REPORT ON THE FIRST QUARTER OF 2005 OF THE AUTOSTRADE GROUP

Transcription

1 REPORT ON THE FIRST QUARTER OF 2005 OF THE AUTOSTRADE GROUP

2 REPORT ON THE FIRST QUARTER OF 2005 OF THE AUTOSTRADE GROUP BOARD OF DIRECTORS 13 MAY 2005 Share capital 571,711, fully paid-in Tax Code, VAT Registration and Company Register of Rome no REA registration number: Registered office in Rome, Via A. Bergamini, 50

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6 CONTENTS INTRODUCTION 7 CORPORATE BODIES 9 1 HIGHLIGHTS 10 2 AUTOSTRADE SHARE PERFORMANCE IN Q DIRECTORS OBSERVATIONS 14 The core business 15 Core business services 22 Other activities 24 Human resources 26 4 ACCOUNTING STATEMENTS AND NOTES 28 Key figures of the consolidated profit and loss account, balance sheet and cash flow statement 29 Restated accounting statements (Autostrade S.p.A.) 40 Adoption of IAS/IFRS 43 5 BUSINESS OUTLOOK FOR THE ENTIRE YEAR 46

7 6 REPORT ON THE FIRST QUARTER OF 2005

8 INTRODUCTION 7 INTRODUCTION This report on the Autostrade Group s operations during the fi rst nine months of 2005 has been prepared in accordance with Article 82 of CONSOB order no of 14 May 1999 (Issuers Regulation), as subsequently amended. The accounting principles and the basis of accounting adopted for this document are the national accounting principles, as permitted in the transition period established by the Issuers Regulation above and introduced by CONSOB order no of 14 April These principles have not changed from those adopted in the preparation of the fi nancial statements at 31 December With regard to the transition to the International Accounting Standards, as is required during the transition period, this report contains a specifi c section on the procedures implemented for the transition to IAS/IFRS and their implementation status. The consolidation area includes the Parent Autostrade S.p.A. and subsidiaries owned directly and indirectly as provided for by Article 2359, paragraph 1, item 1 of the Italian Civil Code. Compared with 31 March 2004, the scope of consolidation includes the subsidiaries AD Moving (which was consolidated at 31 December 2004) and Port Mobility. These new inclusions in the consolidation area do not change the comparability of fi gures with those for the fi rst quarter of Revenues and costs are stated according to the accruals method of accounting. A portion of revenues from tolls for the period are based on a reasonable estimate, partly due to the network interconnection and the need to distribute tolls among the various concession-holders.

9 8 REPORT ON THE FIRST QUARTER OF 2005

10 CORPORATE BODIES 9 CORPORATE BODIES BOARD OF DIRECTORS IN OFFICE FOR THE YEARS CHAIRMAN MANAGING DIRECTOR DIRECTORS Gian Maria GROS-PIETRO Vito GAMBERALE Salvador ALEMANY MAS Gilberto BENETTON Amerigo BORRINI Sabino CASSESE Roberto CERA Alberto CLÔ (1) Sergio DE SIMOI Piero DI SALVO (1) Antonio FASSONE Guido FERRARINI (1) Guidalberto GUIDI (1) Gianni MION Giuseppe PIAGGIO BOARD OF STATUTORY AUDITORS IN OFFICE FOR THE YEARS CHAIRMAN PERMANENT STATUTORY AUDITORS ALTERNATE STATUTORY AUDITORS Alessandro TROTTER Raffaello LUPI Angelo MIGLIETTA Giovanni QUAGLIA Marco SPADACINI Giuseppe Maria CIPOLLA Giandomenico GENTA INDEPENDENT AUDITORS FOR THE YEARS KPMG S.p.A. (1) Independent Directors

11 10 REPORT ON THE FIRST QUARTER OF HIGHLIGHTS Consolidated (In thousands of euros) Q Q Change Amount % Profit and loss account highlights REVENUES % GROSS OPERATING MARGIN (EBITDA) % EBITDA Margin 62.8% 61.2% OPERATING PROFIT (EBIT) % EBIT Margin 32.5% 31.0% PROFIT BEFORE TAXATION (EBT) % NET PROFIT FOR THE PERIOD (Including minority interests) % NET PROFIT FOR THE PERIOD (Group) % CASH FLOW FROM OPERATIONS (1) INVESTMENTS IN TANGIBLE ASSETS AVERAGE WORKFORCE (no. of employees) 9,107 9,164 BALANCE SHEET HIGHLIGHTS 31-Mar Dec-04 consolidated CAPITAL EMPLOYED 10,660 10,791 SHAREHOLDER S EQUITY (Group and minority interests) 1,866 1,825 NET DEBT 8,794 8,966 (1) Funds from Operations (FFO) calculated as Profi t + Amortisation&Depreciation + Provisions of liabilities and charges +/-Value adjustments of fi nancial assets +/-Gains/Losses on shares +/-Extraordinary non-monetary charges/income +Portion of deferred taxes on trasfers

12 HIGHLIGHTS 11 Consolidated Revenues for the fi rst quarter of 2005 amounted to 650 million and increased by 33 million (+5.3%) from the year-earlier period ( 617 million). These mainly relate to: Net revenues from tolls of 544 million, an increase of 26 million (+5.1%) compared to the fi rst quarter of 2004, due to toll increases charged by the Group concession-holders from 1 July 2004 and 1 January 2005 and the increase in traffi c on the operated network (+0.5%). Easter holidays also fell in the fi rst quarter, and partly offset the extra leap day in 2004 as compared with Other revenues from sales and services of 104 million, an increase of 7 million (+6.7%) from the same period of Gross operating margin (EBITDA) amounted to 408 million, an increase of 31 million from the fi rst quarter of 2004 (+8.2%). The EBITDA margin for the fi rst quarter of 2005 reached 62.8% from 61.2% in the year-earlier period. Operating profi t (EBIT) amounted to 211 million and increased by 20 million (+10.3%) from the yearearlier period ( 191 million). The EBIT margin reached 32.5% from 31.0% in the year-earlier period. The Net profi t for the period (Group) amounted to 40 million, up 15 million (+57.8%) from 25 million in the fi rst quarter of Cash fl ow from operations for the period amounted to 254 million, up 25 million from the fi rst three months of Net debt at 31 March 2005 amounted to 8,794 million and decreased by 172 million from 31 December 2004 as a result of operations. Shareholders equity (Group and minority interests) amounted to 1,866 million. The Group average workforce was 9,107, a decrease of 57 employees (-0.6%) from the year-earlier period.

13 12 REPORT ON THE FIRST QUARTER OF AUTOSTRADE SHARE PERFORMANCE IN Q1 2005

14 AUTOSTRADE SHARE PERFORMANCE IN Q Autostrade share performance in Q Autostrade S&P/MIB (re-indexed) Volumes 50,000 45,000 40,000 35,000 30, Volume ('000) 25,000 20,000 15, Price ( ) 10, , Jan Jan Jan-05 6-Feb Feb-05 2-Mar Mar Mar-05 Between 31 December 2004 and 31 March 2005, Autostrade shares gained 1.4% in value (from a reference price of at 30 December 2004 to a reference price of at 31 March 2005) against a rise of 4.5% by the Standard & Poor s/mib index. The minimum price in the period was 19,225 (on 10 March 2005) and the maximum (on 7 February 2005). The volume of the Autostrade shares traded daily is around 4.9 million. At 31 March the stock market capitalization of Autostrade was more than 11.4 billion.

15 14 REPORT ON THE FIRST QUARTER OF DIRECTORS OBSERVATIONS

16 DIRECTORS OBSERVATIONS THE CORE BUSINESS TRAFFIC In the fi rst quarter of 2005 traffi c on the Autostrade Group network grew by 0.5% from the fi rst quarter of 2004: 11,230 million kilometres were travelled overall, 8,432 million kilometres were travelled by light vehicles (+1.3%) and 2,798 million kilometres by heavy vehicles (-2.0%). Traffic on the network of the autostrade group Q (million of kilometres travelled provisional figures) Company 2005 % Change 2005/2004 Light Heavy Total Light Heavy Total Autostrade per l Italia 7, , , % -2.1% 0.5% Tangenziale di Napoli % -3.3% -2.5% Autostrade Meridionali % -6.2% -4.6% Autostrada Torino-Savona % 1.0% 5.9% Società Autostrada Tirrenica % -4.2% 3.6% Raccordo Autostradale Valle d Aosta % 10.6% 5.4% Traforo del Monte Bianco % 11.8% 8.9% Strada dei Parchi % 3.7% 3.1% TOTAL AUTOSTRADE GROUP 8, , , % -2.0% 0.5% The comparison with the fi rst quarter of last year is adversely affected by the extra day in February 2004 (leap year) (-1.1%). If we include this, the change (in terms of Group Daily Average Theoretical Vehicles) is +1.6% (+2.4% Light Vehicles, -0.9% Heavy Vehicles). The change in traffi c during the fi rst three months of 2005 was signifi cantly affected by bad weather, especially in January and February, also in Southern Italy. This was more than off-set by the growth of light traffi c in March, partly due to the Easter holidays, which in 2005 fell in the fi rst quarter. Heavy traffi c decreased in the period due to the diffi cult situation of the Italian economy. Traffi c performance in the fi rst three months of the year is historically more subject to changes than over the entire year.

17 16 REPORT ON THE FIRST QUARTER OF TOLLS Starting 1 January 2005 all of the Autostrade Group companies applied annual toll charge adjustments based on the price cap formula established in the relative Agreements, as shown in the table below. P X ß Q T Toll charge adjustments as of 1 January 2005 (percentage values) Concession-holders Target Inflation Expected productivity rate Inflation adjustment Investments under Fourth Addendum Service quality Annual increase (+) (-) (+) (+) (+) (=) Autostrade per l Italia Autostrade Meridionali Tangenziale di Napoli Torino-Savona RAV SAT Strada dei Parchi In 2005 for the fi rst time Autostrade per l Italia managed to use the new factor X investments in connection with the start-up of works on the fourth lane of the Milan-Bergamo section on the motorway A4, as established by the Fourth Addendum to the Agreement of 1997, which also set the value of X productivity at 1.2%. At the end of 2004, after the fi rst fi ve years of the renewal of the agreements with ANAS, the motorway concession-holders Autostrade Meridionali, Tangenziale di Napoli, Torino-Savona, Raccordo Autostradale Valdostano (RAV) and Società Autostrada Tirrenica (SAT) re-negotiated with ANAS the value of the productivity factor X and set it at 0.89% for Due to determinations of the Italian and French governments in October 2001 (later complemented by an agreement signed in 2003) Traforo del Monte Bianco applied a toll charge increase of +2.38% for light vehicles; toll charges for heavy vehicles were increased according to class of polluting substances: +4.07% for class euro 1 and +4.32% for classes euro 2 and euro 3.

18 DIRECTORS OBSERVATIONS NETWORK OPERATION Accident rates All accident rates indicators further decreased in the fi rst quarter of 2005, after they achieved good results in The overall number of accidents on the network operated by the Group decreased (-12.85%) and serious accidents were even less than in the same period of 2004, as was shown by the number of fatal accidents (-22.89%) and fatalities (-26.53%). Toll payment Automated toll payments continued to increase in the fi rst quarter of At the end of the period 4,442,420 Telepass devices were in use, of which 2,547,291 were Telepass family and 1,895,129 are distributed with Viacard passes. The increase over the end of 2004 was 2%, in line with the performance of the fi rst quarter of Telepass devices in use 31 Dec Mar 2005 Telepass Family devices Telepass devices distributed with Viacard a/c 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, , In the period automated toll payment systems on the Autostrade per l Italia network accounted for 71.31% of total toll payment transactions made at stations; Telepass accounted for 52.09% of total payment transactions.

19 18 REPORT ON THE FIRST QUARTER OF 2005 Type of payment Number of transactions Payment transactions Q Q (provisional figures) % Number of transactions % change % Autostrade per l Italia Exit transactions by payment type MANUAL TRANSACTIONS 50,586, % 45,908, % -9.25% Automated cashier (cash) 8,177, % 10,755, % 31.52% VIAcard C/C and Plus 8,687, % 7,670, % % Telepass 83,068, % 85,790, % 3.28% Prepaid debit card 5,951, % 5,288, % % Credit cards 4,379, % 4,447, % 1.55% FASTpay 3,380, % 3,479, % 2.95% Total automated payments 113,644, % 117,432, % 3.33% Other (recorded non-payments, strikes, illegal acts) 1,482, % 1,346, % -9.16% GRAND TOTAL 165,713, % 164,687, % -0.62% The slight reduction in the number of payment transactions between the fi rst quarter of 2005 and the fi rst quarter of 2004 (-0.62%) is due to the extra day in 2004 (leap year), and to the adverse effect of bad weather on traffi c. During the fi rst three months of 2005, 50 traffi c stop orders were implemented to stop traffi c, wholly or partly, in the urban areas of Rome, Milan, Florence and Bologna, with a subsequent decrease in short-distance travels to towns. The several types of automated payments not only prove the steady growth of the telepass system (+3.28%), but also confi rm the effi ciency of this type of payment: the signifi cant increase in payments made through automated cashiers (+31.52%), due to the activation of 37 new automated cashiers along the network; the decrease in payments through prepaid debit Viacard (-11.13%), because it is no longer convenient for travellers to pay in advance; the decrease in payments through Viacard a/c (-11.71%), owing to the travellers preference for Telepass.

20 DIRECTORS OBSERVATIONS 19 Maintenance and Assistance Activities aiming at maintaining the network functional effi ciency and guaranteeing high service and safety standards have continued during the period. Specifi cally, rehabilitation works on crash barriers continued and the closing of gaps in traffi c dividers were completed. There is a project for the installation of noise absorbent barriers on motorway A12, at Chiavari and Lavagna, over more than 1,600 linear metres at 9 sites along this section. In the fi rst quarter of 2005 maintenance works, which are usually carried out in bad weather during winter, were performed during diffi cult weather conditions, with particularly heavy snowfalls on several motorway sections. The Group has implemented a structured plan to face bad weather emergencies and anticipate and face traffi c disruptions in winter , strengthening its organisation of men, means, technologies and procedures dealing with these situations. On all the motorways affected the systems in place for assuring the continued fl ow of traffi c were strengthened with workers and equipment (salt spreaders and snow ploughs) in winter. More specifi cally, winter works were better organised by: making operational agreements with interconnected concession-holders to manage winter emergencies in a co-ordinated way; setting up an alert and information system based on weather alert codes for all Italian motorway concession-holders; strengthening snow vehicles by installing GPS receivers on board so that they can act with more coordination, effi ciently and timely; extending the Isoradio coverage and improving scheduled programmes in general; reviewing the content of the variable message signs; strengthening the call center; implementing an information campaign on winter road conditions; reaching an agreement with the consumers association Intesa Consumatori for shared safety initiatives.

21 20 REPORT ON THE FIRST QUARTER OF UPGRADING AND MODERNISING THE NETWORK The investment plan of the Autostrade Group aims to alleviate the bottlenecks on the network, especially on the main national routes. The plan, based on the Agreement of 1997 and the Addendum of 2002 (effective May 2004) between Autostrade per l Italia and ANAS, and the commitments under the agreements made by the other Group concession-holders amounted to more than 10 billion. In spite of Autostrade per l Italia s dedicated and constant planning and organisation efforts and the prompt attention given by ANAS to the projects, delays in the complicated authorisation procedures for many projects and the present tender regulatory framework have caused, and continue to cause, delays in the start-up and progress of works established in the 1997 Agreement between Autostrade per l Italia and ANAS. During the fi rst quarter of 2005, as regards works assigned, Autostrade per l Italia delivered to the assignees Lots of the Bologna Beltway amounting to 171 million. In April Lots 5A and 5B of the section La Quercia-Badia Nuova were assigned on an integrated contract and Lots of the Firenze Nord-Firenze Sud section were assigned on a traditional contract. As regards the new investments under the Fourth Addendum to the 1997 Agreement which was approved in 2004, on 29 March 2005 a fi rst section of the new Milan Trade Fair Area was opened. The work is expected to be completed by September The overall cost of the work is estimated at 58 million. In January 2005 the works for Lots 1 and 3 of the 4th lane of the Milan-Bergamo motorway were awarded, and Lot 2 had already been delivered during The entire section is 35 km long and the overall cost, as established under the Fourth Addendum, is 308 million. As regards the extension to 3 lanes of the A14 motorway in the Rimini Nord Pedaso section, in the fi rst quarter ANAS has submitted a preliminary technical approval on the fi nal road designs and required Autostrade per l Italia to make some amendments. SPEA, the Group company in charge of the engineering, is currently completing the fi nal designs including ANAS requirements regarding motorways and the local entities requirements regarding the improvement of connections with the local road network.

22 DIRECTORS OBSERVATIONS 21 Regarding the widening of the Fiano Rome Ring Road section and of the Lainate Como section, ANAS expressed its positive opinion on the project (technical approval) and required certain actions. Autostrade per l Italia started the updating of the designs. As regards the Genoa Area Network, the original design was reviewed by a Technical Committee created to that end by the Liguria Region, the Province of Genoa, the Municipality of Genoa, the Genoa Harbour Master, ANAS and Autostrade per l Italia. At the moment there is a summary project, which has not been completely fi nalised and shared by all the parties involved, partly because its cost is far higher than estimated in the Financial Plan Autostrade per l Italia has submitted the matter to ANAS and is awaiting for it to state its offi cial position. As part of the Group network modernisation plan, works to extend to three lanes the Naples-Pompeii-Salerno motorway continued in the period (between km and km ). Works were also carried out on the new Portici-Ercolano exit and the reconstruction of the Torre Annunziata Sud exit, which was opened on 23 March As regard the other works, tender procedures started for the awarding of the Angri exit and for the expropriation of the stretch between km and Km The other Group concession-holders continued to work on lot 2 of the fi nal section of the Aosta-Monte Bianco motorway. Functional upgrading works at the Corso Malta station in the Naples Beltway and safety improvements works along the Torino-Savona motorway also continued. On the Strada dei Parchi, works were carried on for the completion of the section between the Roma est tollbooth station and the city of Rome, and of the second carriageway of the Villa Vomano-Teramo section. During the fi rst three months of 2005 there were no notable events aimed at constructing or operating on a concession basis new toll motorway segments. The 6 new enterprises the Group is taking part in, namely Pedemontana Lombarda and Autostrade Lombarde (concession-holders), Tangenziali Esterne di Milano, Pedemontana Veneta, a joint-venture for the Prato-Signa link road and Arcea Lazio (State- and privateowned), are going on in accordance with the procedures established by the relevant laws.

23 22 REPORT ON THE FIRST QUARTER OF CORE BUSINESS SERVICES SERVICE AREAS On 8 April 2005 Autostrade per l Italia completed the third stage of the process for assigning sub-concessions in Group service areas through competitive tender procedures. After two phases of tender procedures (the fi rst one - from May 2002 to April 2003 was awarded to KPMG Business Advisory Services and the second one was awarded to Roland Berger Strategy Consultants from July 2003 to April 2004), there now is a third phase concerning 18 competitive tenders which were voided following a suit against a Competition Authority s ruling of 30 September 2004 regarding 18 catering services. Earnings from new tender procedures were in line with earnings from former competitive tenders and the corporate goals set. Overall, in the fi rst quarter sales of fuels in service areas declined over the year-earlier period whereas sales of catering services increased. More specifi cally, sales of fuels dropped by 4% and non-oil services rose by + 1.4%. These fi gures were also affected by the extra day in 2004 (leap year) and Easter 2005 falling in March, earlier than in 2004, when it fell in April. Royalties pertaining to the period amounted to 39.7 million, including 1.1 million of one-off royalties for new concessions. The increase in current royalties over 2004 is some 42%, due to almost all of the new concessions having started operations compared with the same period of The tender procedures launched caused notable disputes which at the end of 2004 numbered 181 appeals (175 appeals fi led before the Administrative Court of the Region of Lazio and 6 emergency proceedings fi led before the Court of Appeal of Milan and Rome) on several grounds (such as how tenders were organised, Advisor s decisions on admission requirements and tender valuation, etc.). At the moment 79 administrative appeals are pending (mostly from fuel services) as out-of-court settlements were reached in 2004 with several catering companies, which drastically decreased the number of outstanding appeals. As tender procedures were being carried out and operators were turned over, during the fi rst period of 2005 Autostrade per l Italia and new concession-holders started 17 rehabilitation works as part of the multi-annual plan for improving service areas along the operated network. Investments of more than 800 million are estimated to be made within in connection with this plan.

24 DIRECTORS OBSERVATIONS ADVANCED MOBILITY AND COMMUNICATION SERVICES Infoblu Infoblu is the Group company which provides motorists with information services on the road. During the fi rst quarter of 2005 the technical and commercial activity continued and helped develop an offer to supply high added value services able to deliver technological solutions to satisfy the diverse mobility service requirements. With regard to the relations with telephone operators the following should be noted: Infoinviaggio was extended to number 412 and the fi rst motorway CCTV to be watched on video portals with mobile phones was set up with TIM; like for Infoinviaggio, a service was set up in cooperation with Seat Pagine Gialle (number ). In the UMTS sector, a new added value channel is being developed with H3G for customised services. This is going to be launched for the summer of With regard to radio and TV broadcasters, in the fi rst quarter of 2005 an agreement was signed with RTL for an experimental service for digital radio DAB. Figures for the period show a turnover of 209 thousand ( 184 thousand in the fi rst quarter of 2004) and a net profi t of 3 thousand ( 32 thousand in the fi rst quarter of 2004), due to greater personnel costs incurred to develop the company business. TowerCo TowerCo S.p.A. is the Group company in charge of the value enhancement for facilities and areas suitable to host telecom operator facilities. Technical and commercial activities continued in the fi rst quarter of At the end of March 2005 total Tower sites ordered by Mobile Operators amounted to 165, a co-siting rate of an average 1.5 operators per site. At the end of the period 82 Tower sites were completed, 24 were under construction or works were about to start; 60 were awaiting permits or design completion. With regard to earnings for the fi rst quarter of 2005, turnover amounted to 1,562 thousand ( 716 thousand in the year-earlier period) and net profi t was 490 thousand ( 202 thousand in the fi rst quarter of 2004). AD Moving AD Moving is active from 1 January 2005 and is held by Autostrade per l Italia (75%) and Clear Channel Jolly Pubblicità (25%). In the fi rst quarter of 2005 the Company started the sale of advertising spaces along the Autostrade per l Italia network, formalised the fi rst agreements which aim at expanding the business of other Group concessionholders to include the motorway network, with Società Autostrade Tirrenica Spa, Tangenziale di Napoli Spa and Autostrada Torino-Savona Spa. AD Moving also started negotiations with other Italian motorway companies and other mobility facilities operators (ports and airports) in order to pursue the implementation of business, in line with the provisions of the Company s by-laws. The fi rst quarter, affected by the winter season which typically generates lower turnover, show revenues of 3,400 thousand and a net profi t of 2 thousand.

25 24 REPORT ON THE FIRST QUARTER OF OTHER ACTIVITIES Europpass With regard to the Group international activities, Europpass in Austria accounted for a large part of earnings for the period. During the fi rst three months of 2005 this company s revenues were 22.6 million ( 22.5 million in the year-earlier period), gross operating margin was 11.9 million ( 8.9 million in the fi rst quarter of 2004) and the net profi t was 2.3 million ( 1.0 million in the fi rst three months of 2004). In November 2004 the Austrian grantor Asfi nag, as envisaged in the operation agreement made in 2002 and in the relevant understandings, told it would exercise its call option to purchase 100% of the Autostrade s equity investment in Europpass. The mediation procedure envisaged in the agreement started accordingly. To exercise the call option, the purchase price of the equity investment in Europpass is to be calculated on the basis of the market value of the company. This is also determined based on specifi c terms and conditions of the operation agreement. The company valuation is still under way.

26 DIRECTORS OBSERVATIONS 25 Impregilo On 20 March 2005 Autostrade per l Italia, with TeSir S.r.l. (Techint Group), Argo Finanziaria S.p.A. (Gavio Group) and Efi banca S.p.A., signed with Gemina S.p.A., the majority shareholder of Impregilo S.p.A., an agreement for subscribing the share capital of Impregilo S.p.A. through a soon-to-be-established company, with the aim of strengthening the company strategically. On 8 April 2005 IGLI S.p.A. was formed, a company owned by Autostrade per l Italia S.p.A. (20%), TeSir S.r.l. (Techint Group) (30%), Argo Finanziaria S.p.A. (Gavio Group) (30%) and Efi banca S.p.A. (20%). On 14 April 2005, IGLI S.p.A. signed an agreement with Gemina S.p.A., the majority shareholder of Impregilo S.p.A., for the terms and conditions of IGLI subscribing the share capital of Impregilo. The performance of the agreement is conditional on some conditions precedent to occur within 31 July These include the authorisation from the Competition Authority and loans granted to the Impregilo Group. The agreement between IGLI and Gemina provides that within 20 May 2005 the Shareholders in the Extraordinary Meeting resolve upon a share capital increase of Impregilo of 650 million. IGLI will purchase from Gemina a number of option rights under which IGLI may subscribe a part of the share capital increase. After the share capital increase, IGLI will hold 12.54% of the share capital of Impregilo. To purchase the option rights and to subscribe the share capital increase, IGLI will invest a maximum of 115 million (which to Autostrade per l Italia is a pro rata investment of 23 million). Gemina will subscribe a part of the share capital increase. After the share capital increase, Gemina will hold 11.78% of the share capital of Impregilo. Gemina and IGLI also agreed to subscribe the shares of the increase for which no option rights were exercised for a further maximum amount of 44 million. It is understood that, after these shares are subscribed, IGLI s shares in Impregilo will not exceed 15.38%, Gemina s shares in Impregilo will not exceed 14.46% and IGLI s and Gemina s total equity investment in Impregilo will not exceed 29.9% of the shares capital of Impregilo. A pool of banks has guaranteed they will subscribe the remaining shares, if any, to be used for the capital increase and for which no option shares have been exercised by separate agreements.

27 26 REPORT ON THE FIRST QUARTER OF HUMAN RESOURCES At 31 March 2005, the Autostrade Group workforce on an open-end contract amounted to 9,100 employees, a decrease of 35 from the end of The average number of the Group fell from 9,164 in the fi rst quarter of 2004 to 9,107 in the fi rst quarter of Title 31 March December 2004 Absolute change Percentage change Autostrade Group Permanent staff Managers Office workers 3,831 3, Manual workers 1,457 1,472 (15) Toll collectors 3,649 3,679 (30) TOTAL 9,100 9,135 (35) Title Q Q Absolute change Percentage change Autostrade Group Average workforce Managers Office workers 3,880 3, Manual workers 1,501 1, Toll collectors 3,561 3,741 (180) TOTAL 9,107 9,164 (57) -0.62

28 DIRECTORS OBSERVATIONS 27 As regards changes in average workforce in the fi rst quarter of 2005 over the fi rst quarter of 2004: the increase in the number of offi ce workers between the end of March 2005 and the end of March 2004 (+116 employees) is mainly due to increases in the average workforce of Spea (+47 employees) and Pavimental (+53 employees), and in the usual average workforce of other companies the decrease in toll collectors (-180 employees) mainly relates to Autostrade per l Italia and Strada dei Parchi, -139 and -32 average employees respectively.

29 28 REPORT ON THE FIRST QUARTER OF ACCOUNTING STATEMENTS AND NOTES

30 ACCOUNTING STATEMENTS NOTE DI COMMENTO KEY FIGURES OF THE CONSOLIDATED PROFIT AND LOSS ACCOUNT, BALANCE SHEET AND CASH FLOW STATEMENT OVERVIEW OF GROUP PROFIT AND LOSS ACCOUNT Consolidated Revenues for the fi rst quarter of 2005 amounted to 649,9 million and increased by 32,9 million (+5.3%) from the year-earlier period ( 617,0 million). Net revenues from tolls of million grew by 26.5 million (+5.1%) due to toll increases charged by the Group concession-holders and the increase in traffi c on the operated network (+0.5%). More specifi cally, toll charges increase after the fi rst quarter of 2004 include those applied by Autostrade per l Italia for toll charges adjustments for 2004 in force from 1 July 2004 (+2.26%) rather than at the start of the year as usual, and toll charges adjustments for 2005, in force from 1 January 2005 (+2.68%). Other revenues from sales and services, amounting to million, increased by 6.5 million (+6.7%) from the fi rst quarter of 2004 ( 97.5 million). The rise was mainly the result of higher revenues from advertising, partly in connection with the business start-up from the end of 2004, of the subsidiary AD Moving, of the sales of technological equipment and services rendered to third parties. Sales in service areas from royalties amounted to 39.7 million, an increase from the fi rst quarter of 2004 ( 38.9 million), despite lower revenues from concession-holders as one-off royalties of 10.6 million. Other revenues and income of 3.7 million increased by 1.9 million from the year-earlier period ( 1.8 million) mainly due to the sale of technological equipment and repayments from third parties. Change in contract work in process had a negative balance of 1.5 million compared with the positive balance of 0.4 million in the corresponding period of 2004, due to the balance of works made and works delivered to third parties. External costs of production amounted to million, up 6.8 million (+5.9%) from the fi rst quarter of 2004 ( million). This change mainly relates to higher maintenance costs incurred in the period (+ 6.8 million), because of bad weather conditions in the fi rst quarter of 2005 and greater paving works. Other costs and balance of gains/losses were negative in 4.0 million (- 5.5 million on the fi rst quarter of 2004) and accounted for 0.6% of revenues. Net personnel costs amounted to million, a decrease of 0.6 million (-0.5%) from the corresponding period of 2004 ( million). Their incidence on revenues fell from 20.1% to 19.0%. The Group average workforce fell by 58 (-0.6%) over the fi rst quarter of The portion of Capitalised personnel for the period in order to realise fi xed assets within the Group amounted to 7.8 million and increased by 2.8 million from the fi rst quarter of 2004 ( 5.0 million) as a result of greater investment made with the support of Group companies.

31 30 REPORT ON THE FIRST QUARTER OF 2005 Gross operating margin (EBITDA) amounted to 408,3 million, an increase of 31,0 million from the fi rst quarter of 2004 (+8.2%). It accounted for 62.8% of revenues, an increase from 61.2% in the corresponding period of Amortisation and depreciation and Provisions rose by 11.3 million (+6.1%) from million in the fi rst quarter of 2004 to million in 2005, mainly due to greater amortisation and depreciation (+ 7.4 million, +5.0%). Amortisation/depreciation for the fi rst quarter of 2005 amounted to million ( million in the fi rst quarter of 2004) and included Financial and industrial depreciation of assets to be relinquished ( 58.2 million) and Amortisation of goodwill arising on consolidation ( 78.2 million). Other adjustments amounted to 6.1 million and increased by 1.1 million (+23.7%) from the year-earlier period ( 5.0 million). They mainly relate to the provision for bad debts. Provisions for liabilities and charges amounted to 36.1 million and increased by 2.7 million (+8.0%) from the year-earlier period ( 33,4 million). They mainly include: accruals made (net of uses) to the provisions for costs of restoration and replacement of assets to be relinquished ( 32.7 million, 32.1 million in the fi rst quarter of 2004), the most signifi cant net amount relates to the sums due by Autostrade per l Italia ( 31.0 million) in connection with obligations under the agreement; accruals of 3.4 million ( 1.3 million in the fi rst quarter of 2004) for the long-term incentive plan for the Group s top managers, which had not been determined in the fi rst quarter of 2004, and accruals for greater revenues from variable X of the subsidiary Società Autostrade Meridionali. Operating profi t (EBIT) amounted to million and increased by 19.7 million (+10.3%) from the year-earlier period ( 191,6 million). Its incidence on revenues was 32.5% compared with 31.0% of the corresponding period of Financial income and charges were negative in million compared with million in the fi rst quarter of The increase in net fi nancial charges (+ 3.2 million) is due to the growth in average debt in the fi rst quarter of 2005 compared with the corresponding period of 2004.

32 ACCOUNTING STATEMENTS AND NOTES 31 Capitalised fi nancial charges of 5.2 million increased by 4.0 million from the year-earlier period ( 1.2 million). The increase is due to the gradual increase in payments to suppliers of investing activities. Adjustments to assets/sale of equity investments amounted to 1.6 million, a decrease of 0.2 million from 2004 ( 1.8 million). As in the fi rst quarter of 2004, these mainly relate to the write-down of interest on the medium/long-term loan granted to the associated MEL. Extraordinary income and charges were negative in 3.5 million compared with the negative fi gure for the fi rst quarter of 2004 ( 4.1 million), an improvement of 0.6 million mainly due to lower charges incurred in the period to encourage Group employees to quit. Profi t before taxes amounted to 99.8 million from 78.4 million in the fi rst quarter of 2004 ( million, +27.3%), an increase that essentially refl ects the net operating income. Income taxes for the period amounted to 61.2 million and increased by 6.4 million (+11.7%) from the yearearlier period ( 54.8 million). Specifi cally, taxes for the period refl ect current taxes of 50.3 million, deferred tax liabilities of 40.8 million and deferred tax assets of 29.9 million. Income taxes for the period are net of the accrued tax liability of 22.9 million arising from the transfer carried out in Net profi t for the period including minority interests totalled 38.6 million, an increase of 15.0 million (+63.4%) from the prior year-earlier period ( 23.6 million). Net loss for the period attributable to minority interests totalled 1.7 million, compared with a net loss for minority interests of 1.9 million in the fi rst quarter of 2004, essentially as a result of the net losses for the period of the subsidiaries Strada dei Parchi and Pavimental, which were partly offset by the net profi t of the subsidiary Società Autostrade Meridionali. Net profi t for the year attributable to the Group amounted to 40.3 million, a rise of 14.7 million (+57.8%) from 25.6 million in the fi rst quarter of 2004.

33 32 REPORT ON THE FIRST QUARTER OF 2005 Q Q Changes Q Q % incidence on revenues Analysis of consolidated profit and loss account (in thousands of euros) Value % Q Q REVENUES Ner revenues from tolls 543, ,180 26, % 83.7% 83.8% Other revenues from sales and services 104,015 97,503 6, % 16.0% 15.8% Other revenues and income 3,717 1,824 1, % 0.6% 0.3% Change in contract work in process (1,516) 449 (1,965) % -0.2% 0.1% TOTAL REVENUES 649, ,956 32, % 100.0% 100.0% External costs of production (1) (2) (3) (122,141) (115,293) (6,848) 5.9% 18.8% 18.7% Other costs and balance of gains/losses (4,006) (5,522) 1, % 0.6% 0.9% ADDED VALUE 523, ,141 27, % 80.6% 80.4% Net personnel costs (1) (3) (123,180) (123,811) % 19.0% 20.1% Capitalised personnel (3) 7,775 4,967 2, % 1.2% 0.8% GROSS OPERATING MARGIN (EBITDA) 408, ,297 31, % 62.8% 61.2% Amortisation/depreciation (154,728) (147,318) (7,410) 5.0% 23.8% 23.9% Other adjustments (6,150) (4,970) (1,180) 23.7% 0.9% 0.8% Provisions for liabilities and charges (36,138) (33,446) (2,692) 8.0% 5.6% 5.4% OPERATING PROFIT/LOSS (EBIT) 211, ,563 19, % 32.5% 31.0% Financial income and charges (111,577) (108,402) (3,175) 2.9% 17.2% 17.6% Capitalised financial charges 5,227 1,221 4, % 0.8% 0.2% Adjustments to assets/sale of equity investments (1,581) (1,793) % 0.2% 0.3% PROFIT BEFORE EXTRAORDINARY ITEMS AND TAXES 103,359 82,589 20, % 15.9% 13.4% Extraordinary income and charges (3,515) (4,146) % 0.5% 0.7% PROFIT (LOSS) BEFORE TAXES 99,844 78,443 21, % 15.4% 12.7% Income taxes for the period (61,247) (54,818) (6,429) 11.7% 9.4% 8.9% NET PROFIT FOR THE PERIOD INCLUDING MINORITY INTERESTS 38,597 23,625 14, % 5.9% 3.8% Net (profit)/loss for the period attributable to minority interests 1,662 1,892 (230) -12.2% 0.3% 0.3% NET PROFIT FOR THE PERIOD (attributable to the Parent Company) 40,259 25,517 14, % 6.2% 4.1% (1) Net of recovery of costs (2) Net of capitalised amounts (3) In comparison with figures published earlier, some items of Q have changed due to Capitalised personnel

34 ACCOUNTING STATEMENTS AND NOTES CONSOLIDATED BALANCE SHEET OVERVIEW Fixed assets, net of accumulated amortisation/depreciation, amounted to 11,319.4 million ( 11,358.5 million at 31 December 2004). Intangible assets, totalling 4,307.9 million ( 4,394.3 million at 31 December 2004), mainly include goodwill arising on consolidation of 3,988.8 million at 31 March The fall of 86.4 million from 31 December 2004 was largely the result of amortisation for the period of 90.4 million (of which 78.2 million relates to amortisation of goodwill arising on consolidation), which exceeded investments made in the fi rst quarter, totalling 4.1 million. Tangible assets, which totalled 6,866.7 million ( 6,818.3 million at 31 December 2004), were mainly made up of assets to be relinquished ( 5,723.8 million) and assets under construction, essentially consisting of motorways under construction of 1,010.0 million. The increase on 31 December 2004 ( million) is the result of investments made in the fi rst quarter of 2004 ( million, of which million by Autostrade per l Italia), and 64.3 million in depreciation for the period and 29.7 million of grants on investments received during the period by the subsidiary RAV (Raccordo Autostradale della Valle d Aosta). Financial assets amounted to million, net of fi xed fi nancial receivables, a decrease of 1.2 million compared with the balance at the end of 2004 ( million). The balance at 31 March 2005 includes 1.1 million of equity investments in unconsolidated subsidiaries (which fell by 1.0 million due to the inclusion of the subsidiary Port Mobility in the scope of consolidation), 47.3 million of equity investments in associated companies (including the equity investment in Autostrade Lombarde, 35.5%, totalling 33.9 million), 47.2 million of equity investments in other companies (including the equity investments in Autostrade del Brennero, 5.51%, totalling 18.7 million, and in Autovie Venete, 4.29%, totalling 17.7 million), 31.8 million of payments for equity investments to Sitech S.p.A. in liquidation and 17.4 million of accounts receivable from others, which mainly include receivables from the Government and the tax advance on employee severance indemnity and multi-annual loans given to employees.

35 34 REPORT ON THE FIRST QUARTER OF 2005 Working capital totalled million compared with million at the end of 2004, a decrease of 57.6 million mainly due to the provision for income taxes for the period and similar provisions accrued at 31 December 2004 and not paid at 31 March Working capital breaks down as follows: Inventories of million ( million at 31 December 2004), of which million for contract work in process ( million at 31 December 2004) and 41.3 million for raw materials, supplies and consumable stores ( 39.9 million at 31 December 2004); Trade accounts receivable of million ( million at 31 December 2004), most of which consist of deferred toll payments, including accounts receivable from customers relating to other connected motorway companies operating in Italy, as well as receivables from service areas sub-concession-holders; the decrease of 23.7 million on the total for 31 December 2004 derives from the collection of receivables from the operation of service areas; Other assets of 1,759.5 million ( 1,726.7 million at 31 December 2004) mainly regard deferred tax assets ( 1,538.4 million) for the residual amount in respect of the tax on capital gains made in 2003 following the asset transfer ( 1,169.5 million), and from advance taxes paid on provisions with deferred deductibility, as well as on tax losses usable in the future (for a total of million). The increase of 32.9 million from 31 December 2004 is the result of a rise in accounts receivable from others ( 27.3 million), which include an advance of 13.5 million for the donation made by the subsidiary Traforo per il Monte Bianco to the Solidarity Fund for the families of fatalities, tax assets of 10.9 million and deferred tax assets of 6.1 million, partly offset by the sale of the subsidiary Saba Italia, which was reported at 31 December 2004 for an amount of 11.0 million; Trade accounts payable of million, down 42.1 million with respect to the total of million at 31 December The item consists mainly of suppliers of million and accounts payable in respect of advances from customers of 83.9 million; the decrease for the period mainly reflects the balance of payments made in the period, relating to investments made later in 2004, and accounts payable for investments made in the period; Provisions for short-term liabilities and charges of million, an increase of 81.0 million compared to the total at 31 December 2004 ( million). The difference consists of 79.2 million from the increase in provisions for taxes, including deferred taxes, which at 31 March 2005 also include the amount to cover income taxes for the period and the provision for deferred taxes; Other liabilities of million, up 27.7 million compared with 31 December 2004 ( million ) due to a rise in accounts payable to interconnected motorway companies linked to an increase in turnover. This item includes: tax liabilities of million (including payments to be paid to Schemaventotto as part of the consolidated taxation mechanism); accounts payable of 25.5 million to social security institutions; sundry accounts payable of million, consisting mainly of interconnected companies and accrued non-financial liabilities and deferred income of 55.6 million. Total Provisions for medium/long-term liabilities and charges came to 1,573.4 million ( 1,539.2 million at 31 December 2004), and consist mainly of the Provision for costs of restoration and replacement of assets to be relinquished (1,358.6 million), up 32.8 million compared with 31 December 2004, mainly ascribable to the subsidiary Autostrade per l Italia, and the Employee severance indemnity, which totalled million.

36 ACCOUNTING STATEMENTS AND NOTES 35 Capital employed, less current liabilities and the provisions for medium/long-term liabilities and charges, totalled 10,659.8 million ( 10,790.7 million at 31 December 2004). Shareholders equity of the Group and minority interests amounted to 1,866.1 million ( 1,825.0 million at 31 December 2004) and accounted for 17.5% of Capital Employed. Shareholders equity - Group totalled 1,469.4 million (13.8% of Capital Employed), an increase of 40.3 million with respect to 31 December 2004, which is the net profi t attributable to the Group. Net fi nancial debt at period-end was 8,793.7 million ( 8,182.3 million at 31 March 2004), a decrease of million on the corresponding total at 31 December 2004 ( 8,965.8 million). Net medium/long-term fi nancial debt, amounting to 9,399.5 million (including the short-term component of medium/long-term debt) was made up of: a) four bonded loans issued by the Parent Company for a total of 6,500.0 million, of which one originally issued in British pounds and whose exchange rate risk was covered at the beginning, and a Term Loan Facility amounting to million, also taken out by the Parent Company; b) million in bank loans made to Autostrade per l Italia, including million of loans that ANAS will repay directly using the grants provided in accordance with specifi c legislation (Laws 662/1996 and 345/1997) for the funding of motorway infrastructures. The decrease of 36.3 million refl ects the repayment of instalments due in the period; c) million in loans to Strada dei Parchi (of which payable to ANAS), which decreased in the period for payments totalling 57.9 million; d) million in Europpass residual bank debt; e) million in loans to Società Autostrada Tirrenica and Tangenziale di Napoli from the Central Guarantee Fund; f) million in loans to other Group companies; g) fi nancing of 52.0 million relating to the loan made by Autostrade Participations to M.E.L., a UK-based associated company. The Net short-term fi nancial debt was positive in the amount of million, the net result of: cash and cash equivalents and short-term fi nancial receivables ( 1,416.8 million), which include pledged deposits of million ( million at 31 December 2004), relating for the most part to government grants (Laws 662/1996 and 345/1997) that are drawn down as works advance, unpledged deposits of million, cheques and cash on hand of 20.6 million and other short-term fi nancial assets of 39.6 million; short-term fi nancial debt ( million), consisting of debts to ANAS of million ( at 31 December 2004), relating mostly to instalment payments of the loan granted to Autostrade per l Italia and Autostrada Torino-Savona for fi nancing works envisaged in their respective Agreements which are still to be carried out, and short-term credit facilities drawn down of million and other short-term fi nancial debt of 29.7 million mainly to unconsolidated subsidiary Sitech in liquidation ( 27.8 million); net accrued fi nancial liabilities, which were negative in million, and are mostly composed of fi nancial charges accrued in the period on the Group s medium/long-term debt.

37 36 REPORT ON THE FIRST QUARTER OF Mar Dec-04 Change Analysis of Group net financial debt (thousands of euros) MEDIUM/LONG-TERM FINANCIAL DEBT Bonds 6,442,120 6,459,165 (17,045) Amounts due to banks 2,161,306 2,193,413 (32,107) Amounts due to other lenders 848, ,905 (55,860) 9,451,471 9,556,483 (105,012) MEDIUM/LONG-TERM FINANCIAL RECEIVABLES Accounts receivable from associated companies under financial assets ,004 0 MEDIUM/LONG-TERM FINANCIAL DEBT 9,339,467 9,504,479 (105,012) Short-term financial debt Amounts due to banks 232,850 99, ,049 Amounts due to unconsolidated subsidiaries 27,749 28,571 (822) Amounts due to associated companies 2,003 2,003 0 Others (ANAS) 335, ,970 3,067 CASH AND CASH EQUIVALENTS AND SHORT-TERM FINANCIAL RECEIVABLES 597, , ,294 Accounts receivable from unconsolidated subsidiaries Accounts receivable from associated companies 1,556 1, Accounts receivable from others 25,482 25,482 0 Other securities 11,912 11,929 (17) Pledged deposits 921, , Unpledged deposits 435, , ,111 Cash and cash equivalents on hand 20,588 22,330 (1,742) 1,416,815 1,149, ,740 Net accrued financial liabilities 213, ,024 65,353 NET SHORT-TERM FINANCIAL DEBT (NET LIQUIDITY) (605,799) (538,706) (67,093) TOTAL NET DEBT 8,793,668 8,965,773 (172,105)