EDF / 2018 Reference document

6.

FINANCIAL STATEMENTS Balance sheet

Regulatory discount rate limit The discount rate applied must also comply with two regulatory limits. Under the amended decree of 23 February 2007 and the ministerial order of 21 March 2007, itself modified by the order of 29 December 2017, the discount rate must be lower than: a regulatory maximum, set until 31 December 2026 as the weighted average of ■ two terms, the first set at 4.3%, and the second corresponding to the arithmetic average over the 48 most recent months of the TEC 30-year rate plus 100 points. The weighting given to the first constant term of 4.3% reduces on a straight-line basis from 100% at 31 December 2016 to 0% at 31 December 2026; and the expected rate of return on assets covering the liability (dedicated assets). ■

The ceiling rate based on the TEC 30-year rate is 4.0% (3.97%, rounded up to 4.0%) at 31 December 2018 (4.1% at 31 December 2017). The discount rate used at 31 December 2018 is 3.9%.

28.5.2

Analyses of sensitivity

to macro-economic assumptions Sensitivity to assumptions concerning costs, inflation rate, discount rate, and disbursement schedules can be estimated through comparison of the gross amount estimated under year-end economic conditions with the present value of the amount.

2018

2017

Amounts in provisions at present value

Amounts in provisions at present value

Costs based on year-end economic conditions

Costs based on year-end economic conditions

(in millions of euros)

Spent fuel management

18,737

10,698

19,058

10,786

Provisions for removal and conditioning of waste Long-term radioactive waste management BACK-END NUCLEAR CYCLE EXPENSES Decommissioning provisions for nuclear power plants in operation Decommissioning provisions for shut-down nuclear power plants

1,194

751

1,203

726

30,970 50,901

9,846

29,396 49,657

8,814

21,295

20,326

20,755

12,480

20,563

11,616

6,576 4,346 31,677

3,505 2,526 18,511

6,472 4,332 31,367

3,304 2,387 17,307

Provisions for last cores

DECOMMISSIONING AND LAST CORE EXPENSES

This approach can be complemented by estimating the impact of a change in the discount rate on the discounted value.

In application of Article 11 of the decree of 23 February 2007, the following table reports these details for the main components of provisions for the back-end of the nuclear cycle, decommissioning of nuclear plants and last cores for EDF:

Amounts in provisions at present value

Sensitivity to discount rate

Balance sheet provision Pre-tax net income +0.20% -0.20% +0.20% -0.20%

31/12/2018

(in millions of euros)

BACK-END NUCLEAR CYCLE EXPENSES spent fuel management ■ removal and conditioning of waste ■ long-term radioactive waste management ■

10,698

(218)

237

185

(202)

751

(23)

25

14

(15)

9,846

(597)

780

498

(673)

DECOMMISSIONING AND LAST CORE EXPENSES decommissioning of nuclear power plants in operation ■ decommissioning of shut-down nuclear power plants ■

12,480 3,505 2,526 39,806

(496) (138)

520 149

7

(7)

138

(149)

last cores ■

(88)

94

-

-

(1,560)

1,805

842

(1,046)

TOTAL

OTHER PROVISIONS FOR DECOMMISSIONING NOTE 29 Other provisions for decommissioning principally concern fossil-fired power plants. The costs of decommissioning fossil-fired power plants are calculated using regularly updated studies based on estimated future costs, measured by reference to the charges recorded on past operations and the most recent estimates for plants still in operation.

The provision recorded at 31 December 2018 reflects the most recent known contractor quotes and commissioning of new generation assets.

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EDF I Reference Document 2018