2.5. Approval by the Board of Directors

6.14.Provisions

(in million EUR) Environment Elia Re Easement provision

Balance at 1 January 2017 Increase in provisions 16.2 7.1 3.0 1.6

Reversals of provisions (4.0) 0.0

Utilisation of provisions

(0.6) (0.6)

Balance at 31 December 2017 14.6 8.1 Dismantling obligations Employee benefits Other Total

2.5 25.8 0.3 4.3 (0.1) (4.1) (0.1) (0.7) 2.6 25.3

Long-term portion Short-term portion 10.1 8.1 4.5 0.0 2.6 20.8 0.0 4.5

Balance at 1 January 2018 Acquisition through business combinations 14.6 8.1 0.0 0.0 0.0 2.6 25.3

3.4 0 15.0 66.8 1.5 4.8 91.6

Increase in provisions 0.7 1.3 0.0 2.4 0.0 0.3 4.7

Reversals of provisions Utilisation of provisions

(0.7) (1.3) (2.9) 0.0 (0.1) (0.3) (5.3) (2.3) (0.1) (0.1) 0.0 0.0 (0.2) (2.7) Discounting of provisions (0.3) 0.0 (0.1) 0.3 0.0 0.0 (0.1)

Balance at 31 December 2018 15.3 8.0 12.0 69.5 1.4 7.2 113.4

Long-term portion Short-term portion 10.8 8.0 6.0 69.5 0.0 2.6 96.9 4.5 0.0 6.0 0.0 1.4 4.5 16.5

The Group has recognised provisions for the following:

Environment: The environmental provision provides for existing exposure with respect to land decontamination. The €15.3 million provision mainly relates to the Belgian segment, with only a €2.0 million provision relating to the German segment. This explains the limited increase in provision from €14.6 million at the end of 2017 to €15.3 million as at 31 December 2018.

More specifically for the Belgian segment, Elia has conducted soil surveys on over 200 sites in Flanders in accordance with contractual agreements and Flemish legislation. Significant soil contamination was found on a number of sites, with this being mainly attributable to historical pollution arising from earlier or nearby industrial activities (gas plants, incinerators, chemicals, etc.). In the Brussels-Capital Region and Walloon Region, Elia also carried out analyses and studies to detect contamination at a number of substations and a number of plots occupied by pylons for overhead power lines. Based on the analyses and studies it conducted, Elia has made provisions for possible future soil remediation costs in line with the relevant legislation.

Environmental provisions are recognised and measured based on an expert appraisal bearing in mind BATNEEC (Best Available Techniques Not Entailing Excessive Costs) as well as on the circumstances known at the end of the reporting period. The timing of the settlement is unclear but for the premises where utilisations occur, the underlying provision is classified as a short-term provision.

Elia Re: An amount of €8.0 million is included at year-end for Elia Re, a captive reinsurance company. €3.5 million of this is linked to claims for overhead facilities, €3.2 million to electrical facilities and €1.3 million to liability cases (as opposed to €3.8 million for overhead facilities, €2.9 million for electrical facilities and €1.4 million for liability cases in 2017). The expected timing of the related cash outflow depends on the progress and duration of the respective procedures.

Easement provisions: The easement provision relates to payments likely to be made to landowners as a compensation for overland lines crossing their property. These easement rights are recognised within the German segment for overland lines built by the former owners of 50Hertz Transmission, with exposure resulting from section 9 of the German Land Register Amendment Act (GBBerG.). The estimates are based on the value of claims filed or on the estimated amount of the risk exposure. The expected timing of the related cash outflow depends on the progress and duration of the claim filed.

Dismantling provisions: As part of the Group’s CAPEX program, the Group is exposed to decommissioning obligations; most of which are related to offshore projects. These provisions take into account the effect of discounting and the expected cost of dismantling and removing the equipment from sites or from the sea. The carrying amount of the provision as at 31 December 2018 was €69.5 million and fully relates to the German segment. The Group has applied a case-by-case approach to estimate the cash outflow needed to settle the liability.

Employee benefits: See Note 6.13, for more details of these short term employee benefits.

‘Other' consists of various provisions for litigation to cover likely payment where legal proceedings have been instituted against the Group by a third party or where the Group is involved in legal proceedings. These estimates are based on the value of claims filed or on the estimated level of risk exposure. The expected timing of the related cash outflow depends on the progress and duration of the associated proceedings.

6.15.Other non-current liabilities

(in million EUR)

Investment grants Non-current deferred income Other

Total

* See Note 2.1 for details regarding restatement as a result of a change in accounting policy.

2018 2017 (restated *)

85.8 129.8 0.6

216.2

€82.1 million of the investment grants relates to 50Hertz Transmission (Germany). These are released in profit and loss when entitlement to the grants is acquired. The amount has increased from €10.0 million at the end of 2017 for the investment grants received for the Southwest Coupling line.

The increase in other non-current liabilities is mainly due to the acquisition of a 20% stake in 50Hertz. The deferred income relates to received customer contributions, which are recognised in profit or loss in accordance with the useful life of the respective asset. The liability arose as part of the adoption of IFRS15 which is further detailed in Note 2.1. At the end of 2018, a liability of €87.4 million was recognised within Elia Transmission (Belgium) and a liability of €42.3 million was recognised within 50Hertz Transmission (Germany).

6.16.Trade and other payables

(in million EUR)

Trade debts VAT and other taxes Remuneration and social security Dividends Levies Other Accrued liabilities

Total

2018

602.4 19.4 31.3 1.2 1,137.7 137.9 59.2

1,989.1 2017

220.8 8.9 28.1 1.2 108.0 11.1 0.4

378.5

The amount for levies can be split between levies related to 50Hertz Transmission (€1,029.2 million) and levies related to Elia Transmission (€108.5 million).

The levies for Elia Transmission are stable compared to previous year (increase of €0.5 million). These levies include federal levies, which total €43.4 million at 31 December 2018 and have remained unchanged from 2017. Levies for the Walloon government have decreased slightly to €45.9 million, from €49.1 million at the end of 2017. The remaining balance consists of federal green certificates (€11.4 million) and strategic reserves (€7.6 million).

The levies for 50Hertz Transmission consist mainly of EEG (€865.5 million), KWK (€31.6 million), §19 StromNEV (€96.3 million) and Offshore contributions (€33.7 million).

6.17.Accruals and deferred income

(in million EUR)

Accruals and deferred income Settlement mechanism Belgian regulatory framework Settlement mechanism German regulatory framework

Total 2018

19.3 532.9 444.5

996.7 2017

8.5 526.1 0.0

534.6

The settlement mechanism is described in Note 9. The amounts linked to the settlement mechanism are detailed in Note 4.

The settlement mechanism at 31 December 2018 is set out in the table below:

(in million EUR)

To be refunded to the tariffs in the current regulatory period To be refunded to the tariffs in the next regulatory period

Settlement mechanism Belgian regulatory framework

110.5 422.4

532.9 German regulatory framework

0.0 444.5

444.5

As the current German regulatory framework comes to an end in 2018, all amounts to be refunded are for the next regulatory period.

The Group operates in a regulated environment in which tariffs are meant to make it possible to realise total revenue consisting of:

1. a reasonable return on invested capital; 2. all reasonable costs which are incurred by the Group.