SNAM 2014 Annual Report - Net financial expense

Net financial expense

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NET FINANCIAL EXPENSE

(€ million)

2012

2013

2014

Change

% Change

(*)

In order to present as accurate a representation of “Financial (income) expense” as possible, the economic effects attributable to the effective portion of hedging derivatives are recorded under the same item as those of the hedged elements. Any economic effects attributable to the ineffective portion of hedging derivatives are recorded under “Expense (income) on derivatives”. The values for the comparison years were reclassified accordingly.

(**)

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

Expense on financial debt

470

490

435

(55)

(11.2)

- Expense on short- and long-term financial debt (*)

470

490

435

(55)

(11.2)

Expense (income) on derivatives – ineffective portion

335

- Interest rate swaps (IRS) (**)

335

Other net financial expense

(1)

(17)

- Accretion discount

30.8

- Other net financial expense (income) (*)

(18)

(21)

Financial expense capitalised

(38)

(34)

(37)

(3)

8.8

794

472

397

(75)

(15.9)

Net financial expense (€397 million) decreased by €75 million compared with 2013, due mainly to a lower average cost of borrowing, thanks in part to the initiatives to optimise the group’s financial structure implemented by Snam, partly offset by an increase in average debt in the period.

Financial expense of €37 million was capitalised in 2014 (€34 million in 2013).

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