operating wind farms in Germany for a total capacity of 5 MW.
The (29,067) thousand euro amortization of technical facilities mainly involves the following:
wind farms in France (including Breeze Two Energy) €(6,184) K
wind farms in Germany (including Breeze Two Energy) €(21,704) K
wind farms in Italy €(1,164) K
NOTE 15 IMPAIRMENT ON GOODWILL, INTANGIBLE AND TANGIBLE ASSETS
The methodology used for impairment tests, as well as assumptions, are described in note 2.8 “Impairment”. A summary of provisions/reversals by IGU is shown in note 9.5.
Due to the absence of an indication of impairment, as well as the recent assessment of Breeze Two Energy’s wind farms (see note 6 “Business combination”), those wind farms were not subject to an impairment test as at December 31, 2013, nor to a sensitivity analysis.
Sensitivity analysis
The sensitivity analysis was done by intersecting two axes:
one for the Group’s activity: change in wind hours (P90 to P50) used for each farm in operation;
one outside the Group: change by ± 1 point in the discount rates used.
The amount highlighted below represents the depreciation recorded as at December 31, 2013 following the impairment tests. The other amounts indicate the net depreciations that the Group would have recorded if the discount rate and/or wind hour assumptions had varied.
Sales of electricity for own account IGU – France
The threshold for switching from an impairment to a reversal would be reached if the discount rate was reduced by 176 basis points. Sales of electricity for own account IGU – Germany
Change in discount rate P90 P75 P50
1% (4,068) (1,787) (944)
0% (1,809) (859) (496)
-1% (739) (387) (6)
Change in wind hours
Change in discount rate P90 P75 P50
1% (7,050) (3,240) (322)
0% (4,272) (525) -
-1% (2,574) - -
5.
FINANCIAL STATEMENTS
Sales of electricity for own account IGU – Italy
The threshold for triggering an impairment would be reached:
if the discount rate was increased by 9 basis points, or
if the wind hours were at an intermediate level between P90 and P75. Sales of electricity for own account IGU – Morocco
The threshold for triggering an impairment would be reached if the discount rate was increased by 388 basis points. Non-wind activity IGU - Germany
The threshold for switching from an impairment to a reversal would be reached:
if the discount rate was reduced by 105 basis points, or
if the sun exposure was at an intermediate level between P75 and P50. Development, construction, sale IGU - France
For this IGU, the threshold for triggering an impairment is an increase of more than 610 basis points in the discount rate used for the sensitivity test.
Development, construction, sale IGU – Germany
For this IGU, the threshold for triggering an impairment is an increase of more than 9 basis points in the discount rate used for the sensitivity test. A variation of 100 basis points would lead to recognition of goodwill impairment in the amount of (5,831) thousand euros.
Change in discount rate P90 P75 P50
1% (6,507) (2,517) (487)
0% (3,820) - -
-1% (1,290) - -
Change in wind hours
Change in discount rate P90 P75 P50
1% (324) - -
0% - - -
-1% - - -
Change in wind hours
Change in discount rate P90 P75 P50
1% (2,098) (1,002) (572)
0% (1,681) (536) (86)
-1% (1,223) (26) 446
FINANCIAL STATEMENTS
5.
Development, construction, sale IGU - Italy
The IGU was partially subject to an impairment test based on its future cash flows. Sensitivity to the assumptions selected is as follows:
The threshold for switching from an impairment to a reversal would be reached if the discount rate was reduced by 216 basis points. As at the end of the period, after the impairment test, the net book value of assets in this IGU was 6,374 thousand euros.
NOTE 16 FINANCIAL ASSETS
Schedule of financial assets as at December 31, 2013
Schedule of financial assets as at December 31, 2012
Securities available for sale came to 3,186 thousand euros as at December 31, 2013, compared to 7,146 thousand euros as at December 31, 2012. As at the closing of the fiscal year, the Group adjusted the amount of these equity investments in compliance with their fair value.
Receivables from equity investments and loans mainly concern advances made to the companies consolidated using the proportionate consolidation method:
wind farm in Italy €4,297 K
investment vehicle (TUIC) €2,625 K
The “Loans” item includes in particular loans granted to clients of THEOLIA Naturenergien as part of the “sale of wind farms” business segment. As at the closing of the fiscal year, the net value of these loans came to 429 thousand euros compared to 592 thousand euros at the previous closing.
Change in discount rate P90 P75 P50
1% (8,602) (7,469) (6,133)
0% (7,404) (6,109) (4,685)
-1% (5,939) (4,562) (3,038)
Change in wind hours
(in thousand euros) Less than 1 year 1 to 5 years More than 5 years TOTAL
Securities av ailable for sale - 2,868 318 3,186
Other financial assets
Receiv ables from equity inv estments - - 4,411 4,411
Loans - 90 3,183 3,273
Other non-current receiv ables 186 1,000 - 1,186
Deposits and guarantees 18 120 807 945
FINANCIAL ASSETS 204 4,078 8,719 13,002
(in thousand euros) Less than 1 year 1 to 5 years More than 5 years TOTAL
Securities av ailable for sale 8 6,480 658 7,146
Other financial assets
Receiv ables from equity inv estments - - 6,510 6,510
Loans 19 133 3,188 3,340
Other non-current receiv ables 28 - - 28
Deposits and guarantees 4,514 731 229 5,474
5.
FINANCIAL STATEMENTS
Equity swap contract
In June 2012, THEOLIA implemented, with Credit Suisse, a dynamic management mechanism for a part of its cash based on a swap contract relating to its OCEANEs. A part of the Group's cash, i.e. 5,000 thousand euros, was allocated as a guarantee of this mechanism and registered in the “Deposits and guarantees” item of current financial assets. As at the end of fiscal year 2012, this asset showed an unrealized loss of 495 thousand euros, i.e. a net value of 4,505 thousand euros.
In November 2013, the Group ended the contract, asking Credit Suisse to unwind its positions. Cash released was classified under the “Cash and cash equivalents” item.
NOTE 17 WORKING CAPITAL REQUIREMENTS
17.1 Change in WCR
Working capital requirements, like for like, were reduced by 6,872 thousand euros over 2013. This change can be explained primarily by the following elements:
the reduction in inventories, in the amount of 3,690 thousand euro, is the result of the recognition of significant impairments on some Italian projects; and
excluding the scope effect, the positive change in trade receivables between the beginning and the closing of the fiscal year mainly results from payments received on long-outstanding receivables from the Operation and Development, construction, sale activities.
17.2 Inventories
Inventories mainly include:
development costs incurred prior to applying for building permits; and
components and parts. (in thousand euros)
Balance sheet as at 2012/12/31 Balance sheet as at 2013/12/31 Change in working capital requirements (Balance sheet) Presentation reclassifications Change in consolidated scope Currency translation adjustments Other reclassifications Change in working capital requirements (Cash flow statement)
Inv entories and w ork in progress (net) 14,934 5,078 9,857 (6,110) (57) 3,690
Trade receiv ables (net) 21,221 26,170 (4,948) 415 7,023 (13) 2,478
Trade pay ables and other operating pay ables (17,703) (19,153) 1,450 (297) (6,375) 8 (388) (5,603)
Other receiv ables 13,579 10,562 3,017 (153) 118 (7) (132) 2,843
Other liabilities (4,384) (5,298) 915 (415) (407) 9 36 137
Assets - adjustment accounts 1,767 3,752 (1,985) 5,464 (3) 13 3,489
Liabilities - adjustment accounts (223) (53) (171) 4 5 (162)
TOTAL 29,192 21,058 8,136 (6,561) 5,827 (63) (466) 6,872
(in thousand euros) 2013/12/31 2012/12/31
Wind projects and farms 15,674 23,900
Turbine components and other parts 602 1,483
Depreciation (11,198) (10,449)