Reclassified cash flow statement

Reclassified cash flow statement (1)

Saipem’s reclassified cash flow statement derives from the statutory cash flow statement. It enables investors to understand the link existing between changes in cash and cash equivalents (deriving from the statutory cash flow statement) and in net borrowings (deriving from the reclassified cash flow statement) occurring between the beginning and the end of the year. The measure enabling such a link is represented by the free cash flow, which is the cash in excess of capital expenditure requirements.

Starting from free cash flow it is possible to determine either:

(i) changes in cash and cash equivalents for the year by adding/deducting cash flows relating to financing debts/receivables (issuance/repayment of debt and receivables related to financing activities), shareholders’ equity (dividends paid, net repurchase of treasury shares, capital issuance) and the effect of changes in consolidation and of exchange differences;

(ii) changes in net borrowings for the year by adding/deducting cash flows relating to shareholders’ equity and the effect of changes in consolidation and of exchange rate differences.

(€ million)2012 approved2012 restated 2013 consistent 2013
Net profit (loss)  902  659  (404)  (159) 
Minority interest  54  54  23  23 
Adjustments to reconcile cash generated from operating profit before changes in working capital:         
Depreciation, amortisation and other non-monetary items  742  740  664  664 
Net (gains) losses on disposal and write-off of assets  (34)  (34) 
Dividends, interests and income taxes  507  507  250  250 
Net cash generated from operating profit before changes in working capital  2,209  1,964  499  744 
Changes in working capital related to operations  (1,434)  (1,189)  447  202 
Dividends received, income taxes paid, interest paid and received  (551)  (551)  (520)  (520) 
Net cash flow from operations  224  224  426  426 
Capital expenditure  (1,015)  (1,015)  (908)  (908) 
Investments and purchase of consolidated subsidiaries and businesses  (1)  (1)  - -
Disposals and partial disposals of consolidated subsidiaries and businesses  380  380 
Other cash flow related to capital expenditures, investments and disposals  - - - -
Free cash flow  (784)  (784)  (102)  (102) 
Borrowings (repayment) of debt related to financing activities  (4)  (4)  23  23 
Changes in short and long-term financial debt  1,419  1,419  525  525 
Sale of treasury shares  29  29  - -
Cash flow from capital and reserves  (352)  (352)  (374)  (374) 
Effect of changes in consolidation and exchange differences  (12)  (12)  (45)  (45) 
CHANGE IN CASH AND CASH EQUIVALENTS FOR THE YEAR  296  296  27  27 
Free cash flow  (784)  (784)  (102)  (102) 
Sale of treasury shares  29  29  - -
Cash flow from capital and reserves  (352)  (352)  (374)  (374) 
Exchange differences on net borrowings and other changes  21  21  47  47 
CHANGE IN NET BORROWINGS  (1,086)  (1,086)  (429)  (429) 

(1) See ‘Reconciliation of reclassified balance sheet, income statement and cash flow statement to statutory schemes’ on page 63.

Net cash flow from operations of €426 million only partially funded capital expenditures, thus generating a negative free cash flow of €102 million.

Cash flow from capital and reserves, which amounted to a negative €374 million, related mainly to the payment of dividends. The effect of exchange differences on net borrowings and other changes produced a net negative effect of €47 million.

As a result, net borrowings increased by €429 million.

In particular:

Net cash generated from operating profit before changes in working capital totalled €744 million. Net cash generated from operating profit before changes in working capital seen from an operating perspective totalled €499 million and related to:

  • a negative result for the year of €381 million, including minority interests of €23 million;
  • depreciation, amortisation and impairment of tangible and intangible assets of €724 million, less the change in the provision for employee benefits (€5 million), changes in investments accounted for using the equity method of €13 million and other changes of -€42 million;
  • net gains on the disposal of assets of €34 million;
  • net finance expense of €144 million and income taxes of €106 million.

The positive change in working capital related to operations totalled €202 million. The positive change in working capital related to operations seen from an operating perspective totalled €447 million and was due to financial flows of projects underway. Dividends received, income taxes paid, interest paid and received during 2013 of €520 million related mainly to taxes paid and refunded and to the purchase and sale of tax credits.

Capital expenditure in 2013 amounted to €908 million. Details of investments by sector are as follows: Offshore Engineering & Construction (€398 million), Onshore Drilling (€211 million), Offshore Drilling (€174 million) and Onshore Engineering & Construction (€125 million). Additional information concerning capital expenditure in 2013 can be found in the ‘Operating review’ section.

The cash flow generated by disposals of €380 million related to the sale of the FPSO and Snamprogetti Ltd business divisions.