines and policies at the local level
the materiality analyses). The union of these two points of
and to develop the sustainability projects and other activi-
view will make it possible to identify the issues that, due to
ties specific to each area.
their relevance and significance, are of central importance
It is a model aimed at achieving an increasing level of in-
to both Enel and our stakeholders and to then verify the
tegration of sustainability within our business and related
degree of alignment or misalignment between external
strategies by defining true support mechanisms and ensu-
expectations and internal relevance. Within such context,
ring periodic disclosures as well as communications within
stakeholder-engagement efforts are to be strengthened
the Company.
in 2015 in order to understand and monitor the needs and
expectations of the various stakeholders.
This model is fully in line with the indications of the Uni-
ted Nations Global Compact, of which Enel has been an
These efforts are the starting point from which to define
active member since 2004, reiterating the importance of
and develop the priorities that the Group intends to pur-
an increasing integration of sustainability within a com-
sue over the coming years and to set specific targets and
pany’s strategic decision-making processes. A specific
objectives.
training program, the Global Compact Board Programme,
The 2015-2019 sustainability plan focuses on the following
involving a number of international experts as facilitators
areas of commitment:
of dialog with boards of directors, is currently under way.
> creating economic and financial value;
Enel was one of the first organizations in the world to have
> governance and transparency;
participated in the pilot phase of the program, and the
> natural resources, climate and the environment;
first training session with the Group’s Board of Directors
> development of human resources;
was held in November 2014.
> access to energy;
Integration of sustainability into business processes is ba-
munities;
sed on, and further extends, the experience gained within
> programs and other initiatives for customers and suppliers;
> shared value and responsible relationships with the com-
the Group in developing models of operations (for Busi-
> health and safety.
ness Development, Engineering & Construction, and Ope-
ration & Maintenance) aimed at creating shared, inclusive
Enel undertakes to constantly manage and measure su-
value over the medium to long term.
stainability performance by using and developing mecha-
Indeed, the efficiency and efficacy of business processes,
nisms that allow for an integrated, standardized system
during both development and operations, depend signifi-
of projects and information that are kept constantly up to
cantly on the creation of stable, constructive relationships
date based on developments in the scope of operations
with the various stakeholders as well as on the ability to
and relevant standards, while promoting the sharing of
become a synergistic part of the community while preven-
best practices and experience.
112
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS With a view towards increasing transparency towards our
vestment funds, which continue to increase in number. As
stakeholders, the Group monitors and actively participates
of December 31, 2014, 134 socially responsible investors
in the development of new frontiers in reporting towards
held shares in Enel capital (vs. 117 in 2013) for a total inte-
integrated communication of performance, both finan-
rest held of 5.9% in Enel shares in circulation (vs. 5.5% in
cially and in other areas. For example, we have contributed
2013), equal to 8.6% of the float (vs. 8% in 2013).
to defining the G4 guidelines of the Global Reporting Ini-
tiative (GRI) and have contributed to the pilot program of
For the eleventh straight year, Enel’s commitment in this
the International Integrated Reporting Council (IIRC), and
regard has been recognized by being included in the Dow
we will also be supporting the GRI in defining the project
Jones Sustainability Index, a market benchmark which in-
“Reporting 2025” in order to promote international dialog
cludes the world’s leading companies that meet strict eco-
on the future of sustainability reporting.
nomic, social and environmental criteria.
In 2014, we were also included in the selective Dow Jones
The reporting process involves collecting and calculating
Sustainability World index and earned the prestigious Gold
specific key performance indicators of economic, envi-
Class recognition for sustainability in the 2015 RobecoSAM
ronmental and social sustainability, in accordance with the
Sustainability Yearbook, a publication now in its twentieth
GRI international standards and the Electric Utility Sector
edition and which assesses the sustainability performance
Supplement (EUSS), as well as with the principles of ac-
of the world’s leading corporations. Enel is one of only th-
countability of the United Nations Global Compact.
ree Gold Class organizations in the Electric Utility segment
and one of only four Italian Gold Class corporations.
Projects, activities, performance and the other main results
For the first time, Enel has also been included in the STOXX
are presented in Enel’s Sustainability Report, which this
Global ESG Leaders and is one of the utilities in the pre-
year also includes the Environmental Report, the comple-
stigious CDP Italy Climate Disclosure Leadership index for
teness and reliability of which are verified by an accredited
2014 as a leader in terms of the quality, thoroughness and
external auditing firm, by the Control and Risk Committee,
transparency of our climate-change data.
and by the Corporate Governance Committee. The docu-
Finally, Enel was again included in the FTSE4Good index,
ment is then approved by the Enel SpA Board of Directors
which measures environmentally sustainable corporate
before being presented to the shareholders.
practices, relations with stakeholders, respect for human
rights, the quality of working conditions and tools that
The report is also analyzed by socially responsible in-
companies employ to fight corruption.
The four pillars of corporate ethics
For over ten years, Enel has had a solid system of ethics that
national best practices that everyone who works for and
underlies our sustainability efforts. This system has beco-
with Enel must respect and apply in their daily activities.
me a dynamic set of rules constantly incorporating inter-
Code of Ethics
Adopted in 2002, the Code of Ethics is an expression of our
social and economic diversity of the various countries in
ethical responsibilities and commitments in doing business
which we operate. All of the companies in which Enel has
and in all company activities, while also guiding and stan-
an equity interest and the Group’s major suppliers are also
dardizing company conduct based on the utmost transpa-
required to adhere to the general principles contained the-
rency, respect and fairness towards all stakeholders. The
rein. Any stakeholder can report a violation or suspected
Code is binding for all Enel employees and collaborators
violation of the Code of Ethics through dedicated channels.
throughout the Group and takes account of the cultural,
113
Compliance Model (Legislative Decree 231/2001) - “Model 231”
The Compliance Model pursuant to Legislative Decree
mission of the crimes specified under the Decree, inclu-
231/2001 (which was revised in 2014 in response to the
ding those of corruption in both the public and private
introduction of new crimes envisaged under applicable
sectors. The principles found in the model extend to all of
law) supplements the rules of content found in the Code
the Group’s foreign subsidiaries through the adoption of
of Ethics and is aimed at preventing the risk of the com-
specific guidelines.
Zero-Tolerance-of-Corruption Plan
The Zero-Tolerance-of-Corruption (ZTC) Plan supplements
International. The plan was adopted in 2006 as a concrete
both the Code of Ethics and the Compliance Model and
move marking Enel’s participation in the Global Compact
reinforces our commitment to combatting corruption whi-
(a 2000 UN program of action) and the Partnering Against
le promoting the implementation of the recommendations
Corruption Initiative (PACI) promoted by the World Econo-
regarding the related principles defined by Transparency
mic Forum in Davos in 2005.
Policy on Business and Human Rights
In order to give effect to the guidelines of the UN Forum on
ment, Enel explicitly becomes a promoter of the observan-
Business and Human Rights, in 2013, the Board of Directors
ce of such rights on the part of contractors, suppliers and
of Enel SpA approved the Human Rights Policy, which was
business partners as part of its business relationships.
subsequently extended to all of the Group’s subsidiaries.
Within the scope of the due diligence in respect of hu-
In line with the Code of Ethics, this policy sets out the com-
man rights, we also launched the risk-assessment process
mitments and responsibilities in respect of human rights
aimed at identifying the main risks in the area of human
on the part of the employees of Enel SpA and its subsidiari-
rights that the Company may encounter in the course of
es, whether they be directors or employees in any manner
operations in various countries and through relations with
of those companies. Similarly, with this formal commit-
third parties in general.
Net efficient capacity by primary energy source
2014
2013 restated
Change
17,048
16,112
21,018
54,178
5,132
29,653
5,774
833
100
442
36,802
96,112
17,277
16,071
22,592
55,940
5,132
29,836
5,163
795
120
258
36,172
97,244
(229)
41
(1,574)
(1,762)
-
(183)
611
38
(20)
184
630
(1,132)
-1.3%
0.3%
-7.0%
-3.1%
-
-0.6%
11.8%
4.8%
-16.7%
71.3%
1.7%
-1.2%
MW
Net efficient thermal capacity:
- coal
- CCGT
- fuel oil/gas
Total
Net efficient nuclear capacity
Net efficient renewable capacity:
- hydroelectric
- wind
- geothermal
- biomass and co-generation
- other
Total
Total net efficient capacity
114
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Net efficient capacity by geographical area
MW
Italy
Iberian peninsula
Latin America
Russia
Slovakia
North America
Romania
Belgium
Greece
France
South Africa
Bulgaria
2014
36,823
23,549
18,300
9,107
4,968
2,083
534
406
290
-
10
42
2013 restated
Change
39,277
23,556
16,764
9,107
5,399
1,683
534
406
290
186
-
42
(2,454)
(7)
1,536
-
(431)
400
-
-
-
(186)
10
-
-6.2%
-
9.2%
-
-8.0%
23.8%
-
-
-
-
-
-
Total net efficient capacity
96,112
97,244
(1,132)
-1.2%
Net electricity generation by primary energy source
GWh
Net thermal generation:
- coal
- CCGT
- fuel oil/gas
Total
Net nuclear generation
Net renewable generation:
- hydroelectric
- wind
- geothermal
- biomass and co-generation
- other
Total
Total net electricity generation
2014
2013 restated
Change
81,991
37,395
29,654
149,040
39,182
74,315
14,054
5,954
166
390
94,879
283,101
81,212
39,478
29,312
150,002
40,516
72,671
12,231
5,581
497
281
91,261
281,779
779
(2,083)
342
(962)
(1,334)
1,644
1,823
373
(331)
109
3,618
1,322
1.0%
-5.3%
1.2%
-0.6%
-3.3%
2.3%
14.9%
6.7%
-66.6%
38.8%
4.0%
0.5%
115
Net electricity generation by geographical area
GWh
Italy
Iberian peninsula
Latin America
Russia
Slovakia
North America
Romania
Belgium
Greece
France
South Africa
Bulgaria
2014
2013 restated
Change
71,824
74,040
64,753
42,376
20,550
6,674
1,268
690
488
347
8
83
71,201
73,231
65,276
41,901
21,343
5,360
1,080
1,373
566
362
-
86
623
809
(523)
475
(793)
1,314
188
(683)
(78)
(15)
8
(3)
Total net electricity generation
283,101
281,779
1,322
Other generation ratios
Generation from renewable resources (% of total)
“Zero-emission” generation (% of total)
ISO 14001-certified net efficient capacity (% of total)
Average efficiency of thermal plants (%)
Specific emissions of CO2 from net generation (gCO2/
kWheq) (1)
Specific water consumption (l/kWheq)
2014
2013 restated
Change
33.5
47.4
94.3
40.3
395
0.64
32.4
46.8
93.9
39.8
396
0.64
1.1
0.6
0.4
0.5
(1)
-
0.9%
1.1%
-0.8%
1.1%
-3.7%
24.5%
17.4%
-49.7%
-13.8%
-4.1%
-
-3.5%
0.5%
3.5%
1.3%
0.4%
1.3%
-0.3%
-
(1) Specific emissions are calculated as total emissions from simple thermal generation and co-generation of electricity and heat as a ratio of total renewables
generation, nuclear generation, simple thermal generation and co-generation of electricity and heat (including the contribution of heat in MWh equiva-
lent).
Customers by geographical area
Average no.
Electricity:
- Italy
- Latin America
- Iberian peninsula
- Romania
- other countries
2014
2013 restated
Change
27,207,897
27,819,881
(611,984)
14,633,393
14,252,906
11,290,283
11,376,287
2,670,892
2,663,728
5,985
5,841
380,487
(86,004)
7,164
144
Total electricity customers
55,808,450
56,118,643
(310,193)
Natural gas:
- Italy
- Spain
Total natural gas customers
116
3,470,692
1,205,463
3,245,996
1,214,038
4,676,155
4,460,034
224,696
(8,575)
216,121
-2.2%
2.7%
-0.8%
0.3%
2.5%
-0.6%
6.9%
-0.7%
4.8%
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Safety rates
No.
Enel injury frequency rate
Enel injury severity rate
Enel serious and fatal injuries
Serious injuries (1)
Fatal injuries
Total
Serious and fatal injuries at contractors
Serious injuries (1)
Fatal injuries
Total
2014
1.32
0.07
1
3
4
22
16
38
2013 restated
1.43
0.07
7
6
13
16
10
26
Change
(0.11)
-
(6)
(3)
(9)
6
6
12
-7.8%
-
-85.7%
-50.0%
-69.2%
37.5%
60.0%
46.2%
(1) Injuries with an initial prognosis, as reported on the medical certificate issued, of greater than 30 days, or with a confidential prognosis until the actual pro-
gnosis is released, or with an unknown prognosis that, based on an initial assessment by the company/Division concerned, is expected to exceed 30 days.
Once the official prognosis is released, the related injury is considered serious only if said prognosis exceeds 30 days. Should a confidential prognosis never
be released or the prognosis remain unknown, within 30 days of the event, the injury is to be deemed serious.
Other rates
No.
Average hours of training per employee
Verified violations of the Code of Ethics (1)
2014
42.3
27
2013 restated
Change
40
36
2.3
(9)
5.8%
-25.0%
(1) In 2014, an analysis was performed of violations reported in 2013. As a result, the number of verified violations for 2013 was reclassified from 27 to 36.
Creating value for stakeholders
Enel’s stakeholders are individuals, groups or institutions
good indication of how the Group has created wealth for
whose contribution is needed to achieve its mission or who
the following stakeholders: shareholders, lenders, employe-
have a stake in its pursuit.
es and government.
The economic value created and shared by Enel gives a
Millions of euro
Revenue
Income/(expense) from commodity contracts measured at fair value
External costs
Gross global value added from continuing operations
Gross value added from discontinued operations
Gross global value added
distributed to:
shareholders
lenders
employees
government
enterprises
(1) 2013 figures have been restated to reflect the amendment, with retrospective effect, of IFRS 11.
2014
75,791
(225)
53,390
22,176
-
22,176
1,222
3,007
4,864
654
12,429
2013 restated (1)
78,663
(378)
55,213
23,072
-
23,072
1,410
2,886
4,555
4,120
10,101
117
Towards sustainable innovation
Innovation is a key part of Enel’s strategy and culture of en-
In the area of solar energy, the technology partnership with
terprise, and we have always been committed to adopting
Innova Solar Energy, a company active in the solar and ther-
cutting-edge models, methods and technologies in order
modynamic segments and specialized in concentrator systems,
to provide our customers with excellent service quality. This
has reached maturity, and the Trinum machines – small-scale
drive for innovation touches all areas of the value chain,
concentrating cogeneration thermodynamic solar systems –
from conventional power generation to renewable energy
have been successfully installed in Italy, Chile and Brazil.
and including smart grids and energy efficiency.
In 2014, Enel’s know-how in geothermal technology was
In 2014, the Enel Group invested €74 million in research and
focused on developing diagnostics to improve reliability
innovation across the various areas of business.
and reduce the operating and maintenance costs of exi-
In order to find, develop and take advantage of the best so-
sting AMIS (Abbattimento Mercurio e Idrogeno Solforato
lutions available, Enel has recently adopted an open-innova-
- “Mercury and Hydrogen Sulfide Abatement”) systems for
tion approach that enables us to get the best out of both our
the treatment of non-condensable gases, of power gene-
technological capabilities and other opportunities coming
ration systems, and of systems for the treatment of steam
from the innovation ecosystem as a whole, while involving
prior to entering the plant. Work was also done to support
multiple actors both inside and outside the organization.
the start-up of the first hybrid solar-geothermal plant at the
Various projects have been launched, such as the Eidos Mar-
Stillwater site (Nevada, USA), including the development of
ket crowdsourcing platform, which is open to all employees
models and taking advantage of experience gained at the
of the Group and has thus far collected over 4,000 ideas, as
Archimede plant.
well as the initiative “Join the Race to the Clean Energy Futu-
re”, launched by Enel Green Power, and “Endesa 2244”, both
aimed at the diverse world of innovators.
Energy storage
In 2014, Enel was named one of Europe’s top five firms in
Energy storage is a key aspect in ensuring the high-quality,
“Technology Intelligence” by the German Fraunhofer Insti-
safe management of power grids that feature a high de-
tute, which selected Enel out of 207 European companies
gree of discontinuous, intermittent generation from rene-
in recognition of our organization, methods and tools of
wable resources. In Italy, we launched the project “Active
technology intelligence and innovation.
RES into the grid”, including partnerships with internatio-
Renewable energy
nal leaders in order to test their electrochemical storage
technologies on their own systems. More specifically, three
storage systems are to be installed at two wind farms and
Renewable energy is one of Enel’s key strategies for re-
one photovoltaic plant connected to the medium-voltage
ducing CO2 emissions and, at the same time, for making
our production portfolio more competitive. There is great
grid, the latter of which was completed in 2014. The purpo-
se of the project is to test advanced energy management
growth potential in terms of installed capacity, and inten-
functions in order to minimize intermittence and maximize
sive efforts are under way to develop increasingly efficient,
the use of existing connections. During the year, an energy
effective technologies that can be used in a variety of con-
storage system was also installed in the Chilean village of
texts around the world. For this reason, Enel is active in all of
Ollagüe at an off-grid hybrid wind-photovoltaic plant with
the leading renewable generation technologies, and we are
a diesel backup generator. In this case, the system will be
identifying technologies that can help to take advantage
able to provide the village with a constant supply of elec-
of resources that are currently not being used, such as the
tricity, while also covering around 85% of the needs of its
energy of the sea.
inhabitants by way of renewable energy.
In October 2014, Enel Green Power, together with the
French firm DCNS, was selected by the Chilean Organiza-
tion for Economic Development (Corporación de fomento
de la Producción - CORFO) to create an international center
Smart grids and distributed
generation
of excellence for marine energy, known as the Marine Ener-
gy Research and Innovation Center (MERIC).
Enel is a leading player, both within Italy and international-
ly, in numerous initiatives working towards innovations in
118
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS energy distribution systems in order to continue increasing
The Enel Group is also greatly committed to a number of
grid efficiency. The most significant projects and initiatives
projects in various countries to create an innovative, techno-
currently under way concern “smart grids”, which add inno-
logically advanced network of smart infrastructures to re-
vative digital solutions to traditional technologies in order
charge electric vehicles, so as to promote the use of these
to make power grid management more flexible by increa-
vehicles and favor more sustainable mobility. In Italy, we
sing the efficacy of how information is gathered.
completed work in 2014 regarding an alternating-current
One of the most immediate applications of these smart
charging solution, and we created the first multi-standard
grids is their integration with renewable energies, which
rapid charging station, which integrates three smart meters
helps to achieve the environmental targets set by the Euro-
and can thereby charge three vehicles at the same time.
pean Community. Throughout Europe, Enel works to share
best practices and participates in defining long-term strate-
gies for the mass introduction of smart-grid technology into
End uses and energy efficiency
European power grids.
In Italy, we have completed the demonstration called for
under the Isernia-Carpinone project, aimed at applying in-
In order to contribute to energy efficiency and the Europe-
an long-term (2030-2050) targets for CO2 reduction, Enel
is developing innovative technologies and new electricity
novative solutions to improve both grid efficiency and the
services for customers, in order to optimize and rationalize
quality of service provided to our customers. Enel is also re-
energy consumption. The customer becomes the protago-
sponsible for technical directions for the European project
nist with the use of electronic support tools that make con-
Grid4EU, which encompasses six different projects in various
sumption transparent, while incentivizing active involve-
nations and has the goal of conducting wide-scale testing
ment in the energy market and promoting a rational use of
under real operating conditions of advanced smart grids
energy, thereby bringing benefits for environmental sustai-
aimed at promoting the use and management of distribu-
nability and for the system as a whole, as it becomes more
ted power generation, supporting energy efficiency, and
accessible and more reliable.
enabling and integrative active demand and new uses of
In this regard, the Enel Info+ Isernia pilot project began in
electricity. Various smart-grid projects are also under way in
2012 and came to a close in 2014. This project featured te-
Spain and Latin America, including the ICONO project for
sting of Enel smart info for the first time on a wide scale. This
the development of functions for monitoring distributed
device gives customers easy access to meter data regarding
power generation, automating the network, and improving
their energy consumption and generation, thereby promo-
operating efficiency, reliability and safety.
ting greater awareness of consumption habits and the adop-
The innovative technologies and skills developed by the Enel
tion of more efficient behavior. From 2012 to 2014, around
Group have enabled us to promote the concept of “smart
6,000 kits were distributed to low-voltage users in the pro-
cities” in various parts of the world, uniting environmental
vince of Isernia. The experience demonstrated the efficacy
protection, energy efficiency and economic sustainability
of smart info in the pursuit of energy efficiency and made
within a single urban model.
it possible to identify new functions and improvements for
In Italy, the first pilot projects are under way in Genoa, Bari,
the technology, which were implemented in 2014.
Cosenza and L’Aquila, where Enel is supporting the local
Enel Energia is developing its own solution for the Con-
town councils. Enel is also active in smart-city projects being
nected Home, which will be able to analyze consumption.
funded at the European level. In 2014, work continued on
As a part of these efforts, Enel is turning to partners who are
the creation and development of smart cities in Santiago,
experts in non-intrusive load-monitoring (NILM) algorithms
Chile, and Búzios, Brazil.
in calculating the consumption of individual home applian-
In Brazil, we completed the installation of a new prototype
ces. In 2014, the first project to enable the monitoring of
of the Triangle-based Omni-purpose Building (TOB), which
home consumption, “Come Consumo” (How I Consume),
is to be used as the front office for the development of mi-
featured the start of testing with 80 electricity customers in
cro-credit for the local population. Based on a design that
order to determine the impact of the devices in monitoring
Enel has patented internationally, the TOB uses both photo-
consumption habits.
voltaic modules and storage systems and is able to provide a
Various projects are also under way in Spain and South
variety of services to the local population depending on the
America, including:
method of use.
> “Energrid”, for the development of low-cost sensor pro-
119
totypes for smart energy management based on analysis
objectives, we focused on fine-tuning low-cost techniques
and control, via the internet, of power generation and
to reduce nitrogen oxide emissions, while also developing
energy consumption;
tools for the monitoring, diagnostics, and control of gas and
> “Greenmomit”, for the development and testing of a
coal-fueled thermal plants in order to optimize operations,
thermostat and low-cost satellite devices to integrate
reduce consumption and emissions, and optimize mainte-
into the Endesa multi-service platform that can increase
nance.
home energy efficiency;
We are also studying new technologies that can increase
> “Multi-Service Platform”, with the goal of giving custo-
plant reliability under more flexible operations and extend
mers easy access to energy-consumption information,
the range of fuels that can be used in existing power plants.
specifying the various uses, and information as to how
In terms of containing emissions, in 2014 we worked to cha-
to optimize consumption, in addition to receiving other
racterize the emission of macro- and micro-pollutants on
services to help them in the day-to-day management of
high-efficiency exhaust-treatment systems with the goal of
the home or office.
assessing the room for improvement and performance over
Conventional power
generation
With regard to improving the operating versatility of our
power plants, Enel is engaged in a number of projects ai-
med at ensuring and constantly improving performance
and conversion efficiency. In 2014, in order to achieve these
120
time.
Over the last year, Enel consolidated the organization’s
capabilities and focused on developing processes and
technologies that are able to reduce and optimize water
consumption at the Group’s thermal power plants, and we
continued working on projects related to advanced auto-
mation and diagnostics.
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Customers
The leadership of a company such as Enel, which serves over
and seeks to monitor and improve the quality of the respon-
60 million electricity and gas customers, necessarily involves
ses sent to customers who write to our sales companies with
great attention both to the customer and to service quality,
complaints, requests for billing adjustments, or simply to re-
aspects that concern more than just the provision of electri-
quest information. In 2014, in order to improve the quality
city and/or natural gas, extending, above all, to intangible
of our response to complaints, we launched the project “Full
aspects of our service that concern the perception and sa-
Quality”, which involves phoning our customers to notify
tisfaction of our customers. A great many initiatives to digi-
them that their request is being handled, followed by a writ-
talize our services are under way in various countries (new
ten reply and a follow-up phone call to inform them that the
web sites as well as apps, social networking, etc.).
reply has been sent. With the satisfaction noted with these
We have also launched programs and other initiatives for
customers, we have seen an improvement in the perception
people with disabilities in order to ensure the effective com-
of quality, and the customers have expressed their apprecia-
munication of important information to our customers.
tion for the attention received.
Enel was also the first energy company in Italy or in Europe
In 2014 in Italy, we implemented offerings for the sale of
to implement joint-conciliation procedures with consumer
high-performance, energy-efficient turnkey products, whi-
associations in order to resolve disputes of a commercial na-
le promoting the development of more efficient technolo-
ture. This process is entirely free of charge and takes place
gies, which has had a positive impact on related areas and
via an online platform, thereby making it possible to quic-
has provided customers with significant savings compared
kly resolve any issues out of court with the Enel companies
with the previous generation of technology while also lea-
that conduct sales in Italy, i.e. Enel Energia and Enel Servizio
ding to a reduction in environmental impact. In particular,
Elettrico.
the offering of LED lighting launched in May 2014 by Enel
Energia has contributed to disseminating new LED techno-
In order to provide our customers with the best support pos-
logy by promoting the replacement of existing light bulbs
sible, since 2003, in Spain and Portugal, Endesa has adopted
in the home and providing customers with savings on the
a Plan de Excelencia en la Atención Comercial (the Excellence
consumption of energy.
in Customer Service Plan), which seeks to improve customer
In 2014, various awareness campaigns were also carried out
satisfaction indicators year after year. In 2014, efforts under
in order to make information easier to understand related
the plan focused on improving the quality of customer ser-
to both sales and management.
vice (both via phone and in person) and on operating pro-
In addition, the launch of “bolletta zoom”, a dynamic version
cedures, and we have developed a project aimed at getting
of the online utility bill, has enabled us to present billing in-
to know the customer better, so that we can adapt to their
formation to our customers in a more intuitive, interactive
needs both better and more quickly.
manner.
Use of the web site “www.endesaonline.com” saw signifi-
The attention we have dedicated to issues related to service
cant growth of around 30% over 2013, as did the online
quality can also be seen in the numerous customer satisfac-
billing service.
tion surveys conducted for the free and enhanced protecion
For many years, Endesa has also provided an ombudsman
electricity markets and the gas market, both residential and
service, which is independent from the company’s organiza-
business, which, in 2014, involved over 90,000 interviews
tion and provides customers with another channel for dia-
conducted by specialized outsourcers.
log concerning the services the company provides. The om-
Our customer service channels are also subject to rigorous
budsman interacts with both internal and external contacts
evaluations each year by an external certifying body, and
and recommends new ways for identifying the customers’
in 2014 Enel Energia and Enel Servizio Elettrico obtained
needs and expectations, as well as ways for improving the
confirmation of their ISO 9001 certification with no non-
company’s customer services.
compliance being reported for the “Punto Enel” offices, the
contact centers or the online channels.
In Latin America, in order to improve customer service qua-
The 100% Compliance project also continued. This project
lity and handle their various needs, we launched numerous
involves a team of specialists in the field of service quality
projects in 2014.
121
In Argentina, there is the project “Oficinas moviles” (mobile
blish a lasting relationship with the communities in which
offices), which makes it possible to reach customers even in
we operate. Enel can make a concrete contribution to social
very rugged areas or where there is no other service office.
and economic development in these communities through
We have also opened a new phone center to handle custo-
various types of initiatives, such as the expansion of infra-
mer calls and have developed a web site that makes it possi-
structures, education and training programs, projects of
ble to serve customers 24 hours a day, 365 days a year.
social inclusion, and support for local cultural and econo-
In Colombia in 2014, in order to further develop the service
mic activities. Enel specifically develops projects and other
culture, work continued on the program “A tu lado”, which
initiatives of social responsibility, which are selected by way
features various ways of contacting and managing custo-
of analyses of materiality, detailed peer benchmarking, and
mers and meeting their needs in various locations (in their
studies of trends in sustainability, while also adapting to the
neighborhood, in shopping centers, etc.), while promoting
needs of the various countries in which we operate, whe-
the efficient, safe use of energy.
ther they have mature or emerging economies.
In Chile, work continued on development of the program
The areas of development that have been given the highest
“Vínculo Emocional con el Cliente” (VEC), which seeks to
priority concern: access to energy and eliminating the bar-
strengthen the customer relationship through various loyal-
riers to entry for low-income consumers; implementing the
ty programs. In 2014 in particular, we launched the project
program to support high-quality education and employabi-
“Chilectra Contigo” in order to increase customer-service
lity training, particularly in emerging nations; and projects of
channels to include the use of mobile offices in high-traffic
social inclusion and in support of economic development in
areas.
the areas in which the Enel Group operates.
In Peru, we have developed “FONOEMPRESA”, a fast, effi-
cient telephone support service that has made it possible to
handle an average of 1,000 calls per month with large-scale
customers while providing fast, personalized service.
In Brazil, the project “Hora del cliente” has the goal of incre-
asing the awareness and sensitivity of customer relationship
managers as to their customers’ needs and desires. Two
events, “Ampla Invita” and “Coelce Invita”, were also organi-
zed for government and other large-scale accounts in order
to share experiences and strengthen ties.
In Romania, the “Enel Kiosk” initiative is enabling customers
to access public digital kiosks in order to submit meter rea-
dings, view invoices, and download forms. It is also a way
of saving time and paper, protecting the environment and,
above all, meeting the customers’ needs in terms of ease of
use, while also increasing their level of satisfaction.
We have also launched “Enel Assistance”, the first value-ad-
ded service system in the Romanian energy market to provide
residential customers the ability to easily manage system fai-
lures in their homes by accessing a national network of pro-
fessionals that can provide service and repairs 24 hours a day.
Society
Responsible relations with the
communities
Strengthening the Group’s leadership necessarily involves
forging a responsible partnership with the local communi-
ties and areas which host our power plants and other ac-
tivities, credibility in relations with the governments and
authorities in the countries in which Enel operates and a sta-
ble, ongoing and integrated relationship with all stakehol-
ders, based on trust and respect for shared values.
This constant interaction with the local communities is at the
heart of Enel’s relationship with them. In order to maintain
constructive exchange and involvement in managing Enel’s
impact on the local communities, it is necessary, first of all,
for those communities to be more aware of the Group’s acti-
vities. This is the reasoning behind all of our initiatives aimed
at bringing the general public closer to the world of energy,
such as publications about our projects, tours of our plants,
speaking opportunities at cultural and scientific events, in-
formational videos, the publication of information about
our work sites, the Natura e Territorio (Nature and the Ter-
ritory) programs to promote sports and recreation, cultural
itineraries and nature walks around our plants, and all of the
other initiatives to promote our industrial heritage.
The intrinsic nature of the electricity business, in which po-
For example, Enel introduces young people to the world of
wer plants and distribution networks are built to last seve-
energy, helping them understand the sources of energy, ge-
ral decades and the service provided is an essential part of
neration plants and the path electricity takes to get to their
social and economic development, requires that we esta-
home, and increasing their awareness of energy savings,
122
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS thereby nudging the younger generations towards more
In 2014, thanks to the Company’s international commit-
sustainable behavior. Energy, science, technology, envi-
ment to the issue of access to energy, Enel’s CEO and Ge-
ronment: these are the key works of the “PlayEnergy” initia-
neral Manager, Francesco Starace, became a member of the
tive, a free project combining entertainment and education
Sustainable Energy for All advisory board.
that Enel has been organizing for the last 12 years in schools
in 10 different countries, all with the goal of disseminating
Innovation is an essential means of promoting both social
a responsible energy culture among young people, starting
and energetic sustainability, making it possible to study new
with knowledge to enable responsible decision-making.
approaches to business and new technological solutions
This commitment is renewed each year, involving thousan-
where the traditional model has proven inadequate in mee-
ds of students of all ages with the use of on- and off-line
ting the needs of the community.
materials and local initiatives.
The various efforts under way include the programs we are
developing in Latin America to provide communities with
the tools and capabilities they need for their members to
Our people
be better able to enter the job market (especially in energy-
related fields), including through partnerships with schools.
Organization
Enabling electricity
In 2014, the Enel Group altered its organizational structure
to a matrix, business-oriented model in order to achieve the
following objectives:
Currently, there are about 1.3 billion people in the world
> the reduction of complexity;
that have no access to electricity and over 2 billion are being
> the centralized allocation of capital;
served by inadequate infrastructures or are unable to pay
> increased efficiency in investments and operating costs;
for their utilities due to financial hardship. Given this con-
> the implementation of best practices across geographic
text, the fight against energy poverty is the focus of one of
areas;
the United Nations Millennium Development Goals, as reaf-
> clear, shared responsibilities across global and regional
firmed by the UN General Assembly, which unanimously de-
lines of business.
clared the period 2014-2024 as the Decade of Sustainable
The structure is now organized into:
Energy for All.
> five Global Divisions, which are responsible in all of the
Within this context, as a member of the United Nations Glo-
Group’s geographic areas for operating, maintaining and
bal Compact LEAD, at the end of 2011 Enel launched the
developing assets and conducting trade;
Enabling Electricity program with the goal of creating a new
> two regions and two countries, which are responsible
business model based on the access to energy, one which
for managing relationships with customers, with the pu-
targets both people living in isolated rural areas and tho-
blic sector, and with regulators, for the sale of electricity
se who live in the outskirts of major metropolitan areas. To
and gas at the country level, and for providing services
date, with projects under way in 12 countries, the program
and corporate activities to the Global Divisions in the
has provided access to electricity to over 2.5 million people
country concerned, integrating the activities of the busi-
around the world.
ness lines in the various countries;
> two global service functions, which are responsible for
Specifically, the project is based on three areas of action:
the integrated management of all of the Group’s ICT and
> projects aimed at facilitating access to electricity through
procurement activities;
new distributed power generation technologies and grid
> seven holding company functions, which focus on
infrastructures;
policy-making, coordination and strategic control for the
> projects to eliminate the economic barriers to electricity
Group as a whole.
in territories such as Latin America;
> projects with the local communities in order to develop
Compared with the previous structure, the main changes
and share capacity-building capabilities, which provide
concerned the creation of three new Global Divisions (Glo-
disadvantaged populations with the experience of the
bal Infrastructure and Networks, Global Generation and Glo-
Enel Group.
bal Trading), the countries Italy and Iberia, and the Latin
123
America Region, which joins the Eastern Europe Region
> optimizing the hedging strategy and the global portfo-
(previously known as the International Division), as well as
lio’s exposure to commodity risk;
the assignment of responsibilities concerning the activities
> optimizing production through power plant dispatching,
of Risk Control and Insurance to the Administration, Finance
the provision of gas and other fuels (coal, petcoke, pe-
and Control holding company function.
troleum products, biomass), and related operational and
logistical activities, such as depot management;
More specifically:
> managing gas trading (including LNG) and electricity tra-
the Global Infrastructure and Networks Division is respon-
ding on the wholesale markets and the trading of other
sible, at the Group level, for:
energy commodities, energy derivatives, and structured
> optimizing the allocation of investments while maximi-
energy products, and managing related origination ac-
zing service quality and return on investment;
tivities.
> managing the electricity infrastructures and distribution
Within the scope of their specific geographic areas, the re-
networks while maximizing operating efficiency, taking
gions and countries are responsible for ensuring a context
advantage of synergies, implementing advanced techno-
that is suited to the business and to serving the customer whi-
logies, and sharing responsibility with the individual
le sharing responsibility with the Global Divisions for achie-
countries for achieving the EBITDA, cash flow and reve-
ving EBITDA, cash flow and revenue targets and managing
nue targets;
the following aspects within their respective areas:
> developing the business portfolio of infrastructure and
> relations with the public sector, with regulators, with the
power grids through mergers and acquisitions and by
media, and with all other stakeholders of the Group;
participating in public tenders (e.g. for new licenses),
> development of the local customer portfolio, including
both in countries where Enel has a presence and where
responsibility for the related financial performance;
we do not.
> services and corporate activities to support the business
The Global Generation Division is responsible, at the Group
lines at the country level while maximizing efficiency and
level, for:
quality and maintaining responsibility over costs;
> optimizing the allocation of capital expenditure while
> the overall financial and economic equilibrium of the
maximizing return on investment and technical perfor-
country, including responsibility for cash flows and debt.
mance;
> managing the operation and maintenance of the power
As at December 31, 2013, the total workforce of the Enel
plants in accordance with production plans and with
Group numbered 68,961 employees, of which over half em-
safety and environmental laws, regulations and policies
ployed by Group companies abroad.
while maximizing operating efficiency, taking advan-
Applicability of IFRS 11 as of January 1, 2014 resulted in the
tage of synergies across geographic areas, and sharing
deconsolidation of over 1,000 employees from the Group.
responsibility with the countries and with the Global Tra-
During the year, the number of employees fell by around
ding Division for reaching EBITDA, cash flow and revenue
1,400, mostly reflecting the net negative balance between
targets;
new hires and terminations. The main changes concerned
> developing the power generation business, both in exi-
Italy, where there were a great many terminations of em-
sting countries and in new areas;
ployment (52% of the total terminations for the Group) in ap-
> managing engineering and construction activities in
plication of the early-retirement mechanism allowed by Arti-
line with the objectives of quality, cost and timeframes
cle 4 of Law 92/2012, which were partially offset by new hires
assigned to each project; managing research and deve-
(51% of the total new hires for the Group). This move has also
lopment projects aimed at improving operating perfor-
resulted in generational change within our Italian firms.
mance of our power plants.
The Global Trading Division is responsible, at the Group level,
for:
> maximizing gross energy margins in our markets of inte-
rest and in respect of the assigned risk limitations while
sharing responsibility with the countries and with the
Global Generation Division for EBITDA targets;
Human resources hiring,
management and development
In 2014, the Enel Group confirmed its constant commitment
to human resources management and to the development
and motivation of our people, while promoting the creation
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ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS of a model that supports change and allows for the rapid
needed for the job. Internal mobility programs also share
dissemination of a corporate culture based on two key ele-
this goal of career growth by promoting the development
ments: accountability and merit.
of cross-business skills.
Our current organizational model promotes the internatio-
nalization of the Company while allowing for the sharing of
The Enel Group also has a single model of performance eva-
experiences and best practices.
luation in all of the countries in which we operate, which
At Enel, we place a great deal of emphasis on excellence and
includes a common calendar and supporting information
on the need to rely on people who are able to work effec-
system. The process calls for:
tively in a global environment and take advantage of their
> conduct assessment within the organization, which is
talents. A key element is the creation of a pool of employees
done in one of two ways, depending on the target con-
of high potential (through the “Potential Observatory”) in
cerned: the 360° Evaluation (for positions within senior
which to invest, including through integrated training and
management and other key positions) and the Behavior
development programs based on their experience and the
Performance Review;
strategic responsibilities assigned.
> the identification and measurement of the key perfor-
mance indicators that each individual must achieve in
The hiring process includes a verification of behavioral
their jobs, which uses the following tools: the Objectives
and motivational aspects and of technical/professional
Performance Review (OPR) and Task Management (for
knowledge related to the position to be held. This involves a
employees without a variable salary component).
range of tools that varies based on the target profile and on
local practice, including:
The reviewers will discuss and validate the evaluations of
> an assessment center for junior positions, which includes
their teams during the Calibration phase in order to impro-
group testing and interviews;
ve review quality by comparing and discussing the criteria
> behavioral interviews, which focus on past experience,
used.
skills and motivation;
At the same time as the supervisor’s evaluation, there is a
> technical/professional interviews.
self-assessment by the employee related to conduct establi-
First, there is a verification within the Company to deter-
shed under the Leadership Model.
mine if there are people that can be promoted from within
The final phase of the process is the feedback meeting
before beginning any hiring process that may be necessary.
between the employee and the supervisor in which the eva-
Generally speaking, preference is given to local candidates
luations are analyzed and development efforts for the fol-
unless there is a specific need for hiring internationally. For
lowing year are defined.
technical and operational positions, the Company gives pre-
ference, where possible, to candidates living in the areas
In order to meet the various career needs of our employees,
surrounding the place of work.
Enel has a multitier training system based on the levels of
The channels most used for recruiting are the organization’s
training that can be provided:
database (containing all applications submitted, divided
> the Leadership Curriculum, which is a collection of
by country), external databases, and the lists of graduates
initiatives for performance improvement and the deve-
provided by secondary schools and universities. In 2014, in
lopment of potential from the early stages of an indivi-
order to achieve global synergies in employer branding, we
dual’s employment, accompanying them through all of
also defined a partnership with a global professional net-
the significant stages of their career;
work that, in addition to presenting the company profile,
> the technical and functional academies, which are de-
enables the hiring managers in the various countries to pu-
signed to develop technical and specialist skills within the
blish job offers and requests for candidate submissions.
various professional families;
> campaign-based training, the purpose of which is to
Hiring programs vary depending on the target concerned.
disseminate best practices (e.g. safe driving) and the
More specifically, the orientation of young talent is cente-
cross-business knowledge that underlies the Company’s
red around their personal and professional development by
culture (e.g. corporate social responsibility, the Code of
involving them in on-the-job training and other structured
Ethics, the Compliance Model);
training programs in order to provide them with the skills
> Division-specific training, which seeks to meet specific
125
needs related to processes of organizational and/or spe-
is based on the principles of human rights, of labor rights and
cialist change;
of the best, most advanced systems of transnational labor
> safety training, aimed at promoting the culture of pre-
relations for multinational corporations and organizations,
vention and wellbeing and the sharing of best practices.
including the ILO.
In 2014, work continued on identifying and disseminating
During the year, an initial meeting with the employee repre-
best practices in the area of training while bringing together
sentatives of the Group and with the national secretariats
the most interesting initiatives contributing the greatest va-
focused on the presentation of Enel’s new organizational
lue within the Group.
structure (July 31, 2014). Numerous meetings were also held
with the Select Committee concerning implementation of
In April 2014, a flash survey on Climate and Safety was laun-
the Group’s new model of organization. The 2014 plenary
ched throughout the Group with the goal of measuring the
session of the Global Works Council was held, due merely
impact of action plans and other developments within the
to a technical postponement, on January 21-23, 2015, and
main areas for improvement identified by the previous sur-
concerned the new organization, the Group’s financial per-
vey held in 2012. A sample population of employees in the
formance as at September 30, 2014, and an update on the
various countries in which Enel operates, selected using sta-
Group’s health and safety indexes.
tistical parameters (such as geography, organizational unit,
age, professional category, etc.) were involved in the survey,
which involved a questionnaire of 33 questions (23 on en-
gagement and 10 on safety) available in 9 languages and
in either electronic format or hard copy. Participation levels
Workplace health and
safety
reached 64% throughout the Group.
Enel has always placed the health, safety and overall well-
being of employees and contractors at the center of our
Based on our awareness of the fact that valuing diversity in
corporate culture.
gender, age, culture, and ability is key to innovation in pro-
For Enel, 2014 was a year of profound organizational chan-
cesses and ideas and in the creation of value, Enel has also
ge, which also affected the organization and primary pro-
launched “project diversity”. Indeed, diversity management
cesses regarding health and safety with the goal of better
within the Company is seen as an opportunity for employe-
integrating safety into our business and of defining a sin-
es to grow in their careers and as individuals. This initiative
gle, standardized approach that also takes account of local
joins the great many others that have been pursued over
needs.
the years, including projects and best practices that testify
The operating companies of the Enel Group implement
to our commitment to promoting and respecting human di-
a certified system of health and safety management that
gnity, while safeguarding diversity and rejecting any form of
complies with the OHSAS 18001:2007 standard and which
aggression or discrimination.
is verified each year by external accredited bodies. This pro-
Labor relations
Enel complies with the labor laws of the various countries in
which we operate and with the International Labor Organi-
zation (ILO) conventions on labor rights (freedom of associa-
tion and of collective bargaining, consultation, the right to
strike, etc.), while systematically promoting dialog between
the parties and seeking an adequate level of agreement on
and participation in Company strategies by employees.
Labor relations efforts at the Group level continue to be con-
ducted in accordance with the model established under Enel’s
Global Framework Agreement (GFA) signed in Rome in 2013
with the Italian federations and with the global federations
IndustriAll and Public Services International. This agreement
cess includes the periodic assessment and monitoring of the
risks to which employees, contractors and the community at
large are exposed.
Workplace accident
developments
In 2014, Enel’s accident frequency and severity indexes came
to 1.32 and 0.07, respectively, and the operational accident
frequency rate declined by 3%. The operational accident
frequency rate focuses on certain types of especially serious
accidents that are the most related to the Company’s core
business (e.g. electrocutions, falling from heights, blows-
crushing-cuts, exposure to hazardous agents, and explo-
sions).
126
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS In 2014, there were three fatal accidents involving Enel per-
Conduct
sonnel, and there were 16 fatal accidents involving emplo-
yees of contractors.
For each serious or mortal accident in 2014, a group of ex-
perts was appointed, in line with applicable procedures, in
order to look into the causes, dynamics and circumstances
and to determine any action to be taken in order to prevent
similar situations from recurring. After the analysis process,
targeted actions for improvement were defined, most of
which have already been implemented.
The work of the cross-functional working group has also
continued, the purpose of which is to discuss accident ex-
periences and working methods while placing particular
emphasis on flue maintenance.
In 2014, Enel and Endesa were also confirmed as best in
class in occupational health and safety within the electrical
utilities segment of the Dow Jones Sustainability Index.
Project “One Safety”
Launched in 2012, “One Safety” continues to be one of the
primary means of promoting and furthering Enel’s culture
of safety thanks to its two main lines of action, i.e. the Lea-
dership area for the enhancement of leadership for safety
and the Conduct area for the promotion of safe, responsible
conduct, both of which actively involve all Enel employees
as well as the various contractor firms.
It has been nearly three years since the global launch, and
“One Safety” has transformed from a project to a systema-
tic process of observing conduct that is increasingly rooted
in the Company’s culture. Since 2012, over 10 million be-
haviors have been observed at the nearly 1,000 facilities
selected throughout Enel. “One Safety” has also been imple-
mented in 25 shared civil sites in a manner specific to office
spaces.
In 2014, three workshops were held in Italy, Russia and
Spain in order to define measures for improvement to be
implemented, based on the experience gained, in order to
ensure that the process remains effective. Out of these mee-
tings came the guidelines for carrying out the project in line
with local needs, the introduction of new means of preven-
ting human error, and a greater focus on the quality of the
observations.
Safety in tender processes
When it comes to safety, Enel makes no distinction between
our own employees and those of our contractors, and we
confirmed our commitment to promoting and ensuring the
safety of contractor employees again in 2014.
Companies wanting to work for Enel must demonstrate,
and then periodically verify, that they meet strict safety re-
quirements. The vendor qualification and rating systems for
contractors have become a consolidated part of our busi-
Leadership
ness processes.
The leadership program began in 2012 within the scope of
the GOAL Managerial Training Program and involved more
than 1,000 managers around the world in 32 training ses-
sions. Training then focused on 200 internal trainers, who
began a cascade-training program in 2013. This program
was completed in 2014 and centered around an analysis of
the Enel film “The Heart of the Matter”. A total of 6,500 pe-
ople were involved in 370 training sessions in all countries
of the Group, including both the internal trainers and the
cascade-training programs.
These efforts were accompanied by “safety walks” of Enel
facilities, which were conducted by heads of organizatio-
nal units and company functions in order to demonstrate
their focus and commitment to promoting a culture of sa-
fety while ensuring the adoption of safe, responsible con-
duct and verifying the condition of plant and equipment. In
2014, more than 3,000 safety walks were held throughout
the Group.
As part of the general contract conditions for the Group,
there are specific clauses regarding health and safety, inclu-
ding in reference to the minimum safety requirements that
any subcontractors used must meet.
In 2014, after an initial pilot phase, participation in the
project “One Safety Contractors” was extended to contrac-
tors throughout the Group. Over 240 companies joined the
project in 2014 and observed the conduct of their employe-
es. Many of these contractors have also established plans for
improvement and received benefits, such as reductions in
their security deposit, increases in their safety points under
the vendor rating system, and the right to use an Enel logo
designed specifically for the project.
Throughout the Group, contractors have been involved in
training and awareness efforts, and periodic Contractor
Safety Days have been organized. These workshops are
dedicated to contractors in order to share information on
accident trends and to promote the main initiatives imple-
mented for the purposes of constant improvement.
127
In concert with the activities aimed at increasing contractor
campaigns and training initiatives. In November, we laun-
awareness of health and safety issues, Enel has continued
ched “Focus on Health and Safety” as an opportunity for re-
with field inspections and monitoring of works done by
flection and discussion in advance of “International Health
contractors. In 2014, safety controls were also enhanced by
and Safety Week” during the first half of 2015. For “Focus
way of over 260,000 controls throughout the Group, for an
on Health and Safety”, over 700 initiatives in every country
increase of 24% over the previous year.
in which we operate were organized, including “Cleaning
Safety for the community and
other third parties
All electricity and gas production and distribution systems
throughout our territory have been constructed in accor-
dance with applicable laws, regulations and engineering
standards in order to eliminate or minimize risks to the com-
munity that could potentially arise in relation to these infra-
structures. We also periodically update both the assessment
of operating risks related to production processes and the
consequent preventive and protective measures established
to control these risks, thereby ensuring worker health and
safety while also safeguarding third parties and all of the
communities in the areas in which we operate.
Structural safety and
technological innovation
Days” in Spain, “One Safety” workshops in Slovakia, first-aid
courses in Romania and Costa Rica and course on the use of
defibrillators in Italy, safety walks in Peru and Argentina, a
safety quiz in Greece, emergency management simulations
in Russia, and contractor meetings and other health semi-
nars in many other countries in which the Group operates.
In 2014, we provided nearly one million hours of safety trai-
ning and awareness activities related to both hard and soft
skills in order to both comply with legal obligations and in-
crease the specific skills and knowledge of workers throu-
ghout the Group.
During the year in Italy, in order to enhance the perception
of risk in office areas, the pilot phase of the project “Involve
Yourself in Safety” was launched. This project is based on the
experience gained with the project “Six Months of Safety”
and is intended for young talents working in staff areas in
order to increase their awareness of issues of health and sa-
fety in the workplace, while also creating greater synergy
between work and the various aspects of safety. In 2015,
implementation will continue throughout the Group.
In 2014, experimentation continued with a number of safe-
ty innovation projects, including the “Zero Accidents Project”
(ZAP), which seeks to improve safety management at large-
Health
scale work sites; the “Active Safety at Work” project, the goal
The Enel Group is constantly committed to providing a safe
of which is to promote the use and control of personal pro-
and healthful workplace and to creating a culture of preven-
tection devices when conducting distribution activities; and
tion while promoting health in the workplace as an essen-
the “BOA” project, aimed at supporting the management of
tial component in improving working life and productivity
interference during power plant maintenance.
as a whole.
For a number of years now, we have also been pursuing a
The Global Health Plan launched in 2013 was further con-
plan for infrastructure improvements to our fleet of Com-
solidated in 2014 with the publication of two documents:
pany vehicles, which included the adoption of new safety
> the Health Policy, which applies to the entire Group and
systems and support devices, which have been implemen-
defines the basic principles of the culture of safety and
ted progressively on all new vehicles in the fleet.
wellbeing in the workplace;
Development of the culture
of safety: communication and
training
> the Policy of Stress Prevention and Promotion of Or-
ganizational Wellbeing, which promotes wellbeing in
the workplace and best practices for increasing aware-
ness and preventing factors that lead to stress.
Within the scope of the Health Plan and as concerns the is-
sue of cardiovascular disease, in 2014 we launched a pro-
So as to reiterate the strategic importance of health and sa-
gram for the installation and use of defibrillators, which
fety in the workplace as a social value and guide in conduc-
involved the most populous facilities of the Group around
ting business, Enel has designed a variety of promotional
the world.
128
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Finally, the Enel Group participated in the International
Labor Organization (ILO) project “Safe Work Without Al-
specific CO2 emissions for the Enel Group have declined by
more than 36%, thanks to increased generation from rene-
cohol and Drugs”, an initiative promoted and funded by
wable resources (+4% in 2014) due to the expansion of in-
the Office of the President of the Council of Ministers aimed
stalled capacity and favorable water conditions. This perfor-
at developing company plans for the prevention of drug
mance is in line with the target set for 2020, equal to 395 g/
and alcohol use in the workplace.
kWh. In addition, Enel reduced emissions by 15% compared
Climate strategy and the
environment
with 2007, the year immediately preceding the first commit-
ment period defined by the Kyoto Protocol.
For a number of years now, Enel has also been active on the
voluntary emissions reduction market, which is intended for
Managing environmental issues, fighting climate change
parties (i.e. companies, institutions, end users, etc.) who in-
and fostering environmentally sustainable development are
tend to monitor or neutralize the carbon footprint of their
strategic factors in the operation and development of a bu-
various internal and external activities (e.g. events, publica-
siness and are decisive elements in establishing leadership
tions, products and services, events, etc.). All of these initia-
in energy markets.
Enel recognizes the central importance of the fight against
tives are associated with the “CO2 NEUTRAL” trademark that
Enel registered in 2011.
climate change within the scope of the responsibilities of a
Alongside these mitigation policies, the Enel Group is also
global player in the energy industry and has, for years now,
working on adapting to the process of climate change. Ex-
been taking steps to reduce greenhouse gas emissions in all
treme weather can have a significant impact on the level
of the countries in which we operate, both by observing the
and quality of power generation, distribution and provision
obligations of the ETS Directive and by implementing our
over both the short term and the long term. For this reason,
own long-term strategy.
Enel, working through Endesa, has launched a pilot project
In that regard, since 2009 Enel has taken action in this field,
in Spain to determine the vulnerability of three hydroelec-
signing on to the Eurelectric initiative under which 60 firms
tric plant along the Guadalquivir reservoir to climate chan-
have committed to transforming the European electricity
ges over the span of a hundred years.
sector into a CO2 “emissions-neutral” industry by 2050. In
addition, in 2014 Enel joined two global platforms, the Ca-
Enel has also set itself other targets to achieve by 2020 that
regard the most significant environmental issues associated
ring for Climate Initiative (adopting the Business Leadership
with the Group’s operations: a reduction of 10% in total
Criteria on Carbon Pricing) and the Put a Price on Carbon
Statement. The two initiatives, launched by the United Na-
tions and the World Bank, respectively, call on companies to
specific emissions of sulfur dioxide (SO2), a decrease of 10%
in total specific emissions of nitrogen oxides (NOx); a reduc-
tion of 50% in total specific emissions of particulates; and a
demonstrate their leadership in dealing with climate chan-
reduction of 10% in total specific consumption of water. All
ge through action to support a carbon emissions price and
reductions are in relation to 2010 levels.
the adoption of that price in their own investment decisions.
Another key element of environmental policy is the gradual
As of today, more than 47% of the power Enel generates
application of our internationally recognized Environmental
comes from zero-emission sources. More than 800 MW of
Management System to all of the Enel Group’s operations.
new capacity from renewable sources were installed by Enel
Currently, ISO 14001- certified systems represent more than
Green Power in 2014, confirming our commitment to the
94% of net efficient capacity, while the remainder is attri-
development of carbon-free power generation, a commit-
butable to the net capacity of the plants that are part of the
ment which will continue in the years to come.
medium/long-term disposal plan.
Today, Enel has renewable resource power plants around
the world, with some 36,800 MW of net efficient capacity,
In addition the environmental management systems, oppor-
representing 38.3% of the total capacity of the Group’s ge-
tunities for improvement and priority areas for action are iden-
neration assets.
tified with the help of the MAPEC (Mapping of Environmental
Compliance) methodology, which makes it possible to map
Since 1990 (the benchmark year for the Kyoto Protocol),
the main areas of development in environmental governance.
129
In the nuclear power field, Enel is publicly committed to en-
suring that its plants adopt a clear nuclear safety policy and
Preserving biodiversity
that those facilities are operated so as to ensure absolute
Preserving biodiversity is one of the strategic objectives of
priority for safety and protection of employees, the gene-
Enel’s environmental policy.
ral public and the environment. Enel’s nuclear safety policy,
The Group promotes a number of projects throughout the
which was approved in 2010 and is published on the corpo-
world with the aim of supporting the preservation of ecosy-
rate website (http://www.enel.com/en-GB/sustainability/
stems and the natural habitats of the various territories in
our_responsibility/enel_nuclear/), promotes excellence in
which we operate, while playing an active role in the local
all plant operations, adopting a rationale that goes beyond
communities.
mere regulatory compliance and seeks instead to ensure the
In 2014, Enel continued its mapping and updating of the
adoption of management approaches that incorporate the
biodiversity protection efforts of the Group, an integral part
principles of continuous improvement and safe manage-
of the Group Biodiversity Plan.
ment of risks.
Water resource management
The projects are in areas adjacent to production plants and
other installations and involve projects of various types,
including monitoring, safeguarding, research and deve-
lopment, corrective or compensatory measures, and social
Water is an essential part of electricity generation and Enel
and environmental studies.
is fully aware that the future availability of this resource is
Enel plans any operations that might impact ecosystems
threatened in energy scenarios owing to the interaction of
using a “mitigation hierarchy” approach, which establishes
factors such as the increase in the world’s population, the
a scale of priorities in selecting actions:
economic development of the emerging countries and cli-
> avoid or prevent any potential adverse impact;
mate change.
> reduce the effects of actions;
Enel has long sought to enhance the efficiency of its manage-
> apply mitigation techniques;
ment of the water it uses and conducts ongoing monitoring
> offset the residual impact.
of all power plants located in areas threatened by water scar-
For each installation, Enel analyzes proximity with protected
city at the following levels of analysis:
areas, conservation values, the presence of valuable ecosy-
> mapping of the production sites located in areas of po-
stems, biotopes and endangered animal or plant species
tential water scarcity, where the average value of renew-
in accordance with international classifications such as the
able water resources per capita is less than the target set
“Red List” of the International Union for Conservation of Na-
by the FAO and also identified by using special software
ture and Natural Resources (IUCN).
developed by the World Business Council for Sustainable
As regards plant operations, in many areas, in agreement
Development;
with local authorities, independent experts perform biomo-
> identification of “critical” production sites, i.e. those with
nitoring studies of the land, rivers and sea in order to assess
fresh water supplies;
the impact of operations on biodiversity and the adequacy
> more efficient management by making changes to plants
of any compensatory or improvement measures taken.
or processes to maximize use of waste water and sea wa-
ter;
> monitoring of climate and vegetation data for each site.
Globally, Enel returns about 99% of the water used, and only
about 5% of the Group’s total output uses and/or consumes
fresh water in water-stressed areas.
In 2014, overall water consumption amounted to 185.9 mil-
lion cubic meters, a reduction on 2013 as a result of the decli-
ne in thermal and nuclear generation. Specific consumption
in 2014 came to 0.64 l/kWh, in line with 2013, confirming
Enel’s goal of reducing water consumption by 10% from its
2010 level by 2020.
Supplier management
In conducting its business and managing relationships with
its suppliers, Enel is inspired by the principles contained in
the Code of Ethics, the Zero-Tolerance-of-Corruption Plan,
the Compliance Model under Legislative Decree 231/2001,
and its Policy on Human Rights.
The Group provides clear disclosure on the specific prin-
ciples and internal rules governing the operations of the
Company and expects its suppliers be inspired by the same
values in managing activities and relationships with their
stakeholders.
130
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Enel awards procurement contracts for works, services and
men, equal treatment, non-discrimination, abuse and ha-
supplies in accordance with the provisions of law and the
rassment, freedom to unionize, freedom of association and
principles of economy, fairness, competition and publicity,
representation, prevention of forced labor, safety and en-
using procurement procedures that ensure companies can
vironmental protection requirements, health and sanitary
participate with the utmost transparency, objectivity and
conditions and conditions concerning work rules, pay, so-
equality of treatment.
cial security contributions, insurance and taxes. In order to
In addition, specific sustainability criteria are adopted in the
ensure compliance with these obligations, Enel reserves the
qualification process, in procurement decisions, in contrac-
right to carry out control and monitoring activities, and to
tual language and in procedures for verification of the per-
terminate contracts in the event of proven violations.
formance of suppliers.
Finally, Enel has established a single global registration
Important requirements in the qualification process are pro-
point for suppliers and for all Enel Group companies. This re-
tecting the health and safety of workers and preserving the
presents a single interface for the entire global procurement
environment. In particular, for all product groups involved
community (PortalOne). After a quick and easy registration
in works to be contracted out, suppliers are assessed on the
process, any supplier from around the world can fully its en-
basis of the Safety Index, which considers the organizational
tire relationship with any company of the Enel Group, re-
arrangements of the supplier that are intended to ensure
spond to invitations to tender, manage their qualification
compliance with the relevant standards and monitoring (in-
process, see their own vendor rating, etc.
cluding OHSAS 18001 certification, which is becoming man-
datory for all contractors, including small firms). For product
groups with an environmental impact, suppliers must also
implement an ISO 14001-compliant environmental mana-
gement system. This requirement is being extended to all
sectors that could raise potential issues in this area.
The qualification process is completed by the vendor rating
system, which has been implemented at all Enel units in Italy
and abroad. It is designed to monitor the performance of
suppliers and contractors with regard to both the propriety
of their conduct during tender procedures and the safety,
quality and punctuality of their performance during execu-
tion. More specifically, the vendor rating is used to monitor
respect for the environment and compliance with safety
standards and human rights regulations.
In all of its contracts for works, services and supplies, Enel
uses specific contractual clauses requiring all of its suppliers/
partners to comply with the principles of the Code of Ethics,
the Zero-Tolerance-of-Corruption Plan, the Compliance Mo-
del, and the Policy on Human Rights.
These general terms and conditions of contract are made
up of a general part, which is applicable across all countri-
es, plus a series of country annexes, containing the specific
clauses applicable in individual countries. There are curren-
tly nine annexes (one each for Italy, Spain, Portugal, Chile,
Peru, Colombia, Brazil, Romania and Slovakia) and a further
seven will be part of the next edition (Russia, Argentina,
Guatemala, Panama, El Salvador, Mexico and Costa Rica).
With these clauses, Enel requires its contractors and sub-
contractors to respect ethical and social obligations, and
obligations concerning child labor and protection of wo-
131
Related parties
As an operator in the field of generation, distribution, tran-
or indirectly controlled by the Italian State, the Group’s con-
sport and sale of electricity and the sale of natural gas, Enel
trolling shareholder.
carries out transactions with a number of companies directly
The table below summarizes the main types of transactions carried out with such counterparties.
Related party
Relationship
Nature of main transactions
Acquirente Unico - Single Buyer
Fully controlled (indirectly) by the Ministry for the
Economy and Finance
Purchase of electricity for the enhanced
protection market
GME - Energy Markets Operator
Fully controlled (indirectly) by the Ministry for the
Economy and Finance
Sale of electricity on the Power Exchange
Purchase of electricity on the Power Exchange for
pumping and plant planning
GSE - Energy Services Operator
Fully controlled (directly) by the Ministry for the
Economy and Finance
Sale of subsidized electricity
Payment of A3 component for renewable
resource incentives
Terna
Eni Group
Finmeccanica Group
Poste Italiane Group
Indirectly controlled by the Ministry for the
Economy and Finance
Sale of electricity on the Ancillary Services Market
Purchase of transport, dispatching and metering
services
Directly controlled by the Ministry for the
Economy and Finance
Sale of electricity transport services
Purchase of fuels for generation plants, storage
services and natural gas distribution
Directly controlled by the Ministry for the
Economy and Finance
Purchase of IT services and supply of goods
Fully controlled (directly) by the Ministry
for the Economy and Finance
Purchase of postal services
Finally, Enel also maintains relationships with the pension
are determined by the Authority for Electricity, Gas and
funds FOPEN and FONDENEL, Fondazione Enel and Enel
the Water System.
Cuore, an Enel non-profit company devoted to providing
social and healthcare assistance.
For more details on transactions with related parties, ple-
All transactions with related parties were carried out on
ase see the discussion in note 47 to the consolidated fi-
normal market terms and conditions, which in some cases
nancial statements.
132
ENEL ANNUAL REPORT 2014REPORT ON OPERATIONS Reconciliation of shareholders’
equity and net income of Enel
SpA and the corresponding
consolidated figures
Pursuant to CONSOB Notice DEM/6064293 of July 28, 2006,
sults for the year and shareholders’ equity with the corre-
the following table provides a reconciliation of Group re-
sponding figures for the Parent Company.
Millions of euro
Income
statement
Shareholders’
equity
Income
statement
Shareholders’
equity
at Dec. 31, 2014
at Dec. 31, 2013 restated
Financial statements - Enel SpA
558
25,136
1,372
25,867
Carrying amount and impairment adjustments of consolidated equity
investments and equity investments accounted for using the equity
method
Shareholders’ equity and net income (calculated using harmonized
accounting policies) of the consolidated companies and groups and
those accounted for using the equity method, net of non-controlling
interests
Consolidation differences at the Group consolidation level
Intercompany dividends
Elimination of unrealized intercompany profits, net of tax effects and
other minor adjustments
TOTAL SHAREHOLDERS OF THE PARENT COMPANY
NON-CONTROLLING INTERESTS
CONSOLIDATED FINANCIAL STATEMENTS
(3,211)
(82,169)
7
(77,828)
20,710
(890)
(15,715)
(935)
517
255
772
79,257
9,294
6,149
(745)
-
(3,540)
(12)
31,506
19,639
51,145
(8)
3,235
1,545
4,780
74,861
12,235
-
806
35,941
16,891
52,832
133
134
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS Consolidated
financial
statements
135
Consolidated income statement
Millions of euro
Notes
Revenue
Revenue from sales and services
Other revenue and income
Costs
Electricity, gas and fuel purchases
Services and other materials
Personnel
Depreciation, amortization and impairment losses
Other operating expenses
Capitalized costs
Net income/(expense) from commodity contracts
measured at fair value
Operating income
Financial income from derivatives
Other financial income
Financial expense from derivatives
Other financial expense
Share of income/(losses) of equity investments accounted
for using the equity method
Income before taxes
Income taxes
Net income from continuing operations
Net income from discontinued operations
Net income for the year (shareholders of the Parent
Company and non-controlling interests)
Attributable to shareholders of the Parent Company
Attributable to non-controlling interests
Basic earnings/(loss) per share attributable to shareholders
of the Parent Company (euro)
Diluted earnings/(loss) per share attributable to
shareholders of the Parent Company (euro)
Basic earnings/(loss) per share from continuing operations
attributable to shareholders of the Parent Company (euro)
Diluted earnings/(loss) per share from continuing
operations attributable to shareholders of the Parent
Company (euro)
7.a
7.b
[Subtotal]
8.a
8.b
8.c
8.d
8.e
8.f
[Subtotal]
9
10
11
10
11
12
13
14
14
14
14
2014
2013 restated (1)
of which with related
of which with related
parties
8,736
404
10,367
2,561
24
78
37
33
parties
5,751
367
7,595
2,440
53
46
23
28
75,427
3,236
78,663
38,954
16,698
4,555
6,951
2,821
(1,434)
68,545
(378)
9,740
756
1,693
1,210
4,043
217
7,153
2,373
4,780
-
4,780
3,235
1,545
0.34
0.34
0.34
0.34
73,328
2,463
75,791
36,928
17,179
4,864
12,670
2,362
(1,524)
72,479
(225)
3,087
2,078
1,248
916
5,540
(35)
(78)
(850)
772
-
772
517
255
0.05
0.05
0.05
0.05
(1) The consolidated income statement for 2013 has been restated to reflect the effects of the retrospective application of IFRS 11. For more details, please
see note 4 below. In addition, the consolidated income statement has been modified to improve the presentation of costs for purchases of raw materials
and electricity and the impact on profit or loss of derivatives. This entailed a number of reclassifications of the figures for 2013 in order to ensure compa-
rability.
136
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS
Statement of consolidated comprehensive
income
Millions of euro
Notes
Net income for the year
Other comprehensive income recyclable to profit or loss
Effective portion of change in the fair value of cash flow hedges
Share of the other comprehensive income of equity investments accounted for using the
equity method
Change in the fair value of financial assets available for sale
Exchange rate differences
Other comprehensive income not recyclable to profit or loss
Remeasurements of net defined benefit liabilities/(assets)
Total other comprehensive income/(loss) for the period
31
Total comprehensive income/(loss) for the period
Attributable to:
- shareholders of the Parent Company
- non-controlling interests
2014
772
(347)
(13)
(23)
(717)
(307)
(1,407)
(635)
(205)
(430)
2013
restated (1)
4,780
(190)
(18)
(105)
(3,192)
(188)
(3,693)
1,087
1,514
(427)
(1) The consolidated income statement for 2013 has been restated to reflect the effects of the retrospective application of IFRS 11. For more details, please see
note 4 below.
137
Consolidated balance sheet
Millions of euro
ASSETS
Non-current assets
Property, plant and equipment
Investment property
Intangible assets
Goodwill
Deferred tax assets
Equity investments accounted for using the
equity method
Derivatives
Other non-current financial assets
Other non-current assets
Notes
15
16
17
18
19
20
21
22
23
at Dec. 31, 2014
at Dec. 31, 2013 restated (1)
at Jan. 1, 2013 restated
of which
with related
parties
of which with
related parties
of which with
related parties
73,089
143
16,612
14,027
7,067
872
1,335
3,645
885
80,263
181
18,055
14,967
6,186
1,372
444
5,970
817
82,189
197
19,950
15,809
6,767
1,951
953
4,588
781
4
15
Current assets
Inventories
Trade receivables
Tax receivables
Derivatives
Other current financial assets
Other current assets
Cash and cash equivalents
Assets classified as held for sale
TOTAL ASSETS
[Total]
117,675
128,255
133,185
24
25
26
21
27
28
29
[Total]
30
3,334
12,022
1,220
1,547
5,500
3,984
2,706
13,088
42,181
6,778
166,634
142
3,555
11,378
1,709
2,690
5,607
2,557
7,873
35,369
241
163,865
1,278
2
161
3,290
11,555
1,603
2,224
7,650
2,281
9,726
38,329
317
171,831
74
55
904
37
70
(1) The consolidated balance sheet at December 31, 2013 has been restated to reflect the effects of the retrospective application of IFRS 11, of amendments
of IAS 32 and of the completion of the allocation of the purchase price of a number of business combinations carried out by the Renewable Energy
Division in 2013. For more details, please see note 4 below. In addition, the balance sheet has been modified to improve the presentation of receivables
and payables in respect of construction contract and the balance sheet impact of derivatives. This entailed a number of reclassifications of the figures at
December 31, 2013, in order to ensure comparability.
138
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS
Millions of euro
Notes
LIABILITIES AND SHAREHOLDERS’ EQUITY
at Dec. 31, 2014
at Dec. 31, 2013 restated (1)
at Jan. 1, 2013 restated
of which with
related parties
of which with
related parties
of which with
related parties
Equity attributable to the shareholders of
the Parent Company
Share capital
Reserves
Retained earnings (loss carried forward)
Non-controlling interests
Total shareholders’ equity
Non-current liabilities
Long-term borrowings
Post-employment and other employee
benefits
Provisions for risks and charges
Deferred tax liabilities
Derivatives
Other non-current liabilities
Current liabilities
Short-term borrowings
Current portion of long-term borrowings
Provisions for risk and charges
Trade payables
Income tax payable
Derivatives
Other current financial liabilities
Other current liabilities
Liabilities included in disposal groups
classified as held for sale
Total liabilities
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
9,403
3,362
18,741
31,506
19,639
51,145
48,655
3,687
4,051
9,220
2,441
1,464
[Total]
31
32
33
34
19
21
35
[Total]
69,518
3,252
5,125
1,187
32
32
34
36
21
37
39
[Total]
30
9,403
7,084
19,454
35,941
16,891
52,832
50,905
3,677
6,504
10,795
2,216
1,259
75,356
2,484
4,658
1,467
24
2
9,403
8,747
17,625
35,775
16,303
52,078
55,733
4,521
7,256
11,658
2,487
1,143
82,798
3,968
4,023
1,291
2
2
13,419
3,159
12,363
3,708
13,089
3,551
253
5,441
1,177
10,827
40,681
5,290
115,489
166,634
3
286
2,940
1,100
10,359
35,657
20
111,033
163,865
4
24
354
2,534
1,105
10,584
36,948
7
119,753
171,831
1
39
(1) The consolidated balance sheet at December 31, 2013, has been restated to reflect the effects of the retrospective application of IFRS 11, of amendments
of IAS 32 and of the completion of the allocation of the purchase price of a number of business combinations carried out by the Renewable Energy Divi-
sion in 2013. For more details, please see note 4 below.
139
Statement of changes in consolidated
shareholders’ equity
Share capital and reserves attributable to the shareholders of the Parent Company
At January 1, 2013
Effect of application of IFRS 11
Share
capital
9,403
-
Share
premium
reserve Legal reserve
Other
reserves
5,292
1,881
2,262
-
-
-
At January 1, 2013 restated
9,403
5,292
1,881
2,262
Dividends and interim dividends
Transactions with non-controlling
interests
Change in scope of consolidation
Comprehensive income for the
period
of which:
- other comprehensive income/(loss)
for the period
- net income/(loss) for the period
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividends and interim dividends
Transactions with non-controlling
interests
Change in scope of consolidation
Comprehensive income for the
period
of which:
- other comprehensive income/(loss)
for the period
- net income/(loss) for the period
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Reserve from
translation
of financial
statements
in currencies
other than
euro
Reserve from
cash flow hedge
Reserve from
measurement
of financial
instruments AFS
92
11
103
-
98
(1,482)
42
(1,440)
-
-
-
229
-
229
-
-
-
(1,285)
(152)
(101)
(13)
(170)
3,235
1,514
(427)
1,087
Reserve from
Reserve from
Reserve
from equity
investments
Equity
attributable to
disposal of equity
transactions in
accounted for
Reserve for
Retained earnings
the shareholders
interests without
non-controlling
using the equity
employee
and loss carried
of the Parent
Non-controlling
shareholders’
loss of control
interests
method
benefits
Company
interests
35,775
-
35,775
(1,410)
(14)
76
(1,721)
3,235
35,941
(1,222)
(3,086)
78
16,312
(9)
16,303
(829)
1,740
104
(1,972)
1,545
16,891
(1,541)
5,385
(666)
Total
equity
52,087
(9)
52,078
(2,239)
1,726
180
(3,693)
4,780
52,832
(2,763)
2,299
(588)
749
749
(28)
-
-
-
-
-
-
-
-
-
-
78
78
-
-
6
(22)
-
-
-
-
-
-
-
-
8
(53)
(45)
(362)
(362)
-
-
4
-
-
-
-
-
59
(202)
-
-
-
-
-
-
3
(19)
-
(74)
forward
17,625
17,625
(1,410)
-
4
-
3,235
19,454
(1,222)
-
(8)
517
-
517
(101)
-
128
-
-
-
(13)
(170)
721
62
(58)
(528)
(2,831)
(3)
(255)
(23)
-
105
(2,113)
(193)
(671)
18,741
(722)
517
31,506
(685)
255
19,639
(1,407)
772
51,145
(243)
(235)
(23)
(19)
(202)
(205)
(430)
(635)
-
-
6
-
-
21
(1,285)
-
(152)
-
(243)
-
(235)
-
At December 31, 2013 restated
9,403
5,292
1,881
2,262
(1,084)
(1,592)
At December 31, 2014
9,403
5,292
1,881
2,262
(1,321)
(1,806)
140
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS
Statement of changes in consolidated
shareholders’ equity
Share capital and reserves attributable to the shareholders of the Parent Company
Reserve from
translation
of financial
statements
in currencies
Share
premium
Share
capital
9,403
5,292
1,881
2,262
reserve Legal reserve
reserves
euro
cash flow hedge
instruments AFS
Other
other than
Reserve from
Reserve from
measurement
of financial
(1,482)
42
(1,440)
229
229
At January 1, 2013 restated
9,403
5,292
1,881
2,262
At January 1, 2013
Effect of application of IFRS 11
Dividends and interim dividends
Transactions with non-controlling
interests
Change in scope of consolidation
Comprehensive income for the
period
of which:
- other comprehensive income/(loss)
for the period
- net income/(loss) for the period
Dividends and interim dividends
Transactions with non-controlling
interests
Change in scope of consolidation
Comprehensive income for the
period
of which:
- other comprehensive income/(loss)
for the period
- net income/(loss) for the period
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,285)
(152)
(101)
(1,285)
(152)
(101)
-
-
-
-
-
-
-
-
-
-
-
-
-
92
11
103
-
98
-
-
-
6
(243)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
21
(235)
(243)
(235)
(23)
-
-
-
-
-
-
-
-
(23)
-
105
At December 31, 2013 restated
9,403
5,292
1,881
2,262
(1,084)
(1,592)
128
Reserve from
disposal of equity
interests without
loss of control
Reserve from
transactions in
non-controlling
interests
Reserve
from equity
investments
accounted for
using the equity
method
Reserve for
employee
benefits
Retained earnings
and loss carried
forward
Equity
attributable to
the shareholders
of the Parent
Company
Non-controlling
interests
Total
shareholders’
equity
749
-
749
-
(28)
-
-
-
-
721
-
(2,831)
(3)
-
-
-
78
-
78
-
6
(22)
-
-
-
62
-
(255)
-
-
-
-
At December 31, 2014
9,403
5,292
1,881
2,262
(1,321)
(1,806)
(2,113)
(193)
8
(53)
(45)
-
-
-
(362)
-
(362)
-
4
-
17,625
35,775
-
17,625
(1,410)
4
-
-
35,775
(1,410)
(14)
76
16,312
(9)
16,303
(829)
1,740
104
52,087
(9)
52,078
(2,239)
1,726
180
(13)
(170)
3,235
1,514
(427)
1,087
(13)
-
(58)
-
-
3
(170)
-
(528)
-
-
59
(19)
(202)
(19)
-
(74)
(202)
-
(671)
3,235
19,454
(1,222)
-
(8)
517
-
517
18,741
(1,721)
3,235
35,941
(1,222)
(3,086)
78
(1,972)
1,545
16,891
(1,541)
5,385
(666)
(3,693)
4,780
52,832
(2,763)
2,299
(588)
(205)
(430)
(635)
(722)
517
31,506
(685)
255
19,639
(1,407)
772
51,145
141
Consolidated statement of cash flows
Millions of euro
Notes
2014
2013 restated (1)
of which with
related parties
of which with
related parties
Income before taxes for the year
Adjustments for:
Amortization and impairment losses of intangible assets
Depreciation and impairment losses of property, plant and equipment
Exchange rate adjustments of foreign currency assets and liabilities (including cash
and cash equivalents)
Accruals to provisions
Net financial (income)/expense
(Gains)/Losses from disposals and other non-monetary items
Cash flow from operating activities before changes in net current assets
Increase/(Decrease) in provisions
(Increase)/Decrease in inventories
(Increase)/Decrease in trade receivables
(Increase)/Decrease in financial and non-financial assets/liabilities
Increase/(Decrease) in trade payables
Interest income and other financial income collected
Interest expense and other financial expense paid
Income taxes paid
Cash flows from operating activities (a)
- of which discontinued operations
Investments in property, plant and equipment
Investments in intangible assets
Investments in entities (or business units) less cash and cash equivalents acquired
Disposals of entities (or business units) less cash and cash equivalents sold
(Increase)/Decrease in other investing activities
Cash flows from investing/disinvesting activities (b)
- of which discontinued operations
Financial debt (new long-term borrowing)
Financial debt (repayments and other net changes)
Collections/(Payments) for sale/(acquisition) of non-controlling interests
Incidental expenses in disposal of equity interests without loss of control
32
Dividends and interim dividends paid
Cash flows from financing activities (c)
- of which discontinued operations
Impact of exchange rate fluctuations on cash and cash equivalents (d)
Increase/(Decrease) in cash and cash equivalents (a+b+c+d)
Cash and cash equivalents at the beginning of the year (2)
Cash and cash equivalents at the end of the year (3)
(78)
1,709
10,212
1,285
911
2,580
(720)
15,899
(1,740)
(62)
(1,440)
212
1,315
1,300
(4,030)
(1,396)
10,058
-
(6,021)
(680)
(73)
312
325
(6,137)
-
4,582
(2,400)
1,977
(50)
(2,573)
1,536
-
(102)
5,355
7,900
13,255
58
39
(549)
23
28
7,154
1,598
4,698
(264)
1,023
2,322
(92)
16,439
(1,889)
(266)
(531)
(602)
(871)
1,275
(3,695)
(2,606)
7,254
-
(5,311)
(610)
(206)
1,409
615
(4,103)
-
5,336
(9,619)
1,814
(85)
(2,044)
(4,598)
-
(421)
(1,868)
9,768
7,900
(374)
42
157
37
33
(1) The consolidated statement of cash flows has been restated to reflect the retrospective application of IFRS 11. For more details, please see note 4 below.
(2) Of which cash and cash equivalents equal to €7,873 million at January 1, 2014 (€9,726 million at January 1, 2013), short-term securities equal to €17
million at January 1, 2014 (€42 million at January 1, 2013) and cash and cash equivalents pertaining to assets held for sale equal to €10 million at January
1, 2014 (none at January 1, 2013).
(3) Of which cash and cash equivalents equal to €13,088 million at December 31, 2014 (€7,873 million at December 31, 2013), short-term securities equal to
€140 million at December 31, 2014 (€17 million at December 31, 2013) and cash and cash equivalents pertaining to assets held for sale in the amount of
€27 million at December 31, 2014 (€10 million at December 31, 2013).
142
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated
financial statements
1
Form and content of the
financial statements
Enel SpA has its registered office in Viale Regina Margherita
137, Rome, Italy, and since 1999 has been listed on the Mi-
lan stock exchange. Enel is an energy multinational and is
one of the world’s leading integrated operators in the elec-
tricity and gas industries, with a special focus on Europe and
Latin America.
The consolidated financial statements for the period ended
December 31, 2014 comprise the financial statements of
Enel SpA, its subsidiaries and Group holdings in associates
and joint ventures, as well as the Group’s share of the as-
sets, liabilities, costs and revenue of joint operations (“the
Group”). A list of the subsidiaries, associates, joint opera-
tions and joint ventures included in the scope of consolida-
tion is attached.
The consolidated financial statements were approved for
publication by the Board on March 18, 2015.
These financial statements have been audited by Reconta
Ernst & Young SpA.
Basis of presentation
The consolidated financial statements for the year ended
December 31, 2014 have been prepared in accordance with
international accounting standards (International Accounting
Standards - IAS and International Financial Reporting Stan-
dards - IFRS) issued by the International Accounting Standards
Board (IASB), the interpretations of the International Financial
Reporting Interpretations Committee (IFRIC) and the Standing
Interpretations Committee (SIC), recognized in the European
Union pursuant to Regulation (EC) 1606/2002 and in effect as
of the close of the year. All of these standards and interpreta-
tions are hereinafter referred to as the “IFRS-EU”.
The financial statements have also been prepared in confor-
mity with measures issued in implementation of Article 9,
paragraph 3, of Legislative Decree 38 of February 28, 2005.
The consolidated financial statements consist of the conso-
lidated income statement, the statement of consolidated
comprehensive income, the consolidated balance sheet, the
statement of changes in consolidated shareholders’ equity
and the consolidated statement of cash flows and the rela-
ted notes.
The assets and liabilities reported in the consolidated balance
sheet are classified on a “current/non-current basis”, with se-
parate reporting of assets held for sale and liabilities included
in disposal groups held for sale. Current assets, which inclu-
de cash and cash equivalents, are assets that are intended to
be realized, sold or consumed during the normal operating
cycle of the Group or in the 12 months following the balance-
sheet date; current liabilities are liabilities that are expected
to be settled during the normal operating cycle of the Group
or within the 12 months following the close of the financial
year.
The consolidated income statement is classified on the basis
of the nature of costs, with separate reporting of net income/
(loss) from continuing operations and net income/(loss) from
discontinued operations attributable to shareholders of the
Parent Company and to non-controlling interests.
The indirect method is used for the consolidated statement
of cash flows, with separate reporting of any cash flows by
operating, investing and financing activities associated with
discontinued operations.
The income statement, the balance sheet and the statement
of cash flows report transactions with related parties, the de-
finition of which is given in the next section below.
The consolidated financial statements have been prepared
on a going concern basis using the cost method, with the
exception of items measured at fair value in accordance with
IFRS-EU, as explained in the measurement bases applied to
each individual item, and of non-current assets and disposal
groups classified as held for sale, which are measured at the
lower of their carrying amount and fair value less costs to sell.
143
The consolidated financial statements are presented in euro,
judgments could have a substantial impact on future re-
the functional currency of the Parent Company Enel SpA. All
sults.
figures are shown in millions of euro unless stated otherwise.
The consolidated financial statements provide comparative
Use of estimates
information in respect of the previous period.
In addition, the Group has presented balance sheet figures
at January 1, 2013, owing to the retrospective application of
IFRS 11 and the amendments of IAS 32, as discussed in note 4
“Restatement of comparative disclosures”.
2
Accounting policies and
measurement criteria
Use of estimates and management
judgment
Revenue recognition
Revenue from sales to customers is recognized on an accruals
basis. Revenue from sales of electricity and gas to retail custo-
mers is recognized at the time the electricity or gas is supplied
and includes, in addition to amounts invoiced on the basis of
periodic meter readings (pertaining to the year), an estima-
te of the value of electricity and gas distributed during the
period but not yet invoiced, which is equal to the difference
between the amount of electricity and gas delivered to the
distribution network and that invoiced in the period, taking
account of any network losses. Revenue between the date of
the last meter reading and the end of the year is based on
estimates of the daily consumption of individual customers
calculated on the basis of their consumption record, adjusted
to take account of weather conditions and other factors that
may affect estimated consumption.
Preparing the consolidated financial statements under
Pension plans and other post-employment benefits
IFRS-EU requires management to take decisions and make
Some of the Group’s employees participate in pension plans
estimates and assumptions that may impact the value of
offering benefits based on their wage history and years of
revenues, costs, assets and liabilities and the related disclo-
service.
sures concerning the items involved as well as contingent
Certain employees are also eligible for other post-em-
assets and liabilities at the balance sheet date. The estima-
ployment benefit schemes.
tes and management’s judgments are based on previous
The expenses and liabilities of such plans are calculated on
experience and other factors considered reasonable in
the basis of estimates carried out by consulting actuaries,
the circumstances. They are formulated when the carrying
who use a combination of statistical and actuarial elements
amount of assets and liabilities is not easily determined
in their calculations, including statistical data on past years
from other sources. The actual results may therefore dif-
and forecasts of future costs.
fer from these estimates. The estimates and assumptions
Other components of the estimation that are considered in-
are periodically revised and the effects of any changes are
clude mortality and withdrawal rates as well as assumptions
reflected through profit or loss if they only involve that pe-
concerning future developments in discount rates, the rate
riod. If the revision involves both the current and future pe-
of wage increases, the inflation rate and trends in the cost
riods, the change is recognized in the period in which the
of medical care.
revision is made and in the related future periods.
These estimates can differ significantly from actual deve-
In order to enhance understanding of the financial state-
lopments owing to changes in economic and market con-
ments, the following sections examine the main items af-
ditions, increases or decreases in withdrawal rates and the
fected by the use of estimates and the cases that reflect
lifespan of participants, as well as changes in the effective
management judgments to a significant degree, undersco-
cost of medical care.
ring the main assumptions used by managers in measuring
Such differences can have a substantial impact on the quan-
these items in compliance with the IFRS-EU. The critical
tification of pension costs and other related expenses.
element of such valuations is the use of assumptions and
professional judgments concerning issues that are by their
Recoverability of non-current assets
very nature uncertain.
The carrying amount of non-current assets is reviewed pe-
Changes in the conditions underlying the assumptions and
riodically and wherever circumstances or events suggest
144
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS that a review is necessary. Goodwill is reviewed at least an-
charge (Article 25 of Royal Decree 1775 of December 11,
nually. Such assessments of the recoverable amount of as-
1933), the revalued cost less government capital grants,
sets are carried out in accordance with the provisions of IAS
also revalued, received by the concession holder for the
36, as described in greater detail in note 18 below.
construction of such works, depreciated for ordinary
In particular, the recoverable amount of non-current assets
wear and tear;
and goodwill is based on estimates and assumptions used
> for other property, plant and equipment, the market va-
in order to determine the amount of cash flow and the di-
lue, meaning replacement value, reduced by estimated
scount rates applied. Where the value of a group of non-
depreciation for ordinary wear and tear.
current assets is considered to be impaired, it is written
While acknowledging that the new regulations introduce
down to its recoverable value, as estimated on the basis
important changes as to the transfer of ownership of the bu-
of the use of the assets and their possible future disposal,
siness unit with regard to the operation of the hydroelectric
in accordance with the Company’s most recent approved
concession, the practical application of these principles faces
plan.
difficulties, given the uncertainties that do not permit the for-
The estimation of the factors used in the calculation of the
mulation of a reliable estimate of the value that can be reco-
recoverable amount is discussed in more detail in the section
vered at the end of existing concessions (residual value).
“Impairment of non-financial assets”. Nevertheless, possible
Accordingly, management has decided to not attempt to for-
changes in the estimation factors on which the calculation
mulate an estimate of residual value.
of such values is performed could generate different reco-
The fact that the legislation requires the new concession hol-
verable values. The analysis of each group of non-current
der to make a payment to the departing concession holder
assets is unique and requires management to use estimates
prompted management to review the depreciation schedu-
and assumptions considered prudent and reasonable in the
les for assets classified as to be relinquished free of charge
specific circumstances.
prior to Law 134/2012 (until the year ended on December
31, 2011, given that the assets were to be relinquished free
Depreciable value of certain elements of Italian hydroe-
of charge, the depreciation period was equal to the closest
lectric plants subsequent to enactment of Law 134/2012
date between the term of the concession and the end of the
Law 134 of August 7, 2012 containing “urgent measures for
useful life of the individual asset), calculating depreciation no
growth” (published in the Gazzetta Ufficiale of August 11,
longer over the term of the concession but, if longer, over the
2012), introduced a sweeping overhaul of the rules gover-
economic and technical life of the individual assets. If additio-
ning hydroelectric concessions. Among its various provisions,
nal information becomes available to enable the calculation
the law establishes that five years before the expiration of
of residual value, the carrying amounts of the assets involved
a major hydroelectric water diversion concession and in ca-
will be adjusted prospectively.
ses of lapse, relinquishment or revocation, where there is
no prevailing public interest for a different use of the water,
Determining the fair value of financial instruments
incompatible with its use for hydroelectric generation, the
The fair value of financial instruments is determined on the
competent public entity shall organize a public call for tender
basis of prices directly observable in the market, where avai-
for the award for consideration of the concession for a period
lable, or, for unlisted financial instruments, using specific
ranging from 20 to a maximum of 30 years.
valuation techniques (mainly based on present value) that
In order to ensure operational continuity, the law also go-
maximize the use of observable market inputs. In rare cir-
verns the methods of transfer ownership of the business unit
cumstances where this is not possible, the inputs are esti-
necessary to operate the concession, including all legal rela-
mated by management taking due account of the characte-
tionships relating to the concession, from the outgoing con-
ristics of the instruments being measured.
cession holder to the new concession holder, in exchange for
In accordance with IFRS 13, the Group includes a mea-
payment of a price to be determined in negotiations betwe-
surement of credit risk, both of the counterparty (Credit
en the departing concession holder and the grantor agency,
Valuation Adjustment or CVA) and its own (Debit Valua-
taking due account of the following elements:
tion Adjustment or DVA), in order to adjust the fair value
> for intake and governing works, penstocks and outflow
of financial instruments for the corresponding amount of
channels, which under the consolidated law governing
counterparty risk, using the method discussed in note 45.
waters and electrical plants are to be relinquished free of
Changes in the assumptions made in estimating the input
145
data could have an impact on the fair value recognized for
the technology existing at the measurement date and is
those instruments.
reviewed each year, taking account of developments in de-
commissioning and site restoration technology, as well as
Recovery of deferred tax assets
the ongoing evolution of the legislative framework gover-
At December 31, 2014, the consolidated financial statements
ning health and environmental protection.
report deferred tax assets in respect of tax losses to be rever-
Subsequently, the value of the obligation is adjusted to re-
sed in subsequent years and income components whose de-
flect the passage of time and any changes in estimates.
ductibility is deferred in an amount whose recovery is consi-
dered by management to be highly probable.
Other
The recoverability of such assets is subject to the achievement
In addition to the items listed above, the use of estimates
of future profits sufficient to absorb such tax losses and to use
regarded share-based payment plans and the fair value
the benefits of the other deferred tax assets.
measurement of assets acquired and liabilities assumed in
Significant management judgement is required to determi-
business combinations. For these items, the estimates and
ne the amount of deferred tax assets that can be recognized,
assumptions are discussed in the notes on the accounting
based upon the likely timing and the level of future taxable
policies adopted.
profits together with future tax planning strategies. However,
where the Group should become aware that it is unable to
Management judgments
recover all or part of recognized tax assets in future years, the
consequent adjustment would be taken to the income state-
ment in the year in which this circumstance arises.
Litigation
The Enel Group is involved in various legal disputes regar-
ding the generation, transport and distribution of electrici-
ty. In view of the nature of such litigation, it is not always
objectively possible to predict the outcome of such disputes,
which in some cases could be unfavorable.
Provisions have been recognized to cover all significant lia-
bilities for cases in which legal counsel feels an adverse out-
come is likely and a reasonable estimate of the amount of
the loss can be made.
Decommissioning and site restoration
In calculating liabilities in respect of decommissioning and
site restoration costs, especially for the decommissioning
of nuclear power plants and the storage of waste fuel and
other radioactive materials, the estimation of the future cost
is a critical process, given that the costs will be incurred over
a very long span of time, estimated at up to 100 years.
The obligation, based on financial and engineering as-
sumptions, is calculated by discounting the expected future
cash flows that the Group considers it will have to pay for
the decommissioning operation.
The discount rate used to determine the present value of
the liability is the pre-tax risk-free rate and is based on the
economic parameters of the country in which the plant is
located.
That liability is quantified by management on the basis of
Identification of cash generating units (CGUs)
In application of IAS 36 “Impairment of assets”, the goodwill
recognized in the consolidated financial statements of the
Group as a result of business combinations has been allo-
cated to individual or groups of CGUs that will benefit from
the combination. A CGU is the smallest group of assets that
generates largely independent cash inflows.
In identifying such CGUs, management took account of the
specific nature of its assets and the business in which it is
involved (geographical area, business area, regulatory fra-
mework, etc.), verifying that the cash flows of a given group
of assets were closely independent and largely autonomous
of those associated with other assets (or groups of assets).
The assets of each CGU were also identified on the basis of
the manner in which management manages and monitors
those assets within the business model adopted, which until
December 31, 2014, was consistent with the organizational
model adopted in 2012, as discussed in the report on ope-
rations.
In particular, the CGUs identified in the Iberia and Latin
America Division are represented by groups of electricity/
gas production, distribution and sales assets in the Iberian
peninsula and certain countries in Latin America that are
managed on a unified basis by the Group, including in fi-
nancial matters. The CGUs identified in the Generation and
Energy Management Division and the Sales Division are
represented by assets resulting from business combina-
tions involving gas regasification operations in Italy and the
domestic retail gas market or by uniform groups of assets
operating in the sale or generation of electricity. The CGUs
identified in the Renewable Energy Division are represented
146
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS (with a number of minor exceptions made in Italy and Spain
the then-applicable IAS 27, the Group consolidated certain
to reflect the Group organizational model) by the group of
companies (Emgesa and Codensa) on a line-by-line basis even
assets exclusively associated with the generation of electri-
though it did not hold more than half of the voting rights. That
city from renewable energy resources located in geographi-
approach was maintained in the assessment carried out in ap-
cal areas considered uniform on the basis of regulatory and
plication of IFRS 10 on the basis of the requirements discussed
contractual aspects and characterized by a high degree of
above, as detailed in the attachment “Subsidiaries, associates
interdependence of business processes and substantial inte-
and other significant equity investments of the Enel Group at
gration in the same geographical area. The CGUs identified
December 31, 2014” to these financial statements.
in the International Division are represented by electricity
The Group re-assesses whether or not it controls an investee
generation and distribution/sales assets identified with bu-
if facts and circumstances indicate that there are changes
siness combinations and which constitute, by geographical
to one or more of the elements considered in verifying the
area and business, individual units generating independent
existence of control.
cash flows. The CGUs identified by management to which
the goodwill recognized in these consolidated financial sta-
Determination of the existence of joint control and of
tements has been allocated are indicated in the section on
the type of joint arrangement
intangible assets, to which the reader is invited to refer.
Under the provisions of the new IFRS 11, which the Group
The number and scope of the CGUs are updated systema-
has adopted as from January 1, 2014, with retrospective ap-
tically to reflect the impact of new business combinations
plication as from January 1, 2013, a joint arrangement is an
and reorganizations carried out by the Group, and to take
agreement where two, or more parties, have joint control.
account of external factors that could impact the ability of
Joint control exists when the decisions over the relevant ac-
groups of assets to generate independent cash flows.
tivities require the unanimous consent of at least two par-
ties of a joint arrangement.
Determination of the existence of control
A joint arrangement can be configured as a joint venture
Under the provisions of IFRS 10, which the Group has adop-
or a joint operation. Joint ventures are joint arrangements
ted since January 1, 2014, with retrospective application as
whereby the parties that have joint control have rights to
from January 1, 2013, control is achieved when the Group is
the net assets of the arrangement. Conversely, joint opera-
exposed, or has rights, to variable returns from its involve-
tions are joint arrangements whereby the parties that have
ment with the investee and has the ability to affect those re-
joint control have rights to the assets and obligations for the
turns through its power over the investee. Power is defined
liabilities relating to the arrangement.
as the current ability to direct the relevant activities of the
In order to determine the existence of the joint control and
investee based on existing substantive rights.
the type of joint arrangement, management must apply
The existence of control does not depend solely on owner-
judgment and assess its rights and obligations arising from
ship of a majority shareholding, but rather it arises from
the arrangement. For this purpose, the management consi-
substantive rights that each investor holds over the inve-
ders the structure and legal form of the arrangement, the
stee. Consequently, management must use its judgment in
terms agreed by the parties in the contractual arrangement
assessing whether specific situations determine substantive
and, when relevant, other facts and circumstances.
rights that give the Group the power to direct the relevant
Following that analysis, on first-time application, the Group
activities of the investee in order to affect its returns.
has considered its interests in SF Energy and Asociación Nu-
For the purpose of assessing control, management analyses
clear Ascó-Vandellós II as joint arrangements. Subsequen-
all facts and circumstances including any agreements with
tly, as from January 1, 2014 and following changes in the
other investors, rights arising from other contractual arran-
shareholders’ agreements between the partners, which
gements and potential voting rights (call options, warrants,
gave rise to a change in the governance arrangements of
put options granted to non-controlling shareholders, etc.).
SE Hydropower, producing a situation of joint control, the
These other facts and circumstances could be especially si-
latter investee has also been treated as a joint arrangement.
gnificant in such assessment when the Group holds less than
For the sake of completeness, we report that all other com-
a majority of voting rights, or similar rights, in the investee.
panies classified as under joint control in accordance with
Following such analysis of the existence of control, which had
the earlier IAS 31 have been reclassified as joint ventures
already been done in previous years under the provisions of
under IFRS 11.
147
The Group re-assesses whether or not it has joint control if
ling entity as Enel SpA, companies that directly or indirectly
facts and circumstances indicate that changes have occurred
through one or more intermediaries control, are controlled or
in one or more of the elements considered in verifying the exi-
are subject to the joint control of Enel SpA and in which the
stence of joint control and the type of the joint arrangement.
latter has a holding that enables it to exercise a significant
influence. Related parties also include entities that operate
Determination of the existence of significant influence
post-employment benefit plans for employees of Enel SpA or
over an associate
its associates (specifically, the FOPEN and FONDENEL pension
Associated companies are those in which the Group exerci-
funds), as well as the members of the Boards of Auditors, and
ses significant influence, i.e. the power to participate in the
their immediate family, and the key management personnel,
financial and operating policy decisions of the investee but
and their immediate family, of Enel SpA and its subsidiaries.
not exercise control or joint control over those policies. In
Key management personnel comprises management person-
general, it is presumed that the Group has a significant in-
nel who have the power and direct or indirect responsibility
fluence when it has an ownership interest of 20% or more.
for the planning, management and control of the activities of
In order to determine the existence of significant influence,
the company. They include directors.
management must apply judgment and consider all facts
and circumstances.
The Group re-assesses whether or not it has significant in-
Subsidiaries
fluence if facts and circumstances indicate that there are
Subsidiaries are all entities over which the Group has con-
changes to one or more of the elements considered in ve-
trol. The Group controls an entity when it is exposed/has
rifying the existence of significant influence.
rights to variable returns deriving from its involvement and
has the ability, through the exercise of its power over the
Application of IFRIC 12 “Service concession arrange-
investee, to affect its returns. Power is defined as when the
ments” to concessions
investor has existing rights that give it the current ability to
IFRIC 12 “Service concession arrangements” applies to “pu-
direct the relevant activities.
blic-to-private” service concession arrangements, which can
The figures of the subsidiaries are consolidated on a full line-
be defined as contracts under which the grantor transfers
by-line basis as from the date control is acquired until such
to a concession holder the right to deliver public services
control ceases.
that give access to the main public facilities for a specified
period of time in return for managing the infrastructure
used to deliver those public services.
Consolidation procedures
More specifically, IFRIC 12 applies to public-to-private servi-
The financial statements of subsidiaries used to prepare the
ce concession arrangements if the grantor:
consolidated financial statements were prepared at Decem-
> controls or regulates what services the operator must
ber 31, 2014 in accordance with the accounting policies
provide with the infrastructure, to whom it must provide
adopted by the Parent Company.
them, and at what price; and
If a subsidiary uses different accounting policies from those
> controls – through ownership or otherwise – any signifi-
adopted in preparing the consolidated financial statements
cant residual interest in the infrastructure at the end of
for similar transactions and facts in similar circumstances,
the term of the arrangement.
appropriate adjustments are made to ensure conformity
In assessing the applicability of these provisions for the Group,
with Group accounting policies.
management carefully analyzed existing concessions.
Assets, liabilities, revenue and expenses of a subsidiary ac-
On the basis of that analysis, the provisions of IFRIC 12
quired or disposed of during the year are included in the
are applicable to some of the infrastructure of a number
consolidated financial statements, respectively, from the
of companies in the Iberia and Latin America Division that
date the Group gains control or until the date the Group ce-
operate in Brazil (Ampla and Coelce).
ases to control the subsidiary.
Related parties
Profit or loss and the other components of other com-
prehensive income are attributed to the owners of the Pa-
rent and non-controlling interests, even if this results in a
Related parties are mainly parties that have the same control-
loss for non-controlling interests.
148
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS All intercompany assets and liabilities, equity, income, ex-
Group and the associates or joint ventures are eliminated to
penses and cash flows relating to transactions between en-
the extent of the interest in the associate or joint venture.
tities of the Group are eliminated in full.
The financial statements of the associates or joint ventures
Changes in ownership interest in subsidiaries that do not
are prepared for the same reporting period as the Group.
result in loss of control are accounted for as equity tran-
When necessary, adjustments are made to bring the ac-
sactions, with the carrying amounts of the controlling and
counting policies in line with those of the Group.
non-controlling interests adjusted to reflect changes in their
After application of the equity method, the Group determi-
interests in the subsidiary. Any difference between the fair
nes whether it is necessary to recognize an impairment loss
value of the consideration paid or received and the corre-
on its investment in an associate or joint venture. If there is
sponding fraction of equity acquired or sold is recognized in
such evidence, the Group calculates the amount of impai-
consolidated equity.
rment as the difference between the recoverable amount of
When the Group ceases to have control over a subsidiary,
the associate or joint venture and its carrying amount.
any interest retained in the entity is remeasured to its fair
If the investment ceases to be an associate or a joint venture,
value, recognized through profit or loss, at the date when
the Group recognizes any retained investment at its fair va-
control is lost. In addition, any amounts previously recogni-
lue, through profit or loss. Any amounts previously recogni-
zed in other comprehensive income in respect of the former
zed in other comprehensive income in respect of the former
subsidiary are accounted for as if the Group had directly di-
associate or joint venture are accounted for as if the Group
sposed of the related assets or liabilities.
had directly disposed of the related assets or liabilities.
Investments in joint arrangements
and associates
If the Group’s ownership interest in an associate or a joint
venture is reduced, but the Group continues to exercise a
significant influence or joint control, the Group continues to
apply the equity method and the share of the gain or loss
A joint venture is an entity over which the Group exercises
that had previously been recognized in other comprehen-
joint control and has rights to the net assets of the arrange-
sive income relating to that reduction is accounted for as
ment. Joint control is the sharing of control of an arrange-
if the Group had directly disposed of the related assets or
ment, whereby decisions about the relevant activities requi-
liabilities.
re unanimous consent of the parties sharing control.
When a portion of an investment in an associate or joint
An associate is an entity over which the Group has signifi-
venture meets the criteria to be classified as held for sale,
cant influence. Significant influence is the power to parti-
any retained portion of an investment in the associate or
cipate in the financial and operating policy decisions of the
joint venture that has not been classified as held for sale is
investee without having control or joint control over the
accounted for using the equity method until disposal of the
investee.
portion classified as held for sale takes place.
The Group’s investments in its joint ventures and associates
Joint operations are joint arrangements whereby the parties
are accounted for using the equity method.
that have joint control have rights to the assets and obliga-
Under the equity method, these investments are initially
tions for the liabilities relating to the arrangement. For each
recognized at cost and any goodwill arising from the diffe-
joint operation, the Group recognized assets, liabilities,
rence between the cost of the investment and the Group’s
costs and revenue on the basis of the provisions of the ar-
share of the net fair value of the investee’s identifiable as-
rangement rather than the participating interest held.
sets and liabilities at the acquisition date is included in the
carrying amount of the investment. Goodwill is not indivi-
dually tested for impairment.
Translation of foreign currency items
After the acquisition date, their carrying amount is adjusted
Transactions in currencies other than the functional cur-
to recognize changes in the Group’s share of profit or loss of
rency are recognized in these financial statements at the
the associate or joint venture. The OCI of such investees is
exchange rate prevailing on the date of the transaction.
presented as specific items of the Group’s OCI.
Monetary assets and liabilities denominated in a foreign
Distributions received from joint venture and associates re-
currency other than the functional currency are later adju-
duce the carrying amount of the investments.
sted using the balance sheet exchange rate. Non-monetary
Profits and losses resulting from transactions between the
assets and liabilities in foreign currency stated at cost are
149
translated using the exchange rate prevailing on the date
in the net assets. In the case of business combinations achie-
of initial recognition of the transaction. Non-monetary as-
ved in stages, at the date of acquisition any adjustment to
sets and liabilities in foreign currency stated at fair value are
the fair value of the net assets acquired previously was reco-
translated using the exchange rate prevailing on the date
gnized in equity; the amount of goodwill was determined
that value was determined. Any exchange rate differences
for each transaction separately based on the fair values of
are recognized through profit or loss.
the acquiree’s net assets at the date of each exchange tran-
Translation of financial statements
denominated in a foreign currency
saction.
Business combinations carried out as from January 1, 2010
are recognized on the basis of IFRS 3 (2008), which is refer-
red to as IFRS 3 (Revised) hereafter.
For the purposes of the consolidated financial statements,
More specifically, business combinations are recognized
all profits/losses, assets and liabilities are stated in euro,
using the acquisition method, where the purchase cost (the
which is the functional currency of the Parent Company,
consideration transferred) is equal to the fair value at the
Enel SpA.
purchase date of the assets acquired and the liabilities in-
In order to prepare the consolidated financial statements,
curred or assumed, as well as any equity instruments issued
the financial statements of consolidated companies in fun-
by the purchaser. The consideration transferred includes the
ctional currencies other than the presentation currency
fair value of any asset or liability resulting from a contingent
used in the consolidated financial statements are translated
consideration arrangement.
into euro by applying the relevant period-end exchange
Costs directly attributable to the acquisition are recognized
rate to the assets and liabilities, including goodwill and con-
through profit or loss.
solidation adjustments, and the average exchange rate for
This cost is allocated by recognizing the assets, liabilities and
the period, which approximates the exchange rates prevai-
identifiable contingent liabilities of the acquired company
ling at the date of the respective transactions, to the income
at their fair values as at the acquisition date. Any positive
statement items.
difference between the price paid, measured at fair value as
Any resulting exchange rate gains or losses are recognized
at the acquisition date, plus the value of any non-controlling
as a separate component of equity in a special reserve. The
interests, and the net value of the identifiable assets and lia-
gains and losses are recognized proportionately in the inco-
bilities of the acquiree measured at fair value is recognized
me statement on the disposal (partial or total) of the subsi-
as goodwill. Any negative difference is recognized in profit
diary.
or loss.
Business combinations
The value of non-controlling interests is determined either
in proportion to the interest held by minority shareholders
in the net identifiable assets of the acquiree or at their fair
Business combinations initiated before January 1, 2010 and
value as at the acquisition date.
completed within that financial year are recognized on the
In the case of business combinations achieved in stages, at
basis of IFRS 3 (2004).
the date of acquisition of control the previously held equity
Such business combinations were recognized using the
interest in the acquiree is remeasured to fair value and any
purchase method, where the purchase cost is equal to the
positive or negative difference is recognized in profit or loss.
fair value at the date of the exchange of the assets acquired
Any contingent consideration is recognized at fair value at
and the liabilities incurred or assumed, plus costs directly at-
the acquisition date. Subsequent changes to the fair value
tributable to the acquisition. This cost was allocated by re-
of the contingent consideration classified as an asset or a
cognizing the assets, liabilities and identifiable contingent
liability that is a financial instrument within the scope of IAS
liabilities of the acquired company at their fair values. Any
39 are recognized either in profit or loss or in other com-
positive difference between the cost of the acquisition and
prehensive income. If the contingent consideration is not
the fair value of the net assets acquired pertaining to the
within the scope of IAS 39, it is measured in accordance with
shareholders of the Parent Company was recognized as go-
the appropriate IFRS-EU. Contingent consideration that is
odwill. Any negative difference was recognized in profit or
classified as equity is not re-measured, and its subsequent
loss. The value of non-controlling interests was determined
settlement is accounted for within equity.
in proportion to the interest held by minority shareholders
If the fair values of the assets, liabilities and contingent lia-
150
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS bilities can only be calculated on a provisional basis, the bu-
circumstances and for which sufficient data are available,
siness combination is recognized using such provisional va-
maximizing the use of relevant observable inputs and mini-
lues. Any adjustments resulting from the completion of the
mizing the use of unobservable inputs.
measurement process are recognized within twelve months
of the date of acquisition, restating comparative figures.
Fair value measurement
Property, plant and equipment
Property, plant and equipment is stated at cost, net of accu-
mulated depreciation and accumulated impairment losses,
For all fair value measurements and disclosures of fair va-
if any. Such cost includes expenses directly attributable to
lue, that are either required or permitted by international
bringing the asset to the location and condition necessary
accounting standards, the Group applies IFRS 13.
for its intended use.
Fair value is defined as the price that would be received to
The cost is also increased by the present value of the esti-
sell an asset or paid to transfer a liability, in an orderly tran-
mate of the costs of decommissioning and restoring the
saction, between market participants, at the measurement
site on which the asset is located where there is a legal or
date (i.e. an exit price).
constructive obligation to do so. The corresponding liabili-
The fair value measurement assumes that the transaction to
ty is recognized under provisions for risks and charges. The
sell an asset or transfer a liability takes place in the principal
accounting treatment of changes in the estimate of these
market, i.e. the market with the greatest volume and level of
costs, the passage of time and the discount rate is discussed
activity for the asset or liability. In the absence of a principal
under “Provisions for risks and charges”.
market, it is assumed that the transaction takes place in the
Property, plant and equipment transferred from customers
most advantageous market to which the Group has access,
to connect them to the electricity distribution network and/
i.e. the market that maximizes the amount that would be re-
or to provide them with ongoing access to a supply of elec-
ceived to sell the asset or minimizes the amount that would
tricity is initially recognized at its fair value at the time of the
be paid to transfer the liability.
transfer.
The fair value of an asset or a liability is measured using the
Borrowing costs that are directly attributable to the acqui-
assumptions that market participants would use when pri-
sition, construction or production of a qualifying asset, i.e.
cing the asset or liability, assuming that market participants
an asset that takes a substantial period of time to get ready
act in their economic best interest. Market participants are
for its intended use or sale, are capitalized as part of the cost
independent, knowledgeable sellers and buyers who are
of the assets themselves. Borrowing costs associated with
able to enter into a transaction for the asset or the liability
the purchase/construction of assets that do not meet such
and who are motivated but not forced or otherwise com-
requirement are expensed in the period in which they are
pelled to do so.
incurred.
When measuring fair value, the Group takes into account
Certain assets that were revalued at the IFRS-EU transition
the characteristics of the asset or liability, in particular:
date or in previous periods are recognized at their fair value,
> for a non-financial asset, a fair value measurement takes
which is considered to be their deemed cost at the revalua-
into account a market participant’s ability to generate
tion date.
economic benefits by using the asset in its highest and
Where individual items of major components of property,
best use or by selling it to another market participant that
plant and equipment have different useful lives, the compo-
would use the asset in its highest and best use;
nents are recognized and depreciated separately.
> for liabilities and own equity instruments, the fair value
Subsequent costs are recognized as an increase in the
reflects the effect of non-performance risk, i.e. the risk
carrying amount of the asset when it is probable that futu-
that an entity will not fulfill an obligation;
re economic benefits associated with the cost incurred to
> in the case of groups of financial assets and financial liabi-
replace a part of the asset will flow to the Group and the
lities with offsetting positions in market risk or credit risk,
cost of the item can be measured reliably. All other costs are
managed on the basis of an entity’s net exposure to such
recognized in profit or loss as incurred.
risks, it is permitted to measure fair value on a net basis.
The cost of replacing part or all of an asset is recognized as
In measuring the fair value of assets and liabilities, the
an increase in the carrying amount of the asset and is de-
Group uses valuation techniques that are appropriate in the
preciated over its useful life; the net carrying amount of the
151
replaced unit is derecognized through profit or loss.
Land is not depreciated as it has an undetermined useful
Property, plant and equipment, net of its residual value, is
life.
depreciated on a straight-line basis over its estimated useful
Assets recognized under property, plant and equipment are
life, which is reviewed annually and, if appropriate, adjusted
derecognized either at the time of their disposal or when
prospectively. Depreciation begins when the asset is availa-
no future economic benefit is expected from their use or di-
ble for use.
sposal. Any gain or loss, recognized through profit or loss, is
The estimated useful life of the main items of property,
calculated as the difference between the net consideration
plant and equipment is as follows
received in the disposal, where present, and the net carrying
Civil buildings
20-70 years
Buildings and civil works incorporated in plants
20-85 years
amount of the derecognized assets.
Assets to be relinquished free of charge
The Group’s plants include assets to be relinquished free of
charge at the end of the concessions. These mainly regard
major water diversion works and the public lands used for
the operation of the thermal power plants. For plants in
Italy, the concessions terminate in 2020 and 2040 (respecti-
vely, for plants located in the Autonomous Province of Tren-
to and in the Autonomous Province of Bolzano) and 2029
(for all others). Within the regulatory framework in force un-
til 2011, if the concessions are not renewed, at those dates
all intake and governing works, penstocks, outflow chan-
nels and other assets on public lands were to be relinqui-
shed free of charge to the government in good operating
condition. Accordingly, depreciation on assets to be relin-
quished was calculated over the shorter of the term of the
concession and the remaining useful life of the assets.
20-75 years
24-40 years
25-100 years
19-46 years
10-40 years
10-45 years
10-66 years
60 years
10-20 years
20-30 years
10-25 years
20-22 years
Hydroelectric power plants:
- penstock
- mechanical and electrical machinery
- other fixed hydraulic works
Thermal power plants:
- boilers and auxiliary components
- gas turbine components
- mechanical and electrical machinery
- other fixed hydraulic works
Nuclear power plants
Geothermal power plants:
- cooling towers
- turbines and generators
- turbine parts in contact with fluid
- mechanical and electrical machinery
Wind power plants:
- towers
- turbines and generators
20-25 years
In the wake of the legislative changes introduced with Law
20-25 years
134 of August 7, 2012, the assets previously classified as as-
- mechanical and electrical machinery
15-25 years
sets “to be relinquished free of charge” connected with the
Solar power plants:
- mechanical and electrical machinery
15-40 years
Public and artistic lighting:
- public lighting installations
- artistic lighting installations
Transmission lines
Transformer stations
Distribution plant:
- high-voltage lines
- primary transformer stations
- low- and medium-voltage lines
Meters:
- electromechanical meters
- electricity balance measurement equipment
- electronic meters
18-25 years
20-25 years
20-50 years
10-60 years
30-50 years
10-60 years
23-50 years
2-27 years
2-35 years
10-20 years
The useful life of leasehold improvements is determined
on the basis of the term of the lease or, if shorter, on the
duration of the benefits produced by the improvements
themselves.
152
hydroelectric water diversion concessions are now considered
in the same manner as other categories of “property, plant
and equipment” and are therefore depreciated over the eco-
nomic and technical life of the asset (where this exceeds the
term of the concession), as discussed in the section above on
the “Depreciable value of certain elements of Italian hydroe-
lectric plants subsequent to enactement of Law 134/2012”,
which you are invited to consult for more details.
In accordance with Spanish Laws 29/1985 and 46/1999,
hydroelectric power stations in Spanish territory operate un-
der administrative concessions at the end of which the plants
will be returned to the government in good operating condi-
tion. The terms of the concessions extend up to 2067.
A number of generation companies that operate in Argen-
tina, Brazil and Mexico hold administrative concessions with
similar conditions to those applied under the Spanish con-
cession system. These concessions will expire in the period
between 2013 and 2088.
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS As regards the distribution of electricity, the Group is a con-
ceived from the users of the public service and specified
cession holder in Italy for this service. The concession, gran-
or determinable amounts (defined by the contract), and
ted by the Ministry for Economic Development, was issued
such payments are not dependent on the usage of the
free of charge and terminates on December 31, 2030. If the
infrastructure; and/or
concession is not renewed upon expiry, the grantor is requi-
> an intangible asset, if the operator receives the right (a
red to pay an indemnity. The amount of the indemnity will
license) to charge users of the public service provided. In
be determined by agreement of the parties using appro-
such a case, the operator does not have an unconditional
priate valuation methods, based on both the balance sheet
right to receive cash because the amounts are contingent
value of the assets themselves and their profitability.
on the extent that the public uses the service.
In determining the indemnity, such profitability will be re-
If the Group (as operator) has a contractual right to receive
presented by the present value of future cash flows. The in-
an intangible asset (the right to charge users of the public
frastructure serving the concessions is owned and available
service), borrowing costs are capitalized using the criteria
to the concession holder. It is recognized under “Property,
specified in the section “Property, plant and equipment”.
plant and equipment” and is depreciated over the useful li-
During the operating phase of concession arrangements,
ves of the assets.
the Group accounts for operating service payments in ac-
The Enel Group also operates under administrative con-
cordance with criteria specified in the section “Revenue”.
cessions for the distribution of electricity in other countries
(including Spain and Romania). These concessions give the
right to build and operate distribution networks for an inde-
Leases
finite period of time.
The Group holds property, plant and equipment and intangi-
Infrastructure within the scope
of IFRIC 12 “Service concession
arrangements”
ble assets for its various activities under lease contracts.
These contracts are analyzed on the basis of the circumstan-
ces and indicators set out in IAS 17 in order to determine
whether they constitute operating leases or finance leases.
A finance lease is defined as a lease that transfers substan-
Under a “public-to-private” service concession arrangement
tially all the risks and rewards incidental to ownership of
within the scope of IFRIC 12 “Service concession arrange-
the related asset to the lessee. All leases that do not meet
ments”, the operator acts as a service provider and, in accor-
the definition of a finance lease are classified as operating
dance with the terms specified in the contract, it constructs/
leases.
upgrades infrastructure used to provide a public service and
On initial recognition assets held under finance leases are re-
operates and maintains that infrastructure for the period of
cognized as property, plant and equipment and the related
the concession.
liability is recognized under long-term borrowings. At incep-
The Group, as operator, does not recognize the infrastruc-
tion date finance leases are recognized at the lower of the
ture within the scope of IFRIC 12 as property, plant and
fair value of the leased asset and the present value of the mi-
equipment and it accounts for revenue and costs relating
nimum lease payments due, including the payment required
to construction/upgrade services as discussed in the section
to exercise any purchase option.
“Construction contracts”. In particular, the Group measures
The assets are depreciated on the basis of their useful lives.
the consideration received or receivable for the construc-
If it is not reasonably certain that the Group will acquire the
tion/upgrading of infrastructure at its fair value and, depen-
assets at the end of the lease, they are depreciated over the
ding on the characteristics of the service concession arran-
shorter of the lease term and the useful life of the assets.
gement, it recognizes:
Payment made under operating lease are recognized as a
> a financial asset, if the operator has an unconditional
cost on a straight-line basis over the lease term.
contractual right to receive cash or another financial as-
Although not formally designated as lease agreements, cer-
set from the grantor (or from a third party at the direc-
tain types of contract can be considered as such if the fulfil-
tion of the grantor) and the grantor has little discretion
ment of the arrangement is dependent on the use of a speci-
to avoid payment. In this case, the grantor contractually
fic asset (or assets) and if the arrangement conveys a right to
guarantees to pay to the operator specified or determi-
use such assets.
nable amounts or the shortfall between the amounts re-
153
Investment property
Investment property consists of the Group’s real estate held
to earn rentals and/or for capital appreciation rather than
for use in the production or supply of goods and services.
Investment property is measured at acquisition cost less
any accumulated depreciation and any accumulated impai-
rment losses.
Investment property, excluding land, is depreciated on a
straight-line basis over the useful lives of the assets.
Impairment losses are determined on the basis of criteria
discussed below.
The breakdown of the fair value of investment property
is detailed in note 45 “Assets measured at fair value”. In-
vestment property is derecognized either at the time of its
disposal or when no future economic benefit is expected
from its use or disposal. Any gain or loss, recognized throu-
gh profit or loss, is calculated as the difference between the
net consideration received in the disposal, where present,
and the net book value of the derecognized assets.
Intangible assets
Intangible assets are identifiable assets without physical
substance controlled by the entity and capable of genera-
ting future economic benefits. They are measured at pur-
chase or internal development cost when it is probable that
Intangible assets with indefinite useful lives are not amorti-
zed, but are tested for impairment annually. The assessment
of indefinite life is reviewed annually to determine whether
the indefinite life continues to be supportable. If not, the
change in useful life from indefinite to finite is accounted for
as a change in accounting estimate.
Intangible assets are derecognized either at the time of
their disposal or when no future economic benefit is ex-
pected from their use or disposal. Any gain or loss, reco-
gnized through profit or loss, is calculated as the difference
between the net consideration received in the disposal,
where present, and the net book value of the derecognized
assets.
The estimated useful life of the main intangible assets, di-
stinguishing between internally generated and acquired
assets, is as follows:
Development costs:
- internally generated
- acquired
Industrial patents and intellectual property
rights:
- internally generated
- acquired
Concessions, licenses, trademarks and similar
rights:
- internally generated
- acquired
Other:
3-5 years
3-5 years
5 years
3-25 years
-
2-60 years
2-5 years
3-40 years
the use of such assets will generate future economic bene-
- internally generated
fits and the related cost can be reliably determined.
- acquired
The cost includes any directly attributable expenses neces-
sary to make the assets ready for their intended use.
Internal development costs are recognized as an intangi-
Goodwill
ble asset when both the Group is reasonably assured of the
Goodwill arises on the acquisition of subsidiaries and repre-
technical feasibility of completing the intangible asset and
sents the excess of the consideration transferred, as measu-
that the asset will generate future economic benefits and
red at fair value at the acquisition date, over the net fair va-
it has intention and ability to complete the asset and use
lue of the acquiree’s identifiable assets and liabilities. After
or sell it.
initial recognition, goodwill is not amortized, but is tested
Research costs are recognized as expenses.
for recoverability at least annually using the criteria discus-
Intangible assets with a finite useful life are reported net of
sed in the section “Impairment of non-financial assets”. For
accumulated amortization and any impairment losses.
the purpose of impairment testing, goodwill is allocated,
Amortization is calculated on a straight-line basis over the
from the acquisition date, to each of the identified cash ge-
item’s estimated useful life, which is reassessed at least an-
nerating units.
nually; any changes in amortization policies are reflected
Goodwill relating to equity investments in associates and
on a prospective basis. Amortization commences when the
joint ventures is included in their carrying amount.
asset is ready for use. Consequently, intangible assets not
yet available for use are not amortized, but are tested for
impairment at least annually.
Impairment of non-financial assets
Intangible assets have a definite useful life, with the excep-
At each reporting date, non-financial assets are reviewed to
tion of a number of concessions and goodwill.
determine whether there is evidence of impairment. If such
154
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS evidence exists, the recoverable amount of any involved as-
cash flows, they can be isolated from the rest of the assets
set is estimated. The recoverable amount is the higher of an
of the CGU, undergo separate analysis of their recoverability
asset’s fair value less costs of disposal and its value in use.
and impaired where necessary.
In order to determine the recoverable amount of property,
plant and equipment, intangible assets and goodwill, the
Group generally adopts the value-in-use criterion.
Inventories
The value in use is represented by the present value of the
Inventories are measured at the lower of cost and net rea-
estimated future cash flows generated by the asset in que-
lizable value except for inventories involved in trading ac-
stion. Value in use is determined by discounting estimated
tivities, which are measured at fair value with recognition
future cash flows using a pre-tax discount rate that reflects
through profit or loss.
the current market assessment of the time value of money
Cost is determined on the basis of average weighted cost,
and the specific risks of the asset.
which includes related ancillary charges. Net estimated rea-
The future cash flows used to determine value in use are ba-
lizable value is the estimated normal selling price net of esti-
sed on the most recent business plan, approved by the ma-
mated costs to sell or, where applicable, replacement cost.
nagement, containing forecasts for volumes, revenue, opera-
For the portion of inventories held to discharge sales that
ting costs and investments.
have already been made, the net realizable value is determi-
These projections cover the next five years. Consequently,
ned on the basis of the amount established in the contract
cash flows related to subsequent periods are determined on
of sale.
the basis of a long-term growth rate that does not exceed
Inventories include environmental certificates (green cer-
the average long-term growth rate for the particular sector
and country.
tificates, energy efficiency certificates and CO2 emissions
allowances) that were not utilized for compliance in the re-
The recoverable amount of assets that do not generate inde-
pendent cash flows is determined based on the cash genera-
porting period. As regards CO2 emissions allowances, inven-
tories are allocated between the trading portfolio and the
ting unit to which the asset belongs.
compliance portfolio, i.e. those used for compliance with
If the carrying amount of an asset or of a cash generating unit
greenhouse gas emissions requirements. Within the latter,
to which it is allocated is higher than its recoverable amount,
an impairment loss is recognized in profit or loss under “De-
CO2 emissions allowances are allocated to sub-portfolios on
the basis of the compliance year to which they have been
preciation, amortization and impairment losses”.
assigned.
Impairment losses of cash generating units are firstly char-
Inventories also include nuclear fuel stocks, the use of which
ged against the carrying amount of any goodwill attributed
is determined on the basis of the electricity generated.
to it and then against the other assets, in proportion to their
Materials and other consumables (including energy com-
carrying amount.
modities) held for use in production are not written down
If the reasons for a previously recognized impairment loss
if it is expected that the final product in which they will be
no longer obtain, the carrying amount of the asset is re-
incorporated will be sold at a price sufficient to enable reco-
stored through profit or loss, under “Depreciation, amorti-
very of the cost incurred.
zation and impairment losses”, in an amount that shall not
exceed the net carrying amount that the asset would have
had if the impairment loss had not been recognized and de-
Construction contracts
preciation or amortization had been performed.
When the outcome of a construction contract can be estima-
The recoverable amount of goodwill and intangible assets
ted reliably and it is probable that the contract will be profi-
with an indefinite useful life is tested for recoverability an-
table, contract revenue and contract costs are recognized by
nually or more frequently if there is evidence suggesting that
reference to the stage of completion of the contract activity at
the assets may be impaired. The original value of goodwill is
the end of the reporting period. Under this criteria, revenue,
not restored even if in subsequent years the reasons for the
expenses and profit are attributed in proportion to the work
impairment no longer obtain.
completed.
If certain specific identified assets owned by the Group are
When it is probable that total contract costs will exceed
impacted by adverse economic or operating conditions that
total contract revenue, the expected loss on the construc-
undermine their capacity to contribute to the generation of
tion contract is recognized as an expense immediately, re-
155
gardless of the stage of completion of the contract.
their fair value recognized through profit or loss.
When the outcome of a construction contract cannot be
estimated reliably, contract revenue is recognized only to
the extent of contract costs incurred that are likely to be re-
coverable.
Held-to-maturity financial assets
This category comprises non-derivative financial assets
with fixed or determinable payments and fixed maturity,
The stage of completion of the contract in progress is determi-
quoted on an active market and not representing equity in-
ned, using the cost-to-cost method, as a ratio between costs
vestments, for which the Group has the positive intention
incurred for work performed to the reporting date and the
and ability to hold until maturity. They are initially recogni-
estimated total contract costs. In addition to initial amount of
zed at fair value, including any transaction costs, and subse-
revenue agreed in the contract, contract revenue includes any
quently measured at amortized cost using the effective in-
payments in respect of variations, claims and incentives, to the
terest method.
extent that it is probable that they will result in revenue and
can be reliably measured.
The amount due from customers for construction contract is
Loans and receivables
This category mainly includes trade receivables and other
presented as an asset; the amount due to customers for con-
financial receivables. Loans and receivables are non-deriva-
struction contract is presented as a liability.
tive financial assets with fixed or determinable payments,
Financial instruments
that are not quoted on an active market, other than those
the Group intends to sell immediately or in the short-term
(which are classified as held for trading) and those that
Financial instruments are recognized and measured in ac-
the Group, on initial recognition, designates as either at
cordance with IAS 32 and IAS 39.
fair value through profit or loss or available for sale. Such
A financial asset or liability is recognized in the consolidated
assets are initially recognized at fair value, adjusted for any
financial statements when, and only when, the Group be-
transaction costs, and are subsequently measured at amor-
comes party to the contractual provisions of the instrument
tized cost using the effective interest method, without di-
(the trade date).
scounting unless material.
Financial instruments are classified as follows under IAS 39:
> financial assets and liabilities at fair value through profit
or loss;
Available-for-sale financial assets
This category mainly includes listed debt securities not clas-
> held-to-maturity financial assets;
sified as held to maturity and equity investments in other
> loans and receivables;
entities (unless classified as “designated as at fair value
> available-for-sale financial assets;
through profit or loss”). Available-for-sale financial assets
> financial liabilities measured at amortized cost.
are non-derivative financial assets that are designated as
Financial assets and liabilities at fair value
through profit or loss
This category includes: securities, equity investments in enti-
available for sale or are not classified as loans and receiva-
bles, held-to-maturity financial assets or financial assets at
fair value through profit or loss.
These financial instruments are measured at fair value with
ties other than subsidiaries, associates and joint ventures and
changes in fair value recognized in other comprehensive in-
investment funds held for trading or designated as at fair va-
come.
lue through profit or loss at the time of initial recognition.
At the time of sale, or when a financial asset available for sale
Financial instruments at fair value through profit or loss are
becomes an investment in a subsidiary as a result of succes-
financial assets and liabilities:
sive purchases, the cumulative gains and losses previously
> classified as held for trading because acquired or incurred
recognized in equity are reversed to the income statement.
principally for the purpose of selling or repurchasing at
When the fair value cannot be determined reliably, these
short term;
assets are recognized at cost adjusted for any impairment
> designated as such upon initial recognition, under the
losses.
option allowed by IAS 39 (the fair value option).
Such financial assets and liabilities are initially recognized at
fair value with subsequent gains and losses from changes in
Impairment of financial assets
At each reporting date, all financial assets classified as loans
156
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS and receivables (including trade receivables), held to matu-
flows, discounted at the current rate of interest for a similar
rity or available for sale, are assessed in order to determine if
financial asset. Reversal of impairment are not permitted in
there is objective evidence that an asset or a group of finan-
these cases either.
cial assets is impaired.
The amount of the impairment loss on a debt instrument
An impairment loss is recognized if and only if such evidence
classified as available for sale, to be reclassified from equi-
exists as a result of one or more events that occurred after
ty, is the cumulative fair value loss recognized in other
initial recognition and that have an impact on the future
comprehensive income. Such impairment loss is reversed
cash flows of the asset and which can be estimated reliably.
through profit or loss if the fair value of the debt instrument
Objective evidence of an impairment loss includes observa-
objectively increases as a result of an event that occurred
ble data about, for example:
after the impairment loss was recognized.
> significant financial difficulty of the issuer or obligor;
> a breach of contract, such as a default or delinquency in
interest or principal payments;
Cash and cash equivalents
This category includes deposits that are available on de-
> evidence that the borrower will enter bankruptcy or
mand or at very short term, as well as highly liquid short-
other form of financial reorganization;
term financial investments that are readily convertible into
> a measurable decrease in estimated future cash flows.
a known amount of cash and which are subject to insignifi-
Losses that are expected to arise as a result of future events
cant risk of changes in value.
are not recognized.
In addition, for the purpose of the consolidated statement
For financial assets classified as loans and receivables or held
of cash flows, cash and cash equivalents do not include
to maturity, once an impairment loss has been identified, its
bank overdrafts at period-end.
amount is measured as the difference between the carrying
amount of the asset and the present value of expected fu-
ture cash flows, discounted at the original effective interest
Financial liabilities at amortized cost
This category mainly includes borrowings, trade payables,
rate. This amount is recognized in profit or loss.
finance lease obligations and debt instruments.
The carrying amount of trade receivable is reduced through
Financial liabilities other than derivatives are recognized
use of an allowance account.
when the Group becomes a party to the contractual clau-
If the amount of a past impairment loss decreases and the
ses of the instrument and are initially measured at fair value
decrease can be related objectively to an event occurring
adjusted for directly attributable transaction costs. Finan-
after the impairment was recognized, the impairment is re-
cial liabilities are subsequently measured at amortized cost
versed through profit or loss.
using the effective interest rate method.
Further factors are considered in case of impairment of avai-
lable for sale equity investments, such as significant adverse
changes in the technological, market, economic or legal en-
Derivative financial instruments
A derivative is a financial instrument or another contract:
vironment.
> whose value changes in response to the changes in an
A significant or prolonged decline in fair value constitutes
underlying variable such as an interest rate, commodity
objective evidence of impairment and, therefore, the fair
or security price, foreign exchange rate, a price or rate in-
value loss previously recognized in other comprehensive in-
dex, a credit rating or other variable;
come is reclassified from equity to income.
> that requires no initial net investment, or an initial net in-
The amount of the cumulative loss is the difference betwe-
vestment that is smaller than would be required for a con-
en the acquisition cost and the current fair value, less any
tract with a similar response to changes in market factors;
impairment loss previously recognized in profit or loss. An
> that is settled at a future date.
impairment loss on an available for sale equity investment
Derivative instruments are classified as financial assets or
cannot be reversed.
liabilities depending on whether their fair value is positive
If there is objective evidence of impairment for unquoted
or negative and they are classified as “held for trading” and
equity instruments measured at cost because fair value can-
measured at fair value through profit or loss, except for those
not be reliably measured, the amount of the impairment
designated as effective hedging instruments.
loss is measured as the difference between the carrying
For more details about hedge accounting, please see note 43
amount and the present value of estimated future cash
“Derivatives and hedge accounting”.
157
All derivatives held for trading are classified as current assets
Such contracts are recognized as derivatives and, as a conse-
or liabilities.
quence, at fair value through profit or loss only if:
Derivatives not held for trading purposes but measured at fair
> they can be settled net in cash; and
value through profit or loss since they do not qualify for hed-
> they are not entered into in accordance with the Group’s
ge accounting and derivatives designated as effective hed-
expected purchase, sale or usage requirements.
ging instruments are classified as current or non-current on
A contract to buy or sell non-financial items is classified as a
the basis of their maturity date and the Group’s intention to
“normal purchase or sale” if it is entered into:
hold the financial instrument until maturity or not.
> for the purpose of physical delivery;
> in accordance with the Group’s expected purchase, sale
Embedded derivatives
An embedded derivative is a derivative included in a “com-
or usage requirements.
The Group analyzes all contracts to buy or sell non-financial
bined” contract (the so-called “hybrid instrument”) that
assets, with a specific focus on forward purchases and sales
contains another non-derivative contract (the so-called host
of electricity and energy commodities, in order to determine
contract) and gives rise to some or all of the combined con-
if they should be classified and treated in accordance with
tract’s cash flows.
IAS 39 or if they have been entered into for “own use”.
The main Group contracts that may contain embedded de-
rivatives are contracts to buy or sell non-financial items with
clauses or options that affect the contract price, volume or
Derecognition of financial assets and liabilities
Financial assets are derecognized whenever one of the fol-
maturity.
lowing conditions is met:
Such contracts, which are not financial instruments to be
> the contractual right to receive the cash flows associated
measured at fair value, are analyzed in order to identify any
with the asset expires;
embedded derivative, which are to be separated and me-
> the Group has transferred substantially all the risks and
asured at fair value. This analysis is performed when the
rewards associated with the asset, transferring its rights
Group becomes party to the contract or when the contract
to receive the cash flows of the asset or assuming a con-
is renegotiated in a manner that significantly changes the
tractual obligation to pay such cash flows to one or more
original associated cash flows. Embedded derivatives are
beneficiaries under a contract that meets the require-
separated from the host contract and accounted for as de-
ments established by IAS 39 (the “pass through test”);
rivatives when:
> the Group has not transferred or retained substantially all
> host contract is not a financial instrument measured at
the risks and rewards associated with the asset but has
fair value through profit or loss;
transferred control over the asset.
> the economic risks and characteristics of the embedded de-
Financial liabilities are derecognized when they are extin-
rivative are not closely related to those of the host contract;
guished, i.e. when the contractual obligation has been di-
> a separate contract with the same terms as the embed-
scharged, cancelled or expired.
ded derivative would meet the definition of a derivative.
Embedded derivatives that are separated from the host
contract are recognized in the consolidated financial state-
Offsetting financial assets and liabilities
The Group offsets financial assets and liabilities when:
ments at fair value with changes recognized through profit
> there is a legally enforceable right to set off the recogni-
or loss (except when the embedded derivative is part of a
zed amounts; and
designated hedging relationship).
> it has the intention of either settling on a net basis, or re-
alizing the asset and settling the liability simultaneously.
Contracts to buy or sell non-financial items
In general, contracts to buy or sell non-financial items that
are entered into and continue to be held for receipt or de-
livery, in accordance with the Group’s normal expected
Post-employment and other
employee benefits
purchase, sale or usage requirements, do not fall within the
Liabilities related to employee benefits paid upon or after
scope of IAS 39 and are then recognized in accordance with
ceasing employment in connection with defined benefit
the normal accounting treatment of such transactions (the
plans or other long-term benefits accrued during the em-
“own use exemption”).
ployment period are determined separately for each plan,
158
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS using actuarial assumptions to estimate the amount of the
the employee benefits. More specifically, when the bene-
future benefits that employees have accrued at the balance
fits represent an enhancement of other post-employment
sheet date (the projected unit credit method). More specifi-
benefits, the associated liability is measured in accordance
cally, the present value of the defined benefit obligation is
with the rules governing that type of benefit. Otherwise,
calculated by using a discount rate determined on the basis
if the termination benefits due to employees are expected
of market yields at the end of the reporting period on high-
to be settled wholly before 12 months after the end of the
quality corporate bonds.
annual reporting period, the entity measures the liability in
The liability is recognized on an accruals basis over the ve-
accordance with the requirements for short-term employee
sting period of the related rights. These appraisals are per-
benefits; if they are not expected to be settled wholly before
formed by independent actuaries.
12 months after the end of the annual reporting period, the
If the value of plan assets exceeds the present value of the
entity measures the liability in accordance with the require-
related defined benefit obligation, the surplus (up to the li-
ments for other long-term employee benefits.
mit of any cap) is recognized as an asset.
As regards the liabilities (assets) of defined benefit plans,
the cumulative actuarial gains and losses from the actuarial
Share-based payments
measurement of the liabilities, the return on the plan assets
Share-based payments made in consideration for services
(net of the associated interest income) and the effect of the
provided are recognized as personnel costs. These services
asset ceiling (net of the associated interest income) are re-
are measured at the fair value of the instruments awarded
cognized in other comprehensive income when they occur.
at the grant date.
For other long-term benefits, the related actuarial gains and
Share-based payments may involve equity-settled (stock op-
losses are recognized through profit or loss.
tions plans) or cash-settled (restricted share units incentive
In the event of a change being made to an existing defined
plans) instruments.
benefit plan or the introduction of a new plan, any past ser-
vice cost is recognized immediately in profit or loss.
Employees are also enrolled in defined contribution plans
Stock option plans
The cost of services rendered by employees and remunera-
under which the Group pays fixed contributions to a separa-
ted through stock option plans is determined on the basis
te entity (a fund) and has no legal or constructive obligation
of the fair value of the options granted to employees at the
to pay further contributions if the fund does not hold suffi-
grant date, measured using the Cox-Rubinstein pricing mo-
cient assets to pay all employee benefits relating to emplo-
del. This model take into consideration all the characteristics
yee service in the current and prior periods. Such plans are
of the option (option term, price and exercise conditions,
usually aimed to supplement pension benefits due to em-
etc.), as well as the Enel share price at the grant date, the
ployees post-employment. The related costs are recognized
volatility of the stock and the yield curve at the grant date
in income statement on the basis of the amount of contri-
consistent with the expected life of the plan.
butions paid in the period.
The cost is recognized in the income statement, against an
Termination benefits
equity reserve, over the vesting period considering the best
estimate possible of the number of options that will beco-
me exercisable.
Liabilities for benefits due to employees for the early termi-
nation of the employment relationship, both as a result of a
decision by the Group or an employee’s decision to accept
Restricted share unit incentive plans
The cost of services rendered by employees and remune-
voluntary redundancy in exchange for these benefits, are re-
rated through restricted share unit (RSU) incentive plans is
cognized at the earlier of the following dates:
determined based on the fair value of the RSU granted to
> when the Group can no longer withdraw its offer of be-
employees, in relation to the vesting of the right to receive
nefits; and
the benefit. The fair value of the RSU is measured using the
> when the Group recognizes a cost for a restructuring that
Monte Carlo pricing model. This model take into considera-
is within the scope of IAS 37 and involves the payment of
tion all the characteristics of the RSU (term, exercise condi-
termination benefits.
tions, etc.), as well as the price and volatility of Enel shares
The liabilities are measured on the basis of the nature of
over the vesting period.
159
The cost is recognized in the income statement, with re-
the assets, it is also determined whether the new carrying
cognition of a specific liability, over the vesting period,
amount of the assets is fully recoverable. If this is not the
adjusting the fair value periodically, considering the best
case, a loss equal to the unrecoverable amount is recogni-
estimate possible of the number of RSU that will become
zed in the income statement.
exercisable.
Provisions for risks and charges
Decreases in estimates are recognized up to the carrying
amount of the assets. Any excess is recognized immediately
in the income statement.
For more information on the estimation criteria adopted in
Provisions are recognized where there is a legal or construc-
determining liabilities for plant dismantling and site restora-
tive obligation as a result of a past event at the end of the re-
tion, especially those associated with nuclear power plants
porting period, the settlement of which is expected to result
or the storage of waste fuel and other radioactive materials,
in an outflow of resources whose amount can be reliably
please see the section on the use of estimates.
estimated. Where the impact is not immaterial, the accruals
are determined by discounting expected future cash flows
using a pre-tax discount rate that reflects the current market
Government grants
assessment of the time value of money and, if applicable,
Government grants, including non-monetary grants at fair
the risks specific to the liability. If the provision is discounted,
value, are recognized where there is reasonable assurance
the periodic adjustment of the present value for the time
that they will be received and that the Group will comply
factor is recognized as a financial expense.
with all conditions attaching to them as set by the go-
When the Group expects some or all of the expenditure re-
vernment, government agencies and similar bodies whe-
quired to extinguish a liability will be reimbursed by a third
ther local, national or international.
party, the reimbursement is recognized as a separate asset if
When loans are provided by governments at a below-mar-
such reimbursement is virtually certain.
ket rate of interest, the benefit is regarded as a government
Where the liability relates to plant decommissioning and/
grant. The loan is initially recognized and measured at fair
or site restoration, the initial recognition of the provision is
value and the government grant is measured as the diffe-
made against the related asset and the expense is then re-
rence between the initial carrying amount of the loan and
cognized in profit or loss through the depreciation of the
the funds received. The loan is subsequently measured in ac-
asset involved.
cordance with the requirements for financial liabilities.
Where the liability regards the treatment and storage of nu-
Government grants are recognized in profit or loss on a
clear waste and other radioactive materials, the provision is
systematic basis over the periods in which the Group reco-
recognized against the related operating costs.
gnizes as expenses the costs that the grants are intended to
In the case of contracts in which the unavoidable costs of
compensate.
meeting the obligations under the contract exceed the eco-
Where the Group receives government grants in the form of
nomic benefits expected to be received under it (onerous
a transfer of a non-monetary asset for the use of the Group, it
contracts), the Group recognizes a provision as the lower
accounts for both the grant and the asset at the fair value of
of the costs of fulfilling the obligation that exceed the eco-
the non-monetary asset received at the date of the transfer.
nomic benefits expected to be received under the contract
Grants related to long-lived assets, including non-monetary
and any compensation or penalty arising from failure to
grants at fair value, i.e. those received to purchase, build or
fulfil it.
otherwise acquire non-current assets (for example, an item
Changes in estimates of accruals to the provision are reco-
of property, plant and equipment or an intangible asset),
gnized in the income statement in the period in which the
are recognized on a deferred basis under other liabilities
changes occur, with the exception of those in respect of the
and are credited to profit or loss on a straight-line basis over
costs of decommissioning, dismantling and/or restoration
the useful life of the asset.
resulting from changes in the timetable and costs necessa-
ry to extinguish the obligation or from a change in the di-
scount rate. These changes increase or decrease the value
Environmental certificates
of the related assets and are taken to the income statement
Some Group companies are affected by national regulations
through depreciation. Where they increase the value of
governing green certificates and energy efficiency certifica-
160
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS tes (so-called white certificates), as well as the European
a non-controlling interest in its former subsidiary after the
“Emissions Trading System”.
sale.
Green certificates accrued in proportion to electricity ge-
The Group applies these classification criteria as envisaged
nerated by renewable energy plants and energy efficiency
in IFRS 5 to an investment, or a portion of an investment, in
certificates accrued in proportion to energy savings achie-
an associate or a joint venture. Any retained portion of an
ved that have been certified by the competent authority are
investment in an associate or a joint venture that has not
treated as non-monetary government operating grants and
been classified as held for sale is accounted for using the
are recognized at fair value, under other revenue and inco-
equity method until disposal of the portion that is classified
me, with recognition of an asset under other non-financial
as held for sale takes place.
assets, if the certificates are not yet credited to the owner-
Non-current assets (or disposal groups) and liabilities of di-
ship account, or under inventories, if the certificates have
sposal groups classified as held for sale are presented sepa-
already been credited to that account. At the time the cer-
rately from other assets and liabilities in the balance sheet.
tificates are credited to the ownership account, they are re-
The amounts presented for non-current assets or for the as-
classified from other assets to inventories.
sets and liabilities of disposal groups classified as held for
Revenue from the sale of such certificates are recognized
sale are not reclassified or re-presented for prior periods
under revenue from sales and services, with a correspon-
presented.
ding decrease in inventories.
Immediately before the initial classification of non-current
For the purposes of accounting for charges arising from re-
assets (or disposal groups) as held for sale, the carrying
gulatory requirements concerning green certificates, ener-
amounts of such assets (or disposal groups) are measured
gy efficiency certificates and CO2 emissions allowances, the
Group uses the “net liability approach”.
in accordance with the IFRS-EU applicable to the specific
assets or liabilities. Non-current assets (or disposal groups)
Under this accounting policy, environmental certificates
classified as held for sale are measured at the lower of their
received free of charge and those self-produced as a re-
carrying amount and fair value less costs to sell. Impairment
sult of Group’s operations that will be used for compliance
losses for any initial or subsequent write-down of the assets
purposes are recognized at nominal value (nil). In addition,
(or disposal groups) to fair value less costs to sell and gains
charges incurred for obtaining (in the market or in some
for their reversals are included in profit or loss from continu-
other transaction for consideration) any missing certificates
ing operations.
to fulfil compliance requirements for the reporting period
Non-current assets are not depreciated (or amortized) while
are recognized through profit or loss on an accruals basis
they are classified as held for sale or while they are part of a
under other operating expenses, as they represent “system
disposal group classified as held for sale.
charges” consequent upon compliance with a regulatory re-
If the classification criteria are no longer met, the Group ce-
quirement.
Non-current assets (or disposal
groups) classified as held for sale and
discontinued operations
ases to classify non-current assets (or disposal group) as held
for sale. In that case they are measured at the lower of:
> the carrying amount before the asset (or disposal group)
was classified as held for sale, adjusted for any deprecia-
tion, amortization or revaluations that would have been
recognized if the asset (or disposal group) had not been
Non-current assets (or disposal groups) are classified as held for
classified as held for sale; and
sale if their carrying amount will be recovered principally throu-
> the recoverable amount, which is equal to the greater of
gh a sale transaction, rather than through continuing use.
its fair value net of costs of disposal and its value in use,
This classification criteria is applicable only when non-cur-
as calculated at the date of the subsequent decision not
rent assets (or disposal groups) are available in their present
to sell.
condition for immediate sale and the sale is highly probable.
Any adjustment to the carrying amount of a non-current as-
If the Group is committed to a sale plan involving loss of
set that ceases to be classified as held for sale is included in
control of a subsidiary and the requirements provided for
profit or loss from continuing operations.
under IFRS 5 are met, all the assets and liabilities of that sub-
A discontinued operation is a component of the Group that
sidiary are classified as held for sale when the classification
either has been disposed of, or is classified as held for sale,
criteria are met, regardless of whether the Group will retain
and:
161
> represents a separate major line of business or geo-
> revenue from the sale of goods is recognized when the
graphical area of operations;
significant risks and rewards of ownership of the goods
> is part of a single coordinated plan to dispose of a sepa-
are transferred to the buyer and their amount can be re-
rate major line of business or geographical area of ope-
liably determined;
rations; or
> revenue from the sale and transport of electricity and gas
> is a subsidiary acquired exclusively with a view to resale.
is recognized when these commodities are supplied to
The Group presents, in a separate line item of the income
the customer and regard the quantities provided during
statement, a single amount comprising the total of:
the period, even if these have not yet been invoiced. It
> the post-tax profit or loss of discontinued operations; and
is determined using estimates as well as periodic meter
> the post-tax gain or loss recognized on the measurement
readings. Where applicable, this revenue is based on the
to fair value less costs to sell or on the disposal of the
rates and related restrictions established by law or the
assets or disposal groups constituting the discontinued
Italian authority for electricity and analogous foreign au-
operation.
thorities during the applicable period. In particular, the
The corresponding amount is re-presented in the income
authorities that regulate the electricity and gas markets
statement for prior periods presented in the financial sta-
can use mechanisms to reduce the impact of the tempo-
tements, so that the disclosures relate to all operations that
ral mismatching between the setting of prices for energy
are discontinued by the end of the current reporting pe-
for the regulated market as applied to distributors and
riod. If the Group ceases to classify a component as held for
the setting of prices by the latter for final consumers;
sale, the results of the component previously presented in
> revenue from the rendering of services is recognized by
discontinued operations are reclassified and included in in-
reference to the stage of completion of services at the
come from continuing operations for all periods presented.
end of the reporting periods in which the services are
Revenue
rendered. The stage of completion of the transaction is
determined based on an assessment of the service rende-
red as a percentage of the total services to be rendered
Revenue is recognized to the extent that it is probable
or as costs incurred as a proportion of the estimated total
that the economic benefits will flow to the Group and the
costs of the transaction. When it is not possible to relia-
amount can be reliably measured. Revenue includes only
bly determine the value of the revenue, it is recognized
the gross inflows of economic benefits received and recei-
only to the extent of the expenses recognized that are
vable by the Group on its own account. Therefore, in an
recoverable;
agency relationship, the amount collected on behalf of the
> revenue associated with construction contracts is re-
principal are excluded from revenue.
cognized as specified in the section “Construction con-
Revenue is measured at the fair value of the consideration re-
tracts”;
ceived or receivable, taking into account the amount of any
> revenue from monetary and in-kind fees for connection
trade discounts and volume rebates allowed by the Group.
to the electricity distribution network is recognized in
When goods or services are exchanged or swapped for go-
full upon completion of connection activities if the ser-
ods or services which are of a similar nature and value, the
vice supplied is identified. If more than one separately
exchange is not regarded as a transaction which generates
identifiable service is identified, the fair value of the total
revenue.
consideration received or receivable is allocated to each
In arrangements under which the Group will perform multi-
service and the revenue related to the service performed
ple revenue-generating activities (a multiple-element arran-
in the period is recognized; in particular, if any ongoing
gement), the recognition criteria are applied to the separa-
services (electricity distribution services) are identified,
tely identifiable components of the transaction in order to
the related revenue is generally determined by the terms
reflect the substance of the transaction or to two or more
of the agreement with the customer or, when such an
transactions together when they are linked in such a way
agreement does not specify a period, over a period no
that the commercial effect cannot be understood without
longer than the useful life of the transferred asset;
reference to the series of transactions as a whole.
> revenue from rentals and operating leases is recognized
More specifically, the following criteria are used depending
on an accruals basis in accordance with the substance of
on the type of transaction:
the relevant agreement.
162
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS Financial income and expense from
derivatives
Financial income and expense from derivatives includes:
> income and expense from derivatives measured at fair
value through profit or loss on interest rate and foreign
exchange risks;
> income and expense from fair value hedge derivatives on
interest rate risk;
> income and expense from cash flow hedge derivatives on
interest rate and foreign exchange risks.
sponding values recognized for tax purposes on the basis
of tax rates in effect on the date the temporary difference
will reverse, which is determined on the basis of tax rates
that are enacted or substantively enacted as at end of the
reporting period.
Deferred tax liabilities are recognized for all taxable tempo-
rary differences, except when the deferred tax liability arises
from the initial recognition of goodwill or in respect of taxa-
ble temporary differences associated with investments in
subsidiaries, associates and interests in joint arrangements,
when the Group can control the timing of the reversal of the
temporary differences and it is probable that the temporary
Other financial income and expense
differences will not reverse in the foreseeable future.
For all financial assets and liabilities measured at amortized
cost and interest-bearing financial assets classified as availa-
ble for sale, interest income and expense is recorded using
the effective interest rate method. The effective interest rate
is the rate that exactly discounts the estimated future cash
payments or receipts over the expected life of the financial
instrument or a shorter period, where appropriate, to the
net carrying amount of the financial asset or liability.
Interest income is recognized to the extent that it is proba-
ble that the economic benefits will flow to the Group and
the amount can be reliably measured.
Other financial income and expense also includes changes
in the fair value of financial instruments other than deriva-
tives.
Income taxes
Deferred tax assets are recognized for all deductible tempo-
rary differences, the carry forward of unused tax credits and
any unused tax losses, when recovery is probable, i.e. when
an entity expects to have sufficient future taxable income to
recover the asset.
The recoverability of deferred tax assets is reviewed at each
period-end.
Unrecognized deferred tax assets are re-assessed at each
reporting date and they are recognized to the extent that
it has become probable that future taxable profits will allow
the deferred tax asset to be recovered.
Deferred taxes are recognized in profit or loss, with the
exception of those in respect of items recognized outside
profit or loss that are recognized in equity.
Deferred tax assets and deferred tax liabilities related to in-
come taxes levied by the same taxation authority are set off
if an entity has a legally enforceable right to set off the cur-
rent tax assets and current tax liabilities that will arise at the
Current income taxes
Current income taxes for the period, which are recognized
time of their reversal.
under “income tax payable” net of payments on account, or
under “tax receivables” where there is a credit balance, are
Dividends
determined using an estimate of taxable income and in con-
Dividends are recognized when the right to receive payment
formity with the applicable regulations.
is established.
In particular, such payables and receivables are determined
Dividends and interim dividends payable to Company’s sha-
using the tax rates and tax laws that are enacted or substan-
reholders are recognized as changes in equity in the period
tively enacted as at the end of the reporting period.
in which they are approved by the Shareholders’ Meeting
Current income taxes are recognized in profit or loss with
and the Board of Directors, respectively.
the exception of current income taxes related to items re-
cognized outside profit or loss that are recognized in equity.
Deferred tax items
Deferred tax liabilities and assets are calculated on the tem-
porary differences between the carrying amounts of assets
and liabilities in the financial statements and their corre-
163
3
Recently issued accounting
standards
New accounting standards applied in
2014
The Group adopted the following accounting standards
and amendments to existing standards with effect as from
January 1, 2014:
> “IFRS 10 - Consolidated financial statements”. Replaces
“SIC 12 - Consolidation - Special purpose entities” and, for
the part concerning consolidated financial statements,
“IAS 27 - Consolidated and separate financial statements”,
the title of which was changed to “Separate financial
statements”. The standard introduces a new approach
to determining whether an entity controls another (the
essential condition for consolidating an investee), wi-
thout modifying the consolidation procedures envisaged
in the previous IAS 27. This approach must be applied to
all investees, including special purpose entities, which
are called “structured entities” in the new standard. Whi-
le previous accounting standards gave priority – where
control did not derive from holding a majority of actual
or potential voting rights – to an assessment of the risks/
benefits associated with the holding in the investee, IFRS
10 focuses on the determination on three elements to
be considered in each assessment: the power to direct
relevant activities of the investee; exposure to variable
returns from the involvement in the investee; and the
link between power and returns, i.e. the ability to use
that decision-making power over the investee to affect
the amount of returns. The accounting effects of a loss of
control or a change in the ownership interest that does
not result in a loss of control are unchanged with respect
to the provisions of the previous IAS 27.
The retroactive application of the standard did not have
an impact on the consolidated financial statements.
> “IAS 27 - Separate financial statements”. Together with
the issue of IFRS 10 and IFRS 12, the previous IAS 27 was
also amended, with changes to its title and its content.
All provisions concerning the preparation of consolida-
ted financial statements were eliminated, while the other
provisions were not modified. Following the amendment,
the standard therefore only specifies the recognition and
164
measurement criteria and the disclosure requirements
for separate financial statements concerning subsidiari-
es, joint ventures and associates.
As the amendment does not regard the consolidated fi-
nancial statements, the retrospective application of the
amendments did not have an impact on Group.
> “IFRS 11 - Joint arrangements”. Replaces “IAS 31 - Interests
in joint ventures” and “SIC 13 - Jointly controlled entities -
non-monetary contributions by venturers”. Unlike IAS 31,
which assessed joint arrangements on the basis of the con-
tractual form adopted, IFRS 11 assesses them on the basis
of how the related rights and obligations are attributed
to the parties. In particular, the new standard identifies
two types of joint arrangement: joint operations, where
the parties to the arrangement have pro-rata rights to the
assets and pro-rata obligations for the liabilities relating
to the arrangement; and joint ventures, where the parties
have rights to a share of the net assets or profit/loss of the
arrangement. In the consolidated financial statements
and the separate financial statements, accounting for
an interest in a joint operation involves the pro-rata re-
cognition of the assets/liabilities and revenues/expenses
related to the arrangement on the basis of the associated
rights/obligations, without taking account of the interest
held. Accounting for an interest in a joint venture involves
the recognition of an investment accounted for using the
equity method. Proportionate consolidation is therefore
no longer permitted.
The effects of the retrospective application of the stan-
dard in the consolidated financial statements are discus-
sed in note 4 “Restatement of comparative disclosures”
below.
> “IAS 28 - Investments in associates and joint ventures”.
Together with the issue of IFRS 11 and IFRS 12, the pre-
vious IAS 28 was amended, with changes to its title and
its content. In particular, the new standard, which also in-
cludes the provisions of “SIC 13 - Jointly controlled entities
- non-monetary contributions by venturers”, describes the
application of the equity method, which in consolidated
financial statements is used to account for associates and
joint ventures.
The effects of the retrospective application of the stan-
dard in the consolidated financial statements are discus-
sed – together with those generated by the introduction
of IFRS 11 – in note 4 “Restatement of comparative di-
sclosures” below.
> “IFRS 12 - Disclosure of interests in other entities”. IFRS
12 brings together in a single standard the required di-
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS sclosures concerning interests held in subsidiaries, joint
amended to clarify that the date of initial application of
operations and joint ventures, associates and structured
the standard shall mean “the beginning of the annual
entities. In particular, the standard replaces the disclo-
reporting period in which IFRS 10 is applied for the first
sures called for in the previous versions of IAS 27, IAS
time” (i.e. January 1, 2013). In addition, the amendments
28 and IAS 31 in order to ensure the disclosure of more
limited the comparative disclosures to be provided in the
uniform and consistent information, introducing new re-
first year of application. IFRS 11 and IFRS 12 were amen-
quirements for disclosures concerning subsidiaries with
ded analogously, limiting the effects, both in terms of re-
significant non-controlling shareholders and individually
statement of financial data and of disclosures, of initial
material associates and joint ventures, as well as structu-
application of IFRS 11.
red entities.
The retrospective application of the amendments did not
The retrospective application of the measure did not
have an impact on the consolidated financial statements.
have an impact on the consolidated financial statements.
> “Amendments to IFRS 10, IFRS 12 and IAS 27 - Investment
> “Amendments to IAS 32 - Financial instruments: presen-
entities”. The amendments introduce an exception to
tation - Offsetting financial assets and financial liabilities”.
the requirement under IFRS 10 to consolidate all subsi-
The new version of IAS 32 establishes that a financial as-
diaries if the parent qualifies as an “investment entity”.
set and a financial liability should be offset and the net
More specifically, investment entities, as defined in the
amount reported in the balance sheet when, and only
amendments, shall not consolidate their subsidiaries
when, an entity:
unless the latter provide services associated with the in-
a) has a legally enforceable right to set off the amounts;
vestment activities of the parent. Non-consolidated sub-
and
sidiaries shall be measured in conformity with IFRS 9 or
b) intends either to settle on a net basis or to realize the
IAS 39. The parent of an investment entity shall, however,
asset and settle the liability simultaneously.
consolidate all of its subsidiaries (including those held
The amendments to IAS 32 clarify that, in order to satisfy
through the investment entity) unless it also qualifies as
the first requirement, the right of set-off must not be con-
an investment entity.
ditioned upon the occurrence of a future event and must
The retrospective application of the amendments did not
be legally enforceable in the normal course of business
have an impact on the consolidated financial statements.
and in the event of breach, insolvency or bankruptcy. The
> “Amendments to IAS 36 - Recoverable amount disclosures
company’s intent to settle net items can be seen in the
for non-financial assets”. The amendments of IAS 36 as a
course of normal business practices, through the ope-
consequence of the provisions of IFRS 13 did not reflect
ration of financial markets and through the absence of
the intentions of the IASB concerning the disclosures to
restrictions on the ability to settle gross and net financial
report about the recoverable amount of impaired assets.
assets and liabilities simultaneously. With regard to this
Consequently, the IASB amended the standard further,
requirement, the amendments to IAS 32 state that, whe-
eliminating the disclosure requirements originally intro-
re the entity settles financial assets and liabilities sepa-
duced by IFRS 13 and requiring specific disclosures con-
rately, for the purpose of offsetting such in the financial
cerning the measurement of fair value in cases in which
statements, the gross settlement system must have spe-
the recoverable amount of impaired assets is calcula-
cific characteristics that eliminate or reduce the degree
ted on the basis of fair value less costs of disposal. The
of credit and liquidity risk to insignificant levels, as well
amendments also require disclosures on the recoverable
as processing receivables and payables in a single settle-
amount of assets or cash generating units for which an
ment process.
impairment loss has been recognized or reversed during
The effects of the retrospective application of the
the period.
amendments on these consolidated financial statements
The retrospective application of the amendments did not
are discussed in note 4 “Restatement of comparative di-
have an impact on the consolidated financial statements.
sclosures” below.
> “Amendments to IAS 39 - Novation of derivatives and
> “Amendments to IFRS 10, IFRS 11 and IFRS 12 - Transi-
continuation of hedge accounting”. The amendments are
tion guidance”. The amendments are intended to clarify
intended to allow entities, under certain conditions, to
a number of issues concerning the first-time adoption of
continue hedge accounting in the case of novation of the
IFRS 10, IFRS 11 and IFRS 12. In particular, IFRS 10 was
hedging instrument with a central counterparty as a re-
165
sult of the introduction of a new law or regulation.
an investment property represents the acquisition of
The retrospective application of the amendments did not
an asset or group of assets or is a business combination
have an impact on the consolidated financial statements.
under the provisions of IFRS 3. That judgment must be
Accounting standards taking effect
at a future date
consistent with the guidance of IFRS 3.
“Annual improvements to IFRSs 2011-2013 cycle” amen-
ded the Basis for Conclusions of “IFRS 1 - First-time adop-
tion of International Financial Reporting Standards” to cla-
The following new standards, amendments and interpre-
rify that a first-time adopter may adopt a new IFRS whose
tations take effect after December 31, 2014:
adoption is not yet mandatorily effective if the new IFRS
> “IFRIC 21 - Levies”, issued in May 2013. The interpretation
permits early application.
defines when a liability in respect of the obligation to pay
> “Annual improvements to IFRSs 2010-2012 cycle”, issued
a levy (other than income taxes) due to the government,
in December 2013; the document contains formal modi-
whether local, national or international must be reco-
fications and clarifications of existing standards that are
gnized. More specifically, the interpretation established
not expected to have a significant impact on the Group
that the liability shall be recognized when the obligating
and will apply for period beginning on or after February
event giving rise to the liability to pay the levy (for exam-
1, 2015. More specifically, the following standards were
ple, upon reaching a given threshold level of revenue),
amended:
as set out in the applicable law, occurs. If the obligating
- “IFRS 2 - Share-based payment”; the amendment se-
event occurs over a specified period of time, the liability
parates the definitions of “performance conditions”
shall be recognized gradually over that period. The inter-
and “service conditions” from the definition of “vesting
pretation will take effect for periods beginning on or af-
conditions” in order to clarify the description of each
ter June 17, 2014. The Group does not expect the future
condition;
application of the provisions to have an impact.
- “IFRS 3 - Business combinations”; the amendment cla-
> “Annual improvements to IFRSs 2011-2013 cycle”, issued
rifies how to classify any contingent consideration
in December 2013; the document contains formal modi-
agreed in a business combination. Specifically, the
fications and clarifications of existing standards that are
amendment establishes that if the contingent consi-
not expected to have a significant impact on the Group
deration meets the definition of financial instrument it
and will apply as from January 1, 2015. More specifically,
shall be classified as a financial liability or equity. In the
the following standards were amended:
former case, the liability shall be measured at fair value
- “IFRS 3 - Business combinations”; the amendment cla-
and changes in fair value shall be recognized in profit
rifies that IFRS 3 does not apply to the financial sta-
or loss in accordance with IFRS 9. Contingent conside-
tements of a joint arrangement in accounting for the
ration that does not meet the definition of financial in-
formation of the joint arrangement itself;
strument shall be measured at fair value and changes
- “IFRS 13 - Fair value measurement”; the amendment
in fair value shall be recognized in profit or loss;
clarifies that the exception provided for in that stan-
- “IFRS 8 - Operating segments”; the amendments intro-
dard of measuring financial assets and liabilities on the
duce new disclosure requirements in order to enable
basis of the net exposure of the portfolio (the “portfo-
the users of financial statements to understand the
lio exception”) shall apply to all contracts within the
judgments adopted by management’s in aggregating
scope of IAS 39 or IFRS 9 even if they do not meet the
operating segments and the reasons for such aggre-
definitions in IAS 32 of financial assets or liabilities;
gation. The amendments also clarify that the reconci-
- “IAS 40 - Investment property”; under IAS 40, a proper-
liation of total segment assets and total assets of the
ty interest held by a lessee under an operating lease
entity is required only if provided periodically by ma-
may be classified as an investment property if and only
nagement;
if the property would otherwise meet the definition
- “IAS 16 - Property, plant and equipment”; the
of an investment property and if the lessee uses the
amendment clarifies that when an item of property,
fair value model to measure such investments. The
plant and equipment is revalued the gross carrying
amendment also clarifies that management judgment
amount of that asset shall be adjusted in a manner
must be used to determine whether the acquisition of
consistent with the revaluation of the carrying amount.
166
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS
In addition, it also clarifies that the accumulated depre-
> “IFRS 9 - Financial instruments”, the final version was is-
ciation shall be calculated as the difference between
sued on July 24, 2014, replacing the existing “IAS 39 - Fi-
the gross carrying amount and the carrying amount of
nancial instruments: recognition and measurement” and
the asset after taking account of accumulated impai-
supersedes all previous versions of the new standard. The
rment losses;
standard will take effect as from January 1, 2018 and early
- “IAS 24 - Related party disclosures”; the amendment
application will be permitted following endorsement.
clarifies that a management entity, i.e. an entity provi-
The final version of IFRS 9 incorporates the results of the
ding key management personnel services to an entity,
three phases of the project to replace IAS 39 concerning
is a related party of that entity. Accordingly, in addi-
classification and measurement, impairment and hedge
tion to fees for services paid or payable to the mana-
accounting.
gement entity, the entity must report other transac-
As regards the classification of financial instruments, IFRS
tions with the management entity, such as loans. The
9 provides for a single approach for all types of financial
amendment also clarifies that if an entity obtains key
asset, including those containing embedded derivatives,
management personnel services from a management
under which financial assets are classified in their enti-
entity, the entity is not required to disclose the com-
rety, without the application of complex subdivision me-
pensation paid or payable by the management entity
thods.
to those managers;
In order to determine how financial assets should be clas-
- “IAS 38 - Intangible assets”; the amendment clarifies
sified and measured, consideration must be given to the
that when an intangible asset is revalued, its gross
business model used to manage its financial assets and
carrying amount shall be adjusted in a manner consi-
the characteristics of the contractual cash flows. Business
stent with the revaluation of the carrying amount. In
model is construed as the manner in which the entity ma-
addition, it also clarifies that the accumulated amor-
nages its financial assets to generate cash flows, i.e. col-
tization shall be calculated as the difference between
lecting contractual cash flows, selling the financial asset
the gross carrying amount and the carrying amount of
or both.
the asset after taking account of accumulated impai-
Financial assets at amortized cost are held in a business
rment losses.
model whose objective is to collect contractual cash
“Annual improvements to IFRSs 2010-2012 cycle” amen-
flows, while those held at fair value through other com-
ded the Basis for Conclusions of “IFRS 13 - Fair value me-
prehensive income (FVTOCI) are held with the objective
asurement” to clarify that short-term receivables and pa-
of collecting contractual cash flows or selling the instru-
yables with no stated interest rate to apply to the invoice
ment. This category enables the recognition of interest
amount can still be measured without discounting, if the
calculated using the amortized cost method through
impact of discounting would not be material.
profit or loss and the fair value of the financial asset
> “Amendments to IAS 19 - Defined benefit plans: em-
through OCI.
ployees contributions”, issued in November 2013. The
Financial assets at fair value through profit or loss (FVTPL)
amendments are intended to clarify how to recognize
is now a residual category that comprises financial instru-
contributions from employees within a defined benefit
ments that are not held under one of the two business
plan. More specifically, contributions linked to service
models indicated above, including those held for trading
should be recognized as a reduction in service cost:
and those managed on the basis of their fair value.
- over the periods in which employees render their servi-
As regards the classification and measurement of finan-
ces, if the amount of the contributions is dependent on
cial liabilities, IFRS 9 maintains the accounting treatment
the number of years of service; or
envisaged in IAS 39, making limited amendments, for
- in the period in which the service is rendered, if the
which most of such liabilities are measured at amortized
amount of the contributions is independent of the
cost. In addition, it is still possible to designate a financial
number of years of service.
liability as at fair value through profit or loss if certain re-
The amendments will take effect for periods beginning
quirements are met.
on or after February 1, 2015. The Group is assessing
The standard introduces new provisions for financial
the potential impact of the future application of the
liabilities designated as at fair value through profit or
amendments.
loss, under which in certain circumstances the portion of
167
changes in fair value due to own credit risk shall be reco-
concerning portfolio fair value hedge accounting for in-
gnized through OCI rather than profit or loss. This part
terest rate risk (“macro hedge accounting”) as that phase
of the standard may be applied early, without having to
of the project for replacing IAS 39 has been separated
apply the entire standard.
and is currently at the discussion stage. In this regard, in
In view of the fact that during the financial crisis the
April 2014 the IASB published the Discussion Paper Ac-
model of impairment based on “incurred credit losses”
counting for Dynamic Risk Management: a Portfolio Reva-
had shown clear limitations connected with the deferral
luation Approach to Macro Hedging.
of the recognition of credit losses to the time a trigger
The potential impact of the future application of IFRS 9 is
event occurred, the standard proposes a new model that
still being assessed.
gives users of financial statements more information on
> “IFRS 14 - Regulatory deferral accounts”, issued in January
“expected credit losses”.
2014. The standard allows first-time adopters to conti-
Essentially, the model envisages:
nue to recognize rate-regulated amounts recognized un-
a) the application of a single approach for all financial
der their previous GAAP at first-time adoption of the In-
assets;
ternational Financial Reporting Standards. The standard
b) the recognition of expected credit losses on an on-
may not be adopted by entities that already prepare their
going basis and the updating of the amount of such
financial statements in accordance with the IFRS/IAS. In
losses at the end of each reporting period, with a view
other words, an entity may not recognize rate-regulated
to reflecting changes in the credit risk of the financial
assets and liabilities under IFRS 14 if its current GAAP
instrument;
do not permit such recognition or if the entity has not
c) the measurement of expected losses on the basis of re-
adopted such accounting treatment as permitted under
asonable information, obtainable without undue cost,
its current GAAP. The standard shall take effect retrospec-
about past events, current conditions and forecasts of
tively, subject to endorsement, for periods beginning on
future conditions;
or after January 1, 2016. The application of the standard
d) an improvement of disclosures on expected losses and
will have no impact on the Group.
credit risk.
> “IFRS 15 - Revenue from contracts with customers”, is-
IFRS 9 also introduces a new approach to hedge ac-
sued in May 2014, introduces a general framework for
counting, with the objective of aligning the representa-
the recognition and measurement of revenue, accompa-
tion in the accounts with risk management activities and
nied by a set of notes. The new standard replaces “IAS
of establishing a more principles-based approach.
11 - Construction contracts”, “IAS 18 - Revenue”, “IFRIC 13
The new approach to hedge accounting will enable en-
- Customer loyalty programmes”, “IFRIC 15 - Agreements
tities to reflect their risk management activities in the
for the construction of real estate”, IFRIC 18 - Transfers
financial statements, extending the criteria for eligibility
of assets from customers” and “SIC 31 - Revenue - Barter
as hedged items to the risk components of non-financial
transactions involving advertising services”. The new stan-
elements, to net positions, to layer components and to
dard establishes that an entity must recognize revenue
aggregate exposures (i.e. a combination of a non-deri-
in a manner that faithfully depicts the transfer of goods
vative exposure and a derivative). The most significant
and services to customers in an amount that reflects the
changes regarding hedging instruments compared with
consideration to which the entity expects to be entitled
the hedge accounting approach used in IAS 39 involve
in exchange for those goods or services. The new reco-
the possibility of deferring the time value of an option,
gnition approach is based on a five-step model: the en-
the forward element of forward contracts and currency
tity must identify the contract(s) with the customer (step
basis spreads (i.e. “hedging costs”) in OCI up until the
1); once the contract has been identified, it must iden-
time in which the hedged element impacts profit or loss.
tify the performance obligations in the contract, i.e. it
IFRS 9 also eliminates the requirement for testing effec-
must assess its terms and commercial practices in order
tiveness under which the results of the retrospective test
to identify which goods and services are promised in re-
needed to fall with a range of 80%-125%, allowing enti-
spect of the individual obligations in the contract (step 2);
ties to rebalance the hedging relationship if risk manage-
subsequently, the entity must determine the transaction
ment objectives have not changed.
price (step 3), which is represented by the consideration
Finally, IFRS 9 does not replace the provisions of IAS 39
that it expects to obtain; the entity must then allocate the
168
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS
transaction price to the individual obligations identified
sued in June 2014. The amendments change the ac-
in the contract (step 4) on the basis of the value of each
counting treatment of biological assets that meet the
performance obligation; revenue is recognized when the
definition of “bearer plants”, such as fruit trees, that cur-
entity satisfies the individual performance obligations
rently fall within the scope of “IAS 16 - Property, plant and
(step 5). The standard shall take effect, subject to en-
equipment”. As a consequence, they will be subject to all
dorsement, for periods beginning on or after January 1,
of the provisions of that standard. Accordingly, for me-
2017. The Group is assessing the potential impact of the
asurement subsequent to initial recognition, the entity
future application of the standard.
may choose between the cost model and the revaluation
> “Amendments to IFRS 11 - Accounting for acquisitions
model. The agricultural products produced by the bearer
of interests in joint operations”, issued in May 2014. The
plants (e.g. fruit) will remain within the scope of “IAS 41 -
amendments clarify the accounting treatment of the ac-
Agriculture”. The amendments will take effect, subject to
quisition of an interests in a joint operation that is busi-
endorsement, for periods beginning on or after January
ness, pursuant to IFRS 3, requiring the application of all
1, 2016. The Group does not expect the future applica-
the accounting rules for business combinations under
tion of the amendments to have an impact.
IFRS 3 and other applicable IFRS with the exception of
> “Amendments to IAS 27 - Equity method in separate finan-
those standards that conflict with the guidance on IFRS
cial statements” issued in August 2014. The amendments
11. Under the amendments, a joint operator that acqui-
reinstate the equity method as an accounting option
res such interests must measure the identifiable assets
for investments in subsidiaries, joint ventures and asso-
and liabilities at fair value; expense acquisition-related
ciates in an entity’s separate financial statements. The
costs (with the exception of debt or equity issuance
amendments also clarify a number of issues concerning
costs); recognize deferred taxes; recognize any goodwill
investment entities. Specifically, when an entity ceases to
or bargain purchase gain; perform impairment tests for
be an investment entity, it must recognize investments in
the cash generating units to which goodwill has been
subsidiaries in accordance with IAS 27. Conversely, when
allocated; and disclose information required for relevant
an entity becomes an investment entity, it must recogni-
business combinations. The amendments will take effect,
ze investments in subsidiaries at fair value through profit
subject to endorsement, for periods beginning on or af-
or loss in accordance with IFRS 9. The amendments will
ter January 1, 2016.
take effect, subject to endorsement, for periods begin-
> “Amendments to IAS 16 and IAS 38 - Clarification of ac-
ning on or after January 1, 2016. As the amendments re-
ceptable methods of depreciation and amortization”, is-
gard the separate financial statements only, they are not
sued in May 2014. The amendments provide additional
expected to have an impact on the consolidated financial
guidance on how the depreciation or amortization of
statements.
property, plant and equipment and intangible assets
> “Amendments to IFRS 10 and IAS 28 - Sale or contribu-
should be calculated. The provisions of IAS 16 have been
tion of assets between an investor and its associate or joint
amended to clarify that a revenue-based depreciation
venture”, issued in September 2014. The amendments
method asset is not appropriate. The provisions of IAS
established that in the case of the sale or contribution of
38 have been amended to introduce a presumption that
assets to a joint venture or an associate, or the sale of an in-
a revenue-based amortization method is inappropriate.
terest that gives rise to a loss of control while maintaining
That presumption can be overcome when:
joint control or significant influence over the associate or
- the intangible asset is expressed as a measure of reve-
joint venture, the amount of the gain or loss recognized
nue;
shall depend on which the assets or interest constitute a
- it can be demonstrated that revenue and the con-
business in accordance with “IFRS 3 - Business combina-
sumption of the economic benefit generated by an in-
tions”. More specifically, if the assets/interest constitute a
tangible asset are highly correlated.
business, any gain (loss) shall be recognized in full; if the
The amendments will take effect prospectively, subject to
assets/interest does not constitute a business, any gain
endorsement, for periods beginning on or after January
(loss) shall only be recognized to the extent of the unre-
1, 2016. The Group is assessing the impact of the future
lated investors’ interests in the associate or joint venture,
application of the amendments.
who represent the counterparties in the transaction. The
> “Amendments to IAS 16 and IAS 41 - Bearer plants”, is-
amendments will take effect prospectively, subject to en-
169
dorsement, for periods beginning on or after January 1,
plify application of the equity method for an entity that
2016. The Group does not expect the future application
is not an investment entity but holds an interest in an
of the amendments to have an impact.
associate or joint venture that is an investment entity. In
> “Amendments to IAS 1 - Disclosure initiative”, issued in
particular, when applying the equity method, the entity
December 2014. The amendments, which form part of a
may retain the fair value measurement applied by the
broader initiative to improve presentation and disclosure
associate or joint venture to its interests in subsidiaries.
requirements, include changes in the following areas:
The amendments will take effect, subject to endorse-
- materiality: the amendments clarify that the concept
ment, for periods beginning on or after January 1, 2016.
of materiality applies to all parts of the financial state-
The Group does not expect the future application of the
ments and that the inclusion of immaterial information
amendments to have an impact.
could undermine the utility of financial disclosures;
> “Annual improvements to IFRSs 2012-2014 cycle”, issued
- disaggregation and subtotals: the amendments clarify
in September 2014; the document contains formal modi-
that the line items in the income statement, the state-
fications and clarifications of existing standards that are
ment of comprehensive income and the balance sheet
not expected to have a significant impact on the Com-
may be disaggregated. They also introduce new requi-
pany. More specifically, the following standards were
rements concerning the use of subtotals;
amended:
- the structure of the notes: the amendments clarify that
- “IFRS 5 - Non-current assets held for sale and disconti-
entities have a certain degree of flexibility in the order
nued operations”; the amendments clarify that the re-
in which the notes to the financial statements may be
classification of an asset (or disposal group) from held
presented. They also emphasize that in establishing
for sale to held for distribution should not be conside-
that order the entity must consider the requirements
red as a new plan of sale but rather the continuation of
of understandability and comparability of the financial
the original plan. Accordingly, the reclassification does
statements;
not give rise to any interruption in the application of
- investments accounted for using the equity method:
the provisions of IFRS 5 or any change in the date of
the entity’s share of OCI of investments in equity-
classification. The amendments will take effect, subject
accounted associates and joint ventures must be
to endorsement, for periods beginning on or after Ja-
presented as separate line items in the statement of
nuary 1, 2016;
comprehensive income depending whether they will
- “IFRS 7 - Financial instruments: disclosures”; as regards
subsequently be reclassified to profit or loss.
disclosures to be provided on any continuing invol-
The amendments will take effect, subject to endorse-
vement in assets that have been transferred and de-
ment, for periods beginning on or after January 1, 2016.
recognized in their entirety, the amendments clarify
The Group does not expect the future application of the
that for disclosure purposes, a servicing contract that
amendments to have an impact.
provides for the payment of a fee can represent a con-
> “Amendments to IFRS 10, IFRS 12 and IAS 28 - Investment
tinuing involvement in the transferred asset. The enti-
entities: applying the consolidation exception”, issued in
ty must assess the nature of the fee and the servicing
December 2014. The amendments clarify that if a parent
contract to determine when disclosure is required. The
entity (or intermediate parent) prepares its financial sta-
amendments also clarify that disclosures concerning
tements in conformity with IFRS 10 (including the case
the offsetting of financial assets and liabilities are not
of an investment entity that does not consolidate its in-
required in condensed interim financial statements.
vestments in subsidiaries but rather measures them at
The amendments will take effect, subject to endor-
fair value), the exemption from preparing consolidated
sement, for periods beginning on or after January 1,
financial statements is available to the subsidiaries of
2016;
an investment entity that in turn qualify as investment
- “IAS 19 - Employee benefits”; IAS 19 requires that the
entities. In addition, the amendments also clarify that a
discount rate used to discount post-employment be-
parent entity that qualifies as an investment entity must
nefit obligations shall be determined by reference to
consolidate a subsidiary that provides services related to
market yields on high quality corporate bonds or go-
the parent’s investment activities if the subsidiary is not
vernment bonds where there is not deep market in
itself an investment entity. The amendments also sim-
such high quality corporate bonds. The amendment
170
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS to IAS 19 clarifies that the depth of the market in high
give rise to any significant differences with the proportio-
quality corporate bonds must be assessed on the ba-
nate consolidation method used previously;
sis of the currency in which the bond is denominated
> the application of the new provisions of IAS 32, applica-
and not the currency of the country in which the bond
ble since January 1, 2014 with retrospective effect, con-
is issued. If there is no deep market in high quality
cerning the offsetting of financial assets and liabilities
corporate bonds in that currency, the corresponding
under certain conditions, which only led to the restate-
market yield on government bonds shall be used. The
ment of several items in the consolidated balance sheet
amendments will take effect, subject to endorsement,
at December 31, 2013, with no impact on shareholders’
for periods beginning on or after January 1, 2016;
equity.
- “IAS 34 - Interim financial reporting”; the amendment
In addition, the balance sheet figures at December 31, 2013
establishes that the required disclosures for interim fi-
were restated as a result of the definitive allocation of the
nancial reports shall be provided in the interim financial
purchase prices for a number of companies in the Renew-
statements or cross-referenced in the interim financial
able Energy Division (including Parque Eólico Talinay Orien-
statements by way of a reference to another statement
te) in transactions that had been completed after that date.
(e.g. a management risk report) that is available on the
Here, too, there were no restatement effects on the items
same terms and at the same time to users of the in-
of the income statement, as the depreciation and amortiza-
terim financial statements. The amendments will take
tion of assets other than goodwill whose value was increa-
effect, subject to endorsement, for periods beginning
sed only began as from the current year.
on or after January 1, 2016.
4
Restatement of comparative
disclosures
The newly applicable accounting standards or newly adop-
ted accounting policies that gave rise to restatements of
comparative figures at December 31, 2013 are as follows:
> the retrospective application of the new IFRS 11, under
which the only permissible method for accounting for
joint ventures is the equity method, while joint arrange-
ments are now accounted for by recognizing the entity’s
share of the assets/liabilities and costs/revenue of the
agreement on the basis of its rights/obligations in the
arrangement, regardless of the interest held. In substan-
ce, the change removed the possibility, as provided for
under the previous IAS 31 and used by the Group, of con-
solidating investments in joint ventures on a proportio-
nate basis, leading to the restatement of all performance
and financial items, although not changing the net inco-
me or shareholders’ equity of the Group. The impact of
the change in accounting treatment of joint operations
was marginal, given that the characteristics of the agree-
ments involved and the associated rights and obligations
meant that the accounting treatment adopted did not
Following changes in the approach used to classify costs for
purchases of electricity, financial receivables in respect of
subsidiaries and joint ventures and the financial impact of
derivatives and their fair value, designed to implement best
industry practice and to ensure clarity in financial reporting,
reclassifications have been made to the income statement,
the balance sheet and the statement of cash flows for 2013
in order to ensure greater comparability of the information
reported. More specifically: with regard to the 2013 income
statement, we have reclassified:
(i) costs for materials and equipment in the amount of
€1,577 million from “Raw materials and consumables” to
“Services and other materials”;
(ii) financial income from derivatives in the amount of €757
million from “Financial income” to “Net financial income/
(expense) from derivatives”;
(iii) financial expense from derivatives in the amount of
€1,218 million from “Financial expense” to “Net financial
income/(expense) from derivatives”.
With regard to the balance sheet at December 31, 2013 and
at January 1, 2013, we have reclassified:
(i) non-current derivative financial assets, equal – at the
respective reference dates – to €444 million and €953
million, from “Non-current financial assets” to a separate
“Derivatives” item under non-current assets;
(ii) current derivative financial assets, equal – at the respecti-
ve reference dates –to €2,285 million and €1,718 million,
from “Current financial assets” to a separate “Derivatives”
item under current assets;
171
(iii) non-current derivative financial liabilities, equal – at the
energy, receivables and payables in respect of construction
respective reference dates – to €2,257 million and €2,553
contracts and the impact of derivatives on performance and
million, from “Non-current financial liabilities” to a sepa-
the financial position. This made it necessary to restate cer-
rate “Derivatives” item under non-current liabilities;
tain figures for 2013 and at December 31, 2013, in order to
(iv) current derivative financial liabilities, equal – at the re-
ensure the comparability of the figures.
spective reference dates – to €2,535 million and €2,028
million, from “Current financial liabilities” to a separate
The following tables report the changes to the income sta-
“Derivatives” item under current liabilities.
tement, the statement of comprehensive income, the con-
solidated balance sheet and the statement of cash flows as
In addition, the income statement and the balance sheet
a result of the above amendments, including the associated
have been modified to improve the presentation of infor-
tax effects.
mation concerning costs for purchases of raw materials and
Millions of euro
Revenue
Revenue from sales and services
Other revenue and income
Total revenue
Costs
Electricity, gas and fuel purchases
Services and other materials
Personnel
Depreciation, amortization and impairment losses
Other operating expenses
Capitalized costs
Total costs
Net income/(expense) from commodity contracts measured at fair
value
Operating income
Financial income from derivatives
Other financial income
Financial expense from derivatives
Other financial expense
Share of income/(losses) of equity investments accounted for using the
equity method
Income before taxes
Income taxes
Net income from continuing operations
Net income from discontinued operations
Net income for the year (shareholders of the Parent Company and
non-controlling interests)
Attributable to shareholders of the Parent Company
Attributable to non-controlling interests
2013
IFRS 11 effect
2013
restated
77,258
3,277
80,535
40,035
17,128
4,596
7,067
2,837
(1,450)
70,213
(378)
9,944
757
1,696
1,218
4,048
86
7,217
2,437
4,780
-
4,780
3,235
1,545
(1,831)
(41)
(1,872)
(1,081)
(430)
(41)
(116)
(16)
16
(1,668)
-
(204)
(1)
(3)
(8)
(5)
131
(64)
(64)
-
-
-
-
-
75,427
3,236
78,663
38,954
16,698
4,555
6,951
2,821
(1,434)
68,545
(378)
9,740
756
1,693
1,210
4,043
217
7,153
2,373
4,780
-
4,780
3,235
1,545
172
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS Millions of euro
Net income for the year
Other comprehensive income recyclable to profit or loss
Effective portion of change in the fair value of cash flow hedges
Share of the other comprehensive income of equity investments
accounted for using the equity method
Change in the fair value of financial assets available for sale
Exchange rate differences
Other comprehensive income not recyclable to profit or loss
Remeasurements of net defined benefit liabilities/(assets)
Share of the other comprehensive income of equity investments
accounted for using the equity method
Total other comprehensive income/(loss) for the period
Total comprehensive income/(loss) for the period
Attributable to:
- shareholders of the Parent Company
- non-controlling interests
Millions of euro
2013
4,780
(174)
(29)
(105)
(3,197)
(188)
-
(3,693)
1,087
1,514
(427)
IFRS 11 effect
-
(16)
11
-
5
-
-
-
-
-
2013
restated
4,780
(190)
(18)
(105)
(3,192)
(188)
-
(3,693)
1,087
1,514
(427)
at
Dec. 31,
2012
IFRS 11
effect
IAS 32
effect
at Jan.
1, 2013
restated
at
Dec. 31,
2013
IFRS 11
effect
IAS 32
effect
ASSETS
Property, plant and equipment
83,115
(926)
Investment property
Intangible assets
Goodwill
Deferred tax assets
Equity investments accounted
for using the equity method
Derivatives
Other non-current financial
assets
Other non-current assets
197
20,087
15,910
6,816
1,115
953
4,565
800
-
(137)
(101)
(49)
836
-
23
(19)
Total non-current assets
133,558
(373)
Inventories
Trade receivables
Tax receivables
Derivatives
Other current financial assets
Other current assets
Cash and cash equivalents
3,338
(48)
11,681
(126)
1,631
1,718
7,663
2,300
9,891
(28)
(1)
(13)
(19)
(165)
(400)
-
-
-
-
-
-
-
-
-
-
-
-
-
507
-
-
-
82,189
81,050
(773)
197
181
-
19,950
18,214
(174)
15,809
15,015
6,767
6,239
1,951
953
4,588
781
647
444
5,957
837
133,185
128,584
3,290
3,586
11,555
11,496
1,603
2,224
7,650
2,281
9,726
1,735
2,285
5,592
2,599
8,030
(51)
(53)
725
-
13
(20)
(333)
(31)
(118)
(26)
(1)
15
(42)
(157)
(360)
Total current assets
38,222
507
38,329
35,323
Assets classified as held for
sale
317
-
-
317
241
-
TOTAL ASSETS
172,097
(773)
507
171,831
164,148
(693)
-
-
-
-
-
-
-
-
-
-
-
-
-
406
-
-
-
406
-
406
Renewable
Energy
Division
PPA
at Dec.
31, 2013
restated
(14)
80,263
-
15
3
-
-
-
-
-
4
-
-
-
-
-
-
-
181
18,055
14,967
6,186
1,372
444
5,970
817
128,255
3,555
11,378
1,709
2,690
5,607
2,557
7,873
35,369
241
4
163,865
173
IFRS 11
effect
IAS 32
effect
at Jan.
1, 2013
restated
at
Dec. 31,
2013
IFRS 11
effect
IAS 32
effect
Renewable
Energy
Division PPA
at Dec.
31, 2013
restated
9,403
7,084
19,454
35,941
16,891
52,832
50,905
3,677
6,504
10,795
2,216
1,259
75,356
2,484
4,658
1,467
12,363
286
2,940
1,100
10,359
35,657
20
111,033
163,865
-
-
-
-
-
-
-
4
-
4
-
-
-
-
-
-
-
-
4
4
Millions of euro
Share capital
Reserves
Retained earnings (loss carried
forward)
Total equity attributable
to the shareholders of the
Parent Company
Non-controlling interests
Total shareholders’ equity
at
Dec. 31,
2012
9,403
8,747
17,625
35,775
16,312
52,087
-
-
(9)
(9)
Long-term borrowings
55,959
(226)
Post-employment and other
employee benefits
Provisions for risks and charges
4,542
7,336
(21)
(80)
Deferred tax liabilities
11,786
(128)
Derivatives
Other non-current liabilities
2,553
1,151
(66)
(8)
Total non-current liabilities
83,327
(529)
Short-term borrowings
3,970
(2)
Current portion of long-term
borrowings
Provisions for risk and charges
4,057
1,312
(34)
(21)
Trade payables
13,194
(105)
Income tax payable
Derivatives
Other current financial
liabilities
Other current liabilities
364
2,028
1,110
10,641
(10)
(1)
(5)
(57)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,403
8,747
9,403
7,084
17,625
19,454
35,775
35,941
16,303
16,898
52,078
52,839
-
-
-
-
(7)
(7)
55,733
51,113
(208)
4,521
7,256
3,696
6,554
(19)
(50)
11,658
10,905
(114)
2,487
1,143
2,257
1,266
(41)
(7)
82,798
75,791
(439)
3,968
2,529
(45)
4,023
1,291
4,690
1,493
13,089
12,444
354
308
507
2,534
2,535
-
-
1,105
1,105
10,584
10,394
(32)
(26)
(81)
(22)
(1)
(5)
(35)
- -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
406
-
-
Total current liabilities
36,676
(235)
507
36,948
35,498
(247)
406
Liabilities classified as held
for sale
7
-
-
7
20
-
-
TOTAL LIABILITIES
120,010
(764)
507
119,753
111,309
(686)
406
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY
172,097
(773)
507
171,831
164,148
(693)
406
174
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS Millions of euro
Income before taxes for the year
Adjustments for:
Amortization and impairment losses of intangible assets
Depreciation and impairment losses of property, plant and equipment
Exchange rate adjustments of foreign currency assets and liabilities
(including cash and cash equivalents)
Accruals to provisions
Financial (income)/expense
(Gains)/Losses from disposals and other non-monetary items
Cash flow from operating activities before changes in net current assets
Increase/(Decrease) in provisions
(Increase)/Decrease in inventories
(Increase)/Decrease in trade receivables
(Increase)/Decrease in financial and non-financial assets/liabilities
Increase/(Decrease) in trade payables
Interest income and other financial income collected
Interest expense and other financial expense paid
Income taxes paid
Cash flows from operating activities (a)
- of which discontinued operations
Investments in property, plant and equipment
Investments in intangible assets
Investments in entities (or business units) less cash and cash equivalents
acquired
Disposals of entities (or business units) less cash and cash equivalents
sold
(Increase)/Decrease in other investing activities
Cash flows from investing/disinvesting activities (b)
- of which discontinued operations
Financial debt (new long-term borrowing)
Financial debt (repayments and other net changes)
Collections/(Payments) for sale/(acquisition) of non-controlling interests
Incidental expenses in disposal of equity interests without loss of control
Dividends and interim dividends paid
Cash flows from financing activities (c)
- of which discontinued operations
Impact of exchange rate fluctuations on cash and cash equivalents
(d)
Increase/(Decrease) in cash and cash equivalents (a+b+c+d)
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
2013
7,217
1,622
4,790
(264)
1,023
2,319
48
16,755
(1,884)
(249)
(596)
(681)
(893)
1,110
(3,715)
(2,606)
7,241
(5,350)
(610)
(210)
1,409
614
(4,147)
-
5,336
(9,565)
1,814
(85)
(2,044)
(4,544)
(426)
(1,876)
9,933
8,057
IFRS 11 effect
(63)
(24)
(92)
-
-
3
(140)
(316)
(5)
(17)
65
79
22
165
20
-
13
-
39
-
4
-
1
44
-
-
(54)
-
-
-
(54)
-
5
8
(165)
(157)
2013
restated
7,154
1,598
4,698
(264)
1,023
2,322
(92)
16,439
(1,889)
(266)
(531)
(602)
(871)
1,275
(3,695)
(2,606)
7,254
(5,311)
(610)
(206)
1,409
615
(4,103)
-
5,336
(9,619)
1,814
(85)
(2,044)
(4,598)
(421)
(1,868)
9,768
7,900
175
5
Main changes in the scope of consolidation
In the two periods under review, the scope of consolidation changed as a result of the following main transactions.
2013
2014
> Acquisition, on March 22, 2013, of 100% of Parque Eólico
> Loss of control, as from January 1, 2014, of SE Hydro-
Talinay Oriente, a company operating in the wind gene-
power, under agreements signed in 2010 upon the ac-
ration sector in Chile;
quisition of the company, providing for the change in
> acquisition, on March 26, 2013, of 50% of PowerCrop,
governance structure as from that date. This resulted in
a company operating in the biomass generation sector;
the Enel Group no longer meeting the requirements for
in view of the joint control exercised over the company
control of the company, which has instead become an
together with another operator, the company is now
entity under joint control. With these new governance
accounted for using the equity method under the provi-
arrangements, the investment was reclassified as a joint
sions of IFRS 11;
operation under IFRS 11;
> disposal, on April 8, 2013, of 51% di Buffalo Dunes Wind
> acquisition, through a tender offer in effect between
Project, a company operating in the wind generation sec-
January 14, 2014 and May 16, 2014, of an additional
tor in the United States;
15.18% stake in Coelce, an electricity distribution com-
> acquisition, on May 22, 2013, of 26% of Chisholm View
pany in Brazil, already under the Group’s control prior to
Wind Project and Prairie Rose Wind, two companies ope-
the tender offer;
rating in the wind generation sector in the United States
> acquisition, on April 22, 2014, of 50% of Inversiones Gas
in which the Group held a stake of 49%; as a result of the
Atacama, a company operating in the natural gas tran-
purchase, as from that date the companies are no longer
sport and electricity generation sector in Chile in which
accounted for using the equity method but are now con-
the Group already held 50%; therefore, the company
solidated on a line-by-line basis;
is now consolidated on a line-by-line basis rather than
> acquisition, on August 9, 2013, of 70% of Domus Energia
using equity method accounting;
(now Enel Green Power Finale Emilia), a company opera-
> acquisition, on May 12, 2014, of 26% of Buffalo Dunes
ting in the biomass generation sector;
Wind Project, a company operating in the wind gene-
> acquisition, on October 31, 2013, of 100% of Compañía
ration sector in the United States in which the Group
Energética Veracruz, a company operating in the deve-
already held 49%; therefore, the company is now con-
lopment of hydroelectric plants in Peru;
solidated on a line-by-line basis rather than using equity
> disposal, on November 13, 2013, of 40% of Artic Russia,
method accounting;
with the consequent deconsolidation of the interest held
> acquisition, on July 22, 2014, of the remaining 50% of
by the latter in SeverEnergia;
Enel Green Power Solar Energy, an Italian company ope-
> acquisition, in November and December 2013, of nine
rating in the development, design, construction and ope-
companies (representing three business combinations)
ration of photovoltaic plants, in which the Group had
operating in the development of wind power projects in
previously held 50%; therefore, the company is now con-
the United States;
solidated on a line-by-line basis rather than using equity
> disposal, on December 20, 2013, of the remaining stake
method accounting;
in Enel Rete Gas, previously accounted for using the equi-
> acquisition, on September 4, 2014, of the remaining 39%
ty method.
176
of Generandes Perú (previously controlled through a sta-
ke of 61%), a company that controls, with an interest of
54.20%, Edegel, a company operating in the power ge-
neration sector in Peru;
> acquisition, on September 17, 2014, of 100% of Osage
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS
Wind LLC, a company that owns a 150 MW wind deve-
> disposal in December 2014 of 100% of Enel Green Power
lopment project in the United States. In October 2014,
France, a renewables generator in France.
a stake of 50% in the company was sold. Consequently,
the company, a joint venture, began to be accounted for
In addition, following the internal reorganization of the
using the equity method;
Group designed to restructure the holdings of the Iberia
> disposal, on November 21, 2014, of 21.92% of Endesa
and Latin America Division, there were a number of chan-
SA, in a public offering. The operation did not involve any
ges in non-controlling interests in a number of subsidiaries.
loss of control;
More specifically, on October 23, 2014 Endesa (of which the
> during 2014, agreements were completed for the ac-
Group holds 92.06%) sold 100% of Endesa Latinoamérica
quisition of wind and solar projects in Chile, in the total
(an investment holding company that owned 40.32% of
amount of about €7 million, and a wind project in Uru-
Enersis) and 20.3% of Enersis, the parent company for ope-
guay for €4 million;
rations in Latin America, to Enel Energy Europe, now Enel
> disposal in December 2014 of the entire stake (36.2%)
Iberoamérica (a wholly-owned subsidiary). The operation
held in LaGeo, a geothermal generation company in El
increased the Group’s stake in Enersis by 4.81%.
Salvador;
Definitive allocation of the purchase
price of a number of companies of
the Renewable Energy Division
perty, plant and equipment as a result of the completion
of the determination of their fair value;
> determined the tax effects associated with the above re-
Following the acquisition of control in 2013 of Parque Eólico
Talinay Oriente, a Chilean company operating in the wind
generation sector, in the 1st Quarter of 2014 the Group
completed the allocation of the associated purchase price
to the assets acquired and the liabilities assumed. More spe-
cifically, the Group:
> adjusted the value of certain intangible assets and pro-
Definitive allocation of the purchase price
cognition.
The following table summarizes the accounting effects as
of the acquisition dates, along with the effects of certain
other minor acquisitions by that Division in the 1st Quarter
of 2013 for which the definitive recognition was carried out
in the 1st Quarter of 2014.
Millions of euro
Parque Eólico Talinay Oriente
Other minor acquisitions
Net assets acquired before allocation
Adjustments for measurement at fair value:
- property, plant and equipment
- intangible assets
- deferred tax liabilities
Net assets acquired after allocation
Value of the transaction (1)
Goodwill
(1) Including incidental expenses.
126
(14)
8
(2)
118
126
8
-
-
7
(2)
5
7
2
The following section details the main business combinations and other material acquisitions and reorganizations con-
ducted by the Group in 2014.
177
Increase of the interest in Coelce
Between January 14, 2014 and May 16, 2014, the Chilean
subsidiary Enersis acquired, through a tender offer, another
15.16% of Coelce, a subsidiary that operates in the electri-
city distribution sector in Brazil and was already consolida-
ted on a line-by-line basis. Under IFRS 3 (Revised), in tran-
sactions involving non-controlling interests, the difference
between the price paid and the value of the assets acquired
(previously assigned to non-controlling shareholders) is re-
cognized in consolidated shareholders’ equity reserve. The
effects of this transaction are as follows:
Millions of euro
Net assets acquired
Cost of transaction
Reserve from transactions in non-controlling interests
189
180
9
Acquisition of Inversiones Gas
Atacama
Group and is therefore consolidated on a line-by-line basis
rather than using equity method accounting. In accordance
On April 22, 2014, Endesa Chile completed the purchase of
with IFRS 3, this transaction is treated as a business combina-
an additional 50% stake in the share capital of Inversiones
tion carried out in stages (a step acquisition) and therefore
Gas Atacama, a company operating in the natural gas tran-
the fair value adjustments pertaining to the net assets already
sport and electricity generation sector in Chile, from Southern
held were recognized in the income statement for the period.
Cross. This acquisition marked the end of the shareholders’
The process of allocating the purchase price to the fair value
agreement signed in August 2007 that gave the two compa-
of the assets acquired and the liabilities and contingent liabi-
nies joint control over Inversiones Gas Atacama. As a result
lities assumed has essentially been completed with the excess
of this transaction, the company is now fully owned by the
amount (€25 million) definitively allocated to goodwill.
Determination of goodwill
Millions of euro
Net assets acquired before allocation
Adjustments for measurement at fair value:
- property, plant and equipment
- net deferred tax liabilities
Net assets acquired after allocation
Value of the business combination:
- book value of interest previously held
- remeasurement at fair value of interest previously held
- cost of acquisition made in 2014 (cash)
Total
Goodwill
348
70
(38)
380
174
29
202
405
25
The value of the goodwill reflects the amount by which the
the definitive fair value of the assets acquired and the lia-
purchase price exceeds the fair value of the assets acquired
bilities and contingent liabilities assumed at the acquisition
and relates to the future economic benefits of the asset that
date of April 22, 2014.
cannot be separately identified. The following table shows
178
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS Financial position of Inversiones Gas Atacama at the acquisition date
Millions of euro
Property, plant and equipment
Inventories, trade and other receivables
Cash and cash equivalents
Other current and non-current assets
Total assets
Equity pertaining to the shareholders of the Parent
Company
Non-controlling interests
Financial debt
Trade payables
Deferred tax liabilities and other liabilities
Total liabilities and shareholders’ equity
Increase in investments in
Generandes Perú and Edegel
Under the terms of the agreement reached in April 2014, on
September 4, 2014, Enersis, the Chilean company that leads
operations in Latin America, completed the acquisition of
39% of Generandes Perú, a company already controlled with
a stake of 61%, which in turn owns 54.2% of Edegel, a Peru-
vian company operating in the power generation sector.
In accordance with the provisions of IFRS 3 (Revised) for
transactions involving non-controlling interests, the diffe-
rence between the price paid, equal to $421 million (equal
to €321 million at the acquisition date) and the value of the
assets acquired, previously allocated to non-controlling in-
terests, was recognized directly in a specific consolidated
equity reserve. The effects of the transaction were as follows:
Millions of euro
Net assets acquired
Cost of transaction
Reserve from transactions in non-controlling interests
233
321
(88)
Acquisition of investments in Endesa
Latinoamérica and Enersis by Enel
Energy Europe
Millions of euro
Net assets acquired
Cost of transaction
On October 23, 2014, the transfer of the investments held
by Endesa in Endesa Latinoamérica and Enersis (100% and
20.3%, respectively) to Enel Energy Europe (now Enel Ibero-
américa) was completed.
Enel Iberoamérica, which is wholly owned by Enel and is the
majority shareholder of Endesa (with a stake of 92.06% at
the transaction date), acquired the 60.62% interest held di-
rectly and indirectly by Endesa in the Chilean company Ener-
Carrying amount prior to
April 22, 2014
Definitive fair value
adjustments
Restated values at April
22, 2014
185
62
165
32
444
348
1
41
38
16
444
70
-
-
-
70
32
-
-
-
38
70
255
62
165
32
514
380
1
41
38
54
514
sis, the holding company of Enel’s Latin American compa-
nies. More specifically, the transaction involved (i) the 20.3%
of Enersis shares held directly by Endesa and (ii) the 100% of
Endesa Latinoamérica shares (which in turn holds 40.32% of
Enersis) also held directly by Endesa.
The total price was €8,253 million, which was determined
using generally accepted international valuation techniques
for this type of transaction.
In these consolidated financial statements, the change in
the scope of consolidation for the acquisition of 7.94% of
the Endesa Latinoamérica Group (which indirectly involved
the acquisition of 3.2% of the Enersis Group) and the 1.61%
of the Enersis Group held directly by Endesa had a theoreti-
cal value of €659 million (equal to the price paid attributable
to non-controlling interests, including transaction costs of
€4 million), generating a negative difference between the
purchase price and the associated share of equity acquired
equal to €177 million. In accordance with IFRS 3 (Revised)
for transactions in non-controlling interests, that amount
was recognized in an equity reserve. The effects of the tran-
saction can be summarized as follows:
482
659
177
Reserve from transactions in non-controlling interests
Sale of investment in Endesa by Enel
Energy Europe in a public offer
On November 21, 2014, the public offer of 21.92% of the
shares of Endesa held by Enel Energy Europe, now Enel Ibe-
roamérica, was completed successfully.
Following the offer, the interest held by Enel Iberoamérica
179
in Endesa declined from 92.06% to 70.14%. The disposal
step acquisition) and therefore the fair value adjustments
generated proceeds of €3,133 million, which net of tran-
pertaining to the net assets already held were recognized
saction costs (€46 million) amounted to €3,087 million. The
in the income statement for the period. The Group also
result on the sale, determined as the difference between
acquired 100% of Aurora Distributed Solar, a company
the net sale price and the equity sold to non-controlling in-
that develops solar power systems, for €15 million. Simi-
terests, amounted to €2,831 million, which was recognized
lar transactions were carried out in December 2014 with
in an equity reserve as the Group retains control of the com-
Geronimo Wind Energy and Trade Wind Energy;
pany involved in the disposal.
> following up on the commitment undertaken with the
The impact of the transaction can be summarized as follows:
agreement of July 11, 2014 with Sharp, on July 22, 2014,
Millions of euro
Net assets sold
Net transaction price
Reserve from transactions in non-controlling interests
5,918
3,087
2,831
Minor acquisitions of the Renewable
Energy Division
These include:
> on May 12, 2014, the Group completed the acquisition
of an additional 26% interest in Buffalo Dunes Wind
Project. As a result of the transaction, the Group holds
75% of the company, which is consolidated on a line-by-
line basis rather than using equity method accounting. In
accordance with IFRS 3 (Revised), the transaction is tre-
ated as a business combination carried out in stages (a
Enel Green Power acquired Sharp’s interest in Enel Gre-
en Power & Sharp Solar Energy (now named Enel Green
Power Solar Energy Srl), an equally held joint venture cre-
ated to develop, build and operate photovoltaic plants
using the solar panels produced by the 3SUN factory. The
agreement, with an overall value of €30 million, involved
the acquisition of Sharp’s 50% holding and the waiver
by Sharp of its claim in respect of Enel Green Power So-
lar Energy in the amount of €25 million. Following the
acquisition, the Group’s stake in Enel Green Power Solar
Energy rose from 50% to 100%. In accordance with IFRS
3 (Revised), the transaction is treated as a business com-
bination carried out in stages (a step acquisition);
> the acquisition in December 2014 of Proyecto Talinay Po-
niente.
Summary of acquisitions of the Renewable Energy Division
Millions of euro
Property, plant and equipment
Intangible assets
Cash and cash equivalents
Other current and non-current assets
Non-controlling interests
Gross financial debt
Deferred tax liabilities and other liabilities
Net assets acquired
Goodwill
Value of the transaction (1)
Carrying amount of previously held interests
Buffalo Dunes Wind
Project and Aurora
Distributed Solar
Enel Green Power
Solar Energy
Geronimo Wind
Energy and Trade
Wind Energy
Proyecto Talinay
Poniente
334
15
6
(41)
(181)
(7)
126
7
133
76
102
12
11
(122)
(1)
2
2
5
62
1
(21)
42
42
20
(4)
16
16
Remeasurement at fair value of previously held interests
3
(8)
Cost of acquisition carried out in 2014 (cash)
54
5
Amount to be paid at December 31, 2014
42
16
(1) Including incidental expenses.
For a number of business combinations, the purchase price was provisionally allocated to the net assets acquired. Goodwill
was recognized provisionally.
180
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS
6
Segment information
to customers in local markets. The new organization will
The representation of performance and financial position
modify the reporting structure, the analysis of the Group’s
by business area presented here is based on the approach
performance and financial position and, accordingly, the re-
used by management in monitoring Group performance for
presentation of consolidated results only from the start of
the two periods being compared.
2015. Consequently, in these consolidated financial state-
ments, in line with practice in previous periods, the results
On July 31, 2014, the Enel Group adopted a new organi-
by business area are discussed using the previous organiza-
zational structure, based on a matrix of Divisions and geo-
tional structure, taking account of the provisions of IFRS 8
graphical areas, focused on the industrial objectives of the
concerning the “management approach”.
Group, with clear specification of roles and responsibilities
in order to pursue and maintain technological leadership in
For more information on performance and financial deve-
the sectors in which the Group operates, ensuring operatio-
lopments during the year, please see the dedicated section
nal excellence, and to maximize the level of service offered
in the report on operations.
Segment information for 2014 and 2013
Results for 2014 (1)
Millions of euro
Sales
GEM
Infra. &
Networks
Iberia and
Latin America
Revenue from third parties
15,116
18,908
3,618
30,412
Revenue from transactions
with other segments
110
3,698
3,748
135
Total revenue
15,226
22,606
7,366
30,547
Total costs
14,111
21,297
3,387
24,138
Int’l
4,920
358
5,278
4,069
Other,
eliminations
and
adjustments
Renewable
Energy
Total
2,662
155
75,791
259
(8,308)
-
2,921
(8,153)
75,791
1,059
(8,252)
59,809
Net income/(expense)
from commodity contracts
measured at fair value
Depreciation and
amortization
Impairment losses
Writebacks
Operating income
Capital expenditure
(34)
(146)
(115)
(5)
112
515
(1)
455
111
987
49
520
2,183
(1)
(1,539)
2,943
285
996
2,517
1,214
(226)
2,789
2,602
383
3,540
(37)
(2,682)
936
76
589
228
(3)
1,124
1,658
(1)
96
4
1
(3)
113
(225)
5,204
7,733
(267)
3,087
6,701
(1) Segment revenues include both revenues from third parties and revenue flows between the segments. An analogous approach was taken for other income
and costs for the period.
181
Results for 2013 restated (1) (2)
Millions of euro
Sales
GEM
Infra. &
Networks
Iberia and
Latin America
Revenue from third parties
16,704
18,758
3,669
30,563
Revenue from transactions
with other segments
217
4,040
4,029
111
Total revenue
16,921
22,798
7,698
30,674
Total costs
15,973
21,549
3,690
23,887
Net income/(expense)
from commodity contracts
measured at fair value
Depreciation and
amortization
Impairment losses
Reversals of impairment
losses
Operating income
Capital expenditure
(82)
(165)
101
403
362
99
485
105
1
493
313
977
3
3,028
1,046
(148)
2,661
420
(210)
3,767
2,160
Other,
eliminations
and
adjustments
Renewable
Energy
Total
2,281
1,026
78,663
488
(9,519)
-
2,769
(8,493)
78,663
1,011
(9,515)
61,594
21
515
60
1,205
1,294 (3)
(378)
5,326
1,851
(226)
9,740
5,920
105
10
(1)
908
84
Int’l
5,662
634
6,296
4,999
(4)
482
850
(16)
(23)
924
(1) Segment revenues include both revenues from third parties and revenue flows between the segments. An analogous approach was taken for other income
and costs for the period.
(2) Figures restated retrospectively to reflect the new IFRS 11.
(3) Does not include €1 million regarding units classified as “held for sale”.
Financial position by segment
At December 31, 2014
Millions of euro
Sales
GEM
Infra. &
Networks
Iberia and
Latin America
Renewable
Energy
Int’l
Property, plant and
equipment
Intangible assets
Trade receivables
Other
34
779
3,897
222
7,048
15,079
254
3,300
2,094
122
2,224
1,488
35,816
26,389
3,837
2,286
6,702
11,765
912
406
497
2,248
440
599
Other,
eliminations
and
adjustments
527
158
Total
76,971
30,862
(2,002)
12,102
(187)
6,999
Operating assets
4,932
12,696 (1)
18,913
68,328 (3)
8,517 (4)
15,052
(1,504)
126,934
Trade payables
Sundry provisions
Other
2,999
241
1,939
3,448
1,085
466
3,363
1,807
3,615
4,308
4,744
4,170
748
2,572
1,302
892
193
560
(2,048)
13,710
698
11,340
(541)
11,511
Operating liabilities
5,179
4,999 (2)
8,785
13,222
4,622 (5)
1,645
(1,891)
36,561
(1) Of which €347 million regarding units classified as “held for sale”.
(2) Of which €22 million regarding units classified as “held for sale”.
(3) Of which €14 million regarding units classified as “held for sale”.
(4) Of which €4,255 million regarding units classified as “held for sale”.
(5) Of which €2,790 million regarding units classified as “held for sale”.
182
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS At December 31, 2013 restated (1)
Millions of euro
Sales
GEM
Infra. &
Networks
Iberia and
Latin America
Property, plant and
equipment
Intangible assets
Trade receivables
Other
39
775
4,015
250
9,438
15,096
550
3,061
2,482
117
1,696
1,251
35,474
27,208
3,582
1,973
Other,
eliminations
and
adjustments
Renewable
Energy
10,075
2,205
364
404
506
281
(1,856)
(182)
Int’l
9,847
1,888
524
460
Total
80,475
33,024
11,386
6,638
Operating assets
5,079
15,531 (2)
18,160
68,237
12,719 (3)
13,048 (5)
(1,251)
131,523
Trade payables
Sundry provisions
Other
Operating liabilities
3,070
234
1,959
5,263
3,578
1,197
729
5,504
2,486
2,536
2,996
8,018
3,627
4,061
4,921
784
2,742
1,119
750
178
490
(1,926)
700
(1,556)
12,369
11,648
10,658
12,609
4,645 (4)
1,418 (6)
(2,782)
34,675
(1) Figures restated retrospectively to reflect the new IFRS 11 and IFRS 32, as well as the impact of the completion of the purchase price allocation process for the
assets acquired and liabilities assumed in the acquisitions of a number of companies of the Renewable Energy Division. For more details, please see note 4.
(2) Of which €6 million regarding units classified as “held for sale”.
(3) Of which €194 million regarding units classified as “held for sale”.
(4) Of which €1 million regarding units classified as “held for sale”.
(5) Of which €26 million regarding units classified as “held for sale”.
(6) Of which €8 million regarding units classified as “held for sale”.
The following table reconciles segment assets and liabilities and the consolidated figures.
Millions of euro
Total assets
Equity investments accounted for using the equity method
Non-current financial assets
Long-term tax receivables included in “Other non-current assets”
Current financial assets
Derivatives
Cash and cash equivalents
Deferred tax assets
Tax receivables
Financial and tax assets of “Assets held for sale”
Segment assets
Total liabilities
Long-term borrowings
Short-term borrowings
Current portion of long-term borrowings
Current financial liabilities
Derivatives
Deferred tax liabilities
Income tax payable
Other tax payables
Financial and tax liabilities of “Liabilities held for sale
Segment liabilities
at Dec. 31, 2014
at Dec. 31, 2013 restated
166,634
163,865
872
3,645
501
3,984
6,835
13,088
7,067
1,547
2,161
1,372
5,970
476
5,607
3,134
7,873
6,186
1,709
15
126,934
131,523
115,489
48,655
3,252
5,125
1,177
7,882
9,220
253
887
2,477
36,561
111,033
50,905
2,484
4,658
1,100
5,156
10,795
286
963
11
34,675
183
Revenue
7.a Revenue from sales and services - €73,328 million
Millions of euro
Revenue from the sale of electricity
Revenue from the transport of electricity
Fees from network operators
Transfers from the Electricity Equalization Fund and similar
bodies
Revenue from the sale of natural gas
Revenue from the transport of natural gas
Revenue from fuel sales
Connection fees to electricity and gas networks
Revenue from the sale of environmental certificates
Revenue from other sales and services
Total
2014
2013 restated
Change
48,062
9,142
783
1,857
3,628
459
5,659
843
1,238
1,657
73,328
53,417
(5,355)
-10.0%
9,612
855
1,620
3,962
490
2,635
998
345
1,493
75,427
(470)
(72)
237
(334)
(31)
3,024
(155)
893
164
(2,099)
-4.9%
-8.4%
14.6%
-8.4%
-6.3%
114.8%
-15.5%
-
11.0%
-2.8%
Revenue from the sale of electricity amounted to €48,062
sfers of about €217 million, which were granted under the
million (€53,417 million in 2013) and include sales of elec-
new regulatory framework for the extra-peninsular areas of
tricity to end users amounting to €29,933 million (€31,595
Spain.
million in 2013), sales of electricity to wholesale buyers tota-
Revenue from the sale of natural gas amounted to €3,628
ling €14,428 million (€17,314 million in 2013) and revenue
million (€3,962 million in 2013), including sales to end users
from electricity trading activities amounting to €3,701 mil-
in Italy of €1,632 million and sales to end users abroad of
lion (€4,508 million in 2013). The decrease is attributable to
€1,996 million.
the decline in quantities sold to end users and to wholesale
“Revenue from fuel sales” amounted to €5,659 million, and
buyers, owing to the contraction in electricity demand in the
in 2014 comprised sales of natural gas of €5,536 million
main countries in which the Group operates.
(€2,161 million in 2013) and sales of other fuels amounting
Revenue from the transport of electricity declined by €470
to €123 million (€474 million in 2013). The sharp rise with
million, largely due to the same developments described
respect to the previous year reflects market trends, which in
above. Revenue from the transport of gas amounted to
penalizing the use of fuels for power generation prompted
€459 million, down €31 million compared with the previous
an increase in sales of fuel.
year.
“Revenue from the sale of environmental certificates” incre-
Transfers from the Electricity Equalization Fund and similar
ased by €893 million largely due to a rise in sales of envi-
bodies rose by €237 million, mainly due to a rise in tran-
ronmental certificates and CO2 emissions allowances.
184
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS The table below gives a breakdown of revenues from sales and services by geographical area.
Millions of euro
Italy
Europe
Iberian peninsula
France
Switzerland
Germany
Austria
Slovenia
Slovakia
Romania
Greece
Bulgaria
Russia
Other European countries
Americas
United States
Canada
Mexico
Brazil
Chile
Peru
Colombia
Argentina
Other South American countries
Other
Africa
Asia
Total
2014
28,567
20,378
1,375
711
3,154
4
22
1,367
1,046
61
8
1,336
4,607
455
-
135
3,100
2,820
1,034
2,087
453
158
1
449
73,328
2013 restated
32,451
20,836
1,498
707
3,245
9
20
1,406
1,152
82
8
1,637
2,249
307
8
129
2,818
2,666
950
1,930
650
460
-
209
75,427
7.b Other revenue and income - €2,463 million
Millions of euro
Operating grants
Grants for environmental certificates
Capital grant (electricity and gas business)
Sundry reimbursements
Gains on disposal of interests in subsidiaries, associates, joint
ventures, joint operations and non-current assets held for
sale
Gains on remeasurement at fair value after changes in
control
Gains on disposal of property, plant and equipment and
intangible assets
Service continuity bonuses
Other revenue
Total
2014
2013 restated
Change
13
923
12
132
292
82
32
76
901
2,463
25
822
48
183
943
21
38
96
1,060
3,236
(12)
101
(36)
(51)
-48.0%
12.3%
-75.0%
-27.9%
(651)
-69.0%
61
(6)
(20)
(159)
(773)
-
-15.8%
-20.8%
-15.0%
-23.9%
“Grants for environmental certificates” increased by €101
ses incentives granted to renewable generation plants or for
million compared with the previous year. The item compri-
energy efficiency initiatives.
185
“Sundry reimbursements” regard sundry reimbursements
“Gains on remeasurement at fair value after changes in con-
from customers and suppliers totaling €86 million (€76 mil-
trol” amounted to €82 million. They include the remeasu-
lion in 2013) and insurance indemnities in the amount of
rement at fair value of the assets and liabilities pertaining
€46 million (€107 million in 2013).
to the Group: after the loss of control, as from January 1,
Gains on disposal of interests in companies amounted to €292
2014, of SE Hydropower following changes in governance
million in 2014, down €651 million on 2013, mainly due to the
arrangements (€50 million); already held by Enel prior to the
impact of the proceeds from the disposal of Artic Russia (€964
acquisition of full control of Inversiones Gas Atacama (€29
million) in 2013. Gains in 2014 were mainly accounted for by
million) and Buffalo Dunes Wind Project (€3 million).
the following: €123 million from the disposal of the interest
in LaGeo (a company operating in the geothermal genera-
The decrease in “Other revenue” is mainly due to the impact
tion sector in El Salvador), €82 million from the adjustment of
in 2013 of the government grant to the Argentine distribu-
the price for Artic Russia under the earn-out clause in the sale
tion company Edesur with Resolución 250/2013 under the
agreement with the buyer prior to the closing and €31 million
Mecanismo de Monitoreo de Costos.
from the sale of 100% of Enel Green Power France.
Costs
8.a Electricity, gas and fuel purchases - €36,928 million
Millions of euro
Electricity
Gas
Nuclear fuel
Other fuels
Total
2014
2013 restated
Change
23,317
27,325
8,388
206
5,017
6,141
202
5,286
(4,008)
2,247
4
(269)
36,928
38,954
(2,026)
-14.7%
36.6%
2.0%
-5.1%
-5.2%
Purchases of electricity comprise those from the Acquirente
Purchases of gas increased by €2,247 million, largely due to
Unico (Single Buyer) in the amount of €4,395 million (€5,135
an increase in intermediation activities on the fuel market.
million in 2013) and purchases from the Energy Markets
Purchases of nuclear fuel were virtually unchanged from the
Operator (GME) in the amount of €1,690 million (€4,451
previous year.
million in 2013). The decrease in the aggregate mainly re-
Purchases of other fuels diminished by €269 million to
gards the reduction in costs for electricity purchases on elec-
€5,017 million in 2014.
tricity exchanges and on national and international markets,
essentially due to the decline in demand.
186
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS 8.b Services and other materials - €17,179 million
Millions of euro
Transmission and transport
Maintenance and repairs
Telephone and postal costs
Communication services
IT services
Leases and rentals
Other services
Other materials
Total
2014
8,979
1,301
221
115
305
609
3,374
2,275
17,179
2013 restated
Change
9,274
1,331
252
118
264
585
3,324
1,550
16,698
(295)
(30)
(31)
(3)
41
24
50
725
481
-3.2%
-2.3%
-12.3%
-2.5%
15.5%
4.1%
1.5%
46.8%
2.9%
Costs for services and other materials amounted to €17,179
This rise was only partly offset by a reduction in costs for
million in 2014, an increase on 2013 due largely to a rise in
transmission and transport associated with the decline in
costs for the purchase of other materials, including, among
electricity consumption in the main markets in which the
other things, the change in stocks of CO2 emissions allowan-
ces and environmental certificates.
Group operates.
8.c Personnel - €4,864 million
Millions of euro
Wages and salaries
Social security contributions
Post-employment benefits
Other long-term benefits
Early retirement incentives
Other costs
Total
2014
3,329
931
111
70
313
110
4,864
2013 restated
Change
3,368
913
117
(898)
955
100
4,555
(39)
18
(6)
968
(642)
10
309
-1.2%
2.0%
-5.1%
-
-67.2%
10.0%
6.8%
Personnel costs amounted to €4,864 million in 2014, an in-
at the end of 2013, given that no employees had participa-
crease of €309 million.
ted and a significant number of those entitled to do so had
The workforce contracted by 1,381, reflecting the balance
subsequently opted to participate in the mechanism provi-
between hirings and terminations (a decrease of 1,404),
ded for under Article 4 of Law 92/2012. For more details on
only partially offset by the increase associated with the
employee benefit plans, please see note 33 below.
change in the scope of consolidation (an increase of 23 em-
“Early retirement incentives” amounted to €313 million in
ployees).
2014, net of amounts reversed, and mainly regard the early
retirement plan introduced in Spain and, to a lesser extent,
The decrease in “Other long-term benefits” largely reflects
an early retirement plan in Italy. In 2013, the aggregate had
the termination of the transition-to-retirement plan in Italy
mainly reported accruals recognized in Italy in respect of the
187
mechanism adopted in agreements with the unions to im-
The table below shows the average number of employees
plement the provisions of Article 4, paragraphs 1-7 ter, of
by category compared with the previous year, and the ac-
Law 92/2012 (the Fornero Act).
tual number of employees at December 31, 2014.
Senior managers
Middle managers
Office staff
Blue collar
Total
Average number (1)
Headcount (1)
2014
1,552
14,263
38,224
16,709
70,748
2013
1,374
14,552
39,833
17,224
72,983
Change
at Dec. 31, 2014 (2)
178
(289)
(1,609)
(515)
(2,235)
1,538
14,399
37,508
15,516
68,961
(1) For companies consolidated on a proportionate basis, the headcount corresponds to Enel percentage share of the total.
(2) Of which 4,430 in units classified as “held for sale”.
8.d Depreciation, amortization and impairment losses - €12,670
million
Millions of euro
Depreciation
Amortization
Impairment losses
Reversals of impairment losses
Total
2014
4,433
771
7,733
(267)
12,670
2013 restated
Change
4,520
806
1,851
(226)
6,951
(87)
(35)
5,882
(41)
5,719
-1.9%
-4.3%
-
-18.1%
82.3%
“Depreciation and amortization” decreased by €122 million
of nuclear power plants and conventional thermal plants in
in 2014 (comprising property, plant and equipment and in-
Spain and Slovakia.
tangible assets), partly due to the extension of the useful life
Millions of euro
Impairment losses
Property, plant and equipment
Investment property
Intangible assets
Goodwill
Trade receivables
Assets classified as held for sale
Other assets
Total impairment losses
Reversals of impairment losses
Property, plant and equipment
Trade receivables
Other assets
Total reversals of impairment losses
188
2014
2013 restated
Change
2,886
18
744
194
997
2,878
16
7,733
3
250
14
267
159
12
46
745
862
14
13
1,851
6
216
4
226
2,727
6
698
(551)
135
2,864
3
5,882
(3)
34
10
41
-
50.0%
-
-74.0%
15.7%
-
23.1%
-
-50.0%
15.7%
-
18.1%
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS “Impairment losses” increased by €5,882 million on 2013.
of the losses recognized on assets held for sale in their
Impairment losses on property, plant and equipment mainly
valuation under IFRS 5;
regarded:
> the property, plant and equipment of Enel Green Power
> thermal power plants in Italy in the amount of €2,096
Hellas in the amount of €91 million.
million, in view of the continuing economic crisis in Italy
and the impact of that crisis on conventional power
Impairment losses on intangible assets amounted to €744
generation. The model used in the impairment testing
million. They mainly regarded:
was a unlevered discounted cash flow (DCF) approach
> the water rights held by Endesa Chile to use the water of
applied to pre-tax amounts, with a time horizon based
a number of rivers in the Aysén region of that country in
on an explicit period of five years plus a terminal value
the amount of €589 million. The loss was recognized in
calculated as a perpetuity with stable growth. The as-
reflection of the uncertainty concerning the continuation
sumptions concerning the growth rate and the discount
of the project owing to a number of legal and procedural
rate were analogous to those adopted for other CGUs.
restrictions;
In particular, the growth rate, which was determined
> concessions and similar rights of Enel Green Power Hellas
on the basis of the average forecasts for medium/long-
in the amount of €55 million;
term electricity demand, was set at 1.1%, while the
> a number of smaller concessions in Portugal (HidroMon-
discount rate was determined as the pre-tax WACC of
dego in the amount of €35 million) and Spain (Distribui-
8.8%.
dora Eléctrica del Puerto de la Cruz in the amount of €31
> power plants in Russia in the amount of €205 million, in
million).
view of market forecasts for that country. The parameters
used in the impairment test were the same as those used
Impairment losses on goodwill were recognized following
for the Enel Russia CGU discussed in note 18 below;
the impairment tests. More details are provided in note 18.
> leased assets in Slovakia, in particular the Gabčíkovo
hydroelectric plant in the amount of €103 million, fol-
Finally, impairment losses on assets classified as held for
lowing the renegotiation that brought forward the ex-
sale amounted to €2,878 million. They regard the property,
piry of the contract to 2015, from its original expiration
plant and equipment and goodwill of Slovenské elektrár-
date of 2036. The impairment loss was recognized in
ne. The impairment loss was determined on the basis of
advance of the date on which the intention of manage-
the non-binding offers received so far to align the carrying
ment to continue the disposal of the Slovakian assets was
amount of its assets with their estimated realizable value,
definitively confirmed. Accordingly, it does not form part
net of transaction costs.
189
8.e Other operating expenses - €2,362 million
Millions of euro
Provisions for risks and charges
System charges - emissions allowances
System charges - energy efficiency certificates
System charges - green certificates
Losses on disposal of property, plant and equipment and
intangible assets
Taxes and duties
Other
Total
2014
2013 restated
Change
66
341
105
144
21
1,275
410
2,362
80
335
295
270
40
1,466
335
2,821
(14)
6
(190)
(126)
(19)
(191)
75
(459)
-17.5%
1.8%
-64.4%
-46.7%
-47.5%
-13.0%
22.4%
-16.3%
Other operating expenses amounted to €2,362 million, a
duties, largely reflecting developments in taxes to support
decrease of €459 million, mainly due to a reduction of €190
government social programs. These changes were partly
million in charges on white certificates and a decline of €126
offset by the increase in other expenses, mainly associated
million in costs for the purchase of green certificates. Ano-
with the electricity business in Spain.
ther factor was the decrease of €191 million in taxes and
8.f Capitalized costs - €(1,524) million
Millions of euro
Personnel
Materials
Other
Total
2014
(719)
(391)
(414)
2013 restated
Change
(713)
(365)
(356)
(6)
(26)
(58)
(90)
-0.8%
-7.1%
-16.3%
-6.3%
(1,524)
(1,434)
Capitalized costs consist of €719 million in personnel costs and €391 million in materials costs (compared with €713 million
and €365 million, respectively, in 2013).
190
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS 9. Net income/(expense) from commodity contracts measured
at fair value - €(225) million
Net expense on commodity contracts measured at fair va-
2014 in the amount of €268 million (€114 million in 2013)
lue amounted to €225 million, the result of net unrealized
and net realized gains on positions closed during the year
expense on open positions in derivatives at December 31,
of €43 million (€264 million in net expense in 2013).
Millions of euro
Income
Unrealized on positions open at the end of the period
Realized on positions closed during the period
Total income
Charges
Unrealized on positions open at the end of the period
Realized on positions closed during the period
Total charges
NET INCOME/(EXPENSE) FROM COMMODITY CONTRACTS
MEASURED AT FAIR VALUE
2014
2013 restated
Change
4,455
3,793
8,248
(4,723)
(3,750)
(8,473)
1,815
3,966
5,781
(1,929)
(4,230)
(6,159)
2,640
(173)
2,467
(2,794)
480
(2,314)
-
-4.4%
42.7%
-
-11.3%
37.6%
(225)
(378)
153
-40.5%
10. Net financial income/(expense) from derivatives - €1,162
million
Millions of euro
Income from derivatives:
- income from cash flow hedge derivatives
- income from derivatives at fair value through profit or loss
- income from fair value hedge derivatives
Total income from derivatives
Expense on derivatives:
- expense on cash flow hedge derivatives
- expense on derivatives at fair value through profit or loss
- expense on fair value hedge derivatives
Total expense from derivatives
TOTAL FINANCIAL INCOME/(EXPENSE) FROM
DERIVATIVES
2014
2013 restated
Change
1,532
468
78
2,078
434
476
6
916
232
454
70
756
803
397
10
1,300
14
8
1,322
(369)
79
(4)
1,210
(294)
-
3.1%
11.4%
-
-46.0%
19.9%
-40.0%
-24.3%
1,162
(454)
1,616
-
Net income from cash flow hedge derivatives amounted to
For more details on derivatives, please see note 43 “Derivati-
€1,098 million, while derivatives at fair value through profit
ves and hedge accounting”.
or loss posted net expense of €8 million.
By contrast, the net performance of fair value hedge deriva-
tives produced net income of €72 million.
191
11. Net other financial income/(expense) - €(4,292) million
Other financial income
Millions of euro
Interest income from financial assets (current and non-
current):
- interest income at effective interest rate on non-current
securities and receivables
- interest income at effective interest rate on short-term
financial investments
Total interest income at the effective interest rate
Financial income on non-current securities at fair value
through profit or loss
Positive exchange rate differences
Income on equity investments
Other income
2014
2013 restated
Change
43
217
260
6
529
4
449
57
292
349
3
846
86
409
(14)
(75)
(89)
3
(317)
(82)
40
(445)
-24.6%
-25.7%
-25.5%
-
-37.5%
-95.3%
9.8%
-26.3%
TOTAL OTHER FINANCIAL INCOME
1,248
1,693
“Other financial income” amounted to €1,248 million, a de-
results posted in 2013 owing to the disposal of Medgaz
crease of €445 million compared with the previous year. The
(€64 million) and Endesa Gas T&D (€12 million);
reduction reflects:
> a decrease of €89 million in interest income at the effecti-
> a decrease in positive exchange rate differences, mainly
ve interest rate, mainly attributable to deposits.
reflecting the impact of developments in exchange rates
These factors were partly offset by an increase of €40 million
on net financial debt denominated in currencies other
in other income, which included the impact of the renego-
than the euro;
tiation of the finance lease for the Gabčíkovo hydroelectric
> a decrease in income on equity investments to €4 million
plant in Slovakia, which brought forward the expiration of
(€86 million in 2013). The decline is due to the strong
the lease to 2015, from the original 2036.
Other financial expense
Millions of euro
Interest expense on financial debt
(current and non-current):
- interest expense on bank borrowings
- interest expense on bonds
- interest expense on other borrowings
Total interest expense
Expense on securities at fair value through profit or loss
Negative exchange rate differences
Accretion of post-employment and other employee
benefits
Accretion of other provisions
Charges on equity investments
Other charges
2014
2013 restated
Change
360
2,476
116
2,952
-
1,814
197
200
3
374
543
2,170
107
2,820
-
580
161
202
7
273
(183)
306
9
132
-
1,234
36
(2)
(4)
101
1,497
-33.7%
14.1%
8.4%
4.7%
-
-
22.4%
-1.0%
-57.1%
37.0%
37.0%
TOTAL OTHER FINANCIAL EXPENSE
5,540
4,043
192
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS “Other financial expense” amounted to €5,540 million, an
on cash flow hedge derivatives on exchange rates;
increase of €1,497 million on 2013. The change reflects the
> other charges, which amounted to €374 million in 2014
following factors:
(€273 million in 2013), reflecting the effect of the rever-
> an increase in interest expense, largely owing to an incre-
sal in 2013 of the impairment loss on the receivable in
ase in gross financial debt compared with 2013;
respect of the National Nuclear Fund in Slovakia (€66 mil-
> an increase of €1,234 million in negative exchange rate
lion) and the impairment adjustment of financial assets
differences, attributable to the depreciation of the euro
(€92 million) associated with service concession arrange-
against the other currencies in which bonds are issued.
ments as a result of the rate revision affecting the Brazi-
This factor was essentially offset by an increase in income
lian companies Ampla and Coelce in 2014.
12. Share of income/(losses) of equity investments accounted
for using the equity method - €(35) million
Millions of euro
Share of income of associates
Share of losses of associates
Impairment losses
Total
2014
2013 restated
Change
229
(87)
(177)
(35)
306
(89)
-
217
(77)
(177)
(252)
-25.2%
-2.2%
-
-
The share of income and losses of equity investments ac-
tainty concerning the development of the project to build
counted for using the equity method decreased by €252
a hydroelectric plant in Chile) and the effects of the impai-
million compared with the previous year. The contraction
rment testing of the Enel Green Power Hellas CGU with re-
was largely attributable to the impairment loss on the in-
gard to the “Elica 2” equity-accounted investments as a re-
vestment in Centrales Hydroaysén (as a result of the uncer-
sult of the persistent adverse economic climate.
13. Income taxes - €(850) million
Millions of euro
Current taxes
Adjustments for income taxes related to prior years
Total current taxes
Deferred tax liabilities/(assets)
Total
2014
1,968
(119)
1,849
(2,699)
(850)
2013 restated
Change
2,371
(177)
2,194
179
2,373
(403)
58
(345)
(2,878)
(3,223)
-17.0%
-32.8%
-15.7%
-
-
Income taxes for 2014 showed a credit position of €850 mil-
with the extraordinary corporate transactions involving
lion, compared with a liability of €2,373 million in 2013.
Endesa in the last Quarter of 2014;
Of the total change, €3,018 million is attributable to the de-
> the deferred tax benefit in respect of the impairment
cline in deferred taxation compared with the previous year,
losses on property, plant and equipment and intangible
mainly reflecting:
assets other than goodwill, recognized following impai-
> the recognition of deferred tax assets of €1,392 million
rment testing at the end of the year;
in respect of Enel Iberoamérica (formerly Enel Energy Eu-
> the deferred tax impact of changes in tax rates, which gene-
rope) following the distribution of dividends associated
rated a net benefit of €138 million, broken down as follows:
193
- a reduction of €747 million in taxes in Spain as a result
ther the conditions that prompted its introduction per-
of the reduction in the tax rate enacted by the Spanish
sist;
government in December 2014 from the existing 30%
c) it is a tax that is not designed to protect consumers, gi-
to 28% in 2015 and 25% in 2016;
ven that the prohibition on passing its cost on through
- a reduction of €69 million in taxes in Peru following the
consumer prices is difficult to enforce effectively.
progressive reduction in the rate from the current 30%
The Court also specified that the ruling would take effect
to 26% in 2019;
as from the day following publication of the decision in the
- an increase of €288 million in taxes in Chile with the
Gazzetta Ufficiale. Accordingly, in preparing these financial
progressive rise in the tax rate from 20% to 27%;
statements, deferred taxes were calculated on the basis of
- an increase of €24 million in taxes in Colombia as a re-
the rates that are expected to apply at the time of reversal
sult of the temporary increase in the tax rate from 34%
(excluding the Robin Hood Tax).
to 43% until 2018;
As regards current taxes, the main changes compared with
- an increase of €366 million in taxes due to the
the previous year were:
adjustment of deferred taxation in Italy following a
> the benefit of the reduction from 10.5% to 6.5% in the
court ruling that the IRES surtax (the so-called Robin
rate for the IRES surtax applicable in 2014 to a number of
Hood Tax) was unconstitutional following a long-run-
Italian companies;
ning administrative proceeding.
> the effect of losses on goodwill recognized in 2013 and
With its decision 10 of February 11, 2015, the Constitutional
2014 with no corresponding tax benefit.
Court ruled that the “Robin Hood Tax” was unconstitutional,
because:
The following table reconciles the theoretical tax rate with
a) it is levied on all entrepreneurial income rather than
the effective tax rate. Please note that the estimated taxes
just “windfall profits”;
of Group companies outside of Italy were a negative €1,885
b) it is a structural tax, as there is no temporal limit to its
million (compared with €861 million in 2013).
scope of application or mechanisms to determine whe-
Millions of euro
Income before taxes
Theoretical taxes
Theoretical tax effect on impairment losses on goodwill
Tax credit from distribution of Endesa dividends
Impact on deferred taxation of changes in tax rates
IRES surtax (Decree Law 112/2008)
IRAP
Other differences, effect of different foreign tax rates, and minor items
Total
2014
(78)
(21)
245
(1,392)
(146)
188
320
(44)
(850)
2013 restated
7,153
1,967
205
-
-
353
336
(488)
2,373
194
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS
14. Basic and diluted earnings per share
Both metrics are calculated on the basis of the average num-
shares, adjusted for the diluting effect of outstanding stock
ber of ordinary shares in the period, equal to 9,403,357,795
options (none in both periods).
Millions of euro
2014
2013 restated
Change
Net income from continuing operations attributable to
shareholders of the Parent Company (millions of euro)
Net income from discontinued operations attributable to
shareholders of the Parent Company (millions of euro)
Net income attributable to shareholders of the Parent
Company (millions of euro)
Number of ordinary shares
Dilutive effect of stock options
Basic and diluted earnings per share (euro)
Basic and diluted earnings from continuing operations per
share (euro)
Basic and diluted earnings from discontinued operations per
share (euro)
517
-
517
3,235
(2,718)
-84.0%
-
-
-
3,235
(2,718)
-84.0%
9,403,357,795
9,403,357,795
-
0.05
0.05
-
-
0.34
0.34
-
-
-
(0.30)
(0.30)
-
-
-
-87.2%
-86.9%
-
Please note that existing stock option plans for top mana-
tion of the financial statements, no events or transactions
gement could dilute basic earnings per share in the future.
took place that changed the number of ordinary shares or
For more information on those plans, please see the appro-
potential ordinary shares in circulation at the end of the
priate section of these notes.
year.
Between the balance sheet date and the date of publica-
195
15. Property, plant and equipment - €73,089 million
Changes in property, plant and equipment for 2014 are shown below.
Buildings
Plant and machinery
Industrial and commercial
equipment
Other assets
Leased assets
Leasehold improvements
Assets
under construction
and advances
11,084
5,685
5,399
109
299
(300)
(10)
(16)
(191)
(721)
-
42
-
(802)
(1,590)
8,711
4,902
3,809
147,619
83,518
64,101
1,189
2,969
(333)
14
(26)
(4,036)
(1,636)
3
150
50
(1,525)
(3,181)
144,890
83,970
60,920
442
352
90
18
2
-
-
(1)
(19)
(7)
-
-
-
(9)
(16)
386
312
74
1,414
1,133
281
46
47
(1)
1
(4)
(92)
(4)
29
-
-
(13)
9
1,332
1,042
290
1,179
215
964
13
(1)
7
43
(54)
(105)
-
-
-
-
(2)
(99)
1,092
227
865
284
181
103
38
7
-
4
(1)
(23)
-
-
3
-
-
28
332
201
131
8,764
8,764
4,631
(3,389)
(202)
330
(12)
(381)
208
(3,507)
(2,322)
6,442
6,442
-
-
-
-
-
Total
171,347
91,084
80,263
6,019
-
(831)
392
(60)
(4,415)
(2,886)
3
427
50
(5,873)
(7,174)
163,743
90,654
73,089
Millions of euro
Cost
Accumulated depreciation
Balance at Dec. 31, 2013 restated
Capital expenditure
Assets entering service
Exchange rate differences
Change in scope of consolidation
Disposals
Depreciation
Impairment losses
Reversals of impairment losses
Other changes
Remeasurement at fair value after
changes in control
Reclassification from/to “Assets held
for sale”
Total changes
Cost
Accumulated depreciation
Balance at Dec. 31, 2014
Land
561
-
561
6
35
(2)
10
-
-
(32)
-
(5)
-
(15)
(3)
558
-
558
196
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS 15. Property, plant and equipment - €73,089 million
Changes in property, plant and equipment for 2014 are shown below.
Millions of euro
Cost
Accumulated depreciation
Balance at Dec. 31, 2013 restated
Capital expenditure
Assets entering service
Exchange rate differences
Change in scope of consolidation
Disposals
Depreciation
Impairment losses
Reversals of impairment losses
Other changes
Remeasurement at fair value after
changes in control
Reclassification from/to “Assets held
for sale”
Total changes
Cost
Accumulated depreciation
Balance at Dec. 31, 2014
Land
561
-
561
6
35
(2)
10
-
-
-
-
-
(32)
(5)
(15)
(3)
558
558
11,084
5,685
5,399
109
299
(300)
(10)
(16)
(191)
(721)
42
-
-
(802)
(1,590)
8,711
4,902
3,809
147,619
83,518
64,101
1,189
2,969
(333)
14
(26)
(4,036)
(1,636)
3
150
50
(1,525)
(3,181)
144,890
83,970
60,920
442
352
90
18
(1)
(19)
(7)
2
-
-
-
-
-
(9)
(16)
386
312
74
Buildings
Plant and machinery
equipment
Other assets
Leased assets
Leasehold improvements
Industrial and commercial
Assets
under construction
and advances
1,414
1,133
281
46
47
(1)
1
(4)
(92)
(4)
-
29
-
(13)
9
1,332
1,042
290
1,179
215
964
13
(1)
7
43
-
(54)
(105)
-
-
-
(2)
(99)
1,092
227
865
284
181
103
7
38
-
4
(1)
(23)
-
-
3
-
-
28
332
201
131
8,764
-
8,764
4,631
(3,389)
(202)
330
(12)
-
(381)
-
208
-
(3,507)
(2,322)
6,442
-
6,442
Total
171,347
91,084
80,263
6,019
-
(831)
392
(60)
(4,415)
(2,886)
3
427
50
(5,873)
(7,174)
163,743
90,654
73,089
197
“Plant and machinery” includes assets to be relinquished
For more information on “leased assets”, please see note 15.2
free of charge with a net carrying amount of €8,269 million
below.
(€9,864 million at December 31, 2013), largely regarding
power plants in the Iberian peninsula and Latin America
The table below summarizes capital expenditure in 2014 by
amounting to €4,820 million (€5,120 million at December 31,
category. These expenditures, totaling €6,019 million, increa-
2013) and the electricity distribution network in Latin Ame-
sed by €712 million on 2013.
rica totaling €3,027 million (€3,170 million at December 31,
2013).
Millions of euro
Power plants:
- thermal
- hydroelectric
- geothermal
- nuclear
- alternative energy resources
Total power plants
Electricity distribution networks
Land, buildings and other assets and equipment
TOTAL
2014
2013 restated
884
656
169
787
1,256
3,752
2,115
152
6,019
732
553
226
722
928
3,161
2,012
134
5,307
Capital expenditure on power plants amounted to €3,752
Renewable Energy Division. These factors were partly offset
million, an increase of €591 million compared with the pre-
(€62 million) by the change in control of SE Hydropower, un-
vious year, largely reflecting increased investment in hydro-
der the sale agreements signed in 2010, which prompted a
electric facilities and other renewable generation plants
change in the method of accounting for the entity from full
by the Renewable Energy Division, as well as greater in-
line-by-line consolidation to equity accounting (as it quali-
vestment in conventional thermal plants and nuclear power
fied as a joint operation); and by the disposal, on December
plants abroad.
18, 2014, of the subsidiary Enel Green Power France, a rene-
Capital expenditure for the electricity distribution network
wables generator in France (€230 million).
amounted to €2,115 million, up €103 million compared
with the previous year. The increase is essentially attributa-
“Impairment losses” on property, plant and equipment
ble to greater investment in the medium- and low-voltage
amounted to €2,886 million. For a more detailed analysis,
grids in Spain.
please see note 8.d.
The “Change in scope of consolidation” for the period
“Remeasurement at fair value after changes in control”
mainly concerned the acquisitions of control of the Chilean
amounted to €50 million. It is entirely accounted for by the
company Inversiones Gas Atacama, which operates in the
hydroelectric plants of SE Hydropower, which were reva-
natural gas transport and power generation sectors (€255
lued to the extent of the holding already held following the
million), Buffalo Dunes Wind Project, a wind power com-
Group’s loss of control over the company and before their
pany (€334 million), and other smaller acquisitions of the
reclassification to “Assets held for sale”.
198
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS “Other changes” include, among other items, the effect of
expenditure in the amount of €196 million (€128 million in
the capitalization of interest on specific loans for capital
2013), as detailed in the following table.
Millions of euro
Enel Green Power
Latin America
Eastern Europe
Iberia
Italy
Total
2014
% rate
2013 restated
59
75
41
6
15
196
4.8%
14.8%
2.6%
3.0%
5.0%
36
45
31
3
13
128
% rate
4.7%
12.8%
2.7%
3.1%
5.5%
Change
23
30
10
3
2
68
39.0%
40.0%
24.4%
50.0%
13.3%
34.7%
“Reclassification from/to ‘Assets held for sale’” essential-
At December 31, 2014, contractual commitments to pur-
ly reports the property, plant and equipment of Slovenské
chase property, plant and equipment amounted to €501
elektrárne, SE Hydropower and other smaller companies,
million.
which in view of the decisions taken by management meets
the requirements of IFRS 5 for classification as assets held
for sale.
15.1 Infrastructure within the scope of IFRIC 12 “Service concession
arrangements”
Service concession arrangements, which are recognized in ac-
The following table summarizes the salient details of those
cordance with IFRIC 12, regard certain infrastructure serving
concessions.
concessions for electricity distribution in Brazil.
Millions of euro
Grantor
Activity
Country
Concession
period
Concession
period
remaining
Renewal
option
Amount
recognized
among
financial
assets at Dec.
31, 2014
Amount
recognized
among
intangible
assets at
Dec. 31,
2014
Ampla Energia e
Serviços
Brazilian
government
Electricity
distribution
Companhia Energética
do Ceará
Brazilian
government
Electricity
distribution
Brazil
1997-2026
12 years
Brazil
1998-2028
13 years
Total
Yes
Yes
425
244
669
1,033
905
1,938
The value of the assets at the end of the concessions classi-
For more details, please see note 45 “Assets measured at
fied under financial assets has been measured at fair value.
fair value”.
199
15.2 Leases
The Group, in the role of lessee, has entered into finance lease
and a discount rate of between 4.95% and 5.5%.
agreements. They include certain assets which the Group is
In Latin America, the assets relate to leased power transmis-
using in Spain, France, Greece, Italy and Latin America. More
sion lines and plants (Ralco-Charrúa), with a residual term of
specifically, in Spain the assets relate to a 25-year “tolling”
nine years on the lease at a 6.5% rate, a lease of a combined-
contract for which an analysis pursuant to IFRIC 4 identified
cycle plant (Talara) with a term of nine years at a fixed rate of
an embedded finance lease, under which Endesa has access
5.8%, as well as a number of combined-cycle plants in Peru
to the generation capacity of a combined-cycle plant for
(residual lease term of two years bearing a floating rate).
which the toller, Elecgas, has undertaken to transform gas
into electricity in exchange for a toll at a rate of 9.62%. The
The carrying amount of assets held under finance leases is re-
other lease agreements regard wind plants that the Group
ported in the following table.
uses in Italy (with a term of 18 years expiring in 2030-2031)
Millions of euro
Property, plant and equipment
Intangible assets
Total
2014
2013 restated
Change
865
-
865
964
-
964
(99)
-
(99)
-10.3%
-
-10.3%
The following table reports total minimum lease payments and the related present value, broken down by maturity.
Millions of euro
Periods:
2015
2016-2019
beyond 2019
Total
Finance charges
Present value of minimum lease payments
Future minimum
payments
Present value of
future minimum
payments
Future minimum
payments
Present value of
future minimum
payments
at Dec. 31, 2014
at Dec. 31, 2013
102
398
750
1,250
(412)
838
62
250
526
838
126
461
994
1,581
(511)
1,070
77
295
698
1,070
The Group, in the role of lessee, has entered also into opera-
Costs for operating leases are broken down in the following
ting lease agreements regarding the use of certain assets for
table into minimum payments, contingent rents and suble-
industrial purposes. The associated lease payments are ex-
ase payments.
pensed under “Services and other materials” and amounted
to €274 million.
Millions of euro
Minimum lease payments
Contingent rents
Sublease payments
Total
200
2014
2,323
-
27
2,350
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS The future minimum lease payments due by the Group under such leases break down by maturity as follows.
Millions of euro
Periods:
within 1 year
beyond 1 year and within 5 years
beyond 5 years
Total
16. Investment property - €143 million
Investment property at December 31, 2014 amounted to €143 million, a decrease of €38 million for the year.
Millions of euro
Cost
Accumulated depreciation
Balance at Dec. 31, 2013 restated
Acquisitions
Entry into service
Exchange rate differences
Change in scope of consolidation
Depreciation
Impairment losses
Reversals of impairment losses
Other changes
Remeasurement at fair value after changes in control
Reclassification from/to “Assets held for sale”
Total changes
Cost
Accumulated depreciation
Balance at Dec. 31, 2014
265
1,000
1,058
2,323
2014
209
28
181
2
-
(2)
5
(8)
(18)
-
(16)
-
(1)
(38)
173
30
143
The Group’s investment property consists of properties in
lop investment property or for repairs, maintenance or en-
Italy, Spain and Chile, which are free of restrictions on the
hancements.
realizability of the investment property or the remittance of
For more details on the valuation of investment property,
income and proceeds of disposal. In addition, the Group has
please see notes 45 “Assets measured at fair value” and 45.1
no contractual obligations to purchase, construct or deve-
“Assets and associated fair value”.
201
17. Intangible assets - €16,612 million
Changes in intangible assets for 2014 are shown below.
Millions of euro
Cost
Accumulated
amortization
Balance at Dec. 31,
2013 restated
Capital expenditure
Assets entering service
Exchange rate
differences
Change in scope of
consolidation
Disposals
Amortization
Impairment losses
Other changes
Reclassification from/to
“Assets held for sale”
Total changes
Cost
Accumulated
amortization
Balance at Dec. 31,
2014
Development
costs
46
16
30
5
-
-
-
-
(6)
-
(20)
-
(21)
26
17
9
Industrial
patents
and intellectual
property rights
Concessions,
licenses,
trademarks and
similar rights
Service
concession
arrangements
2,515
15,871
3,671
Assets under
development
and advances
494
Other
1,626
Total
24,223
2,045
1,324
1,653
1,130
-
6,168
470
133
162
(3)
-
-
(274)
(1)
24
(7)
34
2,735
2,231
14,547
2,018
496
15
4
(140)
(274)
-
(182)
(624)
(2)
(221)
(1,424)
14,515
244
-
27
-
-
(202)
(20)
(129)
-
(80)
3,774
28
26
18
5
(8)
(101)
(61)
13
-
(80)
1,656
494
255
(192)
14
90
(1)
-
(38)
2
(2)
128
622
18,055
680
-
(84)
(179)
(9)
(765)
(744)
(112)
(230)
(1,443)
23,328
1,392
1,836
1,240
-
6,716
504
13,123
1,938
416
622
16,612
“Industrial patents and intellectual property rights” relate
de costs incurred by the gas companies and the foreign elec-
mainly to costs incurred in purchasing software and open-
tricity distribution companies to acquire customers. Amorti-
ended software licenses. The most important applications
zation is calculated on a straight-line basis over the average
relate to invoicing and customer management, the deve-
duration of the relationships with the customers acquired or
lopment of Internet portals and the management of com-
the concessions.
pany systems. Amortization is calculated on a straight-line
basis over the asset’s residual useful life (on average betwe-
The following table reports service concession arrange-
en three and five years).
ments that do not fall within the scope of IFRIC 12.
“Concessions, licenses, trademarks and similar rights” inclu-
Millions of euro
Grantor
Activity
Country
Concession
period
Concession
period
remaining
Renewal
option
at
Dec. 31, 2014
Initial fair
value
Endesa Distribución
Eléctrica
Codensa
-
Republic of
Colombia
Chilectra
Republic of Chile
Empresa de
Distribución Eléctrica de
Lima Norte
Enel Distributie
Muntenia
Republic of Peru
Romanian
Ministry for the
Economy
Electricity
distribution
Electricity
distribution
Electricity
distribution
Electricity
distribution
Electricity
distribution
Spain
Indefinite
Indefinite
5,679
5,673
Colombia
Indefinite
Indefinite
1,874
1,839
Chile
Indefinite
Indefinite
1,641
1,667
Peru
Indefinite
Indefinite
654
548
Romania
2005-2054
39 years
Yes
160
191
202
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS The item includes assets with an indefinite useful life in the
der the purchase agreements signed in 2010 (€276 million).
amount of €9,848 million (€9,995 million at December 31,
This factor was only partly offset by the expansion of the
2013), essentially accounted for by concessions for distribu-
scope of consolidation due to a number of acquisitions of
tion activities in Spain (€5,679 million), Colombia (€1,874
the Renewable Energy Division.
million), Chile (€1,641 million) and Peru (€654 million), for
“Impairment losses” amounted to €744 million in 2014; for
which there is no statutory or currently predictable expi-
more details, please see note 8.d.
ration date. On the basis of the forecasts developed, cash
flows for each of the electricity distribution concessions are
“Reclassification from/to ‘Assets held for sale’” largely re-
sufficient to recover the value of the intangible assets. For
gards the concession held by SE Hydropower, which in view
more information on “Service concession arrangements”,
of the decisions taken by management meets the require-
please see note 22.
ments of IFRS 5 for classification as assets held for sale.
The “Change in scope of consolidation” for the period
At December 31, 2014, contractual commitments for the ac-
mainly regards the change in control of SE Hydropower un-
quisition of intangible assets amounted to €13 million.
203
18. Goodwill - €14,027 million
“Goodwill” amounted to €14,027 million, a decrease of €940 million.
Millions of euro
at Dec. 31, 2013 restated
Change in scope
of consolidation
Exchange rate
differences
Impairment losses
“Assets held for sale”
at Dec. 31, 2014
Reclassification from/to
(160)
(34)
-
-
-
-
-
-
-
-
(697)
-
-
-
-
-
-
-
-
-
(194)
(697)
17,555
Cost Accumulated impairment
Net carrying amount
10,999
3,285
1,016
990
-
579
546
113
26
1
(2,392)
(1,016)
(119)
-
-
-
-
-
-
(1)
(3,528)
8,607
3,285
871
-
-
579
546
113
26
-
14,027
Endesa
Latin America
Enel Russia
Enel Green Power Group
Slovenské elektrárne
Enel Energia
Enel Distributie Muntenia
Enel Energie Muntenia
Nuove Energie
Enel Stoccaggi
Total
Cost
10,999
3,260
1,119
960
697
579
547
113
26
1
Accumulated
impairment
Net carrying
amount
(2,392)
-
(856)
(85)
-
-
-
-
-
(1)
8,607
3,260
263
875
697
579
547
113
26
-
18,301
(3,334)
14,967
-
25
-
(23)
-
-
-
-
-
-
2
-
-
(103)
53
-
-
(1)
-
-
-
(51)
The “Change in scope of consolidation” mainly regards the
mation available at the time of the estimate and drawn:
acquisition of control of Buffalo Dunes Wind Project (€7
> for the explicit period, from the 5-year business plan ap-
million) and Inversiones Gas Atacama (€25 million). These
proved by the Board of Directors of the Parent Company
factors were partly offset by the disposal of the subsidiary
containing forecasts for volumes, revenues, operating
Enel Green Power France (€29 million).
costs, capital expenditure, industrial and commercial
“Impairment losses” are recognized following impairment
organization and developments in the main macroe-
tests, as discussed below.
conomic variables (inflation, nominal interest rates and
exchange rates) and commodity prices. In the previous
“Reclassification from/to ‘Assets held for sale’” reports the re-
year, the time horizon considered in preparing the busi-
classification of the goodwill of the Slovenské elektrárne CGU,
ness plan was 10 years. The change was made to bring
which in view of the decisions taken by management meets the
policy in this area into line with international best practi-
requirements of IFRS 5 for classification as assets held for sale.
ce. More specifically the explicit period of cash flows con-
The criteria used to identify the cash generating units
sidered in impairment testing differs in accordance with
(CGUs) were essentially based (in line with management’s
the specific features and business cycles of the various
strategic and operational vision) on the specific characte-
CGUs being tested. These differences are generally asso-
ristics of their business, on the operational rules and regu-
ciated with the different average times needed to build
lations of the markets in which Enel operates and on the
and bring into service the plant and other works that cha-
corporate organization, as well as on the level of reporting
racterize the investments of the specific businesses that
monitored by management.
make up the CGU (conventional thermal generation, nu-
The recoverable value of the goodwill recognized was esti-
clear power, renewables, distribution, etc.);
mated by calculating the value in use of the CGUs using
> for subsequent years, from assumptions concerning long-
discounted cash flow models, which involve estimating ex-
term developments in the main variables that determine
pected future cash flows and applying an appropriate di-
cash flows, the average residual useful life of assets or the
scount rate, selected on the basis of market inputs such as
duration of the concessions.
risk-free rates, betas and market risk premiums.
More specifically, the terminal value was calculated as a
Cash flows were determined on the basis of the best infor-
perpetuity or annuity with a nominal growth rate equal to
204
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS 18. Goodwill - €14,027 million
“Goodwill” amounted to €14,027 million, a decrease of €940 million.
Endesa
Latin America
Enel Russia
Enel Green Power Group
Slovenské elektrárne
Enel Energia
Enel Distributie Muntenia
Enel Energie Muntenia
Nuove Energie
Enel Stoccaggi
Total
Cost
10,999
3,260
1,119
960
697
579
547
113
26
1
Accumulated
impairment
Net carrying
amount
(2,392)
(856)
(85)
-
-
-
-
-
-
(1)
8,607
3,260
263
875
697
579
547
113
26
-
25
(23)
-
-
-
-
-
-
-
-
2
(103)
53
(1)
-
-
-
-
-
-
-
Millions of euro
at Dec. 31, 2013 restated
Change in scope
of consolidation
Exchange rate
differences
Impairment losses
Reclassification from/to
“Assets held for sale”
at Dec. 31, 2014
Cost Accumulated impairment
Net carrying amount
-
-
(160)
(34)
-
-
-
-
-
-
-
-
-
-
(697)
-
-
-
-
-
10,999
3,285
1,016
990
-
579
546
113
26
1
18,301
(3,334)
14,967
(51)
(194)
(697)
17,555
(2,392)
-
(1,016)
(119)
-
-
-
-
-
(1)
(3,528)
8,607
3,285
-
871
-
579
546
113
26
-
14,027
the long-term rate of growth in electricity and/or inflation
scussed below.
(depending on the country and business involved) and in
In order to verify the robustness of the value in use of the
any case no higher than the average long-term growth rate
CGUs, sensitivity analyses were conducted for the main dri-
of the reference market. The value in use calculated as de-
vers of the values, in particular WACC and the long-term
scribed above was found to be greater than the amount
growth rate, the outcomes of which fully supported that
recognized on the balance sheet, with the exceptions di-
value.
205
The table below reports the composition of the main goodwill
along with the discount rates applied and the time horizon
values according to the company to which the CGU belongs,
over which the expected cash flows have been discounted.
Millions of euro
Amount
Growth rate (1)
Discount rate pre-tax
WACC (2)
Explicit period of
cash flows
Terminal value (3)
Amount
Growth rate (1)
WACC (2)
cash flows
Terminal value (3)
Discount rate pre-tax
Explicit period of
at Dec. 31, 2013
8,607
3,260
263
697
660
579
403
262
103
33
26
24
29
13
5
1
1.80%
-
1.20%
1.00%
2.40%
0.70%
2.00%
3.40%
2.10%
2.00%
0.70%
2.00%
1.90%
2.40%
3.00%
1.90%
8.40%
8.90%
12.20%
8.80%
9.90%
12.70%
7.90%
8.50%
7.70%
13.60%
9.90%
10.00%
7.60%
10.60%
8.20%
9.80%
10 years
10 years
10 years
10 years
10 years
10 years
5 years
5 years
5 years
10 years
10 years
10 years
5 years
10 years
10 years
5 years
Perpetuity
Perpetuity
Perpetuity
Perpetuity
Perpetuity
10 years
14 years
23 years
19 years
18 years
17 years
18 years
19 years
13 years
11 years
23 years
Endesa - Iberian peninsula (4)
Endesa - Latin America
Enel Russia
Slovenské elektrárne
Enel Romania (5)
Enel Energia
Enel Green Power España
Enel Green Power Latin America
Enel Green Power North America
Enel Green Power Hellas
Nuove Energie
Enel Green Power Italia
Enel Green Power France
Enel Green Power Romania
Enel Green Power Bulgaria
Enel Green Power South Africa
at Dec. 31, 2014
8,607
3,285
-
-
659
579
404
308
117
-
26
24
-
13
5
-
1.92%
2.67%
0.97%
2.07%
0.13%
2.00%
3.45%
2.17%
-
0.29%
2.00%
2.07%
2.50%
-
7.92%
8.48%
14.99%
7.90%
11.98%
7.90%
8.53%
7.46%
18.69%
8.98%
8.15%
8.26%
8.27%
-
5 years
5 years
5 years
5 years
5 years
5 years
5 years
5 years
5 years
10 years
Perpetuity
Perpetuity
Perpetuity
Perpetuity
15 years
13 years
22 years
20 years
21 years
16 years
5 years Perpetuity /14 years (6)
5 years
5 years
-
15 years
17 years
-
(1) Perpetual growth rate of cash flows after explicit period.
(2) Pre-tax WACC calculated using the iterative method: the discount rate that ensures that the value in use calculated with pre-tax cash flows is equal to that
calculated with post-tax cash flows discounted with the post-tax WACC.
(3) The terminal value has been estimated on the basis of a perpetuity or an annuity with a rising yield for the years indicated in the column.
(4) Goodwill includes the portion referring to Enel Green Power España.
(5) Includes all companies operating in Romania.
(6) The terminal value for Enel Green Power Italia was estimated on the basis of a perpetuity for the hydroelectric and geothermal plants and an expected
annuity with a rising yield for a period of 14 years for other renewables technologies (wind, solar, biomass).
At December 31, 2014, impairment testing of the CGU to
> €269 million on the Enel Green Power Hellas CGU, of
which goodwill had been allocated found the following im-
which €34 million attributed to goodwill and the remain-
pairment losses:
der to generation assets, the concessions and the deve-
> €365 million on the Enel Russia CGU (formerly Enel OGK-
lopment projects in the pipeline, originating in the conti-
5), of which €160 million attributed to goodwill and the
nuing adverse economic conditions, which have led to a
remainder to generation assets, originating in the ex-
substantial reduction in rate subsidies.
pected contraction in future income flows in view of the
continuing signs of economic slowdown and the conse-
At December 31, 2013, an impairment loss of €744 million
quent expected decrease in price growth in the medium
had been recognized on the Enel Russia CGU (formerly Enel
term;
OGK-5).
206
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS Millions of euro
Amount
Growth rate (1)
WACC (2)
cash flows
Terminal value (3)
Amount
Growth rate (1)
Discount rate pre-tax
Explicit period of
Discount rate pre-tax
WACC (2)
Explicit period of
cash flows
Terminal value (3)
Endesa - Iberian peninsula (4)
Endesa - Latin America
Enel Russia
Slovenské elektrárne
Enel Romania (5)
Enel Energia
Enel Green Power España
Enel Green Power Latin America
Enel Green Power North America
Enel Green Power Hellas
Nuove Energie
Enel Green Power Italia
Enel Green Power France
Enel Green Power Romania
Enel Green Power Bulgaria
Enel Green Power South Africa
at Dec. 31, 2014
8,607
3,285
-
-
659
579
404
308
117
26
24
-
-
13
5
-
1.92%
2.67%
0.97%
2.07%
0.13%
2.00%
3.45%
2.17%
0.29%
2.00%
2.07%
2.50%
-
-
7.92%
8.48%
14.99%
7.90%
11.98%
7.90%
8.53%
7.46%
18.69%
8.98%
8.15%
8.26%
8.27%
-
5 years
5 years
5 years
5 years
5 years
5 years
5 years
5 years
5 years
10 years
5 years
5 years
-
Perpetuity
Perpetuity
Perpetuity
Perpetuity
15 years
13 years
22 years
20 years
21 years
16 years
15 years
17 years
-
5 years Perpetuity /14 years (6)
(1) Perpetual growth rate of cash flows after explicit period.
(2) Pre-tax WACC calculated using the iterative method: the discount rate that ensures that the value in use calculated with pre-tax cash flows is equal to that
calculated with post-tax cash flows discounted with the post-tax WACC.
(3) The terminal value has been estimated on the basis of a perpetuity or an annuity with a rising yield for the years indicated in the column.
(4) Goodwill includes the portion referring to Enel Green Power España.
(5) Includes all companies operating in Romania.
(6) The terminal value for Enel Green Power Italia was estimated on the basis of a perpetuity for the hydroelectric and geothermal plants and an expected
annuity with a rising yield for a period of 14 years for other renewables technologies (wind, solar, biomass).
at Dec. 31, 2013
8,607
3,260
263
697
660
579
403
262
103
33
26
24
29
13
5
1
1.80%
-
1.20%
1.00%
2.40%
0.70%
2.00%
3.40%
2.10%
2.00%
0.70%
2.00%
1.90%
2.40%
3.00%
1.90%
8.40%
8.90%
12.20%
8.80%
9.90%
12.70%
7.90%
8.50%
7.70%
13.60%
9.90%
10.00%
7.60%
10.60%
8.20%
9.80%
10 years
10 years
10 years
10 years
10 years
10 years
5 years
5 years
5 years
10 years
10 years
10 years
5 years
10 years
10 years
5 years
Perpetuity
Perpetuity
Perpetuity
Perpetuity
Perpetuity
10 years
14 years
23 years
19 years
18 years
17 years
18 years
19 years
13 years
11 years
23 years
207
19. Deferred tax assets and liabilities - €7,067 million and
€9,220 million
The following table details changes in deferred tax assets and
ble also reports the amount of deferred tax assets that, where
liabilities by type of timing difference and calculated based
allowed, can be offset against deferred tax liabilities.
on the tax rates established by applicable regulations. The ta-
Increase/
(Decrease)
taken to
income
statement
at
Dec. 31, 2013
restated
Increase/
(Decrease)
taken to equity
Change in
scope of
consolidation
Other
changes
Exchange rate
differences
Reclassification
from/to “Assets
held for sale”
at
Dec. 31,
2014
1,891
452
2,031
99
460
1,705
6,186
(307)
18
2
1,116
1,281
4
-
-
291
28
323
(3)
(85)
(6)
(14)
2,239
-
(1)
-
(5)
(9)
(35)
(16)
(48)
93
(91)
(5)
8
(2)
(11)
(16)
(518)
(3)
(44)
(28)
(607)
1,166
105
659
2,898
7,067
8,005
(599)
-
(50)
(26)
(106)
(459)
6,765
170
2,620
10,795
42
(403)
(960)
298
(19)
279
-
8
(42)
(36)
3
(59)
(11)
5
(112)
(10)
(212)
(681)
453
2,002
9,220
1,660
4,052
(239)
Millions of euro
Deferred tax assets:
- differences in the value
of intangible assets,
and property, plant and
equipment
- accruals to provisions
for risks and charges
and impairment
losses with deferred
deductibility
- tax loss carried forward
- measurement of
financial instruments
- other items
Total
Deferred tax liabilities:
- differences on non-
current and financial
assets
- measurement of
financial instruments
- other items
Total
Non-offsettable
deferred tax assets
Non-offsettable
deferred tax liabilities
Excess net deferred
tax liabilities after any
offsetting
At December 31, 2014, “Deferred tax assets” totaled €7,067
equipment considered non-deductible;
million (€6,186 million at December 31, 2013).
> the reclassification to assets held for sale of Slovenské
The increase during the year amounted to €881 million,
elektrárne;
mainly reflecting:
> uses and releases of the provisions for risks and charges;
> the recognition of deferred tax assets by the subsidiary
> the effects of the elimination of the Robin Hood Tax fol-
Enel Iberoamérica (formerly Enel Energy Europe) totaling
lowing a judicial ruling that the IRES surtax was uncon-
€1,392 million in respect of the distribution of dividends
stitutional.
in extraordinary corporate transactions involving Endesa
It should also be noted that no deferred tax assets were re-
in the last Quarter of 2014;
corded in relation to prior tax losses in the amount of €756
> the recognition of deferred tax assets in respect of
million because, on the basis of current estimates of future
certain
impairment
losses on property, plant and
taxable income, it is not certain that such assets will be re-
208
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS covered. More specifically, the losses include those attribu-
rious years and the deferred taxation in respect of the dif-
table to the holding companies located in the Netherlands
ferences between depreciation charged for tax purposes,
in the amount of €263 million and to the Renewable Energy
including accelerated depreciation, and depreciation based
Division in the amount of €247 million.
on the estimated useful lives of assets. The difference com-
“Deferred tax liabilities” amounted to €9,220 million at De-
deferred tax assets, to the reclassification to assets held for
cember 31, 2014 (€10,795 million at December 31, 2013).
sale of the assets of Slovenské elektrárne, as well as to the
They essentially include the determination of the tax effects
change in tax rates in Spain and a number of countries in
pared with the previous year is mainly attributable, as with
of the value adjustments to assets acquired as part of the
Latin America.
final allocation of the cost of acquisitions made in the va-
209
20. Equity investments accounted for using the equity method -
€872 million
Investments in joint arrangements and associated companies accounted for using the equity method are as follows.
Millions of euro
% holding
Income effect
Change in scope
of consolidation
Dividends
Reclassification from/to
“Assets held for sale”
Impairment losses
Other changes
% holding
Joint arrangements
Hydro Dolomiti Enel
Tejo Energia Produção e Distribução
de Energia Eléctrica
Empresa de Energía Cundinamarca
RusEnergoSbyt
Energie Electrique de Tahaddart
Centrales Hidroeléctricas de Aysén
PowerCrop
Nuclenor
Inversiones Gas Atacama
Associates
Elica 2
ENEOP - Eólicas de Portugal
CESI
Tecnatom
GNL Quinteros
EEVM - Empreendimentos Eólicos do
Vale do Minho
Suministradora Eléctrica de Cádiz
Terrae
Compañía Eólica Tierras Altas
LaGeo
Buffalo Dunes Wind Project
Tirme
Other
Total
at
Dec. 31, 2013
restated
210
49.0%
38.9%
40.4%
49.5%
32.0%
51.0%
50.0%
50.0%
50.0%
30.0%
36.0%
42.7%
45.0%
20.0%
50.0%
33.5%
20.0%
35.6%
36.2%
49.0%
40.0%
58
34
59
30
96
6
12
171
135
55
37
30
7
15
17
15
14
98
69
23
181
1,372
57
6
3
47
5
-
(1)
(56)
4
-
17
3
1
5
14
3
-
-
28
4
-
2
-
-
-
-
-
-
-
-
(174)
-
-
-
-
-
-
-
-
-
(100)
(76)
(19)
23
142
(346)
(48)
(4)
-
(71)
(6)
-
-
-
-
-
-
(1)
-
(9)
(10)
(3)
-
(1)
(30)
-
(3)
(69)
(255)
The “Change in scope of consolidation” item includes the
The application of the equity method to the investments
impact of the acquisition of an additional stake in Inversio-
in RusEnergoSbyt and PowerCrop incorporates implicit go-
nes Gas Atacama in Chile and Buffalo Dunes Wind Project
odwill of €25 million and €9 million, respectively.
in the United States, which gave Enel control over those
companies, enabling line-by-line consolidation, as well
“Impairment losses” on equity methods accounted for
as the impact of the disposal, in December 2014, of in-
using the equity method amounted to €177 million; for
vestments in LaGeo and Tirme.
more details, please see note 12.
210
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(88)
(89)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(18)
(18)
(177)
at
Dec. 31, 2014
218
61
34
29
29
8
5
-
-
50
60
39
30
21
18
17
15
13
-
-
-
225
872
(1)
1
(3)
(6)
-
-
-
44
(1)
(12)
4
-
(1)
18
(1)
-
-
-
4
3
(1)
106
154
49.0%
38.9%
40.4%
49.5%
32.0%
51.0%
50.0%
50.0%
30.0%
36.0%
42.7%
45.0%
20.0%
50.0%
33.5%
20.0%
35.6%
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS 20. Equity investments accounted for using the equity method -
€872 million
Investments in joint arrangements and associated companies accounted for using the equity method are as follows.
Inversiones Gas Atacama
(174)
Joint arrangements
Hydro Dolomiti Enel
Tejo Energia Produção e Distribução
de Energia Eléctrica
Empresa de Energía Cundinamarca
RusEnergoSbyt
Energie Electrique de Tahaddart
Centrales Hidroeléctricas de Aysén
PowerCrop
Nuclenor
Associates
Elica 2
CESI
Tecnatom
GNL Quinteros
ENEOP - Eólicas de Portugal
EEVM - Empreendimentos Eólicos do
Vale do Minho
Suministradora Eléctrica de Cádiz
Compañía Eólica Tierras Altas
Buffalo Dunes Wind Project
Terrae
LaGeo
Tirme
Other
Total
at
Dec. 31, 2013
restated
210
49.0%
38.9%
40.4%
49.5%
32.0%
51.0%
50.0%
50.0%
50.0%
30.0%
36.0%
42.7%
45.0%
20.0%
50.0%
33.5%
20.0%
35.6%
36.2%
49.0%
40.0%
171
135
58
34
59
30
96
6
12
55
37
30
7
15
17
15
14
98
69
23
181
1,372
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1)
(56)
57
47
6
3
5
-
4
3
1
5
3
-
-
4
-
2
-
17
14
28
(100)
(76)
(19)
23
142
(346)
(48)
(4)
(71)
(6)
-
-
-
-
-
-
-
-
-
-
(1)
(9)
(10)
(3)
(1)
(30)
(3)
(69)
(255)
Millions of euro
% holding
Income effect
of consolidation
Dividends
Change in scope
Reclassification from/to
“Assets held for sale”
Impairment losses
Other changes
% holding
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(18)
(18)
-
-
-
-
-
(88)
-
-
-
(89)
-
-
-
-
-
-
-
-
-
-
-
-
(177)
at
Dec. 31, 2014
218
61
34
29
29
8
5
-
-
50
60
39
30
21
18
17
15
13
-
-
-
225
872
(1)
1
(3)
(6)
-
-
-
44
(1)
4
(12)
-
(1)
18
(1)
-
-
-
4
3
(1)
106
154
49.0%
38.9%
40.4%
49.5%
32.0%
51.0%
50.0%
50.0%
30.0%
36.0%
42.7%
45.0%
20.0%
50.0%
33.5%
20.0%
35.6%
“Reclassification from/to ‘Assets held for sale’” regard the
ment meet the requirements of IFRS 5 for classification as
investments held by Slovenské elektrárne in a number of
assets held for sale at December 31, 2014.
associates that in view of the decisions taken by manage-
211
261
315
101
155
150
at
-
-
53
59
1
49
-
18
33
22
6
147
166
-
-
-
-
81
43
108
14
26
26
12
at
85
6
131
94
56
31
16
72
-
40
39
61
19
15
64
5
98
22
32
27
86
-
40
42
50
19
3
at
251
6
131
409
109
90
17
121
-
58
72
41
21
444
16
9
84
91
26
(21)
9
167
91
67
36
51
36
at
428
188
38
85
94
28
24
13
84
96
66
32
51
40
211
5
98
362
103
75
27
194
-
54
68
45
15
220
234
270
295
The following table provides a summary of financial information for each joint arrangement and associate of the Group not
classified as held for sale in accordance with IFRS 5.
Millions of euro
Non-current assets
Current assets
Total assets
Non-current liabilities
Current liabilities
Total liabilities
Equity
at
Dec. 31, 2014
at
Dec. 31, 2013
restated
at
Dec. 31, 2014
at
Dec. 31, 2013
restated
at
Dec. 31, 2014
at
Dec. 31, 2013
restated
at
Dec. 31, 2013
at
Dec. 31, 2013
at
Dec. 31, 2013
at
Dec. 31, 2013
Dec. 31, 2014
restated
Dec. 31, 2014
restated
Dec. 31, 2014
restated
Dec. 31, 2014
restated
518
9
2
378
169
132
41
74
6
576
181
3
423
172
143
37
57
7
137
12
105
139
18
34
12
99
3
103
13
166
136
22
41
8
88
6
655
21
107
517
187
166
53
173
9
679
194
169
559
194
184
45
145
13
1,358
1,214
387
278
1,745
1,492
1,399
1,249
179
159
1,578
1,408
63
72
262
77
44
62
69
274
75
45
82
63
44
19
7
92
69
53
17
16
145
135
306
96
51
154
138
327
92
61
Joint arrangements
Hydro Dolomiti Enel
Centrales Hidroeléctricas
de Aysén
RusEnergoSbyt
Tejo Energia Produção e
Distribução de Energia
Eléctrica
Empresa de Energía
Cundinamarca
Energie Electrique de
Tahaddart
PowerCrop
Nuclenor
Associates
Elica 2
ENEOP - Eólicas de
Portugal
CESI
Tecnatom
EEVM - Empreendimentos
Eólicos do Vale do Minho
Suministradora Eléctrica
de Cádiz
Compañía Eólica Tierras
Altas
212
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS The following table provides a summary of financial information for each joint arrangement and associate of the Group not
classified as held for sale in accordance with IFRS 5.
Joint arrangements
Hydro Dolomiti Enel
Centrales Hidroeléctricas
de Aysén
RusEnergoSbyt
Tejo Energia Produção e
Distribução de Energia
Eléctrica
Empresa de Energía
Cundinamarca
Energie Electrique de
Tahaddart
PowerCrop
Nuclenor
Associates
Elica 2
Portugal
CESI
Tecnatom
ENEOP - Eólicas de
EEVM - Empreendimentos
Eólicos do Vale do Minho
Suministradora Eléctrica
de Cádiz
Compañía Eólica Tierras
Altas
518
9
2
378
169
132
41
74
6
63
72
77
44
262
274
at
576
181
3
423
172
143
37
57
7
62
69
75
45
at
103
13
166
136
22
41
8
88
6
92
69
53
17
16
655
21
107
517
187
166
53
173
9
145
135
306
96
51
137
12
105
139
18
34
12
99
3
82
63
44
19
7
at
679
194
169
559
194
184
45
145
13
154
138
327
92
61
Millions of euro
Non-current assets
Current assets
Total assets
Non-current liabilities
Current liabilities
Total liabilities
Equity
at
Dec. 31, 2013
at
Dec. 31, 2013
at
Dec. 31, 2013
Dec. 31, 2014
restated
Dec. 31, 2014
restated
Dec. 31, 2014
restated
at
Dec. 31, 2014
at
Dec. 31, 2013
restated
at
Dec. 31, 2014
at
Dec. 31, 2013
restated
at
Dec. 31, 2014
at
Dec. 31, 2013
restated
at
Dec. 31, 2014
at
Dec. 31, 2013
restated
147
166
-
-
-
-
64
5
98
261
315
101
81
43
-
108
-
53
59
1
49
-
22
32
27
86
-
85
6
131
94
56
31
16
72
-
211
5
98
362
103
75
27
194
-
251
6
131
409
109
90
17
121
-
1,358
1,214
387
278
1,745
1,492
1,399
1,249
179
159
1,578
1,408
14
26
18
33
220
234
26
12
22
6
40
42
50
19
3
40
39
61
19
15
54
68
58
72
270
295
45
15
41
21
444
16
9
428
188
38
155
150
84
91
26
(21)
9
167
91
67
36
51
36
85
94
28
24
13
84
96
66
32
51
40
213
Millions of euro
Total revenue
Income before tax
Net income from continuing
operations
2014
2013 restated
2014
2013 restated
2014
2013 restated
Joint arrangements
Hydro Dolomiti Enel
365
311
-
1,834
-
2,693
195
108
52
3
25
-
213
62
97
80
16
10
202
110
57
4
7
-
195
91
100
89
16
20
Centrales Hidroeléctricas
de Aysén
RusEnergoSbyt
Tejo Energia Produção e
Distribução de Energia
Eléctrica
Empresa de Energía
Cundinamarca
Energie Electrique de
Tahaddart
PowerCrop
Nuclenor
Associates
Elica 2
ENEOP - Eólicas de
Portugal
CESI
Tecnatom
EEVM - Empreendimentos
Eólicos do Vale do Minho
Suministradora Eléctrica
de Cádiz
Compañía Eólica Tierras
Altas
21. Derivatives
235
(14)
87
22
13
23
(3)
(113)
-
52
(1)
3
37
8
-
174
(8)
203
36
7
27
(3)
1
(1)
25
15
2
45
9
6
147
(2)
68
16
8
16
(2)
(112)
-
43
(2)
3
28
8
-
98
(6)
162
27
3
20
(2)
22
(1)
40
10
2
32
9
4
Millions of euro
Non-current
Current
Derivative financial assets
Derivative financial liabilities
at
Dec. 31, 2014
1,335
2,441
at
Dec. 31, 2013
restated
444
2,216
at
Dec. 31, 2014
Dec. 31, 2013
at
restated
5,500
5,441
2,690
2,940
For more information on derivatives classified as non-current financial assets, please see notes 43 and 44 for hedging deri-
vatives and trading derivatives, respectively.
214
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS 22. Other non-current financial assets - €3,645 million
Millions of euro
Equity investments in other companies
measured at fair value
Equity investments in other companies
Receivables and securities included in
net financial debt (see note 22.1)
Service concession arrangements
Non-current prepaid financial expense
Total
at Dec. 31, 2014 at Dec. 31, 2013 restated
Change
157
56
2,701
669
62
3,645
183
102
4,965
618
102
5,970
(26)
(46)
(2,264)
51
(40)
(2,325)
-14.2%
-45.1%
-45.6%
8.3%
-39.2%
-38.9%
“Other non-current financial assets” decreased by €2,325
of infrastructure used to provide public services on a conces-
million on 2013. In particular, the decline reflected a reduc-
sion basis and recognized in application of IFRIC 12.
tion of receivables included in net financial debt, as discus-
sed in note 22.1.
Equity investments in other companies measured at fair va-
“Service concession arrangements” regard amounts due
lue and at cost break down as follows:
from the grantor for the construction and/or improvement
Millions of euro
% holding
% holding
at Dec. 31, 2014
at Dec. 31, 2013 restated
Change
Bayan Resources
147
10.00%
Echelon
Galsi
Other
Total
7.07%
15.61%
4
15
47
213
10.00%
7.07%
15.61%
169
5
15
96
285
(22)
(1)
-
(49)
(72)
The change with respect to 2013 is essentially attributable to
“Equity investments in other companies” includes compa-
both the disposal of a number of minor equity investments
nies whose market value cannot be readily determined and
in Spain and Brazil and a reduction in the fair value of Bayan
so, in the absence of plans to sell them, are carried at cost
Resources.
adjusted for any impairment losses.
215
22.1 Other non-current financial assets included in net financial debt - €
2,701 million
Millions of euro
Securities held to maturity
Financial investments in funds or portfolio management
products at fair value through profit or loss
Financial receivables in respect of Spanish electrical system
deficit
Other financial receivables
Total
at
Dec. 31, 2014
at
Dec. 31, 2013
restated
Change
139
40
-
2,522
2,701
128
24
1,498
3,315
4,965
11
16
(1,498)
(793)
(2,264)
8.6%
66.7%
-
-23.9%
-45.6%
“Financial receivables in respect of Spanish electrical system
> receivables in respect of the Electricity Equalization Fund
deficit” comprise amounts due to Endesa in respect of the
in the amount of €434 million (unchanged on December
system rate deficit in Spain. The decrease is attributable
31, 2013), regarding the reimbursement of non-recurring
to the receipt, in December 2014, of funds from the assi-
charges connected with the early replacement of electro-
gnment without recourse, as permitted by the provisions of
mechanical meters;
Decree Law of December 13, 2014, which permits the assi-
> the receivable in respect of the reimbursement, provided
gnment to private-sector entities of receivables in respect of
for by the Authority for Electricity, Gas and the Water Sy-
2013, which under previous legislation had been recovera-
stem in Italy with Resolution 157/2012, of costs incurred
ble over a period of 15 years.
with the termination of the Electrical Worker Pension
Finally, in accordance with the new regulation of the defi-
Fund in the amount of €393 million (€448 million at De-
cit set out in Decree Law 24/2013, government forecasts
cember 31, 2013);
do not expect deficits to be generated in the future. In any
> the receivable of the Argentine generation companies
event, any deficit that should emerge shall be treated as
in respect of the wholesale electricity market deposited
temporary until November of the following year, at which
with the FONINVEMEM (Fondo Nacional de Inversión
time the receivable is settled. For this reason, the provisional
Mercado Eléctrico Mayorista) in the amount of €218 mil-
deficit for 2014 of €1,173 million is classified under “Current
lion (€216 million at December 31, 2013).
financial assets”.
The change for the period reflects the reclassification under
assets held for sale of the receivable in respect of the Slovakian
At December 31, 2014, “Other financial receivables” included:
decommissioning fund in the amount of €813 million.
23. Other non-current assets - €885 million
Millions of euro
Receivables due from Electricity Equalization Fund and similar
bodies
Net assets of employee benefit programs
Other receivables
Total
at
Dec. 31, 2014
at
Dec. 31, 2013
restated
59
-
826
885
46
21
750
817
Change
13
(21)
76
68
28.3%
-
10.1%
8.3%
“Receivables due from Electricity Equalization Fund and si-
vable in respect of the Electricity Equalization Fund claimed
milar bodies” at December 31, 2014 include only the recei-
by the Enel Distribuzione.
216
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS In 2013, “Net assets of employee benefit programs” repor-
At December 31, 2014, “Other receivables” mainly regard
ted assets backing a number of employee benefit plans for
tax receivables in the amount of €501 million (€476 million
Endesa employees, net of actuarial liabilities. In 2014, the
at December 31, 2013) and advances to suppliers in the
item was reclassified to liabilities as liabilities were greater
amount of €141 million (€154 million at the end of 2013).
than actuarial assets.
24. Inventories - €3,334 million
Millions of euro
Raw materials, consumables and supplies:
- fuel
- materials, equipment and other inventories
Total raw materials, consumables and supplies
Environmental certificates:
- green certificates
- white certificates
- CO2 emissions allowances
Total
Buildings available for sale
Payments on account
TOTAL
at
Dec. 31, 2014
at
Dec. 31, 2013
restated
Change
1,533
759
2,292
623
294
3
920
76
46
1,816
616
2,432
525
461
2
988
77
58
3,334
3,555
(283)
143
(140)
98
(167)
1
(68)
(1)
(12)
(221)
-15.6%
23.2%
-5.8%
18.7%
-36.2%
50.0%
-6.9%
-1.3%
-20.7%
-6.2%
Raw materials, consumables and supplies consist of fuel
nuclear fuel and white certificates. The contraction was only
inventories to cover the requirements of the generation
partly offset by an increase in inventories of green certifica-
companies and trading activities, as well as materials and
tes and other materials and equipment. The buildings avai-
equipment for the operation, maintenance and construc-
lable for sale are related to remaining units from the Group’s
tion of plants and distribution networks. The decrease for
real estate portfolio and are primarily civil buildings.
the year is mainly attributable to the decline in stocks of gas,
25. Trade receivables - €12,022 million
Millions of euro
Customers:
- sale and transport of electricity
- distribution and sale of natural gas
- other activities
Total customer receivables
Trade receivables due from associates and joint arrangements
TOTAL
at
Dec. 31, 2014
at
Dec. 31, 2013
restated
Change
8,361
1,679
1,920
11,960
62
12,022
8,613
1,524
1,190
11,327
51
11,378
(252)
155
730
633
11
644
-2.9%
10.2%
61.3%
5.6%
21.6%
5.7%
Trade receivables from customers are recognized net of allo- wances for doubtful accounts, which totaled €1,662 million
217
at the end of the year, compared with an opening balance
For more details on trade receivables, please see note 40 “Fi-
of €1,472 million. The increase in the period is mainly due to
nancial instruments”.
an increase in sales of fuel.
26. Tax receivables - €1,547 million
Tax receivables at December 31, 2014 amounted to €1,547
million (€419 million at December 31, 2013) and receivables
million and are essentially related to income tax credits in
for other taxes and tax surcharges in the amount of €350
the amount of €788 million (€992 million at December 31,
million (€298 million at December 31, 2013).
2013), receivables for indirect taxes in the amount of €409
27. Other current financial assets - €3,984 million
Millions of euro
Current financial assets included in net financial position
Other
Total
at
Dec. 31, 2014
at
Dec. 31, 2013
restated
3,860
124
3,984
5,503
104
5,607
Change
(1,643)
20
(1,623)
-29.9%
19.2%
-28.9%
27.1 Other current financial assets included in net financial debt - €3,860
million
Millions of euro
Short-term portion of long-term financial receivables
Receivables for factoring
Securities available for sale
Financial receivables and cash collateral
Other
Total
at
Dec. 31, 2014
at
Dec. 31, 2013
restated
Change
1,566
177
140
1,654
323
3,860
2,976
263
17
1,720
527
5,503
(1,410)
(86)
123
(66)
(204)
(1,643)
-47.4%
-32.7%
-
-3.8%
-38.7%
-29.9%
The change in “Short-term portion of long-term financial re-
receivables to a specially-established securitization fund,
ceivables” is mainly accounted for by:
formed by a pool of five Spanish banks, with the inten-
> the change in financial receivables in respect of the de-
tion of closing the system deficit for 2013;
ficit of the Spanish electrical system as a result of the
> a decrease of €905 million in the financial receivables of
accrual of new receivables in 2014 in the amount of
Enersis, which at December 31, 2013 had comprised li-
€2,952 million (also including new receivables for extra-
quidity temporarily invested in repurchase transactions
peninsular generation), the reclassification of €1,498
with a maturity of more than 90 days, which were subse-
million, discussed in note 22.1 and, with a negative sign,
quently used to expand the Group’s presence in Latin
collections (€4,948 million including payments in respect
America, as happened in 2014 with the acquisition of lar-
of extra-peninsular generation). Part of those collections
ger stakes in Coelce, Gas Atacama and Edegel, with the
(€1,469 million) was generated by the assignment of the
latter channeled through Generandes Perú.
218
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS 28. Other current assets - €2,706 million
Millions of euro
Receivables due from Electricity Equalization Fund and similar
bodies
Advances to suppliers
Receivables due from employees
Receivables due from others
Accrued operating income and prepaid expenses
Receivables for construction contracts
Total
at
Dec. 31, 2014
at
Dec. 31, 2013
restated
Change
1,010
166
33
1,272
184
41
2,706
745
213
36
1,329
197
37
2,557
265
(47)
(3)
(57)
(13)
4
149
35.6%
-22.1%
-8.3%
-4.3%
-6.6%
10.8%
5.8%
“Receivables due from Electricity Equalization Fund and si-
of €59 million (€46 million in 2013), operating receivables
milar bodies” include receivables in respect of the Italian sy-
due from the Electricity Equalization Fund and similar bo-
stem in the amount of €896 million (€669 million at Decem-
dies at December 31, 2014 totaled €1,069 million (€791
ber 31, 2013) and the Spanish system in the amount of €114
million at December 31, 2013), offset by payables of €4,005
million (€76 million at December 31, 2013). Including the
million (€3,312 million at December 31, 2013).
portion of receivables classified as long-term in the amount
29. Cash and cash equivalents - €13,088 million
Cash and cash equivalents, detailed in the table below, are not restricted by any encumbrances, apart from €199 million
(€195 million at December 31, 2013) primarily in respect of deposits pledged to secure transactions.
Millions of euro
Bank and post office deposits
Cash and cash equivalents on hand
Total
at
Dec. 31, 2014
at
Dec. 31, 2013
restated
12,330
758
13,088
6,813
1,060
7,873
Change
5,517
(302)
5,215
81.0%
-28.5%
66.2%
The change for the period mainly reflects cash flows generated by the disposal of non-strategic assets and the proceeds
of the disposal of 21.92% of Endesa.
219
30. Assets and liabilities held for sale - €6,778 million and
€5,290 million
Changes in assets held for sale during the year are reported in the following table.
Millions of euro
at
Dec. 31, 2013
restated
Reclassification
from/to current
and non-current
assets
Disposals and
change in scope
of consolidation
Impairment
losses Other changes
at
Dec. 31, 2014
Property, plant and equipment
211
5,873
Intangible assets
Goodwill
Deferred tax assets
Equity investments accounted for using
the equity method
Non-current financial assets
Other non-current assets
Cash and cash equivalents
Current financial assets
Inventories, trade receivables and other
current assets
Total
1
-
-
1
4
10
-
14
241
230
697
608
17
972
18
27
42
526
9,010
(16)
(2)
-
-
-
-
-
(10)
-
(14)
(42)
(2,181)
-
(697)
-
-
-
-
-
-
-
(2,878)
(5)
(5)
-
458
-
-
-
-
-
(1)
447
3,882
224
-
1,066
18
976
18
27
42
525
6,778
“Assets held for sale” amounted to €6,778 million at Decem-
more details, please see note 8.d.
ber 31, 2014. They largely include the assets of Slovenské
elektrárne (€6,389 million), SE Hydropower (€302 million)
Liabilities held for sale at December 31, 2014 amounted to
and other smaller companies, which in view of the decisions
€5,290 million. They largely included the liabilities of Slo-
taken by management meet the requirements of IFRS 5 for
venské elektrárne (€5,163 million), SE Hydropower (€99 mil-
classification as assets held for sale.
lion) and other smaller companies.
“Impairment losses” at December 31, 2014 amounted
Changes in liabilities held for sale during the year are as follows:
to €2,878 million and regarded Slovenské elektrárne; for
Millions of euro
Long-term borrowings
Post-employment and other employee benefits
Non-current portion of provisions for risks and charges
Deferred tax liabilities
Non-current financial liabilities
Other non-current liabilities
Short-term borrowings
Other current financial liabilities
Current portion of provisions for risks and charges
Trade payables and other current liabilities
Total
at
Dec. 31, 2013
restated
Reclassification
from/to current
and non-current
liabilities
Disposals and
change in scope
of consolidation Other changes
at
Dec. 31, 2014
-
-
-
7
-
-
-
-
-
13
20
1,422
67
2,305
681
148
1
191
47
43
399
5,304
-
-
-
-
-
-
-
-
-
(13)
(13)
-
-
-
(19)
-
-
-
-
-
(2)
(21)
1,422
67
2,305
669
148
1
191
47
43
397
5,290
The net increase in all items of assets and liabilities held for
For a summary of the fair value balances, broken down by
sale compared with December 31, 2013 largely reflects the
measurement criteria, please see notes 45 and 46 on IFRS
classifications under this item during 2014.
13 disclosures.
220
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS 31. Shareholders’ equity - €51,145 million
31.1 Equity attributable to the shareholders of the Parent Company -
€31,506 million
Share capital - €9,403 million
At December 31, 2014 (as at December 31, 2013), the sha-
Pursuant to Article 47 of the Uniform Income Tax Code (Te-
sto Unico Imposte sul Reddito), this amount does not consti-
re capital of Enel SpA – considering that no options were
tute taxable income when distributed.
exercised as part of stock option plans in 2014 – amounted
to €9,403,357,795 fully subscribed and paid up, represen-
ted by 9,403,357,795 ordinary shares with a par value of
€1.00 each.
Reserve from translation of financial statements
in currencies other than euro - €(1,321) million
The decrease for the year is due to the net depreciation of
At the same date, based on the shareholders register and
the functional currency against the foreign currencies used
the notices submitted to CONSOB and received by the Com-
by subsidiaries.
pany pursuant to Article 120 of Legislative Decree 58 of Fe-
bruary 24, 1998, as well as other available information, no
shareholders held more than 2% of the total share capital,
Reserve from cash flow hedge - €(1,806) million
This includes the net charges recognized in equity from the
apart from the Ministry for the Economy and Finance, which
measurement of cash flow hedge derivatives.
holds 31.24%, CNP Assurances (which holds 3.67%, held as
at June 26, 2014 for asset management purposes), and Peo-
ple’s Bank of China, with 2.07%.
On February 26, 2015, the Ministry for the Economy and Fi-
Reserve from measurement of financial instru-
ments available for sale - €105 million
This includes net unrealized income from the measurement
nance sold an interest of 5.74% in the Company. Accordin-
at fair value of financial assets.
gly, following that operation, the Ministry’s holding in the
Company has decreased from 31.24% to 25.50%.
Other reserves - €3,362 million
Reserve from disposal of equity interests wi-
thout loss of control - €(2,113) million
This item reports the gain posted on the public offering of
Enel Green Power shares, net of expenses associated with
Share premium reserve - €5,292 million
the disposal and the related taxation, and the sale of mi-
Pursuant to Article 2431 of the Italian Civil Code, the share
nority interests recognized as a result of the Enersis capital
premium reserve contains, in the case of the issue of shares
increase. The change for the period regards the capital loss,
at a price above par, the difference between the issue price
net of expenses associated with the disposal and the related
of the shares and their par value, including those resulting
taxation, from the public offering of 21.92% of Endesa.
from conversion from bonds. The reserve, which is a capital
reserve, may not be distributed until the legal reserve has
reached the threshold established under Article 2430 of the
Civil Code.
Legal reserve - €1,881 million
Reserve from transactions in non-controlling in-
terests - €(193) million
The reserve reports the amount by which the purchase price
in purchases from third parties of additional stakes in com-
panies already controlled in Latin America (generated in
The legal reserve is formed of the part of net income that,
previous years by the purchase of additional stakes in Ampla
pursuant to Article 2430 of the Italian Civil Code, cannot be
Energia e Serviços, Ampla Investimentos e Serviços and Eléc-
distributed as dividends.
trica Cabo Blanco) exceeds the value of the equity acquired.
Other reserves - €2,262 million
These include €2,215 million related to the remaining por-
The change for the period regards the difference between
the purchase price and the associated share of equity acqui-
red from non-controlling shareholders of Coelce, Generandes
tion of the value adjustments carried out when Enel was
Perú (which controls Edegel with a stake of 54.20%), Enersis
transformed from a public entity to a joint-stock company.
and Endesa Latinoamérica.
221
Reserve from equity investments accounted for
using the equity method - €(74) million
The reserve reports the share of comprehensive income to
Reserve for employee benefits - €(671) million
The reserve includes all actuarial gains and losses, net of tax
effects. The change is attributable to the increase in net ac-
be recognized directly in income for companies accounted
tuarial losses recognized during the period.
for using the equity method.
Retained earnings and loss carried forward
- €18,741 million
The reserve reports earnings from previous years that have
The table below shows the changes in gains and losses re-
cognized directly in other comprehensive income, including
non-controlling interests, with specific reporting of the rela-
not been distributed or allocated to other reserves.
ted tax effects.
at Dec. 31, 2013 restated
Changes
at Dec. 31, 2014
Of which
sharehol-
ders of
the Parent
Company
Of which
non-con-
trolling
interests
Gains/
(Losses)
recogni-
zed in
equity for
the year
Total
Released
to income
statement Taxes
Change in
scope of
consolida-
tion
Total
Of which
sharehol-
ders of
the Parent
Company
Of which
non-
controlling
interests
Of which
sharehol-
ders of
the Parent
Company
Of which
non-con-
trolling
interests
Total
(2,401)
(1,084)
(1,317)
(717)
-
-
6
(711)
(237)
(474) (3,112)
(1,321)
(1,791)
(1,730)
(1,592)
(138)
(302)
(65)
20
21
(326)
(214)
(112) (2,056)
(1,806)
(250)
127
128
(1)
(23)
-
-
-
(23)
(23)
-
104
105
(1)
(63)
(58)
(5)
(36)
7
16
3
(10)
(16)
6
(73)
(74)
1
(624)
(528)
(96)
(340)
-
33
59
(248)
(143)
(105)
(872)
(671)
(201)
(4,691)
(3,134)
(1,557)
(1,418)
(58)
69
89 (1,318)
(633)
(685) (6,009)
(3,767)
(2,242)
Millions of euro
Reserve
from
translation
of financial
statements
in currencies
other than
euro
Reserve
from change
in the fair
value of
cash flow
hedges
Reserve
from
changes
in the fair
value of
financial
assets
available for
sale
Share of OCI
of equity
investments
accounted
for using
the equity
method
Remeasure-
ments of the
net defined
benefit
liabilities/
(assets)
Total
gains/
(losses)
recognized
in equity
222
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS 31.2 Dividends
Net dividends paid in 2013
Dividends for 2012
Interim dividends for 2013
Extraordinary dividends
Total net dividend paid in 2013
Net dividends paid in 2014
Dividends for 2013
Interim dividends for 2014
Extraordinary dividends
Total dividend paid in 2014
Amount distributed (millions
of euro)
Net dividend per share
(euro)
1,410
-
-
1,410
1,222
-
-
1,222
0.15
-
-
0.15
-
0.13
-
-
0.13
The dividend for 2014, equal to €0.14 per share, for a total
not take account of the effect of the distribution of the 2014
of €1,316 million, was proposed to the Shareholders’ Mee-
dividends to shareholders.
ting called for May 28, 2015. These financial statements do
Capital management
The Group’s objectives for managing capital comprise safe-
In this context, the Group manages its capital structure and
adjusts that structure when changes in economic conditions
guarding the business as a going concern, creating value for
so require. There were no substantive changes in objectives,
stakeholders and supporting the development of the Group.
policies or processes in 2014.
In particular, the Group seeks to maintain an adequate capi-
To this end, the Group constantly monitors developments in
talization that enables it to achieve a satisfactory return for
the level of its debt in relation to equity. The situation at De-
shareholders and ensure access to external sources of finan-
cember 31, 2014 and 2013 is summarized in the following
cing, in part by maintaining an adequate rating.
table:
Millions of euro
Non-current financial position
Net current financial position
Non-current financial receivables and long-term securities
Net financial debt
Equity attributable to the shareholders of the Parent Company
Non-controlling interests
Shareholders’ equity
Debt/equity ratio
at Dec. 31, 2014 at Dec. 31, 2013 restated
48,655
(8,571)
(2,701)
37,383
31,506
19,639
51,145
0.73
50,905
(6,234)
(4,965)
39,706
35,941
16,891
52,832
0.75
Change
(2,250)
(2,337)
2,264
(2,323)
(4,435)
2,748
(1,687)
(0.02)
223
31.3 Non-controlling interests - €19,639 million
The following table reports the composition of non-controlling interests.
Non-controlling
interests
at
Dec. 31, 2014
6,648
8,690
1,134
385
2,782
-
at
Dec. 31, 2013
restated
1,996
10,014
1,438
923
2,306
214
19,639
16,891
Net income
attributable to
non-controlling
interests
at
Dec. 31, 2014
116
464
31
(523)
167
-
255
at
Dec. 31, 2013
restated
84
1,013
95
133
210
10
1,545
Millions of euro
Endesa Group
Enel Latinoamérica Group
EIH Group
Slovenske Group
Enel Green Power Group
Other and minor
Total
32. Borrowings
Millions of euro
Non-current
Current
Long-term borrowings
Short-term borrowings
Total
at
Dec. 31, 2014
48,655
-
48,655
at
Dec. 31, 2013
restated
at
Dec. 31, 2014
at
Dec. 31, 2013
restated
50,905
-
50,905
5,125
3,252
8,377
4,658
2,484
7,142
For more details on the nature of borrowings, please see note 40 “Financial instruments”.
224
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS 33. Post-employment and other employee benefits - €3,687
million
The Group provides its employees with a variety of benefits,
benefit entitling employees covered by the electricity
including termination benefits, additional months’ pay for
workers national collective bargaining agreement to
having reached age limits or eligibility for old-age pension,
a bonus for achievement of seniority milestones (25th
loyalty bonuses for achievement of seniority milestones,
and 35th year of service). It also includes other incentive
supplemental retirement and healthcare plans, residential
plans, which provide for the award to certain Company
electricity discounts (which for companies in Italy only re-
managers of a monetary bonus subject to specified con-
gard certain retired employees) and similar benefits. More
ditions.
specifically:
Outside of Italy, major pension plans include those of Ende-
> for Italy, the item “Pension benefits” regards estimated
sa, in Spain, which break down into three types that differ
accruals made to cover benefits due under the supple-
on the basis of employee seniority and company. In gene-
mental retirement schemes of retired executives and the
ral, under the framework agreement of October 25, 2000,
benefits due to personnel under law or contract at the
employees participate in a specific defined-contribution
time the employment relationship is terminated. For the
pension plan and, in cases of disability or death of emplo-
foreign companies, the item reports post-employment
yees in service, a defined benefit plan which is covered by
benefits;
appropriate insurance policies. In addition, the Group has
> the item “Electricity discount” comprises, for the Italian
two other limited-enrollment plans (i) for current and re-
companies, a number of benefits regarding residential
tired Endesa employees covered by the electricity industry
electricity supply. Until 2011 the discount was granted to
collective bargaining agreement prior to the changes intro-
current and retired employees, but, following an agree-
duced with the framework agreement noted earlier and
ment with the unions, has now been replaced by other
(ii) for employees of the former Catalan companies (Fecsa/
forms of remuneration for current employees and there-
Enher/HidroEmpordà). Both are defined benefit plans and
fore remains in effect only for retired employees;
benefits are fully ensured, with the exception of the former
> the item “Health insurance” reports benefits for current
plan for benefits in the event of the death of a retired em-
or retired employees covering medical expenses;
ployee.
> “Other benefits” mainly regard the loyalty bonus, which
Finally, the Brazilian companies have also established defi-
for Italy is represented by the estimated liability for the
ned benefit plans.
225
The following table reports changes in the defined benefit
gation with the actuarial liability.
obligation for post-employment and other long-term em-
The obligation at December 31, 2013 (€3,677 million) is re-
ployee benefits at December 31, 2014 and December 31,
ported net of plan assets (€21 million).
2013, respectively, as well as a reconciliation of that obli-
Millions of euro
2014
2013 restated
CHANGES IN ACTUARIAL OBLIGATION
Actuarial obligation at January 1
2,366
1,848
Pension benefits
Electricity
discount Health insurance Other benefits
209
4
11
-
9
5
(2)
-
(1)
-
-
(13)
1
-
223
-
-
-
-
13
-
(13)
-
-
-
-
-
-
-
-
-
362
48
10
1
(7)
(17)
(24)
-
(18)
-
-
(89)
(2)
(1)
263
-
-
-
-
22
-
(22)
-
-
-
-
-
-
-
-
-
Total
4,785
75
206
3
445
(75)
(66)
8
(23)
-
1
(427)
6
(67)
4,871
1,187
82
28
4
309
1
(360)
-
-
1,251
58
7
2
-
-
67
3,687
Pension benefits
Electricity discount
Health insurance
Other benefits
3,636
66
147
3
(104)
(7)
(35)
(1,023)
(131)
(195)
-
2
7
-
2
-
-
2,366
1,320
82
(83)
(96)
157
(195)
1,187
47
3
19
(11)
-
58
1,674
6
57
(1)
177
29
(1)
(96)
3
-
1,848
96
(96)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
239
2
12
1
(13)
(4)
(13)
(15)
209
15
(15)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
249
99
10
29
(7)
43
(3)
(11)
-
-
-
1
-
(48)
362
25
(25)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,237
1,848
209
362
(38)
(1,023)
(156)
Total
5,798
173
226
32
53
61
-
2
11
-
(354)
4,785
1,320
82
(83)
(96)
293
(331)
2
-
-
1,187
47
3
19
-
58
(11)
3,656
6
60
1
173
(39)
(36)
-
-
-
-
(88)
2
-
1,927
-
-
-
-
88
-
(88)
-
-
-
-
-
-
-
-
-
1,927
223
263
Current service cost
Interest expense
Actuarial (gains)/losses arising from changes in
demographic assumptions
Actuarial (gains)/losses arising from changes in financial
assumptions
Experience adjustments
Past service cost
(Gains)/Losses arising from settlements
Exchange rate differences
Employer contributions
Employee contributions
Benefits paid
Other changes
Liabilities classified as held for sale
Actuarial obligation at December 31 (A)
CHANGES IN PLAN ASSETS
Fair value of plan assets at January 1
Interest income
Return on plan assets excluding amounts included in
interest income
Exchange rate differences
Employer contributions
Employee contributions
Benefits paid
Other payments
Changes in scope of consolidation
Fair value of plan assets at December 31 (B)
EFFECT OF ASSET CEILING
Asset ceiling at January 1
Interest income
Changes in asset ceiling
Exchange rate differences
Changes in scope of consolidation
Asset ceiling at December 31 (C)
Net liability in balance sheet (A-B+C)
17
125
1
270
(24)
(4)
8
(4)
-
1
(237)
5
(66)
2,458
1,187
82
28
4
186
1
(237)
-
-
1,251
58
7
2
-
-
67
1,274
226
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS
Millions of euro
2013 restated
2014
Electricity
Pension benefits
discount Health insurance Other benefits
Total
Pension benefits
Electricity discount
Health insurance
Other benefits
(237)
(88)
(13)
Actuarial obligation at December 31 (A)
1,927
223
CHANGES IN ACTUARIAL OBLIGATION
Actuarial obligation at January 1
Current service cost
Interest expense
Actuarial (gains)/losses arising from changes in
demographic assumptions
Actuarial (gains)/losses arising from changes in financial
(Gains)/Losses arising from settlements
assumptions
Experience adjustments
Past service cost
Exchange rate differences
Employer contributions
Employee contributions
Benefits paid
Other changes
Liabilities classified as held for sale
CHANGES IN PLAN ASSETS
Fair value of plan assets at January 1
Interest income
Return on plan assets excluding amounts included in
interest income
Exchange rate differences
Employer contributions
Employee contributions
Benefits paid
Other payments
Changes in scope of consolidation
Fair value of plan assets at December 31 (B)
EFFECT OF ASSET CEILING
Asset ceiling at January 1
Interest income
Changes in asset ceiling
Exchange rate differences
Changes in scope of consolidation
Asset ceiling at December 31 (C)
Net liability in balance sheet (A-B+C)
2,366
17
125
270
(24)
(4)
(4)
1
8
-
1
5
(66)
2,458
1,187
82
28
4
186
(237)
1,251
58
1
-
-
7
2
-
-
67
1,274
1,848
6
60
1
173
(39)
(36)
-
-
-
-
2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
88
(88)
209
4
11
(2)
(1)
-
9
5
-
-
-
1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
362
48
10
1
(7)
(17)
(24)
(18)
(89)
(2)
(1)
263
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,785
75
206
445
(75)
(66)
(23)
3
8
-
1
6
(427)
(67)
4,871
1,187
82
28
4
309
1
-
-
7
2
-
-
1,251
58
67
3,687
13
22
(13)
(22)
(360)
3,636
66
147
3
(104)
(7)
(35)
(1,023)
(131)
-
2
(195)
7
-
2,366
1,320
82
(83)
(96)
157
2
(195)
-
-
1,187
47
3
19
(11)
-
58
1,674
6
57
(1)
177
29
-
-
(1)
-
-
(96)
3
-
1,848
-
-
-
-
96
-
(96)
-
-
-
-
-
-
-
-
-
239
2
12
1
(13)
(4)
-
-
(13)
-
-
(15)
-
-
209
-
-
-
-
15
-
(15)
-
-
-
-
-
-
-
-
-
249
99
10
29
(7)
43
(3)
-
(11)
-
-
(48)
1
-
362
-
-
-
-
25
-
(25)
-
-
-
-
-
-
-
-
-
1,927
223
263
1,237
1,848
209
362
Total
5,798
173
226
32
53
61
(38)
(1,023)
(156)
-
2
(354)
11
-
4,785
1,320
82
(83)
(96)
293
2
(331)
-
-
1,187
47
3
19
(11)
-
58
3,656
227
Millions of euro
(Gains)/Losses charged to profit or loss
Service cost and past service cost
Net interest expense
(Gains)/Losses arising from settlements
Actuarial (gains)/losses on other long-term benefits
Other changes
Total
Millions of euro
Change in (gains)/losses in OCI
Return on plan assets excluding amounts included in interest income
Actuarial (gains)/losses on defined benefit plans
Changes in asset ceiling excluding amounts included in interest income
Total
2014
2013 restated
(26)
131
8
35
7
155
50
147
(1,023)
85
(12)
(753)
2014
2013 restated
(28)
366
2
340
83
157
19
259
The change in cost recognized through profit or loss is
the year is reported net of the fair value of plan assets, en-
mainly attributable to the cancellation in 2013 of the transi-
tirely accounted for by the Enersis Group, amounting to
tion-to-retirement plan introduced in 2012 owing to lack of
€1,251 million at December 31, 2014. The plan assets break
participation, prompting derecognition of the liability.
down as follows:
The liability recognized in the balance sheet at the end of
Investment quoted in active markets
Equity instruments
Fixed-income securities
Unquoted investments
Property
Assets held by insurance undertakings
Other
Total
2014
2013 restated
5%
29%
5%
-
61%
100%
6%
27%
3%
11%
53%
100%
The main actuarial assumptions used to calculate the liabi-
which are consistent with those used the previous year, are
lities in respect of employee benefits and the plan assets,
set out in the following table.
Italy
Iberian
peninsula
2014
Latin America
Other
Italy
Iberian
peninsula
Latin
America
Other
2013 restated
Discount rate
0.50% -2.15%
0.87% -
2.11%
4.60% -
12.52%
Inflation rate
1.60%
2.30% 3.00% - 6.00%
Rate of wage increases
1.60% - 3.60%
2.30% 3.00% - 9.18%
Rate of increase in
healthcare costs
Expected rate of return
on plan assets
2.60%
3.50% 3.50% - 8.66%
-
2.06%
12.52%
1.60% -
13.89%
1.75% -
5.00%
1.75% -
5.00%
-
-
0.75% -
3.00% 1.72% - 3.64%
2.00%
2.30%
5.40% -
12.43%
3.00% -
5.50%
2.00%-
4.00%
2.30% 0% - 7.61%
3.00%
3.50%
4.50% -
11.57%
-
3.61%
0.00%
3.15% -
7.90%
2.00% -
6.00%
2.00% -
6.00%
-
-
228
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS The following table reports the outcome of a sensitivity
the year in the actuarial assumptions used in estimating the
analysis that demonstrates the effects on the defined bene-
obligation.
fit obligation of changes reasonably possible at the end of
A decrease of 0.5% in
discount rate
An increase of 0.5% in
discount rate
An increase of 0.5% in
inflation rate
An increase of 0.5% in
remuneration
An increase of 0.5% in
pensions currently being
paid
An increase of 1% in
healthcare costs
An increase of 1 year in
life expectancy of active
and retired employees
Pension
benefits
Electricity
discount
Health
insurance
Other
benefits
Pension
benefits
Electricity
discount
Health
insurance
Other
benefits
at Dec. 31, 2014
at Dec. 31, 2013
156
58
(134)
(120)
31
27
52
-
17
137
-
-
-
81
11
(13)
8
-
-
24
11
3
(6)
4
6
-
-
-
128
125
(130)
(111)
30
10
3
3
62
-
-
-
41
87
11
(13)
(4)
7
7
24
7
11
(9)
5
10
3
3
7
The sensitivity analysis used an approach that extrapolates
The contributions expected to be paid into defined benefit
the effect on the defined benefit obligation of reasonable
plans in the subsequent year amount to €24 million.
changes in an individual actuarial assumption, leaving the
other assumptions unchanged.
The following table reports expected benefit payments in the coming years for defined benefit plans:
Millions of euro
Within 1 year
In 1-2 years
In 2-5 years
More than 5 years
at Dec. 31, 2014
at Dec. 31, 2013
265
257
801
1,406
396
258
802
1,517
34. Provisions for risks and charges - €5,238 million
Millions of euro
Provision for litigation, risks and other charges:
- nuclear decommissioning
- non-nuclear plant retirement and site restoration
- litigation
- environmental certificates
- taxes and duties
- other
Total
Provision for early-retirement incentives
TOTAL
at Dec. 31, 2014
at Dec. 31, 2013 restated
Non-current
Current
Non-current
Current
566
594
810
-
309
693
2,972
1,079
4,051
1
5
40
43
7
581
677
510
1,187
2,612
589
1,036
133
371
605
5,346
1,158
6,504
33
3
46
164
7
626
879
588
1,467
229
Millions of euro
Accrual Reversal Utilization
at
Dec. 31, 2013
restated
Unwinding of
interest
Change in
scope of
consolidation
Translation
adjustment Other
Reclassification
from/to
“Liabilities held
for sale”
at
Dec. 31,
2014
Provision for
litigation, risks and
other charges:
- nuclear
decommissioning
- non-nuclear plant
retirement and site
restoration
- litigation
- environmental
certificates
- taxes and duties
- other
Total
Provision for early-
retirement incentives
TOTAL
2,645
26
(56)
(19)
105
592
1,082
297
378
1,231
6,225
40
182
42
31
394
715
(84)
(218)
(18)
(50)
(139)
(565)
(12)
(210)
(276)
(29)
(299)
(845)
1,746
7,971
478
1,193
(129)
(694)
(539)
(1,384)
13
26
-
-
53
197
58
255
-
5
-
-
(4)
(2)
(1)
-
(1)
(3)
81
(2,212)
567
1
-
-
(19)
(21)
(3)
(24)
150
(1)
(1)
(6)
62
285
(15)
270
(106)
(11)
(1)
(4)
(7)
(2,341)
(7)
(2,348)
599
850
43
316
1,274
3,649
1,589
5,238
Nuclear decommissioning provision
Litigation provision
The “nuclear decommissioning” provision decreased compared
The “litigation” provision covers contingent liabilities in re-
with December 31, 2013, mainly due to the reclassification of
spect of pending litigation and other disputes. It includes
the subsidiary Slovenské elektrárne under assets held for sale. In
an estimate of the potential liability relating to disputes that
2013 the latter had a provision of €2,175 million for the V1 and
arose during the period, as well as revised estimates of the
V2 plants at Jasklovske Bohunice and the EMO 1 and 2 plants
potential costs associated with disputes initiated in prior pe-
at Mochovce, which included the provision for nuclear waste di-
riods. The estimates are based on the opinions of internal and
sposal in the amount of €114 million, the provision for spent nu-
external legal counsel. The change for the year reflects the
clear fuel disposal in the amount of €1,296 million and the provi-
closure of a number of disputes.
sion for nuclear plant retirement in the amount of €765 million.
Thus, at December 31, 2014, the provision reflected solely the
costs that will be incurred at the time of decommissioning of
nuclear plants by Enresa, a Spanish public enterprise responsible
Provision for environmental
certificates
for such activities in accordance with Royal Decree 1349/2003
The provision for “environmental certificates” covers costs in
and Law 24/2005. Quantification of the costs is based on the
respect of shortfalls in the environmental certificates need
standard contract between Enresa and the electricity companies
for compliance with national or supranational environmen-
approved by the Ministry for the Economy in September 2001,
tal protection requirements.
which regulates the retirement and closing of nuclear power
plants. The time horizon envisaged, three years, corresponds
to the period from the termination of power generation to the
Other provisions
transfer of plant management to Enresa (post-operational costs).
“Other” provisions cover various risks and charges, mainly in
Non-nuclear plant retirement and
site restoration provision
connection with regulatory disputes and disputes with local
authorities regarding various duties and fees. In particular, as
regard current and potential disputes concerning local proper-
ty tax (whether the Imposta Comunale sugli Immobili (“ICI”) or
The provision for “non-nuclear plant retirement and site
the new Imposta Municipale Unica (“IMU”)) in Italy, the Group
restoration” represents the present value of the estimated
has taken due account of the criteria introduced with circular
cost for the retirement and removal of non-nuclear plants
6/2012 of the Public Land Agency (which resolved interpretive
where there is a legal or constructive obligation to do so.
issues concerning the valuation methods for movable assets
230
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS considered relevant for property registry purposes, including
and Italy in previous years, the latter largely associated with
certain assets typical to generation plants, such as turbines) in
the union-company agreements signed on September 6,
estimating the liability for such taxes, both for the purposes of
2013, implementing, for a number of companies in Italy, the
quantifying the probable risk associated with pending litiga-
mechanism provided for under Article 4, paragraphs 1-7 ter,
tion and generating a reasonable valuation of probable future
of Law 92/2012 (the Fornero Act). In addition, a new incentive
charges on positions that have not yet been assessed by Public
mechanism was implemented in Spain in 2014, with a charge
Land Agency offices and municipalities.
of €349 million, in connection with Endesa’s restructuring and
Provision for early-retirement
incentives
reorganization plan, which provides for the suspension of the
employment contract with tacit annual renewal. With regard
to that plan, on December 30, 2014, the Company signed an
agreement with union representatives in which it undertook
The “Provision for early-retirement incentives” includes the
to not exercise the option to request a return to work at subse-
estimated charges related to binding agreements for the vo-
quent annual renewal dates for either the 222 employees who
luntary termination of employment contracts in response to
elected to participate in the mechanism in 2014 or for the ad-
organizational needs. The change for the year reflects, among
ditional 250 employees who have already been identified in
other factors, uses for incentive provisions established in Spain
the plan but will only sign the participation agreement in 2015.
35. Other non-current liabilities - €1,464 million
Millions of euro
Accrued operating expenses and deferred income
Other items
Total
at
Dec. 31, 2014
952
512
1,464
at
Dec. 31, 2013
restated
956
303
1,259
Change
(4)
209
205
-0.4%
69.0%
16.3%
At December 31, 2014, this item essentially consisted of revenues for electricity and gas connections and grants received for
specific assets.
36. Trade payables - €13,419 million
The item amounted to €13,419 million (€12,363 million in
More specifically, trade payables falling due in less than 12
2013) and includes payables in respect of electricity supplies,
months amounted to €12,923 million (€11,904 million in
fuel, materials, equipment associated with tenders and other
2013), while those with falling due in more than 12 months
services.
amounted to €496 million (€459 million in 2013).
37. Other current financial liabilities - €1,177 million
Millions of euro
Deferred financial liabilities
Other items
Total
at
Dec. 31, 2014
1,063
114
1,177
at
Dec. 31, 2013
restated
974
126
1,100
Change
89
(12)
77
9.1%
-9.5%
7.0%
“Deferred financial liabilities” regard accrued expense on bonds. It is broadly unchanged on the previous year.
231
38. Net financial position and long-term financial receivables
and securities - €37,383 million
The following table shows the net financial position and long-term financial receivables and securities on the basis of the
items on the consolidated balance sheet.
Millions of euro
Long-term borrowings
Short-term borrowings
Current portion of long-term borrowings
Non-current financial assets included in debt
Current financial assets included in debt
Cash and cash equivalents
Total
Notes
at
Dec. 31, 2014
at
Dec. 31, 2013
restated
Change
40
40
40
22
27
29
48,655
3,252
5,125
(2,701)
(3,860)
(13,088)
37,383
50,905
2,484
4,658
(4,965)
(5,503)
(7,873)
39,706
(2,250)
768
467
2,264
1,643
(5,215)
(2,323)
-4.4%
30.9%
10.0%
-45.6%
-29.9%
-66.2%
-5.9%
Net financial debt declined primarily as the result of non-
Pursuant to the CONSOB instructions of July 28, 2006, the
recurring disposals of certain assets and investments, as well
following table reports the net financial position at Decem-
as of a number of initiatives to optimize working capital, as
ber 31, 2014, and December 31, 2013, reconciled with net
detailed in the section on liquidity risk.
financial debt as provided for in the presentation methods
of the Enel Group.
Millions of euro
Cash and cash equivalents on hand
Bank and post office deposits
Securities
Liquidity
Short-term financial receivables
Factoring receivables
Short-term portion of long-term financial receivables
Current financial receivables
Short-term bank debt
Commercial paper
Short-term portion of long-term bank debt
Bonds issued (short-term portion)
Other borrowings (short-term portion)
Other short-term financial payables
Total short-term financial debt
Net short-term financial position
Debt to banks and financing entities
Bonds
Other borrowings
Long-term financial position
NET FINANCIAL POSITION as per CONSOB instructions
Long-term financial receivables and securities
NET FINANCIAL DEBT
at Dec. 31, 2014 at Dec. 31, 2013 restated
Change
758
12,330
140
13,228
1,977
177
1,566
3,720
(30)
(2,599)
(824)
(4,056)
(245)
(623)
(8,377)
8,571
(7,022)
(39,749)
(1,884)
(48,655)
(40,084)
2,701
(37,383)
1,060
6,813
17
7,890
2,247
263
2,976
5,486
(118)
(2,202)
(1,750)
(2,648)
(260)
(164)
(7,142)
6,234
(7,873)
(41,483)
(1,549)
(50,905)
(44,671)
4,965
(39,706)
(302)
5,517
123
5,338
(270)
(86)
(1,410)
(1,766)
88
(397)
926
(1,408)
15
(459)
-28.5%
81.0%
-
67.7%
-12.0%
-32.7%
-47.4%
-32.2%
74.6%
-18.0%
-52.9%
-53.2%
5.8%
-
(1,235)
-17.3%
2,337
851
1,734
(335)
2,250
4,587
(2,264)
2,323
37.5%
10.8%
4.2%
-21.6%
4.4%
10.3%
-45.6%
5.9%
There are no transactions with related parties for these items.
232
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS 39. Other current liabilities - €10,827 million
Millions of euro
Payables due to customers
Payables due to Electricity Equalization Fund and similar bodies
Payables due to employees
Other tax payables
Payables due to social security institutions
Contingent consideration
Payables for put options granted to minority shareholders
Current accrued expenses and deferred income
Payables for acquisition of equity investments
Payables for construction contracts
Other
Total
at Dec. 31, 2014 at Dec. 31, 2013 restated
Change
1,599
4,005
496
887
216
46
789
285
33
317
2,154
10,827
1,563
3,312
449
963
216
37
790
300
-
560
2,169
10,359
36
693
47
(76)
2.3%
20.9%
10.5%
-7.9%
-
-
9
(1)
(15)
33
(243)
(15)
468
24.3%
-0.1%
-5.0%
-
-43.4%
-0.7%
4.5%
“Payables due to customers” include €1,096 million (€1,090
to €1,556 million (€1,390 million at December 31, 2013).
million at December 31, 2013) in security deposits related
“Contingent consideration” regards a number of investees
to amounts received from customers as part of electricity
held by the Group in North America whose fair value was
and gas supply contracts. Following the finalization of the
determined on the basis of the terms and conditions of the
contract, deposits for electricity sales, the use of which is not
contractual agreements between the parties.
restricted in any way, are classified as current liabilities given
The item “Payables for put options granted to minority sha-
that the Company does not have an unconditional right to
reholders” at December 31, 2014 includes the liability in
defer repayment beyond 12 months.
respect of Enel Distributie Muntenia and Enel Energie Mun-
“Payables due to Electricity Equalization Fund and similar bo-
tenia in the total amount of €778 million (unchanged on
dies” mainly include payables arising from the application of
December 31, 2013).
equalization mechanisms to electricity purchases on the Ita-
“Payables for acquisition of equity investments” regard the
lian market amounting to €2,449 million (€1,922 million at
residual price to pay for purchase in 2014 of a number of
December 31, 2013) and on the Spanish market amounting
companies in North America in the amount of €33 million.
40. Financial instruments
This note provides disclosures that enable users to assess the significance of financial instruments for the Company’s finan-
cial position and performance.
233
40.1 Financial assets by category
The following table reports the carrying amount for each ca-
ing hedging derivatives and derivatives measured at fair va-
tegory of financial asset provided for under IAS 39, broken
lue through profit or loss separately.
down into current and non-current financial assets, show-
Millions of euro
Non-current
Current
Loans and receivables
Available for sale financial assets
Financial assets held to maturity
Financial assets at fair value through profit or loss
Financial assets designated upon initial recognition (fair
value option)
Derivative financial assets at FVTPL
Total financial assets at fair value through profit or
loss
Derivative financial assets designated as hedging
instruments
Fair value hedge derivatives
Cash flow hedge derivatives
Total derivative financial assets designated as
hedging instruments
TOTAL
Notes
40.1.1
40.1.2
40.1.3
40.1.4
40.1.5
40.1.5
40.1.5
2014
2,522
882
139
40
5
45
55
1,275
1,330
4,918
2013 restated
2014
2013 restated
4,813
903
128
24
5
29
45
394
439
6,312
28,871
140
24,774
17
-
-
-
-
4,930
2,579
4,930
2,579
-
570
570
34,511
4
107
111
27,481
For more information on fair value measurement, please see note 45 “Assets measured at fair value”.
40.1.1 Loans and receivables
The following table shows loans and receivables by nature, broken down into current and non-current financial assets.
Millions of euro
Non-current
Current
Notes
at
Dec. 31, 2014
at
Dec. 31, 2013
restated
Notes
at
Dec. 31, 2014
at
Dec. 31, 2013
restated
Cash and cash equivalents
Trade receivables
Short-term portion of long-term financial
receivables
Receivables for factoring
Cash collateral
Receivables for construction contracts
Other financial receivables
Total
29
25
27
27
27
28
22
-
-
-
-
-
-
-
-
-
-
-
-
2,522
2,522
4,813
4,813
29
25
27
27
27
28
27
13,088
12,022
1,566
177
1,654
41
323
7,873
11,378
2,976
263
1,720
37
527
28,871
24,774
Trade receivables from customers at December 31, 2014
of the year, up from the opening balance of €1,472 million.
amounted to €12,022 million (€11,378 million at December
31, 2013) and are recognized net of allowances for impai-
The table below shows impairment losses on trade receiva-
rment losses, which amounted to €1,662 million at the end
bles.
Millions of euro
Trade receivables
Gross value
Allowances and impairment
Net value
234
at Dec. 31, 2014
at Dec. 31, 2013 restated
13,684
(1,662)
12,022
12,850
(1,472)
11,378
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS The table below shows changes in these allowances during the year.
Millions of euro
Opening balance at Jan. 1, 2013
Charge for the year
Utilized
Unused amounts reversed
Other changes
Closing balance at Dec. 31, 2013
Opening balance at Jan. 1, 2014
Charge for the year
Utilized
Unused amounts reversed
Other changes
Closing balance at Dec. 31, 2014
1,410
829
(546)
(176)
(45)
1,472
1,472
864
(529)
(120)
(25)
1,662
Note 41 “Risk management” provides additional information on the ageing of receivables past due but not impaired.
40.1.2 Available for sale financial assets
The following table shows available for sale financial assets by nature, broken down into current and non-current financial
assets.
Millions of euro
Equity investments in other companies
Available for sale securities
Service concession arrangements
Total
Notes
22
27.1
22
Changes in financial assets available for sale
Millions of euro
Opening balance at Jan. 1, 2014
Increases
Decreases
Changes in fair value through OCI
Reclassifications
Other changes
Closing balance at Dec. 31, 2014
Non-current
Current
2014
2013 restated
Notes
2014
2013 restated
213
-
669
882
285
22
-
27.1
618
903
-
140
-
140
Non-current
903
104
(221)
(19)
105
10
882
-
17
-
17
Current
17
-
-
-
-
123
140
235
40.1.3 Held to maturity financial assets
At December 31, 2014 financial assets held to maturity
the previous year. The item reports non-current securities
amounted to €139 million, up €11 million compared with
held by Enel.Re.
40.1.4 Financial assets at fair value through profit or loss
The following table shows financial assets at fair value through profit or loss by nature, broken down into current and non-
current financial assets.
Millions of euro
Non-current
Current
Notes
40.1.5
Derivatives at FVTPL
Financial investments in funds
Total financial assets designated upon initial
recognition (fair value option)
TOTAL
at
Dec. 31, 2014
at
Dec. 31, 2013
restated
Notes
at
Dec. 31, 2014
at
Dec. 31, 2013
restated
5
40
40
45
5
40.1.5
4,930
2,579
24
24
29
-
-
-
-
4,930
2,579
40.1.5 Derivative financial assets
The following table shows the notional amount and the fair
tionship and hedged risk, broken down into current and
value of derivative financial assets, by type of hedge rela-
non-current financial assets.
Millions of euro
Non-current
Current
Notional amount
Fair value
Notional amount
Fair value
at
Dec. 31, 2014
at
Dec. 31,
2013
restated
at
Dec. 31, 2014
at
Dec. 31,
2013
restated
at
Dec. 31, 2014
at
Dec. 31,
2013
restated
at
Dec. 31, 2014
at
Dec. 31,
2013
restated
Fair value hedge
derivatives:
- on interest rates
Total
Cash flow hedge
derivatives:
- on interest rates
- on exchange rates
- on commodities
Total
Trading derivatives:
- on interest rates
- on exchange rates
- on commodities
Total
TOTAL DERIVATIVE
FINANCIAL ASSETS
883
883
1,045
1,045
106
9,078
702
9,886
50
121
3
174
1,236
3,973
137
5,346
30
-
58
88
55
55
5
1,163
107
1,275
3
2
-
5
45
45
35
347
12
394
2
-
3
5
21
21
76
76
400
2,662
2,755
5,817
15
2,094
14,827
16,936
22
1,506
149
1,677
-
1,807
13,990
15,797
-
-
-
244
326
570
1
157
4,772
4,930
4
4
5
92
10
107
-
46
2,533
2,579
10,943
6,479
1,335
444
22,774
17,550
5,500
2,690
For more details on derivative financial assets, please see note 43 “Derivatives and hedge accounting”.
236
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS 40.2 Financial liabilities by category
The following table shows the carrying amount for each ca-
showing hedging derivatives and derivatives measured at
tegory of financial liability provided for under IAS 39, bro-
fair value through profit or loss separately.
ken down into current and non-current financial liabilities,
Millions of euro
Financial liabilities measured at amortized cost
Financial liabilities at fair value through profit or loss
Derivative financial liabilities at FVTPL
Total financial liabilities at fair value through profit
or loss
Derivative financial liabilities designated as hedging
instruments
Fair value hedge derivatives
Cash flow hedge derivatives
Total derivative financial liabilities designated as
hedging instruments
TOTAL
Notes
40.2.1
40.4
40.4
40.4
Non-current
Current
2014
2013 restated
2014
2013 restated
48,655
50,905
21,796
19,505
35
35
-
2,406
2,406
51,096
25
25
2
2,189
2,191
53,121
4,971
2,500
4,971
2,500
-
470
470
27,237
-
440
440
22,445
For more information on fair value measurement, please see note 46 “Liabilities measured at fair value”.
40.2.1 Financial liabilities measured at amortized cost
The following table shows financial liabilities at amortized cost by nature, broken down into current and non-current finan-
cial liabilities.
Millions of euro
Long-term borrowings
Short-term borrowings
Trade payables
Payables for construction contracts
Notes
40.3.1
40.3.2
36
39
Non-current
Current
2014
2013 restated
Notes
2014
2013 restated
48,655
50,905
40.3.1
-
-
-
-
-
-
40.3.2
36
39
5,125
3,252
4,658
2,484
13,419
12,363
317
560
Total
48,655
50,905
21,796
19,505
237
40.3 Borrowings
40.3.1 Long-term borrowings (including the current portion due within 12 months) -
€53,780 million
The following table reports the carrying amount and fair
the associated market data for the reporting date, including
value for each category of debt, including the portion fal-
the credit spreads of Enel SpA.
ling due within 12 months. For listed debt instruments, the
The table below reports the situation of long-term bor-
fair value is given by official prices. For unlisted debt instru-
rowings and repayment schedules at December 31, 2014,
ments, fair value is determined using valuation techniques
broken down by type of borrowing and interest rate.
appropriate for each category of financial instrument and
Millions of euro
Nominal
value
Carrying
amount
Current
portion
Portion
due in
more than
12 months Fair value
Nominal
value
Carrying
amount
Current
portion
Portion
due in
more
than 12
months
Changes
in
carrying
amount
Fair value
at Dec. 31, 2014
at Dec. 31, 2013 restated
Bonds:
- listed, fixed rate
32,155
31,897
2,561
29,336
37,847
31,021
30,729
467
30,262
33,690
1,168
- listed, floating rate
5,722
5,692
1,432
4,260
5,982
6,545
6,506
1,134
5,372
6,832
(814)
- unlisted, fixed rate
4,926
4,885
-
4,885
5,808
5,480
5,463
986
4,477
5,827
(578)
- unlisted, floating
rate
1,331
1,331
63
1,268
1,263
1,434
1,433
61
1,372
1,299
(102)
Total bonds
44,134
43,805
4,056
39,749
50,900
44,480
44,131
2,648
41,483
47,648
(326)
Bank borrowings:
- fixed rate
945
926
47
879
1,170
952
940
33
907
952
(14)
- floating rate
6,861
6,839
708
6,131
7,026
7,615
7,605
860
6,745
7,580
(766)
- use of revolving
credit lines
Total bank
borrowings
Non-bank
borrowings:
81
81
69
12
70
1,078
1,078
857
221
1,020
(997)
7,887
7,846
824
7,022
8,266
9,645
9,623
1,750
7,873
9,552
(1,777)
- fixed rate
1,723
1,723
186
1,537
1,824
1,314
1,314
- floating rate
406
406
59
347
420
495
495
127
133
1,187
1,391
362
568
409
(89)
Total non-bank
borrowings
Total fixed-rate
borrowings
Total floating-rate
borrowings
2,129
2,129
245
1,884
2,244
1,809
1,809
260
1,549
1,959
320
39,749
39,431
2,794
36,637
46,649
38,767
38,446
1,613
36,833
41,860
985
14,401
14,349
2,331
12,018
14,761
17,167
17,117
3,045
14,072
17,299
(2,768)
TOTAL
54,150
53,780
5,125
48,655
61,410
55,934
55,563
4,658
50,905
59,159
(1,783)
The balance for bonds regards, net of €776 million, the
portfolio, while Enel Insurance NV (formerly Enel.Re) holds
unlisted floating-rate “Special series of bonds reserved for
bonds issued by Enel SpA totaling €30 million.
employees 1994-2019”, which the Parent Company holds in
238
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS The table below reports long-term financial debt by currency and interest rate.
Millions of euro
Carrying amount
Nominal value
Carrying amount
Current average
nominal interest
rate
Current effective
interest rate
at Dec. 31, 2014
at Dec. 31, 2013
restated
at Dec. 31, 2014
35,221
35,424
38,267
Euro
US dollar
Pound sterling
Colombian peso
Brazilian real
Swiss franc
Chilean peso/UF
Peruvian sol
Russian ruble
Japanese yen
Other currencies
3.9%
6.4%
6.1%
8.1%
12.7%
2.9%
10.6%
6.5%
7.9%
2.3%
4.1%
6.7%
6.2%
8.1%
13.0%
2.9%
12.6%
6.5%
8.1%
2.4%
8,485
5,437
1,663
1,149
606
458
363
69
237
92
8,559
5,508
1,663
1,157
607
470
363
69
238
92
8,467
4,486
1,662
746
593
461
302
243
238
98
17,296
55,563
Total non-euro currencies
TOTAL
18,559
53,780
18,726
54,150
Long-term financial debt denominated in currencies other
Brazilian reais, partly offset by repayments of loans falling
than the euro increased by €1,263 million. The change is lar-
due denominated in Russian rubles.
gely attributable to new borrowing in pounds sterling and
239
at Dec. 31, 2013 restated
Impact of hedging
Carrying amount
Nominal value
38,267
38,525
3,1%
8,467
4,486
1,662
746
593
461
302
243
238
98
17,296
55,563
8,504
4,546
1,662
748
595
473
302
243
238
98
17,409
55,934
%
68.9%
15.2%
8.1%
3.0%
1.3%
1.1%
0.8%
0.5%
0.4%
0.4%
0.2%
31.1%
100.0%
11,243
(6,633)
(4,546)
-
5
(595)
435
(6)
335
(238)
-
-
(11,243)
49,768
1,871
1,662
753
-
-
908
296
578
-
98
89.0%
3.3%
3.0%
1.3%
1.6%
0.5%
1.0%
-
-
-
0.2%
6,166
55,934
11.0%
100.0%
The following table shows the effect of the hedges of foreign currency risk on the gross long-term debt structure.
Long-term financial debt by currency after hedging
Millions of euro
at Dec. 31, 2014
Initial debt structure
Carrying amount Nominal value
35,221
35,424
8,485
5,437
1,663
1,149
606
458
363
69
237
92
8,559
5,508
1,663
1,157
607
470
363
69
238
92
Impact of
hedging
instruments
11,787
(5,972)
(5,508)
-
-
(607)
206
-
332
(238)
-
%
65.4%
15.8%
10.2%
3.1%
2.1%
1.1%
0.9%
0.7%
0.1%
0.4%
0.2%
Debt structure after hedging
Initial debt structure
instruments
Debt structure after hedging
47,211
2,587
-
1,663
1,157
-
676
363
401
-
92
87.2%
4.8%
-
3.1%
2.1%
-
1.2%
0.7%
0.7%
-
0.2%
18,559
53,780
18,726
54,150
34.6%
(11,787)
100.0%
-
6,939
54,150
12.8%
100.0%
Euro
US dollar
Pound sterling
Colombian peso
Brazilian real
Swiss franc
Chilean peso/UF
Peruvian sol
Russian ruble
Japanese yen
Other currencies
Total non-euro
currencies
TOTAL
240
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS The following table shows the effect of the hedges of foreign currency risk on the gross long-term debt structure.
Long-term financial debt by currency after hedging
Carrying amount Nominal value
35,221
35,424
8,485
5,437
1,663
1,149
606
458
363
69
237
92
8,559
5,508
1,663
1,157
607
470
363
69
238
92
Euro
US dollar
Pound sterling
Colombian peso
Brazilian real
Swiss franc
Chilean peso/UF
Peruvian sol
Russian ruble
Japanese yen
Other currencies
Total non-euro
currencies
TOTAL
%
65.4%
15.8%
10.2%
3.1%
2.1%
1.1%
0.9%
0.7%
0.1%
0.4%
0.2%
Impact of
hedging
11,787
(5,972)
(5,508)
(607)
206
332
(238)
-
-
-
-
-
47,211
2,587
1,663
1,157
-
-
676
363
401
-
92
87.2%
4.8%
3.1%
2.1%
1.2%
0.7%
0.7%
-
-
-
0.2%
18,559
53,780
18,726
54,150
34.6%
(11,787)
100.0%
6,939
54,150
12.8%
100.0%
Millions of euro
at Dec. 31, 2014
at Dec. 31, 2013 restated
Initial debt structure
instruments
Debt structure after hedging
Initial debt structure
Impact of hedging
instruments
Debt structure after hedging
3,1%
Carrying amount
Nominal value
38,267
38,525
8,467
4,486
1,662
746
593
461
302
243
238
98
17,296
55,563
8,504
4,546
1,662
748
595
473
302
243
238
98
17,409
55,934
%
68.9%
15.2%
8.1%
3.0%
1.3%
1.1%
0.8%
0.5%
0.4%
0.4%
0.2%
11,243
(6,633)
(4,546)
-
5
(595)
435
(6)
335
(238)
-
49,768
1,871
-
1,662
753
-
908
296
578
-
98
89.0%
3.3%
-
3.0%
1.3%
-
1.6%
0.5%
1.0%
-
0.2%
31.1%
100.0%
(11,243)
-
6,166
55,934
11.0%
100.0%
241
Change in the nominal value of long-term debt
Millions of euro
Nominal value
Repayments
at Dec. 31, 2013
restated
Change in own
bonds
Change in
scope of
consolidation
New
financing
Exchange
rate
differences
Reclassification
from/to assets/
(liabilities) held
for sale
Nominal
value
at Dec. 31,
2014
Bonds
Bank borrowings
Other borrowings
Total financial debt
44,480
9,645
1,809
55,934
(3,873)
(2,053)
(287)
(6,213)
(42)
-
-
(42)
-
-
169
169
2,407
1,851
324
4,582
1,162
1
115
1,278
-
44,134
(1,557)
(1)
7,887
2,129
(1,558)
54,150
Compared with December 31, 2013, the nominal value of
> 5,000 million Russian rubles (equal to €69 million) in re-
long-term debt at December 31, 2014 decreased by €1,784
spect of a fixed-rate bond issued by Enel Russia maturing
million, the net effect of €6,213 million in repayments,
in June 2014;
€4,582 million in new borrowings and €1,278 million in
> 135 million Peruvian sols (equal to €37 million) in respect
exchange rate losses, of which €169 million due to the
of bonds issued by Edelnor and maturing in 2014.
change in the scope of consolidation, mainly attributable to
the acquisition of a number of companies in the renewable
The main repayments of bank borrowings in the year inclu-
generation sector in the United States that had previously
ded the following:
entered into tax partnership agreements, and €1,558 mil-
> €817 million in respect of repayments of bank bor-
lion due to reclassifications to assets/liabilities held for sale
rowings and revolving credit lines of Endesa;
(Slovenské elektrárne).
> €321 million in respect of repayments of subsidized loans
by Endesa;
The main repayments in 2014 concerned bonds in the
> €338 million in respect of repayments of subsidized loans
amount of €3,873 million, bank borrowings totaling €2,053
by Enel Distribuzione and Enel Produzione;
million and other borrowings for €287 million.
> €450 million in respect of repayments of credit lines by
Slovenské elektrárne.
More specifically, the main bonds maturing in 2014 included:
> $1,250 million (equal to €1,030 million) in respect of a
The main financing operations in 2014 included the fol-
fixed-rate bond issued by Enel Finance International, ma-
lowing:
turing in October 2014;
> in January, Enel SpA issued hybrid financial instruments
> €1,000 million in respect of a fixed-rate bond issued by
with the following characteristics:
Enel SpA, maturing in June 2014;
- €1,000 million fixed-rate 5%, maturing on January 15,
> €762 million in respect of the repurchase of bonds secu-
2075 with a call option at January 15, 2020;
red by Enel by Enel Finance International NV, on October
- £500 million (equal to €642 million) fixed-rate 6.625%,
28, 2014, as part of the optimization of finance opera-
maturing on September 15, 2076 with a call option at
tions and the active management of maturities and the
September 15, 2021;
cost of funds;
> in April, Empresa Nacional de Electricidad SA issued a
> $350 million (equal to €288 million) in respect of a fixed-
$400 million (equal to €329 million) fixed-rate bond, ma-
rate bond issued by Enersis, maturing in January 2014;
turing on April 15, 2024;
> 250,000 million Colombian pesos (equal to €86 million)
> on May 9, IFC granted a 10-year $200 million loan (equal
in respect of bond issued by Codensa, maturing in March
to €165 million) to Enel Brasil Participações;
2014;
> on December 3, BBVA granted a 7-year floating-rate loan
> $105 million (equal to €86 million) in respect of a fixed-
of about $150 million (equal to €124 million) to the Chi-
rate bond issued by International Endesa BV, maturing in
lean company Empresa Eléctrica Panguipulli SA;
September 2014;
> on July 16, the Brazilian company Ampla issued a 5-year
> $105 million (equal to €86 million) in respect of a fixed-
300 million Brazilian reais floating-rate bond (equal to
rate bond issued by International Endesa BV maturing in
€93 million) on the local market;
2039 and repaid in advance in February 2014;
> in May, Emgesa SA issued a floating-rate bond totaling
242
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS 240,000 million Colombian pesos (equal to €83 million),
186,000 million Colombian pesos (equal to €64 million),
maturing on May 16, 2020;
maturing on May 16, 2024;
> in April and June, Edelnor SA issued a number of fixed-
> in May, Emgesa SA issued a floating-rate bond totaling
rate bonds totaling 260 million Peruvian sols (equal to
163,000 million Colombian pesos (equal to €56 million),
€72 million), maturing by June 12, 2023;
maturing on May 16, 2030.
> in May, Emgesa SA issued a floating-rate bond totaling
The table below shows the main characteristics of financial transactions carried out in 2014:
Bonds:
- hybrid bond
- hybrid bond
- international bond
Total bonds
Bank borrowings:
Total bank borrowings
Non-bank borrowings:
Total non-bank borrowings
Issuer/grantor
Issue/grant
date
Amount in
millions of
euro
Currency
Interest rate
Interest rate
type
Maturity
Enel SpA
1/15/2014
1,000
Enel SpA
1/15/2014
Endesa Chile
4/15/2014
Enel Green Power
Brazil
12/18/2014
EGPI BV
3/27/2014
EGPI BV
8/14/2014
Slovenské elektrárne
5/30/2014
Slovenské elektrárne
1/29/2014
Slovenské elektrárne
5/30/2014
Slovenské elektrárne
7/1/2014
Enel Green Power
North America
Enel Green Power
North America
11/26/2014
4/1/2014
602
290
1,892
131
153
150
183
151
170
137
1,075
129
179
308
EUR
GBP
USD
BRL
EUR
EUR
5.00%
6.62%
4.25%
Fixed-rate
1/15/2020
Fixed-rate
9/15/2021
Fixed-rate
4/15/2024
CDI Overnight +
204 bp Floating-rate
9/15/2024
Euribor 6M
+210 bp Floating-rate
3/27/2026
Euribor 6M +
60 bp Floating-rate
2/14/2029
EUR/RUB
10.55%
Fixed-rate 11/30/2021
Euribor + 180
bp Floating-rate
1/29/2019
Euribor + 275
bp Floating-rate 11/30/2021
Euribor + 134
bp Floating-rate
1/23/2021
7.57%
Fixed-rate 11/26/2024
8.26%
Fixed-rate 12/31/2023
EUR
EUR
EUR
USD
USD
The main financing contracts finalized in 2014 include:
- €150 million with Kutxabank maturing on February 18,
> on April 24, 2014, Enel SpA and UniCredit SpA agreed a
2018;
€550 million credit line, which replaced a credit line of
- €100 million with Bankinter maturing on March 27,
€400 million granted on July 18, 2013 and falling due in
2018;
July 2015;
- €100 million with Banco Popular maturing on March
> on September 26, 2014, Endesa SA agreed a 12-year
29, 2018;
€300 million loan with the European Investment Bank;
- €50 million with Ibercaja maturing on January 15,
> in December 2014 Endesa SA agreed the following bila-
2018.
teral credit facilities:
The Group’s main long-term financial liabilities are gover-
- €500 million with Banco Santander maturing on March
ned by covenants containing undertakings by the borro-
16, 2018;
wers (Enel, Endesa and the other Group companies) and
- €500 million with CaixaBank maturing on April 30,
in some cases the Parent Company as guarantor that are
2018;
commonly adopted in international business practice. The
- €300 million with BBVA maturing on March 16, 2018;
main covenants regard the bond issues carried out within
- €200 million with Banco Sabadell maturing on Februa-
the framework of the Global Medium-Term Notes program,
ry 2, 2018;
loans granted by the EIB and Cassa Depositi e Prestiti, the
243
€10 billion revolving line of credit agreed in April 2010, the
> material changes clauses, under which the occurrence of
Forward Start Facility Agreement entered into on February
a specified event (mergers, spin-offs, disposal or transfer
8, 2013 in the amount of €9.44 billion and issues of subordi-
of business units, changes in company control structure,
nated unconvertible hybrid bonds.
etc.) gives rise to the consequent adjustment of the con-
To date none of the covenants have been triggered.
tract, without which the loan shall become repayable im-
The main commitments in respect of the bond issues in the
mediately without payment of any commission;
Global Medium-Term Notes program can be summarized as
> requirements to report periodically to the EIB;
follows:
> requirement for insurance coverage and maintenance of
> negative pledge clauses under which the issuer may not
property, possession and use of the works, plant and ma-
establish or maintain (except under statutory require-
chinery financed by the loan over the entire term of the
ment) mortgages, liens or other encumbrances on all or
agreement;
part of its assets to secure any listed bond or bond for
> contract termination clauses, under which the occur-
which listing is planned unless the same guarantee is
rence of a specified event (serious inaccuracies in docu-
extended equally or pro rata to the bonds in question;
mentation presented in support of the contract, failure
> pari passu clauses, under which the securities constitute
to repay at maturity, suspension of payments, insolvency,
a direct, unconditional and unsecured obligation of the
special administration, disposal of assets to creditors, dis-
issuer and are issued without preferential rights among
solution, liquidation, total or partial disposal of assets,
them and have at least the same seniority as other pre-
declaration of bankruptcy or composition with creditors
sent and future bonds of the issuer itself;
or receivership, substantial decrease in equity, etc.) trig-
> specification of default events, whose occurrence (e.g. in-
gers immediate repayment.
solvency, failure to pay principal or interest, initiation of
liquidation proceedings, etc.) constitutes a default;
In 2009 Cassa Depositi e Prestiti granted a loan to Enel Di-
> under cross-default clauses, the occurrence of a default
stribuzione that was amended in 2011. The main covenants
event in respect of any financial liability (above a th-
governing the loan and the guarantee issued by the Parent
reshold level) issued by the issuer or “significant” subsi-
Company can be summarized as follows:
diaries (i.e. consolidated companies whose gross reve-
> a termination and acceleration clause, under which the
nues or total assets are at least 10% of gross consolidated
occurrence of a specified event (such as failure to pay
revenues or total consolidated assets) constitutes a de-
principal or interest installments, breach of contract obli-
fault in respect of the liability in question, which becomes
gations or occurrence of a substantive prejudicial event,
immediately repayable;
etc.) entitles Cassa Depositi e Prestiti to terminate the
> early redemption clauses in the event of new tax requi-
loan;
rements, which permit early redemption at par of all
> a clause forbidding Enel or its significant subsidiaries
outstanding bonds.
(defined in the contract and the guarantee as subsidia-
ries pursuant to Article 2359 of the Italian Civil Code or
The main covenants governing the loans granted to a num-
consolidated companies whose turnover or total gross
ber of Group companies by the EIB can be summarized as
assets are at least 10% of consolidated turnover or con-
follows:
solidated gross assets) from establishing additional liens,
> negative pledge clauses, under which Enel undertakes
guarantees or other encumbrances except for those ex-
not to establish or grant to third parties additional gua-
pressly permitted unless Cassa Depositi e Prestiti gives it
rantees or privileges with respect to those already establi-
prior consent;
shed in the individual contracts by the company or other
> clauses requiring Enel to report to Cassa Depositi e Presti-
subsidiaries of the Group, unless an equivalent guarantee
ti both periodically and upon the occurrence of specified
is extended equally or pro rata to the loans in question;
events (such as a change in Enel’s credit rating, or breach
> clauses that require the guarantor (whether Enel SpA or
in an amount above a specified threshold in respect of
banks acceptable to the EIB) to maintain its rating above
any financial debt contracted by Enel, Enel Distribuzione
a specified grade; in the case of guarantees provided by
or any of their significant subsidiaries). Violation of such
Enel SpA, the Group’s equity may not fall below a speci-
obligation entitles Cassa Depositi e Prestiti to exercise an
fied level;
acceleration clause.
244
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS > a clause, under which, at the end of each measurement
The main covenants covering the hybrid bonds can be sum-
period (half yearly), Enel’s consolidated net financial debt
marized as follows:
shall not exceed 4.5 times annual consolidated EBITDA.
> specification of default events, whose occurrence (e.g.
failure to pay principal or interest, insolvency, initiation
The main covenants for the €10 billion revolving line of cre-
of liquidation proceedings, etc.) constitutes a default in
dit and the Forward Start Facility Agreement are substan-
respect of the liability in question, which in some cases
tially similar and can be summarized as follows:
becomes immediately repayable;
> negative pledge clauses under which the borrower (and
> subordination clauses: each hybrid bond is subordinate
its significant subsidiaries) may not establish or maintain
to all other bonds issued by the company and ranks pari
(with the exception of permitted guarantees) mortgages,
passu with all other hybrid financial instruments issued,
liens or other encumbrances on all or part of its assets to
being senior only to equity instruments;
secure any present or future financial liability;
> prohibition on mergers with other companies, the sale or
> pari passu clauses, under which the payment underta-
leasing of all or a substantial part of the company’s assets
kings constitute a direct, unconditional and unsecured
to another company, unless the latter succeeds in all obli-
obligation of the borrower and bear no preferential
gations of the issuer.
rights among them and have at least the same seniority
The undertakings in respect of the bond issues carried out
as other present and future loans;
by Endesa Capital under the Global Medium-Term Notes
> change of control clause, which is triggered in the event
program can be summarized as follows:
(i) control of Enel is acquired by one or more parties other
> cross-default clauses under which debt repayment would
than the Italian State or (ii) Enel or any of its subsidiaries
be accelerated in the case of failure to make payment
transfer a substantial portion of the Group’s assets to par-
(above specified amounts) on any financial liability of En-
ties outside the Group such that the financial reliability of
desa or Endesa Capital that is listed or could be listed on
the Group is significantly compromised. The occurrence
a regulated market;
of one of the two circumstances may give rise to (a) the
> negative pledge clauses under which the issuer may not
renegotiation of the terms and conditions of the finan-
establish mortgages, liens or other encumbrances on all
cing or (b) compulsory early repayment of the financing
or part of its assets to secure any financial liability that is
by the borrower;
listed or could be listed on a regulated market, unless an
> specification of default events, whose occurrence (e.g.
equivalent guarantee is extended equally or pro rata to
failure to make payment, breach of contract, false sta-
the bonds in question;
tements, insolvency or declaration of insolvency by the
> pari passu clauses, under which the securities and gua-
borrower or its significant subsidiaries, business closure,
rantees have at least the same seniority as all other pre-
government intervention or nationalization, administra-
sent and future unsecured and unsubordinated securi-
tive proceeding with potential negative impact, illegal
ties issued by Endesa Capital or Endesa.
conduct, nationalization and government expropriation
Finally, the loans granted to Endesa, International Endesa
or compulsory acquisition of the borrower or one of its
BV and Endesa Capital do not contain cross-default clauses
significant subsidiaries) constitutes a default. Unless re-
regarding the debt of subsidiaries in Latin America.
medied within a specified period of time, such default
will trigger an obligation to make immediate repayment
Undertakings in respect of project financing granted to
of the loan under an acceleration clause;
subsidiaries regarding renewables and other subsidiaries
> under cross-default clauses, the occurrence of a default
in Latin America contain covenants commonly adopted in
event in respect of any financial liability (above a th-
international business practice. The main commitments re-
reshold level) of the issuer or “significant” subsidiaries
gard clauses pledging all the assets assigned to the projects
(i.e. consolidated companies whose gross revenues or
in favor of the creditors.
total assets are at least equal to a specified percentage
A residual portion of the debt of Enersis and Endesa Chile
(10% of gross consolidated revenues or total consolida-
(both controlled indirectly by Endesa) is subject to cross-de-
ted assets)) constitutes a default in respect of the liabili-
fault clauses under which the occurrence of a default event
ties in question, which become immediately repayable;
(failure to make payment or breach of other obligations) in
> periodic reporting requirements.
respect of any financial liability of a subsidiary of Enersis or
245
Endesa Chile constitutes a default in respect of the liability
In addition to the foregoing, a number of loans provide for
in question, which becomes immediately repayable.
early repayment in the case of a change of control over En-
In addition, many of these agreements also contain cross-ac-
desa or the subsidiaries.
celeration clauses that are triggered by specific circumstan-
ces, certain government actions, insolvency or judicial ex-
propriation of assets.
40.3.2 Short-term borrowings - €3,252 million
At December 31, 2014 short-term borrowings amounted to €3,252 million, an increase of €768 million on December 31,
2013. They break down as follows.
Millions of euro
Carrying amount
Fair value
Carrying amount
Fair value
Carrying
amount
Fair value
at Dec. 31, 2014
at Dec. 31, 2013 restated
Change
Short-term bank borrowings
Commercial paper
Cash collateral and other financing
on derivatives
Other short-term borrowings
30
2,599
457
166
30
2,599
457
166
118
2,202
119
45
118
2,202
119
45
Short-term borrowings
3,252
3,252
2,484
2,484
(88)
397
338
121
768
(88)
397
338
121
768
Short-term bank borrowings amounted to €30 million. The
lion program of Endesa Latinoamérica (formerly Endesa In-
payables represented by commercial paper relate to issues
ternacional BV) and Enersis.
outstanding at the end of December 2014 in the context
At December 31, 2014 issues under these programs totaled
of the €6,000 million program launched in November 2005
€2,599 million, of which €2,400 million pertaining to Enel
by Enel Finance International and guaranteed by Enel SpA,
Finance International and €199 million to International En-
which was renewed in April 2010, as well as the €3,209 mil-
desa BV.
246
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS 40.4 Derivative financial liabilities
The following table shows the notional amount and the fair
lationship and hedged risk, broken down into current and
value of derivative financial liabilities, by type of hedge re-
non-current financial liabilities.
Millions of euro
Non-current
Current
Notional amount
Fair value
Notional amount
Fair value
at
Dec. 31, 2014
at
Dec. 31,
2013
restated
at
Dec. 31, 2014
at
Dec. 31,
2013
restated
at
Dec. 31, 2014
at
Dec. 31,
2013
restated
at
Dec. 31,
2014
at
Dec. 31,
2013
restated
Fair value hedge
derivatives:
- on exchange rates
Total
Cash flow hedge
derivatives:
- on interest rates
- on exchange rates
- on commodities
Total
Trading derivatives
- on interest rates
- on exchange rates
- on commodities
Total
TOTAL DERIVATIVE
FINANCIAL LIABILITIES
-
-
5
5
-
-
2
2
-
-
-
-
3,635
6,415
742
4,056
8,825
391
10,792
13,272
107
240
20
367
216
14
66
296
554
1,627
225
2,406
21
10
4
35
361
1,821
7
2,189
22
-
3
25
922
341
2,075
3,338
123
2,716
15,307
18,146
1,345
2,943
4,100
8,388
600
2,219
10,582
13,401
-
-
2
4
464
470
75
71
4,825
4,971
-
-
24
260
156
440
51
34
2,415
2,500
11,159
13,573
2,441
2,216
21,484
21,789
5,441
2,940
For more details on derivative financial liabilities, please see note 43 “Derivatives and hedge accounting”.
40.5 Net gains and losses
The following table shows net gains and losses by category of financial instruments, excluding derivatives:
Millions of euro
Available for sale financial assets measured at fair value
Available for sale financial assets measured at amortized cost
Held to maturity financial assets
Loans and receivables
Financial assets at FVTPL
Financial assets held for trading
Financial assets designated upon initial recognition (fair value option)
Total financial assets at FVTPL
Financial liabilities measured at amortized cost
Financial liabilities at FVTPL
Financial liabilities held for trading
Financial liabilities designated upon initial recognition (fair value option)
Total financial liabilities at FVTPL
2014
Net gains/(losses)
Of which impairment/
reversal of impairment
(94)
1
6
(249)
-
6
6
(4,252)
(4)
(28)
(32)
-
-
-
(807)
-
-
-
-
-
-
-
For more details on net gains and losses on derivatives, please see note 10 “Financial income/(expense) from derivatives”.
247
41. Risk management
Financial risk management objectives and policies
As part of its operations, the Enel Group is exposed to a
> the establishment of specific policies set at both the
variety of financial risks, notably market risks (including in-
Group level and at the level of individual Divisions/
terest rate risk, foreign exchange risk and commodity risk),
countries/business lines, which define the roles and re-
credit risk and liquidity risk.
sponsibilities for those involved in managing, monitoring
and controlling risks, ensuring the organizational separa-
The Group’s governance arrangements for financial risk en-
tion of units involved in managing the Group’s business
visage:
and those responsible for managing risk;
> specific internal committees, formed of members of the
> the specification of operational limits at both the Group
Group’s top management and chaired by the CEO, which
level and at the level of individual Divisions/countries/
are responsible for strategic policy-making and oversight
business lines for the various types of risk. These limits are
of risk management;
monitored periodically by the risk management units.
Market risks
Market risk is the risk that the expected cash flows or fair
The Group is also exposed to the risk that changes in the
value of a financial instrument could change owing to chan-
exchange rates between the euro and the main foreign cur-
ges in market prices.
rencies could have an adverse impact on the value in euro of
Market risks are essentially composed of interest rate risk,
performance and financial aggregates denominated in fo-
foreign exchange risk and commodity price risk.
reign currencies, such as costs, revenue, assets and liabilities,
Interest rate risk and foreign exchange risk are primarily ge-
as well as the consolidation values of equity investments
nerated by the presence of financial instruments.
denominated in currencies other than the euro (translation
The main financial liabilities, other than derivatives, held by
risk). As with interest rates, changes in exchange rates can
the Company include bonds, bank borrowings, other bor-
cause variations in the value of financial assets and liabilities
rowings, commercial paper, cash collateral for derivatives
measured at fair value.
transactions, liabilities for construction contracts and trade
payables.
The Group’s policies for managing market risks provide for
The main purpose of those financial instruments is to finan-
the mitigation of the effects on performance of changes in
ce the operations of the Group.
interest rates and exchange rates with the exclusion of tran-
The main financial assets, other than derivatives, held by the
slation risk. This objective is achieved both at the source of
Group include financial receivables, factoring receivables,
the risk, through the strategic diversification of the nature
cash collateral for derivatives transactions, cash and cash
of financial assets and liabilities, and by modifying the risk
equivalents, receivables for construction contracts and tra-
profile of specific exposures with derivatives entered into on
de receivables.
over-the-counter markets.
For more details, please see note 40 “Financial instruments”.
The sources of exposure to interest rate risk and foreign
The risk of fluctuations in commodity prices is generated by
exchange risk did not change with respect to the previous
the volatility of those prices and existing structural correla-
year.
tions, which creates uncertainty about the margin on tran-
sactions in fuels and energy. Price developments are obser-
The nature of the financial risks to which the Group is expo-
ved and analyzed in order to develop the Group’s industrial,
sed is such that changes in interest rates can cause an incre-
financial and commercial strategies and policies.
ase in net financial expense or adverse changes in the value
In order to contain the effects of such fluctuations and
of assets/liabilities measured at fair value.
stabilize margins, Enel develops, in accordance with the
248
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS Group’s policies and risk governance limits, strategies that
strengthening an integrated vision of our business and a
impact the various stages of the industrial process associa-
geographical awareness of sales and trading operations is
ted with the production and sale of electricity and gas, such
consistent with the global environment in which the Group
as advance sourcing and hedging, and plans and techniques
operates, creating opportunities for improvement in both
for hedging financial risks with derivatives. The Group com-
maximizing margins and governing risks.
panies develop strategies for hedging the price risk arising
from trading in commodities and, using financial instru-
As part of its governance of market risks, the Company re-
ments, reduce or eliminate market risk, sterilizing the varia-
gularly monitors the size of the OTC derivatives portfolio
ble components of price. If authorized, they can also engage
in relation to the threshold values set by regulators for the
in proprietary trading in the energy commodities used by
activation of clearing obligations (EMIR - European Market
the Group in order to monitor and enhance their understan-
Infrastructure Regulation 648/2012 of the European Parlia-
ding of the most relevant markets.
ment). During 2014, no overshoot of those threshold values
The organizational structure defined in 2014 provides for
was detected.
a single entity to operate on behalf of the entire Group in
sourcing fuels and selling electricity and gas on wholesale
As part of its measurement of financial risks, the Group
markets, as well as centralizing trading with the direct con-
assesses credit risk, both of the counterparty (Credit Va-
trol of the units involved in that business, which as they also
luation Adjustment or CVA) and its own (Debit Valuation
operate at the local level can maintain effective relationships
Adjustment or DVA), in order to adjust the fair value of
with the markets. The global business line cooperates with
financial instruments measured at fair value for the corre-
units of the holding company designated to steer, monitor
sponding amount of counterparty risk.
and integrate global performance. In order to manage and
For more information, please see note 45 “Assets measured
control market risks associated with energy commodities,
at fair value”.
Interest rate risk
Interest rate risk is the risk that the fair value or expected
not exceed the maturity of the underlying financial liability,
cash flows of a financial instrument will fluctuate because
so that any change in the fair value and/or cash flows of
of changes in market interest rates.
such contracts is offset by a corresponding change in the fair
The main source of interest rate risk for the Enel Group is
value and/or cash flows of the hedged position.
the presence of financial instruments. It manifests itself
Proxy hedging techniques may be used in a number of resi-
primarily as a change in the flows associated with interest
dual circumstances, when the hedging instruments for the
payments on floating-rate financial liabilities, a change in
risk factors are not available on the market or are not suffi-
financial terms and conditions in negotiating new debt in-
ciently liquid. For the purpose of EMIR compliance, in order
struments or as an adverse change in the value of financial
to test the actual effectiveness of the hedging techniques
assets/liabilities measured at fair value, which are typically
adopted, the Group subjects its hedge portfolios to periodic
fixed-rate debt instruments.
statistical assessment.
For more information, please see note 40 “Financial instru-
ments”.
Using interest rate swaps, the Enel Group agrees with the
The exposure to interest rate risk did not change compared
counterparty to periodically exchange floating-rate interest
with the previous year.
flows with fixed-rate flows, both calculated on the same no-
tional principal amount.
The Enel Group manages interest rate risk through the defi-
Floating-to-fixed interest rate swaps transform floating-rate
nition of an optimal financial structure, with the dual goal of
financial liabilities into fixed rate liabilities, thereby neutrali-
stabilizing borrowing costs and containing the cost of funds.
zing the exposure of cash flows to changes in interest rates.
This goal is pursued through the strategic diversification of
Fixed-to-floating interest rate swaps transform fixed rate finan-
the portfolio of financial liabilities by contract type, maturity
cial liabilities into floating-rate liabilities, thereby neutralizing
and interest rate, and modifying the risk profile of specific
the exposure of their fair value to changes in interest rates.
exposures using OTC derivatives, mainly interest rate swaps
Floating-to-floating interest rate swaps permit the exchan-
and interest rate options. The term of such contracts does
ge of floating-rate interest flows based on different indexes.
249
Some structured borrowings have multi-stage interest flows
premium is paid on the contract (zero cost collars).
hedged by interest rate swaps that at the reporting date,
Such contracts are normally used when the fixed interest rate
and for a limited time, provide for the exchange of fixed-
that can be obtained in an interest rate swap is considered
rate interest flows.
too high with respect to Enel’s expectations for future inte-
rest rate developments. In addition, interest rate options are
Interest rate options involve the exchange of interest diffe-
also considered most appropriate in periods of uncertainty
rences calculated on a notional principal amount once cer-
about future interest rate developments because they make
tain thresholds (strike prices) are reached. These thresholds
it possible to benefit from any decrease in interest rates.
specify the effective maximum rate (cap) or the minimum
rate (floor) on the debt as a result of the hedge. Hedging stra-
The following table reports the notional amount of interest
tegies can also make use of combinations of options (collars)
rate derivatives at December 31, 2014 and December 31,
that establish the minimum and maximum rates at the same
2013 broken down by type of contract:
time. In this case, the strike prices are normally set so that no
Millions of euro
Notional amount
Floating-to-fixed interest rate swaps
Fixed-to-floating interest rate swaps
Fixed-to-fixed interest rate swaps
Floating-to-floating interest rate swaps
Interest rate options
Total
2014
5,043
889
100
180
50
6,262
2013 restated
7,175
1,121
100
180
50
8,626
For more details on interest rate derivatives, please see note
interest rate risk is the main risk factor that could impact the
43 “Derivatives and hedge accounting”.
income statement (raising borrowing costs) in the event of
The amount of floating-rate debt that is not hedged against
an increase in market interest rates.
Millions of euro
2014
2013 restated
Floating rate
Fixed rate
Total
Pre-hedge
% Post-hedge
%
Pre-hedge
% Post-hedge
17,656
30.8%
13,396
23.3%
19,651
33.6%
13,536
39,749
69.2%
44,009
76.7%
38,767
66.4%
44,882
57,405
57,405
58,418
58,418
%
23.2%
76.8%
At December 31, 2014, 31% of financial debt was floating
venské elektrárne and the normal amortization of the bor-
rate (34% at December 31, 2013 restated). Taking account of
rowings of Group companies led to a corresponding reduc-
hedges of interest rates considered effective pursuant to the
tion of €2,215 million in interest rate swaps.
IFRS-EU, 23% of net financial debt (23% at December 31, 2013
restated) was exposed to interest rate risk. Including interest
Interest rate risk sensitivity analysis
rate derivatives treated as hedges for management purposes
The Group analyses the sensitivity of its exposure by estima-
but ineligible for hedge accounting, 77% of net financial debt
ting the effects of a change in interest rates on the portfolio
was hedged (77% hedged at December 31, 2013 restated).
of financial instruments.
More specifically, sensitivity analysis measures the potential
These results are in line with the limits established in the risk
impact on profit or loss and on equity of market scenarios
management policy.
that would cause a change in the fair value of derivatives
In 2014 the main maturities of a bond issued by Enel SpA,
or in the financial expense associated with unhedged gross
prepayments by International Endesa BV, borrowings of Slo-
debt.
250
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS These scenarios are represented by parallel increases and
With all other variables held constant, the Group’s profit be-
decreases in the yield curve as at the reporting date.
fore tax would be affected by a change in the level of inte-
There were no changes in the methods and assumptions
rest rates as follows:
used in the sensitivity analysis compared with the previous
year.
Millions of euro
Change in financial expense on gross long-term
floating-rate debt after hedging
Change in fair value of derivatives classified as
non-hedging instruments
Change in fair value of derivatives designated
as hedging instruments
Cash flow hedges
Fair value hedges
2014
Pre-tax impact on profit or loss
Pre-tax impact on equity
Basis points
Increase
Decrease
Increase
Decrease
25
25
25
25
34
7
-
(11)
(34)
(7)
-
11
-
-
70
-
-
-
(70)
-
Foreign exchange risk
Foreign exchange risk is the risk that the fair value or future
fair value and/or cash flows of such contracts offsets the
cash flows of a financial instrument will fluctuate because of
corresponding change in the fair value and/or cash flows of
changes in exchange rates.
the hedged position.
For the companies of the Enel Group, the main source of fo-
Cross currency interest rate swaps are used to transform a
reign exchange risk is the presence of financial instruments
long-term financial liability in foreign currency into an equi-
and cash flows denominated in a currency other than its
valent liability in the currency of account or functional cur-
currency of account and/or functional currency.
rency of the company holding the exposure.
More specifically, foreign exchange risk is mainly generated
Currency forwards are contracts in which the counterparties
with the following transaction categories:
agree to exchange principal amounts denominated in diffe-
> debt denominated in currencies other than the currency
rent currencies at a specified future date and exchange rate
of account or the functional currency entered into by the
(the strike). Such contracts may call for the actual exchan-
holding company or the individual subsidiaries;
ge of the two amounts (deliverable forwards) or payment
> cash flows in respect of the purchase or sale of fuel or
of the difference between the strike exchange rate and
electricity on international markets;
the prevailing exchange rate at maturity (non-deliverable
> cash flows in respect of investments in foreign currency,
forwards). In the latter case, the strike rate and/or the spot
dividends from unconsolidated foreign companies or the
rate may be determined as averages of the official fixings of
purchase or sale of equity investments.
the European Central Bank.
The exposure to foreign exchange risk did not change with
Currency swaps are contracts in which the counterparties
respect to the previous year.
enter into two transactions of the opposite sign at different
For more details, please see note 40 “Financial instruments”.
future dates (normally one spot, the other forward) that
provide for the exchange of principal denominated in dif-
In order to minimize this risk, the Group normally uses a varie-
ferent currencies.
ty of over-the-counter (OTC) derivatives such as cross currency
interest rate swaps, currency forwards and currency swaps.
The following table reports the notional amount of transac-
The term of such contracts does not exceed the maturity of
tions outstanding at December 31, 2014 and December 31,
the underlying financial liability, so that any change in the
2013, broken down by type of hedged item:
251
Millions of euro
Cross currency interest rate swaps (CCIRSs) hedging debt denominated in
currencies other than the euro
Currency forwards hedging foreign exchange risk on commodities
Currency forwards hedging future cash flows in currencies other than euro
Currency swaps hedging commercial paper
Currency forwards hedging loans
Other currency forwards
Total
Notional amount
2014
2013 restated
14,801
4,942
3,552
148
224
-
14,263
4,253
1,906
246
201
423
23,667
21,292
More specifically, these include:
Taking account of hedges of foreign exchange risk, the per-
> CCIRSs with a notional amount of €14,801 million to
centage of debt not hedged against that risk amounted to
hedge the foreign exchange risk on debt denominated
13% at December 31, 2014 (11% at December 31, 2013).
in currencies other than the euro (€14,263 million at De-
cember 31, 2013);
Foreign exchange risk sensitivity analysis
> currency forwards with a total notional amount of €8,494
The Group analyses the sensitivity of its exposure by estima-
million used to hedge the foreign exchange risk associa-
ting the effects of a change in exchange rates on the portfo-
ted with purchases and sales of natural gas, purchases of
lio of financial instruments.
fuel and expected cash flows in currencies other than the
More specifically, sensitivity analysis measures the potential
euro (€6,159 million at December 31, 2013);
impact on profit or loss and equity of market scenarios that
> currency swaps with a total notional amount of €148 mil-
would cause a change in the fair value of derivatives or in
lion used to hedge the foreign exchange risk associated
the financial expense associated with unhedged gross me-
with redemptions of commercial paper issued in currencies
dium/long-term debt.
other than the euro (€246 million at December 31, 2013);
These scenarios are represented by the appreciation/de-
> currency forwards with a total notional amount of €224
preciation of the euro against all of the foreign currencies
million used to hedge the foreign exchange risk associa-
compared with the value observed as at the reporting date.
ted with loans in currencies other than the euro (€201
There were no changes in the methods and assumptions
million at December 31, 2013).
used in the sensitivity analysis compared with the previous
year.
At December 31, 2014, 35% (31% at December 31, 2013) of
With all other variables held constant, the profit before tax
Group long-term debt was denominated in currencies other
would be affected as follows:
than the euro.
Millions of euro
Change in financial expense on gross debt
denominated in foreign currency after hedging
Change in fair value of derivatives classified as
non-hedging instruments
Change in fair value of derivatives designated
as hedging instruments
Cash flow hedges
Fair value hedges
252
2014
Pre-tax impact on profit or loss
Pre-tax impact on equity
Exchange rate
Increase
Decrease
Increase
Decrease
10%
10%
10%
10%
-
85
-
-
-
(103)
-
-
-
-
-
-
(1,900)
2,321
-
-
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS Commodity risk
The Group is exposed to the rsk of fluctuations in the price
companies expressly authorized to do so under corporate
of commodities mainly associated with the purchase of fuel
policies, consist in taking on exposures in energy commo-
for power plants and the purchase and sale of natural gas
under indexed contracts, as well as the purchase and sale of
dities (oil products, gas, coal, CO2 certificates and electricity
in the main European countries) using financial derivatives
electricity at variable prices (indexed bilateral contracts and
and physical contracts traded on regulated and over-the-
sales on the electricity spot market).
counter markets, exploiting profit opportunities through
The exposures on indexed contracts are quantified by bre-
arbitrage transactions carried out on the basis of expected
aking down the contracts that generate exposure into the
market developments.
underlying risk factors.
The commodity risk management processes established at
As regards electricity sold by the Group, Enel mainly uses fi-
the Group level are designed to constantly monitor deve-
xed-price contracts in the form of bilateral physical contracts
lopments in risk over time and to determine whether the
and financial contracts (e.g. contracts for differences, VPP
risk levels, as observed for specific analytical dimensions (for
contracts, etc.) in which differences are paid to the counter-
example, geographical areas, organizational structures, bu-
party if the market electricity price exceeds the strike price
siness lines, etc.), comply with the thresholds consistent with
and to Enel in the opposite case. The residual exposure in
the risk appetite established by top management. These
respect of the sale of energy on the spot market not hedged
operations are conducted within the framework of formal
with such contracts is quantified and managed on the basis
governance rules that establish strict risk limits. Compliance
of an estimation of developments in generation costs. Proxy
with the limits is verified daily by units that are independent
hedging techniques may be used for the industrial portfo-
of those undertaking the transactions. Positions are moni-
lios when the hedging instruments for the risk factors gene-
tored monthly, assessing the Profit at Risk, in the case of in-
rating the exposure are not available on the market or are
dustrial portfolios, and daily, calculating Value at Risk, in the
not sufficiently liquid, while portfolio hedging techniques
case of the trading book.
can be used to assess opportunities for netting intercom-
The risk limits for Enel’s proprietary trading are set in terms
pany flows.
of Value at Risk over a 1-day time horizon and a confidence
The Group mainly uses plain vanilla derivatives for hedging
level of 95%; the sum of the limits for 2014 is equal to about
(more specifically, forwards, swaps, options on commodi-
€33 million.
ties, futures, contracts for differences).
Enel also engages in proprietary trading in order to maintain
The following table reports the notional amount of outstan-
a presence in the Group’s reference energy commodity mar-
ding transactions at December 31, 2014 and December 31,
kets. These operations, which are performed only by Group
2013, broken down by type of instrument:
Millions of euro
Notional amount
Forward and futures contracts
Swaps
Options
Embedded derivatives
Total
2014
26,671
9,359
401
-
36,431
2013 restated
17,526
11,024
264
659
29,473
For more details, please see note 43 “Derivatives and hedge accounting”.
Sensitivity analysis of commodity risk
constant. The analysis assesses the impact of shifts in the
The following table presents the results of the analysis
commodity price curve of +10% and -10%.
of sensitivity to a reasonably possible change in the com-
The impact on pre-tax profit is mainly attributable to the
modity prices underlying the valuation model used in the
change in the prices of gas and oil commodities. The im-
scenario at the same date, with all other variables held
pact on equity is almost entirely due to changes in the pri-
253
ces of coal and gas. The Group’s exposure to changes in
the prices of other commodities is not material.
Millions of euro
2014
Pre-tax impact on profit or loss
Pre-tax impact on equity
Commodity price
Increase
Decrease
Increase
Decrease
Change in fair value of trading derivatives on
commodities
Change in fair value of derivatives on commodities
designated as hedging instruments
10%
10%
(60)
-
(61)
-
-
-
(236)
(276)
Credit risk
The Group’s commercial, commodity and financial opera-
the portfolio, entering into margin agreements that call for
tions expose it to credit risk, i.e. the possibility that an unex-
the exchange of cash collateral and/or using netting arran-
pected change in the creditworthiness of a counterparty
gements. An internal assessment system was used again in
could have an effect on the creditor position, in terms of in-
2014 to apply and monitor operational limits for credit risk,
solvency (default risk) or changes in its market value (spread
approved by the Group Financial Risk Committee in respect
risk).
of financial counterparties at the region/country/business
In recent years, in view of the instability and uncertainty that
line level and at the consolidated level.
have affected the financial markets and an economic crisis
of global proportions, average collection times have trended
To manage credit risk even more effectively, for a number of
upwards. In order to minimize credit risk, the general policy
years the Group has carried out non-recourse assignments
at the Group level provides to the use of uniform criteria in
of receivables, which have mainly involved specific seg-
all the main regions/countries/business lines in measuring
ments of the commercial portfolio and, to a lesser extent,
credit exposures in order to promptly identify any deterio-
invoiced receivables and receivables to be invoiced of com-
ration in the quality of outstanding receivables – identifying
panies operating in other segments of the electricity indust-
any mitigation actions to be taken – and to enable the con-
ry than retail sales.
solidation and monitoring of exposures at the Group level.
All of the above transactions are considered non-recourse
Credit exposures are managed at the region/country/busi-
transactions for accounting purposes and therefore invol-
ness line level by different units, thereby ensuring the neces-
ved the full derecognition of the corresponding assigned
sary segregation of risk management and control activities.
assets from the balance sheet, as the risks and rewards asso-
Monitoring the consolidated exposure is carried out by Enel
ciated with them have been transferred.
SpA.
As regards the credit risk associated with commodity tran-
Concentration of customer credit risk
Trade receivables are generated by the Group’s operations
sactions, a uniform counterparty assessment system is used
in many regions and countries (Italy, Spain, Romania, Latin
at the Group level, with local level implementation. Since
America, Russia, France, North America, etc.) with a base of
2013, portfolio limits approved by the Group Credit Risk
customers and counterparties that is highly diversified, whe-
Committee have been applied and monitored at the region/
ther geographically, sectorally (industrial companies, energy
country/business line level and at the consolidated level.
companies, enterprises in retail trade, tourism, communica-
tions, government entities, etc.) or by size (large corporate,
For the credit risk generated by financial transactions, in-
small and medium-sized enterprises, residential customers).
cluding those in derivatives, risk is minimized by selecting
Through its subsidiaries, Enel has more than 60 million cu-
counterparties with high standing from among leading na-
stomers or counterparties with whom it has generally gra-
tional and international financial institutions, diversifying
nular credit exposures.
254
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS Financial assets past due but not impaired
Millions of euro
Impaired trade receivables
Not past due and not impaired trade receivables
Past due but not impaired trade receivables:
- less than 3 months
- from 3 months to 6 months
- from 6 months to 12 months
- from 12 months to 24 months
- more than 24 months
Total
Liquidity risk
2014
1,662
8,380
3,642
1,416
282
399
489
1,056
13,684
Liquidity risk is the risk that the Group will encounter diffi-
treasury functions (with the exception of the Endesa Group,
culty in meeting obligations associated with financial liabi-
where those functions are performed by Endesa SA and its
lities that are settled by delivering cash or another financial
subsidiaries Endesa Internacional BV and Endesa Capital
asset.
SA), guaranteeing access to the money and capital markets.
The objectives of liquidity risk management policies are:
The Group has undertaken a number of initiatives to opti-
> ensuring an appropriate level of liquidity for the Group,
mize working capital and the associated cash flows. More
minimizing the associated opportunity cost;
specifically, on the basis of the consultation document
> maintaining a balanced debt structure in terms of the
618/2014/R/EEL of the Authority for Electricity, Gas and the
maturity profile and funding sources.
Water System of December 11, 2014 (finalized on January
In the short term, liquidity risk is mitigated by maintaining
16, 2015) concerning the entry into force of the new Grid
an appropriate level of unconditionally available resources,
Code, which provides for the possibility of extending the
including liquidity and short-term deposits, available com-
deadlines for payments due from distribution companies
mitted credit lines and a portfolio of highly liquid asset.
to the Equalization Fund for the restitution of revenue in
In the long term, liquidity risk is mitigated by maintaining a
respect of general system costs, Enel Distribuzione settled
balanced maturity profile for our debt, access to a range of
system costs for October 2014, totaling €1.2 billion, in Ja-
sources of funding on different markets, in different curren-
nuary 2015.
cies and with diverse counterparties.
At the Group level, Enel SpA (directly and through its sub-
The Group holds the following undrawn lines of credit:
sidiary Enel Finance International NV) performs centralized
Millions of euro
Committed credit lines
Uncommitted credit lines
Commercial paper
Total
at Dec. 31, 2014
at Dec. 31, 2013 restated
Expiring within one
year
Expiring beyond
one year
Expiring within one
year
Expiring beyond
one year
671
425
6,727
7,823
13,456
-
-
13,456
494
795
7,088
8,377
14,912
-
-
14,912
Committed credit lines amounted to €14,127 million at the
available resources came to €21,279 million, of which €6,727
Group level, with €13,456 million expiring after 2015. Total
million in commercial paper.
255
Maturity analysis
The table below summarizes the maturity profile of the Group’s long-term debt.
Millions of euro
Maturing in
Bonds:
- listed, fixed rate
- listed, floating rate
- unlisted, fixed rate
- unlisted, floating rate
Total bonds
Bank borrowings:
- fixed rate
- floating rate
- use of revolving credit lines
Total bank borrowings
Non-bank borrowings:
- fixed rate
- floating rate
Total non-bank borrowings
Less than 3
months
From 3
months to 1
year
2016
2017
2018
2019
Beyond
1,012
1,387
-
-
1,549
45
-
63
3,502
1,182
-
64
2,466
384
1,233
65
5,132
796
-
66
2,399
1,657
4,748
4,148
5,994
5
134
-
139
49
13
62
42
574
69
685
137
46
183
81
714
9
804
185
70
255
63
496
-
559
161
66
227
304
731
3
1,038
163
39
202
2,137
238
1,434
313
4,122
60
562
-
622
134
33
167
16,099
1,660
2,218
760
20,737
371
3,628
-
3,999
894
139
1,033
TOTAL
2,600
2,525
5,807
4,934
7,234
4,911
25,769
Commitments to purchase commodities
In conducting its business, the Enel Group has entered into
The following table reports the undiscounted cash flows as-
contracts to purchase specified quantities of commodities
sociated with outstanding commitments at December 31,
at a certain future date for its own use, which qualify for the
2014.
own use exemption provided for under IAS 39.
Millions of euro
at Dec. 31, 2014
2015-2019
2020-2024
2025-2029
Beyond
Commitments to purchase commodities:
- electricity
- fuel
Total
54,384
63,605
117,989
20,142
35,718
55,860
10,954
16,468
27,422
7,725
8,289
15,563
3,130
16,014
18,693
42. Offsetting financial assets and financial liabilities
At December 31, 2014, the Group did not hold offset positions in assets and liabilities, as it is not the Enel Group’s policy to
settle financial assets and liabilities on a net basis.
256
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS 43. Derivatives and hedge accounting
43.1 Derivatives designated as hedging instruments
Derivatives are initially recognized at fair value, at the trade
from financial instruments to which the Company is expo-
date of the contract, and are subsequently re-measured at
sed, please see note 41 “Risk management”.
fair value.
The method for recognizing the resulting gain or loss de-
pends on whether the derivative is designated as a hedging
Cash flow hedges
Cash flow hedges are used in order to hedge the Group’s
instrument, and if so, the nature of the item being hedged.
exposure to changes in future cash flows that are attributa-
Hedge accounting is applied to derivatives entered into in
ble to a particular risk associated with an asset, a liability or
order to reduce risks such as interest rate risk, exchange rate
a highly probable transaction that could affect profit or loss.
risk, commodity risk, credit risk and equity risk when all the
The effective portion of changes in the fair value of deriva-
criteria provided for under IAS 39 are met.
tives that are designated and qualify as cash flow hedges is
At the inception of the transaction, the Group documents
recognized in other comprehensive income. The gain or loss
the relationship between hedging instruments and hedged
relating to the ineffective portion is recognized immediately
items, as well as its risk management objectives and stra-
in the income statement.
tegy. The Group also analyzes, both at hedge inception and
Amounts accumulated in equity are reclassified to profit or
on an ongoing systematic basis, the effectiveness of hedges
loss in the period when the hedged item affects profit or loss.
using prospective and retrospective tests in order to deter-
When a hedging instrument expires or is sold, or when a
mine whether hedging instruments are highly effective in
hedge no longer meets the criteria for hedge accounting
offsetting changes in the fair values or cash flows of hedged
but the hedged item has not expired or been cancelled,
items.
any cumulative gain or loss existing in equity at that time
Depending on the nature of the risks to which it is exposed,
remains in equity and is recognized when the forecast tran-
the Group designates derivatives as hedging instruments in
saction is ultimately recognized in the income statement.
one of the following hedge relationships.
When a forecast transaction is no longer expected to occur,
> cash flow hedge derivatives in respect of the risk of: i)
the cumulative gain or loss that was reported in equity is
changes in the cash flows associated with long-term
immediately transferred to profit or loss.
floating-rate debt; ii) changes in the exchange rates
associated with long-term debt denominated in a cur-
The Group currently uses these hedge relationships to mini-
rency other than the currency of account or the functio-
mize the volatility of profit or loss.
nal currency in which the company holding the financial
liability operates; iii) changes in the price of fuels deno-
minated in a foreign currency; iv) changes in the price of
Fair value hedges
Fair value hedges are used to protect the Group against ex-
forecast electricity sales at variable prices; and v) chan-
posures to adverse changes in the fair value of assets, liabili-
ges in the price of transactions in coal and petroleum
ties or firm commitments attributable to a particular risk that
commodities;
could affect profit or loss.
> fair value hedge derivatives involving the hedging of ex-
Changes in the fair value of derivatives that qualify and are
posures to changes in the fair value of an asset, a liability
designated as hedging instruments are recognized in the in-
or a firm commitment attributable to a specific risk;
come statement, together with changes in the fair value of
> derivatives hedging a net investment in a foreign ope-
the hedged item that are attributable to the hedged risk.
ration (NIFO), involving the hedging of exposures to
If the hedge is ineffective or no longer meets the criteria for
exchange rate volatility associated with investments in
hedge accounting, the adjustment to the carrying amount of
foreign entities.
a hedged item for which the effective interest method is used
is amortized to profit or loss over the period to maturity.
For more details on the nature and the extent of risks arising
The Group currently makes marginal use of such hedge rela-
257
tionships to seize opportunities associated with general de-
The Group does not currently hold any hedges of net in-
velopments in the yield curve.
vestments in a foreign operation.
Hedge of a net investment in a foreign ope-
ration (NIFO)
Hedges of net investments in foreign operations, with a fun-
The following table shows the notional amount and the fair
value of hedging derivatives classified on the basis of the
type of hedge relationship.
ctional currency other than the euro, are hedges of the im-
The notional amount of a derivative contract is the amount
pact of changes in exchange rates in respect of investments
on the basis of which cash flows are exchanged. This amount
in foreign entities. The hedge instrument is a liability deno-
can be expressed as a value or a quantity (for example tons,
minated in the same currency as the investment. The foreign
converted into euros by multiplying the notional amount
exchange differences of the hedged item and the hedge are
by the agreed price). Amounts denominated in currencies
accumulated each year in equity until the disposal of the in-
other than the euro are converted at the end-year exchange
vestment, at which time the foreign exchange differences
rates provided by the European Central Bank.
are transferred to profit or loss.
Millions of euro
Notional amount
Fair value assets
Notional amount
Fair value liabilities
at
Dec. 31, 2014
at
Dec. 31,
2013
restated
at
Dec. 31, 2014
at
Dec. 31,
2013
restated
at
Dec. 31, 2014
at
Dec. 31,
2013
restated
at
Dec. 31,
2014
at
Dec. 31,
2013
restated
Fair value hedge
derivatives:
- on interest rates
- on exchange rates
Cash flow hedge
derivatives:
- on interest rates
- on exchange rates
- on commodities
904
1,121
-
-
506
11,740
3,457
1,258
5,479
286
Total
16,607
8,144
55
-
5
1,407
433
1,900
49
-
40
439
22
550
-
-
-
5
-
-
-
(2)
4,557
5,401
(556)
(385)
6,756
11,768
(1,631)
(2,081)
2,817
4,491
(689)
(163)
14,130
21,665
(2,876)
(2,631)
For more on the fair value measurement of derivatives, ple-
For more on the classification of hedging derivatives as
ase see note 45 “Assets measured at fair value”.
non-current and current assets and non-current and cur-
rent liabilities, please see note 41 “Risk management”.
43.2 Hedge relationships by type of risk hedged
Interest rate risk
The following table shows the notional amount and the fair
of transactions outstanding as at December 31, 2014 and
value of the hedging instruments on the interest rate risk
December 31, 2013, broken down by type of hedged item:
Millions of euro
Fair value Notional amount
Fair value Notional amount
Hedging instrument
Hedged item
at Dec. 31, 2014
at Dec. 31, 2013 restated
Interest rate swaps
Interest rate swaps
Total
258
Fixed-rate
borrowings
Floating-rate
borrowings
41
1,004
50
1,221
(537)
(496)
4,963
5,967
(346)
(296)
6,559
7,780
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS The following table shows the notional amount and the fair
cember 31, 2014 and December 31, 2013, broken down by
value of hedging derivatives on interest rate risk as at De-
type of hedge:
Millions of euro
Notional amount
Fair value assets
Notional amount
Fair value liabilities
at
Dec. 31, 2014
at
Dec. 31,
2013
restated
at
Dec. 31, 2014
at
Dec. 31,
2013
restated
at
Dec. 31, 2014
at
Dec. 31,
2013
restated
at
Dec. 31,
2014
at
Dec. 31,
2013
restated
Fair value hedge
derivatives:
- interest rate swaps
904
1,121
55
49
-
-
-
-
Cash flow hedge
derivatives:
- interest rate swaps
506
1,258
Total interest rate
derivatives
1,410
2,379
5
60
40
89
4,557
5,401
(556)
(385)
4,557
5,401
(556)
(385)
The notional amount of derivatives classified as hedging
year prompted a deterioration in the fair value of cash flow
instruments at December 31, 2014 came to €5,967 million,
hedge derivatives and an improvement in that of fair value
with a corresponding negative fair value of €496 million.
hedge derivatives.
The general decline in the yield curve over the course of the
Cash flow hedge derivatives
The following table shows the cash flows expected in coming years from cash flow hedge derivatives on interest rate risk.
Millions of euro
Fair value
Distribution of expected cash flows
at Dec. 31, 2014
2015
2016
2017
2018
2019
Beyond
Cash flow hedge derivatives on interest
rates
Positive fair value
Negative fair value
5
(5)
(556)
(115)
2
(89)
-
(75)
-
(65)
-
-
(55)
(226)
The following table shows the impact of cash flow hedge derivatives on interest rate risk on equity during the period, gross
of tax effects:
Millions of euro
Opening balance at January 1, 2014
Changes in fair value recognized in equity (OCI)
Changes in fair value recognized in profit or loss
Closing balance at December 31, 2014
2014
(1,729)
958
130
(641)
2013 restated
(1,638)
(281)
228
(1,691)
259
Foreign exchange risk
The following table shows the notional amount and the fair
risk of transactions outstanding as at December 31, 2014 and
value of the hedging instruments on the foreign exchange
December 31, 2013, broken down by type of hedged item:
Millions of euro
Hedging instruments
Cross currency interest rate swaps (CCIRSs)
Cross currency interest rate swaps (CCIRSs)
Cross currency interest rate swaps (CCIRSs)
Currency forwards
Currency forwards
Total
Hedged item
Fixed-rate
borrowings
Floating-rate
borrowings
Future cash flows
denominated in
foreign currencies
Future commodity
purchases
denominated in
foreign currencies
Future cash flows
denominated in
foreign currencies
Fair value Notional amount
Fair value
Notional amount
at Dec. 31, 2014
at Dec. 31, 2013 restated
(508)
14,064
(1,580)
13,848
11
(38)
416
321
26
-
415
-
312
3,674
(90)
2,962
-
(224)
21
-
18,496
(1,644)
27
17,252
Cash flow hedges and fair value hedges include:
> currency forwards with a notional amount of €3,695 mil-
> CCIRSs with a notional amount of €14,064 million used
lion used to hedge the foreign exchange risk associated
to hedge the foreign exchange risk on fixed-rate debt
with purchases and sales of natural gas, purchases of fuel
denominated in currencies other than the euro, with a
and expected cash flows in currencies other than the
negative fair value of €508 million;
euro, with a fair value of €312 million.
> CCIRSs with a notional amount of €737 million used to
hedge the foreign exchange risk on floating-rate debt
The following table reports the notional amount and fair
denominated in currencies other than the euro, with a
value of foreign exchange derivatives at December 31, 2014
negative fair value of €27 million;
and December 31, 2013, broken down by type of hedge:
Millions of euro
Notional amount
Fair value assets
Notional amount
Fair value liabilities
at
Dec. 31, 2014
at
Dec. 31,
2013
restated
at
Dec. 31, 2014
at
Dec. 31,
2013
restated
at
Dec. 31, 2014
at
Dec. 31,
2013
restated
at
Dec. 31,
2014
at
Dec. 31,
2013
restated
Fair value hedge
derivatives:
- CCIRSs
Cash flow hedge
derivatives:
- currency forwards
- CCIRSs
Total foreign exchange
derivatives
-
-
-
3,520
8,220
218
5,261
315
1,092
-
4
435
-
5
-
(2)
175
6,581
2,771
8,997
(3)
(95)
(1,628)
(1,986)
11,740
5,479
1,407
439
6,756
11,773
(1,631)
(2,083)
The notional amount of CCIRSs at December 31, 2014
floating-rate borrowings in currencies other than the cur-
amounted to €14,801 million (€14,263 million at Decem-
rency of account with a total value of €1,398 million. The
ber 31, 2013), an increase of €538 million. Cross currency
value also reflects developments in the exchange rate of the
interest rate swaps with a total value of €1,989 million ex-
euro against the main other currencies, which cause their
pired and were cancelled against new derivatives hedging
notional amount to increase by €1,129 million.
the hybrid bond issued by Enel SpA in pounds sterling and
The notional value of currency forwards at December 31,
260
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS 2014 amounted to €3,695 million (€2,989 million at Decem-
dollar, is mainly due to purchases and sales of natural gas
ber 31, 2013), an increase of €706 million. The exposure to
and purchase of fuel. Changes in the notional amount are
foreign exchange risk, especially that associated with the US
connected with normal developments in operations.
Cash flow hedge derivatives
The following table shows the cash flows expected in coming years from cash flow hedge derivatives on foreign exchange risk:
Millions of euro
Fair value
Distribution of expected cash flows
at Dec. 31, 2014
2015
2016
2017
2018
2019 Beyond
Cash flow hedge derivatives on
exchange rates
Positive fair value
Negative fair value
1,407
(1,631)
185
(62)
137
(157)
274
(41)
103
(53)
409
(183)
829
485
The following table shows the impact of cash flow hedge derivatives on foreign exchange risk on equity during the period,
gross of tax effects:
Millions of euro
Opening balance at January 1, 2014
Changes in fair value recognized in equity (OCI)
Changes in fair value recognized in profit or loss
Closing balance at December 31, 2014
Commodity risk
2014
(84)
(1,089)
64
(1,109)
2013 restated
(75)
(61)
52
(84)
Millions of euro
Notional amount
Fair value assets
Notional amount
Fair value liabilities
at
Dec. 31, 2014
at
Dec. 31,
2013
restated
at
Dec. 31, 2014
at
Dec. 31,
2013
restated
at
Dec. 31, 2014
at
Dec. 31,
2013
restated
at
Dec. 31,
2014
at
Dec. 31,
2013
restated
Cash flow hedge derivatives
Derivatives on power:
- swaps
- forwards/futures
Total derivatives on power
Derivatives on coal:
- swaps
Total derivatives on coal
Derivatives on gas and oil:
- swaps
- forwards/futures
Total derivatives on gas
and oil
Derivatives on CO2:
- forwards/futures
Total derivatives on CO2
TOTAL DERIVATIVES ON
COMMODITIES
545
1,149
1,694
-
-
124
1,426
1,550
213
213
81
115
196
-
-
-
-
-
90
90
50
95
145
-
-
41
197
238
50
50
12
4
16
-
-
-
-
-
6
6
152
348
500
718
718
326
1,502
1,828
1,250
1,250
13
17
1,586
1,396
(7)
(18)
(25)
(183)
(183)
(3)
(478)
1,599
1,413
(481)
-
-
-
-
-
-
(9)
(26)
(35)
(120)
(120)
(1)
(7)
(8)
-
-
3,457
286
433
22
2,817
4,491
(689)
(163)
261
The table reports the notional amount and fair value of deri-
in the price of natural gas, for both purchases and sales, car-
vatives hedging the price risk on commodities at December
ried out for oil commodities and gas products with physical
31, 2014 and at December 31, 2013, broken down by type
delivery (all-in-one hedges).
of hedge.
Cash flow hedge derivatives on commodities with a negati-
The positive fair value of cash flow hedge derivatives on com-
ve fair value regard derivatives on gas and oil commodities
modities mainly regards hedges of gas and oil amounting to
amounting to €481 million, hedges of coal purchases for the
€238 million, derivatives on power amounting to €145 mil-
generation companies amounting to €183 million and deri-
lion and transactions on CO2 with a fair value of €50 million.
The first category primarily regards hedges of fluctuations
vatives on power amounting to €25 million.
Cash flow hedge derivatives
The following table shows the cash flows expected in coming years from cash flow hedge derivatives on commodity risk:
Millions of euro
Fair value
Distribution of expected cash flows
at
Dec. 31, 2014
2015
2016
2017
2018
2019
Beyond
Cash flow hedge derivatives on
commodities
Positive fair value
Negative fair value
433
327
(689)
(464)
104
(225)
2
-
-
-
-
-
-
-
The following table shows the impact of cash flow hedge derivatives on commodity risk on equity during the period, gross
of tax effects:
Millions of euro
Opening balance at January 1, 2014
Changes in fair value recognized in equity (OCI)
Changes in fair value recognized in profit or loss
Closing balance at December 31, 2014
2014
(52)
(318)
122
(248)
2013 restated
(75)
(228)
251
(52)
262
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS 44. Derivatives at fair value through profit or loss
The following table shows the notional amount and the fair value of derivatives at FVTPL as at December 31, 2014 and
December 31, 2013:
Millions of euro
Notional amount
Fair value assets
Notional amount
Fair value liabilities
at
Dec. 31, 2014
at
Dec. 31,
2013
restated
at
Dec. 31, 2014
at
Dec. 31,
2013
restated
at
Dec. 31, 2014
at
Dec. 31,
2013
restated
at
Dec. 31,
2014
at
Dec. 31,
2013
restated
Derivatives at FVTPL
Derivatives on interest
rates:
- interest rate swaps
- interest rate options
Derivatives on exchange
rates:
65
-
30
-
4
-
2
-
180
50
766
50
(88)
(8)
(69)
(4)
- currency forwards
2,215
1,807
159
46
2,956
2,233
(81)
(34)
Derivatives on commodities
Derivatives on power:
- swaps
- forwards/futures
- options
1,207
5,391
104
2,356
6,128
52
Total derivatives on power
6,702
8,536
Derivatives on coal:
- swaps
- forwards/futures
- options
1,527
73
3
Total derivatives on coal
1,603
Derivatives on gas and oil:
928
35
2
965
1,844
2,535
82
645
5,677
99
155
480
2
637
187
7
3
197
131
133
4
268
57
5
2
64
1,611
5,456
80
1,775
3,469
32
(183)
(417)
(6)
(94)
(44)
(3)
7,147
5,276
(606)
(141)
1,742
51
10
422
13
7
(218)
(15)
(23)
1,803
442
(256)
(58)
(2)
(5)
(65)
2,686
1,988
944
278
130
61
902
5,170
102
1,714
2,079
89
(2,747)
(1,998)
(824)
(331)
(95)
(59)
- swaps
- forwards/futures
- options
Total derivatives on gas
and oil
Derivatives on CO2:
- forwards/futures
Total derivatives on CO2
Derivatives on other
commodities:
- swaps
- options
Total derivatives on other
commodities
Embedded derivatives
TOTAL DERIVATIVES ON
COMMODITIES
6,421
4,461
3,908
2,179
6,174
3,882
(3,902)
(2,152)
68
68
35
1
36
65
65
21
-
21
-
19
19
10
1
11
-
18
18
7
-
7
-
63
63
138
2
140
-
257
257
132
-
132
659
(10)
(10)
(53)
(2)
(55)
-
(19)
(19)
(39)
(1)
(40)
(1)
17,110
15,885
4,935
2,584
18,513
13,697
(5,006)
(2,525)
263
At December 31, 2014 the notional amount of trading deri-
At December 31, 2014, the notional amount of derivatives
vatives on interest rates came to €295 million. The change in
on commodities came to €30,157 million.
the notional compared with December 31, 2013 is attribu-
The positive fair value of trading derivatives on commodi-
table to a natural decline in amortization of existing interest
ties includes, among other elements, hedges of gas and
rate swaps and the expiry of €500 million in derivatives du-
oil amounting to €3,908 million and derivatives on power
ring 2014 that, although established for hedging purposes,
amounting to €637 million.
did not meet the requirements for hedge accounting. The
The negative fair value of trading derivatives on commo-
fair value of €92 million deteriorated by €21 million, mainly
dities mainly regards hedges of gas and oil amounting to
due to the general decline in the yield curve.
€3,902 million and derivatives on power amounting to €606
At December 31, 2014, the notional amount of derivatives
million.
on exchange rates was €5,171 million. The increase in their
These values include transactions that, although established
notional value and the associated fair value mainly reflected
for hedging purposes, did not meet the requirements for
normal operations and developments in exchange rates.
hedge accounting.
45. Asset measured at fair value
The Group determines fair value in accordance with IFRS 13
> Level 2, where the fair value is determined on the basis of
whenever such measurement is required by the internatio-
inputs other than quoted prices included within Level 1
nal accounting standards as a recognition or measurement
that are observable for the asset or liability, either directly
criterion.
(such as prices) or indirectly (derived from prices);
Fair value is defined as the price that would be received to
> Level 3, where the fair value is determined on the basis of
sell an asset or paid to transfer a liability, in an orderly tran-
unobservable inputs.
saction, between market participants, at the measurement
This note also provides detailed disclosures concerning the
date (i.e. an exit price).
valuation techniques and inputs used to perform these me-
The best proxy of fair value is market price, i.e. the current
asurements.
publically available price actually used on a liquid and active
To that end:
market.
> recurring fair value measurements of assets or liabilities
The fair value of assets and liabilities is classified in accor-
are those required or permitted by the IFRS in the balan-
dance with the three-level hierarchy described below, de-
ce sheet at the close of each period;
pending on the inputs and valuation techniques used in
> non-recurring fair value measurements are those requi-
determining their fair value:
red or permitted by the IFRS in the balance sheet in parti-
> Level 1, where the fair value is determined on the basis of
cular circumstances.
quoted prices (unadjusted) in active markets for identical
For general information or specific disclosures on the ac-
assets or liabilities that the entity can access at the mea-
counting treatment of these circumstances, please see note
surement date;
2 “Accounting policies and measurement criteria”.
264
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS The following table shows, for each class of assets measu-
of the reporting period and the level in the fair value hierar-
red at fair value on a recurring or non-recurring basis in the
chy into which the fair value measurements of those assets
financial statements, the fair value measurement at the end
are classified.
Millions of euro
Non-current assets
Current assets
Notes
Fair value
Level 1
Level 2
Level 3
Fair value
Level 1
Level 2
Level 3
Equity investments
in other companies
measured at fair value
Service concession
arrangements
22
22
Securities held to maturity
22.1
157
157
-
669
139
-
139
Financial investments in
funds
22.1
40
40
Cash flow hedge
derivatives:
- on interest rates
- on exchange rates
- on commodities
Fair value hedge
derivatives:
- on interest rates
Trading derivatives:
- on interest rates
- on exchange rates
- on commodities
Inventories measured at
fair value
Assets held for sale
43
43
43
43
43
43
43
24
30
5
1,163
107
55
3
2
-
-
-
-
-
89
-
-
-
-
-
-
669
-
-
5
1,163
18
55
3
2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
326
148
178
-
1
157
-
-
-
-
1
157
4,772
2,590
2,182
267
6,778
267
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,778
The fair value of equity investments in other companies is
close of the period (such as interest rates, exchange rates,
determined for listed companies on the basis of the quo-
volatility), discounting expected future cash flows on the
ted price set on the closing date of the year, while that for
basis of the market yield curve and translating amounts in
unlisted companies is based on a reliable valuation of the
currencies other than the euro using exchange rates provi-
relevant assets and liabilities.
ded by the European Central Bank. For contracts involving
“Service concession arrangements” concern electricity di-
where available, for the same instruments on both regula-
commodities, the measurement is conducted using prices,
stribution operations in Brazil by Ampla and Coelce and are
ted and unregulated markets.
accounted for in accordance with IFRIC 12. Fair value was
estimated as the net replacement cost based on the most
In accordance with the new international accounting stan-
recent rate information available and on the general price
dards, in 2013 the Group included a measurement of credit
index for the Brazilian market.
risk, both of the counterparty (Credit Valuation Adjustment
or CVA) and its own (Debit Valuation Adjustment or DVA), in
The fair value of derivative contracts is determined using the
order to adjust the fair value of financial instruments for the
official prices for instruments traded on regulated markets.
corresponding amount of counterparty risk. More specifically,
The fair value of instruments not listed on a regulated mar-
the Group measures CVA/DVA using a Potential Future Expo-
ket is determined using valuation methods appropriate for
sure valuation technique for the net exposure of the position
each type of financial instrument and market data as of the
and subsequently allocating the adjustment to the individual
265
financial instruments that make up the overall portfolio. All of
risk exposure. For listed debt instruments, the fair value is
the inputs used in this technique are observable on the market.
given by official prices. For unlisted instruments the fair va-
The notional amount of a derivative contract is the amount
lue is determined using appropriate valuation techniques
on which cash flows are exchanged. This amount can be ex-
for each category of financial instrument and market data
pressed as a value or a quantity (for example tons, conver-
at the closing date of the year, including the credit spreads
ted into euros by multiplying the notional amount by the
of Enel SpA.
agreed price).
Amounts denominated in currencies other than the euro
Finally, “Assets held for sale” primarily regard Slovenské
are converted into euros at the year-end exchange rates
elektrárne. The associated fair value is the estimated realiza-
provided by the European Central Bank.
ble value, net of disposal prices, as determined on the basis
The notional amounts of derivatives reported here do not
of the documentation currently available on the sale of the
necessarily represent amounts exchanged between the par-
company.
ties and therefore are not a measure of the Group’s credit
45.1 Fair value of other assets
For each class of assets not measured at fair value in the ba-
and the level in the fair value hierarchy into which the fair
lance sheet but whose fair value must be reported, the fol-
value measurements of those assets are classified.
lowing table reports the fair value at the end of the period
Millions of euro
Non-current assets
Current assets
Notes
Fair value
Level 1
Level 2
Level 3
Fair value
Level 1
Level 2
Level 3
Property investments
Equity investments in
other companies
Inventories
16
22
24
171
13
-
-
-
-
17
154
-
-
13
-
-
-
76
-
-
-
-
-
-
-
-
76
The table reports property investments, equity investments
The value of equity investments classified in Level 3 increa-
in other companies and inventories measured at cost, who-
sed by €7 million compared with 2013 and regards a num-
se fair value has been estimated at €171 million, €13 million
ber of equity investments of Endesa.
and €76 million respectively. The amounts were calculated
The value of inventories largely regards environmental cer-
with the assistance of appraisals conducted by independent
tificates.
experts, who used different methods depending on the spe-
cific assets involved.
266
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS 46. Liabilities measured at fair value
The following table reports for each class of liabilities me-
end of the reporting period and the level in the fair value
asured at fair value on a recurring or non-recurring basis in
hierarchy into which the fair value measurements are cate-
the financial statements the fair value measurement at the
gorized.
Millions of euro
Non-current liabilities
Current liabilities
Notes
Fair value
Level 1
Level 2
Level 3
Fair value
Level 1
Level 2
Level 3
Cash flow hedge derivatives:
- on interest rates
- on exchange rates
- on commodities
Trading derivatives:
- on interest rates
- on exchange rates
- on commodities
Contingent consideration
Payables for put options granted to
minority shareholders
Deferred income
Liabilities held for sale
43
43
43
43
43
43
39
39
39
30
554
1,627
225
-
-
554
1,627
104
121
21
10
4
-
13
-
-
-
-
-
-
-
-
-
21
10
4
-
-
-
-
-
-
-
-
-
-
-
13
-
-
2
4
-
-
2
4
464
144
320
75
71
-
-
75
71
4,825
3,277
1,548
-
-
-
-
-
-
46
789
34
5,290
-
-
-
-
-
-
34
-
46
789
-
5,290
Contingent consideration regards a number of equity in-
the exercise conditions in the associated contracts, and €24
vestments held by the Group in North America, whose fair
million for the liability associated with the options on Reno-
value was determined on the basis of the contractual terms
vables de Guatemala (€13 million) and Maicor Wind (€11
and conditions between the parties.
million).
The item “Payables for put options granted to minority
The “Liabilities held for sale” main regard Slovenské elektrár-
shareholders” includes the liability for the options on Enel
ne. The fair value is the estimated realizable value, net of
Distributie Muntenia and Enel Energie Muntenia in the
disposal prices, as determined on the basis of the documen-
total amount of €778 million, determined on the basis of
tation currently available on the sale of the company.
267
46.1 Fair value of other liabilities
For each class of liabilities not measured at fair value in the
riod and the level in the fair value hierarchy into which the
balance sheet but whose fair value must be reported, the
fair value measurements of those liabilities are classified.
following table reports the fair value at the end of the pe-
Millions of euro
Bonds:
- fixed rate
- floating rate
Bank borrowings:
- fixed rate
- floating rate
Non-bank borrowings:
- fixed rate
- floating rate
Short-term payables to banks
Commercial paper
Notes
Fair value
Level 1
Level 2
Level 3
40.3.1
40.3.1
40.3.1
40.3.1
40.3.1
40.3.1
40.3.2
40.3.2
43,655
7,245
35,981
3,435
1,170
7,096
1,824
420
30
2,599
457
166
-
-
-
-
-
-
-
-
7,674
3,810
1,170
7,096
1,824
420
30
2,599
457
166
-
-
-
-
-
-
-
-
-
-
-
Cash collateral and other financing on derivatives
40.3.2
Other short-term financial payables
40.3.2
Total
64,662
39,416
25,246
268
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS 47. Related parties
As an operator in the field of generation, distribution, tran-
or indirectly controlled by the Italian State, the Group’s con-
sport and sale of electricity and the sale of natural gas, Enel
trolling shareholder.
carries out transactions with a number of companies directly
The table below summarizes the main types of transactions carried out with such counterparties.
Related party
Relationship
Nature of main transactions
Acquirente Unico - Single Buyer
Fully controlled (indirectly) by the
Ministry for the Economy and Finance
Purchase of electricity for the enhanced
protection market
GME - Energy Markets Operator
Fully controlled (indirectly) by the
Ministry for the Economy and Finance
Sale of electricity on the Power Exchange
Purchase of electricity on the Power Exchange
for pumping and plant planning
GSE - Energy Services Operator
Fully controlled (directly) by the
Ministry for the Economy and Finance
Indirectly controlled by the
Ministry for the Economy and Finance
Sale of subsidized electricity
Payment of A3 component for renewable
resource incentives
Sale of electricity on the Ancillary Services
Market
Purchase of transport, dispatching and
metering services
Directly controlled by the Ministry
for the Economy and Finance
Sale of electricity transport services
Purchase of fuels for generation plants, storage
services and natural gas distribution
Directly controlled by the Ministry
for the Economy and Finance
Purchase of IT services and supply of goods
Fully controlled (directly) by the
Ministry for the Economy and Finance
Purchase of postal services
Terna
Eni Group
Finmeccanica Group
Poste Italiane Group
Finally, Enel also maintains relationships with the pension
All transactions with related parties were carried out on
funds FOPEN and FONDENEL, as well as Fondazione Enel
normal market terms and conditions, which in some cases
and Enel Cuore, an Enel non-profit company devoted to
are determined by the Authority for Electricity, Gas and the
providing social and healthcare assistance.
Water System.
269
The following tables summarize transactions with rela-
outstanding at December 31, 2014 and carried out during
ted parties, associated companies and joint arrangements
the period.
GME
Terna
Eni
GSE
Poste Italiane
Other
Key management
personnel
Associates and joint
Total in financial
Total
arrangements
Overall total
statements
% of total
3,087
1,150
1,124
Millions of euro
Income statement
Revenue from sales and
services
Other revenue
Other financial income
Electricity, gas and fuel
purchases
Services and other
materials
Other operating expenses
Net income /(expense)
from commodity contracts
measured at fair value
Other financial expense
Millions of euro
Balance sheet
Trade receivables
Other current assets
Other non-current
liabilities
Trade payables
Other current liabilities
Non-current derivative
financial liabilities
Other information
Guarantees received
Commitments
Acquirente
Unico
-
-
-
-
-
4,395
1,690
-
3
17
-
163
-
-
-
4
-
64
1,886
4
29
-
Acquirente
Unico
GME
Terna
-
1
-
444
7
-
762
382
-
-
-
-
-
-
-
-
544
13
-
406
1
24
-
1
1
-
1,229
77
46
-
-
Eni
127
1
-
443
-
-
150
19
256
353
-
1
4
-
-
-
25
-
-
-
119
-
-
-
63
5
-
2
46
-
-
-
GSE
Poste Italiane
Other
Key management
personnel
Associates and joint
Total in financial
Total
arrangements
Overall total
statements
% of total
24
102
-
1,006
-
-
-
-
5
5
-
45
1
-
4
18
14
5
2
29
-
-
24
11
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,705
363
7,381
2,295
53
46
-
1,158
134
3,073
2
2
24
178
49
46
4
23
214
145
-
-
28
62
8
-
86
1
-
-
-
7,595
36,928
73,328
2,463
1,248
17,179
2,362
(225)
5,540
12,022
2,706
1,464
13,419
10,827
2,441
5,751
367
23
2,440
53
46
28
1,220
142
3,159
2
3
24
178
49
7.8%
14.9%
1.8%
20.6%
14.2%
2.2%
-20.4%
0.5%
10.1%
5.2%
0.1%
23.5%
-
1.0%
In November 2010, the Board of Directors of Enel SpA ap-
tion of the provisions of Article 2391-bis of the Italian Civil
proved a procedure governing the approval and execution
Code and the implementing regulations issued by CONSOB.
of transactions with related parties carried out by Enel SpA
In 2014, no transactions were carried out for which it was
directly or through subsidiaries. The procedure (available
necessary to make the disclosures required in the rules on
at http://www.enel.com/en-GB/group/governance/rules/
transactions with related parties adopted with CONSOB Re-
related_parties/) sets out rules designed to ensure the tran-
solution 17221 of March 12, 2010, as amended with Reso-
sparency and procedural and substantive propriety of tran-
lution 17389 of June 23, 2010.
sactions with related parties. It was adopted in implementa-
270
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS Millions of euro
Income statement
Revenue from sales and
services
Other revenue
Other financial income
Electricity, gas and fuel
purchases
Services and other
materials
Other operating expenses
Net income /(expense)
from commodity contracts
measured at fair value
Other financial expense
Millions of euro
Balance sheet
Trade receivables
Other current assets
Other non-current
liabilities
Trade payables
Other current liabilities
Non-current derivative
financial liabilities
Other information
Guarantees received
Commitments
3,087
1,150
1,124
25
63
4,395
1,690
1,229
163
1,886
4
119
46
17
-
-
-
-
-
3
-
1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
444
7
4
-
64
29
-
544
13
-
1
-
1
24
1
-
77
46
-
-
-
-
-
Eni
127
1
150
19
256
353
24
102
-
1
4
-
-
-
-
-
-
-
-
762
382
406
443
1,006
-
-
-
-
-
-
5
5
-
1
-
45
4
18
5
-
2
-
-
-
14
29
5
2
-
-
24
11
Acquirente
Unico
GME
Terna
Eni
GSE
Poste Italiane
Other
Key management
personnel
Total
Associates and joint
arrangements
Overall total
Total in financial
statements
% of total
-
-
-
-
-
-
-
-
Acquirente
Unico
GME
Terna
GSE
Poste Italiane
Other
Key management
personnel
-
-
-
-
-
-
-
-
5,705
363
7,381
2,295
53
46
-
Total
1,158
134
2
3,073
2
24
178
49
46
4
23
214
145
-
-
28
5,751
367
23
73,328
2,463
1,248
7,595
36,928
2,440
53
46
28
17,179
2,362
(225)
5,540
7.8%
14.9%
1.8%
20.6%
14.2%
2.2%
-20.4%
0.5%
Associates and joint
arrangements
Overall total
Total in financial
statements
% of total
12,022
2,706
1,464
13,419
10,827
2,441
10.1%
5.2%
0.1%
23.5%
-
1.0%
62
8
-
86
1
-
-
-
1,220
142
2
3,159
3
24
178
49
271
48. 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
Guarantees given:
- sureties and other guarantees granted to third
parties
Commitments to suppliers for:
- electricity purchases
- fuel purchases
- various supplies
- tenders
- other
Total
TOTAL
at Dec. 31, 2014
at Dec. 31, 2013
Change
4,304
54,384
63,605
1,782
1,785
2,345
123,901
128,205
5,685
(1,381)
42,181
55,788
2,176
2,001
2,696
104,842
110,527
12,203
7,817
(394)
(216)
(351)
19,059
17,678
For more details on the expiry of commitments and guarantees, please see the section “Commitments to purchase commo-
dities” in note 41.
272
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS 49. Contingent liabilities and assets
Porto Tolle thermal plant
- Air pollution - Criminal
proceedings against Enel
directors and employees
Emilia Romagna to express social solidarity in line with the
general sustainability policies of the Group. The suits with
the Ministry and private parties (environmental associations
and a number of resident individuals, who have received no
payments from Enel during the proceedings) remain open.
On July 10, 2014, the decision of the Venice Court of Appe-
al was filed ordering the defendants, jointly with Enel/Enel
The Court of Adria, in a ruling issued on March 31, 2006, con-
Produzione, to pay damages in the amount of €312,500,
victed former directors and employees of Enel for a number of
plus more than €55,000 in legal expenses. The Ministry’s re-
incidents of air pollution caused by emissions from the Porto
quest for calculation of the amount of damages it claimed it
Tolle thermoelectric plant. The decision held the defendants
was owed was deemed inadmissible, as grounds for barring
and Enel (as a civilly liable party) jointly liable for the payment
such action arose in the course of the criminal proceedings.
of damages for harm to multiple parties, both natural per-
In the meantime the Court issued a general conviction with
sons and public authorities. Damages for a number of mainly
damages to be awarded in a separate decision and ordered
private parties (individuals and environmental associations)
payment of legal costs.
were set at the amount of €367,000. The calculation of the
amount of damages owed to certain public entities (Ministry
In August 2011, the Public Prosecutor’s Office of Rovigo
for the Environment, a number of public entities of Veneto
asked that a number of directors, former directors, officers,
and Emilia Romagna, including the area’s park agencies) was
former officers and employees of Enel and Enel Produzione
postponed to a later civil trial, although a “provisional award”
be remanded for trial on the charge of willful omission to
of about €2.5 million was immediately due.
take precautionary actions to prevent a disaster in respect
An appeal was lodged against the ruling of the Court of
of the alleged emissions from the Porto Tolle plant. Subse-
Adria and, on March 12, 2009, the Court of Appeal of Venice
quently, the public prosecutor filed charges of willfully cau-
partially reversed the lower court decision. It found that the
sing a disaster. During 2012, the pre-trial hearing judge of
former directors had not committed a crime and that there
Rovigo, granting the request of the Public Prosecutor’s Offi-
was no environmental damage and therefore ordered reco-
ce of Rovigo, ordered the committal for trial of all of the ac-
very of the provisional award already paid. The prosecutors
cused for both offences. The Ministry for the Environment,
and the civil claimants lodged an appeal against the ruling
the Ministry of Health and other actors, mainly local authori-
with the Court of Cassation. In a ruling on January 11, 2011,
ties in Emilia Romagna and Veneto, as well as the park agen-
the Court of Cassation granted the appeal, overturning the
cies of the area, joined the case as injured parties, seeking
decision of the Venice Court of Appeal, and referred the
unspecified damages from the above individuals, without
case to the civil section of the Venice Court of Appeal to rule
citing Enel or Enel Produzione as liable parties. Evidence
as regards payment of damages and the division of such da-
was submitted during 2013. During the year, as part of the
mages among the accused. As regards amounts paid to a
agreement mentioned earlier, most of the public entities
number of public entities in Veneto, Enel has already made
withdrew their suits.
payment under a settlement agreement reached in 2008.
At the hearing of March 31, 2014, the Court sitting en banc
With a suit lodged in 2011, the Ministry for the Environment,
issued its ruling of first instance, acquitting all of the accu-
the public entities of Emilia and the private actors who had
sed of the charge of willful omission to take precautionary
already participated as injuried parties in the criminal case
safety measures. The Court also acquitted all of the accused
asked the Venice Court of Appeal to order Enel SpA and Enel
of the charge of willfully causing a disaster, with the excep-
Produzione to pay civil damages for harm caused by the
tion of the two former Chief Executive Officers of Enel SpA
emissions from the Porto Tolle power station. The amount
(although the Court did not grant the request for recogni-
of damages requested for economic and environmental los-
tion of aggravating circumstances as provided for when the
ses was about €100 million, which Enel contested. During
disaster actually occurs). The former Chief Executive Officers
2013, an agreement was reached – with no admission of
were then ordered to pay unspecified damages in a sepa-
liability by Enel/Enel Produzione – with the public entities of
rate civil action, with a total provisional ruling of €410,000
273
and payment of court costs for the remaining civil parties to
2003, numerous claims were filed against Enel Distribuzione
the action. The Court’s full ruling was filed at the end of Sep-
for automatic and other indemnities for losses. These claims
tember 2014. The decision was appealed by the two former
gave rise to substantial litigation before justices of the pea-
Chief Executive Officers and by the public prosecutor at the
ce, mainly in the regions of Calabria, Campania and Basili-
start of November 2014. Further appeals were later filed by
cata, with a total of some 120,000 proceedings. Charges in
(i) the acquitted Chief Executive Officer, in order to obtain
respect of such indemnities could be recovered in part un-
the denial of the grounds for appeal of the prosecutor and a
der existing insurance policies. Most of the initial rulings by
broader acquittal than that obtained in the first trial; (ii) two
these judges found in favor of the plaintiffs, while appellate
local authorities that had not initially participated; and (iii)
courts have nearly all found in favor of Enel Distribuzione.
the two Ministries (Environment and Health).
The Court of Cassation has also consistently ruled in favor
Brindisi Sud thermal
generation plant -
Criminal proceedings
against Enel employees
A criminal proceeding is under way before the Court of Brin-
disi concerning the Brindisi Sud thermal plant. A number of
employees of Enel Produzione – cited as a liable party in civil
litigation during 2013 – have been accused of causing cri-
minal damage and dumping of hazardous substances with
regard to the alleged contamination of land adjacent to the
plant with coal dust as a result of actions between 1999 and
2011. At the end of 2013, the accusations were extended
to cover 2012 and 2013. As part of the proceeding, injured
parties, including the Province and City of Brindisi, have
submitted claims for total damages of about €1.4 billion.
The argument phase is under way and hearings of witnesses
and technical experts are under way.
Criminal proceedings are also under way before the Courts
of Reggio Calabria and Vibo Valentia against a number
of employees of Enel Produzione for the offense of illegal
waste disposal in connection with alleged violations con-
cerning the disposal of waste from the Brindisi plant. Enel
Produzione has not been cited as a liable party for civil da-
mages.
Out-of-court disputes
and litigation connected
with the blackout of
September 28, 2003
of Enel Distribuzione. At December 30, 2014 pending cases
numbered about 23,700 as a result of additional appeals fi-
led despite the abandonment of suits by the plaintiffs and/
or joinder of proceedings. In addition, in view of the rulings
in Enel’s favor by both the courts of appeal and the Court
of Cassation, the flow of new claims has come to a halt.
Beginning in 2012, a number of actions for recovery were
initiated, which continue, to obtain repayment of amounts
paid by Enel in execution of the rulings in the courts of first
instance.
In May 2008, Enel served its insurance company (Cattoli-
ca) a summons to ascertain its right to reimbursement of
amounts paid in settlement of unfavorable rulings. The case
also involved a number of reinsurance companies in the
proceedings, which have challenged Enel’s claim. In a ru-
ling of October 21, 2013, the Court of Rome granted Enel’s
petition, finding the insurance coverage to be valid and or-
dering Cattolica, and consequently the reinsurance compa-
nies, to hold Enel harmless in respect of amounts paid or to
be paid to users and their legal counsel as well as, within the
limits established by the policies, to pay defense costs.
On the basis of that ruling, in October 2014, Enel filed suit
against Cattolica with the Court of Rome to obtain a quan-
tification of the amounts due to Enel and payment of those
amounts by Cattolica.
The first hearing has been set for March 30, 2015.
Subsequently, Cattolica appealed the ruling of the court of
first instance of October 21, 2013, before the Rome Court of
Appeal, asking that it be overturned. The first hearing has
been set for April 27, 2015.
BEG litigation
Following an arbitration proceeding initiated by BEG SpA in
Italy, Enelpower obtained a ruling in its favor in 2002, which
was upheld by the Court of Cassation in 2010, which enti-
In the wake of the blackout that occurred on September 28,
rely rejected the complaint with regard to alleged breach by
274
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS Enelpower of an agreement concerning the construction of
ber of entities and the establishment of a lien on the shares
a hydroelectric power station in Albania.
of two subsidiaries of Enel SpA in that country. Enel SpA and
Subsequently, BEG, acting through its subsidiary Albania
Enelpower SpA challenged that ruling and on July 1, 2014,
BEG Ambient Shpk, filed suit against Enelpower and Enel
the Dutch court, in granting the petition of Enel and Enel-
SpA in Albania concerning the matter, obtaining a ruling,
power, provisionally determined the value of the suit at €25
upheld by the Albanian Supreme Court of Appeal, ordering
million and ordered the removal of the preliminary injun-
Enelpower and Enel to pay tortious damages of about €25
ction subject to the issue of a bank guarantee in the amount
million for 2004 as well as an unspecified amount of tor-
of €25 million by Enel and Enelpower. Enel and Enelpower
tious damages for subsequent years. Following the ruling,
have appealed this ruling and, at present, no bank guaran-
Albania BEG Ambient Shpk demanded payment of more
tee has been issued.
than €430 million.
On July 3, 2014, Albania BEG Ambient Shpk sought to
The European Court of Human Rights, with which Enelpo-
obtain a second order to freeze assets. Following the hea-
wer SpA and Enel SpA had filed an appeal for violation of
ring of August 28, 2014, the court in the Hague granted a
the right to a fair trial and the rule of law by the Republic
preliminary injunction for the amount of €425 million on
of Albania, rejected the petition as inadmissible. The ruling
September 18, 2014. Enel and Enelpower have appealed
was purely procedural and did not address the substance of
this injunction and no final ruling has been issued.
the suit.
At the end of July 2014, Albania BEG Ambient Shpk filed
suit in the Netherlands to render the ruling of the Albanian
In February 2012, Albania BEG Ambient Shpk filed suit
court enforceable in that country.
against Enel SpA and Enelpower SpA with the Tribunal de
Grande Instance in Paris in order to render the ruling of the
Albania BEG Ambient Shpk also filed suits in Ireland and Lu-
Albanian court enforceable in France. Enel SpA and Enelpo-
xembourg to render the ruling of the Court of Tirana enfor-
wer SpA challenged the suit. The proceeding is still under
ceable in those two countries. Both of these suits are at a
way and the Court has issued no preliminary or definitive
preliminary stage and no rulings have been issued. Enel SpA
rulings so far.
and Enelpower SpA are preparing their defense challenging
Subsequently, again at the initiative of Albania BEG Ambient,
the claims put forth by Albania BEG Ambient Shpk.
Enel France was served with two “Saise Conservatoire de
Créances” (orders for the precautionary attachment of receiva-
Proceedings continue in the suit lodged by Enelpower SpA
bles) to conserve any receivables of Enel SpA in respect of Enel
and Enel SpA with the Court of Rome asking the Court to
France. J.P. Morgan Bank Luxembourg SA was also served with
ascertain the liability of BEG SpA for having evaded com-
an analogous order in respect of any receivables of Enel SpA.
pliance with the arbitration ruling issued in Italy in favor of
Enelpower SpA through the legal action taken by Albania
In March 2014, Albania BEG Ambient Shpk filed suit against
BEG Ambient Shpk. With this action, Enelpower SpA and
Enel SpA and Enelpower SpA in New York to render the ru-
Enel SpA are asking the Court to find BEG liable and order
ling of the Albanian court enforceable in the State of New
it to pay damages in the amount that the other could be
York. Enel SpA and Enelpower, in presenting their defense,
required to pay to Albania BEG Ambient Shpk in the event
contested all aspects of the foundation of the plaintiff’s
of the enforcement of the sentence issued by the Albanian
case and took all steps available to them to defend their
courts. At the most recent hearing of March 12, 2015, the
interests.
Court took up the case for a ruling, granting the parties the
On April 22, 2014, in response to a motion filed by Enel and
statutory period for the filing of final arguments and rejoin-
Enelpower, the court revoked the previous ruling issued
ders.
against the companies freezing assets of around $600 mil-
lion. The suit is pending and no measures, preliminary or
otherwise, have been taken by the court.
On June 2, 2014 Albania BEG Ambient Shpk obtained an or-
der from the court in the Hague, based upon the prelimina-
ry injunction, freezing up to €440 million held with a num-
Violations of Legislative
Decree 231/2001
The following four cases for alleged violation of Legislative
Decree 231/2001 concerning the administrative liability of
275
legal persons are pending. Three involve Enel Produzione
and one involves Enel Distribuzione, for omission of acci-
dent prevention measures:
> for a fatal accident involving an employee of a subcon-
Basilus litigation (formerly
Meridional) - Brazil
tractor at the Enel Federico II plant at Brindisi in 2008,
The Brazilian construction company Basilus S/A Serviço,
Enel Produzione has been charged with administrative
Emprendimiento y Participações (formerly Meridional) held
liability for manslaughter;
a contract for civil works with the Brazilian company CELF
> for an accident involving an employee of a subcontractor
(owned by the State of Rio de Janeiro), which withdrew from
at the Enel Federico II plant at Brindisi in 2009, Enel Pro-
the contract. As part of its privatization, CELF transferred its
duzione has been charged with administrative liability
assets to Ampla Energia e Serviços SA (Ampla). In 1998, Ba-
for negligent personal injury;
silus filed suit against Ampla, arguing that the transfer had
> for a fatal accident involving an employee of a subcon-
infringed its rights and that it had been defrauded.
tractor at the Enel plant at Termini Imerese in 2008, Enel
Ampla obtained favorable judgments in the courts of first
Produzione has been charged with administrative liabili-
and second instance. Although the second-level decision
ty for manslaughter;
was adjudicated, Basilus lodged a special appeal (mandado
> for a fatal accident involving an employee of a subcon-
de segurança) in September 2010 asking for the adverse ru-
tractor in Palermo in 2008, Enel Distribuzione has been
ling to be overturned. That request was denied.
charged with administrative liability for manslaughter.
Subsequently Basilus lodged a new appeal with the Tribunal
The above proceedings are still in the argument phase, whi-
Superior de Justiça, which is still pending.
le the first has reached the discussion phase.
The amount involved in the dispute is about 1,096 million
Brazilian reais (about €336 million).
Red Eléctrica de España
arbitration - Spain
On July 1, 2010, in compliance with legal requirements, En-
desa Distribución Eléctrica (“EDE”) signed a contract with
Red Eléctrica de España (“REE”) for the sale of assets consi-
sting of the transmission network owned by EDE. The price
was set at about €1,400 million. The contract provided for
a price adjustment if remuneration decreased or increased
following the liquidation carried out by the Comisión Nacio-
nal de los Mercados y la Competencia (CNMC) by December
31, 2013.
REE’s interpretation of Ministerial Order IET/2443/2013,
published in December 2013, would produce a lower remu-
neration than that provided for in the contract and, on that
basis, the company undertook an arbitration proceeding
before the Corte Civil y Mercantil de Arbitraje (CIMA), asking
for an adjustment of the sale price.
The value of the claim was subsequently quantified at €94
million.
The proceeding is in the initial stage and EDE is conducting
its defense.
CIEN litigation - Brazil
In 1998 the Brazilian company CIEN signed an agreement
with Tractebel for the delivery of electricity from Argenti-
na through its Argentina-Brazil interconnection line. As a
result of Argentine regulatory changes introduced as a con-
sequence of the economic crisis in 2002, CIEN was unable
to make the electricity available to Tractebel. In October
2009, Tractebel sued CIEN, which submitted its defense.
CIEN cited force majeure as a result of the Argentine crisis
as the main argument in its defense. Out of court, Tractebel
has indicated that it plans to acquire 30% of the intercon-
nection line involved in the dispute.
In March 2014, the court granted CIEN’s motion to suspend
the proceedings in view of the existence of other litigation
pending between the parties.
The amount involved in the dispute is estimated at about
118 million Brazilian reais (about €40 million), plus unspeci-
fied damages.
For analogous reasons, in May 2010 Furnas also filed suit
against CIEN for failure to deliver electricity, requesting
payment of about 520 million Brazilian reais (about €175
million), in addition to unspecified damages.
In alleging non-performance by CIEN, Furnas is also seeking to
acquire ownership (in this case 70%) of the interconnection line.
276
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS CIEN’s defense is similar to the earlier case. The claims put forth
by Furnas were rejected by the trial court in August 2014.
Furnas lodged an appeal (not yet notified to CIEN) against
the latter decision.
SAPE (formerly Electrica)
arbitration proceedings -
Romania
Cibran litigation - Brazil
Companhia Brasileira de Antibióticos (Cibran) has filed a
number of suits against Ampla Energia e Serviços SA (Am-
pla) to obtain damages for alleged losses incurred as a
result of the interruption of service by the Brazilian distri-
bution company. The Court ordered a unified technical ap-
praisal for those cases, the findings of which were partly
unfavorable to Ampla. The latter challenged the findings,
asking for a new study. The proceedings concerning that
petition are pending.
In September 2014, the court of first instance issued a ruling
against Ampla in one of the various suits noted above, levying
a penalty of about 200,000 Brazilian reais (about €60,000) as
well as other damages to be quantified at a later stage. Am-
pla has appealed the ruling and the appeal is under way.
A decision by the court of first instance on the other suits
is still pending.
The value of all of the disputes is estimated at about 166
million Brazilian reais (about €50 million).
Coperva litigation - Brazil
As part of the project to expand the grid in rural areas of
Brazil, in 1982 Companhia Energética do Ceará SA (“Coel-
ce”), then owned by the Brazilian government and now an
Enel Group company, had entered into contracts for the
use of the grids of a number of cooperatives established
specifically to pursue the expansion project. The contracts
provided for the payment of a monthly fee by Coelce, which
was also required to maintain the networks.
Those contracts, between cooperatives established in spe-
cial circumstances and the then public-sector company, do
not specifically identify the grids governed by the agree-
On June 11, 2007, Enel SpA entered into a Privatization
Agreement with SC Electrica SA for the privatization of
Electrica Muntenia Sud (“EMS”). The accord provided for
the sale to Enel of 67.5% of the Romanian company. In ac-
cordance with the unbundling rules, in September 2008
the distribution and electricity sales operations were tran-
sferred to two new companies, Enel Distributie Muntenia
(“EDM”) and Enel Energie Muntenia (“EEM”). In December
2009, Enel transferred the entire capital of the two compa-
nies to Enel Investment Holding BV (“EIH”).
On July 5, 2013, Electrica notified Enel SpA, EIH, EDM and
EEM (limited to a number of claims) of a request for arbi-
tration before the International Chamber of Commerce in
Paris, claiming damages for alleged violations of specific
clauses of the Privatization Agreement.
More specifically, the plaintiff claimed payment of penal-
ties of about €800 million, plus interest and additional un-
specified damages.
The proceeding is under way and Enel is conducting its de-
fense.
On September 29, 2014, SAPE notified Enel and Enel In-
vestment Holding that it had submitted a further arbitra-
tion request to the International Court of Arbitration in
Paris seeking around €500 million (plus interest) in con-
nection with the put option contained in the Privatization
Agreement. The put option gives SAPE the right to sell a
13.57% stake in Enel Distributie Muntenia and Enel Energie
Muntenia.
The suit is at a preliminary stage.
Gabčíkovo dispute -
Slovakia
ments, which has prompted a number of the cooperatives
Slovenské elektrárne (SE) is involved in a number of cases be-
to sue Coelce asking for, among other things, a revision of
fore the national courts concerning the 720 MW Gabčíkovo
the fees agreed in the contracts. These actions include the
hydroelectric plant, which is administered by Vodoho-
suit filed by Cooperativa de Eletrificação Rural do V do Aca-
spodárska Výsatavba Štátny Podnik (“VV“) and whose ope-
rau Ltda (Coperva) with a value of about 161 million Brazilian
ration and maintenance, as part of the privatization of SE in
reais (about €49 million). The court of first instance ruled in
2006, had been entrusted to SE for a period of 30 years under
favor of Coelce but Coperva has appealed the decision.
a management agreement (the VEG Operation Agreement).
277
Immediately after the closing of the privatization, the Pu-
ceeding, EGP and the Republic of El Salvador signed a fra-
blic Procurement Office (PPO) filed suit with the Court of
mework agreement to settle the multiple disputes concer-
Bratislava seeking to void the VEG Operation Agreement
ning EGP’s investments in LaGeo.
on the basis of alleged violations of the regulations gover-
Under the provisions of the accord, in December 2014, fol-
ning public tenders, qualifying the contract as a service
lowing the revocation of the seizure of EGP’s assets in El
contract and as such governed by those regulations. In No-
Salvador, EGP sold its entire stake in LaGeo (equal to 36.2%)
vember 2011 the court of first instance ruled in favor of SE,
to INE for about $280 million.
whereupon the PPO appealed the decision.
The full effectiveness of the final settlement of the dispu-
In parallel with the PPO action, VV also filed a number of
te with the Republic of El Salvador and the termination of
suits, asking in particular for the voidance of the VEG Ope-
the ICSID arbitration proceeding are subject to a number
ration Agreement and for SE to pay VV the revenue from
of specific conditions (termination of the pending local li-
the sale of electricity generated by the plant since 2006.
tigation against EGP and its representatives) to be verified
SE considers the claims of VV to be unfounded and is con-
in the next six months. Pending final resolution, the ICSID
testing the various suits, which have been suspended pen-
proceeding has been suspended.
ding a decision in the proceeding launched by the PPO.
On March 9, 2015, the decision of the appeals court over-
turned the ruling of the court of first instance and voided
the contract. The ruling will be appealed once the decision
is officially notified.
LaGeo arbitration
The case regards a complex dispute that began in Octo-
ber 2008, when Enel Produzione (succeeded by Enel Gre-
en Power - “EGP”) undertook arbitration action before
the International Chamber of Commerce in Paris against
Comisión Ejecutiva Hidroeléctrica (“CEL”, wholly owned
by the government of El Salvador) and its subsidiary In-
versiones Energéticas (“INE”). Enel claimed breach of the
shareholders’ agreement regarding the Salvadoran com-
pany LaGeo, which operated in the geothermal industry.
Enel’s claims were upheld in the initial ruling, the second
ruling and before the Court of Cassation in France, but in
the meantime a number of actions were undertaken in El
Salvador against EGP to void the shareholders’ agreement
and involve the company as a civilly liable party in a crimi-
nal enquiry into alleged “peculado” in the acquisition of La-
Geo. In addition, in July 2013 the Parliament of El Salvador
passed a measure approving the withdrawal of El Salvador
from the Washington Convention of 1965, which allowed
foreign investors to bring claims against a state before the
International Center for Settlement of Investment Disputes
(ICSID). Before that law was enacted, however, Enel had ini-
tiated a proceeding before the ICSID to preserve its rights
against the interference of the Salvadoran government in
EGP’s relations with CEL.
On December 7, 2014, within the ICSID arbitration pro-
278
Dispute between Energia
XXI Energias Renováveis e
Consultoria Limitada and
Enel Green Power España
In 1999 Energia XXI filed for arbitration against MADE (now
Enel Green Power España) for alleged losses incurred due
to the early termination of an agency contract for the sale
of wind generators and wind farms of Enel Green Power
España in Portugal and Brazil. With its ruling of November
21, 2000, the arbitration board found that the termination
of the contract by MADE was illegitimate and ordered it
to pay: (i) legal costs; (ii) the fixed portion of the monthly
fee for the period from July 21, 1999 (date of termination
of contract) to October 9, 2000 (expiration date of the con-
tract), equal to about €50,000; (iii) as well as lost profits to
be determined in respect of contracts for at least 15 MW
of capacity. Following the arbitration ruling, two civil court
cases began:
> the first appeal was lodged by MADE with the Tribunal
Judicial de Primera Instancia asking for the arbitration
ruling to be voided. The case is still pending with the
court of first instance following referral by the Court of
Appeal (subsequently confirmed by the Supreme Court
of Appeal on September 26, 2013), which granted Enel
Green Power España’s appeal of the admission of briefs;
> the second appeal was lodged by Energia XXI on May 9,
2006, with the Civil Court of Lisbon, with which Energia
XXI asked for Enel Green Power España to be ordered
to pay the amount determined in the arbitration ruling
(the losses for which Energia XXI now puts at €546 mil-
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS lion). Enel Green Power España considers the claim to be
Construcción Tecnimont Chile Compañía Limitada, Tecni-
unfounded. Acting on a petition by Enel Green Power
mont SpA, Tecnimont do Brasil Construção and Admini-
España, the court has so far suspended the case pen-
stração de Projetos Ltda (together, “Tecnimont”), Slovens-
ding resolution of the first suit.
ke Energeticke Strojarne AS and Ingeniería y Construcción
CIS and Interporto
Campano
On December 4, 2009 and August 4, 2010 Enel Green
Power SpA signed, with Interporto Campano and Centro
Ingrosso Sviluppo Campania Gianni Nappi SpA (“CIS”),
respectively, a leasehold agreement with a term of more
than nine years and a leasehold estate for the rooftops
of the industrial sheds of CIS and Interporto Campano in
order to build and operate a photovoltaic plant. Two fires
subsequently broke out at those sheds: the first occurred
on April 22, 2011, during the construction of the plant,
while the second broke out on March 26, 2012.
Following the fires, CIS undertook two arbitration procee-
dings, on November 3, 2012 and May 23, 2014, respecti-
vely, with the latter undertaken together with Interporto
Campano.
In the arbitration ruling filed on January 31, 2015, the ru-
ling of the arbitration board in the first proceeding found
against the contractor as well as contributory negligence
on the part of both CIS and Enel Green Power (“EGP”),
ordering EGP to pay CIS about €2.5 million, equal to half
of the damages originally admitted for indemnification.
In the second arbitration proceeding, CIS and Interporto
Campano sought the termination of the leasehold estate
and the more-than-9-year lease as well as damages for al-
leged losses following breaches by EGP quantified in the
amount of about €65 million, of which about €35 million
for costs incurred in dismantling the photovoltaic plants.
EGP asked for the suits to be dismissed and filed a counter-
claim for damages of about €40 million. The proceeding is
at an early stage.
Bocamina II arbitration -
Chile
SES Chile Limitada (together “SES”). On October 17, 2012
Endesa Chile submitted a request for arbitration before
the International Chamber of Commerce in Paris, citing the
non-performance of the consortium and claiming dama-
ges (subsequently quantified in the amount of about $373
million, or about €270 million).
During the arbitration proceedings, the consortium filed a
counterclaim against Endesa Chile in the amount of about
$1,300 million – about €940 million (most of which in the
form of damages for the alleged harm to the image of Tec-
nimont following the execution of the bank guarantees by
Endesa Chile).
In January 2015, Endesa Chile and the consortium signed a
settlement agreement to close the arbitration proceeding
(and forestall any other possible litigation) concerning
the EPC contract for the construction of the Bocamina II
project.
Tax litigation in Brazil
> In 1998, Ampla Energia e Serviços SA financed the acqui-
sition of Coelce with the issue of bonds in the amount
of $350 million (“Fixed Rate Notes” - FRN) subscribed by
its Panamanian subsidiary, which had been established
to raise funds abroad. Under the special rules then in for-
ce, subject to maintaining the bond until 2008, the in-
terest paid by Ampla to its subsidiary was not subject to
withholding tax in Brazil.
However, the financial crisis of 1998 forced the Panama-
nian company to refinance itself with its Brazilian parent,
which for that purpose obtained loans from local banks.
The tax authorities considered this financing to be the
equivalent of the early extinguishment of the bond, with
the consequent loss of entitlement to the exemption
from withholding tax.
In December 2005, Ampla Energia e Serviços SA carried
out a spin-off in favor of Ampla Investimentos e Serviços
SA that involved the transfer of the residual FRN debt and
the associated rights and obligations.
Litigation is under way concerning the contract for the
On November 6, 2012, the Camara Superior de Recursos
construction of the second unit of the Bocamina thermal
Fiscales (the highest level of administrative courts) issued
plant (“Bocamina II”). The contract was agreed in 2007 by
a ruling against Ampla, for which the company promptly
Endesa Chile with a consortium made up of Ingeniería y
asked that body for clarifications. On October 15, 2013,
279
Ampla was notified of the denial of the request for clari-
Energética do Ceará (for the years 2003, 2004 and 2006-
fication (“Embargo de Declaración”), thereby upholding
2009), challenging the deduction of ICMS in relation to
the previous adverse decision. The company provided
the purchase of certain assets. The companies challenged
security for the debt and on June 27, 2014 continued liti-
the assessments, arguing that they correctly deducted
gation before the ordinary courts (“Tribunal Superior de
the tax and asserting that the assets, the purchase of
Justiça”).
which generated the ICMS, are intended for use in their
The amount involved in the dispute at December 31,
electricity distribution activities.
2014 was about €332 million.
The amount involved in the disputes totaled approxima-
tely €58 million at December 31, 2014.
> In 2002, the State of Rio de Janeiro changed the deadli-
nes for payment of the ICMS (Imposto sobre Circulação
> On November 4, 2014, the Brazilian tax authorities is-
de Mercadorias e Serviços) by withholding agents (to
sued an assessment against Endesa Brasil SA (now Enel
the 10th, 20th and 30th of each month - Ley Benedicta).
Brasil SA) alleging the failure to apply withholding tax to
Owing to liquidity problems, between September 2002
payments of allegedly higher dividends to non-resident
and February 2005, Ampla Energia e Serviços continued
recipients.
to pay the ICMS in compliance with the previous system
More specifically, in 2009, Endesa Brasil, as a result of the
(the 5th day of the subsequent month). Despite an infor-
first-time application of the IFRS-IAS, had cancelled go-
mal agreement, the Brazilian tax authorities issued an
odwill, recognizing the effects in equity, on the basis of
assessment for late payment of the ICMS (“multa de de-
the correct application of the accounting standards it had
mora”). Ampla appealed the measure (the highest level
adopted. The Brazilian tax authorities, however, asser-
of administrative courts), arguing that the penalties im-
ted – during a tax assessment – that the accounting tre-
posed were not due owing to the application of a num-
atment was incorrect and that the effects of the cancella-
ber of amnesties granted between 2004 and 2006. In the
tion should have been recognized through profit or loss.
event of an adverse ruling, the company will continue
As a result, the corresponding value (about €202 million)
litigation before the ordinary courts.
was reclassified as a payment of income to non-residents
While the outcome of the final administrative procee-
and, therefore, subject to withholding tax of 15%.
dings is not yet known, following the registration of the
On December 2, 2014, the company appealed the initial
claim in the Public Registry of the State of Rio de Janeiro,
ruling, arguing that its accounting treatment was correct.
Ampla was required to provide security.
It should be noted that the accounting treatment adop-
The amount involved in the dispute at December 31,
ted by the company was agreed with the external auditor
2014 was about €83 million.
and also confirmed by a specific legal opinion issued by a
> The States of Rio de Janeiro and Ceará issued a number
local firm specializing in corporate law.
of tax assessments against Ampla Energia e Serviços (for
The overall amount involved in the dispute at December
the years 1996-1999 and 2007-2012) and Companhia
31, 2014 was about €66 million.
50. Events after the reporting period
Enel Green Power extends
framework accord
with Vestas to develop
additional wind capacity
in the United States
On January 12, 2015 Enel Green Power, acting through its
subsidiary Enel Green Power North America Inc. (“EGP NA”),
extended the framework agreement signed at the end of
2013 with Vestas for the development of wind farms in the
United States.
The 2013 agreement, which provided for the supply of Ve-
stas wind turbines, has supported EGP NA’s recent successful
growth in the United States.
The capacity yet to be developed under the 2013 agreement,
together with the current extension, will enable EGP NA to
qualify up to approximately 1 GW of future wind capacity in
the United States for Federal Production Tax Credits (PTCs).
280
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS
Exchange of bonds and
issue of new bonds
atesina (the counterparty in the agreement), while the remai-
ning 50% was sold to Dolomiti Energia following exercise of
its pre-emption rights. The disposal is part of the agreements
between Enel Produzione and SEL.
On January 27, 2015, Enel Finance International NV (“EFI”), a
The agreements also provide for the sale of the 40% stake
wholly-owned subsidiary of Enel SpA, following a non-binding
held by Enel Produzione in SE Hydropower for €345 million.
public exchange offer that ran from January 14 to January 21,
The latter transaction will be finalized only upon meeting the
purchased bonds issued by EFI and guaranteed by Enel in the
final condition provided for under the terms of the agreement,
total amount of €1,429,313,000. The consideration for the
namely for SEL to obtain a bank commitment to provide the
purchase was represented by (i) senior fixed-rate notes with a
funding for the purchase of the equity stake. The condition
minimum lot size of €100,000 (and multiples of €1,000) issued
is expected to be met by the end of the 1st Quarter of 2015.
by EFI (under the Global Medium-Term Notes program of EFI
and Enel) and guaranteed by Enel, in the principal amount of
€1,462,603,000 and (ii) cash in the amount of €194,365,920.
The transaction was carried out as part of the optimization
of EFI’s financial management. It is intended to pursue acti-
ve management of the Group’s maturity structure and the
cost of funds. The new notes, which EFI issued as part of the
Renegotiation of
revolving credit line of
about €9.4 billion
exchange offer under the Global Medium-Term Notes pro-
On February 12, 2015, Enel SpA and its Dutch subsidiary Enel
gram with an Enel guarantee, bear an interest rate of 1.966%
Finance International NV renegotiated the revolving credit fa-
and mature on January 27, 2025.
cility of about €9.4 billion agreed on February 8, 2013, redu-
New bond issue of
up to €1 billion to
back exchange offers
for existing bonds is
authorized
cing its cost and extending the facility’s maturity to 2020 from
the original expiry date of April 2018.
The credit facility, which can be used by Enel and/or by Enel Fi-
nance International with a Parent Company guarantee, is not
connected with the Group’s debt refinancing program. It is in-
tended to provide the Group’s treasury with an extremely fle-
xible and practical instrument for managing working capital.
The cost of the credit facility varies in relation to Enel’s credit
rating and bears a spread on Euribor that, based upon Enel’s
current rating, falls to 80 basis points from the previous 190
On January 26, 2015, the Board of Directors authorized one or
basis points, while the commitment fee has been reduced to
more new bond issues, to be carried out by December 31, 2015,
35% of the spread from the previous 40%, i.e. from 76 basis
with a total maximum principal amount of up to €1 billion.
points to 28 basis points.
The authorization is intended to allow Enel to make new
A number of Italian and foreign banks were involved in the tran-
bond issues to serve any exchange offers for bonds previously
saction, with Mediobanca serving as the Documentation Agent.
issued by the Company under the Global Medium-Term No-
tes program, in order to optimize the Enel Group’s capital and
financial structure and to permit it to seize any opportunities
that may arise in international financial markets.
Disposal of SF Energy
Updates of disposal plan
On February 25, 2015, the Enel Board of Directors examined
the updates of the plan for disposals of the Group’s equity
investments in Eastern Europe, announced to the market on
July 10, 2014. Under the strategic guidelines set out in the
On January 29, 2015, the agreement signed on November 7,
new business plan to be presented to the financial communi-
2014 by Enel Produzione, a subsidiary of Enel, for the sale of
ty, it decided to suspend the process of disposing of the distri-
its stake in SF Energy was finalized at a price of €55 million. Of
bution and sales assets in Romania and to continue with the
the entire stake, 50% was sold to SEL - Società Elettrica Alto-
disposal of the generation assets held in Slovakia.
281
51. Share-based incentive plans
Between 2000 and 2008, Enel implemented stock incentive
condition that the executives concerned remain employed
plans (stock option plans and restricted share units plans)
within the Group, with a few exceptions (such as, for exam-
each year in order to give the Enel Group – in line with inter-
ple, termination of employment because of retirement or
national business practice and the leading Italian listed com-
permanent invalidity, exit from the Group of the company
panies – a means for fostering management motivation and
at which the executive is employed, and succession mortis
loyalty, strengthening a sense of corporate team spirit in our
causa) specifically governed by the Regulations.
key personnel, and ensuring their enduring and constant ef-
The vesting of the options is subject to achievement of two
fort to create value, thus creating a convergence of interests
operational objectives, both calculated on a consolidated,
between shareholders and management.
three-year basis: (i) earnings per share (EPS, equal to Group
The remainder of this section describes the features of the
net income divided by the number of Enel shares in circula-
stock incentive plans adopted by Enel and still in place in 2014.
tion) for the 2008-2010 period, determined on the basis of
2008 stock option plan
the amounts specified in the budgets for those years and (ii)
the return on average capital employed (ROACE, equal to
the ratio between operating income and average net capital
employed) for the 2008-2010 period, also determined on the
The 2008 plan provides for the grant of personal, non-transfe-
basis of the amounts specified in the budgets for those years.
rable inter vivos options to subscribe a corresponding num-
Depending on the degree to which the objectives are achie-
ber of newly issued ordinary Enel shares to senior managers
ved, the number of options that can actually be exercised by
selected by the Board of Directors. The main features of the
each beneficiary is determined on the basis of a performance
2008 plan are discussed below.
scale established by the Enel Board of Directors and may vary
Beneficiaries
up or down with respect to the basic option grant by a per-
centage amount of between 0% and 120%.
The beneficiaries of the plan – who include the person who
at the time of the grant of the options is CEO of Enel in his or
Exercise procedures
her capacity as General Manager – comprise the small num-
Once achievement of the operational objectives has been
ber of managers who represent the first reporting line of top
verified, the options can be exercised as from the third year
management. The head of the Infrastructure and Networks
after the grant year and up to the sixth year as from the
Division does not participate but has received other incentives
grant year. The options can be exercised at any time, with
linked to specific objectives regarding the Division’s business
the exception of two blocking periods lasting about one
area. The exclusion was motivated by the obligation for Enel
month before the approval of the draft annual financial sta-
– connected with the full liberalization of the electricity sector
tements of Enel SpA and the half-year report by the Board
as from July 1, 2007 – to implement administrative and ac-
of Directors.
counting unbundling so as to separate the activities included
in the Infrastructure and Networks Division from those of the
Group’s other business areas. The beneficiaries have been di-
Strike price
vided into two brackets (the first includes only the CEO of Enel
The strike price was originally set at €8.075, equal to the
in his capacity as General Manager) and the basic number of
reference price for Enel shares observed on the electronic
options granted to each has been determined on the basis of
stock exchange of Borsa Italiana on January 2, 2008. The
their gross annual compensation and the strategic importan-
strike price was modified by the Board of Directors on July
ce of their positions, as well as the price of Enel shares at the
9, 2009 – which set it at €7.118 – in order to take account of
start of the period covered by the plan (January 2, 2008).
the capital increase completed by Enel that month and the
Exercise conditions
impact that it had on the market price of Enel shares.
Subscription of the shares is charged entirely to the benefi-
ciaries, as the plan does not provide for any facilitated terms
The right to subscribe the shares was subordinate to the
to be granted in this respect.
282
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS Shares serving the plan
In June 2008, the Extraordinary Shareholders’ Meeting
granted the Board of Directors a five-year authorization to
carry out a paid capital increase in the maximum amount of
€9,623,735.
The Board of Directors has not implemented the capital in-
crease in the light of developments in the Enel stock price.
Developments in the 2008
stock option plan
The Board of Directors has determined that in the 2008-
2010 period both EPS and ROACE exceeded the levels set
out in the budgets for those years, thereby enabling the
options to vest in an amount equal to 120% of those origi-
nally granted to the beneficiaries, in application of the per-
formance scale established by the Enel Board of Directors.
The following table reports developments in the 2008 stock option plan:
Total options granted
8,019,779 (1)
Number of
beneficiaries
16 Group
executives
Verification
of plan
conditions
Options
exercised at
Dec. 31, 2013
Options lapsed
at Dec. 31,
2013
Options lapsed
in 2014
Options
outstanding at Dec.
31, 2014
Strike price
€8.075 (2)
Rights vested
None
None
9,623,735
None
(1) Following the review conducted by the Enel Board of Directors on the occasion of the approval of the Enel Group’s consolidated financial statements for
2010 to determine the degree to which the two operational targets (EPS and ROACE) had been achieved, a total of 9,623,735 options have vested.
(2) The strike price was changed to €7.118 as from July 9, 2009 in order to take account of the impact of the capital increase completed by Enel that month on
the market price of Enel shares.
It should be noted that the overall dilution of share capital
The following table summarizes developments over the
as at December 31, 2014 attributable to the exercise of the
course of 2012, 2013 and 2014 in the Enel stock option
stock options granted under the various plans amounts to
plans, detailing the main assumptions used in calculating
1.31%.
their fair value.
Developments in stock option plans
Number of options
Options granted at December 31, 2012
Options exercised at December 31, 2012
Options lapsed at December 31, 2012
Options outstanding at December 31, 2012
Options lapsed in 2013
Options outstanding at December 31, 2013
Options lapsed in 2014
Options outstanding at December 31, 2014
Fair value at grant date (euro)
Volatility
Option expiry
2008 plan
9,623,735 (1)
9,623,735 (1)
-
9,623,735 (1)
9,623,735 (1)
-
0.17
21%
December 2014
(1) Following the review conducted by the Enel SpA Board of Directors on the occasion of the approval of the Enel Group’s consolidated financial statements for
2010 to determine the degree to which the two operational targets (EPS and ROACE) set for the 2008 plan had been achieved, a total of 9,623,735 options
have vested (120% of the 8,019,779 options originally granted).
Restricted share units
plan 2008
ved an additional incentive mechanism, a restricted share
units plan. The plan – which is also linked to the performan-
ce of Enel shares – differs from the stock option plans in that
it does not involve the issue of new shares and therefore has
In June 2008 Enel’s Ordinary Shareholders’ Meeting appro-
no diluting effect on share capital. It grants the beneficiaries
283
rights to receive the payment of a sum equal to the product
analogous substitution by Borsa Italiana in 2009 – and
of the number of units exercised and the average value of
the Bloomberg World Electric Index (weight: 50%); and
Enel shares in the month preceding the exercise of the units.
> for the remaining 50% of the basic number of units gran-
Beneficiaries
ted, a comparison on a total shareholders’ return basis
– for the period from January 1, 2008 to December 31,
2010 – between the performance of ordinary Enel shares
The plan covers the management of the Enel Group (inclu-
on the electronic stock exchange of Borsa Italiana SpA
ding the managers already participating in the 2008 stock
and the benchmark index calculated as the average of
option plan, which includes the person who at the time of
the performance of the MIBTEL index (weight: 50%) – re-
the grant of the units is CEO of Enel in his or her capacity
placed in 2009 with the FTSE Italia All Share index as in-
as General Manager), with the exception of the managers
dicated above – and the Bloomberg World Electric Index
of the Infrastructure and Networks Division for the reasons
(weight: 50%).
discussed with the 2008 stock option plan. The beneficiaries
The number that can be exercised may vary up or down
have been divided into brackets and the basic number of
with respect to the basic unit grant by a percentage
units granted to each has been determined on the basis of
amount of between 0% and 120% as determined on the
the average gross annual compensation of the bracket, as
basis of a specific performance scale.
well as the price of Enel shares at the start of the period co-
If the hurdle target is not achieved in the first two-year pe-
vered by the plan (January 2, 2008).
riod, the first tranche of 50% of the units granted may be
Exercise conditions
recovered if the same hurdle target is achieved over the
longer three-year period indicated above. It is also possible
to extend the validity of the performance level registered
Exercise of the units – and the consequent receipt of the
in the 2008-2010 period to the 2008-2009 period, whe-
payment – is subordinate to the condition that the execu-
re performance was higher in the longer period, with the
tives concerned remain employed within the Group, with
consequent recovery of units that did not actually vest in
a few exceptions (such as, for example, termination of em-
the first two-year period because of the lower performan-
ployment because of retirement or permanent invalidity,
ce level and on the condition that the first 50% of the basic
exit of the company at which the beneficiary is employed
unit grant has not yet been exercised.
from the Group or succession mortis causa) specifically go-
verned by the Regulations. As regards other exercise con-
ditions, the plan first establishes a suspensory operational
Exercise procedures
objective (a “hurdle target”): (i) for the first 50% of the
Once achievement of the hurdle target and the perfor-
basic number of units granted, Group EBITDA for 2008-
mance objectives has been verified, of the total number of
2009, calculated on the basis of the amounts specified in
units granted, 50% may be exercised as from the second
the budgets for those years; and (ii) for the remaining 50%
year subsequent to the grant year and the remaining 50%
of the basic number of units granted, Group EBITDA for
as from the third year subsequent to the grant year, with
2008-2010, calculated on the basis of the amounts speci-
the deadline for exercising all the units being the sixth year
fied in the budgets for those years.
subsequent to the grant year. In any event, each year the
If the hurdle target is achieved, the actual number of units
units can only be exercised during four time windows of
that can be exercised by each beneficiary is determined on
ten business days each (to be announced by Enel over the
the basis of a performance objective represented by:
course of the plan) in the months of January, April, July and
> for the first 50% of the basic number of units granted,
October.
a comparison on a total shareholders’ return basis – for
the period from January 1, 2008 to December 31, 2009 –
between the performance of ordinary Enel shares on the
electronic stock exchange of Borsa Italiana SpA and that
of a specific benchmark index calculated as the average
of the performance of the MIBTEL index (weight: 50%)
– replaced with the FTSE Italia All Share index after an
Developments in the 2008
restricted share units plan
The review conducted by the Board of Directors to verify
satisfaction of the exercise conditions found the following.
For the first 50% of the basic units granted, in 2008-2009
284
ENEL ANNUAL REPORT 2014CONSOLIDATED FINANCIAL STATEMENTS the hurdle target for Group EBITDA had been achieved
vested. In view of the fact that the level of achievement of
and Enel shares had slightly outperformed the benchmark
the performance targets over the 2008-2010 period was
index, meaning that according to the performance scale
higher than that achieved in 2008-2009, it is therefore
100% of the units originally granted had vested. For the re-
possible to recover the units that did not vest in 2008-2009
maining 50% of the basic grant awarded, in 2008-2010 the
as a result of the lower level of achievement of the perfor-
hurdle target for Group EBITDA had been achieved and
mance targets for beneficiaries who had not yet exercised
Enel shares significantly outperformed the benchmark in-
the first 50% of the basic units granted before achieve-
dex, meaning that according to the performance scale an
ment of the targets for 2008-2010 had been ascertained.
amount equal to 120% of the units originally granted had
The following table reports developments in the 2008 restricted share units plan.
Number of RSU
RSU outstanding at December 31, 2012
of which vested at December 31, 2012
RSU lapsed in 2013
RSU exercised in 2013
RSU outstanding at December 31, 2013
of which vested at December 31, 2013
RSU lapsed in 2014
RSU exercised in 2014
RSU outstanding at December 31, 2014
of which vested at December 31, 2014
Fair value at the grant date (euro)
Expiry of the restricted share units
2008 plan
254,314
254,314
-
24,540
229,774
229,774
3,421
226,353
-
-
3.16
December 2014
285
Declaration of the Chief Executive
Officer and the officer responsible
for the preparation of corporate
financial reports
286
DECLARATION OF THE CHIEF EXECUTIVE OFFICER AND THE OFFICER RESPONSIBLE
ENEL ANNUAL REPORT 2014 Declaration of the Chief Executive Officer and the officer responsible for the preparation of
the consolidated financial report of the Enel Group at December 31, 2014, pursuant to the
provisions of Article 154-bis, paragraph 5, of Legislative Decree 58 of February 24, 1998 and
Article 81-ter of CONSOB Regulation 11971 of May 14, 1999
1. The undersigned Francesco Starace and Alberto De Paoli, in their respective capacities as Chief Executive Officer and officer
responsible for the preparation of the financial reports of Enel SpA, hereby certify, taking account of the provisions of Article
154-bis, paragraphs 3 and 4, of Legislative Decree 58 of February 24, 1998:
a. the appropriateness with respect to the characteristics of the Enel Group and
b. the effective adoption of the administrative and accounting procedures for the preparation of the consolidated financial
statements of the Enel Group in the period between January 1, 2014 and December 31, 2014.
2.
In this regard, we report that:
a. the appropriateness of the administrative and accounting procedures used in the preparation of the consolidated financial
statements of the Enel Group has been verified in an assessment of the internal control system for financial reporting. The
assessment was carried out on the basis of the guidelines set out in the “Internal Controls - Integrated Framework” issued
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO);
b. the assessment of the internal control system for financial reporting did not identify any material issues.
3.
In addition, we certify that the consolidated financial statements of the Enel Group at December 31, 2014:
a. have been prepared in compliance with the international accounting standards recognized in the European Union
pursuant to Regulation (EC) 1606/2002 of the European Parliament and of the Council of July 19, 2002;
b. correspond to the information in the books and other accounting records;
c. provide a true and fair representation of the performance and financial position of the issuer and the companies included
in the scope of consolidation.
4. Finally, we certify that the report on operations, included in the Annual Report 2014 and accompanied by the consolidated
financial statements of the Enel Group at December 31, 2014, contains a reliable analysis of operations and performance, as
well as the situation of the issuer and the companies included in the scope of consolidation, together with a description of the
main risks and uncertainties to which they are exposed.
Rome, March 18, 2015
Francesco Starace
Alberto De Paoli
Chief Executive Officer of Enel SpA
Officer responsible for the preparation of the financial
reports of Enel SpA
287
288
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS Separate
financial
statements
of Enel SpA
289
Income statement
Euro
Notes
2014
2013
of which with
related parties
of which with
related parties
Revenue
Revenue from services
Other revenue and income
Costs
Electricity purchases and consumables
Services, leases and rentals
Personnel
Depreciation, amortization and impairment losses
Other operating expenses
4.a
4.b
244,732,151
244,663,410
268,845,478
268,636,586
920,520
92,914
6,653,586
4,473,336
[Subtotal]
245,652,671
275,499,064
5.a
5.b
5.c
5.d
5.e
1,426,297
6,410,639
184,864,554
57,699,240
230,244,862
78,671,891
119,589,202
(32,288)
90,030,892
543,329,226
8,823,887
(487)
-
19,256,153
(317,979)
14,056,103
115,042
Operating income
(622,812,761)
[Subtotal]
868,465,432
349,566,383
(74,067,319)
Income from equity investments
Financial income from derivatives
Other financial income
Financial expense from derivatives
Other financial expense
Income before taxes
Income taxes
6
7
8
7
8
1,818,272,847
1,818,272,847
2,028,038,570
2,028,038,570
2,190,314,832
459,596,620
1,491,687,360
938,294,046
221,643,785
194,191,141
320,518,912
226,716,064
1,954,373,400
1,169,367,271
1,601,052,005
185,192,393
1,377,093,325
3,142,675
1,001,287,461
124,529,446
[Subtotal]
898,764,739
275,951,978
9
(282,250,536)
1,237,905,376
1,163,838,057
(208,522,895)
1,372,360,952
NET INCOME FOR THE YEAR
558,202,514
290
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS Statement of comprehensive income
Euro
Notes
2014
2013
Net income for the year
558,202,514
1,372,360,952
Other comprehensive income recyclable to profit or loss
Effective portion of change in the fair value of cash flow hedges
(73,365,668)
91,792,576
Income/(Loss) recognized directly in equity recyclable to profit or loss
(73,365,668)
91,792,576
Other comprehensive income not recyclable to profit or loss
Remeasurements of net defined benefit liabilities/(assets)
7,140,604
(3,811,101)
Income/(Loss) recognized directly in equity not recyclable to profit or loss
7,140,604
(3,811,101)
Income/(Loss) recognized directly in equity
22
(66,225,064)
87,981,475
TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE PERIOD
491,977,450
1,460,342,427
291
Balance sheet
Euro
ASSETS
Notes
at Dec. 31, 2014
at Dec. 31, 2013
Non-current assets
Property, plant and equipment
Intangible assets
Deferred tax assets
Equity investments
Derivatives
Other non-current financial assets
Other non-current assets
Current assets
Trade receivables
Tax receivables
Derivatives
Other current financial assets
Cash and cash equivalents
Other current assets
of which with
related parties
of which with
related parties
10
11
12
13
14
15
16
7,795,187
11,405,854
382,572,824
8,632,640
11,331,906
278,678,021
38,754,068,086
39,289,052,513
1,979,171,296
818,817,602
1,355,401,642
971,785,658
146,490,819
116,989,366
164,581,474
116,989,366
466,782,285
176,864,784
483,128,702
198,690,947
[Subtotal]
41,748,286,351
41,590,806,898
17
18
14
19
20
21
131,944,125
126,901,064
216,133,599
208,963,697
624,614,245
253,623,738
280,273,785
50,482,464
176,685,848
104,059,774
5,040,376,082
4,222,947,341
5,280,776,020
4,169,321,515
6,972,042,465
3,122,891,795
243,507,371
208,144,734
319,387,652
196,029,881
TOTAL ASSETS
55,041,044,424
50,960,305,550
[Subtotal]
13,292,758,073
9,369,498,652
292
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS Euro
Notes
LIABILITIES AND SHAREHOLDERS’ EQUITY
at Dec. 31, 2014
at Dec. 31, 2013
of which with
related parties
of which with
related parties
Shareholders’ equity
Share capital
Reserves
Retained earnings (loss carried forward)
Profit for the period
TOTAL SHAREHOLDERS’ EQUITY
Non-current liabilities
Long-term borrowings
Post-employment and other employee benefits
Provisions for risks and charges
Deferred tax liabilities
Derivatives
Other non-current liabilities
Current liabilities
Short-term borrowings
Current portion of long-term borrowings
Trade payables
Derivatives
Other current financial liabilities
Other current liabilities
9,403,357,795
9,113,576,853
6,061,293,373
558,202,514
9,403,357,795
9,179,799,975
5,911,368,935
1,372,360,952
25,136,430,535
25,866,887,657
17,287,754,222
17,764,398,155
301,792,836
16,242,515
251,979,935
335,802,956
22,914,882
130,417,074
2,483,607,608
469,314,078
2,097,671,557
69,551,426
286,974,494
286,925,885
283,108,323
281,355,187
22
23
24
25
12
14
26
[Subtotal]
20,628,351,610
20,634,312,947
23
23
27
14
28
30
4,745,815,106
4,319,403,537
1,653,452,736
1,531,015,176
2,362,593,688
1,060,916,047
138,773,087
54,531,005
212,116,969
82,427,757
359,151,436
233,714,323
237,438,726
71,724,967
694,402,099
54,139,432
586,528,715
30,211,789
975,526,863
396,492,507
708,651,753
643,231,699
TOTAL LIABILITIES
29,904,613,889
[Subtotal]
9,276,262,279
4,459,104,946
25,093,417,893
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
55,041,044,424
50,960,305,550
293
Statement of changes in shareholders’
equity
Share capital and reserves (Note 22)
Euro
Share capital
Share premium reserve
Legal reserve
Reserve pursuant to Law
292/1993
of defined benefit
measurement of financial
Retained earnings/(loss
Total shareholders’
obligation
instruments
carried forward) Net income for the year
equity
At January 1, 2013
9,403,357,795
5,292,076,658
1,880,671,559
2,215,444,500
(351,618,268)
3,899,806,022
3,420,002,506
25,827,978,649
Adjustment for adoption of IAS 19/R
(Employee benefits)
-
-
-
-
(12,997,883)
(6,337,719)
8,401,795
(10,933,807)
At January 1, 2013 restated
9,403,357,795
5,292,076,658
1,880,671,559
2,215,444,500
68,237,877
(12,997,883)
(351,618,268)
3,893,468,303
3,428,404,301
25,817,044,842
Reserve from
remeasurement
Reserve from
Other
sundry
reserves
68,237,877
Reclassification of retained earnings/
(losses carried forward) as a result
of adoption of IAS 19/R (Employee
benefits)
Other changes
Exercise of stock options
Stock option plans - changes for the
year
Allocation of 2012 net income:
- Dividends
- Legal reserve
- Retained earnings
Comprehensive income for the year:
Income/(Loss) recognized directly in
equity
Net income for the year
At December 31, 2013
At January 1, 2014
Other changes
Exercise of stock options
Stock option plans - changes for the
year
Allocation of 2013 net income:
- Dividends
- Legal reserve
- Retained earnings
Comprehensive income for the year:
Income/(Loss) recognized directly in
equity
Net income for the year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,403,357,795
5,292,076,658
1,880,671,559
2,215,444,500
(16,808,984)
(259,825,692)
5,911,368,935
1,372,360,952
25,866,887,657
9,403,357,795
5,292,076,658
1,880,671,559
2,215,444,500
(16,808,984)
(259,825,692)
5,911,368,935
1,372,360,952
25,866,887,657
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total at December 31, 2014
9,403,357,795
5,292,076,658
1,880,671,559
2,215,444,500
68,243,876
(9,668,380)
(333,191,360)
6,061,293,373
558,202,514
25,136,430,535
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
68,241,934
68,241,934
1,942
4,057
4,057
8,401,795
(8,401,795)
(1,410,503,669)
(1,410,503,669)
2,009,498,837
(2,009,498,837)
(3,811,101)
91,792,576
1.372.360.952
1.372.360.952
87,981,475
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,942
-
-
-
-
-
-
-
-
-
-
(1,222,436,514)
(1,222,436,514)
149,924,438
(149,924,438)
7,140,604
(73,365,668)
558,202,514
(66,225,064)
558,202,514
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
294
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS Adjustment for adoption of IAS 19/R
(Employee benefits)
Reclassification of retained earnings/
(losses carried forward) as a result
of adoption of IAS 19/R (Employee
benefits)
Other changes
Exercise of stock options
Stock option plans - changes for the
year
Allocation of 2012 net income:
- Dividends
- Legal reserve
- Retained earnings
Comprehensive income for the year:
Income/(Loss) recognized directly in
equity
Net income for the year
At December 31, 2013
At January 1, 2014
Other changes
Exercise of stock options
Stock option plans - changes for the
year
Allocation of 2013 net income:
- Dividends
- Legal reserve
- Retained earnings
Comprehensive income for the year:
Income/(Loss) recognized directly in
equity
Net income for the year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,403,357,795
5,292,076,658
1,880,671,559
2,215,444,500
9,403,357,795
5,292,076,658
1,880,671,559
2,215,444,500
Share capital and reserves (Note 22)
Euro
Share capital
Share premium reserve
Legal reserve
292/1993
At January 1, 2013
9,403,357,795
5,292,076,658
1,880,671,559
2,215,444,500
Reserve pursuant to Law
Other
sundry
reserves
68,237,877
Reserve from
remeasurement
of defined benefit
obligation
Reserve from
measurement of financial
instruments
Retained earnings/(loss
carried forward) Net income for the year
Total shareholders’
equity
-
(351,618,268)
3,899,806,022
3,420,002,506
25,827,978,649
-
(12,997,883)
-
(6,337,719)
8,401,795
(10,933,807)
At January 1, 2013 restated
9,403,357,795
5,292,076,658
1,880,671,559
2,215,444,500
68,237,877
(12,997,883)
(351,618,268)
3,893,468,303
3,428,404,301
25,817,044,842
-
4,057
-
-
-
-
-
-
-
68,241,934
68,241,934
1,942
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,401,795
(8,401,795)
(1,410,503,669)
(1,410,503,669)
2,009,498,837
(2,009,498,837)
-
-
-
1,942
-
-
(1,222,436,514)
(1,222,436,514)
149,924,438
(149,924,438)
-
4,057
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,811,101)
91,792,576
-
-
-
-
-
87,981,475
1.372.360.952
1.372.360.952
(16,808,984)
(259,825,692)
5,911,368,935
1,372,360,952
25,866,887,657
(16,808,984)
(259,825,692)
5,911,368,935
1,372,360,952
25,866,887,657
7,140,604
(73,365,668)
-
-
-
-
-
558,202,514
(66,225,064)
558,202,514
Total at December 31, 2014
9,403,357,795
5,292,076,658
1,880,671,559
2,215,444,500
68,243,876
(9,668,380)
(333,191,360)
6,061,293,373
558,202,514
25,136,430,535
295
Statement of cash flows
Euro
Notes
Net income for the year
Adjustments for:
Depreciation, amortization and impairment losses of
intangible assets and property, plant and equipment
Exchange rate adjustments of foreign currency assets
and liabilities
Accruals to provisions
Dividends from subsidiaries, associates and other
companies
Net financial (income)/expense
Income taxes
(Gains)/Losses from disposals and other non-
monetary items
Cash flows from operating activities before
changes in net current assets
Increase/(Decrease) in provisions
(Increase)/Decrease in trade receivables
(Increase)/Decrease in financial and non-financial
assets/liabilities
Increase/(Decrease) in trade payables
2014
2013
of which with
related parties
of which with
related parties
558,202,514
1,372,360,952
5.d
11,703,869
8,823,887
287,123,443
24,534,294
(44,451,090)
5,351,239
6
9
17
27
(1,818,272,847)
(1,818,272,847)
(2,028,038,570)
(2,028,038,570)
623,640,479
524,292,099
821,498,632
(855,288,272)
(282,250,536)
(208,522,895)
535,184,427
199,541
(60,134,357)
(55,266,390)
(72,778,304)
(45,341,313)
84,189,474
82,062,633
261,670,783
261,374,143
54,102,343
(233,456,295)
1,039,665,816
385,631,611
(73,343,882)
(27,896,752)
18,740,838
14,716,332
Interest income and other financial income collected
774,010,519
470,312,293
884,976,129
536,801,979
Interest expense and other financial expense paid
(1,369,270,987)
(148,092,677)
(1,558,640,462)
(315,924,208)
Dividends from subsidiaries, associates and other
companies
Income taxes paid (consolidated taxation
mechanism)
Cash flows from operating activities (a)
Investments in property, plant and equipment and
intangible assets
Equity investments
Cash flows from investing/disinvesting activities
(b)
Financial debt (new long-term borrowing)
Financial debt (repayments and other net changes)
Net change in long-term financial payables/
(receivables)
Net change in short-term financial payables/
(receivables)
Dividends paid
Increase in capital and reserves due to exercise of
stock options
Cash flows from financing activities (c)
Increase/(Decrease) in cash and cash equivalents
(a+b+c)
Cash and cash equivalents at the beginning of the
year
Cash and cash equivalents at the end of the year
6
1,818,272,847
1,818,272,847
2,028,038,570
2,028,038,570
(246,793,145)
925,766,422
(887,496,996)
1,668,835,061
10-11
13
(10,940,364)
(10,406,565)
(12,862,854)
(12,765,252)
(200,000)
(200,000)
(100,000,000)
(100,000,000)
23
23
22
22
20
20
(11,140,364)
1,602,264,514
(1,103,409,596)
(112,862,854)
2,651,827,471
(3,908,963,730)
(2,500,000,000)
(974,482,447)
138,110,953
27,332,965
4,632,587,974
2,682,474,947
(2,364,107,212)
(1,278,001,143)
(1,222,435,833)
(1,410,503,669)
-
-
2,934,524,612
(4,893,636,187)
3,849,150,670
(3,337,663,980)
3,122,891,795
6,972,042,465
6,460,555,775
3,122,891,795
296
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS Notes to the financial statements
1
Form and content of the
financial statements
Basis of presentation
The separate financial statements for the year ended De-
cember 31, 2014 have been prepared in accordance with in-
ternational accounting standards (International Accounting
Standards - IAS and International Financial Reporting Stan-
dards - IFRS) issued by the International Accounting Standards
Board (IASB), the interpretations of the International Financial
Enel SpA is a corporation (società per azioni) that operates in
Reporting Interpretations Committee (IFRIC) and the Stan-
the electricity and gas sector and has its registered office in
ding Interpretations Committee (SIC), recognized in the Eu-
Viale Regina Margherita 137, Rome, Italy.
ropean Union pursuant to Regulation (EC) 1606/2002 and in
In its capacity as holding company, Enel SpA sets the strategic
effect as of the close of the year. All of these standards and
objectives for the Group and its subsidiaries and coordinates
interpretations are hereinafter referred to as the “IFRS-EU”.
their activities. In providing management and coordination,
The financial statements have also been prepared in confor-
Enel SpA’s activities on behalf of the other Group companies
mity with measures issued in implementation of Article 9,
can be summarized as follows:
> corporate governance;
paragraph 3, of Legislative Decree 38 of February 28, 2005.
The financial statements consist of the income statement,
> extraordinary financing and financial planning;
the statement of comprehensive income, the balance she-
> tax planning and strategy;
> risk assessment management;
> legal policies;
et, the statement of changes in shareholders’ equity and
the statement of cash flows and the related notes.
The assets and liabilities reported in the balance sheet are
> guidelines on management training and compensation
classified on a “current/non-current basis”, with separate
policies;
> government relations;
> accounting guidelines;
> strategic marketing.
reporting of assets held for sale and liabilities included in
disposal groups held for sale, if any. Current assets, which
include cash and cash equivalents, are assets that are in-
tended to be realized, sold or consumed during the normal
Enel SpA performs, both directly and through the subsidiary
operating cycle of the Company or in the 12 months fol-
Enel Finance International NV, a centralized treasury function
lowing the close of the financial year; current liabilities are
for the Group (with the exception of the Endesa Group), the-
liabilities that are expected to be settled during the normal
reby ensuring that the companies have access to the money
operating cycle of the Company or within the 12 months
and capital markets. Furthermore, the Company, directly and
following the close of the financial year.
through Enel Insurance NV, provides insurance coverage.
The income statement is classified on the basis of the na-
As the Parent Company, Enel SpA has prepared the consoli-
ture of costs, with separate reporting of net income/(loss)
dated financial statements of the Enel Group for the year en-
from continuing operations and net income/(loss) from any
ding December 31, 2014, which form an integral part of this
discontinued operations.
Annual Report pursuant to Article 154-ter, paragraph 1, of the
The indirect method is used for the statement of cash
Consolidate Law on Financial Intermediation (Legislative De-
flows, with separate reporting of any cash flows by ope-
cree 58 of February 24, 1998).
rating, investing and financing activities associated with
On March 18, 2015, the Board authorized the publication of
The income statement, the balance sheet and the state-
these financial statements at December 31, 2014.
ment of cash flows report transactions with related parties,
These financial statements have undergone statutory audi-
the definition of which is given in the section “Accounting
ting by Reconta Ernst & Young SpA.
policies and measurement criteria” for the consolidated fi-
discontinued operations, if any.
nancial statements.
297
The financial statements have been prepared on a going
The financial statements provide comparative information
concern basis using the cost method, with the exception of
in respect of the previous period.
items measured at fair value in accordance with IFRS-EU, as
In addition, the income statement and the balance sheet
explained in the measurement bases applied to each indivi-
have been modified to improve the presentation of the im-
dual item in the consolidated financial statements.
pact of derivatives on performance and the financial po-
The financial statements are presented in euro, the fun-
sition. This involved the insertion of new accounts in the
ctional currency of the Company, and the figures shown
income statement and the balance sheet as well as the re-
in the notes are reported in millions of euro unless stated
classification of the figures for 2013 and at December 31,
otherwise.
2013, in order to ensure comparability.
2
Accounting policies and
measurement criteria
The accounting policies and measurement criteria are the
same as those adopted in the preparation of the consoli-
dated financial statements, to which the reader should
refer for more information, with the exception of those re-
garding equity investments in subsidiaries and associated
companies.
Subsidiaries are all entities over which Enel SpA has control.
The Company controls an entity when it is exposed to or
has rights to variable returns deriving from its involvement
and has the ability, through the exercise of its power over
the investee, to affect its returns. Power is defined as ha-
ving the concrete ability to direct the significant activities
of the entity by virtue of the existence of substantive rights.
Associates comprise those entities in which Enel SpA has a si-
gnificant influence. Significant influence is the power to partici-
pate in the financial and operating policy decisions of investees
but not exercise control or joint control over those entities.
Equity investments in subsidiaries and associates are me-
asured at cost. Cost is adjusted for any impairment losses,
which are reversed where the reasons for their recognition
no longer obtain. The carrying amount resulting from the
reversal may not exceed the original cost.
Where the loss pertaining to Enel SpA exceeds the carrying
amount of the investment and the Company is obligated
to perform the legal or constructive obligations of the in-
vestee or in any event to cover its losses, the excess with
respect to the carrying amount is recognized in liabilities in
the provisions for risks and charges.
In the case of a disposal, without economic substance, of an
investment to an entity under common control, any diffe-
rence between the consideration received and the carrying
amount of the investment is recognized in equity.
Dividends from equity investments are recognized in pro-
fit or loss when the shareholder’s right to receive them is
established.
Dividends and interim dividends payable to third parties
are recognized as changes in equity at the date they are
approved by the Shareholders’ Meeting and the Board of
Directors, respectively.
3
Recent accounting standards
For information on recent accounting standards, please refer to the corresponding section of the notes to the
consolidated financial statements.
298
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS Information on the income statement
Revenue
4.a Revenue from services - €245 million
“Revenue from services” is comprised of:
Millions of euro
Services
Group companies
Non-Group counterparties
Total revenue from sales and services
2014
245
-
245
2013
268
1
269
Change
(23)
(1)
(24)
Revenue from services amounted to €245 million and es-
combinations and reorganizations and to the reduction in
sentially regard services provided by the Company to sub-
revenues for management fees and service activities.
sidiaries as part of its management and coordination fun-
“Revenues from sales and services” break down by geo-
ction and the rebilling of sundry expenses incurred by it but
graphical area as follows:
pertaining to the subsidiaries.
> €206 million in Italy;
The decrease of €24 million with respect to the previous
> €34 million in the European Union;
year is mainly due to the decline in rebilling to a number of
> €5 million in non-EU Europe.
Group companies for services associated with the business
4.b Other revenue and income - €1 million
“Other revenue and income” came to €1 million in 2014,
with regard to a reduction in rebillings for services of per-
down from the previous year (€6 million in 2013), mainly
sonnel seconded to other Group companies.
Costs
5.a Electricity purchases and consumables - €2 million
“Electricity purchases and consumables” came to €2 mil-
lion), which, even though it expired on December 31, 2011,
lion, down €4 million from the previous year, essentially
provided for the revision within 3 years of the last invoice
due to the recognition in 2013 of the price revision contai-
date.
ned in the long-term import contract with Alpiq (€4 mil-
5.b Services, leases and rentals - €185 million
Costs for “Services, leases and rentals” break down as follows.
Millions of euro
Services
Leases and rentals
Total services, leases and rentals
2014
170
15
185
2013
212
18
230
Change
(42)
(3)
(45)
299
Costs for services, totaling €170 million, concerned costs for
by €19 million, mainly due to lower costs incurred in respect
services provided by third parties in the amount of €126 mil-
of IT services and training provided by Enel Italia Srl (€9 mil-
lion (€149 million in 2013) and services provided by Group
lion) and the decline in costs for personnel of Enel Distribu-
companies totaling €44 million (€63 million in 2013). More
zione SpA (€4 million) and Endesa (€2 million) seconded to
specifically, the decrease in costs for services provided by
Enel SpA.
third parties, equal to €23 million, is mainly attributable to
Costs for “Leases and rentals” mainly comprise costs for lea-
the decline in advertising, communication and print cam-
sing assets from the subsidiary Enel Italia Srl. They fell by €3
paign expenses (€12 million) and costs associated with the
million compared with the previous year, essentially due to
acquisition and disposal of companies (€8 million).
lower property rental and leasing costs.
Costs for services rendered by Group companies decreased
5.c Personnel - €120 million
Personnel costs break down as follows.
Millions of euro
Wages and salaries
Social security costs
Post-employment benefits
Other long-term benefits
Other costs and other incentive plans
Total
Notes
24
24
25
2014
71
24
5
9
11
120
2013
Change
64
19
(1)
5
3
90
7
5
6
4
8
30
“Personnel” costs amounted to €120 million, an increase of
The item “Post-employment benefits” includes cost for de-
€30 million compared with 2013, essentially the result of
fined benefit plans and for defined contribution plans. In
the rise in “Wages and salaries” and the related social se-
more detail, costs for defined contribution plans amounted
curity costs (totaling €12 million), the increase in post-em-
to €4 million for 2014, unchanged from 2013.
ployment benefits (€6 million) and in the costs associated
with the Long-Term Incentive Plan (€4 million), as well as
The table below shows the average number of employees
the recognition in 2013 of a non-current item pertaining to
by category compared with the previous year, and the ac-
the reversal of the provision for the transition-to-retirement
tual number of employees at December 31, 2014.
Average number
Headcount
2013
Change
at Dec. 31, 2014
123
338
332
-
793
20
(26)
(8)
-
(14)
159
322
310
-
791
2014
143
312
324
-
779
plan (€6 million).
Senior managers
Middle managers
Office staff
Blue collar
Total
300
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS 5.d Depreciation, amortization and impairment losses - €543
million
Millions of euro
Depreciation
Amortization
Impairment losses
Total
2014
3
9
531
543
2013
Change
1
8
-
9
2
1
531
534
“Depreciation, amortization and
impairment
losses”,
Enel Produzione SpA (€512 million) and Enel Ingegneria e
amounting to €543 million (€9 million in 2013), rose by
Ricerca SpA (€19 million), as well as higher amortization and
€534 million compared with the previous year, essentially
depreciation.
due to the impairment loss reported on the investments in
5.e Other operating expenses - €19 million
“Other operating expenses” amounted to €19 million, up €5
Operating income amounted to a negative €623 million,
million on the previous year, mainly due to a decline in rever-
a deterioration of €549 million compared with the previous
sals from the provision for litigation as compared with 2013.
year.
6. Income from equity investments - €1,818 million
Income from equity investments, amounting to €1,818
meetings of the subsidiaries and associates that were fully
million, regards dividends approved by the shareholders’
distributed in 2014.
Millions of euro
Dividends from subsidiaries and associates
Enel Produzione SpA
Enel Distribuzione SpA
Enelpower SpA
Enel.Factor SpA
Enel Italia Srl
Enel Energia SpA
Enel Servizio Elettrico SpA
Enel Green Power SpA
CESI SpA
Dividends from other entities
Emittenti Titoli SpA
Income from equity investments
2014
1,818
223
1,373
1
3
7
16
85
109
1
-
-
2013
2,028
222
1,625
3
4
40
44
-
89
1
-
-
Change
(210)
1
(252)
(2)
(1)
(33)
(28)
85
20
-
-
-
1,818
2,028
(210)
301
7. Net financial income/(expense) from derivatives - €236 million
This item breaks down as follows.
Millions of euro
Financial income from derivatives
- on behalf of Group companies:
income from derivatives at fair value through profit or loss
- on behalf of Enel SpA:
income from fair value hedge derivatives
income from cash flow hedge derivatives
income from derivatives at fair value through profit or loss
Total financial income from derivatives
Financial expense on derivatives
- on behalf of Group companies:
expense on derivatives at fair value through profit or loss
- on behalf of Enel SpA:
expense on cash flow hedge derivatives
expense on derivatives at fair value through profit or loss
Total financial expense from derivatives
TOTAL NET FINANCIAL INCOME/(EXPENSE) FROM
DERIVATIVES
2014
1,726
1,726
464
39
415
10
2,190
1,737
1,737
217
167
50
1,954
236
2013
Change
1,342
1,342
150
14
98
38
1,492
1,335
1,335
266
239
27
1,601
(109)
384
384
314
25
317
(28)
698
402
402
(49)
(72)
23
353
345
Net income from derivatives amounted to €236 million (net
net financial expense on derivatives at fair value through
financial expense of €109 million in 2013) and essentially
profit or loss (€51 million), entered into on behalf of Enel
reflects the net financial income from derivatives entered
SpA and to hedge interest rates and exchange rates.
into on behalf of Enel SpA. The increase of €345 million over
2013 was mainly caused by the increase in net income from
For more details on derivatives, please see note 31 “Finan-
cash flow hedge and fair value hedge derivatives (respecti-
cial instruments” and note 33 “Derivatives and hedge ac-
vely, €389 million and €25 million), partly offset by higher
counting”.
302
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS 8. Other net financial income/(expense) - €(1,155) million
This item breaks down as follows.
Millions of euro
Other financial income
Interest income at the effective interest rate
Interest income at effective interest rate on long-term
financial assets
Interest income at effective interest rate on short-term
financial assets
Total
Positive exchange rate differences
Other income
Total other financial income
Other financial expense
Interest expense at the effective interest rate
Interest expense on bank borrowings
Interest expense on bonds
Interest expense on other borrowings
Total
Negative exchange rate differences
Interest expense on post-employment and other employee
benefits
Fair value hedge charges - adjustment of hedged items
Other financial expense
Total other financial expense
TOTAL OTHER NET FINANCIAL INCOME/(EXPENSE)
2014
2013
Change
6
206
212
10
-
222
67
968
3
1,038
293
9
26
11
1,377
(1,155)
20
232
252
60
8
320
96
746
125
967
8
13
14
(1)
1,001
(681)
(14)
(26)
(40)
(50)
(8)
(98)
(29)
222
(122)
71
285
(4)
12
12
376
(474)
Net other financial expense amounted to €1,155 mil-
net exchange rate differences (a negative €335 million), hi-
lion, mainly reflecting the interest expense on borrowings
gher interest expense on borrowings (€71 million), as well
(€1,038 million) and negative exchange rate differences
as lower interest income on financial assets (totaling €40
(€293 million), partly offset by short and long-term interest
million).
income (totaling €212 million). The increase in net financial
These changes reflect movements in interest and exchange
expense of €474 million over 2013 was primarily caused by
rates, as well as changes in debt during the year.
303
9. Income taxes - €282 million
Millions of euro
Current taxes
Deferred tax income
Deferred tax expense
Total
2014
(299)
8
9
(282)
2013
(216)
10
(2)
(208)
Change
(83)
(2)
11
(74)
Income taxes for 2014 showed a creditor position of €282
two years in the amount of dividends received from subsi-
million, mainly due to the reduction in taxable income for
diaries and the non-deductibility of the impairment losses
IRES purpose as a result of the exclusion of 95% of the divi-
on equity investments recognized in 2014 and meeting the
dends received from the subsidiaries and the deductibility
requirements of Article 87 of the Uniform Income Tax Code.
of Enel SpA’s interest expense for the Group’s consolidated
taxation mechanism in accordance with corporate income
The following table reconciles the theoretical tax rate with
tax law (Article 96 of the Uniform Income Tax Code).
the effective tax rate.
This essentially reflected both the difference between the
Millions of euro
Income before taxes
Theoretical corporate income taxes (IRES)
(27.5%)
Tax decreases:
- dividends from equity investments
- prior-year writedowns
- uses of provisions
- other
Tax increases:
- writedowns for the year
- accruals to provisions
- prior-year expense
- other
Total current income taxes (IRES)
IRAP
Difference on estimated income taxes from prior
years
Total deferred tax items
- of which changes for the year
- of which changes in estimates for previous years
2014
276
% rate
76
27.5%
-172.1%
-
-5.1%
-8.0%
55.1%
3.6%
1.1%
1.1%
-96.7%
-
-11.6%
6.2%
(475)
-
(14)
(22)
152
10
3
3
(267)
-
(32)
17
9
8
2013
1,164
320
(530)
(1)
(17)
-
-
9
3
9
% rate
27.5%
-45.5%
-0.1%
-1.5%
-
-
0.8%
0.3%
0.8%
(207)
-17.8%
-
-0.8%
0.7%
-
(9)
8
7
1
TOTAL INCOME TAXES
(282)
-102.2%
(208)
-17.9%
304
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS
Information on the balance sheet
Assets
10. Property, plant and equipment - €8 million
Developments in property, plant and equipment for 2013 and 2014 are set out in the table below.
Millions of euro
Land
Buildings
Plant and
machinery
Industrial and
commercial
equipment
Other assets
Leasehold
improvements
Cost
Accumulated depreciation
Balance at Dec. 31, 2012
Capital expenditure
Depreciation
Total changes
Cost
Accumulated depreciation
Balance at Dec. 31, 2013
Capital expenditure
Depreciation
Total changes
Cost
Accumulated depreciation
Balance at Dec. 31, 2014
1
-
1
-
-
-
1
-
1
-
-
-
1
-
1
3
(2)
1
-
-
-
3
(2)
1
-
-
-
3
(2)
1
3
(3)
-
-
-
-
3
(3)
-
-
-
-
3
(3)
-
5
(5)
-
-
-
-
5
(5)
-
-
-
-
5
(5)
-
19
(18)
1
-
-
-
19
(18)
1
-
-
-
19
(18)
1
Total
57
(52)
5
5
(1)
4
62
26
(24)
2
5
(1)
4
31
(25)
(53)
6
2
(3)
(1)
33
(28)
5
9
2
(3)
(1)
64
(56)
8
“Property, plant and equipment” totaled €8 million, a de-
preciation for the period (€3 million). “Leasehold improve-
crease of €1 million compared with the previous year, es-
ments” mainly regard the renovation work on an number of
sentially attributable to the negative net balance between
buildings housing Enel SpA’s headquarters.
capital expenditure during the year (€2 million) and de-
305
11. Intangible assets - €11 million
“Intangible assets”, all of which have a finite useful life, break down as follows.
Millions of euro
Balance at Dec. 31, 2012
Capital expenditure
Assets entering service
Amortization
Total changes
Balance at Dec. 31, 2013
Capital expenditure
Assets entering service
Amortization
Total changes
Balance at Dec. 31, 2014
Industrial patents
and intellectual property rights
Assets
under development
and advances
11
6
1
(8)
(1)
10
-
9
(9)
-
10
1
1
(1)
-
-
1
9
(9)
-
-
1
Total
12
7
-
(8)
(1)
11
9
-
(9)
-
11
“Industrial patents and intellectual property rights” relate
ly in respect of software systems to manage consolidated
mainly to costs incurred in purchasing software as well as
reporting, risk and centralized finance systems.
related evolutionary maintenance. Amortization is calcula-
“Assets under development and advances”, amounting to
ted on a straight-line basis over the item’s residual useful life
€1 million, also remained the same as in 2013 and essen-
(three years on average).
tially regard expenditure on centralized finance systems, the
The amount of the item remained stable as compared with
implementation of risk measurement models and improve-
the previous year since the amortization for the year (€9 mil-
ments in the Parent Company’s reporting management and
lion) was entirely offset by assets entering service, essential-
accounting systems.
306
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS 12. Deferred tax assets and liabilities - €383 million and €252 million
Changes in “Deferred tax assets” and “Deferred tax liabilities”, grouped by type of timing difference, are shown below.
Millions of euro
Deferred tax assets
Nature of temporary differences:
- accruals to provisions for risks and charges and
impairment losses
- derivatives
- other items
Total deferred tax assets
Deferred tax liabilities
Nature of temporary differences:
- measurement of financial instruments
- other items
Total deferred tax liabilities
Excess net deferred IRES tax assets after any
offsetting
Excess net deferred IRAP tax liabilities after any
offsetting
at
Dec. 31, 2013
Total
36
199
44
279
130
-
130
171
(22)
Increase/ (Decrease)
taken to income
statement
Increase/ (Decrease)
taken to equity
at
Dec. 31, 2014
(5)
-
(3)
(8)
-
9
9
(3)
115
-
112
113
-
113
Total
28
314
41
383
243
9
252
172
(41)
“Deferred tax assets” totaled €383 million (€279 million at
largely to deferred taxes in respect of the fair value measu-
December 31, 2013), an increase of €104 million compared
rement of cash flow hedges (€113 million).
with the previous year, mainly attributable to deferred tax
The amount of deferred tax liabilities was determined by
assets in respect of the fair value measurement of cash flow
applying the rates of 27.5% for IRES and 5.57% for IRAP
hedges (€115 million) and the reversal of a number of items
(taking account of regional surtaxes). The amount of defer-
associated with accruals to provisions for risks and charges
red tax assets was determined by applying the IRES rate of
and impairment losses (€5 million).
27.5% only, as in the coming years we do not expect to earn
“Deferred tax liabilities” totaled €252 million, an increase
income subject to IRAP sufficient to reverse the temporary
of €122 million (€130 million at December 31, 2013), due
deductible differences.
307
13. Equity investments - €38,754 million
The table below shows the changes during the year for each investment, with the corresponding values at the beginning
and end of the year, as well as the list of investments held in subsidiaries, associates and other companies.
Millions of euro
Original cost
(Writedowns)/
evaluations
Other changes - IFRIC
11 and IFRS 2
at Dec. 31, 2013
Carrying amount
% holding
Value adjustments
Original cost
Revaluations
11 and IFRS 2
Carrying amount
% holding
(Writedowns)/
Other changes - IFRIC
Changes in 2014
at Dec. 31, 2014
A) Subsidiaries
Enel Produzione SpA
Enel Ingegneria e
Ricerca SpA
Enel Distribuzione SpA
Enel Servizio Elettrico
SpA
Enel Trade SpA
Enel Green Power SpA
Enel Investment
Holding BV
Enelpower SpA
Enel Energia SpA
4,892
46
4,054
110
901
3,640
8,498
189
1,321
Enel Iberoamérica SL
18,300
-
-
-
-
-
-
(4,473)
(159)
(8)
-
-
-
(41)
(54)
-
-
4
1
2
-
1
2
-
-
-
-
-
-
3
-
-
-
(4,735)
13
-
-
(1)
-
-
(1)
-
-
-
-
-
-
4,896
47
4,056
110
902
3,642
4,025
30
1,313
18,300
18
5
487
16
1,414
-
39,261
23
23
4
1
-
5
100.0
100.0
100.0
100.0
100.0
68.3
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
-
42.7
4.3
10.0
1.0
18
5
525
70
1,414
-
43,983
23
23
5
1
-
6
Enel.Factor SpA
Enel Sole Srl
Enel Italia Srl
Enel.Newhydro Srl
Enel Finance
International NV
Enel Oil & Gas SpA
Total
C) Associates
CESI SpA
Total
D) Other companies
Elcogas SA
Emittenti Titoli SpA
Idrosicilia SpA
Total
TOTAL
308
44,012
(4,736)
13
39,289
44,012
13
38,754
(512)
(19)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(4)
(4)
(535)
4,892
46
4,054
110
901
3,640
8,498
189
1,321
18,300
18
5
525
70
1,414
-
43,983
23
23
5
1
-
6
(512)
(19)
(4,473)
(159)
(8)
(41)
(54)
-
-
-
-
-
-
-
-
-
-
-
-
-
(5)
(5)
(5,271)
(531)
(5,266)
13
4
1
2
-
1
2
3
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,384
28
4,056
110
902
3,642
4,025
30
1,313
18,300
18
5
487
16
1,414
-
38,730
23
23
-
1
-
1
100.0
100.0
100.0
100.0
100.0
68.3
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
42.7
4.3
10.0
1.0
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS
13. Equity investments - €38,754 million
The table below shows the changes during the year for each investment, with the corresponding values at the beginning
and end of the year, as well as the list of investments held in subsidiaries, associates and other companies.
Enel Iberoamérica SL
18,300
A) Subsidiaries
Enel Produzione SpA
Enel Ingegneria e
Ricerca SpA
Enel Distribuzione SpA
Enel Servizio Elettrico
SpA
Enel Trade SpA
Enel Green Power SpA
Enel Investment
Holding BV
Enelpower SpA
Enel Energia SpA
Enel.Factor SpA
Enel Sole Srl
Enel Italia Srl
Enel.Newhydro Srl
Enel Finance
International NV
Enel Oil & Gas SpA
Total
C) Associates
CESI SpA
Total
D) Other companies
Elcogas SA
Emittenti Titoli SpA
Idrosicilia SpA
Total
TOTAL
4,892
46
4,054
110
901
3,640
8,498
189
1,321
18
5
525
70
1,414
-
43,983
23
23
5
1
-
6
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(4,473)
(159)
(8)
(41)
(54)
(1)
(1)
(4,736)
(4,735)
13
4
1
2
-
1
2
3
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,896
47
4,056
110
902
3,642
4,025
30
1,313
18,300
18
5
487
16
1,414
-
39,261
23
23
4
1
-
5
100.0
100.0
100.0
100.0
100.0
68.3
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
-
42.7
4.3
10.0
1.0
44,012
13
39,289
Millions of euro
Original cost
evaluations
11 and IFRS 2
Carrying amount
% holding
Value adjustments
Original cost
(Writedowns)/
Other changes - IFRIC
(Writedowns)/
Revaluations
Other changes - IFRIC
11 and IFRS 2
Carrying amount
% holding
at Dec. 31, 2013
Changes in 2014
at Dec. 31, 2014
(512)
(19)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(531)
-
-
(4)
-
-
(4)
(535)
4,892
46
4,054
110
901
3,640
8,498
189
1,321
18,300
18
5
525
70
1,414
-
43,983
23
23
5
1
-
6
(512)
(19)
-
-
-
-
(4,473)
(159)
(8)
-
-
-
(41)
(54)
-
-
4
1
2
-
1
2
-
-
-
-
-
-
3
-
-
-
(5,266)
13
-
-
(5)
-
-
(5)
-
-
-
-
-
-
4,384
28
4,056
110
902
3,642
4,025
30
1,313
18,300
18
5
487
16
1,414
-
38,730
23
23
-
1
-
1
44,012
(5,271)
13
38,754
100.0
100.0
100.0
100.0
100.0
68.3
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
42.7
4.3
10.0
1.0
309
The table below reports changes in equity investments in 2014.
Millions of euro
Increases:
Incorporation of Enel Oil & Gas SpA
Total increases
Decreases:
Writedown of equity investment in Enel Produzione SpA
Writedown of equity investment in Enel Ingegneria e Ricerca SpA
Writedown of equity investment in Elcogas SA
Total decreases
NET CHANGE
-
-
(512)
(19)
(4)
(535)
(535)
The net decrease in the value of equity investments in sub-
gas SA, which has been in liquidation since January 1,
sidiaries, associates and other companies is attributable to:
2015, for €4 million;
> the writedown of the equity investment in Enel Produzio-
> the incorporation of Enel Oil & Gas SpA on November 26,
ne SpA in the amount of €512 million, to take account of
2014, through the contribution of €200,000 towards the
the ongoing impact of the economic crisis in Italy and in
share capital.
consideration of the negative impact of such crisis on the
traditional electricity generation sector;
The share certificates for Enel SpA’s investments in Italian
> the writedown of the equity investment in Enel Ingegne-
subsidiaries are held in custody at Monte dei Paschi di Siena.
ria e Ricerca SpA in the amount of €19 million, to take
The following table reports the share capital and sharehol-
account of the losses posted by the company and the
ders’ equity of the investments in subsidiaries, associates
presumable recovery of the recognized cost;
and other companies at December 31, 2014.
> to the total writedown of the equity investment in Elco-
310
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS Registered
office
Currency
Share capital
(euro)
Shareholders’
equity
(millions of
euro)
Prior year income/
(loss) (millions of
euro)
Carrying
amount
(millions of
euro)
% holding
A) Subsidiaries
Enel Produzione SpA
Rome
Euro
1,800,000,000
4,039
(1,793)
100.0
4,384
Enel Ingegneria e Ricerca
SpA
Enel Distribuzione SpA
Enel Servizio Elettrico SpA
Enel Trade SpA
Enel Green Power SpA (1)
Enel Investment Holding
BV (1)
Enelpower SpA
Enel Energia SpA
Enel Iberoamérica SL
Enel.Factor SpA
Enel Sole Srl
Enel Italia Srl
Enel.Newhydro Srl
Enel Finance
International NV
Enel Oil & Gas SpA
C) Associates
CESI SpA
D) Other companies
Rome
Rome
Rome
Rome
Rome
Amsterdam
Milan
Rome
Madrid
Rome
Rome
Rome
Rome
Amsterdam
Rome
Euro
Euro
Euro
Euro
Euro
Euro
Euro
Euro
Euro
Euro
Euro
Euro
Euro
Euro
Euro
30,000,000
2,600,000,000
10,000,000
90,885,000
1,000,000,000
1,593,050,000
2,000,000
302,039
500,000,000
12,500,000
4,600,000
50,000,000
1,000,000
1,478,810,370
200,000
Milan
Euro
8,550,000
Elcogas SA (2)
Puertollano
Emittenti Titoli SpA
Idrosicilia SpA (3)
Milan
Milan
Euro
Euro
Euro
20,242,260
4,264,000
22,520,000
26
4,365
98
357
8,929
3,673
30
1,214
23,546
48
56
420
18
722
-
95
(8)
16
40
(1)
1,278
5
(235)
440
61
-
160
21
4
7
9
1
32
-
2
(18)
10
2
100.0
100.0
100.0
100.0
68.3
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
42.7
4.3
10.0
1.0
28
4,056
110
902
3,642
4,025
30
1,313
18,300
18
5
487
16
1,414
-
23
-
1
-
(1) The figures for shareholders’ equity and the results for the period refer to the Group.
(2) The figures for share capital, shareholders’ equity and net income refer to the financial statements at December 31, 2013.
(3) The figures for share capital, shareholders’ equity and net income refer to the financial statements at December 31, 2012.
The carrying amounts of the equity investments in Enel Fi-
of net actuarial losses and that necessarily had an impact
nance International NV, Enel Italia Srl, Enel Servizio Elettri-
on the companies’ shareholders’ equity. As these losses
co SpA, Enel Trade SpA, Enel Investment Holding BV, Enel
are not monetary in nature, they will be recovered in fu-
Produzione SpA and Enel Energia SpA are considered to
ture years with no cash outflow for the subsidiaries;
be recoverable even though they individually exceed the
> in the cases of Enel Trade SpA and Enel Investment Hol-
respective shareholders’ equity at December 31, 2014. This
ding BV, given that the expected future cash flows sug-
circumstance is not felt to represent an impairment loss
gest a higher value than that reflected in the carrying
in respect of the investment but rather a temporary mi-
amount of shareholders’ equity (which in certain cases
smatch between the two amounts. More specifically:
reflects unfavorable exchange rates), the value of the
> in the case of Enel Finance International NV, it is due
investment will be fully recovered and the mismatch
essentially to a decline in the fair value of a number of
between the two amounts is only temporary.
balance sheet items that are reflected in shareholders’
equity;
“Equity investments in other companies” at December 31,
> as to Enel Italia Srl and Enel Servizio Elettrico SpA, it is at-
2014 all regard unlisted companies and are measured at
tributable to the retroactive application of “IAS 19 - Em-
cost, as the fair value cannot be reliably determined.
ployee benefits” in 2013, which involved the recognition
311
Millions of euro
Equity investments in unlisted companies measured at cost
Elcogas SA
Emittenti Titoli SpA
Idrosicilia SpA
at Dec. 31, 2014
at Dec. 31, 2013
1
-
1
-
5
4
1
-
14. Derivatives - €1,979 million, €280 million, €2,484 million,
€359 million
Millions of euro
Non-current
Current
at Dec. 31, 2014
at Dec. 31, 2013
at Dec. 31, 2014
at Dec. 31, 2013
Derivative financial assets
Derivative financial liabilities
1,979
2,484
1,355
2,098
280
359
177
237
For more details about the nature of derivative financial assets and liabilities, please see notes 31 “Financial instruments”
and 33 “Derivative and hedge accounting”.
15. Other non-current financial assets - €146 million
The aggregate is composed of the following:
Millions of euro
Prepaid expenses
Other non-current financial assets
included in net financial debt
15.1
Total
Notes
at Dec. 31, 2014
at Dec. 31, 2013
Change
25
121
146
43
122
165
(18)
(1)
(19)
“Prepaid expenses” are essentially accounted for by residual
2013 by the same companies with a pool of banks in the
transaction costs on the €10 billion revolving credit facility
amount of €9 billion. The item reports the non-current por-
agreed on April 19, 2010 between Enel, Enel Finance In-
tion of those costs and their reversal through profit or loss
ternational and Mediobanca, as well as those in respect of
depends on the type of fee involved and the maturity of the
the Forward Start Facility Agreement signed on February 8,
credit line.
312
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS 15.1 Other non-current financial assets included in net financial debt - €121 million
Millions of euro
Financial receivables
Due from subsidiaries
Due from others
Other financial receivables
Total
Notes
31.1.1
at Dec. 31, 2014
at Dec. 31, 2013
Change
117
-
4
121
117
2
3
122
-
(2)
1
(1)
Financial receivables due from subsidiaries, amounting
the related finance costs and the income and expenses ac-
to €117 million, refer to receivables in respect of the as-
crued on the interest-rate risk hedging contracts, as well as
sumption by Group companies of their share of financial
the repayment of the principal upon maturity of each loan.
debt. The terms of the agreements call for the rebilling of
16. Other non-current assets - €467 million
This item can be broken down as follows.
Millions of euro
Receivable from subsidiaries for assumption of
supplementary pension plan liabilities
Tax receivables
Other long-term receivables:
- other receivables
Total
TOTAL OTHER NON-CURRENT ASSETS
at Dec. 31, 2014
at Dec. 31, 2013
173
290
4
4
467
195
284
4
4
483
Change
(22)
6
-
-
(16)
The item “Receivable from subsidiaries for assumption
“Tax receivables” regard the tax credit in respect of the claim
of supplementary pension plan liabilities” in the amount
for reimbursement submitted by Enel SpA on its own be-
of €173 million refers to receivables in respect of the as-
half for 2003 and on its own behalf and as the consolida-
sumption by Group companies of their share of the supple-
ting company for 2004-2011 for excess income tax paid as a
mentary pension plan. The terms of the agreement state
result of not partially deducting IRAP in calculating taxable
that the Group companies concerned are to reimburse the
income for IRES purposes. This item increased by €6 million
costs of extinguishing defined benefit obligations of the
over the previous year due to the recognition of accrued in-
Parent Company, which are recognized under “Post-em-
terest for the period.
ployment and other employee benefits”.
On the basis of actuarial forecasts made using current as-
“Other receivables” amounted to €4 million and essential-
sumptions, the portion due beyond five years of the “Recei-
ly regard the receivable due from Enel Ingegneria e Ricerca
vables from subsidiaries for assumption of supplementary
SpA for the sale in 2011 of the interest held in Sviluppo Nu-
pension plan liabilities” came to €111 million (€130 million
cleare Italia Srl.
at December 31, 2013).
313
17. Trade receivables - €132 million
The aggregate is composed of the following.
Millions of euro
Customers:
- other receivables
Total
Trade receivables due from subsidiaries
TOTAL
at Dec. 31, 2014
at Dec. 31, 2013
Change
6
6
126
132
8
8
208
216
(2)
(2)
(82)
(84)
“Trade receivables due from subsidiaries” primarily regard
the revenues associated with those services, as well as an
the management and coordination services and other acti-
improvement in collection times.
vities performed by Enel SpA on behalf of Group companies.
Trade receivables due from subsidiaries break down as fol-
The decrease of €82 million is linked with developments in
lows.
at Dec. 31, 2014
at Dec. 31, 2013
Change
1
18
7
7
-
(1)
3
21
-
17
6
-
1
2
16
16
(2)
4
-
10
126
1
6
20
4
1
2
2
34
21
11
18
2
1
2
14
15
5
9
8
32
208
-
12
(13)
3
(1)
(3)
1
(13)
(21)
6
(12)
(2)
-
-
2
1
(7)
(5)
(8)
(22)
(82)
Millions of euro
Subsidiaries
Enel Iberoamérica SL
Enel Produzione SpA
Enel Distribuzione SpA
Enel Green Power SpA
Endesa SA
Enel Servizio Elettrico SpA
Enel Trade SpA
Enel Energia SpA
Enel Italia Srl
Slovenské elektrárne AS
Enel.si Srl
Enel Investment Holding BV
Enel Green Power North America Inc.
Enel Sole Srl
Enel Russia OJSC
Endesa Distribución Eléctrica SL
Endesa Generación SA
Enel Romania Srl
Unión Eléctrica de Canarias Generación SAU
Other
Total
314
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS Trade receivables by geographical area are shown below.
Millions of euro
Italy
EU
Non-EU Europe
Other
Total
at Dec. 31, 2014
at Dec. 31, 2013
Change
66
47
18
1
132
109
75
26
6
216
(43)
(28)
(8)
(5)
(84)
18. Tax receivables - €625 million
Income tax receivables at December 31, 2014 amounted to
dit for current 2014 taxes (€267 million) and the receivable
€625 million and essentially regard the Company’s IRES cre-
with respect to consolidated IRES for 2014 (€354 million).
19. Other current financial assets - €5,040 million
This item can be broken down as follows.
Millions of euro
Notes
at Dec. 31, 2014
at Dec. 31, 2013
Change
Other current financial assets included
in net financial debt
Other sundry current financial assets
19.1
Total
4,693
347
5,040
4,930
350
5,280
(237)
(3)
(240)
19.1 Other current financial assets included in net financial debt - €4,693 million
Notes
at Dec. 31, 2014
at Dec. 31, 2013
Change
Millions of euro
Financial receivables due from
Group companies:
- short-term financial receivables
(intercompany accounts)
- short-term loan to Enel Finance
International NV
- current portion of receivables for
assumption of loans
Financial receivables due from
others:
- other financial receivables
32.1.1
32.1.1
32.1.1
- cash collateral for margin agreements
on OTC derivatives
32.1.1
Total
4,018
-
-
3
672
4,693
3,391
500
21
-
1,018
4,930
627
(500)
(21)
3
(346)
(237)
“Other current financial assets included in net financial
nies” (€4,018 million) and “Financial receivables due from
debt”, amounting to €4,693 million at December 31, 2014,
others” (€675 million).
refer to “Financial receivables due from Group compa-
“Financial receivables due from Group companies” increa-
315
sed by €106 million over December 31, 2013, due to the rise
“Financial receivables due from others”, amounting to
in short-term financial receivables due from Group compa-
€675 million, decreased by €343 million compared with
nies on the intercompany current account (€627 million),
December 31, 2013, essentially as a result of the reduction
partly offset by the repayment by Enel Finance Internatio-
in cash collateral paid to counterparties for OTC derivatives
nal NV under the Intercompany Revolving Facility Agree-
on interest rates and exchange rates.
ment granted to it in 2013 (€500 million).
20. Cash and cash equivalents - €6,972 million
Cash and cash equivalents are detailed in the following table.
Millions of euro
Bank and post office deposits
Cash and cash equivalents on hand
Total
at Dec. 31, 2014
at Dec. 31, 2013
6,972
-
6,972
3,123
-
3,123
Change
3,849
-
3,849
Cash and cash equivalents amounted to €6,972 million, an
tions relating to the optimization of the Group’s organiza-
increase of €3,849 million compared with December 31,
tional structure on the centralized treasury functions, as well
2013, mainly due to the impact of extraordinary transac-
as lower tax payments for 2014.
21. Other current assets - €244 million
At December 31, 2014, the item broke down as follows.
Millions of euro
Tax receivables
Other receivables due from Group companies
Receivables due from others
Total
at Dec. 31, 2014
at Dec. 31, 2013
Change
33
208
3
244
122
196
1
319
(89)
12
2
(75)
“Other current assets” fell by €75 million as compared with
vables for previous years (€24 million) and the net creditor
December 31, 2013.
position with respect to tax authority, in 2013, with regard
to IRES receivables for the companies that participate in the
“Tax receivables” amounted to €33 million, primarily ac-
consolidated taxation mechanism (€20 million).
counted for by the VAT credit for the Group (€25 million)
“Other receivables due from Group companies” mainly com-
and other receivables with respect to prior-year income
prise the VAT credit in respect of the companies participa-
taxes (€7 million). The decrease of €89 million on the pre-
ting in the Group VAT mechanism (€51 million) and IRES re-
vious year is essentially due to the decline in the VAT credit
ceivables due from the Group companies that participate in
for the Group (€39 million), the collection of the IRAP recei-
the consolidated taxation mechanism (€116 million).
316
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS
Liabilities
22. Shareholders’ equity - €25,136 million
Shareholders’ equity amounted to €25,136 million, down
total of €1,223 million), as approved by the Shareholders’
€731 million compared with December 31, 2013. The de-
Meeting on May 22, 2014, offset in part by net income for
crease is essentially attributable to the distribution of the
the year (€492 million).
dividend for 2013 in the amount of €0.13 per share (for a
Share capital - €9,403 million
At December 31, 2014 (as at December 31, 2013), the share
shareholders held more than 2% of the total share capital,
capital of Enel SpA – considering that no options were exer-
apart from the Ministry for the Economy and Finance, which
cised as part of stock option plans in 2014 – amounted to
holds 31.24%, CNP Assurances (which holds a 3.67% stake,
€9,403,357,795 fully subscribed and paid up, represented
held as at June 26, 2014 for asset management purposes)
by 9,403,357,795 ordinary shares with a par value of €1.00
and the People’s Bank of China (2.07%).
each.
On February 26, 2015, the Ministry for the Economy and Fi-
At the same date, based on the shareholders register and
nance sold an interest of 5.74% in the Company. Accordin-
the notices submitted to CONSOB and received by the Com-
gly, following that operation, the Ministry’s holding in the
pany pursuant to Article 120 of Legislative Decree 58 of Fe-
Company has decreased from 31.24% to 25.50%.
bruary 24, 1998, as well as other available information, no
Other reserves - €9,114 million
Share premium reserve - €5,292 million
The share premium reserve did not change compared with
laws for new works (pursuant to Article 55 of Presidential De-
cree 917/1986), which is recognized in equity in order to take
the previous year.
advantage of tax deferment benefits. It also includes €29 mil-
lion in respect of the stock option reserve and €20 million for
Legal reserve - €1,881 million
The legal reserve, equal to 20.0% of share capital, did not
other reserves.
change compared with the previous year.
Reserve pursuant to Law 292/1993 - €2,215
million
The reserve shows the remaining portion of the value
Reserve from measurement of financial in-
struments - €(332) million
At December 31, 2014, the item was entirely represented
by the reserve from measurement of cash flow hedge de-
rivatives, a negative value of €332 million (net of the posi-
adjustments carried out when Enel was transformed from a
tive tax effect of €70 million).
public entity to a joint-stock company.
In the case of a distribution of this reserve, the tax treatment
for capital reserves as defined by Article 47 of the Uniform
Income Tax Code shall apply.
Reserve from remeasurement of defined
benefit obligation - €(10) million
At December 31, 2014, the defined benefit plan reserve
amounted to €10 million (net of the positive tax effect of €4
Other sundry reserves - €68 million
Other reserves include €19 million related to the reserve for
million). The reserve includes all actuarial gains and losses re-
cognized directly in equity, as the corridor approach is no lon-
capital grants, which reflects 50% of the grants received from
ger permitted under the revised version of “IAS 19 - Employee
Italian public entities and EU bodies in application of related
benefits”.
317
The table below provides a breakdown of changes in the
the reserve from measurement of defined benefit plan lia-
reserve from measurement of financial instruments and
bilities/assets in 2013 and 2014.
Gains/
(Losses)
recognized
in equity for
the year
Gross
released
to income
statement
at
Jan. 1, 2013
Taxes
at
Dec. 31,
2013
Gains/
(Losses)
recognized
in equity for
the year
Gross
released
to income
statement
Taxes
at
Dec. 31,
2014
(351)
(28)
141
(21)
(259)
173
(248)
2
(332)
(13)
(5)
-
1
(17)
10
-
(3)
(10)
(364)
(33)
141
(20)
(276)
183
(248)
(1)
(342)
Millions of euro
Reserve from
measurement of
cash flow hedge
instruments
Gains/(Losses) from
the remeasurement
of net liabilities/
(assets) for defined
benefit plans
Gains/(Losses)
recognized
directly in equity
Retained earnings - €6,061 million
For 2014, the item shows an increase of €149 million, essentially attributable to retained net income for the previous year, as
approved by the Shareholders’ Meeting of May 22, 2014.
Net income - €558 million
Net income for 2014 amounted to €558 million.
The table below shows the availability of shareholders’ equity for distribution.
Millions of euro
Share capital
Capital reserves:
- share premium reserve
Income reserves:
- legal reserve
- reserve pursuant to Law 292/1993
- reserve from measurement of financial instruments
- reserve for capital grants
- stock option reserve
- reserve from remeasurement of defined benefit plan
liabilities
- other
Retained earnings/(loss carried forward)
Total
amount available for distribution
at Dec. 31, 2014
Possible uses
Amount available
9,403
5,292
1,881
2,215
(332)
19
29
(10)
20
6,061
24,578
ABC
B
ABC
ABC
ABC
ABC
ABC
5,292
2,215
19
29 (1) (2)
20
6,061
13,636
13,633
A: for capital increases.
B: to cover losses.
C: for distribution to shareholders.
(1) Regards lapsed options.
(2) Not distributable in the amount of €3 million regarding options granted by the Parent Company to employees of subsidiaries that have lapsed.
318
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS There are no restrictions on the distribution of the reserves
Enel’s goals in capital management are focused on the cre-
pursuant to Article 2426, paragraph 1(5) of the Italian Civil
ation of value for shareholders, safeguarding the interests
Code since there are no unamortized start-up and expan-
of stakeholders and ensuring business continuity, as well
sion costs or research and development costs, or departu-
as on maintaining sufficient capitalization to ensure cost-
res pursuant to Article 2423, paragraph 4, of the Civil Code.
effective access to outside sources of financing, so as to
adequately support growth in the Group’s business.
22.1 Dividends
The table below shows the dividends paid by the Company in 2013 and 2014.
Amount distributed (millions of euro)
Net dividend per share (euro)
Dividends paid in 2013
Dividends for 2012
Interim dividend for 2013
Special dividends
Total dividends paid in 2013
Dividends paid in 2014
Dividends for 2013
Interim dividend for 2014
Special dividends
Total dividends paid in 2014
1,410
-
-
1,410
1,223
-
-
1,223
0.15
-
-
0.15
0.13
-
-
0.13
The dividend for 2014, equal to €0.14 per share, for a total
take account of the effect of the distribution of the 2014
of €1,316 million, was proposed at the Shareholders’ Me-
dividend to shareholders.
eting of May 28, 2015. These financial statements do not
22.2 Capital management
The Company’s objectives for managing capital compri-
In this context, the Company manages its capital structure
se safeguarding the business as a going concern, creating
and adjusts that structure when changes in economic con-
value for stakeholders and supporting the development of
ditions so require. There were no substantive changes in
the Group. In particular, the Company seeks to maintain an
objectives, policies or processes in 2014.
adequate capitalization that enables it to achieve a satisfac-
To this end, the Company constantly monitors deve-
tory return for shareholders and ensure access to external
lopments in the level of its debt in relation to equity. The
sources of financing, in part by maintaining an adequate
situation at December 31, 2014 and 2013 is summarized in
rating.
Millions of euro
the following table.
at Dec. 31, 2014
at Dec. 31, 2013
Change
Non-current financial position
Net current financial position
Non-current financial receivables and long-term securities
Net financial debt
Shareholders’ equity
Debt/equity ratio
(17,288)
4,556
121
(12,611)
25,136
(0.50)
(17,764)
5,339
122
(12,303)
25,867
(0.48)
476
(783)
(1)
(308)
(731)
(0.02)
319
23. Borrowings - €17,288 million, €2,363 million, €4,746 million
Millions of euro
Non-current
Current
at Dec. 31, 2014
at Dec. 31, 2013
at Dec. 31, 2014
at Dec. 31, 2013
Long-term borrowings
Short-term borrowings
17,288
-
17,764
-
2,363
4,746
1,061
1,653
For more details about the nature of borrowings, please see note 31 “Financial instruments”.
24. Post-employment and other employee benefits - €302
million
The Company provides its employees with a variety of be-
benefits under defined benefit plans and other long-term
nefits, including termination benefits, additional months’
benefits to which employees are entitled under statute,
pay, indemnities in lieu of notice, loyalty bonuses for achie-
contract or other form of employee incentive scheme.
vement of seniority milestones, supplementary pension
These obligations, in accordance with IAS 19, were determi-
plans, supplementary healthcare plans, residential electrici-
ned using the projected unit credit method.
ty discounts (limited to retired personnel only), additional
The following table reports the change during the year in
indemnity for FOPEN pension contributions, FOPEN pension
the defined benefit obligation, as well as a reconciliation of
contributions in excess of deductible amount and personnel
the defined benefit obligation with the obligation recogni-
incentive plans.
zed in the balance sheet at December 31, 2014 and at De-
The item includes accruals made to cover post-employment
cember 31, 2013.
Millions of euro
2014
2013
Pension
benefits
Electricity
discount
Health
insurance
Other
benefits
Total
Pension
benefits
Electricity
discount
Health
insurance
Other
benefits
Total
273
11
-
8
(7)
(3)
-
(29)
-
242
-
-
-
1
-
(1)
-
11
37
-
1
(2)
1
-
(2)
-
35
15
10
-
-
-
-
(11)
-
336
10
9
(9)
(1)
-
(43)
-
14
302
296
-
9
4
-
(6)
(29)
(1)
273
9
-
-
2
1
-
(1)
-
11
39
-
1
(1)
-
-
(2)
-
37
14
358
5
-
-
-
-
(4)
-
5
10
5
1
(6)
(36)
(1)
15
336
CHANGES IN
ACTUARIAL
OBLIGATION
Actuarial obligation at
January 1
Current service cost
Interest expense
Actuarial (gains)/losses
arising from changes in
financial assumptions
Experience adjustments
(Gains)/Losses arising
from settlements
Other payments
Other changes
Actuarial obligation at
December 31
320
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS Millions of euro
(Gains)/Losses charged to profit or loss
Service cost
Interest expense
(Gains)/Losses arising from settlements
Total
Millions of euro
Remeasurement (gains)/losses in OCI
Actuarial (gains)/losses on defined benefit plans
Total
2014
10
9
-
19
2014
(10)
(10)
2013
5
10
(6)
9
2013
6
6
The current service cost for employee benefits in 2014
The main actuarial assumptions used to calculate the liabilities
amounted to €10 million, recognized under personnel costs (€6
arising from employee benefits, which are consistent with tho-
million in 2013), while the interest cost from the accretion of the
se used the previous year, are set out below.
liability amounted to €9 million (€10 million in 2013).
Discount rate
Rate of wage increases
Rate of increase in healthcare costs
2014
0.50% - 2.15%
1.6% - 3.6%
2.6%
2013
0.75% - 3.0%
2.0% - 4.0%
3.0%
The following table reports the outcome of a sensitivity
at the end of the year in the actuarial assumptions used in
analysis that demonstrates the effects on the liability for
estimating the obligation.
healthcare plans as a result of changes reasonably possible
Millions of euro
Healthcare
plans: ASEM
An increase of
0.5% in discount
rate
A decrease of
0.5% in discount
rate
An increase of
0.5% in inflation
rate
An increase
of 0.5% in
remuneration
An increase of
0.5% in pensions
currently being
paid
An increase of
1% in healthcare
costs
An increase of
1 year in life
expectancy of
active and retired
employees
(2)
2
2
2
2
4
1
321
25. Provisions for risks and charges - €16 million
The “Provisions for risks and charges” cover potential liabi-
court judgments and other dispute settlements for the year
lities that could arise from legal proceedings and other di-
and an update of the estimates for positions arising in pre-
sputes, without considering the effects of rulings that are
vious years not related to the transferred business units.
expected to be in the Company’s favor and those for which
any charge cannot be quantified with reasonable certainty.
The following table shows changes in provisions for risks
In determining the balance of the provision, we have taken
and charges.
account of both the charges that are expected to result from
Taken to income statement
Millions of euro
Accruals
Reversals
Utilization
Total
at Dec. 31, 2013
at Dec. 31, 2014
of which current
portion
Provision for litigation, risks
and other charges:
- litigation
- other
Total
Provision for early-retirement
incentives
TOTAL
19
3
22
1
23
-
-
-
-
-
(6)
-
(6)
-
(6)
(1)
-
(1)
-
(1)
12
3
15
1
16
12
-
12
1
13
The net reduction in the litigation provision amounted to €7 million, essentially reflecting the revision of estimates
for a number of outstanding disputes (€6 million).
26. Other non-current liabilities - €287 million
“Other non-current liabilities” amounted to €287 million
ting part of IRAP in computing taxable income for IRES pur-
(€283 million at December 31, 2013). They essentially re-
poses. The liability in respect of the subsidiaries is balanced
gard the debt towards Group companies that arose fol-
by the recognition of non-current tax receivables (note 16).
lowing Enel SpA’s request (submitted in its capacity as the
The change for the year of €4 million was essentially attri-
consolidating company) for reimbursement for 2004-2011
butable to the increase in the liability as a result of interest
of the additional income taxes paid as a result of not deduc-
accrued during the period.
27. Trade payables - €139 million
Millions of euro
Trade payables:
- due to third parties
- due to Group companies
Total
at Dec. 31, 2014
at Dec. 31, 2013
Change
85
54
139
130
82
212
(45)
(28)
(73)
“Trade payables” include payables due to third parties of
bles due to Group companies of €54 million (€82 million at
€85 million (€130 million at December 31, 2013) and paya-
December 31, 2013).
322
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS Trade payables due to subsidiaries at December 31, 2014 break down as follows.
Millions of euro
Subsidiaries
Enel Produzione SpA
Enel Distribuzione SpA
Enel Ingegneria e Ricerca SpA
Enel Servizio Elettrico SpA
Enel Trade SpA
Enel Italia Srl
Enel.Factor SpA
Endesa SA
Enel Russia OJSC
Sviluppo Nucleare Italia Srl
Other
Total
at Dec. 31, 2014
at Dec. 31, 2013
Change
1
-
-
-
1
25
12
4
4
3
4
54
1
18
4
2
1
32
4
13
3
1
3
82
-
(18)
(4)
(2)
-
(7)
8
(9)
1
2
1
(28)
Trade payables break down by geographical area as follows.
Millions of euro
Suppliers
Italy
EU
Non-EU
Other
Total
at Dec. 31, 2014
at Dec. 31, 2013
Change
123
9
5
2
139
183
18
8
3
212
(60)
(9)
(3)
(1)
(73)
28. Other current financial liabilities - €694 million
“Other current financial liabilities” mainly regard interest expense accrued on debt outstanding at end-year.
Millions of euro
Deferred financial liabilities
Other items
Total
Notes
31.2.1
31.2.1
at Dec. 31, 2014
at Dec. 31, 2013
Change
649
45
694
527
60
587
122
(15)
107
“Deferred financial liabilities” consist of interest expense
terest expense on current accounts held with Group com-
accrued on financial debt, while “Other items” include in-
panies.
323
29. Net financial position and long-term financial receivables
and securities - €12,611 million
The following table shows the net financial position and long-term financial receivables and securities on the basis of the
items on the balance sheet.
Millions of euro
Notes
at Dec. 31, 2014
at Dec. 31, 2013
Change
Long-term borrowings
Short-term borrowings
Current portion of long-term
borrowings
Non-current financial assets
included in debt
Current financial assets
included in debt
Cash and cash equivalents
Total
23
23
23
15.1
19.1
20
17,288
4,746
2,363
121
4,693
6,972
12,611
17,764
1,653
1,061
122
4,930
3,123
12,303
(476)
3,093
1,302
(1)
(237)
3,849
308
Pursuant to the CONSOB instructions of July 28, 2006, the
ber 31, 2014, reconciled with net financial debt as reported
following table reports the net financial position at Decem-
in the report on operations.
Millions of euro
Bank and post office deposits
Liquidity
Current financial receivables
Short-term bank debt
Short-term portion of long-term bank debt
Other short-term financial payables
Short-term financial debt
Net short-term financial position
Bonds
Long-term borrowings
Long-term financial position
NET FINANCIAL POSITION as per CONSOB
instructions
at Dec. 31, 2014
at Dec. 31, 2013
Change
of which with
related parties
of which with
related parties
3,912
(1,531)
6,972
6,972
4,693
(3)
(2,363)
(4,743)
(7,109)
4,556
(17,288)
(17,288)
(17,288)
(12,732)
4,018
(4,320)
3,123
3,123
4,930
(4)
(1,061)
(1,649)
(2,714)
5,339
(17,764)
(17,764)
(17,764)
(12,425)
3,849
3,849
(237)
1
(1,302)
(3,094)
(4,395)
(783)
476
476
476
(307)
(1)
(308)
Long-term financial receivables
121
117
122
117
NET FINANCIAL DEBT
(12,611)
(12,303)
324
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS 30. Other current liabilities - €975 million
“Other current liabilities” mainly concern payables due to
ting in the consolidated IRES taxation mechanism, as well
the tax authorities and to the Group companies participa-
as the Group VAT system.
Millions of euro
Tax payables
Payables due to Group companies
Payables due to employees,
recreational/assistance associations
Payables due to social security
institutions
Payables due to customers for security
deposits and reimbursements
Other
Total
at Dec. 31, 2014
at Dec. 31, 2013
540
396
20
8
1
10
975
31
643
18
8
1
8
709
Change
509
(247)
2
-
-
2
266
“Tax payables” amounted to €540 million and essential-
“Payables due to Group companies” amounted to €396
ly regard amounts due to tax authorities for consolidated
million and are composed of €316 million in liabilities ge-
IRES (€533 million). The increase as compared with the
nerated by the IRES consolidated taxation mechanism and
previous year amounted to €509 million and essentially re-
€77 million in liabilities from the Group consolidated VAT sy-
gards amounts due to tax authorities for consolidated IRES
stem. The decrease of €247 million reflected developments
in 2014 (tax receivable in 2013), partly offset by the change
in the debtor positions generated by these consolidated
from a debtor position in 2014 to a creditor position in 2014
taxation mechanisms.
with respect to Group VAT (€24 million).
325
31. Financial instruments
31.1 Financial assets by category
The following table shows the carrying amount for each ca-
rately hedging derivatives and derivatives measured at fair
tegory of financial assets provided by IAS 39, broken down
value through profit or loss.
into current and non-current financial assets, showing sepa-
Millions of euro
Non-current
Current
Loans and receivables
Financial assets at fair value
through profit or loss
Notes
31.1.1
at Dec. 31, 2014
at Dec. 31, 2013
at Dec. 31, 2014
at Dec. 31, 2013
146
165
12,144
8,619
Derivative financial assets at FVTPL
31.1.2
Total
Derivative financial assets
designated as hedging
instruments
Cash flow hedge derivative financial
assets
Fair value hedge derivative financial
assets
31.1.2
31.1.2
Total
TOTAL
1,283
1,283
1,041
1,041
656
40
696
304
10
314
280
280
-
-
-
177
177
-
-
-
2,125
1,520
12,424
8,796
31.1.1 Loans and receivables
The following table shows loans and receivables by nature, broken down into current and non-current financial assets.
Millions of euro
Non-current
Current
Notes
at Dec. 31, 2014
at Dec. 31, 2013
Notes
at Dec. 31, 2014
at Dec. 31, 2013
Cash and cash equivalents
Trade receivables
Financial receivables due from
Group companies
-
-
-
-
20
17
Current portion of receivables for
assumption of loans
15.1
117
117
6,972
132
-
4,018
-
205
3,123
216
21
3,391
500
257
-
-
-
19.1
19.1
-
-
-
117
117
4,223
4,169
-
29
29
146
19.1
-
48
48
165
672
145
817
12,144
1,018
93
1,111
8,619
Receivables on intercompany
accounts
Short-term loan granted to Enel
Finance International NV
Other financial receivables
Total financial receivables due
from Group companies
Financial receivables due from
others
Cash collateral for margin
agreements on OTC derivatives
Other financial receivables
Total financial receivables due
from others
TOTAL
326
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS The primary change related to an increase in “Cash and
sactions relating to the optimization of the Group’s orga-
cash equivalents” of €3,849 million compared with De-
nizational structure on the centralized treasury functions.
cember 31, 2013 due to the impact of extraordinary tran-
31.1.2 Derivative financial assets
The following table shows the notional amount and the fair
tionship and hedged risk, broken down into current and
value of derivative financial assets, by type of hedge rela-
non-current financial assets.
Millions of euro
Non-current
Current
Notional amount
Fair value
Notional amount
Fair value
at
Dec. 31,
2014
at
Dec. 31,
2013
at
Dec. 31,
2014
at
Dec. 31,
2013 Change
at
Dec. 31,
2014
at
Dec. 31,
2013
at
Dec. 31,
2014
at
Dec. 31,
2013
Change
Derivative financial
assets designated
as hedging
instruments
Cash flow hedges:
- on interest rate risk
-
-
-
-
-
400
- on foreign
exchange risk
Total cash flow
hedges
Fair value hedges:
3,649
1,319
656
304
352
-
3,649
1,319
656
304
352
400
- on interest rate risk
800
800
Total fair value
hedges
Derivatives at
FVTPL:
800
800
40
40
10
10
30
30
-
-
- on interest rate risk
3,112
3,413
376
225
151
45
-
-
-
-
-
-
- on foreign
exchange risk
9,582
7,865
907
816
Total FVTPL
12,694
11,278
1,283
1,041
TOTAL
17,143
13,397
1,979
1,355
91
242
624
4,476
4,603
4,521
4,603
4,921
4,603
-
-
-
-
-
2
278
280
280
-
-
-
-
-
-
177
177
177
-
-
-
-
-
2
101
103
103
For more details about derivative financial assets please, please see note 33 “Derivatives and hedge accounting”.
327
31.2 Financial liabilities by category
The following table shows the carrying amount for each
showing separately hedging derivatives and derivatives me-
category of financial liabilities provided by IAS 39, broken
asured at fair value through profit or loss.
down into current and non-current financial liabilities,
Millions of euro
Non-current
Current
Notes
at Dec. 31, 2014
at Dec. 31, 2013
at Dec. 31, 2014
at Dec. 31, 2013
Financial liabilities
measured at amortized
cost
Financial liabilities at fair
value through profit or
loss
31.2.1
17,288
17,764
7,942
3,513
Derivative financial liabilities
at FVTPL
31.2.2
Total
Derivative financial
liabilities designated as
hedging instruments
Cash flow hedge derivatives
31.2.3
Total
TOTAL
1,295
1,295
1,189
1,189
19,772
1,045
1,045
1,053
1,053
19,862
358
358
1
1
8,301
226
226
11
11
3,750
For more details about fair value measurement, please see note 34 “Fair value measurement”.
31.2.1 Financial liabilities measured at amortized cost
The following table shows financial liabilities at amortized cost by nature, broken down into current and non-current finan-
cial liabilities.
Millions of euro
Non-current
Current
Notes
at Dec. 31, 2014
at Dec. 31, 2013
Notes
at Dec. 31, 2014
at Dec. 31, 2013
Long-term
borrowings
Short-term
borrowings
Trade payables
Other current
financial liabilities
Total
23
17,288
17,764
-
-
-
-
-
-
23
27
28
17,288
17,764
2,363
4,746
139
694
7,942
1,061
1,653
212
587
3,513
328
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS Borrowings
Long-term borrowings (including the current portion due within 12 months) - €19,651 million
Long-term borrowings, which refers exclusively to bonds,
denominated in euros and other currencies, including the
current portion due within 12 months (equal to €2,363 mil-
lion), amounted to €19,651 million at December 31, 2014.
The following table shows the nominal values, carrying
grouped by type of borrowing and type of interest rate. For li-
sted debt instruments, the fair value is given by official prices.
For unlisted debt instruments, the fair value is determined
using valuation techniques appropriate for each category of
financial instrument and the associated market data for the
amounts and fair values of long-term borrowings at Decem-
reporting date, including the credit spreads of the Group.
ber 31, 2014, including the portion due within 12 months,
Millions of euro
Nominal
value
Carrying
amount
Current
portion
Portion
due in
more than
12 months Fair value
Nominal
value
Carrying
amount
Current
portion
Portion
due in
more than
12 months Fair value
at Dec. 31, 2014
at Dec. 31, 2013
Carrying
amount
Change
Bonds:
- fixed rate
15,414
15,284
1,000
14,284
18,166
13,519
13,364
-
13,364
14,974
1,920
- floating rate
4,380
4,367
1,363
3,004
4,311
5,483
5,461
1,061
4,400
5,320
(1,094)
Total
19,794
19,651
2,363
17,288
22,477
19,002
18,825
1,061
17,764
20,294
826
Total fixed-rate
borrowings
Total floating-
rate borrowings
15,414
15,284
1,000
14,284
18,166
13,519
13,364
-
13,364
14,974
1,920
4,380
4,367
1,363
3,004
4,311
5,483
5,461
1,061
4,400
5,320
(1,094)
TOTAL
19,794
19,651
2,363
17,288
22,477
19,002
18,825
1,061
17,764
20,294
826
The balance for bonds regards, net of €777 million, the unli-
level of fair value measurements, please, refer to note 34
sted floating-rate “Special series of bonds reserved for em-
“Fair value measurement”.
ployees 1994-2019”, which Enel SpA holds in its portfolio.
The table below shows long-term borrowings by currency
For more details about the maturity analysis of borrowings,
and interest rate.
please, refer to note 32 “Risk management” and about the
Long-term borrowings by currency and interest rate
Millions of euro
Carrying amount
Nominal value
Current average
nominal interest rate
Current effective
interest rate
at Dec. 31, 2013
at Dec. 31, 2014
at Dec. 31, 2014
Euro
US dollar
Pound sterling
Total non-euro
currencies
TOTAL
16,115
890
1,820
2,710
18,825
16,056
1,012
2,583
3,595
19,651
16,145
1,030
2,619
3,649
19,794
4.2%
8.8%
6.5%
4.5%
9.2%
6.7%
329
The table below reports changes in the nominal value of long-term debt.
Millions of euro
Nominal value
Repayments
New borrowing
at Dec. 31, 2013
Own bonds
repurchased
Exchange rate
differences
Nominal value
at Dec. 31, 2014
Bonds
Total
19,002
19,002
(1,061)
(1,061)
1,602
1,602
(42)
(42)
293
293
19,794
19,794
Compared with December 31, 2013, the nominal value
rate losses, €1,061 million in repayments and €42 million in
of long-term debt rose by €792 million, the net result of
repurchases of own bonds.
€1,602 million in new borrowing, €293 million in exchange
The table below shows the characteristics of the main borrowings finalized in 2014.
New borrowings
Type of
borrowing
Bonds:
- 2014-2020
Hybrid Bond
- 2014-2021
Hybrid Bond
Total
Issuer
Issue date
Issue amount
(millions of euro)
Currency Interest rate (%) Interest rate type
Maturity
Enel SpA
01/15/2014
Enel SpA
09/15/2014
1,000
602
1,602
EUR
GBP
5.000%
Fixed rate
01/15/2020
6.625%
Fixed rate
09/15/2021
The main transactions carried out in 2014 for a total value
sting is planned unless the same guarantee is extended
of €1,602 million, related to the issue of hybrid instruments
equally or pro rata to the bonds in question;
structured in the following tranches:
> pari passu clauses, under which the securities constitute
> €1,000 million fixed-rate 5%, maturing January 15, 2020;
a direct, unconditional and unsecured obligation of the
> £500 million fixed-rate 6.625%, maturing September 15,
issuer and are issued without preferential rights among
2021 (equal to €602 million at the issue date).
them and have at least the same seniority as other present
and future bonds of the issuer itself;
The main long-term borrowings are governed by covenants
> specification of default events, whose occurrence (e.g. in-
containing undertakings that are commonly adopted in in-
solvency, failure to pay principal or interest, initiation of
ternational business practice.
liquidation proceedings, etc.) constitutes a default;
The main covenants governing the debt regard the bond
> under cross-default clauses, the occurrence of a default
issues carried out within the framework of the Global Me-
event in respect of any financial liability (above a threshold
dium-Term Notes program, issues of subordinated uncon-
level) issued by the issuer or “significant” subsidiaries (i.e.
vertible hybrid bonds, the €9.4 billion Forward Start Facility
consolidated companies whose gross revenues or total
Agreement agreed on February 8, 2013 by Enel SpA and
assets are at least 10% of gross consolidated revenues or
Enel Finance International NV with a pool of banks and the
total consolidated assets) constitutes a default in respect
loans granted by UniCredit SpA in July 2013 and April 2014.
of the liability in question, which becomes immediately
To date none of the covenants have been triggered.
repayable;
The main commitments in respect of the bond issues in the
> early redemption clauses in the event of new tax requi-
Global Medium-Term Notes program can be summarized as
rements, which permit early redemption at par of all
follows:
outstanding bonds.
> negative pledge clauses under which the issuer may not
The main covenants covering the hybrid bonds can be sum-
establish or maintain (except under statutory requirement)
marized as follows:
mortgages, liens or other encumbrances on all or part of
> specification of default events, whose occurrence (e.g.
its assets to secure any listed bond or bond for which li-
failure to pay principal or interest, insolvency, initiation of
330
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS liquidation proceedings, etc.) constitutes a default in re-
the Group is significantly compromised. The occurrence of
spect of the liability in question, which in some cases beco-
one of the two circumstances may give rise to (a) the re-
mes immediately repayable;
negotiation of the terms and conditions of the financing
> subordination clauses: each hybrid bond is subordinate to
or (b) compulsory early repayment of the financing by the
all other bonds issued by the company and ranks pari pas-
borrower;
su with all other hybrid financial instruments issued, being
> specification of default events, whose occurrence (e.g.
senior only to equity instruments;
failure to make payment, breach of contract, false sta-
> prohibition on mergers with other companies, the sale or
tements, insolvency or declaration of insolvency by the
leasing of all or a substantial part of the company’s assets
borrower or its significant subsidiaries, business closure,
to another company, unless the latter succeeds in all obli-
government intervention or nationalization, administrati-
gations of the issuer.
ve proceeding with potential negative impact, illegal con-
The main covenants for the Forward Start Facility Agree-
duct, nationalization and government expropriation or
ment and the loan agreements between Enel SpA and Uni-
compulsory acquisition of the borrower or one of its signi-
Credit SpA are substantially similar and can be summarized
ficant subsidiaries) constitutes a default. Unless remedied
as follows:
within a specified period of time, such default will trigger
> negative pledge clauses under which the borrower (and
an obligation to make immediate repayment of the loan
its significant subsidiaries) may not establish or maintain
under an acceleration clause;
(with the exception of permitted guarantees) mortgages,
> under cross-default clauses, the occurrence of a default
liens or other encumbrances on all or part of its assets to
event in respect of any financial liability (above a threshold
secure certain financial liabilities;
level) of the borrower or “significant” subsidiaries (i.e. con-
> pari passu clauses, under which the payment underta-
solidated companies whose gross revenues or total assets
kings constitute a direct, unconditional and unsecured
are at least equal to a specified percentage (10% of gross
obligation of the borrower and bear no preferential rights
consolidated revenues or total consolidated assets)) con-
among them and have at least the same seniority as other
stitutes a default in respect of the liabilities in question,
present and future loans;
which become immediately repayable;
> change of control clause, which is triggered in the event
> clause on the disposal of assets under which the borrower
(i) control of Enel is acquired by one or more parties other
is barred from disposing of certain assets or business acti-
than the Italian State or (ii) Enel or any of its subsidiaries
vities, unless expressly agreed otherwise;
transfer a substantial portion of the Group’s assets to par-
> periodic reporting requirements.
ties outside the Group such that the financial reliability of
331
Short-term borrowings - €4,746 million
The following table shows short-term borrowings at December 31, 2014, by nature.
Millions of euro
Short-term bank borrowings (ordinary current
account)
Cash collateral for CSAs on OTC derivatives
received
Short-term borrowings from Group companies
(on intercompany current account)
Other short-term borrowings from Group
companies
Total
at Dec. 31, 2014
at Dec. 31, 2013
Change
3
423
3,820
500
4,746
4
118
1,531
-
1,653
(1)
305
2,289
500
3,093
Short-term borrowings amounted to €4,746 million
> the €500 million increase in “Other short-term bor-
(€1,653 million in 2013), up €3,093 over the previous year,
rowings from Group companies” as a result of drawings
mainly due to:
made on the Intercompany Short Term Deposit Agree-
> the €305 million increase in cash collateral received from
ment, the short-term credit line with Enel Finance Inter-
counterparties for transactions in OTC derivatives on in-
national NV.
terest rates and exchange rates;
> the €2,289 million increase in “Short-term borrowings
It should be specified that the fair value of current bor-
from Group companies” attributable to a deterioration in
rowings equals their carrying amount as the impact of di-
the debtor position on the intercompany current account
scounting is not significant.
held with subsidiaries;
Debt structure after hedging
The following table shows the effect of the hedges of foreign currency risk on the gross long-term debt structure (including
portions maturing in the next 12 months).
Millions of euro
at Dec. 31, 2014
at Dec. 31, 2013
Initial debt structure
Carrying
amount
Notional
amount
%
Impact of
hedging
instruments
Debt
structure
after
hedging
Impact of
hedging
instruments
Debt
structure
after
hedging
Initial debt structure
Carrying
amount
Notional
amount
%
Euro
US dollar
Pound sterling
16,056
16,145
82.0%
3,649
19,794
16,115
16,249
85.5%
2,753
19,002
1,012
2,583
1,030
5.0%
2,619
13.0%
(1,030)
(2,619)
-
-
890
906
1,820
1,847
4.8%
9.7%
(906)
(1,847)
-
-
Total
19,651
19,794
100.0%
-
19,794
18,825
19,002
100.0%
-
19,002
The following table shows the effect of the hedges of interest rate risk on the gross long-term debt outstanding at the re-
porting date.
Outstanding gross debt
at Dec. 31, 2014
at Dec. 31, 2013
Before hedging
After hedging
Before hedging
After hedging
%
Floating rate
Fixed rate
Total
332
22.1%
77.9%
100.0%
19.2%
80.8%
100.0%
28.9%
71.1%
100.0%
20.2%
79.8%
100.0%
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS 31.2.2 Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss, broken
million) financial liabilities, refer solely to derivative financial
down into current (€358 million) and non-current (€1,295
liabilities.
31.2.3 Derivative financial liabilities
The following table shows the notional amount and the fair
lationship and hedged risk, broken down into current and
value of derivative financial liabilities, by type of hedge re-
non-current financial liabilities.
Millions of euro
Non-current
Current
Notional amount
Fair value
Notional amount
Fair value
at
Dec. 31,
2014
at
Dec. 31,
2013
at
Dec. 31,
2014
at
Dec. 31,
2013 Change
at
Dec. 31,
2014
at
Dec. 31,
2013
at
Dec. 31,
2014
at
Dec. 31,
2013 Change
Derivative financial
assets designated
as hedging
instruments
Cash flow hedge:
- on interest rate risk
390
1,690
159
153
6
900
500
- on foreign
exchange risk
Total cash flow
hedge
Derivatives on
FVTPL:
1,470
2,811
1,030
900
130
-
-
1,860
4,501
1,189
1,053
136
900
500
- on interest rate risk
3,150
3,464
- on foreign
exchange risk
Total derivatives
on FVTPL
9,582
7,865
12,732
11,329
TOTAL
14,592
15,830
384
911
1,295
2,484
233
151
146
600
812
99
4,476
4,603
1,045
2,098
250
386
4,622
5,522
5,203
5,703
1
-
1
75
283
358
359
11
(10)
-
-
11
(10)
50
25
176
107
226
237
132
122
For more details about derivative financial liabilities, please see note 33 “Derivatives and hedge accounting”.
31.2.4 Net gains/(losses)
The following table shows net gains and losses by category of financial instruments, excluding derivatives.
Millions of euro
Net gains/(losses)
of which: impairment/reversal of
impairment
Available for sale financial assets
Loans and receivables
Financial assets at FVTPL
at Dec. 31, 2014
at Dec. 31, 2013
at Dec. 31, 2014
-
7
-
34
(8)
Financial liabilities measured at amortized cost
(1,319)
(791)
Financial liabilities at FVTPL
Financial liabilities held for trading
Financial liabilities designated upon initial
recognition (fair value option)
-
-
-
-
For more details on net gains and losses on derivatives, please see note 7 “Net financial income/(expense) from derivatives”.
333
32. Risk management
32.1 Financial risk management objectives and policies
As part of its operations, the Company is exposed to a varie-
> the establishment of specific policies set at both the
ty of financial risks, notably market risks (including interest
Company level and at the level of individual Divisions/
rate risk and foreign exchange risk), credit risk and liquidity
countries/business lines, which define the roles and re-
risk.
sponsibilities for those involved in managing, monitoring
and controlling risks, ensuring the organizational separa-
The Company’s governance arrangements for financial risk
tion of units involved in managing the Group’s business
envisage:
and those responsible for managing risk;
> specific internal committees, formed of members of the
> the specification of operational limits at both the Com-
Company’s top management and chaired by the CEO,
pany level and at the level of individual Divisions/countri-
which are responsible for strategic policy-making and
es/business lines for the various types of risk. These limits
oversight of risk management;
are monitored periodically by the risk management units.
32.2 Market risks
Market risk is the risk that the expected cash flows or fair
rencies have an impact on the value of the cash flows deno-
value of a financial instrument could change owing to chan-
minated in those currencies.
ges in market prices.
The Group’s policies for managing financial risks provide for
As part of its operations as an industrial holding company,
the stabilization of the effects of changes in interest rates
Enel SpA is exposed to different market risks, notably the
and exchange rates. This objective is achieved both at the
risk of changes in interest rates and exchange rates.
source of the risk, through the strategic diversification of the
Interest rate risk and foreign exchange risk are primarily ge-
the risk profile of the exposure with derivatives entered into
nature of financial assets and liabilities, and by modifying
nerated by the presence of financial instruments.
on over-the-counter markets.
The main financial liabilities, other than derivatives, held by
the Company include bonds, bank borrowings (including
As the Parent Company, Enel SpA centralizes some treasu-
revolving credit facilities and loans from EU bodies), other
ry management functions and access to financial markets
borrowings, cash collateral for derivatives transactions and
with regard to derivatives contracts that do not have ener-
trade payables.
gy commodities as underlyings. As part of this activity, the
The main purpose of those financial instruments is to finan-
Company acts as an intermediary for Group companies with
ce the operations of the Company.
the market, taking positions that, while they can be substan-
The main financial assets, other than derivatives, held by the
tial, do not however represent an exposure to markets risks
Company include financial receivables, cash collateral for
for Enel SpA.
derivatives transactions, cash and cash equivalents, short-
term deposits and trade receivables.
During 2013, EMIR (European Market Infrastructure Regula-
For more details, please see note 32 “Financial instruments”.
tion) 648/2012 of the European Parliament came into force.
The source of exposure to interest rate risk and foreign
It is intended to regulate the OTC derivatives market in or-
exchange risk did not change with respect to the previous
der to contain the systemic and counterparty risk typical of
year.
the market within sustainable limits, increasing the transpa-
rency of trading and reducing the scope for market abuse.
The nature of the financial risks to which the Company is
exposed is such that changes in interest rates cause changes
To this end, the EMIR framework introduces an operational
in cash flows associated with interest payments on long-
model for the management of the entire life cycle of OTC deri-
term floating-rate debt instruments, while changes in the
vatives, involving both financial and non-financial counterpar-
exchange rate between the euro and the main foreign cur-
ties. Among the main innovations, it provides for the standar-
334
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS dization of contracts, the obligation to use a clearing system
Adjustment or CVA) and its own (Debit Valuation Adjustment
involving a central or bilateral counterparty, and requirements
or DVA), in order to adjust the fair value of financial instru-
to report to authorized entities at the European level (trade
ments for the corresponding amount of counterparty risk.
repositories).
More specifically, the Company measures CVA/DVA using
In 2013, the Enel Group, as non-financial counterparty, un-
a Potential Future Exposure valuation technique for the net
dertook a number of initiatives to ensure compliance with the
exposure of the position and subsequently allocating the
EMIR regulatory framework.
adjustment to the individual financial instruments that make
In particular, in the more specific area of risk management go-
up the overall portfolio. All of the inputs used in this technique
vernance, the Company has begun monitoring the size of the
are observable on the market.
OTC derivatives portfolio in relation to the threshold values
set by regulators for the activation of the clearing obligations.
During 2014, no overshoot of those threshold values was de-
tected.
The volume of transactions in financial derivatives outstan-
Interest rate risk
Interest rate risk is the risk that the fair value or future cash
flows of a financial instrument will fluctuate because of chan-
ges in market interest rates.
ding at December 31, 2014 is reported below, with specifi-
Interest rate risk for the Company manifests itself as a change
cation of the notional amount of each class of instrument as
in the flows associated with interest payments on floating-
calculated at the year-end exchange rates provided by the Eu-
rate financial liabilities, a change in financial terms and con-
ropean Central Bank, where denominated in currencies other
ditions in negotiating new debt instruments or as an adverse
than the euro.
change in the value of financial assets/liabilities measured at
fair value, which are typically fixed-rate debt instruments.
The notional amount of a derivative contract is the amount on
Interest rate risk is managed with the dual goals of reducing
which cash flows are exchanged. This amount can be expres-
the amount of debt exposed to interest rate fluctuations and
sed as a value or a quantity (for example tons, converted into
containing the cost of funds, limiting the volatility of results.
euro by multiplying the notional amount by the agreed price).
This goal is pursued through the strategic diversification of
The notional amounts of derivatives reported here do not re-
the portfolio of financial liabilities by contract type, maturi-
present amounts exchanged between the parties and there-
ty and interest rate, and modifying the risk profile of specific
fore are not a measure of the Company’s credit risk exposure.
exposures using OTC derivatives, mainly interest rate swaps.
Starting from 2013, the Company now includes a measure-
The notional amount of outstanding contracts is reported
ment of credit risk, both of the counterparty (Credit Valuation
below:
Millions of euro
Notional amount
Interest rate derivatives
Interest rate swaps
Total
at Dec. 31, 2014
at Dec. 31, 2013
8,943
8,943
10,467
10,467
The term of such contracts does not exceed the maturity of
The notional amount of open interest rate swaps at the end
the underlying financial liability, so that any change in the
of the year was €8,943 million (€10,467 million at Decem-
fair value and/or cash flows of such contracts is offset by a
ber 31, 2013), of which €2,629 million (€3,640 million at
corresponding change in the fair value and/or cash flows of
December 31, 2013) in respect of hedges of the Company’s
the underlying position.
share of debt, and €3,157 million (€3,413 million at Decem-
Interest rate swaps normally provide for the periodic
ber 31, 2013) in respect of hedges of the debt of Group
exchange of floating-rate interest flows for fixed-rate inte-
companies with the market intermediated in the same no-
rest flows, both of which are calculated on the basis of the
tional amount with those companies.
notional principal amount.
335
For more details on interest rate derivatives, please see
Interest rate risk sensitivity analysis
note 33 “Derivatives and hedge accounting”.
The Company analyses the sensitivity of its exposure by
estimating the effects of a change in interest rates on the
The amount of floating-rate debt that is not hedged
portfolio of financial instruments.
against interest rate risk is the main risk factor that could
More specifically, sensitivity analysis measures the poten-
impact the income statement (raising borrowing costs) in
tial impact of market scenarios on equity, for the cash flow
the event of an increase in market interest rates.
hedge component, and on profit or loss, for the fair value
At December 31, 2014, 22% of gross long-term financial
hedge component, for derivatives that are not eligible for
debt was floating rate (29% at December 31, 2013). Taking
hedge accounting and for the portion of gross long-term
account of hedges of interest rates considered effective
debt not hedged using derivative financial instruments.
pursuant to IAS 39, 79% of gross long-term financial debt
These scenarios are represented by parallel increases and
was hedged at December 31, 2014 (79% hedged at Decem-
decreases in the yield curve as at the reporting date.
ber 31, 2013). Including interest rate derivatives treated as
There were no changes in the methods and assumptions
hedges for management purposes but ineligible for hed-
used in the sensitivity analysis compared with the previous
ge accounting, 79% of gross long-term financial debt was
year.
hedged (79% hedged at December 31, 2013).
With all other variables held constant, the Company’s profit before tax would be affected as follows:
Millions of euro
Pre-tax impact on profit or loss
Pre-tax impact on equity
Basis points
Increase
Decrease
Increase
Decrease
at Dec. 31, 2014
Change in financial expense on gross long-term
floating-rate debt after hedging
Change in fair value of derivatives classified as non-
hedging instruments
Change in fair value of derivatives designated as
hedging instruments
Cash flow hedges
Fair value hedges
25
25
25
25
9
8
-
(9)
(9)
(8)
-
9
-
-
17
-
-
-
(17)
-
Foreign exchange rate risk
Foreign exchange rate risk is the risk that the fair value or
the maturity of the underlying exposure.
future cash flows of a financial instrument will fluctuate be-
Currency forwards are contracts in which the counterpar-
cause of changes in exchange rates.
ties agree to exchange principal amounts denominated in
different currencies at a specified future date and exchan-
For Enel SpA, the main source of foreign exchange risk is
ge rate (the strike). Such contracts may call for the actual
the presence of monetary financial instruments denomina-
exchange of the two amounts (deliverable forwards) or
ted in a currency other than the euro, mainly bonds deno-
payment of the difference between the strike exchange
minated in foreign currency.
rate and the prevailing exchange rate at maturity (non-de-
The exposure to foreign exchange risk did not change with
liverable forwards). In the latter case, the strike rate and/or
respect to the previous year.
the spot rate may be determined as averages of the official
For more details, please see note 31 “Financial instruments”.
fixings of the European Central Bank.
In order to minimize exposure to changes in exchange ra-
Cross currency interest rate swaps are used to transform
tes, the Company normally uses a variety of OTC derivati-
a long-term fixed- or floating-rate liability in foreign cur-
ves such as currency forwards and cross currency interest
rency into an equivalent floating- or fixed-rate liability
rate swaps. The term of such contracts does not exceed
in euros. In addition to having notionals denominated in
336
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS different currencies, these instruments differ from inte-
The following table reports the notional amount of tran-
rest rate swaps in that they provide both for the periodic
sactions outstanding at December 31, 2014 and Decem-
exchange of cash flows and the final exchange of principal.
ber 31, 2013, broken down by type of hedged item.
Millions of euro
Foreign exchange derivatives
Currency forwards:
- hedging foreign exchange risk on commodities
- hedging future cash flows
- other currency forwards
Cross currency interest rate swaps
Total
Notional amount
at Dec. 31, 2014
at Dec. 31, 2013
11,218
8,378
2,840
-
22,017
33,235
7,762
6,819
520
423
21,304
29,066
More specifically, these include:
Considering exchange rate hedges and the portion of debt
> currency forward contracts with a total notional amount
in foreign currency that is denominated in the currency of
of €8,378 million (€6,819 million at December 31, 2013),
account or the functional currency of the Company, the
of which €4,189 million to hedge the exchange rate risk as-
debt is fully hedged using cross currency interest rate swaps.
sociated with purchases of energy commodities by Group
companies, with matching transactions with the market;
Foreign exchange risk sensitivity analysis
> currency forward contracts with a notional amount of
The Company analyses the sensitivity of its exposure by
€2,840 million (€520 million at December 31, 2013) to
estimating the effects of a change in exchange rates on the
hedge the exchange rate risk associated with other ex-
portfolio of financial instruments.
pected cash flows in currencies other than the euro, of
More specifically, sensitivity analysis measures the potential
which €1,420 million in market transactions;
impact of market scenarios on equity, for the cash flow hed-
> cross currency interest rate swaps with a notional
ge component, and on profit or loss, for the fair value hedge
amount of €22,017 million (€21,304 million at December
component, for derivatives that are not eligible for hedge
31, 2013) to hedge the exchange rate risk on the debt
accounting and for the portion of gross long-term debt not
of Enel SpA or other Group companies denominated in
hedged using derivative financial instruments.
currencies other than the euro.
These scenarios are represented by the appreciation/de-
preciation of the euro against all of the foreign currencies
For more details, please see note 33 “Derivatives and hedge
compared with the value observed as at the reporting date.
accounting”.
There were no changes in the methods and assumptions used
in the sensitivity analysis compared with the previous year.
An analysis of the Group’s debt shows that 18% of gross
With all other variables held constant, the profit before tax
medium and long-term debt (15% at December 31,2013) is
would be affected as follows:
denominated in currencies other than the euro.
Millions of euro
Change in financial expense on gross debt
denominated in foreign currency after hedging
Change in fair value of derivatives classified as
non-hedging instruments
Change in fair value of derivatives designated as
hedging instruments
Cash flow hedges
Fair value hedges
Exchange
rate
10%
10%
10%
10%
Pre-tax impact on profit or loss
Pre-tax impact on equity
at Dec. 31, 2014
Increase
Decrease
Increase
Decrease
-
-
-
-
-
-
-
-
-
-
(485)
-
-
-
592
-
337
32.3 Credit risk
Credit risk is the risk that a counterparty will not meet its
diversifying the exposure among different institutions and
obligations under a financial instrument or customer con-
constantly monitoring their credit ratings. In addition, Enel
tract, leading to a financial loss. The Company is exposed to
entered into margin agreements with the leading financial
credit risk from its operating activities and from its financing
institutions with which it operates that call for the exchange
activities, including derivatives, deposits with banks and
of cash collateral, which significantly mitigates the exposure
financial institutions, foreign exchange transactions and
to counterparty risk.
other financial instruments.
The exposure to credit risk is regularly monitored by the de-
Unexpected changes in the creditworthiness of a counter-
partment responsible for monitoring risks under the policies
party have an effect on the creditor position, in terms of in-
and procedures outlined in the governance rules for mana-
solvency (default risk) or changes in its market value (spread
ging the Group’s financial risks.
risk).
The sources of exposure to credit risk did not change with
At December 31, 2014, the exposure to credit risk, represen-
respect to the previous year.
ted by the carrying amount of financial assets net of related
The Company manages credit risk by operating solely with
provisions for impairment as well as derivatives with a po-
counterparties considered solvent by the market, i.e. those
sitive fair value, net of any cash collateral held, amounted
with high credit standing, and does not have any significant
to €14,101 million (€10,154 million at December 31, 2013).
concentration of credit risk.
Of the total, €5,335 million regard receivables in respect of
The credit risk in respect of the derivatives portfolio is con-
Group companies and €6,972 million regard cash and cash
sidered negligible since transactions are conducted solely
equivalents.
with leading Italian and international financial institutions,
Millions of euro
Non-current financial receivables
Other non-current financial assets
Trade receivables
Current financial receivables
Other current financial assets
Financial derivatives
Cash and cash equivalents
at Dec. 31, 2014
at Dec. 31, 2013
Change
of which Group
of which Group
117
4
132
4,018
1,022
1,836
6,972
117
-
126
4,018
205
869
-
117
5
216
3,911
1,368
1,414
3,123
117
-
208
3,911
257
1,076
-
5,569
-
(1)
(84)
107
(346)
422
3,849
3,947
Total
14,101
5,335
10,154
32.4 Liquidity risk
Liquidity risk is the risk that the Company will encounter
including cash and short-term deposits, available commit-
difficulty in meeting obligations associated with financial
ted credit lines and a portfolio of highly liquid asset.
liabilities that are settled by delivering cash or another fi-
In the long term, liquidity risk is mitigated by maintaining
nancial asset.
a balanced debt maturity profile, diversification of funding
The objectives of liquidity risk management policies are:
sources in terms of instruments, markets/currencies and
> ensuring an appropriate level of liquidity for the Group,
counterparties.
minimizing the associated opportunity cost;
At the Group level, Enel SpA (directly and through its sub-
> maintaining a balanced debt structure in terms of the
sidiary Enel Finance International NV) manages the centra-
maturity profile and funding sources.
lized treasury function (with the exception of the Endesa
In the short term, liquidity risk is mitigated by maintaining
Group, where those functions are performed by Endesa SA
an appropriate level of unconditionally available resources,
and its subsidiaries Endesa Internacional BV and Endesa Ca-
338
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS pital SA), ensuring access to the money and capital markets.
amounting to €5,670 (of which none had been drawn)
Enel SpA meets liquidity requirements primarily through
maturing in more than one year (€5,900 million at Decem-
cash flows generated by ordinary operations and drawing
ber 31, 2013).
on a range of sources of financing. In addition, it manages
any excess liquidity.
At December 31, 2014, Enel SpA had a total of about
Maturity analysis
The table below summarizes the maturity profile of the
€6,972 million in cash or cash equivalents (€3,123 mil-
Company’s financial liabilities based on contractual undi-
lion at December 31, 2013) and committed lines of credit
scounted payments.
Millions of euro
Maturing in
Less than 3
months
Between 3 months
and 1 year
Between 1 and 2
years
Between 2 and 5
years
Over 5 years
Bonds:
- fixed rate
- floating rate
Total
1,000
1,300
2,300
-
63
63
1,990
1,059
3,049
6,665
935
7,600
5,629
1,010
6,639
339
32.5 Offsetting financial assets and financial liabilities
The following table reports the net financial assets and lia-
guarantee transactions involving derivatives, Enel SpA has
bilities. More specifically, it shows that there are no netting
entered into margin agreements with leading financial in-
arrangements for derivatives in the financial statements
stitutions that call for the exchange of cash collateral, bro-
since the Company does not plan to set-off assets and lia-
ken down as shown in the table.
bilities. As envisaged by current market regulations and to
Millions of euro
at Dec. 31, 2014
(a)
(b)
(c)=(a)-(b)
(d)
(e)=(c)-(d)
Related amounts not set off in the
balance sheet
(d)(i),(d)(ii)
(d)(iii)
Gross amounts
of recognized
financial assets/
(liabilities) set off
in the balance
sheet
Net amounts of
financial assets/
(liabilities)
presented in the
balance sheet
Gross amounts
of recognized
financial assets/
(liabilities)
Net portion of
financial assets/
(liabilities)
guaranteed with
cash collateral
Net amount of
financial assets/
(liabilities)
Financial
instruments
FINANCIAL ASSETS
Derivative financial assets:
- on interest rate risk
- on foreign exchange risk
Total financial assets
FINANCIAL LIABILITIES
Derivative financial liabilities:
- on interest rate risk
- on foreign exchange risk
Total financial liabilities
TOTAL FINANCIAL ASSETS/
(LIABILITIES)
418
1,842
2,260
(620)
(2,223)
(2,843)
(583)
-
-
-
-
-
-
-
418
1,842
2,260
(620)
(2,223)
(2,843)
(583)
-
-
-
-
-
-
-
(57)
(973)
362
869
(1,029)
1,231
476
802
1,278
(144)
(1,421)
(1,565)
249
(334)
33. Derivatives and hedge accounting
33.1 Hedge accounting
Derivatives are initially recognized at fair value, on the trade
Hedge accounting is applied to derivatives entered into in
date of the contract, and are subsequently re-measured at
order to reduce risks such as interest rate risk, exchange rate
their fair value.
risk, commodity risk, credit risk and equity risk when all the
The method of recognizing the resulting gain or loss de-
criteria provided for under IAS 39 are met.
pends on whether the derivative is designated as a hed-
At the inception of the transaction, the Company docu-
ging instrument, and if so, the nature of the item being
ments the relationship between hedging instruments and
hedged.
hedged items, as well as its risk management objectives and
Hedge accounting is applied to derivatives entered into in
strategy. The Company also analyzes, both at hedge incep-
order to reduce risks such as interest rate risk, exchange rate
tion and on an ongoing systematic basis, the effectiveness
risk, commodity risk, credit risk and equity risk when all the
of hedges using prospective and retrospective tests in order
criteria provided for under IAS 39 are met.
to determine whether hedging instruments are highly ef-
340
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS fective in offsetting changes in the fair values or cash flows
the cumulative gain or loss that was reported in equity is
of hedged items.
immediately transferred to profit or loss.
Depending on the nature of the risks to which it is expo-
sed, the Company designates derivatives as hedging instru-
The Company currently uses these hedge relationships to
ments in one of the following hedge relationships.
minimize the volatility of profit or loss.
> cash flow hedge derivatives in respect of the risk of: i)
changes in the cash flows associated with long-term
floating-rate debt; ii) changes in the exchange rates
Fair value hedges
Fair value hedges are used to protect the Company against
associated with long-term debt denominated in a cur-
exposures to adverse changes in the fair value of assets, lia-
rency other than the currency of account or the functio-
bilities or firm commitments attributable to a particular risk
nal currency in which the company holding the financial
that could affect profit or loss.
liability operates; iii) changes in the price of fuels deno-
Changes in the fair value of derivatives that qualify and
minated in a foreign currency; iv) changes in the price of
are designated as hedging instruments are recognized in
forecast electricity sales at variable prices; and v) chan-
the income statement, together with changes in the fair
ges in the price of transactions in coal and petroleum
value of the hedged item that are attributable to the hed-
commodities;
ged risk.
> fair value hedge derivatives involving the hedging of ex-
If the hedge is ineffective or no longer meets the criteria for
posures to changes in the fair value of an asset, a liability
hedge accounting, the adjustment to the carrying amount
or a firm commitment attributable to a specific risk;
of a hedged item for which the effective interest method
> derivatives hedging a net investment in a foreign ope-
is used is amortized to profit or loss over the period to ma-
ration (NIFO), involving the hedging of exposures to
turity.
exchange rate volatility associated with investments in
The Company currently makes use of such hedge rela-
foreign entities.
tionships to seize opportunities associated with general
developments in the yield curve.
For more details on the nature and the extent of risks arising
from financial instruments to which the Company is expo-
sed, please see note 32 “Risk management”.
Cash flow hedges
Cash flow hedges are used in order to hedge the Company’s
Hedge of a net investment in a foreign ope-
ration (NIFO)
Hedges of net investments in foreign operations, with a fun-
ctional currency other than the euro, are hedges of the im-
pact of changes in exchange rates in respect of investments
exposure to changes in future cash flows that are attributa-
in foreign entities. The hedge instrument is a liability deno-
ble to a particular risk associated with an asset, a liability or
minated in the same currency as the investment. The foreign
a highly probable transaction that could affect profit or loss.
exchange differences of the hedged item and the hedge are
The effective portion of changes in the fair value of deriva-
accumulated each year in equity until the disposal of the in-
tives that are designated and qualify as cash flow hedges is
vestment, at which time the foreign exchange differences
recognized in other comprehensive income. The gain or loss
are transferred to profit or loss.
relating to the ineffective portion is recognized immediately
in the income statement.
The Company does not currently hold any hedges of net in-
Amounts accumulated in equity are reclassified to profit or
vestments in a foreign operation.
loss in the period when the hedged item affects profit or
loss.
The following table shows the notional amount and the fair
When a hedging instrument expires or is sold, or when a
value of hedging derivatives classified on the basis of the
hedge no longer meets the criteria for hedge accounting
type of hedge relationship.
but the hedged item has not expired or been cancelled,
The notional amount of a derivative contract is the amount
any cumulative gain or loss existing in equity at that time
on the basis of which cash flows are exchanged. This amount
remains in equity and is recognized when the forecast tran-
can be expressed as a value or a quantity (for example tons,
saction is ultimately recognized in the income statement.
converted into euros by multiplying the notional amount
When a forecast transaction is no longer expected to occur,
by the agreed price). Amounts denominated in currencies
341
other than the euro are converted at the end-year exchange
rates provided by the European Central Bank.
Millions of euro
Notional amount
Fair value assets
Notional amount
Fair value liabilities
at
Dec. 31,
2014
at
Dec. 31, 2013
at
Dec. 31,
2014
at
Dec. 31, 2013
at
Dec. 31,
2014
at
Dec. 31, 2013
at
Dec. 31,
2014
at
Dec. 31, 2013
Derivatives
Cash flow hedges:
- on interest rate risk
- on foreign exchange risk
Total cash flow hedges
Fair value hedges:
- on interest rate risk
Total fair value hedges
400
3,649
4,049
800
800
-
1,319
1,319
800
800
TOTAL
4,849
2,119
-
656
656
40
40
696
-
304
304
10
10
314
1,290
1,470
2,760
-
-
2,190
2,811
5,001
-
-
160
1,030
1,190
-
-
164
900
1,064
-
-
2,760
5,001
1,190
1,064
For more on the fair value measurement of derivatives, please see note 34 “Fair value measurement”.
Hedge relationships by type of risk hedged
33.1.1 Interest rate risk
The following table shows the notional amount and the fair
transactions outstanding as at December 31, 2014 and De-
value of the hedging instruments on the interest rate risk of
cember 31, 2013, broken down by type of hedged item:
Millions of euro
Hedged instrument
Interest rate swaps
Interest rate swaps
Total
Hedged item
Floating-rate
borrowings
Fixed-rate
borrowings
Fair
value
Notional amount
Fair
value
Notional amount
at Dec. 31, 2014
at Dec. 31, 2013
(160)
40
(120)
1,690
800
2,490
(164)
10
(154)
2,190
800
2,990
The interest rate swaps outstanding at the end of the year
flow hedge derivatives refer to the hedging of certain floa-
and designated as hedging instruments function as a cash
ting-rate bonds issued since 2001.
flow hedge and fair value hedge for the hedged item. More
The following table shows the notional amount and the fair
specifically, fair value hedge derivatives relate to the issue
value of hedging derivatives on interest rate risk as at De-
of an unconvertible hybrid bond denominated in euros in
cember 31, 2014 and December 31, 2013, broken down by
2013, hedged in the amount of €800 million, while the cash
type of hedge:
Millions of euro
Notional amount
Fair value assets
Notional amount
Fair value liabilities
at
Dec. 31, 2014
at
Dec. 31, 2013
at
Dec. 31, 2014
at
Dec. 31, 2013
at
Dec. 31, 2014
at
Dec. 31, 2013
at
Dec. 31, 2014
at
Dec. 31, 2013
400
400
800
800
1,200
-
-
800
800
800
-
-
40
40
40
-
-
10
10
10
1,290
1,290
2,190
2,190
-
-
-
-
(160)
(160)
-
-
(164)
(164)
-
-
1,290
2,190
(160)
(164)
Cash flow hedge
derivatives
Interest rate swaps
Fair value hedge
derivatives
Interest rate swaps
TOTAL INTEREST RATE
DERIVATIVES
342
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS The notional amount of the interest rate swaps at December
The general decline in the yield curve over the course of the
31, 2014 came to €2,490 million (€2,990 million at Decem-
year prompted an improvement in the fair value of the fair
ber 31, 2013), with a corresponding negative fair value of
value hedge derivatives.
€120 million (negative €154 million at December 31, 2013).
The decline of €500 million in the notional amount is attri-
Cash flow hedge derivatives
butable to the maturing, and consequent closure, of cash
The following table shows the cash flows expected in co-
flow hedge positions for the same amount in 2014.
ming years from cash flow hedge derivatives:
Millions of euro
Fair value
Distribution of expected cash flows
Cash flow hedge
derivatives on interest
rates
at
Dec. 31, 2014
Positive fair value
Negative fair value
-
(160)
2015
(9)
(33)
2016
-
(14)
2017
-
(13)
2018
-
(13)
2019
Beyond
-
(13)
-
(115)
The following table shows the impact of cash flow hedge derivatives on interest rate risk on equity during the period, gross
of tax effects:
Millions of euro
Opening balance at January 1
Changes in fair value recognized in equity (OCI)
Changes in fair value recognized in profit or loss - recycling
Changes in fair value recognized in profit or loss – ineffective portion
Closing balance at December 31
2014
(86)
-
(7)
-
(93)
2013
(186)
-
100
-
(86)
Fair value hedge derivatives
The following table shows the cash flows expected in coming years from fair value hedge derivatives:
Millions of euro
Fair value
Distribution of expected cash flows
Fair value hedge
derivatives
Positive fair value
Negative fair value
at Dec. 31,
2014
40
-
2015
2016
2017
2018
2019
Beyond
10
-
11
-
10
-
9
-
30
-
-
-
343
33.1.2 Foreign exchange risk
The following table shows the notional amount and the fair
of transactions outstanding as at December 31, 2014 and
value of the hedging instruments on foreign exchange risk
December 31, 2013, broken down by type of hedged item:
Millions of euro
Fair value
Notional amount
Fair value
Notional amount
Hedging instruments
Hedged item
at Dec. 31, 2014
at Dec. 31, 2013
Cross currency interest rate swaps
(CCIRSs)
Fixed-rate
borrowings
Total
(374)
(374)
5,119
5,119
(596)
(596)
4,130
4,130
The cross currency interest rate swaps outstanding at the
equal to €642 million at the exchange rate prevailing at the
end of the year and designated as hedging instruments
end of the period.
function as a cash flow hedge for the hedged item. More
specifically, these derivatives hedge fixed-rate bonds deno-
The following table shows the notional amount and the fair
minated in foreign currencies.
value of derivatives on foreign exchange risk as at Decem-
In 2014, cross currency interest rate swaps were entered
ber 31, 2014 and December 31, 2013, broken down by type
into with respect to a fixed-rate borrowing of £500 million,
of hedge:
Millions of euro
Notional amount
Fair value assets
Notional amount
Fair value liabilities
at
Dec. 31, 2014
at
Dec. 31, 2013
at
Dec. 31, 2014
at
Dec. 31, 2013
at
Dec. 31, 2014
at
Dec. 31, 2013
at
Dec. 31, 2014
at
Dec. 31, 2013
Cash flow hedge
derivatives
Cross currency interest
rate swaps
3,649
1,319
3,649
1,319
TOTAL FOREIGN
EXCHANGE DERIVATIVES
3,649
1,319
656
656
656
304
1,470
2,811
(1,030)
(900)
304
1,470
2,811
(1,030)
(900)
304
1,470
2,811
(1,030)
(900)
The notional amount of the cross current interest rate swaps
lopments in the exchange rate of the euro against the main
at December 31, 2014 came to €5,119 million (€4,130 mil-
other currencies.
lion at December 31, 2013), with a corresponding negative
fair value of €374 million (negative €596 million at Decem-
Cash flow hedge derivatives
ber 31, 2013).
The following table shows the cash flows expected in co-
The notional amount and the relative fair value essential-
ming years from cash flow hedge derivatives on foreign
ly changed as a result of both new derivatives and deve-
exchange risk:
Millions of euro
Fair value
Distribution of expected cash flows
Cash flow hedge
derivatives on exchange
rates
at
Dec. 31, 2014
Positive fair value
Negative fair value
656
(1,030)
2015
106
(75)
2016
101
(70)
2017
94
(64)
2018
90
(59)
2019
Beyond
96
(152)
639
(560)
344
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS The following table shows the impact of cash flow hedge derivatives on foreign exchange risk on equity during the period,
gross of tax effects:
Millions of euro
Opening balance at January 1
Changes in fair value recognized in equity (OCI)
Changes in fair value recognized in profit or loss - recycling
Changes in fair value recognized in profit or loss – ineffective portion
Closing balance at December 31
2014
(242)
-
(68)
-
(310)
2013
(254)
-
12
-
(242)
33.2 Derivatives at fair value through profit or loss
The following table shows the notional amount and the fair value of derivatives at FVTPL as at December 31, 2014 and De-
cember 31, 2013, broken down by type of risk:
Millions of euro
Notional amount
Fair value assets
Notional amount
Fair value liabilities
at
Dec. 31, 2014
at
Dec. 31, 2013
at
Dec. 31, 2014
at
Dec. 31, 2013
at
Dec. 31, 2014
at
Dec. 31, 2013
at
Dec. 31, 2014
at
Dec. 31, 2013
Derivatives at FVTPL on
interest rates
Interest rate swaps
Derivatives at FVTPL on
exchange rates
Forwards
Cross currency interest
rate swaps
TOTAL DERIVATIVES AT
FVTPL
3,157
3,157
3,413
3,413
14,058
12,468
5,609
3,881
378
378
1,186
364
225
225
993
129
3,296
3,296
4,064
4,064
(460)
(460)
14,058
12,468
(1,194)
5,609
3,881
(369)
(284)
(284)
(988)
(128)
8,449
8,587
822
864
8,449
8,587
(825)
(860)
17,215
15,881
1,564
1,218
17,354
16,532
(1,654)
(1,272)
At December 31, 2014 the notional amount of derivatives at
gate the foreign exchange risk associated with the prices of
fair value through profit or loss on interest rates and foreign
energy commodities within the context of the procurement
exchange rates came to €34,569 million (€32,413 million at
process undertaken by Group companies and intermedia-
December 31, 2013), corresponding to a negative fair value
ted in a way that tracks the market.
of €90 million (negative €54 million at December 31, 2013).
The change in the notional amount and the fair value as
Interest rate swaps at the end of the year refer primarily to
compared with the previous year is associated with normal
hedges of the debt of the Group companies with the market
operations.
and intermediated in the same notional amount with those
Cross currency interest rate swaps, for a notional amount of
companies in the amount of €3,157 million.
€8,449 million, relate to foreign exchange hedges for the
The overall change in the notional amount and the fair va-
debt of the Group companies denominated in currencies
lue of interest rate swaps (respectively, a negative €1,024
other than the euro and intermediated in a way that tracks
million and a negative €23 million) compared with the pre-
the market.
vious year is attributable to the maturity and closure of a
The change in the notional amount and the fair value of the
number of derivative positions in 2014 and to the general
cross currency interest rate swaps is mainly due to the na-
decline in the interest rate yield curve over the course of the
tural maturity of a number of derivatives in 2014 and deve-
year.
lopments in the exchange rate of the euro with other major
Forward contracts, with a notional amount of €5,609 mil-
currencies.
lion, relate mainly to OTC derivatives entered into to miti-
345
34. Fair value measurement
The Company measures fair value in accordance with IFRS
propriate for each type of financial instrument and market
13 whenever required by international accounting stan-
data as of the close of the period (such as interest rates,
dards.
exchange rates, volatility), discounting expected future
Fair value is defined as the price that would be received to
cash flows on the basis of the market yield curve and tran-
sell an asset or paid to transfer a liability. The best estimate
slating amounts in currencies other than the euro using
is the market price, i.e. its current price, publicly available
exchange rates provided by the European Central Bank.
and effectively traded on an active, liquid market.
For contracts involving commodities, the measurement is
The fair value of assets and liabilities is categorized into a
conducted using prices, where available, for the same in-
fair value hierarchy that provides three levels defined as
struments on both regulated and unregulated markets.
follows on the basis of the inputs and valuation techniques
In accordance with the new international accounting stan-
used to measure fair value:
dards, in 2013 the Group included a measurement of credit
> Level 1: quoted prices (unadjusted) in active markets for
risk, both of the counterparty (Credit Valuation Adjustment
identical assets or liabilities to which the Company has
or CVA) and its own (Debit Valuation Adjustment or DVA),
access at the measurement date;
in order to adjust the fair value of financial instruments for
> Level 2: inputs other than quoted prices included within
the corresponding amount of counterparty risk.
Level 1 that are observable for the asset or liability, either
More specifically, the Group measures CVA/DVA using a
directly (that is, as prices) or indirectly (that is, derived
Potential Future Exposure valuation technique for the net
from prices);
exposure of the position and subsequently allocating the
> Level 3: inputs for the asset or liability that are not based
adjustment to the individual financial instruments that
on observable market data (that is, unobservable inputs).
make up the overall portfolio. All of the inputs used in this
In this note, the relevant information are provided in order
technique are observable on the market. Changes in the
to assess the following:
assumptions underlying the estimated inputs could have
> for assets and liabilities that are measured at fair value
an effect on the fair value reported for such instruments.
on a recurring or non-recurring basis in the balance sheet
The notional amount of a derivative contract is the amount
after initial recognition, the valuation techniques and in-
on which cash flows are exchanged. This amount can be
puts used to develop those measurements; and
expressed as a value or a quantity (for example tons, con-
> for recurring fair value measurements using significant
verted into euros by multiplying the notional amount by
unobservable inputs (Level 3), the effect of the measu-
the agreed price).
rements on profit or loss or other comprehensive income
Amounts denominated in currencies other than the euro
for the period.
For this purpose:
are converted into euros at the exchange rate provided by
the European Central Bank.
> recurring fair value measurements are those that IFRSs
The notional amounts of derivatives reported here do not
require or permit in the balance sheet at the end of each
necessarily represent amounts exchanged between the
reporting period;
parties and therefore are not a measure of the Company’s
> non-recurring fair value measurements are those that
credit risk exposure.
IFRSs require or permit in the balance sheet in particular
For listed debt instruments, the fair value is given by of-
circumstances.
ficial prices. For unlisted instruments the fair value is de-
termined using appropriate valuation techniques for each
The fair value of derivative contracts is determined using
category of financial instrument and market data at the
the official prices for instruments traded on regulated
closing date of the year, including the credit spreads of
markets. The fair value of instruments not listed on a regu-
Enel SpA.
lated market is determined using valuation methods ap-
346
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS 34.1 Assets measured at fair value in the balance sheet
The following table shows, for each class of assets measu-
reporting period and the level in the fair value hierarchy into
red at fair value on a recurring or non-recurring basis in the
which the fair value measurements are categorized.
balance sheet, the fair value measurement at the end of the
Millions of euro
Non-current assets
Current assets
Fair value
at Dec. 31,
2014
Notes
Level 1
Level 2
Level 3
Fair value
at Dec. 31,
2014
Level 1
Level 2
Level 3
Derivatives
Cash flow hedge
derivatives:
- on foreign exchange risk 31.1.2
Total
Fair value hedge
derivatives:
- on interest rate risk
31.1.2
Total
Fair value through profit
or loss:
- on interest rate risk
31.1.2
- on foreign exchange risk 31.1.2
Total
TOTAL
656
656
40
40
376
907
1,283
1,979
-
-
-
-
-
-
-
-
656
656
40
40
376
907
1,283
1,979
-
-
-
-
-
-
-
-
-
-
-
-
2
278
280
280
-
-
-
-
-
-
-
-
-
-
-
-
2
278
280
280
-
-
-
-
-
-
-
-
34.2 Liabilities measured at fair value in the balance sheet
The following table reports, for each class of liabilities me-
end of the reporting period and the level in the fair value
asured at fair value on a recurring or non-recurring basis
hierarchy into which the fair value measurements are ca-
in the balance sheet, the fair value measurement at the
tegorized.
Millions of euro
Non-current liabilities
Current liabilities
Fair value
at Dec. 31,
2014
Notes
Level 1
Level 2
Level 3
Fair value
at Dec. 31,
2014
Level 1
Level 2
Level 3
Derivatives
Cash flow hedge
derivatives:
- on interest rate risk
31.2.3
- on foreign exchange risk 31.2.3
Total
Fair value through profit
or loss:
- on interest rate risk
31.2.3
- on foreign exchange risk 31.2.3
Total
TOTAL
159
1,030
1,189
384
911
1,295
2,484
-
-
-
-
-
-
-
159
1,030
1,189
384
911
1,295
2,484
-
-
-
-
-
-
-
1
-
1
75
283
358
359
-
-
-
-
-
-
-
1
-
1
75
283
358
359
-
-
-
-
-
-
-
347
34.3 Liabilities not measured at fair value in the balance sheet
The following table shows, for each class of liabilities not
the reporting period and the level in the fair value hierarchy
measured at fair value in the balance sheet but for which
into which the fair value measurements are categorized.
the fair value shall be disclosed, the fair value at the end of
Millions of euro
LIABILITIES
Fair value at Dec. 31,
2014
Notes
Level 1
Level 2
Level 3
Bonds:
- fixed rate
- floating rate
Total
TOTAL
31.2.1
31.2.1
18,166
4,311
22,477
22,477
18,166
3,048
21,214
21,214
-
1,263
1,263
1,263
-
-
-
-
35. Related parties
Related parties have been identified on the basis of the
performed in accordance with procedural and substantive
provisions of international accounting standards and the
propriety.
applicable CONSOB measures.
In November 2010, the Board of Directors of Enel SpA
The transactions Enel SpA entered into with its subsidiaries
approved a procedure governing the approval and exe-
mainly involved the provision of services, the sourcing and
cution of transactions with related parties carried out by
employment of financial resources, insurance coverage,
Enel SpA directly or through subsidiaries. The procedure
human resource management and organization, legal and
(available at http://www.enel.com/en-GB/governance/
corporate services, and the planning and coordination of
rules/related_parties/) sets out rules designed to ensure
tax and administrative activities.
the transparency and procedural and substantive proprie-
All the transactions are part of routine operations, are
implementation of the provisions of Article 2391-bis of the
carried out in the interest of the Company and are settled
Italian Civil Code and the implementing regulations issued
on an arm’s length basis, i.e. on the same market terms as
by CONSOB. In 2014, no transactions were carried out for
agreements entered into between two independent par-
which it was necessary to make the disclosures required in
ty of transactions with related parties. It was adopted in
ties.
the rules on transactions with related parties adopted with
CONSOB Resolution 17221 of March 12, 2010, as amended
Finally, the Enel Group’s corporate governance rules,
with Resolution 17389 of June 23, 2010.
which are discussed in greater detail in the Report on Cor-
porate Governance and Ownership Structure available on
The following tables summarize commercial, financial and
the Company’s website (www.enel.com), establish condi-
other relationships between the Company and related par-
tions for ensuring that transactions with related parties are
ties.
348
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS Commercial and other relationships
2014
Millions of euro
Receivables
Payables
Goods
Services
Goods
Services
at Dec. 31, 2014 at Dec. 31, 2014
2014
2014
Costs
Revenue
Subsidiaries
Endesa Distribución Eléctrica SL
Endesa Generación SA
Endesa Latinoamérica SA
Endesa SA
Enel Distributie Banat SA
Enel Distributie Dobrogea SA
Enel Distributie Muntenia SA
Enel Distribuzione SpA
Enel Energia SpA
Enel Iberoamérica SL
Enel France Sas
Enel Green Power Partecipazioni
Speciali Srl
Enel Green Power SpA
Enel Green Power España SL
Enel Green Power North America Inc.
Enel Ingegneria e Ricerca SpA
Enel Longanesi Developments Srl
Enel Russia OJSC
Enel Produzione SpA
Enel Romania Srl
Enel Italia Srl
Enel Servizio Elettrico SpA
Enel Sole Srl
Enel Trade SpA
Enel.Factor SpA
Enel Insurance NV
Enel.si Srl
Enelpower SpA
Endesa Energía SA
Gas y Electricidad Generación SAU
Nuove Energie Srl
Slovenské elektrárne AS
Sviluppo Nucleare Italia Srl
Unión Eléctrica de Canarias
Generación SAU
Total
Other related parties
GSE
Total
TOTAL
16
(2)
-
-
-
-
1
146
109
1
2
-
41
-
1
8
-
16
88
4
22
6
3
18
-
1
7
-
6
-
-
17
-
-
511
1
1
512
-
-
1
4
-
-
-
289
4
-
1
2
10
-
1
3
1
4
169
-
47
74
-
105
13
-
2
3
-
-
1
-
3
-
737
1
1
738
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1
5
-
-
-
-
-
-
-
-
-
-
-
(1)
-
1
-
-
49
-
-
-
-
-
-
-
-
-
-
-
3
-
58
-
-
58
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
16
3
(3)
1
1
1
1
73
59
1
-
-
21
(2)
-
2
-
4
33
-
1
8
4
3
-
1
1
-
6
1
1
6
-
2
245
-
-
245
349
2013
Millions of euro
Receivables
Payables
Goods
Services
Goods
Services
at Dec. 31, 2013 at Dec. 31, 2013
2013
2013
Costs
Revenue
Subsidiaries
Endesa Distribución Eléctrica SL
Endesa Generación SA
Endesa Latinoamérica SA
Endesa SA
Enel Distributie Banat SA
Enel Distributie Dobrogea SA
Enel Distributie Muntenia SA
Enel Distribuzione SpA
Enel Energia SpA
Enel Iberoamérica SL
Enel France Sas
Enel Green Power International BV
Enel Green Power Partecipazioni Speciali Srl
Enel Green Power SpA
Enel Green Power Latin America BV
Enel Green Power North America Inc.
Enel Ingegneria e Ricerca SpA
Enel Investment Holding BV
Enel Longanesi Developments Srl
Enel M@P Srl
Enel Russia OJSC
Enel Produzione SpA
Enel Romania Srl
Enel Servicii Comune SA
Enel Italia Srl
Enel Servizio Elettrico SpA
Enel Sole Srl
Enel Trade SpA
Enel Unión Fenosa Renovables SA
Enel.Factor SpA
Enel Insurance NV
Enel.si Srl
Enelpower SpA
Endesa Energía SA
Gas y Electricidad Generación SAU
Nuove Energie Srl
Slovenské elektrárne AS
Sviluppo Nucleare Italia Srl
Unión Eléctrica de Canarias Generación SAU
Total
Other related parties
GSE
Fondazione Centro Studi Enel
Total
TOTAL
350
15
5
10
1
2
1
3
209
59
-
2
1
-
43
4
1
12
3
-
-
14
71
10
3
29
18
2
42
2
-
-
19
-
-
-
3
11
-
8
-
-
1
13
-
-
-
442
4
1
-
-
1
3
-
1
8
-
1
1
3
175
1
-
55
160
5
120
-
4
-
4
3
-
-
-
-
1
-
603
1,007
1
-
1
-
-
-
604
1,007
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1
6
-
-
-
4
-
-
-
-
-
-
-
1
1
-
-
-
1
1
1
-
59
-
-
-
-
-
-
-
-
-
-
-
-
4
-
79
-
-
-
79
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15
4
9
1
1
1
2
81
52
-
1
-
-
21
-
-
3
1
-
-
5
25
1
-
11
11
3
6
-
-
1
1
-
5
1
1
7
-
2
272
-
1
1
273
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS Financial relationships
2014
Millions of euro
Receivables
Payables
Guarantees
Costs
Revenue
Dividends
at Dec. 31, 2014
2014
Subsidiaries
Concert Srl
Enel Distribuzione SpA
Enel Energia SpA
Enel Iberoamérica SL
-
218
11
2
2
1,258
-
2
-
4,005
1,009
-
-
1
-
-
Enel Finance International NV
1,714
3,105
25,522
750
Enel France Sas
Enel Green Power International BV
Enel Green Power México S de RL
de Cv
Enel Green Power North America Inc.
Enel Green Power Romania Srl
Enel Green Power SpA
Enel Ingegneria e Ricerca SpA
Enel Investment Holding BV
Enel Longanesi Developments Srl
Enel M@P Srl
Enel Produzione SpA
Enel Italia Srl
Enel Servizio Elettrico SpA
Enel Sole Srl
Enel Trade Romania Srl
Enel Trade SpA
Enel.Factor SpA
Enel.Newhydro Srl
Enel.si Srl
Enelpower SpA
Marcinelle Energie SA
Nuove Energie Srl
PH Chucas SA
Sviluppo Nucleare Italia Srl
Total
Other related parties
CESI SpA
Total
TOTAL
-
98
23
14
5
67
98
1
27
1
137
102
1,242
41
-
1,231
160
-
5
-
-
5
7
-
5,209
-
-
-
-
-
-
-
9
-
88
-
-
112
200
-
-
-
239
-
16
-
34
-
-
-
11
5,076
-
-
26
-
-
45
-
1,543
67
365
1
5
2,691
91
1,660
111
6
1,424
-
6
36
1
9
86
-
4
-
1
-
2
-
3
-
-
-
-
129
-
-
-
-
286
-
-
-
-
-
-
-
-
38,713
1,172
654
1,817
-
-
-
-
-
-
1
1
5,209
5,076
38,713
1,172
654
1,818
351
-
189
8
2
173
-
32
1
1
-
71
5
3
-
-
35
6
8
3
-
115
2
-
-
-
-
-
-
-
-
1,373
16
-
-
-
-
-
-
-
109
-
-
-
-
223
7
85
-
-
-
3
-
-
1
-
-
-
-
Enel Finance International NV
1,326
324
26,869
138
747
Receivables
Payables
Guarantees
Costs
Revenue
Dividends
at Dec. 31, 2013
2013
-
133
160
138
1
1,012
-
-
-
4,748
1,015
-
-
33
-
-
-
56
18
12
-
3
-
-
306
109
1
23
2
214
102
1,064
124
-
1,367
248
-
6
-
-
1
-
35
-
-
1
-
-
6
-
5
-
-
79
167
-
-
-
39
-
13
-
37
-
4
5
-
10
38
-
-
40
1,475
81
300
-
6
2,806
86
1,399
119
19
1,522
-
6
32
1
11
86
-
-
2
-
3
-
2
12
-
-
-
-
-
2
1
2
18
1
2
-
-
31
106
-
-
-
-
5
8
2
-
91
180
-
-
-
-
-
-
-
-
-
3
-
-
-
-
1
-
1
-
-
1,625
44
-
-
-
-
-
-
89
-
-
-
-
222
40
-
-
-
-
4
-
-
3
-
-
-
-
-
5,362
1,703
40,661
310
1,165
2,027
-
-
-
-
-
-
-
5
5
-
-
-
-
-
-
1
-
1
5,362
1,703
40,666
310
1,165
2,028
2013
Millions of euro
Subsidiaries
Concert Srl
Enel Distribuzione SpA
Enel Energia SpA
Enel Iberoamérica SL
Enel France Sas
Enel Green Power International BV
Enel Green Power México S de RL de Cv
Enel Green Power North America Inc.
Enel Green Power SpA
Enel Ingegneria e Ricerca SpA
Enel Investment Holding BV
Enel Longanesi Developments Srl
Enel M@P Srl
Enel Produzione SpA
Enel Italia Srl
Enel Servizio Elettrico SpA
Enel Sole Srl
Enel Trade Romania Srl
Enel Trade SpA
Enel.Factor SpA
Enel.Newhydro Srl
Enel.si Srl
Enelpower SpA
Marcinelle Energie SA
Nuove Energie Srl
Pragma Energy SA
SE Hydropower Srl
Sviluppo Nucleare Italia Srl
Total
Other related parties
CESI SpA
Elcogas SA
Total
TOTAL
352
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS The impact of transactions with related parties on the balance sheet, income statement and cash flows is reported in the
following tables.
Impact on balance sheet
Millions of euro
Total Related parties
% of total
Total Related parties
% of total
at Dec. 31, 2014
at Dec. 31, 2013
Assets
Derivatives - non-current
Other non-current financial assets
Other non-current assets
Trade receivables
Derivatives - current
Other current financial assets
Other current assets
Liabilities
Long-term borrowings
Derivatives - non-current
Other non-current liabilities
Short-term borrowings
Current portion of long-term borrowings
Trade payables
Derivatives - current
Other current financial liabilities
Other current liabilities
Impact on income statement
1,979
146
467
132
280
5,040
244
17,288
2,484
287
4,746
2,363
139
359
694
975
819
117
177
127
50
4,223
208
-
469
287
4,319
-
55
234
54
396
41.4%
80.1%
37.9%
96.2%
17.9%
83.8%
85.2%
1,355
165
483
216
177
5,280
319
-
17,764
18.9%
100.0%
91.0%
-
39.6%
65.2%
7.8%
40.6%
2,098
283
1,653
1,061
212
237
587
709
972
117
199
209
104
4,169
196
-
70
281
1,531
-
83
72
30
643
71.7%
70.9%
41.2%
96.8%
58.8%
79.0%
61.4%
-
3.3%
99.3%
92.6%
-
39.2%
30.4%
5.1%
90.7%
Millions of euro
Total Related parties
% of total
Total Related parties
% of total
Revenue
Electricity purchases and consumables
Services and other operating expenses
Income from equity investments
Financial income on derivatives
Other financial income
Financial expense on derivatives
Other financial expense
Impact on cash flows
2014
2013
246
2
324
1,818
2,190
222
1,954
1,377
245
-
58
99.6%
-
17.9%
1,818
100.0%
460
194
1,169
3
21.0%
87.4%
59.8%
0.2%
275
6
334
2,028
1,492
320
1,601
1,001
273
-
79
99.3%
-
23.7%
2,028
100.0%
938
227
185
125
62.9%
70.9%
11.6%
12.5%
Millions of euro
Total Related parties
% of total
Total Related parties
% of total
2014
2013
Cash flows from operating activities
926
667
72.0%
1,669
28
1.7%
Cash flows from investing/disinvesting
activities
Cash flows from financing activities
(11)
2,934
(10)
2,682
90.9%
91.4%
(113)
(4,894)
(113)
100.0%
(3,751)
76.6%
353
36. Contractual commitments and guarantees
Millions of euro
Sureties and guarantees given:
- third parties
- subsidiaries
- associates and others
Total
at Dec. 31, 2014
at Dec. 31, 2013
Change
405
38,713
-
39,118
439
40,661
5
41,105
(34)
(1,948)
(5)
(1,987)
Sureties granted to third parties regard guarantees issued by
for obligations under the electricity purchase contract;
the Parent Company as part of the disposal to third parties
> €720 million issued to INPS on behalf of various Group
of assets owned by Enel SpA or in the interest of its subsidia-
companies whose employees elected to participate in the
ries and they essentially regard the sale of real estate assets
structural staff reduction plan (Article 4 of Law 92/2012);
(€404 million). The guarantee is meant to ensure the per-
> €545 million issued as counter-guarantees in favor of
formance of contractual obligations, specifically payments
the banks that guaranteed the Energy Markets Operator
due and the commitment to renew at least 50% of the long-
(GME) on behalf of Enel Trade and Enel Produzione;
term lease agreements for 6 years.
> €458 million issued in favor of Terna on behalf of Enel Di-
stribuzione, Enel Trade, Enel Produzione and Enel Energia
Sureties issued on behalf of subsidiaries include:
in respect of agreements for the electricity transmission
> €23,135 million issued on behalf of Enel Finance Inter-
service;
national securing bonds denominated in dollars, pounds,
> €365 million issued to financial counterparties on behalf
euros and yen as part of the €35 billion Global Medium-
of Enel Finance International securing bonds as part of
Term Notes program;
the €35 billion Global Medium-Term Notes program;
> €3,374 million issued to the European Investment Bank
> €337 million issued in favor of Snam Rete Gas on behalf
(EIB) for loans granted to Enel Distribuzione, Enel Produ-
of Enel Trade for gas transport capacity;
zione and Enel Green Power SpA;
> €50 million issued to E.ON on behalf of Enel Trade for tra-
> €2,387 million issued on behalf of Enel Finance Interna-
ding on the electricity market;
tional securing a euro commercial paper program;
> €50 million issued to RWE Supply & Trading Netherlands
> €1,957 million issued to the tax authorities in respect of
BV on behalf of Enel Trade for electricity purchases;
participation in the Group VAT procedure on behalf of
> €32 million issued to Wingas GmbH & CO.KG on behalf of
Enel.Newhydro, Enel Produzione, Enelpower, Enel Servi-
Enel Trade for the supply of gas;
zio Elettrico, Nuove Energie, Enel Ingegneria e Ricerca,
> €2,741 million issued to various beneficiaries as part of
Enel M@p, Enel.si, Enel Green Power, Enel Sole, Enel Lon-
financial support activities by the Parent Company on be-
ganesi Developments, Enel Stoccaggi and Energy Hydro
half of subsidiaries, as well as €5 million issued on behalf
Piave;
of Enel.Newhydro as part of the disposal of the Ismes bu-
> €1,407 million in favor of Cassa Depositi e Prestiti issued
siness unit.
on behalf of Enel Distribuzione, which received the Enel
Grid Efficiency II loan;
In its capacity as the Parent Company, Enel SpA has also
> €1,150 million issued by Enel SpA to the Acquirente Uni-
granted letters of patronage to a number of Group compa-
co (Single Buyer) on behalf of Enel Servizio Elettrico SpA
nies, essentially for assignments of receivables.
354
ENEL ANNUAL REPORT 2014SEPARATE FINANCIAL STATEMENTS 37. Contingent liabilities and assets
Please see note 49 to the consolidated financial statements for information on contingent liabilities and assets.
38. Events after the reporting date
Please see note 50 to the consolidated financial statements for information on events after the reporting date.
39. Share-based incentive plans
Please see note 51 to the consolidated financial statements for information on share-based incentive plans.
40. Fees of audit firm pursuant to Article
149-duodecies of the CONSOB “Issuers
Regulation”
Fees paid in 2014 to the audit firm and entities belonging to its network for services are summarized in the following table,
pursuant to the provisions of Article 149-duodecies of the CONSOB “Issuers Regulation”.
Type of service
Entity providing the service
Fees (millions of euro)
Enel SpA
Auditing
of which:
- Reconta Ernst & Young SpA
- Entities of Ernst & Young SpA network
Certification services
of which:
- Reconta Ernst & Young SpA
- Entities of Ernst & Young SpA network
Total
Subsidiaries of Enel SpA
Auditing
of which:
Certification services
of which:
- Reconta Ernst & Young SpA
- Entities of Ernst & Young SpA network
- Reconta Ernst & Young SpA
- Entities of Ernst & Young SpA network
Total
TOTAL
1.6
-
0.5
-
2.1
1.7
6.3
0.5
5.3
13.8
15.9
355
Declaration of the Chief Executive
Officer and the officer responsible
for the preparation of corporate
financial reports
356
DECLARATION OF THE CHIEF EXECUTIVE OFFICER AND THE OFFICER RESPONSIBLE
ENEL ANNUAL REPORT 2014 Declaration of the Chief Executive Officer and the officer responsible for the
preparation of the financial reports of Enel SpA at December 31, 2014, pur-
suant to the provisions of Article 154-bis, paragraph 5, of Legislative Decree 58
of February 24, 1998 and Article 81-ter of CONSOB Regulation 11971 of May
14, 1999
1. The undersigned Francesco Starace and Alberto De Paoli, in their respective capacities as Chief Exe-
cutive Officer and officer responsible for the preparation of the financial reports of Enel SpA, hereby
certify, taking account of the provisions of Article 154-bis, paragraphs 3 and 4, of Legislative Decree
58 of February 24, 1998:
a. the appropriateness with respect to the characteristics of the Company and
b. the effective adoption of the administrative and accounting procedures for the preparation of
the separate financial statements of Enel SpA in the period between January 1, 2014 and Decem-
ber 31, 2014.
2.
In this regard, we report that:
a. the appropriateness of the administrative and accounting procedures used in the preparation of
the separate financial statements of Enel SpA has been verified in an assessment of the internal
control system for financial reporting. The assessment was carried out on the basis of the guide-
lines set out in the “Internal Controls - Integrated Framework” issued by the Committee of Spon-
soring Organizations of the Treadway Commission (COSO);
b. the assessment of the internal control system for financial reporting did not identify any material
issues.
3.
In addition, we certify that separate financial statements of Enel SpA at December 31, 2014:
a. have been prepared in the compliance with the international accounting standards recognized in
the European Union pursuant to Regulation (EC) 1606/2002 of the European Parliament and of
the Council of July 19, 2002;
b. correspond to the information in the books and other accounting records;
c. provide a true and fair representation of the performance and financial position of the issuer.
4. Finally, we certify that the report on operations, included in the Annual Report 2014 and accompa-
nied by the financial statements of Enel SpA at December 31, 2014, contains a reliable analysis of
operations and performance, as well as the situation of the issuer, together with a description of the
main risks and uncertainties to which it is exposed.
Rome, March 18, 2015
Francesco Starace
Alberto De Paoli
Chief Executive Officer of Enel SpA
Officer responsible for the preparation
of the financial reports of Enel SpA
357
358
ENEL ANNUAL REPORT 2014REPORTS Reports
359
Report of the Board of Auditors
to the Shareholders’ Meeting
of Enel SpA
360
ENEL ANNUAL REPORT 2014REPORTS Report of the Board of Auditors to the Shareholders’ Meeting of Enel SpA
(pursuant to Article 153 of Legislative Decree 58/1998)
Shareholders,
During the year ended December 31, 2014 we performed the oversight activities envisaged by law at Enel
SpA (hereinafter also “Enel” or the “Company”). In particular, pursuant to the provisions of Article 149, pa-
ragraph 1, of Legislative Decree 58 of February 24, 1998 (hereinafter the “Consolidated Law on Finance”)
and Article 19, paragraph 1 of Legislative Decree 39 of January 27, 2010 (hereinafter “Decree 39/2010”) we
monitored:
> compliance with the law and the corporate bylaws as well as compliance with the principles of sound
administration in the performance of the Company's business;
> the Company's financial reporting process and the adequacy of the administrative and accounting sy-
stem, as well as the reliability of the latter in representing operational events;
> the statutory audit of the annual statutory and consolidated accounts and the independence of the
audit firm;
> the adequacy and effectiveness of the internal control and risk management system;
> the adequacy of the organizational structure of the Company, within the scope of our responsibilities;
> the implementation of the corporate governance rules as provided for by the Corporate Governance
Code for Listed Companies (hereinafter, the “Corporate Governance Code”), which the Company has
adopted;
> the appropriateness of the instructions given by the Company to its subsidiaries to enable it to meet
statutory market disclosure requirements.
In performing our checks and assessments of the above issues, we did not find any particular issues to report.
In compliance with the instructions issued by CONSOB with Communication DEM/1025564 of April 6, 2001,
as amended, we report the following:
> we monitored compliance with the law and the bylaws and we have no issues to report;
> on a quarterly basis, we received adequate information from the Chief Executive Officer, as well as
through our participation in the meetings of the Board of Directors of Enel, on activities performed,
general developments in operations and the outlook, and on transactions with the most significant
impact on performance or the financial position carried out by the Company and its subsidiaries. We re-
port that the actions approved and implemented were in compliance with the law and the bylaws and
were not manifestly imprudent, risky, in potential conflict of interest or in contrast with the resolutions
of the Shareholders’ Meeting or otherwise prejudicial to the integrity of the Company’s assets. For a
discussion of the features of the most significant transactions, please see the report on operations ac-
companying the separate financial statements of the Company for 2014 and the consolidated financial
statements of the Enel Group for 2014 (in the section “Significant events in 2014”);
> we did not find any atypical or unusual transactions conducted with third parties, Group companies or
other related parties;
> in the section “Related parties” of the notes to the separate 2014 financial statements of the Company,
the directors describe the main related-party transactions – identified on the basis of international ac-
counting standards and the instructions of CONSOB – carried out by the Company, to which readers
may refer for details on the transactions and their financial impact. They also detail the procedures
adopted to ensure that related-party transactions are carried out in accordance with the principles of
361
transparency and procedural and substantive fairness. The transactions were carried out in compliance
with the approval and execution processes set out in the related procedure – adopted in compliance
with the provisions of Article 2391-bis of the Italian Civil Code and the implementing regulations issued
by CONSOB – described in the Report on Corporate Governance and Ownership Structure for 2014. All
transactions with related parties reported in the notes to the separate 2014 financial statements of the
Company were executed as part of ordinary operations in the interest of the Company and settled on
market terms and conditions;
> the Company declares that it has prepared its statutory financial statements for 2014 on the basis of
international accounting standards (IAS/IFRS) – and the interpretations issued by the IFRIC and the SIC
– endorsed by the European Union pursuant to Regulation (EC) 1606/2002 and in force at the close
of 2014, as well as the provisions of Legislative Decree 38 of February 28, 2005 and its related imple-
menting measures, as it did the previous year. The Company’s separate financial statements for 2014
have been prepared on a going-concern basis using the cost method, with the exception of items that
are measured at fair value under the IFRS-EU, as indicated in the accounting policies for the individual
items of the consolidated financial statements. The notes to the Company’s separate financial state-
ments also refer readers to the consolidated financial statements for information on the accounting
standards and measurement criteria adopted, with the exception of equity investments in subsidiaries
and associates, which are carried in the Company’s separate financial statements at purchase costs
adjusted for any impairment losses. The notes to the Company’s separate financial statements also
refer readers to the consolidated financial statements for information on recently issued accounting
standards. The separate financial statements for 2014 of the Company were audited by the indepen-
dent auditors Reconta Ernst & Young SpA, which issued an unqualified opinion, including with regard
to the consistency of the report on operations with the financial statements, pursuant to Article 14 of
Decree 39/2010;
> the Company declares that it has also prepared the consolidated financial statements of the Enel Group
for 2014 on the basis of international accounting standards (IAS/IFRS) – and the interpretations issued
by the IFRIC and the SIC – endorsed by the European Union pursuant to Regulation (EC) 1606/2002 and
in force at the close of 2014, as well as the provisions of Legislative Decree 38 of February 28, 2005 and
its related implementing measures, as it did the previous year. The 2014 consolidated financial state-
ments of the Enel Group are also prepared on a going-concern basis using the cost method, with the
exception of items that are measured at fair value under the IFRS-EU (as indicated in the discussion of
measurement criteria for the individual items) and non-current assets (or disposal groups) classified as
held for sale, which are measured at the lower of carrying amount and fair value less costs to sell. The
notes to the consolidated financial statements provide a detailed discussion of the accounting stan-
dards and measurement criteria adopted. As regards recently issued accounting standards, the notes
to the consolidated financial statements discuss (i) new standards applied in 2014, which according to
the notes did not have a material impact in the year under review, with the exception of the amended
standard “IFRS 11 - Joint arrangements”, “IAS 28 - Investments in associates and joint ventures” and “IAS
32 - Financial instruments: presentation - Offsetting financial assets and financial liabilities”, whose effects
– including on the comparative figures for the previous year – were discussed in the notes to the finan-
cial statements; and (ii) standards that will apply in the future. The consolidated financial statements for
2014 of the Enel Group were audited by the independent auditors Reconta Ernst & Young SpA, which
issued an unqualified opinion, including with regard to the consistency of the report on operations with
the consolidated financial statements, pursuant to Article 14 of Decree 39/2010.
Under the terms of its engagement, Reconta Ernst & Young SpA also issued unqualified opinions on the
financial statements for 2014 of the most significant Italian companies of the Enel Group. Moreover, du-
ring periodic meetings with the representatives of the audit firm, Reconta Ernst & Young SpA, the latter
did not raise any issues concerning the reporting packages of the main foreign companies of the Enel
362
ENEL ANNUAL REPORT 2014REPORTS Group, selected by them on the basis of the work plan established for the auditing of the consolidated
financial statements of the Enel Group, that would have a sufficiently material impact to be reported in
the opinion on those financial statements;
> taking due account of the recommendations of the European Securities and Markets Authority, on
January 21, 2013, in order to ensure greater transparency concerning the methods used by listed com-
panies in testing goodwill for impairment, in line with the recommendations contained in the joint
Bank of Italy - CONSOB - ISVAP document 4 of March 3, 2010, and in the light of indications of CONSOB
in its Communication 3907 of January 19, 2015, the compliance of the impairment testing procedure
with the provisions of IAS 36 was expressly approved by the Board of Directors of the Company, having
obtained a favorable opinion in this regard from the Control and Risk Committee in February 2015, i.e.
prior to the date of approval of the financial statements for 2014;
> we examined the Board of Directors’ proposal for the allocation of net income for 2014 and the distri-
bution of available reserves and have no comments in this regard;
> we note that the Board of Directors of the Company certified, following appropriate checks by the
Control and Risk Committee, that as at the date on which the 2014 financial statements were appro-
ved, the Enel Group continued to meet the conditions established by CONSOB (set out in Article 36 of
the Market Rules, approved with Resolution 16191 of October 29, 2007 as amended) concerning the
accounting transparency and adequacy of the organizational structures and internal control systems
that subsidiaries established and regulated under the law of non-EU countries must comply with so that
Enel shares can continue to be listed on regulated markets in Italy;
> we monitored, within the scope of our responsibilities, the adequacy of the organizational structure of
the Company (and the Enel Group as a whole), obtaining information from department heads and in
meetings with the boards of auditors or equivalent bodies of a number of the main Enel Group compa-
nies in Italy and abroad, for the purpose of the reciprocal exchange of material information. During the
second Half of 2014, a new organizational structure based on a matrix of Divisions and geographical
areas was implemented in the Enel Group. It is organized into: (i) Divisions, which are responsible for
managing and developing assets, optimizing their performance and the return on capital employed in
the various geographical areas in which the Group operates. The Divisions comprise: Global Infrastructure
and Networks, Global Generation, Global Trading, Renewable Energy, and Upstream Gas; (ii) regions and
countries, which are responsible for managing relationships with local institutional bodies and regulatory
authorities, as well as selling electricity and gas, in each of the countries in which the Group is present,
while also providing staff and other service support to the Divisions. Regions and countries comprise: Italy,
Iberia, Latin America, Eastern Europe; (iii) Global service functions, which are responsible for managing
information and communication technology activities and procurement at the Group level; and (iv) Hol-
ding company functions, which are responsible for managing governance processes at the Group level.
They include: Administration, Finance and Control, Human Resources and Organization, Communication,
Legal and Corporate Affairs, Audit, European Union Affairs, and Innovation and Sustainability. The Board
of Auditors feels that the organizational system described above is adequate to support the strategic de-
velopment of the Company and the Enel Group and is consistent with control requirements;
> during meetings with the boards of auditors or equivalent bodies of a number of the Group’s main
companies in Italy and abroad, no material issues emerged that would require reporting here;
> we monitored the independence of the audit firm Reconta Ernst & Young SpA, having received from
them specific written confirmation that they met that requirement (pursuant to the provisions of Article
17, paragraph 9, letter a) of Decree 39/2010) and having discussed the substance of that declaration
with the audit partner. In this regard, we also monitored – as provided for under Article 19, paragraph
1(d), of Decree 39/2010 – the nature and the scale of non-audit services provided to the Company and
other Enel Group companies by Reconta Ernst & Young SpA and the entities belonging to its network,
the fees for which are reported in the notes to the financial statements of the Company. Following our
363
examinations, the Board of Auditors feels that there are no critical issues concerning the independence
of the audit firm Reconta Ernst & Young SpA. We held periodic meetings with the representatives of the
audit firm, pursuant to Article 150, paragraph 3, of the Consolidated Law on Finance, and no material
issues emerged that would require mention in this report.
As regards the provisions of Article 19, paragraph 3, of Decree 39/2010, Reconta Ernst & Young SpA
provided the Board of Auditors with the report for 2014 “on key issues emerging during the statuto-
ry audit”, which did not find any significant shortcomings in the internal control system concerning
financial reporting. The audit firm also reported that, as it performed its engagement, it provided sug-
gestions concerning a number of issues that, after being agreed with the competent units of the Com-
pany, enabled improvements to be implemented. The audit firm also reported that a management
letter for 2014 is being prepared;
> we monitored the financial reporting process, the appropriateness of the administrative and accounting
system and its reliability in representing operational events, as well as compliance with the principles
of sound administration in the performance of the Company's business and we have no comments in
that regard. We conducted our checks by obtaining information from those who served in 2014 as head
of the Administration, Finance and Control department (taking due account of their role as the officer
responsible for the preparation of the Company’s financial reports), examining Company documenta-
tion and analyzing the findings of the examination performed by Reconta Ernst & Young SpA. The Chief
Executive Officer and the officer responsible for the preparation of the financial reports of Enel issued
a statement (regarding the Company’s 2014 financial statements) certifying (i) the appropriateness
with respect to the characteristics of the Company and the effective adoption of the administrative
and accounting procedures used in the preparation of the financial statements; (ii) the compliance of
the content of the financial reports with international accounting standards endorsed by the European
Union pursuant to Regulation (EC) 1606/2002; (iii) the correspondence of the financial statements with
the information in the books and other accounting records and their ability to provide a true and fair
representation of the performance and financial position of the Company; and (iv) that the report on
operations accompanying the financial statements contains a reliable analysis of operations and perfor-
mance, as well as the situation of the issuer, together with a description of the main risks and uncertain-
ties to which it is exposed. The statement also affirmed that the appropriateness of the administrative
and accounting procedures used in the preparation of the financial statements of the Company had
been verified in an assessment of the internal control system for financial reporting (supported by the
findings of the independent monitoring performed by the Company’s Audit department) and that the
assessment of the internal control system did not identify any material issues. An analogous statement
was prepared for the consolidated financial statements for 2014 of the Enel Group;
> we monitored the adequacy and effectiveness of the internal control system, primarily through periodic
meetings with those who served in 2014 as head of the Audit department of the Company and through
a number of joint meetings with the Control and Risk Committee as well as with the participation of the
Chairman of the Board of Auditors in the other meetings of the Control and Risk Committee and the
subsequent examination of the associated documentation during those meetings. In the light of our
examination and in the absence of significant issues, the internal control and risk management system
can be considered adequate and effective. In February 2015, the Board of Directors of the Company
expressed an analogous assessment of the situation and also noted that the main risks associated with
the strategic targets set out in the 2015-2019 business plan were compatible with the management of
the Company in a manner consistent with those targets;
> during the year, the Board of Auditors received one report of censurable facts pursuant to Article 2408
of the Italian Civil Code from a shareholder, who complained about restrictions on the procedures for
submitting questions before the Shareholders’ Meeting of May 22, 2014. We responded appropriately
to the shareholder, demonstrating the Company’s full compliance with the law and the specious nature
364
ENEL ANNUAL REPORT 2014REPORTS of the complaint. We also received two complaints from customers of Italian companies of the Enel
Group containing allegations of service problems or breach of contract in the performance of electricity
supply and distribution activities. The Board of Auditors asked the competent Company units to con-
duct an appropriate investigation, which found no irregularities to report;
> we monitored the effective implementation of the Corporate Governance Code, which the Company
has adopted, verifying the compliance of Enel’s governance arrangements with the recommendations
of the Code. Detailed information on the Company’s corporate governance system can be found in the
report on corporate governance and ownership structure for 2014. In June 2014 and February 2015,
the Board of Auditors verified that the Board of Directors, in evaluating the independence of non-exe-
cutive directors, correctly applied the assessment criteria specified in the Corporate Governance Code
and the principle of the priority of substance over form set out in that Code, adopting a transparent
procedure, the details of which are discussed in the report on corporate governance and ownership
structure for 2014. As regards the “self-assessment” of the independence of its members, the Board of
Auditors verified compliance, most recently in February 2015, with the requirements set out in both the
Consolidated Law on Finance and the Corporate Governance Code;
> since the listing of its shares, the Company has adopted specific rules (most recently amended in De-
cember 2012) for the internal management and processing of confidential information, which also set
out the procedures for the disclosure of documentation and information concerning the Company and
the Group, with specific regard to inside information. Those rules (which can be consulted at www.
enel.com) contain appropriate provisions directed at subsidiaries to enable Enel to comply with statu-
tory market disclosure requirements, pursuant to Article 114, paragraph 2, of the Consolidated Law on
Finance;
> in 2002 the Company also adopted (and has subsequently updated) a Code of Ethics (also available at
www.enel.com) that expresses the commitments and ethical responsibilities involved in the conduct of
business, regulating and harmonizing corporate conduct in accordance with standards of maximum
transparency and fairness with respect to all stakeholders;
> with regard to the provisions of Legislative Decree 231 of June 8, 2001, which introduced into Italian
law a system of administrative (in fact criminal) liability for companies for certain types of offences
committed by its directors, managers or employees on behalf of or to the benefit of the company, since
July 2002 Enel has adopted a compliance program consisting of a “general part” and various “special
parts” concerning the difference offences specified by Legislative Decree 231/2001 that the program is
intended to prevent. For a description of the manner in which the model has been implemented by the
various Group companies, please see the report on corporate governance and ownership structure for
2014. The structure that monitors the operation and compliance with the program and is responsible
for updating it (hereinafter, “the Supervisory Body”) is a collegial body. In 2014 it was composed of two
external members with expertise on corporate organization matters, one of whom acted as chairman
of the body, and the head of the Audit department, the head of the Legal and Corporate Affairs de-
partment and the Secretary of the Board of Directors of the Company, since they have specific profes-
sional expertise regarding the application of the compliance program and are not directly involved in
operating activities. The Board of Auditors received adequate information on the main activities carried
out in 2014 by the Supervisory Body. Our examination of those activities found no facts or situations
that would require mention in this report;
> in 2014, the Board of Auditors issued the following opinions:
- a favorable opinion at the meeting of January 29, 2014 concerning the 2014 Audit Plan in accordance
with the provisions of Article 7.C.1, letter c) of the Corporate Governance Code, preliminary to the
resolutions pertaining to the Board of Directors in that regard;
- a favorable opinion at the meeting of May 7, 2014 on the findings of Reconta Ernst & Young in its
report on the major issues that arose in the statutory audit in 2013, in accordance with the provisions
365
of Article 7.C.1, letter e) of the Corporate Governance Code, preliminary to the assessments pertaining
to the Board of Directors in that regard;
- a favorable opinion at the meeting of June 17, 2014 concerning the replacement of the head of the
Company’s Audit department, Francesca Di Carlo, by Silvia Fiori, as well as the remuneration to be
paid to the latter for that position, in accordance with the proposal of the Chief Executive Officer –
acting as director responsible for the internal control and risk management system and in agreement
with the Chairman of the Board of Directors – in accordance with the provisions of Article 7.C.1, pa-
ragraph 2, of the Corporate Governance Code, preliminary to the resolutions pertaining to the Board
of Directors in that regard;
- a favorable opinion at the meeting of July 24, 2014, pursuant to Article 2389, paragraph 3, of the
Italian Civil Code, concerning the remuneration to be paid to the members of the various committees
established within the Board of Directors following the election of that Board by the Shareholders’
Meeting of May 22, 2014;
- a favorable opinion at the meeting of July 24, 2014 concerning the attendance fee to be paid for
participation in the meetings of the corporate boards to the magistrate of the State Audit Court dele-
gated to control the financial management of the Company;
- a favorable opinion at the meeting of September 18, 2014, pursuant to Article 2389, paragraph 3, of
the Italian Civil Code, concerning the remuneration and job conditions of the Chairman of the Board
and the Chief Executive Officer/General Manager during the 2014-2016 term;
- a favorable opinion at the meeting of October 29, 2014, pursuant to Article 20.5, paragraph 1, of the
Company bylaws, concerning the replacement of the officer responsible for the preparation of the fi-
nancial reports, Luigi Ferraris, by Alberto De Paoli, in accordance with a proposal of the Chief Executive
Officer, preliminary to the resolutions pertaining to the Board of Directors in that regard;
> a report on the fixed and variable compensation accrued by those who served as Chairman of the Board of
Directors, the Chief Executive Officer/General Manager and other directors in 2014 for their respective po-
sitions and any compensation instruments awarded to them will be contained (as provided for in the draft
version, which the Board of Auditors has seen) in the Remuneration Report referred to in Article 123-ter
of the Consolidated Law on Finance. It will be submitted for approval by the Board of Directors, acting on
a proposal of the Nomination and Compensation Committee, and published in compliance with the time
limits established by law. The design of these compensation instruments is in line with best practices, com-
plying with the principle of establishing a link with appropriate financial and non-financial performance
targets and pursuing the creation of shareholder value over the medium and long term. The proposals to
the Board of Directors concerning such forms of compensation and the determination of the associated
parameters were prepared by the Nomination and Compensation Committee, which is made up of inde-
pendent directors, drawing on the findings of benchmarking analyses at the national and international le-
vel performed by an independent consulting firm. In addition, in determining the compensation package
of the new directors with special duties, the resolution of the Shareholders’ Meeting of May 22, 2014 was
implemented. That resolution, in application of Article 84-ter of Decree Law 69 of June 21, 2013 (ratified
with amendments with Law 98 of August 9, 2013), established that for the election of the Board of Di-
rectors by that Shareholders’ Meeting the remuneration of directors with special duties could not be set
by the Board of Directors in an amount exceeding 75% of the total remuneration of any form, including
under an employment relationships with the Company, established during the previous term. Finally, the
Report on Remuneration referred to in Article 123-ter of the Consolidated Law on Finance will contain, in
compliance with the applicable CONSOB regulations, specific disclosures on the remuneration earned in
2014 by key management personnel.
The Board of Auditors’ oversight activity in 2014 was carried out in 17 meetings and with participation in the
18 meetings of the Board of Directors, and, through the Chairman, in the 13 meetings of the Control and Risk
366
ENEL ANNUAL REPORT 2014REPORTS Committee (of which 9 joint meetings with the Board of Auditors), in the 9 meetings of the Nomination and
Compensation Committee, in the 3 meetings of the Related Parties Committee and in the 6 meetings of the
Corporate Governance Committee. The delegate of the State Audit Court participated in the meetings of the
Board of Auditors and those of the Board of Directors.
During the course of this activity and on the basis of information obtained from Reconta Ernst & Young SpA,
no omissions, censurable facts, irregularities or other significant developments were found that would requi-
re reporting to the regulatory authorities or mention in this report.
Based on the oversight activity performed and the information exchanged with the independent auditors
Reconta Ernst & Young SpA, we recommend that you approve the Company's financial statements for the
year ended December 31, 2014 in conformity with the proposals of the Board of Directors
Rome, April 8, 2015
The Board of Auditors
Sergio Duca
Chairman
Lidia D’Alessio
Auditor
Gennaro Mariconda
Auditor
367
Report of the independent
audit firm on the 2014 financial
statements of Enel SpA
368
ENEL ANNUAL REPORT 2014REPORTS
369
370
ENEL ANNUAL REPORT 2014REPORTS 371
Report of the independent audit
firm on the 2014 consolidated
financial statements of the Enel
Group
372
ENEL ANNUAL REPORT 2014REPORTS
373
374
ENEL ANNUAL REPORT 2014REPORTS 375
Summary of the resolutions of
the Ordinary and Extraordinary
Shareholders’ Meeting
The Ordinary and Extraordinary Shareholders’ Meeting of Enel SpA held in Rome in single call on May 28,
2015 at the Enel Conference Center at 125, Viale Regina Margherita, adopted the following resolutions du-
ring the ordinary session:
1. approved the financial statements of Enel SpA for the year ended December 31, 2014, having acknowled-
ged the results of the consolidated financial statements of the Enel Group for the year ended December
31, 2014, which closed with net income attributable to shareholders of the Parent Company of € 517
million;
2. resolved:
(i)
to earmark the net income for the year 2014 of Enel SpA, amounting to € 558,202,514.37, as fol-
lows:
a) for distribution to the Shareholders, as dividend, € 0.05 for each of the 9,403,357,795 ordinary
shares in circulation on June 22, 2015, the scheduled ex-dividend date, for an overall amount of
€ 470,167,889.75;
b) for “retained earnings” the remaining part equal to € 88,034,624.62;
(ii) to earmark for distribution to the Shareholders also a part of the available reserve named “retained
earnings” allocated in the financial statements of Enel SpA (amounting at the date of the Sharehol-
ders’ Meeting to € 6,061,293,373.19 overall), for an amount of € 0.09 for each of the 9,403,357,795
ordinary shares in circulation on June 22, 2015, the scheduled ex-dividend date, for an overall amount
of € 846,302,201.55
paying, before withholding tax, if any, an overall dividend of € 0.14 per ordinary share – of which € 0.05
as distribution of the 2014 net income and € 0.09 as partial distribution of the available reserve named
“retained earnings” – as from June 24, 2015, with the ex-dividend date of coupon no. 23 falling on June
22, 2015 and the “record date” (i.e. the date of the legitimate payment of dividends) coinciding with
June 23, 2015;
3. resolved, pursuant to Article 2386 of the Italian Civil Code, the appointment of Alfredo Antoniozzi as
a member of the Board of Directors, who will stay in office until the expiry of the Board of Directors in
office at the date of the Shareholders’ Meeting, i.e. until the approval of 2016 financial statements;
4. resolved to approve the Long Term Incentive Plan for 2015 reserved to the management of Enel SpA and/
or of its subsidiaries pursuant to Article 2359 of the Italian Civil Code, whose features are described in the
relevant information document prepared pursuant to Article 84-bis, paragraph 1, of the Issuers Regulation
adopted by CONSOB with Resolution 11971/1999, and to grant the Board of Directors, with the faculty to
sub-delegate, all powers necessary for the actual implementation of the aforesaid Plan;
5. resolved in favor of the first section of the remuneration report drawn up pursuant to Article 123-ter of
Legislative Decree 58 dated February 24, 1998, and Article 84-quater of the Issuers Regulation adopted
by CONSOB with Resolution 11971/1999, containing the description of the policy for the remuneration of
Directors, General Manager and Executives with strategic responsibilities adopted by the Company for the
financial year 2015, as well as the procedures used for the adoption and implementation of such policy.
In the extraordinary session, the Shareholders’ Meeting also resolved an amendment of the bylaws provisions
concerning requirements of integrity and related causes of ineligibility and disqualification of members of
the Board of Directors as set forth under Article 14-bis of the corporate bylaws.
376
ENEL ANNUAL REPORT 2014 Summary of the resolutions of
the Ordinary and Extraordinary
Shareholders’ Meeting
377
378
ENEL ANNUAL REPORT 2014ATTACHMENTS Attachments
379
Subsidiaries, associates and other
significant equity investments of
the Enel Group at December 31,
2014
In compliance with CONSOB Notice DEM/6064293 of July 28, 2006
and Article 126 of CONSOB Resolution 11971 of May 14, 1999,
a list of subsidiaries and associates of Enel SpA at December 31,
2014, pursuant to Article 2359 of the Italian Civil Code, and of
other significant equity investments is provided below. Enel has full
title to all investments.
The following information is included for each company: name,
headquarters, share capital, currency in which share capital is
denominated, activity, method of consolidation, Group companies
that have a stake in the company and their respective ownership
share, and the Group’s ownership share.
380
ENEL ANNUAL REPORT 2014ATTACHMENTS Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Parent company
Enel SpA
Rome
Italy
9,403,357,795.00 EUR
Holding company
Holding
Group %
holding
100.00%
Subsidiaries
(Cataldo)
Hydro Power
Associates
New York
(New York)
USA
- USD
Electricity generation
from renewable
resources
Line-by-line
50.00%
68.29%
Chi Black River
Inc.
Hydro
Development
Group Inc.
3-101-665717 SA
Costa Rica
Costa Rica
10,000.00 CRC
3SUN Srl
Catania
Italy
35,205,984.00 EUR
Adam Solar PV Project
Three (Pty) Ltd
Adam Solar PV Project
Two (RF) Pty Ltd
Mowbray
South Africa
1.00 ZAR
Johannesburg South Africa
10,000,000.00 ZAR
Adria Link Srl
Gorizia
Italy
500,000.00 EUR
Agassiz Beach LLC
Minneapolis
(Minnesota)
USA
- USD
Rome
Italy
10,000.00 EUR
Agatos Green Power
Trino
Agrupación Acefhat
AIE
Electricity generation
from renewable
resources
Development, design,
construction and
operation of solar
panel manufacturing
plants
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Design, construction
and operation of
merchant lines
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
PH Chucas SA
100.00%
42.67%
Equity
Enel Green Power
SpA
33.33%
22.76%
Line-by-line
Enel Green Power
RSA (Pty) Ltd
100.00%
68.29%
Line-by-line
Enel Green Power
RSA (Pty) Ltd
60.00%
40.97%
Equity
Enel Produzione
SpA
33.33%
33.33%
Line-by-line
Chi Minnesota
Wind LLC
51.00%
34.83%
Line-by-line
Enel Green Power
Solar Energy Srl
80.00%
54.63%
Barcelona
Spain
793,340.00 EUR
Design and services
-
16.67%
11.69%
Endesa
Distribución
Eléctrica SL
Aguilon 20 SA
Zaragoza
Spain
2,682,000.00 EUR
Albany Solar LLC
Minnesota
USA
- USD
Almeyda Solar SpA
Santiago
Chile
1,736,965,000.00 CLP
Almussafes Servicios
Energéticos SL
Alpe Adria Energia
SpA
Valencia
Spain
3,010.00 EUR
Udine
Italy
450,000.00 EUR
Altomonte Fv Srl
Cosenza
Italy
100,000.00 EUR
Alvorada Energia SA
Rio de Janeiro
Brazil
17,117,415.92 BRL
Ampla Energia
e Serviços SA
Rio de Janeiro
Brazil
129,823.00 BRL
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Management and
maintenance of power
plants
Design, construction
and operation of
merchant lines
Electricity generation
from renewable
resources
Electricity generation
and sale
Electricity generation,
transmission and
distribution
Line-by-line
Enel Green Power
España SL
51.00%
35.21%
Line-by-line
Line-by-line
Aurora
Distributed Solar
LLC
Enel Green Power
Chile Ltda
100.00%
68.29%
100.00%
68.23%
Line-by-line
Enel Green Power
España SL
100.00%
69.03%
Equity
Enel Produzione
SpA
40.50%
40.50%
Line-by-line
Enel Green Power
Solar Energy Srl
100.00%
68.29%
Line-by-line
Line-by-line
Enel Brasil
Participações Ltda
Chilectra Inversud
SA
100.00%
68.29%
21.02%
55.79%
Andorra Desarrollo SA Teruel
Spain
901,520.00 EUR
Regional development Line-by-line
Chilectra SA
10.34%
Enersis SA
21.38%
Endesa Brasil SA
46.89
Endesa
Generación SA
100.00%
70.14%
381
Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
Annandale Solar LLC Minnesota
USA
- USD
Electricity generation
from renewable
resources
Line-by-line
Aurora
Distributed Solar
LLC
100.00%
68.29%
Apamea 2000 SL
Madrid
Spain
3,010.00 EUR
Services
Line-by-line
Endesa SA
100.00%
70.14%
Apiacás Energia SA
Rio de Janeiro
Brazil
21,216,846.33 BRL
Electricity generation
Line-by-line
Aquenergy Systems
Inc.
Greenville
(South Carolina)
USA
Aquilae Solar SL
Las Palmas de
Gran Canaria
Spain
10,500.00 USD
Electricity generation
from renewable
resources
Line-by-line
3,008.00 EUR
Photovoltaic plants
Equity
Aragonesa de
Actividades Energéticas
SA
Teruel
Spain
60,100.00 EUR
Electricity generation
Line-by-line
Enel Brasil
Participações Ltda
Consolidated
Hydro Southeast
Inc.
Endesa Ingeniería
SLU
Endesa
Generación SA
100.00%
68.29%
100.00%
68.29%
50.00%
35.07%
100.00%
70.14%
Asociación Nuclear
Ascó-Vandellós II AIE
Tarragona
Spain
19,232,400.00 EUR
Atea Srl
La Spezia
Italy
10,001.00 EUR
Management and
maintenance of power
plants
Installation
of industrial machinery
and equipment
Joint operation
Endesa
Generación SA
85.41%
59.91%
Equity
Enel Italia Srl
0.01%
0.01%
Athonet Smartgrid Srl Bolzano
Italy
10,001.00 EUR
Research, development
and design
Equity
Enel Italia Srl
0.01%
0.01%
Atwater Solar LLC
Minnesota
USA
Aurora Distributed
Solar LLC
Wilmington
(Delaware)
USA
Autumn Hills LLC
Minneapolis
(Minnesota)
USA
- USD
- USD
- USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Aurora
Distributed Solar
LLC
100.00%
68.29%
Line-by-line
Enel Kansas LLC
100.00%
68.29%
Line-by-line
Chi Minnesota
Wind LLC
51.00%
34.83%
Ayesa Advanced
Technologies SA
Seville
Spain
663,520.00 EUR
IT services
Equity
Aysén Energía SA
Santiago
Chile
4,900,100.00 CLP
Electricity
Equity
Aysén Transmisiòn
SA
Santiago
Chile
22,368,000.00 CLP
Electricity generation
and sale
Equity
Barnet Hydro
Company
Burlington
(Vermont)
USA
- USD
Electricity generation
from renewable
resources
Line-by-line
Endesa Servicios
SL
Empresa Nacional
de Electricidad SA
Centrales
Hidroeléctricas
de Aysén SA
Empresa Nacional
de Electricidad SA
Centrales
Hidroeléctricas de
Aysén SA
Sweetwater
Hydroelectric Inc.
22.00%
15.43%
0.51%
18.54%
99.00%
0.51%
18.54%
99.00%
90.00%
68.29%
10.00%
Enel Green Power
North America
Inc.
Beaver Falls Water
Power Company
Philadelphia
(Pennsylvania)
USA
Beaver Valley
Holdings Ltd
Philadelphia
(Pennsylvania)
USA
Beaver Valley Power
Company
Philadelphia
(Pennsylvania)
USA
- USD
2.00 USD
30.00 USD
Biowatt - Recursos
Energéticos Lda
Porto
Portugal
5,000.00 EUR
Black River Hydro
Associates
New York
(New York)
USA
- USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Marketing of
projects for electricity
generation from
renewable resources
Electricity generation
from renewable
resources
Line-by-line
Beaver Valley
Holdings Ltd
67.50%
46.09%
Line-by-line
Line-by-line
Line-by-line
100.00%
68.29%
100.00%
68.29%
51.00%
35.21%
Hydro
Development
Group Inc.
Hydro
Development
Group Inc.
Finerge-Gestão
de Projectos
Energéticos SA
Line-by-line
(Cataldo) Hydro
Power Associates
75.00%
51.22%
382
ENEL ANNUAL REPORT 2014ATTACHMENTS Company name
Headquarters
Country
Share capital Currency Activity
Boiro Energia SA
Boiro
Spain
601,010.00 EUR
Electricity generation
from renewable
resources
Consolidation
method
Equity
Held by
% holding
Group %
holding
Enel Green Power
España SL
40.00%
27.61%
3,008.00 EUR
Real estate
Line-by-line
Endesa SA
100.00%
70.14%
Bolonia Real Estate SL Madrid
Boott Field LLC
Wilmington
(Delaware)
Spain
USA
Boott Hydropower Inc. Boston
USA
(Massachusetts)
Boott Sheldon
Holdings LLC
Wilmington
(Delaware)
USA
Bp Hydro Associates
Boise (Idaho)
USA
Bp Hydro Finance
Partnership
Salt Lake City
(Utah)
USA
- USD
- USD
- USD
- USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
- USD
Electricity generation
from renewable
resources
Line-by-line
Boott
Hydropower Inc.
100.00%
68.29%
Line-by-line
Boott Sheldon
Holdings LLC
100.00%
68.29%
Line-by-line
Hydro Finance
Holding Company
Inc.
100.00%
68.29%
Line-by-line
Chi Idaho Inc.
68.00%
68.29%
Enel Green Power
North America
Inc.
32.00%
Line-by-line
Fulcrum Inc.
24.08%
68.29%
Braila Power SA
Sat Chiscani,
Comuna
Chiscani
Romania
1,900,000.00 RON
Electricity generation
Equity
Brooten Solar LLC
Minnesota
USA
Buffalo Dunes Wind
Project LLC
Topeka
(Kansas)
USA
- USD
- USD
Business Venture
Investments 1468
(Pty) Ltd
Bypass Limited
Lombardy East South Africa
1,000.00 ZAR
Boise
(Idaho)
USA
- USD
Bypass Power
Company
Los Angeles
(California)
USA
1.00 USD
Camposgen-Energia
Lda
Oeiras
Portugal
5,000.00 EUR
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Canastota Wind
Power LLC
Wilmington
(Delaware)
Caney River Wind
Project LLC
Topeka
(Kansas)
USA
USA
- USD
- USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Bp Hydro
Associates
Enel Investment
Holding BV
Aurora
Distributed Solar
LLC
EGPNA
Development
Holdings LLC
Enel Green Power
RSA (Pty) Ltd
75.92%
29.93%
29.93%
100.00%
68.29%
75.00%
51.22%
100.00%
68.29%
Line-by-line
Line-by-line
Line-by-line
Line-by-line
Northwest Hydro
Inc.
69.35%
68.29%
El Dorado Hydro
1.00%
Chi West Inc.
29.65%
Line-by-line
Chi West Inc.
100.00%
68.29%
Line-by-line
TP - Sociedade
Térmica
Portuguesa SA
80.00%
69.03%
Pp - Co-Geração
SA
20.00%
Line-by-line
Essex Company
100.00%
68.29%
Line-by-line
Rocky Caney
Wind LLC
100.00%
68.29%
Carboex SA
Madrid
Spain
24,040,484.18 EUR
Fuel supply
Line-by-line
Carbopego -
Abastecimientos e
Combustiveis SA
Abrantes
Portugal
50,000.00 EUR
Fuel supply
Equity
100.00%
70.14%
0.01%
35.07%
Endesa
Generación SA
Endesa
Generación
Portugal SA
Endesa
Generación SA
49.99%
Carocraft (Pty) Ltd
Houghton
South Africa
116.00 ZAR
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
RSA (Pty) Ltd
97.00%
66.24%
383
Central Eólica Canela
SA
Central Geradora
Termelétrica Fortaleza
SA
Central Hidráulica
Güejar-Sierra SL
Central Térmica de
Anllares AIE
Central Vuelta de
Obligado SA
Centrales
Hidroeléctricas de
Aysén SA
Centrales Nucleares
Almaraz-Trillo AIE
Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
Carodex (Pty) Ltd
Houghton
South Africa
116.00 ZAR
Castle Rock Ridge
Limited Partnership
Calgary
(Alberta)
Canada
- CAD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
RSA (Pty) Ltd
98.49%
67.26%
Line-by-line
Enel Green Power
Canada Inc.
99.90%
68.29%
Cefeidas Desarrollo
Solar SL
Puerto del
Rosario
Spain
3,008.00 EUR
Photovoltaic plants
Equity
Enel Alberta
Wind Inc.
0.10%
Endesa Ingeniería
SLU
50.00%
35.07%
Centrais Elétricas
Cachoeira Dourada SA
Goiania
Brazil
289,340,000.00 BRL
Central Dock Sud SA
Buenos Aires
Argentina
35,595,178,229.00 ARS
Santiago
Chile
12,284,740,000.00 CLP
Caucaia
Brazil
151,940,000.00 BRL
Electricity generation
and sale
Electricity generation,
transmission and
distribution
Electricity generation
from renewable
resources
Thermal generation
plants
Line-by-line
Endesa Brasil SA
99.75%
51.03%
Line-by-line
Inversora Dock
Sud SA
69.99%
24.24%
Line-by-line
Compañía
Eléctrica Tarapacá
SA
75.00%
27.96%
Line-by-line
Endesa Brasil SA 100.00%
51.15%
Seville
Spain
364,210.00 EUR
Madrid
Spain
595,000.00 EUR
Buenos Aires
Argentina
500,000.00 ARS
Operation of hydro-
electric plants
Equity
Operation of thermal
plants
Equity
Electrical facilities
construction
Equity
Enel Green Power
España SL
Endesa
Generación SA
Hidroeléctrica El
Chocón SA
33.30%
22.99%
33.33%
23.38%
33.20%
9.80%
Santiago
Chile
158,975,665,182.00 CLP
Design
Equity
Endesa Costanera
SA
1.30%
Central Dock
Sud SA
6.40%
Empresa Nacional
de Electricidad SA
51.00%
18.54%
Madrid
Spain
- EUR
Management of
nuclear plants
Equity
Nuclenor SA
0.69%
16.77%
Centrum Pre Vedu a
Vyskum Sro
Kalná nad
Hronom
Mochovce 6
Slovakia
6,639.00 EUR
Milan
Italy
8,550,000.00 EUR
CESI - Centro
Elettrotecnico
Sperimentale Italiano
Giacinto Motta SpA
Held for sale
Endesa
Generación SA
Slovenské
elektrárne AS
23.57%
100.00%
66.00%
Equity
Enel SpA
42.70%
42.70%
Research and
development on
natural sciences and
engineering
Research and testing
services
Chepei Desarollo
Solar L
Las Palmas de
Gran Canaria
Spain
Chi Black River Inc.
Chi Idaho Inc.
Wilmington
(Delaware)
Wilmington
(Delaware)
Chi Minnesota Wind
LLC
Wilmington
(Delaware)
Chi Operations Inc.
Chi Power Inc.
Wilmington
(Delaware)
Wilmington
(Delaware)
Chi Power Marketing
Inc.
Wilmington
(Delaware)
USA
USA
USA
USA
USA
USA
384
3,008.00 EUR
Photovoltaic plants
Equity
100.00 USD
100.00 USD
- USD
100.00 USD
100.00 USD
100.00 USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Line-by-line
Line-by-line
Line-by-line
Line-by-line
Line-by-line
50.00%
35.07%
100.00%
68.29%
100.00%
68.29%
100.00%
68.29%
100.00%
68.29%
100.00%
68.29%
100.00%
68.29%
Endesa Ingeniería
SLU
Enel Green Power
North America
Inc.
Enel Green Power
North America
Inc.
Enel Green Power
North America
Inc.
Enel Green Power
North America
Inc.
Enel Green Power
North America
Inc.
Enel Green Power
North America
Inc.
ENEL ANNUAL REPORT 2014ATTACHMENTS Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
Chi West Inc.
Wilmington
(Delaware)
USA
Chilectra Inversud SA Santiago
Chilectra SA
Santiago
Chile
Chile
100.00 USD
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
North America
Inc.
100.00%
68.29%
569,020,000.00 USD
Holding company
Line-by-line
Chilectra SA
100.00%
36,792,868,194.00 CLP
Holding company,
electricity distribution
Line-by-line
Inmobiliaria
Manso de Velasco
Ltda
0.01%
60.07%
60.07%
Chinango SAC
Lima
Peru
294,249,298.00 PEN
Chisago Solar LLC
Minnesota
USA
Chisholm View Wind
Project LLC
Oklahoma City USA
- USD
- USD
Line-by-line
Line-by-line
Enersis SA
Edegel SA
99.08%
80.00%
28.42%
100.00%
68.29%
Aurora
Distributed Solar
LLC
Line-by-line
Enel Kansas LLC
75.00%
51.22%
Electricity generation,
sale and transmission
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Chladiace Veze
Bohunice Spol Sro
Bohunice
Slovakia
16,598.00 EUR
Codensa SA ESP
Bogotá DC
Colombia
13,209,330,000.00 COP
Engineering and
construction
Equity
Slovenské
elektrárne AS
35.00%
23.10%
Electricity distribution
and sale
Line-by-line
Enersis SA
39.13%
29.34%
Cogeneración El Salto
SL (in liquidation)
Zaragoza
Spain
36,060.73 EUR
Cogeneration of
electricity and heat
-
Cogeneración Lipsa SL Barcelona
Spain
720,000.00 EUR
Rome
Italy
21,372,000.00 EUR
Fortaleza
Brazil
442,950,000.00 BRL
Line-by-line
Endesa Brasil SA
58.87%
39.32%
Equity
Equity
Cogeneration of
electricity and heat
Construction of port
infrastructure
Electricity generation,
transmission and
distribution
Compagnia Porto Di
Civitavecchia SpA
Companhia Energética
do Ceará SA
Companhia Térmica
Lusol ACE
Barreiro
Portugal
- EUR
Electricity generation
Line-by-line
Companhia Térmica
Oliveira Ferreira ACE (in
liquidation)
Riba de Ave
Portugal
- EUR
Electricity generation
-
Companhia Térmica
Ribeira Velha ACE
São Paio de
Oleiros
Portugal
- EUR
Electricity generation
Line-by-line
Chilectra SA
Enel Green Power
España SL
Enel Green Power
España SL
Enel Produzione
SpA
9.35%
20.00%
13.81%
20.00%
13.81%
25.00%
25.00%
15.18%
95.00%
65.58%
95.00%
65.58%
49.00%
69.03%
51.00%
Enersis SA
TP - Sociedade
Térmica
Portuguesa SA
TP - Sociedade
Térmica
Portuguesa SA
Pp - Co-Geração
SA
TP - Sociedade
Térmica
Portuguesa SA
Compañía de
Interconexión
Energética SA
Compañía de
Transmisión del
Mercosur SA
Compañía Eléctrica
Tarapacá SA
Compañía Energética
Veracruz SAC
Compañía Eólica
Tierras Altas SA
Compañía
Transportista de Gas
de Canarias SA
Rio de Janeiro
Brazil
285,050,000.00 BRL
Buenos Aires
Argentina
14,175,999.00 ARS
Santiago
Chile
331,815,034,140.00 CLP
Electricity generation,
transmission and
distribution
Electricity generation,
transmission and
distribution
Electricity generation,
transmission and
distribution
Line-by-line
Endesa Brasil SA 100.00%
51.15%
Line-by-line
Compañía de
Interconexión
Energética SA
100.00%
51.15%
Line-by-line
Enersis SA
3.78%
37.28%
Empresa Nacional
de Electricidad SA
96.21%
Lima
Peru
2,886,000.00 PEN
Hydroelectric projects Line-by-line
Generalima SA
100.00%
60.62%
Soria
Spain
13,222,000.00 EUR
Wind plants
Equity
Las Palmas de
Gran Canaria
Spain
800,003.00 EUR
Natural gas transport
Equity
35.63%
24.60%
47.18%
33.09%
Enel Green Power
España SL
Unión Eléctrica
de Canarias
Generación SAU
Compostilla Re SA
Luxembourg
Luxembourg
12,000,000.00 EUR
Reinsurance
Line-by-line
Enel Insurance NV 100.00%
85.07%
Concert Srl
Rome
Italy
10,000.00 EUR
Product, plant and
equipment certification
Line-by-line
Enel Ingegneria e
Ricerca SpA
49.00%
100.00%
Coneross Power
Corporation Inc.
Greenville
(South Carolina)
USA
110,000.00 USD
Electricity generation
from renewable
resources
Line-by-line
Aquenergy
Systems Inc.
100.00%
68.29%
Enel Produzione
SpA
51.00%
385
Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
Consolidated Hydro
New Hampshire Inc.
Wilmington
(Delaware)
Consolidated Hydro
New York Inc.
Wilmington
(Delaware)
Consolidated Hydro
Southeast Inc.
Wilmington
(Delaware)
USA
USA
USA
130.00 USD
200.00 USD
100.00 USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Line-by-line
Line-by-line
100.00%
68.29%
100.00%
68.29%
95.00%
68.29%
Enel Green Power
North America
Inc.
Enel Green Power
North America
Inc.
Enel Green Power
North America
Inc.
Consolidated Pumped
Storage Inc.
Wilmington
(Delaware)
USA
550,000.00 USD
Electricity generation
from renewable
resources
Line-by-line
Consorcio Eólico
Marino Cabo de
Trafalgar SL
Cadiz
Spain
200,000.00 EUR
Wind plants
Equity
Copenhagen
Associates
New York
(New York)
USA
- USD
Electricity generation
from renewable
resources
Line-by-line
Equity
Corporación Eólica de
Zaragoza SL
Zaragoza
Spain
1,021,600.00 EUR
Courtenay Wind Farm
LLC
Bismarck (North
Dakota)
USA
- USD
De Rock’l Srl
Bucharest
Romania
5,629,000.00 RON
Depuracion Destilacion
Reciclaje SL
Boiro
Spain
600,000.00 EUR
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Desarollo Photosolar SLLas Palmas de
Spain
3,008.00 EUR
Photovoltaic plants
Equity
Gran Canaria
Mexico City
Mexico
5,313,807.00 MXN
Electricity generation
from renewable
resources
Line-by-line
Gauley River
Power Partners LP
5.00%
Enel Green Power
North America
Inc.
Enel Green Power
España SL
Enel Green Power
North America
Inc.
Hydro
Development
Group Inc.
Enel Green Power
España SL
81.82%
55.87%
50.00%
34.52%
50.00%
68.29%
50.00%
25.00%
17.26%
Line-by-line
Enel Kansas LLC
100.00%
68.29%
Line-by-line
Enel Green Power
Romania Srl
100.00%
68.29%
Equity
Enel Green Power
España SL
40.00%
27.61%
Endesa Ingeniería
SLU
Enel Green Power
México Srl de Cv
Energia Nueva
Energia Limpia
Mexico Srl de Cv
Empresa Electrica
Panguipulli SA
50.00%
35.07%
99.99%
68.29%
0.01%
100.00%
68.23%
Santiago
Chile
351,604,338.00 CLP
Houghton
South Africa
1,000.00 ZAR
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Line-by-line
Enel Green Power
RSA (Pty) Ltd
100.00%
68.29%
Valencia
Spain
578,000.00 EUR
Photovoltaic plants
-
Endesa Servicios
SL
14.39%
10.09%
Barcelona
Spain
108,240.00 EUR
Bogotá DC
Colombia
1,000,000.00 COP
Tenerife
Spain
12,621,210.00 EUR
Electricity distribution
and sale
Electricity distribution
and sale
Electricity purchase,
transmission and
distribution
Line-by-line
Endesa Red SA
55.00%
70.14%
Hidroeléctrica de
Catalunya SL
45.00%
Equity
Codensa SA ESP
49.00%
14.38%
Line-by-line
Endesa Red SA
100.00%
70.14%
Desarrollo de Fuerzas
Renovables Srl de
Cv
Diego de Almagro
Matriz SpA
Dioflash (Proprietary)
Limited
Diseño de Sistemas en
silicio SA
(in liquidation)
Distribuidora de
Energía Eléctrica
del Bages SA
Distribuidora Eléctrica
de Cundinamarca
SA ESP
Distribuidora Eléctrica
del Puerto de La Cruz
SA
386
ENEL ANNUAL REPORT 2014ATTACHMENTS Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
Buenos Aires
Argentina
497,610,000.00 ARS
Holding company
Line-by-line
Chilectra SA
23.42%
30.87%
Distrilec Inversora
SA
Dodge Center
Distributed Solar
LLC
Minnesota
USA
- USD
Dominica Energía
Limpia Srl de Cv
Colonia
Guadalupe Inn
Mexico
279,282,225.00 MXN
Eastwood Solar LLC
Minnesota
USA
- USD
Edegel SA
Lima
Peru
2,064,301,735.00 PEN
Electricity generation
from renewable
resources
Electricity generation,
distribution and sale
Line-by-line
Line-by-line
Aurora
Distributed Solar
LLC
Empresa Nacional
de Electricidad SA
Porto
Portugal
50,000.00 EUR
Porto
Portugal
200,000.00 EUR
EED -
Empreendimentos
Eólicos do Douro SA
EEVM -
Empreendimentos
Eólicos Vale do Minho
SA
EGP BioEnergy Srl
Rome
Italy
1,000,000.00 EUR
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
1,000.00 USD
Holding company
Line-by-line
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Line-by-line
Empresa Nacional
de Electricidad SA
0.89%
Enersis SA
27.19%
Aurora
Distributed Solar
LLC
Enel Green Power
México Srl de Cv
100.00%
68.29%
99.96%
68.29%
Enel Green Power
Guatemala SA
0.04%
100.00%
68.29%
29.40%
35.53%
54.20%
100.00%
69.03%
50.00%
25.89%
Line-by-line
Equity
Generandes
Perú SA
Finerge-Gestão
de Projectos
Energéticos SA
Eolverde - SGPS
SA
Line-by-line
Enel Green Power
Puglia Srl
100.00%
68.29%
Line-by-line
Line-by-line
Line-by-line
Line-by-line
Line-by-line
Line-by-line
- USD
- USD
- USD
- USD
- USD
- USD
- USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
100.00%
68.29%
100.00%
68.29%
100.00%
68.29%
100.00%
68.29%
100.00%
68.29%
100.00%
68.29%
100.00%
68.29%
Enel Green Power
North America
Inc.
Padoma Wind
Power LLC
Enel Green Power
North America
Inc.
Enel Green Power
North America
Inc.
Padoma Wind
Power LLC
Enel Green Power
North America
Development LLC
Enel Green Power
North America
Inc.
Northwest Hydro
Inc.
17.50%
Endesa
Generación SA
40.99%
33.07%
Line-by-line
Chi West Inc.
82.50%
68.29%
EGP Geronimo Holding
Company Inc.
Wilmington
(Delaware)
USA
EGP Jewel Valley LLC Wilmington
USA
EGP Solar 1 LLC
(Delaware)
Wilmington
(Delaware)
EGP Stillwater Solar
LLC
Wilmington
(Delaware)
EGP Timber Hills
Project LLC
Los Angeles
(California)
EGPNA Development
Holdings LLC
Wilmington
(Delaware)
EGPNA Wind Holdings
1 LLC
Wilmington
(Delaware)
El Dorado Hydro
Los Angeles
(California)
USA
USA
USA
USA
USA
USA
Elcogas SA
Puertollano
Spain
809,690.40 EUR
Electricity generation
Equity
Elcomex Solar Energy
Srl
Costanza
Romania
4,590,000.00 RON
Electricity generation
from renewable
resources
Enel SpA
4.32%
Line-by-line
Enel Green Power
Romania Srl
100.00%
68.29%
Elecgas SA
Santarem
(Pego)
Portugal
50,000.00 EUR
Combined-cycle
electricity generation
Equity
50.00%
35.07%
Endesa
Generación
Portugal SA
Electra Capital (RF)
Pty Ltd
Johannesburg South Africa
10,000,000.00 ZAR
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
RSA (Pty) Ltd
60.00%
40.97%
387
Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
Eléctrica Cabo Blanco
SA
Lima
Peru
46,508,170.00 PEN
Holding company
Line-by-line
Generalima SA
20.00%
60.62%
Eléctrica de Jafre SA
Girona
Spain
165,880.00 EUR
Eléctrica de Lijar SL
Cadiz
Spain
1,081,820.00 EUR
Enersis SA
80.00%
Electricity distribution
and sale
Equity
Hidroeléctrica de
Catalunya SL
47.46%
33.29%
Electricity transmission
and distribution
Equity
Endesa Red SA
50.00%
35.07%
Electricidad de Puerto
Real SA
Cadiz
Spain
6,611,130.00 EUR
Distribution and supply
of electricity
Equity
Endesa Red SA
50.00%
35.07%
Electrogas SA
Santiago
Chile
61,832,327.00 USD
Holding company
Equity
Empresa Nacional
de Electricidad SA
42.50%
15.45%
Emgesa Panama SA
Panama
Panama
10,000.00 USD
Electricity trading
Line-by-line
Emgesa SA ESP
100.00%
22.87%
Emgesa SA ESP
Bogotá DC
Colombia
655,222,310,000.00 COP
Electricity generation
and sale
Line-by-line
Empresa Nacional
de Electricidad SA
26.87%
22.87%
Emittenti Titoli SpA
Milan
Italy
5,200,000.00 EUR
-
-
Enel SpA
10.00%
10.00%
Enersis SA
21.61%
Empreendimento
Eólico de Rego Lda
Empreendimentos
Eólicos Serra do
Sicó SA
Empreendimentos
Eólicos de Viade Lda
Empresa Carbonífera
del Sur SA
Empresa de
Distribución Eléctrica
de Lima Norte SAA
Empresa de Energía
Cundinamarca SA ESP
Porto
Portugal
5,000.00 EUR
Porto
Portugal
50,000.00 EUR
Porto
Portugal
5,000.00 EUR
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Line-by-line
Line-by-line
Madrid
Spain
18,030,000.00 EUR
Mining
Line-by-line
Finerge-Gestão
de Projectos
Energéticos SA
TP - Sociedade
Térmica
Portuguesa SA
Finerge-Gestão
de Projectos
Energéticos SA
Endesa
Generación SA
51.00%
35.21%
52.38%
36.16%
80.00%
55.22%
100.00%
70.14%
Lima
Peru
638,560,000.00 PEN
Electricity distribution
and sale
Line-by-line
Enersis SA
24.00%
45.79%
Bogotá DC
Colombia
39,699,630,000.00 COP
Electricity distribution
and sale
Equity
51.68%
82.34%
11.84%
Inversiones
Distrilima SA
Distribuidora
Eléctrica de
Cundinamarca
SA ESP
Empresa Distribuidora
Sur SA
Buenos Aires
Argentina
898,590,000.00 ARS
Electricity distribution
and sale
Line-by-line
Chilectra SA
20.85%
43.41%
Enersis SA
22.25%
Distrilec Inversora
SA
56.36%
Santiago
Chile
82,222,000.00 CLP
Electricity generation,
transmission and
distribution
Line-by-line
Chilectra SA
100.00%
60.07%
Lima
Peru
73,982,594.00 PEN
Electricity generation
Line-by-line
Generalima SA
36.50%
58.50%
Santiago
Chile
48,038,937.00 CLP
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
Latin America
Ltda
0.01%
68.23%
Electrica Cabo
Blanco SA
60.00%
Santiago
Chile
200,319,020.73 CLP
Santiago
Chile
1,331,714,090,000.00 CLP
Santiago
Chile
12,647,752,517.00 CLP
Enel Green Power
Chile Ltda
99.99%
Line-by-line
Empresa Nacional
de Electricidad SA
92.65%
33.69%
Line-by-line
Enersis SA
59.98%
36.36%
Line-by-line
Enel Green Power
Chile Ltda
51.00%
34.80%
Electricity generation,
transmission and
distribution
Electricity generation,
transmission and
distribution
Electricity generation
from renewable
resources
Panama
Panama
58,500,000.00 USD
Electricity transmission
and distribution
-
Endesa
Latinoamérica SA
11.11%
11.11%
Empresa Eléctrica de
Colina Ltda
Empresa Eléctrica de
Piura SA
Empresa Electrica
Panguipulli SA
Empresa Eléctrica
Pehuenche SA
Empresa Nacional de
Electricidad SA
Empresa Nacional de
Geotermia SA
Empresa Propietaria de
La Red SA
388
ENEL ANNUAL REPORT 2014ATTACHMENTS Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
En-Brasil Comercio e
Serviços SA
Rio de Janeiro
Brazil
1,000,000.00 BRL
Electricity
Line-by-line
Endesa Argentina SA Buenos Aires
Argentina
514,530,000.00 ARS
Holding company
Line-by-line
Central Geradora
Termelétrica
Fortaleza SA
0.01%
51.15%
Endesa Brasil SA
99.99%
Compañía
Eléctrica Tarapacá
SA
0.34%
36.36%
Empresa Nacional
de Electricidad SA
99.66%
Endesa Brasil SA
Rio de Janeiro
Brazil
1,028,760,000.00 BRL
Holding company
Line-by-line
Chilectra SA
5.33%
51.15%
Edegel SA
4.00%
Chilectra Inversud
SA
5.94%
Empresa Nacional
de Electricidad SA
34.64%
Enersis SA
50.09%
Endesa Capital SA
Madrid
Spain
60,200.00 EUR
Finance company
Line-by-line
Endesa SA
100.00%
70.14%
Endesa Cemsa SA
Buenos Aires
Argentina
14,010,014.00 ARS
Energy trading
Line-by-line
Endesa Argentina
SA
45.00%
49.70%
Enersis SA
55.00%
Endesa
Comercialização de
Energia SA
Porto
Portugal
250,000.00 EUR
Electricity generation
and sale
Line-by-line
Endesa Energía
SA
100.00%
70.14%
Endesa Costanera SA Buenos Aires
Argentina
701,988,378.00 ARS
Electricity generation
and sale
Line-by-line
Southern Cone
Power Argentina
SA
1.15%
27.52%
Empresa Nacional
de Electricidad SA
24.85%
Endesa Argentina
SA
49.68%
Endesa Distribución
Eléctrica SL
Barcelona
Spain
1,204,540,060.00 EUR
Electricity distribution Line-by-line
Endesa Red SA
100.00%
70.14%
Endesa Energía SA
Madrid
Spain
12,981,860.00 EUR
Endesa Energía XXI SL Madrid
Spain
2,000,000.00 EUR
Marketing of energy
products
Line-by-line
Endesa SA
100.00%
70.14%
Marketing and energy-
related services
Line-by-line
Endesa Energía
SA
100.00%
70.14%
Endesa Financiación
Filiales SA
Madrid
Spain
4,621,003,006.00 EUR
Finance company
Line-by-line
Endesa SA
100.00%
70.14%
Endesa Gas SAU
Zaragoza
Spain
45,261,350.00 EUR
Gas production,
transmission and
distribution
Line-by-line
Endesa Red SA
100.00%
70.14%
Endesa Generación
II SA
Endesa Generación
Nuclear
Endesa Generación
Portugal SA
Seville
Spain
63,107.00 EUR
Electricity generation
Line-by-line
Endesa SA
100.00%
70.14%
Seville
Spain
60,000.00 EUR
Subholding company
in the nuclear sector
Line-by-line
Paço de Arcos
Portugal
50,000.00 EUR
Electricity generation
Line-by-line
100.00%
70.14%
0.20%
70.14%
Endesa
Generación SA
Finerge-Gestão
de Projectos
Energéticos SA
Endesa Energía
SA
0.20%
Enel Green Power
España SL
0.20%
Energías de
Aragón II SL
0.20%
Endesa
Generación SA
99.20%
389
Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
Endesa Generación SA Seville
Spain
1,945,329,830.00 EUR
Endesa Ingeniería SLU Seville
Spain
1,000,000.00 EUR
Electricity generation
and sale
Consulting and
engineering services
Line-by-line
Endesa SA
100.00%
70.14%
Line-by-line
Endesa Red SA
100.00%
70.14%
Endesa Latinoamérica
SA
Endesa Operaciones y
Servicios Comerciales
SL
Madrid
Spain
796,683,058.00 EUR
Holding company
Line-by-line
Barcelona
Spain
10,138,580.00 EUR
Services
Line-by-line
Enel
Iberoamérica Srl
Endesa Energía
SA
100.00%
100.00%
100.00%
70.14%
Endesa Power
Trading Ltd
London
Endesa Red SA
Barcelona
Endesa SA
Madrid
Endesa Servicios SL
Madrid
Enel Alberta Wind Inc. Calgary
(Alberta)
United
Kingdom
Spain
Spain
Spain
Canada
Enel Atlantic Canada
LP
St. John
(Newfoundland)
Canada
2.00 GBP
Trading
Line-by-line
Endesa SA
100.00%
70.14%
714,985,850.00 EUR
Electricity distribution Line-by-line
Endesa SA
100.00%
70.14%
1,270,502,540.40 EUR
Holding company
Line-by-line
Enel
Iberoamérica Srl
70.14%
70.14%
89,999,790.00 EUR
Services
Line-by-line
Endesa SA
100.00%
70.14%
16,251,021.00 CAD
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
Canada Inc.
100.00%
68.29%
- CAD
Wind
Line-by-line
Enel Brasil
Participações Ltda
Rio de Janeiro
Brazil
1,631,724,677.53 BRL
Holding company
Line-by-line
Enel Cove Fort II LLC Wilmington
USA
(Delaware)
Enel Cove Fort LLC
Wilmington
(Delaware)
USA
- USD
- USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Enel Distributie
Banat SA
Enel Distributie
Dobrogea SA
Enel Distributie
Muntenia SA
Timisoara
Romania
382,158,580.00 RON
Electricity distribution Line-by-line
Costanza
Romania
280,285,560.00 RON
Electricity distribution Line-by-line
Bucharest
Romania
271,635,250.00 RON
Electricity distribution Line-by-line
Line-by-line
Enel Geothermal
LLC
100.00%
68.29%
Newind Group
Inc.
0.10%
68.29%
Enel Green Power
Canada Inc.
99.90%
Enel Green Power
Latin America
Ltda
0.01%
68.29%
Enel Green Power
International BV
99.99%
EGPNA
Development
Holdings LLC
Enel Investment
Holding BV
Enel Investment
Holding BV
Enel Investment
Holding BV
100.00%
68.29%
51.00%
51.00%
51.00%
51.00%
64.43%
64.43%
Enel Distribuzione SpA Rome
Enel Energia SpA
Rome
Italy
Italy
2,600,000,000.00 EUR
Electricity distribution Line-by-line
Enel SpA
100.00%
100.00%
302,039.00 EUR
Electricity and gas sales Line-by-line
Enel SpA
100.00%
100.00%
Enel Energie Muntenia
SA
Bucarest
Romania
37,004,350.00 RON
Electricity sale
Line-by-line
Enel Energie SA
Bucharest
Romania
140,000,000.00 RON
Electricity sale
Line-by-line
Enel Investment
Holding BV
Enel Investment
Holding BV
64.43%
64.43%
51.00%
51.00%
Enel Iberoamérica Srl Madrid
Spain
500,000,000.00 EUR
Holding company
Line-by-line
Enel SpA
100.00%
100.00%
Enel Esn Energo LLC
(in liquidation)
Saint Petersburg Russian
2,700,000.00 RUB
Federation
-
Operation and
maintenance of
electricity generation
plants
Enel Esn
Management BV
100.00%
75.00%
Enel Esn Management
BV
Amsterdam
Enel Finance
International NV
Amsterdam
The
Netherlands
The
Netherlands
18,000.00 EUR
Holding company
Line-by-line
Enel Produzione
SpA
75.00%
75.00%
1,478,810,370.00 EUR
Holding company
Line-by-line
Enel SpA
100.00%
100.00%
Enel Fortuna SA
Panama
Panama
100,000,000.00 USD
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
Panama SA
50.06%
34.18%
Enel France Sas
Paris
France
34,937,000.00 EUR
Holding company
Line-by-line
Enel Gas Rus LLC
Moscow
Russian
Federation
350,000.00 RUB
Energy services
Line-by-line
Enel Investment
Holding BV
Enel Investment
Holding BV
100.00%
100.00%
100.00%
100.00%
Enel Geothermal LLC Wilmington
USA
- USD
(Delaware)
Electricity generation
from renewable
resources
Line-by-line
Essex Company
100.00%
68.29%
390
ENEL ANNUAL REPORT 2014ATTACHMENTS Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
Enel Green Power
Bulgaria EAD
Enel Green Power
Cabeça de Boi SA
Enel Green Power CAI
Agroenergy Srl
Enel Green Power
Calabria Srl
Sofia
Bulgaria
35,231,000.00 BGN
Rio de Janeiro
Brazil
19,017,956.00 BRL
Rome
Italy
100,000.00 EUR
Rome
Italy
10,000.00 EUR
Enel Green Power
Canada Inc.
Montreal
(Quebec)
Canada
85,681,857.00 CAD
Enel Green Power
Chile Ltda
Santiago
Chile
15,649,360,000.00 CLP
Enel Green Power
Colombia
Enel Green Power
Costa Rica
Enel Green Power
Cristal Eólica SA
Bogotá DC
Colombia
300,000,000.00 COP
San José
Costa Rica
27,500,000.00 USD
Rio de Janeiro
Brazil
104,833,130.71 BRL
Plant construction,
operation and
maintenance
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
and sale from
renewable resources
Line-by-line
Enel Green Power
International BV
100.00%
68.29%
Line-by-line
Line-by-line
Enel Brasil
Participações
Ltda
Enel Green Power
SpA
100.00%
68.29%
100.00%
68.29%
Line-by-line
Enel Green Power
SpA
100.00%
68.29%
Line-by-line
Line-by-line
Line-by-line
Enel Green Power
North America
Inc.
Hydromac Energy
BV
Enel Green Power
Latin America
Ltda
Enel Green Power
International BV
100.00%
68.29%
0.01%
68.23%
99.99%
100.00%
68.29%
Line-by-line
Enel Green Power
International BV
100.00%
68.29%
Line-by-line
Enel Green Power
Damascena Eólica SA
Rio de Janeiro
Brazil
1,000,000.00 BRL
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
Delfina A Eólica SA
Enel Green Power
Delfina B Eólica SA
Enel Green Power
Delfina C Eólica SA
Enel Green Power
Delfina D Eólica SA
Enel Green Power
Delfina E Eólica SA
Rio de Janeiro
Brazil
1,000,000.00 BRL
Rio de Janeiro
Brazil
1,000,000.00 BRL
Rio de Janeiro
Brazil
1,000,000.00 BRL
Rio de Janeiro
Brazil
1,000,000.00 BRL
Rio de Janeiro
Brazil
1,000,000.00 BRL
Enel Green Power
Desenvolvimento Ltda
Rio de Janeiro
Brazil
13,900,297.00 BRL
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Line-by-line
Line-by-line
Line-by-line
Line-by-line
Line-by-line
Enel Green Power
Dois Riachos Eólica
SA
Enel Green Power
Ecuador SA
Rio de Janeiro
Brazil
1,000.00 BRL
Quito
Ecuador
26,000.00 USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Line-by-line
99.00%
68.29%
1.00%
1.00%
68.29%
99.00%
99.00%
67.61%
99.00%
67.61%
99.00%
67.61%
99.00%
67.61%
99.00%
67.61%
99.99%
68.29%
Enel Brasil
Participações
Ltda
Enel Green Power
Desenvolvimento
Ltda
Parque Eólico
Serra Azul Ltda
Enel Brasil
Participações
Ltda
Enel Brasil
Participações
Ltda
Enel Brasil
Participações
Ltda
Enel Brasil
Participações
Ltda
Enel Brasil
Participações
Ltda
Enel Brasil
Participações
Ltda
Enel Brasil
Participações
Ltda
Enel Green Power
Latin America
Ltda
Enel Green Power
Partecipazioni
Speciali Srl
Enel Green Power
International BV
0.01%
100.00%
68.29%
99.00%
68.29%
Enel Green Power
Latin America
Ltda
1.00%
391
Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
Consolidation
Enel Green Power El
Salvador SA de Cv
Enel Green Power
Emiliana Eólica SA
San Salvador
El Salvador
3,071,090.00 SVC
Rio de Janeiro
Brazil
120,000,000.00 BRL
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
International BV
Line-by-line
Line-by-line
Enel Green Power
SpA
70.00%
47.80%
Line-by-line
Enel Green Power
España SL
65.00%
44.87%
% holding
99.00%
Group %
holding
67.61%
99.00%
68.29%
1.00%
40.00%
69.03%
60.00%
1.00%
68.29%
99.00%
100.00%
68.29%
Enel Brasil
Participações
Ltda
Parque Eólico
Curva dos Ventos
Ltda
Endesa
Generación SA
Enel Green Power
International BV
Enel Green Power
Desenvolvimento
Ltda
Enel Brasil
Participações
Ltda
Enel Brasil
Participações
Ltda
Enel Green Power
International BV
Enel Green Power
Latin America
Ltda
Enel Green Power
International BV
Enel Green Power
SpA
Enel Brasil
Participações
Ltda
Enel Brasil
Participações
Ltda
Enel Brasil
Participações
Ltda
Enel Brasil
Participações
Ltda
Parque Eólico
Curva dos Ventos
Ltda
Hydromac Energy
BV
98.00%
68.29%
2.00%
100.00%
68.29%
100.00%
68.29%
99.00%
67.61%
99.00%
67.61%
99.00%
67.61%
99.00%
68.29%
1.00%
99.90%
68.23%
Enel Green Power
International BV
0.01%
1.00%
68.29%
99.00%
Parque Eólico
Serra Azul Ltda
Enel Brasil
Participações
Ltda
Enel Green Power
España SL
Madrid
Spain
11,152.74 EUR
Enel Green Power
Esperança Eólica SA
Rio de Janeiro
Brazil
1,000,000.00 BRL
Electricity generation
from renewable
resources
Line-by-line
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
Fazenda SA
Enel Green Power
Finale Emilia Srl
Enel Green Power
Granadilla SL
Enel Green Power
Guatemala SA
Enel Green Power
Hellas SA
Enel Green Power
International BV
Enel Green Power
Ituverava Norte
Solar SA
Enel Green Power
Ituverava Solar SA
Enel Green Power
Ituverava Sul Solar SA
Enel Green Power
Joana Eólica SA
Rio de Janeiro
Brazil
12,834,623.00 BRL
Rome
Italy
10,000,000.00 EUR
Tenerife
Spain
3,012.00 EUR
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Guatemala
Guatemala
5,000.00 GTQ
Holding company
Line-by-line
Maroussi
Greece
7,687,850.00 EUR
Holding company,
energy services
Line-by-line
Amsterdam
The
Netherlands
244,532,298.00 EUR
Holding company
Line-by-line
Rio de Janeiro
Brazil
1,000,000.00 BRL
Rio de Janeiro
Brazil
1,000,000.00 BRL
Rio de Janeiro
Brazil
1,000,000.00 BRL
Rio de Janeiro
Brazil
120,000,000.00 BRL
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Line-by-line
Line-by-line
Line-by-line
Enel Green Power
Latin America Ltda
Santiago
Chile
30,728,470.00 CLP
Holding company
Line-by-line
Enel Green Power
Maniçoba Eólica SA
Rio de Janeiro
Brazil
1,000,000.00 BRL
Electricity generation
from renewable
resources
Line-by-line
392
ENEL ANNUAL REPORT 2014ATTACHMENTS Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Enel Green Power
México S de RL de Cv
Mexico City
Mexico
973,703,665.00 MXN
Holding company
Line-by-line
Enel Green Power
Latin America
Ltda
0.01%
Enel Green Power
International BV
99.99%
Group %
holding
68.29%
Enel Green Power
Modelo I Eolica SA
Rio de Janeiro
Brazil
125,000,000.00 BRL
Electricity generation
from renewable
resources
Line-by-line
Enel Brasil
Participações
Ltda
99.00%
68.12%
Enel Green Power
Modelo II Eolica SA
Rio de Janeiro
Brazil
1,250,000,000.00 BRL
Endesa Brasil SA
1.00%
Electricity generation
from renewable
resources
Line-by-line
Enel Brasil
Participações
Ltda
99.00%
68.12%
Enel Green Power
North America
Development LLC
Wilmington
(Delaware)
Enel Green Power
North America Inc.
Wilmington
(Delaware)
USA
USA
- USD
50.00 USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Endesa Brasil SA
1.00%
Line-by-line
Enel Green Power
International BV
100.00%
68.29%
Line-by-line
Enel Green Power
International BV
100.00%
68.29%
Enel Green Power
Panama SA
Enel Green Power
Partecipazioni
Speciali Srl
Enel Green Power Pau
Ferro Eólica SA
Panama
Panama
3,000.00 USD
Holding company
Line-by-line
Rome
Italy
10,000.00 EUR
Rio de Janeiro
Brazil
135,000,000.00 BRL
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Line-by-line
Enel Green Power
Pedra do Gerônimo
Eólica SA
Rio de Janeiro
Brazil
135,000,000.00 BRL
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
International BV
Enel Green Power
SpA
100.00%
68.29%
100.00%
68.29%
99.00%
68.28%
1.00%
99.00%
68.28%
1.00%
Enel Brasil
Participações
Ltda
Parque Eólico
Fontes dos
Ventos Ltda
Enel Brasil
Participações
Ltda
Parque Eólico
Fontes dos
Ventos Ltda
Enel Green Power
Perù SA
Lima
Peru
1,000.00 PEN
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
International BV
99.90%
68.23%
Enel Green Power
Latin America
Ltda
0.01%
Enel Green Power
Primavera Eolica SA
Rio de Janeiro
Brazil
140,000,000.00 BRL
Electricity generation
and sale from renewable
resources
Line-by-line
Enel Brasil
Participações
Ltda
99.00%
68.29%
Enel Green Power
Puglia Srl
Rome
Italy
1,000,000.00 EUR
Enel Green Power
Romania Srl
Sat Rusu de Sus
Nuseni
Romania
2,430,631,000.00 RON
Enel Green Power
RSA (Pty) Ltd
Johannesburg South Africa
1,000.00 ZAR
Enel Green Power
Salto Apiacás SA
Niterói
(Rio de Janeiro)
Brazil
14,412,120.00 BRL
Enel Green Power
Desenvolvimento
Ltda
Enel Green Power
SpA
1.00%
100.00%
68.29%
Line-by-line
Line-by-line
Enel Green Power
International BV
100.00%
68.29%
Line-by-line
Enel Green Power
South Africa
100.00%
68.29%
Line-by-line
Enel Brasil
Participações
Ltda
99.00%
68.29%
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Parque Eólico
Serra Azul Ltda
1.00%
393
Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
Enel Green Power
San Gillio Srl
Enel Green Power
São Judas Eólica SA
Rome
Italy
10,000.00 EUR
Rio de Janeiro
Brazil
100,000,000.00 BRL
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
SpA
80.00%
54.63%
Electricity generation
and sale from renewable
resources
Line-by-line
Enel Brasil
Participações
Ltda
99.00%
68.29%
Enel Green Power
Solar Energy Srl
Rome
Italy
10,000.00 EUR
Enel Green Power
South Africa
Amsterdam
The
Netherlands
18,000.00 EUR
Enel Green Power
SpA
Enel Green Power
Strambino Solar Srl
Enel Green Power
Tacaicó Eólica SA
Rome
Italy
1,000,000,000.00 EUR
Turin
Italy
250,000.00 EUR
Rio de Janeiro
Brazil
80,000,000.00 BRL
Enel Green Power
Turkey Enerji Yatirimlari
Anonim Şirketi
Istanbul
Turkey
10,154,658.00 TRY
Enel Green Power
Uruguay SA
Enel Green Power
Villoresi Srl
Enel Ingegneria e
Ricerca SpA
Oficina 1508
Uruguay
400,000.00 UYU
Rome
Italy
200,000.00 EUR
Rome
Italy
30,000,000.00 EUR
Enel Green Power
Desenvolvimento
Ltda
Enel Green Power
SpA
1.00%
100.00%
68.29%
Line-by-line
Line-by-line
Enel Green Power
International BV
100.00%
68.29%
Line-by-line
Enel SpA
68.29%
68.29%
Line-by-line
Enel Green Power
SpA
60.00%
40.97%
Line-by-line
99.00%
68.28%
1.00%
Enel Brasil
Participações
Ltda
Parque Eólico
Fontes dos
Ventos Ltda
Line-by-line
Enel Green Power
International BV
100.00%
68.29%
Line-by-line
Enel Green Power
International BV
100.00%
68.29%
Equity
Enel Green Power
SpA
51.00%
34.83%
Line-by-line
Enel SpA
100.00%
100.00%
Design, development,
construction
and operation of
photovoltaic plants
(holding company)
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Analysis, design,
construction and
maintenance of
engineering works
Enel Insurance NV
Amsterdam
The
Netherlands
60,000.00 EUR
Holding company
Line-by-line
Enel Investment
Holding BV
50.00%
85.07%
Endesa SA
50.00%
Enel Investment
Holding BV
Amsterdam
The
Netherlands
1,593,050,000.00 EUR
Holding company
Line-by-line
Enel SpA
100.00%
100.00%
Enel Italia Srl
Rome
Italy
50,000,000.00 EUR
Enel Kansas LLC
Wilmington
(Delaware)
USA
- USD
Enel Lease Eurl
Lyon
France
500,000.00 EUR
Enel Longanesi
Developments Srl
Rome
Italy
10,000,000.00 EUR
Enel M@P Srl
Rome
Italy
100,000.00 EUR
Personnel
administration activities,
information technology
and business services
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Prospecting and
development of
hydrocarbon fields
Metering, remote
control and connectivity
services via power line
communication
Line-by-line
Enel SpA
100.00%
100.00%
Line-by-line
Enel Green Power
North America
Inc.
100.00%
68.29%
Line-by-line
Enel France Sas
100.00%
100.00%
Line-by-line
Enel Trade SpA
100.00%
100.00%
Line-by-line
Enel Distribuzione
SpA
100.00%
100.00%
394
ENEL ANNUAL REPORT 2014ATTACHMENTS Enel Servicii Comune
SA
Enel Servizio Elettrico
SpA
Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
Enel Nevkan Inc.
Wilmington
(Delaware)
USA
Enel Oil & Gas SpA
Rome
Enel Oil & Gas
España SL
Madrid
Italy
Spain
- USD
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
North America
Inc.
100.00%
68.29%
200,000,000.00 EUR
Upstream gas
Line-by-line
Enel SpA
100.00%
100.00%
33,000.00 EUR
Hydrocarbon
prospecting,
development and
production
Line-by-line
Enel Oil & Gas
SpA
100.00%
100.00%
Enel Productie Srl
Bucharest
Romania
20,210,200.00 RON
Electricity generation
Line-by-line
Enel Investment
Holding BV
100.00%
100.00%
Enel Produzione SpA Rome
Italy
1,800,000,000.00 EUR
Electricity generation
Line-by-line
Enel SpA
100.00%
100.00%
Enel Romania Srl
Judetul Ilfov
Romania
200,000.00 RON
Business services
Line-by-line
Enel Russia OJSC
Ekaterinburg
Enel Salt Wells LLC
Wilmington
(Delaware)
Russian
Federation
USA
35,371,898,370.00 RUB
Electricity generation
Line-by-line
- USD
Electricity generation
from renewable
resources
Line-by-line
Bucharest
Romania
33,000,000.00 RON
Energy services
Line-by-line
Enel Investment
Holding BV
Enel Investment
Holding BV
Enel Geothermal
LLC
100.00%
100.00%
56.43%
56.43%
100.00%
68.29%
Enel Distributie
Dobrogea SA
50.00%
51.00%
Enel Distributie
Banat SA
50.00%
Rome
Italy
10,000,000.00 EUR
Electricity sale
Line-by-line
Enel SpA
100.00%
100.00%
Enel Sole Srl
Rome
Enel Soluções
Energéticas Ltda
Niterói
(Rio de Janeiro)
Italy
Brazil
4,600,000.00 EUR
Public lighting systems Line-by-line
Enel SpA
100.00%
100.00%
5,000,000.00 BRL
Electricity generation
from renewable
resources
Line-by-line
Enel Brasil
Participações
Ltda
99.99%
68.29%
Enel Stillwater LLC
Wilmington
(Delaware)
USA
- USD
Electricity generation
from renewable
resources
Line-by-line
Enel Stoccaggi Srl
(in liquidation)
Rome
Italy
3,030,000.00 EUR
-
Construction and
operation of storage
fields. Storage of
natural gas
Parque Eólico
Fontes dos
Ventos Ltda
Enel Geothermal
LLC
0.01%
100.00%
68.29%
Enel Trade SpA
100.00%
100.00%
Enel Surprise Valley LLC Wilmington
USA
(Delaware)
Enel Texkan Inc.
Wilmington
(Delaware)
USA
- USD
- USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Enel Geothermal
LLC
100.00%
68.29%
Line-by-line
Chi Power Inc.
100.00%
68.29%
Enel Trade d.o.o.
Zagabria
Croatia
2,240,000.00 HRK
Electricity trading
Line-by-line
Enel Trade SpA
100.00%
100.00%
Enel Trade Romania Srl Bucharest
Romania
21,250,000.00 RON
Electricity sourcing and
trading
Line-by-line
Enel Trade SpA
100.00%
100.00%
300,000.00 EUR
Electricity trading
Line-by-line
Enel Trade SpA
100.00%
100.00%
Enel Trade Serbia d.o.o. Belgrade
Enel Trade SpA
Rome
Serbia
Italy
Enel.Factor SpA
Enel.Newhydro Srl
Enel.si Srl
Rome
Rome
Rome
Italy
Italy
Italy
Enelco SA
Athens
Greece
60,108.80 EUR
Enelpower Contractor
and Development
Saudi Arabia Ltd
Riyad
Saudi Arabia
5,000,000.00 SAR
90,885,000.00 EUR
Fuel trading and
logistics - Electricity
sales
12,500,000.00 EUR
Factoring
1,000,000.00 EUR
5,000,000.00 EUR
Engineering and water
systems
Plant engineering and
energy services
Plant construction,
operation and
maintenance
Plant construction,
operation and
maintenance
Line-by-line
Enel SpA
100.00%
100.00%
Line-by-line
Line-by-line
Enel SpA
Enel SpA
100.00%
100.00%
100.00%
100.00%
Line-by-line
Enel Energia SpA 100.00%
100.00%
Line-by-line
Enel Investment
Holding BV
75.00%
75.00%
Line-by-line
Enelpower SpA
51.00%
51.00%
395
Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
Consolidation
Enelpower do Brasil
Ltda
Rio de Janeiro
Brazil
1,242,000.00 BRL
Electrical engineering
Line-by-line
Enel Green Power
Latin America
Ltda
% holding
0.01%
Group %
holding
68.29%
Enelpower SpA
Milan
Italy
2,000,000.00 EUR
ENEOP-Eólicas de
Portugal SA
Paço de Arcos
Portugal
50,000.00 EUR
Engineering and
construction
Electricity generation
from renewable
resources
Equity
Enercor - Produção
de Energia ACE
Montijo
Portugal
- EUR
Electricity generation
Line-by-line
Energética de Rosselló
AIE
Energía de
La Loma SA
Barcelona
Spain
3,606,060.00 EUR
Cogeneration of
electricity and heat
Equity
Jean
Spain
4,450,000.00 EUR
Bio-mass
Line-by-line
Line-by-line
Energia Eolica Srl
Rome
Italy
4,840,000.00 EUR
Energia Global de
México (Enermex) SA
de Cv
Energia Global
Operaciones SA
Mexico City
Mexico
50,000.00 MXN
San José
Costa Rica
10,000.00 CRC
Energia Marina SpA
Santiago
Chile
2,404,240,000,00 CLP
Energia Nueva
de Iggu S de RL de Cv
Mexico City
Mexico
3,139,737,500.00 MXN
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
99.99%
Enel Brasil
Participações
Ltda
Line-by-line
Enel SpA
100.00%
100.00%
17.98%
24.82%
17.98%
70.00%
69.03%
TP - Sociedade
Térmica
Portuguesa SA
Finerge-Gestão
de Projectos
Energéticos SA
TP - Sociedade
Térmica
Portuguesa SA
Pp - Co-Geração
SA
Enel Green Power
España SL
Enel Green Power
España SL
Enel Green Power
SpA
30.00%
27.00%
18.64%
50.86%
35.11%
51.00%
34.83%
Line-by-line
Enel Green Power
International BV
99.00%
67.61%
Line-by-line
Enel Green Power
Costa Rica
100.00%
68.29%
Line-by-line
Enel Green Power
Chile Ltda
25.00%
17.06%
Line-by-line
Energía Nueva
Energía Limpia
Mexico S de RL
de Cv
Enel Green
PowerMéxico S
de RL de Cv
Enel Green Power
International BV
Enel Green Power
Guatemala SA
Enel Green Power
España SL
0.01%
68.23%
99.90%
99.96%
68.29%
0.04%
50.00%
34.52%
Enel Green Power
España SL
Enel Green Power
España SL
Enel Green Power
España SL
100.00%
69.03%
66.67%
46.02%
68.42%
47.23%
Energía Nueva Energía
Limpia Mexico S de RL
de Cv
Mexico City
Mexico
5,339,650.00 MXN
Electricity generation
from renewable
resources
Line-by-line
Energías Alternativas
del Sur SL
Las Palmas de
Gran Canaria
Spain
601,000.00 EUR
Electricity generation
from renewable
resources
Equity
Energías de Aragón
I SL
Energías de Aragón
II SL
Zaragoza
Spain
3,200,000.00 EUR
Electricity transmission,
distribution and sale
Line-by-line
Endesa
Generación SA
100.00%
70.14%
Zaragoza
Spain
18,500,000.00 EUR
Electricity generation
Line-by-line
Energías de Graus SL
Barcelona
Spain
1,298,160.00 EUR
Hydroelectric plants
Line-by-line
Energías de
La Mancha SA
Villarta de San
Juan (Ciudad
Real)
Spain
279,500.00 EUR
Bio-mass
Line-by-line
La Coruña
Spain
270,450.00 EUR
Madrid
Spain
963,300.00 EUR
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
España SL
77.00%
53.15%
Line-by-line
Enel Green Power
España SL
80.00%
55.22%
Energías Especiales
de Careon SA
Energías Especiales
de Pena Armada SA
396
ENEL ANNUAL REPORT 2014ATTACHMENTS Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
Energías Especiales
del Alto Ulla SA
Energías Especiales
del Bierzo SA
Energías Renovables
La Mata SAPI de Cv
Madrid
Spain
1,722,600.00 EUR
Torre del Bierzo Spain
1,635,000.00 EUR
Mexico City
Mexico
656,615,400.00 MXN
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
España SL
100.00%
69.03%
Equity
Enel Green Power
España SL
50.00%
34.52%
Line-by-line
Energia Nueva
de Iggu S de RL
de Cv
0.01%
68.29%
Energie Eléctrique de
Tahaddart SA
Energosluzby AS
(in liquidation)
Tangeri
Morocco
750,400,000.00 MAD
Combined-cycle
generation plants
Equity
Trnava
Slovakia
33,194.00 EUR
Business services
-
Energotel AS
Bratislava
Slovakia
2,191,200.00 EUR
Energy Hydro
Piave Srl
Enerlasa SA
(in liquidation)
Soverzene
Italy
800,000.00 EUR
Madrid
Spain
1,021,700.58 EUR
Enerlive Srl
Rome
Italy
6,520,000.00 EUR
Enersis SA
Santiago
Chile
5,669,280.72 CLP
Enexon Hellas SA
Maroussi
Greece
18,771,600.00 EUR
Eolcinf - Produção de
Energia Eólica Lda
Eolflor - Produção de
Energia Eólica Lda
Porto
Portugal
5,000.00 EUR
Porto
Portugal
5,000.00 EUR
Eólica del Noroeste SL La Coruña
Spain
36,100.00 EUR
99.99%
Enel Green Power
México S de RL
de Cv
Endesa
Generación SA
Slovenské
elektrárne AS
Slovenské
elektrárne AS
Enel Produzione
SpA
Enel Green Power
España SL
32.00%
22.45%
100.00%
66.00%
20.00%
13.20%
51.00%
51.00%
45.00%
31.06%
Operation of optical
fiber network
Equity
Electricity purchases
and sales
Line-by-line
Electricity generation
from renewable
resources
-
Electricity generation
from renewable
resources
Electricity generation
and distribution
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Wind plant
development
Line-by-line
Maicor Wind Srl 100.00%
40.97%
Line-by-line
Enel
Iberoamérica Srl
20.30%
60.62%
Endesa
Latinoamérica SA
40.32%
Line-by-line
Enel Green Power
Hellas SA
100.00%
68.29%
Line-by-line
Line-by-line
Line-by-line
Finerge-Gestão
de Projectos
Energéticos SA
Finerge-Gestão
de Projectos
Energéticos SA
Enel Green Power
España SL
Enel Green Power
España SL
51.00%
35.21%
51.00%
35.21%
51.00%
35.21%
40.00%
27.61%
Oviedo
Spain
90,000.00 EUR
Electricity generation
from renewable
resources
Equity
Rio Grande
do Norte
Brazil
1,839,000.00 BRL
Wind plants
Line-by-line
Endesa Brasil SA
99.95%
51.13%
Eólica del Principado
SAU
Eólica Fazenda
Nova - Generação e
Comercialização de
Energia SA
Eólica Valle del
Ebro SA
Eólica Zopiloapan
SAPI de Cv
Zaragoza
Spain
5,559,340.00 EUR
Mexico City
Mexico
1,877,201,540.00 MXN
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Eólicas de Agaete SL
Las Palmas de
Gran Canaria
Spain
Eólicas de
Fuencaliente SA
Las Palmas de
Gran Canaria
Spain
240,400.00 EUR
216,360.00 EUR
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
España SL
50.50%
34.86%
Line-by-line
Line-by-line
Enel Green Power
Partecipazioni
Speciali Srl
Enel Green Power
México S de RL
de Cv
Enel Green Power
España SL
39.50%
65.88%
56.98%
80.00%
55.22%
Line-by-line
Enel Green Power
España SL
55.00%
37.97%
397
Company name
Headquarters
Country
Share capital Currency Activity
Eólicas de
Fuerteventura AIE
Fuerteventura
(Las Palmas)
Spain
- EUR
Eólicas de La
Patagonia SA
Buenos Aires
Argentina
480,930.00 ARS
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Consolidation
method
Equity
Held by
% holding
Group %
holding
Enel Green Power
España SL
40.00%
27.61%
Equity
Enel Green Power
España SL
50.00%
34.52%
Eólicas de Lanzarote
SL
Las Palmas de
Gran Canaria
Eólicas de Tenerife
AIE
Santa Cruz de
Tenerife
Spain
Spain
Eólicas de Tirajana
AIE
Las Palmas de
Gran Canaria
Spain
1,758,000.00 EUR
Electricity generation
and distribution
Equity
420,708.40 EUR
- EUR
Equity
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Water treatment and
distribution
Eolverde - SGPS SA
Porto
Portugal
50,000.00 EUR
Line-by-line
Erecosalz SL
(in liquidation)
Essex Company
Zaragoza
Spain
18,000.00 EUR
Cogeneration of
electricity and heat
-
Boston
(Massachusetts)
USA
100.00 USD
Enel Green Power
España SL
Enel Green Power
España SL
40.00%
27.61%
50.00%
34.52%
Line-by-line
Enel Green Power
España SL
60.00%
41.42%
Finerge-Gestão
de Projectos
Energéticos SA
Enel Green Power
España SL
Enel Green Power
North America
Inc.
Enel Green Power
Uruguay SA
75.00%
51.77%
33.00%
22.78%
100.00%
68.29%
100.00%
68.29%
Line-by-line
Line-by-line
Line-by-line
Enel Green Power
España SL
70.00%
48.32%
Line-by-line
Enel Green Power
España SL
73.60%
50.81%
Line-by-line
Enel Green Power
España SL
65.00%
44.87%
Line-by-line
Enel Green Power
España SL
90.00%
62.13%
Line-by-line
Enel Green Power
España SL
90.00%
62.13%
Line-by-line
Line-by-line
Aurora
Distributed Solar
LLC
Enel Green Power
España SL
100.00%
68.29%
100.00%
69.03%
Line-by-line
Chi Minnesota
Wind LLC
51.00%
34.83%
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Cogeneration of
electricity and heat
and generation from
renewable resources
Electricity generation
from renewable
resources
Estrellada SA
Montevideo
Uruguay
448,000.00 UYU
Explotaciones Eólicas
de Escucha SA
Explotaciones Eólicas
El Puerto SA
Explotaciones Eólicas
Saso Plano SA
Explotaciones Eólicas
Sierra Costera SA
Explotaciones Eólicas
Sierra La Virgen SA
Zaragoza
Spain
3,505,000.00 EUR
Teruel
Spain
3,230,000.00 EUR
Zaragoza
Spain
5,488,500.00 EUR
Zaragoza
Spain
8,046,800.00 EUR
Zaragoza
Spain
4,200,000.00 EUR
Fiesta City Solar LLC Minnesota
USA
- USD
Finerge-Gestão de
Projectos Energéticos
SA
Porto
Portugal
750,000.00 EUR
Florence Hills LLC
Minneapolis
(Minnesota)
USA
- USD
Fotovoltaica Insular
SL
Las Palmas de
Gran Canaria
Spain
3,008.00 EUR
Photovoltaic plants
Equity
Fuentes Renovables
de Guatemala SA
Guatemala
Guatemala
5,000.00 GTQ
Fulcrum Inc.
Boise (Idaho)
USA
1,002.50 USD
Electricity generation
from renewable
resources
Line-by-line
Electricity generation
from renewable
resources
Line-by-line
Gas Atacama Chile SA Santiago
Chile
185,025,186.00 USD
Electricity generation
Equity
Gas Atacama SA
Santiago
Chile
291,484,088.00 USD
Holding company
Line-by-line
Endesa Ingeniería
SLU
Enel Green Power
Guatemala SA
50.00%
35.07%
60.00%
66.61%
Renovables de
Guatemala SA
40.00%
100.00%
68.29%
0.05%
36.80%
Enel Green Power
North America
Inc.
Compañía
Eléctrica Tarapacá
SA
Gas Atacama SA
99.90%
100.00%
36.82%
Inversiones Gas
Atacama Holding
Ltda
398
ENEL ANNUAL REPORT 2014ATTACHMENTS Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
Gas y Electricidad
Generación SAU
Palma de
Mallorca
Gasificadora Regional
Canaria SA
Las Palmas de
Gran Canaria
Spain
Spain
213,775,700.00 EUR
Electricity generation
Line-by-line
Endesa
Generación SA
100.00%
70.14%
240,000.00 EUR
Gas distribution
Line-by-line
Endesa Gas SAU
72.00%
70.14%
Gasoducto Atacama
Argentina SA
Santiago
Chile
208,173,124.00 USD
Natural gas transport
Equity
Gasoducto Atacama
Argentina SA Sucursal
Argentina
Buenos Aires
Argentina
- ARS
Natural gas transport
Equity
Gasoducto Taltal SA
Santiago
Chile
18,638.52 CLP
Natural gas transport
Equity
28.00%
0.03%
36.80%
Endesa
Generación
Portugal SA
Compañía
Eléctrica Tarapacá
SA
Gas Atacama
Chile SA
42.71%
Gas Atacama SA
57.23%
100.00%
36.80%
99.88%
36.80%
0.12%
Gasoducto
Atacama
Argentina SA
Gas Atacama
Chile SA
Gasoducto
Atacama
Argentina SA
Gauley Hydro LLC
Gauley River
Management
Corporation
Wilmington
(Delaware)
Willison
(Vermont)
Gauley River Power
Partners LP
Willison
(Vermont)
USA
USA
USA
- USD
1.00 USD
- USD
Generadora de
Occidente Ltda
Generadora
Montecristo SA
Guatemala
Guatemala
16,261,697.33 GTQ
Guatemala
Guatemala
3,820,000.00 GTQ
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Essex Company
100.00%
68.29%
Line-by-line
Line-by-line
Line-by-line
Enel Green Power
North America
Inc.
Gauley River
Management
Corporation
Enel Green Power
International BV
100.00%
68.29%
100.00%
68.29%
99.00%
68.29%
Enel Green Power
Guatemala SA
1.00%
Line-by-line
Enel Green Power
International BV
99.99%
68.29%
Enel Green Power
Guatemala SA
0.01%
Generalima SA
Lima
Generandes Perú SA
Lima
Peru
Peru
146,534,335.00 PEN
Holding company
Line-by-line
Enersis SA
100.00%
60.62%
853,429,020.00 PEN
Holding company
Line-by-line
Santiago
Chile
64,779,811,451.00 CLP
Line-by-line
Geotérmica del
Norte SA
Geronimo Huron
Wind Farm LLC
Michigan
USA
Geronimo Wind
Energy LLC
Minneapolis
(Minnesota)
USA
Southern Cone
Power Perú SAA
39.00%
45.82%
Empresa Nacional
de Electricidad
SA.
Enel Green Power
Chile Ltda
61.00%
51.00%
34.80%
Line-by-line
Enel Kansas LLC
100.00%
68.29%
Equity
Line-by-line
EGP Geronimo
Holding
Company Inc.
Enel Green Power
RSA (Pty) Ltd
49.20%
33.60%
60.00%
40.97%
- USD
- USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Gibson Bay Wind
Farm (RF) Proprietary
Limited
Johannesburg South Africa
1,000.00 ZAR
Gnl Chile SA
Santiago
Chile
3,026,160.00 USD
Design and LNG
supply
Equity
Empresa Nacional
de Electricidad SA
33.33%
12.12%
399
Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
Gnl Norte SA
Santiago
Chile
1,000,000.00 CLP
Electricity generation
Equity
Gasoducto Taltal
SA
50.00%
36.80%
Gas Atacama
Chile SA
50.00%
Gnl Quintero SA
Santiago
Chile
114,057,353.00 USD
Design and LNG
supply
Equity
Empresa Nacional
de Electricidad SA
20.00%
7.27%
Goodwell Wind
Project LLC
Wilmington
(Delaware)
USA
- USD
Electricity generation
from renewable
resources
Line-by-line
Enel Kansas LLC
100.00%
68.29%
Gorona del Viento
El Hierro SA
Valverde de El
Hierro
Spain
23,936,710.00 EUR
Madrid
Spain
1,717,049.55 EUR
Seville
Spain
3,006.00 EUR
Bucharest
Romania
675,400.00 RON
Green Fuel
Corporación SA
(in liquidation)
Guadarranque
Solar 4 SL
Unipersonal
GV Energie
Rigenerabili ITAL-RO
Srl
Hadley Ridge LLC
Minneapolis
(Minnesota)
USA
Hastings Solar LLC
Minnesota
USA
- USD
- USD
Hidroeléctrica de
Catalunya SL
Hidroeléctrica de
Ourol SL
Hidroeléctrica
DonRafael SA
Hidroeléctrica El
Chocón SA
Barcelona
Spain
126,210.00 EUR
Lugo
Spain
1,608,200.00 EUR
Costa Rica
Costa Rica
10,000.00 CRC
Buenos Aires
Argentina
298,584,050.00 ARS
Development and
maintenance of El Hierro
generation plant
Equity
Electricity generation
from renewable
resources
-
Unión Eléctrica
de Canarias
Generación SAU
Enel Green Power
España SL
30.00%
21.04%
24.24%
16.73%
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity transmission
and distribution
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
and sale
Line-by-line
Endesa
Generación II SA
100.00%
70.14%
Line-by-line
Enel Green Power
Romania Srl
100.00%
68.29%
Line-by-line
Chi Minnesota
Wind LLC
51.00%
34.83%
Line-by-line
Aurora
Distributed Solar
LLC
100.00%
68.29%
Line-by-line
Endesa Red SA
100.00%
70.14%
Equity
Enel Green Power
España SL
30.00%
20.71%
Line-by-line
Enel Green Power
Costa Rica
65.00%
44.39%
Line-by-line
Empresa Nacional
de Electricidad SA
2.48%
23.77%
Hidroelectricidad del
Pacifico S de RL de Cv
Mexico City
Mexico
30,890,736.00 MXN
Hidroflamicell SL
Barcelona
Spain
78,120.00 EUR
Electricity generation
from renewable
resources
Electricity distribution
and sale
Line-by-line
Line-by-line
Hidroinvest SA
Buenos Aires
Argentina
55,312,093.00 ARS
Holding company
Line-by-line
Hidromondego -
Hidroelectrica do
Mondego Lda
Lisbon
Portugal
3,000.00 EUR
Hydroelectric power
Line-by-line
Highfalls Hydro
Company Inc.
Wilmington
(Delaware)
USA
- USD
Hipotecaria de Santa
Ana Ltda de Cv
Colonia
Escalon
El Salvador
404,930.00 SVC
Hispano Gneración de
Energía Solar SL
Jerez de los
Caballeros
(Badajoz)
Spain
3,500.00 EUR
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Equity
Line-by-line
400
Endesa Argentina
SA
6.19%
Hidroinvest SA
59.00%
Enel Green
Power México
S de RL de Cv
Hidroeléctrica de
Catalunya SL
Empresa Nacional
de Electricidad SA
99.99%
68.28%
75.00%
52.61%
41.94%
34.94%
Endesa Argentina
SA
54.15%
Endesa
Generación SA
Endesa
Generación
Portugal SA
Enel Green Power
North America
Inc.
Enel Green Power
El Salvador SA
de Cv
Enel Green Power
España SL
90.00%
70.14%
10.00%
100.00%
68.29%
20.00%
13.52%
51.00%
35.21%
ENEL ANNUAL REPORT 2014ATTACHMENTS Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
Consolidation
Hope Creek LLC
Minneapolis
(Minnesota)
Hydro Development
Group Inc.
Albany
(New York)
Hydro Dolomiti
Enel Srl
Hydro Energies
Corporation
Trento
Willison
(Vermont)
Hydro Finance Holding
Company Inc.
Wilmington
(Delaware)
USA
USA
Italy
USA
USA
- USD
12.25 USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Chi Minnesota
Wind LLC
Line-by-line
3,000,000.00 EUR
Electricity generation,
purchases and sales
Equity
5,000.00 USD
100.00 USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Line-by-line
Development of studies
and projects for the use
of hydrogen
Line-by-line
% holding
51.00%
Group %
holding
34.83%
Enel Green Power
North America
Inc.
Enel Produzione
SpA
Enel Green Power
North America
Inc.
Enel Green Power
North America
Inc.
Enel Produzione
SpA
100.00%
68.29%
49.00%
49.00%
100.00%
68.29%
100.00%
68.29%
60.00%
60.00%
Enel Green Power
International BV
100.00%
68.29%
Hydrogen Park-
Marghera per
l’idrogeno Scrl
Venice
Italy
245,000.00 EUR
Hydromac Energy BV Amsterdam
The
Netherlands
18,000.00 EUR
Holding company
Line-by-line
Ict Servicios
Informáticos Ltda
Santiago
Chile
500,000,000.00 CLP
ICT services
Line-by-line
Chilectra SA
1.00%
60.61%
I-EM Srl
Turin
Italy
10,001.00 EUR
Ingendesa do Brasil
Ltda
Rio de Janeiro
Brazil
500,000.00 BRL
Design and
development
Equity
Design, engineering
and consulting
Line-by-line
Enersis SA
Enel Italia Srl
99.00%
0.01%
0.01%
99.00%
37.27%
Compañía
Eléctrica Tarapacá
SA
Empresa Nacional
de Electricidad SA
1.00%
Inkia Holdings (Acter)
Ltd
Lima
Peru
6,055,300.00 USD
Holding
Line-by-line
Enersis SA
100.00%
60.62%
Inkolan Información
y Coordinación de
obras AIE
Inmobiliaria Manso
de Velasco Ltda
International Endesa
BV
International Eolian
of Grammatiko SA
International Eolian
of Korinthia SA
International Eolian
of Peloponnisos 1 SA
International Eolian
of Peloponnisos 2 SA
International Eolian
of Peloponnisos 3 SA
International Eolian
of Peloponnisos 4 SA
International Eolianof
Peloponnisos 5 SA
International Eolian
of Peloponnisos 6 SA
International Eolian
of Peloponnisos 7 SA
International Eolian
of Peloponnisos 8 SA
Bilbao
Spain
84,140.00 EUR
Information on
infrastructure of Inkolan
associates
Equity
Endesa
Distribución
Eléctrica SL
14.29%
10.02%
Santiago
Chile
25,916,800,510.00 CLP
Engineering and
construction
Line-by-line
Enersis SA
100.00%
60.62%
Amsterdam
The
Netherlands
15,428,520.00 EUR
Holding company
Line-by-line
Endesa SA
100.00%
70.14%
Maroussi
Greece
436,000.00 EUR
Maroussi
Greece
6,471,798.00 EUR
Maroussi
Greece
418,000.00 EUR
Maroussi
Greece
514,000.00 EUR
Maroussi
Greece
423,000.00 EUR
Maroussi
Greece
465,000.00 EUR
Maroussi
Greece
509,500.00 EUR
Maroussi
Greece
447,000.00 EUR
Maroussi
Greece
418,000.00 EUR
Maroussi
Greece
418,000.00 EUR
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Equity
Enel Green Power
Hellas SA
30.00%
20.49%
Line-by-line
Enel Green Power
Hellas SA
80.00%
54.63%
Equity
Equity
Equity
Equity
Equity
Equity
Equity
Equity
Enel Green Power
Hellas SA
30.00%
20.49%
Enel Green Power
Hellas SA
30.00%
20.49%
Enel Green Power
Hellas SA
30.00%
20.49%
Enel Green Power
Hellas SA
30.00%
20.49%
Enel Green Power
Hellas SA
30.00%
20.49%
Enel Green Power
Hellas SA
30.00%
20.49%
Enel Green Power
Hellas SA
30.00%
20.49%
Enel Green Power
Hellas SA
30.00%
20.49%
401
Company name
Headquarters
Country
Share capital Currency Activity
Maroussi
Greece
224,000.00 EUR
Electricity generation
from renewable
resources
Consolidation
method
Equity
Held by
% holding
Group %
holding
Enel Green Power
Hellas SA
30.00%
20.49%
Rome
Italy
24,000.00 EUR
Long-distance learning -
Enel Italia Srl
13.04%
13.04%
Lima
Peru
287,837,245.00 PEN
Holding company
Line-by-line
Chilectra SA
30.15%
60.45%
Santiago
Chile
333,520,000.00 USD
Natural gas transport
Line-by-line
36.82%
69.85%
50.00%
Enersis SA
Compañía
Eléctrica Tarapacá
SA
Empresa Nacional
de Electricidad SA
50.00%
Bogotá DC
Colombia
5,000,000.00 COP
Electricity transmission
and distribution
Line-by-line
Codensa SA ESP
100.00%
29.34%
Buenos Aires
Argentina
241,490,000.00 ARS
Holding company
Line-by-line
Enersis SA
57.14%
34.64%
Rio de Janeiro
Brazil
61,474,475.77 BRL
Electricity generation
and sale
Line-by-line
Johannesburg South Africa
1,000.00 ZAR
International Eolian
of Skopelos SA
International
Multimedia University
Srl
Inversiones Distrilima
SA
Inversiones
Gas Atacama
Holding Ltda
Inversora Codensa
Sas
Inversora Dock Sud
SA
Isamu Ikeda Energia
SA
Italgest Energy (Pty)
Ltd
Line-by-line
Enel Green Power
Solar Energy Srl
100.00%
68.29%
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Line-by-line
Line-by-line
Line-by-line
Line-by-line
Line-by-line
Line-by-line
Equity
Equity
Line-by-line
Line-by-line
Line-by-line
Enel Brasil
Participações
Ltda
Enel Green Power
RSA (Pty) Ltd
Chi Minnesota
Wind LLC
Chi Minnesota
Wind LLC
Chi Minnesota
Wind LLC
100.00%
68.29%
100.00%
68.29%
51.00%
34.83%
51.00%
34.83%
51.00%
34.83%
100.00%
68.29%
100.00%
68.29%
100.00%
68.29%
Enel Green Power
North America
Inc.
Enel Green Power
North America
Inc.
Enel Green
Power Turkey
Enerji Yatirimlari
Anonim ?irketi
Endesa Gas SAU
29.26%
Endesa
Generación SA
33.33%
20.52%
23.38%
100.00%
68.29%
100.00%
68.29%
100.00%
68.29%
100.00%
60.62%
100.00%
60.62%
100.00%
68.29%
Enel Green Power
North America
Inc.
Aurora
Distributed Solar
LLC
Aurora
Distributed Solar
LLC
Southern Cone
Power Ltd
Latin America
Holding I Ltd
Aurora
Distributed Solar
LLC
Jack River LLC
Minneapolis
(Minnesota)
USA
Jessica Mills LLC
Minneapolis
(Minnesota)
USA
Julia Hills LLC
Minneapolis
(Minnesota)
USA
- USD
- USD
- USD
Kalenta SA
Maroussi
Greece
4,359,000.00 EUR
Kings River Hydro
Company Inc.
Wilmington
(Delaware)
Kinneytown Hydro
Company Inc.
Wilmington
(Delaware)
USA
USA
100.00 USD
100.00 USD
Kongul Energì Sanayi
Ve Ticaret Anonim
Irketi
Istanbul
Turkey
50,000.00 TRY
Kromschroeder SA
Barcelona
La Pereda Co2 AIE
Oviedo
LaChute Hydro
Company Inc.
Wilmington
(Delaware)
Spain
Spain
USA
Lake Emily Solar LLC Minnesota
USA
Lake Pulaski Solar LLC Minnesota
USA
627,126.00 EUR
Services
224,286.00 EUR
Services
100.00 USD
- USD
- USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Latin America
Holding I Ltd
Latin America
Holding II Ltd
Lawrence Creek Solar
LLC
Lima
Lima
Peru
Peru
13,701,000.00 USD
Holding
Line-by-line
74.00 USD
Holding
Line-by-line
Minnesota
USA
- USD
Electricity generation
from renewable
resources
Line-by-line
402
ENEL ANNUAL REPORT 2014ATTACHMENTS Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
Lawrence
Hydroelectric
Associates LP
Boston
(Massachusetts)
USA
- USD
Electricity generation
from renewable
resources
Line-by-line
Essex Company
92.50%
68.29%
Enel Green Power
North America
Inc.
Aurora
Distributed Solar
LLC
RusEnergoSbyt
LLC
7.50%
100.00%
68.29%
75.00%
18.93%
Lester Prairie Solar
LLC
Minnesota
USA
- USD
Electricity generation
from renewable
resources
Line-by-line
Lipetskenergosbyt LLC
(in liquidation)
Lipetskaya
Oblast
Russian
Federation
7,500.00 RUB
Electricity sale
-
Little Elk Wind Project
LLC
Oklahoma City USA
- USD
Littleville Power
Company Inc.
Boston
(Massachusetts)
USA
Lower Saranac
Corporation
New York
(New York)
Lower Saranac Hydro
Partners LP
Wilmington
(Delaware)
USA
USA
1.00 USD
1.00 USD
- USD
Luz Andes Ltda
Santiago
Chile
1,224,348.00 CLP
Maicor Wind Srl
Rome
Italy
20,850,000.00 EUR
Manlenox (Pty) Ltd
Houghton
South Africa
97.00 ZAR
Marcinelle Energie SA Charleroi
Belgium
110,061,500.00 EUR
Mascoma Hydro
Corporation
Concord
(New Hampshire)
USA
Mason Mountain Wind
Project LLC
Wilmington
(Delaware)
USA
1.00 USD
- USD
Matrigenix
(Proprietary) Limited
Mayhew Lake Solar
LLC
Houghton
South Africa
1,000.00 ZAR
Minnesota
USA
- USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity and fuel
transport, distribution
and sale
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation,
transport, sale and
trading
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Enel Kansas LLC
100.00%
68.29%
Line-by-line
Line-by-line
Line-by-line
Hydro
Development
Group Inc.
Twin Saranac
Holdings LLC
Twin Saranac
Holdings LLC
100.00%
68.29%
100.00%
68.29%
99.00%
68.29%
Lower Saranac
Corporation
1.00%
Line-by-line
Enersis SA
0.10%
60.07%
Chilectra SA
99.90%
Line-by-line
Enel Green Power
SpA
60.00%
40.97%
Line-by-line
Enel Green Power
RSA (Pty) Ltd
98.87%
67.52%
Line-by-line
Enel Investment
Holding BV
100.00%
100.00%
Line-by-line
Line-by-line
Enel Green Power
North America
Inc.
Padoma Wind
Power LLC
100.00%
68.29%
100.00%
68.29%
Line-by-line
Enel Green Power
RSA (Pty) Ltd
100.00%
68.29%
Line-by-line
Aurora
Distributed Solar
LLC
100.00%
68.29%
60,100.00 EUR
Environmental studies Equity
Nuclenor SA
50.00%
17.54%
Medidas Ambientales
SL
Medina de
Pomar (Burgos)
Spain
Metro Wind LLC
Minneapolis
(Minnesota)
USA
Mexicana de
Hidroelectricidad
Mexhidro S de RL de Cv
Midway Farms Wind
Project LLC
Mexico City
Mexico
181,728,701.00 MXN
Dallas (Texas)
USA
- USD
Mill Shoals Hydro
Company Inc.
Wilmington
(Delaware)
USA
100.00 USD
- USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Chi Minnesota
Wind LLC
51.00%
34.83%
Line-by-line
Line-by-line
Line-by-line
Enel Green
PowerMéxico
S de RL de Cv
Trade Wind
Energy LLC
99.99%
68.28%
100.00%
68.29%
100.00%
68.29%
Enel Green Power
North America
Inc.
Minas de Estercuel SA Madrid
Minas Gargallo SL
Madrid
Spain
Spain
93,160.00 EUR
Mineral deposits
Line-by-line
Minas Gargallo SL 99.65%
69.84%
150,000.00 EUR
Mineral deposits
Line-by-line
Minicentrales del
Canal de Las Bárdenas
AIE
Zaragoza
Spain
1,202,000.00 EUR
Hydroelectric plants
-
Endesa
Generación SA
Enel Green Power
España SL
99.91%
70.08%
15.00%
10.35%
403
Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
Minicentrales del
Canal Imperial-Gallur
SL
Zaragoza
Spain
1,820,000.00 EUR
Hydroelectric plants
Equity
Missisquoi Associates
GP
Los Angeles
(California)
USA
- USD
Electricity generation
from renewable
resources
Line-by-line
Molinos de Viento del
Arenal SA
San José
Costa Rica
9,709,200.00 USD
Montrose Solar LLC
Minnesota
USA
Mustang Run Wind
Project LLC
Oklahoma City
(Oklahoma)
USA
Nevkan Renewables
LLC
Wilmington
(Delaware)
Newbury Hydro
Company
Burlington
(Vermont)
USA
USA
- USD
- USD
- USD
- USD
Newind Group Inc.
St. John
(Newfoundland)
Canada
578,192.00 CAD
Nojoli Wind Farm
(RF) Pty Ltd
Johannesburg South Africa
10,000,000.00 ZAR
Northwest Hydro Inc. Wilmington
USA
100.00 USD
(Delaware)
Notch Butte Hydro
Company Inc.
Wilmington
(Delaware)
USA
100.00 USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Enel Green Power
España SL
36.50%
25.20%
99.00%
68.29%
1.00%
49.00%
33.46%
100.00%
68.29%
Sheldon Springs
Hydro Associates
LP
Sheldon Vermont
Hydro Company
Inc.
Enel Green Power
Costa Rica
Aurora
Distributed Solar
LLC
Line-by-line
Line-by-line
Line-by-line
Enel Kansas LLC
100.00%
68.29%
Line-by-line
Enel Nevkan Inc. 100.00%
68.29%
Line-by-line
Sweetwater
Hydroelectric Inc.
1.00%
68.29%
Enel Green Power
North America
Inc.
Enel Green Power
Canada Inc..
99.00%
100.00%
68.29%
Line-by-line
Line-by-line
Enel Green Power
RSA (Pty) Ltd
60.00%
40.97%
Line-by-line
Chi West Inc.
100.00%
68.29%
Line-by-line
Enel Green Power
North America
Inc.
Endesa
Generación SA
100.00%
68.29%
50.00%
35.07%
Nuclenor SA
Burgos
Spain
102,000,000.00 EUR
Nuclear plant
Equity
Nueva Compañía de
Distribución Eléctrica
4 SL
Nueva Marina Real
Estate SL
Nuove Energie Srl
Ochrana A Bezpecnost
Se AS
Madrid
Spain
3,010.00 EUR
Electricity generation
Line-by-line
Endesa SA
100.00%
70.14%
Madrid
Spain
3,200.00 EUR
Real estate
Line-by-line
Endesa SA
60.00%
42.09%
Porto
Empedocle
Italy
54,410,000.00 EUR
Construction and
management of
LNG regasification
infrastructure
Line-by-line
Enel Trade SpA
100.00%
100.00%
Mochovce
Slovakia
33,193.92 EUR
Security services
Held for sale
Slovenské
elektrárne AS
100.00%
66.00%
Odell Wind Farm LLC Minneapolis
(Minnesota)
USA
- USD
Electricity generation
from renewable
resources
Line-by-line
Enel Kansas LLC
100.00%
68.29%
Oficina de Cambios de
Suministrador SA
Madrid
Spain
70,000.00 EUR
Services associated
with the marketing of
energy products
-
Endesa
Distribución
Eléctrica SL
5.19%
14.03%
Endesa Gas SAU
0.35%
Endesa Energía
XXI SL
2.96%
Endesa Energía
SA
11.50%
404
ENEL ANNUAL REPORT 2014ATTACHMENTS Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
OGK-5 Finance
LLC
Moscow
Russian
Federation
10,000,000.00 RUB
Finance company
Line-by-line
Enel Russia OJSC 100.00%
56.43%
Operacion y
Mantenimiento Tierras
Morenas SA
San José
Costa Rica
30,000.00 CRC
Origin Goodwell
Holdings LLC
Wilmington
(Delaware)
Origin Wind Energy
LLC
Wilmington
(Delaware)
USA
USA
Osage Wind LLC
Delaware
USA
- USD
- USD
- USD
Ottauquechee Hydro
Company Inc.
Wilmington
(Delaware)
USA
100.00 USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Oxagesa AIE
Teruel
Spain
6,010.00 EUR
Cogeneration of
electricity and heat
Equity
Oyster Bay Wind
Farm (Pty) Ltd
Cape Town
South Africa
1,000.00 ZAR
P.E. Cote SA
Costa Rica
Costa Rica
10,000.00 CRC
P.V. Huacas SA
Costa Rica
Costa Rica
10,000.00 CRC
Padoma Wind Power
LLC
Los Angeles
(California)
USA
- USD
Paravento SL
Lugo
Spain
3,006.00 EUR
Parc Eolic Els
Aligars SL
Parc Eolic La Tossa-La
Mola D’en Pascual SL
Barcelona
Spain
1,313,100.00 EUR
Barcelona
Spain
1,183,100.00 EUR
Parque Eólico A
Capelada AIE
Santiago de
Compostela
Spain
Las Palmas de
Gran Canaria
Spain
Parque Eólico
Carretera de Arinaga
SA
Parque Eólico Curva
dos Ventos Ltda
5,857,586.40 EUR
1,603,000.00 EUR
Bahia
Brazil
420,000.00 BRL
Parque Eólico de
Aragón AIE
Parque Eólico de
Barbanza SA
Parque Eólico de
Belmonte SA
Parque Eólico de
Gevancas SA
Parque Eólico de
San Andrés SA
Zaragoza
Spain
601,000.00 EUR
La Coruña
Spain
3,606,000.00 EUR
Madrid
Spain
120,400.00 EUR
Porto
Portugal
50,000.00 EUR
La Coruña
Spain
552,920.00 EUR
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
Costa Rica
85.00%
58.05%
Line-by-line
EGPNA Wind
Holdings 1 LLC
100.00%
68.29%
Line-by-line
Enel Green Power
North America
Inc.
100.00%
68.29%
Equity
Enel Kansas LLC
50.00%
34.14%
Line-by-line
Line-by-line
Enel Green Power
North America
Inc.
Enel Green Power
España SL
Enel Green Power
RSA (Pty) Ltd
100.00%
68.29%
33.33%
23.01%
100.00%
68.29%
Line-by-line
Enel Green Power
Costa Rica
65.00%
44.39%
Line-by-line
Enel Green Power
Costa Rica
65.00%
44.39%
Line-by-line
Line-by-line
Enel Green Power
North America
Inc.
Enel Green Power
España SL
100.00%
68.29%
90.00%
62.13%
Equity
Equity
Enel Green Power
España SL
30.00%
20.71%
Enel Green Power
España SL
30.00%
20.71%
Line-by-line
Enel Green Power
España SL
100.00%
69.03%
Line-by-line
Enel Green Power
España SL
80.00%
55.22%
Line-by-line
Line-by-line
Enel Brasil
Participações
Ltda
Enel Green Power
Desenvolvimento
Ltda
Enel Green Power
España SL
99.00%
68.29%
1.00%
80.00%
55.22%
Line-by-line
Enel Green Power
España SL
75.00%
51.77%
Line-by-line
Enel Green Power
España SL
50.16%
34.63%
Line-by-line
Line-by-line
Finerge-Gestão
de Projectos
Energéticos SA
Enel Green Power
España SL
100.00%
69.03%
82.00%
56.61%
405
Finerge-Gestão
de Projectos
Energéticos SA
Finerge-Gestão
de Projectos
Energéticos SA
Enel Brasil
Participações
Ltda
Enel Green Power
Desenvolvimento
Ltda
Enel Green Power
España SL
Enel Green Power
Desenvolvimento
Ltda
Enel Brasil
Participações
Ltda
Enel Green Power
España SL
Enel Brasil
Participações
Ltda
Enel Green Power
Desenvolvimento
Ltda
Enel Green Power
España SL
75.00%
51.77%
51.00%
35.21%
99.00%
68.29%
1.00%
90.00%
62.13%
0.04%
67.63%
99.00%
75.50%
52.12%
99.00%
68.29%
1.00%
52.00%
35.90%
Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
Line-by-line
Enel Green Power
España SL
65.67%
45.33%
Parque Eólico de
Santa Lucía SA
Las Palmas de
Gran Canaria
Spain
901,500.00 EUR
Parque Eólico do
Alto sa Vaca Lda
Parque Eólico do
Vale do Abade Lda
Parque Eólico
Engenho Geradora
de Energia Ltda
Porto
Portugal
125,000.00 EUR
Porto
Portugal
5,000.00 EUR
Fortaleza
Brazil
685,423.00 BRL
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Line-by-line
Line-by-line
Parque Eólico Finca
de Mogán SA
Las Palmas de
Gran Canaria
Spain
3,810,340.00 EUR
Parque Eólico Fontes
dos Ventos Ltda
Recife
Brazil
5,091,945.30 BRL
Construction and
operation of wind
plants
Electricity generation
from renewable
resources
Line-by-line
Line-by-line
Madrid
Spain
6,540,000.00 EUR
Bahia
Brazil
566,347.00 BRL
Construction and
operation of wind
plants
Electricity generation
from renewable
resources
Line-by-line
Line-by-line
Parque Eólico Montes
de Las Navas SA
Parque Eólico
Ouroventos Ltda
Parque Eólico Punta
de Teno SA
Parque Eólico Renaico
SpA
Parque Eólico Serra
Azul Ltda
Tenerife
Spain
528,880.00 EUR
Santiago
Chile
1,000,000.00 CLP
Bahia
Brazil
940,567.00 BRL
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Line-by-line
Enel Green Power
Chile Ltda
100.00%
68.23%
Line-by-line
Enel Brasil
Participações
Ltda
99.00%
68.29%
Enel Green Power
Desenvolvimento
Ltda
1.00%
Parque Eólico Serra da
Capucha SA
Porto
Portugal
50,000.00 EUR
Electricity generation
from renewable
resources
Line-by-line
TP - Sociedade
Térmica
Portuguesa SA
50.00%
69.03%
Parque Eólico Sierra
del Madero SA
Parque Eólico
Taltal SA
Soria
Spain
7,193,970.00 EUR
Santiago
Chile
20,878,010,000.00 CLP
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Line-by-line
50.00%
58.00%
40.04%
0.01%
68.23%
Finerge-Gestão
de Projectos
Energéticos SA
Enel Green Power
España SL
Enel Green Power
Latin America
Ltda
Enel Green Power
Chile Ltda
99.99%
406
ENEL ANNUAL REPORT 2014ATTACHMENTS Parque Eólico
Ventania Geradora
de Energia Ltda
Parque Solar Carrera
Pinto SA
Parque Talinay
Oriente SA
Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
Parque Eólico Valle
de los Vientos SA
Santiago
Chile
566,096,564.00 CLP
Electricity generation
from renewable
resources
Line-by-line
Fortaleza
Brazil
440,267.00 BRL
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
Chile Ltda
Enel Green Power
Latin America
Ltda
Enel Green Power
Desenvolvimento
Ltda
Enel Brasil
Participações
Ltda
Enel Green Power
Chile Ltda
99.99%
68.23%
0.01%
1.00%
68.29%
99.00%
99.00%
67.54%
Santiago
Chile
10,000,000.00 CLP
Santiago
Chile
66,092,165,171.00 CLP
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Line-by-line
Enel Green Power
Chile Ltda
60.92%
65.17%
Paynesville Solar LLC Minnesota
USA
- USD
Electricity generation
from renewable
resources
Line-by-line
Pegop - Energía
Eléctrica SA
Abrantes
Portugal
50,000.00 EUR
Electricity generation
Equity
Pelzer Hydro Company
Inc.
Wilmington
(Delaware)
USA
100.00 USD
Pereda Power SL
La Pereda
(Mieres)
Spain
5,000.00 EUR
PH Chucas SA
San José
Costa Rica
100,000.00 CRC
Electricity generation
from renewable
resources
Development of
generation activities
Electricity generation
from renewable
resources
Line-by-line
Line-by-line
Line-by-line
Enel Green Power
SpA
34.57%
Aurora
Distributed Solar
LLC
Endesa
Generación SA
Endesa
Generación
Portugal SA
Consolidated
Hydro Southeast
Inc.
Endesa
Generación II SA
Enel Green Power
Costa Rica
100.00%
68.29%
49.98%
35.07%
0.02%
100.00%
68.29%
70.00%
49.10%
40.31%
42.67%
Enel Green Power
SpA
22.17%
PH Don Pedro SA
San José
Costa Rica
100,001.00 CRC
PH Guacimo SA
San José
Costa Rica
50,000.00 CRC
PH Rio Volcan SA
San José
Costa Rica
100,001.00 CRC
Pine Island Distributed
Solar LLC
Minnesota
USA
Pipestone Solar LLC
Minnesota
USA
- USD
- USD
Planta Eólica Europea
SA
PowerCrop
Macchiareddu Srl
PowerCrop Russi
Srl
Seville
Spain
1,198,530.00 EUR
Bologna
Italy
100,000.00 EUR
Bologna
Italy
10,000.00 EUR
PowerCrop Srl
Bologna
Italy
4,000,000.00 EUR
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
Costa Rica
33.44%
22.84%
Line-by-line
Enel Green Power
Costa Rica
65.00%
44.39%
Line-by-line
Enel Green Power
Costa Rica
34.32%
23.44%
Line-by-line
Line-by-line
Line-by-line
Aurora
Distributed Solar
LLC
Aurora
Distributed Solar
LLC
Enel Green Power
España SL
100.00%
68.29%
100.00%
68.29%
56.12%
38.74%
Equity
PowerCrop Srl
100.00%
34.14%
Equity
PowerCrop Srl
100.00%
34.14%
Equity
Enel Green Power
SpA
50.00%
34.14%
407
Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
Pp - Co-Geração SA
São Paio de
Oleiros
Portugal
50,000.00 EUR
Cogeneration of
electricity and heat
Line-by-line
Prairie Rose
Transmission LLC
Minneapolis
(Minnesota)
USA
Prairie Rose Wind LLC New York
(New York)
USA
- USD
- USD
Primavera Energia SA Rio de Janeiro
Brazil
36,965,444.64 BRL
Valladolid
Spain
88,398.00 EUR
Valladolid
Spain
710,500.00 EUR
TP - Sociedade
Térmica
Portuguesa SA
Prairie Rose Wind
LLC
100.00%
69.03%
100.00%
51.22%
Line-by-line
Line-by-line
Enel Kansas LLC
75.00%
51.22%
Line-by-line
Line-by-line
Enel Brasil
Participações
Ltda
Enel Green Power
España SL
100.00%
68.29%
82.89%
57.22%
Line-by-line
Enel Green Power
España SL
85.00%
58.68%
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
and sale
Development and
construction of wind
plants
Development and
construction of wind
plants
Barcelona
Spain
30,050.00 EUR
Hydroelectric plants
Equity
Prof-Energo LLC
Sredneuralsk
Russian
Federation
10,000.00 RUB
Energy services
Line-by-line
Progas SA
Santiago
Chile
1,526,000.00 CLP
Gas distribution
Equity
Enel Green Power
España SL
30.00%
20.71%
Sanatorium-
Preventorium
Energetik LLC
Gas Atacama
Chile SA
100.00%
56.43%
99.90%
36.80%
Ponferrada
Spain
12,020.00 EUR
Mexico City
Mexico
89,708,735.00 MXN
Madrid
Spain
601,000.00 EUR
Costa Rica
Costa Rica
10,000.00 CRC
Alicante
Spain
180,000.00 EUR
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Desalinization and
water supply
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Gas Atacama SA
0.10%
Line-by-line
Enel Green Power
España SL
100.00%
69.03%
Line-by-line
Enel Green
Power México
S de RL de Cv
99.99%
68.28%
Equity
Endesa SA
45.00%
31.56%
Line-by-line
Enel Green Power
Costa Rica
65.00%
44.39%
Equity
Enel Green Power
España SL
33.33%
23.01%
Jakarta
Indonesia
333,333,350,000.00 IDR
Energy
-
Productor Regional
de Energía Renovable
III SA
Productor Regional
de Energia Renovable
SA
Productora de
Energías SA
Promociones
Energéticas del
Bierzo SL
Proveedora de
Electricidad de
Occidente Srl de Cv
Proyecto Almería
Mediterraneo SA
Proyecto Eólico El
Pedregal SA
Proyectos
Universitarios de
Energías Renovables SL
PT Bayan Resources
Tbk
Pulida Energy (RF)
Proprietary Limited
Houghton
South Africa
10,000,000.00 ZAR
Pyrites Associates GP New York
(New York)
USA
- USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Line-by-line
10.00%
10.00%
52.70%
35.99%
50.00%
68.29%
50.00%
100.00%
68.29%
Enel Investment
Holding BV
Enel Green Power
RSA (Pty) Ltd
Enel Green Power
North America
Inc.
Hydro
Development
Group Inc.
Enel Brasil
Participações
Ltda
Quatiara Energia SA
Rio de Janeiro
Brazil
16,566,510.61 BRL
Electricity generation
Line-by-line
Rattlesnake Creek
Wind Project LLC
Lincoln
(Nebraska)
USA
- USD
Electricity generation
from renewable
resources
Line-by-line
Enel Kansas LLC
100.00%
68.29%
Reaktortest Sro
Trnava
Slovakia
66,389.00 EUR
Nuclear power
research
Equity
Red Centroamericana
de Telecomunicaciones
SA
Panama
Panama
2,700,000.00 USD
Telecommunications
-
Slovenské
elektrárne AS
Endesa
Latinoamérica SA
49.00%
32.34%
11.11%
11.11%
408
ENEL ANNUAL REPORT 2014ATTACHMENTS Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
Renovables de
Guatemala SA
Guatemala
Guatemala
1,924,465,600.00 GTQ
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
International BV
42.83%
64.08%
Enel Green Power
Guatemala SA
0.01%
Enel Green Power
SpA
51.00%
Enel Investment
Holding BV
Northwest Hydro
Inc.
49.50%
49.50%
17.50%
68.29%
Chi West Inc.
82.50%
18,000.00 EUR
Holding company
Equity
Electricity generation
from renewable
resources
Line-by-line
- USD
- USD
- USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Enel Kansas LLC
100.00%
68.29%
Line-by-line
Rocky Caney
Wind LLC
100.00%
68.29%
2,760,000.00 RUB
Electricity trading
Equity
Res Holdings BV 100.00%
49.50%
Res Holdings BV
Amsterdam
The
Netherlands
Rock Creek Limited
Partnership
Los Angeles
(California)
USA
Rocky Caney Wind
LLC
New York
(New York)
USA
Rocky Ridge Wind
Project LLC
Oklahoma City
(Oklahoma)
USA
RusEnergoSbyt LLC
Moscow
Russian
Federation
RusEnergoSbyt
Siberia LLC
RusEnergoSbyt
Yaroslavl
Ruthton Ridge LLC
Krasnoyarskiy
Kray
Russian
Federation
Yaroslavl
Russian
Federation
Minneapolis
(Minnesota)
USA
4,600,000.00 RUB
Electricity sale
Equity
100,000.00 RUB
Electricity sale
Equity
- USD
Electricity generation
from renewable
resources
Line-by-line
RusEnergoSbyt
LLC
RusEnergoSbyt
LLC
Chi Minnesota
Wind LLC
50.00%
24.75%
50.00%
24.75%
51.00%
34.83%
Empresa
Distribuidora
Sur SA
Enel Green Power
España SL
Padoma Wind
Power LLC
50.00%
21.71%
50.00%
34.52%
100.00%
68.29%
OGK-5 Finance
LLC
0.01%
56.43%
Enel Russia OJSC
99.99%
Sacme SA
Buenos Aires
Argentina
12,000.00 ARS
Monitoring of
electricity system
-
Salto de San Rafael SL Seville
Spain
461,410.00 EUR
Hydroelectric plants
Equity
San Juan Mesa Wind
Project II LLC
Wilmington
(Delaware)
USA
- USD
Electricity generation
from renewable
resources
Line-by-line
Nevinnomyssk Russian
10,571,300.00 RUB
Energy services
Line-by-line
Federation
Sanatorium-
Preventorium
Energetik LLC
Santo Rostro
Cogeneración SA
(in liquidation)
Seville
Spain
207,000.00 EUR
Cogeneration of
electricity and heat
-
Enel Green Power
España SL
45.00%
31.06%
Scandia Solar LLC
Minnesota
USA
Se Hazelton A LP
Los Angeles
(California)
USA
- USD
- USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Aurora
Distributed Solar
LLC
100.00%
68.29%
Line-by-line
Chi West Inc.
99.00%
68.29%
Se Hydropower Srl
Bolzano
Italy
30,000,000.00 EUR
Generation,
purchase and sale of
hydroelectric power
Held for sale
Se Predaj Sro
Bratislava
Slovakia
4,505,000.00 EUR
Electricity supply
Held for sale
Sealve - Sociedade
Eléctrica de Alvaiázere
SA
Serra do Moncoso
Cambas SL
Servicio de Operación
y Mantenimiento para
Energías Renovables
S de RL de Cv
Porto
Portugal
50,000.00 EUR
La Coruña
Spain
3,125.00 EUR
Mexico City
Mexico
3,000.00 MXN
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
1.00%
40.00%
40.00%
100.00%
66.00%
100.00%
69.03%
Bypass Power
Company
Enel Produzione
SpA
Slovenské
elektrárne AS
Finerge-Gestão
de Projectos
Energéticos SA
Line-by-line
Enel Green Power
España SL
100.00%
69.03%
Line-by-line
Enel Green Power
Guatemala SA
0.01%
0.01%
409
Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
SF Energy Srl
Rovereto
Italy
7,500,000.00 EUR
Electricity generation Held for sale
Sheldon Springs Hydro
Associates LP
Wilmington
(Delaware)
USA
Sheldon Vermont
Hydro Company Inc.
Wilmington
(Delaware)
USA
- USD
- USD
Enel Produzione
SpA
Sheldon Vermont
Hydro Company
Inc.
Boott Sheldon
Holdings LLC
33.33%
33.33%
100.00%
68.29%
100.00%
68.29%
Line-by-line
Line-by-line
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Analysis, design and
research in thermal
technology
SIET - Società
Informazioni
Esperienze
Termoidrauliche SpA
Sisconer - Exploração
de Sistemas de
Conversao de Energia
Lda
Sistema de Gestión
Energètica en la Nube
SL
Sistema Eléctrico de
Conexión Montes
Orientales SL
Sistema Eléctrico de
Conexión Valcaire SL
Sistemas Energéticos
Mañón Ortigueira SA
Piacenza
Italy
697,820.00 EUR
Equity
Enel.Newhydro
Srl
41.55%
41.55%
Porto
Portugal
5,000.00 EUR
Electricity generation
from renewable
resources
Line-by-line
Finerge-Gestão
de Projectos
Energéticos SA
55.00%
37.97%
Madrid
Spain
4,943.00 EUR
Research, design and
development
Equity
Enel Italia Srl
30.00%
30.00%
Granada
Spain
44,900.00 EUR
Electricity generation
Equity
Madrid
Spain
175,200.00 EUR
Electricity generation
Equity
La Coruña
Spain
2,007,750.00 EUR
Line-by-line
Enel Green Power
España SL
16.70%
11.53%
Enel Green Power
España SL
Enel Green Power
España SL
28.13%
19.42%
96.00%
66.27%
Slate Creek Hydro
Associates LP
Los Angeles
(California)
USA
Slate Creek Hydro
Company Inc.
Wilmington
(Delaware)
USA
- USD
100.00 USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Slovenské elektrárne
AS
Bratislava
Slovakia
1,269,295,724.66 EUR
Electricity generation Held for sale
Smart P@Per SpA
Potenza
Italy
2,184,000.00 EUR
Services
-
14,571.43 EUR
Research, development
and design
Equity
Enel Italia Srl
30.00%
30.00%
Line-by-line
Slate Creek Hydro
Company Inc.
100.00%
68.29%
Enel Green Power
North America
Inc.
Enel Produzione
SpA
Enel Servizio
Elettrico SpA
100.00%
68.29%
66.00%
66.00%
10.00%
10.00%
Line-by-line
Texkan Wind LLC 100.00%
68.29%
Line-by-line
Nevkan
Renewables LLC
100.00%
68.29%
Line-by-line
Texkan Wind LLC 100.00%
68.29%
SMART-I Srl
Rome
Smoky Hills Wind
Farm LLC
Topeka
(Kansas)
Smoky Hills Wind
Project II LLC
Topeka
(Kansas)
Snyder Wind Farm LLC Dallas
(Texas)
Italy
USA
USA
USA
- USD
- USD
- USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
and sale
Socibe Energia SA
Rio de Janeiro
Brazil
19,969,032.25 BRL
Line-by-line
Santiago
Chile
5,738,046,495.00 CLP
Financial investment
Line-by-line
Santiago
Chile
19,028,480,104.00 CLP
Engineering
Held for sale
Seville
Spain
4,507,590.78 EUR
Electricity generation
Line-by-line
Seville
Spain
1,643,000.00 EUR
Electricity generation
from renewable
resources
Equity
Sociedad Agrícola de
Cameros Ltda
Sociedad
Concesionaria Túnel
El Melón SA
Socieda Eólica de
Andalucía SA
Socieda Eólica El
Puntal SL
410
100.00%
68.29%
57.50%
34.86%
0.01%
36.36%
Enel Brasil
Participações
Ltda
Inmobiliaria
Manso de Velasco
Ltda
Compañía
Eléctrica Tarapacá
SA
Empresa Nacional
de Electricidad SA
99.99%
Enel Green Power
España SL
Enel Green Power
España SL
64.74%
44.69%
50.00%
34.52%
ENEL ANNUAL REPORT 2014ATTACHMENTS Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
Socieda Eólica Los
Lances SA
Sociedad Portuaria
Central Cartagena SA
Società Agricola Trino
Srl
Società di sviluppo,
realizzazione e
gestione del gasdotto
Algeria-Italia via
Sardegna SpA (“Galsi
SpA”)
Société Du Parc Eolien
Grandes Terres Ouest
Eurl
Cadiz
Spain
2,404,048.42 EUR
Bogotá DC
Colombia
5,800,000.00 COP
Milan
Italy
50,000.00 EUR
Milan
Italy
37,419,179.00 EUR
Electricity generation
from renewable
resources
Construction and
management of port
infrastructure
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
España SL
60.00%
41.42%
Line-by-line
Inversora
Codensa Sas
4.90%
23.15%
Emgesa SA ESP
94.95%
Line-by-line
Agatos Green
Power Trino
100.00%
54.63%
Engineering in energy
and infrastructure
sector
-
Enel Produzione
SpA
15.62%
15.62%
Lyon
France
21,000.00 EUR
Electricity generation
from renewable
resources
Line-by-line
Enel France Sas
100.00%
100.00%
Sol de Media Noche
Fotovoltaica SL
Las Palmas de
Gran Canaria
Spain
Soliloquoy Ridge LLC Minneapolis
(Minnesota)
USA
Somersworth Hydro
Company Inc.
Wilmington
(Delaware)
USA
Sotavento Galicia SA
Santiago de
Compostela
Spain
South Fork Wind LLC Minneapolis
(Minnesota)
USA
3,008.00 EUR
Photovoltaic plants
Equity
Line-by-line
Line-by-line
Equity
- USD
100.00 USD
601,000.00 EUR
100.00 USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Southern Cone Power
Argentina SA
Buenos Aires
Argentina
19,874,798.00 ARS
Holding company
Line-by-line
Southern Cone Power
Ltd
Lima
Southern Cone Power
Perù SAA
Lima
Peru
Peru
7,517,500.00 USD
Holding company
Line-by-line
159,183,286.00 PEN
Holding company
Line-by-line
Line-by-line
Enel Kansas LLC
100.00%
68.29%
Endesa Ingeniería
SLU
Chi Minnesota
Wind LLC
Enel Green Power
North America
Inc.
Enel Green Power
España SL
50.00%
35.07%
51.00%
34.83%
100.00%
68.29%
36.00%
24.85%
Compañía
Eléctrica Tarapacá
SA
1.97%
36.38%
Empresa Nacional
de Electricidad SA
98.03%
Inkia Holdings
(Acter) Ltd
Latin America
Holding II Ltd
Latin America
Holding I Ltd
Chi Minnesota
Wind LLC
100.00%
60.62%
0.01%
60.62%
99.99%
51.00%
34.83%
Southwest
Transmission LLC
Minneapolis
(Minnesota)
USA
Spartan Hills LLC
Minneapolis
(Minnesota)
USA
- USD
- USD
Stipa Nayaá SA de Cv Colonia
Mexico
1,811,016,348.00 MXN
Cuauhtémoc
Johannesburg South Africa
8,757,214.00 ZAR
Cadiz
Spain
12,020,240.00 EUR
Sublunary Trading (RF)
Proprietary Limited
Suministradora
Eléctrica de Cádiz SA
Suministro de Luz
y Fuerza SL
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity distribution
and supply
Line-by-line
Line-by-line
Chi Minnesota
Wind LLC
51.00%
34.83%
Line-by-line
Line-by-line
Enel Green
PowerMéxico
S de RL de Cv
Enel Green Power
Partecipazioni
Speciali Srl
Enel Green Power
Solar Energy Srl
55.21%
65.13%
40.16%
57.00%
38.92%
Equity
Endesa Red SA
33.50%
23.50%
Torroella
de Montgri
(Girona)
Spain
2,800,000.00 EUR
Electricity distribution Line-by-line
Hidroeléctrica de
Catalunya SL
60.00%
42.09%
411
Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
Summit Energy
Storage Inc.
Wilmington
(Delaware)
USA
2,050,000.00 USD
Sun River LLC
Minneapolis
(Minnesota)
USA
- USD
Sviluppo Nucleare
Italia Srl
Rome
Italy
200,000.00 EUR
Sweetwater
Hydroelectric Inc.
Concord (New
Hampshire)
USA
250.00 USD
Taranto Solar Srl
Rome
Italy
100,000.00 EUR
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Development,
construction and
operation of EPRs
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Line-by-line
Tecnatom SA
Madrid
Spain
4,025,700.00 EUR
Tecnoguat SA
Guatemala
Guatemala
30,948,000.00 GTQ
Tejo Energía Produçao
E Distribuçao de
Energia Electrica SA
Paço de Arcos
Portugal
5,025,000.00 EUR
Electricity generation
and services
Equity
Electricity generation
from renewable
resources
Line-by-line
Electricity generation,
transmission and
distribution
Equity
Teploprogress OJSC
Sredneuralsk
Russian
Federation
128,000,000.00 RUB
Electricity sale
Line-by-line
Termoeléctrica José
de San Martín SA
Buenos Aires
Argentina
500,000.00 ARS
Construction and
management of a
combined-cycle plant
Equity
Line-by-line
Line-by-line
Enel Green Power
North America
Inc.
Chi Minnesota
Wind LLC
75.00%
51.22%
51.00%
34.83%
Line-by-line
Enel Ingegneria e
Ricerca SpA
100.00%
100.00%
Enel Green Power
North America
Inc.
Enel Green Power
SpA
Endesa
Generación SA
Enel Green Power
International BV
100.00%
68.29%
51.00%
34.83%
45.00%
31.56%
75.00%
51.22%
Endesa
Generación SA
38.89%
27.28%
OGK-5 Finance
LLC
Endesa Costanera
SA
60.00%
33.86%
5.51%
7.29%
Central Dock
Sud SA
5.32%
Hidroeléctrica El
Chocón SA
18.85%
Termotec Energía
AIE (in liquidation)
TERRAE Iniziative
per lo sviluppo
agroindustriale SpA
Texkan Wind LLC
Wilmington
(Delaware)
USA
Tko Power Inc.
Los Angeles
(California)
USA
Termoeléctrica
Manuel Belgrano SA
Buenos Aires
Argentina
500,000.00 ARS
Construction and
management of a
combined-cycle plant
Equity
Central Dock
Sud SA
5.32%
7.29%
Valencia
Spain
481,000.00 EUR
Rome
Italy
19,060,811.37 EUR
Cogeneration of
electricity and heat
-
Agro-industrial
activities
Equity
Enel Green Power
España SL
Enel Green Power
SpA
45.00%
31.06%
20.00%
13.66%
Endesa Costanera
SA
5.51%
Hidroeléctrica El
Chocón SA
18.85%
- USD
1.00 USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Enel Texkan Inc.
100.00%
68.29%
Line-by-line
Chi West Inc.
100.00%
68.29%
Line-by-line
Enel Green Power
RSA (Pty) Ltd
60.00%
40.97%
TOBIVOX (RF) Pty Ltd Houghton
South Africa
10,000,000.00 ZAR
Toledo Pv AEIE
Madrid
Spain
26,890.00 EUR
Photovoltaic plants
Equity
TP - Sociedade Térmica
Portuguesa SA
Lisbon
Portugal
3,750,000.00 EUR
Cogeneration of
electricity and heat
Line-by-line
33.33%
23.01%
100.00%
69.03%
Enel Green Power
España SL
Finerge-Gestão
de Projectos
Energéticos SA
Trade Wind Energy LLC New York
USA
- USD
(New York)
Tradewind Energy Inc. Wilmington
USA
200,000.00 USD
(Delaware)
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Chi Power Inc.
1.00%
68.29%
Enel Kansas LLC
99.00%
Equity
Enel Kansas LLC
19.90%
13.59%
412
ENEL ANNUAL REPORT 2014ATTACHMENTS Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
Transmisora de
Energia Renovable
SA
Transmisora Eléctrica
de Quillota Ltda
Transportadora de
Energía SA
Transportes y
Distribuciones
Eléctricas SA
Triton Power
Company
Guatemala
Guatemala
237,341,200.00 GTQ
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
International BV
100.00%
68.29%
Santiago
Chile
440,644,600.00 CLP
Electricity transmission
and distribution
Equity
Buenos Aires
Argentina
100,000.00 ARS
Electricity generation,
transmission and
distribution
Line-by-line
Olot (Girona)
Spain
72,120.00 EUR
Electricity transmission Line-by-line
50.00%
18.64%
100.00%
51.15%
73.33%
51.44%
Compañía
Eléctrica Tarapacá
SA
Compañía de
Interconexión
Energética SA
Endesa
Distribución
Eléctrica SL
New York
(New York)
USA
- USD
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
North America
Inc.
2.00%
68.29%
Tsar Nicholas LLC
Minneapolis
(Minnesota)
USA
Twin Falls Hydro
Associates
Seattle
(Washington)
USA
Twin Falls Hydro
Company Inc.
Wilmington
(Delaware)
USA
Twin Lake Hills LLC
Minneapolis
(Minnesota)
USA
Twin Saranac Holdings
LLC
Wilmington
(Delaware)
USA
- USD
- USD
10.00 USD
- USD
- USD
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Aranjuez
Spain
304,150.00 EUR
Electricity generation
from renewable
resources
-
Line-by-line
Highfalls Hydro
Company Inc.
Chi Minnesota
Wind LLC
98.00%
51.00%
34.83%
Line-by-line
Twin Falls Hydro
Company Inc.
51.00%
34.83%
Line-by-line
Twin Saranac
Holdings LLC
100.00%
68.29%
Line-by-line
Chi Minnesota
Wind LLC
51.00%
34.83%
Line-by-line
Enel Green Power
North America
Inc.
Enel Green Power
España SL
100.00%
68.29%
40.00%
27.61%
Johannesburg South Africa
1,000.00 ZAR
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
RSA (Pty) Ltd
100.00%
68.29%
Las Palmas de
Gran Canaria
Spain
190,171,520.00 EUR
Electricity generation
Line-by-line
Endesa
Generación SA
100.00%
70.14%
Ufefys SL
(in liquidation)
Ukuqala Solar
Proprietary Limited
Unión Eléctrica de
Canarias Generación
SAU
Upington Solar
(Pty) Ltd
Johannesburg South Africa
1,000.00 ZAR
Ustav Jaderného
Výzkumu Rez AS
Rez
Czech
Republic
524,139,000.00 CZK
Vektör Enerji Üretim
Anonim Şirketi
Istanbul
Turkey
740,000.00 TRY
Vidigenix (Pty) Ltd
Houghton
South Africa
97.00 ZAR
Viruleiros SL
Santiago de
Compostela
Spain
160,000.00 EUR
Waseca Solar LLC
Minnesota
USA
West Faribault Solar
LLC
Minnesota
USA
West Waconia Solar
LLC
Minnesota
USA
- USD
- USD
- USD
Electricity generation
from renewable
resources
Nuclear power
research and
development
Plant construction and
electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
RSA (Pty) Ltd
100.00%
68.29%
Equity
Slovenské
elektrárne AS
27.77%
18.33%
Line-by-line
Enel Green Power
International BV
100.00%
68.29%
Line-by-line
Enel Green Power
RSA (Pty) Ltd
97.75%
66.75%
Equity
Enel Green Power
España SL
67.00%
46.25%
Line-by-line
Line-by-line
Line-by-line
100.00%
68.29%
100.00%
68.29%
100.00%
68.29%
Aurora
Distributed Solar
LLC
Aurora
Distributed Solar
LLC
Aurora
Distributed Solar
LLC
413
Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
Western New York
Wind Corporation
Albany
(New York)
USA
Willimantic Power
Corporation
Hartford
(Connecticut)
USA
300.00 USD
1,000.00 USD
Maroussi
Greece
60,000.00 EUR
Maroussi
Greece
1,110,400.00 EUR
Maroussi
Greece
551,500.00 EUR
Maroussi
Greece
556,500.00 EUR
Maroussi
Greece
736,500.00 EUR
Maroussi
Greece
424,000.00 EUR
Maroussi
Greece
389,000.00 EUR
Maroussi
Greece
551,500.00 EUR
Maroussi
Greece
555,000.00 EUR
Maroussi
Greece
551,500.00 EUR
Maroussi
Greece
296,500.00 EUR
Maroussi
Greece
252,000.00 EUR
Maroussi
Greece
3,504,500.00 EUR
Maroussi
Greece
614,000.00 EUR
Maroussi
Greece
399,000.00 EUR
Maroussi
Greece
225,000.00 EUR
Maroussi
Greece
255,500.00 EUR
Maroussi
Greece
200,000.00 EUR
Maroussi
Greece
653,500.00 EUR
Maroussi
Greece
575,000.00 EUR
Wind Park of
Koryfao SA
Wind Parks of
Anatoli-Prinia SA
Wind Parks of
Bolibas SA
Wind Parks of
Distomos SA
Wind Parks of
Drimonakia SA
Wind Parks of
Folia SA
Wind Parks of
Gagari SA
Wind Parks of
Goraki SA
Wind Parks of
Gourles SA
Wind Parks of
Kafoutsi SA
Wind Parks of
Kathara SA
Wind Parks of
Kerasia SA
Wind Parks of
Korinthia SA
Wind Parks of
Makrilakoma SA
Wind Parks of
Milia SA
Wind Parks of
Mirovigli SA
Wind Parks of
Mitika SA
Wind Parks of
Paliopirgos SA
Wind Parks of
Pelagia SA
Wind Parks of
Petalo SA
414
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Line-by-line
Line-by-line
Enel Green Power
North America
Inc.
Enel Green Power
North America
Inc.
Enel Green Power
Hellas SA
100.00%
68.29%
100.00%
68.29%
100.00%
68.29%
Line-by-line
Enel Green Power
Hellas SA
80.00%
54.63%
Equity
Equity
Equity
Equity
Equity
Equity
Equity
Equity
Enel Green Power
Hellas SA
30.00%
20.49%
Enel Green Power
Hellas SA
30.00%
20.49%
Enel Green Power
Hellas SA
30.00%
20.49%
Enel Green Power
Hellas SA
30.00%
20.49%
Enel Green Power
Hellas SA
30.00%
20.49%
Enel Green Power
Hellas SA
30.00%
20.49%
Enel Green Power
Hellas SA
30.00%
20.49%
Enel Green Power
Hellas SA
30.00%
20.49%
Line-by-line
Enel Green Power
Hellas SA
80.00%
54.63%
Line-by-line
Enel Green Power
Hellas SA
80.00%
54.63%
Line-by-line
Enel Green Power
Hellas SA
80.00%
54.63%
Equity
Enel Green Power
Hellas SA
30.00%
20.49%
Line-by-line
Enel Green Power
Hellas SA
80.00%
54.63%
Equity
Enel Green Power
Hellas SA
30.00%
20.49%
Line-by-line
Enel Green Power
Hellas SA
80.00%
54.63%
Line-by-line
Enel Green Power
Hellas SA
80.00%
54.63%
Equity
Equity
Enel Green Power
Hellas SA
30.00%
20.49%
Enel Green Power
Hellas SA
30.00%
20.49%
ENEL ANNUAL REPORT 2014ATTACHMENTS Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
Wind Parks of
Platanos SA
Wind Parks of
Sagias SA
Wind Parks of
Skoubi SA
Wind Parks of
Spilia SA
Wind Parks of
Strouboulas SA
Wind Parks of
Trikorfo SA
Wind Parks of
Vitalio SA
Wind Parks of
Vourlas SA
Maroussi
Greece
179,000.00 EUR
Maroussi
Greece
601,000.00 EUR
Maroussi
Greece
472,000.00 EUR
Maroussi
Greece
496.100,00 EUR
Maroussi
Greece
576,500.00 EUR
Maroussi
Greece
260,000.00 EUR
Maroussi
Greece
361,000.00 EUR
Maroussi
Greece
554,000.00 EUR
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Electricity generation
from renewable
resources
Line-by-line
Enel Green Power
Hellas SA
80.00%
54.63%
Equity
Equity
Enel Green Power
Hellas SA
30.00%
20.49%
Enel Green Power
Hellas SA
30.00%
20.49%
Line-by-line
Enel Green Power
Hellas SA
80.00%
54.63%
Equity
Equity
Equity
Equity
Enel Green Power
Hellas SA
30.00%
20.49%
Enel Green Power
Hellas SA
29.25%
19.97%
Enel Green Power
Hellas SA
30.00%
20.49%
Enel Green Power
Hellas SA
30.00%
20.49%
Winter's Spawn LLC Minneapolis
USA
- USD
Electricity generation
Line-by-line
Chi Minnesota
51.00%
34.83%
(Minnesota)
from renewable
resources
Wind LLC
WP Bulgaria 1 EOOD Sofia
Bulgaria
5,000.00 BGN
Plant construction,
Line-by-line
Enel Green Power
100.00%
68.29%
operation and
maintenance
Bulgaria EAD
WP Bulgaria 10 EOOD Sofia
Bulgaria
5,000.00 BGN
Plant construction,
Line-by-line
Enel Green Power
100.00%
68.29%
operation and
maintenance
Bulgaria EAD
WP Bulgaria 11 EOOD Sofia
Bulgaria
5,000.00 BGN
Plant construction,
Line-by-line
Enel Green Power
100.00%
68.29%
operation and
maintenance
Bulgaria EAD
WP Bulgaria 12 EOOD Sofia
Bulgaria
5,000.00 BGN
Plant construction,
Line-by-line
Enel Green Power
100.00%
68.29%
operation and
maintenance
Bulgaria EAD
WP Bulgaria 13 EOOD Sofia
Bulgaria
5,000.00 BGN
Plant construction,
Line-by-line
Enel Green Power
100.00%
68.29%
operation and
maintenance
Bulgaria EAD
WP Bulgaria 14 EOOD Sofia
Bulgaria
5,000.00 BGN
Plant construction,
Line-by-line
Enel Green Power
100.00%
68.29%
operation and
maintenance
Bulgaria EAD
WP Bulgaria 15 EOOD Sofia
Bulgaria
5,000.00 BGN
Plant construction,
Line-by-line
Enel Green Power
100.00%
68.29%
operation and
maintenance
Bulgaria EAD
WP Bulgaria 19 EOOD Sofia
Bulgaria
5,000.00 BGN
Plant construction,
Line-by-line
Enel Green Power
100.00%
68.29%
operation and
maintenance
Bulgaria EAD
WP Bulgaria 21 EOOD Sofia
Bulgaria
5,000.00 BGN
Plant construction,
Line-by-line
Enel Green Power
100.00%
68.29%
operation and
maintenance
Bulgaria EAD
WP Bulgaria 26 EOOD Sofia
Bulgaria
5,000.00 BGN
Plant construction,
Line-by-line
Enel Green Power
100.00%
68.29%
operation and
maintenance
Bulgaria EAD
WP Bulgaria 3 EOOD Sofia
Bulgaria
5,000.00 BGN
Plant construction,
Line-by-line
Enel Green Power
100.00%
68.29%
operation and
maintenance
Bulgaria EAD
WP Bulgaria 6 EOOD Sofia
Bulgaria
5,000.00 BGN
Plant construction,
Line-by-line
Enel Green Power
100.00%
68.29%
operation and
maintenance
Bulgaria EAD
415
Company name
Headquarters
Country
Share capital Currency Activity
method
Held by
% holding
Consolidation
Group %
holding
WP Bulgaria 8 EOOD Sofia
Bulgaria
5,000.00 BGN
Plant construction,
Line-by-line
Enel Green Power
100.00%
68.29%
operation and
maintenance
Bulgaria EAD
WP Bulgaria 9 EOOD Sofia
Bulgaria
5,000.00 BGN
Plant construction,
Line-by-line
Enel Green Power
100.00%
68.29%
operation and
maintenance
Bulgaria EAD
Wyoming Solar LLC
Minnesota
USA
- USD
Electricity generation
Line-by-line
Aurora
100.00%
68.29%
from renewable
resources
Distributed Solar
LLC
Yacylec SA
Buenos Aires
Argentina
20,000.000.00 ARS
Electricity transport
Equity
Enersis SA
22.22%
13.47%
Yedesa-Cogeneración
Almería
Spagin
234,000.00 EUR
Cogeneration of
-
Enel Green Power
40.00%
27.61%
SA (in liquidation)
electricity and heat
España SL
Zumbrota Solar LLC
Minnesota
USA
- USD
Electricity generation
Line-by-line
Aurora
100.00%
68.29%
from renewable
resources
Distributed Solar
LLC
416
ENEL ANNUAL REPORT 2014ATTACHMENTS Corporate
governance
Report on Corporate Governance
and Ownership Structure
The corporate governance structure of Enel SpA complies
as the adequacy of the organizational structure, the in-
with the principles set forth in the edition of the Corpo-
ternal control system and the administrative-accounting
rate Governance Code (1) for listed companies, which has
system of the Company; (iii) the statutory auditing of the
been adopted by the Company. Furthermore, the afore-
annual accounts and the consolidated accounts, as well
mentioned corporate governance structure is inspired by
as the independence of the statutory audit firm; and (iv)
CONSOB’s recommendations on this matter and, more ge-
the manner in which the corporate governance rules set
nerally, international best practice.
out in the Corporate Governance Code are actually im-
The corporate governance system adopted by Enel and the
plemented;
Group is essentially aimed at creating value for the sha-
> a Shareholders’ Meeting, which is competent to take de-
reholders over the medium/long term, taking into account
cisions concerning, among other issues – in ordinary or ex-
the social importance of the Group’s business operations
traordinary session: (i) the appointment and termination
and the consequent need, in conducting such operations,
of members of the Board of Directors and the Board of
to adequately consider all the interests involved.
Auditors and their compensation and responsibilities; (ii)
In compliance with the provisions of Italian law governing
the approval of the financial statements and allocation of
companies with listed shares, the Company’s organization
net income; (iii) the purchase and sale of treasury shares;
is characterized by:
(iv) stock-based compensation plans; (v) amendments of
> a Board of Directors charged with managing the Company;
the bylaws; and (vi) the issue of convertible bonds.
> a Board of Auditors charged with monitoring: (i) com-
The statutory auditing of the accounts is performed by a
pliance with the law and the bylaws, and with the princi-
specialized firm entered in the appropriate official register.
ples of sound administration in the performance of com-
It was engaged by the Shareholders’ Meeting on the basis
pany business; (ii) the financial reporting process, as well
of a reasoned proposal of the Board of Auditors.
(1) The various editions of the Code are available on the website of Borsa Italiana (http://www.borsaitaliana.it).
Patrizia Grieco (P 3)
Francesco Starace (AD/DG)
Alessandro Banchi (2,4)
Alberto Bianchi (3,4)
Paola Girdinio (1,2)
Alberto Pera (1,2)
Anna Chiara Svelto (1,2)
Angelo Taraborrelli (1,4)
Shareholders’
Meeting
Independent
auditors
Ernst & Young
Board of
Directors
Board of
Auditors
Sergio Duca (C)
Lidia D’Alessio
Gennaro Mariconda
Control & Risk
Committee1
Compensation
Committee2
Nomination &
Corporate
Governance
Committee3
Related Parties
Committee4
For more detailed information on the corporate governance system, please see the Report on Corporate Governance and Ow-
nership Structure of Enel, which has been published on the Company’s website (www.enel.com, in the “Governance” section).
418
CORPORATE GOVERNANCE
ENEL ANNUAL REPORT 2014 Concept design
Inarea - Rome
Publishing service
Newton 21 Rome
Copy editing
postScriptum - Rome
Printing
Primaprint - Viterbo
50 copies printed
Printed in June 2015
INTERNAL PAGES
Paper
Fedrigoni Xper
Gram weight
120 g/m2
Number of pages
420
COVER
Paper
Fedrigoni Xper
Gram weight
320 g/m2
This publication is printed on FSC® certified paper
Publication not for sale
Edited by
Communications Italy
Disclaimer
This Report issued in Italian
has been translated into
English solely for the convenience
of international readers
Enel
Società per azioni
Registered Office
137 Viale Regina Margherita, Rome
Share capital €9,403,357,795 fully paid-up
Tax I.D. and Companies Register
of Rome: no. 00811720580
R.E.A. of Rome no. 756032
VAT Code no. 00934061003
Annual Report 2014
enel.com