The Group benefits from commitments as lessor in operating leases amounting to €770 million.
These commitments mainly concern the Asian Independent Power Projects (IPPs) and real estate leases.
Operating sale commitments received exclude energy deliveries and principally concern firm orders made through contracts recorded on a percentage-of-completion basis at Framatome (construction and engineering contracts) and EDF Renewables (agreements for operation services, maintenance services, and development and sale of structured assets).
Operating guarantees received primarily concern EDF and relate to guarantees received from suppliers, particularly in connection with deliveries under the ARENH system.
In the course of its business, the EDF group has signed long-term contracts to supply electricity as follows:
| 31/12/2019 | 31/12/2018 | ||||
|---|---|---|---|---|---|
| Maturity | |||||
| (in millions of euros) | Total | < 1 year | 1-5 years | > 5 years | Total |
| INVESTMENT COMMITMENTS RECEIVED | INVESTMENT COMMITMENTS RECEIVED 31/12/2019 181 | INVESTMENT COMMITMENTS RECEIVED 31/12/2018 60 | 121 | - | 183 |
Under the terms of the agreement signed with Exelon on 29 July 2013 and finalised on 1 April 2014, EDF had an option to sell its investment in CENG to Exelon at fair value, exercisable between January 2016 and June 2022. On 20 November 2019 EDF notified Exelon that it had decided to exercise this option (see note 3.2.2).
| 31/12/2019 | 31/12/2018 | ||||
|---|---|---|---|---|---|
| Maturity | |||||
| (in millions of euros) | Total | < 1 an | 1-5 years | > 5 years | Total |
| FINANCING COMMITMENTS RECEIVED | FINANCING COMMITMENTS RECEIVED 31/12/2019 22 | FINANCING COMMITMENTS RECEIVED 31/12/2018 6 | 6 | 10 | 30 |
In addition to the matters reported in note 4.2 and 4.3, the principal contingent liabilities at 31 December 2019 are the following.
For the period 2008 to 2017, EDF was notified of proposed tax adjustments, notably concerning the tax-deductibility of certain long-term liabilities. This recurrent reassessment, which is applied for each year, represents a cumulative financial risk of some €556 million in income taxes at 31 December 2019. In two rulings made in 2017 and another in 2019, Montreuil Administrative Court recognised the tax-deductibility of these liabilities and validated the position taken by the Company. The Minister appealed against two of these rulings. In January 2020, the Versailles Administrative Court upheld EDF’s position for the year 2008.
For the years 2012 to 2017, the French tax authorities notified the Company of certain recurrent tax reassessments concerning the Cotisation sur la Valeur ajoutée des Entreprises (tax on corporate value added) and questioned the deductibility of long-term provisions.
Following the tax inspections of EDF International for the years 2009 to 2014, the French tax authorities questioned the valuation of the bond convertible into shares issued to refinance the acquisition of British Energy. The total amount concerned is approximately €310 million. EDF International has contested this reassessment, and considers it has good chances of winning the dispute.
In a judgement of 2 July 2019, Montreuil Administrative Court confirmed the related tax readjustments for the period 2009-2013. The Company has therefore paid the tax in execution of this decision, which it has also appealed. The amount concerned has been recorded in deferred tax assets, in accordance with IFRIC 23 (see note 17.3).
EDF and its subsidiaries are party to a number of labour lawsuits. The Group considers that none of these lawsuits, individually, is likely to have a significant impact on its financial results or financial position. However, because they relate to situations that could concern a large number of EDF’s employees in France, any increase in such litigations could have a potentially negative impact on the Group’s financial position.
