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Analysis of the financial structure

The following table shows the composition of and changes in net financial debt:

Milions of euro
at Dec. 31, 2018at Dec. 31, 2017Change
Long-term debt:
- bank borrowings1,0481,039  9
- bonds8,2088,541  (333)
- debt assumed and loans from subsidiaries4,1411,200  2,941
Long-term debt13,39710,780  2,617
- financial receivables due from others(128)(6)  (122)
Net long-term debt13,26910,774  2,495
Short-term debt/(liquidity):
- short-term portion of long-term borrowings8063,654(2,848)
- short-term bank borrowings45245(200)
- cash collateral received240256(16)
Short-term debt1,0914,155(3,064)
- short-term portion of long-term financial receivables(1)(1) - 
- short-term portion of loans assumed/granted-(27) 27 
- other short-term financial receivables(12)1(13)
- cash collateral paid(1,253)(2,074)821
- net short-term financial position with Group companies4,4032,9121,491
- cash and cash equivalents and short-term securities(2,007)(2,489)482
Net short-term debt/(liquidity)2,2212,477(256)
NET FINANCIAL DEBT15,49013,2512,239

Net financial debt at December 31, 2018, amounted to €15,490 million, an increase of €2,239 million, the result of an increase in the net long-term debtor position of €2,495 million, partly offset by a decrease of €256 million in net short-term financial debt.

The main transactions in 2018 impacting financial debt can be summarized as follows:

  • a net decrease of €333 million in bonds due to implementation of the bond portfolio restructuring program, by way of the renegotiation and concomitant new issue of hybrid bonds in May;
  • the increase, compared with the amount recognized at December 31, 2017, of long-term loans from subsidiaries, in particular the loan agreements between Enel SpA and Enel Finance International NV signed in June and December for a total of €2,250 million, as well as the loan from the same company following the merger of the subsidiary Enel Holding Chile Srl in the amount of €691 million;
  • the decrease of €2,848 million in the short-term portion of long-term loans due to redemptions of bonds maturing during the year, partially offset by new issues that matured;
  • a decrease of €200 million in short-term bank borrowings;
  • a decrease in cash collateral paid to banks in the amount of €821 million;
  • an increase of €1,491 million in the net debtor position with Group companies on the intercompany current account.

Cash and cash equivalents amounted to €2,007 million, a decrease of €482 million compared with December 31, 2017, reflecting normal operations related to the centralized treasury functions performed by the Parent Company.

Cash flows

Milions of euro
Cash and cash equivalents at the start of the year2,4893,038(549)
Cash flows from operating activities3,4492,465984
Cash flows from investing/disinvesting activities(2,587)(48)(2,539)
Cash flows from financing activities(1,344)(2,966)1,622
Cash and cash equivalents at year end2,0072,489(482)

Cash flows from financing activities came to a negative €1,344 million (€2,966 million in 2017). They reflected the repayment of bonds and the payment of dividends for 2017 (€2,410 million).

Cash flows from investing activities were a negative €2,587 million (€48 million in 2017), and were essentially generated by the net effect of the operation involving Enel SpA’s acquisition of the investments held by Enel Investment Holding BV, a wholly owned Dutch subsidiary, in the Romanian companies, in Enel Russia and RusEnergoSbyt and in the Dutch company Enel Insurance NV, as well as the recapitalization of the subsidiaries e-distribuzione SpA and Enel X Srl.

The cash requirements generated by financing and investing activities were funded by cash flows generated by operating activities (a positive €3,449 million, compared with €2,465 million in 2017), essentially reflecting dividends received from subsidiaries (€3,510 million) and the use of cash and cash equivalents, which at December 31, 2018 consequently amounted to €2,007 million (€2,489 million at the start of the year).