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Net financial expense

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(€ million)

2011

2012

2013

Change

% Change

(*)

The figure for 2012 includes financial expense arising from the early extinguishment of 12 IRS contracts (€335 million).

(**)

The figure for 2013 refers to a CCS contract put in place by Snam in October 2013 to hedge exchange rate risk in relation to a bond issue in Japanese yen for a value of €75 million. Further information is provided in Note 23 “Other current liabilities” of the notes to the consolidated financial statements.

Expense on financial debt

262

401

489

88

21.9

- Expense on short- and long-term financial debt

262

401

489

88

21.9

Losses (Gains) on hedging derivatives

69

404

6

(398)

(98.5)

- Interest rate swaps (IRS) (*)

69

404

 

(404)

(100.0)

- Cross currency swaps (CCS) (**)

 

 

6

6

 

Other net financial expense

19

27

11

(16)

(59.3)

- Accretion discount

12

11

13

2

18.2

- Other net financial expense (income)

7

16

(2)

(18)

 

Financial expense capitalised

(37)

(38)

(34)

4

(10.5)

 

313

794

472

(322)

(40.6)

Net financial expense (€472 million) decreased by €322 million compared with 2012, mainly reflecting the recognition, in the third quarter of 2012, of charges relating to the early extinguishment of 12 IRS contracts between Snam and its subsidiaries and Eni (€335 million), giving rise to contractual provisions in the event of Eni losing control of Snam. Excluding this effect, net financial expense increased by €13 million, due mainly to higher average debt. The average cost of debt, partly due to the rationalisation of the Group’s financial structure that took place in 2013, was mainly in line with 2012.

Financial expense of €34 million was capitalised in 2013 (€38 million in 2012).

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