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.

2012

    • acquisition, on January 13, 2012, of an additional 49% ofRocky Ridge Wind Project, which was already a subsidiary(consolidated line-by-line) controlled through a 51%stake;
    • acquisition, on February 14, 2012, of the remaining 50%of Enel Stoccaggi, a company in which the Group alreadyheld a 50% interest. As from that date the company hasbeen consolidated on a line-by-line basis (previouslyconsolidated proportionately in view of the joint controlexercised);
    • acquisition, on June 27, 2012, of the remaining 50%of a number of companies in the Kafireas wind powerpipeline in Greece, which had previously been includedunder “Elica 2” and accounted for using the equitymethod in view of its 30% stake; as from that date thecompanies have therefore been consolidated on a lineby-line basis;
    • acquisition, on June 28, 2012, of 100% of Stipa Nayaá,a Mexican company operating in the wind generationsector;
    • disposal, on August 2, 2012, of the entire capital of Water& Industrial Services Company (Wisco), which operates inthe waste water treatment sector in Italy;
    • disposal, on October 9, 2012, of the entire share capitalof Endesa Ireland, a company operating in the generationof electricity;
    • acquisition, on October 12, 2012, of the additional 58%of Trade Wind Energy, a company in which the Group hadheld a stake of 42%; as a result of the purchase, the companyis no longer consolidated using the equity methodbut is consolidated on a line-by-line basis;
    • acquisition, on December 21, 2012, of 99.9% of Eólica Zopiloapan, a Mexican company operating in the windgeneration sector.

    2013

    • acquisition, on March 22, 2013, of 100% of Parque EólicoTalinay Oriente, a company operating in the wind generationsector in Chile;
    • acquisition, on March 26, 2013, of 50% of PowerCrop, acompany operating in the generation of electricity frombiomass; in view of the joint control exercised with anotherowner, the company is consolidated on a proportionate basis;
    • disposal, on April 8, 2013, of 51% of Buffalo Dunes WindProject, a company operating in the wind generation sectorin the United States;
    • acquisition, on May 22, 2013, of 26% of Chisholm ViewWind Project and Prairie Rose Wind Project, two companiesoperating in the wind generation sector in the UnitedStates in which the Group held a stake of 49%; as a resultof the purchase, the companies are no longer consolidatedusing the equity method but are consolidated ona line-by-line basis;
    • acquisition, on August 9, 2013, of 70% of Domus Energia(now Enel Green Power Finale Emilia), a company operatingin the biomass generation sector;
    • acquisition, on October 31, 2013, of 100% of CompañíaEnergética Veracruz, a company operating in the developmentof hydroelectric plants in Peru;
    • disposal, on November 13, 2013, of 40% of Artic Russia,with the consequent deconsolidation of the interest heldby the latter in SeverEnergia;
    • acquisition, in November and December 2013, of ninecompanies (representing three business combinations)operating in the development of wind power projects inthe United States;
    • disposal, on December 20, 2013, of the remaining stakein Enel Rete Gas, previously consolidated using the equitymethod.

    Definitive allocation of the purchase price of a number of companies of the Renewable Energy Division

    Following the acquisition of control in 2012 of a number ofcompanies of the Greek Kafireas wind pipeline and 100% ofStipa Nayaá and Eólica Zopiloapan, Mexican companies operatingin the wind generation sector, in 2013, the Group completedthe allocation of the associated purchase prices to theassets acquired and the liabilities assumed. More specifically,in all cases the Group:

    • recognized certain intangible assets as a result of thecompletion of the determination of their fair value;
    • determined the tax effects associated with the above recognition;
    • allocated to non-controlling interests the portion of thoseassets pertaining to them.

    The following table summarizes the accounting effects as ofthe acquisition dates

    Definitive allocation of the purchase price

    Millions of euro  
     Kafireas pipelineStipa Nayaá Eólica Zopiloapan 
    Net assets acquired before allocation 125  112 
    Adjustments for measurement at fair value:  
    - intangible assets 55  14  11 
    - deferred tax liabilities (11)  (4)  (3) 
    - non-controlling interests (9)  - -
    Net assets acquired after allocation 36  135  120 
    Value of the transaction (1)  58  139  126 
    Goodwill 22 

    (1) Including incidental expenses.

    Business combinations and acquisitions of joint ventures in 2013

    As regards the acquisitions in 2013 that represent a businesscombination and in compliance with the provision of IFRS 3Revised, the following table reports the impact of the initialrecognition of those transactions. As regards the businesscombinations with Parque Eólico Talinay Oriente, CompañíaEnergética Veracruz, PowerCrop, a number of minor companiesin the Renewable Energy Division and a number of windprojects in the United States (the latter representing threeseparate business combinations), the transactions were recognizedon a provisional basis pending completion of theallocation of the purchase price pursuant to IFRS 3 Revised.Conversely, the business combinations with Chisholm Viewand Prairie Rose were already carried out on a definitive basisand incorporate the remeasurement at fair value of property,plant and equipment in the amounts of €4 million and€1 million, respectively.

    Business combinations and acquisitions of joint ventures in 2013

     Business combinationsAcquisitions of joint ventures
    Millions of euroParque Eólico Talinay Oriente Chisholm View Wind Project Prairie Rose Wind US wind projects Other minor operations in the Renewable Energy Division Compañía Energética Veracruz PowerCrop 
    Property, plant and equipment 127  276  223  - 10 
    Intangible assets - - - 69  - 14 
    Other non-current assets 19  - - - - - -
    Cash and cash equivalents - - - -
    Current assets - - - -
    Non-current liabilities - (124)  (108)  (20)  (2)  - -
    Current liabilities (20)  (29)  (24)  (6)  - - (2) 
    Non-controlling interests - (34)  (25)  - (3)  - -
    Net assets acquired 126  101  77  50  14  15 
    Goodwill - - - - 14  -
    Price of the transaction (1)  126  101  77  50  19  14  24 
    Cash flow impact 81 (2)  35 (3)  27 (4)  - 19  4 (5) 
    Cash flow impact excluding cash and cash equivalents acquired 81  27  18  - 18 

    (1) Including incidental expenses.
    (2) Net of the advance paid in 2012 (€27 million) and the amount still to be paid (€18 million).
    (3) Net of the value of the interest acquired in 2012, previously accounted for using the equity method (€66 million).
    (4) Net of the value of the interest acquired in 2012, previously accounted for using the equity method (€50 million).
    (5) Net of the advance paid in 2012 (€8 million) and the amount still to be paid (€12 million).

    Effects of Enersis capital increase

    On March 29, 2013, the capital increase of the Chilean companyEnersis was completed in the overall amount of €4,559million. The capital increase was subscribed by Endesa(60.6%) with the transfer of the equity investments includedin Cono Sur Participaciones and by other shareholders(39.4%) in cash.

    More specifically, the equity investments held directly byCono Sur Participaciones at the transaction date were:

    • Ampla Energia e Serviços, with an interest of 7.70%;
    • Ampla Investimentos e Serviços, with an interest of 7.71%;
    • Codensa, with an interest of 26.66%;
    • Compañia Eléctrica San Isidro, with an interest of 4.39%;
    • Eléctrica Cabo Blanco, with an interest of 80.00%;
    • Emgesa, with an interest of 21.60%;
    • Empresa Distribuidora Sur, with an interest of 6.22%;
    • Endesa Brasil, with an interest of 28.48%;
    • Endesa Cemsa, with an interest of 55.00%;
    • Generalima, with an interest of 100.00%;
    • Inversiones Distrilima, with an interest of 34.83%;
    • Inversora Dock Sud, with an interest of 57.14%;
    • Yacylec, with an interest of 22.22%.

    Since the capital increase was fully subscribed by existingshareholders, after the operation the shareholder base ofEnersis was unchanged. For the Enel Group, the transactionqualifies as a disposal of a minority interest to the extentof the dilution produced with the transfer of the assets toEnersis.

    The following table summarizes the impact of the disposal on the accounts:

    Effects of the disposal of minority interests pertaining to the Endesa-Latin America CGU

    Millions of euro
    Determination of the value of the interest divested in the Enersis capital increase
    Net assets of Cono Sur Participaciones 2,261 
    Non-controlling interests in those assets (180) 
    Goodwill pertaining to those assets 357 
    Value of 92.06% of Cono Sur Participaciones 2,438 
    Interest transferred in Enersis capital increase (39.4%) 961 
    Determination of price for assets transferred
    Capital increase subscribed in cash 1,795 
    Share pertaining to Enel Group (55.8%) 1,001 
    Cost of transaction pertaining to Enel Group (1)  54 
    Price received for disposal 947 
    Net result on transaction (recognized in reserve from disposal of equity interests without loss of control) (14) 

    (1) Calculated on basis of total costs incurred of €94 million, net of tax effects and non-controlling interests.