38 Finance income (expense)
|
(€ million) |
2011 |
2012 |
2013 |
|
Finance income (expense) |
|
|
|
|
Finance income |
6,376 |
7,218 |
5,746 |
|
Finance expense |
(7,410) |
(8,314) |
(6,649) |
|
Net finance income on financial assets held for trading |
|
|
4 |
|
|
(1,034) |
(1,096) |
(899) |
|
Gain (loss) on derivative financial instruments |
(112) |
(251) |
(92) |
|
|
(1,146) |
(1,347) |
(991) |
The breakdown by lenders or type of net finance gains or losses is provided below:
|
(€ million) |
2011 |
2012 |
2013 |
||
|
|||||
|
Finance income (expense) related to net borrowings |
|
|
|
||
|
Interest and other finance expense on ordinary bonds |
(610) |
(729) |
(742) |
||
|
Interest due to banks and other financial institutions |
(312) |
(251) |
(181) |
||
|
Interest and other income on financing receivables and securities held for non-operating purposes |
19 |
24 |
48 |
||
|
Interest from banks |
22 |
27 |
43 |
||
|
Net finance income on financial assets held for trading |
|
|
4 |
||
|
|
(881) |
(929) |
(828) |
||
|
Exchange differences |
|
|
|
||
|
Positive exchange differences |
6,191 |
7,010 |
5,481 |
||
|
Negative exchange differences |
(6,302) |
(6,879) |
(5,445) |
||
|
|
(111) |
131 |
36 |
||
|
Other finance income (expense) |
|
|
|
||
|
Capitalized finance expense |
112 |
150 |
170 |
||
|
Interest and other income on financing receivables and securities held for operating purposes |
75 |
69 |
74 |
||
|
Finance expense due to passage of time (accretion discount) (a) |
(235) |
(308) |
(240) |
||
|
Other finance income (expense) |
6 |
(209) |
(111) |
||
|
|
(42) |
(298) |
(107) |
||
|
|
(1,034) |
(1,096) |
(899) |
||
Derivative financial instruments consisted of the following:
|
(€ million) |
2011 |
2012 |
2013 |
|
Derivatives on interest rate |
(141) |
(88) |
40 |
|
Options |
|
(26) |
(41) |
|
Derivatives on exchange rate |
29 |
(137) |
(91) |
|
|
(112) |
(251) |
(92) |
Net loss from derivatives of €92 million (a net loss of €112 million and €251 million in 2011 and 2012, respectively) were recognized in connection with fair value valuation of certain derivatives which lacked the formal criteria to be treated in accordance with hedge accounting under IFRS as they were entered into for amounts equal to the net exposure to exchange rate risk and interest rate risk, and as such, they cannot be referred to specific trade or financing transactions. Exchange rate derivatives were entered into in order to manage exposures to foreign currency exchange rates arising from the pricing formulas of commodities in the Gas & Power segment. The lack of formal requirements to qualify these derivatives as hedges under IFRS also entailed the recognition in profit or loss of currency translation differences on assets and liabilities denominated in currencies other than functional currency, as this effect cannot be offset by changes in the fair value of the related instruments. Loss on options of €41 million related to the measurement at fair value of the options embedded in the bonds convertible into ordinary shares of Galp Energia SGPS SA (income for €14 million) and Snam SpA (loss for €55 million). More information is provided in Note 27 – Long-term debt and current maturities of long-term debt.
More information is provided in Note 43 – Transactions with related parties.
