2012 March 31, 2012 Interim Report on operations

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(1)WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 2012 Interim Report on operations March 31, 2012.

(2) Interim report on operations – March 31, 2012. Contents. 0.1 Performance indicators and corporate information 5. The A2A Group at March 31, 2012. 6. Financial Highlights. 8. A2A S.p.A. on the Stock Exchange. 11. Corporate Boards. 13. Significant events during the period. 16. Summary of results, assets and liabilities and financial position of the A2A. 1. Group 23. Significant events after March 31, 2012. 26. Consolidated balance sheet. 28. Consolidated income statement. 30. Consolidated statement of comprehensive income. 31. Consolidated cash flow statement. 32. Consolidated statement of changes in equity. 0.3 Notes to the Interim report on operations 35. General information on A2A S.p.A.. 36. Interim report on operations. 37. Financial statements. 38. Basis of preparation. 39. Changes in international accounting standards. 46. Scope of consolidation. 47. Consolidation policies and procedures. 53. Seasonal nature of the business. 54. A2A Group – Areas of activity. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 0.2 Consolidated financial statements.

(3) Interim report on operations – March 31, 2012 Contents. 55. Geographical areas of activity. 56. Results sector by sector. 58. Notes to the balance sheet. 74. Net debt. 75. Notes to the income statement. 82. Earnings per share. 83. Significant non-recurring, atypical or unusual transactions. 84. Guarantees and commitments with third parties. 85. Other information. 0.4 Attachments to the notes to the Interim report on operations 114. 1. List of companies included in the consolidated financial statements. 116. 2. List of shareholdings in companies carried at equity. 118. 3. List of companies included in the consolidated financial statements of the Ecodeco Group. 120. 4. List of companies included in the consolidated financial statements of the Coriance Group. 122. 5. List of financial assets available for sale. 0.5 Interim report on operations 125. Results sector by sector. 127. Macroeconomic scenario. 130. Performance of the energy market. 133. Energy sector. 147. Heat and Services sector. 152. Environment sector. 157. Networks sector. 173. Other Services and Corporate sector. 175. Outlook for operations. 176. Risks and uncertainties. 0.6 Certification by the Manager in charge of preparing accounting documents 200. Certification by the Manager in charge of preparing accounting documents. This is a translation of the Italian original “Resoconto Intermedio di gestione al 31 marzo 2012” 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 - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 2.

(4) WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b.

(5) WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 0.1. Performance indicators and corporate information.

(6) Interim report on operations – March 31, 2012. The A2A Group at March 31, 2012 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. 90.00%. 61.28% Edison (1). 50.00%. 100.00%. 100.00%. 99.99%. Premiumgas. A2A Montenegro. Coriance. Aprica. 90.00%. 20.00%. 70.00%. 43.70%. Edipower. Plurigas. EPCG. Varese Risorse (4). 100.00%. 100.00%. 39.49%. 60.00%. 100.00%. Aspem Energia. Abruzzoenergia. Rudnik Uglja ad Pljevlja. Proaris. Partenope Ambiente. 50.00% Ergosud. 50.00%. Asm Novara (3). Aspem (4). 91.60%. 100.00%. Retragas. Mincio Trasmissione. 80.00%. 67.00%. 74.50%. 19.44%. Montichiari ambiente. Seasm. Camuna Energia. Metroweb. 48.86%. 21.94%. ASVT (2). ACSM-AGAM. 5. 7.9% Dolomiti Energia. 50.00% Metamer. Areas of activity Energy Heat & Services Environment Networks Other Companies. (1) The 61.28% refers to 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 via 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 further stake in the company's share capital. This table shows the A2A Group's most significant shareholdings. You are referred to attachments 1,2,3,4 and 5 for full details of all shareholdings.. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 51.00%.

(7) Interim report on operations – March 31, 2012. Financial Highlights (1). Gross operating income Net income. 6. Income statement figures. 1,957 Millions of euro 271 Millions of euro 76 Millions of euro. 01 01 2012 03 31 2012. 01 01 2011 03 31 2011. Revenues. 1,957. 1,745. Operating expenses. Millions of euro. (1,541). (1,321). Labour costs. (145). (146). Gross operating income. 271. 278. Depreciation, amortization, provisions and write-downs. (88). (131). Net operating income. 183. 147. Financial balance. (54). (10). Other non-operating income. –. –. Other non-operating expenses. –. (1). Income before tax. 129. 136. Income taxes. (55). (40). 8. (9). (6). (2). Net result from non-current assets sold or held for sale Minorities Net income for the period pertaining to the Group Gross operating income / revenues. (1) These figures are the performance indicators as required in CESRN/05/178/B.. 76. 85. 13.8%. 15.9%. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. Revenues.

(8) Interim report on operations – March 31, 2012 Financial Highlights. Balance sheet figures. 03 31 2012. 12 31 2011. Millions of euro Net capital employed. 7,612. 7,614. Total equity attributable to the Group and minorities. 3,658. 3,593. (3,954). (4,021). Consolidated net financial position Consolidated net financial position / Equity attributable to the Group and minorities. 1.08. 1.12. Consolidated net financial position / Average market capitalization. 1.75. 1.31. Financial data. 01 01 2012 03 31 2012. 01 01 2011 03 31 2011. Net cash from operating activities. 155. 207. Net cash used in investing activities. (63). (45). 92. 162. 03 31 2012. 12 31 2011. Millions of euro. Free cash flow. Key figures for 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. 03 31 2012. 03 31 2011. 1.338%. 1.367%. 118.33. 105.19. 1.31. 1.37. Average price of Brent crude (euro/bbl). 90.23. 76.88. Average price of coal (euro/ton). 76.56. 90.14. Average six-month Euribor Average price of Brent crude (US$/bbl) Average exchange rate euro/US$ (*). (*) Source: Italian Foreign Exchange Office. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 7.

(9) Interim report on operations – March 31, 2012. A2A S.p.A. on the Stock Exchange. A2A on the Stock Exchange 1,884. Average capitalisation in 1st quarter 2012 (millions of euro). 2,259. Average volumes in 1st quarter 2012. 10,422,612. Average price in 1st quarter 2012 (*). 0.721. Maximum price in 1st quarter 2012 (*). 0.793. Minimum price in 1st quarter 2012 (*). 0.598. Number of shares. 3,132,905,277. (*) Euro per share Source: Bloomberg. A2A forms part of the following indices FTSE MIB STOXX Europe 600 EUROSTOXX Down Jones Italy WisdomTree S&P Developed Ex-US. Ethical Indices ECPI Ethical Index EMU Axia Sustainable Index Solactive Climate Change Index FTSE ECPI Italia SRI Benchmark Source: Bloomberg. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 8. Capitalisation at March 31, 2012 (millions of euro).

(10) Interim report on operations – March 31, 2012 A2A S.p.A. on the Stock Exchange. Shareholding (*). 9. (*) Stakes higher than 2% (updated at March 31, 2012) Source: CONSOB. Rating. Standard & Poor’s. Medium/long Term rating. BBB. Short Term Rating. A–2. Outlook Moody’s. Medium/long Term rating Outlook. Rating updated at April 17, 2012 Source: rating agencies. Negative Baa1 (on review for downgrade) Negative. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. Current.

(11) Interim report on operations – March 31, 2012 A2A S.p.A. on the Stock Exchange. A2A in the 1st quarter 2012. A2A vs FTSE MIB. Source: Bloomberg. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 10.

(12) Interim report on operations – March 31, 2012. Corporate Boards. SUPERVISORY BOARD CHAIRMAN Graziano Tarantini DEPUTY CHAIRMAN Rosario Bifulco. MANAGEMENT BOARD CHAIRMAN Giuseppe Sala DEPUTY CHAIRMAN Vittorio Cinquini DIRECTORS Franco Baiguera Mario Cocchi Francesco Randazzo Renato Ravanelli Paolo Rossetti Carlo Secchi. 11. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. DIRECTORS Adriano Bandera Giambattista Brivio Bruno Caparini Gianni Castelli Alberto Cavalli Stefano Grassani Enrico Mattinzoli Marco Miccinesi Massimo Perona Norberto Rosini Franco Tamburini Antonio Matteo Taormina.

(13) Interim report on operations – March 31, 2012 Corporate Boards. GENERAL MANAGERS CORPORATE AND MARKET AREA Renato Ravanelli TECHNICAL-OPERATIONS AREA Paolo Rossetti. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 12.

(14) Interim report on operations – March 31, 2012. Significant events during the period. A2A S.p.A. confirmed in the ECPI Ethical EMU Equity index. ECPI has confirmed that A2A S.p.A. has been included in the ECPI Ethical EMU Equity index on the basis of its end-of-year analysis. The index uses screening methodologies to select and analyze the top 150 listed companies in the EMU (Economic and Monetary Union) area. Companies are selected from the most capitalized ones that best fulfil sustainability requirements using a methodology based on a series of indicators reflecting environmental, social and corporate governance. characteristics. A2A S.p.A. has been listed in this index since 2008.. 13. A2A S.p.A.: 95 million euro loan from EIB to expand district heating business On January 13, 2012, A2A S.p.A signed a 95 million euro loan from the European Investment Bank (EIB); the money will be invested in projects to expand district heating networks in the Greater Milan area (in the city centre of Milan, Novate Milanese and Sesto San Giovanni in to-energy and co-generation plants and to increase the amount of heat generated by A2A Group renewable sources. The European Investment Bank concurred, on the basis of its lending principles, with the investment plan that the Group plans to implement over the fiveyear period from 2011-2015 to optimize and expand the district heating network and heat generated. The EIB's opinion is that the projects are in line with its lending strategy in the energy sector, given that they will optimize the heat production mix and reduce consumption of fossil fuels, thereby contributing to reaching EU objectives. The 15-year loan will allow A2A S.p.A to extend the average duration of its debt and diversify its sources.. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. particular). The projects will aim to maximize the quantity of heat generated by existing waste-.

(15) Interim report on operations – March 31, 2012 Significant events during the period. Delmi S.p.A.: sale of Transalpina di Energia S.r.l. (TdE) shareholding to EDF S.A. gets unanimous approval On January 30, 2012, the Shareholders' Committee, the Shareholders' Meeting and Board of Directors of Delmi S.p.a. unanimously approved the proposal to sell the company's share in Transalpina di Energia S.r.l. (61%-owned subsidiary of Edison S.p.A) to EDF S.A. and for Edison S.p.a. and Alpiq S.A. to purchase 70% of Edipower S.p.A., in line with agreements reached on December 26, 2011. On February 15, 2012, A2A S.p.A, Delmi S.p.A., EDF S.A., Edison S.p.A. and Alpiq S.A. signed the final contracts as part of the preliminary agreement reached on December 26, 2011 to reorganize the shareholding structure of Edison S.p.A. and Edipower S.p.A. More specifically, Delmi S.p.A. will acquire 70% of Edipower S.p.A. from Edison S.p.A. (50%) and Alpiq S.A. (20%) for the total cost of 804 million euro. EDF S.A. will acquire from Delmi S.p.a. 50% of Transalpina di Energia S.r.l., a company that it already owns the remaining 50% of and which in turn owns 61.3% of capital with voting rights of Edison S.p.A., for the total cost of 704 million euro. The main details of an agreement whereby Edison S.p.A. will supply gas to Edipower S.p.A. have been agreed; this agreement will cover 50% of Edipower S.p.A.'s requirements for a period of 6 years at market conditions. Closing is expected no later than June 30, 2012. The entire operation depends on confirmation from Consob that the tender offer, following EDF S.A.'s takeover of Edison S.p.A, is not greater than 0.84 euro per share. The operation is also subject to approval of the relevant Antitrust authorities.. A2A S.p.A appoints Chairman and Member of Management Board On February 17, 2012, the A2A S.p.A. Supervisory Board met at a meeting chaired by the lawyer Graziano Tarantini and, in accordance with the company's articles of association, appointed Carlo Secchi a member of the A2A S.p.A. Management Board. The Supervisory Board also appointed Giuseppe Sala, member of the A2A S.p.A Management Board, as Chairman of the Management Board. The resulting Management Board will remain in office until the first meeting of the Supervisory Board, after its scheduled renewal at the Shareholders' Meeting on May 29, 2012.. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 14.

(16) Interim report on operations – March 31, 2012 Significant events during the period. A2A S.p.A: shareholding in e-Utile S.p.A. sold A2A S.p.A. sold its 49% stake in e-Utile S.p.A. to Atos, a global company operating in the IT service sector. Atos recently acquired the remaining 51% of e-Utile S.p.A. from Siemens IT Solutions and Services. e-Utile S.p.A. supplies IT services to A2A Group companies and on the free market. A2A S.p.A. received 10.3 million euro from the operation, generating a consolidated capital gain of more than 8 million euro. This is part of the A2A Group's ongoing process to rationalize its shareholding portfolio and focus on the Group's core business.. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 15.

(17) Interim report on operations – March 31, 2012. Summary of results, assets and liabilities and financial position of the A2A Group. Results The results of the A2A Group for the period ended March 31, 2012 are set out below, with comparative figures for the corresponding period of the previous year: Millions of euro. 01 01 2012 03 31 2012. 01 01 2011 03 31 2011. Changes. 1,957. 1,745. 212. 1,939. 1,725. 214. 18. 20. Revenues of which: – Revenues from sales of goods and services – Other operating income Operating expenses. (2). (1,541). (1,321). Labour costs. (145). (146). 1. Gross operating income. 271. 278. (7). Depreciation and amortization. (96). (108). 12. Provisions and write-downs. 8. Net operating income. 183. Net financial expense. (220). (23). 31. 147. 36. (55). (12). (43). Shares of results of companies at equity. 1. 2. (1). Other non-operating income. –. –. –. Other non-operating expenses. –. (1). 1. Income before tax. 129. 136. (7). Income taxes. (55). (40). (15). Income from current operations, net of tax. 74. 96. (22). Net result from non-current assets sold or held for sale. 8. (9). 17. Minority interests. (6). (2). (4). Group net profit for the period. 76. 85. (9). In the three months being reported, the Group earned revenues of 1,957 million euro, 71 million euro of which came from the EPCG Group (1,745 million euro in the first quarter of 2011, of which 86 million euro relate to the EPCG Group).. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 16.

(18) Interim report on operations – March 31, 2012 Summary of results, assets and liabilities and financial position of the A2A Group. The key figures that contributed to generating these revenues are listed below: 03 31 2012. 03 31 2011. Electricity sold to wholesale and retail customers (GWh). 5,325. 5,625. Electricity sold on the Power Exchange (GWh). 3,136. 3,799. Electricity sold on foreign markets (GWh). 3,312. 3,145. Electricity sold (GWh) - EPCG. 1,197. 1,333. Gas sold (Mcm). 1,839. 1,494. Heat sold (GWht). 1,526. 1,439. Electricity distributed (GWh). 2,930. 2,908. Electricity distributed (GWh) - EPCG. 761. 741. Gas distributed (Mcm). 950. 965. 17. 15. Water distributed (Mcm) Water purified (Mcm) Waste disposed of (Kton). 10. 10. 635. 670. In particular, sales mainly derived from the following quantities produced by the plants managed by the Group: 17 03 31 2012. 03 31 2011. 2,265. 2,431. Thermoelectric production (GWh) - EPCG. 399. 379. Hydroelectric production (GWh). 506. 715. Thermoelectric production (GWh). Hydroelectric production (GWh) - EPCG. 310. 739. 1,284. 1,188. Electrical produced by co-generation (GWh). 354. 362. Electricity sold from waste to energy and biogas plants (GWh).. 304. 316. Heat production (GWht). the same period in the previous year.. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. Gross operating income was 271 million euro, more or less the same as the figure posted for.

(19) Interim report on operations – March 31, 2012 Summary of results, assets and liabilities and financial position of the A2A Group. The following table shows how business developed in each area: Millions of euro. 03 31 2012. 03 31 2011. Energy Sector. 79. 94. - electricity - gas. 34 45. 60 34. Heat and Services Sector. 53. 48. Environment Sector. 71. 76. Networks Sector. 68. 65. Other Services and Corporate Sector Total. – 271. (5) 278. The Energy sector posted a smaller margin than the first quarter of 2011: the change in the electricity sector (down 26 million euro) was partly offset by the increase in gas margins (up 11 million euro). Gross operating income for the electricity sector, less the contribution of the Montenegro subsidiary EPCG, was in line with the result posted for the same quarter in 2011 (38 million euro). The industrial portfolio performed well, benefiting from an improvement in the spread between sales prices and fuel costs and also from the careful management of gas procurement; this was offset by the dip in trading portfolio margins caused by the hugely volatile prices on European markets at certain times of the quarter being reported. The contribution of the EPCG energy sector during the first quarter of 2012 dropped by 26 million euro, compared to the first three months last year. This drop can be traced mainly to the reduction in hydroelectric production in the first quarter of 2012 and resultant increase in the amount of electricity imported at a time when market prices are on the rise. The gas sector posted a margin that was 11 million euro higher than the same quarter last year. Gross operating income for the Heat and Services sector was 53 million euro, compared to 48 million euro for the first quarter of 2011. The 5 million euro growth was mainly generated by the commercial development of the District Heating Sector. Gross operating income in the Environment Sector was 71 million euro, a decrease of 5 million euro as a result of the loss of the CIP 6 incentive previously awarded to the Milan, Bergamo and Filago waste-to-energy plants. The Networks sector achieved growth in performance in the first quarter of 2012, posting gross operating income of 68 million euro (up 3 million euro). This growth can for the most part be attributed to the gas distribution sector.. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 18.

(20) Interim report on operations – March 31, 2012 Summary of results, assets and liabilities and financial position of the A2A Group. “Depreciation, amortization, provisions and write-downs” totaled 88 million euro (131 million euro at March 31, 2011). The decrease of 43 million euro can for the most part be attributed to less amortization and depreciation, the release of previously allocated risk provisions and bad debt provision. As a result of the above movements, “Net operating income” rose to 183 million euro (147 million euro at March 31, 2011). “Net expenses from financial activities” amounted to 55 million euro (12 million euro at March 31, 2011), and were adversely affected by the fair value effect of financial derivatives at March 31, 2012 for which a negative balance of 22 million was posted compared with the same period in the previous year when the figure was +19 million euro. On removing the change in the fair value of financial derivatives, net expenses from financial activities amounted to 33 million euro, compared with 31 million euro in the same quarter last year. The balance posted for “Shares of results of companies at equity” was positive (1 million euro) compared to a similarly positive value of 2 million euro for the same period in 2011. This item includes primarily the effects of the valuation of the shareholdings in Premium Gas S.p.A.. 19. and some in the Coriance Group. “Income tax expense” for the reporting period was 55 million euro (40 million euro at March 31, 2011); this figure was affected by both the general increase in the "Robin Hood tax" rate, as it is known, starting from the beginning of the second half-year of 2011, when it rose from 6.5% to 10.5% for the three-year period from 2011 to 2013, and also by the widening of the range of companies subject to this tax to include those involved in the distribution of electricity and gas, which were previously excluded. The IRAP tax rate also increased at the same time, from 3.90% to 4.20% for companies working under government concession, in other sectors apart. A positive balance of 8 million euro was posted for “Net income from non-current assets sold or held for sale”, including primarily the contribution made by the sale of the shareholding in e-Utile S.p.A, as compared to the same period last year when a negative balance of 9 million euro was posted, which included the valuation of the shareholding in Transalpina di Energia S.r.l.. “Net income for the period pertaining to the Group”, less income pertaining to noncontrolling interests, was 76 million euro (85 million euro at March 31, 2011).. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. from construction, motorways and tunnel management..

(21) Interim report on operations – March 31, 2012 Summary of results, assets and liabilities and financial position of the A2A Group. Balance sheet and financial position Consolidated “Capital employed” amounted to 7,612 million euro at March 31, 2012, and was covered by net equity of 3,658 million euro (834 million euro of which pertains to noncontrolling interests) and net debt of 3,954 million euro. "Working capital" amounted to 859 million euro, which was a 9 million euro increase on the figure reported at December 31, 2011. “Net fixed capital”, including “Assets/Liabilities held for sale” totaled 6,753 million euro, which was a drop of 11 million euro on the figure reported at December 31, 2011. The “Net financial position” at March 31, 2012 was 3,954 million euro, an improvement of 67 million euro on the figure posted at December 31, 2011: this was due to cash of 141 million euro which more than covered capital employed in the period, equal to 74 million euro.. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 20.

(22) Interim report on operations – March 31, 2012 Summary of results, assets and liabilities and financial position of the A2A Group. Millions of euro. 03 31 2012. 12 31 2011. Changes. Net fixed capital. 5,838. 5,846. (8). Tangible assets. 4,649. 4,685. (36). 1,518. 1,503. 15. 535. 535. –. (138). (133). (5). (4). (10). 6. Provisions for risks, charges and liabilities for landfills. (453). (462). 9. Employee benefits. (269). (272). 3. of which with counter-entry to equity. (101). (112). Working capital. 859. 850. Inventories. 120. 267. CAPITAL EMPLOYED. Intangible assets Shareholdings and other non-current financial assets (*) Other non-current assets/liabilities (*) Deferred tax assets/liabilities. 9 (147). Trade receivable and other current assets (*). 2,518. 2,368. 150. Trade payables and other current liabilities (*). (1,732). (1,790). 58. Current tax assets/tax liabilities of which with counter-entry to equity. Assets/liabilities held for sale (*) of which with counter-entry to equity. (47). 5. (7). (8). 915. 918. (52) 21 (3). –. –. 7,612. 7,614. Equity. 3,658. 3,593. 65. Total financial position beyond one year. 3,857. 3,729. 128. TOTAL CAPITAL EMPLOYED. (2). SOURCES OF FUNDS. Total net financial position of which with counter-entry to equity TOTAL SOURCES (*) Excluding balances included in net financial position.. 97. 292. (195). 3,954. 4,021. (67). (7) 7,612. (32) 7,614. (2). WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. Total financial position within one year.

(23) Interim report on operations – March 31, 2012 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 2012 03 31 2012. (4,021). 01 01 2011 03 31 2011. (3,893). Net income for the period (including minorities) (**). 74. 87. Depreciation and amortization. 96. 108. 2. 1. Results from companies at equity. (1). 10. Change in assets and liabilities (*). (16). 1. Write-downs/disposals of tangible and intangible assets. Net cash from operating activities. 155. 207. Net cash from investing activities:. (63). (45). - investments. (74). (49). 11. 4. Free cash flow. 92. 162. Changes in financial assets/liabilities with counter-entry to equity. (25). (11). (3,954). (3,742). - sale of shareholdings. NET FINANCIAL POSITION AT THE END OF THE PERIOD (*) Excluding balances with counter-entry to equity. (**) The result for the period is stated excluding gains on the disposal of shareholdings.. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 22.

(24) Interim report on operations – March 31, 2012. Significant events after March 31, 2012. Acerra waste-to-energy plant continues to perform excellently throughout the first quarter of 2012 In the first three month of 2012, the Acerra waste-to-energy plant continued to perform at the same high levels of efficiency achieved in 2011. The plant received 134 thousand tons of waste which produced 116 million Kwh of electricity to feed into the national grid (enough energy to meet the annual needs of 41,500 families), preventing the consumption of about 21,000 tons of crude oil. The results were also excellent from an environmental point of view. In fact, atmospheric. 23. emissions are regularly well below the limits set in European regulations and also in stricter standards laid down by the Integrated Environmental Authority governing the Acerra plant. In the first quarter of 2012, Partenope Ambiente S.p.A. also completed several scheduled maintenance works on two of the three lines making up the plant; as 2012 progresses, the company expects to reach the same high standard of production attained in 2011 when the Acerra waste-to-energy plant reached 100% of its full annual capacity - 600,000 tons of waste. Ecodeco Group: new waste treatment plant opened in Spain A new plant for the mechanical and biological treatment of solid urban waste using the Biocubi process patented by Ecodeco S.r.l. was opened in Cervera del Maestre, in Spain's Castellón della Comunidad Valenciana province, on April 11, 2012. The plant, built by a business consortium (UTE) including Teconma, Azahar and Ecodeco S.r.l., will receive the residual part of separated solid urban waste collected from 49 towns and cities in the northern part of the province of Castellón, and will be able to process up to 130,000 tons per year. As well as supplying the necessary technology, the A2A Group also built the electromechanical part of the waste treatment system. In the industrial process, after recyclable materials have been recovered, such as metal, plastic and paper, the bio-dried material is pressed then sent to the landfill, built and managed by the. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. - a few days ahead of schedule..

(25) Interim report on operations – March 31, 2012 Significant events after March 31, 2012. same business consortium. The overall investment amounted to roughly 40 million euro. Ecodeco S.r.l. has a 30% stake in the venture and as well as its quota of the work done, will also receive royalties for 20 years.. The A2A S.p.A. Supervisory Board approved the 2011 financial statements. Chaired by lawyer Graziano Tarantini, the Supervisory Board met on April 26, 2012 and approved the separate financial statements and consolidated annual report of the A2A Group at December 31, 2011. The Supervisory Board accepted the Management Board's proposal to ask the Shareholder's Meeting to distribute dividends of 0.013 euro per ordinary share, to be paid from June 21, 2012 (registered on June 18, 2012).. A2A S.p.A.: contractual terms of Edison/Edipower operation amended 24. The following agreements were signed on May 5, 2012: (i) agreement between A2A S.p.A. and Delmi S.p.A. on the one hand, and EDF S.A. on the other, partially amending the agreement signed by the same parties on February 15, 2012 and establishing that the price of the 50% stake in Transalpina di Energia S.r.l., owned by Delmi S.p.a., to be sold to EDF S.A., had risen from 704,372,600 euro to 783,748,900 euro, as well as obliging Delmi S.p.a. to pay EDF S.A. 50% of the higher sum that EDF S.A. will incur as a result of the public mandatory tender offer of Edison S.p.A. shares at 0.89 euro per share (instead of 0.84 euro per share), and up to a maximum of 25,100,000 euro; S.A. as the other, partially amending the agreement signed by these parties on February 15, 2012 and establishing that the price of the 50% stake in Edipower S.p.A., owned by Edison S.p.A, to be sold to Delmi S.p.A., had risen from 604,372,600 euro to 683,748,900 euro, thereby taking the overall price for the 70% share in Edipower S.p.A. from 804,372,600 euro to 883,748,900 euro. The performance of the agreement to sell Transalpina di Energia S.r.l. must first be approved by the European Commission, and the performance of the agreement to sell Edipower S.p.A. is in turn dependent on the execution of the Transalpina di Energia S.r.l. agreement (now that the Italian Antitrust Authority has issued its authorization).. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. (ii) agreement between A2A S.p.A. and Delmi S.p.A. as one party, and Edison S.p.A and Alpiq.

(26) WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 0.2. Consolidated financial statements.

(27) Interim report on operations – March 31, 2012. Consolidated balance sheet (1) Assets. Millions of euro. Note. 03 31 2012. 12 31 2011. 03 31 2011. Tangible assets. 1. 4,649. 4,685. 4,814. Intangible assets. 2. 1,518. 1,503. 1,550. Shareholdings carried at equity. 3. 522. 521. 2,410. Other non-current financial assets. 3. 49. 48. 42. Other non-current assets. 4. NON-CURRENT ASSETS. Total non-current assets. 114. 132. 88. 6,852. 6,889. 8,904. CURRENT ASSETS Inventories. 5. 120. 267. 128. Trade receivables. 6. 2,189. 1,958. 2,269. Other current assets. 7. 329. 410. 373. Current financial assets. 8. 234. 233. 38. Current tax assets. 9. 6. 30. 15. Cash and cash equivalents. 10. Total current assets NON-CURRENT ASSETS HELD FOR SALE TOTAL ASSETS (1). 11. 245. 147. 246. 3,123. 3,045. 3,069. 926. 921. 81. 10,901. 10,855. 12,054. Significant non-recurring events and transactions in the consolidated financial statements are indicated in Note 38, as required by Consob Communication DEM/6064293 of July 28, 2006.. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 26.

(28) Interim report on operations – March 31, 2012 Consolidated balance sheet. Equity and liabilities. Millions of euro. Note. 03 31 2012. 12 31 2011. 03 31 2011. Share capital. 12. 1,629. 1,629. 1,629. (Treasury shares). 13. (61). (61). (61). Reserves. 14. 1,180. 1,619. 1,940. –. (420). –. 76. –. 85. 2,824. 2,767. 3,593. EQUITY. Net result for the period Net profit for the reporting period. 15. Equity pertaining to the Group Minority interests. 16. Total equity. 834. 826. 1,350. 3,658. 3,593. 4,943. 27. LIABILITIES. Non-current financial liabilities. 17. 3,963. 3,851. 3,706. Deferred tax liabilities. 18. 4. 10. 50. Employee benefits. 19. 269. 272. 274. Provisions for risks, charges and liabilities for landfills. 20. 453. 462. 466. Other non-current liabilities. 21. Total non-current liabilities. 182. 177. 162. 4,871. 4,772. 4,658. 1,315. Current liabilities Trade payables. 22. 1,235. 1,348. Other current liabilities. 22. 497. 442. 612. Current financial liabilities. 23. 587. 675. 406. Tax liabilities. 24. 53. 25. 103. Total current liabilities. 2,372. 2,490. 2,436. Total liabilities. 7,243. 7,262. 7,094. –. –. 17. 10,901. 10,855. 12,054. LIABILITIES DIRECTLY ASSOCIATED WITH NON-CURRENT ASSETS HELD FOR SALE TOTAL EQUITY AND LIABILITIES. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. Non-current liabilities.

(29) Interim report on operations – March 31, 2012. Consolidated income statement (1-2). Millions of euro. Note. 01 01 2012 03 31 2012. 01 01 2011 03 31 2011. 01 01 2011 12 31 2011. 1,939. 1,725. 6,096. 18. 20. 102. 1,957. 1,745. 6,198. 1,473. 1,252. 4,396. 68. 69. 302 4,698. Revenues Revenues from the sale of goods and services Other operating income Total revenues. 26. Operating expenses Cost of raw materials and services Other operating expenses Total operating expenses. 27. 1,541. 1,321. Labour costs. 28. 145. 146. 558. Gross operating income - EBITDA. 29. 271. 278. 942. Depreciation, amortization, provisions and write-downs. 30. 88. 131. 641. Net operating income - EBIT. 31. 183. 147. 301. Financial income. 11. 26. 55. Financial expense. 66. 38. 178. 1. 2. (132). (54). (10). (255). –. –. 6. –. (1). (10). Financial balance. Portion of income and charges when shareholdings are carried at equity Total financial balance. 32. Other non-operating income Other non-operating expenses Income before tax (1). 33. 129. 136. 42. Significant non-recurring events and transactions in the consolidated financial statements are indicated in Note 38, as required by Consob Communication DEM/6064293 of July 28, 2006.. (2). Values provided for the purposes of comparison with the January - March 2011 reporting period, more specifically for income statement items such as income and charges generated when shareholdings are carried at equity, have been reclassified to reflect the application of IFRS5.. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 28.

(30) Interim report on operations – March 31, 2012 Consolidated income statement. Note. Income taxes. 34. 01 01 2012 03 31 2012. 01 01 2011 03 31 2011. 01 01 2011 12 31 2011. 55. 40. 148. 74. 96. (106). 8. (9). (810). Net income. 82. 87. (916). Income pertaining to minority interests. (6). (2). 496. 76. 85. (420). Result after tax from operating activities Net result from non-current assets sold or held for sale. Net income for the period/year pertaining to the Group. 35. 36. 29. Earnings (loss) per share (in euro): – basic. 0.0244. 0.0275. (0.1352). – basic, from operating activities. 0.0219. 0.0284. (0.0076). – basic, from activities held for sale. 0.0025. (0.0009). (0.1276). – diluted. 0.0244. 0.0275. (0.1352). – diluted, from operating activities. 0.0219. 0.0284. (0.0076). – diluted, from activities held for sale. 0.0025. (0.0009). (0.1276). WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. Millions of euro.

(31) Interim report on operations – March 31, 2012. Consolidated statement of comprehensive income. Millions of euro Net income/(loss) for the period (A) Effective part of gains/(losses) on cash flow hedges. 03 31 2011. 12 31 2011. 82. 87. (916). (23). (4). (13). Gains/(losses) on the re-measurement of financial assets available for sale. –. –. –. Tax effect of other gains/(losses). 9. 1. 2. (14). (3). (11). Total other gains/(losses) net of the tax effect of companies consolidated on a line-by-line basis (B) Other gains/(losses) of companies valued at equity, net of the tax effect (C) Total gain/(loss) (A + B + C). –. 10. (11). 68. 94. (938). 60. 88. (453). 8. 6. (485). Total gain/(loss) attributable to: Shareholders of the parent company Minority interests. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 30. 03 31 2012.

(32) Interim report on operations – March 31, 2012. Consolidated cash flow statement. Millions of euro. 03 31 2012. 12 31 2011. 03 31 2011. 147. 132. 132. Net income for the period/year (**). 74. (951). 87. Depreciation. 75. 336. 87. Amortization. 21. 79. 21. Write-downs/disposals of tangible and intangible assets. 2. 125. 1. Results from companies carried at equity (***). (1). 979. 10. Write-downs of shareholdings. –. 4. –. Income taxes paid. –. (240). Change in assets and liabilities (*). (16). 78. 1. Net cash from operating activities. 155. 410. 207. Investments in tangible assets. (39). (183). (29). Investments in intangible assets and goodwill. (35). (127). (20). Investments in shareholdings and securities (*). –. (11). –. Sales of fixed assets and shareholdings. 11. 79. 4. CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE REPORTING PERIOD/YEAR Operating activities. 31. –. Dividends received from shareholdings in companies carried at equity and other shareholdings Net cash from investing activities FREE CASH FLOW. –. 17. –. (63). (225). (45). 92. 185. 162. Financing activities Change in financial assets (*). (24). (236). 30. Change in financial liabilities (*). 34. 481. (67). Net financial expenses paid. (4). (111). (11). –. (298). –. Dividends paid by parent company Dividends paid by subsidiaries. –. (6). Cash flows from financing activities. 6. (170). (48). 98. 15. 114. 245. 147. 246. CHANGE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE END OF THE REPORTING PERIOD/YEAR. –. (*) Net of balances with contra-entry in equity and other balance sheet/cash flow items. (**) Income for the reporting period/year is shown net of capital gains generated by the sale of shareholdings. (***) At March 31, 2011 this item included the value of shareholding in TdE S.r.l. which has been reclassified in the Income Statement under "Net result from non-current assets sold or held for sale".. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. Investing activities.

(33) Interim report on operations – March 31, 2012. Consolidated statement of changes in equity. Description Millions of euro. Equity at 12 31 2010. Share capital. Treasury shares. Cash Flow Hedge. Note 12. Note 13. Note 14. 1,629. (61). 31. Changes in the first three months of 2011 Allocation of 2010 net income IAS 32 and IAS 39 reserves (*). 3. Put option on Delmi S.p.A. shares Net income for the period pertaining to the Group and minority interests Equity at 03 31 2011. 1,629. (61). 34. Changes from April, 1 2011 to December 31, 2011 Distribution of dividends IAS 32 and IAS 39 reserves (*). (14). Put option on Delmi S.p.A. shares Other changes Net result for the period pertaining to the Group and minority interests Equity at 12 31 2011. 1,629. (61). 20. Changes in the first three months of 2012 Allocation of 2011 net income IAS 32 and IAS 39 reserves (*). (16). Other changes Net income for the period pertaining to the Group and minority interests Equity at 03 31 2012 (*) These form part of the statement of comprehensive income.. 1,629. (61). 4. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 32.

(34) Interim report on operations – March 31, 2012 Consolidated statement of changes in equity. Group net result for the period/year. Note 14. Note 15. 1,594. 308. 308. Total Group net equity. Total net equity. Note 16 3,501. 1,344. 4,845. 33. (308) 3. 4. 1,906. Minority interests. 4. 4. 7 4. 85. 85. 2. 87. 85. 3,593. 1,350. 4,943. (298). (298). (6). (304). (14). (15). (29). (2). (2). (7). (7). (5). (12). (505). (498). (1,003). 826. 3,593. (505) 1,599. (420). (420). 2,767. 420 (16). (3). 1,176. (2). 2. (3). (14) (3). 76. 76. 6. 82. 76. 2,824. 834. 3,658. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. Other reserves, and retained earnings.

(35) WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 0.3. Notes to the Interim report on operations.

(36) Interim report on operations – March 31, 2012. 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; • the production, sale and distribution of heat through district heating networks;. 35. • waste management (from collection and sweeping to disposal) and the construction and management of integrated waste disposal plants and systems, also making them available for other operators;. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. • integrated water cycle management..

(37) Interim report on operations – March 31, 2012. Interim report on operations. The Interim report on operations (the “Report”) of the A2A Group at March 31, 2012 is presented in millions of euro; this is also the functional currency of the economies in which the Group operates. The report of the A2A Group at March 31, 2012 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. IFRS means all reviewed international accounting standards (IAS) and all interpretations of the International Financial Reporting Interpretations Committee (IFRIC), formerly known as Standing Interpretations Committee (SIC). In preparing the Report, the same standards were adopted as those used in the preparation of the annual report at December 31, 2011. The principles and interpretations described in detail in the paragraph below “Changes in international accounting standards” were adopted for the first time on January 1, 2012. This Report at March 31, 2012, which has not been audited, was approved on May 10, 2012 by the Management Board which also authorized its publication.. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 36.

(38) Interim report on operations – March 31, 2012. Financial statements. 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 separately, as required by paragraphs 60 and following of “IAS 1 revised”. The income statement is presented in a vertical format with items classified by nature, as this is considered more representative than a classification by function. The selected format is consistent 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. 37. separately from income or costs deriving from non-recurring transactions that do not recur in the business's ordinary operations, such as gains or losses on the sale of shareholdings and other non-recurring income or expense; this makes it easier to measure the effective performance of the Group’s ordinary operating activities. 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 revised IAS 1 revised.. Consolidated annual report at December 31, 2011.. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. The formats adopted for the financial statements are the same as those used to prepare the.

(39) Interim report on operations – March 31, 2012. Basis of preparation. The Interim report on operations at March 31, 2012 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, as explained in more detail in the valuation criteria. The consolidation principles, accounting principles, accounting policies, and estimates used in the preparation of the Report are consistent with those used to prepare the consolidated annual report at December 31, 2011.. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 38.

(40) Interim report on operations – March 31, 2012. Changes in international accounting standards. The accounting standards adopted in the first three months of 2012 were the same as those used in the previous year, with the exception of the changes discussed in the paragraphs below "Accounting principles, amendments and interpretations approved by the European Union, and applicable from the current period with effects for the Group”. The subsequent paragraph “Accounting principles, amendments and interpretations not yet approved by the European Union” provides a summary of the changes which will be adopted in future periods, indicating where possible the estimated effects on the Interim report on operations of the A2A Group.. 39. Accounting principles, amendments and interpretations approved by the European Union and applicable from the current period with effects for the Group Certain changes to international accounting standards and their interpretations became effective on January 1, 2012, none of which however led to any significant effects on the • IAS 12 “Income Taxes”: the amendment was issued on December 20, 2011 and took effect from January 1, 2012; it states that the measurement of deferred tax liabilities and deferred tax income must reflect the tax effects deriving from the way in which the entity expects to recover or extinguish the accounting value of the asset or liability. Hence, according to the amendment, in certain circumstances, the measurement of deferred tax liabilities and deferred tax income must reflect the basic presumption that the value of the underlying asset will be recovered in full through sale, unless there is obvious proof that it can be recovered through use. These circumstances are when the deferred tax liabilities and deferred tax income derive from: 1. a property investment, when the entity applies the fair value model in IAS 40 "Investment Property";. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. Group’s various financial statements. The main changes are described below:.

(41) Interim report on operations – March 31, 2012 Changes in international accounting standards. 2. property, plant and equipment or intangible assets, when the entity adopts the provisions of IAS 16 "Property, plant and equipment" and IAS 38 "Intangible assets".. Accounting principles, amendments and interpretations not yet approved by the European Union. 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 1 “First-time adoption of International Financial Reporting Standards”: on December 20, 2010 IASB issued the document “Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters (Amendments to IFRS 1)”. The reason for removing fixed dates in IFRS 1 is to allow new users of IAS/IFRS to apply the same simplified rules as bodies that migrated to international accounting standards in 2005; for businesses publishing accounts to IFRS for the first time after being unable to do so on account of super hyperinflation, the amendments allow for IAS/IFRS to be backdated from the first adoption, enabling these organizations to use the fair value instead of the cost for all assets and liabilities in previous accounts. • IFRS 9 “Financial Instruments”, published by IASB on December 16, 2011 and amending the application date of this standard with effect from January 1, 2015 (it had previously been set for January 1, 2013). • IFRS 10 “Consolidated Financial Statements”, issued by IASB on May 12, 2011 and taking effect from January 1, 2013. IFRS 10 establishes principles for the presentation and preparation of consolidated financial statements and emphasizes the concept of control, regardless of the nature of the shareholding held by the entity preparing the consolidated accounts. This control becomes evident when the three circumstances below occur: 1. the power to influence and manage key operations in the shareholding; 2. exposure, or rights, to receive 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 operations that significantly affect the results of the subsidiary (so-called relevant activities) can be more easily exercised through voting rights (including potential voting rights), but also by way of contractual arrangements. Relevant activities, when control is exercised through voting rights, are represented by operating (development, purchasing and product sales) and financial management activities (obtaining and negotiating loans, acquisitions and sale of financial assets). Variable returns also include dividends, payment for services provided by the parent for the subsidiary's activities and tax benefits.. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 40.

(42) Interim report on operations – March 31, 2012 Changes in international accounting standards. This third condition to establish whether control exists regards the interaction between the first two conditions. In other circumstances, an organization can 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 if an organization is a parent, these assets and liabilities can be considered a separate entity only if it is economically separate from the entity as a whole, and is therefore a subsidiary company for the purposes of the consolidated financial statements. Following the introduction of this standard, a revised version of IAS 27 "Separate Financial Statements" was issued which remains the main reference for separate accounts, and of IAS 28 "Shareholdings in Associates and Joint Ventures"; the interpretation of SIC 12 "Consolidation - Special Purpose Entities" has also been superseded. Earlier adoption of this standard is permitted. • IFRS 11 “Joint Arrangements”, published by IASB on May 12, 2011 and taking effect from January 1, 2013. 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 describes two different types of joint arrangement: 1. Joint operations. 2. Joint ventures.. 41. 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, relating to the arrangement whereas in a joint venture, the parties have rights to the net assets of the arrangements. IFRS 11 establishes that the assets, liabilities, costs and revenues relating to a joint operation are recognized by the parties in line with their percentage control, whereas joint ventures are recognized by the parties using the net equity method, as laid down in IAS 28 "Shareholdings in Associates and Joint Ventures". Joint arrangements are recognized in the same way for both separate and consolidated the percentage of control; for joint ventures and shareholdings in subsidiaries and associates on the other hand, they can be recognized in separate financial statements either at cost or as defined in IFRS 9 "Financial Instruments" (and IAS 39 "Financial Instruments: recognition and measurement"), as also specified in IAS 27 "Separate Financial Statements". As regards disclosures to be provided in the explanatory notes, for more comprehensive information you are referred to the provisions of the new IFRS 12 "Disclosures of Interests in Other Entities". Earlier adoption of this standard is permitted. • IFRS 12 “Disclosures of Interests in Other Entities", issued by IASB on May 12, 2011 and effective from January 1, 2013,; this standard establishes minimum disclosure requirements, combining them with those established by other standards, that entities must provide to help users of the financial statements to understand the nature of subsidiary, associate and joint arrangement (the latter is defined in IFRS 11) interests held. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. financial statements, with assets, liabilities, costs and revenues recognized on the basis of.

(43) Interim report on operations – March 31, 2012 Changes in international accounting standards. by the entity, and the associated risks. In particular, the entity is required to provide information on interests acquired in order to determine if these are controlling interests (also joint) and if any significant influence is exerted on other entities. Earlier adoption of this standard is permitted. • IFRS 13 “Fair Value Measurement”, published by IASB on May 12, 2011 and effective from January 1, 2013. IFRS 13 determines the fair value, and provides guidelines on how to measure it, also introducing disclosure requirements. The standard does not specify when fair value measurement is required, but does lay down how it should be done when it is required by other standards. The new standard applies to all operations, both financial and non-financial, for which international accounting standards require or allow fair value measurements, with the exception of transactions recognized on the basis of IFRS 2 "Share-based Payments", leasing agreements governed by IAS 17 "Leasing", and transactions recognized on the basis of the "net realizable value", as described in IAS 2 "Inventories" and the "Value in use", as defined in IAS 36 "Impairment of Assets". The standard defines the “fair value” as the amount for which an asset could be exchanged, or a liability extinguished, in a transaction between willing, informed and unrelated parties. If transactions can be observed directly in the marketplace, the fair value can be measured fairly easily; where this is not possible, valuation techniques are used. This standard describes three of these techniques, which can be used to measure the fair value; the first one is the market approach, which uses prices and other relevant information generated by market transactions involving comparable assets and liabilities; the second is the income approach, which converts future cash flows or income and expenses; the third method is the cost approach, which requires the entity to produce a value that reflects the amount that would be required at the current time to replace the service capacity of an asset. As regards disclosures to be provided in financial statements, IFRS 13 extends the hierarchy of three levels of fair value, which vary depending on the input used in the valuation techniques, as already provided in IFRS 7 "Financial instruments: disclosures", to all assets and liabilities within its scope of application. Several disclosure requirements vary depending on whether the fair value measurement was done on a recurring or nonrecurring basis: recurring means the fair value measurements required by other accounting standards at the end of each reporting period, whereas non-recurring means fair value measurements required in special circumstances only. Earlier adoption of this standard is permitted. • IFRIC 19 “Extinguishing financial liabilities with equity instruments”: the current version of this standard was issued on November 26, 2009 by the IFRIC Committee and took effect on July 1, 2010, providing clarification and guidelines on: 1. how an entity should measure equity instruments issued against the cancellation of a financial liability.. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 42.

(44) Interim report on operations – March 31, 2012 Changes in international accounting standards. 2. how differences between the par value of financial liabilities that have been extinguished and the initial value of the equity instrument should be recognized and accounted for; 3. whether the issue of equity instruments falls within the definition of “consideration” as defined in IAS 39, paragraph 41. As regards the first aspect, the interpretation calls for the fair value measurement of the equity instruments issued to cancel a financial debt, unless the value cannot be reliably measured. In this case the equity instrument must be valued at the fair value of the financial liability that is to be cancelled. In addition, it clarifies that any difference between the par value of the cancelled financial liability and the initial value of the equity instruments issued must be booked to the income statement. • IFRIC 20 “Stripping Costs in the Production Phase of a Surface Mine”; the interpretation considers when and how to account for the costs of removing waste materials in the production phase of a mine. The interpretation makes a distinction between the benefits accruing from waste removal activities. Benefits consist of the generation of usable ore and improved access to further quantities of material that will be mined in future periods.. 43. In the former, the materials constitute inventory and the associated costs are therefore accounted for as such (in compliance with IAS 2 "Inventories"). In the latter case, the costs are accounted for as non-current stripping activity assets, provided that the future economic benefit (improved access to the ore body) associated with the stripping activity will in all likelihood flow to the entity. • IAS 12 “Income Taxes”, issued by IASB on December 20, 2011; IASB admits exceptions to the general principle governing the recognition of deferred tax liabilities and deferred tax income arising from property investments measured at fair value (as provided by IAS 40 depends solely on whether an entity expects to sell the investment. This amendment became effective on January 1, 2012 although earlier adoption is permitted. • Revised IAS 27 "Separate Financial Statements", issued by IASB on May 12, 2011, effective from January 1, 2013; a revised version of standard IAS 27 was published at the same time as IFRS 10 "Consolidated Financial Statements" was introduced, retaining the general principle regarding separate financial statements. This standard applies to the valuation of subsidiary, associate and joint venture shareholdings in the separate financial statements of the parent. Joint ventures, as is also the case for shareholdings in subsidiaries and associates, are recognized in separate financial statements at cost or as described in IFRS 9 "Financial Instruments" (and in IAS 39 "Financial instruments: recognition and measurement"). When a parent company chooses not to prepare consolidated financial statements, as established in IFRS 10 "Consolidated Financial Statements", in its separate. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. Investment Property); the assumption is that the recognition of deferred tax liabilities.

(45) Interim report on operations – March 31, 2012 Changes in international accounting standards. financial statements, it must disclose shareholdings in subsidiaries, associates and joint ventures, the main offices (and legal premises if different), their operations, the percentage stake in each individual company and details of how the respective values are brought to account. Earlier adoption of the principle is permitted, and in this case, IFRS 10 "Consolidated Financial Statements", IFRS 11 "Joint Arrangements", IFRS 12 "Disclosures of Interests in Other Entities" and IAS 28 (as amended in 2011) must all be applied. • Revised IAS 28 "Shareholdings in Associates and Joint Ventures", issued by IASB on May 12, 2011, effective from January 1, 2013; a revised version of this standard was published at the same time as principle IFRS 10 "Consolidated Financial Statements", establishing how shareholdings in associates and joint ventures should be recognized. An entity with joint control or significant interest over another body must recognize this shareholding using the net equity method. Earlier adoption of the principle is permitted, and in this case, IFRS 10 "Consolidated Financial Statements", IFRS 11 "Joint Arrangements", IFRS 12 "Disclosures of Interests in Other Entities" and IAS 27 (as amended in 2011) must all be applied. • IAS 32 “Accounting for rights issues": approved on December 23, 2009 and effective from February 1, 2010: allows warrants to be classified as equity in the issuing body's financial statements when issued to increase share capital at a fixed price for all shareholders in a different exercise currency from the issuing body. The current accounting practice laid down in IAS 32 established that these instruments must be presented as liabilities for derivative instruments. • IAS 1 “Presentation of Financial Statements”; the revision, which will take effect from July 1, 2012, concerns the presentation of data in the comprehensive statement of income. In particular, this amendment retains the option of presenting the Income Statement and Statement of Comprehensive Income in either a single report or in two separate reports, one following immediately after the other. The various components that will be charged to the Income Statement in future years must be grouped together in the statement of comprehensive income: these figures can be presented either with or without the net tax effect. Earlier adoption of this amendment is permitted. • IAS 19 "Employee Benefits", effective from January 1, 2013; the changes made in the amendment can be summed up in three main categories: (i) recognition and presentation in financial statements; (ii) disclosures; (iii) further amendments. The first type of amendment concerns defined benefit plans. In particular, the corridor method to recognize actuarial gains and losses has been eliminated, and the obligation to immediately recognize these components in the Income Statement introduced.. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 44.

(46) Interim report on operations – March 31, 2012 Changes in international accounting standards. For the presentation of the financial statements, the amendment establishes that changes in defined benefit costs are split into the following three components: 1. service cost; 2. finance cost; 3. remeasurement cost. As regards disclosure, in addition to eliminating the need to provide details of deferred recognition of gains and losses (no longer necessary after the corridor method was eliminated), the amendment calls for disclosure of details of the plans and associated amounts brought to account, risk arising from the plans, a sensibility analysis of changes in demographic risk and participation in multi employer plans. multi employer plans).. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 45.

(47) Interim report on operations – March 31, 2012. Scope of consolidation. The Interim report on operations of the A2A Group at March 31, 2012 includes the figures of the parent company A2A S.p.A. and those of its subsidiaries in which A2A S.p.A., directly or indirectly, holds a majority of the voting rights that can be exercised at the ordinary shareholders' meeting. 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. For a description of changes in the overall scope, you are referred to "Changes in the scope of consolidation since December 31, 2011" in the explanatory notes to the balance sheet.. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 46.

(48) Interim report on operations – March 31, 2012. Consolidation policies and procedures. Consolidation Policies Subsidiaries The scope of consolidation of the A2A Group comprises the parent company A2A S.p.A. and the companies over which it exercises direct or indirect control, even when the interest is less than 50%. Subsidiaries are consolidated from the date on which the Group effectively acquires control and are deconsolidated from the date on which control is transferred to a. 47. company outside of the Group.. Associates and Joint Ventures Shareholdings in associates, namely those in which the A2A Group has a considerable interest and is able to exercise significant influence, and those over which A2A S.p.A. has joint control together with other entities (joint ventures), are accounted for using the equity method. Gains and losses pertaining to the Group are recognized in the financial statements from the. In the event that the loss pertaining to the Group exceeds the book value of the shareholding, the carrying amount is reduced to zero and any excess loss is provided for to the extent that the Group has legal or implicit obligations towards the associate to cover its losses or, in any case, to make payments on its behalf.. Potential voting rights If the A2A Group holds call options to buy shares or warrants that can be converted to ordinary shares, or other equity instruments having the potential, if exercised or converted, to give the Group voting rights or reduce the voting rights of third parties ("potential voting rights"), such potential voting rights have to be taken into consideration when assessing. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. date on which the significant influence or joint control commenced..

(49) Interim report on operations – March 31, 2012 Consolidation policies and procedures. whether or not the Group has the power to govern or influence the other company's financial and operating policies.. Consolidation Procedures General Procedure The financial statements of the subsidiaries, associates and joint ventures consolidated by the A2A Group are prepared at the end of each reporting period using the same accounting policies as the parent company. Any items recognized or measured using different accounting principles are adjusted during the consolidation process to bring them into line with Group accounting policies. All intragroup balances and transactions, including any unrealized profits arising from transactions between Group companies, are fully eliminated. In preparing the Interim Report, the assets, liabilities, income and expenses of the companies being consolidated are included in their entirety on a line-by-line basis, stating the portion of equity and net income for the period attributable to minority interests separately in the balance sheet and income statement. The book value of the shareholding in each subsidiary is eliminated against the corresponding share of its net equity, including any adjustments to fair value at the acquisition date; any differences arising are accounted for in accordance with IFRS 3. Transactions with minority shareholders which do not lead to the loss of control in consolidated companies are accounted for using the economic entity view approach.. Consolidation procedure for assets and liabilities held for sale (IFRS 5). In the case of particularly large figures and exclusively in connection with non-current assets and liabilities available for sale, and only in this case, in accordance with the requirements of IFRS 5, the related intercompany financial receivables and payables are not eliminated in order to provide a clear presentation of the financial impact of a possible disposal, as described in more detail in "Accounting Standards and Valuation Criteria".. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 48.

(50) Interim report on operations – March 31, 2012 Consolidation policies and procedures. Effects on consolidation procedures of certain contracts concerning the shares/quotas of Group companies a) Option contracts between A2A S.p.A. and Società Elettrica Altoatesina SEL S.p.A. relating to a part of their investment in Delmi S.p.A. A2A S.p.A. has signed option contracts with Società Elettrica Altoatesina SEL S.p.A. (SEL) in relation to the portion of the shares it holds in Delmi S.p.A. Under the option contracts between A2A S.p.A. and SEL S.p.A., the latter has the right to sell to A2A S.p.A. and A2A S.p.A. has the right to purchase from SEL S.p.A. two lots of Delmi S.p.A. shares, representing 50% and 35% respectively of SEL S.p.A.'s shareholding in Delmi S.p.A. (currently 10% of Delmi S.p.A.'s share capital). The strike price of these options will be calculated for each lot based on various formulas that take into account SEL S.p.A.'s initial investment and/or the value of Edison S.p.A's shares at the time the options are exercised, depending among other things on the case of SEL S.p.A.'s put options, whether SEL S.p.A.- – at the time of exercising the option - has or has not become the owner of some of Edison S.p.A.'s hydroelectric power plants located in the Province of. 49. Bolzano. If exercised, the SEL S.p.A. put options and the A2A S.p.A. call options on SEL S.p.A., can be implemented in stages. A2A S.p.A and SEL S.p.A. have renegotiated the expiry dates of these options, postponing them beyond the initial deadline. In part, this deferral was due to the fact that the parties could not agree on whether the conditions for the exercise of one of SEL S.p.A.'s put options had been satisfied or not. As a result, the options are still outstanding. In accordance with paragraph 23 of IAS 32, the Group has recognized the present value of the. Changes in the present value of this liability caused by the passing of time are considered as financial expenses and recognized in profit and loss. There is still some uncertainty in international accounting standards as to how to treat the difference between the present value of the strike price of the put options and the carrying amount of the minority interests. In the absence of an interpretation of this question by the IFRIC, the Group has decided to show the difference as a deduction from equity attributable to the Group (if positive) or as an increase in equity attributable to the Group (if negative) as an alternative to adjusting goodwill. This is consistent with previous decisions taken by the Group. Accordingly, any changes in the liability that do not depend on time result in adjustments to Group equity.. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. estimated outlay as a liability..

(51) Interim report on operations – March 31, 2012 Consolidation policies and procedures. If the options expire without them being exercised, the liability will be reclassified to equity, reinstating the minority interests. The Interim report on operations at March 31, 2012 reports a liability to third parties for the possible exercise of the put options on the shares of Delmi S.p.A. of 91 million euro (91 million euro at December 31, 2011), a reduction in minority interests of 157 million euro (unchanged with respect to the previous balance sheet date). The share of Delmi S.p.A.'s result remains 51% as the above options do not currently give A2A S.p.A. access to the economic benefits associated with the shares under option. b) Call option for the purchase of 1% of the share capital of ASM Novara S.p.A. A2A S.p.A. owns 50% of the shares of ASM Novara S.p.A., a company with share capital of one million euro, set up with other shareholders in order to build and manage a district heating network in the town of Novara. As a result of an agreement between the shareholders of ASM Novara S.p.A., A2A S.p.A. holds a call option to buy 1% of the share capital of that company. Similarly, the other shareholders holding the remaining 50%, have a put option to sell 1% of the share capital to A2A S.p.A. Exercising one of these options would give A2A S.p.A. control over ASM Novara S.p.A. Any of the parties can exercise their options within three years of fulfillment of certain conditions relating to the construction of the district heating network in Novara: by March 31, 2012 these conditions had not yet been fulfilled. IAS 27, paragraph 14, establishes that when assessing whether an entity has the power to govern the financial and operating policies of another entity, it has to take account of the “potential voting rights” that would derive from exercising the options, providing they are currently exercisable. Such potential voting rights should then be added to the existing voting rights in order to calculate the total interest held in the share capital, which in turn establishes the method of consolidation to be applied to the investee. Potential voting rights that are not currently exercisable are understood as being, for example, those that cannot be exercised until a future date or until some future event takes place. Since as explained above the potential voting right held by A2A S.p.A. in ASM Novara S.p.A. is not currently exercisable, the shareholding in ASM Novara S.p.A. is consolidated using the equity method.. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. 50.

(52) Interim report on operations – March 31, 2012 Consolidation policies and procedures. When options are exercised, an assessment will be made as to whether the stake in ASM Novara S.p.A. is controlled by A2A S.p.A, in order to decide on the consolidation method to be used. c) Option granted to the Municipality of Varese for the sale of 9.8% of Aspem S.p.A. and 10% of Varese Risorse S.p.A. A2A S.p.A. holds 90% of the shares of Aspem S.p.A., a company that provides local public services in the city of Varese and in other towns in the province of Varese. Under the shareholder agreement between A2A S.p.A. and the Municipality of Varese, the latter has the right, but not the obligation, to sell (put option) to A2A S.p.A. 9.8% of the share capital of Aspem S.p.A. and 10% of the share capital of Varese Risorse S.p.A. (90% controlled by Aspem S.p.A). The Municipality of Varese can exercise its option after the expiry date of the period of intratransferability of the shares in Aspem S.p.A. and Varese Risorse S.p.A., which lasts for three years from the date of signing the shareholder agreement. These options have been valued on the basis of purchase value for Aspem for Varese Risorse S.p.A.. 51. In line with paragraph 23 of IAS 32, the Group has booked to liabilities with associated counter entry under net equity, the present value of the estimated outlay which it will not be able to avoid if it exercises this option. The Interim Report at March 31, 2012 shows a liability of 4 million euro to the Municipality of Varese, for the possible exercise of the put option on the shares of Aspem S.p.A. and Varese. WorldReginfo - 8ca15f73-66cf-4077-9e7d-5a9dde7b885b. Risorse S.p.A., with a corresponding reduction in the equity attributable to minority interests..