Balance sheet

The abridged balance sheet as at 31 December 2016 is shown below.

The following notes explain the significant changes in the balance sheet as at 31 December 2016 relative to the situation as at 31 December 2015. Detailed information on balance sheet items is given in the financial statements.

Non-current assets

Non-current assets as at 31 December 2016 increased by over €600 million compared with 31 December 2015. This increase is mainly a consequence of the purchase of networks in Friesland and the Noordoostpolder on 1 January 2016. In addition there was higher capital expenditure on the networks and meters in 2016 in relation to the associated depreciation charges.

Current assets

Current assets were down, at €400 million, representing a slight fall of €6 million compared with 2015 which is mainly accounted for by the reduction in net cash and cash equivalents and current deposits.

Non-current assets held for sale

As noted above, since 24 March 2015 Endinet has been classified as 'held for sale', meaning that all its assets and liabilities have been reclassified since that date to non-current assets and liabilities held for sale on the balance sheet. This also applies to goodwill of €36 million relating to Endinet on Alliander’s balance sheet. These balance sheet items at year-end 2015 were as follows:

Assets and liabilities held for sale

Equity

Shareholders' equity as at 31 December 2016 increased by €177 million compared with the level as at 31 December 2015, to €3,864 million. This increase is mainly accounted for by the net profit for 2016, amounting to €282 million, less the dividend distribution in 2016 relating to 2015 (€85 million). A summary of the movements can be found in note [12] of the financial statements.

Current and non-current liabilities

The amount of non-current liabilities was up by more than €300 million compared with 31 December 2015. The increase is due mainly to the issue of €300 million of green bonds in April 2016.

The short-term liabilities as at 31 December 2016 were down by over €400 million compared with the position as at year-end 2015, at €563 million, as a result of the contractual redemption of part of EMTN portfolio (€400 million nominal) in 2016.

Liabilities held for sale

The liabilities held for sale as at year-end 2015 related entirely to the disposal of Endinet, with effect from 1 January 2016.

Shown below is a summary of the cash flow statement for 2016.

Cash flows

Consolidated cash flow statement

The cash flow from operating activities in 2016 amounted to €376 million, compared with €513 million in 2015. The decrease of €137 million compared with 2015 is largely accounted for by a fall in the operating profit, partly because of the reduction in the regulated tariffs (€55 million) and the increase in sufferance tax charges (€39 million). In addition, the amount of corporate income tax paid in 2016 was €27 million higher as a result of prior-year assessments received and paid.

The cash outflow from investing activities in 2016 amounted to €232 million, which is €260 million lower than in 2015. The reduced cash outflow overall in 2016 is explained by the cash inflow as a result of the exchange of service areas (€359 million). This was partly offset by higher capital expenditure (€680 million in 2016 compared with €575 in 2015). The increase of €105 million relates chiefly to the electricity networks and meters as a result of the large-scale roll-out of smart meters. Third-party contributions to investments in 2016 amounted to €99 million, which is slightly higher than in the previous year (€85 million).

Investments

Despite a decrease in capital expenditure in gas networks, the level of capital expenditure has risen by €102 million relative to 2012, an increase of 18%. Apart from the increased investments in the electricity networks and smart meters, there has been an increase in other investments as well, including higher levels of investment in telecommunication networks (both optical fibre networks and mobile data networks). In 2015 and 2016, there was also investment in buildings connected with the renovation of the offices in Duiven and Arnhem, with their sustainable and energy-saving credentials.

The cash flow from financing activities in 2016 amounted to €185 million negative (2015: €99 million negative). The net negative cash flow in 2016 is a consequence of the redemption of €100 million of EMTN loans plus dividend payments of €85 million. The negative cash flow in 2015 was mainly accounted for by the repayment of Euro Commercial Paper (ECP loans) of €112 million set against which were the proceeds from the repayment on maturity of a bond (€141 million).

Free cash flow

The free cash flow in 2016 totalled €144 million, compared with an inward free cash flow in 2015 of €21 million. The increase of €123 million compared with 2015 was due entirely to the cash flow from the exchange of service areas less the higher capital expenditure in 2016 as a result of the large-scale roll-out of smart meters in particular.