Following the sale of the Tecnimont Group on October 20, 2005, Edison Spa subscribed a capital increase carried out on the same date by Maire Tecnimont Spa, contributing 50 million euros in exchange for a 19.5% interest in Maire Tecnimont Spa. The purchase of this investment was combined with a put-and-call option, which Edison Spa exercised immediately on a now-for-then basis. The resulting receivable was assigned for discounting with recourse to a bank. Consequently, the corresponding equity investment was not recognized as an asset.
7. Other Financial Assets
Other financial assets of 65 million euros include loans receivable due in more than one year and long-term equity investments.
  Loans Long-term equity Other financial
(in millions of euros) receivable investments assets
Balance at 12/31/04 (A) 74 2 76
Changes in 2005      
- Additions 3 - 3
- Writedowns (-) (8) - (8)
- Change in scope of consolidation (17) - (17)
- Other changes 11 - 11
Total changes (B) (11) - (11)
Balance at 12/31/05 63 2 65
- Historical cost 71 2 73
- Writedown (-) (8) - (8)
Net carrying value 63 2 65
The main component of loans receivable is a receivable of 46 million euros owed by IPSE 2000. This receivable, which is related to a pro rata interest in UMTS licenses, was written down by 8 million euros in 2005. This account also includes 9 million euros in bank deposits established with lender banks in connection with project financing facilities to secure commitments to repay on time short-term and long-term loan installments.
The change in scope of consolidation refers to the engineering operations (sale of the Tecnimont Group).
8. Deferred-tax Assets
Deferred-tax assets of 104 million euros reflect a tax-loss carryforward (46 million euros), differences in the valuation of property, plant and equipment (28 million euros) and tax-deductible provisions for risks (17 million euros). Other differences, including those stemming from the adoption of IAS 39, account for the balance. The contribution of Edipower amounted to 89 million euros. The adoption of IAS 39 resulted in the recognition of prepaid taxes totaling 7 million euros, the offset of which was posted to shareholders' equity.
With regard to the recognition of these assets, their valuation was made based on expectations of actual utilization over the limited time horizon of the industrial plans approved by the Company. Items that can have a deferred-tax impact even if they are not recognized on the balance sheet are also included in the computation of deferred-tax assets and liabilities.
9. Other Assets
Other assets totaled 297 million euros. They consisted mainly of tax refunds receivable, which amounted to 293 million euros including accrued interest through December 31, 2005, and 2 million euros in advance tax payments on future distributions of employee severance benefits paid pursuant to law.
10. Current Assets
(in millions of euros) 12/31/05 12/31/04 Change
Inventories 315 302 13
Trade receivables 1,593 1,139 454
Due from customers for contract work - 168 (168)
Current-tax assets 38 103 (65)
Other receivables 337 346 (9)
Current financial assets 76 87 (11)
Cash and cash equivalents 361 458 (97)
Total current assets 2,720 2,603 117
A review of the individual components is provided below:
Inventories totaled 315 million euros, or 13 million euros more than at the beginning of the year. A breakdown among the Group's various activities is provided below:
(in millions of euros) Technical Stored natural Green Fuel Other Total
  consumables gas certificates oil materials 12/31/05
Electric power operations 26 - 60 55 11 152
Hydrocarbons operations 5 155 - - 1 161
Corporate activities - - - - - -
Total core businesses 31 155 60 55 12 313
Water - - - - 2 2
Total for the Group 31 155 60 55 14 315
Trade Receivables
Trade receivables totaled 1,593 million euros. A breakdown of this amount is as follows: electric power operations 1,133 million euros, hydrocarbon operations 385 million euros, Edison Treasury Services 64 million euros, water operations 10 million euros and corporate activities for the balance. Provisions for write down amount to 45 million euros.
Due from Customers for Contract Work
This account had a zero balance due to the sale of the engineering operations.
Current-tax Assets
The balance of 38 million euros includes amounts owed by the tax authorities for overpayments of corporate income taxes (IRES) totaling 8 million euros and local income taxes (IRAP) amounting to 34 million euros. The IRAP receivable stems from estimated IRAP payments made in 2005, net of the accrued tax liability recognized in 2005.
Other Receivables
The main components of other receivables, which amounted to 337 million euros, are receivables from the tax administration for VAT overpayments (59 million euros), amounts owed by partners and associates in hydrocarbon exploration projects and royalty advances (82 million euros), advances paid to suppliers (31 million euros), receivables from public institutions and local entities (29 million euros), insurance premiums and settlements (27 million euros) and credits arising from the valuation of commodity derivative contracts executed to equalize the price of energy (23 million euros).