EDF / 2018 Reference document

6.

FINANCIAL STATEMENTS Cash flows and other information

approximately €310 million. EDF International has contested this reassessment, and considers it has good chances of winning the dispute.

In parallel to the compensation claims before civil courts, EDF and Enedis sought to apply their Civil Liability insurance policy, but the insurers refused their claim. The French Court of Cassation considered in a ruling of 9 June 2015 (for the Green Yellow case) that the insurance payment was due and that the network operator was at fault. Following that ruling, Enedis and EDF brought action against their insurers in April 2017, applying to the courts for formal recognition of two partial serial claims. If the courts were to recognize the existence of two partial serial claims, a single excess and a single limit would apply for all claims with the same technical cause. 47.3.1 On 21 June 2012, SUN’R filed a complaint against EDF and Enedis, along with an application for interim measures, with France’s Competition Authority, the ADLC. SUN’R accused Enedis of delays in the procedure for connecting its photovoltaic facilities and EDF of delays in the establishment of the purchase obligation contracts and payment of the related invoices. SUN’R also claimed that EDF ENR had benefited from special treatment from Enedis for the connection of its facilities and from EDF for the payment of its invoices. In a decision of 14 February 2013, the ADLC rejected all the applications made by SUN’R for interim measures but decided to continue the investigation on the merits of the case. On 12 January 2018 the ADLC’s investigation departments sent the parties a proposal to dismiss the matter due to the absence of anticompetitive practices by EDF, Enedis and RTE. On 4 July 2018, the ADLC closed the proceedings by issuing a decision dismissing the case. Concurrently with its complaint to the ADLC in 2012, on 29 August 2012 SUN’R filed a petition at an urgent applications hearing for expert assessment and provision for costs before the Paris Administrative Court, including a claim for provisional compensation of €1 million from EDF and €2.5 million from Enedis. By order of 27 November 2012, the urgent applications judge (juge des référés) at the Administrative Court of Paris dismissed this petition. On 30 April 2015, SUN’R issued proceedings against Enedis and EDF before the Paris Commercial Court, seeking compensation for the loss allegedly caused to it by the delays in the procedure for the connecting its solar energy plant projects to the electricity distribution network. It asked the Court to suspend proceedings pending the ADLC’s decision on the merits of the case, and claimed a provisional amount of €10 million to be applied against future compensation for its loss. In a ruling of 7 November 2016 the Paris Commercial Court dismissed SUN’R’s claim for provisional compensation and suspended proceedings until the ADLC issues a decision on the merits of the case. On 24 November 2015, Sun West, Azimut 56 and JB Solar issued proceedings against Enedis and EDF before the Paris Commercial Court on the same grounds. They are currently claiming almost €4 million for the alleged prejudice, but asked the Court to suspend proceedings pending the ADLC’s decision on the merits of the case. In a ruling of 4 December 2017, the Paris Commercial Court rejected claims for provisional compensation made by Sun West, Azimut 56 and JB Solar and suspended proceedings until the ADLC issued a decision on the merits of the case. That decision was announced on 4 July 2018 when the ADLC dismissed the case, without possibility of appeal. The behaviours alleged by the plaintiff are consequently considered never to have taken place. The Paris Commercial Court formally noted the withdrawal of SUN’R’s action for compensation in a judgement of 10 December 2018, and the withdrawal of the claims by Sun West, Azimut 56 and JB Solar in a further judgement of 12 December 2018. This matter is thus definitively closed. SUN’R

LABOUR LITIGATION 47.2 EDF is party to a number of labour lawsuits, primarily regarding working hours. EDF estimates that none of these lawsuits, individually, is likely to have a significant impact on its financial results or financial position. However, because they relate to situations that could concern a large number of EDF’s employees in France, any increase in such litigations could have a potentially negative impact on the Group’s financial position (although the risk has been mitigated by the signature of the agreement on fixed numbers of working days in 2016). PHOTOVOLTAIC PRODUCERS The French authorities’ announcement in autumn 2010 of a forthcoming downward revision to photovoltaic electricity purchase prices triggered an upsurge in connection applications (since at the time the applicable tariff depended on the date at which a complete connection application was filed). Several successive ministerial decisions were issued reducing purchase prices. As these price decreases were not sufficient to stem the flow of connection applications, by a decree of 9 December 2010 the Government suspended the conclusion of new contracts for a three-month period, and stated that if the financial and technical proposal for a request had not been approved by 2 December 2010, a new connection application would have to be submitted at the end of this three-month period. A certain number of producers who, as a result of these circumstances, lost their entitlement to the pre-moratorium purchase obligation price brought legal proceedings against EDF as operator of the distribution network in the non-interconnected zones, and against Enedis as network operator for mainland France, claiming that the electricity network operator did not issue the technical and financial connection proposals in time for them to benefit from more advantageous electricity purchase terms. In an order of 15 March 2017, the Court of Justice of the European Union confirmed that the decisions of 10 July 2006 and 12 January 2010 setting the purchase tariffs for photovoltaic energy constitute “intervention by the State or using State resources”, one of the four criteria that characterise State aid. The Court stated that such a support measure, implemented without prior notification to the European Commission, is illegal. It is now up to the national courts to act accordingly, particularly by banning application of these illegal decisions. Several courts have found in favour of Enedis during 2018. Notably, in early July 2018 Versailles Court of Appeal dismissed 150 producers’ claims, because there was no evidence establishing misconduct by Enedis, or because there was no causal link between Enedis’ misconduct and the prejudice, or because the prejudice was not deemed eligible for compensation since the tariff decisions of 2006 and 2010 are illegal, as the European Commission did not receive the prior notification required by State aid control rules. Appeals have been filed before the Court of Cassation against most of these decisions. Similarly, in recent months a certain number of court decisions have been issued in favour of EDF, considering that the producers’ prejudice is not reparable because it is founded on illegal grounds. ENEDIS –LITIGATION WITH 47.3

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EDF I Reference Document 2018