Net financial position

The consolidated net financial position of the Holdings System at September 30, 2012 shows a negative balance of €531.7 million and a negative change of €205.9 million compared to the balance at the end of 2011
(-€325.8 million).

The balance is composed as follows:

  9/30/2012 12/31/2011
€ million Current Non current Total Current Non
current
Total
Financial assets 285.6 115.2 400.8 485.6 115.3 600.9
Receivables for withholdings to be collected  on dividends 22.1 0.0 22.1 0.0 0.0 0.0
Cash and cash equivalents 273.5 0.0 273.5 215.4 0.0 215.4
Total financial assets 581.2 115.2 696.4 701.0 115.3 816.3
EXOR bonds 2011-2031 (2.0) (99.3) (101.3) (0.7) (99.5) (100.2)
EXOR bonds 2007-2017 (12.3) (746.7) (759.0) (22.4) (746.3) (768.7)
Financial payables to associates (43.7) 0.0 (43.7) (48.3) 0.0 (48.3)
Bank debt and other financial liabilities (124.1) (200.0) (324.1) (24.9) (200.0) (224.9)
Total financial liabilities (182.1) (1,046.0) (1,228.1) (96.3) (1,045.8) (1,142.1)
Consolidated net financial position of the "Holdings System" 399.1 (930.8) (531.7) 604.7 (930.5) (325.8)

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NOTE

Current financial assets include equity shares and bonds issued by leading issuers, both of which are listed on active and open markets, and mutual funds. Such financial securities, if held for trading, are measured at fair value on the basis of the trading price at period-end or using the value determined by an independent third party in the case of mutual funds, translated, where appropriate, at the period-end exchange rates, with recognition of the fair value in the income statement. Derivative financial instruments are also used for the management of current financial assets.

Non-current financial assets include bonds issued by leading counterparties and listed on active and open markets which the Group intends, and is able, to hold until their natural repayment date as an investment for a part of its available cash so that it can receive a constant attractive flow of financial income. This designation was made in accordance with IAS 39, paragraph 9.
Such financial instruments are free of whatsoever restriction and, therefore, can be monetized whenever the Group should so decide. Their classification as non-current in the financial position has been adopted only in view of the fact that their natural maturity date is 12 months beyond the closing date of the financial statements. There are no trading restrictions and their degree of liquidity or the degree to which they can be converted into cash is considered high.

Cash and cash equivalents include demand deposits or short-term deposits, and readily negotiable money market instruments and bonds. Investments are spread over an appropriate number of counterparties since the primary objective is having investments which can readily be converted into cash. The counterparties are chosen according to their creditworthiness and reliability.

EXOR has two bonds outstanding for nominal amounts, respectively, of €750 million due on June 12, 2017, guaranteeing an annual fixed interest rate of 5.375%, and of Japanese yen 10 billion due May 9, 2031, guaranteeing an annual fixed rate of 2.80%.
The exchange risk on the latter bond is hedged by a cross currency swap. The cost in Euro is thus equal to 6.012% per year.

Financial payables to associates of €43.7 million refer to the payable to Almacantar S.A. for the share of capital subscribed in 2011, but not yet paid.

Bank debt and other financial liabilities (non-current portion) consist of loans secured from leading banking institutions.

The negative change of €205.9 million is due to the following cash flows:

€ million      
Net financial position of the Holdings System
at December 31, 2011
    (325.8)
Dividends received from investment holdings     151.7
-Fiat Industrial S.p.A. 71.3    
-SGS S.A. 63.2    
-Fiat S.p.A. 10.8    
-Gruppo Banca Leonardo S.p.A. 4.6    
-The Economist Newspaper Ltd 1.3    
-Other 0.5    
-Gruppo Banca Leonardo S.p.A. (capital reimbursement)     26.4
Disposals     203.9
-Alpitour S.p.A. 182.2 (a) 
-Banco BTG Pactual S.A. 21.7    
 Investments     (438.2)
-The Black  Ant Value Fund (300.0)    
-Fiat S.p.A. (30.8)    
-Fiat Industrial S.p.A. (16.0)    
-Other (91.4) (b) 
Dividends paid by EXOR S.p.A.     (80.1)
Other changes     (69.6)
-Net general expenses (excluding the figurative cost of EXOR's stock option plans) (14.9)    
-Non-recurring other income (expenses) and general expenses (1.1)    
-Net financial expenses (35.9) (c) 
-Income taxes paid (2.3)    
-Other net changes (15.4) (d) 
Net change during the period     (205.9)
Net financial position of the Holdings System
at September 30, 2012
    (531.7)
(a)The net equivalent amount of the sale is equal to €223.2 million; the difference of €41 million compared to the amount received of €182.2 million is represented by €15 million of non-current financial receivables (remaining balance of the sales price) and €26 million of current financial receivables (deferred sales price). Neither receivable is included in the net financial position balance. (b) Includes principally the investments in Paris Orléans S.A. for €25 million, Sequana S.A. for €17.7 million and Alpitour S.p.A. for €10 million. (c) Includes interest income and other financial income (+€37.3 million), interest expenses and other financial expenses (-€70.6 million), fair value adjustments of current and non-current financial assets (+€0.7 million) net of other income on non-current financial assets (-€3.3 million) therefore, not included in the net financial position balance. (d) Principally refers to the parent EXOR S.p.A. and includes the measurement of interest rate swaps on loans for -€11.9 million and the change in non-financial receivables and payables of EXOR for -€1.8 million.

At September 30, 2012 EXOR S.p.A. has irrevocable credit lines for €530 million, of which €475 million is due after September 30, 2013, as well as revocable credit lines for approximately €615 million.
EXOR’s long-term and short-term debt is rated by Standard & Poor's, respectively “BBB+” and “A-2”with a stable outlook.

Commercial Register No.64236277 Legal notes | Credits