HALF-YEARLY FINANCIAL REPORT AT JUNE 30, 2011

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(1)www.a2a.eu WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. HALF-YEARLY FINANCIAL REPORT AT JUNE 30, 2011. HALF-YEARLY FINANCIAL REPORT AT JUNE 30, 2011.

(2) Half-yearly financial report at June 30, 2011. Contents. 0.1 Performance indicators and corporate information 5. The A2A Group at June 30, 2011. 6. Financial Highlights. 8. A2A S.p.A. on the Stock Exchange. 11. Corporate bodies. 13. Significant events during the period. 17. Summary of results, assets and liabilities and financial position of the A2A. 1. Group 25. Significant events after June 30, 2011. 28. Consolidated balance sheet. 30. Consolidated income statement. 32. Consolidated statement of comprehensive income. 33. Consolidated cash flow statement. 34. Consolidated statement of changes in equity. 36. Consolidated balance sheet pursuant to Consob Resolution no. 17221 of March 12, 2010. 38. Consolidated income statement pursuant to Consob Resolution no. 17221 of March 12, 2010. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 0.2 Condensed half-year consolidated financial statements.

(3) Half-yearly financial report at June 30, 2011 Contents. 0.2.1 Notes to the condensed half-year consolidated financial statements General information on A2A S.p.A.. 42. Half-year financial report. 43. Financial statements. 44. Basis of preparation. 45. Changes in international accounting standards. 52. Scope of consolidation. 53. Consolidation policies and procedures. 59. Seasonal nature of the business. 60. A2A Group – Areas of activity. 61. Geographical areas of activity. 62. Results sector by sector. 64. Notes to the balance sheet. 83. Net debt. 84. Notes to the income statement. 92. Earnings per share. 93. Note on related party transactions. 97. Consob Communication no. DEM/6064293 of July 28, 2006. 98. Guarantees and commitments with third parties. 100. Other information. 0.2.2 Attachments to the condensed half-year consolidated financial statements 122. 1. Statement of changes in tangible assets. 124. 2. Statement of changes in intangible assets. 126. 3. List of companies included in the consolidated financial statements. 128. 4. List of shareholdings in companies carried at equity. 130. 5. List of companies included in the consolidated financial statements of the Ecodeco Group. 132. 6. List of companies included in the consolidated financial statements of the Coriance Group. 134. 7. List of financial assets available for sale. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 2. 41.

(4) Half-yearly financial report at June 30, 2011 Contents. 0.3 Interim report on operations 137. Results sector by sector. 139. Macroeconomic scenario. 141. Performance of the energy market. 144. Energy Sector. 155. Heat and Services Sector. 158. Environment Sector. 162. Networks Sector. 173. Other Services and Corporate Sector. 175. Outlook for operations. 176. Human resources and industrial relations. 177. Corporate Social Responsibility. 180. Innovation, development and research. 185. Risks and uncertainties. 0.4 Certification of the condensed half-year financial statements pursuant to article 154-bis paragraph 5 of Legislative Decree no. 58/98 207. 3. Certification of the condensed half-year financial statements pursuant to. This is a translation of the Italian original “Relazione finanziaria semestrale al 30 giugno 2011” 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 - 95610f11-bd12-4cf5-85e8-3e62fd74a682. article 154-bis paragraph 5 of Legislative Decree no. 58/98.

(5) WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 0.1. Performance indicators and corporate information.

(6) Half-yearly financial report at June 30, 2011. The A2A Group at June 30, 2011 A2A Spa. Delmi (3). 100.00%. 100.00%. 100.00%. 100.00%. 100.00%. 100.00%. 100.00%. A2A Trading. A2A Energia. A2A Calore & Servizi. Amsa. A2A Reti Elettriche. A2A Reti Gas. Selene. 50.00%. 70.00%. 33.33%. 98.08%. 100.00%. 100.00%. 100.00%. 100.00%. Transalpina di Energia. A2A Alfa. Lumenergia. A2A Coriance. Ecodeco. A2A Ciclo Idrico. A2A Servizi alla distribuzione. A2A Logistica. 61.28% Edison (1). 50.00%. 100.00%. 100.00%. 99.97%. 99.98%. 91.60%. 100.00%. Premiumgas. A2A Montenegro. Coriance. Aprica. BAS-SII. Retragas. Mincio Trasmissione. 90.00%. 20.00%. 70.00%. 43.70%. Edipower. Plurigas. EPCG. Varese Risorse (4). 100.00%. 94.95%. 39.49%. 60.00%. 100.00%. Aspem Energia. Abruzzoenergia. Rudnik Uglja ad Pljevlja. Proaris. Partenope Ambiente. 50.00% Ergosud. 50.00%. Asm Novara (3). 80.00%. 67.00%. 74.50%. 49.00%. Montichiari ambiente. Seasm. Camuna Energia. e-Utile. 48.86%. 21.94%. 90.00% Aspem (4). ASVT (2). ACSM-AGAM. 5. 7.9% Dolomiti Energia. 50.00% Metamer. Areas of activity Energy Heat and services Environment. (1) The 61.28% refers to the ordinary shares held in Transalpina di Energia (TdE). The actual stake in share capital is 60%. Note that Edison holds 50% of shares in Edipower. (2) 0.38% of these are held through A2A Reti Gas. (3) There are call and put options on a further stake in the company's share capital. (4) There are put options on a futher stake in the company's share capital.. Networks Other companies. This table shows the A2A Group's most significant shareholdings. You are referred to attachments 3, 4, 5, 6 and 7 for full details of all shareholdings.. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 51.00%.

(7) Half-yearly financial report at June 30, 2011. Financial Highlights (1). Gross operating income Net income. Income statement 6. Millions of euro. 3,050 million euro 477 million euro 120 million euro 01 01 2011 06 30 2011. 01 01 2010 06 30 2010. Revenues. 3,050. 2,858. Operating expenses. (2,286). (2,130). Labour costs. (287). (258). Gross operating income. 477. 470. Depreciation, amortization, provisions and write-downs. (254). (238). Net operating income. 223. 232. Financial balance. (80). (56). Other non-operating income Other non-operating expenses. 1 (5). – –. Income before tax. 139. Income taxes. (74). (68). 39. 282. Net result from non-current assets sold or held for sale Minorities interests Net income for the period pertaining to the Group Gross operating income/revenues. (1) The figures serve as performance indicators required by CESRN/05/178/B. 16. 176. (19). 120. 371. 15.6%. 16.4%. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. Revenues.

(8) Half-yearly financial report at June 30, 2011 Financial highlights. Balance sheet figures. 06 30 2011. 12 31 2010. Millions of euro Net capital employed. 8,402. 8,738. Total equity attributable to the Group and minorities. 4,644. 4,845. Consolidated net financial position. (3,758). (3,893). Consolidated net financial position/Equity attributable to the Group and minorities. 0.81. 0.80. Consolidated net financial position/Market cup. 1.06. 1.03. Financial data. 01 01 2011 06 30 2011. 01 01 2010 06 30 2010. Net cash from operating activities. 398. 398. Net cash used in investing activities. (63). 218. Free cash flow. 335. 616. 06 30 2011. 12 31 2010. Millions of euro. Key figures of A2A S.p.A. 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. Key indicators. 06 30 2011. 06 30 2010. 1.530%. o.974%. 111.13. 78.40. Average 6-month Euribor Average price of Brent crude (USD/bbl) Average exchange rate €/USD (*). 1.40. 1.33. Average price of Brent crude (euro/bbl). 79.11. 59.15. (*) Source: Italian Foreign Exchange Office. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 7.

(9) Half-yearly financial report at June 30, 2011. A2A S.p.A. on the Stock Exchange. A2A in figures 3,365. Avarege capitalization in the first half 2011 (millions of euro). 3,552. Average volumes in the first half 2011. 10,338,669. Average price in the first half 2011 (*). 1.134. Maximum price in the first half 2011 (*). 1.231. Minimum price in the first half 2011 (*). 1.001. Number of shares. 3,132,905,277. (*) euro per share Source: Bloomberg,. In June 23, 2011 A2A distributed a dividend equal to 0.06 euro per share. In November 24, 2011 will be distributed an additional non-recurring dividend equal to 0.036 euro per share.. A2A forms part of the following indices FTSE MIB DJ STOXX DJ EUROSTOXX DJ Italy WisdomTree S&P Developed Ex-US. Ethical indices FTSE4GOOD Global e Europe FTSE ECPI Benchmark Axia Csr e Ethical ECPI Ethical Index Global, Euro e EMU Solactive Climate Change Source: Bloomberg. A2A ranked as a leading business in the Carbon Disclosure Project 2010.. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 8. Capitalization at June 30, 2011 (millions of euro).

(10) Half-yearly financial report at June 30, 2011 A2A S.p.A. on the Stock Exchange. Shareholders (*). Municipality of Milan 27.5%. Market 37.5%. 9 Carlo Tassara 2.5% Alpiq Holding AG 5%. Municipality of Brescia 27.5%. (*) Quota greater than 2% (updated at June 30, 2011). Sources: CONSOB. Rating Current. Short-time rating Outlook. Moody’s Sources: rating agencies. Medium/long-term rating Outlook. BBB+ A–2 Negative A3 Negative. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. Medium/long-term rating Standard & Poor’s.

(11) Half-yearly financial report at June 30, 2011 A2A S.p.A. on the Stock Exchange. A2A in the first half of 2011 1.3. 1.1. Volumes. €/Share. 1.2. 1 0.9 0.8 jan -11. feb -11. ma. ap. r-1 1. r-1 1. Volumes. jun -11. Price. A2A vs FTSE MIB 1.40 1.30 1.20. FTSE MIB Index. A2A (€/Share). 1.10 1.00 0.90 0.80 jan-11. Source: Bloomberg. feb-11. mar-11. apr-11. may-11. jun-11. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 10. ma y-1 1.

(12) Half-yearly financial report at June 30, 2011. Corporate bodies. SUPERVISORY BOARD CHAIRMAN Graziano Tarantini DEPUTY CHAIRMAN Rosario Bifulco. MANAGEMENT BOARD CHAIRMAN Giuliano Zuccoli DEPUTY CHAIRMAN Vittorio Cinquini DIRECTORS Franco Baiguera Mario Cocchi Francesco Randazzo Renato Ravanelli Paolo Rossetti Giuseppe Sala. 11. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. DIRECTORS Adriano Bandera Gianbattista Brivio Bruno Caparini Gianni Castelli Alberto Cavalli Stefano Grassani Enrico Mattinzoli Marco Miccinesi Massimo Perona Norberto Rosini Giorgio Maria Filiberto Sommariva Franco Tamburini Antonio Matteo Taormina.

(13) Half-yearly financial report at June 30, 2011 Corporate bodies. GENERAL MANAGERS CORPORATE AND MARKET AREA Renato Ravanelli TECHNICAL-OPERATIONS AREA Paolo Rossetti. INDEPENDENT AUDITORS PRICEWATERHOUSECOOPERS S.P.A.. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 12.

(14) Half-yearly financial report at June 30, 2011. Significant events during the period. A single sales company for the A2A Group since January ASMEA S.p.A., Bas-Omniservizi S.r.l. and A2A Servizi al Cliente S.r.l. merged into A2A Energia S.p.A. on January 1, 2011. The single sales company arising from this operation concentrates on the sale of electricity and gas and the related commercial services (call centers, desks and billing). More specifically, a leading operator on the national energy market has been created which. 13. has around 2 million customers (large-scale industry, apartment blocks and domestic customers) concentrated mostly in the Milan metropolitan area and the provinces of Brescia and Bergamo. This represents a further step in the process of rationalizing the Group and rendering it more efficient, a step which is designed to make it even more competitive on the liberalized markets. Lombardy customers will be able to continue to be able to put their trust in quality services Group as certified by the excellent results obtained in customer satisfaction surveys and in the special league tables regularly prepared by the Electricity and Gas Authority.. A2A Ciclo Idrico S.p.A. comes to life on January 1, 2011 The contribution of the “water cycle” segment by the parent A2A S.p.A. and the demerger of the “ownership of the end customers of the water business of the province of Brescia” segment by A2A Energia S.p.A. (formerly Asm Energia e Ambiente S.r.l.) into A2A Ciclo Idrico S.p.A. became effective on January 1, 2011. More specifically, this company carries out the following activities, which are listed by way of example:. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. that are close to them locally, a factor which up until now has been a “winning card” for the.

(15) Half-yearly financial report at June 30, 2011 Significant events during the period. • research, production, procurement, capitation, transfer and transportation, conversion, distribution and sale of water for primary, industrial and agricultural use; • collection and treatment of waste water; • use and recovery of energy from the integral water cycle; • management, maintenance and development of the water and sewage networks and of the plants for the capitation, potabilisation and purification of water.. A2A as one of the leaders in Italy for the Carbon Disclosure Project A2A was classified as one of the Italian “2010 Carbon Performance Leaders” by the Carbon Disclosure Project, the body acting on behalf of over 500 institutional investors and which for more than 10 years has been providing an analysis of the means by which the largest companies in the world counter greenhouse gas emissions.. A new Managing Director for Ecodeco S.r.l., a company of the A2A Group On March 11, 2011, the Board of Directors of Ecodeco S.r.l., one of the companies in the Environment Sector of the A2A Group, appointed Mr. Enrico Friz as Managing Director of the company. The intention of renewing the subsidiary’s top management is to consolidate the company’s development process as part of the Environment Sector of the A2A Group, with the aim of optimizing organizational and process synergies and strengthening the offer of environmental services.. Communication of A2A S.p.A., Delmi S.p.A. and EDF S.A. in respect of the shareholders’ agreement regarding Edison S.p.A. and Transalpina di Energia S.r.l. (TdE) On March 15, 2011, as part of the discussions relating to a new industrial project concerning the Edison Group and the structure of TdE’s shareholdings, A2A S.p.A., Delmi S.p.A. and EDF S.A. reached agreement as to a change in the shareholders’ pacts regarding Edison S.p.A. and Transalpina di Energia S.r.l., which provides for an extension to September 15, 2011 of the deadline for any possible termination of such pacts. If no termination notice is sent by any of the parties by September 15, the agreements will be renewed for the following three years. This amendment also provides for the appointment of the boards of directors of Edison S.p.A. and Transalpina di Energia S.r.l. for a period of one year by the shareholders’ meetings approving the respective annual financial statements.. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 14.

(16) Half-yearly financial report at June 30, 2011 Significant events during the period. The Supervisory Board of A2A S.p.A. has approved the 2010 results On April 27, 2011, with Mr. Graziano Tarantini in the chair, the Supervisory Board met and approved the separate financial statements and consolidated annual financial report of the A2A Group for the year ended December 31, 2010. The Supervisory Board agreed with the proposal of the Management Board to submit to the approval of the shareholders’ meeting the distribution of a dividend of 0.060 euro per ordinary share, to be put into payment on June 23, 2011. The Supervisory Board additionally agreed with the proposal of the Management Board to submit to the approval of the shareholders’ meeting the distribution of an additional dividend of 0.036 euro per ordinary share, to be put into payment on November 24, 2011.. Ecodeco S.r.l. is awarded a contract in Britain for the design and construction of a new waste treatment plant 3SE, a consortium set up by the British companies Shanks Waste Management and Scottish. 15. and Southern Energy, has chosen Ecodeco technology to build a waste treatment plant located in Yorkshire. In greater detail, the A2A Group company Ecodeco S.r.l. will be the supplier of the project and the technology, and will additionally build the plant which will treat the waste of the cities of Barnsley, Doncaster and Rotherham. The value of these supplies exceeds 26 million euro and it is also envisaged that Ecodeco will be paid royalties on the concession for the next 25 years based on each tonne of waste treated. differentiated collection and will serve around 350,000 families. At the end of the treatment process a secondary fuel will be obtained which will be used in a multifuel plant for producing electricity. Glass, plastic and metals will be recovered by building a section for the production of compost. The agreement provides that the work for the construction of the plant will begin by the Spring of 2013 and that the first waste will be treated in 2015.. A total of 23.5% of the share capital of Metroweb S.p.A has been sold to Fondo Infrastrutturale F2i and IMI Investimenti On May 30, 2011 A2A S.p.A. together with Stirling Square Capital Partners, the majority shareholder of Metroweb S.p.A., signed an agreement for the sale of their shareholdings in. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. The plant will be used to treat 250,000 tonnes/year of residual solid urban waste from the.

(17) Half-yearly financial report at June 30, 2011 Significant events during the period. Metroweb S.p.A. (respectively 23.5% and 76.5%) to Fondo Infrastrutturale F2i and IMI Investimenti. This transaction will lead to proceeds of 53 million euro for A2A S.p.A. and a capital gain of 38 million euro. A2A S.p.A. will continue to hold a convertible bond in its portfolio which if the option is exercised will enable it to acquire a shareholding in Metroweb S.p.A. of approximately 25%, linked to a put option valid until November 30, 2013 under the same conditions of the present transaction increased by a financial return.. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 16.

(18) Half-yearly financial report at June 30, 2011. Summary of results, assets and liabilities and financial position of the A2A Group. Results The results of the A2A Group for the period ended June 30, 2011 are set out below together with comparative figures for the first half of the previous year:. Revenues. 01 01 2011 06 30 2011. 01 01 2010 06 30 2010. Changes. 3,050. 2,858. 192. 2,996. 2,815. 181. 54. 43. 11. of which: – Revenues from sales of goods and services – Other operating income Operating expenses Labour costs. 17. (2,286). (2,130). (156). (287). (258). (29). Gross operating income. 477. 470. 7. Depreciation and amortization. (213). (196). (17). Provisions and write-downs. (41). (42). 1. Net operating income. 223. 232. (9). Net financial expense. (67). (106). 39. Share of results of companies at equity. (13). 50. (63). Other non-operating income Other non-operating expenses. 1. –. 1. (5). –. (5). Income before tax. 139. 176. (37). Income taxes. (74). (68). (6). Income from current operations, net of tax. 65. 108. (43). Net result from non-current assets sold or held for sale. 39. 282. (243). Minority interests Net income for the period pertaining to the Group. 16 120. (19). 35. 371. (251). Note: the Montenegro subsidiary EPCG has been consolidated on a line-by-line basis for the period ended June 30, 2011; in the first half of 2010 it was consolidated on a one-line basis.. The Group earned revenues totaling 3,050 million euro in the first half of 2011, of which 139 million euro relates to the EPCG Group. Revenues from sales and services amounted to 2,996 million euro (of which 138 million euro attributable to the EPCG Group), while other operating income totaled 54 million euro.. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. Millions of euro.

(19) Half-yearly financial report at June 30, 2011 Summary of results, assets and liabilities and financial position of the A2A Group. The main quantitative data contributing to the formation of these revenues were as follows: 06 30 2011. 06 30 2010. Electricity sold to wholesale and retail customers (GWh). 11,204. 9,687. Electricity sold on the Power Exchange (GWh). 6,636. 7,852. Electricity sold on foreign markets (GWh). 6,289. 3,354. Electricity sold (GWh) - EPCG. 2,301. –. Gas sold to wholesale and retail customers (Mcm). 2,049. 2,362. Heat sold (GWht). 1,676. 1,753. Electricity distributed (GWh). 5,756. 5,618. Electricity distributed (GWh) - EPCG. 1,272. –. Gas distributed (Mcm). 1,155. 1,292. 33. 34. Water distributed (Mcm) Purified water (Mcm) Waste disposed of (Kton). 19. 19. 1,335. 1,398. In particular, sales mainly derived from the following quantities produced by the plants managed by the Group:. Thermoelectric production (GWh) Thermoelectric production (GWh) - EPCG Hydroelectric production (GWh) Hydroelectric production (GWh) - EPCG Heat production (GWht). 06 30 2011. 06 30 2010. 4,040. 4,260. 672. –. 1,640. 1,869. 907. –. 1,398. 1,474. Electricity produced by cogeneration (GWh). 370. 342. Electricity produced by waste to energy and biogas plants (GWh). 631. 606. Gross operating income for the period of 477 million euro rose by 7 million euro over the same period of the previous year. Excluding the contribution made by the Montenegro EPCG Group, gross operating income amounted to 462 million euro, representing a slight decrease compared to the first half of 2010.. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 18.

(20) Half-yearly financial report at June 30, 2011 Summary of results, assets and liabilities and financial position of the A2A Group. The following table sets out changes in gross operating income by business area. Millions of euro. Gross Operating Income 06 30 2011. Gross Operating Income 06 30 2010. Energy Sector. 163. 191. -electricity. 113. 162. -gas. 50. 29. Heat and Services Sector. 48. 39. Environment Sector. 152. 141. Networks Sector. 128. 117. Other Services and Corporate Sector Total. (14) 477. (18) 470. The Energy Sector saw a decrease in gross operating income compared to the first half of 2010: the reduction in margins in the electricity area was only partially offset by the rise in margins in the gas area. 19. The fall in profitability in the electricity area is essentially due to the decrease in hydroelectric production, which was affected by the reduced hydraulicity at the Calabria hydroelectric plants, the decision of the San Filippo del Mela power station in Sicily to leave the boundary regulated by the tolling agreement with Edipower and the fact that the Monfalcone thermoelectric power station no longer has the essentiality prerequisites. In the boundary in question there was also a considerable reduction in the utilization factors of the combined cycle power stations, compensated in terms of overall profitability by an improvement in unit margins. The margins for commercial activity also fell in comparison with. Finally, the Montenegro subsidiary EPCG had a positive margin of 13 million euro. In the gas area, the fall in quantities sold as the result of the mild weather of the first few months of the year and the economic effect of the reduction in the regulated tariffs of the protected market were more than offset by the positive effects of the renegotiation of the gas procurement agreements at the beginning of the fourth quarter of 2010. The gross operating income of the Heat and Services Sector amounted to 48 million euro, a rise of 9 million euro over the first six months of 2010. This result is mainly due to new connections to the district heating service, which more than offset the fall in volumes sold as the result of the mild temperatures experienced in the first quarter of the year, as well as the recognition of energy efficiency allowances (White Certificates) relating to initiatives taken in previous years on the Brescia district heating networks.. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. the first half of 2010..

(21) Half-yearly financial report at June 30, 2011 Summary of results, assets and liabilities and financial position of the A2A Group. The gross operating income of the Environment Sector amounted to 152 million euro (141 million euro in the first six months of 2010). This positive performance is mainly due to the increased contribution provided by the Brescia, Bergamo and Milan waste to energy plants, which in the second quarter of 2010 underwent a stoppage for planned maintenance, and the increased revenues from the sale of electricity. The Networks Sector increased its operating results in the first half of 2011, achieving gross operating income of 128 million euro (+11 million euro). The improvement in margins is mainly due to the electricity distribution area as the result of the adjustment of the revenue component relating to the company specific equalization for the III regulatory period (2008-2011), not recognized in the first half of 2010, and the reduced costs deriving from other equalization mechanisms (in particular the measurement service revenues equalization mechanism). In addition, electricity distribution in Montenegro provided a positive contribution of 4 million euro to the sector. Depreciation, amortization and write-downs amounted in total to 254 million euro (238 million euro for the six months ended June 30, 2010). The increase of 16 million euro includes an increase of 28 million euro arising from the line-by-line consolidation of the investee EPCG and a decrease of 8 million euro resulting from a reduction in the accruals made to the provision for bad and doubtful debts regarding activities in Italy. As a result of these changes net operating income amounted to 223 million euro, a decrease of 9 million euro over the six months ended June 30, 2010. Financial expense, net amounted to 67 million euro (106 million euro for the six months ended June 30, 2010). This decrease is due to the positive change in the fair value of financial derivative contracts hedging interest rate risk and the significant fall in average debt (-458 million euro compared to the first half of 2010), effects which were partially offset by the rise in the average cost of debt as the result of changes in market rates. The share of results of companies accounted for at equity amounted to a loss of 13 million euro (a profit of 50 million euro for the six months ended June 30, 2010). The investment in Transalpina di Energia had a significantly negative effect on the period of 30 million euro, compared to a positive result of 29 million euro in the six months ended June 30, 2010. It should also be recalled that the investee EPCG made a positive contribution of 14 million euro in the first half of 2010 when the investment was consolidated on a one-line basis.. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 20.

(22) Half-yearly financial report at June 30, 2011 Summary of results, assets and liabilities and financial position of the A2A Group. Other non-operating expenses totaled 4 million euro in the six months ended June 30, 2011 (nil for the six months ended June 30, 2010) and relate to costs incurred as the result of the consolidation of the EPCG Group. Income taxes amounted to 74 million euro (68 million euro for the six months ended June 30, 2010). Net income from non-current assets sold or held for sale totaled 39 million euro (282 million euro for the six months ended June 30, 2010) and mainly consists of the gain arising on the sale of the investments in Metroweb S.p.A. and CESI, while in the first half of 2010 this item mainly consisted of the gain arising on the sale of the investment in Alpiq Holding AG. After deducting the net income attributable to non-controlling interests (of which 14 million euro is attributable to the minority sharholders of Delmi), the net income attributable to the Group for the period amounted to 120 million euro (371 million euro for the six months ended June 30, 2010).. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 21.

(23) Half-yearly financial report at June 30, 2011 Summary of results, assets and liabilities and financial position of the A2A Group. Balance sheet and financial position Consolidated net “Capital employed” amounted to 8,402 million euro at June 30, 2011 and is covered by equity for 4,644 million euro (of which 1,319 million euro attributable to noncontrolling interests) and by net debt for 3,758 million euro. In particular “Working capital” of 527 million euro has decreased by 236 million euro compared to December 31, 2010. “Net fixed capital” (which also includes “Assets/liabilities held for sale”) amounted to 7,875 million euro (-100 million euro). The “Net financial position” at June 30, 2011 of 3,758 million euro improved by 135 million euro over that at December 31, 2010 thanks to the generation of cash from operations.. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 22.

(24) Half-yearly financial report at June 30, 2011 Summary of results, assets and liabilities and financial position of the A2A Group. Millions of euro. o6 30 2011. 12 31 2010. Changes. CAPITAL EMPLOYED Net fixed capital. 7,856. 7,911. (55). Tangible assets. 4,765. 4,872. (107). Intangible assets Investments and other non-current financial assets (*) Other non-current assets/liabilities (*). 1,561. 1,552. 9. 2,443. 2,423. 20. (124). (137). 13. (54). (63). 9. Provisions for risks, charges and liabilities for landfills. (459). (460). 1. Employee benefits. (276). (276). –. of which with counter-entry to equity. (106). (118). Working capital. 527. 763. (236). Inventories. 235. 239. (4). Deferred tax assets/liabilities. Trade receivables and other current assets (*). 2,089. 2,416. (327). Trade payables and other current liabilities (*). (1,811). (1,854). 43. 14. (38). 52. (114). 3. Current tax assets/tax liabilities of which with counter-entry to equity. Assets/liabilities held for sale (*). 19. 64. (45). 8,402. 8,738. (336). 4,644. 4,845. (201). 3,652. 3,635. 23. of which with counter-entry to equity TOTAL CAPITAL EMPLOYED. SOURCES OF FUNDS. Total financial position beyond one year Total financial position within one year Total net financial position of which with counter-entry to equity TOTAL SOURCES (*) Excluding balances included in the net financial position.. 17. 106. 258. (152). 3,758. 3,893. (135). (33) 8,402. (41) 8,738. (336). WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. Equity.

(25) Half-yearly financial report at June 30, 2011 Summary of results, assets and liabilities and financial position of the A2A Group. Millions of euro. NET FINANCIAL POSITION AT THE BEGINNING OF THE PERIOD. 01 01 2011 06 30 2011 (3,893). 01 01 2010 06 30 2010 (4,644). Net income for the period (including minorities) (**). 66. 174. Depreciation and amortization. 213. 196. 3. 17. Results from companies at equity. 13. (50). Changes in assets and liabilities (*). 103. 61. Net cash flows from operating activities. 398. 398. Net cash flows from investing activities. (63). 218. Write-downs/disposals of tangible and intangible assets. Free cash flow. 335. 616. Dividends paid by the parent company. (186). (217). Dividends paid by subsidiaries Cash flows from the distribution of dividends Changes in financial assets/liabilities with counter-entry to equity NET FINANCIAL POSITION AT THE END OF THE PERIOD. (6). (28). (192). (245). (8) (3,758). 15 (4,258). (*) Excluding balances with counter-entry to equity. (**) The result for the period is stated excluding gains on the disposal of investments.. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 24.

(26) Half-yearly financial report at June 30, 2011. Significant events after June 30, 2011. Acerra waste to energy plant: production capacity reaches 100% in the first six months of 2011 The Acerra waste to energy plant treated 300 thousand tonnes of refuse in the first six months of 2011, fully in line with the requirements of the Integrated Environmental Authorisation which envisages a quantity of treatable waste of 600 thousand tonnes/year. At the same time the plant produced and put 260 GWh of electricity into the grid. The reported figures, which refer to the first half of the second year in which Partenope Ambiente S.p.A. has been responsible for the industrial management of the waste to energy. 25. plant, therefore represent an improvement over the already excellent results achieved in 2010, when a total of 516 thousand tonnes of waste were transferred to the plant (being 86% of its production capacity) and 450 GWh of electricity was put into the grid, equivalent to the needs of 150 thousand households. The waste to energy plant worked regularly during the first six months of 2011, succeeding in maintaining the planned high standards of yield also by means of the maintenance which had been scheduled by Partenope Ambiente S.p.A. at the beginning of the year and which, in addition to being absolutely usual in complex set-ups such as waste to energy plants, has the Particular emphasis has been placed on environmental aspects: the waste to energy plant is equipped with leading edge combustion gas purification technologies and a double “continuous monitoring” system for controlling emissions which provides a constant guarantee that the plant is working as it should. Emissions have been well below the limits envisaged by the Authorisation since the start of plant management, limits which moreover for the Acerra waste to energy plant are fixed at values which are on the average 50% lower than those envisaged by the community directive and the Italian legislation transposing it. In addition to all of the measurements made by Partenope Ambiente S.p.A. on a daily basis, two outside certified laboratories were engaged in 2010 to carry out five emission monitoring campaigns, and a further two were performed during the first part of 2011. The data collected have confirmed the full reliability of the plant and the efficiency of the fume treatment system, with results well below the emission limits set by the Integrated Environmental Authorisation.. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. scope of ensuring safety and efficiency..

(27) Half-yearly financial report at June 30, 2011 Significant events after June 30, 2011. A2A and the Confederations of Small and Medium Enterprises sign a protocol of understanding on the Joint Settlement Procedure A2A, Casartigiani, CNA, Confagricoltura, Confapi, Confartigianato Imprese, Confcommercio Imprese per l’Italia and Confesercenti have signed an important joint settlement agreement, putting into practice the desire expressed in this respect by the AEEG - the Electricity and Gas Authority. This procedure acts as an out of court tool for resolving certain types of dispute which have not been resolved by previous complaint procedures, which relate to the supply of electricity and gas on both the protected and free markets and which arise between business customers belonging to the Confederations and A2A Energia S.p.A., the single sales company of the A2A Group. A distinguishing feature of the procedure is its swiftness and informality and the ease by which it may be accessed and carried out. The settlement procedure may be activated for disputes relating to assessments, contestations and the management of problems arising from the supply of electricity or gas, such as: the reconstruction of usage following the ascertained malfunctioning of a meter pursuant to the resolutions of the Electricity and Gas Authority; contestations relating to issues connected with the billing of usage; dealing with a reduction in power or suspension of supply for disputed payment arrears by the customer; the de-activation of a meter at the customer’s request which has not been carried out; and the management of problems connected with the issuing of bills. Working in the Settlement Office are qualified operators from A2A and the Confederations who have attended specific training courses, a necessary requirement for the qualification to be recognised. Staff involved in managing the settlements are required to act in an impartial and neutral manner to encourage a compromise being reached which is acceptable to both parties. Any measures being taken by A2A Energia S.p.A. to collect the receivable under dispute are suspended for the whole period of the settlement process. The introduction of the procedure at a national level will be preceded by a trial period of 12 months, at the end of which A2A and the Confederations will be entitled to check its effectiveness and agree any changes which may be needed. The aim of the agreement, which has already been tested on similar occasions, is to improve the relationship between Small and Medium Enterprises and energy suppliers under the customer satisfaction principle.. A2A S.p.A.: the acquisition of 5.05% of the share capital of Abruzzoenergia S.p.A. On July 27, 2011 A2A S.p.A. purchased the remaining 5.05% of the share capital of Abruzzoenergia S.p.A. which was held by minority shareholders. As a result of this transaction A2A S.p.A. is now the owner of 100% of the company’s share capital.. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 26.

(28) 0.2. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. Condensed half-year consolidated financial statements.

(29) Half-yearly financial report at June 30, 2011. Consolidated balance sheet (1). Assets Millions of euro. Note. 06 30 2011. 12 31 2010. 06 30 2010. Tangible assets. 1. 4,765. 4,872. 4,071. Intangible assets. 2. 1,561. 1,552. 1,479. Shareholdings carried at equity. 3. 2,401. 2,411. 3,124. Other non-current financial assets. 3. 69. 40. 47. Deferred tax assets. 4. 426. 430. 423. Other non-current assets. 5. 120. 113. 145. 9,342. 9,418. 9,289. NON-CURRENT ASSETS. Total non-current assets CURRENT ASSETS Inventories. 6. 235. 239. 210. Trade receivables. 7. 1,717. 2,141. 1,709. Other current assets. 8. 372. 275. 379. Current financial assets. 9. 80. 56. 6. Current tax assets. 10. 25. 18. 95. Cash and cash equivalents. 11. 130. 132. 72. 2,559. 2,861. 2,471. 39. 82. 36. 11,940. 12,361. 11,796. Total current assets NON-CURRENT ASSETS HELD FOR SALE TOTAL ASSETS (1). 12. As laid down in Consob Resolution 17221 of March 12, 2010 the effects of related party transactions in the consolidated financial statements are shown in the tables in section 0.2 with comments in Note 40. The effects of the significant non-recurring events and transactions are reported in Note 41 of the consolidated financial statements as required by Consob Communication DEM/6064293 of July 28, 2006.. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 28.

(30) Half-yearly financial report at June 30, 2011 Consolidated balance sheet. Equity and liabilities. Millions of euro. Note. 06 30 2011. 12 31 2010. 06 30 2010. Share capital. 13. 1,629. 1,629. 1,629. (Treasury shares). 14. (61). (61). (61). Reserves. 15. 1,637. 1,625. 1,575. Net profit for the year. 16. –. 308. –. Net profit for the period. 16. 120. –. 371. 3,325. 3,501. 3,514. EQUITY. Equity pertaining to the Group Minority interests. 17. Total Equity. 1,319. 1,344. 894. 4,644. 4,845. 4,408. 29. LIABILITIES. Non-current financial liabilities. 18. 3,767. 3,736. 3,759. Deferred tax liabilities. 19. 480. 493. 471. Employee benefits. 20. 276. 276. 269. Provisions for risks, charges and liabilities for landfills. 21. 459. 460. 427. Other non-current liabilities. 22. 156. 177. 199. 5,138. 5,142. 5,125. 23. 1,221. 1,450. 1,026. Other current liabilities. 23. 590. 404. 550. Current financial liabilities. 24. 318. 448. 669. Tax liabilities. 25. Total non-current liabilities Current liabilities Trade payables. 11. 56. 9. Total current liabilities. 2,140. 2,358. 2,254. Total liabilities. 7,278. 7,500. 7,379. 18. 16. 9. 11,940. 12,361. 11,796. LIABILITIES DIRECTLY ASSOCIATED WITH NON-CURRENT ASSETS HELD FOR SALE TOTAL EQUITY AND LIABILITIES. 26. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. Non-current liabilities.

(31) Half-yearly financial report at June 30, 2011. Consolidated income statement (1-2). Millions of euro. Note. 01 01 2011 06 30 2011. 01 01 2010 06 30 2010. 01 01 2010 12 31 2010. 2,996. 2,815. 5,923. 54. 43. 118. 3,050. 2,858. 6,041. 2,133. 1,988. 4,129. 153. 142. 318 4,447. Revenues Revenues from the sale of goods and services Other operating income Total revenues. 28. Operating expenses Expenses for raw material and services Other operating expenses Total operating expenses. 29. 2,286. 2,130. Labour costs. 30. 287. 258. 554. Gross operating income - EBITDA. 31. 477. 470. 1,040. Depreciation, amortization, provisions, and write-downs. 32. 254. 238. 542. Net operating income - EBITDA. 33. 223. 232. 498. Financial balance Financial income. 18. 7. 58. Financial expenses. 85. 113. 190. Portion of income and charges when shareholdings are carried at equity Total financial balance. 34. (13). 50. (231). (80). (56). (363). Other non-operating income. 35. 1. –. –. Other non-operating expenses. 35. (5). –. (1). Profit before tax (1). 139. 176. 134. As laid down in Consob Resolution 17221 of March 12, 2010 the effects of related party transactions in the consolidated financial statements are shown in the tables in section 0.2 with comments in Note 40. The effects of the significant non-recurring events and transactions are reported in Note 41 of the consolidated financial statements as required by Consob Communication DEM/6064293 of July 28, 2006.. (2). The comparative figures for January-June 2010 for income statement items relating to revenues and operating expenses, depreciation and amortization and financial management have been reclassified to reflect the application of IFRS 5.. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 30.

(32) Half-yearly financial report at June 30, 2011 Consolidated income statement. Millions of euro. Note. 01 01 2011 06 30 2011. 01 01 2010 06 30 2010. 01 01 2010 12 31 2010. Income taxes. 36. 74. 68. 158. 65. 108. (24). Profit of current operations net of tax Net result from non-current assets held for sale. 39. 282. 220. Net profit. 104. 390. 196. Minorities. 16. (19). 112. 120. 371. 308. Group net profit (loss) for the year/period. 37. 38. 31. – basic. 0.0386. 0.1194. 0.0993. – basic, from operating activities. 0.0260. 0.0296. 0.0286. – diluted. 0.0386. 0.1194. 0.0993. – diluted, from operating activities. 0.0260. 0.0296. 0.0286. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. Earnings per share (in euro):.

(33) Half-yearly financial report at June 30, 2011. Consolidated statement of comprehensive income. Millions of euro Net income/(loss) for the period/year (A) Effective portion of gains/(losses) on cash flow hedges. 06 30 2010. 12 31 2010. 104. 390. 196. (4). 20. 34. Gains/(losses) on the re-measurement of financial assets available for sale. –. (316). (316). Tax effect of other gains/(losses). 1. (40). (45). (3). (336). (327). Other gains/(losses) of companies valued at equity net of the tax effect ( C ). 10. (1). 21. Total gain/(loss) (A) + (B) + ( C ). 111. 53. (110). 108. 52. (8). 3. 1. (102). Total other gains/(losses) net of the tax effect of companies consolidated on a line-by-line basis (B). Total gain/(loss) attributable to : Shareholders of the parent company Minority interests. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 32. 06 30 2011.

(34) Half-yearly financial report at June 30, 2011. Consolidated cash flow statement. Millions of euro. 12 31 2010. 06 30 2010. 132. 25. 25. –. 95. –. 132. 120. 25. Net income for the period/year (**). 66. (26). 174. Depreciation of tangible assets. 172. 342. 155. 41. 85. 41. 3. 23. 17. 13. 231. (50). CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD/YEAR. 06 30 2011. EPCG cash brought in CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD/YEAR Operating activities. Amortization of intangible assets Tangible and intangible asset write-downs/disposals Result from investments carried at equity Write-down/disposal of investments. –. 5. –. Change in assets and liabilities (*). 103. 183. 61. Cash flows from operating activities. 398. 843. 398. Investments in tangible assets. (67). (247). (103). Investments in intangible assets and goodwill. (51). (85). (38). Investments in shareholdings and securities (*). (5). (14). Disposal of fixed assets and shareholdings. 56. 347. 307. 4. 59. 58. 33. Investing activities. Cash flows from investment activities. (63). 60. 218. FREE CASH FLOW. 335. 903. 616. (38). (94). (65). Change in financial liabilities (*). (107). (552). (259). Dividends paid by the parent company. (186). (217). (217). (6). (28). (28). (337). (891). (569). Financing activities Change in financial assets (*). Dividends paid by subsidiaries Cash flows from financing activities CHANGE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD/YEAR. (2) 130. (*) Excluding balances with counter-entry to equity and other balance sheet items. (**) The result for the period/year is stated net of gains from the disposal of investments.. 12. 47. 132. 72. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. Dividends received from investments carried at equity and other investments. (6).

(35) Half-yearly financial report at June 30, 2011. Consolidated statement of changes in equity. Description Millions of euro. Share capital. Note 13 Equity at December 31, 2009. 1,629. Treasury Cash Flow shares Hedge reserve. Note 14 (61). Note 15 (3). Changes in the first half of 2010 Allocation of 2009 net income Distribution of dividends IAS 32 and IAS 39 reserves (*). 12. Put option on Delmi S.p.A. shares Put option on Aspem Group shares Other changes Group and minorities net profit for the period Equity at June 30, 2010. 1,629. (61). 9. Changes in the second half of 2010 IAS 32 and IAS 39 reserves (*). 22. Put option on Delmi S.p.A. shares Put option on Aspem Group shares Put option on Varese Risorse S.p.A. shares Put option on Abruzzo Energia S.p.A. shares Consolidation of EPCG Group Other changes Group and minorities net profit for the period Equity at December 31, 2010. 1,629. (61). 31. Changes in the first half of 2011 Allocation of 2010 net income Distribution of dividends IAS 32 and IAS 39 reserves (*). 4. Put option on Delmi S.p.A. shares Other changes Dividends resolved but not yet distributed Group and minorities net profit for the period Equity at June 30, 2011 (*) These are included in the statement of comprehensive income. 1,629. (61). 35. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 34.

(36) Half-yearly financial report at June 30, 2011 Consolidated statement of changes in equity. Result from availablefor-sale financial assets Note 15. Other resrves and retained earnings. Group net income for the period/year. Note 15. Note 16. 350. 1,695. 80. 3,690. (338) 3. 5. 3 1. 1. (4). 1. 371. 3,514. 894. 4,408. 22. 9. 22. 3 3. 308. (63) 3,501. 31 22. (1). (1). 1. 1. (1). 2. 572. 575. 2. 2. (132) 1,344. (195) 4,845. (308). (186). (186) 4. 6. (6) 3. 6. (8). (8). (112). (112) 120. 120. 120. 3,325. 35. (337). 390. 3. 1,602. 1. (245). 19. (63). –. (28). 371. 3. 308. 4,595. 371. 22. 1,594. 905. 3. 5. –. Note 17. (217). (350). 1,566. Total net equity. (80). (217). –. Minority interests. (192) 7 6. (6). (14) (112). (16) 1,319. 104 4,644. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 80. Total Group net equity.

(37) Half-yearly financial report at June 30, 2011. Consolidated balance sheet pursuant to Consob resolution 17221 of March 12, 2010. Assets. Millions of euro. 06 30 2011. of wich Related Parties (note n. 40). 12 31 2010. of wich Related Parties (note n. 40). 06 30 2010. of wich Related Parties (note n. 40). NON-CURRENTS ASSETS Tangible assets. 4,872. Intangible assets. 1,561. Shareholdings carried at equity. 2,401. 2,401. 69. 5. Other non-current financial assets Deferred tax assets Other non-current assets Total non-current assets. 4,071. 1,552. 426. 1,479. 2,411. 2,411. 40. 6. 430. 3,124. 3,124. 47. 7. 423. 120. 113. 145. 9,342. 9,418. 9,289. 235. 239. 210. CURRENT ASSETS Inventories Trade receivables. 1,717. Other current assets. 372. Current financial assets. 80. Current tax assets. 25. Cash and cash equivalents Total current assets NON-CURRENT ASSETS HELD FOR SALE TOTAL ASSETS. 175. 2,141. 120. 275 10. 56 18. 1,709. 124. 379 9. 6. 5. 95. 130. 132. 72. 2,559. 2,861. 2,471. 39. 82. 36. 11,940. 12,361. 11,796. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 36. 4,765.

(38) Half-yearly financial report at June 30, 2011 Consolidated balance sheet pursuant to Consob Resolution no. 17221 of March 12, 2010. Equity and liabilities. Millions of euro. 06 30 2011. of wich Related Parties (note n. 40). 12 31 2010. of wich Related Parties (note n. 40). 06 30 2010. of wich Related Parties (note n. 40). EQUITY Share capital (Treasury shares) Reserves Net profit for the year. 1,629. 1,629. 1,629. (61). (61). (61). 1,637. 1,625. 1,575. –. 308. –. 120. –. 371. 3,325. 3,501. 3,514. 1,319. 1,344. 894. 4,644. 4,845. 4,408. 3,767. 3,736. 3,759. Deferred tax liabilities. 480. 493. 471. Employee benefits. 276. 276. 269. Provisions for risks, charges and liabilities for landfills. 459. 460. 427. Other non-current liabilities. 156. 177. 199. 5,138. 5,142. 5,125. Net profit for the period Equity pertaining to the Group Minority interests Total equity. 37. LIABILITIES. Non-current financial liabilities. Total non-current liabilities Current liabilities Trade payables. 1,221. 80. 1,450. 26. 1,026. Other current liabilities. 590. 17. 404. 16. 550. Current financial liabilities. 318. 2. 448. 3. 669. Tax liabiliities. 11. 56. 9. Total current liabilities. 2,140. 2,358. 2,254. Total liabilities. 7,278. 7,500. 7,379. LIABILITIES DIRECTLY ASSOCIATED WITH NON-CURRENT ASSETS HELD FOR SALE TOTAL EQUITY AND LIABILITIES. 18. 16. 9. 11,940. 12,361. 11,796. 19. 4. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. Non-current liabilities.

(39) Half-yearly financial report at June 30, 2011. Consolidated income statement (1) pursuant to Consob Resolution no. 17221 of March 12, 2010. Millions of euro. 01 01 2011 06 30 2011. of wich Related Parties (note n. 40). 2,996. 365. 54. 1. 01 01 2010 of wich 06 30 2010 Related (1) Parties (nota n. 40). 01 01 2010 12 31 2010. of wich Related Parties (note n. 40). 5,923. 268. 118. 1. Revenues Revenues from the sales of goods and services Other operating income Total revenues. 129. 43. 1. 2,858. 6,041. Operating expenses Expenses for raw materials and services Other operating expenses Total operating expenses. 2,133. 173. 153. 70. 2,286. 1,988. 12. 142. 1. 2,130 3. 4,129. 27. 318. 2. 4,447. Labour costs. 287. 258. 554. Gross operating income - EBITDA. 477. 470. 1,040. Depreciation, amortization, provisions and write-downs. 254. 238. 542. Net operating income - EBIT. 223. 232. 498. Financial balance Financial income. 18. Financial expenses. 85. Portion of income and charges when shareholdings are caried at equity. (13). Total financial balance Other non-operating income Other non-operating expenses Profit before tax (1). 3. 7 113. (13). 50. (80). (56). 1. –. (5) 139. 3. – 176. 58. 5. 190 50. (231). (231). (363) – (1) 134. The comparative figures for January-June 2010 for income statement items relating to revenues and operating expenses, depreciation and amortization and financial management have been reclassified to reflect the application of IFRS 5.. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 38. 3,050. 2,815.

(40) Half-yearly financial report at June 30, 2011 Consolidated income statement pursuant to Consob Resolution no. 17221 of March 12, 2010. Millions of euro. 01 01 2011 06 30 2011. Income taxes. 74. 68. 158. Income from current operations net of tax. 65. 108. (24). 01 01 2010 06 30 2010. of wich Related Parties (note n. 40). 01 01 2010 12 31 2010. 39. 282. 220. Net profit. 104. 390. 196. Minorities. 16. (19). 112. 120. 371. 308. Group net profit(loss) for the year/ period. of wich Related Parties (note n. 40). 39. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. Net result from non-current assets held for sale. of wich Related Parties (note n. 40).

(41) 0.2.1 Notes to the condensed half-year consolidated. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. financial statements.

(42) Half-yearly financial report at June 30, 2011. General information on A2A S.p.A.. 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, especially following the acquisitions in France and Montenegro which took place in recent years. The A2A Group mainly operates in the following sectors: • the production, sale and distribution of electricity; • the sale and distribution of gas;. 41. • the production, sale and distribution 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, including making these available for other operators;. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. • integrated water cycle management..

(43) Half-yearly financial report at June 30, 2011. Half-year financial report. The half-year financial report (hereafter the “half-year report”) at June 30, 2011 of the A2A Group is presented in millions of euro; this is also the currency of the economies in which the Group operates. The half-year report of the A2A Group at June 30, 2011 has been prepared: • in compliance with Legislative Decree no. 58/1998 (art. 154-ter) and subsequent amendments, and with the Issuers’ Regulations published by Consob; • in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standard Board (IASB) and approved by the European Union. In preparing the half-year report the Group adopted the same principles used in the preparation of the annual financial report at December 31, 2010, other than the principles and interpretations described in detail in the paragraph below “Changes in accounting principles” adopted for the first time on January 1, 2011. This half-year report at June 30, 2011, which has been subject to a review by the auditors, was approved by the Management Board on August 3, 2011 which authorized publication. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 42.

(44) Half-yearly financial report at June 30, 2011. Financial statements. The half-year report includes a statement of financial position, an income statement, a cash flow statement and a statement of changes in equity in order to facilitate an understanding of the economic performance of the Group for the first six months of 2011 and its financial position at the end of the period. The Group has adopted a format for the statement of financial position which presents current and non-current assets and current and non-current liabilities as separate classifications, as required by paragraphs 60 and following of IAS 1 (Revised).. 43. 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 is line with international practice. The results of ordinary operations are shown in the income statement separately from income or expense deriving from transactions that are non-recurring in the business's ordinary operations, such as gains or losses on the sale of investments and other nonrecurring income or expense; this makes it easier to measure the effective performance of the. 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 annual consolidated financial statements at December 31, 2010.. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. Group’s ordinary operating activities..

(45) Half-yearly financial report at June 30, 2011. Basis of preparation. The half-year financial report at June 30, 2011 has been prepared on a historical cost basis, with the exception of those items which under IFRS must or can be measured at fair value. The consolidation principles, the accounting principles, the accounting policies and the methods of measurement used in the preparation of the half-year report are consistent with those used to prepare the annual consolidated financial statements at December 31, 2010, to which reference should be made for completeness.. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 44.

(46) Half-yearly financial report at June 30, 2011. Changes in international accounting standards. The accounting standards adopted for the first half of 2011 are the same as those used in the prior year, with the exception of the changes discussed in the paragraph below “Accounting standards, amendments and interpretations approved by the European Union and taking effect from the current period and applied where appropriate”. In the paragraph below “Accounting standards, amendments and interpretations still to be approved by the European Union” a summary is provided of the changes which will be adopted in future periods, indicating to the extent possible the estimated effects on the halfyear report of the A2A Group.. 45. Accounting standards, amendments and interpretations approved by the European Union and taking effect from the current period with the estimated effects for the Group Certain changes to international accounting standards and their interpretations became applicable on January 1, 2011, none of which led to any significant effects for the Group. The main changes were as follows: from January 1, 2011, this amends the definition of a related party and adds to the minimum information to be provided. The current principle requires additional information on relationships, transactions and balances with related parties, including commitments, to be provided in the consolidated and separate financial statements of a parent, a joint venturer or an investor, and that this be disclosed in accordance with IAS 27 “Consolidated and Separate Financial Statements”. The current principle is also applicable to separate financial statements. • IFRS 3 “Business Combinations”: applicable prospectively from July 1, 2010, the amendment requires that the option to measure non-controlling interests at either fair value or at the proportionate share of the net assets of the acquired company at the acquisition date should only include non-controlling interests entitling the owner to a portion of net assets on liquidation. All other non-controlling interests must be measured at their fair value at the date of acquisition unless another IFRS requires a different measurement method to be used. This change additionally clarifies that the requirement. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. • IAS 24 (Revised) “Related Party Disclosures”: approved on July 19, 2010 and applicable.

(47) Half-yearly financial report at June 30, 2011 Changes in international accounting standards. to measure quotaholdings or shareholdings of the acquirer which replace the share-based payments of the acquiree in accordance with IFRS 2 at the acquisition date (market based measure) must also include the share-based payments of the acquiree which are not replaced. • IFRS 7 “Financial Instruments: Disclosures”: from January 1, 2011, emphasis is given to the disclosures of a qualitative and quantitative nature required by the standard regarding the nature and extent of the risks implicit in financial instruments. This approach should assist the users of the financial statements to link the information that is presented and obtain a general description as to the nature and extent of the risks resulting from financial instruments. Finally, the requirement to provide disclosures concerning financial assets which have expired but have been renegotiated or written down and that relating to the fair value of collateral have been eliminated. An amendment was made to this standard in October 2010 concerning the transfer of financial assets. This amendment will allow users of financial statements to improve their understanding of transfers of financial assets (for example securitizations), including an understanding of the possible effects of any risks that may remain with the entity that transferred the assets. In particular, this amendment requires a qualitative description to be given of the nature of the link between the assets transferred and the associated liabilities together with a table setting out the fair value of the assets transferred and the associated liabilities. Further, additional disclosures concerning the amount of the cash flows that would be required in the case of a future repurchase of the transferred assets must be provided. The amendment also requires additional disclosures to be provided regarding any quantitatively significant transfers carried out at year end. The amendment is applicable from July 1, 2011. • IAS 1 “Presentation of Financial Statements”: the amendment is applicable from January 1, 2011 and establishes that an entity may present the analysis relating to other comprehensive income either in the statement of changes in equity or in the notes to the financial statements. Early application of the amendment is permitted. • IAS 34 “Interim Financial Reporting”: from January 1, 2011 the disclosures relating to significant events reported in interim financial statements must include an update of the significant events discussed in the annual financial statements, with specific reference to financial instruments and their fair value.. Accounting standards, amendments and interpretations approved by the European Union and taking effect from the current period with no effects for the Group The following standards and interpretations already approved by the European Union and published in the European Union will become applicable over the next few years:. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 46.

(48) Half-yearly financial report at June 30, 2011 Changes in international accounting standards. • IFRS 1 “First-time Adoption of International Financial Reporting Standards”: the amendment is applicable from January 1, 2011 and clarifies that if an entity makes changes to its accounting manual or the use of the exemptions permitted by IFRS following the publication of interim financial statements in accordance with IAS 34, but before the first financial statements prepared in accordance with International Financial Reporting Standards are published, it must motivate these changes and update the reconciliation between its previous accounting standards and IFRSs. The requirements of IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” are not applicable in these circumstances. Early application of the amendment is permitted. • IFRIC 13 “Customer Loyalty Programmes”: the amendment, applicable from January 1, 2011, establishes that an entity may estimate the fair value of award credits by referring to the fair value of the awards with which these credits can be redeemed.. Accounting standards, amendments and interpretations still to be approved by the European Union 47. The following standards and interpretations have not been applied as at the present time the competent bodies of the European Union have still to complete their approval process. • IFRS 10 “Consolidated Financial Statements”, published by the IASB on May 12, 2011, is applicable from January 1, 2013. IFRS 10 establishes the criteria for the presentation and preparation of consolidated financial statements and emphasizes the concept of control, regardless of the nature of the investment held by the entity preparing the consolidated financial statements. Control exists if and only if the investor has all of the following simultaneously: 2. exposure or rights to variable returns from its involvement with the investee; 3. the ability to use its power over the investee to affect the amount of the investor’s returns. The power to influence the activities which significantly affect the investee’s returns (relevant activities) is most generally exercised through voting rights (including potential voting rights) but also on the basis of contractual agreements. In the case of control by virtue of voting rights, the relevant activities are represented by operating activities (development, purchase and sale of products) and by activities connected with financial management (obtaining and negotiating loans, the acquisition and disposal of financial assets). Variable returns include amongst other things dividends, remuneration linked to the supply of services by the parent to the activities of the subsidiary and benefits of a fiscal nature.. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 1. power to influence and direct the relevant activities of the investee;.

(49) Half-yearly financial report at June 30, 2011 Changes in international accounting standards. The third condition in assessing whether there is control considers the interaction between the first two. In certain circumstances an entity may have an interest in a particular sets of assets and liabilities of the investee on the basis of a legal or contractual restriction. IFRS 10 establishes that for the purpose of determining whether control exists, this set of assets and liabilities may be considered a separate entity only if it is economically separate from the entity as a whole and hence a subsidiary for the purpose of the consolidated financial statements. At the same time as this standard was published a revised version was also published of IAS 27 “Separate Financial Statements”, which maintains its role as the general reference standard on the subject of separate financial statements, and IAS 28 “Investments in Associates and Joint Ventures”; in addition, the interpretation SIC 12 “Consolidation - Special Purpose Entities” has been superseded. Early application of the standard in question is permitted. • IFRS 11 “Joint Arrangements”, published by the IASB on May 12, 2011, is applicable from January 1, 2013. This standard establishes that a joint arrangement is an arrangement of which two or more parties have joint control and that joint control only exists when the decisions about the relevant activities require the unanimous consent of the parties sharing control. IFRS 11 identifies two separate types of joint arrangements: 1. joint operations; 2. joint ventures. The two types differ on the basis of the rights and obligations which arise for the parties to a joint arrangement; in a joint operation the parties have rights regarding the assets and obligations regarding the liabilities of the joint arrangement, while in a joint venture the parties have rights to the net assets of the arrangement. IFRS 11 establishes that the assets, liabilities, revenue and expenses of a joint operation should be recognized by the parties on the basis of their interest, while on the other hand joint ventures should be recognized by the parties using the equity method, as required by IAS 28 “Investments in Associates and Joint Ventures”, with the only exclusion being the possibility to select proportionate consolidation (previously permitted by IAS 31 “Interests in Joint Venture”, superseded by the introduction of IAS 28 (Revised)). Joint operations are recognized in the same way in both the separate and consolidated financial statements by recognizing assets, liabilities, revenue and expenses on the basis of the percentage interest, while joint ventures, as well as 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”), as required by IAS 27 “Separate Financial Statements”. For details of the disclosures to be provided in the notes to the financial statements reference should be made to the requirements of the new IFRS 12 “Disclosure of Interests in Other Entities”. Early application of the standard is permitted.. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 48.

(50) Half-yearly financial report at June 30, 2011 Changes in international accounting standards. • IFRS 12 “Disclosures of Interests in Other Entities”, issued by the IASB on May 12, 2011, is applicable from January 1, 2013; this standard establishes the minimum disclosures that an entity must provide, integrating these with those already determined by other standards, to assist users of the financial statements when assessing the nature and risks associated with the interests held by the entity in subsidiaries, associates and joint arrangements (as defined in IFRS 11). In particular, an entity must provide information concerning the assumptions it has made in determining the existence or otherwise of control, including joint control, and the significant influence exercised over another entity. Early application of the standard is permitted. • IFRS 13 “Fair Value Measurement”, issued by the IASB on May 12, 2011, is applicable from January 1, 2013. IFRS 13 defines fair value, provides guidance on measuring fair value and introduces the disclosures to be provided about how it has been measured. The standard does not establish when measurement at fair value is required but explains the way in which fair value is calculated when its use is required by other standards. The new standard is applicable to all transactions, of a financial and non-financial nature, with the exception of transactions recognized on the basis of IFRS 2 “Share-based Payment”, leasing transactions within the scope of IAS 17 “Leases” and transactions recognized on. 49. the basis of net realizable value such as in IAS 2 “Inventories” or value in use such as in IAS 36 “Impairment of Assets”. The standard defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. If transactions are directly observable in a market, the calculation of fair value may be relatively easy, but if this is not the case then a valuation technique is used. The standard describes three different valuation techniques to be used to calculate fair value, represented by the “market approach”, a technique that uses prices and other relevant information generated by market transactions involving identical or comparable discounting cash inflows and cash outflows, and the “cost approach”, a technique that requires an entity to calculate the amount that would be required currently to replace the service capacity of an asset. In terms of the disclosures to be provided in the financial statements, IFRS 13 extends the three-level hierarchy of fair value already required by IFRS 7 “Financial Instruments: Disclosures”, where the levels depend on the inputs used in the valuation technique, to all of the assets and liabilities forming part of its scope. The information provided by certain disclosures may vary on the basis of whether the fair value measurement has been made on a recurring or non-recurring basis; recurring fair value measurements are those that other IFRSs require or permit at the end of each reporting period, while non-recurring fair value measurements are those that other IFRSs require or permit in particular circumstances. Early application of the standard is permitted. • IAS 27 (Revised) “Separate Financial Statements”, issued by the IASB on May 12, 2011, is. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. (i.e. similar) assets and liabilities, the “income approach”, a technique that consists in.

(51) Half-yearly financial report at June 30, 2011 Changes in international accounting standards. applicable from January 1, 2013; at the same time as IFRS 10 “Consolidated Financial Statements” was published a revised version was also published of this standard which maintains its role as the general reference standard on the subject of 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 and 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”). If in accordance with IFRS 10 “Consolidated Financial Statements” a parent company decides not to prepare consolidated financial statements, it must provide disclosures in its separate financial statements about its investments in subsidiaries, associates and joint ventures, their principal places of business (and country of incorporation if different), its proportion of the ownership interest held in each individual investee and a description of the method used to account for the investments. Early application of the standard is permitted but only if an entity applies it in conjunction with IFRS 10 “Consolidated Financial Statements”, IFRS 11 “Joint Arrangements”, IFRS 12 “Disclosure of Interests in Other Entities” and IAS 28 (as amended in 2011). • IAS 28 (Revised) “Investments in Associates and Joint Ventures”, issued by the IASB on May 12, 2011, is applicable from January 1, 2013; at the same time as IFRS 10 “Consolidated Financial Statements” was published a revised version was also published of this standard, which has the purpose of establishing the criteria for accounting for investments in associates and joint ventures. An entity with joint control of, or significant influence over, an investee must account for its investment using the equity method. Early application of the standard is permitted but only if an entity applies it in conjunction with IFRS 10 “Consolidated Financial Statements”, IFRS 11 “Joint Arrangements”, IFRS 12 “Disclosure of Interests in Other Entities” and IAS 27 (as amended in 2011). • IAS 1 “Presentation of Financial Statements”; this amendment applicable from January 1, 2012, relates to the presentation of the figures included in the statement of comprehensive income. In particular, it keeps the option of presenting the income statement and the statement of other comprehensive income in either a single statement or in two separate statements with one following directly after the other. In addition an entity must group together in the statement of comprehensive income the items which will be reclassified to profit and loss in subsequent periods: amounts may be presented either net of the related tax effects or before the related tax effects. Early application of the amendment is permitted. • IAS 19 “Employee Benefits”, applicable from January 1, 2013; the changes made in the amendment may be grouped into three main categories: (i) recognition and presentation in the financial statements;. WorldReginfo - 95610f11-bd12-4cf5-85e8-3e62fd74a682. 50.