Telecom Italia Group 1H 2014 Results

TELECOM ITALIA GROUP

1H 2014 Results

Milan, August 6th, 2014

Piergiorgio Peluso

Marco Patuano

1H 2014 Results 2

Safe Harbour

These presentations contain statements that constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These statements appear in a number of places in this presentation and include statements regarding the intent, belief or current expectations of

developments and changes in the customer base, estimates regarding future growth in the different business lines and the global business, market share,

financial results and other aspects of the activities and situation relating to the Telecom Italia Group. Such forward looking statements are not guarantees of

future performance and involve risks and uncertainties, and actual results may differ materially from those projected or implied in the forward looking

statements as a result of various factors. Consequently, Telecom Italia makes no representation, whether expressed or implied, as to the conformity of the

actual results with those projected in the forward looking statements. Forward-looking information is based on certain key assumptions which we believe to be

reasonable as of the date hereof, but forward looking information by its nature involves risks and uncertainties, which are outside our control, and could

significantly affect expected results. Analysts and investors are cautioned not to place undue reliance on those forward looking statements, which speak only

as of the date of this presentation. Telecom Italia undertakes no obligation to release publicly the results of any revisions to these forward looking statements

which may be made to reflect events and circumstances after the date of this presentation, including, without limitation, changes in Telecom Italia business or

acquisition strategy or planned capital expenditures or to reflect the occurrence of unanticipated events. Analysts and investors should consult the Company's

Annual Report on Form 20-F as well as periodic filings made on Form 6-K, which are on file with the United States Securities and Exchange Commission

which may identify factors that affect the forward looking statements included herein.

The accounting policies adopted in the preparation of the Half-Year Condensed Consolidated Financial Statements as of and for the six months ended 30

June 2014 have been applied on a basis consistent with those adopted in the Annual Consolidated Financial Statements at 31 December 2013, to which

reference should be made, except for the new standards and interpretations adopted by the Telecom Italia Group starting from 1 January 2014 which had no

effects on the Half-Year Condensed Consolidated Financial Statements as of and for the six months ended 30 June 2014. Please note that the limited review

on the Telecom Italia Group Half-Year Condensed Consolidated Financial Statements at 30 June 2014 has not yet been completed.

Following the classification, starting from the fourth quarter 2013, of the Sofora - Telecom Argentina group as a disposal group (Discontinued operations/Non-

current assets held for sale) the consolidated financial statements data of prior periods (including the first half 2013) have been restated accordingly and

therefore the Sofora - Telecom Argentina group is no longer separately presented as a business unit.

Furthermore:

•starting from the First Quarter 2014, Organic change in Revenues, EBITDA and EBIT are determined excluding, where applicable, only the effects of the

change in the scope of consolidation and exchange differences and therefore don‟t take into account, as in the past, non-organic income and expenses,

including those non-recurring;

•starting from the Interim Report at 31 March 2014, the Domestic business unit includes the Olivetti group, in addition to Core Domestic and International

Wholesale. This different presentation reflects the commercial and business placement of the Olivetti group and the process of integrating its products and

services with those offered by Telecom Italia in the domestic market. In the past, the results of the Olivetti group were included in the “Olivetti” business unit;

as a result, the data for prior periods under comparison have been restated, accordingly.

Marco Patuano - Piergiorgio Peluso

1H 2014 Results 3

• TI 2Q’14 Results

• Financial Update

• Take-Aways

• Appendix

Agenda

Marco Patuano

1H 2014 Results 4

Service Revenues 4,871 mln €

• Organic Performance at -7.1% YoY vs -6.5% in 1Q‟14 reflects:

• Domestic trend stabilization with a consistent improvement in mobile service revenues. Good acquisition trend in Fixed & Mobile UBB;

• Slight erosion in TIM Brasil figures impacted by full MTR drag in 2Q Solid growth in Mobile Generated Revenues

• Organic improvement to -4.8%YoY vs -5.7% in 1Q‟14 driven by:

• +0.8pp in 2Q in Domestic operations (+2.5pp net of subsidy);

• Continued Sound performance of TIM Brasil

Ebitda 2,145 mln €

Innovative Capex

~250 mln €

• Constant progression in this key area:

• Italy: 83 municipalities covered with fiber, 60.5% population reached by LTE, TIM recognized by AGCOM as best network in Italy for speed in data transmission;

• Brazil: 66 cities covered by mobile BB project (+13 cities vs 1Q‟14)

OpFCF generation

1,058 mln €

• Strong Performance in 2Q‟14: +11% YoY

Marco Patuano

• Reduction of 0.2 bln € vs 1Q‟14 & -1.5 bln € vs 2Q‟13 Net debt 27,36 bln €

2Q’14 Group Highlights

1H 2014 Results 5

-7.5% -7.9% -7.3% -8.6%

1Q'13 2Q'13 1Q'14 2Q'14

Fixed Service Revenues

Domestic Service Revenues

2,913 2,664

1,311 1,138

2Q'13 2Q'14

Mo

bile

F

ixe

d

elim.

3,914 3,567

-13.3%

-8.6%

-8.9%

€ mln, %YoY

2

1

2

Marco Patuano

Domestic Service Revenues Performance

-17.9% -18.3%

-14.9%

-13.3%

1Q'13 2Q'13 1Q'14 2Q'14

Mobile Service Revenues

• Stable TI retail line losses per quarter (~140k). CB erosion due to increasing trend in carrier selection and pre-selection disconnections

• Voice Usage & ARPU erosion

• Zero support from monthly rental fee increase in 2013

• A good set of KPIs in BroadBand. Faster than expected fiber acquisition trend

• Calling CB stabilization due to lower pressure coming from competitive environment and almost zero MNP balance

• ARPU stabilization on a quarterly basis

• Double-digit growth in mobile Broadband users. Good LTE take-up

1

1H 2014 Results 6

1,347

1,177

+30 -30

-49 -24

-98

1H13 IT commercial&other IT

others subsidy 1H14

+80

-50

innovative traditional

Do

mesti

c

Cap

ex

€ mln

NG

N

LT

E

83 municipalities

+ 31 vs 1Q‟14

Innovative

capex on total:

26% +10pp vs 1H‟13

network

UBB Coverage(2)

Efficiency(1): -153 mln €

Innovative portion of

network capex: 34%

+10pp vs 1H‟13 +47% YoY

>3x vs main competitor

60,5% of pop.

+10pp vs FY‟13

higher than main competitor

Marco Patuano

a b

c

d

(1) total domestic capex efficiency=

(2) at the end of July 2014

a b c d + + +

Italy: Switching Capex to Innovation

1H 2014 Results 7

Innovative revenues on total (1)

Mo

bile B

B C

B

Fib

er

CB

net

ad

ds

6,853 7,166 8,023 8,444 8,677 9,151

0% 1% 2% 4%

5% 7%

1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14

MBB Users % LTE on MBB Users

+4.3

+10.9

+29.8

+58.1

0.1 0.2

0.5

>1.0

3Q'13 4Q'13 1Q'14 2Q'14

Fiber CB Avg daily acquisition ('000)

>100k

clients

at the end

of June

~+30%

YoY

Investing to support the growth in

data and new services

(1) net of wholesale

„000

25% 32%

28% 32%

2Q’13 2Q’14

2Q’13 2Q’14 M

ob

ile

se

rvic

e

Fix

ed

se

rvic

e

innovative traditional

innovative traditional

Marco Patuano

Italy: New Services Demand is Catching Speed

1H 2014 Results 8

1

2

3

4

-23.3%

-17.4%

-14.9%

-13.3%

+12.9% +11.5%

-24.9% -23.5%

1Q'14 2Q'14

694 531

67

56

169

139

252

281

63

61

66

70

94

126

2Q'13 2Q'14

Outgoing voice

Incoming voice

SMS

Traditional

Broadband

VAS content

Innovative

wholesale

Service

handsets

Total

-21.9%

+8.4%

-13.3%

-10.0%

930

315

1,311

1,405

726

342

1,138

1,264

2H

Key

imp

rovem

en

t fa

cto

rs

Traditional • Outgoing ARPU

stabilization

• Zero MTR drag

• Constant recovery in

calling CB

Innovative • Increasing smartphone

penetration

• 4G uptake support

• New digital entertainment

services

Service Revenues Trend

Reven

ues

1

2

3

4

Domestic Mobile: Clear Signs of Improvement € mln, %YoY

Marco Patuano

-14.9% -13.3%

1Q'14 2Q'14 3Q'14 4Q14

+ +

1H 2014 Results 9

-19.7%

-20.7%

1Q'14 2Q'14

+0.1%

+1.8%

-4.9%

-8.4%

-6.9%

-8.3%

2H

Key

imp

rovem

en

t fa

cto

rs

Traditional • F/M traffic erosion

reduction due to

bundled offers

• Access valorisation

Innovative • Constant support from

BB CB growth

• Increased fiber

penetration and adoption

• Continued uptrend in ICT

services

Service Revenues Trend

444 352

706 647

267 232

398 402

37 38

129 134

933

859

72

73

2Q'13 2Q'14

Traditional

Broadband

VAS content

Innovative

National, Int‟le wholesale + Subs&other

Total

Outgoing

Access

Others

Service

1,416

564

2,913

2,985

1,231

574

2,664

2,737 handsets

ICT

-13.1%

+1.8%

-8.3%

-8.6%

-7.3% -8.6%

1Q'14 2Q'14 2H'14

+

ARPU

CB

1

2

3

4

Marco Patuano

Domestic Fixed: Leveraging on the Value of BB R

even

ues

1

2

3

4

€ mln, %YoY

1H 2014 Results 10

+7%

+9%

-30%

-23%

-1%

+1%

-18%

-22%

mobile

• Outgoing Voice Revenues flat

• SMS declining trend

Excellent take-up in data KPIs in 2Q

• Smartphone & webphone penetration at 62%

• Smartphones ~71% of new handset sales

\

YoY, %

+3%

ex-MTR

-2.0%

+0.3%

Total Service Revenues

Mobile & Fixed Service Revenues

Mobile Service Revenues(1)

-7%

flat

-1%

Outgoing SMS

Outgoing Voice

Traditional

+73%

+35%

+44%

Vas Content & other VAS

Data

Innovative

1Q‟14

2Q‟14

fixed(2) received

generated

1Q‟14

partially

impacted by

MTR cut

2Q‟14 fully

affected by

this year

MTR cut

Marco Patuano

(1) visitors&other revenues non included

(2) revenues based on net contribution

Brazil: Usage of Mobile Data is Rapidly Expanding

1H 2014 Results 11

Marco Patuano

Well advanced sale process:

The TIM Part tower portfolio is appealing for the market due to its further co-tenancy potential;

Sale process attracted strong interest from various highly qualified buyers;

Transaction involves more than 6.5k TIM towers;

Expected to be finalized by the end of the year.

Fits our continued leveraging on development of mobile data, increasing our 4G frequencies and roll-out:

Minimum price and cleanup costs range not yet fully defined; License period: 15 + 15 years; Payment preceded by a deposit of 10%;

No further obligations. Opportunity for network and spectrum sharing.

Italy Brazil Argentina

Transaction dependent on clear industrial driver: Market analysis still in process before project launch;

More than 10k towers potentially involved into the deal.

Merger of the digital terrestrial network operator businesses of Telecom Italia Media and Gruppo Editoriale L’Espresso finalized on June 30th:

TI Media and Gruppo L‟Espresso hold 70% and 30% of the shares of Persidera - the new name of TIMB respectively;

This transaction has resulted in the creation of the leading independent network operator in Italy, which owns five digital multiplexes with a nationwide coverage infrastructure providing high-quality services;

Disposal expected within 2014.

Tower Deal

700Mhz Auction

TI Media

Sale process in the final phase:

Waiting for the Administrative authorizations from the Local Regulatory Authorities to transfer the control of Telecom Argentina;

Buyer and seller committed to proceed.

Asset disposal

Planned Non-Core Assets Disposals Progress

Tower Deal

1H 2014 Results 12

Piergiorgio Peluso

• TI 2Q‟14 Results

• Financial Update

• Take-Aways

• Appendix

Agenda

1H 2014 Results 13

Re

ve

nu

es

2Q’14 Reported

€ mln, %YoY

Eb

itd

a

Ca

pe

x

Group Domestic

Brazil

Group Domestic

Brazil

Group Domestic

Brazil

5,363 3,803

1,558

2,145 1,709

434

1,023 684

337

Organic(1)

-10.6% -8.2%

-15.0%

-6.7% -7.5%

-4.8%

-14.5% -10.9%

-19.6%

-6.8% -8.1%

-3.4%

-4.8% -7.4%

+8.0%

-9.6% -10.9%

-7.0%

-2.0%

-4.1%

-4.2%

-2.8%

net of new SAC policy

Weight(2) €mln YoY YoY

(1) Starting from 2014, Organic performance includes only exchange rate variations and impacts from perimeter changes

(2) Including TI Media, Other & Elimination. Olivetti is included in the Domestic perimeter

Eb

itd

a -

Ca

pe

x

Group Domestic

Brazil

1,122 1,025

97

+1.7% -5.0%

+162%

+0.1% -4.9%

+164%

71%

29%

80%

20%

67%

33%

91%

9%

n.a.

n.a.

Piergiorgio Peluso

Telecom Italia 2Q’14 Results

1H 2014 Results 14

Reported data, € mln, %YoY

2Q'13 2Q'14

63

2Q'13 2Q'14

2Q'13 2Q'14

63

2Q'13 2Q'14

Total Revenues

Ebitda - Capex

Ebitda

Capex

on revenues 44.6% 44.9%

-4.2%

net of new SAC policy

1,847 1,709 -7.5% 4,141

3,803

768 684

-8.2%

-10.9% -54 1,079 1,025

-2.8%

net of new SAC policy

Piergiorgio Peluso

Domestic Performance Dashboard

1H 2014 Results 15

(1) Interconnection, Cost of Equipment, Other COGs

(2) Acquisition costs, ADV, Customer Care, Other commercial costs

(3) Industrial costs, G&A, Real Estate, Other

Volume/ Revenues Driven (1)

Market/ Customer Driven (2)

Process/ Asset Driven (3)

Labour Cost

1,423 1,440

4,030 4,407

1H14 1H13

-86

-377

-238

1,414 1,449

683 921

510 596

External Opex net of COGs

-324 mln € YoY

Solid Cost Reduction:

• Lower competition is reducing marketing expenses

• Zero-base budget G&A approach

• Facility services efficiency and rental renegotiations

• Massive energy saving program based on efficiency, technological upgrades and development of distributed power generation

Piergiorgio Peluso

1H14 Opex Reduction Overperforming FY Targets € mln

1H 2014 Results 16

1,327 1,302

284 256

2Q'13 2Q'14

40 97

2Q'13 2Q'14

361 337

2Q'13 2Q'14

401 434

2Q'13 2Q'14

Organic data*, € mln, %YoY

24.9% 27.8%

+8.0%

-3.4%

-7.0%

+57

Piergiorgio Peluso

* Excluding exchange rate

Brazil Performance Dashboard

Service

Handsets

1,558 1,611

-2.0%

Mobile Service +3% ex-MTR

1H’14 +4% YoY

Total Revenues

Ebitda - Capex

Ebitda

Capex

on revenues

1H 2014 Results 17

Group OpFCF

Domestic 2Q OpFCF

Brazilian 2Q OpFCF

306 83 OpFCF

∆WC & Others 209

46

+97 +37

2Q‟14 2Q‟13

+223

€ mln

1,044 1,017 OpFCF

∆WC &

Others

EBITDA

- CAPEX

-1,594 -1,722

2,638 2,739

1H‟14 1H‟13

+27

Piergiorgio Peluso

2Q

14

Op

FC

F 1

,05

8

753 875 OpFCF

∆WC & Others

Ebitda - Capex

-204

1,025 1,079

2Q‟14 2Q‟13

-122

-272

1H’14 Operating FCF: Focus on 2Q Improvement

-105

Fine levied

by the Italian

AntiTrust

~+60

Leasing LT

Amazonas

-146

2013 Brazilian

Frequencies

payment

Ebitda - Capex

1H 2014 Results 18

Improving our Cost of Funding

Robust and Safe Liquidity Position

Lowering Bond Yields • 10Yrs 1.5 Bln $ issued in May14 - Yield: 275bps @4.2% € Equiv

• 7Yrs 1 Bln € issued in Jan14 - Yield: 300bps @4.6%

• 7Yrs 1 Bln € issued in Sept 13 - Yield: 330bps @5.05%

Lowering costs of Bank Facilities

Amendment of 7 Bln € bank facilities (maturing in 2017/2018):

commitment fees lowered by approx. 35% with significant savings on

financial expenses (starting from August 1, 2014)

Debt maturities covered until 2017

Tenors well diversified to avoid concentration

Strict Guidelines for Liquidity and Credit position:

• High credit-quality banking and financial institutions

• Diversification policy among different banking counterparts

(limits of concentration by type of investment, sector and

counterparts)

• Deposits generally made for periods of less than 3 months

Liquidity Margin

Cash Financial Expenses

827 874

1H14 1H13

- 47

€ mln

12.8

€ bln

Cash & Cash Equivalent

Undrawn portion of committed facilities

6.5

6.3

1H‟14

Piergiorgio Peluso

Treasury Optimization

1H 2014 Results 19

Marco Patuano

• TI 2Q‟14 Results

• Financial Update

• Take-Aways

• Appendix

Agenda

1H 2014 Results 20

Domestic

• Domestic business on track with 2014-2016 Plan

• Improving trend in mobile space paving the way to a solid 2H2014

• Line losses and voice ARPU weak as expected; increasing BB ARPU and sound

fiber take-up rate leading to a better fixed revenues mix

• Continued over-performance on efficiencies with a positive impact on OpFCF Efficiency

Plan

Innovative Capex

• The take-up of innovative services shows we must keep our focus on

CAPEX for innovation

Disposal • Non-core asset disposal ongoing

Marco Patuano

• Free Cash Flow Generation well on track and debt duly managed FCF

generation

2Q’14 Group Take-Aways

Brazil • Brazilian mobile transformation to a data driven market is underway: data revenues

almost offset MTR drag and by 2016 it will account for 40% of total revenues

1H 2014 Results 21

Marco Patuano - Piergiorgio Peluso

• TI 2Q‟14 Results

• Financial Update

• Take-Aways

• Appendix

Agenda

1H 2014 Results 22

March April May June July

On-air TV

Avg. weekly acquisition trend

A well-managed growth

• Healthy acquisition

trend confirmed also

after launch phase

• More than 150k users

by mid July

Acquisition Mix: 2Q’14 vs. pre 2Q’14

new lines existing CB

mo

bile

fixe

d

stable stable

-10pp +10pp

Delta ARPU: 2Q’14 vs. pre 2Q’14

new lines existing CB

Growth

Broadly

stable Stable

Double

digit growth

mo

bile

fixe

d

TIM Smart: A Proven

Value - Accretive Proposition

Marco Patuano - Piergiorgio Peluso

«TIM Smart» Successful Story

1H 2014 Results 23

1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14

-28 -20

-8 -17

-41 -34

-111 -107

-178 -197

-124

-92

Jan Feb Mar Apr May June

Highlights

31,858 31,706 31,554 31,221 30,996 30,660

Active

CB

Mobile CB

• Customer base stabilization due to better

competitive environment

• Constant increase of active SIM on total CB:

• +0.7 pp in 1Q‟14 vs 1Q‟13

• +1.7 pp in 2Q‟14 vs 2Q‟13

2014

2013

TIM MNP Balance

+83 +58 +86 +169 +180 +83

Highlights

• Solid sign of healthier mobile market in Italy: -35% total MNP volume in 1H‟14 vs. 1H‟13

• Sound TIM MNP balance vs previous year: +660k clients in 1H’14 vs 1H’13

Marco Patuano - Piergiorgio Peluso

Domestic Mobile KPIs „000

1H 2014 Results 24

13,777 13,555 13,372 13,210 13,027 12,828

7,238 7,233 7,164 7,169 7,211 7,258

1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14

6,019 5,918 5,842 5,814 5,766 5,679

965 1,014 1,045 1,084 1,122 1,155

1 1 4 15 45 103

1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14

Fixed Access

Broadband

ARPU 18.9 19.1 19.2 19.2 19.2 19.6

OLO

TI retail

21,016 20,788 20,536 20,378 20,238 20,085

13,913 13,910 13,867 13,960 14,084 14,187 Market BB

BB fast

„000

ADSL

Marco Patuano - Piergiorgio Peluso

Domestic Fixed KPIs

Highlights

• TI customer base erosion due to different

mix: stable contraction of TI Retail

Calling accesses confirmed (~-140k per

quarter) and constant increasing

disconnections of Calling Retail OLOs in

TI Access Base (carrier selection and

carrier preselection): -21k in 4Q‟13, -42k in

1Q‟14 and -60k in 2Q‟14

Highlights

• Solid performance in Fast BB customer base: +24% YoY @ ~1.3 mln clients

• Right mix in CB dynamic:

• +35k QoQ on Flat users • -30k QoQ on Free users

• Positive BB ARPU trend confirmed

• +2.3% YoY @ 19.6 €/month • o/w Consumer +4.1% YoY @ 17.1 €/month

1H 2014 Results 25

-12.2%

+2.8%

-12.9%

-15.0%

-14.8%

-23.9%

-1.4%

-19.0%

+16.1%

-20.3%

-65.9%

-10.0%

+5.3%

-10.9%

-14.3%

-14.1 %

-23.6%

-0.5%

-18.8%

+34.9%

-18.8%

-76.0%

1,264

78

1,186

1,060

1,011

531

480

49

126

517

14

Total

wholesale(1)

Consumer+Business

services

outgoing voice

VAS

business received

handsets

business generated(2)

(1) Including Visitors

(2) Total Retail Service Revenues net of Incoming

voice

fees&other

1,405

74

1,331

1,238

1,177

694

483

60

93

637

58

2Q’13 2Q’14 YoY 1H’14 vs 1H’13

Marco Patuano - Piergiorgio Peluso

Domestic Mobile Revenues Breakdown Reported, € mln, %YoY

1H 2014 Results 26

Reported, € mln, %YoY

Service Wireline

Sparkle group

Wholesale Domestic

Retail Service

voice & access

internet

business data

other

elim. & other

2,913 2,664 -8.6% -8.0%

313 300 -4.2% +0.8%

660 598 -9.4% -11.1%

1,981 1,808 -8.8% -8.1%

1,247 1,094 -12.3% -11.5%

403 408 +1.1% +0.5%

268 265 -1.0% -1.6%

63 41 -34.9% -25.2%

(41) (42) n.m. n.m.

Total Wireline 2,985 2,737 -8.3% -7.6%

Marco Patuano - Piergiorgio Peluso

products 72 73 +1.9% +10.4%

Domestic Fixed Revenues Breakdown

2Q’13 2Q’14 YoY 1H’14 vs 1H’13

1H 2014 Results 27

814

1,383

909

947

1,040

1,147

1,611

7,851 6,500

387

1,882

1,880

2,936

2,232

3,042

10,800

23,159

6,347

1,500

1,500

12,847

2,701

3,265

2,789

3,883

3,272

4,189

12,411 32,510

Liquiditymargin

Within 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Beyond 2019 Total M/LTerm Debt

Liquidity Margin

€ 32,510 mln is the nominal amount of outstanding medium-long term debt. Adding by Mandatory Convertible Bond (€ 1,300 mln), discontinued operations (€ 27 mln), IAS adjustments (€ 710 mln) and current financial liabilities (€ 442 mln), the gross debt figure of € 34,989 mln is reached.

N.B. Debt maturits are net of € 1,745 mln (face value) of repurchased (of which € 987 in the 2013 and € 543 in the 2014) own bonds (of which € 1,530 mln related to bonds due within 2016).

Loans (of which long-term rent, financial and operating lease payable € 1,200)

Drawn bank facility Bonds

Debt Maturities

Undrawn Portion of Facility/Committed

Group Liquidity Position (Ex. Disc. Ops)

Fully Covered

until 2017

Marco Patuano - Piergiorgio Peluso

Robust Liquidity Margin and Well-Distributed Debt Maturities

€ mln € mln

1H 2014 Results 28

N.B. The figures are net of the adjustment due to the fair value measurement of derivatives and related financial liabilities/assets, as follows:

- the impact on Gross Financial Debt is equal to 2,457 mln € (of which 724 mln € on bonds)

- the impact on Financial Assets is equal to 978 mln €

Therefore, the Net Financial Indebtedness is adjusted by 1,479 mln €

Total Gross Debt net of Adjustment: Euro 34,989 mln

Gross debt 34,989 (of which 28 mln disc. Operations)

Financial assets (7,226)

of which Cash & CE and marketable securities (6,347)

Cash & Cash Equivalent (4,983)

Marketable securities (1,364)

Italian Government Securities (1,045)

Other (319)

Discontinued operations (405)

Net Financial Position 27,358

Maturities and Risk Management

Cost of debt:

5.5%

Average debt maturity: 7.16 years

(bond only 8.09 years)

Fixed rate portion on gross debt approximately

67.3%

Around 40% of outstanding bonds (nominal amount)

is denominated in USD, GBP and YEN and is fully

hedged

€ mln

Marco Patuano - Piergiorgio Peluso

Well-Diversified and Hedged Debt

1,462 Bank Facilities 16.9%

4.7%

1,677 Other

5,898 Banks & EIB

1,216 Op. leases and long

24,708 Bonds

4.2%

3.5%

28

Discontinued operations

0.1%

70.6%