Reclassified statement of financial position ⁴²

The fixed capital (€13,125 million) decreased by €173 million in respect to 31 December 2016 principally as a result of lower financial credits in operating activities (-€410 million).These effects were partly offset by the increase in equity investments (+€234 million), mainly due to increases in the share capital of Asset Company 2 S.r.l.(+€172 million) and Trans Adriatic Pipeline AG – TAP (+€66 million).

Equity investments

Equity investments of €6,327 million break down as follows:

Acquisitions and subscriptions (€283 million) relate to:(i) the capital increase of Asset Company 2 S.r.l.(€172 million) for the acquisition transaction ofInfrastrutture Trasporto Gas S.p.A. (ITG); (ii) the capital increase of TAP paid in 2017 (€66 million); (iii) the acquisition of an amount equal to 7.3% of the capital of Terminale GNL Adriatico S.r.l. from Edison(€45 million).

The disposals and redemptions (€36 million) mainly refer to the reduction in the cost of registration of the investments in the companies GasBridge 1 BV, GasBridge 2 BV(€18 million) and AS Gasinfrastruktur Beteiligung GmbH (€ 17 million), against the distribution of part of the share premium reserve generated at the time the companies were established.

Value adjustments refer to the effects of the impairment loss (€13 million) on the equity investments in GasBridge 1 B.V. and GasBridge 2 B.V.

Financial receivables held for operations

Financial receivables held for operating activities, including the relative short-term portions, amount to €6,780 million and refer to receivables for loans disbursed to the subsidiaries Snam Rete Gas (€4,983 million) and Stogit (€1,424million), and the associate TAP (€373 million).The reduction of 411 million euros compared to 31 December 2016 is mainly due to the closure and simultaneous repayment of loans in place with Snam Rete Gas S.p.A. and Stogit S.p.A.(-€889 million of total nominal value, of which -€424 million as part of the Liability Management operation).This change was partially offset by the loan to Snam Rete Gas S.p.A.(+€310 million) on funding from the European Investment Bank – EIB and higher receivables in favour of TAP (+€154 million) against cash calls received during the year.

Net working capital (-€271 million) decreased by €344 million compared with 31 December 2016 due primarily to: (i) the increase in other liabilities (-€284 million) mainly due to the distribution of the interim dividend (-€294 million); (ii) the reduction in the market value of derivative financial instruments (-€36 million); (iii) the reduction in tax receivables (-€23 million) mainly due to lower Group VAT credits.

Fixed-rate financial liabilities (€9,834 million) increased by €2,742 million mainly as a result of:(i) the issue of a bond issue on 25 January 2017, for a nominal value of €500 million; (ii) the classification of a bond with a nominal value of €338 million at a fixed rate following the aforementioned early repayment of the Interest Rate Swap (IRS) derivative hedging contract; (iii) the issue of a variable rate bond loan⁴³ on 21 February 2017 for a nominal amount of €300 million; (iv) the issue of a convertible bond loan⁴⁴ without interest accrued on 20 March 2017, for a nominal value of €400 million; (v) the issue of a variable rate bond⁴⁵ on 2 August 2017, for a nominal value of €350 million; (vi) the subscription of an EIB bank loan issued on 24 August 2017 for a nominal amount of €310 million; (vii) the issue of a bond issue on 25 October 2017, for a nominal value of €650 million; (viii) the subscription of a Term Loan bank loan for a nominal value of €500 million. These effects were partially offset by the repayment of a bond maturing on 30 June 2017, for a nominal amount of €506 million and by the repurchase on the market of fixed-rate bonds for a total nominal value of €607 million with average coupon of 2.5% and a residual term of around 4.4 years, for a total outlay of approximately €656 million⁴⁶, carried out as part of the Liability Management operation completed in October 2017.

Variable-rate financial liabilities (€2,800 million) show a reduction of €1,194 million compared to 31 December 2016 attributable essentially to:(i) the classification of a bond with a nominal value of €500 million at a fixed rate, following the early termination, on 27 January 2017, of the Interest Rate Swap (IRS) derivative hedging contract used up to that date to convert the fixed rate debt into an equivalent variable rate liability (-€518 million); (ii) lower net utilisation of uncommitted lines of credit (-€108 million); (iii) repayment of a Term Loan bank loan with a nominal value of €200 million.

At 31 December 2017, Snam had unused committed long-term credit lines worth €3.2 billion.

Non-operating financial receivables (€3,962 million) show an increase of €853 million compared to 31 December 2016.The increase is mainly attributable to a short-term liquidity-use transaction, with a maturity of less than six months, with a bank with a high credit standing (€350 million) as counterparty, and greater net use of account balances current of the subsidiaries Snam Rete Gas and Stogit (€502 million overall).

Cash and cash equivalents (€695 million) essentially refer to a short-term liquidity facility, with a maturity of less than three months, with a bank with a high credit standing (€300 million) as counterparty, and to a bank deposit (€395 million).