35. NET INCOME/(LOSS ) FROM EQUITY INVESTMENTS

35.1 Share of net income of associates and joint ventures

The Group’s share of net income (loss) of associates and joint ventures accounted for using the equity method was a positive euro 2,903 thousand, compared with a positive euro 256 thousand in 2010.

The amount for 2011 mainly consists of the amount recognised for the equity investment in Eurostazioni S.p.A. (positive euro 3,968 thousand) and in GWM Renewable Energy II S.p.A. (positive euro 1,265 thousand), partly offset by the equity investment in RCS MediaGroup S.p.A. (negative euro 1,015 thousand) and in Sino Italian Wire Technology Co. Ltd. (negative euro 1,635 thousand).

 

35.2 Gains from equity investments

This item is broken down as follows:

(in thousands of euro)
  2011 2010
Gains on disposal of available-for-sale financial assets 3,842 19,539
Reversal of impairment of equity investments in associates   3,956
Other gains on equity investments 5 336
  3,847 23,831

 

The gains on disposal of available-for-sale financial assets for 2011 refer mainly to disposal of the equity investment held in Gruppo Banca Leonardo S.p.A. (euro 856 thousand) and the sale of shares in Advanced Digital Broadcast Holdings S.A. (euro 680 thousand). In 2010 the item mainly included the gain realised on disposal of the equity investment held in Oclaro Inc. (formerly Avanex) for euro 18,366 thousand.

The reversal of impairment of equity investments in associates in 2010 referred to the equity investment in CyOptics Inc. and stemmed from the increase in the recoverable amount of the equity investment versus its carrying amount. The amount of the reversal, euro 3,956 thousand, was determined by considering the price received for disposal of the investment at the beginning of 2011.

 

35.3 Losses from equity investments

This item is broken down as follows:

(in thousands of euro)
  2011 2010
Losses on disposal of available-for-sale financial assets - 30
Impairment of equity investments in associates and joint ventures 16,816 585
Impairment of available-for-sale financial assets 11,482 5,850

28,298 6,465

 

The impairment of equity investments in associates and joint ventures refers exclusively to the equity investment in RCS MediaGroup S.p.A. The value per share has been adjusted to euro 1.02 per share, compared with euro 1.48 per share in the previous year. This impairment, when combined with the Group’s share in the loss of the associate totalling euro 1,015 thousand, results in a total impact of euro 17,831 thousand in the income statement.

The impairment of available-for-sale financial assets refers mainly to the equity investment in Alitalia S.p.A. (euro 10,300 thousand) and to the equity investment in F.C. Internazionale Milano S.p.A. (euro 638 thousand). In this regard, also see note 13 “Other financial assets”.

The item also includes a loss of euro 3,917 thousand on the equity investment in Advanced Digital Broadcast Holdings S.A., classified as an available-for-sale financial asset, and recognised in the income statement insofar as the equity investment is hedged against the risk of change in its fair value due to the put option held on the investment. Since fair value hedge accounting was adopted, the equity investment was offset by the positive fair value measurement of the put option for euro 3,923 thousand (see note 28 “Derivative financial instruments”), and its impact on the income statement was consequently zero.

In 2010 the item mainly referred to impairment of the equity investments in Gruppo Banca Leonardo S.p.A. (euro 3,042 thousand), TLCom Ltd (euro 632 thousand), in Tiglio I S.r.l. (euro 580 thousand) and in Equinox (euro 372 thousand).

 

35.4 Dividend income

The amount of euro 4,230 thousand in 2011 consists principally of euro 2,678 thousand from Mediobanca S.p.A., euro 794 thousand from mutual fund income, euro 348 thousand from Fin. Priv. S.r.l. and euro 318 thousand from Advanced Digital Broadcast Holdings S.A.

In 2010 the total consisted of euro 2,728 thousand from Gruppo Banca Leonardo S.p.A., euro 2,678 thousand from Mediobanca S.p.A. and euro 348 thousand from Fin. Priv. S.r.l.