Herewith some detailed information on the management trend of each one of the 2017 quarters, compared with those of 2016. Please note that in this Report,
certain Organic like for like reconstructions are supplied, which are purely operative in nature and aim to allow for a better explanation of the business performance in the current period, sterilizing effects of
non-linear
or
non-recurrent
expression in the current or comparative period. This information should not be considered as given in lieu of the economic-financial information
of which a reclassification is supplied, is not subject to auditing and is produced for explanatory purposes only. Such above-mentioned items exclusively pertain to the Domestic market.
Revenues for the first nine months of 2017 came to
11,312 million euros and were up by 276 million euros (+2.5%) on the same period of 2016, continuing the trend of recovery that began in the previous year. Despite showing growth with respect to the same period of 2016 (+0.8%), there was a
slowdown in the third quarter, due to the introduction of the new EU roaming rules in
mid-June,
which pulled down revenues, as well as
non-recurring
events in the
Wholesale segment that positively affected the figures for the third quarter of 2016.
Revenues from services amounted to 10,393 million euros,
showing a growth of 47 million euros on the first nine months of 2016 (+0.5%), which also continued in the third quarter (+0.7%), despite the already mentioned impact of the introduction of the new EU roaming rules. This improvement was driven
by the growth in the Mobile and Fixed Broadband customer base, as well as the increase in ARPU levels (thanks to the higher adoption of Fiber and LTE ultrabroadband connectivity services, and digital and ICT services), also accompanied by higher
sales volumes for connected devices (Smartphones, SmartTVs, SmartHomes, Modems, etc.).
Revenues from product
sales, including the change in work in progress, amounted to 919 million euros in the first nine months of 2017 (+229 million euros compared to the same period of 2016) and reflected the steady increase in sales of smartphones and other
connected devices (smart TVs, Smart Home products, modems,
set-top
boxes, etc.).
EBITDA for the Domestic Business Unit totaled
5,055 million euros for the first nine months of 2017, up 60 million euros on the same period of 2016 (+1.2%), with an EBITDA margin of 44.7%
(-0.6
percentage points compared to the same period of
previous year). The first nine months of 2017 reflected the negative impact of
non-recurring
expenses totaling 221 million euros (139 million euros for the same period of the previous year), relating
to costs resulting from corporate restructuring and reorganization processes, disputes and business transactions.
Without these expenses, the organic
change in EBITDA would have been +2.8%, with an EBITDA margin of 46.6%, up 0.1 percentage points on the same period of 2016.
The EBITDA performance, in
addition to the improvement in sales earnings and the revenue performance, also reflected the positive impacts of the cost cutting program, which started to have an effect from the second quarter of 2016, with resources focused on marketing to
support sales initiatives and customer management, with a consequent reduction in industrial and general operating costs.
EBIT of the Domestic Business Unit for the first nine months of 2017 came to 2,507 million euros (2,575 million euros in the same period of 2016),
down 68 million euros
(-2.6%),
with an EBIT margin of 22.2% (23.3% in the first half of 2016).
Without these expenses, the organic change in EBIT would have been +1.6%, with an EBIT margin of 24.4%.
The EBIT performance reflected the increase in depreciation and amortization (+109 million euros), partially offset by the improvement in EBITDA
described above.
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 2017 for the Domestic Business Unit are presented in the following
tables, broken down by market/business segment and compared to the same period of 2016.
Core Domestic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd Quarter
2017
|
|
|
3rd Quarter
2016
|
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
|
% Change
|
|
(millions of euros)
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(a/b)
|
|
|
(c/d)
|
|
Revenues
|
|
|
3,535
|
|
|
|
3,503
|
|
|
|
10,500
|
|
|
|
10,239
|
|
|
|
0.9
|
|
|
|
2.5
|
|
Consumer
|
|
|
1,946
|
|
|
|
1,832
|
|
|
|
5,713
|
|
|
|
5,404
|
|
|
|
6.2
|
|
|
|
5.7
|
|
Business
|
|
|
1,118
|
|
|
|
1,096
|
|
|
|
3,398
|
|
|
|
3,296
|
|
|
|
2.0
|
|
|
|
3.1
|
|
Wholesale
|
|
|
424
|
|
|
|
507
|
|
|
|
1,258
|
|
|
|
1,370
|
|
|
|
(16.4
|
)
|
|
|
(8.2
|
)
|
Other
|
|
|
47
|
|
|
|
68
|
|
|
|
131
|
|
|
|
169
|
|
|
|
(30.9
|
)
|
|
|
(22.5
|
)
|
EBITDA
|
|
|
1,662
|
|
|
|
1,766
|
|
|
|
4,940
|
|
|
|
4,859
|
|
|
|
(5.9
|
)
|
|
|
1.7
|
|
EBITDA Margin
|
|
|
47.0
|
|
|
|
50.4
|
|
|
|
47.0
|
|
|
|
47.5
|
|
|
|
(3.4
|
)pp
|
|
|
(0.5
|
)pp
|
EBIT
|
|
|
813
|
|
|
|
975
|
|
|
|
2,470
|
|
|
|
2,515
|
|
|
|
(16.6
|
)
|
|
|
(1.8
|
)
|
EBIT Margin
|
|
|
23.0
|
|
|
|
27.8
|
|
|
|
23.5
|
|
|
|
24.6
|
|
|
|
(4.8
|
)pp
|
|
|
(1.1
|
)pp
|
Headcount at period end (number)
(*)
|
|
|
|
49,725
|
|
|
|
(1)
50,527
|
|
|
|
|
|
|
|
(1.6
|
)
|
(1)
|
Headcount at December 31, 2016
|
(*)
|
Includes employees with temp work contracts: 0 employees at 9/30/2017 (1 employee at 12/31/2016).
|
In detail:
|
|
Consumer
: revenues for the Consumer segment for the first nine months of 2017 amounted to a total of 5,713 million euros, an increase of 309 million euros compared to the same period of 2016 (+5.7%).
This performance continued the trend of recovery that had already begun in the previous year.
|
In particular:
|
|
|
revenues from the Mobile business amounted to 2,836 million euros and showed growth compared to the first nine months of 2016 (+126 million euros, +4.7%), with revenues from services in particular up
80 million euros (+3.3% on the same period of 2016). This continued the improvement seen in the previous quarters (+6.0% in the third quarter, +4.1% in the second quarter and +3.9% in the first quarter) due to the progressive stabilization and
improvement of market share and the steady growth in Internet mobile and digital services, which sustained the ARPU levels;
|
|
|
|
revenues for the Fixed-line segment amounted to 2,851 million euros, an increase of 191 million euros on the first nine months of 2016 (+7.2%), continuing the recovery already seen at the end of the previous
year (+6.8% in the third quarter, +11.2% in the second quarter and +3.5% in the first quarter) thanks to the containment of line losses, the growth in the Broadband and Ultra broadband customer base (which offset the loss of voice only accesses),
the increase in ARPU levels, and the strong performance of the sales of connected devices.
|
|
|
Business
: revenues for the Business segment amounted to 3,398 million euros, up 102 million euros on the same period of 2016 (+3.1%).
|
In detail:
|
|
|
revenues from the Mobile business posted performance essentially in line with the first nine months of 2016
(-0.4%);
specifically, the continuing decline in traditional mobile
services
(-9.4%
compared to the same period of 2016, mainly related to the voice component) driven by the shift of customers (both private individuals and government agencies) towards formulas with lower ARPU,
was fully offset by the positive performance of new digital services (+11.4% on the same period of the previous year);
|
|
|
|
revenues for the Fixed-line segment increased by 103 million euros (+4.2% on the first nine months of 2016) thanks to the steady increase in revenues from ICT services (+9.1%), which more than offset the reduction
in prices and revenues from traditional services and the effects of the technological shift towards VoIP solutions.
|
|
|
|
Wholesale
: revenues for the Wholesale segment in the first nine months of 2017 came to 1,258 million
euros, down on the same period of 2016
(-112 million
euros,
-8.2%).
This performance was
|
|
|
|
|
|
|
|
Interim Management Report at
September
30, 2017
|
|
Financial and Operating Highlights of the Business Units of the TIM Group
Domestic Business Unit
|
|
|
22
|
|
|
due to the absence of the boosts received from the sale of infrastructure (cable ducts and dark fiber/Backbone) with other operators, which had a positive impact on the figures for the third
quarter 2016, and to the end of the roaming agreement with H3G. The reduction in regulated prices, totaling
-47 million
euros, was more than offset by growth, particularly in the NGN segment
(+55 million euros).
|
International Wholesale Telecom Italia Sparkle group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd Quarter
2017
|
|
|
3rd Quarter
2016
|
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
|
% Change
|
|
(millions of euros)
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(a/b)
|
|
|
(c/d)
|
|
|
organic
(c/d)
|
|
Revenues
|
|
|
349
|
|
|
|
354
|
|
|
|
995
|
|
|
|
1,003
|
|
|
|
(1.4
|
)
|
|
|
(0.8
|
)
|
|
|
(0.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which third party
|
|
|
296
|
|
|
|
300
|
|
|
|
845
|
|
|
|
839
|
|
|
|
(1.3
|
)
|
|
|
0.7
|
|
|
|
0.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
35
|
|
|
|
48
|
|
|
|
124
|
|
|
|
145
|
|
|
|
(27.1
|
)
|
|
|
(14.5
|
)
|
|
|
(14.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA Margin
|
|
|
10.0
|
|
|
|
13.6
|
|
|
|
12.5
|
|
|
|
14.5
|
|
|
|
(3.6
|
)pp
|
|
|
(2.0
|
)pp
|
|
|
(1.9
|
)pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT
|
|
|
8
|
|
|
|
19
|
|
|
|
37
|
|
|
|
60
|
|
|
|
(57.9
|
)
|
|
|
(38.3
|
)
|
|
|
(38.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT Margin
|
|
|
2.3
|
|
|
|
5.4
|
|
|
|
3.7
|
|
|
|
6.0
|
|
|
|
(3.1
|
)pp
|
|
|
(2.3
|
)pp
|
|
|
(2.3
|
)pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Headcount at period end (number)
(*)
|
|
|
|
|
|
|
|
|
|
|
763
|
|
|
|
(1)
753
|
|
|
|
|
|
|
|
1.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Headcount at December 31, 2016
|
(*)
|
Includes employees with temp work contracts: 0 employees at 9/30/2017 (3 employees at 12/31/2016).
|
Revenues
for the
Telecom Italia Sparkle group International Wholesale
in the first nine months of 2017 totaled 995 million euros, substantially in line with the figure for the same period of 2016 (-8 million euros,
-0.8%).
This result was due to the decline in revenues from IP/Data services
(-28
million euros, -12.2%), mainly attributable to the fall in revenues from the Mediterranean
area as a result of the expiry of old long-term contracts, partially offset by the growth in revenues from Voice services (+18 million euros, +2.5%).
|
|
|
|
|
|
|
Interim Management Report at
September
30, 2017
|
|
Financial and Operating Highlights of the Business Units of the TIM Group
Domestic Business Unit
|
|
|
23
|
|
BRAZIL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
(millions of reais)
|
|
|
|
|
|
|
3rd Quarter
2017
|
|
|
3rd Quarter
2016
|
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
|
3rd Quarter
2017
|
|
|
3rd Quarter
2016
|
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(a/b)
|
|
|
(c/d)
|
|
Revenues
|
|
|
1,096
|
|
|
|
1,064
|
|
|
|
3,389
|
|
|
|
2,922
|
|
|
|
4,083
|
|
|
|
3,900
|
|
|
|
11,977
|
|
|
|
11,574
|
|
|
|
4.7
|
|
|
|
3.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
408
|
|
|
|
344
|
|
|
|
1,170
|
|
|
|
900
|
|
|
|
1,512
|
|
|
|
1,270
|
|
|
|
4,136
|
|
|
|
3,566
|
|
|
|
19.1
|
|
|
|
16.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA Margin
|
|
|
37.0
|
|
|
|
32.6
|
|
|
|
34.5
|
|
|
|
30.8
|
|
|
|
37.0
|
|
|
|
32.6
|
|
|
|
34.5
|
|
|
|
30.8
|
|
|
|
4.4
|
pp
|
|
|
3.7
|
pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT
|
|
|
146
|
|
|
|
89
|
|
|
|
340
|
|
|
|
210
|
|
|
|
533
|
|
|
|
334
|
|
|
|
1,202
|
|
|
|
832
|
|
|
|
59.6
|
|
|
|
44.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT Margin
|
|
|
13.1
|
|
|
|
8.6
|
|
|
|
10.0
|
|
|
|
7.2
|
|
|
|
13.1
|
|
|
|
8.6
|
|
|
|
10.0
|
|
|
|
7.2
|
|
|
|
4.5
|
pp
|
|
|
2.8
|
pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Headcount at period end (number)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,393
|
|
|
|
(1)
9,849
|
|
|
|
|
|
|
|
(4.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Headcount at December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
9/30/2017
|
|
|
9/30/2016
|
|
Lines at period end (thousands)
(*)
|
|
|
59,390
|
|
|
|
(1)
63,418
|
|
|
|
|
|
|
|
|
|
|
MOU (minutes/month)
(**)
|
|
|
108.1
|
|
|
|
117.7
|
|
|
|
|
|
|
|
|
|
|
ARPU (reais)
|
|
|
19.6
|
|
|
|
17.6
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Number at December 2016.
|
(*)
|
Includes corporate lines.
|
Revenues
Revenues for the first nine months of 2017 amounted
to 11,977 million reais and were up 403 million reais (+3.5%) compared to the same period of the previous year. Revenues from services totaled 11,399 million reais, an increase of 521 million reais compared to 10,878 million
reais for the first nine months of 2016 (+4.8%). These results confirm the continued improvement in the trend, with positive growth in the third quarter of 2017 both in total revenues (+4.7% compared to +3.2% for the second quarter 2017, +2.5% for
the first quarter 2017, and
-1.7%
for the fourth quarter 2016) and in revenues from services (+5.9% compared to +5.0% for the second quarter of 2017, +3.5% for the first quarter of 2017, and
-0.7%
for the fourth quarter of 2016).
Mobile Average Revenue Per User (ARPU) for the first nine months of 2017 was
19.6 reais, up on the figure of 17.6 reais for the first nine months of 2016 (+11.4%), due to the general repositioning towards the postpaid segment and new commercial initiatives aimed at increasing data usage and the average spend per customer.
The total number of lines at September 30, 2017 was 59,390 thousand, representing a decrease of 4,028 thousand on December 31, 2016
(63,418 thousand), with a market share of 24.6% in September 2017 (26.0% at December 31, 2016). This reduction was entirely attributable to the prepaid segment
(-5,918
thousand) and was only partially
offset by the growth in the postpaid segment (+1,890 thousand), also as a result of the consolidation underway in the market for second SIM cards. Postpaid customers represented 28.2% of the customer base at September 30, 2017, up 4.7
percentage points on December 2016 (23.5%).
|
|
|
|
|
|
|
Interim Management Report at
September
30, 2017
|
|
Financial and Operating Highlights of the Business Units of the TIM Group
Brazil Business Unit
|
|
|
24
|
|
Revenues from product sales came to 578 million reais (696 million reais in the first nine months of
2016;
-17.0%).
The reduction reflects the change in the commercial policy, which is now more focused on value rather than sales volume growth. The main goals of this strategy are to increase the purchasing of
new handsets giving TIM customers access to broadband services on 3G/4G networks and to support the new loyalty offerings for higher-value postpaid customers.
EBITDA
EBITDA amounted to 4,136 million reais, up 570 million reais on the first nine months of 2016 (+16.0%). The growth in EBITDA was attributable to both
the positive performance of revenues and the benefits from the projects to enhance the efficiency of the operating expenses structure, launched in the second half of 2016, with an improvement in the third quarter 2017 (+19.1% compared to +15.8% for
the second quarter 2017, +12.6% for the first quarter 2017, and +5.8% for the fourth quarter 2016).
The EBITDA margin stood at 34.5%, 3.7 percentage
points higher than in the first nine months of 2016.
You are also reminded that the employee benefits expenses for the first nine months of 2016 included
non-recurring
expenses for termination benefits of 56 million reais.
Even without the impact of these
non-recurring
expenses, EBITDA for the first nine months of 2017 showed an increase (+14.2%) compared to the first nine months of 2016, continuing the steady improvement seen in the third quarter 2017 (+17.0%
compared to +15.7% for the second quarter 2017, +9.4% for the first quarter 2017, and +2.1% for the fourth quarter 2016).
The changes in the main cost
items are shown below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
(millions of reais)
|
|
|
|
|
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
|
Change
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(c-d)
|
|
Acquisition of goods and services
|
|
|
1,675
|
|
|
|
1,511
|
|
|
|
5,918
|
|
|
|
5,984
|
|
|
|
(66
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee benefits expenses
|
|
|
261
|
|
|
|
248
|
|
|
|
922
|
|
|
|
982
|
|
|
|
(60
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating expenses
|
|
|
387
|
|
|
|
355
|
|
|
|
1,367
|
|
|
|
1,407
|
|
|
|
(40
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in inventories
|
|
|
7
|
|
|
|
(8
|
)
|
|
|
26
|
|
|
|
(32
|
)
|
|
|
58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT
EBIT amounted to 1,202 million reais, up +370 million reais (+44.5%) on the first nine months of 2016 (832 million reais). This result benefited
from the greater contribution from the EBITDA (+570 million reais), which was offset by higher depreciation (+169 million reais) related to the development of industrial infrastructure, and a lower impact of net gains on disposals of
assets
(-31 million
reais), mainly attributable to the telecommunication towers transaction. In this regard, we note that the last partial sale of telecommunication towers to American Tower do Brasil took
place in the second quarter of 2017. This transaction resulted in proceeds and an income effect of an immaterial amount.
|
|
|
|
|
|
|
Interim Management Report at
September
30, 2017
|
|
Financial and Operating Highlights of the Business Units of the TIM Group
Brazil Business Unit
|
|
|
25
|
|
CONSOLIDATED FINANCIAL POSITION AND CASH FLOWS PERFORMANCE
NON-CURRENT
ASSETS
|
|
Goodwill:
this decreased by 92 million euros, from 29,612 million euros at the end of 2016 to 29,520 million euros at September 30, 2017 due to the negative variation in exchange rates for the
Brazilian companies
(1)
. Further details are provided in the Note Goodwill in
the Condensed Consolidated Financial Statements at September 30, 2017 of the TIM Group.
|
|
|
Other intangible assets:
increased by 172 million euros, from 6,951 million euros at the end of 2016 to 7,123 million euros at September 30, 2017, representing the balance of the following
items:
|
|
|
|
capex (+1,635 million euros);
|
|
|
|
amortization charge for the period
(-1,349 million
euros);
|
|
|
|
disposals, exchange differences, reclassifications and other changes (for a net negative balance of 114 million euros).
|
|
|
|
Tangible assets:
these decreased by 94 million euros, from 16,360 million euros at the end of 2016 to 16,266 million euros at September 30, 2017, representing the balance of the following
items:
|
|
|
|
capex (+2,246 million euros);
|
|
|
|
changes in financial leasing contracts (+45 million euros);
|
|
|
|
depreciation charge for the period
(-2,009 million
euros);
|
|
|
|
disposals, exchange differences, reclassifications and other changes (for a net negative balance of 376 million euros).
|
CONSOLIDATED EQUITY
Consolidated equity amounted to 24,059 million euros (23,553 million euros at December 31, 2016), of which 21,781 million euros
attributable to owners of the Parent (21,207 million euros at December 31, 2016) and 2,278 million euros attributable to
non-controlling
interests (2,346 million euros at December 31,
2016). In greater detail, the changes in equity were the following:
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9/30/2017
|
|
|
12/31/2016
|
|
At the beginning of the period
|
|
|
23,553
|
|
|
|
21,333
|
|
|
|
|
|
|
|
|
|
|
Correction due to errors
|
|
|
|
|
|
|
(84
|
)
|
|
|
|
|
|
|
|
|
|
At the beginning of the period revised
|
|
|
23,553
|
|
|
|
21,249
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income (loss) for the period
|
|
|
710
|
|
|
|
2,801
|
|
|
|
|
|
|
|
|
|
|
Dividends approved by:
|
|
|
(205
|
)
|
|
|
(204
|
)
|
|
|
|
|
|
|
|
|
|
TIM S.p.A.
|
|
|
(166
|
)
|
|
|
(166
|
)
|
|
|
|
|
|
|
|
|
|
Other Group companies
|
|
|
(39
|
)
|
|
|
(38
|
)
|
|
|
|
|
|
|
|
|
|
Issue of equity instruments
|
|
|
(6
|
)
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
Conversion of the Guaranteed Subordinated Mandatory Convertible Bonds due 2016
|
|
|
|
|
|
|
1,300
|
|
|
|
|
|
|
|
|
|
|
Disposal of the Sofora Telecom Argentina group
|
|
|
|
|
|
|
(1,582
|
)
|
|
|
|
|
|
|
|
|
|
Other changes
|
|
|
7
|
|
|
|
(12
|
)
|
|
|
|
|
|
|
|
|
|
At the end of the period
|
|
|
24,059
|
|
|
|
23,553
|
|
|
|
|
|
|
|
|
|
|
(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 3.74014 at September 30, 2017 and 3.43542 at December 31, 2016.
|
|
|
|
|
|
|
|
Interim Management Report at
September
30, 2017
|
|
Consolidated Financial Position and Cash Flows Performance
|
|
|
26
|
|
CASH
FLOWS
Adjusted net financial debt stood at 26,228 million euros, up 1,109 million euros compared to December 31, 2016 (25,119 million
euros).
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
2017:
Change in adjusted net financial debt
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
|
Change
|
|
EBITDA
|
|
|
6,213
|
|
|
|
5,878
|
|
|
|
335
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures on an accrual basis
|
|
|
(3,881
|
)
|
|
|
(3,107
|
)
|
|
|
(774
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in net operating working capital:
|
|
|
(1,427
|
)
|
|
|
(830
|
)
|
|
|
(597
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in inventories
|
|
|
(64
|
)
|
|
|
(71
|
)
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in trade receivables and net amounts due from customers on construction
contracts
|
|
|
9
|
|
|
|
(31
|
)
|
|
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in trade payables (*)
|
|
|
(998
|
)
|
|
|
(425
|
)
|
|
|
(573
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other changes in operating receivables/payables
|
|
|
(374
|
)
|
|
|
(303
|
)
|
|
|
(71
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in employee benefits
|
|
|
(34
|
)
|
|
|
12
|
|
|
|
(46
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in operating provisions and Other changes
|
|
|
127
|
|
|
|
(45
|
)
|
|
|
172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating free cash flow
|
|
|
998
|
|
|
|
1,908
|
|
|
|
(910
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Revenues
|
|
|
6.8
|
|
|
|
13.7
|
|
|
|
(6.9
|
)pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of investments and other disposals flow
|
|
|
26
|
|
|
|
737
|
|
|
|
(711
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital increases/reimbursements, including incidental costs
|
|
|
16
|
|
|
|
|
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial investments flow
|
|
|
(1
|
)
|
|
|
(11
|
)
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends payment
|
|
|
(219
|
)
|
|
|
(227
|
)
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in financial leasing contracts
|
|
|
(45
|
)
|
|
|
(178
|
)
|
|
|
133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance expenses, income taxes and other net
non-operating
requirements flow
|
|
|
(1,884
|
)
|
|
|
(1,648
|
)
|
|
|
(236
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reduction/(Increase) in adjusted net financial debt from continuing operations
|
|
|
(1,109
|
)
|
|
|
581
|
|
|
|
(1,690
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reduction/(Increase) in net financial debt from Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
(38
|
)
|
|
|
38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reduction/(Increase) in adjusted net financial debt
|
|
|
(1,109
|
)
|
|
|
543
|
|
|
|
(1,652
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
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 2017 has been particularly impacted by the following:
|
|
|
|
|
|
|
Interim Management Report at
September
30, 2017
|
|
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
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
|
|
|
(millions of euros)
|
|
|
|
|
% of total
|
|
|
|
|
|
% of total
|
|
|
Change
|
|
Domestic
|
|
|
3,177
|
|
|
|
81.9
|
|
|
|
2,398
|
|
|
|
77.2
|
|
|
|
779
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brazil
|
|
|
704
|
|
|
|
18.1
|
|
|
|
709
|
|
|
|
22.8
|
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments and eliminations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Total
|
|
|
3,881
|
|
|
|
100.0
|
|
|
|
3,107
|
|
|
|
100.0
|
|
|
|
774
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Revenues
|
|
|
26.4
|
|
|
|
|
|
|
|
22.3
|
|
|
|
|
|
|
|
4.1
|
pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures in the first nine months of 2017 totaled 3,881 million euros, up 774 million euros on the first
nine months of 2016. In particular:
|
|
The
Domestic Business Unit
posted capital expenditures of 3,177 million euros, an increase of 779 million euros compared to the first nine months of 2016. This increase was attributable to the
innovation expenditure for infrastructure development (+386 million euros on the first nine months of 2016) and, in particular, it reflected the increase in capital expenditure for the development of next-generation networks and services, and
the renewal of the user rights for the GSM frequencies (630 million euros). The decrease in other types of expenditure continued thanks to the selectivity and attention given to capital allocation
choices based on strategic priorities
and profit optimization.
|
|
|
The
Brazil Business Unit
recorded capital expenditures of 704 million euros in the first nine months of 2017, down 5 million euros on the first nine months of 2016. Without the positive impact of the
exchange rate effect, which amounted to 85 million euros, the change was
-90 million
euros and mainly reflected the lower expenditure for renewals of TLC licenses
(-42 million
euros) and developments in Information Technology projects
(-39 million
euros), following the strong growth recorded in 2016 due to the launch of
new commercial offers and the introduction of the new billing system. Capital expenditure in network infrastructure in the first nine months of 2017 amounted to 471 million euros
(-11 million
euros
at constant exchange rates compared to the first nine months of 2016), and was mainly aimed at developing the 4G mobile broadband network, reaching 2,401 towns (+551 compared to the first half of 2017), with an urban population coverage rate of
85.8% (+6.0 percentage points compared to the first half of 2017).
|
Change in net operating working capital
The change in net operating working capital for the
first nine months of 2017 was a decrease of 1,427 million euros (decrease of 830 million euros in the first nine months of 2016). In particular:
|
|
the change in inventories generated a negative impact of 64 million euros; the management of trade receivables had a positive impact of 9 million euros, also thanks to the performance of the Brazilian Real,
which resulted in a positive exchange differential of 76 million euros, without which trade receivables would have shown a decrease of 68 million euros, connected to the increase in revenues;
|
|
|
the change in trade payables
(-998 million
euros) included a negative impact of around 87 million euros due to the performance of the Brazilian Real; it also included
the payment of around 257 million euros made by the Brazil Business Unit to the consortium that is carrying out the cleanup of the 700 MHz spectrum, which the Business Unit purchased the user rights to in 2014. The level of trade payables was
also influenced by the seasonal peak in payments for bills payable;
|
Sale of investments and other disposals flow
This item had a positive balance of 26 million
euros for the first nine months of 2017 and reflected the sale of
non-current
assets during the normal operating cycle (13 million euros) and the collection of a deferred portion of the price of a
non-controlling
interest sold in previous years (13 million euros).
|
|
|
|
|
|
|
Interim Management Report at
September
30, 2017
|
|
Consolidated Financial Position and Cash Flows Performance
|
|
|
28
|
|
In the first nine months of 2016, it was a positive figure of 737 million euros and essentially related to
the sale of the Sofora Telecom Argentina group that took place on March 8, 2016.
Financial investments flow
In the first nine months of 2017, this item
amounted to 1 million euros.
In the first nine months of 2016 this item amounted to 11 million euros and mainly included 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.
Change in leasing contracts
In the first nine months of 2017, this item
amounted to 45 million euros.
In the first nine months of 2016, the change was equal to 178 million and related to TIM S.p.A..
Further details are provided in the Note Tangible assets (owned and under finance leases) of the Condensed Consolidated Financial Statements at
September 30, 2017 of the TIM Group.
Finance expenses, income taxes and other net
non-operating
requirements
flow
The item amounted to 1,884 million
euros and mainly included the payment, during the first nine months of 2017, of net borrowing costs and income taxes, as well as the change in
non-operating
receivables and payables.
|
|
|
|
|
|
|
Interim Management Report at
September
30, 2017
|
|
Consolidated Financial Position and Cash Flows Performance
|
|
|
29
|
|
Net financial debt
Net financial debt is composed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9/30/2017
(a)
|
|
|
12/31/2016
(b)
|
|
|
Change
(a-b)
|
|
Non-current
financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds
|
|
|
19,417
|
|
|
|
20,369
|
|
|
|
(952
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts due to banks, other financial payables and liabilities
|
|
|
6,831
|
|
|
|
7,656
|
|
|
|
(825
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance lease liabilities
|
|
|
2,344
|
|
|
|
2,444
|
|
|
|
(100
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,592
|
|
|
|
30,469
|
|
|
|
(1,877
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial liabilities
(*)
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds
|
|
|
2,525
|
|
|
|
2,595
|
|
|
|
(70
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts due to banks, other financial payables and liabilities
|
|
|
1,587
|
|
|
|
1,269
|
|
|
|
318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance lease liabilities
|
|
|
195
|
|
|
|
192
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,307
|
|
|
|
4,056
|
|
|
|
251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities directly associated with Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Gross financial debt
|
|
|
32,899
|
|
|
|
34,525
|
|
|
|
(1,626
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities other than investments
|
|
|
|
|
|
|
(1
|
)
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial receivables and other
non-current
financial
assets
|
|
|
(1,916
|
)
|
|
|
(2,697
|
)
|
|
|
781
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,916
|
)
|
|
|
(2,698
|
)
|
|
|
782
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities other than investments
|
|
|
(1,043
|
)
|
|
|
(1,519
|
)
|
|
|
476
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial receivables and other current financial assets
|
|
|
(463
|
)
|
|
|
(389
|
)
|
|
|
(74
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
(2,519
|
)
|
|
|
(3,964
|
)
|
|
|
1,445
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,025
|
)
|
|
|
(5,872
|
)
|
|
|
1,847
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets relating to Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total financial assets
|
|
|
(5,941
|
)
|
|
|
(8,570
|
)
|
|
|
2,629
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net financial debt carrying amount
|
|
|
26,958
|
|
|
|
25,955
|
|
|
|
1,003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reversal of fair value measurement of derivatives and related financial
assets/liabilities
|
|
|
(730
|
)
|
|
|
(836
|
)
|
|
|
106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net financial debt
|
|
|
26,228
|
|
|
|
25,119
|
|
|
|
1,109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Breakdown as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total adjusted gross financial debt
|
|
|
31,173
|
|
|
|
32,574
|
|
|
|
(1,401
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total adjusted financial assets
|
|
|
(4,945
|
)
|
|
|
(7,455
|
)
|
|
|
2,510
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) of which current portion of medium/long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds
|
|
|
2,525
|
|
|
|
2,595
|
|
|
|
(70
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts due to banks, other financial payables and liabilities
|
|
|
913
|
|
|
|
670
|
|
|
|
243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance lease liabilities
|
|
|
195
|
|
|
|
192
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The financial risk management policies of the TIM 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.
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
|
|
|
|
|
|
|
Interim Management Report at
September
30, 2017
|
|
Consolidated Financial Position and Cash Flows Performance
|
|
|
30
|
|
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 2017 resulted in a positive effect on net financial debt at
September 30, 2017 of 1,139 million euros (1,091 million euros at December 31, 2016).
Gross financial debt
Bonds
Bonds at September 30, 2017 were recognized
for 21,942 million euros (22,964 million euros at December 31, 2016). Their nominal repayment amount was 21,475 million euros, down 942 million euros compared to December 31, 2016 (22,417 million euros).
Changes in bonds over the first nine months of 2017 are shown below:
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of original currency)
|
|
Currency
|
|
|
Amount
|
|
|
Issue date
|
|
New issues
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia S.p.A. 1,000 million euros 2.500% maturing 7/19/2023
|
|
|
Euro
|
|
|
|
1,000
|
|
|
|
1/19/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of original currency)
|
|
Currency
|
|
|
Amount
|
|
|
Repayment date
|
|
Repayments
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia S.p.A. 545 million euros 7.000%
(1)
|
|
|
Euro
|
|
|
|
545
|
|
|
|
1/20/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia S.p.A. 628 million euros 4.500%
(2)
|
|
|
Euro
|
|
|
|
628
|
|
|
|
9/20/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Net of buybacks by the Company of 455
million euros during 2015.
|
(2)
|
Net of buybacks by the Company of 372 million euros during 2015.
|
With reference to the Telecom Italia
S.p.A. 2002-2022 bonds, reserved for subscription by employees of the Group, the nominal amount at September 30, 2017 was 203 million euros, up 2 million euros compared to December 31, 2016 (201 million euros).
Revolving Credit Facility and Term Loan
The following
table shows the composition and the drawdown of the committed credit lines available at September 30, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(billions of euros)
|
|
9/30/2017
|
|
|
12/31/2016
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TIM 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.
TIM also has:
|
|
a bilateral Term Loan
from UBI Banca (former Banca Regionale Europea) expiring July 2019 for 200 million euros, drawn down for the full amount;
|
|
|
|
|
|
|
|
Interim Management Report at
September
30, 2017
|
|
Consolidated Financial Position and Cash Flows Performance
|
|
|
31
|
|
|
|
two bilateral Term Loans
from Mediobanca respectively for 200 million euros expiring in November 2019 and 75 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 February 2018 for 250 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 7.65 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 4.9%.
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, 2017 of the TIM Group.
Current financial assets and liquidity margin
The TIM Groups available liquidity margin amounted to 10,562 million euros at September 30, 2017, corresponding to the sum of Cash
and cash equivalents and Current securities other than investments, totaling 3,562 million euros (5,483 million euros at December 31, 2016), 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:
Cash and cash equivalents
amounted to 2,519 million euros (3,964 million euros at December 31, 2016). The different
technical forms used for the investment of liquidity as of September 30, 2017 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 1,043 million euros (1,519 million euros at December 31, 2016): These forms of investment represent alternatives to the investment of liquidity with the aim of improving returns. They include
479 million euros of Italian treasury bonds purchased respectively by TIM S.p.A. (257 million euros) and Telecom Italia Finance S.A. (222 million euros) and 453 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, which, pursuant to Consob Communication no. 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 TIM Group since August 2012.
|
|
|
|
|
|
|
Interim Management Report at
September
30, 2017
|
|
Consolidated Financial Position and Cash Flows Performance
|
|
|
32
|
|
In the third quarter of 2017, the adjusted net financial debt increased by 1,124 million euros compared to
June 30, 2017 (25,104 million euros): resources generated by the positive operating and financial performance only partially covered the requirements arising from income tax payments and the renewal of user rights for the mobile telephone
frequencies.
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9/30/2017
(a)
|
|
|
6/30/2017
(b)
|
|
|
Change
(a-b)
|
|
Net financial debt carrying amount
|
|
|
26,958
|
|
|
|
25,728
|
|
|
|
1,230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reversal of fair value measurement of derivatives and related financial
assets/liabilities
|
|
|
(730
|
)
|
|
|
(624
|
)
|
|
|
(106
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net financial debt
|
|
|
26,228
|
|
|
|
25,104
|
|
|
|
1,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Breakdown as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total adjusted gross financial debt
|
|
|
31,173
|
|
|
|
32,002
|
|
|
|
(829
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total adjusted financial assets
|
|
|
(4,945
|
)
|
|
|
(6,898
|
)
|
|
|
1,953
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim Management Report at
September
30, 2017
|
|
Consolidated Financial Position and Cash Flows Performance
|
|
|
33
|
|
CONSOLIDATED FINANCIAL STATEMENTS TIM GROUP
TIM prepares and publishes Interim Management Reports for the first and third quarter of each year on a voluntary basis.
The Interim Management Report at September 30, 2017 of the TIM Group includes the Condensed Consolidated Financial Statements at September 30,
2017, 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, 2017 have not been audited.
The accounting policies and consolidation principles adopted in the preparation of the Condensed Consolidated Financial Statements at September 30,
2017 are the same as those adopted in the TIM Group Consolidated Financial Statements at December 31, 2016, to which reference can be made.
The TIM 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 2017 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 Management 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
There were no
significant changes in the scope of consolidation during the first nine months of 2017.
The following changes in the scope of consolidation occurred
during 2016:
|
|
TIMVISION S.r.l. (Domestic Business Unit):
established on December 28, 2016;
|
|
|
Noverca S.r.l. (Domestic Business Unit):
On October 28, 2016 TIM S.p.A. acquired 100% of the company;
|
|
|
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 were subsequently merged by
absorption.
|
|
|
|
|
|
|
|
Interim Management Report at
September
30, 2017
|
|
Consolidated Financial Statements TIM Group
|
|
|
34
|
|
Separate Consolidated Income Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd Quarter
|
|
|
3rd Quarter
|
|
|
9 months to
|
|
|
9 months to
|
|
|
Change
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
(a-b)
|
|
(millions of euros)
|
|
|
|
|
|
|
|
(a)
|
|
|
(b)
|
|
|
amount
|
|
|
%
|
|
Revenues
|
|
|
4,907
|
|
|
|
4,843
|
|
|
|
14,679
|
|
|
|
13,939
|
|
|
|
740
|
|
|
|
5.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
99
|
|
|
|
58
|
|
|
|
316
|
|
|
|
165
|
|
|
|
151
|
|
|
|
91.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating revenues and other income
|
|
|
5,006
|
|
|
|
4,901
|
|
|
|
14,995
|
|
|
|
14,104
|
|
|
|
891
|
|
|
|
6.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of goods and services
|
|
|
(2,045
|
)
|
|
|
(1,927
|
)
|
|
|
(6,181
|
)
|
|
|
(5,710
|
)
|
|
|
(471
|
)
|
|
|
(8.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee benefits expenses
|
|
|
(673
|
)
|
|
|
(752
|
)
|
|
|
(2,203
|
)
|
|
|
(2,303
|
)
|
|
|
100
|
|
|
|
4.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating expenses
|
|
|
(357
|
)
|
|
|
(256
|
)
|
|
|
(933
|
)
|
|
|
(757
|
)
|
|
|
(176
|
)
|
|
|
(23.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in inventories
|
|
|
24
|
|
|
|
32
|
|
|
|
74
|
|
|
|
65
|
|
|
|
9
|
|
|
|
13.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internally generated assets
|
|
|
144
|
|
|
|
154
|
|
|
|
461
|
|
|
|
479
|
|
|
|
(18
|
)
|
|
|
(3.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit before depreciation and amortization, capital gains (losses) and impairment
reversals (losses) on
non-current
assets (EBITDA)
|
|
|
2,099
|
|
|
|
2,152
|
|
|
|
6,213
|
|
|
|
5,878
|
|
|
|
335
|
|
|
|
5.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
(1,109
|
)
|
|
|
(1,069
|
)
|
|
|
(3,358
|
)
|
|
|
(3,116
|
)
|
|
|
(242
|
)
|
|
|
(7.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains/(losses) on disposals of
non-current
assets
|
|
|
3
|
|
|
|
1
|
|
|
|
9
|
|
|
|
14
|
|
|
|
(5
|
)
|
|
|
(35.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment reversals (losses) on
non-current
assets
|
|
|
(30
|
)
|
|
|
(3
|
)
|
|
|
(30
|
)
|
|
|
(8
|
)
|
|
|
(22
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit (loss) (EBIT)
|
|
|
963
|
|
|
|
1,081
|
|
|
|
2,834
|
|
|
|
2,768
|
|
|
|
66
|
|
|
|
2.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of profits (losses) of associates and joint ventures accounted for using the equity
method
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
(2
|
)
|
|
|
1
|
|
|
|
50.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expenses) from investments
|
|
|
1
|
|
|
|
(1
|
)
|
|
|
(18
|
)
|
|
|
6
|
|
|
|
(24
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
|
386
|
|
|
|
309
|
|
|
|
1,496
|
|
|
|
2,321
|
|
|
|
(825
|
)
|
|
|
(35.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance expenses
|
|
|
(772
|
)
|
|
|
(674
|
)
|
|
|
(2,622
|
)
|
|
|
(2,831
|
)
|
|
|
209
|
|
|
|
7.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) before tax from continuing operations
|
|
|
578
|
|
|
|
715
|
|
|
|
1,689
|
|
|
|
2,262
|
|
|
|
(573
|
)
|
|
|
(25.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
(102
|
)
|
|
|
(210
|
)
|
|
|
(559
|
)
|
|
|
(699
|
)
|
|
|
140
|
|
|
|
20.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from continuing operations
|
|
|
476
|
|
|
|
505
|
|
|
|
1,130
|
|
|
|
1,563
|
|
|
|
(433
|
)
|
|
|
(27.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47
|
|
|
|
(47
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) for the period
|
|
|
476
|
|
|
|
505
|
|
|
|
1,130
|
|
|
|
1,610
|
|
|
|
(480
|
)
|
|
|
(29.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Parent
|
|
|
437
|
|
|
|
477
|
|
|
|
1,033
|
|
|
|
1,495
|
|
|
|
(462
|
)
|
|
|
(30.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests
|
|
|
39
|
|
|
|
28
|
|
|
|
97
|
|
|
|
115
|
|
|
|
(18
|
)
|
|
|
(15.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim Management Report at
September 30, 2017
|
|
Consolidated Financial Statements - TIM 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd Quarter
|
|
|
3rd Quarter
|
|
|
9 months to
|
|
|
9 months to
|
|
(millions of euros)
|
|
|
|
|
2017
|
|
|
2016
|
|
|
9/30/2017
|
|
|
9/30/2016
|
|
Profit (loss) for the period
|
|
|
(a
|
)
|
|
|
476
|
|
|
|
505
|
|
|
|
1,130
|
|
|
|
1,610
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33
|
|
|
|
(118
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effect
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8
|
)
|
|
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b
|
)
|
|
|
|
|
|
|
|
|
|
|
25
|
|
|
|
(86
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
)
|
|
|
|
|
|
|
|
|
|
|
25
|
|
|
|
(86
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other components that subsequently will be reclassified in the Separate Consolidated Income
Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale
financial
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from fair value adjustments
|
|
|
|
|
|
|
21
|
|
|
|
11
|
|
|
|
55
|
|
|
|
87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss (profit) transferred to the Separate Consolidated Income Statements
|
|
|
|
|
|
|
(18
|
)
|
|
|
(2
|
)
|
|
|
(55
|
)
|
|
|
(71
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effect
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(e
|
)
|
|
|
3
|
|
|
|
9
|
|
|
|
2
|
|
|
|
12
|
|
Hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from fair value adjustments
|
|
|
|
|
|
|
(298
|
)
|
|
|
(231
|
)
|
|
|
(629
|
)
|
|
|
(558
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss (profit) transferred to the Separate Consolidated Income Statements
|
|
|
|
|
|
|
194
|
|
|
|
67
|
|
|
|
691
|
|
|
|
312
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effect
|
|
|
|
|
|
|
26
|
|
|
|
43
|
|
|
|
(17
|
)
|
|
|
41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(f
|
)
|
|
|
(78
|
)
|
|
|
(121
|
)
|
|
|
45
|
|
|
|
(205
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences on translating foreign operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) on translating foreign operations
|
|
|
|
|
|
|
40
|
|
|
|
(87
|
)
|
|
|
(511
|
)
|
|
|
531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss (profit) on translating foreign operations transferred to the Separate Consolidated Income
Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19
|
|
|
|
304
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effect
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(g
|
)
|
|
|
40
|
|
|
|
(87
|
)
|
|
|
(492
|
)
|
|
|
835
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
)
|
|
|
(35
|
)
|
|
|
(199
|
)
|
|
|
(445
|
)
|
|
|
642
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other components of the Consolidated Statements of Comprehensive Income
|
|
|
(k=d+i
|
)
|
|
|
(35
|
)
|
|
|
(199
|
)
|
|
|
(420
|
)
|
|
|
556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income (loss) for the period
|
|
|
(a+k
|
)
|
|
|
441
|
|
|
|
306
|
|
|
|
710
|
|
|
|
2,166
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Parent
|
|
|
|
|
|
|
388
|
|
|
|
304
|
|
|
|
755
|
|
|
|
2,030
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests
|
|
|
|
|
|
|
53
|
|
|
|
2
|
|
|
|
(45
|
)
|
|
|
136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim Management Report at
September 30, 2017
|
|
Consolidated Financial Statements - TIM Group
|
|
|
36
|
|
Consolidated Statements of Financial Position
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/2017
|
|
|
12/31/2016
|
|
|
Change
|
|
(millions of euros)
|
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(a-b)
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
|
|
|
|
29,520
|
|
|
|
29,612
|
|
|
|
(92
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets with a finite useful life
|
|
|
|
|
|
|
7,123
|
|
|
|
6,951
|
|
|
|
172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,643
|
|
|
|
36,563
|
|
|
|
80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment owned
|
|
|
|
|
|
|
13,897
|
|
|
|
13,947
|
|
|
|
(50
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets held under finance leases
|
|
|
|
|
|
|
2,369
|
|
|
|
2,413
|
|
|
|
(44
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,266
|
|
|
|
16,360
|
|
|
|
(94
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
non-current
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in associates and joint ventures accounted for using the equity method
|
|
|
|
|
|
|
17
|
|
|
|
18
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other investments
|
|
|
|
|
|
|
49
|
|
|
|
46
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
financial assets
|
|
|
|
|
|
|
1,916
|
|
|
|
2,698
|
|
|
|
(782
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Miscellaneous receivables and other
non-current
assets
|
|
|
|
|
|
|
2,418
|
|
|
|
2,222
|
|
|
|
196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax assets
|
|
|
|
|
|
|
705
|
|
|
|
877
|
|
|
|
(172
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,105
|
|
|
|
5,861
|
|
|
|
(756
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Non-current
assets
|
|
|
(a
|
)
|
|
|
58,014
|
|
|
|
58,784
|
|
|
|
(770
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
|
|
|
|
|
333
|
|
|
|
270
|
|
|
|
63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and miscellaneous receivables and other current assets
|
|
|
|
|
|
|
5,472
|
|
|
|
5,426
|
|
|
|
46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current income tax receivables
|
|
|
|
|
|
|
52
|
|
|
|
94
|
|
|
|
(42
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities other than investments, financial receivables and other current financial
assets
|
|
|
|
|
|
|
1,506
|
|
|
|
1,908
|
|
|
|
(402
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
2,519
|
|
|
|
3,964
|
|
|
|
(1,445
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,025
|
|
|
|
5,872
|
|
|
|
(1,847
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
sub-total
|
|
|
|
|
|
|
9,882
|
|
|
|
11,662
|
|
|
|
(1,780
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operations/Non-current
assets held for
sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Current assets
|
|
|
(b
|
)
|
|
|
9,882
|
|
|
|
11,662
|
|
|
|
(1,780
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
(a+b
|
)
|
|
|
67,896
|
|
|
|
70,446
|
|
|
|
(2,550
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim Management Report at
September 30, 2017
|
|
Consolidated Financial Statements - TIM Group
|
|
|
37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/2017
|
|
|
12/31/2016
|
|
|
Change
|
|
(millions of euros)
|
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(a-b)
|
|
Equity and Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity attributable to Owners of the Parent
|
|
|
|
|
|
|
21,781
|
|
|
|
21,207
|
|
|
|
574
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests
|
|
|
|
|
|
|
2,278
|
|
|
|
2,346
|
|
|
|
(68
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Equity
|
|
|
(c
|
)
|
|
|
24,059
|
|
|
|
23,553
|
|
|
|
506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
financial liabilities
|
|
|
|
|
|
|
28,592
|
|
|
|
30,469
|
|
|
|
(1,877
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee benefits
|
|
|
|
|
|
|
1,317
|
|
|
|
1,355
|
|
|
|
(38
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities
|
|
|
|
|
|
|
313
|
|
|
|
293
|
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provisions
|
|
|
|
|
|
|
833
|
|
|
|
830
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Miscellaneous payables and other
non-current
liabilities
|
|
|
|
|
|
|
1,600
|
|
|
|
1,607
|
|
|
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Non-current
liabilities
|
|
|
(d
|
)
|
|
|
32,655
|
|
|
|
34,554
|
|
|
|
(1,899
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial liabilities
|
|
|
|
|
|
|
4,307
|
|
|
|
4,056
|
|
|
|
251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and miscellaneous payables and other current liabilities
|
|
|
|
|
|
|
6,727
|
|
|
|
7,646
|
|
|
|
(919
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current income tax payables
|
|
|
|
|
|
|
148
|
|
|
|
637
|
|
|
|
(489
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
sub-total
|
|
|
|
|
|
|
11,182
|
|
|
|
12,339
|
|
|
|
(1,157
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities directly associated with Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities
|
|
|
(e
|
)
|
|
|
11,182
|
|
|
|
12,339
|
|
|
|
(1,157
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
(f=d+e
|
)
|
|
|
43,837
|
|
|
|
46,893
|
|
|
|
(3,056
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Equity and Liabilities
|
|
|
(c+f
|
)
|
|
|
67,896
|
|
|
|
70,446
|
|
|
|
(2,550
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim Management Report at
September 30, 2017
|
|
Consolidated Financial Statements - TIM Group
|
|
|
38
|
|
Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9 months to
|
|
|
9 months to
|
|
(millions of euros)
|
|
|
|
|
9/30/2017
|
|
|
9/30/2016
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from continuing operations
|
|
|
|
|
|
|
1,130
|
|
|
|
1,563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
3,358
|
|
|
|
3,116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment losses (reversals) on
non-current
assets
(including investments)
|
|
|
|
|
|
|
40
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in deferred tax assets and liabilities
|
|
|
|
|
|
|
178
|
|
|
|
459
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses (gains) realized on disposals of
non-current
assets
(including investments)
|
|
|
|
|
|
|
(10
|
)
|
|
|
(15
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of profits (losses) of associates and joint ventures accounted for using the equity
method
|
|
|
|
|
|
|
1
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in employee benefits
|
|
|
|
|
|
|
(34
|
)
|
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in inventories
|
|
|
|
|
|
|
(64
|
)
|
|
|
(71
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in trade receivables and net amounts due from customers on construction contracts
|
|
|
|
|
|
|
9
|
|
|
|
(31
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in trade payables
|
|
|
|
|
|
|
(829
|
)
|
|
|
(65
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in current income tax receivables/payables
|
|
|
|
|
|
|
(445
|
)
|
|
|
85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in miscellaneous receivables/payables and other assets/liabilities
|
|
|
|
|
|
|
(85
|
)
|
|
|
(774
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from (used in) operating activities
|
|
|
(a
|
)
|
|
|
3,249
|
|
|
|
4,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of intangible assets
|
|
|
|
|
|
|
(1,635
|
)
|
|
|
(1,125
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of tangible assets
|
|
|
|
|
|
|
(2,291
|
)
|
|
|
(2,160
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total purchase of intangible and tangible assets on an accrual basis
|
|
|
|
|
|
|
(3,926
|
)
|
|
|
(3,285
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in amounts due for purchases of intangible and tangible assets
|
|
|
|
|
|
|
(125
|
)
|
|
|
(180
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total purchase of intangible and tangible assets on a cash basis
|
|
|
|
|
|
|
(4,051
|
)
|
|
|
(3,465
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of control in subsidiaries or other businesses, net of cash acquired
|
|
|
|
|
|
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions/disposals of other investments
|
|
|
|
|
|
|
(1
|
)
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in financial receivables and other financial assets
|
|
|
|
|
|
|
1,159
|
|
|
|
(96
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
26
|
|
|
|
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from (used in) investing activities
|
|
|
(b
|
)
|
|
|
(2,867
|
)
|
|
|
(3,047
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in current financial liabilities and other
|
|
|
|
|
|
|
(895
|
)
|
|
|
(140
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from
non-current
financial liabilities (including
current portion)
|
|
|
|
|
|
|
1,365
|
|
|
|
3,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayments of
non-current
financial liabilities (including
current portion)
|
|
|
|
|
|
|
(2,072
|
)
|
|
|
(3,267
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital proceeds/reimbursements (including subsidiaries)
|
|
|
|
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid
|
|
|
|
|
|
|
(219
|
)
|
|
|
(227
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from (used in) financing activities
|
|
|
(c
|
)
|
|
|
(1,805
|
)
|
|
|
(321
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from (used in) Discontinued
operations/Non-current
assets held for sale
|
|
|
(d
|
)
|
|
|
|
|
|
|
(45
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate cash flows
|
|
|
(e=a+b+c+d
|
)
|
|
|
(1,423
|
)
|
|
|
877
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash and cash equivalents at beginning of the period
|
|
|
(f
|
)
|
|
|
3,952
|
|
|
|
3,216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net foreign exchange differences on net cash and cash equivalents
|
|
|
(g
|
)
|
|
|
(99
|
)
|
|
|
182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash and cash equivalents at end of the period
|
|
|
(h=e+f+g
|
)
|
|
|
2,430
|
|
|
|
4,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim Management Report at
September
30, 2017
|
|
Consolidated Financial Statements - TIM Group
|
|
|
39
|
|
Additional Cash Flow Information
|
|
|
|
|
|
|
|
|
|
|
9 months to
|
|
|
9 months to
|
|
(millions of euros)
|
|
9/30/2017
|
|
|
9/30/2016
|
|
Income taxes (paid) received
|
|
|
(804
|
)
|
|
|
(117
|
)
|
|
|
|
|
|
|
|
|
|
Interest expense paid
|
|
|
(1,514
|
)
|
|
|
(1,701
|
)
|
|
|
|
|
|
|
|
|
|
Interest income received
|
|
|
534
|
|
|
|
624
|
|
|
|
|
|
|
|
|
|
|
Dividends received
|
|
|
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
Analysis of Net Cash and Cash Equivalents
|
|
|
|
|
|
|
|
|
|
|
9 months to
|
|
|
9 months to
|
|
(millions of euros)
|
|
9/30/2017
|
|
|
9/30/2016
|
|
Net cash and cash equivalents at beginning of the period
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - from continuing operations
|
|
|
3,964
|
|
|
|
3,559
|
|
|
|
|
|
|
|
|
|
|
Bank overdrafts repayable on demand from continuing operations
|
|
|
(12
|
)
|
|
|
(441
|
)
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - from Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
98
|
|
|
|
|
|
|
|
|
|
|
Bank overdrafts repayable on demand from Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,952
|
|
|
|
3,216
|
|
|
|
|
|
|
|
|
|
|
Net cash and cash equivalents at end of the period
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - from continuing operations
|
|
|
2,519
|
|
|
|
4,275
|
|
|
|
|
|
|
|
|
|
|
Bank overdrafts repayable on demand from continuing operations
|
|
|
(89
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - from Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank overdrafts repayable on demand from Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,430
|
|
|
|
4,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim Management Report at
September
30, 2017
|
|
Consolidated Financial Statements - TIM Group
|
|
|
40
|
|
OTHER
INFORMATION
Average salaried workforce
|
|
|
|
|
|
|
|
|
|
|
|
|
(equivalent number)
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
|
Change
|
|
Average salaried workforce Italy
|
|
|
45,807
|
|
|
|
47,344
|
|
|
|
(1,537
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average salaried workforce Outside Italy
|
|
|
9,310
|
|
|
|
11,054
|
|
|
|
(1,744
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total average salaried workforce
(1)
|
|
|
55,117
|
|
|
|
58,398
|
|
|
|
(3,281
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operations/Non-current
assets held for sale -
Sofora - Telecom Argentina group
|
|
|
|
|
|
|
3,441
|
|
|
|
(3,441
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total average salaried workforce - including Discontinued
operations/Non-current
assets held for sale
|
|
|
55,117
|
|
|
|
61,839
|
|
|
|
(6,722
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1)
|
Includes employees with temp work contracts: 2 average employees in the first nine months of 2017 (1 in Italy and 1 outside Italy). In the first nine months of 2016, it included 4 average employees (2 in Italy and 2
outside Italy).
|
Headcount at period end
|
|
|
|
|
|
|
|
|
|
|
|
|
(number)
|
|
9/30/2017
|
|
|
12/31/2016
|
|
|
Change
|
|
Headcount Italy
|
|
|
50,337
|
|
|
|
51,125
|
|
|
|
(788
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Headcount Outside Italy
|
|
|
9,624
|
|
|
|
10,104
|
|
|
|
(480
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total headcount at period end
(1)
|
|
|
59,961
|
|
|
|
61,229
|
|
|
|
(1,268
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1)
|
Includes employees with temp work contracts: 0 at 9/30/2017 and 4 at 12/31/2016.
|
Headcount at period end
Breakdown by Business Unit
|
|
|
|
|
|
|
|
|
|
|
|
|
(number)
|
|
9/30/2017
|
|
|
12/31/2016
|
|
|
Change
|
|
Domestic
|
|
|
50,488
|
|
|
|
51,280
|
|
|
|
(792
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brazil
|
|
|
9,393
|
|
|
|
9,849
|
|
|
|
(456
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Operations
|
|
|
80
|
|
|
|
100
|
|
|
|
(20
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
59,961
|
|
|
|
61,229
|
|
|
|
(1,268
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim Management Report at
September 30, 2017
|
|
Consolidated Financial Statements - TIM Group
|
|
|
41
|
|
Like for Like
Reconstruction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED REVENUES
|
|
|
|
2016
|
|
|
2017
|
|
|
Change % YoY
|
|
(millions of euros)
|
|
1Q16
|
|
|
2Q16
|
|
|
3Q16
|
|
|
1Q17
|
|
|
2Q17
|
|
|
3Q17
|
|
|
1Q
|
|
|
2Q
|
|
|
3Q
|
|
1. REPORTED
|
|
|
4,440
|
|
|
|
4,656
|
|
|
|
4,843
|
|
|
|
4,819
|
|
|
|
4,953
|
|
|
|
4,907
|
|
|
|
+8.5
|
%
|
|
|
+6.4
|
%
|
|
|
+1.3
|
%
|
Foreign currency financial statement translation effect
|
|
|
258
|
|
|
|
119
|
|
|
|
-23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2. ORGANIC excluding non recurring component
|
|
|
4,698
|
|
|
|
4,775
|
|
|
|
4,820
|
|
|
|
4,819
|
|
|
|
4,953
|
|
|
|
4,907
|
|
|
|
+2.6
|
%
|
|
|
+3.7
|
%
|
|
|
+1.8
|
%
|
- Non Linear Items
|
|
|
0
|
|
|
|
26
|
|
|
|
128
|
|
|
|
61
|
|
|
|
63
|
|
|
|
31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3. ORGANIC
LIKE for LIKE
|
|
|
4,698
|
|
|
|
4,749
|
|
|
|
4,692
|
|
|
|
4,758
|
|
|
|
4,890
|
|
|
|
4,876
|
|
|
|
+1.3
|
%
|
|
|
+3.0
|
%
|
|
|
+3.9
|
%
|
|
|
|
|
|
CONSOLIDATED EBITDA
|
|
|
|
2016
|
|
|
2017
|
|
|
Change % YoY
|
|
(millions of euros)
|
|
1Q16
|
|
|
2Q16
|
|
|
3Q16
|
|
|
1Q17
|
|
|
2Q17
|
|
|
3Q17
|
|
|
1Q
|
|
|
2Q
|
|
|
3Q
|
|
1. REPORTED
|
|
|
1,712
|
|
|
|
2,014
|
|
|
|
2,152
|
|
|
|
1,990
|
|
|
|
2,124
|
|
|
|
2,099
|
|
|
|
+16.2
|
%
|
|
|
+5.5
|
%
|
|
|
-2.5
|
%
|
Foreign currency financial statement translation effect and non recurring items
|
|
|
151
|
|
|
|
55
|
|
|
|
58
|
|
|
|
24
|
|
|
|
71
|
|
|
|
127
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2. ORGANIC excluding non recurring component
|
|
|
1,863
|
|
|
|
2,069
|
|
|
|
2,210
|
|
|
|
2,014
|
|
|
|
2,195
|
|
|
|
2,226
|
|
|
|
+8.1
|
%
|
|
|
+6.1
|
%
|
|
|
+0.7
|
%
|
- Non Linear Items
|
|
|
0
|
|
|
|
108
|
|
|
|
124
|
|
|
|
58
|
|
|
|
91
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3. ORGANIC
LIKE for LIKE
|
|
|
1,863
|
|
|
|
1,961
|
|
|
|
2,086
|
|
|
|
1,956
|
|
|
|
2,104
|
|
|
|
2,221
|
|
|
|
+5.0
|
%
|
|
|
+7.3
|
%
|
|
|
+6.5
|
%
|
|
|
|
|
|
DOMESTIC REVENUES
|
|
|
|
2016
|
|
|
2017
|
|
|
Change % YoY
|
|
(millions of euros)
|
|
1Q16
|
|
|
2Q16
|
|
|
3Q16
|
|
|
1Q17
|
|
|
2Q17
|
|
|
3Q17
|
|
|
1Q
|
|
|
2Q
|
|
|
3Q
|
|
1. REPORTED
|
|
|
3,548
|
|
|
|
3,699
|
|
|
|
3,789
|
|
|
|
3,647
|
|
|
|
3,847
|
|
|
|
3,818
|
|
|
|
+2.8
|
%
|
|
|
+4.0
|
%
|
|
|
+0.8
|
%
|
Foreign currency financial statement translation effect
|
|
|
3
|
|
|
|
2
|
|
|
|
-4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2. ORGANIC excluding non recurring component
|
|
|
3,551
|
|
|
|
3,701
|
|
|
|
3,785
|
|
|
|
3,647
|
|
|
|
3,847
|
|
|
|
3,818
|
|
|
|
+2.7
|
%
|
|
|
+3.9
|
%
|
|
|
+0.9
|
%
|
- Non Linear Items
|
|
|
0
|
|
|
|
26
|
|
|
|
128
|
|
|
|
61
|
|
|
|
63
|
|
|
|
31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3. ORGANIC
LIKE for LIKE
|
|
|
3,551
|
|
|
|
3,675
|
|
|
|
3,657
|
|
|
|
3,586
|
|
|
|
3,784
|
|
|
|
3,787
|
|
|
|
+1.0
|
%
|
|
|
+3.0
|
%
|
|
|
+3.6
|
%
|
|
|
|
|
|
DOMESTIC SERVICES REVENUES
|
|
|
|
2016
|
|
|
2017
|
|
|
Change % YoY
|
|
(millions of euros)
|
|
1Q16
|
|
|
2Q16
|
|
|
3Q16
|
|
|
1Q17
|
|
|
2Q17
|
|
|
3Q17
|
|
|
1Q
|
|
|
2Q
|
|
|
3Q
|
|
1. REPORTED
|
|
|
3,352
|
|
|
|
3,468
|
|
|
|
3,526
|
|
|
|
3,342
|
|
|
|
3,500
|
|
|
|
3,551
|
|
|
|
-0.3
|
%
|
|
|
+0.9
|
%
|
|
|
+0.7
|
%
|
Foreign currency financial statement translation effect
|
|
|
3
|
|
|
|
2
|
|
|
|
-4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2. ORGANIC excluding non recurring component
|
|
|
3,355
|
|
|
|
3,470
|
|
|
|
3,522
|
|
|
|
3,342
|
|
|
|
3,500
|
|
|
|
3,551
|
|
|
|
-0.4
|
%
|
|
|
+0.8
|
%
|
|
|
+0.8
|
%
|
- Non Linear Items
|
|
|
0
|
|
|
|
26
|
|
|
|
27
|
|
|
|
0
|
|
|
|
0
|
|
|
|
-18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3. ORGANIC
LIKE for LIKE
|
|
|
3,355
|
|
|
|
3,444
|
|
|
|
3,494
|
|
|
|
3,342
|
|
|
|
3,500
|
|
|
|
3,569
|
|
|
|
-0.4
|
%
|
|
|
+1.6
|
%
|
|
|
+2.2
|
%
|
|
|
|
|
|
EBITDA DOMESTIC
|
|
|
|
2016
|
|
|
2017
|
|
|
Change % YoY
|
|
(millions of euros)
|
|
1Q16
|
|
|
2Q16
|
|
|
3Q16
|
|
|
1Q17
|
|
|
2Q17
|
|
|
3Q17
|
|
|
1Q
|
|
|
2Q
|
|
|
3Q
|
|
1. REPORTED
|
|
|
1,461
|
|
|
|
1,723
|
|
|
|
1,811
|
|
|
|
1,621
|
|
|
|
1,740
|
|
|
|
1,694
|
|
|
|
+11.0
|
%
|
|
|
+1.0
|
%
|
|
|
-6.5
|
%
|
Foreign currency financial statement translation effect and non recurring items
|
|
|
68
|
|
|
|
17
|
|
|
|
54
|
|
|
|
24
|
|
|
|
71
|
|
|
|
126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2. ORGANIC excluding non recurring component
|
|
|
1,529
|
|
|
|
1,740
|
|
|
|
1,865
|
|
|
|
1,645
|
|
|
|
1,811
|
|
|
|
1,820
|
|
|
|
+7.6
|
%
|
|
|
+4.1
|
%
|
|
|
-2.4
|
%
|
- Non Linear Items
|
|
|
0
|
|
|
|
108
|
|
|
|
124
|
|
|
|
58
|
|
|
|
91
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3. ORGANIC
LIKE for LIKE
|
|
|
1,529
|
|
|
|
1,632
|
|
|
|
1,741
|
|
|
|
1,587
|
|
|
|
1,720
|
|
|
|
1,815
|
|
|
|
+3.8
|
%
|
|
|
+5.4
|
%
|
|
|
+4.3
|
%
|
|
|
|
|
|
|
|
Interim Management Report at
September
30, 2017
|
|
Consolidated Financial Statements - TIM Group
|
|
|
42
|
|
EVENTS SUBSEQUENT TO SEPTEMBER 30, 2017
For details of subsequent events, see the Note Events Subsequent to September 30, 2017 in the TIM Group Condensed Consolidated Financial
Statements.
BUSINESS OUTLOOK FOR THE YEAR 2017
As envisaged in the 20172019 Plan, TIM will continue the process of profound transformation of the Company. This process consists of firm financial
discipline in support of development, aimed at creating more room for investments for new networks and platforms (Fiber and mobile UltraBroadband and Cloud-based services) and eliminating less strategic cash costs, in addition to maximizing return
on investment. The objective is to ensure structural growth in revenue and EBITDA and consolidate TIMs position as the market leader in terms of technology, network quality and service excellence in the Fixed-line and Mobile segments.
The key elements of this approach are innovation, convergence, exclusive content and closeness to the Customer. In the Domestic Fixed segment, TIM expects to
cut the reduction in the number of clients with zero line losses by 2018 through the faster spread and subsequent adoption of fiber optic networks. The commercial strategy will also play a crucial role, with a focus on retaining and
increasing the customer base through measures including the offering of Smart Home devices and appliances connected to the home network and charged directly in phone bills. Within the Domestic Mobile segment, where the competitive landscape is
becoming increasingly polarized and segmented, TIM will leverage the reach of its 4G network (expected population coverage of over 99% in 2019) and the diffusion of convergent services and quality content, particularly in the
high-end
market where data usage continues to increase. Kena, the second
no-frills
brand (launched in April), will also allow the Company to compete in the more
price-sensitive segments.
Several major shifts have also occurred, including the changes in the market environment, with the initiation of the Anti-Trust
Authoritys proceedings regarding the ultrabroadband and fiber optic network development projects, and the revision of the business strategies for the content component. These risk factors could have an impact on aspects such as the
ultrabroadband development plans and the evolution model adopted in the multimedia market.
Lastly, operations will be characterized by greater
selectivity and priority in investment choices and efficiency recovery measures through structural cost optimization programs.
As a result of the
transformation and streamlining of the organization and processes, combined with commercial expansion and expected growth in revenue also in light of the performance outlook for the domestic market, the impacts from the new tariff model for
roaming services, and several
non-recurring
business dynamics in the second half of 2016 (resulting in a not fully
like-for-like
comparison with the second half of 2017) management is able to confirm the guidance in organic terms announced for the full year 2017 and for the period of the Plan (organic growth in EBITDA (low single digit) and cash flow generation
necessary to reduce the adjusted net financial debt to reported EBITDA ratio, which is expected to be below 2.7x in 2018).
In Brazil, the Plan provides
for the continued turnaround of Tim Brasil through its
re-positioning
based on network and product quality, enabling the company to maintain its leadership in the prepaid segment and successfully compete in
the postpaid segment. The Cost Containment Plan initiated in 2016 has also been continued and strengthened and will enable the achievement of solid profit and cash flow generation. More specifically, further impetus will be given to the construction
of the UBB Mobile infrastructure upon completion of the Plan, the 4G network will reach 95% of the population with coverage of about 3,600 cities and the development of convergent offers, also through agreements with major premium
content providers.
|
|
|
|
|
|
|
Interim Management Report at
September
30, 2017
|
|
Business outlook for 2017
|
|
|
43
|
|
MAIN RISKS AND UNCERTAINTIES
Risk governance is a strategic tool for value creation. The TIM 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 across the Group companies, highlighting potential synergies among 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 business outlook for 2017 could be affected in the second half of the year by risks and uncertainties caused by
a multitude of factors, the majority of which are beyond the Groups control.
In addition, there have been several major shifts, including the
change in the market environment, with the start of proceedings by the Anti-Trust Authority on the ultrabroadband and fiber optic network development projects, and the possible revision of the business strategies for the content component. These
risk factors may have repercussions which are currently unforeseeable in terms of the strategic choices adopted by the company and could have an impact, for example, on the ultrabroadband development plans and on the evolution model
adopted in the multimedia market.
The main risks affecting the business activities of the TIM Group, which may impact, even significantly, the ability to
achieve the objectives of the Group are presented below.
STRATEGIC RISKS
Risks related to macroeconomic factors
The TIM 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. After years of crisis,
the global economic recovery seems to have gained momentum. In Italy, the economic recovery also appears to be strengthening. The year 2016 ended with growth of around 1% (a low figure when compared to the average of the EMU countries) and the
forecast for 2017 is for higher growth (+1.5% according to the latest estimates issued by the Italian government). Consumption is starting to pick up again, after a slowdown in the second half of 2016, despite the erosion of purchasing power due to
the return to inflation. Confidence has significantly improved among consumers and businesses. The Italian macroeconomic scenario is essentially favorable, but the countrys position is still frail. In the labor market, unemployment is still
high, despite the fall in the second quarter of 2017, with consequent possible repercussions on income available for consumption.
On the Brazilian
market, the expected results may be significantly affected by the macroeconomic and political situation. After eight quarters of GDP decline, marking the deepest and most profound crisis in its history, Brazil returned to growth in the first quarter
of 2017 (+1%) and the figures for the second quarter have continued this positive trend. 2017 should close with a growth rate of 0.7%. The inflation rate continues to fall (3.2% forecast for 2017 from 9.4% in 2016) and is in line with the central
banks targets (+4.5% +/- 1.5 percentage points). Household consumption has started to pick up again, benefiting from increased purchasing power due to lower inflation and the initial improvements in the labor market. However, these positive
figures are also accompanied by continued political instability and a difficult employment situation (with just under 14 million unemployed and an unemployment rate of around 13% in the second quarter of 2017).
Risks related to competition
The telecommunications market is characterized by strong competition that may reduce market share in the geographical areas where the TIM Group is engaged as
well as erode prices and margins. Competition is focused, on one hand, on innovative products and services and, on the other hand, on
|
|
|
|
|
|
|
Interim Management Report at
September
30, 2017
|
|
Main risks and uncertainties
|
|
|
44
|
|
the price of traditional services. In the area of infrastructure competition, the growth of alternative operators could represent a threat for TIM, particularly in the years of the Plan after
2017 and also beyond the Plan period.
In the mobile market, Iliad S.A. is about to launch a new mobile operator in Italy with the aim of acquiring
10-15%
of the market, as per its own announcements, by adopting the strategies it has already used for the French market. For its part, TIM has launched a new operator with its own independent systems and features.
In addition, Enel Open Fiber and Infratel have announced their plans for the development of an ultrabroadband telecommunications network as an
alternative to the TIM network, respectively in the major Italian cities and the market failure areas.
In the Brazilian market, the
competitive risk consists of both a deterioration of the business model tied to traditional services, which have not been replaced by innovative services, and the rationalization of consumption by customers as a result of a contraction of their
purchasing power, also through the shift towards new flat deals. 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, and by a slowdown in their replacement with postpaid customers.
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.
Risks related to business
continuity
The TIM Groups success depends
heavily on the ability to ensure continuous and uninterrupted delivery of the products and services we provide through the availability of processes and the relating supporting assets. In particular, the Network Infrastructure and the Information
Systems are sensitive to various internal and external threats: power outage, floods, storms, human errors, system failures, hardware and software failures, software bugs, cyber attacks, earthquakes, facility failures, strikes, fraud, vandalism,
terrorism, etc.. Each of these events could lead to an interruption in the supply of services/products and potentially affect our business both directly and indirectly: reduction in revenues and/or increased costs for recovery and for penalties and
fines, decrease in customer satisfaction, and negative impact on reputation.
Risks related to the development of fixed and mobile networks
To maintain and expand our customer portfolio in each
of the markets in which we operate, 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 this regard, the TIM Group may participate in tenders for broadcasting frequencies;
|
|
|
increase the geographical coverage of innovative services;
|
|
|
upgrade the structure of the systems and the networks to adapt it to new technologies;
|
|
|
sustaining the necessary level of capital expenditure in the long term.
|
Risks of internal/external fraud
The TIM 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.
|
|
|
|
|
|
|
Interim Management Report at
September
30, 2017
|
|
Main risks and uncertainties
|
|
|
45
|
|
Risks related to disputes and litigation
The TIM 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 TIM 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 TIM Group companies. These risks may adversely impact the earnings and the financial
structure of the Group. Accordingly, to manage those risks, the TIM 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 TIM 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.
On June 23, 2016, a referendum was
held in the United Kingdom, commonly referred to as Brexit, in which voters approved the UKs exit from the European Union. The potential impact of Brexit will depend in part on the outcome of the negotiations on tariffs, trade,
regulations and other matters, which started in the second half of June 2017. The result of the referendum had an adverse effect on the global markets and also produced a sharp decline in the pound against the dollar and the euro. Brexit and the
possible changes during the exit negotiations could create further instability in the global financial markets and uncertainty about the laws and regulations of the European Union that the United Kingdom may decide to replace with national laws and
regulations. The potential effects of Brexit could adversely affect our financial conditions, our business and the related earnings and cash flows.
REGULATORY AND COMPLIANCE RISKS
Regulatory risks
The telecommunications industry is highly regulated. In this context, new decisions by the Communications Authority (AGCom) may lead to changes in the
regulatory framework that may affect the expected results of the Group. More specifically, the main elements that introduce uncertainty are:
|
|
lack of predictability in
start-up
timing and consequent new process decisions;
|
|
|
decisions with retroactive effect (for example, price revisions for previous years as a result of judgments issued by the Administrative Courts);
|
|
|
decisions that can influence the technological choices made and to be made, with potential impact on the timing of return on infrastructure investment.
|
Implementation has been completed of the New Equivalence Model (NEM), launched by TIM in 2015, aimed at further improving the effectiveness of guarantees for
equal treatment between own business divisions and competitors that buy wholesale services. The NEM and the related implementation roadmap were approved by the Board of Directors of TIM on November 5, 2015. The Italian Antitrust Authority
(AGCM) and the AGCom positively evaluated the effectiveness of the NEM and decided, respectively, to close the
non-compliance
proceedings A428C, acknowledging that TIM has complied with the earlier A428
decision, and to discontinue the ongoing penalty proceedings.
|
|
|
|
|
|
|
Interim Management Report at
September
30, 2017
|
|
Main risks and uncertainties
|
|
|
46
|
|
Compliance risks
The TIM 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 TIM Group aims to ensure that processes, and, therefore,
the procedures and systems governing them, and corporate conduct comply with legal requirements. The risk is associated with potential time lags in making the processes compliant with regulatory changes or whenever
non-conformities
are identified.
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Interim Management Report at
September
30, 2017
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Main risks and uncertainties
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47
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MAIN CHANGES IN THE REGULATORY FRAMEWORK
DOMESTIC
Wholesale fixed-line markets
Wholesale access services
At the end of the proceeding initiated through resolution 623/15/CONS, in December 2016, AGCM and AGCom approved TIMs New Equivalence Model (NEM) aimed
at structurally improving the effectiveness of the equal treatment in the supply of wholesale
access services provided to its competitors and its commercial divisions. AGCom also established that the NEM must be implemented by December 2017
and set up a technical working group to monitor the process.
In the same resolution 623/15/CONS, AGCom asked TIM to submit two alternative proposals
(unbundling and outsourcing models) regarding greater autonomy for the other licensed operators in the provision of
delivery and assurance
for the local loop unbundling (LLU)
and
sub-loop
unbundling (SLU). On August 23, 2017, in its Resolution 321/17/CONS, AGCom approved an unbundling model that provides greater transparency and flexibility in the operational processes for the above-mentioned provisioning
and
assurance,
giving the other licensed operators the possibility of choosing between TIM and external companies, selected by TIM, while still fully meeting the requirements of integrity, functional operation and security of the network.
Infratel Tenders for the subsidizing of the Ultra Broadband networks
In March 2017, Infratel Italia awarded the company Open Fiber (OF) the five lots of the tender for the construction and operation of networks enabling the
offering of Ultra Broadband services (from 30 to 100 Mbit/s) in the
so-called
White Areas (in which the private operators had not envisaged the independent construction of Ultra Broadband
infrastructure in the next three years) of the municipalities of six Italian regions (Abruzzo, Molise, Emilia Romagna, Lombardy, Tuscany and Veneto).
On March 20, 2017, the Lazio Regional Administrative Court rejected the appeal filed by TIM concerning the tender and, consequently, TIM lodged an appeal
on June 20, 2017 with the
Consiglio di Stato
.
In July 2017, OF was awarded the six lots of the second Infratel tender, for the white areas of
10 regions (Piedmont, Valle d Aosta, Liguria, Friuli Venezia Giulia, Marche, Umbria, Lazio, Campania, Basilicata and Sicily) and the autonomous province of Trento. TIM has also appealed against the result of this second tender call.
On October 2, 2017, Infratel started a public consultation on the capital expenditure programs of the private operators in the white areas of the regions
of Calabria, Apulia and Sardinia, with a view to publishing the third and final direct tender call for the ultrabroadband coverage in the white areas of these regions.
Retail fixed-line markets
28-day
invoicing
On September 26, 2017, AGCom initiated penalty proceedings against TIM, Wind Tre, Vodafone and Fastweb. According to AGCom, the operators did not comply
with the provisions of Resolution 121/17/CONS of March 2017, which set the minimum period for the subscription and billing cycle for fixed or convergent retail telephony offers at 30 days (fixed-line and mobile services). From 2016, these operators
had in fact reduced the subscription and billing period for fixed-line offers from the previous term of 1 month to 28 days (TIM had introduced the amendment from April 2017 for consumer customers and from May 2017 for business customers).
In May 2017, TIM appealed against Resolution 121/17/CONS at the Lazio Regional Administrative Court. The industry-sector association ASSTEL has also submitted
an appeal against the measure by the Authority. These proceedings are still underway and the ruling is expected between March and April 2018.
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Main changes in the regulatory framework
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48
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In October 2017, the Government announced a legislative measure that will impose a
30-day
billing obligation on the operators. The Government has not yet established the timing of the approval and the types of services (e.g. fixed-line only, fixed-line consumer only, inclusion of mobile
services, etc.) covered by this measure, which may also extend AGComs supervisory and disciplinary powers.
Universal Service
Through Resolution 46/17/CONS of January 26, 2017, AGCom introduced new measures regarding the subsidized financial conditions for access to fixed and
mobile services for particular categories of disabled customers. The provisions of the measure, which apply to the deaf and the totally and partially blind, broaden the current subsidies, both in terms of discounted services (e.g. flat voice and
data offers) and categories of disabled people covered (e.g. the partially blind).
In February 2017, TIM submitted an appeal to the Lazio Regional
Administrative Court against Resolution 456/16/CONS of October 2016, through which AGCom rejected TIMs proposal for a price adjustment on the Voice offering (the basic voice telephony offering), and introduced a strict procedure
for future changes of Universal Service prices, by providing, for example, a minimum time interval of a year between two successive tariff changes and the possibility to only change prices with reference to: (i) increase in
wholesale
costs; (ii) offsetting inflation; (iii) socio-economic conditions. The first hearing has been set for November 22, 2017.
Through
Resolution 163/17/CONS of April 18, 2017, AGCom imposed a fine of 232,000 euros on TIM for the failure to achieve 4 quality objectives of 2015.
For
information on the pending disputes relating to the remuneration of the net costs of the Universal Service incurred by TIM in the years 1999-2003, excluding 2002, see the Note Contingent liabilities, other information, commitments and
guarantees of the Consolidated financial statements of the TIM Group at December 31, 2016.
As a result of the ruling no. 4616/2015 of
October 2, 2015, in which the
Consiglio di Stato
canceled resolution 1/08/CIR solely with respect to the application of the new methodological criteria for the calculation of the net cost of the universal service (USO) for the period
2004-2007, AGCom initiated the renewal proceedings for those annual periods and appointed an independent consultant to revise the calculation of the USO, through resolution no. 145/17/CONS for the years 2006 and 2007 and through resolution no.
207/17/CONS for the years 2004 and 2005.
Wholesale mobile network markets
International roaming
On June 15, 2017, the provision of European Regulation 2015/2120 of November 25, 2015 (Telecom Single MarketTSM Regulation) entered
into force, which requires for the application of the national tariff for
intra-EU
voice, SMS and roaming data traffic.
On April 25, 2017, the European Parliament and the Council adopted a regulation establishing new wholesale caps for roaming traffic valid from
June 15, 2017 to June 30, 2022 (Voice: 3.2 euro cents per minute; SMS 1 euro cents per SMS, data: 7.7 euro/GByte in 2017; 6 euro/GByte in 2018; 4.5 euro/GByte in 2019; 3.5 euro/GByte in 2020; 3 euro/GByte in 2021; and 2.5 euro/GByte in
2022).
AGCom contribution fee
On March 31,
2017, TIM paid an amount of 19.3 million euros, with reservation, for the 2017 AGCom contribution fee. The value was calculated by applying the rate of 0.0014 to the revenues recorded in the Companys 2015 Financial Statements. The
guidelines for the calculation of the contribution fee, set out in the AGCom Resolutions 463/16/CONS and 62/17/CONS, have not changed with respect to those established for the calculation of the 2016 contribution fee.
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Interim Management Report at
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Main changes in the regulatory framework
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49
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Antitrust
For information on the pending legal disputes,
relating to the AGCM proceedings A428 and I761 see the Note Contingent liabilities, other information of the Condensed Consolidated Financial Statements of the TIM Group at September 30, 2017.
Case A500B
In April 2017, the AGCM extended to Telecom
Italia Sparkle the case A500B, opened against TIM and regarding the possible improper conduct in the market consisting in bulk SMS messaging services. AGCM is required to make a final decision by December 31, 2017.
Case I799
In February 2017, AGCM initiated
investigation proceedings for possible violation of Article 101 TFEU (ban on competition-restricting agreements) against TIM S.p.A. and Fastweb S.p.A., following the signing of an agreement aimed at establishing a joint cooperative enterprise Flash
Fiber S.r.l.. In agreement with Fastweb, TIM has submitted several amendments to the agreements signed to the AGCM, in the form of proposed commitments, aimed at settling the proceedings without accepting the violation and, therefore, without any
financial penalty. The end of the proceedings has been set at December 31, 2017.
Case A514
On June 28, 2017, AGCM initiated proceedings against TIM for possible breaches of Article 102 TFEU following complaints made by Infratel, Enel, Open
Fiber, Vodafone and
Wind-Tre.
The deadline for the conclusion of the proceedings has been set at October 31, 2018. For more details see the description provided in the Note Contingent liabilities,
other information of the Condensed Consolidated Financial Statements at September 30, 2017 of the TIM Group.
Disputes with AGCom
On August 9, 2017, AGCom provided notification of
Resolution 88/17/CIR in which it had ruled on the dispute initiated on August 2, 2016 by TIM against Enel Distribuzione (ED) regarding the conditions of access to EDs infrastructure. AGCom recognized the validity of most of
the objections raised by TIM and ordered the amendment of the Technical and Financial Rules for access to the electricity infrastructure of ED.
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Interim Management Report at
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Main changes in the regulatory framework
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50
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BRAZIL
700 MHz and Analog TV switch off
In September 2014, TIM won the tender for the award of the 700MHz (4G/LTE) band frequencies, for a price of 1.7 billion reais, and with additional
commitments of 1.2 billion reais (in four annual installments, adjusted for inflation) as a contribution to the consortium established by the tender (EAD) for all the operators (TIM, Algar, Claro and Vivo) awarded the contract for
managing the freeing up of the 700MHz band through the switch off of analog TV, the redistribution of channels and the reduction of interference.
To that
end, the first payment (370 million reais) was made in April 2015 and the subsequent two payments (for a total of 860 million reais) were both made in January 2017, whereas the final installment (142 million reais) will be paid in
January 2018.
Since 2016, over 2,500 towns have freed up the 700 Mhz LTE spectrum. In November, Goiânia will become the last of the 21 capitals to
make it available for activation during the current year. In addition, the plan envisages the switch off by the end of November 2017 in the cities of Rio de Janeiro and Belo Horizonte and in January 2018 in the cities of Porto Alegre,
Florianópolis and Curitiba.
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Interim Management Report at
September
30, 2017
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Main changes in the regulatory framework
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51
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CORPORATE BOARDS AT SEPTEMBER 30, 2017
BOARD OF DIRECTORS
The ordinary
shareholders meeting of the Company, held on May 4, 2017, appointed the new Board of Directors, setting its number of members at 15 and its term of office at three years (up to the approval of the financial statements at December 31,
2019). The Board of Directors meeting, held on May 5, 2017, appointed Giuseppe Recchi as Chairman of the Board, Arnaud Roy de Puyfontaine as Deputy Chairman and Flavio Cattaneo as Chief Executive Officer of the Company.
On June 1, 2017 the Board of Directors approved a change in the company officers, with the appointment of Arnaud Roy de Puyfontaine as Chairman of the
Board of Directors and Giuseppe Recchi as Deputy Chairman.
On July 24, the Board of Directors accepted the resignation (with effect from July 28)
submitted by the Chief Executive Officer Flavio Cattaneo, from that office and from the Board. In the meeting held on 27 July, the Board of Directors temporarily assigned the responsibilities of Chief Executive Officer to the Executive Chairman
Arnaud Roy de Puyfontaine, except for those related to the Security Function and the company Telecom Italia Sparkle, which have been assigned on an interim basis to the Deputy Chairman, Giuseppe Recchi.
Subsequently, on September 28, 2017, the Board of Directors
co-opted
Amos Genish, appointing him as Chief
Executive Officer assigning him executive powers and as General Manager. The Board of Directors also renewed the appointment of Arnaud Roy de Puyfontaine as Executive Chairman and of Giuseppe Recchi as Deputy Executive Chairman.
The Board of Directors of the Company, at September 30, 2017, was consequently composed as follows:
|
|
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Executive Chairman
|
|
Arnaud Roy de Puyfontaine
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|
|
Deputy Executive Chairman
|
|
Giuseppe Recchi
|
|
|
Chief Executive Officer and General Manager
|
|
Amos Genish
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Directors
|
|
Camilla Antonini (independent)
Franco
Bernabè (independent)
Ferruccio Borsani (independent)
Lucia Calvosa (independent)
Francesca Cornelli (independent)
Frédéric Crépin
Dario Frigerio
(independent)
Félicité Herzog (independent)
Anna Jones (independent)
Marella Moretti (independent)
Hervé Philippe
Danilo Vivarelli
(independent)
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|
Secretary to the Board
|
|
Agostino Nuzzolo
|
All the board members are domiciled for the positions they hold in TIM at the registered offices of the Company in Milan, Via
G. Negri 1.
The following board committees were in place at September 30, 2017:
|
|
Control and Risk Committee: composed of the Directors:
Lucia Calvosa (Chair appointed in the meeting of June 22, 2017), Camilla Antonini (appointed by the Board of Directors on July 27, 2017 to replace
the resigning director Frédéric Crépin), Francesca Cornelli, Félicité Herzog and Marella Moretti;
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Nomination and Remuneration Committee: composed of the Directors:
Anna Jones (Chair appointed in the meeting of June 15, 2017), Ferruccio Borsani, Frédéric Crépin, Hervé Philippe
and Danilo Vivarelli;
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Interim Management Report at
September
30, 2017
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Corporate Boards at September 30, 2017
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52
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Strategy Committee: composed
of the Chairman of the Board of Directors, Arnaud Roy de Puyfontaine, the Chief Executive Officer, Amos Genish, the Deputy Executive Chairman, Giuseppe Recchi, (who was appointed
Chair of the Committee by the Board of Directors on September 28), and the Directors Franco Bernabè, Frédéric Crépin (appointed by the Board of Directors on July 27, 2017) and Dario Frigerio.
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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.
On
September 11, 2017, following her resignation, Paola Maiorana was replaced in the Board of Statutory Auditors by Gabriella Chersicla, formerly an Alternate Statutory Auditor of the Company.
The Board of Statutory Auditors of the Company is now composed as follows:
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Chairman
|
|
Roberto Capone
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|
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Acting Auditors
|
|
Vincenzo Cariello
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|
|
Gabriella Chersicla
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Gianluca Ponzellini
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Ugo Rock
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Alternate Auditors
|
|
Francesco Di Carlo
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|
|
Piera Vitali
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|
|
|
|
Riccardo Schioppo
|
INDEPENDENT AUDITORS
The shareholders meeting held on
April 29, 2010 appointed the audit firm PricewaterhouseCoopers S.p.A. to audit TIM financial statements for the nine-year period 2010-2018.
MANAGER RESPONSIBLE FOR PREPARING THE CORPORATE
FINANCIAL REPORTS
At the meeting of May 5, 2017, the Board of Directors confirmed Piergiorgio Peluso (Head of the Group Administration, Finance and
Control Function) as the manager responsible for preparing TIMs financial reports.
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Interim Management Report at
September
30, 2017
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Corporate Boards at September 30, 2017
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53
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MACRO-ORGANIZATION CHART AT SEPTEMBER 30, 2017
With effect from October 12, the responsibility for staff services provided to the Chief Executive Officer has been
assigned to Alessandra Michelini.
With effect from October 18, the responsibility for the Institutional Communication Function has been assigned to
Alessio Vinci, who has joined the TIM Group.
With effect from October 31, the activities and resources of Corporate Shared Value Projects and
Development have been transferred to Institutional Communication.
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Interim Management Report at
September
30, 2017
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Macro-Organization Chart at September 30, 2017
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54
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INFORMATION FOR INVESTORS
TIM S.P.A. SHARE CAPITAL AT SEPTEMBER 30, 2017
|
|
|
|
|
Share capital
|
|
|
11,677,002,855.10 euros
|
|
|
|
|
|
|
Number of ordinary shares (without nominal value)
|
|
|
15,203,122,583
|
|
|
|
|
|
|
Number of savings shares (without nominal value)
|
|
|
6,027,791,699
|
|
|
|
|
|
|
Number of TIM S.p.A. ordinary treasury shares
|
|
|
37,672,014
|
|
|
|
|
|
|
Number of TIM 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
|
|
|
0.77
|
%
|
|
|
|
|
|
Market capitalization (based on September 2017 average prices)
|
|
|
15,881 million euros
|
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|
|
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|
Regarding the trading of shares issued by Group companies on regulated markets, the ordinary and savings shares of TIM 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 TIM 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 TIM S.p.A. and 5 ordinary shares of Tim Participações S.A..
SHAREHOLDERS
Composition of the shareholders according to
the Shareholders Book at September 30, 2017, supplemented by communications received and other available sources of information (ordinary shares):
There are no significant shareholders agreements for TIM pursuant to Article 122 of Italian Legislative Decree
58/1998.
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Interim Management Report at
September
30, 2017
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Information for Investors
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55
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MAJOR
HOLDINGS IN SHARE CAPITAL
At September 30, 2017, taking into account the entries in the Shareholders Book, communications sent to Consob and to the
Company pursuant to Italian Legislative Decree 58 of February 24, 1998, Article 120, and other available sources of information, the relevant holdings of TIM S.p.A. 's ordinary share capital were as follows:
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|
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|
|
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|
|
|
Holder
|
|
Type of ownership
|
|
|
Percentage of ownership
|
|
Vivendi S.A.
|
|
|
Direct
|
|
|
|
23.94
|
%
(*)
|
(*)
|
Equity interest obtained following receipt of a notification by Vivendi S.A. pursuant to Article 152 octies, paragraph 7, of the Consob Issuer Regulations.
|
Blackrock Inc. also notified Consob that, on July 26, 2017, as an asset management company, it indirectly held a quantity of ordinary shares equal to
5.04% of the total ordinary shares of TIM S.p.A. at September 30, 2017.
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.
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|
|
By decree of June 9, 2017, the Milan Court confirmed the appointment of Enrico Cotta Ramusino (already appointed by the decrees of April 11, 2014 and 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 TIM Group, in service or retired, with a mandate for the three-year period 2017-2019.
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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.
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RATING AT SEPTEMBER 30, 2017
At September 30, 2017, the three rating agencies Standard & Poors, Moodys and Fitch Ratings rated TIM as follows:
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Rating
|
|
Outlook
|
STANDARD & POORS
|
|
BB+
|
|
Positive
|
MOODYS
|
|
Ba1
|
|
Stable
|
FITCH RATINGS
|
|
BBB-
|
|
Stable
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WAIVER OF THE OBLIGATION TO PUBLISH DISCLOSURE DOCUMENTS FOR EXTRAORDINARY OPERATIONS
On January 17, 2013, the board of directors of TIM S.p.A. resolved to exercise the option, as per article 70 paragraph 8 and article 71 paragraph
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.
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Interim Management Report at
September
30, 2017
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Information for Investors
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56
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RELATED PARTY TRANSACTIONS AND DIRECTION AND COORDINATION
With effect from May 3, 2017, the Board of Directors of TIM amended the Procedure for the management of transactions with related parties, initially
extending its scope on a voluntary basis and then adding the treatment of Vivendi as its Controlling Entity, from June 1, 2017. In addition, on September 13, 2017, Consob communicated that it considered that Vivendi exercises
de
facto
control over TIM pursuant to Article 2359 of the Italian Civil Code and Article 93 of the Consolidated Law on Finance, and pursuant to the related party regulations. Although it expressed its intention to challenge the decision, the
Board of Directors ensured full compliance with the rules resulting from this classification, also amending the aforementioned Procedure as a consequence (on September 28, 2017); the latest version is available for consultation on the website
www.telecomitalia.com, About Us section Governance System.
In the meantime, on July 27, 2017, the Board of Directors
also acknowledged the start of direction and coordination by Vivendi. On August 4, 2017, in response to a request from Consob, the Company specified that this acknowledgment had taken place, following the statements made to the Board of
Directors by the Executive Chairman, also in his capacity as Chief Executive Officer of the Vivendi group, in the light of two specific circumstances:
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on the one hand, the strengthening of the Companys management team with the arrival in TIM of a senior executive from the Vivendi group, aimed, among other things, at achieving greater coordination between the
industrial and commercial activities of the various companies, as part of the current strategic plan; and
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on the other hand, the JV between TIM and Canal+, as another equally indicative sign of the desire to establish a form of coordination between the two groups in the multimedia sector, again within the context of the
current strategic plan.
|
The information on related party transactions and transactions with the Controlling Entity Vivendi S.A. is
presented in the financial statements and in the Note Related party transactions and Direction and Coordination in the Condensed Consolidated Financial Statements at September 30, 2017 of the TIM Group.
Joint Venture with Canal+
On October 20, 2017, the Board of Directors of TIM examined and approved the binding term sheet by majority vote for the creation of a joint venture with
Canal+.
This transaction constitutes a related party transaction, because Canal+ International S.A.S. is a subsidiary of Vivendi S.A., already classed by
Consob as the
de facto
controlling entity of TIM: this is a minor transaction in accordance with the parameters established by the relevant Consob Regulation. As such, it was submitted to the Control and Risk Committee for its recommendation,
which voted in favor by majority, with motivated vote against by two board members. The Committee voted unanimously in favor, however, with regard to considering future transactions of the joint venture as transactions of TIM, for the application of
the company procedure for performing transactions with related parties.
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Interim Management Report at
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Related party transactions and direction and coordination
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57
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SIGNIFICANT
NON-RECURRING
EVENTS AND
TRANSACTIONS
The effect of significant
non-recurring
events and transactions on the results of the TIM Group is reported below.
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|
|
|
|
|
|
|
|
(millions of euros)
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
Acquisition of goods and services:
|
|
|
|
|
|
|
|
|
Sundry expenses
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee benefits expenses:
|
|
|
|
|
|
|
|
|
Expenses related to restructuring and rationalization
|
|
|
(19
|
)
|
|
|
(128
|
)
|
|
|
|
|
|
|
|
|
|
Other operating expenses:
|
|
|
|
|
|
|
|
|
Sundry expenses and provisions
|
|
|
(199
|
)
|
|
|
(25
|
)
|
|
|
|
|
|
|
|
|
|
Impact on Operating profit (loss) before depreciation and amortization, capital gains (losses)
and impairment reversals (losses) on
non-current
assets (EBITDA)
|
|
|
(222
|
)
|
|
|
(153
|
)
|
|
|
|
|
|
|
|
|
|
Gains (losses) on
non-current
assets:
|
|
|
|
|
|
|
|
|
Gains on disposals of
non-current
assets
|
|
|
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
Impairment reversals (losses) on
non-current
assets:
|
|
|
|
|
|
|
|
|
Impairment losses on
non-current
intangible
assets
|
|
|
(30
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact on EBIT Operating profit (loss)
|
|
|
(252
|
)
|
|
|
(144
|
)
|
|
|
|
|
|
|
|
|
|
Finance expenses:
|
|
|
|
|
|
|
|
|
Interest expenses and miscellaneous finance expenses
|
|
|
(19
|
)
|
|
|
(18
|
)
|
|
|
|
|
|
|
|
|
|
Impact on profit (loss) before tax from continuing operations
|
|
|
(271
|
)
|
|
|
(162
|
)
|
|
|
|
|
|
|
|
|
|
Effect on income taxes on
non-recurring
items
|
|
|
75
|
|
|
|
48
|
|
|
|
|
|
|
|
|
|
|
Provision charges for Sparkle tax dispute
|
|
|
(37
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations Effect of the disposal of the Sofora Telecom Argentina
group
|
|
|
|
|
|
|
(12
|
)
|
|
|
|
|
|
|
|
|
|
Impact on profit (loss) for the period
|
|
|
(233
|
)
|
|
|
(126
|
)
|
|
|
|
|
|
|
|
|
|
POSITIONS OR TRANSACTIONS RESULTING FROM ATYPICAL AND/OR UNUSUAL OPERATIONS
In the first nine months of 2017, the TIM 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, 2017
|
|
Significant non-recurring events and transactions
|
|
|
58
|
|
ALTERNATIVE PERFORMANCE MEASURES
In this Interim Management Report at September 30, 2017 of the TIM Group, in addition to the conventional financial performance measures required by
IFRS, a series of
alternative performance measures
are presented for the purposes of providing a better understanding of results from operations and the financial position. 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 TIM 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
+/-
|
Other expenses (income) from investments
|
+/-
|
Share of profits (losses) 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.
|
TIM 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:
TIM 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 TIM 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:
TIM believes that Net Financial Debt represents an accurate indicator of the Groups ability to meet its financial obligations. It is represented by Gross Financial Debt less Cash and
Cash Equivalents and other Financial Assets. This Interim Management Report includes tables 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, 2017
|
|
Significant non-recurring events and transactions
|
|
|
59
|
|
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, 2017
|
|
Significant non-recurring events and transactions
|
|
|
60
|
|
CONTENTS
TIM GROUP CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AT SEPTEMBER 30, 2017
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
|
|
note
|
|
|
9/30/2017
|
|
|
12/31/2016
|
|
Non-current
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
|
|
|
|
4
|
)
|
|
|
29,520
|
|
|
|
29,612
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets with a finite useful life
|
|
|
|
|
|
|
5
|
)
|
|
|
7,123
|
|
|
|
6,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,643
|
|
|
|
36,563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible assets
|
|
|
|
|
|
|
6
|
)
|
|
|
|
|
|
|
|
|
Property, plant and equipment owned
|
|
|
|
|
|
|
|
|
|
|
13,897
|
|
|
|
13,947
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets held under finance leases
|
|
|
|
|
|
|
|
|
|
|
2,369
|
|
|
|
2,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,266
|
|
|
|
16,360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
non-current
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in associates and joint ventures accounted for using the equity method
|
|
|
|
|
|
|
|
|
|
|
17
|
|
|
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other investments
|
|
|
|
|
|
|
|
|
|
|
49
|
|
|
|
46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
financial assets
|
|
|
|
|
|
|
|
|
|
|
1,916
|
|
|
|
2,698
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Miscellaneous receivables and other
non-current
assets
|
|
|
|
|
|
|
|
|
|
|
2,418
|
|
|
|
2,222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax assets
|
|
|
|
|
|
|
|
|
|
|
705
|
|
|
|
877
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,105
|
|
|
|
5,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Non-current
assets
|
|
|
(a
|
)
|
|
|
|
|
|
|
58,014
|
|
|
|
58,784
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
|
|
|
|
|
|
|
|
|
333
|
|
|
|
270
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and miscellaneous receivables and other current assets
|
|
|
|
|
|
|
|
|
|
|
5,472
|
|
|
|
5,426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current income tax receivables
|
|
|
|
|
|
|
|
|
|
|
52
|
|
|
|
94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities other than investments, financial receivables and other current financial
assets
|
|
|
|
|
|
|
|
|
|
|
1,506
|
|
|
|
1,908
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
2,519
|
|
|
|
3,964
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,025
|
|
|
|
5,872
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
sub-total
|
|
|
|
|
|
|
|
|
|
|
9,882
|
|
|
|
11,662
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operations/Non-current
assets held for
sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Current assets
|
|
|
(b
|
)
|
|
|
|
|
|
|
9,882
|
|
|
|
11,662
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
(a+b
|
)
|
|
|
|
|
|
|
67,896
|
|
|
|
70,446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Consolidated Statements of Financial Position
|
|
|
63
|
|
Equity and Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
|
|
note
|
|
|
9/30/2017
|
|
|
12/31/2016
|
|
Equity
|
|
|
|
|
|
|
7
|
)
|
|
|
|
|
|
|
|
|
Share capital issued
|
|
|
|
|
|
|
|
|
|
|
11,677
|
|
|
|
11,677
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
less: Treasury shares
|
|
|
|
|
|
|
|
|
|
|
(90
|
)
|
|
|
(90
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
|
|
|
|
|
|
|
|
11,587
|
|
|
|
11,587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
paid-in
capital
|
|
|
|
|
|
|
|
|
|
|
2,094
|
|
|
|
2,094
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other reserves and retained earnings (accumulated losses), including profit (loss) for the period
|
|
|
|
|
|
|
|
|
|
|
8,100
|
|
|
|
7,526
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity attributable to Owners of the Parent
|
|
|
|
|
|
|
|
|
|
|
21,781
|
|
|
|
21,207
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests
|
|
|
|
|
|
|
|
|
|
|
2,278
|
|
|
|
2,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Equity
|
|
|
(c
|
)
|
|
|
|
|
|
|
24,059
|
|
|
|
23,553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
financial liabilities
|
|
|
|
|
|
|
8
|
)
|
|
|
28,592
|
|
|
|
30,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee benefits
|
|
|
|
|
|
|
|
|
|
|
1,317
|
|
|
|
1,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities
|
|
|
|
|
|
|
|
|
|
|
313
|
|
|
|
293
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provisions
|
|
|
|
|
|
|
|
|
|
|
833
|
|
|
|
830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Miscellaneous payables and other
non-current
liabilities
|
|
|
|
|
|
|
|
|
|
|
1,600
|
|
|
|
1,607
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Non-current
liabilities
|
|
|
(d
|
)
|
|
|
|
|
|
|
32,655
|
|
|
|
34,554
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial liabilities
|
|
|
|
|
|
|
8
|
)
|
|
|
4,307
|
|
|
|
4,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and miscellaneous payables and other current liabilities
|
|
|
|
|
|
|
|
|
|
|
6,727
|
|
|
|
7,646
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current income tax payables
|
|
|
|
|
|
|
|
|
|
|
148
|
|
|
|
637
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
sub-total
|
|
|
|
|
|
|
|
|
|
|
11,182
|
|
|
|
12,339
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities directly associated with Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities
|
|
|
(e
|
)
|
|
|
|
|
|
|
11,182
|
|
|
|
12,339
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
(f=d+e
|
)
|
|
|
|
|
|
|
43,837
|
|
|
|
46,893
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Equity and Liabilities
|
|
|
(c+f
|
)
|
|
|
|
|
|
|
67,896
|
|
|
|
70,446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Consolidated Statements of Financial Position
|
|
|
64
|
|
SEPARATE CONSOLIDATED INCOME STATEMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
note
|
|
|
3rd Quarter
2017
|
|
|
3rd Quarter
2016
|
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
Revenues
|
|
|
|
|
|
|
4,907
|
|
|
|
4,843
|
|
|
|
14,679
|
|
|
|
13,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
|
|
|
|
99
|
|
|
|
58
|
|
|
|
316
|
|
|
|
165
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating revenues and other income
|
|
|
|
|
|
|
5,006
|
|
|
|
4,901
|
|
|
|
14,995
|
|
|
|
14,104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of goods and services
|
|
|
|
|
|
|
(2,045
|
)
|
|
|
(1,927
|
)
|
|
|
(6,181
|
)
|
|
|
(5,710
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee benefits expenses
|
|
|
|
|
|
|
(673
|
)
|
|
|
(752
|
)
|
|
|
(2,203
|
)
|
|
|
(2,303
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating expenses
|
|
|
|
|
|
|
(357
|
)
|
|
|
(256
|
)
|
|
|
(933
|
)
|
|
|
(757
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in inventories
|
|
|
|
|
|
|
24
|
|
|
|
32
|
|
|
|
74
|
|
|
|
65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internally generated assets
|
|
|
|
|
|
|
144
|
|
|
|
154
|
|
|
|
461
|
|
|
|
479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit before depreciation and amortization, capital gains (losses) and impairment
reversals (losses) on
non-current
assets (EBITDA)
|
|
|
|
|
|
|
2,099
|
|
|
|
2,152
|
|
|
|
6,213
|
|
|
|
5,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
(1,109
|
)
|
|
|
(1,069
|
)
|
|
|
(3,358
|
)
|
|
|
(3,116
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains/(losses) on disposals of
non-current
assets
|
|
|
|
|
|
|
3
|
|
|
|
1
|
|
|
|
9
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment reversals (losses) on
non-current
assets
|
|
|
|
|
|
|
(30
|
)
|
|
|
(3
|
)
|
|
|
(30
|
)
|
|
|
(8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit (loss) (EBIT)
|
|
|
|
|
|
|
963
|
|
|
|
1,081
|
|
|
|
2,834
|
|
|
|
2,768
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of profits (losses) of associates and joint ventures accounted for using the equity
method
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expenses) from investments
|
|
|
|
|
|
|
1
|
|
|
|
(1
|
)
|
|
|
(18
|
)
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
|
|
|
|
|
386
|
|
|
|
309
|
|
|
|
1,496
|
|
|
|
2,321
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance expenses
|
|
|
|
|
|
|
(772
|
)
|
|
|
(674
|
)
|
|
|
(2,622
|
)
|
|
|
(2,831
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) before tax from continuing operations
|
|
|
|
|
|
|
578
|
|
|
|
715
|
|
|
|
1,689
|
|
|
|
2,262
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
|
|
|
(102
|
)
|
|
|
(210
|
)
|
|
|
(559
|
)
|
|
|
(699
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from continuing operations
|
|
|
|
|
|
|
476
|
|
|
|
505
|
|
|
|
1,130
|
|
|
|
1,563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) for the period
|
|
|
|
|
|
|
476
|
|
|
|
505
|
|
|
|
1,130
|
|
|
|
1,610
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Parent
|
|
|
|
|
|
|
437
|
|
|
|
477
|
|
|
|
1,033
|
|
|
|
1,495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests
|
|
|
|
|
|
|
39
|
|
|
|
28
|
|
|
|
97
|
|
|
|
115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(euros)
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
Earnings per share (Basic)
|
|
|
|
|
|
|
|
|
Ordinary Share
|
|
|
0.05
|
|
|
|
0.07
|
|
|
|
|
|
|
|
|
|
|
Savings Share
|
|
|
0.06
|
|
|
|
0.08
|
|
|
|
|
|
|
|
|
|
|
of which:
|
|
|
|
|
|
|
|
|
from Continuing operations attributable to Owners of the Parent
|
|
|
|
|
|
|
|
|
Ordinary Share
|
|
|
0.05
|
|
|
|
0.07
|
|
|
|
|
|
|
|
|
|
|
Savings Share
|
|
|
0.06
|
|
|
|
0.08
|
|
|
|
|
|
|
|
|
|
|
Earnings per share (Diluted)
|
|
|
|
|
|
|
|
|
Ordinary Share
|
|
|
0.04
|
|
|
|
0.05
|
|
|
|
|
|
|
|
|
|
|
Savings Share
|
|
|
0.05
|
|
|
|
0.06
|
|
|
|
|
|
|
|
|
|
|
of which:
|
|
|
|
|
|
|
|
|
from Continuing operations attributable to Owners of the Parent
|
|
|
|
|
|
|
|
|
Ordinary Share
|
|
|
0.04
|
|
|
|
0.05
|
|
|
|
|
|
|
|
|
|
|
Savings Share
|
|
|
0.05
|
|
|
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Separate Consolidated Income Statements
|
|
|
65
|
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Note 7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
|
|
3rd Quarter
2017
|
|
|
3rd Quarter
2016
|
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
Profit (loss) for the period
|
|
|
(a
|
)
|
|
|
476
|
|
|
|
505
|
|
|
|
1,130
|
|
|
|
1,610
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33
|
|
|
|
(118
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effect
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8
|
)
|
|
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b
|
)
|
|
|
|
|
|
|
|
|
|
|
25
|
|
|
|
(86
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
)
|
|
|
|
|
|
|
|
|
|
|
25
|
|
|
|
(86
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other components that subsequently will be reclassified in the Separate Consolidated Income
Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale
financial
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from fair value adjustments
|
|
|
|
|
|
|
21
|
|
|
|
11
|
|
|
|
55
|
|
|
|
87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss (profit) transferred to the Separate Consolidated Income Statements
|
|
|
|
|
|
|
(18
|
)
|
|
|
(2
|
)
|
|
|
(55
|
)
|
|
|
(71
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effect
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(e
|
)
|
|
|
3
|
|
|
|
9
|
|
|
|
2
|
|
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from fair value adjustments
|
|
|
|
|
|
|
(298
|
)
|
|
|
(231
|
)
|
|
|
(629
|
)
|
|
|
(558
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss (profit) transferred to the Separate Consolidated Income Statements
|
|
|
|
|
|
|
194
|
|
|
|
67
|
|
|
|
691
|
|
|
|
312
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effect
|
|
|
|
|
|
|
26
|
|
|
|
43
|
|
|
|
(17
|
)
|
|
|
41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(f
|
)
|
|
|
(78
|
)
|
|
|
(121
|
)
|
|
|
45
|
|
|
|
(205
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences on translating foreign operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) on translating foreign operations
|
|
|
|
|
|
|
40
|
|
|
|
(87
|
)
|
|
|
(511
|
)
|
|
|
531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss (profit) on translating foreign operations transferred to the Separate Consolidated Income
Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19
|
|
|
|
304
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effect
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(g
|
)
|
|
|
40
|
|
|
|
(87
|
)
|
|
|
(492
|
)
|
|
|
835
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
)
|
|
|
(35
|
)
|
|
|
(199
|
)
|
|
|
(445
|
)
|
|
|
642
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other components of the Consolidated Statements of Comprehensive Income
|
|
|
(k=d+i
|
)
|
|
|
(35
|
)
|
|
|
(199
|
)
|
|
|
(420
|
)
|
|
|
556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income (loss) for the period
|
|
|
(a+k
|
)
|
|
|
441
|
|
|
|
306
|
|
|
|
710
|
|
|
|
2,166
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Parent
|
|
|
|
|
|
|
388
|
|
|
|
304
|
|
|
|
755
|
|
|
|
2,030
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests
|
|
|
|
|
|
|
53
|
|
|
|
2
|
|
|
|
(45
|
)
|
|
|
136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Consolidated Statements of Comprehensive Income
|
|
|
66
|
|
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Changes from January 1, 2016 to September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Correction due to 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes from January 1, 2017 to September 30, 2017 Note 7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2016
|
|
|
11,587
|
|
|
|
2,094
|
|
|
|
39
|
|
|
|
(551
|
)
|
|
|
(366
|
)
|
|
|
(113
|
)
|
|
|
|
|
|
|
8,517
|
|
|
|
21,207
|
|
|
|
2,346
|
|
|
|
23,553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in equity during the period:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends approved
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(166
|
)
|
|
|
(166
|
)
|
|
|
(39
|
)
|
|
|
(205
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income (loss) for the period
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
45
|
|
|
|
(350
|
)
|
|
|
25
|
|
|
|
|
|
|
|
1,033
|
|
|
|
755
|
|
|
|
(45
|
)
|
|
|
710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue of equity instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6
|
)
|
|
|
(6
|
)
|
|
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other changes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(14
|
)
|
|
|
|
|
|
|
|
|
|
|
5
|
|
|
|
(9
|
)
|
|
|
16
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2017
|
|
|
11,587
|
|
|
|
2,094
|
|
|
|
41
|
|
|
|
(506
|
)
|
|
|
(730
|
)
|
|
|
(88
|
)
|
|
|
|
|
|
|
9,383
|
|
|
|
21,781
|
|
|
|
2,278
|
|
|
|
24,059
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Consolidated Statements of Changes in Equity
|
|
|
67
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
|
|
note
|
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from continuing operations
|
|
|
|
|
|
|
|
|
|
|
1,130
|
|
|
|
1,563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
3,358
|
|
|
|
3,116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment losses (reversals) on
non-current
assets
(including investments)
|
|
|
|
|
|
|
|
|
|
|
40
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in deferred tax assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
178
|
|
|
|
459
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses (gains) realized on disposals of
non-current
assets
(including investments)
|
|
|
|
|
|
|
|
|
|
|
(10
|
)
|
|
|
(15
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of profits (losses) of associates and joint ventures accounted for using the equity
method
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in employee benefits
|
|
|
|
|
|
|
|
|
|
|
(34
|
)
|
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in inventories
|
|
|
|
|
|
|
|
|
|
|
(64
|
)
|
|
|
(71
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in trade receivables and net amounts due from customers on construction contracts
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
|
(31
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in trade payables
|
|
|
|
|
|
|
|
|
|
|
(829
|
)
|
|
|
(65
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in current income tax receivables/payables
|
|
|
|
|
|
|
|
|
|
|
(445
|
)
|
|
|
85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in miscellaneous receivables/payables and other assets/liabilities
|
|
|
|
|
|
|
|
|
|
|
(85
|
)
|
|
|
(774
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from (used in) operating activities
|
|
|
(a
|
)
|
|
|
|
|
|
|
3,249
|
|
|
|
4,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of intangible assets
|
|
|
|
|
|
|
5
|
)
|
|
|
(1,635
|
)
|
|
|
(1,125
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of tangible assets
|
|
|
|
|
|
|
6
|
)
|
|
|
(2,291
|
)
|
|
|
(2,160
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total purchase of intangible and tangible assets on an accrual basis
|
|
|
|
|
|
|
|
|
|
|
(3,926
|
)
|
|
|
(3,285
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in amounts due for purchases of intangible and tangible assets
|
|
|
|
|
|
|
|
|
|
|
(125
|
)
|
|
|
(180
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total purchase of intangible and tangible assets on a cash basis
|
|
|
|
|
|
|
|
|
|
|
(4,051
|
)
|
|
|
(3,465
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of control in subsidiaries or other businesses, net of cash acquired
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions/disposals of other investments
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in financial receivables and other financial assets
|
|
|
|
|
|
|
|
|
|
|
1,159
|
|
|
|
(96
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
26
|
|
|
|
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from (used in) investing activities
|
|
|
(b
|
)
|
|
|
|
|
|
|
(2,867
|
)
|
|
|
(3,047
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in current financial liabilities and other
|
|
|
|
|
|
|
|
|
|
|
(895
|
)
|
|
|
(140
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from
non-current
financial liabilities (including
current portion)
|
|
|
|
|
|
|
|
|
|
|
1,365
|
|
|
|
3,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayments of
non-current
financial liabilities (including
current portion)
|
|
|
|
|
|
|
|
|
|
|
(2,072
|
)
|
|
|
(3,267
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital proceeds/reimbursements (including subsidiaries)
|
|
|
|
|
|
|
|
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid
|
|
|
|
|
|
|
|
|
|
|
(219
|
)
|
|
|
(227
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from (used in) financing activities
|
|
|
(c
|
)
|
|
|
|
|
|
|
(1,805
|
)
|
|
|
(321
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from (used in) Discontinued
operations/Non-current
assets held for sale
|
|
|
(d
|
)
|
|
|
|
|
|
|
|
|
|
|
(45
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate cash flows
|
|
|
(e=a+b+c+d
|
)
|
|
|
|
|
|
|
(1,423
|
)
|
|
|
877
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash and cash equivalents at beginning of the period
|
|
|
(f
|
)
|
|
|
|
|
|
|
3,952
|
|
|
|
3,216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net foreign exchange differences on net cash and cash equivalents
|
|
|
(g
|
)
|
|
|
|
|
|
|
(99
|
)
|
|
|
182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash and cash equivalents at end of the period
|
|
|
(h=e+f+g
|
)
|
|
|
|
|
|
|
2,430
|
|
|
|
4,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Consolidated Statements of Cash Flows
|
|
|
68
|
|
Additional Cash Flow Information
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
Income taxes (paid) received
|
|
|
(804
|
)
|
|
|
(117
|
)
|
|
|
|
|
|
|
|
|
|
Interest expense paid
|
|
|
(1,514
|
)
|
|
|
(1,701
|
)
|
|
|
|
|
|
|
|
|
|
Interest income received
|
|
|
534
|
|
|
|
624
|
|
|
|
|
|
|
|
|
|
|
Dividends received
|
|
|
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
Analysis of Net Cash and Cash Equivalents
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
Net cash and cash equivalents at beginning of the period
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - from continuing operations
|
|
|
3,964
|
|
|
|
3,559
|
|
|
|
|
|
|
|
|
|
|
Bank overdrafts repayable on demand from continuing operations
|
|
|
(12
|
)
|
|
|
(441
|
)
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - from Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
98
|
|
|
|
|
|
|
|
|
|
|
Bank overdrafts repayable on demand from Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,952
|
|
|
|
3,216
|
|
|
|
|
|
|
|
|
|
|
Net cash and cash equivalents at end of the period
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - from continuing operations
|
|
|
2,519
|
|
|
|
4,275
|
|
|
|
|
|
|
|
|
|
|
Bank overdrafts repayable on demand from continuing operations
|
|
|
(89
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents - from Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank overdrafts repayable on demand from Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,430
|
|
|
|
4,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Consolidated Statements of Cash Flows
|
|
|
69
|
|
NOTE 1
FORM, CONTENT AND OTHER GENERAL INFORMATION
FORM AND CONTENT
Telecom Italia S.p.A. (the
Parent
), also known in short as TIM S.p.A., and its subsidiaries form the TIM Group or
the Group.
TIM is a joint-stock company (S.p.A.) organized under the laws of the Republic of Italy.
The registered offices of the Parent, TIM, are located in Milan, Italy at Via Gaetano Negri 1.
The duration of TIM S.p.A., as stated in the companys bylaws, extends until December 31, 2100.
On July 27, 2017, the Board of Directors of TIM S.p.A. acknowledged the start of the direction and coordination by Vivendi S.A..
On September 13, 2017, Consob communicated that it considered that Vivendi exercises
de facto
control over TIM pursuant to Article 2359 of
the Italian Civil Code and pursuant to Article 93 of the Consolidated Law on Finance, as well as the related party rules.
The TIM Group Condensed
Consolidated Financial Statements at September 30, 2017 have therefore been prepared in accordance with the relevant provisions, indicating Vivendi S.A. as the Controlling Entity and TIM S.p.A. as the company subject to Direction
and Coordination.
The TIM 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 TIM Group condensed consolidated financial statements at September 30, 2017 have been prepared on a going concern basis (for further details see
the Note Accounting policies) and in accordance with the 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.
The TIM Group condensed consolidated financial statements at
September 30, 2017 have been prepared in compliance with IAS 34 (
Interim Reports
) and, as permitted by this standard, do not include all the information required in the annual consolidated financial statements; accordingly, these
financial statements should be read together with the 2016 TIM Group consolidated financial statements.
For purposes of comparison, the consolidated
statements of financial position at December 31, 2016, the separate consolidated income statements and the consolidated statements of comprehensive income for the third quarter of 2016 and the first nine months of 2016 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 2016.
The TIM Group
condensed consolidated financial statements at September 30, 2017 are expressed in euro (rounded to the nearest million unless otherwise indicated).
Publication of the TIM Group condensed consolidated financial statements for the period ended September 30, 2017 was approved by resolution of the Board
of Directors meeting held on November 10, 2017.
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 the TIM 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 TIM 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). EBIT and EBITDA are calculated as follows:
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 1
Form, content and other general information
|
|
|
70
|
|
|
|
|
Profit (loss) before tax from continuing operations
|
|
|
+
|
|
Finance expenses
|
|
|
-
|
|
Finance income
|
|
|
+/-
|
|
Other expenses (income) from investments
|
|
|
+/-
|
|
Share of profits (losses) 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 TIM 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 TIM Group
are organized according to geographic location (Domestic and Brazil) for the telecommunications business.
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 TIM Group are as follows:
|
|
Domestic:
includes operations in Italy for voice and data services on fixed and mobile networks for end customers (retail) and other operators (wholesale), the operations of the Telecom Italia Sparkle group
(International wholesale), which, at international level (Europe, the Mediterranean and South America), develops fiber optic networks for wholesale customers, 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 sector, and in particular the infrastructure for hosting radio transmission equipment for mobile telephone networks, both for TIM and other operators) and the units
supporting the Domestic sector.
|
See the section Financial and Operating Highlights of the Business Units of the TIM
Group Domestic Business Unit of the Interim Management Report for more details.
|
|
Brazil:
includes mobile (TIM Celular) and fixed (TIM Celular and Tim S.A., formerly Intelig) telecommunications operations in Brazil;
|
|
|
Other Operations:
include finance companies and other minor companies not strictly related to the core business of the TIM Group.
|
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 1
Form, content and other general information
|
|
|
71
|
|
NOTE 2
ACCOUNTING POLICIES
GOING CONCERN
The condensed consolidated financial statements at September 30, 2017 have been prepared on a going concern basis as there is the reasonable expectation
that TIM will continue its operational activities in the foreseeable future (and in any event with a time horizon of at least 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 TIM 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 2016 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,
2016.
|
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 consolidation principles adopted in the preparation of the condensed consolidated financial statements at September 30, 2017 are the same as those adopted in the annual consolidated financial statements at
December 31, 2016, to which reference can be made, except for the changes required because of the nature of interim financial reporting.
Furthermore, in the condensed consolidated financial statements at September 30, 2017, income tax expense for the period 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, under 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.
USE OF ESTIMATES
The preparation of the condensed consolidated financial statements at September 30, 2017 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.
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 2
Accounting policies
|
|
|
72
|
|
With regard to the most important accounting estimates, please refer to those illustrated in the annual
consolidated financial statements at December 31, 2016.
NEW STANDARDS AND INTERPRETATIONS ENDORSED BY THE EU AND IN FORCE FROM THE FINANCIAL STATEMENTS AS OF DECEMBER 31, 2017
New Standards and Interpretations endorsed by the EU
Amendments to IAS 12 (Income taxes) - Recognition of Deferred Tax Assets for Unrealized Losses
Amendments to IAS 7 (Cash flow statement - Disclosure initiative)
NEW STANDARDS AND INTERPRETATIONS ISSUED BY IASB
BUT NOT YET APPLICABLE
At the date of preparation of these condensed consolidated financial statements, the following new standards and interpretations,
which have not yet entered into force, had been issued by the IASB:
|
|
|
|
|
|
|
Mandatory
application
starting from
|
|
New Standards and Interpretations endorsed by the EU
|
|
|
|
|
IFRS 15 (Revenues from contracts with customers)
|
|
|
1/1/2018
|
|
Clarifications to IFRS 15 (Revenue from contracts with customers)
|
|
|
1/1/2018
|
|
IFRS 9 (Financial Instruments)
|
|
|
1/1/2018
|
|
IFRS 16 (Leases)
|
|
|
1/1/2019
|
|
New Standards and Interpretations not yet endorsed by the EU
|
|
|
|
|
Amendments to IFRS 2 (Classification and measurement of share-based payments)
|
|
|
1/1/2018
|
|
Improvements to the IFRS (2014-2016 cycle) Amendments to IFRS 12 and IAS 28
|
|
|
1/1/2017
for IFRS 12
1/1/2018
for IAS 28
|
|
IFRIC 22 (Foreign currency transactions and advance consideration)
|
|
|
1/1/2018
|
|
Amendments to IAS 40 (Investment property)
|
|
|
1/1/2018
|
|
IFRIC 23 Uncertainty over income tax treatments
|
|
|
1/1/2019
|
|
Amendments to IFRS 9: Prepayment features with negative compensation
|
|
|
1/1/2019
|
|
Amendments to IAS 28: Long-term interests in Investments in associates and joint ventures
|
|
|
1/1/2019
|
|
IFRS 17: Insurance contracts
|
|
|
1/1/2021
|
|
The potential impacts on the consolidated financial statements from application of these standards and interpretations are
currently being assessed. With regard to the adoption of IFRS 15, IFRS 16 and IFRS 9, specific projects were initiated in 2016 at Group level whose activities continued during the first nine months of 2017. Accordingly, a reliable estimate of the
quantitative effects resulting from the adoption of those standards will only be possible when each project has been completed. Further details of the specific projects are provided in the Note Accounting policies of the annual
consolidated financial statements of the TIM Group at December 31, 2016. In addition, with regard to IFRS 9, one of the areas affected by the new standard is the adoption of the expected credit
loss model for the impairment
of
financial assets and of trade receivables, in particular, instead of the incurred loss
model envisaged by IAS 39.
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 2
Accounting policies
|
|
|
73
|
|
NOTE 3
SCOPE OF CONSOLIDATION
The changes in the scope of consolidation
at September 30, 2017 compared to December 31, 2016 are listed below.
Subsidiaries exiting/merged into the scope of consolidation:
|
|
|
|
|
|
|
Company
|
|
|
|
Business Unit
|
|
Month
|
Exit:
|
|
|
|
|
|
|
TIERRA ARGENTEA S.A.
|
|
Liquidated
|
|
Other Operations
|
|
May 2017
|
Beigua S.r.l.
|
|
Merged into Persidera S.p.A.
|
|
Domestic
|
|
July 2017
|
TI Sparkle Ireland Telecommunications Limited
|
|
Merged into Telecom Italia Sparkle S.p.A.
|
|
Domestic
|
|
July 2017
|
In addition to that already noted above, the changes in the scope of consolidation at September 30, 2017 compared to
September 30, 2016 are listed below.
Entry/merger of subsidiaries into the scope of consolidation
|
|
|
|
|
|
|
Company
|
|
|
|
Business Unit
|
|
Month
|
Entry:
|
|
|
|
|
|
|
NOVERCA S.r.l.
|
|
New acquisition
|
|
Domestic
|
|
October 2016
|
TIMVISION S.r.l.
|
|
New company
|
|
Domestic
|
|
December 2016
|
Merger:
|
TELECOM ITALIA INFORMATION TECHNOLOGY S.p.A.
|
|
Merged into TIM S.p.A.
|
|
Domestic
|
|
December 2016
|
The breakdown by number of subsidiaries and associates of the TIM Group is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/2017
|
|
Companies:
|
|
Italy
|
|
|
Outside Italy
|
|
|
Total
|
|
subsidiaries consolidated
line-by-line
|
|
|
24
|
|
|
|
46
|
|
|
|
70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
joint ventures accounted for using the equity method
|
|
|
1
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
associates accounted for using the equity method
|
|
|
20
|
|
|
|
|
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total companies
|
|
|
45
|
|
|
|
46
|
|
|
|
91
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/31/2016
|
|
Companies:
|
|
Italy
|
|
|
Outside Italy
|
|
|
Total
|
|
subsidiaries consolidated
line-by-line
|
|
|
25
|
|
|
|
48
|
|
|
|
73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
joint ventures accounted for using the equity method
|
|
|
1
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
associates accounted for using the equity method
|
|
|
19
|
|
|
|
|
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total companies
|
|
|
45
|
|
|
|
48
|
|
|
|
93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 3
Scope of consolidation
|
|
|
74
|
|
NOTE 4
GOODWILL
Goodwill shows the following breakdown and changes
during the first nine months of 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
12/31/2016
|
|
|
Reclassifications
|
|
|
Increase
|
|
|
Decrease
|
|
|
Impairments
|
|
|
Exchange
differences
|
|
|
9/30/2017
|
|
Domestic
|
|
|
28,489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Domestic
|
|
|
28,077
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,077
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Wholesale
|
|
|
412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brazil
|
|
|
1,123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(92
|
)
|
|
|
1,031
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
29,612
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(92
|
)
|
|
|
29,520
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
At September 30, 2017, no external or internal events were
identified for the Brazil Business Unit giving reason to believe a new impairment test was required.
For the Domestic Business Unit, there was a negative
difference between Market Capitalization and Equity in a general situation showing highly dynamic regulatory and competitive conditions; in any case the performance for the first nine months of the year is positive and in line with the plan
forecasts.
As a consequence the management has decided to confirm the goodwill allocated to the individual cash generating unit and to update the
impairment tests at the time of the 2017 annual financial statements.
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 4
Goodwill
|
|
|
75
|
|
NOTE 5
INTANGIBLE ASSETS WITH A FINITE USEFUL LIFE
Intangible assets
with a finite useful life increased by 172 million euros compared to December 31, 2016. The breakdown and movements are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
12/31/2016
|
|
|
Additions
|
|
|
Depreciation
and
amortization
|
|
|
Impairment
(losses) /
reversals
|
|
|
Disposals
|
|
|
Exchange
differences
|
|
|
Capitalized
borrowing
costs
|
|
|
Other
changes
|
|
|
9/30/2017
|
|
Industrial patents and intellectual property rights
|
|
|
2,458
|
|
|
|
439
|
|
|
|
(958
|
)
|
|
|
|
|
|
|
|
|
|
|
(90
|
)
|
|
|
|
|
|
|
332
|
|
|
|
2,181
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Concessions, licenses, trademarks and similar rights
|
|
|
2,854
|
|
|
|
20
|
|
|
|
(295
|
)
|
|
|
|
|
|
|
|
|
|
|
(54
|
)
|
|
|
|
|
|
|
37
|
|
|
|
2,562
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other intangible assets
|
|
|
109
|
|
|
|
116
|
|
|
|
(96
|
)
|
|
|
|
|
|
|
|
|
|
|
(3
|
)
|
|
|
|
|
|
|
1
|
|
|
|
127
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Work in progress and advance payments
|
|
|
1,530
|
|
|
|
1,060
|
|
|
|
|
|
|
|
(30
|
)
|
|
|
|
|
|
|
(93
|
)
|
|
|
62
|
|
|
|
(276
|
)
|
|
|
2,253
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
6,951
|
|
|
|
1,635
|
|
|
|
(1,349
|
)
|
|
|
(30
|
)
|
|
|
|
|
|
|
(240
|
)
|
|
|
62
|
|
|
|
94
|
|
|
|
7,123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions in the first nine months of 2017 also included 194 million euros of internally generated assets
(218 million euros in the first nine months of 2016).
Industrial patents and intellectual property rights
at September 30, 2017
essentially consisted of software applications purchased outright and user license rights of unlimited duration, relating to TIM S.p.A. (1,140 million euros) and the Brazil Business Unit (1,020 million euros).
Concessions, licenses, trademarks
and similar rights at September 30, 2017 mainly consisted of:
(2)
|
the remaining cost of telephone licenses and similar rights (1,756 million euros for TIM S.p.A., 282 million euros for the Brazil Business Unit);
|
(3)
|
Indefeasible Rights of Use - IRU (305 million euros) mainly relating to companies of the Telecom Italia Sparkle group - International Wholesale (203 million euros) and the Parent (102 million euros);
|
(4)
|
TV frequencies of the company Persidera in the Core Domestic segment (113 million euros).
|
Other
intangible assets
at September 30, 2017 essentially consisted of capitalized subscriber acquisition costs (SACs) of 108 million euros (73 million euros for the Parent and 35 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 of time.
Work in progress and
advance payments
increased by 723 million euros. This item includes the advance payment by TIM S.p.A. of 630 million euros for the extension of the user rights for the 900 and 1800 MHz (GSM) band, which will take effect from
July 1, 2018 to December 31, 2029.
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 (equal to around 1 billion euros). In the first nine months of 2017, part of the user rights for the 700 Mhz frequencies (33 million euros) became operational and were consequently
reclassified to the item Concessions, licenses, trademarks and similar rights.
Since the assets require a period of more than 12 months to be
ready for use, the directly attributable borrowing costs of 62 million euros were again capitalized in the first nine months of 2017. This amount derives from the application of an annual interest rate for Real of 8.63%; capitalized borrowing
costs have been recorded as a direct reduction of the income statement item Finance expenses - Interest expenses to banks.
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 5
Intangible assets with a finite useful life
|
|
|
76
|
|
NOTE 6
TANGIBLE ASSETS (OWNED AND UNDER FINANCE LEASES)
PROPERTY, PLANT AND EQUIPMENT OWNED
Property, plant and equipment owned decreased by 50 million euros compared to December 31, 2016. The breakdown and movements are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
12/31/2016
|
|
|
Additions
|
|
|
Depreciation and
amortization
|
|
|
Impairment
(losses) /
reversals
|
|
|
Disposals
|
|
|
Exchange
differences
|
|
|
Other
changes
|
|
|
9/30/2017
|
|
Land
|
|
|
203
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
2
|
|
|
|
209
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buildings (civil and industrial)
|
|
|
509
|
|
|
|
4
|
|
|
|
(35
|
)
|
|
|
|
|
|
|
|
|
|
|
(2
|
)
|
|
|
4
|
|
|
|
480
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plant and equipment
|
|
|
11,709
|
|
|
|
1,522
|
|
|
|
(1,708
|
)
|
|
|
|
|
|
|
(6
|
)
|
|
|
(204
|
)
|
|
|
392
|
|
|
|
11,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing and distribution equipment
|
|
|
38
|
|
|
|
7
|
|
|
|
(12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
391
|
|
|
|
37
|
|
|
|
(120
|
)
|
|
|
|
|
|
|
(2
|
)
|
|
|
(11
|
)
|
|
|
74
|
|
|
|
369
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction in progress and advance payments
|
|
|
1,097
|
|
|
|
589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(22
|
)
|
|
|
(565
|
)
|
|
|
1,099
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
13,947
|
|
|
|
2,164
|
|
|
|
(1,875
|
)
|
|
|
|
|
|
|
(8
|
)
|
|
|
(240
|
)
|
|
|
(91
|
)
|
|
|
13,897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions in the first nine months of 2017 included 267 million euros of internally generated assets (261 million
euros in the first nine months of 2016).
Land
comprises both
built-up
land and available land and is not
subject to depreciation. The figure at September 30, 2017 mainly related to TIM S.p.A. (119 million euros) and TIM Real Estate S.r.l. (55 million euros).
Buildings (civil and industrial)
almost exclusively includes buildings for industrial use hosting telephone exchanges or for office use, and light
constructions. The figure at September 30, 2017 mainly related to TIM S.p.A. (225 million euros) and TIM Real Estate S.r.l. (208 million euros).
Plant and equipment
includes the aggregate of all the structures used for the functioning of voice and data telephone services. The figure at
September 30, 2017 was mainly attributable to TIM S.p.A. (8,870 million euros) and to companies of the Brazil Business Unit (2,153 million euros).
Manufacturing and distribution equipment
consists of instruments and equipment used for the operations and maintenance of plants and equipment; the
amount was essentially in line with the end of the prior year and primarily related to TIM S.p.A..
The item
Other
mainly consists of hardware for
the functioning of the Data Center and for work stations, furniture and fixtures and, to a minimal extent, transport vehicles and office machines.
Construction in progress and advance payments
refer to the internal and external costs incurred for the acquisition and internal production of tangible
assets, which are not yet in use.
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 6
Tangible assets (owned and under finance leases)
|
|
|
77
|
|
ASSETS HELD UNDER FINANCE LEASES
Assets held under finance
leases decreased by 44 million euros compared to December 31, 2016. The breakdown and movements are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
12/31/2016
|
|
|
Additions
|
|
|
Change in
financial
leasing
contracts
|
|
|
Depreciation
and
amortization
|
|
|
Exchange
differences
|
|
|
Other
changes
|
|
|
9/30/2017
|
|
Land under lease
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buildings (civil and industrial)
|
|
|
1,835
|
|
|
|
34
|
|
|
|
2
|
|
|
|
(97
|
)
|
|
|
|
|
|
|
15
|
|
|
|
1,789
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plant and equipment
|
|
|
365
|
|
|
|
40
|
|
|
|
10
|
|
|
|
(15
|
)
|
|
|
(29
|
)
|
|
|
14
|
|
|
|
385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
125
|
|
|
|
|
|
|
|
33
|
|
|
|
(22
|
)
|
|
|
(1
|
)
|
|
|
(4
|
)
|
|
|
131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction in progress and advance payments
|
|
|
72
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(32
|
)
|
|
|
48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
2,413
|
|
|
|
82
|
|
|
|
45
|
|
|
|
(134
|
)
|
|
|
(30
|
)
|
|
|
(7
|
)
|
|
|
2,369
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 changes in financial leasing contracts mainly related to TIM S.p.A. (35 million euros) and only for a residual amount to the Brazil Business Unit.
The item
Buildings (civil and industrial)
includes buildings under long rent contracts and related building adaptations, almost exclusively
attributable to TIM S.p.A..
The item
Plant and equipment
mainly 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 additions consisted of the acquisition of IRU transmission capacity by the Parent.
The item
Other
mainly comprises the finance leases on autovehicles.
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 6
Tangible assets (owned and under finance leases)
|
|
|
78
|
|
NOTE 7
EQUITY
Equity consisted of:
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9/30/2017
|
|
|
12/31/2016
|
|
Equity attributable to owners of the Parent
|
|
|
21,781
|
|
|
|
21,207
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests
|
|
|
2,278
|
|
|
|
2,346
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
24,059
|
|
|
|
23,553
|
|
|
|
|
|
|
|
|
|
|
The breakdown of Equity attributable to Owners of the Parent is provided below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
|
|
9/30/2017
|
|
|
|
|
|
12/31/2016
|
|
Share capital
|
|
|
|
|
|
|
11,587
|
|
|
|
|
|
|
|
11,587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
paid-in
capital
|
|
|
|
|
|
|
2,094
|
|
|
|
|
|
|
|
2,094
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other reserves and retained earnings (accumulated losses), including profit (loss) for the
period
|
|
|
|
|
|
|
8,100
|
|
|
|
|
|
|
|
7,526
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserve for
available-for-sale
financial assets
|
|
|
41
|
|
|
|
|
|
|
|
39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserve for cash flow hedges
|
|
|
(506
|
)
|
|
|
|
|
|
|
(551
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserve for exchange differences on translating foreign operations
|
|
|
(730
|
)
|
|
|
|
|
|
|
(366
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserve for remeasurements of employee defined benefit plans (IAS 19)
|
|
|
(88
|
)
|
|
|
|
|
|
|
(113
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
9,383
|
|
|
|
|
|
|
|
8,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
21,781
|
|
|
|
|
|
|
|
21,207
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On the basis of the resolution passed by the Shareholders Meeting held on May 4, 2017, the profit for the year 2016
reported in the financial statements of the Parent TIM S.p.A. has been allocated as follows.
|
|
166 million euros, for the distribution of a preferred dividend to Savings Shareholders of 0.0275 euros for each savings share, gross of withholdings required by law;
|
|
|
95 million euros to the legal reserve;
|
|
|
1,636 million euros to retained earnings.
|
Movements in
Share Capital
during the first nine months
of 2017, amounting to 11,587 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, 2016 and September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(number of shares)
|
|
|
|
|
at
12/31/2016
|
|
|
Share issues
|
|
|
at
9/30/2017
|
|
|
% of share
capital
|
Ordinary shares issued
|
|
|
(a
|
)
|
|
|
15,203,122,583
|
|
|
|
|
|
|
|
15,203,122,583
|
|
|
71.61%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
less: treasury shares
|
|
|
(b
|
)
|
|
|
(163,754,388
|
)
|
|
|
|
|
|
|
(163,754,388
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares outstanding
|
|
|
(c
|
)
|
|
|
15,039,368,195
|
|
|
|
|
|
|
|
15,039,368,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings shares issued and outstanding
|
|
|
(d
|
)
|
|
|
6,027,791,699
|
|
|
|
|
|
|
|
6,027,791,699
|
|
|
28.39%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total TIM S.p.A. shares issued
|
|
|
(a+d
|
)
|
|
|
21,230,914,282
|
|
|
|
|
|
|
|
21,230,914,282
|
|
|
100.00%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total TIM S.p.A. shares outstanding
|
|
|
(c+d
|
)
|
|
|
21,067,159,894
|
|
|
|
|
|
|
|
21,067,159,894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 7
Equity
|
|
|
79
|
|
Reconciliation between the value of shares outstanding at December 31, 2016 and September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
|
|
Share capital at
12/31/2016
|
|
|
Change in share
capital
|
|
|
Share capital at
9/30/2017
|
|
Ordinary shares issued
|
|
|
(a
|
)
|
|
|
8,362
|
|
|
|
|
|
|
|
8,362
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
less: treasury shares
|
|
|
(b
|
)
|
|
|
(90
|
)
|
|
|
|
|
|
|
(90
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares outstanding
|
|
|
(c
|
)
|
|
|
8,272
|
|
|
|
|
|
|
|
8,272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings shares issued and outstanding
|
|
|
(d
|
)
|
|
|
3,315
|
|
|
|
|
|
|
|
3,315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total TIM S.p.A. share capital issued
|
|
|
(a+d
|
)
|
|
|
11,677
|
|
|
|
|
|
|
|
11,677
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total TIM S.p.A. share capital outstanding
|
|
|
(c+d
|
)
|
|
|
11,587
|
|
|
|
|
|
|
|
11,587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
POTENTIAL FUTURE CHANGES IN SHARE CAPITAL
The table below shows
future potential changes in share capital, based on: the issuance of the convertible bond by TIM S.p.A. in March 2015; the authorizations to increase the share capital in place at September 30, 2017; and the options and rights granted under
equity compensation plans, still exercisable at that date:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
133,042
|
|
|
|
73
|
|
|
|
80
|
|
|
|
1.15
|
|
|
|
|
343,069
|
|
|
|
189
|
|
|
|
158
|
|
|
|
1.01
|
|
|
|
|
893,617
|
|
|
|
492
|
|
|
|
393
|
|
|
|
0.99
|
|
|
|
|
13,555,651
|
|
|
|
7,455
|
|
|
|
5,287
|
|
|
|
0.94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total additional capital increases not yet approved (ordinary shares)
|
|
|
14,925,379
|
|
|
|
8,209
|
|
|
|
5,918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital increases already approved (ordinary shares)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 Convertible Bond (ordinary shares)
(*)
|
|
|
1,082,485,386
|
|
|
|
2,000,000
|
|
|
|
n.a.
|
|
|
|
n.a.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible bonds
|
|
|
|
|
|
|
2,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
2,008,209
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
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).
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 7
Equity
|
|
|
80
|
|
NOTE 8
FINANCIAL LIABILITIES
(NON-CURRENT
AND CURRENT)
Non-current
and current financial liabilities
(gross financial debt) were broken down as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
|
|
9/30/2017
|
|
|
12/31/2016
|
|
Financial payables (medium/long-term):
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds
|
|
|
|
|
|
|
17,563
|
|
|
|
18,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible bonds
|
|
|
|
|
|
|
1,854
|
|
|
|
1,832
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts due to banks
|
|
|
|
|
|
|
4,771
|
|
|
|
5,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial payables
|
|
|
|
|
|
|
167
|
|
|
|
306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,355
|
|
|
|
26,136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance lease liabilities (medium/long-term)
|
|
|
|
|
|
|
2,344
|
|
|
|
2,444
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial liabilities (medium/long-term):
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedging derivatives relating to hedged items classified as
non-current
assets/liabilities of a financial nature
|
|
|
|
|
|
|
1,885
|
|
|
|
1,876
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-hedging
derivatives
|
|
|
|
|
|
|
8
|
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,893
|
|
|
|
1,889
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
non-current
financial liabilities
|
|
|
(a
|
)
|
|
|
28,592
|
|
|
|
30,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial payables (short-term):
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds
|
|
|
|
|
|
|
2,524
|
|
|
|
2,589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible bonds
|
|
|
|
|
|
|
1
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts due to banks
|
|
|
|
|
|
|
1,300
|
|
|
|
1,072
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial payables
|
|
|
|
|
|
|
204
|
|
|
|
117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,029
|
|
|
|
3,784
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance lease liabilities (short-term)
|
|
|
|
|
|
|
195
|
|
|
|
192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial liabilities (short-term):
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedging derivatives relating to hedged items classified as current assets/liabilities of a
financial nature
|
|
|
|
|
|
|
78
|
|
|
|
69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-hedging
derivatives
|
|
|
|
|
|
|
5
|
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
83
|
|
|
|
80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current financial liabilities
|
|
|
(b
|
)
|
|
|
4,307
|
|
|
|
4,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities directly associated with Discontinued
operations/Non-current
assets held for sale
|
|
|
(c
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Financial liabilities (Gross financial debt)
|
|
|
(a+b+c
|
)
|
|
|
32,899
|
|
|
|
34,525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 8
Financial liabilities (non-current and current)
|
|
|
81
|
|
Gross financial debt according to the original currency of the transaction is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/2017
|
|
|
12/31/2016
|
|
|
|
(millions of foreign
currency)
|
|
|
(millions of euros)
|
|
|
(millions of foreign
currency)
|
|
|
(millions of euros)
|
|
USD
|
|
|
7,283
|
|
|
|
6,169
|
|
|
|
7,504
|
|
|
|
7,119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GBP
|
|
|
2,040
|
|
|
|
2,314
|
|
|
|
2,017
|
|
|
|
2,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BRL
|
|
|
7,209
|
|
|
|
1,927
|
|
|
|
7,128
|
|
|
|
2,075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JPY
|
|
|
20,078
|
|
|
|
151
|
|
|
|
20,032
|
|
|
|
162
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EURO
|
|
|
|
|
|
|
22,338
|
|
|
|
|
|
|
|
22,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
32,899
|
|
|
|
|
|
|
|
34,525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The breakdown of gross financial debt by effective interest rate bracket, excluding the effect of any hedging instruments, is
provided below:
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9/30/2017
|
|
|
12/31/2016
|
|
Up to 2.5%
|
|
|
4,806
|
|
|
|
5,041
|
|
|
|
|
|
|
|
|
|
|
From 2.5% to 5%
|
|
|
9,556
|
|
|
|
9,368
|
|
|
|
|
|
|
|
|
|
|
From 5% to 7.5%
|
|
|
11,377
|
|
|
|
12,629
|
|
|
|
|
|
|
|
|
|
|
From 7.5% to 10%
|
|
|
3,713
|
|
|
|
3,918
|
|
|
|
|
|
|
|
|
|
|
Over 10%
|
|
|
647
|
|
|
|
673
|
|
|
|
|
|
|
|
|
|
|
Accruals/deferrals, MTM and derivatives
|
|
|
2,800
|
|
|
|
2,896
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
32,899
|
|
|
|
34,525
|
|
|
|
|
|
|
|
|
|
|
Following the use of derivative hedging instruments, on the other hand, the gross financial debt by nominal interest rate
bracket is:
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9/30/2017
|
|
|
12/31/2016
|
|
Up to 2.5%
|
|
|
11,649
|
|
|
|
9,410
|
|
|
|
|
|
|
|
|
|
|
From 2.5% to 5%
|
|
|
6,698
|
|
|
|
7,775
|
|
|
|
|
|
|
|
|
|
|
From 5% to 7.5%
|
|
|
8,290
|
|
|
|
10,586
|
|
|
|
|
|
|
|
|
|
|
From 7.5% to 10%
|
|
|
2,006
|
|
|
|
1,430
|
|
|
|
|
|
|
|
|
|
|
Over 10%
|
|
|
1,456
|
|
|
|
2,428
|
|
|
|
|
|
|
|
|
|
|
Accruals/deferrals, MTM and derivatives
|
|
|
2,800
|
|
|
|
2,896
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
32,899
|
|
|
|
34,525
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
2021
|
|
|
2022
|
|
|
After
2022
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible bonds
|
|
|
2,016
|
|
|
|
3,022
|
|
|
|
1,267
|
|
|
|
564
|
|
|
|
3,087
|
|
|
|
11,519
|
|
|
|
21,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and other financial liabilities
|
|
|
792
|
|
|
|
2,252
|
|
|
|
861
|
|
|
|
675
|
|
|
|
339
|
|
|
|
690
|
|
|
|
5,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance lease liabilities
|
|
|
140
|
|
|
|
112
|
|
|
|
112
|
|
|
|
114
|
|
|
|
85
|
|
|
|
1,910
|
|
|
|
2,473
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
2,948
|
|
|
|
5,386
|
|
|
|
2,240
|
|
|
|
1,353
|
|
|
|
3,511
|
|
|
|
14,119
|
|
|
|
29,557
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial liabilities
|
|
|
671
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
671
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
3,619
|
|
|
|
5,386
|
|
|
|
2,240
|
|
|
|
1,353
|
|
|
|
3,511
|
|
|
|
14,119
|
|
|
|
30,228
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The main components of financial liabilities are commented below.
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 8
Financial liabilities (non-current and current)
|
|
|
82
|
|
Bonds
are broken down as follows:
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9/30/2017
|
|
|
12/31/2016
|
|
Non-current
portion
|
|
|
17,563
|
|
|
|
18,537
|
|
|
|
|
|
|
|
|
|
|
Current portion
|
|
|
2,524
|
|
|
|
2,589
|
|
|
|
|
|
|
|
|
|
|
Total carrying amount
|
|
|
20,087
|
|
|
|
21,126
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustment and measurements at amortized cost
|
|
|
(612
|
)
|
|
|
(709
|
)
|
|
|
|
|
|
|
|
|
|
Total nominal repayment amount
|
|
|
19,475
|
|
|
|
20,417
|
|
|
|
|
|
|
|
|
|
|
The
convertible bonds
consist of the unsecured equity-linked bond for 2,000 million euros, with a coupon of
1.125%, issued by TIM S.p.A., convertible into newly-issued ordinary shares, maturing in 2022.
|
|
This item was broken down as follows:
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9/30/2017
|
|
|
12/31/2016
|
|
Non-current
portion
|
|
|
1,854
|
|
|
|
1,832
|
|
|
|
|
|
|
|
|
|
|
Current portion
|
|
|
1
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
Total carrying amount
|
|
|
1,855
|
|
|
|
1,838
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustment and measurements at amortized cost
|
|
|
145
|
|
|
|
162
|
|
|
|
|
|
|
|
|
|
|
Total nominal repayment amount
|
|
|
2,000
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
|
|
The nominal repayment amount of the bonds and convertible bonds totaled 21,475 million euros and was down
942 million euros compared to December 31, 2016 (22,417 million euros), as a result of the new issues and redemptions in the first nine months of 2017.
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 8
Financial liabilities (non-current and current)
|
|
|
83
|
|
The following table lists the bonds issued by companies of the TIM 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
9/30/17
(%)
|
|
|
Market value
at
9/30/17
(millions of
euros)
|
|
Bonds issued by TIM S.p.A.
|
|
GBP
|
|
|
750
|
|
|
|
851
|
|
|
|
7.375
|
%
|
|
|
5/26/09
|
|
|
|
12/15/17
|
|
|
|
99.608
|
|
|
|
101.348
|
|
|
|
862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
592.9
|
|
|
|
593
|
|
|
|
4.750
|
%
|
|
|
5/25/11
|
|
|
|
5/25/18
|
|
|
|
99.889
|
|
|
|
103.104
|
|
|
|
611
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
581.9
|
|
|
|
582
|
|
|
|
6.125
|
%
|
|
|
6/15/12
|
|
|
|
12/14/18
|
|
|
|
99.737
|
|
|
|
107.301
|
|
|
|
624
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
832.4
|
|
|
|
832
|
|
|
|
5.375
|
%
|
|
|
1/29/04
|
|
|
|
1/29/19
|
|
|
|
99.070
|
|
|
|
107.091
|
|
|
|
891
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GBP
|
|
|
850
|
|
|
|
964
|
|
|
|
6.375
|
%
|
|
|
6/24/04
|
|
|
|
6/24/19
|
|
|
|
98.850
|
|
|
|
108.479
|
|
|
|
1,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
719.5
|
|
|
|
719
|
|
|
|
4.000
|
%
|
|
|
12/21/12
|
|
|
|
1/21/20
|
|
|
|
99.184
|
|
|
|
108.668
|
|
|
|
782
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
547.5
|
|
|
|
547
|
|
|
|
4.875
|
%
|
|
|
9/25/13
|
|
|
|
9/25/20
|
|
|
|
98.966
|
|
|
|
113.464
|
|
|
|
621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
563.6
|
|
|
|
564
|
|
|
|
4.500
|
%
|
|
|
1/23/14
|
|
|
|
1/25/21
|
|
|
|
99.447
|
|
|
|
113.577
|
|
|
|
640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
(b)
202.9
|
|
|
|
203
|
|
|
|
6 month Euribor (base 365)
|
|
|
|
1/1/02
|
|
|
|
1/1/22
|
|
|
|
100
|
|
|
|
100
|
|
|
|
203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
883.9
|
|
|
|
884
|
|
|
|
5.250
|
%
|
|
|
2/10/10
|
|
|
|
2/10/22
|
|
|
|
99.295
|
|
|
|
119.115
|
|
|
|
1,053
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
(c)
2,000
|
|
|
|
2,000
|
|
|
|
1.125
|
%
|
|
|
3/26/15
|
|
|
|
3/26/22
|
|
|
|
100
|
|
|
|
100.325
|
|
|
|
2,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
1,000
|
|
|
|
1,000
|
|
|
|
3.250
|
%
|
|
|
1/16/15
|
|
|
|
1/16/23
|
|
|
|
99.446
|
|
|
|
110.715
|
|
|
|
1,107
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GBP
|
|
|
375
|
|
|
|
425
|
|
|
|
5.875
|
%
|
|
|
5/19/06
|
|
|
|
5/19/23
|
|
|
|
99.622
|
|
|
|
116.868
|
|
|
|
497
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
1,000
|
|
|
|
1,000
|
|
|
|
2.500
|
%
|
|
|
1/19/17
|
|
|
|
7/19/23
|
|
|
|
99.288
|
|
|
|
106.806
|
|
|
|
1,068
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
750
|
|
|
|
750
|
|
|
|
3.625
|
%
|
|
|
1/20/16
|
|
|
|
1/19/24
|
|
|
|
99.632
|
|
|
|
112.521
|
|
|
|
844
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USD
|
|
|
1,500
|
|
|
|
1,271
|
|
|
|
5.303
|
%
|
|
|
5/30/14
|
|
|
|
5/30/24
|
|
|
|
100
|
|
|
|
108.518
|
|
|
|
1,379
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
1,000
|
|
|
|
1,000
|
|
|
|
3.000
|
%
|
|
|
9/30/16
|
|
|
|
9/30/25
|
|
|
|
99.806
|
|
|
|
107.743
|
|
|
|
1,077
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
1,000
|
|
|
|
1,000
|
|
|
|
3.625
|
%
|
|
|
5/25/16
|
|
|
|
5/25/26
|
|
|
|
100
|
|
|
|
112.488
|
|
|
|
1,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
|
|
|
670
|
|
|
|
670
|
|
|
|
5.250
|
%
|
|
|
3/17/05
|
|
|
|
3/17/55
|
|
|
|
99.667
|
|
|
|
116.781
|
|
|
|
782
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
|
15,855
|
|
|
|
|
|
|
|
17,219
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds issued by Telecom Italia Finance S.A. and guaranteed by TIM S.p.A.
|
|
Euro
|
|
|
1,015
|
|
|
|
1,015
|
|
|
|
7.750
|
%
|
|
|
1/24/03
|
|
|
|
1/24/33
|
|
|
|
(a)
109.646
|
|
|
|
151.895
|
|
|
|
1,542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
|
1,015
|
|
|
|
|
|
|
|
1,542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonds issued by Telecom Italia Capital S.A. and guaranteed by TIM S.p.A.
|
|
USD
|
|
|
(d)
676.6
|
|
|
|
573
|
|
|
|
6.999
|
%
|
|
|
6/4/08
|
|
|
|
6/4/18
|
|
|
|
100
|
|
|
|
103.348
|
|
|
|
592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USD
|
|
|
(d)
759.7
|
|
|
|
644
|
|
|
|
7.175
|
%
|
|
|
6/18/09
|
|
|
|
6/18/19
|
|
|
|
100
|
|
|
|
108.312
|
|
|
|
697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USD
|
|
|
1,000
|
|
|
|
847
|
|
|
|
6.375
|
%
|
|
|
10/29/03
|
|
|
|
11/15/33
|
|
|
|
99.558
|
|
|
|
115.400
|
|
|
|
977
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USD
|
|
|
1,000
|
|
|
|
847
|
|
|
|
6.000
|
%
|
|
|
10/6/04
|
|
|
|
9/30/34
|
|
|
|
99.081
|
|
|
|
110.805
|
|
|
|
939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USD
|
|
|
1,000
|
|
|
|
847
|
|
|
|
7.200
|
%
|
|
|
7/18/06
|
|
|
|
7/18/36
|
|
|
|
99.440
|
|
|
|
124.005
|
|
|
|
1,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USD
|
|
|
1,000
|
|
|
|
847
|
|
|
|
7.721
|
%
|
|
|
6/4/08
|
|
|
|
6/4/38
|
|
|
|
100
|
|
|
|
128.470
|
|
|
|
1,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
|
4,605
|
|
|
|
|
|
|
|
5,343
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
21,475
|
|
|
|
|
|
|
|
24,104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Weighted average issue price for bonds issued with more than one tranche.
|
(b)
|
Reserved for employees.
|
(c)
|
Bond convertible into newly-issued TIM S.p.A. ordinary treasury shares.
|
(d)
|
Net of the securities bought back by TIM S.p.A. on July 20, 2015.
|
The regulations and the Offering
Circulars relating to the bonds of the TIM Group are available on the corporate website www.telecomitalia.com.
The following tables list the changes in bonds during the first nine months of 2017:
New issues
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of original currency)
|
|
Currency
|
|
|
Amount
|
|
|
Issue date
|
|
Telecom Italia S.p.A. 1,000 million euros 2.500% maturing 7/19/2023
|
|
|
Euro
|
|
|
|
1,000
|
|
|
|
1/19/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayments
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of original currency)
|
|
Currency
|
|
|
Amount
|
|
|
Repayment date
|
|
Telecom Italia S.p.A. 545 million euros 7.000%
(1)
|
|
|
Euro
|
|
|
|
545
|
|
|
|
1/20/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Italia S.p.A. 628 million euros 4.500%
(2)
|
|
|
Euro
|
|
|
|
628
|
|
|
|
9/20/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net of buybacks by the Company of 455 million euros during 2015.
|
|
Net of buybacks by the Company of 372 million euros during 2015.
|
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 8
Financial liabilities (non-current and current)
|
|
|
84
|
|
Medium/long-term
amounts due to banks
of 4,771 million euros (5,461 million euros at
December 31, 2016) decreased by 690 million euros (on July 3, 2017, the sum of 75 million euros was repaid early of the bilateral term loan
with Mediobanca for an original amount of 150 million euros maturing in July
2020). Short-term amounts due to banks totaled 1,300 million euros (1,072 million euros at December 31, 2016) and included 815 million euros of the current portion of medium/long-term amounts due to banks.
Medium/long-term
other financial payables
, amounting to 167 million euros (306 million euros at December 31, 2016), decreased by
139 million euros (following the early repayment on April 10, 2017 of the bilateral term loan with Cassa Depositi e Prestiti of the amount of 100 million euros maturing April 2019) and included 146 million euros of the Telecom
Italia Finance S.A. loan for 20,000 Japanese yen maturing in 2029. Short-term other financial payables amounted to 204 million euros (117 million euros at December 31, 2016) and included 15 million euros of the current portion of
medium/long-term other financial payables.
Medium/long-term
finance lease liabilities
totaled 2,344 million euros (2,444 million euros
at December 31, 2016) and mainly related to property leases accounted for using the financial method established by IAS 17. Short-term finance lease liabilities amounted to 195 million euros (192 million euros at December 31,
2016).
Hedging derivatives
relating to items classified as
non-current
liabilities of a financial nature
amounted to 1,885 million euros (1,876 million euros at December 31, 2016). Hedging derivatives relating to items classified as current liabilities of a financial nature totaled 78 million euros (69 million euros at
December 31, 2016).
Non-hedging
derivatives
classified as
non-current
financial liabilities totaled 8 million euros (13 million euros at December 31, 2016).
Non-hedging
derivatives classified as
non-current
financial liabilities totaled 5 million euros (11 million euros at December 31, 2016). These also 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, 2017
The bonds issued by the TIM Group do not contain financial covenants
(e.g. ratios such as
Debt/EBITDA, EBITDA/Interest, etc.) or clauses that result in the automatic early redemption of the bonds in relation to events other than the insolvency of the TIM Group
(3)
. 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 TIM 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 TIM S.p.A. with the European Investment Bank (EIB), at September 30, 2017, the
nominal amount of outstanding loans amounted to 1,950 million euros, of which 800 million euros at direct risk and 1,150 million euros secured.
EIB loans not secured by bank guarantees for a nominal amount equal to 800 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);
|
(3)
|
A change of control event can result in the early repayment of the convertible bond of TIM S.p.A., the EIB loans and the bilateral credit line with Mediobanca, as
further detailed below.
|
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 8
Financial liabilities (non-current and current)
|
|
|
85
|
|
|
|
with the 500 million euros loan, signed on December 14, 2015, TIM undertook to ensure that, for the entire duration of the loan, the total financial debt of the Group companies other than TIM S.p.A.
except for the cases when that debt is fully and irrevocably secured by TIM 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 1,150 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 TIM 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 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 TIMs 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 of it (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, TIM must immediately inform the 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
TIM 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, TIM is required to provide notification of change of control. Identification of
the occurrence of a change of control
and the applicable consequences including, at the discretion of the investors, the establishment of guarantees or the early repayment of the amount paid in cash or as shares 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 TIM, 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, 2017, no covenant,
negative pledge clause or other clause relating to the
above-described debt position, has in any way been breached or violated.
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 8
Financial liabilities (non-current and current)
|
|
|
86
|
|
REVOLVING CREDIT FACILITY
The following table shows the
composition and the drawdown of the committed
credit lines available at September 30, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/30/2017
|
|
|
12/31/2016
|
|
(billions of euros)
|
|
Agreed
|
|
|
Agreed
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TIM 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.
TIM also has:
|
|
a bilateral Term Loan
from UBI Banca (former Banca Regionale Europea) expiring July 2019 for 200 million euros, drawn down for the full amount;
|
|
|
two bilateral Term Loans
from Mediobanca respectively for 200 million euros expiring in November 2019 and 75 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 February 2018 for 250 million euros, drawn down for the full amount.
|
TIMS RATING AT SEPTEMBER 30, 2017
At
September 30, 2017, the three rating agencies Standard & Poors, Moodys and Fitch Ratings rated TIM as follows:
|
|
|
|
|
|
|
|
|
|
|
Rating
|
|
|
Outlook
|
|
STANDARD & POORS
|
|
|
BB+
|
|
|
|
Positive
|
|
MOODYS
|
|
|
Ba1
|
|
|
|
Stable
|
|
FITCH RATINGS
|
|
|
BBB-
|
|
|
|
Stable
|
|
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 8
Financial liabilities (non-current and current)
|
|
|
87
|
|
NOTE 9
NET FINANCIAL DEBT
The following table shows the net financial
debt at September 30, 2017 and December 31, 2016, 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 the net financial debt determined according to the criteria indicated by the ESMA and net financial debt
calculated according to the criteria of the TIM Group.
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
|
|
|
9/30/2017
|
|
|
12/31/2016
|
|
Non-current
financial liabilities
|
|
|
|
|
|
|
28,592
|
|
|
|
30,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial liabilities
|
|
|
|
|
|
|
4,307
|
|
|
|
4,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities directly associated with Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Gross financial debt
|
|
|
(a
|
)
|
|
|
32,899
|
|
|
|
34,525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
financial assets (°)
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
financial receivables for lease
contract
|
|
|
|
|
|
|
(87
|
)
|
|
|
(101
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
hedging derivatives
|
|
|
|
|
|
|
(1,624
|
)
|
|
|
(2,497
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b
|
)
|
|
|
(1,711
|
)
|
|
|
(2,598
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities other than investments
|
|
|
|
|
|
|
(1,043
|
)
|
|
|
(1,519
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial receivables and other current financial assets
|
|
|
|
|
|
|
(463
|
)
|
|
|
(389
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
(2,519
|
)
|
|
|
(3,964
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets relating to Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c
|
)
|
|
|
(4,025
|
)
|
|
|
(5,872
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net financial debt as per Consob communication DEM/6064293/2006 (ESMA)
|
|
|
(d=a+b+c
|
)
|
|
|
27,163
|
|
|
|
26,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
financial assets (°)
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities other than investments
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial receivables and other
non-current
financial assets
|
|
|
|
|
|
|
(205
|
)
|
|
|
(99
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(e
|
)
|
|
|
(205
|
)
|
|
|
(100
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net financial debt(*)
|
|
|
(f=d+e
|
)
|
|
|
26,958
|
|
|
|
25,955
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reversal of fair value measurement of derivatives and related financial
assets/liabilities
|
|
|
(g
|
)
|
|
|
(730
|
)
|
|
|
(836
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net financial debt
|
|
|
(f+g
|
)
|
|
|
26,228
|
|
|
|
25,119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(°)
|
At September 30, 2017 and at December 31, 2016, the item
Non-current
financial assets (b+e) amounted to 1,916 million euros and 2,698 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.
|
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 9
Net financial debt
|
|
|
88
|
|
NOTE 10
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:
(2)
|
Level 1: quoted prices in active market;
|
(3)
|
Level 2: prices calculated using observable market inputs;
|
(4)
|
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, 2017.
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.
|
|
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 10
Supplementary disclosures on financial instruments
|
|
|
89
|
|
Fair value hierarchy level for each class of financial asset/liability at 9/30/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hierarchy Levels
|
|
(millions of euros)
|
|
|
|
|
IAS 39
Categories
|
|
|
Note
|
|
|
Carrying
amount in
financial
statements
at
9/30/2017
|
|
|
Level 1
(*)
|
|
|
Level 2
(*)
|
|
|
Level 3
(*)
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other investments
|
|
|
|
|
|
|
AfS
|
|
|
|
|
|
|
|
49
|
|
|
|
3
|
|
|
|
19
|
|
|
|
|
|
Securities, financial receivables and other
non-current
financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which securities
|
|
|
|
|
|
|
AfS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which hedging derivatives
|
|
|
|
|
|
|
HD
|
|
|
|
|
|
|
|
1,624
|
|
|
|
|
|
|
|
1,624
|
|
|
|
|
|
of which
non-hedging
derivatives
|
|
|
|
|
|
|
FAHfT
|
|
|
|
|
|
|
|
8
|
|
|
|
|
|
|
|
8
|
|
|
|
|
|
|
|
|
(a
|
)
|
|
|
|
|
|
|
|
|
|
|
1,681
|
|
|
|
3
|
|
|
|
1,651
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which
available-for-sale
financial assets
|
|
|
|
|
|
|
AfS
|
|
|
|
|
|
|
|
932
|
|
|
|
932
|
|
|
|
|
|
|
|
|
|
of which
held-for-trading
financial assets
|
|
|
|
|
|
|
FAHfT
|
|
|
|
|
|
|
|
111
|
|
|
|
111
|
|
|
|
|
|
|
|
|
|
Financial receivables and other current financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which hedging derivatives
|
|
|
|
|
|
|
HD
|
|
|
|
|
|
|
|
348
|
|
|
|
|
|
|
|
348
|
|
|
|
|
|
of which
non-hedging
derivatives
|
|
|
|
|
|
|
FAHfT
|
|
|
|
|
|
|
|
16
|
|
|
|
|
|
|
|
16
|
|
|
|
|
|
|
|
|
(b
|
)
|
|
|
|
|
|
|
|
|
|
|
1,407
|
|
|
|
1,043
|
|
|
|
364
|
|
|
|
|
|
Total
|
|
|
(a+b
|
)
|
|
|
|
|
|
|
|
|
|
|
3,088
|
|
|
|
1,046
|
|
|
|
2,015
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which hedging derivatives
|
|
|
|
|
|
|
HD
|
|
|
|
8
|
)
|
|
|
1,885
|
|
|
|
|
|
|
|
1,885
|
|
|
|
|
|
of which
non-hedging
derivatives
|
|
|
|
|
|
|
FLHfT
|
|
|
|
8
|
)
|
|
|
8
|
|
|
|
|
|
|
|
8
|
|
|
|
|
|
|
|
|
(c
|
)
|
|
|
|
|
|
|
|
|
|
|
1,893
|
|
|
|
|
|
|
|
1,893
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which hedging derivatives
|
|
|
|
|
|
|
HD
|
|
|
|
8
|
)
|
|
|
78
|
|
|
|
|
|
|
|
78
|
|
|
|
|
|
of which
non-hedging
derivatives
|
|
|
|
|
|
|
FLHfT
|
|
|
|
8
|
)
|
|
|
5
|
|
|
|
|
|
|
|
5
|
|
|
|
|
|
|
|
|
(d
|
)
|
|
|
|
|
|
|
|
|
|
|
83
|
|
|
|
|
|
|
|
83
|
|
|
|
|
|
Total
|
|
|
(c+d
|
)
|
|
|
|
|
|
|
|
|
|
|
1,976
|
|
|
|
|
|
|
|
1,976
|
|
|
|
|
|
(*)
|
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.
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 10
Supplementary disclosures on financial instruments
|
|
|
90
|
|
NOTE 11
CONTINGENT LIABILITIES, OTHER INFORMATION
A description is
provided below of the most significant judicial, arbitration and tax disputes in which TIM Group companies are involved as of September 30, 2017, as well as those that came to an end during the period.
The TIM Group has posted liabilities totaling 579 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 2016 Annual Report:
(5)
|
international tax and regulatory disputes;
|
(6)
|
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
In September 2017 the Rome Appeal Court rejected
the appeal lodged by the Prosecutors office, confirming the acquittal of the three former managers already ordered in the first instance by the Court of Rome. The Rome Public Prosecutors Office had challenged the judgement of the Court
of Rome of October 2013 with which the three former managers of Telecom Italia Sparkle were fully acquitted of 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); only Telecom Italia Sparkle is still under investigation 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 judgement of the first instance, the Company 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, it should be noted that in February 2014 the Revenues Agency (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 totalled 280 million euros. In this respect the Company had filed an appeal to the Provincial Tax Commission of Rome in April 2014. The Commission rejected the appeal with a decision filed in May 2016.
The Company lodged an appeal with the Regional Tax Commission of Lazio in October 2016, opposing the judgement in the first instance, requesting a
suspension of the enforcement of this first instance judgement subject to presentation of an appropriate guarantee. In December 2016, the Regional Tax Commission granted this suspension, fixing the date for a hearing on the merits in April 2017. On
5 April 2017 the appeal was discussed before the Regional Tax Commission of Lazio. On 26 April 2017 the second tier ruling was filed (2310/2017sec. 11) which rejected the Companys appeal. During the same month of April an
application was filed for the scrapping of the case opened by Equitalia following the unfavourable judgement of the Rome Provincial Tax Commission concerning the application for payment of 2/3rds of the sanction imposed earlier by the
Revenues Agency; this reduced the overall risk to 93 million euros and the dispute continued but limited to that amount.
Thereafter, following the
introduction of regulations on the facilitated settlement of pending tax litigation, the company arranged to settle the entire case with the payment, made on 2 October 2017, of an amount of around 37 million euros, corresponding to 40% of
the sanction still under dispute. As a result, the dispute was settled.
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 11
Contingent liabilities, other information
|
|
|
91
|
|
Administrative offence charge pursuant to Legislative Decree 231/2011 for the
so-called
TIM Security Affair.
In December 2008 TIM 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 corruption of public officials, with the object of acquiring information from confidential files. In May 2010 TIM definitively ceased to be 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, TIM 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 TIM) 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 TIM 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 recognised 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 TIM, to compensate said damages, totalling
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 recognised 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 first instance were published (which, for its part, the
Company decided not to contest). At the end of the appeal, which was brought by the convicted defendants, the judgement in the first instance was partly reversed. The appeal judge took note of the fact that the time-limit had expired on the majority
of the charges, and made an order not to proceed against the defendants who had been convicted in the lower court, with the exception of two, who were found guilty of the offence of revealing information which was subject to a prohibition on
disclosure. As for the civil judgements, the Court revoked those made by the judge of first instance and ruled in favour of three ministries, AGCM and the Revenues Agency. The Court also decided to revoke the provisional sum of 10 million euros
awarded to the Company as civil party at the end of the proceedings in the court of first instance, making a generic ruling that the defendants should pay compensatory civil damages. Finally, the appeal judge also rejected all the demands for
compensation advanced in the appeals by certain civil parties for a total of about 60 million euros, in respect of which the Company has the role of party liable for damages. At the end of the appeal, therefore, the civil rulings settled in the
first instance were confirmed which TIM, as the party liable for damages, had already paid to the damaged requesting parties. The three defendants brought an appeal to the Court of Cassation against the judgement of the second instance issued by the
Milan Appeal Court of Assizes, for which, as of today, the preliminary hearing is still to be scheduled.
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 11
Contingent liabilities, other information
|
|
|
92
|
|
It should be noted that for some of the disputes described below, it was not possible to make a reliable
estimate of the size and/or times of possible payments, if any, on the basis of the information available at the closing date of the present document, particularly in light of the complexity of the proceedings, the progress made, and the elements of
uncertainty of a technical-trial nature. Moreover, in those cases in which disclosure of information on a dispute could seriously jeopardise the position of TIM 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 the information published in
the 2016 Annual Report:
|
|
Italian Competition Authority Case
I-761;
|
|
|
COLT TECHNOLOGY SERVICES;
|
|
|
KPNQ West Italia S.p.A.;
|
|
|
Vodafone DisputeUniversal Service;
|
|
|
Olivetti Asbestos exposure;
|
|
|
Elinet S.p.A. Bankruptcy;
|
|
|
Dispute relative to Adjustments on license fees for the years 1994-1998;
|
|
|
BrazilDocas/JVCO Arbitration;
|
|
|
Brazil CAM JVCO Arbitration.
|
Antitrust Case A428
At the conclusion of case A428, in May 2013,
Italian Competition Authority AGCM imposed two administrative sanctions of 88,182,000 euros and 15,612,000 euros on TIM for abuse of its dominant position. The Company allegedly (i) hindered or delayed activation of access services requested by
OLOs through unjustified and spurious refusals; (ii) offered its access services to final customers at economic and technical conditions that allegedly could not be matched by competitors purchasing wholesale access services from TIM itself,
only in those geographic areas of the Country where disaggregated access services to the local network are available, and hence where other operators can compete more effectively with the Company.
TIM appealed against the decision before the Regional Administrative Court (TAR) for Lazio, applying for payment of the fine to be suspended. In particular,
it alleged: infringement of its rights to defend itself in the proceedings, the circumstance that the organisational choices challenged by AGCM and allegedly at the base of the abuse of the OLO provisioning processes had been the subject of specific
rulings made by the industry regulator (AGCom), the circumstance that the comparative examination of the internal/external provisioning processes had in fact shown better results for the OLOs than for the TIM retail department (hence the lack of any
form of inequality of treatment and/or opportunistic behaviour by TIM), and (regarding the second abuse) the fact that the conduct was structurally unsuitable to reduce the margins of the OLOs.
In May 2014, the judgement of the Lazio TAR was published, rejecting TIMs appeal and confirming the fines imposed in the original order challenged. In
September 2014 the Company appealed against this decision.
In May 2015, with the judgement no. 2497/15, the Council of State found the decision of the
court of first instance did not present the deficiencies alleged by TIM and confirmed the AGCM ruling. The company had already proceeded to pay the fines and the accrued interest.
In a decision notified in July 2015, AGCM started proceedings for
non-compliance
against TIM, to ascertain if the
Company had respected the notice to comply requiring it to refrain from undertaking behaviours analogous to those that were the object of the breach ascertained with the concluding decision in case A428 dated May 2013.
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 11
Contingent liabilities, other information
|
|
|
93
|
|
On 13 January 2017 TIM was notified of the conclusive assessment of the Italian Competition Authority
(AGCM), acknowledging that TIM has fully complied with the judgement in proceedings A428 and that therefore the conditions do not exist for the imposition of any sanctions for
non-compliance.
AGCM recognises, furthermore, that TIMs behaviour subsequently to the 2013 proceedings has been directed towards continuous improvement of its
performance in the supply of wholesale access services concerning not only the services which were the subject of the investigation, but also the new super-fast broadband access services. In assessing compliance, AGCM recognised the positive impact
of the implementation, albeit not yet completed, of TIMs New Equivalence Model (NME). AGCMs decision forces TIM to: (i) proceed with the implementation of the NME until its completion which is expected to be by 30 April 2017;
(ii) to inform the Authority about the performance levels of the systems for providing wholesale access services and about the completion of the corresponding internal reorganisation plan by the end of May 2017. Both impositions were promptly
fulfilled.
Vodafone lodged an appeal with the Lazio Regional Administrative Court against the final decision in the proceedings for
non-compliance
taken by AGCM. TIM filed an appearance, as it did in the further proceedings brought in the month of March 2017 by the operators CloudItalia, Kpnqwest and Digitel.
Competition Authority case A514
In June 2017 the Italian Competition Authority (AGCM) started proceedings A514 against TIM, to ascertain a possible abuse of its dominant market position in
breach of article 102 of the Treaty on the Functioning of the European Union. The proceedings were started based on some complaints filed in May and June 2017, by Infratel, Enel, Open Fiber, Vodafone and Wind Tre, and concerns a presumed abuse of
TIMs dominant position in the market for wholesale access services and for retail services using the broadband and ultrabroadband fixed network. In particular, the ICA hypothesised that TIM had adopted conduct aimed at: i) slowing and
hindering the course of the Infratel tender processes so as to delay, or render less remunerative the entry of another operator in the wholesale market; ii)
pre-emptively
securing customers on the retail
market for ultrabroadband services by means of commercial policies designed to restrict the space of customer contendibility remaining for the competitor operators. After the start of the proceedings, the Authoritys officials carried out an
inspection at some of TIMs offices in the month of July 2017. The proceedings, within which the Company will be upholding all its arguments to support the correctness of its work, must be concluded by 31 October 2018.
For further details on the various proceedings before the regulatory authorities refer to the content of the Main changes in the regulatory
framework chapter of the Interim Report on Operations as of 30 September 2017 of the TIM Group.
VODAFONE
(I-761)
With a writ of summons before the Milan Court, Vodafone has sued TIM and some network companies, bringing claims for compensation from the Company for around
193 million euros for damages arising from alleged anti-competitive conduct censured in the known ICA case
I-761
(on corrective maintenance) referring to the period from 2011 to 2017.
Vodafone contests the alleged breach of the competition rules carried out by TIM, in the wholesale markets giving access to its fixed network (LLU lines;
Bitstream; WLR), through the abuse of a dominant market position and an unlawful agreement with the maintenance companies to maintain the monopoly on the offer of corrective maintenance services on its network. In particular this restrictive
agreement would have concerned the coordination, by the Company, of the financial conditions contained in the offers formulated by the aforementioned companies with respect to the OLOs, for the maintenance service, at artificially high prices with
respect to the cost of the maintenance included in the regulated access subscription charge, in order to make it seem as if the unbundling of the service itself were not convenient. The Company filed an appearance, contesting all of the other
partys requests.
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 11
Contingent liabilities, other information
|
|
|
94
|
|
TELEUNIT
With a writ of summons before the Rome Court,
Teleunit has claimed 35.4 million euros in compensation from TIM, based on the known decision of the Italian Competition Authority that settled the A428 case. Specifically, the other party complained that in the period 2009/2010 it had suffered
abusive conduct on TIMs part in the form of technical boycotting (refusals to activate network access servicesKOs), and anticompetitive practices in the form of margin squeezing (excessive squeezing of discount margins, 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 TIM 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. TIM 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. TIM filed an appearance in the reinstated proceedings challenging the
plaintiffs claims.
In its judgement of May 2017, the Milan Court rejected Teleunits claim in its entirety, and ordered the company to pay the
legal costs of the case. This judgement was appealed by Teleunit, in June 2017, before the Milan Court of Appeal. The Company will file an appeal challenging the arguments presented by the other party and asking that the judgement in the first
instance be fully confirmed.
SKY
TIM has started civil proceedings against SKY Italia in the Milan Court, asking the court to void the contract signed by the two companies in April 2014 for
the delivery and marketing, between 2015 and 2019, of the SKY IPTV (Internet Protocol Television) offer on the TIM IPTV platform, due to abuse of dominant position by the other party.
As an alternative, the Company also asked the court to reduce to a fair level the amounts demanded by SKY by way of the
so-called
Guaranteed Minimums (penalties) established to SKYs advantage and related to predetermined customer
sign-up
and churn-rate thresholds in the
five years of the partnership.
SKY filed an appearance in February 2017, challenging TIMs claim and demanding payment of the Guaranteed Minimums it
claimed to have accrued, a request which was opposed by the Company. The proceedings are ongoing: the next hearing is scheduled for the month of May 2018.
Investigation by the Monza Public Prosecutors Office
Criminal charges have recently been brought before
the Monza Court regarding a number of transactions for the leasing and/or sale of assets. At the end of the preliminary hearing, the judge ordered a former employee of the Company to be committed for trial on charges of aggravated fraud and tax
crimes, and, at the same time, declared that the statute of limitations applied to other charges; at the start of the trial, the Court declared that all the remaining offences were statute-barred. As part of these proceedings TIM, which had 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.
BrazilOpportunity Arbitration
In May 2012, TIM 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 engaged in by former employees of TIM.
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.
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 11
Contingent liabilities, other information
|
|
|
95
|
|
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.
In April
2017 the Opportunity group filed an appeal against the arbitration award before the Court of Appeal of Paris.
Formal Notice of Assessments against TIM
S.p.A.
On 29 October 2015 the Guardia di
Finanza concluded a tax investigation into TIM S.p.A., started in 2013, regarding the years 2007 to 2014. The formal notice of assessment (Processo Verbale di Costatazione, or PVC) contained two substantial findings. The first relates to the
presumed
non-debiting
of royalties to the companys indirect subsidiary Tim Brasil, for the use of the TIM brand. The second regards the alleged
non-application
of withholding tax on interest paid to subsidiary Telecom Italia Capital S.A.
In this regard, on
the basis of the aforementioned formal notice of assessment, the Milan Revenues Agency in December 2015 served assessment notices on the company for the 2010 tax year, and in December 2016 it served assessment notices for the tax years 2007 and
2011.
While believing, on the basis of opinions issued by established professionals, that it has acted correctly in fulfilling all its tax obligations,
the Company has attempted to come to an agreement with the Revenues Agency. Having failed to reach an agreement, as already occurred for the 2010 tax year, the Company has lodged an appeal with the Provincial Tax Commission against the verification
notices relating to the 2007 and 2011 tax years too, in any event without excluding the possibility of coming to a judicial settlement with the Revenues Agency, with the object of closing the disputes in
pre-litigation
proceedings, for these and the other tax years.
B) OTHER INFORMATION
With reference to the cases listed below no significant facts have emerged with respect to that published in the 2016 Annual Report:
|
|
|
Dispute concerning the license fees for 1998;
|
|
|
|
Vodafone (previously TELETU),
|
Mobile telephonycriminal proceedings
In March 2012 TIM 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 TIM.
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 TIMs total lack of involvement in the offences claimed.
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 11
Contingent liabilities, other information
|
|
|
96
|
|
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 TIM) 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 TIM 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 totalling several million euros), based on the assumption that TIM 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. In November 2016 the Court gave a verdict acquitting the Company on the grounds that there was no case to answer. All the individuals charged were also acquitted on various
grounds. The acquittal judgement is not final, as it was challenged in April 2017 by the Public Prosecutor who sought appeal before the Court of Cassation.
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 11
Contingent liabilities, other information
|
|
|
97
|
|
NOTE 12
SEGMENT REPORTING
A) SEGMENT REPORTING
Segment reporting is based on the following operating segments:
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 12
Segment reporting
|
|
|
98
|
|
Separate Consolidated Income Statements by Operating Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
|
Brazil
|
|
|
Other
Operations
|
|
|
Adjustments
and
eliminations
|
|
|
Consolidated
Total
|
|
(millions of euros)
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
Third-party revenues
|
|
|
11,291
|
|
|
|
11,011
|
|
|
|
3,388
|
|
|
|
2,920
|
|
|
|
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
14,679
|
|
|
|
13,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intragroup revenues
|
|
|
21
|
|
|
|
25
|
|
|
|
1
|
|
|
|
2
|
|
|
|
|
|
|
|
2
|
|
|
|
(22
|
)
|
|
|
(29
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues by operating segment
|
|
|
11,312
|
|
|
|
11,036
|
|
|
|
3,389
|
|
|
|
2,922
|
|
|
|
|
|
|
|
10
|
|
|
|
(22
|
)
|
|
|
(29
|
)
|
|
|
14,679
|
|
|
|
13,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
284
|
|
|
|
148
|
|
|
|
32
|
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
316
|
|
|
|
165
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating revenues and other income
|
|
|
11,596
|
|
|
|
11,184
|
|
|
|
3,421
|
|
|
|
2,938
|
|
|
|
|
|
|
|
10
|
|
|
|
(22
|
)
|
|
|
(28
|
)
|
|
|
14,995
|
|
|
|
14,104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of goods and services
|
|
|
(4,518
|
)
|
|
|
(4,210
|
)
|
|
|
(1,675
|
)
|
|
|
(1,511
|
)
|
|
|
(3
|
)
|
|
|
(8
|
)
|
|
|
15
|
|
|
|
19
|
|
|
|
(6,181
|
)
|
|
|
(5,710
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee benefits expenses
|
|
|
(1,937
|
)
|
|
|
(2,046
|
)
|
|
|
(261
|
)
|
|
|
(248
|
)
|
|
|
(5
|
)
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
|
(2,203
|
)
|
|
|
(2,303
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which: accruals to employee severance indemnities
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating expenses
|
|
|
(543
|
)
|
|
|
(401
|
)
|
|
|
(387
|
)
|
|
|
(355
|
)
|
|
|
(4
|
)
|
|
|
(2
|
)
|
|
|
1
|
|
|
|
1
|
|
|
|
(933
|
)
|
|
|
(757
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which: write-downs and expenses in connection with credit management and provision
charges
|
|
|
(378
|
)
|
|
|
(233
|
)
|
|
|
(126
|
)
|
|
|
(109
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(504
|
)
|
|
|
(342
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in inventories
|
|
|
81
|
|
|
|
62
|
|
|
|
(7
|
)
|
|
|
8
|
|
|
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
1
|
|
|
|
74
|
|
|
|
65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internally generated assets
|
|
|
376
|
|
|
|
406
|
|
|
|
79
|
|
|
|
68
|
|
|
|
|
|
|
|
|
|
|
|
6
|
|
|
|
5
|
|
|
|
461
|
|
|
|
479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
5,055
|
|
|
|
4,995
|
|
|
|
1,170
|
|
|
|
900
|
|
|
|
(12
|
)
|
|
|
(15
|
)
|
|
|
|
|
|
|
(2
|
)
|
|
|
6,213
|
|
|
|
5,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
(2,517
|
)
|
|
|
(2,408
|
)
|
|
|
(841
|
)
|
|
|
(708
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,358
|
)
|
|
|
(3,116
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains/(losses) on disposals of
non-current
assets
|
|
|
(1
|
)
|
|
|
(4
|
)
|
|
|
11
|
|
|
|
18
|
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
9
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment reversals (losses) on
non-current
assets
|
|
|
(30
|
)
|
|
|
(8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(30
|
)
|
|
|
(8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT
|
|
|
2,507
|
|
|
|
2,575
|
|
|
|
340
|
|
|
|
210
|
|
|
|
(12
|
)
|
|
|
(15
|
)
|
|
|
(1
|
)
|
|
|
(2
|
)
|
|
|
2,834
|
|
|
|
2,768
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of profits (losses) of associates and joint ventures accounted for using the equity
method
|
|
|
(1
|
)
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expenses) from investments
|
|
|
|
(18
|
)
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
|
|
1,496
|
|
|
|
2,321
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance expenses
|
|
|
|
(2,622
|
)
|
|
|
(2,831
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) before tax from continuing operations
|
|
|
|
1,689
|
|
|
|
2,262
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
(559
|
)
|
|
|
(699
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from continuing operations
|
|
|
|
1,130
|
|
|
|
1,563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) from Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
|
47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) for the period
|
|
|
|
1,130
|
|
|
|
1,610
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
Owners of the Parent
|
|
|
|
1,033
|
|
|
|
1,495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests
|
|
|
|
97
|
|
|
|
115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues by operating segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
|
Brazil
|
|
|
Other
Operations
|
|
|
Adjustments
and
eliminations
|
|
|
Consolidated
Total
|
|
(millions of euros)
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
Revenues from equipment sales - third party
|
|
|
919
|
|
|
|
689
|
|
|
|
163
|
|
|
|
176
|
|
|
|
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
1,082
|
|
|
|
873
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from equipment sales - intragroup
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues from equipment sales
|
|
|
919
|
|
|
|
690
|
|
|
|
163
|
|
|
|
176
|
|
|
|
|
|
|
|
10
|
|
|
|
|
|
|
|
(3
|
)
|
|
|
1,082
|
|
|
|
873
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from services - third party
|
|
|
10,372
|
|
|
|
10,322
|
|
|
|
3,225
|
|
|
|
2,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,597
|
|
|
|
13,066
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from services - intragroup
|
|
|
21
|
|
|
|
24
|
|
|
|
1
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
(22
|
)
|
|
|
(26
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues from services
|
|
|
10,393
|
|
|
|
10,346
|
|
|
|
3,226
|
|
|
|
2,746
|
|
|
|
|
|
|
|
|
|
|
|
(22
|
)
|
|
|
(26
|
)
|
|
|
13,597
|
|
|
|
13,066
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues on construction contracts - third party
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues on construction contracts-intragroup
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues on construction contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total third-party revenues
|
|
|
11,291
|
|
|
|
11,011
|
|
|
|
3,388
|
|
|
|
2,920
|
|
|
|
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
14,679
|
|
|
|
13,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total intragroup revenues
|
|
|
21
|
|
|
|
25
|
|
|
|
1
|
|
|
|
2
|
|
|
|
|
|
|
|
2
|
|
|
|
(22
|
)
|
|
|
(29
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues by operating segment
|
|
|
11,312
|
|
|
|
11,036
|
|
|
|
3,389
|
|
|
|
2,922
|
|
|
|
|
|
|
|
10
|
|
|
|
(22
|
)
|
|
|
(29
|
)
|
|
|
14,679
|
|
|
|
13,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 12
Segment reporting
|
|
|
99
|
|
Purchase of intangible and tangible assets by operating segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
|
Brazil
|
|
|
Other Operations
|
|
|
Adjustments and
eliminations
|
|
|
Consolidated Total
|
|
(millions of euros)
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
Purchase of intangible assets
|
|
|
1,304
|
|
|
|
725
|
|
|
|
331
|
|
|
|
400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,635
|
|
|
|
1,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of tangible assets
|
|
|
1,908
|
|
|
|
1,823
|
|
|
|
383
|
|
|
|
337
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,291
|
|
|
|
2,160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total purchase of intangible and tangible assets
|
|
|
3,212
|
|
|
|
2,548
|
|
|
|
714
|
|
|
|
737
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,926
|
|
|
|
3,285
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which: capital expenditures
|
|
|
3,177
|
|
|
|
2,398
|
|
|
|
704
|
|
|
|
709
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,881
|
|
|
|
3,107
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which: change in financial leasing contracts
|
|
|
35
|
|
|
|
150
|
|
|
|
10
|
|
|
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45
|
|
|
|
178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Headcount by Operating Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
|
Brazil
|
|
|
Other Operations
|
|
|
Consolidated Total
|
|
(number)
|
|
9/30/2017
|
|
|
12/31/2016
|
|
|
9/30/2017
|
|
|
12/31/2016
|
|
|
9/30/2017
|
|
|
12/31/2016
|
|
|
9/30/2017
|
|
|
12/31/2016
|
|
Headcount
|
|
|
50,488
|
|
|
|
51,280
|
|
|
|
9,393
|
|
|
|
9,849
|
|
|
|
80
|
|
|
|
100
|
|
|
|
59,961
|
|
|
|
61,229
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets and liabilities by Operating Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
|
Brazil
|
|
|
Other Operations
|
|
|
Adjustments and
eliminations
|
|
|
Consolidated Total
|
|
(millions of euros)
|
|
9/30/2017
|
|
|
12/31/2016
|
|
|
9/30/2017
|
|
|
12/31/2016
|
|
|
9/30/2017
|
|
|
12/31/2016
|
|
|
9/30/2017
|
|
|
12/31/2016
|
|
|
9/30/2017
|
|
|
12/31/2016
|
|
Non-current
operating assets
|
|
|
48,260
|
|
|
|
47,428
|
|
|
|
7,062
|
|
|
|
7,711
|
|
|
|
4
|
|
|
|
5
|
|
|
|
1
|
|
|
|
1
|
|
|
|
55,327
|
|
|
|
55,145
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current operating assets
|
|
|
4,817
|
|
|
|
4,472
|
|
|
|
995
|
|
|
|
1,209
|
|
|
|
(3
|
)
|
|
|
16
|
|
|
|
(4
|
)
|
|
|
(1
|
)
|
|
|
5,805
|
|
|
|
5,696
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating assets
|
|
|
53,077
|
|
|
|
51,900
|
|
|
|
8,057
|
|
|
|
8,920
|
|
|
|
1
|
|
|
|
21
|
|
|
|
(3
|
)
|
|
|
|
|
|
|
61,132
|
|
|
|
60,841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments accounted for using the equity method
|
|
|
17
|
|
|
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17
|
|
|
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operations/Non-current
assets
held for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated assets
|
|
|
|
6,747
|
|
|
|
9,587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
|
67,896
|
|
|
|
70,446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating liabilities
|
|
|
8,790
|
|
|
|
8,968
|
|
|
|
1,610
|
|
|
|
2,397
|
|
|
|
50
|
|
|
|
57
|
|
|
|
(18
|
)
|
|
|
(16
|
)
|
|
|
10,432
|
|
|
|
11,406
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities directly associated with Discontinued
operations/Non-current
assets held for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated liabilities
|
|
|
|
33,405
|
|
|
|
35,487
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
24,059
|
|
|
|
23,553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Equity and Liabilities
|
|
|
|
67,896
|
|
|
|
70,446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
|
9 months to
9/30/2017
|
|
|
9 months to
9/30/2016
|
|
|
9/30/ 2017
|
|
|
12/31/ 2016
|
|
Italy
|
|
|
(a
|
)
|
|
|
11,054
|
|
|
|
10,767
|
|
|
|
10,364
|
|
|
|
10,033
|
|
|
|
48,017
|
|
|
|
46,948
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outside Italy
|
|
|
(b
|
)
|
|
|
3,625
|
|
|
|
3,172
|
|
|
|
4,315
|
|
|
|
3,906
|
|
|
|
7,310
|
|
|
|
8,197
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
(a+b
|
)
|
|
|
14,679
|
|
|
|
13,939
|
|
|
|
14,679
|
|
|
|
13,939
|
|
|
|
55,327
|
|
|
|
55,145
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C) INFORMATION ABOUT MAJOR CUSTOMERS
None of the TIM
Groups customers exceeds 10% of consolidated revenues.
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 12
Segment reporting
|
|
|
100
|
|
NOTE 13
RELATED PARTY TRANSACTIONS AND DIRECTION AND COORDINATION ACTIVITY
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.
Related party transactions, when not dictated by specific laws,
were conducted at arms length. The transactions were carried out in accordance with the internal procedure that contains the rules aimed at ensuring the transparency and fairness of related party transactions, in accordance with Consob
Regulation 17221/2010.
With effect from May 3, 2017, the Board of Directors of TIM amended the Procedure for the management of transactions with
related parties, initially extending its scope on a voluntary basis and then adding the treatment of Vivendi as its Controlling Entity, from June 1, 2017. In addition, on September 13, 2017, Consob communicated that it considered
that Vivendi exercises
de facto
control over TIM pursuant to Article 2359 of the Italian Civil Code and Article 93 of the Consolidated Law on Finance, and pursuant to the related party regulations. Although it expressed its intention to
challenge the decision, the Board of Directors ensured full compliance with the rules resulting from this classification, also amending the aforementioned Procedure as a consequence (on September 28, 2017); the latest version is available for
consultation on the website www.telecomitalia.com, About Us section Governance System.
In the meantime, on July 27,
2017, the Board of Directors also acknowledged the start of direction and coordination by Vivendi. On August 4, 2017, in response to a request from Consob, the Company specified that this acknowledgment had taken place, following the statements
made to the Board of Directors by the Executive Chairman, also in his capacity as Chief Executive Officer of the Vivendi group, in the light of two specific circumstances:
(5)
|
on the one hand, the strengthening of the Companys management team with the arrival in TIM of a senior executive from the Vivendi group, aimed, among other things, at achieving greater coordination between the
industrial and commercial activities of the various companies, as part of the current strategic plan; and
|
(6)
|
on the other hand, the JV between TIM and Canal+, as another equally indicative sign of the desire to establish a form of coordination between the two groups in the multimedia sector, again within the context of the
current strategic plan.
|
On October 20, 2017, the Board of Directors of TIM examined and approved the binding term sheet
by
majority vote for the creation of a joint venture with Canal+.
This transaction constitutes a related party transaction, because Canal+ International
S.A.S. is a subsidiary of Vivendi S.A., already classed by Consob as the
de facto
Controlling Entity of TIM: this is a minor transaction in accordance with the parameters established by the relevant Consob Regulation. As such, it was
submitted to the Control and Risk Committee for its recommendation, which voted in favor by majority, with motivated vote against by two board members. The Committee voted unanimously in favor, however, with regard to considering future transactions
of the joint venture as transactions of TIM, for the application of the company procedure for performing transactions with related parties.
Lastly, you
are reminded that:
(7)
|
up to May 4, 2017, the shareholders of the company Telco (the Generali, Intesa Sanpaolo, Mediobanca, and
Telefonica groups), were also considered related parties of TIM, based on the provision of TIMs procedure for the management of transactions with related parties according to which it applies also to the participants in significant
shareholder agreements according to Article 122 of the Consolidated Law
|
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 13
Related party transactions and
direction and coordination activity
|
|
|
101
|
|
|
on Finance, which govern the candidacy to the position of Director of the Company, where the majority of the Directors nominated have been drawn from the list submitted. The members of the
Board of Directors of TIM in office up to May 4, 2017 had in fact been drawn from the list originally submitted by the shareholder Telco. With the reappointment of the Board of Directors, this circumstance no longer applied and the scope of
related parties through Directors was therefore amended;
|
(8)
|
the investment held in the Sofora Telecom Argentina group, classified under Discontinued
operations/Non-current
assets held for sale starting from the consolidated
financial statements at December 31, 2013, was sold on March 8, 2016.
|
The effects on the individual line items of the separate
consolidated income statements for the first nine months of 2017 and 2016 are as follows:
SEPARATE CONSOLIDATED INCOME STATEMENT LINE ITEMS 9 MONTHS TO
9/30/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
Total
(a)
|
|
|
Controlling
Entity
|
|
|
Associates,
subsidiaries
of
associates
and joint
ventures
|
|
|
Other
related
parties
(*)
|
|
|
Pension
funds
|
|
|
Key
managers
|
|
|
Total
related
parties
(b)
|
|
|
% of
financial
statement
item
(b/a)
|
|
Revenues
|
|
|
14,679
|
|
|
|
|
|
|
|
3
|
|
|
|
116
|
|
|
|
|
|
|
|
|
|
|
|
119
|
|
|
|
0.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
316
|
|
|
|
|
|
|
|
3
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
7
|
|
|
|
2.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of goods and services
|
|
|
6,181
|
|
|
|
|
|
|
|
15
|
|
|
|
136
|
|
|
|
|
|
|
|
|
|
|
|
151
|
|
|
|
2.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee benefits expenses
|
|
|
2,203
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
62
|
|
|
|
33
|
|
|
|
96
|
|
|
|
4.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
|
1,496
|
|
|
|
|
|
|
|
|
|
|
|
40
|
|
|
|
|
|
|
|
|
|
|
|
40
|
|
|
|
2.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance expenses
|
|
|
2,622
|
|
|
|
|
|
|
|
9
|
|
|
|
92
|
|
|
|
|
|
|
|
|
|
|
|
101
|
|
|
|
3.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
Vivendi group and Companies belonging to the group that it belongs to; other related parties through directors, statutory auditors and key managers.
|
SEPARATE CONSOLIDATED INCOME STATEMENT LINE ITEMS 9 MONTHS TO 9/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
Total
(a)
|
|
|
Associates,
subsidiaries
of associates
and joint
ventures
|
|
|
Other
related
parties
(*)
|
|
|
Pension
funds
|
|
|
Key managers
|
|
|
Total
related
parties
|
|
|
Transactions
of
Discontinued
Operations
|
|
|
Total related
parties net
of
Discontinued
Operations
(b)
|
|
|
% of
financial
statement
item
(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.
|
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 13
Related party transactions and
direction and coordination activity
|
|
|
102
|
|
The effects on the individual line items of the consolidated statements of financial position at
September 30, 2017 and at December 31, 2016 are as follows:
CONSOLIDATED STATEMENT OF FINANCIAL POSITION LINE ITEMS AT 9/30/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
Total
(a)
|
|
|
Controlling
Entity
|
|
|
Associates,
subsidiaries
of
associates
and joint
ventures
|
|
|
Other
related
parties
(*)
|
|
|
Pension
funds
|
|
|
Total
related
parties
(b)
|
|
|
% of
financial
statement
item
(b/a)
|
|
Net financial debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
financial assets
|
|
|
(1,916
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities other than investments (current assets)
|
|
|
(1,043
|
)
|
|
|
|
|
|
|
|
|
|
|
(15
|
)
|
|
|
|
|
|
|
(15
|
)
|
|
|
1.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial receivables and other current financial assets
|
|
|
(463
|
)
|
|
|
|
|
|
|
|
|
|
|
(44
|
)
|
|
|
|
|
|
|
(44
|
)
|
|
|
9.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
(2,519
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial assets
|
|
|
(4,025
|
)
|
|
|
|
|
|
|
|
|
|
|
(59
|
)
|
|
|
|
|
|
|
(59
|
)
|
|
|
1.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
financial liabilities
|
|
|
28,592
|
|
|
|
|
|
|
|
|
|
|
|
220
|
|
|
|
|
|
|
|
220
|
|
|
|
0.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial liabilities
|
|
|
4,307
|
|
|
|
|
|
|
|
|
|
|
|
115
|
|
|
|
|
|
|
|
115
|
|
|
|
2.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net financial debt
|
|
|
26,958
|
|
|
|
|
|
|
|
|
|
|
|
276
|
|
|
|
|
|
|
|
276
|
|
|
|
1.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other statement of financial position line items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and miscellaneous receivables and other current assets
|
|
|
5,472
|
|
|
|
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
14
|
|
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and miscellaneous payables and other current liabilities
|
|
|
6,727
|
|
|
|
|
|
|
|
8
|
|
|
|
34
|
|
|
|
26
|
|
|
|
68
|
|
|
|
1.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
Vivendi group and Companies belonging to the group that it belongs to; other related parties through directors, statutory auditors and key managers.
|
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 13
Related party transactions and
direction and coordination activity
|
|
|
103
|
|
CONSOLIDATED STATEMENT OF FINANCIAL POSITION LINE ITEMS AT 12/31/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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)
|
|
Net financial debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
financial assets
|
|
|
(2,698
|
)
|
|
|
(12
|
)
|
|
|
(520
|
)
|
|
|
|
|
|
|
(532
|
)
|
|
|
|
|
|
|
(532
|
)
|
|
|
19.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities other than investments (current assets)
|
|
|
(1,519
|
)
|
|
|
|
|
|
|
(110
|
)
|
|
|
|
|
|
|
(110
|
)
|
|
|
|
|
|
|
(110
|
)
|
|
|
7.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial receivables and other current financial assets
|
|
|
(389
|
)
|
|
|
|
|
|
|
(22
|
)
|
|
|
|
|
|
|
(22
|
)
|
|
|
|
|
|
|
(22
|
)
|
|
|
5.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
(3,964
|
)
|
|
|
|
|
|
|
(621
|
)
|
|
|
|
|
|
|
(621
|
)
|
|
|
|
|
|
|
(621
|
)
|
|
|
15.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial assets
|
|
|
(5,872
|
)
|
|
|
|
|
|
|
(753
|
)
|
|
|
|
|
|
|
(753
|
)
|
|
|
|
|
|
|
(753
|
)
|
|
|
12.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current
financial liabilities
|
|
|
30,469
|
|
|
|
|
|
|
|
912
|
|
|
|
|
|
|
|
912
|
|
|
|
|
|
|
|
912
|
|
|
|
3.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current financial liabilities
|
|
|
4,056
|
|
|
|
|
|
|
|
133
|
|
|
|
|
|
|
|
133
|
|
|
|
|
|
|
|
133
|
|
|
|
3.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net financial debt
|
|
|
25,955
|
|
|
|
(12
|
)
|
|
|
(228
|
)
|
|
|
|
|
|
|
(240
|
)
|
|
|
|
|
|
|
(240
|
)
|
|
|
(0.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other statement of financial position line items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and miscellaneous receivables and other current assets
|
|
|
5,426
|
|
|
|
9
|
|
|
|
127
|
|
|
|
|
|
|
|
136
|
|
|
|
|
|
|
|
136
|
|
|
|
2.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Miscellaneous payables and other
non-current
liabilities
|
|
|
1,607
|
|
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
2
|
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and miscellaneous payables and other current liabilities
|
|
|
7,646
|
|
|
|
37
|
|
|
|
200
|
|
|
|
26
|
|
|
|
263
|
|
|
|
|
|
|
|
263
|
|
|
|
3.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
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.
|
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 13
Related party transactions and
direction and coordination activity
|
|
|
104
|
|
The effects on the significant line items of the consolidated statements of cash flows for the first nine months
of 2017 and 2016 are shown below:
CONSOLIDATED STATEMENT OF CASH FLOWS LINE ITEMS 9 MONTHS TO 9/30/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
Total
(a)
|
|
|
Controlling
Entity
|
|
|
Associates,
subsidiaries
of
associates
and joint
ventures
|
|
|
Other
related
parties
(*)
|
|
|
Pension
funds
|
|
|
Total
related
parties
(b)
|
|
|
% of
financial
statement
item
(b/a)
|
|
Purchase of intangible and tangible assets on an accrual basis
|
|
|
3,926
|
|
|
|
|
|
|
|
123
|
|
|
|
|
|
|
|
|
|
|
|
123
|
|
|
|
3.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
Vivendi group and Companies belonging to the group that it belongs to; other related parties through directors, statutory auditors and key managers.
|
CONSOLIDATED STATEMENT OF CASH FLOWS LINE ITEMS 9 MONTHS TO 9/30/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
|
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.
|
The shareholder loan with the joint venture Alfiere S.p.A. in place at December 31, 2016 was increased by 3 million euros in the first nine months
of 2017 and subsequently converted into an equity interest amounting to 6 million euros. The remaining amount, of 9 million euros, was fully written down.
At September 30, 2017, TIM S.p.A. had issued guarantees in favor of Alfiere S.p.A. for 1 million euros.
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 13
Related party transactions and
direction and coordination activity
|
|
|
105
|
|
REMUNERATION TO KEY MANAGERS
In the first nine months of 2017,
the total remuneration recorded on an accrual basis by TIM or by subsidiaries of the Group in respect of Key Managers amounted to 32.9 million euros (30.8 million euros in the first nine months of 2016), detailed as follows:
|
|
|
|
|
|
|
|
|
(millions of euros)
|
|
9 months to 9/30/
2017
|
|
|
9 months to 9/30/
2016
|
|
Short-term remuneration
|
|
|
7.6
|
|
|
|
10.1
|
|
|
|
|
|
|
|
|
|
|
Long-term remuneration
|
|
|
|
|
|
|
1.3
|
|
|
|
|
|
|
|
|
|
|
Employment termination benefit incentives
|
|
|
25.0
|
|
|
|
12.0
|
|
|
|
|
|
|
|
|
|
|
Share-based payments (*)
|
|
|
0.3
|
|
|
|
7.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.9
|
|
|
|
30.8
|
|
|
|
|
|
|
|
|
|
|
(*)
|
These refer to the fair value of the rights, accrued to September 30, under the share-based incentive plans of TIM S.p.A. and its subsidiaries (2014/2016 Stock Option Plan, Special Award, 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 employment termination benefit incentives for the first nine months of 2017 related to the amount awarded as
a settlement to Flavio Cattaneo and did not include the reversal, totaling 10.3 million euros, of the accruals made in 2016 for the Special Award.
The share-based payments for the first nine months of 2016, did not include the effects of the reversal of the accruals related to the costs for the 2014/2016
Stock Option Plan of
-3.0 million
euros.
In the first nine months of 2017, the contributions paid in to
defined contribution plans (Assida and Fontedir) by TIM S.p.A. or by subsidiaries of the Group on behalf of key managers amounted to 73,000 euros (72,000 euros for the first nine months of 2016).
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 13
Related party transactions and
direction and coordination activity
|
|
|
106
|
|
In the first nine months of 2017, 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 TIM Group, including directors, are the following:
|
|
|
|
|
|
|
Directors:
|
|
|
|
|
|
|
Arnaud Roy de Puyfontaine
|
|
|
(1
|
)
|
|
Executive Chairman of TIM S.p.A.
|
Giuseppe Recchi
|
|
|
(2
|
)
|
|
Executive Chairman of TIM S.p.A.
|
|
|
|
(3
|
)
|
|
Deputy Executive Chairman of TIM S.p.A.
|
Flavio Cattaneo
|
|
|
(4
|
)
|
|
Managing Director and Chief Executive Officer of TIM S.p.A.
|
|
|
|
(5
|
)
|
|
General Manager of TIM S.p.A.
|
Amos Genish
|
|
|
(3
|
)
|
|
Managing Director and Chief Executive Officer of TIM S.p.A.
|
|
|
|
(3
|
)
|
|
General Manager of TIM S.p.A.
|
Managers:
|
|
|
|
|
|
|
Stefano De Angelis
|
|
|
|
|
|
Diretor Presidente Tim Participações S.A.
|
Stefano Azzi
|
|
|
|
|
|
Head of Consumer & Small Enterprise
|
Stefano Ciurli
|
|
|
|
|
|
Head of Wholesale
|
Giovanni Ferigo
|
|
|
|
|
|
Head of Technology
|
Lorenzo Forina
|
|
|
|
|
|
Head of Business & Top Clients
|
Francesco Micheli
|
|
|
(6
|
)
|
|
Head of Human Resources & Organizational Development
|
Cristoforo Morandini
|
|
|
|
|
|
Head of Regulatory Affairs and Equivalence
|
Agostino Nuzzolo
|
|
|
(7
|
)
|
|
Head of Corporate Legal Affairs
|
Piergiorgio Peluso
|
|
|
|
|
|
Head of Administration, Finance and Control
|
|
|
|
(8
|
)
|
|
Head of Business Support Office
|
(3)
|
from September 28, 2017;
|
(6)
|
responsibility for the Human Resources & Organizational Development function has been assigned on an interim basis to the Head of Group Special Projects, Francesco Micheli;
|
(7)
|
from January 10, 2017;
|
(8)
|
the responsibility for the Business Support Office function has been assigned on an interim basis to the Chief Financial Officer of the Company, Piergiorgio Peluso.
|
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 13
Related party transactions and
direction and coordination activity
|
|
|
107
|
|
DIRECTION AND COORDINATION ACTIVITY
Below is a summary of the
key figures taken from the latest approved financial statements of the Company exercising Direction and Coordination.
|
|
|
|
|
|
|
|
|
VIVENDI S.A. -
42 Avenue de Friedland - PARIS
|
|
|
|
|
12/31/2016
|
|
(millions of euros)
|
|
|
|
|
|
|
STATEMENTS OF FINANCIAL POSITION
|
|
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
20,196.0
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
6,878.4
|
|
|
|
|
|
|
|
|
|
|
Deferred charges
|
|
|
|
|
|
|
9.5
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
|
|
|
|
27,083.9
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
18,854.8
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
7,079.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserves
|
|
|
9,804.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retained earnings (Accumulated losses), including profit (loss) for the year
|
|
|
1,970.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provisions
|
|
|
|
|
|
|
809.3
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
7,392.5
|
|
|
|
|
|
|
|
|
|
|
Unrealized foreign exchange gains
|
|
|
|
|
|
|
27.3
|
|
|
|
|
|
|
|
|
|
|
TOTAL EQUITY AND LIABILITIES
|
|
|
|
|
|
|
27,083.9
|
|
|
|
|
|
|
|
|
|
|
STATEMENT OF EARNINGS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
46.0
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
|
|
|
|
(110.4
|
)
|
|
|
|
|
|
|
|
|
|
Net financial income
|
|
|
|
|
|
|
862.1
|
|
|
|
|
|
|
|
|
|
|
Earnings from ordinary operations before tax
|
|
|
|
|
|
|
751.7
|
|
|
|
|
|
|
|
|
|
|
Net exceptional items
|
|
|
|
|
|
|
802.1
|
|
|
|
|
|
|
|
|
|
|
Income tax (charge)/credit
|
|
|
|
|
|
|
55.7
|
|
|
|
|
|
|
|
|
|
|
Earnings for the year
|
|
|
|
|
|
|
1,609.5
|
|
|
|
|
|
|
|
|
|
|
For more details see the financial information available on the website of the Controlling Entity www.vivendi.com, Investor
Analyst channel.
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 13
Related party transactions and
direction and coordination activity
|
|
|
108
|
|
NOTE 14
EVENTS SUBSEQUENT TO SEPTEMBER 30, 2017
BOND ISSUE
On October 12, 2017, TIM S.p.A. issued a bond of 1.25 billion euros, maturing October 12, 2027, with a coupon of 2.375%, issue price of 99.185%,
and redemption price of 100.000%.
The effective yield at maturity is 2.468%, corresponding to a yield of 157 basis points above the reference rate (mid
swap).
The issue is part of the process of optimizing and refinancing the maturing debt.
The bonds were issued under the EMTN program of 20 billion euros and are listed on the Luxembourg stock exchange.
GOLDEN POWER MEASURE
On October 16, 2017, the
Parent received notification of the measure through which the Presidency of the Council of Ministers exercised the special powers laid down in article 1 of the Golden Power Decree (special powers in security and national defense sectors) by imposing
specific requirements and conditions.
TIM S.p.A. acknowledged that the measures involve governance and organization, a part of which have already been
implemented by the company. In particular, the Presidency of the Council of Ministers ordered that TIM, Sparkle and Telsy give the mandate for the functions relating to company activities deemed significant for national security to a member of the
Board of Directors of each of the aforementioned companies who is an Italian citizen, has security clearance, and is approved by the Government for the role. The mandate must include responsibility for a special organizational unit (Security
Organization) in charge of the relevant activities.
The aforementioned organizational unit, which must be involved in the governance processes and in
particular in all decision-making processes pertaining to strategic activities and the network, must be entrusted to a security officer chosen from a shortlist of three names proposed by the Department of Information Security of the Presidency of
the Council of Ministers.
Each of the companies mentioned above must provide prior information on every and all decisions that may reduce or transfer
technological, operating, and industrial capacity in the strategic activities.
The Company is examining the measure and has a
90-day
term to comply with the various requirements. Thereafter, on a half-yearly basis, it will be required to send a report detailing the measures it has adopted to comply with the various requirements.
On November 2, 2017, the Company received notification of the measure through which the Presidency of the Council of Ministers had exercised the special
powers laid down in Article 2 of the Golden Power Decree (special powers in energy, transport and communications sectors) by imposing specific requirements and conditions.
The Company has acknowledged that these are measures relating to the development, investment and maintenance programs for its networks and systems in order to
preserve their functional operation and integrity, as well as the obligation to notify any company action that may have an impact on their security, availability and functioning. The Company will report annually on compliance with the requirements.
|
|
|
|
|
|
|
TIM Group Condensed Consolidated Financial Statements at
September 30, 2017
|
|
Note 14
Events Subsequent to September 30, 2017
|
|
|
109
|
|
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, Article
154-bis
of the Consolidated Law on Finance, that the accounting disclosures contained in the Interim Management Report at September 30, 2017 of the TIM Group correspond to the Companys documents,
accounting records and entries.
The Manager Responsible for Preparing
the Companys Financial Reports
Piergiorgio Peluso
|
|
|
|
|
|
|
Interim Management Report at
September
30, 2017
|
|
Alternative Performance Measures
|
|
|
110
|
|
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, 2017 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 2017-2019 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.
111
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 24, 2017
|
|
|
|
|
TELECOM ITALIA S.p.A.
|
|
|
BY:
|
|
/s/ Umberto Pandolfi
|
|
|
Umberto Pandolfi
|
|
|
Company Manager
|
112
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