ADP_REGISTRATION_DOCUMENT_2017

FINANCIAL INFORMATION ON THE ASSETS, FINANCIAL POSITION AND CONSOLIDATED FINANCIAL STATEMENTS 20 GROUPE ADP CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2017

9.5.3 Analysis of risks related to financial instruments RATE RISKS

To supplement its available cash flow, the Group resorts to debt to finance its investment programme. The risk rate relating to the debt is managed by modulating the respective proportions of fixed rates and variable rates in line with market developments. The management of this risk depends on the implementation or cancellation of interest rate operations (swaps). The Group’s exposure to interest rate risk is essentially a result from its financial debt, and to a lesser extent its portfolio of rates derivatives.

The Group’s policy consists of managing its interest charge by using a combination of fixed rate and variable rate loans. The Group’s policy is that 50% to 100% of its debt should be at fixed rates. In line with this objective, the Group puts in place interest rate swaps through which it exchanges, at specific intervals, the difference between the amount of interest at fixed rates and the amount of interest at variable rates, calculated on a nominal loan amount agreed between the parties. These swaps are assigned to loan hedging.

The breakdown of financial debt at fixed and variable rate is as follows:

As at 31 Dec. 2017

As at 31 Dec. 2016

Before hedging

After hedging

Before hedging

After hedging

%

%

(in millions of euros)

Fixed rate

4,578 1,333 5,911

4,991

84% 16%

4,003

3,814

85% 15%

Variable rate

920

481

670

Debt (excluding derivatives)

5,911

100%

4,484

4,484

100%

As of 31 December 2017, the Group holds rate and exchange based derivative financial instruments (swaps), with a fair value of €27 million, The notional amounts of fair value hedging derivatives may be analysed as follows:

appearing on the assets under other current financial assets, and €54 million appearing on the liabilities under financial debt.

Maturity between 1 & 5 years

As at 31 Dec. 2017

Maturity > 5 years

Maturity < 1 year

Fair value

(in thousands of euros)

Derivatives classified as fair value hedges Derivatives classified as cash flow hedges Derivatives not classified as hedges Currency derivatives not classified as hedges

- - -

-

-

-

-

59

339

398 400

(36)

400

- -

11

30

-

30

(2)

TOTAL

-

459

339

798

(27)

The portfolio of non-hedging derivatives is made up exclusively of return swaps with a fixed margin. This part of the derivatives portfolio is therefore not very sensitive to change in interest rates. An immediate 1% decrease in interest rates on 31 December 2017 would not result in a material increase on the fair value of the derivatives. EXCHANGE RISKS Following the takeover of TAV Airports on 1 July 2017, (see note 2), the Group is henceforth exposed to exchange risk. TAV Airports converts its financial statements in a currency other than its functional currency, therefore the main risk of change relates to the variations of the euro currency compared to the Turkish lira and American dollar. The currencies in which transactions are mainly denominated are euro, Turkish lira (TRY) and American dollar, as well as few currencies from the Persian Gulf liked to American dollar with a fixed parity, e.g. Sudanese rial, United Arab Emirates dirham and the Oman rial. In order to reduce exposure to exchange fluctuations, the Group has a hedging policy consisting of: ◆ implementing derivative instruments; ◆ neutralising exchange rate risk as far as possible by reducing the balance of revenue and expense in these currencies; ◆ if necessary making partial forward sales of dollars for residual balances.

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AÉROPORTS DE PARIS  REGISTRATION DOCUMENT 2017