Saint Gobain - Registration document 2016

9 FINANCIAL AND ACCOUNTING INFORMATION 1. 2016 Consolidated Financial Statements

Changes in the number of consolidated companies 2.3 At December 31, 2016, the number of consolidated companies was as follows:

France Outside France

Total

Fully consolidated companies AT JANUARY 1, 2016

149

606

755

Newly consolidated companies

8

38

46

Merged companies

(13)

(18)

(31)

Deconsolidated companies

(3)

(25)

(28)

Change in consolidation method

2

2

AT DECEMBER 31, 2016

141

603

744

Equity-accounted companies and joint arrangements AT JANUARY 1, 2016

3

93

96

Newly consolidated companies

1

6

7

Merged companies

0

Deconsolidated companies

(6)

(6)

Change in consolidation method

(2)

(2)

AT DECEMBER 31, 2016

4

91

95

TOTAL AT JANUARY 1, 2016

152

699

851

TOTAL AT DECEMBER 31, 2016

145

694

839

consolidation Off-balance sheet commitments related to companies within the scope of 2.4 Group for the amount of €2,398 million. As of December 31, 2016, commitments for irrevocable purchases included the commitment on the equity interests of the Sika

NOTE 3

INFORMATION CONCERNING THE GROUP’S OPERATING

ACTIVITIES

3.1 Revenue recognition 3.1.1

Income statement items

Operating income 3.1.2

income, as are changes in the fair value of financial Foreign exchange gains and losses are included in operating external and internal management indicator for many years. different sectors and has been used by the Group as its key operating income. business equity-accounted companies is also posted under they relate to operating items. The share of income of core instruments that do not qualify for hedge accounting when Operating income is a measure of the performance of the supplier discounts are common practice in the industrial business are included in operating income. Contractual Discounts granted by suppliers to the Building Distribution automatically, based on the supplier invoices. Consequently, product type to volumes purchased. The calculation is made calculated by applying a contractually guaranteed rate by goods distribution sector. These discounts are mostly based on a step mechanism linked to specified targets, statement for these discounts. Other discounts are calculated determining the amounts to be recognized in the income the judgment of the management is immaterial when and consistently from one period to the next. statement. Such judgment is exercised in a prudent manner to determine the discount to be recognized in the income historical data, past performance and future trends in order the judgment of the management is required based on achieves the various targets over a given period. In this case, whereby the percentage discount increases as the entity

the customer, or (ii) when the service has been rendered, or the risks and rewards of ownership have been transferred to recognized net of rebates, discounts and sales taxes (i) when Revenue generated by the sale of goods or services is be provided. (iii) by reference to the stage of completion of the services to explained below. When the outcome of a construction companies using the percentage-of-completion method, as Construction contracts are accounted for by the Group’s activity at the end of the reporting period. When the outcome by reference to the stage of completion of the contract costs are recognized as revenue and expenses, respectively, contract can be estimated reliably, contract revenue and probable that total contract costs will exceed total contract costs incurred that it is probable will be recovered. When it is contract revenue is recognized only to the extent of contract immediately. revenue, the expected loss is recognized as an expense of a construction contract cannot be estimated reliably, total consolidated net sales. Construction contract revenues are not material in relation to

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SAINT-GOBAIN - REGISTRATION DOCUMENT 2016