Sale of Endinet and purchase of the networks in Friesland and the Noordoostpolder

The transaction under which the Enexis networks in Friesland and the Noordoostpolder were purchased from Enexis and at the same time the networks in the Eindhoven and Zuidoost-Brabant region (Endinet Groep B.V) were sold to Enexis took effect on 1 January 2016. This transaction involved 51,000 electricity and 196,000 gas connections in Friesland and 28,000 electricity and 27,000 gas connections in the Noordoostpolder. The sale of Endinet involved 108,000 electricity and 398,000 gas connections.

The networks in Friesland and the Noordoostpolder are in the middle of Liander’s service area and this makes more efficient operations possible. The acquisition is also entirely in line with the strategy of having a single network operator for both electricity and gas in any one area or region.

Sale of Endinet

The book profit on the sale of Endinet on 1 January 2016 was €176 million and this sum has been recognised in the 2016 income statement as profit after tax from discontinued operations.

With respect to the 2015 financial year, coincidentally with the signing of the heads of agreement, in compliance with IFRS 5, Endinet was classified in Alliander's consolidated balance sheet as being held for sale with effect from 24 March 2015, with the corresponding classification of discontinued operations being applied in the consolidated income statement. The held-for-sale classification means that, with effect from 24 March 2015, all of Endinet's assets and liabilities carried in Alliander's consolidated balance sheet were reclassified to the 'assets held for sale' and 'liabilities connected with the assets held for sale' balance sheet items. Depreciation charges relating to Endinet's assets also ceased with effect from 24 March 2015. Furthermore, all intercompany accounts between Alliander and Endinet were eliminated prior to recognition as 'held for sale' and 'discontinued operations'.

Classification as discontinued operations means that the Endinet group’s net result is shown as a separate item in Alliander's income statement. It also means that Endinet is no longer included in the individual items of Alliander’s 2015 income statement.

Purchase of shares in AEF B.V.

The definitive acquisition price of the networks in Friesland and the Noordoostpolder (AEF B.V.) was based on the 2015 figures of AEF B.V. and included settlement based on a fair value of €335 million. The fair value was established using medium and long-term cash flows, regulatory developments and any outperformance effects and synergy benefits. A number of small adjustments have been made to the fair value compared with the 2016 half-year report. Allocation of the purchase price resulted in a net asset value of €326 million, with goodwill of €9 million. See note [1] to the financial statements for further disclosures.