25 Revenue

The breakdown of revenue for the period, which totalled €3,882 million (€3,848 million in 2013), is shown in the following table:

The reasons for the most significant changes are described in the “Financial review” section of the Directors’ Report.

The group generates all of its revenue in Italy. An analysis of revenue by business segment can be found in Note 32 – “Information by business segment”.

Core business revenue

Core business revenue, which totalled €3,784 million (€3,735 million in 2013), is analysed in the following table:

Natural gas transportation

Core business revenue (€2,016 million) consisted mainly of fees for the transportation service (€2,013 million), pertaining primarily to eni S.p.A. (€1,094 million) and Enel Trade S.p.A. (€266 million). Transportation revenue includes the chargeback to users of the costs of connecting the Company’s network to that of other operators (€57 million)⁵⁹. During the course of 2014, Snam provided transportation services to 131 companies (121 companies in 2013).

Liquefied Natural Gas (LNG) regasification

Core business revenue (€19 million) relates to fees for LNG regasification carried out at the Panigaglia (SP) LNG terminal, and mainly concerns Enel Trade S.p.A. (€12 million) and eni S.p.A. (€2 million). During the course of 2014, Snam provided regasification services to 4 companies (3 companies in 2013).

Natural gas storage

Core business revenue (€415 million) relates mainly to fees for modulation (€346 million) and strategic (€56 million) storage, and mainly concerns eni S.p.A. (€102 million) and Enel Trade S.p.A. (€18 million).

During the course of 2014, Snam provided natural gas storage services to 117 companies (118 companies in 2013).

Natural gas distribution

Core business revenue (€1,323 million) relates essentially to: (i) fees for natural gas transmission services (€973 million); (ii) ancillary and optional services (mostly “Activation”, “Deactivation”, “Suspension and reactivation of the gas supply” and “Moving and removal of meters”) and revenue for Authority incentives connected with the achievement of quality standards (€35 million in total). Core business revenue relates mainly to eni S.p.A. (€591 million) and Enel Energia S.p.A. (€59 million).

During the course of 2014, Snam used its networks to distribute the gas of 249 commercial companies (218 companies in 2013).

Core business revenue from the construction and upgrading of natural gas distribution infrastructure linked to concession agreements under IFRIC 12 amounted to €316 million (€319 million in 2013).

Core business revenue is reported net of the following items involving tariff components, in addition to the tariff, applied to cover gas system expenses of a general nature. Amounts received from Snam are paid in full to the Electricity Equalisation Fund.

Additional fees for the transportation service (€466 million) consist primarily of the following fees: (i) CV^OS, as provided for by the Authority with Resolution ARG/gas 29/11 to cover expenses pursuant to Article 9 of Legislative Decree 130/10 incurred by the Energy Services Operator for the payment to the storage company of sums owed in relation to the SG income guarantee (€177 million); (ii) GS^T and RE^T, respectively, to cover expenses for compensation for subsidised tariffs to disadvantaged customers in the gas sector and expenses for calculating and implementing energy savings and development of renewable energy sources in the gas sector (€166 million in total); (iii) CV^BL, to cover expenses connected with gas system balancing (€61 million); (iv) CV^I, to cover expenses incurred to reduce gas consumption (€47 million); and (v) UG3^T, introduced by Resolution 134/14/R/GAS to cover expenses related to the default service performed for customers directly connected to the regional transportation network (€11 million).

Additional fees for the distribution service (€230 million) consist primarily of the following fees: (i) RE, to cover expenses for calculating and implementing energy savings and development of renewable energy sources in the gas sector; (ii) RS, to cover gas services quality; (iii) UG1, to cover any imbalances in the equalisation system and any adjustments; (iv) UG2, to offset retail sales marketing costs; (v) UG3int, to cover expenses related to interruptions to the service; (vi) UG3ui, to cover expenses related to any imbalances in specific equalisation mechanism balances for the Default Distribution Service Provider, as well as any arrears expenses incurred by Suppliers of Last Instance, exclusively for end customers whose supplies cannot be suspended; (vii) UG3ft, to cover expenses relating to the service for temporary providers on the transportation network; and (viii) GS, to cover the tariff compensation system for economically disadvantaged customers.

Other revenue and income

Other revenue and income, which amounted to €98 million (€113 million in 2013), can be broken down as follows:

Other income (€34 million) relates mainly to reimbursements recognised by the Authority, linked to the achievement of quality and technical standards and various operating reimbursements relating to the natural gas distribution service.