11. Other current and non-current assets

Other current assets, which amount to €98 million (€108 million at 31 December 2014) and other non-current assets of €137 million (€167 million at 31 December 2014) break down as follows:

Other regulated assets (€150 million; €144 million at 31 December 2014) relate to the natural gas transportation service and refer mainly to the shortfall in amounts invoiced compared with the restriction imposed by the regulator (€146 million)¹⁶, of which the current portion accounts for €76 million (€46 million at 31 December 2014) and the non-current portion accounts for €70 million (€96 million at 31 December 2014).

The market value of derivatives outstanding at 31 December 2015 is as follows:

The assets arising from the market-value measurement of fair value hedging derivatives (€8 million) refer to an interest rate swap (IRS) entered into in 2014. The IRS is used to hedge against fluctuations in the fair value of a fixed-rate liability arising from a €500 million long-term bond issue. The eight-year bond has a maturity of 21 April 2023 and a fixed annual coupon of 1.5%. The IRS has converted the fixed-rate liability into an equivalent floating-rate liability benchmarked to the 12-month Euribor + 0.5645%.

The main characteristics of the derivative in question are summarised in the table below:

The liabilities arising from the market-value measurement of cash flow hedging derivatives (€1 million) refer to a cross-currency swap (CCS) entered into in 2013. The CCS is used to hedge against fluctuations in the exchange rate of a ¥10 billion long-term bond issue. The six-year bond has a maturity of 25 October 2019 and a half-yearly coupon with an annual fixed rate of 1.115%. The CCS has converted the fixed-rate, foreign-currency liability into an equivalent liability in Euro with a fixed annual rate of 2.717%.

The main characteristics of the derivative in question are summarised in the table below:

In relation to this contract, Snam agrees with its counterparties on the exchange of two capital flows (at the time of entering into the contract and upon the maturity of the underlying financial instrument) and periodic interest flows (on the same dates stipulated for the hedged item) denominated in different currencies at a predetermined exchange rate.

The fair value of hedging derivatives and their classification as a current or non-current asset/liability have been determined using generally accepted financial measurement models and market parameters at the end of the year.

Information on the risks being hedged by the derivatives and on policies adopted by the Company to hedge against these risks is provided in Note 24 – “Guarantees, commitments and risks – Management of financial risks”.

The item “Other assets” (€77 million; €125 million at 31 December 2014) essentially comprises:

• prepayments (€32 million), relating mainly to upfront fees and the substitute tax on revolving credit lines¹⁷ (€30 million) and to insurance premiums (€2 million). The current and non-current portions amount to €11 million and €21 million respectively (€13 million and €25 million at 31 December 2014);
• security deposits (€14 million), relating mainly to the natural gas transportation segment;
• assets in the transportation segment (€23 million), mainly recognised for lower quantities of fuel gas allocated by users in previous years pursuant to Resolution ARG/gas 184/09 compared with the quantities actually used in those years, adjusted in future years by increasing the quantity to be allocated by the users. The current and non-current portions amount to €2 million and €21 million respectively.