MANAGEMENT REPORT 2010Page 1 sur 137 Contents Contents..................................................................................................................................... 2 1 Financial and legal information ........................................................................................... 3 1.1 Key figures .......................................................................................................................... 4 1.2 Economic Environment and Significant Events .............................................................. 6 1.3 Introduction to analysis of results for 2010 ................................................................... 22 1.4 Principal accounting methods sensitive to the use of estimates and judgments ......... 22 1.5 Segment reporting of financial information .................................................................. 23 1.6 Analysis of the consolidated income statements for 2010 and 2009 ............................ 24 1.7 Breakdown of EBIT by geographical area .................................................................... 33 1.8 Net indebtedness, cash flow and investments ................................................................ 44 1.9 Management and control of market risks ...................................................................... 49 1.10 Provisions ........................................................................................................................ 68 1.11 Off balance sheet commitments (commitments given) ............................................... 69 1.12 Subsequent events .......................................................................................................... 69 1.13 Transactions with related parties ................................................................................. 69 1.14 Principal risks and uncertainties .................................................................................. 69 1.15 Significant events related to litigation in process ........................................................ 70 1.16 Financial outlook for 2011 ............................................................................................. 77 1.17 Research and development ............................................................................................ 78 1.18 General information on EDF’s capital and governance bodies ................................. 80 2 Social and environmental information .............................................................................. 94 2.1 Social and environmental policy ..................................................................................... 94 2.2 Environmental information ............................................................................................. 96 2.3 Company information .................................................................................................... 107 3 Résolutions proposed to the combined Ordinary and Extraordinary Shareholders’ Meeting of May 24, 2011 ...................................................................................................... 128 3.1 Presentation of the resolutions proposed to the combined Ordinary and Extraordinary Shareholders’ Meeting of May 24, 2011 ................................................... 128 3.2 Draft resolutions to be submitted to the combined Ordinary and Extraordinary Shareholders’ Meeting of May 24, 2011 ............................................................................. 130 Page 2 sur 137 1 Financial and legal information 2010 was marked by three major operations concerning the Group’s scope of activity, which like changes of accounting method and presentation affect financial statement comparability between 2009 and 2010. The ongoing disposal of EnBW and reclassification of the company as a "Discontinued operation" has led to adjustments to the comparative information as published in 2009. These operations are: Sale of the British regulated and deregulated distribution networks, completed on October 29, 2010. The British networks' contribution to the Group’s net income (particularly sales and EBITDA) and cash flows thus corresponds to 10 months in 2010 as opposed to 12 months for the comparative 2009 figures reported. Completion of this sale led to derecognition of balance sheet items related to the British networks, and a €6.7 billion decline in consolidated net indebtedness at December 31, 2010. The sale of EnBW, approved by the Board of Directors on December 6, 2010. EnBW’s contribution to the Group’s net income is now reported in a single line “Net income of discontinued operations”, and it therefore makes no contribution to consolidated sales or EBITDA for 2009 and 2010. However, its contribution is still included in Group net income. Similarly, EnBW’s contribution to the change in cash flows is reported on a specific line for discontinued operations for both years presented. In the balance sheet, the assets and liabilities of discontinued operations are reported on a specific line in 2010 but not adjusted for 2009. The impact of the sale of EnBW on the Group’s financial indebtedness will not be recognized until completion of the sale, which is expected to take place by the end of April 2011 at the latest. Application of the equity method for RTE. On December 31, 2010, the French government appointed two further representatives to the Supervisory Board of RTE. This leaves only 4 representatives on the 12-member Board for EDF, which therefore no longer has control over RTE. As a result the equity method is applied to RTE as of December 31, 2010. The Group’s income statement (EBITDA in particular), cash flows and investments reflect RTE’s contribution for 2010 (the 2009 figures presented are as previously published), but the consolidated balance sheet at December 31, 2010 includes RTE in “Investments in associates”, making net indebtedness €6.3 billion lower than in 2009. This decrease includes deduction of the Group’s receivable on RTE, reflecting the share of EDF’s external indebtedness corresponding to financing of RTE. The consolidated financial statements also have the specificity of including the provisional consolidated financial statements of Edison, as Edison’s Board of Directors’ meeting to approve the 2010 financial statements has been deferred to a date after February 14, 2011. Page 3 sur 137 (5) +17.102 311 3. 2010 EBITDA would amount to €17. the net income of discontinued operations is reported on a specific line in the income statement.902 3.9 +11.2 -73.6 +2.003 million. The definition of this item has been revised in 2010: it corresponds to the Group’s share of net income excluding non-recurring items and the net change in fair value on Energy and Commodity derivatives.2%).961 2009 59.165 16. Page 4 sur 137 .8(1) (1) The EBITDA growth target announced by the Group for 2010 excludes the impact of the laws extending the TaRTAM transition tariff system beyond June 30.2 +4.9 -64.882 403 Variation (%) +10. IFRIC 12 “Service Concession Agreements” and IFRS 5 "Non-current assets held for sale and discontinued operations”.240 1. 2011. €1.306 5. net income contributed by non-controlling interests and the net income of discontinued operations.1. excluding trading activities (see note 2 to the consolidated financial statements). net of tax (see 1.074 million higher than in 2009 (organic growth of 5.623 6.558 6.066 -3. 2010 to June 30.929 9.025 694 -3. The comparative figures for 2009 have been restated for the effect of application of IFRIC 18 “Transfers of Assets from Customers”. as well as the change in the consolidated income statement presentation of the effect of net changes in fair value on Energy and Commodity Derivatives.4 -32. 2010 are as follows. Without the corresponding provisions. (3) In application of IFRS 5.020 3.6. (4) Net income excluding non-recurring items is not defined by IFRS and is not directly visible in the consolidated income statements. Extracts from the consolidated income statements Variation (in millions of euros) Sales Operating profit before depreciation and amortization (EBITDA) Operating profit (EBIT) Income before taxes of consolidated companies (2) Net income of discontinued operations (3) EDF net income Net income excluding non-recurring items (4) 2010 65. excluding trading activities.1 Key figures The figures presented in this document are taken from the EDF group’s consolidated financial statements.814 380 1.2% based on constant exchange rates and scope of consolidation. (2) The income before taxes of consolidated companies corresponds to the EDF group’s net income before income taxes. the share in net income of associates.10).140 15.3(5) Organic growth (%) +4.4 +22. Key figures at December 31.288 69 -2. and is not directly comparable with indicators of the same name reported by other companies. 2010.229 240.944 17.0 (1) EDF uses operating cash flow to assess the Group’s capacity to generate free cash flow.107 (1.333 16.914) 2.844 32.241 52.237 240.992 54.161 54. less net financial expenses disbursed and income taxes paid. (1) 2010 123. Page 5 sur 137 .559 31. also known as Funds From Operations (FFO).914 2.591 34.9 -30. This indicator.285 million of available-for-sale financial assets and €0 million of financial assets at fair value.829) (9.735) (28) 42. 2010) are also treated as a reduction in net indebtedness. 2010.496 (2) Variation Variation (%) -11. less cash and cash equivalents and liquid assets.3 -86.295 47.446 11.285) (1) 2009 53. It comprises total loans and financial liabilities.745 1.611 11. (3) At December 31.8 96.538 million of available-for-sale financial assets and €197 million of financial assets at fair value.209 50.776 39.1 -6. (2) Including hedging derivatives and the financial liabilities of companies held for sale.317 5.153 -4.550 -1.475 51.777 49 (4.147 32. Liquid assets are financial assets consisting of funds or securities with initial maturity of over three months that are readily convertible into cash regardless of their maturity and are managed according to a liquidity-oriented policy.333 47. other liquid assets and loan to RTE Assets classified as held for sale (excluding cash) Total assets Equity (EDF share) Non controlling interests Special concession liabilities Provisions Loans and other financial liabilities (2) Other liabilities Liabilities related to assets classified as held for sale (excluding loans and other financial liabilities) Total equity and liabilities (1) Including cash and cash equivalents of companies held for sale. (4) Net indebtedness is not defined in the accounting standards and is not directly visible in the consolidated balance sheets.367 240.868 373 (6.320 9.389 -19. The definition of net indebtedness has been revised in 2010 to include the Group’s loans to RTE.035 29. (2) €4.619 -8.091 -324 2.1 (1) €9.877 57.586 41. loans by the Group to RTE (accounted for by the equity method as of December 31.891 4.Extracts from the consolidated balance sheets (in millions of euros) Non-current assets Inventories and trade receivables Other assets Cash and cash equivalents.847 411 240. 2009 Variation Variation (%) Net indebtedness 2010 (in millions of euros) Loans and other financial liabilities Derivatives used to hedge liabilities Cash and cash equivalents Liquid assets Loan to RTE (3) Net indebtedness of discontinued operations Net indebtedness (4) 47.457 -11 0. Operating cash flow is not an aggregate defined by IFRS as a measure of financial performance.982) (4. is equivalent to net cash flow from operating activities excluding changes in working capital (Cash flow statement) after adjustment for the impact of non-recurring items.035 Operating cash flow 2010 (in millions of euros) Operating cash flow (1) 11.559 2009 147. which is accounted for by the equity method from December 31. 2.7% observed in 2009. Euro-zone GDP had fallen by 4% (after a +0.8% respectively (following respective declines of 2.1.1.5% over the year. There was noticeable economic growth in Germany in 2010: +3.1% in 2009. in contrast. OECD2 countries registered a 2. At the date of publication.7% rise in the Euro zone as export opportunities declined and many countries introduced measures to consolidate public finances.4% in the final quarter. In 2009.1 GDP growth 1 After a 3. December 2010.5% increase in 2008).4% rise in economic activity in 2010. figures for the final quarter of 2010.2.6% downturn in 2009 caused by the recession that affected the world economy from the autumn of 2008. at 1. Page 6 sur 137 . 2010 GDP growth was close to average for the zone. In France and the UK. and a 1. are still estimates. although the growth slowed gradually as the months passed. registered modest growth of +1% in 2010 compared to the substantial negative growth of -5. driven by resilient household consumption. Italy’s GDP.1 Economic environment 1.5% and 5% in 2009). 2 Organisation for Economic Cooperation and Development. and by extension the annual figures. from +0. This reflects both the recovery in the US economy. 1 Source: Note de conjoncture INSEE. in contrast to the -4.2 Economic Environment and Significant Events 1.8% in the first quarter to +0.6% and 1. 3% +0. which brought down generation costs for coal-fired plants.4 +1. and also in response to expectations of the supply-demand balance for electricity. 5 France: average EPD 2010 then 2011 annual contract price. 2010/2009 Average peakload price for 2010 (€/MWh) Average variation in peakload prices.2.2.6 75.3 -4. A rise ensued late in the year in the wake of coal and gas prices.3% +11. In the United Kingdom. next-day (spot) prices for electricity in Europe were higher overall than in 2009 against a background of generally rising fossil fuel prices.8% In 2010. In Italy. Page 7 sur 137 . (combined-cycle gas in 1.5%4 from 2009) associated with the economic recovery and the harsh winter weather at the start and end of the year.1% 47. which led to a 20% increase in generation costs at coal-fired plants between 2009 and 2010. 3 France: Average previous day EPEXSPOT price for same-day delivery.2 Forward electricity prices in France and the United Kingdom 5 France Average baseload price for 2010 (€/MWh) Average variation in baseload prices.9% 59 55.1. prices initially retreated in anticipation of a more relaxed supplydemand balance for the coming winter and also as a result of the dollar’s decline against the euro.3 +10. the less pronounced price increase compared to other European countries is explained by expanding interconnection capacities between zones and commissioning of more flexible fossil-fired There was no clear trend in 2010 in forward electricity prices.2% -6.1. In the United Kingdom.2% 69. 2010/2009 UK 52. €13. In France. 4 Source: RTE.1.4% +17. During the second half-year. Italy: Average previous day GME (PUN) price for same-day delivery.7% 59.2 Trends in market prices for electricity and the principal energy sources 1. the United Kingdom and Italy3 France Average baseload price for 2010 (€/MWh) Average variation in baseload prices. 2010/2009 UK Italy power plants particular).2.0 -3.6/MWh higher than in 2009 as a result of higher gas prices. United Kingdom: Average previous day EDF Trading OTC price for same-day delivery. April 2010 then April 2011 (in the UK.1.1 Spot electricity prices in France. The rise in spot electricity prices also reflects the higher coal prices. the annual “April Ahead” baseload contract price moved in line with forward gas prices. price rises were particularly attributable to the increase in spot gas prices.2.3% 52.2 64. 2010/2009 Average peakload price for 2010 (€/MWh) Average variation in peakload prices. which fluctuated with changes in fossil fuel and CO2 emission quota prices. UK: ICE average annual contract prices. In France. spot prices rose following the increase in electricity consumption in 2010 (up by +5.5 48.3/MWh. ending the year at €59.0 +2.7 +1. the 2011 annual contract price followed the same pattern as coal and gas prices during the first half of 2010: a downturn early in the year followed by a recovery in the second quarter. annual contract deliveries take place from April 1 to March 31).2. 6 37.2. which made oil prices attractive for European buyers. At the end of the year. Gas prices for the North British Pool (NBP) were 59.1% 122. to an average €14. for delivery starting from October in the UK (NBP) (pence/therm).1.1% over 2009.3/bl in 2010.2. 7 Coal: Average ICE index for the first annual contract. After a decline in the first quarter of 2010 when inventories were plentiful in Europe. Oil: Brent first reference crude oil barrel.5/t in 2010. 2010.9 94. coal prices saw an upturn due to strongly rising Asian demand. and fluctuating supplies from Norway in the summer.1% 94.2/t at December 31. very similar to 2009 levels. Annual average price for 2010 Average price variation.1 122. After falling below €10/t early in 2009 due to the economic crisis and the lower emission output associated with slower industrial activity.3/t.5 59.0 46. which is now competing with European demand for coal from South Africa and Colombia.3 48. Brent prices rose in 2010.4 Fossil fuel prices7 Coal ($/t) Oil ($/bl) Natural gas (p/th) the weather conditions in Australia constrained the supply-demand balance for the next few months.2 + 28.1.2.3% in 2010 compared to 2009 prices. 2010/2009 Highest price in 2010 Lowest price in 2010 Closing price. The price of coal stood at $122. up by 28.5 87. The price of natural gas under the United Kingdom’s annual contract was 48p/th on average in 2010.2 85.8 Forward prices for coal (the API2 index for Europe) rose by 19.3 CO2 emission quota prices6 The price of CO2 emission quotas for delivery in December rose by 8.1. The average price of oil (Brent) was $80. 1. prices then increased: market participants began to purchase quotas in anticipation of the objective for greater cuts in CO2 emissions from 2013. but then recovered when gas stocks were low following particularly harsh winters.0 + 19. procurement problems caused primarily by 6 Average ECX index for the first annual contract of Phase II (2008-2012).2.1% in 2010 compared to 2009 to an average $99.8/bl. Forward gas prices began the year by continuing the downward trend of 2009 due to abundant supplies. Natural gas: Average ICE index for the first annual contract. 2010 99.8 + 2% 60. IPE index (front month) ($/barrel).6 77.8 69. The year-end Brent price was $94. 2009 Closing price. Apart from a dip in spring reflecting the fears over demand for oil aroused by the economic crisis in Europe. Page 8 sur 137 .8p/th at the end of the year. for delivery in Europe (CIF ARA) ($/t). The rise was driven by growth in Asia and the dollar’s decline against the euro in the second half of the year.3 80. annual contract (ICE) for delivery for the United Kingdom (£/therm) Jan-10 Jan-09 May-10 Nov-09 Nov-10 Sep-10 Jul-09 Sep-09 Jul-10 Page 9 sur 137 .ICE All datas are owned by ICE (theice.6 0.45 0.IPE index (front month) in $/bl £/ therm $/ bl 75 65 55 45 35 Natural Gas .55 0.annual contract .5 0.phase 2008-2012 .com) Mar-09 Natural gas and oil prices 105 95 85 0.com) Mar-10 Nov-10 Jul-09 Sep-09 Jul-10 Sep-10 Jan-09 Jan-10 Brent first reference crude oil barrel .Forward electricity prices in France and the United Kingdom 70 65 60 €/MWh 55 50 45 40 35 30 May-09 May-10 Nov-09 Electricity-annual baseload contract France EPEX Electricity-annual baseload contract United Kingdom .3 Mar-09 May-09 Mar-10 All datas are owned by ICE (theice.com) €/t CO2 Nov-09 Mar-10 Nov-10 Jan-09 Jan-10 All datas are owned by ICE (theice.ICE Sep-10 Jul-09 Sep-09 Jul-10 Mar-09 CO2 emission quota prices (Phase II. 2008-2012) 19 17 15 13 11 9 7 5 May-09 May-10 CO2 .35 0.4 0. 5% higher than for 2009.2. Estimated national electricity consumption for 2010 in the United Kingdom was stable compared to 2009 (approximately 331 TWh).5% from 2009. 4. electricity consumption by large industrial customers rose again in 2010 (+3%). 5. 2006. Data for the United Kingdom are from the Department of Trade & Industry.3 TWh.4 Electricity and natural gas sales tariffs The French governmental decision of August 12. Growth was relatively buoyant in the first half of 2010 and more moderate in the second half-year.1. Data for Italy are supplied by UCTE for the first 9 months and estimates for the last 3 months. although it did not return to its pre-crisis level.6% on March 26. 2009 replacing the TURPE 2 tariffs in force since January 1. This growth was driven by all customer segments. Household consumption showed a slight increase (+2%). The TaRTAM transition tariff was raised by 0. In line with the TURPE 310 indexing adopted by the French Government in a decision of June 5. French prices are 25-35% below the European average. 2010. Its natural gas tariffs for residential customers were reduced by 3.8% tariff reduction for residential customers in March 2009). while it rose in Italy9 (approximately 326 TWh). 1.1. network access tariffs were increased on August 1. 2010 set the average rise in regulated electricity sales tariffs from August 15.5% for transmission.3 TWh before adjustments.5% for the “green” tariff. The tariff changes of 2010 were a continuation of the tariff reform announced by the authorities in 2009.8% (excluding the effects of the TaRTAM transition tariff system): 3% for the “blue” tariff for residential customers. consumption reached 490 TWh. 2010 at 3. 2009.2. 9 Final figure for 2009: 320. Page 10 sur 137 .4% for distribution and 2.6% in October 2010 (after a reduction in contractual sale prices for industrial customers and the 8. 10 The Tarifs d’Utilisation du Réseau Public de distribution d’électricité. 4% for the “blue” tariff for non-residential customers. In the United Kingdom. EDF Energy raised its electricity tariffs by 2. After adjustment for weather effects. delivery and supply). 2010 by 3. up by 2. Data for France are from RTE’s Electricity Report for 2010 and internal data. 2010 (after a previous reduction of over 6% in October 2009). the reform aims to make electricity tariffs a closer reflection of the true costs of electricity consumed by each type of customer (generation. and thus remain among the lowest in Europe after the 2010 increases.3 Electricity consumption8 The domestic electricity consumption of France for 2010 totaled 513.5% for the “yellow” tariff and 5.6% compared to 2008).1. Following the significant decline of 2009 (-8. or TURPE 3 network access tariffs took effect on August 1. To achieve 8 equitable treatment for all customers.6% from September 17. Temperatures in December were exceptionally low. Taken from Météo France’s Weather Database. A wave of cold weather swept across France in late November. Page 11 sur 137 . with January and February recording several strikingly cold spells.3°C lower than normal seasonal levels. 11 Map comparing average temperatures with normal levels over 30 years (1971-2000 for Western Europe and 1961-1990 for Eastern Europe).5°C respectively and were also lower than in the same periods of 2009.2. Relatively low average temperatures were observed across all of Northern Europe and the British Isles. notably in early October and November. with variances of -0.5. along with 1996. Despite some mild periods.1.1.9°C and -0.1 Temperatures Temperature variance from normal levels. January to December 2010 11 2010 was the coldest year of the last two decades in France.5 Weather conditions 1.2. Spring and summer temperatures remained lower than normal.1. the average overall temperature for the autumn was still below normal. Temperatures in the first quarter were an average 2. 3°C below normal on average. 1.2 Rainfall Rainfall: Variance from normal: annual average. especially in Spain and Portugal. rainfall in 2010 was close to normal along the Atlantic coast countries (from France to Scandinavia. including Germany and the UK). resulting in close-to-normal hydropower output (94%). 12 Map comparing average rainfall with normal levels over 30 years (1971-2000 for Western Europe and 19611990 for Eastern Europe). Rainfall in France was fairly typical. Page 12 sur 137 .5. Frequent rainfall circulation in the Mediterranean in the first half of the year caused surplus rainfall in the south of Europe.1. Central and Eastern Europe had surplus rainfall over the whole of 2010.2. January to December 2010 12 Across all of Europe. Taken from Météo France’s Weather Database. EDF signed agreements with two of China’s largest nuclear operators in order to consolidate its position in the country. 1. eliminates the outstanding put option that entitled CEG to sell EDF certain nonnuclear generation assets for a maximum $2 billion and enabled EDF to take full control over UniStar Nuclear Energy (Unistar).01% ownership and EDF 49. EDF and CEG implemented a comprehensive agreement restructuring the companies' collaboration.2 Significant events 13/14 1. EDF paid €140 million to CEG and agreed to transfer to CEG 3.99%. in the province of Zealand.5 million of these shares were transferred during November 2010. The agreement. If EDF and DELTA decide to take the project further. thus becoming the sole shareholder of UniStar. 1. 1.1. 14 The 2009 Document de Référence and a full list of press releases are available from the EDF website: www.1.1.2 EDF/Enel/Ansaldo agreement On April 9. 2010.2. The agreement entered into with CNNC (China National Nuclear Corporation) aims to strengthen the engineering cooperation with EDF that began with construction of the Daya Bay and Ling Ao nuclear plants (Guangdong).1 Agreement between EDF and Constellation Energy Group (CEG) On November 3. In exchange for these transactions.edf.2.1 Development activities worldwide of nuclear remains unchanged: CEG holds 50. The current ownership structure of CENG (Constellation Energy Nuclear Group) 13 Significant events related to litigation are described in chapter 14. Page 13 sur 137 .com. a joint venture previously owned 50/50 by EDF and CEG that manages development projects for EPR-type nuclear power plants in the United States (the first project concerns the Calvert Cliffs 3 site in Maryland). Ginna in New York State to UniStar. 2010.2.1 Strategic developments 1.1. Under the terms of the agreement.2.2.2. EDF.2.1.2. 2010.3 New agreements with Chinese partners On April 29.1.2. with transfer of the remaining 1.2.2.4 EDF-DELTA agreement On November 3.1. 1.2. CEG undertook to transfer potential new nuclear sites at Nine Mile Point and R. 2010.1. E. who could have energy drawing rights. EDF acquired CEG’s 50% stake in UniStar. confirming the Group’s involvement in the worldwide nuclear industry’s most extensive construction program. approved by EDF’s Boards of Directors on October 26.5 million of its shares in CEG. EDF and the Dutch energy company DELTA signed an agreement to collaborate on the future development of a potential second nuclear power plant in Borssele. Enel and Ansaldo Energia signed a partnership agreement to specify areas of potential cooperation for development and construction of four EPR-type nuclear reactors in Italy. 2010. they will probably seek to work with other investing parties.2. The partnership agreement signed with CGNPC (China Guangdong Nuclear Power Holding Company) complements the 2008 joint venture agreement for construction and operation of two EPRtype nuclear reactors in Taishan (Guangdong province).1.0 million shares conditional on CEG’s sale of the sites named above.1. 2. representing a total transaction value of €4.1. 2010. as chief operator.1.2. British Energy’s Board of Directors decided to extend the operating lifetime of its Heysham 1 and Hartlepool nuclear plants by 5 years to 2019. including visits to industrial sites in both countries. Executive committees will be set up for each area of collaboration. GDF Suez withdrew from the project. to be supervised by a joint EDF-Rosatom strategic committee. In view of these factors. the EDF group was due to begin renegotiation of its shareholders’ agreement with OEW. OEW. Full deployment of EDF Energy’s Plant Lifetime Extension (PLEX) is also due to extend the lifetimes of all Advanced Gas Reactor (AGR) plants by an average of 5 years and 20 years in the case of Sizewell B (PWR). EDF’s Board of Directors decided to continue preparations for the Penly 3 project up to the final investment decision.2.7 billion.2.5 per share. The agreement also covers cooperation in the form of exchanges of experience and training. Page 14 sur 137 . uncertain economic background. 2010.1 Germany Sale of EnBW The political authorities of BadenWürttemberg wanted to give EnBW a strong regional ownership structure to refocus the company’s activities in its region. co-controller of EnBW.6 Extension of plant lifetimes in the United Kingdom Following the UK government’s landmark announcements in December 2010 on the reform of its domestic electricity market. EDF and Rosatom (Russian Federation) signed an agreement for cooperation in the fields of research and development.2.5 Cooperation between EDF and Rosatom agreement continuing with other potential industrial partners. The offer includes no representations and warranties from EDF group in respect of the EnBW’s liabilities. 2010 and is approximately 6 15 On June 19.1.Württemberg region’s offer to buy its 45.2.01% interest in EnBW at the price of €41.1. This offer represents a 18.7 EDF: operator of the Penly 3 EPR EDF. with settlement of the balance due in April 2011 at the latest. discussions are in EDF’s 25. Meanwhile. stating that the consultation had been properly conducted. and will also act as architect-assembler. the other shareholder in EnBW.1. 1.5 per share paid on December 16.6% premium over EnBW’s closing share price at December 3. This firm offer comprised an initial downpayment of €1. This renegotiation would have taken place against a complex. decided not to sell its Subordinated shares15 to the region and not to exercise its preemption rights on EDF International’s stake in EnBW. after 10 years of cooperation. 2010.2.2. nuclear fuel and nuclear facilities already in existence or under construction.1. 2010.1. 2010 and accepted the Baden. In September 2010. Following the Board’s decision.2.001% of the capital. 2010.1.2 Developments European positions 1. The national commission for public consultation submitted its report on the discussions on September 24. 1. an application for a decree authorizing creation of the plant was filed on December 2.2. presented the Penly 3 project in the public consultation procedure that ran from March 24 to July 24. 1. EDF’s Board of Directors met on December 6.2. subject to specific rules. 2010.1. At its meeting of October 26.2. EDF will hold the responsibility of nuclear operator. is selling its share of the electricity produced on the wholesale market through its subsidiary EDF Trading.3.7 billion).2. The purchase took place after three shareholders exercised all or part of the put option granted to them by the shareholder agreement applicable when EDF acquired control of SPE. This transaction reduced the EDF group's debt by approximately €6. Ownership of the Eggborough coal-fired plant was transferred with effect from March 31.1.1. 1.5 Developments in the natural gas business 1.2.1. Petersburg concerning EDF’s investment in South Stream AG. 1.2.1.2. EDF increased its holding in the Belgian utility company to 63. the company formed for the gas pipeline project under the Black Sea.2. 2010. 1.2.2. for an equity value of £3.7 billion.2.5%. 2010 in St. 1.2.2. 1.2 Transfer of ownership of the Eggborough coal-fired plant At the time of British Energy’s restructuring in 2005.2.2.2. The Memorandum stipulates that EDF will join the project through a reduction in ENI’s stake in South Stream AG and that EDF’s share will be at least 10%.2 billion (€3.1 networks Sale of distribution 1.2. 2010.2. EDF.2.2. valid for exercise until August 31. The terms of this option were unaffected by EDF’s takeover of British Energy in January 2009. a supplier of energy and environmental services fully-owned by the EDF group and the Russian electricity company Inter Rao.2.2. Negotiations are continuing between the parties to finalize Page 15 sur 137 Following the approval received from the European Commission and the French Minister of the Economy on the recommendation of France’s Commission for Investments and Transfers.5. which owns 50% of the installed capacity of this plant.2. particularly Belgium. Eggborough’s creditor banks were given a call option to acquire ownership of the plant.2. Fenice.969 MW).1.2. 2010 the EDF group and DELTA inaugurated the SLOE GCC power plant (870 MW). The SLOE plant also enables EDF to diversify its energy mix in the Benelux countries by extending the Group’s generating facilities in the region.3.2.1 Gazoduc South Stream EDF.5% of the shares in SPE for the price of €215 million in June 2010. signed an agreement in March 2010 to form a joint-venture named Interenergoeffect to develop energy efficiency projects in Russia.1.4 Italy – Fenice / Inter Rao agreement As part of a more general framework agreement entered into by EDF and Inter Rao in November 2009. .2.1. and it was exercised in August 2009. EDF and EDF Energy finalized the transfer of the British regulated and deregulated electricity distribution networks to the Cheung Kong Group (CKI) on October 29. through its subsidiary EDF Belgium (which holds 50% of the drawing rights to the Tihange 1 nuclear power plant) and its majority interest in SPE (with a diversified fleet generating a total 1.3 Benelux 1.2 Start-up of SLOE in the Netherlands On February 12.2. ENI and Gazprom signed a memorandum of understanding on June 19. 2009.2.2 United Kingdom 1.times EnBW’s estimated EBITDA for 2011.1 Purchase of shares from certain minority shareholders of SPE With the purchase of 12.2.2.2.1.1. including 500 MWp of photovoltaic solar power.2. especially the tripartite shareholder pact. At December 31.923 MW gross at the end of the year. Greece (+64 MW).2.2. 1. to a total 2. the company that operates the facility under a 25-year concession arrangement with the Government of Laos. EDF EN also continued to develop its photovoltaic solar power activities. The Processing-Recycling agreement defines the contractual terms for the period 20082012 and the principles governing prices and investments for subsequent periods.2 Discovery of gas in Norway by Edison Edison announced on September 16. with estimated reserves of between 5 and 18 billion m3. the owner and operator of the plant. 2008 setting forth the principles governing back-end cycle contracts for the post-2007 period.2.1. New windpower plants were commissioned. but also as a shareholder in Nam Theun 2.2. EDF participated in this project not only as turnkey constructor. 1. 1.the terms of the contracts required for implementation of the agreement.1.Développement-Vente d’Actifs Structurés. raising its holding in the company to 40%.2 EDF Energies Nouvelles EDF Energies Nouvelles is aiming to reach a net installed capacity of 4. plus a further 163 MWp under construction including capacities under construction for the Development and Sale of Structured Assets16 activity.2. and operations at Saint Laurent A”.2. EDF Energies Nouvelles increased its windpower generation capacity by 273 MW during 2010.2. the Group acquired a further 5% of the capital of Nam Theun 2 Power Company (NTPC).3.5.3 Reinforcing renewable energies and environmentally-friendly technologies 1. 2010. the UK (+50 MW).070 MW in early May 2010 marked the completion of construction of this major project for the EDF group in South-East Asia. mainly in Italy (+74 MW). Page 16 sur 137 . EDF and Areva signed two contracts on July 12.1. 2010. commissioning 186 MWp during the year primarily in Italy. Edison has official “operator” status for the Norwegian plateau. In September.2. Turkey (+34 MW).3. The plant was inaugurated on December 9. 1.1 EDF/Areva agreements In application of the agreement of December 19. after which the government will become the plant owner. they have no material impact on the Group’s consolidated financial statements.2 Activities in France 1.2. Canada. This agreement stipulates that 16 DVAS .1. 2010 that it had discovered a gas field in the Norwegian sea.1 Commissioning of the Nam Theun 2 hydroelectric plant in Laos The commissioning of the Nam Theun 2 hydroelectric plant with total capacity of 1.2. Spain and Greece. 2010 entitled the “EDF-Areva NC Processing-Recycling agreement” and the “Settlement agreement for recovery and conditioning of EDF waste.2.2. France (+21 MW) and Mexico (+30 MW). EDF and Areva also signed an agreement extending operation of the Eurodif enrichment plant until the end of 2012 and laying down the operating conditions for 2011-2012. France. As the effects of these new agreements had already been anticipated based on the previous agreements. the final shutdown and decommissioning of the Areva NC plant at La Hague. its solar capacity in operation totaled 267 MWp gross.200 MW by the end of 2012.2. 000 MW over 2011-2012 to supply electricity to customers.2. EDF signed two amendments to the 2008 agreement with Exeltium. with EDF supplying the electricity over the period.discontinuation of the “yellow” and “green” tariffs for business customers from 2015. Page 17 sur 137 .1 “NOME” Law on the New electricity market organization in France The French “NOME” law on the New electricity market organization was enacted on December 7. 2010. and electricity supplies for the first unit of the EDFExeltium agreement (for approximately 150 TWh) began on May 1. . for which the price will be set by government decision. 2006 to cover long-term nuclear commitments. of the deadline for building up the dedicated assets portfolio17. The basic principles of this law. Deliveries for the second tranche of the agreement are scheduled to start in the early part of 2011. 1. 17 Assets built up in compliance with the Law of June 28.1.2.peakload consumption management.continuation of the “blue” tariff for residential and small business customers.7 billion in late April.2.2.Accès Régulé à l’Electricité Nucléaire Historique). 2010. The implementation decrees are expected to be issued in 2011. ultimately requiring all suppliers to have the flexibility to renegotiate deliveries or guarantee sufficient production to supply all their customers. This applies the principle of regulated access to historical nuclear energy (ARENH .deferral by 5 years. to June 29.3 Exeltium On March 25. Key milestones have been reached. In compliance with the agreement.2. Engineering work was more than 70% complete at the end of 2010. 2010. which is intended to encourage greater competition on the electricity market in France.3.2.2. Exeltium settled its first advance of €1.2. These agreements cover volumes of some 311 TWh. including completion of the discharge tunnel. The target date for production of the first commercially viable power output is now set at 2014. resolution of difficulties with the reinforcement and liner.2 Flamanville 3 Significant progress has been made on the Flamanville EPR project.2. by allowing other suppliers temporary access (for no more than 100 TWh) to EDF’s baseload nuclear energy output until 2025. 1. 1.3.3 Regulatory environment 1.1 France 1. .development of competition.2. the calculation method will be modified from 2015 in accordance with the principle of “regulated access to historical nuclear energy”. start-up of electromechanical facilities on the nuclear island and good progress in the machine room. are: . with construction costs reestimated at some €5 billion. and ultimately a total of 2. . 2016.2.Eurodif will start operating at its minimum technical capacity as soon as possible. .000 MW. It also provides EDF with an additional 1.2. 300 MW and average annual generation output of 6. primarily due to rising windpower and solar power output covered by purchase obligations. Consumers will not be able to leave the transition tariff before the December 31.58/MWh based on current tariffs).150 MW out of the total 4. Since 2007.2. 2010. 2010 by French parliament members Diefenbacher and Launay. France’s 2011 Budget (Loi de finances) of December 29. The CSPE is collected directly from the final customer. published in France’s Official Gazette (Journal Officiel) of December 10. It had been set at €4. In addition.2. and set forth the conditions in which customers wishing to benefit from this prolongation could do so.2 Prolongation of the TaRTAM transition tariff system The French Law of June 7. €115 million of which concern the first half of 2011. 1. limited by the law of February 10.5/MWh since January 1. The measures concern ten concessions with a combined power of approximately 5. 2010. amounting to €2. 2011. In such cases. 1. The shortfall.8 TWh or 15% of EDF’s total gross hydropower output.2.300 MW). 2010 and the NOME law successively extended the TaRTAM transition tariff system until the effective date of the principle of regulated access to historical nuclear energy (ARENH .8 billion at December 31. The State has decided to renew half of these concessions early (2.The impact of this law on the transition tariff (TaRTAM) system is described below. these renewals represent total power of some 4. suspended the obligation to purchase photovoltaic solar power for three months. 2010. an Page 18 sur 137 .2.2. is borne solely by EDF. 1.4 Hydropower concessions On April 22. The impact of application of these laws on the 2010 consolidated financial statements is a net increase of €380 million to provisions. 2000 to a maximum of 7% of the variable portion of the “blue” tariff (i. the unit amount proposed by the CRE automatically applies at January 1 subject to a maximum increase of €3/MWh.Accès Régulé à l’Electricité Nucléaire Historique).2. the French Ministry of Ecology.5/MWh since 2004. As a result. which stressed the need for full coverage of the costs incurred by EDF to carry out its public service missions.3. Sustainable Development and the Sea announced the scope and timetable for renewal of hydropower concessions through a tendering process between now and 2015.3 The CSPE The Contribution to the public electricity service (Contribution au service public de l’électricité or CSPE) is intended to compensate for certain public service charges assigned to EDF in particular.1. a decree of December 9.3.1. Energy. 2010 deadline or change the tariff parameters during the same period unless there are favorable sustainable changes in activity at a site. 2010. The government will use this period for consultation and to establish a new regulation framework for better control over growth in this field of activity. CSPE income has been unable to cover expenses.e. the unit CSPE has amounted to €7. except for projects of less than 3kW.300 MW or 20% of the French hydropower fleet’s power. which the Group expects to be June 30.3. This law abolished the legal limit on the CSPE and stated that if the government does not issue a decision in response to the French energy regulator CRE’s proposal. 2011. 2010 reformed the CSPE system. €5. partly in response to a report issued on September 28.1. For EDF. which have been rising regularly. which governs constitution of dedicated assets. Chair of ERDF’s Management Board.3 billion of RTE’s indebtedness in the Group’s financial statements at December 31. Hervé Machenaud. Chairman and Chief Executive Officer. the EDF group allocated 50% of shares in RTE-EDF Transport to its portfolio of dedicated assets. Chief Page 19 sur 137 The decree of February 2007 on secure financing of nuclear expenses.2. 2010 are: Henri Proglio. Vincent de Rivaz. Group Senior Executive Vice President. Chief Executive of EDF Energy.4. Human Resources. the EDF group no longer has a majority on RTE’s Supervisory Board. Corporate Risk Management and Corporate Audit. the Group's investment in RTE is accounted for under the equity method from December 31.2. calls for tender should be spread over the 2013-2015 period. replacing representatives of EDF. This operation was approved by the Board of Directors on December 14.2. and Alain Tchernonog.2. Philippe Méchet. Gas and Renewable Energy sources.3. The allocation of 50% of RTE shares diversifies EDF’s dedicated asset portfolio 18 while reducing its volatility.1 Executive Committee On February 4. Depending on the concessions. Given the existence of significant influence. Anne Le Lorier.2. Activities Coordination in France. . 1. Catherine Gros. Director of Institutional Relations. This led to deconsolidation of €6.2. Deputy Group Executive Vice President. The value of the shares in RTE-EDF Transport allocated to dedicated assets is €2.2. whose members are the members of the COMEX plus: Michèle Bellon. Customers.2. Group Senior Executive Vice President.indemnity is payable to compensate the outgoing operator. Optimisation and Trading.1. Group Senior Executive Vice President. This gives the French government 4 members on the Board. 2010. Pierre Lederer. Group Senior Executive Vice President.4. Gas. Thomas Piquemal. Marianne Laigneau. the EDF group formed a new management team headed by Henri Proglio. Denis Lépée. 1. As a result. 2010 appointed two further representatives of the French government to the Supervisory Board of RTE. Group Senior Executive Vice President. 1. Information Systems. 2010 which took effect on December 31. Umberto Quadrino. and therefore no longer has exclusive control over RTE’s operating and financial policies as defined by IAS 27. 2010. 2010. the same number as EDF and employee representatives respectively. Finance. Group Communications. Infrastructure assets such as RTE-EDF Transport have predictable profitability and low correlation with other categories of financial assets such as equities or bonds. Deputy Group Executive Vice President. Deputy Group Executive Vice President. Advisor to the Chairman. was amended by the decree of December 29. Jean-Louis Mathias. General Secretary.2 General Management The Chairman and Chief Executive Officer Henri Proglio heads the EDF group’s Management Committee. is Secretary to the Executive Committee. Generation and Engineering.4 Governance 1. At the same date. The members of the Group’s Executive Committee (COMEX) at December 31.3 billion. 2010 and has received the required administrative authorizations18. Bruno Lescoeur. 2010. particularly through its representative members on the Supervisory Board. RTE-EDF Transport remains wholly-owned by EDF.5 Change in governance of RTE and allocation of 50% of RTE shares to dedicated assets A decree of December 31. the rates for validation by additional public pension schemes of previously-earned entitlements became permanent. 2010. An amendment to the national personnel regulations will be required before the new “active work” classification criteria can come into force.discontinuation of special early retirement based on the number of children.2. 1.5 Human Resources 1.4. to employees hired on or after January 1. Gérard Wolf. Denis Lépée is Secretary to the Management Committee and Alain Tchernonog chairs the committee in the absence of the Chairman and CEO.2.2. 2009 who would no longer benefit from the advantages of “active work” status. 1. the French government sent the Board of Directors of the CNIEG (the pension body for France’s electricity and gas sector) a proposal for a decree to affiliate electricity and gas sector (IEG) status employees to the standard national pension system for public sector workers. 2017). As part of the earlier 2008 pension reform. This coverage is applicable from January 1. 1.Executive Officer of Edison. 2011. 2010.5.a progressive 2-year rise in the official retirement age.2. nonsedentary) classification. for all employees who will only qualify for a pension after January 1.3 Total remuneration An “EDF SA 2011 individual pay measures” agreement was signed on December 23. . The overall average increase including all Page 20 sur 137 . 2010 concerning the way the system takes into consideration the specificities of different businesses defined new criteria for attribution of “active work” (i. 2010 to complement the sector’s general measures recommended by employers on November 30. Negotiations for additional compulsory healthcare coverage ended led to the sector-specific agreement of June 4.2. 2017. The purpose of this is to better reflect current working conditions.2.1 Employee protection In the wake of the French pension reform law of November 9. However.5. in compliance with the February 2005 pension coverage agreements with the public pension bodies AGIRC and ARRCO. the Sector-specific Agreement of April 16.2 Working hours The negotiations begun at EDF SA in 2009 concerning the working hours of executives (as defined by French law) have been suspended for the time being. replacing Bruno Bézard.2.5. They mainly concern: . these measures will only apply to the IEG sector from 2017. 2010.3 Board of Directors Jean-Dominique Comolli was appointed as a member of the EDF Board of Directors representing the French government by decree of September 29.2. the age for automatic qualification for a full pension and the maximum age at which an employee must retire. 2010.2. They were raised to the maximum values possible under the agreements. 1. In 2010. Deputy Group Executive Vice President in charge of International Activities. and set up a system attributing paid leave entitlements.e. to be taken after qualifying for retirement. The increase in the number of contributions required to qualify for a full pension will also apply directly and automatically to the special IEG pension regime (165 quarters will be required from July 1.2. On November 10.2. PERCO: Plan d’Epargne pour la Retraite Collectif. two new agreements were signed concerning EDF SA’s contribution to the Group’s Corporate Savings Plan (PEG) and the Group’s collective pension fund plan (PERCO19) for 2011.95%. These policies.2. The agreement is intended to stimulate social mobility at EDF (by training leading to promotions. 2010. 19 PEG: Plan d’Epargne Entreprise.4 Renewal of skills The “Training Challenge” (Défi Formation) agreement signed on September 10. 2010. 2010 by all unions representing EDF employees is a significant milestone in the Group’s ambitions for employee relations in France (EDF SA. will be progressively rolled out to other countries.general and individual pay measures is 3.6 Group financing Details of all financing operations by the Group can be found in note 38 to the consolidated financial statements at December 31. RTE). ERDF. and block release programs) and introduce Academies and an EDF Campus to foster innovation and training. The terms of the employer’s contribution to match the payments made to the PEG and PERCO were maintained unchanged. 1.2.2. Page 21 sur 137 . currently being introduced by the Group in France.2. 2010.7 Scope of consolidation The main changes in the scope of consolidation are presented in note 5 to the consolidated financial statements at December 31. 1.5. 1.2. In application of IFRS 5. income and expenses recorded for the period. the figures in future financial statements may differ significantly from current estimates. The impact of application of IFRS 5 on the figures published in 2009 is presented in note 2 to the consolidated financial statements and almost entirely relates to the sale of EnBW. the EDF group’s consolidated financial statements at December 31. best estimates and assumptions in determining the value of assets and liabilities. 2010. These international standards are IAS (International Accounting Standards).1. 2010. and positive and negative contingencies at year-end. 2010 are prepared under the international accounting standards published by the IASB and approved by the European Union for application at December 31.4 Principal accounting methods sensitive to the use of estimates and judgments The preparation of the financial statements requires the use of judgments. excluding trading activities (see note 2 to the consolidated financial statements). the net income of activities held for sale is presented on a separate line in the income statement for the years presented. IFRS 5.3 Introduction to analysis of results for 2010 Pursuant to European regulation 1606/2002 of July 19. IFRIC 12 “Service Concession Agreements”. The comparative figures for 2009 have been restated for the effect of application of IFRIC 18 “Transfers of Assets from Customers”. The principal sensitive accounting methods involving use of estimates and judgments are described in note 1 to the consolidated financial statements at December 31. 1. IFRS (International Financial Reporting Standards) and interpretations issued by the SIC and IFRIC. 2002 on the adoption of international accounting standards. Page 22 sur 137 . "Non- current assets held for sale and discontinued activities" and the change in the consolidated income statement presentation of the net changes in fair value on Energy and Commodity Derivatives. If there are changes in the assumptions used or actual economic conditions differ from current year-end conditions. which refers to EDF. . which covers EDF International and the other gas and electricity entities located principally in continental Europe. particularly the Edison subgroup. the former “Germany” segment is a discontinued operation and is no longer reported as an operating segment. Latin America and Asia .“United Kingdom”. “Operating segments”. . network activities (Distribution and Transmission) and French island activities. The reporting segments used by the Group are: . .“Other Activities”.1. including EDF Trading. which covers entities located in Italy. Segment reporting is determined before consolidation adjustments and intersegment eliminations. comprising the deregulated activities (mainly Generation and Supply).“Other International”. Dalkia.“Italy”. RTEEDF Transport and ERDF. which groups together all the Group’s other subsidiaries and investments. In accordance with IFRS 8.“France”. but also in the USA. Tiru. Following the sale of EnBW which has yet to be completed. which comprises the entities of the EDF Energy subgroup including British Energy and EDF Development UK Ltd. Electricité de Strasbourg and EDF Investissements Groupe. EDF Energies Nouvelles.5 Segment reporting of financial information Segment reporting presentation complies with IFRS 8. TDE and Fenice. Intersegment transactions take place at market prices. Page 23 sur 137 . . the breakdown used by the EDF group corresponds to the operating segments as regularly reviewed by the Group’s Management Committee. 306 (4. excluding trading activities Net depreciation and amortization Net increases in provisions for renewal of property.079) 134 380 1.929 539 (6.6.902) 3.213) (10. 2010 Operating profit before depreciation and amortization (EBITDA) Net changes in fair value on Energy and Commodity derivatives.708) (2.814 (1.796) (428) (1.090 2009 59.1.14 2.582) (11.55 (490) (49) 173 9.140 (22.426) 15.902 2.426) 1.020 0.14 The Group’s net income excluding non-recurring income and net changes in the fair value of Energy and Commodity derivatives (excluding trading activities) net of taxes amounted to €3.204) 5.10).202 (380) - 16.55 0.422) (3.165 (26.623 15 (7.102 (1.249 229 1.743) (801) 6.961 million in 2010 (€3.227) 3. plant and equipment operated under concessions Impairment/Reversals Other income and expenses Operating profit (EBIT) Financial result Income before taxes of consolidated companies Income taxes Share in income of associates Net income of discontinued operations Net income Net income attributable to non-controlling interests EDF net income Net earnings per share in euros Diluted earnings per share in euros 2010 65. Page 24 sur 137 .6 Analysis of the consolidated income statements for 2010 and 2009 Years ended December 31 (in millions of euros) Sales Fuel and energy purchases Other external expenses Personnel expenses Taxes other than income taxes Other operating income and expenses Prolongation of the TaRTAM system – Laws of June 7 and December 7.590) (10.021) (10.432) 104 311 4.240 (4.085 183 3.558 million in 2009) (see 1. 0 +99. there is no impact on the scope effect.8 +4. sales showed an organic decline of 4. essentially attributable to the rise of the pound sterling and the Polish and Brazilian currencies against the euro. partly offset by sales of UK networks in October 2010. Excluding these effects.6%) 2010 36.1 points) primarily due to higher nuclear power output.025 Variation (%) +6.167 10. This growth includes favorable foreign exchange effects of €748 million or +1.9 +16.140 Variation +2. In France. Electricity sales benefited from favorable volume effects (+4.870 3. driven mainly by central Europe. 2010 sales showed organic growth of +6.1 Sales 10. chiefly in electricity sales.586 million (+4.2% rise in consolidated sales (organic growth of 4.2% compared to 2009.683 5.998 65.9 +15.236 4.4%.7 +10. Other International and Other Activities segments) registered a 15.0 +2.3%. Page 25 sur 137 .1 -4.165 2009 34.1 -4. Changes in the scope of consolidation20 totaled €2.075 11. Sales excluding France (the United Kingdom.517 25. 20 In application of IFRS 5. the higher volumes in the electricity and hydrocarbons segments more than compensated for the reduction in average unit sales prices.4 +15.2 Organic growth (%) +6. The higher level of sales by the Other Activities segment (organic growth of +5.1%. Italy.442 5. EnBW has been reclassified as a “Discontinued operation” for both 2009 and 2010. 21 The organic growth or decline is the change in Group business that does not incorporate the positive or negative effects of changes in the scope of consolidation (acquisitions or disposals of subsidiaries) or in exchange rates or accounting methods. As a result.790 28. In Italy (organic growth of +15.436 +273 +3. Sales by the Other International segment showed organic growth of 1. The organic growth in sales outside France excluding changes in the scope of consolidation and foreign exchange effects was 2.0%) mainly reflects the business growth at EDF Energies Nouvelles and Dalkia.933 +6.8%).6.7% increase which incorporates the consolidation of SPE and CENG at the end of 2009 and the opposite effect of sale of the UK networks in October 2010.8 +1. organic growth21 stood at +4.4 +5. and favorable price effects (+2 points) resulting principally from the tariff rises of August 2009 and 2010.4% due to unfavorable price effects and a downturn in nuclear generation.6 In millions of euros France United Kingdom Italy Other International Other Activities Total excluding France Group sales The EDF group’s consolidated sales totaled €65. a rise of 10.4%.4 +4.647 6.878 5.1.6%. and mainly concern the acquisitions of SPE in Belgium and CENG in the United States in late 2009.092 -553 +777 +3. In the United Kingdom.165 million for 2010.065 59.4%). Changes in the scope of consolidation between 2009 and 2010 were the major factor in the difference. compared to 42.5% of total consolidated sales. sales outside France represented 44. Page 26 sur 137 .4% in 2009.although this was partly offset by lower sales at EDF Trading22. 22 EDF Trading sales consist of trading margins. In 2010. Outside France.526 15.1. mostly associated with the acquisitions of SPE and CENG in late 2009.2%.9% of consolidated EBITDA for 2010 (59% in 2009).6 +2.3%).4 +4.2% excluding prolongation of the TaRTAM – laws of June 7 and December 7.014 6.623 million. but EBITDA showed organic growth in the Other International segment.025 +694 +10.4 +4.403 3. EBITDA registered organic growth of 11.165 EBITDA 16.623 59. partly counterbalanced by the sale of the UK networks in 2010. Foreign exchange effects amounted to +€199 million (+1. This includes a €380 million provision in view of the successive prolongations of the TaRTAM transition tariff system to the second half of 2010.0 -7.8 Consolidated EBITDA for 2010 amounted to €16. then the first half of 2011 (Laws of June 7.7%.2 EBITDA Consolidated EBITDA up by 4.1 +2.8 +0.929 +6. Excluding the impact of successive prolongations of the TaRTAM transition tariff system to the second half of 2010 and first half of 2011.8% (and 5. EBITDA was up by 7.140 15.063 795 654 2. Without the impact of this factor.2 +4.8 +65.8%). particularly central Europe and other European Page 27 sur 137 .732 801 1. up by 4.4 Organic growth (%) +7.7 -5.4%. 2010 and December 7. organic growth would be 5.9 +0.1 -4. including the effect of consolidation of SPE and CENG late in 2009 and the sale of UK networks in 2010. EBITDA decreased by 0. The effects of changes in the scope of consolidation 2010 In millions of euros France United Kingdom Italy Other International Other activities Total excluding France Group EBITDA 10. mainly attributable to nuclear output and the favorable effect of the weather on network activities. the organic change stood at -4. 2010).6 +8.6 -0. 2010) 2010 2009 Variation Variation (%) Organic growth (%) In millions of euros Sales 65.499 16.124 2. with organic growth of 2.623 amounted to €42 million (+0.4%.7 -6. France contributed 60.4% from 2009 (organic growth of 2. 2009 9.929 Variation +721 -331 +6 +430 -132 -27 +694 Variation (%) +7.7% compared to 2009.084 1.1%.882 6.2%) resulting essentially from rises in the pound sterling and the Polish and Brazilian currencies against the euro.7 -10.6. On a like-for-like basis. The United Kingdom and Other Activities (where the effect was unfavorable for EDF Trading but favorable for EDF Energies Nouvelles) registered an organic decline.8 In France. 2 Other external expenses Other external expenses amounted to €10. The Group's EBITDA/sales ratio stood at 25.6% in 2010 against 27. other external expenses decreased by 2.2. 1.5% corresponding to organic growth of 4.countries (Belgium.3%.6.6. with organic growth of +1. corresponding to organic growth of 4.3% in 2009) and the Other International segment (15.0%.2. This organic growth was mainly concentrated in Italy. 1. Page 28 sur 137 . which was partly counterbalanced by the step-up in maintenance for the generation fleets. up by €714 million (+6. where it reflected the increase in gas volumes as thermoelectric and industrial requirements rose. mainly reflecting rising pension charges due to inclusion of actuarial losses in profit and loss.8% (organic rise of 7. Outside France. This increase relates to the reversal in 2009 of the FACE23 provision (€324 million.7%.4%). the increase in personnel expenses stood at 19. mainly for EDF Trading and.6%.1 Fuel and energy purchases Fuel and energy purchases amounted to €26.3% in 2009) but up in France (28.6. The organic growth stood at 18.0% in 2009). mainly in France.2% in 2010 against 16. they rose by 24. corresponding to one year’s contribution to electrification work in rural areas) after the introduction of the TURPE 3 network access tariffs.9% in 2009.2.582 million. 1.021 million. 1.2. following a fall in supply costs on the wholesale electricity and gas markets. the Netherlands and Austria).2% from 2009 with organic growth at 4.2%. corresponding to organic growth of 10. This essentially results from the lower level of storm-related costs in 2010.6% in 2009).5% in 2010 compared to 26. The ratio was also down in the United Kingdom (25. Outside France. the 2.3 Personnel expenses Personnel expenses totaled €11.5% in 2009). The decrease was particularly noticeable in the Other Activities segment (32. largely driven by business growth at EDF Energies Nouvelles. 23 Fond d’Amortissement des Charges d’Electrification (sinking fund for electrification charges).8% in 2010 against 19. other external expenses increased by 13.6.2%. fuel and energy purchases rose by +3. Italy (14.422 million.and electricity purchases expanded to take advantage of low prices and optimize industrial margins.8% increase mainly results from the higher workforce numbers associated with skill renewal and pay rises. including the effect of consolidation of SPE and CENG. In France.5% in 2010 against 36. particularly at ERDF. up by 15. In France. fuel and energy purchases were down in the United Kingdom.4 Taxes other than income taxes Taxes other than income taxes rose by €325 million.6%) higher than in 2009. In France.5%. €369 million (+3. In contrast.7%) compared to 2009. essentially as a result of the increase in energy purchases under purchase obligations. There was organic growth in the Other Activities segment.2% in the UK.3%. Outside France. to a smaller degree.0% in 2010 against 27. 5 Other operating income and expenses Other operating income and expenses generated income of €3. other operating income and expenses were positive at €2.6. an expense of €380 million was recorded in 2010 following prolongations of the TaRTAM transition tariff system to the second half of 2010 and then the first half of 2011 (Laws of June 7. Outside France. 2010 and December 7. Page 29 sur 137 . and the rise in the Other Activities segment mainly reflects the gain on disposal of Usti by Dalkia in the Czech Republic. down by €112 million -3.2. 1. other operating income and expenses were positive and rising.4%).090 million in 2010. 2010 and December 7. which benefited from the sale of the Eggborough plant and a favorable change in provisions for doubtful receivables.6.1. with a favorable impact of €228 million on a like-for-like basis.466 million.6. a decline of €241 million (8.2. 2010).5%) from 2009 (organic decline of 0. Prolongation of the TaRTAM transition tariff system (Laws of June 7. In France. The rise was chiefly concentrated in the United Kingdom.9%) explained primarily by various indemnities received in 2009 that were higher than in 2010. The rise in Italy is attributable to the early termination indemnity recorded by Edison on the end of the subsidy system for certain CIP6 plants. 2010) In France. 1.6.3 -12.9 EBIT totaled €6.796) (490) (49) 173 9.7 n.7. they mainly included the gain on transfer of Emosson dam drawing rights to Alpiq. reduction of the basis for valuation of excluding trading activities assets renewable during the term of the The net changes in fair value on Energy concession.743 million of impairments 2009 to €15 million in 2010.6. Net changes in fair value on attributable to ERDF and relates to Energy and Commodity derivatives. plant and equipment operated under concessions Impairment/reversals Other income and expenses Operating profit (EBIT) 16. the United recorded separately from the items hedged. Most of these recorded in 2010 principally concerns the changes relate to hedging operations United States (€929 million).4 Impairments volatility.066 Variation (%) +4.s. plant and equipment operated under concessions between 2009 and 2010 is 1.5 -12.4 n. plant and equipment operated under concessions The €62 million decrease in net increases in provisions for renewal of property.3.743) (801) 6.9% from 2009 or an organic variation of -33. they include the unfavorable effect of a provision of €750 million for risks related to all the Group's Italian activities (see section 1.7 n.3 EBIT EBIT down by 32.3.6. and Commodity derivatives.s. down by 32. amortization The €630 million increase in net depreciation and amortization is principally attributable to the effect of consolidation of SPE and CENG from late 2009 and the organic growth in depreciation and amortization.3.3.1. n. -33. Net depreciation and segments. In 2010.623 15 (7. which was particularly noticeable in France and at EDF Energies Nouvelles.s.6. 1. In 2009.929 539 (6. Kingdom segment (€397 million) and to a lesser extent the Other Activities and Italy 1.240 million for 2010.306 Variation +694 -524 -630 +62 -1.3. excluding trading activities Net depreciation and amortization Net increases in provisions for renewal of property. +5.6.3. -32.240 2009 15.3). compared to net income of €173 million in 2009.9% 2010 In millions of euros EBITDA Net changes in fair value on Energy and Commodity derivatives.1. n.s.694 -974 -3. decreased from €539 million in The €1. +9. Net increases in provisions for renewal of property.9 Organic growth (%) +2.9%.426) (428) (1.2. Page 30 sur 137 . excluding trading activities with their intrinsic 1.6.8 n.3.s.s.5 Other income and expenses Other income and expenses resulted in a net expense of €801 million in 2010. 6.5 Income taxes Income taxes amounted to €1. 1.997) 1.1%. 24 Gain on disposal of the heat company PT and revaluation of the existing investment in the Prague electricity distributor PRE. Page 31 sur 137 . up by €30 million from 2009.754) (3. corresponding to an effective tax rate of 28. concerning the United Kingdom.426) 2009 (2. .4 Financial result In millions of euros Cost of gross financial indebtedness Discount expense Discount expense Other financial income and expenses Financial result 2010 (2. 1.a favorable €140 million change in other financial income and expenses. the effective tax rate is 29.204) Variation -225 -137 +140 -222 Variation (%) +8.6 Share in net income of associates The Group’s share in net income of associates was €134 million in 2010. France.1.a €137 million increase in discount expenses. primarily as a result of: . and impairment booked during the year. The increase in the effective tax rate between 2009 and 2010 chiefly relates to the provision for risks in the Italy segment.079 million in 2010. which was in the process of being sold at December 31.529) (2. application of the equity method to RTE at December 31.6 +5. The rate was adversely affected by taxation of certain components of the gain on sale of the Networks activities in the UK.3%) more than in 2009.9 +4. up by €69 million (+22.6 +10. €222 million (+5. caused mainly by the higher returns on assets funding long-term employee benefit obligations and capitalized borrowing costs (capitalized interest).7 Net operations income of discontinued In 2009 and 2010.6. The difference is largely due to unfavorable non-recurring items in 2009. It amounted to €380 million in 2010. this line reports the net income of EnBW.134) 1.3 The financial result for 2010 is a financial expense of €4. which only partly benefited from the favorable effects of disposal of the Networks in the United Kingdom in late 2010.6.6.426 million. corresponding to an effective tax rate of 59.8 Net income attributable to noncontrolling interests The net income attributable to noncontrolling interests amounted to €229 million in 2010. . and the impact of consolidation of CENG at the end of 2009. 2010 has no impact on the cost of indebtedness before 2011.462 (4. 1. Excluding these factors.a €225 million increase in the cost of gross indebtedness resulting from the higher average gross indebtedness. The tax charge for 2009 was €1.6%.322 (4.5%. however. EnBW benefited from its expansion in the electricity business and specific favorable factors such as gains on disposals corresponding to the PRE/PT operation24 and the sale of Geso. This increase mainly results from Centrica’s investment in 20% of Lake Acquisitions (which owns British Energy) and the consolidation of SPE from late 2009.2%).6. 1. €46 million more than in 2009. principally in the UK. 2010.432 million. 2010.961 million for 2010.1. Based on a constant scope of consolidation and exchange rates.8. less cash and cash equivalents and liquid assets. 27 Net indebtedness comprises total loans and financial liabilities. €403 million (+11. 2003.9 EDF net income EDF net income was €1. +€220 million for the reimbursement by the French State following cancellation of the European Commission’s decision of December 16. net of tax. net of tax (see 1. from €42. 1.496 million at December 31. The definition of this item has been revised in 2010: it corresponds to the Group’s share of net income excluding nonrecurring items and the net change in fair value on Energy and Commodity derivatives.6.902 million). and -€238 million of gains and losses on disposals.107 million in 2010.10 Net income recurring items25 excluding non- 1. The definition of net indebtedness has been revised in 2010 to reflect the Group’s loans to RTE.6. down by 73.389 million at December 31. impairment of securities and operating assets and various provisions. 26 +€344 million: +€362 million of net changes in fair value on Energy and Commodity derivatives excluding trading activities. Changes in net indebtedness are explained in section 1. which is accounted for under the equity method from December 31.6.3%) higher than for 2009. net of tax.9% from 2009 (€3. mainly comprising impairments and other operating income and expenses related to the United States and Italy and to the TaRTAM provision in France. Non-recurring items and the net change in fair value on Energy and Commodity derivatives excluding trading activities. 2009 to €34. Liquid assets are financial assets comprising funds and interest rate instruments with initial maturity of over three months that are readily convertible into cash regardless of their maturity and are managed according to a liquidityoriented policy. Non-recurring items and the net change in fair value on Energy and Commodity derivatives excluding trading activities.020 million for 2010.6.11 Net indebtedness27 The Group’s net indebtedness declined by €8. totaled -€2. the increase was 17.2%.10). 2010. Page 32 sur 137 . 25 Net income excluding non-recurring items is not defined by IFRS and is not directly visible in the consolidated income statements.941 million in 2010. totaled €344 million26 in 2009. excluding trading activities. The Group’s net income excluding nonrecurring items stood at €3. 122) 199 (1. plant and equipment operated under concessions Impairments/Reversals Other income and expenses OPERATING PROFIT (EBIT) France 34.870 (3.530) (937) (91) 43 Group 59.202 9.063 795 654 2.441) (6.827) (1.136 0 0 (27) 1.transition tariff OPERATING PROFIT BEFORE DEPRECIATION AND AMORTIZATION (EBITDA) Net changes in fair value on Energy and Commodity derivatives.236 (5.084 1.121) (81) 393 Italy 4. 2010.165 (26.442 (2.582) (11.167 (10.517 (988) (1.647 (4.276) (1.623 37 (4.466 (380) United Kingdom 10.140 (22.7 Breakdown of EBIT by geographical area The EDF group’s segment reporting principles are presented in note 8 to the consolidated financial statements at December 31.878 (4.073) (6.403 3.306 Page 33 sur 137 .374 0 (397) 45 799 0 (192) (750) (612) 0 (960) (96) (393) (2) (194) 0 1.536) (401) (203) (8) 73 Other International 3.649) 2.305) (75) 532 Italy 5. plant and equipment operated under concessions Impairments/Reversals Other income and expenses OPERATING PROFIT (EBIT) France 36.008) (1.075 (10.704 0 (43) 0 301 0 (6) (119) 286 (2) 0 (1) 1.240 In millions of euros 2009 SALES Fuel and energy purchases Other external expenses Personnel expenses Taxes other than income taxes Other operating income and expenses OPERATING PROFIT BEFORE DEPRECIATION AND AMORTIZATION (EBITDA) Net changes in fair value on Energy and Commodity derivatives.796) (488) 0 320 5.072 (428) (1.090 (380) 10.708) (2.879) (993) (96) 68 Group 65.021) (10.513) 0 (471) 157 (578) (111) (503) 15 (7. excluding trading activities Net depreciation and amortization Net increases in provisions for renewal of property.379) (1. The breakdown of EBIT by operating segment is as follows: In millions of euros 2010 SALES Fuel and energy purchases Other external expenses Personnel expenses Taxes other than income taxes Other operating income and expenses Prolongation of the TaRTAM.008) (420) (273) (73) (14) Other Activities 5.174) (2.227) 3.401) (2.732 801 1.743) (801) 6.361) (68) (1.339) (8.902) 3.707 United Kingdom 11.1. excluding trading activities Net depreciation and amortization Net increases in provisions for renewal of property.879 (490) (49) 173 9.929 23 (4.483) (8.790 (1.426) (426) 0 0 5.948) 2.405) (660) (511) (99) (119) Other Activities 5.124 2.882 16.985) (1.014 15.683 (5.213) (10.590) (10.422) (3.531) 7 (458) 34 (277) 276 (408) 539 (6.340) (428) (212) (9) 143 Other International 6. 1 TWh) and less use of nuclear modulation (0. Page 34 sur 137 .7.124 5.7. 29 Virtual Power Plant. Fossil-fired generation produced 17 TWh. 1. the Group’s net purchases on wholesale electricity markets declined compared to 2009.1 France In millions of euros Sales EBITDA EBIT 2010 36.4% (85. which covers EDF's Generation and Distribution activities in the island energy systems (IES). EDF’s share of the electricity market for all final customers was 83.075 9. +0.6 1.8% in 2009). 6.5% higher than in 2009 due to improved hydropower capability.7.7. The availability factor for the nuclear fleet improved from 78% in 2009 to 78.7 +4. 10. 1. Hydropower generation output totaled 39 TWh.1.167 10.1% more than for 2009.1 +7. Sales for the regulated activities include the delivery cost included in integrated tariffs (or invoiced directly to customers with CART/CARD28 contracts with the operators for the transmission and distribution networks respectively). The balance of net sales on the markets (including through VPP29 auctions) improved by 6.1. significantly less industrial action (13.8 TWh) in view of the slight economic upturn after the crisis of 2009.8 TWh from 2009.6 TWh) and sales due to 2010’s colder weather (+13.9% more than in 2009. more favorable environmental conditions for generation (1. The rise in demand (+8.2 Market opening At December 31. a positive development after three consecutive annual decreases. compared to 2009.092 +721 +238 Variation (%) +6. CARD: Contrats d'Acheminement avec le Réseau de Distribution. which are regulated via the network access tariff TURPE (Tarifs d’Utilisation des Réseaux Publics d’Electricité). This rise is almost entirely attributable to electricity sales. CART: Contrats d'Acheminement avec le Réseau de Transport . up from the 390 TWh generated in 2009.7 TWh in availability due to fewer shutdown extensions.5% in 2010. Supply and Optimization in mainland France.1. “Island activities”. “Regulated activities in mainland France” (Transmission and Distribution). 2010. Sales volumes to final customers were up by 2.5 TWh).403 5. Its market share for natural gas was 4% in 2010 (3. and sales of engineering and consulting services.167 million to Group sales.136 Variation +2.374 2009 34. The 28 increase is essentially attributable to a gain of some 2.2% in 2009). Due to the higher output. 1.1 Breakdown of financial information for the “France” segment The following breakdown is used in presenting France’s contribution to Group sales and EBITDA: “Deregulated activities” covering Generation.3 TWh.7 TWh) was partly counterbalanced by losses of customers and the end of Eurodif services for third parties in 2010.4 Sales France contributed €36.3 The supply-demand balance The volume of power produced by nuclear generation in 2010 was 408 TWh.7.1.1. 1.124 million. Overall.7 TWh.3% (€299 million). The positive price effect principally results from the tariff increases of August 15. Much of this change resulted from the fact that the costs of storm damage in 2010 were lower than in 2009. 2009 and August 15.7%) from 2009. up by €238 million from 2009. counterbalanced by a negative price effect on capacity auctions.5 EBITDA France’s contribution to Group EBITDA was €10. Other external expenses and personnel expenses Other external expenses amounted to €6. Personnel expenses totaled €8. especially for wind and solar power. a 2.7. 1. the higher depreciation and amortisation and the gain recorded in 2009 on transfer of Emosson dam drawing rights.7%. Page 35 sur 137 .401 million. such as the €324 million reversed from the FACE provision. up by €368 million (+3. or €984 million).339 million. which were higher than in 2010. principally as a result of reversal in 2009 of the FACE provision (+€324 million) corresponding to one year’s contribution for electrification of rural zones after the introduction of the new TURPE 3 network access tariffs.The variation in electricity sales reflects both price effects (+2 points) and volume effects (+4. tariff increases (+€470 million) and favorable weather effects on network activities. 2010 An expense of €380 million was booked to cover costs associated with the successive prolongations of the TaRTAM transition tariff system to the second half of 2010 (Law of June 7.374 million. This rise essentially results from the increase in energy purchases under purchase obligations.6 EBIT France’s contribution to consolidated EBIT was €5. EBITDA registered organic growth of 11.466 million. down by 2.1 points). €241 million lower than in 2009. Fuel and energy purchases Fuel and energy purchases in France amounted to €10.403 million). These effects were partly counterbalanced by the non-recurrence of favorable factors from 2009.7. these expenses changed little in 2010 (+0. This increase reflects the improvement in EBITDA.2% from 2009. This decline is mainly explained by the gains recorded in 2009 corresponding to final indemnities received. primarily resulting from higher nuclear and hydro power output (+21.1. This had no equivalent in 2010.8% increase compared to 2009 reflecting the higher workforce numbers associated will the skill renewal drive and changing pay levels. Prolongation of the TaRTAM transition tariff – Law of June 7. Excluding the effect of the successive prolongations of the TaRTAM transition tariff system to the second half of 2010 and the first half of 2011. 2010 and NOME law of December 7. an increase of 7. this was partly offset by continuing maintenance for the generation fleet.441 million in 2010. Other operating income and expenses Other operating income and expenses generated net income of €2. 2010) and then the first half of 2011 (NOME law of December 7.1. 2010.6% from 2009). caused particularly by the higher net sales on the markets due to higher nuclear power output as described above and also weather factors. Taxes other than income taxes These taxes rose by 11. particularly for ERDF.7% from 2009 (€9. 2010). and the additional provision for the successive prolongations of the TaRTAM transition tariff system to the second half of 2010 and the first half of 2011.174) 10.124 5.092 +2.7 -5.1.7 +7. which were €130 million higher than in 2010.2% increase in sales by the deregulated activities is primarily attributable to the favorable impact of the 2009 and 2010 tariff rise. and the additional income resulting from the volumes delivered (caused by weather conditions and other factors).370 231 Variation +2.000 219 2009 34. Page 36 sur 137 .403 5. The 6.7.1 +6.2 Sales by the network activities registered an increase of €778 million.311 833 (12. the colder weather in 2010 compared to 2009 and the higher level of net sales on the wholesale markets (including VPP auctions).7 Breakdown of financial information for the “France” segment between deregulated activities. network activities and island activities In millions of euros Sales Deregulated activities Network activities Island activities Eliminations EBITDA Deregulated activities Network activities Island activities 2010 36.9 -6. EBITDA for the network activities rose by 18.196 12. EBITDA for the deregulated activities was up slightly.2 +9.7 +1.905 4.1. due to higher sales revenues as a result of weather and tariff effects and the impact of storm-related costs in 2009.197 13.8 +18.7%. This reflects the rise in network tariffs of August 2009 and 2010. offset by the non-recurring effect of gains recorded in 2009 on certain long-term contracts.001 +778 +75 -762 +721 +103 +630 -12 Variation (%) +6.533 758 (11.412) 9.802 3.075 32. The change in EBITDA for the island activities was not significant.167 34.2 +6. The increase comprises the effect of higher nuclear power output and tariff rises. particularly for gas. 2010 in accordance with the terms of the takeover of British Energy. The effect on EBIT is neutral (fully included in depreciation and amortization expense).3 TWh in 2010 after 55.704 -553 -331 -905 -4.6% on March 26.4 -5.732 million for 2010. Lower nuclear power output (48. largely due to lower generation levels.6% rise of October 1. despite the 2.4%.1 Sales Sales30 in the United Kingdom amounted to €10. 2010).2.1 TWh in 200931) in 2010 is mainly due to unplanned shutdowns.732 799 2009 Variation Variation (%) 11.9% compared to 2009.063 1. which were marked by lower contractual electricity sales prices for business customers and the 8. respectively handling Networks. Page 37 sur 137 . the Existing Nuclear division from British Energy and development of the Nuclear New Build project in the United Kingdom.2.sales by Energy Sourcing and Customer Supply.1.7. From January 1.683 million in 2010. The organic decline in sales results from: .7. 2010 EDF Energy comprised four operating divisions (business units). 2010 after its sale to the CKI group.2 EBITDA The United Kingdom’s contribution to Group EBITDA was €2. on March 31.9 -10. In contrast. The Eggborough coal-fired plant was also sold.sales in the Existing Nuclear activity were down. 1. 2009.2 United Kingdom Organic growth (%) -4.236 3. 1.9 2010 In millions of euros Sales EBITDA EBIT 10. The positive foreign exchange effect of the pound sterling’s appreciation between 2009 and 2010 (+€446 million) is more than offset by the unfavorable effect of the change in scope of consolidation resulting from disposal of the Networks business and the Eggborough plant (-€504 million). EBITDA for Energy Sourcing and Customer Supply increased as the decline in sales was offset by the fall in fuel and energy purchase prices.7.9% with negative organic growth of 4. 2010. Energy Sourcing and Customer Supply. principally at the Sizewell B plant.8% corresponding to negative organic growth of 5. gas activities registered growth.8 TWh). as the effect of higher volumes caused by the cold weather outweighed the reduction in tariffs for residential customers (cut by more than 6% in October 2009 and 3. The Networks business was deconsolidated on October 29. 2009 the United Kingdom segment has included British Energy’s contribution to the consolidated financial statements. . principally due to an unscheduled shutdown at the Sizewell B plant (-6. down by 10.683 2.8 -53. Until October 29. in application of IFRIC 18 for 2010 and 2009. 31 30 Sales and EBITDA include customers’ contributions for connection to networks. EBITDA for the Existing Nuclear activities was down by €178 million.1 Since January 5.8% reduction in tariffs for residential customers in March 2009. down by 4. 7.1% from 2009. EBITDA for the Network activities was down slightly. a decline of 53. excluding trading activities. mainly as a result of lower connection income on the regulated networks.2. Page 38 sur 137 . 1.3 EBIT The United Kingdom’s contribution to Group EBIT for 2010 was €799 million. EBIT also incorporates the gain on the sale of the Networks business.Based on a constant scope of consolidation. EBIT was strongly affected by impairment of fossil- fired assets (€397 million) due to the collapse and poor medium-term outlook for the “dark spread” (gross margin on energy produced by coal-fired plants) and the negative €267 million impact of net changes in the fair value of Energy and Commodity derivatives. 1. This situation led Edison to activate its import contract renegotiation clauses. resulting mostly from the lower downstream prices: this was cased by supply exceeding demand in Italy and spot prices that were lower than traditional long-term contract prices. corresponding to organic growth of €20 million from 2009.3.1 Sales Italy32 contributed €5.2 EBITDA The Italy segment contributed €801 million to the Group’s consolidated EBITDA. +15. 33 32 Edison Group and Fenice.0%.7. resulting from a recovery in demand in the electricity and hydrocarbons business.8 n. The hydrocarbon activities benefited from growth in volumes sold on the final markets. 1.0 +0. Fenice’s contribution to consolidated EBITDA amounted to €110 million for 2010. and was partly offset by a positive development in business volumes.3 Italy 2010 In millions of euros Sales EBITDA EBIT 5.1%) rise in its contribution to sales.647 801 -612 4. This transfer did not significantly impact the margin.7. Excluding this effect. the electricity business33 declined as margins on sales and CIP6 plant activity fell. Page 39 sur 137 . Edison’s contribution stood at €693 million. The hydrocarbon activities’ contribution to EBITDA was markedly lower than in 2009.3 EBIT Italy’s contribution to consolidated EBIT stood at -€612 million. down by €913 million.647 million to consolidated sales. showing organic growth of 0. The rise particularly results from business growth in Italy and internationally and from the impact of cuts in operating expenses.3.8 +0.7. 1.3. Sales by Fenice registered an organic decline of €23 million (-4.7. The effect of gas and foreign exchange hedges associated with electricity sales is reclassified as electricity sales. despite favorable volume effects. although hydrocarbon sales have not yet reattained their pre-crisis level. Results on exploration-generation activities improved in 2010. up by 16. down by €14 million (-2%) despite a €84 million indemnity for early termination of the subsidy system for certain CIP6 plants in December 2010.s. Edison registered a €793 million (+18.6%. Growth in the electricity activities was driven by the positive volume effect of higher sales to wholesalers and end customers and was partly offset by the negative price effect caused by falling average sale prices. which broadly compensated for the unfavorable price effect associated with falling average gas sales prices. These activities suffered from the fall in margins on sales to final customers.870 795 301 +777 +6 -913 +16. primarily due to the transfer of energy supply contracts to Fiat during the second half of 2009 in application of Italy’s new gas regulations.6 2009 Variation Variation (%) Organic growth (%) 1.7%). This provision concerns risks relating to all the group's Italian activities. in view of information that will be available at that date. It covers some of the assets recorded in the EDF consolidated accounts following acquisition of Edison in 2005 and. also includes risks associated with the market environments in which Edison does business. Page 40 sur 137 .A combination of indicators and uncertainties led the Group to book a €750 million in respect of the Italy segment at December 31. The decision to record this provision is specific to the EDF group and in no way indicates the decisions that may be made when Edison prepares its annual accounts in March 2011. The provision also covers risks related to some of Fenice’s activities on which impairment was recorded. to a less extent. 2010. EDF Belgium's commercial activities were transferred to SPE in October 2010 in order to optimize the customer portfolio.7 n. In the other continental European countries (Belgium.4 +8. EBITDA rose by €70 million (+18.436 million from 2009. 1. the Netherlands. excluding the effects of changes in the scope of consolidation and exchange rates. as use of the Laibin B (Figlec) was temporarily reduced from 2009 levels. Vietnam and Laos). In the central European countries.4% compared to 2009. Without these scope and exchange effects.4.436 +430 -679 +99. Asian operations (China.0%. The rise is essentially attributable to changes in the scope of consolidation referred to above (+€3.0%. sales were stable (-2% excluding foreign exchange effects). and the change in consolidation method applied for Estag from July 1. and from Hungary Page 41 sur 137 .1.8 +65. and the wholly-owned Unistar.7% with an organic variation of -10.99% investment in Constellation Energy Nuclear Group (CENG).3%). sales registered organic growth of +3. Sales in the United States zone amounted to €607 million in 2010.442 654 286 +3. 2009.0%) thanks to favorable weatherrelated volume effects and development of biomass activities. In the Asia-Pacific region.084 (393) 3. Favorable foreign exchange effects amounted to €188 million. driven by Poland where volumes rose due to lower-thannormal temperatures during 2010 and falling electricity sale prices. In Brazil. up by €3. due to a decline in contractual prices.2 EBITDA EBITDA for the Other International segment.878 million to Group sales for 2010. +1.1 Sales The Other International segment contributed €6. including the first full year of consolidation of CENG.2%.s.878 1. 1.7. or organic growth of 12. The Other International segment benefited from favorable changes.7.7%.199 million). the Norte Fluminense fossil-fired plant in Brazil and nuclear activities in the United States via the 49.7.4 Other International 2010 In millions of euros Sales EBITDA EBIT 6.4. Austria). the organic variation (excluding the effect of changes in the scope of consolidation) was stable. In Central Europe. sales would show organic growth of 1. There were positive contributions from Poland (+5.0 2009 Variation Variation (%) Organic growth (%) The Other International segment principally covers operations in Europe outside the United Kingdom and Italy: Benelux (including SPE) and central European countries. saw organic growth of 8. which are partly indexed on the US dollar (which declined against the Brazilian real). sales rose by 8. The effect of changes in the scope of consolidation in this segment essentially concern the acquisitions of SPE and CENG in late 2009. mainly related to Polish and Brazilian currencies’ rise against the euro. (+33.5%), particularly EDF Demasz, benefiting from a recovery in sales margins. EBITDA in other European countries rose by €193 million, an organic increase of €50 million (+89.3%) due particularly to consolidation of SPE over a full year and commissioning of the SLOE CCG plant in the Netherlands in late 2009. SPE, the principal company in the zone, reported EBITDA of €156 million for 2010, reflecting the performance growth in gas and electricity. In the Asia-Pacific region, EBITDA was relatively stable in terms of organic variation. Brazil registered 10.3% growth and an organic variation of -8.0% in EBITDA, primarily due to the buoyant spot market in 2010 which prevented optimization of the margin to the same extent as in 2009. EBITDA in the United States zone amounted to €186 million in 2010, up by €175 million, chiefly reflecting the effect of consolidation of CENG. 1.7.4.3 EBIT EBIT for the Other International segment was -€393 million, principally affected by impairment of €929 million in the US, and the €93 million expense related to the agreements of November 3, 2010 with CENG. This change in EBIT also reflects the favorable impact of net changes in the fair value of Energy and Commodity derivatives (excluding trading activities) associated with SPE, and the unfavorable effect of higher depreciation and amortization charges resulting primarily from the full-year impact of acquisitions of CENG and SPE. Page 42 sur 137 1.7.5 Other Activities 2010 In millions of euros Sales EBITDA EBIT 5,790 1,882 1,072 5,517 2,014 1,879 +273 -132 -807 +4.9 -6.6 -42.9 +5.0 -7.1 2009 Variation Variation (%) Organic growth (%) Other Activities principally comprise EDF Energies Nouvelles, EDF Trading, Electricité de Strasbourg and EDF’s investment in Dalkia. 1.7.5.1 Sales The contribution by the Other Activities segment to Group sales was €5,790 million, up by €273 million or 4.9% from 2009, with organic growth of 5.0% mainly driven by business expansion at EDF Energies Nouvelles and Dalkia. Nonetheless, this favorable variation was partly counterbalanced by the decline at EDF Trading. EDF Trading’s34 sales showed an organic decline of €294 million (-25.7%). This downturn compared to 2009 is explained by seriously deteriorating market conditions. The sovereign debt crisis in Europe and the fluctuating euro/dollar exchange rate had repercussions for the commodity markets, which from early May 2010 were strongly disrupted by decorrelation between price trends on different commodities. Sales at EDF Energies Nouvelles amounted to €1,455 million, a 34% improvement over 2009. Sales were boosted by commissioning of new wind and solar power facilities, and by significant growth in Development and Sale of Structured Assets. Dalkia’s contribution to sales showed organic growth of €131 million (+6.0%). The chief contributing factor was the favorable weather effect in Europe. 34 1.7.5.2 EBITDA Other Activities contributed €1,882 million to Group EBITDA, €132 million less than in 2009, with an organic variation of -7.1%. The organic decline in this segment’s EBITDA was principally attributable to EDF Trading, where EBITDA was down by 30.8% from 2009 to €628 million in 2010. EDF Energies Nouvelles contributed €460 million to consolidated EBITDA in 2010 (+34.5%). This increase was mainly explained by growth in wind and solar power generation and the good performance in Development and Sale of Structured Assets. Dalkia’s EBITDA saw organic growth of €42 million (+14%), primarily due to the gain on the sale of Usti in the Czech Republic. 1.7.5.3 EBIT EBIT for the Other Activities decreased by €807 million compared to 2009. This reflects the decline in EBITDA and the unfavorable impact of adjustments related to net changes in the fair value of Energy and Commodity derivatives, excluding trading activities, mostly used for hedging operations. Depreciation and amortization also increased, principally with the expansion in business at EDF Energies Nouvelles. In 2010, EBIT also includes the €136 million of impairment recorded by EDF Production UK in respect of the North Sea gas fields. Page 43 sur 137 EDF Trading sales consist of trading margins. 1.8 Net indebtedness, cash flow and investments Net indebtedness comprises total loans and financial liabilities, less cash and cash equivalents and liquid assets. Liquid assets are financial assets consisting of funds or securities with initial maturity of over three months that are readily convertible into cash regardless of their maturity and are managed according to a liquidity-oriented policy. The definition of net indebtedness has been revised in 2010 to reflect the Group’s loans to RTE, which is accounted for under the equity method from December 31, 2010. Changes in the Group’s net indebtedness were as follows: Variation (%) +4,4 In millions of euros Operating profit before (EBITDA) 2010 depreciation and amortization 16,623 (1,165) (2,197) 2009 15,929 (2,320) (1,367) (869) 84 11,457 (863) (11,576) 1,224 242 (1,902) (12,932) (1,289) (696) (16,577) 577 (758) (319) (17,077) (943) 24,476 42,496 Variation 694 1,155 (830) (1,098) 68 (11) 1 161 (477) (1,224) (551) 559 16,545 (1,064) 409 15,898 8,781 (24) 334 24,989 1,138 Cancellation of non-monetary items included in EBITDA Net financial expenses disbursed Income taxes paid (1,967) Other items Net cash flow from operations (1) Change in working capital (2) 152 11,446 298 (12,053) -0,1 Net operating investments (gross CAPEX less disposals) Non-recurring items Free cash flow (3) (309) (1,343) 3,613 (2,353) (287) (679) 9,358 ns Allocation to dedicated assets, France Net financial investments Dividends paid Other changes (4) (Increase) decrease in net indebtedness, excluding the impact of changes in scope of consolidation and exchange rates Effect of change in scope of consolidation Effect of change in exchange rates ns (782) Effect of other non-monetary changes (5) 15 7,912 of discontinued 195 42,496 34,389 (Increase)/Decrease in net indebtedness (Increase)/Decrease in net indebtedness operations Net indebtedness at beginning of period Net indebtedness at end of period ns ns (1) Operating cash flow is not an aggregate defined by IFRS as a measure of financial performance, and is not directly comparable with indicators of the same name reported by other companies. This indicator, also known as Funds From Operations (FFO), is equivalent to net cash flow from operating activities excluding changes in working capital (Cash flow statement) after adjustment for the impact of non-recurring items, less net financial expenses disbursed and income taxes paid. (2) 2010: including the Exeltium advance of €1,747 million received at the end of April 2010. (3) 2009: Payment from the French state after cancellation of the European Commission’s decision of December 16, 2003. (4) Mainly contributions received on concessionary assets, investment subsidies and the payment to Areva for decommissioning of the plant at La Hague (2010: €633 million; €2009: €605 million). (5) Mainly corresponds to changes in fair value and accounting reclassifications affecting net indebtedness. Page 44 sur 137 The €8. These effects were offset by cancellation of non-monetary items. compared to +€242 million for 2009. principally due to: . amounting to €1.a high level of capital expenditure net of disposals amounting to €12. mostly as a result of reimbursement in 2009 of excess provisional instalments paid for 2008 (+€1. Page 45 sur 137 . Impact of the sale and the associated scope effect (see 1.446 million in 2010 (compared to €11.053 million (see 1.4).389 million at December 31.8. The €551 million decrease results from the rise in net operating investments and the €1. mainly nuclear fuel inventories in France. counterbalanced by the unfavorable effects of the increase in the CSPE receivable (Contribution to the Public Electricity Service) (-€968 million for the parent company EDF) and the increase in inventories (-€446 million). It includes the negative impact of increases in income taxes paid.8.8.5 and 1.8.107 million over the year. . The main explanation for the decrease in working capital was the receipt of the first advance under the agreement with the Exeltium consortium.496 million at December 31. which were €1. the allocation to dedicated assets (see 1. The Group’s free cash flow for 2010 was negative at -€309 million. chiefly due to changes in the TaRTAM provisions (net reversals of €850 million in 2009 and €328 million in 2010) and the FACE provision at ERDF (net reversal of 35 €318 million in 2009 and increase of €21 million in 2010). and the financial expenses disbursed (+€830 million). the Group’s free cash flow for 2010 was negative at €309 million.8. 2009.8.457 million in 2009).155 million lower than in 2009.098 million).5) and dividends paid (see 1. 1.2 Operating cash flow and free cash flow Operating cash flow was stable at €11.7). 1. Despite the rise in EBITDA (+€694 million) and the decrease in working capital.1 Net indebtedness The Group’s net indebtedness stood at €34.3 Change in working capital Working capital decreased by €298 million in 2010. compared to €42.224 million payment from the French state in 2009 following cancellation of the European Commission’s decision of 2003. partly offset by the change in working capital (€298 million in 2010 compared to -€863 million in 2009.1.8. see 1. It also comprises the negative impact of the free cash flow.107 million decrease in net financial indebtedness primarily reflects the sale of distribution networks in the United Kingdom35 and the deconsolidation of RTE's debt.3).8.financial expenses reflecting the change in average net indebtedness (disposals late in the year). a decrease of €8.6). 2010.747 million.8. The main factor in this decrease was the acquisition in 2009 of land for the British New Nuclear program.241 million.241 2009 3. 14.1 +47. Combined cycle gas turbine.9%) from 2009.162 2.up from 2009) and the construction of the West Burton combined cycle power plant.9 . nuclear activities (29% . In the network activities.6 + 9. down slightly from 2009.4 Operating investments (Gross Capex) Operating investments (gross capital expenditure) for 2010 amounted to €12. maintenance expenditure included the ongoing reliability programs for the nuclear and hydropower fleets (SuperHydro and RenouvEau). decreased for the Other International segment and was stable for the Other Activities segment.7% lower than in 2009 (€322 million).057 1.3 + 10. 36 37 In the United Kingdom.874 1. Capacity development investments in 2010 concerned fossil-fired facilities (CT36 at Montereau.377 3.871 381 561 2. capital expenditure for 2010 rose by 47.7 . The main investments in 2010 were for development: fossil-fired plants in Italy and Greece (Thisvi).777 Variation +347 +343 +22 +712 -322 -102 +180 -244 -4 +464 Variation (%) +10.554 12.8. renewable energy fleets and drilling for the Abu Qir concession in Egypt and in Croatia. mainly as a result of consolidation of SPE in Belgium and Combustion turbine. Investments by Fenice amounted to €110 million in 2010.9 Capital expenditure increased in France.312 473 7. In addition to steam generators. up by €464 million (3.4 + 4. Page 46 sur 137 .8. with the ongoing construction of the Flamanville 3 EPR and the step-up in the steam generator replacement program compared to 2009. For the deregulated activities.9%).1% lower than in 2009. the increase was primarily driven by nuclear activities. CCGT37 at Martigues and Blenod).21. Changes over the period in the Group’s gross capital expenditure were as follows: In millions of euros France: Network activities France: Deregulated activities France: Island activities Total France United Kingdom Italy Other International Total International Total Other activities Operating investments (Gross Capex) 2010 3.558 11. capital expenditure amounted to €1. amounting to €271 million at Edison. Investments during 2010 concerned the regulated activities (43% .2 + 3.193 483 380 3. it essentially concerned the purchase of SNCF networks by RTE and the considerable increase in connections (particularly the photovoltaic solar power producers’ share) for ERDF.14.813 1.1. which had no equivalent in 2010.655 495 7.2% compared to 2009.0. In Italy.2 . The increase in capital expenditure in France was €712 million (9.the decrease reflects the sale of distribution networks in October 2010).724 3.0 .871 million in 2010. capital expenditure for 2010 was 21. In the Other International segment. investments for external growth in 2010. Capital expenditure in the Other Activities was stable (-0.8.6 Dividends Dividends paid in cash (€2.7484/€1. . 2010. 2009: €1.343 million. while a further €938 million of dividends were paid in the form of shares.gains on disposals undertaken in 2010 (€4.613 million. In 2009. The cash allocation to dedicated assets during 2009 totaled €1. 1. particularly in Belgium (acquisition of SPE minority shareholdings for €215 million). 1.289 million. 2006 on the sustainable management of radioactive materials and waste. primarily sale of the distribution networks in the United Kingdom (€3. December 31. China (second capital contribution to the two-EPR project in Taishan for €213 million). 2009: $0.154 million of investments at EDF Energies Nouvelles in 2010. principally Centrica in the UK (€190 million). See section 1.054 million.3 billion) following a change in consolidation method.1260/£1. .1. which had no impact on EDF’s cash position in 2010. and the United States (acquisition of a further 50% in Unistar Nuclear Energy (Unistar). in addition to the allocation of 50% of RTE shares (€2.353 million) comprise the balance of the 2009 dividends (€1. “Management of financial risk on EDF’s dedicated asset portfolio”. EDF is continuing to build up a portfolio of dedicated assets to cover longterm nuclear commitments. The cash allocation to dedicated assets in France for 2010 amounted to €1. and acquisition of 50% of Unistar. 1. 2010: $0.6942/€1. These two operations contributed €9.6. 2010 saw a net financial divestment (excluding allocations to dedicated assets) of €3.3 billion) following the decree of December 29. comprising: . with €1. 38 The US dollar rose by 7.4 million of the reduction in net indebtedness. dividends paid in cash amounted to €1. raising the Group’s ownership to 100%). plus dividends paid by Group subsidiaries to their minority shareholders.9.2% against the euro: December 31.2%) from 2009.902 million.8.109 million) and the interim dividend paid in late 2010 totaling €1.345 million).1618/£1. .8% against the euro: December 31.5 Dedicated assets and net financial investments In compliance with the French Law of June 28.CENG in the United States.receipt of the sale price for the investment in SNET in France (€192 million). The NOME law (on France’s new electricity market organization) extended the deadline for building up the dedicated asset portfolio.655 million) and several entities in the Dalkia group (€227 million).the initial payment received in 2010 for the sale of EnBW (€169 million). 2010: €1.7 Changes in scope of consolidation and foreign exchange effects Changes in the scope of consolidation primarily result from deconsolidation of the UK distribution networks’ financial debt (€3. The pound sterling rose by 3.0 billion) following disposal and RTE’s financial debt in France (€6. Foreign exchange effects (particularly the rise of the US dollar and the pound sterling against the euro38) accounted for €782 million of the change in the Group’s net financial indebtedness. Page 47 sur 137 .8. December 31. 8. while the numerator net financial debt is adjusted to exclude EnBW.2% respectively.9. Page 48 sur 137 . The unadjusted ratios are 2.2 to 1. EBITDA is adjusted for the effect of sale of the UK networks (10 months).1.2 48% (1) 2010 ratios based on a comparable scope of consolidation: in the denominator. (3) Equity including non-controlling interests. Further adjustment for receipt of the sale price for EnBW takes the 2010 Net financial debt/EBITDA ratio from 2.5 55% 2. (2) 2009 ratios based on a comparable scope of consolidation: net financial debt excludes EnBW.02 and 19.8 Financial ratios 2010 (1) Net financial debt /EBITDA Net financial debt /(Financial debt + equity) (3) 2009 (2) 2. The average maturity of consolidated debt was thus 8. and an operational verification of financing activities at parent company level. defined in the Financial Management Framework and the Group counterparty risk management policy introduced by the EDF group. 2010 compared to 7. Page 49 sur 137 .641 million for bonds.1 to the consolidated financial statements at December 31.DCRF) . including €2. In view of the Group’s international development. a dedicated body was set up at the beginning of 2002 – the Financial Risks Control Division (Département Contrôle des Risques Financiers .9 Management and control of market risks 1. 2009. .e. For 2011.2. Edison also issued bonds in 2010 in the amount of €1. The Group also has access to financial resources through short-term issues and bond issue programs. and EDF SA debt now has average maturity of 10. 1.000 million and CHF 400 million.1 Management financial risks and control of Regular internal audits are carried out to ensure controls are effectively applied. equity and counterparty risks). the Group’s liquidities totaled €14. These principles apply only to EDF and operationally controlled subsidiaries (i. finance its operating investment and external growth program and reinforce long-term debt. based on analyses of sensitivities and credit (counterparty) risks.6 years at December 31.100 million.Management of liquidity risks As part of its policy to manage liquidity. 2010.000 million. Liquidity position At December 31.1. 2009. The DCRF issues daily monitoring reports of risk indicators relevant to activities in EDF’s trading room. the Group undertook bond issues during 2010 (for details see note 38.5 years at December 31. At December 31. In compliance with IFRS 7.9. Dalkia and CENG) or subsidiaries that do not benefit by law from specific guarantees of independent management (RTE-EDF Transport and EDF Réseau Distribution France-ERDF). entities other than Edison. $2. These bonds were issued by EDF in respective amounts of €3.1.741 million. 2010 “Changes in loans and other financial liabilities”). 2010 at €8. 2010. no Group company was in default on any borrowing.250 million. This body also has the task of carrying out a second-level check (methodology and organization) of EDF and operationally controlled group subsidiaries. interest rate. the Group’s scheduled debt repayments (principal and interest) are forecast at December 31.1 Liquidity position management of liquidity risks and This chapter sets forth the Group’s policies and principles for management of financial risks (liquidity. £1.to control financial risks at Group level by ensuring correct application of the principles of the Financial Management Framework.4 years at December 31. the following paragraphs include information on the nature of risks resulting from financial instruments. foreign exchange rate.085 million.9.2 years compared to 8.114 million and available credit lines amounted to €11. the residual maturities of financial liabilities (including interest payments) are as follows under IAS 39 (values based on exchange and interest rates at December 31. For EDF SA. RTE-EDF Transport and EDF Energy also have short-term programs for maximum amounts of €1. EDF Energy.845 47. The investment subsidiary EDF Investissements Groupe set up in partnership with the bank Natixis Belgique Investissements also provides medium and long-term financing for EDF group subsidiaries. - active management and diversification of financing sources used by the Group: the Group has access to shortterm resources on various markets through programs for French commercial paper (billets de trésorerie).943 70.5 billion and £1 billion respectively. RTE-EDF Transport and Edison also have their own EMTN programs. No drawings have been made on EDF Energy’s program as this subsidiary is now included in the centralized financing arrangements.5 billion for its Euro market commercial paper. centralization of financing for controlled subsidiaries at the level of the Group’s cash management department. and obtained financing on satisfactory terms. registered with the market authorities in France and “passported” to other EU countries. so as to optimize the Group’s cash management and provide subsidiaries with a system that guarantees them market-equivalent financial terms. €6 billion and €2 billion respectively.At December 31. The current ceiling for this program is €16 billion.777 23. US commercial paper and Euro market commercial paper. 2010): Hedging instruments (*) Debt (in millions of euros) 2011 2012-2014 2015 and later Total debt repayment interest expense 8. EDF also has a €500 million credit line with the European Investment Bank to Page 50 sur 137 - - - . EDF also has regular access to the bond market through an annually updated EMTN (Euro Medium Term Note) program. $10 billion for its US commercial paper and $1. with ceilings of £4 billion. the ceilings for these programs are €6 billion for its French commercial paper. 2010. EDF Energy and EDF Trading now have credit lines with EDF. A range of specific levers are used to manage the Group’s liquidity risk: the Group’s cash pooling system.161 43. which centralizes cash management for controlled subsidiaries.068 Interest rate swaps 50 73 1 124 Currency swaps 93 150 316 558 Guarantees given on borrowings 40 14 143 197 (*) data on hedging instruments include both assets and liabilities The EDF group was able to meet its financing needs by conservative liquidity management. In this context. The subsidiaries’ cash balances are made available to EDF SA in return for interest.741 18. 6% 4. Edison’s syndicated loan facility for €1.6% 5.5% (1) 5.000 1. 2010.1% 5.0% 6. No drawings had been made on these credit facilities at December 31.000 1.6% 5. No drawings had been made on either of these facilities at December 31. 2010 are EDF.000 2.269 2.100 1. and comprises a €500 million swingline. RTE-EDF Transport’s syndicated loan facility for €1 billion is valid until May 2013. The entities with syndicated loan facilities at December 31. with two options for 1-year extension. The table below sets forth the Group’s borrowings of more than €750 million or the equivalent value in other currencies by maturity at December 31. - Page 51 sur 137 .0% 4.5% 4. valid until March 2012 and comprising a €2 billion swingline available for same-day drawing was reimbursed to the extent of 50% in October 2010.finance generation plants in the French overseas territories.0% 4.500 2. It was refinanced by a new syndicated loan facility of €4 billion maturing in November 2015. Edison and RTE-EDF Transport: EDF’s syndicated loan facility for €6 billion.5% 4. Another syndicated loan facility for €500 million was set up in June 2010.4% 6.000 1.6% 5.250 3.500 750 1.5 billion is valid until April 2013.1% These two bonds were partially redeemed after two €750 million issues in 2010. 2010: Entity Issue date Maturity Nominal amount (millions of currency units) 2. for a renewable 1-year term. No drawing was made on it in 2010.750 750 1.000 Currency (1) Rate (%) EDF EDF EDF EDF EDF EDF EDF EDF EDF EDF EDF EDF EDF EDF EDF EDF EDF EDF (1) 18/11/2008 21/01/2009 15/07/2009 16/01/2009 18/10/2001 29/01/2008 21/01/2009 21/01/2010 23/05/2008 16/01/2009 04/09/2009 04/11/2010 21/04/2010 14/02/2003 29/05/2009 21/01/2009 04/11/2010 14/09/2010 23/01/2013 26/01/2014 17/07/2014 23/01/2015 25/10/2016 05/02/2018 26/01/2019 27/01/2020 29/05/2020 25/01/2021 11/09/2024 12/11/2025 26/04/2030 21/02/2033 02/06/2034 26/01/2039 12/11/2040 22/09/2050 EUR USD EUR EUR EUR EUR USD USD EUR EUR EUR EUR EUR EUR GBP USD EUR GBP 5.5% 5.500 1.200 2.1% 7.5% 5.400 1.6% 6.500 850 1.3% 4. 2010. A total of €100 million was drawn on this line during 2010. on the watchlist A-. stable outlook/A-2 on November 2. stable outlook (3) BBB. the Group has introduced the following management principles. each entity finances its activities in its own accounting currency. stable outlook A+. stable outlook /A-2 on October 14. stable outlook (2) Baa3. 2011 with confirmation of rating as A. the Group is exposed to the risk of exchange rate fluctuations. stable outlook A. which may have an impact on the translation differences affecting balance sheet items. To limit exposure to foreign exchange risks.9. equity and net income.1. or by market hedging involving use of financial derivatives. the risk on open foreign exchange positions is monitored by sensitivity calculations. negative outlook (4) N/A A-1 P-2 F2 A-2 N/A F2 EDF Energy Moody’s Fitch Ratings Standard & Poor’s Edison SpA Moody’s Fitch Ratings N/A = non applicable (1) Taken off credit watch by S&P on January 28. negative outlook /F2 to BBB. 2010 1. - Association of assets and liabilities: the net assets of subsidiaries located outside the Euro zone expose the Group to a foreign exchange risk. negative outlook to Baa. and the hedging rate varies from 79% to 92% depending on the currency. Moody’s and Fitch Ratings attributed the following long-term and short-term ratings to EDF group entities at December 31. Local currency financing: To the extent possible given the local financial markets’ capacities.1. on creditwatch (1) A3. negative outlook /A-2 to BBB. Hedging of net assets in foreign currencies complies with risk/return targets. negative outlook /F2 on November 9.2 Credit ratings The financial ratings agencies Standard & Poor’s. The foreign exchange risk in the consolidated balance sheet is managed either by matching with liabilities for acquisitions in the same currency. derivatives may be used to limit foreign exchange risks.3 Management of foreign exchange rate risk - Due to the diversification of its activities and geographical locations. stable outlook BBB+. or if hedging costs are prohibitive. If no hedging instruments are available. Hedging of operating cash flows in foreign currencies: In general. negative outlook / A-1 (2) Changed from BBB+. stable outlook A+. stable outlook Short-term rating A-1 P-1 F1 A-1 Moody’s Standard & Poor’s A3. with the exception of flows Page 52 sur 137 .1. 2010 (3) Changed from Baa2.9. 2010: Company Agency Standard & Poor’s EDF Moody’s Fitch Ratings RTE-EDF Transport EDF Trading Standard & Poor’s Long-term rating A+. the operating cash flows of EDF and its subsidiaries are in the relevant local currencies. Group financial expenses. stable outlook Aa3. When financing is contracted in other currencies. 2010 (4) Changed from BBB+. 29% in pounds sterling and 10% in US dollars. Sensitivity to foreign exchange risks remains stable overall compared to 2009.568) 8.421 4. 2010 EUR USD GBP Initial debt structure 28. the Group’s gross debt at December 31. by currency.777 % of debt 53% 10% 29% 8% 100% Other currencies 4. The balance of 8% includes the Swiss franc. Page 53 sur 137 . before and after hedging (in millions of euros) December 31.510 9.777 (*) Hedges of liabilities and net assets of foreign subsidiaries The table below presents the impact on equity of an unfavorable variation in exchange rates on the group’s gross debt at December 31. EDF Trading. the Brazilian real and the Japanese yen.908 47. Edison.081 Impact of hedging instruments (*) (3.related to fuel purchases which are primarily in US dollars.678 Debt structure after hedges 25. 2010 breaks down as follows by currency after hedging: 53% in Euros. EDF Energies Nouvelles) hedge firm or highly probable commitments related with these future operating cash flows. 2010. EDF and the main subsidiaries concerned by foreign exchange risks (EDF Energy. the Polish zloty. which concern lower amounts. the Hungarian forint. After taking into account the financing and foreign exchange risk hedging policy.021) TOTAL 47.689 13.929 (1.759 3.089) (4. Gross debt structure at December 31. and certain flows related to purchases of equipment.257 5. 2010. 2010. uniform exchange rate variations of 10% against the Euro.282 105.064 2.696 14.130 8.158 13. assuming unfavorable.759 1.974 2.110 Derivatives 1. The table below sets forth the foreign exchange position relating to net non-operating investments in foreign currency of the Group’s principal subsidiaries at December 31.Sensitivity of the Group’s gross debt to foreign exchange rate risks In millions of euros December 31.335 Net position after management (Assets) 1.421 4.236 50. adjusted for changes in the fair value of cash flow hedges and available-for-sale financial assets recorded in equity.777 2.421 25.347 80. 2009 USD CHF (Switzerland) HUF (Hungary) PLN (Poland) GBP (United Kingdom) BRL (Brazil) CNY (China) Assets 5.449 566 2.013 Due to the Group’s foreign exchange risk hedging policy for liabilities.051 The assets in the above table are the net assets of the Group’s foreign subsidiaries in foreign currencies. Net asset position (in millions of currency units) December 31.227 172 25.187 4.454 686 5.400 2. 2010 EUR USD GBP Other currencies TOTAL Debt after hedging Debt after a 10% Impact of a 10% unfavorable instruments converted into unfavorable variation in variation in exchange rates Euros exchange rates 25.135 3.908 391 4.299 47.376 15.513 2. Net positions are converted at the closing rate and impacts are reported in absolute value. the income statement for companies controlled by the Group is marginally exposed to foreign exchange rate risks.187 Bonds 3.689 469 5.068 686 5. and changes in the fair value of financial instruments recorded in income. 2010. Page 54 sur 137 . The following table sets forth the risk of foreign exchange loss in equity on the overall net position relating to the net nonoperating investments in foreign currencies of the Group’s principal subsidiaries at December 31. 9.1. 2010. 10% converted into variation in in currency Euros exchange rates 1.295 3.403 686 288 29 59 5.449 92 9 566 142 14 240 2..187 588 Net position after management in currency 314 125 24.Sensitivity of net assets to exchange rate risks December 31. “Management of financial risk on EDF’s dedicated asset portfolio”. 10% converted into variation in Euros exchange rates 219 22 84 8 92 9 315 32 415 4.147 260 26 7 71 (in millions) USD CHF (Switzerland) HUF (Hungary) PLN (Poland) GBP (United Kingdom) BRL (Brazil) CNY (China) The foreign exchange risk on available-for-sale securities is mostly concentrated in EDF SA's dedicated asset portfolio.683 654 700 December 31. 2010 Net position Net position Impact on after after equity of a management management. Page 55 sur 137 .6.227 918 92 172 138 14 25. 2009 Net position Impact on after equity of a management.068 2. which is discussed in section 1.884 1. The foreign exchange risk associated with short-term investments and operating liabilities in foreign currencies was not significant for the Group at December 31. the table below presents the interest rate risk on floating-rate bonds and negotiable debt securities at EDF SA. 2010.150 6. the Group (apart from entities it does not control operationally. The impact of interest rate fluctuations remains stable compared to 2009.9. a detailed sensitivity analysis is provided in section 1. and a risk of change in the cash flows related to floating-rate financial assets and liabilities To limit exposure to interest rate risk. Page 56 sur 137 .777 Impact of hedging instruments (49) 49 Debt structure after Impact of a 1% variation in hedges interest rates 41. based on gross floating-rate debt after hedging.627 47. A 1% uniform annual rise in interest rates would generate an approximate €67 million increase in financial expenses at December 31.101 6.9. 2010 Fixed rate Floating rate Total borrowings Initial debt structure 41. As fixed-rate negotiable debt securities and bonds are mainly held as part of the dedicated asset portfolio.1. The table below sets forth the structure of Group debt and the impact of a 1% variation in interest rates at December 31.1. This allocation may involve the use of interest rate derivatives for hedging purposes. designed to limit the risk of change in the value of assets invested or possible increases in financial expenses.1.4 Management of interest rate risk The Group’s exposure to interest rate fluctuations covers two types of risk: a risk of change in the value of fixed-rate financial assets and liabilities. 2010 comprised 86% of debt bearing interest at fixed rates and 14% at floating rates. and their sensitivity to interest rate risks (impact on net income).676 47. The average cost of Group debt (weighted interest rate on outstanding amounts) was 4. The Group’s debt after hedging instruments at December 31.777 67 67 Interest rate variations on fixed-rate debt have no accounting impact.6. Group debt structure and sensitivity to interest rates In millions of euros December 31. 2010. Concerning financial assets. Some of the debt is variabilized and the spread of exposure between fixed and floating rates is monitored with reference to asset/liability management criteria and expected fluctuations in interest rates.4% in 2010. notably Edison and CENG) fixes principles as part of its general risk management policy. the British Energy pension funds were invested to the extent of 39% in equities.1. 2010.5 Management of equity risks The equity risk is concentrated in the following areas: Coverage of EDF's nuclear obligations Analysis of the equity risk is presented in section 1.211 million of equities.9. At December 31. Coverage of employee benefit commitments for EDF. “Management of financial risk on EDF’s dedicated asset portfolio”.1. 2010. EDF Energy and British Energy Assets covering EDF’s employee benefit liabilities are partly invested on the international and European equities markets. representing an amount of £222 million of equities. and a downturn in equity prices could lead EDF to recognize actuarial losses above the “corridor” in income. 31% of the assets covering EDF’s employee benefit liabilities were invested in equities amounting to €2. with estimated volatility of 34. the two pension funds set up by EDF Energy (EDF Energy Pension Scheme and EDF Energy Group Electricity Supply Pension Scheme) were invested to the extent of 37% in equities.5% (annualized volatility of monthly returns observed over three years).5% (annualized volatility of monthly returns observed over three years).Sensitivity of floating-rate securities to interest rate risks In millions of euros December 31. Page 57 sur 137 . 2010. and the long-term storage of radioactive waste. 2010.1 billion at December 31. 2010 these investments amounted to a residual €10 million. Direct investment securities At December 31. EDF’s investment in Veolia Environnement amounted to €423 million.9. 2010. This is significantly lower than in 2009. EDF’s long-term cash management In 2010 EDF substantially reduced the portion of equity-correlated investments in its long-term cash management instruments.9. with estimated volatility of 46. Market trends therefore affect the value of these assets. 1. At December 31. At December 31. 2010 Floating-rate securities Value 146 Impact on net income of a Value after a 1% variation in 1% variation in interest rates interest rates 1 145 1. CENG fund CENG is exposed to equity risks in the management of its funds established to cover nuclear plant decommissioning and employee benefit obligations. At December 31.6.6 Management of financial risk on EDF’s dedicated asset portfolio The dedicated assets have been built up progressively by EDF SA since 1999 to cover future decommissioning expenses for the nuclear plants currently in operation.1. representing an amount of £1. EDF’s investment in AREVA amounted to €313 million. due to the sale of EDF Energy’s distribution networks in October 2010. is used to prepare and supply the disbursements related to Page 58 sur 137 . 2007. and also the NOME (New electricity market organization) law’s proposed deferral to June 29. A benchmark index is also set for performance monitoring and controlof the overall portfolio risk. in anticipation of the provisions of article 9 of the decree of February 23. They are selected for their skills and diversity of experience. 2010. selection of financial managers. 2009. Currently. Audit Committee). in response to the proposal to allocate RTE shares. 2011).5% of the portfolio (on a like-for-like basis. “equities” and “bonds”. The portfolio (excluding RTE shares) contains two sub-portfolios. 2010 at the value of €2. for which guiding principles were redefined in the law of June 28. A third sub-portfolio. 2006 on sustainable management of radioactive materials and waste.This dedicated asset portfolio. The principles governing the asset portfolio’s structure. The governance principles set forth the decision-making and control structure for management of dedicated assets. was reinforced in the second half of 2010 when equity market trends appeared more favorable. 2010). is managed under the supervision of the Board of Directors and its Committees (Nuclear Commitments Monitoring Committee. 2007. in line with the improvement in economic fundamentals worldwide. excluding RTE). which was 43. The Nuclear Commitments Monitoring Committee (CSEN) is a specialized Committee set up by EDF’s Board of Directors when it updated its internal rules on January 25.902 million in 2009 (see note 46 to the consolidated financial statements at December 31. dedicated assets received cash allocations of €1. economic and financial research. Disbursements for decommissioning expenses incurred in 2010 were financed by the dedicated asset portfolio to the extent of €362 million. The equities portion.2% at December 31. Excluding RTE.324 million. assets are allocated 50% to international equities and 50% to bonds. This value is the net consolidated value of 50% of the Group’s investment in RTE (included in investments in associates in the consolidated balance sheet). A Nuclear Commitment Financial Expertise Committee (CEFEN) exists to assist the company and its governance bodies on questions of association of assets and liabilities and asset management. particularly in the fields of asset/liability management. In 2010. compared to €1. and the legal. in principle every three years unless circumstances require otherwise. Strategic allocation is regularly reviewed. This flexibility was used primarily to absorb the shock of the financial crisis. compared to €302 million in 2009. The members of this Committee are independent of EDF.343 million. themselves divided into “secondary asset classes” or “pockets” that correspond to specific markets. At December 31. strategic asset allocation is based on an asset/liability review carried out to define the most appropriate portfolio model for financing nuclear expenses. the equities accounted for 50. 2016 of the deadline for establishment of dedicated assets covering all long-term nuclear assets subject to certain requirements (including the level of coverage of liabilities at June 29. accounting and tax structure of the funds are also defined. and asset management. although exposure may be different for reasons of tactical allocation. plus allocation of the RTE-EDF Transport shares on December 31. Planned allocations to dedicated assets were adjusted downwards in March 2010. “cash”. o by investment vehicle (for compliance with maximum investment ratios).441 million at December 31. o by capitalization (major stocks. aiming for diversification: o by style (growth securities. and a review of market appreciation in different markets and market segments. “equities” and “bonds”.815 million (€11. EDF’s dedicated asset portfolio: Content and performance At December 31. Tactical asset management is organized around four main themes: supervision of exposure between the two classes. - The allocation policy established by the Operational Management Committee39 was developed on the basis of macro-economic prospects for each market and geographical area. selection of securities on a “quantitative” basis. selection of investment funds. medium and small stocks).amounts reversed from provisions for plants currently being decommissioned. 2010. 2009). etc.). Page 59 sur 137 . consultation and operational decision-making for management of dedicated assets. unlisted securities. choice of exposure by geographical area. 39 A permanent internal committee for evaluation. the overall value of the dedicated asset portfolio was €15. o by investment process (macroeconomic and sectorbased approach. marginal investment in alternative vehicles to those used in the strategic allocation. high-return securities). which explain the difference from the value reported in note 27 to the 2010 consolidated financial statements. 2009 Stock market value in millions of euros Book value40 in Stock market or millions of realizable value euros in millions of euros Categories 1° Bonds.5% 100% December 31.7% 49.324 15.5% 43. negotiable bills. etc issued by private sector entities 3° Equities. which explain the difference from the value reported in note 46 to the 2010 consolidated financial statements.827 749 None 0. 2010 Dec 31. management fees.810 10.2% 56. giving access to the capital of companies whose head office is located in the territory of a EU member state or OECD country 4° Shares or units in funds investing in assets referred to in 1 to 3 5° Shares or units in funds investing principally in assets other than those referred to in 1 to 3 6° Real estate shares (shares in unlisted real estate companies) 7° Deposits with BNP Paribas Securities Services Other payables and receivables (dividends receivable.375 642 117 7. 2010 and 2009 is as follows: December 31. decree 2007-243 of February 23.342 737 3.Portfolio content under the classification from Article 4.3% 14.8% 100% Investments in equities Investments in bonds RTE-EDF Transport shares Total 100% (*) relative shares of equities and bond sub-portfolios. 2010 Dec 31. excluding RTE shares 40 Sources: BNP Paribas Securities Services for the portfolio excluding RTE. currency hedges.025 5 10.0% 42. 2009 43. 2009 Book value in millions of euros Dec 31.029 5 11.042 -9 13.406 2.040 682 3. etc.421 125 8.815 41 117 6. 41 The portfolio’s stock market value or realizable value includes foreign exchange hedges. receivables and other securities issued or guaranteed by an EU member state or OECD country.441 42 Breakdown by sub-portfolio and performance in 2010 The breakdown of EDF’s dedicated asset portfolio at December 31.441 11.810 142 6.015 14. etc) TOTAL DEDICATED ASSETS EXCLUDING RTE SHARES RTE-EDF Transport shares TOTAL DEDICATED ASSETS 3.023 None 0.042 -9 12.272 1. 2010 Incl. shares and other securities traded on a recognized market. 42 The portfolio’s stock market value includes foreign exchange hedges.599 447 None 0.038 604 3.491 2. Page 60 sur 137 . 2007 Dec 31. RTE Excl. 2° Bonds. RTE (*) 50.708 569 None 0. net book value in the individual accounts of EDF for 50% of the shares in EDF RTE Transport. 94% +4. Citigroup EGBI for the bonds sub-portfolio. Page 61 sur 137 . 2009 Stock market value Benchmark in millions of euros Portfolio index 43 16. Equities sub-portfolio Bonds sub-portfolio Cash sub-portfolio Total portfolio excluding RTE RTE-EDF Transport shares Total dedicated portfolio asset Dec 31.40% +0. 2009.939 6.324 15.683 1 13.07% Benchmark index +25.815 Dec 31.06% +5.35% +0.83% +13.441 11.441 Performance for 2010 Performance for 2009 Portfolio +28.The table below shows the performance by sub-portfolio at December 31.491 2. 50% MSCI World DN EUR hedged + 50% Citigroup EGBI for the total portfolio. 2010 Stock market or realizable value in millions of euros 6.79% 14.03% 0.50% 0.73% +15.10% 43 Benchmark index: 50% MSCI World DN EUR hedged for the equities sub-portfolio.60% 4. 2010 and at December 31.15% 2.99% 0.501 1 11.49% 8.807 6.44% 7. This policy defines the organization of counterparty risk management and monitoring. Thanks to the allocation decisions and careful selection of securities and funds. which at December 31. compared to 20. when the Group moved to a more frequent (quarterly) consolidation of all counterparty risks.The variation in EDF’s dedicated asset portfolio was influenced in the first halfyear by developments in the sovereign debt crisis and its effects on the international equity markets. 2009.7 Management counterparty/credit risk of Counterparty risk is defined as the total loss that the EDF group would sustain on its business and market transactions if a counterparty defaulted and failed to perform its contractual obligations.29). The dedicated asset portfolio thus registered a gross change of €890 million (€584 million after taxes) in consolidated equity.e.65. 2010. This volatility is likely to affect the Group’s equity. a Page 62 sur 137 . The EDF group has a counterparty risk management policy which applies to the parent company and all operationally controlled subsidiaries . At December 31. 2010. The allocation policy gave general priority to increasing diversification on the various markets. In view of the financial crisis. by rating. 1.1.9.054 million. and reducing risks related to government bonds from countries adjacent to the euro zone in favor of investment grade corporate bonds. and reporting procedures and circuits. 2010. the Group prudently maintained the portfolio’s underexposure to equity risks in the first half-year. The volatility of the equities subportfolio can be estimated on the basis of the volatility of the benchmark index. which continued into 2010. 87% of the main counterparties for the Group’s business qualify as “investment grade”. the sensitivity of the bond sub-portfolio (€6. it remained well below the sensitivity of the benchmark index (6. Applying this volatility to the value of equity assets at the same date.23).807 million at December 31. the MSCI World index. The policy also close supervision of Group counterparties (daily review of alerts. The market value of the “equities” subportfolio in EDF’s dedicated asset portfolio was €6.683 million) was 4. It subsequently raised the portion of Equity investments in the second half-year when worldwide economic fundamentals and international equity market trends looked more favorable. These supervision procedures proved their robustness during the financial crisis. The distribution of the portfolio between reserved funds and other financial instruments is also presented in note 46 to the consolidated financial statements at December 31. EDF is exposed to equity risks and interest rate risks through its dedicated asset portfolio. of the EDF group’s consolidated exposure at the end of September 2010. the Group estimates the annual volatility of the equities portion of dedicated assets at €1. 2010 was 15. While this sensitivity was higher than in 2009 (4. It involves monthly consolidation of the exposures on financial and energy markets and halfyearly consolidation for all activities.5% based on 52 weekly performances. special cautionary measures for certain counterparties).2% at December 31. while maintaining low sensitivity to long rates. i. The table below gives details. both sub-portfolios outperformed their benchmark index. a uniform 100 base point rise in interest rates would result in a €311 million decline in market value which would be recorded in consolidated equity. 2010 December 31. 2010 December 31. 2009 * IPP : Industrial Power Plants 5% 6% 45% 44% 100% 100% Exposure in the energy trading activities is concentrated at EDF Trading. cash-collateral agreements and introduction of guarantees from banks or affiliates.stable proportion overall compared to the AAA September 30. Particularly for counterparties dealing with EDF’s trading room. IPP *) (incl. The credit risk related to trade receivables is presented in note 26 to the 2010 consolidated financial statements (“Trade receivables”). BB 1% 0% B 0% 0% CCC/C 0% 0% Unrated 11% 9% Total 100% 100% The exposure to counterparty risk by nature of activity is distributed as follows: Energy Sales and Cash and asset management purchases and distribution trading (incl. The level of exposure can be consulted in real time and is systematically monitored on a daily basis. primarily position netting agreements. The suitability of limits is reviewed without delay in the event of an alert or unfavorable development concerning a counterparty. Page 63 sur 137 . Counterparty risk management for this subsidiary has explicit limits for each counterparty according to its financial robustness. A range of means are used to reduce counterparty risk at EDF Trading. 2009 10% 6% AA 23% 23% A 50% 57% BBB 5% 5% consolidated risk for December 2009. the Financial Risk Control team has drawn up a framework specifying authorization procedures and the methodology for calculation of allocated limits (which must correspond to requirements). IPP *) 8% 7% 34% 37% 8% 6% Purchases Insurance Total September 30. the EDF group is exposed to price variations on the energy market which can have a significant impact on its financial statements.9.2. This policy aims to: define the general framework in which the various Group entities carry out their operational activities (energy generation. - The Group’s exposure to energy market risks through operationally controlled subsidiaries is reported to the COMEX on a monthly basis.a governance and market risk exposure measurement system. - an express delegation to each entity. This enables the COMEX to set an annual Group risk profile consistent with the financial objectives. The control processes are regularly reappraised and audited.9. development of the wholesale markets and on the international scene. - - At Edison and CENG.1. This process involves Group management and is based on a risk indicator and measurement system incorporating escalation procedures in the event risk limits are exceeded. optimization and distribution). coal. defining hedging strategies and establishing the associated risk limits.2.1 Framework for management and control of energy market risks In conjunction with the opening of the final customer market. the Group has an “energy markets” risk policy (for electricity.2 Organization of risk control The process for controlling energy market risks for entities operationally controlled by the Group is based on: . consolidate the exposure of the various entities and subsidiaries controlled by the Group on the structured energyrelated markets. implement a coordinated hedging policy at Group level. gas. which are not operationally controlled by EDF. Page 64 sur 137 . the energy market risk policy and associated control process are reviewed by the companies’ governance bodies.2 Management and control of energy market risks 1. clearly separating management and risk control responsibilities. oil products and CO2 emission quotas) applicable to EDF and entities in which it has operational control. generally over 3-year market horizons.9. given its close interaction with the decisions made within the generation and supply businesses. Consequently. 1. and their interaction with EDF Trading. and thus direct operational management of energy market risks within the Group. and a specific control process. uncertainty over volumes. As such. 2010.5% 1-day) Stop-loss limit 46 New stop-loss limit47 Minimum VaR Average VaR Maximum VaR 2nd-half 2010 45 70 225 3. Managers of generation and supply assets are responsible for implementing a risk management strategy that minimizes the impact of energy market risks on their financial statements (the accounting classifications of these hedges are described in note 40 to the consolidated financial statements). However.3 Operational principles for energy market risk management and control The principles for operational management of energy market risks for operationally controlled entities and CENG are based on clearly-defined responsibilities for managing those risks. positions on the energy markets are taken predominantly by EDF Trading. Page 65 sur 137 . which refers to historical volatilities and correlations estimated on the basis of market prices observed over the 40 previous trading days.8 million and €23 million over the year.4 25. distinguishing between management of assets (generation and supply) and trading. The VaR limit was reduced in response to the diversification of risks between EDFTrading and EDF-Trading North America. The table below shows the VaR and stoploss limits for 2010 and 2009: In millions of euros VaR limit (97. 46 The stop-loss limit system was changed on December 15. EDF Trading’s commitment on the markets was subject to a daily VaR limit of €45 million (with a daily confidence interval of 97.5%).6 13. EDF Trading is subject to a strict governance and control framework in line with current practices in trading companies. The stop-loss limit stipulates the acceptable risk for the trading business by setting a maximum level of loss over a rolling three-month period44. the Group’s trading entity. 45 €225 million from December 15. etc. and a stoploss limit of €70 million45. EDF Trading assesses VaR by the Monte Carlo method.3 11. The stop-loss limit is now determined based on the maximum reached over a rolling 3-month period. 2010 (see note above). 2010.6 14. For operationally controlled entities in the Group. VaR fluctuated between €3.0 22. EDF Trading’s Board of Directors takes appropriate action.1 7.9 14.0 8.2. EDF Trading trades on organized or OTC markets in derivatives such as futures.3 6. a residual risk remains that cannot be hedged on the market due to factors such as insufficient liquidity or market depth. Its exposure on the energy markets is strictly controlled through daily limit monitoring overseen by the subsidiary’s management and by the entity in charge of energy market risk control at Group level. 2010. Automatic escalation procedures also exist to inform members of EDF Trading's Board of Directors if risk limits (value at risk limit) or loss limits (stop-loss limits) are breached. which may include closing certain positions.1. over a given time horizon and with a given confidence interval. 47 From December 15. The limit is set at €225 million.9. If the limit is exceeded.1 1st -half 2010 45 70 2nd-half 2009 48 70 1st -half 2009 38 55 44 The stop-loss limit system was changed on December 15. This is closer to trading companies’ systems and fosters more dynamic management.8 7. which operates on the markets on behalf of other group entities and for the purposes of its own trading activity.8 23. Value At Risk (VaR) is a statistical measure of the company’s potential maximum loss in market value on a portfolio in the event of unfavorable market movements. In 2010. swaps and options (regardless of the accounting classification applied at Group level). forwards. 51 SPE was progressively incorporated into the Group’s risk management and control system during 2010. Like the industrial portfolio. For details of commodity contracts not classified as hedges by the Group.3 to the same consolidated financial statements. see notes 40. For an analysis of the fair value of the Group’s commodity hedging derivatives. The level of economic capital engaged in the markets. The stoploss has never been triggered since its introduction. Page 66 sur 137 . the operational principles were in line with the Group model for asset managers.3 and 40. At Edison. which concern a separate portfolio distinct from the industrial portfolio. 2010. For trading activities. related to unfavourable market movements. is then determined using this net exposure. Edison sets a limit of 95% VaR. 48 Net exposure is the residual exposure after using all natural hedging options provided by vertical and horizontal integration of the various techniques. To meet obligations under IFRS 7.Despite the very high volatility on the markets. 49 Profit at Risk or PaR is a statistical measure of the maximum potential decline.5 to the consolidated financial statements for the year ended December 31.5%). This allocation takes account of the risk capital related to the portfolio’s VaR and the risk capital estimated through stress tests on any non-liquid structured positions. At the year-end. Edison calculates its net exposure48 based on its entire portfolio of assets and contracts (industrial portfolio). apart from those related to trading for the company’s own purposes (trading portfolio). Edison measures the maximum potential decrease in the fair value of financial contracts hedging the risks on its industrial portfolio using a PaR (with a confidence interval of 97. For operational purposes.4. see note 41. 51 Figures will be available when Edison has published its annual results. 50 Economic capital is the capital allocated to deal with market risks. the governance model separates risk management and control from operational trading activities. expressed in terms of Profit at Risk (PaR)49. the VaR and stop-loss limits were not exceeded in 2010 and EDF Trading’s risks remained within the limits of the mandate from EDF at all times. in the margin compared to budget for a given time horizon and confidence interval. Edison’s trading portfolio was allocated an amount of economic capital50. excesses and limits are specific to each contract. The main insurance programs are: - - General civil liability insurance: this program covers the Group against the possible financial consequences that could arise due to damage or injury (other than nuclear) caused to third parties. Page 67 sur 137 .3 Management of insurable risks The EDF group has an extensive insurance program that is gradually being rolled out to controlled subsidiaries. 2010 by an insurance policy involving the French nuclear pool and the European Mutual Association for Nuclear Insurance (EMANI). 53 An Irish insurance company wholly-owned by EDF. Additional insurance coverage is provided by Wagram Insurance Company53 (a 100%-owned EDF subsidiary).2 million in 2010. of which €59. Civil liability insurance specific to nuclear facility operators: EDF’s insurance policies meet French legal requirements. Civil liability insurance for directors and senior executives: EDF’s insurance program covers the Group’s directors and chief executive officers. - Conventional damage policy (Group): EDF is a member of OIL52. 54 Nuclear Risk Insurers Limited. exclusions. Nuclear damage to British Energy installations is insured by the British pool NRI54 and EMANI.4 million was borne by EDF.9. - - - 52 Oil Insurance Limited Mutual Insurance Company. Damage insurance for the EDF group’s nuclear facilities: in addition to coverage through membership of OIL. The coverage. and EnBW benefits from similar coverage. The arrangements for setting up damage insurance for the aerial distribution networks of ERDF and the Island Energy Systems are currently under examination.1. which are independently managed. The total value of premiums for all types of coverage provided by EDF’s insurance programs and Group programs managed by EDF Assurances was €91. property damage related to EDF’s nuclear installations in France (including following a nuclear accident) and nuclear decontamination costs have been covered since March 1st. as well as ERDF and RTE. British Energy also has similar civil liability insurance in compliance with British law. other insurers and reinsurers. 817 57.353 13.684 11.118 1.207 54.992 Coverage of long-term obligations for the EDF group’s nuclear facilities: (in millions of euros) . 2010 December 31.613 518 22.EDF: Dedicated assets British Energy: Assets receivable from the NLF and the British government .573 17.829 6. 2010 and December 31.1.131 14.Other companies Total assets providing secure financing for long-term obligations related to the EDF group’s nuclear facilities December 31. 2010 15.132 19.436 6.020 16. 2010): (in millions of euros) Provisions for spent fuel management Provisions for long-term radioactive waste management Provisions for back-end nuclear cycle Provisions for decommissioning Provisions for last cores Provisions for decommissioning and last cores Provisions for post-employment benefits Provisions for other long-term employee benefits Provisions for employee benefits Other provisions Total provisions December 31.147 7.552 3.024 6.426 18.249 4. 36 and 46 to the consolidated financial statements at December 31.267 Page 68 sur 137 .033 20. 2009 11.960 December 31.119 12.996 18.10 Provisions The following table sets forth provisions at December 31. 2009 11. and assets set aside to secure financing of long-term obligations related to the EDF group’s nuclear facilities (see notes 29.320 3.399 432 18.564 4.445 1.475 11. 2009. The principal risks and uncertainties to which the Group considers itself exposed are also described in section 4. The Group remains subject to the usual risks specific to its business.2 of the Document de Référence. 1.11 Off balance sheet commitments (commitments given) Off-balance sheet commitments are described in note 42 to the 2010 consolidated financial statements.14 Principal risks and uncertainties The EDF group policies for risk management and control are described in section 4.1 of the Document de Référence.12 Subsequent events Details of post balance sheet events can be found in note 49 to the consolidated financial statements at December 31. Page 69 sur 137 .1.13 Transactions with related parties Transactions with related parties are described in note 47 to the 2010 consolidated financial statements. 1. This presentation describes the major risks and uncertainties affecting the Group. 2010. 1. EDF anticipates that none of these. 2012 for the Saint-Jean-deMaurienne plant. 2010 to assess whether Euro Power Technology’s complaint and request for interim measures were admissible. Further to several written requests from Alcan France to extend the duration of the contract. 2010. 2009. EDF. The duration of the contract was modified by amendments. EDF had received no proposed correction from the tax authorities for those financial years.15. Pechiney (now named Alcan France) and Aluminium Pechiney signed an energy supply contract principally for the supply of Pechiney’s primary aluminum plant at Saint-Jean-de-Maurienne. 2010.15. Verdesis. the pleadings were scheduled for October 26. 2007 for an initial procedural hearing. concerning the biogas activities of the two companies. and EDF submitted its preliminary observations on June 23.2 Tax litigation An audit of the accounts for 2007 and 2008 began in 2010. 2010. However.4 Red Electrica de Espana (REE) Following their litigation. which dismissed the appeal in a decision of December 2. and the audit concerning the year 2008 is continuing. the Commercial Court dismissed all of the Page 70 sur 137 .1 Labor litigations EDF is a party to a number of labor lawsuits. EDF and REE signed a settlement agreement on June 29. 2010 defining the practical terms for implementing the arbitration ruling.3 Verdesis In June 2008. 1985. please refer to those documents. the complaint was dismissed. 1. The French Competition Authority met on February 17. In its ruling issued on January 18.15. thus putting an end to the dispute. and it is due to expire on December 31. Euro Power Technology filed a complaint and a request for interim measures with the French Competition Authority against EDF and its subsidiary. Alcan France and Aluminium Pechiney served a summons on EDF on August 2. 2010.1. For further details on these litigations.15.15 Significant events related to litigation in process This chapter is a description of new litigations and of existing ones that have significantly evolved since they were described in section 20. as these litigations relate to situations likely to involve a large number of EDF’s employees in France. Euro Power Technology appealed this decision before the Paris Court of Appeal.15. After several deferrals. which could have a significant negative impact on the Group’s financial results. 1. is likely to significantly impact its profits and financial position. 2009. As at the closing of the 2010 financial year. 2007 to appear before the Paris Commercial Court on September 21. 1. Under the terms of this contract EDF undertook to supply volumes of electricity at a set price. A further appeal was lodged with the Cour de Cassation on December 28. On April 16. On April 26. 1. 2010. they could represent a systemic risk.5 of the 2009 Document de Référence and section 14 of the 2010 Half-year Financial Report. The French Competition Authority notified the submission of this complaint to EDF on June 9. 1.5 Alcan Saint-Jean-de-Maurienne On December 31. when considered separately. The deadline for tax reassessments in respect of 2007 is now time-barred. 2009. 6 Greenpeace A preliminary investigation has been initiated before the Nanterre Criminal Court under “concealment of invasion of an automated data processing system” after a computer expert from a non-Group agency stated that he had hacked into the computer used by former Greenpeace spokesman in 2006. 2010. This claim came with a request for interim measures.15. 2010. the examining magistrate (juge d’instruction) ordered EDF and the two employees to be sent before the Nanterre Criminal Court. and the other by a group of environmental protection associations. and have been subject to disciplinary transfers. 2010.claims by Alcan and Aluminium Pechiney. Roozen has also filed two petitions with the Lyon Administrative Court. Two petitions for cancellation of the decree were filed with the French Council of State in June 2010. Mr Yannick Jadot. 1. a conditioning and interim storage installation for radioactive waste in the city of Saint-Vulbas.8 Packaging and interim storage installation for radioactive waste (ICEDA55) Decree 2010-402 of April 23. The case is due to be heard by the relevant court in 2011. 2009. 2010. 2007. 2010. and the hearing should take place in 2011. a horticultural company operating near the site. A public rapporteur was appointed in October 2010. dated November 25. The first of these petitions was filed on April 21. 2010 authorized EDF to put up a regulated nuclear installation. 2009 respectively.15. at the request of an EDF employee. the French Competition Authority considered the case admissible on its merits but dismissed KalibraXE’s request 55 Installation de conditionnement et d’entreposage de déchets activés. 2008. 2007 alleging anticompetitive practices by EDF. Defense statements were filed on August 7. On April 25. This action was notified to EDF on May 6. requested an emergency injunction to suspend the building permit. 2009. one by Roozen. EDF was placed under investigation on August 26. in Ain. The French State and EDF filed their defense statement in mid-July 2010. who filed an appeal against the ruling before the Paris Court of Appeal on March 19.15.15. by decree 2008-1197 of November 18. and Roozen lodged an appeal with the French Council of State on December 28. 2010 in which the Ain local administrative authority (Préfet) granted a building permit to ICEDA.9 KalibraXE KalibraXE submitted a complaint to the French Competition Authority on January 22. against the decision of February 22. 1. The said employee and his supervisor were formally placed under investigation (mis en examen) on March 24 and June 10. Page 71 sur 137 . 2009 by the French State and September 3. an association filed an action for cancellation of the decree before the French Council of State on January 21. The second petition. 1. 2009. 2010 and sought cancellation of the building permit. On October 15. The petition was refused by an order of the Lyon Administrative Court on December 13. The defense statements were submitted by the French state and EDF in mid-January 2011. 1. 2009 by EDF.7 Bugey 1 After EDF obtained permission to completely dismantle the Bugey 1 nuclear facility. 2010. ceased to be published. caused a heavy increase in requests for purchase contracts. and paid Statoil €18 million. including the Green Yellow companies. the parties are bound to abide by it and must amend their contract accordingly. 2003 EDF and Statoil signed a 15-year natural gas procurement contract. 2007 finally ended the dispute.15. As no appeal was filed within 2 months after the ruling. and the Paris Commercial Court must now judge the matter on its merits.15. subsidiaries of the group Casino operating in the distribution business. 2006. the French Competition Authority sentenced EDF for abuse of its dominant market position for having prevented the execution of electricity purchase agreements with independent producers between 1993 and 1995. this litigation is now closed. 2010 decided not to pursue the KalibraXE case. to modify both the purchase prices of electricity generated from photovoltaic energy and their terms of application. 2010. Approximately ten further litigations on the same grounds are pending. Page 72 sur 137 . 1996. Sustainable Development and the Sea in Autumn 2009 of a decrease in the photovoltaic electricity purchase prices set by the order of July 10. On November 18.15.12 Statoil On February 14. 1. the French Government decided. the National Association of Independent Producers and Heat Engineers (SNPIET). which was not a party to the proceedings before the French Competition Authority and civil courts. Statoil notified EDF of its decision to trigger the expertise procedure pursuant to the provisions of the contract and submitted. in March 2010. Statoil sent EDF an invoice for reimbursement of €50 million. In July 2007 Secam. then decided to bring proceedings against EDF before the Paris Commercial Court in order that EDF be required to purchase the generated electricity at the more favorable tariff conditions set out by the previous order of July 10.2 index. In this context. which it considered due.11 Casino The announcement by the Ministry of Ecology. included in the contractual price calculation. However. In January 2011. 1. The French Tribunal des conflits ruled on December 13. 2010 this expert issued his decision on the replacement index. 2010 that the dispute was a matter for the judicial courts. In January 2009. A settlement agreement dated July 20.for interim measures. In a ruling of July 30. the Chalons-enChampagne Administrative Court dismissed Secam’s claim. Several producers. and the matter is now closed. 2006. a further disagreement then arose between the parties as to the date for retroactive application of the new index in view of the contractual provisions. likely to generate a very significant increase in costs to be compensated by the CSPE. and EDF and Statoil began discussions over its replacement. mostly before the judicial courts. and approximately twenty producers have introduced an action in payment of damages. Energy. 2007. Following this sentence. which dismissed it on June 26. Discussions with Statoil are continuing. by an order of January 12. applying this index as from February 2009. a request for the appointment of an expert to the International Chamber of Commerce (ICC). KalibraXE lodged an appeal against this decision with the Paris Court of Appeal. A ruling of the French Competition Authority of July 8. This decision is final. EDF is contesting this invoice and the retroactive date applied. 1. Failing to reach an agreement. filed a claim for an indemnification of €79 million before the administrative courts.10 Secam By a decision of December 10. the Gasoil 0. RTE-EDF Transport is subject to an audit of its accounts for 2008 and 2009. In addition.1.13. SNCF has proposed to transfer its electricity facilities to RTE. 2009 the specially-formed commission “Commission Moulin” issued its decision on the transfer value of the network.15.1 Tax litigations Since February 3. 2009.1.15.15. the French Council of State declared RTE’s appeal inadmissible on January 27. which was dismissed by the Paris Court of Appeal on September 7.1.1 RTE-EDF Transport 1. 2010.1 Annual rent contract with SNCF and transfer of high-voltage lines attributed to SNCF In the dispute over the amount of annual rent paid by RTE to SNCF for use of the high-voltage electricity transmission network facilities attributed to SNCF by the French law of December 30. 2011. The CORDIS ruled in favor of RTE-EDF Transport in a decision notified to the parties on October 15. 2010 no potential reassessment had been identified by the tax inspectors. 2010 were signed on May 26. 2000.13. As at December 31.15. The two companies have reached an agreement on sharing service costs and the sale was agreed for an amount of €140 million.13. This decision is final and the matter is thus now closed. as a result. 2004 on the public electricity and gas service and electricity and gas companies had also set out that SNCF’s high voltage electricity transmission network facilities attributed by the law of December 30. The contracts permitting the transfer of ownership as from May 1.15. 1. RTE is the owner of the lines concerned. 1. 2010.15.13 Legal proceedings concerning EDF’s subsidiaries and interests 1. French law 2004-803 of August 9. 1982. fixing it at €140 million.2 ERDF 1. The audit concerning the year 2008 is continuing.13. It brought the matter before the CORDIS56 on July 3. and Development Page 73 sur 137 . The deadline for further appeal by Poweo has now expired and RTE has received a certificate from the French Cour de cassation confirming that no appeal has been filed. 2010 by SNCF. Poweo then lodged an appeal against this decision. and the deadline for tax reassessments in respect of that year has now expired. 56 Community Research Information Service. ERDF is subject to a tax audit for financial years 2007 and 2008.13. of which only €80 million have been paid by RTE as down-payment.3 Tax litigation Since July 2010. considering the transfer value of the facilities to be much higher than the price set by the Commission Moulin. 2010.2. 2009. 1982 should be sold to RTE. 1. 2009. As at December 31. On July 9. ERDF had received no proposed correction from the tax authorities for 2007. potentially during 2011.2 services Contribution to system Poweo challenged the mandatory contribution to system services set forth in article 15 of the French law 2000-108 of February 10.13. Until the French Council of State rules on the appeal. and requested that the contribution should follow “market rules”. SNCF filed an appeal against this arbitration decision with the French Council of State on August 20.1.15. 15. the supplier must pay ERDF the price corresponding to delivery through the network. AEM Turin.A. and enter into a contract known as a GRD-F contract with the network operator for access to the network in order to perform such supply contracts. 2000 decree. 2000).15. As EDF and its subsidiaries refused the inter partes proceeding requested by ACEA for the assessment of its prejudice. Rome’s municipal utility. 2008. In January 2007. any potential decision by an Italian judge Page 74 sur 137 . In August 2006. Delmi. According to ACEA. In a decision of October 22. the crossing of this threshold is a violation of the applicable laws and constitutes an act of unfair competition which could adversely affect the competition on the energy market and the consumers’ interests.1. dated November 8. The hearing on the merits of the case and on the grounds on which ACEA based itself to assess its prejudice. and has been postponed several times until January 26. ACEA initiated an action against EDF. had crossed the threshold of 30% of the share capital of Edipower held by State corporations (as defined by a decree of the Italian Prime Minister.3 Edison 1. The current wording of the GRD-F contract provides that in the event of a payment default of the final customer. alleging that the joint takeover of Edison by EDF and A2A S.3. 2000 allows suppliers to offer their customers a single contract for both supply and network access. 2011. Direct Energie challenged this provision through a petition to the CORDIS filed on July 20.. and to compensate ACEA for the prejudice suffered.15. ACEA also indicated that it would request the court to take interim measures to protect its interests until the court rules on the merits. The judge refused the filing of additional evidence from ACEA assessing its prejudice at €800 million. as well as generating a surplus cost for its implementation that would ultimately be borne by end-customers. ACEA SpA (“ACEA”). On July 7. 2006. to sell their stakes in order to remain under the 30% limit and prohibit them from taking and using energy in excess of the 30% threshold. 2010.A. Atel and TdE) before the Rome Civil Court. the AGCM rendered an opinion supporting ACEA’s position and officially requiring from the Italian Government and parliament that measures be taken in order to comply with the provisions of the November 8.A.A.13. as this decision undermines the overall balance of the single contract and would increase the complexity of market rules.13. A2A S. 1.2 Direct Energie Article 23 of the law of February 10. Edipower. Endesa Italia joined ACEA in its legal action. The CORDIS therefore requested that ERDF sends to Direct Energie a new GRD-F contract in compliance with this decision.13. 2010 notified to ERDF on November 17. addressed a complaint to the Italian Government and to Italian regulation (AEEG) and competition (AGCM) authorities. IEB and WGRMH Holding 4 (along with Edison. to force EDF and A2A S.2.1 Legal Action initiated by ACEA SpA concerning Edison’s shareholding in Edipower On May 2006. was initially set for June 26. ERDF lodged an appeal before the Paris Court of Appeal. 2010. and that the supplier must have recovered the amounts due for network use from the final customer before paying them to the network operator. It therefore asked the court to acknowledge the unfair behavior of EDF and A2A S. the CORDIS ruled that no provision in the current legislation authorized ERDF to force the supplier to bear the risk of nonpayment of the share due to the distributor. 4 BE ZRt In November 2005. 57 Decree setting out terms including the tariff for renewable energies and cogeneration. BE ZRt negotiated an 8-year sales contract with MVM (the state-owned sole Hungarian buyer) for half of its electricity output. 2011 hearing was postponed.in favor of this assessment should not be binding upon EDF. the European Commission issued a decision requiring the Hungarian Government to terminate the existing PPAs by the end of 2008 and the electricity producers to refund by April 2009 any amounts of State aid received since May 1. BE ZRt decided to appeal this European Commission decision. in late 2010 MVM informed BE ZRt that it intended to seek termination of this contract. 2006. 2004. Subsequently. In December 2010. After several discussions between BE ZRt and the authorities. and benefited from the “Cogen decree”57 for the sale of the other half of its output. 1. This agreement will be presented to the judge at the hearing of March 24. However. adopted by the Hungarian Government on November 28. 2008. are still ongoing. 2008 for termination on December 31. BE ZRt appealed this decision on March 3. EDF International.13. 2008. On June 4.ON Italia undertakes to drop the case and all other claims against EDF in connection with EDF’s indirect investment in Edipower. now named E. In order to pursue its business. for a period due to run until 2013. BE ZRt’s PPAs were thus terminated at December 31. 2008 that it was entering into a pre-arbitration phase of negotiations under the Energy Charter Treaty (ECT) and the Franco-Hungarian treaty on protection of investments. and EDF signed a settlement agreement in which E. initially by supporting the appeals lodged before the European Court of First Instance by other Hungarian producers. 2008 of all PPAs not already terminated at that date by mutual agreement between the parties. whose investment in BE ZRt was undertaken after the company’s privatization on specific terms that are now in question. Endesa Italia. and then by filing its own appeal on May 4. The failure to reach an agreement is likely to result in a dispute between the two companies. Page 75 sur 137 . The Hungarian Government did not challenge the European Commission’s decision. The next step in the appeal will be a court hearing by the European Court of First Instance. the date on which Hungary joined the European Union. The appeal proceedings against the decision to start a formal investigation. The written procedure came to an end on June 9. notified the Hungarian State in a letter dated September 26. without waiting for the ruling by the European Court of First Instance on the appeal. 2011. 2008. Meanwhile. and the Hungarian legislator complied with it by enacting a law on November 10. which had become unprofitable due to changes in electricity prices. initiated by BE ZRt before the European Court of First Instance in March 2006. the Hungarian government has begun reforms to amend the existing Cogen decree.15. As a result BE ZRt will have no illegal State aid to repay. as the January 26. 2009. and there is some doubt as to whether BE ZRt can continue to benefit from this decree in 2011. in late April 2010 the European Commission and the Hungarian government finally accepted the principle of netting stranded costs with the State aid paid. 2008. at a date that has still not been set.ON Italia. the European Commission decided to start a formal investigation on long-term electricity purchase agreements (PPAs) on the grounds of European regulations on State aid. Page 76 sur 137 . and electricity transmission. and finally that EDF imposes unfair conditions in its energy purchase contracts with SNPIET members. 2011.14. An initial hearing for these proceedings took place on September 25. which set the timetable for the arbitration and decided to hold it in Switzerland.14 Litigation arising from the 2010 year-end 1. 2010 when the parties agreed to suspend the arbitration until December 31. that EDF used predatory pricing in its bids for these tenders. Finally. aiming at reaching an amicable solution. 2010. validated by the Arbitration Court. It alleges that RTE favored EDF to select it as supplier in two tender offers of 2005 and 2007. 2010.15. and a request for interim measures. 2009. extended this deadline to April 15. 2010. in accordance with UNCITRAL regulation. The SNPIET claims that EDF and RTE took unfair advantage of their dominant market positions in energy generation and purchase. France’s National Association of Independent Producers and Heat Engineers (Syndicat National des Producteurs Indépendants d’Electricité Thermique . 2010. EDF International was to finalize its reply by March 26. After discussions involving both parties. the date was postponed once more at the request of the Hungarian government to April 30. The investigation services of the Authority transferred this complaint to EDF and RTE on January 11.SNPIET) filed a complaint with the French Competition Authority concerning practices employed by EDF and its subsidiary RTE. a French Competition Authority hearing on interim measures could take place in early April 2011 (no date has been set yet).on May 12.15.1 Syndicat National des Producteurs Indépendants d’Electricité Thermique (SNPIET) On December 1. but two successive agreements among the parties. 2009 EDF International sent a notice of arbitration to the Hungarian State on the basis of the ECT. 1. 2011 in an agreement of December 21. the Group has set itself the following objectives for 2011: organic growth in EBITDA58 of between 4% and 6%59. based on the 2011 scope of consolidation excluding the British networks. These growth targets will enable the Group to continue its investments. In Italy. This recovery is accompanied by restrained inflation. 2011. The expected effective date of this law is July 1. especially in the United Kingdom. 2011 dividends at least equivalent to 2010 dividends. a net financial debt / EBITDA ratio of between 2 and 2.1. In France.2 . Page 77 sur 137 .16 Financial outlook for 2011 The opening weeks of the year 2011 have seen moderate general growth of the European economies. consistent with the average tariff for the EDF portfolio of clients under TaRTAM. electricity demand is also expected to show moderate growth. The rise in coal prices will continue to affect margins (“dark spread”). EDF’s business will be affected by significant changes in the regulatory framework resulting from the application of the NOME law reorganizing the country’s electricity market. On the basis of 2010 results. with a slight rise in wholesale prices in France and the United Kingdom. Against this backdrop. the influence of low spot prices for gas should still be reflected in electricity prices. 58 Measured as a percentage of pro forma 2010 EBITDA. 59 These objectives assume an initial price of €42/MWh for regulated access to historical nuclear energy (ARENH . RTE and EnBW.Accès Régulé à l’Electricité Nucléaire Historique). especially in nuclear maintenance and development. R&D works alongside the Heat generation and engineering division on pilot schemes. notably concerning mobile electricity. and helps to bring the most promising technologies into industrial existence to benefit the Group.fostering flexible. EDF’s Research and Development Division employed more than 2. and identify and prepare medium and longterm growth engines.1.consolidating and developing a carbonfree energy mix. hydropower and fossilfired generation. . patents and licenses The primary objective of the EDF group’s Research and Development (R&D) Division is to contribute to performance improvement in the operational units. In the field of nuclear. while also preparing for new. the key objectives are to consolidate the Group’s nuclear advantage and develop renewable energies. energy-saving buildings for different market segments. with the rest concentrated on medium and long-term actions for the future . to benefit from a stronger cooperation dynamic with the higher education and research establishments located nearby. In the second priority area. R&D seeks to identify technological breakthroughs with significant competitive value. EDF R&D develops instruments and methods to improve operating performance and safely optimize the operating life of the Group’s generation facilities. etc. Close to 70% of EDF’s R&D activities each year concern projects instigated by the operational divisions and Group subsidiaries. EDF R&D is investing in several experiments in Europe to assist future “smart cities” with local-scale infrastructure optimization.) and social issues (energy poverty). the role of R&D is to evaluate processes in order to take a long-term position in coal-fired generation. and other studies concerning environmental issues (biodiversity. R&D priorities EDF’s R&D ambitions focus on three priority areas: . the Group’s total R&D expenses amounted to €486 million. one in the UK and one in Poland).adapting the electricity system in response to the latest issues. The R&D teams also contribute to preparation of new offers for customers who are actors in the energy markets.17 Research and development Research and development. In November 2010. EDF’s Board of Directors validated the plan to establish EDF’s principal R&D center on the ParisSaclay Campus. Page 78 sur 137 . In the first of these areas.one of the priority areas of R&D. . low-carbon energy demand. To advance sustainable development. one in Germany. and to examine the industrial feasibility of carbon capture and storage. stricter environmental constraints. local impacts of climate change. particularly in solar and marine energy. 2010 on six sites (three in the Paris area. and also participates in other innovations. R&D innovates with new uses for electricity: mobile electricity. reduction of noise pollution. In 2010. For carbon capture and storage.000 members at December 31. for instance at Le Havre power plant units with a pilot scheme for amine-based carbon capture. and propose tools and methods to develop customer knowledge. water quality. heat pumps. In the field of renewable energies. almost 20% of which were directed into environmental protection: energy efficiency and renewable energies. design benchmark energy solutions and improve sales management. The third priority area for R&D is adapting the electricity system to a carbon-free economy: this will require skills for managing intermittent supply, incorporating new uses of electricity while optimizing generation facilities and network requirements, developing energy management systems on a local scale, and optimizing electricity flows on continental scale. The shift towards “smart grids” is a cornerstone of these R&D efforts. The R&D teams work on preparation of predicted scenarios and development of energy system models that offer better control of the supply-demand balance. They supply innovative solutions that facilitate incorporation of decentralized intermittent generation, improving management of network assets (wear and tear of equipment, metering procedures, automation to optimize quality and cost, etc). R&D is contributing to the emergence of large continuous-current networks or “supergrids” in Europe and throughout the world, and covers themes relevant to all areas of the group (smart grids, smart cities, supergrids). EDF R&D: involved in French, European and worldwide research To carry out its research and development programs, EDF R&D concludes partnerships in across the whole world. In France, R&D has a total 12 shared laboratories set up over the years with academic research partners, and technical or industrial centers. Through these laboratories the Group contributes to joint research projects financed by national agencies. R&D also supports four specific chairs of research and development, including through the Foundation for Tomorrow’s Energies (Fondation pour les Energies de Demain). In Europe, EDF R&D is involved in some thirty projects. Working with the Energy Technology Institute, the Engineering and Physical Sciences Research Council and several UK universities, it reinforces its profile in partnership-based research in the United Kingdom. In 2010, two new R&D units were opened in Poland and the UK. Among other projects, the British center is involved in research on offshore windpower and nuclear power development, while the Polish center studies issues related to coalfired energy and biomass cofiring. EDF is considering opening other R&D units outside France. In addition to the new British and Polish entities, the Group’s R&D joined the French government’s “Program for Investments with a Future” (Programme des Investissements d’Avenir), contributing to the Group’s smart grid demonstrators. It has also taken part in two Knowledge and Innovation Communities, European Commission initiatives to encourage knowledge and skill transfer between education, research and industry. The priority areas are climate change, intelligent networks and cities, storage, and renewable energies. Intellectual property policy At December 31, 2010, EDF had a portfolio of 418 patented inventions protected by 1,225 intellectual property titles in France and other countries. EDF is also a registered trademark in more than 60 countries. Page 79 sur 137 1.18 General information on EDF’s capital and governance bodies 1.18.1 Changes in the capital At the date of this document, EDF’s share capital totals €924,433,331 divided into 1,848,866,662 fully subscribed and paid-up shares with nominal value of €0.50 each. The following table summarizes the authorizations to increase or reduce the capital in force at December 31, 2010 granted to the Board of Directors by EDF’s shareholders at their meeting of May 18, 2010, and details of their utilization: Duration(1) of the authorization and expiry date Maximum total nominal value of the capital increase (in millions of euros) Utilization of authorizations (in millions of euros) Securities concerned / type of emission Delegation of authority to the Board to increase the capital, maintaining the shareholders’ preferential subscription right Capital increase comprising all types of securities Delegation of authority to the Board to increase the capital, with no preferential subscription rights for shareholders Capital increase comprising all types of securities Delegation of authority to the Board to make private placement offering(3) with no preferential subscription rights for shareholders Capital increase comprising all types of securities Authorization to the Board to increase the number of shares to be issued in the event of a capital increase with or without preferential subscription rights Capital increase comprising all types of securities Delegation of authority to the Board to increase the capital by capitalization of reserves, profits, premiums or other amounts eligible for capitalization Delegation of authority to the Board to increase the capital as a result of an exchange offer instigated by EDF Authorization to the Board to increase the capital in return for contributions in kind (4) Delegation of authority to the Board to increase the capital to the benefit of members of an EDF group savings plan Offerings reserved for employees 26 months July 18, 2012 45(2) [none] 26 months July 18, 2012 45(2) [none] 26 months July 18, 2012 45(2) [none] 26 months July 18, 2012 15 % of the initial issue(2) [none] 26 months July 18, 2012 26 months July 18, 2012 26 months July 18, 2012 1,000 [none] 45(2) 10% of the company’s share capital up to a maximum of 45(2) [none] [none] 26 months July 18, 2012 10 10 % of the capital per 24-month period [none] [none] Authorization to the Board to reduce the capital by 18 months canceling treasury shares November 18, 2011 (1) From the date of the shareholders’ meeting of May 18, 2010 (2) Nominal overall limit for capital increases (3) Offerings covered by an article L.411-2 II of the Monetary and Financial Code. (4) Article L. 225-147 of the commercial code Page 80 sur 137 At December 31, 2010, the shareholding structure was as follows: French State: Institutional and private investors: Employees: - incl: employee investment fund60 Treasury shares: Total number of shares: 84.48% 13.10% 2.39% 2.10% 0.03% - The book value of these shares at December 31, 2010 (based on purchase price) was €18,636,871, and their nominal value was €274,301. Treasury shares were acquired for the following purposes: repurchase plan under a liquidity contract, acquisition of shares in the MULTI employee investment fund, and acquisition of shares with no liquidity contract for the purposes of the “ACT 2007” free share plan. These shares represented 0.03% of the total share capital at December 31, 2010, distributed by purpose as shown below. 1,848,866,662 1.18.2 Other capital transactions No EDF share is to be attributed to employees under the employee profit-share plan. Information on transactions by the company on its own shares under a liquidity contract (repurchase programs authorized by the shareholders at the general meetings of May 20, 2009 and May 18, 2010): Number of shares purchased and sold in 2010: during the year, EDF purchased 2,607,442 shares and sold 2,294,477 shares in EDF. Average price of share purchases and sales: during 2010, the average purchase price for shares was €36.02 and the average sale price was €36.69. Brokers’ fees: the fixed commission defined in the liquidity contract was €180,000.00 for 2010. Number of shares registered in the company’s name at the year-end, book value (based on purchase price) and nominal value: - 548,601 shares61 were registered in the name of the company at December 31, 2010. 60 “Actions EDF” employee investment fund (“fonds commun de placement d’entreprise” (FCPE)). 61 Not including participation in Energie MULTI. Page 81 sur 137 Purpose of the repurchase program Number of shares held Book value of shares (€) Volume of shares (% of share capital) Liquidity contract 497,965 Share purchases for the “ACT 2007” plan after distribution of free shares 50,636 Acquisition of shares in the Energie MULTI fund 8,743 22,382 0.0005 2,958,013 0.0027 15,678,858 0.0269 At December 31, 2010, the market value of the portfolio based on the closing rate at the same date (€30.695) was 62 €16,839,308 . No shares were reallocated to other repurchase program purposes. 1.18.3 Allocation of net income The dividend distribution policy is defined by the Board of Directors, depending on the Company’s results and financial position and taking into consideration the dividend policies of major French and international companies in the same business sector. 62 Not including participation in Energie MULTI. Page 82 sur 137 The following dividends were paid for the previous three years: Year 2007 2008 2009 Number of shares 1,822,171,090 1,822,171,090 1,848,866,662 Dividend per share €1.28 €1.28 €1.15 Total dividends paid (after deduction of treasury shares) €2,330,266,755.20(1) €2,328,200,485.12(2) €2,111,146,365.85(3) (1) Interim dividend paid in 2007: €1,056,809,460.08 (2) Interim dividend paid in 2008: €1,164,067,897.60 (3) Interim dividend paid in 2009: €1,002,006,770.05 (including €937,815,444.36 paid in the form of new shares) 100% of the dividend is eligible for the special 40% tax allowance under paragraph 3-2 of article 158 of the French tax code. The Board of Directors decided at its meeting of November 30, 2010 that interim dividends of €0.57 per share would be paid from 2010 net income. The corresponding amount, totaling €1,053,582,029.82 (after deduction of treasury shares), was thus paid out on December 17, 2010. 1.18.4 Share price Movements in the EDF share price, which is part of the CAC 40 index, were as follows from its initial listing on November 21, 2005 up to January 31, 2011: EDF share price from the IPO to January 31, 2011 200,00% EDF 150,00% CAC 40 INDEX STXE 600 Util € Pr 100,00% 50,00% 32,2 +0,6% 324,65 -0,29% 0,00% -50,00% -100,00% (Source: Bloomberg) Page 83 sur 137 or shares acquired from the State in application of privatization laws.2%. except for restrictions resulting from the Company’s code of trading ethics. 2011 was €59.28 on July 5. 1. who have no voting rights To carry out its duties.18.18. apart from members representing the French government who are appointed by decree. 1983 on the democratization of the public sector. pursuant to article 24 of the Law of August 9. 1. In compliance with article 6 of the Law of July 26. A director’s term of office lasts five years.18. EDF’s share capital consisted of registered or bearer shares which must at all times be held at least 70% by the French State. there is no statutory restriction on the exercise of voting rights by shareholders.7 Corporate governance Corporate governance is described in detail in the 2010 Report by the Chairman of the Board of Directors on corporate governance. 2010). are subject to the unavailability or non-transfer rules resulting from the special provisions applicable to such operations.20 (€41. governing such affairs through its deliberations. and at the date of this document. It defines all the major strategic. financial and technological orientations concerning the company.56 at January 1. .5 Scope of consolidation shareholding thresholds and Each share entitles the holder to one vote.7. 1.14 on January 8. Its lowest closing price during the period was €30. Board meetings are also attended by the head of the French State’s Economic and Financial Verification Mission for EDF and the Works Council secretary. and also examines any other matters related to the Company’s operation. At January 31. Shares held through investment funds under the EDF group’s corporate savings plan invested in EDF shares. 2004. and the highest closing price was €42. the EDF share price at close of business was €32. 2010 to January 31. 2010.1 Board of Directors The Board of Directors determines the orientation of the company’s activities and oversees their implementation.6%. the EDF share price decreased by -22.53 billion. 2011. 2010. EDF’s market capitalization at January 31. 1. the Board of Directors has eighteen members: one third of members are elected by employees and two thirds are appointed by the shareholders after nomination by the Board of Directors. to the company’s knowledge no shareholder agreement concerning EDF shares had been concluded. and their sale or transfer is not restricted by any statutory provision. there is no restriction approved by a member of the Board of Directors concerning transfer of his shares within a certain time period. economic. To the best of the company’s knowledge.5%. These shares are freely negotiable subject to the laws and regulations in force and the statements below.From January 1. internal control and risk management procedures. the Board of Directors has set up five committees of selected members: Page 84 sur 137 A list of all consolidated companies is included in the notes to the 2010 consolidated financial statements. and the CAC 40 declined by -0. At the date of this document.6 Capital structure and voting rights At the date of this document.18. 2011. the Euro Stoxx Utility index declined by -5. as recommended by the French market regulator AMF in its “Final report on the audit committee” of July 22. particularly the strategic development plan. the medium-term plan and budget. Since 2010. the public service agreement. At a joint meeting held on January 14. Prior to examination by the Board of Directors. The Ethics Committee This committee ensures that ethical considerations are taken into account in the work of the Board of Directors and the management of EDF. and external or internal growth or divestment projects requiring Board approval. risk monitoring. the Audit Committee examines and issues an opinion on the Company’s financial position. Page 85 sur 137 . 2010. the industrial and commercial policy. alliances and partnerships. internal audit and control. The Nuclear Commitment Monitoring Committee This committee monitors changes in nuclear provisions and issues an opinion on questions of governance of dedicated assets. 2010.The Audit Committee This committee executes the missions assigned to it by the ordinance 2008-1278 of December 8. the Hydropower safety Inspector and the General Inspector for governance in the regulated sector. and the reports of the Mediator. the financial report prepared by the Finance Division (EDF’s corporate and consolidated financial statements and the Group’s management report). the report by the Ethics advisor. the appointment of Statutory Auditors. association of assets and liabilities and strategic allocation. 63 At its meeting of October 26. It can draw on the work of the Nuclear Commitment Financial Expertise Committee.823-19 of the Commercial Code requires at least one member of the committee to have specific skills in finance or accounting and meet independence criteria defined and disclosed by the Board of Directors. 2006 on statutory audits of annual accounts into French law. their independence and their fees. Article L. 2008 which transposed the eighth EU directive of May 17. The Strategy Committee This committee issues an opinion to the Board of Directors on the Company’s major strategic orientations. It examines the annual report. and the financial aspects of any particularly significant external growth or disposal plans. The Board of Directors decided at its meeting of January 21. the Chairman has invited directors who are not members of this committee to attend Strategy Committee meetings. It ensures that EDF’s dedicated asset management complies with the policy for developing and managing those assets. strategic agreements. The Ethics Committee also oversees an annual evaluation of the Board of Directors. 2011 the Ethics Committee and the Appointments and Remuneration Committee examined the situation of Mr Mariani with regard to the criteria of independence and specific finance or accounting skills. 2011 that Mr Mariani’s situation met these requirements. the insurance policy. the General Inspector for nuclear safety and radiation protection. which consists of six63 independent experts responsible for advising the Company and its governance bodies on the subject. excluding the financial statements (management report and sustainable development report). the research and development policy. the Board of Directors designated the 6 members of the CEFEN for a new three-year period. and other associated components of pay. Fomento di Construcciones y contratas and the European Foundation for the Energies of Tomorrow Member of the Atomic Energy Committee. Dassault Aviation. which discusses and sets the salary. 1946 Page 86 sur 137 . This committee examines the remuneration of the Chief Officers when necessary. It ensures that succession tables exist for posts on the Executive Committee.6% on average in 2010. indexation). This opinion is sent to the Minister of Finance and Minister of Energy for approval and is also presented to the Board of Directors. 2010): • Directors appointed by the General Shareholders’ Meeting: Henri Proglio Date of birth: June 29. and the Committees held a total of 23 preparatory meetings. objectives and other remuneration for the Chief Officers. 2010 in all companies are given below (at December 31. calculation method. 1949 Chairman and CEO of EDF since November 2009 Chairman of the Board of Directors of EDF Energy Holdings and Transalpina di Energia President of the Fondation EDF Diversiterre and Electra Director of Edison and EDF International Chairman of the Board of Directors of Veolia Propreté and Veolia Transport Director of Veolia Environnement Member of the Supervisory Board of Veolia Eau Director of CNP Assurances. the High Committee for transparency and information on nuclear safety and the National Committee for Business Sectors of vital importance Director of EDF since September 2004 Philippe Crouzet Date of birth: October 18. The Appointments and Remuneration Committee also sends the Board of Directors its opinion on the terms of remuneration for key management personnel (fixed and variable portions. concerning the basic and performance-related salary (including the objective criteria and assessment of the CEO’s results in the light of the objectives set). and issues an opinion on the proposed remuneration submitted by the Chairman and CEO: basic and performance-related salary (including the objective criteria and assessment of each Chief Officer’s results in the light of the objectives set). and the amount and distribution of directors’ fees.The Appointments and Remuneration Committee This committee submits proposals to the Board for appointment of directors by the shareholders and sends the Minister of Finance and Minister of Energy an opinion on the remuneration of the Chairman and CEO for approval. The attendance rate at meetings of the Board of Directors was 86. and other associated components of pay. During 2010 the Board of Directors met 12 times. 1956 General Manager of Assistance Publique – Hôpitaux de Paris Director of Essilor Director of EDF since November 2009 Michael Jay Date of birth: June 19. This opinion is also sent to the Board of Directors for deliberation and determination of the remuneration level. 1956 Chairman of the Supervisory Board of Vallourec Director of EDF since November 2009 Mireille Faugère Date of birth: August 12. Natixis. Details of each Director’s roles and the functions occupied at December 31. Transport and Housing. Agence nationale des titres sécurisés. Finance and Industry Member of the Supervisory Board of Areva Director of Fonds Stratégique d’Investissement. 1948 Equity investments Commissioner at the French Ministry of the Economy. Audiovisuel extérieur de France. 1956 Chairman and CEO of Lafarge Chairman of the French association Entreprises pour l’Environnement (EPE) Advisor to the Mayor of Chongqing (China) Director of EDF since May 2008 Pierre Mariani Date of birth: April 6. Finance and Industry and the Minister of Industry. appointed by decree Pierre-Marie Abadie Date of birth: July 13. defence and development policy Director of Associated British Foods. Public Accounts. 1956 Delegate director and Chairman of the Management Committee of Dexia Member of the Boards of Directors of Dexia Banque Belgique.Crossbench member of the House of Lords. 1952 French Ambassador Secretary General of the Ministry of Foreign and European Affairs Member of the Supervisory Board of Areva Member of the Atomic Energy Committee and the High Council of the Institut du monde arabe Director of Ecole Nationale d’Administration. Civil Service and State reform Director of Air France-KLM and SNCF Director of EDF since April 2006 Pierre Sellal Date of birth: February 13. the Minister of the Economy. Candover Investments. Sustainable development. Air France-KLM and SNCF Director of EDF since September 29. Dexia Crédit Local and Dexia Banque Internationale in Luxembourg Director of EDF since November 2009 • Directors representing the French government. Crédit Agricole SA and Valeo SA Chairman of Merlin (International medical NGO) Honorary Fellow of Magdalen College. 1960 Director of the National Budget for the Ministry of the Budget. 1969 Director of Energy at the General division for energy and climate for the French Minister of Ecology. 1948 Chairman of the government space policy agency Centre National d’Etudes Spatiales (CNES) Member of the Academy of Technologies Chairman of the Board of Directors of Troyes University of Technology Permanent representative of the CNES on the Board of Arianespace SA and Arianespace Participation Director of Thalès Director of EDF since November 2004 Philippe Josse Date of birth: September 23. France Telecom. Energy and the Digital Economy Government representative at the Agence Nationale pour la gestion des déchets radioactifs (ANDRA) Member of the Governing Board of the International Energy Agency (IAE) Director of EDF since August 2007 Jean-Dominique Comolli Date of birth: April 25. CulturesFrance. Chairman of the House of Lords Appointments Commission and member of its EU Sub-Committee on foreign. Commission de Page 87 sur 137 . 2010 Yannick d’Escatha Date of birth: March 18. Oxford University Director of EDF since November 2009 Bruno Lafont Date of birth: June 8. sponsored by the CGT union • Director whose term of office ended during 2010: Bruno Bézard Director of EDF from August 2002 to September 2010. 1961 Chairman and CEO of the Environment and demand-side management agency Agence de l’environnement et de la maîtrise de l’énergie (ADEME) Director of CEMAGREF Director of EDF since November 2009 • Directors elected by the employees: Christine Chabauty Date of birth: July 19. replaced by JeanDominique Comolli on September 29. 1971 Commercial attachée for Major Accounts at EDF’s Sales Division Member of an industrial tribunal Director of EDF since November2009. 1971 Director of Studies for EDF's Head of Strategy Director of EDF since September 2004. 1959 Purchase policy coordinator at the Finance and Industrial relations mission. sponsored by the CFDT union Jean-Paul Rignac Date of birth: May 13. 1957 Internal auditor at the General Technical Department of EDF’s hydropower generation and engineering division Director of EDF since September 2004. sponsored by the CFE-CGC union Philippe Maïssa Date of birth: November 21. 1949 Engineer at EDF’s Thermal engineering center Director of EDF since November 2009.récolement des dépôts d’œuvres d’art and the Etablissement de préparation et de réponse aux urgences sanitaires Director of EDF since April 2009 Philippe Van de Maele Date of birth: December 29. Tricastin nuclear electricity generation plant Director of EDF since December 2006. 1962 Research engineer at EDF’s Research and Development division Director of EDF since November 2007. sponsored by the CGT union Philippe Pesteil Date of birth: September 1. sponsored by the CGT union Alexandre Grillat Date of birth: December 8. 2010 Page 88 sur 137 . sponsored by the CGT union Maxime Villota Date of birth: November 25. 101.604.820 1. and no performance share became available.1.000 néant n/a 4. He has no employment contract with the Company. (2) Directors’ fees for 2009 (until appointment of Henri Proglio as Chairman and CEO on November 25. No stock subscription or purchase options were awarded to the Chairman and CEO in 2010. Page 89 sur 137 . Summary of compensation.18. Similarly.2. Chairman and CEO Fixed salary Variable salary Exceptional salary Directors’ fees (1) Benefits in kind TOTAL 1. Henri Proglio benefits from no special pension scheme from EDF.604.370 52.820 Details of components of remuneration The Chairman of the Board of Directors is not paid directors' fees. and no options were exercised by him during the year. no performance shares were attributed to the Chairman and CEO in 2010. The following table summarizes the remuneration due to the Chairman and CEO for 2010 and paid to him during the year: Summary of compensation of the Chairman and Chief Executive Officer 2010 Due for 2010 (en euros) Paid during 2010 Henri Proglio.820 1.000(2) 5.000.18.7. stock options and shares attributed to the Chairman and chief executive officer 2010 Henri Proglio.168.187 1. and received no starting bonus or termination indemnity for leaving his functions in the Company.1 Remuneration of the Chairman and Chief Executive Officer The table below summarizes the compensation and various benefits payable to the Chairman and Chief Executive Officer for 2010.604.000 600. Chairman and CEO Compensation owed for the year Value of options attributed during the year Value of performance shares attributed during the year TOTAL (en euros) 1.307 néant 10.820 n/a n/a 1.7.864 (1) Company car and benefits in kind in the form of energy. 2009) paid in 2010.2 Chairman and CEO and directors’ compensation The tables below show the compensation and various benefits paid and payable during 2010 to the Group’s directors and the chairman and CEO by EDF and its controlled companies at December 31. 1. 000 15.2.18.750 42.000 18.000 The decrease in Directors’ fees between 2009 and 2010 results from the higher number of meetings held by the Board in the second half of 2008 (12 compared to the usual average of 5 or 6) in connection with the acquisitions of British Energy and nuclear assets of Constellation Energy Group. Dangeard (4) Daniel Foundoulis (4) Pierre Gadonneix Claude Moreau (4) TOTAL (in euros) (1) For the second half of 2009 and the first half of 2010 (2) For the second half of 2008 and the first half of 2009 (3) Until his appointment as Chairman of the Board (4) Until their term of office expired on November 22.250 34. Directors’ fees are allocated according to attendance at Board and Board’s Committees meetings. and directors representing the government and employee representative directors also receive no fees for their services as directors.000 66.250 13.000 20. The Board of Directors submits the amount of directors’ fees to the General Shareholders’ Meeting for approval. 2009 2010 (1) 2009 (2) 16.000 11.000 26.000 35.2 Remuneration of Board Members In compliance with the law.000 17.750 223.750 147. Summary of directors’ fees paid to directors Board members Philippe Crouzet Mireille Faugère Michael Jay Bruno Lafont Pierre Mariani Henri Proglio (3) Frank E.1.7.000 10. Page 90 sur 137 . the Chairman of the Board of Directors receives no director’s fees.250 44. it is not entitled to increase shareholder commitments. only an extraordinary general shareholders’ meeting has the power to change the bylaws.4 Rules applicable to changes of bylaws Under the French commercial code and article 20-4 of the bylaws. represented or voting by correspondence own at least one quarter on the first call.1. are sent to the Board of Directors at the same time as the management report.18. Internal control The Chairman’s 2010 report issued in application of article L.FCPE) 51 135 200 106 307 100 150 1 504 25 Messrs Abadie.7. Josse. Maïssa.225-37 of the Commercial Code.FCPE) Michael Jay (shares held directly) Bruno Lafont (shares held directly) Pierre Mariani (shares held directly) Philippe Pesteil (shares held through an employee investment fund . and the Statutory Auditors’ report. Subject to the same requirement. 1. and at least one fifth on the second call.FCPE) Maxime Villota (shares held through an employee investment fund . Page 91 sur 137 .3 EDF share ownership by Directors The following directors owned shares in EDF at December 31. decisions at the extraordinary meeting require a two thirds majority of shareholders present. of shares carrying voting rights. Sellal and Van de Maele hold no shares in EDF at December 31.7. the meeting can only validly take decisions if the shareholders present. However. the second meeting may be postponed to a date no later than two months after the date the meeting was initially called for. 2010.18. profits or issue premiums. 2010: Number of EDF shares Henri Proglio (shares held directly) Christine Chabauty (shares held through an employee investment fund . Subject to the laws applicable to capital increases by capitalization of reserves. D’Escatha. represented or voting by correspondence. Rignac. Comolli.FCPE) Philippe Crouzet (shares held directly) Mireille Faugère (shares held directly) Alexandre Grillat (shares held through an employee investment fund . except for operations resulting from reverse share splits carried out under the proper procedures. If this quorum is not met. 2010 In millions of euros Sales excluding taxes Operating profit Profit before exceptional items and tax Net exceptional profit (loss) Net income 2010 40. 2003 which had declared that EDF’s non-payment in 1997 of income taxes on the utilized portion of provisions for renewal of French national grid facilities recorded under “grantor’s rights” should be classified as state aid. Page 92 sur 137 . particularly affected by extension of the TaRTAM transition tariff system to 2010 and 2011.693 1.492 2009 38.1.898 254 1. Corporate financial statements at December 31.A. whereas in 2009 EDF reversed amounts from impairment on equity investments and foreign exchange losses on the pound sterling.580 1.18. The net financial income was down by €1.8. Another factor was the European Court ruling of December 15.874 million: in 2010.906 3.994 987 4. impairment was booked in respect of equity investments.8 EDF S.926 3.895 3. in exchange for shares in the company for a value of €481 million. This led EDF to record €191 million of financial income (corresponding to reimbursement of the interest paid for the period 1997-2004) and €507 million of tax income (corresponding to the principal) in 2009.1 Net income The 2010 income statement is marked by growth of over 5% in sales and a decrease of close to 6% in operating profit. and ordered its recovery by the French State. The €733 million decline in exceptional profit in 2010 largely results from the transfer to Alpiq of drawing rights on the Emosson hydropower plant in 2009.18. 2009 canceling the European Commission’s decision of December 16. 8.58 (2) 4.638 5.57 60. distribution activities were transferred to a subsidiary (2) Including the interim dividend paid out 1. Page 93 sur 137 .171.3 Payments to Suppliers Since December 1.377 2.164 33.71 1.822.531 402 4.917 58.113 924 2009 924 2008 911 2007 (1) 911 2006 911 - 1.18.8. employee profit sharing.265 2.822.025 59.940 1.891 10.328(2) 1.178 1.176 6.662 1.23 2.090 1.55 (2) 2. depreciation and provisions Income taxes Employee profit share for the year Earnings after taxes.48 1.003 3.090 1.1.111(2) 1.492 38.380 3.99 3.125 schemes. but before depreciation and provisions Earnings after taxes.906 profit 4. employee profit sharing. etc) (M€) (1) In 2007. depreciation and provisions Earnings distributed Interim dividend distributed Earnings per share (€/share) Earnings after taxes and employee profit sharing.848.131 3.18.48 1.75 2.64 (2) 2.778 2.32 1.580 2.171.15 0.856 4.269 1.837 3.30 0.934 2.895 4.30 0.420 Amounts paid for employee benefits and similar (social security.81 0.866.054 40. the Company has applied the French law of modernization of the economy and settles supplier invoices within 60 days of the invoice date.002 39.278 2. 2008.842 (346) 867 2.171.057 32.906 660 1. employee sharing.848.822.055 2. company benefit 2.28 0.28 0.16 59.866.090 2.662 1.330(2) 1.737 96.838 835 4.2 Five-year summary of EDF results (EDF SA summary corporate financial statements): 2010 Capital at year-end Capital (M€) Capital contributions (M€) Number of ordinary shares in existence Number of priority dividend shares (with no voting rights) in existence Maximum number of future shares to be created By conversion of bonds By exercise of subscription rights Operations and results of the year (M€) Sales excluding taxes Earnings before taxes. depreciation and provisions Dividend per share Interim dividend per share Personnel Average number of employees over the year Total payroll expense for the year (M€) 1. 2 Implementation of social and environmental commitments The Group has a sustainable development department whose task is to stimulate. in 2008 the Group continued dialogue with panels of independent Page 94 sur 137 64 A program for action for the 21st century developed at the 1992 Earth Summit and adopted by countries that signed the Rio de Janeiro declaration of June 1992. The Group also has an environmental management system (EMS) that is used in all entities. Centrally. Exchange and genuine dialogue with all stakeholders in its business are a key aspect of the sustainable development policy for the Group as a whole and each individual company. which the Group joined in 2001.1 Framework for EDF’s sustainable development policy The EDF group’s environmental and social policy draws on the principles stated in its “Agenda 21” 64 and the United Nations Global Compact65. The Group has formally defined its action in a sustainable development policy that addresses the relevant key issues. support and report on action by the operational divisions of EDF and Group companies to honor their sustainable development commitments.2 Social and environmental information 2. promote and implement ten universal principles on human rights.com. 2. environmental protection and anticorruption.1 Social and environmental policy 2. guided by EDF’s ethical approach. This is reflected in an environmental policy focusing on climate change prevention and protection of biodiversity.1.edf. while respecting the independence of each component of the group. Major investment projects in the Group undergo a sustainable development assessment before being examined by the COMEX’s Commitments committee. Their task is to supervise implementation of Group policy and seek coherence in the actions taken. The Group’s sustainable development policy is also being developed through more specific commitments such as the Public Service Agreement signed with the French government. coordinate. this is achieved through consultation bodies local to generation facilities and industrial establishments (such as the Liaison and information committees at the nuclear power plants) and partnerships with nongovernmental organizations. local responsibility and contributions to energy-related education. . 65 An international initiative by the SecretaryGeneral of the United Nations. The heads of sustainable development in the principal Group companies meet in a Sustainable Development Committee formed in late 2008.1. a social policy promoting access to energy. The EDF Group’s Agenda 21 is available from its website: www. For EDF. working standards. asking member companies to adopt. The indicators used are based on the criteria defined in the Global Reporting Initiative66.edf. 66 An association for the development of reporting standards. 68 An intermediate level of certification expressing a conclusion as to the absence of significant error on a selection of indicators. The sustainable development information published by the Group is based on valuations by ratings agencies or non-financial analyst departments acting on investors’ behalf. providing critical appraisal of the implementation of its sustainable development commitments. Since 2005.advisors who have relevant experience and specialist knowledge of a field related to key issues for the Group or representative of the expectations and interests of society in general. Page 95 sur 137 . EDF has been included in the ASPI index. At our request.com. for 2010 the statutory auditors have issued a review report equivalent to a “moderate assurance”68 opinion for the Group. an “ethical” index comprising 120 firms assessed on the basis of their sustainable development performance by the French CSR rating agency Vigeo. the NRE67 law and the Global Compact commitments. Sustainable development is also a commitment of transparency to stakeholders. The Group is progressively rolling out a process to have the quality of these non-financial indicators verified by the Statutory Auditors. The Sustainable Development (SD) Panel is chaired by a non-Group member and plays a consultative role for the Group's orientations. and indicators are reported to the Board of Directors via the annual report and sustainable development report available online at www. 67 French law on new economic regulation. The EMS was simplified in 2006 in order to organize the initiatives. development of sustainable agriculture. risk prevention and health protection. approximately forty will concern the fields of energy. published in the OJEU69. 2010 on the national commitments for the environment. objectives and indicators according to the commitments in the Group’s environmental policy.1 Changes in regulations Following the European Commission’s presentation of its “Climate Package” on January 23. . As the ministry’s press release stated.decision 406/2009/EC on the effort of Member States to reduce their greenhouse gas emissions. In line with the objective to extend and reinforce the measures introduced by the IPPC directive of 1999. principally comprise: . 2. The law nonetheless requires enactment of more than two hundred implementation decrees. 69 published in France’s Official Gazette (Journal Officiel) of August 5. covers a range of medium to long-term general environmental commitments and objectives (such as reducing greenhouse gases and improving energy efficiency). energy efficiency. energy control. introduction of governance appropriate to this ecological evolution in our society and our economy”. led by a Supervisory Board and groups focusing on specific Page 96 sur 137 Official Journal of the European Union. . and construction).directive 2009/28/EC on promotion of the use of energy from renewable sources.directive 2009/31/EC on the geological storage of carbon dioxide. These orientations and objectives have been put into action through French law 2010-788 of July 12. a 20% increase in energy efficiency. this law “introduces six major areas of work: the battle against global warming (in the construction industry. In France. These laws. This directive lays down stricter emission standards for NOx.2. known as Grenelle 2. many of which are likely to concern EDF business (in particular. transport. old combustion facilities. initially awarded in 2002 and renewed in 2008 for a three-year period. SO2 and particulates that will apply from 2016. protection of biodoversity. which sets out the legal framework for this activity.2. the law on implementation of decisions resulting from the Environment Round Table process known as Grenelle 1. several laws were enacted in 2009 to achieve the three ambitious targets set by the European Union for 2020: a 20% reduction in greenhouse gas emissions. 2009. etc). . the Council adopted the new industrial emissions directive (IED) on November 8.2 Environmental system management The Group’s entities use an environmental management system (EMS) with ISO 14001 certification.2.2 Environmental information 2. 2008. . Exemptions will apply for a limited period of time (from 2016 to 2023) for large. town planning.directive 2009/29/EC amending the greenhouse gas emission allowance trading scheme. 2010. application of sustainable waste management. and a 20% proportion of renewable energies in energy consumption. Each Group company now has its own specific strategy adapted from the Group strategy. 2.themes. making them actors in the system (smart meters.4 Contributing to the battle against climate change Thanks to the high proportion of nuclear and low-carbon renewable energy plants in its generation fleet (including hydropower). 2. EDF’s R&D is panning for the Group’s future and also helps to address to environmental issues: . defines criteria for achievement of ethical. keeping the specific emission rate for 2010 to under 40g CO2/kWh. were rolled out in 2010.2.4. contributing to industrial emergence of renewable energies (solar power. the Group’s strategy also involves helping customers to reduce their own CO2 emissions by creating and promoting ecoefficient packages and advice on rational energy use. signed in July 2008. This new laboratory puts EDF at the forefront of knowledge of new solutions. environmental and social objectives. and an employee motivation program to encourage personal commitment to the fight against climate change. etc). by optimizing the operating lifetimes of nuclear and hydropower plants.). etc. which began operation in 2010. . For example. The Group’s commitment in its sustainable development policy to remain the lowest carbon emitter of all Europe’s large energy operators is achievable through optimized operation of existing generation facilities and large-scale renewal of the fleet. .2. incorporating renewable energies into homes. compared to the average of around 330 CO2/kWh for Page 97 sur 137 .1 Reducing CO2 emissions by industrial facilities. EDF SA’s 2008-2011 profit sharing agreement. Meanwhile. A new laboratory named Bestlab. developing efficient.consolidating and developing a carbonfree energy mix. It subscribes to the EU objective of a minimum 20% reduction in emissions between 1990 and 2020. can carry out natural-climate performance assessments of new building components with innovative integration of high thermal insulation. contributing to electricity network safety and developing research in three fields: increasing transmission line transit capacities. Half of the Group’s contribution to profit sharing for EDF employees depends on the degree of achievement of EMS targets. low-carbon energy uses (such as heat pumps) and examining the industrial feasibility of carbon capture and storage. recovery of free energies. optimizing the fleet of distribution assets and managing the shift towards “more intelligent” networks. particularly in generation 95% of EDF’s electricity generation in France produces no CO2 emissions. A plan to reduce emissions from EDF’s buildings and vehicle fleets. geothermal energy. sustaining the Group's nuclear advantage and helping to make France independent of fossil fuels for its energy needs.3 Environmental research Through its medium and long-term preparatory action.adapting the electricity system to new issues. 2. taking into account the diversity of local energy situations.2. by integrating new technologies for better customer service. the new construction industry rules on heat performance of buildings are ambitious and require a new stage in electricity instruments and solutions. as appropriate to its business and the energy environment in which it operates. the EDF group firmly intends to remain the leading energy operator in the combat against climate change and reduction of greenhouse gas emissions.controlling energy demand. ventilation. and energy production. to 4.In the longer term. These developments concern generation facilities both centralized (for example. It increased its generation capacities by 273 MW over the year. by industrial control of mature techniques. either independently or in conjunction with partners. At December 31. With installed capacity of 4. and research programs to facilitate integration of renewable energies into the distribution and transmission network.9g CO2/kWh in 2010 (EDF estimates. factoring carbon costs into ranking of generation facilities. As part of its business in development and sale of structured assets. optimization of the generation fleet by improving operating performance. October 2009). In France. The EDF group’s worldwide specific emission rate was 108. technological innovation for newly-emerging techniques such as marine energies (with the PaimpolBréhat hydropower fleet). including 500 MWp of solar PV power. its main growth area. contributed to electricity generation using photovoltaic energy. adapting the generation fleet: renewing plants.000 MW by 2012 for all types of power.7MWp for the turnkey B2B model and 2. Page 98 sur 137 . . and Mexico (+30 MW).In the short term. developing renewable energies and downgrading the highest-pollution facilities.923 MW gross by December 31. the Nam Theun 2 hydropower plant in Laos) and decentralized (assisting customers in on-site energy generation). EDF Energies Nouvelles commissioned 477 MW of new generation capacities.9MWp for the external investor B2B model. EDF Énergies Nouvelles Réparties (EDF ENR).512 MW gross (3. EDF Energies Nouvelles is in line with its objectives. In 2010. 71 Net of capacity sales. Greece (+64 MW). 70 The 15-member European Union in 2007 (International Energy Agency. The Group is continuing to develop activities in centralized generation. EDF Energies Nouvelles finalized the sale of the Canton du Quesnoy plant (10 MW) in France. profitable development of its involvement in renewable energies in Europe and worldwide. Newly-commissioned facilities71 were mainly located in Italy (+74 MW). a subsidiary of EDF (50%) and EDF Énergies Nouvelles (50%). leasing to a total of 2. EDF has several ways to reduce its greenhouse gas emissions: . Installed capacities in 2010 were 10. an increase of over 16% compared to 2009. One of the Group’s strategic objectives is sustainable.neighboring European countries70. the United Kingdom (+50 MW). EDF Energies Nouvelles had 918 MW under construction (564 MW net) and a portfolio of windpower projects totaling 13. by fitting customers with solar PV generators. In 2010. 2010.784 MW. including emissions related to heat generation). its subsidiary EDF Énergies Nouvelles expects to increase capacities in renewable energies. Turkey (+34 MW).335 MW) in operation or under construction throughout the world. Developments in windpower EDF Energies Nouvelles continued development in 2010 in windpower. France (+21 MW). and sale of the Linden (50 MW) and Nobles (201 MW) facilities in the US. 2010. protecting hydropower potential. Finally.p. or partly carbon-offset offers. use of renewable energies in buildings. Other developments In Italy. Canada (+35 MW). making a commitment to expand generation from renewable energies in Italy (400 MW in total: 31 MW in small hydropower. Edison signed a Pact for the Environment with the national Ministry for the Environment and Land and Sea Protection. the fourthlargest Dutch electricity operator. and incentives for restraint in energy consumption. Facilities came on line in Italy (+72 MWp).development and intensive integration of new distributed energies into buildings for heat generation (heat pump.A.2 Promoting eco-efficiency and effective use of electricity to Group customers The solutions developed and marketed by EDF incorporate energy efficiency. the app provides an estimation of the appliance’s energy consumption Page 99 sur 137 . its second priority development area. 2010 was a major event. In hydropower. Spain (+29 MWp) and Greece (+6 MWp). the “energy label” app which helps customers to choose low-energy household appliances and lamps appropriate to their energy consumption. .“green” energy options offered to customers. 356 MW in windpower and 22 MW in solar power). They are organized around: . In France for example. Fenice S. EDF is preparing for the arrival of the smart meter. woodburning stoves and fireplaces). a first unit at the Saint-Symphorien plant (12 MWp) and 16 MWp in large-scale rooftop projects (industrial and commercial buildings. 2010 the Group had a total of 163 MWp gross under construction.4. EDF Energies Nouvelles sold three units (32 MWp) of the Gabardan plant in south-west France. the commissioning of Nam Theun 2 for commercial operation in Laos on April 30. inaugurated the SLOE Centrale CCG plant (870 MW) in the Netherlands.management of the load curve to reduce or defer peakload CO2–producing consumption. in 2010 EDF and Delta. In biomass production. Based on the energy label attached to products on sale in retail outlets. . 2. reducing CO2 emissions compared to other plants (savings are estimated at between 7 and 30% depending on the plant).use of smart meters to optimize networks and carry out remote measurement services and actions that can reduce greenhouse gas emissions. In 2010. which is an essential factor in development of smart grids. November 2010 also saw the launch of the first energy operator’s i-phone offer. producing no CO2 emissions. installed solar power capacity amounted to 267 MWp gross.Developments power in photovoltaic solar EDF Energies Nouvelles continued development in photovoltaic solar power. France (+44 MWp).demand side management (DSM) services: insulation. solar waterheaters. . building renovation.2. The Group is experimenting with various services in Brittany (the voluntary ENBRIN program) and the “Linky” experimental zone in central France around Lyons. in Italy opened four new cogeneration plants. At December 31. hangars and warehouses). As part of its business in development and sale of structured assets. . a technical building management system for optimum supervision of installations.expressed in both euros and kWh. 23 projects won prizes: they concerned the themes of climate change. The new-look building will be a showcase for the Group’s expertise in energy efficiency. .4.4 Motivating employees in the fight against climate change The success of the Group’s internal sustainable development awards. through the DSM program with Group employees (such as the Action Planète awareness raising campaign).2. 2. 72 Haute Qualité Environnementale environmental quality. . . with high performances achieved through : . . access to energy and locallyfocused development. In 2010. which received 538 applications for the fourth annual round of prizes in 2010.3 Reducing diffuse CO2 emissions from EDF buildings and employee travel habits In addition to direct emissions by energy facilities. .enhancement of external facades using light-emitting diodes (LED). EDF is committed to reducing its diffuse emissions from office buildings.4. energy efficiency. 2. The targets for reduction of diffuse emissions by the service buildings owned and leased by the Group fall into the following areas : -DSM actions through adjustment of the way installations are operated. . This project aims to improve energy performances and obtain HQE72 certification. company vehicles and business-related travel. . .a double flow ventilation system.office lighting using standard lamps that detect human presence and automatically adjust light levels.rooftop solar power production covering approximately 100 m².application of energy performance contracts for all office locations under subcontracted management. One illustration is the renovation of a 1960 EDF building in the Part-Dieu business zone of Lyons. . which recovers heat from air extracted from the building and uses it to reheat new filtered air drawn from outside.2. – high Page 100 sur 137 .use of the best available technology. associated with a system of radiant ceiling heating in the offices. which will be completed in early 2011 after two years of work.optimization of surface occupation.renewal of owned buildings. . and the second (Wagram) is testing the English “Breeam In Use” scheme (BRE Environmental Assessment Method).heat insulation and external solar protection. and the CO2 emission rate. Company Commuter Plans have been introduced in most of France and will be rolled out progressively to all Group companies.heating and air conditioning by means of a ground water heat pump. shows the strength of EDF employees’ commitment to these themes. protection of biodiversity. the Group’s Real Estate division began a certification procedure through pilot operations for two buildings: the first (CAP Ampère) is testing the French NF Bâtiment tertiaire en exploitation Démarche HQE* certification. or outside the company.5. it is a chance to detect innovative practices that can be adopted and replicated in a “business” approach.5 Containing the environmental and public health impacts of activities and facilities. Nuclear energy is one response to the key energy issues of supply security. This strategy concerns current and future industrial plants. 2. including the impact on biodiversity As well as the concern for compliance with regulations. However. organized around the following aims: . the acceptability of nuclear energy varies across the countries where the Group’s entities.2.2.Adapting the installations where relevant to reduce their sensibility to extreme weather conditions. Employee motivation is fostered through a range of consciousness-raising campaigns with employees both at home and work. adopted by the Sustainable Development Committee in June 2010. 2. and is regularly monitored.Improving resistance to extreme changes and situations that are harder to predict.2. .Evaluating the impact of climate change (currently in operation and predicted) on installations and activities. because it can simultaneously meet energy needs and sustainable development concerns. the EDF group has a strategy for adaptation to climate change. from uranium extraction and mineral resource issues at the front end of the cycle to concerns over site decommissioning and waste management at the back end of the cycle.Taking future weather and climate into consideration in the design of new facilities. Plant safety during operation is the top priority for the EDF group. EDF’s environmental management system contains a commitment for constant improvement of practices and performances in public and environmental protection. For the Group. It is taken into consideration from the initial design stage.4. customer offers. Regular nuclear safety Page 101 sur 137 .1 Controlling nuclear power development and operation in France One of the key issues in the EDF group’s sustainable development policy is supporting the complementary balance between nuclear energy and renewable energy.5 Adapting the Group’s businesses to climate change As climate change also has direct impacts on the physical environment in which generation. to encourage more synergies between companies in the Group. and R&D themes.This internal competition gives Group employees an opportunity to bring attention to initiatives and projects developed in the course of their work. production/consumption optimization. together with implementation of an employee motivation policy and large-scale investment programs. EDF must be prepared to stand alongside the relevant authorities and answer questions raised on the nuclear component of the energy mix. . subsidiaries and investments are to be found. It must also be well aware of all aspects and impacts of nuclear energy. and on energy demand. distribution and transmission are carried out. with incorporation of sustainable development concerns into profit share incentives. This means that in addition to its operator’s strict responsibilities and duty to deliver top-quality management. 2. . climate change and control of energy costs. Environmental measurements taken by the operator are monitored to confirm that running the installations has no impact. sorting by nature. and the average number of unclassified events (level 0) was 10. The action taken in plant design and operation has brought radioactive gas and liquid discharge to a very low “minimum” level.1 Radioactive effluents Management of gas and liquid radioactive discharges by the nuclear plants is governed by strict regulations and EDF’s ambition to limit the environmental and health impacts of its installations. Events are classified on a scale of 1 to 7. plant performance depends not only on the efficiency of effluent processing systems.inspections are carried out both by external and internal bodies. There was no serious event or above-limit discharge in 2010. EDF reduced its liquid emissions (excluding tritium and carbon-14) by a factor of 25.2.1. 2. 1. with 7 being the most serious (the INES International Nuclear Event Scale). but also on operating practices. Chemical waste campaigns are designed to improve control of effluents. isolation from humans and the environment. and the data are published and regularly updated by ANDRA. 90% of which is shortlife waste. stable conditioning. Incidents of no consequence for nuclear safety are classified as “discrepancies” or level 0 events. following the classification used by the French national agency ANDRA74.45 in 2010. similar to the efforts deployed for radioactive effluents. Waste is listed in an inventory stating its location. In terms of radioactive emissions. Biocides are used to control the spread of micro-organisms in the water contained in these circuits. Limited quantities of radioactive waste are produced: 1 MWh of nuclear electricity (equivalent to a month’s consumption for 2 households) generates some 11g of radioactive waste. In 2010. reaffirmed in the Group’s environmental policy. These controls are supplemented by sampling and measurements carried out by external laboratories and universities through radioecological and hydrobiological campaigns.93 per reactor in 2009 to 10. The results for 2010 continue the trends of 2009.140 tonnes of spent nuclear fuel were removed from EDF’s generation sites. Page 102 sur 137 . Safety results over the last five years are stable overall. while already operating well below the regulatory limits. 2. liquid emissions were halved between 2002 and 73 2008.5.1. EDF applies a strategy of gradually increasing the performance of nuclear fuel.2 per reactor.2.4 per reactor. with a slight fall in the number of significant safety events. The average number of level 1 events in 2010 was 1. Four industrial principles govern management of this waste: limiting quantities.5. From 1990 to 2002. Agence nationale pour la gestion des déchets radioactifs. The objective is to raise nuclear energy output by increasing the combustion rate 74 Autorité de Sûreté Nucléaire. Subsequently. which confirm the lack of impact in the long term. External inspections of the safety of nuclear facilities in France are carried out by the French Nuclear Safety Authority73. Special attention is paid to water cooling circuits due to the volumes of discharge involved. from 10.2 Nuclear waste Radioactive waste is classified by activity level and lifetime. optimization of combustion. from total fuel consumption of approximately 1. provisions for decommissioning and last cores amounted to €19.200 tonnes each year.and optimizing operating cycles to improve nuclear plant availability. 2. nitrogen oxide (NOx). and provisions for the back-end nuclear cycle totaled €18. atmospheric emissions have fallen considerably. and provide the means to respond rapidly to fluctuations in demand and unforeseen peaks in consumption throughout the year and in cold spells. These energies nonetheless remain important. All the measures introduced (installation of flue gas denitrification systems.020 million. implementing best in class technologies for energy efficiency. leads to an overall reduction in use of fossil-based energies (coal. In 2010. etc.2.050 tonnes of spent fuel is processed. the cost of managing long-life waste and the cost of plant decommissioning and current waste conditioning. The renovation and adaptation programs for existing fleets are continuing with additional investments. The environmental performances of fossilfired plants have been constantly improved in response to the stricter requirements introduced in successive revisions of the applicable regulations. reinforced dust capture equipment.2 Controlling fossil-fired power development and operation The growing proportion of renewable energies in the mix of energy generated in all countries. They also refer to the regulations on greenhouse gases. 2016. EDF’s current strategy for the nuclear fuel cycle.e. Fossil-fired plants still have an essential role to play in the real-time balance between electricity generation and electricity consumption.5. Further plant modernization and use of better-quality fuel (oil with very very low sulfur content and solid residues) are contributing to the ongoing reduction in emissions. including in France where nuclear energy and hydropower are predominant. 2008 and January 1. in line with the two deadlines for application of the LCP directive set at January 1. Since the DeNox75 plants were commissioned in 2007 and 2008. The price per KWh thus includes all expenses related to this obligation. Investment programs incorporate the requirements for improvement of air quality and reduction of atmospheric emissions. and the use of traditional fossil-fired power plants. Other important events were: 75 A system to reduce nitrogen oxide.) have significantly reduced specific emissions and the overall level of sulfur dioxide (SO2). and the inclusion of nuclear energy where acceptable. Italy and the United Kingdom). approximately 1. and dust produced for the same electricity output quantity. i. is to process and recycle spent fuel and recycle the plutonium separated in this process in the form of MOX fuel. Page 103 sur 137 . To ensure that future generations will not have to bear the cost of managing spent fuel and decommissioning nuclear plants. changes of fuel.684 million. EDF sets aside provisions and is progressively building up dedicated assets to cover these provisions. In 2009. taking into consideration security of supply and the cost of fossil fuels. combustion and decontamination techniques (CCG plants in France. the operating licenses for all fossil-fired plants were renewed in compliance with the EU’s IPPC Directive. With current recycling capacities. in agreement with the French state. while allowing for shutdown schedules in line with seasonal variance in demand. oil and natural gas). 3 Controlling hydropower development and operation The EDF group has for many years attached great importance to strengthening its role in water management. which are used as an additive in concrete and cement for road surface products or filling. Finally. such as the gypsum produced by flue desulfurization. 2. EDF addresses these question for all Group real estate assets in four stages: identification of real estate sites completed for EDF. NOx. and in the partnership with the World Water Council on the theme of “water and energy” planned for 2012/2013. and lastly rehabilitation where relevant in compliance with the future use and regulatory requirements. in the WBCSD’s76 Water working group (EDF joined the Water Leader Group in 2010). EDF is increasingly active on the international scene. identification of sites potentially affected by pollution. which is used in plaster manufacturing. EDF carried out 14 full technical dam inspections.5. in its commitment to the 6th World Water Forum that will be held in Marseille in 2012.4 Control of other impacts Ground contamination The Group’s industrial activities can cause ground pollution. for plant safety a full check-up of each of the 150 large dams is carried out every ten years. other uses of water and respect of the environment. Under the Group’s sustainable development policy. EDF has also entered into partnerships with industrial entities that reuse its waste. de la Recherche et de l’Environnement . These operations are carried out under strict control by State departments (DRIRE77 and STEEG78. analysis of soil samples from the potentially polluted sites. developing its knowledge of ecosystems and the way they function. beginning with the sensitive areas which are placed under supervision to control sources of pollution and develop a management plan. Council for Sustainable Direction Régionale de l’Industrie. currently oil-fired and due to switch to gas in spring 2011. EDF estimates that these measures have cut NOx emissions in its fossil-fired fleet by some 30%-35% since 2007. 78 Service Technique de l’Énergie Électrique et des Grands Barrages. particularly through coordinated management using catchment feeding (i..commissioning of the two combustion turbines at Montereau.e. volumes of SOx. to be equipped with low-NOx burners and run on oil with a very low sulfur content and scheduled to come on line by the end of 2011. attached to the French Ministry of Economy.2. and dusts produced by this fleet will be at least halved between 2005 and 2020. and reducing the impact of its industrial plants on the environment with continuity in the ecological and sedimentary environment. together with a drain-down or a structural inspection using underwater equipment.the start of a project to transform the oilfired units at Porcheville 3 and Cordemais 3. . Page 104 sur 137 .2. 2. Finance and Industry.5. des Finances et de l’Industrie: the technical service for electric power and large dams. or the ashes produced by coal combustion.the regional industry and environment department. In 2010. 77 World Business Development. 76 The tenders for renewal of hydropower concessions in France have led operators including EDF to define operating methods that offer further improvements in the balance between energy generation. coordinated management of hydropower plants along the same waterway). au sein du Ministère de l’Économie. 5. Given the pace of change in regulations. together with a national plan for decontamination and the gradual elimination of these substances. For 2009 and 2010. polluted to the extent of more than 500 ppm/PCB. some monitoring bulletins for dangerous waste have yet to be returned for equipment on Reunion Island and Guadeloupe that was eliminated in early December 2010. and installation of artificial rivers connecting the areas upstream and downstream of obstacles. 2010.2. all polluted equipment with over 500 ppm/PCB was eliminated under the PCB program for treatment of polluted materials by December 31. which are principally found in certain electricity transformers and condensers.6 Contributing to biodoversity protection Ever since its first generation facilities began operation.425 transformers remained at industrial sites authorized to process them. and were due to be eliminated in the first few weeks of 2011.2. At that date EDF had only one askarel transformer still in operation. and a shared biodiversity management approach was introduced through a ISO 4001 management system. each Group company identifies potential events with environmental impact. and the necessary information is supplied to the administrative authorities and the media. 2. However. 2. 1996 requires an inventory of equipment containing PCBs and PCTs79.Askarel transformers European directive 96/59/EC of September 16. Intervention processes are regularly reviewed and improved as relevant. the actual recycling rate for all 79 non-nuclear waste produced by generation and engineering work in mainland France (excluding fly ash and gypsum. more than 65. several actions have been taken across all EDF group entities in favor of unspoilt areas and wild species. 1. EDF can thus boast exemplary results for treatment of PCB-contaminated equipment. a methodology was developed to determine the biodiversity profile of each Group company.6% and 79. 2010.6% respectively. which are fully recycled) was 73. Decontamination of equipment containing these substances was to be completed by December 31. With the launch by the Group’s Sustainable Development Committee in 2009 of a Biodiversity working party.5 Controlling emergencies and environmental crises To control the risks of industrial accidents with consequences for the natural environment and/or public health.775 items eliminated since 2005. In all. and scheduled for withdrawal in early 2011. with particular investment in research and design for fishways. with more than 1. Page 105 sur 137 Polychlorinated biphenyls (PCBs) polychlorinated terphenyls (PCTs). Emergencies are handled through a centrally-organized procedure involving Group Management. At ERDF. Non-nuclear waste EDF prepares an annual review of management of non-nuclear waste produced by generation and research activities in the previous year.5. and .000 items were withdrawn from the network and treated. manages the emergencies that may result and carries out the corresponding crisis drill exercises. EDF has been committed to developing knowledge of their impacts and introduction of evasive or compensatory measures such as restoration of major migration channels for fish. which benefit the entire ecosystem. The elimination plan for Group companies enabled almost all of them to meet the deadline successfully. EDF is preparing a series of biodiversity guides. EDF communicates its commitment to biodiversity to the general public.To raise employee awareness. the charity EDF Diversiterre became a partner of the Tara Oceans expedition to advance understanding of marine ecosystems and biodiversity. the Coastal Protection Agency (Conservatoire du Littoral). A “Hydropower biodiversity” guide was published in 2010 and is to be reprinted soon. and discover more about the oceans’ key roles in carbon lock-in and climate change mechanisms. EDF also works in collaboration with NGOs. In 2009. universities and research laboratories such as the Nicolas Hulot Foundation for Man and Nature (Fondation Nicolas Hulot pour la Nature et l’Homme). school groups and local government representatives though projects such as its involvement in the 2009 and 2010 editions of the French festival Fête de la nature. Page 106 sur 137 . the Bird Protection League (Ligue pour la Protection des Oiseaux) and the French Committee of the International Union for Conservation of Nature. A series of other guides (7 in all) is under development and should be published in 2011. French Nature Reserves (Réserves Naturelles de France). .2 Implementation of the Corporate Social Responsibility Agreement EDF’s CSR agreement signed in 2005 was renewed in January 2009 for a 4-year period.1 Background and objectives In 2010. This new agreement strengthens the Group's commitments. defining three major priorities for the coming years shared by all of the Group’s businesses and companies: To develop skills and stimulate social mobility. and reaffirmed its RH strategy. quality of life in the workplace and constant concern for health and safety drivers of a shared commitment to sustainable performance. These priorities lie at the heart of the social dialogue that continued in 2010.1. qualification. In 2010. particularly at management and expert level. and in full knowledge of the risks inherent to the activities exercised. and biodiversity. rather than merely signing short-term or one-off contracts. when 19 agreements were signed at various levels (operational departments in France. - vulnerable customers and information sharing and social dialogue. advance planning and social support for industrial restructuring.2.3.3. for example: . with the participation of signatories and representatives of EDF’s various businesses.3. It is one expression of the Group’s CSR agreement. antidiscrimination. subsidiaries and the Group). highlighting the intent to maintain industrial and service collaboration in the long term. Several types of action have been implemented across all those businesses. Page 107 sur 137 . 2. subcontractor relations.improving the reception and working conditions for subcontractors on the nuclear and fossil-fired generation sites.1 Corporate social responsibility 2. in liaison with the management. EDF clearly expressed its human resources ambition with a dual social/economic aim.3. The agreement signed at EDF in 2006 was judged to have been beneficial by the Group’s co-signatories.1.3 Social responsibility policy towards suppliers and subcontractors Outsourcing is part of the commitment to permanent progress and social dialogue.1.To introduce greater diversity and strengthen the Group’s shared culture. especially regarding subcontracting. the battle against climate change. This approach enables service providers to reinforce their activities and extend their capacity for sustainable expansion. The monitoring committee for this agreement was set up in 2007 and meets three times a year. working and health and safety conditions. to examine progress on the action taken under the agreement. . 2.To make recognition of each individual’s importance. and has been renewed indefinitely. For subcontractors and their employees this agreement is a guarantee that their work for EDF will take place in optimum employment.3 Company information 2. the Worldwide dialogue committee examined six themes in greater depth: career paths. This charter sets forth reciprocal commitments including: conduction of “sustainable development/corporate social responsibility” audits at the premises of suppliers and service providers to ensure these commitments are respected. EDF spent more than 8. RTE). . Recruitment.000 permanent internal trainers (1% of the Group’s workforce in France). . .3. EDF must rise to the challenge of skill renewal.concerted action with outsourcers in the nuclear business. engineering and distribution. equivalent to 60 hours per year per employee. mobility and training are essential drivers for optimizing skill management. 83% of employees received training in 2010. innovative training. Its businesses are evolving along with technological.. EDF. This Group policy for France will be extended gradually to other countries. 2010 has also helped to restimulate the Group’s training policy in France (EDF. This agreement is designed to foster social mobility (training leading to promotion.integration of social responsibility criteria in forming the panel of suppliers and collecting feedback after completion of services. In 2010. particularly the relaunch of nuclear operations. This proportion rises to almost half in the maintenance and operative workforce for generation. and environmental stakes in the energy sector.3% of its total payroll on training.awarding “socially responsible” labels for service providers in customer relations centers.a sustainable development between EDF and its suppliers. Human resource and skills requirements have also intensified with the resumption of industrial investments and expansion in nuclear engineering activities. with nearly 1. . social and corporate criteria are also incorporated into purchasing strategies (assessment of supplier skills and feedback).inclusion of modules concerning socially responsible subcontracting in training for purchasers. ERDF. advisors and actors in the purchasing process. EDF uses a network of some thirty training centers in France for this purpose. In the Page 108 sur 137 Environmental. The charter is integrated into the general terms and conditions and must be signed by all suppliers doing business with EDF. The Training Challenge agreement signed with all the unions on September 10.4 Jobs. preparing to replace the 25-30% of the workforce who could retire in France by 2015. economic.000 new employees in 2010. and the group’s ambitions for development in France and internationally. charter 2. and block release arrangements) and introduce “Academies” and “EDF Campuses” with a focus on effective. a program of 56 sustainable development audits was executed.1. starting from the initial preparation of specifications developed in close collaboration with the business activities using outsourcers. ERDF and RTE hired more than 5. skills and training EDF is facing new challenges today. based on the standards contained in SA 8000 and ISO 14001 concerning EDF suppliers established outside France. . to increase the sector’s attractiveness and develop appropriate training. the 4th “Energy Day” recruitment fair in November 2010. themed studies.700 block release trainees joined the Group in France in 2010 on post-secondary or postgraduate apprenticeship or training contracts. This initiative was awarded the diversity management trophy in 2010.the launch of the energy sector’s first serious game. EDF is continuing its policy of purchasing from the protected sector. with events to promote diversity and fight all kinds of discrimination. Energy TaskForce. EDF stepped up communication on its employer image to new graduates.5 Equal opportunities and diversity The EDF group believes that a company should reflect the society in which it operates. island energy systems). a “Diversity Day” has been held annually across the Group. Under the new three-year agreement signed by EDF on February 25. and these questions were covered in commitments made as early as 2006 and renewed in 2009. supply. generation. the company reaffirmed its commitment to hire at least 4% of disabled people.000 mentors provide guidance and support for these trainee employees as they acquire and develop their skills at EDF. 2008. ERDF and RTE).1. In 2010. more than 2. Meanwhile.current highly competitive labor market. EDF hired young people with no qualifications. 2009. The many actions undertaken include: . . EDF also runs a voluntary campaign to hire several dozen young disabled people on block release training every year (55 were recruited in 2010 at EDF.800 or 4.an anti-discriminatory practice policy which was reviewed with union organizations in 2009: it involves programs to raise awareness in managers.g.000 Group employees in 2010. and equality is a driver for the EDF’s economic performance.lifting of the age and nationality restrictions on employment with EDF in France. women and disabled people). EDF’s particular concern for inclusion of disabled employees goes back 20 years. by the decree of July 2. Article 5 of the Group’s CSR agreement addresses the prevention of discrimination. bringing the number of such employees in the Group to more than 4. the HALDE. HR directors and employees. 2. action plans for populations likely to be victims of discrimination (e. with actions such as: . Page 109 sur 137 . These initiatives reached 30. . . at engineering schools and universities in Europe (this is an adventure game for engineering students and recent graduates from six countries. with due respect for individuals and their fundamental rights. and a procedure for handling complaints made internally or to France’s equal opportunities and diversity body. 100 young employees were hired on block release training contracts in all Group sectors (transmission.elaboration of a handbook on the place of faith in the company. 42 at ERDF and 10 at RTE. Since 2008. testing of recruitment processes.000 students and recent graduates from engineering schools and universities the chance to find out about jobs and career opportunities in the EDF group. which gave more than 2. to promote the Group's business lines).5% of the Group’s workforce. to help managers and HR personnel handle requests in compliance with the law. More than 3. as set forth in the IEG statutes. Meanwhile. respect of diversity and promotion of equal opportunities.3. distribution. HALDE recommendations and the interests of the company. and in 2010 110 disabled employees were hired at EDF. Psychosocial risk prevention is covered by a collective agreement on “Preventing psychosocial risks and improving quality of life at work” at EDF SA. equal training opportunities. Page 110 sur 137 . €8 million of its employees and contractors are a key concern for the company. and over 50s account for 34% (32% in 2009). experts. France’s National observatory of quality of life in the workplace81. This led to negotiation of a collective agreement on social dialogue for health and safety at work.1% difference). doctors. road transport and falls from height). consideration of working hours and conditions. policy rollout campaigns have focused on extending the health and safety field to incorporate preventive health programs. pay equality for men and women was broadly achieved as regards principal salary and performancerelated salary (less than 0. set up in 2007. signed in November 2010. EDF is involved in a new movement for older employees: a senior action plan was presented to the Central Works Committee in December 2009 in compliance with French legislation (decrees of May 20. 2. equal career opportunities. Particular aims include changing current perceptions of work for older employees. In 2010. Changes in the work environment. facilitating older employees’ access to training and improving preparation for the transition between work and retirement. In a move to a new level. The number of employees aged 55 and over is on the rise: this age group currently represents 9% of the workforce (8% in 2009). is a 80 81 The Group also has proactive campaigns for equality in the workplace.making approximately purchases in 2010. A number of programs concerning ergonomics and psychosocial risks have been developed. which results from cross-disciplinary dialogue between the actors concerned (management. was reviewed and a new version signed in March 2009. encouraging career development throughout the employee’s working life using milestones in the second part of a career (mid-career interviews are being progressively introduced).6 Health and safety and quality of life in the workplace The EDF group operates in a hightechnology sector where workplace risks are also high. which was signed in November 2010. and action plans at RTE and ERDF. Observatoire national de la qualité de vie au travail. 2009). a review confirmed the value of the National Council for Health at Work80. a value it places at the core of organizations. EDF’s health and safety policy. initially drawn up in October 2003. and the work/life balance.3. set up experimentally in late 2008. promotion of a gender mix in the workplace and in recruitment. This agreement includes commitments on six themes: longterm change in mentalities. In addition to this attention to health.1. A year after its creation. and the health and safety of Conseil National de Santé au Travail. action has been taken to reinforce accident prevention through a focus on the core risks of the company’s business (risks related to electricity. The Group has made a commitment to helping employees aged 55 and over to stay in work and improve working conditions for older employees. employee representatives). and signed a second agreement for gender equality at work in December 2007. It is underpinned by respect for the individual. new forms of jobs and longer working lives have brought out new concerns requiring reorientation of the policy. In 2010. to serve the company's objectives and employee development. the average collective dose was 0.000 EDF employees and the 20. social partners and external experts and has held ten meetings since it was formed. Occupational radioprotection dosimetry and EDF is continuing its efforts to bring individual doses from exposure to radioactivity below the regulatory limit. commissions studies and issues recommendations. and since 2004 no person has exceeded 18 mSv. achieving a very significant reduction in the rate of industrial accidents causing sick leave. This system was designed and introduced in 2009 by company doctors on a voluntary basis. EDF is maintaining heightened vigilance in radioprotection.3. The 3rd “social agenda” signed for the period 2008-2010 by all the unions expired in July 2010. On the question of industrial accidents.08 mSv per reactor per year in 2000). no person has registered a dose higher than 20 mSv/ 12 months. the vigilance threshold set by EDF (compared to 10 individuals in 2009). Page 111 sur 137 . training. job content). EDF recorded only one significant radioprotection incident. The Observatory monitors working conditions. it recommended introducing an EVREST (Evolutions et Relations en Santé au Travail) system at EDF. once again no exposure above the legal annual whole-body limit of 20mSv was observed. managers. In 2010. Since 2001. The formation of the IEG (gas and electricity) sector in France in 2000.forum for dialogue between doctors. In a little over 10 years. employees of both EDF and outside companies working in the power plants.68 mansieverts (mSv) per reactor per year. Social dialogue has evolved noticeably. to give the company crossed indicators on health and work concerning employees’ working conditions (hours.1. the lowest ever for the nuclear fleet. enough for preliminary local studies.7 Social dialogue One of EDF’s priorities is to uphold its long tradition of social dialogue and consultation. the 2010 results place EDF among Europe’s safest electricity operators. In 2010. as the volume of exposed work in 2010 was lower than in 2009. both for personnel and for external contractors: the 23.150 questionnaires had been completed. the campaigns undertaken by EDF and its contractors have reduced collective dosimetry per reactor by 43% (1.000 employees of contractors who work in the nuclear zones. classified as level 2.8) for the eighth consecutive year. over a rolling 12month period three individuals registered a dose higher than 16 mSv. collective negotiation has become the major channel for social regulation in the company. placing EDF among the top-ranking operators worldwide for the same type of reactor. Close to fifty collective company agreements were signed under this agenda. and the social agendabased approach designed to structure dialogue every two years have been the main determinants of the change in social dialogue. The average annual collective dose of all workers. In 2010. physical exposure.69 mSv) and must be considered in context. when a worker was exposed during maintenance work. This is close to the 2009 result (0. 68 doctors had taken part and 1. In 2008. has been halved in less than 10 years. By the end of 2010. lifestyle and state of health. EDF has undertaken wide-scale prevention and training efforts for more than ten years. 2. Over ten years. workload. With a frequency rate of under 5 (3. . and the period of service required to qualify for early retirement in the “active work” category will also be increased progressively by two years. 2011. 2010 reforming general pension systems and the French public sector. This Group Committee met three times in 2010. applicable since January 1. financial and social strategies. The draft law transposes all parts of the standard reform to the IEG system.2 The EDF group’s social policy The EDF group’s social policy is an integral part of the Group’s sustainable development policy.8 Special pension system for the electricity and gas industries (IEG) in France The special IEG pension system was reformed in 2008 and 2010: the first reform was part of the reform for special pension systems. .the additional invalidity benefit (sectorspecific agreement of April 24.additional healthcare coverage (sectorspecific agreement of June 4. set up in 2001.the service pay-cheque (CESU) system applicable since February 2009. 2008 with all union organizations. is consulted on the Group’s major policies and is particularly informed of the Group’s economic. As in the public sector. the Group’s health and safety record and the consolidated financial statements. It is designed to create Page 112 sur 137 . 2. This new framework for dialogue covers all the EDF group’s 14 companies (including RTE and ERDF). the Committee worked on the disposal of the UK distribution networks. special early retirement arrangements based on the number of children will be phased out. 2008). and the second resulted from the law of November 9. 2011.3. IEG employees in Group companies in France have benefited from additional social protection concerning: . 2008 .The European Works Committee.3. This law does not apply directly to the special pension systems. 2008). from 2017. applicable since January 1. 2009. The CNIEG gas and electricity sector pension body issued an opinion on the proposed modification to the IEG pension system on January 6. these benefits are co-financed by the employer and compulsory contributions for employees. for which the regulations must be amended by decree. the NOME law on new organization of the electricity market. including for early retirement. providing a place for exchange of opinions on the Group’s strategy and prospects in France in economic. applicable since July 1. 2. the Group’s nuclear strategy. 2. This will only come into force in 2017 in view of the timetable for implementation of the 2008 reform.9 Additional employee protection Since 2008. In 2010.3. With the exception of the CESU. An agreement to form a Group Committee for France was signed on September 1. the maximum age will be progressively raised from 65 to 67.the additional pension scheme (introduced by the sector-specific agreement of February 21. The High Energy Council also issued an opinion on the plan to raise the age limit for IEG workers.1. 2010 for ERDF). particularly the progressive 2-year rise in the pension entitlement age. financial and social matters. 2010).1. . 2008). 2009 (October 1.welfare provision: life insurance and education allowance (under the sectorspecific agreement of November 27. plus company-specific measures. 2008 and a group agreement of December 12. . applicable since January 1. In cooperation with the ADEME (Environment and Energy Efficiency Agency). and contributing to integration of disadvantaged people in construction and environmental sectors. EDF was a partner in 126 mediation points across France. The three main strategies of the social policy are: . will have electricity by 2012. In France.000 homes in the next two years.to contribute to education on energyrelated questions. and facilitates recovery of energy debts. replicable concept: the Decentralised Service Company. EDF is developing electrification and working on network security. EDF has a range of measures to help people in this situation: • To facilitate access to energy. EDF is a partner in the Fondation Abbé Pierre’s “2. and the charity Fondation Abbé Pierre estimates that more than 3. The main features are as follows: EDF goes beyond its regulatory obligations in its action for vulnerable customers. South Africa). 8 million people live below the poverty threshold (INSEE 2007).4 million households do not have stable access to energy. • For 15 years now EDF has been contributing to energy access campaigns in developing countries (Morocco. • In the United Kingdom. • In France. EDF Energy estimates that this program will concern more than 100. whose territories are scattered widely across an inaccessible area without roads. EDF participates in mediation bodies providing information and assistance for prevention and resolution of difficulties encountered by local residents. particularly for “interior communities”. EDF has developed a viable. plus 50 contact points set up with the charity SOS Famille during 2010. industrial facilities or services. More than 10 noninterconnected sites. The principles of the policy comply with the UN Global Compact and are taken up in the corporate social responsibility (CSR) agreement. EDF Energy is participating financially for three years in the government’s “Community Energy Saving” plan (CESP) to improve home insulation in disadvantaged areas. 2. This action should help develop a model for general application.and enhance ties with all external stakeholders. . optimize and strengthen action with vulnerable customers and populations. This brings EDF closer Page 113 sur 137 .000 families” initiative which aims to finance the construction or upgrading of 2.000 to 5. especially housing projects.to forge long-term close links with the local communities where EDF operates by supporting local development projects.2. • In Guyana.1 Accessibility to energy energy eco-efficiency and to a section of its customer base. EDF supported and illustrated its social policy by releasing two booklets presenting more than 80 social measures for responsible contribution. Senegal. durable. 2010. providing access to energy eco-efficiency for the most disadvantaged families at a moderate cost. At December 31.to facilitate access for energy and energy eco-efficiency.000 roofs for 2. .000 low-rent homes. The next three paragraphs present some examples from the three areas of strategy in the policy. offers opportunities to advise customers on energy usage. home to 3. communications.3. Local diagnoses have been carried out with all stakeholders.000 people. and boost internal bonds within the Group. 3. prepaid meters. especially in customer relations centers.Financial support dedicated exclusively to investments that make services accessible to local populations. the EDF group is attentive to the economic and social issues of the areas where it operates. By the end of 2010. providing all-round support to help socially vulnerable people construct a career plan and find work. but also in its threeyear agreement for inclusion of disabled workers (in the section on the protected sector and organizations where the majority of the workforce is disabled – annual objective of €6 million of purchases) and in the socially responsible subcontracting agreement. run by local managers. Nam Theun 2 is more than simply a profitable industrial project: it is an exemplary sustainable development project. were in training programs. By the end of 2010. . and the developers’ special care to set it harmoniously in its natural environment. . An extensive health program has been set up to monitor the 6.1 million in 2010). the TIRU Group. EDF also has special programs to train young people. Construction sites bring benefits for the local area. and 1. that are financially profitable and have at least 10. . commissioning of the Nam Theun 2 dam in Laos on April 30. small business. micro-networks. set up Valespace. 2010 was a major event.000 customers in a defined area. Its “Trait d’Union” campaign set up by the Sales Division is active in helping young people to gain work and qualifications in customer service positions.Sale of diversified energy services for a fixed price or measured by meter: lighting. In France. EDF is increasing its purchases from schemes designed to help people back to work through economic activity (€2. • In Asia. In jobseeking support in France.000 people in difficulty an opportunity to gain experience and qualifications through block-release training in a business “with a future” by 2012. with its significant social and economic component. and fellow company Trialp.000 people who live alongside the reservoir. EDF promotes socially responsible purchasing through its sustainable development policy. 569 people including 200 young people in difficulty. particularly those finding it difficult to join block release schemes.2 Developing and preserving local relations with the areas where EDF is established In conducting its industrial and commercial activities and projects.Use of effective technologies appropriate to the local context: photovoltaic kits. 2. through the Trait d’Union and Tremplin campaigns (with an objective of 700 in 2012). 16 villages were created or moved to fill the reservoir. About 70 people are hired each year as sorting staff.2. these companies were providing energy services to more than 300.240 families have been rehoused in new homes built in a traditional style. electricity. an EDF subsidiary specializing in recycling of household waste as renewable energy. • As vectors for entry to the workplace. using new and renovated health centers offering services Page 114 sur 137 .000 people. etc. local authorities. EDF and ERDF aim to offer 1. in Chambéry.Locally-formed companies. with particular focus on helping the unemployed back to work.. etc for all types of customer: residential. etc. enhanced housing. and “agriculture and livestock” programs will help to gradually intensify farming activities that contribute to household income. two years early. 2005 in application of article 1 of the law of August 9. EDF employees.3. All young users of Energie Sphere can express their opinion and suggest subjects to be covered. • In the United Kingdom. in the general interest.3 Contributing to education on the key energy issues EDF is developing programs to educate people on the major energy issues such as energy control and respect of the environment. These programs are designed for a range of target audiences (schools. Page 115 sur 137 .jointhepod. Agriculture was practiced extensively in the area before the dam was built. EDF prepares an annual monitoring report on its commitments. 2000. 2004. The aim of raising the awareness of 2. The site contains recommendations for habits and action that will make for more efficient use of energy in everyday life. local authority employees. events and games to find out all about energy: how it is produced and its impact on the environment and climate change.000 children every year (one eighth of an age group). The Public Electricity Service is intended to guarantee electricity supply throughout all the national territory. articles. and sets out the terms of financial compensation for these public service commitments. The site has videos. The Public Service Agreement A Public Service Agreement between the French State and EDF was signed on October 24. It will remain in force as stipulated in its own provisions. This project is supported by the European Eco-schools program and the British NGO Eden Project.2. EDF Energy has created a web portal that contributes to children’s education on environmental issues (www. This agreement is the framework agreement for the Public Electricity Service missions conferred on EDF and its regulated subsidiaries in the open electricity market in France.5 million children by 2012 was achieved in 2010. 2. It ensures balanced development of electricity supply. The children visit a generation site and/or attend a lecture approved by the national education system. It is examined annually by the parties and a review is carried out every three years. 2. which reaches 100. etc).org). businesses. EDF is also contributing to a structured educational course on questions of energy and sustainable development. development and operation of public electricity transmission and distribution networks. until a new agreement is signed.3. • In France. EDF has set up the website Energie Sphere to inform young people and provide a discussion forum on the theme of energy. The agreement defines the respective commitments of EDF and the French state for the period 2005-2007.such as advice to local mayors on measures to prevent childhood malnutrition. and supply of electricity at the regulated tariffs.3 The Public Service in France Legal definition of Public Service in France The Public Electricity Service is defined in articles 1 and 2 of French law 2000-108 of February 10. including implementing the energy policy. Companies proportionally consolidated for accounting purposes are also proportionally consolidated for production of the social and environmental indicators. 2010. safety of third parties and protection of the environment: four areas where the identified expectations of customers and local authorities are particularly high. with the exception of RTE. and promotion of social cohesion. designed to develop access to a range of services for France’s rural populations.access to the public electricity service. environmentally-friendly electricity generation. the scope of consolidation for social data only includes companies with a significant workforce (more than 50 employees) acquired more than 6 months ago.4. distribution and transmission) that are significant in terms of environmental impact. signed a partnership agreement for more public service entitled + de services au public. Commitments of network operators The network operators ERDF and RTE have made commitments through the Public Service Agreement concerning management of public networks and the safety of the electricity system. its Page 116 sur 137 EDF’s Public Service commitments relate to: . quality of supply.4 Methodological information on the social and environmental indicators for 2010 2. 2010 were taken into account. which is accounted for under the equity method from December 31. Since EnBW was sold before the year-end. These commitments are financed by the TURPE network access tariff. Social and environmental indicators are consolidated under the rules for accounting consolidation. . In addition to these rules.1 Data consolidation The quantitative social and environmental data in this report was collected via the EDF group’s consolidation reporting software packages. Agreement on public services in rural areas On September 28. Companies accounted for under the equity method are not included in the preparation of social and environmental indicators. They mainly concern network safety. the criteria applied are based on subsidiaries’ industrial activities (generation.3.generation and supply. Only companies that have been included in the scope of consolidation for longer than one year and were still in the scope of consolidation at December 31. Companies fully consolidated for accounting purposes are also fully consolidated for production of the social and environmental indicators. 2010. supply of electricity to customers who have opted to stay with the regulated tariffs.3. and eight other major Public Service operators. and with reference to relevance criteria for human resources and environmental impact. the French government and EDF. . maintaining safe. For environmental information.Commitments of network operators) EDF (excluding 2. and contributing to the safety of the electricity system. Social indicators The social indicators are prepared for this report on the basis of a glossary of definitions drawn up in 2010. Data on the number of days’ leave for work-related accident at EDF SA is supplied by the HR information system after consistency checks based on the list of accidents recorded in the security information system. Group data: Changes in the consolidated group are not entirely reflected in arrivals and departures recorded by Group subsidiaries. Staff on long-term leave (> 90 days) are also excluded. and this is the main reason for the variance between the 2010 workforce as reported and as recalculated based on 2009 workforce and arrivals/departures. the reported hours worked include certain reasons for absence. The absenteeism rate is calculated based on the theoretical number of hours worked. 2010.data are excluded for the whole of the year 2010. The accounting data on provisions decommissioning and last cores. data for EnBW have also been excluded in 2009 in accordance with financial consolidation rules. Constellation Energy Nuclear Group and SLOE Centrale (environmental reporting only for SLOE Centrale). and may also include water Page 117 sur 137 . sea and ground water. EDF SA and ERDF: The EDF SA workforce reported includes employees who are co-employed by both EDF and GDF Suez. for for are the Indicators on cooling water include water drawn from and returned to rivers. Environmental indicators The environmental indicators are prepared for this report on the basis of a set of descriptions and methodologies that make up the EDF group reporting standards for 2010. An employee working 50% for EDF counts as 0. Based on the criteria defining the scopes of environmental and social reporting. EDF SA: Since 2007. a total of 3. including on the journey between home and work. such accidents may be taken into account when local legislation considers them as workrelated accidents. As in 2009. For EDF Energy. absences due to work-related accidents. but does not include fatal accidents for subcontractors.5 in the published workforce. the frequency of work-related accidents does not include accidents on the home-work journey. unexplained absences.164 persons at EDF SA and 1. In France. the 2010 workforce excludes company doctors and people employed under various social measures (apprentices. consolidated Group data taken from Group’s consolidated accounts. and the back-end nuclear cycle. Absences relative to company and union activities.e. All indicators on consumption and emissions relate to the electricity and heat generation process. the following companies are included in the 2010 reporting for the first time: ESTAG. etc). The number of fatal accidents includes work-related accidents and accidents on the home-work journey. and miscellaneous absences (unpaid leave. qualification contracts) i. Outside France. calculation of the absenteeism rate only includes the following categories of absence: absences for sickness. To facilitate comparability between 2009 and 2010.752 persons at ERDF at December 31. SPE. early retirement leave and maternal absences are not included. are based on the inventory of nuclear waste in the UK drawn up by the Nuclear Decommissioning Authority. For ERDF. steam generators). incineration and fusion). The “Low and medium level short-life solid radioactive waste produced by reactors in operation” indicator does not include waste resulting from occasional maintenance (vessel lids. broken posts.drawn from distribution networks and returned to waste water networks. including plant start-up and shutdown. The volume of waste resulting from reconditioning of waste produced and conditioned in previous years is not included. as it excludes some recycled PCBs not taken into account because of the current reporting arrangements.g.The tonnage of waste sent to the Centraco fusion unit. to arrive at the share of very low level radioactive waste sent ultimately to the appropriate storage center. CO2 and SO2 emissions by EDF’s fossilfired plants cover all phases of electricity generation. because the current reporting arrangements cannot provide satisfactory monitoring figures. The figure is an estimate of the annual volume of waste that will be Page 118 sur 137 . wooden posts are excluded from the reporting as ERDF does not monitor the number of wooden posts withdrawn and transferred. except for PCB waste which concerns the calendar year. the quantities of cooling water drawn/returned are calculated based on the operating time and nominal debit from pumps. long-life solid radioactive waste” indicator includes an uncertainty relating to the conditioning ratio (number of packages actually made after processing of one tonne of fuel). the 2010 reporting on waste concerns a rolling 12-month period. The “High and medium level. For nuclear plants located on the coast and fossil-fired plants. The volume of waste calculated corresponds to the volume of waste stored at the Aube center (after compacting. specific parts of posts). Except in unusual cases (e. Data for the “Medium level radioactive waste” reported by Existing Nuclear. calculated annually based on 3-year reports from the processing subsidiary Socodei. This indicator is an estimate based on ongoing application of current practices for conditioning long-life waste which projects the current conditioning into the near future. which can only be observed after the event as this ratio essentially depends on the blends used to optimize operations. weighted by an estimated ratio. CO2 and SO2 emissions by EDF’s power plants are measured or calculated based on fuel analysis or standard emission factors. . The indicator for “Very low level radioactive waste from decommissioning” comprises: . EDF SA's SF6 emissions are calculated based on the mass balance of SF6 bottles or a nominal annual leakage rate of 2% of the volume of SF6 contained in facilities. The quantity of nonnuclear waste recycled or in the process of being recycled by ERDF is underestimated. EDF Energy’s nuclear division. "Fresh water” indicators (including brackish water where relevant) have been added for 2010. Data on non-nuclear waste are taken from information available at the year-end concerning the quantities removed and the elimination channels.Actual tonnage of waste sent directly to the low level storage center. Concrete posts are also excluded. reduce or repair damage to the environment that has been or may be caused by the Group as a result of its business. provisions. Data reported by CENG are volumes of conditioned waste removed from site declared to the NRC.Reduction of noise emissions. All medium level radioactive waste is stored at the nuclear generation sites. These quantities are expressed in grammes of uranium. The definition of environmental protection expenses used by the Group is derived from the CNC recommendation of October 21.investment expenditure (including the related studies). . The “Nuclear fuel delivered” indicator reported by Constellation Energy Nuclear Group is the quantity of fuel delivered to generation sites. The “Solid low and medium level radioactive waste” of Constellation Energy Nuclear Group (CENG) covers radioactive waste that is not high level. 2003 (itself inspired by the European recommendation of May 30.amounts allocated to including discount expenses. to: . not including expenses covered by a provision. Environmental protection expenses are expenses declared by the various entities of EDF. additional expenses incurred to prevent. surface water and underground water. The amount of these expenses is assessed on their cost excluding taxes. and are reported by suppliers and declared to the NRC. Page 119 sur 137 .Anti-pollution measures for the ground.Plant decommissioning. The Nuclear Regulatory Commission (NRC) draws a distinction in the US between three types of solid low and medium level radioactive waste: types A. “Low level radioactive waste” includes desiccants sent for processing in the form of medium level radioactive waste. . for example.Protection of air and climate quality. B and C.Protection of biodiversity and the landscape. 2001). . .operating expenses (including studies that qualify as operating expenses). Environmental protection expenses are identifiable. awaiting a national decision on their final treatment. and includes the volume of conditioning required to transport the waste from the sites. . . They relate.considered and classified as medium level radioactive waste when the nuclear generation sites are shut down.Waste elimination and waste limitation efforts. . in compliance with applicable regulations. depending on the activity (A being the lowest-activity). allocated between three main categories: . (Distribution activities were transferred to the subsidiary ERDF in 2008) Scope 2: EDF group n.625 448 8.809 1.259 5.9 50.020 € thousand 8 18.900 17.716 1 2 2 2 2 2 1 2 2 2 2 2 1 2 2 2 2 2 EN 1 EN 1 EN 1 EN 1 EN 1 EN 1 109m3 109m3 53.141 20.950 306 9.282 25.: Not Applicable Page 120 sur 137 .300 1. € million 19.Performance indicators FINANCE Provisions for decommissioning and last cores Provisions for back-end nuclear fuel cycle Indemnities paid or payable following a court ruling in an environmental matter ENVIRONMENT FUELS AND RAW MATERIALS Total fuel consumption Nuclear reactor fuel Coal Heavy fuel oil Domestic fuel oil Natural gas Industrial gas Total consumption of raw materials from sources outside the company WATER Cooling water drawn Cooling water returned Unit 2010(1) 2009(1) 2008 Scope 2010 2009 2008 GRI Ref.9 53.3 50.248 1.: Not Communicated n.707 1.211 1.072 3.c.138 20.538 84.9 45.793 439 6.142 15.7 2 2 2 2 2 2 EN 8 EN 21 (1) Excluding EnBW GRI: Global Reporting Initiative GC: Global Compact Scope 1: EDF S.A.a.5 2 2 1 2 2 1 2 2 1 t kt kt kt 106m3 10 m 6 3 1.3 45.694 810 14.296 2.684 € million 18. 385 8. CO2 kt eq. pumping electricity Internal consumption.4 168. CO2 75.929 41.6 7.9 98.212 198.6 287.679 21.694 1 1 1 2 1 1 1 2 1 1 1 1 EN 22 EN 22 EN 22 EN 22 GWh 10.644 5.384 € million 650 2.3 72.3 NC NC 2 2 2 2 2 2 1 2 2 2 2 2 2 NC 2 2 2 2 1 NC NC EN16 EN20 EN20 EN20 EN16 EN16 EN16 t t t kt 40.4 6.4 3.A.5 284.7 187.6 8.a.: Not Applicable Page 121 sur 137 .3 1 1 1 1 1 1 EN 3 EN 3 1.6 6.c.5 23. (Distribution activities were transferred to the subsidiary ERDF in 2008) Scope 2: EDF group n.581.6 192. CO2 kt eq.2 7.333 34.818 68.691 2.496 1.785 16.8 22.581. Mt kt kt t kt eq.477 1.7 NC 91.422 138.5 198.319 82.412 6.228 3. GRI: Global Reporting Initiative GC: Global Compact Scope 1: EDF S.5 581.186 2 2 2 EN 6 TWh TWh 6.9 167.606 190.6 22.: Not Communicated n.Performance indicators ENVIRONMENT AIR Gas emissions Total CO2 emissions (including installations not subject to quotas) SO2 emissions NOx emissions Dust CH4 emissions N2O emissions SF6 emissions Non-nuclear waste Dangerous waste Non-dangerous waste Non-nculear industrial waste recycled or removed for use Ash produced (2) ENERGY Renewable energies : quantity of electricity and heat generated using renewable energy sources (other than hydro) Direct energy consumption by primary source Internal consumption.775 1 1 1 EN 30 Group-wide Environmental Management System (ISO 14001) 2 2 2 (1) Excluding EnBW (2) The unit is the kt for 2009 and the tonne for 2008.6 158.353 117. electricity MANAGEMENT Environmental protection expenses including provisions Environmental management (ISO 14001) Unit 2010(1) 2009(1) 2008 2010 Scope 2009 2008 GRI Ref. 7 0.102 11.4 0.17 0.: Not Applicable Page 122 sur 137 .c.58 0. TBq/unit GBq/unit NC NC 16.140 12.4 12.Nuclear indicators EDF SA Radioactive emissions to water (1) Tritium Carbon 14 Unit 2010 2009 2008 GRI Ref.A.0 EN 21 EN 21 Radioactive emissions to air (1) Carbon 14 Tritium TBq/unit TBq/ unit NC NC 0. GRI: Global Reporting Initiative GC: Global Compact Scope 1: EDF S.88 1. TBq/unit 102 122 NA EN 21 Radioactive emissions to air Carbon 14 Tritium Nuclear waste Uranium sent off site Low level radioactive waste sent off site Medium level radioactive waste generated TBq/unit TBq/unit 0.a.1 17.42 EN 20 EN 20 Nuclear waste Low and medium level short-life solid radioactive waste High and medium level long-life solid radioactive waste Transported spent nuclear fuel m3/TWh m3/TWh t 12.55 1.: Not Communicated n.c.179 EN 24 EN 24 EN 24 Nuclear indicators EDF Energy (Existing Nuclear division consolidated in 2009) Radioactive emissions to water Tritium Unit 2010 2009 2008 GRI Ref. (Distribution activities were transferred to the subsidiary ERDF in 2008) Scope 2: EDF group n.9 0.4 13.) for 2010.88 1.5 NA NA EN 20 EN 20 t m3 m3 131 498 162 147 607 170 NA NA NA EN 24 EN 24 EN 24 (1) Radioactive emissions to water and air concern the previous year (N-1) and are therefore reported for 2009 but not communicated (n.87 1.49 0.8 0.16 0. A.Nuclear indicators Constellation Energy Nuclear Group Radioactive emissions to water Tritium Unit 2010 2009 2008 GRI Ref.c.69 1.11 NA NA EN 21 Radioactive emissions to air Carbon 14 Tritium TBq/unit TBq/unit 0. (Distribution activities were transferred to the subsidiary ERDF in 2008) Scope 2: EDF group n. TBq/unit 11.: Not Applicable NA EN 24 NA EN 24 Page 123 sur 137 .: Not Communicated n.41 NA NA NA NA EN 20 EN 20 Fuel Nuclear fuel delivered t 34 NA Nuclear waste Low and medium level solid radioactive waste sent off site m3 735 NA GRI: Global Reporting Initiative GC: Global Compact Scope 1: EDF S.a. % no.762 38.401 28.190 “Other departures”.130 4. and in 2010 deconsolidation of the network business led to 5. no.953 21.994 122.Group performance indicators Unit SOCIAL WORKFORCE NUMBERS AND BREAKDOWN (AT DEC 31) (1) EDF + ERDF + RTE TOTAL EDF group Total executives (as defined by French regulations) Percentage of women executives Non-executives Gender equality : .102 22.Female executives no.Male workforce . no.1% 123.543 21.407 104.016 “Other new staff”.901 3. 17.913 2010* 2009* 2008 Scope 2010-2008 GRI Ref.306 8.305 33. 105.092 4. no.734 10. 39.929 1.457 11.415 1. 248 departures during the trial period were classified under “Resignations”.578 3.760 1.231 22.108 7.925 122. no.533 2.482 5. no.971 2 LA 1 no.842 105.083 2 2 2 2 2 2 LA 2 LA 2 LA 2 LA 2 LA 2 LA 2 (1) Workforce variations due to first consolidation or deconsolidation are included in “Other new staff” and “Other departures” respectively.924 10.804 12.151 26. (2) Departures during the trial period are included in “Other departures”. no.370 2 2 2 LA 1 LA 13 LA 13 2 2 2 2 LA 13 LA 13 LA 13 LA 13 HIRING / DEPARTURES Recruitments Other new staff (1) Retirements Resignations (2) Redundancies and dismissals Other departures (1) WORKING TIME Part-time employees no. no.006 37. GRI: Global Reporting Initiative * Excluding EnBW Page 124 sur 137 . EDF Energy’s consolidation of British Energy led to 6. In 2009.Male executives .280 2. 1 2 LA 1 LA 1 no.129 159.108 no.708 2. In 2008. 13.719 18.611 36. 121.393 158.833 30.436 7.2% 127.105 4.790 3.7% 119.Female workforce .929 160. no.009 37. no. Performance indicators HEALTH AND SAFETY Fatal accidents Injury frequency rate Industrial and work-home journey accidents (causing leave of one day or more) Unit 2010* 2009* 2008 Scope 20102008 GRI Ref. in 2009. excluding EDF Energy.5 13 6. 94% 127.2 2 2 LA 7 LA 7 no.104 1.504 2 LA 7 MANAGEMENT-EMPLOYEE RELATIONS Percentage of employees covered by collective bargaining agreements (3) TRAINING Number of employees benefiting from training (4) EMPLOYMENT AND INTEGRATION OF EMPLOYEES WITH DISABILITIES Number of employees with disabilities (5) (6) % no. (4) In 2010.5 12 4.217 95% 102. excluding ESTAG.364 2 LA 13 (3) Excluding Dalkia International. Dalkia International. EDF Trading (5) Excluding EDF Energy and EDF Trading.629 2 2 LA 4 LA 10 no. in 2008.078 2.145 1. no. 1.332 94% 99. 3. which was consolidated during 2009.854 3. excluding EDF Energy. (6) In 2010 and 2009 the figure collected by Edison does not include the subsidiary Abu Qir. Dalkia International. 15 4. GRI: Global Reporting Initiative * Excluding EnBW Page 125 sur 137 . 44. % no.971 LA 13 LA 13 LA 13 LA 13 no.* 61.642 (2010) ND (2009) 989 LA 1 no. no. no.Unit EDF SA performance indicators (excluding distribution) SOCIAL WORKFORCE NUMBERS AND BREAKDOWN (AT DEC 31) Total EDF staff covered by collective bargaining agreement (at Dec 31) Other permanent EDF staff not covered by collective bargaining agreement Other non-permanent EDF staff not covered by collective bargaining agreement Total EDF SA staff not covered by collective bargaining agreement Total EDF SA Total executives (as defined by French regulations) Percentage of women executives Non-executives Technicians and supervisory staff Operatives Gender equality . Thousands no.166 18.820 5.395 LA 1 LA 1 LA 1 (1) Not including arrivals and departures of seasonal staff on fixed-term contracts.519 327 744 2. no.449 31. no.Female workforce .781 5.608 7.593 9.Female executives HIRING/DEPARTURES Recruitments Integration & rehiring Other new staff (1) Retirements Resignations Redundancies and dismissals Deaths Other departures (1) OVERTIME Number of hours of overtime OUTSIDE CONTRACTORS Average number of temporary staff (2) WORKING TIME Full-time employees Part-time employees Employees on contracts allowing overtime no. no. no. no. no. 3.615 287 299 LA 1 LA 1 LA 1 LA 1 LA 1 LA 1 LA 13 LA 13 LA 13 LA 13 no. 586 no. no. 52. no. 2010 GRI Ref. no.035 18.180 88 10 86 1.629 no. no.201 24. no. no. no.Male workforce .752 24.508 LA 2 LA 2 LA 2 LA 2 LA 2 LA 2 LA 2 LA 2 2. (2) 2010 figure unavailable at the reporting date. no.1% 37.Male executives . Page 126 sur 137 . 62. no. 433 1.272 EC 1 EC 1 EC 1 EC 1 EC 1 19 99% 51.0% 0.558 111 LA 13 LA 13 186 (3) EDF staff are not covered by a collective bargaining agreement as defined by law.16 341 LA 7 LA 7 LA 7 LA 7 no.548 1. € € € € million € % % 2010 GRI Ref.885 HR 5 LA 4 LA 10 no.865 5. no. but are covered by the IEG (electricity and gas sector) statutes.8% LA 7 LA 7 no.204 2. 4.8 0. % no.Unit Performance indicators ABSENTEEISM Absenteeism Hours of maternity or paternity leave / total working time HEALTH AND SAFETY Fatal accidents Injury frequency rate Severity rate Industrial and work-home journey accidents (causing leave of 1 day or more) WAGES / SOCIAL SECURITY CONTRIBUTIONS / PROFIT SHARE Main salaries (average per month): Executives Technicians and supervisory staff Operatives Personnel expenses Average profit share per employee MANAGEMENT-EMPLOYEE RELATIONS Number of collective bargaining agreements signed (France) Percentage of employees covered by collective bargaining agreements (3) TRAINING Number of employees benefiting from training EMPLOYMENT AND INTEGRATION OF EMPLOYEES WITH DISABILITIES Number of employees with disabilities Number of employees with disabilities hired CHARITABLE WORKS Committee budgets (1% requirement) € million no. Page 127 sur 137 . 1.* 4. 6 3. 225-38 of the French commercial code The shareholders are required to examine the conclusions of the Statutory Auditors’ special report and to approve the agreements mentioned therein. Sixth and seventh and resolutions: Renewal of terms of office of Statutory Auditors It is proposed to the shareholders to renew the term of office of the current Statutory Auditors.1 Presentation of the resolutions proposed to the combined Ordinary and Extraordinary Shareholders’ Meeting of May 24. namely KPMG SA and Deloitte et Associés. for a period of six financial years. and will be paid on June 6. the update of the bylaws to reflect the latest legal and regulatory developments and additionally to amend the bylaws to provide for a bonus dividend payable to shareholders holding their shares in registered form for more than two years. 2011 In addition to the ordinary resolutions that are submitted to your approval. the renewal of the authorization for the Board of Directors to reduce the share capital by cancellation of treasury shares. 2011.661.57 per share paid out on December 17. The renewal of the Statutory Auditors has been subject to a request for proposals which results have been examined by the Audit Committee on January 24. Fifth resolution: Directors’ fees awarded to the Board of Directors This resolution proposes to set the total amount of the directors’ fees awarded to the members of the Board of Directors at €200. 2011 3. Eighth resolution: Appointment of a new substitute Statutory Auditor Page 128 sur 137 .196. or €0. the balance of the distributable dividend amounts to €1.15 per share. which expires at the Shareholders’ Meeting approving the 2016 financial statements.30.663. 2010 Both resolutions submit to your approval EDF’s corporate financial statements and the EDF Group’s consolidated financial statements. as approved by the Board of Directors at its meeting held on February 14. 2010 and distribution of dividends It is proposed to the shareholders to vote to pay a dividend amounting to €2. In view of the interim dividend of €0.072. Fourth resolution: Agreements governed by article L. Third resolution: Allocation of the net income for the financial year ended on December 31. 2010.96. or €1.3 Résolutions proposed to the combined Ordinary and Extraordinary Shareholders’ Meeting of May 24. Ordinary resolutions: First and second resolutions: Approval of the reports and the annual financial statements and consolidated financial statements for the financial year ended on December 31. on an extraordinary basis.58 per share. 2011. and to allocate the balance of the distributable profit to retained earnings.000 for the 2011 financial year and for future financial years until a further decision of the shareholders. 2011 and to a notice from the Audit Committee to the Board of Directors.126. we ask that you decide.342. The proposed increase in the amount of directors’ fees takes into account the number of Board of Directors and committees meetings contemplated to be held in 2011. at the end of the financial year. equal to 10% of the dividend per share. 19 and 20 of EDF’s bylaws to comply with the latest legal and regulatory developments. as approved by the Shareholders’ Meeting. The maximum purchase price is set at €90 per share. in accordance with the ceiling provided by law. The number of shares giving entitlement to such increases may not exceed 0. which expires at the Shareholders’ Meeting approving the 2016 financial statements. Extraordinary resolutions: Eleventh resolution: Authorization for the Board of Directors to reduce the share capital by cancellation of treasury shares It is proposed to the shareholders to renew the authorization granted by the combined Ordinary and Extraordinary Shareholders’ Meeting of May 18. Extraordinary and ordinary resolution: Sixteenth resolution: completion of formalities Powers for Page 129 sur 137 . The first bonus dividend shall not. has held registered shares for at least two years. 2010 and to thus authorize the Board of Directors to implement a new share repurchase program. Twelfth. with a cumulative maximum total purchase of 10% of the share capital over the period and a maximum holding at any time of 10% of the share capital. to receive a bonus dividend in respect of such registered shares. which expires at the Shareholders’ Meeting approving the 2016 financial statements. in accordance with applicable laws.5% of the share capital per shareholder as at the end of the relevant financial year. within the limit of 10% of the share capital. This decision would enable any shareholder who. thirteenth and fourteenth resolutions: Amendments to the bylaws It is proposed to the shareholders to decide to amend articles 10. to cancel all or part of the shares redeemed under the shares buyback plan and to reduce the share capital within the legal limit of 10% of the share capital per periods of 24 months. as necessary. The maximum amount of funds dedicated to these operations is €2 billion over the period. Fifteenth resolution: Amendments to the bylaws regarding bonus dividend It is proposed to the shareholders to decide to amend article 24 of EDF’s bylaws for the purpose of setting forth a bonus dividend provision (dividende majoré). Tenth resolution: Authorization for the Board of Directors to carry out transactions on the Company’s own shares It is proposed to the shareholders to renew the authorization granted by the combined Ordinary and Extraordinary Shareholders’ Meeting of May 18. 2010 and to allow the Board of Directors. as substitute Statutory Auditor. over a period of eighteen months. for a period of six financial years. be distributed before the end of the second financial year following the amendment of the bylaws. 2007 on the exercise of certain rights of shareholders in listed companies. Ninth resolution: Renewal of the term of office of a substitute Statutory Auditor It is proposed to the shareholders to renew the term of office of the substitute Statutory Auditor. namely BEAS. and in particular those resulting from the French implementation of the Directive of July 11. namely in 2014 for the dividend to be distributed in respect to the 2013 financial year. for a period of six financial years.It is proposed to the shareholders to appoint KPMG Audit IS. 2010. ORDINARY AND EXTRAORDINARY MEETING AGENDA: Powers for completion of formalities.04. approves the financial statements for the year ended on December 31. Allocation of the net income for the year ended on December 31. 2010) The Shareholders’ Meeting. and that the related tax amounts to €577.289. 2011 ORDINARY MEETING AGENDA: Approval of the reports and financial statements for the year ended on December 31. 2010 comprising the consolidated balance sheet. 2010. deliberating in compliance with the quorum and majority requirements for Ordinary Shareholders’ Meetings. deliberating in compliance with the quorum and majority requirements for Ordinary Shareholders’ Meetings. Appointment of a substitute Statutory Auditor.091. Page 130 sur 137 . It is emphasized that the overall sum of expenses and charges concerned by article 223 quater of the French tax code is €1. Renewal of the term of office of a Statutory Auditor. It sets the profit for the year at €1. 22538 of the French commercial code. after examination of the management report of the Board of Directors and the report of the Statutory Auditors on the consolidated financial statements. 2010 comprising the balance sheet. Amendment to article 19 of the bylaws. Renewal of the term of office of a Statutory Auditor. Approval of the reports and consolidated financial statements for the year ended on December 31. and the operations reflected in EXTRAORDINARY AGENDA: Authorization for the Board of Directors to reduce the capital by cancellation of treasury shares Amendment to article 10 of the bylaws. Amendment to article 24 of the bylaws. Authorization for the Board of Directors to carry out transactions on the Company’s own shares MEETING ORDINARY RESOLUTIONS FIRST RESOLUTION (Approval of the reports and financial statements for the year ended on December 31.678.351 for 2010. 2010 as reported in the financial statements. approves the consolidated financial statements for the year ended on December 31. as presented. income statement and appendix. SECOND RESOLUTION (Approval of the reports and consolidated financial statements for the year ended on December 31.856. Directors’ fees awarded to the Board of Directors.492.2 Draft resolutions to be submitted to the combined Ordinary and Extraordinary Shareholders’ Meeting of May 24. as presented. consolidated income statement and appendix. and the operations reflected in those financial statements and summarized in those reports. and distribution of dividends. Agreements governed by article L. Amendment to article 20 of the bylaws. 2010) The Shareholders’ Meeting. Renewal of the term of office of a substitute Statutory Auditor.3. after examination of the management report from the Board of Directors and the reports of the Statutory Auditors. based on the number of shares as of December 31. amounts to €6.845.15 Total dividends paid (after deduction of treasury shares) €2. in light of the number of shares held by the Company at the date of the distribution of the dividend. takes note of the conclusions of the report and approves the agreements mentioned therein.85 Portion eligible for the tax allowance(1) 100% 100% 100% 2007 2008 2009 1.521.663. FOURTH RESOLUTION (Agreements governed by article L. 2011 and the balance of the dividend to be distributed will be paid out on June 6.12 €2.822.54.126.30 given that any shares held by the Company at the date of distribution of the dividend will not confer rights to the dividend. amounts to a maximum of €2. consequently. the amount of the balance of distributable profits allocated to retained earnings. after examination of the special report of the Statutory Auditors on agreements governed by article L.754.090 1. Dividends distributed in the past three years were as follows: Year Number of shares Dividend per share €1.917.15 per share.266.50 and before deducting the interim dividend described below.661. or €0.330. 171. 365. taking into account the positive amount of retained earnings of €4. 755.58 per share. the total dividend is eligible for the special 40% tax allowance under article 158. The Shareholders’ Meeting gives all powers to the Board of Directors to determine.those financial statements and summarized in those reports. (iii) notes that. 3-2° of the French tax code. the balance of the dividend to be distributed for the 2010 financial year amounts to €1.146. as reported in the financial statements.342.28 €1. THIRD RESOLUTION (Allocation of the net income for the year ended on December 31. The ex-dividend date is June 1.57 per share was paid out on December 17. 22538 of the French commercial code) The Shareholders’ Meeting.328. it is possible to elect that the gross amount of the dividend be subject to a fixed levy in final discharge at the rate of 19%. 171.111. 866.662 (1) Special 40 % tax allowance under paragraph 3-2° of article 158 of the French tax code.090 1.822. Page 131 sur 137 .200. 2010. The total dividend (including the total amount of the interim dividend mentioned above).96.20 €2.28 €1. 2011. deliberating in compliance with the quorum and majority requirements for Ordinary Shareholders’ Meetings. after examination of the report of the Board of Directors and the report of the Statutory Auditors on the financial statements: (i) notes that the distributable profit. and distribution of dividends) The Shareholders’ Meeting.072. 2010.232. In the event the dividend is paid to individuals who have their tax domicile in France. (iv) decides to allocate the balance of the distributable profit to retained earnings.848. deliberating in compliance with the quorum and majority requirements for Ordinary Shareholders’ Meetings.196. 2010. 485. given that an interim dividend of €0. In addition. 225-38 of the French commercial code. under the conditions of article 117 quater of the French tax code. (ii) decides to set the dividend at €1.409. the total amount of the dividend and. until a further decision is made by the Shareholders’ Meeting. decides to renew the term of office of the Statutory Auditor. which expires at the Shareholder’s Meeting approving the financial statements of the financial year ending on December 31. 92939 Paris-La-Défense Cedex. 2016. TENTH RESOLUTION (Authorization granted to the Board of Directors to carry out transactions on the Company’s own shares) The Shareholders’ Meeting. KPMG SA. which registered office is located at Immeuble Le Palatin. NINTH RESOLUTION (Renewal of the term of office of a substitute Statutory Auditor) The Shareholders’ Meeting deliberating in compliance with the quorum and majority requirements for Ordinary Shareholders’ Meetings. France.000. as substitute Statutory Auditor. 3 cours du Triangle. which registered office is located at Immeuble Le Palatin. SEVENTH RESOLUTION (Renewal of the term of office of a Statutory Auditor) The Shareholders’ Meeting deliberating in compliance with the quorum and majority requirements for Ordinary Shareholders’ Meetings. member of the Compagnie régionale de Versailles. after examination of the report of the Board of Directors. for a period of 6 financial years. member of the Compagnie régionale de Versailles. which expires at the Shareholders’ Meeting approving the financial statements of the financial year ending on December 31. after examination of the report of the Board of Directors: Page 132 sur 137 . 92200 Neuilly-sur-Seine. for a period of 6 financial years. which registered office is located at 7-9. 92939 Paris-La-Défense Cedex. which expires at the Shareholders’ Meeting approving the financial statements of the financial year ending on December 31. decides to renew the term of office of the Statutory Auditor. 2016. decides to renew the term of office of the substitute Statutory Auditor. Deloitte et Associés. 2016. which expires at the Shareholders’ Meeting approving the financial statements of the financial year ending on December 31.FIFTH RESOLUTION (Directors’ fees awarded to the Board of Directors) The Shareholders’ Meeting. deliberating in compliance with the quorum and majority requirements for Ordinary Shareholders’ Meetings. Villa Houssay. 92200 Neuilly-sur-Seine. for a period of 6 financial years. decides to set the amount of directors’ fees awarded to the members of the Board of Directors for the current year and future years at €200. member of the Compagnie régionale de Versailles. deliberating in compliance with the quorum and majority requirements for Ordinary Shareholders’ Meetings. for a period of 6 financial years. decides to appoint KPMG Audit IS. BEAS. member of the Compagnie régionale de Versailles. EIGHTH RESOLUTION (Appointment of a substitute Statutory Auditor) The Shareholders’ Meeting deliberating in compliance with the quorum and majority requirements for Ordinary Shareholders’ Meetings. 3 cours du Triangle. which registered office is located at 185 avenue Charles-deGaulle. 2016. SIXTH RESOLUTION (Renewal of the term of office of a Statutory Auditor) The Shareholders’ Meeting deliberating in compliance with the quorum and majority requirements for Ordinary Shareholders’ Meetings. and carrying out all hedging operations for these operations. 2010 in the seventh resolution. The maximum amount of funds dedicated to execution of this share repurchase program shall be €2 billion. submission of a warrant or by any other means. - Page 133 sur 137 . conversion. the number of shares taken into account for calculating the 10% limit is the number of shares purchased net of the number of shares sold during the term of this authorization . The purchase price shall not exceed €90 per share. or any other operation affecting equity. reducing the Company’s capital by cancelling all or some of the shares purchased. terminates. attributing shares to members of EDF Group employees. subject to the approval by the Shareholders’ Meeting of the 11th resolution. and in the event of a share split or reverse share split. holding shares for future remittal in exchange or payment for any external growth or contribution operations. particularly on a market or over the counter. notably under any share purchase or free share allocation plan benefiting members or former members of personnel in the conditions set forth by the law. exchange. and the number of shares the Company holds directly or indirectly at any time must not exceed 10% of the shares making up the Company’s share capital. the unused portion of the authorization to purchase shares in the Company given by the Shareholders’ Meeting of May 18. 225-197-1 and following of the French commercial code or articles L. - - - - Acquisitions or transfers of these shares may be carried out by all means. however. use of derivative financial instruments or notes or securities giving access to the Company’s shares. the Board of Directors may adjust the maximum purchase price in the event of capitalization of premiums. particularly articles L. and carrying out all hedging operations for the obligations of EDF (or one of its subsidiaries) in respect of those marketable securities. it being specified that when shares are redeemed to ensure the liquidity of the EDF share under the conditions defined above. Purchases of shares in the Company may concern a number of shares such that: the number of shares the Company purchases during the period of a repurchase program must not exceed 10% of shares making up the share capital at the day of this Shareholders’ Meeting. with immediate effect. to reflect the effect of these operations on the share value. immediately or at a later date. reserves or profits resulting in either a rise in the nominal value of shares or in creation and attribution of free shares. 3332-18 and following of the French labor code (including any transfer of shares covered by these articles of the labor code). including via acquisition or transfer of blocks. authorizes the Board of Directors to purchase shares in the Company with a view to: remitting shares when rights are exercised attached to marketable securities giving access to the share capital by reimbursement. or by setting up options. ensuring the liquidity of EDF’s share by an investment service provider through a liquidity contract coherent with the code of ethics recognized by the French market authority. at such times that the Board of Directors or the person acting on its authority shall decide. complete all formalities. decides to amend paragraph 2 of article 10 (Sale and transfer of shares) of the bylaws of the Company as follows: “In addition to the legal obligation to inform the company of the holding of certain thresholds of the share capital or of the voting rights. amend the Company’s bylaws accordingly. The Shareholders’ Meeting grants all powers to the Board of Directors to implement this authorization. voting rights and securities giving access to the capital it holds. notify the Company. the total number of shares. and more generally to take all necessary action. and in general do everything that is necessary. TWELFTH RESOLUTION (Authorization for the Board of Directors to reduce the capital by cancellation of treasury shares) The Shareholders’ Meeting. by up to 10% of the existing capital in 24month periods. with immediate effect. Authorizes the Board of Directors to reduce the capital by cancellation of all or some of the shares purchased under the Company’s share repurchase program. the unused portion of the authorization given by the Extraordinary Shareholders’ Meeting of May 18. adjusted if necessary to take into account (Amendment to article 10 of the bylaws) The Shareholders’ Meeting. in accordance with article L. deliberating in compliance with the quorum and majority requirements for Extraordinary Shareholders’ Meetings after examination of the report of the Board of Directors. deliberating in compliance with the quorum and majority requirements for Extraordinary Shareholders’ Meetings. allocate or reallocate the shares acquired to the various objectives pursued. after examination of the report of the Board of Directors and the report of the Statutory Auditors. in order to place all orders in the stock exchange or off-market. 225-209 of the French commercial code: Terminates. who would come to directly or indirectly hold a number of shares corresponding to 0. acting alone or in concert. and may delegate its authority. EXTRAORDINARY RESOLUTIONS: ELEVENTH RESOLUTION operations affecting the share capital after the date of this meeting. Grants all powers to this end to the Board of Directors. This 10% limit applies to the amount of the Company’s capital.” Page 134 sur 137 . The Board of Directors must inform the Shareholders’ Meeting each year of the transactions undertaken in application of this resolution. 2010 in its 16th resolution. under the applicable legal and regulatory conditions.This authorization is granted for a maximum duration of 18 months from the date of this meeting. with the possibility of subdelegation as permitted by the law and regulations applicable. at the latest prior to the closing of the negotiations of the fourth trading day following the day of the threshold crossing. by registered letter with return receipt requested. Authorizes the Board of Directors to allocate the difference between the repurchase value and nominal value of cancelled shares to the available premiums and reserves. any individual or entity. to set the terms and conditions. The authorization given to the Board of Directors under this resolution is valid for a duration of 26 months as from the date of this meeting.5% of the share capital or of the voting rights of the company must. 2 and 3 of article 19 (Statutory Auditors) of the bylaws of the Company as follows: “The control of the company’s financial statements is carried out by two statutory auditors. Paragraph 2. failing which. Pursuant to article L. 823-17 of the French commercial code. for the calculation of the quorum and of the majority. 225-228 of the French commercial code. pursuant to article L. the shareholders who attend the meeting via such means in compliance with legal requirements. do not take part in the vote of the board of directors which proposes the appointment of the statutory auditors to the shareholders’ meeting. electronically as the case may be. 225-99 of the French commercial code. They are convened. FOURTEENTH RESOLUTION (Amendment to article 20 of the bylaws) The Shareholders’ Meeting. decides to amend paragraphs 1. They are held at the registered office or at any other location indicated in the notice of meeting. by the statutory auditors or any person duly authorized for such purpose. the deputy chief executive officer . The holders of shares duly registered on behalf of an intermediary under the conditions of article L. appointed by the shareholders’ meeting for a period of six financial years. 228-1 of the French commercial code may be represented under the conditions of the aforementioned article by a registered intermediary. which examine or decide on the annual or interim financial statements. subparagraph 4: “Any shareholder may grant powers to any individual or entity of its choice for the purpose of being represented to a shareholders’ meeting. In this case. the notices of meeting occur at least fifteen days before the date contemplated for the shareholders’ meeting and such period is reduced to ten days for shareholders’ meetings held upon second notice and for postponed shareholders’ meetings. subparagraphs 1 and 2: “The shareholders’ meetings are convened by the board of directors or. as the case may be. The proxy is revocable under the same form as that required for the appointment of a representative. The proxy as well as its possible revocation have to be in written form and communicated to the Company. and performing their duties in accordance with the law. 823-3 of the French commercial code. 225-97 to R.” Paragraph 1. THIRTEENTH RESOLUTION (Amendment to article 19 of the bylaws) The Shareholders’ Meeting. in application of article L.” Page 135 sur 137 . to all of the board of directors meetings.The remainder of the article remains unchanged. the chairman and chief executive officer and. as well as all of the shareholders’ meetings. are deemed present. decides to amend article 20 (Shareholders’ Meetings) of the bylaws of the Company as follows: Paragraph 1. deliberating in compliance with the quorum and majority requirements for Extraordinary Shareholders’ Meetings after examination of the report of the Board of Directors. subparagraph 8: This subparagraph is deleted. where such persons are directors. deliberating in compliance with the quorum and majority requirements for Extraordinary Shareholders’ Meetings after examination of the report of the Board of Directors. They can be held by videoconference or by telecommunications means enabling the identification of the shareholders and which types and conditions of use are set out in articles R. Unless otherwise provided by law.” The remainder of the article remains unchanged. decides to amend article 24 (Allocation of financial results) of the bylaws of the Company as follows: “Article 24 – Allocation of financial results 1. the shareholders’ meeting may decide to distribute part of the distributable reserves. In addition. for the purpose of calculating the rights to bonus dividend and increased distributions. 2. FIFTEENTH RESOLUTION (Amendment to article 24 of the bylaws) The Shareholders’ Meeting. it starts again if. The distributable profit is composed of the profit of the financial year. for any reason. the works council may require the addition of draft resolutions to the agenda. if any. Any shareholder who. The shareholders’ meeting shall withhold any amounts from this profit it deems appropriate either to allocate to any optional reserve funds or to carry it forward. The request to add items to the agenda must be justified. has held registered shares for at least two years and still holds them at the date of payment of the dividend in respect of this financial year. Losses. However. if any. pursuant to the French labor code. The profit and loss account which recapitulates the income and expenses for the financial year underlines by difference. Except in case of share capital reduction. or any association of shareholders meeting the legal requirements and acting in compliance with law and within the legal timeframe. at least 5% is deducted for the legal reserve fund. Out of the profit for the financial year less any previous losses. subparagraph 3 : “One or several shareholders representing at least the proportion of capital set out by law. In addition. are entered into a special account to be deducted from the profits of later financial years until they have been absorbed or to be discharged by means of a reduction of the share capital. the decision shall state expressly the reserve items from which the distribution has been made. The difference of revaluation is not distributable. it may be incorporated in all or in part of the share capital. the legal reserve falls below this tenth. further to such distribution. no distribution may be made to shareholders where the equity are or may become. less the previous losses and the amounts to be entered in the reserves in application of the law or bylaws and increased by the profits carried forward from prior years. less than the amount of capital increased by the reserves which are non-distributable as per applicable laws and bylaws. the increased dividend will be rounded down to the nearest cent. Page 136 sur 137 . This deduction is no longer compulsory once the reserve has reached one tenth of the share capital.” The remainder of the article remains unchanged. in such event. may require the addition of items [points] or draft resolutions to the agenda.Paragraph 3. including any dividend which is paid in new shares. shall receive in respect of such shares a bonus equal to 10% of the dividend paid for the other shares. the profit or loss for the financial year. New shares thus issued shall rank pari passu with the existing shares in respect of which they were issued. Where applicable. deliberating in compliance with the quorum and majority requirements for Extraordinary Shareholders’ Meetings after examination of the report of the Board of Directors. after deduction of the amortization and depreciations. dividends shall be paid first from the financial year’s distributable profit. at the end of the financial year. at the end of the financial year.” EXTRAORDINARY AND ORDINARY RESOLUTIONS: SIXTEENTH RESOLUTION (Powers for completion of formalities) The Shareholders’ Meeting grants all powers to the bearer of an original.where the shareholder exercises its option for the payment of the dividend in shares. the shareholder meeting the legal requirements may pay a balancing amount in cash to receive an additional share. the rights to any fractions of a share arising from the increase shall not be negotiable and the corresponding shares shall be sold and the proceeds distributed to the holders of such rights no later than thirty days after the registration in their account of the whole number of shares allocated to them. Page 137 sur 137 . any shareholder who. profits or premiums that gives rise to bonus shares distribution.in the case of a bonus shares distribution. determined by the ordinary shareholders' meeting to be held in 2014. The provisions of this paragraph shall apply for the first time to the payment of the dividend to be distributed in respect of the financial year ending on December 31. a copy or an extract of the minutes of this meeting to carry out all legal and administrative formalities. In the event of a dividend payment in shares or bonus shares distribution. rounded down to the nearest whole number in case of fractions. and file and register all information required by the laws in force. shall receive additional bonus shares equal to 10% of the number distributed. in the event of fractions: .Similarly. has held such registered shares for at least two years and still holds them at the issuance date of a share capital increase by way of capitalization of reserves. The number of shares giving entitlement to such increases may not exceed 0. . any additional shares shall rank pari passu with the shares previously held by the shareholder for the purpose of determining any bonus dividend or bonus shares distribution.5% of the share capital per shareholder as at the end of the relevant financial year. 2013. However.