Consolidated interim financial report as at and for the six months ended 30 June 2011

Transcription

1 Consolidated interim financial report as at and for the six months ended 30 June 2011

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3 Contents 1. Introduction... 3 Corporate bodies... 4 Group structure... 6 Consolidated financial highlights... 7 Shareholder structure... 8 Atlantia share price performance Report on operations Consolidated financial review and related party transactions Financial highlights of the main Group companies Operating review of the Group s operators Traffic Toll charges Network upgrade and modernisation Network operations Operating review of the other main subsidiaries Operating review of the Group s main investee companies Other information Workforce Significant regulatory aspects Events after 30 June Outlook Condensed interim consolidated financial statements Reports

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5 1 Introduction

6 1. Introduction Corporate bodies Board of Directors. in office for Internal Control and Corporate Governance Committee Committee of Independent Directors with responsibility for Related Party Transactions Chairman Chief Executive Officer Directors Secretary Chairman Members Chairman Fabio CERCHIAI Giovanni CASTELLUCCI Gilberto BENETTON Alessandro BERTANI Alberto BOMBASSEI (independent) Stefano CAO Roberto CERA Alberto CLÔ (independent) Antonio FASSONE Carlo MALINCONICO (independent) Giuliano MARI (independent) Gianni MION Giuseppe PIAGGIO Antonino TURICCHI (independent) Paolo ZANNONI Andrea GRILLO Giuseppe PIAGGIO Giuliano MARI (independent) Antonino TURICCHI (independent) Giuliano MARI (independent) Alberto BOMBASSEI (*) (independent) Alberto CLÔ (**) (independent) Carlo MALINCONICO (independent) 4

7 Corporate bodies Human Resources Committee Chairman Alberto BOMBASSEI (*) (independent) Members Stefano CAO Alberto CLÔ (independent) Carlo MALINCONICO (**) (independent) Giuseppe PIAGGIO Paolo ZANNONI Supervisory Board Chairman Renato GRANATA Members Simone BONTEMPO Pietro FRATTA Ethics Officer Coordinator Giuseppe LANGER Giulio BARREL Enzo SPOLETINI Board of Statutory Auditors. for three-year period Independent Auditors for the period Chairman Auditors Alternate Auditors KPMG SpA Marco SPADACINI Tommaso DI TANNO Raffaello LUPI Angelo MIGLIETTA Alessandro TROTTER Giuseppe Maria CIPOLLA Giandomenico GENTA (*) Alberto Bombassei resigned from his position with effect from 9 June (**) Alberto Clô and Carlo Malinconico were elected by the Board of Directors meeting of 9 June

8 1. Introduction Group structure TowerCo SpA 100% Pune Solapur Expressways Private Ltd. 50% (4) Alitalia Compagnia Aerea Italiana SpA 8.85% (4) 100% Italianmotorwayoperations Service companies International operations Tangenziale di Napoli SpA 100% Autostrada Torino Savona SpA 99.98% Società Autostrada Tirrenica pa 94% (1) Autostrade Meridionali SpA 58.98% Società Italiana pa Traforo del Monte Bianco 51% Raccordo Autostradale Valle d Aosta SpA 58% (2) EsseDiEsse Società di Servizi SpA 100% Pavimental SpA 71.67% Pavimental Polska Spzoo 100% Spea Ingegneria Europea SpA 100% AD Moving SpA 75% Port Mobility SpA 70% Newpass SpA 51% Giove Clear Srl 100% Tirreno Clear Srl 100% Autostrade Tech SpA 100% Telepass SpA 96.15% (3) Autostrade Service SpA 100% Infloblu SpA 75% IGLI SpA 33.3% (4) Impregilo SpA 29.96% (2)(4) Autostrade Participations Srl 100% Autostrade International US Holdings Inc. 75% (5) Autostrade International of Virginia O&M Inc. 100% Electronic Transaction Consultants Co. 45% Stalexport Autostrady SA 56.24% Biuro Centrum Spzoo 74.38% Stalexport Autostrada Dolnoslaska SA 100% Stalexport Autoroute Sàrl 100% Stalexport Autostrada Malopolska SA 100% Stalexport Transroute Autostrada SA 55% Autostrade dell Atlantico Srl 100% Autostrade Holding do Sur SA 100% Sociedad Concesionaria de Los Lagos SA 100% Inversiones Autostrade Holding do Sur Ltda. 100% Autostrade Portugal SA 100% Autostrade Brasil Ltda. 100% Triangulo do Sol SA 50% (4) Autostrade Sud America Srl 45.77% (4) Autopista do Pacifico SA 100% (4) Costanera Norte SA 100% (4) Acceso Vial AMB SA 100% (4) Inversiones Autostrade de Chile Ltda. 100% (4) Nororiente SA 100% (4) Gestion Vial SA 100% (4) Nueva Inversiones SA 50% (4)(6) Litoral SA 100% (4) Operalia SA 100% (4) Autostrade Urbane de Chile SA 100% (4) Vespucio Sur SA 100% (4) Autostrade Indian Infrastructure Development Private Ltd. 100% (1) A 69.1% interest in this company is in the process of being sold. (2) The percentage refers to ordinary shares representing the issued capital. (3) The remaining 3.85% is held by Autostrade Tech SpA. (4) Unconsolidated company. (5) The remaining 25% is held by Autostrade Participations Srl. (6) The remaining 50% is held by InversionesHolding do Sur Ltda. 6

9 Group structure Consolidated financial highlights Consolidated financial highlights (Em) H H (a) Total revenue 1,880 1,766 Net toll revenue 1,573 1,462 Other operating income Gross operating profit (EBITDA) 1,138 1,071 EBITDA margin 60.5% 60.7% Operating profit (EBIT) EBIT margin 47.3% 45.9% Profit/(Loss) from continuing operations Profit margin from continuing operations 18.0% 17.8% Profit for the period (including non-controlling interests) Profit for the period attributable to owners of the parent Operating cash flow (b) Capital expenditure (Em) Equity 3,806 3,587 Net debt 8,796 9,657 (a) In view of the fact that consolidation of the contributions of Società Autostrada Tirrenica and Strada dei Parchi (until the date of deconsolidation) to the income statement for the first half of 2011 have been accounted for in accordance with IFRS 5, thus recognising the contributions to profit for the period in Profit/(Loss) from discontinued operations, the two companies contributions to the comparative consolidated income statement for the first half of 2010 have also been reclassified. Income statement amounts for the first half of 2010, other than profit for the period, are therefore different from those published in the interim financial report as at and for the six months ended 30 June (b) Operating cash flow is calculated as profit + amortisation/depreciation +/ provisions/releases of provisions + financial expenses from discounting of provisions +/ impairments/reversals of impairments losses on assets +/ share of profit/(loss) of investments accounted for using equity method +/ (losses)/gains on sale of assets +/ other non-cash items +/ portion of net deferred tax income/expense recognised in the income statement. 7

10 1. Introduction Shareholder structure Edizione Srl Elmbridge Investments Pte Ltd. (GIC) Sinatra Sàrl (GSIP) 66.40% 17.68% 9.98% 100% Mediobanca SpA 5.95% 43.21% Rest of Europe 19% Rest of the world 12% United Kingdom 24% Fondazione CRT 6.76% 48.03% (1) Free float Italy 13% (3) France 14% USA 18% Geographical distribution of free float (2) (1) Excludes Atlantia SpA s treasury shares. (2) Source: CONSOB, Thomson Reuters (figures at 30 June 2011). (3) Includes retail investors. 8

11 Shareholder structure Atlantia share price performance Atlantia share price performance Share information Number of shares (*) 630,311,992 Par value (E) 1.00 Type of shares Ordinary Final dividend per share for 2010, paid May 2011 (E) Interim dividend per share for 2010, paid November 2010 (E) Price at 30 June Low (20 June 2011) High (16 February 2011) Capitalisation at 30 June 2011 (Em) 9,253 Average daily trading volume (m) 2.7 (*) After bonus issue of 6 June Atlantia share 1st half 2011 Price (E) Volumes (000) ,000 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2, January February March April May June Atlantia Rebased FTSE/MIB Volumes 9

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15 Consolidated financial review and related party transactions Consolidated financial review and related party transactions Introduction The financial review contained in this section includes and analyses the reclassified consolidated income statement, the consolidated statement of comprehensive income, the statement of changes in consolidated equity and the statement of consolidated changes in net debt for the six months ended 30 June 2011, in which amounts are compared with those for the same period of the previous year. The review also includes the reclassified consolidated statement of financial position as at 30 June 2011, compared with the corresponding amounts as at 31 December The accounting standards applied during preparation of this document are consistent with those adopted for the consolidated financial statements as at and for the year ended 31 December It should be noted that the interim financial statements as at and for the six months ended 30 June 2011 reflect the impact on taxation of the Ministerial Decree of 8 June 2011 (as provided for by the so called Milleproroghe, or Thousand postponements, legislation), of the response, received on 9 June 2011, to the request for a ruling submitted to the Italian tax authorities by Autostrade per l Italia in 2010 and, lastly, of Law Decree 98 of 6 July 2011, containing urgent measures to promote financial stability (converted into law, with amendments, by Law 111 of 15 July 2011). The Ministerial Decree of 8 June 2011 and the response to Autostrade per l Italia s request for a ruling have finally clarified the tax treatment of the new amounts accounted for in the financial statements as at and for the year ended 31 December 2009, substantially confirming the deductibility of the various components of the financial statements specifically recognised in application of IFRIC 12 (depreciation and amortisation, provisions and expenses from discounting to present value). The Decree and the response also permit deduction of the loss resulting from the realignment of carrying amounts with tax bases (Law Decree 185/2008) on a straight line basis over concession terms (29 years in the case of Autostrade per l Italia), with immediate effect from the 2010 tax year. Law 111/2011, on the other hand, has, in the case of Italian operators, modified the deductible percentage of provisions for maintenance, repair and replacement obligations, which has been reduced from 5% to 1% of the historical cost of assets to be handed over, with immediate effect from the 2011 tax year. The basis of consolidation at 30 June 2011 has changed with respect to the basis used in preparing the consolidated financial statements as at and for the year ended 31 December 2010, essentially due to the deconsolidation of Strada dei Parchi after closure of the sale of the related investment during the second quarter of Strada dei Parchi s contribution to the consolidated income statement for the first half of 2011, and to the income statement for the same period of 2010, is accounted for in Profit/(Loss) from discontinued operations, as required by IFRS 5 Non current Assets Held for Sale and Discontinued 13

16 2. Report on operations Operations, rather than included in each component of the consolidated income statement for continuing operations. Following the conclusion, during the second quarter of 2011, of an agreement to sell 69.1% of Società Autostrada Tirrenica, this company s contribution to the consolidated income statement for the first half of 2011 has also been accounted for in Profit/(Loss) from discontinued operations, in accordance with IFRS 5. As a result, in accordance with IFRS 5, Società Autostrada Tirrenica s contribution to the corresponding consolidated income statement for the first half of 2010 has also been reclassified with respect to the statement published in the interim financial report as at and for the six months ended 30 June Again in accordance with IFRS 5, the consolidated assets and liabilities of Società Autostrada Tirrenica as at 30 June 2011 have been accounted for in the statement of financial position in financial and non financial assets and liabilities related to discontinued operations, depending on their nature, whilst as at 31 December 2010 these items include the assets and liabilities of Strada dei Parchi, which, as noted above, has been deconsolidated at 30 June Finally, assets held for sale include the value of the 50% interest in Nueva Inversiones, given that the Atlantia Group has given a binding commitment to sell to Autopista do Pacifico, and Autopista do Pacifico a binding commitment to acquire, this investment, once the latter s stock market listing has been successfully completed, an event deemed to be highly likely. Further details of this transactions are provided in the section Operating review of the Group s main investee companies. The Group did not enter into material transactions, either with third or related parties, of a non recurring, atypical or unusual nature during the first half of The reclassified consolidated financial statements have not been independently audited and there are certain differences with respect to classification compared with the statutory consolidated financial statements presented in the section Consolidated financial statements. Above all: a) the Reclassified consolidated income statement includes Gross operating profit (EBITDA), which is not reported in the income statement in the consolidated financial statements. This profit margin is calculated by taking the figure for total revenue reported in the income statement and deducting all operating costs, with the exception of amortisation, depreciation, impairment losses on assets and reversals of impairment losses, provisions and other adjustments. In addition, revenue reported in the reclassified income statement differs from revenue reported in the income statement, as construction service revenue, recognised on the basis of the capitalised service costs, personnel expense and financial expenses incurred in providing the construction services, are presented in the reclassified statement as a reduction of the 14

17 Consolidated financial review and related party transactions b) c) d) respective components of operating costs and financial expenses. As a result, Operating profit (EBIT) in the two statements, resulting from the deduction from EBITDA of the above components, differs in terms of the component regarding capitalised financial expenses relating to construction services, which is included in revenue in the income statement in the consolidated financial statements and in financial income and expenses in the reclassified income statement. Finally, the two income statements also differ in that the reclassified consolidated income statement is more condensed; the Reclassified consolidated statement of financial position adopts a different classification of assets and liabilities compared with the statement of financial position in the consolidated financial statements, showing working capital (as the balance of current non financial assets and liabilities), net invested capital (as the balance of non current non financial assets and the sum of negative working capital and. non current non financial liabilities), and, as sources of funds, equity and net debt (representing the balance of all financial liabilities and assets). In addition, the reclassified consolidated statement of financial position is a more condensed version than the statement of financial position in the consolidated financial statements, as it excludes the sub items below each main entry and shows assets and liabilities related to discontinued operations in the various sections of the reclassified statement based on their nature (financial or non financial); Consolidated net debt reported in the reclassified consolidated statement of financial position takes account of non current financial assets, unlike the Analysis of consolidated net debt in the notes to the consolidated financial statements that is prepared as required by the Committee of European Securities Regulators (CESR) Recommendation of 10 February 2005, which does not permit non current financial assets to be deducted from debt; the Statement of changes in consolidated net debt differs from the statement of cash flows in the consolidated financial statements insofar as it presents the impact of cash flows generated or used during the period on consolidated net debt, as defined above, rather than on net cash and cash equivalents. The main differences between the two statements regard: 1) cash flows from/(used in) operating activities, which in the statement of changes in consolidated net debt include, in the change in working capital presented in the statement of cash flows, the change in operating capital, consisting of trade related items directly linked to the ordinary activities of the business concerned; 2) cash generated from/(used in) investing activities, which in the Statement of changes in consolidated net debt does not include movements in current and non current financial assets. Moreover, the statement shows investments in newly consolidated companies and proceeds from the sale of previously consolidated companies after deducting the net debt on the books of these companies, whilst in the statement of cash flows in the consolidated financial statements these figures are reported less any net 15

18 2. Report on operations 3) 4) cash on the books of the newly consolidated or recently sold companies; net equity cash inflows/(outflows) reported in the Statement of changes in consolidated net debt differ from cash generated from/(used in) financing activities in the statement of cash flows in the consolidated financial statements, as the former do not include movements in current and. non current financial liabilities. Moreover, the dividends reported are those approved during the reporting period, whilst the statement of cash flows reports dividends paid in the reporting period; changes to the fair value of hedging instruments recognised in the statement of comprehensive income are reported in the Statement of changes in consolidated net debt, whilst they are not reported in the statement of cash flows in the consolidated financial statements, as they have no impact on net cash. Consolidated results of operations Total revenue for the first half of 2011 amounts to E1,879.9 million, marking an increase of E114.2 million (6.5%) on the same period of 2010 (E1,765.7 million). In order to aid the reader s understanding of certain changes in the operating results, it should be noted that operating costs include the addition to the concession fee payable to ANAS by the Italian operators, whilst toll revenue includes the matching increase in tolls, without having any impact on the operators results (1). The total amount for the above toll increases for the first half of 2011 stands at E183.4 million, compared with the E92.2 million of the same period of After adjusting for the above increases, total revenue is up E23.0 million (1.4%) on the first six months of Toll revenue of E1,572.7 million is up E110.6 million (7.6%) on the first half of 2010 (E1,462.1 million), primarily reflecting: a) the above toll increases to be passed on to ANAS (up E91.2 million on the first half of 2010 and accounting for a 6.2% increase in toll revenue) in connection with the matching increase in the. concession fee; b) application of annual toll increases by the Group s Italian operators from 1 January 2011 (including a 1.92% increase for Autostrade per l Italia), boosting toll revenue by E23.7 million; (1) The additional concession fees payable to ANAS, pursuant to Laws 102/2009 and 122/2010, calculated on the basis of the number of kilometres travelled, amounted to 3 thousandths of a euro per kilometre for toll classes A and B and 9 thousandths of a euro per kilometre for classes 3, 4 and 5 during the first half of 2010; whilst the additions for the first half of 2011, following the increases introduced from 1 July 2010 and 1 January 2011, amount to 6 thousandths of a euro per kilometre for toll classes A and B and 18 thousandths of a euro per kilometre for classes 3, 4 and 5. 16

19 Consolidated financial review and related party transactions Reclassified consolidated income statement (Em) Increase/(Decrease) % of revenue H H Total % H H Toll revenue 1, , Contract revenue Other operating income Total revenue 1, , Cost of materials and external services (1) Concession fees Personnel expense Capitalised personnel expense Total net operating costs Gross operating profit (EBIT) 1, , Amortisation, depreciation, impairment losses and reversals of impairment losses Provisions and other adjustments Operating profit (EBITDA) Financial income/(expenses) Financial expenses from discounting of provisions for construction services required by contract and other provisions Capitalised financial expenses Share of profit/(loss) of associates and joint ventures accounted for using the equity method Profit/(Loss) before tax from continuing operations Income tax (expense)/benefit Profit/(Loss) from continuing operations Profit/(Loss) from discontinued operations Profit/(Loss) for the period (Profit)/Loss attributable to non-controlling interests Profit/(Loss) for the year attributable to owners of the parent (1) After deducting the margin recognised on construction services provided by the Group s own technical units. H H Increase/ (Decrease) Basic earnings per share (E) from: continuing operations discontinued operations Diluted earnings per share (E) from: continuing operations discontinued operations Operating cash flow (Em) from: continuing operations discontinued operations Operating cash flow per share (E) from: continuing operations discontinued operations

20 2. Report on operations c) the decline in traffic on the network operated by the Group s Italian operators (down 1.2%), partially offset by an improvement in the traffic mix (up 0.2% on Autostrade per l Italia s network), resulting in an estimated overall reduction in toll revenue of E10.8 million; d) an increase in other toll revenue reported by Autostrade Meridionali (up E2.8 million) which, following the signature of the relevant Single Concession Arrangement, from 2009 no longer defers a portion of the X variable of tariffs, partially releasing provisions made in previous years; e) an increase in toll revenue (up E2.3 million) reported by the Polish operator, Stalexport Autostrada Malopolska, primarily as a result of traffic growth (up 8.2%) and a rise in the cost of toll stickers (up 5.4%) for vehicles over 12 tonnes; f) increased toll revenue reported by the Chilean operator, Sociedad Concesionaria de Los Lagos (up E1.3 million), primarily due to traffic growth (up 10.0%). Contract revenue of E28.8 million is in line with the figure for the first half of 2010 (E28.7 million), reflecting an increase in work carried out for external customers by the US company, Electronic Transaction Consultants, primarily as a result of contract wins in Georgia and Illinois, offset by a reduction in revenue generated by Spea from design work for Milan s Outer Ring Road (a contract nearing completion). Other operating income of E278.4 million is up E3.5 million (1.3%) on the first six months of 2010 (E274.9 million), reflecting: a) an increase in commercial revenue from service areas and payment systems (up E5.0 million), reflecting annual contractual increases in service area royalties applied from 1 January 2011 and growth in the customer base (approximately 420 thousand new Telepass devices in circulation and around 250 thousand new subscribers to the Premium option); b) a reduction in non recurring income generated by the handover, free of charge, of buildings by. sub operators (down E4.6 million); c) an increase in other income (up E3.1 million), essentially attributable to Autostrade per l Italia and relating above all to sales of solar energy and penalties receivable from suppliers. Total net operating costs of E742.3 million are up E47.6 million (6.9%) on the first half of 2010 (E694.7 million). After stripping out the above increase in the concession fee, like for like net operating costs are down E43.6 million (7.2%). The Cost of materials and external services amounts to E244.8 million. This marks a reduction of E31.5 million on the first half of 2010 (E276.3 million), primarily due to the lower costs incurred for winter 18

21 Consolidated financial review and related party transactions operations (down E10.8 million), as a result of the reduced amount of snowfall in early 2011, a reduction in road surfacing work and non routine maintenance (approximately E14 million), which has however been planned for the second half, and the greater contribution from activities linked to construction work carried out by the Group s own technical units, after deducting the increased costs incurred by the Group in order to pre qualify for the Eco Taxe tender process in France. Concession fees, totalling E222.9 million, are up E91.6 million compared with the first half of 2010 (E131.3 million), essentially due to the above increase in the concession fees payable by Italian operators. Personnel expense, before deducting capitalised expense, of E317.4 million is up E1.9 million (0.6%) on the first half of 2010 (E315.5 million). This reflects: a) an increase of 465 in the average workforce (up 4.9%), primarily reflecting the increased volume of construction work carried out for the Group by Spea and Pavimental (up 285 on average) and personnel hired by Electronic Transaction Consultants to work on the contracts acquired in Florida, Georgia and Texas (up 258 units on average); b) a decrease in the average unit cost (down 4.3%), primarily due to the different impact of long term management incentive plans in the two corresponding periods (a reduction of E13.7 million or 4.4%). Capitalised staff costs are up from E28.4 million to E42.8 million (up E14.4 million), primarily due to the increase in infrastructure construction work carried out by the Group companies, Spea and Pavimental, using their own staff. Gross operating profit (EBITDA) of E1,137.6 million is up E66.6 million (6.2%) on the same period of 2010 (E1,071.0 million). Operating profit (EBIT) of E888.9 million is up E77.7 million (9.6%) on the same period of 2010 (E811.2 million). In addition to the above improvement in gross operating profit, the first half of 2011 benefitted from reduced provisions and impairment losses (down E19.8 million), primarily referring to provisions for the repair and replacement of assets to be handed over at the end of the concession terms, partially offset by an E8.7 million increase in depreciation and amortisation (relating primarily to concession rights). Financial expenses, after deducting financial income, total E281.8 million, marking an increase of E44.7 million (18.9%) on the first half of 2010 (E237.1 million). 19

22 2. Report on operations The increase primarily reflects the following: a) an impairment loss of E25.0 million on the carrying amount of the investment in Alitalia Compagnia Aerea Italiana, in view of the losses reported by the company and of the negative impact of the economic downturn on certain key aspects of its operating environment; b) a rise in net interest payable (up E11.9 million), essentially following an increase in the differential between the cost of borrowing incurred in order to provide the financial resources needed to redeem bond of E2,000 million on 9 June 2011 and returns on the investment of liquidity; c) an increase in other net financial expenses (up E5.6 million), partly due to non recurring income of approximately E4.0 million recognised by Stalexport Autostrada Malopolska in the first half of 2010 following the restructuring of its debt to the Polish grantor. Financial expenses from discounting of provisions for construction services required by contract and other provisions amount to E89.4 million, marking an increase of E22.0 million on the first half of (up 32.6%). This primarily reflects increases in the interest rates used to discount the provisions. Capitalised financial expenses, amounting to E12.4 million, are up E6.5 million on the first half of 2010, reflecting the progressive increase in accumulated payments made for investment in the Group s network for which it will receive additional economic benefits. The Share of the profit/(loss) of associates and joint ventures accounted for using the equity method has resulted in a net profit of E13.9 million, compared with the loss of E3.4 million recognised in the first half of The improvement, totalling E17.3 million, primarily reflects a combination of the following: a) a partial reversal, totalling E0.5 million for the first half of 2011, of the impairment loss of E15.9 million recognised in the first half of 2010 in respect of the carrying amount of the investment in IGLI, based on a comparison between the market value of Impregilo s shares and the relevant carrying amount; b) recognition of the Group s share of the profits reported by the Autostrade Sud America Group, totalling E9.2 million (E8.8 million for the first half of 2010, including the share of the profit of Autostrade per il Cile, incorporated with effect from 1 January 2010) and by the Brazilian operator, Triangulo do Sol, totalling E5.6 million (E1.7 million for the first half of 2010). Income tax expense for the first half of 2011 amounts to E206.0 million and is up E11.2 million (5.7%) on the first half of 2010 (E194.8 million). This is substantially in line with the improvement in Profit before tax from continuing operations, reflecting the substantially equivalent impact of gains and losses on the Group s investments, not significant for tax purposes. 20

23 Consolidated financial review and related party transactions Profit from continuing operations amounts to E363.0 million, marking an increase of E48.6 million (15.5%) on the same period of 2010 (E314.4 million). Profit from discontinued operations amounts to E102.1 million for the first half of 2011 (a loss of E8.6 million for the first half of 2010). The figure includes the gain of E96.7 million generated by the sale of the investment in Strada dei Parchi and including the fair value measurement of the remaining 2% interest covered by a call/put option agreed with Toto Costruzioni Generali. At the date of deconsolidation, Strada dei Parchi contributed negative equity to the consolidated statement of financial position, as calculated in compliance with the IFRS adopted by the Atlantia Group. This item also includes the operating results for the period of Società Autostrada Tirrenica and Strada dei Parchi which, as noted above and as required by IFRS 5, have been recognised in this item rather than being included in each component of the consolidated income statement. As a result, Società Autostrada Tirrenica s contribution to the comparative consolidated income statement for the first half of 2010 has also been reclassified with respect to the amount published in the interim financial report as at and for the six months ended 30 June 2010, which already included Strada dei Parchi s operating result for the period in the component relating to discontinued operations. Profit for the period, amounting to E440.1 million, is up E134.3 million (43.9%) on the first half of 2010 (E305.8 million). Profit for the period attributable to owners of the parent (E436,8 million) is up E127.2 million (41.1%) on the figure for the first half of 2010 (E309.6 million), whilst the profit attributable to. non controlling interests amounts to E3.3 million (in the first half of 2010 a loss of E3.8 million). Operating cash flow for 2010, as defined in the section Consolidated financial highlights, to which reference should be made, amounts to E819.4 million, up E135.7 million (up 19.8%) on the figure for the first half of This essentially reflects the impact of recognition of the deductibility of the carrying amounts recorded by Autostrade per l Italia in application of IFRIC 12, following the above mentioned response of the tax authorities to the company s request for a ruling on the matter. The operating cash flow generated was primarily used to fund the Group s capital expenditure (motorway infrastructure, property, plant and equipment and intangible assets) during the first six months of

24 2. Report on operations Consolidated statement of comprehensive income (Em) H H Profit for the period (A) Fair value gains/(losses) on cash flow hedges Gains/(Losses) from translation of financial statements denominated in functional currencies other than the euro Gains/(losses) from measurement of associates and joint ventures using the equity method Other fair value gains/(losses) Other comprehensive income for the period, after related taxation Reclassifications of components of comprehensive income to profit/(loss) for the period Fair value gains on cash flow hedges reclassified to profit/(loss) for the period 0.6 Total other comprehensive income for the period, after related taxation and reclassifications to profit/(loss) for the period (B) Comprehensive income for the period (A + B) Of which: attributable to owners of the parent attributable to non-controlling interests The consolidated statement of comprehensive income reports comprehensive income for the period of. E444.7 million (E333.0 million in the first half of 2010). The net effect of other components of comprehensive income, after the related taxation, is E4.6 million (E27.2 million in the first half of 2010), essentially reflecting the following components: a) a fair value gain on the measurement of cash flow hedges of E30.3 million (a reduction of E9.2 million in the first half of 2010), reflecting increasing interest rate trends (falling in the first half of 2010); b) a loss on the translation of the financial statements of subsidiaries, totalling E11.5 million (a gain of. E10.9 million in the first half of 2010), primarily reflecting the decline in value of the Chilean peso. versus the euro at the end of the period (inverse exchange rate trends in the first half of 2010); c) a loss of E14.5 million resulting from the measurement of associates and joint ventures accounted for using the equity method (a gain of E25.7 million in the first half of 2010 due to a strengthening of the Chilean peso at that time), essentially due to the above decline in value of the Chilean peso versus the euro, which has had a negative impact on the carrying amount of the investment in Autostrade Sud America. 22

25 Consolidated financial review and related party transactions Consolidated financial position As at 30 June 2011 Non current non financial assets of E18,754.8 million are down E188.0 million on the figure for 31 December 2010 (E18,942,8 million). Property, plant and equipment, amounting to E211.1 million, has not undergone significant changes during the period. Intangible assets total E16,169.8 million (E16,187.6 million at 31 December 2010). In addition to the goodwill (E4,382.9 million) recognised as at 31 December 2003, following acquisition of the majority shareholding in the former Autostrade Concessioni e Costruzioni Autostrade SpA, these assets include the Group s concession rights, amounting to E11,731.3 million (E11,752.0 million at 31 December 2010). These rights refer to concession rights accruing from construction services for which no additional economic benefits are received, totalling E9,040.0 million (E9,257.3 million as at 31 December 2010) and construction services for which additional economic benefits are received, totalling E2,422.8 million (E2,216.9 million as at 31 December 2010). The reduction in intangible assets, amounting to E17.8 million, is essentially due to amortisation for the period (down E223.1 million), the reclassification of Società Autostrada Tirrenica s intangible assets (down E157.8 million) to Non financial assets held for sale or related to discontinued operations and the adjustment of the present value on completion of investments in construction services for which no additional benefits are received (down E50.4 million), partially offset by investments in construction services for which additional economic benefits are received (an increase of E410.2 million). 23

26 2. Report on operations Reclassified consolidated statement of financial position Net invested capital (Em) Increase/(Decrease) Non current non financial assets Property, plant and equipment Intangible assets 16, , Investments Deferred tax assets 1, , Other non current assets Total non current non financial assets (A) 18, , Working capital Trading assets 1, Inventories Contract work in progress Trade receivables Current tax assets Other current assets Non financial assets held for sale or related to discontinued operations , Current portion of provisions for construction services required by contract Current provisions Trading liabilities 1, , Current tax liabilities Other current liabilities Non financial liabilities related to discontinued operations Total working capital (B) 1, Invested capital less current liabilities (C = A + B) 17, , Non current non financial liabilities Non current portion of provisions for construction services required by contract 3, , Non current provisions Deferred tax liabilities Other non current liabilities Total non current non financial liabilities (D) 5, , NET INVESTED CAPITAL (E = C + D) 12, ,

27 Consolidated financial review and related party transactions Reclassified consolidated statement of financial position equity and net debt (Em) Increase/(Decrease) Equity Equity attributable to owners of the parent 3, , Equity attributable to non-controlling interests Total equity (F) 3, , Net debt Non current net debt Non current financial liabilities 10, , Bond issues 7, , Medium/long term borrowings 2, , Derivative liabilities Other financial liabilities Other non current financial assets Non current financial assets deriving from concessions Non current financial assets deriving from government grants Term deposits convertible after 12 months Derivative assets Other financial assets Non current net debt (G) 9, , Current net debt Current financial liabilities , ,989.4 Bank overdrafts Short term borrowings Current portion of medium/long term borrowings , ,242.7 Intercompany current accounts payable Other financial liabilities Bank overdrafts related to discontinued operations Financial liabilities related to discontinued operations Cash and cash equivalents , ,770.2 Cash in hand and at bank and post offices Cash equivalents , ,001.7 Cash and cash equivalents related to discontinued operations Other current financial assets Current portion of medium/long term financial assets Current financial assets deriving from concessions Current financial assets deriving from government grants Term deposits convertible within 12 months Other financial assets Financial assets held for sale and related to discontinued operations Current net debt (H) ,129.2 Net debt (I = G + H) 8, , NET DEBT AND EQUITY (L = F + I) 12, ,

28 2. Report on operations At 30 June 2011 Investments, totalling E417.9 million (E431.5 million at 31 December 2010), are down E13.6 million, resulting from the following: a) the above impairment loss of E25.0 million on the carrying amount of the investment in Alitalia Compagnia Aerea Italiana as at 30 June 2011; b) the injection of E15.4 million of further equity into Tangenziali Esterne di Milano (E9.6 million) and into the Indian operator, Pune Solapur (E5.8 million); c) a reduction of E4.0 million in the carrying amount of investments accounted for using the equity method, as recognised essentially in other comprehensive income and in the income statement. Deferred tax assets, after offsetting against deferred tax liabilities, amount to E1,952.0 million (E2,101.8 million at 31 December 2010), marking a reduction of E149.8 million. This primarily reflects the release of deferred tax assets recognised on the intercompany gain arising in 2003 as a result of the transfer of motorway assets to Autostrade per l Italia, totalling E52.9 million, and the release of deferred tax assets linked primarily to the positive impact of recognition of the tax deductibility of the carrying amounts recorded by Autostrade per l Italia in application of IFRIC 12. Consolidated working capital reports a negative balance of E1,139.3 million as at 30 June 2011, marking a change of E775.5 million compared with the negative balance of E363.8 million as at 31 December The change basically reflects the deconsolidation of Strada dei Parchi, after closure of the sale of the related investment, partially offset by an increase in non financial assets held for sale or related to discontinued operations as a result of reclassification of the assets of Società Autostrada Tirrenica, the controlling interest in which is in the process of being sold, and of the investment in Nueva Inversiones (accounted for as at 30 June 2011 at a carrying amount of E292.4 million). A full description of the transaction involved in this latest investment in Chile is provided in the section, Operating review of the Group s main investee companies. The remaining E283.5 million reduction in working capital primarily reflects the following factors: a) an increase of E267.4 million in trading liabilities, primarily due to a E158.8 million increase in amounts payable to the operators of interconnecting motorways, reflecting the contractually agreed timing of the settlement of amounts to and from other motorway operators, a E54.1 million increase in amounts payable to suppliers, above all due to the greater volume of work carried out by the subsidiary, Pavimental, and an increase in other trading liabilities, essentially deferred income from customers attributable to Telepass (up E9.5 million) and TowerCo (up E8.8 million); 26

29 Consolidated financial review and related party transactions b) a rise in the current portion of provisions for construction services required by contract (up E107.7 million), reflecting the forecast volume of construction services for which no additional economic benefits are received; c) a reduction of E39.2 million in the current portion of other provisions, substantially reflecting the impact of expiry of the incentive plan for the Group s management for the period ; d) an increase in trade receivables of E48.3 million, primarily deriving from an increase in tolls receivable, partly due to normal seasonal traffic trends. Non current non financial liabilities, totalling E5,013.6 million, are down E321.2 million on the figure for 31 December 2010 (E5,334.8 million), primarily due to the reclassification of the current portion of provisions for construction services required by contract (down E338.0 million) and the adjustment, following increases in current and prospective interest rates, of the present value on completion of investments in construction services for which no additional benefits are received (down E50.4 million), partially offset by the impact of discounting to present value (up E65.6 million). As a result, Net invested capital, totalling E12,601.9 million at 30 June 2011, is down E642.3 million on the figure for 31 December 2010 (E13,244.2 million). Equity attributable to owners of the parent and non controlling interests totals E3,806.3 million (E3,586.9 million as at 31 December 2010). Equity attributable to owners of the parent, totalling E3,398.1 million, is up E214.7 million, primarily reflecting comprehensive income for the period (E442.9 million), after payment of the final dividend for 2010 approved during the period (E230.0 million). Equity attributable to non controlling interests of E408.2 million, marking an increase of E4.7 million on the figure for 31 December 2010 (E403.5 million), is essentially due to deconsolidation of Strada dei Parchi. The Group s net debt as at 30 June 2011 stands at E8,795.6 million, marking a reduction of E861.7 million compared with 31 December 2010 (E9,657.3 million). Non current net debt, amounting to E9,399.0 million (E9,131.5 million at 31 December 2010) is up E267.5 million, primarily due to the following factors: a) an increase of E274.9 million in non current financial liabilities, essentially reflecting: 1. new medium/long term borrowings following the drawdown of a new tranche with a face value of E350.0 million of the floating rate loan granted to Autostrade per l Italia by Cassa Depositi e Prestiti 27

30 2. Report on operations (with final repayment maturing in 2034), and the signature by the Chilean operator, Los Lagos, of a new medium/long term loan agreement (a face value of E95.3 million), partially offset by the reclassification to current liabilities of the portion of borrowings maturing within the next 12 months (E68.4 million), the reclassification to liabilities related to discontinued operations of the interest free loan from the Central Guarantee Fund to Autostrade Tirrenica (E36.5 million) and a reduction of E12.6 million in foreign currency financial liabilities as a result of exchange rate movements; 2. a reduction of E38.5 million in sterling and yen denominated bond issues, resulting from the depreciation of the two currencies with respect to the euro; 3. reclassification to liabilities related to discontinued operations of deferred financial income of E22.4 million, essentially consisting of interest rate subsidies relating to the interest free loan from the Central Guarantee Fund to Società Autostrada Tirrenica; b) an increase of E7.4 million in non current financial assets, substantially due to the following factors: 1. an increase of E36.6 million in the term deposits provided for by Laws 662/96, 135/97 and 345/97, following a review of the timing of their release; 2. an increase of E26.5 million in other financial assets, primarily reflecting recognition of the. non current portion of the amount due from Toto Costruzioni Generali in connection with the sale of the investment in Strada dei Parchi; 3. a reduction of E44.4 million in financial assets deriving from the non current portion of accrued government grants for construction services rendered during the period by the Group s motorway operators, essentially after reclassifications to the short term portion; 4. a reduction in fair value gains (down E12.5 million) on the derivatives hedging the yen denominated bond issue, primarily due to the weakening of the currency in which the bonds were issued with respect to the euro, as reflected in the change in the hedged liability. As at 30 June 2011 current net funds amount to E603.4 million (net debt of E525.8 million as at. 31 December 2010). The change of E1,129.2 million reflects: a) a reduction of E2,989.4 million in current financial liabilities, essentially due to the following: 1. the redemption of bonds totalling E2,000 million and unwinding of the related cash flow hedges (down E26.0 million); 2. a reduction of E888.5 million in financial liabilities related to discontinued operations, primarily following the sale of the investment in Strada dei Parchi, partially offset by reclassification of Società Autostrada Tirrenica s financial liabilities; 28

31 Consolidated financial review and related party transactions 3. a decrease of E161.0 million in accrued borrowing costs following the payment of interest on bond issues and of differentials on derivatives; 4. a reduction of E109.6 million in the current portion of medium/long term borrowings, following repayments during the period and a reduction of E32.6 million in the amount payable to ANAS deriving from the progressive collection of government grants, partially offset by the reclassification to current financial liabilities (up E68.4 million) of portions of borrowings maturing within the next 12 months; 5. a short term loan obtained by Inversiones Autostrade Holding do Sur (with a face value of E159.5 million) to fund the acquisition, via the issue of new shares, of a 50% interest in Nueva Inversiones, the Chilean company set up by the Atlantia Group to acquire the investments covered by the agreement reached with the Acciona group on 18 April 2011; b) a reduction of E1,770.2 million in cash and cash equivalents, primarily due to the above redemption of bonds totalling E2,000 million and the payment of dividends of E232.0 million, partially offset by cash generated during the period in the form of new borrowings and operating cash flow; c) a reduction of E90.0 million in other financial assets, totalling E355.7 million, due to the following: 1. a reduction of E122.7 million in the short term portion of term deposits, primarily due to release of the related certificates during the first half of 2011; 2. a reduction in current financial assets deriving from government grants for construction services rendered, totalling E49.6 million, after the collection of grants with a value of approximately E120.1 million, partially offset by reclassifications from the non current portion, totalling E37.3 million, and by grants accruing on the completion of construction services, amounting to approximately E36.8 million; 3. an increase of E105.3 million in other current financial assets, reflecting recognition of the current portion of the amount due from Toto Costruzioni Generali, totalling E60.6 million (in connection with the sale of Strada dei Parchi and collected at the end of July 2011) and an increase of E46.4 million in the amount receivable from ANAS linked to the progressive release of certificates, partially offset by a reduction of E18.4 million in accrued income deriving from the liquidation of differentials on hedging derivatives. The Group s ordinary operating and financing activities expose it to market risks, primarily regarding interest rate and currency risks linked to the financial assets acquired and the financial liabilities assumed, in addition to liquidity and credit risks. 29

32 2. Report on operations The Group s financial risk management strategy is consistent with the objectives set by Atlantia s Board of Directors. The strategy aims to both manage and control such risks, wherever possible mitigating interest rate and currency risks and minimising borrowing costs, as defined in the approved Hedging Policy of the Group. The components of the Group s hedging derivatives portfolio as at 30 June 2011 are classified, in application of IAS 39, as cash flow hedges. Based on the positive outcome of tests of effectiveness of cash flow hedges as at 30 June 2011, changes in fair value have been recognised in full in comprehensive income, with no recognition of any ineffective portion in profit or loss. The residual weighted average term to maturity of the Group s interest bearing debt is approximately 7 years and 6 months, with 91% fixed rate. 12% of the Group s medium/long term debt is denominated in currencies other than the euro. Taking account of foreign exchange hedges and the proportion of debt denominated in the local currency of the country in which the relevant Group company operates (around 4%), the Group is not exposed to currency risk on translation into euros. The average cost of the Group s medium/long term borrowings in the first half of 2011, after adjusting for Strada dei Parchi s debt, was approximately 4.9%. As at 30 June 2011 the Group has cash reserves (cash, term deposits and undrawn committed lines of credit) of E3,959 million, consisting of: a) E778 million in cash and/or investments maturing within 120 days; b) E381 million in term deposits allocated primarily to finance the execution of specific construction services; c) E2,800 million in undrawn committed lines of credit. In particular, the Group has obtained the following lines of credit: 1. E500 million, representing the undrawn portion of the loan agreement signed in November 2008 by the European Investment Bank and Autostrade per l Italia (E1 billion), which may be drawn down until November 2012 and matures in 2036; 2. E300 million, representing the undrawn portion of the loan agreement signed in December 2010 by the European Investment Bank and Autostrade per l Italia, which may be drawn down until December 2014 and matures in 2036; 3. E1,000 million, representing the undrawn portion of a loan granted in December 2009 to Autostrade per l Italia by Cassa Depositi e Prestiti and Sace, which may be drawn down until September 2014 and matures in 2024; 30

33 Consolidated financial review and related party transactions 4. E1,000 million available to Autostrade per l Italia under a committed Revolving Credit Facility with Mediobanca acting as Agent Bank, which is undrawn at 30 June 2011 and matures in June The Group s net debt, as defined according to the CESR Recommendation of 10 February 2005 (which does not permit the deduction of non current financial assets from debt), amounts to E9,738.4 million as at. 30 June 2011, compared with a net debt of E10,592.7 million as at 31 December

34 2. Report on operations Statement of changes in consolidated equity (Em) Equity attributable to owners of the parent Issued capital Cash flow hedge reserve Currency translation reserve Balance as at Total comprehensive income for the period Owner transactions and other changes Bonus issue 28.6 Final dividend approved Retained earnings for the previous year Other minor changes Balance as at Balance as at Total comprehensive income for the period Owner transactions and other changes Bonus issue 30.0 Final dividend approved Retained earnings for the previous year Change in basis of consolidation, capital contributions and other changes 4.4 Balance as at

35 Consolidated financial review and related party transactions Reserve for investments accounted for using the equity method Other reserves and retained earnings Equity attributable to owners of the parent Treasury shares Profit/(Loss) for the period Total Equity attributable to non controlling interests Total equity , , , , , , , , , , , ,

36 2. Report on operations Consolidated cash flow Net debt decreased by E861.7 million during the first half of 2011, compared with a reduction of E113.7 million in the first six months of Operating activities generated cash flows of E1,017.1 million in the first half of 2011 (E765.2 million in the first half of 2010). The E251.9 million increase in cash generated by operating activities reflects the previously mentioned improvement in the result from continuing operations (operating cash flow up E135.7 million), and the greater contribution from changes in working capital (increased trade payables) and in non financial assets and liabilities. Cash from investing in non financial assets amounts to E47.4 million, compared with an outflow of E431.0 million in the first half of Cash generated in the first half of 2011 is essentially linked to the gain realised on deconsolidating Strada dei Parchi, after deducting net debt transferred (totalling E1,021.2 million), partially offset by investments in motorway infrastructure, net of the related government grants (an outflow of E640.1 million) and purchases of investments, totalling E307.7 million, primarily by the Chilean company, Inversiones Autostrade Holding do Sur, in respect of its acquisition of a 50% interest in Nueva Inversiones. The outflow in the first half of 2010 was primarily due to investments in motorway infrastructure, net of the related government grants, and the portion of capital expenditure resulting in an increase in takeover rights. The cash outflow resulting from changes in equity amounts to E243.9 million in the first half of 2011 (E210.8 million in the same period of 2010), essentially due to the dividends approved by Group companies during the first half. The overall impact of the above cash flows was to reduce net debt by E820.6 million in the first half of 2011 (E123.4 million in the same period of 2010). In addition, in the first half of 2011 net debt was also reduced by changes in the fair value of cash flow hedges recognised in comprehensive income (amounting to E41.1 million), reflecting higher interest rates, whilst the corresponding effect in the same period of 2010 resulted in an increase in net debt of E9.7 million. 34

37 Consolidated financial review and related party transactions Statement of changes in consolidated net debt (Em) H H Profit for the period Amortisation and depreciation Provisions Financial expenses from discounting of provisions for construction services required by contract and other provisions Share of (profit)/loss of associates and joint ventures accounted for using the equity method Impairment losses/(reversal of impairment losses) on non current financial assets and investments accounted for at cost or fair value 25.0 Impairment losses/(reversal of impairment losses) and adjustments of non current assets (Gain)/Loss on sale of non current assets Net change in deferred tax (assets)/liabilities Other non cash items Change in working capital Other changes in non financial assets and liabilities Net cash from/(used in) operating activities (A) 1, Investments in motorway infrastructure Government grants related to motorway infrastructure Increase/(Decrease) in financial assets deriving from takeover rights (related to investments in motorway infrastructure) Purchases of property, plant and equipment Purchases of intangible assets Purchases of investments, net of unpaid called up issued capital Dividends received from investments accounted for using the equity method Proceeds from sales of property, plant and equipment, intangible assets and unconsolidated investments Proceeds from sale of consolidated investments, including net debt 1,021.2 Changes in other non current assets Net cash from/(used in) investing activities (B) Dividends approved by Group companies Net change in currency translation reserve and other reserves and debt related translation differences Contributions to equity and reserves attributable to non controlling interests Net equity cash inflows/(outflows) (C) Increase/(Decrease) in cash and cash equivalents (A + B + C) Change in the fair value of hedging derivatives recognised in comprehensive income (D) Decrease/(Increase) in net debt for the period (A + B + C + D) Net debt at beginning of period 9, ,754.5 Net debt at end of period 8, ,

38 2. Report on operations Related party transactions This section describes the Atlantia Group s material related party transactions, as identified in accordance with the criteria defined in the specific procedure approved by Atlantia s Board of Directors in 2010, in implementation of CONSOB Resolution Related party transactions are concluded on normal market terms and conditions and are conducted on an arm s length basis. Related party transactions do not include transactions of an atypical or unusual nature. The Atlantia Group. did not engage in material transactions with its direct or indirect parents during the first half of For the purposes of the above CONSOB Resolution, which applies the requirements of IAS 24, the Autogrill group, which is under the common control of Edizione Srl, is treated as a related party. With regard to relations between the Atlantia Group s motorway operators and the Autogrill group, it should be noted that, as at 30 June 2011, Autogrill holds 139 food service concessions for service areas along the Group s motorway network. In the first half of 2011 the Group earned revenue of approximately E35.5 million on transactions with Autogrill, including E31.7 million in royalties deriving from management of service areas. This income is generated by contracts entered into over various years, of which a large part was awarded as a result of transparent and non discriminatory competitive tenders. During the first half of 2011 fees, non monetary benefits, bonuses, incentives and other forms of compensation were paid to the Chairman of Atlantia, Fabio Cerchiai (E0.3 million), and the Chief Executive Officer and General Manager, Giovanni Castellucci (E3.1 million, including payments under the three year incentive plan for the period ), in relation to positions held in Atlantia and in other Group companies. Details of the impact of related party transactions on the income statement and financial position are provided in note 10.4 to the condensed interim consolidated financial statements. 36

39 Consolidated financial review and related party transactions This page intentionally left blank 37

40 2. Report on operations Financial highlights of the main Group companies This section includes financial highlights for the main Group companies. The following figures have been prepared under IFRS and above all in compliance with the standards and policies adopted by the Parent.. They have been extracted from the specific reporting packages prepared by each subsidiary for the purposes. of preparation of the Atlantia Group s consolidated financial statements as at and for the six months ended. 30 June (Em) Revenue EBITDA Increase/(Decrease) Increase/(Decrease) H H Total % H H Total % Italian motorway operators Autostrade per l Italia 1, , % % Raccordo Autostradale Valle d Aosta % % Autostrada Torino Savona % % Società Autostrada Tirrenica % % Tangenziale di Napoli % % Autostrade Meridionali % % Società Italiana per il Traforo del Monte Bianco % % Other subsidiaries Pavimental % % Spea % % Telepass % % Autostrade Tech n,a, % EsseDiEsse Società di Servizi % % TowerCo % % AD Moving % % Infoblu % % Port Mobility % % Autostrade International US Holdings Inc. group % % Stalexport Autostrady group % % Sociedad Concesionaria de Los Lagos % % 38

41 Financial highlights of the main Group companies Investments in motorway assets and property, plant and equipment Increase/(Decrease) H1 H Net funds/(net debt) Increase/(Decrease) Total % Total % % 8, , % % % % % % % % % % % % % % % % % n,a, % n,a, n,a, n,a, % % % n,a, % n,a, % n,a, % n,a, % % % % % 39

42 2. Report on operations Operating review of the Group s operators Traffic The number of kilometres travelled on the network managed by Autostrade per l Italia and its Italian motorway subsidiaries (excluding Società Autostrada Tirrenica, 69.1% of which is in the process of being sold) during the first half of 2011 amounts to 24,598.3 million: 21,326.5 million by vehicles with 2 axles (cars and vans, representing 86.7% of the total) and 3,271.9 million by vehicles with 3 or more axles (13.3% of the total). In terms of total kilometres travelled, traffic using the Group s Italian network (excluding Società Autostrada Tirrenica) is down 1.2% on the same period of 2010, with vehicles with 2 axles down 1.3% and those with 3 or more axles in line with the first six months of the previous year. In the second quarter of the year continued the downturn in vehicles with 2 axles recorded in the first three months, with the decline most accentuated at weekends. Traffic using Autostrade per l Italia s network during the first half of 2011 is down 1.0%, with vehicles with 2 axles down 1.2% and those with 3 or more axles remaining in line. The motorways in the Valle d Aosta region extended their positive performance (up 3.1% on the Valle d Aosta Motorway Link Road and up 5.9% in the Mont Blanc Tunnel), whilst Autostrada Torino Savona reports more or less stable traffic with respect to the first half of 2010 (up 0.3%). In contrast, the two motorways serving the Naples metropolitan area also saw a significant decline in traffic, with the number of vehicles down 3.4% on the Naples Ring Road and 4.8% on the A3 Naples Salerno. Traffic on the network operated under concession in Italy during the first half of 2011 Company Vehicles x km (millions) (a) ATVD (b) 2011 Vehicles with 2 axles Vehicles with 3 or more axles Total vehicles % increase/ (decrease) on 2010 Autostrade per l Italia 19, , , % 44,199 Autostrada Torino Savona % 19,561 Autostrade Meridionali % 78,305 Tangenziale di Napoli % 138,583 Traforo del Monte Bianco % 5,051 Raccordo Autostradale Valle d Aosta % 9,305 Total for Group s Italian operators (excluding SAT) 21, , , % 43,904 Società Autostrada Tirrenica (SAT) (c) % 15,198 (a) Provisional data. (b) ATVD Average theoretical vehicles per day, equal to number of kilometres travelled/(journey length x number of days in the period). (c) A 69.1% interest in this company is in the process of being sold. 40

43 Operating review of the Group s operators Overseas, the Polish operator, Stalexport Autostrada Malopolska, recorded an 8.2% increase in traffic in the first half of 2011, compared with the same period of The average daily volume of light vehicles is up 6.3% and heavy vehicles are up 14.6%. The Chilean operator, Los Lagos, saw an increase in traffic using its network, which was up 10.0% on the first six months of Vehicles with 2 axles are up 9.4% and those with 3 or more axles 17.7%. It should be noted that the figures for the first six months of 2010 were affected by damage to the network to the north of the section operated by Los Lagos (which instead escaped damage), as a result of the earthquake that hit Chile on. 27 February Traffic growth remained strong on the networks operated by the Group s other main investee companies: Costanera Norte, Litoral Central, Nororiente and Vespucio Sur in Chile recorded traffic growth of 7.9%, 9.5%, 14.9% and 11.6%, respectively, in terms of kilometres travelled compared with the same period of 2010, whilst the Brazilian operator, Triangulo do Sol, registered a growth of 6.8% in terms of kilometres travelled compared with the same period of Traffic on the network operated under concession abroad during the first half of 2011 Traffic (millions of km travelled) (a) Traffic (thousands of transits) (a) H % increase/ (decrease) on 2010 H % increase/ (decrease) on 2010 Consolidated foreign operations Stalexport Autostrada Malopolska % 10, % Los Lagos % 6, % Foreign investee companies Autostrade Sud America Nororiente % 1, % Litoral Central % 1, % Vespucio Sur % 104, % Costanera Norte % 94, % Triangulo do Sol % 9, % Total 1, % 228, % (a) Provisional data. 41

44 2. Report on operations Toll charges The following annual tariff increases were introduced by Autostrade per l Italia and the Group s Italian motorway operators from 1 January 2011: Toll increases from 1 January 2011 (excluding increases pursuant to Law 122/2010) Italian motorway operator Toll charge increase Autostrade per l Italia 1.92% Raccordo Autostradale Valle d Aosta 14.15% Autostrada Torino Savona 0.63% Tangenziale di Napoli 3.80% Autostrade Meridionali 6.56% (*) Società Italiana Traforo del Monte Bianco 4.96% Società Autostrada Tirrenica (**) 4.08% (*) As a result of rounding, the impact on the final tolls paid by road users is limited to classes B and 5. (**) A 69.1% interest in this company is in the process of being sold. In accordance with the Single Concession Arrangement signed by ANAS and Autostrade per l Italia, the toll increase of 1.92% for 2011 has been calculated on the basis of two components: 0.63%, equivalent to 70% of the inflation rate in the period from 1 July 2009 to 30 June 2010; 1.29%, relating to the X investments component of the tariff formula, designed to cover the additional capital expenditure inserted into the IV Addendum of The inflation linked component (0.63%) was calculated on the basis of consumer price inflation for the Italian population as a whole, as calculated by ISTAT (the NIC index), for the period between 1 July 2009 and 30 June 2010, equal to 0.90%, compared with the period from 1 July 2008 to 30 June The toll component relating to capital expenditure inserted into the IV Addendum (1.29%) is based on the state of progress of work on the individual projects, as reported in the statement of financial position as at. 30 September The subsidiaries, Raccordo Autostradale Valle d Aosta, Società Autostrada Tirrenica, Tangenziale di Napoli, Autostrade Meridionali and Strada dei Parchi, whose single concession arrangements, involving the rebalancing of their respective financial plans, became effective in 2010, have for the first time applied the new formula 42

45 Operating review of the Group s operators for calculating their toll increases. The various factors taken into account include the target inflation rate, the rebalancing component and the return on investments, in addition to quality. The increases granted from 1 January 2011 represented the sum of the increases granted in compliance with the new arrangements for the years 2010 and 2011, after deducting the increase already applied from 1 January 2010 on the basis of the arrangements in force at that time. The toll increase for Autostrada Torino Savona is 0.63%, which was granted on the basis of the Single Concession Arrangement that came into effect in This increase is equal to 70% of the inflation rate in the period from 1 July 2009 to 30 June Società Italiana Traforo del Monte Bianco, which operates under a different concession regime based on bilateral agreements between Italy and France, applied a total increase of 4.96% from 1 January 2011, in accordance with the resolution approved by the Intergovernmental Committee for the Mont Blanc Tunnel on. 22 October This increase is based on the combination of two elements: 1.46% representing the average inflation rate in France and Italy for the period from 1 September to 31 August 2010; 3.50% in accordance with the agreement between the Italian and French governments dated 24 February 2009, with use of the proceeds still be decided on by the two governments. From 1 July 2010 the shadow toll paid by the Grantor to the Polish operator, Stalexport Autostrada Malopolska, for heavy vehicles weighing more than 12 tonnes was increased by 5.4%. This has resulted in a 0.6% increase in toll revenue (net of the increase in VAT from 22% to 23%). Under the terms of its concession arrangement, the tolls applied by the Chilean operator, Los Lagos, did not change from 1 January 2011, reflecting the combined effect of: the inflation linked increase of 2.5% (calculated between 1 December 2009 and 30 November 2010); the negative impact of the safety factor between 2010 (equal to 3.5%) and 2011 (equal to 0.0%); the rounding off of tariffs to the nearest 100 pesos (up 1.0%). 43

46 2. Report on operations Network upgrade and modernisation During the first six months of 2011, Group companies invested a total of E713.7 million, marking an increase of E92.7 million (15%) on the same period of Capital expenditure by the Atlantia Group (Em) H H % increase/(decrease) Autostrade per l'italia Projects in Agreement of % Autostrade per l'italia Projects in IV Addendum of % Investments in major works by other subsidiaries % Other investments in the network and capitalised costs (staff, maintenance, other) % Total investments in motorway assets % Investments in other intangible assets % Investments in property, plant and equipment % Total capital expenditure by the Group % Investments relating to Autostrade per l Italia s Agreement of 1997 are down E89.0 million on the first half of 2010, following completion of excavation of the Base Tunnel and of the tunnels for lot 12 of the Variante di Valico and lots and 7 8 on the Florence North Florence South section. These reductions have not yet been offset by work being carried out on the Barberino Florence North section, which began in January 2011, and investments in the Florence South Incisa section, the design for which was only partially approved by the Services Conference of 31 May Investments envisaged under Autostrade per l Italia s IV Addendum of 2002 are up E163.8 million on the first half of 2010, primarily due to increased work on the A14 between Rimini North and Porto Sant Elpidio, on the A1 between Fiano and Settebagni and on the A9 Lainate Como section, partly as a result of contractual agreements with certain contractors designed to speed up construction. Investments in major works by the Group s other motorway operators are down E1.8 million compared with the same period of This primarily reflects a reduction in work carried out by Autostrade Meridionali on the widening of the A3, which is approximately 90% complete. This reduction was partially offset by a rise in investments by Società Autostrada Tirrenica, reflecting increased work on the Rosignano San Pietro in Palazzi section and on the final designs for the remaining lots. 44

47 Operating review of the Group s operators Investment in major works by Autostrade per l Italia 1997 Agreement Of the works included in Autostrade per l Italia SpA s Agreement of 1997, as at 30 June 2011 approximately 93% of the works has been authorised, over 80% has been contracted out, and approximately 63% of the works has been completed. Variante di Valico This section of motorway is scheduled to open to traffic in 2013, partly thanks to the use of a mechanised EPB (Earth Pressure Balance) tunnelling machine for the Sparvo tunnel (2.5 km), enabling full mechanisation of both the excavation and tunnel cladding process and thereby speeding up excavation time. Florence North Florence South Having completed excavation of the Melarancio and Pozzolatico tunnels, the most demanding works in the respective contracts, in 2010, work is continuing with the aim of enabling Autostrade per l Italia to open the new southbound carriageway to traffic by the end of 2011, despite the financial difficulties experienced by the contractor early in the year. Barberino Florence North The works for lot 0, including site preparation, service roads and certain pre construction works, were handed over to Pavimental on 26 January In terms of completion work, Autostrade per l Italia has opted to use an EPB (Earth Pressure Balance) tunnelling machine to build a single longer tunnel in place of the nine tunnels originally to be excavated using the traditional method. This will significantly cut construction time, provide enhanced safety guarantees for workers, reduce the environmental impact and result in cost savings. The design using mechanised excavation received final approval for the purposes of environmental compatibility on 27 June 2011 and is now awaiting approval by a national Services Conference. In the meantime, in order to ensure continuity of the work already started at lot 0, on 31 May 2011 Autostrade per l Italia sent ANAS the final design for lot 1, including the motorway widening work not affected by the variation. Florence South Incisa The Services Conference was concluded positively on 31 May 2011 in respect of the sections external to the San Donato tunnel. These works are awaiting the final agreement between central government and the regional authority. 45

48 2. Report on operations The Final Design and Environmental Impact Study for the sections relating to the San Donato tunnel were sent to the relevant authorities on 21 June 2011, in readiness for the start of the Environmental Impact Assessment (EIA). Investment in major works by Autostrade per l Italia IV Addendum 2002 At 30 June 2011 over 66% of the works have been authorised, over 65% have been contracted out and more than 29% have been completed. Lainate Como Work on the third lane of the A9 between Lainate and Como Grandate is proceeding apace. The new Lainate interchange will be open to traffic in time for the summer holiday season. Thanks to award of the contract to the subsidiary, Pavimental, the new Lainate interchange was opened to traffic 14 months ahead of schedule on 26 July 2011, smoothing traffic flow and improving safety for vehicles switching between the A8 and A9 motorways. The Group expects to have the entire section open to traffic by 31 July 2012, seven months ahead of the contractually agreed completion date. Rimini North Porto Sant Elpidio Work on the 37 km section of lot 6A between Ancona South and Porto Sant Elpidio, which began in March 2007, is almost complete. The 33 km stretch between the Ancona South junction and the Chienti service area is open to traffic. Widening work is currently underway on the remaining section, with the exception of the 17.2 km between Ancona North and Ancona South (lot 5), for which the contract was signed on 25 November The contractor has so far completed the executive design. Autostrade per l Italia aims to be able to give the go ahead for work to start by the end of 2011, after ANAS has approved the executive design. Contractual agreements have been entered into speeding up work on lots 1A, 2, 3 and 6B (53.8 km), so as to be able to open the relevant motorway to traffic 4 to 8 months ahead of the original completion date. The new Senigallia toll station (lot 3) was opened to traffic around 5 months ahead of schedule on 21 April km of the new third lane on the northbound stretch between Fano and Senigallia (lot 3) was opened to traffic 3 months ahead of schedule on 21 July The new Porto Sant Elpidio junction (lot 6B) was opened to traffic 4 months ahead of schedule on 29 July

49 Operating review of the Group s operators Fiano Settebagni di Roma Award of the contract directly to the subsidiary, Pavimental, made it possible to open the Castelnuovo di Porto junction to traffic 7 months ahead of the contractually agreed completion date on 27 July The entire section of motorway was opened to traffic on 1 August 2011, 9 months ahead of the contractually agreed completion date. Genoa Bypass Following conclusion of the public consultation process on 8 February 2010, and after receiving approval from the various entities involved, the Ministry of Infrastructure and Transport, Genoa Provincial Authority, the Municipality of Genoa, the Genoa Port Authority, ANAS and Autostrade per l Italia signed the new memorandum of understanding, which sets out the new solution agreed upon and identifies the next steps to be taken in order to proceed with work on the project. The Memorandum of understanding was also signed by Liguria Regional Authority on 13 April An initial estimate contained in the preliminary design indicates that the total cost of constructing the Genoa Interchange will be E3.1 billion. This figure will be confirmed in the final and executive designs. Autostrade per l Italia has prepared the final design and the environmental impact study for the Genoa Interchange (or Gronda di Ponente). On 15 June 2011 the company submitted a request, pursuant to article 23 of Legislative Decree 152/06, to start the EIA procedure and for permission to file and publish the final design and the environmental impact study. Autostrade per l Italia has prepared the final design for the San Benigno Interchange. The Services Conference began on 14 April Observations made by the general public and local authorities have been taken into account when revising the design. It is hoped that the process will be concluded with the Services Conference called for 4 August Tunnel Safety Plan At 30 June 2011 the upgrade of 289 tunnels has been completed out of a total of 550 approved designs, whilst work on the remaining 261 is underway. 269 tunnels out of a total of 407 have been completed, whilst work is underway on the remaining 138. Planned investments in major works by the Group s other motorway operators With regard to investments in major works by Autostrade per l Italia s subsidiaries (Raccordo Autostradale Valle d Aosta, Autostrade Meridionali and Società Autostrada Tirrenica), at 30 June 2011 over 32% of the works has 47

50 2. Report on operations been authorised, around 32% of the works is being carried out or the related contracts are being awarded, and 31% has been completed. Contract reserves quantified by contractors At 30 June 2011 operators have recognised contract reserves quantified by contractors amounting to E780 million, including E320 million regarding works envisaged in Autostrade per l Italia s Agreement of 1997, the additional cost of which cannot be recovered via higher toll charges. Network operations Safety, maintenance and traffic management The death rate on the network operated by Autostrade per l Italia in the first half of 2011 was 0.34 (unchanged with respect to the same period of 2010), whilst the accident rate was 29.2 (32.0 in the first half of 2010). Rollout of the new system for measuring the average speeds of vehicles using a particular stretch of motorway ( Tutor ) continues. One year from its installation on a number of sections of motorway, the new system has resulted in a 19% reduction in accidents, with the number of deaths falling 51%. At 30 June 2011 Tutor has been installed along approximately 2,500 km of carriageway, representing approximately 39% of the network operated by Autostrade per l Italia and the Group s other Italian motorway operators. The system will soon be installed on the network operated by Autostrade per l Italia and its subsidiaries on the A16 between Naples and Canosa and on the A12 between Genoa and Sestri Levante. Routine and unscheduled maintenance continued as part the operators commitment to guaranteeing ever better operating standards. Draining pavement now covers 81.9% of Autostrade per l Italia s network, with the percentage rising to nearly 100% of the network where it is possible to lay draining pavement, thus excluding mountain stretches, tunnels and sections where new road construction work is taking place. During the first half of 2011 traffic conditions on Autostrade per l Italia s network also benefitted from a 60% reduction in the hours of snowfall per kilometre compared with the same period of

51 Operating review of the Group s operators Toll collection and payment systems Transactions handled by automated tolling systems on the network operated by Autostrade per l Italia and its Italian subsidiaries accounted for 78.05% of total transactions in the first half of 2011 (76.20% in the first half of 2010). Payments using Telepass accounted for 58.23% of total transactions, compared with 56.70% in the same period of At 30 June 2011 approximately 7.5 million Telepass devices are in use on the Italian motorway network. Service areas and advertising Royalties on the revenue generated by the retail activities of sub operators at service areas on the network managed by Autostrade per l Italia and its subsidiaries (including Stalexport Autostrada Malopolska and excluding Società Autostrada Tirrenica) amount to E124.1 million for the first half of 2011, marking an increase of 1.4% in recurring royalties compared with the same period of This primarily reflects the annual increases applied from 1 January The planned upgrade of service areas on Autostrade per l Italia s network continues. At 30 June 2011 approximately 95.3% of the works included in the E800 million upgrade programme, covering works to be carried out at service areas by both Autostrade per l Italia and sub operators, had either been started or completed. Work on 191 service areas has already been completed by Autostrade per l Italia and sub operators, whilst expansion and renovation work is being carried out by Autostrade per l Italia at a further 10 service areas. In the first six months of 2011 the subsidiary, AD Moving SpA, earned revenue of approximately E7.0 million (down E0.3 million on the same period of 2010) from the management and marketing of advertising space along the motorway network and on other locations. This reflects a downturn in the billboard of more than 20% (Nielsen data for the first four months of 2011). 49

52 2. Report on operations Operating review of the other main subsidiaries Pavimental The company operates as a motorway maintenance provider and is carrying out a number of major infrastructure works for the Group. Compared with the first half of 2010, revenue of E312.6 million (including E16.3 million from customers outside the Group) is up E125.2 million (66.8%). This is primarily due to the increased volume of infrastructure construction work carried out (up E104.0 million) and increased work on other contracts awarded by Autostrade per l Italia, including roadside barriers and the elimination of noise pollution (up E20.2 million) and other customers (Società Autostrada Tirrenica, up E11.0 million). In contrast, maintenance revenue is down E6.9 million. EBITDA is E6.5 million for the first half of 2011, compared with negative EBITDA of E0.1 million in the same period of Spea Ingegneria Europea The company supplies engineering services, primarily to the Group. It offers design, project management and monitoring services for upgrade and extraordinary maintenance of the network. Revenue of E76.6 million for the first half of 2011 (including E1.7 million from customers outside the Group) is up 13.1% (E8.9 million) on the same period of the previous year. This is primarily due to an increase design work for infrastructure projects (above all the final design for the Genoa Interchange on behalf of Autostrade per l Italia and completion of the A12 Livorno Civitavecchia for Società Autostrada Tirrenica). 98% of the company s revenue in the first half of 2011 was earned on services provided to the Group. EBITDA, E28.2 million for the first half of 2011, is up E6.1 million on the same period of the previous year. Telepass The company is responsible for operating motorway toll collection systems providing an alternative to cash payments: the Viacard direct debit card and Telepass devices. At 30 June 2011 the number of Telepass devices in circulation exceeds 7.5 million (up 420 thousands units on 30 June 2010), with the number of subscribers of the Premium option totalling 1.3 million (up 250 thousands units on 30 June 2010). Revenue of E64.1 million in the first half of 2011 was primarily generated by Viacard 50

53 Operating review of the other main subsidiaries subscription fees of E10.8 million (in line with the corresponding previous period), Telepass fees of. E43.4 million (up E2.5 million on the first half of 2010) and payments for Telepass Premium services of E4.9 million (up E0.8 million on the first half of 2010). The company s EBITDA of E36.5 million results in an EBITDA margin of 56.9%. Autostrade Tech Formed as a result of the spin off of the Group s technology unit in January 2010, Autostrade Tech supplies and operates road tolling, charging, control and monitoring systems for urban areas, car parks and interports in Italy and around the world. Revenue of E21.8 million in the first half of 2011 is up E4.3 million (24.5%) on the first half of 2010, reflecting the sale of the latest generation OBU (on board unit), named Brunelleschi, to Telepass (E3.4 million), the sale of vehicle access control systems to the municipalities of Pisa and Perugia, and the sale to Strada dei Parchi of motorway traffic management systems. EBITDA of E4.04 million for the first half of 2011 is down 19.5% (E5.0 million in the first half of 2010). The reduction reflects the increase in overheads resulting from the tender process for the Eco Taxe Poids Lourds project in France and the subsequent award of the contract, as well as increased personnel expense due to a rise in the average workforce. TowerCo TowerCo is responsible for the construction and management of fully equipped sites located around the motorway network managed under concession by the Group and on land owned by other parties (ANAS, municipal authorities and other motorway operators). These sites host antennae and equipment used by commercial operators (mobile communications companies and TV and radio broadcasters) and public services (police, Isoradio or traffic monitoring systems). At the end of June 2011, a total of 276 sites are operating (with 74 providing GSM/UMTS coverage in motorway tunnels), 2 sites are under construction, and a further 25 sites are being designed or are at the authorisation stage. The company reports revenue of E9.3 million for the first half of 2011 (E9.5 million in the first half of 2010), with EBITDA of E5.6 million, compared with E5.7 million for the first half of

54 2. Report on operations Electronic Transaction Consultants Electronic Transaction Consultants (ETC) is the leading US provider of systems integration, hardware and software maintenance, customer services and consultancy in the field of free flow electronic tolling systems. Via its subsidiary, Autostrade International US Holdings, Autostrade per l Italia holds a 45% stake in the company, which, as a result of a call option on a further 16% of the company s shares, is thus accounted for as a subsidiary under the relevant accounting standards and consolidated in the Group s accounts. On 24 May 2011 ETC was selected by the Port Authority of New York and New Jersey (PANY) to supply and operate a free flow tolling system for a number of major highways linking the State of New York with the State of New Jersey (including the George Washington Bridge). The contract, which was signed on 29 July 2011, is worth a total of approximately US$82 million (E57 million). ETC generated revenue of E22.4 million in the first half of 2011, marking an increase of 32.1% (up 39.7% after adjusting for exchange rate movements) compared with the same period of 2010 (E17.0 million). Gross operating profit (EBITDA) of E2.7 million compares with a small loss of E0.1 million for the first half of

55 Operating review of the Group s main investee companies Operating review of the Group s main investee companies Autostrade Sud America On 30 June 2011 Atlantia announced that it had completed the acquisition of the Acciona group s 50% stakes in the Chile based companies Sociedad Concesionaria Autopista Vespucio Sur SA (Vespucio Sur), Sociedad Concesionaria Litoral Central SA (Litoral Central) and Sociedad de Operacion y Logistica Infraestructura SA (Operalia) under the agreement signed on 18 April Under the agreements entered into by Atlantia and SIAS on 1 June 2011, the transaction was completed via a newly established company, Nueva Inversiones SA, indirectly controlled via the 50% stakes held by Atlantia and Autopista do Pacifico (a company in which, as previously reported, Atlantia and SIAS each hold 45.77% interests). Nueva Inversiones, initially a wholly owned subsidiary of Autopista do Pacifico, already held, via a demerger, 50% of the companies included in the agreement with Acciona. The Atlantia Group then subscribed and paid for newly issued shares in Nueva Inversiones, in order to acquire 50% of this special purpose company, thus contributing the financial resources necessary to enable it to act on behalf of the Group and acquire the remaining 50% of the companies included in the above agreement with the Acciona group for the same price of 9.27 million Unidad de Fomento (approximately E290 million). Following completion of the above transactions, at 30 June 2011 Nueva Inversiones holds 100% stakes in Vespucio Sur, Litoral Central and Operalia. The Atlantia Group has given a binding commitment to sell at the same purchase price, and Autopista do Pacifico has given a binding commitment to acquire, the 50% stake that it will subsequently hold in Nueva Inversiones to Autopista do Pacifico, once the latter s stock market listing has been successfully completed (within one year). To this end, on 31 March 2011 the Offering Circular prepared in readiness for the listing of shares in Autopista do Pacifico SA on the Santiago Stock Exchange was deposited with the Superintendencia de Valores y Seguros (the Chilean securities commission). On completion of the above transactions, Autopista do Pacifico will indirectly have, through Nueva Inversiones, total control of the above operators acquired from the Acciona group. As a whole, the new group, which will soon change its name to Grupo Costanera SA, will operate a total of 189 km of toll motorway in Chile (including 100 km within the Santiago metropolitan area). Given the above reciprocal commitment between the Atlantia Group and Autopista do Pacifico, and deeming the latter s stock market listing to be highly likely, as at 30 June 2011 the investment in Nueva Inversiones has been accounted for in non current assets held for sale at a carrying amount of E287.7 million, in accordance with IFRS 5. Measurement of the investment in Autostrade Sud America as at 30 June 2011 using the equity method has resulted in recognition of a gain of E9.2 million in the income statement, and of a loss recognised in other comprehensive income of E12.7 million (reflecting the performance of the euro/chilean peso exchange rate during the period). This has resulted in a total decrease of E3.5 million in the carrying amount of the investment. 53

56 2. Report on operations Costanera Norte During the first six months of 2011 the operator Costanera Norte (a wholly owned subsidiary of Autostrade Sud America) recorded average daily traffic (including the light and heavy components) of 58,038 vehicles, representing a total of approximately million km travelled. This marks an increase of 7.9% on the same period of 2010 (average daily traffic during the first six months of 2010 amounted to 53,811 vehicles, representing a total of around million km travelled). Toll revenue for the period is up 20.0% on the first half of 2010 (15.0% after adjusting for exchange rate movements). From January 2011 the company has introduced the toll charge increase of 6.1% provided for under the concession arrangement, which is linked to consumer price inflation in 2010 (2.5%) plus a margin of 3.5%. In the first six months of 2011 Costanera Norte recorded revenue of E28.1 million, marking an increase of 16.1% (11.4% after adjusting for exchange rate movements) on the same period of 2010 (E24.2 million). Gross operating profit (EBITDA) of E21.0 million is up 21.5% (16.5% after adjusting for exchange rate movements) on the first six months of 2010 (E17.3 million). Nororiente During the first half of 2011, the motorway operated by the Chilean operator, Nororiente (a wholly owned subsidiary of Autopista do Pacifico), registered an average daily volume of traffic (including the light and heavy components) of 5,252 vehicles, amounting to a total of approximately 20.4 million kilometres travelled and registering an increase of 15% with respect to the same period of 2010 (in the first six months of 2010 an average daily volume of traffic of 4,571 vehicles, amounting to a total of approximately 17.8 million kilometres travelled). In the first six months of 2011 Nororiente recorded revenue of E1.7 million, marking an increase of 12.0% (7.4% after adjusting for exchange rate movements) on the same period of 2010 (E1.5 million). The company reports a gross operating loss (negative EBITDA) of E0.3 million, which is, however, an improvement on the loss of E1.5 million recorded for the same period of Litoral Central During the first half of 2011, the motorway operated by the Chilean operator, Litoral Central (a company in which Autopista do Pacifico and the Atlantia Group each indirectly hold 50% interests) registered an average 54

57 Operating review of the Group s main investee companies daily volume of traffic (including the light and heavy components) of 2,873 vehicles, amounting to a total of approximately 41.9 million kilometres travelled and registering an increase of 9.5% with respect to the same period of 2010 (in the first six months of 2010 an average daily volume of traffic of 2,624 vehicles, amounting to a total of approximately 38.3 million kilometres travelled). In the first six months of 2011 Litoral Central recorded revenue of E1.2 million, marking an increase of 12.4% (7.7% after adjusting for exchange rate movements) on the same period of 2010 (E1.1 million). Gross operating profit (EBITDA) of E0.2 million is an improvement on the loss of E0.1 million recorded for the same period of Vespucio Sur During the first half of 2011, the motorway operated by the Chilean operator, Vespucio Sur (a company in which Autopista do Pacifico and the Atlantia Group each indirectly hold 50% interests) registered an average daily volume of traffic (including the light and heavy components) of 75,169 vehicles, amounting to a total of approximately million kilometres travelled and registering an increase of 11.6% with respect to the same period of 2010 (in the first six months of 2010 an average daily volume of traffic of 67,365 vehicles, amounting to a total of approximately million kilometres travelled). In the first six months of 2011 Vespucio Sur recorded revenue of E31.3 million, marking an increase of 50.2% (44.0% after adjusting for exchange rate movements) on the same period of 2010 (E20.8 million). Revenue for the first half of 2011 benefitted from the reimbursement of approximately E4.0 million by the Ministry of Public Works to cover costs incurred in Gross operating profit (EBITDA) of E24.5 million is up 67.4% (60.5% after adjusting for exchange rate movements) on the same period of 2010 (E14.7 million). Triangulo do Sol On 11 June 2010 an agreement was reached with Leão & Leão Ltda for the acquisition of a 10% stake in Triangulo do Sol, the company that holds the concession for a 442 km toll motorway network in the state. of Sao Paolo in Brazil, expiring in The Group already holds 50% of Triangulo do Sol, acquired in. June The 10% interest is being bought at a price of 70 million Brazilian reals (equal to approximately E32 million). Completion of the transaction remains subject to approval by the local authorities. 55

58 2. Report on operations During the first half of 2011 Triangulo do Sol recorded a 6.8% increase in traffic using the motorway sections it operates (in transits), compared with the same period of Triangulo do Sol reports revenue of E58.4 million for the first half of 2011, marking an increase of 14.7% (10.0% after adjusting for exchange rate movements) on the same period of 2010 (E51.0 million). Gross operating profit (EBITDA) of E44.9 million is up 18.8% (14.0% after adjusting for exchange rate movements) on the same period of 2010 (E37.8 million). Measurement of the investment in Triangulo do Sol at 30 June 2011 using the equity method has resulted in recognition of a gain of E5.5 million in the income statement, and of a loss recognised in other comprehensive income of E1.7 million (reflecting the unfavourable performance of the euro/brazilian real exchange rate during the period). The carrying amount of the investment has also been reduced following the collection of dividends paid during the period (amounting to a reduction of E2.6 million). This has resulted in an increase of E1.2 million in the carrying amount of the investment compared with 31 December Pune Solapur Expressways Private Limited On 17 February 2009 Atlantia, in consortium (50 50) with TRIL Roads Private Limited, a Tata group company, was awarded a 21 year concession for the 110 km Pune Solapur motorway section in the Indian state of Maharashtra. Construction work and the widening of the motorway from two to four lanes are underway, having been divided into two lots for which contracts were awarded separately to the local companies, Oriental and IJM. Under the Concession Arrangement, construction work is to last 30 months from 14 November In reality, the necessary expropriations of land, which are responsibility of the Grantor, are behind schedule with respect to the deadline envisaged by the concession arrangement. The Operator is putting pressure on the Grantor to speed up the process. IGLI Measurement of the investment in IGLI SpA (the holding company in which Autostrade per l Italia, Argo Finanziaria and the Fondiaria SAI group each hold 33.3% interests, and which owns 29.96% of Impregilo, the biggest Italian construction group listed on the Milan Stock Exchange) at 30 June 2011 has resulted in an increase in the carrying amount of E1.3 million, including a gain of E0.8 million recognised in other comprehensive income and a gain of E0.5 million recognised in the income statement. The increase in the 56

59 Operating review of the Group s main investee companies carrying amount reflects the rise in the market value (stock market price) of the Impregilo shares held by IGLI compared with their carrying amount. Alitalia In view of the losses reported by the investee company, Alitalia, and of the negative impact of the economic downturn on certain key aspects of its operating environment, an impairment loss of E25 million has been recognised with respect to the carrying amount of the investment at 30 June

60 2. Report on operations Other information Agreement for the sale of a 69.1% interest in Società Autostrada Tirrenica On 13 May 2011 Autostrade per l Italia SpA reached an agreement with Banca Monte Paschi di Siena, Holcoa SpA, Vianco SpA and Società Autostrada Ligure Toscana pa for the sale of a stake of approximately 69.1% in Società Autostrada Tirrenica at a price of E67.7 million. Sociatà Autostrada Tirrenica, which is currently 94% owned by Autostrade per l Italia, holds the concession for the section of the A12 motorway in service between Livorno and Rosignano (approximately 37 km). The company also holds the concession to complete the section of the A12 between Livorno and Civitavecchia, totalling approximately 206 km, with construction of the first 4 km between Rosignano and San Pietro in Palazzi currently in progress. The agreement for the sale of a 69.1% stake in Società Autostrada Tirrenica was reached; the transfer of the shares is subject to clearance from ANAS, the Antitrust Authority and Autostrade per l Italia s lending banks, and completion of the procedure required by Società Autostrada Tirrenica s Articles of Association relating to the pre emption rights assigned to the existing minority shareholders. Sale of Strada dei Parchi On 30 May 2011 Autostrade per l Italia completed the initial closing of the sale of its 60% stake in Strada dei Parchi SpA to Toto Costruzioni Generali SpA, following fulfilment of the conditions precedent to which the related agreement was subject. Strada dei Parchi, which holds the concession to operate the A24 motorway linking Rome with L Aquila and Teramo and the A25 Torano Pescara motorway, is being sold for a total price of approximately E89 million. As a result, Autostrade per l Italia transferred a 58% interest in Strada dei Parchi to Toto for a consideration of approximately E86 million. Under the Agreement, the remaining 2% stake in Strada dei Parchi held by Autostrade per l Italia is subject to a call/put option exercisable at a price of E3 million. Exercise of the option and execution of the second closing are subject to the completion of certain works required by the Single Concession Arrangement. 58

61 Other information Bonus issue The bonus issue approved by the Extraordinary General Meeting of Atlantia s shareholders on 20 April 2011, pursuant to article 2442 of the Italian Civil Code, was completed on 6 June 2011, via the issue of 30,014,857 new ordinary shares with a par value of E30,014,857.00, ranking equally in all respects with the existing issued ordinary shares. Following execution of the above shareholder resolution, Atlantia SpA s fully subscribed and paid in issued capital at 30 June 2011 amounts to E630,311,992.00, represented by 630,311,992 ordinary shares with a par value of E1.00 each. As a result of the bonus issue, the number of treasury shares held at 30 June 2011 totals 12,652,968, equal to approximately 2.0% of the issued capital. No treasury shares were purchased or sold during the first half of Update of Medium Term Note Programme On 9 June 2011 Atlantia fully redeemed non convertible bonds with a par value of E2 billion listed on the Luxembourg Stock Exchange and issued on 9 June 2004 as part of the Company s E10 billion medium long term bonds. As a result of the above redemption, on the same date Atlantia s Board of Directors approved an update of the Programme and the related contracts, authorising the issue, as part of the Programme, of new bonds with a total carrying amount of up to E2,350 million by 31 March Eco Taxe Poids Lourds On 24 June 2011 France s Council of State reversed the sentence passed by the administrative court in Cergy Pontoise on 11 March 2011, annulling the tender that resulted in the award of a contract for the implementation and operation of a satellite based system for collecting taxes on heavy vehicles weighing over 3.5 tonnes on the country s 15,000 km road network (Eco Taxe Poids Lourds). The relevant tender process had been launched in May 2009 by France s Ministry of Ecology, Sustainable Development, Transport and Public Housing (the MEDDTL) and had been awarded by Autostrade per l Italia. 59

62 2. Report on operations The Council of State has confirmed the legality of the tender process and the full conformity of the tender terms and conditions with Autostrade per l Italia s bid, which was adjudged to be the most competitive in terms of both cost and technical aspects. The latest judgement will enable Autostrade per l Italia to re start the process of finalising the contract documentation, which will result in the signature of the partnership agreement with the MEDDTL. The contract will have a duration of thirteen years and is expected to be worth over E2 billion in revenue. 60

63 Workforce Workforce At 30 June 2011 the Group (excluding the workforce employed by Società Autostrada Tirrenica, a company in the process of being sold) employs 9,590 staff on permanent contracts and 856 temporary staff, resulting in a total workforce of 10,446. This is 276 (2.7%) up on the 10,170 of 31 December In detail the number of permanent staff is up 134 and the number of temporary staff up 142. The increase in permanent staff reflects trends at the following Group companies: Spea (up 25), as a result of an increase in design activities for the Group and the recruitment of additional staff to work on project management for construction work being carried out by Autostrade per l Italia; Pavimental (up 43), primarily linked to an increase in major works commissioned by Autostrade per l Italia; Electronic Transaction Consultants (up 87), following new contract wins in the states of Georgia, Florida and Texas; Italian operators (down 34), following a reduction in toll collectors (down 54, including a reduction of 37 at Autostrade per l Italia), partly offset, above all at Autostrade per l Italia, by selective additions to staff employed by a number of technical units at headquarters. The number of temporary staff is up 142, primarily reflecting increases at: Autostrade per l Italia, following greater use of seasonal toll collectors (up 94 and in line with the trend reported in June 2010); Pavimental (up 33), primarily reflecting an increase in activities relating to the installation of new noise absorbent barriers along the network; Electronic Transaction Consultants (up 19), resulting from new contract wins. The Group s average workforce (excluding Società Autostrada Tirrenica) is up from 9,396 in the first half of 2010 to 9,861 in the first half of 2011, representing an increase of 465 (up 4.9%). The main changes in the average workforce are primarily linked to the following: Spea (up 110 on average), as a result of an increase in design activities for the Group and the recruitment of additional staff to work on project management, including via the recruitment of temporary staff (up 24 on average); Pavimental (up 175 on average), reflecting the impact on the first two months of 2010 of the placement of workers on income support (Cassa Integrazione Guadagni or CIG) (2), and the above increase in staff working on infrastructure construction; (2) Staff on income support are included in the company s period-end figure but not in the average headcount. 61

64 2. Report on operations Pavimental Polska (down 72 on average), primarily regarding the reduction in administrative staff following closure of the Warsaw office; Electronic Transaction Consultants (up 258 on average), following contract wins in the states of Georgia, Florida and Texas; Autostrade International of Virginia (down 43 on average), following termination, in 2010, of the Operations & Maintenance contract for the Dulles Greenway motorway; Autostrade dell Atlantico (Chile) (up 66 on average), reflecting the insourcing of Operations & Maintenance activities by the Chilean operator, Los Lagos; Stalexport Autostrady group (up 12 on average), as a result of recruitment of additional toll collectors to guarantee service standards; Italian operators (down 50 on average), essentially following a reduction in toll collectors, partially offset by selective additions to staff employed by a number of technical units at Autostrade per l Italia s headquarters. Net personnel expense of E274.6 million is down E12.5 million (4.4%) on the E287.1 million of the first half of Capitalised personnel expense is up from E28.4 million in the first half of 2010 to E42.8 million in the same period of 2011, marking an increase of E14.4 million (up 50.7%). This is primarily due to the activities of Pavimental and Spea. Personnel expense, before deducting capitalised expenses, amounts to E317.4 million, marking an increase of E1.9 million (0.6%) on the first half of 2010 (E315.5 million). This is due to: the above increase of 465 in the average workforce (up 4.9%); a decrease in the average unit cost (down 4.3%), primarily due to the different impact of long term management incentive plans in the two corresponding periods (a reduction of E13.7 million or 4.4%). 62

65 Workforce Permanent staff (*) Position Increase/(Decrease) Absolute % Senior managers Middle managers Administrative staff 3,974 3, Manual workers 1,801 1, Toll collectors 2,965 3, Total 9,590 9, Temporary staff (*) Position Increase/(Decrease) Absolute % Senior managers n.a. Middle managers n.a. Administrative staff Manual workers Toll collectors Total Average workforce (*) Position Increase/(Decrease) Absolute % Senior managers Middle managers Administrative staff 4,065 3, Manual workers 1,846 1, Toll collectors 2,890 2, Total 9,861 9, (*) Excludes Strada dei Parchi and Società Autostrada Tirrenica. 63

66 2. Report on operations Significant regulatory aspects Snow events in December 2010 On 21 April 2011 ANAS sent Autostrade per l Italia four notices of violation regarding the snow events of December 2010 on the A1 near Florence, the A11 Florence Pisa North, the A14 and on the Pescara Vasto and Loreto Senigallia sections. The notices regard: (i) violation of art. 14 of the Highway Code and the ANAS circular of 8 October 2010; (ii) violation of Autostrade per l Italia s Winter Operations Plan; and (iii) violation of the requirements contained in ANAS s notice of 19 December 2008 and of the subsequent announcement by Aiscat (the Italian Association of Toll Motorway Operators) on 24 December 2008 regarding the full and prompt reporting of emergency situations to IVCA, ANAS s Motorway Concession Inspectorate (this violation does not apply to the notice regarding the A11). Autostrade per l Italia submitted its representations on 10 June A similar notice has been sent to Società Autostrada Tirrenica regarding the snow events on the A12 Livorno Rosignano Marittimo. With regard to the snow events on the A1 Milan Naples on 17 December 2010, the Antitrust Authority has also launched an investigation into the correctness of both the procedures implemented by Autostrade per l Italia in providing information to motorway users about actual driving conditions on the motorways it operates, and the procedures by which the company manages emergency events that have a significant impact on road conditions. On 4 January 2011 the Authority conducted an inspection at Autostrade per l Italia s Rome and Florence offices, obtaining documents and information. In subsequent meetings with the Authority, organised in relation to the proceedings, the company has explained the operational procedures involved in managing winter operations and in communicating with road users via the relevant public information channels (RAI, Isoradio) and by the other means at the company s disposal, namely Variable Message Panels. The company has also given the Antitrust Authority a commitment to improve the procedures used in communicating with road users in the event of adverse weather conditions. Having completed its investigation, on 25 July 2011 the Antitrust Authority notified Autostrade per l Italia that it did not accept the company s commitments and ruled that: (i) the company s conduct on the occasion of the specific event in question constitutes an unfair commercial practice under the Consumer Code, warning the company to desist from repeating the practice in the future, (ii) the company should pay an administrative fine of E350,000, (iii) Autostrade per l Italia must communicate, within 60 days of the date of receipt of the ruling, the initiatives its intends to take to comply with the cease and desist notice in point (i). Autostrade per l Italia is currently deciding whether or not to challenge the Authority s ruling before the Regional Administrative Court. 64

67 Significant regulatory aspects Other ongoing litigation Autostrade per l Italia is the defendant in two actions, which are still pending, brought before the Lazio Regional Administrative Court regarding toll charges. The actions, which have been brought by Codacons and other consumers associations, aim to challenge the toll increases introduced in 1999 and With regard to the preliminary design for the Rosignano Marittimo Civitavecchia section of the A12 motorway and the related approval process, in addition to a number of expropriations prior to work getting underway on lot 1 of the Rosignano San Pietro in Palazzi section of the motorway, Società Autostrada Tirrenica is a party, together with ANAS, CIPE (the Interministerial Economic Planning Committee), the Ministry of Infrastructure and Transport and other public bodies, to a number of legal actions pending before the Lazio Regional Administrative Court, and to a number of extraordinary appeals to the Head of State, contesting the CIPE resolution of 18 December 2008 published in the Official Journal of 14 May The Antitrust Authority s appeal to the Council of State requesting annulment of Lazio Regional Administrative Court sentences 4994/09 and 5005/09 is still pending. These sentences at first instance partly upheld the appeals brought by ACI Global SpA and Europ Assistance Vai SpA requesting annulment of Antitrust Authority ruling of 23 October 2008 regarding emergency breakdown services. Autostrade per l Italia is a party to the appeals with file numbers R.G. no. 8813/09 and no. 8814/09. On 21 March 2011 Autostrade per l Italia together with Genoa Provincial Authority, the Municipality of Genoa, the Ministry of Infrastructure and Transport, Genoa Port Authority and ANAS were notified of a legal action brought before Liguria Regional Administrative Court by several hundred members of the public requesting an injunction annulling the Memorandum of Understanding signed on 8 February 2010, relating to the construction of the Genoa Interchange (the so called Gronda di Ponente). A date for the related hearing has yet to be set. On 31 March 2011 Autostrade per l Italia appealed against the ruling issued by ANAS on 3 February 2011 before the Lazio Regional Administrative Court. The appeal regards the part in which, whilst approving the preliminary designs for the upgrade of the motorway referred to in art. 15 of the existing Single Concession Arrangement, ANAS assigns the operator responsibility for meeting the costs of the final design in the event the grantor and the operator fail to reach agreement on the inclusion of such works among the investment commitments. A date for a hearing on the merits has yet to be set. 65

68 2. Report on operations The hearing on the merits of Varese Provincial Authority s suit before the Lombardy Regional Administrative Court was held on 26 May The Authority is seeking cancellation, and an immediate injunction halting application, of Autostrade per l Italia s letter dated 28 September 2010, in which the operator informed the Authority that it was not possible to satisfy its request to eliminate the toll charge on the Varese Gallarate section of motorway, in addition to all arrangements governing tolls on the above motorway section. The court s judgement at first instance is awaited. On 30 May 2011 Autostrade per l Italia filed appeal before the Lazio Regional Administrative Court. against three rulings issued by ANAS, approving expert appraisals of contract variations regarding the. A4 Milan Bergamo Brescia motorway. The appeal regards the part in which the rulings do not recognise the right to a return on the higher amount resulting from the approved appraisals. Judgement is pending, as dates for the related hearings have yet to be set. Finally, Autostrade per l Italia is the defendant in a number of legal actions regarding expropriations, tenders and claims for damages deriving from motorway activities. On 29 July 2011 the Lombardy Regional Administrative Court announced that the legal challenge filed by Varese Provincial Authority had been unsuccessful. 66

69 Events after 30 June 2011 Events after 30 June 2011 Law Decree 98 of 6 July 2011, converted with amendments into Law 111 of 15 July 2011 Law Decree 98 of 6 July 2011 has, with effect from 1 January 2012, set up the Highways Agency within the Ministry of Infrastructure and Transport, which is responsible for the Agency s policy setting, supervision and control, to be carried out, in respect of financial aspects, in coordination with the Ministry of the Economy and Finance. Among other things, the Agency will take over the role of grantor for existing highway concessions from ANAS, exercising every aspect of the role previously assigned to IVCA, the Motorway Concession Inspectorate, which will be abolished from 1 January The Agency will have the following roles and responsibilities: to propose: (i) plans for the construction of new public roads and new motorways to be operated under concession or to be assigned directly to ANAS, provided that this does not have a negative impact on the public finances, and (ii), again provided that the above condition is met, the direct award to ANAS of concessions to operate motorways where the related concessions have expired or have been revoked; to act as grantor, with responsibility therefore: (i) for selecting motorway operators and awarding the related concession; (ii) for supervising and controlling motorway operators (supervision of construction and operation); and (iii) as an alternative to point (i) above, for awarding concessions directly to ANAS, to be approved by decree issued by the Ministry of Infrastructure and Transport in coordination with the Ministry of the Economy and Finance; to approve designs for works of national importance to be carried out on the road and motorway network, where such works are declared to be of public utility and to be urgent; to make proposals regarding the regulation and revision of tariffs for motorway concessions. With effect from 1 January 2012 ANAS will, within the limits of the available resources and in accordance with public finance objectives, be responsible for: (i) building and operating roads, including toll roads, and public motorways, including as a result of the takeover of concessions that have expired or been revoked provided that this does not have a negative impact on the public finances collecting the related revenue generated by their use; (ii) implementing progressive improvements and upgrades of the public road and motorway network; (iii) providing traffic police services. 67

70 2. Report on operations Stalexport Autostrada Malopolska From 1 July 2011 the shadow toll system previously applied to vehicles weighing over 12 tonnes was abolished and replaced by a system of real tolls, under which these vehicles pay zlotys per kilometre. In addition, the toll for heavy vehicles weighing less than 12 tonnes has also been raised by 11.1% from 1 July

71 Outlook Outlook Despite a slight fall in traffic during the first six months of the year, linked to the weakness of the economic situation, we continue to expect an improvement in the Group s operating performance for the full year 2011, compared with For the Board of Directors The Chairman 69

72

73 3 Condensed interim consolidated financial statements

74 3. Condensed interim consolidated financial statements Consolidated financial statements Consolidated statement of financial position ASSETS (E000) Note NON CURRENT ASSETS Property, plant and equipment , ,432 Property, plant and equipment 209, ,272 Property, plant and equipment held under finance leases Investment property Intangible assets ,169,781 16,187,581 Intangible assets deriving from concession rights 11,731,301 11,751,981 Goodwill and other intangible assets with indefinite lives 4,400,053 4,401,445 Other intangible assets 38,427 34,155 Investments , ,547 Investments accounted for at cost or fair value 79, ,450 Investments accounted for using the equity method 338, ,097 Other non current financial assets , ,422 Non current financial assets deriving from concession rights 374, ,719 Non current financial assets deriving from government grants 157, ,538 Term deposits convertible after 12 months 322, ,930 Non current derivative assets 27,696 40,209 Other non current financial assets 60,633 34,026 Deferred tax assets 7.5 1,951,991 2,101,817 Other non current assets 7.6 4,084 5,472 TOTAL NON CURRENT ASSETS 19,697,610 19,878,271 Current assets Trading assets 7.7 1,022, ,176 Inventories 45,131 45,197 Contract work in progress 37,582 36,457 Trade receivables 939, ,522 of which due from related parties 104,932 55,313 Cash and cash equivalents ,917 2,533,250 Cash 453, ,078 Cash equivalents 324,390 2,326,172 Other current financial assets , ,819 Current portion of medium/long term financial assets 2,552 21,988 Current financial assets deriving from concession rights 7,145 8,853 Current financial assets deriving from government grants 139, ,436 Term deposits convertible within 12 months 58, ,947 Other current financial assets 139,886 34,595 Current tax assets ,577 29,715 of which due from related parties 11,461 11,461 Other current assets ,792 74,667 Non current assets held for sale and related to discontinued operations ,533 1,107,734 TOTAL CURRENT ASSETS 2,872,977 5,154,361 TOTAL ASSETS 22,570,587 25,032,632 72

75 Consolidated financial statements EQUITY AND LIABILITIES (E000) Note EQUITY Equity attributable to owners of the parent 3,398,149 3,183,391 Issued capital 630, ,297 Reserves and retained earnings 2,546,643 2,324,613 Treasury shares 215, ,644 Profit for the year after payment of interim dividends 436, ,125 Equity attributable to non controlling interests 408, ,510 Issued capital and reserves 404, ,706 Profit/(Loss) for the year after payment of interim dividends 3,281 17,804 TOTAL EQUITY ,806,338 3,586,901 NON CURRENT LIABILITIES Provisions for construction services required by contract ,991,627 4,315,051 Non current provisions , ,982 Provisions for employee benefits 133, ,604 Provisions for repair and replacement obligations 796, ,281 Other provisions for risks and charges 21,488 21,097 Non current financial liabilities ,341,761 10,066,909 Bond issues 7,430,992 7,466,600 Medium/long term borrowings 2,652,080 2,323,273 Non current derivative liabilities 258, ,599 Other non current financial liabilities 23,437 Deferred tax liabilities ,999 33,666 Other non current liabilities ,339 44,151 TOTAL NON CURRENT LIABILITIES 15,355,398 15,401,759 CURRENT LIABILITIES Current portion of provisions for construction services required by contract , ,660 Current provisions , ,778 Provisions for employee benefits 9,760 46,615 Provisions for repair and replacement obligations 120, ,341 Other provisions for risks and charges 55,193 56,822 Trading liabilities ,574,833 1,307,429 Trade payables 1,574,833 1,307,429 of which due to related parties 56,533 27,808 Current financial liabilities ,431 2,561,332 Bank overdrafts 68 19,857 Short term borrowings 174,558 6,574 of which due to related parties 11,557 Current portion of medium/long term financial liabilities 291,114 2,533,779 Current account balances payable to unconsolidated companies Other current financial liabilities 2, Current tax liabilities ,908 17,278 Other current liabilities , ,862 Liabilities related to discontinued operations ,600 1,072,633 Total current liabilities 3,408,851 6,043,972 TOTAL LIABILITIES 18,764,249 21,445,731 TOTAL EQUITY AND LIABILITIES 22,570,587 25,032,632 73

76 3. Condensed interim consolidated financial statements Consolidated income statement (E000) Note H H REVENUE Toll revenue 8.1 1,572,673 1,462,056 Revenue from construction services , ,410 Contract revenue ,818 28,706 Other operating income , ,312 of which related parties 37,218 37,760 TOTAL REVENUE 2,296,230 2,111,484 COSTS Raw and consumable materials , ,248 Purchases of materials 162, ,631 Change in inventories of raw and consumable materials and goods 2,852 4,617 Service costs , ,047 Service costs 627, ,047 of which related parties 22,169 20,887 Gain/(loss) on sale of property, plant and equipment Cost of settling disputes 226 Personnel expense , ,451 Other operating costs , ,759 Concession fees 222, ,299 Lease expense 9,546 8,819 Change in provisions for repair and replacement obligations 7,608 9,117 Other provisions 3,915 3,153 Other operating costs 34,106 37,371 Use of provisions for construction services required by contract , ,601 Amortisation and depreciation 247, ,257 Depreciation of property, plant and equipment ,297 24,473 Amortisation of concession rights 7,2 212, ,413 Amortisation of other intangible assets 7.2 9,849 9,371 (Impairment losses)/reversals of impairment losses ,485 8,214 TOTAL COSTS 1,394,968 1,294,357 OPERATING PROFIT/(LOSS) 901, ,127 74

77 Consolidated financial statements (E000) Note H H Financial income , ,614 Financial income 62, ,569 Dividends received from investee companies Financial expenses , ,181 Financial expenses from discounting of provisions for construction services required by contract and other provisions 89,439 67,379 Other financial expenses after government grants 347, ,802 Foreign exchange gains/(losses) ,343 4,026 FINANCIAL INCOME/(EXPENSES) 371, ,541 Share of profit/(loss) of associates and joint ventures accounted for using the equity method ,931 3,409 PROFIT/(LOSS) BEFORE TAX FROM CONTINUING OPERATIONS 543, ,177 Income tax (expense)/benefit , ,783 Current tax expense 164, ,411 Differences on current tax expense for previous years 97, Deferred tax income and expense 139,426 25,680 PROFIT/(LOSS) FROM CONTINUING OPERATIONS 338, ,394 Profit/(loss) from discontinued operations ,063 8,612 PROFIT FOR THE PERIOD 440, ,782 of which: Profit attributable to owners of the parent 436, ,605 Profit/(loss) attributable to non controlling interests 3,281 3,823 (E) H H Basic earnings per share attributable to the owners of the parent (E) of which: from continuing operations from discontinued operations Diluted earnings per share attributable to the owners of the parent (E) of which: from continuing operations from discontinued operations

78 3. Condensed interim consolidated financial statements Consolidated statement of comprehensive income (E000) Note H H Profit for the period (A) 440, ,782 Fair value gains/(losses) on cash flow hedges 30,314 9,162 Gains/(losses) from translation of financial statements denominated in functional currencies other than the euro Gains/(losses) from measurement of associates and joint ventures using the equity method 11,516 10,827 14,452 25,727 Other fair value gains/(losses) Other comprehensive income for the period, after related taxation 4,056 27,225 Reclassifications of components of comprehensive income in profit/(loss) for the period Fair value gains on cash flow hedges reclassified to profit/(loss) for the period Total other comprehensive income for the period, after related taxation and reclassifications to profit/(loss) for the period (B) ,652 27,225 Comprehensive income for the period (A + B) 444, ,007 of which: attributable to owners of the parent 442, ,956 attributable to non controlling interests 1,797 3,949 Statement of changes in consolidated equity (E000) Equity attributable to owners of the parent Issued capital Cash flow hedge reserve Currency translation reserve Balance as at ,712 3,083 3,283 Total comprehensive income for the period 8,694 10,411 Owner transactions and other changes Bonus issue 28,585 Final dividend approved Retained earnings for the previous year Other minor changes Balance as at ,297 5,611 7,128 Balance as at ,297 53,357 15,782 Total comprehensive income for the period 31,519 10,770 Owner transactions and other changes Bonus issue 30,015 Final dividend approved Retained earnings for the previous year Change in basis of consolidation, capital contributions and other changes 4,404 Balance as at ,312 84,876 9,416 76

79 Consolidated financial statements Reserve for investments accounted for using the equity method Equity attributable to owners of the parent Other reserves and retained earnings Treasury shares Profit/(Loss) for the period Total Equity attributable to non controlling interests Total equity 11,256 2,080, , ,656 2,810, ,395 3,197,210 25, , ,956 3, ,007 28, , ,054 2, , , , ,983 2,195, , ,605 2,928, ,067 3,308,742 53,977 2,201, , ,125 3,183, ,510 3,586,901 14, , ,974 1, ,771 30, , ,006 2, , , ,119 3, ,790 5,238 7,028 36,116 2,416, , ,838 3,398, ,189 3,806,338 77

80 3. Condensed interim consolidated financial statements Consolidated statement of cash flows (E000) Note H H CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES Profit for the period 440, ,782 Adjusted by: Amortisation and depreciation 248, ,024 Provisions 3,132 17,499 Financial expenses from discounting of provisions for construction services required by contract and other provisions Impairment losses/(reversal of impairment losses) on non current financial assets and investments accounted for at cost or fair value Share of (profit)/loss of associates and joint ventures accounted for using the equity method Impairment losses/(reversal of impairment losses) and adjustments of other non current assets 89,600 68,058 25, ,931 3,409 5,671 3,940 (Gain)/Loss on sale of non current assets 94, Net change in deferred tax (assets)/liabilities 138,050 20,521 Other non cash items 4,759 7,190 Change in working capital and other changes 186,207 96,408 Net cash generated from/(used in) operating activities (A) 9.1 1,017, ,141 CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES Investments in motorways infrastructure 676, ,383 Government grants related to motorway infrastructure 36, ,290 Increase in financial assets deriving from takeover rights (related to investments in motorway infrastructure) 5,549 36,636 Purchases of property, plant and equipment ,928 24,547 Purchases of intangible assets ,917 9,132 Purchase of investments, net of unpaid called up issued capital ,747 2,053 Dividends received from investee companies accounted for using the equity method 2,622 6,114 Proceeds from sales of property, plant and equipment, intangible assets and unconsolidated investments Proceeds from sale of consolidated investments, net of cash and cash equivalents transferred 1,339 27,252 58,264 Net change in other non current assets 1, Net change in current and non current financial assets not held for trading purposes 73, ,277 Net cash generated from/(used in) investing activities (B) , ,315 CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES Dividends paid 231, ,093 Net change in the currency translation reserve and other reserves 9,872 10,541 New shareholder loans 2,137 Net change in issued capital and reserves attributable to non controlling interests Increase in medium/long term borrowings (excluding finance lease liabilities) 443,738 4,998 Increase in finance lease liabilities 177 Redemption of bonds ,000,000 Repayments of medium/long term borrowings (excluding finance lease liabilities) , ,426 Payment of finance lease liabilities Net change in other current and non current financial liabilities 9,917 59,657 Net cash generated from/(used in) financing activities (C) 9.1 1,916, ,094 Net effect of foreign exchange rate movements on net cash and cash equivalents (D) Increase/(Decrease) in cash and cash equivalents (A + B + C + D) 9.1 1,742, ,574 Net cash and cash equivalents at beginning of period 2,519,950 1,179,827 Net cash and cash equivalents at end of period 777, ,253 78

81 Consolidated financial statements Additional information on the statement of cash flows Note H H Income taxes paid 64, ,721 Interest income and other financial income collected 65, ,345 Interest expense and other financial expenses paid 539, ,600 Dividends received Foreign exchange gains collected Foreign exchange losses incurred Reconciliation of net cash and cash equivalents Note H H Net cash and cash equivalents at beginning of period 2,519,950 1,179,827 Cash and cash equivalents 7.8 2,533,250 1,222,270 Bank overdrafts repayable on demand ,857 40,990 Bank account balances payable to unconsolidated Group companies ,453 Cash and cash equivalents related to discontinued operations 15,494 Bank overdrafts related to discontinued operations 8,056 Net cash and cash equivalents at end of period 777, ,253 Cash and cash equivalents , ,891 Bank overdrafts repayable on demand ,057 Bank account balances payable to unconsolidated Group companies ,153 Cash and cash equivalents related to discontinued operations ,934 Bank overdrafts related to discontinued operations ,362 79

82 3. Condensed interim consolidated financial statements Notes 1. Introduction The Atlantia Group s core business is the operation of motorways under concessions granted by the relevant authorities. Under the related concession arrangements, the Group s operators are responsible for the construction, management, improvement and upkeep of sections of motorway in Italy and overseas. Further information on the Group s concession arrangements is provided in note 4. The Group s activities are not, on the whole, affected by significant seasonal differences between the first and second halves of the year. The Parent, Atlantia SpA, listed on the Milan Stock Exchange, operates solely as a holding company. It is responsible for developing growth and financial strategies in the infrastructure sector, but does not have a direct operational role. The Company s registered office is in Rome, at Via Nibby, 20. The Company does not have branch offices. The duration of the Company is currently until 31 December At the date of preparation of these condensed interim consolidated financial statements, the shareholder that, via Schemaventotto SpA, directly and indirectly holds a relative majority of the issued capital of Atlantia SpA is Sintonia SA. Sintonia SA, which is in turn a subsidiary of Edizione Srl, does not exercise management and coordination activities on Atlantia SpA. The list of investments annexed to these notes also complies with the disclosure requirements of art. 126 of CONSOB Regulation 11971/1999 relating to investments of more than 10% of the issued capital of unlisted companies. These condensed interim consolidated financial statements were approved by the Board of Directors of Atlantia SpA at its meeting of 2 August Basis of presentation The condensed interim consolidated financial statements as at and for the six months ended 30 June 2011 have been prepared on the assumption that the Parent and consolidated companies are going concerns. They have been prepared pursuant to paragraphs 2 and 3 of article 154 ter Financial Reports of the Consolidated Finance Act and in compliance with the International Financial Reporting Standards (IFRS), above all with regard to IAS 34 Interim financial reporting (relating to the content of interim reports), issued by the International Accounting Standards Board and endorsed by the European Commission, and as in force at the end of the period. These standards include the interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC), in addition to previous International Accounting Standards (IAS) and interpretations issued by the Standard Interpretations Committee (SIC) and still in force at the end of the period. For the sake of simplicity, all the above standards and interpretations are hereinafter referred to as IFRS. Moreover, reference was made to the measures introduced by the CONSOB, in application of paragraph 3 of article 9 of Legislative Decree 38/

83 Notes The condensed interim consolidated financial statements consist of the consolidated accounts (income statement, statement of comprehensive income, statement of financial position, statement of changes in equity and statement of cash flows) and these notes. The Group has applied IAS 1 Presentation of financial statements and, in general, the historic cost convention, with the exception of those items that are required by IFRS to be recognised at fair value, as explained in the notes to the relevant items in the consolidated financial statements as at and for the year ended 31 December A summary of the basis of presentation of the condensed interim consolidated financial statements has been provided, in compliance with IAS 34. For a more complete description, these condensed interim consolidated financial statements should, therefore, be read in conjunction with the consolidated financial statements as at and for the year ended. 31 December The statement of financial position is based on the format that separately discloses current and non current assets and liabilities, whilst the income statement is classified by nature of expense. The statement of cash flows has been prepared in application of the indirect method. IFRS have been applied in accordance with the indications provided in the Framework for the Preparation and Presentation of Financial Statements, and no events have occurred that would require exemptions pursuant to paragraph 19 of IAS 1. CONSOB Resolution of 27 July 2006 requires that, in addition to the specific requirements of IAS 1 and other IFRS, financial statements must, where material, include separate sub items providing (i) disclosure of amounts deriving from related party transactions; and, with regard to the income statement, (ii) separate disclosure of income and expenses deriving from events and transactions that are non recurring in nature, or transactions or events that do not occur on a frequent basis during the normal course of business. In this regard, it should be noted that no material non recurring, atypical or unusual transactions were entered into during the first half of 2011, either with third or related parties. All amounts are shown in thousands of euros, unless otherwise stated. The euro is both the Group s functional currency and its presentation currency. Each component of the financial statements is compared with the corresponding amount for the corresponding reporting period. These corresponding amounts have not been restated and/or reclassified, with the exception of those referred to in note 5, which describes the reclassification of Società Autostrada Tirrenica s contribution to the income statement in accordance with IFRS Accounting standards applied The accounting standards and policies applied in preparation of the condensed interim consolidated financial statements as at and for the six months ended 30 June 2011 are consistent with those applied in preparation of the consolidated financial statements as at and for the year ended 31 December The notes to these financial statements contain a description of the relevant accounting standards and policies, to which reference should be made. A number of new accounting standards and interpretations and amendments to existing accounting standards and interpretations have come into effect during The most significant are as follows: a) interpretation IFRIC 14 and amendments to IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction; b) interpretation IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments; c) amendments to IFRS 3 Business Combinations; d) amendments to IAS 32 Financial Instruments: Presentation. The new standards and amendments to existing accounting standards and interpretations (the main aspects of which are described in the notes to the consolidated financial statements as at and for the year ended 31 December 2010, to which reference should be made) have not had a material impact on the condensed interim consolidated financial statements. Preparation of financial statements in compliance with IFRS involves the use of estimates and judgements, which are reflected in the measurement of the carrying amounts of assets and liabilities and in the disclosures provided in the notes 81

84 3. Condensed interim consolidated financial statements to the financial statements, including contingent assets and liabilities at the end of the reporting period. These estimates are especially important in determining amortisation and depreciation, impairment testing of assets (including the measurement of receivables), provisions, employee benefits, the fair value of financial assets and liabilities, and current and deferred tax assets and liabilities. The amounts subsequently recognised may, therefore, differ from these estimates. Moreover, these estimates and judgements are periodically reviewed and updated, and the resulting effects of each change immediately recognised in the financial statements. As required by IAS 36, in preparing the condensed interim consolidated financial statements the only assets tested for impairment are those for which there are internal and external indications of a reduction in value, requiring immediate recognition of the relevant losses. 4. Concession arrangements As noted above, the Group s core business is the operation of motorways under concession in Italy and overseas, under which the Group s operators are responsible for the construction and operation of motorways. Essential information regarding motorway concessions held by companies consolidated on a line by line basis by the Group is contained in note 5 to the consolidated financial statements as at and for the year ended 31 December 2010, to which reference should be made. There were no material changes to these consolidated companies concession arrangements during the first half of With regard to existing concessions, Group companies are engaged in the implementation of a programme of investment in Major Works worth approximately E13.7 billion. Works with a value of around E6.6 billion have already been completed and are included in the statement of financial position as at 30 June The investment programme, which forms part of operators financial plans, essentially regards the upgrade of existing motorways. 5. Basis and scope of consolidation Consolidation policies and methods are consistent with those used in preparation of the consolidated financial statements as at and for the year ended 31 December The scope of consolidation includes the Parent, Atlantia SpA, and all entities over which it exercises direct and indirect control. In addition to the Parent, Atlantia SpA, companies are consolidated when Atlantia SpA exercises control as a result of its direct or indirect ownership of a majority of the voting power of the relevant entities (including potential voting rights resulting from currently exercisable options), or because it is able to exercise dominant influence given its power to govern the entity s financial and operating policies and obtain the related benefits, regardless of its percentage interest in the entity. Entities are not included in the line by line consolidation if their operations would make them quantitatively or qualitatively irrelevant to a true and fair view of the Group s financial position and results of operations (for example, dormant companies or companies whose liquidation is close to completion). All entities over which control is exercised are consolidated from the date on which the Group gains control. Entities are deconsolidated from the date on which the Group ceases to control the entity. 82

85 Notes For the purposes of preparing the IFRS condensed interim consolidated financial statements, all consolidated companies have, as in previous years, prepared a special reporting package, based on the IFRS adopted by the Group. The exchange rates used for the translation of financial statements denominated in functional currencies other than the euro, as shown below, are those published by the Bank of Italy: Currency June Average rates for H1 30 June Average rates for H1 Euro/US dollar Euro/Polish zloty Euro/Chilean peso Euro/Brazilian real Euro/Indian rupee As a result of corporate actions during the first half of the year, as described below in note 6, the basis of consolidation at 30 June 2011 has changed with respect to 31 December This reflects the deconsolidation of Strada dei Parchi SpA, following the sale of the Group s controlling interest, and the first time consolidation of the following new companies, which are wholly owned and were incorporated during the first half of 2011: a) Ecomouv Sas, a French registered company that will sign the contract with France s Ministry of Ecology, Sustainable Development, Transport and Public Housing (the MEDDTL) relating to implementation and operation of a satellite based system for collecting taxes on heavy vehicles using a part of the country s road network; b) Ecomouv D&B Sas, a French registered company that will be contracted by Ecomouv Sas to implement the tolling system referred to in point a) above; c) Telepass France Sas, a French registered company that will offer motorway tolling services in France on a competitive basis, in addition to the tax collection systems referred to in point a) above; d) Inversiones Autostrade Holding do Sur Ltda, a Chilean registered holding company, which in June 2011 acquired (via the purchase of newly issued shares inclusive of a share premium), 50% of Nueva Inversiones SA, as described below in note 6. Finally, the Group has agreed to sell an interest of approximately 69.1% in Società Autostrada Tirrenica pa. Transfer of the shares is subject to clearance from ANAS, the Antitrust Authority and Autostrade per l Italia s lending banks, and completion of the procedure required by Società Autostrada Tirrenica s Articles of Association relating to the pre emption rights assigned to the existing minority shareholders. Autostrada Tirrenica s contribution to the consolidated income statement for the first half of 2011 has, therefore, been accounted for in Profit/(Loss) from discontinued operations, in accordance with IFRS 5 Non current Assets Held for Sale and Discontinued Operations, instead of being included in each component of the consolidated income statement for continuing operations. As a result, in accordance with IFRS 5, Società Autostrada Tirrenica s contribution to the corresponding consolidated income statement for the first half of 2010 has also been reclassified with respect to the statement published in the interim consolidated income statement for the six months ended 30 June Again in accordance with IFRS 5, the consolidated assets and liabilities of Società Autostrada Tirrenica as at 30 June 2011 have been accounted for in the statement of financial position in assets and liabilities related to discontinued operations, whilst presentation of the corresponding amounts as at 31 December 2010 has remained unchanged. 83

86 3. Condensed interim consolidated financial statements 6. Corporate actions during the first half of Sale of Strada dei Parchi On 30 May 2011 the Group completed the initial closing of the sale of its 60% stake in Strada dei Parchi SpA to Toto Costruzioni Generali SpA, following fulfilment of the conditions precedent to which the related agreement was subject. Strada dei Parchi, which holds the concession to operate the A24 motorway linking Rome with L Aquila and Teramo and the A25 Torano Pescara motorway, is being sold for a total price of approximately E89 million. As a result, a 58% interest in Strada dei Parchi was transferred to Toto for a consideration of approximately E86 million. Under the agreement, the remaining 2% stake in Strada dei Parchi held by Autostrade per l Italia is subject to a call/put option exercisable at a price of E3 million. Exercise of the option and execution of the second closing are subject to the completion of certain works required by the Single Concession Arrangement. The impact of the sale on the consolidated income statement for the six months ended 30 June 2011 has been recognised in Profit/(Loss) from discontinued operations, as described in note 8.14, together with the Group s share of this company s profit/(loss) for the period until the date of the sale. 6.2 Acquisition of 50% of Vespucio Sur, Litoral Central and Operalia On 18 April 2011 Atlantia reached agreement with the Acciona group for the acquisition, via a Chilean special purpose company partly owned by the Group, of 50% of Sociedad Concesionaria Autopista Vespucio Sur SA (Vespucio Sur), Sociedad Concesionaria Litoral Central SA (Litoral Central) and Sociedad de Operacion y Logistica Infraestructura SA (Operalia). The Group is to pay a total of 9.27 million Unidad de Fomento for the above stakes, equal to approximately E290 million at the closing exchange rate at 30 June The remaining 50% of the three companies is indirectly owned by Autopista do Pacifico SA, a subsidiary of Autostrade Sud America Srl, a company jointly controlled by the Group via an interest of approximately 45.77%. Subsequently, on 1 June 2011 Atlantia, Autostrade Sud America and Autopista do Pacifico agreed that on completion of its listing on the Santiago Stock Exchange (for which admittance has already been applied for), Autopista do Pacifico SA would have total control of Vespucio Sur, Litoral Central and Operalia, with the aim of achieving significant operating and financial synergies among Autopista do Pacifico s subsidiaries. To this end, the latter company established a new company, to be initially a wholly owned subsidiary, named Nueva Inversiones SA, to which it transferred the 50% interests in Vespucio Sur, Litoral Central and Operalia already indirectly owned by Autopista do Pacifico. Finally, on 30 June 2011 the Atlantia Group, acting through a newly established wholly owned subsidiary, Inversiones Autostrade Holding do Sur Ltda, acquired newly issued shares (inclusive of a share premium) in Nueva Inversiones, acquiring 50% of this special purpose company, thus contributing the financial resources necessary to enable it to acquire the remaining 50% of the companies included in the above agreement with the Acciona group for the same price of 9.27 million Unidad de Fomento. 84

87 Notes The Atlantia Group has given a binding commitment to sell, and Autopista do Pacifico has given a binding commitment to acquire, the Group s 50% stake in Nueva Inversiones, at a price equal to the costs incurred in acquiring the investment (essentially consisting of the cost of the above newly issued shares inclusive of the share premium). This commitment is subject to the condition precedent that Autopista Do Pacifico s shares are successfully listed on the Santiago Stock Exchange (by 31 May 2012). Given the above and in view of the fact that the success of the stock market listing is deemed highly likely, the investment in Nueva Inversiones has been accounted for in the condensed interim consolidated financial statements as at and for the six months ended 30 June 2011 in non current assets held for sale, as described in note 7.11, to which reference should be made. 7. Notes to the consolidated statement of financial position The following notes provide information on items in the consolidated statement of financial position as at 30 June Corresponding amounts at 31 December 2010 are shown in brackets. As described in note 6, movements in items in the statement of financial position during the first half of 2011 include changes relating to Società Autostrada Tirrenica, whose assets and liabilities as at 30 June 2011 have been reclassified to the specific items related to discontinued operations, as described in note Property, plant and equipment / E211,069 thousand (E216,432 thousand) The decrease in property, plant and equipment during the first half of 2011 primarily derives from the combined effect of the following: a) capital expenditure of E21,928 thousand; b) depreciation of E25,301 thousand. The following table shows changes in property, plant and equipment during the first half, including amounts at the beginning and end of the period. There were no changes in the expected useful lives of these assets during the first half. Property, plant and equipment at 30 June 2011 are free of mortgages, liens or other collateral guarantees of a material amount restricting use. Investment property refers to land and buildings not used in operations and measured at cost, amounting to E880 thousand. The total fair value of those assets are estimated to be approximately E5 million, based on independent appraisals and information on property markets relevant to these types of investment property. 85

88 3. Condensed interim consolidated financial statements (E000) Changes during the period Cost Cost Gross assets Total Accumulated depreciation Carrying amount Additions: purchases and capitalisations Assets entering service Disposals Currency translation differences Reclassifications and other adjustments Property, plant and equipment: Land 8,972 8,972 8, Buildings 88,936 88,936 33,983 54, Plant and machinery 117, ,271 70,653 46,618 4,328 1,036 2,717 2 Industrial and trading machinery 137, ,347 88,733 48,614 3,891 1,796 2, Other assets 176, , ,318 50,250 11, , Property, plant and equipment under construction and advances 5,964 5, ,865 1,198 3, Total 535, , , ,272 21,928 7, Property, plant and equipment held under finance leases: Property, plant and equipment acquired under finance leases 14,110 14,110 14, , Equipment acquired under finance leases Other assets acquired under finance leases Total 14,419 14,419 14, ,103 2 Investment property: Land Buildings 2,976 2,976 2, Total 3,014 3,014 2, Total property, plant and equipment 552, , , ,432 21,928 21, Intangible assets / E16,169,781 thousand (E16,187,581 thousand) Intangible assets recorded a net reduction of approximately E17,800 thousand in the first half of 2011, due to the combined effect of the following changes: a) amortisation of E223,145 thousand; b) reclassification of E157,769 thousand in assets, attributable to Società Autostrada Tirrenica and primarily regarding this company s concession rights, to assets related to discontinued operations; c) a reduction of E50,446 thousand in concession rights accruing from construction and/or upgrade services for which no additional economic benefits are received, with a corresponding decrease in provisions for construction services required by contract, deriving from the updated estimate of the present value of the construction services to be provided in the future; d) an increase accruing from construction and/or upgrade services for which additional economic benefits are received, totalling E410,231 thousand, including construction work (amounting to E5,549 thousand) carried out by Autostrade Meridionali during the period and reclassified to financial assets (takeover rights), in compliance with the operator s Single Concession Arrangement. There were no changes in the expected useful lives of intangible assets during the first half. In the first half of 2011 the Group invested a total of E676,917 thousand in motorway infrastructure (E587,383 thousand in the first half of 2010). In compliance with IFRIC 12, the operating costs and financial expenses connected to this investment are recognised in the income statement, based on their nature, together with the fair value of the related 86

89 Notes Changes during the period Accumulated depreciation Additions Disposals Currency translation differences Reclassifications and other adjustments Net reclassifications to assets related to discontinued operations Gross assets Cost Total Accumulated depreciation Carrying amount 9,072 9,072 9,072 1, ,652 89,652 35,695 53,957 5,481 1, , ,920 74,229 45,691 9,166 1, , ,399 95,955 44,444 8,740 2, , , ,812 53, ,152 3,152 3,152 25,238 6, , , , ,975 14, , ,965 2,965 2, ,003 3,003 2, ,301 20, , , , ,069 construction services performed. The following schedule shows the various components of investments in motorway infrastructure, recognised as a result of the construction services provided: (E000) H H Increase/(Decrease) Use of provisions for construction services required by contract for which no additional economic benefits are received Increase in intangible assets accruing from construction services for which additional economic benefits are received Revenue from government grants for construction services for which no additional economic benefits are received 230, ,601 6, , , ,807 36, ,358 80,894 Total investment in motorway infrastructure 676, ,383 89,534 Research and development expenditure of approximately E0.3 million was recognised in the income statement for the first half of These activities are carried out in order to improve infrastructure, the services offered, safety levels and environmental protection. With regard to the subsidiaries, Raccordo Autostradale Valle d Aosta and Stalexport Autostrada Malopolska, which, in common with the other operators, are Cash Generating Units (CGUs), the balance as at 30 June 2011 includes impairment losses on these companies concession rights of E193,843 thousand and E17,746 thousand, respectively, before the related deferred tax liabilities of E60,867 thousand and E3,372 thousand, respectively. The impairments were recognised in previous years as a result of the impairment tests required by IAS 36, and are based on estimated future cash flows through to the end of the respective concession terms. 87

90 3. Condensed interim consolidated financial statements The following table shows intangible assets at the beginning and end of the period and changes in the different categories of intangible assets during the first half of (E000) Changes during the period Cost Cost Accumulated impairments Accumulated amortisation Carrying amount Additions: purchases and capitalisations Changes due to updated estimate of present value of future obligations Additions due to execution of construction services Disposals Currency translation differences Reclassi fications and other adjustments Intangible assets deriving from concession rights: Acquired concession rights 277,669 17,814 58, ,796 4,604 26,266 Concession rights accruing from construction services for which no additional economic benefits are received 11,401,139 2,143,804 9,257,335 50, Concession rights accruing from construction services for which additional economic benefits are received Concession rights accruing from construction services provided by sub operators 3,182, , ,266 2,216, , ,311 88,249 12,265 75,984 Total 14,949, ,014 2,983,394 11,751,981 50, ,231 5,478 19,706 Goodwill and other intangible assets with indefinite lives: Goodwill 4,396, ,396,851 1,047 Trademarks 4,594 4, Total 4,401, ,401,445 1,392 Other intangible assets: Development costs 125, ,256 14,254 3, Industrial patents and intellectual property rights 49,852 1,281 41,660 6,911 6, ,080 Concessions and licenses 5,345 3,435 1, ,428 Other 4,386 1,089 3, Intangible assets under development and advances 9,064 1,281 7,783 4, ,421 Total 194,157 2, ,440 34,155 14, ,138 6,472 Total intangible assets 19,545, ,639 3,140,834 16,187,581 14,917 50, , ,008 13, Investments / E417,882 thousand (E431,547 thousand) The table on the next page shows carrying amounts at the beginning and end of the period, grouped by category, and changes in investments during the first half of There was a net reduction of E13,665 thousand during the period, substantially reflecting the combined effect of the following events: a) an impairment loss of E25,000 thousand with respect to the carrying amount of the investment in Alitalia Compagnia Aerea Italiana, recognised in view of the losses reported by the company and of the negative impact of the economic downturn on certain key aspects of its operating environment; b) the injection of further equity capital into Tangenziali Esterne di Milano, amounting to E9,600 thousand, and the operator, Pune Solapur Expressways Private, totalling E5,780 thousand; c) a reduction of E3,988 thousand in the carrying amount of investments accounted for using the equity method, recognised essentially in other comprehensive income and in the income statement. The process of accounting for investments using the equity method was based on the latest available approved financial statements of associates and joint ventures, supplemented by certain estimates, based on available information, if the 88

91 Notes Changes during the period Reclassi fications and other adjustments Impairments Accumulated amortisation Net reclassifications Currency translation differences Additions Disposals Currency translation differences Reclassi fications and other adjustments to assets related to discontinued operations Cost Accumulated impairments Accumulated amortisation Carrying amount 68 5,224 2,387 26, ,331 17,746 87, , , ,349,692 2,309,661 9,040,031 40, ,441 3,389, , ,615 2,422,795 1, ,892 13,590 74, ,296 2,576 26, ,769 15,126, ,494 3,182,278 11,731,301 4,395, ,395,804 4,249 4,249 4,400, ,400,053 6, , ,745 11,251 1,273 2, ,941 53, ,305 10, ,202 2,928 1,350 1, ,419 1,445 2,974 1,280 11, ,672 2,553 9, , , ,845 38,427 2, , ,922 22, ,769 19,727, ,566 3,345,123 16,169,781 interim financial statements as at and for the six months ended 30 June 2011 were not available and, where necessary, adjusted to be consistent with Group accounting policies. With specific reference to the investment in IGLI SpA, measurement of the related carrying amount was based on the statement of financial position and income statement of the Impregilo group as at and for the three months ended 31 March 2011, given that the condensed interim consolidated financial statements as at and for the six months ended 30 June 2011 are not available. Moreover, the fair value of the investment was updated on the basis of the related stock market price of the shares, since the estimated value in use is not considered reliable. This has resulted in a partial reversal of the previously recognised impairment losses, totalling E1,303 thousand. With regard to developments during the first half of 2011 in relation to the civil and criminal litigation involving Impregilo, previously described in Atlantia s consolidated financial statements for previous years, on 12 May 2011 Impregilo announced that the Naples Court of Review had turned down a further attempt on appeal by the Naples District Attorney to seize assets with a value of E245 million. An earlier attempt had been turned down by the Court at first instance. 89

92 3. Condensed interim consolidated financial statements Reporting on the above litigation in the Impregilo group s interim report as at and for the three months ended 31 March 2011, the directors announced that the group continues to report both the impairment losses recognised in previous years and provisions made at that date in response to the ongoing legal proceedings. (E000) Gross amount Changes during the period Gross amount Accumulated revaluations/ (impairment losses) Carrying amount Capital contributions Capital redemptions Investments accounted for at cost or fair value 112,346 7, ,450 7 Investments accounted for using the equity method 322,229 4, ,097 15,380 Total 434,575 3, ,547 15,380 7 The following table shows an analysis of the Group s principal investments, including the Group s percentage interest and the relevant carrying amount, net of unpaid, called up issued capital. (E000) % interest Carrying amount % interest Carrying amount Investments accounted for at cost or fair value Alitalia Compagnia Aerea Italiana SpA 8.9% 75, % 100,000 Firenze Parcheggi SpA 5.4% 2, % 2,582 Tangenziale Esterna SpA 1.3% % 625 Uirnet SpA 1.6% % 427 Emittente Titoli SpA 6.0% % 277 Veneto Strade SpA 5.0% % 258 Other smaller companies , ,450 Investments accounted for using the equity method Autostrade Sud America Srl 45.8% 159, % 163,037 Triangulo do Sol Auto estradas SA 50.0% 117, % 116,535 Tangenziali Esterne di Milano SpA 27.4% 19, % 9,509 IGLI SpA 33.3% 14, % 13,079 Pune Solapur Expressways Private Limited 50.0% 14, % 9,161 Società Infrastrutture Toscane SpA 46.6% 6, % 6,345 Bologna & Fiera Parking SpA 32.5% 3, % 4,444 Arcea Lazio SpA 34.0% 1, % 1,920 Geie del Traforo Del Monte Bianco 50.0% 1, % 1,000 Other smaller companies 657 2, , ,097 Total 417, ,547 90

93 Notes Changes during the period Revaluations/ (Impairment losses) of investments accounted for at cost or at fair value through profit or loss Revaluations/(Impairments) Measurement using the equity method through comprehensive income Measurement using equity method through profit or loss Measurement using equity method through equity Reclassifications to assets held for sale and other changes Gross amount Accumulated revaluations/ (impairment losses) Carrying amount 25, ,289 32,896 79,393 14,452 13, , ,151 5, ,489 25,000 14,452 13, , ,440 27, ,882 Annex 1 contains a list of all the Group s investments at 30 June Other financial assets. (non current) / E942,803 thousand (E935,422 thousand). (current) / E347,598 thousand (E435,819 thousand) The following table shows the composition of other financial assets at the beginning and end of the period: (E000) Note Total financial assets Current portion Non current portion Total financial assets Current portion Non current portion Financial assets deriving from concession rights Financial assets deriving from government grants related to construction services (1) 382,066 7, , ,572 8, ,719 (1) 296, , , , , ,538 Convertible term deposits (2) 380,676 58, , , , ,930 Derivative assets (3) 30,041 2,345 27,696 62,073 21,864 40,209 Staff loans (1) 10, ,283 10, ,209 Other loans and receivables (1) 31, ,973 6, ,180 Non current prepayments (1) 7, ,331 7,629 7,629 Loans and receivables due from ANAS (1) 12,046 12,046 10,008 10,008 Non current financial assets 90,881 2,552 88,329 96,223 21,988 74,235 Loans and receivables due from ANAS (1) 46,411 46,411 Other loans and receivables (1) 80,046 80,046 27,203 27,203 Other financial assets (1) 13,429 13,429 7,392 7,392 Other current financial assets 139, ,886 34,595 34,595 Total 1,290, , ,803 1,371, , ,422 (1) These assets include financial instruments primarily classified as loans and receivables under IAS 39. (2) These assets have been classified as available for sale financial instruments and in level 2 of the fair value hierarchy. (3) These assets primarily include hedging derivatives classified in level 2 of the fair value hierarchy. 91

94 3. Condensed interim consolidated financial statements Financial assets deriving from concession rights regard: a) the takeover right ( E309,936 thousand as at 30 June 2011) to be awarded to the subsidiary, Autostrade Meridionali, at the end of this operators concession term; b) the present value of the guaranteed minimum payments to be made by the grantor under the concession arrangement signed by the Chilean subsidiary, Sociedad Concesionaria de Los Lagos (E72,130 thousand as at 30 June 2011). Financial assets deriving from government grants to finance infrastructure works, totalling E296,892 thousand, include receivables relating to amounts due from grantors or from public entities, representing grants accruing to operators in relation to construction services provided. These assets have decreased by E94,082 thousand, essentially due to amounts collected during the period, partially offset by new grants accruing in relation to construction services provided. Convertible term deposits, totalling E380,676 thousand as at 30 June 2011, primarily relate to loans disbursed by Intesa Sanpaolo and Crediop as a condition precedent for receipt of the grants financing new infrastructure construction provided for in Laws 662/1996, 345/1997 and 135/1997. This item has decreased by E86,201 thousand as a result of releases authorised by the grantor during the period. Non current financial assets (totalling E90,881 thousand as at 30 June 2011) are down E5,342 thousand. This reflects the reduction (down E12,513 thousand) in the fair value of the derivatives hedging the interests and currency risks of the bond issue with a par value of 20,000 million yen, due to the weakening of the currency in which the bonds were issued with respect to the euro. The E19,519 thousand reduction in the current portion is primarily due to the reduction in accrued income following the payment of differentials during the period, partially offset by an increase in other financial assets, primarily relating to the amount due from Toto Costruzioni Generali (E26,140 thousand) in connection with the sale of the investment in Strada dei Parchi. Further details of derivatives subscribed to by the Group for hedging purposes at 30 June 2011 are contained in note 9.3 Financial risk management. Other current financial assets (totalling E139,886 thousand as at 30 June 2011) are up E105,291 thousand. The increase primarily reflects the amount due from Toto Costruzioni Generali (E60,556 thousand, collected at the end of July 2011) in connection with the sale of the investment in Strada dei Parchi, and the increase in amounts receivable from ANAS (E46,411 thousand) linked to the progressive release of the grants provided for in Laws 662/96, 135/97 and 345/97. This item also includes investment of liquidity (E14,101 thousand) by the Stalexport Autostrady group, whose assets are managed by major financial institutions. There are no indications of impairment on any financial assets recognised in the financial statements. 7.5 Deferred tax assets and liabilities. Deferred tax assets / E1,951,991 thousand (E2,101,817 thousand). Deferred tax liabilities / E33,999 thousand (E33,666 thousand) The following tables show the amount of deferred tax assets and liabilities both offsetable and not offsetable, in addition to changes in the deferred taxes in the first half of 2011 with respect to temporary differences between consolidated carrying amounts and the corresponding tax bases. (E000) Deferred tax assets 2,046,915 2,206,874 Deferred tax liabilities eligible for offsetting 94, ,057 Net deferred tax assets 1,951,991 2,101,817 Deferred tax liabilities not eligible for offsetting 33,999 33,666 92

95 Notes (E000) Changes during the period Provisions Releases Deferred tax assets/ liabilities on gains and losses recognised in comprehensive income Changes to estimates of previous years Currency translation differences and other changes Reclassifications to assets/ liabilities related to discontinued operations Deferred tax assets on: Deductible intercompany goodwill 1,093,725 52,900 1,040,825 Effects deriving from application of IFRIC 12 by Autostrade per l Italia (*) 686,140 2,554 10,913 82, ,278 Provisions 237,997 37,562 19,066 15,089 1, ,868 Impairment losses on and depreciation/ amortisation of non current assets 87, , ,801 Measurement of cash flow hedges 34,633 13, ,341 Impairment losses on receivables and inventories 23,576 1, ,951 Tax loss carryforwards ,603 16,317 Other temporary differences 43,284 3,630 9, , ,534 Deferred tax assets 2,206,874 45,672 94,872 13,290 96, ,033 2,046,915 Deferred tax liabilities on: Accelerated depreciation 45,175 1, ,894 Financial income from recognition of financial assets 40,538 4,026 3,177 33,335 Fair value measurement of assets and liabilities deriving from business combinations 18, ,839 Measurement of cash flow hedges 9,702 1,791 7,911 Other temporary differences 24,840 1,748 3,663 1, ,944 Deferred tax liabilities 138,723 3,469 9,111 1,791 1, ,923 Total 2,068,151 42,203 85,761 11,499 96,171 1, ,917,992 (*) The figure does not include the adjustment resulting from application of IFRIC 12 regarding the restatement of provisions for the repair and replacement obligations of Autostrade per l Italia. The impact on deferred tax assets is accounted for in the item Provisions. As shown in the table, the carrying amount at 30 June 2011 primarily consists of residual deferred tax assets that were recognised in connection with the reversal of intercompany gains that arose in 2003 following the contribution of the portfolio of motorways to Autostrade per l Italia (E1,040,825 thousand). The carrying amount also includes deferred tax assets of E595,278 thousand resulting from the adoption of IFRIC 12 by Autostrade per l Italia, essentially regarding adjustments applied to carrying amounts as at 1 January The balance also includes deferred tax assets of E242,868 thousand relating to the non deductible portion of provisions for risks and charges primarily attributable to Autostrade per l Italia and substantially consisting of provisions for repair and replacement obligations. A further E84,801 thousand refers to deferred tax assets generated by impairment losses and the depreciation of non current assets, primarily relating to accumulated impairment losses recognised by Raccordo Autostradale Valle d Aosta. The main changes during the first half of 2011 include: a) a reduction of E97,592 thousand in deferred tax assets resulting from application of IFRIC 12, essentially reflecting the impact on the Group s taxation of the Ministerial Decree of 8 June 2011 (as provided for by the so called Milleproroghe, or Thousand postponements, legislation), of the response, received on 9 June 2011, to the request for a ruling submitted to the Italian tax authorities by Autostrade per l Italia. The Ministerial Decree of 8 June 2011 and the response to Autostrade per l Italia s request for a ruling have finally clarified the tax treatment of the new amounts accounted for in the financial statements as at and for the year ended 31 December 2009, substantially confirming the deductibility of the various components of the financial statements specifically recognised in application of IFRIC 12 (depreciation and amortisation, provisions and expenses from discounting). The Decree and the response also permit deduction of the loss resulting from the realignment of carrying amounts with tax bases (Law Decree 185/2008) on a straight line basis over the concession term (29 years in the case of Autostrade per l Italia), with immediate effect from the 2010 tax year; b) the release of deferred tax assets of E52,900 thousand, being the deductible portion of the goodwill in Autostrade per l Italia that arose in 2003 on the above contribution of assets; 93

96 3. Condensed interim consolidated financial statements c) the net increase in deferred tax assets of E18,496 thousand relating to the non deductible portion of provisions for the risks and charges. This increase was substantially the result of Law Decree 98 of 6 July 2011 (converted with amendments into Law 111 of 15 July 2011), which has, in the case of Italian operators, modified the deductible percentage of provisions for maintenance, repair and replacement obligations, which has been reduced from 5% to 1% of the historical cost of assets to be handed over free of charge, with immediate effect from the 2011 tax year ; d) the E11,499 thousand net decrease in deferred tax assets following the measurement of cash flow hedges. 7.6 Other non current assets / E4,084 thousand (E5,472 thousand) This item essentially consists of amounts due from the tax authorities in the form of withholding tax paid on provisions for post employment benefits, which are down as a result of the amounts recovered on the benefits paid during the first half. 7.7 Trading assets / E1,022,560 thousand (E973,176 thousand) Trading assets include inventories (stocks and spare parts used in the maintenance or assembly of plant), contract work in progress and trade receivables, which constitute the largest component. The following tables show the composition of trade receivables at the end of the period, and the related aging schedule at 30 June (E000) Amounts due from customers Other trade receivables Other trading assets Total Amounts due from customers Other trade receivables Prepayments for construction services Prepayments for construction services Other trading assets Total Direct debit road users and similar: outstanding bills Receivable from sundry customers and retentions 478, , , ,320 Service area operators 82, ,064 Road users for unpaid tolls 46,768 48,657 Gross trade receivables 781, ,772 37,387 11,293 1,026, , ,239 42,707 13, ,170 Allowance for impairment 73,520 13,166 86,686 76,269 12,379 88,648 Net trade receivables 707, ,606 37,387 11, , , ,860 42,707 13, ,522 (E000) Total receivables at Total not yet due and payable More than 90 days overdue Between 90 and 365 days overdue More than one year overdue Trade receivables 1,026, ,703 25,742 40, ,219 Trade receivables, after allowance for impairment, are up E46,363 thousand compared with 31 December 2010, substantially due to increases in receivables without recourse for tolls due from customers (up E thousand) and in amounts due for services provided (up E31,879 thousand), primarily due from Pavimental, Telepass and TowerCo. These increase were partially offset by a reduction in amounts receivable from sub operators at service areas (down E64,952 thousand), essentially attributable to Autostrade per l Italia and relating to the amounts billed for royalties. Overdue receivables regard uncollected and unpaid tolls, in addition to royalties due from service area operators and sales of other goods and services, such as authorisations to cross motorways, the sale of services and proprietary assets and the lease of property. The relevant allowance is adequate and has been determined with reference to experience gained with specific customers and historical data regarding losses on receivables, taking guarantee deposits and other collateral given by customers into account. 94

97 Notes Changes during the period in the allowance for impairment are shown in the following table: (E000) Additions Uses Reclassifications and other changes Allowance for impairment 88,648 4,214 6, ,686 The carrying amount of trade receivables approximates to fair value. Advance payments for investment in motorway infrastructure of E37,387 thousand (E42,707 thousand at 31 December 2010) are down E5,320 thousand due to progress in carrying out the works for which the advances were paid. 7.8 Cash and cash equivalents / E777,917 thousand (E2,533,250 thousand) This item includes liquidity held in the form of cash and/or investments with terms to maturity of no more than 120 days. The reduction of E1,755,333 thousand compared with 31 December 2010 essentially reflects redemption of bonds totalling E2,000 million and the payment of the final dividend for 2010, totalling E231,960 thousand, partially offset by cash generated during the period in the form of new borrowings and operating cash inflow. 7.9 Current tax assets and liabilities. Current tax assets / E157,577 thousand (E29,715 thousand). Current tax liabilities / E164,908 thousand (E17,278 thousand) Current tax assets and liabilities at the beginning and end of the period are shown below. (E000) Assets Liabilities IRES 97,056 12, ,452 9,408 IRAP 41,963 6,074 45,775 3,989 Other income taxes 18,558 11,587 1,681 3,881 Total 157,577 29, ,908 17,278 The change in current tax assets and liabilities compared with 31 December 2010 is linked to the advance payment of taxes and provisions for income tax expense for the period. The balances of current tax assets and liabilities as at 30 June 2011 includes the impact on taxation of the Ministerial Decree of 8 June 2011 (as provided for by the so called Milleproroghe, or Thousand postponements, legislation), of the response, received on 9 June 2011, to the request for a ruling submitted to the Italian tax authorities by Autostrade per l Italia in 2010 and, lastly, of Law Decree 98 of 6 July 2011 (converted into law, with amendments, by Law 111 of 15 July 2011), containing urgent measures to promote financial stability. The related effects on the Group will be immediate from the 2011 tax year. Further details are provided in note

98 3. Condensed interim consolidated financial statements 7.10 Other current assets / E66,792 thousand (E74,667 thousand) This item consists of receivables and other current assets that are not eligible for classification as trading or financial. The composition of this item is shown below. (E000) Increase/(Decrease) Receivables due from end users and insurance companies for damages 31,308 30, Other tax assets 13,992 21,026 7,034 Receivable from public entities 4,192 4, Other current assets 51,351 49,502 1, , ,968 5,125 Allowance for impairment 34,051 31,301 2,750 Total 66,792 74,667 7,875 The balance declined over the first half due to a reduction in VAT receivable Non current assets held for sale and. related to discontinued operations / E500,533 thousand (E1,107,734 thousand). Liabilities related to discontinued operations / E77,600 thousand (E1,072,633 thousand) As at 30 June 2011 these items substantially include: a) the assets and liabilities of Società Autostrada Tirrenica (amounting to E169,884 thousand and E77,600 thousand, respectively), classified in these items following the conclusion, in May 2011, of an agreement for the sale of 69.1% of the company; b) the 50% interest in Nueva Inversiones, amounting to E287,744 thousand at the closing exchange rate at. 30 June 2011, described in note 6.2 above; c) the non controlling interest in Lusoponte ( E39,852 thousand), and loans and receivables due from this company (E1,643 thousand), acquired from the Itinere group in June Following the initial closing of the sale of the investment in Strada dei Parchi SpA during the second quarter of 2011, this company has been deconsolidated as at 30 June 2011 and thus no longer contributes to items in the statement of financial position at this date. The following tables show an analysis of non current assets held for sale and the assets and liabilities of Società Autostrada Tirrenica and Strada dei Parchi as at 30 June 2011 and 31 December 2010, classified as discontinued operations for the purposes of IFRS 5. (E000) Assets related to discontinued operations attributable to Società Autostrada Tirrenica 169,884 Assets related to discontinued operations attributable to Strada dei Parchi 1,066,239 Other assets held for sale Investments 329,006 39,852 Other assets held for sale Financial assets 1,643 1,643 Total assets related to discontinued operations 500,533 1,107,734 Liabilities related to discontinued operations attributable to Società Autostrada Tirrenica 77,600 Liabilities related to discontinued operations attributable to Strada dei Parchi 1,072,633 Total liabilities related to discontinued operations 77,600 1,072,633 96

99 Notes The following table shows the assets and liabilities of Società Autostrada Tirrenica as at 30 June 2011: Assets (E000) Liabilities (E000) Non current assets Non current liabilities Property, plant and equipment 443 Non current provisions 5,040 Intangible assets 157,769 Non current financial liabilities 58,959 Investments 51 Deferred tax liabilities 421 Non current financial assets 6,403 Deferred tax assets 1,033 Other non current assets 41 Total non current assets 165,740 Total non current liabilities 64,420 Current assets Current liabilities Trading assets 1,789 Current provisions 2,374 Cash and cash equivalents 613 Trading liabilities 4,561 Other current assets 1,284 Current financial liabilities 3,399 Current tax assets 458 of which current account overdrafts 16 Current tax liabilities 1,710 Other current liabilities 1,136 Total current assets 4,144 Total current liabilities 13,180 TOTAL ASSETS 169,884 TOTAL LIABILITIES 77, Equity / E3,806,338 thousand (E3,586,901 thousand) As at 30 June 2011 Atlantia s issued capital is fully subscribed and paid in and consists of 630,311,992 ordinary shares with a par value of E1 each, amounting to E630,311,992 thousand. The Extraordinary General Meeting of Atlantia s shareholders on 20 April 2011 approved a bonus issue with a value of E30,014,857 by transferring the same amount from the extraordinary reserve. Following execution of the resolution on 6 June 2011, 1 new share was issued to shareholders for every 20 held. This resulted in an increase in treasury shares of 602,522, with the total number of treasury shares held rising from 12,050,446 to 12,652,968. These shares are accounted for at a total carrying amount of E215,644 thousand. Equity attributable to owners of the parent, totalling E3,398,149 thousand, has increased by E214,758 thousand compared with 31 December The main changes during the period regard: a) comprehensive income for the period ( E442,974 thousand), reflecting profit for the period (E436,838 thousand) and the recognition of other comprehensive income (a profit for the period of E6,136 thousand), primarily due to the combined effect of a fair value gain on the measurement of cash flow hedges (E31,519 thousand), a loss on the translation of financial statements denominated in functional currencies other than the euro (E10,770 thousand) and a loss resulting from the measurement of associates and joint ventures using the equity method. (E14,452 thousand); b) payment of the final dividend of E0.39 per share for 2010 (E230,006 thousand). Equity attributable to non controlling interests of E408,189 thousand has increased by E4,679 thousand compared with 31 December 2010 (E403,510 thousand). This essentially reflects deconsolidation of Strada dei Parchi, which had an impact on the reserves attributable to non controlling interests (E5,238 thousand) and comprehensive income for the period (E1,797 thousand), less dividends approved (E2,356 thousand). 97

100 3. Condensed interim consolidated financial statements Atlantia manages its capital in order to create value for shareholders, ensure the Group can function as a going concern, safeguard the interests of stakeholders, and guarantee efficient access to external sources of financing to adequately support the growth of the Group s businesses and fulfil the commitments given in the concession arrangements. Other comprehensive income The section Consolidated financial statements includes the Statement of comprehensive income, which includes other comprehensive income, after the related taxation. The following table shows the gross amounts of this other comprehensive income and the related taxation. (E000) H H Before tax Tax effect After tax Before tax Tax effect After tax Fair value gains/(losses) on cash flow hedges 41,436 11,122 30,314 9, ,162 Gains/(losses) from translation of financial statements denominated in functional currencies other than the euro Gains/(losses) from measurement of associates and joint ventures using the equity method 11,516 11,516 10,827 10,827 14,452 14,452 25,727 25,727 Other fair value gains/(losses) Other comprehensive income for the period 15,178 11,122 4,056 26, ,225 Fair value gains on cash flow hedges reclassified to profit/(loss) for the period Total other comprehensive income for the period, after related taxation and reclassifications to profit/(loss) for the period ,000 11,348 4,652 26, ,225 Disclosures regarding share based payments Since 2009 the Group has put in place a number of share based incentive plans, designed to incentivise and foster the loyalty of directors and/or employees of the Atlantia Group who hold key positions and responsibilities within the Company and Group companies, and linked to the achievement of pre established corporate objectives. The plans aim to promote and disseminate a value creation culture in all strategic and operational decision making processes, drive the Group s growth and boost management efficiency. The Annual General Meeting of shareholders, held on 20 April 2011, voted to implement three new incentive plans previously approved by Atlantia s Board of Directors on 11 March These are in addition to the existing share option plan approved by the Annual General Meeting of shareholders held on 23 April

101 Notes The following table shows the main aspects of the existing incentive plans, including the options and units awarded to directors and employees of the Group through to 30 June 2011, in addition to changes during the first half of The table also shows the fair value of each option or unit awarded, as determined by a specially appointed expert, using the Monte Carlo model and the following parameters. Number of options/units granted Expiration of vesting period Expiration exercise/ conversion period Exercise price (E) (*) Fair value of each option or unit at grant date (E) Expected expiration at grant date (years) Risk free interest rate used Expected volatility (based on historical figures) Expected dividends at grant date 2009 SHARE OPTION PLAN Options outstanding at 1 January May 2009 award 534, April April % 26.5% 3.44% 16 July 2009 award 174, April April % 25.8% 3.09% 15 July 2010 award 140, April April % 26.7% 3.67% 850,000 Options awarded in the first half of May 2011 award 26, April April (**) (**) (**) (**) (**) 8, April April (**) (**) (**) (**) (**) 76, April April % 25.2% 4.09% Options outstanding at 30 June , SHARE OPTION PLAN Options awarded in the first half of May 2011 award 279, May May % 25.2% 4.09% Options outstanding at 30 June , SHARE OPTION GRANT PLAN Units granted in the first half of May 2011 grant 192, May May 2015 and 13 May 2016 n.a % 26.3% 4.09% Units outstanding at 30 June , MBO SHARE OPTION GRANT PLAN Units granted in the first half of May 2011 grant n.d. (***) n.d. n.d. n.a. n.d. n.d. n.d. n.d. n.d. Units outstanding at 30 June 2011 n.d. (*) Amounts yet to be modified following Atlantia s bonus issue with effect from 6 June (**) Options awarded as a result of Atlantia s bonus issues and which, therefore, do not represent the award of new benefits. (***) In view of the nature of the specific incentive plan, it is not at the moment possible to quantify the number of units granted, the expiration date or the exercise/award date. Changes relating to the 2009 Share Option Plan during the first half of 2011, compared with the information. provided in the notes to the consolidated financial statements as at and for the year ended 31 December 2010, and the main characteristics of the new plans approved by the Annual General Meeting of 20 April 2011 are described below.. Detailed information on the plans is contained in an Information Memorandum published on the Group s website at and prepared pursuant to article 84 bis of CONSOB Regulation 11971/1999, as subsequently amended. In general, the options and units awarded under any of the existing plans may not form part of inter vivos transfers by beneficiaries, and may not be subject to restrictions or be part of any arrangements for any reason. The options and units cease to be exercisable on the unilateral termination of employment or in the event of dismissal for cause of the beneficiary prior to expiration of the vesting period. 99

102 3. Condensed interim consolidated financial statements 2009 Share Option Plan The Annual General Meeting of 20 April 2011 approved the alterations to the Plan proposed by the Board of Directors. at the meeting of 11 March 2011, designed to ensure that there is no change in the substantial and financial terms of the Plan, given the reduced intrinsic value of each share following the bonus issue approved by the Annual General Meeting of 14 April 2010 and carried out on 7 June In execution of the authority granted by the Annual General Meeting of 23 April 2009 and pursuant to and for the purposes of article 11.1 of the Plan terms and conditions, on 15 July 2010 the Board of Directors thus voted to revise the final value of Atlantia s shares in the following table showing the conversion of the granted options to vested options. Final value (E) Percentage of options granted that have vested % % % % % % % % % % % % Over A percentage calculated on the basis of the following formula: [( Exercise price)/(closing value Exercise price)] x 100 The Annual General Meeting also approved the following changes: (i) to increase the number of options grantable up to a maximum of 961,956 (each of which granting beneficiaries the right to receive 1 Atlantia ordinary share, according to the conditions established in the Plan); (ii) to revise down the exercise prices of the options granted at the Board of Directors meetings of 8 May and 16 July 2009 to E (previously E12.966) and E (previously E13.999), respectively; and (iii) to give the Board of Directors the authority to grant the beneficiaries of the previously granted options 1 new option for every 20 options previously granted at the revised exercise prices indicated in point (ii). In addition, the General Meeting voted to amend the Plan terms and conditions in order to give the Board of Directors full authority, independently and without the need for further approval by a General Meeting of the Company s shareholders, to make the changes necessary, in the event of any further extraordinary corporate actions by the Company, to ensure that the conditions of the Plan remain unchanged, provided that the Directors follow accepted market practices for similar transactions. Finally, the General Meeting voted to authorise the Board of Directors to grant 76,476 Plan options to the Company s Chairman, Fabio Cerchiai, subject to the same conditions applied to the options granted by the Board of Directors on. 15 July At the Board of Directors meeting held on 13 May 2011, the Directors voted to exercise in full the authorities given to them by the General Meeting Share Option Plan The Plan entails the award of up to 1,300,000 options free of charge in three annual award cycles (2011, 2012 and 2013). Each option will grant beneficiaries the right to purchase 1 of the Company s treasury shares, with settlement involving either physical delivery or, at the beneficiary s option, a cash payment equivalent to the proceeds from the sale of the shares on the stock exchange organised and managed by Borsa Italiana SpA, after deduction of the full exercise price. The exercise price is equivalent to the average of the official prices of Atlantia s ordinary shares in the month prior to the date on which Atlantia s Board of Directors announces the beneficiary and the number of options to be awarded. 100

103 Notes The options granted will vest in accordance with the Plan terms and conditions and, in particular, only if, on expiration of the vesting period (three years from the date of grant of the options to beneficiaries by the Board of Directors), the Company s cumulative FFO (total operating cash flow for each of the three financial years preceding expiration of the vesting period, adjusted for a number of specific items) is higher than a pre established target, unless otherwise decided by the Board of Directors, which has the authority further targets to assign beneficiaries. Vested options may be exercised, in part, from the first day following expiration of the vesting period and, in part, from the end of the first year following expiration of the vesting period and, in any event, in the three years following expiration of the vesting period. The number of exercisable options will be calculated on the basis of a mathematical algorithm that takes account, among other things, of the current value and the exercise price, plus any dividends paid, so as to cap the realisable gain. Certain optioned shares are subject to a lock up until expiration of the terms set out in the Plan terms and conditions, unless authorised in writing by the Board of Directors. On 13 May 2011 Atlantia s Board of Directors, within the scope of the first annual award cycle (2011), approved the award of 279,860 options to certain of the Group s directors and employees. These options vest between 14 May 2011 and 13 May 2014 and are exercisable in the period between 14 May 2014 and 13 May 2017 at an exercise price per share of E Share Option Grant Plan The Plan entails the grant of up to 700,000 units free of charge in three annual award cycles (2011, 2012 and 2013). Each unit will grant beneficiaries the right to receive 1 of the Company s treasury shares, with settlement involving either physical delivery or, at the beneficiary s option, a cash payment equivalent to the proceeds from the sale of the shares on the stock exchange organised and managed by Borsa Italiana SpA. The units granted will vest in accordance with the Plan terms and conditions and, in particular, only if, on expiration of the vesting period (three years from the date the units are granted to beneficiaries by the Board of Directors), the Company s cumulative FFO (total operating cash flow for each of the three financial years preceding expiration of the vesting period, adjusted for a number of specific items) is higher than a pre established target, unless otherwise decided by the Board of Directors. Vested units may be converted into shares, in part, after one year from the date of expiration of the vesting period and, fot the residual part, after two years from the date of expiration of the vesting period. The number of convertible units will be calculated on the basis of a mathematical algorithm that takes account, among other things, of the current value and initial value of the shares so as to cap the realisable gain. Certain shares resulting from conversion of the units are subject to a lock up until expiration of the terms set out in the Plan terms and conditions, unless authorised in writing by the Board of Directors. On 13 May 2011 Atlantia s Board of Directors, within the scope of the first annual award cycle (2011), approved the grant of 192,376 units to certain of the Group s directors and employees. These units vest between 14 May and 13 May 2014 and are convertible, in accordance with the above terms and conditions, on 13 May 2015 and. 13 May MBO Share Option Grant Plan The 2011 MBO Share Option Grant Plan, serving as a partial payment of the annual bonus for the achievement of objectives assigned to each beneficiary under the Management by Objectives (MBO) plan adopted by the Group, entails the grant of up to 300,000 units free of charge annually for three years (2012, 2013 and 2014). Each unit will grant beneficiaries the right to receive 1 of the Company s treasury shares. The units granted (the number of which is based on the unit price of the Company s shares at the time achievement of the assigned objectives is confirmed, and on the size of the bonus effectively awarded) will vest in accordance with the Plan terms and conditions, on achievement of the objectives assigned annually to each beneficiary, and on expiration of the vesting period (three years from the date of payment of the annual bonus to beneficiaries, following confirmation that the objectives assigned have been achieved). Vested units will be converted into shares on expiration of the vesting period, on the basis of a mathematical algorithm that takes account, among other things, of the current value and initial value of the shares, plus any dividends paid, so as to cap the realisable gain. Certain shares resulting from conversion of the units are subject to a lock up until expiration of the terms set out in the Plan terms and conditions, unless authorised in writing by the Board of Directors. 101

104 3. Condensed interim consolidated financial statements On 13 May 2011 the Company s Board of Directors selected the directors and employees of the Group to which the benefits deriving from the Plan are to be assigned. However, given the above need to confirm achievement of the objectives assigned to each beneficiary prior to any grant, it is not at the moment possible to quantify the number of units to be granted as a result of the above resolution, or the fair value of each of the benefits. The weighted average price of Atlantia s ordinary shares in the first half of 2011 (adjusted to take account of Atlantia s bonus issue with effect from 6 June 2011) was E15.47 per share, with the figure for the period. 13 May 30 June 2011 amounting to E15.21 per share. At 13 May 2011 (the date the new options and units were awarded, as described above) the value of Atlantia s ordinary shares was E15.62 per share, whilst at 30 June 2011 the value was E14.68 per share. As a result of implementation of the above plans, at 30 June 2011 the Group has recognised, in accordance with the requirements of IFRS 2, an increase in equity reserves of E311 thousand, based on the accrued fair value of the options and units awarded at that date, with a contra entry in the income statement in personnel expense Provisions for construction services required by contract. (non current) / E3,991,627 thousand (E4,315,051 thousand). (current) / E494,394 thousand (E386,660 thousand) The following table shows provisions for construction services required by contract for which no additional economic benefits are received at the beginning and end of the period and changes during the first half of 2011, showing the non current and current portions. These provisions represent the present value of motorway infrastructure construction and/or upgrade services that certain of the Group s operators, particularly Autostrade per l Italia, are required to provide and for which no additional economic benefits are received, in terms of specific toll charge increases and/or significant increases in traffic. The reduction of E215,690 thousand during the period essentially reflects the use of provisions totalling E230,222 thousand to pay for construction services for which no additional economic benefits are received during the period, after deducting the related grants, and the updated estimate of the present value on completion of investments in construction services, with a matching reduction in concession rights (a reduction of E50,446 thousand). These decreases were partially offset by an increase in financial provisions (up E65,582 thousand) recognised as a contra entry for the cost of discounting to present value recognised in the income statement. (E000) Balance Non current Current Provisions for construction services required by contract Upgrade of Florence Bologna section 2,079,828 1,757, ,608 Third and fourth lanes 21,175 19,804 1,371 Other construction services 2,600,708 2,538,027 62,681 4,701,711 4,315, ,

105 Notes 7.14 Provisions. (non current) / E950,672 thousand (E941,982 thousand). (current) / E185,578 thousand (E224,778 thousand) The following table shows provisions at the beginning and end of the period and changes during the first half of 2011, showing the non current and current portions. Provisions for employee benefits (non current) / E133,045 thousand (E130,604 thousand). (current) / E9,760 thousand (E46,615 thousand) At 30 June 2011 this item essentially consists of provisions for post employment benefits and for long term incentive plans for the Group s personnel. Provisions for post employment benefits, totalling E140,251 thousand (including the current and non current portions), are down E3,515 thousand, essentially due to the use of provisions to pay benefits and advances, totalling E6,031 thousand, partially offset by operating and financial provisions, totalling E3,586 thousand. The discount rate used to calculate the provision for post employment benefits at 30 June 2011 is 4.55%. Provisions for long term incentive plans for personnel, relating essentially to the three year incentive plan for the Group s management for the period , were used in full following expiry of the plan and final calculation of the incentives to be paid during the second quarter of Provisions for repair and replacement obligations (non current) / E796,139 thousand (E790,281 thousand) (current) / E120,625 thousand (E121,341 thousand) This item regards the present value of provisions for the repair and replacement of assets operated under concession, in accordance with commitments given by the Group s operators in their arrangements with the related grantors. There was a net increase in total provisions, including current and non current portions, of E5,142 thousand, essentially representing the difference between new operating and financial provisions (totalling E191,672 thousand) and uses (E178,364 thousand) in connection with repairs and replacements carried out during the first half of the year. Financial provisions Changes due to updated estimate of present value of future obligations Changes during the period Reductions for completed works Grants accrued on completed works Currency translation differences Balance Non current Current 23,296 6, ,730 36,464 1,948,420 1,567, , ,587 15,009 5,578 42,095 43,801 81, ,517,014 2,409, ,969 65,582 50, ,686 36, ,486,021 3,991, ,

106 3. Condensed interim consolidated financial statements Other provisions (non current) / E21,488 thousand (E21,097 thousand) (current) / E55,193 thousand (E56,822 thousand) These provisions essentially regard liabilities expected to be incurred in connection with pending litigation and disputes, including those with maintenance contractors regarding contract reserves. The balance is in line with 31 December 2010, as provisions were almost fully offset by uses during the period. Group companies are party to a number of disputes with the tax authorities. The related amounts are not significant. (E000) Balance Non current Current Provisions for employee benefits Post employment benefits 143, ,005 15,761 Other employee benefits 33,205 2,382 30,823 Pensions and similar obligations , ,604 46,615 Provisions for repair and replacement obligations 911, , ,341 Other provisions Provisions for impairment losses exceeding carrying amounts of investments 3,567 3,567 Provisions for disputes, liabilities and sundry charges 74,352 21,097 53,255 77,919 21,097 56,822 Total provisions 1,166, , ,

107 Notes Changes during the period Operating provisions Financial provisions Reductions due to post employment benefits paid and advances Reductions due to reversal of excess provisions Uses Reclassifications and other changes Reclassifications to liabilities related to discontinued operations Currency translation differences Balance Non current Current 308 3,278 6, , ,062 9, , ,400 1, ,278 6,031 30, , ,045 9, ,931 20, , , , , , ,573 3,573 3, , ,108 21,488 51,620 3, , ,681 21,488 55, ,232 24,019 6, , , ,136, , ,

108 3. Condensed interim consolidated financial statements 7.15 Financial liabilities. (non current) / E10,341,761 thousand (E10,066,909 thousand). (current) / E468,431 thousand (E2,561,332 thousand) The following two tables provide an analysis of financial liabilities. The first compares carrying amounts at 30 June 2011 and 31 December 2010 by term to maturity (current and. non current portions). (E000) Total financial liabilities Current portion Non current portion Medium/long term financial liabilities Bond issues Bond ,996,056 1,996,056 Bond ,706,363 2,706,363 Bond (Gbp) 568, ,940 Bond , ,244 Bond ,549,877 1,549,877 Bond (Jpy) 183, ,444 Bond , ,510 Bond , ,222 Total bond issues 9,462,656 1,996,056 7,466,600 Medium/long term borrowings Bank borrowings Term Loan Facility 709,580 76, ,750 EIB 950,631 50, ,455 Cassa Depositi e Prestiti 143, ,912 Other banks 233,080 12, ,781 Total borrowings linked to grants 381,202 40, ,568 Total bank borrowings 2,418, ,939 2,238,466 Other borrowings ANAS (1) 32,611 32,611 Central Guarantee Fund (2) 56,479 19,953 36,526 Other borrowings 52,101 3,820 48,281 Total other borrowings 141,191 56,384 84,807 Total medium/long term borrowings 2,559, ,323 2,323,273 Derivative liabilities 279,593 25, ,599 Other financial liabilities (3) 47,676 24,239 23,437 Accrued borrowing costs on medium/long term financial liabilities 251, ,167 Total medium/long term financial liabilities 12,600,688 2,533,779 10,066,909 Short term financial liabilities Bank overdrafts 19,857 19,857 Short term borrowings 6,574 6,574 Current account payables to unconsolidated Group companies Other current financial liabilities Total short term financial liabilities 27,553 27,553 12,628,241 2,561,332 10,066,909 (1) The change in the Group s exposure to ANAS is linked to the progressive release of the grants provided for by Laws 662/96, 135/97 and 345/97; as at 30 June 2011 the Group reports a receivable of E46,411 thousand, as described in note 7.4. (2) Loans from the Central Guarantee Fund amount to zero as at 30 June 2011, following reclassification of the loan to Società Autostrada Tirrenica with a face value of E62,316 thousand (a carrying amount of E36,852 thousand) to liabilities related to discontinued operations and repayment by Tangenziale di Napoli of borrowings with a face value of E41,839 thousand (a carrying amount of E19,627 thousand). (3) Other financial liabilities, which as at 31 December 2010 consisted essentially of deferred income in the form of interest rate subsidies linked to the interest free loan from the Central Guarantee Fund, amount to zero as at 30 June 2011 due to reclassification to liabilities related to discontinued operations of amounts attributable to Società Autostrada Tirrenica and repayment by Tangenziale di Napoli, in accordance with the terms of the relevant Single Concession Arrangement. 106

109 Notes Non current maturities at Total financial liabilities Current portion Non current portion Maturing between 13 and 60 months Maturing after 60 months 2,712,124 2,712,124 2,712, , , , , , ,887 1,545,563 1,545,563 1,545, , , , , , , , , ,362 7,430,992 7,430,992 4,257,687 3,173, ,250 77, , , ,814 40, , , , , ,401 55, , ,733 22, ,886 85, , ,202 40, , , ,016 2,786, ,259 2,605,141 1,144,524 1,460,617 52,369 5,430 46,939 8,632 38,307 52,369 5,430 46,939 8,632 38,307 2,838, ,689 2,652,080 1,153,156 1,498, ,203 4, ,689 18, ,975 99,911 99,911 10,632, ,114 10,341,761 5,429,557 4,912, , , ,166 2, , ,317 10,810, ,431 10,341,761 5,429,557 4,912,

110 3. Condensed interim consolidated financial statements The second table compares the aggregate carrying amounts (current and non current portions) of medium/long term financial liabilities with relevant par and fair values. This table also summarises the main terms and conditions applied to each significant financial liability. The fair value reported for bond issues was measured on the basis of closing market prices, whilst the fair value of other financial liabilities was measured by discounting expected future cash flows, using the market interest rate curve at the end of the period. (E000) Par value at (1) Carrying amount at (1) Fair value at Bond issues Bond ,000,000 1,996,056 1,998,800 Bond ,750,000 2,706,363 2,883,100 Bond (Gbp) 750, , ,801 Bond ,000, ,244 1,106,700 Bond ,500,000 1,549,877 1,609,650 Bond (Jpy) 149, , ,185 Bond ,000, , ,330 Bond , , ,580 Total bond issues (A) 9,649,176 9,462,656 9,857,146 Medium/long term borrowings Bank borrowings Term Loan Facility 720, , ,591 EIB 950, ,631 1,054,627 Cassa Depositi e Prestiti 150, , ,979 Other banks 238, , ,080 Total borrowings linked to grants 381, , ,202 Total bank borrowings 2,440,237 2,418,405 2,567,479 Other borrowings ANAS 32,611 32,611 32,611 Central Guarantee Fund 104,155 56,479 56,479 Other borrowings 52,101 52,101 52,101 Total other borrowings 188, , ,191 Total medium/long term borrowings (B) 2,629,104 2,559,596 2,708,670 Medium/long term bond issues and borrowings (C = A + B) 12,278,280 12,022,252 12,565,816 Derivative liabilities (D) 279, ,593 Other financial liabilities (E) 47,676 Accrued expenses on medium/long term financial liabilities (F) 251,167 Total medium/long term financial liabilities (G = C + D + E + F) 12,600,688 (1) The value of medium/long term financial liabilities shown in the table includes both the non current and current portions. (2) As at 30 June 2011 interest rate and foreign exchange hedges with a notional value of E1,627 million are in place. These are classified as cash flow hedges in accordance with IAS 39. (3) The par value is calculated on the basis of the exchange rate fixed at the time of execution of the hedges, which are Cross Currency Swaps. (4) These financial instruments are classified as a financial liability measured at amortised cost in accordance with IAS 39. (5) These loans are repayable between 2011 and (6) These loans are repayable between 2020 and (7) These loans, which are repaid directly by ANAS, are repayable between 2016 and (8) The change in the Group s exposure to ANAS is linked to the progressive release of the grants provided for by Laws 662/96, 135/97 and 345/97; as at 30 June 2011 the Group reports a receivable of E46,411 thousand, as described in note 7.4. (9) Loans from the Central Guarantee Fund amount to zero as at 30 June 2011, following reclassification of the loan to Società Autostrada Tirrenica with a face value of E62,316 thousand (a carrying amount of E36,852 thousand) to liabilities related to discontinued operations and repayment by Tangenziale di Napoli of borrowings with a face value of E41,839 thousand (a carrying amount of E19,627 thousand). (10) These instruments are classified as hedges in accordance with IAS 39 and in level 2 of the fair value hierarchy. (11) Other financial liabilities, which as at 31 December 2010 consisted essentially of deferred income in the form of interest rate subsidies linked to the interest free loan from the Central Guarantee Fund, amount to zero as at 30 June 2011 due to reclassification to liabilities related to discontinued operations of amounts attributable to Società Autostrada Tirrenica and repayment by Tangenziale di Napoli, in accordance with the terms of the relevant Single Concession Arrangement. 108

111 Notes Par value at (1) Carrying amount at (1) Fair value at Reference interest rate Effective interest rate Note Spread Maturity 2,750,000 2,712,124 2,883, % 5.52% 09,06, , , , % 6.47% (2) (3) 09,06,2022 1,000, ,887 1,108, % 6.17% 09,06,2024 1,500,000 1,545,563 1,616, % 4.90% 06,05, , , , % 5.48% (2) (3) 10,12,2038 1,000, , , % 3.54% 18,09, , , , % 4.48% 16,09,2025 7,649,176 7,430,992 7,832,465 (4) 680, , ,194 6 month Euribor 2.08% (2) 0.33% , ,814 1,010,838 (5) 500, , ,528 6 month Euribor 2.85% 1.23% , , ,733 (2) (6) 381, , ,202 interest free (7) 2,808,848 2,786,400 2,958,495 (4) interest free (8) interest free (9) 52,369 52,369 52,369 52,369 52,369 52,369 2,861,217 2,838,769 3,010,864 10,510,393 10,269,761 10,843, , ,203 (10) (11) 99,911 10,632,

112 3. Condensed interim consolidated financial statements The following tables show the par value (in euros) of medium/long term debt by currency at 30 June 2011 and. 31 December 2010, not including accrued borrowing costs at those dates, and changes during the first half of (E000) Par value at Par value at (1) Euro 11,088,601 9,237,016 Gbp 750, ,000 Jpy 149, ,176 Pln 140, ,914 Clp 147, ,551 Usd 1,801 3,736 Total 12,278,280 10,510,393 (1) The par value at 30 June 2011 does not include Società Autostrada Tirrenica s non current financial liabilities, represented by the interest free loan with par value of E62,316 thousand from the Central Guarantee Fund. This has been reclassified to liabilities related to discontinued operations. (E000) Par value as at Repayments New borrowings Currency translation differences Other changes Reclassifications to liabilities related to discontinued operations Par value as at Bond issues 9,649,176 2,000,000 7,649,176 Bank borrowings 2,440,237 64, ,438 10,991 2,808,848 Other borrowings 188,867 44,778 2, ,265 62,316 52,369 Total 12,278,280 2,109, ,575 11,267 31,265 62,316 10,510,393 The Group uses derivative financial instruments to hedge the risks associated with certain financial liabilities, including Interest Rate Swaps (IRS) and Cross Currency Swaps (CCS), which are classified as cash flow hedges at 30 June The market value of the above hedging instruments at 30 June 2011 is recognised in Derivative liabilities and Derivative assets, as appropriate. More detailed information on financial risks and the manner in which they are managed, in addition to details of outstanding financial instruments, is contained in note 9.3 Financial risk management. Bond issues (non current) / E7,430,992 thousand (E7,466,600 thousand) (current) / (E1,996,056 thousand) This item refers to bonds issued by the Parent as part of its E10 billion Medium Term Note (MTN) Programme. The non current portion at 30 June 2011 amounts to E7,430,992 thousand, having decreased by E35,608 thousand essentially as a result of movements in the value of sterling and yen denominated bond issues, resulting from the depreciation of the two currencies with respect to the euro. The reduction in the current portion reflects redemption, on 9 June 2011, of bonds with a par value of E2,000 million. Medium/long term borrowings (non current) / E2,652,080 thousand (E2,323,273 thousand) (current) / E186,689 thousand (E236,323 thousand) These liabilities, which were detailed in the previous tables, include a non current portion of E2,652,080 thousand, which has increased by E328,807 thousand on 31 December This essentially reflects the drawdown of a new tranche with par value of E350,000 thousand of the floating rate loan granted by Cassa Depositi e Prestiti (with final repayment maturing in 2034), and the signature by the Chilean operator, Los Lagos SA, of a new medium/long term loan agreement (with a total par value of E95,263 thousand), partially offset by the reclassification to current liabilities of the portion of borrowings maturing within the next 12 months (E68,440 thousand), reclassification to liabilities related to discontinued operations of the interest free loan from the Central Guarantee Fund to Società Autostrada Tirrenica (E36,526 thousand) and a reduction of E12,594 thousand in foreign currency financial liabilities as a result of exchange rate movements. 110

113 Notes The current portion, totalling E186,689 thousand, is down E49,634 thousand on 31 December This primarily reflects repayments of medium/long term loans during the first half, and a reduction of E32,611 thousand in the amount payable to ANAS, deriving from the progressive collection of the government grants provided for by Laws 662/96, 135/97 and 345/97, partially offset by the above reclassification to current financial liabilities of the short term portions of medium/long term borrowings (up E68,440 thousand). The Term Loan Facility agreement (E671,250 thousand at 30 June 2011) imposes certain covenants with which the borrower must comply over the term of the facility and which have always been complied with. In particular, the ratios of operating cash flow to other net financial expenses and operating cash flow to net debt, and the borrower s equity must remain within a certain range. The variables used for the calculation of the ratios are specifically defined in the agreement. Derivative liabilities (non current) / E258,689 thousand (E253,599 thousand). (current) / E4,514 thousand (E25,994 thousand) This item represents fair value losses on outstanding derivatives at 30 June 2011, classified as cash flow hedges depending on the hedged risk, as required by IAS 39. Cash flow hedges include a Cross Currency Interest Rate Swap (CCIRS) entered into with the purpose of hedging exposure to currency foreign exchange and interest rate risk associated with the medium/long term bond issue with a par value of Gbp 500,000, the fair value of which (E239,975 thousand) reflects the impact of the movement in the euro/sterling exchange rate, amounting to E196,015 thousand, thereby offsetting the movement in the underlying liability. Cash flow hedges also include Interest Rate Swaps hedging interest rate risk on the following non current financial liabilities: a) a Senior Secured Long Term Facility (Term Loan Facility) with par value of E680,000 thousand on the books of Autostrade per l Italia; b) 50% of Project Financing (amounting to E47,615 thousand at 30 June 2011) on the books of the Stalexport Autostrady group. Cash flow hedges relating to the bond issue of E2,000 million redeemed on 9 June 2011 have been unwound. As at. 31 December 2010 these hedges had a fair value of E25,994 thousand. Further details of derivatives subscribed to by the Group for hedging purposes are contained in note 9.3 Financial risk management. Other medium to long term financial liabilities (non current) / (E23,437 thousand) (current) / (E24,239 thousand) As at 31 December 2010 other medium to long term financial liabilities essentially consisted of deferred income in the form of interest rate subsidies linked to the interest free loan from the Central Guarantee Fund. These liabilities have been reduced to zero following reclassification to liabilities related to discontinued operations of the subsidies receivable by Società Autostrada Tirrenica, and due to repayment of the amount attributable to Tangenziale di Napoli, in accordance with the terms of the relevant Single Concession Arrangement. Short term borrowings / E277,228 thousand (E278,720 thousand) The carrying amount at 30 June 2011 essentially consists of: a) short term borrowings of E174,558 thousand, which are up E167,984 thousand, primarily due to the assumption of new debt, in the form of a Promissory Note, by Autostrade Holding do Sur to fund the acquisition, via the issue of new shares, of a 50% interest in Nueva Inversiones, the Chilean company set up by the Atlantia Group to acquire the investments covered by the agreement reached with the Acciona group on 18 April 2011 (see note 6.2 for further details); 111

114 3. Condensed interim consolidated financial statements b) accrued borrowing costs on medium/long term borrowings, amounting to E99,911 thousand, having decreased by E151,255 thousand primarily following the payment of interest on bond issues and of differentials on derivatives Other non current liabilities / E37,339 thousand (E44,151 thousand) The reduction of E6,812 thousand over the period essentially derives from the release of a portion of the deferred income (the higher revenue associated with the X variable) collected in previous years by Autostrade Meridionali Trading liabilities / E1,574,833 thousand (E1,307,429 thousand) The increase in trading liabilities (up E267,404 thousand) is primarily due to a E158,824 thousand increase in amounts payable to the operators of interconnecting motorways, reflecting the contractually agreed timing of the settlement of amounts due to and from other motorway operators, a E54,117 thousand increase in amounts payable to suppliers, above all due to the greater volume of work carried out by the subsidiary, Pavimental, and an increase in other trading liabilities, essentially relating to deferred income from customers attributable to Telepass (up E9,523 thousand) and TowerCo. (up E8,780 thousand). (E000) Increase/(Decrease) Trade payables 800, ,702 54,117 Payable to operators of interconnecting motorways 604, , ,824 Tolls in the process of settlement 140, ,367 29,756 Deferred income, accrued expenses and other trading liabilities 29,030 4,323 24,707 Total 1,574,833 1,307, , Other current liabilities / E443,107 thousand (E473,862 thousand) An analysis of the carrying amount is shown below. (E000) Increase/(Decrease) Amounts payable to ANAS and the Ministry of the Economy and Finance 96, ,793 56,312 Payable to staff 64,969 51,625 13,344 Payable to expropriated companies 56,306 63,167 6,861 Guarantee deposits by users who pay by direct debit 55,592 55, Social security contributions payable 49,391 39,819 9,572 Taxation other than income taxes 37,813 18,110 19,703 Other current liabilities 82,555 92,888 10,333 Total 443, ,862 30,755 The reduction essentially reflects a decrease in amounts payable to ANAS and the Ministry of the Economy and Finance, following the payments made in the first half, after deducting the impact of the further increase in the concession fee introduced from 1 January

115 Notes 8. Notes to the consolidated income statement This section analyses the main income statement items. Amounts for the first half of 2010 are shown in brackets. 8.1 Toll revenue / E1,572,673 thousand (E1,462,056 thousand) Toll revenue of E1,572,673 thousand is up E110,617 thousand (7.6%) on the first half of 2010 (E1,462,056 thousand), primarily reflecting: a) toll increases to be passed on to ANAS (up E91,150 thousand on the first half of 2010 and accounting for a 6.2% increase in toll revenue) in connection with the matching increases in concession fees introduced on 1 July 2010 and 1 January 2011; b) application of annual toll increases by the Group s Italian operators from 1 January 2011 (including a 1.92% increase for Autostrade per l Italia); c) the decline in traffic on the network operated by the Group s Italian operators (down 1.2%), partially offset by an improvement in the traffic mix (up 0.2% on Autostrade per l Italia s network). Further information on other factors influencing the increase in toll revenue, on the toll charge increases applied. by the Group s motorway operators and on traffic trends is provided in the relevant section of the report on operations. The portion of toll revenue relating to the latter part of the period is calculated on the basis of reasonable estimates, partly due to the interconnected nature of the network and the need to allocate revenue among the various operators. 8.2 Revenue from construction services / E416,302 thousand (E350,410 thousand) An analysis of this revenue is shown below. (E000) H H Increase/(Decrease) Construction service revenue Services for which additional economic benefits are received 379, , ,386 Government grants for services for which additional economic benefits are not received 36, ,358 80,894 Revenue from services provided by sub operators 4,600 4,600 Total 416, ,410 65,892 Construction services provided during the period are up on the first half of 2010, reflecting services providing additional economic benefits. In line with the accounting model adopted pursuant to IFRIC 12, this revenue, which represents the consideration for services rendered, is recognised at fair value based on total costs incurred, represented by operating costs and financial expenses. Moreover, in the first half of 2011 the Group carried out additional construction services for which no additional benefits are received, amounting to E230,222 thousand, for which the Group made use of a portion of the specifically allocated Provisions for construction services required by contract (accounted for as a reduction in operating costs for the period). Details of investments in motorway infrastructure are provided in note 7.2, above. 113

116 3. Condensed interim consolidated financial statements 8.3 Contract revenue / E28,818 thousand (E28,706 thousand) Contract revenue is determined on the basis of the stage of completion of contracts and includes the change in work in progress. The balance at the end of the period is in line with the figure for the first half of 2010, reflecting an increase in work carried out for external customers by the US company, Electronic Transaction Consultants, primarily as a result of contract wins in Georgia and Illinois, offset by a reduction in revenue generated by Spea from design work for Milan s Outer Ring Road (a contract nearing completion). 8.4 Other operating income / E278,437 thousand (E270,312 thousand) Other operating income consists of the following items. (E000) H H Increase/(Decrease) Revenue from service areas 123, ,771 1,890 Revenue from Telepass and Viacard fees 57,775 54,634 3,141 Maintenance revenue 14,266 17,689 3,423 Revenue on the sale of technology devices and services 6,597 6, Advertising revenue 5,552 5, Other recurring operating income 68,109 62,893 5,216 Other non recurring operating income 2,477 1,399 1,078 Total 278, ,312 8,125 Other operating income of E278,437 thousand is up E8,125 thousand (3.0%) on the first six months of 2010 (E270,312 thousand), reflecting: a) an increase in commercial revenue from service areas and payment systems, reflecting annual contractual increases in service area royalties applied as from 1 January 2011 and growth in the customer base (approximately 420 thousand new Telepass devices in circulation and around 250 thousand new subscribers to the Premium option); b) an increase in other income, essentially attributable to Autostrade per l Italia and relating above all to sales of solar energy and penalties receivable from suppliers. 8.5 Raw and consumable materials / E165,448 thousand ( E138,248 thousand) This item, which consists of purchases of materials and the change in inventories of raw and consumable materials, increased in the first half of 2011 as a result of a rise in construction services carried out by Group companies. 8.6 Service costs / E627,604 thousand ( E627,047 thousand) Service costs include building, transport and professional services primarily in connection with motorway construction and maintenance services. Service costs are in line with the first half of 2010, reflecting the fact that an increase in service costs relating to construction activities was offset by a reduction in motorway maintenance costs. As noted above, in line with the accounting model adopted pursuant to IFRIC 12, revenue from construction services is recognised on the basis of the cost of external services, personnel expense and financial expenses (the latter being incurred in relation to investment in construction services for which additional economic benefits are received under the relevant concession arrangements). Provisions for construction services required by contract are also used on the basis of the above costs incurred for construction services for which no additional benefits are received. 114

117 Notes 8.7 Personnel expense / E316,740 thousand ( E315,451 thousand) An analysis of personnel expense is shown below. (E000) H H Increase/(Decrease) Wages and salaries 231, ,860 13,598 Social security contributions 68,581 64,262 4,319 Post employment benefits (including payments to supplementary pension funds or to INPS) 11,953 11, Directors fees 3,349 3, Other personnel expense 2,168 18,591 16,423 Staff costs 317, ,451 2,058 Capitalised personnel exepense for activities not relation to concession assets Total 316, ,451 1,289 Personnel expense of E317,509 thousand, before deducting capitalised expenses, are up E2,058 thousand (0.6%) on the first half of 2010 (E315,451 thousand). This reflects: a) an increase of 465 in the average workforce (up 4.9%), primarily reflecting the increased volume of construction work carried out for the Group by Spea and Pavimental (up 285 on average) and personnel hired by Electronic Transaction Consultants to work on the contracts acquired in Florida, Georgia and Texas (up 258 on average); b) a decrease in the average unit cost (down 4.3%), primarily due to the different impact of long term management incentive plans, included in Other personnel exepnse in the table above, in the two corresponding periods (a reduction of E13.7 million or 4.4%). The following table shows the average workforce, broken down by position: Average workforce H H Increase/(Decrease) Senior managers Middle managers and administrative staff 4,947 4, Toll collectors 2,890 2, Manual workers 1,846 1, Total 9,861 9, Personnel expense for the first half includes E311 thousand, recognised in a contra entry in equity, corresponding to the fair value of the share options vesting in 2010 under the long term incentive plans more fully described in note 7.12, to which reference should be made. 8.8 Other operating costs / E262,899 thousand ( E189,759 thousand) An analysis of other operating costs is shown in the table below. (E000) H H Increase/(Decrease) Concession fees 222, ,299 91,641 Grants and donations 16,071 22,504 6,433 Lease expense 9,546 8, Direct and indirect taxes 5,019 5, Provisions for risks and the charges 3,915 3, Other recurring operating costs 8,145 5,873 2,272 Other non recurring operating costs 4,871 3,726 1,145 Change in provisions for the repair and replacement of assets to be handed over 7,608 9,117 16,725 Total 262, ,759 73,

118 3. Condensed interim consolidated financial statements The E73,140 thousand increase in other operating costs is primarily linked to an increase in the concession fees paid by the Group s Italian operators. This is essentially due to the increases in concession fees introduced on 1 July 2010 and 1 January 2011, partially offset by a reduction in provisions and impairments, primarily referring to provisions for the repair and replacement of assets to be handed over at the end of the concession term. 8.9 Use of provisions for construction services required by contract. E230,222 thousand (E223,601 thousand) This item regards the use, during the first half of 2011, of provisions for construction services required by contract in relation to works for which no additional economic benefits are received. The provisions used, based on the construction services provided during year, are recognised as indirect adjustments to the relevant categories of cost, classified by nature, incurred in rendering construction services during the period by the Group operators. Further information on construction services and capital expenditure during the period is provided in notes 7.2 and (Impairment losses)/reversal of impairment losses / E4,485 thousand ( E8,214 thousand) The reduction compared with the first half of 2010 is entirely due to reduced impairment losses on trade receivables arising in previous years, in recognition of the risk of their partial non recoverability Financial income/(expenses) E371,223 thousand ( E304,541 thousand). Income from financial assets / E62,937 thousand (E126,614 thousand). Net financial expenses / E436,503 thousand ( E435,181 thousand). Foreign exchange gains/(losses) / E2,343 thousand (E4,026 thousand) An analysis of financial income and expenses is shown below. (E000) H H Increase/(Decrease) Income from transactions in derivative financial instruments 19, ,325 85,780 Income from discounting to present value 8,437 8, Interest and fees on bank and post office deposits 26,857 6,898 19,959 Other financial income 7,997 5,941 2,056 Financial income 62, ,569 63,733 Dividends from investments Income from financial assets 62, ,614 63,677 Financial expenses from discounting of provisions for construction 89,439 67,379 22,060 services required by contract and other provisions Interest on bonds 210, ,187 27,803 Interest on medium/long term borrowings 38,628 39, Losses on derivative financial instruments 64,034 74,002 9,968 Interest and fees on bank and post office deposits Other financial expenses 7,928 71,564 63,636 Impairment losses on investments measured at cost or fair value 25,000 25,000 Interest rate subsidies Other financial expenses 347, ,802 20,738 Net financial expenses 436, ,181 1,322 Unrealised foreign exchange gains 42,998 86,863 43,865 Realised foreign exchange gains Foreign exchange gains 43,184 87,435 44,251 Unrealised foreign exchange losses 40,258 82,805 42,547 Realised foreign exchange losses Foreign exchange losses 40,841 83,409 42,568 Foreign exchange gains/(losses) 2,343 4,026 1,683 Total 371, ,541 66,

119 Notes Financial expenses, after deducting financial income, total E371,233 thousand, marking an increase of E66,682 thousand (21.9%) on the first half of 2010 (E304,541 thousand). The increase primarily reflects the following factors: a) the previous mentioned impairment loss of E25,000 thousand in respect of the carrying amount of the investment in Alitalia Compagnia Aerea Italiana; b) a rise in net interest payable (up E11,920 thousand), essentially following an increase in the differential between the borrowing costs incurred in order to provide the financial resources needed to redeem bonds of E2,000 million on 9 June 2011 and returns on the investment of liquidity; c) an increase in other net financial expenses (up E5,598 thousand), partly due to non recurring income of approximately E4,001 thousand recognised by Stalexport Autostrada Malopolska in the first half of 2010 following the restructuring of its debt to the Polish grantor; d) an increase in financial expenses from discounting of provisions for construction services required by contract and other provisions (up E22,060 thousand or 32.6% on the first half of 2010), primarily reflecting increases in interest rates. As required by IAS 39, financial income and expenses for the first half of 2010 included movements in the fair value of fair value hedges entered into to hedge the bonds issued by the Group and maturing in These hedges were unwound in September Share of profit/(loss) of associates and joint ventures accounted for using the equity method / E13,931 thousand ( E3,409 thousand) The share of the profit/(loss) of associates and joint ventures accounted for using the equity method has resulted in a net profit of E13,931 thousand, compared with the loss of E3,409 thousand recognised in the first half of The improvement, totalling E17,340 thousand, primarily reflects a combination of the following: a) recognition of the Group s share of the profits reported by the Autostrade Sud America group, totalling E9,164 thousand (E8,776 thousand for the first half of 2010, including the share of the profit of Autostrade per il Cile, incorporated with effect from 1 January 2010) and by the Brazilian operator, Triangulo do Sol, totalling E5,563 thousand (E1,750 thousand for the first half of 2010); b) a partial reversal, totalling E535 thousand for the first half of 2011, of the impairment loss of E15,887 thousand recognised in the first half of 2010 on the investment in IGLI, based on a comparison between the market value of Impregilo s shares and the relevant carrying amount. 117

120 3. Condensed interim consolidated financial statements 8.13 Income tax (expense)/benefit / E205,914 thousand ( E194,783 thousand) A comparison of the tax charges for the two corresponding periods is shown in the following table. (E000) H H Increase/(Decrease) IRES 116, ,912 5,964 IRAP 45,746 46, Other taxes 1, ,300 Current tax expense 164, ,411 5,163 Recovery of previous years income taxes 99, ,417 Previous years income taxes 1, Differences on current tax expense for previous years 97, ,452 Provisions 45,502 47,841 2,339 Releases 94,551 69,259 25,292 Change in estimates for previous years 96,171 1,489 94,682 Deferred tax income 145,220 22, ,313 Provisions 3,276 4, Releases 9,070 2,010 7,060 Change in estimates for previous years Deferred tax expense 5,794 2,773 8,567 Total 205, ,783 11,131 Income tax expense for the first half of 2011 amounts to E205,914 thousand and is up E11,131 thousand (5.7%) on the first half of 2010 (E194,783 thousand). This is substantially in line with the improvement in profit before tax from continuing operations, reflecting the substantially equivalent impact of gains and losses on the Group s investments, and thus not significant for tax purposes. As described in note 7.5, to which reference should be made, tax expense for the first half of 2011 reflects the impact of the Ministerial Decree of 8 June 2011 (as provided for by the so called Milleproroghe, or Thousand postponements, legislation), of the response, received on 9 June 2011, to the request for a ruling submitted to the Italian tax authorities by Autostrade per l Italia in 2010 and, lastly, of Law 111 of 15 July 2011, containing urgent measures to promote financial stability Profit/(loss) from discontinued operations / E102,063 thousand ( E8,612 thousand) The profit from discontinued operations amounts to E102,063 thousand for the first half of 2011 (a loss of E8,612 thousand for the first half of 2010). The figure includes the gain of E96,690 thousand generated by the sale of the investment in Strada dei Parchi and including the fair value measurement of the remaining 2% interest covered by a call/ put option agreed with Toto Costruzioni Generali. This item also includes the operating results for the period of Società Autostrada Tirrenica and Strada dei Parchi which, as noted above and as required by IFRS 5, have been recognised in this item rather than being included in each component of the consolidated income statement. The improvement in the result compared with the first half of 2010 essentially reflects the cessation, in accordance with the above accounting standard, of depreciation and amortisation from the second quarter of 2011 and the third quarter of 2010, respectively. As a result, Società Autostrada Tirrenica s contribution to the corresponding amount for the first half of 2010 has also been reclassified with respect to the amount published in the interim consolidated financial statement as at and for the six months ended 30 June 2010, which already included Strada dei Parchi s operating result for the period in the component relating to discontinued operations. 118

121 Notes At the date of deconsolidation, Strada dei Parchi contributed negative equity to the consolidated statement of financial position, as calculated in compliance with the international accounting standards adopted by the Atlantia Group. (E000) H H Increase/(Decrease) Operating income 82, ,397 20,022 Operating costs 60,366 86,630 26,264 Financial income/(expenses) 13,569 24,554 10,985 Income tax (expense)/benefit 3, ,763 Profit/(Loss) from discontinued operations (Società Autostrada Tirrenica and Strada dei Parchi) 4,484 7,980 12,464 Gain on sale of Strada dei Parchi, after taxation 96,690 96,690 Other net profit/(loss) from discontinued operations ,521 Profit/(Loss) from discontinued operations 102,063 8, , Earnings per share The following table shows the calculation of basic and diluted earnings per share with comparative amounts. As required by IAS 33, the weighted average number of shares outstanding was recomputed to take account of Atlantia s bonus issue in April 2011, as described in note 7.12 above. An adjustment was also made to the computation of the weighted average number of shares with dilutive effect to reflect share option plans. H H Number of shares outstanding 630,311, ,311,992 Weighted average number of treasury shares in portfolio 12,652,968 12,652,968 Weighted average number of shares outstanding for the calculation of basic earnings per share 617,659, ,659,024 Weighted average number of shares held under share option plans with dilutive effect 156,864 99,597 Weighted average number of all shares outstanding for the calculation of diluted earnings per share 617,815, ,758,620 Profit for the year attributable to owners of the parent (E000) 436, ,605 Basic earnings per share (E) Diluted earnings per share Profit from continuing operations attributable to owners of the parent (E000) 336, ,281 Basic earnings per share from continuing operations (E) Diluted earnings per share from continuing operations (E) Profit/(Loss) from discontinued operations attributable to owners of the parent (E000) 100,655 4,676 Basic earnings per share from discontinued operations (E) Diluted earnings per share from discontinued operations (E)

122 3. Condensed interim consolidated financial statements 9. Other financial information 9.1 Notes to the consolidated statement of cash flows Consolidated cash flow in the first half of 2011, compared with the same period of the previous year, is analysed below and shown in the statement of cash flows included in the Consolidated financial statements. Cash flows during the first half of 2011 generated a cash outflow of E1,742.0 million, compared with a net cash outflow of E249.6 million in the first half of Operating activities generated cash flows of E1,017.1 million in the first half of 2011, compared with E765.1 million in the first half of The increase in cash flow for operating activities reflects the improved performance of continuing operations, the positive contribution of working capital, essentially due to an increase in trading liabilities (higher amounts payable to the operators of interconnecting motorways and increased trade payables), and the positive impact, in terms of cash flow, of the above confirmation of the deductibility of the carrying amounts recognised in application of IFRIC 12. Cash used in investing activities totals E842.0 million, marking an increase of E197.7 million on the first half of 2010 (E644.3 million). This essentially reflects purchases of investments, totalling E307.7 million (primarily incurred by the Chilean company, Inversiones Autostrade Holding do Sur to acquire a 50% stake in Nueva Inversiones) and increased investments in motorway infrastructure, net of the related government grants and the increase in financial assets in the form of takeover rights, totalling E205.1 million. The first half of 2011 reports an increase in current and non current financial assets compared with the outflow of the first half of 2010, essentially due to greater releases from term deposits in relation to investments carried out in previous years. Net cash used in financing activities in the first half of 2011 amounts to E1,916.2 million (compared with E370.1 million), essentially due to the above redemption of bonds on 9 June 2011 and payment of the final dividend for the previous year, partly offset by new borrowings used during the period. In compliance with IFRS 5, the following table shows net cash generated from or used in operating, investing and financing activities by Società Autostrada Tirrenica and Strada dei Parchi, whose cash flows have been classified in accordance with IFRS 5 and thus included in the cash flows analysed above. (E000) H H Net cash generated from/(used in) operating activities 20,938 22,441 Net cash generated from/(used in) investing activities 41,287 7,495 Net cash generated from/(used in) financing activities 107,061 8,

123 Notes The following table shows the assets and liabilities deconsolidated in the first half of 2011, following the sale of the 58% interest in Strada dei Parchi. Assets (E000) Liabilities (E000) Non current assets Non current liabilities Property, plant and equipment 5,146 Non current provisions 16,310 Intangible assets 953,104 Non current financial liabilities 907,551 Investments 5 Deferred tax liabilities 12,564 Non current financial assets 8,216 Other non current liabilities Deferred tax assets 66,373 Total non current assets 1,032,844 Total non current liabilities 936,425 Current assets Current liabilities Trading assets 36,136 Current provisions 20,208 Cash and cash equivalents 27,743 Trading liabilities 83,051 Other current financial assets Current financial liabilities 63,637 Current tax assets 3,163 Current tax liabilities 3,571 Other current assets 611 Other current liabilities 7,997 Total current assets 67,653 Total current liabilities 178,464 TOTAL ASSETS 1,100,497 TOTAL LIABILITIES 1,114,889 The following table shows the impact of the above sale of 58% of Strada dei Parchi on net cash at 30 June The first tranche (E60.0 million) of the total consideration due was collected at the end of July 2011, in accordance with the deadline provided for in the related contract. (E000) Sale consideration for 58% of the investment 86,007 Receivables deriving from the sale as at 30 June ,007 Net cash and cash equivalents transferred 27,743 Net cash outflow at 30 June , Notes to the analysis of consolidated net debt The following statement shows the Group s net debt broken down into its principal components, as already described in the notes to financial components of the statement of financial position, and amounts due to and from related parties, as required by CONSOB Communication DEM/ of 28 July Amounts relating to the financial assets and liabilities of Società Autostrada Tirrenica as at 30 June 2011, which in the consolidated statement of financial position have been included in Non current assets held for sale and assets related to discontinued operations and Liabilities related to discontinued operations, have been accounted for in the individual components of current financial assets and liabilities in the following schedule, based on their nature. 121

124 3. Condensed interim consolidated financial statements Consolidated (net funds)/net debt (Em) Increase/(Decrease) Non current financial liabilities 10, , Bond issues 7, , Medium/long term borrowings 2, , Derivative liabilities Other financial liabilities Current financial liabilities , ,989.4 Bank overdrafts Short term borrowings Current portion of medium/long term borrowings , ,242.7 Bank account balances payable to unconsolidated Group companies Other financial liabilities Bank overdrafts related to discontinued operations Financial liabilities related to discontinued operations Total financial liabilities 10, , ,714.5 Cash and cash equivalents , ,770.2 Cash Cash equivalents , ,001.7 Cash and cash equivalents attributable to discontinued operations Other current financial assets Current portion of medium/long term financial assets Current financial assets deriving from concession rights Current financial assets deriving from government grants Term deposits convertible within 12 months Other financial assets of which due from related parties Financial assets held for sale or related to discontinued operations of which due from related parties Total current financial assets 1, , ,860.2 (Net funds)/net debt in accordance with CESR Recommendation of 10 February , , Non current financial assets Non current financial assets deriving from concessions Non current financial assets deriving from government grants Term deposits convertible after 12 months Derivative assets Other financial assets (Net funds)/net debt 8, ,

125 Notes 9.3 Financial risk management The Atlantia Group s financial risk management objectives and policies In the normal course of business, the Atlantia Group is exposed to: a) market risk, principally linked to the effect of movements in interest and foreign exchange rates on financial assets acquired and financial liabilities assumed; b) liquidity risk, with regard to ensuring the availability of sufficient financial resources to fund the Group s operating activities and repayment of the liabilities assumed; c) credit risk, linked to both ordinary trading relations and the likelihood of defaults by financial counterparties. The Atlantia Group s financial risk management strategy is derived from and consistent with the business goals set by Atlantia s Board of Directors that are contained in the various strategic plans approved by the Board. The strategy aims to both manage and control such risks. Market risk The adopted strategy for each type of risk aims, wherever possible, to eliminate interest rate and currency risks and minimise borrowing costs, whilst taking account of stakeholders interests, as defined in the Financial Policy approved by Atlantia s Board of Directors on 16 September Management of these risks is based on prudence and best market practice. The main objectives set out in this policy are as follows: a) to protect the scenario forming the basis of the strategic plan from the effect of exposure to currency and interest rate risks, identifying the best combination of fixed and floating rates; b) to pursue a potential reduction of the Group s borrowing costs within the risk limits determined by the Board of Directors; c) to manage derivative financial instruments taking account of their potential impact on the results of operations and financial position in relation to their classification and presentation. The Group s derivative hedging instruments at 30 June 2011 are classified as cash flow hedges in accordance with IAS 39. The fair value of financial derivative instruments is based on expected discounted cash flows, using the market interest rate curve at the measurement date. Amounts in foreign currencies other than the euro are translated at closing exchange rates communicated by the European Central Bank. The residual average term to maturity of the Group s debt is approximately 7 years and 6 months. The average cost of medium/long term borrowings in the first six months of 2011 was approximately 4.9%. Monitoring is, moreover, intended to assess, on a continuing basis, counterparty creditworthiness and the degree of risk concentration. Interest rate risk Interest rate risk is linked to uncertainty regarding the performance of interest rates, and takes two forms: a) cash flow risk: this is linked to financial assets and liabilities with cash flows indexed to a market interest rate. In order to reduce floating rate debt, the Group has entered into interest rate swaps (IRS), classified as cash flow hedges. The hedging instruments and the underlying financial liabilities have matching terms to maturity and notional amounts. Tests have shown that the hedges were fully effective during the period. Changes in fair value are recognised in the statement of comprehensive income, with no recognition of any ineffective portion in the income statement. Interest income or expense deriving from the hedged instruments is recognised simultaneously in the income statement; 123

126 3. Condensed interim consolidated financial statements b) fair value risk: this represents the risk of losses deriving from an unexpected change in the value of fixed rate financial assets and liabilities following an unfavourable shift in the market interest rate curve. There were no hedges on the books at 30 June 2011 that could be classified as fair value hedges in accordance with IAS 39. As a result of hedging interest rates, 91% of interest bearing debt is fixed rate. Currency risk Currency risk can result in the following types of exposure: a) economic exposure incurred through purchases and sales denominated in currencies other than the company s functional currency (the euro); b) translation exposure through equity investments in subsidiaries and associates whose separate financial statements are denominated in a currency other than the euro; c) transaction exposure incurred by making deposits or obtaining loans in currencies other than the euro. The Group s prime objective of currency risk management strategy is to minimise transaction exposure through the assumption of liabilities in currencies other than the euro. Cross currency swaps (CCIRS) with notional amounts and Type (E000) Purpose of hedge Currency Contract term Cash flow hedges Cross Currency Swap Currency fluctuations Eur Interest Rate Swap Interest rate fluctuations Eur Interest Rate Swap Interest rate fluctuations Eur Interest Rate Swap Interest rate fluctuations Eur Total cash flow hedges resulting in fair value loss Cross Currency Swap Currency fluctuations Eur Total cash flow hedges resulting in fair value gain Total hedging derivatives Derivatives not accounted for as hedges Eur Put/Usd Call option Currency fluctuations Eur Total derivatives not accounted for as hedges resulting in fair value gain Total derivatives not accounted for as hedges Total (1) The fair value of hedging derivatives excludes accruals at the end of the reporting period. (2) This amount is included in the current portion of medium/long term financial liabilities. (3) This amount is included in the current portion of medium/long term financial assets. (4) This amount includes E4,514 thousand classified in the current portion of medium/long term financial liabilities. (5) This derivative instrument was unwound at the time of redemption, in June 2011, of the E2,000 million bond issue ( ). 124

127 Notes maturities matching those of the underlying financial liabilities were entered into specifically to eliminate the currency risk to which the sterling and yen denominated bonds are exposed. These swaps also qualify as cash flow hedges and tests have shown that they are fully effective. 12% of the Group s medium/long term debt is denominated in currencies other than the euro. Taking account of foreign exchange hedges and the proportion of debt denominated in the local currency of the country in which the relevant Group company operates (around 4%), the Group is basically not exposed to currency risk on translation into euros. The translation risk associated with investments in companies whose financial statements are denominated in currencies other than the euro is not hedged. The following table summarises outstanding derivative financial instruments at 30 June 2011 (compared with 31 December 2010) and shows the corresponding market value and the hedged financial liability. In order to assure full disclosure, the table also shows outstanding derivative contracts, the contract for the forward purchase of US dollars (a European currency option) to hedge the potential need for Usd 21,800 thousand in connection with the possible exercise of the call option on an additional 16% of ETC s share capital. Due to the fact that all of the requirements of IAS 39 have not been satisfied to classify the forward purchase as a hedge, it has been classified as a trading asset recognised at fair value through profit or loss. Notional amount Fair value (1) Hedged financial liability Description Par value Term 750, , , ,975 Bond (Gbp) 750, ,000,000 25,994 (2) (4) Bond ,000, , ,000 34,511 21,544 (5) Term Loan Facility 680, ,799 47,615 1,098 1,684 50% Project Loan Agreement (Pln) 47, ,517,799 1,477, , , , ,176 40,209 27,696 Bond (Jpy) 149, , ,176 40,209 27,696 3,666,975 1,626, , ,507 16,315 15,083 1,194 (3) 92 (3) Option to acquire additional 16% of ETC 15, ,315 15,083 1, ,315 15,083 1, ,683,290 1,641, , ,

128 3. Condensed interim consolidated financial statements Sensitivity analysis Sensitivity analysis describes the impact that the interest rate and foreign exchange movements to which the Group is exposed would have had on the income statement and on equity during the period. The interest rate sensitivity analysis is based on the exposure of derivative and non derivative financial instruments at the end of the reporting period, assuming, in terms of the impact on the income statement, a 0.10% (10 bps) shift in the market interest rate curve at the beginning of the year, whilst, with regard to the impact of changes in fair value on equity, the 10 bps shift in the curve was assumed to have occurred at the measurement date. The following outcomes resulted from the analysis carried out: a) in terms of interest rate risk, an unexpected and unfavourable 0.10% shift in market interest rates would have resulted in a negative impact on the income statement, totalling E1,185 thousand, and on the statement of comprehensive income, totalling E2,126 thousand, before the related taxation; b) in terms of currency risk, an unexpected and unfavourable 10% shift in the exchange rate would have resulted in a negative impact on the income statement, totalling approximately E9 thousand, before the related taxation. Liquidity risk Liquidity risk relates to the risk that cash resources may be insufficient to fund the payment of liabilities as they fall due. The Atlantia Group believes that its ability to generate cash assures an ample diversification of sources of finance and the availability of committed and uncommitted lines of credit provides sufficient alternative sources of finance to meet projected financial needs. At 30 June 2011 the Group has cash reserves of E3,959 million, consisting of: a) E778 million in cash and/or investments with terms to maturity of no more than 120 days; b) E381 million primarily in term deposits allocated to finance the execution of specific construction services; c) E2,800 million in undrawn committed lines of credit, details of which are shown in the following table. (Em) Drawdown period Final maturity Available Drawn Undrawn lines Committed Revolving Credit Facility May 2015 June ,000 1,000 Medium/long term committed EIB line Tranche A , Medium/long term committed EIB line Tranche B Medium/long term committed CDB/EIB line ,12, Medium/long term committed CDB/SACE line ,12,2024 1,000 1,000 Total lines of credit 3,800 1,000 2,800 Credit risk The Group manages credit risk essentially through recourse to counterparties with high credit ratings and does not report significant credit risk concentrations in accordance with the Financial Policy. Credit risk deriving from outstanding derivative financial instruments can also be considered marginal in that the counterparties involved are major financial institutions. Allowance for impairment on individually material items are established when there is objective evidence that the Group will not be able to collect all or any of the amounts due. The amount of the allowance takes account of estimated future cash flows and the date of collection, any future recovery costs and expenses, and the value of any security and guarantee deposits received from customers. General provisions, based on the available historical and statistical data, are established for items for which specific provisions have not been made. 126

129 Notes 10. Other information 10.1 Analysis by geographical segment The following table shows an analysis of the Group s revenue and non current assets by geographical segment. (E000) Revenue Non current assets (*) H H Italy 2,242,467 2,065,182 16,331,718 16,367,231 Overseas 53,763 46, , ,801 2,296,230 2,111,484 16,802,816 16,841,032 (*) Non current assets do not include financial instruments, deferred tax assets, post employment benefit assets and insurance claims. The caption Overseas primarily relates to the contributions of companies operating in Poland (the Stalexport Autostrady group), the United States (the Autostrade International US Holdings group) and the Chilean operator, Los Lagos. Overseas operations, which do not make a significant contribution to the Group s consolidated financial statements, either in absolute or percentage terms, are not shown in greater detail since the breakdown by individual country is not of significance Guarantees The Group has certain guarantees in issue to third parties at 30 June These include, by importance: a) guarantees of E175,938 thousand, which include both the guarantees issued by Atlantia in favour of the Chilean holding company, Autopista do Pacifico (a subsidiary of Autostrade Sud America), guaranteeing the loan obtained by this company to finance the acquisition of the motorway operator, Costanera Norte, and those issued in favour of Autostrade per il Cile, which were transferred to Autostrade Sud America following the merger of the two companies; b) the guarantee of E159,525 thousand issued by Atlantia in favour of Autostrade Holding do Sur in relation to this company s issue of an international Promissory Note, with the purpose of funding the acquisition, via the issue of new shares, of a 50% interest in Nueva Inversiones, the Chilean company set up by the Atlantia Group to acquire the investments covered by the agreement reached with the Acciona group on 18 April In addition, at 30 June 2011 the shares held in foreign operators (Stalexport Autopstrada Malopolska SA, Los Lagos, Triangulo do Sol SA, Pune Solapur Expressways and Lusoponte SA), and the shares in Bologna & Fiera Parking have been pledged to collateralise loans granted to certain group companies and to back up commitments made to certain grantors. 127

130 3. Condensed interim consolidated financial statements 10.3 Contract reserves Group companies had contract reserves of E780 million as at 30 June 2011, a currently indeterminable portion of which is likely to be paid to contractors. Any amount paid will be recognised as an increase in the cost of intangible concession rights and subsequently amortised. In the case of other contract reserves not related to investing activities (contract work and maintenance), any future charges are covered by provisions for disputes Related party transactions This section describes the Atlantia Group s material related party transactions, as identified in accordance with the criteria defined in the specific procedure approved by Atlantia s Board of Directors in 2010, in implementation of CONSOB Resolution Related party transactions are concluded on normal market terms and conditions and are conducted on an arm s length basis. Related party transactions do not include transactions of an atypical or unusual nature. The Atlantia Group did not engage in material transactions with its direct or indirect parents during the first half of For the purposes of the above CONSOB Resolution, which applies the requirements of IAS 24, the Autogrill group, which is under the common control of Edizione Srl, is treated as a related party. With regard to relations between the Atlantia Group s motorway operators and the Autogrill group, it should be noted that, at 30 June 2011, Autogrill holds 139 food service concessions for service areas along the Group s motorway network. In the first half of 2011 the Group earned revenue of approximately E35.5 million on transactions with Autogrill, including E31.7 million in royalties deriving from management of service areas. This current income is generated by contracts entered into over various years, of which a large part was awarded as a result of transparent and non discriminatory competitive tenders. During the first half of 2011 fees, non monetary benefits, bonuses, incentives and other forms of compensation were paid to the Chairman of Atlantia, Fabio Cerchiai (E0.3 million), and the Chief Executive Officer and General Manager, Giovanni Castellucci (E3.1 million, including payments under the three year incentive plan for the period ), in relation to positions held in Atlantia and in other Group companies. The following tables show amounts in the income statement and statement of financial position generated by related party transactions, broken down by nature of the transaction (financial or otherwise). 128

131 Notes Related party trading and other transactions Name (Em) H H Assets Liabilities Income Expenses Assets Liabilities Income Expenses Parent companies Schemaventotto Total parent companies Associates GEIE Traforo del Monte Bianco Bologna % Fiera Parking SpA Società Infrastrutture Toscane SpA 0.1 Uirnet SpA Total associates Joint ventures Autostrade Sud America Srl 0.1 Triangulo do Sol Autoestradas SA Total joint ventures Affiliates Autogrill SpA Total affiliates Consortia Consorzio Tangenziale Engineering ELMAS Scarl Consorzio Trinacria Scarl Consorzio Galileo Scarl Consorzio Ramonti Scarl Consorzio R.F.C.C. (in liquidation) Quadrante Total consortia Other investee companies Strada dei Parchi Total other investee companies Other related parties Italcementi SpA Total other related parties Total

132 3. Condensed interim consolidated financial statements Related party financial transactions Name (Em) H H Assets Liabilities Income Expenses Assets Liabilities Income Expenses Associates Società Infrastrutture Toscane SpA Total associates Joint ventures Triangulo do Sol Autoestradas SA Total joint ventures Consortia Consorzio Midra Consorzio Trinacria Scarl ELMAS Scarl Total consortia Other investee companies Beskidzi Dom Maklerski Lusoponte Total other investee companies Total Significant regulatory aspects Snow events in December 2010 On 21 April 2011 ANAS sent Autostrade per l Italia four notices of violation regarding the snow events of December 2010 on the A1 near Florence, the A11 Florence Pisa North, the A14 and on the Pescara Vasto and Loreto Senigallia sections. The notices regard: (i) violation of art. 14 of the Highway Code and the ANAS circular of 8 October 2010; (ii) violation of Autostrade per l Italia s Winter Operations Plan; and (iii) violation of the requirements contained in ANAS s notice of 19 December 2008 and of the subsequent announcement by AISCAT (the Italian Association of Toll Motorway Operators) on 24 December 2008 regarding the full and prompt reporting of emergency situations to IVCA, ANAS s Motorway Concession Inspectorate (this violation does not apply to the notice regarding the A11). Autostrade per l Italia submitted its representations on 10 June A similar notice has been sent to Società Autostrada Tirrenica regarding the snow events on the A12 Livorno Rosignano Marittimo. With regard to the snow events on the A1 Milan Naples on 17 December 2010, the Antitrust Authority has also launched an investigation into the correctness of both the procedures implemented by Autostrade per l Italia in providing information to motorway users about actual driving conditions on the motorways it operates, and the procedures by which the company manages emergency events that have a significant impact on road conditions. On 4 January 2011 the Authority conducted an inspection at Autostrade per l Italia s Rome and Florence offices, obtaining documents and information. In subsequent meetings with the Authority, organised in relation to the proceedings, the company has explained the operational procedures involved in managing winter operations and in communicating with road users via the relevant public information channels (RAI, Isoradio) and by the other means at the company s disposal, namely Variable Message Panels. The company has also given the Antitrust Authority a commitment to improve the procedures used in communicating with road users in the event of adverse weather conditions. Having completed its investigation, on 25 July 2011 the Antitrust Authority notified Autostrade per l Italia that it did not accept the company s commitments and ruled that: (i) the company s conduct on the occasion of the specific event 130

133 Notes in question constitutes an unfair commercial practice under the Consumer Code, warning the company to desist from repeating the practice in the future, (ii) the company should pay an administrative fine of E350,000, (iii) Autostrade per l Italia must communicate, within 60 days of the date of receipt of the ruling, the initiatives its intends to take to comply with the cease and desist notice in point (i). Autostrade per l Italia is currently deciding whether or not to challenge the Authority s ruling before the Regional Administrative Court. Other ongoing litigation Autostrade per l Italia is the defendant in two actions, which are still pending, brought before the Lazio Regional Administrative Court regarding toll charges. The actions, which have been brought by Codacons and other consumers associations, aim to challenge the toll increases introduced in 1999 and With regard to the preliminary design for the Rosignano Marittimo Civitavecchia section of the A12 motorway and the related approval process, in addition to a number of expropriations prior to work getting underway on lot 1 of the Rosignano San Pietro in Palazzi section of the motorway, Società Autostrada Tirrenica is a party, together with ANAS, CIPE (the Interministerial Economic Planning Committee), the Ministry of Infrastructure and Transport and other public bodies, to a number of legal actions pending before Lazio Regional Administrative Court, and to a number of extraordinary appeals to the Head of State, contesting the above CIPE resolution of 18 December 2008 published in the Official Journal of 14 May The Antitrust Authority s appeal to the Council of State requesting annulment of the Lazio Regional Administrative. Court sentences 4994/09 and 5005/09 is still pending. These sentences at first instance partly upheld the appeals brought by ACI Global SpA and Europ Assistance Vai SpA requesting annulment of Antitrust Authority ruling of 23 October 2008 regarding emergency breakdown services. Autostrade per l Italia is a party to the appeals with file numbers R.G. no. 8813/09 and no. 8814/09. On 21 March 2011 Autostrade per l Italia together with Genoa Provincial Authority, the Municipality of Genoa, the Ministry of Infrastructure and Transport, Genoa Port Authority and ANAS were notified of a legal action brought before the Liguria Regional Administrative Court by several hundred members of the public requesting an injunction annulling the Memorandum of Understanding signed on 8 February 2010, relating to the construction of the Genoa Interchange (the so called Gronda di Ponente). A date for the related hearing has yet to be set. On 31 March 2011 Autostrade per l Italia appealed against the ruling issued by ANAS on 3 February 2011 before Lazio Regional Administrative Court. The appeal regards the part in which, whilst approving the preliminary designs for the upgrade of the motorway referred to in art. 15 of the existing Single Concession Arrangement, ANAS assigns the operator responsibility for meeting the costs of the final design in event in which the grantor and the operator fail to reach agreement on the inclusion of such works among the investment commitments. A date for a hearing on the merits has yet to be set. The hearing on the merits of Varese Provincial Authority s suit before the Lombardy Regional Administrative Court was held on 26 May The Authority is seeking cancellation, and an immediate injunction halting application, of Autostrade per l Italia s letter dated 28 September 2010, in which the operator informed the Authority that it was not possible to satisfy its request to eliminate the toll charge on the Varese Gallarate section of motorway, in addition to all arrangements governing tolls on the above motorway section. The court s judgement at first instance is awaited. On 30 May 2011 Autostrade per l Italia filed appeal before Lazio Regional Administrative Court against three rulings issued by ANAS, approving expert appraisals of contract variations regarding the A4 Milan Bergamo Brescia motorway. The appeal regards the part in which the rulings do not recognise the right to a return on the higher amount resulting from the approved appraisals. Judgement is pending, as dates for the related hearings have yet to be set. Finally, Autostrade per l Italia is the defendant in a number of legal actions regarding expropriations, tenders and claims for damages deriving from motorway activities. 131

134 3. Condensed interim consolidated financial statements On 29 July 2011 the Lombardy Regional Administrative Court announced that the legal challenge filed by Varese Provincial Authority had been unsuccessful Events after 30 June 2011 Law Decree 98 of 6 July 2011, converted with amendments into Law 111 of 15 July 2011 Law Decree 98 of 6 July 2011 has, with effect from 1 January 2012, set up the Highways Agency within the Ministry of Infrastructure and Transport, which is responsible for the Agency s policy setting, supervision and control, to be carried out, in respect of financial aspects, in coordination with the Ministry of the Economy and Finance. Among other things, the Agency will take over the role of grantor for existing highway concessions from ANAS, exercising every aspect of the role previously assigned to IVCA, the Motorway Concession Inspectorate, which will be abolished from 1 January The Agency will have the following roles and responsibilities: to propose: (i) plans for the construction of new public roads and new motorways to be operated under concession or to be assigned directly to ANAS, provided that this does not have a negative impact on the public finances, and (ii), again provided that the above condition is met, the direct award to ANAS of concessions to operate motorways where the related concessions have expired or have been revoked; to act as grantor, with responsibility therefore: (i) for selecting motorway operators and awarding the related concession; (ii) for supervising and controlling motorway operators (supervision of construction and operation); and (iii) as an alternative to point (i) above, for awarding concessions directly to ANAS, to be approved by decree issued by the Ministry of Infrastructure and Transport in coordination with the Ministry of the Economy and Finance; to approve designs for works of national importance to be carried out on the road and motorway network, where such works are declared to be of public utility and to be urgent; to make proposals regarding the regulation and revision of tariffs for motorway concessions. With effect from 1 January 2012 ANAS will, within the limits of the available resources and in accordance with public finance objectives, be responsible for: (i) building and operating roads, including toll roads, and public motorways, including as a result of the takeover of concessions that have expired or been revoked provided that this does not have a negative impact on the public finances collecting the related revenue generated by their use; (ii) implementing progressive improvements and upgrades of the public road and motorway network; (iii) providing traffic police services. Stalexport Autostrada Malopolska From 1 July 2011 the shadow toll system previously applied to vehicles weighing over 12 tonnes was abolished and replaced by a system of real tolls, under which these vehicles pay zlotys per kilometre. In addition, the toll for heavy vehicles weighing less than 12 tonnes has also been raised by 11.1% from 1 July

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136 3. Condensed interim consolidated financial statements ANNEX 1 The Atlantia Group s scope of consolidation and investments. at 30 June 2011 Name Registered office Business Currency PARENT Atlantia SpA Rome Holding company Euro SUBSIDIARIES CONSOLIDATED ON A LINE BY LINE BASIS AD Moving SpA Rome Advertising services Euro Autostrade Concessões e Participações Brasil Limitada Sao Paolo (Brazil) Holding company Real Autostrade dell Atlantico Srl Rome Holding company Euro Autostrade Holding do Sur SA Santiago (Chile) Holding company Peso Inversiones Autostrade Holding do Sur Ltda Santiago (Chile) Holding company Peso Autostrade Indian Infrastructure Development Private Limited Mumbai Maharashtra (India) Rupee Autostrade International of Virginia 0&M Inc. Virginia (USA) Motorway operator Dollar Autostrade International US Holdings Inc. Delaware (USA) Holding company Dollar Autostrada Mazowsze SA Katowice (Poland) Motorway operator Zloty Autostrade Meridionali SpA Naples Motorway operation and construction Euro Autostrade Participations Srl Rome Holding company for foreign operations Euro Autostrade per l Italia SpA Rome Motorway operation and construction Euro Autostrade Portugal Concessoes de Infraestructuras SA Sintra (Portugal) Holding company Euro Autostrade Service Servizi al Territorio SpA Rome Maintenance and safety improvements for the Italian motorway network Autostrade Tech SpA Rome Information systems and equipment for the control and automation of traffic and road safety Euro Euro Autostrada Torino Savona SpA Turin Motorway operation and construction Euro Biuro Centrum Spzoo Katowice (Poland) Administrative services Zloty Ecomouv Sas Paris Financing/Design/Construction/Operation of systems necessary for rollout of Eco Tax tolling system Ecomouv D&B Sas Paris Design/Construction/Distribution of systems necessary for rollout of Eco Tax tolling system Euro Euro Electronic Transaction Consultants Co. Richardson (Texas USA) Automated tolling systems Dollar EsseDiEsse Società di Servizi SpA Rome Administrative and general services Euro Giove Clear Srl Rome Cleaning services Euro Infoblu SpA Rome Traffic information Euro (1) This company is listed on the Expandi market managed by Borsa Italiana SpA. 134

137 Notes Issued capital/ Consortium fund as at Company held by % interest in share capital/ consortium fund Overall Group interest (%) Note 630,311, ,000, Autostrade per l Italia SpA 75.00% 75.00% 70,000, Autostrade Portugal Concessoes de Infraestructuras SA % % 1,000, Autostrade per l Italia SpA % % 51,496,771, Autostrade dell Atlantico Srl 99.99% 99.99% 195,054,278, Autostrade Holding do Sur SA % % 500, % 100,00% Autostrade per l Italia SpA 99.99% Spea Ingegneria Europea SpA 0.01% 1.00 Autostrade International US Holdings Inc % % % % Autostrade per l Italia SpA 75.00% Autostrade Participations Srl 25.00% % 20,000, % 86.87% Atlantia SpA 70.00% Stalexport Autostrady SA 30.00% 9,056, Autostrade per l Italia SpA 58.98% 58.98% (1) 5,000, Autostrade per l Italia SpA % % 622,027, Atlantia SpA % % 30,000, Autostrade dell Atlantico Srl % % 1,671, Autostrade per l Italia SpA % % 1,120, Autostrade per l Italia SpA % % 161,720, Autostrade per l Italia SpA 99.98% 99.98% 80, Stalexport Autostrady SA 74.38% 41.83% 1,000, Autostrade per l Italia SpA % % 10, Autostrade per l Italia SpA % % 3, Autostrade International US Holdings Inc % 45.00% 500, Autostrade per l Italia SpA % % 10, Autostrade per l Italia SpA % % 5,160, Autostrade per l Italia SpA 75.00% 75.00% 135

138 3. Condensed interim consolidated financial statements Name Registered office Business Currency Mizard Srl Rome Acquisition, sale and management of investments in information services/radio and television/ telecommunications companies Newpass SpA Verona Transport control and automation information systems and equipment Euro Euro Pavimental SpA Rome Motorway and airport construction and maintenance Euro Pavimental Polska Spzoo Warsaw (Poland) Motorway and airport construction and maintenance Zloty Port Mobility SpA Civitavecchia (Rome) Port mobility services Euro Raccordo Autostradale Valle d Aosta SpA Rome Motorway operation and construction Euro Sociedad Concesionaria de Los Lagos SA Santiago (Chile) Motorway operation and construction Peso Società Autostrada Tirrenica pa Rome Motorway operation and construction Euro Società Italiana per Azioni per il Traforo del Monte Bianco Pré Saint Didier (Aosta) Mont Blanc Tunnel operation and construction Euro Spea Ingegneria Europea SpA Milan Integrated technical and engineering services Euro Stalexport Autostrada Dolnoslaska SA Katowice (Poland) Motorway operator Zloty Stalexport Autostrada Małopolska SA Mysłowice (Poland) Motorway operation and construction Zloty Stalexport Autoroute Sàrl Luxembourg (Luxembourg) Motorway operator Euro Stalexport Autostrady SA Katowice (Poland) Polish holding company Zloty Stalexport Transroute Autostrada SA Mysłowice (Poland) Motorway operator Zloty Tangenziale di Napoli SpA Naples Motorway operation and construction Euro Telepass SpA Rome Automated tolling systems Euro Telepass France Sas Paris Tolling and French eco tax systems Euro Tirreno Clear Srl Rome Cleaning services Euro TowerCo SpA Rome Tower management services Euro (2) The issued capital is made up of E284,350,000 in preference shares. The percentage interest is calculated with reference to all shares in issue, whilst the 58.00% voting rights relates only to ordinary voting shares. (3) Reclassification to Assets/Disposal groups held for sale following agreement to sell 69.1% of inetrest held by Autostrade per l Italia SpA. (4) This company is listed on the Warsaw stock exchange. 136

139 Notes Issued capital/ Consortium fund as at Company held by % interest in share capital/ consortium fund Overall Group interest (%) Note 10, Atlantia SpA % % 1,747, Autostrade per l Italia SpA 51.00% 51.00% 4,669, Autostrade per l Italia SpA 71.67% 71.67% 3,000, Pavimental SpA % 71.67% 1,610, Autostrade per l Italia SpA 70.00% 70.00% 343,805, Società Italiana pa per il Traforo del Monte Bianco 47.97% 24.46% (2) 37,433,282, % 99.99% Autostrade Holding do Sur SA 99.95% Autostrade dell Atlantico Srl 0.05% 24,460, Autostrade per l Italia SpA 94.00% 94.00% (3) 109,084, Autostrade per l Italia SpA 51.00% 51.00% 5,160, Autostrade per l Italia SpA % % 10,000, Stalexport Autostrady SA % 56.24% 29,553, Stalexport Autoroute Sàrl % 56.24% 47,565, Stalexport Autostrady SA % 56.24% 494,524, Autostrade per l Italia SpA 56.24% 56.24% (4) 500, Stalexport Autoroute Sàrl 55.00% 30.93% 108,077, Autostrade per l Italia SpA % % 26,000, % % Autostrade per l Italia SpA 96.15% Autostrade Tech SpA 3.85% 5,000, Telepass SpA % % 10, Autostrade per l Italia SpA % % 20,100, Atlantia SpA % % 137

140 3. Condensed interim consolidated financial statements Name Registered office Business Currency COMPANIES ACCOUNTED FOR USING THE EQUITY METHOD Associates and joint ventures Arcea Lazio SpA Rome Road and motorway construction and operation in Lazio Euro Autostrade for Russia GmbH Vienna (Austria) Holding company Euro Autostrade Sud America Srl Milan Holding company Euro Bologna & Fiera Parking SpA Bologna Design, constructin and management of multi level public car parks Euro GEIE del Traforo del Monte Bianco Courmayeur (Aosta) Maintenance and operation of Mont Blanc Tunnel Euro IGLI SpA Milan Acqusition, sale and management of investments construction Euro Pune Solapur Expressways Private Limited New Delhi (India) Motorway operation and construction Rupee Società Infrastrutture Toscane SpA Florence Design, construction and operation of Prato to Signa motorway link Euro Tangenziali Esterne di Milano SpA Milan Construction and operation of the Milan ring road Euro Triangulo do Sol Autoestradas SA Matao SP (Brazil) Road operation and construction Real COMPANIES ACCOUNTED FOR AT COST OR FAIR VALUE Unconsolidated subsidiaries Pavimental Est SpA Moscow (Russian Federation) Motorway construction and maintenance Rublo Petrostal SA (in liquidation) Warsaw (Poland) Property services Zloty Stalexport Wielkopolska Spzoo W Upadsołci Komorniki (Poland) Steel trading Zloty Other minority shareholdings Autopista do Pacifico SA Santiago (Chile) Holding company Peso Alitalia Compagnia Aerea Italiana SpA Milan Airline Euro Centro Intermodale Toscano Interporto Amerigo Vespucci SpA Livorno Construction and management of an intermodal centre Euro Emittenti Titoli SpA Milan Borsa SpA shareholder Euro Firenze Parcheggi SpA Florence Car park management Euro Huta Jednosc SA Siemianowice (Poland) Steel trading Zloty Instal Nasielsk Spzoo Nasielsk (Poland) Production of steel structures Zloty Inwest Star SA (in liquidation) Starachowice (Poland) Steel trading Zloty Italmex SpA (in liquidation) Milan Trading agency Euro Konsorcjum Autostrada Slask SA Katowice (Poland) Motorway operation and construction Zloty Società di Progetto Brebemi SpA Brescia Concession for the construction and operation of the Brescia Milan link Tangenziale Esterna SpA Milan Design, construction and operation of new Milan orbital motorway Euro Euro Uirnet SpA Rome Operation of national logistics network Euro Walcownia Rur Jednosc Spzoo Siemianowice (Poland) Steel trading Zloty Veneto Strade SpA Venice Construction and maintenance of roads and traffic services Euro Zakłady Metalowe Dezamet SA Nowa Deba (Poland) Steel trading Zloty (5) This company is jointly controlled with the other shareholder in accordance with agreements regarding the company s corporate governance. 138

141 Notes Issued capital/ Consortium fund as at Company held by % interest in issued capital/ consortium fund Note 1,983, Autostrade per l Italia SpA 34.00% 60, Atlantia SpA 51.00% (5) 100,000, Autostrade per l Italia SpA 45.77% 13,000, Autostrade per l Italia SpA 32.50% 2,000, Società Italiana per Azioni per il Traforo del Monte Bianco 50.00% 24,120, Autostrade per l Italia SpA 33.33% 100,000, Atlantia SpA 50.00% 30,000, % Autostrade per l italia SpA 46.00% Spea Ingegneria Europea SpA 0.60% 51,609, Autostrade per l italia SpA 27.43% 61,000, Autostrade Concessões e Participações Brasil 50.00% 4,200, Pavimental SpA % 2,050, Stalexport Autostrady SA % 8,080, Stalexport Autostrady SA 97.96% 221,479,879,580 Autostrade per l Italia SpA % 668,355, Atlantia SpA 8.85% 11,756,695 Società Autostrada Tirrenica pa 0.43% 4,264,000.00, Atlantia S,p,A 6.02% 25,595, Atlantia SpA 5.36% 27,200, Stalexport Autostrady SA 2.40% 664, Stalexport Autostrady SA 0.56% 11,700, Stalexport Autostrady SA 0.26% 1,464, Stalexport Autostrady SA 4.24% 1,987, Stalexport Autostrada Dolnoslaska SA 5.43% 180,000, Spea Ingegneria Europea SpA 0.10% 50,000, % Autostrade per l Italia SpA 0.25% Pavimental SpA 1.00% 987, Autostrade per l italia SpA 1.62% 220,590, Stalexport Autostrady SA 0.01% 5,163, Autostrade per l Italia SpA 5.00% 18,789, Stalexport Autostrady SA 0.27% 139

142 3. Condensed interim consolidated financial statements Name Registered office Business Currency CONSORTIA Consorcio Anhanguera Norte Riberao Preto (Brazil) Construction consortium Real Consorzio Autostrade Italiane Energia Rome Electricity procurement Euro Consorzio Fastigi Civitavecchia (Rome) Studies and research into tunnel safety Euro Consorzio Galileo Scarl Todi (Perugia) Construction of airport aprons Euro Consorzio Italtecnasud (in liquidation) Rome Control of funds for earthquake in Irpinia Euro Consorzio Midra Florence Scientific research for device base technologies Euro Consorzio Miteco Peschiera Borromeo (Milan) Execution of services and works assigned by Tangenziale Esterna SpA Euro Consorzio Nuova Romea Engineering Monselice (Padua) Motorway design Euro Consorzio Pedemontana Engineering Verona Design of Pedemontana Veneta motorway Euro Consorzio Ramonti Scarl Tortona (Alessandria) Motorway construction Euro Consorzio R.F.C.C. (in liquidation) Tortona (Alessandria) Construction of road network in Morocco Euro Consorzio Tangenziale Engineering Milan Integrated technical and engineering services Milan orbital motorway Euro Consorzio Trinacria Scarl Limena (Padua) Construction of airport aprons Euro Consorzio 2050 Rome Motorway design Euro Elmas Scarl Rome Construction/maintenance airport runways and aprons Euro Idroelettrica Scrl Châtillon (Aosta) Electricity generation Euro Quadrante 300 Rome Repaving of airport aprons Euro INVESTMENTS ACCOUNTED FOR IN CURRENT ASSETS Dom Maklerski BDM SA Bielsko Biała (Poland) Holding company Zloty Centrozap SA Katowice (Poland) Steel trading Zloty Lusoponte Concesionaria Para a Travessia do Tejo SA Montijo (Portugal) Motorway operator Euro Nueva Inversiones SA Santiago (Chile) Motorway operator Peso Pedemontana Veneta SpA Verona Pedemontana Veneta motorway construction and operation Euro Strada dei Parchi SpA Rome Motorway operation and construction Euro (6) The consortia operating as at 30 June 2011 apply a charge back mechanism and are non profit. 140

143 Notes Issued capital/ Consortium fund as at Company held by % interest in issued capital/ consortium fund Note (6) Autostrade Concessões e Participações Brasil 13.13% 107, % Autostrade per l Italia SpA 29.00% Strada dei Parchi SpA 4.70% Autostrada Torino Savona SpA 2.00% Tangenziale di Napoli SpA 2.00% Società Italiana per Azioni per il Traforo del Monte Bianco 1.90% Raccordo Autostradale Valle d Aosta SpA 1.10% Autostrade Meridionali SpA 0.90% Società Autostrada Tirrenica pa 0.20% 40, Autostrade per l Italia SpA 12.50% 10, Pavimental SpA 40.00% 51, Spea Ingegneria Europea SpA 20.00% 73, Autostrade Tech SpA 33.33% 10, Pavimental SpA 1.30% 60, Spea Ingegneria Europea SpA 16.67% 20, Spea Ingegneria Europea SpA 23.30% 10, Pavimental SpA 49.00% 510, Pavimental SpA 30.00% 20, Spea Ingegneria Europea SpA 30.00% 10, Pavimental SpA 53.00% 50, Spea Ingegneria Europea SpA 0.50% 10, Pavimental SpA 60.00% 50, Raccordo Autostradale Valle d Aosta SpA 0.10% 10, Pavimental SpA 40.00% 21,896, Stalexport Autostrady SA 2.45% 341,695, % Stalexport Autostrady SA 2.65% Biuro Centrum Spzoo 0.15% 25,000, Autostrade Portugal Concessoes de Infraestructuras SA 17.21% 324,836,101,955 Inversiones Autostrade Holding do Sur Ltda 50.00% 6,000, Autostrade per l Italia SpA 28.00% 67,764, Autostrade per l Italia SpA 2.00% 141

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147 Attestation of the condensed interim financial statements Attestation of the condensed interim financial statements pursuant to article 81 ter of CONSOB Regulation of 14 May 1999 and subsequent amendments and additions We, the undersigned, Giovanni Castellucci and Giancarlo Guenzi, as Chief Executive Officer and the Manager responsible for Atlantia SpA s financial reporting, having taken account of the provisions of article 154 bis, paragraphs 3 and 4 of Legislative Decree 58 of 24 February 1998, attest to: the adequacy with regard to the nature of the Company, and the effective application of the administrative and accounting procedures adopted in preparation of the condensed interim financial statements during the first half of The administrative and accounting procedures adopted in preparation of the condensed interim financial statements as at and for the six months ended 30 June 2011 were drawn up and their adequacy assessed on the basis of the regulations and methods drawn up by Atlantia SpA in accordance with the Internal Control Integrated Framework model issued by the Committee of Sponsoring Organizations of the Treadway Commission, which has established a body of general principles providing a standard for internal control systems that is generally accepted at international level. We also attest that 3.1 the condensed interim financial statements: a) have been prepared in compliance with the international accounting standards approved for application in the European Community by EC Regulation 1606/2002, passed by the European Parliament and by the Council on 19 July 2002; b) are consistent with the underlying accounting books and records; c) present a true and fair view of the financial position and results of operations of the issuer and of the group of companies included in the basis of consolidation; 3.2 the interim report on operations contains a reliable analysis of material events during the first six months of the year and their impact on the condensed interim financial statements, together with a description of the principal risks and uncertainties for the remaining six months of the year. The interim report on operations also includes a reliable analysis of related party transactions. 2 August 2011 Giovanni Castellucci Giancarlo Guenzi Chief Executive Officer Manager responsible... for financial reporting 145

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