Change in net financial position - Terna Group

In order to more clearly present the actual cash flows for the year, the table below shows the contribution of continuing operations to the generation or use of cash by operating activities, in investment activities, and in the remuneration of
capital.

In millions of euros  
31 Dec,2010
31 Dec, 2009
Opening net financial debt   -3,758.2 -3,365.8
Self-financing  956.9 1,291.8
of which attributable to continuing operations  810.0 754.6
Change in net working capital  -201.9 -37.6
Cash flows generated from operating activities  755.0 1,254.2
Investments in property. plant and equipment  -1,104.4 -849.4
Investments in intangible assets  -58.3 -51
Other changes in non-current assets  -21.1 -332.3
Change in equity investments  -8.6 22.7
Cash flows used in investing activities  -1,192.4 -1,210.0
NIC Assets held for sale  -398.8 0
Dividends  -400.8 -337.8
Other changes in equity attributable to the owners of the Parent  46.3 -11.9
Equity attributable to non-controlling interests  0.2 -86.9
Self-financing flows  -354.3 -436.6
Change in financial debt  -1,190.5 -392.4
of which attributable to continuing operations  -964.2(*) -804.6
Closing net financial debt  -4,948.7 -3,758.2
(*) Including net financial position towards RTR.

The cash flows generated from operating activities for the Group during the year came to about € 755 million and relate to self-financing for the year (€ 956.9 million, of which € 810 million refer to continuing operations) and other financial resources used by net working capital (€ 201.9 million).
Under the scope of self-financing, we have a profit for the year of € 613.6 million (of which € 466.7 million refer to continuing operations), amortisation for € 360.5 million and a net decrease in provisions amounting to € 14.1 million, mainly ascribable to the use of the net deferred tax liabilities recorded on previous allocations for accelerated depreciation net of net accruals to the provision for risks and charges, as described previously.
The change in net working capital, equal to -€ 201.9 million, is for the most part due to the net balance of energy payables and receivables referring to temporary economic items.

Investing activities used financial resources for approximately € 1,192.4 million, for the most part relating to core investments made during the period in property, plants and machinery (€ 1,103.4 million) and in intangible assets (€ 58.3 million) - ascribable to the Parent for a total of € 1,120.4 million - and to the value of the NTG portion acquired with the Brescia Transmission Grid (€ 43.4 million) net of grants related to plants recorded during the period (€ 12.4 million). Under this scope, we would also mention the increased value of the investment held in the associate CESI (+€ 8.5 million).

Discontinued operations and assets held for sale have used cash flows of € 398.8 million during the year, basically by virtue of the investments made for the construction and development of photovoltaic plants (€ 345.8 million), measured considering the margin of competence (€ 149 million) determined on the basis of contractual conditions defined in the preliminary sales agreement for the company RTR, net of net trade payables (€ 128.9 million) relating to this.

Cash flows used in self-financing are essentially the result of the distribution of the balance on the 2009 dividend to the owners of the Parent (€ 240.4 million) and the interim dividend for 2010 (€ 160.4 million).
Other changes in equity for the Group refer to the fair value measurement of derivative instruments held to hedge the variable rate debt - CFH, net of the relevant tax effect, of the Parent (€ 25.9 million) and the company RTR (€ 16 million), in addition to the effects of Stock Options exercised during the year (€ 7.2 million) and the acquisition of the further 9% interest in the share capital of CESI (-€ 2.8 million).

Financial resources used by the Group in investment, considering the extraordinary transactions implemented during the period, and the changes to equity, have resulted in total requirements of continuing operations of € 1,562.9 million, covered by means of recourse to a new debt for € 964.2 million and partly with the liquidity generated by operating activities.