Group financial position and cash flows

Ref Note

ACEA GROUP  STATEMENT OF FINANCIAL POSITION (in millions of euros)

31.12.2014 (A) 31.12.2013  Restated (B) Increase/ (Decrease) (A) - (B) % Increase/ (Decrease)
  NON-CURRENT ASSETS AND LIABILITIES 3,681.6 3,559.7 121.9 3.4%
10 Property, plant and equipment and intangible assets 3,669.4 3,551.5 117.9 3.3%
11 Equity investments 227.2 215.3 12.0 5.6%
12 Other non-current assets 340.2 357.7 (17.5) (4.9%)
13 Staff termination benefits and other defined benefit plans (118.0) (106.9) (11.1) 10.4%
14 Provisions for liabilities and charges (165.9) (203.4) 37.5 (18.4%)
15 Other non-current liabilities (271.3) (254.5) (16.8) 6.6%
  NET WORKING CAPITAL (90.1) 95.8 (185.9) (194.1%)
16 Current receivables 1,259.9 1,346.6 (86.6) (6.4%)
17 Inventories 29.2 33.8 (4.5) (13.4%)
18 Other current assets 241.3 203.4 37.9 18.6%
19 Current payables (1,249.4) (1,207.6) (41.8) 3.5%
20 Other current liabilities (371.2) (280.3) (90.9) 32.4%
  INVESTED CAPITAL 3,591.5 3,655.5 (64.0) (1.8%)
21 NET DEBT (2,089.1) (2,248.6) 159.5 (7.1%)
  Medium/long-term loans and receivables 34.3 34.8 (0.5) (1.4%)
  Medium/long-term borrowings (3,040.7) (2,360.9) (679.8) 28.8%
  Short-term loans and receivables 89.4 115.6 (26.2) (22.7%)
  Cash and cash equivalents 1,018.0 563.1 454.9 80.8%
  Short-term borrowings (190.1) (601.2) 411.2 (68.4%)
22 Total shareholders’ equity (1,502.4) (1,406.8) (95.6) 6.8%
  FUNDING (3,591.5) (3,655.5) 64.0 (1.8%)

Millions of Euros

The above statement of financial position has been reclassified to show the components of invested capital and the corresponding funding.

In particular, the net carrying amounts of non-current assets and net working capital, consisting of current receivables, other receivables, inventories, current payables and the short-term portion of long-term borrowings, have been added together.

The figure obtained for invested capital is then compared with the corresponding amounts for shareholders’ equity and net debt, thereby showing the weight of funding.

As at 31 December 2014, the ACEA Group’s statement of financial position recorded a reduction in invested capital of 64.1 million euros (-1.8%) compared to 31 December 2013. This change is the result of an increase in net fixed assets (+ 121.9 million euros), offset by a reduction in net working capital (-185.9 million euros).

 

Non-current assets and liabilities - 3,681.6 million euros

Compared to 31 December 2013, this item showed an overall increase of 121.9 million euros (+ 3.4%); a breakdown of the item is shown below.

     

11. Property, plant and equipment/intangible assets - 3,669.4 million euros

This item increased by 117.9 million euros (+ 3.3%) over the year.

The change reflects capital expenditures amounting to 318.6 million euros and amortisation, depreciation and impairments amounting to 203.5 million euros; in addition, due to the line-by-line consolidation of Ecogena, following the acquisition of an additional stake in the capital of this Company, fixed assets increased by 13.7 million euros as a result of the change in the consolidation basis. The remainder is the result of green certificates for the year falling due, corresponding to 5.6 million euros.

The item also includes 4.3 million euros corresponding to the value of assets from the acquisition of a division of the company Acque Potabili S.p.A. This acquisition came about on 29 December 2014 with the signing of a Framework Agreement between ACEA Ato2, Acque Potabili S.p.A., the Municipalities of Canterano, Capranica Prenestina, Gerano, Olevano Romano, Rocca Canterano and Rocca di Papa and the Technical Operations Secretariat of the Mayors’ Conference of ATO 2 Central Lazio – Rome for transfer of the Integrated water service in the above Municipalities by means of a contract for the transfer of the company division (from Acque Potabili to ACEA Ato2, signed on 29 December 2014), in accordance with the provisions of Resolutions adopted by the Mayors’ Conference, nos. 02/2007 and 03/2009, and the Notice of 10 July 2014.

Consequently, coming into force from the signing of the division transfer agreement, the Service is entrusted to ACEA Ato2 as operator of the IWS for ATO2 Central Lazio – Rome in accordance with the terms, conditions and duration of the 2002 management Agreement.

There was also a reduction in fixed assets of 13.8 million euros by virtue of decisions taken by the AATO2 Mayors’ Conference in its meeting of 10 July 2014 concerning tariffs for 2014, requiring the early fulfilment of ACEA Ato2 obligations deriving from resolution no. 7 of 17 April 2012. The mentioned resolution provided that, in lieu of the MALL penalty, the Operator would assume the obligation to undertake capital expenditures at its own expense of 3.5 million euros per year for a period of six years. The decrease in fixed assets led to the cancellation of the Provision for Contractual Commitments established for this purpose in 2012.

The table below shows the level of capex undertaken in 2014 by Operating Segment, compared to those for the same period of 2013.

€ millions 31.12.2014 31.12.2013 Restated

 Increase/(Decrease)

 ENVIRONMENT 13.3 12.1 1.2
 ENERGY 19.7 11.4 8.3
 Production  11.6 5.2 6.4
 Energy Management 0 0.2 (0.2)
 Sales 8.1 6.0 2.2
 WATER: 148.9   130.0 19.0
 Overseas 0.6   0.2   0.4
 Lazio - Campania 146.8   129.3 17.6
 Toscana - Umbria 0   0                                 0  
 Engineering 1.5 0.5   1.0
 NETWORKs 122.4 103.2 19.2
 ACEA 14.2 11.9  2.3
Total Capital expenditure   318.6      268.6  50.0

Capex in the Environment Segment was up (+ 1.2 million euros), with particular reference to ARIA, relating to initiatives also in the area of safety, and to SAO for landfill initiatives and the start-up of projects to expand a waste treatment plant.

The Energy segment recorded a 8.3 million euros increase, attributable to Capex by ACEA Produzione (1.0 million euros), by Ecogena (5.4 million euros), which was consolidated on a line-by-line basis as of 1 January 2014, and by ACEA Energia (8.1 million euros, + 2.2 million euros vis-à-vis 31 December 2013), aimed mainly at improving IT performance.

Compared to the same period of the previous year, Capex in the Water Segment was up by 19.0 million euros, chiefly through ACEA Ato2, with reference to works to clean up and expand water and sewerage piping in some municipalities, and repairs carried out in water plants.

Capex was up by 19.2 million euros in the Networks Segment, as a result of the expansion of the HV network and renovation of the LV and MV network.

The Parent Company increased the level of Capex by 2.3 million euros compared with 2013 in the area of higher IT performance.

12. Equity investments - 227.2 million euros

Compared to 31 December 2013, equity investments increased by 12.0 million euros, primarily reflecting the valuation of companies consolidated using the equity method as from 1 January 2014, following the application of IFRS 11.

The increase was also affected by the valuation of the company Marco Polo (+ 2.3 million euros) for which a successful outcome of the liquidation procedure is expected.

13. Other non-current assets - 340.2 million euros

The balance of this item is summarised in the table below:

€ millions 31.12.2014 31.12.2013 Restated Increase/ (Decrease)
Deferred tax assets             296.2              309.0 (12.7)
Receivables from others              43.0                46.9 (3.9)
Accrued income and prepayments                1.0                  1.8 (0.8)
Other non-current assets            340.2             357.7 (17.5)

This item recorded a fall of 17.5 million euros (- 4.9%) compared to 31 December 2013, due chiefly to fewer provisions for deferred tax assets compared with the end of the previous year (- 12.7 million euros). This reduction is chiefly ascribable to the new tax system in place for impairment charges.

Receivables from others amounted to 43.0 million euros (- 3.9 million euros) and represent the total capital spending incurred up to 31 December 2010 as part of the public lighting service agreement: these receivables were recognised using the financial asset model in application of IFRIC 12

Prepayments and accrued income decreased by 0.9 million euros, and mainly refer to insurance premiums paid in advance, lease payments, maintenance fees and rent on public land.

14. Staff termination benefits and other defined-benefit plans - 118.0 million euros

As at 31 December 2014 the provision increased by 11.1 million euros, mainly due to:

  • + 3.1 million euros relating to staff termination benefits,
  • + 8.0 million euros relating to tariff subsidies, monthly bonuses and long-term incentive plans.

In addition to the provision which, pursuant to the revised legislation on Termination Benefits, consists of the employee termination benefits accrued until 31 December 2006, the change reflects the revised discount rate used for the valuation according to IAS 19 (from 3.17% in 2013 to 1.49% this year), which led to an increase in the provision due to the restatement of actuarial gains and losses (15.2 million euros) recognized in Other Comprehensive Income" (OCI).

15. Provisions for liabilities and charges - 165.9 million euros

Provisions for liabilities and charges recorded a decrease of 37.5 million euros compared to the previous year, mainly due to provisions allocated for the period, net of removed excess funds (13.5 million euros), net of uses and other changes (totalling 51.0 million euros).

The following table provides a breakdown by type of provision for liabilities and charges.

Type of provisions 31.12.2013 Restated Provisions Excess funds released Utilisations and other changes 31.12.2014
Regulatory risks 65.8 4.1 (18.8) (4.6) 46.6
Post mortems 26.4  0.0 (1.9) (1.3) 23.1
Legal 17.7 2.7 0.0 (0.0) 20.4
Other liabilities and charges 20.4 2.6 0.0 (13.9) 9.2
Plant efficiency restoration 1.4 0.0 (1.4) 0.0 0.0
Investees 9.3 0.1 0.0 0.2 9.7
Contributory risks 6.6 0.1 0.0 (0.1) 6.6
Early retirements and redundancies 2.0 19.0 0.0 (18.3) 2.7
Tax 2.7 2.4 0.0 (0.5) 4.6
TOTAL 152.3 31.1 (22.1) (38.5) 122.8
Provisions for restoration costs 38.6 4.5 0.0 0.0 43.1
Contractual commitments 12.5 0.0 0.0 (12.5) 0.0
TOTAL PROVISION 203.4 35.6 (22.1) (51.0) 165.9

The main changes refer to:

  • write-off of the Contractual Commitments Fund, allocated by ACEA Ato 2 in 2012 to cope with the MALL penalty obligation, as a result of decisions taken by the Mayors' Conference of AATO2 in the meeting of 10 July 2014 concerning tariffs for 2014. The tariff proposal drawn up by the Technical Operations Secretariat provides for a reduction in fixed assets additions for 2012 (on which the 2014 tariffs are based) by the amount of capital expenditures the Operator is required to make at its own expense, thereby fulfilling in advance its obligations under Resolution No. 7 of 17 April 2012,
  • the full utilisation (8.4 million euros) of the provision set aside in 2013 in relation to the estimated burden arising from the purchase of energy saving certificates required to meet the objective assigned to ACEA Distribuzione, as a result of certificates being purchased in sufficient number to fulfil the obligation,
  • the provision for regulatory risks decreasing by 19.2 million euros, mainly due to i) the settlement, pursuant to Resolution No. 163/2014/R/idr on 3 April 2014, of ACEA Ato2 liability to its users concerning the repayment of the 2011 return on invested capital owed by ACEA Ato2 to its subscribers, and (ii) use of the liabilities provision allocated by ACEA Ato5 to deal with the possible non-recognition of tariff adjustments for the period 2006 – 2011 (18.8 million euros),
  • the provision for legal disputes increasing by 2.7 million euros, as a result of provisions set aside during the year,
  • the provision for restoration costs increasing by 4.5 million euros, as a result of allocations made in 2014 related to the costs required to keep the water service infrastructure in good condition.

16. Other non-current liabilities - 271.3 million euros

This item rose by 16.8 million euros (+ 6.6%) vis-à-vis 31 December 2013.

This item consists of:

€ millions 31.12.2014 31.12.2013 Restated Increase/ (Decrease)
Advances from end users and customers 102.5                91.4 11.1
Capital grants 18.3                16.8 1.5
Water connection fees 24.7                25.3 (0.6)
Provision for deferred taxes              93.3                93.0 0.3
Accrued liabilities and deferred income              32.6                28.0 4.6
TOTAL            271.3             254.5            16.8

Advances includes: i) the amount of security deposits and consumption advances subject to adjustment by the water companies; ii) the amount of advances relating to liabilities for advances on energy consumption, paid by customers in the Protected Categories market, that bear interest at the conditions set by the regulation issued by AEEGSI (Resolution No. 204/99).

The change is due mainly to the security deposit billed by ACEA Ato5 to users, as established by AEEGSI resolution no. 86/2013/R/IDR of 28 February 2013, amended by article 34 of Annex A to the resolution of the same Authority, no. 643/2013/R/IDR of 27 December 2013. This deposit will be repaid to end users upon termination of the supply contract, together with interest based on statutory interest rates.

Capital grants and Water connection grants showed a net overall increase of 0.8 million euros.

The deferred tax provision recorded an overall increase of 0.3 million euros vis-à-vis 31 December 2013.

Accrued liabilities and deferred income, amounting to 32.6 million euros, mainly refer to grants received, recognised in the income statement by an amount equal to the depreciation generated by the associated capital expenditure. In particular, this item includes the contribution received by ACEA Distribuzione for the replacement of electromechanical meters with electronic meters (AEEGSI Resolution No. 292/06).

Net working capital – (90.1 million) euros

This item fell by 185.9 million euros compared with 31 December 2013; its breakdown is as follows.

€ millions 31.12.2014
(A)
31.12.2013 Restated
(B)
Increase/ (Decrease)
(A-B)
Current receivables 1,259.9 1,346.6 (86.6)
- due from end users 1,163.0 1,244.4 (81.4)
- due from Roma Capitale 67.2 69.6 (2.4)
Inventories 29.2 33.8 (4.5)
Other current assets 241.3 203.4 37.9
Current payables (1,249.4) (1,207.6) (41.8)
- due to Suppliers (1,130.2) (1,114.1) (16.1)
- due to Roma Capitale (116.7) (85.6) (31.1)
Other current liabilities (371.2) (280.3) (90.9)
Net working capital (90.1) 95.8 (185.9)

17. Current receivables - 1,259.9 million euros

The breakdown is shown in the following table:

€ millions 31.12.2014 31.12.2013 Restated Increase/ (Decrease)

Trade receivables 1,163.0 1,244.4 (81.4)
Due from Roma Capitale 67.2 69.6 (2.4)
Due from subsidiaries and associates 29.7 32.5 (2.8)
Current receivables 1,259.9 1,346.6 (86.6)

Receivables from users and customers

This item fell by 84,0 million euros compared with the previous year. The table below shows the changes by Operating Segment compared to the end of 2013:

€ millions 31.12.2014 31.12.2013 Restated Increase/ (Decrease)
  End users
(A) 
Customers
(B) 
Total End users
(C) 
Customers
(D) 
Total End users
(A)-(C) 
Customers
(B)-(D) 
Total
Environment 0.0 29.7 29.7 0.0 27.6 27.6 0.0 2.1 2.1
Energy 584.8 59.2 644.0 570.2 57.3 627.5 14.6 1.9 16.5
Water 375.0 31.3 406.3 417.5 38.7 456.2 (42.4) (7.4) (49.8)
Networks 6.2 37.5 43.6 39.9 49.2 89.1 (33.7) (11.8) (45.5)
Corporate 0.0 39.3 39.3 0.0 44.0 44.0 0.0 (4.6) (4.6)
Total 966.0 197.0 1,163.0 1,027.6 216.8 1,244.4 (61.6) (19.8) (81.4)

Please note that in 2014 receivables were sold without recourse for a total amount of 1.478,1 million euros. The breakdown by Operating Segment is provided below:

€ millions 31.12.2014 Public Administration
Energy segment 620.9 22.9
Water segment 430.5 44.6
Networks segment 426.7 81.9
Total 1,478.1 149.3

With reference to the main changes in receivables from end users or customers:

  • the Environment Segment increased its total receivables by 2.1 million euros, mainly attributable to the companies ARIA and SAO,
  • the Energy segment recorded an increase in receivables from both users and customers totalling 16.5 million euros compared with the figure recorded at 31 December 2013, of which 12.1 million euros attributable to ACEA Energia and 6.3 million euros to ACEA Produzione; the overall change was also influenced by Ecogena (+ 3.1 million euros) due to its consolidation using the line-by-line method as from 1 January 2014, and Umbria Energy (- 5.7 million euros),
  • In the Water Segment total receivables fell by 49.8 million euros. The change is essentially attributable to the net effect of issues of 2012 tariff adjustments and transfers effected during the year by ACEA Ato2, producing an overall change of 80.4 million euros, partly offset by the increase in receivables for bills to be issued by ACEA Ato5.
  • the Networks segment saw an overall fall in receivables of 45.5 million euros, due to the reduction recorded by ARSE of 12.0 million euros and that of ACEA Distribuzione of 34.5 million euros,
  • the Parent company posted a reduction in receivables of 4.6 million euros, chiefly ascribable to relations with the Municipality of Naples, performing the public lighting service in a joint venture. At 31 December 2014 receivables totalled 39.3 million euros, including contested receivables of 20.5 million euros, regarding the well-known dispute with the Vatican State.

Receivables due from Parent Company Roma Capitale

Trade receivables due from Roma Capitale totalled 67.2 million euros at 31 December 2014 (69.6 million euros at 31 December 2013).

The total amount of receivables (including short-term and medium/long-term financial receivables resulting from the public lighting contract) was 162.2 million euros compared with 154.0 million euros at the end of the previous year.

The following table presents an analysis of the ACEA Group’s relations with Roma Capitale regarding both receivables and payables, including those of a financial nature. 

Amounts due from Roma Capitale 31.12.2014

31.12.2013 Restated

 Increase/(Decrease)

Utility receivables 51.3 42.5 8.8
Contract work and services 15.9 19.3 (3.3)
Services for Municipality of Rome 0.6 1.4 (0.8)
Other receivables: seconded staff 0.2 0.3 (0.2)
Total services billed 68.0 63.5 4.5
Grants receivable 2.4 2.4 0.0
Total services requested 70.4 65.9 4.5
Bills to be issued: Public Lighting 1.0 5.7 (4.7)
Bills to be issued: other 1.5 1.4 0.1
Total services to be billed 2.5 7.1 (4.6)
Advances 0.0 0.8 (0.8)
Total trade receivables 72.9 73.8 (0.9)
Public lighting loans and receivables 62.4 50.1 12.3

Total receivables due within one year (A)

135.3 123.9 11.4
Electricity surtax payable (15.2) (14.8) (0.4)
Concession fees payable (74.0) (48.9) (25.1)
Total trade payables (89.2) (63.7) (25.5)

Total payables due within one year (B)

(89.2) (63.7) (25.5)
Total (A) - ( B) 46.1 60.2 (14.2)
Other financial receivables/payables 29.4 (0.7) 30.1
to/from Parent company Roma Capitale for dividends (3.1) (33.0) 29.8
Medium/Long-term loans for Public Lighting 32.6 32.3 0.3
Other trade receivables/(payables) (12.6) (5.5) (7.1)
Net balance 62.9 54.0 8.9

Receivables outstanding at 31 December 2014 were 11,385 thousands euros up on the previous year, with in particular:

  • a 8,802 thousands euros rise in utility receivables, referring chiefly to ACEA Ato2 (6,216 thousands euros). This change derives from the increase in the Company’s sales revenue as a result of approved tariff updates, even though Roma Capitale paid in 2014 7 million euros more than payments effected to this end in 2013;
  • an increase in financial receivables for public lighting of 12,268 thousands euros, due chiefly to the limited payment by Roma Capitale of receivables accrued in previous years (10,514 thousands euros). Over the year Roma Capitale paid 60,645 thousands euros for the period January – November 2014;
  • a decrease of 4,316 thousands euros in trade receivables accrued for works and services, relating basically to overall proceeds of 5,152 thousands euros, 1,700 thousands euros to ACEA and 2,349 thousands euros to ACEA Ato2.

In 2014 the Group collected a total of 163,970 thousands euros; in particular:

  • 73,512 thousands euros in receivables due for the public lighting contract,
  • 86,575 thousands euros for water and electricity utility receivables, of which 78,622 thousands euros relating to 2014 issues,
  • 3,883 thousands euros relating chiefly to works and services.

Other receivables at 31 December 2014 referable to previous years (not including the medium–long-term component) totalled 95,954 thousands euros, of which:

  • 34,715 thousands euros for water and electricity utilities,
  • 41,843 thousands euros for the public lighting service,
  • 19,396 thousands euros for works and services.

Payables due to Roma Capitale fell overall by 639 thousands euros. This change was the result of i) a 25,110 thousands euros increase in the 2014 share of the concession fee; ii) in increase in other payables of 5,527 thousands euros, offset by iii) a fall in payables for dividends of 29,847 thousands euros.

Changes to other payables referred chiefly to the rise in costs for restoring road surfaces which, following a Roma Capitale order, rose by 38% as from 1 January 2014.

With reference to financial payables, the reduction is basically the result of the cancellation, further to payment (by offsetting) of the advance on 2013 profits decided by ACEA’s Board of Directors in December 2013. It is also noted that in 2014 the ACEA dividend (18,464 thousands euros) for the whole of 2013 was also paid (by offsetting).

Due from associates

These receivables amounted to 7.4 million euros, substantially in line with the previous year (7.3 million euros).

Due from subsidiaries

These amounted to 22.4 million euros (25.2 million euros at 31 December 2013), down 2.8 million euros. They relate to receivables from companies consolidated using the equity method as a result of the application of IFRS 11.

18. Inventories - 29.2 million euros

This item decreased by 4.5 million euros compared with 31 December 2013. The changes by operating segment are shown in the following table:

€ millions 31.12.2014 31.12.2013 Restated Increase/ (Decrease)
Environment segment 3.4 3.4 0.0
Energy segment 1.5 1.8 (0.3)
Water segment 8.4 9.9 (1.5)
Networks segment 15.6 18.3 (2.7)
ACEA 0.3 0.3 0.0
Inventories 29.2 33.8 (4.5)

19. Other current assets - 241.3 million euros

There was an overall increase of 37.9 million euros, or 18.6%, compared to the previous year, as follows:

€ millions 31.12.2014 31.12.2013 Restated Increase/ (Decrease)
Receivables from others 126.8 101.2 25.5
Accrued income and prepayments 14.7   10.1 4.6
Tax receivables 99.8      92.0 7.8
Other current assets 241.3     203.4 37.9

Receivables from others totalled 126,8 million euros, an increase of 25,5 million euros, as shown in the following table, with the breakdown and changes occurring compared to the previous year:

€ millions 31.12.2014 31.12.2013 Restated Increase/ (Decrease)
Receivables due from the Equalisation Fund 47.3 41.1 6.2
Receivables from Equalisation Fund for successful Tariff Contribution targets 18.5 0.4 18.1
Other receivables from Equalisation Fund 17.7 1.2 16.5
Financial receivables from Trifoglio immobiliare 10.3 10.3 0.0
Regional grants receivable 6.5 4.3 2.2
Receivables due from INPS for welfare contributions in accordance with article 41, paragraph 2, letter A of Law 488/1999 6.2 7.1 (0.8)
Receivables from Equitalia 4.2 4.1 0.0
Other minor receivables 3.8 2.4 1.4
Security deposits 3.6 4.1 (0.6)
Receivables from social security institutions 3.3 3.7 (0.4)
Receivable from individual transfers 2.5 2.5 (0.0)
Suppliers’ advances 1.7 2.2 (0.5)
Insurance repayments 0.7 0.0 0.7
Receivables from Citelum for Naples Municipality collections 0.5 0.0 0.5
Receivables due from Area Authority for Tariff adjustments 0.0 17.9 (17.9)
Receivables from others 126.8 101.2 25.5

The increase of 25.5 million euros vis-à-vis 31 December 2013 was chiefly the result of:

  • an 18.1 million euros rise in receivables recorded by ACEA Distribuzione, due from the Equalisation Fund for Energy Saving Certificates, corresponding to the energy saving target assigned by the Authority for 2013 and 2014
  • the growth in receivables from the equalisation fund of 16.5 million euros, chiefly ascribable to ACEA Energia due to the adjustment of some tariff components pursuant to the resolution of the Electricity, Gas and Water System Authority no. 670 of 2014,
  • the writing-off, due to the reclassification to utility receivables, of receivables from the Area Authority of ACEA Ato5, corresponding to 17.9 million euros, as a result of the changing regulatory framework, enabling the Company to bill previous adjustments, as established by the acting Commissioner, in three annual payments as from 1 July 2014.

Accrued income and prepayments amounted to 14.7 million euros (10.1 million euros at 31 December 2013) and mainly refer to rent on public land, lease payments and insurance.

Tax receivables amounted to 99.8 million (+ 7.8 million euros), and mainly include VAT receivables of 55.6 million euros. 

20. Current payables - 1.249.4 million euros

€ millions 31.12.2014 31.12.2013 Restated Increase/ (Decrease)
Due to third-party suppliers 1,130.2 1,114.1 16.1
Due to the Parent Company Roma Capitale 116.7 85.6 31.1
Due to subsidiaries and associates   2.4 7.2 (4.8)
Due to subsidiaries and associates 0.1 0.7 (0.6)
Current payables 1,249.4 1,207.6 41.8

Amounts due to third-party suppliers

Trade payables amounted to 1,130.2 million euros (1,114.1 million euros at 31 December 2013).

The following table provides the breakdown by operating segment:

€ millions 31.12.2014 31.12.2013 Restated Increase/ (Decrease)
Environment segment 38.5 33.4 5.1
Energy segment 471.6 488.9 (17.3)
Water Segment 247.5 210.6 37.0
Networks Segment 318.5 314.7 3.8
ACEA 54.0 66.5 (12.4)
Total 1,130.2 1,114.1 16.1

Payables to suppliers rose by 16.1 million euros, chiefly ascribable to the increase in the Water segment.

Due to Parent Company Roma Capitale

These amounted to 116.7 million euros, a rise of 31.1 million euros, due basically to the concession fee for the integrated water service falling due for the period 2014.

Due to subsidiaries and associates

The balance of 2.4 million euros was 4.8 million euros down on 31 December 2013 and mainly refers to payables arising from the management of the public lighting service provided by the associate Citelum Napoli Pubblica Illuminazione in the Municipality of Naples.

21. Other current liabilities - 371.2 million euros

These were up by 90.9 million euros (32.4%). The following table shows the main items making up the balance and the change compared to 31 December 2013.

€ millions 31.12.2014 31.12.2013 Restated Increase/ (Decrease)
Other current liabilities 268.7       217.1 51.6
Tax payables 83.9         41.2 42.7
Social security contributions 17.5        17.5 0.0
Amounts due to end users for tariff restrictions 0.0        1.2 (1.2)
Liabilities from commodity derivatives 0.3 0.5 (0.2)
Accrued liabilities and deferred income 0.7      2.8 (2.1)
Other current liabilities 371.2 280.3 90.9

Other current liabilities amounted to 268.7 million euros, with an overall increase of 51.6 million euros compared to 31 December 2013, when they amounted to 217.1 million euros. The following table shows the composition and changes compared to the previous year:

€ millions 31.12.2014 31.12.2013 Restated Increase/ (Decrease)
Payables to municipalities for concession fees 51.8 48.6 3.2
Payables to Equalisation Fund 78.1 31.8 46.3
Payables for collections subject to verification 48.6 41.9 6.7
Amounts due to staff 45.3 37.4 7.9
Other payables to Municipalities 14.3 14.5 (0.2)
Payables to Equitalia 11.1 12.8 (1.7)
Other payables 10.0 9.3 (0.7)
Solidarity contribution payables 8.4 12.0 (3.6)
Payables to INPS, due in instalments 0.0 7.4 (7.4)
Payables for environmental premium Art. 10 of ATI4 agreement of 13/08/2007 1.1 1.3 (0.2)
Other current liabilities 268.7 217.1 51.6

Payables to the Equalisation Fund recorded an increase, as did payables to Municipalities for concession fees, with specific reference to those accrued by ACEA Ato2 and ACEA Ato5. These were partially offset by a reduction in payables to the STO, for the Solidarity contribution intended to provide tariff subsidies to low income families, to reduce adjustments payable for 2012, and the decrease of instalments payable to INPS, due to the instalments paid during the period. The increase in payables for collections subject to verification of 6.7 million euros and due to staff of 7.9 million euros should also be noted.

Tax payables amounted to 83.9 million euros (41.2 million euros at 31 December 2013), and mainly included the VAT tax payable for the period of 46.8 million euros and additional municipal and provincial tax payables of 30.2 million euros.

Social security and welfare payables amounted to 17.5 million euros, unchanged vis-à-vis the previous year (17.5 million euros at 31 December 2013). Below is a breakdown by Operating Segment:

€ millions 31.12.2014 31.12.2013 Restated Increase/ (Decrease)
Environment segment 0.7 0.6 0.1
Energy segment 1.8 1.8 0.0
Water Segment 6.0 6.0 0.0
Networks Segment 5.7 5.9 (0.2)
Parent company 3.3 3.2 0.1
Total 17.5 17.5 0.0

Payables arising from commodity derivatives included the fair value of a number of financial contracts entered into by ACEA Energia. This value was 0.3 million euros at 31 December 2014, compared with 0.5 million euros for 2013.

Accrued liabilities and deferred income amounted to 0.7 million euros, down by 2.1 million euros vis-à-vis 31 December 2013, ascribable mainly to ACEA Distribuzione.

22. Net debt - (2,089.1) million euros

Group debt at 31 December 2014 fell overall by 159.5 million euros, going from 2,248.6 million euros at the end of 2013 to 2,089.1 million euros.

This fall reflects the positive effects of the current management of working capital (down by 185.9 million euros), particularly significant in the final quarter of the year, also due to the billing of previous adjustments in the Water segment (billing began as from 1 July) and Acea Energia billing for previous years.

The Net Financial Debt/EBITDA ratio went down from 3.3x in 2013 to 2.9x at the end of 2014.

The following table provides the breakdown of the items concerned:

€ millions 31.12.2014 31.12.2013 Restated Increase/ (Decrease)
Non-current assets/(liabilities) 1.7 2.5 (0.8)
Non-current financial assets/(liabilities) - intragroup 32.6 32.3 0.3
Non-current borrowings and financial liabilities (3,040.7) (2,360.9) (679.8)
Net medium/long-term debt (3,006.4) (2,326.1) (680.3)
Cash and cash equivalents and securities 1.018.0 563.1 454.9
Short-term bank borrowings (58.2) (371.3) 313.2
Current financial assets/(liabilities) (103.9) (139.6) 35.6
Current financial assets/(liabilities) intragroup 61.5 25.3 36.1
Net short-term debt 917.3 77.5 839.8
Total net debt (2,089.1) (2,248.6) 159.5

Net medium/long-term debt - (3,006.4) million euros

With regard to this component it should be noted that:

  • non-current financial assets/(liabilities) recorded a balance of 1.7 million euros, down by 0.8 million euros compared to 31 December 2013 (2.5 million euros),
  • Intragroup financial assets/(liabilities) stood at 32.6 million euros and include financial receivables from Roma Capitale for upgrading works completed to adapt systems to safety and regulatory standards and new constructions as envisaged in the addendum to the Public Lighting contract.
  • non-current payables and financial liabilities totalled 3,040.7 million euros, up 679.8 million euros from 31 December 2013, and can be broken down as follows:

€ millions 31.12.2014 31.12.2013 Restated Increase/ (Decrease)
Bonds 1,909.1 1,290.8 618.4
Medium/long-term borrowings 1,131.6 1,070.1 61.4
Total 3,040.7 2,360.9 679.8

Bonds - 1,909.1 million euros

The change compared to the end of the previous year, mainly derives from the 10 year maturity bond issued on 8 July 2014 of 600 million euros, as part of the EMTN programme of 1.5 billion euros approved by the Board of Directors on 10 March 2014; the issue was co-arranged by Banca IMI, BNP Paribas and UniCredit Bank.

This item therefore consists of:

  • 599.2 million euros (inclusive of accrued interest and the contract related costs) relating to the 10-year fixed rate bond issued by ACEA in July 2014, as part of the Euro Medium Term Notes (EMTN) programme of 1.5 billion euros. Interest accrued during the period amounted to 7.3 million euros,
  • 601.0 million euros (including accrued interest and fair value of the hedge) related to the bond issued by ACEA in September 2013, with 5 year maturity and expiring on 12 September 2018. The fair value of hedging derivatives on this debt was positive and equal to 1.2 million euros.  Interest accrued during the period amounted to 22.5 million euros,
  • 515.8 million euros (including accrued interest and fair value of the hedge) related to the bond issued by ACEA in March 2010, with 10 year maturity and expiring on 16 March 2020. Interest accrued during the period amounted to 22.5 million euros.
  • 193.1 million euros (including accrued interest and fair value of the hedge) relating to the Private Placement. The fair value of this hedge was a negative 45.9 million euros and was allocated to a specific equity reserve. The exchange rate difference - positive to the tune of 27.4 million euros - calculated at 31 December 2014 on the hedged instrument, was allocated to a translation reserve. The exchange rate at 31 December 2014 was 145.23 euros compared to 144.72 euros at 31 December 2013. Interest accrued during the period amounted to 3.6 million euros.

Medium/long term borrowings 1,131.6 million euros (including short-term portions - 1,178.1 million euros)

They recorded an overall rise of 57.5 million euros, compared to 1,120.5 million euros in 2013, due to the net effect of the payment of due capital instalments and interest accrued during the period, as well as the net effect of the repayment of the loan taken out with B.E.I. (E.I.B) for 100 million euros in January 2012 and the parallel signing of a new 200 million euros loan, maturing in June 2030.

The following table shows medium/long–term and short-term borrowings by term to maturity and type of interest rate:

Bank loans Total Residual debt Due by 31.12.2015 falling due between 31.12.2015 and 31.12.2019 Due after 31.12.2019
fixed rate 322.5 20.7 83.7 218.1
floating rate 788.2 17.4 410.6 360.1
floating rate to fixed rate 67.4 8.3 46.6 12.5
Total 1,178.1 46.5 540.9 590.7

The fair value of ACEA hedging derivatives was a negative 9.0 million euros, increasing 0.3 million euros compared to 31 December 2013 (- 8.7 million euros).

As regards medium/long-term borrowings and bonds conditions, please refer to the 2014 Consolidated Financial Statements.

Net short-term debt - 917.3 million euros

The short-term component was positive, and compared to the end of 2013 there was an overall improvement of 839.8 million euros, mainly due to the reimbursement of a 300 million euros bond in July, the growth in cash and cash equivalents (+ 454.9 million euros) and the reduction in current financial exposure to third parties and Group companies (+ 71.7 million euros).

Cash and cash equivalents amounted to 1,018.0 million euros, an overall rise of 454.9 million euros, mainly due to the change recorded in the period by the Parent Company. The following table provides a breakdown by operating segment:

€ millions 31.12.2014 31.12.2013 Restated Increase/ (Decrease)
Environment segment 1.2 2.3 (1.2)
Energy segment 1.5 1.1 0.4
Water Segment 36.3 18.1 18.1
Networks Segment 0.6 0.0 0.6
Parent company 978.4 541.5 436.9
Total 1,018.0 563.1 454.9

Short-term bank borrowings totalled 58.2 million euros, down by 313.2 million euros, broken down as follows: 

€ millions 31.12.2014 31.12.2013 Restated Increase/ (Decrease)
Short-term bonds 0.0 306.3 (306.3)
Short-term bank credit lines 11.7 14.6 (2.9)
Short-term bank credit lines - mortgages 46.5 50.4 (3.9)
Total 58.2 371.3 (313.2)

Below is the breakdown by operating segment:

€ millions 31.12.2014 31.12.2013 Restated Increase/ (Decrease)
Environment segment 4.1 4.0 0.1
Energy segment 7.4 7.7 (0.3)
Water Segment 3.2 5.4 (2.2)
Networks Segment 19.3 19.8 (0.5)
Parent company 24.2 334.4 (310.2)
Total 58.2 371.3 (313.2)

The change in the period (- 313.2 million euros) mainly reflects the repayment of the 300 million euros bond maturing on 22 July 2014.

At 31 December 2014 the Parent Company held uncommitted and committed credit lines totalling 799 million euros and 300 million euros respectively, neither of which is used. No guarantees were issued to obtain these credit lines.

The committed credit is revolving, with a contractual term of three years from the date of signing. These lines will mature in 2015. The contracts entered into provide for the payment of a commitment fee plus an up-front fee paid at the time the credit lines were opened.

Current financial assets and (liabilities) reported a balance at 31 December 2014 that increases debt by 103.9 million euros (139.6 million euros at 31 December 2013).

Below is the breakdown by operating segment:

€ millions 31.12.2014 31.12.2013 Restated Increase/ (Decrease)
Environment segment (4.1) (3.3) (0.8)
Energy segment (56.6) (78.0) 21.4
Water Segment (45.1) (22.2) (23.0)
Networks Segment (8.0) (20.2) 12.2
ACEA 9.9 (15.9) 25.8
Total (103.9) (139.6) 35.6

The 35.6 million euros reduction in outstanding debt reflects the reduced exposure to factoring companies for the reimbursement of revenue for receivables sold by the Energy, Water and Networks companies (33.6 million euros), partly offset by the change to the Water segment (+ 23.0 million euros) and by payment of the interim dividend for 2013, approved on 18 December 2013 by ACEA’s Board of Directors (26.0 million euros), payable to the market.

It should be noted that, with reference to the sale of the photovoltaic business to RTR Capital at the end of 2012, an escrow account had been set up, for an amount equal to the value of some plants that had to undergo formal checks by the vendor; following the successful results of the checks carried out on the main plant, the escrow account was partially released at the end of June, for 4.9 million euros.

Intragroup current financial assets and (liabilities) reduced borrowings by 61.5 million euros and mainly include the net exposure to Roma Capitale (59.3 million euros).

The overall change of 36.1 million euros primarily derives from the increase in financial receivables (+12.3 million euros) arising from the service agreement for the management of public lighting in the Rome area, and the decrease in the residual dividend payable, recognised in accordance with the Board of Directors' resolution of 18 December 2013 on the advance of 2013 dividends. This reduction, amounting to 29.8 million euros, results from offsetting effected in the period with the trade receivables held by the Group vis à vis Roma Capitale.

23. Shareholders’ equity – 1,502.4 million euros

The changes occurred during the period, amounting to 95.6 million euros, are detailed in the table below.

The change, net of profit for the period amounting to 162.5 million euros, was essentially due to (i) changes in the cash flow hedge reserve related to financial instruments of - 15.5 million (net of taxation), (ii) changes in the reserve for the fair value measurement of derivative contracts of ACEA Energia, amounting to + 0.1 million euros, and (iii) the change in actuarial gains and losses, amounting to - 11.0 million euros. The change was also affected by the dividend distribution of 36.2 million euros.