Areva - Reference Document 2016

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

PROVISIONS FOR LOSSES AT COMPLETION

On the accounting level and in this context, AREVA considers that it does not have the ability to assess the cost of the program at completion with sufficient reliability, and in particular the start-up test phases of the reactor, especially those that begin with fuel loading in the reactor, since TVO is officially the nuclear operator of the Olkiluoto 3 nuclear reactor as from that date. The valuation of the cost of these test phases, which will last until the completion of the project, remain highly dependent on the degree of the customer’s cooperation and compliance with its operational obligations. This cost category is termed “undiscernible”. However, except for the costs identified above, AREVA is still able to assess the amount of the costs to be incurred to complete the reactor’s construction. These types of costs are called “reliable”. In this context, and in accordance with the provisions of paragraph 32 of IAS 11, AREVA stopped recognizing contract revenue and costs based on the percentage of completion method. It now uses the following recognition methods: p revenue recognized for the contract is frozen at the level of the amount reached at June 30, 2013; p contract costs are recorded in expenses as they are incurred; only costs in the “reliable” categories that effectively contribute to the physical progress of the reactor’s construction are charged against the provision for losses at completion pertaining to the contract. They totaled 384 million euros for 2016. “Undiscernible” costs recorded directly in expenses or which did not contribute to the project’s progress amounted to 41 million euros; p for the full year of 2016, operating costs at completion rose 122 million euros in connection with the net excess costs incurred over the period; p in view of the difficulty of accurately estimating the reactor commissioning test phases (and in particular the phase involving fuel loading in the reactor, which is highly dependent on TVO’s actions), a return to recognizing revenue from the project based on the percentage of completion method will not be considered before the second half of 2017; p if the existing uncertainties as to the end of the project are dispelled, AREVA will then resume recognition of the OL3 contract in accordance with the percentage of completion method, which will lead to an adjustment of revenue as a function of the project’s percentage of completion. Other provisions At December 31, 2016 and December 31, 2015, the other provisions include in particular: p provisions for expenses related to work preparatory to the shutdown of certain nuclear facilities; p provisions for guarantees given to third parties. In particular, this item includes the risks associated with the following items: Bioenergy operations In February 2016, the group made the decision to withdraw from bioenergy operations in view of AREVA’s non-optimum position in that field and the difficulties of that operating segment in several projects in which AREVA was present. p provisions for disputes; provisions for tax risks; p p provisions for fines and penalties;

Contract for the construction of the Olkiluoto 3 EPR power plant Construction of the Olkiluoto 3 EPR power plant (“the project”) progressed over the course of 2016, meeting critical path milestones, although delays were recorded on subcritical tasks. The key milestones met were: p submittal of the Operating License Application (OLA) file on April 13, 2016; p completion of functional tests of the cabinets of the production part (TXP); p tests on the full-scale simulator, which ended with the acceptance of TVO and STUK on October 14, 2016; p nuclear circuit cleaning, which took place fromOctober 17 to November 3, 2016; p open-vessel functional tests, which started on November 19 and ended on January 13, 2017, according to plan. The key short-term milestones until fuel loading are as follows: p fuel loading in April 2018. The project is entering the integrated testing phase leading to fuel loading in the reactor and requires strong operational commitment by TVO. Its involvement in maintaining the schedule until connection to the grid has never been more necessary. Uncertainties remain as to the end of the project. On the one hand, froma contractual standpoint, TVO continues to limit itself to a strict interpretation of the contract. TVO thus rejects any gradual handover of responsibility which future operational constraints could require, particularly those related to nuclear commissioning, which starts with fuel loading. In addition, the principal stumbling block concerns methods of finalizing the project in connection with the restructuring deployed by AREVA, concerning in particular the operational and financial resources allocated to the project. In the absence of agreement and as expressly requested by TVO, the project must remain unchanged in its contractual form. On the other hand, on the legal level, the pre-trial investigation phase of the legal proceeding begun in 2008 between the AREVA-Siemens consortium and TVO continues. The AREVA-Siemens consortium continues to exercise its rights in connection with the arbitration proceedings. The consortium’s claim for compensation for damages concerns a total amount of 3.5 billion euros. TVO’s claim against the consortium amounts to approximately 2.3 billion euros. The consortium and its counsel still believe that the allegations of intentional gross negligence set out by TVO in its claim against the consortium remain unfounded. In accordance with the schedule of the arbitration proceeding, a partial decision was rendered by the court on November 7, 2016. While that decision allows some of TVO’s claims, it does not constitute a decision on the financial outcome of the dispute between the parties. Other intermediate decisions are expected before the final decision, not expected before the end of 2017 or early 2018. p preparation for cold functional tests to begin in January 2017; p start of cold functional tests, to begin in June 2017; p start of hot functional test sequences in the second half of 2017; p Operating License Granting (OLG) at the end of 2017;

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2016 AREVA REFERENCE DOCUMENT