June 30, 2014 Half-yearly financial report 2014

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(1)2014 Innovation. MARKET. Investments Growth. JOB. Half-yearly financial report June 30, 2014. www.a2a.eu. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 4 SECTORS.

(2) Half-yearly financial report at June 30, 2014. Contents 3. Corporate boards. Key figures of the A2A Group 6. Areas of activity. 7. Geographical areas of activity. 8. Group structure. 9. Financial highlights at June 30, 2014. 11. Shareholdings. 12. A2A S.p.A. on the Stock Exchange. Consolidated results and report on operations 16. Summary of results, assets and liabilities and financial position. 23. Significant events during the period. 28. Significant events after June 30, 2014. 29. Outlook for operations. 1. 32. Consolidated balance sheet. 34. Consolidated income statement. 36. Consolidated statement of comprehensive income. 37. Consolidated cash-flow statement. 38. Statement of changes in Group equity. 40. Balance sheet pursuant to Consob Resolution no. 17221 of March 12, 2010. 42. Income statement pursuant to Consob Resolution no. 17221 of March 12, 2010. Notes to the Half-yearly financial report 44. General information on A2A S.p.A.. 45. The Half-yearly financial report. 46. Financial statements. 47. Basis of preparation. 48. Changes in international accounting standards. 55. Scope of consolidation. 56. Consolidation policies and procedures. 65. Seasonal nature of the business. 66. Results sector by sector. 68. Notes to the balance sheet. 85. Net debt. 86. Notes to the income statement. 93. Earnings per share. 94. Note on related party transactions. 98. Significant non-recurring events and transactions. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. Consolidated financial statements.

(3) Half-yearly financial report at June 30, 2014 Contents. 99 100. Guarantees and commitments with third parties Other information. Attachments to the notes to the Half-yearly financial report 148. 1. Statement of changes in tangible assets. 150. 2. Statement of changes in intangible assets. 152. 3. List of companies included in the consolidated financial statements. 154. 4. List of shareholdings in companies carried at equity. 156. 5. List of companies held by A2A Ambiente S.p.A.. 158. 6. List of available-for-sale financial assets. Changes in legislation 162. Changes in legislation. Scenario and market 190. Macroeconomic scenario. 192. Energy market trends. Analysis of main sectors of activity 198. Energy Sector. 203. Environment Sector. 206. Heat and Services Sector. 209. Networks Sector. 212. Other Services and Corporate. Risks and Uncertainties 216. Risks and uncertainties. Responsible management for sustainability 230. Human resources and industrial relations. 234. Social responsibility and stakeholder relations. 237. Environmental responsibility. 239. Innovation, development and research. Certification of the condensed half-yearly financial statements pursuant to article 154-bis, paragraph 5 of Legislative Decree no. 58/98 244. Certification of the condensed half-yearly financial statements pursuant to article 154-bis, paragraph 5 of Legislative Decree no. 58/98. Indipendent Auditor’s report 246. Indipendent Auditor’s report. This is a translation of the Italian original “Relazione finanziaria semestrale al 30 giugno 2014” and has been prepared solely for the convenience of international readers. In the event of any ambiguity the Italian text will prevail. The Italian original is available on the website www.a2a.eu. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 2.

(4) Half-yearly financial report at June 30, 2014. Corporate Boards. BOARD OF DIRECTORS CHAIRMAN Giovanni Valotti DEPUTY CHAIRMAN Giovanni Comboni CHIEF EXECUTIVE OFFICER Luca Camerano DIRECTORS Antonio Bonomo Stefano Cao Michaela Castelli Elisabetta Ceretti Mario Cocchi Luigi De Paoli Fausto Di Mezza Stefano Pareglio Secondina Giulia Ravera. 3. BOARD OF STATUTORY AUDITORS. STANDING AUDITORS Cristina Casadio Norberto Rosini SUBSTITUTE AUDITORS Onofrio Contu Paolo Prandi INDEPENDENT AUDITORS PRICEWATERHOUSECOOPERS S.P.A.. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. CHAIRMAN Giacinto Gaetano Sarubbi.

(5) WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff.

(6) WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. Key figures of the A2A Group.

(7) Half-yearly financial report at June 30, 2014. Areas of activity. The A2A Group operates in the production, sale and distribution of gas and electricity, district heating, environmental services and the integrated water cycle. These activities in turn form part of the following sectors:. Sectors of the A2A Group Energy. Environment. Heat and services. Networks. Other Services and Corporate. Thermoelectric and hydroelectric plants. Collection and street sweeping. Cogeneration plants. Electricity networks. Other services. Energy management. Treatment. District heating networks. Gas networks. Corporate services. Sale of electricity and gas. Disposal and energy recovery. Sale of heat and other services. Integrated water cycle. This breakdown into sectors reflects the organization of financial reports regularly analyzed by management and the Board of Directors in order to manage and plan the Group’s business.. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 6.

(8) Half-yearly financial report at June 30, 2014. Geographical areas of activity. Updated through December 31, 2012. Updated to June 30, 2014. Hydroelectric plants Thermoelectric plants Cogeneration plants Waste treatment plants Technological partnerships. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 7.

(9) Half-yearly financial report at June 30, 2014. Group structure. A2A S.p.A. 70.95%. 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%. Edipower. 8. Abruzzoenergia. A2A Energia. 70.00%. 100.00%. A2A Alfa. Aspem Energia. 50.00%. 50.00% 33.33%. 43.70%. 50.00%. Ergosud. Premiumgas Lumenergia. EPCG. Metamer. 39.49%. A2A Ambiente A2A Calore & Servizi. 100.00% 60.00% Amsa. 100.00% Aprica. Proaris. A2A Reti Elettriche. 100.00% A2A Ciclo Idrico. 90.00% Aspem (2). A2A Reti Gas. Selene. 100.00% 100.00% A2A Servizi alla A2A Logistica distribuzione. 91.60%. 21.94%. 74.50%. 7.91%. Retragas. Camuna Energia. ACSM-AGAM. Dolomiti Energia. 49.15% ASVT (1). Rudnik Uglja ad Pljevlja. Areas of activity Energy Environment Heat and Services Networks Other companies. (1) Of which 0.38% held through A2A Reti Gas S.p.A.. (2) There are put options on an additional interest in the company’s share capital. This chart shows the most significant shareholdings of the A2A Group. See attachments 3, 4, 5 and 6 for full details of shareholdings.. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 100.00%. A2A Trading.

(10) Half-yearly financial report at June 30, 2014. Financial highlights at June 30, 2014 (*). Revenues _______________________________________________ Gross operating income __________________________________ Net profit _______________________________________________. Income statement figures. 2,582 million euro 551 million euro 97 million euro 01 01 2014 06 30 2014. 01 01 2013 06 30 2013 (a). Revenues. 2,582. 2,845. Operating expenses. (1,701). (1,887). (330). (348). Millions of euro. 9. Gross operating income. 551. 610. Depreciation, amortization, provisions and write-downs. (249). (280). Net operating income. 302. 330. Result from non-recurring transactions. –. (3). Financial balance. (96). (81). Result before taxes. 206. 246. Income taxes. (101). (94). Net result from discontinued operations. –. –. Minorities. (8). (19). Group result of the period. 97. 133. 21.3%. 21.4%. Gross operating income/Revenues. (a) According to the new adopted Income Statement structure the comparative figures for the period January-June 2013 have been reclassified.. (*) The figures serve as performance indicators as required by CESRN/05/178/B.. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. Labour costs.

(11) Half-yearly financial report at June 30, 2014 Financial highlights at June 30, 2014. Balance sheet figures. Millions of euro. 06 30 2014. 12 31 2013. Net capital employed. 6,881. 7,222. Total equity attributable to the Group and minorities. 3,309. 3,348. Consolidated net financial position. (3,572). (3,874). Consolidated net financial position/Equity attributable to the Group and minorities. 1.08. 1.16. Consolidated net financial position/Average market capitalisation. 1.29. 1.95. 01 01 2014 06 30 2014. 01 01 2013 06 30 2013. Financial data. Millions of euro. Net cash from operating activities. 530. 497. Net cash used in investing activities. (123). (114). Free cash flow. 407. 383. Average market capitalization in 2014 _______________________. 2,759 millions of euro. 10 06 30 2014. 12 31 2013. Share capital (euro). 1,629,110,744. 1,629,110,744. Number of ordinary shares (par value 0.52 euro). 3,132,905,277. 3,132,905,277. Number of treasury shares (par value 0.52 euro). 26,917,609. 26,917,609. 06 30 2014. 06 30 2013. Average 6-month Euribor. 0.395%. 0.330%. Average price of Brent crude (US$/bbl). 108.29. 107.99. 1.37. 1.31. Average price of Brent crude (euro/bbl). 79.00. 82.20. Average price of coal (euro/tonne). 55.99. 63.27. Key indicators. Average exchange rate euro/US$ (*). (*) Source: Italian Foreign Exchange Office. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. Key figures of A2A S.p.A..

(12) Half-yearly financial report at June 30, 2014. Shareholding (*). Municipality of Milan. 27.5%. Municipality of Brescia UBS Group 2.0% Carlo Tassara 2.5%. (*) Stakes higher than 2% (updated at June 30, 2014) Source: CONSOB. 27.5%. 11. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. Market 40.5%.

(13) Half-yearly financial report at June 30, 2014. A2A S.p.A. on the Stock Exchange. A2A in figures (Italian Stock Exchange) Market capitalisation at June 30, 2014 (millions of euro) Average capitalisation in the first half of 2014 (millions of euro). 2,759. Average volumes in the first half of 2014:. 16,093,674. Average price in the first half of 2014 (*). 0.881. Maximum price in the first half of 2014 (*). 1.029. Minimum price in the first half of 2014 (*). 0.784. Number of shares. 3,132,905,277. (*) Euro per share Source: Bloomberg. A2A stock is also traded on the following platforms: Chi-X, BATS, Turquoise, Equiduct, Sigma-X, BOAT OTC, LSE Europe OTC, BATS Chi-X OTC On June 26, 2014 A2A distributed a dividend equal to 0.033 euro per share.. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 12. 2,639.

(14) Half-yearly financial report at June 30, 2014 A2A S.p.A. on the Stock Exchange. Rating Current M/L Term Rating Standard & Poor’s. Short Term Rating Outlook. Moody’s. M/L Term Rating Outlook. BBB A–2 Negative Baa3 Stable. Source: Rating Agencies. A2A forms part of the following indices FTSE MIB STOXX Europe EURO STOXX WisdomTree S&P Developed Ex-US 13. Ethical Indices ECPI Ethical Index EMU Axia Sustainable Index Solactive Climate Change Index FTSE ECPI Italia SRI Benchmark Standard Ethics Italian Index Source: Bloomberg. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. Moreover, A2A has been included in the Ethibel Excellence Investment Register..

(15) Half-yearly financial report at June 30, 2014 A2A S.p.A. on the Stock Exchange. A2A in the first half of 2014 1.10. 140,000,000 120,000,000. 80,000,000. 0.90. 60,000,000 140,000,000. 1.10. 40,000,000 120,000,000. 0.80. €/share. 1.00. 0.70. 100,000,000 20,000,000. 0.90 j a. n. fe. b. -1. 4. m. ar. -1. 4. ap. m. ay. r-. -1. 0.80. 4. 14. Volumes. 0.70 A2A vs FTSE MIBfeb jan. m. ar. -1. -1. 13030th December 4 (Price 20134 = 100) 125. ay. 14. Volumes. 120. 4. 80,000,000 0. -160,000,000 4 40,000,000 20,000,000. m. r-. 4. n. -1. Price. ap. -1. ju. ju. n. -1. 4. 0. -1. 4. Price. Historical volatility in the 1st half of 2014: A2A: 28.9% FTSE MIB: 20.0%. 115 110. 130. 105. 125. 100. 120. 95 115 90 110 85 105 80 100. j 95 an 14 90. fe. b. m. -1. ar. 4. -1. 4. 85 80. jan. -1. 4. fe. b. m. -1. 4. ar. -1. 4. m. ay. r-. 14. A2A. A2A. Fonte: Bloomberg. ap. ju. n-. -1. 4. 14. FTSE MIB ap. r-. 14. m. FTSE MIB. ay. -1. 4. ju. n-. 14. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 14. Volumes. 100,000,000. Volumes. €/share. 1.00.

(16) WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. Consolidated results and report on operations.

(17) Half-yearly financial report at June 30, 2014. Summary of results, assets and liabilities and the financial position. Results The results for the first half of 2014 are not comparable with those for the corresponding period of the previous year as the figures for 2013 include a contribution of 77% arising from the production of the thermoelectric and hydroelectric plants of Edipower S.p.A. until October 2013. The production of the Turbigo thermoelectric plant and the Tusciano hydroelectric complex are not included from November 2013 onwards following the nonproportional demerger from Edipower S.p.A. into Iren Energia S.p.A., while the other plants of Edipower S.p.A. made a full contribution. Millions of euro. Revenues of which: - Revenues from the sale of goods and services - Other operating income Operating expenses Labour costs Gross operating income Depreciation, amortization and write-downs Provisions Net operating income Results from non-recurring transactions Net financial charges Affiliates Result before taxes Income taxes Result after taxes from operating activities Net result from discontinued operations Minorities Group result of the period. 01 01 2014 06 30 2014. 01 01 2013 06 30 2013 (*). Change. 2,582. 2,845. (263). 2,475 107 (1,701) (330) 551 (229) (20) 302 (101) 5 206 (101) 105 – (8) 97. 2,739 106 (1,887) (348) 610 (243) (37) 330 (3) (88) 7 246 (94) 152 – (19) 133. (264) 1 186 18 (59) 14 17 (28) 3 (13) (2) (40) (7) (47) – 11 (36). (*) The comparative figures for the period from January to June 2013 have been reclassified on the basis of the new income statement structure.. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 16.

(18) Half-yearly financial report at June 30, 2014 Summary of results, assets and liabilities and the financial position. The A2A Group earned revenues of 2,582 million euro in the first half of 2014, a decrease of 263 million euro over the corresponding period of the previous year due mainly to a contraction in sales of energy for heating use resulting from the relatively high temperatures during the period. Key quantitative data for the half year contributing to the formation of these revenues, with comparative figures for the corresponding period of 2013, are as follows: 06 30 2013. Electricity sold to wholesale and retail customers (GWh). 13,634. 11,178. Electricity sold on the Power Exchange (GWh). 6,420. 6,377. Electricity sold on foreign markets (GWh). 6,855. 4,930. Electricity sold - EPCG (GWh). 1,982. 2,208. Gas sold (Mcm). 1,457. 1,294. Heat sold (GWht). 1,149. 1,471. 5,405. 5,533. Electricity distributed - EPCG (GWh). 1,207. 1,274. Gas distributed (Mcm). 1,020. 1,227. 30. 32. Electricity distributed (GWh). Water distributed (Mcm) Water purified (Mcm) Waste disposed of (Ktonne). Production details Thermoelectric production (GWh) Thermoelectric production - EPCG (GWh). 17. 19. 1,276. 1,284. 06 30 2014. 06 30 2013. 2,657. 3,518. 590. 522. 3,042. 2,411. Hydroelectric production - EPCG (GWh). 870. 1,760. Heat production (GWht). 1,154. 1,474. Hydroelectric production (GWh). Electricity produced by cogeneration (GWh). 153. 191. Electricity sold coming from waste to energy and biogas plants (GWh). 557. 557. “Gross operating income” of 551 million euro decreased by 59 million euro over the first half of 2013.. 17. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 06 30 2014.

(19) Half-yearly financial report at June 30, 2014 Summary of results, assets and liabilities and the financial position. The following table provides an analysis of this figure by business sector: Millions of euro. 06 30 2014. 06 30 2013. 262. 293. 115. 155. Energy Sector Environment Sector Heat and Services Sector Networks Sector Other Services and Corporate Sector Total EBITDA. 39. 57. 146. 121. (11) 551. (16) 610. The gross operating income of the Energy Sector, which amounted to 262 million euro, decreased by 31 million euro over the first half of the previous year. This decrease can be essentially attributed to the result of the subsidiary EPCG, which although positive and amounting to 22 million euro fell by 31 million euro in this segment over the first six months of the previous year, which benefited from higher hydroelectric production. Excluding this effect, the gross operating income of the Energy Sector was in line with that of the first half of 2013, thanks to increased margins earned on the environmental certificates markets and the positive performance of trading activities. The gross operating income of the Environment Sector amounted to 115 million euro, a decrease of 40 million euro over the first half of 2013. This difference is mainly due to income of 27 million euro recognized in the first half of 2013 relating to 2012 and regarding the sales price of electricity produced under the CIP 6 framework, and to the lower revenues arising from the expiry of the CIP 6 conventions for the waste-to-energy plant at Brescia. Excluding these items, the sector would have posted gross operating income in the first half of 2014 slightly higher than that earned in the first half of 2013, as the result of the margins earned by the industrial activity of waste disposal and the construction of treatment plants. The gross operating income of the Heat and Services Sector totaled 39 million euro, a decrease of 18 million euro over the first half of 2013. This decrease, which regards both district heating and heat management, is essentially due to the unusual weather conditions, especially in the first quarter of 2014. Conversely temperatures were below historical averages in the first few months of 2013. This adverse effect was partially offset by the effective steps taken in commercial development and the increased margins earned from the sale of the white certificates granted for the management of the district heating service in Milan, Brescia and Bergamo. The gross operating income of the Networks Sector closed at 146 million euro, a rise of 25 million euro over the first half of 2013. The result for the six months ended June 30, 2013,. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 18.

(20) Half-yearly financial report at June 30, 2014 Summary of results, assets and liabilities and the financial position. however, included a provision of 10 million euro made for redundancy costs arising from the business restructuring plan. Excluding this effect, the sector’s gross operating income rose by 15 million euro over the corresponding period in 2013. This increase is mainly due to the electricity distribution subsector: the application of Resolution no. 258/14/R/eel issued by the AEEGSI in June led to an increase in the revenues approved for A2A Reti Elettriche for 2012, 2013 and 2014. The electricity distribution subsector of the EPCG Group made a positive contribution due to an increase in distribution tariffs. “Depreciation, amortization, provisions and write-downs” amounted in total to 249 million euro (280 million euro for the six months ended June 30, 2013). The decrease of 31 million euro is essentially due to a lower charge for depreciation and amortization and reduced provisions for risks. As a result of these changes “Net operating income” arrived at 302 million euro (330 million euro for the six months ended June 30, 2013). “Net financial charges” amounted to 101 million euro (88 million euro in the first half of 2013).. 19. Net interest decreased by 17 million euro over the corresponding period of the previous year, while losses of 30 million euro arose from the measurement of derivatives at fair value. “Affilates” closed with a positive balance of 5 million euro (a positive balance of 7 million euro in the first half of 2013). This arises mainly from accounting for the shareholdings in Dolomiti Energia S.p.A. and ACSM-AGAM S.p.A. using the equity method. “Income taxes” amounted to 101 million euro for the period. The charge of 94 million euro for the first half of 2013 was stated net of certain non-recurring benefits.. amounted to 97 million euro (133 million euro for the six months ended June 30, 2013).. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. After deducting the result attributable to minorities, the “Group net result of the year”.

(21) Half-yearly financial report at June 30, 2014 Summary of results, assets and liabilities and the financial position. The balance sheet and financial position Consolidated “Capital employed” amounted to 6,881 million euro at June 30, 2014 and was funded by equity of 3,309 million euro and net debt of 3,572 million euro. “Working capital” amounted to 404 million euro, a decrease of 337 million euro over December 31, 2013, mainly as the result of a reduction in trade receivables and other current assets. “Net fixed capital”, which includes “Assets/liabilities held for sale”, amounted to 6,477 million euro, a decrease of 4 million euro over December 31, 2013. The “Net financial position” of 3,572 million euro improved by 302 million euro over December 31, 2013 due to the generation of cash from operating activities, partially offset by cash of 124 million euro used in investing activities and the distribution of dividends of 102 million euro.. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 20.

(22) Half-yearly financial report at June 30, 2014 Summary of results, assets and liabilities and the financial position. 06 30 2014. 12 31 2013. Net fixed capital. 6,477. 6,481. (4). - Tangible assets. 5,828. 5,930. (102). - Intangible assets. 1,306. 1,306. Millions of euro. Change. CAPITAL EMPLOYED. –. - Shareholdings and other non-current financial assets (*). 200. 196. 4. - Other non-current assets/liabilities (*). (288). (379). 91 (13). 359. 372. - Provisions for risks, charges and liabilities for landfills. - Deferred tax assets/liabilities. (568). (605). 37. - Employee benefits. (360). (339). (21). of which with counter-entry to equity. (287). (379). Working capital. 404. 741. 285. 284. - Inventories. (337) 1. - Trade receivables and other current assets (*). 1,956. 2,272. (316). - Trade payables and other current liabilities (*). (1,884). (1,872). (12). - Current tax assets/tax liabilities of which with counter-entry to equity. 47. 57. (139). (8). (10). Assets/liabilities held for sale (*). -. -. of which with counter-entry to equity. -. -. 6,881. 7,222. (341). Equity. 3,309. 3,348. (39). Total financial position beyond one year. 3,946. 3,942. 4. TOTAL CAPITAL EMPLOYED. -. 21. SOURCES OF FUNDS. Total financial position within one year Total net financial position of which with counter-entry to equity TOTAL SOURCES. (374) 3,572. (68) 3,874. 33. 31. 6,881. 7,222. (306) (302) (341). WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. (*) Excluding balances included in the net financial position..

(23) Half-yearly financial report at June 30, 2014 Summary of results, assets and liabilities and the financial position. Millions of euro. NET FINANCIAL POSITION AT THE BEGINNING OF THE PERIOD. 01 01 2014 06 30 2014 (3,874). 01 01 2013 06 30 2013 (4,372). Net result. 105. 152. Depreciation and amortization. 229. 241. Write-downs/disposals of tangible and intangible assets Affiliates Net taxes paid. 1. 5. (5). (7). (57). (29). Change in assets and liabilities (*). 257. 135. Net cash from operating activities. 530. 497. Net cash used in investing activities. (123). (114). Free cash flow. 407. 383. Cash flow from the distribution of dividends. (103). (87). Changes in financial assets/liabilities with counter-entry to equity NET FINANCIAL POSITION AT THE END OF THE PERIOD. (2) (3,572). 2 (4,074). (*) Excluding balances with counter-entry to equity.. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 22.

(24) Half-yearly financial report at June 30, 2014. Significant events during the period. The EIB provides financing of 115 million euro for A2A’s investment plan The European Investment Bank (EIB) and A2A have entered an agreement for 15-year loan of 115 million euro for carrying out investments relating to integrated waste management and power generation. 23. Settlement of the dispute between A2A Reti Elettriche S.p.A. and ENEL On March 18, 2014 the dispute between A2A Reti Elettriche S.p.A. and ENEL relating to the value of the electricity distribution business in the Municipalities of Milan and Rozzano came to a close, as described in further detail in the section “Other information”. This business was acquired in 2002 as part of the liberalization measures included in Legislative Decree no. 79/1999, and in the absence of an agreement on the price with the seller ENEL the amount to be paid was calculated by an arbitration panel.. to A2A Reti Elettriche S.p.A... Amsa S.p.A. and the Municipality of Milan sign an agreement for 20142016 On April 3, 2014, Amsa S.p.A., a subsidiary of A2A S.p.A., entered a service agreement with the Municipality of Milan covering waste management, street and green area cleaning, special services and other services upon request (such as the removal of illegally dumped waste, reclamation and snow removal) for the period from January 1, 2014, to December 31, 2016.. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. The settlement agreement agreed by the parties requires ENEL to repay 89.5 million euro.

(25) Half-yearly financial report at June 30, 2014 Significant events during the period. Moody’s upgrades its outlook to stable and keeps its rating for A2A S.p.A. unchanged at Baa3 Moody’s has upgraded its outlook for A2A from “negative” to “stable” and confirmed its long-term rating for the company at Baa3.. A2A S.p.A.: the Supervisory Board approves the 2013 financial statements Meeting on April 29, 2014 under the chairmanship of Prof. Pippo Ranci Ortigosa, the Supervisory Board approved the separate and consolidated financial statements for the year ended December 31, 2013 prepared by the Management Board. The Supervisory Board also approved the Management Board’s proposal for the payment of a dividend of 0.033 euro per ordinary share, to be paid as from June 26, 2014 (ex-dividend June 23, 2014) with record date June 25, 2014, for submission to the Shareholders’ Meeting of June 13-16, 2014.. A2A S.p.A. and the trade unions sign an agreement for dealing with the crisis in the electricity production sector On May 23, 2014 A2A S.p.A. and the electricity sector trade unions signed an important agreement at the offices of Assolombarda. Given the critical situation on the electricity market, which deteriorated even further in the first quarter of 2014 (demand for electricity fell for the tenth consecutive quarter and has now reached 2002 levels), the objective was set to improve the competitiveness of the Group’s production plants while at the same time minimizing the effects on employment. The agreement, together with the confirmation of a number of lay-off schemes and other schemes already used in 2013 whose aim is to maintain jobs (solidarity contracts and the state-subsidized “cassa integrazione ordinaria” scheme), envisages the early retirement of 120 workers and the start of a “mobilità” scheme to encourage the redeployment and retraining of the Group’s staff at a local level, including by way of transfer to business areas less affected by the crisis. During the various meetings with the unions, the company also illustrated the progress made by the “Networks Area” reorganization project (regarding A2A Reti Elettriche S.p.A., A2A Reti Gas S.p.A. and A2A Servizi alla Distribuzione S.p.A.) agreed with the unions in July 2013.. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 24.

(26) Half-yearly financial report at June 30, 2014 Significant events during the period. This project also has the aim of increasing the competitiveness of the companies involved through job retraining and the development of skills already to be found in the Group. When fully implemented the project will create new job opportunities for around 50 people, who will partly be selected from within the Group and partly by hiring around 30 young graduates and high school leavers over the next two years. This operation has led to the recognition of a lay-off provision of approximately 9 million euro at June 30, 2014.. A2A S.p.A.: lists submitted for the appointment of the Board of Directors and the Board of Statutory Auditors The following lists of candidates were submitted on May 20, 2014:. For the Board of Directors:. 25. The Municipality of Brescia and the Municipality of Milan put forward the names of the following people: Giovanni Valotti (as Chairman of the Board of Directors), Giovanni Comboni (as Deputy Chairman of the Board of Directors), Luca Camerano (jointly put forward as Chief Executive Officer by the Municipality of Milan and the Municipality of Brescia), Stefano Cao, Elisabetta Ceretti, Michaela Castelli, Fausto Di Mezza, Stefano Pareglio, Antonio Bonomo, Luciana Ravicini, Maria Elena Costanza Bruna Cappello, Marina Brogi and Enrico Corali. Carlo Tassara S.p.A. put forward the names of the following people: Mario Cocchi and. The Municipality of Bergamo and the Municipality of Varese put forward the names of the following people: Marco Baga and Renzo Torchiani. A group of asset management companies and institutional investors put forward the names of the following people: Luigi De Paoli, Dina Ravera and Vittorio Mongino.. For the Board of Statutory Auditors: The Municipality of Brescia and the Municipality of Milan put forward the names of the following people: Norberto Rosini and Cristina Casadio as standing auditors and Paolo Prandi as substitute auditor.. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. Giambattista Brivio..

(27) Half-yearly financial report at June 30, 2014 Significant events during the period. Carlo Tassara S.p.A. put forward the names of the following people: Franco Carlo Papa and Stefano Spiniello. A group of asset management companies and institutional investors put forward the names of the following people: Giacinto Sarubbi and Onofrio Contu.. A2A S.p.A.: Shareholders’ Meeting At a general meeting on June 13, 2014, the shareholders of A2A S.p.A.: 1) approved the proposed distribution of a dividend of 0.033 euro per ordinary share to be paid as from June 26, 2014 (ex-dividend (coupon no. 17) from June 23, 2014) with record date June 25, 2014; 2) voted in favor of the first part of the 2014 Report on remuneration; 3) authorized the Board of Directors to purchase and dispose of treasury shares (the maximum number of treasury shares that may be held is 313,290,527, taking into account the shares already held by A2A S.p.A. and its subsidiaries, being one tenth of the shares making up the share capital); 4) approved the new bylaws which provide for the adoption of the “traditional” system of management and control; 5) appointed the following Board of Directors of 12 members for a term of three years using the voting list system: Giovanni Valotti – Chairman, Giovanni Comboni – Deputy Chairman, Luca Camerano, Stefano Cao, Elisabetta Ceretti, Michaela Castelli, Fausto Di Mezza, Stefano Pareglio and Antonio Bonomo (taken from the list jointly submitted by the Municipality of Brescia and the Municipality of Milan, owners of a total shareholding equal to 55.124% of share capital), Mario Cocchi (taken from the list submitted by the minority shareholder Carlo Tassara S.p.A., owner of a total shareholding equal to 2.512% of share capital), Luigi De Paoli and Dina Ravera (taken from the list jointly submitted by a group of asset management companies and institutional investors, owners of a total shareholding equal to 1.178% of share capital). All those appointed have declared that they meet the requisites of independence prescribed by article 148, paragraph 3 of Legislative Decree no. 58/98 and article 3 of the Corporate Governance Code; 6) established the annual compensation for each director at 80,000 euro; 7) appointed the following Board of Statutory Auditors of 3 standing members and 2 substitute members for a term of three years using the voting list system: Norberto Rosini – standing auditor, Cristina Casadio – standing auditor and Paolo Prandi – substitute auditor (taken from the list jointly submitted by the Municipality of Brescia and the Municipality of Milan, owners of a total shareholding equal to 55.124% of share capital), Giacinto Sarubbi – Chairman and Onofrio Contu – substitute auditor (taken from. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 26.

(28) Half-yearly financial report at June 30, 2014 Significant events during the period. the list jointly submitted by a group of asset management companies and institutional investors, owners of a total shareholding equal to 1.178% of share capital); 8) established the annual compensation for the Chairman of the Board of Statutory Auditors and each standing auditor at 100,000 euro and 70,000 euro respectively.. A2A S.p.A.: Resolution of the Board of Directors On June 17, 2014, A2A S.p.A.’s Board of Directors held its first meeting under the chairmanship of Giovanni Valotti. The Board appointed Luca Valerio Camerano as Chief Executive Officer, vesting him with broad powers for the Company’s ordinary operations. The Board assigned the Chairman specific responsibilities concerning relationships with shareholders, the institutions, regulatory authorities and the media and external relations, and, in conjunction with the Chief Executive Officer, with regard to drawing up proposals for extraordinary operations. The Board of Directors also appointed an Executive Committee made up of three members: the Chairman Giovanni Valotti, the Deputy Chairman without powers Giovanni Comboni and. 27. the Chief Executive Officer Luca Valerio Camerano. The Committee mainly has functions of a consultative nature for coordinating the executive directors’ work and functions of a propositional nature for the Board of Directors. This detailed framework clearly defines responsibilities, facilitates effective and timely decision making, provides for a balance of powers and emphasizes the central role of the Board of Directors in managing the Group and, in particular, determining and pursuing its strategic objectives. As part of the meeting the Board also ascertained the existence of the independence the directors and statutory auditors and the existence of the independence requirements prescribed by article 3 of the Corporate Governance Code for listed companies for the directors Giovanni Comboni – Deputy Chairman, Antonio Bonomo, Stefano Cao, Michaela Castelli, Elisabetta Ceretti, Mario Cocchi, Luigi De Paoli, Stefano Pareglio and Dina Ravera, and the statutory auditors Giacinto Sarubbi – Chairman, Cristina Casadio and Norberto Rosini. Finally, the Board of Directors set up the following three committees, in place of the previous four, appointing their members as follows: • Control and Risks Committee: Michaela Castelli – Chairman, Mario Cocchi – Deputy Chairman, Fausto Di Mezza and Dina Ravera; • Appointments and Compensation Committee: Giovanni Comboni – Chairman, Antonio Bonomo and Stefano Cao; • Committee for the Territory: Giovanni Valotti – Chairman, Stefano Pareglio – Deputy Chairman, Elisabetta Ceretti and Luigi De Paoli.. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. requirements prescribed by article 148, paragraph 3 of the Consolidated Financial Act for all.

(29) Half-yearly financial report at June 30, 2014. Significant events after June 30, 2014. Increase in share capital by EPCG In addition to approving the 2013 financial statements, at their general meeting on July 17, 2014, EPCG’s shareholders resolved a share capital increase arising from the conversion of the company’s tax liability. In detail, this operation was carried out as follows: • 5,883,737 shares, each with a nominal value of 7.6482 euro, were issued in favor of the State of Montenegro for a total of approximately 45 million euro as payment of past tax liabilities; • as a result, EPCG’s shareholding structure has changed slightly as follows, with no variations in A2A’s rights to manage the company as established in the agreements signed in 2009: – State of Montenegro: 57.02% – A2A: 41.75% – minority shareholders: approximately 1.23%.. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 28.

(30) Half-yearly financial report at June 30, 2014. Outlook for operations. In the second half of the year management will continue its work towards achieving a further reduction in the Group’s net financial position and on the operational efficiency plan, designed to mitigate the effects on results arising from the unfavorable meteorological conditions in the first few months of the year and the persistence of the economic crisis.. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 29.

(31) WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff.

(32) WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. Consolidated financial statements.

(33) Half-yearly financial report at June 30, 2014. Consolidated balance sheet (1) Assets. Note. 06 30 2014. 12 31 2013. 06 30 2013. Tangible assets. 1. 5,828. 5,930. 6,231. Intangible assets. 2. 1,306. 1,306. 1,384. Shareholdings carried according to equity method. 3. 191. 187. 217. Millions of euro NON-CURRENT ASSETS. Other non-current financial assets. 3. 51. 53. 54. Deferred tax assets. 4. 359. 372. 261. Other non-current assets. 5. 62. 53. 79. 7,797. 7,901. 8,226. TOTAL NON-CURRENT ASSETS CURRENT ASSETS Inventories. 6. 285. 284. 263. Trade receivables. 7. 1,651. 1,889. 1,849. Other current assets. 8. 305. 383. 473. Current financial assets. 9. 126. 107. 81. Current tax assets. 10. 50. 70. 49. Cash and cash equivalents. 11. 376. 376. 710. 2,793. 3,109. 3,425. –. –. 346. 10,590. 11,010. 11,997. TOTAL CURRENT ASSETS NON-CURRENT ASSETS HELD FOR SALE TOTAL ASSETS. (1) As required by Consob Resolution no. 17221 of March 12, 2010 the effects of related party transactions on the consolidated financial statements are provided in the financial statements in section 0.2 and commented upon in Note 36. The effects of significant non-recurring events and transactions on the consolidated financial statements are presented in Note 37 as required by Consob Communication no. DEM/6064293 of July 28, 2006.. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 32.

(34) Half-yearly financial report at June 30, 2014 Consolidated balance sheet. Equity and liabilities. Millions of euro. Note. 06 30 2014. 12 31 2013. 06 30 2013. 12. 1,629. 1,629. 1,629. EQUITY Share capital (Treasury shares). 13. Reserves. 14. Result of the year Result of the period. 15. Equity pertaining to the Group Minority interests. 16. Total equity. (61). (61). (61). 1,078. 1,161. 1,189. –. 62. –. 97. –. 133. 2,743. 2,791. 2,890. 566. 557. 862. 3,309. 3,348. 3,752. 33. LIABILITIES NON-CURRENT LIABILITIES Non-current financial liabilities. 17. 3,989. 3,982. 3,506. Employee benefits. 18. 360. 339. 321. Provisions for risks, charges and liabilities for landfills. 19. 568. 605. 597. Other non-current liabilities. 20. 349. 436. 407. 5,266. 5,362. 4,831. 21. 1,145. 1,306. 1,158. Other current liabilities. 21. 739. 566. 732. Current financial liabilities. 22. 128. 415. 1,452. Tax liabilities. 23. Total non-current liabilities Trade payables. 3. 13. 20. Total current liabilities. 2,015. 2,300. 3,362. Total liabilities. 7,281. 7,662. 8,193. LIABILITIES DIRECTLY ASSOCIATED WITH NON-CURRENT ASSETS HELD FOR SALE TOTAL EQUITY AND LIABILITIES. –. –. 52. 10,590. 11,010. 11,997. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. CURRENT LIABILITIES.

(35) Half-yearly financial report at June 30, 2014. Consolidated income statement (1). Millions of euro. Note. 01 01 2014 06 30 2014. 01 01 2013 06 30 2013 (*). 01 01 2013 12 31 2013. 2,475. 2,739. 5,389. 107. 106. 215. 2,582. 2,845. 5,604. 1,594. 1,775. 3,567. 107. 112. 240. Revenues Revenues from the sale of goods and services Other operating income 25. Operating expenses Expenses for raw materials and services Other operating expenses Total Operating expenses. 26. 1,701. 1,887. 3,807. Labour costs. 27. 330. 348. 664. Gross operating income - EBITDA. 28. 551. 610. 1,133. Depreciation, amortization, provisions and write-downs. 29. 249. 280. 876. Net operating income - EBIT. 30. 302. 330. 257. Result from non-recurring transactions. 31. –. (3). 75. Financial balance Financial income. 12. 30. 80. Financial expense. 113. 118. 263. 5. 7. Affiliates Result from disposal of other shareholdings (AFS) Total financial balance Result before taxes. – 32. –. (96). (81). 206. 246. (23) – (206) 126. (1) As required by Consob Resolution no. 17221 of March 12, 2010 the effects of related party transactions on the consolidated financial statements are provided in the financial statements in section 0.2 and commented upon in Note 36. The effects of significant non-recurring events and transactions on the consolidated financial statements are presented in Note 37 as required by Consob Communication no. DEM/6064293 of July 28, 2006. (*) According to the new adopted Income Statement structure the comparative figures for the period January-June 2013 have been reclassified.. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 34. Total Revenues.

(36) Half-yearly financial report at June 30, 2014 Consolidated income statement. Millions of euro. Income taxes. Note. 01 01 2014 06 30 2014. 01 01 2013 06 30 2013 (*). 01 01 2013 12 31 2013. 33. 101. 94. 51. 105. 152. 75. –. –. –. 105. 152. 75. Result after taxes from operating activities Net result from discontinued operations Net result Minorities. (8). (19). (13). 97. 133. 62. – basic. 0.0311. 0.0428. 0.0201. – basic, from operating activities. 0.0311. 0.0428. 0.0201. Group result of the period. 34. 35. Earnings (loss) per share (in euro):. – basic, from activities held for sale. –. –. –. – diluted. 0.0311. 0.0428. 0.0201. – diluted, from operating activities. 0.0311. 0.0428. 0.0201. –. –. –. – diluted, from activities held for sale. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. (*) According to the new adopted Income Statement structure the comparative figures for the period January-June 2013 have been reclassified..

(37) Half-yearly financial report at June 30, 2014. Consolidated statement of comprehensive income. Millions of euro. 06 30 2014. 06 30 2013. 12 31 2013. Net result (A). 105. 152. 75. Actuarial gains/(losses) on Employee's Benefits booked in the Net equity. (22). 4. 7. (1). 5. Tax effect of other actuarial gains/(losses) Total actuarial gains/(losses) net of the tax effect (B). (15). 3. (15). Effective part of gains/(losses) on cash flow hedge. (39). (16). (8). 14. 6. 3. (25). (10). (5). Tax effect of other gains/(losses) Total other gains/(losses) net of the tax effect of companies consolidated on a line-by-line basis (C) Other gains/(losses) of companies valued at equity net of the tax effect (D) Total comprehensive result (A) + (B) + (C) + (D). –. –. –. 65. 145. 55. 57. 125. 42. 8. 20. 13. Total comprehensive result attributable to: Shareholders of the parent company Minority interests. With the exception of the actuarial effects on employee benefits recognized in equity, the other effects stated above will be reclassified to profit or loss in subsequent years. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 36. (20).

(38) Half-yearly financial report at June 30, 2014. Consolidated cash-flow statement. Millions of euro. 06 30 2014. CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD/YEAR. 12 31 2013. 376. 06 30 2013. 553. 553. Operating activities Net Result (**). 105. Tangible assets depreciation. 200. Intangible assets amortization Fixed assets write-downs/disposals Result from affiliates. (9). 210. 29. 66. 31. 1. 260. (5). Net taxes paid (a). (57). Gross change in assets and liabilities (b). 257. 152. 420. 5. 23 (122). 37. (7) (29). 141. 135. Total change of assets and liabilities (a+b) (*). 200. 19. 106. Cash flow from operating activities. 530. 779. 497. Investments in tangible assets. (93). (227). (89). Investments in intangible assets and goodwill. (31). (57). (29). Investments in shareholdings and securities (*). –. (3). (3). Disposal of fixed assets and shareholdings. –. 53. 4. Dividends received. 1. 3. 3. Cash flow from investment activities. (123). (231). (114). FREE CASH FLOW. 407. 548. 383. Financing activities Change in financial assets (*) Change in financial liabilities (*) Net financial interests paid Dividends paid by the parent company Dividends paid by the subsidiaries Cash flow from financing activities CHANGE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD/YEAR. (34). (96). (75). (224). (369). 10. (46). (173). (74). (102). (81). (81). (1). (6). (6). (407). (725). (226). (177). 157. 376. 710. – 376. (*) Cleared of balances in return of shareholders’ equity and other balance sheet items. (**) Net Result is exposed net of gains on shareholdings’ and fixed assets’ disposals.. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. Investment activities.

(39) Half-yearly financial report at June 30, 2014. Statement of changes in Group equity. Net equity at December 31, 2012 (**) 38. Changes of the first half of 2013 2012 result allocation Distribution of dividends IAS 19 reserve (*) IAS 32 and IAS 39 reserves (*) Put option on Edipower S.p.A. shares Other changes Group and minorities result of the period Net equity at June 30, 2013 Changes of the second half of 2013 IAS 19 reserve (*) IAS 32 and IAS 39 reserves (*) Put option on Edipower S.p.A. shares Effect from non-proportional Edipower S.p.A. demerger Other changes Group and minorities result of the period Net equity at December 31, 2013. Share capital. Treasury shares. Cash Flow Hedge. Note 13. Note 14. Note 15. 1,629. (61). (11). 1,629. (61). (*) These form part of the statement of comprehensive income.. (27). 6. 1,629. (61). Changes of the first half of 2014 2013 result allocation Distribution of dividends IAS 19 reserve (*) IAS 32 and IAS 39 reserves (*) Other changes Group and minorities net result of the period Net equity at June 30, 2014. (16). (21). (25). 1,629. (61). (46). WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. Description Millions of euro.

(40) Half-yearly financial report at June 30, 2014 Statement of changes in Group equity. Result of the period/year. Note 15. Note 16. 1,034. 260. 260 (81) 3. 133 133. (18). 5. 62 (102) (15). (71) 62. 2,846. 851. 3,697 39. (81) 3 (11) (3) 3 133 2,890. 5 (71) 2,791. (6) 1 (3) 19 862. (1) (297) (1) (6) 557. (87) 3 (10) (3) 152 3,752. (18) 5 (21) (297) 4 (77) 3,348. (62). (3) 97 1,124. Total Net shareholders equity. Note 17. (18) 6 (21). (21). 1,182. Minority interests. (260). (3) 3 1,216. Total Equity pertaining to the Group. 97. (102) (15) (25) (3) 97 2,743. 1 8 566. (102) (15) (25) (2) 105 3,309. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. Other Reserves and retained earnings.

(41) Half-yearly financial report at June 30, 2014. Balance sheet pursuant to Consob Resolution no. 17221 of March 12, 2010. Assets. Millions of euro. 06 30 2014. of which 12 31 2013 of which 06 30 2013 of which Related Related Related Parties Parties Parties (note n. 36) (note n. 36) (note n. 36). NON-CURRENT ASSETS 5,828. 5,930. 6,231. Intangible assets. 1,306. 1,306. 1,384. Shareholdings carried according to equity method Other non-current financial assets Deferred tax assets Other non-current assets TOTAL NON-CURRENT ASSETS. 191. 191. 187. 187. 217. 217. 51. 4. 53. 6. 54. 6. 359. 372. 62. 53. 261 79. 7,797. 7,901. 8,226. CURRENT ASSETS Inventories. 285. 284. 1,651. Other current assets. 305. 383. 473. Current financial assets. 126. 107. 81. Current tax assets Cash and cash equivalents TOTAL CURRENT ASSETS NON-CURRENT ASSETS HELD FOR SALE TOTAL ASSETS. 134. 1,889. 263. Trade receivables. 154. 1,849. 50. 70. 49. 376. 376. 710. 2,793. 3,109. 3,425. –. –. 346. 10,590. 11,010. 11,997. 171 3. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 40. Tangible assets.

(42) Half-yearly financial report at June 30, 2014 Balance sheet pursuant to Consob Resolution no. 17221 of March 12, 2010. Equity and liabilities. Millions of euro. 06 30 2014. of which Related Parties (note n. 36). 12 31 2013. of which 06 30 2013 of which Related Related Parties Parties (note n. 36) (note n. 36). EQUITY Share capital (Treasury shares) Reserves Result of the year Result of the period Equity pertaining to the Group Minority interests Total equity. 1,629. 1,629. 1,629. (61). (61). (61). 1,078. 1,161. 1,189. –. 62. –. 97. –. 133. 2,743. 2,791. 2,890. 566. 557. 862. 3,309. 3,348. 3,752. 3,989. 3,982. 3,506. 360. 339. 321. 41. LIABILITIES NON-CURRENT LIABILITIES Employee benefits Provisions for risks, charges and liabilities for landfills. 568. Other non-current liabilities. 349. 436. 407. 5,266. 5,362. 4,831. Total non-current liabilities. 1. 605. 1. 597. 1. CURRENT LIABILITIES Trade payables. 1,145. 32. 1,306. 38. 1,158. 39 9. Other current liabilities. 739. 8. 566. 8. 732. Current financial liabilities. 128. 4. 415. 2. 1,452. Tax liabilities. 3. 13. 20. Total current liabilities. 2,015. 2,300. 3,362. Total liabilities. 7,281. 7,662. 8,193. LIABILITIES DIRECTLY ASSOCIATED WITH NON-CURRENT ASSETS HELD FOR SALE TOTAL EQUITY AND LIABILITIES. –. –. 52. 10,590. 11,010. 11,997. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. Non-current financial liabilities.

(43) Half-yearly financial report at June 30, 2014. Income statement pursuant to Consob Resolution no. 17221 of March 12, 2010. Millions of euro. 01 01 2014 06 30 2014. of which 01 01 2013 of which 01 01 2013 of which Related 06 30 2013 Related 12 31 2013 Related Parties (*) Parties Parties (note n. 36) (note n. 36) (note n. 36). Revenues Revenues from the sale of goods and services Other operating income Total Revenues. 223. 2,739. 259. 5,389. 107. 106. 215. 2,582. 2,845. 5,604. 515. Operating expenses Expenses for raw materials and services Other operating expenses Total Operating expenses. 1,594. 12. 107. 20. 1,775. 22. 112. 4. 3,567. 43. 240. 8. 1,701. 1,887. Labour costs. 330. 348. Gross operating income - EBITDA. 551. 610. 1,133. Depreciation, amortization, provisions and write-downs. 249. 280. 876. Net operating income - EBIT. 302. 330. 257. Result from non-recurring transactions. 1. –. 3,807 2. (3). 664. 3. 1. 75. Financial balance Financial income. 12. Financial expense. 113. 3. 30. 13. 118. Affiliates. 5. Result from disposal of other shareholdings (AFS). –. –. Total financial balance. (96). (81). (206). Result before taxes. 206. 246. 126. Income taxes. 101. 94. 51. Result after taxes from operating activities. 105. 152. 75. Net result from discontinued operations Net result. 5. 7. 80. 6. 263 7. (23). (23). –. –. –. –. 105. 152. 75. Minorities. (8). (19). (13). GROUP RESULT OF THE PERIOD. 97. 133. 62. (*) According to the new adopted Income Statement structure the comparative figures for the period January-June 2013 have been reclassified.. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 42. 2,475.

(44) WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. Notes to the Half-yearly financial report.

(45) Half-yearly financial report at June 30, 2014. General information. A2A S.p.A. is a company incorporated under Italian law. A2A S.p.A. and its subsidiaries (the “Group”) operate both in Italy and abroad, in particular following the acquisition in Montenegro which took place in 2009. The A2A Group mainly operates in the following sectors: • the production, sale and distribution of electricity; • the sale and distribution of gas; • the production, distribution and sale of heat through district heating networks; • waste management (from collection and sweeping to disposal) and the construction and management of integrated waste disposal plants and systems, also making these available for other operators; • integrated water cycle management.. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 44.

(46) Half-yearly financial report at June 30, 2014. The Half-yearly financial report. The Half-yearly financial report (in the following the “Half-yearly report”) of the A2A Group at June 30, 2014 is presented in millions of euro; the euro is also the functional currency of the economies in which the Group operates. The Half-yearly report of the A2A Group at June 30, 2014 has been prepared: • in compliance with Legislative Decree no. 58/1998 (art. 154-ter) as amended and with the Issuers’ Regulations published by Consob; • in accordance with the International Financial Reporting Standards (IFRS) issued by the. 45. International Accounting Standard Board (IASB) and adopted by the European Union and in particular IAS 34. IFRS means all the revised international accounting standards (IAS) and all the interpretations of the International Financial Reporting Interpretations Committee (IFRIC), formerly known as the Standing Interpretations Committee (SIC). In preparing the Half-yearly report the Group has applied the same principles as those used in the preparation of the Annual financial report at December 31, 2013. The principles and interpretations described in detail in the paragraph below “Changes in. This Half-yearly report at June 30, 2014 was approved on July 31, 2014 by the Board of Directors, which authorized publication.. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. international accounting standards” were adopted for the first time on January 1, 2014..

(47) Half-yearly financial report at June 30, 2014. Financial statements. The Group has adopted a format for the balance sheet which presents current and noncurrent assets and current and non-current liabilities as separate classifications, as required by paragraphs 60 and following of IAS 1 (Revised). The income statement is presented by nature, a format which is considered more representative than a presentation by function. The selected format is in agreement with the presentation used by the Group’s major competitors and in line with international practice. 46. The cash flow statement has been prepared using the indirect method as permitted by IAS 7. The statement of changes in equity has been prepared in accordance with IAS 1 (Revised). The formats adopted for the financial statements are the same as those used to prepare the. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. annual consolidated financial statements at December 31, 2013..

(48) Half-yearly financial report at June 30, 2014. Basis of preparation. The Half-yearly report at June 30, 2014 has been prepared on a historical cost basis, with the exception of those items which under IFRS must be or can be measured at fair value, as discussed in further detail in the accounting policies. The consolidation principles, the accounting principles, the accounting policies and the methods of measurement used in the preparation of the Half-yearly report are consistent with those used to prepare the annual consolidated financial statements at December 31, 47. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 2013..

(49) Half-yearly financial report at June 30, 2014. Changes in international accounting standards. The accounting principles adopted in the first half of 2014 are the same as those used in the prior year, with the exception of those discussed below in the paragraph “Accounting principles, amendments and interpretations applied by the Group from the current year”. A summary is provided in the following paragraph “Accounting principles, amendments and interpretations not yet adopted by the European Union” of the changes that will be adopted in future periods, stating the expected effects on the A2A Group’s Half-yearly report to the extent this is possible.. Accounting principles, amendments and interpretations applied by the Group from the current year A series of amendments introduced by international accounting standards and interpretations have been applied from January 1, 2014, none of which however has led to a significant effect on the Group’s financial statements. The main changes are described in the following: • IFRS 10 “Consolidated Financial Statements” was issued by the IASB on May 12, 2011 and is applicable from January 1, 2014. The new principle supplements the requirements of IAS 27 “Consolidated and Separate Financial Statements”, in which control is defined as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities, clarifying that an investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and when at the same time it has the ability to affect those returns through its power over the investee. An investor controls an investee if and only if the investor has all of the following: 1. the power to direct the relevant activities of the investee; 2. the exposure to future returns from the investee; 3. the ability to use its power over an investee to affect the investor’s returns. The power to direct activities that significantly affect the results of the subsidiary (relevant activities) may more easily be exercised through voting rights (including potential voting rights), but also through contractual arrangements. When control is exercised through. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 48.

(50) Half-yearly financial report at June 30, 2014 Changes in international accounting standards. voting rights, relevant activities are represented by operating activities (development, purchasing and product sales) and financial management activities (obtaining and negotiating loans, acquisitions and sales of financial assets). Future returns also include dividends and payment for services provided by the parent for the subsidiary’s activities. The third condition for establishing whether control exists regards the interaction between the first two conditions. In particular, in certain circumstances an entity may have an interest in a group of the subsidiary’s assets and liabilities as part of a legal or contractual condition. IFRS 10 establishes that to determine the existence of control, this group of assets and liabilities can only be considered a separate entity if it is economically separate from the entity as a whole, and is therefore a subsidiary for the purposes of the consolidated financial statements. Following the introduction of this standard, revised versions of IAS 27 “Separate Financial Statements”, which remains the main reference standard for separate financial statements, and IAS 28 “Investments in Associates and Joint Ventures” were issued. The interpretation SIC 12 “Consolidation - Special Purpose Entities” has been superseded;. 49. • IFRS 11 “Joint Arrangements” was issued by the IASB on May 12, 2011 and is effective from January 1, 2014. This standard establishes that in a joint arrangement two or more parties have joint control and decisions regarding relevant activities require the unanimous consent of the parties. IFRS 11 identifies two different types of joint arrangement: 1. joint operations; 2. joint ventures. The two types differ in the rights and obligations of each party to the joint arrangement. In a joint operation, the parties have rights to the assets and obligations for the liabilities net assets of the arrangement. IFRS 11 requires an entity to fully recognize the assets, liabilities, revenues and expenses relating to a joint operation on the basis of its interest, while it should account for a joint venture using the equity method, as required by IAS 28 “Investments in Associates and Joint Ventures”. Joint operations are recognized in the same way in both the separate and consolidated financial statements, with an entity recognizing the assets, liabilities, revenues and expenses on the basis of its interest; joint ventures and investments in subsidiaries and associates on the other hand may be recognized in the separate financial statements either at cost or on the basis of IFRS 9 “Financial Instruments” (and IAS 39 “Financial Instruments: Recognition and Measurement”), as also specified in IAS 27 “Separate Financial Statements”. As regards disclosures for the purpose of completeness, reference should be made to the new IFRS 12 “Disclosures of Interests in Other Entities”.. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. of the arrangement, whereas in a joint venture the parties have rights linked to the.

(51) Half-yearly financial report at June 30, 2014 Changes in international accounting standards. • IFRS 12 “Disclosure of Interests in Other Entities” was issued by the IASB on May 12, 2011 and is applicable from January 1, 2014. This standard establishes the minimum disclosure requirements, combining them with those established by other standards, that entities must provide about all types of interests, including those in a subsidiary, a joint arrangement, an associate, a special-purpose entity or an unconsolidated vehicle; • IAS 27 (Revised) “Separated Financial Statements” was issued by the IASB on May 12, 2011 and is applicable from January 1, 2014; a revised version of IAS 27 was issued at the same time as IFRS 10 “Consolidated Financial Statements” was introduced, which retains its role as the general standard of reference for separate financial statements. This standard applies to the measurement of investments in subsidiaries, associates and joint ventures in the separate financial statements of the parent. Joint ventures, as is also the case for investments in subsidiaries and associates, may be recognized in the separate financial statements either at cost or on the basis of IFRS 9 “Financial Instruments” (and IAS 39 “Financial Instruments: Recognition and Measurement”). When, in accordance with IFRS 10 “Consolidated Financial Statements”, a parent elects not to prepare consolidated financial statements, in its separate financial statements it must disclose information about its investments in subsidiaries, associates and joint ventures, their principal places of business (and their registered offices if different), their activities, the ownership interest in each individual investee and a description of the method used to account for the investment; • IAS 28 (Revised) “Investments in Associates and Joint Ventures” was issued by the IASB on May 12, 2011 and is applicable from January 1, 2014; a revised version of IAS 28 was issued at the same time as IFRS 10 “Consolidated Financial Statements” was introduced, whose scope is to prescribe the accounting for investments in associates and joint ventures. An entity that exercises joint control or has significant influence over another entity must account for its investment using the equity method; • IAS 32 “Financial Instruments: Presentation” was issued by the IASB on December 16, 2011 and is applicable retrospectively for annual periods beginning on or after January 1, 2014. This amendment clarifies the application of certain criteria for offsetting the financial assets and liabilities included in IAS 32; • IAS 36 “Impairment of Assets”: the amendments to IAS 36, which are applicable from January 1, 2014, were issued on May 29, 2013 and regard the disclosures required on recognizing impairment losses when the recoverable amount of impaired assets is based on fair value less costs of disposal. The amendments remove the requirement to disclose the recoverable amount of assets when the cash generating unit (CGU) includes goodwill or intangible assets with indefinite useful lives but the asset is not impaired. In addition, disclosures are required of the recoverable amount of an asset or CGU and the way in which fair value less costs of disposal has been calculated when an impairment loss has been recognized for the asset;. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 50.

(52) Half-yearly financial report at June 30, 2014 Changes in international accounting standards. • IAS 39 “Financial Instruments: Recognition and Measurement”: the amendments to this standard, issued on June 27, 2013, regard the accounting for derivatives which have been designated as hedging instruments if there is novation of the counterparty. Before the introduction of these amendments, in these circumstances IAS 39 required an interruption to cash flow hedge accounting on the assumption that the novation led to the conclusion and extinguishment of the pre-existing hedging instrument. These amendments are applicable retrospectively from January 1, 2014; •. IFRS 10, IFRS 12 and IAS 27: the amendments to these standards, issued in October 2012, regard the exclusion from the consolidation scope of the majority of companies controlled by funds or similar bodies, requiring that these be measured at “fair value through profit or loss”. The amendments also regard IFRS 12 on the question of disclosures made by investment companies;. • IFRIC 21 “Levies”: this interpretation of IAS 37 “Provisions, Contingent Liabilities and Contingent Assets” was issued on May 20, 2013 and regards the accounting for levies imposed by governments which do not fall within the scope of IAS 12 “Income Taxes”. IAS 37 “Provisions, Contingent Liabilities and Contingent Assets” sets out criteria for the. 51. recognition of a liability, one of which is the requirement for the entity to have a present obligation as a result of a past event (known as an obligating event). The interpretation clarifies that the obligating event that gives rise to a liability to pay a levy is the activity described in the legislation that triggers the payment of the levy. The interpretation is applicable from January 1, 2014.. The following standards, amendments and interpretations have not been applied, since at the present time the competent bodies of the European Union have still to complete their adoption process. • IFRS 11 “Joint Arrangements”: issued by the IASB in May 2014, the amendment to this standard provides guidance on how to account for the acquisition of an interest in a joint operation that is a business as defined by IFRS 3 “Business Combinations”. The amendment is applicable from January 1, 2016; • IAS 16 “Property, Plant and Equipment” and IAS 38 “Intangible Assets”: the amendment to these two standards, issued by the IASB in May 2014, clarifies that the use of revenuebased methods to calculate the depreciation of a tangible asset or the amortization of an intangible asset is not appropriate because revenue generated by an activity that includes the use of an asset generally reflects factors other than the consumption of the economic benefits embodied in the asset;. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. Accounting principles, amendments and interpretations not yet adopted by the European Union.

(53) Half-yearly financial report at June 30, 2014 Changes in international accounting standards. • IFRS 14 “Regulatory Deferral Accounts”; the new standard, issued by the IASB in January 2014, permits an entity which is a first-time adopter of IAS/IFRS to continue to account for “regulatory deferral account balances” in accordance with its previous accounting standards. The standard is applicable from January 1, 2016; • IFRS 15 “Revenue from Contracts with Customers”: the scope of the new standard, issued by the IASB on May 28, 2014, is to establish the principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a contract with a customer. A contract with a customer falls within the scope of the standard if all the following conditions are met: i. the contract has been approved by the parties to the contract, who have undertaken to carry out their respective obligations; ii. each party’s rights in relation to the goods and services to be transferred can be identified and the payment terms have been identified; iii. the contract has commercial substance (the risks, the timing or the cash flows may change as the result of the contract); iv. it is probable that the consideration to which the entity is entitled to in exchange for the goods or services will be collected. The new standard, which will replace IAS 18 “Revenues” and IAS 11 “Construction Contracts”, is applicable from January 1, 2017; • IFRS 9 “Financial Instruments”: this standard represents the first of a three-stage process whose scope is to fully replace IAS 39 “Financial Instruments: Recognition and Measurement” and introduces new criteria for classifying and measuring financial assets and liabilities. The main changes introduced by IFRS 9 may be summarized as follows: financial assets are classified into two categories alone - “at fair value” or “at amortized cost”. As a result, the categories “loans and receivables”, “availablefor-sale financial assets” and “held-to-maturity investments” disappear. Classification within the two categories is carried out on the basis of an entity’s business model and the contractual cash flow characteristics of the financial asset. A financial asset is measured at amortized cost if both of the following requirements are met: the objective of the entity’s business model is to hold assets to collect contractual cash flows (and therefore in substance not to earn trading profits) and the characteristics of the cash flows of the asset are solely payments of principal and interest. A financial asset is measured at fair value if it is not measured at amortized cost. The rules for accounting for embedded derivatives have been simplified: separate accounting for the embedded derivative and the financial asset “hosting” it is no longer required. All equity instruments - listed or unlisted - must be measured at fair value (IAS 39 established on the other hand that unlisted equity instruments should be valued at cost if fair value could not be reliably measured).. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 52.

(54) Half-yearly financial report at June 30, 2014 Changes in international accounting standards. An entity has the option of presenting changes in the fair value of equity instruments that are not held for trading in equity; that option is not permitted for equity instruments that are held for trading. This designation is permitted on initial recognition, may be adopted for each individual instrument and is irrevocable. If an election is made for this option, changes in the fair value of these instruments may never be reclassified from equity to profit or loss. Dividends on the other hand continue to be recognized in profit or loss. IFRS 9 does not permit reclassifications between the two categories of financial asset except in the rare case of a change in an entity’s business model. In this case the effects of the reclassification are applied prospectively. The disclosures required to be made in the notes have been adjusted to the classification and measurements rules introduced by IFRS 9. On November 19, 2013 the IASB issued an amendment to this standard which mainly regards the following: i. bringing into effect a substantial overhaul of hedge accounting that will allow entities to better reflect their risk management activities in the financial statements; ii. enabling entities to change the accounting of liabilities measure at fair value: in. 53. particular the effects of a worsening of an entity’s own credit risk will no longer be recognized in profit or loss; iii. deferring the effective date of the standard, originally January 1, 2015. A new date has not yet been set. • IAS 19 Revised “Employee Benefits”: the amendments to this standard, issued by the IASB on November 21, 2013, regard contributions from employees or third parties to defined benefit plans. The objective of the amendments is to simplify the accounting for contributions that are independent of the number of years of employee service (for example employee contributions that are calculated according to a fixed percentage of. On December 16, 2013 the IASB issued a series of amendments to certain accounting standards which may be summarized as follows: a) IFRS 2 “Share-based Payment”: the amendment clarifies the definition of “vesting condition” by separately defining a “performance condition” and a “service condition”; b) IFRS 3 “Business Combinations”: the amendment clarifies that the obligation to pay consideration in a business combination that meets the classification requirements for a financial instrument is classified in the financial statements as a financial liability on the basis of IAS 32 “Financial Instruments: Presentation”. The amendment also clarifies that the standard is not applicable to the joint ventures and joint arrangements regulated by IFRS 11 “Joint Arrangements”; c) IFRS 8 “Operating Segments”: the standard is amended in terms of the disclosures required when different operating segments having similar economic characteristics are aggregated;. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. salary). The amendments are effective from July 1, 2014..

(55) Half-yearly financial report at June 30, 2014 Changes in international accounting standards. d) IFRS 13 “Fair Value Measurements”: the amendment clarifies that the exemption permitting an entity to measure the fair value of financial assets and liabilities on a net basis is applicable to all contracts, regardless of whether they meet the definition of financial assets or financial liabilities; e) IAS 16 “Property, Plant and Machinery” and IAS 38 “Intangible Assets”: both standards are amended to clarify how recoverable amounts and useful lives are treated when an entity carries out a revaluation; f) IAS 24 “Related Party Disclosures”: the standard is amended in order to include an entity providing key management personnel services as a related party; g) IAS 40 “Investment Property”: the amendment to the standard regards the interrelationship between IFRS 3 “Business Combinations” and IAS 40 “Investment Property” when the acquisition of a property can be identified as a business combination.. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 54.

(56) Half-yearly financial report at June 30, 2014. Scope of consolidation. The Half-yearly report of the A2A Group at June 30, 2014 includes the figures of the parent A2A S.p.A. and those of the subsidiaries over which A2A S.p.A. exercises either direct or indirect control, even when the holding is less than 50%. In addition, companies in which the parent exercises joint control with other entities (joint ventures) and those over which it has a significant influence are consolidated using the equity method.. WorldReginfo - 0daf29ab-413f-4362-ba83-772e55779eff. 55.