EDF / 2020 Universal Registration Document

6 FINANCIAL STATEMENTS

Notes to the consolidated financial statements

Note 7

Other income and expenses

Other income and expenses amount to €(487) million for 2020. They principally comprise exceptional additional costs relating to repair work on the main secondary circuit welds in the Flamanville 3 EPR, totalling €(397) million in the first half of 2020. These additional costs are considered as abnormal costs under IAS 16 (paragraph 22) and cannot be included in the cost of assets under construction. Other income and expenses includes restructuring expenses in certain Group entities, and other items which are operating income and expenses by nature but of non-significant amounts individually.

Other income and expenses amounted to €(185) million for 2019. They included the €(30) million cost of the ERO 2019 employee shareholding offer undertaken during the first half of 2019, restructuring expenses in certain Group entities, and other items which are operating income and expenses by nature but of non-significant amounts individually.

Note 8

Financial result

8.1

Cost of gross financial indebtedness

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

2020

2019

(in millions of euros)

Interest expenses on financing operations*

(1,699)

(1,801)

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

90 (8)

(14) (40)

Net foreign exchange gain on indebtedness COST OF GROSS FINANCIAL INDEBTEDNESS

7

49

(1,610) (1,806) Interest expenses on financing operations includes interest on the IFRS 16 lease liability amounting to €(80) million in 2020 and €(85) million in 2019. *

8.2

Discount effect

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:

2020

2019

(in millions of euros)

Provisions for long-term and post-employment employee benefits (1)

(637)

(931)

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

(2,679)

(2,116)

Other provisions and advances

(417)

(114)

DISCOUNT EFFECT

(3,733)

(3,161)

See note 16.1.3. (1) Including the effect of discounting the receivable corresponding to amounts reimbursable by the NLF (see note 18.1.3). (2)

The increase in the unwinding discount effect on nuclear provisions is mainly due to a decrease in the real discount rate applied for nuclear provisions in France of 20bp in 2020 (compared to 10bp in 2019).

The increase in the unwinding discount effect on “Other provisions and advances” is explained by substantially lower discount rates in 2020 than 2019 for these provisions (mainly provisions for onerous contracts), as a result of the change in method for determining discount rates, which now refers to an interest rate curve (see note 15.1.1.5).

332

www.edf.fr

EDF - UNIVERSAL REGISTRATION DOCUMENT 2020