36 Shareholders’ equity
Non-controlling interest
| Net profit | Shareholders’ equity | |||||||||||||||
| (€ million) | 2017 | 2016 |
December 31, 2017 |
December 31, 2016 | ||||||||||||
| EniPower Mantova SpA | 4 | 5 | 23 | 21 | ||||||||||||
| Adriaplin Doo | 2 | 2 | 14 | 13 | ||||||||||||
| Serfactoring SpA | (3 | ) | 12 | 15 | ||||||||||||
| 3 | 7 | 49 | 49 | |||||||||||||
Eni shareholders’ equity
| (€ million) | December 31, 2017 | December 31, 2016 | ||||||
| Share capital | 4,005 | 4,005 | ||||||
| Legal reserve | 959 | 959 | ||||||
| Reserve for treasury shares | 581 | 581 | ||||||
| Reserve related to the fair value of cash flow hedging derivatives net of the tax effect | 183 | 189 | ||||||
| Reserve related to the fair value of available-for-sale securities net of the tax effect | 4 | |||||||
| Reserve related to the defined benefit plans net of tax effect | (114 | ) | (112 | ) | ||||
| Other reserves | 280 | 211 | ||||||
| Cumulative currency translation differences | 4,818 | 10,319 | ||||||
| Treasury shares | (581 | ) | (581 | ) | ||||
| Retained earnings | 35,966 | 40,367 | ||||||
| Interim dividend | (1,441 | ) | (1,441 | ) | ||||
| Net profit (loss) for the year | 3,374 | (1,464 | ) | |||||
| 48,030 | 53,037 | |||||||
Share capital
As of December 31, 2017, the parent company’s issued share capital consisted of €4,005,358,876 represented by 3,634,185,330 ordinary shares without nominal value (same amounts as of December 31, 2016).
On April 13, 2017, Eni’s Shareholders’ Meeting resolved the distribution of a dividend of €0.40 per share, with the exclusion of treasury shares held at the ex-dividend date, in full settlement of the 2016 dividend of €0.80 per share, of which €0.40 per share paid as interim dividend in September 2016.
Legal reserve
This reserve represents earnings restricted from the payment of dividends pursuant to Article 2430 of the Italian Civil Code. The legal reserve has reached the maximum amount required by the Italian Law.
Reserve for treasury shares
The reserve for treasury shares of €581 million (same amount as of December 31, 2016) represents the reserve that was established in previous reporting period to repurchase the Company shares in accordance with resolutions at Eni’s Shareholders’ Meetings.
Reserves related to the fair value measurement of cash flow hedging derivatives, available-for-sale financial assets and defined benefit plans
The reserves related to the valuation at fair value of cash flow hedging derivatives, available-for-sale financial instruments and defined benefit plans, net of the related tax effect, consisted of the following:
| Cash flow hedge derivatives |
Available-for-sale financial instruments |
Defined benefit plans | Total | |||||||||||||||||||||||||||||||||||||||||||||
| (€ million) |
Gross reserve |
Deferred tax liabilities |
Net reserve |
Gross reserve |
Deferred tax liabilities |
Net reserve |
Gross reserve |
Deferred tax liabilities |
Net reserve |
Gross reserve |
Deferred tax liabilities |
Net reserve | ||||||||||||||||||||||||||||||||||||
| Reserve as of December 31, 2016 | 246 | (57 | ) | 189 | 5 | (1 | ) | 4 | (99 | ) | (13 | ) | (112 | ) | 152 | (71 | ) | 81 | ||||||||||||||||||||||||||||||
| Changes of the year 2017 | (59 | ) | 14 | (45 | ) | (5 | ) | 1 | (4 | ) | (33 | ) | 29 | (4 | ) | (97 | ) | 44 | (53 | ) | ||||||||||||||||||||||||||||
| Foreign currency translation differences | (1 | ) | 3 | 2 | (1 | ) | 3 | 2 | ||||||||||||||||||||||||||||||||||||||||
| Reversal of the year 2017 | 53 | (14 | ) | 39 | 53 | (14 | ) | 39 | ||||||||||||||||||||||||||||||||||||||||
| Reserve as of December 31, 2017 | 240 | (57 | ) | 183 | (133 | ) | 19 | (114 | ) | 107 | (38 | ) | 69 | |||||||||||||||||||||||||||||||||||
| Reserve as of December 31, 2015 | (637 | ) | 163 | (474 | ) | 9 | (1 | ) | 8 | (111 | ) | 10 | (101 | ) | (739 | ) | 172 | (567 | ) | |||||||||||||||||||||||||||||
| Changes of the year 2016 | 360 | (90 | ) | 270 | (3 | ) | (3 | ) | 16 | (35 | ) | (19 | ) | 373 | (125 | ) | 248 | |||||||||||||||||||||||||||||||
| Foreign currency translation differences | (4 | ) | 12 | 8 | (4 | ) | 12 | 8 | ||||||||||||||||||||||||||||||||||||||||
| Reversal of the year 2016 | 523 | (130 | ) | 393 | (1 | ) | (1 | ) | 522 | (130 | ) | 392 | ||||||||||||||||||||||||||||||||||||
| Reserve as of December 31, 2016 | 246 | (57 | ) | 189 | 5 | (1 | ) | 4 | (99 | ) | (13 | ) | (112 | ) | 152 | (71 | ) | 81 | ||||||||||||||||||||||||||||||
Other reserves
Other reserves amounting to €280 million (€211 million at December 31, 2016) related to:
| • | a reserve of €247 million representing the increase in Eni shareholders’ equity associated with a business combination under common control, whereby the parent company Eni SpA divested its subsidiary Snamprogetti SpA to Saipem Projects SpA (both merged into Saipem SpA) at a price higher than the book value of the interest transferred (same amount as of December 31, 2016); |
| • | a reserve of €63 million deriving from Eni SpA’s equity (same amount as of December 31, 2016); |
| • | a reserve of €90 million relating to the share of “Other comprehensive income” on equity accounted entities (€21 million at December 31, 2016); |
| • | a reserve of €4 million representing the impact on Eni shareholders’ equity associated with the acquisition of a non-controlling interest of 48.55% in the subsidiary Tigáz Zrt (same amount as of December 31, 2016); |
| • | a negative reserve of €124 million representing the impact on Eni shareholders’ equity associated with the acquisition of a non-controlling interest of 45.99% in the subsidiary Altergaz SA, now Eni Gas & Power France SA (same amount as of December 31, 2016). |
Cumulative foreign currency translation differences
The cumulative foreign currency translation differences arose from the translation of financial statements denominated in currencies other than euro.
Treasury shares
A total of 33,045,197 Eni’s ordinary shares (same amount as of December 31, 2016) were held in treasury for a total cost of €581 million (same amount as of December 31, 2016).
Interim dividend
The interim dividend for the year 2017 amounted to €1,441 million corresponding to €0.40 per share, as resolved by the Board of Directors on September 14, 2017, in accordance with Article 2433-bis, paragraph 5 of the Italian Civil Code; the dividend was paid on September 20, 2017.
Distributable reserves
As of December 31, 2017, Eni shareholders’ equity included distributable reserves of approximately €43.2 billion.
Reconciliation of net profit and shareholders’ equity of the parent company Eni SpA to consolidated net profit and shareholders’ equity
| Net profit | Shareholders’ equity | |||||||||||||||
| (€ million) | 2017 | 2016 |
December 31, 2017 |
December 31, 2016 | ||||||||||||
| As recorded in Eni SpA’s Financial Statements | 3,586 | 4,521 | 42,529 | 41,935 | ||||||||||||
| Excess of net equity stated in the separate accounts of consolidated subsidiaries over the corresponding carrying amounts of the parent company | (466 | ) | (5,480 | ) | 6,110 | 12,384 | ||||||||||
| Consolidation adjustments: | ||||||||||||||||
| - difference between purchase cost and underlying carrying amounts of net equity | (1 | ) | (44 | ) | 145 | 240 | ||||||||||
| - adjustments to comply with Group account policies | 202 | (188 | ) | 719 | 461 | |||||||||||
| - elimination of unrealized intercompany profits | (88 | ) | (56 | ) | (807 | ) | (801 | ) | ||||||||
| - deferred taxation | 144 | (210 | ) | (617 | ) | (1,133 | ) | |||||||||
| 3,377 | (1,457 | ) | 48,079 | 53,086 | ||||||||||||
| Non-controlling interest | (3 | ) | (7 | ) | (49 | ) | (49 | ) | ||||||||
| As recorded in Consolidated Financial Statements | 3,374 | (1,464 | ) | 48,030 | 53,037 | |||||||||||