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20.2 Notes to the consolidated financial statements for the year ended December 31, 2016
FINANCIAL INFORMATION CONCERNING ASSETS,
FINANCIAL POSITION AND FINANCIAL PERFORMANCE
20
New firm sales contracts have been signed since December 31, 2015 and will
be served by these purchases. Consequently, the provision calculated for these
purchases was completely reversed at December 31, 2016. The counterpart is
the establishment of additional provisions for losses at completion, inasmuch as
the sales prices expected from these new contracts are lower than the purchase
prices for these supply contracts. These provisions were charged in the amount
of 77 million euros.
Koeberg contract (New NP)
A loss at completion in the total amount of 41 million euros was recognized at
December 31, 2015 for an export contract in the Reactors and Services field.
At December 31, 2016, this loss at completion was recognized in the total amount
of 67 million euros, including 46 million euros as a provision for loss at completion.
The change in the loss at completion reflects the delay in the project’s completion
date due in particular to quality problems; to the decision to subcontract the
manufacturing of parts; and to the expectation of the completion of negotiations
with the customer for redefinition of the contractual calendar.
EDF contracts (New NP)
The discovery of high carbon concentrations on the channel heads manufactured
at le Creusot for RP3 steam generators and the obligation for compliance resulting
from the treatment of anomalies detected during review of the RP2 manufacturing
file (“unmarked files” of le Creusot) showing non-compliant mechanical strength
characteristics on the upper shell of the GV385, have led to plans to replace those
channels and parts with new compliant components.
All of the corresponding work was assessed and included in the costs at completion
of the projects involved, and led to the recognition of a provision for losses at
completion of 19 million euros at December 31, 2016.
Contracts for the design and construction of an experimental
reactor (AREVA TA)
The year of 2016 was impacted by the reindustrialization and recontractualization
of two important projects following the amicable withdrawal of one of the CEA’s
contractors. A new delay in the program steering schedule, which was sudden
and left no room to maneuver, had to be granted, delaying reactor startup to
September 2021 at the earliest. Application of the provisions of the tripartite
memorandum of understanding signed in July 2015 and the signature of an
amendment to the project management contract with the customer ensured that
the funding of the excess costs associated with this schedule day were shared, with
no additional negative impact for AREVA.
Provisions for contract completion (NewCo)
The provisions for remaining work cover a set of future services to be carried out
at the la Hague and MELOX sites (Recycling Business Unit) and the Tricastin and
Malvési sites (Chemistry-Enrichment Business Unit) in connection with contracts
for which obligations to the customers have been met, revenue was recognized
and the corresponding costs were expensed in offset to that provision. For the
Recycling Business Unit, the services mainly concern work to retrieve, process,
package, ship and dispose of technological waste related to MOX fabrication or
to the pool storage of used fuel; for the Chemistry-Enrichment Business Unit, they
concern work involving nitrate effluent and dust treatment. At December 31, 2016,
these future services amounted to 693 million euros for the Recycling Business
Unit and 473 million euros for the Chemistry-Enrichment Business Unit (compared
with 593 million euros and 434 million euros respectively at December 31, 2015).
Other provisions
Industrial equipment supply contract (NewCo)
At December 31, 2015, a provision of 40 million euros was set up for a supply
contract concerning industrial equipment whose use in the current market
situation is still under review. No tangible item calls into question this provision at
December 31, 2016.
Creusot quality initiative (New NP)
QUALITY ACTION PLAN CONCERNING AREVA NP
The quality audit of the Creusot plant launched at the end of 2015 continued in
2016. In connection with the audit, all of the quality processes were reviewed and
improvement measures are being implemented.
Concerning the Creusot plant, the quality audit was supplemented by exhaustive
analysis of one category of manufacturing files of forged parts (marked files), with
the objective of identifying potential anomalies. Files presenting practices which
are not in compliance with Creusot’s quality assurance rules were identified. The
anomalies found were the subject of a technical characterization submitted to a
technical committee. This work was carried out with the operators and customers
concerned. The objective of this work is to validate the characterization performed
and to deal with the anomalies by providing customers and the safety authorities
appropriate technical justification in terms of the contractual and regulatory
requirements ensuring the operability of the parts. An information and discussion
process has been implemented in which the nuclear safety authorities in particular
are involved. All of the customers concerned by the anomalies identified have been
informed by AREVA.
To date, the analyses have found that no reported anomaly compromises the
mechanical integrity of the parts concerned. Additional tests and analyses are in
progress, in particular on an equipment item delivered to the Fessenheim 2 power
plant, in order to respond to requests from the nuclear safety authority ASN following
the suspension of the test certificate of one of the steam generators.
A more extensive analysis of the manufacturing files (unmarked files) is in progress
and concerns more than 6,000 files. Additional identified anomalies are being dealt
with in the same way. In this regard, an anomaly on a steam generator delivered to
the Flamanville 3 site was the subject of characterization for purposes of responding
to requests from the safety authority.
The financial statements for the period ended December 31, 2016 were closed:
p
taking into account the obligation to deal with all of the marked and unmarked
manufacturing files. In this regard, a provision was set up for the estimated
external costs of all actions needed to deal with the identified anomalies, including
the review of unmarked files;
p
it is believed that the results of these actions will lead to a positive conclusion of
the discussions with customers and their safety authorities.
In addition, since May 2016, the analysis has been extended to the St-Marcel and
Jeumont sites. No similar anomalies have been identified at those two sites as of
the date of these financial statements.
TENSILE TESTS PERFORMED AT THE CREUSOT LABORATORY
Following the deficiencies found in April 2015 concerning tensile test protocols at
the Creusot laboratory, systematic verification was undertaken to justify the parts
concerned through analyses or by retesting on test specimens. The identified
anomalies are being dealt with in coordination with the customers.
The costs of retesting were assessed and a provision was set up for them (6,000
tests). More specifically, an anomaly was identified on an equipment item in the
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2016 AREVA
REFERENCE DOCUMENT