to download Telecom Italia Annual Report 2011 - Company Reporting

Share capital carries a restriction on tax suspension for an amount of 1,191,379 thousand euros.
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Paid-in capital is 1,703,974 thousand euros at December 31, 2011, increasing 6,682 thousand euros
compared to December 31, 2010. The change is due to the increase in share capital to service the
“Broad-based Employee Share Ownership Plan 2010-2014” approved by the shareholders’ meeting held
on April 29, 2010.
The Legal reserve totals 2,137,749 thousand euros at December 31, 2011, increasing 2,976 thousand
euros compared to December 31, 2010, following the resolution passed by the shareholders’ meeting
held on April 12, 2011 approving the annual 2010 separate financial statements. The legal reserve
carries a restriction on tax suspension, as do some reserves of merged companies, up to the amount of
1,834,667 thousand euros.
Other reserves amount in total to 3,094,717 thousand euros at December 31, 2011, decreasing
266,014 thousand euros compared to December 31, 2010. The various reserves are analyzed as
follows:
Reserve ex art. 13, L.D. 124/1993 (391 thousand euros): unchanged from December 31, 2010;
• Reserve ex art. 74, D.P.R. 917/1986 (5,750 thousand euros): unchanged from December 31, 2010;
• Reserve for capital grants (602,259 thousand euros): unchanged from December 31, 2010;
• Revaluation reserve ex Law 413 dated December 30, 1991 (1,129 thousand euros): unchanged
from December 31, 2010;
• Reserve, ex article 1, paragraph 469, Law 266/2005 and ex article 14, Law 342/2000
(315,842 thousand euros): unchanged from December 31, 2010 and deriving from the
reclassification of the merger surplus reserve, originating from the merger of Tim Italia, in order to
set up the same tax-suspended reserve already recorded in the separate financial statements at
December 31, 2005 of the merged company;
• Reserve for Plans ex art. 2349 of the Italian Civil Code (5,000 thousand euros at December 31,
2011): the reserve was set up following the resolution passed by the shareholders’ meeting of the
Company on April 12, 2011, by appropriating a part of 2010 profit, for 4,960 thousand euros, to
service the bonus capital increase established within the context of the Broad-based Employees
Share Ownership Plan 2010-2014 and, for 5,000 thousand euros, to service the bonus capital
increase established within the context of the “Long Term Incentive Plan 2010-2015”. Of the
amount of 4,960 thousand euros, 4,882 thousand euros was later reclassified to share capital after
the bonus grant of 8,876,296 ordinary shares to those entitled, while the remaining amount was
reclassified in various reserves;
• Reserve for cash flow hedges (a negative 918,834 thousand euros): an increase of 278,311
thousand euros compared to December 31, 2010. This reserve is related to the accounting of cash
flow hedge transactions. In particular, it refers to unrealized gains and losses, net of the related tax
effect, on the fair value adjustment of a financial instrument designated as a cash flow hedge;
• Reserve for available-for-sale financial assets (10,771 thousand euros): an increase of
5,271 thousand euros compared to December 31, 2010. This reserve includes unrealized losses
regarding the investments in Fin.Priv (5,651 thousand euros) and Assicurazioni Generali
(2,403 thousand euros) and the net positive fair value adjustment of other available-for-sale
financial assets (18,825 thousand euros), net of the relative tax effects;
• Reserve for other equity instruments: equal to 3,234 thousand euros (a decrease of 8,368 thousand
euros compared to December 31, 2010). It comprises:
– the value of the stock options granted to executive directors in accordance with the “Top Plan
2008” and the value of the share granting rights assigned to Top Management of Telecom
Italia or subsidiaries in accordance with the “Performance Share Granting” Plan
(2,008 thousand euros);
– the value of the rights granted to subscribers of the “Long Term Incentive Plan 2010-2015”
(374 thousand euros);
– the value of the rights granted to subscribers of the “Long Term Incentive Plan 2011”,
approved by the shareholders’ meeting held on April 12, 2011 (852 thousand euros).
Telecom Italia S.p.A. Separate Financial Statements Note 12 – Equity 351