HALF-YEARLY FINANCIAL REPORT AT JUNE 30, 2010 HALF-YEARLY FINANCIAL REPORT AT JUNE 30, 2010 2010 JUNE 30, AT FINANCIAL REPORT HALF-YEARLY via Lamarmora 230 - 25124 Brescia www.a2a.eu WorldReginfo - 7902a65b-902e-47ac-a48d-59ab6442304d WorldReginfo - 7902a65b-902e-47ac-a48d-59ab6442304d Half-yearly financial report at June 30, 2010 Contents 0.1 Performance indicators and corporate information 5 The A2A Group at June 30, 2010 6 Financial highlights 8 A2A S.p.A. on the Stock Exchange 11 Corporate boards 13 Significant events during the period 1 18 Summary of results, assets and liabilities and financial position of the A2A Group 25 Significant subsequent events 0.2 Condensed half-year consolidated financial statements 28 Consolidated balance sheet 30 Consolidated income statement 32 Consolidated statement of comprehensive income 33 Consolidated cash flow statement 34 Consolidated statement of changes in equity 36 Consolidated balance sheet as per Consob Resolution 15519 of July 27, 2006 38 Consolidated income statement as per Consob Resolution 15519 of July 27, 2006 WorldReginfo - 7902a65b-902e-47ac-a48d-59ab6442304d Half-yearly financial report at June 30, 2010 Contents 0.2.1 Notes to the condensed half-year consolidated financial statements 41 General information on A2A S.p.A. 42 Half-year financial report 43 Financial statements 44 Basis of preparation 45 Changes in accounting standards 51 Scope of consolidation 52 Consolidation policies and procedures 59 Seasonal nature of the business 60 A2A Group – Areas of activity 61 Geographical areas of activity 62 Results sector by sector 64 Notes to the balance sheet 83 Net debt 84 Notes to the income statement 2 92 Earnings per share 93 Notes on related party transactions 96 Consob Communication no. DEM/6064293 of July 28, 2006 97 Guarantees and commitments with third parties 99 Other information 0.2.2 Attachments to the condensed half-year consolidated financial statements 118 1. Statement of changes in tangible assets 120 2. Statement of changes in intangible assets 122 3. List of companies included in the consolidated financial statements 124 4. List of shareholdings carried according to equity method 126 5. List of companies included in the consolidated financial statements of the Ecodeco Group 128 6. List of companies included in the consolidated financial statements of the Coriance Group 130 7. List of financial assets available for sale WorldReginfo - 7902a65b-902e-47ac-a48d-59ab6442304d Half-yearly financial report at June 30, 2010 Contents 0.3 Interim report on operations 133 Results sector by sector 135 Macroeconomic scenario 137 Energy market trends 139 Energy Sector 147 Heat and Services Sector 150 Environment Sector 154 Networks Sector 165 Other Services and Corporate 167 Outlook for operations 168 Human resources and industrial relations 170 Corporate Social Responsibility 173 Innovation, research and development 182 Risks and uncertainties 0.4 Certification of the consolidated financial 3 statements pursuant to art. 154-bis para. 5 of Decree. 58/98 195 Certification of the financial statements pursuant to art. 154-bis para. 5 of Decree. 58/98 0.5 Independent Auditors' Report 197 Independent Auditors' Report This is a translation of the Italian original “Relazione finanziaria semestrale al 30 giugno 2010” 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 - 7902a65b-902e-47ac-a48d-59ab6442304d 0.1 Performance indicators and corporate information WorldReginfo - 7902a65b-902e-47ac-a48d-59ab6442304d Half-yearly financial report at June 30, 2010 The A2A Group at June 30, 2010 A2A Spa 51.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 21.94% Delmi (3) A2A Trading A2A Energia A2A Calore & Amsa A2A Reti A2A Reti Acsm-Agam Servizi Elettriche Gas 50.00% 70.00% 100.00% 98.08% 100.00% 99.98% 48.86% 7.9% Transalpina di A2A Alfa Asmea A2A Coriance Ecodeco Bas SII ASVT (2) Dolomiti Energia Energia 61.28% 50.00% 33.33% 100.00% 99.97% 100.00% 91.60% 23.53% Edison (1) Premiumgas Lumenergia Coriance Aprica Retrasm Retragas Metroweb (5) 20.00% 70.00% 50.00% 90.00% 80.00% 74.50% 32.52% 100.00% Edipower Plurigas Ergon Energia Varese Risorse (4) Montichiari Camuna Società Servizi Selene in liquidation Ambiente Energia Valdisotto 100.00% 100.00% 100.00% 50.00% 100.00% 67.00% 90.00% 49.00% 5 A2A Produzione A2A Servizi alla Bas-Omniservizi Asm Novara (3) Partenope Seasm Aspem (4) e-Utile distribuzione Ambiente 100.00% 80.00% 50.00% 60.00% 100.00% Aspem Ostros Energia Metamer Proaris A2A Logistica Energia 100.00% 89.95% 100.00% A2A Abruzzo Energia A2A Servizi Montenegro (3) al cliente 50.00% 39.49% Ergosud Rudnik Uglja ad Pljevlja 43.70% EPCG Areas of activity (1) The percentage of 61.28% relates to the ordinary shares owned by Transalpina di Energia (TdE). The percentage held in the share capital is 60%. Edison holds 50% Energy of Edipower. (2) Of which 0.38% held through A2A Reti Gas. Heat & Services (3) Note that there are call and put options on another stake in the company. These options were exercised in July 2010 for 5% of the share capital. Environment (4) There are put options for another stake in these companies' share capital. (5) In caso di conversione del prestito obbligazionario la percentuale ammonterà al Networks 39.57% Other Companies This chart shows the principal investments of the A2A Group. See attachments 1,2,3,4 and 5 for full details of the Group's shareholdings. WorldReginfo - 7902a65b-902e-47ac-a48d-59ab6442304d Half-yearly financial report at June 30, 2010 Financial Highlights (1) Revenues 2,868 million euro Gross operating income - EBITDA 474 million euro Net income 371 million euro Income statement 01 01 2010 01 01 2009 Millions of euro 06 30 2010 06 30 2009 6 Revenues 2,868 2,820 Operating expenses (2,134) (2,037) Labour costs (260) (243) Gross operating income - EBITDA 474 540 Depreciation, amortization, provisions and write-downs (240) (175) Net operating income - EBIT 234 365 Financial balance (54) (78) Other non-operating income – – Other non-operating expenses – (40) Income before tax 180 247 Income taxes (69) (110) Net result from non-current assets sold or held for sale 279 7 Minority interests (19) (15) Net income for the period pertaining to the Group 371 129 Gross operating income - EBITDA/Revenues 16.5% 19.1% (1) The figures serve as performance indicators as required by CESRN/05/178/B. WorldReginfo - 7902a65b-902e-47ac-a48d-59ab6442304d Half-yearly financial report at June 30, 2010 Financial Highlights Balance sheet figures 06 30 2010 12 31 2009 Millions of euro Net capital employed 8,666 9,239 Total equity pertaining to the Group and minority interests 4,408 4,595 Consolidated net financial position (4,258) (4,644) Consolidated net financial position/Total equity pertaining to the Group and minority interests 0.97 1.01 Consolidated net financial position/Market cap 1.21 1.15 7 Financial data 01 01 2010 01 01 2009 Millions of euro 06 30 2010 06 30 2009 Cash flow from operating activities 398 231 Cash flow used in investment activities 218 (317) Free cash flow 616 (86) Key figures of A2A S.p.A. 06 30 2010 12 31 2009 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 rates and prices 06 30 2010 06 30 2009 Average 6-month Euribor 0.974% 1.811% Average price of Brent crude (USD/bbl) 78.40 52.79 Average exchange rate €/$ (*) 1.33 1.30 Average price of Brent crude (Euro/bbl) 59.02 40.61 (*) Source: Italian Foreign Exchange Office WorldReginfo - 7902a65b-902e-47ac-a48d-59ab6442304d Half-yearly financial report at June 30, 2010 A2A S.p.A. on the Stock Exchange A2A and Stock data Market capitalisation at June 30, 2010 (in millions of euro) 3,528 Average volumes in the first half 2010 11,409,973 Average price in the first half 2010 (*) 1.299 Maximum price in the first half 2010 (*) 1.469 Minimum price in the first half 2010 (*) 1.117 Number of shares 3,132,905,277 (*) Euro per share 8 Sources: Bloomberg, CONSOB, rating agencies. In June 24, 2010 A2A distributed a dividend equal to 0.07 euro per share, decreasing compared to the previous year (DPS 2008 equal to 0.097 euro); A2A forms part of the following indices FTSE MIB DJ STOXX DJ EUROSTOXX WisdomTree FTSEurofirst S&P Developed Ex-US Ethical indices FTSE4GOOD Global and Europe Axia Csr and Ethical ECPI Ethical Index Global. Euro and EMU S-BOX Climate Change WorldReginfo - 7902a65b-902e-47ac-a48d-59ab6442304d Half-yearly financial report at June 30, 2010 A2A S.p.A. on the Stock Exchange A2A Shareholding (*) Market Municipality of 37.6% Milan 27.5% 9 Municipality of Alpiq Holding Brescia AG 27.5% 5.0% Carlo Tassara 2.5% (*) Stakes higher than 2% (updated al 30/06/2010). Rating Attuale M/L Term Rating BBB+ Standard & Poor’s Short Term Rating A–2 Outlook Negative credit watch M/L Term Rating A3 Moody’s Outlook Stable WorldReginfo - 7902a65b-902e-47ac-a48d-59ab6442304d Half-yearly financial report at June 30, 2010 A2A S.p.A. on the Stock Exchange A2A in 1st half 2010 1.5 40000000 35000000 1.4 30000000 1.3 25000000 20000000 Volumes €/Share 1.2 15000000 10000000 1.1 5000000 1 0 jan-10 feb-10 mar-10 apr-10 may-10 jun-10 Volumes Price 10 A2A vs FTSE MIB vs Dow Jones Stoxx Utilities (price 01/01/10 = 100) 105.0 100.0 95.0 90.0 85.0 80.0 75.0 70.0 jan-10 feb-10 mar-10 apr-10 may-10 jun-10 A2A FTSE MIB DOW JONES