Revenue

TOTAL REVENUE

Core business revenue generated in 2011 (€3,539 million) rose by €64 million, 1.8% above the 2010 figure and by €53 million, or 1.7%, net of the effects of applying IFRIC 12 (€360 and €349 million, in 2011 and 2010 respectively). The increase is due to the greater revenue recorded in all of the primary segments of operation.

Revenue from transportation¹² (€1,945 million) mainly includes payments for the natural gas transportation service (€1,867 million) and chargebacks to subsidiaries of the costs incurred for providing services carried out centrally by Snam Rete Gas S.p.A. (€62 million).

The increase by €16 million is due primarily to the greater chargebacks to subsidiaries of costs for services provided (+€23 million), deriving from the situation where, following the corporate restructuring of the previous period effective from 1 April 2010, the chargeback of costs for services conducted in 2010 refer to the period from 1 April to 31 December. This increase was partly offset by the reduction in revenue from transportation (-€6 million) due to the additional revenue (€55 million) recorded in the previous year, deriving from the recognition by the Electricity and Gas Authority of the additional expenses incurred for the acquisition of fuel gas in the period from 1 October 2008 to 31 December 2009 . Net of this effect, transportation revenue recorded an increase of €49 million, equal to 2.7%, essentially attributable to the contribution of investments made in 2009 (+€100 million), whose effects were partly absorbed by the tariff updating (-€52 million) and by lower volumes of gas transported (-€15 million) following a reduced demand for natural gas in Italy. Higher revenue from tariff components offset in costs (+€13 million) also contributed to the increase in transportation revenue.

Revenue from transportation (€1,867 million) is analysed below by user with indication of the primary users.

Revenue from the regasification segment (€34 million) refers to LNG regasification service (€23 million; €24 million in 2010) done at the Panigaglia (SP) LNG terminal and to the chargebacks of expenses relating to the natural gas transportation service provided by Snam Rete Gas S.p.A. (€11 million; same amount in 2010).

Revenue from natural gas storage segment refers to storage services, (€372 million¹³, of which €303 million and €66 million relate to modulation storage and strategic storage respectively). The increase of €17 million for the 2010 period is essentially due to greater storage revenues (+€23 million) following the contribution of investments made in 2009 (+€29 million) and the volumes of gas transported (+€6 million), whose effects were partly absorbed by the tariff updating (-€15 million).

Revenue from the natural gas distribution segment of €1,297 million mainly relates to fees for the natural gas distribution service (€1,263 million) and revenue pursuant to IFRIC 12 generated by the construction and upgrading of distribution infrastructure associated with the concession agreements (€360 million). The increase by €53 million, net of the impact of IFRIC 12, is due primarily to the acknowledgement, by the Electricity and Gas Authority, of the greater natural gas distribution revenue for the thermal years 2005-2006 to 2007-2008¹⁴ (€32 million) and the impact (20 million) of applying the ‘gradual’ mechanism introduced by the Electricity and Gas Authority through Resolution 79/09 of 1 June 2009¹⁵.

REVENUE - REGULATED AND NON-REGULATED ACTIVITIES

Regulated business revenue (€3,522 million, net of consolidation adjustments) relates to transportation (€1,870 million), distribution (€1,291 million; €931 million net of the effects of IFRIC 12), storage (€338 million) and regasification (€23 million).

Revenue from non-regulated activities (€83 million, net of consolidation adjustments) mainly comprises: (i) technical services (€26 million) relating essentially to the natural gas distribution business segment; (ii) capital gains on transfers of assets (€17 million); (iii) income from the leasing and maintenance of fibre-optic telecommunications cables (€10 million); and (iv) income from resolving contractual disputes (€10 million)¹⁶ ; and (vi) income from property investments (€5 million).