Saint Gobain - Registration document 2016

9 FINANCIAL AND ACCOUNTING INFORMATION 1. 2016 Consolidated Financial Statements

The following table presents a breakdown of the principal derivatives used by the Group:

Fair value

Nominal amount by maturity

recorded in assets Derivatives

recorded in liabilities Derivatives

Dec. 31, 2016

Dec. 31, 2015

Within 1 year

1 to 5

Beyond 5 years

2016 Dec. 31,

years

(in € millions)

FAIR VALUE HEDGES

0

0

0

Cash flow hedges Currency

238

(7)

231

227

2,934

31

0

2,965

Interest rate

0

(70)

(70)

(13)

0

0

387

387

Energy and commodities

5

0

5

(9)

15

2

0

17

Other risks

13

0

13

6

12

69

0

81

CASH FLOW HEDGES – TOTAL

256

(77)

179

211

2,961

102

387

3,450

accounting mainly contracted by Compagnie de Saint-Gobain Derivatives not qualifying for hedge Currency

5

(10)

(5)

3

1,463

12

0

1,475

Interest rate

0

0

0

22

0

0

0

0

Energy and commodities

0

0

0

0

0

0

0

0

DERIVATIVES NOT QUALIFYING FOR HEDGE ACCOUNTING – TOTAL

5

(10)

(5)

25

1,463

12

0

1,475

TOTAL

261

(87)

174

236

4,424

114

387

4,925

Currency instruments 8.4.1. Currency swaps

Other risks 8.4.4. Equity derivatives

The Group uses currency swaps mainly to convert euro-denominated funds into foreign currencies for cash management purposes. Forward foreign exchange contracts and currency options used to hedge foreign currency transactions, particularly commercial transactions (purchases and sales) and Forward foreign exchange contracts and currency options are investments. The Group uses interest rate swaps to convert part of its fixed (variable) rate bank debt and bond debt to variable (fixed) rates. Cross-currency swaps debt). The Group uses cross-currency swaps to convert foreign currency debt (euro debt) into euro debt (foreign currency Energy and commodity instruments 8.4.3. Energy and commodity swaps changes in the price of certain purchases used in the Group subsidiaries’ operating activities, particularly energy (fuel oil, Energy and commodity swaps are used to hedge the risk of natural gas and electricity) purchases. Interest rate instruments 8.4.2. Interest rate swaps

performance units long-term incentive plan. Equity derivatives are used to hedge the risk of changes in the Saint-Gobain share price in connection with the Credit value adjustments to derivative 8.4.5. instruments calculated in accordance with IFRS 13 based on historical probabilities of default derived from calculations performed Credit value adjustments to derivative instruments are default. At December 31, 2016, credit value adjustments were not material. by a leading rating agency and on the estimated loss given Impact on equity of financial instruments 8.4.6. qualifying for cash flow hedge accounting €191 million, consisting mainly of: At December 31, 2016, the cash flow hedging reserve carried in equity in accordance with IFRS had a credit balance of change in the fair value of the currency swaps qualified as a credit balance of €232 million corresponding to the ‹ cash flow hedges for the acquisition of a controlling interest in Sika; a debit balance of €36 million in relation to cross-currency ‹ swaps designated as cash flow hedges that are used to convert a bond issue into euros. material. The ineffective portion of cash flow hedging derivatives is not At December 31, 2016, the cash flow hedge relating to the acquisition of a controlling interest in Sika was valued at €232 million based on a spot exchange rate of €1 for CHF 1,074. An increase of 10% in this exchange rate would

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SAINT-GOBAIN - REGISTRATION DOCUMENT 2016