EDF / 2019 Universal registration document

6. Financial statements

Notes to the consolidated financial statements

At 31 December 2019, the equities held as part of fund assets are distributed as follows: approximately 64% of the total are shares in North American companies; ■ approximately 21% of the total are shares in European companies; ■ approximately 15% of the total are shares in companies in the Asia-Pacific zone ■ and emerging countries.

At 31 December 2019, the bonds held as part of fund assets are distributed as follows: approximately 68% of the total are AAA and AA-rated bonds; ■ approximately 32% of the total are bonds with A, BBB and other ratings. ■ Around 67% of all these bonds are sovereign bonds, mainly issued by the United Kingdom. The balance mainly consists of bonds issued by financial and non-financial firms. The portion of sovereign bonds issued by the United Kingdom was 7 percentage points higher than at 31 December 2018.

34.3.5

Future cash flows

Cash flows related to future employee benefits are as follows:

Cash flow under year-end economic conditions

Amount covered by provisions (present value)

(in millions of euros)

Less than one year One to five years Five to ten years More than ten years

269

264

1,093 1,515

1,050 1,353 7,023 9,690

12,953 15,830

CASH FLOWS RELATED TO EMPLOYEE BENEFITS

The contribution to funds for 2020 is estimated at approximately €289 million (€277 million contributed by the employer and €12 million by the employees).

The average weighted duration of funds in the United Kingdom is 19.5 years at 31 December 2019.

34.3.6

Actuarial assumptions

31/12/2019

31/12/2018

(in %)

Discount rate/rate of return on assets*

2.11% 2.89% 2.28%

2.86% 2.99%

Inflation rate

Wage increase rate 2.39% The interest income generated by assets is calculated using the discount rate. The difference between this interest income and the return on assets is recorded in * equity.

In the United Kingdom, the discount rate used for employee benefit obligations is determined by applying the yield rate on high-quality non-financial corporate bonds

based on their duration to maturities corresponding to the future disbursements

resulting from these obligations.

34.3.7

Sensitivity analyses

Sensitivity analyses on the amount of the obligations are as follows:

31/12/2019

(in %)

Impact of a 25bp increase or decrease in the discount rate Impact of a 25bp increase or decrease in the inflation rate Impact of a 25bp increase or decrease in the wage increase rate

-4.6% / +4.9% +3.6% / -3.4% +0.4% / -0.4%

358

EDF | Universal registration document 2019

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