Areva - Reference Document 2016

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RISK FACTORS

4.7 Liquidity and market risks

4.7.4. RISK ON SHARES AND OTHER FINANCIAL INSTRUMENTS

THE GROUP HOLDS PUBLICLY TRADED SHARES IN A SIGNIFICANT AMOUNT AND IS THUS EXPOSED TO CHANGES IN THE FINANCIAL MARKETS. Publicly traded shares held by the group are exposed to the risk of volatility inherent in equity markets. In particular, the number of shares in the investment portfolio earmarked for end- of-lifecycle operations is given at December 31, 2016. The risk of a decrease in the price of shares and of other non-current financial assets is not systematically hedged.

The risk on shares held in the portfolio of assets earmarked for end-of-lifecycle operations is an integral component of asset management, which uses shares to increase long-term returns as part of its allocation between bonds and equities. In addition, the group is exposed to changes in the value of other financial instruments in its portfolio, in particular bonds and investment funds held in the portfolio earmarked for end-of-lifecycle obligations. Publicly traded shares held by the group are exposed to the risk of volatility inherent in equity markets. For more information, see Section 20.2. Notes to the consolidated financial statements , note 31. Market risk management .

4.7.5. RISKS ASSOCIATED WITH URANIUM, ENRICHMENT AND CONVERSION

4.7.5.1. RESERVES AND RESOURCES The group’s uranium reserves and resources are estimates only, drawn up by the group based on geological assumptions (e.g. core drilling results) and economic assumptions; there is no guarantee that actual mining operations will produce the same results. The group could be led to modify these estimates if there is a change in evaluation methods or geological assumptions, and/or a change in economic conditions (see Section 6.4.1.1, Mines ). Estimates of uranium resources and reserves are updated annually to produce data for the Reference Document for the year ended. The functioning of the Resources and Reserves Committee is described in Section 6.4.1.1. Mines . It is not possible to guarantee that the projected quantities of uranium will be produced or that the group will receive the expected price for these ores, which is indexed to market performance, in accordance with the contractual terms agreed upon with the customers. There is no assurance that other resources will be available. Moreover, uraniumprice fluctuations, production cost increases and declining mining and milling recovery rates can affect the profitability of reserves and require their adjustment. In Section 6.4.1., AREVA reports 6,510 metric tons of measured and indicated uranium resources and 6,250 metric tons of inferred resources for Katco. As of the date of this document, AREVA is still waiting for confirmation of this tonnage by the Kazakh organization in charge of approving the registration of these resources in the Kazakh State’s balance.

PRICE MOVEMENTS OF URANIUM, ENRICHMENT AND CONVERSION

4.7.5.2.

Fluctuations in the prices of uranium, uranium conversion and uranium enrichment could have a significant negative or positive impact on the financial position of the group’s mining, enrichment and conversion operations. Although the group operatesmostly as a provider of processing services for uranium, of which the customers are generally owners, it remains exposed to uranium price risk in its mining operations and to uranium conversion and enrichment services price risk. Prices for natural uranium and conversion and enrichment services have fluctuated widely in the past and depend on factors that are beyond AREVA’s control. These factors include demand for nuclear power; economic and political conditions in countries which produce or consume uranium, including Canada, the United States, Russia, other CIS republics, Australia, and some African countries; nuclear materials and used fuel treatment; and sales of surplus civilian and defense inventories (including for example those from the dismantling of nuclear weapons). If the prices for natural uranium, conversion and enrichment were to remain below production costs over a prolonged period, this could have a negative impact on the group’s mining operations and uranium conversion and enrichment operations.

4.7.6. RISK ON OTHER COMMODITIES

The group has little exposure to price variations for in commodities other than those mentioned in paragraph 4.7.5.

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2016 AREVA REFERENCE DOCUMENT