Areva - Reference Document 2016

20

20.2 Notes to the consolidated financial statements for the year ended December 31, 2016 FINANCIAL INFORMATION CONCERNING ASSETS, FINANCIAL POSITION AND FINANCIAL PERFORMANCE

Operations held for sale

(in millions of euros)

December 31, 2016 December 31, 2015

Operations held for sale in 2015 New NP

106

105

AREVA TA

- -

- -

Nuclear Measurements

Sub-total

106

105

Operations held for sale in 2016 NewCo

6,086 6,192

TOTAL (*) * see note 3.

105

Purpose of earmarked portfolio To meet its end-of-lifecycle obligations, the group voluntarily built up a special portfolio earmarked for the payment of its future facility dismantling and waste management expenses. This obligation has applied to all nuclear operators in France since the Law no. 2006-739 of June 28, 2006 and the implementing decree no. 2007-243 of February 23, 2007 came into force. This portfolio was composed based on a schedule of disbursements over more than a century and is therefore managed with long-term objectives. The portfolio is comprised of financial assets covering all of the group’s commitments, whether related to obligations imposed by the Law of June 28, 2006 for regulated nuclear facilities located in France, or related to other end-of-lifecycle commitments for facilities located in France or abroad. The group relies on independent consultants to study strategic target asset allocations to optimize the risk/return of the portfolio over the long term and to advise AREVA on the choice of asset classes and portfolio managers. These recommendations are submitted to the Cleanup and Dismantling Fund Monitoring Committee. Long-term asset allocations indicate the target percentage of assets to cover liabilities (bonds and money market assets, including receivables from third parties) and the diversification of assets (shares of stock, etc.), subject to limitations imposed by the French decree no. 2007-243 of February 23, 2007 and its amendment by the decree no. 2013-678 of July 24, 2013, both in terms of the control and spread of risks and in terms of type of investments.

At December 31, 2016, for the scope of end-of-lifecycle obligations, the legal entities which make up AREVA show under-coverage of end-of-lifecycle liabilities by earmarked assets. By letter of January 5, 2017, the authority required AREVA NC to restore 100% coverage within a regulatory limit of three years. AREVA ensured that all AREVA NC and AREVA NP funds are held, registered and valued by a single custodian capable of performing the necessary control and valuation procedures independently, as required by the implementing decree. The Equity segment is primarily managed by external service providers via:

p an equity management agreement; and

p earmarked investment funds. The Rate segment (bonds and money market) is invested via:

open-ended mutual funds;

p

p earmarked investment funds; and

directly held bonds.

p

The portfolio of assets earmarked to fund end-of-lifecycle expenses includes the following:

December 31, 2016 December 31, 2015 NewCo NewCo

(in millions of euros)

In market value or liquidation value Publicly traded shares

1,098 1,191 2,344

1,325 1,095 2,258

Equity investment funds

Bond and money market mutual funds

Unlisted mutual funds

112

96

At amortized cost Bonds and bond mutual funds held to maturity

561

610

Portfolio of securities earmarked for end-of-lifecycle operations

5,307

5,383

Receivables related to end-of-lifecycle operations

779

739

TOTAL FINANCIAL ASSETS EARMARKED FOR END-OF-LIFECYCLE OPERATIONS

6,086

6,122

219

2016 AREVA REFERENCE DOCUMENT