Annual Report 2010 - Enel.com

Other provisions
“Other” provisions refer to various risks and charges, mainly
in connection with regulatory disputes and disputes
with local authorities regarding various duties and fees.
Provision for early-retirement incentives
32. Non-current financial liabilities - €2,591 million
At December 31, 2010, this item includes €2,591 million
(€2,964 million at December 31, 2009) in respect of the
fair value measurement of cash flow and fair value hedge
derivatives.
The “provision for early-retirement incentives” includes
the estimated charges related to binding agreements for
the voluntary termination of employment contracts in response
to organizational needs.
The following table reports the notional amount and fair
value of the cash flow hedge, fair value hedge and trading
derivatives.
Millions of euro Notional amount Fair value
at Dec. 31,
2010
at Dec. 31,
2009
at Dec. 31,
2010
at Dec. 31,
2009 2010-2009
Cash flow hedge derivatives:
- interest rates 10,704 11,504 566 629 (63)
- exchange rates 6,806 10,046 1,557 1,772 (215)
- commodities 171 41 5 2 3
Total
Fair value hedge derivatives:
17,681 21,591 2,128 2,403 (275)
- exchange rates 215 500 19 52 (33)
Total
Trading derivatives:
215 500 19 52 (33)
- interest rates 3,439 2,856 157 164 (7)
- exchange rates 88 150 4 4 -
- commodities 452 442 283 341 (58)
Total 3,979 3,448 444 509 (65)
TOTAL 21,875 25,539 2,591 2,964 (373)
At December 31, 2010, the notional amount of cash flow
hedge derivatives classified under non-current financial
liabilities came to €17,681 million, with a corresponding
fair value of €2,128 million.
Cash flow hedge derivatives on interest rates in effect at
December 31, 2010 were essentially composed of interest
rate hedges on a number of long-term floating-rate loans.
The decrease in the notional amount and the negative fair
value of the cash flow hedge derivatives on interest rates
was mainly due to the reclassification to the “trading”
portfolio of part of the cash flow hedge derivatives used
to hedge the interest-rate risk on the debt entered into by
Enel SpA in 2007 in respect of the syndicated credit line
with an original value of €35 billion, as the position was
overhedged following the partial early repayment of the
borrowing.
Cash flow hedge derivatives on exchange rates essentially
regard the hedging (using cross currency interest rate
swaps) of bond issues denominated in pounds sterling
and dollars. The fair value reflects the change in the value
of the euro against the hedged currencies.
Trading derivatives mainly regard transactions used for
hedging purposes but not designated as cash flow hedges
or fair value hedges or which did not satisfy the formal requirements
for such treatment under IAS 39.
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