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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
201820172018-2017
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).