Net financial debt
Net financial debt and changes in the period are detailed in the table below.
|Millions of euro|
|at Dec. 31, 2016||at Dec. 31, 2015||Change|
|- bank borrowings||7,446||6,863||583||8.5%|
|- other borrowings||1,489||2,022||(533)||-26.4%|
|Long-term financial receivables and securities||(2,621)||(2,335)||(286)||12.2%|
|Net long-term debt||38,715||42,537||(3,822)||-9.0%|
|- short-term portion of long-term bank borrowings||749||844||(95)||-11.3%|
|- other short-term bank borrowings||909||180||729||-|
|Short-term bank borrowings||1,658||1,024||634||61.9%|
|Bonds (short-term portion)||3,446||4,570||(1,124)||-24.6%|
|Other borrowings (short-term portion)||189||319||(130)||-40.8%|
|Cash collateral on derivatives and other financing||1,286||1,698||(412)||-24.3%|
|Other short-term financial payables (1)||414||64||350||-|
|Other short-term debt||8,394||6,864||1,530||22.3%|
|Long-term financial receivables (short-term portion)||(767)||(769)||2||0.3%|
|Financial receivables - cash collateral||(1,082)||(1,020)||(62)||-6.1%|
|Other short-term financial receivables||(911)||(304)||(607)||-|
|Cash and cash equivalents with banks and short-term securities||(8,326)||(10,640)||2,314||21.7%|
|Cash and cash equivalents and short-term financial receivables||(11,214)||(12,880)||1,666||12.9%|
|Net short-term debt||(1,162)||(4,992)||3,830||76.7%|
|NET FINANCIAL DEBT||37,553||37,545||8||-|
|Net financial debt of “Assets held for sale”||-||841||(841)||-|
(1) Includes current financial payables included in other current financial liabilities.
Net financial debt amounted to €37,553 million at December 31, 2016, an increase of €8 million on December 31, 2015.
More specifically, net long-term debt fell by €3,822 million, the joint effect of an increase in long-term financial receivables of €286 million and a decline in gross debt of €3,536 million.
With regard to the latter aggregate:
- bank borrowings amounted to €7,446 million, an increase of €583 million due mainly to drawings on bank financing by the Latin American companies and by Enel Russia and EIB loans by a number of Italian companies, partly offset by the reclassification to short term of amounts falling due within 12 months;
- bonds amounted to €32,401 million, a decrease of €3,586 million on the end of 2015, mainly reflecting:
- the repurchase by Enel SpA of its own bonds in the total amount of €750 million as part of its broader liability management activities;
- the reclassification to short term of the current portion of bonds maturing within the next 12 months, of which €909 million in respect of a fixed-rate bond issued by Enel SpA maturing in June 2017, €637 million in respect of a fixed-rate bond issued by Enel Finance International falling due in July 2017, a fixed-rate bond denominated in US dollars issued by Enel Finance International Report on operations 37 with a value of €1,423 million falling due in September 2017 and €378 million in respect of issues in local currencies by the Latin American companies;
- the non-binding exchange offer made in May 2016 by Enel Finance International involving the repurchase of bonds totaling €1,074 million and the concomitant issue of a senior fixed-rate note with a nominal value of €1,257 million maturing in June 2026;
- new issues in 2016 by the Latin American companies, including a fixed-rate bond denominated in US dollars issued by Enel Américas with a value at December 31, 2016 of €569 million, maturing in October 2026;
- exchange rate gains during the year in the amount of about €307 million on bonds (including the current portion).
Net short-term debt showed a creditor position of €1,162 million at December 31, 2016, a decrease of €3,830 million on the end of 2015, the result of the increase in other short-term borrowings of €1,530 million and in short-term bank borrowings of €634 million, and a decrease in cash and cash equivalents and short-term financial receivables in the amount of €1,666 million.
Other short-term debt, totaling €8,394 million, includes commercial paper issued by Enel Finance International and International Endesa BV amounting to €3,059 million, as well as bonds maturing within 12 months amounting to €3,446 million.
Finally, cash collateral paid to counterparties in over-thecounter derivatives transactions on interest rates, exchange rates and commodities totaled €1,082 million, while cash collateral received from such counterparties amounted to €1,286 million.
Cash and cash equivalents and short-term financial receivables came to €11,214 million, down €1,666 million compared with the end of 2015, mainly reflecting the decrease in cash with banks and short-term securities in the amount of €2,314 million, partly offset by an increase in other shortterm financial receivables for €607 million, as well as the increase in cash collateral paid to counterparties in over-the counter derivatives transactions on interest rates, exchange rates and commodities of €62 million.
The main transactions carried out in 2016 included:
- the agreement, on July 15, 2016, of a 4-year credit facility of €500 million between Enel SpA and UniCredit SpA; at December 31, 2016, that facility was drawn in the amount of €50 million;
- the issue, on October 25, 2016, of a 10-year fixed-rate bond denominated in US dollars by Enel Américas, with a value of €588 million at December 31, 2016;
- the following bond repayments:
- €1,000 million in respect of a floating-rate bond, issued by Enel SpA in 2010, maturing in February 2016;
- €2,000 million in respect of a fixed-rate bond, issued by Enel SpA in 2010, maturing in February 2016;
- €1,080 million in respect of a fixed-rate bond, issued by Enel Finance International in 2009, maturing in September 2016.
|Millions of euro|
|Cash and cash equivalents at the beginning of the period (1)||10,790||13,255||(2,465)|
|Cash flows from operating activities||9,847||9,572||275|
|Cash flows from investing/disinvesting activities||(8,087)||(6,421)||(1,666)|
|Cash flows from financing activities||(4,474)||(5,382)||908|
|Effect of exchange rate changes on cash and cash equivalents||250||(234)||484|
|Cash and cash equivalents at the end of the period (2)||8,326||10,790||(2,464)|
(1) Of which cash and cash equivalents equal to €10,639 million at January 1, 2016 (€13,088 million at January 1, 2015), short-term securities equal to €1 million at January 1, 2016 (€140 million at January 1, 2015) and cash and cash equivalents pertaining to assets held for sale equal to €150 million at January 1, 2016 (€27 million at January 1, 2015).
(2) Of which cash and cash equivalents equal to €8,290 million at December 31, 2016 (€10,639 million at December 31, 2015), short-term securities equal to €36 million at December 31, 2016 (€1 million at December 31, 2015) and cash and cash equivalents pertaining to assets held for sale equal to €150 million at December 31, 2015.
Cash flows from operating activities in 2016 were a positive €9,847 million, up €275 million compared with 2015, mainly reflecting the optimization of net current assets, which more than offset the increase in the use of funds and in taxes paid.
Cash flows from investing/disinvesting activities in 2016 absorbed funds in the amount of €8,087 million, while in 2015 they had absorbed liquidity totaling €6,421 million.
More specifically, cash requirements in respect of investments in property, plant and equipment and in intangible assets amounted to €8,842 million in 2016, up €1,080 million on the previous year, mainly due to increased investment abroad and in renewable technologies.
Investments in entities or business units, net of cash and cash equivalents acquired, amounted to €382 million in 2016 and primarily regarded capital increases at OpEn Fiber (formerly Enel OpEn Fiber), increasing the interest in the company to 50%, as well as a number of minor transactions (Eléctrica del Ebro and Energía Limpia de Amistad).
In 2016, the disposal of entities and business units, net of cash and cash equivalents sold, generated cash flows of €1,032 million and regarded:
- the disposal of Hydro Dolomiti Enel, which operates in the hydroelectric generation sector in Italy, for €313 million;
- the disposal, in December 2016, of the Cimarron and Lindahl wind farms to Enel Green Power North America Renewable Energy Partners (for €216 million), a vehicle to which plants operating in the United States for which a partnership agreement was reached with General Electric were transferred (and will continue to be transferred);
- the disposal of GNL Quintero, an associate in which the Group held 20%, for €177 million;
- the sale of 50% of Slovak Power Holding, which in turn holds 66% of Slovenské elektrárne, for €139 million;
- the disposal, in May 2016, of 65% of Drift Sand Wind Project, a company operating in the wind generation sector in the United States, for €98 million;
- the sale of Marcinelle Energie, a company operating in the thermal generation sector in Belgium, for a total of €36 million;
- price adjustments for disposals carried out in previous years totaling €60 million.
Cash flows from financing activities absorbed liquidity in the amount of €4,474 million, while in 2015 they showed cash used of €5,382 million. The flow in 2016 is essentially associated with the reduction of net financial debt (the net balance of repayments and new borrowing) in the amount of €1,710 million and the payment of dividends totaling €2,507 million, of which €1,627 million paid to Enel SpA shareholders.
These factors were accompanied by an increase in outlays for transactions involving non-controlling interests in the amount of €257 million. More specifically, the latter essentially include:
- outlays associated with the merger of Endesa Américas and Chilectra Américas into Enel Américas amounting to €329 million, of which €141 million in respect of the public tender offer launched by Enersis Américas for the float of Endesa Américas and €188 million in respect of taxes due following the transaction, mainly paid to tax authorities in Peru;
- the receipt of €132 million for the sale to third parties of minority interests without losing control of a number of companies in the renewables sector in the Unites States (Chisholm View Wind Project and Aurora Distributed Solar).
Accordingly, in 2016, cash flows from operating activities in the amount of €9,847 million only partly covered the cash needs for financing activities in the amount of €4,474 million and for investing activities totaling €8,087 million. The difference is reflected in the decrease in cash and cash equivalents, which at December 31, 2016 amounted to €8,326 million, compared with €10,790 million at the end of 2015. This decrease also reflects the effect of negative developments in the exchange rates of the various local currencies against the euro, equal to €250 million.