Universal Registration Document 2020

6. Financial statements

Note 12 Other operating expenses

Other operating expenses amount to €2,738 million in 2020 (€2,241 million in 2019) and notably include losses on non-recoverable receivables, royalties on software, costs relating to Energy Savings Certificates used or consumed over the year, the netbook value of assets demolished or scrapped, and additional remuneration paid to producers of electricity from renewable sources.

The increase in other operating expenses is notably explained by higher costs relating to Energy Savings Certificates and the increase in the additional remuneration paid to producers of electricity from renewable sources. This additional remuneration was introduced by France’s law on the Energy Transition for green growth. It is a support mechanism intended to guarantee reasonable remuneration for producers who sell their energy directly on the markets, by compensating for the differential between there venues from those sales and a reference amount. This mechanism complements the purchase obligation system.

Note 13 Financial result

(in millions of euros)

2020

2019

Income from investments (1)

Income from investments (1)

2020

1,782

Income from investments (1)

2019

1,427

Income from other securities and receivables related to fixed assets(2)

Income from other securities and receivables related to fixed assets(2)

2020

638

Income from other securities and receivables related to fixed assets(2)

2019

757

Interest and similar income and expenses

Interest and similar income and expenses

2020

(1,408)

Interest and similar income and expenses

2019

(1,483)

  • Expenses on long-term financial liabilities after hedging
  • Expenses on long-term financial liabilities after hedging

2020

(1,717)

  • Expenses on long-term financial liabilities after hedging

2019

(1,822)

  • Other
  • Other

2020

309

  • Other

2019

339

Foreign exchange result

Foreign exchange result

2020

(232)

Foreign exchange result

2019

(145)

Gains and losses on sales of marketable securities

Gains and losses on sales of marketable securities

2020

(106)

Gains and losses on sales of marketable securities

2019

(70)

Increases/Decreases in provisions and transfers of charges:

Increases/Decreases in provisions and transfers of charges:

2020

(3,177)

Increases/Decreases in provisions and transfers of charges:

2019

(2,187)

  • Discount expense on employee benefits
  • Discount expense on employee benefits

2020

(395)

  • Discount expense on employee benefits

2019

(614)

  • Discount expense on nuclear provisions (3)
  • Discount expense on nuclear provisions (3)

2020

(2,558)

  • Discount expense on nuclear provisions (3)

2019

(1,988)

  • Provision on investment securities (4)
  • Provision on investment securities (4)

2020

(49)

  • Provision on investment securities (4)

2019

550

  • Reversals from provisions, impairment and transfers of charges
  • Reversals from provisions, impairment and transfers of charges

2020

535

  • Reversals from provisions, impairment and transfers of charges

2019

485

FINANCIAL RESULT

FINANCIAL RESULT

2020

(2,503)

FINANCIAL RESULT

2019

(1,701)

(1) The change in dividends received principally concerns:

  • Enedis (€508 million in 2020 and €556 million in 2019);
  • C3 Holding (the holding company which carries EDF Investissements Groupe) (€149 million in 2020 and €156 million in 2019);
  • EDF Holding (the holding company which carries EDF Trading) (€443 million in 2020, no equivalent in 2019);
  • PEI (€94 million in 2020 and €88 million in 2019);
  • EDF Immo (€72 million in 2020 and €241 million in 2019);
  • CTE (€184 million in 2020 and €157 million in 2019);
  • EDEV (€72 million in 2020 and €38 million in 2019);
  • Framatome (€47 million in 2020 and €36 million in 2019).

(2) In 2020, this item includes income of €6 million (€24 million in 2019) for the cost of bearing the CSPE financial receivable.

(3) In 2020, the discount expense on nuclear provisions increased, due to the effect of a lower real discount rate than the previous year (this rate was 2.1% at 31 December 2020, 2.3% at 31 December 2019 and 2.4% at 31 December 2018) (see note 28.5.1).

(4) The change is principally due to less favourable financial market trends in 2020 than 2019.

Note 14 Exceptional result

At 31 December 2020, exceptional items resulted in net income of €425 million. The main items were the following:

  • net gains of €780 million on sales of investment securities included in dedicated assets, undertaken in the course of operational portfolio management;
  • net reversals of €175 million from excess tax depreciation;
  • recognition of a provision for tax litigation of €(538) million following the Council of State’s decision of 11 December 2020 (see note 31). For the period 2008 to 2017, EDF was notified of proposed tax adjustments, notably concerning the tax-deductibility of certain long-term liabilities. As stated in the 2019 financial statements, this recurrent reassessment, which is applied for each year, represented a cumulative financial risk of some €556 million in income taxes at 31 December 2019. In two rulings made in 2017 and one in 2019, MontreuilAdministrative 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 Appeal Court up held EDF’s position for the year 2008, but the Minister again appealed. In a decision of 11 December 2020 the Council of State overturned the Versailles court’s decision and sent the case back before the same court.

At 31 December 2019, exceptional items resulted in net income of €547 million. The main items were the following:

  • net gains of €619 million on sales of investment securities included in dedicated assets, undertaken in the course of operational portfolio management;
  • net reversals of €144 million from excess tax depreciation.