SEC Form 6-K filed by ENI S.p.A.

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________

Form 6-K

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the month of October 2024

Eni S.p.A.

(Exact name of Registrant as specified in its charter)

Piazzale Enrico Mattei 1 - 00144 Rome, Italy

(Address of principal executive offices)

_________________________

(Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.)

Form 20-F  X    Form 40-F

_________________________

(Indicate by check mark whether the registrant by furnishing the information contained
in this Form is also thereby furnishing the information to the Commission pursuant to
Rule 12g3-2b under the Securities Exchange Act of 1934.)

Yes __  No  X

(If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): ______)

Table of contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorised.

Date: October 25, 2024

Eni signs agreement for KKR to enter Enilive’s share capital

San Donato Milanese (MI), 24 October 2024 – Eni and KKR have signed an agreement under which KKR will take a 25% stake in Enilive’s share capital, for a total agreed consideration of €2.938 billion. The transaction will be funded through: 1) the subscription of a capital increase in Enilive reserved to KKR amounting to €500 million; 2) the purchase of Enilive’s shares from Eni for a value of €2.438 billion, corresponding to a post-money valuation of € 11.75 billion of Equity Value for 100% of Enilive's share capital.

Furthermore, according to the agreement, Eni will undertake a capital increase in Enilive of €500 million prior to the completion of the transaction to set a debt-free company.

The transaction brings together Eni’s proven ability to develop high-growth energy businesses and KKR’s expertise as a long-term investor with a strong track record in the energy and infrastructure sectors, further contributing to the growth of Enilive.

Moreover, the investment enhances Eni’s capital structure, reducing its net financial position while ensuring that Eni retains consolidation and control of Enilive. The transaction represents a significant development of Eni’s satellite model, aimed at creating the conditions for independent growth of high potential businesses, granting the access to new pools of aligned capital and providing visibility into their fair market value. The transaction also confirms the effectiveness of Enilive’s distinctive integrated model and strengthens at the same time its financial structure.

Eni Ceo, Claudio Descalzi, commented: “This agreement marks a significant further step in our business strategy related to the energy transition. Enilive, alongside Plenitude, is central to our commitment to providing decarbonized energy solutions and progressively reducing emissions from the end use of our products. Both companies have attracted significant interest from leading international partners and achieved high market valuations, which indicates that our approach to the energy transition is appreciated. We believe that the right path to successfully address the transition entails the creation of low or zero-carbon businesses that respond to a real and existing demand for energy products and that grow independently thanks to the success of their business models and products. With KKR’s support, Enilive is poised to capitalize on its ambitious growth plans and continue delivering real, scalable energy transition solutions.”.

Closing of the transaction is subject to customary approvals provided by law.

Notes to Editors

Enilive is Eni's company dedicated to biorefining, biomethane production, smart mobility solutions including Enjoy car sharing, and the distribution of all energy carriers for mobility, through its more than 5,000 Enilive Stations in Europe, where there is a wide range of products including HVOlution biogenic fuel (100% Hydrogenated Vegetable Oil), bio-LPG and biomethane. And where several services are also available to support people on the move, including electric recharging and food services such as Eni Café (the largest cafe chain in Italy) and ALT Stazione del Gusto, a new project in partnership with Accademia Niko Romito. Enilive aims to provide progressively decarbonized services and products for the energy transition, contributing to Eni's goal of achieving carbon neutrality by 2050 also through industrial assets that include the Venice and Gela biorefineries, in Italy; the St. Bernard Renewables LLC (50% joint venture with PBF Energy) in Louisiana (United States of America); numerous biogas plants being converted to biomethane production in Italy, as well as new projects: in Livorno, where the third Enilive biorefinery in Italy is under construction, in Malaysia and in South Korea. Enilive plans to increase its biorefining capacity to over 5 million tonnes/year by 2030.

Company Contacts:

Press Office: Tel. +39.0252031875 – +39.0659822030

Freephone for shareholders (from Italy): 800940924

Freephone for shareholders (from abroad): + 80011223456
Switchboard: +39-0659821
[email protected]

[email protected]

[email protected]

Web site: www.eni.com

Eni’s Board of Directors

Approval of the second tranche of the provision in place of 2024 dividend: € 0.25 per share

San Donato Milanese, 24 October 2024 – Eni’s Board of Directors, chaired by Giuseppe Zafarana, today resolved to distribute to Shareholders the second of the four tranches of the provision in place of the 2024 dividend from Eni S.p.A. available reserves¹ of € 0.25 (compared to a total annual provision, in place of the dividend, equal to € 1.00) per share outstanding at the ex-dividend date as of 18 November 2024², payable on 20 November 2024³, as resolved by the Shareholders’ Meeting of 15 May 2024.

Holders of ADRs, outstanding at the record date of 19 November 2024, will receive € 0.50 per ADR, payable on 6 December 2024⁴, with each ADR listed on the New York Stock Exchange representing two Eni shares.

Company Contacts:

Press Office: Tel. +39.0252031875 – +39.0659822030

Freephone for shareholders (from Italy): 800940924

Freephone for shareholders (from abroad): + 80011223456
Switchboard: +39-0659821
[email protected]

[email protected]

[email protected]

Web site: www.eni.com

¹ Coupon No. 48.

² Depending on the recipient’s fiscal status the payment is subject to a withholding tax or is treated in part as taxable income.

³ Pursuant to article 83-terdecies of the Italian Legislative Decree no. 58 of February 24, 1998, the right to receive the payment is determined with reference to the entries on the books of the intermediary – as set out in art. 83-quater, paragraph 3 of the Italian Legislative Decree no. 58 of February 24, 1998 – at the end of the accounting day of 19 November 2024 (record date).

⁴ On ADR payment date, Citibank, N.A. will pay net of the amount of the withholding tax under Italian law applicable to all Depository Trust Company Participants.

Eni: results for the third quarter and nine months of 2024

San Donato Milanese, October 25, 2024 - Eni's Board of Directors, chaired by Giuseppe Zafarana, yesterday approved the unaudited consolidated results for the third quarter and nine months of 2024. Eni CEO Claudio Descalzi said:

“In Q3, by delivering a performance ahead of expectations, we have again demonstrated the resilience of our business model thanks to our increasingly advantaged asset portfolio, stringent cost and capital discipline and strategic focus on growth and value creation. We delivered an excellent cash flow and profitability performance in a less supportive trading environment. Importantly, we maintained leverage at 22%, whilst also speeding up our buyback plans.

We continue to make clear strategic progress across our portfolio. We have increased our upstream production alongside investing for the next phase of growth, including gaining approval for the plan of development on our large Indonesian projects. Our satellite strategy continues to evolve and we are delighted to confirm the €2.9 bln investment by KKR into Enilive, which builds on the transaction concluded at Plenitude earlier in the year and demonstrates our ability to attract investment, confirming the value we are delivering. The creation of our new UK E&P satellite with Ithaca Energy is the next step to support our growth. We remain committed to supporting the energy transition: during the quarter, we advanced two milestone CCS projects of Ravenna in Italy and HyNet in the UK while Plenitude continues to grow renewable capacity and we are now active in building three new biorefineries in Italy, South Korea and Malaysia.

Alongside financial and project delivery we remain focused on portfolio high-grading, highlighting value and maintaining a robust balance sheet. In Upstream we continue our divestment programme and are also in the final stages of evaluating options to monetize recent material discoveries via our dual exploration model. Finally, we are committed to delivering competitive shareholder returns and reflecting our results, strategic progress and the prospects of significant balance sheet de-leveraging, we are pleased to announce an additional increase in the 2024 share buyback to €2 bln.”

Key operating and financial results

(a) Non-GAAP measures. For further information see the paragraph "Non-GAAP measures" on pages 19 and subsequent.

(b) The main JV/associates are listed in the "Reconciliation of Group proforma adjusted EBIT" on page 25.

(c) Attributable to Eni's shareholders.

(d) Net of expenditures relating to business combinations, purchase of minority interests and other non-organic items.

Outlook 2024

E&P results expected to meet expectations, with upside to GGP performance. Transition satellites performing well despite weaker market environment. Underlying financial performance seen as better than previous in a constant environment

- confirmed proforma adjusted EBITDA of approximately €1 bln for each segment despite a lower market environment.

- Installed renewable capacity to reach 4 GW by 2024 year-end (+30% vs the previous year).

Reaffirmed FY Group consolidated results expectations, net of scenario effects, and capex plan guidance

Shareholder Returns: 2024 buyback increased by €0.4 bln. Interim dividend confirmed, up 6% on 2023

Accelerated deleveraging supported by faster pace in disposal plan

The above-described outlook is a forward-looking statement based on information to date and management’s judgement and is subject to the potential risks and uncertainties of the scenario (see our disclaimer on page 18).

² Updated 2024 Scenario is: Brent 83 $/bbl (previously $86/bbl); SERM 4.7 $/bbl from 6.8 $/bbl; PSV 35 €/MWh (vs 33 €/MWh) and average EUR/USD exchange rate at 1.085 (vs 1.075).

³ On an adjusted basis, before working capital changes.

Exploration & Production

Production and prices

Results

For the disclosure on business segment special charges, see “Special items” in the Group results section.

Strategic developments

The 5% participating interest in SPDC (Shell Production Development Company Joint Venture) is not included in the transaction, as it will be retained in Eni’s portfolio. Eni will continue to be present in the Country through investment in deepwater projects and Nigeria LNG, while also exploring new opportunities related to agri-feedstock sector.

Global Gas & LNG Portfolio

Sales

Results

For the disclosure on business segment special charges, see “Special items” in the Group results section.

Strategic developments

Enilive and Plenitude

Production and sales

Enilive

Plenitude

Results

Proforma adjusted Ebitda amounted to €262 mln, down by 27% vs Q3 ’23 (€359 mln); the guidance for the year is approximately €1 bln. In the nine months ’24 reported a proforma adjusted Ebitda of €712 mln, compared to €821 mln in the nine months ’23.

Proforma adjusted Ebitda amounted to €244 mln down by 14% vs Q3 ’23 (€284 mln). In the nine months ’24 reported a proforma adjusted Ebitda of €853 mln, compared to a proforma adjusted Ebitda of €753 mln in the nine months ’23, up by 13%.

Net debt in Plenitude, consolidated into the results of Eni, stood at €1.7 bln (€2.4 bln as of December 31, 2023).

For the disclosure on business segment special charges, see “Special items” in the Group results section.

Strategic developments

Refining, Chemicals and Power

Production and sales

Refining

Chemicals

Power

Results

For the disclosure on business segment special charges, see “Special items” in the Group results section.

Strategic developments

The main achievements of the Group strategy aiming at improving the ESG performance of Eni’s industrial activities have been:

Net borrowings and cash flow from operations

Net cash provided by operating activities in the nine months ’24 was €9,472 mln and included €1,409 mln of dividends distributed from Eni’s investments, mainly Azule Energy, Vår Energi and ADNOC R&GT. It also benefitted of a greater amount of trade receivables divested to financial institutions due in future reporting periods, compared to the fourth quarter ‘23 (up by about €0.4 bln).

Adjusted net cash before changes in working capital at replacement cost was €10,701 mln in the nine months ’24 and was net of the following items: inventory holding gains or losses relating to oil and products, the reversing timing difference between gas inventories accounted at weighted average cost and management’s own measure of performance leveraging inventories to optimize margin, the fair value of commodity derivatives lacking the formal criteria to be designated as hedges or prorated on an accrual basis.

In Q3 ‘24, cash flows relating to movements in the line item “issue of perpetual hybrid bond and interest payment” mainly included issuance of a perpetual subordinated hybrid bond (€1.59 bln) by one of the Group subsidiaries to specifically fund construction of FLNG vessels designated to be utilized on one of the Group’s major projects.  

A reconciliation of adjusted net cash before changes in working capital at replacement cost to net cash provided by operating activities is provided below:

Organic capex was €6.1 bln in the nine months ’24 (down 9.2% y-o-y). Net of organic capex, the free cash flow ante working capital was €4.6 bln.

Cash outflows for acquisitions net of divestments were about €0.6 bln. Acquisitions related to the upstream operator Neptune Energy (€2.3 bln including acquired net debt), Plenitude’s renewable assets, and a service stations network in Spain. Divestments comprised E&P Nigerian onshore assets, the sale of 10% of the share capital of Saipem, production licenses in Congo, as well as the Plenitude capital contribution of €0.6 bln following the finalization of the agreement with the EIP fund who acquired a minority interest (7.6%).

Net financial borrowings before IFRS 16 in the nine months ‘24 increased by around €2 bln due to the adjusted operating cash flow (€10.7 bln), the issuance of a hybrid bond (€1.6 bln) by one of the Group subsidiaries, net of adjusted working capital needs (around €1.3 bln), capex requirements of €6.1 bln, dividend payments to Eni’s shareholders and share repurchases of €3.4 bln (€1.1 bln of share repurchases and €2.3 bln of dividends relating to the third and fourth instalments of the 2023 dividend, and the first tranche of the ‘24 dividend), the net cash outflow related to acquisitions and divestments (€0.6 bln), payables due to suppliers in connection with expenditures to purchase plant and equipment (€1.6 bln) classified as finance debt due to deferral of payments terms, as well as the payment of lease liabilities and hybrid bond interest (€0.9 bln) and other changes (€0.3 bln).

As of October 18, 2024, around 63 mln shares have been purchased, for a cash outlay of €0.9 bln as part of the ‘24 buyback program.

Summarized Group Balance Sheet

As of September 30, 2024, fixed assets (€83.2 bln) increased by €1.3 bln from January 1, 2024, due to capital expenditures and the acquisition of the Neptune Energy Group. These positives were offset by the divestment of Nigerian onshore assets finalized in August ‘24, as well as negative exchange rate translation differences (the period-end exchange rate of EUR vs. USD was 1.120, up 1.3% compared to 1.105 as of December 31, 2023), thus decreasing the book values of dollar-denominated assets, as well as DD&A impairment charges and write-offs.

Shareholders’ equity (€53.5 bln) was substantially unchanged from the end of 2023 due to the net profit for the period (€2.5 bln) and the issuance of a hybrid bond issued by a Group subsidiary (€1.6 bln) offset by shareholders remuneration of €3.4 bln (dividend distribution and share buyback) and negative foreign currency translation differences (about €0.7 bln) reflecting the depreciation of the USD vs. EUR. Non-controlling interests of €2.4 bln included as of September 30, 2024: i) a minority participating interest acquired by a private equity fund in the share capital of Plenitude (€0.4 bln); ii) a perpetual subordinated hybrid bond issued by a Group subsidiary (€1.6 bln) classified as equity since the Group retains an unconditional right to avoid transferring cash or other financial assets to the bondholders.

Net borrowings⁴1F1F before lease liabilities as of September 30, 2024, amounted to €11.6 bln, up by €2.1 bln from January 1, 2024.

Leverage2F2F⁵ – the ratio of net borrowings to total equity before IFRS 16 – was 0.22 on September 30, 2024.

⁴ Details on net borrowings are furnished on page 28.

⁵ Non-GAAP financial measures and other alternative performance indicators disclosed throughout this press release are accompanied by explanatory notes and tables in line with guidance provided by ESMA guidelines on alternative performance measures (ESMA/2015/1415), published on October 5, 2015. For further information, see the section “Non-GAAP measures” of this press release. See pages 19 and subsequent.

Special items

The breakdown of pre-tax special items recorded in operating profit by segment (net charges of €2,618 mln and €651 mln in the nine months and Q3 ’24, respectively) is as follows:

The other special items in the nine months ‘24 related to gains in connection to the divestment of Nigerian onshore assets (€0.4 bln) and the sale of a 10% stake in the equity interests of Eni’s interest in Saipem (€0.2 bln).

Other information, basis of presentation and disclaimer

This press release on Eni’s results for the third quarter and the nine months of 2024 has been prepared on a voluntary basis according to article 82-ter, Regulations on issuers (CONSOB Regulation No. 11971 of May 14, 1999, and subsequent amendments and inclusions). The disclosure of results and business trends on a quarterly basis is consistent with Eni’s policy to provide the market and investors with regular information about the Company’s financial and industrial performances and business prospects considering the reporting policy followed by oil&gas peers who are communicating results on quarterly basis.

Results and cash flow are presented for the second and third quarter of 2024, the nine months of 2024 and for the third quarter and the nine months of 2023. Information on the Company’s financial position relates to end of the periods as of September 30, 2024 and December 31, 2023.

Accounts set forth herein have been prepared in accordance with the evaluation and recognition criteria set by the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and adopted by the European Commission according to the procedure set forth in Article 6 of the European Regulation (CE) No. 1606/2002 of the European Parliament and European Council of July 19, 2002.

These criteria are unchanged from the 2023 Annual Report on Form 20-F filed with the US SEC on April 5, 2024, which investors are urged to read.

From January 1, 2024, the benchmark refining margin “SERM” has been calculated based on a new methodology which considers a revised industrial set-up in connection with the planned restructuring of the Livorno plant and implemented optimizations of utilities consumption, as well as current trends in crude supplies building in a slate of both high-sulfur and low sulfur crudes. The restated values of the SERM indicator of the comparative 2023 quarters and 2024 full-year guidance are provided in the table below.

Basis of presentation

From January 1, 2024, the Eni segment information tracked by the management is articulated as follows:

The aggregation of Enilive (biorefining and retail sale of sustainable mobility products) and Plenitude (retail sale of energy commodities and value added services, production of electricity from renewable sources and management of the network of EV charging stations) in a single reporting segment is motivated by the fact that the two businesses exhibit similar economic characteristics, have a prevalent retail activity as customer-facing segments with a wide range of opportunities for cross-selling, as well as by the common strategic goal to decarbonize customers' CO₂ emissions and the attractiveness of dedicated capital.

The Power business, given its less significant relevance in proportion to the Group's main economic and financial figures, has been aggregated with the operating segments with which it shares industrial similarities.

The re-segmentation of the adjusted operating profit for the comparative periods of 2023 is disclosed below:

For purpose of IFRS statutory financial reporting, Enilive and Plenitude are presented as two separate reportable segment.

As anticipated on page 2, following a Company’s restructuring of key profit responsibilities the current Group segment information will be revised in Q4.

* * *

Non-GAAP financial measures and other alternative performance indicators disclosed throughout this press release are accompanied by explanatory notes and tables in line with guidance provided by ESMA guidelines on alternative performance measures (ESMA/2015/1415), published on October 5, 2015. For further information, see the section “Alternative performance measures (Non-GAAP measures)” of this press release.

The manager responsible for the preparation of the Company’s financial reports, Francesco Esposito, declares pursuant to rule 154-bis paragraph 2 of Legislative Decree No. 58/1998 that data and information disclosed in this press release correspond to the Company’s evidence and accounting books and records.

* * *

Disclaimer

This press release contains certain forward-looking statements particularly those regarding capital expenditure, development and management of oil and gas resources, dividends, share repurchases, allocation of future cash flow from operations, future operating performance, gearing, targets of production and sales growth, new markets and the progress and timing of projects. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future. Actual results may differ from those expressed in such statements, depending on a variety of factors, including the impact of the pandemic disease, the timing of bringing new fields on stream; management’s ability in carrying out industrial plans and in succeeding in commercial transactions; future levels of industry product supply; demand and pricing; operational issues; general economic conditions; political stability and economic growth in relevant areas of the world; changes in laws and governmental regulations; development and use of new technology; changes in public expectations and other changes in business conditions; the actions of competitors and other factors discussed elsewhere in this document. Due to the seasonality in demand for natural gas and certain refined products and the changes in a number of external factors affecting Eni’s operations, such as prices and margins of hydrocarbons and refined products, Eni’s results from operations and changes in net borrowings for the quarter of the year cannot be extrapolated on an annual basis.

Company Contacts

Press Office: Tel. +39.0252031875 - +39.0659822030

Freephone for shareholders (from Italy): 800940924

Freephone for shareholders (from abroad): +80011223456

Switchboard: +39-0659821

[email protected]

[email protected]

[email protected]

website: www.eni.com

Eni

Società per Azioni, Rome, Piazzale Enrico Mattei, 1

Share capital: €4,005,358,876 fully paid.

Tax identification number 00484960588

Tel.: +39 0659821 - Fax: +39 0659822141

This press release for the third quarter and the nine months of 2024 results (not subject to audit) is also available on Eni’s website eni.com.

Management evaluates underlying business performance on the basis of Non-GAAP financial measures, which are not provided by IFRS (“Alternative performance measures”), such as adjusted operating profit, adjusted net profit, which are arrived at by excluding from reported results certain gains and losses, defined special items, which include, among others, asset impairments, including impairments of deferred tax assets, gains on disposals, risk provisions, restructuring charges, the accounting effect of fair-valued derivatives used to hedge exposure to the commodity, exchange rate and interest rate risks, which lack the formal criteria to be accounted as hedges, and analogously evaluation effects of assets and liabilities utilized in a relation of natural hedge of the above mentioned market risks. Furthermore, in determining the business segments’ adjusted results, finance charges on finance debt and interest income are excluded (see below). In determining adjusted results, inventory holding gains or losses are excluded from base business performance, which is the difference between the cost of sales of the volumes sold in the period based on the cost of supplies of the same period and the cost of sales of the volumes sold calculated using the weighted average cost method of inventory accounting as required by IFRS, except in those business segments where inventories are utilized as a lever to optimize margins. Finally, the same special charges/gains are excluded from the Eni’s share of results at JVs and other equity accounted entities, including any profit/loss on inventory holding.

Management is disclosing Non-GAAP measures of performance to facilitate a comparison of base business performance across periods, and to allow financial analysts to evaluate Eni’s trading performance on the basis of their forecasting models.

Non-GAAP financial measures should be read together with information determined by applying IFRS and do not stand in for them. Other companies may adopt different methodologies to determine Non-GAAP measures.

Follows the description of the main alternative performance measures adopted by Eni. The measures reported below refer to the performance of the reporting periods disclosed in this press release:

Adjusted operating and net profit

Adjusted operating profit and adjusted net profit are determined by excluding inventory holding gains or losses, special items and, in determining the business segments’ adjusted results, finance charges on finance debt and interest income. The adjusted operating profit of each business segment reports gains and losses on derivative financial instruments entered into to manage exposure to movements in foreign currency exchange rates, which impact industrial margins and translation of commercial payables and receivables. Accordingly, also currency translation effects recorded through profit and loss are reported within business segments’ adjusted operating profit. The taxation effect of the items excluded from adjusted operating or net profit is determined based on the specific rate of taxes applicable to each of them.

Finance charges or income related to net borrowings excluded from the adjusted net profit of business segments are comprised of interest charges on finance debt and interest income earned on cash and cash equivalents not related to operations. Therefore, the adjusted net profit of business segments includes finance charges or income deriving from certain segment operated assets, i.e., interest income on certain receivable financing and securities related to operations and finance charge pertaining to the accretion of certain provisions recorded on a discounted basis (as in the case of the asset retirement obligations in the Exploration & Production segment).

Inventory holding gain or loss

This is the difference between the cost of sales of the volumes sold in the period based on the cost of supplies of the same period and the cost of sales of the volumes sold calculated using the weighted average cost method of inventory accounting as required by IFRS.

Special items

These include certain significant income or charges pertaining to either: (i) infrequent or unusual events and transactions, being identified as non-recurring items under such circumstances; (ii) certain events or transactions which are not considered to be representative of the ordinary course of business, as in the case of environmental provisions, restructuring charges, asset impairments or write ups and gains or losses on divestments even though they occurred in past periods or are likely to occur in future ones. Exchange rate differences and derivatives relating to industrial activities and commercial payables and receivables, particularly exchange rate derivatives to manage commodity pricing formulas which are quoted in a currency other than the functional currency are reclassified in operating profit with a corresponding adjustment to net finance charges, notwithstanding the handling of foreign currency exchange risks is made centrally by netting off naturally-occurring opposite positions and then dealing with any residual risk exposure in the derivative market. Finally, special items include the accounting effects of fair-valued commodity derivatives relating to commercial exposures, in addition to those which lack the criteria to be designed as hedges, also those which are not eligible for the own use exemption, including the ineffective portion of cash flow hedges, as well as the accounting effects of settled commodity and exchange rates derivatives whenever it is deemed that the underlying transaction is expected to occur in future reporting periods.

Correspondently, special charges/gains also include the evaluation effects relating to assets/liabilities utilized in a natural hedge relation to offset a market risk, as in the case of accrued currency differences at finance debt denominated in a currency other than the reporting currency, where the cash outflows for the reimbursement are matched by highly probable cash inflows in the same currency. The deferral of both the unrealized portion of fair-valued commodity and other derivatives and evaluation effects are reversed to future reporting periods when the underlying transaction occurs.

As provided for in Decision No. 15519 of July 27, 2006 of the Italian market regulator (CONSOB), non-recurring material income or charges are to be clearly reported in the management’s discussion and financial tables.

Leverage

Leverage is a Non-GAAP measure of the Company’s financial condition, calculated as the ratio between net borrowings and shareholders’ equity, including non-controlling interest. Leverage is the reference ratio to assess the solidity and efficiency of the Group balance sheet in terms of incidence of funding sources including third-party funding and equity as well as to carry out benchmark analysis with industry standards.

Gearing

Gearing is calculated as the ratio between net borrowings and capital employed net and measures how much of capital employed net is financed recurring to third-party funding.

Cash flow from operations before changes in working capital at replacement cost

This is defined as net cash provided from operating activities before changes in working capital at replacement cost. It also excludes certain non-recurring charges such as extraordinary credit allowances and, considering the high market volatility, changes in the fair value of commodity derivatives lacking the formal criteria to be designed as hedges, including derivatives which were not eligible for the own use exemption, the ineffective portion of cash flow hedges, as well as the effects of certain settled commodity derivatives whenever it is deemed that the underlying transaction is expected to occur in future reporting periods.

Free cash flow

Free cash flow represents the link existing between changes in cash and cash equivalents (deriving from the statutory cash flows statement) and in net borrowings (deriving from the summarized cash flow statement) that occurred from the beginning of the period to the end of period. Free cash flow is the cash in excess of capital expenditure needs. Starting from free cash flow it is possible to determine either: (i) changes in cash and cash equivalents for the period 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 own shares, capital issuance) and the effect of changes in consolidation and of exchange rate differences; (ii) changes in net borrowings for the period by adding/deducting cash flows relating to shareholders’ equity and the effect of changes in consolidation and of exchange rate differences.

Net borrowings

Net borrowings is calculated as total finance debt less cash, cash equivalents, financial assets measured at fair value through profit or loss and financing receivables held for non-operating purposes. Financial activities are qualified as “not related to operations” when these are not strictly related to the business operations.

Proforma adjusted EBIT

Is the measure adding the operating margin of the equity accounted entities to the adjusted EBIT, introduced by the management to reflect the increasing contribution from the JV/associates also in connection with the Eni satellite model.

Reconciliation tables of Non-GAAP results to the most comparable measures of financial performance determined in accordance to GAAPs