EDF / 2020 Universal Registration Document

6 FINANCIAL STATEMENTS

Notes to the consolidated financial statements

1.4.2

IFRS 5 “Sale of Edison’s E&P Operations”

with an additional consideration of a maximum $100 million upon commissioning of the Cassiopea gas project in Italy, depending on the PSV gas price at the time of the first delivery. Edison also signed an agreement on 30 December 2020 for the sale of the Norwegian operations to Sval Energi. This operation requires the approval of the Norwegian authorities and should be completed during the first half of 2021 (see the Edison press release of 30 December 2020). Presentation of E&P’s operations 1.4.2.1 at 31 December 2019, excluding Algeria and Norway Due to this situation, in application of IFRS 5, at 31 December 2020 the amounts of Edison’s Algerian E&P assets and liabilities are presented in the consolidated balance sheet as continuing operations, while the Norwegian A&P operations are presented in the consolidated balance as discontinued operations. The net income and the net change in cash for the Algerian and Norwegian E&P operations are reported in the specific line “Net income of continuing operations” and allocated to the relevant lines of the income statement and cash flow statement for the periods published, i.e. 2020 and the comparative figures for 2019. The net income of discontinued operations, and the net change in cash of discontinued operations, corresponding to Edison’s E&P operations excluding the Algerian and Norwegian E&P operations, are still reported on a specific line in the income statement and cash flow statement for the periods published, until finalisation of the sale which took place on 17 December 2020. At 31 December 2020, the assets and liabilities of discontinued operations include the E&P operations in Norway and are presented in note 3.2. In this new situation, the impacts on the Group’s income statement and cash flow statement of application of IFRS 5 at 31 December 2019 are presented below.

Edison Exploration and Production manages all activities, mining titles and shareholdings of Edison and the Group in the hydrocarbons business in Italy and internationally. On 4 July 2019, Edison announced the signature of an agreement with Energean Oil and Gas for the sale of 100% of Edison E&P (Exploration and Production), which manages all the EDF group’s hydrocarbons sector activities, mining titles and corporate shareholdings in Italy and abroad. The EDF group consequently classified the sale of the E&P operations as a discontinued operation as defined by IFRS 5 in its financial statements at 31 December 2019 (see note 2 to the consolidated financial statements at 31 December 2019). On 23 December 2019, Edison disclosed that the sale to Energean Oil and Gas was still awaiting government authorisations regarding its E&P assets in Algeria. After the Algerian authorities refused to authorise the sale of those assets, on 2 April 2020 Edison’s Board of Directors approved the signature of an amendment to the disposal agreement, excluding the Algerian E&P assets from the scope of the agreement of 4 July 2019. Then following the announcement by Energean on 19 May 2020 that the proposed sale of Edison’s E&P operations in Norway to Neptune Energy was to be terminated, a second amendment was signed on 28 June 2020, excluding the Norwegian subsidiary from the agreement. The acquisition process and its new scope was approved by Energean at an Extraordinary General Shareholders’ Meeting on 20 July 2020. On 17 December 2020 Edison and Energean finalised the sale of Edison Exploration and Production S.p.A. in the hydrocarbons (oil and natural gas) exploration and production business. The sale price was based on an enterprise value of $284 million,

Impacts on the 2019 income statement

2019 as published IFRS 5 adjustments

2019 restated

(in millions of euros)

Sales

71,317 (35,091) (8,619) (13,793) (3,798)

30

71,347 (35,091) (8,625) (13,797) (3,798)

Fuel and energy purchases Other external expenses

-

(6) (4)

Personnel expenses

Taxes other than income taxes

-

Other operating income and expenses

6,692

(5) 15

6,687

Operating profit before depreciation and amortisation Net changes in fair value on energy and commodity derivatives, excluding trading activities

16,708

16,723

642

-

642

Net depreciation and amortisation

(10,002)

(18)

(10,020)

(Impairment)/reversals

(403) (185) 6,760

- -

(403) (185) 6,757

Other income and expenses

Operating profit

(3)

Cost of gross financial indebtedness

(1,806) (3,161)

- -

(1,806) (3,161)

Discount effect

Other financial income and expenses

4,606 (361) 6,399

(3) (3) (6) 49

4,603 (364) 6,393

Financial result

Income before taxes of consolidated companies

Income taxes

(1,581)

(1,532)

Share in net income of associates and joint ventures

818

-

818

Net income of discontinued operations CONSOLIDATED NET INCOME

(454)

(43)

(497)

5,182 5,155 5,597

- -

5,182 5,155 5,639

EDF net income

Net income of continuing operations Net income of discontinued operations

42

(442)

(42)

(484)

Net income attributable to non-controlling interests

27 39

-

27 40

Net income of continuing operations Net income of discontinued operations

1

(12)

(1)

(13)

310

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EDF - UNIVERSAL REGISTRATION DOCUMENT 2020