21. Net revenue

As of the financial year 2018, the company now applies the IFRS 15 standard ‘Revenue from contracts with customers’. For more information on the implementation and application of this standard, please refer to the sections ‘Basis of preparation’ and ‘Accounting policies’.

Segmentation of net revenues

Gasunie’s net revenues are divided into two categories. The first is revenue from regulated transport and related services. This revenue is determined every 5 years by the regulator in the Netherlands and Germany. The second segment is non-regulated services, the revenues of which are determined by tariffs and volumes resulting from market mechanism.

The revenue from regulated services is generated by the Gasunie Transport Services and Gasunie Deutschland segments. The revenue from other services is generated by the Participations segment. Inter-segment service revenues are eliminated from the consolidation and presented separately to ensure consistency of segment information. For details, refer to note 29.

The following table shows the revenues in both categories:


In millions of euros	2018	2017
Revenu streams
Regulated services	1152.1	1,153.1
Other services	133.8	122.5
Inter-segment	‑38.6	‑34.4

Total	1,247.3	1,241.2

Contract liabilities

At year-end 2018, Gasunie's contract liabilities amounted to € 50.3 million. These commitments are related to customer prepayments for transport and storage services to be delivered. The following table shows the change in these contract liabilities.


In millions of euros	2018	2017

Balance as at 1 January	50.9	52.3

Recognised in profit and loss	‑2.5	‑3.3
Accrued interest	1.9	1.9

Balance as at 31 December	50.3	50.9

At year-end 2018, € 3.8 million of the contract liabilities had a term shorter than one year (year-end 2017: € 3.8 million). The remainder of the liabilities has a term of more than 5 years.

22. Staff costs


In millions of euros	2018	2017

Salaries	237.4	159.1
Social security expenses	17.8	17.3
Pension costs	32.1	29.7

Total staff costs	287.3	206.1

The salary costs include the costs for the restructuring provision of € 43.3 million and the costs of buying out the employee benefit schemes of € 39.3 million.

The ‘pension costs’ of defined contribution pension plans total € 24.0 million (2017: € 25.0 million).

Remuneration for members of the Executive Board and Supervisory Board

I. Members of the Executive Board


In €	Salary	Variable remuneration	Fixed & variable remuneration	Deferred remuneration	Social security expenses	Other benefits	Total

2018
Executive Board

J.J. Fennema, chair	310,291	31,029	341,320	72,843	9,492	22,939	446,594
I.M. Oudejans	286,333	28,633	314,966	67,356	9,492	21,398	413,212
U. Vermeulen	248,223	24,822	273,045	58,629	9,492	12,566	353,732
B.J. Hoevers	225,281	22,528	247,809	53,376	9,492	2,991	313,668

Total	1,070,128	107,012	1,177,140	252,204	37,968	59,894	1,527,206

The variable remuneration shown in the table above is based on the realisation of agreed targets during the financial year. The agreed targets comprise both collective Gasunie targets and long-term strategic targets, as described in the section entitled Remuneration policy for the Executive Board. The collective Gasunie targets relate to achieving agreed financial and operational results over 2018.

As of 1 July 2013, the pension scheme of employees of N.V. Nederlandse Gasunie was changed. The new pension scheme is a defined contribution plan, which means that the company is committed to paying a fixed, predetermined contribution. This contribution is based on a conditional average-salary scheme. As of 1 July 2013, this new pension scheme also applies to members of the Executive Board.


In €	Salary	Variable remuneration	Fixed & variable remuneration	Deferred remuneration	Social security expenses	Other benefits	Total

2017
Executive Board

J.J. Fennema, chair	303,018	42,423	345,441	64,288	9,059	22,404	441,192
I.M. Oudejans	279,621	39,147	318,768	59,492	9,059	20,900	408,219
A.J. Krist 1)	60,601	10,017	70,618	12,966	2,265	8,179	94,028
U. Vermeulen	242,405	33,937	276,342	51,863	9,059	16,426	353,690
B.J. Hoevers 2)	66,667	9,333	76,000	14,390	3,020	1,550	94,960

Total	952,312	134,857	1,087,169	202,999	32,462	69,459	1,392,089

1) Until 1 April 2017, 2) From 1 September 2017

II. Members of the Supervisory Board
The remuneration for members of the Supervisory Board (SB) is determined by, amongst other things, their participation in the various committees: the Audit Committee (AC) and the Remuneration, Selection and Appointment Committee (RAC). In addition, the premium paid with regard to the Health Insurance Act (HIA) is included in the remuneration.


In €	SB	AC	RAC	HIA premium	Total

2018
R. de Jong RA, chair	31,652	3,957	2,116		37,725
Drs. D.J. van den Berg	23,216		2,116	1,748	27,080
Mr. M.M. Jonk	21,104		2,116		23,220
Drs. M.J. Poots-Bijl RC	21,104	5,276		1,820	28,200
Dr. W.J.A.H. Schoeber	21,104	5,276			26,380
Ir. A.S. Visser 1)	10,552	2,638			13,190
Ir. J.P.H.J. Vermeire 2)	6,669	1,667			8,336

Total	135,401	18,814	6,348	3,568	164,131

1) Untill 1 July 2018, 2) From 24 April 2018


In €	SB	AC	RAC	HIA premium	Total
2017
R. de Jong RA, chair	30,908		2,064		32,972
Drs. D.J. van den Berg	22,668		2,064	1,645	26,377
Mr. M.M. Jonk	20,608		2,064		22,672
Drs. M.J. Poots-Bijl RC	20,608	5,152		1,713	27,473
Dr. W.J.A.H. Schoeber	20,608	5,152		1,713	27,473
Ir. J.P.H.J. Vermeire	20,608	5,152		1,713	27,473

Total	136,008	15,456	6,192	6,784	164,440

23. Other operating expenses


In millions of euros	2018	2017

Costs of subcontracted work and other external costs	201.3	218.4
Cost of network management	131.8	110.2
Other operating expenses	48.6	45.6

Total other operating expenses	381.7	374.2

The additions to and release of the provision for abandonment costs and redevelopment totalling € 1.0 million (2017: € 1.1 million) and the additions to the provision for obsolescent inventories amounting to € 3.1 million (2017: € 2.7 million) are included in ‘Other operating expenses’.

24. Finance income


In millions of euros	2018	2017

Interest income	2.9	7.8
Foreign exchange results	0.2	0.1

Total finance income	3.1	7.9

Interest income relates to loans granted and receivables.

25. Finance expenses


In millions of euros	2018	2017

Interest expenses	75.5	84.5
Foreign exchange results	-	0.5
Other finance expenses	1.4	2.3

Total finance expenses	76.9	87.3

The interest expenses on financing liabilities stated at amortised cost amount to € 75.5 million (2017: € 82.3 million). Interest income relating to current financing liabilities amounts to € 1.3 million (2017: € 1.0 million). Of the interest expenses, a total of € 3.8 million (2017: € 3.1 million) was capitalised in 2018, based on a weighted average interest rate of 2.4 % (2017: 2.6%).

26. Taxes

The taxes on the result in the consolidated profit and loss account comprise the following components:


In millions of euros	2018	2017

Corporate income tax payable for the financial year	‑3.7	56.8
Corporate income tax payable for the previous financial years	0.2	‑7.9
Movement in deferred taxation	‑3.3	‑7.4

Total tax charge	‑6.8	41.5

The movement in deferred taxation is specifically related to the change in the Dutch corporate income tax rate, effective from 2020.

The reconciliation between the effective tax rate and the applicable tax rate for the consolidated financial statements is as follows:


In percentages	2018	2017

Profit and loss account
Applicable tax rate, the Netherlands	25.0	25.0
Effect of tax rates in other countries	‑0.1	‑1.9
Prior-year adjustments	0.2	‑5.1
Effect of tax rate change on deferred taxation	‑23.4	0.5
Effect of innovation box	‑0.7	‑1.1
Other differences	‑3.1	‑3.6

Effective rate	‑2.1	13.8

Deferred taxation
Applicable rate (for subsequent financial years)	25,0 - 20,5*	25.0
Effective rate (for subsequent financial years)	25,0 - 20,5*	25.0

* From 2019 to 2021, this rate will decrease in increments from 25% to 20.5%

The other differences relate to non-taxable amounts as a result of the application of the participation exemption.

27. Number of employees

The average number of employees in full-time equivalents in 2018 totalled 1,742 (2017: 1,772). At year-end 2018, the company employed 1,722 (2017: 1,763) full-time equivalents.

28. Dividend paid and proposed

The Executive Board proposes that € 97.2 million of the profit for 2018 be added to the other reserve and € 228.0 million be distributed to the shareholder. The dividend per share is € 150.7 thousand.

This dividend proposal has not yet been recorded in the balance sheet as at 31 December 2018 or in the notes. The profit for 2017 amounted to € 259.5 million (under IFRS 15, this amounted to € 257.2 million), of which € 258.8 million was paid out as dividend in 2018.

29. Information about reportable segments

The information is segmented in line with the Group’s activities. The operating segments reflect the management structure of the Group. The following segments are distinguished:

Gasunie Transport Services
This segment covers network management in the Netherlands and is responsible for managing transport, developing the pipeline network and related plants, as well as promoting market mechanisme. This segment comprises the entity Gasunie Transport Services B.V.
Gasunie Deutschland
This segment covers network management in Germany and is responsible for managing transport, developing the pipeline network and related plants, as well as promoting market mechanisme.
Participations
This segment focuses on facilitating access to the new gas flows for north-western Europe using an LNG connection and long-distance pipelines, and on utilising the geological infrastructure for the purpose of storing natural gas. Participation in national and international projects relating to the natural gas infrastructure in the Netherlands and Germany is another activity of this segment. This segment also includes joint ventures relating to pipelines that connect the Gasunie transport network with foreign markets, such as the BBL pipeline to the United Kingdom.

The accounting policies used for these segments are the same as those applied to the consolidated and company financial statements.

The assets, liabilities, revenues and results of a segment comprise both items directly related to the segments and items that can reasonably be attributed to the segments. Transaction prices for inter-segment transactions are determined at arm’s length.

Allocated assets are tangible fixed assets, intangible fixed assets, investments in joint ventures, investments in associates and other equity interests. Unallocated assets relate to deferred tax assets and current assets.


In millions of euros	Assets
	31 Dec. 2018	31 Dec. 2017*
Segments
- Gasunie Transport Services	6,530.7	6,572.4
- Gasunie Deutschland	1,403.8	1,292.4
- Participations	1,336.3	1,334.7

Segments total	9,270.8	9,199.5

Unallocated assets	625.4	650.2

Total consolidated assets	9,896.2	9,849.7