ANNUA REPORT EDP 2016 35. Financial In 2016, as Debt far as shareholders return is concerned, EDP kept its dividend distribution policy with a dividend distributed of 0.185 per share. EDP share price closed 2016 year with a decrease of 13%. Considering the dividend paid in the This caption is analysed as follows: year, EDP shares yielded a -7% shareholder return, 5 p.p. below the Euro Stoxx Utilities Index and 2 p.p. above PSI20. Group Company The Thousand following Euros chapter summarizes the status of EDP s commitments, Dec and 2016 specifies Dec the 2015 main objectives Dec 2016and Dec goals 2015 associated Debts and to borrowings the achievement - Non-current of the strategic agenda and aligned with the Principles of Sustainable Development of the Group, demonstrating this way the company s effort to meet its challenges. - EDP, S.A. 350,570 413,002 350,570 422,115 - EDP Finance B.V. 2,359,360 2,336,111 - - - EDP Brasil Group 588,845 766,476 - - - EDP Renováveis Group 686,276 935,218 - - - EDP Produção 73,688 82,906 - - - EDP Gás Distribuição - 21,329 - - 4,058,739 4,555,042 350,570 422,115 Non-convertible bond loans: - EDP, S.A. 50,000 300,000 7,900,000 8,150,000 - EDP Finance B.V. 9,394,007 9,202,141 - - - EDP Brasil Group 696,122 432,452 - - 10,140,129 9,934,593 7,900,000 8,150,000 Hybrid bond: - EDP, S.A. 739,168 739,147 739,168 739,147 739,168 739,147 739,168 739,147 - EDP, S.A. 437,169 229,632 437,169 229,632 437,169 229,632 437,169 229,632 Other loans 21,681 20,669 - - 15,396,886 15,479,083 9,426,907 9,540,894 Accrued interest - 3,033 - - Other liabilities: - Fair value of the issued debt hedged risk 153,387 171,760 - - Total Debt and borrowings 15,550,273 15,653,876 9,426,907 9,540,894 Collateral Deposits - Non-current * -31,936-66,855 - - 15,518,337 15,587,021 9,426,907 9,540,894 Group Company Thousand Euros Dec 2016 Dec 2015 Dec 2016 Dec 2015 Debt and borrowings - Current - EDP, S.A. 65,129 69,770 74,199 69,770 - EDP Finance B.V. 199,482 199,789 - - - EDP Brasil Group 90,234 83,241 - - - EDP Renováveis Group 99,185 134,728 - - - Others 5,696 9,955 - - 459,726 497,483 74,199 69,770 Non-convertible bond loans: - EDP Finance B.V. 1,062,764 2,248,970 - - - EDP Brasil Group 178,671 108,036 - - 1,241,435 2,357,006 - - - EDP, S.A. 556,000 418,352 1,575,846 1,633,352 556,000 418,352 1,575,846 1,633,352 Other loans 7,664 14,669 - - 2,264,825 3,287,510 1,650,045 1,703,122 Accrued interest 292,064 329,154 116,314 100,360 Other liabilities: - Fair value of the issued debt hedged risk -80,486 - - - Total Debt and borrowings 2,476,403 3,616,664 1,766,359 1,803,482 Collateral Deposits - Current * -20,095-13,060 - - 2,456,308 3,603,604 1,766,359 1,803,482 * Deposits constituted as collateral for financial guarantee 51 365
Commercial G4-PR5 Paper 105 non-current refers to a Commercial Paper programs with a firm underwriting commitment for a period of over one Marketing Communications year, in the amounts of 250,000 thousand US Dollars and 200,000 thousand Euros. Main G4-PR6 events of the period: Não aplicável. G4-PR7 Não material In Customer March 2016, Privacy EDP issued a Eurobond of 600,000 thousand Euros maturing in March 2023. In August 2016, EDP issued a Eurobond of 1,000,000 thousand Euros maturing in February 2024. G4-PR8 107 Compliance In November 2016, following a proposal submitted by an investor, EDP, S.A. agreed to purchase Note Entitlements in the amount of 250,000 thousand Euros and 2,500 Make-whole Entitlements EDP issued in 2008 in the entitled "EUR 300,000,000 Floating Rate Notes due 2018". Such titles have been canceled. G4-PR9 107 R Access In December 2016, EDP, S.A. concluded a "Tender Informação Offer" over disponível the issues no Relatório "6,000% de Abordagem NOTES de DUE Gestão FEBRUARY à 2, 2018" and "4,900% NOTES DUE OCTOBER 1, 2019", limited to a total value of 500,000 thousand US Dollars. As a result of the offer, EDP, S.A. acquired 469,462 thousand EU26 US Dollars of the "6,000% NOTES DUE FEBRUARY 2, 2018" and 30,538 thousand US Dollars of the "4,900% NOTES DUE OCTOBER 1, 2019" (see note 20). EU27 75 EU28 74 e 75 EU29 74 e 75 EU30 72 Provision Of Information Cumprimento Total R Reasonable Verification Cumprimento Parcial imited Verification Não disponível * Specific indicator for this sector 160 366
ANNUA REPORT EDP 2016 The In 2016, nominal as value far as of shareholders outstanding Bond return loans is placed concerned, with external EDP kept counterparts, its dividend as at distribution 31 December policy 2016, with is analysed a dividend as distributed follows: of 0.185 per share. EDP share price closed 2016 year with a decrease of 13%. Considering the dividend paid in the Nominal year, EDP shares yielded a -7% shareholder return, 5 p.p. below the Euro Stoxx Utilities Index and 2 p.p. above PSI20. Issue Interest Type Conditions/ Value in Issuer date rate of hedge Redemption Million thousand Euros The following chapter summarizes the status of EDP s commitments, and specifies Currency the main objectives Group and Company goals Issued associated by EDP to the S.A. achievement of the strategic agenda and aligned with the Principles of Sustainable Development of the EDP, S.A. (ii) May-08 Variable rate (iii) n.a. May-18 50 EUR 50,000 50,000 Group, demonstrating this way the company s effort to meet its challenges. 50,000 50,000 Hybrid by EDP S.A. EDP, S.A. (iv) Sep-15 Fixed rate EUR 5.375% (v) n.a. Sep-75 750 EUR 750,000 750,000 750,000 750,000 Issued under the Euro Medium Term Notes program EDP Finance B.V.(i) Aug-02 Fixed rate GBP 6.625% Fair Value Aug-17 200 GBP 320,000 - EDP Finance B.V. Dec-02 Fixed rate EUR (iii) n.a. Dec-22 93 EUR 93,357 - EDP Finance B.V.(i) Jun-05 Fixed rate EUR 4.125% n.a. Jun-20 300 EUR 300,000 - EDP Finance B.V.(vi) Nov-07 Fixed rate USD 6.00% Net Investment Feb-18 531 USD 503,309 - EDP Finance B.V.(i) Nov-08 Fixed rate GBP 8.625% Fair Value Jan-24 325 GBP 410,314 - EDP Finance B.V. Nov-08 Zero coupon EUR (iii) n.a. Nov-23 160 EUR 160,000 - EDP Finance B.V.(i) Jun-09 Fixed rate JPY (iii) n.a. Jun-19 10,000 JPY 99,203 - EDP Finance B.V.(vi) Sep-09 Fixed rate USD 4.90% Net Investment Oct-19 969 USD 919,706 - EDP Finance B.V. Sep-12 Fixed rate EUR 5.75% n.a. Sep-17 750 EUR 750,000 - Fair Value/ EDP Finance B.V.(i) Nov-12 Fixed rate CHF 4.00% Cash Flow Nov-18 125 CHF 103,922 - EDP Finance B.V.(i) Sep-13 Fixed rate EUR 4.875% Fair Value Sep-20 750 EUR 750,000 - EDP Finance B.V.(i) Nov-13 Fixed rate EUR 4.125% Fair Value Jan-21 600 EUR 600,000 - EDP Finance B.V. Jan-14 Fixed rate USD 5.25% Net Investment Jan-21 750 USD 711,507 - EDP Finance B.V.(i) Apr-14 Fixed rate EUR 2.625% Fair Value Apr-19 650 EUR 650,000 - EDP Finance B.V. Jun-14 Variable rate (iii) Net Investment Jun-19 100 USD 94,868 - EDP Finance B.V.(i) Sep-14 Fixed rate EUR 2.625% Fair Value Jan-22 1,000 EUR 1,000,000 - EDP Finance B.V.(i) Nov-14 Fixed rate USD 4.125% Net Investment Jan-20 750 USD 711,507 - EDP Finance B.V.(i) Apr-15 Fixed rate EUR 2.00% Fair Value Apr-25 750 EUR 750,000 - EDP Finance B.V. Mar-16 Fixed rate EUR 2.375% n.a. Mar-23 600 EUR 600,000 - EDP Finance B.V.(i) Aug-16 Fixed rate EUR 1.125% n.a. Feb-24 1,000 EUR 1,000,000-10,527,693 - Issued by the EDP Energias do Brasil Group in the Brazilian domestic market Energest Apr-12 CDI + 0.98% n.a. Apr-17 60 BR 17,490 - ajeado Energia Nov-13 CDI + 1.20% n.a. Nov-19 450 BR 131,176 - Bandeirante Apr-14 CDI + 1.39% n.a. Apr-19 180 BR 52,470 - Escelsa Aug-14 CDI + 1.50% n.a. Aug-20 177 BR 51,538 - Energias do Brasil Oct-15 IPCA + 8.3201% n.a. Sep-21 196 BR 57,133 - Energias do Brasil Oct-15 CDI + 1.74% n.a. Sep-18 664 BR 193,632 - Energias do Brasil Oct-15 IPCA + 8.2608% n.a. Sep-24 52 BR 15,266 - Bandeirante Feb-16 CDI + 2.30% n.a. Feb-20 100 BR 29,150 - Escelsa Feb-16 CDI + 2.30% n.a. Feb-20 120 BR 34,980 - Energias do Brasil Apr-16 IPCA + 8.3479% n.a. Apr-22 258 BR 75,254 - Energest Apr-16 CDI + 2.25% n.a. Apr-18 54 BR 15,741 - Energest Apr-16 CDI + 2.265% n.a. Apr-20 36 BR 10,494 - Enerpeixe Nov-16 114.50% * CDI n.a. Nov-19 350 BR 102,026 - Pecém Dec-16 CDI + 2.95% n.a. Nov-21 330 BR 96,196-882,546-12,210,239 800,000 (i) These issues by EDP Finance B.V. are associated with interest rate swaps and/or currency swaps. (ii) Fixed in each year, varies over the useful life of the loan. (iii) These issues correspond to private placements. (iv) There is a call option exercisable at par by EDP at March 2021, March 2026 and subsequently on each date of interest payment. (v) Fixed rate in the first 5.5 years, subsequently updated every 5 years. (vi) Consolidated nominal value after the repurchase of securities by EDP - Energias de Portugal, S.A. (see note 20). EDP Group has various credit facilities it uses for liquidity management. EDP Group has short-term credit facilities of 231,000 thousand Euros, indexed to Euribor for the agreed period of use with spread conditions agreed in advance, and with a firm underwriting commitment, which as at 31 December 2016 are totally available. Also EDP Group has Commercial Paper programs of 100,000 thousand Euros with guaranteed placement, which as at 31 December 2016 are available in 40,000 thousand Euros. EDP Group has a medium term Revolving Credit Facility (RCF) of 3,150 million Euros, with a firm underwriting commitment and maturing in 2019, which as at 31 December 2016 is totally available, and a RCF of 500,000 thousand Euros, with a firm underwriting commitment and maturing in 2020, which as at 31 December 2016 are available in 300,000 thousand Euros. 51 367
As G4-PR5 at 31 December 105 2016, future debt and borrowing payments and interest by type of loan and currency are analysed as follows: Marketing Communications Following Thousand G4-PR6 Euros Dec 2017 Não Dec aplicável. 2018 Dec 2019 Dec 2020 Dec 2021 years Total Bank G4-PR7 loans: Não material Euro Customer Privacy 336,123 293,992 106,735 1,960,216 94,363 370,144 3,161,573 Brazilian Real 117,289Informação 144,751 disponível no 164,726 Relatório de Abordagem 71,869 de Gestão à 64,645 263,485 826,765 US Dollar 6,274-331,559 - - - 337,833 Other G4-PR8 107 22,076 20,332 21,954 23,444 25,800 100,947 214,553 Compliance 481,762 459,075 624,974 2,055,529 184,808 734,576 4,540,724 Bond loans: Euro G4-PR9 107 1,137,754 168,500 654,094 1,078,826 594,951 R 4,093,404 7,727,529 Brazilian Access Real 202,283 268,441 174,740 102,680 104,773 45,488 898,405 US Dollar 54,760Informação 502,534 disponível no 1,092,120 Relatório de Abordagem 708,027 de Gestão à 704,715-3,062,156 1,394,797 939,475 1,920,954 1,889,533 1,404,439 4,138,892 11,688,090 Hybrid EU26 Bond: Euro 32,140 - - - - 739,168 771,308 EU27 75 32,140 - - - - 739,168 771,308 EU28 74 e 75 Commercial EU29 paper: 74 e 75 Euro EU30 72 556,722 - - - 200,000-756,722 US Provision Dollar Of Information 2,842-237,169 - - - 240,011 559,564Informação disponível - no 237,169 Relatório de Abordagem de -Gestão à 200,000-996,733 Other loans: Euro 1,819 70 50 - - - 1,939 Brazilian Real 6,321 2,538 2,109 956 497 15,461 27,882 Cumprimento Total R Reasonable Verification 8,140 2,608 2,159 956 497 15,461 29,821 Cumprimento Parcial imited Verification Não disponível 2,476,403 * Specific 1,401,158 indicator for this 2,785,256 sector 3,946,018 1,789,744 5,628,097 18,026,676 As at 31 December 2015, future debt and borrowing payments and interest by type of loan and currency are analysed as follows: Following Thousand Euros Dec 2016 Dec 2017 Dec 2018 Dec 2019 Dec 2020 years Total Euro 392,938 333,317 316,389 122,639 1,614,446 584,466 3,364,195 Brazilian Real 77,537 117,088 156,781 108,396 72,016 279,978 811,796 US Dollar 3,303 - - 481,046 - - 484,349 Other 43,911 39,451 37,634 38,392 37,264 218,950 415,602 517,689 489,856 510,804 750,473 1,723,726 1,083,394 5,075,942 Bond loans: Euro 2,462,908 1,031,632 417,185 652,675 1,078,639 2,828,942 8,471,981 Brazilian Real 124,920 153,562 147,847 79,275 30,563 21,206 557,373 US Dollar 64,057-917,129 1,082,114 684,508 980,898 3,728,706 2,651,885 1,185,194 1,482,161 1,814,064 1,793,710 3,831,046 12,758,060 Hybrid Bond: Euro 11,785 - - - - 739,147 750,932 11,785 - - - - 739,147 750,932 Euro 420,636 - - - - - 420,636 US Dollar - - - 229,632 - - 229,632 420,636 - - 229,632 - - 650,268 Other loans: Euro 9,191 1,221 - - - - 10,412 Brazilian Real 5,478 2,710 1,985 1,644 727 12,382 24,926 14,669 3,931 1,985 1,644 727 12,382 35,338 3,616,664 1,678,981 1,994,950 2,795,813 3,518,163 5,665,969 19,270,540 Some of the loans contracted by the EDP Group, mainly debt issued under the EMTN programme, include some usual clauses in this type of operations, namely, "change-of-control", "negative pledge", "pari-passu" and "cross-default" clauses, each one only applicable under a restricted set of circumstances. The Group has project finance loans with the usual guarantees for such loans, namely pledges or promissory pledges over shares, bank accounts and assets relating to the projects. As at 31 December 2016 and 31 December 2015 these loans amounted to 1,100,951 thousand Euros and 1,609,375 thousand Euros, respectively (see note 44). 160 368
The fair value of EDP Group s debt is analysed as follows: Dec 2016 Dec 2015 Carrying Market Carrying Market Thousand Euros amount value amount value Debt and borrowings - Non-Current 15,550,273 16,355,711 15,653,876 16,291,289 Debt and borrowings - Current 2,476,403 2,242,288 3,616,664 3,397,597 18,026,676 18,597,999 19,270,540 19,688,886 In accordance with accounting policies - note 2 d) and f), the financial liabilities whose risks are being hedged by derivative financial instruments and that comply with hedge accounting requirements of IAS 39, are accounted at fair value. The financial liabilities are booked at amortised cost. For fair value of debt purposes, the Hybrid bond was valued considering the maturity of the first call date (March 2021). 369