to download Telecom Italia Annual Report 2011 - Company Reporting

• the reduction of share capital as a result of losses does not entail a reduction of the par value of
savings shares except for the amount of the loss which exceeds the overall par value of the other
shares;
• upon the wind-up of Telecom Italia S.p.A., the savings shares have a pre-emptive right in the
reimbursement of capital for the entire par value;
• in the event of the cessation of trading in the Company’s ordinary or savings shares, the holder of
savings shares may ask Telecom Italia S.p.A. to convert its shares into ordinary shares, according to
the manner resolved by the special session of the shareholders’ meeting called for that purpose
within two months of being excluded from trading.
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Paid-in capital totals 1,704 million euros, increasing 7 million euros compared to December 31, 2010,
following the capital increase to service the “Broad-based Employee Share Ownership Plan 2010-2014”,
approved by the Telecom Italia S.p.A. shareholders’ meeting held on April 29, 2010.
Other reserves and retained earnings (accumulated losses), including profit (loss) for the year comprise:
• The Reserve for available-for-sale financial assets shows a negative balance of 4 million euros at
December 31, 2011, increasing 3 million euros compared to December 31, 2010. It includes
unrealized losses relating to the investment in Assicurazioni Generali (-2 million euros) and the
investment in Fin.Priv. (-6 million euros) by the Parent, Telecom Italia, as well as the unrealized
losses on the securities portfolio of Telecom Italia Finance (-15 million euros) and the positive fair
value adjustment of other available-for-sale financial assets held by the Parent, Telecom Italia
(19 million euros). This reserve is expressed net of deferred tax liabilities of 7 million euros (at
December 31, 2010, it was expressed net of deferred tax liabilities of 3 million euros).
• The Reserve for cash flow hedges shows a negative balance of 74 million euros at
December 31, 2011, increasing 210 million euros compared to December 31, 2010. This reserve
is expressed net of deferred tax assets of 22 million euros (at December 31, 2010, it was
expressed net of deferred tax assets of 106 million euros). In particular, this reserve includes the
effective portion of gains or losses on the fair value adjustments of derivatives designated as cash
flow hedges of the exposure to volatility in the cash flows of assets or liabilities recognized in the
financial statements.
• The Reserve for exchange differences on translating foreign operations shows a positive balance of
1,089 million euros at December 31, 2011, decreasing 312 million euros compared to
December 31, 2010. This mainly refers to exchange differences in euros on the translation of the
financial statements of the companies in the Brazil Business Unit and in the Argentina Business
Unit.
• Other gains (losses) of associates and joint ventures accounted for using the equity method show a
negative balance of 1 million euros at December 31, 2011, unchanged compared to
December 31, 2010.
• Other reserves and retained earnings (accumulated losses), including profit (loss) for the year
amount to 9,473 million euros, decreasing 5,940 million euros compared to December 31, 2010.
The change is mainly due to the sum of the following:
– dividends of 1,184 million euros (1,029 million euros in 2010);
– loss for the year attributable to owners of the Parent of 4,726 million euros (profit for the
year of 3,121 million euros in 2010);
– negative effect arising from the increase in the economic interest in the companies of the
Argentina Business Unit for -57 million euros.
Equity attributable to Non-controlling interests amounts to 3,904 million euros, increasing
168 million euros compared to December 31, 2010 and is principally represented by the sum of:
• dividends of 118 million euros;
• profit for the year attributable to Non-controlling interests of 446 million euros (454 million euros in
2010);
• negative change in the “Reserve for exchange differences on translating foreign operations” of 226
million euros;
Telecom Italia Group
Consolidated Financial Statements Note 14 – Equity 207