DISPOSICIÓN FINAL

Changes in intangible assets

Change in Coming into Disposals

Ordinary consolidation Write- service and and other

In millions of euro increases area downs Amortizat. reclass. changes

at Dec. at Dec.

31, 2001 31, 2002

Incorporation costs 35 12 6 (1) (21) - (3) 28

Research, development

and advertising 127 17 1 (8) (56) - - 81

Industrial patents and intellectual

property rights 458 197 - (22) (178) 12 (2) 465

Concessions, licenses,

trademarks and similar rights 2,840 31 8 (1) (25) - (14) 2,839

Goodwill and consolidation differences:

- Goodwill 46 - 1,494 (3) (86) 269 (3) 1,717

- Consolidation differences 8,056 14 21 (1,511) (543) (260) (103) 5,674

Total goodwill and

consolidation differences 8,102 14 1,515 (1,514) (629) 9 (106) 7,391

Work in progress and advances 174 219 7 - - (115) - 285

Other:

- extraordinary contribution for the suppression of the Electricity

Sector Employee Pension Fund 1,751 - (51) (41) (92) - (21) 1,546

- software development 82 50 - (1) (70) 56 (2) 115

- charges for the allocation of

telecommunications frequencies 41 6 - - (3) 7 - 51

- other 303 62 6 - (68) 31 (106) 228

Total other 2,177 118 (45) (42) (233) 94 (129) 1,940

Incorporation costs relate primarily to startup costs incurred in the past by WIND in addition to incorporation costs, amendments to the bylaws and capital stock increases. Incorporation costs are amortized over 5 years.

Research, development and advertising relate to the costs of advertising campaigns carried out by WIND to support new services and trademarks, in addition to costs for the promotion of its new image following the merger with Infostrada. They are amortized over 5 years.

Industrial patents and intellectual property rights consist primarily of costs incurred by WIND for the acquisition of proprietary and licensed software. Main applications are represented by the management of the network, billing and customer services, the development of Internet portals and the management of corporate systems. Amortization is calculated on a straight line basis over the expected residual useful life of the assets (normally between 3 and 5 years).

Concessions, licenses, trademarks and similar rights include costs incurred by WIND to participate in the competition for the awarding of a license for the installation and operation of third generation mobile telecommunications systems (UMTS – IMT 2000) and, subsequently, for the issue of the same, amounting to euro 2,447 million. The license was issued on January 10, 2001 for a term of 20 years, effective January 1, 2002. Amortization over the residual life of the license will start from the time at which the service is effective. No amortization was thus recorded for the year under review.

The item includes also approximately euro 330 million relating to the charges incurred by Infostrada (now part of WIND) in return for the right of access to the network owned by Italian State Railways acquired on April 7, 1998, and the right to use the existing optical fiber cables installed along such network. The right of access to the network is amortized on the basis of the residual duration of the same (30 years). The right to use the existing optical fiber network is amortized over 20 years.

Goodwill and Consolidation differences are analyzed jointly following the extraordinary operations occurred in 2002 that affected both items.

Goodwill and consolidation differences Accumulated

amortization Amortization

Historical and for the Amortization

In millions of euro cost write-downs Balance at year 2002 period

Dec. 31, 2002 2002

Telecommunications 8,360 2,511 5,849 553 15 anni

Gas Area 695 35 660 27 15 anni

Viesgo 757 38 719 38 20 anni

CHI Energy and EGI 163 14 149 8 20 anni

Other 15 1 14 3 10 anni

Total 9,990 2,599 7,391 629

Net increases in the year due to changes in the consolidation area result from the following operations:

The amount is recorded in the statutory accounts of local operating subsidiaries following the merger of the same into the companies used as vehicles for the acquisition. Goodwill is amortized over 20 years, deemed in line with the activity, business plans and

international practice in the sector;

> acquisitions in the gas sector, determining a euro 643 million net increase in the two items considered. The difference between the price paid in 2002 for the acquisition of the Camuzzi and Marcotti Groups and the respective book value of the equities at the acquisition date amounted to euro 972 million. As a result of corporate

restructuring operations carried out and of the recognition of assets and liabilities acquired at their fair values, the share of such difference attributed to the goodwill of the “sales” business unit amounts to euro 566 million, while that attributed to tangible assets (distribution network), net of the related tax effect, is equal to euro 375 million. The residual consolidation difference amounts therefore to euro 31 million. Goodwill of sales activities is amortized over 15 years, deemed appropriate in view of current and expected performances of the business, despite growing competitive pressures and in view of the fact that sales activities are not directly connected to the expiration terms of licenses for the distribution of gas;

> sale of the Powerco Group, involving the netting of the related residual consolidation difference and other minor changes, amounting to euro 15 million;

> acquisition by WIND of a business unit from BLU, involving the payment of euro 130 million in goodwill.

Reclassifications made among the two items considered consist almost entirely of the allocation to Goodwill of part of the consolidation difference recorded on the acquisition of Infostrada as a result of the merger of the same into WIND.

Other changes include a euro 103 million reduction in the item Consolidation differences resulting from the merger into GE.AD. of gas distribution companies acquired in the last quarter of 2001. The amount was recorded as an increase in tangible assets upon the allocation of merger differences.

The consolidation difference and goodwill relating to WIND (excluding the goodwill of BLU described above) was paid primarily for the acquisition of Infostrada (now merged with WIND) on March 31, 2001 and, to a lesser extent, for the acquisition of a 5.63% share in WIND from Deutsche Telekom in July 2000. In view of the outlook of the telecommunications sector and the downwards revision of growth expectations, inevitably affecting WIND, it has been deemed necessary to review the carrying value of such consolidation difference at December 31, 2002. A valuation of the Group’s telecommunications business was thus carried out on the basis of a prudent estimate of future cash flows. From such valuation there emerged a loss in value of euro 1,511 million. Such write-down was recorded among extraordinary charges in the Income Statement.

Consolidation differences arising from the acquisition of CHI Energy and EGI, active in the field of electricity generation from renewable sources in the Americas, are amortized over 20 years in connection with the long-term electricity sale agreements held by the same.

Work in progress and advances include costs incurred in important projects, such as the implementation of the SAP information system and the EDP cartography system for low- and medium-voltage distribution networks, in addition to the “digital meter” project.

The extraordinary contribution due following the suppression of the Electricity Sector Employee Pension Fund, was established through Law no. 488, dated December 23, 1999 (2000 Budget Law). Changes reflect the amortization for the period, the sale of Eurogen, the euro 41 million adjustment made in view of the reduction in personnel of the Group, and the euro 21 million adjustment carried out by INPS in calculating the last installment, paid in November 2002.

Software development costs relate to application programs developed for internal use, having a useful life spanning over several years. They are prudently amortized over 3 years.

Charges for the allocation of telecommunications frequencies relate to the contribution provided for by Ministerial Decree no. 113 dated March 25, 1998, to reimburse expenses incurred by the Ministry of Defense following changes introduced in 1998 to the national frequency allocation plan. Such contribution is amortized over the residual life of the license for the exercise of mobile telecommunications services (DCS 1800).

Other costs include primarily leasehold improvements carried out by WIND and Infostrada on technical sites and other intangible assets recorded by CHI Energy and EGI, and amortized over their residual useful life.

Other changes include euro 112 million due to the reclassification to prepaid expenses of Loan accessory costs relating to WIND, made for consistency with accounting principles adopted by the Group.