Half-yearly financial report

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(1)www.a2a.eu at June 30, 2013. Half-yearly financial report. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 2013. Half-yearly financial report at June 30, 2013. energy networks. environment. heat. and services.

(2) Half-yearly financial report at June 30, 2013. Contents 3. Corporate boards. Key figures of the A2A Group 6. Areas of activity. 7. Geographical areas of activity. 8. Group structure. 9. Financial highlights at June 30, 2013. 11. Shareholdings. 12. A2A S.p.A. on the Stock Exchange. Consolidated results and report on operations 16. Summary of results, assets and liabilities and financial position. 23. Significant events during the period. 28. Significant events for the Group after June 30, 2013. 31. Outlook for operations. 1. Consolidated financial statements 34. Consolidated balance sheet. 36. Consolidated income statement. 38. Consolidated statement of comprehensive income. 39. Consolidated cash-flow statement. 40. Statement of changes in Group equity. 42. Balance sheet pursuant to Consob Resolution no. 17221 of March 12, 2010. 44. Income statement pursuant to Consob Resolution no. 17221 of March 12, 2010. 46. General information on A2A S.p.A.. 47. The Half-yearly financial report. 48. Financial statements. 49. Basis of preparation. 50. Changes in international accounting standards. 58. Scope of consolidation. 59. Consolidation policies and procedures. 66. Seasonal nature of the business. 68. Results sector by sector. 70. Notes to the balance sheet. 89. Net debt. 90. Notes to the income statement. 97. Earnings per share. 98. Notes on related party transactions. 102. Significant non-recurring events and transactions. 103. Guarantees and commitments with third parties. 104. Other information. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. Notes to the Half-yearly financial report.

(3) Half-yearly financial report at June 30, 2013 Contents. Attachments to the notes to the Half-yearly financial report 158. 1. Statement of changes in tangible assets. 160. 2. Statement of changes in intangible assets. 162. 3. List of companies included in the consolidated financial statements. 164. 4. List of shareholdings in companies carried at equity. 166. 5. List of companies included in the consolidated financial statements of the. 168. 6. List of financial assets available-for-sale. Ecodeco Group. Changes in legislation 172. Changes in legislation. Scenario and market 188. Macroeconomic scenario. 191. Energy market trends. Analysis of main sectors of activity Energy Sector. 203. Environment Sector. 206. Heat and Services Sector. 209. Networks Sector. 212. Other Services and corporate. Risks and uncertainties 216. Risks and uncertainties. Responsible management for sustainability 230. Human resources and industrial relations. 233. Social responsibility and stakeholder relations. 237. Environmental responsibility. 239. Innovation, development and research. Certification of the condensed half-yearly financial statements pursuant to article 154-bis paragraph 5 of Legislative Decree no. 58/98 244. Certification of the condensed half-yearly financial statements pursuant to article 154bis paragraph 5 of Legislative Decree no. 58/98. Indipendent Auditor’s report 246. Indipendent Auditor’s report. This is a translation of the Italian original “Relazione finanziaria semestrale al 30 giugno 2013” 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 - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 2. 198.

(4) Half-yearly financial report at June 30, 2013. Corporate boards SUPERVISORY BOARD CHAIRMAN Pippo Ranci Ortigosa DEPUTY CHAIRMAN Fausto Di Mezza DIRECTORS Marco Baga Alessandro Berdini Marina Brogi Michaela Castelli Mario Cocchi Marco Manzoli Enrico Giorgio Mattinzoli Marco Miccinesi Andrea Mina Stefano Pareglio Massimo Perona Norberto Rosini Angelo Teodoro Zanotti. 3. MANAGEMENT BOARD CHAIRMAN Graziano Tarantini. DIRECTORS Giambattista Brivio Stefano Cao Bruno Caparini Maria Elena Cappello Renato Ravanelli Paolo Rossetti GENERAL MANAGERS CORPORATE AND MARKET AREA Renato Ravanelli TECHNICAL-OPERATIONS AREA Paolo Rossetti. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. DEPUTY CHAIRMAN Francesco Silva.

(5) WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. Half-yearly financial report at June 30, 2013. 4.

(6) Half-yearly financial report at June 30, 2013. Key figures of the A2A Group. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 5.

(7) Half-yearly financial report at June 30, 2013. Areas of activity. The A2A Group operates in the production, sale and distribution of gas and electricity, district heating, environmental services and the integrated water cycle. These activities in turn form part of the following sectors:. Sectors of the A2A Group Environment. Heat and Services. Networks. Other Services and Corporate. Thermoelectric and hydroelectric plants. Collection and street sweeping. Cogeneration plants. Electricity networks. Other services. Energy Management. Treatment. District heating networks. Gas networks. Corporate services. Sale of electricity and gas. Disposal and energy recovery. Sale of heat and other services. Integrated water cycle. This breakdown into sectors reflects the organization of the financial reporting regularly analyzed by management and by the Management Board in order to manage and plan the Group’s business.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. Energy 6.

(8) Half-yearly financial report at June 30, 2013. Geographical areas of activity. Update tothrough June 30, 2013 Updated December 31, 2012 Hydroelectric plants Thermoelectric plants Cogeneration plants Waste treatment plants Technological partnerships. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 7.

(9) Half-yearly financial report at June 30, 2013. Group structure A2A Spa. 56.09%. 100.00%. 100.00%. 100.00%. 100.00%. 100.00%. 100.00%. 100.00%. Edipower. A2A Trading. A2A Energia. Amsa. A2A Calore & Servizi. A2A Reti Elettriche. A2A Reti Gas. Selene. 100.00%. 70.00%. 100.00%. 100.00%. 60.00%. 100.00%. 100.00%. 100.00%. Abruzzoenergia. A2A Alfa. Aspem Energia. Ecodeco. Proaris. A2A Ciclo Idrico. A2A Servizi alla distribuzione. A2A Logistica. 50.00%. 50.00%. 33.33%. 100.00%. Ergosud. Premiumgas. Lumenergia. Aprica. 90.00% Aspem (2). 91.60%. 21.94%. Retragas. ACSM-AGAM. 43.70%. 100.00%. 74.50%. 7.91%. EPCG. Partenope Ambiente. Camuna Energia. Dolomiti Energia. 50.00%. 49.15%. ASVT (1). 8 Metamer. 39.49%. Areas of activity Energy Environment Heat and Services Networks Other Companies. (1) Of which 0.38% held through A2A Reti Gas. (2) There are put options on an additional interest in the company’s share capital. This chart shows the main shareholdings of the A2A Group. For full details of shareholdings reference should be made to Attachments 3, 4, 5 and 6.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. Rudnik Uglja ad Pljevlja.

(10) Half-yearly financial report at June 30, 2013. Financial highlights at June 30, 2013 (**). Gross operating income Net profit. Income statement figures Millions of euro. 2,845 million euro 610 million euro 133 million euro 01 01 2013 06 30 2013. 01 01 2012 06 30 2012 (a). Revenues. 2,845. 3,290. Operating expenses. (1,887). (2,517). (348). (289). Labour costs Gross operating income Depreciation, amortization, provisions and write-downs Net operating income Financial balance Other non-operating income Other non-operating expenses. 610. 484. (280). (204). 330. 280. (81). (68). 1. –. (4). –. Income before taxes. 246. 212. Income taxes. (94). (94). Net result from non-current assets sold or held for sale Minorities Group net profit for the period Gross operating income Revenues. –. 13. (19). (6). 133. 125. 21.4%. 14.7%. (a) The comparative figures for the period January - June 2012 have been recalculated to reflect the application of Revised IAS 19 “Employee Benefits”.. ____________ (**) The figures serve as performance indicators as required by CESRN/05/178/B.. 9. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. Revenues.

(11) Half-yearly financial report at June 30, 2013 Financial highlights at June 30, 2013. Balance sheet figures. 06 30 2013. 12 31 2012. Net capital employed. 7,826. 8,069. Total equity attributable to the Group and minorities. 3,752. 3,697. (4,074). (4,372). Millions of euro. Consolidated net financial position Consolidated net financial position/Equity attributable to the Group and minorities. 1.09. 1.18. Consolidated net financial position/Average market capitalisation. 2.48. 2.78. 01 01 2013 06 30 2013. 01 01 2012 06 30 2012. Financial data Millions of euro Net cash from operating activities. 497. 426. Net cash (used in) investing activities. (114). (244). Free cash flow. 383. 182. Average market capitalization in 2013. 1,646 million euro. Key figures of A2A S.p.A.. 06 30 2013. 12 31 2012. 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 2013. 06 30 2012. 0.330%. 1.163%. 107.99. 113.60. Average 6-month Euribor Average price of Brent crude (US$/bbl) Average exchange rate euro/US$ (*). 1.31. 1.30. Average price of Brent crude (euro/bbl). 82.20. 87.49. Average price of coal (euro/tonne). 63.27. 73.30. (*) Source: Italian Foreign Exchange Office. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 10.

(12) Half-yearly financial report at June 30, 2013. Shareholdings (*). Municipality of Milan. 27.5% Market 42.5%. Municipality of Brescia. 27.5%. 11. Carlo Tassara 2.5%. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. (*) Stakes higher than 2% (updated at June 30, 2013) Source: CONSOB.

(13) Half-yearly financial report at June 30, 2013. A2A S.p.A. on the Stock Exchange. A2A S.p.A. in figures (Italian Stock Exchange) 1,790. Average capitalization in the first half of 2013 (millions of euro). 1,646. Average volumes in the first half of 2013. 27,531,148. Average price in the first half of 2013 (*). 0.526. Maximum price in the first half of 2013 (*). 0.662. Minimum price in the first half of 2013 (*). 0.390. Number of shares. 3,132,905,277. (*) Euro per share Source: Bloomberg. A2A stock is also traded on the following platforms: Chi-X, Turquoise, BATS, BOAT OTC, LSE Europe OTC. A2A S.p.A. distributed a dividend of 0.026 euro per share on June 27, 2013.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 12. Market capitalization at June 30, 2013 (millions of euro).

(14) Half-yearly financial report at June 30, 2013 A2A S.p.A. on the Stock Exchange. Rating Current. Standard & Poor’s. M/L Term Rating. BBB. Short Term Rating. A–2. Outlook Moody’s. M/L Term Rating Outlook. Negative Baa3 Negative. Source: rating agencies. A2A forms part of the following indices FTSE MIB STOXX Europe EURO STOXX WisdomTree S&P Developed Ex-US 13. Ethical indices ECPI Ethical Index EMU Axia Substainable Index Solactive Climate Change Index FTSE ECPI Italia SRI Benchmark Source: Bloomberg. A2A S.p.A. is also included in the 2012 Carbon Disclosure Leadership Index and the Ethibel. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. Excellence Investment Register..

(15) Half-yearly financial report at June 30, 2013 A2A S.p.A. on the Stock Exchange. A2A in the 1st half of 2013 0.70 ,. ,. ,. ,. ,. ,. 0.65 0.60 0.55 0.50. ,. ,. ,. ,. 0.45. ,. ,. 0.40. ,. ,. 0.35. A2A vs FTSE MIB (Price 1st January 2013 = 100). Source: Bloomberg. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 14.

(16) WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. Consolidated results and report on operations.

(17) Half-yearly financial report at June 30, 2013. Summary of results, assets and liabilities and financial position. Results The figures in the income statement for the six months ended June 30, 2013 are not comparable with those for the corresponding period of the previous year due to the fact that the results of Edipower S.p.A. have been consolidated for the whole of the period in 2013 while in the corresponding period in 2012 they were only consolidated for June. The consolidation scope for the six months ended June 30, 2012 included the results of the Coriance Group which was sold in the third quarter of 2012. In compliance with IFRS 5, the group's results for that period were recognized under the item "Net result from non-current assets sold or held for sale". Further details on the above may be found in the section "Changes in scope of consolidation". Millions of euro. Revenues. 01 01 2013 06 30 2013. 01 01 2012 06 30 2012 (*). Changes. 2,845. 3,290. (445). 2,739. 3,232. (493). 106. 58. of which: - Revenues from the sale of goods and services - Other operating income Operating expenses. 48. (1,887). (2,517). 630. Labour costs. (348). (289). (59). Gross operating income. 610. 484. 126. Depreciation and amortization. (241). (193). (48). (11). (28). Provisions and write-downs. (39). Net operating income. 330. 280. Net financial expense. (88). (84). (4). 7. 16. (9). 1. –. 1. (4). –. (4). Share of results of companies at equity Other non-operating income Other non-operating expenses. 50. Income before taxes. 246. 212. Income taxes. (94). (94). Income from current operations net of taxes. 152. 118. 34. –. 13. (13). (6). (13). Net result from non-current assets sold or held for sale Minority interests. (19). Group net profit for the period. 133. 125. (*) Comparative figures for the period January-June 2012 have been restated to reflect the adoption of Revised IAS 19 “Employee Benefits”.. 34 –. 8. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 16.

(18) Half-yearly financial report at June 30, 2013 Summary of results, assets and liabilities and financial position. The Group earned revenues totaling 2,845 million euro in the period, a fall over the first half of 2012 (3,290 million euros) mainly due to the significant contraction in brokerage activities on the methane gas wholesale market. The main quantitative data for the six months ended June 30, 2013 contributing to the formation of these revenues with comparative figures are as follows: 06 30 2012. Electricity sold to wholesale and retail customers (GWh). 11,231. 10,562. Electricity sold on the Power Exchange (GWh). 6,240. 5,388. Electricity sold on foreign markets (GWh). 4,930. 6,169. Electricity sold (GWh) - EPCG. 2,208. 2,168. Gas sold (Mcm). 1,294. 2,621. Heat sold (GWht). 1,466. 1,311. Electricity distributed (GWh). 5,533. 5,737. Electricity distributed (GWh) - EPCG. 1,274. 1,311. Gas distributed (Mcm). 1,227. 1,195. Water distributed (Mcm). 32. 33. Water purified (Mcm). 19. 19. 1,284. 1,253. 06 30 2013. 06 30 2012. 3,518. 3,538. 522. 471. Hydroelectric production (GWh). 2,411. 1,440. Hydroelectric production (GWh) - EPCG. 1,760. 749. Heat production (GWht). Waste disposed of (Kton). Production details Thermoelectric production (GWh) Thermoelectric production (GWh) - EPCG. 1,290. 1,156. Electricity produced by cogeneration (GWh). 191. 185. Electricity sold from waste to energy and biogas plants (GWh). 557. 583. “Gross operating income” of 610 million euro rose by 126 million euro over the first half of 2012.. 17. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 06 30 2013.

(19) Half-yearly financial report at June 30, 2013 Summary of results, assets and liabilities and financial position. The following table sets out the changes in industrial gross operating income by sector: Millions of euro. 06 30 2013. 06 30 2012. Energy Sector. 293. 167. Environment Sector. 155. 140. Heat and Services Sector. 57. 44. Networks Sector. 121. 134. Other Services and Corporate Sector Total EBITDA. (16) 610. (1) 484. The Energy Sector posted gross operating income of 293 million euro, a rise of 126 million euro (+75%) over the same period of the previous year. The main reason for this increase was the good performance of the industrial portfolio, which despite the additional fall in demand in the second quarter of the year benefited from the greater availability of energy produced from hydroelectric sources and the resulting consequences on the end market and on energy forward sales platforms. The contribution made by the trading portfolio was also positive. The EPCG Group made a contribution of 53 million euro (-4 million euro in 2012), confirming the positive trend seen in the first quarter of the year. The sector's result also includes a provision of approximately 6 million euro made for costs of redundancy schemes. The Environment Sector achieved a margin of 155 million euro (140 million euro in the first half of 2012). This result includes an income component of 27 million euro relating to the previous period arising from the fuel cost coverage component of the CIP 6 tariff (the “CEC”) applicable for the Group's waste to energy plants; the expected reduction in this item in 2012 never materialized. The Environment Sector's margin is also due to lower revenues compared to the previous period due to the ending of the CIP 6 convention for the waste to energy plant at Corteolona (Pavia), the loss of a number of foreign contracts completed in 2012 and the effects of legislative provisions (the Ministerial Decree of November 20, 2012 and Decree Law no. 69 of June 21, 2013, the so called “Decreto del fare”) regarding the valuation of the CEC component for 2013. The gross operating income of the Heat and Services Sector totaled 57 million euro, a rise of 13 million euro over the first half of 2012. Contributing to this positive performance were the district heating segment, which in addition to its commercial development also benefited from a per capita increase in consumption due to the particularly cold weather and the business of managing heating plants owned by end customers.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 18.

(20) Half-yearly financial report at June 30, 2013 Summary of results, assets and liabilities and financial position. The gross operating income of the Networks Sector of 121 million euro shows a decrease of 13 million euro over the first half of 2012. This fall was essentially due to the provisions made for the redundancy schemes in connection with the business restructuring plan. Excluding that effect, the sector's gross operating income was essentially in line with that of the same period of the previous year. The Other Services and Corporate Sector closed the half year with a gross operating loss of 16 million euro (a loss of 1 million euro in the first half of 2012). The result of the first half year was affected by charges for provisions for non-recurring items (costs of redundancy scheme and those connected with settling disputes) and the fact that it is being compared with a result for the first half of 2012 which in turn benefited by non-recurring income arising from the favorable outcome of past disputes. “Depreciation, amortization and write-downs” amounted in total to 280 million euro (204 million euro for the six months ended June 30, 2012). The increase of 76 million euro is mainly due to the additional depreciation, amortization and write-downs arising from the consolidation of Edipower S.p.A.. 19. As a result of these changes “Net operating income” amounted to 330 million euro (280 million euro in the six months ended June 30, 2012). “Net financial expense” amounted to 88 million euro (84 million euro in the first half of 2012). Compared with the first half of 2012, debt service charges in the period in question rose by 22 million euro and there was a positive change of 47 million euro arising from the measurement of derivatives at fair value (a gain of 7 million euro in the six months ended June 30, 2013, while there was a loss of 40 million euro in the first half of 2012). The result of the first half of 2012 included the positive effect of recognizing badwill of 18 million euro arising on the first-time consolidation. The “Share of results of companies at equity” provided income of 7 million euro, while the corresponding figure for the six months ended June 30, 2012 was income of 12 million euro, mainly relating to the results of the investee Edipower S.p.A. in the period before control was acquired. “Other non-operating income/expense”, a net expense of 3 million euro (nil in the six months ended June 30, 2012) regards costs incurred by the subsidiary EPCG. “Income taxes” for the period totaled 94 million euro, in line with the corresponding period in 2012.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. of Edipower S.p.A...

(21) Half-yearly financial report at June 30, 2013 Summary of results, assets and liabilities and financial position. The “Net result from non-current assets sold or held for sale” was nil for the six months ended June 30, 2013, while there was a profit of 13 million euro in the corresponding period of the previous year, arising from the sale of the shareholding in e-Utile S.p.A. and the results of the period of the Coriance Group. After deducting the result attributable to minority interests, “Group net profit for the period” amounted to 133 million euro (125 million euro in the six months ended June 30, 2012).. The balance sheet and financial position Consolidated “Capital employed” amounted to 7,826 million euro at June 30, 2013 and was funded by equity of 3,752 million euro and net debt of 4,074 million euro. “Working capital” amounted to 696 million euro, a decrease of 127 million euro over December 31, 2012. “Net fixed capital”, which includes “Assets/liabilities held for sale”, amounted to 7,130 million euro, a decrease of 116 million euro over December 31, 2012. The “Net financial position” of 4,074 million euro fell by 298 million euro due to the generation of cash from operating activities which was partially offset by cash used in investing activities and dividends of 81 million euro distributed by the parent company.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 20.

(22) Half-yearly financial report at June 30, 2013 Summary of results, assets and liabilities and financial position. Millions of euro. 06 30 2013. 12 31 2012. Changes. Net fixed capital. 6,836. 6,969. (133). - Tangible assets. 6,231. 6,370. (139). - Intangible assets. 1,384. 1,393. (9). 226. 219. (348). (346). (2). 261. 269. (8). CAPITAL EMPLOYED. - Shareholdings and other non-current financial assets (*) - Other non-current assets/liabilities (*) - Deferred tax assets/liabilities. 7. - Provisions for risks, charges and liabilities for landfills. (597). (611). 14. - Employee benefits. (321). (325). 4. of which with counter-entry to equity. (333). (340). Working capital. 696. 823. (127). - Inventories. 263. 340. (77). - Trade receivables and other current assets (*). 2,294. 2,217. 77. - Trade payables and other current liabilities (*). (1,890). (1,816). (74). - Current tax assets/tax liabilities of which with counter-entry to equity Assets/liabilities held for sale (*) of which with counter-entry to equity. 29 (28) 294. 82 (9) 277. (53) – 17. –. –. 7,826. 8,069. Equity. 3,752. 3,697. 55. Total financial position beyond one year. 3,441. 4,305. (864). TOTAL CAPITAL EMPLOYED. 21. – (243). SOURCES OF FUNDS. Total financial position within one year Total net financial position of which with counter-entry to equity TOTAL SOURCES. 633. 67. 4,074. 4,372. 21. 23. 7,826. 8,069. 566 (298) – (243). WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. (*) Excluding balances included in the net financial position..

(23) Half-yearly financial report at June 30, 2013 Summary of results, assets and liabilities and financial position. Millions of euro. NET FINANCIAL POSITION AT THE BEGINNING OF THE PERIOD Net financial position of Edipower. (4,372) –. 01 01 2012 06 30 2012. (4,021) (959). Net income for the period (including minorities) (**). 152. 123. Depreciation and amortization. 241. 193. 5. 9. Write-downs/disposals of tangible and intangible assets Results from shareholdings at equity Net taxes paid Changes in assets and liabilities (*). (7). (16). (29). (90). 135. 207. Net cash from operating activities. 497. 426. Net cash from investing activities. (114). (244). Free cash flow. 383. 182. Dividends paid by the parent. (81). (40). Dividends paid by subsidiaries. (6). (8). (87). (48). 2. (14). Cash flow from the distribution of dividends Changes in financial assets/liabilities with counter-entry to equity NET FINANCIAL POSITION AT THE END OF THE PERIOD. (4,074). (4,860). (*) Excluding balances with counter-entry to equity. (**) The result for the period is stated excluding gains on shareholdings.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 22. 01 01 2013 06 30 2013.

(24) Half-yearly financial report at June 30, 2013. Significant events during the period. Meeting between A2A representatives and the National Trade Union Secretariats The business and financial development lines included in the 2013-15 Business Plan approved by the Management Board and Supervisory Board of A2A S.p.A. on November 8, 2012 were illustrated during the meeting that took place in February 2013 between A2A S.p.A. representatives and the National Trade Union Secretariats. In addition, a series of measures designed to contain labour costs, including the use of the social security cushions, were. 23. described. On April 19, 2013, A2A S.p.A. (also on behalf of Group companies) and the National Trade Union Secretariats signed a framework agreement on the use of the Cassa Integrazione Guadagni Ordinaria (CIGO) and of the Redundancy schemes. In summary, this agreement contains the following:. Cassa Integrazione Guadagni Ordinaria (CIGO). Cassano, Sermide, Chivasso and Turbigo. The scheme is expected to be utilized for a period of approximately forty weeks over the two years. Only the staff strictly needed for looking after the plants and for security will be kept in service during the periods when the CIGO scheme is in force. In addition, A2A S.p.A. will use a rotational arrangement, where this is possible and to the extent compatible with workers’ availability, to reduce the effect of the social security cushions to a minimum. Employees will be paid the portion of their wages and salaries for which the cost is borne by the national social security agency INPS, and A2A will take this up to 85% of their fixed, continuous remuneration.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. The Group plans to use the CIGO scheme between April 2013 and April 2015 for the plants at.

(25) Half-yearly financial report at June 30, 2013 Significant events during the period. Integration of A2A S.p.A. with Edipower S.p.A. Approximately 260 excess employees will leave the Group by means of various procedures of the redundancy schemes. These procedures will relate solely to workers who by the end of the redundancy schemes meet the requirements for receiving a pension and workers who, although not identified as being in excess, formally express their wish to be made redundant under the redundancy schemes, to the extent that technical, organization and production requirements are met. In addition to an indemnity in lieu of notice, workers will also receive the following amounts as leaving incentives: • two months’ wages plus a supplement equal to 88% of their fixed and continuous remuneration for the whole period they are included in the redundancy scheme; • those employees who elect to join the redundancy schemes on a voluntary basis by September 15, 2013 will receive another five months’ wages; •. indemnity of two months’ wages for each year of early retirement below 62 years of age; • workers already meeting the conditions to receive a pension on the other hand will only receive a leaving incentive equivalent to four months’ wages.. Mestre location In connection with the Mestre location, an agreement was signed with the trades unions on July 5, 2013 aiming to preserve the employment aspects of the area, suspending the decision to close the site. Under this agreement working hours will be reduced by an average of 45% through the use of solidarity contracts, with the resulting recourse to the use of the voluntary redundancy scheme for a limited number of workers who by following this approach will reach their pension requirements.. Harmonization of contractual arrangements and rationalization of the national collective bargaining agreements (CCNL) used Specific negotiations will begin at a Group level in June 2013 with the aim of harmonizing the economic and legislative aspects currently in place in the individual companies, including Edipower S.p.A.. In addition, the principle of “one single CCNL” for each individual company was generally acknowledged. In this case too specific talks will be initiated so that each company can identify the most suitable CCNL.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 24. workers under 62 years of age who elect for early retirement will be entitled to an additional.

(26) Half-yearly financial report at June 30, 2013 Significant events during the period. A2A S.p.A.: new 5-year revolving credit line agreement signed with a syndicate of domestic and international banks On April 22, 2013 A2A S.p.A. signed an agreement for a new 5-year revolving credit line of 600 million euro which will replace the revolving credit lines expiring over the next 24 months and unused at the date of signing the new agreement. Following the transaction, the overall available credit lines amount to 1,640 million euro. These have an average duration of 3.6 years and assure the A2A Group significant financial flexibility.. The Supervisory Board of A2A S.p.A. approves the 2012 financial statements On April 29, 2013, the Supervisory Board approved the separate financial statements and the A2A Group’s consolidated annual report for the year ended December 31, 2012 prepared by the Management Board. The Supervisory Board also approved the Management Board’s proposal to submit to the. 25. shareholders’ meeting the distribution of a dividend of 0.026 euro per ordinary share to be paid as from June 27, 2013 (ex-dividend date June 24, 2013). Subsequent to this, on June 13, 2013, the Shareholders’ Meeting of A2A S.p.A. approved the proposal for the distribution of a dividend of 0.026 euro per ordinary share to be paid as from June 27, 2013 (ex-dividend date June 24, 2013 - coupon no. 16) and having record date June 26,. Standard & Poor’s confirms the long-term credit rating of A2A S.p.A. as BBB with a negative outlook. Unchanged short-term credit rating of A-2. Standard & Poor’s has confirmed the long-term credit rating of A2A S.p.A. as BBB with a negative outlook, and its short-term rating as A-2. The confirmation of the rating rewards A2A’s debt reduction plan and the effectiveness of its financial strategy which is aimed at obtaining funds in advance for repaying its debts falling due. The rating additionally reflect a strong and stable business profile, characterized by a high level of diversification and integration and supported by a significant presence in regulated businesses.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 2013..

(27) Half-yearly financial report at June 30, 2013 Significant events during the period. A2A Energia S.p.A.: the Joint Committee set up with the Consumers’ Associations begins work As envisaged in the Self-Regulation Protocol signed on March 1, 2013 by A2A Energia S.p.A. - gas and electricity sales company of the A2A Group - and the Consumers’ Associations, the work of the Joint Committee officially got under way on May 22, 2013. The task of the Committee, consisting of three members designated by the Consumers’ Associations and three by A2A Energia S.p.A. (plus one substitute member), is to supervise compliance with the rules set out in the Self-Regulation Protocol and to ensure that the company is following proper marketing procedures. The Associations which contributed to drawing up the agreement and signed it were as follows: ACU, Adiconsum, Adoc, Adusbef, Altroconsumo, Assoutenti, Casa del Consumatore, Cittadinanzattiva, Codacons, Codici, Confconsumatori, Coniacut, Federconsumatori, Lega Consumatori, Movimento Consumatori, Movimento Difesa del Cittadino and Unione Nazionale Consumatori. 26. At the Committee’s first meeting members agreed on the modus operandi of the meetings and their frequency. The following priorities have been identified and are already included on the agenda of the initial meetings: • the formation and checking of the quality of the work and of compliance by trading partners with the contents of the Self-Regulation Protocol; • an analysis of the different circumstances which might give rise to disputes. The direction which has been taken for quite some time by A2A Energia S.p.A. to prevent unfair trading practices and protect customers therefore continues. In addition to the Joint to which the end customer is entitled, requires A2A Energia S.p.A. to send a confirmation letter to notify customers that a new supply contract has been activated and envisages specific training and possible penalties for the trading partners of A2A Energia S.p.A.. If conduct is identified which fails to comply with the requirements of the Protocol, in addition to compensation being paid directly to the end customer the Protocol also requires a fund to be set up to be used to provide information on unfair trading practices and to prevent these from occurring.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. Committee, the Self-Regulation Protocol also provides for the extension of the cooling off period.

(28) Half-yearly financial report at June 30, 2013 Significant events during the period. The project for the non-proportional demerger of Edipower S.p.A. is approved On February 6, 2013 the Iren Group announced its intention to exercise its put option on its shareholding in Edipower S.p.A., receiving a series of generation assets in compensation. On June 28, 2013, in execution of the agreements reached between A2A S.p.A. and Iren S.p.A. on the purchase of Edipower S.p.A. completed in May 2012, and as a consequence of the exercising of the rights envisaged therein by Iren S.p.A., which occurred in February 2013, the extraordinary shareholders’ meetings of Edipower S.p.A. and Iren Energia S.p.A. approved the project for the non-proportional demerger of Edipower S.p.A.. Under this operation a group of net assets is assigned to Iren Energia S.p.A. consisting of the Turbigo thermoelectric plant and the Tusciano hydroelectric complex, the staff working in those plants, the assets and liabilities attributable to the plants and the debt of 44.8 million euro. After the demerger the Iren Group will no longer be a shareholder of Edipower S.p.A.. After the time limits laid down by law are met and once the formalities required for signing the demerger deed are completed, the operation will become effective in the fourth quarter of. 27. 2013; an adjustment mechanism will come into operation based on the balance sheet at the effect date of the demerger. Following the completion of the demerger the share capital of Edipower S.p.A. will be made up as follows: A2A S.p.A. 71%, Dolomiti Energia S.p.A. 8.5%, SEL S.p.A. 8.5%, Mediobanca 5.1%, Fondazione CRT 4.3%, BPM 2.6%. As the result of this operation A2A S.p.A. will be able to fully dispatch the installed capacity of the plants of Edipower S.p.A., thereby optimizing the way in which the Group’s portfolio operational efficiency to become practical by means of a more comprehensive integration between A2A S.p.A. and Edipower S.p.A... WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. generation is managed. At the same time it will be possible for the initiatives aiming to increase.

(29) Half-yearly financial report at June 30, 2013. Significant events for the Group after June 30, 2013. Establishment of A2A Ambiente S.r.l. A2A Ambiente S.r.l. was established on July 1, 2013 as announced in the Business Plan presented in November 2012; the new entity is the biggest Italian company in the environment sector by turnover and has a prominent positioning compared to the large European groups working in the same industry. A2A Ambiente S.r.l. was established in two stages: • the first, regarding plant reorganization, was completed on July 1, 2013, and saw the transfer of the waste treatment and disposal plants from Amsa S.p.A. and Aprica S.p.A. to Ecodeco S.r.l. by means of a spin-off. Ecodeco S.r.l. subsequently changed its name to A2A Ambiente S.r.l.; post spin-off Amsa S.p.A. and Aprica S.p.A. will continue to operate in their local areas and with their trade names, carrying out their core business of urban hygiene and maintaining unchanged their relationship with their municipality customers (around 160, including those also served by the associate G.Eco S.r.l.) and the high level of services provided to residents, who will therefore continue to interface with these companies in the same way as present. Amsa S.p.A. and Aprica S.p.A. will accordingly deliver waste to A2A Ambiente S.r.l. which will be responsible for its treatment and energy enhancement, thereby obtaining more than 1,400 GWh of electricity and over 1,000 GWh of thermal energy to be utilized in district heating for urban use; • the second phase will involve the simplification of the A2A Group’s corporate structure, and this is expected to be completed by the end of 2013. The shareholdings in Amsa S.p.A., Aprica S.p.A. and Partenope Ambiente S.p.A. (which manages the Acerra waste to energy plant and the waste shredding, sifting and packaging plant at Caivano), wholly owned by the parent A2A S.p.A., will be contributed to A2A Ambiente S.r.l.. The aim of setting up the new company is to combine in one single entity an array of plants that is unique in the Italian market and to lay the foundations for a significant rationalization and. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 28.

(30) Half-yearly financial report at June 30, 2013 Significant events for the Group after June 30, 2013. optimization of the A2A Group’s environmental hub, which currently consists of four companies (Amsa S.p.A., Aprica S.p.A., Ecodeco S.r.l. and Partenope Ambiente S.p.A.), thus achieving economies of scale by capitalizing on the integration of across the board activities and improving the planning of waste flows. On completion of the operation A2A Ambiente S.r.l., wholly owned by the parent A2A S.p.A., will have a total EBITDA of over 250 million euro and will be able to count on the collaboration of around 600 employees (over 4,000 including those working in the subsidiaries). A2A Ambiente S.r.l. will be able to grow further in a market that is undergoing considerable evolution; in fact with approximately 50% of its waste disposed of in landfills, there is a very large gap in terms of plants between Italy and the main European countries. Abroad, the company will be able to continue taking advantage of its know-how both in the markets where it already has a presence (United Kingdom, Spain, Greece) and in new geographical areas.. Issue carried out on the European bond market for a total of 500 million euro and an offer is made for the repurchase of the bonds redeemable in 2014 and 2016. 29. On July 3, 2013, A2A S.p.A. issued bonds of 500 million euro on the European market having a term of seven and a half years as part of the Euro Medium Term Notes Program of 2 billion euro approved by the Management Board on September 19, 2012. The issue was addressed exclusively to institutional investors. The newly-issued bonds will be governed by English law and from July 10, 2013 will be traded. Consistent with the Group’s financial strategy, which is aimed at extending the average debt term and optimizing the timing of the due dates, A2A S.p.A. made an offer for the partial repurchase of bonds redeemable in 2014 and 2016, being of amounts of 500 and 1,000 million euro respectively. On July 9, 2013 A2A S.p.A. announced the final results and the pricing of the partial repurchase offer addressed to the holders of bonds falling due in 2014 and 2016. As stated in the Tender Offer Memorandum, the repurchase price for the bonds falling due in 2014 and 2016 was 103.8% and 107% respectively.. A2A S.p.A. sells five small hydroelectric and flowing water plants On July 5, 2013 A2A S.p.A. completed the sale to the Swiss group BKW of the wholly owned company Chi.Na.Co S.r.l., to which A2A S.p.A. had contributed five small hydroelectric and flowing water plants having installed power of approximately 8 MW.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. on the Luxembourg stock exchange..

(31) Half-yearly financial report at June 30, 2013 Significant events for the Group after June 30, 2013. This transaction is based on consideration of 38 million euro, to which a further 1.6 million euro could be added on the occurrence of certain conditions by the end of next year. In 2012 the plants produced 37 GWh of electricity, with revenues of around 4 million euro and an EBITDA of 3.1 million euro. A2A S.p.A., which was supported in the sales tender process by Banca IMI, considered that the best offer was made by BKW not only from an economic point of view but also in terms of continuity of industrial management of the sold plants, taking into account the local context in which it is being carried out. BKW is a leading operator in the sector, with over 3,000 employees and has had a direct presence in Italy for more than 13 years. By means of this sale A2A S.p.A. is continuing with the steps it is taking to rationalize its industrial portfolio and reduce its debt, consistent with the 2013-2015 Business Plan.. The Acerra waste to energy plant treated 314,000 tonnes of waste in the first half of 2013, confirming the high efficiency standards that have been reached. At the same time, thanks to the energy enhancement of the waste, 278 GWh of electricity was put into the grid (equal to the energy needs, in the half year, of 200,000 households) and the consumption of 52,000 toe (tonnes of oil equivalent) was avoided. The waste to energy plant confirmed its excellent results also in terms of atmospheric emissions, which thanks to the modern technologies deployed in purifying combustion gases led to values well below the legal limits and the stricter limits set by the Integrated Environmental Authorization. Scheduled maintenance was carried out during the half year on the combustion lines and the energy production section making up the plant. More specifically, these activities regarded checking the combustion systems, the system for recovering energy from the waste and the fume purification systems. All the maintenance, typical in these kinds of plants, was carried out to ensure the reliability and efficiency of the whole system and the plant’s reduced emission levels over time.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 30. The first half of 2013 for the Acerra waste to energy plant: 100% of production capacity confirmed. Atmospheric emissions well below the legal limits.

(32) Half-yearly financial report at June 30, 2013. Outlook for operations. The Group’s positive economic performance in the first half year leads management to believe that the A2A Group will be able to achieve an industrial result (EBITDA) in 2013 that exceeds that of the previous year (1,068 million euro). Consistent with the results obtained in the last 5 quarters, management will continue to be committed in the second half of the year to seeking a further reduction in debt levels.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 31.

(33) WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48.

(34) WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. Consolidated financial statements.

(35) Half-yearly financial report at June 30, 2013. Consolidated balance sheet (1) Assets. Millions of euro. Note. 06 30 2013. 12 31 2012. 06 30 2012 (*). NON-CURRENT ASSETS 1. 6,231. 6,370. 6,716. Intangible assets. 2. 1,384. 1,393. 1,392. Shareholdings carried according to equity method. 3. 217. 210. 229. Other non-current financial assets. 3. 54. 53. 50. Deferred tax assets. 4. 261. 269. 289. Other non-current assets. 5. 79. 89. 163. 8,226. 8,384. 8,839. TOTAL NON-CURRENT ASSETS CURRENT ASSETS Inventories. 6. 263. 340. 354. Trade receivables. 7. 1,849. 1,907. 1,912. Other current assets. 8. 473. 318. 352. Current financial assets. 9. 81. 27. 97. Current tax assets. 10. 49. 90. 8. Cash and cash equivalents. 11. 710. 553. 269. 3,425. 3,235. 2,992. 346. 326. 195. 11,997. 11,945. 12,026. TOTAL CURRENT ASSETS NON-CURRENT ASSETS HELD FOR SALE. 12. TOTAL ASSETS (1). As required by Consob Resolution no. 17221 of March 12, 2010 the effects of related party transactions on the consolidated financial statements are provided in the financial statements in section 0.2 and commented upon in Note 39. As required by Consob Communication no. DEM/6064293 of July 28, 2006 the effects of significant non-recurring events and transactions on the consolidated financial statements are provided in Note 39.. (*). Comparative figures for the six months ended June 30, 2012 have been recalculated to reflect the application of Revised IAS 19 “Employee Benefits”.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 34. Tangible assets.

(36) Half-yearly financial report at June 30, 2013 Consolidated balance sheet. Equity and liabilities. Millions of euro. Note. 06 30 2013. 12 31 2012. 06 30 2012 (*). Share capital. 13. 1,629. 1,629. 1,629. (Treasury shares). 14. (61). (61). Reserves. 15. EQUITY. Net profit for the year Net profit for the period. 16. Equity pertaining to the Group Minority interests. 17. Total equity. (61) 1,189. 1,018. 1,076. –. 260. –. 133. –. 125. 2,890. 2,846. 2,769. 862. 851. 849. 3,752. 3,697. 3,618. 35. LIABILITIES. Non-current financial liabilities. 18. 3,506. 4,371. 4,762. Employee benefits. 19. 321. 325. 318. Provisions for risks, charges and liabilities for landfills. 20. 597. 611. 581. Other non-current liabilities. 21. 407. 413. 378. 4,831. 5,720. 6,039. Total non-current liabilities CURRENT LIABILITIES Trade payables. 22. 1,158. 1,332. 1,126. Other current liabilities. 22. 732. 486. 514. Current financial liabilities. 23. 1,452. 653. 514. Tax liabilities. 24. 20. 8. 57. Total current liabilities. 3,362. 2,479. 2,211. Total liabilities. 8,193. 8,199. 8,250. LIABILITIES DIRECTLY ASSOCIATED WITH NON-CURRENT ASSETS HELD FOR SALE TOTAL EQUITY AND LIABILITIES (*). 25. 52. 49. 158. 11,997. 11,945. 12,026. Comparative figures for the six months ended June 30, 2012 have been recalculated to reflect the application of Revised IAS 19 “Employee Benefits”.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. NON-CURRENT LIABILITIES.

(37) Half-yearly financial report at June 30, 2013. Consolidated income statement (1). Millions of euro. Note. 01 01 2013 06 30 2013. 01 01 2012 06 30 2012 (*). 01 01 2012 12 31 2012. Revenues Revenues from the sale of goods and services. 2,739. Other operating income Total revenues. 27. 3,232. 6,281. 106. 58. 199. 2,845. 3,290. 6,480. 1,775. 2,384. 4,559. Operating expenses Expenses for raw materials and services Other operating expenses. 112. 133. 251. 28. 1,887. 2,517. 4,810. Labour costs. 29. 348. 289. 602. Gross operating income. 30. 610. 484. 1,068. Depreciation, amortization, provisions and write-downs. 31. 280. 204. 567. Net operating income. 32. 330. 280. 501. Total operating expenses. Financial balance Financial income. 30. 42. 58. Financial expense. 118. 126. 251. Affiliates. 7. 16. 13. (81). (68). (180). 34. 1. –. 3. 34. (4). –. (6). Total financial balance. 33. Other non-operating income Other non-operating expenses Income before taxes (1). 246. 212. 318. As required by Consob Resolution no. 17221 of March 12, 2010 the effects of related party transactions on the consolidated financial statements are provided in the financial statements in section 0.2 and commented upon in Note 39. As required by Consob Communication no. DEM/6064293 of July 28, 2006 the effects of significant non-recurring events and transactions on the consolidated financial statements are provided in Note 39.. (*). Comparative figures for the period January-June 2012 have been recalculated to reflect the application of Revised IAS 19 “Employee Benefits”.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 36.

(38) Half-yearly financial report at June 30, 2013 Consolidated income statement. Millions of euro. Note. Income taxes. 35. 01 01 2013 06 30 2013. 01 01 2012 06 30 2012 (*). 01 01 2012 12 31 2012. 94. 94. 128. 152. 118. 190. –. 13. 81. Net profit. 152. 131. 271. Minorities. (19). (6). Income after taxes from operating activities Net result from non-current assets sold or held for sale. Group net profit for the period/year. 36. 37. (11). 133. 125. 260. 0.0428. 0.0401. 0.0838. 37. Earnings (loss) per share (in euro): – basic – basic, from operating activities. 0.0428. 0.0361. 0.0579. – basic, from activities held for sale. 0.0000. 0.0041. 0.0259. – diluted. 0.0428. 0.0401. 0.0838. – diluted, from operating activities. 0.0428. 0.0361. 0.0579. – diluted, from activities held for sale. 0.0000. 0.0041. 0.0259. Comparative figures for the period January-June 2012 have been restated to reflect the adoption of Revised IAS 19 “Employee Benefits”.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. (*).

(39) Half-yearly financial report at June 30, 2013. Consolidated statement of comprehensive income. Millions of euro. Net income/(loss) for the period/year (A). 152. 06 30 2012 (*). 12 31 2012. 131. 271. Actuarial gains/(losses) on employee benefits booked as net equity. 4. (12). (33). Tax effect of other actuarial gains/(losses). (1). 3. 8. Total actuarial gains/(losses) net of tax effect (B) Effective part of gains/(losses) on cash flow hedges Tax effect of other gains/(losses) Total other gains/(losses) net of the tax effect of companies consolidated on a line-by-line basis (C) Other gains/(losses) of companies valued at equity net of the tax effect (D) Total comprehensive income/(loss) (A) + (B) + (C) + (D). 3. (9). (25). (16). (12). (54). 6. 5. 18. (10). (7). (36). –. 1. 2. 145. 116. 212. 125. 108. 201. 20. 8. 11. Total comprehensive income/(loss) attributable to: Shareholders of the parent company Minority interests. (*) Comparative figures for the period January-June 2012 have been restated to reflect the adoption of Revised IAS 19 “Employee Benefits”.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 38. 06 30 2013.

(40) Half-yearly financial report at June 30, 2013. Consolidated cash flow statement. Millions of euro CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD/YEAR Edipower S.p.A. liquidity CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD/YEAR. 06 30 2013. 12 31 2012. 06 30 2012. 553. 147. 147. –. 89. 89. 553. 236. 236. Operating activities Net income for the period/year (**). 152. 192. 123. Tangible assets depreciation. 210. 417. 160. 31. 72. 33. Intangible assets amortization Fixed assets write-downs Result from shareholdings in companies carried at equity Net taxes paid (a). (29). Changes in assets and liabilities before tax (b). 135. 5. 10. 9. (7). (13). (16). (251). 39. (90). 534. 207. Total changes in assets and liabilities (a+b) (*). 106. 283. 117. Cash flow (net) from operating activities. 497. 961. 426. Investments in tangible assets. (89). (275). Investments in intangible assets and goodwill. (29). (85). (41). Investments in shareholdings and securities (*). (3). (130). (125). Disposal of fixed assets and shareholdings. 4. 234. 11. Dividends received from shareholdings carried at equity and other shareholdings. 3. 6. 6. Investment activities. Cash flow (net) from investment activities. (114). (250). (244). FREE CASH FLOW. 383. 711. 182. (75). 151. 179 (222). Financing activities Change in financial assets (*) Change in financial liabilities (*). 10. (324). Net financial expenses paid. (74). (173). (58). Dividends paid by parent company. (81). (40). (40). (6). (8). (8). Dividends paid by subsidiaries Cash flow from financing activities. (226). (394). (149). CHANGE IN CASH AND CASH EQUIVALENTS. 157. 317. 33. CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD/YEAR. 710. 553. 269. (*) Cleared of balances in return of shareholders’ equity and other consolidated balance sheet items. (**) Net profit for the period/year is exposed net of gains on shareholdings’ and fixed assets’ disposals.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. (95).

(41) Half-yearly financial report at June 30, 2013. Statement of changes in Group equity. Description Millions of euro. Net equity at December 31, 2011 (**). Share capital. Treasury shares. Cash Flow Hedge. Note 13. Note 14. Note 15. 1,629. (61). 20. Changes in the first half of 2012 2011 profit allocation Distribution of dividends IAS 19 reserve (*) IAS 32 and IAS 39 reserves (*). (8). Put option on Delmi S.p.A. shares (***) Other changes Group and Minorities net profit for the period Net equity at June 30, 2012 (**). 1,629. (61). 12. Changes in the second half of 2012 IAS 19 reserve (*) IAS 32 and IAS 39 reserves (*). (28). Put option on Delmi S.p.A. shares (***) Put option on Aspem S.p.A. shares Other changes Group and Minorities net profit for the period Net equity at December 31, 2012. 1,629. (61). (16). Changes in the first half of 2013 2012 profit allocation Distribution of dividends IAS 19 reserve (*) IAS 32 and IAS 39 reserves (*). (11). Put option on Edipower S.p.A. shares Other changes Group and Minorities net profit for the period Net equity at June 30, 2013. 1,629. (61). (*) These form part of the statement of comprehensive income. (**) Net equity at December 31, 2011 and at June 30, 3012 reflects the application of IAS 19 Revised Employee Benefits with the evidence of the reserve regarding the effects of actuarial gains-losses net of the tax effect. (***) On January 1, 2013 the merger of Delmi S.p.A. into Edipower S.p.A. became effective.. (27). WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 40.

(42) Half-yearly financial report at June 30, 2013 Statement of changes in Group equity. Group net income for the period/year. Note 15. Note 16. 1,602. (423). (423). Total equity pertaining to the Group. Note 17 2,767. 826. (8). (48). 2. (6). (9) (8). (62) (4). (9). (62). (131). (193). (4). 154. 150. 125. 125. 6. 131. 125. 2,769. 849. 3,618. (16). (16). (1). (28) (22). (22). 8. 260. 8. (17) (28). 4. (18). (1). (1). (5). 3. 135. 135. 5. 140. 260. 2,846. 851. 3,697. (260). (81). (81). 3. (6). (87). 1. (10). 3 (11). (3). 3. (3). 3. 1,216. 3,593. 41 (40). (9). 1,034. Total net shareholders’ equity. 423. (40). 1,064. Minority interests. 3. (3) (3). –. 133. 133. 19. 152. 133. 2,890. 862. 3,752. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. Other reserves and retained earnings.

(43) Half-yearly financial report at June 30, 2013. Balance sheet pursuant to Consob Resolution no. 17221 of March 12, 2010. Assets. Millions of euro. 06 30 2013. of which 12 31 2012 of which 06 30 2012 of which Related Related (1) Related Parties Parties Parties (note n. 39) (note n. 39) (note n. 39). NON-CURRENT ASSETS Tangible assets. 6,231. Intangible assets. 1,384. Shareholdings carried according to equity method. 1,393. 217. 217. Other non-current financial assets. 54. 6. Deferred tax assets. 261. Other non-current assets TOTAL NON-CURRENT ASSETS. 6,716 1,392. 210. 210. 53. 5. 269. 229. 229. 50. 6. 289. 79. 89. 163. 8,226. 8,384. 8,839. 263. 340. 354. CURRENT ASSETS Inventories Trade receivables Other current assets. 1,849. Current financial assets. 81. Current tax assets. 49. Cash and cash equivalents TOTAL CURRENT ASSETS NON-CURRENT ASSETS HELD FOR SALE TOTAL ASSETS (1). 171. 473. 1,907. 127. 318 3. 27 90. 1,912. 5. 97. 710. 553. 269. 3,235. 2,992. 346. –. 84. 8. 3,425. 11,997. 154. 352. 326. 195. 11,945. 12,026. The comparative figures for the period January-June 2012 have been restated to reflect the adoption of Revised IAS 19 “Employee Benefits”.. 2. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 42. 6,370.

(44) Half-yearly financial report at June 30, 2013 Balance sheet pursuant to Consob Resolution no. 17221 of March 12, 2010. Equity and liabilities. Millions of euro. 06 30 2013. of which 12 31 2012 of which 06 30 2012 of which Related Related (1) Related Parties Parties Parties (note n. 39) (note n. 39) (note n. 39). EQUITY Share capital (Treasury shares) Reserves Net profit for the year Net profit for the period Equity pertaining to the Group Minority interests Total equity. 1,629. 1,629. (61). (61). 1,189. 1,018. 1,629 (61) 1,076. –. 260. –. 133. –. 125. 2,890. 2,846. 2,769. 862. 851. 849. 3,752. 3,697. 3,618. 3,506. 4,371. 4,762. 43. LIABILITIES NON-CURRENT LIABILITIES. Employee benefits. 321. Provisions for risks, charges and liabilities for landfills. 597. 325 1. 611. 318 4. 581. 2. Other non-current liabilities. 407. 413. Total non-current liabilities. 4,831. 5,720. 4. 6,039. 378 2. 1,126. 26. 514. 8. CURRENT LIABILITIES Trade payables Other current liabilities Current financial liabilities Tax liabilities. 1,158. 39. 1,332. 34. 732. 9. 486. 8. 1,452. 653. 514. 20. 8. 57. Total current liabilities. 3,362. 2,479. 2,211. Total liabilities. 8,193. 8,199. 8,250. 52. 49. 158. 11,997. 11,945. 12,026. LIABILITIES DIRECTLY ASSOCIATED WITH NON-CURRENT ASSETS HELD FOR SALE TOTAL EQUITY AND LIABILITIES (1). The comparative figures for the period January-June 2012 have been restated to reflect the adoption of Revised IAS 19 “Employee Benefits”.. 76. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. Non-current financial liabilities.

(45) Half-yearly financial report at June 30, 2013. Income statement pursuant to Consob Resolution no. 17221 of March 12, 2010. Millions of euro. 01 01 2013 06 30 2013. of which 01 01 2012 of which 01 01 2012 Related 06 30 2012 Related 12 31 2012 Parties (1) Parties (note 39) (note 39). of which Related Parties (note 39). Revenues Revenues from the sale of goods and services Other operating income Total revenues. 259. 3,232. 486. 6,281. 106. 58. 199. 2,845. 3,290. 6,480. 761. Operating expenses Expenses for raw materials and services Other operating expenses Total operating expenses. 1,775. 22. 112. 4. 1,887. 2,384. 376. 133. 4. 2,517 2. 289. 4,559. 447. 251. 9. 4,810. Labour costs. 348. Gross operating income - EBITDA. 610. 484. 2. 1,068. 602. Depreciation, amortization, provisions and write-downs. 280. 204. 567. Net operating income - EBIT. 330. 280. 501. 3. 2. Financial balance Financial income. 30. Financial expense. 118. Affiliates Total financial balance Other non-operating income Other non-operating expenses Income before taxes. 7. 13. 42 126. 7. 16. (81). (68). 1. –. (4) 246. 8. – 212. 16. 58 251. 1. 13. 13. (180) 3 (6) 318. Income taxes. 94. 94. 128. Income after taxes from operating activities. 152. 118. 190. Net result from non-current assets sold or held for sale. –. 13. 81. Net profit. 152. 131. 271. Minorities. (19). GROUP NET PROFIT FOR THE PERIOD/YEAR. 133. (6) 125. 7. (11) 260. (1) Comparative figures for the period January-June 2012 have been restated to reflect the adoption of Revised IAS 19 “Employee Benefits”.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 44. 2,739.

(46) WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. Notes to the Half-yearly financial report.

(47) Half-yearly financial report at June 30, 2013. 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, in particular in Montenegro especially following the acquisition 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, distribution and sale of heat through district heating networks; • waste management (from collection and sweeping to disposal) and the construction and management of integrated waste disposal plants and systems, also making these available for other operators; • integrated water cycle management.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 46.

(48) Half-yearly financial report at June 30, 2013. The Half-yearly financial report. The Half-yearly financial report (in the following the “Half-yearly report”) of the A2A Group at June 30, 2013 is presented in millions of euro; the euro is also the functional currency of the economies in which the Group operates. The Half-yearly report of the A2A Group at June 30, 2013 has been prepared: • in compliance with Legislative Decree no. 58/1998 (art. 154-ter) as amended and with the Issuers’ Regulations published by Consob; • in accordance with the International Financial Reporting Standards (IFRS) issued by the. 47. International Accounting Standard Board (IASB) and approved by the European Union and in particular IAS 34. IFRS means all the revised international accounting standards (IAS) and all the interpretations of the International Financial Reporting Interpretations Committee (IFRIC), formerly known as the Standing Interpretations Committee (SIC). In preparing the Half-yearly report the Group has applied the same principles as those used in the preparation of the consolidated annual financial report at December 31, 2012. The principles and interpretations described in detail in the paragraph below “Changes in. This Half-yearly report at June 30, 2013, which has been subject to a review by the auditors, was approved by the Management Board on July 31, 2013, which authorized publication.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. accounting principle” were adopted for the first time on January 1, 2013..

(49) Half-yearly financial report at June 30, 2013. Financial statements. The Group has adopted a format for the balance sheet which presents current and noncurrent assets and current and non-current liabilities as separate classifications, as required by paragraphs 60 and following of IAS 1 (Revised). The income statement is presented by nature, a format which is considered more representative than a presentation by function. The selected format is in agreement with the presentation used by the Group’s major competitors and in line with international practice. The results of ordinary operations are shown in the income statement separately from income or expense deriving from transactions which 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 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 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, 2012. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 48.

(50) Half-yearly financial report at June 30, 2013. Basis of preparation. The Half-yearly report at June 30, 2013 has been prepared on a historical cost basis, with the exception of those items which under IFRS must be or can be measured at fair value, as discussed in further detail in the accounting policies. The consolidation principles, the accounting principles, the accounting policies and the methods of measurement used in the preparation of the Half-yearly report are consistent with those used to prepare the annual consolidated financial statements at December 31, 2012.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 49.

(51) Half-yearly financial report at June 30, 2013. Changes in accounting standards. The accounting principles adopted for the first half of 2013 are essentially the same as those used in the prior year, as indicated below in the paragraph below “Accounting principles, amendments and interpretations applied by the Group from the current year”. In particular, since reporting is based on an interim period, the requirements of IAS 34 “Interim Financial Reporting” are complied with. A summary is provided in the following paragraphs “Accounting principles, amendments and interpretations approved by the European Union but applicable after June 30, 2013” and “Accounting principles, amendments and interpretations not yet approved by the European Union” of the changes that will be adopted in future periods, stating the expected effects on the A2A Group’s half-yearly financial report to the extent this is possible.. Accounting principles, amendments and interpretations applied by the Group from the current year A series of amendments introduced by international accounting standards and interpretations have been applied, none of which however has led to a significant effect on the Group’s financial statements. The main changes are described in the following: • IAS 1 - “Presentation of Financial Statements” - presentation of Items of Other Comprehensive Income: this amendment, applicable from July 1, 2012, was issued on June 5, 2012 and regards the classification of items in “other comprehensive income” on the basis of whether they are potentially reclassifiable to profit or loss subsequently; • IFRS 1 “Government Loans”: this amendment, applicable from January 1, 2013, was issued on March 12, 2012 and regards government loans at a below-market rate of interest. More specifically, the amendment requires that a first-time adopter must classify all outstanding government loans received as a financial liability or an equity instrument in accordance with IAS 32 “Financial Instruments: Presentation”. In addition, the amendment states that a first-time adopter may not recognize the corresponding benefit of a government loan at a below-market rate of interest as a government grant; • IFRS 7 “Financial Instruments: Disclosures”: on December 16, 2011 the IASB issued an amendment to this standard “Disclosures - Offsetting Financial Assets and Financial. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 50.

(52) Half-yearly financial report at June 30, 2013 Changes in accounting standards. Liabilities” which is applicable retrospectively for annual periods beginning on or after January 1, 2013. This amendment requires information to be provided on the effects or potential effects on the statement of financial position of netting agreements for financial assets and liabilities; • IFRS 13 “Fair Value Measurement”: this standard was issued by the IASB on May 12, 2011 and is applicable from January 1, 2013. IFRS 13 defines fair value, provides guidelines on how to measure it and introduces disclosure requirements. The standard does not specify when fair value measurement is applicable but establishes how it should be calculated when it is required by other standards. The new standard applies to all transactions, both financial and non-financial, for which international accounting standards require or permit fair value measurements, with the exception of transactions recognized on the basis of IFRS 2 “Share-based Payments”, lease agreements governed by IAS 17 “Leases” and transactions recognized on the basis of “net realizable value” as specified in IAS 2 “Inventories” and “value in use” as specified 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 at the. 51. measurement date”. If transactions can be observed directly in the marketplace, fair value can be measured fairly easily; where this is not possible, valuation techniques are used. The standard describes three of these techniques which can be used to measure fair value; the first 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 consists in discounting future cash inflows and outflows; the third is the cost approach, which requires an entity to produce a value that reflects the amount that would be required currently to replace the service capacity of an asset. hierarchy of three levels of fair value which vary depending on the input used in the valuation techniques, as stated in IFRS 7 “Financial Instruments: Disclosures”, to all assets and liabilities within its scope of application. Certain disclosure requirements vary depending on whether the fair value measurement is carried out on a recurring or non-recurring 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; • IAS 12 “Income Taxes: on December 20, 2010, the IASB issued an amendment, applicable retrospectively from January 1, 2013, which clarifies how to determine deferred taxation when investment property is measured at fair value. The amendment introduces the requirement that deferred taxation relating to an investment property measured using the fair value model in IAS 40 “Investment Property” should be calculated on the presumption. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. As regards the disclosures to be provided in the financial statements, IFRS 13 extends the.

(53) Half-yearly financial report at June 30, 2013 Changes in accounting standards. that the carrying amount of that asset will be recovered entirely through sale. As a result SIC 21 “Income Taxes - Recovery of Non-Depreciable Assets” is no longer applicable to that amendment. The standard is applicable retrospectively with no requirement to restate comparative figures; • IFRIC 20 “Stripping Costs in the Production Phase of a Surface Mine”: this interpretation was issued by the IASB on October 19, 2011 and is applicable from January 1, 2013; 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 different benefits accruing from waste removal activities, which may consist of the generation of usable ore or improved access to real reserves. In the former case, the materials constitute inventory and the costs in question are therefore accounted for as such (in compliance with IAS 2 “Inventories”). In the latter case, the costs are accounted for as non-current assets (stripping activity assets) provided that the future economic benefits associated with the improved access to the ore will in all likelihood flow to the entity. On March 28, 2013 a set of proposed amendments to IFRSs “Annual Improvements to IFRSs 2009 - 2011 Cycle” was approved which had been issued by the IASB in May 2012; these amendments are applicable retrospectively from January 1, 2013 and more specifically regard: a) IAS 1 “Financial Instruments: Presentation” sets out the criteria for presenting current and non-current liabilities as separate classifications in the balance sheet; b) IAS 16 “Property, Plant and Equipment” clarifies that servicing equipment shall be classified as property, plant and equipment if used for more than one year, otherwise such items shall be classified as inventory; c) IAS 32 “Financial Instruments: Presentation” clarifies the fiscal treatment for direct taxation arising from distributions to equity holders and from transaction costs on equity instruments, stating that this should follow the rules of IAS 12 “Income Taxes”; d) IAS 34 “Interim Financial Reporting” addresses segment reporting disclosures; in particular, it clarifies that total assets for a particular reportable segment shall only be reported if that information is regularly provided to the entity’s chief operating decision maker and if there has been a material change from the amount disclosed in the last financial statements for that reportable segment. The amendment to IAS 19 “Employee Benefits” was approved on June 6, 2012 and is applicable from January 1, 2013, and the A2A Group has early applied this from January 1, 2012. The changes made in the amendment may be grouped into three main categories: (i) recognition and presentation in the financial statements; (ii) disclosures; (iii) additional changes.. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. 52.

(54) Half-yearly financial report at June 30, 2013 Changes in accounting standards. The first category of changes concerns defined benefit plans. In particular, the corridor method used as a means of recognizing actuarial gains and losses has been eliminated, with the simultaneous requirement being introduced to recognize “remeasured” items (actuarial gains and losses) in other comprehensive income. The change in the defined benefit obligation is then separated into the following three components in the income statement presentation: 1. an operating component (service cost); 2. a financial component (finance cost); 3. a measurement component (remeasurement cost). As far as disclosures are concerned, in addition to the elimination of the disclosure relating to the deferral of the recognition of income components (which is no longer required following the elimination of the option to select the corridor method), disclosures are required of the features of the plans and the related amounts recognized in the financial statements, the risks involved in the plans, which includes a sensitivity analysis for the demographic risk, and details of any participation in multiemployer pension plans. 53. Accounting principles, amendments and interpretations approved by the European Union but applicable after June 30, 2013 The following principles and interpretations already approved by the European Union and currently not applied by the Group could be adopted in the next few years if the conditions arise: • IFRS 10 “Consolidated Financial Statements” was issued by the IASB on May 12, 2011 and is applicable from January 1, 2014. Unlike IAS 27 “Consolidated and Separate Financial operating policies of an entity so as to obtain benefits from its activities, in IFRS 10 an investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and when at the same time it has the ability to affect those returns through its power over the investee. An investor controls an investee if and only if the investor has all of the following: 1. the power to direct the relevant activities of the investee; 2. the exposure to future returns from the investee; 3. the ability to use its power over an investee to affect the investor’s returns. The power to direct activities that significantly affect the results of the subsidiary (relevant activities) may more easily be exercised through voting rights (including potential voting rights), but also through contractual arrangements. When control is exercised through voting rights, relevant activities are represented by operating activities (development,. WorldReginfo - 9bad69de-a7cb-4f46-94d1-86bc6c8f0f48. Statements”, in which control is defined as the power to govern the financial and.