34. Shareholders’ equity - €46,938 million

 

34.1 Equity attributable to the shareholders of the Parent Company - €30,377 million

Share capital - €10,167 million

At December 31, 2019, the fully subscribed and paid-up share capital of Enel SpA totaled €10,166,679,946, represented by the same number of ordinary shares with a par value of €1.00 each. Share capital is unchanged compared with that registered at December 31, 2018.
At December 31, 2019, based on the shareholders register and the notices submitted to CONSOB and received by the Company pursuant to Article 120 of Legislative Decree 58 of February 24, 1998, as well as other available information, shareholders with an interest of greater than 3% in the Company’s share capital included the Ministry for the Economy and Finance (with a 23.585% stake) and Capital Research and Management Company (which held a direct interest of 5.029% at October 11, 2019 for asset management purposes).

Treasury share reserve - €(1) million

As at December 31, 2019, treasury shares are represented by 1,549,152 ordinary shares of Enel SpA with a par value of €1.00 each, purchased through a qualified intermediary for a total value of €10 million.
On May 16, 2019, the Shareholders’ Meeting approved the long-term incentive plan for 2019 (“2019 LTI Plan” or “Plan”) intended for the management of Enel SpA and/or its subsidiaries pursuant to Article 2359 of the Civil Code, granting the Board of Directors all the powers necessary to implement the Plan.
On the same date, the Shareholders’ Meeting also authorized the Board of Directors to purchase treasury shares, in compliance with the time limits established by the resolution, to pur sue, among other things, the purposes of the 2019 LTI Plan.
On 19 September the Company’s Board of Directors, in implementation of the authorization granted and in compliance with the related terms already announced to the market, approved the start of a treasury share purchase program, for a maximum amount of €10.5 million and for a number of shares not exceeding 2.5 million (the “Program”), equal to about 0.02% of Enel’s share capital.
Over the duration of the Program (September 23, 2019 - December 2, 2019) the Company purchased 1,549,152 Enel shares at the weighted average price of €6.7779 per share.

Other reserves - €1,139 million

Share premium reserve - €7,487 million

Pursuant to Article 2431 of the Italian Civil Code, the share premium reserve contains, in the case of the issue of shares at a price above par, the difference between the issue price of the shares and their par value, including those resulting from conversion from bonds. The reserve, which is a capital reserve, may not be distributed until the legal reserve has reached the threshold established under Article 2430 of the Italian Civil Code.

Legal reserve - €2,034 million

The legal reserve is formed of the part of net income that, pursuant to Article 2430 of the Italian Civil Code, cannot be distributed as dividends.

Other reserves - €2,262 million

These include €2,215 million related to the remaining portion of the value adjustments carried out when Enel was transformed from a public entity to a joint-stock company.
Pursuant to Article 47 of the Uniform Income Tax Code (Testo Unico Imposte sul Reddito, or “TUIR”), this amount does not constitute taxable income when distributed.

Reserve from translation of financial statements in currencies other than euro - €(3,802) million

The decrease for the year, of €485 million, was mainly due to the net strengthening of the functional currency against the foreign currencies used by subsidiaries and the change in the scope of consolidation connected with the purchase of 5.74% of Enel Américas.

Reserve from measurement of cash flow hedge financial instruments - €(1,610) million

This includes the net charges recognized in equity from the measurement of cash flow hedge derivatives. The cumulative tax effect is equal to €431 million.

Reserve from measurement of costs of hedging financial instruments - €(147) million

As of January 1, 2018, in application of IFRS 9, these reserves include the change in fair value of currency basis points and forward points. The cumulative tax effect is equal to €6 million.

Reserve from measurement of financial instruments at FVOCI - €21 million

This includes net unrealized income from the measurement at fair value of financial assets.
The cumulative tax effect is equal to a negative €3 million

Reserve from equity investments accounted for using the equity method - €(119) million 

The reserve reports the share of comprehensive income to be recognized directly in equity of companies accounted for using the equity method. The cumulative tax effect is equal to €25 million.

Reserve from remeasurement of net liabilities/(assets) of defined benefit plans - €(1,043) million

This reserve includes all actuarial gains and losses, net of tax effects. The change is mainly attributable to the decrease in net actuarial losses recognized during the period, mainly reflecting changes in the discount rate. The cumulative tax effect is equal to €244 million.

Reserve from disposal of equity interests without loss of control - €(2,381) million

This item mainly reports:

  • the gain posted on the public offering of Enel Green Power shares, net of expenses associated with the disposal and the related taxation;
  • the sale of minority interests recognized as a result of the Enersis (now Enel Américas and Enel Chile) capital increase; 
  • the capital loss, net of expenses associated with the disposal and the related taxation, from the public offering of 21.92% of Endesa; 
  • the income from the disposal of the minority interest in Enel Green Power North America Renewable Energy Partners; 
  • the effects of the merger into Enel Américas of Endesa Américas and Chilectra Américas; > the disposal to third parties of a minority interest without loss of control in Enel Green Power North America Renewable Energy Partners and a number of companies in South Africa. 

The reserve did not change in 2019.

Reserve from acquisitions of non-controlling interests - €(1,572) million

This reserve mainly includes the surplus of acquisition prices with respect to the carrying value of the equity acquired following the acquisition from third parties of further interests in companies already controlled in Latin America and in Italy (Enel Green Power SpA).
The change for the period mainly reflects the effects of:

  • the increase of 5.74% in the interest held in Enel Américas under the provisions of the share swap contracts entered into with a financial institution, raising that stake to 59.97%;
  • the increase of 4.1% in the interest held in Eletropaulo Metropolitana Eletricidade de São Paulo SA; 
  • the increase of 0.11% in the interest held in Enel Chile under the provisions of the share swap contracts entered into with a financial institution; 
  • the increase of 23.44% in the interest held in Enel Green Power India, raising that stake to 100%.

Retained earnings and loss carried forward - €19,081 million

This reserve reports earnings from previous years that have not been distributed or allocated to other reserves.

The table below shows the changes in gains and losses recognized directly in other comprehensive income, including non-controlling interests, with specific reporting of the related tax effects.

Millions of euro

           
 

at Dec. 31, 2018

Change

at Dec. 31, 2019

 

Total

Of which shareholders of the Parent Company

Of which non-controlling interests

Gains/(Losses) recognized in equity for the year

Released to income statement

Taxes

Total

Of which shareholders of the Parent Company

Of which non-controlling interests

Total

Of which shareholders of the Parent Company

Of which non-controlling interests

Reserve from translation of financial statements in currencies other than euro

(6,709)

(3,206)

(3,503)

(481)

-

-

(481)

(265)

(216)

(7,190)

(3.471)

(3.719)

Reserve from measurement of cash flow hedge financial instruments

(2,007)

(1,721)

(286)

(2,036)

2,141

(66)

39

94

(55)

(1,968)

(1,627)

(341)

Reserves from measurement of costs of hedging financial instruments

(265)

(258)

(7)

150

(36)

6

120

111

9

(145)

(147)

2

Reserve from measurement of financial assets at FVOCI

(4)

(3)

(1)

7

-

(2)

5

5

-

1

2

(1)

Share of OCI of associates accounted for using the equity method

(109)

(112)

3

(60)

-

3

(57)

(56)

(1)

(166)

(168)

2

Reserves from measurement of equity investments in other companies

(11)

(11)

-

-

-

-

-

-

-

(11)

(11)

-

Remeasurements of net liabilities/(assets) of defined benfit plans

(973)

(727)

(246)

(702)

-

200

(502)

(318)

(184)

(1,475)

(1,045)

(430)

Total gains/(losses) recognized in equity

(10,078)

(6,038)

(4,040)

(3,122)

2,105

141

(876)

(429)

(447)

(10,954)

(6.467)

(4.487)

             

34.2 Dividends

   
 

Amount distributed (millions of euro)

Dividend per share (euro)

Dividends paid in 2018

  

Dividends for 2017

2,410

0.24

Interim dividends for 2018(1)

-

-

Special dividends

-

-

Total dividend paid in 2018

2,410

0.24

Dividends paid in 2019

  

Dividends for 2018

2,847

0.28

Interim dividends for 2019(2)

-

-

Special dividends

-

-

Total dividend paid in 2019

2,847

0.28

(1) Approved by the Board of Directors on November 6, 2018, and paid as from January 23, 2019 (interim dividend of €0.14 per share for a total of €1,423 million).
(2) Approved by the Board of Directors on November 12, 2019, and paid as from January 22, 2020 (interim dividend of €0.16 per share for a total of €1,627 million).

The dividend for 2019, equal to €0.328 per share, for a total amount of €3,334 million (of which €0.16 per share, for a total of €1,626 million, already paid as an interim dividend), has been proposed to and resolved by the Shareholders’ Meeting of May 14, 2020 at single call. These financial statements do not take account of the effects of the distribution to shareholders of the dividend for 2019, except for the liability in respect of shareholders for the interim dividend for 2019 dividend, which was approved by the Board of Directors on November 12, 2019 for a potential maximum of €1,627 million, and paid as from January 22, 2020 net of the portion pertaining to the 1,549,152 million treasury shares held as at the record date of January 21, 2020.

Capital management 

The Group’s objectives for managing capital comprise safeguarding the business as a going concern, creating value for stakeholders and supporting the development of the Group. In particular, the Group seeks to maintain an adequate capitalization that enables it to achieve a satisfactory return for shareholders and ensure access to external sources of financing, in part by maintaining an adequate rating.
In this context, the Group manages its capital structure and adjusts that structure when changes in economic conditions so require. There were no substantive changes in objectives, policies or processes in 2019.

To this end, the Group constantly monitors developments in the level of its debt in relation to equity. The situation at December 31, 2019 and 2018, is summarized in the following table.

Millions of euro

  
 

at Dec. 31, 2019

at Dec. 31, 2018

Change

Non-current financial position

54,174

48,983

5,191

Net current financial position

(5,815)

(4,622)

(1,193)

Non-current financial receivables and long-term securities

(3,184)

(3,272)

88

Net financial debt

45,175

41,089

4,086

Equity attributable to the shareholders of the Parent Company

30,377

31,720

(1,343)

Non-controlling interests

16,561

16,132

429

Shareholders equity

46,938

47,852

(914)

Debt/equity ratio

0.96

0.86

-

The percentage increase in the use of debt is attributable to the increase in net financial debt, mainly reflecting the funding requirements of investment in the period, the recognition of a liability following the first-time application of IFRS 16 and the acquisition of control of a number of companies from the EGPNA REP joint venture.

See note 41 for a breakdown of the individual items in the table.

34.3 Non-controlling interests - €16,561 million

The following table reports the composition of non-controlling interests by geographic area.

Millions of euro

Non-controlling interests

Net income attributable to non-controlling interests

 

at Dec. 31, 2019

at Dec. 31, 2018

at Dec. 31, 2019

at Dec. 31, 2018

Italy

1

7

(2)

-

Iberia

5,961

6,405

36

386

Latin America

9,277

8,406

1,256

1,095

Europe and Euro-Mediterranean Affairs

903

908

6

68

Nord America

222

181

(1)

4

Africa, Asia and Oceania

197

225

7

8

Total

16,561

16,132

1,302

1,561

Finally, note that with effect from September 2019, Latin America also includes the countries Panama, Costa Rica, Guatemala, El Salvador and Nicaragua, which were previously reported under the geographic area North and Central America (now renamed North America).
In order to ensure full comparability of the figures in the light of the new organization, the comparative figures for 2018 have been restated appropriately.