OFGEM FINANCIAL INFORMATION REPORTING YEAR ENDED 31 DECEMBER 2010

Under the Ofgem issued “ Supply Probe – Proposed Retail Market Remedies”, changes to generators and suppliers licences were made requiring licence holders to publish financial information to aid comparability of suppliers and generators. This “Segmental Reporting” satisfies Standard Licence Condition 19A of the Gas and Supply Licences and Standard Licence Condition 16B of the Licence.

EDF Energy (UK) Ltd and its subsidiaries (“EDF Energy”) operate through 3 operational business units supported by corporate services. These are “Energy Sourcing and Customer Supply”, ”Nuclear Generation”, “Nuclear New Build” and “Corporate Steering Functions and Company Shared Services & Integration”. The principal activities of these business units and support services are:  Energy Sourcing and Customer Supply (ESCS): the provision and supply of electricity and gas to residential, commercial and industrial customers, the provision of services relating to energy, including purchasing of fuel for power generation and the generation of electricity;  Nuclear Generation (NG): the generation of electricity through its fleet of stations and  Nuclear New Build (NNB): the development and construction of new nuclear power plants in the  Corporate Steering Functions and Company Shared Services and Integration (CSF/CSSI): the provision of support services including HR, Finance, Property and IT, and the development of greater integration and synergies across the company where possible.

The results of NNB are excluded from the scope of the Ofgem requirements hence NNB indirect and direct costs are not included in the analysis below.

No consolidated statutory accounts have been prepared which include all UK operations of the EDF Energy group of companies. The results of EDF Energy are fully consolidated into the financial statements of EDF S.A which are publicly available. EDF Energy has been included within the United Kingdom segment of the Segmental note in the EDF S.A statutory accounts which can be found at http://www.edf.com/html/RA2010/en/pdf/EDF2010_fin_001_va.pdf. The results shown in the EDF SA statutory accounts are euro-denominated and also include the results of the Networks business which was sold on 29 October 2010.

Recently Ofgem have provided further guidance in relation to their preferred classification of certain costs and revenues which have led to the re-classification of items from the 2009 Segmental Reporting published last year. For comparison purposes the 2009 Segmental Reporting has been restated using the revised guidance and can be found in Appendix 1. The format used for the Segmental Reporting is consistent with the Ofgem guidance issued in the Financial Information Reporting: Amended Guidance.

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EDF Energy Segmental Analysis 2010

Generation Electricity supply Gas supply Aggregate Non supply Unit Nuclear Domestic Non-domestic Domestic Non-domestic Nuclear business 2010 (1) 2010 (2) 2010 2010 2010 2010 2010 Total revenue £M 2,116 1,504 1,636 3,726 948 16 6,326 Revenue from sales of £M 2,107 1,467 1,632 3,725 946 16 6,319 electricity and gas Other revenue £M 9 37 4 1 2 0 7

Total operating £M 1,283 1,150 1,709 3,564 954 7 6,234 costs Direct fuel costs £M 290 820 919 2,474 522 6 3,921 Other direct costs £M 118 178 479 931 247 0 1,657 Indirect costs £M 875 152 311 159 185 1 656

EBITDA £M 833 354 (73) 162 (6) 9 92 DA £M 285 449 14 9 7 0 30 EBIT £M 548 (95) (87) 153 (13) 9 62

Volume TWh, therms 47.9 23.7 15.8 47.8 1017.4 19.6 WACO F/E/G £/MWh, p/th 6.06 34.60 58.16 51.76 51.3 30.6

(1) Figures shown represent 100% of nuclear capacity, shared 80/20 by EDF Energy and (2) Includes results of Eggborough for the first three months prior to divesture and Sutton Bridge for the full year which were both managed under Hold separate Arrangements and excludes the proceeds on disposal of Eggborough

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Assumptions used in the preparation of this table are as follows:

Segments  Generation includes, and gas fired generation, nuclear generation, wind farms, Independent Power Purchase agreements and other contractual relationships entered into by EDF Energy. By its nature nuclear generation has high associated fixed costs and relatively low fuel (uranics) costs when compared to fossil generation (see WACO section below). For this reason nuclear and non nuclear generation have been shown in two separate columns within ‘Generation’ in the Segmental Reporting.  EDF Energy is involved in several joint ventures, primarily in relation to the production of power from renewable sources. Joint ventures are accounted for by proportionate consolidation and results are included within the Non Nuclear Generation segment.

Revenue  Generation revenues from sales of electricity include sales to external third parties as well as internal customers within EDF Energy.  Supply revenues from sales of electricity and gas include only those revenues from the direct sale of electricity and gas to customers.  Other revenues for the reported segments includes: Nuclear Generation: Provision of ancillary services to other nuclear facilities. o Non-Nuclear Generation: Sale of Renewable Obligation Certificates, by-products (e.g. ash, gypsum), ancillary service income and income received in o relation to an external tolling arrangement. Supply – Domestic electricity and Domestic gas: Other revenue relates to charges to customers for non- services provided e.g. energy saving o products, insurance products etc. Please note that: - EDF Energy operates a market reflective transfer pricing arrangement between its Generation and Supply businesses, with traded volumes transferred from the market facing book at actual traded price or a price reflective of the market price. - the hedging policy within EDF Energy for Generation businesses will lead to volumes of energy being sold in advance of delivery dates. The hedging policy attempts to remove the impact of short-term market volatility.

Direct fuel costs  Direct fuel costs for Non-Nuclear Generation reflects the direct costs of coal, oil and gas required to produce power. Fuel costs relating to Nuclear Generation principally include the cost of uranics (including fabrication) and spent fuel management costs.  Direct fuel costs for the supply segments include the cost of purchasing energy in advance through bilateral contracts as well retrospectively through the industry imbalance mechanisms

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Please note that the hedging policy within EDF Energy for Supply businesses will lead to volumes of energy being sold or purchased in advance of delivery dates. The hedging policy attempts to minimise risk for the respective segments (in particular for domestic customers) and eliminate short-term market volatility.

Other direct costs  Other direct costs includes all costs, excluding direct fuel and metering costs, considered by EDF Energy to be included within Gross Margin for management reporting. This includes all costs incurred in delivering energy to customers (e.g. BSUoS, distribution costs,…) and environmental costs (Carbon, CESP, CERT,…) but does not include customer or business support costs (e.g. customer service costs, HR costs).

Indirect costs  Indirect costs contains all non gross margin operating costs including metering charges (net of income received), staff costs, property costs, head office recharges, bad debt expense, etc.  The costs relating to EDF Energy Corporate functions (CSF & CSSI) are allocated to the 3 operational Business Units (ESCS, NG, NNB) based on specific key drivers for the various cost concerned. CSSI costs cover Shared Services, Property and Facilities, IT Operations and IT Projects and Transformation and allocations are based upon usage relating to each service. CSF costs relate to the central Corporate teams (Finance, HR, Strategy) and the allocation of costs is determined on an equitable basis across the business units.  Indirect costs within business units, allocation per segment: ESCS (all non nuclear segments) indirect costs are allocated across non-nuclear generation and supply segments where the costs are principally incurred o within that segment. Where a function cannot be linked directly to a segment (e.g. HR, Finance) the associated costs have been apportioned to each segment based on appropriate cost drivers. This provides a better allocation of functional costs and is a change from last year’s publication where these costs were allocated by volume generated/supplied. It also is consistent with the overhead cost allocation methodology used for Ofgem probe enquiries in relation to the Domestic Market. NG business unit operates as a standalone segment and hence no judgemental apportionment of NG indirect costs is required o

EBITDA/EBIT  Earnings before interest, tax, depreciation and amortisation (EBITDA) is the net of revenues less direct costs, other costs, and indirect costs.  Earnings before interest and tax (EBIT) are as above, but after deduction of depreciation and amortisation.  Depreciation and Amortisation charges in the Non-Nuclear Generation segment include an impairment of £340m against the non-nuclear generating assets of the Group  As in 2009, gains/(losses) from derivative instruments (IAS39 mark to market of open positions to be delivered in the future) have been excluded from the segmental analysis above.

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WACO  As required by the Ofgem guidance, the weighted average cost for Supply of electricity/gas is based on energy costs only and does not include other direct costs such as distribution, transportation, metering, renewable obligations etc.  The weighted average input cost of fuel for Non-Nuclear Generation is based on the cost of coal, gas, carbon, oil and , and for Nuclear Generation is based on the cost of uranics (including fabrication) and spent fuel management costs.  Generation volumes are National Balancing Point (NBP) and supplier volumes are Customer Meter, and these volumes drive the WACO values.  The weighted average cost of the Nuclear Generation has been calculated on a consistent manner to the WACO calculation for Supply and Non-Nuclear Generation. The WACO for Nuclear Generation is lower than for the other segments due to the nature of nuclear generation. The fixed costs in relation to a nuclear are higher than for other types of plant due to the associated costs of increased safety measures, security and regulation, but the marginal cost of generating each TWh is lower.

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Appendix 1 Restatement of 2009 Segmental analysis (takes into account the re-classification of costs as determined by the revised Ofgem guidance.)

EDF Energy Segmental Analysis 2009

Generation Electricity supply Gas supply Aggregate Non Non- supply Unit Nuclear Domestic Domestic Non-domestic Nuclear domestic business 2009 2009 (1) 2009 2009 2009 2009 2009 Total revenue £M 2,379 2,020 1,643 4,385 838 42 6,908 Revenue from sales of £M 2,366 1,984 1,636 4,385 837 42 6,900 electricity and gas Other revenue £M 13 36 7 0 1 0 8

Total operating £M 1,320 1,550 1,703 4,241 945 41 6,930 costs Direct fuel costs £M 311 1,065 941 3,170 546 28 4,685 Other direct costs £M 147 279 448 918 220 10 1,596 Indirect costs £M 862 206 314 153 179 3 649

EBITDA £M 1059 470 (60) 144 (107) 1 (22) DA £M 263 135 13 8 6 0 27 EBIT £M 796 335 (73) 136 (113) 1 (49)

Volume TWh, therms 54.5 (2) 32.2 15.5 51.0 (3) 886.7 44.8 WACO F/E/G £/MWh, p/th 5.76 (4) 33.07 60.71 62.16 61.6 62.5 (1) Includes the results of Eggborough and Sutton Bridge which are both managed under Hold Separate Arrangements (2) This represents the full year volume, please note EDF Energy acquired on the 6th of January 2009 (3) This now includes British Energy Direct sales volumes for the year 2009, please note EDF Energy acquired British Energy on the 6th of January 2009 (4) From 6th of January 2009 onwards

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Appendix 2 Reconciliation of Segmental Analysis to EDF Group Document de Reference

2010 2009 Notes

£M £M £M £M (1) The Document de Reference includes the results of EBITDA per Segmental Analysis 1,279 1,507 EDF Energy's Networks business unit up until 29 Generation October 2010, the date at which it was sold to the 1,187 1,529 Cheong Kong Group. The activities of this business unit Supply 92 (22) are excluded from the scope of the Ofgem report.

(2) The Corporate and Nuclear New Build business units do EBITDA per EDF Group DdR (in GBP) 2,339 2,725 not have any generation or supply activities and are In EUROs 2,732 3,063 excluded from the scope of the Ofgem report. Exchange rate used 1.168215 1.123622 (3) Following the purchase of British Energy, EDF Energy sold some assets such as the Eggborough power Variance (1,060) (1,218) station. Any profits from the disposal of assets are non- recurring items which are not related to the ongoing supply of generation activities of EDF Energy. Therefore Reconciled as Follows: 1,060 1,218 any one-off items relating to disposals have been excluded from the segmental reporting. (1) EBITDA of Networks business unit (sold 29 October 2010) 716 933 (4) Following the acquisition of British Energy and in accordance with International Financial Reporting Standards (IFRS), EDF Energy undertook a fair value EBITDA of Non Supply / Generation Business Units 10 (10) accounting exercise which led to the recognition of (Corporate and Nuclear New Build) (2) accounting provisions for "out of the money" contracts at the date of acquisition. As these contracts are delivered (3) the associated provisions are released and recognised Profit from disposals (one-off items) 79 0 in the consolidated Group P&L. The release of these provisions is a fair value accounting adjustment and Fair Value Adjustments (mainly relating to British unrelated to the underlying operating cash flows of the nuclear generation business. These profits have (4) 252 297 Energy Acquisition) therefore been excluded from the Ofgem segmental reporting which focuses solely on operating profits from EDF SA Consolidation Adjustments (5) 3 (2) generation and supply entities within the EDF Energy. (5) These relate to consolidation adjustments made by EDF SA in arriving at the figures per the EDF DDR. Difference 00

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