Separate and Consolidated Interim Financial Statements of Rai as at 30 June 2016 Interim Financial Statements as at 30 June 2016 Table of Contents Report on Operations 05 Rai Interim Financial Statements as at 30 June 2016 79 Consolidated Interim Financial Statements as at 30 June 2016 143 Corporate Directory 204 Rai Financial Consolidated Financial Introduction Statements Statements 5 Report on Operations Corporate Bodies 6 Organisational Structure 7 Map of Rai’s offer 8 Highlights 10 Introduction 11 Regulatory framework and Corporate Governance 15 Report on the Rai Group’s operations 21 Rai Financial Consolidated Financial Introduction 6 Statements Statements Report on Operations Corporate Bodies Board of Directors Chairman Monica Maggioni Directors Rita Borioni Arturo Diaconale Marco Fortis Carlo Freccero Guelfo Guelfi Giancarlo Mazzuca Paolo Messa Franco Siddi Secretary Nicola Claudio Board of Statutory Auditors until 23 June 2016 from 24 June 2016 Chairman Carlo Cesare Gatto Biagio Mazzotta Statutory Auditors Domenico Mastroianni Anna Maria Magro Maria Giovanna Basile Roberto de Martino Alternate Statutory Pietro Floriddia Pietro Floriddia Auditors M.M. Assunta Protopapa M.M. Assunta Protopapa General Manager Antonio Campo Dall’Orto Independent Auditors PricewaterhouseCoopers Rai Financial Consolidated Financial Introduction Statements Statements 7 Report on Operations Organisational Structure (chart) Board of Directors Chairman of the Board of Directors Internal Supervisory Auditing Board General Manager Legal (1) Affairs CFO Human Resources (2) Communication, and Organisation CTO Other Corporate Public, Chief and Support Institutional and Security Functions International Officer (3) Relations Editorial Area and News • General interest TV channels Semi-general interest TV channels Chief Digital • • Themes TV channels Officer (4) • News News Editorial • Rai Fiction Director (5) • Radio Director - Channels for the Editorial - Public Service Channels Coordination - News of TV Schedules Rai Cinema SpA Commercial and Advertising Area Rai Com SpA Rai Pubblicità SpA Broadcasting Rai Way SpA (6) (1) Strategic Planning and Management Control, Administration and Finance, Real Estate and Services, Coordination of Regional and Foreign Offices, Licence Fee, Tax Affairs, Regulatory and Methodological Support and PMO functions report to the Chief Financial Offer. (2) TV Production, Quality and Planning, Research and Technological Innovation Centre, Frequency Planning and Spectrum Management, Satellite Structure, ICT functions report to the Chief Technology Officer. (3) Security & Safety Functions report to the Chief Security Officer. (4) Digital Media, Teche Archives and Public Interest Services functions report to the Chief Digital Officer. (5) News programmes functions report to the News Editorial Director. (6) Listed since 19 November 2014. Although this Company is managed and coordinated by Rai, it operates autonomously, generating revenues from its clients and using its own expertise, technologies, human and financial resources. Rai Financial Consolidated Financial Introduction 8 Statements Statements Report on Operations Map of Rai’s offer Cinema • Rai Cinema • 01 Distribution International channels • Rai Italia • Rai World Premium • Rai News 24 Internet Rai Publishing • Rai Eri Apps • Raiplay Web • RadioRai • Rai News • Rai Storia • Rai Euro 2016 • Rai Letteratura • Rai Arte • Rai Filosofia Home video Rai.it • Rai Com • 01 Distribution • Rai Scuola • Rai Com • Ray Rainews.it Footnotes: (1) Only viewable by satellite on the Tivù Sat platform. (2) Only viewable on DTT in the areas reached by Multiplex 4. (3) Only viewable on the Tivù Sat satellite platform. (4) Viewable on DTT in the areas reached by Multiplex 5 and on the Tivù Sat satellite platform. (5) Viewable on the Tivù Sat and Sky satellite platforms. (6) Viewable on DTT in the areas reached by Multiplex 4 and on the Tivù Sat satellite platform. (7) Also usable through DTT, satellite and MF analogue platform. Rai.tv (8) Also usable through digital satellite. (9) All channels are available in DAB+ mode in the areas served and on the web. (10) TV and radio news are available on all broadcasting platforms. (11) All channels, excluding HD channels, are also viewable on the web. Rai Financial Consolidated Financial Introduction Statements Statements 9 Report on Operations Radio (9) • Rai Radio 1 (7) • Rai Radio 2 (7) • Rai Radio 3 (7) • Rai Isoradio (7) • Rai Gr Parlamento (7) • Rai Radio 4 Light (8) • Rai Radio 5 Classica (7) • Rai Radio 6 Teca • Rai Radio 7 Live • Rai Radio 8 Opera Television (11) General interest Semi-general Themed channels channels interest channels • Rai News 24 • Rai 1 • Rai 4 • Rai Storia (1) • Rai 2 • Rai 5 • Rai Scuola (1) • Rai 3 • Rai Movie • Rai Sport 1 (2) (1) (6) • Rai HD • Rai Premium • Rai Sport 1 HD (3) (5) • Rai 1 HD • Rai 4 HD • Rai Sport 2 (1) Apps • Rai 2 HD (4) • Rai Movie HD (1) • Rai YoYo • Rai 3 HD (4) • Rai Premium HD (1) • Rai Gulp • Raiplay • RadioRai • Rai News • Rai Storia • Rai Euro 2016 • Rai Letteratura • Rai Arte News and Information (10) • Rai Filosofia • TG1 • Rai Com • TG2 • Rai Scuola • TG3 • Ray • TGR • Rai Parlamento • Rai Sport • Rai News 24 • Rainews.it • Televideo • Giornale RadioRai • Gr Parlamento Rai Financial Consolidated Financial Introduction 10 Statements Statements Report on Operations Highlights (in millions of Euros) Rai SpA Rai Group June 2016 June 2015 Change June 2016 June 2015 Change 1,313.7 1,17 7. 7 136.0 Revenues 1,405.2 1,250.7 154.5 (74 6.4) (699.6) (46.8) Total external operating costs (572.9) (520.4) (52.5) (475.9) (454.3) (21.6) Personnel cost (531.1) (500.6) (30.5) (1,222.3) (1,153.9) (68.4) Total operating costs (1,104.0) (1,021.0) (83.0) (20.5) (91.1) 70.6 Operating result 58.2 (15.9) 74.1 56.3 (19.1) 75.4 Result before tax 49.1 ( 2 7. 5 ) 76.6 66.2 7. 2 59.0 Result for the period 33.4 (25.2) 58.6 9 7.9 98.4 (0.5) Investments in programmes 218.7 214.8 3.9 22.8 28.1 (5.3) Technical investments 28.3 35.9 ( 7. 6 ) 120.7 126.5 (5.8) Total investments 2 47.0 250.7 (3.7) Units 8 4 7. 0 811.8 35.2 Equity 4 7 7. 3 492.8 (15.5) 5 7. 4 349.5 (292.1) Net financial debt (liquidity) 128.5 362.4 (233.9) (in units) Personnel as at 30 June 11,14 3 10,902 241 12,351 12,077 274 (Permanent contracts) Personnel as at 30 June 695 884 (189) 749 958 (209) (Fixed-term contracts) Personnel as at 30 June 11,838 11,786 52 13,100 13,035 65 (Permanent and Fixed-term contracts) Rai Financial Consolidated Financial Introduction Statements Statements 11 Report on Operations Introduction The market in which Rai operates is highly More specifically, Rai is gradually proceeding competitive and constantly evolving. The entry of to strengthen the central role played by the new operators, although not traditionally engaged generation of content, providing high quality in the publishing business, has led to an even programmes and making this Public Service more more intense competition due to their substantial robust also by reviewing the mix of genres and financial resources. their language. Furthermore, Rai will complete its transformation from a traditional broadcaster The main trends are summarised below: into a Digital Media Company reviewing the a constant advance in linear themed TV channels’ concept and distribution models programmes and shrinking audiences for general and working out a distinctive, personalisable interest networks; a rapid growth in non-linear digital range to bring a wide audience and OTT products, in which consumption is mostly allow efficient and universal access for anyone driven by the use of mobile devices, particularly anywhere and at any time, both with the suitable for watching videos online and which is support of technology investments and through therefore mainly focused on younger age groups; the introduction of production models and the radio is still a medium which is in tune with professional development suitable to the digital technological evolution and thus also with the age. youngest target listeners: therefore, it is capable of generating important synergies with TV and digital We are taking effective measures on two media. fundamental enabling factors in order to make it possible for this change of gear in generating and Against this background, in order to meet the distributing content: challenges laid down by the competitive scenario and by the current positioning of the Group, • the rationalisation of the company’s industrial in April 2016 Rai approved the 2016-2018 structure to make better use of in-house Business Plan, the main objective of which is the expertise, also through greater specialisation full development of Rai’s role as a universal Public and increased efficiency and flexibility; Service network. • an in-depth organisational renewal boosting the In fact, Rai informs completely and pluralistically, push to change, simplifying the management of talks about the country and contemporary operations and enabling Rai to act according reality, entertains all Italians, provides access to a “One Company” approach. to knowledge, disseminates digital culture and inclusion throughout the nation and promotes Italy While the legislative and regulatory frameworks abroad. remain unchanged, the strategy guidelines laid down in the Business Plan are the pillars on which The Plan, which will be reviewed to meet the to build the Rai of the future with a production requirements laid down in the new Concession vision and approach which meets the new agreement, names three strategic objectives: requirements of all public services in the present a universal and unique Public Service offer; multi-platform scenario, with a technological leadership in cross-platform audiences and infrastructure that is capable of supporting the economic and financial sustainability. new ways we use the media.