TERNA'S BOARD OF DIRECTORS: DECEMBER 31, 2014 RESULTS APPROVED· Revenues at 1,996.4 million euros (+5.3%)

· EBITDA at 1,491.5 million euros (+0.2%)

· Group's Net Income at 544.5 million euros (+6%)

· Free cash flow at 260 million euros

· Proposed dividend for 2014 of 20 eurocents per share (of which 7 cents already paid as interim dividend and 13 cents as final dividend payable in June 2015)

London, March 26, 2015 - The CEO Matteo Del Fante presented the 2014 results, which were examined and approved by the Board of Directors of TERNA S.p.A. ("Terna") at a meeting chaired by Catia Bastioli today."These results reflect positive contribution from both our Regulated and Non Regulated businesses. Our strong Quality of Service performance helped deliver improved cash flow and working capital - stated Terna's CEO, Matteo Del Fante - Terna today has grown into Europe's leading transmission operator, well positioned to play a leading role in the development of an integrated European grid as energy policy evolves. We will maintain our focus on achieving further operational efficiencies, technology advances and growth opportunities as we expand the grid and invest in Non Regulated Activities. This will continue to deliver benefits for electricity consumers and value for our shareholders".CONSOLIDATED ECONOMIC AND FINANCIAL RESULTS
Figures in million euros
2014
2013
% change
Revenues
1,996.4
1,896.4
+5.3%
EBITDA (Gross Operating Margin)
1,491.5
1,488.1
+0.2%
EBIT (Operating Profit)
1,010.9
1,037.7
-2.6%
Net profit for the year
544.5
513.6
+6%


2014 revenues stand at 1,996.4 million euros, with an increase of 100 million euros (+5.3%) versus 2013. This increase was mainly related to Non Regulated activities (+79.1 million euros), essentially for revenues earned by the Tamini Group since acquisition (53.5 million euros) and increased other activities pertaining to fees for NTG variants, planning of interconnections with foreign networks and maintenance on Third-Party plants.Operating costs amount to 504.9 million euros, up by 96.6 million compared to 2013. The increase reflects the incorporation of the Tamini Group (approx. 53 million euros) and includes a provision of approx. 37 million euros to support a new generational change project that is to be started during 2015, which entails the recruitment of young professionals and a voluntary early retirement plan.Even considering non-recurring cost items, the Group's EBITDA (Gross Operating Margin) still amounts to 1,491.5 million euros, with an increase of 3.4 million euros (+0.2%) compared to 2013. EBITDA margin decreases from 78.5% in 2013 to 74.7% in 2014.Amortization and depreciation for the year amounted to 480.6 million euros, up by approx. 30 million euros versus 2013, mainly due to the commissioning of new plants. EBIT (Operating Profit) was 1,010.9 million euros, against 1,037.7 million euros in 2013 (-2.6%), as an effect of higher amortization and depreciation.Net financial charges for the year, equal to 127.9 million euros, were up 27.7 million euros compared to 100.2 million euros in 2013, which benefited from higher financial income mainly due to more favorable rates.Profit before taxes totaled 883 million euros, a 54.5 million euros reduction compared to the previous financial year (-5.8%).Income taxes for the financial year amounted to 338.5 million euros, an 85.4 million euros decrease (-20.1%) over the previous financial year, mainly due to the reduction of the IRES (corporate income tax) surcharge provided for by Decree Law no. 138 of 13/08/2011 (the so-called Robin Hood Tax), which set the IRES current tax rate at 34% (versus 38% in 2013), and to the adjustment of net deferred taxes resulting from the ruling on the unconstitutionality of the aforementioned IRES surcharge by the Constitutional Court (which set the rate for the IRES surcharge at 27.5% from 2015 onwards). Therefore, the tax rate for the financial year decreased from 45.2% in 2013 to 38.3% in 2014.Net profit for the year improved by approx. 31 million euros over 2013, reaching 544.5 million euros (+6%).
The Group's total investments are in line with development plans and amount to 1,096.1 million euros, compared to 1,212.3 million euros in 2013.
Over the course of the year, new strategic infrastructures such as the "Trino-Lacchiarella" and "Foggia- Benevento" lines were commissioned. Moreover, activities for the construction of the 380 kV "Sorgente- Rizziconi" power line and the "Italy-Montenegro" HVDC interconnection carried on, as did works for the development of electricity storage systems.
Net financial debt as at December 31st 2014 totaled 6,967.8 million euros compared to 6,697.8 million euros at 31 December 2013.Consolidated Shareholders' equity as of December 31, 2014 registered net Shareholders' equity of 3,092.9 million euros compared to 2,940.6 million euros as at end of 2013.As at December 31, 2014, the group headcount was 3,797. This figure includes the employees of the Tamini Group.RESULTS OF THE PARENT COMPANY - TERNA S.p.A.Terna S.p.A. closed 2014 with revenues at 1,788.1 million euros, a 1.8% increase (+32.2 million euros) compared to 2013.Operating costs amounted to 503 million euros, compared with a 2013 year-end figure of 442.7 million euros, essentially as a result of some non-recurring items. EBITDA, as a result, came to 1,285.1 million euros, equal to 71.9% of revenues (74.8% in 2013), a 28.1 million euros decrease compared to 1,313.2 million euros in 2013 (-2.1%).Amortization and depreciation for the year of 426.7 million euros was up 26.5 million euros compared to 2013 (+6.6%), mainly owing to the commissioning of new plants and the new decommissioning plans defined at the end of the financial year.
Therefore, EBIT (Operating Profit) stood at 858.4 million euros, decreasing by 54.6 million euros (-6%) compared to the 2013 financial year.Net profit for the year was 450.4 million euros, down 4.4 million euros compared to net profit in 2013 (-1%). The statement of financial position registered Shareholders' equity of 2,756.7 million euros (compared to2,688.1 million euros at December 31, 2013) and net financial debt of 6,796.2 million euros (+321.6 million euros compared to December 31, 2013).SIGNIFICANT EVENTS OCCURRING AFTER YEAR-END Terna a global leader in sustainabilityOn January 20, 2015, for the third year in a row, the Company was included in the RobecoSAM's Gold Class in the Sustainability Yearbook 2015 - which this year included a panel of over 3,000 international companies from 42 countries and 59 different sectors - that assesses the performance of the sustainability policies of major global corporations.
With one of the highest scores in the basket, Terna is one of the only companies in the word included in the Gold Class of the Electric Utilities industry, i.e. the highest performing companies in terms of sustainability. There are only 4 Italian companies included in the Gold Class for their respective industry.

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