Good liquidity position coupled with healthy cash management Profitable shareholding and real estate portfolios Strong fund balance Low contingent liabilities Weakened budgetary performances Limited financial flexibility Fairly low self-financing capacity in a context of large investment needs Heavy and rising debt burden even after the convertible bond reimbursement at year end The rating reflects Milan's good liquidity position, profitable shareholdings and real estate, strong fund balance, and low contingent liabilities. Offsetting these are weakened budgetary performance, limited financial flexibility, fairly low self-financing capacity, large investments, and a heavy debt burden. Since 2006, Milan has reported negative operating margins due to increasingly large and rigid operating expenditure and almost flat operating revenues. The operating margin, excluding urban concession fees used to
