Analysis of the Group's financial position

Millions of euro     
 at Dec. 31, 2013 at Dec. 31, 2012 restated Change 
Net non-current assets:         
- property, plant and equipment and intangible assets  99,445  103,399  (3,954)  -3.8% 
- goodwill  15,015  15,910  (895)  -5.6% 
- equity investments accounted for using the equity method  647  1,115  (468)  -42.0% 
- other net non-current assets/(liabilities)  (1,236)  (962)  (274)  28.5% 
Total  113,871  119,462  (5,591)  -4.7% 
Net current assets:         
- trade receivables  11,533  11,719  (186)  -1.6% 
- inventories  3,586  3,338  248  7.4% 
- net receivables due from Electricity Equalization Fund and similar bodies  (2,567)  (2,435)  (132)  5.4% 
- other net current assets/(liabilities)  (4,530)  (5,295)  765  -14.4% 
- trade payables  (13,004)  (13,903)  899  -6.5% 
Total net current assets  (4,982)  (6,576)  1,594  24.2% 
Gross capital employed  108,889  112,886  (3,997)  -3.5% 
Sundry provisions:         
- post-employment and other employee benefits  (3,696)  (4,542)  846  -18.6% 
- provisions for risks and charges and net deferred taxes  (12,713)  (13,618)  905  -6.6% 
Total provisions  (16,409)  (18,160)  1,751  9.6% 
Net assets held for sale  221  309  (88)  -28.5% 
Net capital employed  92,701  95,035  (2,334)  -2.5% 
Total shareholders’ equity 52,839  52,087  752  1.4% 
Net financial debt  39,862  42,948  (3,086)  -7.2% 
Enel Open Data

Property, plant and equipment and intangible assets (including investment property) came to €99,445 million at December 31, 2013, a decrease of €3,954 million. The decrease is essentially attributable to depreciation, amortization and impairment losses for the year (€5,632 million) and exchange rate losses (€3,970 million), partly offset by investments (€5,959 million) and changes in the scope of consolidation (€593 million). The latter are largely accounted for by acquisitions of a number of companies operating in renewables generation in the United States.

Goodwill amounted to €15,015 million, a decrease of €895 million compared with December 31, 2012. The reduction mainly reflects impairment losses of the Enel OGK-5 cash generating unit (€744 million) and the net loss recognized from the translation at current exchange rates of goodwill expressed in currencies other than the euro, in particular that on the CGUs associated with acquisitions in Russia. These effects were only partly offset by the recognition (for some on a provisional basis) of the goodwill associated with the acquisition of control of a number of minor companies of the Renewable Energy Division.

Equity investments accounted for using the equity method amounted to €647 million, down €468 million compared with December 31, 2012. The decrease reflects the disposal in the 4th Quarter of 2013 of the interests held in SeverEnergia and Enel Rete Gas (€395 million), following their reclassification under assets held for sale.

Other net non-current liabilities at December 31, 2013 amounted to €1,236 million, an increase of €274 million compared with December 31, 2012 (net liabilities of €962 million).

The change is attributable to the following factors:

  • an increase of €196 million in net non-current financial liabilities, mainly due to the adjustment of the fair value of the investments in Echelon and Bayan Resources (-€54 million) and the fair value of financial derivatives (-€213 million). More specifically, the latter change reflects the increase in net assets in respect of cash flow hedge deriva35 tives on interests rates, which was more than offset by the decrease in the net fair value of analogous derivatives on exchange rates. These negative factors were partly offset by the increase in deferred financial charges (€70 million);
  • an increase of €78 million in net other non-current liabilities, mainly due to the increase in sundry tax liabilities arising in respect of higher taxes on emissions in Spain following the entry into force of Law 15/2012.

Net current assets came to a negative €4,982 million at December 31, 2013, an increase of €1,594 million compared with December 31, 2012. This change is due to the following factors:

  • a decrease of €186 million in trade receivables, essentially correlated with developments in sales;
  • an increase of €248 million in inventories, mainly associated with greater quantities of green certificates and other environmental certificates, which more than offset the decline in stocks of gas and other fuels as a result of the decline in generation;
  • a decrease of €132 million in net receivables due from Electricity Equalization Fund and similar bodies reflecting the application of equalization mechanisms to electricity purchases;
  • an increase of €765 million in other current assets less related liabilities. This change is due to the following factors:
    • an increase of €522 million in net income tax receivables; the rise is essentially associated with income tax payments in the amount of €2,606 million, partially offset by the recognition of current taxes (net of adjustments for previous years) totaling €2,280 million;
    • an increase of €143 million in net current assets, attributable to the rise in receivables for grants to be received in respect of green certificates in the amount of €142 million and other receivables and payables totaling €395 million, mainly in respect of the receivable for the government grant received by the Argentine distribution company Edesur under the provisions of Resolución 250/2013 concerning the Mecanismo de Monitoreo de Costos. This factor was partly offset by a decline in net tax receivables other than current income taxes in the amount of €394 million, essentially in respect of VAT in Italy and taxes and surtaxes on the consumption of electricity and gas;
    • an increase of €76 million in net current financial assets, attributable to an increase of €60 million in the fair value of derivatives;
  • a decrease of €899 million in trade payables.

Sundry provisions, totaling €16,409 million, fell by €1,751 million compared with 2012. This change is connected with the following factors:

  • a decrease of €846 million in provisions for post-employment and other employee benefits, mainly due to the termination of the transition-to-retirement plan after no employees opted to participate and the fact that a significant number of those entitled to participate in that plan instead have opted to participate in the mechanism provided for under Article 4, paragraphs 1-7-ter, of Law 92/2012 (the Fornero Act), as the latter offers better financial and organizational conditions, making the earlier plan unattractive;
  • a decrease of €601 million in provisions for risks and charges. The decline is essentially attributable to the net reduction in the provision for nuclear decommissioning of plants in Slovakia and Spain. For the latter, the reduction was connected with the remeasurement of the liabilities following recent regulatory changes in Spain, partly offset by a rise in the provision for early retirement incentives. The latter increase reflected the recognition of the liability in respect of the company-level union agreements signed in September 2013 in implementation of the framework agreement of May 9, 2013, governing the approach to be taken in implementing the measures of Law 92/2012, partly offset by utilization of the provision, essentially for the early retirement plan at the Spanish companies;
  • a decrease of €304 million in net deferred tax liabilities, mainly due to the reversal of a portion to profit or loss and exchange rate differences on the net deferred taxes of companies that use a currency other than the euro.

Net assets held for sale amounted to €221 million at December 31, 2013 (€309 million at December 31, 2012), and comprise the net assets of Marcinelle Energie and other minor companies that in view of the decisions taken by management meet the requirements of IFRS 5 for classification as assets held for sale.

Net capital employed at December 31, 2013 came to €92,701 million and was funded by shareholders’ equity pertaining to the shareholders of the Parent Company and non-controlling interests in the amount of €52,839 million and net financial debt of €39,862 million. At December 31, 2013, the debt/equity ratio was 0.75 (0.82 at December 31, 2012).