SAINT_GOBAIN_REGISTRATION_DOCUMENT_2017

Financial and accounting information 2017 Consolidated financial statements

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

Fair value

Nominal amount by maturity

Derivatives recorded in liabilities

Derivatives recorded in assets

Dec.b31, 2017

Dec.b31, 2016

Within 1 year

1 to 5 years

Beyond 5 years

Dec.b31, 2017

(inɸ€ millions)

FAIR VALUE HEDGES Cash flow hedges Currency

0

0

0

6 0 4

(23) (71)

(17) (71)

231 (70)

2,782

0 0 0

0

2,782

Interest rate

0

377

377

Energy and commodities

0 0

4

5

18

0

18 77

Other risks: equities

14 24

14

13

0

30 30

47

CASH FLOW HEDGES – TOTAL Derivatives not qualifying for hedge accounting mainly contracted by Compagnie de Saint-Gobain Currency

(94)

(70)

179

2,800

424

3,254

83

(11)

72

(5)

6,185

12

0 0 0

6,197

Interest rate

0 0

0 0

0 0

0 0

0 0

0 0

0 0

Energy and commodities

DERIVATIVES NOT QUALIFYING FOR HEDGE ACCOUNTING – TOTAL

83

(11)

72

(5)

6,185 8,985

12 42

0

6,197 9,451

TOTAL

107

(105)

2

174

424

Currency instruments 8.4.1. Currency swaps

Credit value adjustments to derivative 8.4.5. instruments Credit value adjustments to derivative instruments are calculated in accordance with IFRS 13 based on historical probabilities of default derived from calculations performed by a leading rating agency and on the estimated loss given default. At December 31, 2017, credit value adjustments were not material. Impact on equity of financial 8.4.6. instruments qualifying for cash flow hedge accounting At December 31, 2017, the cash flow hedging reserve carried in equity in accordance with IFRS had a credit balance of €21 million, consisting mainly of: a debit balance of €29 million in relation to cross-currency „ swaps designated as cash flow hedges that are used to convert a GBP bond issue into euros; a credit balance of €49 million corresponding to changes „ in the fair value of currency hedges taken out in relation to the acquisition of a controlling interest in Sika, breaking down as: a credit balance of €70 million taken to equity when the „ initial hedge was unwound, a debit balance of €21 million corresponding to changes „ in the fair value of the new hedge, measured at a spot exchange rate of CHF 1.17 for €1. An increase of 10% in this exchange rate would result in a decrease of around €245 million in equity. A decrease of 10% in this exchange rate would have the opposite impact. The ineffective portion of cash flow hedging derivatives is not material.

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 Forward foreign exchange contracts and currency options are used to hedge foreign currency transactions, particularly commercial transactions (purchases and sales) and investments. Interest rate instruments 8.4.2. Interest rate swaps 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 The Group uses cross-currency swaps to convert foreign currency debt (euro debt) into euro debt (foreign currency debt). Energy and commodity instruments 8.4.3. Energy and commodity swaps Energy and commodity swaps are used to hedge the risk of changes in the price of certain purchases used in the Group subsidiaries’ operating activities, particularly energy (fuel oil, natural gas and electricity) purchases. Other risks 8.4.4. Equity derivatives Equity derivatives are used to hedge the risk of changes in the Saint-Gobain share price in connection with the performance units long-term incentive plan.

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