Areva - Reference Document 2016

20.4 Notes to the annual financial statements

FINANCIAL INFORMATION CONCERNING ASSETS,

FINANCIAL POSITION AND FINANCIAL PERFORMANCE

20.4.

NOTES TO THE ANNUAL FINANCIAL STATEMENTS

The notes hereunder supplement the statement of financial position for the period

ended December 31, 2016 showing total assets of 4,603,900 thousand euros,

and the statement of income, showing net income of 69,709 thousand euros.

These statements are for the 12-month period beginning January 1 and ending

December 31, 2016.

The notes include:

Highlights of the year;

Accounting principles and methods;

Notes to the statement of financial position;

Notes to the statement of income;

Additional information.

These notes and tables are an integral part of the annual financial statements

approved by Board of Directors on February 28, 2017. They will be submitted to

the Annual General Meeting of Shareholders for approval on May 18, 2017.

20.4.1.

NOTABLE ITEMS IN THE 2016 FINANCIAL STATEMENTS

20.4.1.1.

CONTEXT OF THE 2016 FINANCIAL STATEMENTS

To restore its competitiveness and reestablish its financial position, the group

designed and has started to implement the Restructuring Plan, consistent with

the 2016-2020 “roadmap” presented to the market on June 15, 2016.

The Restructuring Plan includes the following three main sections:

conversion of the nuclear fuel cycle operations (including the Mining, Front End

and Back End operations) into subsidiaries within the NewAREVAHolding entity,

a wholly owned subsidiary of AREVA SA;

capital increases of AREVA SA and New AREVA Holding in the total amount of

5 billion euros; and

asset sales in order to withdraw from certain operations and refocus on the

nuclear fuel cycle operations.

At the end of implementation of the Restructuring Plan, and subject to its execution,

AREVA SA’s main mission will be to complete the Olkiluoto 3 EPR reactor project

(“OL3”) in Finland via its subsidiary AREVA NP with the necessary resources, in

compliance with its contractual obligations. Another objective of AREVA will be to

close out the remaining renewables projects; it will keep the responsibility associated

with outstanding component contracts and potentially non-outstanding component

contracts for which serious anomalies might be identified and unresolved by the

completion of the sale of New NP. Lastly, AREVA SA will assume responsibility for

the redemption of bank borrowings which remain on its balance sheet (bilateral

lines of credit and RCF) in 2017 and 2018.

Subsidiarization of the nuclear fuel cycle operations within

New AREVA Holding

Subsidiarization involved contributing the nuclear fuel cycle operations (including

the Mining, Front End and Back End operations) to the New AREVA Holding entity,

within which strategic investors are destined to invest alongside the French State.

The bearers of bonds issued by AREVA SA maturing in 2017, 2019, 2020, 2021,

2022, 2023 and 2024, assembled in general meetings, and the sole holder of the

2018 bond approved the contribution on September 19, 2016 and September 27,

2016 respectively.

On November 3, 2016, AREVA SA’s shareholders, assembled in an Extraordinary

General Meeting, also approved the contribution, the draft partial asset contribution

agreement signed between AREVA SA and NewAREVA Holding, and the valuation

of and payment for the contribution, and delegated authority to the Board of

Directors to effect the contribution. Furthermore, the contribution and correlative

capital increase of NewAREVAHolding were approved by the NewAREVAHolding

shareholders on November 3, 2016.

The contribution was effected on November 10, 2016, giving rise to a capital

increase for New AREVA Holding in the amount of 44,581 thousand euros. The

retranscription of the items concerned by this partial asset contribution is presented

in the notes to the financial statements, in the “partial asset contribution” column.

European Commission consent for the Restructuring Plan

On April 29, 2016, the French authorities notified the European Commission of

a restructuring aid measure which takes the form of twin capital increases by the

injection of public capital in the amount of 2 billion euros in AREVA SA and in the

maximum amount of 2.5 billion euros in New AREVA Holding.

On January 10, 2017, at the end of the review of the matter by the European

Commission, the latter authorized the French State’s participation in the capital

increases of AREVA SA and of New AREVA Holding, finding in particular that (i) the

planned aid measures enable the group’s return to long-term viability, (ii) the group

is contributing significantly to the costs of its restructuring and (iii) the compensatory

measures proposed by the group are sufficient and adequate.

The European Commission’s authorization is conditioned on the fulfillment of the

following two preconditions:

the findings of the Autorité de sûreté nucléaire (“ASN”) on the results of the

demonstration programconcerning the problemof carbon segregation identified

in parts of the EPR reactor vessel of the Flamanville 3 project, without calling

into question the suitability for service of the vessel parts due to that segregation

or, alternatively, a decision by EDF, duly notified to the group in view of the sale

of New NP, to waive the condition precedent related to the EPR reactor of the

Flamanville 3 project as concerns the carbon segregation identified in parts of

that reactor’s vessel; and

the European Commission’s authorization of the merger between EDF and

New NP.

Moreover, the European Commission’s authorization is accompanied by a certain

number of commitments on the part of the group until the end of its restructuring

plan, i.e. the end of 2019. In particular, it covers the obligation not to proceed with

acquisitions of interests in companies which it does not already control (with the

exception of (i) a certain number of already identified projects and (ii) after the

European Commission’s authorization of projects which would be necessary to

its return to viability), and the obligation to withdraw completely from the reactor

and fuel assembly operations. By that date, neither AREVA SA nor New AREVA

Holding will have a capitalistic relationship with New NP.

2016 AREVA

REFERENCE DOCUMENT

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