EDF_REGISTRATION_DOCUMENT_2017

6.

FINANCIAL STATEMENTS Income Statement

Impairment 23.4.2 The Alpiq Group is operating in a difficult market environment with notably low wholesale prices. Also, Alpiq has no access to final customers on the non-liberalised Swiss market. This unfavourable context has affected the profitability of its generation capacities in Switzerland, where the proportion of baseload energy is high, and capacities have been penalised by the downward revision of long-term market prices. In March 2016, Alpiq therefore announced implementation of structural measures in traditional energy generation to reduce exposure to wholesale prices. When it published its half-year 2017 financial statements on 28 August 2017, Alpiq once again stressed the two factors affecting the profitability of its traditional generation assets: stagnation of market prices at low levels, and asymmetrical regulation of the Swiss electricity market. However, since these risks had already been taken into account, no additional impairment was recognised by Alpiq during the first half-year 2017. In legislative developments, a referendum in Switzerland on 21 May 2017 approved the energy law aiming to phase out nuclear power and increase clean energies.

The “Energy Strategy 2050” bill provides for progressive replacement of electricity produced by the country’s five nuclear power plants by renewable energies. Switzerland has said it will not build any more new nuclear power plants, but that existing plants can remain in operation as long as they are guaranteed to be safe. This energy law had already been approved by the Swiss Parliament in September 2016. It is the end product of a long process, as Switzerland first announced its decision to abandon nuclear power and stop developing new nuclear plants in 2011. Currently, since the publication of Alpiq’s half-year results in August 2017, the Group is not aware of any factors indicating a risk of further impairment of its investment in Alpiq at 31 December 2017. The Group will continue to closely monitor the effective implementation of Alpiq’s action plans and changes in the market context and regulatory environment in Switzerland. Should the Alpiq group recognise impairment in its annual 2017 consolidated financial statements, due to be published on 26 March 2018, the EDF group would reflect that in its half-year 2018 financial statements.

INVENTORIES NOTE 24

The carrying value of inventories, broken down by nature, is as follows:

31/12/2017

31/12/2016

Gross value 10,831

Provision Net value Gross value

Provision Net value

(in millions of euros)

Nuclear fuel Other fuel

(15)

10,816

10,923

(19)

10,904

906

(7)

899

1,281 1,413

(5)

1,276 1,117

Other raw materials

1,526

(283)

1,243

(296)

Work-in-progress for production of goods and services

494 768

(48) (34)

446 734

197 711

(46) (58)

151 653

Other inventories

14,525

(387)

14,138

14,525

(424)

14,101

TOTAL INVENTORIES

The more-than-one-year portion mainly concerns nuclear fuel inventories amounting to €7,932 million at 31 December 2017 (€8,182 million at 31 December 2016).

The value of EDF Trading’s inventories stated at market value is €179 million at 31 December 2017 (€492 million at 31 December 2016).

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EDF I Reference Document 2017