In order to present the results of the Group and analyze their financial structure, Enel has prepared separate reclassified schedules that differ from the schedules envisaged under the IFRS-EU adopted by the Group and presented in the consolidated financial statements. These reclassified schedules contain different performance indicators from those obtained directly from the consolidated financial statements, which management believes are useful in monitoring the performance of the Group and representative of the financial performance of our business.
With regard to those indicators, on December 3, 2015, CONSOB issued Communication no. 92543/15, which gives force to the Guidelines issued on October 5, 2015, by the European Securities and Markets Authority (ESMA) concerning the presentation of alternative performance measures in regulated information disclosed or prospectuses published as from July 3, 2016. These Guidelines, which update the previous CESR Recommendation (CESR/05-178b), are intended to promote the usefulness and transparency of alternative performance indicators included in regulated information or prospectuses within the scope of application of Directive 2003/71/EC in order to improve their comparability, reliability and comprehensibility.
Accordingly, in line with the regulations cited above, the criteria used to construct these indicators are the following.
Gross operating margin: an operating performance indicator, calculated as “Operating income” plus “Depreciation, amortization and impairment losses”.
Ordinary gross operating margin: it is calculated by adjusting the “Gross operating margin” for all items generated by non-recurring transactions, such as acquisitions or disposals of businesses (for example, capital gains and losses), with the exception of those transactions carried out in the renewable segment, related to the new “Build, Sell and Operate” business model launched in the 4th Quarter of 2016, where the income from the disposal (or repurchase) of projects represents an ordinary activity for the Group.
Ordinary operating income: it is calculated by adjusting the “Operating income” for the effects of the non-recurring transactions referred to with regard to the gross operating margin, as well as significant impairment losses on assets following impairment testing or classification under “Assets held for sale”.
Group ordinary net income: it is defined as “Group net income” generated by Enel’s core business and is equal to “Group net income” excluding the impact on it (and therefore net of any tax effects and non-controlling interests) of the items discussed under “Ordinary operating income”.
Low carbon ordinary EBITDA: it is the ordinary gross operating margin of the set of products, services and technologies included in the following Business Lines: Enel Green Power, Infrastructure and Networks, Enel X and End-user Markets (excluding gas).
Gross global value added from continuing operations: this is defined as value created for stakeholders and is equal to “Revenue”, including “Net income/(expense) from commodity management” net of external costs defined as the algebraic sum of “cost of fuels”, “cost of electricity purchases”, “costs of materials”, “capitalized costs of internal projects”, “other costs” and “costs for services, rentals and leases”, with the latter net of “costs for fixed water diversion fees” and “costs for public land usage fees”.
Net non-current assets: calculated as the difference between “Non-current assets” and “Non-current liabilities” with the exception of:
- “Deferred tax assets”;
- “Securities” and “Other financial receivables” included in “Other non-current financial assets”;
- “Long-term borrowings”;
- “Employee benefits”;
- “Provisions for risks and charges (non-current portion)”;
- “Deferred tax liabilities”.
Net current assets: calculated as the difference between “Current assets” and “Current liabilities” with the exception of:
- “Current portion of long-term financial receivables”, “Factoring receivables”, “Securities”, “Cash collateral” and “Other financial receivables” included in “Other current financial assets”;
- “Cash and cash equivalents”;
- “Short-term borrowings” and the “Current portion of longterm borrowings”;
- “Provisions for risks and charges (current portion)”;
- “Other financial payables” included in “Other current liabilities”.
Net assets held for sale: calculated as the algebraic sum of “Assets held for sale” and “Liabilities held for sale”.
Net capital employed: calculated as the sum of “Net non-current assets” and “Net current assets”, “Provisions for risks and charges”, “Deferred tax liabilities” and “Deferred tax assets”, as well as “Net assets held for sale”.
Net financial debt: a financial structure indicator, determined by:
- “Long-term borrowings” and “Short-term borrowings and the current portion of long-term borrowings”, taking account of “Short-term financial payables” included in “Other current liabilities”;
- net of “Cash and cash equivalents”;
- net of the “Current portion of long-term financial receivables”, “Factoring receivables”, “Cash collateral” and “Other financial receivables” included in “Other current financial assets”;
- net of “Securities” and “Other financial receivables” included in “Other non-current financial assets”.
More generally, the net financial debt of the Enel Group is calculated in accordance with paragraph 127 of Recommendation CESR/05-054b implementing Regulation (EC) no. 809/2004 and in line with the CONSOB instructions of July 28, 2006, net of financial receivables and long-term securities.
Main changes in the scope of consolidation
In the two periods under review, the scope of consolidation changed as a result of a number of transactions. For more information, please see note 6 on the consolidated financial statements.