EDF / 2019 Universal registration document

6. Financial statements

Notes to the consolidated financial statements

Financial result Note 16

16.1

Cost of gross financial indebtedness

Details of the components of the cost of gross financial indebtedness are as follows:

2019

2018  (1)

(in millions of euros)

Interest expenses on financing operations  (2)

(1,801)

(1,765)

Change in the fair value of derivatives and hedges of liabilities Transfer to income of changes in the fair value of cash flow hedges

(14) (40)

(93) 102

Net foreign exchange gain on indebtedness COST OF GROSS FINANCIAL INDEBTEDNESS

49

44

(1,806)

(1,712)

Restated for the impacts of IFRS 5 concerning the discontinued E&P operations (see note 2.3). (1) In 2019, interest expenses on financing operations include interest on the lease liability (IFRS 16) amounting to €(85) million at 31 December 2019. (2) Discount effect 16.2 The effect of unwinding the discount primarily concerns provisions for the back-end of the nuclear cycle, decommissioning and last cores, and long-term and post-employment employee benefits. Details of the final discount effect are as follows:

2019

2018  (1)

(in millions of euros)

Provisions for long-term and post-employment employee benefits

(931)

(875)

Provisions for the back-end of the nuclear cycle, decommissioning and last cores  (2)

(2,116)

(2,480)

Other provisions and advances

(114)

(109)

DISCOUNT EFFECT

(3,161)

(3,464)

Restated for the impacts of IFRS 5 concerning the discontinued E&P operations (see note 2.3). (1) Including the effect of discounting the receivable corresponding to amounts reimbursable by the NLF (see note 39.3). (2)

The lower discount effect on nuclear provisions is explained by a 10 base point decrease in the real interest rate applied to nuclear provisions in France in 2019, compared to a 20 base point decrease in 2018.

16.3

Other financial income and expenses

Other financial income and expenses comprise:

2019

2018*

(in millions of euros)

Financial income on cash and cash equivalents

17

13

Gains/(losses) on other financial assets (including loans and financial receivables)

248 878

254 496

Gains/(losses) on debt and equity securities

Changes in financial instruments carried at fair value through profit and loss

2,338 (129)

(995) (274)

Other financial expenses

Foreign exchange gain/loss on financial items other than debts

(9)

(93) 475 502 378

Return on fund assets

523 740

Capitalised borrowing costs

OTHER FINANCIAL INCOME AND EXPENSES

4,606

Restated for the impacts of IFRS 5 concerning the discontinued E&P operations (see note 2.3). *

“Gains/(losses) on debt and equity securities” in 2019 principally include: €740 million of dividends and interest income on debt securities (€494 million ■ in 2018); €138 million of net gains and losses on sales of debt securities carried at fair ■ value through OCI with recycling (including €136 million on dedicated assets), compared to €2 million in 2018 (including €(12) million on dedicated assets). Other financial income and expenses include changes in fair value on financial instruments, amounting to €2,338 million. This favourable development, in a

context of rising markets, is explained by the €2,586 million change in the fair value of debt and equity securities (including €2,545 million on dedicated assets) and changes in the fair value of derivatives (€(248) million). In 2018, changes in financial instruments carried at fair value through profit and loss amounted to €(995) million, including €(989) million relating to dedicated assets. The increase in capitalised borrowing costs relates to the increase in work in progress for Flamanville 3 and HPC.

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EDF | Universal registration document 2019

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