Aéroport de Paris - 2018 Registration document

FINANCIAL INFORMATION ON THE ASSETS, FINANCIAL POSITION AND CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2018

RESEARCH AND DEVELOPMENT, TRADEMARKS PATENTS AND LICENCES

INFORMATION CONCERNING TRENDS

PROFIT FORECASTS

ADMINISTRATION AND EXECUTIVE MANAGEMENT BODIES

COMPENSATION AND BENEFITS OF CORPORATE OFFICERS

FUNCTIONING OF THE BOARD OF DIRECTORS AND MANAGEMENT BODIES

SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY INFORMATION

MAIN SHAREHOLDERS

OPERATIONS WITH RELATED PARTIES

9.5.3 Analysis of risks related to financial instruments RATE RISKS

calculated on a nominal loan amount agreed between the parties. These swaps are assigned to loan hedging. The Group enters into interest rates swaps where the critical terms match exactly with the terms of the hedged item. Therefore, the hedging relationship is qualified as 100% effective. If changes in the circumstances affect the terms of the hedged item such that the critical terms no longer match exactly with the critical terms of the hedging instrument, the Group uses the hypothetical derivative method to assess the amount of ineffectiveness. Hedge ineffectiveness may occur due to: ¯ the value adjustment on the interest rate swaps which is not matched by the hedged item; and ¯ differences in critical terms between the interest rate swaps and the loans hedged.

To supplement its available cash flow, the Group resorts to debt to finance its investment programme. The risk rate relating to the debt is managed by modulating the respective proportions of fixed rates and variable rates in line with market developments. The management of this risk depends on the implementation or cancellation of interest rate operations (swaps). The Group’s exposure to interest rate risk is essentially a result from its financial debt, and to a lesser extent its portfolio of rates derivatives. The Group’s policy consists of managing its interest charge by using a combination of fixed rate and variable rate loans. The Group’s policy is that 50% to 100% of its debt should be at fixed rates. In line with this objective, the Group puts in place interest rate swaps through which it exchanges, at specific intervals, the difference between the amount of interest at fixed rates and the amount of interest at variable rates,

The breakdown of financial debt at fixed and variable rate is as follows:

As at 31 Dec., 2018

As at 31 Dec., 2017

Before hedging

After hedging

Before hedging

After hedging

%

%

(in millions of euros)

Fixed rate

5,892

6,545

93%

4,578 1,333 5,911

4,991

84% 16%

Variable rate

1,174

521

7%

920

Debt (excluding derivatives)

7,066

7,066

100%

5,911

100%

As of 31 December 2018 the Group holds rate and exchange based derivative financial instruments (swaps), with a fair value of €21 million, appearing on the assets under other current financial assets, and €62 million appearing on the liabilities under financial debt. The notional amounts of fair value hedging derivatives may be analysed as follows:

Maturity between 1 & 5 years

Maturity > 5 years

As at 31 Dec., 2018 Fair value

Maturity < 1 year

(in thousands of euros)

Derivatives classified as cash flow hedges Derivatives not classified as hedges

- - -

95

558

653 400

(50)

400 495

-

8

20

TOTAL

558

1,053

(42)

The portfolio of non-hedging derivatives is made up exclusively of return swaps with a fixed margin. This part of the derivatives portfolio is therefore not very sensitive to change in interest rates. An immediate 1% decrease in interest rates on 31 December 2018 would not result in a material increase on the fair value of the derivatives.

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AÉROPORTS DE PARIS ® REGISTRATION DOCUMENT 2018