EDF / 2020 Universal Registration Document

6 FINANCIAL STATEMENTS Notes to the financial statements

Depreciation, amortisation and impairment of intangible Note 17 and tangible fixed assets

Cumulative amount at 31/12/2020

Cumulative amount at 31/12/2019

Increases

Decreases

(in millions of euros)

Software

1,175

283

32

1,426

Other

130

12

2

140

Intangible assets Land and buildings

1,305 7,576

295 344

34 62

1,566 7,858

Nuclear power plants *

41,534

2,895

2,271

42,158

Machinery and plant other than networks

8,997

638

327

9,308

EDF-owned networks

532

31

-

563

Other

1,133

143

124

1,152

Property, plant and equipment owned by EDF

59,772

4,051

2,784

61,039

Land and buildings

6,618 1,084 1,264

146

10 13 21

6,754 1,104 1,328

Machinery and plant other than networks

33 85

Concession networks

Other

10

1

-

11

Property, plant and equipment operated under concessions

8,976

265

44 35

9,197

Tangible assets in progress

94

25

84

TOTAL DEPRECIATION, AMORTISATION AND IMPAIRMENT 71,886 The change in depreciation of nuclear power plants in 2020 is mainly explained by derecognition of assets related to Fessenheim following the plant’s permanent * closure in the first half of 2020, and the effect of the change in real discount rate at 31 December 2020 on impairment of assets associated with the provisions on those plants. 70,147 4,636 2,897

17.1

Impairment tests on assets

loading date in late 2022, and revised the estimated construction cost to €12.4 billion (in 2015 euros), an increase of €1.5 billion from the previous estimate, mainly caused by exceptional additional costs for repairing penetration welds. The test assumes that these additional costs will be mainly included in operating expenses. The year-end impairment test, like the test at 30 June 2020, indicates that the recoverable value is lower than at 31 December 2019, but the headroom over the book value remains significant. As well as the unfavourable macro-economic environment (long-term and medium-term price scenarios, WACC), calculation of the recoverable value notably includes revised assumptions for electricity output and the higher cost of the Grand Carénage programme (particularly as a result of the Covid-19 pandemic), in line with announcements made by EDF, and conversely the favourable effects of the national recovery plan on generation taxes. The key assumptions in the test still concern the useful life of nuclear assets, the long-term price scenario, the discount rate, changes in costs and investments, and the capacity revenue. Each of these assumptions was subjected to sensitivity analyses and the results did not call into question the existence of a positive difference between the book value and recoverable value.

Due to the integrated management and interdependence of the different generation facilities that make up EDF’s fleet (nuclear, thermal and hydropower plants), independently of their maximum technical capacities, EDF considers the entire fleet as a single CGU. Even when there is no indication of any loss of value, an impairment test is performed due to the highly significant value of this CGU in the financial statements and its substantial exposure to market prices since the “yellow” and “green” regulated tariffs were discontinued on 1 January 2016. The recoverable value of the generation fleet is estimated by discounting future cash flows under the Company’s usual methodology, described in note 1.6, over the assets’ useful life, using an after-tax WACC of 5.2% at 31 December 2020. For nuclear assets currently in operation, EDF’s benchmark model assumes that the useful life is 50 years, in line with its industrial strategy. It also incorporates the proposals for early shutdown of two 900MW nuclear reactors, as set out in France’s multi-year energy plan. The impairment test takes into consideration the latest forecasts concerning Flamanville 3 (see note 2.2.1), which adjusted the project schedule, setting the fuel

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EDF - UNIVERSAL REGISTRATION DOCUMENT 2020