NATIXIS - 2018 Registration document and annual financial report

FINANCIAL DATA Parent company financial statements and notes

Other items of property, plant and equipment are depreciated over their estimated useful lives, generally five to 10 years. Purchased software is amortized on a straight-line basis over its estimated useful life, which in most cases is less than five years. Internally generated software is amortized over its estimated useful life, which cannot exceed 15 years. 4. This line item comprises debt attributable to freely tradable securities held for sale issued by Natixis in France or in foreign countries, with the exception of subordinated instruments recognized as subordinated debt. This line item notably includes medium-term notes, interbank market instruments, negotiable debt securities and bonds and other fixed-income securities. Accrued interest payable relating to these issues is disclosed separately as a related payable, with an offsetting entry in the income statement. Issue or redemption premiums on bond issues are amortized over the life of the issues in question and the related expense is recognized under the heading “interest and similar expenses” on the income statement. 5. This item covers perpetual and dated subordinated notes, for which the redemption in the event of liquidation ranks behind all other creditors. Accrued interest is credited to the corresponding receivables item on the income statement. Where perpetual subordinated notes are treated as equivalent to amortizing securities, each periodic payment is broken down into the repayment of principal, which is deducted from the nominal amount, and interest, which is charged to the income statement under “interest and similar expenses”. (futures and options) The notional amount of these instruments is recorded off-balance sheet for internal monitoring and regulatory purposes, but is not included in the published statement of off-balance sheet items. Details for these instruments are provided in the notes. The accounting principles applied depend on the instrument involved and the purpose of the transaction (hedging or for trading purposes). These transactions are carried out for four purposes: micro-hedging (hedging of specific transactions or positions); a macro-hedging (overall asset and liability management); a speculative position-taking; a specialized management of a trading portfolio. a Gains or losses on specific hedges are recognized in income on a symmetrical basis with the income and expenses of the position or transaction being hedged. Expenses and income arising from forward financial instruments used to hedge and manage Natixis’ overall interest rate risk are Debt securities Subordinated debt Forward financial instruments 6. Interest rate and currency trading

recognized over the period of the position. Unrealized gains and losses are not recognized. The accounting treatment of speculative positions is identical for interest flows. Contracts are marked to market value at each reporting date and any unrealized losses are taken to the income statement as provisions. Each instrument in the final category is marked to market on an individual basis. Changes in value during the period are recognized immediately on the income statement. Valuations are adjusted for counterparty risk, the position funding cost and the discounted present value of future contractual management costs. Forward foreign exchange contracts Outright foreign currency futures or transactions hedging other foreign currency futures are measured based on the forward foreign exchange rate remaining to run on the currency in question. Differences in interest rates or premiums and discounts associated with hedged foreign currency futures are recognized in stages as interest expense or income over the effective term of the transaction. Options (interest rate, currency and equity) and futures The notional amount of the underlying instrument of each option or futures contract is recognized with a distinction being made between hedging and trading contracts. For hedging transactions, income and expenses are recognized in income on a symmetrical basis with the income and expenses of the hedged items. For non-hedging activities, positions in a class of option or forward contract are marked to market at the reporting dates. Changes in market value are recognized directly in the income statement. However, for instruments traded on over-the-counter markets, gains or losses are recognized on the income statement only upon settlement of these transactions, without effect on the potential setting aside of provisions for the net risk incurred over the life of the instrument. 7. In accordance with Article 41 of the Amended Finance Act for 1997 (No. 97-1239 of December 29, 2007), amended by Article 121 of the Amended Finance Act for 2008 (No. 2008-1443 of December 30, 2008), of Article 5 of the Amended Finance Act for 2014 (No. 2014-1655 of December 29, 2014) and the agreement signed with the French State on May 10, 2017, Natixis manages certain public procedures on behalf of the French State, mainly consisting of loans and gifts to foreign States conferred in the framework of Public Development Aid, non-concessional loans to foreign States, gifts to the “Fund for Private-Sector Aid and Studies” and the stabilization of interest rates for export credit guaranteed by Coface. The related transactions, some of which may be guaranteed by the State, are recognized separately in the financial statements. The State and other related creditors have a specific right over the assets and liabilities allocated to these institutional operations. The bank's assets and liabilities relative to these operations are identified on the balance sheet under each of the headings concerned with these operations. Institutional operations

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Natixis Registration Document 2018