1. Interest-bearing loans
The total amount of € 2,832.2 million (year-end 2017: € 2,842.9 million) in long-term loans comprises € 2,250.0 million (year-end 2017: € 2,250.0 million) in long-term bonds and € 582.2 million (year-end 2017: € 592.9 million) in private loans.
The movements in interest-bearing loans
|In millions of euros||First half of 2018||2017|
|Balance as at 1 January||2,842.9||3,164.3|
|Private loans contracted and bond loans issued||-|
|Repayment obligations in next financial year||(10.7)||(321.4)|
|Balance as at 30 June/31 December||2,832.2||2842.9|
The future repayments
|In millions of euros||30 June 2018||2017|
|Repayment obligations in|
|Total repayment obligations||3,153.6||3,164.3|
The company has a current account facility of € 25 million (year-end 2017: € 25 million), a committed credit facility of € 680 million (year-end 2017: € 680 million), a € 750 million Commercial Paper programme (year-end 2017: € 750 million) and a € 7.5 billion Medium Term Note (MTN) programme (year-end 2017: € 7.5 billion).
Under the MTN programme, € 5.0 billion was available for new issues as of 30 June 2018.
No securities have been provided by N.V. Nederlandse Gasunie for the interest-bearing loans and other facilities.
2. Current financing liabilities
|In millions of euros||30 June 2018||31 Dec. 2017|
|Repayments on long-term loans||321.4||321.4|
|Short-term loans to joint ventures||19.1||13.3|
|Total current financing liabilities||675.6||602.7|
In the first half of 2018, the company repaid € 10.7 million (first half of 2017: € 760.7 million) in long-term loans.
3. Employee benefits
The pension liabilities are valued annually in the second half of the year in accordance with IAS 19 Employee Benefits (Revised). As of the balance sheet date, an indicative calculation of pension liabilities has been made, taking into account the changed assumptions below.
The assumptions underlying the calculation of the pension liabilities are as follows: inflation 1.85% (year-end 2017: 1.9%), expected annual salary increase 2.7% (year-end 2017: 2.7%) and the expected pension increase for retirees 1.7 % (year-end 2017: 1.7%).
The provision for pension liabilities relates to the pension scheme of employees who joined Gasunie Deutschland before 2012. The scheme is treated as a defined benefit pension scheme.
The provision for pension liabilities for employees in Germany concerns the present value of the pension entitlements granted as of 30 June 2018 in the amount of € 90.1 million (year-end 2017: € 88.1 million).
Actuarial results taken directly to equity for the first half of 2018 totalled € 0.4 million negative (first half of 2017: € 4.1 million positive).
As of 30 June 2018, the accumulated actuarial gains and losses taken directly to equity totalled € 26.7 million negative (year-end 2017: € 26.3 million negative).
4. Other long-term liabilities
The ‘other long-term liabilities’ consist of ‘deferred tax liabilities’ and ‘provisions’. There was no substantial addition to or release of provisions up to 30 June 2018.
5. Financial instruments
The following methods are applied by N.V. Nederlandse Gasunie to determine the approximate fair values of financial instruments:
- For trade receivables, tax and social security contributions, other receivables, cash and cash equivalents, current financing liabilities excluding repayment obligations on long-term loans, trade payables, tax liabilities, and other liabilities, accruals and deferred income, the carrying amount approximates the fair value because of the short period to the due date for each of these instruments;
- The other equity interests are stated at fair value, which is based on the present value of the expected cash flows. In determining the discount rate, the risk profile, including the credit risk, of the other equity interests has been taken into account;
- The interest-bearing loans and repayment obligations on long-term loans are bonds with a listing on the Amsterdam stock exchange, and private loans. The fair value of the bonds is the market value at the year-end closing price. The fair value of the private loans has been calculated by discounting the future cash flows against the current yield curve. In determining the discount rate, the company’s own risk profile, including the credit risk, is taken into account.
N.V. Nederlandse Gasunie uses the following hierarchy of methods to determine and measure the fair value of the derivative financial instruments for presentation in the balance sheet:
|Level 1:||Based on prices on active markets for the same instrument;|
|Level 2:||Based on prices on active markets for comparable instruments, or based on other measurement methods, with all required key data being derived from publicly available market information; and|
|Level 3:||Based on other measurement methods, with all required key data not being derived from publicly available market information.|
The assets and liabilities presented at fair value in the balance sheet are determined in accordance with the following hierarchy:
|In millions of euros||Total||Level 1||Level 2||Level 3|
|30 June 2018|
|- other equity interests||478.3||-||-||478.3|
|31 Dec. 2017|
|- other equity interests||490.7||-||-||490.7|
The other equity interests are a 9% interest in Nord Stream AG, a 12.7% interest in PRISMA European Capacity Platform GmbH, and a 12.5% interest in Energie Data Services Nederland (EDSN) B.V.
The interests in Nordstream AG, PRISMA European Capacity Platform GmbH and Energie Data Services Nederland (EDSN) B.V. are stated at fair value. In calculating the fair value of relevant assets, N.V. Nederlandse Gasunie applies a discount rate based on the risk-free interest rate plus an appropriate risk premium. This discount rate as applied by Gasunie varies between 4% and 7% after taxes, depending on the risk profile of the asset to be valued.
From 2008, N.V. Nederlandse Gasunie acquired a 9% interest in Nord Stream AG, which operates two gas pipelines across the Baltic Sea from Russia to Germany. The equity interest in Nord Stream AG is held by Gasunie Infrastruktur AG and is intended as a long-term investment supporting the objectives of N.V. Nederlandse Gasunie.
The projected cash flows are based on contractual agreements. As an indication, all things being equal, if the discount rate changes by 0.5% points, this will result in a change in the fair value amount of € 24 million (year-end 2017: € 24 million).
The valuation is based on the present value of the cash flows, using a calculation model which is updated annually by Nord Stream AG as part of the business plan. This model is presented for assessment and approval to the shareholders of Nord Stream AG. The model is subsequently tested by the management of N.V. Nederlandse Gasunie on the basis of Nord Stream AG’s periodic reports.
The interests in PRISMA European Capacity Platform GmbH and Energie Data Services Nederland (EDSN) B.V. are stated at fair value. Given the relatively limited materiality of these equity interests, a sensitivity analysis of the fair value calculation has not been included.
The movements in other equity interests are as follows:
|In millions of euros||first half of 2018||2017|
|Balance as at 1 January||490.7||470.2|
|Movement in fair value taken directly to equity||(12.4)||20.5|
|Balance as at 30 June/31 December||478.3||490.7|
The table below compares the carrying amount and fair value of those financial instruments whose carrying amount does not approximate the fair value:
|In millions of euros||30 June 2018||31 Dec. 2017|
|Carrying amount||Fair value||Carrying amount||Fair value|
|Repayments on long-term loans||321.3||321.7||321.4||322.2|
6. Financial information by segment
The information is segmented in line with the Group’s activities. The operating segments reflect the management structure of the Group. The following segments are distinguished:
- Gasunie Transport Services
This segment covers network management in the Netherlands and is responsible for managing transport, developing the pipeline network and related plants, as well as promoting market forces.
- Gasunie Deutschland
This segment covers network management in Germany and is responsible for managing transport, developing the pipeline network and related plants, as well as promoting market forces.
This segment focuses on optimum utilisation of existing participations, developing projects for the energy transition and facilitating access to the new gas flows for north-western Europe using an LNG connection and long-distance pipelines. Participation in national and international projects relating to the natural gas infrastructure in the Netherlands and Germany is another activity of this segment. This segment also includes joint ventures relating to pipelines that connect the Gasunie transport network with foreign markets, such as the BBL pipeline to the United Kingdom.
The accounting policies used for these segments are the same as those applied to the consolidated and company financial statements.
The liabilities, revenues and results of a segment comprise both items directly related to the segments and items that can reasonably be attributed to them. Transaction prices for inter-segment transactions are determined at arm’s length.
Information on revenues and result
|In millions of euros||Revenues||Segment result|
|first half of 2018||first half of 2017||first half of 2018||first half of 2017|
|- Gasunie Transport Services||514.7||588.6||213.4||295.5|
|- Gasunie Deutschland||109.8||108.3||48.4||47.8|
|Unallocated financial income and expenses||13.9||4.2|
|Result before taxation||300.4||375.8|
|Revenues and result after taxation for the year||671.4||739.7||234.3||291.1|
During the first half of 2018, the Gasunie Transport Services segment provided inter-segment services to the value of € 7.5 million (first half of 2017: € 4.2 million), the Gasunie Deutschland segment provided inter-segment services to the value of € 0.1 million (first half of 2017: € 0.1 million) and the Participations & Business Development segment provided inter-segment services to the value of € 13.3 million (first half of 2017: € 13.3 million).
7. Revenue categorisation
IFRS 15 requires the company to categorise its revenues according to the way in which economic factors influence the nature, amount, timing and uncertainty of the cash flows. We have divided Gasunie's revenue into two categories. The first of these concerns revenue from regulated transport and related services. This revenue is determined every 5 years by the regulator in the Netherlands and Germany. The second concerns non-regulated services, the revenues of which are determined by rates and volumes resulting from market forces.
The revenue from regulated services is generated by the Gasunie Transport Services and Gasunie Deutschland segments. The revenue from non-regulated services is generated by the Participations segment. Inter-segment services have been eliminated.
The following table shows the revenues in both categories:
|In millions of euros||first half of 2018||first half of 2017|
|Revenue from regulated services||624.5||696.9|
The Executive Board,
J.J. Fennema*, chair
Groningen, 23 July 2018
* Director under the Articles of Association