EDF / 2020 Universal Registration Document

6 FINANCIAL STATEMENTS

Notes to the consolidated financial statements

This decree and ministerial order require the discount rate to comply with two regulatory limits from 1 July 2020. It must be lower than: a regulatory maximum, now expressed in real value, i.e. net of inflation; this value ● is equal to the unrounded value representative of expectations concerning the real long-term interest rate, as used for the calculation of the Ultimate Forward Rate (UFR) applicable at the date concerned published by the European Insurance and Occupational Pensions Authority (EIOPA), plus 150 bp. This maximum is applicable from 2024. Until 2024, the maximum is the weighted average of 2.3% and the above calculation. The weighting applied to the 2.3% rate is set at 50% for 2020, 25% for 2021, 12.5% for 2022 and 6.25% for 2023; and the expected rate of return on assets covering the liability (dedicated assets). ● The maximum discount rate under the new ministerial order effective from 1 July 2020, calculated by reference to the UFR, is 2.7% (real rate of 2.66% rounded up to 2.7%) at 31 December 2020. The real discount rate used in the financial statements at 31 December 2020, in application of the methodologies presented above, is 2.1%.

The maximum discount rate in nominal value, based on the regulation applicable before the ministerial order of 1 July 2020 and calculated by reference to TEC 30 rates, was 3.8% (3.75% rounded up to 3.8%) at 31 December 2019. The nominal discount rate used in the financial statements at 31 December 2019 was 3.7%. The decree of 1 July 2020 also introduced the following additional changes: it removed the obligation to add to dedicated assets when the coverage rate of ● obligations is above 100%, and raised the threshold above which withdrawals can be made from dedicated assets from 110% to 120%; it extended the period for making additions to dedicated assets in the event of a ● shortfall in coverage, after approval by the administrative authority, to 5 years compared to 3 previously; it added requirements for internal control and risk analysis on nuclear provisions, ● which operators must implement by 31 December 2021. Analyses of sensitivity to macro-economic assumptions Sensitivity to assumptions concerning costs, inflation rate, long-term 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.

Provisions related to nuclear generation within the scope of the Law of 28 June 2006

31/12/2020

31/12/2019

Costs based on year-end economic conditions

Costs based on year-end economic conditions

Amounts in provisions at present value

Amounts in provisions at present value

(in millions of euros)

Spent fuel management

18,998

10,246

18,437

9,804 1,152

2,727

1,297

2,491 1,243

amount unrelated to the operating cycle ●

Waste removal and conditioning

-

-

805

Long-term radioactive waste management BACK-END NUCLEAR CYCLE EXPENSES Decommissioning of nuclear plants in operation Decommissioning of shut-down nuclear plants DECOMMISSIONING AND LAST CORE EXPENSES PROVISIONS RELATED TO NUCLEAR GENERATION within the scope of the law of 28 June 2006 Last cores

35,580 54,578 19,693

13,300 23,546 12,775

32,372 52,052 21,134

10,531 21,140 13,244

7,400 4,258

4,714 2,711

6,428 4,331

3,693 2,624

31,351

20,200

31,893

19,561

43,746

40,701

The cumulative disbursements of nuclear expenses (based on gross values at year-end economic conditions) are distributed as follows:

Provisions related to nuclear generation within the scope of the Law of 28 June 2006

31/12/2020

Costs based on year-end economic conditions

Disbursement expected within 10 years

Disbursement expected after 10 years*

Total

(in millions of euros)

Spent fuel management

7,176

11,822

18,998

239

2,488

2,727

amount unrelated to the operating cycle ● Long-term radioactive waste management BACK-END NUCLEAR CYCLE EXPENSES Decommissioning of nuclear plants in operation Decommissioning of shut-down nuclear plants

5,094

30,486 42,308 18,986

35,580 54,578 19,693

12,270

707

2,756

4,644 3,410

7,400 4,258

Last cores

848

DECOMMISSIONING AND LAST CORE EXPENSES 31,351 Over a 20-year and 50-year horizon, 22% and 40% respectively of cumulative disbursements (at year-end economic conditions) will concern long-term radioactive * waste management provisions, and 47% and 96% respectively will concern decommissioning provisions. 4,311 27,040

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EDF - UNIVERSAL REGISTRATION DOCUMENT 2020