EDF_REGISTRATION_DOCUMENT_2017

FINANCIAL STATEMENTS Notes to the consolidated financial statements

AREVA NP was to remain a fully-owned subsidiary of AREVA SA, and would ■ retain all its existing contracts that were not transferred to New NP. In accordance with the terms of this memorandum of understanding, a share sale contract was signed on 15 November 2016 between EDF SA, and AREVA SA/AREVA NP. Completion of the transaction remained conditional on: favourable ASN conclusions regarding the outcome of the tests on the ■ Flamanville 3 reactor’s primary circuit; completion and satisfactory conclusion of the quality audits at the Le Creusot, ■ Saint-Marcel and Jeumont plants; clearance by the relevant merger control authorities. ■ Framatome’s activities 3.2.2 The new Framatome group’s activities are principally the following: industrial design, production and installation of nuclear plant components for the ■ existing nuclear fleet, and for management of major new reactor projects; service activities to improve the availability and competitivity of nuclear ■ installations, while reinforcing the safety of nuclear steam supply systems through production of instrumentation and control systems; production of nuclear fuel assemblies for electricity operators and certain ■ research reactors. These activities are exercised through six business units, mostly located in France, Germany and the United States: Engineering and Design Authority: development, design, certification and ■ licensing of nuclear steam supply systems and related services; Large projects: management and execution of new nuclear reactor projects, from ■ engineering to project completion; Installed Base: maintenance and engineering services for existing nuclear fleets ■ and fleets under construction; Fuel: development, design, licensing and production of fuel assemblies and core ■ components for Pressurised Water Reactors (PWR), Boiling Water Reactors (BWR) and research reactors; development of zirconium products; Components: design and production of heavy equipment and mobile equipment ■ for nuclear power plants; Instrumentation and Control (I&C): design and production of instrumentation and ■ control systems for the safety for steam supply systems in operation and new builds. EDF was a major customer of Framatome before the acquisition that was finalised on 31 December 2017, and will remain so after the operation (see note 48). The EDF group uses Framatome for production of its fuel assemblies, plant maintenance operations and equipment purchases (supply and installation of steam supply systems, etc.).

Framatome is also the supplier of the steam supply system and instrumentation and control for EDF’s new EPR reactors currently under construction (Flamanville 3 and Hinkley Point C), covering the whole process from initial design to commissioning.

3.2.3

Accounting treatment in the EDF

consolidated financial statements To form the Framatome group that was the target of this acquisition, AREVA SA undertook preliminary reorganisation operations involving the following principal steps: partial assets contribution by AREVA NP to New NP SAS, excluding certain ■ contracts concerning the Le Creusot plant (partial assets contribution agreement of 29 September 2017, with deferred effect to 31 December 2017); the transfer took place at real values based on a fairness opinion issued by an independent assessor, expert reports on certain identified assets, and a report by two independent valuation auditors (commissaires aux apports); a sale of assets and liabilities (excluding assets attached to the Olkiluoto 3 ■ project) by AREVA GmbH to New NP GmbH on 31 October 2017: this operation also took place at real values based on valuations by independent financial experts. As a result of analysis of the governance arrangements and percentage ownership, Framatome is fully consolidated by the Group. The acquisition of control over the activities of Framatome at 31 December 2017 led the Group to recognise Framatome’s identifiable assets and liabilities at their fair value at the acquisition date in accordance with IFRS 3. The valuations are provisional and the Group has 12 months to finalise allocation of the purchase price. The work done by EDF for the purchase price allocation was undertaken with the support of an independent financial valuation expert, and took into consideration the results of valuations performed as part of the preliminary reorganisations prior to the takeover of Framatome. The acquisition on 31 December 2017 of 75.5% of Framatome is reflected in the Group’s consolidated financial statements by recognition of provisional goodwill (measured under the partial goodwill method) of €1,257 million.

6.

3.2.4

Items of Framatome’s opening balance sheet in the EDF group’s consolidated financial statements, and determination of goodwill Determination of the provisional opening

3.2.4.1

balance sheet The fair value of Framatome’s identifiable assets and liabilities is the Group’s current best estimate. It was determined based on Framatome’s available business plan, applying standard valuation methods After including the fair values of assets acquired and liabilities assumed, the provisional opening balance sheet for Framatome at 31 December 2017 (for 100% of the capital) is as follows.

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EDF I Reference Document 2017