SNCF EN 1606.Indd 1 O U V F I N S N C F E N 1 6 0 6
CCouv_FIN_SNCF_EN_1606.indd 1 o u v _ F I N _ S N C F _ E N _ 1 6 0 6 . i n d d
1 G ROUPE
FINANCIAL REPORT 2005 FINANCIAL REPORT 2005
G ROUPE 116/06/06 12:45:50 6 / 0 6 / 0 6
1 2 : 4 5 : 5 0 SNCF Direction de la Communication Direction de la Comptabilité et du Contrôle de gestion 34, rue du Commandant Mouchotte 75699 Paris Cedex 14 www.sncf.com
Photo credit: SNCF /CAV Dominique Larosière
Design and production:
Printing: Sérag Imprimerie Document printed on ECF paper (Elementary Chloring Free)
June 2006
The 2005 Financial Report is published in French and in English. It is also available on the site www.sncf.com.
22_3_3 CCouv_FIN_SNCF_1506_EN.inddouv_FIN_SNCF_1506_EN.indd 1 115/06/065/06/06 115:16:055:16:05 1
GROUP MANAGEMENT REPORT All amounts are in millions of euros (€ millions), unless stated otherwise.
1- SNCF GROUP STRUCTURE 2
2- SIGNIFICANT EVENTS OF THE YEAR 4
2.1 Environment 4 2.2 Group Strategy 5 2.3 Highlights 6
3- SNCF GROUP 8
3.1 Consolidated Net Income 8 3.2 Cash Position and Finance Sources 11 3.3 Changes in Accounting Method 12 3.4 Balance Sheet 14 3.5 Financial Relations with the French State, Réseau Ferré de France and Local Authorities 15 3.6 Human Resources 17
4- ACTIVITIES AND RESULTS BY DIVISION 19
4.1 Long-distance Passengers, France & Europe Division 19 4.2 Public Transport Division 21 4.3 Freight Division 23 4.4 Infrastructure Division 26 4.5 Common Operations and Investments Division 27
5- CORPORATE GOVERNANCE 28
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LONG-DISTANCE PUBLIC FREIGHT INFRASTRUCTURE COMMON PASSENGERS, FRANCE TRANSPORT DIVISION DIVISION OPERATIONS & EUROPE DIVISION DIVISION AND INVESTMENTS DIVISION MAIN LINES - STATIONS TRANSILIEN SNCF FREIGHT INFRASTRUCTURE TRANSVERSAL MAINTENANCE FUNCTIONS TGV CORAIL INTERCITY TRANSPORT AND AND MANAGEMENT, LOGISTICS OPERATORS PROJECT MANAGEMENT, EQUIPMENT ENGINEERING CORAIL TER TRACTION Combined INTERNATIONAL Alsace activity Naviland Cargo SNCF International HOUSING LONG-DISTANCE Aquitaine activity Novatrans Systra Group SICF TRANSPORT Auvergne activity Rouch AREP SFCI Froidcombi Eurostar Basse-Normandie activity ORFEA Écorail Thalys Bourgogne activity Rail motorway Artesia Bretagne activity REAL ESTATE CME Rhealys Centre activity SNEF Group Distribution Lyria Champagne-Ardenne activity SCI Ney Districhrono Elipsos Franche-Comté activity SCI du Cercle Haute-Normandie activity Grain SNC Monceau Languedoc-Roussillon activity Logistra SNC Vézelay CTC TRANSPORT-RELATED Limousin activity Nuclear chemicals and SERVICES Lorraine activity FINANCING Midi-Pyrénées activity indivisible loads GIE fi nancière SCETA Services Nord-Pas-de-Calais activity STSI Eurofi ma A2C Pays-de-la-Loire activity Automobile SPFRD Distribution Picardie activity STVA and new services Poitou-Charentes activity Geodis Group OTHERS Rail Europe Ltd Provence-Alpes-Côte d’Azur France Seafrance Voyages-sncf.com activity Europe (excl. France) SCETA Services Rail Europe INC Rhône-Alpes activity Rest of the world Ceretif VFE commerce Chemins de fer de la Corse Port facilities Shem VSC Technologie Sealogis L’Agence Voyages-sncf.com International ®iDTGV Keolis Group Fret International Freight cars Effi a Group France Wagons Ermewa SGW Final-stage carriage and logistics VFLI Garmatex
FINANCING AND OTHER SERVICES Segi Sefergie Stesimaf Edifret
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Legal structure 723 entities
SNCF
Eurofi ma SICF SNCFP Voyageurs France SFCI Naviland Geodis Europe Eurostar SEMAPA Calberson Cargo 259 entities Partenaires Group FRP SHEM 4 entities 4 entities Novatrans Bourgey Transmanche Montreuil Night Travel Fret SOCRIF Rouch Ltd intermodal International Geodis 9 entities French GIE Logistics Railways Ltd Intercapital Eurail Test Froidcombi Regional Rail Züst Ltd Seafrance Ambrosetti French Rail Sefergie Inc. ORFEA Vitesse Districhrono Rail Europe Groupe Ltd GIE Sealogis United Garmatex 4 entities Financière 11 entities Distribution G. Rail Europe Sceta Group Inc. Ecorail Rail Europe Espagne SRL SNEF STSI EFA Rail Europe SCI Ney Logistra Benelux EFT Rail Europe Suisse Sceta Edifret VFLI Rail Europe SCI Services 15 entities Italia La Chapelle Rail Europe Stesimaf Deutschland SCI Financière Lyria EF2R du Cercle CWS Ermewa Thalys SCI Groupe International Vézelay Cie Modalhor Express Ermewa Holding Genève VFE SNC Commerce 8 entities L’Agence
Monceau LONG-DISTANCE PASSENGERS, FRANCE & EUROPE DIVISION France Voyages- GEIE Wagons Ermewa sncf.com CERETIF Sysrail/Data France CTC 22 entities Voyages- SPFRD ® iDTGV sncf.com SGW STVA 37 entities CRM VSC AREP SEGI Services Technologies
SNCF A2C SARI Parvis International Rhealys SA Trans- SAM Financière informatique Systra KEOLIS RE 4A 210 entities Groupe Elipsos Systra EFFIA 46 entities 11 entities Artesia PUBLIC TRANSPORT DIVISION FREIGHT DIVISION FREIGHT COMMON OPERATIONS AND INVESTMENTS DIVISION DIVISION INFRASTRUCTURE
Full consoIidation Proportionate consolidation Equity accounted Non consolidated
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2.1 Environment household consumption generated favourable impacts to the development of passenger traffi c essentially for home- work commuting. However, the increase in the price of oil A Mixed Macro-economic Environment products reduced the revenue available to the French for leisure travel. The macro-economic environment for fi scal year 2005 In addition, weak industrial production has hindered can be described as mixed. While the extent of the third industrial freight traffi c development, particularly for SNCF quarter upturn in the French economy was surprising, INSEE Freight, while the rise in oil prices has strained road and statistics repor ted grow th of only 1.6% for French economic rail operating costs for freight and generated price increase activity in 2005. impacts for the electricity market, increasing energy costs The situation was particularly marked by: for rail carriers. • A recognised oil shock whose impact remains muted; Finally, low interest rates limit the fi nancial income SNCF • Contrasting changes in internal Euro zone demand; driven could have drawn from the rapid improvement of its cash posi- by an oil price increase, Euro zone infl ation rose from 2.1% tion. In terms of structural costs, the low infl ation rate restricts in June 2005 to 2.5% in October, although experts are the margin for manoeuvre with respect to the price of ser vices banking on a slowdown in the trend; offered by the various Group companies, even though certain • Poor growth in the French manufacturing sector (–0.2% companies are faced with average wage increases that are in the third quarter following +0.3% in the second quarter structurally higher than the infl ation rate, thereby creating an and –0.3% in the fi rst quarter), even though the business unfavourable environment for job growth. climate indicator has been up since the spring of 2005; • A recovery in salaried jobs complemented by an accelera- tion of the subsidised employment programme; A Changing Rail Sector • A decline in household spending in the second quarter (–0.1%), and a sharp rebound in the third quarter (+0.7%), SNCF will have to confront major structural changes following a leap in consumption during the 2004-2005 at the Community and national level, which will intensify winter. Overall, average annual growth in consumption competition in the short term for international freight traffi c stood at 2%, corresponding to a virtually stable savings and for all national and international freight and passenger rate. According to INSEE, the surge in household spending traffi c in the longer term. essentially acted as a stimulus to consumer business and Accordingly, law 2006-10 relating to transport safety services; and development, which transposes into domestic law • Historically low interest rates with a very low slope and certain European Community commitments undertaken by an increase of 25 basis points in ECB offi cial rates on France, introduced four major changes: 1 December 2005 after two and a half years of status quo. • It creates, pursuant to EC Directive 2004-49 on Euro- The impacts on the SNCF Group are remarkably diffi - pean Community Railway Safety, a French Railway Safety cult to analyse. With respect to the main positive impacts, Agency, to act as domestic safety authority in this area. The the increase in petrol costs and the relative fi rmness in agency will grant safety certifi cates and monitor compliance
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with safety and interoperability rules. It will be fi nanced by tiveness and solidarity, the two factors indispensable to the the infrastructure fees paid to RFF by the rail carriers; Company’s endeavour. • It transposes EC Directive 2004-51 (“second railway The 2006-2008 corporate plan will concentrate on three package”) by opening up the rail freight market to competi- focal points: tion, keeping in mind that the opening up to competition of • A strategy calling for substantial development in France the domestic freight market as of 31 March 2006 was one and Europe: sound fi nancing for investment growth, deve- of the European Commission’s requirements for authorising lopment of European partnerships and active preparation the recapitalisation of SNCF Freight; for the opening up of certain Group core businesses to • It authorises the use of public-private partnerships for the competition; creation of rail infrastructures, in the form of a partnership • A strategy based on the policy governing a public sector contract within the meaning of the Decree of 17 June 2004, enterprise providing a public service: consolidation of the or in the form of a public service delegation, aimed at accele- fundamentals (safety, punctuality, information) and exten- rating the implementation of such infrastructures. At the sion of the advances made with respect to services, sustain- same time, it reaffi rms the SNCF monopoly over the main- able development and persons with reduced mobility; tenance of safety facilities and management of traffi c; • Accelerated creation of strategy implementation tools: • It automatically passes on changes in the price of diesel rationalisation of the SNCF Group organisation based on oil to transport contracts. its industrial divisions, consolidation of the integrated com- Similarly, the European Union Transport Council has set pany, managerial renewal and stimulus to innovation in all 1 January 2010 as the date international passenger transport activities. will be opened up to competition. Cabotage will be limited so SNCF has clearly stated its ambitions in France and that it does not simply become an opening of the domestic Europe through a strategy that will yield new purpose, as market in another form. France can also subject foreign well as greater effi ciency and solidarity. transport companies travelling in Metropolitan France to the Within this strategic framework, the SNCF Group intends equalisation system that fi nances national development. In to comply with the procedures governing sound develop- addition, the traditional operators of the European rail sector ment fi nancing, while ensuring that operating cash fl ows underwent numerous restructurings and reorganisations, cover equity-fi nanced investments. particularly in Spain, Belgium and Austria, and there were intense debates on the future of Deutsche Bahn. Fiscal year 2005 also saw the publication of the decree The Search for Innovation: organising the transfer of the majority of the Syndicat des “Boosting Rail with New Ideas” Transports en Île-de-France to the Île-de-France region, through the set-up of the Agence de fi nancement des infra- In order to play a leadership role in a rail environment struc tures de transport, which was granted €4.7 billion that is now European, SNCF is searching for innovation under the Finance Law of 2006 and by the circulation of the in all areas: passenger or freight services, equipment and fi rst freight transfer train from a competitor in June 2005. infrastructure industrial processes, fi nancial operations and human resources. This will to forge the future is symbolised in a new logo, a new signature “Boosting rail with new ideas” and a new sonic branding. In the last ten years, SNCF has undergone 2.2 Group Strategy a metamorphosis. It is now a customer-focused organisa- tion that has developed innovative commercial policies and revamped its managerial practice as well as its fi nancial 2006-2008 Corporate Plan: management. In pursuing this change momentum, the Competi tive ness and Solidarity SNCF Group has come to the fore as a European transport leader. Fiscal year 2005 saw the fi nalisation of the corporate plan for 2006-2008, the period during which the SNCF Group intends to make new progress in terms of competi-
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2.3 Highlights project: construction work for the new line, building of stations and workshops in Ourcq and Lyon for Infrastruc- ture, renovation of TGV trains for Equipment, defi nition of SNCF revenues rose signifi cantly in 2005, the result Main Line offers, and refurbishing of stations for Stations/ of a signifi cant commercial impetus, pursuit of the expan- Staging Points. sion in Europe, and more rigorous cost-control, enabling After several months of discussion between the French it to achieve unprecedented results that were in line with State and the local authorities fi nancing the project, the the strategic and fi nancial trajectory charted over several services were approved and presented to the East Euro- years. pean monitoring committee on 2 February 2005. The industrial transformation of the SNCF Group’s In addition, a joint venture between SNCF and Deutsche core businesses is ongoing, particularly for the main loss Bahn will soon be created to operate TGVs and ICEs between centres: SNCF Freight, Corail Intercity, VFLI, and Naviland Paris and Frankfurt and Paris and Stuttgart-Munich. Cargo (formerly CNC). The ambitious investment programme pursued by the Group constitutes a major pillar in its development. Invest- Publication of the Infrastructure ments fi nanced through Group equity amounted to €1.7 International Audit billion in 2005, growing by 22%. As part of the Group’s decision to refocus on core busi- The three objectives assigned to this report, which nesses, the Sernam assets were sold in accordance with was jointly ordered in 2004 by Réseau Ferré de France and the European Commission’s wishes, as was the interest in SNCF, were to outline the actual state of infrastructures Cegetel by exercising the put option in connection with the and projected changes, assess the relevance of current Neuf-Telecom merger. The SNCF Group divested itself of maintenance and renewal policies and evaluate the tech- the 40% interest in its energy subsidiary, SHEM. nical and economic effectiveness of these policies and their implementation by SNCF. The report, which was submitted and published in First Year for Corail Intercity September 2005, met these objectives. It reiterated the within the Public Transport Division extent of the French network, its age and the varied use of its rail lines. While it underscored network-wide safety, Corail Intercity was created on 1 January 2005 through it noted the age of facilities. The report highlighted poten- a partial acquisition of the VFE Corail services. The terms tial improvements to maintenance effi ciency, in particular and conditions governing the restructuring and fi nancing through the implementation of more reliable operational of these heavily loss-making services were determined in planning and an extension in the range of procedures. The the fi rst half with the French State and the Association des report notes that for several years France has spent less Régions de France. on maintenance (upkeep and renewal) by kilometre of track These services come under the authority of the national than most European countries and that the investment in network and contribute to regional development. Under renewal is insuffi cient. its terms of reference, SNCF has the authority to manage The main recommendations are to reduce the average these services and develop them based on customer age of infrastructures and improve the network’s operating expectations. methods using an ongoing renewal and modernisation strategy. As an initial step, the public authorities have already The East European TGV boosted the budget for renewal by €70 million for 2006. Mobilises the Group Based on the report and at the request of the public authori- ties, the RFF and SNCF chairmen are preparing proposals On 24 October 2005, RFF announced the offi cial conclu- for a global plan to progressively improve the condition of sion of the civil engineering work on the East European the national rail network on a long-term basis. high-speed line. The planned timetable was respected for this essential component of the work for which SNCF acted as project manager (for four of the line’s eight sections). A signifi cant portion of the Group was mobilised for the
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A New Stage in the SNCF Freight Plan Buyout of Sernam by the Company’s Management as Part of Commitments The industrial, commercial and strategic transformation vis-à-vis the European Commission of SNCF Freight continues with the objective of organising one of the two leading rail freight entities within a European SNCF has scrupulously complied with the European market that is open to competition. Commission’s decision by committing to an open, trans- Bolstered by this objective, SNCF Freight will support parent and non-discriminatory process as of 2004. The aim its clients in the drive for new international markets, parti- is to select a buyer wishing to acquire blocks of Sernam cularly through partnerships. SNCF will thus reinforce its shares at a market price. cooperation with Deutsche Bahn. As of the month of June, The proposal submitted by the Sernam management all rail border points between Germany and France can be team was received on 30 June 2005. crossed without interruption. Railion DB and SNCF Freight have dedicated conductors and 40 locomotives that are adapted to the two networks. Gradual Disposal of SHEM The restructuring of industrial facilities is continuing with and Disposal of Cegetel SAS a reduction in the car and locomotive fl eets, an upgrade of the locomotive fl eet with nearly 1,000 locomotives ordered The partnership agreement signed on 6 November since 2004, and a simplifi cation of certain operating plans, 2002 stipulates that SNCF will sell put options for 80% involving Combined Transport for example. of the capital of Société Hydroélectrique du Midi (SHEM) Despite the diffi culties encountered in 2005 (a lack- to Electrabel (Suez Group). Accordingly, SNCF sold 40% lustre market, labour unrest and certain internal dysfunc- of the capital of the electricity production subsidiary on tions), SNCF Freight was able to reduce its defi cit by €165 20 January 2005; a second tranche of 40% will be irrevo- million (–43%). cably sold in January 2007. In May 2005, amidst a wave of consolidation in a very competitive market and considerable commercial invest- New Economic Model ments to increase customer bases, Cegetel SAS concluded for Naviland Cargo a merger with Neuf-Telecom. Prior to this transaction, SNCF sold its remaining 35% interest in Cegetel SAS to SFR, by The CNC Monitoring Committee acknowledged that the exercising the put. nodal system model used to develop the company some ten years ago is economically impracticable. In its search for a long-term economic and industrial model, the Group Tax Audit has steered CNC activity towards maritime containers and tanks by closing the forwarding agent business. Throughout 2005, the SNCF accounts were audited The opening of 66% of the company’s capital to ship- with respect to fi scal years 2002 and 2003. Following the owners, forwarding agents and investors is under review. audit, SNCF was reassessed in the amount of €5.3 million The company, now called Naviland Cargo, will focus exclu- for payroll tax and €10 million for the business licence tax. sively on combined maritime transport. The repositioning Assessments were also notifi ed for corporate income tax, will result in a renewed economic model and corporate though there is no fi nancial impact given the SNCF loss structure, an optimised transport plan and more competi- carry-forwards. With respect to VAT, all potential disputes tive rates. have been abandoned.
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3.1 Consolidated Net Income
In € millions 2005 2004 2004 Pro forma change PROFORMA PUBLISHED IN € MILLIONS IN%
Consolidated revenues 20,994 20,231 22,059 764 4% Capitalised production and production for stock 1,162 754 755 408 54% Operating subsidies 30 37 37 –7 –20% Purchases and external charges –10,419 –9,776 –10,574 –643 7% Taxes and duties other than income tax –811 –728 –763 –83 11% Personnel costs –9,157 –8,899 –9,779 –257 3%
Gross operating income 1,800 1,618 1,735 181 11% Depreciation, amortisation and provisions, net –969 –1,043 –1,100 74 –7% Other operating income and expenses 5 –1 12 6 678% Net operating income 836 575 647 261 46%
Net fi nancial expense –303 –358 –361 56 16%
Net income from ordinary activities of consolidated companies 533 216 287 317 –147% Exceptional items 844 202 196 642 317% Income tax –34 6 –25 –40 –690%
Net income of consolidated companies 1,343 424 457 919 217% Share in earnings (loss) of equity affi liates –29 0 –20 –29 –15,747% Amortisation of goodwill –10 –31 –36 21 –66%
Consolidated net income 1,304 393 401 910 231% Minority interests 32 65 78 –33 –51%
Net income for the year (Group share) 1,271 328 323 943 288%
Comparability of Financial Statements • The equity-accounting of SHEM, previously fully consoli- dated, as of 1 January 2005; Several signifi cant changes in Group structure had an impact • The full reconsolidation of SICF (French property building on the comparability of 2005 and 2004 net income: company – holding company for the housing division) as of • The equity-accounting of Keolis, previously fully consoli- 31 December 2005 following the 20-year limit restricting dated, as of 1 September 2004; the reporting of the company’s results being exceeded. • The disposal of Sernam, previously fully consolidated;
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In addition, the Systra group was proportionately-conso- €115 million for gross operating income and €79 million for lidated as of 1 January 2005. The group was previously net income from ordinary activities. equity-accounted. The 2004 pro forma income statement includes these Finally, Cegetel was equity-accounted until 22 August changes and the adoption of the regulation regarding asset 2005, prior to the sale to SFR. depreciation and impairment, for which the impact on The impact of each of these changes in Group structure depreciation, amortisation and provisions amounts to –€26 on 2005 net income is as follows: mil lion (see Note 3.3). Overall, the impact of changes in Group structure resulted in a decrease of nearly €1.6 billion for revenues,
in € millions Revenues Gross operating Net income (loss) INCOME (LOSS) FROM ORDINARY ACTIVITIES
Equity-accounting of Keolis –1,535 –76 – 4 4 Equity-accounting of SHEM –79 –49 –44 Disposal of Sernam –45 +8 +7 Proportionate consolidation of Systra +84 +2 +2
Revenues (Talent programme for purchasing, productivity efforts from SNCF Freight and Infrastructure, rationalisation of rail Revenues rose by 4% compared to 2004 on a constant path management, etc.). The margin rate (gross operating Group structure basis. The improvement of €763 million is income/revenues) increased by 0.6%, standing at 8.6%. attributable to the strength of Passenger activities (Long- Gross operating income rose for the four main divisions: distance Passengers, France & Europe and Public Trans- following a return to the black in 2004, the line item increa sed port), which contributed 78% to Group revenue growth. over seven fold for Freight (€19 million to €146 million); Revenues for the four main divisions increased: Long- Long-distance Passengers, France & Europe was up 16%, distance Passengers, France & Europe, +6% to €5.9 billion, exceeding €1 billion; Public Transport was up 2% to stand at Public Transport, +5% to €5.5 billion, Infrastructure, +3% €417 million; and Infrastructure re-established a positive fi gure to €4.3 billion and Freight, +1% to €6.7 billion. at €7 million, compared to –€12 million in 2004. The main contributors to the formidable commercial momentum were the Main Line rail carriers (growth of The two main contributors to the improvement in €285 million, +6%), Geodis (+€249 million, +7%), TER gross operating income were the VFE Main Line carriers activities (+€141 million, +5%), SNCF Infrastructure (up by €133 million) and SNCF Freight (up €109 million). (+€130 million, +3.2%) and Transilien (+€93 million, +4%). Conversely, Seafrance (–€26 million), Transilien (–€11 million) Conversely, the commercial repositioning, production and the TER activities (–€10 million) hindered growth for diffi culties and external circumstances of SNCF Freight the item. The cost of strikes, up by €81 million in 2005 (–€200 million, –10%) and the restructuring of Naviland compared to 2004, and the €74 million increase in RFF Cargo (–€71 million, –44%) had a negative impact on the infrastructure fees not reinvoiced to the Organising Authori- Group’s surging commercial growth. ties had a negative impact on the item.
Gross Operating Income
On a constant Group structure basis, gross operating income increased by €181 million to reach an unprecedented €1.8 billion. In addition to activity growth, the item has bene- fi ted from intensifi ed measures to control operating costs
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Net Operating Income current defi cit). The losses for TER activities (–€23 million), Transilien ( – €28 million) and Seafrance (–€19 million) impeded Net operating income amounted to €836 million, an the item at Group level. It bears mentioning that VFLI increase of €261 million on a constant Group structure returned to break-even in 2005. basis. The margin rate (net operating income/revenues) rose by 1.1% to stand at 4%. The item improved for three of the four main divisions: Exceptional Items Freight reduced its operating defi cit by 80%, limiting it to €51 million; Long-distance Passengers, France & Europe Exceptional income totalled €844 million and essen- rose by 35% to reach €839 million; Infrastructure cut its tially included capital gains recognised on the disposal of operating defi cit by 22% to stand at –€55 million. Conversely, the majority interests in SHEM and Cegetel to the Suez Public Transport operating income declined by 14%, to stand Group and SFR respectively. at €122 million. Impairment losses were recognised in 2005 for Corail The two main contributors to the improvement in net and Corail Intercity assets (–€70 million). ope r a t i n g i n c o m e w e r e t h e V F E M a i n L i n e c a r r i e r s ( u p b y €188 million, or 32%) and SNCF Freight (up by €161 million, for a 52% reduction in the operating defi cit). However, the decline Share in Earnings of Equity Affi liates in operating income for the TER activi ties (€33 million), Tran- silien (€27 million) and Seafrance (€19 million) impeded The equity affi liates’ contribution to net income was growth in net operating income for the Group. negative (€29 million). Cegetel SAS contributed to the loss for €36 million prior to its sale to SFR in August 2005. The result includes the profi ts of SHEM and Eurofi ma, and the Net Financial Expense loss of Keos, the Keolis group holding company.
Consolidated net fi nancial expense amounted to €303 million, an improvement of €56 million in relation to 2004 Income Tax (–€358 million), as a result of a reduction in Group net indebtedness. The tax expense was up sharply (–€34 million in 2005 compared to +€6 million in 2004), as Geodis no longer benefi ts from tax loss carry-forwards. Net Income from Ordinary Activities of Consolidated Companies Net Income (Group Share) The item amounted to €533 million, compared to €216 million in 2004, on a like-for-like basis (constant Group Net income (Group share) was positive (€1,271 million structure and accounting methods). The margin rate (net compared to €328 million in 2004), after recognition of income from ordinary activities/revenues) increased by 1.4% minority interests for €32 million. to reach 2.5%. The line item improved for three of the four main divisions: Freight reduced its current defi cit by 59% to –€143 million, Long-distance Passengers, France & Europe was up 54% to €645 million, and Infrastructure reduced its current defi cit by 31% to –€46 million. Conversely, the line item declined by €11 million to stand at –€17 million for Public Transport. The two main contributors to the improvement were the VFE Main Line carriers (up €194 million, or 47%) and SNCF Freight (up €165 million, for a 43% reduction in the
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3.2 Cash Position and Finance Sources
In € millions 2005 2004 Pro forma PRO FORMA CHANGE
Cash from operations (a) 1,437 1,200 237 Total investments (1) –2,441 –1,974 –467 Subsidies 735 574 161 Equity-fi nanced investments (b) –1,706 –1,400 –305 (a)-(b) = available after fi nancing growth through operations –268 –200 –68 Change in working capital requirements 130 –87 216 Change in investment capital requirements 216 –2 218 Gains on disposal of assets (2) 978 329 649 Freight aid 250 250 Financing resource (requirement) 1,305 40 1,265
Net indebtedness at beginning of the year 7,661 7,739 –78 Financing resource (requirement) –1,305 –40 –1,265 Other fi nancing cash fl ows 8 –38 46 Net indebtedness at end of year 6,364 7,661 –1,297
(1) Excluding operating leases. (2) Comprising the gains on disposal of SHEM and Cegetel.
N.B. : The 2004 pro forma data was prepared by taking into account changes in Group structure and securitisation transactions as of 1 January 2004. The change in the investment capital requirement was excluded from the analysis of equity-fi nanced investments, since the amount reached at the end of 2005 was exceptional.
Cash Available after Financing Growth Through Operations
Group cash fl ow from operations amounted to €1,437 million in 2005, up €237 million compared to 2004 on a constant Group structure basis (€1,200 million), i.e. +20%. The Group pursued its ambitious investment program. Net investments fi nanced through equity rose 22% in 2005, increasing from €1,400 million to €1,706 million. Further efforts will be required if the Group is to pursue the fi nancing of investments via cash from operations, as the amount available after fi nancing growth through current operations was still negative at €268 million.
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Net Indebtedness
In € millions 31 December 2005 31 December 2004 Change
LT borrowings excluding accrued interest payable 13,724 15,441 –1,717 RFF receivables excluding accrued interest receivable –6,654 –8,263 1,609 Impact of swap contracts 142 413 –271 Net borrowings (a) 7,212 7,590 –379 Current net cash (b) –847 92 –940 Net indebtedness (a)+(b) 6,364 7,682 –1,318
Group net indebtedness declined by €1.3 billion, for a results, the decrease includes receipts on the partial decrease of 17%. In addition to the Group’s favourable disposal of SHEM and the disposal of Cegetel.
Sources of Financing 3.3 Changes Debt Management in Accounting Method The fi nancing set up in 2005 by EPIC totalled €1,609 million, up by €294 million in relation to 2004. Financing trans- Tangible Assets actions were conducted directly in euros at a fl oating rate or Application of the Regulation under initial foreign exchange contracts converting foreign Relating to the Depreciation and currency commitments into fl oating-rate euro commitments. Apart from the fi nancing procured by Eurofi ma and the Impairment of Assets (CRC 2002-10) Île-de-France loans, all transactions were carried out under the SNCF Euro Medium Term Notes (EMTN) programme. For the period from 1 January 2005 to 31 December In January, a fi rst transaction was conducted for US$300 2006, SNCF Group opted for the reallocation of net carrying million over 5 years, procuring €227 million fi nancing, after amounts as the initial recognition method, pursuant to the foreign exchange contract. Regulation governing the depreciation and impairment of In May, SNCF carried out two public transactions. The assets, as provided for in Emergency Committee notice fi rst, for a term of 15 years, was conducted on the euro 2005-D. market for €500 million. The second, on the Swiss market, In this same context, SNCF adopted a new method for totalled CHF600 million for a term of 7 years. Initially determining asset impairment based on international stan- launched for CHF300 million, investor interest was such dards. that the issue was increased to CHF 600 million in the Groups of similar assets, the use of which continues following days. Total revenue from the issue was subject to to generate cash fl ows that are largely independent of a foreign currency exchange contract. cash fl ows generated by other assets, were determined. When circumstances or events indicate that the assets are impaired, the Group examines the recoverable value of each asset grouping to which they belong. The recoverable value is the higher of the market value and the carrying value. The carrying value of these asset groupings is deter- mined by discounting the future cash fl ows expected to be derived from the asset. When this value is less than the net carrying amounts of the corresponding assets, an impair- ment loss is recorded for the difference. Application of these new methods had an impact of –€333 million on equity, of which –€7 million on 2005 net income, breaking down as follows:
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In € millions Impact Impact Impact ON EQUITY ON 2005 ON EQUITY AS AT 01/01/2005 NET INCOME AS AT 31/12/2005
Depreciation and amortisation, net (component approach) 0 26 26 Rolling stock 97 97 Fixed installations –71 –71
Asset impairment (losses in value) –326 –33 –359 Impairment of Corail and Corail Intercity rolling stock –326 –70 –396 Savings on depreciation 37 37
Total –326 –7 –333
Provision for major repairs 346 346
Total 20 –7 13
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3.4 Balance Sheet
In € millions 31/12/2005 31/12/2004
Goodwill 100 94 Intangible assets 187 121 Tangible assets 17,505 16,569 Réseau Ferré de France receivable 6,810 8,436 Other long-term investments 1,179 1,296 Equity affi liates 225 389 Total non-current assets 26,005 26,905
Inventory and work-in-progress 453 499 Operating receivables 4,895 4,443 Special debt account – Assets 263 131 Employee-related benefi ts service account – Assets 1,525 1,437 Cash and cash equivalents 2,402 1,735 Total current assets 9,537 8,245 Total assets 35,543 35,150
Share capital 4,521 4,271 Reserves and consolidated net income (loss) 240 –1,051 Shareholders’ equity (Group share) 4,761 3,220
Minority interests 209 179 Provisions for contingencies and losses 2,006 2,397 Loans and borrowings 16,045 18,032 Operating liabilities 11,734 10,730 Special debt account – Liabilities 248 135 Employee-related benefi ts service account – Liabilities 540 457 Total liabilities 28,567 29,354 Total liabilities and shareholders’ equity 35,543 35,150
Net debt/equity 1.3 2.3 Net debt/quasi-equity 0.9 1.3
There were signifi cant changes in the SNCF Group • Because of net income, equity increased by 47% to stand balance sheet in fi scal year 2005: at €4.7 billion. • Tangible assets increased by €935 million, because of As a result, debt ratios improved rather rapidly: the increased industrial capital expenditure for the Group; net debt/equity ratio thus decreased from 2.3 at the end • The RFF receivable, recognised as part of the 1997 of 2004 to 1.3 at the end of 2005, net debt/quasi-equity reform and in consideration of the transfer of the SNCF (equity +provisions) decreased from 1.3 at the end of 2004 liability related to the historical fi nancing of infrastructures, to 0.9 at the end of 2005, and net debt/cash from operations has been reduced by 19% to total €6.8 billion; decreased from 6.4 years at the end of 2004 to 4.4 years • The net cash position continues to improve: marketable at the end of 2005. securities and cash and cash equivalents amounted to €2.4 billion as of 31 December 2005, up by 38%;
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3.5 Financial Relations with the French State, Réseau Ferré de France and Local Authorities
SNCF receives public service orders, as is the case with the Public Transport Division, SNCF also receives compen- any public service agent or supplier to the French State and sation for off-balance sheet fi nancial and social security local authorities, but in a monopoly legislative and regula- expenses. The compensation is based on European Union tory framework. In addition to operating (€22 million) and regulations intended to equalise the conditions for competi- investment subsidies primarily received for the activities of tion between rail and other forms of transport.
Public Service Orders
In € millions 2005 2004 2005/2004 Change (IN MILLIONS (IN %) OF €)
Compensation of GI by RFF 2,653 2,663 –10 –0.4% including management agreement 2,556 2,564 –8 –0.3% including asset agreement 96 99 –3 –2.6% Work for RFF 1,029 890 139 15.6% Total RFF 3,682 3,553 129 3.6%
Compensation for regional rates 226 251 15 6.0% Services for the Organising Authorities 1,970 1,860 110 5.9% including infrastructure fees 469 450 19 4.2% Total regions and STIF 2,236 2,111 125 5.9%
Newspapers 7 6 1 16.7% Socially motivated prices 102 107 –5 –4.7% Defence 151 146 5 3.4% Total State 260 259 1 0.4%
Total 6,178 5,923 255 4.3%
The €113 million increase with respect to services for payments and the direct transfer of RFF infrastructure fee transport Organising Authorities is attributable to the posi- increases to the regions and STIF. tive change in the indexing of lump-sum STIF and TER
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Subsidies and Compensation for Financial and Social Security Expenses
Government aid granted to the parent company by the French State and local authorities is presented in the following table:
In € millions 2005 2004
Operating subsidies 22 28 Investment subsidies received 735 572 Retirement benefi ts 2,552 2,437 Special debt account 677 677 State aid with the Freight Plan 250
Total 4,236 3,714
Public contributions included in 2005 net schemes. The contribution rate was regularly reviewed until income 1990. The Decree of 27 February 1991 set it at 36.29% of Operating subsidies total payroll costs, broken down between employee contri- Essentially, these are subsidies of a social security butions of 7.85% and employer contributions of 28.44%. nature paid to companies by the State in connection with However, the benefi ts specifi c to the SNCF scheme, its employment policy (employment for youth and other job created in 1990, compared with the benchmark scheme, creation schemes). are fi nanced by SNCF and its employees. For 2005, the rate Other payments received without impact on fi nanced by the Company was set at 5.02% of the total 2005 net income liquid payroll. Investment subsidies received SNCF receives investment subsidies in the form of “SAAD” special debt account (annual state contribution) third-party fi nancing, primarily from local authorities, for In accordance with the multi-year plan (“contrat de plan”) TER rolling stock. signed between the French State and the parent company Investment subsidies are recorded as deferred income in 1990 and Directive 91-440 adopted a few months later and released to operating income (deducted from Depre- under French chairmanship, a Special Debt Account (SAAD) ciation, amortisation and provisions) over the estimated was set up on 1 January 1991. This account has no inde- economic life of the relevant assets. pendent legal status, although separate accounting records are kept by the parent company. Retirement benefi ts (equalisaiton contribution – Article 30) The role of this account is to isolate part of SNCF debt, Retirement benefi t commitments primarily result from in respect of which interest and capital payments are essen- the Law of 21 July 1909 defi ning the special regime appli- tially made by the French State. The debt transferred to the cable to SNCF employees and Article 30 of the SNCF terms Special Debt Account remains there until full redemption of reference defi ning, with effect from 1 January 1970, the and no longer appears on the SNCF balance sheet. terms and conditions under which the French State assures Special Debt Account resources consist of an annual the fi nancial balance of this regime, pursuant to the Euro- contribution from the French State of €677 million and an pean regulation of 1969. annual payment by the parent company of €18 million. In return for the payment by SNCF of “standard” contri- butions to the Pension fund, the French State assures the Recapitalisation of SNCF Freight fi nancial balance of the pension regime. The “standard” The French authorities have implemented support mea- contribution rate is determined based on SNCF contrib- sures for SNCF Freight as part of a restructuring plan whose utor and pensioner populations, adjusted for demographic objective is to provide the entity with a sound fi nancial organi- imbalance compared to that of other common law pension sation enabling long-term growth in France and in Europe.
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Accordingly, on 2 March 2005, the European Commis- anticipate and support corporate change and sets forth sion approved a contribution to SNCF Freight for a maximum an ambition: the transfer and development of competen- amount of €1.5 billion, €700 million of which to be supplied cies throughout a professional life. This is based on a dual by SNCF and a maximum of €800 million to be injected by necessity: the need to reinforce the integration of a signifi - the State. The fi rst scheduled tranche was paid by the State cant number of young people, with expectations that are to SNCF in March 2005 and was recorded as a share capital different from their elders, and encourage the transmission increase in accordance with the decision of the State and of competencies so that the individual may meet the tech- the European Commission. nological and organisational changes undergone by SNCF throughout his or her professional life. The new measures planned include an annual and systematic individual training interview, a standardised training passport, the implementation of a mid-career 3.6 Human Resources report and a professional internship period for voluntary employees to strengthen the latter part of careers, the creation of railway qualifi cations delivered at the conclu- SNCF is among the top recruiters in France. In addition sion of internal training and recognised externally so that to nearly 60,000 young people recruited between 1997 and employees can obtain university equivalences should they 2005, SNCF is actively committed to public employment wish to pursue their studies, a reinforcement of work-based support initiatives. SNCF is standing behind its work-based training and a clarifi cation of recruiting conditions upon the training commitment, hiring over 1,500 young people at the issue of a contract, and the introduction of a new individual end of December 2005 and actively pursuing this course by training right (DIF), with greater scope than the law, by clari- planning at least 1,000 new open-ended apprenticeship or fying initiatives eligible for the DIF. internship contracts in 2006. The national framework agreement for the insertion Furthermore, SNCF intends to position the innova- of social assistance recipients of 21 June 2005, as part of tion approach at the heart of its management policy, by the law on social cohesion, enacted on 18 January 2005 encouraging dialogue between employees, initiatives, and and calling for the creation of subsidised employment individual recognition by the Company. In 2005, 11,500 contracts, stipulates that SNCF will assist in the reinsertion innovations were proposed, a 30% increase compared to over a period of two years of 700 persons receiving social 2004, to which should be added 4,500 local ideas, for a assistance benefi ts. This will be carried out either within total of 16,000 ideas. These ideas cover all SNCF facets: SNCF, or via insertion programmes that the Company, rail operation and safety, equipment maintenance, human by means of its Solidarity Engagement, has pledged to resources management, services, and security. They mobilise with the specialised association sector, in order contribute to a better quality of customer service, lower to renew railway assets. The new agreement was signed production costs, and improved productivity and working in accordance with objectives targeting a return to perma- conditions. nent employment provided in the social cohesion plan and Fiscal year 2005 saw the signature (on 25 April) of an the SNCF human resources policy, with respect to social agreement extending from 2005 to 2008 covering voca- responsibility in particular, comprising solidarity efforts and tional training, the signature of a national framework agree- means of cooperation convened between the Ministry of ment for the insertion of social assistance recipients with employment, labour and social cohesion and SNCF through the public authorities on 21 June 2005, a wage agreement the national partnership agreement for the social and signed on 5 July, the signature of a supplementary medical professional insertion of young people in diffi culty, signed care agreement for contractual personnel, and the negotia- on 8 August 2004. tion of a profi t-sharing agreement that did not come into In 2005, labour confl icts were far worse than in 2004. force, given the right to object exercised by a group of However, there was substantial improvement with respect majority trade union organisations. to the notice given to passengers regarding disturbances The collective agreement on SNCF training, which and information quality. At the same time, service guar- defi nes the employee training system for the 2005-2008 antee amendments with STIF and the Alsace region came period, affi rms the key role of training as a means to into force for the fi rst time in 2005.
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The Group employment trend was marked by a slight (accounting for 3/4 of employee reductions in 2005) and the decline of 1.6% in the workforce on a comparable Group pursuit of productivity initiatives for the Infrastructure Divi- structure basis, primarily due to the reduction of employees sion. As for the Geodis Group, the SNCF Group’s number at the parent company level as part of the Freight Plan two employer, the number of employees was up by 4.2%.
In € millions 2005 2004 PRO FORMA
SNCF (1) 170,954 175,416 Geodis Group 23,733 22,766 Sernam Group (2) 1,987 2,054 STVA Group 1,911 1,965 Seafrance 1,597 1,552 Other subsidiaries and equity investments 5,658 5,394
Total 205,839 209,148
(1) Paid employees, including 924 employees seconded to Group subsidiaries. The average number of management employees amounted to 170,578 in 2005, compared to 166,629 in 2004 (–2.3%). (2) The average number of Sernam employees included in payroll for 9 of the 12 months.
Changes in the number of employees over the last four years arise from changes in Group structure at the subsidiary level:
In € millions 2005 2004 2003 2002 2001 PRO FORMA
Parent company (1) 170,954 175,416 180,339 183,955 184,695 Subsidiaries 34,885 33,732 63,605 58,208 30,052
Total 205,839 209,148 243,944 242,163 220,747
(1) Paid employees.
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As part of its preparation for the transition to IFRS as of (including equipment, traction and property), non-strategic 1 January 2007, the SNCF Group has organised its manage- investments and management resources. ment and presentation of segment reporting by distin- The contributions made by the divisions to revenues, guishing a “common operations and investments” division, gross operating income, and net income from ordinary essentially comprising a group of internal service providers activities break down as follows:
In € millions Long-distance Public Freight Infrastructure Common Group Passengers, Transport operations and France & Europe investments and eliminations
Division revenues 5,933 5,475 6,703 4,342 –1,459 20,994 Gross operating income 1,076 417 146 7 153 1,800 Operating income (loss) 839 122 –51 –55 –20 836 Net income (loss) from ordinary activities 645 –17 –143 –46 94 533
4.1 Long-distance The Division’s ambition is to be recognised as the European reference in terms of travel quality. This quali- Passengers, France tative goal is accompanied by a growth objective to ensure profi table development in long-distance transport & Europe Division and related services, thanks to innovative products and continually enhanced service. This will be symbolised by the launch of the East European TGV, which represents a The Long-distance Passengers, France & Europe Divi- major step. sion encompasses the TGV, Corail and Europe (Eurostar, On 1 January 2005, the Corail Intercity activity was Thalys, Lyria, etc.) carriers, and the related service transferred to the Public Transport Division. providers, Stations and Staging Points, Distribution, Train The high-speed market is generally buoyant, particularly Management and their administrative support functions for long distance: 100 million passengers were transported and information systems. in 2005, including 20 million in Europe.
In € millions 2005 2004 Change PRO FORMA IN%
Division revenues 5,933 5,587 6% Gross operating income 1,076 926 16% Operating income (loss) 839 624 35% Net income (loss) from ordinary activities 645 419 54%
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In an economic context that was depressed for the • For the second consecutive year, Thalys posted a 5.5% transport market and marked by higher fuel prices, Long- increase in revenues, for a total of €335 million, and passed distance Passengers, France & Europe posted some solid the 6 million threshold in terms of customers (6.18 million); traffi c performances in 2005 in relation to the competition. the monthly records (receipts, traffi c, sales) of Thalys since TGV growth was twice that of the household consumption its creation were rewritten and all innovation projects were rate with a 2.9% increase in traffi c. successfully concluded: extension of Ticketless, the leading The competitive position with respect to high-speed rail paperless reservation system among customers in the inter- transport improved once again in 2005. For the fi rst time, national high-speed train sector in Europe, a new on-board TGV exceeded the 50% market share for destinations with digital announcing system activated by GPS (Sanet), and a travel times of over 3 hours vis-à-vis the top 10 destinations satellite localisation system for Thalys trains (Localys); competing with airlines. Finally, one fi fth of all national TGV • In October, Thalys and Eurostar concluded the fi rst part- travel involved province-to-province trips, a market with a nership in the high-speed rail transport sector (Railteam). clear and robust growth dynamic (+7% in 2005). The partnership, based on the sharing of experience and Fiscal year 2005 was also marked by a strengthening know-how between the two major players, will create a of the customer service policy based on four major focal development programme that has numerous benefi ts for points: international travellers that use both carriers. The London/ • Greater access to low-price trains (9 million Prem’s tickets Aachen/Köln offering was the fi rst concrete step in this in 2005); procedure; • Increase in customer loyalty programmes (1.5 billion “bonus • The development of Paris-Geneva links with the imple- points” offered to 3 million card carriers), particularly in mentation of a new Lyria 2 partnership agreement between con nec tion with S’Miles, the French leader in customer loyalty SNCF and Chemins de Fer Suisses (CFF). programmes, which combines SNCF, Galeries Lafayette, This commercial momentum, combined with increased Nouvelles Galeries, BHV, Monoprix, Cofi noga, Géant, Casino, sales for the Voyages-sncf.com website, which recorded Shell service stations and Caisses d’Epargne and involves considerable growth in relation to 2004 (+52%) and a over 15 million active customers; €1.2 billion business volume (22% of ticket sales outside • Expansion of the services offer and enhanced comfort of travel agencies), generated revenue growth of 6% com - in stations and on board (€85 million invested in renova- pared to 2004. tion for the major stations, 11 new double-decker TGVs, a The sustained growth of gross operating income commitment to renovate 183 TGV trains and the complete (+€150 million or +16%) refl ects the success of commer- renovation of 430 Corail Téoz cars); cial and promotional initiatives, an expanded travel service • Service enhancement: confi rmed success of ®iDTGV on offer, optimised use of available TGV loading capacity and the Paris-Nîmes-Montpellier route, following the success the voluntary policy for controlling operating costs. of the Paris-Marseilles-Toulon route, opening of 5 new Application of the regulation on asset depreciation sales outlets, greater capacity to anticipate customer travel and impairment combined with the use of the component demand, with the possibility of reserving 90 days prior to approach and a modifi cation of depreciation terms resulted departures, development of cancellation insurance (Elvia), in a signifi cant decrease in depreciation charges for the improved on-line response service, thanks in particular to year. As a result, operating income increased by 35%, the launch of Léa, contributing to a 50% drop in customer representing 14% of revenues, or €839 million. claims. At the international level, the year was marked by the following achievements for SNCF and its partners: Outlook for the Long-distance • Eurostar, the high-speed train that links France, Belgium Passengers, France & Europe and Great Britain set new records in 2005: 7.5 million passengers, a 71% market share for Paris-London and a Risks and opportunities 64% market share for Brussels-London, a punctuality rate For 2006, the Long-distance Passengers, France & Europe of 86.3%, which exceeded the average rate recorded Division has set traffi c growth objectives that mirror the by airline competitors, and revenues of £464 million, an excellent results of 2005 with, at the heart of its policy, a increase of 7% compared to 2004; major ambition structured around two essential strategies:
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• Customer service development: in order to still further • For Europe improve the response to customer expectations and travel – the active preparation for the East European TGV launch in patterns, Long-distance Passengers, France & Europe is 2007, which will reshape the rail system for greater eastern betting on the deve lopment of employee competencies in France with a Europe-connected network founded on the customer relations and has created the University of Service, complementarity between TGV and regional transport (TER a facility to be used for the training of SNCF personnel, the in particular); development of a new customer relation and the creation – continued develop ment of Eurostar with the inauguration of innovative teaching methods. The goal is to reinforce the of a tenth daily link between Brussels and London during travel service chain from start to fi nish and better meet the the week and preparation of the St-Pancras International expectations of each traveller. The East European TGV will station in London; represent the fi rst practical case for the University of Service, – a new period of accelerated travel times for Thalys, in order to offer the best of TGV service on the Paris-Metz- which will celebrate its tenth anniversary: Maastricht-Paris Luxembourg route as of June 2006. in 3 hours, Paris-Brussels in 1 hour and 22 minutes and groundwork for 2007 and 2008, when travel times on the Paris-Amsterdam and Paris-Köln routes will be reduced by 1 hour in successive steps.
4.2 Public Transport Division
In € millions 2005 2004 Change PRO FORMA IN%
Division revenues 5,475 5,220 5% Gross operating income 417 408 2% Operating income (loss) 122 143 –14% Net income (loss) from ordinary activities –17 –6 177%
The Public Transport Division encompasses all the the scanning of new formats for regional remote ticketing Group’s contractual transport activities: rail (TER, Transilien (contactless cards) and on-line ticketing. Thanks to blue- and Keolis UK subsidiaries), and bus, tramway or metro tooth technology, inspectors can print on-board tickets (Keolis), as well as complementary services (Effi a). The for passengers. The Personal Digital Assistant will also be Division’s scope was expanded in 2005 with the Corail equipped with a variety of software that will provide infor- Intercity activity, previously managed within the Long- mation to customers on train schedules and correspond- distance Passengers, France & Europe activity. ences or itineraries for major cities. The Division has developed a dynamic and innovative On a constant Group structure basis, consolidated sales policy. Accordingly, after equipping its 800 Transilien revenues increased by 5%, due in particular to the traffi c inspectors with a scanning and control tool for Navigo increase for the Regional Express Transport (TER) activity smart cards, and in cooperation with the Long-distance (6%) and the Transilien activity (3%). Corail Intercity activity Passengers, France & Europe Division, SNCF began testing increased by 5%. a similar tool in 2005 for the TER Centre and TGV trunks Net income from ordinary activities declined by €11 of the Atlantic network. Accordingly, Accelio will enable million, due to the implementation of numerous programmes related to service quality, punctuality and security.
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Rail Transport France and, beginning in the automn of 2006, the SAT express serving the Roissy-Charles de Gaulle airport terminals. In TER activities are expanding, while the Group addition, the various contract renewals for medium-sized looks for long-term improvement in quality cities have strengthened its number one position in France Growth in TER activity in 2005 (6.4% increase in for this urban sector. traffi c) was driven by the creation of new services, At the international level, GoVia, the joint venture with modernisation of the fl eet, a pricing dynamic and a favour- the British carrier GoAhead, was selected in November able economic situation in terms of high fuel prices over 2005 to operate the new franchise for Kent, Eastern the long term. Sussex and South-East London, which will include regional SNCF has supported this development by strengthening trains and, beginning in 2009, the high-speed line linking initiatives aimed at lasting quality improvement: London to the Channel entrance by regional trains. As part • through modernisation of the fl eet, implementation of of the organisation of the 2012 London Olympic Games, GPS and reinforcement of clean-up standards for rolling it will serve numerous sites, including the Olympic village stock, which is near the city of Stratford. The 8-year contract, • through the implementation of innovative services (ti- coming into force on 1 April 2006, represents overall cketing, multi-modality, TER stations, etc.), the opening revenues of €6.5 billion. With over 3,800 employees, of customer relation centres or pursuit of line certifi cation more than 350 trains and 28 high-speed trains, the fran- procedures. To date, 27 lines and a multi-modal division in chise is one of the most signifi cant in the UK’s passenger Rhônes-Alpes have been certifi ed. public transport sector. For the Keolis group, a subsidiary of 3i and SNCF, the new success in England confi rms its Transilien continues to improve service choice of partner, refl ects the quality of the proposed quality response; particularly in regard to the Group’s rail exper- In 2005, the upgrade programme stipulated in the tise, and illustrates the reality of its rapid and profi table contract between SNCF and STIF (Syndicat des Transports development in Europe. d’Ile-de-France) was pursued, particularly in terms of the In Copenhagen, City-Trafi k, a subsidiary in which Keolis punctuality and site management and maintenance phases. has a 49.7% stake, was attributed 46 bus lines, of which The RER A line was certifi ed. The fi rst rolling stock renewal 27 were newly awarded, for revenues of €77 million over programme, launched in 2002, covered 26% of the fl eet 6 years. However, Keolis was unable to renew the Citypen- and is 82% complete. deln contract. Traffi c is up 3%.
Corail Intercity Effi a Revenues for the activity increased by 4%, primarily attributable to the increase in traffi c for the Paris-Cherbourg/ The subsidiary Effi a contributed €78 million to reve- Trouville, Paris-Montluçon/Bourges and Paris-Orléans routes. nues, up 7% compared to 2004. Net income from ordinary The activity contributed a loss of €83 million to Group activities amounted to €9 million compared to €8 million net income from ordinary activities. in 2004.
Keolis Outlook for the Public Transport Division
Keolis has been consolidated under the equity method Mobilisation for the improvement of service since 1 September 2004. After goodwill amortisation, the quality and development of the offer Keos group contribution to the net income equity-accounted Fiscal year 2006 will be key for TER, with the renegotia- affi liates was slightly negative. tion of thirteen new agreements and the implementation of In France, Keolis renewed contracts for Lyon and its service improvement measures. suburbs (Sytral) and Metropolitan Rennes, which further Transilien will develop new services in 2006, with the boosts its position as global leader in the management of second-half inauguration of two new services under the automatic metros with the Lille, Lyon, and Rennes networks State-Region plan contract: the Tram-Train between Aulnay
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and Bondy and the junction between Ermont and the Paris services. Priority will be given to rolling stock renewal, Saint-Lazare station. It will also provide 800,000 km in addi- commercial development and the optimisation of produc- tional train service (+1.4%) for the Transilien lines. tion costs. With respect to Corail Intercity, the strategy has been updated in the absence of a major restructuring of
4.3 Freight Division
The Freight Division encompasses all of the Group’s freight and logistics activities (rail or road transport).
In € millions 2005 2004 Change PRO FORMA IN%
Division revenues 6,703 6,650 1% Gross operating income 146 19 –656% Operating income (loss) –51 –255 80% Net income (loss) from ordinary activities –143 –352 –59%
The Freight Division posted signifi cant current losses, reflect the industrial reorganisation efforts: improved although there was clear improvement in results, with the routing punctua lity and reliability, greater productivity exception of combined transport. (10% of the 20% Freight Plan target already achieved), On a constant Group structure basis, revenues were repositioning on the most lucrative markets, and a rate steady at €6,703 million. hike. The Division’s turnaround was driven by gross operating SNCF Freight has opted for a multi-product strategy, income, which continued to grow and reached €146 million. proposing routing solutions to its customers that range Net income from ordinary activities remained negative at from a single wagon to an entire train to combined trans- –€143 million, but the defi cit was reduced substantially in port. The offer relies on an installed network, dense relation to 2004 (–€352 million). territorial coverage and the gradual implementation of the service range for heavy transport. This mobilisation has won several tender bids in the context of a liberal- SNCF Freight ised market. These include a contract with a major Euro- pean steel shipper for the Dunkirk-Liège route and the SNCF Freight revenues (€1,808 million) declined by contract for bauxite traffic in the Provence-Alpes-Côte 10% compared to 2004 (€2,008 million). Service quality d’Azur (PACA) region involving a high frequency of rota- problems combined with strikes in France and abroad, tions. These gains add to the traffic acquired in the pulp, weighed on volumes transported. The repositioning was wood and mineral water sectors and numerous long-term also penalised by an unfavourable economic situation, par- contracts. ticularly in the steel industry, SNCF Freight’s top customer. At the international level, SNCF Freight has mobi- However, new services, including the Customer Service lised to seize opportunities in opening markets by taking Centre, a new invoice format and an innovative ordering steps to reinforce its presence abroad under a partner- system, are now operational. ship rationale but also as a rail company. SNCF Freight Despite difficulties and delays (a slumping economy, has thus obtained safety certifi cates in Italy, Belgium and labour unrest, unreliable routing in certain regions, and Luxembourg, applied for UK certifi cation and forged part- delays in payment for the first tranche of aid to the nerships with Suiss, Belgian and Luxembourg railroads Freight Plan), results were in line with objectives and to set up a single operations centre in Luxembourg for
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the purpose of supervising all the Antwerp-Basle (Sibelit) The Europe Excluding France zone is hampered by the traffi c. Finally, SNCF Freight has put 15 new tri-current poor perfor mance of Italy. locomotives into circulation with no stop at the German border: this represents a key step in the joint SNCF (1) Geodis has published its fi nancial statements under IFRS Freight/Railion policy for rail traffi c development between since 2005. Based on these standards, Geodis generated a 2005 France and Germany. ope rating income of €85 million (compared to €70 million in 2004 The Division contributed a loss of €220 million to net excluding a one-time capital gain on a property disposal). income from ordinary activities, compared to a loss of €385 million in 2004. Sernam SNCF has scrupulously respected the European Commis- sion decision since 2004 by committing to an open, trans- Parcel Delivery and Logistics parent and non-discriminatory process for the selection of an acquirer wishing to purchase share blocks of the Sernam Geodis group at a market price. The proposal expressed by Sernam In an unfavourable environment (economic slow- management was received on 30 June 2005. This acquisi- down in the Euro zone, sustained high oil prices, and tion by Sernam personnel is based on an ambitious indus- significant fluctuations in the euro/dollar exchange rate), trial project that will ensure the long-term future and deve- Geodis was able to maintain revenue growth because of lopment of the Sernam group for the benefi t of customers increased international traffic flows and localisations in and employees alike. The Sernam group will continue to Eastern European and Asian countries. The contribution develop its offer for both parcel delivery and express, as to Group revenues (€3,592 million) exceeds that of 2004 well as for cargo and warehousing. These French and Euro- (€3,343 million) by 7%. Activity grew in all geographical pean offers rely on an integrated national network of over areas. 50 agencies and membership in Euroexpress, a European The France zone generated revenues of €2,510 partnership network. million during 2005, an increase of 5% compared to The Sernam group will continue the non-exclusive 2004. The zone’s growth is primarily due to a solid level ope ration of the Trains Bloc Express, so as to serve of activity for both standard and express parcel delivery. North/South and South/North customer traffic flows Road transport continued to grow, primarily through the under optimal conditions for quality and service. The rail development of new contracts in the automobile sector. dimension will diffe rentiate Sernam and likely enable the Revenue for logistics was steady, while growth for air pursuit of an ongoing improvement strategy for its offer and sea freight forwarding was robust. in compliance with the best practices relating to sustain- The 7% revenue growth in the Europe Excluding able development France zone arises from an acceleration of Group Prior to its disposal, Sernam contributed to the Division’s activities in Eastern Europe and the impact of commer- net loss from ordinary activities for €28 million, compared cial development in Great Britain, Ireland and Spain. to €33 million in 2004. Revenues from Italy were in sharp decline because of the country’s poor economic situation and the drop in exports. STVA The International Excluding Europe zone continues to grow at a steady pace (+31% on a comparable Group The French automobile market has returned to the black structure and exchange rate basis) mainly due to the with a 3% increase in new car registrations in 2005, trans- growth posted in China and Korea. lating into a 2% increase in the volume of activity for STVA, amounting to €314 million, compared to €309 million in Net income from ordinary activities for Geodis is up 2004. with a profit of €75 million in 2005, compared to €65 STVA continues to boost its performances with a net million in 2004(1). The France zone, and specifically income from ordinary activities of €12 million, compared the parcel delivery activities, remain the most signifi- to €9 million in 2004, primarily due to an extreme vigilance cant contributor to the Geodis group’s profitability. over costs.
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Combined Transport The contribution of Ermewa to net income from ordi- nary activities (+€12 million) has improved substantially The reduced traffi c schedule for combined transport over 2004 (–€4 million). resulted in the closing down of operations for the Ile-de-France In December 2005, Ermewa acquired the Eurotainer and European nodal points and shrunk the traffi c schedule of securities held by Brambles. At the same time, the Group Naviland Cargo (formerly CNC) by over 50%. The entity has acquired the fl eet operated by Eurotainer and owned by refocused its activity on combined maritime transport. Brambles (8,000 containers). The Naviland Cargo contribution to the Division’s net income from ordinary activities was negative at –€24 million. France Wagons Revenues amounted to €89 million (down by 44%). The France Wagons contribution to revenues is stable at €24 million. Fiscal year 2005 was marked by the diversifi ca- tion of clientele. The new clients are located in central Europe Port and Shipping Logistics (Poland, Romania), and Scandinavia. A major con tract was signed with US Steel covering 400 wagons. Sealogis revenues grew by 16% to stand at €234 million, Net income from ordinary activities for France Wagons compared to €203 million in 2004. Port and shipping, freight amounted to €9 million in 2005, compared to €13 million forwarding and logistics activities were up. in 2004. Sealogis posted a net income from ordinary activities of €4 million, compared to €3 million in 2004. The offi cial opening of Port 2000 at Le Havre at the end Outlook for the Freight Division of 2005 represents a major event for Sealogis. SNCF Freight has rallied to pursue the success of the Freight Plan Terminal Transport As part of the Freight Plan, and at the request of the European Commission, the public authorities have decided The stabilisation of the VFLI group’s fi nancial situation in to advance the opening up of domestic Freight to competi- 2004 has increased the Group’s synergies with the SNCF tion by 9 months. It will now take place on 31 March 2006. core businesses. The restructuring and development plan In a context of intensifi ed competition, the challenge has enabled the company’s reorganisation and redeployment for SNCF Freight in 2006 is to stabilise its fi nancial posi- thanks to new contracts. In February 2005, Sollac Lorraine, tion and renew with profi table growth, while developing the Arcelor group’s steel subsidiary, awarded VFLI the ope- competitive advantages via its service quality, experience rating and shunting rights for its Florange site in Moselle and network size. (largest private rail siding in France) for a period of 5 years. SNCF Freight has thus identifi ed three action priorities Revenues for fi scal year 2005 increased to €63 million, for the coming year: a pledge to meet client expectations to compared to €36 million in 2004. Fertis will manage the the maximum; a transport plan that is as reliable as possible operation of the TGV Eastern work trains. Net income from with the rapid confi rmation of customer orders; and Euro- ordinary activities amounted to €2 million, compared to a pean development through the pursuit of interoperability loss of €5.1 million in 2004. and new safety certifi cates.
Crossing the Alps: an opportunity for SNCF Freight Wagons Freight Following the closing of the Fréjus road tunnel, SNCF Ermewa approached its Italian homologue Trenitalia to prepare a Ermewa contributed €96 million to 2005 revenues, an complementary offer that SNCF Freight could put in place increase over 2004 (€87 million). Industrial freight wagon immediately for crossing the Alps by the Mont-Cenis rail leasing activities are up for all segments (gas, oil, chemicals tunnel. and other).
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Three types of initiative have been determined: opti- of March 2007. The future of piggybacking will depend on mised use of overall capacity, a night rotation for the rail the success of this new service, particularly for the Paris- motorway, and reinforced links for combined and conven- Hendaye via Tours project. tional transport. Geodis confi rms the improvement in its Perpignan-Luxembourg rail motorway operating performance SNCF has associated itself with Autoroutes du Sud de A new period is opening in a context marked by foreign la France, Caisse des Dépôts, Modalohr and Chemins de exchange rate and oil price fl uctuations. The Group intends Fer Luxembourgeois to create a company called Lorry- to maintain its improved operating performance for 2005- Rail. These companies will thus develop the fi rst major 2007. rail motorway link through France. Lorry-Rail will ensure the service’s promotion, marketing and management. The opening to traffi c has been set for no later than the end
4.4 Infrastructure Division
The structure of the Infrastructure Division was exten- structure Division now includes the activities of Delegated sively reorganised in 2005, following the creation of a Infrastructure and Engineering management (Systra, Common Operations and Investments Division. The Infra- AREP).
In € millions 2005 2004 Change PRO FORMA IN%
Division revenues 4,342 4,205 3% Gross operating income 7 –12 156% Operating income (loss) –55 –70 22% Net income (loss) from ordinary activities –46 –67 31%
On a comparable basis, the Division’s revenues increased The new framework agreement signed with RFF for by 3% in relation to 2004. investment services (protection, logistics) foregoes the Net income from ordinary activities posted a loss of principle of a capping system and bases contracts on nego- €46 million, attributable to a €56 million loss for the Infra- tiated estimates or basic lump sums for minor operations. structure management activity. The agreement was rolled out in 2005 for some major transactions. Delegated infrastructure management is continuing Infrastructure Management and Work its productivity efforts, but because of the remuneration freeze in the management agreement with RFF, the higher The year’s activity was marked by continuing construc- costs are not offset. It is not possible to break even under tion work for the TGV East European, representing €293 the current infrastructure economic model. million in revenues, compared to €116 million in 2004, and The amendment setting the remuneration for the 2005 the reorganisation of maintenance work for Ile-de-France management agreement signed in October 2005 reinforces as part of the Plan Transilien aimed at improving punctu- the conditions for obtaining bonuses and begins to refl ect ality. The bad winter weather at the beginning of the year maintenance renewal impacts. necessitated snow removal and slowed down production with respect to maintenance.
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Systra 4.5 Common Operations
The Systra group, jointly held by SNCF Participations and Investments Division and RATP, was proportionately consolidated as of 1 January 2005. The Common Operations and Investments Division, Systra’s contribution to revenues is steady at €85 million newly created as of 1 January 2005, encompasses the for a break-even gross operating income. Group’s support functions, the Equipment and Traction service providers, the real estate activities and the SNEF and Seafrance subsidiaries. Outlook for the Infrastructure Division
The Division will continue to adapt its resources by Equipment and Traction undertaking major productivity and effi ciency efforts, in order to maintain quality production within the restricted Industrial production (equipment maintenance, overhaul framework of the SNCF-RFF management agreement and transformation) has declined in relation to 2004, which (amount not revalued). is in line with the cuts in the Freight Plan. The public authorities’ consideration of the network The rolling stock upgrade programmes will be continued audit conclusions could mean an allocation of additional in 2005, while the level of new equipment commissioning fi nancial resources in coming years. The allocation will have will remain high. to be renewed and increased, so that current investment shortfalls can be permanently inversed. The audit recommends long-term planning for main- Real Estate tenance based on explicit objectives for network service levels. The new management agreement now being drafted SNCF has contributed its SFCI securities to SICF and will by SNCF and RFF should be completed in the spring of gradually contribute its housing assets. SICF will become 2006 and include these recommendations. the holding company for the housing division. The productivity gains expected for maintenance will The housing division’s contribution to revenues is mostly stem from the extended time interval allocated to steady at €77 million in 2005. The net income from ordi- work completion. nary activities amounting to €7 million is up in relation to With respect to its traffi c management businesses, 2004 (€2 million). Infrastructure will work with RFF on the study of the centra- lized network control project, as recommended by the audit. This should generate signifi cant productivity gains. Maritime Transport
During 2005, Seafrance had to face an accumulation of diffi culties involving port facilities, labour relations and tech- nical issues. In a diffi cult context, the pricing war intensifi ed with the development of offers based on the low-cost model. Seafrance contributed €192 million to revenues in 2005, a drop of 8% in relation to 2004 (€208 million). Net income from ordinary activities posted a loss of €15 million compared to a €4 million profi t in 2004.
Energy Production
SHEM has been consolidated under the equity method since 1 January 2005 and has contributed €6 million to the net income of equity-accounted companies.
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The Board of Directors of the industrial and commercial the Board and all committees and commissions. The Board public enterprise SNCF comprises eighteen members: Secretary and the Secretary of the Joint Labour-Manage- • Seven representatives of the French State appointed by ment Committee (CCE) also have a seat on the Board. The decree, based on the report of the Transport Minister, of Board of Directors meets monthly. which: – two at the Transport Minister’s recommendation; In order to strengthen its analysis and decision-making – one at the recommendation of the Minister for Economy capacity and in accordance with the terms of the bylaws, and Finance; the Board of Directors has set up a number of specialised – one at the recommendation of the Budget Minister; committees and commissions. – one at the recommendation of the Minister for Planning Audit and Risk Committee, responsible for reviewing and Regional Development; methodology in terms of the accounts and risk manage- – one at the recommendation of the Minister for Industry; ment; – the Chairman of the Board appointed from among the Finance and Plan Commission, responsible for dealing directors and at their recommendation by a Council of with questions concerning fi nancial management, the Ministers Decree. budget and the annual and half-year fi nancial statements; Group Commission, consulted on matters concerning • Five members chosen for their expertise and appointed general policy and Group restructuring, Group company by decree: fi nancial statements, acquisitions of new or additional – a representative of passengers; investments and disposals, and the creation, sale or – a representative of shippers; winding-up of subsidiaries; – two local councillors chosen for their knowledge of regional, Regionalisation Commission, responsible for monitoring departmental and local rail-related matters; matters concerning the regionalisation of regional and local – an individual chosen for his personal expertise in the trans- passenger public transport services; port sector. Contracting Commission, consulted on projects involving government or private contracts, acquisitions, disposals, buil- • Six members, including a management representative, ding exchanges, etc., exceeding a predetermined threshold elected by employees of the company and its subsidiaries set by the Board. having a minimum workforce of 200. A Council of State (“Conseil d’Etat”) decree lays down In 2005, SNCF modernised the governance of its the parent company bylaws and sets the procedures for the Board of Directors under the supervision of its committee appointment and election of Board members. chairmen. The reform project centred on the extension of Board members are appointed for a fi ve-year term of the Audit and Risk Committee’s mandates, the creation of a offi ce. A director may not exercise more than three conse- strategic committee through the merger of the Finance and cutive terms of offi ce. Directors receive no compensation Plan Commission and the Group Commission, the moderni- for their activities. sation of the Regionalisation Commission with a Public The Government Commissioner or, in his absence, the Transport Agreements Committee and the maintenance of Assistant Government Commissioner, has an advisory seat the Contracting Commission. It includes the formalisation on the Board and all committees and commissions created. of a director’s charter and strengthens the ethical obliga- The head of the Transport Economic and Finance tions of directors. The project was adopted by the Board of Control Offi ce or his representative has an advisory seat on Directors on 22 February 2006.
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In early 2006, the SNCF Board of Directors carried out its commitments vis-à-vis the European Commission with respect to the delegation of the Freight managing director’s powers, in consideration for the latter’s approval of the Freight Plan.
Executive Committee
The Chairman appoints the members of the Execu- tive Committee and defi nes their tasks. The Executive Committee collectively reviews, at the initiative of the Chairman or on the recommendation of one of its members, development and strategic plans necessary to Group’s development. The Chairman vets decisions concerning all matters reviewed by the Executive Committee. Within their areas of expertise, Executive Committee members are delegated powers by the Chairman enabling them to act and decide in his name. The powers delegated carry authority over all company bodies. The Executive Committee relies on a certain number of specialised committees to carry out its work. As part of the reinforcement of risk management and following the creation of a Provisions Committee in 2004, the Executive Committee set up three new committees in 2005: an Audit and Risk Committee, an Ethics Committee, the chairman- ship of which was awarded to a Board Director, and an Off- balance Sheet Commitments Committee.
The SNCF fi nancial statements may be obtained by simple request from SNCF (Finance, Purchasing, Information Systems and Telecommunications / Accounts Management and Management Control) and can be consulted on the SNCF website: http://www.sncf.fr
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CONSOLIDATED FINANCIAL STATEMENTS All amounts are in millions of euros (€ millions), unless stated otherwise.
CONSOLIDATED BALANCE SHEET 31
CONSOLIDATED INCOME STATEMENT 32
CONSOLIDATED STATEMENT OF CASH FLOWS 33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 34
1. Accounting Standards 34 18. Derivatives 60 2. Comparability of the Financial Statements 34 19. Operating and Other Liabilities 62 3. Accounting Policies 36 20. Division Segment Information 63 4. Goodwill 44 21. Purchases and External Charges 64 5. Intangible Assets 45 22. Employee Costs and Numbers 64 6. Tangible Assets 46 23. Depreciation, Amortisation 7. Réseau Ferré de France Receivable 48 and Operating Provisions 65 8. Other long-term Investments 49 24. Net Financial Income 65 9. Equity Affi liates 50 25. Exceptional Items 66 10. Inventory and Work-in-progress 51 26. Income Tax 66 11. Operating Receivables 52 27. Off-Balance Sheet Commitments 68 12. Marketable Securities 28. Consolidated Statement of Cash Flows 70 and Cash and Cash Equivalents 52 29. SNCF Financial Statements 13. Shareholders’ Equity 53 for the Special Debt Account 14. Minority Interests 53 and Employee-Related Benefi ts Service Account 72 15. Provisions 54 30. Litigation and Disputes 75 16. Employee Benefi ts 55 31. Subsequent Events 75 17. Loans and Borrowings 57 32. Scope of Consolidation 76
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Assets
in € millions Note 31/12/2005 31/12/2004
Goodwill 4 100 94 Intangible assets 5 187 121 Tangible assets 6 17,505 16,569 Réseau ferré de France (RFF) receivable 7 6,810 8,436 Other long-term investments 8 1,179 1,296 Equity affi liates 9 225 389 Total non-current assets 26,005 26,905
Inventory and work-in-progress 10 453 499 Operating receivables 11 4,895 4,443 Special debt account – assets 29 263 131 Employee-related benefi ts service account – assets 29 1,525 1,437 Cash and cash equivalents 12 2,402 1,735 Total current assets 9,537 8,245
Total assets 35,543 35,150
Liabilities and Shareholders’ Equity
in € millions Note 31/12/2005 31/12/2004
Share capital 13 4,521 4,271 Reserves and retained earnings (accumulated defi cit) 240 –1,051 Shareholders’ equity 13 4,761 3,220 Minority interests 14 209 179 Provisions 15 2,006 2,397
Loans and borrowings 17-18 16,045 18,032 Operating and other liabilities 19 11,734 10,730 Special debt account – liabilities 29 248 135 Employee-related benefi ts service account – liabilities 29 540 457 Total liabilities 28,567 29,354
Total liabilities and shareholders’ equity 35,543 35,150
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in € millions 31/12/2005 31/12/2004 31/12/2004 PRO FORMA
Revenues 20,994 22,059 20,231 Capitalised production and production for stock 1,162 755 754 Operating subsidies 30 37 37 Purchases and external charges –10,419 –10,574 –9,776 Taxes and duties other than income tax –811 –763 –728 Personnel expenses –9,157 –9,779 –8,899
Gross operating income 1,800 1,735 1,618 Depreciation, amortisation and provisions, net –969 –1,100 –1,043 Other operating income and expenses 5 12 –1
Net operating income 836 647 575
Net fi nancial expense –303 –361 –358
Net income from ordinary activities of consolidated companies 533 287 215
Exceptional items 844 196 202 Income tax –34 –25 6
Net income of consolidated companies 1,343 457 424 Share in earnings of equity affi liates –29 –20 0 Amortisation and reversals of goodwill –10 –36 –31
Consolidated net income 1,304 401 393 Net income excluding Group 32 78 –65
Net income for the year (Group share) 1,271 323 328
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in € millions Note 31/12/2005 31/12/2004
Net income of consolidated companies 1,343 457 Elimination of non-cash items or items not related to operations: • Depreciation, amortisation and provisions, net (excluding current asset provisions) 1,108 1,068 • Deferred tax movement –1 –34 • Capital gains (losses) on disposal –1,001 –209 • Other –7 3 Cash fl ow from consolidated company operations (3) 28 1,442 1,285
Dividends received from equity affi liates 8 6 Change in working capital requirements 120 –58 Net cash from operations 28 1,570 1,233
Non-current asset purchases 6 –2,225 –2,066 Non-current asset disposals 262 336 Change in loans and receivables 9 –3 Impact of changes in Group structure 905 95 Net cash used in investing activities 28 –1,049 –1,638
Dividends paid to minority interests in consolidated companies –9 –12 Capital increases 13 250 0 Capital increases subscribed by minority interests 7 0 Investment subsidies received 735 578 New loans secured 448 1,366 Loan repayments (1) (4) –984 –1,940 Change in marketable securities (2) –260 11 Change in cash borrowings (2) 199 331 Change in fi nancial receivables –19 –41 Net cash from fi nancing activities 28 368 294
Increase (decrease) in cash balance 28 888 –111 Opening cash balance 251 486 Closing cash balance 1,138 251 Impact of exchange rate fl uctuations –1 –1 Impact of changes in accounting method –123
(1) Including RFF receivable amounts collected. (2) Portion with an initial maturity of more than 3 months. (3) Cash from operations as at 31 December 2005 amounted to €1,437 million. (4) Financing cash fl ows on net debt: –€597 million, see Note 28.
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1. Accounting Standards • Applied the component approach under which net carrying amounts are reallocated and the provision for major repairs is maintained. Pursuant to Article 25 of the Orientation Law on Domestic • Re-examined the useful lives of components, which resulted Transport (LOTI) of 30 December 1982, Société Nationale in an extension of the depreciation periods for railway des Chemins de fer français (SNCF), a state-owned indus- rolling stock to 30 years and a reduction of the deprecia- trial and commercial enterprise, “is subject to the fi nancial tion periods for certain buildings to 30 years instead of management and accounting rules applicable to commer- 50 years. The impact on net income for the year is a €26 cial companies.” SNCF keeps its accounting books and million decrease in net depreciation charges, which breaks records in accordance with prevailing legislation and regula- down as +€97 million for railway rolling stock and –€71 tions in France. million for fi xed installations. The consolidated fi nancial statements are prepared in • Adapted the calculation methods for the provision for accordance with the rules and methods applicable to con so- major repairs to take into account the component approach lidated fi nancial statements, approved by the Ministerial and the change in depreciation periods. Order of 22 June 1999 authorising CRC Regulation 99-02 • Adopted a new method for determining asset impairment issued by the French Accounting Standards Setting Body. in accordance with international standards. In accordance with the option offered under Article 9 of EC Groups of similar assets, the use of which continues to Regulation no. 1602/2002 of the European Parliament and generate cash fl ows that are largely independent of cash Council of 19 July 2002, regarding the application of inter- fl ows generated by other assets, were determined. When national standards to companies whose bonds are publicly circumstances or events indicate an impairment of assets, traded on a regulated market, the SNCF Group will publish the Group examines the recoverable value of each asset its fi nancial statements for the fi rst time under IFRS as of grouping to which they belong. The recoverable value is the fi scal year 2007. higher of the market value and the carrying value. The carrying value of these asset groupings is deter- mined by discounting the future cash fl ows expected to be derived from the asset. When this value is less than the net carrying amounts of the corresponding assets, an impair- 2. Comparability ment loss is recorded for the difference. As at 31 December 2005, an impairment loss was of the Financial recorded with respect to the net assets of Corail and Corail Intercity. The impact on the fi nancial statements amounts Statements to –€359 million, of which –€326 million in equity and –€33 million in net income. The tests conducted on the asset groupings of Eurostar, 2.1. Change in Accounting Policies TER, Freight and Infrastructure, did not reveal any impair- ment as at 31 December 2005. In accordance with the provisions of CRC Regulations The impacts following the fi rst-time application of the 2002-10 and 2004-06 and Emergency Committee Regula- regulation on asset depreciation and impairment break tions 2003-E and 2005-D, the SNCF Group has: down as follows:
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in € millions Impact Impact Impact ON EQUITY AS AT ON 2005 ON EQUITY AS AT 1 JANUARY 2005 NET INCOME 31 DECEMBER 2005 Net depreciation and amortisation charges (component approach) 0 26 26 Rolling stock – 97 97 Fixed installations – –71 –71
Asset impairment (losses in value) –326 –33 –359 Impairment of Corail and Corail Intercity rolling stock –326 –70 –396 Savings on depreciation 37 37
Provision for major repairs 346 0 346 Rolling stock 114 114 Fixed installations 232 232 Total 20 –7 13
In addition, as at 1 January 2005, inventories of rolling stock are reclassifi ed in tangible assets (impact of €116 million). spare parts that have the characteristics of intangible assets
2.2. Changes in Group Structure • The sale of the Sernam Group to the former management team (Financière Sernam). Sernam had been fully consoli- The list of companies included in the scope of consoli- dated previously. dation is presented in Note 32. • The sale of the 35% remaining interest in Cegetel SAS to Five changes in Group structure affect the comparability SFR on 22 August 2005, following a merger between SFR of 2005 and 2004 net income: and Neuf-Telecom. Cegetel had been consolidated under • The equity accounting of the Keolis Group, which pre- the equity method in 2004. viously was fully consolidated, as at 1 September 2004. • The reintegration of the parent company SICF and its non • The equity accounting of SHEM as at 1 January 2005, HLM subsidiaries within the scope of consolidation as at given the disposal of 40% of the shares, and agreements 31 December 2005, as the regulatory limits of the Sapin between Electrabel and SNCF stipulating the irrevocable Law no longer applied to SICF. SICF was fully consolidated disposal of an additional 40% in January 2007. SHEM was until 1996 and deconsolidated as at 1 January 1997. previously fully consolidated. In addition, the Systra Group, which was previously equity-accounted, was proportionately consolidated from 1 January 2005.
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2.3. 2005 Pro Forma Income Statement for the Year Ended 31 December 2005
The impact of changes in method and Group structure is presented in the income statement:
2004 pro forma income statement
in € millions 2004 Changes in Group structure 2004 PUBLISHED AND ACCOUNTING METHOD PRO FORMA
Revenues 22,059 –1,828 20,231 Capitalised production and production for stock 755 –1 754 Operating subsidies 37 0 37 Purchases and external charges –10,574 798 –9,776 Taxes and duties other than income tax –763 36 –727 Personnel expenses –9,779 880 –8,899
Gross operating income 1,735 –116 1,619 Depreciation, amortisation and provisions, net –1,100 58 –1,042 Other operating income and expenses 12 –14 –2
Net operating income 647 –72 575
Net fi nancial expense –361 3 –358
Net income from ordinary activities of consolidated companies 286 –69 217
regulatory restrictions applicable to HLM companies (see 3. Accounting Policies Note 8). The fi nancial statements of consolidated and equity- accounted companies are adjusted in accordance with Consolidation Policy Group accounting policies. The fi nancial statements of all companies included in Companies over which the Group exercises exclusive the scope of consolidation are drawn up to 31 December control, directly or indirectly, are fully consolidated. 2005 (with the exception of the Financière Systra fi nancial Companies over which control is exercised jointly with a statements drawn up to 30 September). limited number of shareholders are consolidated on a propor- tionate basis. Companies which the Group does not control but Translation of Foreign Company over which it exercises signifi cant infl uence are equity- Financial Statements accounted. Signifi cant infl uence is deemed to exist when the Group holds a percentage interest of 20% or more. The fi nancial statements of independent foreign subsi- Companies over which the Group exercises control or diaries are translated into euros using the closing rate of signifi cant infl uence but which are not, as a whole, material exchange method: to the consolidated fi nancial statements are excluded from • balance sheet accounts are translated at the year-end rate the scope of consolidation. of exchange, The SICF and SOCRIF subgroups, comprising HLM low- • income statement items are translated at the average rental housing companies, are not consolidated due to the annual rate of exchange,
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• translation differences arising on the retranslation of opening Goodwill values are reviewed annually based, in partic- balance sheet items (movement between opening and ular, on an appraisal of future cash fl ows, discounted at a closing exchange rates) and income statement items rate appropriate to the activity sector concerned. (movement between average and closing exchange rates) are taken to Translation differences in Consolidated share- holders’ equity. Intangible Assets
Preliminary expenses are amortised in full in the year Translation of Foreign Currency incurred. Transactions Software acquired and created by the Group is amor- tised over a period of 1 to 5 years, depending on its forecast Foreign-currency denominated transactions are trans- economic life. lated at the exchange rate prevailing at the transaction date Purchased goodwill and market share are amortised or at the appropriate hedge rate. over a period not exceeding 20 years, commencing on the Foreign-currency denominated assets and liabilities are date of acquisition. valued at the closing rate of exchange or the appropriate Assets are valued using methods specifi c to each cate- hedge rate and any gains or losses are taken to the income gory and enabling value movements over time to be moni- statement. tored. The methods adopted refer to one or more physical or fi nancial indicators enabling such values to be monitored on a regular basis. Statement of Cash Flows
The Statement of Cash Flows is prepared using the indi- Tangible Assets rect method which involves adjusting company net income for non-cash income and expense items in order to deter- Group tangible assets include assets made available by mine cash fl ow from operations. the French State, assets owned outright and assets held The cash balance presented in the Statement of Cash under fi nance lease agreements. Flows comprises cash and cash equivalents, marketable securities, deposits and cash borrowings with an initial SNCF public domain real estate assets made maturity of three months or less. available by the French State The French Orientation Law on Domestic Transport (LOTI) lays down the terms of possession of assets entrusted to Goodwill SNCF. On the creation of the industrial and commercial public On the acquisition of a company, the difference between institution SNCF on 1 January 1983, the real estate assets the acquisition cost of the investment and the fair value of previously given under concession to the semi-public limited identifi able assets and liabilities as at the acquisition date is liability company which it succeeded were appropriated to it. recorded as goodwill. Operating assets are stated at their These assets made available by the French State, without carrying value. Assets not intended for use in operations transfer of title, are recorded in the Group balance sheet in are stated at their estimated market value as at the acqui- the relevant tangible asset accounts, to enable an economic sition date or, in the absence of a market value, at their assessment of Group performance. expected realisable value. Subject to legal provisions applicable to infrastructures Positive goodwill balances are recorded in consolidated deemed of general interest or public utility, the parent assets and amortised over a period generally not exceeding company exercises full management powers over all real 20 years. estate assets entrusted to it or purchased by it. Negative goodwill balances are recorded in Provisions Real estate assets held by the public institution, no for contingencies and losses in the balance sheet and longer used in the performance of its activities or which released to income in accordance with the assumptions are part of its private domain, may be allocated to another and objectives set at the time of the acquisition. purpose or sold by the public institution for profi t.
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Owned assets Depreciation periods Tangible assets owned outright are recorded in consoli- Tangible assets are depreciated over the following dated assets at acquisition or production cost, or at fair periods: value upon entry into the scope of consolidation. Production cost comprises the cost of raw materials Land development 20 years and labour used to manufacture the assets, including that of Buildings and facilities 30 to 50 years purchased spare parts. Interest costs are not capitalised. Improvements to buildings and facilities 15 to 25 years Maintenance and repair expenses are recognised as Industrial plant and machinery 15 years follows: Equipment and machinery 5 to 20 years • all current maintenance expenses borne during the useful Automotive vehicles 5 years life of equipment (repair work on faulty spare parts and replacement of unusable and missing parts) are recorded Rail transport equipment as operating expenses; TGV • expenses for long-term major overhaul programmes are Structure 30 years subject to a provision for major repairs; Interior fi ttings 15 years • overhauls performed at the end of the useful life of rolling Electric locomotives 30 years stock, together with refurbishment and transformation costs, Diesel locomotives 30 years are capitalised in assets when they extend the useful life. Electric or diesel multiple unit trains and railcars Tangible assets are depreciated on a straight-line basis Structure 30 years over their estimated useful life (except for computer hard- Interior fi ttings 15 years ware depreciated on a declining balance basis over a period Passenger carriages of 4 years). Structure 30 years Interior fi ttings 15 years Freight cars 30 years Rolling stock modifi cation, overhaul, refurbishment 7 years
Ferry boats 25 years Other intangible assets 3 to 5 years
Provision for impairment of tangible and intangible assets The diminution in value of assets, resulting from causes the effects of which are not deemed irreversible, is recog- nised by a provision for impairment. These provisions (as is the case with depreciation and amortisation) are recorded separately in assets as a reduc- tion in value of the corresponding elements. Tangible assets are subject to impairment when, because of events or circumstances over the period (obsolescence, physical deterioration, signifi cant changes in the method of utilisation, performances falling short of forecasts, decline in revenues, other external indicators, etc.), their reco - verable value is permanently lower than their net carrying amount. Groups of assets are tested for impairment by comparing the recoverable value with the net carrying amount. When impairment is indicated, the amount recognised is equal to
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the difference between the net carrying amount and the • The cash fl ows are those determined in the business recoverable value. plans, which are drawn up for periods ranging between The recoverable value is the higher of the fair value net 3 and 6 years; of removal costs and the carrying value. • Beyond this timeframe, the fl ows are extrapolated by The recoverable value of assets is most often deter- applying an infi nite growth rate that is close to the long- mined based on the carrying value, which corresponds to term infl ation rate expected in France; the value of future economic benefi ts expected from their • Flows are discounted using rates that are appropriate to use and removal. It is assessed using discounted future the nature of activities. cash fl ows determined according to economic assumptions The key assumptions used to determine carrying values and projected operating conditions adopted by SNCF: are as follows:
Asset groups tested Freight Eurostar Corail/ Infrastructure Corail Intercity/TER
Description of key assumptions Carrying value, Carrying value, Carrying value, Carrying value, budget and budget and budget and budget and business plan business plan business plan business plan
Parameters of the model: • Future cash fl ow projection period 6 years 4 years 3 to 6 years 4 years
• Growth rate used to extrapolate cash fl ows beyond the projection period 1.8% 1.8% 1.8% 1.8%
• Discount rate after tax 7.1% 7.2% 5.9% 5.4%
In addition, the French authorities have implemented Freight level, the funds received and receivable from the support measures for SNCF Freight as part of the restruc- State are assessed as a decrease in the value of assets turing plan, the purpose of which is to provide SNCF Freight tested. with a sound fi nancial structure enabling it to restore long- term growth in France and in Europe. On 2 March 2005, the European Commission autho rised Long-Term Investments a fi nancial aid package for SNCF Freight for a maximum amount of €1.5 billion, breaking down into €700 million by Investments in unconsolidated companies and other SNCF and €800 million by the State. The fi rst scheduled long-term investments are recorded in the balance sheet at tranche was paid by the State to SNCF in March 2005 and acquisition cost net of any impairment provisions. recorded as a share capital increase in accordance with the Impairment provisions are booked when the fair value decision of the State and the European Commission. of an investment is less than its acquisition cost. The fair Based on the aid notifi cation, the funds paid are ac coun ted value of an investment is its carrying value to the Group. for as resources serving to fi nance the investments neces- This is determined taking account of the Group’s share in sary to the redeployment of SNCF Freight. Consequently, net equity (potentially revalued), future profi tability and, for as part of asset impairment tests carried out at the SNCF listed companies, stock market trends.
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Inventory Currency derivatives The Group trades on the forex market to hedge foreign- Inventory is valued at the lower of cost price and net currency denominated receipts and payments linked to realisable value. Cost price is equal to acquisition or produc- debt servicing and commercial activities. The Group uses tion cost. Production cost includes both direct and indirect futures and forward contracts, swaps and forex options. production expenses. Gains and losses on forex options are provided for in Cost price is calculated using the weighted average cost the income statement. Forex option premiums received or method. paid are recognised in full in the income statement in the Inventory provisions are booked based on the age and year of exercise. useful life of items. At the balance sheet date, a provision is recognised for unrealised losses on currency fi nancial instruments and hedged underlyings. Operating Receivables Interest rate derivatives Receivables are valued at their nominal value. A provi- Interest rate swaps and swaptions sion for impairment is recognised when there is a potential The Group uses interest rate swaps and swaptions to risk of non-recovery. This provision is determined based on hedge loan issues and manage its existing debt. an individual or statistical appraisal of non-recovery risk. Option premiums received and paid are recognised in full in the income statement in the year of exercise, with the exception of the option premium for which the exer- Marketable Securities cise has resulted in the defi nitive set-up of the hedge swap according to the management strategy determined at the Marketable securities are recorded in the balance sheet inception of options. This premium is then spread over the at the lower of acquisition cost and market value. The term of the swap recorded as a hedge. market value of listed shares is equal to the stock market As part of its active interest rate risk management, price on the last day of the fi scal year. the Group seeks, whenever possible, to cancel existing Bonds are recorded on the acquisition date at face value contracts rather than carry out new hedging transactions adjusted for any premiums or discounts. The year-end value in order to reduce the number of contracts covering the includes any accrued interest receivable. same loan and thereby reduce counterparty risk and Shares in French mutual funds (SICAV) are recorded at com mitment levels. Cash balances received or paid on acquisition cost net of purchase charges. An impairment the conclusion or cancellation of swaps are deferred over provision is booked at the year-end when the net asset the term of the underlying commitment. When a hedging value is less than the acquisition cost. strategy does not meet the hedging criteria set by the Negotiable debt instruments are recorded at acquisition Group, all gains or losses resulting from the strategy and cost and interest is taken to fi nancial income on a time- its cancellation are recorded in their entirety in the year’s apportioned basis. income statement.
Interest rate futures and forward contracts Derivatives The Group may be called on to trade on interest rate forward markets, notably when preparing a loan issue or Derivatives traded by the Group to manage currency, in order to manage interest-rate exposure on fl oating-rate interest rate and commodity risks are recorded off-balance assets and liabilities. Transactions are performed on both sheet (see Note 18). organised markets and over-the-counter. All hedging instruments used by the Group to manage Income and expenses on fi rm futures and forward long-term commitments are allocated, as a general rule, to contracts are deferred over the term of the underlying borrowings on issue or to existing borrowings. debt.
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Commodity derivatives Finance Lease Transactions In order to optimise the average cost of fuel supplies, the Group trades in the petroleum hedge markets. Transac- Leased assets are recorded as purchases when the tions traded primarily consist of swaps and swaptions. contract terms and conditions correspond to fi nance lease Option premiums received or paid are fully recognised arrangements. Finance lease agreements are contracts in the income statement symmetrically to and in the same whereby the lessor transfers to the lessee the right to use period as the hedged transactions. an asset for a given period in exchange for payment; the lessor transfers all benefi ts and risks inherent to ownership of the asset. Issue Premiums, Discounts and Such assets are recorded in assets at historical cost and Expenses, Loan Redemption Premiums depreciated over the same period as similar assets owned outright or public domain real estate assets made available When an issue is performed at below par, the discount is by the French State. deducted from the liability accounts. Expenses are recorded Lease agreements not having the characteristics of in deferred charges in balance sheet assets. fi nance lease arrangements are recorded as operating Discounts and expenses are released to the income leases and only the lease instalments are taken to income. statement on a straight-line basis over the loan term. When an issue is performed at above par, the issue premium is allocated in priority to the amortisation of issue Sale and lease-back transactions expenses. The residual balance represents: and equivalent • deferred income when the premium exceeds issue Sale and lease-back transactions expen ses, Proceeds from the sale of assets to a lessor under a • offset issue expenses when the premium is less than fi nance lease arrangement are cancelled in net income in issue expenses. the year of the transaction and released to income over the The residual balance is released to the income statement term of the contract. over the loan term. Other transactions In addition, certain fi nancial arrangements concern Investment Subsidies existing fi nance lease agreements. As the existing equip- ment fi nancing structure is not altered, the proceeds of The Group receives investment subsidies in the form of such transactions are recognised in net fi nancial income on third-party fi nancing, primarily from regional authorities. signature of the agreements. Investment subsidies are recorded as deferred income and released to operating income (deducted from Depre- ciation, amortisation and provisions) over the estimated Deferred Taxes economic life of the relevant assets. The Group recognises deferred tax on all temporary differences between the tax and book values of assets and liabilities in the consolidated balance sheet. Deferred tax is recorded using the liability method, applying the most recently voted tax rate at the year-end applicable to the period in which the temporary differences are expected to reverse. Deferred tax assets in respect of temporary differences and tax losses or credits carried forward are recognised when recovery is deemed probable.
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Provisions Provisions for loss-making contracts Provisions are recognised for long-term contracts to Provision for maintenance meet expected losses. Provisions are based on the time The provision covers the expenses incurred for long- lapsed since the signature of the contract, and a non- term building maintenance and repair programmes for renewal risk coeffi cient. com plete overhauls of rolling stock. It was calculated: • for real estate: based on an average maintenance price Revenue and Other Income Recognition per m2 applied to all assets and the length of the overhauls for the assets concerned, Transport activities (passengers, freight) • for the rolling stock units (locomotive, car, TGV train, etc.) Revenue is recognised based on the effective transpor- by series, based on projected annual expense fl ows and the tation of passengers and freight. length of time of the overhaul readjusted for each series. Revenue recognised on the issue of a passenger trans- port ticket is adjusted at the period-end for tickets issued but not used (taken to Deferred income). Provisions for environmental risks The Group provides for environmental risks when the reali- Contributions from the French State sation of the risk is deemed probable. This provision covers the and Organising Authorities costs related to environmental protection and site restoration These contributions comprise price subsidies covering and clean-up. It specifi cally includes a contingency provision for socially motivated prices introduced by the French State and asbestos lawsuits fi led against the Group. contributions remunerating global services within a contractual framework or specifi c services. Provisions for disputes and litigation They are recorded under Revenues. The Group is involved in a certain number of disputes and litigation arising in the normal course of its activities Engineering and contracting services and notably: performed by the Group • performance bonds received from companies supplying Sub-contracting and project management work per formed construction work, by the Group is recognised on the percentage of comple- • guarantees granted to clients in the freight transportation tion by project phase. sector covering incidents arising during transport. Such disputes and litigation are provided based on an Maintenance assessment of the related risk. Maintenance income and income from the operation of the Up to and including 1999, the parent company self- rail network is recognised in accordance with the contract nego- insured the majority of risks associated with its activities. In tiated with the network owner. 2000, the parent company took out a number of insurance policies providing coverage beyond an initial level covered by self-insurance. Research and Development Costs
Restructuring provisions Research and development costs are expensed in the year The cost of restructuring measures is provided in full in incurred. the current year when such measures have been decided, in principle, and announced prior to accounts closure. Restructuring costs primarily consist of employee depar- ture costs and the cost of writing off non-current assets, inventory and other assets.
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Ordinary and Exceptional Activities Geographical areas As activities are essentially carried out in France, the Net income from ordinary activities includes all recur- geographical areas presented are France and Rest of ring income and expense items directly relating to the oper- the world. The latter category encompasses all activities ating activities of the Group. perfor med abroad and the export activities of French Group Exceptional income and expenses comprise material companies. items which, due to their nature, unusual character or non- recurrence cannot be considered inherent to the operating activities of the Group. Employee Benefi ts
Defi ned employee benefi ts (retirement and medical Division and Geographical care) are estimated in accordance with prevailing assump- Segment Information tions. These commitments are not accrued but recorded off-balance sheet. Business segments In addition to its core businesses of passenger and freight rail transport and the delegated management of the Accounting Treatment of Employee- infrastructure, SNCF has developed a number of activities Related Benefi ts Service Accounts performed by subsidiaries. These primarily enrich, complement and extend the Pursuant to the French Act of 21 July 1909, employee- activities of the parent company in four operating divisions: related services carried out by the parent company have no • Long-distance Passengers, France & Europe, independent legal status but have been granted accounting • Public Transport, and fi nancial autonomy. • Freight, In order to ensure the comparability of the Group’s • Infrastructure, fi nancial statements with other industrial and commercial and an operations division (Common Operations and Invest- groups, total asset and liability accounts relating to these ments). employee-related parent company services are presented This fi fth division was created on 1 January 2005. It encom- in the Group balance sheet under the headings “Special debt passes the holding activities of SNCF Participations and the account and employee-related benefi ts service account – service provider activities of the parent company (Traction, Assets” and “Special debt account and employee-related Equipment) previously distributed among the four other divi- benefi ts service account – Liabilities” respectively. sions. The fi nancial statements of these employee-related services are presented in Note 29. Segment indicators The business segment indicators are: • Revenues, Debt Transferred to the Special Debt • Gross Operating Income, Account (“SAAD”) • Net Operating Income. The accounting methods adopted by each operating In accordance with the multi-year development plan division are identical to those used in the preparation of the (“contrat de plan”) signed by the French State and the parent consolidated fi nancial statements. company in 1990, a Special Debt Account was set up on The information presented for each division includes 1 January 1991. This account has no independent legal status, transactions between divisions. although separate accounting records are kept by the parent company. The role of this account is to isolate part of SNCF Inter-division transactions debt, in respect of which interest and capital payments are All material transactions between operating divisions essentially made by the French State. The debt transferred to are eliminated in the presentation of the Group’s consoli- the Special Debt Account remains there until extinction and dated fi nancial statements. no longer appears on the SNCF balance sheet.
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A total of €10.7 billion has been transferred to the the outset, nor were they expected to be during the life Special Debt Account: of the Special Debt Account, the decision was taken to • €5.8 billion (€5.9 billion face value) on creation on equalise the fi nancial charges borne by the two accounting 1 January 1991; structures once a year as follows: • €4.31 billion in net liabilities on 1 January 1997 (€4.36 • the effective charge rate borne by the debt allocated to billion face value); the Special Debt Account and the debt retained by the • €0.6 billion on 1 January 1999 (€0.61 billion face value) parent company and the effective rate borne by the overall accompanied by an amendment to its structure by loan debt is calculated at each year-end; substitution. • the charge rates borne by “IN” denominated debt recorded Special Debt Account resources consist of an annual in the Special Debt Account and that retained by the parent contribution from the French State of €677 million, paid in company are equalised, such that each entity bears the equal quarterly instalments and an annual payment by the overall charge rate via an equalisation payment recorded parent company of €18 million, paid mid-year. The excess in fi nancial income for the year. The equalisation payment of the French State contribution over net annual expenses owed by SNCF was subject to an exemption of €30 million is capitalised in the Special Debt Account. The parent in 2004 and €23 million in 2005. It will be extinguished in com pany contribution is recorded in net fi nancial income. 2006. When loan repayments allocated to the Special Debt Total Special Debt Account assets and liabilities are Account exceed the debt repayment capacity of the year, presented in the Group balance sheet under the headings the shortfall is covered by interim fi nancing deducted from “Special debt account - Assets, and Employee-related bene- euro fi nancing, directly or after swap contracts, secured by fi ts service account - Assets” and “Special debt account - the parent company on the markets during the year. As the Liabilities, and Employee-related benefi ts service account - respective balances were not of identical composition at Liabilities” respectively (see Note 29).
4. Goodwill
in € millions Gross value Depreciation Net value and provisions
31 December 2004 191 –96 94 Depreciation and amortisation 0 –11 –11 Entries into the scope of consolidation 15 0 15 Translation differences 1 0 1
31 December 2005 207 –107 100
Net goodwill as at 31 December 2005 primarily con - • the Ermewa subgroup for €17 million (€18 million as at cerned: 31 December 2004). • the Geodis subgroup for €66 million (€54 million as at The entries into the Group structure concern the acquisition 31 December 2004); of Audas Distribution by Geodis (€10 million).
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5. Intangible Assets
in € millions 31/12/04 Acquisitions Charges Disposals Reversals Changes in Translation and 31/12/05 Group reclassifi cation structure differences Gross values Concessions, patents and software 157 9 –4 –3 57 216 Purchased goodwill 54 5 0 0 –1 58 Other intangible assets 72 61 –1 –3 –37 91
Total gross value 283 75 0 –5 0 –7 19 365
Amortisation and provisions Concessions, patents and software 126 27 –4 0 –4 2 148 Purchased goodwill 20 1 0 0 –4 –1 16 Other intangible assets 16 1 –1 0 0 –3 14
Total amortisation and provisions 162 0 29 –4 –1 –7 –2 178
Net value 121 75 –29 0 1 0 20 187
The line item “Concessions, patents and software” primarily Acquisitions for the year include software produced internally for concerns software, which represents €41 million, net. €55 million. The main contributors to “Purchased goodwill” are:
in € millions 31/12/05 31/12/04 GROSS AMORT/PROV NET NET
Geodis 28 9 19 13 Ermewa 23 0 23 20 VFLI 5 5 0 2 VFE Partenaires 1 1 0 0
Total 57 15 42 35
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6. Tangible Assets
in € millions 31/12/04 Acquisitions/ Disposals Reversals Changes in Change in 31/12/05 depreciation Group accounting and provisions structure method and reclassifi cations
Gross value Land 1,502 34 –12 15 6 1,545 Buildings 7,719 194 –52 –237 20 7,644 Industrial and technical plant 2,156 175 –23 –108 10 2,210 Rail transport equipment 19,482 1,256 –286 –26 –34 20,391 Road transport equipment 497 101 –42 0 299 855 Maritime transport equipment 146 102 0 –2 0 246 Other tangible assets 787 29 –24 –12 12 792 Assets under construction 1,702 636 –1 –3 –45 2,289
Total gross value 33,991 2,527 –440 0 –374 266 35,973
Depreciation and provisions Land 65 31 –2 0 0 0 93 Buildings 3,322 322 –51 –3 –243 –16 3,331 Industrial and technical plant 1,406 114 –21 –1 –30 –4 1,471 Rail transport equipment 11,733 659 –205 –16 –26 284 12,430 Road transport equipment 359 53 –37 0 –5 167 537 Maritime transport equipment 64 6 0 –1 0 2 71 Other tangible assets 473 81 –22 –20 –7 28 533
Total depreciation and provisions 17,422 1,267 –337 –42 –311 469 18,467
Net value 16,569 1,260 –102 42 –62 –202 17,505
The main changes in Group structure stem from the such as high-capacity railcars (€328 million), double-decker change in consolidation method for SHEM (–€146 million, TGVs (€270 million), the new generation double-decker TERs net) and the reintegration of SICF in the scope of consolida- (€228 million), Freight VB 27000 electric locomotives (€128 tion (+€80 million, net). million) and the TGV East European (€65 million); Investments for 2005 comprise: • the acquisition of a ferry boat by Seafrance. • the upgrading of stations and buildings (particularly the infrastructures related to the new TGV East line, the prelimi- Decreases in tangible assets primarily represent dis po- nary studies for the upgrading of the Paris Est station in prep- sals of rolling stock for a gross value of €286 million and a aration for the arrival of the TGV East, the refurbishing of the net value of €81 million. Metz station for the TGV East, building of a TGV workshop Changes in accounting method represent the impair- in Lyon, a TER workshop in Toulouse, a TER maintenance ment loss for Corail and Corail Intercity (see Note 2.1 Change workshop in Marseilles, etc.) for a total €653 million; in Accounting Policies). As at 1 January 2005, inventories • the acquisition and renovation of rolling stock for €1,513 that may be characterised as assets will be reclassifi ed in million, primarily attributable to the launch of new projects tangible assets (€116 million, net).
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Cash fl ows from investments for the year break down as follows:
in € millions 2005
Acquisition of intangible assets –75 Acquisition of tangible assets –2,527 Total acquisitions –2,602 including assets held under fi nance leases –162
Acquisitions excluding fi nance leases –2,441
Investing WCR 216
Cash fl ows from investments in tangible and intangible assets –2,225
Assets recorded in tangible assets and held under fi nance lease agreements break down as follows:
in € millions 31/12/05 31/12/04 GROSS DEPRECIATION NET NET
Land 28 0 28 26 Buildings 409 –157 251 237 Rail transport equipment 3,704 –2,157 1,547 1,446 Maritime transport equipment 193 –18 175 80 Other transport equipment 104 –44 60 25 Other tangible assets 21 –11 10 6
Total 4,459 –2,388 2,072 1,820
Parent Company Fixed Asset Register At the request of the supervisory ministries, a report on the allocation of assets between RFF and SNCF was SNCF has a fi xed asset register representative of all its submitted on 2 January 2004. An arbitration commission properties, including those assets subject to, since 1997, was set up and conducted work during 2005. The terms confl icting interpretations of Law no. 97-135 of 13 February and conditions governing the allocation principles specifi ed 1997 and its application decrees. in this report and their fi nancial and accounting impacts are Since 1999, the Commission Nationale de Répartition being analysed. des Actifs (National Commission of Asset Allocation) has analysed the four main areas of disagreement between the Réseau Ferré de France and SNCF concerning land used for freight purposes (CM4 plots), housing, passenger concourses in stations and the volume division of buildings. These assets are currently included in Group fi xed assets.
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of the company’s liability, which totalled €30.3 billion on 7. Réseau Ferré 31 December 1996, after swap contracts. The 1996 year-end exchange rate was the initial rate de France Receivable used for the foreign currencies included in the receivable. Deferred income and expenses corresponding to issue premiums and costs or swap contract income or expenses In the law of 13 February 1997 that led to the creation were also transferred, resulting in a cash payment. This of Réseau Ferré de France (RFF), Article 7 provides for the payment was recognised in the company’s fi nancial state- transfer of a €20.5 billion liability to Réseau Ferré de France ments as deferred income, which is recorded in the income in consideration of the transfer of infrastructure assets from statement according to the maturities of the corresponding 1 January 1997. transactions. This transfer resulted in the recognition of an RFF recei- The RFF receivable is embodied in an agreement signed vable in the company’s assets, with no change in liabilities. by the two companies. The RFF receivable was constructed line by line so as As at 31 December 2005, the RFF receivable breaks to present a structure in terms of maturities, foreign curren- down as follows: cies and interest rates that is identical in all respects to that
Maturity Structure
in € millions 31/12/2005 31/12/2004
Less than 1 year 1,657 1,615 1 to 5 years 3,100 4,701 More than 5 years 1,897 1,947 Total 6,654 8,263 Accrued interest receivable 156 173
Total 6,810 8,436
Currency Structure Excluding Accrued Interest Receivable
in € millions 31/12/2005 31/12/2004
Euro 6,041 7,437 Swiss franc 305 526 Pound sterling 308 300
Total 6,654 8,263
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Interest Rate Structure After Adjustment for Derivatives and Excluding Accrued Interest Receivable
in € millions 31/12/2005 31/12/2004
Fixed rate 2,355 4,474 Floating rate 4,299 3,789
Total 6,654 8,263
8. Other Long-term Investments
in € millions 31/12/05 31/12/04 GROSS AMORT/PROV NET NET
Non-consolidated investments 200 –24 175 319 Loans to non-consolidated investments (1) 153 0 153 314 Deposits paid (2) 529 0 529 477 Loans and other long-term investments 337 –15 322 186
Total 1,218 –39 1,179 1,296
(1) The main change for the year is the elimination of the 1% housing loan attributed to SICF (reintegrated as at 31 December 2005). (2) Deposits with an initial maturity of less than three months.
Non-consolidated investments break down as follows:
in € millions 31/12/05 31/12/04 % interest Shareholders’ Net NBV of NBV of equity income investments investments
HLM subsidiaries of SICF 100% 423 66 147 SICF 289 Socrif 99.77% 87 1 0 0 Other non-consolidated investments 28 30
Total 175 319
The SICF and SOCRIF subgroups are not consolidated • The liquidation surplus which may be distributed to share- due to regulatory restrictions regarding the appropriation holders is limited to 50% of the par value of securities held; of earnings applicable to HLM (low-rental housing limited • Distributable earnings are limited annually to a percentage liability companies): of capital corresponding to the livret A (savings account) rate +2%.
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As at 31 December 2005, the subgroup balance sheets were as follows (in € millions): HLM and SICF Subsidiaries Combined (as at 31 December 2005)
in € millions 31/12/05 31/12/04 31/12/05 31/12/04 PRO FORMA PRO FORMA
Non-current assets, net 1,798 1,858 Shareholders’ equity 423 466 (incl. net income of €66 million) Current assets, net 292 347 Provisions for contingencies and losses 7 138 Borrowings 1,449 1,379 Other liabilities 211 222
Total assets 2,091 2,204 Total liabilities and shareholders’ equity 2,091 2,204
Socrif Subgroup (as at 31 December 2005)
in € millions 31/12/05 31/12/05
Non-current assets, net 80 Shareholders’ equity 87 (incl. net income of €1 million) Current assets, net 14 Liabilities 7
Total assets 94 Total liabilities and shareholders’ equity 94
9. Equity Affi liates
in € millions 31/12/05 31/12/04 % interest Net income Investment Investment
Cegetel SAS –36 167 Eurofi ma 23.70% 7 151 149 FRP Group 20% 1 5 5 SHEM 20% 6 27 0 Geodis Group subsidiaries 1 7 8 STVA Group subsidiaries 1 29 28 Financière Keos 45.35% –10 0 9 Systra Group 19 Novatrans 38.25% 0 1 1 Other investments 1 6 3
Total –29 225 389
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Movements in equity affi liates are as follows: 2005 (fully consolidated previously). • Cegetel SAS was sold on 22 August 2005. • The Systra group has been proportionately consolidated • The SHEM group was equity-accounted as at 1 January since 1 January 2005 (equity-accounted previously).
in € millions 31/12/05 31/12/04
Opening balance 389 403 Share in net income –29 –20
Changes in Group structure: –128 11 Equity-accounting of SHEM 25 Proportionate consolidation of Systra –19 Removal of Cegetel SAS –133 Other changes in Group structure –1 11
Movement in share of negative net equity (provision) – 1 Dividends paid –8 –6 Exchange rate fl uctuations 1 2
Closing balance 225 389
10. Inventory and Work-in-progress
in € millions 31/12/05 31/12/04 GROSS PROVISION NET NET
Raw materials 412 –61 351 416 Other supplies 31 –5 27 20 Production work-in-progress 75 0 75 63
Total 518 –65 453 499
Beginning 1 January 2005, inventory that may be charac- terised as assets will be reclassifi ed in tangible assets (€116 million, net).
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11. Operating Receivables
in € millions 31/12/05 31/12/04 GROSS PROVISION NET NET
Trade receivables and related accounts 2,839 –215 2,624 2,653 Payments on account of orders 34 0 34 23 Employee-related receivables 38 0 38 36 Amounts receivable from the French State and local authorities 826 0 826 843 Other operating receivables 1,362 –150 1,212 701 Prepayments and accrued income 160 0 160 187
Total 5,260 –365 4,895 4,443
12. Marketable Securities and Cash and Cash Equivalents
in € millions 31/12/05 31/12/04
Marketable securities with initial maturities of more than three months and/or exposed to interest rate risk 508 240 French and foreign bonds 90 60 Medium-term negotiable debt instruments 418 180
Marketable securities with initial maturities of less than three months, not exposed to interest rate risk 1,438 1,052 Negotiable debt instruments 1,145 858 French mutual funds (UCITS) 256 185 Euro investments 13 Treasury stock 3 2 Foreign currency investments 21 7
Accrued interest receivable 2 2
Cash in hand and at bank 454 441
Total cash and cash equivalents 2,402 1,735
Only marketable securities with an initial maturity of three months or less fall within the defi nition of cash for purposes of the statement of cash fl ows.
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13. Shareholders’ Equity
in € millions Share capital Reserves Translation Net income Shareholders’ differences equity, Group share
As at 31 December 2003 4,271 –1,352 1 11 2,931 Appropriation of net income 11 –11 Provisions for major repairs –29 –29 Employee benefi ts –9 –9 Change in translation differences 4 4 Consolidated net income – Group share 323 323
As at 31 December 2004 4,271 –1,379 5 323 3,220 Appropriation of net income 323 –323 Share capital increase (1) 250 250 Asset impairment (2) –326 –326 Provisions for major repairs (3) 346 346 Change in translation differences –1 –1 Consolidated net income – Group share 1,271 1,271
As at 31 December 2005 4,521 –1,035 4 1,271 4,761
(1) This concerns the capital contribution granted as part of the Freight Plan, pursuant to the European Commission decision dated 2 March 2005, State Aid No. 386/2004 - France, Restructuring aid to SNCF Freight. (2) See Note 2.1. Asset Impairment. (3) See Note 2.1. Provision for Major Repairs.
14. Minority Interests
in € millions 31/12/05 31/12/04
Opening balance 179 210 Dividend distribution –10 –11 Change in translation differences 0 0 Changes in Group structure 2 –92 Share capital increase 8 3 Minority interest share in net income (1) 29 78 Change in accounting methods –1 –9
Closing balance 209 179
The minority interest share in the 2005 net income mainly The change in Group structure includes the equity concerned the Geodis subgroup (€24 million). accounting of the Keolis group.
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15. Provisions
DECREASES FOR THE YEAR
in € millions 31/12/04 Change Charge Provision Provision Changes in 31/12/05 in method used not used Group structure and reclas- sifi cation
Tax and customs risks (1) 32 0 27 –2 –20 –2 35 Environmental risks (2) 130 0 15 –21 –4 0 120 Major repairs (3) 1,493 –346 111 –54 –33 –37 1,134 Litigation and disputes (4) 372 0 52 –57 –44 10 333 Compensation for work-related injuries and miscellaneous (5) 186 0 20 –3 –9 –15 179 Restructuring costs (6) 71 0 35 –23 –17 –3 63 Risks on subsidiaries 8 0 1 –2 0 –2 5 Other 105 0 148 –33 –74 –9 136
Total 2,397 –347 409 –195 –200 –58 2,006
Changes in Group structure had the following impacts on provisions : • equity-accounting of SHEM –€41 million • disposal of Sernam –€18 million • reintegration of SICF and integration of Systra +€13 million
(1) This line item primarily concerns the parent company which provides for social security and tax disputes for reasons of prudence. (2) These contingencies primarily concern the following elements at the parent company: • pollution clean-up: €28 million • asbestos-related costs: €84 million • Biotox: €8 million (3) The provision concerns the expenses incurred by the parent company on rolling stock and long-term building maintenance and repair work. (4) This item primarily comprises the contingencies related to legal disputes and contract settlements, as well as contractual contingencies vis-à-vis RFF. (5) This item records compensation and work-related injuries provided in the amount of €91 million for the parent company and €47 million for the Geodis group. It also includes long-time service medals (€37 million). (6) The restructuring expenses mainly comprise the employee-related assistance measures of the Freight Plan.
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16. Employee Benefi ts
Employee benefi ts (retirement and medical care and similar commitments) calculated using the projected unit credit method were as follows:
in € millions Commitment as at Commitment as at Commitment as at 31 December 2005 31 December 2004 31 December 2004 (new model) (new model) (former model)
Employee pensions 8,216 7,292 5,227 Medical care 1,496 1,335 1,295 Compensation for work-related injuries (retired employees and widows) 594 585 585
Total off-balance sheet commitments 10,306 9,212 7,107
SNCF changed its model for commitments between 2004 2005 following the inclusion of a new mortality table and an and 2005. The valuation assumptions adopted in 2004 and individual-by-individual approach are as follows:
31 December 2005 31 December 2004 31 December 2004 (new model) (new model) (former model)
Gross discount rate 4.25% 4.5% 4.5%
Infl ation rate 2.0% 2.0% 2.0%
Mortality table TPG93 projected TPG93 projected 1999-2001 SNCF generation table generation table male mortality table +INSEE tables before 55 years and after 100 years
Turnover table 18-29 years: 2.0% 18-29 years: 2.0% No turnover 30-41 years: 0.0% 30-41 years: 0.0% 42-49 years: 0.3% 42-49 years: 0.3% 49-55 years: 0.9% 49-55 years: 0.9%
Gross growth rate of wages +3.5% +3.8% +2.5%
Gross growth rate of pensions and medical care benefi ts +2.0% +2.0% +2.5%
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Retirement benefi t commitments Compensation for work-related injuries Retirement benefi t commitments primarily result from the The company self-fi nances compensation for work-related Law of 21 July 1909 defi ning the special regime applicable injuries owed to active and retired employees. to SNCF employees and Article 30 of the SNCF terms of Payments made to retired employees and surviving refe rence defi ning, with effect from 1 January 1970, the terms spouses are viewed by SNCF as additional pensions. As and conditions under which the French State assures the such, the probable present value of these additional pension fi nancial balance of this regime. payments is included in off-balance sheet commitments. In return for the payment by SNCF of “standard” contri- Annual compensation for work-related injuries owed butions to the Pension fund, the French State assures the to active employees is viewed as additional remuneration. fi nancial balance of the pension regime. The “standard” A loss provision is booked to cover the probable present contribution rate is determined based on SNCF contri butor value of such payments (€91 million as at 31 December and pensioner populations, adjusted for demographic imba- 2005). lance compared to that of other common law pension schemes. The contribution rate was regularly reviewed until 2005 expense in respect of employee 1990. The Decree of 27 February 1991 set it at 36.29% of benefi ts total payroll costs, broken down between employee contri- The increase in commitments during fi scal year 2005 was butions of 7.85% and employer contributions of 28.44%. the result of: However, the benefi ts specifi c to the SNCF scheme, • Actuarial cycle for the recognition of commitments: created in 1990, compared with the benchmark scheme, – Financial cost linked to the loss of a discounting year; are fi nanced by SNCF and its employees. The new benefi ts – Cost of entitlement vested due to the acquisition of an ad di- relate to the defi nition of the liquid pension base (succes- tional year of service; sive integration of residence compensation percentages, – Payment of employee contributions. implementation of the new remuneration system) and an • Changes during the year: increase in the minimum pension level. – Scheme amendments; – Actuarial variances resulting from changes in assumptions Medical care and other commitments or relating to differences between assumptions made and The company itself fi nances medical care benefi ts their effective realisation during the year. provided to active and retired employees, via the SNCF The pension cost includes an amendment to incorporate a medical care fund and the SNCF senior executive medical residence compensation half-point in the liquid pension base care fund. in fi scal year 2005. Benefi ts include the reimbursement of medical costs, Actuarial variances mainly result from the change in the tem porary accommodation allowances, retirement allow- discount rate used or a change in the revaluation assump- ances and death allowances. Part of these guarantees are tion for wages. covered by the national redistribution mechanism under the Social Security healthcare regime. As such, only additional healthcare coverage, temporary accommodation allowances, retirement allowances and death allowances are borne by SNCF. These constitute the SNCF employee medical care regime, fi nanced by employee and employer contributions over and above reinsurance contri- butions related to bilateral compensation for medical insu- rance.
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These movements can be broken down as follows:
in € millions Retirement Medical care Compensation Total
Commitments at the end of 2004 (new model) 7,292 1,335 585 9,212 Financial cost 328 60 27 415 Cost of vested rights 132 26 158 Benefi ts –344 –63 –61 –468 Amendments 510 510 Actuarial variances 298 138 43 479
Commitments at the end of 2005 8,216 1,496 594 10,306
17. Loans and Borrowings
Loans and borrowings recorded in the balance sheet relating to finance lease transactions entered into by the consist of long-term loans issued by the Group (excluding Group and cash borrowings. the parent company Special Debt Account), liabilities
in € millions 31/12/05 31/12/04
Long-term borrowings (a) 10,272 12,128 Bond issues 8,487 10,030 Other long-term borrowings 1,573 1,854 Accrued interest payable 212 244 Cash borrowings 2,094 2,325 Treasury notes 1,532 1,587 EMTN – – Deposits received 46 123 Other borrowings 165 234 Bank overdrafts 337 374 Foreign currency-denominated borrowings 3 3 Accrued interest payable 11 4
Liabilities excluding fi nance leases 12,365 14,453
Finance lease liabilities (b) 3,679 3,579 Finance leases 3,664 3,556 Accrued interest payable 15 23
Loans and borrowings 16,045 18,032
Including long-term borrowings (a)+(b) 13,951 15,707
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Long-Term Borrowings
Maturity structure of long-term borrowings, including fi nance lease liabilities, after adjustment for derivatives.
in € millions 31/12/05 31/12/04
Maturing within 1 year 2,819 2,114 Maturing within 1 to 5 years 5,714 7,239 Maturing after 5 years 5,331 6,501 Neutralisation of swap contracts impact –142 –413 Long-term borrowings excluding accrued interest payable 13,722 15,441 Accrued interest payable 227 266 Long-term borrowings 13,950 15,707
Currency structure of long-term borrowings, including fi nance accrued interest payable. lease liabilities, after adjustment for derivatives and excluding
in millions 31/12/05 31/12/04
Euro 13,105 14,753 Swiss franc 451 778 US dollar 1 Pound sterling 308 308 Other 14 Neutralisation of swap contracts impact –142 –413 Long-term borrowings excluding accrued interest payable 13,722 15,441 By interest rate: Fixed rate 9,514 11,280 Floating rate 4,350 4,574 Neutralisation of swap contracts impact –142 –413
Borrowings Net of the Réseau Ferré de France (RFF) Receivable
The structure of the RFF receivable is described in Note 7.
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Maturity Structure of Net Long-Term Borrowings, Including Finance Lease Liabilities, after Adjustment for Derivatives
in € millions 31/12/05 31/12/04
Maturing within 1 year 1,162 498 Maturing within 1 to 5 years 2,614 2,538 Maturing after 5 years 3,434 4,554 Neutralisation of swap contracts impact –142 –413 Long-term borrowings excluding accrued interest payable 7,068 7,177 Accrued interest payable 71 94 Long-term borrowings 7,140 7,271
Currency and interest rate structure of net long-term borrow- derivatives and excluding accrued interest payable ings, including fi nance lease liabilities, after adjustment for
in millions 31/12/05 31/12/04
Euro 7,064 7,315 Swiss franc 146 252 US dollar 1 Pound sterling 8 Other 14 Neutralisation of swap contracts impact –142 –413 Long-term borrowings excluding accrued interest payable 7,068 7,177 By interest rate: Fixed rate 7,159 6,796 Floating rate 51 794 Neutralisation of swap contracts impact –142 –413
Maturities of Cash Borrowings
Only cash borrowings with an initial maturity of three months the consolidated statement of cash fl ows. or less fall within the defi nition of cash for the purposes of
in € millions 31/12/05 31/12/04
Initial maturity of 3 months or less 1,298 1,717 Treasury notes 903 1,135 Bank overdrafts 337 374 Deposits received 38 115 Foreign currency-denominated borrowings 3 3 Other borrowings 16 90 Initial maturity of 3 months or more 796 608 Treasury notes 628 452 EMTN Deposits received 8 8 Other borrowings 148 144 Accrued interest payable 11 4 Cash borrowings 2,094 2,325
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Group Net Indebtedness
The Group manages its net indebtedness by reference to a on the balance sheet, Group net indebtedness breaks down nominal debt amount approved by the shareholder. Based as follows:
in € millions 31/12/05 31/12/04
Long-term borrowings excluding accrued interest payable 13,724 15,441 RFF receivable excluding accrued interest receivable –6,654 –8,263 Impact of swap contracts 142 413 Net borrowings (a) 7,212 7,591 Cash equivalents at less than one year (b) –847 92 Group net indebtedness (a)+(b) 6,364 7,684
18. Derivatives
Foreign Exchange Instruments
Currency swaps In order to reduce its exposure to exchange rate fl uctua- corresponding borrowing. tions on certain borrowings, the Group enters into currency The nominal amount of currency swaps as at 31 December swaps. Such hedges are matched specifi cally against the 2005 is as follows:
in millions Commitments received Commitments (in foreign currencies) given (in euros)
Euro 144 145 Swiss franc 600 389 US dollar 1,540 1,345 Australian dollar 43 23 Canadian dollar 400 250 Hong Kong dollar 472 57 New Zealand dollar 100 50 Pound sterling 926 1,462 Japanese yen 78,500 603
Forward currency purchases Forward currency sales
in millions Foreign currency in millions Foreign currency
US dollar 250 US dollar 1
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Currency options
in millions 31/12/05
Euro call sale 101 Euro put sale 3
Interest Rate Instruments
In managing the interest rate risk exposure of its borro- Swap and swaption outstandings, represented by their wings, the Group trades on the interest rate swap and nominal outstandings, are as follows: :swaption market.
in millions Net long-term Net short-term borrowings borrowings
Fixed rate receiver swaps 1,475 1,893 Fixed rate payer swaps 6,382 1,881 Index-based swaps 2,534
Commodity Instruments A counterparty approval procedure exists, with invest- ment volume and term limits for each counterparty. As part of its ordinary activities, the parent company trades on petroleum product forward markets in order to optimise its fuel Derivatives supply costs. Derivative transactions seek to manage the interest The corresponding commitments are as follows: rate and foreign exchange risk resulting from normal activi- ties. They are restricted to regulated market and over-the- In tons Volume counter transactions with approved counterparties with which a framework agreement has been signed. A gua- Commodity swaps (fi xed payer) 24,000 rantee framework agreement is also signed with certain Swaption sales (fi xed payer) 82,500 counterparties in order to limit counterparty risk. Market Value of Derivatives Management of Counterparty Risk Procedures for valuing derivatives as at 31 December 2005 The main transactions which could generate counter- differ according to the nature of the instrument concerned. party risk are: The fair value of conventional interest rate and currency swaps was calculated by discounting future fl ows, leg by Financial investments leg, based on zero coupon curves as at 31 December 2005, Financial investments are diversifi ed. They prima- determined by a valuation model from a market software rily consist of negotiable debt instruments (certifi cates package used by the company. of deposit, commercial paper), treasury note repos and Other interest rate and currency swap transactions subscriptions to French money-market mutual funds were valued at prices provided as at 31 December 2005 by (UCITS). fi nancial institution counterparties of the company.
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The fair value of OTC currency options was determined by Estimated market Profi tability a valuation model from a market software package used by value (excluding (premiums – the Company. accrued interest) market values) All market parameters used in this valuation were obtained as at 31/12/05 as at 31/12/05 from contributors external to the company. The market value of derivatives corresponds to the amount Management of forex risk payable (–) or receivable (+), excluding accrued interest, to Currency swaps –94 – cancel these commitments. Management of interest rate risk Estimated market values as at 31 December 2005 (excluding Interest rate swaps –287 – accrued interest) are presented hereafter:
19. Operating and Other Liabilities
in € millions 31/12/05 31/12/04
Accounts payable and related accounts 2,752 2,488 Payments on account received on orders 83 39 Employee-related payables 945 891 Amounts payable to the French State and local authorities 1,107 1,041 Deferred tax liabilities 36 29 Other operating liabilities 1,083 824 Investment subsidies 4,398 3,917 Hedged translation differences 128 477 Accruals and deferred income 1,202 1,024
Total 11,734 10,730
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20. Division Segment Information
Information by Activity Sectors
in € millions 31/12/05 31/12/04 PRO FORMA
Revenues 20,994 20,231 Long-distance Passengers, France & Europe 5,933 5,587 Public Transport 5,475 5,220 Freight 6,703 6,650 Infrastructure 4,342 4,205 Common Operations and Investments 3,950 4,062 Inter-division Transactions –5,410 –5,494
Gross operating income 1,800 1,618 Long-distance Passengers, France & Europe 1,076 926 Public Transport 417 408 Freight 146 19 Infrastructure 7 –12 Common Operations and Investments 153 277
Net income from ordinary activities 533 216 Long-distance Passengers, France & Europe 645 419 Public Transport –17 –6 Freight –143 –352 Infrastructure –46 –67 Common Operations and Investments 94 222
The 2004 pro forma information includes changes in depreciation and impairment, and the creation of the Group structure (see Note 2.2), the regulation on asset Common Operations and Investments Division.
Breakdown of Revenues by Geographical Area
in € millions 31/12/05 31/12/04 PRO FORMA France International Total France International Total revenues revenues
Long-distance Passengers, France & Europe 5,027 906 5,933 4,747 840 5,587 Public Transport 5,473 2 5,475 5,220 0 5,220 Freight 4,605 2,098 6,703 4,410 2,240 6,650 Infrastructure 4,270 72 4,342 4,135 70 4,205 Common Operations and Investments 3,758 192 3,950 3,854 208 4,062 Inter-division transactions –5,410 0 –5,410 –5,494 0 –5,494
Total 17,724 3,270 20,994 16,872 3,358 20,231
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Breakdown of Net Assets by Geographical Area
in € millions 31/12/05 31/12/04 IN € IN % IN € IN % MILLIONS MILLIONS
Total net non-current assets 17,692 16,960 France 17,441 99% 16,473 99% International 251 1% 217 1%
21. Purchases and External Charges
in € millions 31/12/05 31/12/04
Purchases (including inventory movements) –2,624 –2,548 Sub-contracting –2,627 –2,746 Rental –350 –542 Infrastructure fees (1) –2,478 –2,428 Other external charges –2,340 –2,310
Total –10,419 –10,574
(1) Including fees invoiced by Réseau Ferré de France and Eurotunnel.
22. Employee Costs and Numbers
in € millions 31/12/05 31/12/04
Employee costs –9,157 –9,779 including employee profi t-sharing –21 –21 Average number of employees (full-time equivalent) 205,839 229,877
The decrease in SNCF Group employees is primarily due to the equity-accounting of Keolis and SHEM and the disposal of Sernam.
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23. Depreciation, Amortisation and Operating Provisions
in € millions 2005 2004
Depreciation and amortisation (net) –941 –1,081 Provisions for impairment of non-current assets (net) 13 –1 Provisions for impairment of current assets (net) –19 –6 Provisions for contingencies and losses (net) –21 –12
Total –969 –1,100
The main changes were attributable to: • the change in consolidation method for Keolis (impact of €42 million); • the impact of 2005 charges on application of the asset regulation: –€71 million increase for tangible assets; –€134 million decrease for rolling stock.
24. Net Financial Income
in € millions 31/12/05 31/12/04
Cash management and borrowing costs, net –355 –375 Net gains on fi nance lease transactions (1) 7 23 Income from non-consolidated investments 12 6 Other fi nancial income and expenses 34 –15
Total –303 –361
(1) Decline in net income from parent company lease transactions (a US lease transaction for €16 million in 2004, compared to a New Zealand lease transaction for €5 million in 2005).
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25. Exceptional Items
in € millions 31/12/05 31/12/04
Capital gains on asset disposals 960 227 Disposal of real estate assets 141 183 Other disposals 819 44 Impairment of non-current assets –107 –48 Other –10 17
Total 844 196
The line item mainly comprises the gains on disposal of SHEM and Cegetel SAS.
26. Income Tax
Analysis of the Tax Charge
in € millions 31/12/05 31/12/04
Current tax charge –36 –59 Deferred tax income 2 34 Total tax income (charge) –34 –25
The current tax charge primarily concerns Geodis (€36 million).
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Tax Proof
in € millions 2005 2004
Net income of consolidated companies 1,343 457 Income tax recorded –34 –25 Net income before tax of consolidated companies 1,377 482 Tax rate 33.83% 35.43%
Notional tax –466 –171 Permanent differences 9 –2 Items taxed at a different rate 129 1 Tax reduction on non-capitalised prior tax losses 373 209 Unrecognised tax assets on timing differences for the year –89 –71 Elimination of inter-company provisions on investments 18 Supplementary tax –11 Other 1 8
Tax charge recorded –34 –25 Effective tax rate 2.5% 5.2%
Tax Assets Not Recognised
SNCF opted for the tax grouping regime on 1 July 1988. As Company tax losses carried forward as at 31 December at 31 December 2005, the tax group comprised 37 subsi- 2005 amounted to €10.1 billion. diaries. The main subsidiaries are Seafrance, SNCF Partici- The amount of unrecognised tax assets amounted to pations and France Wagons. €3.9 billion as at 31 December 2005. Deferred Taxes Recognised
in € millions 31/12/05 31/12/04
Tax loss carry-forwards – – Non-deductible provisions 19 17 Pensions 9 7 Other timing differences 16 15 Net assets/liabilities – –5 Deferred tax assets 43 35
Valuation differences 18 28 Regulated provisions 7 3 Other timing differences 11 3 Net assets/liabilities – –5 Deferred tax liabilities 36 29
Deferred tax assets mainly stem from Geodis (€35 million). Deferred tax liabilities mainly concern Ermewa (€22 million), Geodis (€10 million) and STVA (€3 million).
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27. Off-Balance Sheet Commitments
in € millions 31/12/05 31/12/04 MATURING WITHIN Commitments Given/Received Total less than 1 year 1 to 5 years more than 5 years Total commitment commitment
Operating leases Real estate operating leases given 821 212 435 174 982 Equipment operating leases given 284 16 59 209 314 Equipment operating leases received 9 9 0 0 5 Real estate operating leases received 2 1 0 1 2
Irrevocable purchase commitments Purchase commitments given to suppliers (railway equipment) (1) given 3,650 1,252 2,370 28 3,781 Purchase commitments from suppliers (railway equipment) (1) received 1,185 590 595 0 1,327 Eurotunnel minimum use fee (2) given 127 127 0 0 260
Credit lines Available bank credit lines received 619 269 350 0 471
Financial guarantees vis-à-vis associated undertakings: Guarantees given (3) given 610 255 250 104 656 Guarantees received (4) received 365 82 223 60 461 vis-à-vis employees: Guarantees given in respect of loans secured by employees (5) given 855 855 0 0 735 vis-à-vis third parties: Endorsements and guarantees given 146 40 83 23 375 Endorsements and guarantees received 1,032 79 79 873 677
Debt purchase commitment given 88 0 88 0 93
Other contingent commitments Offers to sell – real estate received 39 39 0 0 102 Offers to sell – real estate given 0 0 0 0 8 Investment purchase or sale option received 16 16 0 0 34 Investment purchase or sale option given 115 2 113 0 113 Advances repayable to third parties given 49 44 3 2 0
Total off-balance sheet commitments given 6,745 2,802 3,403 541 7,318 received 3,266 1,085 1,247 934 3,079
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(1) Purchase commitments concerning fi rm orders for rolling stock. Commitments received correspond to investment subsidies receivable from regions for ordered rolling stock (TER). (2) The company has committed to pay Eurotunnel, up to the end of 2006, a minimum usage fee independent of traffi c levels (€127 million). (3) Guarantees given concern €365 million in guarantees granted by the company in respect of SOFIAP (formerly SOCRIF) borrowings. (4) Guarantees received concern in full a joint and several sight counter-guarantee given to the company in respect of the loans granted to SOFIAP. They perfectly match the guarantees given. (5) Total outstandings on guarantees given by the company in respect of real estate loans secured by employees. Statistically, guarantee calls are very limited.
Freight Plan • Distribution of preferred dividends by Ermewa France to Financière Ermewa. On 2 March 2005, the European Commission approved the contribution of public fi nancial aid to the SNCF Freight Plan. The Commission decision authorised a maximum SHEM payment of €1.5 billion to SNCF Freight, of which €800 million from the French State and €700 million from SNCF. Pursuant to the agreement signed on 21 October 2002 Given the fi rst payment of €250 million received in 2005 with Electrabel, the Group sold 40% of its equity interest in from the French State, payments receivable from the SHEM, resulting in the irrevocable sale of an additional 40% French State amount to €550 million (the allocation of the on 1 January 2007. In addition, the Group has a commit- fi nal €100 million being subject to conditions). ment to purchase for the balance of its interest exercisable However, payments are subject to a “notching” mecha- between January 2007 and April 2010. nism, based on SNCF Freight’s net income from ordinary activities, and the Commission’s approval contains a certain number of considerations. In addition, the aid payment is Keolis subject to the opening up of the French freight market to new operators from March 2006. As part of the set-up of senior fi nancing and mezzanine capital related to the acquisition operations and the fi nancial restructuring of the Keolis subgroup, various guarantees Ermewa were granted to the lenders, including: • A pledge by Financière Keos on the securities and loans it In connection with the sale of 50.4% of Groupe Ermewa holds on Eole, and its bank accounts; Suisse securities to an external partner, the following • A pledge by Keolis on its business value and various secu- com mitments were given: rities of companies. • An exit agreement was signed by the shareholders pro- In order to support the projected fi nancing of the new viding preferred withdrawal options and, if necessary, a guar- Keolis group, Financière Keos granted share subscription anteed return on the Group’s investment for the partner. The options to SNCF Participations, 3i, and Management. The gua rantee extends to July 2007 and totals €88 million; holder will only be able to exercise these options under one • Commitments have been granted by the Group until of the following three conditions: July 2007 for the partner’s backers in the total amount of • stock market listing, €68 million, the payments made for the purchase of these • end of the majority control by 3i, commitments being deducted from the aforementioned • expiration of a 15-year period. guarantee; Should all the options be exercised, the stake of SNCF • Pledge of Financière Ermewa, Groupe Ermewa Genève Participations in Financière Keos could reach 33.4%. and Ermewa Paris securities to lending banks as a gua- SNCF Participations, 3i and other investors concluded rantee against the repayment of amounts borrowed; shareholder agreements determining procedures, terms • Pledge of the Ermewa France and TMF business values and conditions governing withdrawals. Specifi cally, these to lending banks; comprise:
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• Preferred withdrawal options: stock market listing, free income. The acquisition cost has not been modifi ed as at transfer, complete disposal with right of refusal for SNCF 31 December 2005. Participations; • Pre-emption rights or complete disposal for SNCF Partici- pations; STVA • Rights of other shareholders and investors (pre-emption right, joint purchase, joint disposal, mandatory withdrawal). As part of the set-up within STVA of a corporate A commitment extending to September 2007 was savings scheme, whose funds will be managed by Crédit granted by SNCF Participations to 3i in order to buy back Agricole Epargne Salariale, the Group undertook to assure the remaining capital due to 3i with respect to the share- the liquidity of the STVA mutual fund (created specifi cally holder loan granted to Financière Keos, for a maximum for this purpose), whose assets primarily comprise STVA amount of €6.5 million. shares.
Geodis Alpine Rail Motorway
As part of the acquisition of 50% of the share capital The French State has committed to fi nance (for its share, of Thalès Freight and Logistics, Geodis undertook to pay i.e. 50%) the operating defi cit of the Alpine Rail Motorway an additional consideration equal to 50% of 2004 post-tax experimental phase.
28. Consolidated Statement of Cash Flows
Closing Cash Balance
The closing cash balance breaks down as follows:
in € millions 31/12/05 31/12/04
Cash at bank and in hand 454 441 Marketable securities with an initial maturity of less than 3 months 1,438 1,052 Deposits received with an initial maturity of less than 3 months 529 475 Cash borrowings with an initial maturity of less than 3 months –1,282 –1,717 Closing cash balance 1,138 251
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Movement in the Cash Balance The resources essentially stem from the disposal of real estate assets. Net cash from operations The impact of changes in Group structure for €905 Net cash from operations amounted to €1,570 million million primarily involves the SHEM disposals to Electrabel, compared to €1,233 million in 2004. resulting in the equity accounting of SHEM and the disposal This cash contribution essentially stems from the cash fl ow of Cegetel SAS to SFR, and the reconsolidation of SICF, from company operations (+€1,442 million) and the improve- which contributed cash of €147 million. ment in working capital requirements (+€120 million). Net cash from fi nancing activities Net cash used in investing activities Net cash from fi nancing activities generated a net On a comparable Group structure basis, net cash used resource of +€368 million, including €735 million in invest- in investing activities remains substantial: €1,954 million in ment subsidies primarily received for TER rolling stock. 2005 (compared to €1,733 million in 2004), for an increase Loan issues on the market, excluding Special Debt Account of €221 million or 13%. fi nancing, totalled €448 million, with repayments of €984 Investments primarily concern the acquisition and reno- million. vation of rolling stock (€1,513 million) and the upgrading of stations and buildings (€653 million).
Analysis of Group Net Debt
in € millions 31/12/05 31/12/04 Change
Long-term borrowings excluding accrued interest payable 10,059 11,884 –1,825 Finance lease liabilities excluding accrued interest payable 3,664 3,556 108 Cash borrowings maturing in more than 3 months (including deposits) 796 608 188 RFF receivable excluding accrued interest receivable –6,654 –8,263 1,609 Marketable securities maturing in more than 3 months –508 –240 –268 Net debt with an initial maturity of more than 3 months (a) 7,358 7,545 –187 Net debt fi nancing cash fl ows in the statement of cash fl ows (b) –597
DIFFERENCE (a)–(b) 409
The difference breaks down as follows:
in € millions
Exchange rate fl uctuations on RFF receivable 13 Exchange rate fl uctuations on borrowings 237 Changes in Group structure 21 Finance lease liabilities 138
Total 409
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29. SNCF Financial Statements for the Special Debt Account and Employee-Related Benefi ts Service Account SNCF Balance Sheet and Income Statement for the Employee-Related Benefi ts Service Account Balance sheet
in € millions 31/12/05 31/12/04 Pension Fund Medical care Other Total Pension Fund Medical care Other Total Funds Funds
Assets Non-current assets 28 1 48 77 28 2 46 76 Current assets 1,288 138 22 1,448 1,217 125 19 1,361 Total assets 1,316 139 70 1,525 1,245 127 65 1,437
Liabilities & shareholders’ equity Net equity 40 157 31 228 40 158 31 229 Other liabilities 90 170 52 312 92 102 34 228 Inter-company accounts 1,186 –188 –13 985 1,113 –133 980 Total liabilities & shareholders’ equity 1,316 139 70 1,525 1,245 127 65 1,437 Total liabilities & shareholders’ equity excluding inter-company accounts 130 327 83 540 132 260 65 457
Income statement
in € millions 31/12/05 31/12/04 Pension Fund Medical care Other Total Pension Fund Medical care Other Total Funds Funds
Expenses Benefi ts paid to members 4,638 1,565 247 6,450 4,545 1,599 235 6,379 Other expenses 58 199 18 275 54 136 17 207 Total expenses 4,696 1,764 265 6,725 4,599 1,735 252 6,586
Income Members’ contributions 339 23 1 363 336 25 1 362 Employer contributions 1,222 464 11 1,697 1,205 467 11 1,684 Compensation and contractual payments 3,108 1,186 245 4,539 3,032 1,201 233 4,466 Other income 27 89 8 124 26 89 7 122 Total income 4,696 1,762 265 6,723 4,599 1,782 252 6,633 Net income – –2 – –2 – 47 – 47
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SNCF Balance Sheet and Income Statement for the Special Debt Account Balance sheet
in € millions 31/12/05 31/12/04 31/12/05 31/12/04
ASSETS LIABILITIES AND SHAREHOLDERS’ EQUITY Miscellaneous assets (3) 263 131 Capital contribution for the year (Note 3) 205 190 Accumulated defi cits (1) –8,613 –8,825 Net income for the year 19 23 263 131 Total –8,389 –8,613
Borrowings (2) 8,462 8,556 Inter-company accounts 4 15 Other liabilities (3) 175 192
Total 263 135 Total 263 135
Total excluding Total excluding inter-company accounts 263 131 inter-company accounts 248 135
(1) The accumulated defi cit balance is reduced each year by net income from the Special Debt Account and the prior year capital contribution. (2) Including accrued interest payable. (3) Asset and liability accounts are presented after neutralisation of swap contracts impact. Income statement
in € millions 31/12/05 31/12/04 31/12/05 31/12/04
EXPENSES INCOME Financial expenses 540 505 Financial income 70 24 Other expenses 1 1 French State contribution 472 487 Net income for the year 19 23 SNCF contribution 18 18
Total 560 529 Total 560 529
As at 31 December 2005, Special Debt Account liabilities, after 31 December 2004), excluding accrued interest. swap contracts, amounted to €8.3 billion (€8.5 billion as at Maturity structure
in € millions 31/12/05 31/12/04
Maturing within Less than 1 year 486 1,447 1 to 5 years 4,088 3,667 More than 5 years 3,686 3,385 Neutralisation of swap contracts impact –4 –140
Special Debt Account borrowings excluding accrued interest payable 8,256 8,359 Accrued interest payable 205 197
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Currency structure excluding accrued interest
The currency breakdown of borrowings allocated to the Special Debt Account, before adjustment for derivatives, is as follows:
in € millions 31/12/05 31/12/04
Euro 6,724 7,671 Swiss franc 386 – Pound sterling 73 71 US dollar 763 440 Australian dollar 26 25 Canadian dollar 182 61 Hong Kong dollar 44 38 New Zealand dollar 58 53
Special Debt Account borrowings excluding accrued interest payable 8,256 8,359
The currency breakdown of borrowings allocated to the Special Debt Account, after adjustment for derivatives, is as follows:
in € millions 31/12/05 31/12/04
Euro 8,260 8,499 Neutralisation of swap contracts impact –4 –140
Special Debt Account borrowings excluding accrued interest payable 8,256 8,359 Interest rate structure excluding accrued interest payable
The breakdown by interest rate type of borrowings allocated to the Special Debt Account, after adjustment for deriva- tives and the cash balance mechanism, is as follows:
in € millions 31/12/05 31/12/04
Fixed rate 7,399 7,321 Floating rate 861 1,178 Neutralisation of swap contracts impact –4 –140
Special Debt Account borrowings excluding accrued interest payable 8,256 8,359
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tion of the passenger urban transport market and specifi - 30. Litigation cally Keolis. A provision was recognised in the Keolis fi nan- cial statements. A ruling against the company was handed and Disputes down during the fi rst half of 2005.
The Group is involved in a number of legal proceedings and disputes in the course of its operating activities, which were unresolved at the year-end. Provisions are raised to cover the charges associated with these disputes where 31. Subsequent Events they are considered probable and can be quantifi ed or esti- mated with reasonable accuracy. Signature of a Financing Agreement for the Eastern Leg of the Rhine-Rhone TGV France Télécom On 28 February 2006, the Minister for Transport, the In October 2000, SNCF initiated a suit against France presidents of the local communities of Alsace, Franche- Télécom before the Paris administrative court in order to Comté, Bourgogne and Rhône-Alpes, and the chairmen of obtain payment of damages with respect to the installa- RFF and SNCF signed a fi nancing agreement for the fi rst tion of telecommunications cable on SNCF rail property phase of the eastern leg of the Rhine-Rhone TGV, which between 1991 and 1997. In his conclusions before the links Dijon to Belfort. tribunal, the Government commissioner dismissed all the These facilities will be co-fi nanced by the State and inadmissibility grounds raised by France Télécom with the SNCF. The cost of infrastructures under RFF project exception of the SNCF receivable held on France Télécom management is estimated at €2.3 billion, co-fi nanced by that was transferred to RFF on 1 January 1997. RFF, the State, the local communities involved, Switzerland By notifi cation dated 5 April 2004, the Paris administrative and the European Union. court rejected the SNCF suit on the grounds that the company With over €1 billion in equity-fi nanced investments, had no reason to act in accordance with Article 6 of the law of including over €900 million for the purchase of some thirty 13 February 1997. SNCF appealed the ruling on 28 May 2004 TGV trains for new services, SNCF is the largest fi nancial before the registry of the Paris administrative appeal court. The contributor among the partners. parties are now exchanging their statements of claim. SNCF considers that it has solid arguments to contest this ruling. Projected timetable • June 2006: signature of a fi nancing agreement between the State, the Rhone-Alpine communities and SNCF; Tax Audit • Spring/summer 2006: beginning of work on the high- speed line by RFF; Throughout 2005, the SNCF accounts were audited with • End of 2011: commissioning of the high-speed line. respect to fi scal years 2002 and 2003. Following the audit, SNCF was reassessed in the amount of €5.3 million for payroll tax and €10 million for the business licence tax. Assessments Law on Transport and Traffi c Safety were also notifi ed for corporate income tax, but there is no fi nancial impact given the SNCF tax loss carry-forwards. With In accordance with the State’s commitment, upon the respect to VAT, all potential disputes have been abandoned. European Commission’s validation of the Freight Plan, SNCF’s monopoly over freight transport will be eliminated beginning 31 March 2006 pursuant to law 2006-10 of Keolis 5 January 2006 on transport safety and development.
In 1999, the French General Directorate for Fair Trading, Consumer Affairs and Fraud Control launched an investiga-
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32. Scope of Consolidation
Percentage interest: share in the share capital of the Percentage control: percentage of voting rights held by the consolidated company held by the consolidating company, consolidating company in the consolidated company, either either directly or indirectly. directly or indirectly.
Long-distance Passengers, France & Europe
% control % interest
Direct SNCF Participations subsidiaries Fully consolidated Voyageurs France Europe Partenaires 100.00 99.89 Public Transport
% control % interest
Direct SNCF Participations subsidiaries Fully consolidated Effi a 99.99 99.79 Equity-accounted Financière Keos (Keolis holding company) 45.35 45.30 Freight
% control % interest
Direct SNCF Participations subsidiaries Fully consolidated France Wagons 100.00 99.89 Sté de Transports de Véhicules Automobiles (STVA) 82.22 81.84 Naviland Cargo 93.81 94.27 Cie de Transports de Céréales (CTC) 53.06 69.28 Geodis 45.07 43.96 Proportionate consolidation Ermewa SA (Paris) 66.14 64.15 Groupe Ermewa SA 49.60 49.55 Direct Geodis subsidiaries Fully consolidated Bourgey Montreuil Holding 100.00 43.96 Calberson SA 100.00 43.96
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Infrastructure
% control % interest
Direct SNCF Participations subsidiaries Fully consolidated SNCF International 100.00 99.89 Proportionate consolidation Systra SA 35.86 35.83 Common Operations and Investments
% control % interest
Direct SNCF subsidiaries Fully consolidated Sté Immobilière de Construction Française (SICF) 100.00 100.00 SNCF Participations 99.83 99.89 Equity-accounted Eurofi ma 23.70 23.70 Direct SNCF Participations subsidiaries Fully consolidated Seafrance 100.00 99.89 Equity-accounted Sté Hydro-Electrique du Midi (SHEM) 20.00 19.98
Detailed Scope of Consolidation
Consolidation methods: • FC: Full Consolidation • PC: Proportionate Consolidation • EA: Equity-Accounted • NC: Non-consolidated
Change in Group structure • CNG: Change in corporate name • CME: Change in method • CPC: Change in % control • EEX: Entry – external growth • ECO: Entry – consolidation criteria • ECR: Entry – creation • RDI: Removal – disposal • RCO: Removal – consolidation criteria • RME: Removal – merger • RLI: Removal – liquidation
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M PC PI PC PI CHG M PC PI PC PI CHG year year year year year year year year N N N–1 N–1 N N N–1 N–1
SNCF FC 100.00 100.00 100.00 100.00 Cars Jura sud EA 100.00 45.57 100.00 45.57 Cars Rebmann Lavergne EA 100.00 44.31 100.00 44.31 PUBLIC TRANSPORT Cars Sylvestre EA 100.00 45.57 100.00 45.57 Ceyte Tourisme Méditerranée EA 100.00 44.41 100.00 44.41 Aérobag EA 100.00 44.32 100.00 44.32 Cie Bus Alençonnais – Cobal EA 100.00 44.41 100.00 44.41 Aerolignes EA 100.00 44.41 100.00 44.41 Cie Maritime Penn Ar Bed EA 100.00 44.41 100.00 44.41 Aéroport Angers Marcé EA 100.00 44.41 100.00 44.41 Cie Tpts Agglom. Caennaise EA 98.90 43.93 98.90 43.93 AEROSAT EA 85.00 37.75 85.00 37.75 Cie Tpts Agglom. Châtellerault EA 100.00 44.41 100.00 44.41 Airelle EA 100.00 44.41 100.00 44.41 Cie Tpts Besançon EA 99.93 44.38 99.93 44.38 Ateliers Chantiers de Fécamp EA 99.99 44.41 99.99 44.41 Cie Tpts Cherbourg EA 99.88 44.36 99.88 44.36 Athis Cars EA 99.40 45.30 99.40 45.30 Cie Tpts Comm. Urb. Brest EA 100.00 44.41 100.00 44.41 Autocars Charrière Fils EA 99.70 44.28 99.70 44.28 Cie Tpts de l’Artois EA 99.98 44.41 99.98 44.41 Bad Kreuznach Bus EA 50.00 22.21 50.00 22.21 Cie Tpts de Morlaix EA 100.00 44.41 100.00 44.41 Best Sell Air NC 49.45 22.50 49.45 22.50 RDI Cie Tpts de Saintes – Buss EA 100.00 44.41 100.00 44.41 Busslink EA 70.00 31.09 70.00 31.09 Cie Tpts Languedoc Narbonne EA 100.00 44.41 100.00 44.41 CABRI St Brieuc EA 100.00 44.41 100.00 44.41 Cie Tpts Méditerranéens EA 99.75 44.31 99.75 44.31 CFT Chalons EA 97.12 43.13 97.12 43.13 Cie Tpts Pays Montbéliard EA 100.00 44.41 100.00 44.41 CFTV EA 100.00 45.57 100.00 45.57 Cie Tpts Région Angevine EA 100.00 44.41 100.00 44.41 CSTA EA 100.00 45.57 100.00 45.57 Cie Tpts Région Lorientaise EA 99.95 44.39 99.95 44.39 CTA Valentinoise EA 99.94 44.39 99.94 44.39 Cie Tpts Roche-sur-Yon – STY EA 100.00 44.41 100.00 44.41 CTCOP EA 49.88 22.15 49.88 22.15 Cie Tpts Urb. Calvados Transports Services EA 100.00 44.41 100.00 44.41 Agglom. Quimperoise EA 100.00 44.41 100.00 44.41 CANAL TP FC 99.96 85.89 99.96 85.89 Cie transports de Tours EA 100.00 44.41 100.00 44.41 Cannaise de Service EA 43.35 43.35 ECR CIP SECURITY EA 100.00 44.41 100.00 44.41 Cariane sur Oise EA 99.80 45.49 99.80 45.49 Citram Littoral EA 100.00 44.41 100.00 44.41 Cariane Adour EA 100.00 45.58 100.00 45.58 City EA 100.00 45.57 100.00 45.57 Cariane Atlantique (TTO) EA 99.99 45.57 99.99 45.57 City Trafi k EA 49.70 22.07 49.70 22.07 Cariane Aveyron (ex-Millau cars) EA 99.87 45.52 99.87 45.52 Citypendeln EA 100.00 44.41 100.00 44.41 Cariane Bourgogne EA 98.88 45.12 98.88 45.12 Compagnie du Blanc Argens EA 99.40 45.31 99.40 45.31 Cariane Cars Val de Saône EA 90.00 40.65 90.00 40.65 Courriers Agglom. Concarneau EA 100.00 44.41 100.00 44.41 Cariane Centre EA 100.00 45.58 100.00 45.58 Devillairs EA 99.92 45.54 99.92 45.54 Cariane Drôme (ex-Drôme Cars) EA 99.93 45.54 99.93 45.54 EASTBOURNE BUSES EA 20.00 8.88 20.00 8.88 Cariane Est EA 100.00 45.58 100.00 45.58 EFFIA FC 99.99 99.79 99.99 99.79 Cariane Eure (Seuge Suzanne) EA 100.00 35.51 100.00 35.51 EFFIA Concessions Cariane Languedoc EA 100.00 45.58 100.00 45.58 (ex-SCETA PARC) FC 99.97 99.75 99.97 99.75 CNG Cariane Pyrénées EA 89.20 40.66 89.20 40.66 EFFIA services (ex-VSP) FC 99.99 99.78 99.99 99.78 Cariane Littoral EA 100.00 45.58 100.00 45.58 EFFIA stationnement FC 100.00 99.76 100.00 99.76 CNG Cariane Loiret EA 100.00 45.58 100.00 45.58 EFFIA transport FC 100.00 99.80 100.00 99.80 Cariane Nord NC 100.00 45.58 100.00 45.58 RME EFFIA voyageurs FC 99.99 99.78 99.99 99.78 Cariane SA EA 100.00 45.47 100.00 45.47 Entreprise Philippe Détré EA 100.00 44.41 100.00 44.41 Cariane Somme EA 100.00 45.58 100.00 45.58 EOLE EA 45.30 45.30 44.50 44.41 Cariane Tour EA 100.00 45.58 100.00 45.58 Eurobahn Niedersachsen Co.KG EA 50.00 22.17 50.00 22.17 Cariane Touriscar Ain EA 65.00 29.62 65.00 29.62 Eurobahn Niedersachsen GmbH EA 50.00 22.17 50.00 22.17 Cariane Val-d’Oise EA 100.00 45.58 100.00 45.58 Eurolines Belgique NC 100.00 22.79 100.00 22.79 RDI Caron Voyages EA 99.94 44.39 99.94 44.39 Eurolines Nederland NC 49.15 22.77 49.15 22.77 RDI Cars de Bordeaux EA 100.00 44.36 100.00 44.36 Eurolines SA NC 49.99 22.53 49.99 22.53 RDI
EEXE_SNCF_CONSOLIDES#162CCD.inddXE_SNCF_CONSOLIDES#162CCD.indd SSec1:78ec1:78 224/05/064/05/06 10:41:0410:41:04 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 79
M PC PI PC PI CHG M PC PI PC PI CHG year year year year year year year year N N N–1 N–1 N N N–1 N–1
Eurolines Tchéquie NC 100.00 44.99 100.00 44.99 RDI Orgebus EA 50.00 22.65 50.00 22.65 Extertalbahn EA 37.50 16.66 37.50 16.66 Pacifi c Car EA 99.62 45.13 99.62 45.13 Financière Keos (holding) EA 45.35 45.30 44.50 44.41 PRIORIS (Segway) EA 100.00 44.41 100.00 44.41 First/Keolis Ltd EA 45.00 19.99 45.00 19.99 Pyrénées Bus EA 100.00 44.41 100.00 44.41 First/Keolis Quiberon stationnement FC 52.00 51.88 52.00 51.88 Transpennine Holding EA 45.00 19.99 45.00 19.99 Regionale Europäische Verkehr. NC 50.00 10.93 50.00 10.93 RDI First/Keolis Transpennine Ltd EA 45.00 19.99 45.00 19.99 Rhenus Keolis Verkehrs GmbH EA 50.00 22.21 50.00 22.21 Freiberg EA 85.00 18.88 85.00 18.88 Rhenus Keolis GTI UK EA 100.00 44.41 100.00 44.41 Verkehrs Verwaltung EA 50.00 22.21 50.00 22.21 Garrel et Navarre EA 100.00 44.41 100.00 44.41 SAP EA 99.87 45.52 99.87 45.52 GIE Orset EA 100.00 45.58 100.00 45.58 SCAC EA 99.98 45.57 99.98 45.57 Govia EA 35.00 15.54 35.00 15.54 SES EA 100.00 44.41 100.00 44.41 Groupe Orléans Express EA 75.00 33.32 75.00 33.32 SNCOA Groupe SERA SA EA 99.76 44.31 99.76 44.31 (cars de l’Ouest Aquitain) EA 100.00 44.36 100.00 44.36 Groupement SCAC Bagnis EA 51.00 23.24 51.00 23.24 SNT Comett EA 100.00 44.41 100.00 44.41 GTI Espagne EA 100.00 44.41 100.00 44.41 SRTA EA 100.00 44.41 100.00 44.41 Idar Oberstein EA 50.00 22.21 50.00 22.21 STA EA 100.00 45.58 100.00 45.58 Institut Keolis EA 43.35 43.35 ECR STA Chauny EA 50.00 22.21 50.00 22.21 Intercars International France NC 50.00 21.83 50.00 21.83 RDI STAD EA 99.78 45.47 99.78 45.47 Interhone EA 100.00 44.41 100.00 44.41 STAR Arles EA 100.00 44.41 100.00 44.41 Intrabus Orly EA 100.00 45.58 100.00 45.58 STAVS EA 99.70 44.26 99.70 44.26 Keolis (holding) EA 45.30 45.30 44.50 44.41 STC Cagnes EA 99.93 44.96 99.93 44.96 Keolis Canada Inc EA 100.00 44.41 100.00 44.41 STC Castelleroussins – ST2C EA 100.00 44.41 100.00 44.41 Keolis Gohelle STEFIM EA 100.00 44.41 100.00 44.41 (ex-Nord-Pas-de-Calais) EA 99.99 44.41 99.99 44.41 STU du Lot-et-Garonne EA 100.00 44.41 100.00 44.41 Keolis Nordic EA 100.00 44.41 100.00 44.41 STUV EA 50.88 23.19 50.88 23.19 Keolis Provence EA 100.00 44.41 100.00 44.41 STUVG EA 100.00 45.58 100.00 45.58 Les Autocars Gris EA 100.00 45.58 100.00 45.58 SVI EA 100.00 45.58 100.00 45.58 Les Cars de Camargue EA 99.04 43.99 99.04 43.99 SVTU EA 99.96 45.56 99.96 45.56 Les Cars du Bassin de Thau EA 100.00 44.41 100.00 44.41 SA Sap Drogoul EA 99.17 44.58 99.17 44.58 Les Cars Roannais EA 100.00 44.41 100.00 44.41 SCE A14 EA 50.92 22.61 50.92 22.61 Les Courriers Bretons EA 100.00 44.41 100.00 44.41 SCI La Rouvière EA 99.07 40.42 99.07 40.42 Les Courriers Catalans EA 100.00 44.41 100.00 44.41 Scodec EA 35.00 15.95 35.00 15.95 Les Courriers d’Ile-de-France EA 99.95 44.39 99.95 44.39 SEACA Les Courriers du Midi EA 100.00 44.41 100.00 44.41 (Aéroport de Chambéry) EA 50.00 49.90 50.00 49.90 Les Courriers Mosellans EA 99.98 44.41 99.98 44.41 SEAG Les Courriers Normands EA 99.94 44.39 99.94 44.39 (Aéroport de Grenoble) EA 50.00 22.17 50.00 22.17 MTI FC 100.00 99.79 100.00 99.79 SEG (Strab. Martin Becker GmbH EA 100.00 22.21 100.00 22.21 d’enlèv. et de gardie.) FC 99.00 99.76 99.00 99.76 Martin Becker Vervaltung EA 100.00 22.21 100.00 22.21 SERAG Voyages EA 99.90 44.29 99.90 44.29 MJ 70 EA 100.00 45.57 100.00 45.57 SERATECH’ EA 100.00 44.31 100.00 44.31 MJ 90 EA 100.00 45.57 100.00 45.57 SETU Oyonnax EA 100.00 44.41 100.00 44.41 Monnet Tourisme EA 100.00 44.32 100.00 44.32 Setver EA 100.00 44.41 100.00 44.41 Monts Jura autocars EA 100.00 45.57 100.00 45.57 SFD EA 100.00 45.58 100.00 45.58 Moselbahn EA 50.00 22.21 50.00 22.21 SGFA FC 90.00 89.68 90.00 89.68 Netlog EA 25.00 5.55 25.00 5.55 Slivia Inc EA 40.00 17.76 40.00 17.76
EEXE_SNCF_CONSOLIDES#162CCD.inddXE_SNCF_CONSOLIDES#162CCD.indd SSec1:79ec1:79 224/05/064/05/06 10:41:0510:41:05 80 SNCF Group — Consolidated Financial Statements 2005
M PC PI PC PI CHG M PC PI PC PI CHG year year year year year year year year N N N–1 N–1 N N N–1 N–1
Sodeli NC 50.00 22.77 50.00 22.77 RDI Transévry EA 39.43 17.61 39.43 17.61 Sodetrav EA 91.86 40.80 91.86 40.80 Transorly EA 100.00 45.58 100.00 45.58 SOMAP (Société pour Transport Braichotte la Mobilité à Paris) EA 100.00 44.41 100.00 44.41 Bendel (ex-STBB) EA 100.00 45.57 100.00 45.57 SOTRAM Martigues EA 100.00 44.41 100.00 44.41 Transport GEP Vidal EA 99.98 44.38 99.98 44.38 South Central EA 35.00 15.54 35.00 15.54 Transports de la Brière EA 59.80 27.30 59.80 27.30 ST2L Westell (ex-Westell Voyages) EA 100.00 44.41 100.00 44.41 Transports George’s EA 99.98 45.56 99.98 45.56 StadtVerkehr Martin Becker EA 100.00 22.21 100.00 22.21 Transports Urbains de Reims EA 98.49 43.75 98.49 43.75 STCAR Sté des Transports Transroissy EA 100.00 45.58 100.00 45.58 Côte d’Azur Riviera EA 100.00 44.58 100.00 44.58 Transtub (réseau de Douai) EA 99.84 45.50 99.84 45.50 STCR Arras EA 99.40 44.06 99.40 44.06 Urbest EA 100.00 45.17 100.00 45.17 Sté des Tpts du littoral Urbest Vesoul EA 100.00 45.17 100.00 45.17 de Toulon (SALT) EA 100.00 44.41 100.00 44.41 Var Tours EA 99.45 40.58 99.45 40.58 Sté des Tpts Urbains de Sète EA 99.80 45.50 99.80 45.50 Via Autoroute EA 99.97 44.40 99.97 44.40 Sté Lyonnaise de Tpts Communs EA 100.00 44.41 100.00 44.41 Via International EA 100.00 44.41 100.00 44.41 Sté Rennaise Tpts et Services EA 100.00 44.41 100.00 44.41 Via Normandie EA 100.00 44.41 100.00 44.41 Ste Tpts Région Boulogne EA 99.99 44.41 99.99 44.41 Via Verkehr Holding GmbH EA 100.00 44.41 100.00 44.41 Sté Tpts Services Aéroportuaires EA 99.98 44.41 99.98 44.41 Via Verkehr Holding Vervaltung EA 100.00 44.41 100.00 44.41 Sté Tpts Agg. Alésienne EA 95.10 42.24 95.10 42.24 Voyages Dourlens EA 100.00 44.41 100.00 44.41 Sté Tpts Agglom. Chartraine EA 100.00 44.41 100.00 44.41 Voyages Monnet EA 100.00 44.32 100.00 44.32 Sté Tpts Agglom. Montargis EA 100.00 44.41 100.00 44.41 VS Voyages EA 100.00 44.31 100.00 44.31 Sté Tpts Agglom. Roannaise EA 100.00 44.41 100.00 44.41 Zwei Brücken EA 50.00 22.21 50.00 22.21 Sté Tpts Commun Nîmois EA 99.80 44.33 99.80 44.33 Zwickau EA 50.00 22.21 50.00 22.21 Sté Tpts de Givors GIBUS EA 100.00 44.41 100.00 44.41 Sté Tpts du Sud-Ouest Auch EA 100.00 44.41 100.00 44.41 LONG-DISTANCE PASSENGERS, FRANCE & EUROPE Sté Tpts Région Abbeville EA 99.02 43.98 99.02 43.98 Ste Tpts Région Dijonnaise EA 99.67 44.27 99.67 44.27 A2C FC 100.00 99.89 100.00 99.80 CGR Sté Tpts Robert EA 99.88 44.36 99.88 44.36 Artesia SAS PC 50.00 49.90 50.00 49.90 Sté Tpts Urb. Cahors EA 100.00 44.41 100.00 44.41 Brit Cities (ex-Britrail Limited) FC 100.00 99.80 100.00 99.80 Sté Tpts Urb. des Deux Cantons EA 100.00 44.41 100.00 44.41 CRM SERVICES FC 100.00 99.80 100.00 99.80 Sté Tpts Urbains Lavallois EA 100.00 44.41 100.00 44.41 Elipsos PC 50.00 49.90 50.00 49.90 Sté Tpts Urbains Rennais EA 99.88 44.36 99.88 44.36 Eurostar Group FC 62.00 61.88 62.00 61.88 TAE EA 99.99 45.57 99.99 45.57 French Rail Inc FC 100.00 99.80 100.00 99.80 TICE EA 18.83 8.37 18.83 8.37 French Railways Ltd (FRL) FC 100.00 99.80 100.00 99.80 TPR EA 100.00 45.57 100.00 45.57 French travel service TVB EA 100.00 45.57 100.00 45.57 (ex-French Travel Limited) FC 100.00 99.80 100.00 99.80 TVBS EA 100.00 45.57 100.00 45.57 GEIE Sysrail FC 100.00 99.80 100.00 99.80 Thameslink EA 35.00 15.54 35.00 15.54 GLe-commerce FC 100.00 99.80 100.00 99.80 Tpts Urbains du Blaisois EA 100.00 44.41 100.00 44.41 iDTGV FC 100.00 99.80 100.00 99.80 Tpts Commun Métropole Lilloise EA 87.99 39.08 87.99 39.08 Intercapital Régional Rail Ltd EA 35.00 34.93 35.00 34.93 Tpts Commun Montélimar EA 100.00 44.41 100.00 44.41 L’Agence Voyages-sncf.com FC 50.10 50.10 50.10 50.00 CNG Train Bleu de St-Marcellin EA 100.00 45.58 100.00 45.58 Lyria (ex-Rail France Suisse SAS) FC 74.00 73.92 89.00 88.82 Trans Pistes EA 40.00 17.75 40.00 17.75 Parvis FC 100.00 99.89 100.00 99.80 CGR Trans Val de Lys EA 99.95 44.39 99.95 44.39 CNG Rail Europe Benelux FC 100.00 99.80 100.00 99.80 Transaude SA EA 100.00 44.41 100.00 44.41 Rail Europe Deutschland FC 100.00 99.80 100.00 99.80 Transétude EA 100.00 44.41 100.00 44.41 Rail Europe Espagne SRL FC 100.00 99.80 100.00 99.80
EEXE_SNCF_CONSOLIDES#162CCD.inddXE_SNCF_CONSOLIDES#162CCD.indd SSec1:80ec1:80 224/05/064/05/06 10:41:0610:41:06 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 81
M PC PI PC PI CHG M PC PI PC PI CHG year year year year year year year year N N N–1 N–1 N N N–1 N–1
Rail Europe Group Inc FC 100.00 86.95 100.00 86.95 BM Chimie (ex-Innocenti) FC 100.00 43.68 100.00 44.69 Rail Europe Group Ltd FC 100.00 99.80 100.00 99.80 BM Deutschland FC 100.00 43.68 100.00 44.69 Rail Europe Italia FC 100.00 99.80 100.00 99.80 BM Equipt 1 FC 100.00 43.68 100.00 44.69 Rail Europe Limited FC 100.00 99.80 100.00 99.80 BM Equipt 2 FC 100.00 43.68 100.00 44.69 Rail Europe Suisse FC 100.00 99.80 100.00 99.80 BM Equipt 3 FC 100.00 43.68 100.00 44.69 RE 4A PC 50.00 49.90 50.00 49.90 BM Francilienne FC 100.00 43.68 100.00 44.69 Rhealys SA PC 30.00 29.94 30.00 29.94 BM Holding FC 100.00 43.68 100.00 44.69 SAM Paris Nord BM Italia FC 99.75 43.68 99.75 44.58 (Sté d’Aménagement BM Luxembourg FC 100.00 43.68 ECR de la Mezzanine) FC 60.00 59.94 60.00 59.88 CGR BM Ouest FC 100.00 43.68 100.00 44.69 Thalys International FC 70.00 69.86 70.00 69.86 BM Picardie FC 100.00 43.67 ECR Transmanche Night Travel Ltd FC 100.00 99.80 100.00 99.80 BM Route FC 100.00 43.68 100.00 44.69 Voyages-sncf.com FC 100.00 99.80 100.00 99.80 Bouches-du-Rhône Express Voyageurs France (13 Express) FC 100.00 43.68 100.00 44.69 Europe Partenaires SA FC 100.00 99.80 100.00 99.80 CNG Bourgey Montreuil Ile-de-France FC 100.00 43.68 100.00 44.69 VSC Technologies FC 100.00 99.89 ECR CAAT FC 100.00 81.77 100.00 81.77 CHCM NC 100.00 100.00 100.00 100.00 RDI FREIGHT CTC FC 53.06 69.28 62.98 69.21 Cadefer EA 20.00 19.96 20.00 19.96 AAT FC 100.00 81.77 100.00 81.77 Calberson FC 100.00 43.68 100.00 44.69 Ain Express (01 Express) FC 69.85 30.71 69.85 31.22 Calberson Alsace FC 100.00 43.68 99.99 44.68 Aisne Express (02 Express) FC 100.00 43.93 100.00 44.65 Calberson Ardennes Akidis FC 100.00 81.77 100.00 81.77 (ex-Puicouyoul Labruyère) FC 99.90 43.64 99.90 44.64 Alpes-Maritimes Express Calberson Armorique FC 100.00 43.68 100.00 44.69 (06 Express) FC 100.00 43.68 100.00 44.69 Calberson Aube (ex-Sodetrans) FC 95.02 41.51 95.02 42.46 Ambrosetti Stracciari FC 100.00 43.68 100.00 44.69 Calberson Autun FC 100.00 43.68 100.00 44.69 Artois Express FC 49.90 21.80 49.90 22.30 Calberson Belgium FC 100.00 43.68 100.00 44.69 Ateliers d’Orval PC 66.34 64.09 66.34 64.09 Calberson Bretagne FC 100.00 43.68 100.00 44.69 Ateliers ferrov. et industriels Calberson Danzas FC 99.94 43.68 99.94 22.30 de Fos (Ferifos) PC 66.34 64.09 66.34 64.09 Calberson Eure-et-Loir FC 99.03 43.26 99.03 44.25 Atlantis Cargo FC 100.00 68.20 100.00 68.20 Calberson Europe Ile-de-France FC 100.00 43.68 100.00 44.69 Audas Distribution FC 99.85 43.62 EEX Calberson Europe Nord FC 99.97 43.68 99.97 44.67 Autoroute Ferroviaire Alpine PC 49.99 49.89 49.99 49.89 Calberson Europe Rhône-Alpes FC 100.00 43.68 100.00 44.69 Aveyron Express FC 100.00 43.68 100.00 44.69 Calberson FM Axis et associés EA 49.00 21.40 49.00 22.04 (Haute-Saône Express 70) FC 100.00 43.68 100.00 44.69 BM Dauphine FC 100.00 43.68 100.00 44.69 Calberson GE FC 99.97 43.68 99.97 46.66 BM Auvergne FC 100.00 43.68 100.00 44.69 Calberson Grèce FC 50.00 21.84 50.00 22.35 BM Normandie FC 100.00 43.68 100.00 44.69 Calberson Ile-de-France FC 100.00 43.68 100.00 44.69 BM Provence FC 100.00 43.68 100.00 44.69 Calberson International FC 100.00 43.68 100.00 44.69 Batrans FC 100.00 81.77 100.00 81.77 Calberson Location FC 100.00 43.68 99.99 44.69 Begey FC 100.00 43.68 100.00 44.69 Calberson Loire FC 100.00 43.68 100.00 44.69 Belgitrans FC 100.00 43.68 100.00 44.69 Calberson Loiret Betourné international FC 100.00 43.68 100.00 44.69 (45 Express, Blois, Orléans) FC 100.00 43.68 100.00 44.69 Beugniet FC 100.00 43.68 100.00 44.69 Calberson Lorraine (54 Express) FC 100.00 43.67 100.00 44.69 Blazy FC 100.00 43.68 100.00 44.69 Calberson Marne-la-Vallée FC 99.99 43.68 99.99 44.69 BM Alsace (ex-Transports Raisch) FC 100.00 43.68 100.00 44.69 CNG Calberson Méditerranée FC 99.99 43.68 99.99 44.69
EEXE_SNCF_CONSOLIDES#162CCD.inddXE_SNCF_CONSOLIDES#162CCD.indd SSec1:81ec1:81 224/05/064/05/06 10:41:0710:41:07 82 SNCF Group — Consolidated Financial Statements 2005
M PC PI PC PI CHG M PC PI PC PI CHG year year year year year year year year N N N–1 N–1 N N N–1 N–1
Calberson Moselle (57 Express) FC 100.00 43.68 100.00 44.69 Créneau SA FC 100.00 43.68 100.00 44.69 Calberson Normandie CWS EA 33.93 33.86 33.93 33.86 (Agences: Rouen, Evreux) FC 100.00 43.68 100.00 44.69 DAT EA 49.99 40.88 49.99 40.88 Calberson Oise FC 100.00 43.68 100.00 44.69 Delisle FC 100.00 43.68 100.00 44.69 Calberson Paris FC 99.99 43.68 99.99 44.68 Desbrugères FC 100.00 99.80 100.00 99.80 Calberson Picardie Distribuzione Internationale (Agences: Amiens, Arras) FC 99.95 43.68 99.95 44.68 Ferrovaria (DIFA) FC 100.00 43.68 100.00 44.69 Calberson Rhône-Alpes FC 100.00 43.68 100.00 44.69 Districhrono (ex-Logistica) FC 100.00 99.80 100.00 99.80 Calberson Romania FC 100.00 42.09 100.00 46.66 Dordogne Express NC 100.00 44.69 100.00 44.69 RCO Calberson Roussillon FC 100.00 43.68 100.00 44.69 Drôme Express FC 99.81 43.68 99.81 44.69 Calberson Seine-St-Denis FC 100.00 43.68 100.00 44.69 Dusolier Calberson FC 99.94 43.94 99.93 44.66 Calberson Sud-Ouest FC 100.00 43.68 100.00 44.69 EDI Fret FC 60.84 60.72 60.84 60.72 Calberson Yvelines FC 100.00 43.68 100.00 44.69 ECORAIL FC 99.99 99.79 99.99 99.79 Calvados Express (14 Express) FC 100.00 44.68 100.00 44.69 Egerland France FC 51.00 49.71 51.00 49.71 Car & Commercial FC 100.00 81.77 100.00 81.77 Ego Boniface FC 99.96 43.67 99.96 44.68 Car & Commercial Deliveries FC 100.00 81.77 100.00 81.77 Energie et traction FC 100.00 98.46 100.00 98.46 Car & Commercial Land FC 100.00 81.77 100.00 81.77 ERMECHEM (ex-Ermefret France) EA 83.19 47.78 83.19 69.44 Cargo Docks FC 100.00 99.80 100.00 99.80 Ermefer Berlin GmbH PC 49.60 49.50 49.60 49.50 CES FC 100.00 43.68 40.00 17.87 CME Ermefer Genève SA PC 49.60 49.50 49.60 49.50 CFDI FC 100.00 99.80 100.00 99.80 Ermefer GmbH (Vienne) PC 49.60 49.50 49.60 49.50 Chalabre Transport Ermefret Belgium PC 66.34 64.02 66.34 64.02 (ex-Elite express) NC 100.00 100.00 100.00 100.00 RDI Ermefret Italia Srl PC 66.34 42.95 66.34 42.95 Challenge Intern. Belgium NV FC 99.95 66.27 99.95 66.27 Ermefret Nederland BV PC 49.60 49.50 49.60 49.50 Challenge Intern. Méditerranée FC 100.00 66.30 100.00 66.30 Ermewa Ferroviaire PC 66.34 64.09 66.34 64.09 Challenge International SA FC 66.44 66.30 66.44 66.30 Ermewa Hambourg GmbH PC 49.60 49.50 49.60 49.50 Chaveneau Bernis FC 99.91 31.59 99.91 32.31 Ermewa Iberica PC 66.34 64.09 66.34 64.09 Chemfreight Tpt Logistik Ermewa Intermodal PC 66.34 64.09 66.34 64.09 & Waggonvermietung GmbH PC 24.80 24.75 24.80 24.75 Ermewa SA PC 66.14 64.15 66.34 64.09 Chenue à la Croix de Lorraine FC 100.00 43.68 EEX Ermewa SA Suisse PC 49.60 49.50 49.60 49.50 Ciat Rossi NC 100.00 43.96 100.00 44.69 RDI Ermewa Sati PC 66.34 64.09 66.34 64.09 Cie Modalhor Express FC 51.00 50.90 51.00 50.90 Euromatic Belgium FC 98.39 42.98 98.39 43.97 Cita GmbH PC 66.34 57.62 66.34 57.62 Eurotainer Asie PC 66.14 64.15 33.17 32.05 Cobatrans FC 96.00 78.49 96.00 78.49 Eurotainer Finances PC 66.14 64.15 33.17 32.05 Cofi ca 1 FC 100.00 43.68 EEX Eurotainer Inc PC 66.14 64.15 33.17 32.05 Cofi ca 2 FC 100.00 43.68 EEX Eurotainer SAS PC 66.14 64.15 33.17 32.05 Cofi ca 3 FC 100.00 43.68 EEX EVS PC 66.34 33.03 66.34 33.03 Cofi ca 4 FC 100.00 43.68 EEX Express Seine-et-Marne Cofi ca 5 FC 100.00 43.68 EEX (77 Express) FC 100.00 43.68 100.00 44.69 Cofi tal FC 100.00 81.77 100.00 81.77 Féron de Clebsattel FC 100.00 99.10 100.00 99.10 Cogewip FC 100.00 80.51 100.00 80.51 Fertis FC 100.00 99.47 100.00 99.47 Cogip EA 34.00 14.85 34.00 15.19 Financière Ermewa PC 49.60 49.50 49.60 49.50 Compagnie Catalane Flandre Express (59 Express) FC 74.88 32.71 74.88 33.46 de Logistique (CICAL) EA 33.15 32.04 33.15 32.04 Foissin FC 100.00 43.68 100.00 44.69 Compagnie des Containers Fondimare FC 100.00 66.37 ECR Réservoirs (CCR) PC 66.34 64.08 66.34 64.08 Fortec Distribution network Ltd FC 100.00 43.68 100.00 44.69 Coquelle Gourdin FC 98.33 97.44 98.33 97.44 France wagons FC 100.00 99.80 100.00 99.80
EEXE_SNCF_CONSOLIDES#162CCD.inddXE_SNCF_CONSOLIDES#162CCD.indd SSec1:82ec1:82 224/05/064/05/06 10:41:0810:41:08 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 83
M PC PI PC PI CHG M PC PI PC PI CHG year year year year year year year year N N N–1 N–1 N N N–1 N–1
France-Location Distribution FC 100.00 43.68 100.00 44.69 Geodis Overseas Côte d’Ivoire FC 100.00 43.68 100.00 44.69 Freight Europe UK FC 100.00 99.80 100.00 99.80 Geodis Overseas France SA FC 99.98 43.67 99.98 44.68 FRET INTERNATIONAL FC 100.00 99.80 100.00 99.80 Geodis Overseas Guadeloupe FC 99.92 43.61 99.92 44.64 FROIDCOMBI FC 48.93 48.83 48.93 48.83 Geodis Overseas India FC 100.00 43.68 99.99 44.69 Gard Express (30 Express) FC 100.00 44.68 100.00 44.69 Geodis Overseas Ltd GARMATEX FC 78.42 78.26 78.42 78.26 (Hong Kong + Chine) FC 99.89 43.66 99.89 44.67 GEMAFER FC 100.00 99.47 100.00 99.47 Geodis Overseas Ltd Taïwan FC 100.00 43.68 100.00 44.69 Geodis Overseas Polynésie FC 93.83 40.98 93.83 41.92 Geodis Overseas Ltd Thaïland FC 100.00 43.68 100.00 44.69 Geodis Afrique FC 100.00 43.68 100.00 44.69 Geodis Overseas Malaysia FC 100.00 43.68 100.00 44.69 Geodis Benelux FC 100.00 43.68 100.00 44.69 Geodis Overseas Maroc FC 100.00 43.67 100.00 44.67 Geodis BM Rakotrans FC 52.00 22.72 52.00 23.23 Geodis Overseas Martinique FC 99.87 43.61 99.87 44.62 Geodis BM Réseau FC 100.00 43.68 100.00 44.69 Geodis Overseas Mexico FC 100.00 43.68 100.00 44.69 Geodis Calberson Lipetsk FC 100.00 42.09 ECR Geodis Overseas PT Indonesia FC 90.00 39.32 90.00 40.22 Geodis Chine FC 100.00 43.66 100.00 44.67 Geodis Overseas PTE (Singapore) FC 100.00 43.68 100.00 44.69 Geodis Deutschland FC 100.00 43.68 100.00 44.69 Geodis Overseas Réunion FC 89.95 39.28 89.95 40.19 Geodis Groupage Services FC 100.00 43.68 100.00 44.69 Geodis Overseas Sénégal FC 100.00 43.68 100.00 44.69 Geodis Hungaria FC 100.00 42.09 ECR Geodis Overseas Services-GOS FC 100.00 43.68 100.00 44.69 Geodis Ile-de-France Service FC 99.99 43.96 99.74 44.57 Geodis Overseas Shanghaï E & T FC 74.89 32.91 49.78 22.24 Geodis International Geodis Overseas (ex-Geodis Asie) FC 100.00 43.68 100.00 44.69 Transport Thaïland FC 100.00 43.68 100.00 44.69 Geodis Interservices FC 100.00 43.68 100.00 44.69 Geodis Overseas Tunisie FC 50.00 21.84 ECR Geodis Italie FC 100.00 43.97 99.00 44.24 Geodis Réseaux FC 100.00 43.68 100.00 44.69 Geodis Logistics FC 99.45 43.68 99.45 44.69 Geodis SA FC 45.07 43.68 45.07 44.69 Geodis Logistics Center CV FC 98.53 43.04 98.53 44.03 Geodis Solutions FC 100.00 43.68 100.00 44.69 Geodis Logistics Euromatic FC 100.00 43.68 100.00 44.69 Geodis Tchad FC 100.00 43.68 100.00 44.69 Geodis Logistics Europarts FC 100.00 43.68 100.00 44.69 Geodis UK FC 100.00 43.68 100.00 44.69 Geodis Logistics France FC 100.00 43.68 100.00 44.69 Geodis UK Ltd Geodis Logistics France (ex-CAVEWOOD Transports Ltd) FC 100.00 43.68 100.00 44.69 Champagne-Ardennes FC 99.99 43.68 99.99 44.68 Geodis Vitesse Distribution BV NC 100.00 44.69 100.00 44.69 RME Geodis Logistics France Nord FC 100.00 43.68 100.00 44.68 Geodis Vitesse Overseas BV NC 100.00 44.69 100.00 44.69 RME Geodis Logistics France Ouest FC 99.99 43.68 99.99 44.69 Géosiap Cameroun FC 100.00 43.68 100.00 44.69 Geodis Logistics France Rhône-Alpes FC 100.00 43.68 100.00 44.69 GIE Financière Geodis FC 100.00 43.68 100.00 44.69 Geodis Logistics France Sud FC 100.00 43.68 100.00 44.69 GIE France Express FC 67.01 29.78 ECO Geodis Logistics France Sud-Ouest FC 99.99 43.68 99.99 44.68 Gironde Express (33 Express) FC 100.00 43.68 100.00 44.69 Geodis Logistics Gestion Immobilière FC 100.00 43.68 100.00 44.44 Groupe Ermewa SA PC 49.60 49.50 49.60 49.50 Geodis Logistics Ireland FC 100.00 43.68 100.00 44.69 Haute-Provence Express FC 100.00 43.68 100.00 44.69 Geodis Logistics Maroc FC 99.90 43.63 ECR Helf FC 100.00 31.37 100.00 31.37 Geodis Logistics Mexico FC 99.99 43.68 99.99 44.68 Helu Trans Malaysia FC 100.00 43.68 100.00 44.69 Geodis Logistics Nord-Ouest FC 100.00 43.68 100.00 44.69 Hérault Express (34 Express) FC 100.00 43.68 100.00 44.69 Geodis Logistics Polska FC 100.00 43.68 100.00 44.69 Ibercondor FC 100.00 43.44 ECR Geodis Logistics Taïwan FC 100.00 43.68 100.00 44.69 Immobilière Geodis I (ex-BMZ) FC 100.00 43.68 ECR Geodis Logistics Vitesse holding NC 100.00 44.69 100.00 44.69 RME Immobilière Geodis II Geodis Logistique Méditerranée FC 100.00 43.68 100.00 44.69 (ex-Geodis Beta) FC 100.00 43.68 ECR Geodis Magyarorszag Logisztik FC 100.00 43.68 100.00 44.69 Inst. de Formation Geodis Oil and Gaz FC 100.00 43.68 ECR Eur. Multimodal FC 91.50 91.02 91.50 91.02 Geodis Overseas Cameroun FC 90.18 39.39 90.18 40.30 Le Bois Chaland FC 100.00 43.68 100.00 44.69 (ex-Socamac)
EEXE_SNCF_CONSOLIDES#162CCD.inddXE_SNCF_CONSOLIDES#162CCD.indd SSec1:83ec1:83 224/05/064/05/06 10:41:0910:41:09 84 SNCF Group — Consolidated Financial Statements 2005
M PC PI PC PI CHG M PC PI PC PI CHG year year year year year year year year N N N–1 N–1 N N N–1 N–1
LOCOREM FC 100.00 99.80 100.00 99.80 SCI Alsace FC 100.00 43.68 100.00 44.69 Logistica PC 49.99 49.89 49.99 49.89 SCI BM Chelles FC 100.00 43.68 100.00 44.69 LOGISTRA FC 99.80 99.60 99.80 99.60 SCI BM Craywick FC 100.00 43.68 80.00 35.75 LSI PC 50.00 49.90 50.00 49.90 SCI BM Le Fontanil FC 100.00 43.68 80.00 35.75 MN Walbaum FC 99.75 43.57 99.75 44.57 SCI Borny FC 100.00 43.68 80.00 35.75 MEI (Mancelle d’Emballages) FC 99.40 43.68 99.40 44.39 SCI Cel FC 100.00 43.68 100.00 44.69 M.G. Transports FC 99.90 43.64 99.50 44.69 SCI Champagne-Ardennes FC 100.00 43.68 100.00 44.69 Marne Express SCI Charlotte FC 100.00 43.68 100.00 44.69 (51 Express, 55 Express) FC 100.00 43.57 100.00 44.57 SCI Charval FC 99.50 43.47 99.50 44.46 MG Services FC 100.00 43.96 EEX SCI Danjouti FC 100.00 43.68 80.00 35.75 MGL FC 100.00 43.64 100.00 44.65 SCI de la Brèche FC 100.00 43.68 100.00 44.69 Mostva EA 50.00 40.89 50.00 40.89 SCI de la Poudrière FC 100.00 43.63 80.00 35.75 MPL FC 100.00 43.68 99.99 44.69 SCI de Vaux FC 100.00 43.68 100.00 44.69 NAVILAND Cargo (ex-CNC) FC 93.81 94.27 93.81 94.18 CNG SCI du Rouvray FC 100.00 43.68 100.00 44.69 Normanche FC 100.00 81.77 100.00 81.77 SCI du Serp NC 100.00 43.96 100.00 44.69 RDI NOVATRANS EA 38.63 38.17 38.63 38.17 SCI Etupes FC 99.90 43.64 99.90 44.64 Ortrans FC 100.00 81.77 100.00 81.77 SCI Eurofl ory FC 100.00 43.68 80.00 35.75 Pan European Transport Ltd FC 100.00 43.68 100.00 44.69 SCI Ferrus Immo FC 100.00 81.77 100.00 81.77 Pan European Transport UK FC 100.00 43.68 ECR SCI Gilly FC 82.50 36.04 82.50 36.87 Paris 8 FC 100.00 43.68 100.00 44.69 SCI Horizons FC 100.00 43.68 100.00 44.69 Picardie Express SCI Ile-de-France FC 100.00 43.68 100.00 44.69 (Somme Express 80) FC 49.70 21.85 49.70 22.22 SCI Immolog FC 100.00 43.68 100.00 44.69 PLC FC 100.00 43.68 100.00 44.69 SCI JCC FC 100.00 43.68 80.00 35.75 Provence Express FC 100.00 43.68 100.00 44.69 SCI Le Polygone FC 100.00 43.68 100.00 44.69 Puy de Dôme Express SCI Le Revard FC 100.00 29.14 ECR (63 Express) FC 100.00 43.68 100.00 29.76 SCI Mery FC 80.00 43.68 80.00 35.75 RDC S.p.a. FC 50.00 22.50 50.00 22.50 SCI Norferrus FC 100.00 81.77 100.00 81.77 Rail Euro Concept EA 50.00 49.90 50.00 49.90 SCI Normandie FC 100.00 43.68 100.00 44.69 Ramscroft Ltd FC 100.00 43.68 100.00 44.69 SCI Ouest FC 100.00 43.68 100.00 44.69 Rhône Dauphiné Express SCI Portes-Les-Valences FC 100.00 43.68 100.00 44.69 (Rhône Express 69) FC 99.58 43.68 99.58 44.69 SCI Prosolder FC 99.87 43.90 99.87 44.63 RIVERAIN FC 100.00 99.55 100.00 99.55 SCI Région Bretagne FC 100.00 43.68 100.00 44.69 ROUCH INTERMODAL FC 98.96 98.76 98.96 98.76 SCI Rhône Ferrus FC 100.00 81.77 100.00 81.77 Rouen domicile NC 99.91 99.91 99.91 99.91 RDI SCI Royneau-Le-Coudray FC 98.39 42.56 98.39 43.53 Rouleurs du Cambresis FC 99.93 43.68 99.93 44.69 SCI Salaise NC 100.00 43.68 80.00 35.75 RDI SCTB NC 99.00 29.98 99.00 29.98 RME SCI Sopyrim FC 100.00 81.77 100.00 81.77 SMC FC 100.00 43.68 100.00 44.69 SCI Sud-Est FC 100.00 43.68 100.00 44.69 SMTR FC 99.98 43.68 99.98 44.69 SCI Sud-Ouest FC 100.00 43.68 100.00 44.69 SNTC FC 100.00 81.77 100.00 81.77 SCI SVIG FC 99.97 43.67 99.97 44.67 SNTN Calberson FC 99.93 43.68 99.93 44.68 SCI Val-Ferrus FC 80.00 65.41 80.00 65.41 STSI FC 99.44 99.24 99.44 99.24 SCI Voujeaucourt FC 100.00 43.68 80.00 35.75 STVA FC 82.22 81.84 82.22 81.77 SD Calberson FC 99.97 43.67 99.97 44.67 STVA UK FC 100.00 81.77 100.00 81.77 Sealogis FC 100.00 99.80 100.00 99.80 SARI FC 53.06 56.77 53.06 56.77 SEFERGIE FC 100.00 98.76 100.00 98.76 Savin FC 99.92 43.66 99.92 44.69 SEGI FC 98.31 98.76 98.31 98.76 Sceta Transport FC 100.00 43.68 100.00 44.69 Seine Express Transport FC 100.00 43.68 100.00 44.69
EEXE_SNCF_CONSOLIDES#162CCD.inddXE_SNCF_CONSOLIDES#162CCD.indd SSec1:84ec1:84 224/05/064/05/06 10:41:1010:41:10 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 85
M PC PI PC PI CHG M PC PI PC PI CHG year year year year year year year year N N N–1 N–1 N N N–1 N–1
Seine-Maritime Express Sté Marseillaise de Camionnage (76 Express) FC 100.00 43.68 100.00 44.69 et de Messagerie NC 97.12 97.12 97.12 97.12 RLI SEP TRANSPUL PC 66.14 64.09 66.14 64.09 STESIMAF FC 80.00 86.61 80.00 86.61 SEP UNION WAGON PC 66.14 64.09 66.14 64.09 STRACCIARI FC 100.00 43.96 100.00 44.69 SERMA FC 100.00 99.80 100.00 99.80 TCL Cameroun FC 100.00 43.67 100.00 44.68 SERNAM Route TCL Houston FC 88.63 38.70 88.63 39.59 (ex-SERNAM Transport SA) NC 100.00 100.00 100.00 100.00 RDI TCL Tchad FC 100.00 43.67 100.00 44.68 SERNAM SA NC 100.00 100.00 100.00 100.00 RDI TEISA FC 99.44 43.44 99.44 44.44 SERNAM Transport Ile-de-France NC 99.76 99.76 99.76 99.76 RDI Telf Lamaysouette FC 100.00 43.68 100.00 44.69 Set CARGO International NC 48.50 16.55 48.50 16.83 RDI Téthys FC 100.00 81.77 100.00 81.77 Setcargo FC 100.00 43.68 100.00 44.69 Thales Geodis Freight Logistics PC 50.00 21.84 50.00 22.35 Seti FC 49.89 43.68 49.89 22.21 TRANSFESA (Groupe) EA 20.20 16.52 20.20 16.52 Setrada FC 100.00 81.77 100.00 81.77 Transinformatique FC 100.00 71.64 100.00 71.64 Setram EA 25.00 20.44 25.00 20.44 Transnord FC 100.00 43.68 100.00 44.69 SEVIAK NC 100.00 44.69 100.00 44.69 RME Transport Bernis FC 67.66 29.56 67.64 30.23 SFC FC 99.98 99.07 99.98 99.07 Transport Huet FC 100.00 43.67 100.00 44.67 SGTBA (Sté Gestion Terminal Transports Petitbon NC 100.00 44.69 100.00 44.69 RME Bourgneuf d’Aiton) FC 65.00 33.08 65.00 33.08 Transports Terrestres SGW FC 65.93 67.37 65.93 67.37 Maritimes et Fluviaux PC 66.34 64.09 66.34 64.09 Sideuropa EA 50.00 49.90 50.00 49.90 Transportvoiture Belgique FC 99.96 81.73 99.96 81.73 SLV FC 100.00 43.68 100.00 44.69 TRANSUCRE PC 66.34 38.45 66.34 38.45 SNC Bercy FC 100.00 71.23 100.00 71.70 Trappes Distribution NC 100.00 100.00 100.00 100.00 RDI SNC Sernam Centre NC 100.00 100.00 100.00 100.00 RDI Trate Sud Srl FC 100.00 43.68 100.00 44.69 SNC Sernam Est NC 100.00 100.00 100.00 100.00 RDI Union & Gest. de Moyens SNC Sernam Île-de-France NC 100.00 100.00 100.00 100.00 RDI de Tpts ferrov. (Unifer) PC 66.34 61.55 66.34 61.55 SNC Sernam LDI NC 100.00 100.00 100.00 100.00 RDI Uniroute FC 100.00 81.76 100.00 81.76 SNC Sernam Nord NC 100.00 100.00 100.00 100.00 RDI United Distribution Group plc FC 100.00 43.68 100.00 44.69 SNC Sernam Ouest NC 100.00 100.00 100.00 100.00 RDI United Distribution SNC Sernam Services NC 100.00 100.00 100.00 100.00 RDI International Ltd FC 100.00 43.68 100.00 44.69 SNC Sernam Sud-Est NC 100.00 100.00 100.00 100.00 RDI United Distribution Ltd FC 100.00 43.68 100.00 44.69 SNC Sernam Sud-Ouest NC 100.00 100.00 100.00 100.00 RDI Valenciennes Express SNCF Fret Benelux FC 100.00 99.80 100.00 99.80 (Nord Express 59) FC 100.00 43.68 100.00 44.69 SNCF Fret Deutschland FC 100.00 99.80 100.00 99.80 Valenda FC 100.00 43.68 100.00 44.69 SNCF Fret Italia Srl FC 100.00 99.80 100.00 99.80 Valtrans FC 80.00 65.41 80.00 65.41 SNTD Noyon EA 35.59 15.55 35.59 15.91 Van der Laan FC 100.00 43.68 100.00 44.69 Société des entrepôts Var Express (83 Express) FC 100.00 43.68 100.00 44.69 Paris-Sud (SEPS) FC 100.00 43.68 100.00 44.69 Vellave de Transport FC 98.04 42.83 98.04 43.81 Sogewag FC 100.00 79.18 100.00 79.18 VEVA EA 50.00 40.93 ECR Somap FC 81.67 80.93 81.67 80.93 VFLI FC 100.00 99.80 100.00 99.80 Somedat FC 100.00 81.77 100.00 81.77 VFLI CARGO FC 100.00 99.80 100.00 99.80 Soptrans FC 100.00 81.77 100.00 81.77 VFLI Romania FC 100.00 99.47 100.00 99.47 Sotraf FC 100.00 81.77 100.00 81.77 Vienne Express (86 Express) NC 100.00 32.31 100.00 32.31 RME Sotrago FC 100.00 43.68 100.00 44.69 Vitesse Logistics BV FC 100.00 43.68 100.00 44.69 Sotrameuse FC 100.00 43.68 100.00 44.69 Vitesse Onroerend Goed BV FC 100.00 43.68 100.00 44.69 Soyer Devaux FC 100.00 66.30 100.00 66.30 Vitesse Pharmaceuticals SPW Modalhor FC 100.00 99.80 100.00 99.80 distribution BV FC 100.00 43.68 100.00 44.69
EEXE_SNCF_CONSOLIDES#162CCD.inddXE_SNCF_CONSOLIDES#162CCD.indd SSec1:85ec1:85 224/05/064/05/06 10:41:1110:41:11 86 SNCF Group — Consolidated Financial Statements 2005
M PC PI PC PI CHG M PC PI PC PI CHG year year year year year year year year N N N–1 N–1 N N N–1 N–1
Vitesse Transport BV FC 100.00 43.68 100.00 44.69 SNCF International FC 100.00 99.89 100.00 99.80 Vitesse Warehousing Sofrecad PC 17.93 17.91 EEX and distribution BV NC 100.00 44.69 100.00 44.69 RME SOGET PC 35.87 35.83 100.00 35.10 CME Vitesse Warehousing SOTEC Ingénierie PC 23.31 23.29 65.00 22.82 CME and distribution Venlo BV NC 100.00 44.69 100.00 44.69 RME Systra (Groupe) NC 35.87 35.80 35.87 35.80 RCO Voies Ferrées du Morvan FC 65.00 64.87 65.00 64.87 Systra (Shanghai) Waren Brokers FC 100.00 43.68 100.00 44.69 Consulting Co Ltd PC 35.87 35.83 EEX Waren Shipping FC 100.00 43.68 100.00 44.69 Systra Asia Pacifi c PC 32.28 32.25 EEX Werner Egerland EA 20.00 16.36 20.00 16.36 Systra Consulting PC 35.87 35.83 50.00 33.04 CME XP LOG FC 99.82 66.19 99.82 66.19 Systra Inc PC 35.87 35.83 EEX ZA Far (SEA) pte Ltd Singapore FC 100.00 43.68 100.00 44.69 Systra Ingeneria SL PC 34.07 34.04 EEX Zûst Ambrosetti Korea (Séoul) FC 100.00 43.68 100.00 44.69 Systra Ltd PC 35.87 35.83 50.00 35.80 CME Zûst Ambrosetti Spa FC 100.00 43.68 100.00 44.69 Systra Maroc PC 35.87 35.83 ECR Systra Philippines PC 23.65 23.62 50.00 14.29 CME INFRASTRUCTURE Systra SA (ex-3S) PC 35.87 35.83 100.00 35.09 CME Systra Singapore Pte Ltd PC 35.87 35.83 EEX AREP FC 99.99 99.79 99.99 99.79 Systra Sotecni Spa PC 35.87 35.83 50.00 35.80 CME Canarail consultants Canada Inc PC 35.87 28.45 66.66 23.40 CME SYSTRA Spa (ex-Situs) EA 100.00 35.10 100.00 35.10 Canarail consultants Int. Inc EA 39.92 14.02 39.92 14.02 SYSTRA USA Inc EA 92.28 32.90 92.28 32.90 Citilabs Inc PC 19.90 19.88 49.48 17.71 CME TIFSA EA 24.50 8.60 24.50 8.60 Citilabs Ltd PC 19.90 19.88 49.48 17.71 CME Transport Public Participations EA 50.00 35.80 50.00 35.80 Financière Systra PC 50.00 49.90 50.00 49.90 Foncière du Coq PC 35.87 35.83 50.00 35.80 CME COMMON OPERATIONS AND INVESTMENTS Gestion Canarail PC 28.48 28.45 50.00 20.36 CME Kuo Tung PC 35.87 35.83 50.00 35.79 CME Cegetel SAS NC 35.00 35.00 35.00 35.00 RDI LS Transit Systems Inc EA 100.00 35.10 100.00 35.10 Ceretif FC 100.00 69.07 100.00 69.07 Maintes International EA 50.00 35.80 50.00 35.80 EFA – Espaces Ferroviaires Mexistra PC 35.87 35.83 EEX Aménagement FC 99.93 99.88 99.93 99.73 MVA Asia PC 35.87 35.83 100.00 35.10 CME EFT – Espaces Ferroviaires MVA Beijing EA 17.93 17.91 50.00 17.90 Transactions FC 99.80 99.60 99.80 99.60 MVA Beijing EA 17.93 17.91 ECR Energie Lagarde EA 20.00 20.00 100.00 99.62 CME MVA Consultancy EA 100.00 35.10 100.00 35.10 Energie Sud-Ouest EA 20.00 20.00 100.00 99.62 CME MVA Consultancy Paris EA 50.00 35.80 50.00 35.80 Espaces Ferroviaires MVA Consulting Group PC 35.87 35.83 100.00 35.10 CME Résidences du Rail (EF2R) FC 100.00 99.89 EEX MVA France EA 100.00 35.10 100.00 35.10 EUROFIMA EA 23.70 23.70 23.70 23.70 MVA Hong Kong Ltd PC 35.87 35.83 50.00 35.80 CME Forces Motrices MVA Ltd PC 35.87 35.83 50.00 35.80 CME du Valentin (FMV) EA 20.00 20.00 100.00 99.62 CME MVA Malaisie PC 35.87 35.83 EEX France Rail Publicité (FRP) EA 20.00 20.00 20.00 20.00 MVA Malaysia EA 50.00 17.55 50.00 17.55 France-Bus Publicité EA 15.20 15.20 15.20 15.20 MVA Philippines EA 14.33 14.31 39.95 14.30 GIE Financière SCETA FC 100.00 94.40 100.00 76.30 MVA Shenzen PC 35.87 35.83 EEX GIE Eurail Test FC 90.00 90.00 90.00 90.00 MVA Singapour PC 35.87 35.83 50.00 35.80 CME Immobilière des Chemins MVA Systematica EA 100.00 35.10 100.00 35.10 de fer français (SICF) FC 100.00 100.00 ECO MVA Thailande PC 35.86 35.82 50.00 35.79 CME LANDIMAT EA 20.00 20.00 20.00 20.00 Rail Transportation ORFEA PC 50.00 49.90 50.00 49.90 Systems Inc (RTS) EA 89.00 32.39 89.00 32.39 Publibus EA 100.00 20.00 100.00 20.00
EEXE_SNCF_CONSOLIDES#162CCD.inddXE_SNCF_CONSOLIDES#162CCD.indd SSec1:86ec1:86 224/05/064/05/06 10:41:1210:41:12 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 87
M PC PI PC PI CHG year year year year N N N–1 N–1
SPFRD FC 100.00 99.80 100.00 99.80 SCETA SERVICES FC 100.00 99.80 100.00 99.80 SCI du Cercle FC 100.00 99.80 100.00 99.80 SCI La Chapelle FC 100.00 99.80 100.00 99.80 SCI NEY FC 100.00 99.79 100.00 99.79 Seafrance FC 100.00 99.89 100.00 100.00 CGR SEMAPA EA 20.00 20.00 20.00 20.00 SNC MONCEAU FC 100.00 99.79 100.00 99.79 SNC VEZELAY FC 100.00 99.80 100.00 99.80 SNCF PARTICIPATIONS FC 100.00 99.89 100.00 99.80 SNEF FC 100.00 99.80 100.00 99.80 Sté Française de Construction Immoblière FC 100.00 100.00 100.00 100.00 Sté Hydro-Electrique du Midi (SHEM) EA 20.00 19.98 99.62 99.62 CME
EEXE_SNCF_CONSOLIDES#162CCD.inddXE_SNCF_CONSOLIDES#162CCD.indd SSec1:87ec1:87 224/05/064/05/06 10:41:1310:41:13 88 SNCF Group — Company Financial Statements 2005
Statutory Auditors’ Report on the Consolidated Financial Statements Year ended 31 December 2005
This is a free translation into English of the statutory auditors’ reports issued in the French language and is provided solely for the convenience of English speaking readers. The statutory auditors’ report includes for the information of the reader, as required under French law in any auditors’ report, whether qualifi ed or not, explanatory paragraphs separate from and presented below the audit opinion discussing the auditors’ assessments of certain signifi cant accounting and auditing matters. These assessments were considered for the purpose of issuing an audit opinion on the consolidated fi nancial statements taken as a whole and not to provide separate assurance on individual account captions or on information taken outside of the fi nancial statements. Such report, together with the statutory auditors’ report addressing fi nancial reporting in management’s report on internal control, should be read in conjunction and construed in accordance with French law and French auditing professional standards.
In accordance with our appointment as auditors, we hereby 2. Justifi cation of our assessments report to you for the year ended 31 December 2005 on the audit of the accompanying consolidated fi nancial statements of SNCF, Pursuant to the provisions of Article L.823-9 of the French a public establishment of an industrial and commercial nature. Commercial Code governing the justifi cation of our assessments, These consolidated fi nancial statements have been approved we draw your attention to the following matters: by the Board of Directors. Our role is to express an opinion on • As part of our assessments of the accounting policies and mate- these fi nancial statements, based on our audit. rial estimates, we satisfi ed ourselves as to the correct application of changes in accounting method, the disclosure thereof in Notes 2 and 3 to the consolidated fi nancial statements and the reasona- 1. Opinion on the consolidated fi nancial bleness of the assumptions adopted for the valuation of assets. statements • Notes 3 and 31 to the consolidated fi nancial statements set out the principles for treating off-balance-sheet the fi nancial debt Except as discussed in the following paragraph, we conducted transferred to the special debt account, the accounting treatment our audit in accordance with professional standards applicable of the employee-related benefi ts service account and the main in France. Those standards require that we plan and perform the fi gures related thereto. audit to obtain reasonable assurance about whether the consoli- In connection with our assessment of the overall presentation of dated fi nancial statements are free of material misstatement. An accounts, we satisfi ed ourselves as to the appropriateness of the audit includes examining, on a test basis, evidence supporting the related information concerning these two issues. amounts and disclosures in the consolidated fi nancial statements. • Pension and medical care benefi t commitments are not accrued An audit also includes assessing the accounting principles used and pursuant to the option offered under French GAAP. signifi cant estimates made by management, as well as evaluating As part of our assessment of the signifi cant estimates used for the the overall presentation of the consolidated fi nancial statements. We year-end closing of the accounts, we examined the basis and methods believe that our audit provides a reasonable basis for our opinion. used for the actuarial calculation and the information disclosed by As was the case for the year ended 31 December 2004, there are the Company in Note 16 to the consolidated fi nancial statements differences of opinion between Réseau Ferré de France (RFF) and describing the specifi cities of the SNCF regimes. SNCF as to the transmission of certain fi xed assets and the terms These assessments were performed as part of our audit approach and conditions of transfer that could result from future arbitration of for the consolidated fi nancial statements taken as a whole and this matter (see Note 6 to the consolidated fi nancial statements). contributed to the expression of the qualifi ed opinion in the fi rst We are unable to assess the consequences of this situation on the part of this report. fi nancial statements for the year ended 31 December 2005. In our opinion, except for the matter described above, the fi nan- cial statements give a true and fair view of the fi nancial position and 3. Specifi c procedure the assets and liabilities of the Group as at 31 December 2005 and the results of its operations for the year then ended in accordance In accordance with professional standards applicable in France, with accounting principles generally accepted in France. we have also verifi ed the information given in the group manage- Without further qualifying our opinion, we draw your attention to ment report. the matters set out respectively in Notes 2 and 3 to the consolidated Except for the effect, if any, of the matters described above, fi nancial statements: we have no other matters to report with respect to the fairness of • Changes in accounting method arising from the fi rst-time applica- this information and its consistency with the consolidated fi nancial tion of CRC Regulations 2002-10 and 2004-6 relating to assets as at statements. 1 January 2005; • Recording of a capital contribution with respect to funds paid by Paris-La Défense, 14 April 2006 the State as part of the Freight Plan in accordance with the State and European Community ruling. The Statutory Auditors
ERNST & YOUNG Audit MAZARS & GUÉRARD Francis Gidoin Marie-Laure Philippart Christine Vitrac Gilles Rainaut
EEXE_SNCF_SOCIAUX_05_FP_EN.inddXE_SNCF_SOCIAUX_05_FP_EN.indd 8888 224/05/064/05/06 10:30:0110:30:01 COMPANY FINANCIAL STATEMENTS 89
COMPANY FINANCIAL STATEMENTS All amounts are in millions of euros (€ millions), unless stated otherwise.
BALANCE SHEET 90
INCOME STATEMENT 92
STATEMENT OF CASH FLOWS 93
The key explanations concerning the company fi nancial statements of the State-owned institution SNCF are presented in the consolidated fi nancial statements. As such, only the summary fi nancial statements of SNCF are presented below. The full company fi nancial statements are available from SNCF (Direction du contrôle de gestion), 34 rue du commandant Mouchotte – 75014 Paris.
EEXE_SNCF_SOCIAUX_05_FP_EN.inddXE_SNCF_SOCIAUX_05_FP_EN.indd 8899 224/05/064/05/06 10:30:0310:30:03 90 SNCF Group — Company Financial Statements 2005 BALANCE SHEET AS AT 31 DECEMBER 2005
Assets
in € millions 31/12/2005 31/12/2004
Intangible assets 115 56 Tangible assets 14,835 13,678 Réseau Ferré de France (RFF) receivable 6,810 8,436 Other long-term investments 6,193 5,649 Total non-current assets 27,953 27,820
Inventory and work-in-progress 429 474 Operating receivables 6,333 6,326 Special debt account – assets 263 131 Employee-related benefi ts service account – assets 1,525 1,437 Marketable securities 1,815 1,215 Cash and cash equivalents 64 52 Total current assets 10,429 9,636
Prepayments and deferred charges 128 67 Bond redemption premiums 10 14 Unrealised foreign exchange losses 73 106
Total assets 38,593 37,644
EEXE_SNCF_SOCIAUX_05_FP_EN.inddXE_SNCF_SOCIAUX_05_FP_EN.indd 9900 224/05/064/05/06 10:30:0310:30:03 BALANCE SHEET AS AT 31 DECEMBER 2005 91
Liabilities and Shareholders’ Equity
in € millions 31/12/2005 31/12/2004
Share capital 4,521 4,271 Revaluation reserve 70 70 Accumulated defi cit –966 –1,476 Net income for the period 1,334 490 Net equity 4,959 3,354
Investment subsidies 3,586 3,002 Regulated provisions 44 58 Total shareholders’ equity 8,589 6,414
Provisions for contingencies and losses 2,853 2,985 Loans and borrowings 15,175 16,654 Operating liabilities 8,515 8,152 Special debt account – liabilities 248 135 Employee-related benefi ts service account – liabilities 540 457
Accruals and deferred income 2,463 2,343 Unrealised foreign exchange gains 210 504
Total liabilities and shareholders’ equity 38,593 37,644
EEXE_SNCF_SOCIAUX_05_FP_EN.inddXE_SNCF_SOCIAUX_05_FP_EN.indd 9911 224/05/064/05/06 10:30:0310:30:03 92 SNCF Group — Company Financial Statements 2005 INCOME STATEMENT
Presentation of Results
The income statement presentation was modifi ed consistent by nature. The 2004 results have been presented as at 1 January 2005, in order to improve the analysis of under this new format so as to provide a relevant compa- company results. Certain income and expense accounts rison with 2005 results. were reclassifi ed in aggregates that were economically
in € millions 2005 2004 2004 PUBLISHED
Revenues 16,009 15,500 15,526 Capitalised production and production for stock 1,162 758 758 Purchases and external charges –7,221 –6,762 –6,793
Added value 9,951 9,496 9,491 Other operating income 60 62 28 Taxes and duties other than income tax –698 –616 –616 Personnel expenses –7,895 –7,787 –7,756
Gross operating income 1,418 1,155 1,147 Depreciation, amortisation and provisions, net –753 –757 –757 Other management expenses –26 –21 –13
Net operating income 640 377 377
Net fi nancial expense (1) –188 –49 –49
Net income from ordinary activities (2) 452 328 328 Exceptional items 805 129 129 Profi t from tax grouping regime 77 33 33
Net income for the year (3) 1,334 490 490
(1) Including one-off dividends paid by SNCF Participations: €35 million (€200 million in 2004). The fi nancial expense, excluding dividends paid by SNCF Participations, amounts to –€223 million (–€249 million in 2004). (2) The 2005 net income from ordinary activities excluding one-off dividends paid by SNCF Participations amounts to €417 million (€128 million in 2004). (3) The 2005 net income excluding one-off dividends paid by SNCF Participations amounts to €1,299 million (€290 million in 2004).
EEXE_SNCF_SOCIAUX_05_FP_EN.inddXE_SNCF_SOCIAUX_05_FP_EN.indd 9922 224/05/064/05/06 10:30:0310:30:03 STATEMENT OF CASH FLOWS 93 STATEMENT OF CASH FLOWS
in € millions 2005 2004
Net income 1,334 490 Elimination of non-cash items or items not related to operations: • Depreciation, amortisation and provisions, net (excluding current asset provisions) 996 817 • Capital gains (losses) on disposals –987 –118 • Other 14 15 Cash fl ow from company operations (1) 1,357 1,204
Change in working capital requirements –24 –295 (a) Net cash from operations 1,333 909
Tangible and intangible asset purchases –2,377 –1,921 Change in investment capital requirements (2) 217 6 Equity purchases – –37 Other long-term investment purchases –48 –63
Sub-total (1) –2,208 –2,015
Tangible and intangible asset sales 164 139 Equity sales 408 6 Other long-term investment sales 195 232
Sub-total (2) 767 377 (b) Net cash used in investing activities (1)+(2) –1,441 –1,638
Change in share capital (3) 250 – New loans secured 402 1,075 Loan repayments, net –496 –1,369 Investment subsidies received 735 572 Change in marketable securities (4) –268 11 Change in cash borrowings (4) 178 331 Other changes –20 –41 (c) Net cash from fi nancing activities 781 579
Increase (decrease) in cash balance (a)+(b)+(c) 673 –150
Opening cash balance 30 180 Closing cash balance 703 30
(1) Cash fl ow from operations amounted to €1,395 million after restatement of provision charges/reversals on current assets (€38 million). Cash fl ow from operations excluding dividends and tax grouping amounted to €1,256 million. (2) Change in suppliers of fi xed assets. (3) State aid for Freight Plan. (4) Portion with an initial maturity of more than 3 months.
EEXE_SNCF_SOCIAUX_05_FP_EN.inddXE_SNCF_SOCIAUX_05_FP_EN.indd 9933 224/05/064/05/06 10:30:0410:30:04 94 SNCF Group — Company Financial Statements 2005
Statutory Auditors’ Report on the Financial Statements Year ended 31 December 2005
This is a free translation into English of the statutory auditors’ reports issued in the French language and is provided solely for the convenience of English speaking readers. The statutory auditors’ report includes for the information of the reader, as required under French law in any auditors’ report, whether qualifi ed or not, explanatory paragraphs separate from and presented below the audit opinion discussing the auditors’ assessments of certain signifi cant accounting and auditing matters. These assessments were considered for the purpose of issuing an audit opinion on the company fi nancial statements taken as a whole and not to provide separate assurance on individual account captions or on information taken outside of the fi nancial statements. Such report, together with the statutory auditors’ report addressing fi nancial reporting in management’s report on internal control, should be read in conjunction and construed in accordance with French law and French auditing professional standards.
In accordance with our appointment as auditors, we hereby report to you for the year ended 31 December 2005 on: 2. Justifi cation of our assessments • the audit of the accompanying fi nancial statements of SNCF, a public Pursuant to the provisions of Article L.823-9 of the French establishment of an industrial and commercial nature, Commercial Code governing the justifi cation of our assessments, • the justifi cation of our assessments, we draw your attention to the following matters: • the specifi c procedures and disclosures required by law. • As part of our assessments of the accounting policies and mate- These fi nancial statements have been approved by the Board rial estimates, we satisfi ed ourselves as to the correct application of Directors. Our role is to express an opinion on these fi nancial of changes in accounting method, the disclosure thereof in Note 2 statements, based on our audit. to the fi nancial statements and the reasonableness of the assump- tions adopted for the valuation of assets; • Notes 2 and 28 to the fi nancial statements set out the principles 1. Opinion on the fi nancial statements for treating off-balance-sheet the fi nancial debt transferred to the special debt account, the accounting treatment of the employee- Except as discussed in the following paragraph, we conducted our related benefi ts service account and the main fi gures related audit in accordance with professional standards applicable in France. thereto. Those standards require that we plan and perform the audit to obtain In connection with our assessment of the overall presentation of reasonable assurance about whether the fi nancial statements are free accounts, we satisfi ed ourselves as to the appropriateness of the of material misstatement. An audit includes examining, on a test basis, related information concerning these two issues. evidence supporting the amounts and disclosures in the fi nancial state- • Pension and medical care benefi t commitments are not accrued ments. An audit also includes assessing the accounting principles used pursuant to the option offered under French GAAP. and signifi cant estimates made by management, as well as evaluating As part of our assessment of the signifi cant estimates used for the overall presentation of the fi nancial statements. We believe that our the year-end closing of the accounts, we examined the basis and audit provides a reasonable basis for our opinion. methods used for the actuarial calculation and the information As was the case for the year ended 31 December 2004, there are disclosed by the Company in Note 25 to the fi nancial statements differences of opinion between Réseau Ferré de France (RFF) and SNCF describing the specifi cities of the SNCF regimes. as to the transmission of certain fi xed assets and the terms and condi- These assessments were performed as part of our audit tions of transfer that could result from future arbitration of this matter approach for the fi nancial statements taken as a whole and contrib- (see Note 3 to the fi nancial statements). We are unable to assess the uted to the expression of the qualifi ed opinion in the fi rst part of consequences of this situation on the fi nancial statements for the year this report. ended 31 December 2005. In our opinion, except for the matter described above, the fi nan- cial statements give a true and fair view of the fi nancial position and the assets and liabilities of the Company as at 31 December 2005 and 3. Specifi c procedures and disclosures the results of its operations for the year then ended in accordance with We have also performed the other procedures required by law, in accounting principles generally accepted in France. accordance with professional standards applicable in France. Without further qualifying our opinion, we draw your attention to Except for the effect, if any, of the matters described above, we the matters set out in Note 2 to the fi nancial statements: have no comment to make as to the fair presentation and consistency • changes in accounting method arising from the fi rst-time applica- with the fi nancial statements of the information given in the Board of tion of CRC Regulations 2002-10 and 2004-6 relating to assets as Directors’ report with respect to the fi nancial position and the fi nancial at 1 January 2005; statements. • recording of a capital contribution with respect to funds paid by the State as part of the Freight Plan in accordance with the State Paris-La Défense, 14 April 2006 and European Community ruling.
The Statutory Auditors
ERNST & YOUNG Audit MAZARS & GUÉRARD Francis Gidoin Marie-Laure Philippart Christine Vitrac Gilles Rainaut
EEXE_SNCF_SOCIAUX_05_FP_EN.inddXE_SNCF_SOCIAUX_05_FP_EN.indd 9944 224/05/064/05/06 10:30:0410:30:04 REPORT ON SNCF GROUP CORPORATE GOVERNANCE AND INTERNAL CONTROL 95
Report on SNCF Group Corporate Governance and Internal Control
As a public issuer, SNCF is subject to article 122 of the the case with the two previous reports, it describes the Financial Security Act of 1 August 2003. progress made in setting up a quality internal control func- The report on SNCF group corporate governance and tion, to which SNCF has long been committed, not only in internal control meets the SNCF obligations with respect to terms of fi nancial reporting reliability but also in regard to the public disclosure of information on the terms and condi- all operating activity. The report reiterates the main internal tions governing the preparation and organisation of the control components of the COSO framework. Board of Directors’ work and internal control procedures. This report is available on simple request from the This report, issued for fi scal year 2005, was presented SNCF Audit and Risks Department, 8 rue des Pirogues de to the Board of Directors on 15 March 2006. As was Bercy – 75012 PARIS.
EEXE_SNCF_SOCIAUX_05_FP_EN.inddXE_SNCF_SOCIAUX_05_FP_EN.indd 9955 224/05/064/05/06 10:30:0510:30:05 SNCF Direction de la Communication Direction de la Comptabilité et du Contrôle de gestion 34, rue du Commandant Mouchotte 75699 Paris Cedex 14 www.sncf.com
Photo credit: SNCF /CAV Dominique Larosière
Design and production:
Printing: Sérag Imprimerie Document printed on ECF paper (Elementary Chloring Free)
June 2006
The 2005 Financial Report is published in French and in English. It is also available on the site www.sncf.com.
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