NATIXIS_REGISTRATION_DOCUMENT_2017

5 FINANCIAL DATA

Parent company financial statements and notes

(market risk, model, liquidity and counterparty).The variationsof market value are directly registered in income statement. However, for instruments handled on mutual agreements, the earnings and the losses are registeredin income statementonly in the outcome of the transactions without prejudice to the possible constitutionof reserves,over the life of the instrument, at the level of the incurrednet risk. 7. In accordance with Article 41 of the Amended Finance Act for 1997 (No. 97-1239 of December 29, 2007), amended by Article 121of the AmendedFinanceAct for 2008 (No. 2008-1443 of December 30,2008), of Article 5of the AmendedFinanceAct 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-concessionalloans to foreign States, gifts to the “Fund for Private-SectorAid and Studies” and the stabilization of interest rates for exportcredit guaranteedby Coface. The related transactions,some of which may be guaranteedby the State, are recognizedseparately 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 operationsare identifiedon the balance sheet under each of the headingsconcernedwith these operations. Institutional operations “Short-term benefits” including salaries, social security contributions, annual leave, employee profit-sharing, incentive plans, top-up contributions and bonuses payable in the 12 months after they are attributed are expensed in the period in which the correspondingserviceswere rendered. “Termination benefits” granted to employees upon the termination of their employment and prior to retirement. A provisionis accruedfor these benefits. “Post-employment benefits” such as pensions, other supplementary retirement benefits applicable to the banking industry, end-of-career awards and other contractual benefits payable to retirees. Natixis distinguishesbetween two types of post-employmentbenefits: defined-contributionplans , whichmainlyconsistof the social a security basic pension scheme and the supplementary schemes Agirc and Arco, under which an entity has no obligationto pay a specifiedbenefit amount.Contributionspaid under defined contribution plans are expensed in the correspondingperiod; defined-benefit plans under which Natixis has a legal or a constructive obligation to pay a specified benefit amount are valuedand funded. Employee benefits 8 Employeebenefitsare recognizedin “Payrollcosts”. They fall into four categories:

A provision is set aside for defined-benefit plans based on an actuarialassessmentof the benefitobligationusing the projected unit credit method. This method draws on demographic and financial assumptions.The value of any plan assets is deducted from the obligation to determine the provision to be recognized on the balance sheet. This valuation is carried out on a regular basis by independentactuaries. Actuarial assumptions are reviewed annually. Differences resulting from changes in actuarial assumptionsand experience adjustments (impact of differences between actuarial assumptions and actual experience) give rise to actuarial gains and losses. In accordancewith recommendationNo. 2013-02of the Autorité des Normes Comptables (ANC – French accounting standards setter) on rules for measuring and recognizing retirement and similar commitments,dated November 7, 2013 (which allowed the partial adoption of revised IAS 19 as adopted by the European Union in June 2012), Natixis chose to maintain the corridor method approach in the parent company financial statements. Under this method,Natixis does not recognizethe portion of net cumulative actuarial gains and losses that is lower than the greater of (i) 10% of the present value of the defined-benefit obligationand (ii) 10% of the fair value of any plan assets at the end of the previous reporting period. The portion of actuarial gains and losses outside the 10% “corridor” is therefore recognized over the average remaining working lives of the employeesparticipatingin the relevantplan. In the event of changesto an existingplan or the implementation of a new plan, past service cost is recognizedin incomeover the perioduntil the benefitsbecomevested. The amount recognized as a provision in the balance sheet represents the present value of the obligation under defined-benefitplans: minus any past servicecost not yet recognizedin income, j plus or minus any unrecognizedactuarial gains or losses in j accordancewith the corridorprinciplearisingfrom: experienceadjustmentslinked to demographicvariables, j changesin actuarialassumptions, j differencesbetweenthe actual return and expectedreturn j on plan assets; minus the marketvalue of plan assets. j Insurance contracts taken up with a related party to Natixis and intended to finance all or part of Natixis’ defined-benefit plan commitmentsare recordedin the asset side of the balancesheet as “Otherassets”. The annual payroll costs recognizedin respect of defined-benefit plans consistof: rights vestedby beneficiariesover the period; a the interest cost reflecting the impact of unwinding the a discounton the obligation; the expectedreturnon plan assets; a amortization of actuarial gains and losses and past service a costs; the effectsof plan curtailmentsand settlements. a

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Natixis Registration Document 2017