Areva - Reference Document 2016

20

20.2 Notes to the consolidated financial statements for the year ended December 31, 2016 FINANCIAL INFORMATION CONCERNING ASSETS, FINANCIAL POSITION AND FINANCIAL PERFORMANCE

of the fulfillment of the conditions precedent stipulated in the share purchase agreement. Taken together, these items will ensure the continuity of operations for the 2017 financial year. Beyond 2017, the last significant maturity of AREVA’s debt consists of the reimbursement of the syndicated line of credit of 1.25 billion euros in January 2018. Although it is not presently expected that the sale of NewNP in 2018 will be delayed, alternative solutions are being examined in addition to the internal optimization measures already identified (monetization of receivables, factoring, etc.) with a view to being able to ensure AREVA’s financing until the receipt of the income from the sale of New NP, if it were to be delayed in 2018. Voluntary Departure Plan and adaptation of the group’s workforce On March 4, 2015, when the group’s 2014 results were reported, AREVA announced the deployment of a performance plan to achieve 1 billion euros in operational gains in 2018 comparedwith 2014. The plan rests on four pillars: control of payroll and compensation, productivity improvement, selectivity in purchasing, and marketing and sales strategy. In July 2015, as part of its performance plan, the group had announced its intention of reducing its international workforce by 6,000 people by the end of 2017 in relation to December 31, 2014. In France, voluntary departure plans were launched for AREVAMines, AREVA NC, AREVA NP, AREVA Business Support, SET and Eurodif Production, with the goal of 3,400 job cuts over the 2016-2017 period. The voluntary period of these departure plans ended in late November 2016. At the end of 2016 (i.e. after the end of the voluntary departure periods), a total of 3,042 departures had been recorded (including those to come) within the scope of the above-mentioned six companies, 2,046 of which were within the framework of the voluntary departure plans and 996 of which were outside those plans (non- VDP retirement, dismissals, resignations, etc.). The performance plan also contains an international component. In Niger (at the mining sites), in Germany (closure of the Offenbach site) and in the United States, the job cuts concerned close to 2,000 employees as of the end of 2016. At December 31, 2016, the AREVA group (consolidation scope) had a global workforce of 36,241 employees, comparedwith 41,847 employees at December 31, 2014, for a reduction of approximately 13.5% representing 5,632 employees (including 927 employees of the Canberra subsidiary, sold on July 1, and 85 employees of Elta, sold in December 2016). The group’s global workforce at December 31, 2016 was distributed as follows: p Other operations in the process of being sold (particularly AREVA TA and renewable energies): 1,660 employees. OL3 contract maintained in consolidation scope of continuing operations Discussions were entered into with TVO in early 2016 with the main objective of getting TVO’s consent for the transfer of the contract for the project to construct the Olkiluoto 3 EPR power plant (“OL3”) to AREVA SA and for the signature of a comprehensive settlement ending the arbitration between TVO and the AREVA- Siemens consortium. These negotiations did not lead to an agreement and were suspended during the first half of 2016. p continuing operations: 46 employees; p New NP consolidation scope: 16,410 employees; p NewCo consolidation scope: 18,125 employees;

company’s Board of Directors had given authority to management to exercise the option to sell its 50% interest in Adwen’s capital, signed on June 17, 2016 with Gamesa. This option to sell was exercised on September 14, 2016, and the sale closed on January 5, 2017. Adwen was classified as an asset held for sale at December 31, 2016 (see note 3). Sale of AREVA TA The Company announced on December 17, 2015 and confirmed on January 27, 2016 the plan to sell AREVA TA, a company specialized in the design, construction, commissioning and operational readiness of compact nuclear reactors for marine propulsion and nuclear research facilities. On December 15, 2016, the company signed a share purchase agreement for all of its shares in AREVA TA with a consortium of buyers composed of the Agence des participations de l’État (APE, 50.32% of the capital), the Commissariat à l’énergie atomique et aux énergies renouvelables (CEA, 20.32%), and DCNS (20.32%). EDF will keep its 9.03% interest in the capital. The sale, for which the plan has already been the subject of consultation with employee representative bodies and which has been approved by AREVA’s governance, is scheduled to close in March or April 2017, subject in particular to the publication of the ministerial orders related to the sale and the absence of any unfavorable significant event with an impact of more than 55 million euros on the value of the company’s equity. On the date of completion of the sale, the French State will control AREVA TA (see note 3). Liquidity position and continuity of operations In 2016, the group’s liquidity was ensured by draws on available lines of credit in the amount of approximately 2 billion euros on January 4 and 5. At December 31, 2016, the short-termborrowings of AREVA’s continuing operations amounted to 831million euros, consistingmainly of bilateral lines of credit maturing over the course of 2017. In addition, AREVA guarantees NewCo’s borrowings (bond debt and financing of the Georges Besse II industrial asset in the total amount of 5.5 billion euros) until the execution of the NewCo capital increase planned in 2017. To meet these commitments and ensure the continuity of operations in 2017, the main sources of financing in 2017 are spread out as follows: p rescue aid in the form of two advances from the shareholder current account of the French State, one for AREVA in the amount of 2 billion euros and the other for NewCo in the amount of 1.3 billion euros, was authorized by the European Commission on January 10, 2017. These advances from the shareholder current account, to be credited to the capital increases planned in 2017, fill in the gap with the latter; p the purpose of said capital increases and the income expected from asset sales in 2017 (AREVA TA, Adwen and New NP) is to strengthen the financial structure of AREVA and NewCo and enable them to meet their liquidity requirements with regard to their obligations in 2017 and beyond, subject to, as concerns AREVA and 2017, the sale of New NP no later than the fourth quarter; p if the sale of New NP were to occur late in the year, AREVA SA has secured and accepted a commitment from its banking partners for “senior secured” interim financing of 300 million euros, expected to be signed in the near future and with a maturity date of January 8, 2018. Draws on this financing is conditioned on the French State’s subscription to the AREVA and NewCo capital increases. With regard to themilestones already met and the work remaining to be accomplished in connection with the process of selling New NP, AREVA has not identified items likely to compromise the completion of the New NP sale before the end of 2017. Moreover, AREVA is maintaining tight control of the sales process and

185

2016 AREVA REFERENCE DOCUMENT