Understanding financial statements

This page contains a financial information summary structured around 3 main areas: consolidated income statement, consolidated balance sheet and cash flows.

Consolidated income statement

This table summarizes the AREVA group's performance during fiscal years 2007 and 2008.

In millions of euros	2008	2007
Revenue (1)	13,160	11,923
Gross margin	2,286	2,762
Research and development costs	(453)	(421)
Commercial, general and administrative costs	(1,587)	(1,410)
Other operating income and expenditure	171	(123)
Reorganization expenses and CATS-CASA	-	(57)
Operating income (2)	417	751
Financial results	(29)	64
Tax on earnings	(46)	(81)
Net income for all incorporated companies	343	734
Share of income from affiliated companies (3)	156	148
Income net of tax on ordinary activities	498	882
Minority interests	(91)	(139)
Group net profits (4)	589	743

Consolidated balance sheet

This table lists all of the AREVA group's assets and liabilities during the fiscal years 2007 and 2008.

Assets
In millions of euros	12/31/2008	12/31/2007
Non-current assets	22,841	21,425
Goodwill (1)	4,803	4,377
Fixed assets	8,002	6,933
End-of-cycle assets (3^rd party share) (2)	270	2,491
Hedging assets for end-of-cycle transactions (3)	4,954	2,873
Shares in affiliated companies	1,757	1,558
Non-current financial assets	2,152	2,588
Deferred tax assets	900	604
Current assets	11,804	9,251
Stocks and outstanding liabilities	3,403	2,817
Trade receivables and other receivables	4,486	3,884
Other accounts receivable	2,434	1,402
Current taxes - assets	164	94
Cash and other financial assets (4)	1,317	1,054
Total assets	34,644	30,676

* Excluding equity from discounted operations
** Including debt to Siemens

Liabilities
In millions of euros	12/31/2008	12/31/2007
Equity and minority holdings	7,292	7,464
Non-current liabilities	11,795	11,951
Net personnel benefits	1,267	1,175
Provisions for end-of-cycle transactions (2)	5,674	5,075
Other non-current provisions	123	121
Non-current financial debts (4)	3,969	4,302
Deferred tax liabilities	760	1,277
Current liabilities	15,588	11,261
Current provisions	2,081	1,823
Current financial debts (4)	2,693	613
Advances and deposits received	4,752	4,172
Supplier receivables and other receivables	2,991	2,565
Other operating debts	2,884	1,921
Current taxes - liabilities	104	127
Other non-operating debts	53	41
Total liabilities	34,644	30,676

(1) Net goodwill assets

The net goodwill assets have gone from 4,377 million euros as on December 31, 2007, to 4,803 million euros on December 31, 2008, representing a net increase of 426 million euros. This trend in goodwill assets is primarily the result of:

the impact of changes to the Uramin goodwill assets for 83 million euros in the Front End business group, following finalization of the PPA;
acquisition of Koblitz for 48 million euros and the reduction of Multibrid's goodwill assets by 15 million euros in the Reactors and Services Business Group;
acquisition of Nokian Capacitors (for 29 million euros) and Waltec (for 30 million euros);
consideration for sales options held by minority AREVA NP shareholders, resulting in an increase in goodwill assets by 185 million euros.

(2) End-of-cycle transactions

The IFRS balance sheet allows reconcilement of:

provisions associated with end-of-cycle transactions (5,674 million euros at December 31, 2008, 270 of which are to be funded by 3^rd parties and 5,404 by AREVA);
assets related to these provisions: 3^rd party share end-of-cycle assets (270 million euros) and hedging financial assets for end-of-cycle transactions (4,954 million euros).

On December 31, 2008, the dedicated portfolio (in assets: "hedging assets for end-of-cycle transactions") was around 4.9 billion euros in market value.

(3) Cash and other financial assets

Net debt

On January 27, 2009, at its General Meeting, SIEMENS announced its intention to exercise the option to sell its 34% holding in AREVA NP's capital.

As a result of the upcoming negotiations with SIEMENS, AREVA has opted to retain the value of the sales option in financial debts at the same value as that which was assessed on December 31, 2007, namely 2,049 million euros.

Based on this evaluation, the group's net financial debt amounted to 5,499 million euros, compared with 4,003 million euros at the end of 2007. Having taken this sales option in account, the net debt totaled 3,450 million euros, compared with 1,954 million euros in 2007.

Dedicated assets covering provisions for end-of-cycle transactions

At the end of 2008, the provisions associated with end-of-cycle transactions amounted to 5,674 million euros, compared with 5,075 million euros at the end of 2007. The part funded by AREVA amounted to 5,404 million euros. The financial portfolio established to cover end-of-cycle transactions amounted to 4,954 million euros as of December 31, 2008.

Dividend of 7.05 euros proposed at the General Meeting

The Supervisory Committee proposed a dividend of 7.05 euros per share and per investment certificate for fiscal year 2008 at the General Meeting on April 30, 2009. This dividend, corresponding to a distribution rate of 42.4% of the group's net profits, was paid out on June 30, 2009.

(4) Financial debts

As a result of the upcoming negotiations with SIEMENS, AREVA has opted to retain the value of the sales option in financial debts to the same value as that which would was assessed on December 31, 2007, namely 2,049 million euros.

Based on this evaluation, the group's net financial debt amounted to 5,499 million euros, compared with 4,003 million euros at the end of 2007.

Before taking this sales option into account, the net debt was 3,450 million euros, compared with 1,954 million euros in 2007.

Cash flow tables

In millions of euros	2008	2007
Gross self-financing margin	904	1,294
WCR variation (1)	(446)	(416)
Cash generated by activities	81	722
Cash associated with investment transactions	(1,259)	(2,796)
Cash associated with financing transactions	1,516	1,522
Reduction (increase) in investment shares	42	178
Impact of fluctuations in scope, exchange rates etc.	(22)	(7)
Total increase (reduction) in cash	357	(381)
Net cash at start of fiscal year	520	901
Cash at close of fiscal year	1,050	634
Current bank loans and similar	(172)	(113)
Net cash at close of fiscal year	877	520

(1) Fluctuations in working capital requirements

The group's working capital requirement (WCR) is structurally negative, given the significance of client advances primarily associated with the long term-activities of the Back End Business Group.

It amounted to - 488 million euros on December 31, 2007, compared with - 736 million euros one year previously. This consumption of 248 million euros in cash is essentially explained by fluctuations in the operating WCR.

The operating WCR fluctuations corresponded, for the 4^th consecutive year, to cash usage of 432 million euros in 2007.