The Media Business Unit was incorporated into the Domestic Business Unit as of January 1, 2016.
One of the key strategic drivers for growth identified in the 20162018 Industrial Plan is the development of quadruple Play convergent services through
the offer of a rich range of diversified video content, realized both in partnership with key content providers and through TIM Vision, the Groups own platform of services. Within this framework, Persidera plays an important role in supporting
the development of TIM Vision services, building on its distinctive Head End expertise (management and distribution of TV signals via cable platform) and Play Out experience (television program broadcasting operations). Other key synergies to help
guarantee the medium-term stability/growth of revenues from bandwidth rental for Persidera come from the development of strategic partnerships between Telecom Italia and content providers that do not have proprietary broadcasting channels
(multiplexes) for
free-to-air
television broadcasting and which instead pursue a multi-platform distribution strategy.
The framework of the 2016 2018 Industrial Plan and the new governance structure of Persidera are consistent with this future scenario, based on the
increasingly closer link between the TLC industry and Media/Content providers to underpin the growth of ultra-broadband services in the Consumer segment.
Following the change in scope, the table below shows the performance of the Domestic Business Unit in the first nine months of 2016, reported on a
like-for-like
basis with the previous year, thus excluding the contribution of the Media Business Unit:
Revenues for the first nine months of 2016 amounted to
11,036 million euros, a decrease of 91 million euros
(-0.8%)
compared to the same period of 2015, but with a structural improvement and a positive growth rate in the third quarter compared to the
same period of the previous year (+1.0% in the third quarter,
-1.2%
in the second quarter and
-2.3%
in the first quarter). Revenues from services performed similarly to
total revenues, decreasing by 134 million euros compared to the first nine months of 2015
(-1.3%),
but with a strong recovery in the third quarter
(-0.4%),
mainly
driven by the structural improvement in Mobile revenues, which showed a positive growth rate for the fourth consecutive quarter.
Revenues from product sales,
including the change in work in progress, amounted to 690 million euros in the first nine months of 2016, representing an improvement on the same period of 2015 (+43 million euros). Also of note was the significant growth in revenues from
smartphone sales (+48 million euros, driven entirely by the sale of 4G enabled LTE devices) supporting the growth in digital services (Internet connectivity and entertainment services).
EBITDA for the Domestic Business Unit totaled 4,995 million euros in the first nine months of 2016, increasing by 470 million euros compared to the first nine
months of 2015 (+10.4%), with an EBITDA margin of 45.3% (+4.6 percentage points compared to the same period of 2015). The figure also reflected the negative impact of
non-recurring
net expenses as
previously described in this Report totaling 139 million euros, of which:
Without these expenses, the organic change in EBITDA would have been +3.3%, with
an EBITDA margin of 46.5%, up 1.8 percentage points on the first nine months of 2015, continuing the turnaround that started in the second quarter (third quarter +7.8%, second quarter +6.9%, first quarter
-5.2%).
This performance improvement was attributable to the significant reduction in operating expenses, broken down as follows with
reference to the main cost items:
The EBITDA performance in addition to the improvement in sales earnings and the revenue performance also
reflected the positive impacts achieved by the already mentioned Cost Recovery Plan, aimed at improving efficiency and providing greater operational and financial flexibility to the business, which was boosted, particularly in the second and third
quarter of 2016. In detail:
Other income amounted to 148 million euros, down 31 million euros on the first nine months of 2015.
EBIT for the first nine months of 2016 came to
2,575 million euros (+485 million euros, +23.2% on the same period the previous year) with an EBIT margin of 23.3% (+4.5 percentage points). The EBIT performance reflected the positive performance of EBITDA reported above, as well as the
reduction in depreciation and amortization, of 32 million euros.
EBIT for the first nine months of 2016 was pulled down by a total of
139 million euros in
non-recurring
expenses, without which the organic change would have been +7.0%, with an EBIT margin of 24.6%.
The main financial and operating highlights of the
Domestic Business Unit are reported according to two Cash Generating units (CGU):
Key results for the first nine months of 2016 for the Domestic Business Unit are presented in the following
tables, broken down by market/business segment and compared to the first nine months of 2015.
Core Domestic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
3rd Quarter
2016
|
|
|
3rd Quarter
2015
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2015
|
|
|
% Change
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(a/b)
|
|
|
(c/d)
|
|
Revenues
(1)
|
|
|
3,503
|
|
|
|
3,497
|
|
|
|
10,239
|
|
|
|
10,390
|
|
|
|
0.2
|
|
|
|
(1.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer
|
|
|
1,832
|
|
|
|
1,850
|
|
|
|
5,404
|
|
|
|
5,373
|
|
|
|
(1.0
|
)
|
|
|
0.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business
(2)
|
|
|
1,097
|
|
|
|
1,154
|
|
|
|
3,299
|
|
|
|
3,533
|
|
|
|
(4.9
|
)
|
|
|
(6.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale
|
|
|
507
|
|
|
|
457
|
|
|
|
1,370
|
|
|
|
1,367
|
|
|
|
10.8
|
|
|
|
0.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
67
|
|
|
|
36
|
|
|
|
166
|
|
|
|
117
|
|
|
|
86.1
|
|
|
|
41.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
1,766
|
|
|
|
1,629
|
|
|
|
4,859
|
|
|
|
4,388
|
|
|
|
8.4
|
|
|
|
10.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA Margin
|
|
|
50.4
|
|
|
|
46.6
|
|
|
|
47.5
|
|
|
|
42.2
|
|
|
|
3.8
|
pp
|
|
|
5.3
|
pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT
|
|
|
975
|
|
|
|
843
|
|
|
|
2,515
|
|
|
|
2,024
|
|
|
|
15.7
|
|
|
|
24.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT Margin
|
|
|
27.8
|
|
|
|
24.1
|
|
|
|
24.6
|
|
|
|
19.5
|
|
|
|
3.7
|
pp
|
|
|
5.1
|
pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Headcount at period end (number)
(*)
(**)
|
|
|
|
51,391
|
|
|
|
(3)
51,741
|
|
|
|
(350
|
)
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Following the change in the mission of Persidera, the Media Business Unit was included in the Domestic Business Unit (Core Domestic) as of January 1, 2016; without that change, Core Domestic revenues would have
totaled 10,185 million euros in the first nine months of 2016, compared to 10,390 million euros in the same period of 2015.
|
(2)
|
As result of the new organizational view, as of January 1, 2016 the Business segment also includes Olivetti. Figures for the period under comparison have been changed accordingly.
|
(3)
|
Headcount at December 31, 2015.
|
(*)
|
Includes employees with temp work contracts: 1 at 9/30/2016 (none at 12/31/2015).
|
(**)
|
Without the change resulting from the aforementioned inclusion of the Media Business Unit into the Domestic Business Unit (Core Domestic), the headcount for the Core Domestic segment for the reporting period would have
totaled 51,328 employees.
|
Investments made in the fiber for the Fixed-line segment enabled a significant increase in population coverage:
over 785 thousands homes reached solely by FTTH with an increase in the third quarter of 2016 of over 250 thousand units 30 Italian cities (16 more urban centers than in June 2016). Sales of fiber lines also rose during the quarter, increasing
31% compared to the same period of 2015. Line loss (fixed lines lost by Telecom Italia) was down, on the other hand, after having fallen in the first six months of 2016, and totaled 100 thousand lines in the third quarter, almost half the
173 thousand lost in the same period of 2015.
The Mobile segment also performed strongly and saw customers using LTE technology exceed 50% (51%) of
Telecom Italias customer base.
In detail:
|
|
Consumer: revenues for the Consumer segment for the first nine months of 2016 amounted to a total of 5,404 million euros, an increase of 31 million euros compared to the same period of 2015 (+0.6%). This
performance continues the recovery that had already began in 2015, driven in particular by the structural improvement in Mobile revenues, due to the steady market share, as well as the stabilization of ARPU levels.
|
The following is noted in particular:
|
|
|
revenues from the Mobile business amounted to 2,710 million euros and showed a significant and steady increase on the first nine months of 2015 (+112 million euros, +4.3%). Revenues from services increased by
75 million euros (+3.2% on the same period of 2015), with the positive performance continuing in the third quarter in terms of quarterly trend in comparison with 2015, due to the improvement in competition conditions, with the progressive
stabilization of market share and the steady growth in Internet mobile and digital services supporting ARPU levels;
|
|
|
|
revenues from Fixed-line services amounted to 2,660 million euros, down 143 million euros compared to the first nine months of 2015
(-5.1%).
The revenue decline slowed
down during the quarter, showing recovery compared to recent quarters
(-3.2%
in the third quarter,
-6.0%
in the second quarter,
-6.0%
in the first quarter). This positive performance was attributable to a reduction in the loss of voice-only accesses, accompanied by growth in broadband customers and the increasing penetration of Fiber
offers.
|
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Financial and Operating Highlights The Business Units of the Telecom Italia Group
Domestic Business Unit
|
|
21
|
|
|
Business: revenues for the Business segment amounted to 3,299 million euros, decreasing by 234 million euros compared to the first nine months of 2015
(-6.6%),
of which
159 million euros
(-5.0%)
were attributable to the services component and 74 million euros
(-21.3%)
to the equipment and products component.
|
With regard to revenues from services:
|
|
|
revenues from Mobile services were down by 51 million euros
(-6.0%
compared to the same period last year), with a significant recovery in the third quarter
(-1.4%,
-7.6%
in the second quarter,
-9.4%
in the first quarter). Specifically, the continuing decline in traditional mobile services
(-15.7%
for voice and messaging compared to the first nine months of 2015) was driven by the shift of customers towards bundled formulas with a lower overall ARPU level and the migration of Public Administration
clients towards the new Consip offer (which lowered unit prices), and was again only marginally offset by the positive performance of new digital services (+3.4% compared to 2015);
|
|
|
|
revenues from Fixed-line services decreased by 109 million euros
(-4.6%
compared to the first nine months of 2015), despite the steady growth in revenues from ICT services
(+2.2%), particularly for Cloud services. Indeed, the segment continued to be adversely affected by the slow economic recovery, the reduction in prices on traditional voice and data services, and the technological shift towards VoIP systems.
|
|
|
Wholesale: revenues for the Wholesale segment in the first nine months of 2016 came to 1,370 million euros, an increase on the corresponding period of 2015 (+3 million euros, +0.2%). The reduction in regulated
prices had a negative impact of 50 million euros on revenues, which was more than offset by the contribution from several infrastructure capacity sales deals.
|
International Wholesale Telecom Italia Sparkle group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd Quarter
2016
(a)
|
|
|
3rd Quarter
2015
(b)
|
|
|
9 months to
9/30/2016
(c)
|
|
|
9 months to
9/30/2015
(d)
|
|
|
% Change
|
|
(millions of euros)
|
|
|
|
|
|
(a/b)
|
|
|
(c/d)
|
|
|
organic
(c/d)
|
|
Revenues
|
|
|
354
|
|
|
|
336
|
|
|
|
1,003
|
|
|
|
971
|
|
|
|
5.4
|
|
|
|
3.3
|
|
|
|
3.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which third party
|
|
|
300
|
|
|
|
272
|
|
|
|
839
|
|
|
|
781
|
|
|
|
10.3
|
|
|
|
7.4
|
|
|
|
7.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
48
|
|
|
|
52
|
|
|
|
145
|
|
|
|
145
|
|
|
|
(7.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA Margin
|
|
|
13.6
|
|
|
|
15.5
|
|
|
|
14.5
|
|
|
|
14.9
|
|
|
|
(1.9
|
)pp
|
|
|
(0.4
|
)pp
|
|
|
(0.4
|
)pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT
|
|
|
19
|
|
|
|
26
|
|
|
|
60
|
|
|
|
66
|
|
|
|
(26.9
|
)
|
|
|
(9.1
|
)
|
|
|
(9.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT Margin
|
|
|
5.4
|
|
|
|
7.7
|
|
|
|
6.0
|
|
|
|
6.8
|
|
|
|
(2.3
|
)pp
|
|
|
(0.8
|
)pp
|
|
|
(0.8
|
)pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Headcount at period end
(number)
(*)
|
|
|
|
|
|
|
|
|
|
|
749
|
|
|
|
(1)
645
|
|
|
|
104
|
|
|
|
16.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Headcount at December 31, 2015
|
(*)
|
Includes employees with temp work contracts: 3 at 9/30/2016 (2 at 12/31/2015).
|
Revenues for the first nine
months of 2016 of the Telecom Italia Sparkle group International Wholesale totaled 1,003 million euros, up on the first nine months of 2015 (+32 million euros, +3.3%). The result was shaped by the increase in revenues from Voice
services (+27 million euros, +3.9%) and the growth in revenues from IP/Data services including cloud and data center services (+5 million euros, +2.1%). All other business lines remained substantially stable.
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Financial and Operating Highlights The Business Units of the Telecom Italia Group
Domestic Business Unit
|
|
22
|
BRAZIL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
(millions of reais)
|
|
|
|
|
|
|
3rd
Quarter
2016
|
|
|
3rd
Quarter
2015
Revised
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2015
Revised
|
|
|
3rd
Quarter
2016
|
|
|
3rd
Quarter
2015
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revised
|
|
|
|
Revised
|
|
|
% Change
|
|
|
|
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(a/b)
|
|
|
(c/d)
|
|
Revenues
|
|
|
1,064
|
|
|
|
1,008
|
|
|
|
2,922
|
|
|
|
3,699
|
|
|
|
3,900
|
|
|
|
4,115
|
|
|
|
11,574
|
|
|
|
13,027
|
|
|
|
(5.2
|
)
|
|
|
(11.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
344
|
|
|
|
318
|
|
|
|
900
|
|
|
|
1,108
|
|
|
|
1,270
|
|
|
|
1,285
|
|
|
|
3,566
|
|
|
|
3,902
|
|
|
|
(1.2
|
)
|
|
|
(8.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA Margin
|
|
|
32.6
|
|
|
|
31.2
|
|
|
|
30.8
|
|
|
|
30.0
|
|
|
|
32.6
|
|
|
|
31.2
|
|
|
|
30.8
|
|
|
|
30.0
|
|
|
|
1.4
|
pp
|
|
|
0.8
|
pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT
|
|
|
89
|
|
|
|
168
|
|
|
|
210
|
|
|
|
742
|
|
|
|
334
|
|
|
|
712
|
|
|
|
832
|
|
|
|
2,614
|
|
|
|
(53.1
|
)
|
|
|
(68.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT Margin
|
|
|
8.6
|
|
|
|
17.3
|
|
|
|
7.2
|
|
|
|
20.1
|
|
|
|
8.6
|
|
|
|
17.3
|
|
|
|
7.2
|
|
|
|
20.1
|
|
|
|
(8.7
|
)pp
|
|
|
(12.9
|
)pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Headcount at period end (number)
|
|
|
|
|
|
|
|
|
|
|
|
9,941
|
|
|
|
(1)
13,042
|
|
|
|
|
|
|
|
(23.8
|
)
|
(1)
|
Headcount at December 31, 2015.
|
|
|
|
|
|
|
|
|
|
|
|
9/30/2016
|
|
|
9/30/2015
|
|
Lines at period end (thousands)
(*)
|
|
|
63,247
|
|
|
|
(1)
66,234
|
|
|
|
|
|
|
|
|
|
|
MOU (minutes/month)
(**)
|
|
|
117.7
|
|
|
|
119.3
|
|
|
|
|
|
|
|
|
|
|
ARPU (reais)
|
|
|
17.6
|
|
|
|
16.4
|
|
(1)
|
Number at December 31, 2015.
|
(*)
|
Includes corporate lines.
|
Revenues
Revenues for the first nine months of 2016 amounted to
11,574 million reais and were down 1,453 million reais
(-11.2%)
year-on-year.
Service revenues totaled
10,878 million reais, a decrease of 640 million reais compared to 11,518 million reais for the first nine months of 2015
(-5.6%).
Mobile Average Revenue Per User (ARPU) was 17.6 reais for the
first nine months of 2016, compared to 16.4 reais in the same period of the previous year (+7.3%).
The Business Units total number of lines at
September 30, 2016 was 63.2 million, representing a decrease of 3 million
(-4.5%)
compared to December 31, 2015; the market share at the end of August 2016 was 25.2% (25.7% at
December 31, 2015).
Revenues from product sales came to 696 million reais (1,509 million reais in the first nine months of 2015;
-53.9%),
reflecting a commercial policy less focused on the sale of handsets, in addition to the impact of the Brazilian macroeconomic crisis on household spending.
Revenues for the third quarter of 2016 amounted to 3,900 million reais, down 5.2% compared to the same period last year.
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Financial and Operating Highlights The Business Units of the Telecom Italia Group
Brazil Business Unit
|
|
23
|
EBITDA
EBITDA amounted to 3,566 million reais, down
336 million reais on the first nine months of 2015
(-8.6%).
However, the fall in EBITDA slowed down considerably in the last quarter
(-1.2%)
due to the
implementation of efficiency measures that partially offset the reduction in revenues in the period under review. Costs for the purchase of goods and services showed a significant decrease, for all components compared to the first nine months of
2015
(-1,025 million
reais;
-14.6%);
employee benefits expenses increased (+3%) mainly due to the salary inflation adjustment, in addition to other net
non-recurring
costs for termination benefits of 56 million reais.
The EBITDA margin stood at 30.8%, 0.8 percentage
points higher than in the first nine months of 2015.
EBITDA for the third quarter of 2016 amounted to 1,270 million reais, down 15 million
reais on the third quarter of 2015; the EBITDA Margin for the third quarter of 2016 came to 32.6%, up 1.4 percentage points on the same period of the previous year (31.2%).
Finally, excluding the above mentioned
non-recurring
expenses, EBITDA for the third quarter of 2016 would have shown
an increase of +0.5% compared to the same period last year, after
-6.7%
for the second quarter of 2016 and
-15.0%
for the first quarter of 2016.
The changes in the main costs are shown below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
(millions of reais)
|
|
|
|
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2015
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2015
|
|
|
Change
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(c-d)
|
|
Acquisition of goods and services
|
|
|
1,511
|
|
|
|
1,990
|
|
|
|
5,984
|
|
|
|
7,009
|
|
|
|
(1,025
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee benefits expenses
|
|
|
248
|
|
|
|
271
|
|
|
|
982
|
|
|
|
953
|
|
|
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating expenses
|
|
|
355
|
|
|
|
387
|
|
|
|
1,407
|
|
|
|
1,364
|
|
|
|
43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in inventories
|
|
|
(8
|
)
|
|
|
29
|
|
|
|
(32
|
)
|
|
|
103
|
|
|
|
(136
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT
EBIT came to 832 million reais, down 1,782 million reais compared to the first nine months of 2015. This result reflected the lower contribution from
EBITDA, the effect of higher depreciation and amortization (+312 million reais) and the lower benefit from the sale of telecommunication towers, which in 2015 resulted in a gain of 1,184 million reais compared to a gain of 37 million
reais in the first nine months of 2016.
Agreement for the sale of telecommunication towers
You are reminded that the agreement is being
implemented, which was signed by TIM Celular with American Tower do Brasil on November 21, 2014, for the sale of part of the mobile infrastructure (6,481 telecommunication towers) for a total value of around 3 billion reais. The sales
agreement was signed in conjunction with a master lease agreement lasting 20 years and, accordingly, the transaction is to be considered as a partial sale and lease back.
During the second quarter of 2016, the fourth partial sale of 270 towers was completed at a price of approximately 110 million reais, corresponding to
around 28 million euros. The final realized gain, already net of transaction costs, was 37 million reais (around 9 million euros at the average exchange rate at September 30, 2016). The amount of
non-current
assets reacquired under finance leases came to 74 million reais (around 19 million euros at the average exchange rate at September 30, 2016).
During the third quarter of 2016, financial leases were also taken out on newly-built towers for 8 million reais (about 2 million euros), as already
envisaged in the contractual arrangements of November 21, 2014 with American Tower.
The sales of the first three blocks, for a total of 5,483
towers, were completed in 2015, as described in the Consolidated Financial Statements of the Telecom Italia Group at December 31, 2015.
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Financial and Operating Highlights The Business Units of the Telecom Italia Group
Brazil Business Unit
|
|
24
|
DISCONTINUED
OPERATIONS/NON-CURRENT
ASSETS HELD
FOR SALE
On March 8, 2016, following the approval by the Enacom, the Argentinian communications regulatory authority, the Telecom Italia Group
completed the sale of the entire remaining interest in the Sofora Telecom Argentina group.
A summary is provided below of the income statement
impacts from the Sofora - Telecom Argentina group and its sale; the figures for 2016 have been translated at the average exchange rate for the period January 1 March 8 (15.7981 pesos per euro), whereas the figures for the first nine
months of 2015 have been translated at the related average exchange rate (9.98894 pesos per euro).
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
|
|
1/1-3/8
2016
|
|
|
9 months to
9/30/2015
|
|
Income statement effects from Discontinued
operations/Non-current
assets held for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
504
|
|
|
|
2,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
|
|
|
|
133
|
|
|
|
765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA Margin
|
|
|
|
|
|
|
26.4
|
|
|
|
26.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit (loss) (EBIT)
|
|
|
|
|
|
|
133
|
|
|
|
759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT Margin
|
|
|
|
|
|
|
26.4
|
|
|
|
26.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income (expenses), net
|
|
|
|
|
|
|
(42
|
)
|
|
|
(10
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) before tax from Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
91
|
|
|
|
749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
|
|
|
(32
|
)
|
|
|
(263
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) after tax from Discontinued
operations/Non-current
assets held for sale
|
|
|
(a
|
)
|
|
|
59
|
|
|
|
486
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other minor entries
|
|
|
(b
|
)
|
|
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from Discontinued
operations/Non-current
assets held for sale
|
|
|
(c= a+b
|
)
|
|
|
59
|
|
|
|
480
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income statement effects on the selling entities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gains on disposal
|
|
|
|
|
|
|
307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transfer to the separate consolidated income statement of the Reserve for exchange differences on
translating foreign operations
|
|
|
|
|
|
|
(304
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense relating to the disposal
|
|
|
|
|
|
|
(15
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(d
|
)
|
|
|
(12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from Discontinued
operations/Non-current
assets held for sale
|
|
|
(c+d
|
)
|
|
|
47
|
|
|
|
480
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Parent
|
|
|
|
|
|
|
(3
|
)
|
|
|
69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests
|
|
|
|
|
|
|
50
|
|
|
|
411
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For more details, see the Note
Discontinued
operations/Non-current
assets
held for sale in the Condensed Consolidated Financial Statements of the Telecom Italia Group at September 30, 2016.
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Discontinued operations/Non-current assets held for sale
|
|
25
|
CONSOLIDATED FINANCIAL POSITION AND CASH FLOWS PERFORMANCE
NON-CURRENT
ASSETS
|
|
Goodwill
: increased by 165 million euros, from 29,383 million euros at the end of 2015 to 29,548 million euros at September 30, 2016, due to positive changes of 157 million euros in
foreign exchange rates applicable to the Groups Brazilian operations
(1)
and the recognition of the provisional goodwill, of 8 million euros, resulting from the acquisitions made by
INWIT S.p.A. in January 2016.
|
Further details are provided in the Note Goodwill in the Condensed Consolidated
Financial Statements at September 30, 2016 of the Telecom Italia Group.
|
|
Other intangible assets
: increased by 253 million euros, from 6,480 million euros at the end of 2015 to 6,733 million euros at September 30, 2016, representing the balance of the following
items:
|
|
|
|
capex (+1,118 million euros);
|
|
|
|
depreciation charge for the period
(-1,283 million
euros);
|
|
|
|
disposals, exchange differences, reclassifications and other changes (for a net positive balance of 418 million euros).
|
|
|
Tangible assets
: increased by 724 million euros, from 14,867 million euros at the end of 2015 to 15,591 million euros at September 30, 2016, representing the balance of the following items:
|
|
|
|
capex (+1,989 million euros);
|
|
|
|
changes in financial leasing contracts (+171 million euros);
|
|
|
|
depreciation charge for the period
(-1,833 million
euros);
|
|
|
|
disposals, exchange differences, reclassifications and other changes (for a net positive balance of 397 million euros).
|
CONSOLIDATED EQUITY
Consolidated equity amounted to 21,637 million euros (21,249 million euros at December 31, 2015), of which 19,414 million euros
attributable to Owners of the Parent (17,554 million euros at December 31, 2015) and 2,223 million euros attributable to
non-controlling
interests (3,695 million euros at December 31,
2015).
In greater detail, the changes in equity were the following:
|
|
|
|
|
(millions of euros)
|
|
9/30/2016
|
|
At the beginning of the period
|
|
|
21,333
|
|
|
|
|
|
|
Adjustment for errors
|
|
|
(84
|
)
|
|
|
|
|
|
At the beginning of the period revised
|
|
|
21,249
|
|
|
|
|
|
|
Total comprehensive income (loss) for the period
|
|
|
2,166
|
|
|
|
|
|
|
Dividends approved by:
|
|
|
(192
|
)
|
|
|
|
|
|
Telecom Italia S.p.A.
|
|
|
(166
|
)
|
|
|
|
|
|
Other Group companies
|
|
|
(26
|
)
|
|
|
|
|
|
Issue of equity instruments
|
|
|
7
|
|
|
|
|
|
|
Disposal of the Sofora Telecom Argentina group
|
|
|
(1,582
|
)
|
|
|
|
|
|
Other changes
|
|
|
(11
|
)
|
|
|
|
|
|
At the end of the period
|
|
|
21,637
|
|
|
|
|
|
|
(1)
|
The spot exchange rate used for the translation into euro of the Brazilian real (expressed in terms of units of local currency per 1 euro) was 3.62308 at September 30, 2016 and 4.25116 at
December 31, 2015.
|
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Consolidated Financial Position and Cash Flows Performance
|
|
26
|
CASH
FLOWS
Adjusted net financial debt stood at 26,735 million euros, down 543 million euros compared to December 31, 2015 (27,278 million
euros). The change was partly attributable to the deconsolidation of the net financial debt of the Sofora Telecom Argentina group following the completion of its sale on March 8, 2016.
The table below summarizes the main transactions that had an impact on the change in adjusted net financial debt of the first nine months of 2016:
Change in adjusted net financial debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9 months to
|
|
|
9 months to
|
|
|
|
|
(millions of euros)
|
|
9/30/2016
|
|
|
9/30/2015
|
|
|
Change
|
|
EBITDA
|
|
|
5,878
|
|
|
|
5,622
|
|
|
|
256
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures on an accrual basis
|
|
|
(3,107
|
)
|
|
|
(3,233
|
)
|
|
|
126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in net operating working capital:
|
|
|
(830
|
)
|
|
|
(1,149
|
)
|
|
|
319
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in inventories
|
|
|
(71
|
)
|
|
|
19
|
|
|
|
(90
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in trade receivables and net amounts due from customers on construction
contracts
|
|
|
(31
|
)
|
|
|
315
|
|
|
|
(346
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in trade payables (*)
|
|
|
(425
|
)
|
|
|
(1,433
|
)
|
|
|
1,008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other changes in operating receivables/payables
|
|
|
(303
|
)
|
|
|
(50
|
)
|
|
|
(253
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in employee benefits
|
|
|
12
|
|
|
|
32
|
|
|
|
(20
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in operating provisions and Other changes
|
|
|
(45
|
)
|
|
|
279
|
|
|
|
(324
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating free cash flow
|
|
|
1,908
|
|
|
|
1,551
|
|
|
|
357
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Revenues
|
|
|
13.7
|
|
|
|
10.4
|
|
|
|
3.3
|
pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of investments and other disposals flow
|
|
|
737
|
|
|
|
1,554
|
|
|
|
(817
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital increases/reimbursements, including incidental costs
|
|
|
|
|
|
|
186
|
|
|
|
(186
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial investments flow
|
|
|
(11
|
)
|
|
|
(35
|
)
|
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends payment
|
|
|
(227
|
)
|
|
|
(204
|
)
|
|
|
(23
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in financial leasing contracts
|
|
|
(178
|
)
|
|
|
(1,367
|
)
|
|
|
1,189
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance expenses, income taxes and other net
non-operating
requirements flow
|
|
|
(1,648
|
)
|
|
|
(1,616
|
)
|
|
|
(32
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reduction/(Increase) in adjusted net financial debt from continuing operations
|
|
|
581
|
|
|
|
69
|
|
|
|
512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reduction/(Increase) in net financial debt from Discontinued
operations/Non-current
assets held for sale
|
|
|
(38
|
)
|
|
|
(222
|
)
|
|
|
184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reduction/(Increase) in adjusted net financial debt
|
|
|
543
|
|
|
|
(153
|
)
|
|
|
696
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
Includes the change in trade payables for amounts due to fixed asset suppliers.
|
In addition to what has
already been described with reference to EBITDA, the change in adjusted net financial debt for the first nine months of 2016 has been particularly impacted by the following:
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Consolidated Financial Position and Cash Flows Performance
|
|
27
|
Capital expenditures on an accrual basis
The breakdown of capital expenditures by operating
segment is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9 months to 9/30/2016
|
|
|
9 months to 9/30/2015
|
|
|
Change
|
|
(millions of euros)
|
|
|
|
|
% of total
|
|
|
|
|
|
% of total
|
|
|
Domestic (*)
|
|
|
2,398
|
|
|
|
77.2
|
|
|
|
2,297
|
|
|
|
71.0
|
|
|
|
101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brazil
|
|
|
709
|
|
|
|
22.8
|
|
|
|
930
|
|
|
|
28.8
|
|
|
|
(221
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Operations
|
|
|
|
|
|
|
|
|
|
|
6
|
|
|
|
0.2
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments and eliminations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Total
|
|
|
3,107
|
|
|
|
100.0
|
|
|
|
3,233
|
|
|
|
100.0
|
|
|
|
(126
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Revenues
|
|
|
22.3
|
|
|
|
|
|
|
|
21.7
|
|
|
|
|
|
|
|
0.6
|
pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
Following the change in the business
mission of Persidera, the Media Business Unit was incorporated into the Domestic Business Unit (Core Domestic) as of January 1, 2016; without that change, the capital
expenditure of the Domestic Business Unit for the first nine months of 2016 would have been 2,394 million euros.
|
Capital expenditures
in the first nine months of 2016 totaled 3,107 million euros, down 126 million euros
(-3.9%)
on the first nine months of 2015. In the third quarter the Company continued to implement more selective
capital expenditure by identifying projects with higher returns, targeted at innovation and transformation, without affecting levels of Ultra Broad Band coverage and service quality. In particular:
|
|
the Domestic Business Unit posted capital expenditures of 2,398 million euros, an increase of 101 million euros compared to the first nine months of 2015. The increase was entirely due to the higher capital
expenditure on the development of networks and innovative platforms for next-generation services (+209 million euros), which accounted for 49% of all capital expenditure (43% in the same period of 2015);
|
|
|
the Brazil Business Unit recorded a decrease of 221 million euros (including a negative currency effect of 103 million euros) compared to the first nine months of 2015; these capital expenditures were mainly
aimed at the development of the industrial infrastructure and at sales support platforms.
|
Change in net operating working capital
The change in net operating working capital for the
first nine months of 2016 was a decrease of 830 million euros (decrease of 1,149 million euros in the first nine months of 2015). In particular:
|
|
the change in inventories and the management of trade receivables generated negative impacts of 71 million euros and 31 million euros, respectively;
|
|
|
the change in trade payables
(-425 million
euros) continued to reflect a seasonal peak in payments of bills payable;
|
|
|
other changes in operating receivables/payables
(-303 million
euros) included the effects of the increase in prepayments of costs related to the acquisition of Telecom Italia
S.p.A. customers.
|
Sale of investments and other disposals flow
This was positive by 737 million euros in the
first nine months of 2016 and related to the sale of the Sofora Telecom Argentina group for 704 million euros (545 million euros representing the price and 159 million euros for the deconsolidation of the related net financial
debt), with the remaining amount relating to disposals of assets as part of normal operations.
In the first nine months of 2015 it was positive by
1,554 million euros and mainly related to the proceeds of 855 million euros, already net of transaction costs, from the placement on the market of 39.97% of the share capital of Infrastrutture Wireless Italiane S.p.A. (INWIT), the proceeds
of 2,414 million reais (corresponding to around 686 million euros) realized by the Brazil Business Unit from the sale of the first tranche of telecommunications towers to American Tower do Brasil and the proceeds of 9 million euros
from the sale of the company SIA S.p.A..
Share capital increases/reimbursements, including incidental costs
In the first nine months of 2016, this item amounted
to zero.
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Consolidated Financial Position and Cash Flows Performance
|
|
28
|
In the first nine months of 2015, the item amounted to 186 million euros and related to the conversion
option of the 1.125% unsecured equity-linked bond amounting to 2 billion euros, issued on March 26, 2015 and maturing on March 26, 2022.
Financial investments flow
In the first nine months of 2016 this item amounted to 11 million euros and mainly consisted of around 6 million euros for the payment made by INWIT
S.p.A., net of the cash acquired, for the acquisition of the investments in Revi Immobili S.r.l., Gestione Immobili S.r.l. and Gestione Due S.r.l., and around 3 million euros for the subscription of the capital increase in the company Northgate
held as a
non-controlling
interest.
In the first nine months of 2015, this item amounted to 35 million euros
and mainly related to the outlay of 23 million euros for the acquisition of 50% of the share capital of the company Alfiere S.p.A., and 6 million euros for the acquisition of 100% of the share capital of the company Alfabook S.r.l..
Change in financial leasing contracts
This item, amounting to 178 million euros, essentially represents the higher value of assets under financial lease, which is partly a reflection of the
associated higher financial payables posted as a result of contractual renegotiations by Telecom Italia S.p.A. in the first nine months of 2016 within the real estate transformation project and the renegotiation of the car rental agreements.
In the first nine months of 2015, this item amounted to 1,367 million euros and essentially consisted of 1,018 million euros for Telecom Italia
S.p.A. and 1,207 million reais (around 343 million euros) for the Tim Brasil group. Further details are provided in the Note Tangible assets (owned and under finance leases) of the Condensed Consolidated Financial Statements at
September 30, 2016 of the Telecom Italia Group.
Finance expenses, income taxes and other net
non-operating
requirements flow
The item amounted to 1,648
millions euros and mainly included the payment, during the first nine months of 2016, of net finance expenses and income taxes, as well as the change in
non-operating
receivables and payables.
Reduction/(Increase) in net financial debt from Discontinued
operations/Non-current
assets held for sale
The item shows cash flow absorbed by the Sofora
Telecom Argentina group, equal to 38 million euros, before the disposal of the investment and the consequent deconsolidation of the relative net financial debt as of March 8, 2016. In the first nine months of 2015, this item amounted to a
negative 222 million euros.
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Consolidated Financial Position and Cash Flows Performance
|
|
29
|
Net financial debt
Net financial debt is composed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9/30/2016
|
|
|
12/31/2015
|
|
|
Change
|
|
|
(a)
|
|
|
(b)
|
|
|
(a-b)
|
|
Non-current
financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds
|
|
|
20,934
|
|
|
|
19,883
|
|
|
|
1,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts due to banks, other financial payables and liabilities
|
|
|
8,028
|
|
|
|
8,364
|
|
|
|
(336
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance lease liabilities
|
|
|
2,401
|
|
|
|
2,271
|
|
|
|
130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,363
|
|
|
|
30,518
|
|
|
|
845
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial liabilities (*)
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds
|
|
|
3,027
|
|
|
|
3,681
|
|
|
|
(654
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts due to banks, other financial payables and liabilities
|
|
|
2,016
|
|
|
|
2,390
|
|
|
|
(374
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance lease liabilities
|
|
|
223
|
|
|
|
153
|
|
|
|
70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,266
|
|
|
|
6,224
|
|
|
|
(958
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities directly associated with Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
348
|
|
|
|
(348
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Gross financial debt
|
|
|
36,629
|
|
|
|
37,090
|
|
|
|
(461
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities other than investments
|
|
|
(1
|
)
|
|
|
(3
|
)
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial receivables and other
non-current
financial
assets
|
|
|
(2,959
|
)
|
|
|
(2,986
|
)
|
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,960
|
)
|
|
|
(2,989
|
)
|
|
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities other than investments
|
|
|
(1,492
|
)
|
|
|
(1,488
|
)
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial receivables and other current financial assets
|
|
|
(491
|
)
|
|
|
(352
|
)
|
|
|
(139
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
(4,275
|
)
|
|
|
(3,559
|
)
|
|
|
(716
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,258
|
)
|
|
|
(5,399
|
)
|
|
|
(859
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets relating to Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
(227
|
)
|
|
|
227
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total financial assets
|
|
|
(9,218
|
)
|
|
|
(8,615
|
)
|
|
|
(603
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net financial debt carrying amount
|
|
|
27,411
|
|
|
|
28,475
|
|
|
|
(1,064
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reversal of fair value measurement of derivatives and related financial
assets/liabilities
|
|
|
(676
|
)
|
|
|
(1,197
|
)
|
|
|
521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net financial debt
|
|
|
26,735
|
|
|
|
27,278
|
|
|
|
(543
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Breakdown as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total adjusted gross financial debt
|
|
|
34,291
|
|
|
|
34,602
|
|
|
|
(311
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total adjusted financial assets
|
|
|
(7,556
|
)
|
|
|
(7,324
|
)
|
|
|
(232
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) of which current portion of medium/long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds
|
|
|
3,027
|
|
|
|
3,681
|
|
|
|
(654
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts due to banks, other financial payables and liabilities
|
|
|
1,213
|
|
|
|
1,482
|
|
|
|
(269
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance lease liabilities
|
|
|
223
|
|
|
|
153
|
|
|
|
70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The financial risk management policies of the Telecom Italia Group are aimed at minimizing market risks, fully hedging
exchange rate risk, and optimizing interest rate exposure through appropriate diversification of the portfolio, which is also achieved by using carefully selected derivative financial instruments. Such instruments, it should be stressed, are not
used for speculative purposes and all have an underlying, which is hedged.
In addition, to determine its exposure to interest rates, the Group sets an
optimum composition for the fixed-rate and variable-rate debt structure and uses derivative financial instruments to achieve that composition. Taking into account the Groups operating activities, the optimum mix of medium/long-term
non-current
financial liabilities has been established, on the basis of the nominal amount, at a range of 65% - 75% for the fixed-rate component and 25% - 35% for the variable-rate component.
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Consolidated Financial Position and Cash Flows Performance
|
|
30
|
In managing market risks, the Group has adopted Guidelines for the Management and control of financial
risk and mainly uses IRS and CCIRS derivative financial instruments.
To provide a better representation of the true performance of Net Financial
Debt, from 2009, in addition to the usual indicator (renamed Net financial debt carrying amount), a measure called Adjusted net financial debt has also been shown, which neutralizes the effects caused by the volatility of
financial markets. Given that some components of the fair value measurement of derivatives (contracts for setting the exchange and interest rate for contractual flows) and derivatives embedded in other financial instruments do not result in actual
monetary settlement, the Adjusted net financial debt excludes these purely accounting and
non-monetary
effects (including the effects resulting from the introduction of IFRS 13 Fair Value
Measurement from January 1, 2013) from the measurement of derivatives and related financial assets/liabilities.
Sales of receivables to factoring
companies
The sales of trade receivables to factoring companies finalized in the first nine months of 2016 resulted in a positive effect on net financial
debt at September 30, 2016 of 906 million euros (1,106 million euros at December 31, 2015).
Gross financial debt
Bonds
Bonds at September 30, 2016 were recognized
for 23,961 million euros (23,564 million euros at December 31, 2015). Their nominal repayment amount was 23,338 million euros, up 391 million euros compared to December 31, 2015 (22,947 million euros).
Changes in bonds over the first nine months of 2016 are shown below:
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of original currency)
|
|
Currency
|
|
|
Amount
|
|
|
Issue date
|
|
New issues
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia S.p.A. 750 million euros 3.625% maturing 1/19/2024
|
|
|
Euro
|
|
|
|
750
|
|
|
|
1/20/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia S.p.A. 1,000 million euros 3.625% maturing 5/25/2026
|
|
|
Euro
|
|
|
|
1,000
|
|
|
|
5/25/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia S.p.A. 1,000 million euros 3.000% maturing 9/30/2025
|
|
|
Euro
|
|
|
|
1,000
|
|
|
|
9/30/2016
|
|
|
|
|
|
(millions of original currency)
|
|
Currency
|
|
|
Amount
|
|
|
Repayment date
|
|
Repayments
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia S.p.A. 663 million euros 5.125%
(1)
|
|
|
Euro
|
|
|
|
663
|
|
|
|
1/25/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia S.p.A. 708 million euros 8.250%
(2)
|
|
|
Euro
|
|
|
|
708
|
|
|
|
3/21/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia S.p.A. 400 million euros, Euribor 3M+ 0.79%
|
|
|
Euro
|
|
|
|
400
|
|
|
|
6/7/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Net of buybacks by the Company of 337
million euros during 2014 and 2015.
|
(2)
|
Net of buybacks by the Company of 142
million euros during 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bond Name
|
|
Outstanding nominal
amount prior to the
buyback
(GBP)
|
|
|
Repurchased
nominal amount
(GBP)
|
|
|
Buyback price
|
|
|
Buyback
date
|
|
Buybacks
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia S.p.A. - 400 million British pounds, maturing May 2023, coupon 5.875%
|
|
|
400,000,000
|
|
|
|
25,000,000
|
|
|
|
111.000
|
%
|
|
|
6/29/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With regard to the Mandatory Convertible Bond issued by Telecom Italia Finance S.A. for 1,300 million euros with
mandatory conversion on maturity into Telecom Italia S.p.A. ordinary shares, on September 22, 2016 a voluntary conversion was executed for a nominal amount of 300,000 euros with respect to which 360,100 Telecom Italia S.p.A. ordinary shares
were delivered.
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Consolidated Financial Position and Cash Flows Performance
|
|
31
|
With reference to the Telecom Italia S.p.A. 2002-2022 bonds, reserved for subscription by employees of the Group,
at September 30, 2016, the nominal amount was equal to 200 million euros and remained unchanged compared to December 31, 2015.
Revolving Credit Facility and Term Loan
The following
table shows the composition and the drawdown of the committed credit lines available at September 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(billions of euros)
|
|
9/30/2016
|
|
|
12/31/2015
|
|
|
Agreed
|
|
|
Drawn down
|
|
|
Agreed
|
|
|
Drawn down
|
|
Revolving Credit Facility expiring May 2019
|
|
|
4.0
|
|
|
|
|
|
|
|
4.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revolving Credit Facility expiring March 2020
|
|
|
3.0
|
|
|
|
|
|
|
|
3.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
7.0
|
|
|
|
|
|
|
|
7.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia has two syndicated Revolving Credit Facilities for amounts of 4 billion euros and 3 billion euros
expiring May 24, 2019 and March 25, 2020 respectively, both not yet drawn down. The beneficial changes to the economic terms of the Revolving Credit Facilities took effect from January 4, 2016, together with the
two-year
extension to those facilities.
Telecom Italia also has access to:
|
|
a bilateral Term Loan from Banca Regionale Europea expiring July 2019 for 200 million euros, drawn down for the full amount;
|
|
|
a bilateral Term Loan from Cassa Depositi e Prestiti expiring April 2019, for 100 million euros, drawn down for the full amount;
|
|
|
two bilateral Term Loans from Mediobanca respectively for 200 million euros expiring in November 2019 and 150 million euros expiring in July 2020, drawn down for the full amount;
|
|
|
a bilateral Term Loan from ICBC expiring July 2020 for 120 million euros, drawn down for the full amount;
|
|
|
a bilateral Term Loan from Intesa Sanpaolo expiring August 2021 for 200 million euros, drawn down for the full amount;
|
|
|
an overdraft facility with Banca Popolare dellEmilia Romagna expiring July 2017 for 200 million euros, drawn down for the full amount.
|
Maturities of financial liabilities and average cost of debt
The average maturity of
non-current
financial liabilities (including the current portion of medium/long-term financial
liabilities due within 12 months) is 7.75 years.
The average cost of the Groups debt, considered as the cost for the year calculated on an annual
basis and resulting from the ratio of debt-related expenses to average exposure, is about 5.1%.
For details of the maturities of financial liabilities in
terms of expected nominal repayment amounts, as contractually agreed, see the Notes Financial liabilities
(non-current
and current) in the Condensed Consolidated Financial Statements at
September 30, 2016 of the Telecom Italia Group.
Current financial assets and liquidity margin
The Telecom Italia Groups available liquidity margin amounted to 12,767 million euros at September 30, 2016, corresponding to the sum of
Cash and cash equivalents and Current securities other than investments, totaling 5,767 million euros (5,047 million euros at December 31, 2015), and the committed credit lines, mentioned above, of which a
total of 7,000 million euros has not been drawn down. This margin is sufficient to cover Group financial liabilities due at least for the next 24 months.
In particular:
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Consolidated Financial Position and Cash Flows Performance
|
|
32
|
Cash and cash equivalents amounted to 4,275 million euros (3,559 million euros at December 31,
2015). The different technical forms used for the investment of liquidity as of September 30, 2016 can be analyzed as follows:
|
|
Maturities: investments have a maximum maturity of three months;
|
|
|
Counterparty risk: investments by the European companies are made with leading banking, financial and industrial institutions with high credit quality. Investments by the companies in South America are made with leading
local counterparties;
|
|
|
Country risk: deposits have been made mainly in major European financial markets.
|
Current securities other
than investments amounted to 1,492 million euros (1,488 million euros at December 31, 2015): These forms of investment represent alternatives to the investment of liquidity with the aim of improving returns. They include
259 million euros of Italian treasury bonds purchased by Telecom Italia S.p.A. and 482 million euros of Italian treasury bonds purchased by Telecom Italia Finance S.A.; 5 million euros of Italian Treasury Certificates (CCTs) (assigned
to Telecom Italia S.p.A. as the holder of trade receivables, as per Italian Ministry of the Economy and Finance Decree of 12/3/2012), and 610 million euros of bonds purchased by Telecom Italia Finance S.A. with different maturities, all with an
active market and consequently readily convertible into cash. The purchases of the above government bonds and CCTs, which, pursuant to Consob Communication DEM/11070007 of August 5, 2011, represent investments in Sovereign debt
securities, have been made in accordance with the Guidelines for the Management and control of financial risk adopted by the Telecom Italia Group since August 2012. In addition, the Brazil Business Unit made an investment for an
equivalent value of 136 million euros in a monetary fund that invests almost entirely in instruments in US dollars.
In the third quarter of 2016,
adjusted net financial debt decreased by 779 million euros compared to June 30, 2016 (27,514 million euros) due to the positive performance of operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9/30/2016
|
|
|
6/30/2016
|
|
|
Change
|
|
|
(a)
|
|
|
(b)
|
|
|
(a-b)
|
|
Net financial debt carrying amount
|
|
|
27,411
|
|
|
|
28,070
|
|
|
|
(659
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reversal of fair value measurement of derivatives and related financial
assets/liabilities
|
|
|
(676
|
)
|
|
|
(556
|
)
|
|
|
(120
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net financial debt
|
|
|
26,735
|
|
|
|
27,514
|
|
|
|
(779
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Breakdown as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total adjusted gross financial debt
|
|
|
34,291
|
|
|
|
32,920
|
|
|
|
1,371
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total adjusted financial assets
|
|
|
(7,556
|
)
|
|
|
(5,406
|
)
|
|
|
(2,150
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Consolidated Financial Position and Cash Flows Performance
|
|
33
|
CONSOLIDATED FINANCIAL STATEMENTS TELECOM ITALIA GROUP
For the year 2016, Telecom Italia continues on a voluntary basis to prepare and publish its Interim Management Report for the first and third
quarter of the year. The Interim Report at September 30, 2016 of the Telecom Italia Group includes the Condensed Consolidated Financial Statements at September 30, 2016, prepared in compliance with the IFRS issued by the IASB and endorsed
by the EU and, specifically, IAS 34 Interim Reports. The Condensed Consolidated Financial Statements at September 30, 2016 have not been audited.
The accounting policies and consolidation principles adopted in the preparation of the Condensed Consolidated Financial Statements at September 30,
2016 are the same as those adopted in the annual Consolidated Financial Statements at December 31, 2015 to which the reader is referred, except for the new standards and interpretations adopted by the Group since January 1, 2016, which
however did not have any impact on the Groups consolidated financial statements, as described in the notes to the Condensed Consolidated Financial Statements at September 30, 2016.
Within the Brazil Business Unit, Management identified that incorrect accounting entries were made in prior years in connection with the recognition of
service revenues from the sale of prepaid traffic. Such incorrect accounting entries, which did not have any impact neither in terms of net financial position nor on cash and cash equivalents, resulted in the early recognition of revenues with
respect to prepaid traffic not yet consumed. The comparative financial information as of December 31, 2015, as well as the third quarter of 2015 and the nine-month period ended September 30, 2015, have been therefore revised, with no
material impact on the figures under comparison.
The Telecom Italia Group, in addition to the conventional financial performance measures
established by IFRS, uses certain alternative performance measures in order to present a better understanding of the trend of operations and financial condition. Specifically, these alternative performance measures refer to: EBITDA; EBIT; the
organic change in revenues, EBITDA and EBIT; EBITDA margin and EBIT margin; and net financial debt carrying amount and adjusted net financial debt.
Moreover, the part entitled Business Outlook for the Year 2016 contains forward-looking statements in relation to the Groups intentions,
beliefs or current expectations regarding financial performance and other aspects of the Groups operations and strategies. Readers of the present Interim Report are reminded not to place undue reliance on forward-looking statements; actual
results may differ significantly from forecasts owing to numerous factors, the majority of which are beyond the scope of the Groups control.
MAIN CHANGES IN THE SCOPE OF CONSOLIDATION
During the first nine months of 2016, there were the following changes in the scope of consolidation:
|
|
Flash Fiber S.r.l. (Domestic Business Unit):
established on July 28, 2016;
|
|
|
Sofora Telecom Argentina group:
classified as Discontinued Operations (Discontinued
operations/Non-current
assets held for sale) was sold on March 8, 2016;
|
|
|
Revi Immobili S.r.l., Gestione Due S.r.l. and Gestione Immobili S.r.l. (Domestic Business Unit):
on January 11, 2016, INWIT S.p.A. purchased 100% of these companies, which therefore entered into the
Groups scope of consolidation.
|
The following changes in the scope of consolidation occurred during 2015:
|
|
INWIT S.p.A. (Domestic Business Unit):
established in January 2015;
|
|
|
Alfabook S.r.l. (Domestic Business Unit):
on July 1, 2015, Telecom Italia Digital Solution S.p.A. (now merged into Olivetti S.p.A.) acquired 100% of the company, which consequently entered the Groups
scope of consolidation;
|
|
|
TIM Real Estate S.r.l. (Domestic Business Unit):
established in November 2015.
|
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Consolidated Financial Statements Telecom Italia Group
|
|
34
|
Separate Consolidated Income Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
3rd Quarter
2016
|
|
|
3rd Quarter
2015
Revised
|
|
|
9 months to
9/30/ 2016
|
|
|
9 months to
9/30/ 2015
Revised
|
|
|
Change
(a-b)
|
|
|
|
|
(a)
|
|
|
(b)
|
|
|
amount
|
|
|
%
|
|
Revenues
|
|
|
4,843
|
|
|
|
4,777
|
|
|
|
13,939
|
|
|
|
14,878
|
|
|
|
(939
|
)
|
|
|
(6.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
58
|
|
|
|
75
|
|
|
|
165
|
|
|
|
206
|
|
|
|
(41
|
)
|
|
|
(19.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating revenues and other income
|
|
|
4,901
|
|
|
|
4,852
|
|
|
|
14,104
|
|
|
|
15,084
|
|
|
|
(980
|
)
|
|
|
(6.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of goods and services
|
|
|
(1,927
|
)
|
|
|
(1,968
|
)
|
|
|
(5,710
|
)
|
|
|
(6,340
|
)
|
|
|
630
|
|
|
|
9.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee benefits expenses
|
|
|
(752
|
)
|
|
|
(728
|
)
|
|
|
(2,303
|
)
|
|
|
(2,433
|
)
|
|
|
130
|
|
|
|
5.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating expenses
|
|
|
(256
|
)
|
|
|
(272
|
)
|
|
|
(757
|
)
|
|
|
(1,160
|
)
|
|
|
403
|
|
|
|
34.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in inventories
|
|
|
32
|
|
|
|
(64
|
)
|
|
|
65
|
|
|
|
(6
|
)
|
|
|
71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internally generated assets
|
|
|
154
|
|
|
|
163
|
|
|
|
479
|
|
|
|
477
|
|
|
|
2
|
|
|
|
0.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit before depreciation and amortization, capital gains (losses) and impairment
reversals (losses) on
non-current
assets (EBITDA)
|
|
|
2,152
|
|
|
|
1,983
|
|
|
|
5,878
|
|
|
|
5,622
|
|
|
|
256
|
|
|
|
4.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
(1,069
|
)
|
|
|
(1,034
|
)
|
|
|
(3,116
|
)
|
|
|
(3,164
|
)
|
|
|
48
|
|
|
|
1.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains/(losses) on disposals of
non-current
assets
|
|
|
1
|
|
|
|
69
|
|
|
|
14
|
|
|
|
348
|
|
|
|
(334
|
)
|
|
|
(96.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment reversals (losses) on
non-current
assets
|
|
|
(3
|
)
|
|
|
|
|
|
|
(8
|
)
|
|
|
|
|
|
|
(8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit (loss) (EBIT)
|
|
|
1,081
|
|
|
|
1,018
|
|
|
|
2,768
|
|
|
|
2,806
|
|
|
|
(38
|
)
|
|
|
(1.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of losses (profits) of associates and joint ventures accounted for using the equity
method
|
|
|
|
|
|
|
1
|
|
|
|
(2
|
)
|
|
|
1
|
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expenses) from investments
|
|
|
(1
|
)
|
|
|
10
|
|
|
|
6
|
|
|
|
14
|
|
|
|
(8
|
)
|
|
|
(57.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
|
309
|
|
|
|
442
|
|
|
|
2,321
|
|
|
|
2,023
|
|
|
|
298
|
|
|
|
14.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance expenses
|
|
|
(674
|
)
|
|
|
(930
|
)
|
|
|
(2,831
|
)
|
|
|
(3,993
|
)
|
|
|
1,162
|
|
|
|
29.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) before tax from continuing operations
|
|
|
715
|
|
|
|
541
|
|
|
|
2,262
|
|
|
|
851
|
|
|
|
1,411
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
(210
|
)
|
|
|
(196
|
)
|
|
|
(699
|
)
|
|
|
(391
|
)
|
|
|
(308
|
)
|
|
|
(78.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from continuing operations
|
|
|
505
|
|
|
|
345
|
|
|
|
1,563
|
|
|
|
460
|
|
|
|
1,103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
150
|
|
|
|
47
|
|
|
|
480
|
|
|
|
(433
|
)
|
|
|
(90.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) for the period
|
|
|
505
|
|
|
|
495
|
|
|
|
1,610
|
|
|
|
940
|
|
|
|
670
|
|
|
|
71.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Parent
|
|
|
477
|
|
|
|
334
|
|
|
|
1,495
|
|
|
|
367
|
|
|
|
1,128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests
|
|
|
28
|
|
|
|
161
|
|
|
|
115
|
|
|
|
573
|
|
|
|
(458
|
)
|
|
|
(79.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Consolidated Financial Statements Telecom Italia Group
|
|
35
|
Consolidated Statements of Comprehensive Income
In accordance with IAS 1
(Presentation of Financial
Statements
), the following consolidated statements of comprehensive income include the Profit (loss) for the period as shown in the Separate Consolidated Income Statements and all
non-owner
changes in
equity.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
|
|
3rd Quarter
2016
|
|
|
3rd Quarter
2015
Revised
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2015
Revised
|
|
Profit (loss) for the period
|
|
|
(a
|
)
|
|
|
505
|
|
|
|
495
|
|
|
|
1,610
|
|
|
|
940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other components of the Consolidated Statements of Comprehensive Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other components that subsequently will not be reclassified in the Separate Consolidated Income
Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remeasurements of employee defined benefit plans (IAS 19):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actuarial gains (losses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(118
|
)
|
|
|
56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effect
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32
|
|
|
|
(15
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b
|
)
|
|
|
|
|
|
|
|
|
|
|
(86
|
)
|
|
|
41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of other profits (losses) of associates and joint ventures accounted for using the equity
method:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effect
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other components that subsequently will not be reclassified in the Separate Consolidated
Income Statements
|
|
|
(d=b+c
|
)
|
|
|
|
|
|
|
|
|
|
|
(86
|
)
|
|
|
41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other components that subsequently will be reclassified in the Separate Consolidated Income
Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale
financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from fair value adjustments
|
|
|
|
|
|
|
11
|
|
|
|
2
|
|
|
|
87
|
|
|
|
(19
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss (profit) transferred to the Separate Consolidated Income Statements
|
|
|
|
|
|
|
(2
|
)
|
|
|
18
|
|
|
|
(71
|
)
|
|
|
(45
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effect
|
|
|
|
|
|
|
|
|
|
|
(2
|
)
|
|
|
(4
|
)
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(e
|
)
|
|
|
9
|
|
|
|
18
|
|
|
|
12
|
|
|
|
(48
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from fair value adjustments
|
|
|
|
|
|
|
(231
|
)
|
|
|
(161
|
)
|
|
|
(558
|
)
|
|
|
1,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss (profit) transferred to the Separate Consolidated Income Statements
|
|
|
|
|
|
|
67
|
|
|
|
326
|
|
|
|
312
|
|
|
|
(486
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effect
|
|
|
|
|
|
|
43
|
|
|
|
(47
|
)
|
|
|
41
|
|
|
|
(145
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(f
|
)
|
|
|
(121
|
)
|
|
|
118
|
|
|
|
(205
|
)
|
|
|
376
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences on translating foreign operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) on translating foreign operations
|
|
|
|
|
|
|
(87
|
)
|
|
|
(1,328
|
)
|
|
|
531
|
|
|
|
(1,708
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss (profit) on translating foreign operations transferred to the Separate Consolidated Income
Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
304
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effect
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(g
|
)
|
|
|
(87
|
)
|
|
|
(1,328
|
)
|
|
|
835
|
|
|
|
(1,709
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of other profits (losses) of associates and joint ventures accounted for using the equity
method:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss (profit) transferred to the Separate Consolidated Income Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effect
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(h
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other components that subsequently will be reclassified to the Separate Consolidated Income
Statements
|
|
|
(i=e+f+g+h
|
)
|
|
|
(199
|
)
|
|
|
(1,192
|
)
|
|
|
642
|
|
|
|
(1,381
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other components of the Consolidated Statements of Comprehensive Income
|
|
|
(k=d+i
|
)
|
|
|
(199
|
)
|
|
|
(1,192
|
)
|
|
|
556
|
|
|
|
(1,340
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income (loss) for the period
|
|
|
(a+k
|
)
|
|
|
306
|
|
|
|
(697
|
)
|
|
|
2,166
|
|
|
|
(400
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Parent
|
|
|
|
|
|
|
304
|
|
|
|
(431
|
)
|
|
|
2,030
|
|
|
|
(444
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests
|
|
|
|
|
|
|
2
|
|
|
|
(266
|
)
|
|
|
136
|
|
|
|
44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Consolidated Financial Statements Telecom Italia Group
|
|
36
|
Consolidated Statements of Financial Position
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
|
|
9/30/2016
(a)
|
|
|
12/31/2015
Revised
(b)
|
|
|
Change
(a-b)
|
|
|
1/1/2015
Revised
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
|
|
|
|
29,548
|
|
|
|
29,383
|
|
|
|
165
|
|
|
|
29,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets with a finite useful life
|
|
|
|
|
|
|
6,733
|
|
|
|
6,480
|
|
|
|
253
|
|
|
|
6,827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,281
|
|
|
|
35,863
|
|
|
|
418
|
|
|
|
36,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment owned
|
|
|
|
|
|
|
13,233
|
|
|
|
12,659
|
|
|
|
574
|
|
|
|
12,544
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets held under finance leases
|
|
|
|
|
|
|
2,358
|
|
|
|
2,208
|
|
|
|
150
|
|
|
|
843
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,591
|
|
|
|
14,867
|
|
|
|
724
|
|
|
|
13,387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
non-current
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in associates and joint ventures accounted for using the equity method
|
|
|
|
|
|
|
39
|
|
|
|
41
|
|
|
|
(2
|
)
|
|
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other investments
|
|
|
|
|
|
|
42
|
|
|
|
45
|
|
|
|
(3
|
)
|
|
|
43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
financial assets
|
|
|
|
|
|
|
2,960
|
|
|
|
2,989
|
|
|
|
(29
|
)
|
|
|
2,445
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Miscellaneous receivables and other
non-current
assets
|
|
|
|
|
|
|
2,096
|
|
|
|
1,778
|
|
|
|
318
|
|
|
|
1,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax assets
|
|
|
|
|
|
|
579
|
|
|
|
853
|
|
|
|
(274
|
)
|
|
|
1,118
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,716
|
|
|
|
5,706
|
|
|
|
10
|
|
|
|
5,256
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Non-current
assets
|
|
|
(a
|
)
|
|
|
57,588
|
|
|
|
56,436
|
|
|
|
1,152
|
|
|
|
55,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
|
|
|
|
|
325
|
|
|
|
254
|
|
|
|
71
|
|
|
|
313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and miscellaneous receivables and other current assets
|
|
|
|
|
|
|
5,440
|
|
|
|
5,112
|
|
|
|
328
|
|
|
|
5,617
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current income tax receivables
|
|
|
|
|
|
|
81
|
|
|
|
163
|
|
|
|
(82
|
)
|
|
|
101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities other than investments, financial receivables and other current financial
assets
|
|
|
|
|
|
|
1,983
|
|
|
|
1,840
|
|
|
|
143
|
|
|
|
1,611
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
4,275
|
|
|
|
3,559
|
|
|
|
716
|
|
|
|
4,812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,258
|
|
|
|
5,399
|
|
|
|
859
|
|
|
|
6,423
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
sub-total
|
|
|
|
|
|
|
12,104
|
|
|
|
10,928
|
|
|
|
1,176
|
|
|
|
12,454
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operations/Non-current
assets held for
sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of a financial nature
|
|
|
|
|
|
|
|
|
|
|
227
|
|
|
|
(227
|
)
|
|
|
165
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of a
non-financial
nature
|
|
|
|
|
|
|
|
|
|
|
3,677
|
|
|
|
(3,677
|
)
|
|
|
3,564
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,904
|
|
|
|
(3,904
|
)
|
|
|
3,729
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Current assets
|
|
|
(b
|
)
|
|
|
12,104
|
|
|
|
14,832
|
|
|
|
(2,728
|
)
|
|
|
16,183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
(a+b
|
)
|
|
|
69,692
|
|
|
|
71,268
|
|
|
|
(1,576
|
)
|
|
|
71,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Consolidated Financial Statements Telecom Italia Group
|
|
37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
|
|
9/30/2016
(a)
|
|
|
12/31/2015
Revised
(b)
|
|
|
Change
(a-b)
|
|
|
1/1/2015
Revised
|
|
Equity and Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity attributable to Owners of the Parent
|
|
|
|
|
|
|
19,414
|
|
|
|
17,554
|
|
|
|
1,860
|
|
|
|
18,068
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests
|
|
|
|
|
|
|
2,223
|
|
|
|
3,695
|
|
|
|
(1,472
|
)
|
|
|
3,516
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Equity
|
|
|
(c
|
)
|
|
|
21,637
|
|
|
|
21,249
|
|
|
|
388
|
|
|
|
21,584
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
financial liabilities
|
|
|
|
|
|
|
31,363
|
|
|
|
30,518
|
|
|
|
845
|
|
|
|
32,325
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee benefits
|
|
|
|
|
|
|
1,537
|
|
|
|
1,420
|
|
|
|
117
|
|
|
|
1,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities
|
|
|
|
|
|
|
436
|
|
|
|
323
|
|
|
|
113
|
|
|
|
438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provisions
|
|
|
|
|
|
|
643
|
|
|
|
551
|
|
|
|
92
|
|
|
|
720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Miscellaneous payables and other
non-current
liabilities
|
|
|
|
|
|
|
1,497
|
|
|
|
1,110
|
|
|
|
387
|
|
|
|
697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Non-current
liabilities
|
|
|
(d
|
)
|
|
|
35,476
|
|
|
|
33,922
|
|
|
|
1,554
|
|
|
|
35,236
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial liabilities
|
|
|
|
|
|
|
5,266
|
|
|
|
6,224
|
|
|
|
(958
|
)
|
|
|
4,686
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and miscellaneous payables and other current liabilities
|
|
|
|
|
|
|
7,183
|
|
|
|
7,882
|
|
|
|
(699
|
)
|
|
|
8,536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current income tax payables
|
|
|
|
|
|
|
130
|
|
|
|
110
|
|
|
|
20
|
|
|
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
sub-total
|
|
|
|
|
|
|
12,579
|
|
|
|
14,216
|
|
|
|
(1,637
|
)
|
|
|
13,258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities directly associated with Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of a financial nature
|
|
|
|
|
|
|
|
|
|
|
348
|
|
|
|
(348
|
)
|
|
|
43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of a
non-financial
nature
|
|
|
|
|
|
|
|
|
|
|
1,533
|
|
|
|
(1,533
|
)
|
|
|
1,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,881
|
|
|
|
(1,881
|
)
|
|
|
1,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities
|
|
|
(e
|
)
|
|
|
12,579
|
|
|
|
16,097
|
|
|
|
(3,518
|
)
|
|
|
14,776
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
(f=d+e
|
)
|
|
|
48,055
|
|
|
|
50,019
|
|
|
|
(1,964
|
)
|
|
|
50,012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Equity and Liabilities
|
|
|
(c+f
|
)
|
|
|
69,692
|
|
|
|
71,268
|
|
|
|
(1,576
|
)
|
|
|
71,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Consolidated Financial Statements Telecom Italia Group
|
|
38
|
Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2015
Revised
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from continuing operations
|
|
|
|
|
|
|
1,563
|
|
|
|
460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
3,116
|
|
|
|
3,164
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment losses (reversals) on
non-current
assets
(including investments)
|
|
|
|
|
|
|
9
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in deferred tax assets and liabilities
|
|
|
|
|
|
|
459
|
|
|
|
128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses (gains) realized on disposals of
non-current
assets
(including investments)
|
|
|
|
|
|
|
(15
|
)
|
|
|
(359
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of losses (profits) of associates and joint ventures accounted for using the equity
method
|
|
|
|
|
|
|
2
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in employee benefits
|
|
|
|
|
|
|
12
|
|
|
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in inventories
|
|
|
|
|
|
|
(71
|
)
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in trade receivables and net amounts due from customers on construction contracts
|
|
|
|
|
|
|
(31
|
)
|
|
|
315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in trade payables
|
|
|
|
|
|
|
(65
|
)
|
|
|
(871
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in current income tax receivables/payables
|
|
|
|
|
|
|
85
|
|
|
|
47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in miscellaneous receivables/payables and other assets/liabilities
|
|
|
|
|
|
|
(774
|
)
|
|
|
884
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from (used in) operating activities
|
|
|
(a
|
)
|
|
|
4,290
|
|
|
|
3,824
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of intangible assets
|
|
|
|
|
|
|
(1,125
|
)
|
|
|
(1,210
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of tangible assets
|
|
|
|
|
|
|
(2,160
|
)
|
|
|
(3,390
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total purchase of intangible and tangible assets on an accrual basis
|
|
|
|
|
|
|
(3,285
|
)
|
|
|
(4,600
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in amounts due for purchases of intangible and tangible assets
|
|
|
|
|
|
|
(180
|
)
|
|
|
806
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total purchase of intangible and tangible assets on a cash basis
|
|
|
|
|
|
|
(3,465
|
)
|
|
|
(3,794
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of control in subsidiaries or other businesses, net of cash acquired
|
|
|
|
|
|
|
(6
|
)
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions/disposals of other investments
|
|
|
|
|
|
|
(5
|
)
|
|
|
(29
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in financial receivables and other financial assets
|
|
|
|
|
|
|
(96
|
)
|
|
|
(893
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from sale that result in a loss of control of subsidiaries or other businesses, net of
cash disposed of
|
|
|
|
|
|
|
492
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from sale/repayment of intangible, tangible and other
non-current
assets
|
|
|
|
|
|
|
33
|
|
|
|
699
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from (used in) investing activities
|
|
|
(b
|
)
|
|
|
(3,047
|
)
|
|
|
(4,022
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in current financial liabilities and other
|
|
|
|
|
|
|
(140
|
)
|
|
|
787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from
non-current
financial liabilities (including
current portion)
|
|
|
|
|
|
|
3,313
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayments of
non-current
financial liabilities (including
current portion)
|
|
|
|
|
|
|
(3,267
|
)
|
|
|
(5,286
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital proceeds/reimbursements (including subsidiaries)
|
|
|
|
|
|
|
|
|
|
|
186
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid
|
|
|
|
|
|
|
(227
|
)
|
|
|
(204
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in ownership interests in consolidated subsidiaries
|
|
|
|
|
|
|
|
|
|
|
855
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from (used in) financing activities
|
|
|
(c
|
)
|
|
|
(321
|
)
|
|
|
338
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from (used in) Discontinued
operations/Non-current
assets held for sale
|
|
|
(d
|
)
|
|
|
(45
|
)
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate cash flows
|
|
|
(e=a+b+c+d
|
)
|
|
|
877
|
|
|
|
135
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash and cash equivalents at beginning of the period
|
|
|
(f
|
)
|
|
|
3,216
|
|
|
|
4,910
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net foreign exchange differences on net cash and cash equivalents
|
|
|
(g
|
)
|
|
|
182
|
|
|
|
(400
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash and cash equivalents at end of the period
|
|
|
(h=e+f+g
|
)
|
|
|
4,275
|
|
|
|
4,645
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Consolidated Financial Statements Telecom Italia Group
|
|
39
|
Additional Cash Flow Information
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2015
Revised
|
|
Income taxes (paid) received
|
|
|
(117
|
)
|
|
|
(186
|
)
|
|
|
|
|
|
|
|
|
|
Interest expense paid
|
|
|
(1,701
|
)
|
|
|
(1,855
|
)
|
|
|
|
|
|
|
|
|
|
Interest income received
|
|
|
624
|
|
|
|
699
|
|
|
|
|
|
|
|
|
|
|
Dividends received
|
|
|
7
|
|
|
|
3
|
|
Analysis of Net Cash and Cash Equivalents
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2015
Revised
|
|
Net cash and cash equivalents at beginning of the period
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - from continuing operations
|
|
|
3,559
|
|
|
|
4,812
|
|
|
|
|
|
|
|
|
|
|
Bank overdrafts repayable on demand from continuing operations
|
|
|
(441
|
)
|
|
|
(19
|
)
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - from Discontinued
operations/Non-current
assets held for sale
|
|
|
98
|
|
|
|
117
|
|
|
|
|
|
|
|
|
|
|
Bank overdrafts repayable on demand from Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,216
|
|
|
|
4,910
|
|
|
|
|
|
|
|
|
|
|
Net cash and cash equivalents at end of the period
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - from continuing operations
|
|
|
4,275
|
|
|
|
4,534
|
|
|
|
|
|
|
|
|
|
|
Bank overdrafts repayable on demand from continuing operations
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - from Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
112
|
|
|
|
|
|
|
|
|
|
|
Bank overdrafts repayable on demand from Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,275
|
|
|
|
4,645
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Consolidated Financial Statements Telecom Italia Group
|
|
40
|
OTHER
INFORMATION
Average salaried workforce
|
|
|
|
|
|
|
|
|
|
|
|
|
(equivalent number)
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2015
|
|
|
Change
|
|
Average salaried workforce Italy
|
|
|
47,344
|
|
|
|
49,129
|
|
|
|
(1,785
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average salaried workforce Outside Italy
|
|
|
11,054
|
|
|
|
12,147
|
|
|
|
(1,093
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total average salaried workforce
(1)
|
|
|
58,398
|
|
|
|
61,276
|
|
|
|
(2,878
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets held for sale - Sofora - Telecom
Argentina group
|
|
|
3,441
|
|
|
|
15,515
|
|
|
|
(12,074
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total average salaried workforce - including
Non-current
assets held for sale
|
|
|
61,839
|
|
|
|
76,791
|
|
|
|
(14,952
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1)
|
Includes employees with temp work contracts: 4 average employees in the first nine months of 2016 (2 in Italy and 2 outside Italy). In the first nine months of 2015 it included 3 average employees (2 in Italy and 1
outside Italy).
|
Headcount at period end
|
|
|
|
|
|
|
|
|
|
|
|
|
(number)
|
|
9/30/2016
|
|
|
12/31/2015
|
|
|
Change
|
|
Headcount Italy
|
|
|
52,007
|
|
|
|
52,555
|
|
|
|
(548
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Headcount Outside Italy
|
|
|
10,198
|
|
|
|
13,312
|
|
|
|
(3,114
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total headcount at period end
(1)
|
|
|
62,205
|
|
|
|
65,867
|
|
|
|
(3,662
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets held for sale - Sofora - Telecom
Argentina group
|
|
|
|
|
|
|
16,228
|
|
|
|
(16,228
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total headcount at period end - including
Non-current
assets held for sale
|
|
|
62,205
|
|
|
|
82,095
|
|
|
|
(19,890
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1)
|
Includes employees with temp work contracts: 4 at 9/30/2016 and 3 at 12/31/2015.
|
Headcount at period end
Breakdown by Business Unit
|
|
|
|
|
|
|
|
|
|
|
|
|
(number)
|
|
9/30/2016
|
|
|
12/31/2015
|
|
|
Change
|
|
Domestic
(
*
)
|
|
|
52,140
|
|
|
|
52,644
|
|
|
|
(504
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brazil
|
|
|
9,941
|
|
|
|
13,042
|
|
|
|
(3,101
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media
|
|
|
|
|
|
|
64
|
|
|
|
(64
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Operations
|
|
|
124
|
|
|
|
117
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
62,205
|
|
|
|
65,867
|
|
|
|
(3,662
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
Following the change in the business
mission of Persidera, the Media Business Unit was incorporated into the Domestic Business Unit (Core Domestic) as of January 1, 2016; without that change, the headcount
at the end of the period of the Domestic Business Unit would have been 52,077.
|
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Consolidated Financial Statements Telecom Italia Group
|
|
41
|
EVENTS SUBSEQUENT TO SEPTEMBER 30, 2016
For details of subsequent events see the specific Note Events Subsequent to September 30, 2016 in the Telecom Italia Group Condensed
Consolidated Financial Statements at September 30, 2016.
BUSINESS OUTLOOK FOR THE YEAR 2016
As forecast in the Business Plan, and achieved in the first nine months of the year, we expected a progressive improvement in operating performance in the
Domestic perimeter in 2016, which has supported the expected progressive reduction of the debt, also thanks in part to the conversion of the Mandatory Convertible Bond (contractually set for November 2016 in the amount of 1.3 billion euros).
The dynamics of commercial and business development, accompanied by the strengthening and acceleration of the efficiency and cost cutting program
without reducing the push on the levers that underpin commercial and infrastructure development represent the foundation for a further improvement in operating performance, with the aim of achieving low single digit organic growth in EBITDA
within 2016.
In detail, Telecom Italia continues in Italy its transformation and transition from traditional Telco to Digital Telco, enabler of the
countrys digital life: a business model based on the development of innovative infrastructure and an excellent quality of customer service, increasingly aimed at disseminating premium services and digital content, with a distinct positioning
in the market.
|
|
In the Domestic Mobile segment, in a competitive context where there has been a progressive cooling of the pricing lever, greater attention paid to quality and strong, continuous growth in data consumption, Telecom
Italia will be focusing on the ever-greater adoption of 4G by its customers, fostered by the growing penetration of smartphones and the development of bundle offers with distinctive and converging digital content. This will enable the Company
strengthen its market leadership by building customer loyalty and increasing ARPU levels.
|
|
|
In the Domestic Fixed segment, Telecom Italia expects to reduce the decline in the number of customers as from 2016, thanks to the acceleration in the dissemination of fiber, convergence and the strengthening of the
positioning of services with digital content (Video, Music, Gaming and Publishing). Telecom Italia will also continue to work with Italian businesses in their digital transformation process, with its ICT and Cloud services, taking a differentiated
approach depending on customer base characteristics, aiming to achieve a distinctive positioning in the vertical markets deemed to be of greatest interest.
|
In this still uncertain macroeconomic, political and market context, TIM Brasil has set itself the objective of defending and increasing its market share on
revenues and improving its profitability (EBITDA margin), thanks to a major investment plan (in particular in 4G, where TIM is already leader today), and to a renewed commercial and competitive positioning and great attention to efficiency and cost
cutting, as a structural element needed to give balance and financial sustainability to the Plan.
The whole of the Brazilian telecommunications segment
(and prepaid Mobile in particular) is very exposed to this difficult macroeconomic scenario and has suffered a decline in the overall value of the market, also as a result of its substantial maturity and saturation. In this context, Oi, the fourth
largest telecommunications group in Brazil, filed for bankruptcy in June, entering into receivership, with repercussions on competition and impacts on the market that are as yet uncertain.
The evolution of the Brazilian market presents and confirms a trend of constant, strong growth in data usage, with an intensity that is even greater than that
recorded in the other major countries. This phenomenon goes
hand-in-hand
with a simultaneous reduction of voice traffic and messaging, driven by the aim of optimizing
and reducing customer spending, as customers privilege use of the services offered by the OTTs as an alternative to traditional methods of using services.
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Business outlook for 2016
|
|
42
|
MAIN RISKS AND UNCERTAINTIES
The business outlook for 2016 could be affected by risks and uncertainties caused by a multitude of factors, the majority of which are beyond the Groups
control.
In such a scenario, risk management becomes a strategic tool for value creation. The Telecom Italia Group has adopted an Enterprise Risk
Management Model based on the methodology of the Committee of Sponsoring Organizations of the Treadway Commission (ERM CoSO Report), which enables the identification and management of risk in a uniform manner within the Group companies, highlighting
potential synergies between the actors involved in the assessment of the Internal Control and Risk Management System. The ERM process is designed to identify potential events that may affect the business, to manage risk within acceptable limits and
to provide reasonable assurance regarding the achievement of corporate objectives.
The main risks affecting the business activities of the Telecom Italia
Group, which may impact, even significantly, the ability to achieve the
pre-set
objectives are presented below.
STRATEGIC RISKS
Risks related to macro economic factors
The Groups economic and financial situation is subject to the influence of numerous macroeconomic factors such as economic growth, political stability,
consumer confidence, and changes in interest rates and exchange rates in the markets in which it operates. The expected results may be affected, in the domestic market, by the struggling economic recovery associated with a high rate of unemployment
and the consequent reduction in income available for consumption. In the Brazilian market, the expected results may be affected by the further deterioration of the macroeconomic environment, with the country currently in economic recession, and the
accompanying deterioration in operating conditions. These factors mean that the possibility of consequent goodwill impairment losses cannot be ruled out.
In addition, the Telecom Italia Group is currently undertaking projects and transactions, including corporate and extraordinary transactions, whose
feasibility and completion could be affected by factors outside the control of management, such as political and regulatory factors, currency exchange restrictions, bureaucratic regulations etc. As a result, the financial outcomes of these project
and transactions may differ, even significantly, from expectations.
Risks related to competition
The telecommunications market is characterized by
strong competition that may reduce our share in the geographical areas we operate in as well as lower prices and margins. Competition is focused, on one hand, on innovative products and services and, on other hand, on the price of traditional
services. In addition, in the area of infrastructure competition, the growth of alternative operators could represent a threat for Telecom Italia, particularly in the years of the plan after 2016 and also beyond the Plan period. In the Brazilian
market the trend in the telecommunications industry is changing rapidly, amplifying the deterioration in the macroeconomic environment. The competition risk consists of the increased acceleration in the process of replacement of traditional services
with innovative services, and the downsizing of consumption by customers (e.g. reduction in
multi-SIM
customers). In this scenario, the Tim Brasil group may be further impacted in the short term to a greater
extent than its main competitors, due to the higher proportion of customers with prepaid services, which are more affected by the current macroeconomic situation.
OPERATIONAL RISKS
Operational risks inherent in our business relate to possible inadequacies in internal processes, external factors, frauds, employee errors, errors in properly
documenting transactions, loss of critical or commercially sensitive data and failures in systems and/or network platforms.
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Main risks and uncertainties
|
|
43
|
Risks related to business continuity
The Groups success depends heavily on the
ability to deliver the services we provide through the IT infrastructure and network on a continuous and uninterrupted basis. The infrastructure is susceptible to interruptions due to failures of information and communication technologies, lack of
electricity, floods, storms and human errors. Unexpected problems in installations, system failures, hardware and software failures, computer viruses or cyber attacks could affect the quality of services and cause service interruptions. Each of
these events could result in a reduction in traffic and a reduction in revenues and/or in an increase of restoration costs, with an adverse impact on the level of customer satisfaction and number of customers, as well as our reputation.
Risks related to the development of fixed and mobile networks
To maintain and expand the Groups customer
portfolio in each of the markets in which it operates, it is necessary to maintain, update and improve existing networks in a timely manner. A reliable and high quality network is necessary to maintain the customer base and minimize the terminations
to protect the Companys revenues from erosion. The maintenance and improvement of existing installations depend on our ability to:
|
|
upgrade the capabilities of the networks to provide customers with services that are closer to their needs; in the regard the Group may be engaged in the participation in tenders for broadcasting frequencies whose
outcomes, in terms of financial requirements, may differ, even significantly, from expectations;
|
|
|
increase the geographical coverage of innovative services;
|
|
|
upgrade the structure of the systems and the networks to adapt it to new technologies.
|
Risks of
internal/external fraud
The Group has adopted an
organizational model to prevent fraud. However, the implementation of this model cannot ensure the total mitigation of the risk. Dishonest activities and illegal acts committed by people inside and outside the organization could adversely affect the
Companys operating results, financial position and image.
Risks related to disputes and litigation
The Group has to deal with disputes and litigation
with tax authorities, regulators, competition authorities, other telecommunications operators and other entities. The possible impacts of such proceedings are generally uncertain. In the event of settlement unfavorable to the Group, these issues
may, individually or as whole, have an adverse effect, which may even be significant, on its operating results, financial position and cash flows.
FINANCIAL RISKS
The Telecom Italia Group may be exposed to financial risks such as risks arising from fluctuations in interest rates and exchange rates, credit risk, liquidity
risk and risks related to the performance of the equity markets in general, and more specifically risks related to the performance of the share price of the Group companies. The result of the Brexit referendum in the United
Kingdom increases the probability of systemic risk. These risks may adversely impact the earnings and the financial structure of the Group. Accordingly, to manage those risks, Telecom Italia Group has established guidelines, at central level, which
must be followed for operational management, identification of the most suitable financial instruments to meet set goals, and monitoring the results achieved. In particular, in order to mitigate the liquidity risk, the Group aims to maintain an
adequate level of financial flexibility, in terms of cash and syndicated committed credit lines, enabling it to cover refinancing requirements at least for the next 12
-
18 months.
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Main risks and uncertainties
|
|
44
|
REGULATORY AND COMPLIANCE RISKS
Regulatory risks
The telecommunications industry is highly regulated.
In this context, new decisions by the regulator and changes in the regulatory environment may affect the expected results of the Group. More specifically, the elements which introduce uncertainty are:
|
|
lack of predictability in the timing of the introduction and consequent results of new processes;
|
|
|
decisions with retroactive effect (i.e. revision of prices relating to prior years as a result of an administrative judgment) with potential impact on the timing of return on investment;
|
|
|
decisions that can influence the technological choices made and to be made, with potential impact on the timing of return on investment.
|
Telecom Italia is currently implementing the project, launched in 2015, to further improve the guarantees for equal treatment of retail and wholesale
customers. This project is aimed at improving both the equivalence model and the tools used to assess the process of providing wholesale services. The project and the related implementation roadmap were approved by the Board of Directors of Telecom
Italia on November 5, 2015. The risk is associated with the assessment of the effectiveness of Telecom Italias project by the designated organizations (AGCom and AGCM). The positive assessment of the implementation of the equivalence
project is a necessary condition for the termination of the A428 proceedings for failure to provide services, with consequent removal of the associated sanction risk.
Compliance risks
The Telecom Italia Group may be exposed to risks of
non-compliance
due to
non-observance/
breach of internal (self-regulation such as, for example, bylaws, code of ethics) and external rules (laws and regulations), with consequent judicial or administrative penalties, financial
losses or reputational damage.
The Group aims to ensure that processes, procedures, systems and corporate conduct comply with legal requirements. The
risk is associated with potential time lags in making the processes compliant when
non-conformity
has been identified.
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Main risks and uncertainties
|
|
45
|
CORPORATE BOARDS AT SEPTEMBER 30, 2016
BOARD OF DIRECTORS
The shareholders meeting held on
April 16, 2014 appointed the Board of Directors of the Company for the three years 2014-2016, until the approval of the financial statements for the year ended December 31, 2016, to be composed of 13 directors. The same shareholders
meeting also appointed Giuseppe Recchi as Chairman of the Companys Board of Directors.
Subsequently, the Shareholders Meeting of
December 15, 2015 resolved to increase the number of members of the Board of Directors from 13 to 17, appointing four new directors (Arnaud Roy de Puyfontaine, Stéphane Roussel, Hervé Philippe and Félicité Herzog),
with the same term in office as the existing directors.
The Chief Executive Officer, Marco Patuano, (who had been appointed on April 18, 2014)
resigned with effect from March 22, 2016. On March 30, 2016, the Board of Directors appointed Flavio Cattaneo, already a board director of the Company, to replace him as Chief Executive Officer.
On April 27, 2016, the Board of Directors appointed the director Arnaud de Puyfontaine as Vice Chairman of the Company, without assigning him any
delegated powers.
As a result, the Board of Directors of the Company at September 30, 2016 was composed as follows:
|
|
|
Chairman
|
|
Giuseppe Recchi
|
|
|
Deputy Chairman
|
|
Arnaud Roy de Puyfontaine
|
|
|
Chief Executive Officer
|
|
Flavio Cattaneo
|
|
|
Directors
|
|
Tarak Ben Ammar
Davide Benello (Lead
Independent Director)
Lucia Calvosa (independent)
Laura Cioli
(independent)
Francesca Cornelli (independent)
Jean Paul
Fitoussi
Giorgina Gallo (independent)
Félicité
Herzog (independent)
Denise Kingsmill (independent)
Luca
Marzotto (independent)
Hervé Philippe
Stéphane
Roussel
Giorgio Valerio (independent)
|
The General Counsel and Secretary of the Board of Directors, Antonino Cusimano, left the Telecom Italia Group at the end of
September 2016.
All the Board of Directors members are domiciled for the positions they hold in Telecom Italia at the registered offices of the
Company in Milan, Via G. Negri 1.
The following board committees were in place at September 30, 2016:
|
|
Control and Risk Committee: composed of the Directors: Lucia Calvosa (Chair appointed in the meeting of May 8, 2014), Laura Cioli, Francesca Cornelli, Giorgina Gallo, and Félicité Herzog (appointed by
the Board of Directors on February 15, 2016, which also decided to increase the number of members of the committee from 5 to 6) and Giorgio Valerio;
|
|
|
Nomination and Remuneration Committee: composed of the Directors: Davide Benello (Chair appointed in the meeting of May 9, 2014), Luca Marzotto, Arnaud de Puyfontaine and Stéphane Roussel (appointed on
February 15, 2016 by the Board of Directors, which accepted the resignation of Jean Paul Fitoussi and decided to increase the number of members of the committee from 4 to 5), and Giorgio Valerio (appointed on June 20, 2016 by the Board of
Directors, to replace the director Denise Kingsmill, who resigned on June 15, 2016);
|
|
|
Strategy Committee: composed
of the Chairman of the Board of Directors, Giuseppe Recchi, the Chief Executive Officer, Flavio Cattaneo, and the Deputy Chairman, Arnaud de Puyfontaine (who was appointed Chairman of
the Committee in the meeting of September 30, 2016), and the Directors Davide Benello and Laura Cioli.
|
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Corporate Boards at September 30, 2016
|
|
46
|
BOARD OF
STATUTORY AUDITORS
The ordinary shareholders meeting of May 20, 2015 appointed the Companys Board of Statutory Auditors with a term up to
the approval of the 2017 financial statements.
The Board of Statutory Auditors of the Company is now composed as follows:
|
|
|
Chairman
|
|
Roberto Capone
|
|
|
Acting Auditors
|
|
Vincenzo Cariello
|
|
|
Paola Maiorana
|
|
|
Gianluca Ponzellini
|
|
|
Ugo Rock
|
|
|
Alternate Auditors
|
|
Francesco Di Carlo
|
|
|
Gabriella Chersicla
|
|
|
Piera Vitali
|
|
|
Riccardo Schioppo
|
INDEPENDENT AUDITORS
The shareholders meeting held on
April 29, 2010 appointed the audit firm PricewaterhouseCoopers S.p.A. to audit the Telecom Italia financial statements for the nine-year period 2010-2018.
MANAGER RESPONSIBLE FOR PREPARING THE CORPORATE
FINANCIAL REPORTS
At the meeting of April 18, 2014, the Board of Directors confirmed Piergiorgio Peluso (Head of the Group Administration, Finance
and Control Function) as the manager responsible for preparing Telecom Italias financial reports.
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Corporate Boards at September 30, 2016
|
|
47
|
MACRO-ORGANIZATION CHART AT SEPTEMBER 30, 2016
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Macro-Organization Chart at September 30, 2016
|
|
48
|
INFORMATION FOR INVESTORS
The Group attaches great importance to the quality of the information on its activities provided to the financial markets, investors and all its stakeholders.
Subject to the requirements of confidentiality dictated by the running of the business and statutory obligations, this communication takes place in full compliance with the criteria of transparency, fairness, clarity, timeliness and equality of
access. The Company has also established specific communication channels for shareholders, bondholders and other stakeholders who are interested in obtaining financial and
non-financial
information on the
Group.
TELECOM ITALIA S.P.A. SHARE CAPITAL AT SEPTEMBER 30, 2016
|
|
|
|
|
Share capital
|
|
|
10,740,434,963.50 euros
|
|
|
|
|
|
|
Number of ordinary shares (without nominal value)
|
|
|
13,500,271,871
|
|
|
|
|
|
|
Number of savings shares (without nominal value)
|
|
|
6,027,791,699
|
|
|
|
|
|
|
Number of Telecom Italia S.p.A. ordinary treasury shares
|
|
|
37,672,014
|
|
|
|
|
|
|
Number of Telecom Italia S.p.A. ordinary shares held by Telecom Italia Finance S.A.
|
|
|
126,082,374
|
|
|
|
|
|
|
Percentage of ordinary treasury shares held by the Group to total share capital
|
|
|
0.84
|
%
|
|
|
|
|
|
Market capitalization (based on September 2016 average prices)
|
|
|
14,154 million euros
|
|
|
|
|
|
|
Regarding the trading of shares issued by Group companies on regulated markets, the ordinary and savings shares of Telecom
Italia S.p.A. are listed in Italy (FTSE index), as well as the ordinary shares of INWIT S.p.A., whereas the ordinary shares of Tim Participações S.A. are listed in Brazil (BOVESPA index).
The ordinary and savings shares of Telecom Italia S.p.A., and the ordinary shares of Tim Participações S.A. are also listed on the NYSE (New
York Stock Exchange); trading occurs through ADS (American Depositary Shares) that respectively represent 10 ordinary shares and 10 savings shares of Telecom Italia S.p.A. and 5 ordinary shares of Tim Participações S.A..
SHAREHOLDERS
Composition of Telecom Italia S.p.A. shareholders
according to the Shareholders Book at September 30, 2016, supplemented by communications received and other available sources of information (ordinary shares):
With effect from June 17, 2015, the shareholder agreement in place between the shareholders of Telco S.p.A. was
dissolved, as disclosed by public notices in accordance with the applicable regulations. As a result, there are no longer any significant shareholder agreements for Telecom Italia pursuant to Article 122 of Italian Legislative Decree 58/1998.
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Information for Investors
|
|
49
|
MAJOR
HOLDINGS IN SHARE CAPITAL
At September 30, 2016, taking into account the results in the Shareholders Book, communications sent to Consob and the
Company pursuant to Article 120 of Italian Legislative Decree 58 dated February 24, 1998, and other sources of information, the principal shareholders of Telecom Italia S.p.A. ordinary share capital are as follows:
|
|
|
|
|
|
|
|
|
Holder
|
|
Type of ownership
|
|
|
Percentage of ownership
|
|
Vivendi S.A.
|
|
|
Direct
|
|
|
|
24.68
|
%
|
|
|
|
|
|
|
|
|
|
On March 19, 2016, Blackrock Inc. notified Consob that, as an asset management company, it indirectly held a quantity of
ordinary shares equal to 3.69% of the total ordinary shares of Telecom Italia S.p.A. at September 30, 2016.
BlackRock Inc. also reported the
reduction in that holding to 3.38% on October 21, 2016.
COMMON REPRESENTATIVES
|
|
The special meeting of the savings shareholders held on June 16, 2016 renewed the appointment of Dario Trevisan as the common representative for three financial years, up to the approval of the financial statements
for the year ended December 31, 2018.
|
|
|
By decree of April 11, 2014, the Milan Court confirmed the appointment of Enrico Cotta Ramusino (already appointed by decree of March 7, 2011) as the common representative of the bondholders for the
Telecom Italia S.p.A. 2002-2022 bonds at variable rates, open special series, reserved for subscription by employees of the Telecom Italia Group, in service or retired, with a mandate for the three-year period 2014-2016.
|
|
|
By decree of June 12, 2015, the Milan Court appointed Monica Iacoviello as the common representative of the bondholders for the Telecom Italia S.p.A. 1,250,000,000 euros 5.375 percent Notes due
2019 up to the approval of the 2017 Annual Report.
|
RATING AT SEPTEMBER 30, 2016
At September 30, 2016, the three rating agencies Standard & Poors, Moodys and Fitch Ratings rated Telecom Italia as
follows:
|
|
|
|
|
|
|
Rating
|
|
Outlook
|
STANDARD & POORS
|
|
BB+
|
|
Stable
|
MOODYS
|
|
Ba1
|
|
Negative
|
FITCH RATINGS
|
|
BBB-
|
|
Stable
|
WAIVER OF THE OBLIGATION TO PUBLISH DISCLOSURE DOCUMENTS FOR EXTRAORDINARY OPERATIONS
On January 17, 2013, the Board of Directors of Telecom Italia S.p.A. resolved to exercise the option, as per article 70 (8) and article 71 (1 bis) of the
Consob Regulation 11971/99, to waive the obligations to publish disclosure documents in the event of significant operations such as mergers, demergers, capital increases by means of the transfer of assets in kind, acquisitions and disposals.
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Information for Investors
|
|
50
|
SIGNIFICANT
NON-RECURRING
EVENTS AND
TRANSACTIONS
The effect of significant
non-recurring
events and transactions on the results of the Telecom Italia
Group is reported below.
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2015
|
|
Acquisition of goods and services:
|
|
|
|
|
|
|
|
|
Sundry expenses
|
|
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
Employee benefits expenses:
|
|
|
|
|
|
|
|
|
Expenses related to restructuring and rationalization
|
|
|
(128
|
)
|
|
|
(48
|
)
|
|
|
|
|
|
|
|
|
|
Other operating expenses:
|
|
|
|
|
|
|
|
|
Expenses related to disputes and regulatory penalties and liabilities related to those expenses,
and expenses related to disputes with former employees and liabilities with customers and/or suppliers
|
|
|
(25
|
)
|
|
|
(400
|
)
|
|
|
|
|
|
|
|
|
|
Change in inventories
|
|
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
Impact on Operating profit (loss) before depreciation and amortization, capital gains (losses) and
impairment reversals (losses) on
non-current
assets (EBITDA)
|
|
|
(153
|
)
|
|
|
(460
|
)
|
|
|
|
|
|
|
|
|
|
Gains (losses) on
non-current
assets:
|
|
|
|
|
|
|
|
|
Gains on disposals of
non-current
assets
|
|
|
9
|
|
|
|
336
|
|
|
|
|
|
|
|
|
|
|
Impact on EBIT Operating profit (loss)
|
|
|
(144
|
)
|
|
|
(124
|
)
|
|
|
|
|
|
|
|
|
|
Other income (expenses) from investments:
|
|
|
|
|
|
|
|
|
Income and gains on disposals of other investments
|
|
|
|
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
Finance expenses:
|
|
|
|
|
|
|
|
|
Interest expenses and miscellaneous finance expenses
|
|
|
(18
|
)
|
|
|
(18
|
)
|
|
|
|
|
|
|
|
|
|
Impact on profit (loss) before tax from continuing operations
|
|
|
(162
|
)
|
|
|
(131
|
)
|
|
|
|
|
|
|
|
|
|
Effect on income taxes on
non-recurring
items
|
|
|
48
|
|
|
|
25
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations Effect of the disposal of the Sofora Telecom Argentina
group
|
|
|
(12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact on profit (loss) for the period
|
|
|
(126
|
)
|
|
|
(106
|
)
|
|
|
|
|
|
|
|
|
|
POSITIONS OR TRANSACTIONS RESULTING FROM ATYPICAL AND/OR UNUSUAL OPERATIONS
In the first nine months of 2016, the Telecom Italia Group did not perform any atypical and/or unusual transactions, as defined by Consob Communication
DEM/6064293 of July 28, 2006.
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Significant non-recurring events and transactions
|
|
51
|
ALTERNATIVE PERFORMANCE MEASURES
In this Interim Report at September 30, 2016 of the Telecom Italia Group, in addition to the conventional financial performance measures established by
IFRS, certain
alternative performance measures
are presented for purposes of a better understanding of the trend of operations and financial condition. Such measures, which are also presented in other periodical financial reports (annual and
interim) should, however, not be construed as a substitute for those required by IFRS.
The alternative performance measures used are described below:
|
|
EBITDA
: this financial measure is used by Telecom Italia as the financial target in internal presentations (business plans) and in external presentations (to analysts and investors). It represents a useful unit
of measurement for the evaluation of the operating performance of the Group (as a whole and at the Business Unit level), in addition to EBIT. These measures are calculated as follows:
|
Profit (loss) before tax from continuing operations
|
|
|
+
|
|
Finance expenses
|
-
|
|
Finance income
|
+/-
|
|
Other expenses (income) from investments
|
+/-
|
|
Share of losses (profits) of associates and joint ventures accounted for using the equity method
|
EBIT - Operating profit (loss)
|
+/-
|
|
Impairment losses (reversals) on
non-current
assets
|
+/-
|
|
Losses (gains) on disposals of
non-current
assets
|
+
|
|
Depreciation and amortization
|
EBITDA - Operating profit (loss) before depreciation and amortization, Capital gains (losses) and Impairment reversals
(losses) on
non-current
assets
|
|
Organic change in Revenues, EBITDA and EBIT: these measures express changes (amount and/or percentage) in revenues, EBITDA and EBIT, excluding, where applicable, the effects of the change in the scope of consolidation
and exchange differences.
|
Telecom Italia believes that the presentation of the organic change in revenues, EBITDA and EBIT
allows for a more complete and effective understanding of the operating performance of the Group (as a whole and at the Business Unit level). This method of presenting information is also used in presentations to analysts and investors. This Interim
Report provides a reconciliation between the accounting or reported figure and the organic figure.
|
|
EBITDA margin and EBIT margin: Telecom Italia believes that these margins represent useful indicators of the Groups ability, as a whole and at Business Unit level, to generate profits from its revenues. In fact,
EBITDA margin and EBIT margin measure the operating performance of an entity by analyzing the percentage of revenues that are converted, respectively, into EBITDA and EBIT. Such indicators are used by Telecom Italia in internal presentations
(business plans) and in external presentations (to analysts and investors) in order to illustrate the results from operations also through the comparison of the operating results of the reporting period with those of the previous periods.
|
|
|
Net Financial Debt: Telecom Italia believes that Net Financial Debt represents an accurate indicator of its ability to meet its financial obligations. It is represented by Gross Financial Debt less Cash and Cash
Equivalents and other Financial Assets. This Interim Report includes a table showing the amounts taken from the statement of financial position and used to calculate the Net Financial Debt of the Group.
|
To better represent the real performance of Net Financial Debt, in addition to the usual indicator (called Net financial debt carrying
amount), Adjusted net financial debt is also shown, which excludes effects that are purely accounting and
non-monetary
in nature deriving from the fair value measurement of derivatives and
related financial assets and liabilities.
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Alternative Performance Measures
|
|
52
|
Net financial debt is calculated as follows:
|
|
|
+
|
|
Non-current
financial liabilities
|
+
|
|
Current financial liabilities
|
+
|
|
Financial liabilities directly associated with Discontinued
operations/Non-current
assets held for sale
|
A)
|
|
Gross financial debt
|
+
|
|
Non-current
financial assets
|
+
|
|
Current financial assets
|
+
|
|
Financial assets relating to Discontinued
operations/Non-current
assets held for sale
|
B)
|
|
Financial assets
|
C=(A - B)
|
|
Net financial debt carrying amount
|
D)
|
|
Reversal of fair value measurement of derivatives and related financial assets/liabilities
|
E=(C + D)
|
|
Adjusted net financial debt
|
|
|
|
|
|
Interim Management Report
at September 30,
2016
|
|
Alternative Performance Measures
|
|
53
|
CONTENTS
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
|
|
note
|
|
|
9/30/2016
|
|
|
12/31/2015
Revised
|
|
|
1/1/2015
Revised
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
|
|
|
|
4
|
)
|
|
|
29,548
|
|
|
|
29,383
|
|
|
|
29,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets with a finite useful life
|
|
|
|
|
|
|
5
|
)
|
|
|
6,733
|
|
|
|
6,480
|
|
|
|
6,827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,281
|
|
|
|
35,863
|
|
|
|
36,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible assets
|
|
|
|
|
|
|
6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment owned
|
|
|
|
|
|
|
|
|
|
|
13,233
|
|
|
|
12,659
|
|
|
|
12,544
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets held under finance leases
|
|
|
|
|
|
|
|
|
|
|
2,358
|
|
|
|
2,208
|
|
|
|
843
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,591
|
|
|
|
14,867
|
|
|
|
13,387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in associates and joint ventures accounted for using the equity method
|
|
|
|
|
|
|
|
|
|
|
39
|
|
|
|
41
|
|
|
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other investments
|
|
|
|
|
|
|
|
|
|
|
42
|
|
|
|
45
|
|
|
|
43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current financial assets
|
|
|
|
|
|
|
|
|
|
|
2,960
|
|
|
|
2,989
|
|
|
|
2,445
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Miscellaneous receivables and other non-current assets
|
|
|
|
|
|
|
|
|
|
|
2,096
|
|
|
|
1,778
|
|
|
|
1,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax assets
|
|
|
|
|
|
|
|
|
|
|
579
|
|
|
|
853
|
|
|
|
1,118
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,716
|
|
|
|
5,706
|
|
|
|
5,256
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-current assets
|
|
|
(a
|
)
|
|
|
|
|
|
|
57,588
|
|
|
|
56,436
|
|
|
|
55,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
|
|
|
|
|
|
|
|
|
325
|
|
|
|
254
|
|
|
|
313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and miscellaneous receivables and other current assets
|
|
|
|
|
|
|
|
|
|
|
5,440
|
|
|
|
5,112
|
|
|
|
5,617
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current income tax receivables
|
|
|
|
|
|
|
|
|
|
|
81
|
|
|
|
163
|
|
|
|
101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities other than investments, financial receivables and other current financial
assets
|
|
|
|
|
|
|
|
|
|
|
1,983
|
|
|
|
1,840
|
|
|
|
1,611
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
4,275
|
|
|
|
3,559
|
|
|
|
4,812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,258
|
|
|
|
5,399
|
|
|
|
6,423
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets sub-total
|
|
|
|
|
|
|
|
|
|
|
12,104
|
|
|
|
10,928
|
|
|
|
12,454
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations/Non-current assets held for sale
|
|
|
|
|
|
|
7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
of a financial nature
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
227
|
|
|
|
165
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of a non-financial nature
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,677
|
|
|
|
3,564
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,904
|
|
|
|
3,729
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Current assets
|
|
|
(b
|
)
|
|
|
|
|
|
|
12,104
|
|
|
|
14,832
|
|
|
|
16,183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
(a+b
|
)
|
|
|
|
|
|
|
69,692
|
|
|
|
71,268
|
|
|
|
71,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia Group
|
|
Consolidated Statements of Financial Position
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
|
|
56
|
|
at September 30, 2016
|
|
|
|
|
|
|
Equity and Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
|
|
note
|
|
|
9/30/2016
|
|
|
12/31/2015
Revised
|
|
|
1/1/2015
Revised
|
|
Equity
|
|
|
|
|
|
|
8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital issued
|
|
|
|
|
|
|
|
|
|
|
10,740
|
|
|
|
10,740
|
|
|
|
10,723
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
less: Treasury shares
|
|
|
|
|
|
|
|
|
|
|
(90
|
)
|
|
|
(90)
|
|
|
|
(89
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
|
|
|
|
|
|
|
|
10,650
|
|
|
|
10,650
|
|
|
|
10,634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional Paid-in capital
|
|
|
|
|
|
|
|
|
|
|
1,731
|
|
|
|
1,731
|
|
|
|
1,725
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other reserves and retained earnings (accumulated losses), including profit (loss) for the
period
|
|
|
|
|
|
|
|
|
|
|
7,033
|
|
|
|
5,173
|
|
|
|
5,709
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity attributable to Owners of the Parent
|
|
|
|
|
|
|
|
|
|
|
19,414
|
|
|
|
17,554
|
|
|
|
18,068
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
2,223
|
|
|
|
3,695
|
|
|
|
3,516
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Equity
|
|
|
(c
|
)
|
|
|
|
|
|
|
21,637
|
|
|
|
21,249
|
|
|
|
21,584
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current financial liabilities
|
|
|
|
|
|
|
9
|
)
|
|
|
31,363
|
|
|
|
30,518
|
|
|
|
32,325
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee benefits
|
|
|
|
|
|
|
|
|
|
|
1,537
|
|
|
|
1,420
|
|
|
|
1,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities
|
|
|
|
|
|
|
|
|
|
|
436
|
|
|
|
323
|
|
|
|
438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provisions
|
|
|
|
|
|
|
|
|
|
|
643
|
|
|
|
551
|
|
|
|
720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Miscellaneous payables and other non-current liabilities
|
|
|
|
|
|
|
|
|
|
|
1,497
|
|
|
|
1,110
|
|
|
|
697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-current liabilities
|
|
|
(d
|
)
|
|
|
|
|
|
|
35,476
|
|
|
|
33,922
|
|
|
|
35,236
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial liabilities
|
|
|
|
|
|
|
9
|
)
|
|
|
5,266
|
|
|
|
6,224
|
|
|
|
4,686
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and miscellaneous payables and other current liabilities
|
|
|
|
|
|
|
|
|
|
|
7,183
|
|
|
|
7,882
|
|
|
|
8,536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current income tax payables
|
|
|
|
|
|
|
|
|
|
|
130
|
|
|
|
110
|
|
|
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities sub-total
|
|
|
|
|
|
|
|
|
|
|
12,579
|
|
|
|
14,216
|
|
|
|
13,258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities directly associated with Discontinued operations/Non-current assets held for
sale
|
|
|
|
|
|
|
7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
of a financial nature
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
348
|
|
|
|
43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of a non-financial nature
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,533
|
|
|
|
1,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,881
|
|
|
|
1,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities
|
|
|
(e
|
)
|
|
|
|
|
|
|
12,579
|
|
|
|
16,097
|
|
|
|
14,776
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
(f=d+e
|
)
|
|
|
|
|
|
|
48,055
|
|
|
|
50,019
|
|
|
|
50,012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Equity and Liabilities
|
|
|
(c+f
|
)
|
|
|
|
|
|
|
69,692
|
|
|
|
71,268
|
|
|
|
71,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia Group
|
|
Consolidated Statements of Financial Position
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
|
|
57
|
|
at September 30, 2016
|
|
|
|
|
|
|
SEPARATE CONSOLIDATED INCOME STATEMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
note
|
|
|
3rd Quarter
2016
|
|
|
3rd Quarter
2015
Revised
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2015
Revised
|
|
Revenues
|
|
|
|
|
|
|
4,843
|
|
|
|
4,777
|
|
|
|
13,939
|
|
|
|
14,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
|
|
|
|
58
|
|
|
|
75
|
|
|
|
165
|
|
|
|
206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating revenues and other income
|
|
|
|
|
|
|
4,901
|
|
|
|
4,852
|
|
|
|
14,104
|
|
|
|
15,084
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of goods and services
|
|
|
|
|
|
|
(1,927
|
)
|
|
|
(1,968
|
)
|
|
|
(5,710
|
)
|
|
|
(6,340
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee benefits expenses
|
|
|
|
|
|
|
(752
|
)
|
|
|
(728
|
)
|
|
|
(2,303
|
)
|
|
|
(2,433
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating expenses
|
|
|
|
|
|
|
(256
|
)
|
|
|
(272
|
)
|
|
|
(757
|
)
|
|
|
(1,160
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in inventories
|
|
|
|
|
|
|
32
|
|
|
|
(64
|
)
|
|
|
65
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internally generated assets
|
|
|
|
|
|
|
154
|
|
|
|
163
|
|
|
|
479
|
|
|
|
477
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit before depreciation and amortization, capital gains (losses) and impairment
reversals (losses) on non-current assets (EBITDA)
|
|
|
|
|
|
|
2,152
|
|
|
|
1,983
|
|
|
|
5,878
|
|
|
|
5,622
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
(1,069
|
)
|
|
|
(1,034)
|
|
|
|
(3,116
|
)
|
|
|
(3,164)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains/(losses) on disposals of non-current assets
|
|
|
|
|
|
|
1
|
|
|
|
69
|
|
|
|
14
|
|
|
|
348
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment reversals (losses) on non-current assets
|
|
|
|
|
|
|
(3
|
)
|
|
|
|
|
|
|
(8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit (loss) (EBIT)
|
|
|
|
|
|
|
1,081
|
|
|
|
1,018
|
|
|
|
2,768
|
|
|
|
2,806
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of losses (profits) of associates and joint ventures accounted for using the equity
method
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
(2
|
)
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expenses) from investments
|
|
|
|
|
|
|
(1
|
)
|
|
|
10
|
|
|
|
6
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
|
|
|
|
|
309
|
|
|
|
442
|
|
|
|
2,321
|
|
|
|
2,023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance expenses
|
|
|
|
|
|
|
(674
|
)
|
|
|
(930
|
)
|
|
|
(2,831
|
)
|
|
|
(3,993
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) before tax from continuing operations
|
|
|
|
|
|
|
715
|
|
|
|
541
|
|
|
|
2,262
|
|
|
|
851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
|
|
|
(210
|
)
|
|
|
(196)
|
|
|
|
(699
|
)
|
|
|
(391)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from continuing operations
|
|
|
|
|
|
|
505
|
|
|
|
345
|
|
|
|
1,563
|
|
|
|
460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from Discontinued operations/Non-current assets held for sale
|
|
|
7
|
)
|
|
|
|
|
|
|
150
|
|
|
|
47
|
|
|
|
480
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) for the period
|
|
|
|
|
|
|
505
|
|
|
|
495
|
|
|
|
1,610
|
|
|
|
940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Parent
|
|
|
|
|
|
|
477
|
|
|
|
334
|
|
|
|
1,495
|
|
|
|
367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests
|
|
|
|
|
|
|
28
|
|
|
|
161
|
|
|
|
115
|
|
|
|
573
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(euros)
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2015
Revised
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
Earnings per share (Basic)
|
|
|
|
|
|
|
|
|
Ordinary Share
|
|
|
0.07
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
Savings Share
|
|
|
0.08
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
of which:
|
|
|
|
|
|
|
|
|
from Continuing operations attributable to Owners of the Parent
|
|
|
|
|
|
|
|
|
Ordinary Share
|
|
|
0.07
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
Savings Share
|
|
|
0.08
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
Earnings per share (Diluted)
|
|
|
|
|
|
|
|
|
Ordinary Share
|
|
|
0.05
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
Savings Share
|
|
|
0.06
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
of which:
|
|
|
|
|
|
|
|
|
from Continuing operations attributable to Owners of the Parent
|
|
|
|
|
|
|
|
|
Ordinary Share
|
|
|
0.05
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
Savings Share
|
|
|
0.06
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia Group
|
|
Separate Consolidated Income Statements
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
|
|
58
|
|
at September 30, 2016
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Note 8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
|
|
3rd Quarter
2016
|
|
|
3rd Quarter
2015
Revised
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2015
Revised
|
|
Profit (loss) for the period
|
|
|
(a
|
)
|
|
|
505
|
|
|
|
495
|
|
|
|
1,610
|
|
|
|
940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other components of the Consolidated Statements of Comprehensive Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other components that subsequently will not be reclassified in the Separate Consolidated Income
Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remeasurements of employee defined benefit plans (IAS 19):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actuarial gains (losses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(118
|
)
|
|
|
56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effect
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32
|
|
|
|
(15
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b
|
)
|
|
|
|
|
|
|
|
|
|
|
(86
|
)
|
|
|
41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of other profits (losses) of associates and joint ventures accounted for using the equity
method:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effect
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other components that subsequently will not be reclassified in the Separate Consolidated
Income Statements
|
|
|
(d=b+c
|
)
|
|
|
|
|
|
|
|
|
|
|
(86
|
)
|
|
|
41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other components that subsequently will be reclassified in the Separate Consolidated Income
Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from fair value adjustments
|
|
|
|
|
|
|
11
|
|
|
|
2
|
|
|
|
87
|
|
|
|
(19
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss (profit) transferred to the Separate Consolidated Income Statements
|
|
|
|
|
|
|
(2
|
)
|
|
|
18
|
|
|
|
(71
|
)
|
|
|
(45
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effect
|
|
|
|
|
|
|
|
|
|
|
(2
|
)
|
|
|
(4
|
)
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(e
|
)
|
|
|
9
|
|
|
|
18
|
|
|
|
12
|
|
|
|
(48
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from fair value adjustments
|
|
|
|
|
|
|
(231
|
)
|
|
|
(161
|
)
|
|
|
(558
|
)
|
|
|
1,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss (profit) transferred to the Separate Consolidated Income Statements
|
|
|
|
|
|
|
67
|
|
|
|
326
|
|
|
|
312
|
|
|
|
(486
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effect
|
|
|
|
|
|
|
43
|
|
|
|
(47
|
)
|
|
|
41
|
|
|
|
(145
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(f
|
)
|
|
|
(121
|
)
|
|
|
118
|
|
|
|
(205
|
)
|
|
|
376
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences on translating foreign operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) on translating foreign operations
|
|
|
|
|
|
|
(87
|
)
|
|
|
(1,328
|
)
|
|
|
531
|
|
|
|
(1,708
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss (profit) on translating foreign operations transferred to the Separate Consolidated Income
Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
304
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effect
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(g
|
)
|
|
|
(87
|
)
|
|
|
(1,328
|
)
|
|
|
835
|
|
|
|
(1,709
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of other profits (losses) of associates and joint ventures accounted for using the equity
method:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss (profit) transferred to the Separate Consolidated Income Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effect
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(h
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other components that subsequently will be reclassified to the Separate Consolidated Income
Statements
|
|
|
(i=e+f+g+h
|
)
|
|
|
(199
|
)
|
|
|
(1,192
|
)
|
|
|
642
|
|
|
|
(1,381
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other components of the Consolidated Statements of Comprehensive Income
|
|
|
(k=d+i
|
)
|
|
|
(199
|
)
|
|
|
(1,192
|
)
|
|
|
556
|
|
|
|
(1,340
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income (loss) for the period
|
|
|
(a+k
|
)
|
|
|
306
|
|
|
|
(697
|
)
|
|
|
2,166
|
|
|
|
(400
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Parent
|
|
|
|
|
|
|
304
|
|
|
|
(431
|
)
|
|
|
2,030
|
|
|
|
(444
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests
|
|
|
|
|
|
|
2
|
|
|
|
(266
|
)
|
|
|
136
|
|
|
|
44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia Group
|
|
Consolidated Statements of Comprehensive Income
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
|
|
59
|
|
at September 30, 2016
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Changes from January 1, 2015 to September 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity attributable to Owners of the Parent
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
Share
capital
|
|
|
Additional
Paid-in
capital
|
|
|
Reserve for
available-for-
sale financial
assets
|
|
|
Reserve for
cash flow
hedges
|
|
|
Reserve for
exchange
differences
on
translating
foreign
operations
|
|
|
Reserve for
remeasurements of
employee
defined
benefit plans
(IAS 19)
|
|
|
Share of
other
profits
(losses) of
associates
and joint
ventures
accounted
for using
the equity
method
|
|
|
Other
reserves and
retained
earnings
(accumulated
losses),
including
profit (loss)
for the period
|
|
|
Total
|
|
|
Non-
controlling
interests
|
|
|
Total
equity
|
|
Balance at December 31, 2014
|
|
|
10,634
|
|
|
|
1,725
|
|
|
|
75
|
|
|
|
(637
|
)
|
|
|
(350
|
)
|
|
|
(96
|
)
|
|
|
|
|
|
|
6,794
|
|
|
|
18,145
|
|
|
|
3,554
|
|
|
|
21,699
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revised for errors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28
|
|
|
|
|
|
|
|
|
|
|
|
(105
|
)
|
|
|
(77
|
)
|
|
|
(38
|
)
|
|
|
(115
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Balance at December 31, 2014
|
|
|
10,634
|
|
|
|
1,725
|
|
|
|
75
|
|
|
|
(637
|
)
|
|
|
(322
|
)
|
|
|
(96
|
)
|
|
|
|
|
|
|
6,689
|
|
|
|
18,068
|
|
|
|
3,516
|
|
|
|
21,584
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in equity during the period:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends approved
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(166
|
)
|
|
|
(166
|
)
|
|
|
(84
|
)
|
|
|
(250
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income (loss) for the period
|
|
|
|
|
|
|
|
|
|
|
(48
|
)
|
|
|
376
|
|
|
|
(1,180
|
)
|
|
|
41
|
|
|
|
|
|
|
|
367
|
|
|
|
(444
|
)
|
|
|
44
|
|
|
|
(400
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inwit effect of sale of the non-controlling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
279
|
|
|
|
279
|
|
|
|
560
|
|
|
|
839
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger of Telecom Italia Media S.p.A. into Telecom Italia S.p.A.
|
|
|
7
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(39
|
)
|
|
|
(26
|
)
|
|
|
17
|
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible bond issue maturing 2022 equity component
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
186
|
|
|
|
186
|
|
|
|
|
|
|
|
186
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue of equity instruments
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
|
18
|
|
|
|
|
|
|
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other changes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5
|
)
|
|
|
(5
|
)
|
|
|
(5
|
)
|
|
|
(10
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2015
|
|
|
10,650
|
|
|
|
1,731
|
|
|
|
27
|
|
|
|
(261
|
)
|
|
|
(1,502
|
)
|
|
|
(55
|
)
|
|
|
|
|
|
|
7,320
|
|
|
|
17,910
|
|
|
|
4,048
|
|
|
|
21,958
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes from January 1, 2016 to
September 30, 2016 Note 8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity attributable to Owners of the Parent
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
Share
capital
|
|
|
Additional
Paid-in
capital
|
|
|
Reserve for
available-for-
sale financial
assets
|
|
|
Reserve for
cash flow
hedges
|
|
|
Reserve for
exchange
differences
on
translating
foreign
operations
|
|
|
Reserve for
remeasurements of
employee
defined
benefit plans
(IAS 19)
|
|
|
Share of
other
profits
(losses) of
associates
and joint
ventures
accounted
for using
the
equity
method
|
|
|
Other
reserves and
retained
earnings
(accumulated
losses),
including
profit (loss)
for the period
|
|
|
Total
|
|
|
Non-
controlling
interests
|
|
|
Total
equity
|
|
Balance at December 31, 2015
|
|
|
10,650
|
|
|
|
1,731
|
|
|
|
32
|
|
|
|
(249
|
)
|
|
|
(1,459
|
)
|
|
|
(87
|
)
|
|
|
|
|
|
|
6,992
|
|
|
|
17,610
|
|
|
|
3,723
|
|
|
|
21,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revised for errors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46
|
|
|
|
|
|
|
|
|
|
|
|
(102
|
)
|
|
|
(56
|
)
|
|
|
(28
|
)
|
|
|
(84
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Balance at December 31, 2015
|
|
|
10,650
|
|
|
|
1,731
|
|
|
|
32
|
|
|
|
(249
|
)
|
|
|
(1,413
|
)
|
|
|
(87
|
)
|
|
|
|
|
|
|
6,890
|
|
|
|
17,554
|
|
|
|
3,695
|
|
|
|
21,249
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in equity during the period:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends approved
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(166
|
)
|
|
|
(166
|
)
|
|
|
(26
|
)
|
|
|
(192
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income (loss) for the period
|
|
|
|
|
|
|
|
|
|
|
12
|
|
|
|
(205
|
)
|
|
|
814
|
|
|
|
(86
|
)
|
|
|
|
|
|
|
1,495
|
|
|
|
2,030
|
|
|
|
136
|
|
|
|
2,166
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disposal of the Sofora Telecom Argentina group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,582
|
)
|
|
|
(1,582
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue of equity instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7
|
|
|
|
7
|
|
|
|
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other changes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11
|
)
|
|
|
(11
|
)
|
|
|
|
|
|
|
(11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2016
|
|
|
10,650
|
|
|
|
1,731
|
|
|
|
44
|
|
|
|
(454
|
)
|
|
|
(599
|
)
|
|
|
(173
|
)
|
|
|
|
|
|
|
8,215
|
|
|
|
19,414
|
|
|
|
2,223
|
|
|
|
21,637
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia Group Condensed Consolidated Financial Statements
|
|
|
at September 30, 2016
|
|
Consolidated Statements of Changes in Equity
|
|
60
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
|
|
note
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2015
Revised
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from continuing operations
|
|
|
|
|
|
|
|
|
|
|
1,563
|
|
|
|
460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
3,116
|
|
|
|
3,164
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment losses (reversals) on non-current assets (including investments)
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in deferred tax assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
459
|
|
|
|
128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses (gains) realized on disposals of non-current assets (including investments)
|
|
|
|
|
|
|
|
|
|
|
(15
|
)
|
|
|
(359
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of losses (profits) of associates and joint ventures accounted for using the equity
method
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in employee benefits
|
|
|
|
|
|
|
|
|
|
|
12
|
|
|
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in inventories
|
|
|
|
|
|
|
|
|
|
|
(71
|
)
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in trade receivables and net amounts due from customers on construction contracts
|
|
|
|
|
|
|
|
|
|
|
(31
|
)
|
|
|
315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in trade payables
|
|
|
|
|
|
|
|
|
|
|
(65
|
)
|
|
|
(871
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in current income tax receivables/payables
|
|
|
|
|
|
|
|
|
|
|
85
|
|
|
|
47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in miscellaneous receivables/payables and other assets/liabilities
|
|
|
|
|
|
|
|
|
|
|
(774
|
)
|
|
|
884
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from (used in) operating activities
|
|
|
(a
|
)
|
|
|
|
|
|
|
4,290
|
|
|
|
3,824
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of intangible assets
|
|
|
|
|
|
|
5
|
)
|
|
|
(1,125
|
)
|
|
|
(1,210
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of tangible assets
|
|
|
|
|
|
|
6
|
)
|
|
|
(2,160
|
)
|
|
|
(3,390
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total purchase of intangible and tangible assets on an accrual basis
|
|
|
|
|
|
|
|
|
|
|
(3,285
|
)
|
|
|
(4,600
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in amounts due for purchases of intangible and tangible assets
|
|
|
|
|
|
|
|
|
|
|
(180
|
)
|
|
|
806
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total purchase of intangible and tangible assets on a cash basis
|
|
|
|
|
|
|
|
|
|
|
(3,465
|
)
|
|
|
(3,794
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of control in subsidiaries or other businesses, net of cash acquired
|
|
|
|
|
|
|
|
|
|
|
(6
|
)
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions/disposals of other investments
|
|
|
|
|
|
|
|
|
|
|
(5
|
)
|
|
|
(29
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in financial receivables and other financial assets
|
|
|
|
|
|
|
|
|
|
|
(96
|
)
|
|
|
(893
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from sale that result in a loss of control of subsidiaries or other businesses, net of
cash disposed of
|
|
|
|
|
|
|
|
|
|
|
492
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from sale/repayment of intangible, tangible and other non-current assets
|
|
|
|
|
|
|
|
|
|
|
33
|
|
|
|
699
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from (used in) investing activities
|
|
|
(b
|
)
|
|
|
|
|
|
|
(3,047
|
)
|
|
|
(4,022
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in current financial liabilities and other
|
|
|
|
|
|
|
|
|
|
|
(140
|
)
|
|
|
787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from non-current financial liabilities (including current portion)
|
|
|
|
|
|
|
|
|
|
|
3,313
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayments of non-current financial liabilities (including current portion)
|
|
|
|
|
|
|
|
|
|
|
(3,267
|
)
|
|
|
(5,286
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital proceeds/reimbursements (including subsidiaries)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
186
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid
|
|
|
|
|
|
|
|
|
|
|
(227
|
)
|
|
|
(204
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in ownership interests in consolidated subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
855
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from (used in) financing activities
|
|
|
(c
|
)
|
|
|
|
|
|
|
(321
|
)
|
|
|
338
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from (used in) Discontinued operations/Non-current assets held for sale
|
|
|
(d
|
)
|
|
|
7
|
)
|
|
|
(45
|
)
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate cash flows
|
|
|
(e=a+b+c+d
|
)
|
|
|
|
|
|
|
877
|
|
|
|
135
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash and cash equivalents at beginning of the period
|
|
|
(f
|
)
|
|
|
|
|
|
|
3,216
|
|
|
|
4,910
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net foreign exchange differences on net cash and cash equivalents
|
|
|
(g
|
)
|
|
|
|
|
|
|
182
|
|
|
|
(400
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash and cash equivalents at end of the period
|
|
|
(h=e+f+g
|
)
|
|
|
|
|
|
|
4,275
|
|
|
|
4,645
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional Cash Flow Information
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2015
Revised
|
|
Income taxes (paid) received
|
|
|
(117
|
)
|
|
|
(186
|
)
|
|
|
|
|
|
|
|
|
|
Interest expense paid
|
|
|
(1,701
|
)
|
|
|
(1,855
|
)
|
|
|
|
|
|
|
|
|
|
Interest income received
|
|
|
624
|
|
|
|
699
|
|
|
|
|
|
|
|
|
|
|
Dividends received
|
|
|
7
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia Group
Condensed Consolidated
Financial Statements
at September 30, 2016
|
|
Consolidated Statements of Cash Flows
|
|
61
|
Analysis of Net Cash and Cash Equivalents
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2015
Revised
|
|
Net cash and cash equivalents at beginning of the period
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - from continuing operations
|
|
|
3,559
|
|
|
|
4,812
|
|
|
|
|
|
|
|
|
|
|
Bank overdrafts repayable on demand from continuing operations
|
|
|
(441
|
)
|
|
|
(19
|
)
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - from Discontinued operations/Non-current assets held for sale
|
|
|
98
|
|
|
|
117
|
|
|
|
|
|
|
|
|
|
|
Bank overdrafts repayable on demand from Discontinued operations/Non-current assets held
for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,216
|
|
|
|
4,910
|
|
|
|
|
|
|
|
|
|
|
Net cash and cash equivalents at end of the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - from continuing operations
|
|
|
4,275
|
|
|
|
4,534
|
|
|
|
|
|
|
|
|
|
|
Bank overdrafts repayable on demand from continuing operations
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - from Discontinued operations/Non-current assets held for sale
|
|
|
|
|
|
|
112
|
|
|
|
|
|
|
|
|
|
|
Bank overdrafts repayable on demand from Discontinued operations/Non-current assets held
for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,275
|
|
|
|
4,645
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia Group
Condensed Consolidated
Financial Statements
at September 30, 2016
|
|
Consolidated Statements of Cash Flows
|
|
62
|
NOTE 1
FORM, CONTENT AND OTHER GENERAL INFORMATION
FORM AND CONTENT
Telecom Italia S.p.A. (the Parent) and its subsidiaries form the Telecom Italia Group or the Group. Telecom Italia is a
joint-stock company (S.p.A.) organized under the laws of the Republic of Italy. The registered offices of the Parent, Telecom Italia, are located in Milan, Italy at Via Gaetano Negri 1. The duration of Telecom Italia S.p.A., as stated in the
companys bylaws, extends until December 31, 2100.
The Telecom Italia Group operates mainly in Europe, the Mediterranean Basin and South
America.
The Group is engaged principally in the communications sector and, particularly, the fixed and mobile national and international
telecommunications sector.
The Telecom Italia Group condensed consolidated financial statements at September 30, 2016 have been prepared on a going
concern basis (further details are provided in the Note Accounting policies) and in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board and endorsed by the European
Union (designated as IFRS), as well as the laws and regulations in force in Italy.
In particular, the Telecom Italia Group condensed
consolidated financial statements at September 30, 2016 have been prepared in accordance with IAS 34 (
Interim Financial Reporting
) and, as permitted by this standard, do not include all the information that would be required in annual
financial statements; accordingly, these financial statements should be read together with the 2015 Telecom Italia Group consolidated financial statements.
For purposes of comparison, the consolidated statements of financial position at December 31, 2015, the separate consolidated income statements and the
consolidated statements of comprehensive income for the third quarter of 2015 and the first nine months of 2015, have been presented as well as the consolidated statements of cash flows and the consolidated statements of changes in equity for the
first nine months of 2015.
The Telecom Italia Group condensed consolidated financial statements at September 30, 2016 are expressed in euro (rounded
to the nearest million unless otherwise indicated).
Publication of the Telecom Italia Group condensed consolidated financial statements at
September 30, 2016 was approved by resolution of the Board of Directors meeting held on November 4, 2016.
THE CORRECTION OF ERRORS
Within the Brazil Business Unit, Tim Brasils Management recently identified that incorrect accounting entries were made in prior years in connection with
the recognition of service revenues from the sale of prepaid traffic.
Such incorrect accounting entries, which were attributable to the business model
used in Brazil for recognizing prepaid traffic revenues in non-recent years, resulted in the early recognition of revenues and consequently the underestimation of deferred revenue liabilities for prepaid traffic not yet consumed. The incorrect
accounting entries did not have any impact neither in terms of net financial position nor on cash and cash equivalents.
In assessing the level of
significance of the error for the purposes of the related financial statement presentation in accordance with IAS 8 (Accounting Policies, Changes in Accounting Estimates and Errors), Management also considered US accounting standards and related
guidance.
In particular, this analysis indicated that the impact of the error was not material with respect to consolidated results of operations for each
of the years ended December 31, 2015, 2014 and 2013 but the correction of the cumulative error as of December 31, 2015 would have a material impact on full-year consolidated results of operations for 2016, if entirely recognized at charge
of such year.
In light of the above and for the purposes of Interim Report as of September 30, 2016, the Companys Management decided to revise
the comparative financial information as of December 31, 2015 as well as that for the third quarter of 2015 and for the nine-month period ended September 30, 2015, segment reporting included. In accordance with IAS 1 and IAS 8, the revised
consolidated statement of financial position as of January 1, 2015 is also presented.
|
|
|
|
|
Telecom Italia Group
|
|
Note 1
Form, content and other general information
|
|
|
Condensed Consolidated Financial Statements
at
September 30, 2016
|
|
|
63
|
Impacts of correction of errors are detailed below:
Separate Consolidated Income Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9 months to
9/30/2015
Historical
(a)
|
|
|
Adjustments
(b)
|
|
|
9 months to
9/30/2015
Revised
(a+b)
|
|
Revenues
|
|
|
14,875
|
|
|
|
3
|
|
|
|
14,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of goods and services
|
|
|
(6,343
|
)
|
|
|
3
|
|
|
|
(6,340
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit before depreciation and amortization, capital gains (losses) and impairment
reversals (losses) on non-current assets (EBITDA)
|
|
|
5,616
|
|
|
|
6
|
|
|
|
5,622
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit (loss) (EBIT)
|
|
|
2,800
|
|
|
|
6
|
|
|
|
2,806
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
|
2,020
|
|
|
|
3
|
|
|
|
2,023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) before tax from continuing operations
|
|
|
842
|
|
|
|
9
|
|
|
|
851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
(389
|
)
|
|
|
(2
|
)
|
|
|
(391
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from continuing operations
|
|
|
453
|
|
|
|
7
|
|
|
|
460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) for the period
|
|
|
933
|
|
|
|
7
|
|
|
|
940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Parent
|
|
|
362
|
|
|
|
5
|
|
|
|
367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests
|
|
|
571
|
|
|
|
2
|
|
|
|
573
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
The
correction of errors did not have any impact on the calculation of the Basic and Diluted Earnings Per Share.
Consolidated Statements of Comprehensive
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9 months to
9/30/2015
Historical
(a)
|
|
|
Adjustments
(b)
|
|
|
9 months to
9/30/2015
Revised
(a+b)
|
|
Profit (loss) for the period
|
|
|
933
|
|
|
|
7
|
|
|
|
940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences on translating foreign operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) on translating foreign operations
|
|
|
(1,739
|
)
|
|
|
31
|
|
|
|
(1,708
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss (profit) on translating foreign operations transferred to the Separate Consolidated Income
Statements
|
|
|
(1
|
)
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effect
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income (loss) for the period
|
|
|
(438
|
)
|
|
|
38
|
|
|
|
(400
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Parent
|
|
|
(469
|
)
|
|
|
25
|
|
|
|
(444
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests
|
|
|
31
|
|
|
|
13
|
|
|
|
44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The economic effects related to the third quarter of 2015 are of low impact and thus have not been detailed.
|
|
|
|
|
Telecom Italia Group
|
|
Note 1
Form, content and other general information
|
|
|
Condensed Consolidated Financial Statements
at
September 30, 2016
|
|
|
64
|
Consolidated Statements of Financial Position
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
12/31/2015
Historical
(a)
|
|
|
Adjustments
(b)
|
|
|
12/31/2015
Revised
(a+b)
|
|
|
1/1/2015
Historical
(c)
|
|
|
Adjustments
(d)
|
|
|
1/1/2015
Revised
(c+d)
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Miscellaneous receivables and other non-current assets
|
|
|
1,744
|
|
|
|
34
|
|
|
|
1,778
|
|
|
|
1,571
|
|
|
|
43
|
|
|
|
1,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and miscellaneous receivables and other current assets
|
|
|
5,110
|
|
|
|
2
|
|
|
|
5,112
|
|
|
|
5,615
|
|
|
|
2
|
|
|
|
5,617
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
71,232
|
|
|
|
36
|
|
|
|
71,268
|
|
|
|
71,551
|
|
|
|
45
|
|
|
|
71,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity and Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity attributable to Owners of the Parent
|
|
|
17,610
|
|
|
|
(56
|
)
|
|
|
17,554
|
|
|
|
18,145
|
|
|
|
(77
|
)
|
|
|
18,068
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests
|
|
|
3,723
|
|
|
|
(28
|
)
|
|
|
3,695
|
|
|
|
3,554
|
|
|
|
(38
|
)
|
|
|
3,516
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Equity
|
|
|
21,333
|
|
|
|
(84
|
)
|
|
|
21,249
|
|
|
|
21,699
|
|
|
|
(115
|
)
|
|
|
21,584
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and miscellaneous payables and other current liabilities
|
|
|
7,762
|
|
|
|
120
|
|
|
|
7,882
|
|
|
|
8,376
|
|
|
|
160
|
|
|
|
8,536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Equity and Liabilities
|
|
|
71,232
|
|
|
|
36
|
|
|
|
71,268
|
|
|
|
71,551
|
|
|
|
45
|
|
|
|
71,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The increase in the item Trade and miscellaneous payables and other current liabilities was mainly attributable to
the higher liability for prepaid traffic not yet used recorded to correct the error resulting from the early recognition of that traffic within revenues. In addition, the related changes in indirect and direct taxes have been taken into account and
costs for commissions and associated liabilities have also been recalculated.
Consolidated Statements of Cash Flows
The correction of errors did not have any impact on the Aggregate cash flows of the Telecom Italia Group Consolidated Statements of Cash Flows and,
in particular, on the Cash flows from (used in) operating activities.
FINANCIAL STATEMENT FORMATS
The financial statement formats adopted are consistent with those indicated in IAS 1. In particular:
|
|
the consolidated statements of financial position have been prepared by classifying assets and liabilities according to the current and non-current criterion;
|
|
|
the separate consolidated income statements have been prepared by classifying operating expenses by nature of expense as this form of presentation is considered more appropriate and representative of the specific
business of the Group, conforms to internal reporting and is in line with Telecom Italia Groups industrial sector.
|
In
addition to EBIT or Operating profit (loss), the separate consolidated income statements include the alternative performance measure of EBITDA or Operating profit (loss) before depreciation and amortization, Capital gains (losses) and Impairment
reversals (losses) on non-current assets.
In particular, besides EBIT, EBITDA is used by Telecom Italia as the financial target in
internal presentations (business plans) and in external presentations (to analysts and investors). It represents a useful unit of measurement for the evaluation of the operating performance of the Group (as a whole and at the Business Unit level).
|
|
|
|
|
Telecom Italia Group
|
|
Note 1
Form, content and other general information
|
|
|
Condensed Consolidated Financial Statements
at
September 30, 2016
|
|
|
65
|
EBIT and EBITDA are calculated as follows:
|
|
|
Profit (loss) before tax from continuing operations
|
|
|
+
|
|
Finance expenses
|
|
|
-
|
|
Finance income
|
|
|
+/-
|
|
Other expenses (income) from investments
|
|
|
+/-
|
|
Share of losses (profits) of associates and joint ventures accounted for using the equity method
|
|
EBIT - Operating profit (loss)
|
|
|
+/-
|
|
Impairment losses (reversals) on non-current assets
|
|
|
+/-
|
|
Losses (gains) on disposals of non-current assets
|
|
|
+
|
|
Depreciation and amortization
|
|
EBITDA - Operating profit (loss) before depreciation and amortization, Capital gains (losses) and Impairment reversals (losses) on non-current assets
|
|
|
the consolidated statements of comprehensive income include the profit or loss for the period as shown in the separate consolidated income statements and all other non-owner changes in equity;
|
|
|
the consolidated statements of cash flows have been prepared by presenting cash flows from operating activities according to the indirect method, as permitted by IAS 7 (Statement of Cash Flows).
|
SEGMENT REPORTING
An operating segment is a component of an
entity:
|
|
that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity);
|
|
|
whose operating results are regularly reviewed by the entitys chief operating decision maker to make decisions about resources (for the Telecom Italia Group, the Board of Directors of the Parent) to be allocated
to the segment and assess its performance; and
|
|
|
for which discrete financial information is available.
|
In particular, the operating segments of the Telecom
Italia Group are organized according to the relative geographical location for the telecommunications business (Domestic and Brazil).
The Sofora -
Telecom Argentina group, which was sold on March 8, 2016, has been recognized under Discontinued operations.
The term operating segment
is considered synonymous with Business Unit.
The operating segments of the Telecom Italia Group are as follows:
|
|
Domestic: includes operations in Italy for voice and data services on fixed and mobile networks for final customers (retail) and other operators (wholesale), the operations of the Telecom Italia Sparkle group
(International wholesale), the operations of Olivetti (products and services for Information Technology), as well as INWIT S.p.A. (a company operating in the electronic communications infrastructure business) and the units supporting the Domestic
sector.
|
Following the change in Persideras business mission, the Media Business Unit was incorporated into the
Domestic Business Unit as of January 1, 2016. See the section Financial and Operating Highlights of the Business Units of the Telecom Italia Group Domestic Business Unit of the Interim Management Report for more details;
|
|
Brazil: includes mobile (TIM Celular) and fixed (TIM Celular and Intelig) telecommunications operations in Brazil;
|
|
|
Other Operations: include finance companies and other minor companies not strictly related to the core business of the Telecom Italia Group.
|
|
|
|
|
|
Telecom Italia Group
|
|
Note 1
Form, content and other general information
|
|
|
Condensed Consolidated Financial Statements
at
September 30, 2016
|
|
|
66
|
NOTE 2
ACCOUNTING POLICIES
GOING CONCERN
The condensed consolidated financial statements at September 30, 2016 have been prepared on a going concern basis as there is the reasonable expectation
that Telecom Italia will continue its operational activities in the foreseeable future (and in any event with a time horizon of more than twelve months).
In particular, the following factors have been taken into consideration:
|
|
the main risks and uncertainties (that are for the most part of an external nature) to which the Group and the various activities of the Telecom Italia Group are exposed:
|
|
|
|
changes in the general macroeconomic situation in the Italian, European and Brazilian markets, as well as the volatility of financial markets in the Eurozone also as a result of the Brexit referendum in the
United Kingdom;
|
|
|
|
variations in business conditions, also related to competition;
|
|
|
|
changes to laws and regulations (price and rate variations);
|
|
|
|
outcomes of legal disputes and proceedings with regulatory authorities, competitors and other parties;
|
|
|
|
financial risks (interest rate and/or exchange rate trends, changes in the Groups credit rating by rating agencies);
|
|
|
the mix between equity and debt capital considered optimal as well as the policy for the remuneration of equity, described in the 2015 consolidated financial statements in the paragraph devoted to the Share
capital information under the Note Equity;
|
|
|
the policy for financial risk management (market risk, credit risk and liquidity risk) as described in the Note Financial risk management in the annual consolidated financial statements at December 31,
2015.
|
Based on these factors, the Management believes that, at the present time, there are no elements of uncertainty regarding the
Groups ability to continue as a going concern.
ACCOUNTING POLICIES AND PRINCIPLES OF CONSOLIDATION
The
accounting policies and principles of consolidation adopted in the preparation of the condensed consolidated financial statements at September 30, 2016 have been applied on a basis consistent with those used for the annual consolidated
financial statements at December 31, 2015, to which reference should be made, except for:
|
|
the use of the new standards and interpretations adopted by the Group since January 1, 2016, hereinafter described;
|
|
|
the changes required because of the nature of interim financial reporting.
|
Furthermore, in the condensed
consolidated financial statements at September 30, 2016, the income tax expense for the first nine months of the individual consolidated companies is calculated according to the best possible estimate based on available information and on a
reasonable forecast of performance up to the end of the tax period. Conventionally, the income tax liabilities (current and deferred) on the profit for the interim period of the individual consolidated companies are recorded net of advances and tax
receivables (excluding receivables for which refunds have been requested) as well as deferred tax assets, and classified as an adjustment to Deferred tax liabilities; if the balance between deferred tax assets and deferred tax
liabilities is an asset it is conventionally recognized in Deferred tax assets.
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 2
|
|
|
|
|
at September 30, 2016
|
|
Accounting policies
|
|
|
67
|
|
USE OF
ESTIMATES
The preparation of the condensed consolidated financial statements at September 30, 2016 and related disclosure requires management to make
estimates and assumptions based also on subjective judgments, past experience and hypotheses considered reasonable and realistic in relation to the information known at the time of the estimate. Such estimates have an effect on the reported amount
of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the amount of revenues and costs during the period. Actual results could differ, even significantly, from those
estimates owing to possible changes in the factors considered in the determination of such estimates. Estimates are reviewed periodically.
With regard to
the most important accounting estimates, please refer to those illustrated in the annual consolidated financial statements at December 31, 2015.
NEW STANDARDS AND INTERPRETATIONS ENDORSED BY THE EU
AND IN FORCE FROM JANUARY 1, 2016
As required by IAS 8 (
Accounting Policies, Changes in Accounting Estimates and Errors
), the following
is a brief description of the IFRS in force from January 1, 2016.
|
|
Amendments to IFRS 11
(Joint Arrangements
)
:
Accounting for acquisitions of interests in joint operations
|
On November 24, 2015, Regulation EC 2015/2173 was issued, applying some minor amendments to IFRS 11 (Joint Arrangements) at EU level.
IFRS 11 addresses the accounting for interests in Joint Ventures and Joint Operations. These amendments add new guidance on how to account for
the acquisition of an interest in a Joint Operation that constitutes a business (as defined in IFRS 3 - Business Combinations).
These
amendments specify the appropriate accounting treatment for such acquisitions.
The adoption of these amendments had no impact on the
condensed consolidated financial statements at September 30, 2016.
|
|
Amendments to IAS 16
(Property, Plant and Equipment)
and IAS 38
(Intangible Assets)
|
On December 2, 2015, Regulation EC 2015/2231 was issued, applying some minor amendments to IAS 16 (Property, plant and equipment) and IAS
38 (Intangible assets) at EU level.
IAS 16 and IAS 38 both establish the principle of the expected pattern of consumption of the future
economic benefits of an asset as the basis for depreciation and amortization.
The amendment clarifies that the use of revenue-based
methods to calculate the depreciation of an asset is not appropriate. For intangible assets, this indication is considered as a relative assumption, that may only be overcome in one of the following circumstances: (i) the right to use an
intangible asset is related to the achievement of a set revenue threshold; or (ii) when it can be demonstrated that the generation of the revenues and the use of the economic benefits of the asset are highly correlated.
The adoption of these amendments had no impact on the condensed consolidated financial statements at September 30, 2016.
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 2
|
|
|
|
|
at September 30, 2016
|
|
Accounting policies
|
|
|
68
|
|
|
|
|
Improvements to the IFRS (2012-2014 cycle)
|
On December 15, 2015, Regulation EC
2015/2343 was issued, applying several improvements to the IFRS for the 2012-2014 cycle, at EU level. These amendments included:
|
|
|
IFRS 5 Non-current assets held for sale and discontinued operations: these amendments relate to changes in the methods of disposal (from held for sale to held for distribution to owners and vice versa);
|
|
|
|
IFRS 7 Financial Instruments - Disclosures: these amendments relate to the disclosure on servicing contracts, in terms of continuing involvement, and the applicability of the disclosure provided for by IFRS
7 concerning the offsetting of financial assets and financial liabilities in the interim financial statements;
|
|
|
|
IAS 19 Employee Benefits: this amendment relates to the discount rate (with reference to the market area);
|
|
|
|
IAS 34 Interim Financial Reporting: these amendments specify how the information included in the interim financial statements may be supplemented by other available information contained in other sections of the Interim
Report (e.g. the Interim Management Report) through the incorporation by cross-reference.
|
The adoption of these amendments
had no impact on the condensed consolidated financial statements at September 30, 2016.
|
|
|
Amendments to IAS 1
(Presentation of Financial Statements
) -
Disclosure Initiative
|
On December 18, 2015, Regulation EC 2015/2406 was issued, applying some amendments to IAS 1 (Presentation of Financial Statements -
Disclosure Initiative) at EU level.
In particular, the amendments, which are part of a wider initiative to improve the presentation and
disclosure of financial statements, include updates in the following areas:
|
|
|
materiality
: it is clarified that the concept of materiality applies to the financial statements as a whole and that the inclusion of immaterial information can affect the usefulness of the financial reporting;
|
|
|
|
disaggregation and subtotals
:
it is clarified that the specific items of the separate income statements, the statements of comprehensive income and the statements of financial position can be
disaggregated. New requirements for the use of subtotals have also been introduced;
|
|
|
|
structure of the notes
: it is clarified that the companies have a certain degree of flexibility regarding the order of presentation of the notes. In establishing this order, the companies must take into account
the requirements of understandability and comparability of the financial statements;
|
|
|
|
investments accounted for using the equity method
: the Other Comprehensive Income (OCI) relating to investments in associates and joint ventures accounted for using the equity method must be divided in the income
statement between reclassifiable and non-reclassifiable.
|
The adoption of these amendments had no impact on the condensed
consolidated financial statements at September 30, 2016.
NEW STANDARDS AND INTERPRETATIONS ADOPTED BY THE EU NOT YET IN FORCE
On September 22, 2016 the EU regulation no. 2016/1905 was issued, which endorsed the IFRS 15 (Revenue from contracts with customers). IFRS 15 is effective
starting from January 1, 2018. The impacts on the consolidated financial statements arising from the new standard are currently being assessed.
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 2
|
|
|
|
|
at September 30, 2016
|
|
Accounting policies
|
|
|
69
|
|
NEW
STANDARDS AND INTERPRETATIONS ISSUED BY IASB BUT NON YET ENDORSED BY THE EU
At the date of preparation of the accompanying condensed consolidated
financial statements at September 30, 2016, the following new standards and interpretations had been issued by IASB but not yet endorsed by the EU.
|
|
|
|
|
Mandatory
application
starting from
|
Amendments to IAS 12 (
Income taxes
) -
Recognition of Deferred Tax Assets for Unrealized
Losses
|
|
1/1/2017
|
|
|
Amendments to IAS 7 (
Cash flow statement
) -
Disclosure Initiative
|
|
1/1/2017
|
|
|
IFRS 9 (
Financial Instruments
)
|
|
1/1/2018
|
|
|
IFRS 16 (
Leases
)
|
|
1/1/2019
|
|
|
Amendments to IFRS 10 (
Consolidated Financial Statements
) and to IAS 28
(
Investments in Associates and Joint Ventures
): Sale or contribution of assets between an investor and its associate/joint venture
|
|
Deferred
application
date to be set
|
|
|
Clarifications to IFRS 15 (
Revenue from contracts with customers
)
|
|
1/1/2018
|
|
|
Amendments to IFRS 2 (
Classification and measurement of share-based payment
transactions
)
|
|
1/1/2018
|
The potential impacts on the consolidated financial statements from application of these amendments are currently being
assessed.
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 2
|
|
|
|
|
at September 30, 2016
|
|
Accounting policies
|
|
|
70
|
|
NOTE 3
SCOPE OF CONSOLIDATION
The changes in the scope of consolidation at
September 30, 2016 compared to December 31, 2015 are listed below.
Continuing operations:
Entry/merger of subsidiaries into the scope of consolidation:
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
|
|
Business Unit
|
|
|
Month
|
|
Entry:
|
|
|
|
|
|
|
|
|
|
|
GESTIONE DUE S.r.l.
|
|
New acquisition
|
|
|
Domestic
|
|
|
|
January 2016
|
|
GESTIONE IMMOBILI S.r.l.
|
|
New acquisition
|
|
|
Domestic
|
|
|
|
January 2016
|
|
REVI IMMOBILI S.r.l.
|
|
New acquisition
|
|
|
Domestic
|
|
|
|
January 2016
|
|
FLASH FIBER S.r.l.
|
|
New company
|
|
|
Domestic
|
|
|
|
July 2016
|
|
TELECOM ITALIA SPARKLE RUSSIA LLC
|
|
New acquisition
|
|
|
Domestic
|
|
|
|
July 2016
|
|
Exit:
|
|
|
|
|
|
|
|
|
|
|
PURPLE TULIP B.V.
|
|
Liquidated
|
|
|
Other Operations
|
|
|
|
July 2016
|
|
Merger:
|
|
|
|
|
|
|
|
|
|
|
TELECOM ITALIA DIGITAL SOLUTIONS S.p.A.
|
|
Merged into Olivetti S.p.A.
|
|
|
Domestic
|
|
|
|
January 2016
|
|
EMSA SERVIZI S.p.A.
|
|
Merged into Telecom Italia S.p.A.
|
|
|
Domestic
|
|
|
|
April 2016
|
|
OFI CONSULTING S.r.l.
|
|
Merged into Telecom Italia S.p.A.
|
|
|
Domestic
|
|
|
|
April 2016
|
|
TELECOM ITALIA INTERNATIONAL N.V.
|
|
Merged into Telecom Italia Finance S.A.
|
|
|
Other Operations
|
|
|
|
August 2016
|
|
TELECOM ITALIA DEUTSCHLAND HOLDING GmbH
|
|
Merged into Telecom Italia S.p.A.
|
|
|
Other Operations
|
|
|
|
August 2016
|
|
Discontinued operations/Non-current assets held for sale:
Companies exiting the scope of consolidation, already classified as discontinued operations:
|
|
|
|
|
|
|
|
|
Company
|
|
|
|
|
|
Month
|
|
Exit:
|
|
|
|
|
|
|
|
|
MICRO SISTEMAS S.A.
|
|
Sold
|
|
Sofora - Telecom Argentina Group
|
|
|
March 2016
|
|
NORTEL INVERSORA S.A.
|
|
Sold
|
|
Sofora - Telecom Argentina Group
|
|
|
March 2016
|
|
NUCLEO S.A.
|
|
Sold
|
|
Sofora - Telecom Argentina Group
|
|
|
March 2016
|
|
PERSONAL ENVIOS S.A.
|
|
Sold
|
|
Sofora - Telecom Argentina Group
|
|
|
March 2016
|
|
SOFORA TELECOMUNICACIONES S.A.
|
|
Sold
|
|
Sofora - Telecom Argentina Group
|
|
|
March 2016
|
|
TELECOM ARGENTINA S.A.
|
|
Sold
|
|
Sofora - Telecom Argentina Group
|
|
|
March 2016
|
|
TELECOM ARGENTINA USA Inc.
|
|
Sold
|
|
Sofora - Telecom Argentina Group
|
|
|
March 2016
|
|
TELECOM PERSONAL S.A.
|
|
Sold
|
|
Sofora - Telecom Argentina Group
|
|
|
March 2016
|
|
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 3
|
|
|
|
|
at September 30, 2016
|
|
Scope of consolidation
|
|
|
71
|
|
In addition to that already noted above, the changes in the scope of consolidation at September 30, 2016 compared
to September 30, 2015 are listed below.
Entry of subsidiaries into the scope of consolidation:
|
|
|
|
|
|
|
Company
|
|
|
|
Business Unit
|
|
Month
|
Entry:
|
|
|
|
|
|
|
TIM REAL ESTATE S.r.l.
|
|
New company
|
|
Domestic
|
|
November 2015
|
The breakdown by number of subsidiaries and associates of the Telecom Italia Group is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/2016
|
|
Companies:
|
|
Italy
|
|
|
Outside Italy
|
|
|
Total
|
|
subsidiaries consolidated line-by-line
|
|
|
27
|
|
|
|
48
|
|
|
|
75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
joint ventures accounted for using the equity method
|
|
|
1
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
associates accounted for using the equity method
|
|
|
18
|
|
|
|
|
|
|
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total companies
|
|
|
46
|
|
|
|
48
|
|
|
|
94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/31/2015
|
|
Companies:
|
|
Italy
|
|
|
Outside Italy
|
|
|
Total
|
|
subsidiaries consolidated
line-by-line
(*)
|
|
|
26
|
|
|
|
58
|
|
|
|
84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
joint ventures accounted for using the equity method
|
|
|
1
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
associates accounted for using the equity method
|
|
|
18
|
|
|
|
|
|
|
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total companies
|
|
|
45
|
|
|
|
58
|
|
|
|
103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
Including subsidiaries posted under Discontinued operations/Non-current assets held for sale.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/2015
|
|
Companies:
|
|
Italy
|
|
|
Outside Italy
|
|
|
Total
|
|
subsidiaries consolidated
line-by-line
(*)
|
|
|
25
|
|
|
|
58
|
|
|
|
83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
joint ventures accounted for using the equity method
|
|
|
1
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
associates accounted for using the equity method
|
|
|
17
|
|
|
|
|
|
|
|
17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total companies
|
|
|
43
|
|
|
|
58
|
|
|
|
101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
Including subsidiaries posted under Discontinued operations/Non-current assets held for sale.
|
|
|
|
|
|
Telecom Italia Group
Condensed
Consolidated Financial Statements
at September 30, 2016
|
|
Note 3
Scope of consolidation
|
|
|
|
|
72
|
NOTE 4
GOODWILL
Goodwill shows the following breakdown and changes
during the first nine months of 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
12/31/2015
|
|
|
Reclassifications
|
|
|
Increase
|
|
|
Decrease
|
|
|
Impairments
|
|
|
Exchange
differences
|
|
|
9/30/2016
|
|
Domestic
|
|
|
28,447
|
|
|
|
29
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,484
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Domestic
|
|
|
28,035
|
|
|
|
29
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,072
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Wholesale
|
|
|
412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brazil
|
|
|
907
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
157
|
|
|
|
1,064
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media
|
|
|
29
|
|
|
|
(29
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
29,383
|
|
|
|
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
157
|
|
|
|
29,548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following is noted in particular:
(1)
|
the reclassification of the amount of goodwill previously allocated to the Media Business Unit of 29 million euros was due to the redefining of the Groups Business Units as described in the Note segment
reporting;
|
(2)
|
the increase for the Domestic Business Unit was due to the recognition of the goodwill, of 7.8 million euros, resulting from the acquisition of control (100%) of Revi Immobili S.r.l., Gestione Immobili S.r.l. and
Gestione Due S.r.l., acquired by INWIT S.p.A. in January 2016 at a price of 8.3 million euros. Provisional goodwill was recognized with respect to these acquisitions, as permitted by IFRS 3.
|
With regard to the acquisition of the company Alfabook on July 1, 2015, the goodwill provisionally recognized in 2015, amounting to 4 million euros, was
confirmed following the completion of the price allocation process required by IFRS 3.
In accordance with IAS 36, goodwill is not subject to
amortization, but is tested for impairment annually or more frequently, whenever specific events or circumstances occur that may indicate an impairment.
For the Domestic Cash Generating Unit, at September 30, 2016, no evidence was identified indicating the need to repeat the impairment tests already performed
for the Financial Report at June 30, 2016. Those impairment tests had shown that there were no impairment losses, and in the third quarter of 2016 the main business indicators of the Domestic CGU continued to improve, in some cases exceeding
forecasts.
For the other Cash Generating Units, at September 30, 2016 no evidence was identified to suggest that any of the CGUs had suffered impairment.
Lastly, you are reminded that the Group is preparing a new 2017 2019 Industrial Plan, to be approved and communicated to the market in early 2017,
in accordance with the previously announced financial Calendars, which will form the basis for the impairment testing of goodwill recoverability for the 2016 Annual Report.
|
|
|
|
|
Telecom Italia Group
Condensed
Consolidated Financial Statements
at September 30, 2016
|
|
Note 4
Goodwill
|
|
|
|
|
73
|
NOTE 5
INTANGIBLE ASSETS WITH A FINITE USEFUL LIFE
Intangible assets
with a finite useful life increased by 253 million euros compared to December 31, 2015. Details of the breakdown and movements are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
12/31/2015
|
|
|
Additions
|
|
|
Change in
financial
leasing
contracts
|
|
|
Amortization
|
|
|
Impairment
(losses) /
reversals
|
|
|
Disposals
|
|
|
Exchange
differences
|
|
|
Capitalized
borrowing
costs
|
|
|
Other
changes
|
|
|
9/30/2016
|
|
Industrial patents and intellectual property rights
|
|
|
2,070
|
|
|
|
581
|
|
|
|
7
|
|
|
|
(916
|
)
|
|
|
|
|
|
|
|
|
|
|
147
|
|
|
|
|
|
|
|
378
|
|
|
|
2,267
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Concessions, licenses, trademarks and similar rights
|
|
|
2,829
|
|
|
|
47
|
|
|
|
|
|
|
|
(289
|
)
|
|
|
|
|
|
|
|
|
|
|
56
|
|
|
|
|
|
|
|
241
|
|
|
|
2,884
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other intangible assets
|
|
|
83
|
|
|
|
84
|
|
|
|
|
|
|
|
(78
|
)
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
1
|
|
|
|
93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Work in progress and advance payments
|
|
|
1,498
|
|
|
|
406
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
146
|
|
|
|
54
|
|
|
|
(614
|
)
|
|
|
1,489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
6,480
|
|
|
|
1,118
|
|
|
|
7
|
|
|
|
(1,283
|
)
|
|
|
|
|
|
|
(1
|
)
|
|
|
352
|
|
|
|
54
|
|
|
|
6
|
|
|
|
6,733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions in the first nine months of 2016 also included 218 million euros of internally generated assets (232 million euros
in the first nine months of 2015).
The changes in financial leasing contracts related entirely to the Brazil Business Unit.
Industrial patents and intellectual property rights at September 30, 2016 essentially consist of applications software purchased outright and user license
rights of unlimited duration acquired, and relate to Telecom Italia S.p.A. (1,213 million euros) and the Brazil Business Unit (1,019 million euros).
Concessions, licenses, trademarks and similar rights at September 30, 2016 mainly consisted of:
|
|
the remaining cost of telephone licenses and similar rights (2,025 million euros for Telecom Italia S.p.A., 303 million euros for the Brazil Business Unit), which increased compared to December 31, 2015, mainly due to
the activation of the user rights for the L Band (1452-1492 MHz) for terrestrial electronic communications systems, definitively assigned to Telecom Italia S.p.A. in December 2015, following participation in the tender called by the Ministry of
Economic Development;
|
|
|
Indefeasible Rights of Use - IRU (292 million euros) mainly relating to companies of the Telecom Italia Sparkle group (International Wholesale);
|
|
|
TV frequencies of the company Persidera in the Core Domestic segment (121 million euros).
|
Other intangible
assets with a finite useful life at September 30, 2016 essentially consisted of 78 million euros of capitalized subscriber acquisition costs (SACs) (56 million euros for the Parent and 22 million euros for the Brazil Business Unit), mainly related
to commissions for the sales network, for a number of commercial deals that lock in customers for a set period.
Work in progress and advance payments
were essentially in line with the amount at the start of the period.
You are reminded that this item includes the user rights for the 700 MHz
frequencies, acquired in 2014 by the Tim Brasil group for a total of 2.9 billion reais. Since the assets require a period of more than 12 months to be ready for use, also in the first nine months of 2016 borrowing costs of 54 million euros have been
capitalized, as they are directly attributable to the acquisition. The yearly rate used for the capitalization of borrowing costs in reais is 13.40%. Capitalized borrowing costs in reais have been recorded as a direct reduction of the income
statement item Finance expenses - Interest expenses to banks.
|
|
|
|
|
Telecom Italia Group
Condensed
Consolidated Financial Statements
at September 30, 2016
|
|
Note 5
Intangible assets with a finite useful life
|
|
|
|
|
74
|
NOTE 6
TANGIBLE ASSETS (OWNED AND UNDER FINANCE LEASES)
PROPERTY, PLANT AND EQUIPMENT OWNED
Property, plant and equipment owned increased by 574 million euros compared to December 31, 2015. The breakdown and movements are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
12/31/2015
|
|
|
Additions
|
|
|
Depreciation
|
|
|
Impairment
(losses) /
reversals
|
|
|
Disposals
|
|
|
Exchange
differences
|
|
|
Other
changes
|
|
|
9/30/2016
|
|
Land
|
|
|
171
|
|
|
|
18
|
|
|
|
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
2
|
|
|
|
11
|
|
|
|
200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buildings (civil and industrial)
|
|
|
444
|
|
|
|
82
|
|
|
|
(36
|
)
|
|
|
|
|
|
|
(1
|
)
|
|
|
3
|
|
|
|
21
|
|
|
|
513
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plant and equipment
|
|
|
10,909
|
|
|
|
1,298
|
|
|
|
(1,554
|
)
|
|
|
|
|
|
|
(11
|
)
|
|
|
324
|
|
|
|
392
|
|
|
|
11,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing and distribution equipment
|
|
|
41
|
|
|
|
7
|
|
|
|
(11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
378
|
|
|
|
48
|
|
|
|
(117
|
)
|
|
|
|
|
|
|
(3
|
)
|
|
|
20
|
|
|
|
48
|
|
|
|
374
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction in progress and advance payments
|
|
|
716
|
|
|
|
471
|
|
|
|
|
|
|
|
(6
|
)
|
|
|
(1
|
)
|
|
|
25
|
|
|
|
(454
|
)
|
|
|
751
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
12,659
|
|
|
|
1,924
|
|
|
|
(1,718
|
)
|
|
|
(8
|
)
|
|
|
(16
|
)
|
|
|
374
|
|
|
|
18
|
|
|
|
13,233
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions in the first nine months of 2016 also included 261 million euros of internally generated assets (245 million euros
in the first nine months of 2015).
With regard to the Real Estate Project initiated at the end of 2014, during the first nine months of 2016 two more
properties plus the related land, previously leased under financial leases, were purchased for a total outlay of 114 million euros; the purchase resulted in additions of 77 million euros under the item Buildings (civil and industrial)
and of 13 million euros under the item Land. In addition, the column Other changes includes 25 million euros for the reclassification of the remaining value of these properties and the related improvements made from the
assets held under finance leases.
|
|
|
|
|
Telecom Italia Group
Condensed
Consolidated Financial Statements
at September 30, 2016
|
|
Note 6
Tangible assets (owned and under finance leases)
|
|
|
|
|
75
|
ASSETS
HELD UNDER FINANCE LEASES
Assets held under finance leases increased by 150 million euros compared to December 31, 2015. The breakdown and movements are
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
12/31/2015
|
|
|
Additions
|
|
|
Change in
financial leasing
contracts
|
|
|
Depreciation
|
|
|
Exchange
differences
|
|
|
Other
changes
|
|
|
9/30/2016
|
|
Land under lease
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buildings (civil and industrial)
|
|
|
1,880
|
|
|
|
14
|
|
|
|
36
|
|
|
|
(93
|
)
|
|
|
|
|
|
|
(12
|
)
|
|
|
1,825
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plant and equipment
|
|
|
284
|
|
|
|
|
|
|
|
21
|
|
|
|
(12
|
)
|
|
|
50
|
|
|
|
|
|
|
|
343
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
7
|
|
|
|
|
|
|
|
114
|
|
|
|
(10
|
)
|
|
|
|
|
|
|
1
|
|
|
|
112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction in progress and advance payments
|
|
|
21
|
|
|
|
51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10
|
)
|
|
|
62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
2,208
|
|
|
|
65
|
|
|
|
171
|
|
|
|
(115
|
)
|
|
|
50
|
|
|
|
(21
|
)
|
|
|
2,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The additions consisted of the acquisition of IRU transmission capacity, due to the full financial settlement at the beginning
of the contract, and improvements and incremental expenses incurred for movable and immovable third-party assets used on the basis of finance lease agreements.
The item Buildings (civil and industrial) includes buildings under long rent contracts and related building adaptations, almost exclusively attributable to
Telecom Italia S.p.A..
With regard to the Real Estate Project, during the first nine months of 2016:
(5)
|
two properties were purchased, considered of strategic importance due to their present or foreseeable use, based on the technological evolution of the network and new ICT services. The column Other changes
includes a total of 25 million euros for the reclassification of the remaining value of these properties and the related improvements made. Five other properties were already purchased by the company or acquired under finance lease with a purchase
clause in 2015;
|
(6)
|
the renegotiation and/or conclusion of new contracts was completed for around 200 real estate leases (around 750 in 2015). Prior to these renegotiations, in accordance with IAS 17 (Leasing), part of these contracts had
been classified as operating leases with the consequent recognition of the rent under leasing costs in the income statement. The renegotiation and/or conclusion of new contracts resulted, on one hand, in the change of classification from operating
leases to financial leases and, on the other hand, with regard to the properties whose contracts were already classified as finance leases, in the re-measurement of the value of the property and the related payable. This resulted in an
overall impact on the balance sheet at September 30, 2016 of 36 million euros in terms of higher tangible assets (Land and Buildings) and related payables for financial leases.
|
The item Plant and equipment includes the recognition of the value of the telecommunications towers sold by the Tim Brasil group to American Tower do Brasil
and subsequently repurchased in the form of finance lease; the sale of the fourth tranche, which took place during the second quarter of 2016, resulted in leasebacks amounting to 74 million reais (around 19 million euros at the average exchange rate
of the first nine months of 2016). The Tim Brasil group also took out financial leases on newly-built towers for around 2 million euros, as already envisaged in the contractual arrangements with American Tower.
The item Other includes the effects of the renegotiation of the operating leases for around 11,000 motor vehicles, which resulted in their recognition as
finance leases. In the same way as described above, this reclassification also resulted in an overall impact on the balance sheet at September 30, 2016 of 114 million euros in terms of higher fixed assets and related payables for financial leases.
The item Construction in progress and advance payments includes the additions resulting from the recent acquisition of IRU transmission capacity for 40
million euros by Telecom Italia S.p.A..
|
|
|
|
|
Telecom Italia Group
Condensed
Consolidated Financial Statements
at September 30, 2016
|
|
Note 6
Tangible assets (owned and under finance leases)
|
|
|
|
|
76
|
NOTE 7
DISCONTINUED OPERATIONS/NON-CURRENT ASSETS HELD FOR SALE
On
March 8, 2016, following the approval by the Enacom, the Argentinian communications regulatory authority, the Telecom Italia Group completed the sale of the entire remaining interest in Sofora - Telecom Argentina.
The total amount from entire transaction was over 960 million USD, including:
(2)
|
proceeds of 550.6 million USD received on March 8, 2016 for the investment in Sofora; The impact in terms of the statement of cash flows (item Proceeds from sale that result in a loss of control of
subsidiaries or other businesses, net of cash disposed of) was 492 million euros;
|
(3)
|
additional proceeds of 50 million USD, also received on March 8, 2016, from other shareholders of Sofora, with respect to ancillary agreements to the transaction;
|
(4)
|
the overall sum of 329.5 million USD received previously in connection with sales of investments and other associated assets to Fintech completed between December 2013 and October 2014; and
|
(5)
|
the amount of 30 million USD generated by making technical support services available to Telecom Argentina group companies, secured by a pledge on debt securities and not yet collected.
|
●
|
|
|
|
|
|
|
Telecom Italia Group
|
|
Note 7
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Discontinued operations/Non-current assets
|
|
|
|
|
at September 30, 2016
|
|
held for sale
|
|
|
77
|
|
A summary is provided below of the income statement impacts from the Sofora - Telecom Argentina group and its
sale; the figures for 2016 have been translated at the average exchange rate for the period January 1 March 8 (15.7981 pesos per euro), whereas the figures for the first nine months of 2015 have been translated at the related
average exchange rate (9.98894 pesos per euro).
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
|
|
1/1 - 3/8
2016
|
|
|
9 months to
9/30/2015
|
|
Income statement effects from Discontinued operations/Non-current assets held for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
504
|
|
|
|
2,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
|
|
|
|
1
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
(372
|
)
|
|
|
(2,098
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains/(losses) on disposal of non-current assets
|
|
|
|
|
|
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit (loss) (EBIT)
|
|
|
|
|
|
|
133
|
|
|
|
759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income (expenses), net
|
|
|
|
|
|
|
(42
|
)
|
|
|
(10
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) before tax from Discontinued operations/Non-current assets held for sale
|
|
|
|
|
|
|
91
|
|
|
|
749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
|
|
|
(32
|
)
|
|
|
(263
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) after tax from Discontinued operations/Non-current assets held for sale
|
|
|
(a
|
)
|
|
|
59
|
|
|
|
486
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other minor entries
|
|
|
(b
|
)
|
|
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from Discontinued operations/Non-current assets held for sale
|
|
|
(c=a+b
|
)
|
|
|
59
|
|
|
|
480
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income statement effects on the selling entities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gains on disposal
|
|
|
|
|
|
|
307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transfer to the separate consolidated income statement of the Reserve for exchange differences on
translating foreign operations
|
|
|
|
|
|
|
(304
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense relating to the disposal
|
|
|
|
|
|
|
(15
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(d
|
)
|
|
|
(12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from Discontinued operations/Non-current assets held for sale
|
|
|
(c+d
|
)
|
|
|
47
|
|
|
|
480
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Parent
|
|
|
|
|
|
|
(3
|
)
|
|
|
69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests
|
|
|
|
|
|
|
50
|
|
|
|
411
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The earnings per share from Discontinued operations/Non-current assets held for sale, for the first nine months of 2016 and
the first nine months of 2015 are shown in the table below:
|
|
|
|
|
|
|
|
|
(euros)
|
|
1/1 - 3/8
2016
|
|
|
9 months to
9/30/2015
|
|
Earnings per share from Discontinued operations/Non-current assets held for sale
|
|
|
|
|
|
|
|
|
(Basic=Diluted)
|
|
|
|
|
|
|
|
|
Ordinary Share
|
|
|
0.00
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
Savings Share
|
|
|
0.00
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
●
|
|
|
|
|
Telecom Italia Group
|
|
Note 7
|
|
|
Condensed Consolidated Financial Statements
|
|
Discontinued operations/Non-current assets
|
|
|
at September 30, 2016
|
|
held for sale
|
|
78
|
Within the consolidated statements of cash flows the net impacts, expressed in terms of contribution to the
consolidation, of the Discontinued operations/Non-current assets held for sale are broken down as follows:
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
1/1 - 3/8
2016
|
|
|
9 months to
9/30/2015
|
|
Discontinued operations/Non-current assets held for sale:
|
|
|
|
|
|
|
|
|
Cash flows from (used in) operating activities
|
|
|
130
|
|
|
|
494
|
|
|
|
|
|
|
|
|
|
|
Cash flows from (used in) investing activities
|
|
|
(117
|
)
|
|
|
(749
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from (used in) financing activities
|
|
|
(58
|
)
|
|
|
250
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
(45
|
)
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia Group
|
|
Note 7
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Discontinued operations/Non-current assets
|
|
|
|
|
at September 30, 2016
|
|
held for sale
|
|
|
79
|
|
NOTE 8
EQUITY
Equity consisted of:
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9/30/2016
|
|
|
12/31/2015
|
|
Equity attributable to owners of the Parent
|
|
|
19,414
|
|
|
|
17,554
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests
|
|
|
2,223
|
|
|
|
3,695
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
21,637
|
|
|
|
21,249
|
|
|
|
|
|
|
|
|
|
|
The breakdown of Equity attributable to Owners of the Parent is provided below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
|
|
9/30/2016
|
|
|
|
|
|
12/31/2015
|
|
Share capital
|
|
|
|
|
|
|
10,650
|
|
|
|
|
|
|
|
10,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional Paid-in capital
|
|
|
|
|
|
|
1,731
|
|
|
|
|
|
|
|
1,731
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other reserves and retained earnings (accumulated losses), including profit (loss) for the
period
|
|
|
|
|
|
|
7,033
|
|
|
|
|
|
|
|
5,173
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserve for available-for-sale financial assets
|
|
|
44
|
|
|
|
|
|
|
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserve for cash flow hedges
|
|
|
(454
|
)
|
|
|
|
|
|
|
(249
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserve for exchange differences on translating foreign operations
|
|
|
(599
|
)
|
|
|
|
|
|
|
(1,413
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserve for remeasurements of employee defined benefit plans (IAS 19)
|
|
|
(173
|
)
|
|
|
|
|
|
|
(87
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of other profits (losses) of associates and joint ventures accounted for using the equity
method
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sundry reserves and retained earnings (accumulated losses), including profit (loss) for the
period
|
|
|
8,215
|
|
|
|
|
|
|
|
6,890
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
19,414
|
|
|
|
|
|
|
|
17,554
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On the basis of the resolution passed by the Shareholders Meeting held on May 25, 2016, the loss for the year 2015
reported in the financial statements of the Parent Telecom Italia S.p.A. was covered by using retained earnings (363 million euros) and reserves (93 million euros).
A total of 166 million euros was withdrawn from reserves to pay a preferred dividend to Savings Shareholders of 0.0275 euros for each savings share,
gross of withholdings required by law.
With regard to the Mandatory Convertible Bond issued by Telecom Italia Finance S.A. for 1,300 million euros
with mandatory conversion on maturity into Telecom Italia S.p.A. ordinary shares, on September 22, 2016 a voluntary conversion was executed for a nominal amount of 300,000 euros with respect to which 360,100 Telecom Italia S.p.A. ordinary
shares were issued and delivered. The amount of this capital increase was not material.
|
|
|
|
|
Telecom Italia Group
Condensed Consolidated Financial Statements
at
September 30, 2016
|
|
Note 8
Equity
|
|
80
|
Movements in Share Capital during the first nine months of 2016, amounting to 10,650 million euros, and
already net of treasury shares of 90 million euros, are shown in the tables below:
Reconciliation between the number of shares outstanding at
December 31, 2015 and September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(number of shares)
|
|
|
|
|
at 12/31/2015
|
|
|
Share issues
|
|
|
at 9/30/2016
|
|
|
% of share
capital
|
|
Ordinary shares issued
|
|
|
(a
|
)
|
|
|
13,499,911,771
|
|
|
|
360,100
|
|
|
|
13,500,271,871
|
|
|
|
69.13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
less: treasury shares
|
|
|
(b
|
)
|
|
|
(163,754,388
|
)
|
|
|
|
|
|
|
(163,754,388
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares outstanding
|
|
|
(c
|
)
|
|
|
13,336,157,383
|
|
|
|
360,100
|
|
|
|
13,336,517,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings shares issued and outstanding
|
|
|
(d
|
)
|
|
|
6,027,791,699
|
|
|
|
|
|
|
|
6,027,791,699
|
|
|
|
30.87
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Telecom Italia S.p.A. shares issued
|
|
|
(a+d
|
)
|
|
|
19,527,703,470
|
|
|
|
360,100
|
|
|
|
19,528,063,570
|
|
|
|
100.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Telecom Italia S.p.A. shares outstanding
|
|
|
(c+d
|
)
|
|
|
19,363,949,082
|
|
|
|
360,100
|
|
|
|
19,364,309,182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation between the value of shares outstanding at December 31, 2015 and September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
|
|
Share capital at
12/31/2015
|
|
|
Change in share
capital
|
|
|
Share capital at
9/30/2016
|
|
Ordinary shares issued
|
|
|
(a
|
)
|
|
|
7,425
|
|
|
|
|
|
|
|
7,425
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
less: treasury shares
|
|
|
(b
|
)
|
|
|
(90
|
)
|
|
|
|
|
|
|
(90
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares outstanding
|
|
|
(c
|
)
|
|
|
7,335
|
|
|
|
|
|
|
|
7,335
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings shares issued and outstanding
|
|
|
(d
|
)
|
|
|
3,315
|
|
|
|
|
|
|
|
3,315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Telecom Italia S.p.A. shares capital issued
|
|
|
(a+d
|
)
|
|
|
10,740
|
|
|
|
|
|
|
|
10,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Telecom Italia S.p.A. shares capital outstanding
|
|
|
(c+d
|
)
|
|
|
10,650
|
|
|
|
|
|
|
|
10,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 8
|
|
|
|
|
at September 30, 2016
|
|
Equity
|
|
|
81
|
|
POTENTIAL FUTURE CHANGES IN SHARE CAPITAL
The table below shows
future potential changes in share capital, based on: the issuance of the Guaranteed Subordinated Mandatory Convertible Bonds due 2016, convertible into ordinary shares of Telecom Italia S.p.A. by Telecom Italia Finance S.A. in November
2013; the issuance of the convertible bond by Telecom Italia S.p.A. in March 2015; the authorizations to increase the share capital in place at September 30, 2016; and the options and rights granted under equity compensation plans, still
outstanding at September 30, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
maximum shares
issuable
|
|
|
Share
capital
(thousands
of euros)
(*)
|
|
|
Additional
Paid-in
capital
(thousands
of euros)
|
|
|
Subscription
price per
share
(euros)
|
|
Additional capital increases not yet approved (ordinary shares)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014-2016 Stock Option Plan
|
|
|
196,000,000
|
|
|
|
107,800
|
|
|
|
n.a.
|
|
|
|
0.94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total additional capital increases not yet approved (ordinary shares)
|
|
|
|
|
|
|
107,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital increases already approved (ordinary shares)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 Guaranteed Subordinated Mandatory Convertible Bonds (ordinary shares)
principal
interest portion
|
|
|
n.a.
n.a.
|
|
|
|
1,300,000
79,625
|
|
|
|
n.a.
n.a.
|
|
|
|
n.a.
n.a.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 Convertible Bond (ordinary
shares)
(**)
|
|
|
1,082,485,386
|
|
|
|
2,000,000
|
|
|
|
n.a.
|
|
|
|
n.a.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible bonds
|
|
|
|
|
|
|
3,379,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
3,487,425
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
Amounts stated for capital increases connected with equity compensation plans and the Guaranteed Subordinated Mandatory Convertible Bonds due 2016, convertible into ordinary shares of Telecom Italia S.p.A.
are the total estimated value inclusive, where applicable, of any premiums.
|
(**)
|
The number of shares potentially issuable shown may be subject to adjustments.
|
Further details are provided in
the Note Financial liabilities (non-current and current).
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 8
|
|
|
|
|
at September 30, 2016
|
|
Equity
|
|
|
82
|
|
NOTE 9
FINANCIAL LIABILITIES (NON-CURRENT AND CURRENT)
Non-current and
current financial liabilities (gross financial debt) were broken down as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
|
|
9/30/2016
|
|
|
12/31/2015
|
|
Financial payables (medium/long-term):
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds
|
|
|
|
|
|
|
19,109
|
|
|
|
18,081
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible bonds
|
|
|
|
|
|
|
1,825
|
|
|
|
1,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts due to banks
|
|
|
|
|
|
|
5,383
|
|
|
|
5,778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial payables
|
|
|
|
|
|
|
326
|
|
|
|
991
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,643
|
|
|
|
26,652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance lease liabilities (medium/long-term)
|
|
|
|
|
|
|
2,401
|
|
|
|
2,271
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial liabilities (medium/long-term):
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedging derivatives relating to hedged items classified as
non-current
assets/liabilities of a financial nature
|
|
|
|
|
|
|
2,305
|
|
|
|
1,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-hedging derivatives
|
|
|
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,319
|
|
|
|
1,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-current financial liabilities
|
|
|
(a
|
)
|
|
|
31,363
|
|
|
|
30,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial payables (short-term):
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds
|
|
|
|
|
|
|
1,650
|
|
|
|
2,318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible bonds
|
|
|
|
|
|
|
1,377
|
|
|
|
1,363
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts due to banks
|
|
|
|
|
|
|
1,732
|
|
|
|
1,482
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial payables
|
|
|
|
|
|
|
199
|
|
|
|
233
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,958
|
|
|
|
5,396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance lease liabilities (short-term)
|
|
|
|
|
|
|
223
|
|
|
|
153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial liabilities (short-term):
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedging derivatives relating to hedged items classified as current assets/liabilities of a
financial nature
|
|
|
|
|
|
|
73
|
|
|
|
84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-hedging derivatives
|
|
|
|
|
|
|
12
|
|
|
|
591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
85
|
|
|
|
675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current financial liabilities
|
|
|
(b
|
)
|
|
|
5,266
|
|
|
|
6,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities directly associated with Discontinued operations/Non-current assets held for
sale
|
|
|
(c
|
)
|
|
|
|
|
|
|
348
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Financial liabilities (Gross financial debt)
|
|
|
(a+b+c
|
)
|
|
|
36,629
|
|
|
|
37,090
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 9
|
|
|
|
|
at September 30, 2016
|
|
Financial liabilities (non-current and current)
|
|
|
83
|
|
Gross financial debt according to the original currency of the transaction is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/2016
|
|
|
12/31/2015
|
|
|
|
(millions of foreign
currency)
|
|
|
(millions of euros)
|
|
|
(millions of foreign
currency)
|
|
|
(millions of euros)
|
|
USD
|
|
|
7,590
|
|
|
|
6,800
|
|
|
|
8,463
|
|
|
|
7,774
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GBP
|
|
|
2,039
|
|
|
|
2,368
|
|
|
|
2,041
|
|
|
|
2,781
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BRL
|
|
|
6,392
|
|
|
|
1,764
|
|
|
|
6,442
|
|
|
|
1,515
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JPY
|
|
|
20,880
|
|
|
|
185
|
|
|
|
20,036
|
|
|
|
153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EURO
|
|
|
|
|
|
|
25,512
|
|
|
|
|
|
|
|
24,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total excluding Discontinued Operations
|
|
|
|
|
|
|
36,629
|
|
|
|
|
|
|
|
36,742
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
348
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
36,629
|
|
|
|
|
|
|
|
37,090
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The breakdown of gross financial debt by effective interest rate bracket, excluding the effect of any hedging instruments, is
provided below:
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9/30/2016
|
|
|
12/31/2015
|
|
Up to 2.5%
|
|
|
6,053
|
|
|
|
7,165
|
|
|
|
|
|
|
|
|
|
|
From 2.5% to 5%
|
|
|
9,265
|
|
|
|
6,536
|
|
|
|
|
|
|
|
|
|
|
From 5% to 7.5%
|
|
|
13,659
|
|
|
|
14,719
|
|
|
|
|
|
|
|
|
|
|
From 7.5% to 10%
|
|
|
3,702
|
|
|
|
4,542
|
|
|
|
|
|
|
|
|
|
|
Over 10%
|
|
|
530
|
|
|
|
483
|
|
|
|
|
|
|
|
|
|
|
Accruals/deferrals, MTM and derivatives
|
|
|
3,420
|
|
|
|
3,297
|
|
|
|
|
|
|
|
|
|
|
Total excluding Discontinued Operations
|
|
|
36,629
|
|
|
|
36,742
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations
|
|
|
|
|
|
|
348
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
36,629
|
|
|
|
37,090
|
|
|
|
|
|
|
|
|
|
|
Following the use of derivative hedging instruments, on the other hand, the gross financial debt by nominal interest rate
bracket is:
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9/30/2016
|
|
|
12/31/2015
|
|
Up to 2.5%
|
|
|
10,987
|
|
|
|
9,835
|
|
|
|
|
|
|
|
|
|
|
From 2.5% to 5%
|
|
|
8,754
|
|
|
|
6,760
|
|
|
|
|
|
|
|
|
|
|
From 5% to 7.5%
|
|
|
10,056
|
|
|
|
12,617
|
|
|
|
|
|
|
|
|
|
|
From 7.5% to 10%
|
|
|
1,381
|
|
|
|
2,371
|
|
|
|
|
|
|
|
|
|
|
Over 10%
|
|
|
2,031
|
|
|
|
1,862
|
|
|
|
|
|
|
|
|
|
|
Accruals/deferrals, MTM and derivatives
|
|
|
3,420
|
|
|
|
3,297
|
|
|
|
|
|
|
|
|
|
|
Total excluding Discontinued Operations
|
|
|
36,629
|
|
|
|
36,742
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations
|
|
|
|
|
|
|
348
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
36,629
|
|
|
|
37,090
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 9
|
|
|
|
|
at September 30, 2016
|
|
Financial liabilities (non-current and current)
|
|
|
84
|
|
The maturities of financial liabilities according to the expected nominal repayment amount, as defined by
contract, are the following:
Details of the maturities of financial liabilities at nominal repayment amount:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
maturing by 9/30 of the year:
|
|
(millions of euros)
|
|
2017
|
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
2021
|
|
|
After
2021
|
|
|
Total
|
|
Bonds
(*)
|
|
|
1,173
|
|
|
|
2,070
|
|
|
|
3,082
|
|
|
|
1,267
|
|
|
|
564
|
|
|
|
13,882
|
|
|
|
22,038
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and other financial liabilities
|
|
|
1,123
|
|
|
|
796
|
|
|
|
2,392
|
|
|
|
859
|
|
|
|
586
|
|
|
|
587
|
|
|
|
6,343
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance lease liabilities
|
|
|
177
|
|
|
|
124
|
|
|
|
110
|
|
|
|
116
|
|
|
|
107
|
|
|
|
1,936
|
|
|
|
2,570
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
2,473
|
|
|
|
2,990
|
|
|
|
5,584
|
|
|
|
2,242
|
|
|
|
1,257
|
|
|
|
16,405
|
|
|
|
30,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial liabilities
|
|
|
799
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
799
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
3,272
|
|
|
|
2,990
|
|
|
|
5,584
|
|
|
|
2,242
|
|
|
|
1,257
|
|
|
|
16,405
|
|
|
|
31,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
With regard to the Mandatory Convertible Bond issued at the end of 2013, and maturing in 2016, classified under Convertible bonds, the cash repayment has not been considered because its settlement will take
place together with the mandatory conversion into Telecom Italia S.p.A. ordinary shares.
|
The main components of financial liabilities are
commented below.
Bonds are broken down as follows:
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9/30/2016
|
|
|
12/31/2015
|
|
Non-current portion
|
|
|
19,109
|
|
|
|
18,081
|
|
|
|
|
|
|
|
|
|
|
Current portion
|
|
|
1,650
|
|
|
|
2,318
|
|
|
|
|
|
|
|
|
|
|
Total carrying amount
|
|
|
20,759
|
|
|
|
20,399
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustment and measurements at amortized cost
|
|
|
(721
|
)
|
|
|
(752
|
)
|
|
|
|
|
|
|
|
|
|
Total nominal repayment amount
|
|
|
20,038
|
|
|
|
19,647
|
|
|
|
|
|
|
|
|
|
|
Convertible bonds consisted of:
|
|
the Mandatory Convertible Bond Guaranteed Subordinated Mandatory Convertible Bonds due 2016 convertible into ordinary shares of Telecom Italia S.p.A., for 1,300 million euros, issued by Telecom Italia
Finance S.A.;
|
|
|
the unsecured equity-linked bond for 2,000 million euros, with a coupon of 1.125%, issued by Telecom Italia S.p.A., convertible into newly-issued ordinary shares maturing in 2022.
|
|
|
This item was broken down as follows:
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9/30/2016
|
|
|
12/31/2015
|
|
Non-current portion
|
|
|
1,825
|
|
|
|
1,802
|
|
|
|
|
|
|
|
|
|
|
Current portion
|
|
|
1,377
|
|
|
|
1,363
|
|
|
|
|
|
|
|
|
|
|
Total carrying amount
|
|
|
3,202
|
|
|
|
3,165
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustment and measurements at amortized cost
|
|
|
98
|
|
|
|
135
|
|
|
|
|
|
|
|
|
|
|
Total nominal repayment amount
(*)
|
|
|
3,300
|
|
|
|
3,300
|
|
|
|
|
|
|
|
|
|
|
(*)
|
For the Mandatory Convertible Bond, the repayment on maturity will take place upon delivery of Telecom Italia S.p.A. ordinary shares.
|
With regard to the Mandatory Convertible Bond issued by Telecom Italia Finance S.A. for 1,300 million euros with mandatory conversion on maturity into Telecom
Italia S.p.A. ordinary shares, on September 22, 2016 a voluntary conversion was executed for a nominal amount of 300,000 euros with respect to which 360,100 Telecom Italia S.p.A. ordinary shares were delivered.
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 9
|
|
|
|
|
at September 30, 2016
|
|
Financial liabilities (non-current and current)
|
|
|
85
|
|
The nominal repayment amount of the bonds and convertible bonds totaled 23,338 million euros and was up 391
million euros compared to December 31, 2015 (22,947 million euros), as a result of the new issues and redemptions in the first nine months of 2016.
The following table lists the bonds issued by companies of the Telecom Italia Group, by issuing company, expressed at the nominal repayment amount, net of
bond repurchases, and also at market value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
Amount
(millions)
|
|
|
Nominal
repayment
amount
(millions of
euros)
|
|
|
Coupon
|
|
|
Issue date
|
|
|
Maturity
date
|
|
|
Issue price
(%)
|
|
|
Market
price at
9/30/16
(%)
|
|
|
Market value
at
9/30/16
(millions of
euros)
|
|
Bonds issued by Telecom Italia S.p.A.
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
544.6
|
|
|
|
544.6
|
|
|
|
7.000
|
%
|
|
|
10/20/11
|
|
|
|
1/20/17
|
|
|
|
(a)
100.185
|
|
|
|
102.045
|
|
|
|
556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
628.2
|
|
|
|
628.2
|
|
|
|
4.500
|
%
|
|
|
9/20/12
|
|
|
|
9/20/17
|
|
|
|
99.693
|
|
|
|
104.178
|
|
|
|
654
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GBP
|
|
|
750
|
|
|
|
871
|
|
|
|
7.375
|
%
|
|
|
5/26/09
|
|
|
|
12/15/17
|
|
|
|
99.608
|
|
|
|
106.687
|
|
|
|
929
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
592.9
|
|
|
|
592.9
|
|
|
|
4.750
|
%
|
|
|
5/25/11
|
|
|
|
5/25/18
|
|
|
|
99.889
|
|
|
|
107.166
|
|
|
|
635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
581.9
|
|
|
|
581.9
|
|
|
|
6.125
|
%
|
|
|
6/15/12
|
|
|
|
12/14/18
|
|
|
|
99.737
|
|
|
|
112.290
|
|
|
|
653
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
832.4
|
|
|
|
832.4
|
|
|
|
5.375
|
%
|
|
|
1/29/04
|
|
|
|
1/29/19
|
|
|
|
99.070
|
|
|
|
110.829
|
|
|
|
923
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GBP
|
|
|
850
|
|
|
|
987.2
|
|
|
|
6.375
|
%
|
|
|
6/24/04
|
|
|
|
6/24/19
|
|
|
|
98.850
|
|
|
|
111.005
|
|
|
|
1,096
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
719.5
|
|
|
|
719.5
|
|
|
|
4.000
|
%
|
|
|
12/21/12
|
|
|
|
1/21/20
|
|
|
|
99.184
|
|
|
|
109.037
|
|
|
|
784
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
547.5
|
|
|
|
547.5
|
|
|
|
4.875
|
%
|
|
|
9/25/13
|
|
|
|
9/25/20
|
|
|
|
98.966
|
|
|
|
113.557
|
|
|
|
622
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
563.6
|
|
|
|
563.6
|
|
|
|
4.500
|
%
|
|
|
1/23/14
|
|
|
|
1/25/21
|
|
|
|
99.447
|
|
|
|
112.289
|
|
|
|
633
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
(b)
199.8
|
|
|
|
199.8
|
|
|
|
6 month Euribor (base 365
|
)
|
|
|
1/1/02
|
|
|
|
1/1/22
|
|
|
|
100
|
|
|
|
100
|
|
|
|
200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
883.9
|
|
|
|
883.9
|
|
|
|
5.250
|
%
|
|
|
2/10/10
|
|
|
|
2/10/22
|
|
|
|
99.295
|
|
|
|
117.986
|
|
|
|
1,043
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
(d)
2,000
|
|
|
|
2,000
|
|
|
|
1.125
|
%
|
|
|
3/26/15
|
|
|
|
3/26/22
|
|
|
|
100
|
|
|
|
97.147
|
|
|
|
1,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
1,000
|
|
|
|
1,000
|
|
|
|
3.250%
|
|
|
|
1/16/15
|
|
|
|
1/16/23
|
|
|
|
99.446
|
|
|
|
106.426
|
|
|
|
1,064
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GBP
|
|
|
375
|
|
|
|
435.5
|
|
|
|
5.875
|
%
|
|
|
5/19/06
|
|
|
|
5/19/23
|
|
|
|
99.622
|
|
|
|
116.575
|
|
|
|
508
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
750
|
|
|
|
750
|
|
|
|
3.625
|
%
|
|
|
1/20/16
|
|
|
|
1/19/24
|
|
|
|
99.632
|
|
|
|
106.270
|
|
|
|
797
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USD
|
|
|
1,500
|
|
|
|
1,344
|
|
|
|
5.303
|
%
|
|
|
5/30/14
|
|
|
|
5/30/24
|
|
|
|
100
|
|
|
|
102.438
|
|
|
|
1,377
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
1,000
|
|
|
|
1,000
|
|
|
|
3.000
|
%
|
|
|
9/30/16
|
|
|
|
9/30/25
|
|
|
|
99.806
|
|
|
|
100.101
|
|
|
|
1,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
1,000
|
|
|
|
1,000
|
|
|
|
3.625
|
%
|
|
|
5/25/16
|
|
|
|
5/25/26
|
|
|
|
100
|
|
|
|
104.005
|
|
|
|
1,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
670
|
|
|
|
670
|
|
|
|
5.250
|
%
|
|
|
3/17/05
|
|
|
|
3/17/55
|
|
|
|
99.667
|
|
|
|
103.090
|
|
|
|
691
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
|
16,152.0
|
|
|
|
|
|
|
|
17,149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds issued by Telecom Italia Finance S.A. and guaranteed by Telecom Italia
S.p.A.
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
(c)
1,300
|
|
|
|
1,299.7
|
|
|
|
6.125
|
%
|
|
|
11/15/13
|
|
|
|
11/15/16
|
|
|
|
100
|
|
|
|
98.063
|
|
|
|
1,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
1,015
|
|
|
|
1,015
|
|
|
|
7.750
|
%
|
|
|
1/24/03
|
|
|
|
1/24/33
|
|
|
|
(a)
109.646
|
|
|
|
133.772
|
|
|
|
1,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
|
2,314.7
|
|
|
|
|
|
|
|
2,633
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds issued by Telecom Italia Capital S.A. and guaranteed by Telecom Italia
S.p.A.
|
|
|
|
|
|
|
|
|
|
USD
|
|
|
(e)
676.6
|
|
|
|
606.2
|
|
|
|
6.999
|
%
|
|
|
6/4/08
|
|
|
|
6/4/18
|
|
|
|
100
|
|
|
|
107.798
|
|
|
|
654
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USD
|
|
|
(e)
759.7
|
|
|
|
680.6
|
|
|
|
7.175
|
%
|
|
|
6/18/09
|
|
|
|
6/18/19
|
|
|
|
100
|
|
|
|
112.525
|
|
|
|
766
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USD
|
|
|
1,000
|
|
|
|
896.0
|
|
|
|
6.375
|
%
|
|
|
10/29/03
|
|
|
|
11/15/33
|
|
|
|
99.558
|
|
|
|
102.119
|
|
|
|
915
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USD
|
|
|
1,000
|
|
|
|
896.0
|
|
|
|
6.000
|
%
|
|
|
10/6/04
|
|
|
|
9/30/34
|
|
|
|
99.081
|
|
|
|
99.669
|
|
|
|
893
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USD
|
|
|
1,000
|
|
|
|
896.0
|
|
|
|
7.200
|
%
|
|
|
7/18/06
|
|
|
|
7/18/36
|
|
|
|
99.440
|
|
|
|
106.936
|
|
|
|
958
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USD
|
|
|
1,000
|
|
|
|
896,0
|
|
|
|
7.721
|
%
|
|
|
6/4/08
|
|
|
|
6/4/38
|
|
|
|
100
|
|
|
|
110.000
|
|
|
|
986
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
|
4,870.8
|
|
|
|
|
|
|
|
5,172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
23,337.5
|
|
|
|
|
|
|
|
24,954
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Weighted average issue price for bonds issued with more than one tranche.
|
(b)
|
Reserved for employees.
|
(c)
|
Mandatory Convertible Bond.
|
(d)
|
Bond convertible into newly-issued Telecom Italia S.p.A. ordinary treasury shares.
|
(e)
|
Net of the securities bought back by Telecom Italia S.p.A. on July 20, 2015.
|
The regulations and/or Offering
Circulars relating to the bonds of the Telecom Italia Group described above are available on the corporate website www.telecomitalia.com.
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 9
|
|
|
|
|
at September 30, 2016
|
|
Financial liabilities (non-current and current)
|
|
|
86
|
|
The following tables list the changes in bonds during the first nine months of 2016:
New issues
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of original currency)
|
|
Currency
|
|
|
Amount
|
|
|
Issue date
|
|
Telecom Italia S.p.A. 750 million euros 3.625% maturing 1/19/2024
|
|
|
Euro
|
|
|
|
750
|
|
|
|
1/20/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia S.p.A. 1,000 million euros 3.625% maturing 5/25/2026
|
|
|
Euro
|
|
|
|
1,000
|
|
|
|
5/25/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia S.p.A. 1,000 million euros 3.000% maturing 9/30/2025
|
|
|
Euro
|
|
|
|
1,000
|
|
|
|
9/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayments
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of original currency)
|
|
Currency
|
|
|
Amount
|
|
|
Repayment date
|
|
Telecom Italia S.p.A. 663 million euros 5.125%
(1)
|
|
|
Euro
|
|
|
|
663
|
|
|
|
1/25/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia S.p.A. 708 million euros 8.250%
(2)
|
|
|
Euro
|
|
|
|
708
|
|
|
|
3/21/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia S.p.A. 400 million euros, Euribor 3M+ 0.79%
|
|
|
Euro
|
|
|
|
400
|
|
|
|
6/7/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Net of buybacks by the Company of 337 million euros during 2014 and 2015.
|
(2)
|
Net of buybacks by the Company of 142 million euros during 2014.
|
Buybacks
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bond Name
|
|
Outstanding nominal
amount prior to the
buyback
(GBP)
|
|
|
Repurchased nominal
amount
(GBP)
|
|
|
Buyback price
|
|
|
Buyback date
|
|
Telecom Italia S.p.A. - 400 million British pounds, maturing May 2023, coupon 5.875%
|
|
|
400,000,000
|
|
|
|
25,000,000
|
|
|
|
111.000
|
%
|
|
|
6/29/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medium/long-term amounts due to banks of 5,383 million euros (5,778 million euros at December 31, 2015) decreased by 395
million euros. Short-term amounts due to banks totaled 1,732 million euros (1,482 million euros at December 31, 2015) and included 1,019 million euros of the current portion of medium/long-term amounts due to banks. In addition, Telecom Italia
Finance S.A. had investments in repurchase agreements (Repos) on government bonds expiring on October 2016 for a total value of 250 million euros.
Medium/long-term other financial payables amounting to 326 million euros (991 million euros at December 31, 2015) fell by 665 million euros (following the
repayment of the debt security in favor of the Fintech group amounting to 600.6 million USD for the completion of the sale of ownership interests held by the Telecom Italia Group in Sofora Telecom Argentina) and included:
|
|
100 million euros of Telecom Italia S.p.A.s loan from Cassa Depositi e Prestiti expiring in April 2019;
|
|
|
179 million euros of Telecom Italia Finance S.A.s loan of 20,000 million Japanese yen expiring in 2029.
|
Short-term other financial payables amounted to 199 million euros (233 million euros at December 31, 2015), down 34 million euros. They included 109 million
euros of the current portion of the medium/long-term other financial payables, of which 93 million euros relating to the remaining payable from the loan taken out by Telecom Italia S.p.A. with the Ministry of Economic Development for the purchase of
the rights of use for the 800, 1800 and 2600 MHz frequencies due in October 2016.
Medium/long-term finance lease liabilities totaled 2,401 million euros
(2,271 million euros at December 31, 2015) and mainly related to property leases accounted for using the financial method established by IAS 17.
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 9
|
|
|
|
|
at September 30, 2016
|
|
Financial liabilities (non-current and current)
|
|
|
87
|
|
Short-term finance lease liabilities amounted to 223 million euros (153 million euros at December 31, 2015).
Hedging derivatives relating to items classified as non-current liabilities of a financial nature amounted to 2,305 million euros (1,595 million euros at
December 31, 2015). Hedging derivatives relating to items classified as current liabilities of a financial nature totaled 73 million euros (84 million euros at December 31, 2015).
Non-hedging derivatives classified under non-current financial liabilities totaled 14 million euros (zero at December 31, 2015), while non-hedging derivatives
classified under current financial liabilities amounted to 12 million euros (591 million euros at December 31, 2015, of which 565 million euros relating to the value of the embedded option in the mandatory convertible bond of 1.3 billion euros
issued by Telecom Italia Finance S.A. Guaranteed Subordinated Mandatory Convertible Bonds due 2016 convertible into ordinary shares of Telecom Italia S.p.A.). These include the measurement of derivatives which, although put into
place for hedging purposes, do not possess the formal requisites to be considered as such under IFRS.
COVENANTS AND NEGATIVE PLEDGES
EXISTING AT SEPTEMBER 30, 2016
The bonds issued by the Telecom Italia Group do not contain financial covenants (e.g. ratios such as Debt/EBITDA,
EBITDA/Interest, etc.) or clauses that would force the early redemption of the bonds in relation to events other than the insolvency of the Telecom Italia Group. Furthermore, the repayment of the bonds and the payment of interest are not covered by
specific guarantees nor are there commitments provided relative to the assumption of future guarantees, except for the full and unconditional guarantees provided by Telecom Italia S.p.A. for the bonds issued by Telecom Italia Finance S.A.
and Telecom Italia Capital S.A..
Since these bonds have been placed principally with institutional investors in major world capital markets (Euromarket
and the U.S.A.), the terms which regulate the bonds are in line with market practice for similar transactions effected on these same markets. Consequently, for example, there are commitments not to use the companys assets as collateral for
loans (negative pledges).
With regard to the loans taken out by Telecom Italia S.p.A. (Telecom Italia) with the European
Investment Bank (EIB), at September 30, 2016, the nominal amount of outstanding loans amounted to 2,550 million euros, of which 1,100 million euros at direct risk and 1,450 million euros secured.
EIB loans not secured by bank guarantees for a nominal amount equal to 1,100 million euros need to apply the following covenants:
|
|
in the event the company becomes the target of a merger, demerger or contribution of a business segment outside the Group, or sells, disposes or transfers assets or business segments (except in certain cases, expressly
provided for), it shall immediately inform the EIB which shall have the right to ask for guarantees to be provided or changes to be made to the loan contract, or, only for certain loan contracts, the EIB shall have the option to demand the immediate
repayment of the loan (should the merger, demerger or contribution of a business segment outside the Group compromise the Project execution or cause a prejudice to EIB in its capacity as creditor);
|
|
|
with the 500 million euros loan, signed on December 14, 2015, Telecom Italia undertook to ensure that, for the entire duration of the loan, the total financial debt of the Group companies other than Telecom Italia
S.p.A. except for the cases when that debt is fully and irrevocably secured by Telecom Italia S.p.A. is lower than 35% (thirty-five percent) of the Groups total financial debt.
|
EIB loans secured by banks or entities approved by the EIB for a total nominal amount of 1,450 million euros, and direct risk loans, respectively for 300
million euros, signed on July 30, 2014 and 500 million euros, signed on December 14, 2015, must apply the following covenants:
|
|
Inclusion clause, covering a total of 1,650 million euros of loans, under which, in the event Telecom
Italia commits to uphold financial covenants in other loan contracts (and even more restrictive clauses for 2014 and 2015 direct risk loans, including, for instance, cross default clauses and commitments restricting the sale of goods) that are not
present in or are stricter than
|
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 9
|
|
|
|
|
at September 30, 2016
|
|
Financial liabilities (non-current and current)
|
|
|
88
|
|
|
those granted to the EIB, the EIB will have the right if, in its reasonable opinion, it considers that such changes may have a negative impact on Telecom Italias financial capacity
to request the provision of guarantees or the modification of the loan contract in order to establish an equivalent provision in favor of the EIB;
|
|
|
Network Event, covering a total of 1,350 million euros of loans, under which, in the event of the disposal of the entire fixed network or of a substantial part (in any case more than half in quantitative
terms) to third parties or in the event of disposal of the controlling interest in the company in which the network or a substantial part of it has previously been transferred, Telecom Italia must immediately inform EIB, which shall have the option
of requiring the establishment of guarantees or amendment of the loan contract or an alternative solution.
|
The loan agreements of Telecom
Italia S.p.A. do not contain financial covenants (e.g. ratios such as Debt/EBITDA, EBITDA/Interests, etc.) which would oblige the Company to repay the outstanding loan if the covenants are not observed.
The loan agreements contain the usual other types of covenants, including the commitment not to use the Companys assets as collateral for loans
(negative pledges), the commitment not to change the business purpose or sell the assets of the Company unless specific conditions exist (e.g. the sale takes place at fair market value). Covenants with basically the same content are also found in
the export credit loan agreement.
In the Loan Agreements and the Bonds, Telecom Italia is required to provide notification of change of control.
Identification of the occurrence of a change of control and the applicable consequences including the establishment of guarantees or the early repayment of the amount paid and the cancellation of the commitment in the absence of agreements to
the contrary are specifically covered in the individual agreements.
In addition, the outstanding loans generally contain a commitment by Telecom
Italia, whose breach is an Event of Default, not to implement mergers, demergers or transfer of business, involving entities outside the Group. Such Event of Default may entail, upon request of the Lender, the early redemption of the drawn amounts
and/or the annulment of the undrawn commitment amounts.
In the documentation of the loans granted to certain companies of the Tim Brasil group, the
companies must generally respect certain financial ratios (e.g. capitalization ratios, ratios for servicing debt and debt ratios) as well as the usual other covenants, under pain of a request for the early repayment of the loan.
Lastly, at September 30, 2016, no covenant, negative pledge clause or other clause relating to the above-described debt position, has in any way been breached
or violated.
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 9
|
|
|
|
|
at September 30, 2016
|
|
Financial liabilities (non-current and current)
|
|
|
89
|
|
REVOLVING CREDIT FACILITY
The following table shows the
composition and the drawdown of the committed credit lines available at September 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/2016
|
|
|
12/31/2015
|
|
(billions of euros)
|
|
Agreed
|
|
|
Drawn down
|
|
|
Agreed
|
|
|
Drawn down
|
|
Revolving Credit Facility expiring May 2019
|
|
|
4.0
|
|
|
|
|
|
|
|
4.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revolving Credit Facility expiring March 2020
|
|
|
3.0
|
|
|
|
|
|
|
|
3.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
7.0
|
|
|
|
|
|
|
|
7.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia has two syndicated Revolving Credit Facilities for amounts of 4 billion euros and 3 billion euros expiring May
24, 2019 and March 25, 2020 respectively, both not yet drawn down. The beneficial changes to the economic terms of the Revolving Credit Facilities took effect from January 4, 2016, together with the two-year extension to those facilities.
Telecom Italia also has access to:
|
|
a bilateral Term Loan from Banca Regionale Europea expiring July 2019 for 200 million euros, drawn down for the full amount;
|
|
|
a bilateral Term Loan from Cassa Depositi e Prestiti expiring April 2019, for 100 million euros, drawn down for the full amount;
|
|
|
two bilateral Term Loans from Mediobanca respectively for 200 million euros expiring in November 2019 and 150 million euros expiring in July 2020, drawn down for the full amount;
|
|
|
a bilateral Term Loan from ICBC expiring July 2020 for 120 million euros, drawn down for the full amount;
|
|
|
a bilateral Term Loan from Intesa Sanpaolo expiring August 2021 for 200 million euros, drawn down for the full amount;
|
|
|
an overdraft facility with Banca Popolare dellEmilia Romagna expiring July 2017 for 200 million euros, drawn down for the full amount.
|
TELECOM ITALIA RATING AT SEPTEMBER 30, 2016
At September 30,
2016, the three rating agencies Standard & Poors, Moodys and Fitch Ratings rated Telecom Italia as follows:
|
|
|
|
|
|
|
|
|
|
|
Rating
|
|
|
Outlook
|
|
STANDARD & POORS
|
|
|
BB+
|
|
|
|
Stable
|
|
MOODYS
|
|
|
Ba1
|
|
|
|
Negative
|
|
FITCH RATINGS
|
|
|
BBB-
|
|
|
|
Stable
|
|
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 9
|
|
|
|
|
at September 30, 2016
|
|
Financial liabilities (non-current and current)
|
|
|
90
|
|
NOTE 10
NET FINANCIAL DEBT
The following table shows the net financial
debt at September 30, 2016 and December 31, 2015, calculated in accordance with the criteria indicated in the Recommendations for the Consistent Implementation of the European Commission Regulation on Prospectuses, issued on February 10,
2005 by the European Securities & Markets Authority (ESMA), and adopted by Consob.
For the purpose of determining such figure, the amount of
financial liabilities has been adjusted by the effect of the relative hedging derivatives recorded in assets and the receivables arising from financial subleasing.
This table also shows the reconciliation of net financial debt determined according to the criteria indicated by ESMA and net financial debt calculated
according to the criteria of the Telecom Italia Group.
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
|
|
9/30/2016
|
|
|
12/31/2015
|
|
Non-current financial liabilities
|
|
|
|
|
|
|
31,363
|
|
|
|
30,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial liabilities
|
|
|
|
|
|
|
5,266
|
|
|
|
6,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities directly associated with Discontinued operations/Non-current assets held for
sale
|
|
|
|
|
|
|
|
|
|
|
348
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Gross financial debt
|
|
|
(a
|
)
|
|
|
36,629
|
|
|
|
37,090
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current financial assets (°)
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current financial receivables for lease contract
|
|
|
|
|
|
|
(80
|
)
|
|
|
(70
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current hedging derivatives
|
|
|
|
|
|
|
(2,780
|
)
|
|
|
(2,755
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b
|
)
|
|
|
(2,860
|
)
|
|
|
(2,825
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities other than investments
|
|
|
|
|
|
|
(1,492
|
)
|
|
|
(1,488
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial receivables and other current financial assets
|
|
|
|
|
|
|
(491
|
)
|
|
|
(352
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
(4,275
|
)
|
|
|
(3,559
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets relating to Discontinued operations/Non-current assets held for sale
|
|
|
|
|
|
|
|
|
|
|
(227
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c
|
)
|
|
|
(6,258
|
)
|
|
|
(5,626
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net financial debt as per Consob communication DEM/6064293/2006 (ESMA)
|
|
|
(d=a+b+c
|
)
|
|
|
27,511
|
|
|
|
28,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current financial assets (°)
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities other than investments
|
|
|
|
|
|
|
(1
|
)
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial receivables and other non-current financial assets
|
|
|
|
|
|
|
(99
|
)
|
|
|
(161
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(e
|
)
|
|
|
(100
|
)
|
|
|
(164
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net financial debt
(*)
|
|
|
(f=d+e
|
)
|
|
|
27,411
|
|
|
|
28,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reversal of fair value measurement of derivatives and related financial
assets/liabilities
|
|
|
(g
|
)
|
|
|
(676
|
)
|
|
|
(1,197
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net financial debt
|
|
|
(f+g
|
)
|
|
|
26,735
|
|
|
|
27,278
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(°)
|
At September 30, 2016 and at December 31, 2015, Non-current financial assets (b+e) amounted to 2,960 million euros and 2,989 million euros, respectively.
|
(*)
|
For details of the effects of related party transactions on net financial debt, see the specific table in the Note Related party transactions.
|
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 10
|
|
|
|
|
at September 30, 2016
|
|
Net financial debt
|
|
|
91
|
|
NOTE 11
SUPPLEMENTARY DISCLOSURES ON FINANCIAL INSTRUMENTS
MEASUREMENT AT FAIR VALUE
The fair value measurement of the financial instruments of the Group is classified according to the three levels set out in IFRS 7. In particular, the fair
value hierarchy introduces three levels of input:
|
|
Level 1: quoted prices in active market;
|
|
|
Level 2: prices calculated using observable market inputs;
|
|
|
Level 3: prices calculated using inputs that are not based on observable market data.
|
The tables below
provide additional information on the financial instruments, including the table relating to the hierarchy level for each class of financial asset/liability measured at fair value at September 30, 2016.
Key for IAS 39 categories
|
|
|
|
|
|
|
Acronym
|
|
Loans and Receivables
|
|
|
LaR
|
|
Financial assets Held-to-Maturity
|
|
|
HtM
|
|
Available-for-Sale financial assets
|
|
|
AfS
|
|
Financial Assets/Liabilities Held for Trading
|
|
|
FAHfT/FLHfT
|
|
Financial Liabilities at Amortized Cost
|
|
|
FLAC
|
|
Hedging Derivatives
|
|
|
HD
|
|
Not applicable
|
|
|
n.a.
|
|
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 11
|
|
|
|
|
at September 30, 2016
|
|
Supplementary disclosures on financial instruments
|
|
|
92
|
|
Hierarchy levels for each class of financial asset/liability measured at fair value at 9/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hierarchy Levels
|
|
(millions of euros)
|
|
|
|
|
IAS 39
Categories
|
|
|
Note
|
|
|
Carrying
amount in
financial
statements
at
9/30/2016
|
|
|
Level 1
(*)
|
|
|
Level 2
(*)
|
|
|
Level 3
(*)
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other investments
|
|
|
|
|
|
|
AfS
|
|
|
|
|
|
|
|
42
|
|
|
|
2
|
|
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities, financial receivables and other non-current financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which securities
|
|
|
|
|
|
|
AfS
|
|
|
|
|
|
|
|
1
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which hedging derivatives
|
|
|
|
|
|
|
HD
|
|
|
|
|
|
|
|
2,780
|
|
|
|
|
|
|
|
2,780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which non-hedging derivatives
|
|
|
|
|
|
|
FAHfT
|
|
|
|
|
|
|
|
43
|
|
|
|
|
|
|
|
43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a
|
)
|
|
|
|
|
|
|
|
|
|
|
2,866
|
|
|
|
3
|
|
|
|
2,835
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which available-for-sale financial assets
|
|
|
|
|
|
|
AfS
|
|
|
|
|
|
|
|
1,356
|
|
|
|
1,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which held-for-trading financial assets
|
|
|
|
|
|
|
FAHfT
|
|
|
|
|
|
|
|
136
|
|
|
|
136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial receivables and other current financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which hedging derivatives
|
|
|
|
|
|
|
HD
|
|
|
|
|
|
|
|
206
|
|
|
|
|
|
|
|
206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which non-hedging derivatives
|
|
|
|
|
|
|
FAHfT
|
|
|
|
|
|
|
|
73
|
|
|
|
|
|
|
|
73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b
|
)
|
|
|
|
|
|
|
|
|
|
|
1,771
|
|
|
|
1,492
|
|
|
|
279
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
(a+b
|
)
|
|
|
|
|
|
|
|
|
|
|
4,637
|
|
|
|
1,495
|
|
|
|
3,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which hedging derivatives
|
|
|
|
|
|
|
HD
|
|
|
|
9
|
)
|
|
|
2,305
|
|
|
|
|
|
|
|
2,305
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which non-hedging derivatives
|
|
|
|
|
|
|
FLHfT
|
|
|
|
9
|
)
|
|
|
14
|
|
|
|
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c
|
)
|
|
|
|
|
|
|
|
|
|
|
2,319
|
|
|
|
|
|
|
|
2,319
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which hedging derivatives
|
|
|
|
|
|
|
HD
|
|
|
|
9
|
)
|
|
|
73
|
|
|
|
|
|
|
|
73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which non-hedging derivatives
|
|
|
|
|
|
|
FLHfT
|
|
|
|
9
|
)
|
|
|
12
|
|
|
|
|
|
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(d
|
)
|
|
|
|
|
|
|
|
|
|
|
85
|
|
|
|
|
|
|
|
85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
(c+d
|
)
|
|
|
|
|
|
|
|
|
|
|
2,404
|
|
|
|
|
|
|
|
2,404
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
Level 1: quoted prices in active markets.
|
|
Level 2: prices calculated using observable market inputs.
|
|
Level 3: prices calculated using inputs that are not based on observable market data.
|
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 11
|
|
|
|
|
at September 30, 2016
|
|
Supplementary disclosures on financial instruments
|
|
|
93
|
|
NOTE 12
CONTINGENT LIABILITIES, OTHER INFORMATION
A description is
provided below of the most significant judicial, arbitration and tax disputes in which Telecom Italia Group companies are involved as of September 30, 2016, as well as those that came to an end during the period.
The Telecom Italia Group has posted liabilities totaling 394 million euros for those disputes described below where the risk of losing the case has been
considered probable.
A) SIGNIFICANT DISPUTES AND PENDING LEGAL ACTIONS
For the
following disputes and pending legal actions no significant facts have emerged with respect to what was published in the 2015 Annual Report:
(2)
|
International tax and regulatory disputes,
|
(3)
|
Irregularities concerning transactions for the leasing/rental of assets.
|
Telecom Italia Sparkle
Relations with I-Globe, Planetarium, Acumen, Accrue Telemedia and Diadem: investigation by the Public Prosecutors Office of Rome
The Rome Public Prosecutors Office has challenged the judgement of the Court of Rome of October 2013 with which the three former managers of Telecom
Italia Sparkle were fully acquitted from the charges of transnational conspiracy for the purpose of tax evasion and false declarations through the use of invoices or other documents for non-existent transactions ( carousel fraud), also
in relation to the position of the Telecom Italia Sparkle employees; the hearings of the appeal are, at present, scheduled until December 2016.
Telecom
Italia Sparkle is still being investigated for the administrative offence pursuant to Legislative Decree 231/2001, with the predicate offence of conspiracy and translational money laundering.
Following the outcome of the immediate trial, the Company fully released the provisions for risk in the profit and loss account during 2014 and obtained from
the Judicial Authority the release and return of all the sums issued to guarantee any obligations deriving from the application of Legislative Decree 231/2001; the sum of 1,549,000 euros, which corresponds to the maximum fine applicable for the
administrative offence, still remains under seizure.
As for risks of a fiscal nature, you are reminded that in February 2014 the
Agenzia delle
Entrate
(Lazio Regional Office) served three formal notifications of fines for the years 2005, 2006 and 2007, based on the assumption that the telephone traffic in the carousel fraud did not exist. The amount of the fines 25%
of the crime related costs unduly deducted total 280 million euros. In this respect, the Company has filed an appeal to the Provincial Tax Commission in April 2014. The Commission rejected the appeal with a decision filed on
30 May 2016.
The Company, also supported by the opinion of distinguished professionals, believes that there are many grounded reasons to challenge
the decision and has filed an appeal before the second level Tax Commission (Commissione Tributaria Regionale) of Rome.
For these reasons, and
considering the favorable outcome of the associated criminal proceedings, the risk is believed to be only potential, so no provisions were made in the financial statements.
Administrative offence charge pursuant to Legislative Decree 231/2001 for the so-called Telecom Italia Security Affair
In December 2008 Telecom Italia received notification
of the application for its committal for trial for the administrative offence specified in articles 21 and 25, subsections 2 and 4, of legislative decree no. 231/2001 in relation to the affairs that involved several former employees of the Security
function and former collaborators of the Company charged among other things with offences involving
|
|
|
|
|
|
|
Telecom Italia Group
Condensed Consolidated Financial Statements
at September 30, 2016
|
|
Note 12
Contingent liabilities, other information
|
|
|
94
|
|
corruption of public officials, with the object of acquiring information from confidential files. In May 2010 Telecom Italia was definitively no longer a defendant in the criminal trial, the
Judge for the Preliminary Hearing having approved the motion for settlement of the proceedings (plea bargaining) presented by the Company. In the hearing before Section One of the Milan Court of Assizes, Telecom Italia acted in the dual role of
civil party and civilly liable party. In fact, on the one hand it was admitted as civil party against all the defendants for all charges, and on the other it was also cited as the party with civil liability pursuant to article 2049 of the Italian
Civil Code for the actions of the defendants in relation to 32 civil parties. Telecom Italia Latam and Telecom Italia Audit and Compliance Services (now incorporated into Telecom Italia) also participated in the hearing as civil parties, having
filed appearances since the Preliminary Hearing and brought charges against the defendants for hacking.
After the lengthy evidence hearings, 22 civil
parties filed claims for compensation, also against Telecom Italia as civilly liable party, for over 60 million euros (over 42 million euros of which requested by a single civil party). The Company itself, as civil party, also summarised its
conclusions against the defendants, requesting that they be found liable for all the damages suffered as a result of the facts of the case. In February 2013, Section 1 of the Milan Court of Assizes issued the first instance judgement, sentencing the
defendants to terms of imprisonment of between 7 years and 6 months and one year. The Court also recognized that there had been non-pecuniary damage to some of the civil parties as a consequence of the alleged facts, and sentenced the defendants,
jointly and severally with civilly liable party Telecom Italia, to compensate said damages, totaling 270,000 euros (in part jointly and severally with Pirelli) plus legal fees; at the same time the Court also sentenced the defendants to pay
compensation for pecuniary and non-pecuniary damages incurred by the Company, granting it a provisional sum of 10 million euros. The judgement also recognized the existence of non-pecuniary damage to the companies Telecom Italia Latam and Telecom
Italia Audit & Compliance Services, sentencing the defendants to pay compensation for damages on an equitable basis of 20,000 euros for each company. In November 2013, the grounds for the judgement in the court of first instance were published
(and for its part, the Company decided not to appeal). The court summons in the appeal made by the seven convicted defendants. one person held civilly liable and some civil parties was served in July 2016, and will be heard from November 2016.
●
It should be noted that
for some disputes described below, on the basis of the information available at the closing date of the present document and with particular reference to the complexity of the proceedings, to their progress, and to elements of uncertainty of a
technical-trial nature, it was not possible to make a reliable estimate of the size and/or times of possible payments, if any. Moreover, in the case in which the disclosure of information relative to the dispute could seriously jeopardise the
position of Telecom Italia or its subsidiaries, only the general nature of the dispute is described.
Of the disputes with the aforementioned
characteristics, no significant facts have emerged for those listed below with respect to what was published in the 2015 Annual Report:
(2)
|
Italian Competition Authority Case A428,
|
(1)
|
COLT TECHNOLOGY SERVICES,
|
(2)
|
EUTELIA and VOICEPLUS,
|
(4)
|
Elinet S.p.A. Bankruptcy,
|
(5)
|
Dispute relative to Adjustments on license fees for the years 1994-1998,
|
(6)
|
Formal Notice of Assessments against Telecom Italia S.p.A.,
|
(7)
|
Brazil - JVCO Dispute.
|
|
|
|
|
|
|
|
Telecom Italia Group
Condensed Consolidated Financial Statements
at September 30, 2016
|
|
Note 12
Contingent liabilities, other information
|
|
|
95
|
|
Italian Competition Authority Case I-761
With a ruling issued on 10 July 2013, the AGCM
(Italian Competition Authority (ICA)) extended to Telecom Italia the investigation started in March of the same year into some firms active in the fixed network maintenance sector. The investigation aims to establish if an agreement exists that is
prohibited pursuant to article 101 of the Treaty on the Functioning of the European Union. The proceedings were initiated after Wind filed two complaints in which the ICA was informed that, based on an invitation to bid for the assignment of
network corrective maintenance services, it had encountered substantial uniformity of prices offered by the aforementioned enterprises and a significant difference from the offers submitted subsequently by other and different companies.
The ICA alleged that Telecom Italia carried out a role of coordinating the other parts of the procedure, both during the formulation of the offers requested
by Wind and in relation to the positions represented to communications regulator AGCom.
Telecom Italia challenged these proceedings before the
Administrative Court (TAR), sustaining that the ICA does not have competence in this matter.
On 7 July 2014, the ICA notified the objective
extension of the proceedings to check if the Company, abusing its dominant position, put in place initiatives that might influence the conditions of the offer of accessory technical services when the offers of the maintenance businesses to Wind and
Fastweb were being formulated. With the extension provision, the ICA has also extended the deadline for closing the proceedings from the original date of 31 July 2014 to 31 July 2015. This extension was also challenged before the Lazio
Administrative Court (TAR) sustaining that the Italian Competition Authority does not have competence in this matter.
In November 2014, for reasons of
procedural economy and also convinced that it was acting legitimately, Telecom Italia presented to the Authority a proposal of undertakings in order to resolve the competition concerns subject of the investigation. In its resolution of
19 December 2014 the ICA considered that these undertakings were not manifestly groundless and later ordered their publication for the purposes of market testing.
On 25 March 2015, the ICA definitively rejected the aforesaid undertakings, considering them not suitable for removing the anticompetitive aspects
investigated.
On 21 July 2015 the Communication of the Results of the Investigation was served on the parties to the proceedings, in which the
Offices of ICA expressed their position in the sense of (i) archiving the complaints regarding the abuse of dominant position and (ii) confirming, instead, that there exists between Telecom Italia and the maintenance firms an agreement to coordinate
the economic offers drawn up for Wind and Fastweb, and to prevent the unbundled supply of the ancillary technical services.
On 16 December 2015, the
final order was issued, confirming the conclusions of the Communication of the Results of the Investigation, sustaining that, between 2012 and 2013, there existed an agreement that restricted competition, and as a result imposed a fine of 21.5
million euros on the Company. The relevant market is the corrective maintenance (assurance) market and, more precisely, the market for troubleshooting the Telecom Italia LLU lines. The purpose of the conduct maintained by the Company and the network
firms would have been to limit competition and prevent the evolution of forms of unbundled supply of ancillary technical services.
Telecom Italia
appealed the order before the Lazio Regional Administrative Court (TAR). In judgement no. 09554/2016 issued in September 2016, the appeal was dismissed, and the Company will be appealing this decision to the Council of State.
WIND (I-761)
With a writ of summons before the Milan Court, Wind has claimed compensation from Telecom Italia of around 57 million euros for damages arising from alleged
anti-competitive conduct censured in the ICA case I-761 (on corrective maintenance) referring to the period 2012-2015. According to the other party, this conduct delayed and hindered its ability to obtain more favorable conditions in the unbundled
purchase of service to repair faults on the LLU access lines, and their effects were allegedly protracted to December 2015. The first hearing has been postponed to the month of January 2017. Telecom Italia has filed an appearance challenging the
claims made by the other party.
|
|
|
|
|
|
|
Telecom Italia Group
Condensed Consolidated Financial Statements
at September 30, 2016
|
|
Note 12
Contingent liabilities, other information
|
|
|
96
|
|
Vodafone (A428)
In August 2013, Vodafone, as incorporating company of
operator Teletu, submitted to the Milan Court a huge claim for damages for presumed abusive and anticompetitive behaviour (founded principally on ICA case A428) which Telecom Italia allegedly implemented in the period 2008 - 2013. The pecuniary
claim was quantified by Vodafone as an estimated sum of between 876 million euros and 1,029 million euros.
In particular, Vodafone alleged technical
boycotting activities, with refusal to activate lines requested for Teletu customers (in the period from 2008 to the month of June 2013), together with the adoption of allegedly abusive price policies for wholesale network access services (period
from 2008 to the month of June 2013). Furthermore, the other party complained of the presumed application of discounts to business customers greater than those envisaged (margin squeezing) and the carrying out of presumed illegal and
anticompetitive winback practices (in the period from the second half of 2012 to the month of June 2013).
Telecom Italia filed an appearance, challenging
the claims made by the other party regarding the merits and the amount and making a counterclaim. Following the August 2016 decision by the Court of Cassation which confirmed that the Milan Court had jurisdiction to decide the dispute, the merits of
the case will be decided at the next hearing, listed for December 2016.
With a writ of summons dated 28 May 2015 before the Milan Court, Vodafone
has advanced further claims for compensation, based on the same ICA case A428 and referring to alleged damages it suffered in the period July 2013 - December 2014 (and therefore over a period of time subsequent to the period of the similar
compensatory judgement mentioned above), for approximately 568.5 million euros.
The case also contains a reservation of further damages to be quantified,
during the proceedings, for the following periods, the claimant alleging that the presumed abusive conduct of Telecom Italia continued. Telecom Italia filed an appearance, challenging the claims made by the other party regarding the merits and the
amount and making a counterclaim.
With an order made in September 2016, the Milan Court ordered the consolidation of the two cases outlined above,
confirming the next hearing for both cases in the month of December 2016.
Vodafone
In June 2015 Vodafone issued proceedings for damages
in the Milan Court for alleged abuse of a dominant position by Telecom Italia in the bitstream NGA and VULA fibre access services market, initially claiming around 4.4 million euros, recently increased to a figure ranging
from 30 to 48.9 million euros.
The abusive conduct complained of by the plaintiff was allegedly enacted by Telecom Italia through aggressive offers to
grab customers and the hindering of Vodafones access to the fibre network to make it more difficult for it to provide ultrabroadband service to its customers.
Telecom Italia filed an appearance challenging the claims of the other party and also challenging the increased pecuniary claims for damanges filed by
counterpart in 2016.
Investigation by the Monza Public Prosecutors Office
The criminal proceedings regarding a number of
transactions for the leasing and/or sale of goods are currently pending before the Court of Monza with a first trial hearing scheduled for May 2017.
At
the end of the preliminary hearing the judge for the preliminary hearing issued a decree that ordered the judgement for the hypothesis of aggravated fraud and tax crimes against a former employee of the Company.
As part of these proceedings Telecom Italia, which filed a formal complaint against persons unknown in 2011, joined the proceedings as a civil party as the
person injured and damaged by the offence.
|
|
|
|
|
|
|
Telecom Italia Group
Condensed Consolidated Financial Statements
at September 30, 2016
|
|
Note 12
Contingent liabilities, other information
|
|
|
97
|
|
BT ITALIA
With a writ of summons in June 2015, BT Italia has
advanced, before the Milan Court, claims for compensation of approximately 638.6 million euros against Telecom Italia referring to alleged damages suffered in the period from 2009 to 2014 for technical boycotting and margin squeezing (these claims
refer to the known ICA A428 case). The plaintiff, assuming that the unlawful conduct of Telecom Italia is still taking place, also proposes that the amount claimed be updated up to the month of May 2015, recalculating the total to be 662.9 million
euros. Telecom Italia filed an appearance, challenging the claims of the plaintiff.
As part of a structured agreement between the Parties, the case was
settled in March 2016.
KPNQ West Italia S.p.A.
With a writ of summons issued by the Rome Court, KPNQ
West Italia has sued Telecom Italia, claiming damages quantified as totaling 37 million euros for alleged abusive and anti-competitive conduct in the period 2009-2011, through technical boycotting (KOs and refusals to activate wholesale services);
these claims were based on the content of the Italian Competition Authority ruling that settled the A428 case. The first hearing took place in May 2016. Telecom Italia filed an appearance, contesting all of the allegations made by the plaintiff.
TELEUNIT
With a writ of summons before the Rome Court, Teleunit has claimed 35.4 million euros in compensation from Telecom Italia, based on the known decision of the
Italian Competition Authority that settled the AGCM/A428 case. Specifically, the plaintiff complained that in the period 2009/2010 it had suffered abusive conduct in the form of technical boycotting (refusals to active network access services -
KOs), and anticompetitive practices in the form of margin squeezing (whereby the excess squeezing is considered abusive inasmuch as it cannot be replicated by competitors). Telecom Italia filed an appearance, contesting all of the plaintiffs
allegations.
With a writ of summons issued in October 2009 before the Milan Appeal Court, Teleunit asked that Telecom Italia alleged acts of abuse of its
dominant position in the premium services market be ascertained. The plaintiff quantified its damages at a total of approximately 362 million euros. Telecom Italia filed an appearance, contesting the claims of the other party.
After the ruling of January 2014 with which the Court of Appeal declared that it was not competent in this matter and referred the case to the Court, Teleunit
reinstated the case before the Milan Court the following April.
Telecom Italia filed an appearance in the reinstated proceedings challenging the
plaintiffs claims.
Vodafone Dispute - Universal Service
In a decision published in July 2015, the Council of
State rejected the appeal lodged by AGCom (Italian Communications Authority) and Telecom Italia against the judgement of the Lazio Administrative Court (TAR) on the financing of the universal service obligations for the period 1999-2003; with such
judgement the administrative judge granted the appeals by Vodafone, annulling AGCom decisions 106, 107, 109/11/CONS on the renewal of the related proceedings, adding Vodafone to the list of subjects required to contribute, for a sum of approximately
38 million euros. Essentially, the judgement confirms that the Authority has not demonstrated the particular degree of replaceability between fixed and mobile telephony for mobile operators to be included among the subjects required to
repay the cost of the universal service, which means that AGCom needs to issue a new ruling.
|
|
|
|
|
|
|
Telecom Italia Group
Condensed Consolidated Financial Statements
at September 30, 2016
|
|
Note 12
Contingent liabilities, other information
|
|
|
98
|
|
Telecom has filed an application to AGCom to renew the proceedings, and an appeal to the Court of Cassation
against the judgement of the Council of State on the grounds that it exceeded its jurisdiction.
In April 2016 Vodafone appealed against the Ministry of
Economic Development and Telecom Italia to the Council of State, for non-compliance with the judgement of the Council of State that had already been appealed by Telecom Italia. This appeal referred to AGCom decision 109/11/CONS (2003 yearly payment,
on the basis of which Vodafone had paid the sum of approximately 9 million euros as contribution, restitution of which was requested).
Olivetti
Asbestos exposure
In September 2014 the Ivrea
Public Prosecutors Office closed the investigation into the alleged exposure to asbestos of 15 former employees of the company Ing. C. Olivetti S.p.A. (now Telecom Italia S.p.A.), Olivetti Controllo Numerico S.p.A,
Olivetti Peripheral Equipment S.p.A., Sixtel S.p.A. and Olteco S.p.A and served notice that the investigations had been concluded on the 39 people investigated (who include former Directors of the aforementioned
companies).
On December 2014 the Ivrea Public Prosecutors Office formulated a request for 33 of the 39 people originally investigated to be
committed for trial, and at the same time asked that 6 investigations be archived.
During the preliminary hearing, which started in April 2015, Telecom
Italia assumed the role of civilly liable party, after being formally summonsed by all 26 civil parties (institutions and natural persons) joined in the proceedings. At the end of the preliminary hearing, 18 of the original 33 persons accused were
committed for trial. The trial started in November 2015, and, as the party liable for damages, the Company has reached a settlement agreement with 12 of the 18 individuals (heirs/injured persons/family members) who are civil parties to the dispute
and they have, therefore, withdrawn the claim for damages against Telecom Italia.
In the judgement of first instance, in July 2016, 13 of the 18
defendants were found guilty, with sentences ranging from 1 year to 5 years of imprisonment: four of the defendants were found not guilty, and one case was dismissed for health reasons. The defendants were also sentenced to compensate, jointly and
severally with the party liable for damages Telecom Italia, with an overall sum of approximately 1.9 million euros as a provisional payment to INAIL and 6 heirs who were not part of the settlement. A generic judgement to pay compensation for damages
to the remaining damaged parties (entities/unions/associations) was issued, although they must in any case ask the civil court to quantify the damages. The reasons for the judgement have not yet been made available. When the full argument supporting
the judgement is published, the Company will consider what, if any, further action it should take to protect its interests.
Irregular sale of handsets to
companies in San Marino, Forlì and Milan Public Prosecutors Offices
Despite the initial dismissal of the case by the Bologna Public Prosecutors Office in 2011, in September 2013 the Forli Public Prosecutors Office
filed notice that its investigation on the sale of handsets to companies in San Marino in the years 2007-2009 in which, among others, one employee and three former employees of the Company were investigated, had concluded.
According to the Forlì Prosecutors Office, the facts it had investigated appeared to constitute criminal conspiracy aimed at committing acts of
false declaration through the use of invoices or other documents for non-existent transactions and the issuing of invoices or other documents for non-existent transactions and the respective target offences, as well as the
crime of preventing public supervisory authorities from performing their functions, relative to the communications transmitted to CONSOB.
The
same Public Prosecutors Office also transmitted the official investigation documents to the Milan Public Prosecutors Office, deemed to be territorially competent.
|
|
|
|
|
|
|
Telecom Italia Group
Condensed Consolidated Financial Statements
at September 30, 2016
|
|
Note 12
Contingent liabilities, other information
|
|
|
99
|
|
It should be noted that the same facts have in the past been the object of a specific audit, and of the
Greenfield Project, as a result of which the Company took steps to independently regularise some invoices for which the fiscal obligations laid down had not been fully discharged.
The Milan Public Prosecutors Office asked that the investigation be closed, deeming that some of the alleged offences could not be substantiated, and
pointing out that the statute of limitations applied to the earliest events.
In June 2016 the judge in the preliminary investigation (GIP) at the Milan
Court permanently closed the case.
Brazil - Opportunity Arbitration
In May 2012, Telecom Italia and Telecom Italia
International N.V (now merged in Telecom Italia Finance) were served with a notice of arbitration proceedings brought by the Opportunity group, claiming compensation for damages allegedly suffered for presumed breach of a settlement agreement
signed in 2005. Based on the claimants allegations, the damages relate to circumstances that emerged in the criminal proceedings pending before the Milan Court regarding,
inter alia
, unlawful activities undertaken by former
employees of Telecom Italia.
The investigatory phase having been completed, the hearing for oral discussion took place in November 2014, after which the
parties filed their concluding arguments in preparation for the decision on the case.
In September 2015, the Board of Arbitration declared the
proceedings closed, as the award was going to be filed.
Subsequently, the Board of Arbitration allowed the parties to exchange short arguments and the
ICC Court extended the term for the filing of the award.
In September 2016 the ICC Court notified the parties of its judgement, based on which the Board
of Arbitration rejected all the claims made by the Opportunity group and decided that the legal costs, administrative costs and costs for expert witnesses should be split between the parties.
Brazil - Docas/JVCO arbitration
In March 2013, the Brazilian companies Docas Investimentos S.A. (Docas) and JVCO Participações Ltda. (JVCO) started arbitration proceedings
against Tim Brasil Serviços e Participações S.A. (Tim Brasil), Tim Participações S.A. (Tim Participações) and Intelig Telecomunicações Ltda. (Intelig) requesting the restitution of the
Tim Participações shares held by the Tim Brasil group as guarantee (Alienaçao Fiduciaria) for the indemnity obligations assumed by the Docas group upon acquisition of Intelig (a Docas group subsidiary) through the
merger by incorporation of its controlling company into Tim Participações, as well as compensation for damages for alleged breach of the merger agreement and alleged offences by Tim Participações in determining the
exchange ratio between Tim Participações shares and Intelig shares, for an amount as yet unspecified and to be paid during the proceedings. After the Board of Arbitration had been constituted in May 2013, Tim Brasil, Tim
Participações and Intelig filed their response, including a counterclaim against the Docas group for compensation for damages.
In October
2013, in order to preserve the status quo until the arbitration decision had been made, the Board of Arbitration ordered that the guarantee represented by the aforementioned Tim Participações shares could not be enforced and that they
would remain in Alienaçao Fiduciaria in the custody of Banco Bradesco. The voting rights connected to the Shares are frozen and future dividends must be paid into an escrow account.
In December 2013, Docas and JVCO filed their Statement of Claim. In March 2014, Tim Brasil, Tim Participações and Intelig filed their
counterclaim, and the discovery phase then started. The Statements of Defence of all the parties were filed in February 2015, preparatory to the examination hearing.
The examination hearing took place in September 2015 in Rio de Janeiro, in which the witnesses were cross-examined and legal and financial experts gave
evidence.
|
|
|
|
|
|
|
Telecom Italia Group
Condensed Consolidated Financial Statements
at September 30, 2016
|
|
Note 12
Contingent liabilities, other information
|
|
|
100
|
|
In the month of December 2015, the parties filed their final arguments. The TIM group also asked that the
JVCOs application for the appointment of an expert by the Board be rejected.
The statements of costs were filed in January 2016. In June 2016 the
Board issued its judgement, with which it rejected the application of Docas and JVCO relating to the adjustment of the exchange ratio for the Intelig merger, as well as the experts request to verify alleged offences in the preparation of the
financial statements for the merger. Moreover, in addition to ordering it to pay some of TIMs legal costs, the Board also ordered Docas and JVCO to compensate TIM for some of the losses it had actually suffered (over 5.8 million reais, plus
interest and penalties) and ruled that TIM was entitled to retain TIM Participações shares (in Alienação Fiduciaria) as guarantee of these losses, and of the potential losses deriving from some specific
liabilities identified by the Board (totaling approximately 169.6 million reais plus interest and penalties). The Board ruled that Docas and JVCO were entitled to receive the payment of dividends on shares held as guarantee for the period December
2012 - 10 April 2014, plus interest. The Boards decision is immediately enforceable. Docas and JVCO subsequently filed applications interpreting and correcting the judgement with the Board and TIM has filed its opposing arguments against these
applications.
Brazil CAM JVCO Arbitration
In September 2015, JVCO Participações
Ltda filed a request for arbitration before the
Camara de Arbitragem do Mercado (
CAM), based in Rio de Janeiro, against Telecom Italia, Telecom Italia International, Tim Brasil Serviços e Participações S.A. and Tim
Participações S.A., claiming compensation for damages due to an alleged abuse of controlling power over Tim Participações. In the following October, all the companies entered appearances and filed statements of defence.
A Board of Arbitration was subsequently established, and in May 2016 there was a preliminary hearing, at which the Terms of Reference were signed. After
the hearing, the Board of Arbitration issued a procedural order accepting the Groups request for a preliminary examination of the question of standing to sue of JVCO and establishing a provisional schedule for the arbitration. In June the
parties exchanged their submissions, and in their defence Telecom Italia, Telecom Italia International, Tim Brasil Serviços e Participações S.A. and Tim Participações S.A. contested the standing to sue of the
counterparty and of Tim Participações and disputed the existence of the abuse of power. In the month of July 2016, the parties filed their responses. On October 19, 2016 the Arbitral Tribunal issued a procedural order on the
preliminary issues regarding the lack of standing to sue of the parties, founding the standing to sue of JVCO and of Tim Participações and setting the calendar for further submissions by the parties.
|
|
|
|
|
|
|
Telecom Italia Group
Condensed Consolidated Financial Statements
at September 30, 2016
|
|
Note 12
Contingent liabilities, other information
|
|
|
101
|
|
B) OTHER
INFORMATION
With reference to the cases listed below no significant facts have emerged with respect to that published in the 2015 Annual Report:
(8)
|
Dispute concerning the license fees for 1998,
|
(9)
|
VODAFONE (previously TELETU).
|
Mobile telephony - criminal proceedings
In March 2012 Telecom Italia was served notice of the
conclusion of the preliminary enquiries, which showed that the Company was being investigated by the Public Prosecutor of Milan pursuant to the Legislative Decree n. 231/2001, for the offences of handling stolen goods and counterfeiting committed,
according to the alleged allegations, by fourteen employees of the so-called ethnic channel, with the participation of a number of dealers, for the purpose of obtaining undeserved commissions from Telecom Italia.
The Company, as the injured party damaged by such conduct, had brought two legal actions in 2008 and 2009 and had proceeded to suspend the employees involved
in the criminal proceedings (suspension later followed by dismissal). It has also filed an initial statement of defence, together with a technical report by its own expert, requesting that the proceedings against it be suspended, and that charges of
aggravated fraud against the Company be brought against the other defendants. In December 2012, the Public Prosecutors Office filed a request for 89 defendants and the Company itself to be committed for trial.
During the preliminary hearing, the Company was admitted as civil party to the trial and, in November 2013, the conclusions in the interest of the civil party
were filed, reaffirming Telecom Italias total lack of involvement in the offences claimed.
At the end of the preliminary hearing, which took place
in March 2014, the Judge for the Preliminary Hearing committed for trial all the defendants (including Telecom Italia) who had not asked for their situation to be settled with alternative procedures, on the grounds that examination in a
trial was needed. In April 2016, at the end of the first part of the trial, the Public Prosecutor asked for Telecom Italia to be sentenced to pay an administrative fine of 900 thousand euros, but decided not to ask for confiscation of any of
the presumed profits of the offences (quantified in the committal proceedings as totaling several million euros), based on the assumption that Telecom Italia had in any event remedied the presumed organisational inadequacies. While acknowledging the
considerable redimensioning of the accusations, the Company has reiterated its total non-involvement in the facts at issue. The Company is awaiting the judgement.
|
|
|
|
|
|
|
Telecom Italia Group
Condensed Consolidated Financial Statements
at September 30, 2016
|
|
Note 12
Contingent liabilities, other information
|
|
|
102
|
|
NOTE 13
SEGMENT REPORTING
A) SEGMENT REPORTING
Segment reporting is based on the following operating segments:
The Media Business Unit was incorporated into the Domestic Business Unit as of January 1,
2016.
One of the key strategic drivers for growth identified in the Telecom Italia Group 20162018 Industrial Plan is the development of 4 Play
convergent services through the offer of a rich range of diversified video content, to be realized both in partnership with key content providers and through Tim Vision, the Groups own platform of services. Within this framework, Persidera
plays and will play an important role in supporting the development of Tim Vision services, building on its distinctive Head End expertise (management and distribution of TV signals via cable platform) and Play Out experience (television program
broadcasting operations). Other key synergies to help guarantee the medium-term stability/growth of revenues from bandwidth rental for Persidera will come from the development of strategic partnerships between Telecom Italia and content providers
that do not have proprietary broadcasting channels (multiplexes) for Free to Air television broadcasting and which instead pursue a multi-platform distribution strategy.
The framework of the 20162018 Industrial Plan and the new governance structure of Persidera are consistent with this future scenario, based on the
increasingly closer link between the TLC industry and Media/Content providers to underpin the growth of Ultra Broad Band services in the Consumer segment.
|
|
|
|
|
|
|
Telecom Italia Group
Condensed Consolidated
Financial Statements
at September 30, 2016
|
|
Note 13
Segment reporting
|
|
|
103
|
|
Separate Consolidated Income Statements by Operating Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
|
Brazil
|
|
|
Media
|
|
|
Other Operations
|
|
|
Adjustments and
eliminations
|
|
|
Consolidated
Total
|
|
(millions of euros)
|
|
9 months
to
9/30/2016
|
|
|
9 months
to
9/30/2015
|
|
|
9 months
to
9/30/2016
|
|
|
9 months
to
9/30/2015
|
|
|
9 months
to
9/30/2016
|
|
|
9 months
to
9/30/2015
|
|
|
9 months
to
9/30/2016
|
|
|
9 months
to
9/30/2015
|
|
|
9 months
to
9/30/2016
|
|
|
9 months
to
9/30/2015
|
|
|
9 months
to
9/30/2016
|
|
|
9 months
to
9/30/2015
|
|
Third-party revenues
|
|
|
11,011
|
|
|
|
11,096
|
|
|
|
2,920
|
|
|
|
3,696
|
|
|
|
|
|
|
|
62
|
|
|
|
8
|
|
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
13,939
|
|
|
|
14,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intragroup revenues
|
|
|
25
|
|
|
|
31
|
|
|
|
2
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
4
|
|
|
|
(29
|
)
|
|
|
(38
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues by operating segment
|
|
|
11,036
|
|
|
|
11,127
|
|
|
|
2,922
|
|
|
|
3,699
|
|
|
|
|
|
|
|
62
|
|
|
|
10
|
|
|
|
28
|
|
|
|
(29
|
)
|
|
|
(38
|
)
|
|
|
13,939
|
|
|
|
14,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
148
|
|
|
|
179
|
|
|
|
16
|
|
|
|
18
|
|
|
|
|
|
|
|
8
|
|
|
|
|
|
|
|
2
|
|
|
|
1
|
|
|
|
(1
|
)
|
|
|
165
|
|
|
|
206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating revenues and other income
|
|
|
11,184
|
|
|
|
11,306
|
|
|
|
2,938
|
|
|
|
3,717
|
|
|
|
|
|
|
|
70
|
|
|
|
10
|
|
|
|
30
|
|
|
|
(28
|
)
|
|
|
(39
|
)
|
|
|
14,104
|
|
|
|
15,084
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of goods and services
|
|
|
(4,210
|
)
|
|
|
(4,319
|
)
|
|
|
(1,511
|
)
|
|
|
(1,990
|
)
|
|
|
|
|
|
|
(30
|
)
|
|
|
(8
|
)
|
|
|
(29
|
)
|
|
|
19
|
|
|
|
28
|
|
|
|
(5,710
|
)
|
|
|
(6,340
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee benefits expenses
|
|
|
(2,046
|
)
|
|
|
(2,140
|
)
|
|
|
(248
|
)
|
|
|
(271
|
)
|
|
|
|
|
|
|
(6
|
)
|
|
|
(9
|
)
|
|
|
(17
|
)
|
|
|
|
|
|
|
1
|
|
|
|
(2,303
|
)
|
|
|
(2,433
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which: accruals to employee severance indemnities
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating expenses
|
|
|
(401
|
)
|
|
|
(754
|
)
|
|
|
(355
|
)
|
|
|
(387
|
)
|
|
|
|
|
|
|
(13
|
)
|
|
|
(2
|
)
|
|
|
(6
|
)
|
|
|
1
|
|
|
|
|
|
|
|
(757
|
)
|
|
|
(1,160
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which: write-downs and expenses in connection with credit management and provision
charges
|
|
|
(233
|
)
|
|
|
(577
|
)
|
|
|
(109
|
)
|
|
|
(118
|
)
|
|
|
|
|
|
|
(12
|
)
|
|
|
|
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
(342
|
)
|
|
|
(711
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in inventories
|
|
|
62
|
|
|
|
30
|
|
|
|
8
|
|
|
|
(29
|
)
|
|
|
|
|
|
|
|
|
|
|
(6
|
)
|
|
|
(7
|
)
|
|
|
1
|
|
|
|
|
|
|
|
65
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internally generated assets
|
|
|
406
|
|
|
|
402
|
|
|
|
68
|
|
|
|
68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5
|
|
|
|
7
|
|
|
|
479
|
|
|
|
477
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
4,995
|
|
|
|
4,525
|
|
|
|
900
|
|
|
|
1,108
|
|
|
|
|
|
|
|
21
|
|
|
|
(15
|
)
|
|
|
(29
|
)
|
|
|
(2
|
)
|
|
|
(3
|
)
|
|
|
5,878
|
|
|
|
5,622
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
(2,408
|
)
|
|
|
(2,440
|
)
|
|
|
(708
|
)
|
|
|
(708
|
)
|
|
|
|
|
|
|
(17
|
)
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
2
|
|
|
|
(3,116
|
)
|
|
|
(3,164
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains/(losses) on disposals of non-current assets
|
|
|
(4
|
)
|
|
|
5
|
|
|
|
18
|
|
|
|
342
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
14
|
|
|
|
348
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment reversals (losses) on non-current assets
|
|
|
(8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT
|
|
|
2,575
|
|
|
|
2,090
|
|
|
|
210
|
|
|
|
742
|
|
|
|
|
|
|
|
4
|
|
|
|
(15
|
)
|
|
|
(30
|
)
|
|
|
(2
|
)
|
|
|
|
|
|
|
2,768
|
|
|
|
2,806
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of losses (profits) of associates and joint ventures accounted for using the equity
method
|
|
|
(2
|
)
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2
|
)
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expenses) from investments
|
|
|
|
6
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
|
|
2,321
|
|
|
|
2,023
|
|
|
|
|
|
|
|
|
|
|
|
Finance expenses
|
|
|
|
(2,831
|
)
|
|
|
(3,993
|
)
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) before tax from continuing operations
|
|
|
|
2,262
|
|
|
|
851
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
(699
|
)
|
|
|
(391
|
)
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from continuing operations
|
|
|
|
1,563
|
|
|
|
460
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from Discontinued operations/Non-current assets held for sale
|
|
|
|
47
|
|
|
|
480
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) for the period
|
|
|
|
1,610
|
|
|
|
940
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
Owners of the Parent
|
|
|
|
1,495
|
|
|
|
367
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests
|
|
|
|
115
|
|
|
|
573
|
|
|
|
|
|
|
|
|
|
|
|
Domestic Business Unit 2016 (excluding the former Media Business Unit)
The table below shows the results of the Domestic
Business Unit on a like-for-like basis against the first nine months of 2015.
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
(millions of euros)
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2015
|
|
Third-party revenues
|
|
|
10,951
|
|
|
|
11,096
|
|
|
|
|
|
|
|
|
|
|
Intragroup revenues
|
|
|
31
|
|
|
|
31
|
|
|
|
|
|
|
|
|
|
|
Revenues by operating segment
|
|
|
10,982
|
|
|
|
11,127
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
146
|
|
|
|
179
|
|
|
|
|
|
|
|
|
|
|
Total operating revenues and other income
|
|
|
11,128
|
|
|
|
11,306
|
|
|
|
|
|
|
|
|
|
|
Acquisition of goods and services
|
|
|
(4,190
|
)
|
|
|
(4,319
|
)
|
|
|
|
|
|
|
|
|
|
Employee benefits expenses
|
|
|
(2,043
|
)
|
|
|
(2,140
|
)
|
|
|
|
|
|
|
|
|
|
of which: accruals to employee severance indemnities
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
Other operating expenses
|
|
|
(396
|
)
|
|
|
(754
|
)
|
|
|
|
|
|
|
|
|
|
of which: write-downs and expenses in connection with credit management and provision
charges
|
|
|
(233
|
)
|
|
|
(577
|
)
|
|
|
|
|
|
|
|
|
|
Change in inventories
|
|
|
62
|
|
|
|
30
|
|
|
|
|
|
|
|
|
|
|
Internally generated assets
|
|
|
406
|
|
|
|
402
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
4,967
|
|
|
|
4,525
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
(2,393
|
)
|
|
|
(2,440
|
)
|
|
|
|
|
|
|
|
|
|
Gains/(losses) on disposals of non-current assets
|
|
|
(3
|
)
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
Impairment reversals (losses) on non-current assets
|
|
|
(8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT
|
|
|
2,563
|
|
|
|
2,090
|
|
|
|
|
|
|
|
|
|
|
Share of losses (profits) of associates and joint ventures accounted for using the equity
method
|
|
|
(2
|
)
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia Group
Condensed Consolidated Financial Statements
at September 30, 2016
|
|
Note 13
Segment reporting
|
|
|
104
|
|
Revenues by Operating Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
|
Brazil
|
|
|
Media
|
|
|
Other Operations
|
|
|
Adjustments and
eliminations
|
|
|
Consolidated
Total
|
|
(millions of euros)
|
|
9 months
to
9/30/2016
|
|
|
9 months
to
9/30/2015
|
|
|
9 months
to
9/30/2016
|
|
|
9 months
to
9/30/2015
|
|
|
9 months
to
9/30/2016
|
|
|
9 months
to
9/30/2015
|
|
|
9 months
to
9/30/2016
|
|
|
9 months
to
9/30/2015
|
|
|
9 months
to
9/30/2016
|
|
|
9 months
to
9/30/2015
|
|
|
9 months
to
9/30/2016
|
|
|
9 months
to
9/30/2015
|
|
Revenues from equipment sales - third party
|
|
|
689
|
|
|
|
648
|
|
|
|
176
|
|
|
|
429
|
|
|
|
|
|
|
|
|
|
|
|
8
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
873
|
|
|
|
1,086
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from equipment sales - intragroup
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
2
|
|
|
|
(3
|
)
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues from equipment sales
|
|
|
690
|
|
|
|
648
|
|
|
|
176
|
|
|
|
429
|
|
|
|
|
|
|
|
|
|
|
|
10
|
|
|
|
11
|
|
|
|
(3
|
)
|
|
|
(2
|
)
|
|
|
873
|
|
|
|
1,086
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from services - third party
|
|
|
10,322
|
|
|
|
10,449
|
|
|
|
2,744
|
|
|
|
3,267
|
|
|
|
|
|
|
|
62
|
|
|
|
|
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
13,066
|
|
|
|
13,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from services - intragroup
|
|
|
24
|
|
|
|
31
|
|
|
|
2
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
(26
|
)
|
|
|
(36
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues from services
|
|
|
10,346
|
|
|
|
10,480
|
|
|
|
2,746
|
|
|
|
3,270
|
|
|
|
|
|
|
|
62
|
|
|
|
|
|
|
|
17
|
|
|
|
(26
|
)
|
|
|
(36
|
)
|
|
|
13,066
|
|
|
|
13,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues on construction contracts - third party
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues on construction contracts-intragroup
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues on construction contracts
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total third-party revenues
|
|
|
11,011
|
|
|
|
11,096
|
|
|
|
2,920
|
|
|
|
3,696
|
|
|
|
|
|
|
|
62
|
|
|
|
8
|
|
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
13,939
|
|
|
|
14,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total intragroup revenues
|
|
|
25
|
|
|
|
31
|
|
|
|
2
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
4
|
|
|
|
(29
|
)
|
|
|
(38
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues by operating segment
|
|
|
11,036
|
|
|
|
11,127
|
|
|
|
2,922
|
|
|
|
3,699
|
|
|
|
|
|
|
|
62
|
|
|
|
10
|
|
|
|
28
|
|
|
|
(29
|
)
|
|
|
(38
|
)
|
|
|
13,939
|
|
|
|
14,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic Business Unit 2016 (excluding the former Media Business Unit)
The table below shows the results of the Domestic
Business Unit on a like-for-like basis against the first nine months of 2015.
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
(millions of euros)
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2015
|
|
Revenues from equipment sales - third party
|
|
|
690
|
|
|
|
648
|
|
|
|
|
|
|
|
|
|
|
Revenues from equipment sales - intragroup
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues from equipment sales
|
|
|
690
|
|
|
|
648
|
|
|
|
|
|
|
|
|
|
|
Revenues from services - third party
|
|
|
10,261
|
|
|
|
10,449
|
|
|
|
|
|
|
|
|
|
|
Revenues from services - intragroup
|
|
|
31
|
|
|
|
31
|
|
|
|
|
|
|
|
|
|
|
Total revenues from services
|
|
|
10,292
|
|
|
|
10,480
|
|
|
|
|
|
|
|
|
|
|
Revenues on construction contracts - third party
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
Revenues on construction contracts-intragroup
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues on construction contracts
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
Total third-party revenues
|
|
|
10,951
|
|
|
|
11,096
|
|
|
|
|
|
|
|
|
|
|
Total intragroup revenues
|
|
|
31
|
|
|
|
31
|
|
|
|
|
|
|
|
|
|
|
Total revenues by operating segment
|
|
|
10,982
|
|
|
|
11,127
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia Group
Condensed Consolidated Financial Statements
at September 30, 2016
|
|
Note 13
Segment reporting
|
|
|
105
|
|
Purchase of intangible and tangible assets by Operating Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
|
Brazil
|
|
|
Media
|
|
|
Other Operations
|
|
|
Adjustments and
eliminations
|
|
|
Consolidated
Total
|
|
(millions of euros)
|
|
9 months
to
9/30/2016
|
|
|
9 months
to
9/30/2015
|
|
|
9 months
to
9/30/2016
|
|
|
9 months
to
9/30/2015
|
|
|
9 months
to
9/30/2016
|
|
|
9 months
to
9/30/2015
|
|
|
9 months
to
9/30/2016
|
|
|
9 months
to
9/30/2015
|
|
|
9 months
to
9/30/2016
|
|
|
9 months
to
9/30/2015
|
|
|
9 months
to
9/30/2016
|
|
|
9 months
to
9/30/2015
|
|
Purchase of intangible assets
|
|
|
725
|
|
|
|
817
|
|
|
|
400
|
|
|
|
393
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,125
|
|
|
|
1,210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of tangible assets
|
|
|
1,823
|
|
|
|
2,504
|
|
|
|
337
|
|
|
|
880
|
|
|
|
|
|
|
|
5
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
2,160
|
|
|
|
3,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total purchase of intangible and tangible assets
|
|
|
2,548
|
|
|
|
3,321
|
|
|
|
737
|
|
|
|
1,273
|
|
|
|
|
|
|
|
5
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
3,285
|
|
|
|
4,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which: capital expenditures
|
|
|
2,398
|
|
|
|
2,297
|
|
|
|
709
|
|
|
|
930
|
|
|
|
|
|
|
|
5
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
3,107
|
|
|
|
3,233
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which: change in financial leasing contracts
|
|
|
150
|
|
|
|
1,024
|
|
|
|
28
|
|
|
|
343
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
178
|
|
|
|
1,367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic Business Unit 2016 (excluding the former Media Business Unit)
The table below shows the results of the Domestic
Business Unit on a like-for-like basis against the first nine months of 2015.
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
(millions of euros)
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2015
|
|
Purchase of intangible assets
|
|
|
724
|
|
|
|
817
|
|
|
|
|
|
|
|
|
|
|
Purchase of tangible assets
|
|
|
1,820
|
|
|
|
2,504
|
|
|
|
|
|
|
|
|
|
|
Total purchase of intangible and tangible assets
|
|
|
2,544
|
|
|
|
3,321
|
|
|
|
|
|
|
|
|
|
|
of which: capital expenditures
|
|
|
2,394
|
|
|
|
2,297
|
|
|
|
|
|
|
|
|
|
|
of which: change in financial leasing contracts
|
|
|
150
|
|
|
|
1,024
|
|
|
|
|
|
|
|
|
|
|
Headcount by Operating Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic (*)
|
|
|
Brazil
|
|
|
Media
|
|
|
Other Operations
|
|
|
Consolidated Total
|
|
(number)
|
|
9/30/2016
|
|
|
12/31/2015
|
|
|
9/30/2016
|
|
|
12/31/2015
|
|
|
9/30/2016
|
|
|
12/31/2015
|
|
|
9/30/2016
|
|
|
12/31/2015
|
|
|
9/30/2016
|
|
|
12/31/2015
|
|
Headcount (**)
|
|
|
52,140
|
|
|
|
52,644
|
|
|
|
9,941
|
|
|
|
13,042
|
|
|
|
|
|
|
|
64
|
|
|
|
124
|
|
|
|
117
|
|
|
|
62,205
|
|
|
|
65,867
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
Following the change in its mission, Persidera became part of the Domestic Business Unit as of January 1, 2016; without that change, the headcount of the Domestic Business Unit at the end of the first nine months of
2016 would have been 52,077.
|
(**)
|
The number of personnel at the end of 2015 does not include the headcount relating to Discontinued operations/Non-current assets held for sale.
|
|
|
|
|
|
|
|
Telecom Italia Group
Condensed Consolidated Financial Statements
at September 30, 2016
|
|
Note 13
Segment reporting
|
|
|
106
|
|
Assets and liabilities by Operating Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
|
Brazil
|
|
|
Media
|
|
|
Other Operations
|
|
|
Adjustments and
eliminations
|
|
|
Consolidated Total
|
|
(millions of euros)
|
|
9/30/2016
|
|
|
12/31/2015
|
|
|
9/30/2016
|
|
|
12/31/2015
|
|
|
9/30/2016
|
|
|
12/31/2015
|
|
|
9/30/2016
|
|
|
12/31/2015
|
|
|
9/30/2016
|
|
|
12/31/2015
|
|
|
9/30/2016
|
|
|
12/31/2015
|
|
Non-current operating assets
|
|
|
46,920
|
|
|
|
46,366
|
|
|
|
7,044
|
|
|
|
5,912
|
|
|
|
|
|
|
|
238
|
|
|
|
4
|
|
|
|
4
|
|
|
|
|
|
|
|
(12
|
)
|
|
|
53,968
|
|
|
|
52,508
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current operating assets
|
|
|
4,452
|
|
|
|
4,234
|
|
|
|
1,290
|
|
|
|
1,095
|
|
|
|
|
|
|
|
37
|
|
|
|
30
|
|
|
|
44
|
|
|
|
(7
|
)
|
|
|
(49
|
)
|
|
|
5,765
|
|
|
|
5,361
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating assets
|
|
|
51,372
|
|
|
|
50,600
|
|
|
|
8,334
|
|
|
|
7,007
|
|
|
|
|
|
|
|
275
|
|
|
|
34
|
|
|
|
48
|
|
|
|
(7
|
)
|
|
|
(61
|
)
|
|
|
59,733
|
|
|
|
57,869
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments accounted for using the equity method
|
|
|
39
|
|
|
|
41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39
|
|
|
|
41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations/Non-current assets held for sale
|
|
|
|
|
|
|
|
3,904
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated assets
|
|
|
|
9,920
|
|
|
|
9,454
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
|
69,692
|
|
|
|
71,268
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating liabilities
|
|
|
8,722
|
|
|
|
8,812
|
|
|
|
2,047
|
|
|
|
2,046
|
|
|
|
|
|
|
|
27
|
|
|
|
66
|
|
|
|
82
|
|
|
|
(8
|
)
|
|
|
(37
|
)
|
|
|
10,827
|
|
|
|
10,930
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities directly associated with Discontinued operations/Non-current assets held
for sale
|
|
|
|
|
|
|
|
1,881
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated liabilities
|
|
|
|
37,228
|
|
|
|
37,208
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
21,637
|
|
|
|
21,249
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Equity and Liabilities
|
|
|
|
69,692
|
|
|
|
71,268
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic Business Unit 2016 (excluding the former Media Business Unit)
The table below shows the results of the Domestic
Business Unit on a like-for-like basis against the first nine months of 2015.
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
(millions of euros)
|
|
9/30/2016
|
|
|
12/31/2015
|
|
Non-current operating assets
|
|
|
46,704
|
|
|
|
46,366
|
|
|
|
|
|
|
|
|
|
|
Current operating assets
|
|
|
4,425
|
|
|
|
4,234
|
|
|
|
|
|
|
|
|
|
|
Total operating assets
|
|
|
51,129
|
|
|
|
50,600
|
|
|
|
|
|
|
|
|
|
|
Investments accounted for using the equity method
|
|
|
39
|
|
|
|
41
|
|
|
|
|
|
|
|
|
|
|
Total operating liabilities
|
|
|
8,700
|
|
|
|
8,812
|
|
|
|
|
|
|
|
|
|
|
B) REPORTING BY GEOGRAPHICAL AREA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
Non-current operating assets
|
|
|
|
|
|
|
Breakdown by location of operations
|
|
|
Breakdown by location of customers
|
|
|
Breakdown by location of operations
|
|
(millions of euros)
|
|
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2015
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2015
|
|
|
9/30/2016
|
|
|
12/31/2015
|
|
Italy
|
|
|
(a
|
)
|
|
|
10,767
|
|
|
|
10,928
|
|
|
|
10,028
|
|
|
|
10,205
|
|
|
|
46,480
|
|
|
|
46,117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outside Italy
|
|
|
(b
|
)
|
|
|
3,172
|
|
|
|
3,950
|
|
|
|
3,911
|
|
|
|
4,673
|
|
|
|
7,488
|
|
|
|
6,391
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
(a+b
|
)
|
|
|
13,939
|
|
|
|
14,878
|
|
|
|
13,939
|
|
|
|
14,878
|
|
|
|
53,968
|
|
|
|
52,508
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C) INFORMATION ABOUT MAJOR CUSTOMERS
None of the Telecom Italia
Groups customers exceeds 10% of consolidated revenues.
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
at
September 30, 2016
|
|
Note 13
|
|
|
|
|
|
|
Segment reporting
|
|
|
107
|
|
NOTE 14
RELATED PARTY TRANSACTIONS
The following tables show the figures
relating to related party transactions and the impact of those amounts on the separate consolidated income statements, consolidated statements of financial position and consolidated statements of cash flows.
The procedure adopted by the Company for the management of related party transactions expressly applies also to the participants in significant
shareholder agreements pursuant to Article 122 of the Consolidated Law on Finance that govern the candidature to the office of Board Director of the Company, when the majority of the Directors appointed are drawn from the resulting list
submitted. Accordingly, since the majority of the members of the Board of Directors of Telecom Italia in office (appointed by the Ordinary Shareholders Meeting of April 16, 2014 and subsequently supplemented by the Ordinary
Shareholders Meeting of December 15, 2015) were drawn from the list submitted then by the shareholder Telco, whose shareholders (Generali group, Mediobanca S.p.A., Intesa Sanpaolo S.p.A. and Telefonica S.A.) were bound at the time by a
significant shareholder agreement pursuant to Article 122 of Italian Legislative Decree 58/1998, the participants in that shareholder agreement and the companies controlled by them continue to be considered as related parties of Telecom Italia (even
though that shareholder agreement has been terminated in the meantime).
Related party transactions, when not dictated by specific laws, were conducted at
arms length. The transactions were subject to the above-mentioned internal procedure (available for consultation on the Companys website at the following address: www.telecomitalia.com, section Group channel Governance System)
which establishes procedures and time scales for verification and monitoring.
On November 13, 2013, the Telecom Italia Group accepted the offer for the
purchase of the entire controlling interest held in the Sofora Telecom Argentina group; as a result, from the 2013 consolidated financial statements, the investment has been classified as Discontinued Operations (Discontinued
operations/Non-current assets held for sale). The sale was completed on March 8, 2016.
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 14
|
|
|
|
|
at September 30, 2016
|
|
Related Party Transactions
|
|
|
108
|
|
The effects on the individual line items of the separate consolidated income statements for the first nine months
of 2016 and 2015 are as follows:
SEPARATE CONSOLIDATED INCOME STATEMENT LINE ITEMS 9 MONTHS TO 9/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related Parties
|
|
|
|
Total
|
|
|
Associates,
subsidiaries
of
associates
and joint
|
|
|
Other
related
|
|
|
Pension
|
|
|
Key
|
|
|
Total
related
|
|
|
Transactions
of
Discontinued
|
|
|
Total related
parties net of
Discontinued
Operations
|
|
|
% of
financial
statement
item
|
|
(millions of euros)
|
|
(a)
|
|
|
ventures
|
|
|
parties (*)
|
|
|
funds
|
|
|
managers
|
|
|
parties
|
|
|
Operations
|
|
|
(b)
|
|
|
(b/a)
|
|
Revenues
|
|
|
13,939
|
|
|
|
3
|
|
|
|
268
|
|
|
|
|
|
|
|
|
|
|
|
271
|
|
|
|
(23
|
)
|
|
|
248
|
|
|
|
1.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
165
|
|
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
2
|
|
|
|
1.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of goods and services
|
|
|
5,710
|
|
|
|
15
|
|
|
|
170
|
|
|
|
|
|
|
|
|
|
|
|
185
|
|
|
|
(14
|
)
|
|
|
171
|
|
|
|
3.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee benefits expenses
|
|
|
2,303
|
|
|
|
|
|
|
|
2
|
|
|
|
62
|
|
|
|
31
|
|
|
|
95
|
|
|
|
|
|
|
|
95
|
|
|
|
4.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
|
2,321
|
|
|
|
|
|
|
|
81
|
|
|
|
|
|
|
|
|
|
|
|
81
|
|
|
|
|
|
|
|
81
|
|
|
|
3.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance expenses
|
|
|
2,831
|
|
|
|
|
|
|
|
90
|
|
|
|
|
|
|
|
|
|
|
|
90
|
|
|
|
|
|
|
|
90
|
|
|
|
3.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from Discontinued operations/Non-current assets held for sale
|
|
|
47
|
|
|
|
(1
|
)
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
Other related parties both through Directors, Statutory Auditors and Key Managers and as participants in shareholder agreements pursuant to Article 122 of the Consolidated Law on Finance.
|
SEPARATE CONSOLIDATED INCOME STATEMENT LINE ITEMS 9 MONTHS TO 9/30/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related Parties
|
|
|
|
Total
|
|
|
Associates,
subsidiaries
of
associates
and joint
|
|
|
Other
related
|
|
|
Pension
|
|
|
Key
|
|
|
Total
related
|
|
|
Transactions of
Discontinued
|
|
|
Total related
parties net of
Discontinued
Operations
|
|
|
% of financial
statement item
|
|
(millions of euros)
|
|
(a)
|
|
|
ventures
|
|
|
parties (*)
|
|
|
funds
|
|
|
managers
|
|
|
parties
|
|
|
Operations
|
|
|
(b)
|
|
|
(b/a)
|
|
Revenues
|
|
|
14,878
|
|
|
|
4
|
|
|
|
466
|
|
|
|
|
|
|
|
|
|
|
|
470
|
|
|
|
(145
|
)
|
|
|
325
|
|
|
|
2.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of goods and services
|
|
|
6,340
|
|
|
|
23
|
|
|
|
253
|
|
|
|
|
|
|
|
|
|
|
|
276
|
|
|
|
(79
|
)
|
|
|
197
|
|
|
|
3.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee benefits expenses
|
|
|
2,433
|
|
|
|
|
|
|
|
11
|
|
|
|
66
|
|
|
|
11
|
|
|
|
88
|
|
|
|
(9
|
)
|
|
|
79
|
|
|
|
3.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
|
2,023
|
|
|
|
|
|
|
|
93
|
|
|
|
|
|
|
|
|
|
|
|
93
|
|
|
|
|
|
|
|
93
|
|
|
|
4.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance expenses
|
|
|
3,993
|
|
|
|
4
|
|
|
|
68
|
|
|
|
|
|
|
|
|
|
|
|
72
|
|
|
|
|
|
|
|
72
|
|
|
|
1.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from Discontinued operations/Non-current assets held for sale
|
|
|
480
|
|
|
|
(6
|
)
|
|
|
63
|
|
|
|
|
|
|
|
|
|
|
|
57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
Other related parties both through Directors, Statutory Auditors and Key Managers and as participants in shareholder agreements pursuant to Article 122 of the Consolidated Law on Finance.
|
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 14
|
|
|
|
|
at September 30, 2016
|
|
Related Party Transactions
|
|
|
109
|
|
The effects on the individual line items of the consolidated statements of financial position at September 30,
2016 and at December 31, 2015 are as follows:
CONSOLIDATED STATEMENT OF FINANCIAL POSITION LINE ITEMS AT 9/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related Parties
|
|
|
|
Total
|
|
|
Associates,
subsidiaries
of
associates
and joint
|
|
|
Other
related
|
|
|
Pension
|
|
|
Total
related
|
|
|
Transactions of
Discontinued
|
|
|
Total related
parties net of
Discontinued
Operations
|
|
|
% of financial
statement
item
|
|
(millions of euros)
|
|
(a)
|
|
|
ventures
|
|
|
parties (*)
|
|
|
funds
|
|
|
parties
|
|
|
Operations
|
|
|
(b)
|
|
|
(b/a)
|
|
Net financial debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current financial assets
|
|
|
(2,960
|
)
|
|
|
(10
|
)
|
|
|
(554
|
)
|
|
|
|
|
|
|
(564
|
)
|
|
|
|
|
|
|
(564
|
)
|
|
|
19.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities other than investments (current assets)
|
|
|
(1,492
|
)
|
|
|
|
|
|
|
(88
|
)
|
|
|
|
|
|
|
(88
|
)
|
|
|
|
|
|
|
(88
|
)
|
|
|
5.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial receivables and other current financial assets
|
|
|
(491
|
)
|
|
|
|
|
|
|
(21
|
)
|
|
|
|
|
|
|
(21
|
)
|
|
|
|
|
|
|
(21
|
)
|
|
|
4.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
(4,275
|
)
|
|
|
|
|
|
|
(643
|
)
|
|
|
|
|
|
|
(643
|
)
|
|
|
|
|
|
|
(643
|
)
|
|
|
15.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial assets
|
|
|
(6,258
|
)
|
|
|
|
|
|
|
(752
|
)
|
|
|
|
|
|
|
(752
|
)
|
|
|
|
|
|
|
(752
|
)
|
|
|
12.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current financial liabilities
|
|
|
31,363
|
|
|
|
|
|
|
|
1,055
|
|
|
|
|
|
|
|
1,055
|
|
|
|
|
|
|
|
1,055
|
|
|
|
3.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial liabilities
|
|
|
5,266
|
|
|
|
|
|
|
|
53
|
|
|
|
|
|
|
|
53
|
|
|
|
|
|
|
|
53
|
|
|
|
1.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net financial debt
|
|
|
27,411
|
|
|
|
(10
|
)
|
|
|
(198
|
)
|
|
|
|
|
|
|
(208
|
)
|
|
|
|
|
|
|
(208
|
)
|
|
|
(0.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other statement of financial position line items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and miscellaneous receivables and other current assets
|
|
|
5,440
|
|
|
|
5
|
|
|
|
79
|
|
|
|
|
|
|
|
84
|
|
|
|
|
|
|
|
84
|
|
|
|
1.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Miscellaneous payables and other non-current liabilities
|
|
|
1,497
|
|
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
2
|
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and miscellaneous payables and other current liabilities
|
|
|
7,183
|
|
|
|
16
|
|
|
|
129
|
|
|
|
27
|
|
|
|
172
|
|
|
|
|
|
|
|
172
|
|
|
|
2.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
Other related parties both through Directors, Statutory Auditors and Key Managers and as participants in shareholder agreements pursuant to Article 122 of the Consolidated Law on Finance.
|
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 14
|
|
|
|
|
at September 30, 2016
|
|
Related Party Transactions
|
|
|
110
|
|
CONSOLIDATED STATEMENT OF FINANCIAL POSITION LINE ITEMS AT 12/31/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
(a)
|
|
|
Related Parties
|
|
(millions of euros)
|
|
|
Associates,
subsidiaries
of
associates
and joint
ventures
|
|
|
Other
related
parties (*)
|
|
|
Pension
funds
|
|
|
Total
related
parties
|
|
|
Transactions of
Discontinued
Operations
|
|
|
Total related
parties net
of
Discontinued
Operations
(b)
|
|
|
% of financial
statement
item
(b/a)
|
|
Net financial debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current financial assets
|
|
|
(2,989
|
)
|
|
|
(7
|
)
|
|
|
(542
|
)
|
|
|
|
|
|
|
(549
|
)
|
|
|
|
|
|
|
(549
|
)
|
|
|
18.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities other than investments (current assets)
|
|
|
(1,488
|
)
|
|
|
|
|
|
|
(47
|
)
|
|
|
|
|
|
|
(47
|
)
|
|
|
|
|
|
|
(47
|
)
|
|
|
3.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial receivables and other current financial assets
|
|
|
(352
|
)
|
|
|
|
|
|
|
(16
|
)
|
|
|
|
|
|
|
(16
|
)
|
|
|
|
|
|
|
(16
|
)
|
|
|
4.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
(3,559
|
)
|
|
|
|
|
|
|
(72
|
)
|
|
|
|
|
|
|
(72
|
)
|
|
|
|
|
|
|
(72
|
)
|
|
|
2.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial assets
|
|
|
(5,399
|
)
|
|
|
|
|
|
|
(135
|
)
|
|
|
|
|
|
|
(135
|
)
|
|
|
|
|
|
|
(135
|
)
|
|
|
2.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations/Non-current assets held for sale of a financial nature
|
|
|
(227
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current financial liabilities
|
|
|
30,518
|
|
|
|
|
|
|
|
937
|
|
|
|
|
|
|
|
937
|
|
|
|
|
|
|
|
937
|
|
|
|
3.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial liabilities
|
|
|
6,224
|
|
|
|
|
|
|
|
168
|
|
|
|
|
|
|
|
168
|
|
|
|
|
|
|
|
168
|
|
|
|
2.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities directly associated with Discontinued operations/Non-current assets held for sale of a
financial nature
|
|
|
348
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net financial debt
|
|
|
28,475
|
|
|
|
(7
|
)
|
|
|
428
|
|
|
|
|
|
|
|
421
|
|
|
|
|
|
|
|
421
|
|
|
|
1.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other statement of financial position line items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and miscellaneous receivables and other current assets
|
|
|
5,112
|
|
|
|
2
|
|
|
|
158
|
|
|
|
|
|
|
|
160
|
|
|
|
(23
|
)
|
|
|
137
|
|
|
|
2.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations/Non-current assets held for sale of a non-financial nature
|
|
|
3,677
|
|
|
|
|
|
|
|
23
|
|
|
|
|
|
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and miscellaneous payables and other current liabilities
|
|
|
7,882
|
|
|
|
32
|
|
|
|
176
|
|
|
|
25
|
|
|
|
233
|
|
|
|
(16
|
)
|
|
|
217
|
|
|
|
2.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities directly associated with Discontinued operations/Non-current assets held for sale of a
non-financial nature
|
|
|
1,533
|
|
|
|
11
|
|
|
|
5
|
|
|
|
|
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
Other related parties both through Directors, Statutory Auditors and Key Managers and as participants in shareholder agreements pursuant to Article 122 of the Consolidated Law on Finance.
|
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 14
|
|
|
|
|
at September 30, 2016
|
|
Related Party Transactions
|
|
|
111
|
|
The effects on the individual line items of the consolidated statements of cash flows for the first nine months
of 2016 and 2015 are shown below:
CONSOLIDATED STATEMENT OF CASH FLOWS LINE ITEMS 9 MONTHS TO 9/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
(a)
|
|
|
Related Parties
|
|
(millions of euros)
|
|
|
Associates,
subsidiaries
of
associates
and joint
ventures
|
|
|
Other
related
parties (*)
|
|
|
Pension
funds
|
|
|
Total
related
parties
|
|
|
Transactions of
Discontinued
Operations
|
|
|
Total
related
parties
net of
Discontinued
Operations
(b)
|
|
|
% of
financial
statement
item
(b/a)
|
|
Purchase of intangible and tangible assets on an accrual basis
|
|
|
3,285
|
|
|
|
99
|
|
|
|
|
|
|
|
|
|
|
|
99
|
|
|
|
|
|
|
|
99
|
|
|
|
3.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
Other related parties both through Directors, Statutory Auditors and Key Managers and as participants in shareholder agreements pursuant to Article 122 of the Consolidated Law on Finance.
|
CONSOLIDATED STATEMENT OF CASH FLOWS LINE ITEMS 9 MONTHS TO 9/30/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related Parties
|
|
(millions of euros)
|
|
Total
(a)
|
|
|
Associates,
subsidiaries
of
associates
and joint
ventures
|
|
|
Other
related
parties (*)
|
|
|
Pension
funds
|
|
|
Total
related
parties
|
|
|
Transactions of
Discontinued
Operations
|
|
|
Total
related
parties
net of
Discontinued
Operations
(b)
|
|
|
% of
financial
statement
item
(b/a)
|
|
Purchase of intangible and tangible assets on an accrual basis
|
|
|
4,600
|
|
|
|
111
|
|
|
|
|
|
|
|
|
|
|
|
111
|
|
|
|
|
|
|
|
111
|
|
|
|
2.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
Other related parties both through Directors, Statutory Auditors and Key Managers and as participants in shareholder agreements pursuant to Article 122 of the Consolidated Law on Finance.
|
At September 30, 2016, Telecom Italia had issued guarantees in favor of the joint venture Alfiere S.p.A. for 1 million euros.
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 14
|
|
|
|
|
at September 30, 2016
|
|
Related Party Transactions
|
|
|
112
|
|
Remuneration to Key Managers
In the first nine months of 2016, the total
remuneration recorded on an accrual basis by Telecom Italia S.p.A. or by subsidiaries of the Group in respect of Key Managers amounted to 30.8 million euros (10.9 million euros in the first nine months of 2015), detailed as follows:
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2015
|
|
Short-term remuneration
|
|
|
10.1
|
|
|
|
9.0
|
|
|
|
|
|
|
|
|
|
|
Long-term remuneration
|
|
|
1.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employment termination benefit incentives
|
|
|
12.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based payments (*)
|
|
|
7.4
|
|
|
|
1.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30.8
|
|
|
|
10.9
|
|
|
|
|
|
|
|
|
|
|
(*)
|
These refer to the fair value of the rights, accrued to September 30, under the share-based incentive plans of Telecom Italia S.p.A. and its subsidiaries (2014/2016 Stock Option Plan, Special Awards and Stock Option
Plans of the South American subsidiaries).
|
Short-term remuneration is paid during the period it pertains to, and, at the latest, within the
six months following the end of that period.
The amounts shown in the table do not include the effects of the reversal of the accruals for the 2014/2016
Stock Option Plan. The related amounts are broken down below:
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2015
|
|
Share-based payments 2014/2016 Stock Option Plan, 2014/2015 verifications
|
|
|
(3.0
|
)
|
|
|
(1.6
|
)
|
|
|
|
|
|
|
|
|
|
In the first nine months of 2016, the contribution fees paid in to defined contribution plans (Assida and Fontedir) by Telecom
Italia S.p.A. or by subsidiaries of the Group on behalf of key managers amounted to 72,000 euros (97,000 euros for the first nine months of 2015).
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 14
|
|
|
|
|
at September 30, 2016
|
|
Related Party Transactions
|
|
|
113
|
|
In the first nine months of 2016, Key Managers, that is, those who have the power and responsibility,
directly or indirectly, for the planning, direction and control of the operations of the Telecom Italia Group, including directors, are the following:
|
|
|
|
|
Directors:
|
|
|
|
|
Giuseppe Recchi
|
|
|
|
Executive Chairman of Telecom Italia S.p.A.
|
Marco Patuano
|
|
(1)
|
|
Managing Director and Chief Executive Officer of Telecom Italia S.p.A.
|
Flavio Cattaneo
|
|
(2)
|
|
Managing Director and Chief Executive Officer of Telecom Italia S.p.A.
|
|
|
(3)
|
|
General Manager
|
Managers:
|
|
|
|
|
Rodrigo Modesto de Abreu
|
|
(4)
|
|
Diretor Presidente Tim Participações S.A.
|
Stefano De Angelis
|
|
(5)
|
|
Diretor Presidente Tim Participações S.A.
|
Stefano Azzi
|
|
(6)
|
|
Head of Consumer & Small Enterprise
|
Simone Battiferri
|
|
(11)
|
|
Head of ICT Solutions & Service Platforms
|
Stefano Ciurli
|
|
|
|
Head of Wholesale
|
Antonino Cusimano
|
|
(13)
|
|
Head of Corporate Legal Affairs
|
Stefano De Angelis
|
|
(7)
|
|
Head of Consumer & Small Enterprise Market
|
Mario Di Loreto
|
|
(8)
|
|
Head of People Value
|
Giovanni Ferigo
|
|
(6)
|
|
Head of Technology
|
Lorenzo Forina
|
|
(6)
|
|
Head of Business & Top Clients
|
Francesco Micheli
|
|
(9)
|
|
Head of Human Resources & Organizational Development
|
Cristoforo Morandini
|
|
(10)
|
|
Head of Regulatory Affairs and Equivalence
|
Giuseppe Roberto Opilio
|
|
(11)
|
|
Head of Technology
|
Piergiorgio Peluso
|
|
|
|
Head of Administration, Finance and Control
|
Paolo Vantellini
|
|
(12)
|
|
Head of Business Support Office
|
(5)
|
appointed by the Board of Directors of Tim Participações S.A. on May 11, 2016. The powers of the Diretor Presidente were awarded in the Board of Directors meeting held on July 25, 2016;
|
(9)
|
from May 23, 2016 (the responsibility for the former People Value function was assigned on an interim basis to the Head of Group Special Projects, Francesco Micheli. The Function was later renamed);
|
(10)
|
from March 17, 2016;
|
(12)
|
up to April 15, 2016 (from the same date, the responsibility of the function was assigned on an interim basis to the Chief Financial Officer of the Company, Piergiorgio Peluso);
|
(13)
|
to September 30, 2016.
|
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 14
|
|
|
|
|
at September 30, 2016
|
|
Related Party Transactions
|
|
|
114
|
|
NOTE 15
EVENTS SUBSEQUENT TO SEPTEMBER 30, 2016
GUARANTEED SUBORDINATED MANDATORY CONVERTIBLE BOND:
START OF CALCULATION PERIOD FOR CONVERSION RATIO
On October 13, the calculation period started for the conversion ratio into Telecom Italia shares for the
1,300,000,000 euros 6.125 % Guaranteed Subordinated Mandatory Convertible Bonds due 2016 bonds issued by Telecom Italia Finance S.A.. The calculation period is due to end on November 9, and the deadline for investors to submit a formal
request for conversion is November 10. After that deadline, any TIM shares relating to bonds for which conversion requests have not been made, in the manner and within the time specified, shall be liquidated based on the terms and conditions for
those bonds.
|
|
|
|
|
|
|
Telecom Italia Group
|
|
|
|
|
|
|
Condensed Consolidated Financial Statements
|
|
Note 15
|
|
|
|
|
at September 30, 2016
|
|
Events Subsequent to September 30, 2016
|
|
|
115
|
|
DECLARATION BY THE MANAGER RESPONSIBLE FOR PREPARING THE CORPORATE FINANCIAL REPORTS
The Manager Responsible for preparing the corporate financial reports declares, pursuant to paragraph 2, art. 154-bis of the Consolidated Law on Finance, that
the accounting disclosure contained in the Interim Report at September 30, 2016 of the Telecom Italia Group corresponds to the Companys documents, accounting records and entries.
|
The Manager Responsible for Preparing
|
the Companys Financial Reports
|
|
Piergiorgio Peluso
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim Management Report
|
|
Alternative Performance Measures
|
|
|
116
|
|
at September 30, 2016
|
|
|
|
|
|
|
Cautionary Statement for Purposes of the Safe Harbor Provisions of the United States Private
Securities Litigation Reform Act of 1995.
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking
statements. The Groups interim report as of and for the nine months ended September 30, 2016 included in this Form 6-K contains certain forward-looking statements. Forward-looking statements are statements that are not historical facts and can
be identified by the use of forward-looking terminology such as believes, may, is expected to, will, will continue, should, seeks or anticipates or
similar expressions or the negative thereof or other comparable terminology, or by the forward-looking nature of discussions of strategy, plans or intentions.
Actual results may differ materially from those projected or implied in the forward-looking statements. Such forward-looking information is based on certain
key assumptions which we believe to be reasonable but forward-looking information by its nature involves risks and uncertainties, which are outside our control, that could significantly affect expected results.
The following important factors could cause our actual results to differ materially from those projected or implied in any forward-looking statements:
|
1.
|
our ability to successfully implement our strategy over the 2016-2018 period;
|
|
2.
|
the continuing effects of the global economic crisis in the principal markets in which we operate, including, in particular, our core Italian market;
|
|
3.
|
the impact of regulatory decisions and changes in the regulatory environment in Italy and other countries in which we operate;
|
|
4.
|
the impact of political developments in Italy and other countries in which we operate;
|
|
5.
|
our ability to successfully meet competition on both price and innovation capabilities of new products and services;
|
|
6.
|
our ability to develop and introduce new technologies which are attractive in our principal markets, to manage innovation, to supply value added services and to increase the use of our fixed and mobile networks;
|
|
7.
|
our ability to successfully implement our internet and broadband strategy;
|
|
8.
|
our ability to successfully achieve our debt reduction and other targets;
|
|
9.
|
the impact of fluctuations in currency exchange and interest rates and the performance of the equity markets in general;
|
|
10.
|
the outcome of litigation, disputes and investigations in which we are involved or may become involved;
|
|
11.
|
our ability to build up our business in adjacent markets and in international markets (particularly in Brazil), due to our specialist and technical resources;
|
|
12.
|
our ability to achieve the expected return on the investments and capital expenditures we have made and continue to make in Brazil;
|
|
13.
|
the amount and timing of any future impairment charges for our authorizations, goodwill or other assets;
|
|
14.
|
our ability to manage and reduce costs;
|
|
15.
|
any difficulties which we may encounter in our supply and procurement processes, including as a result of the insolvency or financial weaknesses of our suppliers; and
|
|
16.
|
the costs we may incur due to unexpected events, in particular where our insurance is not sufficient to cover such costs.
|
The foregoing factors should not be construed as exhaustive. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such
forward-looking statements, which speak only as of the date hereof. We undertake no obligation to release publicly the result of any revisions to these forward-looking statements which may be made to reflect events or circumstances
after the date hereof, including, without limitation, changes in our business or acquisition strategy or planned capital expenditures, or to reflect the occurrence of unanticipated events.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date: November 28, 2016
|
|
|
|
|
TELECOM ITALIA S.p.A.
|
|
|
BY:
|
|
/s/ Umberto Pandolfi
|
|
|
Umberto Pandolfi
|
|
|
Company Manager
|
Telcom Italia (PK) (USOTC:TIAOF)
Historical Stock Chart
From Jun 2024 to Jul 2024
Telcom Italia (PK) (USOTC:TIAOF)
Historical Stock Chart
From Jul 2023 to Jul 2024