0.2%

13.3%

2.9%

11.4%‐0.4%

‐2.3%

‐2.5%

‐5.0%

-10% -5% 0% 5% 10% 15% 20%

December 2014

Performance of the main stock indices

Source: Snam on the Bloomberg data

The financial markets pag. 1 The utility sector pag. 2

DJ Stoxx 50

S&P 500

DJ Euro Stoxx Utilities

FTSE MIB

Snam shares and its peers pag. 3

Jan - Dec ‘14

December ‘14

The oil markets Oil prices closed the month of December in further significant decline, down 19.5% for the U.S. benchmark WTI (closing at $53.3/barrel) and down 19.2% for Brent (closing at $55.8/barrel). The situation regarding market fundamentals remains unchanged, which

negatively impacted the oil market for all of 2014. The year saw the largest decline on a yearly basis since 2008, primarily as a result of excess supply, in a context of weak de-mand due to the sharp increase in the pro-duction of US shale oil and the lack of OPEC

production cuts. On annual basis, the WTI crude oil benchmark closed with a drop of 45.9%, while Brent saw a decline of 49.7%.

Snam S.p.A. Investor Relations

Negative performance for stock markets, impacted by worsening political tensions in Greece.

Snam stock closed down

Oil prices closed in significant decline

The financial markets

Stock markets registered broadly negative

trends in December, with falls of 0.4% for the

US S&P500, 2.3% for European DJ Stoxx50,

5.0% for the Italian FTSE MIB and 2.5% for

the DJ EuroStoxx Utilities sector index.

Stock markets, particularly those in Europe,

have been adversely affected by concerns

about political instability in Greece, as well

as by the weak economic situation in Euro-

zone countries.

From a macroeconomic perspective, positive

indications came from the United States

(with reference to November’s data, on a

monthly basis) from retail sales (+0.7%) and

the labour market, following the creation of

321.000 new jobs. The consumer confidence

index was also on the rise (93.8 points in

December, the highest since January 2007,

from 88.8 the previous month). The Eurozo-

ne continues to see weak trends in industrial

production (+0.1% in October, on a monthly

basis, at an aggregate level) as well as on

the PMI indices (the composite index was at

50.6 points in December, from 50.1 the pre-

vious month).

Looking at 2014 as a whole, the performan-

ce was positive on all stock markets, in parti-

cular for the US S&P 500 (+11.4%) and the

DJEurostoxx Utilities sector index (+13.3%),

while increases were more muted for the

European DJStoxx50 (+2.9%) and the Italian

FTSE MIB (+0.2%).

In the United States, stock markets were

mainly driven by positive macroeconomic

data and employment, in support of the

strengthening economic recovery. With the

economic stagnation in Europe, markets

were primarily driven by the ECB's expansio-

nary monetary policy, which carried out a

series of reductions in the benchmark rate to

reach the current 0.05% (in early Septem-

ber), a new historical low.

With regard to sectors, December recorded

mixed results. The best performance was

seen by the leisure sector, which was boo-

sted by the drop in fuel prices for air tran-

sport, the upward revision of low cost airline

Ryanair's end of the year profit objectives,

and increased consumption during the

Christmas holidays. Negative results were

instead seen in the banking sector, which

suffered a disappointing lower-than-

expected TLTRO auction (120 billion reque-

sted by European banks to the ECB rather

than the 100-250 billion expected), as well

as in the Oil & Gas sector, which continued

to be pushed down by weak crude oil prices.

Negative performance was also registered

by the utility sector, particularly for power

generation companies (-4%) which were

negatively impacted by several companies,

including RWE (-12%), which was hit by the

announcement of the 2015 dividend reduc-

tion as well as by some difficulty in selling

assets in Russia, and Fortum, which is parti-

cularly exposed to the Russian market.

In 2014, sectors registered largely positive

trends, most notably the real estate sector,

which benefited in particular from the increa-

se in housing demand due to the reduction

in interest rates. In contrast was the perfor-

mance of the Oil & Gas sector, which in the

second half of the year suffered from the

sharp drop in crude oil prices, and of the raw

materials sector, which was hit by the

slowdown of the Chinese economy, the

world's largest consumer of basic resources.

Like the real estate sector, the utilities sector

registered strong growth, boosted by the

reduction in interest rates, which reached

historic lows in 2014.

The utility sector in the Stock Market

Source: Snam on the Bloomberg data

Main sector performance, January- December 2014

Main sector performance, January- December 2014

Source: Snam on the Bloomberg data

DJ Ut i l i t y; -2,5%

DJ Insur ance; 0,1%

DJ T el ecom; -2,8%

DJ Heal th Car e; -2,4%

DJ M edi a; 1,4%

DJ Real Estate; 0,3%

DJ T r avel &Lei sur e; 3,7%

DJ Chemi cal s; -1,3%

DJ Food&Bev; -1,7%

DJ Const&M ater ; 0,4%

DJ Inds Good; 0,2%

DJ Oi l &Gas; -3,5%

DJ Per s&Househol ds; -1,5%

DJ Autopar ts; -0,1%

DJ T ech; 3,0%

DJ Fi nanci al Ser vi ces; 1,1%

DJ Retai l ; 2,5%

DJ Banks; -4,1%

DJ Basi c Resour ces; -1,8%

-10% -5% 0% 5% 10%

The power generation companies (-4%) were negatively impacted by several companies, including RWE (-12%), which was hit by the announcement of the 2015 dividend reduction as well as by some difficulty in

selling assets in Russia, and Fortum, which is particularly exposed to the Russian market.

Financial Markets Review December 2014 Snam S.p.A. Investor Relations

DJ Ut i l i t y ; 13,3%

DJ Insur ance; 9,8%

DJ T el ecom; 7,5%

DJ Heal th Car e; 18,2%

DJ M edi a; 7,3%

DJ Real Estate; 20,0%

DJ T r avel &Lei sur e; 18,3%

DJ Chemi cal s; 3,8%

DJ Food&Bev; 11,2%

DJ Const&M ater ; 4,7%

DJ Inds Good; -1,9%

DJ Oi l &Gas; -15,1%

DJ Per s&Househol ds; 9,2%

DJ Autopar ts; 4,0%

DJ T ech; 7,5%

DJ Fi nanci al Ser vi ces; 9,8%

DJ Retai l ; -4,1%

DJ Banks; -2,8%

DJ Basi c Resour ces; -6,2%

-20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40%

In 2014, the utility sector registered an in-

crease of 13.3%, boosted in particular by

regulated companies which experienced

large gains from interest rates that continued

to fall over the 12 months. In particular, the

best performances came from English com-

panies, which benefited from the sustained

growth of the United Kingdom’s economy,

and the conclusion of the regulatory review

of the water sector (United Utilities +36.4%,

Severn Trent +17.7%). Spanish companies

also contributed to the performance (REE

+50.9%; Enagas +37.9%), driven by the new

regulatory framework that came into force

earlier in the year which guarantees visibility

on the regulation parameters until 2020.

The Snam stock closed the last session of the month of December at 4.11 euro per share (official price), down 3.2% from the previous month, but outperforming the Italian market. Snam's performance registered a significant drop in the first half of the month, due to new fears regarding the heightening political tensions in Greece that dragged down all of the main European markets. The performance over the full year of 2014 was up by 1.9%, registering an increase smaller than the utility sector’s performance, but higher than the Italian stock market’s performance. After a stable first quarter, the stock benefi-ted in Q2 from the positive response of the financial community to the 2013 results and the 2014-2017 strategic plan. Stock trends were also boosted by the low level of interest rates, especially considering the high gua-ranteed return. The second half of 2014 saw the stock lose part of the margin previously gained; in Q3, Snam’s stock was negatively affected by the publication of lower-than-expected Italian macroeconomic data and the resulting un-certainty about the country’s economic reco-very, whilst in the latter half of the year, Snam’s share price was significantly impac-ted by the Authority’s decision to revise the rate of remuneration of gas storage, and by volatility linked to uncertainties surrounding the macroeconomic situation and crude oil prices.

The Utility sector performance January- December 2014, sector and subsector performance

Snam and its peers

Source: Snam on the Bloomberg data

5.8%

9.7%

22.1%

13.3%

-10% 0% 10% 20% 30%

Defensive Utilities

DJ Utility

Energy Utilities

Other Utilities

The Snam shares and its peers in the Stock Markets

Financial Markets Review December 2014 Snam S.p.A. Investor Relations

1,2%

1.9%

4.1%

37.9%

50.9%

16.5%

17.7%

36.4%

13.3%

0.2%

2.9%

‐3.2%

‐2.6%

‐2.8%

‐0.6%

‐1.3%

‐1.8%

‐2.5%

‐5.0%

‐2.3%

-10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60%

FTSE MIB

Stoxx 50

DJ Utility

United Utilities

NG

Severn Trent

REE

Enagas

Snam

Terna

January-December 2014

December 2014

The average volume of shares traded in 2014 totaled 10.2 million units (10.3 in 2013).

Snam SpA

Piazza Santa Barbara 7 - 20097 S. Donato Milanese (Mi) Italia

www.snam.it — investor.relations@snam.it

tel: +39 02 37037272- fax: +39 02 37037803