CEZ A.S.

Quarterly Report • Aug 13, 2019

CEZ GROUP

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

PREPARED IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS AS OF JUNE 30, 2019

CEZ GROUP CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2019

in CZK Millions

	Note	June 30, 2019	December 31, 2018
ASSETS:
Plant in service Less accumulated depreciation and impairment		841,912 (457,831)	830,955 (445,926)
Net plant in service		384,081	385,029
Nuclear fuel, at amortized cost Construction work in progress, net		14,201 18,560	14,427 16,452
Total property, plant and equipment		416,842	415,908
Investments in associates and joint-ventures Restricted financial assets, net Other non-current financial assets, net Intangible assets, net Deferred tax assets		3,301 20,777 10,264 32,755 1,002	3,361 18,834 9,948 31,127 1,269
Total other non-current assets		68,099	64,539
Total non-current assets		484,941	480,447
Cash and cash equivalents, net Trade receivables, net Income tax receivable Materials and supplies, net Fossil fuel stocks Emission rights Other current financial assets, net Other current assets, net Assets classified as held for sale	5	8,266 64,886 1,945 9,676 1,243 17,528 60,144 13,167 17,008	7,278 72,234 352 8,737 1,066 16,655 93,303 9,874 17,497
Total current assets		193,863	226,996
Total assets		678,804	707,443

CEZ GROUP CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2019

continued

		June 30,	December 31,
	Note	2019	2018
EQUITY AND LIABILITIES:
Stated capital		53,799	53,799
Treasury shares		(2,902)	(3,534)
Retained earnings and other reserves		192,087	184,456
Total equity attributable to equity holders of the parent		242,984	234,721
Non-controlling interests		4,581	4,560
Total equity		247,565	239,281
Long-term debt, net of current portion	7	124,668	142,440
Provisions		77,304	75,798
Other long-term financial liabilities		11,633	15,054
Deferred tax liability		21,150	16,699
Other long-term liabilities		31	31
Total non-current liabilities		234,786	250,022
Short-term loans	8	1,945	11,783
Current portion of long-term debt	7	25,661	6,743
Trade payables		54,355	63,093
Income tax payable		154	253
Provisions		9,682	12,323
Other short-term financial liabilities		91,517	110,287
Other short-term liabilities		7,698	7,461
Liabilities associated with assets classified as held for	5	5,441	6,197
sale
Total current liabilities		196,453	218,140
Total equity and liabilities		678,804	707,443

CEZ GROUP CONSOLIDATED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2019

in CZK Millions

	Note	1-6/2019	1-6/2018 *	4-6/2019	4-6/2018 *
Sales of electricity, heat, gas and coal Sales of services and other revenues Other operating income		64,575 33,423 2,030	56,470 28,443 1,339	29,680 17,335 1,164	26,362 12,955 582
Total revenues and other operating income	9	100,028	86,252	48,179	39,899
Gains and losses from commodity derivative trading Purchase of electricity, gas and other		2,169	394	402	(1,027)
energies Fuel and emission rights Services Salaries and wages Material and supplies		(27,811) (9,810) (13,017) (13,264) (4,423)	(23,677) (7,745) (11,269) (11,831) (3,785)	(13,402) (4,441) (6,973) (6,953) (2,407)	(11,424) (3,959) (5,432) (6,122) (1,917)
Capitalization of expenses to the cost of assets and change in own inventories Depreciation and amortization Impairment of property, plant and		1,588 (14,204)	1,510 (14,096)	294 (7,215)	922 (6,967)
equipment and intangible assets Impairment of trade and other receivables Other operating expenses		(826) (101) (3,227)	(157) (199) (2,720)	(314) (119) (1,742)	(162) (189) (1,344)
Income before other income (expenses) and income taxes		17,102	12,677	5,309	2,278
Interest on debt Interest on provisions Interest income Share of profit (loss) from associates and		(2,698) (933) 210	(2,492) (900) 125	(1,334) (468) 100	(1,275) (451) 85
joint-ventures Impairment of financial assets Other financial expenses Other financial income		(88) 31 (388) 401	(283) 3 (494) 687	(25) (6) (361) 214	(254) 2 (244) 279
Total other income (expenses)		(3,465)	(3,354)	(1,880)	(1,858)
Income before income taxes		13,637	9,323	3,429	420
Income taxes		(2,416)	(1,608)	(507)	40
Net income		11,221	7,715	2,922	460
Net income attributable to:
Equity holders of the parent Non-controlling interests		11,133 88	7,509 206	2,935 (13)	388 72
Net income per share attributable to equity holders of the parent (CZK per share):
Basic Diluted		20.8 20.8	14.0 14.0	5.5 5.5	0.7 0.7

* The way of presentation was changed for 2018 year-end (see Note 2.2.2). The prior year figures were changed accordingly to provide comparative information on the same basis.

CEZ GROUP CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2019

in CZK Millions

	Note	1-6/2019	1-6/2018	4-6/2019	4-6/2018
Net income		11,221	7,715	2,922	460
Change in fair value of cash flow hedges Cash flow hedges reclassified to		8,308	(7,211)	(683)	(8,022)
statement of income Change in fair value of debt instruments		4,265 400	1,720 (513)	2,185 367	205 (337)
Disposal of debt instruments Translation differences – subsidiaries Translation differences – associates and		1 (963)	- 581	- (493)	- 860
joint-ventures Disposal of translation differences Share on other equity movements of		20 -	101 12	(15) -	90 -
associates and joint-ventures Deferred tax related to other		4	-	8	-
comprehensive income	10	(2,464)	1,142	(355)	1,541
Net other comprehensive income that may be reclassified to statement of income or to assets in subsequent periods		9,571	(4,168)	1,014	(5,663)
Re-measurement gains (losses) on defined benefit plans		2	-	-	-
Net other comprehensive income not to be reclassified from equity in subsequent periods		2	-	-	-
Total other comprehensive income, net of tax		9,573	(4,168)	1,014	(5,663)
Total comprehensive income, net of tax		20,794	3,547	3,936	(5,203)
Total comprehensive income attributable to:
Equity holders of the parent Non-controlling interests		20,747 47	3,275 272	4,000 (64)	(5,357) 154

CEZ GROUP CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 2019

in CZK Millions

Equity Transla Cash flow Debt instruments Non Stated Treasury tion hedge instru and other Retained controlling capital shares difference reserve ments reserves earnings Total interests December 31, 2017 53,799 (4,077) (11,906) (7,757) 678 570 218,711 250,018 4,304 Adoption of IFRS 9 and - - 143 - - (493) 2,818 2,468 (24) IFRS 15 2.2 January 1, 2018 (restated) 53,799 (4,077) (11,763) (7,757) 678 77 221,529 252,486 4,280 Net income - - - - - - 7,509 7,509 206 Other comprehensive - - 628 (4,448) (414) - - (4,234) 66 income Total comprehensive income - - 628 (4,448) (414) - 7,509 3,275 272 Dividends - - - - - - (17,648) (17,648) (17) Sale of treasury shares - 526 - - - - (322) 204 - Share options - - - - - 17 - 17 - Transfer of exercised and forfeited share options - - - - - (29) 29 - - Acquisition of non controlling interests - - - - - - 8 8 (13) Sale of non-controlling interests - - - - - - - - 4 Put options held by non - - 2 - - - (2) - 1 controlling interests June 30, 2018 53,799 (3,551) (11,133) (12,205) 264 65 211,103 238,342 4,527	Note	Attributable to equity holders of the parent
										Total equity
										254,322
										2,444
										256,766
										7,715
										(4,168)
										3,547
										(17,665) 204 17
										-
										(5)
										4 1
										242,869

CEZ GROUP CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 2019

continued

	Note Attributable to equity holders of the parent
		Stated capital	Treasury shares	Transla tion difference	Cash flow hedge reserve	Debt instru ments	Equity instruments and other reserves	Retained earnings	Total	Non controlling interests	Total equity
January 1, 2019		53,799	(3,534)	(11,565)	(18,337)	388	113	213,857	234,721	4,560	239,281
Net income Other comprehensive		-	-	-	-	-	-	11,133	11,133	88	11,221
income		-	-	(902)	10,184	326	-	6	9,614	(41)	9,573
Total comprehensive income		-	-	(902)	10,184	326	-	11,139	20,747	47	20,794
Dividends Sale of treasury shares Share options	6	- - -	- 632 -	- - -	- - -	- - -	- - 16	(12,850) (388) -	(12,850) 244 16	(21) - -	(12,871) 244 16
Transfer of exercised and forfeited share options Put options held by non		-	-	-	-	-	(15)	15	-	-	-
controlling interests June 30, 2019		- 53,799	- (2,902)	(3) (12,470)	- (8,153)	- 714	- 114	109 211,882	106 242,984	(5) 4,581	101 247,565

CEZ GROUP CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2019

in CZK Millions

	Note	1-6/2019	1-6/2018
OPERATING ACTIVITIES:
Income before income taxes		13,637	9,323
Adjustments to reconcile income before income taxes to net cash provided by operating activities:
Depreciation and amortization		14,204	14,096
Amortization of nuclear fuel		2,048	1,949
(Gains) and losses on non-current asset retirements		(49)	(77)
Foreign exchange rate loss (gain)		300	395
Interest expense, interest income and dividend income		2,331	2,213
Provisions Impairment of property, plant and equipment and		(2,856)	(1,558)
intangible assets		826	157
Valuation allowances and other adjustments		4,874	1,733
Share of (profit) loss from associates and joint-ventures		88	283
Changes in assets and liabilities:
Receivables and contract assets		3,509	(7,002)
Materials, supplies and fossil fuel stocks		(1,132)	(506)
Receivables and payables from derivatives		2,735	477
Other assets		27	3,521
Trade payables		(7,899)	2,776
Other liabilities		232	(1,635)
Cash generated from operations		32,875	26,145
Income taxes paid		(1,890)	(2,066)
Interest paid, net of capitalized interest		(3,257)	(3,098)
Interest received		213	124
Dividends received		2	5
Net cash provided by operating activities		27,943	21,110
INVESTING ACTIVITIES:
Acquisition of subsidiaries, associates and joint
ventures, net of cash acquired	4	(2,538)	(289)
Disposal of subsidiaries, associates and joint-ventures,
net of cash disposed of		188	156
Additions to non-current assets, including capitalized
interest Proceeds from sale of non-current assets		(13,064) 2,335	(10,013) 1,675
Loans made		(101)	(8)
Repayment of loans		22	-
Change in restricted financial assets		(1,537)	(816)
Total cash used in investing activities		(14,695)	(9,295)

CEZ GROUP CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2019

continued

	Note	1-6/2019	1-6/2018
FINANCING ACTIVITIES:
Proceeds from borrowings Payments of borrowings Lease payments Proceeds from other long-term liabilities Payments of other long-term liabilities Dividends paid to Company's shareholders Dividends paid to non-controlling interests Sale of treasury shares Sale of non-controlling interests		43,221 (54,984) (357) 33 (38) (39) (15) 244 -	33,815 (45,827) - 20 (33) (44) (7) 204 5
Total cash used in financing activities		(11,935)	(11,867)
Net effect of currency translation and allowances in cash		(41)	58
Net increase in cash and cash equivalents		1,272	6
Cash and cash equivalents at beginning of period *		9,245	12,623
Cash and cash equivalents at end of period *		, 10,517	12,629
Supplementary cash flow information:
Total cash paid for interest		3,406	3,259

* Presented values of cash and cash equivalents contain also cash and cash equivalents included on the balance sheet on the line Assets classified as held for sale.

CEZ GROUP NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2019

1. The Company

ČEZ, a. s. ("ČEZ" or "the Company") is a Czech joint-stock company, owned 69.8% (70.1% of voting rights) at June 30, 2019 by the Czech Republic represented by the Ministry of Finance. The remaining shares of the Company are publicly held. The address of the Company's registered office is Duhová 2/1444, Praha 4, 140 53, Czech Republic.

The Company is a parent company of the CEZ Group ("the Group"). Main business of the Group is the production, distribution, trade and sale of electricity and heat, trade and sale of natural gas, coal mining and providing energy services.

2. Summary of Significant Accounting Policies

2.1. Financial Statements

The interim consolidated financial statements for the six months ended June 30, 2019 have been prepared in accordance with IAS 34 and have not been audited by an independent auditor. The interim consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statement as of December 31, 2018.

2.2. Changes in Accounting Policies

2.2.1. Adoption of New IFRS Standards in 2019

The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statement as of December 31, 2018, except for as follows.

As of January 1, 2019, the Group has adopted new International Financial Reporting Standard IFRS 16 Leases. The Group has adopted also other amendments and interpretations, which did not have material impact on Group's financial statements.

The Group used modified retrospective approach for application of IFRS 16.The comparable period was not be affected by adoption of this standard. As of January 1, 2019 was the impact on lease liabilities in amount of CZK 5,124 million. The lease liabilities are included in long-term debts (see Note 7).

In addition, the Group has increased assets and associated liabilities held for sale in connection with adoption of IFRS 16 as of January 1, 2019 by CZK 367 million.

2.2.2. Changes in the Presentation of the Financial Statements

The way of presentation of certain items in the statement of income was changed in consolidated financial statements as of December 31, 2018. The main goal of the changes was to enhance relevancy of information contained on the face of the financial statements in accordance with financial management of the Group and reflect the developments in the best practice of financial reporting in the industry with regard to all IFRS requirements. As a result, reclassifications for the prior period have been made to provide fully comparative information on the same basis. The following tables summarize the effect of reclassifications on prior period presented (in CZK millions):

	Reclassifications 1-6/2018
CONSOLIDATED STATEMENT OF INCOME:
Sales of electricity, heat, gas and coal Sales of services and other revenues Sales of electricity and related services Sales of gas, coal, heat and other revenues Other operating income	56,470 28,443 (67,445) (18,022) 507
Total revenues and other operating income	(47)
Gains and losses from commodity derivative trading Purchase of electricity, gas and other energies Fuel and emission rights Fuel Purchase power and related services Services Repairs and maintenance Capitalization of expenses to the cost of assets and change in own inventories Impairment of trade and other receivables Emission rights, net Other operating expenses	383 (23,677) (7,745) 5,763 26,327 (11,269) 1,699 1,510 (199) 1,597 5,658
Income before other income (expenses) and income taxes	-
Impairment of financial assets Other financial expenses Other operating income Foreign exchange rate gains (losses), net * Gain on sale of subsidiaries and joint-ventures *	3 (398) 2 395 (2)
Total other income (expenses)	-
Net income	-

* These items are not presented separately on the face of the financial statement.

3. Seasonality of Operations

The seasonality within the segments Generation - Traditional Energy, Generation - New Energy, Distribution and Sales usually takes effect in such a way that the revenues and operating profits of these segments for the 1st and 4th quarters of a calendar year are slightly higher than the revenues and operating profits achieved in the remaining period.

4. Changes in the Group Structure

Acquisitions of subsidiaries from third parties in the first six months of 2019

On January 1, 2019 the Group acquired a 100% interest in the company ITX MEDIA, a.s., which operates 22 heat pumps in two Teplice areas.

On January 7, 2019 the Group acquired a 100% interest (effective interest 95%) in German company H & R Elektromontagen GmbH.

On January 25, 2019 the Group acquired a 100% interest (effective interest 95%) in German company En.plus GmbH, which deals with designing and installation of air-conditioning and cooling equipments.

On May 15, 2019 the Group acquired a 100% interest (effective interest 95%) in German companies Hermos AG and Hermos Schaltanlagen GmbH (further also Hermos), that deliver solutions consisting of engineering, manufacturing of switchgears, software for automation systems and IT systems and from after-sale services.

On June 28, 2019 the Group acquired a 100% interest in the company HA.EM OSTRAVA, s.r.o., which supplies and installs technological equipment.

The fair values of acquired identifiable assets and liabilities and the purchase considerations have been stated provisionally and could be adjusted in the subsequent period. The following table presents the current best estimate of fair values of acquired identifiable assets and liabilities as of the date of acquisition (in CZK millions):

	Hermos	En.plus	Other	Total
Share of the Group being acquired	100%	100%	100%
Property, plant and equipment, net	74	18	16	108
Intangible assets, net	11	92	-	103
Other non-current assets	102	-	-	102
Cash and cash equivalents	157	-	17	174
Trade receivables, net	184	195	49	428
Contractual assets	331	29	-	360
Other current assets	37	3	7	47
Long-term provisions	(29)	-	-	(29)
Deferred tax liability	-	(28)	-	(28)
Short-term loans	(17)	(103)	(2)	(122)
Trade payables	(55)	(47)	(17)	(119)
Current provisions	(65)	(14)	(8)	(87)
Other current liabilities	(29)	(15)	(14)	(58)
Total net assets	701	130	48	879
Share of net assets acquired	,	,	,	,
	701	130	48	879
Goodwill	,	,	,	,
	1,541	222	73	1,836
Total purchase consideration	,	,	,	,
	2,242	352	121	2,715
Liabilities from acquisition of the subsidiary	-	(66)	-	(66)
Cash outflow on acquisition of the	,	,	,	,
subsidiary in 2019	2,242	286	121	2,649
Less: Cash and cash equivalents in the	,	,	,	,
subsidiary acquired	(157)	-	(17)	(174)
Cash outflow on acquisition of the	,	,	,	,
subsidiary in 2019, net	2,085	286	104	2,475

If the combinations had taken place at the beginning of the year 2019, net income for CEZ Group as of June 30, 2019 would have been CZK 11,236 million and the revenues and other operating income

from continuing operations would have been CZK 100,853 million. The amount of goodwill recognized as a result of the business combination comprises the value of expected synergies arising from the acquisition.

From the acquisition date, the newly acquired subsidiaries have contributed the following balances to the Group's statement of income (in CZK millions):

	Hermos	En.plus	Other	Total
Revenues and other operating income Income before other income (expense)	-	390	76	466
and income taxes Net income	- -	23 19	4 8	27 27
Net income attributable to: Equity holders of the parent Non-controlling interests	- -	18 1	8 -	26 1

The following table summarizes the cash flows related to acquisitions in the first six months of 2019 (in CZK millions):

Cash outflow on acquisitions of the subsidiaries	2,649
Cash outflow on investments in joint-ventures	2
Cash outflow on acquisitions of the subsidiaries where provisional
accounting was not completed yet	30
Payments of payables from acquisitions in previous periods	31
Less: Cash and cash equivalents acquired	(174)
Total cash outflows on acquisitions	2,538

5. Assets and Associated Liabilities Classified as Held for Sale

As of June 30, 2019 the Group performed an impairment test for any potential impairment loss related to assets and liabilities held for sale in the Bulgarian companies CEZ Razpredelenie Bulgaria AD, CEZ ICT Bulgaria EAD, CEZ Trade Bulgaria EAD, CEZ Bulgaria EAD, CEZ Elektro Bulgaria AD, Free Energy Project Oreshets EAD and Bara Group EOOD. The result of this test, reflecting the contractual sales price of EUR 335 million, was an impairment of assets in the amount of CZK 639 million, which was presented in the statement of income on the line Impairment of property, plant and equipment and intangible assets.

The assets classified as held for sale and associated liabilities at June 30, 2019 and December 31, 2018 are as follows (in CZK millions):

	June 30, 2019	December 31, 2018
	Bulgarian companies	Bulgarian companies
Property, plant and equipment, net	10,704	10,411
Intangible assets, net	447	446
Other non-current assets	136	128
Cash and cash equivalents	2,251	1,967
Trade receivables, net	2,987	4,092
Other current assets	483	453
Assets classified as held for sale	17,008	17,497
Long-term debt, net of current portion	1,600	1,313
Non-current provisions	140	144
Other long-term financial liabilities	258	218
Deferred tax liability	298	291
Short-term loans	233	309
Current portion of long-term debt	144	224
Trade payables	2,145	2,999
Current provisions	397	479
Other current liabilities	226	220
Liabilities associated with assets classified as held for sale	, 5,441	6,197

The assets and results associated with the assets classified as held for sale are reported in the operating segments Generation - New Energy, Distribution and Sale.

6. Equity

On June 26, 2019 the Annual Shareholders Meeting of ČEZ, a. s. approved the dividends per share before tax of CZK 24.0. The total amount of dividend approved for distribution to shareholders net of treasury shares amounts to CZK 12,850 million.

7. Long-term Debt

Long-term debt at June 30, 2019 and December 31, 2018 is as follows (in CZK millions):

	June 30, 2019	December 31, 2018
3.005% Eurobonds, due 2038 (JPY 12,000 million)	2,506	2,468
2.845% Eurobonds, due 2039 (JPY 8,000 million)	1,672	1,647
5.000% Eurobonds, due 2021 (EUR 750 million)	19,723	19,457
6M Euribor + 1.25% Eurobonds, due 2019 (EUR 50 million)	1,274	1,287
4.875% Eurobonds, due 2025 (EUR 750 million)	19,227	19,909
4.500% Eurobonds, due 2020 (EUR 750 million)	19,059	19,693
2.160% Eurobonds, due in 2023 (JPY 11,500 million)	2,406	2,370
4.600% Eurobonds, due in 2023 (CZK 1,250 million)	1,258	1,287
2.150%*IR CPI Eurobonds, due 2021 (EUR 100 million) 1)	2,547	2,634
4.102% Eurobonds, due 2021 (EUR 50 million)	1,300	1,288
4.375% Eurobonds, due 2042 (EUR 50 million)	1,301	1,286
4.500% Eurobonds, due 2047 (EUR 50 million)	1,299	1,284
4.383% Eurobonds, due 2047 (EUR 80 million)	2,160	2,087
3.000% Eurobonds, due 2028 (EUR 725 million)	18,854	19,419
0.875% Eurobonds, due 2022 (EUR 500 million)	12,740	12,824
4.250% U.S. bonds, due 2022 (USD 289 million)	6,499	6,525
5.625% U.S. bonds, due 2042 (USD 300 million)	6,738	6,768
4.500% Registered bonds, due 2030 (EUR 40 million)	1,029	1,017
4.750% Registered bonds, due 2023 (EUR 40 million)	1,032	1,068
4.700% Registered bonds, due 2032 (EUR 40 million)	1,025	1,060
4.270% Registered bonds, due 2047 (EUR 61 million)	1,566	1,549
3.550% Registered bonds, due 2038 (EUR 30 million)	768	790
Total bonds and debentures	125,983	127,717
Less: Current portion	(21,821)	(3,419)
Bonds and debentures, net of current portion	104,162	124,298
Long-term bank loans and lease payables:	24,346	21,466
Less: Current portion	(3,840)	(3,324)
Long-term bank loans and lease payables, net of current portion	20,506	18,142
Total long-term debt	150,329	149,183
Less: Current portion	(25,661)	(6,743)
Total long-term debt, net of current portion	124,668	142,440

1) The interest rate is based on inflation realized in Eurozone Countries (Harmonized Index of Consumer Prices – HICP) and is fixed through the closed swap to the rate 4.553% p. a.

8. Short-term Loans

Short-term loans at June 30, 2019 and December 31, 2018 are as follows (in CZK millions):

	June 30, 2019	December 31, 2018
Short-term bank loans Bank overdrafts	1,054 891	11,516 267
Total	1,945	11,783

9. Revenues and Other Operating Income

The composition of revenues and other operating income for the first six months ended June 30, 2019 and 2018 is as follows (in CZK millions):

	1-6/2019	1-6/2018
Sales of electricity:
Sales of electricity to end customers Sales of electricity through energy exchange Sales of electricity to traders Sales to distribution and transmission companies Other sales of electricity Effect of hedging – presales of electricity Effect of hedging – currency risk hedging	24,036 600 19,713 179 13,392 (5,248) 1,028	22,436 1,528 16,140 91 9,181 (2,532) 112
Total sales of electricity	53,700	46,956
Sales of gas, coal and heat:
Sales of gas Sales of coal Sales of heat	4,375 2,090 4,410	3,658 2,192 3,664
Total sales of gas, coal and heat	10,875	9,514
Total sales of electricity, heat, gas and coal	64,575	56,470
Sales of services and other revenues:
Distribution services Other services Revenues from goods sold Other revenues	22,247 10,093 578 505	19,543 8,069 430 401
Total sales of services and other revenues	33,423	28,443
Other operating income:
Granted green and similar certificates Contractual fines and interest fees for delays Gain on sale of property, plant and equipment Gain on sale of material Other	612 289 41 61 1,027	501 144 47 72 575
Total other operating income	2,030	1,339
Total revenues and other operating income	100,028	86,252

10. Income Taxes

Tax effects relating to each component of other comprehensive income are the following (in CZK millions):

		1-6/2019			1-6/2018
	Before tax amount	Tax effect	Net of tax amount	Before tax amount	Tax effect	Net of tax amount
Change in fair value of cash flow hedges Cash flow hedges reclassified to	8,308	(1,579)	6,729	(7,211)	1,370	(5,841)
statement of income	4,265	(810)	3,455	1,720	(327)	1,393
Change in fair value of debt instruments Disposal of debt instruments	400 1	(75) -	325 1	(513) -	99 -	(414) -
Translation differences – subsidiaries	(963)	-	(963)	581	-	581
Translation differences – associates and joint-ventures	20	-	20	101	-	101
Disposal of translation differences	-	-	-	12	-	12
Share on other equity movements of associates and joint-ventures	4	-	4	-	-	-
Re-measurement gains (losses) on defined benefit plans	2	-	2	-	-	-
Total	12,037	(2,464)	9,573	(5,310)	1,142	(4,168)

11. Segment Information

The Group reports its result using six reportable operating segments:

• Generation Traditional Energy
• Generation New Energy
• Distribution
• Sales
• Mining
• Support Services

A change in the classification of CEZ Group companies into operating segments was made with effect from January 1, 2019. In particular, most companies from the "Other" segment were transferred to different segments and the segment was renamed to "Support Services". The original segmentation primarily reflected core business activities of the respective company; now more account is taken of mutual business relations making up the overall segment chain. For example, SD - Kolejová doprava (a service subsidiary of Severočeské doly) was transferred from the "Other" segment to the "Mining" segment.

The change also reflects CEZ Group's internal management and breakdown into the Operations team and the Development team. Starting from January 1, 2019, the classification of companies into segments matches exactly their classification into the Operations team (Mining, Generation – Traditional Energy, and Supporting Activities segments) and Development team (Distribution, Sales and Generation – New Energy segments).

The Group accounts for intersegment revenues and transfers as if the revenues or transfers were to third parties, that is, at current market prices or where the regulation applies at regulated prices.

The Group evaluates the performance of its segments based on earnings before interest, taxes, depreciation and amortization (EBITDA). The reconciliation of EBITDA to income before other income (expenses) and income taxes summarizes the following table (in CZK millions):

	1-6/2019	1-6/2018
Income before other income (expenses) and income
taxes (EBIT)	17,102	12,677
Depreciation and amortization	14,204	14,096
Impairment of property, plant and equipment and
intangible assets	826	157
Gains and losses on sale of property, plant and
equipment, net *	(40)	(37)
EBITDA	32,092	26,893

* Gains on sale of property, plant and equipment are presented in the statement of income as part of the line item Other operating income. Losses on sale of property, plant and equipment are presented in the statement of income as part of the line item Other operating expenses.

The following tables summarize segment information by operating segments for the six months ended June 30, 2019 and 2018 and at December 31, 2018 (in CZK millions):

June 30, 2019:	Gene ration – Traditional Energy	Gene ration – New Energy	Distribu tion	Sales	Mining	Support Services	Combined	Elimination	Consoli dated
Revenues and other operating income – other than intersegment	29,997	3,399	21,320	42,924	2,239	149	100,028	-	100,028
Revenues and other operating income – intersegment	19,188	195	313	3,814	3,052	2,109	28,671	(28,671)	-
Total revenues and other operating income	49,185	3,594	21,633	46,738	5,291	2,258	128,699	(28,671)	100,028
EBITDA Depreciation and amortization Impairment of property, plant and	14,106 (7,593)	2,273 (909)	10,398 (3,259)	1,933 (448)	2,525 (1,393)	854 (602)	32,089 (14,204)	3 -	32,092 (14,204)
equipment and intangible assets EBIT	(15) 6,510	(12) 1,353	(810) 6,339	- 1,487	11 1,148	- 262	(826) 17,099	- 3	(826) 17,102
Interest on debt and provisions Interest income	(3,350) 390	(118) 90	(387) 85	(152) 76	(108) 55	(71) 69	(4,186) 765	555 (555)	(3,631) 210
Share of profit (loss) from associates and joint-ventures Income taxes	(16) (672)	(1) 13	(130) (1,199)	51 (295)	8 (223)	- (40)	(88) (2,416)	- -	(88) (2,416)
Net income	14,169	1,589	4,718	1,146	942	759	23,323	(12,102)	11,221
Identifiable assets Investment in associates and joint	243,876	27,668	112,343	5,641	21,674	5,640	416,842	-	416,842
ventures Unallocated assets	2,600	233	-	289	179	-	3,301	-	3,301 258,661
Total assets									678,804
Capital expenditure	3,763	486	5,651	622	770	370	11,662	(54)	11,608

June 30, 2018:	Gene ration – Traditional Energy	Gene ration – New Energy	Distribu tion	Sales	Mining	Support Services	Combined	Elimination	Consoli dated
Revenues and other operating income – other than intersegment Revenues and other operating income – intersegment	23,891 15,906	2,922 279	20,013 4,047	36,925 6,463	2,366 2,637	135 2,127	86,252 31,459	- (31,459)	86,252 -
Total revenues and other operating income	39,797	3,201	24,060	43,388	5,003	2,262	117,711	(31,459)	86,252
EBITDA Depreciation and amortization Impairment of property, plant and	9,560 (8,233)	1,980 (877)	10,061 (3,081)	2,134 (164)	2,381 (1,309)	773 (432)	26,889 (14,096)	4 -	26,893 (14,096)
equipment and intangible assets EBIT Interest on debt and provisions Interest income Share of profit (loss) from associates	(90) 1,247 (3,178) 250	- 1,103 (89) 64	(52) 6,936 (171) 32	- 1,974 (60) 7	10 1,089 (99) 8	(25) 324 (62) 31	(157) 12,673 (3,659) 392	- 4 267 (267)	(157) 12,677 (3,392) 125
and joint-ventures Income taxes Net income	(14) 326 29,519	- (60) 1,049	(336) (1,247) 5,207	64 (349) 1,649	3 (209) 843	- (69) 833	(283) (1,608) 39,100	- - (31,385)	(283) (1,608) 7,715
Capital expenditure	2,463	118	5,254	133	618	470	9,056	(94)	8,962
December 31, 2018:	Gene ration - Traditional Energy	Gene ration - New Energy	Distribu tion	Sales	Mining	Support Services	Combined	Elimination	Consoli dated
Identifiable assets Investment in associates joint-ventures Unallocated assets	247,784 2,645	27,400 235	109,806 -	4,046 305	22,055 176	4,823 -	415,914 3,361	(6) -	415,908 3,361 288,174

Total assets 707,443