Financière Gaillon 8 S.A. €370,000,000 7.00% Senior Notes Due 2019

LISTING PARTICULARS NOT FOR GENERAL DISTRIBUTION

IN THE UNITED STATES

Financière Gaillon 8 S.A. €370,000,000 7.00% Senior Notes due 2019

Financière Gaillon 8 S.A., a société anonyme organized and established under the laws of France (the “Issuer”), is offering (the “Offering”) €370.0 million aggregate principal amount of its 7.00% senior notes due 2019 (the “Notes”). The Issuer will pay interest on the Notes semi-annually on each March 31 and September 30, commencing on September 30, 2014. The Notes will mature on September 30, 2019. Prior to March 31, 2016, the Issuer may, at its option, redeem all or part of the Notes by paying the relevant “make-whole” premium. At any time on or after March 31, 2016, the Issuer may, at its option, redeem all or part of the Notes at the redemption prices set forth herein. In addition, prior to March 31, 2016, the Issuer may, at its option, redeem up to 40% of the Notes with the net proceeds from certain equity offerings. Upon the occurrence of certain events constituting a change of control, including if the Issuer sells all or substantially all of its assets and the assets of its restricted subsidiaries, taken as a whole, the Issuer may be required to offer to repurchase the Notes. However, a change of control will not be deemed to have occurred on one occasion if a specified consolidated net leverage ratio is not exceeded as a result of such event. In the event of certain developments affecting taxation, the Issuer may redeem all, but not less than all, of the Notes. The Notes will be senior obligations of the Issuer and will rank pari passu in right of payment to all of the Issuer’s existing and future senior indebtedness. The Notes will be secured by first-priority security interests, subject to certain perfection requirements and any permitted collateral liens, in (i) the ordinary shares of Kaufman & Broad S.A. held by the Issuer and (ii) until the first interest payment date on the Notes, a designated bank account of the Issuer containing a portion of the proceeds of the Offering corresponding to the amount of interest payable on the Notes for the first interest period (the “Designated Bank Account” and, together with the security interest in the ordinary shares of Kaufman & Broad S.A. held by the Issuer, the “Collateral”). See “Summary—The Offering—Collateral” and “Description of the Notes—Security.” The security interests in the Collateral will be subject to significant contractual and legal limitations and may be released under certain circumstances. See “Risk Factors—Risks Related to Our Indebtedness and the Notes.” These Listing Particulars include information on the terms of the Notes, including redemption and repurchase prices, covenants and transfer restrictions. The Irish Stock Exchange has approved this document as Listing Particulars for purposes of the Notes being listed on the Official List of the Irish Stock Exchange and admitted for trading on its Global Exchange Market. There is no assurance that the Notes will remain listed and admitted for trading on the Global Exchange Market. Investing in the Notes involves a high degree of risk. See “Risk Factors” beginning on page 24.

Price: 100.00% plus accrued interest, if any, from March 31, 2014.

The Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), or the laws of any other jurisdiction and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act. In the United States, the offering of the Notes is being made only to “qualified institutional buyers” (“QIBs”) (as defined in Rule 144A under the U.S. Securities Act) in compliance with Rule 144A under the U.S. Securities Act (“Rule 144A”). You are hereby notified that the initial purchasers of the Notes may be relying on the exemption from the provisions of Section 5 of the U.S. Securities Act provided by Rule 144A. Outside the United States, this Offering is being made to non-U.S. persons in reliance on Regulation S under the U.S. Securities Act (“Regulation S”). See “Notice to Investors” and “Transfer Restrictions” for additional information about eligible offerees and transfer restrictions.

The Notes will be issued in registered form in minimum denominations of €100,000 and integral multiples of €1,000 in excess thereof. The Notes will be represented on issue by one or more global notes and the initial purchasers expect to deliver the Notes in book-entry form through Euroclear Bank SA/NV (“Euroclear”) and Clearstream Banking, société anonyme (“Clearstream”) on or about March 31, 2014.

Joint Global Coordinators and Joint Physical Bookrunners Joint Global Coordinator and Joint Bookrunner

Goldman Sachs International Credit Suisse Crédit Agricole CIB

Joint Bookrunner

Natixis

Manager

Banco Sabadell The date of these Listing Particulars is April 3, 2014.

CONTENTS

SUMMARY ...... 1 RISK FACTORS ...... 21 USE OF PROCEEDS ...... 44 CAPITALIZATION ...... 49 SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION ...... 46 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ...... 48 INDUSTRY ...... 89 BUSINESS ...... 97 MANAGEMENT ...... 126 PRINCIPAL SHAREHOLDERS ...... 131 DESCRIPTION OF CERTAIN RELATED PARTY TRANSACTIONS ...... 133 DESCRIPTION OF OTHER INDEBTEDNESS ...... 138 DESCRIPTION OF THE NOTES ...... 143 BOOK-ENTRY; DELIVERY AND FORM ...... 217 TRANSFER RESTRICTIONS ...... 221 TAX CONSIDERATIONS ...... 224 LIMITATIONS ON VALIDITY AND ENFORCEABILITY OF THE SECURITY INTERESTS AND CERTAIN INSOLVENCY LAW CONSIDERATIONS ...... 230 PLAN OF DISTRIBUTION ...... 238 LEGAL MATTERS ...... 240 STATUTORY AUDITORS ...... 240 SERVICE OF PROCESS AND ENFORCEMENT OF CIVIL LIABILITIES ...... 241 LISTING AND GENERAL INFORMATION ...... 243 INDEX TO FINANCIAL STATEMENTS ...... F-1 You should rely only on the information contained in these Listing Particulars. None of the Issuer, Kaufman & Broad S.A. (the “Company”) or any of Goldman Sachs International, Credit Suisse Securities (Europe) Limited, Crédit Agricole Corporate and Investment Bank, Natixis and Banco de Sabadell, S.A. (the “Initial Purchasers”) have authorized anyone to provide you with information that is different from the information contained herein. If given, any such information should not be relied upon. None of the Issuer, the Company nor any of the Initial Purchasers are making an offer of the Notes in any jurisdiction where the Offering is not permitted. You should not assume that the information contained in these Listing Particulars is accurate as of any date other than the date on the front of these Listing Particulars.

NOTICE TO INVESTORS These listing particulars (the “Listing Particulars”) do not constitute an offer to sell or an invitation to subscribe for or purchase any of the Notes in any jurisdiction in which such offer or invitation is not authorized or to any person to whom it is unlawful to make such an offer or invitation. No action has been, or will be, taken to permit a public offering in any jurisdiction where action would be required for that purpose. Accordingly, the Notes may not be offered or sold, directly or indirectly, and these Listing Particulars may not be distributed, in any jurisdiction except in accordance with the legal requirements applicable in such jurisdiction. You must comply with all laws that apply to you in any place in which you buy, offer or sell any Notes or possess these Listing Particulars. You must also obtain any consents or approvals that you need in order to purchase any Notes. Neither we nor any of the Initial Purchasers are responsible for your compliance with these legal requirements. The Notes are subject to restrictions on transferability and resale, which are described under the captions “Plan of Distribution” and “Transfer Restrictions.” By possessing these Listing Particulars or purchasing any Note, you will be deemed to have represented and agreed to all of the provisions contained in that section of these Listing Particulars. You should be aware that you may be required to bear the financial risks of this investment for an indefinite period of time. Neither we nor the Initial Purchasers nor any of our or their respective representatives are providing you with any legal, business, tax or other advice in these Listing Particulars. You should consult with your own advisors as needed to assist you in making your investment decision and to advise you whether you are legally permitted to purchase the Notes. You should base your decision to invest in the Notes solely on information contained in these Listing Particulars. These Listing Particulars contain summaries believed to be accurate with respect to certain documents, but reference is made to the actual documents for complete information. All such summaries are qualified in their entirety by such reference. Copies of certain of the documents referred to herein will be made available to prospective investors upon request to us. By purchasing the Notes, you will be deemed to have acknowledged that you have reviewed these Listing Particulars and have had an opportunity to request, and have received all additional information that you need from us. No person is authorized in connection with any offering made by these Listing Particulars to give any information or to make any representation not contained in these Listing Particulars or any pricing term sheet or supplement and, if given or made, any other information or representation must not be relied upon as having been authorized by us or the Initial Purchasers. The information contained in these Listing Particulars is accurate as of the date hereof. Neither the delivery of these Listing Particulars at any time after the date of publication nor any subsequent commitment to purchase the Notes shall, under any circumstances, create an implication that there has been no change in the information set out in these Listing Particulars or in our business since the date of these Listing Particulars. The Initial Purchasers, the Trustee (as defined herein) and any other agents acting with respect to the Notes accept no responsibility for and make no representation or warranty, express or implied, as to the accuracy or completeness of the information set out in these Listing Particulars and nothing contained in these Listing Particulars is, or should be relied upon as, a promise or representation by the Initial Purchasers, the Trustee, or any other agents acting with respect to the Notes as to the past or the future. The information set out in relation to sections of these Listing Particulars describing clearing and settlement arrangements, including the section entitled “Book-Entry; Delivery and Form,” is subject to any change in or reinterpretation of the rules, regulations and procedures of Euroclear or Clearstream currently in effect. We will not, nor will any of our agents, have responsibility for the performance of the respective obligations of Euroclear and Clearstream or their respective participants under the rules and procedures governing their operations, nor will we or our agents have any responsibility or liability for any aspect of the records relating to, or payments made on account of, book-entry interests held through the facilities of any clearing system or for maintaining, supervising or reviewing any records relating to these book-entry interests. Investors wishing to use these clearing systems are advised to confirm the continued applicability of their rules, regulations and procedures.

We reserve the right to withdraw the Offering of the Notes at any time. We and the Initial Purchasers each reserve the right to reject any offer to purchase the Notes in whole or in part and to allot to any prospective purchaser less than the amount of the Notes sought by it. The Initial Purchasers and certain of their respective related entities may acquire, for their own accounts, a portion of the Notes. You must not make copies of any part of these Listing Particulars or give a copy to any other person; or disclose any information in these Listing Particulars to any other person. ii

By accepting delivery of these Listing Particulars, you agree to the foregoing restrictions and agree not to use any information herein for any purpose other than considering an investment in the Notes. These Listing Particulars may be used only for the purpose for which they were published.

STABILIZATION IN CONNECTION WITH THE ISSUE OF THE NOTES, GOLDMAN SACHS INTERNATIONAL (THE “STABILIZING MANAGER”) (OR PERSONS ACTING ON BEHALF OF THE STABILIZING MANAGER) MAY OVER ALLOT NOTES OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE OF THE NOTES AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL. HOWEVER, THERE IS NO ASSURANCE THAT THE STABILIZING MANAGER (OR PERSONS ACTING ON BEHALF OF THE STABILIZING MANAGER) WILL UNDERTAKE STABILIZATION ACTION. ANY STABILIZATION ACTION MAY BEGIN ON OR AFTER THE DATE ON WHICH ADEQUATE PUBLIC DISCLOSURE OF THE FINAL TERMS OF THE OFFER OF THE NOTES IS MADE AND, IF BEGUN, MAY BE ENDED AT ANY TIME, BUT IT MUST END NO LATER THAN THE EARLIER OF 30 DAYS AFTER THE DATE OF ISSUE OF THE NOTES (THE “ISSUE DATE”) AND 60 DAYS AFTER THE DATE OF THE ALLOTMENT OF THE NOTES. ANY STABILIZATION ACTION OR OVER ALLOTMENT MUST BE CONDUCTED BY THE STABILIZING MANAGER (OR PERSONS ACTING ON BEHALF OF THE STABILIZING MANAGER) IN ACCORDANCE WITH ALL APPLICABLE LAWS AND RULES.

NOTICE TO NEW HAMPSHIRE RESIDENTS NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF THE STATE OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE OF THE STATE OF NEW HAMPSHIRE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER, OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH. THE NOTES MAY NOT BE OFFERED TO THE PUBLIC WITHIN ANY JURISDICTION. BY ACCEPTING DELIVERY OF THESE LISTING PARTICULARS, YOU AGREE NOT TO OFFER, SELL, RESELL, TRANSFER OR DELIVER, DIRECTLY OR INDIRECTLY ANY NOTES TO THE PUBLIC.

IMPORTANT INFORMATION ABOUT SELLING AND JURISDICTIONAL RESTRICTIONS United States. The Notes have not been and will not be registered under the U.S. Securities Act or the securities laws of any state of the United States, and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act. For a description of certain further restrictions on resale and transfer, see “Transfer Restrictions.”

In the United States, the Offering of the Notes is being made only to “qualified institutional buyers” (as defined in Rule 144A under the U.S. Securities Act). Prospective purchasers that are qualified institutional buyers are hereby notified that the Initial Purchasers of the Notes may be relying on an exemption from the provisions of Section 5 of the U.S. Securities Act provided by Rule 144A. Outside the United States, the Offering of the Notes is being made to non-U.S. persons in offshore transactions (each as defined in Regulation S). Neither the U.S. Securities and Exchange Commission (the “SEC”), any state securities commission nor any non-U.S. securities authority has approved or disapproved of these securities or determined that these Listing Particulars are accurate or complete. Any representation to the contrary is a criminal offense. Belgium. These Listing Particulars relate to a private placement of the Notes and do not constitute an offer or solicitation to the public in Belgium to subscribe for or acquire the Notes. The Offering has not been and will not be notified to, and these Listing Particulars have not been, and will not be, approved by the Belgian Financial Services and Markets Authority (Autoriteit voor Financiële Diensten en Markten/Autorité des Services et Marchés Financiers) pursuant to the iii

Belgian laws and regulations applicable to the public offering of notes. Accordingly, the Offering, as well as any other materials relating to the Offering may not be advertised, the Notes may not be offered or sold, and these Listing Particulars or any other information circular, brochure or similar document may not be distributed, directly or indirectly, (i) to any other person located and/or resident in Belgium other than in circumstances which do not constitute an offer to the public in Belgium pursuant to the Belgian Act of June 16, 2006 on the public offering of investment instruments and the admission of investment instruments to trading on a regulated market or pursuant to the Belgian Act of August 3, 2012 on certain forms of collective management of investment portfolios or (ii) to any person qualifying as a consumer within the meaning of the Belgian Act of April 6, 2010 on market practices and consumer protection, unless such sale is made in compliance with the Belgian Act of April 6, 2010 and its implementing regulation. These Listing Particulars have been issued to the intended recipient for personal use only and exclusively for the purpose of the offer. Therefore they may not be used for any other purpose, nor passed on to any other person in Belgium. France. These Listing Particulars have not been prepared in the context of a public offering of financial securities in France within the meaning of Article L.411-1 of the French Code monétaire et financier and Title I of Book II of the Règlement Général of the Autorité des marchés financiers (the French financial markets authority, or “AMF”). Consequently, the Notes may not be, directly or indirectly, offered or sold to the public in France (offre au public de titres financiers), and neither these Listing Particulars nor any offering or marketing materials relating to the Notes must be made available or distributed in any way that would constitute, directly or indirectly, an offer to the public in France. The Notes may only be offered or sold in France to qualified investors (investisseurs qualifiés) and/or to providers of investment services relating to portfolio management for the account of third parties (personnes fournissant le service d’investissement de gestion de portefeuille pour le compte de tiers), all as defined in and in accordance with Articles L.411-1, L.411-2, D.411-1, D.411-4, D.744-1, D.754-1 and D.764-1 of the French Code monétaire et financier. Prospective investors are informed that: (i) these Listing Particulars have not been and will not be submitted for clearance to the AMF; (ii) in compliance with Articles L.411-2, D.411-1, D.411-4, D.744-1, D.754-1 and D.764-1 of the French Code monétaire et financier, any investors subscribing for the Notes should be acting for their own account; and (iii) the direct and indirect distribution or sale to the public of the Notes acquired by them may only be made in compliance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 through L.621-8-3 of the French Code monétaire et financier. Germany. The Offering of the Notes is not a public offering in the Federal Republic of Germany. The Notes may only be offered, sold and acquired in accordance with the provisions of the Securities Prospectus Act of the Federal Republic of Germany (the “Securities Prospectus Act,” Wertpapierprospektgesetz, WpPG), as amended, and any other applicable German law. No application has been made under German law to publicly market the Notes in or out of the Federal Republic of Germany. The Notes are not registered or authorized for distribution under the Securities Prospectus Act and accordingly may not be, and are not being, offered or advertised publicly or by public promotion. Therefore, these Listing Particulars are strictly for private use and the offer is only being made to recipients to whom the document is personally addressed and does not constitute an offer or advertisement to the public. The Notes will only be available to, and these Listing Particulars and any other offering material in relation to the Notes are directed only at, persons who are qualified investors (qualifizierte Anleger) within the meaning of Section 2, No. 6 of the Securities Prospectus Act or who are subject of another exemption in accordance with Section 3 para. 2 of the Securities Prospectus Act. Any resale of the Notes in Germany may be made only in accordance with the Securities Prospectus Act and other applicable laws. Ireland. These Listing Particulars have been prepared on the basis that any offer of Notes will be made pursuant to the exemptions in Regulation 9(1)(a), (b) or (d) of the Irish Prospectus (Directive 2003/71/EC) Regulations 2005 (the “Irish Prospectus Regulations”) from the requirement to publish a prospectus for offers of notes. Accordingly, any person making or intending to make an offer in Ireland of Notes which are subject of the Offering contemplated in these Listing Particulars may only do so in circumstances in which no obligation arises for the Issuer or the Initial Purchaser to publish a prospectus pursuant to Regulation 12 of the Irish Prospectus Regulations or supplement a prospectus pursuant to Regulation 51 of the Irish Prospectus Regulations, in each case, in relation to such offer. None of the Issuer or the Initial Purchaser has authorized, nor do they authorize, the making of any offer of Notes in circumstances in which an obligation arises for the Issuer or the Initial Purchaser to publish or supplement a prospectus for such offer.

Italy. The Offering of the Notes has not been registered pursuant to Italian securities legislation and, accordingly, no Notes may be offered, sold or delivered, nor may copies of these Listing Particulars or of any other document relating to the Notes be distributed in the Republic of Italy (“Italy”), except: (i) to qualified investors (investitori qualificati), as defined under Article 100 of Legislative Decree No. 58 of February 24, 1998, as amended (the “Financial Services Act”), as implemented by Article 26, first paragraph, letter d) of Commissione Nazionale per le Società e la Borsa (“CONSOB”) Regulation No. 16190 of October 29, 2007, as amended (“Regulation No. 16190”), pursuant to Article 34-ter, first paragraph, letter b) of CONSOB Regulation No. 11971 of May 14, 1999, as amended from time to time (“Regulation No. 11971”); or (ii) in other circumstances which are exempted from the rules on public offerings pursuant to Article 100 of the Financial Services Act and its implementing CONSOB regulations, including Regulation No. 11971. Any offer, sale or delivery of the Notes or distribution of copies of these Listing Particulars or any other document relating to the Notes in Italy under (i) or (ii) above must be: (a) made by an investment firm, bank or financial intermediary permitted to conduct such activities in Italy in accordance with the Legislative Decree No. 385 of September 1, 1933, as amended (the “Banking Act”), the Financial Services Act, Regulation No. 16190 (in each case, as amended from time to time) and any other applicable law and regulations; (b) in compliance with Article 129 of the Banking Act, as amended, and the implementing guidelines of the Bank of Italy, as amended from time to time, pursuant to which the Bank of Italy may request information on the issue or the offering of securities in Italy; and (c) in compliance with any other applicable laws and regulations or requirement imposed by CONSOB, the Bank of Italy or any other Italian authority. Japan. The Notes have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (the “Financial Instruments and Exchange Law”) and each Initial Purchaser has agreed that it will not offer or sell any securities, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan. Jersey. The Jersey Financial Services Commission (the “Jersey Commission”) has given, and has not withdrawn, its consent under Article 4 of the Control of Borrowing (Jersey) Order 1958 to the issue of the Notes by the Issuer. The Jersey Commission is protected by the Control of Borrowing (Jersey) Law 1947, as amended, against liability arising from the discharge of its functions under that law. A copy of this document has been delivered to the Jersey registrar of companies in accordance with Article 5 of the Companies (General Provisions) (Jersey) Order 2002, and he has given, and has not withdrawn, his consent to its circulation. It must be distinctly understood that, in giving these consents, neither the Jersey registrar of companies nor the Jersey Commission takes any responsibility for the financial soundness of the Issuer or for the correctness of any statements made, or opinions expressed, with regard to it. It should be remembered that the price of securities and the income from them can go down as well as up. If you are in any doubt about the contents of this document you should consult your stockbroker, bank manager, solicitor, accountant or other financial adviser. Grand Duchy of Luxembourg. These Listing Particulars have not been approved by and will not be submitted for approval to (i) the Commission de Surveillance du Secteur Financier for the purposes of public offering or sale, in the Grand Duchy of Luxembourg, of the Notes or admission to the official list of the Luxembourg Stock Exchange (the “LxSE”) and trading on the LxSE’s regulated market of the Notes or to (ii) the LxSE for the purposes of admitting the Notes to the official list of the LxSE and trading on the LxSE’s Euro MTF market. Accordingly, the Notes may not be offered or sold to the public in the Grand Duchy of Luxembourg, directly or indirectly, or listed or traded on the LxSE, and neither these Listing Particulars nor any other circular, prospectus, form of application, advertisement or other material may be distributed, or otherwise made available in or from, or published in, the Grand Duchy of Luxembourg except in circumstances which do not constitute a public offer of securities to the public, subject to prospectus requirements, in accordance with applicable Luxembourg law and in particular the Luxembourg act dated 10 July 2005 on prospectuses for securities, as amended. Mexico. The Notes have not been and will not be registered with the National Securities Registry (Registro Nacional de Valores) maintained by the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria y de

Valores, “CNBV”), and may not be offered, sold, traded publicly, or otherwise be the subject of brokerage activities in Mexico, except as provided by the a private placement exemption set forth under Article 8 of the Mexican Securities Market Law (Ley del Mercado de Valores), pursuant to which the Notes may be offered in Mexico to institutional and qualified investors. The information contained in these Listing Particulars is the exclusive responsibility of the Issuer and has not been reviewed or authorized by the CNBV. In making an investment decision, all investors, including any Mexican investors, who may acquire Notes from time to time, must rely on their own examination of the Issuer and the Guarantors, the terms of the Offering and these Listing Particulars, including the merits and risks involved. The Netherlands. Notes in definitive form on which interest does not become due and payable whatsoever during their term but only at maturity (savings certificates or spaarbewijzen as defined in the Netherlands Savings Certificates Act or Wet inzake spaarbewijzen, the “SCA”) may only be transferred and accepted, directly or indirectly, within, from or into the Netherlands through the mediation of either the Issuer or a member firm of Euronext Amsterdam, admitted in a function on one or more markets or systems held or operated by Euronext Amsterdam N.V. with due observance of the provisions of the SCA and its implementing regulations (which include registration requirements). No such mediation is required, however, in respect of (i) the initial issue of such notes to the first holders thereof, (ii) the transfer and acceptance by individuals who do not act in the conduct of a profession or business, (iii) the transfer and acceptance of such notes (either in definitive form or as rights representing an interest in such note in global form) of any particular series of tranche issued outside the Netherlands and not distributed in the Netherlands in the course of initial distribution or immediately thereafter and (iv) the transfer and acceptance of rights representing an interest in a global note or certificate. Spain. These Listing Particulars have not been approved nor registered with the Comisión Nacional del Mercado de Valores (“CNMV”) and therefore the Notes may not be offered, sold or distributed in Spain except in circumstances which do not qualify as a public offer of securities in Spain in accordance with article 30 bis of the Securities Market Act (Ley 24/1988, de 28 de Julio, del Mercado de Valores) as amended and restated, or pursuant to an exemption from registration in accordance with article 41 of the Royal Decree 1310/2005 (Real Decreto 1310/2005, de 4 de noviembre, por el que se desarrolla parcialmente la Ley 24/1988, de 28 de Julio, del Mercado de Valores, en material de admisión a negociación de valores en mercados secundarios oficiales, de ofertas públicas de venta o suscripción y del folleto exigible a tales efectos) as amended or restated. Sweden. These Listing Particulars are not a prospectus and have not been prepared in accordance with the prospectus requirements provided for in the Swedish Financial Instruments Trading Act (Sw. lagen (1991:980) om handel med finansiella instrument) nor any other Swedish enactment. Neither the Swedish Financial Supervisory Authority (Sw. Finansinspektionen) nor any other Swedish public body has examined, approved or registered these Listing Particulars or will examine, approve or register these Listing Particulars. Accordingly, these Listing Particulars may not be made available, nor may the Notes otherwise be marketed and offered for sale, in Sweden other than in circumstances that are deemed not to be an offer to the public under the Swedish Financial Instruments Trading Act. Switzerland. The Notes may not be publicly offered, sold or advertised, directly or indirectly, in, into or from Switzerland and will not be listed on the SIX Swiss Exchange or any other exchange or regulated trading facility in Switzerland. Neither these Listing Particulars nor any other offering or marketing material relating to the Notes constitutes (i) a prospectus as such term is understood pursuant to Article 652a or 1156 of the Swiss Code of Obligations or (ii) a listing prospectus within the meaning of the listing rules of the SIX Swiss Exchange or any other regulated trading facility in Switzerland, and neither these Listing Particulars nor any other marketing material relating to the Notes may be publicly distributed or otherwise made publicly available in Switzerland. In addition, these Listing Particulars and other offering or marketing material relating to the Notes may not comply with the Directive for Notes of Foreign Borrowers of the Swiss Bankers Association. The Notes are being offered in Switzerland by way of private placement, without any public advertisement and only to investors who do not purchase the Notes with the intention to distribute them to the public. The investors will be individually approached directly from time to time. These Listing Particulars, as well as any other offering or marketing material relating to the Notes, do not constitute an offer to any other person. These Listing Particulars, as well as any other offering or marketing material relating to the Notes, may only be used by those investors to whom it has been handed out in connection with the Offering and may neither directly nor indirectly be distributed or made available to other persons without the relevant Issuer’s express consent. United Kingdom. These Listing Particulars are for distribution only to, and are directed solely at, persons who: (a) are outside the United Kingdom of Great Britain and Northern Ireland (the “United Kingdom”), (b) are investment professionals, as such term is defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”), (c) are persons falling within Articles 49(2)(a) to (d) of the Order or (d) are persons to whom an invitation or inducement to engage in investment banking activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any Notes may otherwise lawfully be vi

communicated or caused to be communicated (all such persons together being referred to as “relevant persons”). These Listing Particulars are directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which these Listing Particulars relate is available only to relevant persons and will be engaged in only with relevant persons. Any person who is not a relevant person should not act or rely on these Listing Particulars or any of their contents. TO COMPLY WITH TREASURY DEPARTMENT CIRCULAR 230, PROSPECTIVE INVESTORS ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF U.S. FEDERAL TAX ISSUES IN THESE LISTING PARTICULARS IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED BY ANY TAXPAYER, FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON THE TAXPAYER UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED; (B) ANY SUCH DISCUSSION IS INCLUDED HEREIN IN CONNECTION WITH THE PROMOTION OR MARKETING (WITHIN THE MEANING OF CIRCULAR 230) OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (C) A TAXPAYER SHOULD SEEK ADVICE BASED ON THE TAXPAYER’S PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

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AVAILABLE INFORMATION For so long as any of the Notes are “restricted securities” within the meaning of Rule 144(a)(3) under the U.S. Securities Act, we will, during any period in which we are neither subject to the reporting requirements of Section 13 or 15(d) of the U.S. Securities Exchange Act of 1934, as amended (the “U.S. Exchange Act”), nor exempt from the reporting requirements under Rule 12g3-2(b) under the U.S. Exchange Act, provide to the holder or beneficial owner of such restricted securities or to any prospective purchaser of such restricted securities designated by such holder or beneficial owner, in each case upon the written request of such holder, beneficial owner or prospective purchaser, the information required to be provided by Rule 144A(d)(4) under the U.S. Securities Act. Any such request should be directed to the Issuer, at 232, rue de Rivoli, 75001 Paris, France. Copies of the indenture governing the Notes (the “Indenture”) and the forms of Note will be made available upon request to Deutsche Bank AG, London branch (the “Principal Paying Agent”) or to the Issuer at the address above. We are not currently, and we will not be, subject to the periodic reporting and other information requirements of the U.S. Exchange Act. Pursuant to the Indenture governing the Notes and so long as the Notes are outstanding, we will furnish periodic information to holders of the Notes. See “Description of the Notes—Certain Covenants—Reports.”

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FORWARD-LOOKING STATEMENTS Various statements contained in these Listing Particulars constitute “forward-looking statements” within the meaning of the securities laws of certain applicable jurisdictions. All statements other than statements of historical fact in these Listing Particulars, including, without limitation, statements about our future financial position, our strategy, our business plans, anticipated investments and results, project feasibility and land acquisition, expected construction timelines and costs, projected orders and sales, the impact of governmental regulations or actions, litigation outcomes and timetables, future capital expenditures, liquidity requirements, the objectives of management for future operations and earnings forecasts for real estate programs used to recognize percentage-of-completion transactions, may be deemed to be forward-looking statements. When used in these Listing Particulars, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “position,” “seek,” “should,” “strategy” and “will,” variations on these words and similar expressions may identify these forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward- looking. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements or industry results to be materially different from those contemplated, projected, forecast, estimated or budgeted, whether expressed or implied, by these forward-looking statements. These factors include those set forth in the section of these Listing Particulars captioned “Risk Factors” beginning on page 24, which include, among others: • changes in general economic, social or business conditions in France; • our customers’ ability to secure financing for their home purchases; • changes to French tax incentive schemes; • our ability to comply with laws and regulations applicable to our operations; • competition in the real estate development industry, including as to our ability to acquire suitable land at any given time for our developments, in sufficient quantities or at reasonable prices; • the results of environmental impact studies performed in advance of our development programs; • risks associated with litigation; • difficulties and complications encountered in connection with the construction process, changes to our contractual arrangements with our contractors, increases in construction costs due to market changes or other events that may arise in the course of construction; • increases in insurance premiums and our ability to maintain adequate insurance coverage; • additional costs and delays arising from contracts signed with public bodies; • our significant off-balance sheet commitments; • our reliance on extrinsic guarantees and the ability of financial institutions to grant them; • weather conditions and natural disasters; • the discovery of archaeological remains before or during construction; • costs and liabilities in connection with pollution on the sites we own or have owned; • our ability to attract and retain key personnel and skilled managers; • our ability to manage our single brand successfully; • the destruction of our information systems; • our ability to comply with stringent privacy and data protection rules; • our vulnerability to the insolvency of shareholders in our joint-development programs or other business counterparties;

• our ability to prevent cost overruns and program underperformance through accurate budgeting and reliable financial control mechanisms; and

• risks relating to taxation. The risks included here are not exhaustive. Moreover, we operate in a highly competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for us to predict all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Any forward-looking statements are made only as of the date of these Listing Particulars and, except as required by law or the rules and regulations of any exchange on which the Notes are listed, we assume no obligation to update the forward- looking statements contained in these Listing Particulars to reflect actual results, changes in assumptions or changes in factors affecting these statements.

PRESENTATION OF FINANCIAL AND OTHER INFORMATION Financial Statements Presented Financière Gaillon 8 S.A. (the “Issuer” or “FG8”) is a société anonyme organized and established under the laws of France which, as of January 31, 2014, directly owned 87.95% of the ordinary shares of Kaufman & Broad S.A. (the “Company” or “K&B”), a société anonyme organized and established under the laws of France, which owns, directly or indirectly, all of our operating subsidiaries. See “Summary—Summary Corporate and Financing Structure.” We have included and discussed in these Listing Particulars the English translation of the audited consolidated financial statements of the Issuer and its subsidiaries as of and for the financial years ended November 30, 2011, 2012 and 2013. Tables in these Listing Particulars that show financial, operating or other data of the Issuer and its subsidiaries or any subset thereof for 2011, 2012 and 2013 refer to data for the financial years ended November 30, 2011, 2012 or 2013, as applicable. These Listing Particulars also show financial information of the Company for financial years prior to the financial year ended November 30, 2011, which was derived from publicly available financial statements of the Company for the relevant financial years. Neither the audited consolidated financial statements of the Issuer nor the audited consolidated financial statements of the Company as of and for any financial year prior to the financial year ended November 30, 2011 are included in these Listing Particulars. All references to “we,” “us,” “our” or the “Group” in respect of historical financial information in these Listing Particulars are to the Issuer and its subsidiaries on a consolidated basis. All references to “Kaufman & Broad” are to the Company and its subsidiaries on a consolidated basis. Our audited consolidated financial statements as of and for the financial years ended November 30, 2011, 2012 and 2013 were prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) as adopted by the European Union. Our consolidated financial statements as of and for the financial years ended November 30, 2011, 2012 and 2013 have been audited by our statutory auditors, Ernst & Young et Autres.

Non-IFRS Financial Measures These Listing Particulars contain measures and ratios that are not required by or presented in accordance with IFRS, including EBITDA, Adjusted EBITDA, Adjusted EBITDA margin and certain leverage and coverage ratios, among others (“Non-IFRS Metrics”). We present these Non-IFRS Metrics because we believe that they and similar measures are widely used by certain investors as supplemental measures of performance and liquidity. EBITDA represents income (loss) attributable to shareholders before amortization, depreciation and other non-cash elements, income tax (expenses) / income, cost of net financial debt, other interest expense, other financial income, other non-recurring income, other non-recurring expenses and share of income (loss) of equity affiliates and joint ventures. Adjusted EBITDA represents EBITDA adjusted for certain items that management considers to be non-recurring, or exceptional in nature or otherwise not reflective of the ongoing performance of our business. Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of revenues. For an explanation and reconciliation of EBITDA and Adjusted EBITDA to income (loss) attributable to shareholders, see “Summary Historical Consolidated Financial Information and Other Data—Other Financial Data.” We present EBITDA, Adjusted EBITDA, Adjusted EBITDA margin and other Non-IFRS Metrics for informational purposes only. This information does not represent the results we would have achieved had any of the transactions for which an adjustment is made occurred at the beginning of the periods presented. There can be no assurance that items we have identified for adjustment as non-recurring will not recur in the future or that similar items will not be incurred in the future. Our management believes that this information, along with comparable IFRS measures, is useful to investors because it provides a basis for measuring the operating performance in the periods presented. We are not presenting the Non-IFRS Metrics as measures of our results of operations. The Non-IFRS Metrics have important limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results of operations. The Non-IFRS Metrics are not measurements of financial performance under IFRS and should not be considered as alternatives to other indicators of our operating performance, cash flows or any other measure of performance derived in accordance with IFRS. The Non-IFRS Metrics as presented in these Listing Particulars may differ from and may not be comparable to similarly titled measures used by other companies and from “Consolidated EBITDA” contained in the section “Description of the Notes” of these Listing Particulars and the Indenture. The calculations for the Non-IFRS Metrics are based on various assumptions. These amounts have not been, and, in certain cases cannot be, audited, reviewed or verified by any independent accounting firm. This information is inherently xi

subject to risks and uncertainties. It may not give an accurate or complete picture of our financial condition or results of operations for the periods presented and should not be relied upon when making an investment decision.

Rounding Certain numerical figures set out in these Listing Particulars, including financial data presented in millions or thousands and certain percentages, have been subject to rounding adjustments and, as a result, the totals of the data in these Listing Particulars may vary slightly from the actual arithmetic totals of such information. Percentages and amounts reflecting changes over time period relating to financial and other data set forth in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are calculated using the numerical data in our consolidated financial statements or the tabular presentation of other data (subject to rounding) contained in these Listing Particulars, as applicable, and not using the numerical data in the narrative description thereof.

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INDUSTRY AND MARKET INFORMATION Unless otherwise expressly indicated or noted below, all information regarding markets, market size, market share, market position, growth rates and other industry data pertaining to our business contained in these Listing Particulars are based on estimates prepared by us based on certain assumptions and our knowledge of the industry in which we operate, as well as data from various market research publications, publicly available information and industry publications, including reports published by various third-party sources. Industry publications generally state that the information contained therein has been obtained from sources believed to be reliable, but some of the information may have been derived from estimates or subjective judgments or may have been subject to limited validation. While we believe this market data to be accurate and correct, that the information has been accurately reproduced and that as far as the Issuer is aware and is able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading, we have not independently verified it. We use a combination of data provided by external sources, including public reports published by Eurostat, BNP Paribas Real Estate, the Crédit Agricole Group, Jones Lang Lasalle, ImmoStat, Banque de France, the French Ministry of Ecology, Sustainable Development and Energy, the French Ministry of Higher Education and Research, the French Student Life Observatory (Observatoire de la Vie Étudiante), the Housing Credit Observatory (Observatoire Crédit Logement), the French National Institute for Statistics and Economic Studies (Institut national des statistiques et des études économiques) (“INSEE”), Sit@del2, the French Real Estate Agents Federation (Fédération nationale des agents immobiliers) (“FNAIM”), the International Monetary Fund (the “IMF”), the French Federation of Real Estate Developers (Fédération des promoteurs immobiliers) (“FPI”) and the French Observation and Statistics Service (Service de l’observation et des statistiques) (“SOeS”), the New Housing Sales Study (Enquête sur la commercialisation des logements neufs) (“ECLN”) produced by the French Ministry of Housing and a survey we commissioned that was conducted in 2012 by TNS Sofres. In some cases, there is no readily available external information (whether from trade associations, government bodies or other organizations) to validate market related analysis and estimates, thereby requiring us to rely on our own internally developed estimates regarding the industry in which we operate, our position in the industry, our market share and the market shares of various industry participants based on experience, our own investigation of market conditions and our review of industry publications, including information made available to the public by our competitors. While we have examined and relied upon certain market or other industry data from external sources as the basis for our estimates, neither we nor the Initial Purchasers have verified that data independently. We and the Initial Purchasers cannot assure you of the accuracy and completeness of, and take no responsibility for, such data. Similarly, while we believe our internal estimates to be reasonable, these estimates have not been verified by any independent source and we and the Initial Purchasers cannot assure you as to their accuracy. Our estimates involve risks and uncertainties and are subject to change based on various factors, including those discussed under “Risk Factors” and “Forward-Looking Statements.”

TRADEMARKS AND TRADE NAMES We own or have rights to certain trademarks or trade names that we use in conjunction with the operation of our businesses. Each trademark, trade name or service mark of any other company appearing in these Listing Particulars belongs to its holder. We own and have the right to use the trade names “Kaufman & Broad” and “Résidences Bernard Teillaud,” among others. Solely for convenience, the trademarks, trade names and copyrights referred to in these Listing Particulars are listed without the ©, ® and ™ symbols, but we will assert, to the fullest extent under applicable law, our rights to these trademarks and trade names.

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CERTAIN DEFINITIONS USED IN THESE LISTING PARTICULARS Unless indicated otherwise in these Listing Particulars or the context requires otherwise: • “ANRU” refers to the French National Urban Renewal Agency (Agence nationale pour la rénovation urbaine); • “BBC” refers to the label for low energy consumption buildings (Bâtiment basse consommation d’énergie); • “Borloo Populaire” refers to a French tax incentive for low-income housing adopted pursuant to the National Commitment to Housing Act 2006-872 of July 13, 2006; • “CA-CIB” refers to Crédit Agricole Corporate and Investment Bank (formerly Calyon, until February 2010), a société anonyme governed by French law, having its registered office at 9, quai du Président Paul Doumer, 92920 Paris La Défense, France, registered in France under sole identification number 304 187 701 RCS Nanterre; • “CGC” refers to the French Confederation of Management—General Confederation of Executives (Confédération française de l’encadrement—Confédération générale des cadres); • “Collateral” refers to first-priority security interests in (i) the ordinary shares of Kaufman & Broad S.A. held by the Issuer and (ii) until the first interest payment date on the Notes, the Designated Bank Account, each as further described in “Description of the Notes—Security;” • “Company” or “K&B” refers to Kaufman & Broad S.A., a société anonyme organized and established under the laws of France, having its registered office at 127, avenue Charles de Gaulle, 92207 Neuilly-sur-Seine, France, registered in France under sole identification number 702 022 724 RCS Nanterre; • “DDE” refers to the Departmental Office of Infrastructure (Direction départementale de l’équipement); • “Design Spaces” refers to showrooms where our customers can see, select and purchase the options offered in our designs; • “Designated Bank Account” refers to a designated bank account of the Issuer containing a portion of the proceeds of the Offering corresponding to the amount of interest payable on the Notes for the first interest period; • “DRAC” refers to the French Regional Directorate of Cultural Affairs (Direction régionale des affaires culturelles); • “Duflot Law” refers to the French tax incentive scheme adopted pursuant to the French Finance Law for 2013 number 2012-1509 of December 29, 2012, which succeeded as from January 1, 2013 to the Scellier Law and that is targeted at buy-to-let investors purchasing energy efficient new-build properties in certain areas of France to be rented out in accordance with certain conditions; • “ECLN” refers to the New Housing Sales Study (Enquête sur la commercialisation des logements neufs), which is conducted quarterly by the French Ministry of Housing; • “EEA” refers to the European Economic Area; • “EHU” refers to equivalent housing units; • “ENL Law” refers to the French Law number 2006-872 of July 13, 2006 on national housing commitment (loi portant engagement national pour le logement); • “EU” refers to the European Union; • “euro,” “€” or “EUR” refers to the single currency of the Member States of the European Union participating in the third stage of the economic and monetary union pursuant to the Treaty on the Functioning of the European Union, as amended or supplemented from time to time;

• “Existing FG8 Senior Facilities” refers to Facility B1, Facility B2, Facility C1, Facility C2, the HoldCo Hedging Debt and the HoldCo Revolving Facility (each as defined in the Existing Senior Facilities Agreement) available to the Issuer pursuant to the Existing Senior Facilities Agreement, which will be repaid in full with the proceeds of the Offering and cancelled;

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• “Existing K&B Senior Facilities” refers to Facility B3, Facility B4, Facility C3, Facility C4, the Capex/Acquisition Facility and the Target Revolving Facility (each as defined in the Existing Senior Facilities Agreement) available to K&B pursuant to the Existing Senior Facilities Agreement, which will be refinanced under the New Senior Facilities Agreement; • “Existing Senior Facilities Agreement” refers to the agreement dated July 9, 2007, as amended on July 27, 2007, January 23, 2009, June 30, 2009, November 25, 2009, March 10, 2010, July 25, 2011 and October 17, 2012, entered into by, among others, the Issuer and the Company as borrowers and guarantors, Calyon and Merrill Lynch International as Mandated Lead Arrangers and Bookrunners, and Calyon as agent, security agent and issuing bank; • “Facility A” refers to Facility A of the New Senior Credit Facilities, which will provide for €50.0 million aggregate principal amount and be repayable in nine instalments due every six months, commencing on March 31, 2015, as further described under “Description of Other Indebtedness—New Senior Facilities Agreement;” • “Facility B” refers to Facility B of the New Senior Credit Facilities, which will provide for €100.0 million aggregate principal amount and be repayable on the termination date, which will be the date falling five years after the Issue Date, as further described under “Description of Other Indebtedness—New Senior Facilities Agreement;” • “FD10” refers to Financière Daunou 10 S.à r.l., a société a responsabilité limitée incorporated under Luxembourg law with its registered office at 5 rue Guillaume Kroll, L-1882 Luxembourg, and registered under number B 122 738 with the Luxembourg Trade and Companies Register (Registre de Commerce et des Sociétés); • “FG8” or “Financière Gaillon 8” refers to Financière Gaillon 8 S.A., a société anonyme organized and established under the laws of France, having its registered office at 232, rue de Rivoli, 75001, Paris, France, and registered in France under sole identification number 497 658 377 RCS Paris; • “financial year” refers to any year beginning December 1 and ending on November 30; • “FNAIM” refers the French Real Estate Agents Federation (Fédération nationale des agents immobiliers); • “FPI” refers to the French Federation of Real Estate Developers (Fédération des promoteurs immobiliers); • “GDP” refers to gross domestic product; • “GFA” refers to a performance bond (Garantie financière d’achèvement); • “GIE” refers to an Economic Interest Grouping (Groupement d’intérêt économique); • “Group” refers to the Issuer and its consolidated subsidiaries; • “IASB” refers to the International Accounting Standards Board; • “IFRS” refers to the International Financial Reporting Standards, as adopted by the EU; • “IMF” refers to the International Monetary Fund; • “Indenture” refers to the indenture governing the Notes, dated the Issue Date, between, inter alios, the Issuer, the Trustee and the Security Agent; • “Initial Purchasers” refers to Goldman Sachs International, Credit Suisse Securities (Europe) Limited, Crédit Agricole Corporate and Investment Bank, Natixis and Banco de Sabadell, S.A.;

• “INSEE” refers to the French National Institute for Statistics and Economic Studies (Institut national des statistiques et des études économiques); • “IPO” refers to an initial public offering; • “Issue Date” refers to March 31, 2014; • “Issuer” refers to FG8;

• “K&B Shares” refers to the shares of the Company pledged by the Issuer under the K&B Share Pledge; • “K&B Share Pledge” refers to the first-priority security interest in the ordinary shares of Kaufman & Broad S.A. held by the Issuer; • “Kaufman & Broad” refers to the Company and its consolidated subsidiaries; • “KB Home” refers to a homebuilding company based in the United States, founded in 1957 as Kaufman & Broad in Detroit, Michigan; • “LBO” refers to a leveraged buy-out; • “LMNP” means non-professional lessor of furnished accommodation (loueur meublé non professionnel), which status confers certain rights under the French Scellier-Bouvard tax incentive scheme; • “Neiertz Law” refers to a French consumer protection regime adopted pursuant to law number 89-1010 of December 31, 1989 on the prevention and settlement of difficulties related to the over-indebtedness of individuals and households; • “New Revolving Credit Facility” refers to the new €50.0 million senior revolving credit facility to be made available to the Company during the relevant availability period, pursuant to the New Senior Facilities Agreement; • “New Senior Credit Facilities” refers to the new €150.0 million senior term credit facilities to be made available to the Company on the Issue Date, pursuant to the New Senior Facilities Agreement; • “New Senior Facilities Agreement” refers to the new senior credit facilities agreement dated on or about March 19, 2014, entered into by, among others, the Company, as sole borrower, Kaufman & Broad Homes S.A.S. and Kaufman & Broad Europe S.A.S. as guarantors, Banco de Sabadell, S.A., Banque Européenne du Crédit Mutuel, CA-CIB, Credit Suisse International, Goldman Sachs International and Natixis as mandated lead arrangers, CA- CIB as agent and security agent and certain financial institutions as lenders; • “PAI Partners” or “PAI” refers to PAI Partners S.A.S., a major European private equity firm that manages and advises private equity funds with a total equity value of approximately €4 billion; • “PAP” refers to a French home ownership assistance loan (prêt aidé pour l’accession à la propriété); • “Pass-Foncier” refers to a French loan assistance scheme for homebuyers effective until 2011 that preceded the PTZ+; • “Passive House” refers to a vigorous, voluntary standard for energy efficiency that reduces a building’s ecological footprint and results in ultra-low energy homes that require little energy for space heating or cooling; • “PLU” refers to a Local Urbanism Plan (Plan local d’urbanisme); • “Preference Share Repurchase” refers to the Issuer’s repurchase of 216,839,458 preference shares from CA- CIB described herein under “Summary—The Transactions—Preference Share Repurchase;” • “PTZ 2010” refers to a French Zero-Interest Loan scheme for first-time homebuyers that preceded the PTZ+;

• “PTZ+” refers to a French Zero-Interest Plus Loan (Prêt à taux zéro renforcé) offered to first-time homebuyers of new build properties; • “Refinancing” refers to the refinancing of the Existing K&B Senior Facilities under the New Senior Facilities Agreement; • “Regions” refers to the regions of France outside of Île-de-France in which we conduct our business; • “RFT” refers to a request for tenders; • “RPP” refers to a Risk Prevention Plan; • “RT 2012” refers to the French 2012 thermal regulations (réglementation thermique 2012);

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• “Sarkozy Law” refers to the French tax incentive scheme provided for by Law number 2007-1223 of August 22, 2007, pursuant to which a tax credit on interest-bearing loans was awarded to homebuyers over a certain period of time when such loans had been granted to enable purchasers to acquire property as a primary residence; • “Scellier Law” refers to the French tax incentive scheme adopted pursuant to the Amended Finance Law for 2008 number 2008-1443 of December 30, 2008, that is targeted at buy-to-let investors purchasing new-build properties to be rented out in accordance with certain conditions; • “SCI” refers to a French real estate investment company (société civile immobilière); • “SCOT” refers to a French Territorial Coherence Scheme (Schéma de cohérence territoriale); • “Security Agent” refers to The Law Debenture Trust Corporation p.l.c.; • “SMCI” refers to Société de Missions et de Coordinations Immobilières, a company specialized in the construction of apartments in large French cities (Paris, Marseille, Lyon, Strasbourg, Rouen and Besançon) acquired by Kaufman & Broad in August 1997; • “SOeS” refers to the French Observation and Statistics Service (Service de l’observation et des statistiques); • “sq.m” refers to square meters; • “SRU Law” refers to the French Law number 2000-1208 of December 13, 2000 on solidarity and urban renewal (loi relative à la solidarité et au renouvellement urbains), which governs town planning, the functioning of co- ownership and the protection of potential non-professional buyers, including through a mandatory seven-day cooling off period for homebuyers; • “SSW” refers to stock subscription warrants; • “take-up period” refers to the average number of months required to sell available units, calculated as the average of (i) the number of units available for sale at the beginning of the quarter and (ii) the number of units available for sale at the end of the quarter divided by the average monthly number of orders placed during the quarter; • “take-up rate” refers, on a monthly basis, to net monthly orders divided by the average of inventory as of the start of the month and inventory as of the end of the month; • “TME” refers to the average yield on French government bonds (taux moyen des emprunts d’Etat); • “Transactions” refers to the Offering, the Refinancing and the Preference Share Repurchase described herein under “Summary—The Transactions;” • “Trustee” refers to The Law Debenture Trust Corporation p.l.c., in its capacity as trustee for the Notes; • “U.S. dollars,” “dollars” or “$” refers to the lawful currency of the United States;

• “U.S. Exchange Act” refers to the U.S. Securities Exchange Act of 1934, as amended; • “U.S. Securities Act” refers to the U.S. Securities Act of 1933, as amended; • “United Kingdom” refers to the United Kingdom of Great Britain and Northern Ireland; • “United States” or “U.S.” refers to the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia; • “VAT” refers to any value-added tax; • “VEFA” refers to the French vente en état futur d’achèvement contract scheme, which is a scheme that relies on fixed price instalment contracts for housing units sold before completion; • “we,” the “Group,” “our” and “us” refers to the Issuer and its consolidated subsidiaries; and • “ZAC” refers to an urban development zone (zone d’aménagement concerté).

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EXCHANGE RATE INFORMATION The tables below set forth, for the periods and dates indicated, the period end, average, high and low exchange rates, as published by Bloomberg Composite Rate (London), expressed in U.S. dollars per €1.00. The Bloomberg Composite Rate is a “best market” calculation, in which, at any point in time, the bid rate is equal to the highest bid rate of all contributing bank indications and the ask rate is set to the lowest ask rate offered by these banks. The Bloomberg Composite Rate is a mid- value rate between the applied highest bid rate and the lowest ask rate. The below rates may differ from the actual rates used in the preparation of our consolidated financial statements and the other financial information appearing in these Listing Particulars. Our inclusion of these exchange rates is not meant to suggest that the euro amounts actually represent such U.S. dollar amounts, or that such amounts would have converted at a particular rate, if at all. The Bloomberg Composite Rate of the euro on March 25, 2014 was $1.3827 per €1.00.

U.S. dollars per €1.00

Year High Low Average(1) Period End

2008 ...... 1.5990 1.2452 1.4697 1.3953 2009 ...... 1.5094 1.2543 1.3952 1.4331 2010 ...... 1.4510 1.1952 1.3211 1.3366 2011 ...... 1.4874 1.2925 1.3998 1.2960 2012 ...... 1.3463 1.2053 1.2911 1.3197 2013 ...... 1.3804 1.2772 1.3300 1.3789 2014 (through March 25, 2014) ...... 1.3925 1.3505 1.3700 1.3827

U.S. dollars per €1.00

Month High Low Average(2) Period End

July 2013 ...... 1.3280 1.2792 1.3083 1.3276 August 2013 ...... 1.3420 1.3204 1.3315 1.3204 September 2013 ...... 1.3531 1.3127 1.3354 1.3531 October 2013 ...... 1.3804 1.3498 1.3639 1.3599 November 2013 ...... 1.3596 1.3367 1.3492 1.3586 December 2013 ...... 1.3803 1.3551 1.3708 1.3789 January 2014 ...... 1.3766 1.3505 1.3620 1.3505 February 2014 ...... 1.3808 1.3517 1.3668 1.3808 March 2014 (through March 25, 2014) ...... 1.3925 1.3733 1.3846 1.3827

(1) The average of the closing Bloomberg Composite Rate on the last business day of each month during the relevant period.

(2) The average of the closing Bloomberg Composite Rate on each business day during the relevant period.

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SUMMARY This summary highlights information from these Listing Particulars. This summary is not complete and does not contain all of the information that you should consider before investing in the Notes. You should read these Listing Particulars carefully in their entirety, including the sections entitled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Industry” and “Business,” as well as the English translation of our audited consolidated financial statements and the notes thereto included elsewhere in these Listing Particulars.

Our Company We are the third-largest residential real estate developer in France by revenue and order volume, with a market share of 6.1% based on order volume in the financial year ended November 30, 2013. Over the course of our more than forty years of experience developing and building apartments, single-family homes, serviced accommodations and commercial property in France, we have built approximately 98,200 Housing units and 522,200 sq.m of office and commercial space in metropolitan France. We are involved in all aspects of the real estate development process, including land sourcing, obtaining building permits, project design, customer service and property sales. Construction for our programs is carried out by a general contractor or separate specialized contractors. We focus primarily on developing residential apartment units, as apartments have historically represented the largest, fastest growing and most stable segment of the French residential real estate market and have demonstrated sustained price resiliency. Sales of apartments accounted for 89.6% of our revenues in the financial year ended November 30, 2013. Our remaining revenues were derived from single-family home sales, commercial programs, Showroom services and certain other activities, which accounted for 4.7%, 5.0%, 0.6% and 0.1%, respectively, of our revenues in the financial year ended November 30, 2013. In the financial year ended November 30, 2013, we had €1,026.0 million in total revenues, and our Adjusted EBITDA amounted to €93.1 million. We have structured our business model to minimize risks often associated with residential real estate development businesses, notably by securing land option contracts rather than building up land banks and by purchasing land in most cases only after achieving at least 50% pre-sale rates in our Housing segment and 100% pre-sale rates in our Commercial property segment. We do not purchase land for speculative purposes. Our operations are divided into three business segments: “Housing,” “Commercial property” and “Other operating activities.” Housing, which is our core segment and includes the development of apartments (including mixed-use buildings containing apartments, business premises, retail space or offices), single-family homes in communities (grouped homes) and serviced accommodations for corporate clients, tourists, students and independent seniors, accounted for 94.3% of our revenues in the financial year ended November 30, 2013. Our Commercial property business accounted for 5.0% of our revenues in the financial year ended November 30, 2013. Our Other operating activities segment includes certain business activities related to the Housing segment, including land and building lot sales, project management and additional housing services known as Showroom services. Our Other operating activities segment accounted for 0.7% of our revenues in the financial year ended November 30, 2013. Our strategy is to focus predominantly on first-time buyers, while we continue to develop products aimed at investors under separate incentives. In the financial year ended November 30, 2013, approximately 27% of our orders were from first- time buyers, accounting for 33% of our revenues, and 38% were from investors, accounting for 34% of our revenues. For the same period, block buyers, consisting of institutional investors and public-housing operators, accounted for 27% of orders and 20% of revenues and second-time homebuyers accounted for 8% of orders and 14% of revenues. We are also expanding our serviced accommodations for corporate clients, tourists, students and independent seniors, as well as our public-housing initiatives in urban renewal areas.

Our Competitive Strengths We believe that our key strengths include the following:

Attractive residential real estate market with favorable demographics and market characteristics We benefit from currently favorable trends in national demographics and market characteristics. All of our operations are located in France, which has had one of the fastest population growth rates in Western Europe according to data published by INSEE. Between 1990 and 2010, the number of French households grew by approximately 27%. Furthermore, according to data published by Eurostat in 2011, France has a relatively low home ownership rate of 63% compared to the average 1

home ownership rate across the European Union of 71% and suffers from a significant national shortage of housing inventory. We believe we are well positioned to capture market demand.

Third-largest player with strong competitive position We are the third-largest residential real estate developer by order volume in France. As of November 30, 2013, we accounted for approximately 6.1% of the residential real estate market based on order volume. We believe we are well- positioned in the regions of France with the most attractive demographics and, in particular, in the country’s most economically productive region, Île-de-France. In the financial year ended November 30, 2013, 42.1% of our total revenues were derived from activities in Île-de-France. We estimate that we are one of the largest real estate developers of single- family homes and apartments in Île-de-France, with a market share of 12.0% for single-family homes and 11.1% for apartments in 2013, based on order volume. We believe that we are among the largest real estate developers of single-family homes and apartments in Midi-Pyrénées, with market shares of 16.5% and 9.6% in 2013, respectively, and one of the largest real estate developers of apartments in the West (Pays de la Loire and Brittany), with a market share of 9.3% in 2013, in each case based on order volume. We believe our size and leading market positions facilitate access to land and allow us to obtain better prices and delivery terms from our contractors, for whom we are a major repeat customer. We also attribute our leading position to our in-depth knowledge of local markets and long-standing relationships with key decision makers, which we have developed over our more than 40 years of operations, as well as our strong track record of managing the entire value chain, from project design and pre-sale to land sourcing and construction.

Strong reputation and brand recognition We have a strong reputation among customers and within the industry for the timely construction of high-quality, innovative homes. According to a TNS Sofres survey conducted in 2012 that we commissioned, Kaufman and Broad was the most prestigious brand among French home builders. We market our apartments and single-family homes under the “Kaufman & Broad” brand or, in Grenoble, under the “Résidences Bernard Teillaud” brand through both in-house and third- party sales agents. We believe our operational excellence throughout all stages of the real estate development and sales process, high standards of customer care and value-added services, have each contributed to our strong reputation and brand recognition. Following the purchase of land, we proactively monitor and control construction costs and product quality. With respect to sales and customer service, we offer customers comprehensive service from the moment they sign an order contract to delivery of their property. We provide each customer with a single point of contact to manage all phases of the purchase process, from assisting with financing and obtaining customer deposits to the execution of deeds of sale. After the execution of a notarized deed of sale, our customer service department provides customers with information on their new home, moving and other general enquiries. Our showrooms provide homebuyers the opportunity to customize their homes. We believe that our dedication to personalized service allows us to strengthen our brand perception and increase our brand recognition.

A diversified and resilient profile We have a balanced customer portfolio, with investors representing 38%, institutional investors and public housing operators representing 26%, first-time buyers representing 27% and second-time homebuyers representing 9% of our orders in the financial year ended November 30, 2013. Because we have a diverse customer base we are less dependent on any of our customer segments. For example, we believe that our strong presence in the first-time homebuyer market has allowed us to manage fluctuations in demand in the investor market. We have demonstrated our ability to maintain our competitiveness through difficult economic conditions by adapting our product offerings to meet the changing needs of our customers. Most notably, prior to the 2008 financial crisis our primary customer base was second-time homebuyers. In response to reduced demand in this segment, we revised our development strategy by offering smaller units at lower prices, in order to appeal to first-time homebuyers. In recent years, first-time homebuyers have accounted for a greater percentage of orders than second-time homebuyers across our product portfolio. We have also expanded our Commercial property offerings to meet our Commercial property customers’ evolving needs.

Conservative risk management policies We have developed effective procedures to manage business risks associated with real estate development and sales. Since September 1, 1999, we have marketed almost all of our programs under VEFA (Vente en l’état futur d’achèvement contracts) sales contracts. The VEFA scheme provides a significant benefit to French real estate developers, including us, by allowing collection of payments from customers as construction progresses, thereby reducing working capital requirements and our overall risk profile. Most of the operating expenses associated with a particular development can be offset against the payments we receive from customers pursuant to the VEFA scheme. In our Housing business, we typically develop land in phases, which enables us to adjust the development timetable and marketing strategies based on the pace of sales. Furthermore, we have implemented real estate research and land purchase review processes to minimize the risk of buying land that we cannot subsequently develop successfully. We have teams specializing in real estate research that study the administrative, financial, legal, marketing and technical aspects of property that we consider acquiring. Our Land Committee and Commitment Committee in turn assess the strategic value of potential programs on an ad hoc basis. Contrary to prevailing market practice in other countries, French real estate developers, including us, have the ability to acquire land through option contracts rather than having to accumulate a land bank. Our policy is to always sign conditional purchase agreements and we do not buy land for speculative purposes. Furthermore, we generally do not exercise our options to purchase land before we have obtained the necessary administrative approvals and building permits, reviewed and determined the anticipated profitability of a program and reached a minimum pre-sale target, which in most cases is 50% for our Housing programs and 100% for our Commercial property programs.

Solid financial performance with operational flexibility We have a track record of strong free cash flow generation and de-leveraging. We have low levels of capital expenditure, totaling €3.1 million in the financial year ended November 30, 2013 compared to €4.0 million and €4.9 million in the financial years ended November 30, 2012 and 2011, respectively. Furthermore, from 2011 to 2013, we decreased our consolidated net leverage ratio (defined as the ratio of gross financial debt minus cash and cash equivalents to Adjusted EBITDA) from 4.7:1.0 to 3.9:1.0 and the Company reduced its total net debt by 69.4% from €163.7 million as of November 30, 2011 to €50.0 million as of November 30, 2013. Our backlog data provides near-term visibility of anticipated future revenues. Our Housing backlog represents all homes subject to a conditional order contract and the portion of any homes subject to a notarized deed of sale to the extent not yet completed and recognized as revenue. As of November 30, 2013, our Housing backlog totaled €965.1 million, which represented 12 months of revenues. Furthermore, as of November 30, 2013, we signed conditional purchase agreements to acquire land totaling approximately 970,000 sq.m in surface area, on which we expect to be able to build approximately 15,000 units, including apartments, single-family homes and commercial and other units, which corresponds to approximately three years of potential activity. We believe that our ability to monitor and analyze near term revenues allows us to identify risks and opportunities on an on-going basis which, in turn, positions us well to modify our business plan to address changing market conditions as the need arises. In addition, as we operate our business with low fixed costs (our cost of sales primarily relate to land acquisition costs, construction costs, program marketing costs and commissions and wages for sales staff), we can limit our costs of sales during a downturn by reducing the number of program starts. After accounting for programs and other commitments already underway, we estimate that we can generally see the benefits of a more conservative development strategy within one year of its implementation. We maintain flexibility to proactively manage our development activities and programs in a downturn. For example, following the 2008 financial crisis, deteriorating consumer credit conditions resulted in markedly lower Housing orders. In response, we reduced development activity, redesigned our existing programs to meet new market conditions and focused on clearing existing inventory, including through the reduction of Housing prices. As a result, while the Company’s current operating profit fell by 71.8% to €25.0 million in the financial year ended November 30, 2009 from €88.5 million in the financial year ended November 30, 2008, operational cash flow increased by 81.3% to €217.6 million in the financial year ended November 30, 2009, from €120.0 million in the financial year ended November 30, 2008. As market conditions slowly improved in 2010, we increased development activities and new program generation, which resulted in the Company’s current operating profit more than doubling from €25.0 million in the financial year ended November 30, 2009 to €66.7 million in the financial year ended November 30, 2010 while our operational cash flow settled back down to €92.4 million.

Additionally, since the financial crisis of 2008, we have adopted a more conservative stance towards our pre-sale target for Housing programs by increasing our sales target from 20-30% as of 2007 to 50% as of 2013. This policy change has helped reduce risks associated with our operations and contributed to the decline in the Company’s working capital requirements, as a percentage of revenue, from 31.5% as of November 30, 2007 to 12.4% as of November 30, 2013. While backlog data provides some visibility of future revenues, there is no assurance that anticipated revenue will be recognized in accordance with our backlog data. Anticipated revenues from Housing units under construction are not assured because we may not have signed notarized deeds of sale or, in some cases, purchased the land on which we plan to build the program at the time such anticipated revenues are included in backlog.

Experienced management team with knowledge of local markets Our senior management team has extensive experience in the homebuilding industry and a solid track record of navigating successfully through various economic cycles, with an average of over 10 years of experience in the markets in which we operate. With the support of teams specializing in the administrative, financial, legal, marketing and technical aspects of property development, our management team has developed an in-depth knowledge of our local markets. Our market expertise supports our ability to (i) identify and acquire attractive sites on favorable terms, (ii) design and develop products tailored to changing demand and (iii) manage effectively our relationships with local authorities, construction companies and subcontractors.

Our Strategy We seek to distinguish ourselves from our competitors and to increase our revenues and operating income through the following core business strategies:

Leverage strong brand recognition and reputation We believe our strong brand recognition and reputation have played a key role in our success. For nearly 40 years, we were a subsidiary of KB Home, one of largest and most recognized homebuilding companies in the United States, which enabled us to become a reputable and widely recognized real estate developer in France. According to a TNS Sofres survey conducted in 2012 that we commissioned, Kaufman and Broad was the most prestigious brand among French home builders. We intend to continue to build on our prestigious brand reputation by providing high-quality, innovative products that are tailored to our customers’ needs and implement the latest technologies in both construction and design. We will continue to conduct periodic market research to identify prospective customers’ needs, general changes in consumer preferences and other factors homebuyers may consider when purchasing a home, which we believe will enable us to maintain overall customer satisfaction and our brand reputation. We plan to continue investing in multi-platform advertising campaigns to enhance our brand image and promote our progress. Our strategy of further strengthening our brand recognition and reputation is designed to enhance customer loyalty and to promote referrals and repeat purchases from existing customers.

Focus on high-growth regions We will continue to build our land and property portfolio and presence in major French cities where we believe the local economy can support a sizeable pool of potential customers with reliable sources of income. In addition to our presence in Île-de-France, we also focus on the Atlantic and Mediterranean coastal regions, which have had the highest growth rates and provided the best development prospects for several years and which we believe are generally less sensitive to economic cycles. Although historically our core market has been Île-de-France, the share of our total revenues generated in the Regions increased to 57.9% in the financial year ended November 30, 2013, compared to 55.3% in the financial year ended November 30, 2012. We will seek to identify geographical regions with growth potential and where we believe we can become a market leader by leveraging our brand and industry expertise. For example, in May 2013, we expanded our business to Lille in the Nord-Pas-de-Calais region by acquiring Flandres Promotion, which we believe will enable us to develop our operations and presence in that region. In the past, we have expanded our operations and presence through selective acquisitions in regions in which we have not previously been active, including Marseille, Toulouse, Montpellier and Grenoble among others. We plan to continue to build on our strong market share within the apartment units segment in these regions, while also selectively expanding our single-family home operations outside of Île-de-France.

Maintain commitment to home ownership by expanding our affordable housing offerings We plan to remain committed to home ownership despite difficult macroeconomic challenges by continuing to develop programs that target first-time buyers, who benefit from the new “PTZ+” scheme, and investors, who benefit from the new Duflot Law incentive that was implemented in January 2013. To achieve this, we intend to develop lower-cost programs and programs in ANRU (urban renewal) areas, which benefit from a reduced VAT rate. ANRUs accounted for 423, or 7.9%, of our Housing orders in the financial year ended November 30, 2013, compared to 745, or 13.6%, of our Housing orders, in the financial year ended November 30, 2012. Following the 2008 financial crisis, our first-time buyer base has grown significantly. In response to worsened macroeconomic trends, we have adapted part of our offerings to provide housing that is more affordable while retaining high quality standards. Our goal is to offer housing units at competitive prices by building in areas that are farther away from town centers, but that are well served by public transportation links. We minimize land acquisition costs and construction costs by generally selecting flat land for our programs that does not require significant excavation and specially engineered foundations. In addition, the housing units embody our high quality construction standards and comply with RT 2012 energy efficiency requirements for new-builds. Finally, in connection with these more affordable programs, we generally seek to replace costly features with alternative solutions, including for example outdoor parking rather than basement parking. We have worked extensively on these designs and will continue to offer products that we believe provide desirable living settings, while maximizing space despite constraints imposed by more compact footprints. We will continue to reflect on ways to manage our value chain and optimize our technical costs to provide high quality housing and customer service at affordable prices. Finally, we intend to continue to help our customers meet the requirements of home purchase financing by maintaining partnerships with several banks, whose representatives are present at many of our sales offices to advise first-time buyers about the financing options available to them.

Develop additional sources of revenues We intend to selectively develop new products to broaden our revenue streams. We will carefully review demographic and sociological trends in France, including population statistics with respect to the aging French population and domestic migratory movements, the demand for serviced accommodation and student housing needs, to identify new opportunities.

First, we have begun once again to develop single-family homes in communities with, among other features, more contemporary architecture, in selected areas of Île-de-France, Provence-Alpes-Côte d’Azur and southwest France, where demand is currently high. Second, we are expanding our social housing programs. Traditional social housing programs, whereby we sell units to individuals, represented 14.8% of our orders by volume in the financial year ended November 30, 2013 (including programs in which we hold minority interests, such as certain joint venture programs). We are also considering whether to develop accessible housing programs, where an entire program is sold as a package to an institutional housing operator. Third, we will continue to broaden our student housing offerings. We believe the student housing market is characterized by favorable market dynamics due to the rise in the number of students attending French universities and the increasing average number of years devoted to higher education in France. The number of students attending French universities grew by 36.8% between 1990 and 2012 according to the Ministry of Higher Education and Research. Furthermore, according to the Observatoire de la Vie Étudiante, only 45% of students had access to rental housing in 2012. Fourth, we will continue to track the aging French population, which has prompted us to expand our serviced accommodations for independent seniors. Accordingly to INSEE estimates, more than 18%, or almost one-fifth of the French population will be over 65 years old by 2015 (9% of which is estimated to be over 75 years old). Serviced accommodation provides an attractive compromise between independent living and care homes. We intend to continue to develop our serviced accommodations in locations near urban centers to facilitate access to public transportation links, amenities and leisure centers, which we believe are important features for independent seniors who are considering purchasing serviced accommodations. Additionally, we recruited a director for serviced accommodations in 2013 to provide in-house support to local branches and serve as a point of contact for serviced accommodation managers. Finally, we are also expanding our Commercial property business. We will continue to strengthen our presence in the market and selectively develop large-scale, multipurpose commercial, hotel and housing complexes. We will continue to strive to meet the key requirements of (i) users, by designing high-quality spaces that provide a pleasant work environment; 5

and (ii) investors, by enhancing their investment through high-quality designs (upscale buildings) and space flexibility and adaptability. Our office property reserves amounted to almost 58,800 sq.m net floor area as of November 30, 2013, compared to 37,806 sq.m as of November 30, 2012.

Minimize operating and industry risks The French residential real estate market provides substantial opportunities for real estate developers to minimize operating risks that may not be available in other markets. For example, VEFA contracts enable us to collect payments from customers as construction progresses, thereby reducing working capital requirements and our overall risk profile. We intend to continue to take advantage of the VEFA scheme and other opportunities to mitigate industry risk and market cyclicality. We intend to continue to rely on our specialized research teams, Land Committee and Commitment Committee to assess the administrative, financial, legal, marketing, technical and strategic value of potential programs. We will continue to acquire land only through option contracts or conditional purchase agreements and not for speculative purposes. We will also generally continue to exercise our options to purchase land only when we have obtained the necessary administrative approvals and building permits, reviewed and determined the anticipated profitability of a program and reached a minimum pre-sale target, which in most cases is 50% for our Housing programs and 100% for our Commercial property programs. Furthermore, we continually review the craftsmanship, quality of construction and competitiveness of prices charged by our suppliers. We will continue to assess market conditions through economic downturns and, wherever possible, continue to negotiate fixed price contracts with our construction contractors, which enhances our cost and earnings visibility. We will continue to focus on relatively stable products and markets. In particular, we intend to continue developing apartment units, as apartments have historically represented the largest, fastest growing and most stable segment of the French residential real estate market and have demonstrated sustained price resiliency.

Sources and Uses The aggregate principal amount of the Notes is €370.0 million. The Issuer intends to use the gross proceeds from the Offering of the Notes to (a) repay in full its existing outstanding indebtedness under the Existing FG8 Senior Facilities, which amounts to €321.0 million, (b) prefund interest payable on the Notes for the first interest period and for general corporate purposes, (c) repurchase 216,839,458 preference shares from CA-CIB for a total purchase price of €17.0 million and (d) pay the costs, fees and expenses incurred in connection with the Offering, including underwriting commissions and fees for legal, accounting, printing, ratings advisory and other professional services. The following table illustrates the estimated sources and uses of the gross proceeds from the Offering of the Notes on the Issue Date. Actual amounts may vary from estimated amounts depending on several factors, including differences between estimated expenses and realized expenses related to the Offering.

Sources of Funds Amount Uses of Funds Amount

(in € millions) (in € millions) Notes offered hereby ...... 370.0 Repayment of Existing FG8 Senior Facilities(1) ...... 321.0

Cash on balance sheet(2) ...... 20.9

Preference Share Repurchase(3) ...... 17.0

Estimated fees and expenses(4) ...... 11.1

Total Sources ...... 370.0 Total Uses ...... 370.0

(1) Represents the €321.0 million in aggregate amount outstanding under Facility B1, Facility B2, Facility C1, Facility C2, the HoldCo Hedging Debt, the HoldCo Revolving Facility and the Mezzanine Agency Fee Debt (each as defined in the Existing Senior Facilities Agreement). As of the Issue Date, the principal amount outstanding, capitalized interest, maturity and applicable interest rate for each of these facilities will be as follows:

Principal Amount Facility Outstanding(a) Capitalized Interest(b) Maturity Interest rate(b)

(in € thousands) (in € thousands) Facility B1 ...... 48,986 3,004 July 10, 2015 8.00% Facility B2 ...... 70,434 4,320 July 10, 2015 8.00% Facility C1 ...... 49,159 3,015 July 10, 2016 8.00% 6

Principal Amount Facility Outstanding(a) Capitalized Interest(b) Maturity Interest rate(b)

(in € thousands) (in € thousands) Facility C2 ...... 70,670 4,334 July 10, 2016 8.00% HoldCo Revolving Facility ...... 33,129 2,032 July 10, 2015 8.00% HoldCo Hedging Debt ...... 30,039 1,842 July 10, 2015 8.00% Mezzanine Agency Fee Debt ...... 49 3 July 10, 2015 8.00%

Total ...... 302,468 18,551

(a) Includes interest capitalized as of June 30, 2013. On June 30, 2010 and at the end of each twelve-month period thereafter, pay-in-kind interest that had accrued in respect of each Issuer loan was capitalized and added to, and was deemed to be a part of, the principal amount of each such Issuer loan. (b) Amounts shown represent accrued and unpaid interest as of the Issue Date.

(2) Represents an amount available to prefund interest payable on the Notes for the first interest period and general corporate purposes. The obligations of the Issuer under the Notes will be secured, until the first interest payment date on the Notes, by a first-priority security interest in the Designated Bank Account, which will contain the portion of the proceeds of the Offering corresponding to the amount of interest payable on the Notes for the first interest period.

(3) Represents the amount that the Issuer will use to repurchase 216,839,458 preference shares from CA-CIB in connection with the Preference Share Repurchase. We will repurchase the 216,839,458 preference shares from CA-CIB after the Issue Date and these preference shares will be cancelled thereafter. CA-CIB will hold 465,180,900 preference shares after the Preference Share Repurchase, which will represent all of the preference shares of the Issuer at that time. See “Summary—The Transactions—Preference Share Repurchase.”

(4) Represents estimated costs, fees and expenses incurred in connection with the Offering, including underwriting commissions, fees for legal, accounting, printing, ratings advisory and other professional services. Principal Shareholders PAI is a leading pan-European private equity investment firm and the largest private-equity investor in France. It is one of the oldest and most experienced investors in Europe. Its origins date back to Paribas’ capital investment activity in 1872. PAI manages and advises private equity assets of nearly €5.8 billion. Since 1994, PAI has conducted 50 buyouts in ten European countries, for a total value in excess of €36 billion. PAI makes control-oriented investments through leveraged buyouts (“LBO”) by acquiring majority stakes in European medium- and large-sized companies and enjoys a leadership position in five core sectors.

The Issuer Financière Gaillon 8 S.A. is a société anonyme organized and established under the laws of France on April 30, 2007. The Issuer’s registered office is located at 232 rue de Rivoli, 75001 Paris, France. As of the date hereof, the issued share capital of the Issuer is €37,000 divided into 684,089,563 ordinary shares with equal nominal value.

The Transactions The Refinancing Contemporaneously with the Offering of the Notes and the application of the proceeds therefrom to repay in full the Issuer’s obligations under various credit facilities (the “Existing FG8 Senior Facilities”) governed by the Senior Facilities Agreement entered into on July 9, 2007, as amended (the “Existing Senior Facilities Agreement”), the Company’s obligations under separate credit facilities (the “Existing K&B Senior Facilities”) governed by the Existing Senior Facilities Agreement will be refinanced (the “Refinancing”) pursuant to a new credit facilities agreement (the “New Senior Facilities Agreement”). The New Senior Facilities Agreement will extend new senior term credit facilities (the “New Senior Credit Facilities”) and a new senior revolving credit facility (the “New Revolving Credit Facility”) to the Company. The New Senior Facilities Agreement will provide the Company with up to €200.0 million of borrowing availability, with €50.0 million aggregate principal amount available under a Facility A tranche (“Facility A”), €100.0 million aggregate principal amount available under a Facility B tranche (“Facility B”) and up to €50.0 million aggregate principal amount available under the New Revolving Credit Facility. The Company will draw the full amount available under each of Facility A and Facility B on the Issue Date and apply all amounts borrowed under the New Senior Credit Facilities, along with available cash, to fully repay debt outstanding under

the Existing K&B Senior Facilities, which amounted to €237.7 million as of November 30, 2013. The Company will not draw on the New Revolving Credit Facility on the Issue Date. As of the Issue Date, the New Senior Credit Facilities and the New Revolving Credit Facility will be guaranteed by Kaufman & Broad Homes S.A.S. and Kaufman & Broad Europe S.A.S. The New Senior Facilities Agreement does not contain any dividend restrictions prohibiting the Company from making payments to the Issuer, including for the purpose of enabling the Issuer to make principal or interest payments on the Notes. The New Senior Facilities Agreement is governed by French law except for the meaning of certain words or expressions in the definitions and provisions related to insolvency or used for the purpose of the incurrence covenants, which are construed in accordance with New York law. The terms of the New Senior Credit Facilities and the New Revolving Credit Facility are described in greater detail in “Description of Other Indebtedness—New Senior Facilities Agreement.”

Preference Share Repurchase On March 17, 2014, we agreed to repurchase 216,839,458 preference shares from CA-CIB for a total purchase price of €17.0 million (the “Preference Share Repurchase”). We will repurchase the 216,839,458 preference shares from CA-CIB after the Issue Date and these preference shares will be cancelled thereafter. CA-CIB will hold 465,180,900 preference shares after the Preference Share Repurchase, which will represent all of the preference shares of the Issuer at that time.

The completion of the Preference Share Repurchase and corresponding reduction in share capital are subject to certain conditions precedent, including: (i) the successful completion of the Offering and the application of a portion of the proceeds thereof to reimburse all of the Issuer’s outstanding debt under the Existing FG8 Senior Facilities; (ii) unanimous approval, by the extraordinary shareholders’ meeting of the Issuer and the special meeting of the preferred shareholders, of the share capital reduction and the prior capital increase to meet minimum capital requirements under French law; (iii) the amendment of our by-laws and of the shareholders’ agreement between the Issuer, FD10, PAI Partners and CA-CIB; and (iv) the absence of opposition to the share capital reduction by the Issuer’s creditors during a statutory 20-day period following the extraordinary shareholders’ meeting. Our agreement to repurchase preference shares from CA-CIB was memorialized in a heads of terms executed by the main shareholders of the Issuer on March 17, 2014. See “Description of Certain Related Party Transactions—Preference Share Repurchase Heads of Terms.”

Recent Developments Financial and operating performance for the three months ended February 28, 2014 We expect our revenue for the three months ended February 28, 2014 to be largely in line with our revenue for the three months ended February 28, 2013, which amounted to €205.0 million. We expect our gross margin for the three months ended February 28, 2014 to decrease compared to our gross margin for the three months ended February 28, 2013. This expected decrease is due mainly to lower margins realized on remaining units of certain older Housing programs in the Regions. Our first quarter revenues and gross margin are affected by seasonality factors. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Seasonality.” We received 1,085 Housing orders in the three months ended February 28, 2014, in line with the 1,083 Housing orders for the three months ended February 28, 2013. Our total orders in value amounted to €218.1 million (including VAT) in the three months ended February 28, 2014, up €24.1 million, or 12.4%, from €194.0 million (including VAT) in the three months ended February 28, 2013. We continue to expect that the historically low levels of orders recorded in the market for the past two years will be reflected in the operating income of our Housing operations during the financial year ending November 30, 2014. We also note that the launch of some of our programs was delayed due to municipal elections in France, which are scheduled to take place in March, 2014. The above information is based on preliminary results and is not intended to be a comprehensive statement of our financial or operational results for the three months ended February 28, 2014. This information has been prepared by, and is the responsibility of, management and has not been audited, reviewed or verified by our statutory auditors. Our preliminary results are based on a number of assumptions that are subject to inherent uncertainties and subject to change. In addition, while we believe these assumptions are reasonable, over the course of the next few weeks we will be completing our financial information for the three months ended February 28, 2014 and our actual results may vary from our preliminary results above. These variations could be material. As such, you should not place undue reliance on the preliminary information set 8

forth above. See “Risk Factors” for a more complete discussion of certain of the factors that could affect our future performance and results of operations.

SUMMARY CORPORATE AND FINANCING STRUCTURE Structure at the Closing of the Offering of the Notes The chart below depicts a summary of the Group’s corporate and financing structure immediately after the completion of the Transactions. For further information, see “Summary—The Transactions,” “Use of Proceeds” and “Capitalization.” For a summary of the material financing arrangements identified in this diagram, see “Description of Other Indebtedness” and “Description of the Notes.”

(1) Funds managed or advised by PAI Partners S.A.S. (“PAI Partners”) have invested in and hold 100% of the ordinary shares of Financière Daunou 10 S.à r.l. (“FD10”), the parent of the Issuer. (2) Together, members of management hold 24.6% of the ordinary shares of Financière de Neuilly S.A.S.

(3) After giving effect to the Transactions, FD10, an entity wholly owned by funds managed by PAI Partners and the direct parent of the Issuer, will hold 40.5% of the share capital of and 68.0% of the voting rights in the Issuer. FD10 also holds 75.4% of the ordinary shares of Financière de Neuilly S.A.S. as well as 0.69% of the ordinary shares of and 0.37% of the voting rights in the Company.

(4) After giving effect to the Transactions, Financière de Neuilly S.A.S., an investment vehicle established primarily to allow the management of the Company to invest in the Group, will hold 19.0% of the share capital of and 32.0% of the voting rights in the Issuer.

(5) After giving effect to the Transactions, CA-CIB will hold 465,180,900 preference shares in the Issuer, which will represent all of the preference shares of the Issuer. On March 17, 2014, the Issuer agreed to repurchase 216,839,458 preference shares held by CA-CIB for a total purchase price of €17.0 million (see “— The Transactions—Preference Share Repurchase”). CA-CIB (formerly Calyon) and ML IBK Positions Inc., each of which acted as a lender under the Issuer’s former mezzanine credit facilities, each received one half of the Issuer’s preference shares at the time of their issuance in 2009 as consideration for the full satisfaction and discharge of the Issuer’s outstanding debt obligations under the former mezzanine credit facilities. In 2011, CA-CIB purchased all preferred shares held by ML IBK Positions Inc. The preference shares, which carry no voting rights, grant CA-CIB certain rights upon the transfer of the Issuer’s equity interest in the Company. 10

(6) Represents €370.0 million Notes offered hereby. The obligations of the Issuer under the Indenture will be secured by first-priority security interests, subject to certain perfection requirements and any permitted collateral liens, in (i) the ordinary shares of Kaufman & Broad S.A. held by the Issuer and (ii) until the first interest payment date under the Notes, the Designated Bank Account. The proceeds from the Offering will be used to (a) repay in full the Issuer’s existing outstanding indebtedness under the Existing FG8 Senior Facilities, which amounts to €321.0 million, (b) prefund interest payable on the Notes for the first interest period and for general corporate purposes, (c) repurchase 216,839,458 preference shares from CA-CIB for a total purchase price of €17.0 million and (d) pay the costs, fees and expenses incurred in connection with the Offering, including underwriting commissions and fees for legal, accounting, printing, ratings advisory and other professional services. We will repurchase the 216,839,458 preference shares from CA-CIB after the Issue Date and these preference shares will be cancelled thereafter. CA-CIB will hold 465,180,900 preference shares after the Preference Shares Repurchase, which will represent all of the preference shares of the Issuer at that time.

(7) The Issuer is a société anonyme organized and established under the laws of France. In addition, the Issuer is a holding company with no significant business operations or assets other than the ordinary shares it holds in the Company. As of January 31, 2014, the Issuer held 87.95% of the ordinary shares of and 94.24% of the voting rights in the Company. The Notes will be secured by first-priority security interests in (i) the ordinary shares of Kaufman & Broad S.A. held by the Issuer and (ii) until the first interest payment date on the Notes, the Designated Bank Account.

(8) The Company’s common shares have been listed for trading on the Premier Marché of the Paris stock exchange (now NYSE Euronext) since February 7, 2000 under ISIN code FR0004007813. As of January 31, 2014, third party shareholders held 7.01% of the ordinary shares of and 4.79% of the voting rights in the Company. Among these, 2.01% of the ordinary shares of and 2.1% of the voting rights in the Company were held by a nominee of CACEIS (an affiliate of CA- CIB).

(9) Represents the €150.0 million New Senior Credit Facilities entered into by the Company on or about March 19, 2014 and governed by the terms of the New Senior Facilities Agreement. The New Senior Credit Facilities provide the Company with (i) €50.0 million aggregate principal amount of borrowing capacity under the Facility A tranche and (ii) €100.0 million aggregate principal amount of borrowing capacity under the Facility B tranche. The Company will use the proceeds from the €150.0 million New Senior Credit Facilities, along with available cash, to fully repay debt outstanding under the Existing K&B Credit Facilities. The maturity date for the New Senior Credit Facilities will be the date falling five years after the Issue Date. See “Description of Other Indebtedness— New Senior Facilities Agreement—New Senior Credit Facilities.”

(10) Represents the €50.0 million New Revolving Credit Facility entered into by the Company on or about March 19, 2014 and governed by the terms of the New Senior Facilities Agreement. The New Revolving Credit Facility provides the Company with, on a committed basis, up to €50.0 million of borrowing capacity that may be drawn by the Company from time to time. The Company does not intend to draw on its New Revolving Credit Facility on or shortly after the Issue Date. The maturity date for the New Revolving Credit Facility will be the date falling five years after the Issue Date. See “Description of Other Indebtedness— New Senior Facilities Agreement—New Revolving Credit Facility.”

(11) Each Company share normally entitles the holder to one vote. However, the Extraordinary Shareholders’ Meeting of January 21, 2000 granted double voting rights to all fully paid up shares that have been registered in the name of the same shareholder for at least two years (as well as to any shares resulting from such shares). As of January 31, 2014, 19,378,630 of the Company’s 21,584,658 outstanding shares, including the 18,962,000 shares in total held by the Issuer and FD10, carried double voting rights. See “Description of Certain Related Party Transactions—Incentive Programs—Stock subscription warrants.”

(12) As of January 31, 2014, 3.24% of the Company’s shares were held as treasury shares. Treasury shares are held either to cover the objectives presented in the description of the share buy-back plan, including stock options and bonus share plans, or as part of the liquidity contract the Company first signed in 2006, which entrusts Rothschild & Cie Banque with the implementation of a program designed to stimulate the secondary market in the Company’s shares. The contract complies with the Association française des marchés financiers’s Ethics Charter whose principles are recognized by the French Autorité des Marchés Financiers. As of November 30, 2013, the Company held 25 treasury shares under the liquidity contract, compared to 1,750 shares as of November 30, 2012.

(13) As of January 31, 2014, employees of the Company held 1.11% of the ordinary shares of and 0.60% of the voting rights in the Company via the Company savings plan.

(14) We currently have twelve operating subsidiaries, which are classified as cash generating units: (i) Kaufman & Broad Paris; (ii) Kaufman & Broad Île-de-France; (iii) Kaufman & Broad Sud-Ouest; (iv) Résidences Bernard Teillaud; (v) Kaufman & Broad Normandie; (vi) Kaufman & Broad Rhônes-Alpes; (vii) Kaufman & Broad Méditerranée; (viii) Kaufman & Broad Nantes; (ix) Kaufman & Broad Pyrénées-Atlantiques; (x) Kaufman & Broad Côte d’Azur; (xi) Kaufman & Broad Bretagne; and (xii) Kaufman & Broad Flandres. Cash generating units are homogeneous groups of assets, the continuous use of which generates cash inflows that are largely independent of the cash inflows generated by other groups of assets.

(15) Until November 30, 2013, in addition to our French subsidiaries, we had two foreign subsidiaries located in Belgium: Kaufman Development S.A. and Kaufman & Broad Europe S.A. Following the dissolution of Kaufman & Broad Europe S.A., a société anonyme with capital of €221,440,548, headquartered at Rue des Colonies 11, 1000 Brussels (Belgium), on November 30, 2013, we incorporated Kaufman & Broad S.A.S., a société par actions simplifiée, in France, with a head office in Neuilly-sur-Seine. As of the date hereof, all the subsidiaries in the Group are located in France with the exception of Kaufman Development S.A., which is located in Belgium. Our principal subsidiaries (Kaufman & Broad Homes S.A.S., Kaufman & Broad Développement S.A.S., Kaufman & Broad Nantes S.à r.l., Kaufman & Broad Normandie S.à r.l., Kaufman & Broad Rhône-Alpes S.à r.l., Kaufman & Broad Savoies S.à r.l., Résidences Bernard Teillaud S.à r.l., Kaufman & Broad Côte d’Azur S.à r.l., Kaufman & Broad Provence S.à r.l., Kaufman & Broad Méditerranée S.à r.l., Kaufman & Broad Languedoc- Roussillon S.à r.l., Kaufman & Broad Midi-Pyrénées S.à r.l., Kaufman & Broad Pyrénées Atlantiques S.à r.l., Kaufman & Broad Aquitaine S.à r.l., SM2I S.à r.l. and Kaufman & Broad Flandres S.à r.l.) supply our real estate subsidiaries with development, management, sales and marketing, and technical assistance services. As consideration, the companies providing such services receive a fee in accordance with contractual arrangements.

THE OFFERING The following summary of the Offering of the Notes contains basic information about the Notes and the Collateral. It is not intended to be complete and it is subject to important limitations and exceptions. For a more complete description of the terms of the Notes, including certain definitions of terms used in this summary, please see “Description of the Notes.”

Issuer Financière Gaillon 8 S.A. (the “Issuer”).

Notes Offered €370.0 million aggregate principal amount of 7.00% Senior Notes due 2019 (the “Notes”).

Issue Date March 31, 2014.

Issue Price 100.00% (plus accrued and unpaid interest from the Issue Date).

Interest Rate Interest on the Notes will be payable in cash. Interest on the Notes will accrue from the Issue Date at a rate of 7.00% per annum.

Maturity Date September 30, 2019.

Interest Payment Dates Interest is payable on the Notes semi-annually in arrears on each March 31 and September 30, commencing on September 30, 2014.

Denominations Each Note will have a minimum denomination of €100,000 and integral multiples of €1,000 in excess thereof.

Ranking of the Notes The Notes will: • be senior obligations of the Issuer and will rank pari passu in right of payment with all of the Issuer’s existing and future obligations that are not subordinated in right of payment to the Notes; • be secured by the Collateral on a first-priority basis, subject to certain perfection requirements and any Permitted Collateral Liens; • be senior in right of payment to any subordinated indebtedness of the Issuer; • be effectively senior in right of payment to any existing or future unsecured obligations of the Issuer, to the extent of the value of the Collateral that is available to satisfy the obligations of the Issuer under the Notes; • be effectively subordinated to the Issuer’s existing and future secured indebtedness that is secured by property or assets that do not secure the Notes, to the extent of the value of such property and assets securing such indebtedness; and • be structurally subordinated to any existing or future obligations of the Issuer’s subsidiaries.

The Notes will not be guaranteed by any of the Issuer’s subsidiaries, including the Company, on the Issue Date. As of November 30, 2013, after giving pro forma effect to the Transactions, the Issuer’s subsidiaries would have had total third-party gross financial debt of €150.6 million. See “Risk

Factors—Risks Related to Our Indebtedness and the Notes—The Issuer is a holding company that is dependent on the earnings and cash flows from our operating subsidiaries, which may not be sufficient to meet our financial obligations, including the Notes.”

Collateral On the Issue Date, subject to the terms of the related security documents certain perfection requirements and any Permitted Collateral Liens, the obligations of the Issuer under the Notes will be secured by first-priority security interests in (i) the ordinary shares of Kaufman & Broad S.A. held by the Issuer and (ii) until the first interest payment date on the Notes, a designated bank account of the Issuer containing a portion of the proceeds of the Offering corresponding to the amount of interest payable on the Notes for the first interest period (the “Designated Bank Account” and, together with the security interest in the ordinary shares of Kaufman & Broad S.A. held by the Issuer, the “Collateral”). The Collateral will be pledged, charged or assigned for security purposes in favor of the Security Agent.

The Collateral will be subject to significant contractual and legal limitations and may be released under certain circumstances. See “Description of the Notes—Security,” “Limitations on Validity and Enforceability of the Security Interests and Certain Insolvency Law Considerations” and “Risk Factors— Risks Related to Our Indebtedness and the Notes.” The lien and security interest on the Designated Bank Account will be released at the time of the first interest payment on the Notes.

Optional Redemption At any time prior to March 31, 2016, the Issuer may redeem all or part of the Notes at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the applicable “make-whole” premium set forth in these Listing Particulars, plus accrued and unpaid interest and Additional Amounts, if any.

At any time prior to March 31, 2016, the Issuer may redeem up to 40% of the original aggregate principal amount of the Notes (including Additional Notes) with the net cash proceeds from certain equity offerings at a redemption price equal to 107.00% of the principal amount thereof plus accrued and unpaid interest, if any, to the redemption date; provided that at least 60% of the original aggregate principal amount of the Notes (including Additional Notes) remain outstanding after the redemption.

At any time on or after March 31, 2016, the Issuer may redeem all or part of the Notes at the redemption prices set forth under the caption “Description of

the Notes—Optional Redemption,” plus accrued and unpaid interest to the redemption date. See “Description of the Notes—Optional Redemption.”

Additional Amounts All payments made by or on behalf of the Issuer under or with respect to the Notes will be made without withholding or deduction for, or on account of, any taxes unless required by law. If any deduction or withholding for, or on account of, any taxes imposed by or on behalf of a relevant taxing jurisdiction will be required by law from any payments made with respect to the Notes, the Issuer will pay such additional amounts as may be necessary so that the net amount received in respect of such payments by the holders of the Notes or the Trustee after such withholding or deduction will equal the amount which would have been received in respect of such payments in the absence of such withholding or deduction, subject to certain exceptions. See “Description of the Notes—Withholding Taxes.”

Redemption for Taxation Reasons In the event of certain developments affecting taxation, the Issuer may redeem the Notes in whole, but not in part, at any time, at a redemption price of 100% of the principal amount, plus accrued and unpaid interest, if any, and Additional Amounts, if any, to the date of redemption. See “Description of the Notes—Redemption for Taxation Reasons.”

Change of Control Upon the occurrence of certain events constituting a change of control, including if the Issuer sells all or substantially all the assets of the Group, the Issuer will be required to offer to repurchase the Notes at a purchase price equal to 101% of the aggregate principal amount of the Notes outstanding, plus accrued and unpaid interest and additional amounts, if any, to the date of the purchase. However, a change of control will not be deemed to have occurred on one occasion if a specified consolidated net leverage ratio is not exceeded as a result of such event. See “Description of the Notes—Change of Control,” “Description of the Notes—Certain Definitions—Change of Control” and “Description of the Notes—Certain Definitions—Specified Change of Control Event.”

Certain Covenants The Indenture will limit, among other things, our ability to: • incur or guarantee additional indebtedness and issue certain preferred stock; • pay dividends or make distributions on or in respect of our capital stock; • redeem or repurchase capital stock of the Issuer or its parents; • make certain restricted payments or investments; • prepay or redeem subordinated debt or equity; • create or incur certain liens; • impose restrictions on the ability of subsidiaries to pay dividends or make other payments to the Issuer; • transfer, lease or sell assets; • merge or consolidate with other entities; • enter into certain transactions with affiliates; and • impair the security interests in the Collateral.

Each of these covenants is subject to a number of important exceptions and

qualifications. See “Description of the Notes—Certain Covenants.”

Use of Proceeds The Issuer will use the gross proceeds from the Offering, to (a) repay in full its existing outstanding indebtedness under the Existing FG8 Senior Facilities, which amounts to €321.0 million, (b) prefund interest payable on the Notes for the first interest period and for general corporate purposes, (c) repurchase 216,839,458 preference shares from CA-CIB for a total purchase price of €17.0 million and (d) pay the costs, fees and expenses incurred in connection with the Offering, including underwriting commissions and fees for legal, accounting, printing, ratings advisory and other professional services. We will repurchase the 216,839,458 preference shares from CA- CIB after the Issue Date and these preference shares will be cancelled thereafter. CA-CIB will hold 465,180,900 preference shares after the Preference Share Repurchase, which will represent all of the preference shares of the Issuer at that time. See “Use of Proceeds.”

Transfer Restrictions The Notes have not been, and will not be, registered under the U.S. Securities Act or the securities laws of any other jurisdiction. The Notes are subject to restrictions on transfer and may only be offered or sold in transactions that are exempt from or not subject to the registration requirements of the U.S. Securities Act. See “Transfer Restrictions” and “Plan of Distribution.” 14

Absence of a Public Market for the Notes The Notes will be new securities for which there is currently no market. Although the Initial Purchasers have informed us that they intend to make a market in the Notes, they are not obligated to do so and they may discontinue market-making at any time without notice. Accordingly, we cannot assure you that a liquid market for the Notes will develop or be maintained.

Listing The Irish Stock Exchange has approved this document as Listing Particulars for purposes of the Notes being listed on the Official List of the Irish Stock Exchange and admitted to trading on the Global Exchange Market thereof.

Governing Law of the Indenture and Notes The State of New York.

Governing Law of the Security Documents France.

Trustee and Security Agent The Law Debenture Trust Corporation p.l.c.

Principal Paying Agent Deutsche Bank AG, London branch.

Registrar and Transfer Agent Deutsche Bank Luxembourg S.A.

Listing Agent The Bank of New York Mellon SA/NV.

Risk Factors Investing in the Notes involves substantial risks and prospective investors should refer to “Risk Factors” for a discussion of certain factors that they should carefully consider before deciding to invest in the Notes.

SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION AND OTHER DATA The following tables set forth certain summary historical consolidated financial information and other data of the Issuer and its subsidiaries as of the dates and for each of the periods indicated. Our consolidated financial statements have been prepared in accordance with IFRS. The Issuer is a holding company with no material operations of its own. The summary consolidated financial information as of and for each of the financial years ended November 30, 2011, 2012 and 2013 was derived from the English translation of the Issuer’s audited consolidated financial statements, which are included elsewhere in these Listing Particulars. We present below certain non-IFRS measures and ratios that are not required by or presented in accordance with IFRS, including EBITDA, Adjusted EBITDA, Adjusted EBITDA margin and certain leverage and coverage ratios, among others. There can be no assurance that items we have identified for adjustment as non-recurring will not recur in the future or that similar items will not be incurred in the future. The Non-IFRS Metrics are not measurements of financial performance under IFRS and should not be considered as alternatives to other indicators of our operating performance, cash flows or any other measure of performance derived in accordance with IFRS. The Non-IFRS Metrics as presented in these Listing Particulars may differ from and may not be comparable to similarly titled measures used by other companies and from “Consolidated EBITDA” contained in the section “Description of the Notes” of these Listing Particulars and the Indenture. The calculations for the Non-IFRS Metrics are based on various assumptions. This information is inherently subject to risks and uncertainties. It may not give an accurate or complete picture of our financial condition or results of operations for the periods presented and should not be relied upon when making an investment decision. See “Presentation of Financial and Other Information.” The historical data below is not necessarily indicative of results of future operations and should be read in conjunction with “Use of Proceeds,” “Capitalization,” “Selected Historical Consolidated Financial Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the English translation of our consolidated financial statements and the notes thereto, which are included elsewhere in these Listing Particulars.

Selected Consolidated Income Statement Data

For the year ended November 30,

2011 2012 2013

(in € thousands) Revenues ...... 1,044,255 1,030,046 1,025,954 Cost of sales ...... (847,278) (830,896) (830,011)

Gross margin ...... 196,977 199,150 195,943

Selling expenses...... (27,375) (29,242) (30,619) Administrative expenses ...... (62,233) (63,092) (65,192) Technical and customer service expenses ...... (15,634) (16,301) (18,052) Other expenses ...... (10,026) (9,326) (10,180) Other income ...... 1,395 951 3,170

Current operating profit ...... 83,104 82,140 75,070

Other non-recurring income ...... 1,734 1,538 5 Other non-recurring expenses ...... (952) (10) (6)

Operating income ...... 83,886 83,668 75,069

Financial expenses ...... (41,857) (30,831) (27,620) Financial income ...... 3,619 1,799 773

Cost of net financial debt ...... (38,238) (29,032) (26,848)

Other interest expense ...... (2,444) (1,699) — Other financial income...... 9,359 14,330 —

Pre-tax income of consolidated companies ...... 52,563 67,267 48,222

Income tax (expenses)/income ...... (26,707) (24,787) (21,675)

For the year ended November 30,

2011 2012 2013

(in € thousands) Net income of consolidated companies ...... 25,856 42,480 26,546

Share of income (loss) of equity affiliates and joint ventures ...... 955 (61) 642 Income/loss from assets held for sale ...... — — —

Income (loss) attributable to shareholders ...... 26,811 42,419 27,188

Minority interests ...... 15,165 13,571 14,838 Income attributable to shareholders ...... 11,646 28,848 12,350

Selected Consolidated Balance Sheet Data

As of November 30,

2011 2012 2013

(in € thousands) Goodwill ...... 144,370 144,370 144,370 Intangible assets ...... 82,874 84,761 85,240 Property, plant and equipment ...... 5,883 5,604 4,713 Equity affiliates and joint ventures ...... 3,473 4,373 8,181 Other non-current assets ...... 2,520 2,520 2,520 Other non-current financial assets ...... 2,551 1,262 20,139

Non-current assets ...... 241,671 242,890 265,163

Inventories ...... 239,869 285,798 325,466 Accounts receivable ...... 305,673 268,189 291,778 Other receivables ...... 141,235 143,147 136,809 Other financial receivables ...... 11,535 2,379 — Current tax ...... 36,971 34,601 16,611 Cash and cash equivalents ...... 141,106 155,787 190,321 Prepaid expenses ...... 817 1,021 880

Current assets...... 877,206 890,922 961,864

TOTAL ASSETS ...... 1,118,877 1,133,812 1,227,027

Shareholders’ equity ...... (94,750) (72,960) (59,123)

Non-current provisions ...... 24,434 24,535 33,436 Borrowings and other non-current financial liabilities ...... 601,063 522,302 530,840 Other non-current liabilities ...... 15,286 15,286 15,286 Deferred taxes ...... 36,687 56,042 40,538

Non-current liabilities ...... 677,470 618,165 620,100

Current provisions ...... — 1,000 1,724 Other current financial liabilities ...... 21,052 504 19,926 Accounts payable ...... 409,730 473,690 550,314 Other payables ...... 104,017 111,797 92,869 Deferred income ...... 1,357 1,616 1,217

Current liabilities ...... 536,156 588,607 666,050

TOTAL EQUITY AND LIABILITIES ...... 1,118,877 1,133,812 1,227,027

Selected Consolidated Cash Flow Data

As of and for the year ended November 30,

2011 2012 2013

(in € thousands) Cash flow from operating activities ...... 70,440 155,778 77,555 Cash flow from investing activities ...... 4,564 6,145 (21,450)

Free cash flow ...... 75,004 161,923 56,105 Cash flow from financing activities ...... (74,960) (147,242) (21,572)

Increase (decrease) in cash ...... 44 14,681 34,533 Cash at beginning of year ...... 141,062 141,106 155,787 Cash at end of year ...... 141,106 155,787 190,321

Market Data

For the year ended December 31,

France 2011 2012 2013

Macroeconomic data Gross domestic product growth ...... 2.0% 0.0% 0.3% Unemployment rate ...... 9.4% 10.2% 10.2% Average interest rate (Banque de France) ...... 3.8% 2.6% 2.3%

Housing market data Apartment orders(1) ...... 94,728 80,373 79,035 Single-family home orders(1) ...... 10,272 8,531 8,686 Apartment average price (€/sq.m) ...... 3,782 3,873 3,869 Single-family home average price (€) ...... 246,369 250,582 247,100

(1) Based on number of reservations.

Operating Data

For the year ended November 30,

Kaufman & Broad 2011 2012 2013

Revenues Apartment revenues (in € thousands) ...... 925,282 976,726 919,297 Single-family home revenues (in € thousands) ...... 58,148 23,933 48,221 Commercial property revenues (in € thousands) ...... 48,901 21,087 51,223

Orders Net Housing orders(1) ...... 6,408 5,487 5,379 Market share based on total Housing orders in France ...... 6.1% 6.2% 6.1% Average sale price of Housing orders ...... €211,700 €199,700 € 184,100

Deliveries (volume) Apartment deliveries (EHUs)(2) ...... 5,414 5,567 5,606 Single-family home deliveries (EHUs)(2) ...... 239 102 233 Housing deliveries (EHUs)(2) ...... 5,653 5,669 5,839 Commercial property deliveries (EHUs)(2) ...... 24 10 2

Deliveries (sale price) Average sale price per sq.m of apartments delivered (Île-de-France)(4) ...... €4,767 €4,324 €3,915 Average sale price per sq.m of apartments delivered (Regions)(4)...... €3,888 €4,050 €3,930 Average sale price of single-family homes delivered (Île-de-France)(3) ...... €301,771 €252,491 € 313,000 Average sale price of single-family homes delivered (Regions) ...... €266,945 €238,774 € 268,000

Backlog 18

For the year ended November 30,

Kaufman & Broad 2011 2012 2013

Total Housing backlog at end of period (EHUs)(2)(5) ...... 6,736 6,550 6,105 Total Housing backlog at end of period (in € thousands, excl. VAT)(5) ...... 1,160,381 1,091,105 965,142

Programs Programs being marketed at end of period(6) ...... 168 163 167

(1) Net Housing orders is the number of orders recorded during a given financial year, i.e., the number of orders signed by customers during the financial year less the number of canceled orders at the financial year-end. Orders in volume are expressed in units within the Group. Units define the number of housing units or equivalent housing units (for mixed-use programs) for any given program. Units are calculated on a per-program basis, with the following being considered as housing units: “apartments,” “single-family homes in communities” and “subdivisions and building lots.” Consequently, a housing unit (or lot) is equal to one unit.

(2) Apartment deliveries, single-family home deliveries, Housing deliveries and Commercial property deliveries directly reflect sales. “EHUs” refers to Equivalent Housing Units. The number of EHUs is calculated on a per-program basis and is equal to the product of (i) the number of homes for a given program for which the notarized deed of sale has been signed, multiplied by (ii) the ratio between the amount of the land and costs incurred by the Group for the program and the total budgeted costs for the program. Thus, a home sold under a program for which 30% of total costs have been incurred would result in an EHU of 0.3. (3) Average sale price of apartments delivered and average sale price of single-family homes delivered includes VAT.

(4) “sq.m” refers to square meters. Average sale price per sq.m of apartments delivered (Île-de-France) and average sale price per sq.m of apartments delivered (Regions) exclude exceptional items. Exceptional items represent atypical units, including for example unusually large apartments sold at high prices.

(5) For sales before completion (“VEFA” sales), backlog covers (i) all ordered units for which a notarized deed of sale has not yet been signed in connection with programs for which we have not yet purchased land; (ii) all ordered units for which a notarized deed of sale has not yet been signed in connection with programs for which we have purchased land; and (iii) the portion of ordered but undelivered units for which a notarized deed of sale has been signed that has not yet been recognized as revenue (for a unit program that is 30% complete, 30% is accounted for as sales, and 70% remains in the backlog). The backlog is a summary at any given moment, which gives a projection of future revenues for the coming months and serves as a basis for the Group’s forecasts. Because a portion of our backlog corresponds to units for which we have not yet signed a notarized deed of sale and, in some cases, for which we have not yet purchased the land on which the program will be located, we can give no assurances and provide no guarantee that anticipated revenue will be recognized in accordance with our backlog data. (6) Programs being marketed at end of period represent the number of programs that entered the marketing phase during the relevant financial year.

Other Financial Data

As of and for the year ended November 30,

2011 2012 2013

(in € thousands) EBITDA(1)(3) ...... 92,533 87,991 79,908 Adjusted EBITDA(2)(3) ...... 102,571 100,571 93,104 Adjusted EBITDA margin(3)(4) ...... 9.8% 9.8% 9.1% Amortization, depreciation and other non-cash elements(5) ...... 9,429 5,851 4,839 Capital expenditures(6) ...... 4,865 3,961 3,067 Total net debt of the Company(7) ...... 163,743 81,230 50,041 Total net debt of the Issuer(8) ...... 481,009 367,019 360,445 Distributable reserves of the Company(9)...... 101,297 124,884 204,850

(1) EBITDA represents income (loss) attributable to shareholders before amortization, depreciation and other non-cash elements, income tax (expenses) / income, cost of net financial debt, other interest expense, other financial income, other non-recurring income, other non-recurring expenses and share of income (loss) of equity affiliates and joint ventures. The following table provides a reconciliation of EBITDA to income (loss) attributable to shareholders for the periods indicated:

For the year ended November 30,

2011 2012 2013

(in € thousands) Income (loss) attributable to shareholders ...... 26,811 42,419 27,188 Amortization, depreciation and other non-cash elements(a) ...... 9,429 5,851 4,839 Income tax (expenses)/income ...... 26,707 24,787 21,675 Cost of net financial debt ...... 38,238 29,032 26,847 Other interest expense ...... 2,444 1,699 — Other financial income ...... (9,359) (14,330) — Other non-recurring income ...... (1,734) (1,538) (5) 19

For the year ended November 30,

2011 2012 2013

(in € thousands) Other non-recurring expenses ...... 952 10 6 Share of income (loss) of equity affiliates and joint ventures ...... (955) 61 (642)

EBITDA ...... 92,533 87,991 79,908

(a) Amortization, depreciation and other non-cash elements is calculated as follows for the periods indicated:

For the year ended November 30,

2011 2012 2013

(in € thousands) Amortization, depreciation and provision expenses (net of reversal) ...... 2,366 1,941 4,071 Fair value adjustment expensed to cost of sale(i) ...... 5,999 3,399 1,184 Impairment ...... — — — Retirement benefits, cost of services rendered ...... 73 101 209 Retirement benefits, benefits paid ...... (86) (376) (220) Free shares IFRS 2 expenses(ii) ...... 1,077 515 430 Net amount of fixed assets sold ...... — 271 449 Proceeds from disposal of fixed assets ...... — — (1,284)

Amortization, depreciation and other non-cash elements ...... 9,429 5,851 4,839

(i) A fair value adjustment corresponding to the expected performance of a specified set of programs was identified and allocated to inventories when the Issuer purchased the Company in 2007. It is expensed in cost of sales as and when these programs are completed or abandoned altogether on a percentage-of-completion basis and therefore in line with revenue recognition. (ii) Free shares IFRS 2 expenses represent expenses relating to our bonus share plans.

(2) Adjusted EBITDA represents EBITDA adjusted for certain items that management considers to be non-recurring, or exceptional in nature or otherwise not reflective of the ongoing performance of our business. The following table provides a reconciliation of Adjusted EBITDA to EBITDA for the periods indicated:

For the year ended November 30,

2011 2012 2013

(in € thousands) EBITDA ...... 92,533 87,991 79,908 Share of income (loss) of equity affiliates and joint ventures ...... 955 (61) 642 IAS 23 costs(a) ...... 6,714 10,089 9,506 CVAE(b) ...... 2,368 2,553 3,049

Adjusted EBITDA ...... 102,571 100,571 93,104

(a) IAS 23 costs represents the portion of financial expense that has been amortized in accordance with IAS 23 “Borrowing Costs.” These borrowing costs are reflected as an expense in gross margin but have a non-cash impact on the business. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies—IAS 23.”

(b) CVAE (Cotisation sur la Valeur Ajoutée des Entreprises) represents a tax based on the “added value”, a profitability measure used by the French tax authorities, generated by French entities. As permitted under IFRS, the Company has elected to classify CVAE amounts as operating expenses rather than as income tax expenses.

(3) We present EBITDA, Adjusted EBITDA, Adjusted EBITDA margin and other Non-IFRS Metrics for informational purposes only. See “Presentation of Financial and Other Information” and the introduction to this “Summary.” (4) Adjusted EBITDA margin, expressed as a percentage, represents Adjusted EBITDA divided by revenues. (5) Amortization, impairment and depreciation is calculated as described in Note (1)(a) above. (6) Capital expenditures represent the sum of acquisition of intangible assets and acquisition of property, plant and equipment.

(7) Total net debt of the Company represents the difference between (i) total gross financial debt of the Company and (ii) total cash and cash equivalents of the Company. (8) Total net debt of the Issuer represents the difference between (i) total gross financial debt of the Issuer and (ii) total cash and cash equivalents of the Issuer. (9) Distributable reserves of the Company represent retained earnings and net income of the Company, net of dividends declared in the period.

Unaudited Pro Forma and Other Selected Financial Data (in € millions except ratios)

For the year ended November 30, 2013

EBITDA(1) ...... 79.9 Adjusted EBITDA(2) ...... 93.1 Pro forma total net debt of the Company(3) ...... 54.9 Pro forma total net debt of the Issuer(4)(5) ...... 394.4 Pro forma net interest expenses(6)(7) ...... 32.5 Ratio of pro forma total net debt of the Company to Adjusted EBITDA ...... 0.6x Ratio of pro forma total net debt of the Issuer to Adjusted EBITDA(8) ...... 4.2x Ratio of Adjusted EBITDA to pro forma net interest expenses(9) ...... 2.9x Distributable reserves of the Company(10)(11) ...... 204.9 Ratio of distributable reserves of the Company to pro forma net interest expenses of the Issuer(12) 7.9x

(1) Ownership-adjusted EBITDA amounted to €72.6 million for the financial year ended November 30, 2013, calculated as the product of (x) total EBITDA for the Issuer multiplied by (y) the ratio of (i) the number of Company shares held by the Issuer and (ii) the total number of Company shares (net of treasury shares), in each case as of January 31, 2014.

(2) Ownership-adjusted Adjusted EBITDA amounted to €84.6 million for the financial year ended November 30, 2013, calculated as the product of (x) total Adjusted EBITDA for the Issuer multiplied by (y) the ratio of (i) the number of Company shares held by the Issuer and (ii) the total number of Company shares (net of treasury shares), in each case as of January 31, 2014.

(3) Pro forma total net debt of the Company represents gross financial debt minus cash and cash equivalents, as adjusted for the Transactions. Pro forma total net debt of the Company includes the New Senior Credit Facilities and other short-term debt. See “Capitalization.”

(4) Pro forma total net debt of the Issuer represents gross financial debt minus cash and cash equivalents, as adjusted for this Offering and the application of the gross proceeds therefrom. Pro forma total net debt of the Issuer includes the Notes offered hereby and other third-party financial debt. Pro forma total net debt of the Issuer excludes €8.1 million in accrued interest with respect to the Existing FG8 Senior Facilities between November 30, 2013 and March 31, 2014. See “Capitalization.”

(5) Ownership-adjusted pro forma total net debt of the Issuer amounted to €389.4 million for the financial year ended November 30, 2013, as adjusted for this Offering and the application of the gross proceeds therefrom. Ownership-adjusted pro forma total net debt of the Issuer is calculated as the sum of (x) the pro forma net debt of the Issuer and (y) the pro forma total net debt of the Company multiplied by the ratio of (i) the number of Company shares held by the Issuer and (ii) the total number of Company shares (net of treasury shares), in each case as of January 31, 2014.

(6) Pro forma net interest expenses represents interest incurred on borrowings and swaps and on intra-Group current accounts less interest and financial expense received, as adjusted for this Offering and the application of the gross proceeds therefrom as contemplated under “Use of Proceeds.”

(7) Ownership-adjusted pro forma net interest expenses amounted to €31.9 million for the financial year ended November 30, 2013, as adjusted for this Offering and the application of the gross proceeds therefrom. Ownership-adjusted pro forma net interest expenses is calculated as the sum of (x) the pro forma net interest expense of the Issuer and (y) the pro forma total net interest expense of the Company multiplied by the ratio of (i) the number of Company shares held by the Issuer and (ii) the total number of Company shares (net of treasury shares), in each case as of January 31, 2014. (8) The ownership-adjusted ratio of pro forma net debt to Adjusted EBITDA is 4.6x. (9) The ownership-adjusted ratio of Adjusted EBITDA to pro forma net interest expenses is 2.7x. (10) Distributable reserves of the Company represent retained earnings and net income of the Company, net of dividends declared in the period.

(11) Ownership-adjusted distributable reserves of the Company amounted to €186.2 million for the financial year ended November 30, 2013, calculated as the product of (x) distributable reserves of the Company multiplied by (y) the ratio of (i) the number of Company shares held by the Issuer and (ii) the total number of Company shares (net of treasury shares), in each case as of January 31, 2014.

(12) The ownership-adjusted ratio of distributable reserves of the Company to pro forma net interest expenses of the Issuer is 7.2x.

RISK FACTORS An investment in the Notes involves a high degree of risk. You should carefully consider the risks described below, together with other information provided to you in these Listing Particulars, before deciding whether to invest in the Notes. Any of the risks described below, individually or together, could have a material adverse effect on our business, financial condition, results of operations, ability to meet our financial obligations and prospects, as well as the value of the Notes. The risks described below are not the only risks we face. Additional risks not currently known to us or that we now deem immaterial may also harm us and affect your investment. The sequence in which the risk factors are presented below is not indicative of their importance, their likelihood of occurrence or the scope of their financial consequences. These Listing Particulars also contain forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including the risks described below and elsewhere in these Listing Particulars.

Risks Related to Our Business and Industry Changes in general economic, social or business conditions in France could adversely affect our business. The general economic environment in France has a direct impact on the French housing market, including the new- build market in which we operate. Changes in key macroeconomic indicators, including but not limited to, economic growth rates, the consumer confidence index, interest rates and unemployment rates, can impact property development. As a consequence of the difficult macroeconomic environment in France: • there has been little to no economic growth (gross domestic product (“GDP”) grew by 0.3% in 2013 according to estimates by the IMF, compared to 0.0% in 2012 according to INSEE); • unemployment rates have remained consistently high (10.2% in metropolitan France in 2013 and 2012); and • purchasing power has been restricted due to income stagnation and tax constraints. Accordingly, the financial means of potential homebuyers have deteriorated and the real estate markets in which we operate have remained weak. For example, in 2013: • order volumes dropped to their second lowest level since 2000 for new-build units (approximately 87,700 in 2013 according to the French Ministry of Ecology, Sustainable Development and Energy, compared to 88,904 in 2012 and 105,000 in 2011 according to data published in the ECLN) as well as for existing homes (approximately 668,000 in the year ended December 31, 2013, according to FNAIM estimates); • individual investors remained underrepresented among homebuyers for the second year in a row, accounting for 40% of homebuyers in 2013, compared to 43% in 2012 and 55% on average over the 2005-2011 period according to data published by the FPI; • despite historically low interest rates, the prices of existing homes dropped by an average of 2.9% according to FNAIM estimates and the prices of new-builds remained almost flat, with average prices varying markedly depending on the region, the size of the population centers and the location of the housing units within these centers; • take-up periods, i.e., the average number of months required to sell available units (the “take-up period”), reached 14 months, compared to an average of 7.7 months for the period between 2000 and 2010 according to data published by the Crédit Agricole Group; • the number of housing units under construction was down 3.2% for the year, with 294,465 new units in 2013 compared to 304,234 units in 2012, according to data published by the French Ministry of Ecology, Sustainable Development and Energy; and • the number of housing units authorized to be built fell by 12.3% to 377,170 units compared to 429,851 units in 2012, according to data published by the French Ministry of Ecology, Sustainable Development and Energy.

The French commercial real estate market also deteriorated in 2013. Notably: • there was a marked increase in vacant units compared to 2012;

• rents experienced downward pressure and negotiated rent discounts rose significantly; and • large employers continued to delay or to suspend their plans to move into new offices. This uncertainty in the new-build market may be exacerbated by political considerations ahead of municipal elections, which can delay the launch of certain of our programs. To respond to uncertainty in the market, we may have to be more selective as to the location of our programs, diversify our product lines and adapt our development strategies. For example, in recent years we have expanded our offerings of serviced accommodations for corporate customers, tourists, students and independent seniors. There can be no assurance that these adaptations or any future revision to our development strategy will be successful in addressing market risk or shifting consumer needs. Furthermore, such diversification may affect our order attrition rates, the timing of our revenue recognition and our levels of gross profit margin. For example, the application of the percentage-of-completion method to our Commercial property programs results in a less gradual schedule of revenue recognition than in our Housing segment, which may have an impact on the comparability of our results over successive financial periods. Furthermore, our gross profit margins are generally lower for Commercial property programs than for Housing programs. As a result, in a particular period, our gross margin may be impacted by the product mix of Commercial property and Housing units that we develop and sell during such period. Finally, orders for units of our serviced accommodations are more likely to be cancelled than orders for single-family homes and apartments in part due to their lower individual unit cost and potential return on investment. Additionally, where we rely on specialized networks of third-party sales agents to reach new types of investors, the marketing processes of these agents may not yield the level of customer loyalty that our internal procedures are designed to secure (see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Results of Operations” and “Business—Marketing”). Any adverse changes in factors affecting the housing market may impact our business negatively. The problems described above could reduce demand for our Housing units, extend the timeframe required to build them and increase associated costs. A drop in demand may reduce our ability to find buyers for the portion of our Housing programs that is not pre-sold before we begin construction. Additionally, an extension of the construction timeframe may postpone the recognition of profits on individual programs as a result of our revenue recognition method (see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies”). If costs rise, we may not be able to pass on any cost increases to our customers, either due to the economic backdrop or because the price of each home is set several months before the delivery date in accordance with VEFA contract terms. Our backlog, a portion of which consists of anticipated revenues relating to ordered units for which a notarized deed of sale has not yet been signed, could shrink in value if French housing prices continue to decline. We can give no assurances and provide no guarantee that revenue attributable to our backlog will in fact be recognized.

Our potential customers’ inability to secure financing for their home purchases could have a material adverse effect on our results of operations. Although the French housing market continues to experience a chronic shortage of supply over demand, the growth of the housing market depends largely on the ability of customers to secure financing to buy a home, as well as on how confident they are about their ability to make regular payments on their mortgages over several years. In recent times, prospective homebuyers’ ability to secure the means to buy a home has been tied less to households’ purchasing power, as incomes have tended to stagnate, than to their borrowing ability. Our sales are impacted by banks’ and other lenders’ willingness and ability to provide financing to prospective homebuyers. Mortgage terms, including average duration, loan-to-value ratios and interest rates, could have a direct impact on demand for our products (see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Results of Operations”). Our results of operations could be materially adversely affected if demand for our products decreases or our order attrition rates increase due to prospective homebuyers’ inability to secure adequate financing.

Changes to French tax incentive schemes could lower demand for our products and adversely affect our results of operations. A succession of tax incentives implemented since the end of the 1990s have had, depending on the conditions governing their applicability, varying degrees of influence over rates of new-build construction in France (see “Industry—Tax incentives”). We benefit from tax and other governmental incentive schemes designed to encourage private individuals to invest in property. The elimination or modification of certain benefits targeting rental investments or supporting home 23

ownership by low income households could have a material impact on the real estate market and could adversely affect our business and profitability (see “Management’s Discussion and Analysis of Financial Condition and Results of Operations— Key Factors Affecting Our Results of Operations”).

We are subject to laws and regulations that could materially and adversely impact our expenses, limit the number of homes that we are allowed to build, delay completion of our programs and result in additional costs and liabilities. We must comply with numerous laws and regulations in connection with our property development activities, including but not limited to laws and regulations relating to urban planning, construction standards, environmental standards, consumer protection, health and safety, and permit allocation (see “Business—Environmental and Other Regulation” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Results of Operations”).

Urban planning and construction standards As the project owner and designer of our construction programs, we must comply with applicable regulations set forth in urban planning documents drafted by city governments, including occupancy regulations, zoning restrictions and urban development programs. For example, such regulations limit building height and spatial separation between structures, type of land use permitted for specific plots of land, external aesthetics requirements and possible exceptions to these rules and principles. Our failure to meet these requirements or to keep track of evolving standards could prevent us from developing our programs and have a material adverse effect on our results of operations.

Environmental regulations We must also comply with environmental laws and regulations, including those governing water use, water distribution, waste water treatment, the discharge of pollutants, impacts on flora and fauna, the protection of threatened or endangered species, the handling of and exposure to hazardous substances, the cleanup of contaminated sites and regulations governing classified facilities. We could incur fines, penalties, third-party claims, cleanup costs and other sanctions as a result of a failure to comply with or liabilities under these laws and regulations (see also “—We may be subject to costs and liabilities in connection with the pollution of our sites, including as a result of the use of hazardous materials or the discovery of past environmental contamination.” and “—Compliance with regulations governing environmental impact studies may have an adverse effect on how we conduct our business and the financial viability of our programs.”). Compliance with environmental laws and regulations also can result in substantial costs or delays, prohibit or restrict development in environmentally sensitive areas and subject our projects (or required permits or approvals) to challenges by third parties. These laws and regulations often change and are likely to become more strict over time. We may incur additional costs or obligations as a result of environmental requirements that are promulgated in the future.

Consumer protection and property warranties As a seller of real property, we must comply with the standard legal provisions regarding sales and consumer protection, as well as specific regulations relating to sales before completion, as specified in Articles L.261-3 et seq. of the French Construction and Housing Code. In accordance with Articles L.271-1 et seq. of the French Construction and Housing Code, non-professional homebuyers are granted a “cooling-off” period of seven days following the receipt of the notification of a private purchase agreement, during which they are entitled to cancel their order. The purchase agreement cannot be notarized until the end of this period and thus does not become final and binding until the end of such period. The regulations relating to sales before completion also contain a certain number of other provisions designed to protect buyers. In particular, if a buyer is obligated to pay any amounts prior to the completion of the building, Articles L.261-10 to L.261-14 of the French Construction and Housing Code provide, among other things and depending on the specificities of the sale, that a notarized deed of sale must be drawn up by a notary and that a performance bond must be provided (most often in the form of a bank guarantee). Pursuant to Article L.312-17 of the French Consumer Code, financing must be in place before a purchase agreement becomes effective. Furthermore, buyers are entitled to verify that, upon completion, the relevant program and reserved lot comply with the terms of the final notarized deed of sale. Buyers are also protected by a paced payment schedule. In addition, we are subject to statutory liability rules that apply to all parties involved in the construction of buildings (sound insulation guarantees, the two-year moveable property warranty and the ten-year structural defect warranty). Under Articles 1792 et seq. of the French Civil Code, a presumption of liability applies to all parties involved in the construction of 24

a building for damages, including those resulting from defects in the land itself, which adversely affect the structural integrity of the building or one of the major pieces of equipment in such a way as to render it unfit for its intended use. The French Civil Code entitles buyers to a ten-year warranty for defects or damages affecting a building’s structure or integrated equipment that render the building unfit for its intended use and to a two-year performance warranty for damages to separable equipment. Provided that all statutory and case-law conditions are fulfilled in the case at hand, these warranties can allow buyers to file claims against the Group, which can in turn hold the contractor responsible for the relevant defects, where applicable. This warranty system is complemented by mandatory insurance coverage, introduced by Law 78-12 of January 4, 1978 (Loi relative à la responsabilité et à l’assurance dans le domaine de la construction) and provided for under Article L.242-1 of the French Insurance Code, requiring all parties involved in the construction of a building to obtain so- called “Structural Damage Insurance” (assurance dommages-ouvrage) at the beginning of the construction process. This insurance provides coverage for the repair of defects falling under the two-year or ten-year warranties. This coverage is transferred to customers when they acquire their homes and to their successors upon sale of the property. This insurance and other forms of insurance related to our business are described in “Business—Insurance.”

Building site health and safety and other labor regulations Article L.4532-4 of the French Labor Code requires project owners to designate, as of the design stage, a Health and Safety Coordinator. Additionally, labor regulations mandate that our technical departments verify, prior to the signing of a contract, that approved contractors and subcontractors are up-to-date with their payroll taxes and that they obtain a sworn statement from executives of a subcontracting company certifying that it does not employ illegal workers. There can be no assurance that any of our prevention plans or verification procedures will help us identify and avert all potential regulatory violations.

Building and demolition permits Finally, delays in our programs’ time schedules often result from third-party challenges to our building or demolition permits on the basis that these permits do not comply, for example, with local urban planning regulations, such as zoning plans and development plans for mixed development zones (“ZAC”), or with the French Urban Planning Code (see “Business—Litigation and Other Proceedings”). These third parties are mainly associations and neighboring residents. As a result of these challenges, the timeframe for filing building or demolition permits can be extended beyond the average three- to five-month schedule applicable in unproblematic situations. A description of this procedure is provided in “Business— Product Development—Purchase of land—Commitment Committee.” Any amendments to any of these or other regulations applicable to our activities could have material financial consequences. For example, the adoption of more stringent construction, environmental or building permit standards could have an adverse effect on our profitability and operating income. Constant changes in rules and their increased number could have an adverse impact on our business and growth. The increase in the number of standards has generated a growing complexity for the development of real estate programs, which could lead to longer delivery times for our programs and an increase in the number of objections from third parties. This could have a material adverse impact on our earnings. See also “—Changes to French tax incentive schemes could lower demand for our products and adversely affect our results of operations” and “—Compliance with regulations governing environmental impact studies may have an adverse effect on how we conduct our business and the financial viability of our programs.”

The real estate development industry is highly competitive. The French property development business is highly competitive. We face competition from national and regional real estate developers in connection with the land acquisition process, the sale prices for our products and access to subcontractors. We also face competition on the single-family home and apartment resale markets. As a result of the competitive landscape in the French property development business, we may experience: • difficulties acquiring land that meets our needs; • delays in the construction of our programs due to a shortage of sub-contractors; • reduced revenues or profit margins, including as a result of a need to offer or raise discounts or because of reduced sales and increased cancellation rates.

These factors could have a material adverse effect on our business, financial condition and results of operations, including by increasing expenses or preventing the growth of our business (see “Industry—Competition”). In particular, as we require a sufficient supply of land of suitable quality and size to be able to develop our programs at any given time, increased competition or a decrease in available land that meets our standards could significantly impact our future business (see “Business—Product Development—Purchase of land”).

Compliance with regulations governing environmental impact studies may have an adverse effect on how we conduct our business and the financial viability of our programs. We are required to perform environmental impact studies before an authorization for proposed construction, development or other works can be issued when such construction, development or other works meet the criteria set out in Articles L.122-1 to L.122-3-3 and Articles R.122-1 to R.122-15 of the French Environmental Code (Code de l’environnement). Such studies can have a direct impact on the way we design our programs. Depending on the results of a given study and on the particular concerns involved, we may file a request for an exemption from compliance with species protection laws (subject to review and approval by the national council for the protection of the environment (Conseil national de protection de la nature)), to alter our development plans to “avoid” protected species, or to take compensatory measures (subject to review and approval by regional environment, development and housing departments (directions régionales de l’environnement, de l’aménagement et du logement)). In addition, the environmental impact studies we commission may fail to detect the presence of protected species on land we intend to develop. Our failure to meet species protections requirements, mitigate potential impacts, receive necessary exemptions or discover protected species early on in our development process could have an adverse effect on the progress of our programs and on their financial viability due, among other things, to delays or additional costs incurred to implement specific technical accommodations. In certain cases we may also need to reassess the viability of plans to develop certain plots of land, which could result in the cancellation of all or part of one of our programs. The delay or cancellation of all or part of one of our programs could have a material adverse effect on our business, financial condition and results of operations.

We are exposed to risks associated with litigation, including but not limited to claims relating to structural and other construction defects and the failure to comply with legal or regulatory requirements, and any adverse determinations, judgments or announcements in any material litigation could have an adverse financial impact and an adverse impact on our customer base and reputation. We have been and may in the future be subject to claims and legal proceedings arising in the ordinary course of business. Due to the nature of our business, we are exposed to civil and governmental legal action resulting primarily from structural and other defects in our programs, the failure to comply with certain legal or regulatory requirements, claims against building permits obtained, or any other type of claim, including challenges to or failure to obtain requisite local authority approvals. See “—We are subject to laws and regulations that could materially and adversely impact our expenses, limit the number of homes that we are allowed to build, delay completion of our programs and result in additional costs and liabilities.” Although we currently hold insurance coverage in amounts we believe to be adequate, our coverage may not be sufficient to insure against all claims that may arise and certain claims may be excluded under the terms of our insurance policies.

Regardless of the nature of claims or alleged facts on which claims are based, proceedings against us may involve claims for substantial amounts and could divert management’s attention from day-to-day business operations to address such issues. Proceedings may result in substantial monetary damages, damage to our reputation and decreased demand for our products, all of which could have a material adverse effect on our business. The ultimate outcome of such proceedings or claims could have a material adverse effect on our financial condition, results of operations or cash flows in the period in which the impact of such matters is determined or paid. For a discussion of certain legal proceedings to which we are party, see “Business—Litigation and Other Proceedings.”

Difficulties and complications encountered in connection with the construction process, changes to our contractual arrangements with our contractors, increases in construction costs due to market changes or other events that may arise in the course of construction could disrupt our business and could result in substantial increases in total costs. As a builder-developer, we assign construction work to third-party contractors from a variety of trades. While we budget construction costs for each program before construction begins, building and construction costs can increase above anticipated amounts as a result of several unforeseeable events. We may face additional costs related to, among other things,

unexpected technical challenges, exceptional weather conditions that delay work, accidents during construction or the bankruptcy of a subcontractor. These unforeseeable events could have a negative impact on our programs’ net profit. Furthermore, rapid increases in real estate development activity can result in heightened construction costs. Suppliers of building materials may raise prices as a result of supply shortages and contractors may increase their costs to address growing demand for their services. If we are unable to reflect construction cost increases in the sale price of units in our programs, our profit margins may be adversely affected. Finally, with regard to construction work, we select our contractors through a tender process. If the number of contractors operating in this sector decreases materially or if several mergers take place, our ability to solicit a wide range of bids for any program may be curtailed, prices may become less competitive and quality standards may suffer (see “Business—Product Development”).

Increases in insurance premiums or our failure to secure or maintain adequate insurance coverage could adversely impact our financial condition. We retain insurance policies that provide construction, structural defect, non-builder developer, public works engineering, project manager liability, developer’s liability and real estate agent liability coverage. Because only a limited number of insurers offer such coverage, we may not be able to avoid increases in premiums. Furthermore, as insurance providers review the terms and conditions of our insurance policies on a periodic basis, we may not be able to obtain the same or similar coverage in the future. This could increase our exposure to various risks and related costs, which in turn could have an adverse impact on our business, profitability and growth. Finally, we have not retained insurance policies for certain types of risks, including the risks of operating loss or business interruption. Our financial condition and profitability could be adversely affected if we suffer damages or losses or are exposed to liability based on risks for which we have no insurance coverage. See “Business—Insurance.”

Contracts signed with public bodies may result in additional costs and delays. We may incur additional costs and encounter delays complying with rules and regulations applicable to contractual arrangements with public bodies. The granting of contracts by public bodies is governed by strict regulations. The award of a contract to the Group by a public body could give rise to proceedings before a court or to cancellation if, for example, such public bodies do not conform to European or national regulations governing the granting of public contracts. This could negatively impact our financial position. Our cash flows could also be adversely impacted as the collection of payments from public organizations is generally slower than the collection of payments from private companies. In addition, public bodies may impose technical constraints and requirements that could reduce the profitability of our real estate programs.

Off-balance sheet commitments may represent a substantial expense. Due to the nature of our business, we have significant off-balance sheet commitments that may in aggregate represent a substantial expense. Our main off-balance sheet commitments consist of property earnest deposits and performance bonds. In VEFA sales (where customers acquire housing units prior to completion) we give our customers financial performance bonds. To that end, we ask a financial institution, mutual guarantee institution or insurance company to issue a guarantee of completion in favor of our customers. These guarantees are established on a program by program basis and have a term comparable to the transaction completion term. In consideration for such guarantees, we typically give such financial institutions or insurance companies a mortgage commitment and a non-assignment of shares undertaking. As of November 30, 2013, our performance bonds commitments amounted to €203.7 million, compared to €268.1 million as of November 30, 2012. We also record a portion of order indemnities as off-balance sheet items. Order indemnities cover amounts we would forfeit or have to pay if we cancelled conditional purchase agreements for land despite all relevant conditions having been met. As of November 30, 2013, we recorded €19.7 million, or 64.0%, of these order indemnities as off-balance sheet items, with the remainder being recognized in inventories. The order indemnities that we record as off-balance sheet items consist either of third-party bank guarantees or Company guarantees. In the financial year ended November 30, 2013, order indemnities provided in the form of bank guarantees totaled €14.4 million and order indemnities provided through Company guarantees totaled €5.3 million. As of November 30, 2013, the total amounts that we would forfeit or that would be payable if we cancelled all of the conditional purchase agreements for the land in our Housing portfolio (despite all relevant conditions having been met) amounted to approximately €30.5 million, or approximately 5.1% of the estimated total value of such land.

Other guarantees, provided principally to cover acquisitions of land and matters related to roads and infrastructure, amounted to €89.1 million as of November 30, 2013, compared to €64.0 million as of November 30, 2012. These off-balance sheet commitments are significant and could materially adversely affect our financial condition if we were constrained to make cash disbursements in relation to a significant proportion thereof. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Off-Balance Sheet Commitments.”

Our reliance on extrinsic guarantees exposes us to additional costs if financial institutions become less willing to grant them. For our property development programs, we generally use an extrinsic guarantee system in order to provide customers who purchase properties under VEFA contracts with the performance bond (Garantie financière d’achèvement, “GFA”) required by applicable regulations. We obtain a guarantee for each transaction from a bank or from certain insurance companies. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Liquidity requirements—Guarantees” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Off-Balance Sheet Commitments—Guarantees and bonds given.” An exceptional decline affecting the real estate market together with a financial crisis could result in a decrease in the number of financial institutions likely or willing to grant such guarantees to us, an increase in the cost of such guarantees or in additional requirements being imposed on the Group. Any difficulties we may have in obtaining such extrinsic guarantees for sales before completion could require us to turn more frequently to intrinsic guarantees. This could have an adverse effect on our business and our earnings in circumstances where such guarantees would be more costly than GFAs. If we are unable to obtain extrinsic guarantees for sales before completion, our opportunities to develop new programs may be limited.

Our business could be adversely affected by weather conditions and natural disasters. Weather conditions, including natural disasters, and other unforeseeable environment-related factors may adversely affect our property development and construction activities. For example, a particularly harsh winter could cause work on a program to be halted for several days or several weeks and potentially delay program delivery, thus impacting the recognition of our revenues and margin. See “Business—Environmental and Other Regulation.”

Discovery of archaeological remains before or during construction may result in the suspension of a program. Archaeological remains or objects may be discovered before construction in the context of preventive land assessments conducted by governmental bodies or during construction in the course of our development activities. Any such discovery may delay the implementation of our development activities, increase the complexity of our construction plans, force us to suspend construction or result in the full reclassification of a site as a restricted area. Any of these outcomes could have material adverse financial consequences for the affected program. See “Business—Environmental and Other Regulation.”

We may be subject to costs and liabilities in connection with the pollution of our sites, including as a result of the use of hazardous materials or the discovery of past environmental contamination. We may become liable for the costs of investigating, monitoring or remediating contamination or other environmental or building conditions at properties we currently or formerly owned or occupied, or at third-party sites where we have disposed of wastes, regardless of whether we caused or knew of such conditions. Such conditions may not be identified during our diligence review process, or disclosed to us by a seller, prior to an acquisition. We may experience delays and incur additional costs if we encounter pollution or soil quality problems during or after construction, which could have significant financial consequences, in particular if the seller of the land or the building is insolvent. Furthermore, the cost of remediating environmental contamination is difficult to predict accurately. Thus, we may not be able to fully protect ourselves against all significant risks relating to the elimination of toxic waste, including with respect to asbestos, site rehabilitation and monitoring, or other environmental factors at our properties. In addition, environmental pollution, contamination and similar conditions can result in claims by governmental authorities or in claims by third parties for property damage or personal injury. Such claims can result in fines, penalties, cleanup costs and other damages and may adversely impact our ability to sell homes in affected communities or to borrow funds by using the impacted land as security (see “Business—Environmental and Other Regulation”).

We may have difficulty retaining or recruiting personnel, including skilled managers, which could adversely affect our business. 28

We are dependent on certain key management personnel, the loss of whose services might impede the achievement of our business development objectives. The management team, whose members have been with us for an average of approximately 10.3 years, has significant experience in the regional markets of France in which we conduct our business. There can be no assurance that we will be able to retain our executives, including the members of the Management Committee and the managers of regional operations, which could have a material adverse effect on our business, financial position, outlook and results of operations. In addition, we staff our key Group departments with a limited number of personnel. As a result of our organizational structure, we could face a material loss of knowledge or skills should any of these employees leave the Group. We may be unable to recruit experienced replacements promptly from within the property development industry, which could result in significant expense to train new staff (see “Business—Employees—Workforce and new hires”).

Our strategy and management of a single brand may not be successful. We sell a range of different products under one brand, Kaufman & Broad. In recent years, we have diversified the products that we offer under this brand, notably as a result of adverse macroeconomic conditions affecting customer preferences (see “—Changes in general economic, social or business conditions in France could adversely affect our business”). For example, our offerings now range from affordable housing to luxury single-family homes and apartments, and include increasing proportions of commercial and serviced accommodations. This could adversely alter the image we seek to promote for our business and leave our customers uncertain as to what they can expect from Kaufman & Broad products. Furthermore, our local branches can, to some extent, independently organize their own advertising campaigns and marketing initiatives to supplement our national campaigns. Our local branches could project an image that is not aligned with our strategy, despite the existence of a common national corporate identity, which could dilute our brand and have an adverse impact on our business (see “Business—Marketing” and “Business—Intellectual Property”).

Destruction of our information systems could lead to a disruption in our business. The partial or full physical destruction of our information systems could generate a break in our data flow. As part of our risk management strategy, we have set up a monitoring process to manage the market, legal, industrial, economic and environmental risks described above. The partial or total physical destruction of our information systems could lead to a system shut-down. Furthermore, our business continuity plan for the recovery of data and our back-up center containing the information required for employees affected by any such incidents to carry on with their activities may fail to preserve our data reliably or accurately.

We are subject to stringent privacy and data protection rules. We rely on the collection, use and disclosure of information from customers to conduct our business. In our commercial relations with prospective or existing customers, we collect personal data concerning such customers, including certain sensitive information concerning a person’s assets. Although we have taken measures we consider necessary to comply with the provisions of the rules set out by the Commission Nationale Informatique et Libertés (French national data protection supervisory body) for the protection of our customers’ personal data, we cannot exclude the possibility of this data being lost or disclosed through fraudulent activity, computer system intrusion, destruction or malfunction, or wrongful use by unauthorized third parties (including employees) (see “—Destruction of our information systems could lead to a disruption in our business.”). Such loss, disclosure, fraudulent activity, intrusion or wrongful use could damage our brand, image and reputation, result in legal action and have a material adverse effect on our business, results of operations or financial condition.

We may incur additional costs if shareholders in our joint development programs or other business counterparties become insolvent. We conduct certain real estate development programs in conjunction with external shareholders, which inject capital into our programs and provide shareholder loans. Depending on the prevailing economic and financial situation, some Group partners participating in joint development programs could default during the property development phase and could fail to honor their commitments, which would result in our having to meet the cash requirements generated by such programs. We could thus suffer from the insolvency of some of our partners.

We also face risks associated with working with third parties, including suppliers and subcontractors, customers and banking counterparties. In the financial year ended November 30, 2013, our top ten customers (excluding Commercial property customers) represented 11.5% of our revenues and our top ten suppliers represented 22.6% of amounts invoiced by our suppliers, with the top supplier accounting for 7.3% thereof. The insolvency of certain of these companies could have an adverse impact on our business and, in particular, delay construction or increase costs.

Our failure to implement reliable budgeting tools and financial control mechanisms could result in significant cost overruns or the chronic underperformance of our programs, which could have a material adverse impact on our profits. Any of our programs may not yield the expected commercial and financial results projected in our budgets (see “— Difficulties and complications encountered in connection with the construction process, changes to our contractual arrangements with our contractors, increases in construction costs due to market changes or other events that may arise in the course of construction could disrupt our business and could result in substantial increases in total costs.”). Given the wide range of factors that can cause our programs to become more costly than expected or to yield lower returns than planned, our failure to put in place adequate financial control mechanisms to detect and manage budget deviations as they arise could result in significant cost overruns or program underperformance. While in most cases we do not undertake to develop Housing programs until we achieve a minimum 50% pre-sale rate, we cannot guarantee that the remaining percentage of unreserved units will be sold at favorable prices or at all, nor can we give assurances that our internal budgeting and financial modeling tools will allow us to anticipate possible drops in demand or impending cost increases early enough for us to cancel programs likely to underperform. If we are unable to predict prices accurately, control costs and manage day- to-day operations, our profits could be materially adversely affected.

We operate under complex and variable tax regimes, and changes in tax rules and the outcome of tax assessments and audits could cause a material effect on our financial results. We are subject to numerous tax regulations, including those concerning the valuation of direct tax expense, various value-added tax (“VAT”) treatments, and the calculation of the tax owed on the earnings of companies included in the consolidated tax group. Although we take all reasonable measures to avoid errors, the complexity of these regulations and the fact that they are continually amended may result in disputes with tax authorities, which could lead to expenses with a material impact on our financial position (see “Business—Litigation and Other Proceedings”).

We may be subject to tax withholding under FATCA, which may reduce investment returns and distributions to shareholders. Sections 1471 through 1474 of the U.S. Internal Revenue Code, commonly referred to as the Foreign Account Tax Compliance Act, or “FATCA,” introduce a new reporting regime and a 30% withholding tax (which we refer to as the “FATCA Withholding Tax”) with respect to certain payments to a non-U.S. entity that does not comply with FATCA. FATCA will be phased in beginning July 1, 2014. France recently entered into an intergovernmental agreement with the United States (which we refer to as the “France-US IGA”) to implement FATCA with respect to French financial institutions. The IRS and the French tax authorities have not yet provided final guidance regarding compliance with FATCA and the France-US IGA. If we are not treated as compliant with FATCA and the French-US IGA, we may be subject to the FATCA Withholding Tax on all, or a portion of all, payments received by us, directly or indirectly, from U.S. sources or in respect of U.S. assets, including the gross proceeds on the sale or disposition of certain U.S. assets. We do not expect to receive a material amount of U.S.-source payments in 2014 or in any future year and therefore, if the FATCA Withholding Tax were to apply to certain U.S.-source payments received by us, we do not expect it to have a material impact on our financial condition or our ability to make payments to holders of the Notes. FATCA and the impact of the France-US IGA are particularly complex and their application to us is uncertain at this time. You should consult your own tax advisors to obtain a more detailed explanation of FATCA and the France-US IGA and to learn how they might affect you in your particular circumstances.

Risks Related to Our Indebtedness and the Notes Our leverage and debt service obligations could adversely affect our business, financial condition, operating results and our ability to make payments on the Notes.

We use debt to finance our operations, land acquisitions and real estate development programs. As part of the New Senior Facilities Agreement to be dated on or about March 19, 2014, we will have syndicated loans and a revolving credit facility allowing us to finance our operations. As of November 30, 2013, our pro forma total net debt, pro forma total third-party financial debt and pro forma cash and cash equivalents, each as adjusted for the Transactions, amounted to €394.4 million, €521.2 million (including €150.0 million in borrowings under the New Senior Credit Facilities) and €126.8 million, respectively. In addition, our New Revolving Credit Facility (upon which we do not intend to draw on the Issue Date) will allow for an additional €50.0 million in future borrowings. Our leverage could have important consequences for our business and operations and for holders of the Notes, including, but not limited to: • making it more difficult for us to satisfy our obligations with respect to the Notes and our other debt; • limiting our ability to obtain additional financing in excess of existing committed amounts for working capital requirements, capital expenditures, potential acquisitions and debt refinancings;

• negatively impacting credit terms with our creditors; • requiring us to devote a significant portion of cash flows from operations to make interest and principal payments on our debt, reducing the availability of our cash flows for other purposes; • limiting our flexibility to plan our expansion and to plan for and react to changes in business trends; • adversely affecting our competitive position due to our debt burden being higher than that of our competitors; and • increasing our vulnerability to decreases in business volumes or adverse business or economic conditions and reducing our ability to benefit from improvements in market conditions. Any of these or other consequences or events could have a material adverse effect on our ability to satisfy our debt obligations, including the Notes. Our ability to make payments on and refinance our debt and to fund working capital expenditures and other expenses will depend on our future operating performance and ability to generate cash from operations. Our ability to generate cash from operations is subject, in large part, to general economic, competitive, legislative and regulatory factors and other factors that are beyond our control, as well as the other risks described under “Risk Factors— Risks Related to our Business and Industry.” We may not be able to generate sufficient cash flow from operations or obtain enough capital to service our debt or to fund our future acquisitions or other working capital expenditures. For a discussion of our cash flows and liquidity, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

Our debt agreements contain restrictive covenants that may limit our ability to respond to changes in market conditions or pursue business opportunities. The Indenture will contain several covenants limiting the ability of the Issuer and its restricted subsidiaries to, among other things: • incur or guarantee additional indebtedness and issue certain preferred stock; • pay dividends or make distributions on or in respect of our capital stock; • redeem or repurchase capital stock of the Issuer or its parents; • make certain restricted payments or investments; • prepay or redeem subordinated debt or equity; • create or incur certain liens; • impose restrictions on the ability of subsidiaries to pay dividends or make other payments to the Issuer; • transfer, lease or sell assets; • merge or consolidate with other entities; 31

• enter into certain transactions with affiliates; and • impair the security interests in the Collateral. Each of the limitations set forth above are subject to a number of important qualifications and exceptions. See “Description of the Notes—Certain Covenants.” The New Senior Facilities Agreement also contains many similar restrictions with respect to the Company and its subsidiaries, some of which are more onerous to comply with than the covenants under the Indenture. In addition, the New Senior Facilities Agreement requires the Company and its subsidiaries to maintain specified financial ratios, satisfy specified financial tests and comply with operational parameters and certain other undertakings. See “Description of Other Indebtedness.” Our compliance with these ratios and restrictive covenants could reduce our flexibility in conducting our operations, particularly by: • affecting our ability to react to changes in market conditions, whether by increasing our vulnerability in relation to unfavorable economic conditions or by hindering our ability to profit from an improvement in those conditions;

• affecting our ability to seize sales opportunities or launch new construction programs; • limiting our ability to obtain certain additional financing in order to meet our working capital requirements, make investments or acquisitions and carry out refinancings; • limiting our ability to plan our expansion with flexibility; and • affecting our competitive positioning, because the aforementioned restrictive covenants could prevent us from adapting to changes in the market under the same conditions as our competitors. Any of these or other consequences could have a material adverse effect on our ability to generate the revenues necessary to satisfy our debt obligations, including the Notes.

The Issuer is a holding company that is dependent on the earnings and cash flows from its operating subsidiaries, which may not be sufficient to meet its financial obligations, including the Notes. The Issuer is a holding company with no business operations or material assets other than the equity interests in, and any intercompany receivables from, its subsidiaries as well as any remaining proceeds from this Offering. The Issuer is dependent upon the cash flow from its operating subsidiaries in the form of dividends, loans, interest and payments on intercompany loans or other distributions to meet its obligations, including its obligations under the Notes. The amounts of such payments, dividends and other distributions available to the Issuer will depend on the profitability and cash flows of its subsidiaries as well as the ability of those subsidiaries to declare dividends or make other distributions under applicable law. The subsidiaries of the Issuer may not be able to, or may not be permitted under applicable law or certain contractual arrangements (including under the New Senior Facilities Agreement, subject to certain exceptions (including the Company’s ability to make dividend payments and other equivalent distributions to its shareholders)) to, make distributions, make payments on, or otherwise advance upstream loans to the Issuer to make payments in respect of its debt, including the Notes. In addition, the subsidiaries of the Issuer have no obligation to make payments to the Issuer with respect to the Notes. While the Indenture will limit the ability of the Issuer’s subsidiaries to incur consensual restrictions on their ability to pay dividends or make other intercompany payments, these limitations are subject to significant qualifications and exceptions. In addition, the ability of the Company to dividend or otherwise distribute funds to the Issuer will be subject to the requirement to have sufficient retained earnings available for distribution. As of November 30, 2013, the Company’s retained earnings on a stand-alone basis were €204.9 million. This amount would be reduced by the amount of losses incurred or dividends paid in the future. Furthermore, when the Company provides funds to the Issuer in the form of a dividend, a pro rata dividend must also be paid to the Company’s other equity holders. Therefore, there can be no assurance that the dividend and distribution capacity of the Company will be adequate to fund distributions in amounts and at times sufficient for the Issuer to pay its obligations as they become due under the Notes. For more information about limitations on distributions in France, see “Limitations on Validity and Enforceability of the Security Interests and Certain Insolvency Law Considerations.” 32

The Notes will be structurally subordinated to the liabilities of the Issuer’s subsidiaries, and the Notes will not be guaranteed by any of the Issuer’s subsidiaries as of the Issue Date. None of the Issuer’s subsidiaries will guarantee the Notes as of the Issue Date. As of November 31, 2013, on a pro forma basis after giving effect to the Transactions, including the Offering of the Notes and the use of the gross proceeds therefrom, the Issuer’s subsidiaries would have had €150.6 million of outstanding indebtedness (consisting of amounts drawn under the New Senior Credit Facilities and other short-term debt). See “Capitalization.” The Issuer’s subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts due under the Notes or to make any funds available therefore, whether by dividends, loans, distributions or other payments. Generally, holders of indebtedness of, and trade creditors of, the Issuer’s subsidiaries (including lenders under the New Senior Facilities Agreement) are entitled to payments of their claims from the assets of such companies before these assets are made available for distribution to the Issuer, as a direct or indirect shareholder.

Accordingly, in the event that any subsidiary becomes insolvent, is liquidated, reorganized or dissolved or is otherwise wound up other than as part of a solvent transaction: • the creditors of the Issuer (including the holders of the Notes) will have no right to proceed against the assets of such subsidiary; and • creditors of such subsidiary, including trade creditors, will generally be entitled to payment in full from the sale or other disposal of the assets of such subsidiary before the Issuer, as a direct or indirect shareholder, will be entitled to receive any distributions from such subsidiary. As such, the Notes will be structurally subordinated to any creditors of the Issuer’s subsidiaries (including trade creditors, secured creditors and creditors holding debt and guarantees issued by such subsidiaries). In addition, direct shareholders of indirect subsidiaries of the Issuer will also be entitled to payments from the assets of such subsidiaries before any distributions will be made to the Issuer as an indirect shareholder.

Enforcement of the security interests in the Collateral consisting of French listed or unlisted shares may be subject to certain limitations. As security for its obligations under the Notes, the Issuer will grant, for the benefit of the Security Agent as parallel debt creditor (the “Parallel Debt Creditor”), a pledge over the financial securities account which contains all the listed shares of the Company (the “K&B Shares”) owned by the Issuer and held in the name of the Issuer in the books of CACEIS Corporate Trust, a professional account holder (intermédiaire financier habilité teneur de compte-titres) in accordance with Article L.211-20 of the French Monetary and Financial Code (the “K&B Share Pledge”). See “Risk Factors—Risks Related to Our Indebtedness and the Notes—Security interests in the Collateral will be granted to the Security Agent rather than directly to the holders of the Notes. The ability of the Security Agent to enforce the Collateral may be restricted by local law and other procedural constraints.” Under French law (Article D.211-12 of the French Monetary and Financial Code), the beneficiary of the K&B Share Pledge may enforce its security interest by (i) having all or part of the K&B Shares pledged pursuant to the K&B Share Pledge sold in the regulated market where such financial securities are traded and collecting the proceeds of such sale, or (ii) foreclosure, whereby the full title to K&B Shares (together with any other amount credited to the pledged account) is transferred to the beneficiary of the pledge. In the case of foreclosure, the value of the K&B Shares is determined by reference to their official market value on the last trading day in accordance with Articles L.211-20 and D.211-12 of the French Monetary and Financial Code. This valuation method therefore also determines the number of K&B Shares that may be subject to foreclosure. The claims of the Security Agent under the Parallel Debt that is secured by the K&B Share Pledge—and therefore the claims of the holders of the Notes—will be deemed extinguished up to the value of the foreclosed K&B Shares, determined as above, regardless of the actual amount of cash proceeds ultimately received by or on behalf of the secured creditors from a subsequent on-sale of the foreclosed K&B Shares. Additionally, enforcement of the K&B Share Pledge by way of foreclosure may also be affected by certain laws and regulations applicable to the shares of a French issuer listed on a regulated market. In particular, pursuant to the Règlement Général of the AMF, an irrevocable and unconditional mandatory tender offer (offre publique obligatoire) on all outstanding shares, securities conferring voting rights and securities giving access to the share capital of the Company must be launched if: (i) enforcement of the K&B Share Pledge by any person, acting alone or “in concert” (i.e., with the intention to gain control of the target in collaboration with the initiator of the tender offer or with the intention to frustrate the tender offer in collaboration with the target of the tender offer, as set out in Article L.233-10 of the French Commercial Code), results in that 33

person or persons holding, directly or indirectly, at least 30% of the Company’s share capital or voting rights, in accordance with Article 234-2 of the Règlement Général of the AMF; or (ii) a shareholder, or a group of shareholders holding directly or indirectly between 30% and 50% of the Company’s share capital or voting rights and acting in concert, increase their ownership of the Company’s total share capital or voting rights by at least 2% (which amount may be reduced to 1% following the enactment of the so-called “Florange Law” (Loi visant à reconquérir l’économie réelle) adopted by the French Parliament on February 24, 2014) over any twelve-month period; provided that in each case none of the applicable statutory exemptions (in particular pursuant to Article 234-4 of the Règlement Général of the AMF) are available to the beneficiary of the pledge under then-prevailing circumstances. The K&B Share Pledge provides a contractual method of enforcement in the event that the K&B Shares become delisted. In case of enforcement by way of foreclosure (attribution) of delisted shares, if the value of the foreclosed K&B Shares (as determined by an expert appointed in accordance with the agreement) exceeds the amount of the secured liabilities, the beneficiary of the K&B Share Pledge will be required to pay to the Issuer a “soulte”, or cash amount, equal to the difference between the value of the foreclosed K&B Shares and the amount of the secured liabilities. Conversely, if the value of the foreclosed K&B Shares is less than the amount of the secured liabilities, then the relevant amount owed to the beneficiaries of the K&B Share Pledge will be reduced by, an amount equal to the value of such foreclosed K&B Shares, and the remaining amount owed to such secured creditors will be unsecured obligations.

The granting of new security interests in the Collateral may create suspect periods for security interests in the Collateral under French law. The Indenture will allow the Issuer to incur additional indebtedness in the future, which may share in the security interests over the Collateral securing the Notes. The granting of new security interests may require the releasing and retaking of the existing security interests in the Collateral in accordance with the terms of the Indenture. Under French law, such a release and retake of the security interests in the Collateral will restart the applicable so-called “suspect periods” (périodes suspectes) in respect of such security interests. The applicable suspect period will run from the moment each new security interest has been granted or perfected. If the new security interests (including those that were released and retaken) are enforced before the end of the respective suspect period applicable in such jurisdiction, they may be declared void or ineffective, or it may not be possible to enforce them. See “Limitations on Validity and Enforceability of the Security Interests and Certain Insolvency Law Considerations.”

We may incur substantially more debt in the future, which may make it difficult for us to service our debt, including the Notes, and impair our ability to operate our business. We may incur substantial additional debt in the future. Although the Indenture will contain, and the New Senior Facilities Agreement contains, restrictions on the incurrence of additional debt, these restrictions are subject to a number of significant qualifications and exceptions and, under certain circumstances, the amount of debt that could be incurred in compliance with these restrictions could be substantial. The terms of the Indenture will permit us to incur future debt that may have substantially the same covenants as, or covenants that are more restrictive than, those of the Indenture. Moreover, the debt we may incur in the future could be structurally senior to the Notes, could mature prior to the Notes or may be secured by collateral that does not secure the Notes. In addition, the Indenture and our New Senior Facilities Agreement will not prevent us from incurring obligations that do not constitute debt under those agreements. The incurrence of additional debt would increase the leverage-related risks described in these Listing Particulars.

Our failure to comply with the covenants under the New Senior Facilities Agreement or the Indenture, including as a result of events beyond our control, could result in an event of default which could materially and adversely affect our financial condition and results of operations. Our Indenture will require the Issuer and its restricted subsidiaries to comply with various covenants, and the New Senior Facilities Agreement requires the Company and its subsidiaries to comply with various covenants, including certain financial covenants which require the Company and its subsidiaries to maintain specified financial ratios, satisfy specified financial tests and comply with operational parameters and certain other undertakings. See “Description of the Notes— Certain Covenants” and “Description of Other Indebtedness.” Our ability to meet these financial ratios and financial tests could be affected by deterioration in our operating results, as well as by events beyond our control, including unfavorable economic conditions, and we cannot assure you that we will be able to meet these financial ratios and financial tests. Moreover, the New Senior Facilities Agreement includes certain events of default (such as breaches of representations and warranties and defaults if we fail to make payment when due on certain other debt) that are in addition to the events of default set forth in the Indenture. If an event of default occurs under the New Senior Facilities Agreement, the Indenture or any of 34

our other debt instruments and is not cured or waived, the holders of the defaulted debt could terminate their commitments and declare all outstanding debt, together with accrued and unpaid interest and other fees, to be immediately due and payable. Borrowings under our other debt instruments, including the Notes, that contain cross-acceleration or cross-default provisions also may be accelerated or become payable on demand as a result of an event of default under the New Senior Facilities Agreement or other debt instruments. In these circumstances, our assets and cash flow may not be sufficient to repay in full the defaulted debt and our other debt, including the Notes then outstanding. If some or all of these instruments were accelerated, we could be forced into bankruptcy or liquidation, and the Issuer might not be able to repay its obligations under the Notes in such an event.

To service our indebtedness, we require a significant amount of cash, and our ability to generate cash will depend on many factors beyond our control. Our ability to make payments on and to refinance our indebtedness, and to fund planned capital expenditures depends in part on our ability to generate cash in the future. This depends on the success of our business strategy and on general economic, financial, competitive, legislative, regulatory and other factors, as well as the other factors discussed in these “Risk Factors,” many of which are beyond our control. We cannot assure you that we will generate sufficient cash flow from operations, that we will realize operating improvements on schedule or that future borrowings will be available to us in an amount sufficient to enable us to service and repay our indebtedness or to fund our other liquidity needs. Furthermore, applicable law and future contractual arrangements may impose restrictions on the Company’s and its subsidiaries’ ability to make payments to the Issuer, which could impact the Issuer’s ability to pay its obligations as they mature or to fund its liquidity needs. If we are unable to satisfy our debt obligations, we may have to undertake alternative financing plans, such as refinancing or restructuring our indebtedness, selling assets, reducing or delaying capital investments or seeking to raise additional capital. We cannot assure you that any refinancing or debt restructuring would be possible, or if possible, that it would be on similar terms to those of our debt instruments existing at that time, that any assets could be sold or that, if sold, the timing of the sales and the amount of proceeds realized from those sales would be favorable to us or that additional financing could be obtained on acceptable terms. Disruptions in the capital and credit markets, as we have seen in recent years, could adversely affect our ability to meet our liquidity needs or to refinance our indebtedness, including our ability to draw on our existing credit facilities or enter into new credit facilities. Banks that are party to our existing credit facilities may not be able to meet their funding commitments if they experience shortages of capital and liquidity or if they experience excessive volumes of borrowing requests from us and other borrowers within a short period of time.

We may not have the ability to raise the funds necessary to finance a change of control offer upon the occurrence of certain events constituting a change of control as required by the Indenture. Upon the occurrence of certain events constituting a Change of Control (as defined in the Indenture), the Issuer will be required to make an offer to repurchase all outstanding Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, up to, but not including, the date of repurchase. If a change of control were to occur, we cannot assure you that we would have sufficient funds available at such time, or that we would have sufficient funds to provide to the Issuer to pay the purchase price of the outstanding Notes or that the restrictions in the Indenture, the New Senior Facilities Agreement or our other then-existing contractual obligations would allow us to make such required repurchases. In addition, in the event that we require third-party financing to make an offer to repurchase the Notes upon a change of control, we cannot assure you that we would be able to obtain such financing. A change of control may result in an event of default under, or acceleration of, our indebtedness. For example, pursuant to the terms of the New Senior Facilities Agreement, the lenders may require the repayment of their respective loans outstanding thereunder upon the occurrence of a change of control. Any failure by the Issuer to offer to purchase the Notes would also constitute a default under the Indenture, which would, in turn, constitute a default under the New Senior Credit Facilities and certain other indebtedness. If an event constituting a change of control occurs at a time when we are prohibited from providing funds to the Issuer for the purpose of repurchasing the Notes, we may seek the consent of the lenders under such indebtedness to repurchase the Notes or may attempt to refinance the borrowings that contain such prohibition. If such consent or refinancing is not obtained, the Issuer will remain prohibited from repurchasing any Notes in breach of the terms of the Indenture. See “Description of the Notes—Change of Control.” The change of control provision contained in the Indenture may not necessarily afford you protection in the event of certain important corporate events, including a reorganization, restructuring, merger or other similar transaction involving us that may adversely affect you, because such corporate events may not involve a shift in voting power or beneficial ownership or, even if they do, may not constitute a “Change of Control” as defined in the Indenture. Except as described in these Listing 35

Particulars and the Indenture, the Indenture will not contain provisions that would require the Issuer to offer to repurchase or redeem the Notes in the event of a reorganization, restructuring, merger, recapitalization or similar transaction.

In addition, the occurrence of certain events that might otherwise constitute a change of control will be deemed not to be a change of control on one occasion if at the time our consolidated net leverage ratio is less than a specified level. See “Description of the Notes—Change of Control,” “Description of the Notes—Certain Definitions—Change of Control” and “Description of the Notes—Certain Definitions—Specified Change of Control Event.” The definition of “Change of Control” in the Indenture will include a disposition of all or substantially all of the assets of the Issuer and its restricted subsidiaries, taken as a whole, to any person. Although there is a limited body of case law interpreting the phrase “all or substantially all,” there is no precise established definition of the phrase under applicable law. Accordingly, in certain circumstances, there may be a degree of uncertainty as to whether a particular transaction would involve a disposition of “all or substantially all” of the Issuer’s assets and its restricted subsidiaries taken as a whole. As a result, it may be unclear as to whether a change of control has occurred and whether the Issuer is required to make an offer to repurchase the Notes.

The interests of our principal shareholders may be inconsistent with the interests of holders of the Notes. We are indirectly majority owned by funds managed or controlled by PAI Partners. See “Principal Shareholders.” As a result, PAI Partners is able to control matters requiring shareholder approval, including the election and removal of members of our board of directors, our corporate and management policies, potential mergers and acquisitions, the payment of dividends, asset sales and other significant corporate transactions. The interests of PAI Partners could conflict with the interests of holders of the Notes, particularly if we encounter financial difficulties or are unable to pay our debts when due. Affiliates of our shareholders also have an interest in pursuing divestitures, financings or other transactions that in their judgment could enhance their equity investments, although such transactions might involve risks to holders of the Notes. In addition, our shareholders or their respective affiliates may, in the future, own businesses that directly compete with ours or do business with us.

Our variable rate indebtedness subjects us to direct interest rate risks, which could cause our debt service obligations to increase significantly. The obligations under the New Senior Facilities Agreement are indexed to variable rates and expose us to direct interest rate risks that could lead to a material increase in our obligations. In the event of an interest rate increase, our unhedged variable-rate debt service obligations would increase, even if the amount borrowed remained the same and our net earnings and available cash flows to service the debt, including debt securities, would decrease, thus reducing the funds available to finance operations and future commercial opportunities. Under the New Senior Facilities Agreement, the Company agreed to, within 90 days from the Issue Date, enter into one or more hedging agreements to hedge against interest rate fluctuations in respect of 50% of the aggregate commitments under the New Senior Facilities Agreement. However, if interest rates increase dramatically, we could be unable to service our indebtedness. Furthermore, there can be no assurance that we will, or will be able to, hedge our full exposure or that our hedging transactions will be effective. The use of derivatives is a highly specialized activity that involves investment techniques and risks different from those associated with our ordinary business. Depending on market conditions and movements in interest rates, our use of hedging transactions could enhance or harm our overall performance compared to our competitors. In addition, we will be subject to the creditworthiness of the counterparties under our hedging transactions, and we will be exposed to the risk of insolvency or default on the part of our hedge counterparties. Our business, financial condition and results of operations could be materially and adversely affected in the event that one or more of these risks materialize. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosure About Market Risk—Interest rate risk.”

The security interests in the Collateral may be subject to certain defenses that may adversely affect their validity and enforceability. Enforcement of the security interest in the Collateral will be subject to certain generally available defenses or, in some cases, to limitations contained in the terms of the Collateral designed to ensure full compliance with applicable statutory requirements. These defenses may include those that relate to fraudulent conveyance or transfer, voidable preference, financial assistance, corporate purpose, capital maintenance or similar laws, regulations or defenses affecting the rights of creditors generally. If one or more of these defenses are applicable, the security interests in the Collateral may be void or may not be enforceable. 36

The Issuer, which is the grantor of the security interests in the Collateral as of the Issue Date, is organized under the laws of France. Under French fraudulent conveyance and other laws, a court or, for example, an insolvency administrator or a liquidator, could subordinate, void or otherwise declare unenforceable against third parties any security interest in the Collateral and, if payment had already been made under the relevant security interest, require that the recipient return the payment to the relevant grantor, if such court, insolvency administrator or liquidator, found that, among other things: • the relevant security interest was granted with actual intent to give preference to one creditor over another, hinder, delay or defraud creditors or shareholders of the grantor or the beneficiary was aware that the grantor was insolvent when it granted the relevant security interest; • the relevant security interest is prejudicial to the interests of the other creditors and the grantor and the beneficiary of such security interest were aware of or should have been aware of the fact that the granting of such security interests would defraud the other creditors’ rights (i.e., where the granting of such security interest was for no consideration, in which case the fraudulent intent of the beneficiary need not be proven) (see “Limitations on Enforcement of French Security Interests and Certain Insolvency Law Considerations—Fraudulent Conveyance in France”); • the relevant security interest was granted before the commencement of judicial reorganization proceedings and may fall within the so-called suspect period (période suspecte) (see “Limitations on Enforcement of French Security Interests and Certain Insolvency Law Considerations—Void and Voidable Transactions”); • the grantor did not receive fair consideration or reasonably equivalent value for the relevant security interest and the grantor: (i) was insolvent at the time of the grant or rendered insolvent because of such security interest; (ii) was undercapitalized or became undercapitalized at the time of the grant because of such security interest; or (iii) intended to incur, or believed that it would incur, indebtedness beyond its ability to pay at maturity; • the relevant security interest was held to exceed the corporate objects of the grantor or not to be in the best interests or for the corporate benefit of the grantor; or • the amount paid or payable under the relevant security interests was in excess of the maximum amount permitted under applicable law. Under French law, a company will generally be deemed insolvent (en état de cessation des paiements) when it is unable to pay its debts as and when they fall due with its available assets, taking into account available credit lines, existing rescheduling agreements and debt moratoria. In addition, it is possible that the grantor of the security interests, or a creditor thereof, or the bankruptcy trustee or (preliminary) insolvency administrator in the case of a bankruptcy of the grantor of the security interests, may contest the validity and enforceability of the relevant security interest on any of the above grounds and that the applicable court may determine that any such security interest should be limited or voided. As a result, the grantor’s liability under its security interests could be materially reduced or eliminated. To the extent that the security interest in the Collateral is found to be unenforceable, the Notes would become unsecured obligations of the Issuer and be effectively subordinated to all secured liabilities of the Issuer, to the extent of the value of the property and assets securing such other indebtedness. Future security interests in the Collateral would be subject to similar limitations. For more information about defenses to enforcement proceedings relating to security interests in the Collateral in France, see “Limitations on Validity and Enforceability of the Security Interests and Certain Insolvency Law Considerations.”

Security interests in the Collateral will be granted to the Security Agent rather than directly to the holders of the Notes. The ability of the Security Agent to enforce the Collateral may be restricted by local law and other procedural constraints. The security interests in the Collateral that will secure the obligations of the Issuer under the Notes will not be granted directly to the holders of the Notes but will be granted only in favor of the Security Agent, as Parallel Debt Creditor. The Indenture will provide that only the Security Agent has the right to enforce such security documents under which the security interests over the Collateral have been or will be created. As a consequence, holders of the Notes will not have direct security interests in the Collateral and will not be entitled to take enforcement action in respect of the Collateral, except through the Trustee, who will provide instructions (subject to the provisions of the Indenture) to the Security Agent. This parallel debt structure is used in jurisdictions where legal requirements relating to the creation and ongoing valid existence of security interests are linked with the original secured claims and where certain actions under the debt documents 37

may cause invalidity of the security interests in the Collateral under local law. The parallel debt is in the same amount and payable at the same time as the obligations of the Issuer under the Notes, and any payment in respect of the principal obligations will discharge the corresponding parallel debt obligations and any payment in respect of the parallel debt will discharge the corresponding principal obligations. See “Limitations on Validity and Enforceability of the Security Interests and Certain Insolvency Law Considerations.” None of the parallel debt constructs have been generally recognized by French courts. There is only one published decision of the French Supreme Court (Cour de cassation) on parallel debt mechanisms (Cass. com. 13 September 2011 number 10-25533 Belvedere). The decision, rendered in the context of safeguard proceedings opened in France, held that, subject to certain conditions being met, the concept of parallel debt governed by the laws of the State of New York was not incompatible with the French law concept of international public policy (ordre public international). This decision cannot be considered as a general recognition of the enforceability in France of the rights of a security agent benefiting from a parallel debt obligation and no assurance can be given that such a structure will be effective in all cases before French courts. To the extent that the security interests in the Collateral created under the parallel debt structure are successfully challenged by other parties, holders of the Notes will not receive any proceeds from an enforcement of the security interests in the Collateral. Furthermore, holders of the Notes will bear the risks associated with the possible insolvency or bankruptcy of the Security Agent. The grant of security interests in the Collateral in favor of the Security Agent may be voidable by the grantor or by an insolvency trustee, liquidator, receiver or administrator or by other creditors, or may be otherwise set aside by a court, if certain events or circumstances exist or occur, including, among others, if the grantor is deemed to be insolvent at the time of the grant. Finally, the security interests in the Collateral will be subject to practical problems generally associated with the enforcement of security interests in collateral. For example, we cannot assure you that the consents of any third parties (where required) will be given when required to facilitate a foreclosure on such assets.

If any Intercreditor Agreement is entered into in the future, the holders of the Notes will be subject to certain limitations on their ability to enforce the Collateral. In the event that the Issuer incurs certain indebtedness permitted by the Indenture to share in the Collateral, it will, without the consent of holders of the Notes, enter into an intercreditor agreement (an “Intercreditor Agreement”) with the Trustee, the Security Agent and the lenders or agents under the new indebtedness within certain specified parameters; see “Description of the Notes—Intercreditor Agreements.” The Intercreditor Agreement will govern, among other things, the ranking of indebtedness and enforcement of the Collateral by the lenders under the secured indebtedness (including, for purposes of the Intercreditor Agreement, the holders of the Notes and the Trustee, and any future secured creditors) (together with the lenders, the “Senior Lenders”) and certain hedge counterparties (together with the Senior Lenders, the “Senior Creditors”). The Intercreditor Agreement will provide that for purposes of the enforcement of the Collateral, the Security Agent shall act on the instructions of the instructing group which, pursuant to the terms of the Intercreditor Agreement, will act upon the instructions of the Senior Creditors whose commitments exceed 50% or more of the aggregate commitments under the secured indebtedness. These arrangements could be disadvantageous to the holders of the Notes in a number of respects. For example, the Issuer or one or more of its subsidiaries could seek protection under applicable bankruptcy laws, or the value of certain Collateral could otherwise be impaired or reduced in value during the period required by the Senior Creditors to coordinate and act in accordance with the Intercreditor Agreement. Further, as the Intercreditor Agreement does not exist on the Issue Date and the parties are not identified in full, we cannot assure you that any Intercreditor Agreement will be entered into on terms which are considered customary as of the Issue Date. While certain Fundamental Intercreditor Rights (as defined in “Description of the Notes”) are specified, there may be other terms of the Intercreditor Agreement which may limit your rights with respect to enforcement of the Collateral or may allow certain other parties to take enforcement action with respect to the Collateral in a manner disadvantageous to holders of the Notes. While these terms will be customary for capital structures which include pari passu financings, this is a developing market and we cannot assure you that what become customary terms for such Intercreditor Agreements will be no less advantageous for bondholders as such arrangements are as of the Issue Date. In addition, if we incur substantial additional indebtedness which may be secured on the Collateral, the holders of the Notes may not comprise the majority of the Senior Creditors for purposes of instructing the Security Agent. If the Notes do not make up a majority of the relevant instructing Senior Creditors, the holders of the Notes may be bound by decisions of creditors under our other debt instruments, which may result in enforcement action, or absence thereof in respect 38

of the Collateral, whether or not such action is approved by the holders of the Notes or may be adverse to such holders of the Notes. Furthermore, the Senior Creditors may have interests that are different from each other, and in particular, from the interests of holders of the Notes and they may not elect to pursue their remedies under the security documents at a time when it would otherwise be advantageous for the holders of the Notes to do so. Also, it is possible that disputes may occur between the holders of the Notes and creditors under our other secured indebtedness as to the appropriate manner of pursuing enforcement remedies with respect to the Collateral.

Rights in the security interests in the Collateral may be adversely affected by the failure to perfect such security interests or to properly discharge pre-existing security interests in the Collateral. Under applicable law, a security interest in certain assets can only be properly perfected, and its priority retained, through certain actions undertaken by the secured party and the grantor of the security. The security interests in the Collateral securing the Notes may not be perfected with respect to the claims of the Notes if we, or the Security Agent, fail or are unable to take the actions required to perfect any of these security interests. The Collateral includes a pledge governed by French law over a securities account (nantissement de compte de titres financiers) in which the shares of the Company are registered. Under French law, the securities account pledge agreement will be validly established and perfected after execution of a statement of pledge (déclaration de nantissement de compte de titres financiers) by the Issuer in favor of the beneficiary and registration of such statement of pledge in the relevant securities’ account of the Issuer. No assurance can be given on the priority of a security interest if it is not so registered. To the extent that the security interests are not registered, the holder of the security interest may have difficulty enforcing their rights in the Collateral as against third parties, including a trustee in bankruptcy and other creditors who claim a security interest in the same Collateral. In addition, since the ranking of pledges is determined by the date on which they became enforceable against third parties, a security interest created on a later date over the same Collateral, but which came into force for third parties earlier (by way of registration in the appropriate register or by notification) has priority. None of the Trustee or the Security Agent has any obligation to monitor the acquisition of additional property or rights that constitute Collateral or the perfection of any security interest in any Collateral securing the Notes, or to take steps to perfect such security interests against third parties.

The Notes will be secured only to the extent of the value of the Collateral that has been granted as security for the Notes and future debt may be secured by assets that do not secure the Notes. The Notes will be secured only to the extent of the value of the Collateral described in these Listing Particulars. See “Description of the Notes—Security—The Collateral.” The Collateral may also secure additional debt ranking pari passu with the Notes (which may be structurally senior to the Notes) to the extent permitted by the terms of the Indenture. The rights of the holders of the Notes may therefore be diluted by any increase in the debt secured by the Collateral or a reduction of the Collateral securing the Notes. Furthermore, the Notes will only be secured by the K&B Share Pledge and, until the first interest payment date on the Notes, a pledge of the Designated Bank Account. A substantial portion of the assets of the Group will not secure the Notes, and the Indenture will allow the Issuer and its restricted subsidiaries to secure certain debt permitted to be incurred under the Indenture (which may be structurally senior to the Notes) with the property and assets of the Issuer or its restricted subsidiaries that do not secure the Notes. The value of such assets and property could be significant. The Notes will not benefit from the assets or property securing such debt and will rank equally with the holders of other unsecured debt of the Issuer with respect to any property or asset that is excluded from the Collateral securing the Notes. In addition, if such secured debt is structurally senior to the Notes, then claims of the holders of the Notes will be subordinated to claims of all creditors of the subsidiary that incurred such secured debt (including trade creditors, secured creditors and any other creditors holding debt or guarantees issued by such subsidiary). Additionally, the value of the K&B Shares will depend on many factors, including, among others, whether or not the business is sold as a going concern, whether the assets can be sold in an orderly sale, the prevailing macroeconomic conditions in the relevant location, whether buyers are available and able to purchase the K&B Shares and whether any approvals required in connection with the purchase of the business would be granted to a prospective buyer of the K&B Shares. Proceeds from enforcement over the K&B Shares may provide for only limited repayment of the Notes, in part because such shares may not be liquid at the time of enforcement and their value to third parties may be less than their value to us. 39

Finally, the Indenture will allow us to sell shares of the Company that we hold and that secure the Notes, subject to certain conditions. There are additional circumstances other than repayment or discharge of the Notes under which the Collateral will be released without your consent or the consent of the Trustee or the Security Agent. See “Description of the Notes—Release of Liens” and “—There are circumstances other than repayment or discharge of the Notes under which the Collateral securing the Notes will be released without your consent or any action on the part of the Security Agent to obtain your consent.”

There are circumstances other than repayment or discharge of the Notes under which the Collateral securing the Notes will be released without your consent or any action on the part of the Security Agent to obtain your consent. Under various circumstances, Collateral securing the Notes will be released without the consent of the holders of the Notes or any action on the part of the Trustee or the Security Agent to obtain such consent, including the following: • in connection with any disposition of the Collateral, other than to the Issuer or any of its restricted subsidiaries, as permitted by the Indenture; • as may be permitted by the covenant described under “Description of the Notes—Certain Covenants—No Impairment of Security Interest;” • upon legal defeasance, covenant defeasance or discharge of the Indenture; • as may be permitted by the provisions described under “Description of the Notes—Amendments and Waivers;” • as may be permitted by the covenant described under “Description of the Notes—Certain Covenants—Merger and Consolidation;” • in connection with certain enforcement actions taken under any intercreditor agreement; and • with respect to the lien on the Designated Bank Account, upon the first interest payment on the Notes.

Investors may not be able to recover in civil proceedings for U.S. securities law violations. The Issuer and its subsidiaries are organized outside the United States, and their business is conducted entirely outside the United States. The directors and executive officers of the Issuer are non-residents of the United States. Although the Issuer will submit to the jurisdiction of certain New York courts in connection with any action under U.S. securities laws or under the Indenture, you may be unable to effect service of process within the United States on the directors and executive officers of the Issuer. In addition, because the assets of the Issuer and its subsidiaries and all or a majority of the assets of their respective directors and executive officers are located outside the United States, you may be unable to enforce judgments obtained in U.S. courts against them. Moreover, actions of the Issuer may not be subject to the civil liability provisions of the federal securities laws of the United States. See “Service of Process and Enforcement of Civil Liabilities.”

The United States is not currently bound by a treaty providing for reciprocal recognition and enforcement of judgments, other than arbitral awards, rendered in civil and commercial matters with France. There is, therefore, doubt as to the enforceability in France of civil liabilities based upon U.S. securities laws in an action to enforce a U.S. judgment in France. In addition, the enforcement in France of any judgment obtained in a U.S. court based on civil liabilities, whether or not predicated solely upon U.S. federal securities laws, will be subject to certain conditions. There is also doubt that a French court would have the requisite power or authority to grant certain remedies sought in an original action brought in France on the basis of U.S. securities laws violations. For further information, see “Service of Process and Enforcement of Civil Liabilities.”

French insolvency laws may not be as favorable to you as the insolvency laws of the United States or other countries. We conduct all of our business activity in France and, to the extent that the center of our main interests is deemed to be in France, French law would apply to proceedings affecting creditors, including mandat ad hoc proceedings (procédure de mandat ad hoc), conciliation proceedings (procédure de conciliation), safeguard proceedings (procédure de sauvegarde), accelerated financial safeguard proceedings (procédure de sauvegarde financière accélérée), judicial reorganization (redressement judiciaire) and judicial liquidation proceedings (liquidation judiciaire). In general, French insolvency legislation favors the continuation of the business and the protection of employment over the protection of creditors and could limit your ability to enforce your rights under the Notes and corresponding security interests.

For further discussion of certain insolvency proceedings governed by French law and enforceability issues as they relate to the Notes and the Collateral, see “Limitations on Validity and Enforceability of the Security Interests and Certain Insolvency Law Considerations.”

French tax legislation may restrict the deductibility, for French tax purposes, of all or a portion of the interest on our indebtedness incurred in France. Under Article 212 § II of the French Code général des impôts (the “French Tax Code”), deduction of interest paid on loans granted by a related party or on loans granted by a third party but guaranteed by a related party (third party assimilated to a related party) is allowed under certain conditions but subject to limitations. Deductions for interest paid on such loans may be partially disallowed in the fiscal year during which they are incurred if such interest payments exceed each of the following: (i) the amount of interest multiplied by the ratio of (a) 1.5 times the company’s net equity and (b) the average amount of indebtedness owed to related parties (or to third parties assimilated to related parties) over the relevant fiscal year; (ii) 25% of the company’s earnings before tax and extraordinary items (as adjusted for the purposes of these limitations); and (iii) the amount of interest received by the company from related parties. Deductions may be disallowed for the portion of interest that exceeds in a relevant fiscal year the highest of the above three limitations if such portion of interest exceeds €150,000, unless the company is able to demonstrate for the relevant fiscal year that the indebtedness ratio of the group to which it belongs is higher than or equal to its own indebtedness ratio. Specific rules apply to companies that belong to a French tax-consolidated group. In addition, Article 209 § IX of the French Tax Code imposes restrictions on the deductibility of interest expenses incurred by a French company if such company has acquired shares of another company qualifying as “titres de participation” within the meaning of Article 219 I A quinquies of the French Tax Code and if such acquiring company cannot demonstrate, with respect to the fiscal years running over the twelve-month period from the acquisition of the shares (or with respect to the first fiscal year commencing after January 1, 2012 for shares acquired during a fiscal year that commences prior to such date), that (i) the decisions relating to such acquired shares are actually taken by the company having acquired them (or, as the case may be, by a company controlling the acquiring company or by a company directly controlled by such controlling company, within the meaning of Article L 233-3 § I of the French Code de commerce (the “French Commercial Code”), that is located in France) and (ii) where control or an influence is exercised over the acquired company, such control or influence is exercised by the acquiring company (or, as the case may be, by a company controlling the acquiring company or by a company directly controlled by such controlling company, within the meaning of Article L 233-3 § I of the French Commercial Code, that is located in France). It should be noted that further limitations may apply under French tax law with respect to interest payments made in relation to financial indebtedness. In particular, Article 212 bis of the French Tax Code provides for a general limitation of deductibility of net financial charges, subject to certain exceptions. Adjusted net financial charges incurred by French companies that are not members of a French tax group are deductible from their taxable result only up to 85% of their amount in respect of fiscal years ended as from December 31, 2012 and only up to 75% of their amount in respect of fiscal years opened as from January 1, 2014, to the extent that such companies’ financial charges (net of financial income) exceeds €3 million in a given fiscal year. Under Article 223 B bis of the French Tax Code, special rules apply to companies that belong to French tax-consolidated groups. The 85% or 75% limitation is factored on the basis of the consolidated group’s taxable result and applies to the adjusted aggregate net financial charges incurred by companies that are members of the French tax consolidated group with respect to amounts made available by companies that are not members of such tax group, to the extent that the tax group companies’ aggregated financial charges (net of financial income) exceeds €3 million in a given fiscal year. According to Article 212 § I of the French Tax Code, as amended by the Finance Law for 2014, for fiscal years ending as from September 25, 2013, interest on sums made available by a related entity lender is deductible provided that the borrower demonstrates, at the French tax authorities’ request, that said interest is subject, at the level of such lender for the fiscal year in progress, to an income tax amounting to at least one quarter of the corporate income tax determined under standard French tax rules. For a foreign lender, such tax shall mean the French corporate income tax to which it would have been liable if it had been domiciled or established in France. Specific rules apply where the lender is a pass-through entity for French tax purposes or a UCITS or a similar entity. Our ability to deduct interest accrued on our indebtedness incurred in France may be limited by the aforementioned tax rules which, as a consequence, may increase our tax burden and reduce the cash flow available to service our indebtedness, which could adversely affect our business, financial condition and results of operations.

Transfer of the Notes will be restricted, which may adversely affect the value of the Notes. Because the Notes have not been, or will not be, and are not required to be, registered under the U.S. Securities Act or the securities laws of any other jurisdiction, they may not be offered or sold in the United States except to QIBs in accordance with Rule 144A, to non-U.S. persons outside the United States in offshore transactions in accordance with Regulation S or pursuant to another exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and all other applicable laws. These restrictions may limit the ability of investors to resell the Notes. It is the obligation of investors in the Notes to ensure that all offers and sales of the Notes within the United States and other countries comply with applicable securities laws. See “Notice to Investors” and “Transfer Restrictions.”

There may not be an active trading market for the Notes, in which case your ability to sell the Notes will be limited. The Notes are new issues of securities for which there is currently no established trading market. We cannot assure you as to: • the liquidity of any market in the Notes; • your ability to sell your Notes; or • the prices at which you would be able to sell your Notes. Future trading prices of the Notes will depend on many factors, including, among other things, prevailing interest rates, our operating results and the market for similar securities. The liquidity of a trading market for the Notes may be adversely affected by a general decline in the market for similar securities. Historically, the market for non-investment grade securities has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the Notes. Any such disruption may have a negative effect on you, as a holder of Notes, regardless of our prospects and financial performance. The Initial Purchasers have advised that they intend to make a market in the Notes after completing the Offering. However, they have no obligation to do so and may discontinue market-making activities at any time without notice. In addition, such market-making activity will be subject to limitations imposed by the U.S. Securities Act and other applicable laws and regulations. As a result, there may not be an active trading market for the Notes. If no active trading market develops, you may not be able to resell your Notes at a fair value, if at all.

The Notes may not remain listed on the Irish Stock Exchange. Although the Issuer has agreed to use its commercially reasonable efforts to maintain a listing on the Official List of the Irish Stock Exchange as long as the Notes are outstanding, the Issuer cannot assure you that the Notes will remain listed. If the Issuer cannot maintain the listing on the Official List of the Irish Stock Exchange and the admission to trading on the Global Exchange Market or it determines that it will not maintain such listing, the Issuer may cease to make or maintain such listing on the Official List of the Irish Stock Exchange, provided that it will use its commercially reasonable efforts to obtain and maintain the listing of the Notes on another recognized stock exchange, although there can be no assurance that the Issuer will be able to do so. Although no assurance is made as to the liquidity of the Notes as a result of listing on the Official List of the Irish Stock Exchange or another recognized listing exchange for comparable issuers in accordance with the Indenture, failure to be approved for listing or the delisting of the Notes from the Official List of the Irish Stock Exchange or another listing exchange in accordance with the Indenture may have a material adverse effect on a holder’s ability to resell Notes in the secondary market.

The Notes will initially be held in book-entry form and therefore investors must rely on the procedures of the relevant clearing systems to exercise any rights and remedies. The Notes will initially only be issued in global certificated form and held through Euroclear and Clearstream. Interests in the global Notes will trade in book-entry form only, and Notes in definitive registered form, or definitive registered Notes, will be issued in exchange for book-entry interests only in very limited circumstances. Owners of book- entry interests will not be considered owners or holders of Notes. The common depositary, or its nominee, for Euroclear and Clearstream will be the sole registered holder of the global notes representing the Notes. Payments of principal, interest and other amounts owing on or in respect of the global notes representing the Notes will be made to the paying agent, which will make payments to Euroclear and Clearstream. Thereafter, these payments will be credited to participants’ accounts that hold book-entry interests in the global Notes representing the Notes and credited by such participants to indirect participants. After payment to the common depositary for Euroclear and Clearstream, the Issuer will have no responsibility or liability for the payment of interest, principal or other amounts to the owners of book-entry interests. Accordingly, if investors own a book- 42

entry interest, they must rely on the procedures of Euroclear and Clearstream, and if investors are not participants in Euroclear and Clearstream, they must rely on the procedures of the participant through which they own their interest, to exercise any rights and obligations of a holder of Notes under the Indenture. Unlike the holders of the Notes themselves, owners of book-entry interests will not have the direct right to act upon the Issuer’s solicitations for consents, requests for waivers or other actions from holders of the Notes. Instead, if an investor owns a book-entry interest, it will be permitted to act only to the extent it has received appropriate proxies to do so from Euroclear and Clearstream. The procedures implemented for the granting of such proxies may not be sufficient to enable such investor to vote on a timely basis. Similarly, upon the occurrence of an event of default under the Indenture, unless and until definitive registered Notes are issued in respect of all book-entry interests, if investors own book-entry interests, they will be restricted to acting through Euroclear and Clearstream. The procedures to be implemented through Euroclear and Clearstream may not be adequate to ensure the timely exercise of rights under the Notes. See “Book-Entry; Delivery and Form.”

Credit ratings may not reflect all risks, are not recommendations to buy or hold securities and may be subject to revision, suspension or withdrawal at any time. One or more independent credit rating agencies may assign credit ratings to the Notes. The ratings may not reflect the potential impact of all risks related to the structure, market, additional risk factors discussed above and other factors that may affect the value of the Notes. A credit rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal by the rating agency at any time. No assurance can be given that a credit rating will remain constant for any given period of time or that a credit rating will not be lowered or withdrawn entirely by the credit rating agency if, in its judgment, circumstances in the future so warrant. A suspension, reduction or withdrawal at any time of the credit rating assigned to the Notes by one or more of the credit rating agencies may adversely affect the cost and terms and conditions of our financings and could adversely affect the value and trading of the Notes.

USE OF PROCEEDS The aggregate principal amount of the Notes is €370.0 million. The Issuer intends to use the gross proceeds from the Offering of the Notes to (a) repay in full its existing outstanding indebtedness under the Existing FG8 Senior Facilities, which amounts to €321.0 million, (b) prefund interest payable on the Notes for the first interest period and for general corporate purposes, (c) repurchase 216,839,458 preference shares from CA-CIB for a total purchase price of €17.0 million and (d) pay the costs, fees and expenses incurred in connection with the Offering, including underwriting commissions and fees for legal, accounting, printing, ratings advisory and other professional services. The following table illustrates the estimated sources and uses of the proceeds from the Offering of the Notes on the Issue Date. Actual amounts may vary from estimated amounts depending on several factors, including differences between estimated expenses and realized expenses related to the Offering.

Sources of Funds Amount Uses of Funds Amount

(in € millions) (in € millions) Notes offered hereby ...... 370.0 Repayment of Existing FG8 Senior Facilities(1) ...... 321.0

Cash on balance sheet(2) ...... 20.9

Preference Share Repurchase(3) ...... 17.0

Estimated fees and expenses(4) ...... 11.1

Total Sources ...... 370.0 Total Uses ...... 370.0

Principal Amount Facility Outstanding(a) Capitalized Interest(b) Maturity Interest rate(b)

(in € thousands) (in € thousands) Facility B1 ...... 48,986 3,004 July 10, 2015 8.00% Facility B2 ...... 70,434 4,320 July 10, 2015 8.00% Facility C1 ...... 49,159 3,015 July 10, 2016 8.00% Facility C2 ...... 70,670 4,334 July 10, 2016 8.00% HoldCo Revolving Facility ...... 33,129 2,032 July 10, 2015 8.00% HoldCo Hedging Debt ...... 30,039 1,842 July 10, 2015 8.00% Mezzanine Agency Fee Debt ...... 49 3 July 10, 2015 8.00%

Total ...... 302,468 18,551

CAPITALIZATION The following table sets forth the cash and consolidated capitalization of the Issuer as of November 30, 2013 on an actual basis and as adjusted to give effect to the Transactions, as if they had occurred on November 30, 2013. The financial information in the table below has been derived from the English translation of the audited condensed consolidated financial statements of the Issuer for the financial year ended November 30, 2013, included elsewhere in these Listing Particulars. The Issuer is a holding company with no material operations of its own. The table below should be read in conjunction with “Summary—The Transactions,” “Selected Historical Consolidated Financial Information,” “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Description of Other Indebtedness,” “Description of the Notes,” the English translation of our consolidated financial statements and the related notes included elsewhere in these Listing Particulars.

As of November 30, 2013

Actual As Adjusted

(unaudited)

(in € millions) Cash and cash equivalents at Company(1) ...... 188.3 95.8 Cash and cash equivalents at Issuer(2) ...... 2.1 31.0

Cash and cash equivalents ...... 190.3 126.8

At Company

Existing K&B Senior Facilities Facility B3 ...... 101.5 — Facility B4 ...... 19.2 — Facility C3 ...... 102.1 — Facility C4 ...... 14.9 — Target Revolving Facility ...... — — Other short-term debt(3) ...... 0.6 0.6

New Senior Credit Facilities Facility A ...... — 50.0 Facility B ...... — 100.0 Unamortized transaction costs at Company(4) ...... — (4.8) New Revolving Credit Facility ...... — —

At Issuer

Existing FG8 Senior Facilities Facility B1 ...... 49.0 — Facility B2 ...... 70.4 — Facility C1 ...... 49.2 — Facility C2 ...... 70.7 — HoldCo Hedging Debt ...... 30.0 — HoldCo Revolving Facility ...... 33.1 — Mezzanine Agency Fee Debt ...... 0.0 — Accrued interest on Existing FG8 Senior Facilities ...... 10.5 — Unamortized transaction costs at Issuer (Existing FG8 Senior Facilities) ...... (1.1) — Other third-party financial debt(5) ...... 0.6 0.6 Notes offered hereby(6)...... — 370.0 Unamortized transaction costs at Issuer (Notes offered hereby) ...... — (11.1) Total third-party financial debt ...... 550.8 505.3

Attributable shareholder’s equity ...... (86.4) (104.4) Minority shareholders ...... 27.2 27.2 Total shareholder equity ...... (59.1) (77.2)

Total capitalization ...... 491.6 428.1 45

As of November 30, 2013

Actual As Adjusted

(unaudited)

(in € millions)

(1) In connection with the Refinancing, the Company will apply all amounts borrowed under the New Senior Credit Facilities as well as available cash and cash equivalents to repay in full all obligations under the Existing K&B Senior Facilities.

(2) The Issuer will use a portion of the proceeds of the Notes to make interest payments on the Notes for the first interest period and for general corporate purposes. The €29.0 million increase in cash and cash equivalents at Issuer corresponds to €20.9 million in cash on balance sheet and €8.1 million representing the difference between outstanding debt with respect to the Existing FG8 Senior Facilities as of November 30, 2013 and outstanding debt with respect to the Existing FG8 Senior Facilities as of March 31, 2014.

(3) Other short-term debt of the Company represents usage of credit facilities and the fair value of derivatives. (4) Unamortized transaction costs at Company represents the capitalization of transaction costs in relation to the New Senior Credit Facilities.

(5) Other third-party financial debt of the Issuer represents commitments given in 2008 to certain Company managers pursuant to a liquidity contract regarding the acquisition of 24,724 ordinary shares of the Company. The liquidity commitment amounted to €0.6 million as of November 30, 2013. On December 13, 2013, 7,104 ordinary shares of the Company were redeemed for €168,000, corresponding to a price of €23.70 per share. On January 27, 2014, 15,026 ordinary shares of the Company were redeemed for €356,000, corresponding to a price of €23.70 per share.

(6) The gross proceeds from the Offering will be used to (a) repay in full the Issuer’s existing outstanding indebtedness under the Existing FG8 Senior Facilities, which amounts to €321.0 million, (b) prefund interest payable on the Notes for the first interest period and for general corporate purposes, (c) repurchase 216,839,458 preference shares from CA-CIB for a total purchase price of €17.0 million, and (d) pay the costs, fees and expenses incurred in connection with the Offering, including underwriting commissions and fees for legal, accounting, printing, ratings advisory and other professional services. We will repurchase the 216,839,458 preference shares from CA-CIB after the Issue Date and these preference shares will be cancelled thereafter. CA-CIB will hold 465,180,900 preference shares after the Preference Share Repurchase, which will represent all of the preference shares of the Issuer at that time.

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION The following tables set forth certain selected historical consolidated financial information of the Issuer and its subsidiaries as of the dates and for each of the periods indicated. The Issuer’s consolidated financial statements have been prepared in accordance with IFRS. The data below is not necessarily indicative of results of future operations and should be read in conjunction with “Use of Proceeds,” “Capitalization,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the English translation of our consolidated financial statements and the notes thereto included elsewhere in these Listing Particulars. The selected consolidated financial information as of and for each of the financial years ended November 30, 2011, 2012 and 2013 was derived from the English translation of the Issuer’s audited consolidated financial statements, which are included elsewhere in these Listing Particulars.

Selected Consolidated Income Statement Data

For the year ended November 30,

2011 2012 2013

(in € thousands) Revenues ...... 1,044,255 1,030,046 1,025,954 Cost of sales ...... (847,278) (830,896) (830,011)

Gross margin ...... 196,977 199,150 195,943

Current operating profit ...... 83,104 82,140 75,070

Other non-recurring income ...... 1,734 1,538 5 Other non-recurring expenses ...... (952) (10) (6)

Operating income ...... 83,886 83,668 75,069

Financial expenses ...... (41,857) (30,831) (27,620) Financial income ...... 3,619 1,799 773

Cost of net financial debt ...... (38,238) (29,032) (26,848)

Other interest expense ...... (2,444) (1,699) — Other financial income...... 9,359 14,330 —

Pre-tax income of consolidated companies ...... 52,563 67,267 48,222

Income tax (expenses)/income ...... (26,707) (24,787) (21,675)

Net income of consolidated companies ...... 25,856 42,480 26,546

Share of income (loss) of equity affiliates and joint ventures ...... 955 (61) 642 Income/loss from assets held for sale ...... — — —

Income (loss) attributable to shareholders ...... 26,811 42,419 27,188

Minority interests ...... 15,165 13,571 14,838 Income attributable to shareholders ...... 11,646 28,848 12,350

Selected Consolidated Balance Sheet Data

As of November 30,

2011 2012 2013

Non-current assets ...... 241,671 242,890 265,163

Current assets...... 877,206 890,922 961,864

TOTAL ASSETS ...... 1,118,877 1,133,812 1,227,027

Shareholders’ equity ...... (94,750) (72,960) (59,123)

Non-current liabilities ...... 677,470 618,165 620,100

Current liabilities ...... 536,156 588,607 666,050

TOTAL EQUITY AND LIABILITIES ...... 1,118,877 1,133,812 1,227,027

Selected Consolidated Cash Flow Data

As of and for the year ended November 30,

2011 2012 2013

(in € thousands) Cash flow from operating activities ...... 70,440 155,778 77,555 Cash flow from investing activities ...... 4,564 6,145 (21,450)

Free cash flow ...... 75,004 161,923 56,105 Cash flow from financing activities ...... (74,960) (147,242) (21,572)

Increase (decrease) in cash ...... 44 14,681 34,533 Cash at beginning of year ...... 141,062 141,106 155,787 Cash at end of year ...... 141,106 155,787 190,321

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations is based upon the consolidated financial information of the Issuer and should be read in conjunction with the English translation of the consolidated financial statements of the Issuer and the notes thereto included elsewhere in these Listing Particulars. You should also review the information in the section “Presentation of Financial and Other Information.” The consolidated financial information of the Issuer has been prepared in accordance with IFRS. The consolidated financial statements of the Issuer as of and for the financial years ended November 30, 2011, 2012 and 2013 have been audited by Ernst & Young et Autres, statutory auditors. The following discussion and analysis of our financial condition and results of operations includes forward-looking statements that reflect our plans, estimates and beliefs, which are based on assumptions we believe to be reasonable. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in these Listing Particulars, particularly in “Risk Factors” and “Forward-Looking Statements.”

Overview We are the third-largest residential real estate developer in France by revenue and order volume, with a market share of 6.1% based on order volume in the financial year ended November 30, 2013. Over the course of our more than forty years of experience developing and building apartments, single-family homes, serviced accommodations and commercial property in France, we have built approximately 98,200 Housing units and 522,200 sq.m of office and commercial space in metropolitan France. We are involved in all aspects of the real estate development process, including land sourcing, obtaining building permits, project design, customer service and property sales. Construction for our programs is carried out by a general contractor or separate specialized contractors. We focus primarily on developing residential apartment units, as apartments have historically represented the largest, fastest growing and most stable segment of the French residential real estate market and have demonstrated sustained price resiliency. Sales of apartments accounted for 89.6% of our revenues in the financial year ended November 30, 2013. Our remaining revenues were derived from single-family home sales, Commercial programs, Showroom services and certain other activities, which accounted for 4.7%, 5.0%, 0.6% and 0.1%, respectively, of our revenues in the financial year ended November 30, 2013. In the financial year ended November 30, 2013, we had €1,026.0 million in total revenues, and our Adjusted EBITDA amounted to €93.1 million. We have structured our business model to minimize risks often associated with residential real estate development businesses, notably by securing land option contracts rather than building up land banks and by purchasing land in most cases only after achieving at least 50% pre-sale rates in our Housing segment and 100% pre-sale rates in our Commercial property segment. We do not purchase land for speculative purposes.

Our Business Segments and Product Lines We divide our business into three different segments: “Housing,” “Commercial property” and “Other operating activities.”

Housing Our Housing segment covers the development of apartments (including mixed-use buildings containing apartments, business premises, retail space or offices), single-family homes in communities (grouped homes) and serviced accommodations for corporate clients, tourists, students and independent seniors. This segment constitutes the core of our business and contributed 94.3% of our total revenues (or 96.3% of our gross margin) in the financial year ended November 30, 2013 compared to 97.1% and 94.2% of our total revenues in the financial years ended November 30, 2012 and 2011, respectively. We are present in major French cities where the local economy is strong enough to support a sizeable pool of potential customers with reliable sources of income. We focus more specifically on Île-de-France and on the Atlantic and Mediterranean coastal regions, which have offered the strongest economic and demographic growth and best development prospects for several years. Our Housing segment customers are traditional homebuyers (first- and second-time homebuyers) and investors (benefiting from the Scellier/Duflot, LMNP, LMP and other similar French tax incentives).

Commercial property Our Commercial property segment covers the development of high-quality office spaces that combine flexibility, adaptability and high technical performance. We usually either develop Commercial property programs on behalf of third parties (project management and real estate development contracts) or we sell the programs before completion to a final user or a specific investor. Our Commercial property segment generated 5.0% of our total revenues (or 3.1% of our gross margin) in the financial year ended November 30, 2013 compared to 2.0% and 4.7% of our total revenues in the financial years ended November 30, 2012 and 2011, respectively.

Other operating activities Our Other operating activities segment includes ancillary business activities related to our Housing segment, such as sales of undeveloped land and lots, project management and customer services known as “Showroom” activities. Our Other operating activities represented 0.7% of our total revenues (or 1.0% of our gross margin) in the financial year ended November 30, 2013 compared to 0.8% and 1.1% of our total revenues in the financial years ended November 30, 2012 and 2011, respectively. Land sales and external fees related to project management contracts generated 0.1% of our total revenues and our Showroom activities generated 0.6% of our total revenues in the financial year ended November 30, 2013.

Deliveries by business segment and product line The following table shows the breakdown of deliveries generated by our business segments and product lines for the past three financial years:

Financial year ended November 30, 2011 2012 2013

Deliverie Deliverie Deliverie s % of Total s % of Total Growth s % of Total Growth

(EHUs) (%) (EHUs) (%) (%) (EHUs) (%) (%) Apartments ...... 93.9 97.8 95.9 5,414 % 5,567 % 2.8% 5,606 % 0.7% Single-family homes 4.1 1.8 (57.3 4.0 239 % 102 % )% 233 % 128.4%

Total Housing ...... 98.1 99.6 0.3 99.9 3.0 5,653 % 5,669 % % 5,839 % % Commercial 0.4 0.2 (58.3 0.0 (80.0 property ...... 24 % 10 % )% 2 % )% Other(a) ...... 1.5 0.2 (87.4 0.1 (36.4 87 % 11 % )% 7 % )% Showroom ...... — — — — — — — —

Other operating 1.5 0.2 (87.4 0.1 (36.4 activities ...... 87 % 11 % )% 7 % )%

Total ...... 100.0 100.0 (1.3 100.0 2.8 5,764 % 5,690 % )% 5,848 % %

(a) Corresponds primarily to sales of undeveloped plots and external fees (project management contracts).

Our Geographical Operating Segments and Markets We organize our internal reporting to Group management under six geographical operating segments, namely Île-de- France, West, Southwest, Southeast, Rhône-Alpes and Other Regions (collectively, exclusive of Île-de-France, the “Regions”), and one corporate operating segment. In 2013, we extracted our Commercial property activities from our Other Regions operating segment to create a new reporting segment. Our six geographical operating segments are split into 14 regional divisions: Île-de-France (split into three), Loire- Atlantique/Bretagne, Normandie, Rhône-Alpes, Savoie/Grenoble, Côte d’Azur/Provence, Mediterranée (Bouches-du-Rhône), Languedoc-Roussillon, Midi-Pyrénées, Pyrénées-Atlantiques, Aquitaine and Lille-Flandres, through which we reach markets 50

in Annecy, Bayonne, Bordeaux, Grenoble, Lille, Lyon, Marseille, Montpellier, Nantes, Nice, Paris, Rennes, Rouen, Toulon and Toulouse.

Historically, our principal market has been Île-de-France, where we estimate that we are one of the largest real estate developers of single-family homes and apartments, with a market share of 12.0% for single-family homes and 11.1% for apartments in 2013, based on order volume. We have also identified opportunities in markets outside of Île-de-France, where demographic and sociological trends are supporting growth. We estimate that we are one of the largest real estate developers of single-family homes and apartments in Midi-Pyrénées, with market shares of 16.5% and 9.6%, respectively, in 2013, and one of the largest real estate developers of apartments in the West (Pays de la Loire and Brittany), with a market share of 9.3% in 2013, in each case based on order volume. In the financial year ended November 30, 2013, 42.1% of our total revenues were derived from activities in Île-de- France, compared to 44.7% and 36.3% in the financial years ended November 30, 2012 and 2011, respectively. The Regions represented 57.9% of our total revenues in the financial year ended November 30, 2013.

Deliveries by geographical operating segments The following table shows a breakdown of the number of deliveries generated by our geographical operating segments for the past three financial years:

Financial year ended November 30,

2011 2012 2013

Deliveries % of Total Deliveries % of Total Growth Deliveries % of Total Growth

(EHUs) % (EHUs) % % (EHUs) % % Île-de-France ... 33.4 40.6 20.1 40.9 3.4 1,925 % 2,312 % % 2,391 % % West(a) ...... 6.1 8.6 39.7 8.6 3.1 350 % 489 % % 504 % % Southwest(b) ..... 26.2 17.0 (35.9 17.2 3.8 1,512 % 969 % )% 1,006 % % Southeast(c) ...... 21.4 22.8 5.4 25.7 16.0 1,231 % 1,297 % % 1,505 % % Rhône-Alpes(d) . 11.4 9.8 (14.8 5.9 -38.4 657 % 560 % )% 345 % % I.E.(e) ...... — — — — — — — — Other 1.5 1.1 (29.2 1.7 54.0 Regions(f) .... 89 % 63 % )% 97 % % Corporate ...... — — — — — — — —

Total ...... 100.0 100.0 (1.3 100.0 2.8 5,764 % 5,690 % )% 5,848 % %

(a) The West segment encompasses the cities of Nantes and Rennes.

(b) The Southwest segment encompasses the cities of Toulouse, Bordeaux and Bayonne. As from the financial year 2014, the Montpellier operations will be accounted for in the Southwest segment.

(c) The Southeast segment encompasses the cities of Nice, Toulon, Marseille and Montpellier. As from the financial year 2014, the Montpellier operations will be accounted for in the Southwest segment. (d) The Rhône-Alpes segment encompasses the cities of Lyon, Grenoble and Annecy.

(e) In 2013, we extracted our Commercial property activities from our Other Regions segment to create a new reporting segment (“I.E.”). The Commercial property activities of the I.E. segment all took place in Île-de-France.

(f) The Other Regions segment encompasses the cities of Lille-Flandres, Strasbourg and Rouen. In 2013, we extracted our Commercial property activities from our Other Regions segment to create a new reporting segment. These Commercial property activities all took place in Île-de-France.

Key Factors Affecting Our Results of Operations Macroeconomic environment Our business is affected by macroeconomic factors that shape demand for housing in France, including economic growth, unemployment rates, fluctuations in interest rates and real estate prices. These factors impact the housing inventory available for sale, which directly influences our activities.

Market Data

For the year ended December 31,

France 2011 2012 2013

Macroeconomic data Gross domestic product growth ...... 2.0% 0.0% 0.3% Unemployment rate ...... 9.4% 10.2% 10.2% Average interest rate (Banque de France) ...... 3.8% 2.6% 2.3%

(1) Based on number of reservations.

Operating Data

For the year ended November 30,

Kaufman & Broad 2011 2012 2013

Deliveries (sale price) Average sale price per sq.m of apartments delivered (Île-de-France)(4) ...... €4,767 €4,324 €3,915 Average sale price per sq.m of apartments delivered (Regions)(4)...... €3,888 €4,050 €3,930 Average sale price of single-family homes delivered (Île-de-France)(3) ...... €301,771 €252,491 €313,000 Average sale price of single-family homes delivered (Regions) ...... €266,945 €238,774 €268,000

Backlog Total Housing backlog at end of period (EHUs)(2)(5) ...... 6,736 6,550 6,105 Total Housing backlog at end of period (in € thousands, excl. VAT)(5) ...... 1,160,381 1,091,105 965,142 52

For the year ended November 30,

Kaufman & Broad 2011 2012 2013

Programs Programs being marketed at end of period(6) ...... 168 163 167

(1) Net Housing orders is the number of orders recorded during a given financial year, i.e., the number of orders signed by customers during the financial year less the number of canceled orders during the financial year. Orders in volume for the Group are expressed in units. Units define the number of housing units or equivalent housing units (for mixed-use programs) for any given program. Units are calculated on a per-program basis, with the following being considered as housing units: “apartments,” “single-family homes in communities” and “subdivisions and building lots.” Consequently, a housing unit (or lot) is equal to one unit.

(2) Apartment deliveries, single-family home deliveries, Housing deliveries and Commercial property deliveries directly reflect the sales concluded during the period. “EHUs” refers to Equivalent Housing Units. The number of EHUs is calculated on a per-program basis and is equal to the product of (i) the number of homes for a given program for which the notarized deed of sale has been signed, multiplied by (ii) the ratio between the amount of the land and costs incurred by the Group for the program and the total budgeted costs for the program. Thus, a home sold under a program for which 30% of total costs have been incurred would result in an EHU of 0.3.

(3) Average sale price of apartments delivered and average sale price of single-family homes delivered includes VAT.

(5) For VEFA sales, backlog covers (i) all ordered units for which a notarized deed of sale has not yet been signed in connection with programs for which we have not yet purchased land; (ii) all ordered units for which a notarized deed of sale has not yet been signed in connection with programs for which we have purchased land; and (iii) the portion of ordered but undelivered units for which a notarized deed of sale has been signed that has not yet been recognized as revenue (for a unit program that is 30% complete, 30% is accounted for as sales, and 70% remains in the backlog). The backlog is a summary at any given moment, which gives a projection of future revenues for the coming months and serves as a basis for the Group’s forecasts. Because a portion of our backlog corresponds to units for which we have not yet signed a notarized deed of sale and, in some cases, for which we have not yet purchased the land on which the program will be located, we can give no assurances and provide no guarantee that anticipated revenue will be recognized in accordance with our backlog data. (6) Programs being marketed at end of period represent the number of programs that entered the marketing phase during the relevant financial year.

Key Market Observations For a detailed discussion of key market data, see “Industry.”

Macroeconomic factors As a consequence of the difficult macroeconomic environment in France: • there has been little to no economic growth (GDP grew by 0.3% in 2013 according to estimates by the IMF, compared to 0.0% in 2012 according to INSEE); • unemployment rates have remained consistently high (10.2% in metropolitan France in 2013 and 2012); and • purchasing power has been restricted, due to income stagnation and tax constraints.

The housing market Accordingly, the financial means of potential homebuyers have deteriorated and the real estate markets in which we operate have remained weak. For example, in 2013: • order volumes dropped to their lowest level since 2000 for new-build units (approximately 87,700 in 2013 according to the French Ministry of Ecology, Sustainable Development and Energy, compared to 88,904 in 2012 and 105,000 in 2011 according to data published in the ECLN), as well as for existing homes (approximately 668,000 in the year ended December 31, 2013, according to FNAIM estimates); • individual investors remained underrepresented among homebuyers for the second year in a row, accounting for 40% of homebuyers in 2013, compared to 43% in 2012 and 55% on average over the 2005-2011 period according to data published by the FPI; • despite historically low interest rates, the prices of existing homes dropped by an average of 2.9% according to FNAIM estimates and the prices of new-builds remained almost flat, with average prices varying markedly depending on the region, the size of the population centers and the location of the housing units within these centers; 53

• take-up periods reached 14 months, compared to an average of 7.7 months for the period between 2000 and 2010 according to data published by the Crédit Agricole Group; • the number of housing units under construction was down 3.2% for the year, with 294,465 new units in 2013 compared to 304,234 units in 2012, according to data published by the French Ministry of Ecology, Sustainable Development and Energy; and

• the number of housing units authorized to be built fell by 12.3% to 377,170 units compared to 429,851 units in 2012, according to data published by the French Ministry of Ecology, Sustainable Development and Energy.

The commercial real estate market The French commercial real estate market also deteriorated in 2013. Notably: • there was a marked increase in vacant units compared to 2012; • rents experienced downward pressure and negotiated rent discounts rose significantly; and • large employers continued to delay or to suspend their plans to move into new offices.

Availability of financing for homebuyers Our customers rely on third-party financing to purchase homes. Our sales are impacted by the willingness and ability of banks and other lenders to provide financing to prospective homebuyers. Mortgage terms, including average duration, loan- to-value ratios and interest rates, could have a direct impact on demand for our products. The availability of financing is also affected by various macroeconomic factors (see “—Macroeconomic factors”).

Average Mortgage Duration at Mortgage Signing (in years)

Source: Observatoire Crédit Logement

Average Mortgage Interest Rates* and Average Government Bond Rates in France (in %)

Sources: Banque de France average government bond rate and Observatoire Crédit Logement * All markets, exclusive of insurance, last month of the quarter, average

Tax and other governmental incentives Successive changes in the French tax regime have had a material impact on our activities as well as on our mix of customers. For example, investors taking advantage of the tax incentives enacted by the Scellier Law (2010) and the Duflot Law (2013), each as defined herein, accounted for 23% of total orders (in volume and in value) in the financial year ended November 30, 2013, compared to 26% of total orders (in volume), or 24% of orders (in value), in the financial year ended November 30, 2012 and 37% of total orders (in volume), or 37% of orders (in value), in the financial year ended November 30, 2011. See “Business—Our Customers.” For a detailed discussion of French tax regimes that have affected the real estate market and home ownership in recent years, see “Industry—Tax incentives.” In addition, certain other governmental programs relating to the real estate and property development sectors also affect our results of operations. These may include urban planning rules and construction standards, environmental regulations, consumer protection initiatives, health and safety regulations, labor regulations, rules governing the issuance of building and demolition permits and any policies or incentives enacted to protect the interests of stakeholders, including property investors and tenants in the rental markets. See “Risk Factors—Risks Related to our Business and Industry—We are subject to laws and regulations that could materially and adversely impact our expenses, limit the number of homes that we are allowed to build, delay completion of our programs and result in additional costs and liabilities.”

Price and availability of land We require a sufficient supply of land to construct our housing units at any given time. Rather than accumulating a land bank, we source our land through option contracts. Before we commit to a land purchase, we ascertain whether the prospects and specifications of a land parcel meet our profitability, quality and size requirements. We require land that meets the price point of our intended development plans and that we believe will enable us to allocate the cost of the land per unit at a price that will be attractive to investors and homebuyers. In most cases, we refrain from purchasing land until we achieve a 50% minimum pre-sale requirement for our Housing programs and a 100% pre-sale requirement for our Commercial property programs. We are also required to obtain various permits, which can affect our land acquisition process. We are required to obtain numerous permits and approvals from governmental authorities regarding, among other things, zoning and land use, historic preservation, utilities, including gas, electricity and water, and waste disposal. We typically do not purchase land until we have secured all necessary permits. See “Business—Product Development.” The land we have purchased over the last three financial years represented a total investment of €164.8 million in the financial year ended November 30, 2013 (representing 16.1% of our revenues), €170.8 million in the financial year ended November 30, 2012 (representing 16.6% of our revenues) and €199.6 million in the financial year ended November 30, 2011 (representing 19.1% of our revenues).

VEFA scheme Almost all purchasers of our Housing units enter into VEFA contracts, pursuant to which (i) the seller immediately transfers to the buyer its rights to the land and (ii) ownership of the housing unit progressively passes to the buyer as construction progresses and payments are made by such buyer in accordance with an established schedule. Under VEFA sales, customers first make a 5% deposit when they sign the order contract. We hold this deposit in escrow until the execution of the final notarized deed of sale, at which time the funds are released to us. We are subsequently entitled to receive up to 35% of the total purchase price from our customers as of completion of the foundations, 70% as of completion of the roof and 95% prior to completion of the building. We deposit all funds received from customers into a program-specific bank account. While we can use these funds to cover costs and outlays relating to such program, we cannot otherwise distribute program-specific amounts until we have completed all units of the program. These restrictions apply even if we have recognized related revenue in accordance with applicable accounting rules (see “—Critical Accounting Policies—Revenue Recognition”). By allowing us to collect payments from our customers as construction progresses, the VEFA scheme reduces our working capital requirements and overall risk profile. Most of our operating expenses associated with a particular development can be offset against the payments we receive pursuant to the VEFA scheme. The scheme also protects investors’ interests by requiring real estate developers to provide performance bonds or other completion guarantees to these investors. This increases our customers’ willingness to enter into sales contracts. See “—Liquidity and Capital Resources.”

Mix of products and distribution channels The types of products we offer and the channels we use to market them affect our order attrition rates, the timing of our revenue recognition and our levels of gross profit margin. First, the application of the percentage-of-completion method to our Commercial property programs results in a less gradual schedule of revenue recognition than in our Housing segment. Generally, under the percentage-of-completion method, the revenue we recognize for a given program is equal to the product of (x) the cumulated revenues from the units for which a notarized deed of sale has been signed multiplied by (y) the ratio between (i) the amount of expenses incurred for the program and (ii) the total budgeted expenditures for the program. The particularities of Commercial property programs have an impact on both items (x) and (y) of this formula. Because we generally do not commit to Commercial property programs before we achieve a 100% pre-sale rate, the units for which a notarized deed of sale has been signed corresponds to the full Commercial property program. As a result, the payments we receive are greater proportionally than for Housing programs, for which we generally seek to achieve a 50% pre-sale rate. Furthermore, the ratio of expenses incurred to total expenses budgeted tends to be higher earlier on in Commercial property programs because the land purchase price, which is incurred at the outset of the process, generally represents a greater percentage of our budgeted expenses than in Housing programs. Land prices in connection with Commercial property programs are typically higher as commercial and office developments are generally located in the heart of metropolitan areas, where real estate costs are higher than in rural or less dense urban areas. As a result of the combined effect of these factors, we may recognize a higher percentage of our Commercial property revenues earlier in the development process compared to a Housing program, which may have an impact on the comparability of our results over successive financial periods. Additionally, our gross profit margins are generally lower for Commercial property programs than for Housing programs. As a result, in a particular period, our gross margin may be impacted by the product mix of Commercial property and Housing units that we develop and sell during such period. However, our net profit margin may not be similarly affected due to generally lower operating costs for Commercial property programs compared to Housing programs. Finally, orders of units of serviced accommodations are more likely to be cancelled than orders of single-family homes or apartments, in part because of their lower per-unit cost and potential return on investment. Similarly, orders processed through specialized networks rather than directly through our own sales agents are more susceptible to cancellation because the marketing strategies used by these third parties may not inspire the level of customer loyalty that our internal procedures aim to secure.

Financial year ended November 30, 2011 2012 2013

Gross Gross Gross Deliveries Revenues margin(b) Deliveries Revenues margin(b) Deliveries Revenues margin(b)

(EHUs) (in € thousands) (EHUs) (in € thousands) (EHUs) (in € thousands)

Financial year ended November 30, 2011 2012 2013

Gross Gross Gross Deliveries Revenues margin(b) Deliveries Revenues margin(b) Deliveries Revenues margin(b)

(EHUs) (in € thousands) (EHUs) (in € thousands) (EHUs) (in € thousands) Apartments ... 5,414 925,282 182,962 5,567 976,726 189,645 5,606 919,297 178,121 Single- family homes ...... 239 58,148 7,040 102 23,933 4,967 233 48,221 10,646

Total Housing .. 5,653 983,430 190,002 5,669 1,000,660 194,612 5,839 967,519 188,767 Commercial property . 24 48,901 9,901 10 21,087 5,781 2 51,223 5,981 Other(a) ...... 87 7,642 1,973 11 1,649 278 7 698 162 Showroom .... — 4,282 919 — 6,650 1,463 — 6,515 1,859

Other operating activities . 87 11,924 2,892 11 8,299 1,741 7 7,213 2,021

Overall K&B total ...... 5,764 1,044,255 202,795 5,690 1,030,046 202,134 5,848 1,025,954 196,769

(a) Corresponds primarily to sales of undeveloped plots and external fees (project management contracts).

(b) Revised IAS 23 “Borrowing costs:” since December 1, 2009, we prospectively apply this standard, which requires the capitalization of borrowing costs directly attributable to the acquisition and production of so-called “qualifying assets.” Qualifying assets are assets, such as homes, apartments and residences, that necessarily take a substantial period of time to prepare for their intended use or sale. The amount included in the gross margin as of November 30, 2013 was €9.5 million, or 4.8% of the gross margin, compared to €10.1 million as of November 30, 2012 and €6.7 million as of November 30, 2011. See “—Critical Accounting Policies—IAS 23.”

Cost of sales Costs relating to the construction of our programs vary in accordance with prevailing levels of demand for contractors in the French real estate market. We hire contractors on a program-by-program basis. When economic conditions improve, demand for contractor services typically rises, which may result in increased prices for contractors’ services. Such price increases usually materialize within 12 to 18 months. Conversely, when economic conditions worsen and demand drops, prices typically decrease, usually over a comparable 12- to 18-month period. Approximately 15% of our employees’ compensation was variable in the financial year ended November 30, 2013, as a result of bonus plans and commissions. Our incentive schemes are based on qualitative and quantitative measures of performance, which we evaluate at regular intervals. Costs relating to programs under development are integrated into inventories. When we abandon a program, we expense related inventoried costs. The abandonment of programs for which we have already incurred material costs, notably relating to technical studies, can lead to comparatively large charges for the relevant financial period. In addition, we make provisions to cover foreseeable expenses of certain programs which we believe we might abandon. We decide whether to abandon, or to make provisions for expenses on programs we may abandon, on the basis of an analysis of economic data and financial forecasts specific to each program. Our marketing costs are directly linked to the number of programs being commercialized at any given time. Fewer program starts in a given year thus result in proportionally lower marketing costs.

Seasonality Our Housing activities are subject to seasonal variations as our customers purchase more homes and construction activity increases during certain seasons. These seasonal variations impact our revenues and capital requirements. Because we recognize revenues upon receipt of a notarized deed of sale and based on percentage of completion, revenues are typically lowest in the first quarter of the financial year, reflecting both the comparatively low level of sales contracts signed in the 57

first quarter and the fact that we generally build less during winter months. Historically, revenues have been highest in the second or fourth quarter, when we complete the largest number of programs. Order variations are more prominent in our single-family homes business than in our apartments business. For example, in the financial years ended November 30, 2012 and 2013, the number of apartment orders was more or less evenly distributed over the last three quarters of the year. In the financial year ended November 30, 2011, we recorded the highest level of apartment orders in the second quarter. On the other hand, orders for single-family homes reached the highest level in the third quarter in the financial years ended November 30, 2011, 2012 and 2013. In contrast, our gross profit margin is not subject to significant seasonality. For more information, see “Business—Seasonality and the Business Cycle.”

Operating Indicators Our key business indicators are (i) order volume, (ii) number of EHUs delivered and (iii) backlog. We also track average sales prices, land purchases and property reserves. We regularly evaluate these statistics to assist us with planning and managing our operations. • Order volume. Order volume is the volume of orders on a per–month basis. It reflects our sales activity and provides a measure of our performance. Orders are recognized in revenue when they are converted into a signed and notarized deed of sale, which is the point at which income is generated. Orders in volume are expressed in units within the Group. In addition, in apartment programs that include mixed- use buildings (apartments, business premises, retail space or offices), all floor space is converted into equivalent housing units. Units define the number of housing units or equivalent housing units (for mixed-use programs) for any given program. Units are calculated on a per-program basis, with the following being considered as housing units: “apartments,” “single-family homes in communities” and “subdivisions and building lots.” Consequently, a housing unit (or lot) is equal to one unit. For business premises, retail space and small office spaces, a calculation for an equivalent housing unit is then applied based on the average area of the housing units in the aforementioned program. The average area of housing units is calculated as a ratio of the total useable floor area of the housing units to the number of housing units in the program. The number of units in equivalent housing units is calculated as a ratio of the floor area by type (business premises/retail areas/offices) to the average floor area of the housing units previously obtained. • EHUs delivered. EHUs delivered directly reflect sales. The number of EHUs is calculated on a per-program basis and is equal to the product of (i) the number of homes for a given program for which the notarized deed of sale has been signed, multiplied by (ii) the ratio between the amount of the land and costs incurred by the Group for the program and the total budgeted costs for the program. Thus, a home sold under a program for which 30% of total costs have been incurred would result in an EHU of 0.3. • Backlog. For VEFA sales, backlog covers (i) all ordered units for which a notarized deed of sale has not yet been signed in connection with programs for which we have not yet purchased land; (ii) all ordered units for which a notarized deed of sale has not yet been signed in connection with programs for which we have purchased land; and (iii) the portion of ordered but undelivered units for which a notarized deed of sale has been signed that has not yet been recognized as revenue (for a unit program that is 30% complete, 30% is accounted for as sales, and 70% remains in the backlog). See “—Critical Accounting Policies—Revenue Recognition.” The backlog is a summary at any given moment relating to programs under way at that time, which gives a projection of future revenues for the coming months and serves as a basis for our forecasts. The anticipated revenues associated with our backlog are based on the sales price of the Housing units within our backlog. Anticipated revenues from Housing units under construction are not assured because we may not have signed notarized deeds of sale or, in some cases, purchased the land on which we plan to build the program at the time such anticipated revenues are included in backlog. Until we purchase the land on which we plan to build the program, we may decide to abandon the program due, for example, to changes in market conditions, our inability to reach our target pre-sale rate, our failure to obtain the necessary building permits or our inability to comply with environmental constraints resulting from impact studies. Additionally, until such time as a deed of sale is notarized, customers may abandon a transaction, either because they are availing themselves of their statutory right to withdraw within seven calendar days from the date of receipt of the order contract or because they have failed to secure adequate financing to complete the purchase (see “Business—Sales”). Furthermore, even after we have signed a notarized deed of sale, we may not recognize anticipated revenues if we fail to complete a program 58

due to unforeseen circumstances. We can give no assurances and provide no guarantee that the indicated revenue attributable to our backlog will in fact be recognized.

The following tables show quarterly orders, deliveries and backlog for apartments, single-family homes and commercial property, in volume and in value, for each of the financial years ended November 30, 2011, 2012 and 2013:

Apartments

Backlog in months of business Net orders(a) Orders in value Deliveries(b) Backlog Backlog in value activity(c)

(in € thousands (in € thousands

including VAT) (in EHUs) (in EHUs) excluding VAT) Financial year ended

November 30, 2011 1st quarter ...... 1,255 272,243 1,289 5,710 955,590 13.6 2nd quarter ...... 2,027 408,067 1,136 6,602 1,110,116 15.1 3rd quarter ...... 1,513 306,213 1,225 6,889 1,163,126 15.4 4th quarter ...... 1,522 340,212 1,764 6,608 1,130,031 14.7

Total ...... 6,317 1,326,735 5,414 — — —

Financial year ended

November 30, 2012 1st quarter ...... 990 197,689 1,136 6,462 1,090,481 14.2 2nd quarter ...... 1,409 273,896 1,255 6,616 1,092,592 13.7 3rd quarter ...... 1,440 267,173 1,146 6,910 1,119,302 14.0 4th quarter ...... 1,404 301,567 2,030 6,284 1,037,621 12.7

Total ...... 5,243 1,040,325 5,567 — — —

Financial year ended

November 30, 2013 1st quarter ...... 1,025 179,086 1,078 6,231 999,844 12.5 2nd quarter ...... 1,437 266,746 1,391 6,288 999,700 12.4 3rd quarter ...... 1,202 220,301 1,293 6,197 976,790 12.1 4th quarter ...... 1,367 218,612 1,844 5,720 870,403 11.4

Total ...... 5,031 884,745 5,606 — — —

(a) Net number of orders recorded during the relevant period is the number of orders signed by customers during the relevant period less the number of orders canceled at the end of the period.

(b) Number of EHUs delivered is calculated by program and is equal to (i) the number of units of a given program for which a notarized deed of sale has been signed, multiplied by (ii) the ratio between the land expenses and the construction costs incurred by the Group for the particular program and the total budgeted costs for the program. Thus, a unit sold under a program in which 30% of the costs have been incurred would result in 0.3 EHU.

(c) Backlog in months of business equals the product of (i) the ratio between the backlog at the end of month “M” and the sum of revenues (excluding VAT) of the 12 preceding months from M-1 to M-12, multiplied by (ii) 12 (i.e., the previous 12 months of business. The anticipated revenues associated with our backlog are based on the sales price of the Housing units within our backlog. Anticipated revenues from Housing units under construction are not assured because we may not have signed notarized deeds of sale or, in some cases, purchased the land on which we plan to build the program at the time such anticipated revenues are included in backlog. Until we purchase the land on which we plan to build the program, we may decide to abandon the program due, for example, to changes in market conditions, our inability to reach our target pre-sale rate, our failure to obtain the necessary building permits or our inability to comply with environmental constraints resulting from impact studies. Additionally, until such time as a deed of sale is notarized, customers may abandon a transaction, either because they are availing themselves of their statutory right to withdraw within seven calendar days from the date of receipt of the order contract or because they have failed to secure adequate financing to complete the purchase (see “Business—Sales”). Furthermore, even after we have signed a notarized deed of sale, we may not recognize anticipated revenues if we fail to complete a program due to unforeseen circumstances. We can give no assurances and provide no guarantee that the indicated revenue attributable to our backlog will in fact be recognized.

Single-family homes Backlog in months of business Net orders(a) Orders in value Deliveries(b) Backlog Backlog in value activity(c)

(in € thousands (in € thousands

including VAT) (in EHUs) (in EHUs) excluding VAT) Financial year ended

November 30, 2011 1st quarter ...... 9 4,125 76 209 49,918 5.3 2nd quarter ...... 3 1,491 67 145 34,483 4.3 3rd quarter ...... 53 17,288 49 149 36,300 5.7 4th quarter ...... 26 7,244 47 128 30,350 6.3

Total ...... 91 30,148 239 — — —

Financial year ended

November 30, 2012 1st quarter ...... 41 8,032 15 154 32,340 8.7 2nd quarter ...... 56 14,993 21 179 37,768 13.5 3rd quarter ...... 91 16,549 24 246 47,427 21.6 4th quarter ...... 56 16,082 42 266 53,484 26.8

Total ...... 244 55,655 102 — — —

Financial year ended

November 30, 2013 1st quarter ...... 58 14,943 39 287 58,894 26.3 2nd quarter ...... 75 21,026 36 329 69,489 28.7 3rd quarter ...... 146 42,113 65 407 90,796 28.8 4th quarter ...... 69 27,507 93 385 94,739 23.6

Total ...... 348 105,589 233 — — —

(a) Net number of orders recorded during the relevant period, i.e., number of orders signed by customers during said period less the number of orders canceled at the end of the period.

(c) Backlog in months of business equals the product of (i) the ratio between the backlog at the end of month “M” and the sum of revenues (excluding VAT) of the 12 preceding months from M-1 to M-12, multiplied by (ii) 12 (i.e., the previous 12 months of business). The anticipated revenues associated with our backlog are based on the sales price of the Housing units within our backlog. Anticipated revenues from Housing units under construction are not assured because we may not have signed notarized deed of sale or, in some cases, purchased the land on which we plan to build the program at the time such anticipated revenues are included in backlog. Until we purchase the land on which we plan to build the program, we may decide to abandon the program due, for example, to changes in market conditions, our inability to reach our target pre-sale rate, our failure to obtain the necessary building permits or our inability to comply with environmental constraints resulting from impact studies. Additionally, until such time as a deed of sale is notarized, customers may abandon a transaction, either because they are availing themselves of their statutory right to withdraw within seven calendar days from the date of receipt of the order contract or because they have failed to secure adequate financing to complete the purchase (see “Business—Sales”). Furthermore, even after we have signed a notarized deed of sale, we may not recognize anticipated revenues if we fail to complete a program due to unforeseen circumstances. We can give no assurances and provide no guarantee that the indicated revenue attributable to our backlog will in fact be recognized.

Commercial Net surface area ordered Orders in value Backlog in value

(in € thousands excluding

(sq.m) (in € thousands including VAT) VAT) Financial year ended

November 30, 2011 1st quarter ...... — 41,910 35,926 2nd quarter ...... — (251) 23,745 3rd quarter ...... — — 19,588 60

Commercial Net surface area ordered Orders in value Backlog in value

(in € thousands excluding

(sq.m) (in € thousands including VAT) VAT) 4th quarter ...... — 64,992 41,016

Total ...... — 106,652 120,275

Financial year ended

November 30, 2012 1st quarter ...... 64 136 37,723 2nd quarter ...... 5,270 13,687 44,402 3rd quarter ...... — (33) 37,419 4th quarter ...... — — 30,974

Total ...... 5,334 13,791 119,544

Financial year ended

November 30, 2013 1st quarter ...... 92 158 26,357 2nd quarter ...... 3,547 10,821 33,885 3rd quarter ...... 315 502 26,913 4th quarter ...... 9,273 75,982 52,676

Total ...... 13,227 87,464 139,831

Land purchases and property reserves Land property purchased by the Group represented a total amount of €164.8 million in the financial year ended November 30, 2013, compared to €170.8 million in the financial year ended November 30, 2012 and €199.6 million in the financial year ended November 30, 2011. We purchase land only through option contracts or conditional purchase agreements, and generally only after we have obtained the necessary building permits and have reached our pre-sale target (which in most cases is 50% for Housing programs and 100% for Commercial programs). We do not engage in speculative land acquisitions, nor do we maintain a land bank. For more detail about the research process and the strict selection criteria we use in connection with our land purchases, see “Business—Product Development—Purchase of land.”

Property reserves As of November 30, 2013, our Housing portfolio amounted to 15,204 Housing units, with 5,401 in Île-de-France and 9,803 in the Regions, representing nearly three years of operations. The total amounts that we would forfeit or that would be payable if we cancelled all of the conditional purchase agreements for the land in our Housing portfolio (despite all relevant conditions having been met) totaled €30.5 million as of November 30, 2013, or 5.1% of the estimated total value of such land. As of November 30, 2013, we recorded €11.1 million, or 36.0%, of these amounts in inventories and €19.7 million, or 64.0%, as off-balance sheet items (see “Risk Factors—Risks Related to our Business and Industry—Off-balance sheet commitments may represent a substantial expense.”). Our Commercial property portfolio, meanwhile, represented 58,799 sq.m of net surface area.

The following table shows the number of units that were available for development on land for which we had signed conditional purchase agreements and on land under survey as of November 30, 2011, 2012 and 2013.

Units available for Units available for Units available for development by 2014 development by 2015 development by 2016 (as of November 30, (as of November 30, (as of November 30, 2011) 2012) 2013) Estimated Estimated Estimated (c)(d)(e) (c)(d)(e) (c)(d)(e) Number sq.m Number sq.m Number sq.m Land to be developed(a)...... 17,023 1,126,391 16,049 1,067,978 15,213 972,283 Apartments ...... 15,744 1,011,862 14,759 916,260 14,471 852,332 Single-family homes ...... 1,279 114,529 1,288 113,912 733 61,152 61

Units available for Units available for Units available for development by 2014 development by 2015 development by 2016 (as of November 30, (as of November 30, (as of November 30, 2011) 2012) 2013) Estimated Estimated Estimated (c)(d)(e) (c)(d)(e) (c)(d)(e) Number sq.m Number sq.m Number sq.m Commercial property ...... — — 2 37,806 9 58,799 Other ...... — — — — — — Land under survey(b) ...... 8,923 594,624 7,494 529,448 7,257 468,622 Apartments ...... 8,286 533,887 6,556 422,893 6,196 377,177 Single-family homes ...... 637 60,737 846 69,555 831 55,015 Commercial property ...... — — 92 37,000 158 27,430 Other ...... — — — — 72 9,000

Total ...... 25,946 1,721,015 23,543 1,597,426 22,470 1,440,905

(a) Land for which a sales contract or option has been signed. (b) Land for which a sales contract or option has not yet been signed. (c) Based on estimated net surface area. (d) Based on a single-family home with an average area of 100 sq.m. (e) Based on an apartment unit with an average surface area of 60 sq.m plus 15% for the communal areas.

Critical Accounting Policies The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with IFRS. The preparation of these financial statements requires us to make accounting policy choices that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate our policy choices on an ongoing basis. We base our choices on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe we make our more significant accounting policy choices in the preparation of our consolidated financial statements in connection with the following items: • Revenue Recognition. We market almost all of our development projects under the VEFA plan. Pursuant to VEFA contracts, real estate developers have the ability to demand payments from customers in accordance with the percentage of completion of the relevant program, based on a schedule set by law, while real estate developers are required to obtain a performance bond, most often in the form of a guarantee provided by banks or insurance companies to customers. Pursuant to the payment schedule under VEFA contracts, customers’ cumulative payments may not exceed 35% of the total purchase price as of completion of the foundations, 70% as of completion of the roof and 95% prior to completion of the building. Title to the land transfers to the customer upon execution of the VEFA contract. Title to the building transfers gradually, as the building is completed. Revenues are recognized in accordance with IAS 18, “Revenue” and in accordance with the terms of IAS 11, “Construction Contracts” on the basis of the percentage of completion, i.e., based on technical completion, the starting point of which is the acquisition of the land, and commercial completion (execution of the deeds of sale) of each program.

Revenues and gross margin are recognized as work is completed, based on program forecasts and in accordance with the following rule: revenue recognized for a given program is equal to the product of the cumulated revenues from the units for which a notarized deed of sale has been signed, multiplied by the ratio between the amount of the land expenses and the construction expenses incurred by the Group in respect of a particular program and the total budget of the program’s expenditures.

The program forecasts used in the calculation of revenues and gross margin are re-examined in full every quarter and take into account, to the best of management’s knowledge, expected changes in sales prices, marketing and costs. Net income (loss) attributable to shareholders is attributed to the owners of the Group and to minority interests even if this results in a loss for minority interests. Minority interests include all income and expenses attributable to minority shareholders of the companies that we hold in partnership and that are fully consolidated. • Accounts Receivable. Accounts receivable correspond to receivables accrued in accordance with the application of the percentage-of-completion revenue recognition method. Accounts receivable include the following: • unpaid amounts owed by customers from whom we have demanded payment at specified stages of the construction process in accordance with the applicable statutory payment schedule; and • unpaid amounts corresponding to the actual percentage of completion of a particular program as of the end of the financial year but for which we are not yet entitled to demand payment based on the statutory payment schedule. This category generates most of our receivables. These amounts are not yet legally payable. Accounts receivable are measured at nominal value, after deducting the impairment charges recognized when the realizable value of the amounts due is less than the carrying amount. • Inventory. • “New projects” inventories relate to programs that have not yet been developed. They are valued at cost and include reservation deposits for land acquisition, design fees, land development expenses and all other fees incurred in connection with the programs. At the end of each accounting period, expenditures incurred in respect of programs for which we have not signed conditional purchase agreements and for which there is a lack of probability of development in the near future are expensed. • “Current programs” inventories relate to programs under development. They are valued at cost and include land acquisition prices, related fees, taxes, costs of roads and equipment, costs of construction and development of model or show homes and the fees and commissions of real estate agents and others involved in the sale of units of our programs. Since December 1, 2009, costs also include financial expenses in accordance with IAS 23, “Borrowing Costs.” All advertising expenses, including the expenses directly attributable to the real estate programs, are expensed. IAS 2 provides for the recognition of indirect fixed expenses to inventories, insofar as such expenses are clearly identifiable and can be allocated. These expenses must be integrated into the inventories by using systematic and rational methods applied in a consistent and ongoing manner to all costs having similar characteristics. Indirect fixed expenses (salaries, payroll expenses and other expenses) incurred by our technical departments and corporate division relating primarily to program development, supervision of construction work, project management and after-sales management should be included in inventories insofar as they are (i) directly attributable to real estate programs and (ii) incurred after we sign a conditional purchase agreement for the land. However, since we do not have management tools in place to identify and measure these indirect fixed costs in accordance with IFRS criteria, such costs are expensed. A fair value adjustment corresponding to the expected performance of a specified set of programs was identified and allocated to inventories when the Issuer purchased the Company in 2007. It is expensed in cost of sales as and when these programs are completed or abandoned altogether on a percentage-of- completion basis and therefore in line with revenue recognition. We make a similar fair value adjustment and apply the same accounting treatment at the Company level when the Company acquires other real estate development companies from time to time. We make provisions to cover foreseeable losses on certain programs. These future losses are computed on the basis of an analysis of economic data and financial forecasts specific to each program. Provisions

for impairments may be made, for example, in relation to “new project” expenses relating to programs that we have not officially abandoned but for which development is uncertain. • IAS 23. IAS 23 “Borrowing Costs” requires that borrowing costs directly attributable to the acquisition, construction or production of a “qualifying asset,” defined as an asset that necessarily takes a substantial period of time to prepare for its intended use or sale, be included in the cost of the asset and therefore be capitalized. These borrowing costs related to IAS 23 are reflected as an expense in gross margin but have a non-cash impact on our business. Other borrowing costs are recognized as an expense. Pursuant to IAS 23, where funds are borrowed specifically, costs eligible for capitalization are the actual costs incurred less any income earned on the temporary investment of such borrowings. Where funds are part of a general pool, the eligible amount is determined by applying a capitalization rate to the expenditure on that asset. The capitalization rate will be the weighted average of the borrowing costs applicable to the general pool. Because our programs under construction are assets that necessarily take a substantial period of time to prepare for their intended use and sale, we capitalize borrowing costs relating to third-party debt of the Company, including our senior credit facilities, applied to each program. As we generally do not conduct program-specific third-party financing (except for joint promotion programs in which we hold a minority stake), we calculate the capitalization rate of interest on our third-party debt based on the weighted average of the Company’s total borrowing costs. The Company then provides the financing required for our programs to its subsidiaries through intercompany loans. We apply the capitalization rate calculated on our third-party debt to amounts borrowed by our subsidiaries (for programs that have negative net cash positions) on a monthly basis. Capitalization of borrowing costs for a particular program begins at the time that we purchase land and ends either when our net cash position for such program becomes positive or, at the latest, when construction is complete.

Description of Key Line Items Set forth below is a brief description of the composition of the key line items of our consolidated income statement: • Revenue. We record our revenues and gross margin based on the percentage-of-completion of programs. Revenues recognized for a given program are equal to the product of the cumulated revenues from the units for which a notarized deed of sale has been signed multiplied by the ratio between the amount of the land expenses and the construction expenses incurred by the Group in respect of a particular program and the total budgeted expenditures for the program. • Gross margin. Gross margin corresponds to revenues less cost of sales. Cost of sales consists of land acquisition prices, related fees, taxes, costs of roads and equipment, costs of construction and development of model or show homes, fees and commissions of real estate agents and others involved in the sale of units of our programs and borrowing costs directly attributable to program development. Additionally, a portion of the purchase price paid by the Issuer upon its acquisition of Kaufman & Broad in 2007 corresponded to the expected performance of a specified and identified set of programs. We recognize expenses in cost of sales at the Issuer level as and when these programs are completed or abandoned altogether. • Current operating profit. Current operating profit corresponds to the gross margin adjusted for selling expenses, administrative expenses, technical and customer service expenses and other income and expenses: • Selling expenses. Selling expenses include the fixed portion of the salaries of sales employees, sales managers and showroom personnel, as well as the related payroll taxes, the costs of maintaining model homes, advertising costs and various other expenses (employee travel costs, showroom rental costs and the costs of leased sales offices). These expenses are impacted by the number of programs marketed during the year. • Administrative expenses. Administrative expenses include payroll costs for administrative personnel, rent payable and related rental charges at our principal and branch offices, external fees, travel costs for administrative personnel, taxes other than on income (mainly local business tax), maintenance costs and supplies. • Technical and customer service expenses. Technical and after-sales service expenses include all salaries for employees responsible for technical supervision of real estate programs and services related to

after-sales operations, travel costs of such employees, maintenance costs and supplies relating to technical and after-sales services. • Other income and expenses. Other income and expenses includes all charges to and reversals of depreciation, amortization and provisions, as well as technical department and post-sale customer services (including the salaries, travel costs, and other costs of employees delivering such services) expenses. Pursuant to CNC recommendation 2009-R.03, we use “Other non-recurring revenues and expenses” for any unusual, infrequent and material items which would otherwise skew amounts presented as current operating profit. • Operating income. Operating income corresponds to income from continuing operations adjusted for non- recurring expenses. • Net income of consolidated companies. Net income of consolidated companies corresponds to operating income adjusted for (i) the cost of net financial debt (financial income and expenses) corresponding to interest expense on our Existing Senior Credit Facilities, interest expenses on swaps, fees paid on overdrafts, commitment fees and amortization expenses relating to lines of credit, gains on the sale of money market funds, income from short-term deposits and the capitalization of borrowing costs under IAS 23; (ii) other income and expenses; and (iii) income tax. • Income (loss) attributable to shareholders. Income (loss) attributable to shareholders corresponds to net income of fully consolidated companies adjusted for our share in earnings of associated companies and joint ventures accounted for using the equity method. • Income attributable to shareholders. Income attributable to shareholders corresponds to net income of fully consolidated companies adjusted for income from non-controlling equity interests (minority interests), which includes all income and expenses attributable to minority shareholders in fully consolidated companies held in partnership with others. Our sale agreements with our customers are in the form of VEFA contracts, under the terms of which the customer pays 5% of the price of the property into an escrow account when the order contract is signed. The amount paid by customers into the escrow account when the order is made is recorded as an asset in the consolidated balance sheet under “Cash and cash equivalents” with a corresponding liability recognized under “Other liabilities” (customer advances).

Results of Operations Our consolidated financial information was prepared in accordance with IFRS. The financial data for the years ended November 30, 2011, 2012 and 2013 represent our consolidated results.

Year ended November 30, 2013, compared to year ended November 30, 2012 The following table shows our consolidated results for the years ended November 30, 2012 and 2013:

For the year For the year ended ended November 30, November 30, % of % % of 2012 revenue Growth 2013 revenue

(in € (in €

thousands) (%) (%) thousands) (%) Revenues ...... 1,030,046 100.0% (0.4)% 1,025,954 100.0% Cost of sales ...... (830,896) (80.7)% (0.1)% (830,011) (80.9)%

Gross margin ...... 199,150 19.3% (1.6)% 195,943 19.1%

Selling expenses...... (29,242) (2.8)% 4.7% (30,619) (3.0)% Administrative expenses ...... (63,092) (6.1)% 3.3% (65,192) (6.4)% Technical and customer service expenses ...... (16,301) (1.6)% 10.7% (18,052) (1.8)% Other expenses ...... (9,326) (0.9)% 9.2% (10,180) (1.0)% Other income ...... 951 0.1% 233.3% 3,170 0.3%

For the year For the year ended ended November 30, November 30, % of % % of 2012 revenue Growth 2013 revenue

(in € (in €

thousands) (%) (%) thousands) (%) Current operating profit ...... 82,140 8.0% (8.6)% 75,070 7.3%

Other non-recurring income ...... 1,538 0.1% (99.7)% 5 0.0% Other non-recurring expenses ...... (10) 0.0% (40.0)% (6) 0.0%

Operating income ...... 83,668 8.1% (10.3)% 75,069 7.3%

Financial expenses ...... (30,831) (3.0)% (10.4)% (27,620) (2.7)% Financial income ...... 1,799 0.2% (57.0)% 773 0.1%

Cost of net financial debt ...... (29,032) (2.8)% (7.5)% (26,848) (2.6)%

Other interest expense ...... (1,699) (0.2)% (100.0)% — 0.0% Other financial income...... 14,330 1.4% (100.0)% — 0.0%

Pre-tax income of consolidated companies . 67,267 6.5% (28.3)% 48,222 4.7%

Income tax (expenses)/income ...... (24,787) (2.4)% (12.6)% (21,675) (2.1)%

Net income of consolidated companies ...... 42,480 4.1% (37.5)% 26,546 2.6%

Share of income (loss) of equity affiliates and joint ventures ...... (61) 0.0% 1,152.5% 642 0.1% Income/loss from assets held for sale ...... — 0.0% 0.0% — 0.0%

Income (loss) attributable to shareholders . 42,419 4.1% (35.9)% 27,188 2.7%

Minority interests ...... 13,571 1.3% 9.3% 14,838 1.4% Income attributable to shareholders ...... 28,848 2.8% (57.2)% 12,350 1.2% The following tables show a breakdown of the number of EHUs delivered, revenues and gross margin by product line and geographical market for the years ended November 30, 2012 and 2013:

Financial year ended November 30, 2012 2013

Deliveries Revenues Gross margin Deliveries Revenues Gross margin

(EHUs) (in € thousands) (EHUs) (in € thousands) Apartments ...... 5,567 976,726 189,645 5,606 919,297 178,121 Single-family homes ...... 102 23,933 4,967 233 48,221 10,646

Total Housing ...... 5,669 1,000,660 194,612 5,839 967,519 188,767 Commercial property ...... 10 21,087 5,781 2 51,223 5,981 Other ...... 11 1,649 278 7 698 162 Showroom ...... — 6,650 1,463 — 6,515 1,859

Other operating activities ...... 11 8,299 1,741 7 7,213 2,021

Overall K&B total ...... 5,690 1,030,046 202,134 5,848 1,025,954 196,769

Acquisition price allocation expenses ...... — — (2,984) — — (826)

Overall FG8 total ...... 5,690 1,030,046 199,150 5,848 1,025,954 195,943

Financial year ended November 30, 2012 2013

Deliveries Revenues Gross margin Deliveries Revenues Gross margin

(EHUs) (in € thousands) (EHUs) (in € thousands) Île-de-France ... 2,312 460,288 95,272 2,391 432,139 93,769

Housing 2,309 455,158 94,255 2,391 428,016 91,892

Commercial property — — — — — —

Other 3 5,130 1,017 — 4,124 1,877

West ...... 489 56,703 9,117 504 63,343 10,109

Housing 487 56,465 8,988 502 63,075 10,405

Commercial property 1 109 (6) 2 201 (44)

Other 1 130 135 — 67 (251) Southwest ...... 969 151,545 28,973 1,006 162,791 31,259

Housing 963 150,878 28,903 1,000 153,202 28,693

Commercial property — — — — 9,004 1,628

Other 6 667 70 6 585 937 Southeast ...... 1,297 256,148 45,987 1,505 253,418 42,276

Housing 1,287 238,509 40,741 1,504 250,280 42,305

Commercial property 9 15,291 4,736 — 776 470

Other 1 2,349 509 1 2,362 (499)

Rhône-Alpes .... 560 90,508 20,367 345 57,621 13,947

Housing 560 90,507 20,365 345 57,567 13,751

Commercial property — — — — — —

Other — 2 2 — 54 196 I.E...... — 5,688 1,051 — 41,243 3,927

Housing — — —

Commercial property — 5,688 1,051 — 41,243 3,927

Other — — —

Other Regions.. 63 9,166 1,368 97 15,400 1,482

Housing 63 9,143 1,360 97 15,379 1,721

Commercial property — — — — — —

Other — 23 8 — 21 (239) Corporate ...... — — — — — —

K&B Total ...... 5,690 1,030,046 202,134 5,848 1,025,954 196,769

Acquisition price allocation expenses ... — — (2,984) — — (826)

FG8 Total ...... 5,690 1,030,046 199,150 5,848 1,025,954 195,943

Revenues General Group consolidated revenues totaled €1,026.0 million in the financial year ended November 30, 2013, down €4.1 million, or 0.4%, from €1,030.0 million in the financial year ended November 30, 2012. This decrease in revenues was due mainly to a €57.4 million, or 5.9%, decline in apartments revenues that was partly offset by a €24.3 million, or 101.5%, increase in revenues from single-family homes and a €30.1 million, or 142.9%, increase in Commercial property revenues. Our Housing business represented 94.3% of total revenues in the financial year ended November 30, 2013 compared to 97.1% in the financial year ended November 30, 2012. Apartments represented 89.6% of total revenues in the financial year ended November 30, 2013, compared to 94.8% in the financial year ended November 30, 2012. Single-family homes represented 4.7% of total revenues in the financial year ended November 30, 2013, compared to 2.3% in the financial year ended November 30, 2012. Our Housing business represented 91.8% of total orders in value for the Group in the financial year ended November 30, 2013, compared to 98.7% in the financial year ended November 30, 2012. The average price of our Housing orders declined by approximately €15,600, or 7.8%, to approximately €184,100 (including VAT) in the financial year ended 67

November 30, 2013 from approximately €199,700 (including VAT) in the financial year ended November 30, 2012. In the same period, there was a 0.2% decline in the average Housing order price with respect to Île-de-France and a 14.5% decrease in the average Housing order price with respect to the Regions. As of November 30, 2013, we had 167 Housing programs on the market, of which 44 were in Île-de-France and 123 in the Regions, for a total of 3,550 units, compared to 3,222 units available for sale as of November 30, 2012, representing a 10.2% increase in units available for sale. The average monthly take-up rate for units that entered the market (excluding joint ventures) (calculated as net monthly orders divided by the average of inventory as of the start of the month and inventory as of the end of the month) (the “take-up rate”) was 13.2% in the financial year ended November 30, 2013, compared to 14.4% in the financial year ended November 30, 2012. The average attrition rate for order contracts (excluding order cancellations related to discontinued projects) that we recorded in the financial year ended November 30, 2013 was 31.9%, compared to 22.4% in the financial year ended November 30, 2012. This increase in average attrition rates was due to (i) a higher percentage of orders having been processed through specialized networks, which have higher attrition rates on average than orders processed directly by our sales agents, and (ii) customers having difficulties securing adequate financing.

Housing Revenues from Housing totaled €967.5 million in the financial year ended November 30, 2013, down €33.2 million, or 3.3%, from €1,000.7 million in the financial year ended November 30, 2012. This decrease in Housing revenues was due mainly to a €57.4 million, or 5.9%, decrease in revenues from our apartments business in the financial year ended November 30 2013, compared to the financial year ended November 30, 2012. The decrease in Housing revenues masked geographical disparities. Housing revenues decreased by €32.9 million, or 36.4%, in Rhône-Alpes and by €27.1 million, or 6.0%, in Île-de-France. This €60.0 million total decrease was partially offset by increases of €11.8 million, or 4.9%, in the Southeast, €6.6 million, or 11.7%, in the West, €2.3 million, or 1.5%, in the Southwest and €6.2 million, or 6.8%, in Other Regions (Lille-Flandres, Strasbourg, Rouen). In the financial year ended November 30, 2013, we recorded 5,379 net Housing orders, compared to 5,487 in the financial year ended November 30, 2012, a decrease of 108 orders, or 2.0%. In value, orders totaled €990.3 million (including VAT) in the financial year ended November 30, 2013, compared to €1,096.0 million (including VAT) in the financial year ended November 30, 2012, a decrease of €105.7 million, or 9.6%. In the second half of the financial year ended November 30, 2013, Housing orders slowed down, decreasing by 6.9% in volume and 15.4% in value, compared to the second half of the financial year ended November 30, 2012. This included a 22.5% decrease in value of Housing orders in the fourth quarter of the financial year ended November 30, 2013 compared to the fourth quarter of the financial year ended November 30, 2012. This 22.5% decrease in Housing order value was due mainly to our having received a greater proportion of orders for service accommodation units during the period. Geographically, our Housing business in Île-de-France recorded a slight decline in orders of 0.8% in volume and 1.0% in value in the financial year ended November 30, 2013, compared to the financial year ended November 30, 2012. In the Regions, orders were down by 3.0% in volume and 17.1% in value over the same period. In the financial year ended November 30, 2013, the Regions accounted for 49.4% in value and 53.9% in volume of total Housing orders, compared to 53.8% in value and 54.5% in volume in the financial year ended November 30, 2012. In the financial year ended November 30, 2013, the Southwest (Toulouse, Bordeaux, Bayonne) accounted for 17.0% of the total amount of Housing orders, compared to 16.3% for the Southeast (Montpellier, Marseille, Toulon, Nice) and 6.3% for Rhône-Alpes (Lyon, Grenoble, Annecy). Over the same period, Housing orders from Île-de-France grew in value to 50.6% from 46.2% and in volume to 46.1% from 45.5%. With respect to Housing revenues, after Île-de-France, the Southeast (Nice, Toulon, Marseille, Montpellier) and the Southwest (Toulouse, Bordeaux, Bayonne) were the two biggest contributors, representing 25.9% and 15.8% of total Housing revenues, respectively. The West (Nantes, Rennes) represented 6.5% and Rhône-Alpes (Lyon, Grenoble, Annecy) represented 5.9% of total Housing revenues. In the financial year ended November 30, 2013, we delivered 5,839 Housing EHUs, compared to 5,669 Housing EHUs in the financial year ended November 30, 2012, representing an increase of 170 EHUs, or 3.0%. Apartment deliveries represented 96.0% of Housing EHUs delivered in the financial year ended November 30, 2013 compared to 98.2% in the financial year ended November 30, 2012. Geographically, we delivered 40.9% of our Housing EHUs in Île-de-France (including 40.8% of apartments EHUs and 45.5% of single-family homes EHUs) in the financial year ended November 30, 2013, compared to 40.7% in the financial year ended November 30, 2012. We were also active in the Southeast (Nice, Toulon, Marseille, Montpellier) and in the Southwest (Toulouse, Bordeaux, Bayonne), where we delivered 25.8% and 17.1% of our Housing EHUs, respectively, compared to 22.7% and 17.0%, respectively, in the financial year ended November 30, 2012.

Revenues from apartments totaled €919.3 million in the financial year ended November 30, 2013, down €57.4 million, or 5.9%, from €976.7 million in the financial year ended November 30, 2012. This decrease in apartments revenues was due mainly to decreases of €40.8 million in revenues for Île-de-France and of €16.6 million in revenues for the Regions. Île-de- France accounted for 44.0% of our apartments revenues in the financial year ended November 30, 2013, compared to 45.6% in the financial year ended November 30, 2012. Apartments accounted for 95.0% of our total Housing revenues in the financial year ended November 30, 2013, compared to 97.6% in the financial year ended November 30, 2012. In the financial year ended November 30, 2013, we received 5,031 orders for apartments, compared to 5,243 in the financial year ended November 30, 2012, a decrease of 212 apartments, or 4.0%. This decrease in orders for apartments was due mainly to a 5.7% decrease in orders from the Regions and a 2.0% decrease in orders from Île-de-France. In value, these orders for apartments totaled €884.7 million (including VAT) in the financial year ended November 30, 2013, compared to €1,040.3 million (including VAT) in the financial year ended November 30, 2012, a decrease of €155.6 million, or 15.0%. The decrease in value of orders for apartments was due mainly to a 5.8% decrease in order prices in Île-de-France and a 16.3% decrease in order prices in the Regions. Île-de-France accounted for 46.1% in volume and 49.6% in value of apartment orders in the financial year ended November 30, 2013, compared to 45.2% and 45.7%, respectively, in the financial year ended November 30, 2012. Apartments continued to account for the largest share of our total orders, representing 93.2% in volume and 82.0% in value of total orders in the financial year ended November 30, 2013, compared to 95.6% and 93.7% in the financial year ended November 30, 2012. Revenues from single-family homes in communities totaled €48.2 million in the financial year ended November 30, 2013, up €24.3 million, or 101.5%, from €23.9 million in the financial year ended November 30, 2012. This increase in revenues from single-family homes was due mainly to a €13.7 million increase in revenues in Île-de-France and a €10.6 million increase in revenues in the Regions. Île-de-France accounted for 48.1% of single-family homes revenues in the financial year ended November 30, 2013, compared to 39.7% in the financial year ended November 30, 2012. The Regions accounted for 51.9% of single-family homes revenues in the financial year ended November 30, 2013, compared to 60.3% in the financial year ended November 30, 2012. In the financial year ended November 30, 2013, orders for single-family homes in communities totaled 348 units, a 104-unit, or 42.6%, increase as compared to 244 units in the financial year ended November 30, 2012. This increase in the number of single-family homes in communities ordered was due mainly to an increase of 28 orders from Île-de-France and of 76 additional orders from the Regions. In value, single-family home orders amounted to €105.6 million in the financial year ended November 30, 2013, up €49.9 million, or 90.0%, compared to €55.7 million in the financial year ended November 30, 2012. The Regions contributed 73.1% of the increase in orders for single-family homes by volume but only 36.7% by value.

Commercial property Revenues from our Commercial property business totaled €51.2 million in the financial year ended November 30, 2013, up €30.1 million, or 142.7%, from €21.1 million in the financial year ended November 30, 2012. During the financial year ended November 30, 2013, net Commercial property orders totaled €87.5 million (including VAT), up €73.7 million, or 534.1%, from €13.8 million (including VAT) in the financial year ended November 30, 2012. This increase was due mainly to a 9,300 sq.m Commercial property program situated in the EcoQuartier—Île Seguin—Rives de Seine in Boulogne- Billancourt (Haut-de-Seine), which resulted in orders worth approximately €76.7 million and which the company Boursorama acquired pursuant to a VEFA contract as the site of its future head office. The €30.1 million increase in Commercial property revenues helped partly offset the €33.2 million decrease in Housing revenues over the same period.

Other operating activities Revenues from Other operating activities totaled €7.2 million in the financial year ended November 30, 2013, down €1.1 million, or 13.3%, from €8.3 million in the financial year ended November 30, 2012. Revenues from Showroom activities totaled €6.5 million in the financial year ended November 30, 2013, down €0.2 million, or 3.0%, from €6.7 million in the financial year ended November 30, 2012. Revenues from other activities (land sales and outside fees for project management contracts) totaled €0.7 million in the financial year ended November 30, 2013, down €0.9 million, or 56.3%, from €1.6 million in the financial year ended November 30, 2012.

Cost of sales Cost of sales totaled €830.0 million in the financial year ended November 30, 2013, down €0.9 million, or 0.1%, from €830.9 million in the financial year ended November 30, 2012. Cost of sales in the financial year ended November 30, 2013 included €0.4 million (€358,000) corresponding to the expensing of fair value adjustments on the price of acquisitions conducted by the Company, down €0.1 million (€57,000), or 13.7%, from €0.4 million (€415,000) in the financial year ended November 30, 2012. The Issuer’s costs of sales were €0.8 million higher than the Company’s in the financial year ended November 30, 2013 and €3.0 million higher in the financial year ended November 30, 2012. These differences correspond to expenses related to the allocation of the acquisition price for the Company. A portion of the price paid by the Issuer for its acquisition of Kaufman & Broad in 2007 corresponded to the expected performance of a specified and identified set of programs. We recognize expenses in cost of sales at the Issuer level as and when these programs are completed or abandoned altogether.

Gross margin General Gross margin totaled €195.9 million in the financial year ended November 30, 2013, down €3.2 million, or 1.6%, from €199.2 million in the financial year ended November 30, 2012. The overall gross profit margin was 19.1% in the financial year ended November 30, 2013, down 1.0% from 19.3% in the financial year ended November 30, 2012. The Issuer’s gross margin was €0.8 million lower than that of the Company in the financial year ended November 30, 2013 and €3.0 million lower in the financial year ended November 30, 2012. These differences correspond to expenses related to the allocation of the acquisition price for the Company. A portion of the price paid by the Issuer for its acquisition of Kaufman & Broad in 2007 corresponded to the expected performance of a specified and identified set of programs. We recognize expenses in cost of sales at the Issuer level as and when these programs are completed or abandoned altogether.

Housing Housing gross margin totaled €188.8 million in the financial year ended November 30, 2013, down €5.8 million, or 3.0%, from €194.6 million in the financial year ended November 30, 2012. Housing gross profit margin increased slightly to 19.5% of Housing revenues in the financial year ended November 30, 2013, compared to 19.4% in the financial year ended November 30, 2012. The decrease of €5.8 million in Housing gross margin was mainly attributable to decreases of €6.6 million in Housing gross margin in the Rhône-Alpes region and €2.4 million in Île-de-France, which were partially offset by increases of €1.4 million in the West and €1.6 million in the Southeast. Île-de-France contributed 48.7% of Housing gross margin in the financial year ended November 30, 2013. The Southeast (Marseille, Toulon, Nice and Montpellier) accounted for 22.4% of gross margin, and the Southwest (Toulouse, Bordeaux and Bayonne) ranked third, representing 15.2% of Housing gross margin in the financial year ended November 30, 2013. The Rhône-Alpes region (Lyon, Grenoble, Annecy) contributed 7.3%, while the West (Nantes, Rennes) contributed 5.5% of Housing gross margin for the period. Our apartments business gross margin was €178.1 million in the financial year ended November 30, 2013, down €11.5 million, or 6.1%, compared to €189.6 million in the financial year ended November 30, 2012. Our apartments business gross profit margin was 19.5% in the financial year ended November 30, 2013, up from 19.4% in the financial year ended November 30, 2012. This decrease in gross margin for our apartments business was due mainly to a €4.5 million decrease in gross margin in Île-de-France and a €7.0 million decrease in the Regions. Our single-family homes gross margin was €10.6 million in the financial year ended November 30, 2013, up €5.6 million, or 112.0%, compared to €5.0 million in the financial year ended November 30, 2012. The gross profit margin in single-family homes was 22.1% in the financial year ended November 30, 2013, compared to 20.8% in the financial year ended November 30, 2012. In Île-de-France, the gross profit margin was 25.8% in the financial year ended November 30, 2013, compared to 40.1% in the financial year ended November 30, 2012. In the Regions, the gross profit margin was 18.6% in the financial year ended November 30, 2013, compared to 8.0% in the financial year ended November 30, 2012.

Commercial property Gross margin from our Commercial property business totaled €6.0 million in the financial year ended November 30, 2013, up €0.2 million, or 3.5%, from €5.8 million in the financial year ended November 30, 2012. Our Commercial property 70

gross profit margin decreased to 11.7% in the financial year ended November 30, 2013, compared to 27.5% in the financial year ended November 30, 2012. This decrease was due mainly to a difference in the mix of products developed in each financial year. In the financial year ended November 30, 2012, our Commercial property activities involved mixed developments comprising residential and office units in the Regions. In the financial year ended November 30, 2013, our Commercial property activities involved pure office building developments in Île-de-France, for which we generally record lower average gross profit margins due to higher land costs and other costs of sales.

Other operating activities Gross margin from Other operating activities totaled €2.0 million in the financial year ended November 30, 2013, up €0.3 million, or 17.6%, from €1.7 million in the financial year ended November 30, 2012. Gross margin from Showroom activities totaled €1.9 million in the financial year ended November 30, 2013, up €0.4 million, or 26.7%, from €1.5 million in the financial year ended November 30, 2012. Gross margin from Other activities totaled €0.2 million in the financial year ended November 30, 2013, down €0.1 million, or 33.3%, from €0.3 million in the financial year ended November 30, 2012.

Selling expenses Selling expenses totaled €30.6 million in the financial year ended November 30, 2013, up €1.4 million, or 4.7%, from €29.2 million in the financial year ended November 30, 2012. This increase was due mainly to advertising expenses related to enhanced communication on ongoing programs and new programs launched over the period and an increase in salaries and payroll taxes related to the annual increase in salaries.

Sales team compensation The following table shows the change in payroll costs for our sales team (including commissions) for the years ended November 30, 2012 and 2013:

For the financial year ended November 30,

(in € thousands) 2012 2013

Salaries and payroll taxes ...... 7,468 8,167 Commissions paid to the sales team ...... 9,049 10,676 As a percentage of total Group revenues ...... 1.6% 1.8%

Sales commissions

For the financial year ended November 30,

(in € thousands) 2012 2013

Commissions paid to the sales team ...... 9,049 10,676 External commissions ...... 17,973 21,190 Total commissions on sales ...... 27,022 31,866 As a percentage of total Group revenues ...... 2.6% 3.1%

The amount of commissions on sales totaled €31.9 million in the financial year ended November 30, 2013, including €10.7 million for internal commissions paid to our sales teams and €21.2 million for external commissions paid to third-party consultants. The increase of €1.6 million in internal commissions was due mainly to the increase in the variable portion granted to sales agents. The €3.2 million increase in external commissions was due in part to the 14.8% increase in the number of reservations per sales agent and per network in the financial year ended November 30, 2013, compared to the financial year ended November 30, 2012. These expenses are included in the cost of sales of real estate transactions.

The following table shows the amount of these advertising expenses and the percentage of these expenses in terms of revenues for the years ended November 30, 2012 and 2013:

For the financial year ended November 30,

(in € thousands) 2012 2013

Advertising expenses ...... 19,076 19,894 As a percentage of total Group revenues ...... 1.9% 1.9% Advertising expenses totaled €19.9 million in the financial year ended November 30, 2013, up €0.8 million, or 4.3%, from €19.1 million in the financial year ended November 30, 2012. Revenues fell 0.4% over the same period. The increase in advertising expenses was due to enhanced communication for ongoing programs and new programs launched over the period. Advertising expenses and costs of model homes and areas represented 1.9% of revenues in the financial year ended November 30, 2013, the same percentage as in the financial year ended November 20, 2012.

Administrative expenses Administrative expenses totaled €65.2 million in the financial year ended November 30, 2013 (of which €0.1 million was attributable to the Issuer), up €2.1 million, or 3.3%, from €63.1 million in the financial year ended November 30, 2012 (of which €0.2 million was attributable to the Issuer). This increase in administrative expenses was due mainly to a rise in salaries and payroll expenses of €2.2 million related to an annual increase in wages.

Technical and customer service expenses Technical and customer service expenses totaled €18.1 million in the financial year ended November 30, 2013, up €1.8 million, or 10.7%, from €16.3 million in the financial year ended November 30, 2012. This increase in technical and customer service expenses was due mainly to the disbursement of €1.7 million in salaries and employee benefits relating to an increase in our number of employees.

Other expenses Other expenses totaled €10.2 million in the financial year ended November 30, 2013, up €0.9 million, or 9.2%, from €9.3 million in the financial year ended November 30, 2012. This increase was due mainly to the reversal of provisions subsequent to the settlement of past legal disputes in the amount of €2.1 million, and to other expenses in the amount of €0.5 million, which were partially offset by a decrease in expenses relating to discontinued projects in the amount of €2.0 million.

Other income Other income totaled €3.2 million in the financial year ended November 30, 2013, up €2.2 million, or 233.3%, from €1.0 million in the financial year ended November 30, 2012. This increase in other income was due mainly to the sale of our Grenoble sales office for €1.3 million, and to a €0.9 million increase in the sale of services.

Current operating profit Current operating profit totaled €75.1 million in the financial year ended November 30, 2013, down €7.1 million, or 8.6%, from €82.1 million in the financial year ended November 30, 2012. Our current operating margin was 7.3% in the financial year ended November 30, 2013, compared to 8.0% in the financial year ended November 30, 2012. The decrease in current operating profit was due mainly to the decrease in gross margin and the increase in operating expenses described above. Operating expenses totaled €124.0 million in the financial year ended November 30, 2013, up €6.0 million, or 5.1%, from €118.0 million in the financial year ended November 30, 2012. Operating expenses represented 12.1% of revenues in the financial year ended November 30, 2013, compared to 11.4% in the financial year ended November 30, 2012.

Other non-recurring income Other non-recurring income totaled €0.0 million (€5,000) in the financial year ended November 30, 2013, down €1.5 million, or 99.7%, from €1.5 million in the financial year ended November 30, 2012. This decrease in other non- recurring income was due mainly to a non-recurring reversal of a €1.5 million provision for the impairment of land recorded

in the financial year ended November 30, 2012. In the financial year ended November 30, 2012, we reversed the impairment provision because we decided to market the program for which we had previously recorded the provision.

Other non-recurring expenses Other non-recurring expenses totaled €0.0 million (€6,000) in the financial year ended November 30, 2013, down €4,000, or 40.0%, from €0.0 million (€10,000) in the financial year ended November 30, 2012. The amount of other non- recurring expenses was not material in the financial year ended November 30, 2013 and in the financial year ended November 30, 2012.

Cost of net financial debt Cost of net financial debt totaled €26.8 million in the financial year ended November 30, 2013, down €2.2 million, or 7.5%, from €29.0 million in the financial year ended November 30, 2012. This decline was due mainly to decreases in interest expenses on our Existing Senior Credit Facilities, interest expenses on swaps, capitalization of interest pursuant to IAS 23 and financial income and an increase in deferred costs incurred in connection with entering into our Existing Senior Credit Facilities, as further described below. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies—IAS 23.” Financial expenses totaled €27.6 million in the financial year ended November 30, 2013 (with €24.1 million attributable to the Issuer), down €3.2 million, or 10.4%, from €30.8 million in the financial year ended November 30, 2012 (with €24.9 million attributable to the Issuer). In general, financial expenses are due mainly to interest expenses on and other costs relating to our Existing Senior Credit Facilities. In the financial year ended November 30, 2013, financial expenses included €31.1 million in interest expenses (with €23.5 million attributable to the Issuer) and €3.9 million in costs relating to the amortization of fees and expenses incurred in connection with entering into our Existing Senior Credit Facilities, compared to €34.6 million in interest expenses (with €24.2 million attributable to the Issuer) and €2.3 million in costs relating to the amortization of fees and expenses incurred in connection with entering into our Existing Senior Credit Facilities in the financial year ended November 30, 2012. Interest expenses thus decreased by €3.5 million, or 10.1%, in the financial year ended November 30, 2013, while costs relating to the amortization of fees and expenses incurred in connection with entering into our Existing Senior Credit Facilities increased by €1.6 million, or 69.6%. This increase in costs relating to the amortization of fees and expenses incurred in connection with entering into the Existing Senior Credit Facilities was due to the Company having paid off all such amortized costs and fees outstanding as of November 30, 2013, including costs otherwise payable in the financial year ended November 30, 2014, in one final lump sum payment. In the financial year ended November 30, 2013, interest expenses on the Company’s swaps decreased by €3.2 million, or 94.1%, to €0.2 million from €3.4 million in the financial year ended November 30, 2012. This decrease was due mainly to the limited difference between variable and fixed interest rates on the new swap agreements signed at the end of 2012. Capitalization of interest pursuant to IAS 23 totaled €9.4 million in the financial year ended November 30, 2013, down €2.0 million, or 17.5%, from €11.4 million in the financial year ended November 30, 2012. Financial income totaled €0.8 million in the financial year ended November 30, 2013, down €1.0 million, or 57.0%, from €1.8 million in the financial year ended November 30, 2012.

Other interest expense Other interest expense totaled €0.0 million (€0) in the financial year ended November 30, 2013, down €1.7 million, or 100.0%, from €1.7 million in the financial year ended November 30, 2012. Following the Company’s and the Issuer’s early repayment of parts of Facilities B and C of our Existing Senior Credit Facilities and the waiver by the Company of drawdown rights on a portion of its revolving credit facility that occurred in the financial years ended November 30, 2011 and 2012, we recorded €1.7 million relating to the additional amortization of the fees and expenses incurred in connection with entering into our Existing Senior Credit Facilities in “other financial expenses” in the financial year ended November 30, 2012.

Other financial income Other financial income totaled €0.0 million (€0) in the financial year ended November 30, 2013, down €14.3 million, or 100.0%, from €14.3 million in the financial year ended November 30, 2012. Following the Company’s and the Issuer’s early repayment of parts of their respective commitments under Facilities B and C of our Existing Senior Credit Facilities and the waiver by the Company of drawdown rights on a portion of its revolving credit facility that occurred in the financial years ended November 30, 2011 and 2012, we recorded €14.3 million in financial income in the financial year ended November 30, 2012, including €13.3 million attributable to the Issuer.

Income tax (expenses)/income Income tax expenses totaled €21.7 million in the financial year ended November 30, 2013, down €3.1 million, or 12.6%, from €24.8 million in the financial year ended November 30, 2012. Kaufman & Broad and the Issuer are not a consolidated group for tax purposes. Therefore, profits generated by the Company and its subsidiaries consolidated for tax purposes are not charged against the losses of the Issuer. Since there is no projected use of tax losses generated by the Issuer, no deferred tax asset has been recognized for those losses in the consolidated financial statements of the FG8 Group. Permanent differences were due to the Company’s negative permanent differences in the amount of €7.9 million, mainly originating from Kaufman & Broad’s tax savings relating to its Belgian subsidiary in the amount of €8.2 million in the financial year ended November 30, 2013, the interest expenses from undercapitalizing the subsidiaries of €1.0 million, and to other non-deductible expenses.

Minority interests Minority interest income totaled €14.8 million in the financial year ended November 30, 2013, up €1.2 million, or 9.3%, from €13.6 million in the financial year ended November 30, 2012. This increase in minority interests was due mainly to an overall increase in joint promotions carried out in the financial year ended November 30, 2013. Joint promotions refer to all real estate development programs that we undertake in partnership with one or more other entities, either as a majority or as a minority stakeholder. Minority interests represent the interests of our partners in joint promotions in which we hold a majority stake. Conversely, we account for our own minority interests in joint promotions in which our partners hold a majority stake under “share of income (loss) of equity affiliates and joint ventures.”

Income attributable to shareholders Income attributable to shareholders totaled €12.4 million in the financial year ended November 30, 2013, down €16.4 million, or 57.2%, from €28.8 million in the financial year ended November 30, 2012. Our net margin in the financial year ended November 30, 2013 was 1.2%, down from 2.8% in the financial year ended November 30, 2012.

Year ended November 30, 2012, compared to year ended November 30, 2011 The following table shows our consolidated results for the years ended November 30, 2011 and 2012:

For the year For the year ended ended November 30, November 30, % of % of 2011 revenue Growth 2012 revenue

(in € (in €

thousands) (%) (%) thousands) (%) Revenues ...... 1,044,255 100.0% (1.4)% 1,030,046 100.0% Cost of sales ...... (847,278) (81.1)% (1.9)% (830,896) (80.7)%

Gross margin ...... 196,977 18.9% 1.1% 199,150 19.3%

Selling expenses...... (27,375) (2.6)% 6.8% (29,242) (2.8)% Administrative expenses ...... (62,233) (6.0)% 1.4% (63,092) (6.1)% Technical and customer service expenses ...... (15,634) (1.5)% 4.3% (16,301) (1.6)% Other expenses ...... (10,026) (1.0)% (7.0)% (9,326) (0.9)% Other income ...... 1,395 0.1% (31.8)% 951 0.1%

Current operating profit ...... 83,104 8.0% (1.2)% 82,140 8.0%

Other non-recurring income ...... 1,734 0.2% (11.3)% 1,538 0.1% Other non-recurring expenses ...... (952) (0.1)% (98.9)% (10) 0.0%

Operating income ...... 83,886 8.0% (0.3)% 83,668 8.1%

Financial expenses ...... (41,857) (4.0)% (26.3)% (30,831) (3.0)% Financial income ...... 3,619 0.3% (50.3)% 1,799 0.2%

Cost of net financial debt ...... (38,238) (3.7)% (24.1)% (29,032) (2.8)%

For the year For the year ended ended November 30, November 30, % of % of 2011 revenue Growth 2012 revenue

(in € (in €

thousands) (%) (%) thousands) (%) Other interest expense ...... (2,444) (0.2)% (30.5)% (1,699) (0.2)% Other financial income...... 9,359 0.9% 53.1% 14,330 1.4%

Pre-tax income of consolidated companies 52,563 5.0% 28.0% 67,267 6.5%

Income tax (expenses)/income ...... (26,707) (2.6)% (7.2)% (24,787) (2.4)%

Net income of consolidated companies ...... 25,856 2.5% 64.3% 42,480 4.1%

Share of income (loss) of equity affiliates and joint ventures ...... 955 0.1% (106.4)% (61) 0.0% Income/loss from assets held for sale ...... — — — — —

Income (loss) attributable to shareholders 26,811 2.6% 58.2% 42,419 4.1%

Minority interests ...... 15,165 1.5% (10.5)% 13,571 1.3% Income attributable to shareholders ...... 11,646 1.1% 147.7% 28,848 2.8% The following tables show a breakdown of the number of EHUs delivered, revenues and gross margin by product line and geographical market for the years ended November 30, 2011 and 2012:

For the financial year ended November 30, 2011 2012

Deliveries Revenues Gross margin Deliveries Revenues Gross margin

(EHUs) (in € thousands) (EHUs) (in € thousands) Apartments ...... 5,414 925,282 182,962 5,567 976,726 189,645 Single-family homes ...... 239 58,148 7,040 102 23,933 4,967 Total Housing ...... 5,653 983,430 190,002 5,669 1,000,660 194,612 Commercial property ...... 24 48,901 9,901 10 21,087 5,781 Other ...... 87 7,642 1,973 11 1,649 278 Showroom ...... — 4,282 919 — 6,650 1,463

Other operating activities ...... 87 11,924 2,892 11 8,299 1,741

Overall K&B total ...... 5,764 1,044,255 202,795 5,690 1,030,046 202,134

Acquisition price allocation expenses ...... — — (5,818) — — (2,984)

Overall FG8 total ...... 5,764 1,044,255 196,977 5,690 1,030,046 199,150

Financial year ended November 30, 2011 2012

Deliveries Revenues Gross margin Deliveries Revenues Gross margin

(EHUs) (in € thousands) (EHUs) (in € thousands)

Île-de-France ...... 1,925 378,739 77,999 2,312 460,288 95,272

Housing 1,912 373,858 77,210 2,309 455,158 94,255

Commercial property — — — — — —

Other 13 4,881 789 3 5,130 1,017

West ...... 350 47,412 10,512 489 56,703 9,117

Housing 342 45,501 10,174 487 56,465 8,988 75

Financial year ended November 30, 2011 2012

Deliveries Revenues Gross margin Deliveries Revenues Gross margin

(EHUs) (in € thousands) (EHUs) (in € thousands)

Commercial property — — — 1 109 (6)

Other 8 1,911 338 1 130 135

Southwest ...... 1,512 218,677 44,101 969 151,545 28,973

Housing 1,464 216,285 43,546 963 150,878 28,903

Commercial property — — — — — —

Other 48 2,392 555 6 667 70

Southeast ...... 1,231 251,364 47,404 1,297 256,148 45,987

Housing 1,213 230,607 41,599 1,287 238,509 40,741

Commercial property — 18,044 5,327 9 15,291 4,736

Other 18 2,713 478 1 2,349 509

Rhône-Alpes ...... 657 105,353 22,481 560 90,508 20,367

Housing 657 104,181 21,794 560 90,507 20,365

Commercial property — — — — — —

Other — 1,172 687 — 2 2

Other Regions..... 89 42,710 298 63 14,854 2,419

Housing 65 12,998 (4,321) 63 9,143 1,360

Commercial property 24 19,506 5,553 — 5,688 1,051

Other — 10,206 (934) — 23 8 Corporate ...... — — — — — —

Total ...... 5,764 1,044,255 202,795 5,690 1,030,046 202,134

Acquisition price allocation expenses ...... — — (5,818) — — (2,984)

Total ...... 5,764 1,044,255 196,977 5,690 1,030,046 199,150

Revenues General Group consolidated revenues totaled €1,030.0 million in the financial year ended November 30, 2012, down €14.2 million, or 1.4%, from €1,044.3 million in the financial year ended November 30, 2011. This decrease in revenues was due mainly to a €34.2 million, or 58.9%, decrease in revenues from our single-family homes business and a €27.8 million, or 56.9%, decrease in revenues from our Commercial property business. Our Housing business represented 97.1% of total revenues in the financial year ended November 30, 2012 compared to 94.2% in the financial year ended November 30, 2011. Apartments represented 94.8% of total revenues in the financial year ended November 30, 2012, compared to 88.6% in the financial year ended November 30, 2011. Single-family homes represented 2.3% of total revenues in the financial year ended November 30, 2012, compared to 5.6% in the financial year ended November 30, 2011. Our Housing business represented 98.7% of total orders in value for the Group in the financial year ended November 30, 2012, compared to 92.3% in the financial year ended November 30, 2011. The average price of our Housing orders declined by €12,000, or 5.7%, to €199,700 (including VAT) in the financial year ended November 30, 2012 from €211,700 (including VAT) in the financial year ended November 30, 2011. In the same period, there was an 18.5% decline in the average Housing order price with respect to Île-de-France and a 2.3% increase with respect to the Regions. In terms of products, the average price of apartments ordered and the average price of single-family homes in communities were down by 5.5% and 31.2% respectively.

As of November 30, 2012, we had 163 Housing programs on the market, of which 39 were in Île-de-France and 124 in the Regions, for a total of 3,222 units, compared to 3,067 units available for sale as of November 30, 2011, representing a 5.1% increase in units available for sale. The average monthly take-up rate for units that entered the market (excluding joint ventures) was 14.4% in the financial year ended November 30, 2012, compared to 20.8% in the financial year ended

November 30, 2011. The average attrition rate for order contracts (excluding order cancellations related to discontinued projects) that we recorded in the financial year ended November 30, 2012 was 22.4%, compared to 25.5% in the financial year ended November 30, 2011.

Housing Revenues from Housing totaled €1,000.7 million in the financial year ended November 30, 2012, up €17.3 million, or 1.8%, from €983.4 million in the financial year ended November 30, 2011. This increase in Housing revenues was due mainly to a €51.4 million, or 5.6%, increase in revenues from our apartments business in the financial year ended November 30, 2012, compared to the financial year ended November 30, 2011. The increase in Housing revenues masked geographical disparities. The largest increase in Housing revenues occurred in Île-de-France, with a €81.3 million, or 21.7%, increase, followed by the West, with a €11.0 million, or 24.1%, increase, and the Southeast, with a €7.9 million, or 3.4%, increase. The increases in these Regions were partially offset by decreases of €65.4 million, or 30.2%, in the Southwest, €13.7 million, or 13.1%, in Rhône-Alpes and €3.9 million, or 30.0%, in Other Regions. In the financial year ended November 30, 2012, we recorded 5,487 net Housing orders compared to 6,408 in the financial year ended November 30, 2011, a decrease of 921 orders, or 14.4%. In value, orders totaled €1,096.0 million (including VAT) in the financial year ended November 30, 2012, compared to €1,356.9 million (including VAT) in the financial year ended November 30, 2011, a decrease of €260.9 million, or 19.2%. In the second half of the financial year ended November 30, 2012, Housing orders were down 3.9% in volume and 10.4% in value, compared to the second half of the financial year ended November 30, 2011. Geographically, our Housing business in Île-de-France recorded a decline in orders of 15.0% in volume but was up 6.3% in value in the financial year ended November 30, 2012, compared to the financial year ended November 30, 2011. In the Regions, orders were down by 29.4% in volume and 27.8% in value over the same period. In the financial year ended November 30, 2012, the Regions accounted for 54.5% in volume and 53.8% in value of total Housing orders, compared to 66.1% in volume and 60.2% in value in the financial year ended November 30, 2011. In the financial year ended November 30, 2012, the Southwest (Toulouse, Bordeaux, Bayonne) accounted for 17.1% of Housing orders in volume, compared to 24.5% for the Southeast (Montpellier, Marseille, Toulon, Nice) and 4.7% for Rhône-Alpes (Lyon, Grenoble, Annecy). Over the same period, Housing orders from Île-de-France grew in volume to 45.5% from 33.9% of total Housing orders, and in value to 46.2% from 39.8% of total Housing orders. With respect to Housing revenues, after Île-de-France, the Southwest (Toulouse, Bordeaux, Bayonne) and Southeast (Nice, Toulon, Marseille, Montpellier) were the two biggest contributors, representing 15.1% and 23.8% of Housing revenues, respectively. Housing revenues from Rhône-Alpes (Lyon, Grenoble, Annecy) and the West (Nantes, Rennes) represented 9.0% and 5.6% of total Housing revenues, respectively. In the financial year ended November 30, 2012, we delivered 5,669 Housing EHUs, compared to 5,653 Housing EHUs in the financial year ended November 30, 2011, representing an increase of 16 EHUs, or 0.3%. Apartment deliveries represented 98.2% of Housing EHUs delivered in the financial year ended November 30, 2012, compared to 95.8% in the financial year ended November 30, 2011. During the financial year ended November 30, 2012, we delivered 10 office units, compared to 24 in the financial year ended November 30, 2011, and our Commercial property business represented 0.2% of total EHUs, compared to 0.4% in the financial year ended November 30, 2011. Geographically, we delivered 40.7% of our Housing EHUs in Île-de-France (including 40.6% apartments EHUs and 46.1% of single-family homes EHUs) in the financial year ended November 30, 2012, compared to 33.8% in the financial year ended November 30, 2011. We were also active in the Southeast (Nice, Toulon, Marseille, Montpellier), where we delivered 22.7% of our Housing EHUs, including 22.3% of our apartments EHUs and 42.1% of our single-family homes EHUs. We delivered 17.0% of our Housing EHUs in the Southwest (Toulouse, Bordeaux, Bayonne), including 17.1% of our apartments EHUs and 10.8% of our single-family homes EHUs. Revenues from apartments totaled €976.7 million in the financial year ended November 30, 2012, up €51.4 million, or 5.6%, from €925.3 million in the financial year ended November 30, 2011. This increase in apartments revenues was due mainly to an increase of €111.7 million in Île-de-France, which was partially offset by a decrease of €60.3 million for the Regions. Apartments revenues in Île-de-France totaled €445.7 million in the financial year ended November 30, 2012, up €111.7 million, or 33.4%, from €334.0 million in the financial year ended November 30, 2011. Meanwhile, our apartments revenues totaled €531.1 million in the Regions in the financial year ended November 30, 2012, a decrease of €60.3 million, or 10.2%, compared to €591.3 million in the financial year ended November 30, 2011. Apartments accounted for 97.6% of the total Housing business segment in the financial year ended November 30, 2012, compared to 94.1% in the financial year ended November 30, 2011.

In the financial year ended November 30, 2012, we received 5,243 orders for apartments, compared to 6,317 in the financial year ended November 30, 2011, a decrease of 1,074 apartments, or 17.0%. This decrease in orders for apartments was due mainly to a 30.7% decrease in orders from the Regions, which was partially offset by a 9.1% increase in orders in Île-de-France. In value, these orders for apartments totaled €1,040.3 million (including VAT) in the financial year ended November 30, 2012, a decrease of €286.4 million, or 21.6%, compared to €1,326.7 million (including VAT) in the financial year ended November 30, 2011. Île-de-France accounted for 45.2% in volume and 45.7% in value of apartment orders in the financial year ended November 30, 2012, compared to 34.4% and 40.5%, respectively, in the financial year ended November 30, 2011. Apartments continued to account for the largest share of our total orders, representing 95.6% in volume and 93.7% in value of total orders in the financial year ended November 30, 2012, compared to 97.3% and 90.3% in the financial year ended November 30, 2011. Revenues from single-family homes in communities totaled €23.9 million in the financial year ended November 30, 2012, down €34.2 million, or 58.9%, from €58.1 million in the financial year ended November 30, 2011. Revenues from single-family homes in Île-de-France totaled €9.5 million in the financial year ended November 30, 2012, down €30.4 million, or 76.2%, from €39.9 million in the financial year ended November 30, 2011. Île-de-France represented 39.7% of single-family homes revenues in the financial year ended November 30, 2012, compared to 68.6% in the financial year ended November 30, 2011. Meanwhile, single-family homes revenues in the Regions totaled €14.4 million in the financial year ended November 30, 2012, down €3.8 million, or 20.9%, from €18.2 million in the financial year ended November 30, 2011. The Regions accounted for 60.3% of single-family homes revenues in the financial year ended November 30, 2012, compared to 31.4% in the financial year ended November 30, 2011. In the financial year ended November 30, 2012, orders for single-family homes in communities totaled 244 units, a 153-unit, or 168.1%, increase, compared to 91 units in the financial year ended November 30, 2011. This increase in the number of single-family homes in communities ordered was due mainly to an increase of 128 orders from Île-de-France and of 25 additional orders from the Regions. In value, single-family home orders amounted to €55.7 million in the financial year ended November 30, 2012, up €25.6 million, or 85.0%, from €30.1 million in the financial year ended November 30, 2011. This increase in single-family home orders reflected an even greater disparity between Île-de-France and the Regions: while there was a €28.1 million increase in orders for single-family homes from Île-de-France, there was a decline of 9.4% in orders for single-family homes from the Regions, worth €2.6 million.

Commercial property Revenues from our Commercial property business totaled €21.1 million in the financial year ended November 30, 2012, down €27.8 million, or 56.9%, from €48.9 million in the financial year ended November 30, 2011. During the financial year ended November 30, 2012, we recorded net Commercial property orders totaling €13.8 million (including VAT), down €92.9 million, or 87.1%, from €106.7 million (including VAT) in the financial year ended November 30, 2011. Our Commercial property orders in the financial year ended November 30, 2012 included the “Balma—ZAC Vidailhan” program, which has approximately 5,500 sq.m in floor space and is located in the Vidailhan green district in the Gramont commercial park (ZAC) in Balma (Toulouse).

Other operating activities Revenues from Other operating activities totaled €8.3 million in the financial year ended November 30, 2012, down €3.6 million, or 30.3%, from €11.9 million in the financial year ended November 30, 2011. Revenues from Showroom activities totaled €6.7 million in the financial year ended November 30, 2012, up €2.4 million, or 55.8%, from €4.3 million in the financial year ended November 30, 2011. Revenues from other activities (land sales and outside fees for project management contracts) totaled €1.6 million in the financial year ended November 30, 2012, down €6.0 million, or 78.9%, from €7.6 million in the financial year ended November 30, 2011.

Cost of sales Cost of sales totaled €830.9 million in the financial year ended November 30, 2012, down €16.4 million, or 1.9%, from €847.3 million in the financial year ended November 30, 2011. Cost of sales in the financial year ended November 30, 2012 included €0.4 million (€415,000) corresponding to the expensing of fair value adjustments on the price of acquisitions conducted by the Company, up €0.2 million (€234,000), or 129.3%, from €0.2 million (€181,000) in the financial year ended November 30, 2011.

The Issuer’s costs of sales were €3.0 million higher than the Company’s in the financial year ended November 30, 2012 and €5.8 million higher in the financial year ended November 30, 2011. These differences correspond to expenses related to the allocation of the acquisition price for the Company. A portion of the price paid by the Issuer for its acquisition of Kaufman & Broad in 2007 corresponded to the expected performance of a specified and identified set of programs. We recognize expenses in cost of sales at the Issuer level as and when these programs are completed or abandoned altogether.

Gross margin General Gross margin totaled €199.2 million in the financial year ended November 30, 2012, up €2.2 million, or 1.1%, from €197.0 million in the financial year ended November 30, 2011. The overall gross profit margin was 19.3% in the financial year ended November 30, 2012, up 2.1% from 18.9% in the financial year ended November 30, 2011. The Issuer’s gross margin was €3.0 million lower than the Company’s in the financial year ended November 30, 2012 and €5.8 million lower in the financial year ended November 30, 2011. These differences correspond to expenses related to the allocation of the acquisition price for the Company. A portion of the price paid by the Issuer for its acquisition of Kaufman & Broad in 2007 corresponded to the expected performance of a specified and identified set of programs. We recognize expenses in cost of sales at the Issuer level as and when these programs are completed or abandoned altogether.

Housing Housing gross margin totaled €194.6 million in the financial year ended November 30, 2012, up €4.6 million, or 2.4%, from €190.0 million in the financial year ended November 30, 2011. Housing gross profit margin rose slightly by 0.1%, reaching 19.4% of Housing revenues in the financial year ended November 30, 2012, compared to 19.3% in the financial year ended November 30, 2011. The increase of €4.6 million in our Housing gross margin was mainly attributable to Île-de- France, in the amount of €17.0 million, and Other Regions, in the amount of €5.7 million. At the same time, there was a decline of €14.6 million in gross margin in the Southwest and a total gross margin decrease of €3.5 million in the West, Southeast and Rhône-Alpes regions. Île-de-France contributed 48.4% of our Housing gross margin in the financial year ended November 30, 2012. The Southeast (Marseille, Toulon, Nice and Montpellier) accounted for 20.9% and the Southwest (Toulouse, Bordeaux and Bayonne) accounted for 14.9% of Housing gross margin in the financial year ended November 30, 2012. The Rhône-Alpes (Lyon, Grenoble, Annecy) and West (Nantes, Rennes) regions contributed 10.5% and 4.6%, respectively, for the period. Our apartments business gross margin was €189.6 million in the financial year ended November 30, 2012, up €6.6 million, or 3.6%, from €183.0 million in the financial year ended November 30, 2011. Our apartments business gross profit margin was 19.4% in the financial year ended November 30, 2012, compared to 19.8% in the financial year ended November 30, 2011. The increase in gross margin for our apartments business was due mainly to a €20.5 million, or 29.3%, gross margin increase in Île-de-France, while the Regions recorded a gross margin decline of €13.8 million, or 12.2%.

Our single-family homes business gross margin was €5.0 million in the financial year ended November 30, 2012, down €2.1 million, or 29.4%, from €7.0 million in the financial year ended November 30, 2011. The gross profit margin in single- family homes was 20.8% in the financial year ended November 30, 2012, compared to 12.1% in the financial year ended November 30, 2011. In Île-de-France, the gross profit margin was 40.1% in the financial year ended November 30, 2012, compared to 18.2% in the financial year ended November 30, 2011, although gross margin for single-family homes in Île-de- France decreased by €3.4 million in the financial year ended November 30, 2012, compared to 2011. In the Regions, gross margin was €1.2 million in the financial year ended November 30, 2012, compared to a loss of €0.2 million in the financial year ended November 30, 2011. The gross profit margin in the Regions was 8.0% in the financial year ended November 30, 2012, compared to a loss of 1.2% in the financial year ended November 30, 2011.

Commercial property Gross margin from our Commercial property business totaled €5.8 million in the financial year ended November 30, 2012, down €4.1 million, or 41.4%, from €9.9 million in the financial year ended November 30, 2011. This decrease in gross margin was due mainly to the recognition of higher revenues in the financial year ended November 30, 2011. The higher revenues in the financial year ended November 30, 2011 related to our having secured a Commercial property contract in Île- de-France for which we received the initial deposit required under VEFA contract sales on 100% of the value of the program.

Other operating activities Gross margin from other operating activities totaled €1.7 million in the financial year ended November 30, 2012, up €1.2 million, or 41.4%, from €2.9 million in the financial year ended November 30, 2011. Gross margin from Showroom activities totaled €1.5 million in the financial year ended November 30, 2012, up €0.6 million, or 66.7%, from €0.9 million in the financial year ended November 30, 2011. Gross margin from other activities totaled €0.3 million in the financial year ended November 30, 2012, down €1.7 million, or 85.0%, from €2.0 million in the financial year ended November 30, 2011.

Selling expenses Selling expenses totaled €29.2 million in the financial year ended November 30, 2012, up €1.9 million, or 6.8%, from €27.4 million in the financial year ended November 30, 2011. This increase was due mainly to advertising expenses related to enhanced communication on ongoing programs and new programs launched over the period and an increase in salaries and payroll taxes related to the increase in the number of employees and the annual increase in salaries.

Sales team compensation The following table shows the change in payroll costs for our sales team (including commissions) for the years ended November 30, 2011 and 2012:

For the financial year ended November 30,

(in € thousands) 2011 2012

Salaries and payroll taxes ...... 7,008 7,468 Commissions paid to the sales team ...... 11,762 9,049 As a percentage of total revenues ...... 1.8% 1.6%

Sales commissions

For the financial year ended November 30,

(in € thousands) 2011 2012

Commissions paid to the sales team ...... 11,762 9,049 External commissions ...... 28,234 17,973 Total commissions on sales ...... 39,996 27,022 As a percentage of total revenues ...... 3.8% 2.6%

The amount of commissions on sales totaled €27.0 million in the financial year ended November 30, 2012, including €9.0 million for internal commissions paid to our sales teams and €18.0 million for external commissions paid to third-party consultants. The decrease of €2.7 million in internal commissions was due to the 19.2% decline in home orders in value over the period. The decrease in external commissions was due in part to the decrease of €79.1 million in Housing revenues in the Southwest and Rhône-Alpes, where the share of sales by networks is comparatively large. These expenses are included in cost of sales of real estate transactions.

Advertising In general, our annual advertising costs represent between 1.5% and 2.0% of our revenues. We incur these costs in connection with the launch of real estate programs (single-family homes and apartments) as well as national advertising campaigns to promote our image and products. The following table shows the amount of these advertising expenses and the percentage of these expenses in terms of revenues for the years ended November 30, 2011 and 2012:

For the financial year ended November 30,

(in € thousands) 2011 2012

Advertising expenses ...... 18,627 19,076 As a percentage of total Group revenues ...... 1.8% 1.9% Advertising expenses totaled €19.1 million in the financial year ended November 30, 2012, up €0.4 million, or 2.4%, from €18.6 million in the financial year ended November 30, 2011. Revenues fell 1.4% over the same period. The increase in advertising expenses was due mainly to enhanced communication for ongoing programs and new programs launched over the period. Advertising expenses and costs of model homes and areas represented 1.9% of revenues in the financial year ended November 30, 2012, compared to 1.8% in the financial year ended November 30, 2011.

Administrative expenses Administrative expenses totaled €63.1 million in the financial year ended November 30, 2012 (of which €0.2 million was attributable to the Issuer), up €0.9 million, or 1.4%, from €62.2 million in the financial year ended November 30, 2011 (of which €0.1 million was attributable to the Issuer). This increase in administrative expenses was due mainly to an increase in “Salaries and payroll expenses” of €1.2 million related to the increase in staff and an annual increase in wages, the increase in taxes resulting from the transition to the percentage-of-completion method for revenue in the financial statements of our main subsidiaries and an increase in “other expenses” of €0.8 million related primarily to a change in sponsorship spending.

Technical and customer service expenses Technical and customer service expenses totaled €16.3 million in the financial year ended November 30, 2012, up €0.7 million, or 4.3%, from €15.6 million in the financial year ended November 30, 2011. This increase in technical and customer service expenses was due mainly to increased salaries and benefits of €1.0 million relating to an increased workforce.

Other expenses Other expenses totaled €9.3 million in the financial year ended November 30, 2012, down €0.7 million, or 7.0%, from €10.0 million in the financial year ended November 30, 2011. This decrease in other expenses was due mainly to the reversal of provisions subsequent to the settlement of past legal disputes. Expenses related to discontinued projects amounted to €4.6 million in the financial year ended November 30, 2012, compared to €3.8 million in the financial year ended November 30, 2011. This increase reflects our decision to discontinue programs that gave rise to litigation relating to building permits or that did not meet our profitability criteria.

Other income Other income totaled €1.0 million in the financial year ended November 30, 2012, down €0.4 million, or 31.8%, from €1.4 million in the financial year ended November 30, 2011. This decrease in other income was due mainly to a decrease in income from the sale of services.

Current operating profit Current operating profit totaled €82.1 million in the financial year ended November 30, 2012, down €1.0 million, or 1.2%, from €83.1 million in the financial year ended November 30, 2011. Our current operating margin was 8.0% in the financial year ended November 30, 2012, compared to 8.0% in the financial year ended November 30, 2011. The decrease in current operating profit was due mainly to the increase in operating expenses described above. Operating expenses totaled €118.0 million in the financial year ended November 30, 2012, up €2.7 million, or 2.3%, from €115.3 million in the financial year ended November 30, 2011. Operating expenses represented 11.5% of revenues in the financial year ended November 30, 2012, compared to 11.0% in the financial year ended November 30, 2011.

Other non-recurring income Other non-recurring income totaled €1.5 million in the financial year ended November 30, 2012, down €0.2 million, or 11.3%, from €1.7 million in the financial year ended November 30, 2011. This decrease in other non-recurring income was due mainly to reversals of provisions for impairment on land. In 2009, pursuant to a reorganization plan that we instituted in 81

2008, the items that we recorded under “other non-current income and expenses” consisted mainly of expenses, or provisions for expenses, relating to the depreciation of land that we acquired in previous financial years but which we planned to resell rather than develop because of deteriorating market conditions. In the financial year ended November 30, 2012, we decided to market a project on a previously depreciated piece of land and reversed the provision for depreciation, in the amount of €1.5 million.

Other non-recurring expenses Other non-recurring expenses totaled €0.0 million (€10,000) in the financial year ended November 30, 2012, down €0.9 million, or 98.9%, from €1.0 million in the financial year ended November 30, 2011. This decrease in other non- recurring expenses was due mainly to the reversal of an existing provision for impairment of land that was increased by €0.8 million in the financial year ended November 30, 2011 prior to its disposal in the financial year ended November 30, 2012.

Operating income Operating income totaled €83.7 million in the financial year ended November 30, 2012, down €0.2 million, or 0.3%, from €83.9 million in the financial year ended November 30, 2011. This decrease in operating income was due to the changes in other non-recurring expenses described above.

Cost of net financial debt Cost of net financial debt totaled €29.0 million in the financial year ended November 30, 2012, down €9.2 million, or 24.1%, from €38.2 million in the financial year ended November 30, 2011. This decline was due mainly to a decrease in financial expenses related to the increase in the capitalization of borrowing costs and a decline in our average financial debt, as further described below. Financial expenses totaled €30.8 million in the financial year ended November 30, 2012 (with €24.9 million attributable to the Issuer), down €11.0 million, or 26.3%, from €41.9 million in the financial year ended November 30, 2011 (with €26.7 million attributable to the Issuer). In general, financial expenses are due mainly to the use of our Existing Senior Credit Facilities. Through the application of the total effective interest rate, financial expenses included the amortization of the Existing Senior Credit Facilities in the amount of €2.3 million in the financial year ended November 30, 2012. The decrease in financial expenses was due mainly to a €4.7 million increase in the capitalization of borrowing costs related to the gradual application of IAS 23 to new programs since December 1, 2010 and the reduction in financial expenses related to a decline in our average financial debt. In addition, in the financial year ended November 30, 2012, we no longer incurred expenses relating to the deferral of the cancellation adjustment, which amounted to €3.5 million in the financial year ended November 30, 2011. Financial income totaled €1.8 million in the financial year ended November 30, 2012, down €1.8 million, or 50.3%, from €3.6 million in the financial year ended November 30, 2011. This decrease was due mainly to decreases in capital gains on the sale of money-market SICAVs and certificates of deposit as well as in other income from cash and cash equivalents consisting primarily of interest on a loan to Seniors Santé in 2010 in the amount of €0.3 million. In the financial year ended November 30, 2011, this item also included late fees charged to buyers in the amount of €0.5 million.

Other interest expense Other interest expense totaled €1.7 million in the financial year ended November 30, 2012, down €0.7 million, or 30.5%, from €2.4 million in the financial year ended November 30, 2011. Following the Company’s and the Issuer’s early repayment of Facilities B and C of our Existing Senior Credit Facilities and the waiver by the Company of drawdown rights on a portion of its revolving credit facility that occurred in the financial years ended November 30, 2011 and 2012, we recorded €1.7 million in additional amortization of the fees and expenses incurred in connection with entering into our Existing Senior Credit Facilities in “other interest expense” in the financial year ended November 30, 2012, including €0.6 million attributable to the Issuer, compared to €2.3 million in the financial year ended November 30, 2011.

Other financial income Other financial income totaled €14.3 million in the financial year ended November 30, 2012, up €5.0 million, or 53.1%, from €9.4 million in the financial year ended November 30, 2011. Following the Company’s and the Issuer’s early repayment of Facilities B and C of our Existing Senior Credit Facilities and the waiver by the Company of drawdown rights 82

on a portion of its revolving credit facility that occurred in the financial years ended November 30, 2011 and November 30, 2012, we recorded €14.3 million in financial income in the financial year ended November 30, 2012 (with €13.3 million attributable to the Issuer), compared to €9.4 million in the financial year ended November 30, 2011.

Income tax (expenses)/income Income tax expenses totaled €24.8 million in the financial year ended November 30, 2012, down €1.9 million, or 7.2%, from €26.7 million in the financial year ended November 30, 2011. Kaufman & Broad and the Issuer are not a consolidated group for tax purposes. Therefore, profits generated by the Company and its subsidiaries consolidated for tax purposes are not charged against the losses of the Issuer. Since there is no projected use of tax losses generated by the Issuer, no deferred tax asset has been recognized for those losses in the consolidated financial statements of the Group. The decrease in tax expenses in the financial year ended November 30, 2012 was due mainly to decreases in provisions for tax risks and in the impact of temporary differences. Permanent differences were due to the Company’s negative permanent differences in the amount of €1.0 million, mainly originating from the tax savings enjoyed by Kaufman & Broad for its Belgian subsidiary in the amount of €1.5 million in the financial year ended November 30, 2012, the interest expenses from undercapitalizing the subsidiaries of €1.0 million, the additional contribution of 3.0% on the interim dividend paid in November 2012 for €1.5 million and other non-deductible expenses. Moreover, the Company, as parent company of the consolidated tax group, recorded a tax savings of €2.4 million related to the crediting of interest on thin capitalization, deduction of which was deferred for previous years.

Minority interests Minority interest income totaled €13.6 million in the financial year ended November 30, 2012, down €1.6 million, or 10.5%, from €15.2 million in the financial year ended November 30, 2011. This decrease in minority interests reflects a decrease in the total number of joint promotions carried out in the financial year ended November 30, 2012, compared to the financial year ended November 30, 2011. Joint promotions refer to all real estate development programs that we undertake in partnership with one or more other entities, either as a majority or as a minority stakeholder. Minority interests represent the interests of our partners in joint promotions where we hold a majority stake. Conversely, we account for our own minority interests in joint promotions in which our partners hold a majority stake under “share of income (loss) of equity affiliates and joint ventures.”

Income attributable to shareholders Income attributable to shareholders totaled €28.8 million in the financial year ended November 30, 2012, up €17.2 million, or 147.7%, from €11.6 million in the financial year ended November 30, 2011. Our net margin (income attributable to shareholders as a percentage of revenues) in the financial year ended November 30, 2012 was 2.8%, up from 1.1% in the financial year ended November 30, 2011.

Liquidity and Capital Resources Our primary needs for liquidity include land purchases, construction and other related costs associated with our programs, acquisitions and completion and other guarantees. In addition, as we are a holding company, we are dependent on the earnings and cash flows from our operating subsidiaries to meet our financial obligations, including payments of principal and interest on the Notes. When the Company provides funds to us in the form of a dividend, a pro rata dividend must be paid to the Company’s public equity holders.

Capital resources Historically, our principal sources of cash for our existing operations have been cash from operations and borrowings under credit facilities. We finance the equity and external financing requirements of the majority of our programs with intercompany loans from Kaufman & Broad S.A. to its subsidiaries, thereby simplifying our financing processes, reducing the management and administrative burden required for these financings and improving cash management. In connection with the Offering, our Existing FG8 Senior Facilities will be repaid in full, cancelled and replaced by the Notes. Furthermore, the Existing K&B Senior Facilities will be refinanced under a New Senior Facilities Agreement. See “Description of Other Indebtedness.”

Liquidity requirements Program financing The Company provides the financing required for our programs through intercompany loans to its subsidiaries. We use dedicated third-party bank loans only for joint promotion programs in which we hold a minority stake.

Land purchases We require significant cash to purchase land. During the fiscal years 2013, 2012 and 2011, we purchased land for total payments of €164.8 million, €170.8 million and €199.6 million, respectively. We record land purchases as inventories. Consequently, the timing and amount of our land purchases have a significant effect on our working capital requirements. Furthermore, we record order indemnities as off-balance sheet items. Order indemnities cover amounts we would have to pay if we cancel conditional purchase agreements for land despite all relevant conditions having been met. As of November 30, 2013, the total amounts that would be payable if we cancelled all of the conditional purchase agreements for the land in our Housing portfolio (despite all relevant conditions having been met) totaled €30.5 million, or 5.1% of the estimated total value of such land. As of November 30, 2013, we recorded €11.1 million, or 36.0%, of these amounts in inventories and €19.7 million, or 64.0%, as off-balance sheet items (see “Risk Factors—Risks Related to our Business and Industry—Off-balance sheet commitments may represent a substantial expense.”).

Acquisitions We continuously assess potential acquisitions in line with our strategy to acquire businesses and assets in areas that increase our presence in high-growth regions in France and to consolidate our market position in the Paris region. We may elect to fund future acquisitions from cash flows and drawings under our credit facilities, subject to their terms and conditions. See “—Acquisitions.”

Guarantees According to Article L.261-11 of the French Construction and Housing Code (Code de la construction et de l’habitation), in connection with VEFA sales contracts, a performance bond must be given to the customer upon execution of the VEFA sales contract. This bond can either be issued by the project itself (intrinsic guarantee), which is only possible under specific conditions, or take the form of a bank guarantee, or GFA (extrinsic guarantee).

For all of our programs, we generally use GFAs by obtaining a guarantee from banks and from certain insurance companies. This method permits deeds of sale to be signed more quickly and facilitates the drawing of funds. We sometimes provide internal construction guarantees to customers in lieu of a performance bond. In such cases, we do not bill a customer until at least 70% of construction is complete. In addition, we also need access to guarantee facilities in order to operate our business. We utilize these guarantees as follows: • As required under French law by Article R.261-17 of the French Construction and Housing Code, we arrange for GFAs to be provided by banks or insurance companies to our customers who purchase properties under VEFA contracts. These completion guarantees provide our customers with firm commitments that construction of their home will be completed. Under these guarantees, the bank or insurance company providing the guarantee would provide funds to pay a third party to complete construction if we were unable to do so. With respect to any particular apartment building or single-family home, the aggregate liability relating to a completion guarantee will decrease to zero over time as construction progresses to completion. • We obtain guarantees required by Article 3 of the so-called “Hoguet Law,” the Law 70-9 of January 2, 1970 (Loi réglementant les conditions d’exercice des activités relatives à certaines opérations portant sur les immeubles et les fonds de commerce), which consist of financial commitments received from financial institutions to guarantee any funds we may receive from customers in our capacity as a real estate broker. • In certain circumstances, we obtain bank guarantees that we use in lieu of cash deposits to guarantee payment of such deposits under our conditional land purchase agreements. See “—Off-Balance Sheet Commitments” for more detail about such guarantees. 84

Consolidated cash flow During the years ended November 30, 2011, 2012 and 2013, the principal components of our consolidated cash flow were as set out below. Our net cash and cash equivalents totaled €190.3 million as of November 30, 2013, up €34.5 million, or 22.1%, from €155.8 million as of November 30, 2012. Cash and cash equivalents as of November 30, 2012 increased by €14.7 million, or 10.4%, compared to November 30, 2011, when they totaled €141.1 million. These changes are analyzed below.

As of and for the year ended November 30,

2011 2012 2013

(in € thousands) Cash flow from operating activities ...... 70,440 155,778 77,555 Cash flow from investing activities ...... 4,564 6,145 (21,450)

Free cash flow ...... 75,004 161,923 56,105 Cash flow from financing activities ...... (74,960) (147,242) (21,572)

Increase (decrease) in cash ...... 44 14,681 34,533 Cash at beginning of year ...... 141,062 141,106 155,787 Cash at end of year ...... 141,106 155,787 190,321

Cash flow from operating activities Cash flows generated by operating activities totaled €77.6 million in the financial year ended November 30, 2013, down from €155.8 million as of November 30, 2012, a decrease of €78.2 million, or 50.2%. The change in cash flow generated from operating activities was primarily due to a reduction in the change in operating working capital requirements (excluding current taxes), which was an increase of €10.7 million as of November 30, 2013, compared to a decrease of €61.7 million as of November 30, 2012. Operating working capital requirements (excluding current taxes) as of November 30, 2013 increased by €10.7 million, or 10.3%, to €108.5 million, compared to €98.3 million as of November 30, 2012. This decrease was due mainly to an increase in accounts payable that was partly offset by increases in inventories and accounts receivable.

Changes in working capital were as follows: • inventories increased by €39.7 million, or 13.9%, to €325.5 million as of November 30, 2013 from €285.8 million as of November 30, 2012; • accounts receivable rose by €23.6 million, or 8.8%, to €291.8 million as of November 30, 2013 from €268.2 million as of November 30, 2012; • accounts payable increased by €76.6 million, or 15.7%, to €565.6 million as of November 30, 2013, compared to €489.0 million as of November 30, 2012; and • other operating assets and liabilities increased by €23.5 million to €56.8 million, or 70.6%, as of November 30, 2013 from €33.3 million as of November 30, 2012. Working capital requirements totaled €114.4 million as of November 30, 2013, compared to €132.9 million as of November 30, 2012, a decrease of €18.5 million, or 13.9%. Working capital requirements as a percentage of revenues amounted to 11.2% as of November 30, 2013, compared to 12.9% as of November 30, 2012. Cash flows generated by operating activities totaled €155.8 million in the financial year ended November 30, 2012, up from €70.4 million as of November 30, 2011, an increase of €85.4 million, or 121.3%. The change in cash flow generated from operating activities was primarily due to the change in operating working capital requirements (excluding current taxes), which was a decrease of €61.7 million as of November 30, 2012, compared to an increase of €21.0 million as of November 30, 2011. Operating working capital requirements (excluding current taxes) as of November 30, 2012 decreased by €61.4 million, or 38.4%, to €98.3 million, compared to €159.7 million as of November 30, 2011. This decrease was due mainly to a decrease in accounts receivable relating to the resumption of commercial activity. 85

Changes in working capital were as follows: • inventories increased by €45.9 million, or 19.1%, to €285.8 million as of November 30, 2012 from €239.9 million as of November 30, 2011; • accounts receivable fell by €37.5 million, or 12.3%, to €268.2 million as of November 30, 2012 from €305.7 million as of November 30, 2011; • accounts payable increased by €64.0 million, or 15.1%, to €489.0 million as of November 30, 2012, compared to €425.0 million as of November 30, 2011; and • other operating assets and liabilities decreased by €5.9 million, or 15.1%, to €33.3 million as of November 30, 2012 from €39.2 million as of November 30, 2011. Working capital requirements totaled €132.9 million as of November 30, 2012, compared to €196.7 million as of November 30, 2011, a decrease of €63.8 million, or 32.4%. Working capital requirements as a percentage of revenues amounted to 12.9% as of November 30, 2012, compared to 18.8% as of November 30, 2011.

Cash flow from investing activities Cash flows from investing activities represented a loss of €21.5 million in the financial year ended November 30, 2013, compared to income of €6.1 million in the financial year ended November 30, 2012, which resulted in: • €1.9 million disbursed in acquisitions of tangible and intangible assets (net of disposals) in the financial year ended November 30, 2013 compared to €4.0 million in the financial year ended November 30, 2012; • €18.4 million in pledged mutual funds (sociétés d’investissement à capital variable, or SICAVs) relating to a challenge to one of our concession agreements, compared to €9.1 million received in repayment of the loan granted to Seniors Santé in 2010 and €1.4 million received in repayment of financial assets (loans) granted as part of real estate projects in the financial year ended November 30, 2012;

• €3.1 million in net outflows to equity affiliates in the financial year ended November 30, 2013, compared to net inflows of €0.5 million in the financial year ended November 30, 2012; • €2.4 million in net inflows from the final reimbursement payment on the loan extended to Seniors Santé in 2010; and • €0.4 million in net outflows corresponding to disbursements of financial assets relating to loans granted in our Commercial property programs. Cash flows from investing activities amounted to €6.1 million in the financial year ended November 30, 2012, compared to €4.6 million in the financial year ended November 30, 2011, which resulted in: • €4.0 million disbursed in acquisitions of tangible and intangible assets (net of disposals) in the financial year ended November 30, 2012, compared to €2.9 million in the financial year ended November 30, 2011; • €9.1 million received in repayment of the loan granted to Seniors Santé in 2010 and €1.4 million received in repayment of financial assets (loans) granted as part of real estate projects in the financial year ended November 30, 2012, compared to a net amount of €5.0 million received in repayment of financial assets in the financial year ended November 30, 2011; and • €0.5 million in net outflows to equity affiliates in the financial year ended November 30, 2012 compared to net inflows of €2.8 million in the financial year ended November 30, 2011.

Cash flow from financing activities Cash flows from financing activities amounted to an outflow of €21.6 million in the financial year ended November 30, 2013, compared to an outflow of €147.2 million in the financial year ended November 30, 2012. These were comprised principally of: • distributions to minority interests for an amount of €9.5 million in the financial year ended November 30, 2013, compared to €14.0 million in the financial year ended November 30, 2012;

• disbursements for the acquisition of minority interests for €2.1 million in the financial year ended November 30, 2013, compared to €1.8 million in the financial year ended November 30, 2012, notably in Elgéa in Île-de- France, Partim in Marseille and HDI in Toulon; • disbursements for the purchase of treasury shares of €1.2 million in the financial year ended November 30, 2013, compared to €6.4 million in the financial year ended November 30, 2012; • disbursements for the repayment of borrowings of €0.0 million in the financial year ended November 30, 2013, compared to €125.1 million in the financial year ended November 30, 2012; and • disbursements in payment of net financial interest in the amount of €8.8 million in the financial year ended November 30, 2013, compared to €0.1 million in the financial year ended November 30, 2012. Cash flows from financing activities amounted to an outflow of €147.2 million in the financial year ended November 30, 2012, compared to an outflow of €75.0 million in the financial year ended November 30, 2011. These were comprised principally of: • distributions to minority interests in an amount of €14.0 million in the financial year ended November 30, 2012, compared to €13.3 million in the financial year ended November 30, 2011; • disbursements for the acquisition of minority interests in Île-de-France, notably in Elgéa in Île-de-France, Partim in Marseille and HDI in Toulon, for €1.8 million in the financial year ended November 30, 2012, compared to €3.3 million in the financial year ended November 30, 2011, in connection with minority interests in ASA Immo and Elgéa in Île-de-France, Azur Investissement in Marseille, Aptimo in Montpellier and Fiparimmo 1 to 16 in the Southwest; • disbursements for the purchase of treasury shares of €6.4 million in the financial year ended November 30, 2012, compared to €2.4 million in the financial year ended November 30, 2011;

• disbursements for the repayment of borrowings of €125.1 million in the financial year ended November 30, 2012, compared to €50.8 million in the financial year ended November 30, 2011; • disbursements in payment of net financial interest in the amount of €0.1 million in the financial year ended November 30, 2012, compared to €5.1 million in the financial year ended November 30, 2011; and • no change in the scope of consolidation in the financial year ended November 30, 2012, compared to an outflow of €0.4 million resulting from such change in the financial year ended November 30, 2011.

Contractual obligations Set forth below are details relating to principal payments on our contractual obligations for the next five years as of November 30, 2013 on a pro forma basis, after giving effect to the Transactions, including the Offering and the application of the gross proceeds therefrom.

Payments due by Period

0-1 year 1-5 years ≥5 years Total

(€ in millions) Notes offered hereby ...... — — 370.0 370.0 New Senior Credit Facilities ...... — 44.4 105.6 150.0 New Revolving Credit Facility ...... — — — — Other third-party financial debt ...... 1.2 — — 1.2

Total ...... 1.2 44.4 475.6 521.2

Contingent Liabilities Please see “Business—Litigation and Other Proceedings.”

Off-Balance Sheet Commitments Due to the nature of our business, we have significant off-balance sheet commitments that may, in aggregate, represent a substantial expense. Our main off-balance sheet commitments consist of property earnest deposits and performance bonds.

Guarantees and bonds given All items detailed below are related to the normal course of our operations.

(in € thousands) November 30, 2011 November 30, 2012 November 30, 2013

Performance bonds(a) ...... 215,873 268,062 203,729 Hoguet Law guarantees(b) ...... 220 220 220 Order indemnities(c) ...... 9,144 17,014 14,363 Other guarantees given(d) ...... 51,935 64,004 89,073

Guarantees and bonds given ...... 277,172 349,300 307,385

(a) Performance bonds are given to customers in VEFA sales. We ask a financial institution, mutual guarantee institution or insurance company to issue a guarantee of completion in favor of Kaufman & Broad customers. These guarantees are established on a transaction by transaction basis and have a term comparable to the transaction completion term.

In consideration for such guarantees, we typically give such financial institutions or insurance companies a mortgage commitment and a non-assignment of shares undertaking if the program is funded by a special-purpose entity.

Performance bonds are shown on the balance sheet in the amount of the risk incurred by the financial institution issuing such guarantees. Such risk is valued, for each transaction, as follows: program’s forecast production cost less the part financed by the group and the amount of sales signed as of the closing date. This valuation thus does not take into account orders made as of the closing date or the percentage of completion of construction on units not sold.

Performance bonds are valued internally each month and the coherence of the data is verified quarterly based on the figures communicated by the financial institution on the basis of its own reports to Banque de France or to the Insurance Control Commission.

(b) The Hoguet Law guarantees are required from companies intending to operate as a real estate agent. This purely ad-hoc operation does not form part of our strategy. (c) Order indemnities are bank guarantees given in lieu and in place of security deposits in connection with land acquisition commitments. (d) These other guarantees principally cover acquisitions of land and matters related to roads and infrastructure.

Commitments related to capital expenditures, purchases and rentals

Payments due by maturity

November 30, 2013 0-1 year 1-5 years ≥5 years

(€ in thousands) Commitments for leases...... 49,015 8,103 23,601 17,311 Investing commitments ...... — — — —

Total ...... 49,015 8,103 23,601 17,311

This table includes the commitment given by the Group in connection with a 9-year lease of our offices in a real estate transaction initiated by the Group beginning with the delivery of the building envisaged for June 2014, for annual rental payments of €3.2 million, i.e., a total of €28.6 million. However, we reserve the right to find another lessee, which would bring this commitment to an end. The rent expense recognized on the income statement as of November 30, 2013 for operating leases amounted to €5.7 million (compared to €6.4 million as of November 30, 2012 and €5.7 million as of November 30, 2011). Our finance leasing agreements are capitalized.

Quantitative and Qualitative Disclosures About Market Risk Interest rate risk Our debt structure, which is indexed to variable rates, exposes us to direct interest rate risks that could lead to a material increase in our obligations. Our policy for managing interest rate risk is intended to limit and control fluctuations in interest rates and their impact on net earnings and cash flow, so that the total cost of the debt remains acceptable. To achieve 88

this objective, we hedge our variable-rate loan interest flows with interest-rate swaps. The latter are derivatives serving to hedge cash flows. They are marked to market on the balance sheet. Under the New Senior Facilities Agreement, the Company agreed to, within 90 days from the Issue Date, enter into one or more hedging agreements to hedge against interest rate fluctuations in respect of 50% of the aggregate commitment under the New Senior Facilities Agreement. Interest-rate hedges are made by way of instruments listed on organized markets or over-the-counter with high-quality counterparties. The fair value of these derivatives is provided by a specialized company outside the Group (level 2 valuation as defined by IFRS 7). The hedging reserve net of tax as of November 30, 2013 was €79 thousand.

Cash flow hedging instruments We use only future cash flow hedging instruments: • the cash flow hedge covers the exposure to changes in cash flows attributable to a specific risk associated with a recognized asset or liability or with an anticipated transaction (e.g., interest flows on variable-rate debt) where such risk would affect the reported net income; and • the effective portion of the change in fair value of the hedging instruments is booked directly through equity. The change in the value of the ineffective part of the hedging instrument is recognized in financial income. The amounts recorded as equity are shown in income in a manner symmetrical to the way in which the hedged assets and liabilities are recognized.

Equity risk We have only limited risk to equity risk because (i) the marketable securities held by the Company consist of money- market mutual funds rated investment grade that are distributed by recognized institutions; and (ii) treasury shares are held either to meet the objectives outlined in the description of the share buyback program by the Company of its own shares, i.e., to be used principally for the stock option and bonus share plans, or under the liquidity contract. We have not invested in any other listed or unlisted financial instruments.

Counterparty risk Our counterparty risks primarily concern suppliers and subcontractors, customers and banking counterparties. Because of the large number of suppliers and subcontractors with which we do business, their insolvency is unlikely to have any material impact on our operations. Our counterparty risk on trade receivables is very limited due to our large customer base and as a result of our sales contracts, which are executed exclusively before a civil-law notary, generally after our customers obtain financing for the acquisition of their property. Our local branches manage customer-related credit risks under the oversight of our corporate headquarters. Due to the nature of our business, we believe our exposure to customer default risks is low. We review aging receivables monthly. We invest our cash and cash equivalents and our investment securities with top-tier financial institutions. We enter into interest rate agreements with leading financial institutions. We face counterparty risks in connection with our joint promotion programs, which we conduct through sociétés civiles immobilières. In particular, we may have to cover a portion of our partners’ share of the financing of, and losses in, any non- profitable programs if our partners refuse to pay or are unable to do so because they have become insolvent.

Liquidity risk See “—Liquidity and Capital Resources—Liquidity requirements” and “Risks Related to Our Indebtedness and the Notes.”

Critical Accounting Estimates and Judgments Estimates and assumptions We make estimates and assumptions based on past experience and in accordance with the expected changes in the markets in which we operate, or based on other factors deemed reasonable in light of the circumstances. These assessments have an impact on our income and expenses and on the book value of our assets and liabilities. Our estimates and assumptions impact primarily: • earnings forecasts for our programs, which we use to recognize percentage-of-completion transactions; • the business plans we use to perform impairment tests on goodwill and other intangible assets; and • the recoverability of tax assets. Selling price and take-up rate assumptions based on the earnings forecast for real estate developments and actual budget results for the medium-term provisional budgets used for such purposes could be impacted by the economic environment and regulatory changes, particularly government tax incentives.

Accounting judgments Certain IASB standards developed by IASB provide for options with regard to the measurement and recognition of assets and liabilities. We have opted for: • the measurement method based on the amortized historic cost of property, plant and equipment and intangible fixed assets as of each period-end date. We decided not to re-measure our property, plant and equipment and intangible assets at each period-end date (IAS 16 “Property, Plant and Equipment” and IAS 38 “Intangible Assets”);

• application of the option provided for by the amendment to IAS 19 “Employee Benefits” to recognize all actuarial gains and losses on defined-benefit plans in the balance sheet through equity, net of deferred taxes; and • application of the option provided for by IAS 31 para. 38 to consolidate companies held under joint control using the equity method. Consolidation based on the financial statements as of November 30 includes almost all businesses included in the Group. A few equity affiliates have a different period-end date and are consolidated on the basis of interim financial statements as of November 30, corresponding to 12 months of operations, as their contribution is not material.

INDUSTRY Certain of the information set forth in this section has been derived from external sources, including information from Eurostat, BNP Paribas Real Estate, the Crédit Agricole Group, Jones Lang Lasalle, ImmoStat, the French Ministry of Higher Education and Research, the French Ministry of Ecology, Sustainable Development and Energy, the IMF, INSEE, FNAIM, FPI, SOeS, Sit@del2 and the ECLN. Industry publications generally state that the information contained therein has been obtained from sources believed to be reliable, but some of the information may have been derived from estimates or subjective judgments or may have been subject to limited audit or validation. While we believe this market data and other information to be accurate and correct, we have not independently verified it. Furthermore, such estimates or judgments, particularly as they relate to expectations about our markets and industry, involve risks and uncertainties and are subject to change based on various factors, including those discussed under “Risk Factors” and “Forward-Looking Statements” elsewhere in these Listing Particulars. The projections and other forward-looking statements in this section are not guarantees of future performance and actual events and circumstances could differ materially from current expectations. Numerous factors could cause or contribute to such differences. See “Risk Factors” and “Forward-Looking Statements.”

Overview We conduct our business in the real-estate development industry in France, predominantly in its residential housing market (“Residential Housing”), where we service both the apartments and single-family homes in communities end- markets. We also operate in the commercial real-estate market (“Commercial Real Estate”) and a variety of ancillary end- markets covering all aspects of the real-estate development process, including land sourcing, obtaining building permits, project design, customer service and property sales.

Macroeconomic Environment in France The general economic environment in France has a direct impact on the real estate development market and notably on the Residential Housing market in which we operate. In 2013, the French economy witnessed a period of stagnation for the second consecutive year with little to no economic growth (GDP grew by 0.3% in 2013 according to estimates by the IMF, compared to 0.0% in 2012 according to INSEE). The following chart depicts the evolution of GDP in France from 2003 to 2013:

French GDP growth (in %)

Source: INSEE (2003-2012); IMF (2013) estimate as of January 2014

Property development in France is susceptible to changes in key macroeconomic indicators. Some of the most significant factors that impact economic growth in France are: • Consumer Confidence. Despite low inflation rates, consumer levels in France have remained constrained by offsetting dynamics affecting purchasing power, such as government austerity measures (notably tax constraints), household deleveraging (mainly through spending cuts) and high unemployment.

The following chart depicts the evolution of the consumer confidence index in France between 2003 and 2013:

Monthly change in INSEE French Consumer Confidence Index (base 100 in 2003)

Source: INSEE • Unemployment. Notwithstanding positive factors such as government job schemes, unemployment levels in France remain high (10.2% in metropolitan France in 2013 and 2012) as employers continue to use existing resources instead of new hires to offset low productivity and falling corporate profit margins. The following chart depicts the evolution of the unemployment rate in metropolitan France between 2003 and 2013:

Unemployment in metropolitan France (in %)

Source: INSEE • Interest Rates. Interest rate levels in France dropped to historical lows in 2013, which helped maintain favorable lending conditions. An increase in interest rates could have an adverse impact on financing options available to businesses and consumers.

The following chart depicts the evolution of interest rates in France between 2003 and 2013:

Changes in interest rates (TME) (in %)

Source: Banque de France average government bond rate (“TME”)

The housing market Despite a currently stagnant or declining macroeconomic environment, we believe the French Residential Housing market benefits from favorable demographics and market characteristics.

General market constraints The Residential Housing market remained weak in 2013, although demand has continued to outstrip supply. Notably: • the number of housing units under construction was down 3.2% for the year, with 294,465 new units in 2013 compared to 304,234 units in 2012, according to data published by the French Ministry of Ecology, Sustainable Development and Energy; • the number of housing units authorized to be built fell by 12.3% to 377,170 units compared to 429,851 units in 2012, according to data published by the French Ministry of Ecology, Sustainable Development and Energy; • the prices of existing homes dropped by an average of 2.9% according to FNAIM estimates and the prices of new-builds remained almost flat, with average prices varying depending on the region, the size of the population centers and the location of the housing units within these centers; • order volumes dropped to their second lowest level since 2000 for new-build units (approximately 87,700 in 2013 according to the French Ministry of Ecology, Sustainable Development and Energy, compared to 88,904 in 2012 and 105,000 in 2011 according to data published in the ECLN) as well as for existing homes (approximately 668,000 in the year ended December 31, 2013 according to FNAIM estimates); • individual investors remained underrepresented among homebuyers for the second year in a row, accounting for 40% of homebuyers in 2013, compared to 43% in 2012 and 55% on average over the 2005-2011 period according to data published by the FPI; and • take-up periods reached 14 months compared to an average of 7.7 months for the period between 2000 and 2010 according to data published by the Crédit Agricole Group.

Market volume Housing at low production volumes After dropping to their lowest levels in 2009, yearly housing starts have increased only slightly, averaging approximately 350,000 starts per year compared to an average of 450,600 starts per year between 2004 and 2007. There were approximately 332,000 housing starts in 2013, or approximately 14% fewer housing starts than the 385,500 average yearly housing starts between 2003 and 2013.

Historical evolution of housing construction starts in France (in thousand units)(1)

Source: Ministry of Ecology, Sustainable Development and Energy, based on Sit@del2 data

* Data for 2012-2013 shows statistics of reported housing construction starts (recorded at the time of notification to public authorities rather than the actual start date of construction) that have not been adjusted to account for subsequent cancellations. Data for 2003-2011 shows statistics of housing construction starts based on actual construction starts dates and adjusted for subsequent cancellations.

(1) Includes detached single-family homes, single-family homes in communities, apartments and residences (new-build construction and renovation of existing units). The following are the main characteristics of the evolution of housing volumes in France in 2013: • The number of housing starts (single-family homes, single-family homes in communities, apartments and residences (including new-build construction and the renovation of existing units)) was down 4.2% for the year, with 331,867 housing starts in 2013 compared to 346,463 in 2012, according to data published by the French Commissariat Général au Développement Durable. • Out of these, 294,465 (89% of total housing starts) correspond to new construction in 2013, and 37,402 to renovation of existing units. These figures include detached homes, single-family homes in communities, apartments and residences. • Our core end-markets, apartments and single-family homes in communities, registered order volumes of 87,700 in 2013 (real estate developers’ market, excluding social housing) according to the French Ministry of Ecology, Sustainable Development and Energy.

Apartments The new-build apartments end-market registered 94,728, 80,373 and 79,035 orders in France in 2011, 2012 and 2013, respectively. The following chart shows the evolution of the new-build apartments end-market between 2003 and 2013:

Change in orders, units available for sale and average price per sq.m for new-build apartments

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Orders ...... 87,733 95,667 102,991 109,429 110,499 67,960 93,098 102,533 94,728 80,373 79,035 Units available for sale(1) ...... 31,101 31,943 44,590 67,506 87,866 94,425 58,880 50,552 64,165 85,767 90,269 Average price (€/sq.m) ...... €2,350 €2,563 €2,850 €3,071 €3,273 €3,344 €3,369 €3,573 €3,782 €3,873 €3,869

Source: French Ministry of Housing, New Housing Sales Study (ECLN); (1) Commercial offer, or new-build units available for sale at the end of the year (that have not been reserved).

Changes in new-build apartment market (base 100 in 2003)

Source: French Ministry of Housing, New Housing Sales Study (ECLN)

Single-family homes in communities The new-build single-family homes in communities end-market registered 10,272, 8,531 and 8,686 orders in France in 2011, 2012 and 2013, respectively. The following chart shows the evolution of the new-build single-family homes in communities end-market between 2003 and 2013:

Change in orders, units available for sale and average price of new-build single-family homes in communities

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Orde rs . 15,729 16,524 18,432 16,535 16,426 10,740 12,776 12,752 10,272 8,531 8,686 Units av ail ab le fo r sa le( 1) ... 6,403 7,919 8,181 11,134 14,201 15,362 10,341 8,782 8,659 10,493 10,606 Aver ag e pr ic e (€ /s q. m € € € € € € € € € € € ) ... 189,699 200,531 220,507 243,203 250,530 249,833 243,296 239,463 246,369 250,582 247,100

Source: French Ministry of Housing, New Housing Sales Study (ECLN) (1) Commercial offer, or new-build units available for sale at the end of the year (that have not been reserved).

Changes in new-build single-family homes in communities (base 100 in 2003)

Source: French Ministry of Housing, New Housing Sales Study (ECLN)

Key drivers We believe the following are key growth drivers of the French Residential Housing market: • Macroeconomic environment. For a discussion of macroeconomic factors that have an impact on the French Residential Housing market, see “—Macroeconomic Environment in France.”

• Positive demographics. France has one of the fastest population growth rates in Western Europe. These favorable demographics, accelerated by a sustained historical increase in the number of French households (approximately 27% from 1990 to 2010 according to data published by INSEE) are essential to positive demand dynamics in our core market. • Homeownership rates. France has one of the lowest homeownership rates in Europe (63% as opposed to 71% for the European Union in 2011 according to Eurostat). This sizeable pool of would-be homeowners increases the potential for growth opportunities in our core market. • Favorable lending conditions. The customers’ ability to secure financing to buy a home and to make regular mortgage payments is key in the Residential Housing market. Historically-low interest levels in France facilitate favorable lending conditions, which in turn provide structural market support, due to a positive effect on homeowners’ borrowing power. Conversely, an increase in interest rates could have an adverse impact on our potential customers’ ability to purchase our products. • Governmental measures. Government incentives that foster home construction and access to home ownership in France are key factors in increasing housing demand.

Tax incentives The French Residential Housing market has benefited from various tax incentives for more than two decades. Over the years, the French state has implemented various financial schemes to facilitate property ownership through loans such as the home ownership assistance loan (“PAP”), which was replaced in 1995 by the zero-interest loan, then revised in 2005 and doubled in 2010, and ultimately replaced as of January 1, 2011 by the Zero Interest Plus (“PTZ+”) loan. In December 2008, France adopted a new tax incentive, known as the “Scellier Law.” This scheme allowed individual buy-to-let investors to claim income tax deductions of between 25% and 37% of the purchase price of new housing property or housing property sold pursuant to a VEFA contract between January 1, 2009 and March 31, 2013. The Scellier Law applied subject to various conditions. Notably, it applied only to property rented out for a period of nine to 15 years. This incentive, which was extended to the end of March 2013 for investment commitments made in 2012, has now expired and has been replaced by the Duflot Law. Implemented in 2013, the “Duflot Law” allows individual buy-to-let investors who acquire a new rental housing property or a rental housing property sold pursuant to a VEFA contract between January 1, 2013 and December 31, 2016, to benefit, under certain circumstances, from an income tax deduction of 18% spread over a period of nine years.

We estimate that these tax incentives have had and are expected to continue to have a positive influence on the new housing market, even though it is impossible to quantify their exact impact. The chart below summarizes the sequence of the various tax incentives that have affected the housing market from 2002 to 2013:

Evolution of housing tax incentives in France

Commercial Real Estate Our Commercial property activities almost entirely consist of mid-size programs developed on behalf of third parties or sold pursuant to VEFA contracts to specific end-users or investors in Île-de-France. The Commercial Real Estate VEFA market in Île-de-France declined to €1.1 billion in 2013 from €1.3 billion in 2012 and €1.9 billion in 2011.

Investment in Commercial Real Estate in France with share of offices (in €bn)

Investment in Commercial Real Estate in France with share of Île-de-France and the Regions (in €bn)

Source: BNP Paribas Real Estate

Investment in Commercial Real Estate in Île-de-France (VEFA) (total for last 12 months as of each quarter, in €bn)

Sources: Jones Lang LaSalle / ImmoStat

Competition Principal market operators The competitive landscape in France’s new-build housing market is characterized by relative concentration. We mainly compete with a limited number of major national companies. However, we also compete with local and regional real estate developers well positioned in their particular markets. We rank third in the new-build housing market, with a 6.1% market share as of November 30, 2013 by order volume, after Bouygues Immobilier and Nexity. Other competitors include Icade, Cogedim and Les Nouveaux Constructeurs.

BUSINESS Overview We are the third-largest residential real estate developer in France by revenue and order volume, with a market share of 6.1% based on order volume in the financial year ended November 30, 2013. Over the course of our more than forty years of experience developing and building apartments, single-family homes, serviced accommodations and commercial property in France, we have built approximately 98,200 Housing units and 522,200 sq.m of office and commercial space in metropolitan France. We are involved in all aspects of the real estate development process, including land sourcing, obtaining building permits, project design, customer service and property sales. Construction for our programs is carried out by a general contractor or separate specialized contractors. We focus primarily on developing residential apartment units, as apartments have historically represented the largest, fastest growing and most stable segment of the French residential real estate market and have demonstrated sustained price resiliency. Sales of apartment units accounted for 89.6% of our revenues in the financial year ended November 30, 2013. Our remaining revenues were derived from single-family home sales, commercial programs, Showroom services and certain other activities, which accounted for 4.7%, 5.0%, 0.6% and 0.1%, respectively, of our revenues in the financial year ended November 30, 2013. In the financial year ended November 30, 2013, we had €1,026.0 million in total revenues, and our Adjusted EBITDA amounted to €93.1 million. We have structured our business model to minimize risks often associated with residential real estate development businesses, notably by securing land option contracts rather than building up land banks and by purchasing land in most cases only after achieving at least 50% pre-sale rates in our Housing segment and 100% pre-sale rates in our Commercial property segment. We do not purchase land for speculative purposes. Our operations are divided into three business segments: “Housing,” “Commercial property” and “Other operating activities.” Housing, which is our core segment and includes the development of apartments (including mixed-use buildings containing apartments, business premises, retail space or offices), single-family homes in communities (grouped homes) and serviced accommodations for corporate clients, tourists, students and independent seniors, accounted for 94.3% of our revenues in the financial year ended November 30, 2013. Our Commercial property business accounted for 5.0% of our revenues in the financial year ended November 30, 2013. Our Other operating activities segment includes certain business activities related to the Housing segment, including land and building lot sales, project management and additional housing services known as Showroom services. Our Other operating activities segment accounted for 0.7% of our revenues in the financial year ended November 30, 2013. We operate primarily in major French cities and suburbs where we have developed in-depth local market expertise. We focus our operations in 14 specific markets within France, where we have identified strong growth in demand and where we are a market leader with a well-recognized and respected brand. Historically, our principal market has been Île-de-France, where we estimate that we are one of the largest real estate developers of single-family homes and apartments, with a market share of 12.0% for single-family homes and 11.1% for apartments in 2013, based on order volume. As of November 30, 2013, Île-de-France represented 46.1% of our Housing orders. We have also identified opportunities in markets outside of Île-de-France, where demographic and sociological trends are driving rapid growth. We estimate that we are one of the largest real estate developers of single-family homes and apartments in Midi-Pyrénées, with market shares of 16.5% and 9.6%, respectively, in 2013, and one of the largest real estate developers of apartments in the West (Pays de la Loire and Brittany), with a market share of 9.3% in 2013, in each case based on order volume. Most recently in the financial year ended November 30, 2013, we expanded our business northward to Lille (in the Nord-Pas-de-Calais region), France’s fourth-largest city. We believe that this acquisition will allow us to take advantage of market growth in the area. In the year ended November 30, 2013, revenues from the Regions (i.e., the regions of France in which we operate outside of Île-de-France) accounted for 57.9% of our total revenues. We believe that the share of our total revenues attributable to the Regions will grow in the coming years. Our strategy is to focus predominantly on first-time buyers, while we continue to develop products aimed at investors under separate incentives. In the financial year ended November 30, 2013, approximately 27% of our orders were from first- time buyers, accounting for 33% of our revenues, and 38% were from investors, accounting for 34% of our revenues. For the same period, block buyers, consisting of institutional investors and public-housing operators, accounted for 27% of orders and 20% of revenues and second-time homebuyers accounted for 8% of orders and 14% of revenues. We are also expanding our serviced accommodations for corporate clients, tourists, students and independent seniors, as well as our public-housing initiatives in urban renewal areas.

Our Competitive Strengths We believe that our key strengths include the following:

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We have demonstrated our ability to maintain our competitiveness through difficult economic conditions by adapting our product offerings to meet the changing needs of our customers. Most notably, prior to the 2008 financial crisis our primary customer base was second-time homebuyers. In response to reduced demand in this segment, we revised our development strategy by offering smaller units at lower prices, in order to appeal to first-time homebuyers. In recent years, first-time homebuyers have accounted for a greater percentage of orders than second-time homebuyers across our product portfolio. We have also expanded our Commercial property offerings to meet our Commercial property customers’ evolving needs.

financial year ended November 30, 2008, operational cash flow increased by 81.3% to €217.6 million in the financial year ended November 30, 2009, from €120.0 million in the financial year ended November 30, 2008. As market conditions slowly improved in 2010, we increased development activities and new program generation, which resulted in the Company’s current operating profit more than doubling from €25.0 million in the financial year ended November 30, 2009 to €66.7 million in the financial year ended November 30, 2010 while our operational cash flow settled back down to €92.4 million. Additionally, since the financial crisis of 2008, we have adopted a more conservative stance towards our pre-sale target for Housing programs by increasing our sales target from 20-30% as of 2007 to 50% as of 2013. This policy change has helped reduce risks associated with our operations and contributed to the decline in the Company’s working capital requirements, as a percentage of revenue, from 31.5% as of November 30, 2007 to 12.4% as of November 30, 2013. While backlog data provides some visibility of future revenues, there is no assurance that anticipated revenue will be recognized in accordance with our backlog data. Anticipated revenues from Housing units under construction are not assured because we may not have signed notarized deeds of sale or, in some cases, purchased the land on which we plan to build the program at the time such anticipated revenues are included in backlog.

Our Strategy We seek to distinguish ourselves from our competitors and to increase our revenues and operating income through the following core business strategies:

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For example, in May 2013, we expanded our business to Lille in the Nord-Pas-de-Calais region by acquiring Flandres Promotion, which we believe will enable us to develop our operations and presence in that region. In the past, we have expanded our operations and presence through selective acquisitions in regions in which we have not previously been active, including Marseille, Toulouse, Montpellier and Grenoble among others. We plan to continue to build on our strong market share within the apartment units segment in these regions, while also selectively expanding our single-family home operations outside of Île-de-France.

leisure centers, which we believe are important features for independent seniors who are considering purchasing serviced accommodations. Additionally, we recruited a director for serviced accommodations in 2013 to provide in-house support to local branches and serve as a point of contact for serviced accommodation managers. Finally, we are also expanding our Commercial property business. We will continue to strengthen our presence in the market and selectively develop large-scale, multipurpose commercial, hotel and housing complexes. We will continue to strive to meet the key requirements of (i) users, by designing high-quality spaces that provide a pleasant work environment; and (ii) investors, by enhancing their investment through high-quality designs (upscale buildings) and space flexibility and adaptability. Our office property reserves amounted to almost 58,800 sq.m net floor area as of November 30, 2013, compared to 37,806 sq.m as of November 30, 2012.

Our History Milestones

Year Milestone

1968 Formation of Kaufman & Broad S.A. in France 1970 Delivery of the first program in the Paris region 1985 Acquisition of Bati Service 1995 to 1999 Acquisition of Bréguet, SMCI, CFP-SMCI and Park 2000 Kaufman & Broad listed for trading on the Paris stock exchange Acquisition of Frank Arthur, Sefima, First Promotion and Sopra Promotion 2001 Acquisition of Résidences Bernard Teillaud 2003 to 2005 Acquisition of Euro Immobilier, the Avantis group, Foncier Investissement-Malardeau, and programs developed by Lotibat 2007 Acquisition of a majority stake in Kaufman & Broad by the Issuer 2010 Acquisition of SM2I 2013 Acquisition of Flandres Promotion

Background In 1968, Kaufman & Broad began its operations by developing single-family homes in communities in France. It delivered its first program in 1970 in Île-de-France. It expanded its operations in Lyon and Marseille in 1972 and in Frankfurt and Brussels in 1973. In 1983, Kaufman & Broad withdrew from these foreign markets and focused on its French activities.

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Acquisition strategy In the second half of the 1980s, Kaufman & Broad initiated a policy of external growth in the French market with the acquisition in 1985 of Bati Service, a company building single-family homes in communities designed primarily for first- time buyers. It then acquired the business and other assets of one of its primary competitors at the time, Bréguet, a specialist in the construction of single-family homes in communities. In August 1997, Kaufman & Broad acquired the principal assets (consisting of interests in 13 private real estate companies) and related liabilities of Société de Missions et de Coordinations Immobilières (“SMCI”) and CFP-SMCI, two companies specializing in the construction of apartments in large French cities, including Paris, Marseille, Lyon, Strasbourg, Rouen and Besançon. In the second half of 1999, Kaufman & Broad acquired Park and its subsidiaries (SNC Park Promotion, SNC Park Rénovation and real estate investment companies (“SCI”s) that owned individual apartment programs), a specialist in the construction of apartment units in Île-de-France. Kaufman & Broad conducted four acquisitions in 2000, two of which involved companies specializing in the construction of apartments in Paris and the inner suburbs of Île-de-France (Frank Arthur Promotion in January and Sefima in July, respectively). Kaufman & Broad acquired these two companies to strengthen its market share in Île-de-France. The other two companies were First Promotion in Lille, which Kaufman & Broad purchased in July, and Sopra Promotion in Toulouse, which Kaufman & Broad acquired in November. These acquisitions illustrate Kaufman & Broad’s ability to expand successfully into new regional markets with high growth potential through the acquisition of existing experienced local companies. The four acquisitions together represented a total investment of approximately €44.0 million. In August 2001, Kaufman & Broad acquired Progesti S.A. (the Résidences Bernard Teillaud group), a leading real estate developer and homebuilder in the Grenoble region. The total price of this investment was approximately €32.0 million, including a variable portion calculated on the basis of the company’s actual results from 2002 to 2005, which totaled approximately €16.3 million. In October 2003, Kaufman & Broad acquired Euro Immobilier, a Toulouse-based real estate developer with programs in Midi-Pyrénées and Gironde, for a purchase price of €7.0 million. In the financial year ended November 30, 2004, Kaufman & Broad acquired two real estate developers, located mainly in the Southwest of France, particularly Midi-Pyrénées and Aquitaine. First, Kaufman & Broad acquired the shares of the Avantis group during the first half of 2004 for €9.7 million. It then acquired Société de Développement et de Participation (Foncier Investissement – Malardeau) in June 2004 for €15.6 million.

In June 2005, Kaufman & Broad purchased 15 housing programs for €4.7 million. These programs were previously developed under the Lotibat name. Kaufman & Broad assumed control of these programs on June 1, 2005. In June 2007, Kaufman & Broad acquired 33.34% of Beaulieu Patrimoine S.A.S. (renamed Seniors Santé), a nursing home operator. In order to refocus our operations, we sold our minority interest in Seniors Santé on October 13, 2010. In September 2010, we acquired the regional promotion firm SM2I for €5.1 million. As a result of this acquisition, we increased our operations in the Bretagne region. We did not conduct any acquisitions during the financial years ended November 30, 2011 and 2012. On May 29, 2013, we acquired Flandres Promotion in Wasquehal, France, for a provisional sum of €0.6 million, subject to adjustments based on certain future performance criteria, €0.4 million of which was paid upon signing the acquisition agreement. We believe this acquisition will allow us to relaunch our activities in the Nord-Pas-de-Calais region, with a property portfolio of approximately 80 units in four programs under management on the acquisition date.

Our Organization Operational structure We are organized into corporate divisions and three operating divisions headed respectively by Nordine Hachemi for Île-de-France, Jacques Rubio for the Southwest Region, and William Truchy for the West, North, Rhône-Alpes and Southeast Regions. In addition, we have 14 regional divisions: Île-de-France (split into three sectors), Loire-Atlantique/Bretagne, Normandie, Rhône-Alpes, Savoie/Grenoble, Côte d’Azur/Provence, Mediterranée (Bouches-du-Rhône), Languedoc- 105

Roussillon, Midi-Pyrénées, Pyrénées-Atlantiques, Aquitaine and Lille-Flandres. The management teams in each of these regional divisions have significant experience in their markets. To help us benefit from this local expertise, regional divisions are given substantial autonomy to identify sites, develop sales strategies, and implement development and construction activities and control costs. Each regional division has a business development and project management department, a technical department, a sales department and, in some cases, a “Design Space” showroom. We also support regional divisions with shared regional resources, namely sales administration and management control and with central resources, namely the corporate divisions of finance, information systems, legal services, marketing, web-based communications and human resources. We provide our subsidiaries and local branches within our regional divisions with various administrative and management services, including consulting in: • project financing; • organizational set-up, recruitment, personnel management, payroll administration and compensation; • accounting, legal, tax and treasury management; • processing and installation of information systems; and • marketing support, as well as assistance and advice for customer sales. The costs of these services are divided among Group companies through our Economic Interest Grouping (“GIE”) on the basis of the number of employees assigned to each activity and the volume of business produced by each subsidiary. However, corporate and IT costs are reinvoiced to our subsidiaries in accordance with a distribution matrix set out in our annual budget, on the basis of the business conducted by each subsidiary and the geographical area covered by their respective operations. Our principal subsidiaries (Kaufman & Broad Homes S.A.S., Kaufman & Broad Développement S.A.S., Kaufman & Broad Nantes S.à r.l., Kaufman & Broad Normandie S.à r.l., Kaufman & Broad Rhône-Alpes S.à r.l., Kaufman & Broad Savoies S.à r.l., Résidences Bernard Teillaud S.à r.l., Kaufman & Broad Côte d’Azur S.à r.l., Kaufman & Broad Provence S.à r.l., Kaufman & Broad Méditerranée S.à r.l., Kaufman & Broad Languedoc-Roussillon S.à r.l., Kaufman & Broad Midi- Pyrénées S.à r.l., Kaufman & Broad Pyrénées Atlantiques S.à r.l., Kaufman & Broad Aquitaine S.à r.l., SM2I S.à r.l. and Kaufman & Broad Flandres S.à r.l.) supply the subsidiaries that hold our real estate programs with development, management, sales and marketing and technical assistance services. As consideration, the companies providing such services receive a fee in accordance with contractual arrangements.

Geographical presence We seek to conduct business in geographical areas where there is strong potential for economic and demographic growth in the medium and long term. Consequently, we have refocused our operations on the regions we believe provide the greatest opportunity to increase our market share in the industry. In the financial year ended November 30, 2013, Île-de- France accounted for 44.2% of our Housing revenues with the remaining 55.8% coming from the Regions, compared to 45.5% and 54.5%, respectively, in the financial year ended November 30, 2012. We intend to continue to develop our operations in major economic regions where we see strong demographic growth potential, such as Annecy, Bayonne, Bordeaux, Grenoble, Lille, Lyon, Marseille, Montpellier, Nantes, Nice, Rennes, Toulon, Toulouse and particularly Île-de-France. The map below shows our current presence in France and the geographical breakdown of our Housing revenues for the financial year ended November 30, 2013.

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The sales mix between Île-de-France and the Regions can be analyzed as follows in terms of EHUs delivered:

Share of Housing units EHUs delivered

2011 2012 2013

Île-de-France ...... 33.8% 40.7% 40.9% Regions ...... 66.2% 59.3% 59.1%

Total ...... 100% 100% 100%

The following table shows our estimated market share, by order volume, in each geographical area:

Market share

2011 2012 2013

Grouped homes Île-de-France ...... 0.2% 11.8% 12.0% Languedoc-Roussillon ...... 5.9% 7.9% 2.5% Midi-Pyrénées ...... n/a 5.2% 16.5% West(a) ...... 0.3% 4.1% 1.2% Provence-Alpes-Côte d’Azur ...... 4.9% 1.7% 6.4%

Total grouped homes, France ...... 0.9% 2.9% 4.0%

Apartments Île-de-France ...... 11.5% 11.6% 11.1% Aquitaine ...... 13.1% 11.5% 7.4% Languedoc-Roussillon ...... 4.7% 5.5% 4.0% Midi-Pyrénées ...... 10.2% 12.2% 9.6% West(a) ...... 5.1% 6.1% 9.3% Provence-Alpes-Côte d’Azur ...... 11.5% 8.1% 7.0% Rhône-Alpes ...... 3.9% 2.0% 2.6%

Total Apartments, France ...... 6.7% 6.5% 6.4% Total Housing Units, France ...... 6.1% 6.2% 6.1%

Source: Kaufman & Broad and French Ministry of Housing, New Housing Sales Study (ECLN) (a) Pays de la Loire and Bretagne.

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Our Customers Our customers consist of homebuyers (for primary and secondary residences) and private, corporate or institutional investors), in Île-de-France and other major metropolitan areas. Because we have a diverse customer base we are less dependent on anyone for our customer segments. Until 2007, Kaufman & Broad focused primarily on the second-time homebuyer market, long considered the deepest and most durable segment of the real estate market in France. However, the 2008 real estate crisis and reluctance on the part of second-time buyers to enter into transactions for new housing during the crisis prompted us to reorganize our strategy and adjust our product offerings toward housing that provides desirable living settings while maximizing space despite constraints imposed by more compact footprints. These types of products are more tailored to investors’ profitability requirements and to constraints on first-time buyers’ ability to finance home purchases. Sales of primary residences nonetheless remain a core component of our business. The table below presents the percentages of our total orders by volume and value represented by each type of customer for the financial years ended November 30, 2011, 2012 and 2013.

Percentage of total orders(a) Percentage of total orders(a) (by volume) (by value, including VAT)

2011 2012 2013 2011 2012 2013

Individual investors(*) ...... 46 36 38 46 33 34 % % % % % % Block(b) ...... 27 27 26 18 20 20 % % % % % % First-time homebuyers ...... 20 29 27 23 32 32 % % % % % % Second-time homebuyers ...... 7 8 9 13 15 14 % % % % % %

Total ...... 100 100 100 100 100 100 % % % % % %

* Of which Scellier and Duflot 37 26 23 37 24 23 investors ...... % % % % % %

(a) Including joint ventures. (b) Representing institutional and public housing operators. In an uncertain economic environment, where housing demand continues to exceed supply, we focus more on first-time buyers who benefit from the “Zero-Interest Plus Loan” scheme while continuing to develop products aimed at investors under the Duflot incentive. Furthermore, in order to better meet the needs of the market, we are focusing increasingly on housing for students and seniors, where demand is growing. In the financial year ended November 30, 2013, despite reduced tax incentives, the portion of our orders that came from investors remained significant. Rental investment from investors accounted for 34% of orders (by value, including VAT) during the period (including 23% under the Scellier and Duflot incentives), while block orders accounted for 20% of orders (by value, including VAT). First-time and second-time homebuyers together accounted for 46% of orders (by value, including VAT).

Buyers of primary residences The market for first-time buyers consists of individuals making their first property purchase. To finance the purchase of their home, first-time buyers may be eligible for the “Zero-Interest Plus Loan” or a 1% employer loan. The market for second-time buyers consists of individuals who already own a home, which they typically sell before acquiring a new one. In the financial year ended November 30, 2013, the sales price (including VAT) of apartments ranged from approximately €2,200 to €7,600 per sq.m in Île-de-France and from approximately €1,500 to €8,000 per sq.m in the Regions. In the financial year ended November 30, 2013, the average selling price (including VAT) of apartments (including parking) was approximately €3,900 per sq.m in Île-de-France and in the Regions. In the financial year ended November 30, 2013, the sales price (including VAT) of our single-family homes varied from €167,000 to €500,000. The average price was approximately €310,000 in Île-de-France, up from €252,491 in the 108

financial year ended November 30, 2012, and €268,000 in the Regions, down from €328,647 in the financial year ended November 30, 2012. Living space in these homes ranges from approximately 60 to 250 sq.m, depending on the program. The following tables show the change in the average price of apartments delivered by Kaufman & Broad and the changes in the average price (including VAT) and the average living space (excluding land) for single-family homes, over the past ten years. Average price of apartments delivered (EHUs) by Kaufman & Broad over the past ten years

(in euro, inc. VAT) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Île-de-France ...... 238,900 231,300 248,600 252,600 249,900 241,900 208,500 226,900 266,900 238,800 207,800 Regions ...... 148,000 144,500 152,600 171,600 185,900 188,000 197,300 197,100 201,420 212,000 198,500

Average price of single-family homes delivered (EHUs) by Kaufman & Broad in Île-de-France over the past ten years

(in euro, inc. VAT) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Île-de-France ...... 264,000 269,000 302,700 306,900 319,900 307,400 335,600 294,600 301,700 252,500 313,100 Average area (sq.m) ...... 128 122 113 111 107 110 113 96 100 80 90

Individual investors To attract individual investors, we design most of our programs so that they meet the criteria of tax incentive schemes in effect at the relevant time. Currently, this corresponds mainly to the Duflot incentive (see “Industry—Tax Incentives”). We also monitor compliance with social housing requirements. We estimate that individual investors buying through agents, specialized networks or our sale offices generated 38% of our orders by volume in the financial year ended November 30, 2013, compared to 36% in the financial year ended November 30, 2012.

Institutional investors and public housing operators Over the past several years, we have developed strong partnerships with leading French and foreign institutional investors, including insurance companies, pension funds, real estate trusts, and public housing operators. These institutional investors generally buy units in blocks, often at a discount. We believe we are highly regarded and well-known in this segment of the market. We estimate that in the financial year ended November 30, 2013, 26% of our orders (by volume) came from institutional investors, compared to 27% (by volume) in the financial year ended November 30, 2012.

Our Products Our products can be broadly divided into four groups: (i) apartments, (ii) single family homes in communities, (iii) commercial property and (iv) serviced accommodations. We have built our reputation largely on the quality of our products. Consequently, we closely monitor the work quality of the construction companies that we use to select the best subcontractors for future programs. Our technical services department evaluates the contractor companies involved, generally upon completion of each program. For our apartment programs, we favor architectural styles that blend into their urban surroundings and optimize available space for our customers. Similarly, we aim to design our single-family homes with an aesthetic appeal and functional interior spaces, including large reception rooms, clearly separated bedroom areas and living spaces, master bedroom suites and spaces that can be converted or expanded to suit evolving needs. We also pay close attention to the landscaping of the areas around our programs. We have previously hired and may continue to hire renowned architects in connection with certain programs.

Apartments We focus primarily on developing apartment units, because apartments have historically represented the largest and fastest growing segment of the French residential real estate market. When developing our apartment programs, we carefully select sites based on various criteria. In Île-de-France and in the Regions, we build our programs near public transportation links and other amenities. In Aix-en-Provence, Annecy, Annemasse, Antibes, Avignon Bayonne, Bordeaux, Grenoble, Lyon, 109

Marseille, Montpellier, Nantes, Nice, Nimes, Rennes, Rouen, Saint Raphaël, Saint-Tropez, Toulon, Toulouse and most recently in Lille, our sites are most often located in the outer suburbs, while we occasionally develop programs in the inner suburbs and the center of Paris. We pay close attention to the architecture of our buildings, the design of communal areas (entry hall, stair landings, yards and green spaces), interior fittings and space optimization. We also produce buildings that take into account state-of- the-art energy saving requirements, in accordance with applicable law effective as from January 1, 2013, such as the “BBC Effinergie” label. In Île-de-France, we market apartments intended primarily for: • first-time homebuyers or investors in the inner, middle and outer Paris suburbs, offering an average surface area of 40 to 60 sq.m at prices typically ranging from €3,300/sq.m to €5,300/sq.m (including VAT); or • second-time buyers in the inner and middle Paris suburbs, offering an average surface area of 65 to 80 sq.m at prices typically ranging from €4,500/sq.m to €7,500/sq.m (including VAT). In the Regions, we market our apartment programs under the Kaufman & Broad brand or, in Grenoble, under the Résidences Bernard Teillaud brand principally for: • first-time homebuyers or investors, with apartments offering an average surface area of 40 to 60 sq.m at prices typically ranging from €2,700/sq.m to €4,500/sq.m; or • second-time buyers, with apartments offering an average surface area of 60 to 80 sq.m at prices typically ranging from €4,000/sq.m to €6,000/sq.m. The expansion of our activities beyond Île-de-France and into the Regions means that we are able to market apartments intended for first- and second-time buyers and investors both in main regional cities and in secondary cities. Additionally, we are able to attract retiree customers by designing apartment programs on desirable sites on the Atlantic, Brittany and Mediterranean coasts.

Single-family homes in communities For over 40 years, Kaufman & Broad has developed and marketed the concept of single-family homes in communities in France, a business on which we have built our reputation. We have paid particular attention to the selection of the sites for our programs. Each community, depending on its size, showcases several different home models, with an average size of between 20 to 60 homes for each program. The hallmarks of our single-family home products include: • highly recognizable programs and houses; • high-quality landscaping involving large open spaces and careful upkeep of entrances into the communities and green spaces; and • attractive home design, including an emphasis on loft-style spaces with mezzanines, master bedrooms, kitchen- diners and additional rooms that can be converted to meet specific purposes such as home theaters. In all cases, we focus on the optimization of light and space. Furthermore, we deliver each of our single-family homes with a private yard that includes garden and lawn areas. Our single-family homes come in various architectural styles. In Île-de-France, our single-family homes in communities are generally (i) detached or semi-detached homes that range in size from 75 to 90 sq.m, designed primarily for first-time buyers or investors; or (ii) single-family homes in communities with living space generally ranging from 100 to 160 sq.m and designed primarily for second-time buyers. In the Regions, we market single-family homes in communities designed for both first- and second-time buyers at prices ranging from €200,000 to €700,000. In an effort to attract new customers, we regularly update our product range, offering new models with more contemporary architecture and keeping pace with today’s sustainable development and energy saving requirements.

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Commercial property For our Commercial property developments, we strive to meet the key requirements of: • users, including: • high-quality spaces that are pleasant to use and adapted to the needs of modern office environments; and • space- and environmentally efficient buildings, with high technical performance and optimized operating costs; and • investors, by enhancing their investment through high-quality designs (upscale buildings) and space flexibility and adaptability, which helps guarantee the longevity of their investments. In the past, we had a large Commercial property business, which contributed to our strong reputation in Île-de-France. Today, we operate this business either on behalf of third parties (project management and real estate development contracts), or under a strict policy of not purchasing land until the entire program has been presold. Since 2010, we have been involved in a partnership with Elithis, a French consultancy and engineering group. We and Elithis jointly established “Revivalis®,” which combines our expertise and provides building refurbishment services to property owners to bring buildings up to BBC-Effinergie Rénovation standards. Revivalis® targets property owners who want to avoid having to discount their real estate assets due to the age of such assets. We believe property owners benefit both from the refurbishment and renovation work that aims to bring their property in line with modern energy consumption standards and reductions in their property’s energy consumption.

Serviced accommodations We develop serviced accommodations across the country for tourists, students, businesses and independent seniors. In particular, we believe we offer meaningful solutions to France’s growing senior population. We market serviced accommodations programs by taking advantage of tax incentives, including tax incentives targeting non-professional lessors of furnished accommodation (“LMNP”) who are eligible for a VAT refund under the “Censi Bouvard” tax incentives and the Duflot incentive (see “Industry—Tax incentives”).

Seasonality and the Business Cycle Our industry is cyclical in nature and may be influenced by financial, macroeconomic, demographic, sociological and other factors (see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Seasonality”). We generally receive fewer orders at the beginning of the financial year and build fewer programs during the winter months. Orders for apartments are generally more evenly distributed over the second, third and fourth quarters of the financial year. Orders of single-family homes tend to reach their highest levels in the third quarter of the financial year.

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The following charts show the percentage of orders, by volume, that we have received on a quarterly basis over the last three financial years:

Orders by quarter

Marketing We have built our sales policies around a dynamic marketing strategy. To market our products, we sometimes use model units decorated by professional interior designers. We also use this approach in connection with the design of our sales offices.

Sales team We market our Housing units through in-house sales teams and specialized external sales networks. As of November 30, 2013, our sales teams consisted of 157 people, compared to 170 in the financial year ended November 30, 2012. The majority of our sales personnel earn a fixed salary plus a sales commission paid monthly. We believe that our sales team, made up of real estate professionals who are familiar with our products and code of conduct, produces highly effective results. This sales team also provides us with valuable information, including a database of existing and prospective customers. Dedicated teams market apartment units and single-family homes in our sales offices. For sales of apartments to institutional investors, we rely on our institutional sales department, our sales and marketing department and our regional divisions, which manage relationships with this customer base. In addition, we have dedicated sales managers in each Region who sell products eligible for tax incentives under the Duflot Law to individual investors. We also use specialized networks, such as banks, financial consultancies and other specialist companies, to sell some of our products, in particular programs that may be eligible for tax incentives. We enter into sales and marketing agreements with these specialized networks on a program-by-program basis, and we pay them a commission when a notarized deed of sale is signed. 112

Sales offices We focus on the design of our sales offices because we believe that potential customers often associate the quality of the Housing programs with the quality and appearance of our sales offices. In order to capitalize on our brand recognition and strong reputation, we design our sales offices for our various programs in exactly the same way. Our regional sales offices comply with a national corporate identity, which stipulates specific architectural and decor features. Most of our programs have their own sales office either on site or in the immediate area. In some cases, our marketing is performed by independent or multi-program sales teams without a sales office. Our policy is to open our sales offices five days a week for all developments with more than 100 homes. When the size of a program justifies it, we build decorated show homes or model apartments, with the same focus on presentation and design quality.

Showrooms As part of our strategy to offer customers a wide range of services and a personalized experience prior to home delivery, we opened Design Spaces or showrooms in Neuilly-sur-Seine, Lyon, Marseille, Nice and Toulouse. These showrooms offer our customers a broad range of options for carpeting, tiles, hardwood flooring, fireplaces, walk-in closets/storage options, bathrooms and kitchens, among other features, and are a highly effective means of combining the functions of our sales and technical departments.

Social media We market our programs through our website, iPhone application, iPad application and Facebook Fan Page, which include detailed descriptions of available housing, amenities and services, videos, location maps, interactive promotional material, 3D images where possible, availability, floor plans and sales prices. In the financial year ended November 30, 2013, we recorded more than 1.42 million visits to our website, compared to 1.17 million in the financial year ended November 30, 2012 and approximately 1,500 orders were initiated online. The site also provides financial information about us in French and English, and regulatory information in French.

KB Patrimoine In 2003, Kaufman & Broad set up a website, under the brand KB Patrimoine, for wealth management advisors and other agents, to provide these partners with permanent access to a “market place” detailing the Group’s Housing offerings. The website, which requires a login name and password, provides information on our investor offers and the possibility to download all contractual documents required to place an order. A provisional order system is in place so that interested parties can check the availability of a lot for customer viewings, while an alert and workflow system allows real-time follow- up of availability and updates of sales documentation. We currently have more than 2,000 wealth management advisors and agents who access the site on a regular basis. In the financial year ended November 30, 2013, KB Patrimoine recorded almost 80,000 visits to its website and approximately 11,200 provisional orders, which resulted in approximately 1,100 reservations.

Advertising In connection with the launch of our real estate programs (apartments or single-family homes in communities), we conduct local advertising campaigns (except for programs deemed exceptional due to their size or location, which may attract a customer base from outside of the region) involving distribution of prospectuses, advertising in free publications, trade publications and on web banners, and direct marketing (mailings and e-mailings). For national promotional campaigns, we take broader initiatives, such as poster campaigns, radio campaigns and website skins, all of which are always conducted in parallel with campaigns at the local level.

Sales To limit our financial exposure, we generally begin the sale process for our programs prior to purchasing the land on which we plan to build our program. When possible, the pre-sale process begins when the application for a building permit is filed. Once the cost of the program has been determined and the construction phases are set, we offer order contracts to customers. In accordance with French consumer protection legislation, which includes the “Neiertz Law,” and under the SRU Law, our sales administration department sends customers a copy of the order contract signed at the sales office by registered mail with return receipt requested or by any other means offering similar guarantees as to the determination of the date of receipt of such copy. Customers then have seven calendar days from the date of receipt of the order contract during which 113

they can reconsider and withdraw. If they do not withdraw their order, closing is subject only to customary conditions, including financing and insurance requirements. These provisions apply in connection with the acquisition of both new and existing property by non-professional buyers.

Customer assistance during the sales process Our sales teams can help customers obtain financing if they so desire, depending on the information the customers provide. This initial analysis gives us an approximate assessment of the financial capacity of each buyer and thereby limits the risks of triggering the cancellation clause in sale contracts when financing is not obtained. As part of our strategy to improve customer service, we generally refer our customers to financial institutions (typically first-tier banks) with which we have forged partnerships so that our customers may obtain loans at negotiated terms and rates. A financial advisor may also be present at the sales office when we launch a major program. Our sales and marketing department generally assists customers throughout the process until the signing of the final notarized deed of sale. The department usually helps customers prepare financial paperwork, particularly their loan and insurance applications. The department is also responsible for sending draft contracts to customers within the statutory time frame (at least one month prior to the scheduled signature date, as required under French law).

Form of sales and payment schedule Since September 1, 1999, Kaufman & Broad has marketed almost all of its programs under the system of VEFA contracts, like most of its competitors. Through the VEFA contract, lawmakers have given real estate developers the option to demand payments from customers in accordance with the percentage of completion of programs, based on a schedule set by law, while giving customers a performance bond, most often in the form of a guarantee provided by banks or insurance companies. Customers’ cumulative payments may not exceed 35% of the total purchase price as of completion of the foundations, 70% as of completion of the framing and roof and 95% prior to completion of the building. Title to the land transfers to the buyer upon execution of the VEFA contract. Title to the building transfers gradually, as the building is completed.

Under VEFA sales, payment in connection with most single-family home programs are called on the following schedule: customers make (i) a 5% deposit when the order contract is signed, which is paid into an escrow account if it is anticipated that the final notarized deed of sale will be signed within a year of the order, (ii) a further 30% payment upon completion of the foundations, (iii) a further 35% payment after completion of the framing and roof and (iv) a final 30% payment on delivery of the keys. Payments are called from customers based on the work certificates prepared by the architect. If the sales contract is signed after the completion of one of the events above, the portion of the price due on signing will be the price stipulated based on the percentage of completion method, as determined by the schedule set out above. We may modify this payment structure in favor of the customer under occasional promotions designed to increase the rate of sales of certain programs. For apartment programs, payment from customers are called in most cases according to the following schedule: customers make (i) a 5% deposit when the order contract is signed, which is paid into an escrow account if it is anticipated that the final notarized deed of sale will be signed within a year of the order, (ii) a further 25% payment at the start of construction work, (iii) a further 5% payment upon completion of foundation work, (iv) a further 20% payment upon completion of the ground-floor deck, (v) a further 10% payment upon completion of the second-floor deck, (vi) a further 5% payment on completion of the framing and roof, (vii) a further 10% payment upon completion of outside carpentry work, (viii) a further 10% payment on completion of interior partitions, (ix) a further 5% payment on completion of the work and (x) a final 5% payment on delivery. Payments are called from customers based on the work certificates prepared by the architect. If the sales contract is signed after the completion of one of the events above, the portion of the price due on signing will be the price stipulated based on the percentage of completion method, as determined by the schedule set out above. We may modify this payment structure in favor of the customer under occasional promotions designed to increase the rate of sales of certain programs. The 5% deposit provided at the time the order contract is signed is held in escrow until the execution of the final notarized deed of sale, at which time the funds are released to us. We may have to return the deposit to the customer if (i) the final notarized deed of sale is not signed within the time specified in the order, (ii) the customer is unable to obtain the loan or loans stipulated in the order contract, or the amount of the loans obtained is 10% less than projected amounts in the order contract, (iii) any of the fittings described in the order contract cannot be delivered, or (iv) the building (or the part of the

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building) covered by the order declines in value in terms of structure or quality of planned work, as determined by an expert, by more than 10%.

Customer service after delivery of the home We have a customer service department responsible for answering questions customers may have about the features of their home, moving into their home, defects that they may discover after moving in or any general inquiries. When a customer identifies a defect in a home, the customer service department contacts the construction company responsible and helps the customer obtain a prompt response. Similarly, if the one-year “performance warranty” (garantie de parfait achèvement), the two-year “correct operational warranty” (garantie biennale de bon fonctionnement) or the ten-year warranty (garantie décennale) are applicable, the customer service department helps customers contact the relevant construction or insurance companies. We also provide customers with satisfaction questionnaires upon delivery of their homes. We track customer feedback with respect to the general quality of our products, the services we offer and the performance of various teams within the Group, including our sales team, technical services, the showroom advisor, and customer service. This feedback also allows us to identify customer expectations and to better align our range of products and services to suit their interests.

Product Development Development process Apartments and single-family homes in communities The development of apartment and single-family homes in communities programs typically takes place in four stages: (i) securing of administrative permits, (ii) land purchase, (iii) sale of housing units and (iv) construction. If possible, the sales process begins as soon as the building permit application for the program is filed, even before we purchase the land on which we expect to build. The development of an apartment program generally takes an average of 18 months, excluding the time needed to organize project financing and advance promotion. The normal timeframe for completing a typical development of single-family homes, including completion of roads, infrastructure networks and construction, is approximately 12 months.

Commercial property We usually either develop Commercial property programs on behalf of third parties or we pre-sell the programs to a final user or a specific investor before construction. In the case of refurbishment or renovation work, we take on real estate development contracts (pursuant to which we design and build programs on behalf of owner-investors in return for a lump sum payment, including fees) or project management contracts (pursuant to which we pay nothing toward construction and receive only fees). In the case of sales before completion, we design real estate programs with the assistance of outside architects. Once we sign the land purchase option contract, we try to locate a tenant for the future premises, and we seek to identify an investor interested in acquiring the property. In general, we pre-sell 100% of our commercial properties before completing the land purchase and commencing construction.

Purchase of land Selection of land Our strategy is to buy only the land necessary for the development of our business and not to purchase land for speculative purposes. The land we have purchased over the last three financial years (including land purchased by the companies we have acquired, in their year of acquisition) represented a total investment of €164.8 million in the financial year ended November 30, 2013, €170.8 million in the financial year ended November 30, 2012 and €199.6 million in the financial year ended November 30, 2011. We have our own teams specializing in real estate research and the management of real estate programs. These teams research land parcels, review administrative, legal, marketing and technical aspects, and establish a business plan for the program. They look for land that meets our selection criteria, which include: • geographical location: the site must be in the center of or near an attractive metropolitan area;

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• environment: the site should be near dynamic job market areas, public transportation links and public facilities such as daycare centers, schools, stores and cinemas, green spaces and sports facilities (such as golf courses or swimming pools); • quality (soil and exposure): we review the quality of land parcels and we hire specialized firms to conduct a systematic soil survey of potential sites, which generally includes a study of pollution and previous land use; and • investment criteria: generally, the site should allow for the construction, in the case of single-family homes, of programs of 15 to 90 houses and, in the case of apartment buildings, of developments of 10 to 200 units, while offering in each case a minimum projected gross margin of 19.0% (after accounting for the application of IAS 23 relating to borrowing costs). See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies—IAS 23.” For each program of single-family homes, we generally conduct a survey of roads and other networks to determine the amount of improvements required and assess the total costs of land development. These surveys are done by our internal team specializing in roads and other networks, which prepares the overall site plan and monitors the development of the program.

Approval by the Land Committee Our Land Committee determines the strategic and financial relevance of programs under consideration and the estimated budget for preliminary expenses (up to the filing of an application for a building permit). It also authorizes unanimously, if necessary, the signing of a bilateral sales agreement and the payment of a reservation fee (particularly in the case of unilateral sales commitments).

The Land Committee members are the Chairman and Chief Executive Officer, the Chief Finance Officer, the Senior Vice President of the relevant region and the Local Branch Director. The file presented by the Regional Director to the members of the Committee generally includes the following information: • a presentation of the land and its immediate environment (location within the community, distance to stores, public networks and services); • the nature of the legal commitments under consideration (type of purchase option or planned company acquisition, form and amount of the reservation fee); • a survey that analyzes the local market, surrounding infrastructure, the price of new and existing housing in the area and the number of programs in progress and under development in the area, in order to recommend an average sales price for the Housing units in the planned program; • a technical and architectural feasibility study; • a provisional marketing plan by distribution channel; • a projected construction schedule; • a balance sheet and cash flow projection based on the tentative sale prices as a result of the market survey; and • the projected amount of expenses prior to obtaining building permits.

Project management and development costs If our Land Committee approves a proposed program, we may sign a purchase option, which is generally unilateral, subject to our obtaining final building permits and to other customary conditions (including conditions relating to the vacating of premises, the nature of the soil, the presence of pollution or classified installations as defined by the French Environmental Code, or the absence of archaeological remains or specifications). This land purchase option specifies the following: • the sale price for the land;

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• the conditions necessary to the success of the program, including notably the need to obtain the permits required in order to build a minimum number of square meters or, for single-family homes, a minimum number of homes; • the deadline for exercising the purchase option, which must be compatible with the time limits necessary to obtain the required administrative permits free of objections from third parties or to allow for a potential administrative withdrawal; and • in general, a clause specifying the minimum pre-sale rate we must achieve before we purchase the land. In certain cases, we sign undertakings to purchase shares in companies which own land parcels. In addition to the conditions precedent described above, this type of agreement includes conditions relating to the completion of accounting, financial and legal audits.

Authorization by the Commitment Committee Prior to the filing of a building permit application (and after the sale option has been signed, if this type of commitment is necessary) and before we start our sales and marketing process, the members of our Land Committee meet as a Commitment Committee to approve the program’s strategy, particularly its commercial and technical aspects; confirm the program’s updated budget, approve the program’s type and structure; authorize the filing of the building permit application; and authorize the launch of the request for tenders (“RFT”) and the marketing and sales tools. These decisions are made unanimously and constitute an authorization granted to the relevant local branch director to continue the analysis of the real estate development program.

Prior to making a decision, the Commitment Committee is provided with an update of the file initially submitted to the Land Committee. We then file a building permit application with the mayor’s office in the town in which the work will be performed. Our teams monitor the processing of the permit applications with the engineering services departments of the towns concerned or the relevant Departmental Office of Infrastructure (“DDE”). The normal timeframe for reviewing a building permit application is generally three to five months. In addition, we must take into consideration the time allotted for objections from third parties, which runs for two months from the posting of the building permit at the construction site. In some cases, we must also account for a three-month period during which the mayor’s office can withdraw a building permit after issuance. Third parties, such as associations and local residents, may challenge building and demolition permits on the grounds that they do not comply with local urban planning regulations, such as zoning plans and development plans for ZACs, or with the French Urban Planning Code. If a complaint is filed, we have three options: • abandon the project and invoke the non-achievement of the condition precedent to obtain a clear building permit as stipulated in the option to purchase the land; • defend the project before the competent administrative court (we rarely choose this option because of the long delays related to the court’s workload); or • attempt an amicable settlement with the plaintiff, pursuant to which the plaintiff agrees to withdraw all complaints.

Final decision to purchase land Our Land Committee makes the final decision to purchase land. We generally do not acquire land unless (i) we have obtained the necessary administrative approvals to develop the program as planned, free of any third-party objections, and (ii) we have verified the program’s profitability as set forth in our projected budgets. In most cases, the operational managers generally present their land purchase request when they have attained a pre-sale rate of around 50%. In certain exceptional cases, the members of the Land Committee may authorize an acquisition when not all the conditions listed above have been met, for example, before we have reached the target pre-sale rate or before we have obtained all administrative authorizations and cleared all objections. If the projected financial budgets on which the Commitment Committee has based its decision cannot be met, the definitive acquisition of the property in question is again submitted to the members of the Land Committee for approval.

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Any real estate purchase request made by a regional division comes in the form of a file, which includes the following information: • a memorandum on the administrative status of the land and on marketing; • an updated budget; • a provisional cash flow plan; • the percentage of completion of the file; • updated statements of orders by distribution channel with a comparison to the targets of the Commitment Committee; • a comment from the local branch Manager on the order rate, if it is below 50%; • an official draft of the legal documentation; and • a progress report on the RFT documents.

Land development and monitoring of the construction process Single-family homes in communities The majority of the land we purchase for our single-family homes programs is not yet developed. Prior to the final acquisition of land, our team of road and other infrastructure specialists, in consultation with an outside firm, conducts a study of improvements to the site. In most cases, construction work does not begin until we have achieved a pre-sale rate of approximately 50% of the value of the phase of homes to be built. The technical department of our single-family homes division, composed of engineers and specialized technicians, acts as general contractor for single-family home programs and monitors construction and each phase of the program. It monitors adherence to the terms of the contracts we have signed and to the steps of the construction schedule we have set. To do this, group foremen regularly perform onsite inspections of the work, with each foreman typically monitoring two or three programs. We also hire outside inspectors to verify construction quality. Our system of producing groups of single-family homes in phases allows us to begin construction on each phase in accordance with the pace of sales. Delivery of homes in phases also provides greater flexibility because it allows us to vary the types of homes by category of design in accordance with customer preferences. If we decide to make a change, we file an application for the corresponding amended building permit.

Apartments and Commercial property In most cases, construction of apartments does not begin until we reach a pre-sale rate of approximately 50% of the total development program value. On the other hand, we generally purchase land and begin construction work on Commercial property programs only once the entire development has been pre-sold. For our apartments and Commercial property programs, we generally do not act as project manager (except on a regional basis), but instead use outside architects and/or project managers who work with us to prepare the architectural plans and timetable for the program and monitor the quality and execution of the work.

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The following diagram summarizes our business model, as described above:

Monitoring budgets Every quarter, the relevant operational persons (real estate, technical and salespeople), under the supervision of the relevant regional management controller, review and update the budgets for all of our property programs. The local branch director then validates the budgets. Each regional director presents financial balance sheets to the chief executive officer, the finance department and to the regional director at quarterly committee meetings, during which the balance sheets are jointly approved.

Program Financing The main financial institutions through which we obtain our VEFA guarantees include Crédit Mutuel ARKÉA, Crédit Mutuel CIC, the Banque Populaire et Caisse d’Épargne group (Palatine, Crédit Foncier, SOCFIM, Natixis, and so on), CA- CIB, and Société Générale, as well as institutions specializing in surety services and insurance brokerage, such as Atradius and MB Cautions. In a VEFA contract, Article L.261-11 of the French Construction and Housing Code provides that customers must receive a performance bond at the signing of the order contract, which guarantees that construction of the property will be completed or that the payments made by the buyer will be reimbursed in case of failure to complete such construction. This bond can either be issued by the entity developing the program itself (intrinsic guarantee) or take the form of a bank guarantee (extrinsic guarantee). For our programs, we generally use the extrinsic guarantee system by obtaining a bank bond on a transaction-by-transaction basis from the financial institutions mentioned above and from certain insurance companies. This method accelerates the signing of sales contracts and facilitates the calls for funds. In the past, we have occasionally used intrinsic guarantees for our single-family home programs. With an intrinsic guarantee, no performance bond is required and the pace of calls of funds from customers is slightly different from the pace applicable to apartment programs for which an extrinsic guarantee is provided. Notably, we are permitted to receive up to 35% of the total purchase price at the time the notarized deed of sale is executed, no matter what stage of construction has been reached.

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Our Builders and Suppliers Our policy is generally to choose all of our contractors and suppliers through a bid process on a program-by-program basis. This applies to general contractors in charge of all the work on a program as well as to individual trade contractor companies bidding for separate portions of the program. We check, against available information, the financial situation of our contractors and their financial capacity to perform their obligations, which is based on the contractors’ size and the size of the program; we obtain this information in certain circumstances by using business information providers. We also verify that such contractors are covered by appropriate insurance. Finally, we check the quality of their past work and their ability to respect schedules. In 2008, we implemented a national purchasing policy for fixtures and materials used in interior decoration in order to streamline the services delivered to customers and optimize related costs. For our single-family home programs, we primarily use individual trade contractors. Most general contractors either do not build single-family homes or do so at prices higher than those of individual trade contractors. The majority of our apartment and Commercial property programs are also carried out by individual trade contractor companies. We assign a smaller proportion to general contractors. We select architects, design firms and land surveyors through bidding procedures or private agreements. We choose these parties on the basis of their technical skills, financial bid, organization and the quality of their prior work.

Intellectual Property The Kaufman & Broad brand We market our apartments and single-family homes under the “Kaufman & Broad” brand through in-house sales agents and third-party specialized networks. In Grenoble, we also market programs under the “Résidences Bernard Teillaud” brand. After the Issuer acquired a majority interest in the Company from KB Home on July 10, 2007, we became the owner of the Kaufman & Broad brands and logos for the European Economic Area and Switzerland. To this end, Kaufman & Broad S.A. acquired stock in Kaufman & Broad Europe Sprl (a Belgian company to which KB Home had previously contributed the brands and logos, which has since become Kaufman & Broad Europe S.A.). Licensing agreements were signed between Kaufman & Broad Europe S.A. and Kaufman & Broad S.A., and between Kaufman & Broad Europe S.A. and the main operational subsidiaries of Kaufman & Broad S.A. Under those agreements, Kaufman & Broad Europe S.A. granted to Kaufman & Broad S.A. and its subsidiaries an operating license for its Kaufman & Broad brands, logos and domain names in France for three years, renewable by tacit agreement for successive periods of one year in the absence of notice of its termination by either party six (6) months before the initial term, or six (6) months before the expiration of each successive one (1)-year period. The license is granted free of charge to Kaufman & Broad S.A. by Kaufman & Broad Europe S.A. in return for a 0.7% royalty (excluding VAT) on the annual amount excluding tax of notarized sales made by Kaufman & Broad S.A. subsidiaries, payable quarterly.

Other brands We own the other brands, including Bréguet, SMCI, Park, Frank Arthur, Sefima, First, Sopra, Avantis, Malardeau, and SM2I.

Main Offices We rent business offices in Annecy, Bayonne, Bordeaux, Lyon, Marseille, Montpellier, Nantes, Neuilly-sur-Seine, Nice, Rennes, Rouen, Toulon and Toulouse from third-party lessors. These offices are typically occupied under nine-year commercial leases. Rental expenses totaled €5.4 million (excluding VAT) in the financial year ended November 30, 2013, compared to €6.0 million (excluding VAT) in the financial year ended November 30, 2012 and €5.7 million (excluding VAT) in the financial year ended November 30, 2011.

Investment Policy Research and Development Our development expenses relate mainly to programs for which we have executed a conditional purchase agreement. We treat these expenses as inventory (as an element of the land acquisition price) when we consider it probable that we will develop the relevant programs.

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We have an in-house design team, led by an architect, which tracks new products suitable for development, particularly single-family homes, eco-designed buildings, and new ranges of more affordable homes. We also have a team of engineers dedicated to improving the quality of construction of our buildings, including through soundproofing and insulation. We periodically conduct customer surveys to assess our customers’ preferences. We also assess their views on products offered by competitors in order to adapt our own product offerings. No material research and development costs are pending at this time.

Principal investments In the course of our activities, we make many purchases to build up our inventories and meet the requirements of programs that are underway. Inventories of programs under development are valued at cost. These costs include the land acquisition price, related fees and taxes, the cost of roads and equipment, the cost of construction and development of model houses and showrooms and fees and commissions earned by sales agents. We use VEFA contracts for almost all of our programs, pursuant to which title to the land transfers to the purchaser immediately upon execution of the sales contract. Title to the building under construction transfers to the purchaser gradually, as the building is completed. In addition, we recognize revenues in accordance with, inter alia, the terms of IAS 11 “Construction Contracts” on the basis of the percentage-of- completion method, i.e., based on technical completion, the starting point of which is the acquisition of the land, and commercial completion (execution of the deeds of sale) of each program. As a result, we reduce our program inventories as construction is completed, on the basis of estimates made on a program-by-program basis. Apart from these investments relating to our operating cycle, investments can be divided into three categories: • investments required for our ongoing operations: IT investments (software and hardware, fixtures of our administrative buildings, furniture and office equipment purchases, etc.), fixtures of our administrative buildings, furniture and office equipment purchases; these investment flows amounted to €3.1 million in the financial year ended November 30, 2013 (or €1.9 million, net of the sale of our sales office in Grenoble for €1.3 million), compared to €4.0 million in the financial year ended November 30, 2012 and €2.9 million in the financial year ended November 30, 2011; • investments made in acquisition transactions to expand our business activity: we make these investments in the context of the acquisition of companies or real estate programs, or through equity investments; and

• financial-type investments made through the acquisition of minority holdings (investments in programs developed jointly): we treat these transactions as financial assets and include them in “Investments in affiliates and joint ventures” in our balance sheet. The carrying amount of equity affiliates and joint ventures corresponds to the share of equity that we hold. This item includes, for development operations, capital and similar investments, i.e., any current account advances that we make in order to finance programs. We regularly purchase stakes in programs developed jointly, when the opportunity arises and if the program is of financial interest to us. We made no major investment during the financial year ended November 30, 2013.

Employees As of December 31, 2013, we employed 735 people compared to 721 as of December 31, 2012, through an economic interest grouping (GIE) that includes all Group entities located in France. We assign employees to Group companies in accordance with staffing requirements. We divide employees into several teams responsible for land purchases, program design, bid tenders, engineering, administration and supervision of construction, marketing, sales, customer service, financing and management of the Group. We distribute the costs of employee assignments based on the volume of business generated by each legal entity.

Workforce and new hires We hired a total of 107 people in the financial year ended November 30, 2013 (76 in 2012), of which 60 were managers (37 in 2012), 33 were employees (20 in 2012) and 14 were commercial representatives (19 in 2012). Of these, we hired 69 people under permanent contracts (58 in 2012) and 38 under a fixed-term contract (18 in 2012). We encountered some difficulties in achieving our hiring targets for real estate research and development positions as these positions require skills specific to our industry. 121

Terminations In the financial year ended November 30, 2013, employee-related terminations affected 13 people (four in 2012) out of an average workforce in the calendar year of 728 people (733 in 2012).

Amicable terminations In the financial year ended November 30, 2013, 23 people left the company by mutual consent (27 in 2012), in accordance with statutory provisions in place since July 2008.

Turnover rate In the financial year ended November 30, 2013, the turnover rate within our workforce was 12.8%.

Temporary workers In the financial year ended November 30, 2013, the number of temporary workers used by the Group accounted for 4.1% of the workforce (3.8% in 2012), representing the equivalent of 29.7 full-time employees (28 in 2012). Temporary staff worked an average of 16.1 days per assignment (13.8 in 2012).

Industrial relations Employees elect 16 members of representative organizations (seven managers and nine non-managers).

Employee representatives and trade unions The union organizations are represented in GIE Kaufman & Broad by three union delegates: the first from the Force Ouvrière union of the various welfare agencies in the Paris region, the second from the national union for urban planning and housing and property managers, which is part of the French management confederation (“CGC”) and the third from the BTP workers’ union.

Collective bargaining agreements We apply the national developers’ collective bargaining agreement.

Health and safety conditions In the financial year ended November 30, 2013, there were a total of seven workplace and commuting accidents (six in 2012), resulting in 34 cumulative calendar lost days (385 in 2012). We are part of an initiative led by the FPI pursuant to which we and other French real estate developers aim to draft a collective agreement that will define health and safety standards for our industry. At the moment, the heads of our local branches delegate health and safety supervisory responsibilities to their technical, program and commercial directors. Technical directors in turn sub-delegate these responsibilities to the foremen or lead project managers on construction sites. We offer safety training to technical directors every year so that they maintain their expertise in the field. We also have a Health and Safety Committee that meets quarterly or at the request of management or staff representatives.

Environmental and Other Regulation We are subject to a variety of laws and regulations relating to land use, the protection of the environment and health and safety matters, including those described below. We incur and will continue to incur costs and obligations to comply with such requirements. We also could incur significant additional costs, including fines, penalties and other sanctions, cleanup costs and third-party claims, as a result of violations of or liabilities under such laws and regulations.

Urban planning regulations and land use for real estate developers Urban planning regulations govern our real estate development activities. These regulations aim, among other things, to reconcile the need to maintain high-quality construction standards, protect our natural and cultural heritage and promote our economic and demographic development. In the 1970s, policymakers generally took the view that urban sprawl was preferable to densification. They enacted regulations that limited the height of buildings and reduced land occupation 122

coefficients. We believe that French policymakers have now reversed this trend to encourage the re-densification of urban areas. As a result, urban growth has taken on positive connotations, including relating to heightened economic activity. However, the expansion of urban areas also raises potential environmental considerations, such as increased surface runoff and loss of topsoil and of dedicated agricultural space. In France, urban planning matters are primarily regulated at the municipal level. For example, municipalities develop urban plans and issue building permits. Since the enactment of the SRU Law in 2000, municipalities have had the authority to define Local Urbanism Plans (“PLU”s) (provided such authority has not been given to public establishments for inter- municipal cooperation). When public establishments for inter-municipal cooperation are in control of urban planning, they define the PLUs in cooperation with the relevant municipalities. Additionally, public establishments for inter-municipal cooperation develop Territorial Coherence Schemes (“SCOT”s) in effect in several municipalities. The PLUs and the SCOTs define areas that are and may be urbanized and, as a result, they are strategically important to real estate developers. At the level of the municipality, soil usage in particular is regulated by applicable laws relating to natural and climate risks. We are subject to these and various additional laws when we design and launch a new program. These include seismic regulations enacted on May 1, 2011, flood risk prevention plans and general risk prevention plans (“RPP”s). An RPP is annexed to the PLU and defines the land on which construction may be undertaken in light of natural risks such as flooding, avalanches, landslides and forest fires. The RPP scope can involve several municipalities or parts of municipalities. It can also include several departments. However, depending on the resources available to municipalities and their urban planning departments, PLUs and SCOTs may not fully clarify the environmental characteristics or risks specific to a parcel of land.

Environmental matters during the land acquisition process As described below, we conduct various preliminary studies on the land parcels that we acquire. These studies are prescribed by and conducted in accordance with numerous regulations.

History of the land: soil and subsoil quality and pollution Before acquiring a parcel of land, we commission a study of the parcel’s history, of its soil and subsoil quality, and of potential historical contamination of the site. We hire specialized firms to conduct these studies. We also appoint a consulting firm to perform additional tests relating to pollution, to identify and characterize site contamination and, as appropriate, to recommend any responsive action. If the pollution assessment reveals any issues, we appoint a contractor to clean up the site. Such environmental analyses or remedial steps may be a particular focus for our programs located in a brownfield area or that involve soils that may raise potential construction risks, such as clay.

The discovery of archaeological remains As a preventive measure before we sign a land purchase agreement, either we or our collaborators typically ask the Regional Directorate of Cultural Affairs (the “DRAC”) to guarantee that there are no archaeological plans for a given land parcel. If the DRAC believes that a preventive evaluation of the parcel is necessary because it may contain archaeological remains, we make arrangements to have the evaluation performed by departmental services such as the National Institute for Preventive Archaeological Research and the General Council before we acquire the land.

The specific case of demolitions Where we plan to demolish, renovate or rebuild existing structures on a land parcel, we use a specialized firm to conduct asbestos and lead searches prior to undertaking such activities. Our purchasing department then chooses a demolition company which hires subcontractors specializing in asbestos or lead removal. The subcontractors must submit their asbestos and lead removal plan to the Labor Inspectorate and the Regional Health Insurer for approval.

Taking into account environmental and biodiversity considerations Prior to receiving regulatory approval for a development, we may need to conduct environmental impact studies for our programs pursuant to Article R122-2 of the French Environmental Code. Depending on the results of a particular study, we may need to specify what corrective or compensatory measures we plan to implement to minimize the impact of our operations on the environment. We may also need to indicate how we plan on tracking the effectiveness of these measures.

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For example, we may be required to conduct an environmental impact study in connection with the execution of works that may affect water and aquatic environments pursuant to the Water Law of 2006 (Law number 2006-1772 dated December 30, 2006, Loi sur l’eau et les milieux aquatiques). In that case, we may need to take corrective measures to prevent or mitigate soil sealing, which inhibits the normal infiltration of rainwater into the ground, or to prevent increased risks of flooding, for instance by creating retention basins.

Provisions and guarantees for environmental risks Our land purchase agreements are generally conditioned on our having identified no material environmental problems during our preliminary studies relating to a land parcel. These agreements also typically include remedies whereby we can be compensated by the seller if certain environmental concerns materialize after we have completed our preliminary studies. We are not aware of any environmental liabilities or risks associated with our past land acquisitions as to which we expect to incur material costs or obligations. As of November 30, 2013, we had made no provisions related to such risks.

Environmental criteria for housing designs The French home construction industry is highly regulated, including with respect to environmental matters. We aim to design programs that meet very high environmental standards so that our products constitute solid long-term investments for our customers. The energy efficiency of our buildings is governed by standardized norms and by labels and certifications. The French government strengthens its thermal regulations on average every five years to meet national greenhouse gas reduction targets. We implemented the 2012 thermal regulations on all of our Commercial properties from October 2011, although they became mandatory only as of January 1, 2012. For the construction of new housing, the application of RT 2012 has been mandatory since January 1, 2013. Of the Housing programs started in the financial year ended November 30, 2013, 25% conformed to thermal regulations (19% conformed to RT 2005 and 6% conformed to RT 2012), 66% earned the BBC label and 4% bore a very high energy performance label. Additionally, 20% of new Housing programs started in the financial year ended November 30, 2013 were awarded environmental certification under the Habitat & Environnement scheme.

Limiting the impact of construction work on the environment Potential nuisances created by work sites, which might have an impact on neighboring residents and employees working on the construction of our units, can take various forms: demolition and construction waste (such as residual cement, plaster, concrete, packaging and other waste materials), sewage, traffic, noise, dust and sludge, the visual appearance of the site, health risks and worker hardship, etc. We seek to avoid or reduce the impact of these nuisances by ensuring that our counterparties contractually agree to undertake mitigation measures and by taking other proactive measures ourselves. We consider environmental performance when we select our partners and specify environmental compliance criteria in awarding works contracts. The requirement to comply with all applicable environmental regulations is provided for in contractual clauses or in the fee schedules that we sign with third party service providers. We also generally require various stakeholders to formalize their commitment by signing “Clean Site” charters. These documents contain undertakings to reduce disturbances and pollution generated by work conducted on our programs. Our assistant project managers monitor compliance with environmental regulations on the work sites. When we work on a program whose environmental parameters have been approved, we generally: • endeavor to limit local soil and water pollution by collecting and storing waste (such as formwork oils and wash water) for subsequent removal; • aim to comply with applicable noise-reduction regulations and adapt to the specific demands of municipalities when they want particular schedules that may be demanded by relevant municipalities for construction programs. For example, we have in the past organized our construction schedules so as to avoid conducting particularly noisy activities during periods of the day when school children were likely to walk past our construction site; • encourage contractors to use quieter engines, such as ones with electric motors, and ask that generators be sound- proofed; • provide various truck wheel cleaning systems at exits of our sites, such as washing areas with streams or scrubbers so as not to track dirt onto the surrounding roads; 124

• stipulate that no burning of materials can be conducted onsite; • encourage the storage and re-use of the topsoil found onsite in the creation of green spaces, so as to minimize truck rotations; • monitor adherence to regulations relating to work site waste. For example, contractors are required to use specific containers and to dispose of their waste at the appropriate treatment centers. On certified sites, the assistant project manager must conduct sorting assessments. For demolitions, sorting of waste is the responsibility of the demolition company, which must provide evidence that the waste was sorted and be able to demonstrate, by producing the relevant certification, that the waste was sent to the appropriate waste reception centers; and • take extra precautionary measures to achieve proper insulation, with fences and siding, of sites located in sensitive areas, such as within close proximity of a school. For each of our programs, we include environmental requirements in our contract file and we rely on our technical or construction director to monitor compliance with environmental objectives. In addition, we also benefit from a “backcharge” procedure that, under certain circumstances, allows us to require third parties involved with the program to pay to repair any damage they may have caused, including environmental damage.

Tax incentives For information about the tax incentives that affect the French real estate development market, see “Industry—Tax incentives.”

Insurance Mandatory insurance Pursuant to the regulations governing their business as builder-developers, our subsidiaries take out the mandatory insurance required by Law 78-12 of January 4, 1978 (Loi relative à la responsabilité et à l’assurance dans le domaine de la construction), obligating all parties involved in the construction of a building to subscribe to so-called “Structural Damage Insurance” (assurance dommages ouvrages) covering structural defects pursuant to article L.242-1 of the French Insurance Code, as well as to so-called “Non-Builder Developer Insurance” covering liability as project owner (assurance constructeur non réalisateur) and project manager liability when this role is assumed by Group companies.

Structural defects insurance We subscribe for Structural Damage Insurance coverage before construction begins. This insurance is intended to pre- finance the cost of repairing defects that appear after the delivery of units to our customers and that are covered by our customers’ ten-year warranty. Coverage is transferred to the customers when the home is delivered and to their successors if the home is sold. This insurance applies to damages, including damages resulting from soil defects, that (i) compromise the structural soundness of the building structures or (ii) affect a basic element or item of equipment, making the building unfit for its intended use or affecting crucial integrated equipment that cannot be removed from the foundation, framing, walls or roof, as defined by Article 1792-2 of the French Civil Code. The insurance covers the costs of repairs, including demolition work, excavation, and any necessary installation or removal activities, once an expert has inspected the site and within certain predefined time limits. After making payments under these policies, insurance companies generally turn to the builders responsible for the defect and their insurers in order to obtain reimbursement of disbursed amounts. Structural defects insurance coverage is limited to the total construction cost, including fees, for non-housing structures, and the repair costs for housing structures.

Non-builder developer insurance We have also obtained coverage pursuant to a ten-year Non-Builder Developer Insurance policy. This policy provides coverage for costs up to the limit set forth in Articles 1792 et seq. of the French Civil Code, which relate to the repair of buildings to which we have contributed in our capacity as builder. The ceiling for the cover is total construction cost including fees for non-housing structures, and the repair cost for housing structures. 125

Since January 1, 2010, we have held our Structural Damage Insurance and Non-Builder Developer Insurance contracts through AXA France IARD. Premiums amounted to €8.69 million in the financial year ended November 30, 2013, representing 0.85% of our consolidated revenue for the financial year, compared to €7.91 million in the financial year ended November 30, 2012, representing 0.77% of our consolidated revenue for the financial year.

Public works engineering insurance Since January 1, 2010, those of our subsidiaries that are engaged in the project management business are covered by a specific Public Works Engineering policy covering project manager professional liability for ten years, which is underwritten by AXA ASSURANCES IARD pursuant to the terms of an insurance contract. The premiums paid under that contract in the financial year ended November 30, 2013 totaled €0.33 million, representing 0.03% of our consolidated revenue for the financial year, compared to €0.42 million in the financial year ended November 30, 2012, representing 0.04% of our consolidated revenue for the financial year.

Other insurance related to group activities We also have optional “Developer’s Liability,” “Comprehensive Construction” and “Real Estate Agents Liability” insurance.

Developer’s liability insurance Our Developer’s Liability insurance policies are intended to provide coverage for costs and charges in connection with liability claims for injuries, property and/or consequential losses caused to third parties by our business activities and related services, as well as by people, equipment, real estate and animals used in the conduct of our business for which we are responsible. In the financial year ended November 30, 2013 the cost of this insurance coverage amounted to €0.96 million, representing 0.09% of our consolidated revenue for the financial year, compared to €0.92 million in the financial year ended November 30, 2012, representing 0.09% of our consolidated revenue for the financial year.

Comprehensive construction insurance and real estate agent liability insurance We hold optional Comprehensive Construction insurance and Real Estate Agent Liability coverage. We take out Comprehensive Construction insurance for each program. Comprehensive Construction insurance covers the project owner and all program participants against losses or accidental damage to the structures during the construction period. Coverage is equivalent to the total cost of the work performed at the site, including fees for the general contractor and technical inspection. We take out Real Estate Agents Liability policies for those of our subsidiaries that act as real estate agents, with coverage in compliance with the Hoguet Law (Law of July 2, 1970). Bodily injuries are covered up to €4,573,470, or 0.45% of our consolidated revenues for the financial year ended November 30, 2013, and property damage and consequential losses up to €152,449, or 0.01% of our consolidated revenues for the financial year ended November 30, 2013.

Officers’ liability insurance We have also taken out an Officers’ Liability insurance policy to cover, subject to certain conditions, third-party liability claims against our corporate officers in the event of any professional negligence committed while performing their duties. It also covers defense costs incurred by the insured for civil or criminal liability in the performance of their duties.

Litigation and Other Proceedings Due to the nature of our business, we are exposed to civil and governmental legal action resulting primarily from structural and other defects in our programs, the failure to comply with certain legal or regulatory requirements, claims against building permits obtained, or any other type of claim, including challenges to or failure to obtain requisite local authority approvals. Disputes are provisioned on the basis of an assessment of the risk carried out by our Legal Department and Senior Management in collaboration with the specialized attorneys responsible for the cases in question. We believe that the provisions funded represent reasonable coverage in view of the degree of probability that the related risks will materialize.

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Other than as disclosed herein, there is no information on any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Issuer is aware), from the previous 12 months, which may have, or has had in the recent past, significant effects on the Issuer’s or the Group’s financial position or profitability.

Civil matters In January 2013, one of our Group subsidiaries was ordered to pay €6.6 million plus various discounts or interest in connection with a dispute over faulty workmanship and miscellaneous defects that originated in 1996 at our Roissy Park development outside of Paris. After accounting for builders’ and insurers’ guarantees, our Group subsidiaries are financially liable for €0.945 million, for which a provision of €0.257 million was recorded as of November 30, 2013. We have appealed the ruling. We consider the risk of a final adverse finding to be low.

A concession agreement granted to us on a program that we launched in 2012 has been challenged. Our gross margin on sales for this program amounted to €3.7 million as of November 30, 2013. Since we deem the cancellation risk for the concession agreement to be low, we have not recorded a provision in our financial statements. However, on November 30, 2013, we placed in escrow, in the form of pledged mutual funds (sociétés d’investissement à capital variable, or SICAVs), amounts totaling €18.4 million corresponding, among other things, to funds received from purchasers for unit sales that could be annulled and potential fees that we could incur in connection with such cancellations.

Tax matters We have recorded a €12.9 million provision following audits of Kaufman & Broad covering financial years 2005 through 2012. This amount constitutes a reasonable estimate of the final cost of various corrections (totaling €25.9 million, as proposed by the French National and International Tax Audit Directorate (DVNI), corresponding to the sum of €11.2 million in taxes and penalties and €14.7 million in tax credit cancellations) pursuant to Article 209B of the Code général des impôts, in connection with our Belgian operations, that we deem to be “at risk.” We have challenged all proposed corrections. In particular, we have submitted a claim for the 2008 correction proposal and have discharged the €5.2 million in principal amount claimed against us in connection therewith. For more information, see Note 22.4 to the English translation of our audited consolidated financial statements, included elsewhere in these Listing Particulars.

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MANAGEMENT Officers of the Issuer The Issuer is organized and established as a société anonyme under the laws of France. In accordance with French corporate law and its by-laws (statuts), the Issuer is managed by a Chief Executive Officer (Président) and by two Executive Vice Presidents (Directeurs Généraux Délégués). The Chief Executive Officer and the Executive Vice Presidents have full authority to manage the Issuer’s affairs and have broad powers to act on its behalf within the corporate purpose and to represent the Issuer in dealings with third parties. The following table sets forth certain information concerning the current principal officers of the Issuer.

Name Age Position

Frédéric Stévenin ...... 47 Chairman and Chief Executive Officer Sophie Lombard...... 44 Executive Vice President and Director Patrick Mouterde ...... 46 Executive Vice President and Director Set forth below are brief biographical descriptions of the Issuer’s principal officers. Frédéric Stévenin has served as the Issuer’s Chairman and Chief Executive Officer since 2007. He has also been a director of the Company since 2007. Frédéric Stévenin is a partner at PAI Partners, where he is the head of the consumer goods team, a member of the Executive Committee and a member of the Investment Committee. After spending four years in the Private Banking division of Paribas, Frédéric Stévenin joined PAI Partners for the first time in 1993 and worked five years in the food and beverage division. In 1998, he joined the European Acquisition Finance Group department of Deutsche Bank as a director and subsequently acted as managing director. Frédéric Stévenin returned to PAI Partners in June 2001. He was director of Provimi S.A. from 2004 to 2007, the Panzani Group from 2002 to 2007, the Coin Group between 2002 and 2009, the Stoeffler Group between 2003 and February 2008, the Saeco Group between 2004 and 2009 and the Yoplait Group from 2002 to 2011. Frédéric Stévenin is a director of PAI Partners UK, United Biscuits Topco Ltd, Cerberus Nightingale 2, Cristallo SpA, Marcolin SpA, Marmolada SpA, 3 CIME SpA, Riviera Topco Ltd, Riviera Midco S.A. and Saint-Pey Holding, manager of Cerberus Nightingale 1, Financière Daunou 8, Alta Rocca Investments SCI and G.A.V.U. Gestion Sprl, vice chairman of the board of directors of Chr. Hansen Holding and chairman of the supervisory board of Cerba European Lab. Sophie Lombard has served as the Issuer’s Executive Vice President since its incorporation in 2007 and as a director since 2007. She has also been a director of the Company from July 2007 to January 2010 and from September 2010 to the present day. Sophie Lombard is a member of the Company’s Audit Committee and Compensation and Nominating Committee. Sophie Lombard is an advisor to PAI Partners in the food and consumer goods sector. She joined PAI Partners in 2001 and was a partner from 2011 to 2012. Prior to that, she spent three years with Société Générale in the capital markets department for derivative products and four years with Deutsche Bank in the Acquisition Finance Group in London and Paris. Sophie Lombard was a director of the Stoeffler Group between 2003 and 2008, the Chr. Hansen Group between 2005 and 2010, the Yoplait Group between 2010 and 2011, and the Marcolin Group in 2012. She is also the president and sole shareholder of EloA Conseil, which she founded in 2013. Sophie Lombard holds an MBA degree from Columbia Business School. Patrick Mouterde has served as the Issuer’s Executive Vice President since its incorporation in 2007 and as a director since 2007. He has been a partner at PAI Partners since 2006. Patrick Mouterde joined PAI Partners in 1998, became principal in 2004 and became chief financial officer in 2006. Prior to this, Patrick spent eight years with Arthur Andersen as a manager in the Audit Department. Patrick Mouterde is a director of PAI Europe III General Partner, PAI Europe IV General Partner, PAI Europe V General Partner, PAI Europe VI General Partner, PAI Partners UK, Pelmo S.A., Tofane S.A. and Riviera Midco S.A. and a manager of Financière Daunou 7 S.à r.l., Financière Daunou 8 S.à r.l., Financière Daunou 10 S.à r.l., Financière Daunou 16 S.à r.l., Païperlek Investments S.à r.l., and Riviera Topco S.à r.l. Patrick Mouterde graduated from École des Hautes Études Commerciales (HEC Paris) and holds a Diplome d’Études Supérieures Comptables et Financières (DESCF).

Directors and Executive Officers of the Company Board of directors In accordance with its bylaws, the Company is governed by a board of directors (the “Board”) of no fewer than three members and no more than 18 members, who are appointed by the Ordinary Shareholders’ Meeting for a term of three years. 128

Outgoing directors may be re-elected. The Company’s bylaws provide that there may not be more than three directors over the age of 70 at the end of each annual Ordinary Shareholders’ Meeting called to approve the corporate financial statements and that no director may exercise such functions after reaching the age of 75. The Company’s bylaws also provide that the Chairman of the Board must be an individual under the age of 70 and that no person over the age of 70 may act as Chief Executive Officer. The Board’s internal rules stipulate that independent directors must comprise at least one third of the membership of the Board. The following table sets forth certain information concerning the current nine directors of the Company.

Name Age Title

Nordine Hachemi ...... 52 Chairman and Director Sylvie Charles ...... 54 Independent Director Alexandre Dejoie ...... 31 Director Yves Galland ...... 72 Independent Director Sophie Lombard...... 44 Director Alain Duplessis de Pouzilhac ...... 68 Independent Director Frédéric Stévenin ...... 47 Director Olivier Courlet de Vregille ...... 58 Director Lionel Zinsou-Derlin ...... 59 Director Set forth below are brief biographical descriptions of the Company’s directors. Nordine Hachemi has served as Chief Executive Officer of the Company since July 2013. He was appointed director on June 25, 2013 and then named Deputy Chairman of the Board on July 1, 2013 and Chairman of the Board on January 24, 2014. Nordine Hachemi holds degrees from the Institut de Physique du Globe de Strasbourg, the Ecole Nationale de Pétrole et des Moteurs and the INSEAD. He began his career at Pompes Guinard in 1986. He then joined Transroute (Groupe Caisse des Dépôts et Consignations) in 1988, where he took on commercial responsibilities and assisted with business development in Asia. In 1992, he moved to Bouygues Construction where he directed the implementation of large international infrastructure projects. Nordine Hachemi joined the Saur Group in 2001. After being promoted to chief executive officer of the Saur Group, he became chief executive officer and chairman of Sechilienne Sidec in 2008, where he stayed until 2011. Nordine Hachemi is chairman of the supervisory board of Mobipark, chairman of RKCI, director of Iorga Group, a member of the supervisory board of Citizen Capital and manager of SCI MD Raphael. Sylvie Charles has served as director of the Company since February 2012. She is head of the Freight Rail Transport Division of the SNCF Geodis Branch and acts as manager of FRET SNCF. In 1993, she was appointed chief executive officer of Cariane Group, and in 1999, she became Executive Vice President of Générale de Transport et d’Industrie. She was advisor to the Chairman of the Board of STVA Group from 2001 and became its Chief Executive Officer in 2004. Since 2010, Sylvie Charles has headed the Rail Businesses and Suppliers Division of the SNCF Geodis Branch, which encompasses Fret SNCF and all freight rail businesses, including foreign businesses, of that group. Her responsibilities were expanded to include multi-modal entities in October 2013. Sylvie Charles is president of Transport Ferroviaire Holding, chairman of VFLI, member of the Supervisory Board of STVA, chairman of Europe Intermodal Holding, member of the supervisory board of GEODIS S.A. and chairman of the supervisory board of Naviland Cargo. Alexandre Dejoie has served as director of the Company since January 24, 2014. He is replacing Guy Nafilyan for the period that remained in Mr. Nafilyan’s mandate when he retired from the Company. Alexandre Dejoie is an investment director at PAI Partners, which he joined in 2008. Prior to joining PAI Partners, he spent two years working in the Project Financing department of the Royal Bank of Scotland, where he was involved in the implementation of large-scale infrastructure operations. Alexandre Dejoie’s mandate as director of the Company is subject to ratification at the next general meeting of the shareholders. Yves Galland has served as director of the Company since April 2004. He is chairman of Boeing France and has acted as vice president of International Relations of Boeing since 2003. Yves Galland was Deputy Minister for local French authorities from 1986 to 1988, Minister of Industry in 1995 and Deputy Minister for of Finance and International Trade from 1995 to 1997. He was chairman and chief executive officer of Europe Assistance from 2000 to 2003. Yves Galland is a director of Generali Vie and of Generali IARD. For more information about Sophie Lombard, see “—Officers of the Issuer.”

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Alain Duplessis de Pouzilhac has served as director of the Company since April 2003. He is chairman of the supervisory board of Joa Group. In 1982, Alain Duplessis de Pouzilhac became chairman and chief executive officer of Havas and developed Havas Conseil in Europe. In the early 1990s, he directed the merger between Eurocom and RSCG to create Euro RSCG Worldwide (now Havas Worldwide) and became the new company’s chairman and chief executive officer. In 1996, he created the Havas Advertising parent company, which became Havas in 2002. In December 2005, he was named chief executive officer of Chaîne Française d’Information Internationale (France 24). In February 2008, the president of France named him chairman and chief executive officer of Audiovisuel Extérieur de la France, and he stepped down from the position in July 2012. Alain Duplessis de Pouzilhac is director of UGC and a member of the advisory board of INFRONT. For more information about Frédéric Stévenin, see “—Officers of the Issuer.” Olivier Courlet de Vregille has served as director since September 2009. He is a partner and member of the industrial goods and services sector of PAI Partners. Olivier Courlet de Vregille joined PAI Partners in 1983. From 1983 to 1996, he was responsible for mergers and acquisitions and investments in the sectors of construction, transport, security, engineering, environment and infrastructure. Since 1996, he has been responsible for investments in the energy and construction sectors. Olivier Courlet de Vregille was non-voting director on the board of Bouygues Telecom S.A., and was a director of the Antargaz Group from 2000 to 2003, the Saur Group from 2005 to 2007, the Spie Group between 2006 and 2011, and the Monier Group from 2007 to 2012. He is now a director of Xella International Holding, Xella Topco, Xenia (Xella Group), Financière Daunou 1 and Financière Daunou 5 (GCS Group). Lionel Zinsou-Derlin has served as director since September 2009. He is a partner, chairman and chairman of the executive committee of PAI Partners, where he also serves on the Investment Committee. Lionel Zinsou-Derlin joined PAI Partners in 2008. He began his professional career as lecturer and professor of economics at Université de Paris XIII and was advisor to the Minister of Industry and later to the Prime Minister of France. In 1986, Lionel Zinsou-Derlin joined Danone where he held several positions, including director of the development department, member of the executive committee and chief executive officer of HP and of Lea & Perrins. In 1997, he joined Rothschild & Cie as managing partner where he was responsible for the Consumer Goods Group for the Middle East and Africa and was a member of the Global Investment Bank Committee. He was appointed chairman of PAI Partners in 2009. Lionel Zinsou-Derlin was director of the Yoplait Group from 2009 to 2011, of the Spie Group between 2009 and 2011, and of the Chr. Hansen Group from 2009 to 2011. He is now a director of PAI Syndication GP, PAI Europe III general partner, PAI Europe IV general partner, PAI Europe V general partner, PAI Europe VI general partner, director of ATOS S.A., member of the supervisory board of Cerba European Lab, chairman of the supervisory board of Domaines Baron de Rothschild Lafitte, manager of Sofia-Société Africaine, director of Institut Pasteur and alternate director at United Biscuits Topco Ltd.

Shareholding Under the internal rules of the Company’s Board, each director must hold at least 250 shares of the Company. As of November 30, 2013, all directors held 250 shares of the Company except for Yves Galland, who held 600 shares and Nordine Hachemi, who held 22,806 shares directly and a further 22,806 shares through an investment vehicle. Alexandre Dejoie will need to meet this requirement within six months of his accession to the Board.

Board committees The Board’s Compensation and Nominating Committee is composed of Sophie Lombard, Alain Duplessis de Pouzilhac and Frédéric Stévenin. The mission of the Compensation and Nominating Committee is to assist the Board in determining the compensation paid to corporate officers and other company executives. The Audit Committee comprises Sylvie Charles, Yves Galland, Sophie Lombard and Frédéric Stévenin. The charter of the Audit Committee stipulates that its members are charged with an advance review of the Company’s accounts and risks.

Compensation The Combined Ordinary and Extraordinary Shareholders’ Meeting of April 11, 2008 set the aggregate amount of directors’ fees allocated annually to the Board at €260,000, applicable as of the financial year ended November 30, 2008 until decided otherwise at a Shareholders’ Meeting. These fees are paid only to Company directors who do not receive a salary from the Group. This package corresponds to the maximum annual amount that the Board may, on the recommendation of the Compensation and Nominating Committee, freely distribute among the directors, and has not changed since 2008.

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Service agreements between members of the Board and the Company or one of its subsidiaries There are no service agreements between the Board directors and the Company (but see “Description of Certain Related Party Transactions—Administrative Support, Service and Non-Dissolution Agreements—Service agreement with RKCI” for a description of the service agreement between the Issuer and RKCI, a company controlled by Nordine Hachemi.

Management Committee The following table sets forth certain information concerning the members of the Company’s management committee (the “Management Committee”).

Name Age Title

Nordine Hachemi ...... 52 Chairman and Chief Executive Officer Bruno Coche ...... 48 Senior Vice President and Chief Finance Officer Christian Delapierre ...... 57 Senior Vice President Institutional Sales Jean-François Demaris ...... 64 Senior Vice President Human Resources Jacques Rubio ...... 64 Senior Vice President Southwest Region Bertrand Saugnac ...... 50 Head of Marketing and Communications William Truchy ...... 56 Senior Vice President Regions Set forth below are brief biographical descriptions of the members of the Management Committee. For information about Nordine Hachemi, see “—Board of directors.” Bruno Coche has been Chief Finance Officer and a member of the Management Committee since December 2009. He holds a law degree and is a graduate of the Institut d’Etudes Politiques in Bordeaux. In 1989, he joined the Sediver Group as cash manager and then became director of administrative and financial services in that group’s France/Export Commercial Division. In 1996, he continued his career with the Giraud Group, assuming responsibility for cash and financing for the European perimeter and participated in that group’s growth and equity financing. He joined Kaufman & Broad in June 2002 as director of cash and financing. Christian Delapierre has been a member of the Management Committee since January 2014 and Senior Vice President for Institutional Sales since 2009. He has degrees in law and from the Ecole Supérieure des Professions Immobilières in Paris. Christian Delapierre started his career in 1980 with the Jacques Ribourel Group, where he was head of development in Haute-Savoie. He joined Bouygues in 1981, where he was head of development and later acted as local branch director. In 1989, he joined Kaufman & Broad as director of development. He became head of the Company’s Single-Family Homes division in Île-de-France in 2007. Jean-François Demaris has been a member of the Management Committee since January 2000, and Senior Vice President, Human Resources since January 2007. After earning a Master’s degree in economics, Jean-François Demaris began his career with Alcatel in November 1974, where he was in charge of economic and social research for that company’s regional plants. He was then appointed as divisional head of insurance and asset management, and head of administrative services for one of Alcatel’s documentation units. In 1982, he joined the Optronics division of CGE as human resources director, where he oversaw the merger and restructuring of several companies. In 1989, he joined SAFT as human resources director for the international power electronics division, where he worked on organizational development, HR projects, and the development of a manufacturing culture. In 1993, he became human resources director for Alcatel Data Networks, a French-American joint venture specializing in data network products and services, before his appointment in 1998 as director of management development for an Alcatel division. Jean-François Demaris joined Kaufman & Broad S.A. as vice president, human resources in January 2000, when he was also appointed to the Management Committee. Jacques Rubio has been a member of the Management Committee since December 2009. After studying engineering, Jacques Rubio formed S.A. Malardeau in 1975 with the Malardeau family, a real estate company in southern France. He served as corporate secretary, then as chairman and chief executive officer in 1985. In 2004, S.A. Malardeau became a subsidiary of Kaufman & Broad and Jacques Rubio was named senior vice president of Kaufman & Broad Southwest. In 2009, he was named senior vice president, Southwest Region, with local branches in Toulouse, Bordeaux, Bayonne and Montpellier. Bertrand Saugnac has been a member of the Management Committee since February 2014, when he joined Kaufman & Broad as Senior Vice President of Marketing and Communication. Bertrand Saugnac holds a degree from the Institut

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Supérieur de Gestion in Paris and an MBA degree from the University of San Francisco. He started his career at Mercedes- Benz France as a financial analyst. He then held successive positions as manager of point of sales design and organization in a local office, new product line manager for the French market and head of the commercial administration division. In 2000 he became brand manager at Smart France, where he supervised sales development and brand awareness. In 2012, he joined General Motors France as marketing director. William Truchy has been a member of the Management Committee since December 2004 and Senior Vice President for the Regions division since January 2009. After earning a degree in business, William Truchy began his career in real estate in 1980, working for an agency in Nancy, before joining Promogim in 1982. He was head of sales in Burgundy and the Rhône-Alpes region, and subsequently sales director for the Provence Côte d’Azur, Bordeaux and Toulouse regions. While at Promogim, he was appointed national sales director in 1987 and then senior vice president in 1989. William Truchy joined Kaufman & Broad in March 2003 as sales and marketing director for Île-de-France. He was named senior vice president, marketing in January 2005 and led the sales and marketing and showroom operations in Paris and Île-de-France. In 2008, he was named senior vice president for sales and marketing. He is senior vice president for Regions since 2009.

Compensation The Board sets the compensation of the Company’s corporate officers. As part of this attribution, the Board makes decisions from time to time regarding the compensation and benefits to be granted to the Chairman and Chief Executive Officer, in particular as concerns the variable portion of such compensation. The Company’s corporate officers receive a fixed annual compensation plus a variable portion, which together totaled €2,366,070 in the financial year ended November 30, 2013, compared to €1,768,534 in the financial year ended November 30, 2012 and €1,769,790 in the financial year ended November 30, 2011. The total compensation amounts in the financial year ended November 30, 2013 were split among Guy Nafilyan (€1,758,816), Nordine Hachemi (€505,170) and Philippe Jossé (€102,084). Management Committee members receive fixed and variable compensation paid in the form of a bonus. For the financial year ended November 30, 2013, total gross compensation and benefits received by members of the Management Committee (excluding Kaufman & Broad S.A. corporate officers) amounted to €2,255,665, which represented €1,069,840 in fixed salaries, €1,175,000 in bonuses, and €10,825 for in-kind benefits. The compensation of the Management Committee’s executive corporate officers and members is generally paid by GIE Kaufman & Broad as fixed and variable compensation as well as through benefits in kind (GIE Kaufman & Broad is an entity dedicated to providing funds to the different legal entities comprising the Group, particularly to the staff).

Conflicts of interest Representatives of PAI Partners who serve as Board members may be faced with potential conflicts of interest when PAI Partners or any of its related entities have interests diverging from those of the Company. Pursuant to the Board’s internal rules, the Chairman may ask any director facing an actual or potential conflict of interest not to participate in the relevant Board proceedings. There are no family relationships between the members of the Management Committee and the members of the Company’s other administrative bodies, or between the members of the Management Committee and the members of the Board. However, there are family ties between Béatrice Mortier, Regional Director for Montpellier, and Yves Galland, director and chairman of the audit committee of the Company. Except as indicated above and disclosed in “Description of Certain Related Party Transactions,” to our knowledge and as of the date hereof, no conflicts of interest have been identified between the duties to the Group of any Board members or senior management in their capacity as corporate officers of the Company and their private interests or other duties. To our knowledge and as of the date hereof, there is no arrangement or agreement between the Company and its major shareholders, customers or suppliers purporting to ensure that an individual is elected as a member of the Board or appointed as a member of management. To our knowledge and as of the date hereof, members of the Board or management have agreed to no restrictions with regard to the disposal of their respective holdings in the Company, with the exception of agreements made under the shareholders’ agreement of June 30, 2009, described in “Description of Certain Related Party Transactions.” To our knowledge and as of the date hereof, there are no family ties among the Board members.

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PRINCIPAL SHAREHOLDERS The Issuer Financière Gaillon 8 S.A. is a société anonyme organized and established under the laws of France on April 30, 2007. The Issuer’s registered office is located at 232 rue de Rivoli, 75001 Paris, France. As of the date hereof, the issued share capital of the Issuer is €37,000 divided into 684,089,563 ordinary shares with equal nominal value.

Capital structure of the Issuer As of November 30, 2013, and as adjusted for the Transactions the ownership of the Issuer’s shares was as follows:

Name Ordinary shares Preference shares % Share capital % Voting rights

FD10 ...... 465,180,900 40.5% 68.0%

CA-CIB ...... 465,180,900 40.5% Financière de Neuilly S.A.S...... 218,908,660 19.0% 32.0%

Frédéric Stévenin ...... 1

Sophie Lombard...... 1

Patrick Mouterde ...... 1

Total ...... 684,089,563 465,180,900 100% 100%

The Company The Company is a société anonyme organized and established under the laws of France. As of November 30, 2013, Kaufman & Broad’s capital stock amounted to €5,612,011.08, subdivided into 21,584,658 shares of common stock each with a par value of €0.26, all subscribed and all fully paid up. The weighted average number of common shares outstanding totaled 20,915,865 shares excluding treasury shares as of November 30, 2013, compared to 21,135,155 shares excluding treasury shares as of November 30, 2012 and 21,381,864 shares excluding treasury shares as of November 30, 2011. As of November 30, 2013, the Company held 681,840 treasury shares, including 25 shares under the liquidity agreement. As of November 30, 2012, the Company held 643,093 treasury shares, including 1,750 shares under the liquidity agreement. As of November 30, 2011, the Company held 278,109 treasury shares, not including any shares under the liquidity agreement.

Capital structure of the Company As of January 31, 2014, the ownership of the Company’s shares was as follows:

Name Ordinary shares % Share capital % Voting rights

Companies owned by funds held by PAI Partners(a) ...... 19,133,070 88.64% 94.61% Public(b) ...... 1,513,258 7.01% 4.79% Kaufman & Broad S.A...... 698,575 3.24% — Employees ...... 239,755 1.11% 0.60%

Total ...... 21,584,658 100.00% 100.00%

(a) Financière Gaillon 8 S.A. holds 87.95% of the share capital and 94.24% of the voting rights. (b) The shares held by directors are included under the “Public” heading in the shareholder structure. The total number of shares known to have double voting rights as of January 31, 2014 was 19,378,630 shares. As of that date, there were 88 holders of registered shares and the Company held 698,575 treasury shares. At the financial year-end, the number of shares held by employees, as defined in Article L.225-102 of the French Commercial Code, represented 1.11% of the Company’s capital. To the Company’s knowledge, with the exception of funds held by PAI Partners, there is no other shareholder holding more than 5% of capital and voting rights.

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PAI Partners PAI is a leading pan-European private equity investment firm and the largest private-equity investor in France. It is one of the oldest and most experienced investors in Europe. Its origins date back to Paribas’s capital investment activity in 1872. PAI manages and advises private equity assets of nearly €5.8 billion. Since 1994, PAI has conducted 50 buyouts in ten European countries, for a total value in excess of €36 billion. PAI makes control-oriented investments through LBOs by acquiring majority stakes in European medium- and large-sized companies and enjoys a leadership position in five core sectors.

Shareholders’ Agreements See “Description of Certain Related Party Transactions—Shareholders’ Agreements.”

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DESCRIPTION OF CERTAIN RELATED PARTY TRANSACTIONS In the course of our ordinary business activities, we regularly enter into agreements with or render services to related parties. In turn, such related parties may render services or deliver goods to us as part of their business. Purchase and supply agreements between subsidiaries and affiliated companies and with associated companies or shareholders of such associated companies are entered into on a regular basis within the ordinary course of business. We believe that all transactions with affiliated companies and persons with which members of our board of managers are affiliated are negotiated and conducted on a basis equivalent to those that would have been achievable on an arm’s-length basis, and that the terms of these transactions are comparable to those currently contracted with unrelated third-party suppliers, manufacturers and service providers. In addition to the foregoing ordinary course transactions, we have also entered into the following transactions with related parties:

Shareholder Loan Under a shareholder loan agreement dated June 30, 2009, as amended, FD10 disbursed to the Issuer a principal amount of €4.9 million in the form of a shareholder loan, the purpose of which was to enable the Issuer to finance (i) its existing liquidity commitments, (ii) all the costs and fees related to the restructuring of certain debt under the Issuer’s former senior and mezzanine credit facilities and (iii) other operating costs and current expenses. The loan bears no interest, is subordinated to the repayment in full of the Notes and is subject to mandatory repayment, to the extent possible after repayment of the Notes, as from the later of (i) the date of transfer of (a) all of the Company’s shares held by the Issuer or (b) all or, in the case of an IPO, a portion of the shares of the Issuer and (ii) the date falling one year after the date of maturity of the Notes.

Shareholders’ Agreements Shareholders of Financière Gaillon 8 S.A. Managers’ Shareholders’ Agreement PAI Partners, FD10 (the investment vehicle of funds managed by PAI Partners), the Issuer, Financière de Neuilly S.A.S. (the investment vehicle of certain Company managers wishing to invest in the Issuer) and certain employees or corporate officers of the Group and managers who invested in Financière de Neuilly S.A.S. signed on June 30, 2009 a new shareholders’ agreement nullifying and replacing a previous shareholders’ agreement signed in 2007. As in the 2007 agreement, the purpose of the shareholders’ agreement signed on June 30, 2009 is to organize relationships between FD10, on the one hand, the managers of the Group and Financière de Neuilly S.A.S., on the other, with respect to such parties’ equity interests in the Issuer, as well as to stipulate and organize the circumstances and conditions in which the Group managers have the right or the obligation to dispose of certain securities issued by the Company.

Mezzanine Shareholders’ Agreement CA-CIB (formerly Calyon) and ML IBK Positions Inc., each of which acted as lenders under the Issuer’s former mezzanine credit agreement dated July 27, 2007 (the “Mezzanine Lenders”), each received one half of the Issuer’s preference shares at the time of their issuance on June 30, 2009 as consideration for the full satisfaction and discharge of the Issuer’s obligations under the former mezzanine credit facilities. The Mezzanine Lenders, the Issuer, FD10 and PAI Partners signed a shareholders’ agreement with respect to their respective equity interests in the Issuer and, in particular, to establish certain rules applicable to the (i) transfers of Company shares held by the Issuer and (ii) transfers of preference shares held by the Mezzanine Lenders. On November 4, 2011, ML IBK Positions, Inc. sold its preference-share participation in the Issuer to CA-CIB (formerly Calyon). We plan to amend this shareholders’ agreement to reflect the impact of the Preference Share Repurchase. See “—Preference Share Repurchase Heads of Terms.”

Joint promotion programs No shareholder agreements have been entered into by the Group’s companies with partners outside the Group. For joint promotion programs, the relevant partners usually sign a Memorandum of Understanding in order to specify the breakdown of responsibilities and fees to be invoiced to service providers.

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Administrative Support, Service and Non-Dissolution Agreements Administrative support agreement with Financière de Neuilly S.A.S. On April 11, 2008, the Company signed an agreement with Financière de Neuilly S.A.S. which set out the conditions under which the Company would provide Financière de Neuilly S.A.S. with the material and human resources necessary to perform certain administrative, financial, accounting and legal services. Invoicing under this agreement is done on the basis of strict parity with the costs incurred by the Company for providing resources required under the agreement, such that the transaction remains strictly financially neutral for the Company. As of November 30, 2013, these costs amounted to €700. This agreement was categorized as an ordinary course transaction under French law by the Company’s Board on February 15, 2013.

Service agreement with RKCI On November 29, 2013, the Issuer signed an agreement with RKCI, a company controlled by Nordine Hachemi, in the context of organizing the Issuer’s exit from the Company’s share capital and in order to implement an eventual sale of all or part of its stake in the Company. Depending on whether this potential exit takes the form of a sale of the Company’s shares or of a sale of the Issuer’s shares, the beneficiary of the services provided will be either the Issuer or FD10, the Issuer’s controlling shareholder. Any consideration to be received by RKCI for services under this agreement is proportional to the average exit price per Company share.

Non-dissolution agreement with the Issuer’s shareholders and other creditors On June 30, 2009, the Issuer signed an agreement with PAI Partners, Financière Daunou 10 S.à r.l., Financière de Neuilly, the partners of Financière de Neuilly, the Issuer’s senior lenders, Calyon and Merrill Lynch International Limited, London Subsidiary, as mezzanine creditors, and Calyon and ML IBK Positions, Inc. as holders of the Issuer’s preferred shares, in relation to the application of Article L.225-248 of the French Commercial Code. The signatories to this agreement acknowledged, among other things, that the financial structure of the Issuer could lead to the Issuer’s net assets becoming less than 50% of its share capital. In the event that the Issuer’s net assets fall below 50% of its share capital, each of the parties to this non-dissolution agreement undertook not to seek, petition or apply for the winding-up, liquidation or dissolution of the Issuer, either directly or indirectly, pursuant to the aforementioned Article L.225-248.

Preference Share Repurchase Heads of Terms On March 17, 2014, we agreed to repurchase 216,839,458 preference shares from CA-CIB for a total purchase price of €17.0 million. We will repurchase the 216,839,458 preference shares from CA-CIB after the Issue Date and these preference shares will be cancelled thereafter. CA-CIB will hold 465,180,900 preference shares after the Preference Share Repurchase, which will represent all of the preference shares of the Issuer at that time. Our agreement to repurchase preference shares from CA-CIB was memorialized in a heads of terms executed by the main shareholders of the Issuer on March 17, 2014. The heads of terms sets forth, among other things, certain undertakings, including changes to the governance of the Issuer and/or the Company and the obligation to amend the shareholders’ agreement between the Issuer, FD10, PAI Partners and CA-CIB. Such amendments will, in particular, restrict the Issuer’s ability to incur additional indebtedness, restrict the timing and mechanics of the sale of all of the shares of the Issuer or the Company and define the apportionment of proceeds from any such sale. The completion of the Preference Share Repurchase and corresponding reduction in share capital are subject to certain conditions precedent, including (i) the successful completion of the Offering and the application of a portion of the proceeds thereof to reimburse all of the Issuer’s outstanding debt under the Existing FG8 Senior Facilities; (ii) unanimous approval, by the extraordinary shareholders’ meeting of the Issuer and the special meeting of the preferred shareholders, of the share capital reduction and the prior capital increase to meet minimum capital requirements under French law; (iii) the amendment of our by-laws and of the shareholders’ agreement between the Issuer, FD10, PAI Partners and CA-CIB; and (iv) the absence of opposition to the share capital reduction by the Issuer’s creditors during a statutory 20-day period following the extraordinary shareholders’ meeting.

Vendor loan to RKCI RKCI, a company controlled by Nordine Hachemi, purchased 22,806 shares of the Company on November 29, 2013 for a purchase price of €400,016. RKCI paid half of the purchase price in cash and the other half by means of a vendor loan.

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Nordine Hachemi and RKCI are each entitled to purchase up to €400,000 in Company shares in 2014, half of which would be payable in cash by Nordine Hachemi or RKCI, with the remainder payable by means of a vendor loan to RKCI.

Incentive Programs Stock purchase or subscription options plans—Bonus share awards—Stock subscription warrants Stock options The Extraordinary Shareholders’ Meeting of April 19, 2006 authorized the board of directors to grant employees and corporate officers’ options to purchase a maximum of 400,000 new or existing shares of the Company. This authority was used to allot 95,500 options in 2006, primarily to two Company corporate officers and 24 employees, at a strike price of €44.23 per share. These options must be exercised within 10 years of the allotment date. Guy Nafilyan was allotted 12,000 options in 2006, which will remain exercisable until July 24, 2014. As of November 30, 2013, none of the 95,500 options allotted in 2006 had been exercised.

2006 Stock Options

Date of the board meeting ...... April 19, 2006 Number of shares available for purchase ...... 95,500 Number of shares available for purchase by Guy Nafilyan ...... 12,000 Date from which options can be exercised ...... April 19, 2008 Expiration date ...... April 19, 2016 Purchase price per share ...... € 44.23 Means of exercise of stock options ...... — Number of shares purchased as of November 30, 2013 ...... 0 Number of expired or cancelled stock options ...... 64,400 Number of stock options available to be exercised as of November 30, 2013 ...... 31,100

Bonus share plan—2009 The Company’s Shareholders’ Meeting of April 9, 2009 authorized the board to make one or more allotments of existing or new Company bonus shares to beneficiaries to be selected among employees of the Company or its affiliates and corporate officers of the Company or its affiliates, up to a maximum of 220,000 shares. The minimum holding period for the shares was set at two years from the date of definitive allotment.

Pursuant to this mandate, the Company’s board of directors granted employees 143,515 existing shares on July 8, 2009, 58,000 existing shares on January 20, 2010, 36,000 existing shares on February 17, 2011 and 20,000 existing shares on January 17, 2012, representing 0.66%, 0.27%, 0.17% and 0.09% respectively of the Company’s share capital.

2009 Plan

Date of the Extraordinary Shareholders’ Meeting authorizing the allotment plan ...... April 9, 2009 Number of shares available for allotment ...... 220 000 Tranche 1—Date of the Board of Directors’ meeting granting shares ...... July 8, 2009 Number of beneficiaries...... 16 Number of bonus shares allotted on July 8, 2009 ...... 143,515 End of vesting period/Share transfer date ...... July 9, 2011 Lock-in period ...... 2 years End of lock-in period ...... July 9, 2013 number of shares allotted to corporate officers as of July 8, 2009 ...... — number of shares definitively allotted as of November 30, 2013 ...... 108,817 number of shares void ...... 34,698 Tranche 2—Date of the Board of Directors’ meeting granting shares ...... January 20, 2010 Number of beneficiaries...... 30 Number of bonus shares allotted on January 20, 2010 ...... 58,000 End of vesting period/Share transfer date ...... January 21, 2012 Lock-in period ...... 2 years

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2009 Plan

End of lock-in period ...... January 21, 2014 number of shares allotted to corporate officers as of January 20, 2010 ...... — number of shares definitively allotted as of November 30, 2013 ...... 55,000 number of shares void ...... 3,000 Tranche 3—Date of the Board of Directors’ meeting granting shares ...... February 17, 2011 Number of beneficiaries...... 14 Number of bonus shares allotted on February 17, 2011 ...... 36,000 End of vesting period/Share transfer date ...... February 18, 2013 Lock-in period ...... 2 years End of lock-in period ...... February 18, 2015 number of shares awarded to corporate officers as of February 17, 2011 ...... — number of shares definitively allotted as of November 30, 2013 ...... 34,000 number of shares void ...... 2,000 Tranche 4—Date of the Board of Directors’ meeting granting shares ...... January 17, 2012 Number of beneficiaries...... 21 Number of bonus shares allotted on January 17, 2012 ...... 20,000 End of vesting period/Share transfer date ...... January 18, 2014 Lock-in period ...... 2 years End of lock-in period ...... January 18, 2016 number of shares allotted to corporate officers as of January 17, 2012 ...... — number of shares definitively allotted as of November 30, 2013 ...... 19,000 number of shares void ...... 1,000

Bonus share plan—2012 The Company’s Shareholders’ Meeting of April 19, 2012 authorized the board to make one or more allotments of existing or new Company shares to beneficiaries to be selected among employees of the Company or its affiliates and corporate officers of the Company or its affiliates, up to a maximum of 100,000 shares of the Company. The minimum holding period for the shares was set at two years from the date of definitive allotment.

Pursuant to this mandate, the Company’s board of directors allotted 35,800 existing shares to employees on January 22, 2013, representing 0.17% of the Company’s share capital.

2012 Plan

Date of the Extraordinary Shareholders’ Meeting authorizing the allotment plan ...... April 19, 2012 Number of shares available for allotment ...... 100,000 Tranche 1—Date of the Board of Directors’ meeting granting shares ...... January 22, 2013 Number of beneficiaries...... 40 Number of bonus shares allotted on January 22, 2013 ...... 35,800 End of vesting period/Share transfer date ...... January 23, 2015 Lock-in period ...... 2 years End of lock-in period ...... January 23, 2017 number of shares allotted to corporate officers ...... — number of shares definitively allotted as of November 30, 2013 ...... 0 number of shares void as of November 30, 2013 ...... 600

Stock subscription warrants The Extraordinary Shareholders’ Meeting of December 3, 2007 decided to issue immediately 721,086 warrants to subscribe to shares of the Company to 21 employees (477,339 warrants) and to Guy Nafilyan (243,747 warrants). Warrants formerly held by employees no longer with the Company totaled 327,028 as of November 30, 2013, and were repurchased by FD10. FD10 has waived its right to exercise these warrants, which are therefore void. As a result, 394,058 warrants remained exercisable as of November 30, 2013, including the 243,747 warrants held by Guy Nafilyan.

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The exercise of these 394,058 warrants could result in a future capital increase in a maximum nominal amount of €102,455.08 plus, where applicable, the amount of the additional capital increases necessary to preserve the rights of the warrant holders in the event of new financial transactions.

Defined contribution pension plans Members of the Management Committee, including Guy Nafilyan (until June 30, 2013), Philippe Jossé (from February 1 to May 15, 2013) and Nordine Hachemi (since July 1, 2013), benefit from a defined-contribution supplemental pension contract. For financial year 2013, the amount recognized as expense by the Company for this contract was €158,000 (€163,000 in 2012).

Loans In the financial years ended November 30, 2011, 2012 and 2013 we did not grant any loans to the members of our administrative and management bodies.

Equity Affiliates and Joint Ventures The principal amounts concerning related parties are detailed below; the other companies consolidated using the equity method are immaterial:

Assets as of Liabilities as of Results as of Affiliated companies November 30, 2013 November 30, 2013(a) November 30, 2013

(in € thousands) SCCV Colombes Marine Lot A ...... 8,277 9,083 (282) SCCV Colombes Marine Lot B ...... 8,153 7,854 (226) SCCV Colombes Lot H...... 3,795 3,664 296 SCCV Bagneux—Paul Eluard ...... 8,145 7,410 539 SCCV Bagneux—Fontaine Gueffier II ...... 3,158 3,266 (109) SCCV Athena ...... 3,800 1,995 (168) SAS St Exupéry ...... 23,754 25,738 (108)

(a) Liabilities not including shareholders’ equity.

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DESCRIPTION OF OTHER INDEBTEDNESS The following summary of certain provisions of the documents listed below governing certain of our indebtedness does not purport to be complete and is subject to, and qualified in its entirety by reference to, the underlying documents.

New Senior Facilities Agreement Prior to the Issue Date, the Company and certain of its subsidiaries entered into a term and revolving facilities agreement (the “New Senior Facilities Agreement”) among, inter alios, the Company as the borrower (the “Borrower”), certain of its subsidiaries as guarantors, Banco de Sabadell, S.A., Banque Européenne du Crédit Mutuel, CA-CIB, Credit Suisse International, Goldman Sachs International and Natixis as mandated lead arrangers, CA-CIB as agent (the “Agent”) and as security agent (the “New Facilities Security Agent”) and certain financial institutions as lenders (the “Original Lenders” and, together with any financial institution that becomes a party thereto, the “Lenders”). The New Senior Facilities Agreement will provide for up to €200,000,000 of borrowing availability, consisting of term loan facilities (the “New Senior Credit Facilities”) which consist of a Facility A tranche (the “Facility A”) of up to a maximum aggregate principal amount of €50,000,000 and a Facility B tranche (the “Facility B”) of up to a maximum aggregate principal amount of €100,000,000 as well as a revolving facility of up to a maximum aggregate principal amount of €50,000,000 (the “New Revolving Credit Facility” and, together with the New Senior Credit Facilities, the “Facilities;” each, a “Facility”). The Borrower will draw on the full amount available under each of Facility A and Facility B on the Issue Date and apply all amounts borrowed under the New Senior Credit Facilities to repay all of its obligations under the Existing Senior Credit Facilities, which amounted to €237.7 million as of November 30, 2013. The Borrower does not intend to draw on the New Revolving Credit Facility on the Issue Date, but may do so in the future and use all amounts borrowed thereunder for the general corporate purposes of the Borrower and its subsidiaries (the “Borrower Group”), but not towards acquisitions or prepayment of any loans under the New Senior Credit Facilities.

Ancillary Facilities A Lender under the New Revolving Credit Facility or any of its affiliates may make available to the Borrower all or part of that Lender’s undrawn commitment in the New Revolving Credit Facility by way of ancillary facilities such as overdrafts, letters of credit, bank guarantees or short term loan facilities, subject to the satisfaction of certain conditions precedent and in accordance with the terms of the New Senior Facilities Agreement.

Conditions to Borrowing Drawdowns under the New Senior Facilities Agreement are subject to certain conditions precedent that must be satisfied on the date the drawdown is requested and on the drawdown date. A non-exhaustive list of these conditions is set forth below: • in the case of rollover loans under the New Revolving Credit Facility, no non-payment event of default, or insolvencies or similar events of default have occurred and are continuing or would occur as a result of that drawdown; and • in the case of any other utilization (A) no default is continuing or would occur as a result of that drawdown; (B) certain (or all, in the case of utilizations to be made on the Issue Date) representations and warranties specified in the New Senior Facilities Agreement are true and accurate in all material respects and will remain true and accurate in all material respects immediately after such utilization.

Repayments and Prepayments Loans under Facility A (the “Facility A Loans”) will be repayable in nine instalments due every six months (the first eight instalments being equal in amount), commencing on March 31, 2015 until the applicable termination date, which will be the date falling five years after the Issue Date. Loans under Facility B (the “Facility B Loans”) will be repayable on the termination date, which will also be the date falling five years after the Issue Date. Any amount still outstanding under either Facility A or Facility B on its respective termination date will be immediately due and payable.

The Borrower may voluntarily prepay its utilizations in whole or in part under the New Senior Credit Facilities in a minimum amount of €5,000,000 (and integral multiples of €1,000,000 in excess thereof) by giving not less than seven business days’ prior notice to the Agent (or such shorter period as is otherwise agreed). Any such prepayment may be applied against the Facility A Loan or Facility B Loan as the Borrower elects, provided that with respect to the Facility A Loan, no

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more than 50% of the amount so prepaid may be applied on the next two instalments of such Loan. The Borrower may also voluntarily cancel all or part of the available commitments under the New Senior Credit Facilities in a minimum amount of €1,000,000 (and integral multiples of €200,000 in excess thereof) by giving not less than five business days’ prior notice to the Agent (or such shorter period as is otherwise agreed). The Borrower may not reborrow any part of a New Senior Credit Facility which has been prepaid. The New Revolving Credit Facility commitments of each Lender will mature on the date falling five years after the Issue Date unless extended by the Borrower and the Lenders concerned. Any amount still outstanding under the New Revolving Credit Facility on its maturity will be immediately due and payable. Subject to certain conditions, the Borrower may permanently cancel all or part of the available commitments under the New Revolving Credit Facility in a minimum amount of €1,000,000 (and integral multiples of €200,000 in excess thereof) by giving not less than five business days’ prior notice to the Agent (or such shorter period as is otherwise agreed). In addition, the Borrower may voluntarily prepay its utilizations in whole or in part under the New Revolving Credit Facility in a minimum amount of €1,000,000 (and integral multiples of €500,000 in excess thereof) by giving not less than seven business days’ prior notice to the Agent (or such shorter period as is otherwise agreed). The Borrower may reborrow amounts repaid under the New Revolving Credit Facility, subject to certain conditions, until one month prior to maturity. In addition to any voluntary prepayments, the New Senior Facilities Agreement requires mandatory prepayment (or, as the case may be, an offer to do so) in full or in part in certain circumstances, including: • with respect to any Lender, if it becomes unlawful for such Lender to perform any of its obligations contemplated by the New Senior Facilities Agreement or to fund, issue or maintain its participation in any utilization; • with respect to any Lender that has issued a letter of credit or guarantee (an “Issuing Bank”), if it becomes unlawful for such Issuing Bank to leave outstanding any such letter of credit or guarantee; • upon the occurrence of a Facility Change of Control (as defined below), if the Lender requires such prepayment by sending the Agent a notice for prepayment and cancellation; • upon certain disposals of assets or reimbursements from insurance claims, to the extent that the net cash proceeds received exceed certain agreed thresholds and have not been applied for other permitted purposes; and • if the excess cashflow for that financial year exceeds a certain amount, subjection to certain conditions. “Facility Change of Control” is defined as (i) the sale, lease, transfer, conveyance or other disposition (other than by way of merger, consolidation or other business combination transaction), in one or a series of related transactions, of all or substantially all of the assets of the Borrower Group; or (ii) PAI Partners or any of its affiliates ceases to, directly or indirectly, legally or beneficially, hold more than 50% of the ordinary issued share capital or voting rights of the Company. Mandatory prepayments will be applied first, to prepay the New Senior Credit Facilities, and second, to cancel the commitments under the New Revolving Credit Facility and prepay any amounts outstanding. Prepayment of the New Senior Credit Facilities may be applied between the Facility A Loan and Facility B Loan as the Borrower elects, provided that (i) no more than 50% of the mandatory prepayment amount may be applied towards the Facility A Loan and (ii) with respect to any amount so applied to the Facility A Loan, up to 50% of such amount shall be applied on the next two instalments and at least 50% of such amount shall be applied pro rata the amount of the following instalments.

Commitment Cancellation and Increase The New Senior Facilities Agreement includes customary provisions with respect to defaulting Lenders, Lenders subject to illegality and Lenders claiming certain indemnifications or increased costs from the Borrower. In the event that the Borrower cancels the commitments of such Lenders in accordance with the terms of the New Senior Facilities Agreement, the Borrower may request to increase the commitments relating to the applicable Facility by an amount up to the available commitments which has been so previously canceled, subject to the fulfillment of certain conditions.

Interest and Fees The New Senior Credit Facilities and the New Revolving Credit Facility will each bear interest at a rate per annum equal to EURIBOR plus certain mandatory costs (if any) and an applicable margin. The margin for each facility may be

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reduced by reference to the Total Net Leverage ratio (as defined in the New Senior Facilities Agreement) or if the Borrower meets certain credit ratings. Default interest will be calculated as 100 basis points over the Euro OverNight Index Average rate and assessed on the defaulted amount. The Company is required to pay a commitment fee, quarterly in arrears, on available but unused commitments under each of the New Senior Credit Facilities and the New Revolving Credit Facility. The Company is also required to pay an arrangement fee and certain fees to the Agent and the New Facilities Security Agent in connection with the New Senior Credit Facilities and New Revolving Credit Facility and fees related to the issuance of ancillary facilities and letters of credit. The rate and time of payment of interest, commissions, fees and any other remuneration in respect of each ancillary facility will be as agreed between the Borrower and the relevant Lender providing the ancillary facility, based upon normal market rates and terms.

Security and Guarantees The Company will be the only Borrower under the New Senior Facilities Agreement. Due to limitations under French law, only the obligations under the New Revolving Credit Facility will be originally guaranteed by Kaufman & Broad Homes S.A.S. and Kaufman & Broad Europe S.A.S. subject to certain customary limitations and the agreed security principles set out in the New Senior Facilities Agreement (the “Agreed Security Principles”). The Company will ensure that any of its subsidiaries that constitute a Material Subsidiary (as defined below) will become a Guarantor under the New Senior Facilities Agreement within 60 days of the delivery of the relevant quarterly or annual financial reports. A “Material Subsidiary” is defined as any subsidiary of the Company whose EBITDA, on an unconsolidated basis and excluding intra-group items, represents 5% or more of the consolidated EBITDA of the Borrower Group and any holding company of such subsidiary that is also a member of the Borrower Group, subject to certain qualifications and exceptions. In addition, the New Senior Facilities Agreement also provides that, subject to the Agreed Security Principles, the Company will ensure that the aggregate EBITDA (calculated on the same basis as Consolidated EBITDA (as defined in the New Senior Facilities Agreement)) of the Borrower and the Guarantors (calculated on an unconsolidated basis and excluding all intra-restricted group items and investments in any restricted subsidiaries, but adding to the unconsolidated EBITDA of the Company the EBITDA from the sociétés en nom collectif owned by the Company) represents not less than 85% of the consolidated EBITDA (for this purpose disregarding the EBITDA of any member of the Borrower Group that generates negative EBITDA with such negative EBITDA being deemed to be zero) of the Borrower Group, in each case tested annually on the basis of the relevant annual financial statements delivered under the New Senior Facilities Agreement. The New Senior Facilities Agreement will be initially secured by (i) a pledge over the shares of each of the Guarantors, (ii) a pledge over the bank accounts held in France by each of the Company and the Guarantors, (iii) a security assignment of trade and intercompany receivables held by the Company and (iv) a pledge over intercompany receivables held by each of the Guarantors, in each case, subject to limitations under applicable law. The New Senior Facilities Agreement may be secured by additional collateral in the future.

Representations and Warranties The New Senior Facilities Agreement includes certain representations and warranties customary for facilities of this type, subject to exceptions and appropriate materiality qualifications.

Covenants The New Senior Facilities Agreement contains affirmative and negative covenants (including restrictive covenants that largely replicate those contained in the Indenture, subject to certain exceptions and modified to reflect the restricted group being the Company and its subsidiaries). See “Description of the Notes—Certain Covenants.”

The affirmative covenants require, among other things (and subject to certain qualifications): (i) the provision of certain financial information including consolidated annual audited financial statements and certain semi-annual, quarterly and monthly financial reports; (ii) the obtaining and maintenance of and compliance with certain authorizations including those required by law or regulation to enable each obligor to perform its obligations under, and to ensure the legality, 142

validity, enforceability or admissibility as evidence of the finance documents under the Facilities (the “Finance Documents”) to which such obligor is party and to carry on its business; (iii) payment of taxes; (iv) preservation of assets; (v) maintenance of pari passu ranking of any unsecured and unsubordinated claims of a Finance Party (as defined in the New Senior Facilities Agreement) against it under the Finance Documents with the claims of other unsecured and unsubordinated creditors (except those whose claims are mandatorily preferred by laws of general application to companies); (vi) maintenance of insurances; (vii) preservation and maintenance of intellectual property; (viii) the provision of access in certain circumstances; (ix) certain further assurance with respect to the security; (x) compliance with certain operational parameters and undertakings; and (xi) compliance with certain sanctions laws and regulations. The negative covenants include, among other things, restrictions with respect to (i) changes of the centre of main interests of the Borrower or any Guarantor; and (ii) the making of a substantial change to the nature of the business of the Borrower Group as a whole and other negative covenants that largely replicate those in the Indenture as stated above. Certain covenants in the New Senior Facilities Agreement, though similar to the corresponding covenants in the Indenture, are more restrictive on the Company and its subsidiaries. For example, with the exception of certain permitted debt, any debt incurred by the Company or its subsidiaries (including pursuant to the general debt basket and baskets for capitalized lease obligations and local lines of credit) must not cause the the total net leverage of the Borrower Group to equal or exceed 1.0x. In addition, any future acquisition by the Company or any of its subsidiaries will be permitted if it is a Permitted Investment (as defined in the New Senior Facilities Agreement) and meets certain additional conditions, including the total net leverage ratio of the Borrower Group being below 1.2x after giving pro forma effect to such acquisition. Furthermore, any distribution (other than to the shareholders of the Company or a Permitted Payment (as defined in the New Senior Facilities Agreement) must satisfy the total net leverage test for the Borrower Group (being less than 1.0x) after giving pro forma effect to such distribution in addition to the customary restrictions in the restricted payments covenant. Furthermore, the New Senior Facilities Agreement requires the Borrower Group to comply with certain financial covenants consisting of (i) a maximum net leverage ratio of total net debt to consolidated EBITDA of 3.0x and (ii) a maximum net gearing ratio of total net debt to equity of 1.0x, subject to certain adjustments. Each of the ratios set forth in this paragraph and the paragraph above is based on the definitions in the New Senior Facilities Agreement, which may differ from similar definitions in the Indenture and the equivalent definitions described in these Listing Particulars.

Consents and Waivers Any term of the Finance Documents may be amended or waived only with the consent of the majority lenders and the Borrower. Majority lenders is defined for these purposes to mean Lenders under the New Senior Facilities Agreement whose 2 commitments aggregate to more than 66 /3% of the total commitments thereunder (the “Majority Lenders”). However, certain changes in the terms of the Finance Documents require the consent of the super majority lenders, defined as Lenders under the New Senior Facilities Agreement whose commitments aggregate to more than 90% of the total commitments thereunder (the “Super Majority Lenders”). Such changes include, among others, the definitions of Majority Lenders, Super Majority Lenders and Facility Change of Control, changes to the parties otherwise than in a manner specified in the New Senior Facilities Agreement, any reduction in the margin or in the amount of any payment under the New Senior Facilities Agreement, any extension to the date of payments under the New Senior Facilities Agreement, and any increase or extension of any commitment or the introduction of an additional loan, commitment or facility under the Finance Documents.

Events of Default The New Senior Facilities Agreement will contain customary events of default (subject in certain cases to agreed grace periods, thresholds and other qualifications). The occurrence and continuance of an event of default would allow the Majority Lenders to take several actions with respect to the Facilities, including:

• cancel all or part of their commitments (including any in respect of the ancillary facilities); • declare that all or part of their utilizations, together with accrued interests and all other amounts accrued or outstanding under the Finance Documents, are immediately due and payable; • declare that cash cover in respect of each bank guarantee is immediately due and payable; • declare that all or part of the amounts (or cash cover in relation to those amounts) outstanding under the ancillary facilities to be immediately due and payable; or • instruct the New Facilities Security Agent to enforce the Collateral. 143

Governing Law The New Senior Facilities Agreement will be governed by French law except for the meaning of certain words or expressions in the definitions and provisions related to insolvency or used for the purpose of the incurrence covenants, which are construed in accordance with New York law.

Hedging Arrangements We hedge our variable rate loan interest flows with interest rate swaps. Swaps are derivatives that hedge cash flows. They are marked to market on our balance sheet. Under the New Senior Facilities Agreement, the Company agreed to, within 90 days from the Issue Date, enter into one or more hedging agreements to hedge against interest rate fluctuations in respect of 50% of the aggregate commitment under the New Senior Credit Facilities.

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DESCRIPTION OF THE NOTES The following is a description of the €370.0 million in aggregate principal amount of 7.00% Notes due 2019 (the “Notes”). The Notes will be issued by Financière Gaillon 8 S.A., a société anonyme organized and established under the laws of France (the “Issuer”), and will be secured on a senior basis by a first-priority security interest, subject to certain perfection requirements and any Permitted Collateral Liens, over (i) the ordinary shares of Kaufman & Broad S.A. (the “Company”) held by the Issuer and (ii) until the first interest payment date, a designated bank account of the Issuer containing a portion of the proceeds of the Offering corresponding to the amount of interest payable on the Notes for the first interest period. In this “Description of the Notes,” the “Issuer” refers only to Financière Gaillon 8 S.A., and any successor obligor to Financière Gaillon 8 S.A. under the Indenture and the Notes, and not to any of its Subsidiaries, and the “Company” refers only to Kaufman & Broad S.A., and any successor to Kaufman & Broad S.A., and not to any of its Subsidiaries. The gross proceeds of the offering of the Notes sold on the Issue Date will be used to (i) repay in full the Issuer’s obligations under various credit facilities governed by the Existing Senior Facilities Agreement, (ii) pre-fund interest payable on the Notes for the first interest period and for general corporate purposes, (iii) repurchase 216,839,458 preference shares from CA-CIB for a total purchase price of €17.0 million and (iii) pay fees, costs and expenses incurred in connection with the Offering, as set forth in these Listing Particulars under the caption “Use of Proceeds.” Simultaneously, the Company’s obligations under separate credit facilities governed by the Existing Senior Facilities Agreement will be refinanced in full using amounts borrowed under the New Senior Facilities Agreement, pursuant to which new term facilities (the “New Senior Credit Facilities”) and a new revolving credit facility (the “New Revolving Credit Facility”) will be extended to the Company. As of the Issue Date, the Company’s obligations under the New Senior Facilities Agreement will not be guaranteed or secured by the Issuer. The Issuer will issue the Notes under an indenture, to be dated as of the Issue Date (the “Indenture”), among, inter alios, the Issuer and The Law Debenture Trust Corporation p.l.c., as trustee (the “Trustee”), security agent (the “Security Agent”) and beneficiary of the parallel debt (the “Parallel Debt Creditor”). The Notes will be issued in private transactions that are not subject to the registration requirements of the Securities Act. See “Transfer Restrictions.” The terms of the Notes include those stated in the Indenture. The Indenture will provide that the Trustee has, and by accepting the Notes each Holder will be deemed to have, consented to the repurchase of the Capital Stock of the Issuer from CA-CIB pursuant to the CA-CIB Heads of Terms as contemplated in these Listing Particulars under the caption “Use of Proceeds” and waive any right it may have to oppose any such capital reduction under Article L.225-205 of the French Commercial Code and to take any actions in respect there to, including to request any collateral. The Indenture will not be qualified under, or be subject to the terms of, the Trust Indenture Act of 1939, as amended. The Notes are subject to all such terms pursuant to the provisions of the Indenture, and holders of the Notes are referred to the Indenture for a statement thereof. To the extent any Intercreditor Agreement is entered into in the future, the Indenture and the Notes will be subject to the terms thereof. The following is a summary of the material provisions of the Indenture and the Notes and refers to an Intercreditor Agreement and Security Documents and does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all provisions of the aforementioned documents in their entirety. Because this is a summary, it may not contain all the information that is important to you. You should read the Indenture, the form of Notes, the Security Documents and any other applicable agreement in their entirety because they, and not this description, will define your rights as a holder of the Notes. Copies of the Indenture, the Security Documents and any Intercreditor Agreement entered into in the future will be made available as described under “Listing and General Information.” You can find the definitions of certain terms used in this description under “—Certain Definitions.” The registered holder of a Note will be treated as the owner of it for all purposes. In general, only registered holders will have rights under the Indenture.

Brief Description of the Notes The Notes and Ranking The Notes: • will be senior obligations of the Issuer and will rank equal in right of payment with all of the Issuer’s existing and future obligations that are not subordinated in right of payment to the Notes; 145

• will be secured by the Collateral described below on a first-priority basis subject to certain perfection requirements, any Permitted Collateral Liens and other limitations described herein and in “Risk Factors—Risks Related to our Indebtedness and the Notes—The security interests in the Collateral may be subject to certain defenses that may adversely affect their validity and enforceability” and “Risk Factors—Risks Related to our Indebtedness and the Notes—Enforcement of the security interests in the Collateral consisting of French listed or unlisted shares may be subject to certain limitations;” • will be senior in right of payment to any Subordinated Indebtedness of the Issuer; • will be effectively senior in right of payment to any existing or future unsecured obligations of the Issuer, to the extent of the value of the Collateral that is available to satisfy the obligations under the Notes; • will be effectively subordinated to the Issuer’s existing and future secured Indebtedness that is secured by property or assets that do not secure the Notes, to the extent of the value of such property and assets securing such Indebtedness; and • will be structurally subordinated to any existing or future obligations of the Issuer’s subsidiaries, as described under “Risk Factors—Risks Related to our Indebtedness and the Notes—The Notes will be structurally subordinated to the liabilities of the Issuer’s subsidiaries, and the Notes will not be guaranteed by any of the Issuer’s subsidiaries as of the Issue Date.” On the Issue Date, none of the Issuer’s Subsidiaries will guarantee the Notes. Under certain circumstances following the Issue Date, including in order to comply with the “Additional Guarantees” covenant, one or more Restricted Subsidiaries of the Issuer (in such capacity, a “Guarantor”) may unconditionally and irrevocably guarantee the Notes, on a joint and several basis (each, a “Note Guarantee” and, collectively, the “Note Guarantees”). Each such Note Guarantee will be a general unsecured obligation of the relevant Guarantor and will be senior to or pari passu in right of payment with the Indebtedness of that Guarantor giving rise to the obligation to procure such Note Guarantee. Each such Note Guarantee will rank senior in right of payment to any future subordinated Indebtedness of the relevant Guarantor and will be effectively subordinated to any existing and future secured Indebtedness of that Guarantor to the extent of the value of the assets securing such Indebtedness. The Issuer is a holding company with its operations conducted through its Subsidiaries. Therefore, the Issuer depends on the income and cash flow of its Subsidiaries, and dividends, loans and other distributions from such Subsidiaries, to meet its obligations, including its obligations under the Notes. Claims of creditors of non-Guarantor Subsidiaries (which, as of the Issue Date, are all Subsidiaries of the Issuer) including trade creditors, secured creditors and creditors holding Indebtedness and Guarantees issued by those Subsidiaries, and claims of stockholders of those Subsidiaries that are not direct Subsidiaries of the Issuer generally will have priority with respect to the assets and earnings of those Subsidiaries over the claims of creditors of the Issuer, including holders of the Notes. The Notes therefore will be effectively subordinated to creditors (including trade creditors and the creditors of the Company’s obligations under the New Senior Facilities Agreement and certain Hedging Agreements) of Subsidiaries of the Issuer (other than any Guarantors) and stockholders of indirect Subsidiaries of the Issuer (other than any Guarantors). As of November 30, 2013, on a pro forma basis after giving effect to the issuance of the Notes and the Refinancing and the application of the gross proceeds therefrom as described herein under “Use of Proceeds”, the total third-party gross financial debt of the Issuer’s Subsidiaries on a consolidated basis would have been €150.6 million (consisting of amounts drawn under the New Senior Credit Facilities and other short-term debt), and the New Revolving Credit Facility will provide for additional borrowings by the Company of up to an aggregate of €50.0 million. See “Capitalization” and “Description of Certain Financing Arrangements.” Although the Indenture will limit the incurrence of Indebtedness, Disqualified Stock and Preferred Stock of Restricted Subsidiaries, the limitation is subject to a number of significant exceptions. Moreover, the Indenture will not impose any limitation on the incurrence by Restricted Subsidiaries of liabilities that are not considered Indebtedness, Disqualified Stock or Preferred Stock under the Indenture. See “—Certain Covenants—Limitation on Indebtedness.”

Principal and Maturity The Issuer will issue €370.0 million in aggregate principal amount of Notes in this Offering on the Issue Date. The Notes will mature on September 30, 2019. The Notes will be issued in minimum denominations of €100,000 and in integral multiples of €1,000 in excess thereof.

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The rights of holders of beneficial interests in the Notes to receive the payments on such Notes will be subject to applicable procedures of Euroclear and Clearstream. If the due date for any payment in respect of any Notes is not a Business Day, the Holder thereof will not be entitled to payment of the amount due until the next succeeding Business Day, and will not be entitled to any further interest or other payment as a result of any such delay.

Interest Interest on the Notes will accrue at the rate of 7.00% per annum and will be payable, in cash, semi-annually in arrears on March 31 and September 30 of each year, commencing on September 30, 2014, to holders of record on the immediately preceding March 15 and September 15, respectively. Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of original issuance. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months. Each interest period shall end on (but not include) the relevant interest payment date.

Additional Notes The Issuer may issue an unlimited principal amount of additional Notes having identical terms and conditions as the Notes (the “Additional Notes”), so long as such issuance is in compliance with the covenants contained in the Indenture, including the covenant restricting the Incurrence of Indebtedness (as described below under “—Certain Covenants— Limitation on Indebtedness”). The Notes issued in this Offering and, if issued, any Additional Notes will be treated as a single class for all purposes under the Indenture, including, without limitation, with respect to waivers, amendments, redemptions and offers to purchase, except as otherwise provided for in the Indenture. Unless the context otherwise requires, in this “Description of the Notes,” references to the “Notes” include the Notes and any Additional Notes that are actually issued.

Methods of Receiving Payments on the Notes Principal, premium, if any, interest and Additional Amounts (as defined below), if any, on the Global Notes (as defined below) will be payable at the specified office or agency of one or more Paying Agents; provided that all such payments with respect to Notes represented by one or more Global Notes registered in the name of or held by a nominee of a common depositary for Euroclear or Clearstream, as applicable, will be made by wire transfer of immediately available funds to the account specified by the Holder or Holders thereof. Principal, premium, if any, interest and Additional Amounts, if any, on any certificated securities (“Definitive Registered Notes”) will be payable at the specified office or agency of one or more Paying Agents in the City of London maintained for such purposes. In addition, interest on the Definitive Registered Notes may be paid by check mailed to the person entitled thereto as shown on the register for the Definitive Registered Notes. See “—Paying Agent and Registrar for the Notes.”

Paying Agent and Registrar for the Notes The Issuer will maintain one or more Paying Agents for the Notes, including a Paying Agent in the City of London (the “Principal Paying Agent”). The Issuer will undertake, to the extent possible, to use reasonable efforts to maintain a Paying Agent in a member state of the European Union that will not be obliged to withhold or deduct tax pursuant to the European Council Directive 2003/48/EC regarding the taxation of savings income (the “Savings Directive”) or any other directive implementing the conclusions of the ECOFIN Council meeting of 26 and 27 November 2000 on the taxation of savings income, or any law implementing, or complying with or introduced in order to conform to, such directive. The initial Paying Agent for the Notes will be Deutsche Bank AG, London branch. The Issuer will also maintain one or more registrars (each, a “Registrar”). The Issuer will also maintain a transfer agent in Luxembourg. The initial Registrar and transfer agent will be Deutsche Bank Luxembourg S.A. The Registrar will maintain a register reflecting ownership of Definitive Registered Notes outstanding from time to time, if any, and will make payments on and facilitate transfers of Definitive Registered Notes on behalf of the Issuer. Each transfer agent shall perform the functions of a transfer agent. The Issuer may change any Paying Agent, Registrar or transfer agent for the Notes without prior notice to the holders of the Notes. The Issuer or any of its Subsidiaries may act as a paying agent or registrar in respect of the Notes. For so long as the Notes are listed on the Official List of the Irish Stock Exchange and admitted for trading on the Global Exchange Market and the rules of the Irish Stock Exchange so require, the Issuer will publish a notice of any change of Paying Agent, Registrar 147

or transfer agent in a newspaper having a general circulation in Dublin (which is expected to be The Irish Times) or, to the extent and in the manner permitted by such rules, post such notice on the official website of the Irish Stock Exchange (www.ise.ie).

Transfer and Exchange The Notes will initially be issued in the form of registered notes in global form without interest coupons, as follows: • The Notes sold within the United States to qualified institutional buyers pursuant to Rule 144A under the Securities Act will initially be represented by global notes in registered form without interest coupons attached (the “144A Global Notes”). • The Notes sold outside the United States to non-U.S. persons pursuant to Regulation S under the Securities Act will initially be represented by global notes in registered form without interest coupons attached (the “Regulation S Global Notes” and, together with the 144A Global Notes, the “Global Notes”). • The Global Notes will, upon issuance, be deposited with and registered in the name of the nominee of the common depositary for the accounts of Euroclear and Clearstream. Ownership of interests in the Global Notes (“Book-Entry Interests”) will be limited to persons that have accounts with Euroclear or Clearstream or persons that may hold interests through such participants. Ownership of interests in the Book- Entry Interests and transfers thereof will be subject to the restrictions on transfer and certification requirements summarized below and described more fully under “Notice to Investors.” In addition, transfers of Book-Entry Interests between participants in Euroclear or participants in Clearstream will be effected by Euroclear or Clearstream, as applicable, pursuant to customary procedures and subject to the applicable rules and procedures established by Euroclear or Clearstream, as applicable, and their respective participants. Book-Entry Interests in the 144A Global Notes may be transferred to a person who takes delivery in the form of Book- Entry Interests in the Regulation S Global Notes only upon delivery by the transferor of a written certification (in the form provided in the Indenture) to the effect that such transfer is being made in accordance with Regulation S under the Securities Act. Prior to 40 days after the date of initial issuance of the Notes, ownership of Book-Entry Interests in Regulation S Global Notes will be limited to persons that have accounts with Euroclear or Clearstream or persons who hold interests through Euroclear or Clearstream. During the 40-day distribution compliance period, Book-Entry Interests in the Regulation S Global Notes may be transferred only to non-U.S. persons in compliance with Regulation S of the Securities Act or to persons whom the transferor reasonably believes are “qualified institutional buyers” within the meaning of Rule 144A under the Securities Act in a transaction meeting the requirements of Rule 144A or otherwise in accordance with applicable transfer restrictions and any applicable securities laws of any state of the United States or any other jurisdiction. Subject to the foregoing, Regulation S Book-Entry Interests may be transferred to a person who takes delivery in the form of 144A Book-Entry Interests only upon delivery by the transferor of a written certification (in the form provided in the Indenture) to the effect that such transfer is being made to a person who the transferor reasonably believes is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A or otherwise in accordance with the transfer restrictions described under “Notice to Investors” and in accordance with any applicable securities law of any other jurisdiction. Any Book-Entry Interest that is transferred as described in the immediately preceding paragraphs will, upon transfer, cease to be a Book-Entry Interest in the Global Note from which it was transferred and will become a Book-Entry Interest in the Global Note to which it was transferred. Accordingly, from and after such transfer, it will become subject to all transfer restrictions, if any, and other procedures applicable to Book-Entry Interests in the Global Note to which it was transferred. If Definitive Registered Notes are issued, they will be issued only in minimum denominations of €100,000 aggregate principal amount and integral multiples of €1,000 in excess thereof, upon receipt by the Registrar of instructions relating thereto and any certificates, opinions and other documentation required by the Indenture. It is expected that such instructions will be based upon directions received by Euroclear or Clearstream, as applicable, from the participant that owns the relevant Book-Entry Interests. Definitive Registered Notes issued in exchange for a Book-Entry Interest will, except as set forth in the Indenture or as otherwise determined by the Issuer to be in compliance with applicable law, be subject to, and will have a legend with respect to, the restrictions on transfer summarized below and described more fully under “Notice to Investors.”

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Subject to the restrictions on transfer referred to above, Notes issued as Definitive Registered Notes may be transferred or exchanged, in whole or in part, in minimum denominations of €100,000 in aggregate principal amount and integral multiples of €1,000 in excess thereof. In connection with any such transfer or exchange, the Indenture will require the transferring or exchanging Holder to, among other things, furnish appropriate endorsements and transfer documents, to furnish information regarding the account of the transferee at Euroclear or Clearstream, as applicable, to furnish certain certificates and opinions, and to pay any taxes, duties and governmental charges in connection with such transfer or exchange. Any such transfer or exchange will be made without charge to the Holder, other than any taxes, duties and governmental charges payable in connection with such transfer. Notwithstanding the foregoing, the Issuer is not required to register the transfer or exchange of any Notes: (1) for a period of 15 days prior to any date fixed for the redemption of such Notes; (2) for a period of 15 days immediately prior to the date fixed for selection of such Notes to be redeemed in part; (3) for a period of 15 days prior to the record date with respect to any interest payment date applicable to such Notes; or (4) which the Holder has tendered (and not withdrawn) for repurchase in connection with a Change of Control Offer or an Asset Disposition Offer. The Issuer, the Trustee, the Registrar, the transfer agent and the Paying Agent will be entitled to treat the Holder of a Note as the owner of it for all purposes.

Restricted Subsidiaries and Unrestricted Subsidiaries As of the Issue Date, all of the Issuer’s Subsidiaries will be Restricted Subsidiaries. In the circumstances described below under “—Certain Definitions—Unrestricted Subsidiary,” the Issuer will be permitted to designate Restricted Subsidiaries (other than the Company) as Unrestricted Subsidiaries. Unrestricted Subsidiaries will not be subject to any of the restrictive covenants in the Indenture.

Security The Collateral Pursuant to the Security Documents, on the Issue Date, the Issuer will grant in favor of the Security Agent as Parallel Debt Creditor, liens and security interests on a first-priority basis, subject to certain perfection requirements and any Permitted Collateral Liens, over (i) the ordinary shares of the Company owned by the Issuer, which, as of the Issue Date, represents 87.95% of the share capital and 94.24% of the voting rights in the Company (the “KB Share Pledge”) and (ii) until the first interest payment date, a designated bank account of the Issuer (the “Designated Bank Account”) containing a portion of the proceeds of the Offering corresponding to the amount of interest payable on the Notes for the first interest period (the “Designated Bank Account Pledge”). The lien and security interest on the Designated Bank Account will be released by the Security Agent at the time such interest payment is made. Any additional security interests that may in the future be created to secure obligations under the Notes would also constitute Collateral. Subject to certain conditions, including compliance with the covenant described under “—Certain Covenants— Limitation on Liens” and “—Certain Covenants—No Impairment of Security Interest,” the Issuer will be permitted to grant security over the Collateral in connection with future issuances of its Indebtedness or Indebtedness of its Restricted Subsidiaries, including any Additional Notes, in each case, as permitted under the Indenture.

Administration of Security and Enforcement of Liens The Security Documents and the Collateral will be administered by the Security Agent for the benefit of the holders of the Notes and holders of other obligations secured by the Collateral. The enforcement of the Security Documents will be subject to the procedures set forth in the Security Documents and any Intercreditor Agreement. The ability of holders of the Notes to realize upon the Collateral will be subject to various bankruptcy law limitations in the event of the Issuer’s or another grantor’s bankruptcy. See “Limitations on Validity and Enforceability of the Security Interests and Certain Insolvency Law Considerations” and “Risk Factors—Risks Related to our Indebtedness and the Notes— The security interests in the Collateral may be subject to certain defenses that may adversely affect their validity and enforceability,” “Risk Factors—Risks Related to our Indebtedness and the Notes—Enforcement of the security interests in 149

the Collateral consisting of French listed or unlisted shares may be subject to certain limitations” and “Risk Factors—Risks Related to our Indebtedness and the Notes—French insolvency laws may not be as favorable to you as the insolvency laws of the United States or other countries.” In addition, the enforcement of the Collateral will be limited to the maximum amount permitted under applicable corporate benefit, financial assistance and other laws. As a result of these limitations, the enforceable amounts of the Issuer’s obligation under the Notes could be significantly less than the total amounts payable with respect to the Notes, or a grantor of security interests may have reduced or effectively no obligation under its security interests. See “Limitations on Validity and Enforceability of the Security Interests” and “Risk Factors—Risks Related to our Indebtedness and the Notes—The security interests in the Collateral may be subject to certain defenses that may adversely affect their validity and enforceability” and “Risk Factors—Risks Related to our Indebtedness and the Notes—Enforcement of the security interests in the Collateral consisting of French listed or unlisted shares may be subject to certain limitations.” Due to the laws and other jurisprudence governing the creation and perfection of security interests in France, the Indenture will provide for the creation of a “parallel debt” obligation in favor of the Security Agent as Parallel Debt Creditor, and the security interests in the Collateral will secure such parallel debt obligation (and not the obligations under the Notes and the Indenture). The parallel debt construct has not been tested under the laws of France. See “Risk Factors—Risks Relating to Our Indebtedness and the Notes—Security interests in the Collateral will be granted to the Security Agent rather than directly to the holders of the Notes. The ability of the Security Agent to enforce the Collateral may be restricted by local law and other procedural constraints” and “Limitations on Validity and Enforceability of the Security Interests and Certain Insolvency Law Considerations.” No appraisals of any of the Collateral have been prepared by or on behalf of the Issuer in connection with the issuance of the Notes. There can be no assurance that the proceeds from the sale of the Collateral would be sufficient to satisfy the obligations owed to the holders of the Notes. By its nature, some or all of the Collateral may be illiquid. Accordingly, there can be no assurance that the Collateral can be sold in a short period of time, if at all. In addition, the Security Documents will place, and any future Intercreditor Agreement is expected to place, limitations on the ability of the Security Agent to cause the sale of some of the Collateral. These limitations may include requirements that some or all of the Collateral be disposed of only pursuant to procedures established by applicable law. The Trustee for the Notes has, and by accepting a Note, each Holder will be deemed to have: • irrevocably agreed that the Security Agent as Parallel Debt Creditor holds the Parallel Debt (as defined below) in respect of the obligations of the Issuer under the Notes and appointed The Law Debenture Trust Corporation p.l.c., as Security Agent, to act as its agent under the Security Documents and other relevant documents to which it is or will become a party (including any future Intercreditor Agreement); and • irrevocably authorized the Security Agent as Parallel Debt Creditor to (i) perform the duties and exercise the rights, powers and discretions that are specifically given to it under the Security Documents or other documents to which it is or will become a party (including any future Intercreditor Agreement), together with any other incidental rights, power and discretions; and (ii) execute each document, waiver, modification, amendment, renewal or replacement expressed to be executed by the Security Agent on its behalf.

Priority Pursuant to one or more intercreditor agreements which may be entered into after the Issue Date in accordance with the covenant entitled “Intercreditor Agreements,” the Collateral may be pledged to secure other Indebtedness, including obligations under Hedging Agreements. The relative priority with regard to the Collateral as between the Trustee and the Holders under the Indenture and certain future Indebtedness permitted to be secured by the Collateral will be established by the terms of an Intercreditor Agreement and the Security Documents. See “—Certain Covenants—Intercreditor Agreement.”

Description of Security Documents The Security Documents, on the Issue Date, will secure parallel debt obligations owed to the Security Agent (the “Parallel Debt”) which will be in the same amount, and payable at the same time, as obligations of the Issuer under the Notes and the Indenture (the “Principal Obligations”). Any payment in respect of the Principal Obligations shall discharge the corresponding Parallel Debt and any payment in respect of the Parallel Debt shall discharge the corresponding Principal Obligations. The Security Documents will be entered into by the Issuer and the Security Agent. The Indenture will provide that obligations under the Notes and the Indenture will be secured by a Lien on the Collateral until such obligations have been discharged. However, such Lien may be released in circumstances provided below under “—Release of Liens.” The

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Security Agent shall not be permitted to assign, transfer or dispose of the Parallel Debt other than to a successor, as described in more detail in the Indenture. The Indenture will provide that only the Security Agent as Parallel Debt Creditor will have the right to enforce the Security Documents. As a consequence, holders of the Notes will not be entitled to take enforcement action in respect of the Collateral, except through the Trustee, who will provide instructions to the Security Agent for any enforcement action in accordance with the terms of the Indenture. Subject to the terms of the Security Document governing the KB Share Pledge and until the occurrence of an acceleration event under the Indenture, (i) the Issuer will have the right to remain in possession and retain exclusive control of the Collateral securing the Notes and (ii) in respect of the shares that are part of the Collateral, the Issuer will be entitled to exercise all voting rights, to receive and retain all dividends and to remove all such dividends or any other income deriving therefrom from the pledged Collateral account. Under the Security Documents governing the Bank Account Pledge, the Issuer undertakes not (i) to close the account or (ii) to withdraw any amount therefrom until it has paid the amount of interest owed for the first interest period under the Notes.

Release of Liens The Security Agent will take any action required to effectuate any release of Collateral under any one or more of the following circumstances: (1) upon payment in full of principal, interest and all other obligations in respect of the Notes issued under the Indenture or discharge or defeasance thereof as provided in “—Defeasance” and “—Satisfaction and Discharge”; (2) upon release of a Note Guarantee (with respect to the Liens securing such Note Guarantee granted by such Guarantor) in accordance with the Indenture; (3) in connection with any disposition of Collateral, directly or indirectly, to (a) any Person other than the Issuer or any of its Restricted Subsidiaries (but excluding any transaction subject to “—Certain Covenants—Merger and Consolidation”) that is permitted by the Indenture (with respect to the Lien on such Collateral) or (b) the Issuer or any Restricted Subsidiary, provided that in the case of this clause (b) subject to applicable laws, the relevant Collateral remains subject to, or otherwise becomes subject to, a Lien in favor of the Notes; (4) as described under “—Amendments and Waivers” and “—Certain Covenants—No Impairment of Security Interest;” (5) automatically without any action by the Trustee, if the Lien granted in favor of the Indebtedness that gave rise to the obligation to grant the Lien over such Collateral is released;

(6) in a transaction that complies with the provisions described in “—Certain Covenants—Merger and Consolidation;” (7) if the Issuer designates any Restricted Subsidiary to be an Unrestricted Subsidiary in accordance with the applicable provisions of the Indenture, the release of Liens on property and assets and capital stock of such Restricted Subsidiary; (8) in connection with certain enforcement actions taken under any Intercreditor Agreement; and (9) with respect to the lien on the Designated Bank Account, upon the first interest payment of the Notes. Each of these releases shall be effected by the Security Agent and, to the extent it is necessary, the Trustee without the consent of the Holders. The Issuer and its Restricted Subsidiaries may also, among other things, without any release or consent by the Trustee or the Security Agent, conduct ordinary course activities with respect to Collateral, including, without limitation, (i) selling or otherwise disposing of, in any transaction or series of related transactions, any property subject to the Lien under the Security Documents which has become worn out, defective or obsolete or not used or useful in the business; (ii) selling, transferring or otherwise disposing of current assets in the ordinary course of business; and (iii) any other action permitted by the Security Documents or any Intercreditor Agreement.

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Optional Redemption Except as set forth herein and under “—Redemption for Taxation Reasons,” the Notes are not redeemable at the option of the Issuer. At any time prior to March 31, 2016, the Issuer may redeem the Notes in whole or in part, at its option, upon not less than 10 nor more than 60 days’ prior notice at a redemption price equal to 100% of the principal amount of such Notes plus the Applicable Premium as of, and accrued and unpaid interest and Additional Amounts, if any, to the redemption date. At any time and from time to time on or after March 31, 2016, the Issuer may redeem the Notes in whole or in part, at its option, upon not less than 10 nor more than 60 days’ prior notice at a redemption price equal to the percentage of principal amount set forth below plus accrued and unpaid interest to the redemption date:

Twelve-month period commencing in Percentage 2016 ...... 103.500% 2017 ...... 101.750% 2018 and thereafter ...... 100.000% At any time and from time to time prior to March 31, 2016, the Issuer may redeem the Notes upon not less than 10 nor more than 60 days’ prior notice with the net cash proceeds from one or more Equity Offerings at a redemption price equal to 107.00% of the principal amount thereof plus accrued and unpaid interest to the redemption date, in an aggregate principal amount for all such redemptions not to exceed 40% of the original aggregate principal amount of the Notes (including Additional Notes), provided that: (1) in each case the redemption takes place not later than 180 days after the closing of the related Equity Offering; and (2) not less than 60% of the original aggregate principal amount of the Notes being redeemed (including the principal amount of any Additional Notes) remain outstanding immediately thereafter. Notice of any redemption upon any Equity Offering may be given prior to the completion thereof.

General Any redemption and notice of redemption (other than a redemption for taxation reasons) may, at the Issuer’s discretion, be subject to the satisfaction of one or more conditions precedent (including, without limitation, in the case of a redemption related to an Equity Offering, the consummation of such Equity Offering and, in the case of a redemption of the Notes, the incurrence of Indebtedness the proceeds of which will be used to redeem the Notes).

If the Issuer effects an optional redemption of the Notes, it will, for so long as the Notes are listed on the Official List of the Irish Stock Exchange and admitted for trading on the Global Exchange Market and the rules of the Irish Stock Exchange so require, inform the Irish Stock Exchange of such optional redemption and confirm the aggregate principal amount of the Notes that will remain outstanding immediately after such redemption. If the optional redemption date is on or after an interest record date and on or before the related interest payment date, the accrued and unpaid interest will be paid to the Person in whose name the Note is registered at the close of business on such record date, and no additional interest will be payable to Holders whose Notes will be subject to redemption by the Issuer.

Sinking Fund The Issuer will not be required to make mandatory redemption payments or sinking fund payments with respect to the Notes.

Selection and Notice If less than all of the Notes are to be redeemed at any time, the Registrar will select the Notes for redemption in compliance with the requirements of the principal securities exchange, if any, on which the Notes are listed, as certified to the Registrar by the Issuer, and in compliance with the requirements of Euroclear or Clearstream, or if the Notes are not so listed or such exchange prescribes no method of selection and the Notes are not held through Euroclear or Clearstream or Euroclear or Clearstream prescribes no method of selection, on a method that most closely approximates a pro rata basis in respect of 152

the Notes; provided, however, that no Note of €100,000 in aggregate principal amount or less shall be redeemed in part and only Notes in integral multiples of €1,000 will be redeemed. Neither the Trustee nor the Registrar will be liable for any selections made by it in accordance with this paragraph. So long as any Notes are listed on the Official List of the Irish Stock Exchange and admitted for trading on the Global Market Exchange and the rules of the Irish Stock Exchange so require, any such notice to the holders of the relevant Notes shall to the extent and in the manner permitted by such rules be posted on the official website of the Irish Stock Exchange (www.ise.ie) and in addition to such release, not less than 10 days nor more than 60 days prior to the redemption date, the Issuer will mail, if the Notes are in definitive certificated form, or at the expense of the Issuer, cause to be mailed, such notice to Holders by first-class mail, postage prepaid, at their respective addresses as they appear on the registration books of the Registrar. If the Notes are in global form, the Issuer will transmit such notice to the Holders via Euroclear and Clearstream. Such notice of redemption may also be posted on the website of the Irish Stock Exchange (www.ise.ie), to the extent and in the manner permitted by the rules of the Irish Stock Exchange. If any Note is to be redeemed in part only, the notice of redemption that relates to that Note shall state the portion of the principal amount thereof to be redeemed, in which case a new Note consisting of a portion of the original Note will be issued in the name of the Holder thereof upon cancellation of the original Note. In the case of a Global Note, an appropriate notation will be made on such Note to decrease the principal amount thereof to an amount equal to the unredeemed portion thereof. Subject to the terms of the applicable redemption notice (including any conditions contained therein), Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on Notes or portions of them called for redemption.

Redemption for Taxation Reasons The Issuer or Successor Issuer, as defined below, may redeem the Notes in whole, but not in part, at any time upon giving not less than 10 nor more than 60 days’ notice to the Holders of the Notes (which notice will be irrevocable) at a redemption price equal to 100% of the principal amount thereof, together with accrued and unpaid interest, if any, to the date fixed for redemption (a “Tax Redemption Date”) (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date) and all Additional Amounts (see “—Withholding Taxes”), if any, then due and which will become due on the Tax Redemption Date as a result of the redemption or otherwise, if any, if the Issuer, Successor Issuer or any Guarantor determine in good faith that, as a result of: (1) any change in, or amendment to, the law or treaty (or any regulations, protocols or rulings promulgated thereunder) of a Relevant Taxing Jurisdiction (as defined below); or

(2) any change in, or amendment to, or the introduction of, an official position regarding the application, administration or interpretation of such laws, treaties, regulations or rulings (including a holding, judgment or order by a court of competent jurisdiction) of a Relevant Taxing Jurisdiction (each of the foregoing in clauses (1) and (2), a “Change in Tax Law”), the Issuer, Successor Issuer or any Guarantor are, or on the next interest payment date in respect of the Notes would be, required to pay any Additional Amounts, and such obligation cannot be avoided by taking reasonable measures available to the Issuer, Successor Issuer or any Guarantor (including, for the avoidance of doubt, the appointment of a new Paying Agent where this would be reasonable and not result in any material legal or regulatory burden or any significant additional costs, but not including assignment of the obligation to make payment with respect to the Notes). In the case of redemption due to withholding as a result of a Change in Tax Law in a jurisdiction that is a Relevant Taxing Jurisdiction at the date of these Listing Particulars, such Change in Tax Law must become effective on or after the date of these Listing Particulars. In the case of redemption due to withholding as a result of a Change in Tax Law in a jurisdiction that becomes a Relevant Taxing Jurisdiction after the date of these Listing Particulars, such Change in Tax Law must become effective on or after the date the jurisdiction becomes a Relevant Taxing Jurisdiction, unless the Change in Tax Law would have applied to the predecessor of the Successor Issuer. Notice of redemption for taxation reasons will be published in accordance with the procedures described under “—Selection and Notice.” Notwithstanding the foregoing, no such notice of redemption will be given (a) earlier than 90 days prior to the earliest date on which the Payor would be obliged to make such payment of Additional Amounts if a payment in respect of the Notes were then due and (b) unless at the time such notice is given, such obligation to pay such Additional Amounts remains in effect. Prior to the publication or mailing of any notice of redemption of the Notes pursuant to the foregoing, the Issuer or Successor Issuer will deliver to the Trustee (a) an Officer’s Certificate stating that it is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to its right so to redeem have been satisfied and that it would not be able to avoid the obligation to pay Additional Amounts by taking reasonable measures available to it and (b) an opinion of an independent tax counsel of recognized standing to the effect that 153

the Issuer, Successor Issuer or any Guarantor has or have been or will become obligated to pay Additional Amounts as a result of a Change in Tax Law. The Trustee will accept such Officer’s Certificate and opinion as sufficient evidence of the satisfaction of the conditions precedent described above, without further inquiry, in which event it will be conclusive and binding on the Holders. The foregoing will apply mutatis mutandis to any jurisdiction in which any Successor Issuer or Guarantor is incorporated or organized or any political subdivision or taxing authority or agency thereof or therein.

Withholding Taxes All payments made by or on behalf of the Issuer, a Successor Issuer or any Guarantor (each, a “Payor”) under or with respect to the Notes or any Note Guarantees will be made free and clear of and without withholding or deduction for, or on account of, any Taxes unless the withholding or deduction of such Taxes is then required by law. If any deduction or withholding for, or on account of, any Taxes imposed, collected, assessed or levied by or on behalf of: (1) any jurisdiction from or through which payment on any such Note or Note Guarantee is made by or on behalf of the Issuer, Successor Issuer, any Guarantor or their agents, or any political subdivision or Governmental Authority thereof or therein having the power to tax (including any Paying Agents); or (2) the Republic of France or any other jurisdiction in which the Payor is incorporated or organized, resident for tax purposes, or any political subdivision or Governmental Authority thereof or therein having the power to tax (each of clause (1) and (2), a “Relevant Taxing Jurisdiction”), will at any time be required by law from any payments made by a Payor with respect to any Note or Note Guarantee, including payments of principal, redemption price, premium, if any, or interest, the Payor will pay (together with such payments) such additional amounts (the “Additional Amounts”) as may be necessary in order that the net amounts received in respect of such payments by the Holders or the Trustee, as the case may be, after such withholding or deduction (including any such deduction or withholding from such Additional Amounts), will equal the amounts which would have been received in respect of such payments on any such Note or Note Guarantee in the absence of such withholding or deduction; provided, however, that no such Additional Amounts will be payable for or on account of: (1) any Taxes that would not have been so imposed but for the existence of any present or former connection between the relevant Holder or the beneficial owner of a Note (or between a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of power over the relevant Holder or beneficial owner, if the relevant Holder or beneficial owner is an estate, nominee, trust, partnership, limited liability company or corporation) and the Relevant Taxing Jurisdiction (including being a citizen or resident or national of, or carrying on a business or maintaining a permanent establishment in, or being physically present in, the Relevant Taxing Jurisdiction) but excluding, in each case, any connection arising solely from the acquisition, ownership or holding of such Note or Note Guarantee or the receipt of any payment in respect thereof; (2) any Taxes to the extent that they are imposed or withheld by reason of the failure by the Holder or the beneficial owner of a Note to comply with a written request of the Payor addressed to the Holder, after reasonable notice, to provide any applicable certification, information, documents or other evidence concerning the nationality, residence or identity of the Holder or such beneficial owner or to make any applicable declaration or similar claim or satisfy any other applicable reporting requirement relating to such matters, which is required by a statute, treaty, regulation or administrative practice of the Relevant Taxing Jurisdiction as a precondition to exemption from, or reduction in the rate of withholding or deduction of, all or part of such Taxes; (3) any Taxes that are payable otherwise than by deduction or withholding from a payment of the principal of, premium, if any, or interest, if any, on the Notes or any Note Guarantee; (4) any estate, inheritance, gift, sales, value added, use, transfer, personal property or similar tax, assessment or other governmental charge or any excise tax imposed on transfers; (5) any Taxes that are required to be deducted or withheld on a payment to an individual and that are required to be made pursuant to Savings Directive or any other Directive implementing the conclusions of the ECOFIN Council meeting of November 26-27, 2000 on taxation of savings income or any law implementing or complying with, or introduced in order to conform to such Directives;

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(6) any Taxes imposed in connection with a Note presented for payment (where presentation is permitted or required for payment) by or on behalf of a Holder or beneficial owner who would have been able to avoid such Tax by presenting the relevant Note to, or otherwise accepting payment from, another paying agent; (7) any Taxes withheld or deducted pursuant to Sections 1471 through 1474 of the Code (or any amended or successor version of such Sections), any U.S. Treasury regulations promulgated thereunder, any official interpretations thereof or any agreements or treaties (including any law implementing any such agreement or treaty) entered into in connection with the implementation thereof; or (8) any combination of the above. Such Additional Amounts will also not be payable (x) if the payment could have been made without such deduction or withholding if the beneficiary of the payment had presented the Note for payment (where presentation is permitted or required for payment) within 15 days after the relevant payment was first made available for payment to the Holder or (y) where, had the beneficial owner of the Note been the Holder, such beneficial owner would not have been entitled to payment of Additional Amounts by reason of any of clauses (1) to (8) inclusive above. In addition, no Additional Amounts shall be paid with respect to any payment to any Holder who is a fiduciary or a partnership or other than the sole beneficial owner of such Notes to the extent that the beneficiary or settlor with respect to such fiduciary, the member of such partnership or the beneficial owner of such Notes would not have been entitled to Additional Amounts had such beneficiary, settlor, member or beneficial owner held such Notes directly. The Payor will (i) make any required withholding or deduction and (ii) remit the full amount deducted or withheld to the relevant taxing authority in the Relevant Taxing Jurisdiction in accordance with applicable law. The Payor will use all reasonable efforts to obtain certified copies of tax receipts evidencing the payment of any Taxes so deducted or withheld from each Relevant Taxing Jurisdiction imposing such Taxes, in such form as provided in the ordinary course by the Relevant Taxing Jurisdiction and as is reasonably available to the Issuer and will provide such certified copies to the Trustee. Such copies shall be made available to the Holders upon reasonable request; provided, however, that in no event shall the Payor be required to disclose any information that it reasonably deems to be confidential.

If any Payor will be obligated to pay Additional Amounts under or with respect to any payment made on any Note or Note Guarantee, at least 30 days prior to the date of such payment, the Payor will deliver to the Trustee an Officer’s Certificate stating the fact that Additional Amounts will be payable and the amount so payable and such other information necessary to enable the Paying Agent to pay Additional Amounts to Holders on the relevant payment date (unless such obligation to pay Additional Amounts arises less than 45 days prior to the relevant payment date, in which case the Payor may deliver such Officer’s Certificate as promptly as practicable). The Trustee will be entitled to rely solely on such Officer’s Certificate as conclusive proof that such payments are necessary. Wherever in either the Indenture, any Note Guarantees or this “Description of the Notes” there are mentioned, in any context: (1) the payment of principal; (2) purchase prices in connection with a purchase of Notes; (3) interest; or (4) any other amount payable on or with respect to any of the Notes, such reference shall be deemed to include payment of Additional Amounts as described under this heading to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof. The Payor will pay any present or future stamp, court or documentary Taxes, or any other property or similar taxes, charges or levies that arise in any Relevant Taxing Jurisdiction from the execution, delivery, registration or enforcement of any Notes, the Indenture, the Security Documents or any other document or instrument in relation thereto (other than a transfer of the Notes), and the Payor agrees to indemnify the Holders for any such taxes paid by such Holders. The obligations under this Section “—Withholding Taxes” will survive any termination, defeasance or discharge of the Indenture and will apply mutatis mutandis to any jurisdiction in which any Successor Issuer or successor to a Guarantor is organized, incorporated or resident for tax purposes, any jurisdiction from or through which payment on any such Note or Note Guarantee is made by or on behalf of such person, or any political subdivision or taxing authority or agency thereof or therein. 155

Change of Control If a Change of Control occurs, subject to the terms hereof, each Holder will have the right to require the Issuer to repurchase all or part (in integral multiples of €1,000; provided that Notes of €100,000 or less may only be redeemed in whole and not in part) of such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, however, that the Issuer shall not be obliged to repurchase Notes as described under this “—Change of Control” section in the event and to the extent that it has unconditionally exercised its right to redeem all of the Notes as described under “—Optional Redemption” or all conditions to such redemption have been satisfied or waived. Unless the Issuer has unconditionally exercised its right to redeem all the Notes as described under “—Optional Redemption” or all conditions to such redemption have been satisfied or waived, no later than the date that is 60 days after any Change of Control, the Issuer will transmit a notice (the “Change of Control Offer”) to each Holder of any such Notes, with a copy to the Trustee: (1) stating that a Change of Control has occurred or may occur and that such Holder has the right to require the Issuer to purchase such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount of such Notes plus accrued and unpaid interest to, but not including, the date of purchase (subject to the right of Holders of record on a record date to receive interest on the relevant interest payment date) (the “Change of Control Payment”); (2) stating the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed) (the “Change of Control Payment Date”);

(3) describing the circumstances and relevant facts regarding the transaction or transactions that constitute the Change of Control; (4) describing the procedures determined by the Issuer, consistent with the Indenture, that a Holder must follow in order to have its Notes repurchased; and (5) if such notice is mailed prior to the occurrence of a Change of Control, stating that the Change of Control Offer is conditional on the occurrence of such Change of Control. On the Change of Control Payment Date, if the Change of Control shall have occurred, the Issuer will, to the extent lawful: (1) accept for payment all Notes properly tendered pursuant to the Change of Control Offer; (2) deposit with the Principal Paying Agent an amount equal to the Change of Control Payment in respect of all Notes so tendered; (3) deliver or cause to be delivered to the Trustee an Officer’s Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Issuer in the Change of Control Offer; (4) in the case of Global Notes, deliver, or cause to be delivered, to the Principal Paying Agent the Global Notes in order to reflect thereon the portion of such Notes or portions thereof that have been tendered to and purchased by the Issuer; and (5) in the case of Definitive Registered Notes, deliver, or cause to be delivered, to the relevant Registrar for cancellation all Definitive Registered Notes accepted for purchase by the Issuer. If any Definitive Registered Notes have been issued, the relevant Paying Agent will promptly mail to each Holder of Definitive Registered Notes so tendered the Change of Control Payment for such Notes, and the Trustee will promptly authenticate (or cause to be authenticated) and mail (or cause to be transferred by book entry) to each Holder of Definitive Registered Notes a new Note equal in aggregate principal amount to the unpurchased portion of the Notes surrendered, if any; provided that each such new Note will be in an aggregate principal amount that is at least €100,000 and integral multiples of €1,000 in excess thereof. If and for so long as the Notes are listed on the Official List of the Irish Stock Exchange and admitted for trading on the Global Exchange Market and the rules of the Irish Stock Exchange so require, the Issuer will publish notices relating to the Change of Control Offer as soon as reasonably practicable after the Change of Control Payment Date in a leading newspaper 156

of general circulation in Dublin (which is expected to be The Irish Times) or, to the extent and in the manner permitted by such rules, post such notices on the official website of the Irish Stock Exchange (www.ise.ie). The Change of Control provisions described above will be applicable whether or not any other provisions of the Indenture are applicable. Except as described above with respect to a Change of Control, the Indenture will not contain provisions that permit the Holders to require that the Issuer repurchase or redeem the Notes in the event of a takeover, recapitalization or similar transaction. The existence of a Holder’s right to require the Issuer to repurchase such Holder’s Notes upon the occurrence of a Change of Control may deter a third party from seeking to acquire the Issuer or its Subsidiaries in a transaction that would constitute a Change of Control. The Issuer will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Issuer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. Notwithstanding anything to the contrary contained herein, a Change of Control Offer may be made in advance of a Change of Control, conditioned upon the consummation of such Change of Control, if a definitive agreement is in place for the Change of Control, or an offer or other transaction that if consummated would result in a Change of Control has been publicly announced and, if applicable, not withdrawn, at the time the Change of Control Offer is made. The Issuer will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other applicable securities laws or regulations (or rules of any exchange on which the Notes are then listed) in connection with the repurchase of Notes pursuant to this covenant. To the extent that the provisions of any securities laws or regulations (or exchange rules) conflict with provisions of the Indenture, the Issuer will comply with the applicable securities laws and regulations (or exchange rules) and will not be deemed to have breached its obligations under the Change of Control provisions of the Indenture by virtue of the conflict. Under the New Senior Facilities Agreement, the lenders may request the repayment of their loans thereunder upon the occurrence of a change of control. Future debt of the Issuer or its Subsidiaries may prohibit the Issuer from purchasing the Notes in the event of a Change of Control or provide that a Change of Control is a default or requires repurchase or prepayment upon a Change of Control. Moreover, the exercise by the Holders of their right to require the Issuer to purchase the Notes could cause a default under, or require a repurchase of, other debt, even if the Change of Control itself does not, due to the financial effect of the purchase on the Issuer. Finally, the Issuer’s ability to pay cash to the Holders following the occurrence of a Change of Control may be limited by the Issuer’s then existing financial resources. There can be no assurance that sufficient funds will be available when necessary to make the required purchase of the Notes. See “Risk Factors—Risks Related to our Indebtedness and the Notes— Although we will be required to offer to repurchase the Notes upon a change of control, we may not have sufficient financial resources to purchase all Notes that are tendered.” Holders of the Notes may not be entitled to require the Issuer to purchase their Notes in certain circumstances involving a significant change in the composition of the Issuer’s board of directors, including in connection with a proxy contest, where the Issuer’s board of directors initially publicly opposes the election of a dissident slate of directors, but subsequently approves such directors for the purposes of the Indenture governing the Notes. This may result in a change in the composition of the board of directors that, but for such subsequent approval, would have otherwise constituted a Change of Control requiring a repurchase offer under the terms of the Indenture governing the Notes. Furthermore, in the event that a Change of Control is also a Specified Change of Control Event, the Issuer will not have to make a Change of Control Offer. See “Certain Definitions—Change of Control” and “—Certain Definitions—Specified Change of Control Event.” The definition of “Change of Control” includes a disposition of all or substantially all of the property and assets of the Issuer and its Restricted Subsidiaries taken as a whole to specified other Persons. Although there is limited case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase “substantially all” under applicable law. Accordingly, in certain circumstances there may be a degree of uncertainty as to whether a particular transaction would involve a disposition of “all or substantially all” of the property or assets of a Person. As a result, it may be unclear as to whether a Change of Control has occurred and whether a Holder may require the Issuer to make an offer to repurchase the Notes as described above. The provisions of the Indenture relating to the Issuer’s obligation to make an offer to repurchase the Notes as a result of a Change of Control may be waived or modified with the written consent of Holders of a majority in outstanding aggregate principal amount of the Notes either prior to or after the occurrence of a Change of Control. 157

Certain Covenants Limitation on Indebtedness The Issuer will not, and will not permit any of its Restricted Subsidiaries to, Incur any Indebtedness (including Acquired Indebtedness); provided, however, that the Issuer and any of its Restricted Subsidiaries may Incur Indebtedness if on the date of such Incurrence and after giving pro forma effect thereto (including pro forma application of the proceeds thereof) as if the additional Indebtedness had been Incurred at the beginning of such four quarter period, the Consolidated Fixed Charge Coverage Ratio for the Issuer’s most recently ended four fiscal quarters for which internal consolidated financial statements of the Issuer are available immediately preceding the date on which such additional Indebtedness is Incurred is at least 2.0 to 1.0; provided further, however, that any Restricted Subsidiaries of the Issuer may only Incur Indebtedness pursuant to this paragraph if on the date of such Incurrence and after giving pro forma effect thereto (including pro forma application of the proceeds thereof) as if the additional Indebtedness had been Incurred at the beginning of such four quarter period, the Consolidated Net Leverage Ratio of the Company for its most recently ended four fiscal quarters for which internal consolidated financial statements of the Company are available immediately preceding the date on which such additional Indebtedness is Incurred does not exceed 2.0 to 1.0, it being understood that any amounts available and permitted to be Incurred by any Restricted Subsidiary of the Issuer under clauses (1), (11) and (15) of the second paragraph of this covenant at the time of such Incurrence shall be deemed to have been Incurred and be outstanding for purposes of calculating the Consolidated Net Leverage Ratio pursuant to this paragraph. The first paragraph of this covenant will not prohibit the Incurrence of the following Indebtedness: (1) Indebtedness Incurred pursuant to any Credit Facility (including letters of credit or bankers’ acceptances issued or created under any Credit Facility), and Guarantees in respect of such Indebtedness in a maximum aggregate principal amount at any time outstanding not exceeding (a) the greater of (i) €220 million and (ii) 21% of Total Assets, plus (b) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing; (2) (a) Guarantees by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or any Restricted Subsidiary so long as the Incurrence of such Indebtedness being guaranteed is permitted under the terms of the Indenture; or (b) without limiting the covenant described under “—Limitation on Liens,” Indebtedness arising by reason of any Lien granted by or applicable to such Person securing Indebtedness of the Issuer or any Restricted Subsidiary so long as the Incurrence of such Indebtedness is permitted under the terms of the Indenture; (3) Indebtedness of the Issuer owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Issuer or any Restricted Subsidiary; provided, however, that: (a) if the Issuer is the obligor under such Indebtedness, such Indebtedness is unsecured and ((i) except in respect of the intercompany current liabilities incurred in the ordinary course of business in connection with the cash management operations of the Issuer and its Restricted Subsidiaries and (ii) only to the extent legally permitted (the Issuer and its Restricted Subsidiaries having completed all procedures required in the reasonable judgment of directors or officers of the obligee or obligor to protect such Persons from any penalty or civil or criminal liability in connection with the subordination of such Indebtedness)) expressly subordinated in right of payment to prior payment in full in cash (whether upon Stated Maturity, acceleration or otherwise) and the performance in full of its obligations under the Notes and the Indenture; and (b) (i) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being beneficially held by a Person other than the Issuer or a Restricted Subsidiary of the Issuer and (ii) any sale or other transfer of any such Indebtedness to a Person other than the Issuer or a Restricted Subsidiary of the Issuer, shall be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be; (4) Indebtedness represented by (a) the Notes (other than any Additional Notes) and any Guarantees thereof, (b) any Indebtedness (other than Indebtedness described in clauses (1) and (3) of this paragraph) existing on the Issue Date, (c) Refinancing Indebtedness Incurred in respect of any Indebtedness described in this clause (4) or

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clause (5) of this paragraph or Incurred pursuant to the first paragraph of this covenant and (d) Management Advances; (5) Indebtedness of any Person Incurred and outstanding on the date on which such Person becomes a Restricted Subsidiary of the Issuer or another Restricted Subsidiary of the Issuer or is merged, consolidated, amalgamated or otherwise combined with (including pursuant to any acquisition of assets and assumption of related liabilities) the Issuer or any Restricted Subsidiary (other than Indebtedness Incurred to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Person became a Restricted Subsidiary or was otherwise acquired by the Issuer or a Restricted Subsidiary); provided, however, (i) if the Person who Incurred such Indebtedness is, or is merged, consolidated, amalgamated or otherwise combined with, the Issuer, then at the time of such acquisition or other transaction (w) the Issuer would have been able to Incur €1.00 of additional Indebtedness pursuant to the first paragraph of this covenant after giving effect to the Incurrence of such Indebtedness pursuant to this clause (5) or (x) the Consolidated Fixed Charge Coverage Ratio of the Issuer after giving effect to the Incurrence of such Indebtedness pursuant to this clause (5) would not be less than it was immediately prior to giving effect to such acquisition or other transaction and the Incurrence of such Indebtedness and (ii) if the Person who Incurred such Indebtedness is, becomes, or is merged, consolidated, amalgamated or otherwise combined with, a Restricted Subsidiary of the Issuer, then at the time of such acquisition or other transaction (y) such Restricted Subsidiary would have been able to Incur €1.00 of additional Indebtedness pursuant to the first paragraph of this covenant after giving effect to the Incurrence of such Indebtedness pursuant to this clause (5) or (z) the Consolidated Net Leverage Ratio of the Company after giving effect to the Incurrence of such Indebtedness pursuant to this clause (5) would not be more than it was immediately prior to giving effect to such acquisition or other transaction and the Incurrence of such Indebtedness, it being understood that any amounts available and permitted to be Incurred by any Restricted Subsidiary of the Issuer under clauses (1), (11) and (15) of the second paragraph of this covenant at the time of such Incurrence shall be deemed to have been Incurred and be outstanding (both immediately prior to and after giving effect to such acquisition or other transaction and the Incurrence of such Indebtedness) for purposes of calculating the Consolidated Net Leverage Ratio pursuant to this clause (5); (6) Indebtedness under Currency Agreements, Interest Rate Agreements and Commodity Hedging Agreements entered into for bona fide hedging purposes of the Issuer or its Restricted Subsidiaries and not for speculative purposes (as determined in good faith by an Officer or the Board of Directors of the Issuer); (7) Indebtedness represented by Capitalized Lease Obligations or Purchase Money Obligations, and in each case any Refinancing Indebtedness in respect thereof, in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (7) and then outstanding, will not exceed at any time the greater of (A) €5 million and (B) 0.5% of Total Assets; (8) Indebtedness in respect of (a) workers’ compensation claims, self-insurance obligations, performance, indemnity, surety, judgment, appeal, advance payment, customs, VAT or other tax or other guarantees or other similar bonds, instruments or obligations and completion guarantees and warranties provided by the Issuer or a Restricted Subsidiary or relating to liabilities, obligations or guarantees Incurred in the ordinary course of business or in respect of any governmental requirement, (b) letters of credit, bankers’ acceptances, guarantees or other similar instruments or obligations issued or relating to liabilities or obligations Incurred in the ordinary course of business or in respect of any governmental requirement; provided, however, that upon the drawing of such letters of credit or similar instruments, the obligations are reimbursed within 30 days following such drawing, (c) the financing of insurance premiums in the ordinary course of business and (d) any customary cash management, cash pooling or netting or setting off arrangements in the ordinary course of business; (9) Indebtedness arising from agreements providing for customary guarantees, indemnification, obligations in respect of earn-outs or other adjustments of purchase price or, in each case, similar obligations, in each case, Incurred or assumed in connection with the acquisition or disposition of any business or assets or Person or any Capital Stock of a Subsidiary (other than Guarantees of Indebtedness Incurred by any Person acquiring or disposing of such business or assets or such Subsidiary for the purpose of financing such acquisition or disposition); provided that, in the case of a disposition, the maximum liability of the Issuer and its Restricted Subsidiaries in respect of all such Indebtedness shall at no time exceed the gross proceeds, including the fair market value of non-cash proceeds (measured at the time received and without giving effect to any subsequent changes in value), actually received by the Issuer and its Restricted Subsidiaries in connection with such disposition;

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(10) (a) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within 10 Business Days of Incurrence; (b) take-or-pay obligations, customer deposits and advance payments received in the ordinary course of business from customers for goods or services purchased in the ordinary course of business; (c) Indebtedness owed on a short-term basis of no longer than 30 days to banks and other financial institutions incurred in the ordinary course of business of the Issuer and its Restricted Subsidiaries with such banks or financial institutions that arises in connection with ordinary banking arrangements to manage cash balances of the Issuer and its Restricted Subsidiaries; and (d) Indebtedness incurred by a Restricted Subsidiary in connection with bankers’ acceptances, discounted bills of exchange or the discounting or factoring of receivables for credit management of bad debt purposes, in each case incurred or undertaken in the ordinary course of business on arm’s-length commercial terms on a recourse basis; (11) Indebtedness of the Issuer or any Restricted Subsidiary in an aggregate outstanding principal amount which, when taken together with the aggregate principal amount of all other Indebtedness Incurred pursuant to this clause (11) and then outstanding, will not exceed the greater of (i) €35 million and (ii) 3.5% of Total Assets; (12) Indebtedness of the Issuer in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (12) and then outstanding, will not exceed 100% of the Net Cash Proceeds received by the Issuer from the issuance or sale (other than to a Restricted Subsidiary) of its Subordinated Shareholder Funding or its Capital Stock (other than Disqualified Stock, Designated Preference Shares or an Excluded Contribution) or otherwise contributed to the equity (other than through the issuance of Disqualified Stock, Designated Preference Shares or an Excluded Contribution) of the Issuer, in each case, subsequent to the Issue Date; provided, however, that (i) any such Net Cash Proceeds that are so received or contributed shall be excluded for purposes of making Restricted Payments under the first paragraph and clauses (1), (6) and (10) of the second paragraph of the covenant described below under “— Limitation on Restricted Payments” to the extent the Issuer incurs Indebtedness in reliance thereon, (ii) any Net Cash Proceeds that are so received or contributed shall be excluded for purposes of Incurring Indebtedness pursuant to this clause (12) to the extent the Issuer or any of its Restricted Subsidiaries makes a Restricted Payment under the first paragraph and clauses (1), (6) and (10) of the second paragraph of the covenant described below under “—Limitation on Restricted Payments” in reliance thereon; (iii) such Indebtedness will be incurred within six months of the date on which the Net Cash Proceeds are received or contributed and (iv) such Indebtedness does not mature or require any amortization, redemption or other repayment of principal or any sinking fund payment prior to the Stated Maturity of the Notes (other than through conversion or exchange of such funding into Capital Stock (other than Disqualified Stock)); (13) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing; (14) Indebtedness under daylight borrowing facilities incurred in connection with any refinancing of Indebtedness (including by way of set-off or exchange) so long as any such Indebtedness is repaid within three days of the date on which such Indebtedness is Incurred; (15) Indebtedness Incurred under local lines of credit or working capital facilities pursuant to this clause (15) and then outstanding not exceeding €30 million; and (16) Guarantees provided by the Issuer or any Restricted Subsidiary in connection with any joint venture engaging in one or more Programs; provided that the aggregate principal amount of such Guarantees Incurred pursuant to this clause (16) and then outstanding will not exceed the greater of (i) €30 million and (ii) 3% of Total Assets. For purposes of determining compliance with, and the outstanding principal amount of any particular Indebtedness Incurred pursuant to and in compliance with, this covenant: (1) Subject to clause (2) below, in the event that Indebtedness meets the criteria of more than one of the types of Indebtedness described in the first and second paragraphs of this covenant, the Issuer, in its sole discretion, will classify, and may from time to time reclassify, such item of Indebtedness and only be required to include the amount and type of such Indebtedness in one or more of the clauses of the second paragraph or the first paragraph of this covenant; 160

(2) all Indebtedness Incurred under the New Senior Facilities Agreement on the Issue Date or under the New Revolving Credit Facility shall be deemed Incurred under clause (1) of the second paragraph of the description of this covenant and not the first paragraph or clause (4)(b) of the second paragraph of the description of this covenant;

(3) Guarantees of, or obligations in respect of letters of credit, bankers’ acceptances or other similar instruments or any “parallel debt” obligation relating to, or Liens securing, Indebtedness that is otherwise included in the determination of a particular amount of Indebtedness shall not be included; (4) if obligations in respect of letters of credit, bankers’ acceptances or other similar instruments are Incurred pursuant to any Credit Facility and are being treated as Incurred pursuant to clause (1), (7), (11) or (12) or (15) of the second paragraph above or the first paragraph above and the letters of credit, bankers’ acceptances or other similar instruments relate to other Indebtedness, then such other Indebtedness shall not be included; (5) the principal amount of any Disqualified Stock of the Issuer or a Restricted Subsidiary, or Preferred Stock of a Restricted Subsidiary, will be equal to the greater of the maximum mandatory redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the liquidation preference thereof; (6) Indebtedness permitted by this covenant need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this covenant permitting such Indebtedness; and (7) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined on the basis of IFRS. Accrual of interest, accrual of dividends, the accretion of accreted value, the accretion or amortization of original issue discount, the payment of interest in the form of additional Indebtedness, the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock or the reclassification of commitments or obligations not treated as Indebtedness due to a change in IFRS will not be deemed to be an Incurrence of Indebtedness for purposes of the covenant described under this “—Limitation on Indebtedness.” The amount of any Indebtedness outstanding as of any date shall be calculated as specified under the definition of “Indebtedness.” If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary of the Issuer as of such date. For purposes of determining compliance with any euro-denominated restriction on the Incurrence of Indebtedness, the euro equivalent of the aggregate principal amount of Indebtedness denominated in another currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term Indebtedness, or, at the option of the Issuer, first committed, in the case of Indebtedness Incurred under a revolving credit facility; provided that (a) if such Indebtedness is Incurred to refinance other Indebtedness denominated in a currency other than euro, and such refinancing would cause the applicable euro-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such euro-denominated restriction shall be deemed not to have been exceeded so long as the aggregate principal amount of such Refinancing Indebtedness does not exceed the aggregate principal amount of such Indebtedness being refinanced; (b) the euro equivalent of the aggregate principal amount of any such Indebtedness outstanding on the Issue Date shall be calculated based on the relevant currency exchange rate in effect on the Issue Date; and (c) if and for so long as any such Indebtedness is subject to a Currency Agreement with respect to the currency in which such Indebtedness is denominated covering principal and interest on such Indebtedness, the amount of such Indebtedness, if denominated in euro, will be the amount of the principal payment required to be made under such Currency Agreement and, otherwise, the euro equivalent of such amount plus the euro equivalent of any premium which is at such time due and payable but is not covered by such Currency Agreement. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Issuer or a Restricted Subsidiary may Incur pursuant to this covenant shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.

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Limitation on Restricted Payments The Issuer will not, and will not permit any of its Restricted Subsidiaries, directly or indirectly, to: (1) declare or pay any dividend or make any distribution on or in respect of the Issuer’s or any Restricted Subsidiary’s Capital Stock (including any payment in connection with any merger or consolidation involving the Issuer or any of its Restricted Subsidiaries) except: (a) dividends or distributions payable in Capital Stock of the Issuer (other than Disqualified Stock) or in options, warrants or other rights to purchase such Capital Stock of the Issuer or in Subordinated Shareholder Funding; and (b) dividends or distributions payable to the Issuer or a Restricted Subsidiary (and, in the case of any such Restricted Subsidiary making such dividend or distribution, to holders of its Capital Stock other than the Issuer or another Restricted Subsidiary on no more than a pro rata basis, measured by value); (2) purchase, redeem, retire or otherwise acquire for value any Capital Stock of the Issuer or any direct or indirect Parent of the Issuer held by Persons other than the Issuer or a Restricted Subsidiary of the Issuer (other than in exchange for Capital Stock of the Issuer (other than Disqualified Stock)); (3) make any principal payment on, or purchase, repurchase, redeem, defease or otherwise acquire or retire for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment, any Subordinated Indebtedness (other than (a) any such payment, purchase, repurchase, redemption, defeasance or other acquisition or retirement or in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case, due within one year of the date of purchase, repurchase, redemption, defeasance or other acquisition or retirement and (b) any Indebtedness Incurred pursuant to clause (3) of the second paragraph of the covenant described under “—Limitation on Indebtedness”); (4) make any payment (other than by capitalization of interest) on or with respect to, or purchase, repurchase, redeem, defease or otherwise acquire or retire for value, any Subordinated Shareholder Funding; or (5) make any Restricted Investment in any Person (any such dividend, distribution, payment, purchase, redemption, repurchase, defeasance, other acquisition, retirement or Restricted Investment referred to in clauses (1) through (5) are referred to herein as a “Restricted Payment”), if at the time the Issuer or such Restricted Subsidiary makes such Restricted Payment: (a) a Default shall have occurred and be continuing (or would result immediately thereafter therefrom); (b) the Issuer is not able to Incur an additional €1.00 of Indebtedness pursuant to the first paragraph under the “— Limitation on Indebtedness” covenant after giving effect, on a pro forma basis, to such Restricted Payment; or (c) the aggregate amount of such Restricted Payment and all other Restricted Payments made subsequent to the Issue Date (and not returned or rescinded) (including Permitted Payments permitted below by clauses (6), (10), (11), (12) and (17) of the next succeeding paragraph, but excluding all other Restricted Payments permitted by the next succeeding paragraph) would exceed the sum of (without duplication): (i) 50% of Consolidated Net Income of the Issuer for the period (treated as one accounting period) from the first day of the first fiscal quarter commencing prior to the Issue Date to the end of the most recent fiscal quarter ending prior to the date of such Restricted Payment for which internal consolidated financial statements of the Issuer are available (or, in the case such Consolidated Net Income is a deficit, minus 100% of such deficit); (ii) 100% of the aggregate Net Cash Proceeds, and the fair market value (as determined in accordance with the last paragraph of this covenant) of property or assets or marketable securities, received by the Issuer from the issue or sale of its Capital Stock (other than Disqualified Stock or Designated Preference Shares) or Subordinated Shareholder Funding subsequent to the Issue Date or otherwise contributed to the equity (other than through the issuance of Disqualified Stock or Designated Preference Shares) of the Issuer subsequent to the Issue Date (other than (x) Net Cash Proceeds or property or assets or marketable securities received from an issuance or sale of such Capital Stock to a Restricted Subsidiary or an employee stock ownership plan or trust established by the Issuer or any Subsidiary of the Issuer for the benefit of its employees to the extent funded by the Issuer or any Restricted Subsidiary, (y) Net Cash 162

Proceeds or property or assets or marketable securities to the extent that any Restricted Payment has been made from such proceeds in reliance on clause (6) of the next succeeding paragraph and (z) Excluded Contributions); (iii) 100% of the aggregate Net Cash Proceeds, and the fair market value (as determined in accordance with the last paragraph of this covenant) of property or assets or marketable securities, received by the Issuer or any Restricted Subsidiary from the issuance or sale (other than to the Issuer or a Restricted Subsidiary of the Issuer or an employee stock ownership plan or trust established by the Issuer or any Subsidiary of the Issuer for the benefit of its employees to the extent funded by the Issuer or any Restricted Subsidiary) by the Issuer or any Restricted Subsidiary subsequent to the Issue Date of any Indebtedness that has been converted into or exchanged for Capital Stock of the Issuer (other than Disqualified Stock or Designated Preference Shares) or Subordinated Shareholder Funding (plus the amount of any cash, and the fair market value (as determined in accordance with the last paragraph of this covenant) of property or assets or marketable securities, received by the Issuer or any Restricted Subsidiary upon such conversion or exchange); (iv) the amount equal to the net reduction in Restricted Investments made by the Issuer or any of its Restricted Subsidiaries resulting from: (A) repurchases, redemptions or other acquisitions or retirements of any such Restricted Investment, proceeds realized upon the sale or other disposition to a Person other than the Issuer or a Restricted Subsidiary of any such Restricted Investment, repayments of loans or advances or other transfers of assets (including by way of dividend, distribution, interest payments or returns of capital) to the Issuer or any Restricted Subsidiary; or (B) the redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries or the merger or consolidation of an Unrestricted Subsidiary into the Issuer or any Restricted Subsidiary (valued at the fair market value of the Issuer’s Restricted Investment in such Subsidiary) or the transfer of all of the assets of such Unrestricted Subsidiary to the Issuer or a Restricted Subsidiary (valued at the fair market value of the property received by the Issuer or any Restricted Subsidiary), which amount, in each case under this clause (iv), was included in the calculation of the amount of Restricted Payments referred to in the first sentence of this clause (c); provided, however, that no amount will be included in Consolidated Net Income for purposes of the preceding clause (i) to the extent that it is (at the Issuer’s option) included under this clause (iv); and (v) the amount of the cash and the fair market value (as determined in accordance with the last paragraph of this covenant) of property or assets or of marketable securities received by the Issuer or any of its Restricted Subsidiaries in connection with: (A) the sale or other disposition (other than to the Issuer or a Restricted Subsidiary or an employee stock ownership plan or trust established by the Issuer or any Subsidiary of the Issuer for the benefit of its employees to the extent funded by the Issuer or any Restricted Subsidiary) of Capital Stock of an Unrestricted Subsidiary of the Issuer; and (B) any dividend or distribution made by an Unrestricted Subsidiary or Affiliate to the Issuer or a Restricted Subsidiary; provided, however, that no amount will be included in Consolidated Net Income of the Issuer for purposes of the preceding clause (i) to the extent that it is (at the Issuer’s option) included under this clause (v), provided, that upon a Specified Change of Control Event, all amounts calculated pursuant to this clause (c) shall be reset to zero and all references to the Issue Date in this clause (c) shall thereafter refer to the date of such Specified Change of Control Event. The foregoing provisions will not prohibit any of the following (collectively, “Permitted Payments”): (1) the making of any Restricted Payment in exchange for, or out of the proceeds of the substantially concurrent sale or issuance of, Capital Stock of the Issuer (other than Disqualified Stock or Designated Preference Shares), Subordinated Shareholder Funding or a substantially concurrent contribution to the equity (in each case, other 163

than (i) to a Restricted Subsidiary or an employee stock ownership plan or trust established by the Issuer or any Subsidiary of the Issuer for the benefit of its employees to the extent funded by the Issuer or any Restricted Subsidiary, (ii) through the issuance of Disqualified Stock or Designated Preference Shares or through an Excluded Contribution and (iii) to the extent that any Restricted Payment has been made from such proceeds in reliance on clause (6) below) of the Issuer; provided, however, that to the extent so applied, the Net Cash Proceeds, or fair market value (as determined in accordance with the preceding paragraph) of property or assets or of marketable securities, from such sale of Capital Stock, Subordinated Shareholder Funding or such contribution will be excluded from clause (c)(ii) of the preceding paragraph; (2) any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Subordinated Indebtedness made by exchange for, or out of the proceeds of the substantially concurrent Incurrence of, Refinancing Indebtedness permitted to be Incurred pursuant to the covenant described under “—Limitation on Indebtedness” above; (3) any purchase, repurchase, redemption, defeasance or other acquisition, cancellation or retirement of (a) Preferred Stock of the Issuer or a Restricted Subsidiary made by exchange for or out of the proceeds of the substantially concurrent sale of Preferred Stock of the Issuer or a Restricted Subsidiary, as the case may be, that, in each case, is permitted or not prohibited to be Incurred pursuant to the covenant described under “—Limitation on Indebtedness” above, and that in each case as applicable, constitutes Refinancing Indebtedness and (b) preference shares or other Capital Stock of the Issuer pursuant to the CA-CIB Heads of Terms as contemplated in these Listing Particulars under the caption “Use of Proceeds”; (4) any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Subordinated Indebtedness: (a) (i) from Net Available Cash to the extent permitted under “—Limitation on Sales of Assets and Subsidiary Stock” below, but only if the Issuer shall have first complied with the terms described under “— Limitation on Sales of Assets and Subsidiary Stock” and purchased all Notes tendered pursuant to any offer to repurchase all the Notes required thereby, prior to purchasing, repurchasing, redeeming, defeasing or otherwise acquiring or retiring such Subordinated Indebtedness and (ii) at a purchase price not greater than 100% of the principal amount of such Subordinated Indebtedness plus accrued and unpaid interest; (b) to the extent required by the agreement governing such Subordinated Indebtedness, following the occurrence of a Change of Control (or other similar event described therein as a “change of control”), but only (i) if the Issuer shall be required to make a Change of Control Offer under “—Change of Control” and shall have first complied with the terms described under “—Change of Control” and purchased all Notes tendered pursuant to the offer to repurchase all the Notes required thereby, prior to purchasing, repurchasing, redeeming, defeasing or otherwise acquiring or retiring such Subordinated Indebtedness and (ii) at a purchase price not greater than 101% of the principal amount of such Subordinated Indebtedness plus accrued and unpaid interest; or (c) (i) consisting of Acquired Indebtedness (other than Indebtedness Incurred (A) to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Person became a Restricted Subsidiary or was otherwise acquired by the Issuer or a Restricted Subsidiary or (B) otherwise in connection with or contemplation of such acquisition) and (ii) at a purchase price not greater than 100% of the principal amount of such Subordinated Indebtedness plus accrued and unpaid interest and any premium required by the terms of any Acquired Indebtedness; (5) any dividends paid within, or redemption or repurchase consummated within, 60 days after the date of declaration or the giving of the redemption or repayment notice if at such date of declaration or notice such dividend or redemption or repayment, as the case may be, would have complied with this covenant; (6) the purchase, repurchase, redemption, defeasance or other acquisition, cancellation or retirement for value of Capital Stock of any Parent, the Issuer or any Restricted Subsidiary (including any options, warrants or other rights in respect thereof) and loans, advances, dividends or distributions by the Issuer to any Parent to permit any Parent to purchase, repurchase, redeem, defease or otherwise acquire, cancel or retire for value Capital Stock of any Parent, the Issuer or any Restricted Subsidiary (including any options, warrants or other rights in respect thereof), or payments to purchase, repurchase, redeem, defease or otherwise acquire, cancel or retire for value Capital Stock of any Parent, the Issuer or any Restricted Subsidiary (including any options, warrants or other 164

rights in respect thereof), in each case from Management Investors; provided that such payments, loans, advances, dividends or distributions do not exceed an amount (net of repayments of any such loans or advances) equal to (i) €5 million in any calendar year (with unused amounts in any calendar year being carried over to the next two succeeding calendar years) plus (ii) the Net Cash Proceeds received by the Issuer or its Restricted Subsidiaries since the Issue Date (including through receipt of proceeds from the issuance or sale of its Capital Stock or Subordinated Shareholder Funding to a Parent) from, or as a contribution to the equity (in each case under this clause (6), other than through the issuance of Disqualified Stock or Designated Preference Shares or through an Excluded Contribution) of the Issuer from, the issuance or sale to Management Investors of Capital Stock (including any options, warrants or other rights in respect thereof), to the extent such Net Cash Proceeds are not included in any calculation under clause (c)(ii) of the first paragraph describing this covenant; (7) the declaration and payment of dividends to holders of any class or series of Disqualified Stock, or of any Preferred Stock of a Restricted Subsidiary, Incurred in accordance with the terms of the covenant described under “—Limitation on Indebtedness” above; (8) purchases, repurchases, redemptions, defeasances or other acquisitions or retirements of Capital Stock deemed to occur upon the exercise of stock options, warrants or other rights in respect thereof if such Capital Stock represents a portion of the exercise price thereof; (9) dividends, loans, advances or distributions to any Parent or other payments by the Issuer or any Restricted Subsidiary in amounts equal to (without duplication): (a) the amounts required for any Parent to pay any Parent Expenses or any Related Taxes; or (b) the amounts constituting or to be used for purposes of making payments (i) of fees and expenses Incurred in connection with the Refinancing, or (ii) to the extent specified in clauses (2), (3), (5), (7) (without duplication with Related Taxes and only to the extent that such payments do not exceed the amount of tax that the Issuer and its Restricted Subsidiaries would owe without taking into account any Tax Sharing Agreement or membership in any consolidated group for tax, accounting or cash pooling or management purposes, in each case with such Parent or Unrestricted Subsidiary and provided that the related tax liabilities of the Issuer and its Restricted Subsidiaries are relieved thereby), (11) and (12) of the second paragraph under “—Limitation on Affiliate Transactions;” (10) so long as no Default or Event of Default has occurred and is continuing (or would result from), the declaration and payment by the Issuer of, or loans, advances, dividends or distributions to any Parent to pay, dividends on the common stock or common equity interests of the Issuer or any Parent following a Public Offering of such common stock or common equity interests, in an amount not to exceed in any fiscal year the greater of (a) 6% of the Net Cash Proceeds received by the Issuer from such Public Offering or contributed to the equity (other than through the issuance of Disqualified Stock or Designated Preference Shares or through an Excluded Contribution) of the Issuer or loaned as Subordinated Shareholder Funding to the Issuer and (b) following an Initial Public Offering, an amount equal to the greater of (i) the greater of (A) 7% of the Market Capitalization and (B) 7% of the IPO Market Capitalization; provided that after giving pro forma effect to such loans, advances, dividends or distributions, the Consolidated Net Leverage Ratio of the Issuer shall be equal to or less than 3.00 to 1.00 and (ii) the greater of (A) 5% of the Market Capitalization and (B) 5% of the IPO Market Capitalization; provided that after giving pro forma effect to such loans, advances, dividends or distributions, the Consolidated Net Leverage Ratio of the Issuer shall be equal to or less than 3.50 to 1.00; (11) so long as no Default or Event of Default has occurred and is continuing (or would result from), Restricted Payments (including loans or advances) in an aggregate amount outstanding at any time not to exceed €30 million;

(12) payments by the Issuer, or loans, advances, dividends or distributions to any Parent to make payments, to holders of Capital Stock of the Issuer or any Parent in lieu of the issuance of fractional shares of such Capital Stock; provided, however, that any such payment, loan, advance, dividend or distribution shall not be for the purpose of evading any limitation of this covenant or otherwise to facilitate any dividend or other return of capital to the holders of such Capital Stock (as determined in good faith by an Officer or the Board of Directors of the Issuer); (13) Investments in an aggregate amount outstanding at any time not to exceed the aggregate cash amount of Excluded Contributions, or consisting of non-cash Excluded Contributions, or Investments to the extent made in exchange for or using as consideration Investments previously made under this clause (13); 165

(14) (i) the declaration and payment of dividends to holders of any class or series of Designated Preference Shares of the Issuer issued after the Issue Date; and (ii) the declaration and payment of dividends to any Parent or any Affiliate thereof, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preference Shares of such Parent issued after the Issue Date; provided, however, that, in the case of clauses (i) and (ii), the amount of all dividends declared or paid pursuant to this clause (14) shall not exceed the Net Cash Proceeds received by the Issuer or the aggregate amount contributed in cash to the equity (other than through the issuance of Disqualified Stock or an Excluded Contribution or, in the case of Designated Preference Shares by Parent or an Affiliate, the issuance of Designated Preference Shares) of the Issuer or loaned as Subordinated Shareholder Funding to the Issuer, from the issuance or sale of such Designated Preference Shares; (15) dividends or other distributions of Capital Stock of Unrestricted Subsidiaries; (16) payment of any Receivables Fees and purchases of Receivables Assets pursuant to a Receivables Repurchase Obligation in connection with a Qualified Receivables Financing; and (17) so long as no Default or Event of Default has occurred and is continuing (or would result therefrom), any dividend, distribution, loan or other payment to any Person; provided that the Consolidated Net Leverage Ratio of the Issuer on a pro forma basis after giving effect to any such dividend, distribution, loan or other payment does not exceed 2.0 to 1.0. The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of such Restricted Payment of the asset(s) or securities proposed to be paid, transferred or issued by the Issuer or such Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment. The fair market value of any cash Restricted Payment shall be its face amount, and the fair market value of any non-cash Restricted Payment shall be determined conclusively by an Officer or the Board of Directors of the Issuer acting in good faith. For purposes hereof, unsecured Indebtedness shall not be deemed to be subordinate or junior to Indebtedness that is secured by virtue of it not being secured.

Limitation on Liens The Issuer will not, and will not permit any Restricted Subsidiary to, directly or indirectly, create, Incur or suffer to exist any Lien upon any of its property or assets (including Capital Stock of a Restricted Subsidiary of the Issuer), whether owned on the Issue Date or acquired after that date, or any interest therein or any income or profits therefrom, which Lien is securing any Indebtedness (such Lien, the “Initial Lien”), except (a) in the case of any property or asset that does not constitute Collateral, (1) Permitted Liens or (2) Liens on property or assets that are not Permitted Liens if the Notes and the Indenture (or a Note Guarantee in the case of Liens of a Guarantor) are directly secured equally and ratably with, or prior to, in the case of Liens with respect to Subordinated Indebtedness, the Indebtedness secured by such Initial Lien for so long as such Indebtedness is so secured, and (b) in the case of any property or asset that constitutes Collateral, Permitted Collateral Liens. Any such Lien created in favor of the Notes pursuant to clause (a)(2) of the preceding paragraph will be automatically and unconditionally released and discharged upon (i) the release and discharge of the Initial Lien to which it relates, and (ii) otherwise as set forth under “—Security—Release of Liens.”

Limitation on Restrictions on Distributions from Restricted Subsidiaries The Issuer will not, and will not permit any Restricted Subsidiary to, create or otherwise cause or permit to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to: (A) pay dividends or make any other distributions in cash or otherwise on its Capital Stock held by the Issuer or any Restricted Subsidiary or pay any Indebtedness or other obligations owed to the Issuer; (B) make any loans or advances to the Issuer; or (C) sell, lease or transfer any of its property or assets to the Issuer, provided that (x) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock and (y) the subordination of (including the application of any standstill requirements to) loans or advances made to the Issuer or any Restricted Subsidiary to other Indebtedness Incurred by the Issuer or any Restricted Subsidiary shall not be deemed to constitute such an encumbrance or restriction.

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The provisions of the preceding paragraph will not prohibit: (1) any encumbrance or restriction pursuant to (a) any Credit Facility (including the facilities under the New Senior Facilities Agreement) or (b) any other agreement or instrument, in each case, in effect at or entered into on the Issue Date, including the Indenture, the Notes and the Security Documents; (2) any encumbrance or restriction pursuant to an agreement or instrument of a Person or relating to any Capital Stock or Indebtedness of a Person, entered into on or before the date on which such Person was acquired by or merged, consolidated or otherwise combined with or into the Issuer or any Restricted Subsidiary, or was designated as a Restricted Subsidiary or on which such agreement or instrument is assumed by the Issuer or any Restricted Subsidiary in connection with an acquisition of assets (other than Capital Stock or Indebtedness Incurred as consideration in, or to provide all or any portion of the funds utilized to consummate, the transaction or series of related transactions pursuant to which such Person became a Restricted Subsidiary or was acquired by the Issuer or was merged, consolidated or otherwise combined with or into the Issuer or any Restricted Subsidiary entered into or in connection with such transaction) and outstanding on such date; (3) any encumbrance or restriction pursuant to an agreement or instrument effecting a refinancing of Indebtedness Incurred pursuant to, or that otherwise refinances, an agreement or instrument referred to in clause (1) or (2) of this paragraph or this clause (3) (an “Initial Agreement”) or contained in any amendment, supplement or other modification to an agreement referred to in clause (1) or (2) of this paragraph or this clause (3); provided, however, that the encumbrances and restrictions with respect to such Restricted Subsidiary contained in any such agreement or instrument are no less favorable in any material respect to the Holders taken as a whole than the encumbrances and restrictions contained in the Initial Agreement or Initial Agreements to which such refinancing or amendment, supplement or other modification relates (as determined in good faith by the Issuer); (4) any encumbrance or restriction: (a) that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease, license or similar contract, or the assignment or transfer of any lease, license or other contract; (b) contained in mortgages, pledges, charges or other security agreements permitted under the Indenture or securing Indebtedness of the Issuer or a Restricted Subsidiary permitted under the Indenture to the extent such encumbrances or restrictions restrict the transfer of the property or assets subject to such mortgages, pledges, charges or other security agreements; or (c) pursuant to customary provisions restricting dispositions of real property interests set forth in any reciprocal easement agreements of the Issuer or any Restricted Subsidiary; (5) any encumbrance or restriction pursuant to Purchase Money Obligations and Capitalized Lease Obligations permitted under the Indenture, in each case, that impose encumbrances or restrictions on the property so acquired or any encumbrance or restriction pursuant to a joint venture agreement that imposes restrictions on the transfer of the assets of the joint venture or other agreements entered into in the ordinary course of business restricting the ability of a joint venture to make distributions or payments of cash or property to participants in such joint venture; (6) any encumbrance or restriction with respect to a Restricted Subsidiary (or any of its property or assets) imposed pursuant to an agreement entered into for the direct or indirect sale or disposition to a Person of all or substantially all the Capital Stock or assets of such Restricted Subsidiary (or the property or assets that are subject to such restriction) pending the closing of such sale or disposition; (7) customary provisions in leases, licenses, joint venture agreements and other similar agreements and instruments entered into in the ordinary course of business; (8) encumbrances or restrictions arising or existing by reason of applicable law or any applicable rule, regulation or order, or required by any regulatory authority or any governmental licenses, concessions, franchises or permits, including restrictions or encumbrances on cash or deposits (including assets in escrow accounts) paid on property;

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(9) any encumbrance or restriction on cash or other deposits or net worth imposed by customers or suppliers, or as required by insurance, surety or bonding companies or indemnities, in each case, under agreements or policies entered into in the ordinary course of business; (10) any encumbrance or restriction pursuant to Currency Agreements, Interest Rate Agreements or Commodity Hedging Agreements; (11) any encumbrance or restriction arising pursuant to an agreement or instrument relating to any Indebtedness permitted to be Incurred subsequent to the Issue Date pursuant to the provisions of the covenant described under “—Limitation on Indebtedness” if (A) the encumbrances and restrictions contained in any such agreement or instrument taken as a whole are not materially less favorable to the Holders than (i) the encumbrances and restrictions contained in the New Senior Facilities Agreement or any security documents associated therewith as in effect on the Issue Date or (ii) in comparable financings (as determined in good faith by the Issuer or an Officer thereof) or (B) the Issuer determines at the time of the Incurrence of such Indebtedness that such encumbrances or restrictions will not adversely affect, in any material respect, the Issuer’s ability to make principal or interest payments on the Notes; (12) any encumbrance or restriction existing by reason of any lien permitted under “—Limitation on Liens” and any Intercreditor Agreement; (13) restrictions effected in connection with a Qualified Receivables Financing that, in the good faith determination of an Officer or the Board of Directors of the Issuer, are necessary or advisable to effect such Qualified Receivables Financing; or (14) encumbrances or restrictions contained in agreements relating to a Program Loan or an Ordinary Course Commitment on the Person who is the principal borrower of Indebtedness under such Program Loan, the obligor of such Ordinary Course Commitment or the holder of Capital Stock of such borrower or obligor.

Limitation on Sales of Assets and Subsidiary Stock The Issuer will not, and will not permit any of its Restricted Subsidiaries to, make any Asset Disposition unless: (1) the Issuer or such Restricted Subsidiary, as the case may be, receives consideration (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) at least equal to the fair market value (such fair market value to be determined on the date of contractually agreeing to such Asset Disposition), as determined in good faith by an Officer or the Board of Directors of the Issuer, of the shares and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap); (2) in any such Asset Disposition, or series of related Asset Dispositions (except to the extent the Asset Disposition is a Permitted Asset Swap), at least 75% of the consideration from such Asset Disposition (excluding any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, other than Indebtedness) received by the Issuer or such Restricted Subsidiary, as the case may be, is in the form of cash, Cash Equivalents or Temporary Cash Investments; and (3) an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied by the Issuer or such Restricted Subsidiary within 365 days from the later of (A) the date of such Asset Disposition and (B) the receipt of such Net Available Cash, as the case may be: (a) to the extent the Issuer or any Restricted Subsidiary, as the case may be, elects (or is required by the terms of any Indebtedness of a Restricted Subsidiary) (i) to prepay, repay or purchase any Indebtedness of a non-Guarantor Restricted Subsidiary or Indebtedness that is secured by assets that do not constitute Collateral (in each case, other than Subordinated Indebtedness of the Issuer or Indebtedness owed to the Issuer or any Restricted Subsidiary); provided, however, that in connection with any prepayment, repayment or purchase of Indebtedness pursuant to this clause (a), the Issuer or such Restricted Subsidiary will retire such Indebtedness and will cause the related commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased; (ii) unless prepayment, repayment or purchase has been made pursuant to (a)(i), to prepay, repay or purchase Pari Passu Indebtedness at a price of no more than 100% of the principal amount of such Pari Passu Indebtedness plus accrued and unpaid interest to the date of such prepayment, repayment or purchase; 168

provided that the Issuer shall make (at such time or subsequently in compliance with this covenant) an offer to all Holders of the Notes to purchase their Notes at a purchase price equal to or greater than 100% of the principal amount thereof, plus accrued and unpaid interest to (but not including) the date of purchase and/or pursuant to the redemption provisions set forth above under the caption “—Optional Redemption” on a pro rata basis with any such other Pari Passu Indebtedness that is purchased; or (iii) to prepay, repay or purchase any Indebtedness that is secured by a Lien (other than a Permitted Collateral Lien) on the assets or property which were the subject of the Asset Disposition; (b) to redeem or purchase the Notes pursuant to an offer to all Holders at a purchase price equal to at least 100% of the principal amount thereof, plus accrued and unpaid interest (at the option of the Issuer or Restricted Subsidiary) or pursuant to the redemption provisions set forth above under the caption “— Optional Redemption”; (c) to the extent the Issuer or such Restricted Subsidiary elects, to invest in or commit to invest in Additional Assets (including by means of an investment in Additional Assets by a Restricted Subsidiary with Net Available Cash received by the Issuer or another Restricted Subsidiary); provided, however, that any such reinvestment in Additional Assets made pursuant to a definitive binding agreement or a commitment that is executed within such time will satisfy this requirement so long as such investment is consummated within 180 days following the expiration of the aforementioned 365-day period; or (d) any combination of the foregoing, provided that, pending the final application of any such Net Available Cash in accordance with clause (a), (b), (c) or (d) above, the Issuer and its Restricted Subsidiaries may temporarily reduce Indebtedness or otherwise invest such Net Available Cash in any manner not prohibited by the Indenture; provided, further, at any time that the Issuer is, or, as a result of any KB Shares Disposition, will be, holding less than 72.95% of the ordinary share capital of the Company (the “KB Shares Threshold”), the Net Available Cash from any such KB Shares Disposition (subject to the last sentence of this paragraph) may only be applied in accordance with clause (b) above within 60 days from the later of (A) the date of such KB Shares Disposition and (B) the receipt of such Net Available Cash and any Excess KB Shares Proceeds (as defined below) will be applied in accordance with the third succeeding paragraph (and its related provisions) below. Any Net Available Cash from any KB Shares Disposition following which the Issuer will hold ordinary shares of the Company at or in excess of the KB Shares Threshold (subject to the last sentence of this paragraph) may be applied, invested or committed to be applied or invested pursuant to any of clauses (a), (b), (c) or (d) above within the applicable time period set forth above and any Excess Proceeds (as defined below) will be applied in accordance with the succeeding paragraph (and its related provisions) below. For the avoidance of doubt, if the Issuer holds less than the KB Shares Threshold as a result of a KB Shares Disposition, then (i) the portion of the Net Available Cash corresponding to the proceeds from the Company’s ordinary shares held by the Issuer, or otherwise resulting in the Issuer holding the Company’s ordinary shares, at or in excess of the KB Shares Threshold which have been sold in such KB Shares Disposition may be applied, invested or committed to be applied or invested pursuant to any of clauses (a), (b), (c) or (d) above, and (ii) the remaining portion of the Net Available Cash corresponding to the proceeds from the Company’s ordinary shares held by the Issuer, or otherwise resulting in the Issuer holding the Company’s ordinary shares, below the KB Shares Threshold which have been sold in such KB Shares Disposition may only be applied pursuant to clause (b) above. Any Net Available Cash from Asset Dispositions (other than, subject to the last sentence of the previous paragraph, any Net Available Cash from any KB Shares Disposition following which the Issuer will hold ordinary shares of the Company below the KB Shares Threshold) that is not applied or invested or committed to be applied or invested as provided in the preceding paragraph within the applicable time period will be deemed to constitute “Excess Proceeds” under the Indenture. Within five days after the expiration of the applicable time period, or at such earlier date that the Issuer elects, if the aggregate amount of Excess Proceeds under the Indenture exceeds €20 million, the Issuer will be required to make an offer (“Asset Disposition Offer”) to all holders of the Notes issued under the Indenture and, to the extent the Issuer elects, to all holders of outstanding Pari Passu Indebtedness, to purchase the maximum aggregate principal amount of the Notes and any such Pari Passu Indebtedness to which the Asset Disposition Offer applies that may be purchased out of the Excess Proceeds, at an offer price in respect of the Notes in an amount equal to (and, in the case of any Pari Passu Indebtedness, an offer price of no more than) 100% of the principal amount of the Notes and 100% of the principal amount of such Pari Passu Indebtedness, in each case, plus accrued and unpaid interest, if any, to, but not including, the date of purchase, in accordance with the procedures set forth in the Indenture or the agreements governing such Pari Passu Indebtedness, as applicable, and, in the case of the Notes, in minimum denominations of €100,000 and in integral multiples of €1,000 in excess thereof or, in 169

the case of the Pari Passu Indebtedness, in such minimum denominations or integral multiples in excess thereof as set forth in the documentation governing such Pari Passu Indebtedness. For the avoidance of doubt, the Issuer or any Restricted Subsidiary may make an Asset Disposition Offer prior to the expiration of the applicable time period referred to above. To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so validly tendered and not properly withdrawn pursuant to an Asset Disposition Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for general corporate purposes, subject to other covenants contained in the Indenture. If the aggregate principal amount of the Notes surrendered in any Asset Disposition Offer by Holders and the Pari Passu Indebtedness surrendered by holders or lenders, collectively, exceeds the amount of Excess Proceeds, the Excess Proceeds shall be allocated among the Notes and Pari Passu Indebtedness to be purchased on a pro rata basis on the basis of the aggregate principal amount of tendered Notes and Pari Passu Indebtedness. For the purposes of calculating the aggregate principal amount of any such Indebtedness not denominated in euro, such Indebtedness shall be calculated by converting any such aggregate principal amounts into their euro equivalent determined as of a date selected by the Issuer that is within the Asset Disposition Offer Period (as defined below). Upon completion of any Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. At any time that the Issuer is, or, as a result of any KB Shares Disposition, will be, holding less than the KB Share Threshold, any Net Available Cash from any KB Shares Disposition (subject to the last sentence of the first paragraph of this covenant) which is not applied as provided in clause (3)(b) of the first paragraph of this covenant within 60 days from the later of (A) the date of such KB Shares Disposition and (B) the receipt of such Net Available Cash will be deemed to constitute “Excess KB Shares Proceeds” under the Indenture. Within fifteen days after the expiration of the aforementioned time period, or at such earlier date that the Issuer elects, if the aggregate amount of Excess KB Shares Proceeds under the Indenture exceeds €5 million, then the Issuer will be required to make an offer (“KB Shares Disposition Offer”) to all holders of the Notes issued under the Indenture to purchase the maximum aggregate principal amount of the Notes that may be purchased out of the Excess KB Shares Proceeds, at an offer price equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to, but not including, the date of purchase in minimum denominations of €100,000 and in integral multiples of €1,000 in excess thereof. To the extent that the aggregate amount of Notes so validly tendered and not properly withdrawn pursuant to a KB Shares Disposition Offer is less than the Excess KB Shares Proceeds, the Issuer may use any remaining Excess KB Shares Proceeds for general corporate purposes, subject to other covenants contained in the Indenture. If the aggregate principal amount of the Notes surrendered in any KB Shares Disposition Offer by Holders exceeds the amount of Excess KB Shares Proceeds, the Excess KB Shares Proceeds shall be allocated among the Notes to be purchased on a pro rata basis on the basis of the aggregate principal amount of tendered Notes. For the avoidance of doubt, the Issuer or any Restricted Subsidiary may make a KB Shares Disposition Offer prior to the expiration of the applicable time period referred to above. Upon completion of any KB Share Disposition Offer, the amount of Excess KB Shares Proceeds shall be reset at zero. To the extent that any portion of Net Available Cash payable in respect of the Notes is denominated in a currency other than the currency in which the relevant Notes are denominated, the amount thereof payable in respect of such Notes shall not exceed the net amount of funds in the currency in which such Notes are denominated that is actually received by the Issuer upon converting such portion into such currency. The Asset Disposition Offer or KB Share Disposition Offer, in so far as it relates to the Notes, will remain open for a period of not less than 20 Business Days following its commencement (the “Asset Disposition Offer Period”). No later than five Business Days after the termination of the Asset Disposition Offer Period (the “Asset Disposition Purchase Date”), the Issuer will purchase the aggregate principal amount of Notes and, to the extent it elects and if applicable, Pari Passu Indebtedness required to be purchased pursuant to this covenant (the “Asset Disposition Offer Amount”) or, if less than the Asset Disposition Offer Amount has been so validly tendered, all Notes and, if applicable, Pari Passu Indebtedness validly tendered in response to the Asset Disposition Offer or KB Shares Disposition Offer. On or before the Asset Disposition Purchase Date, the Issuer will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Asset Disposition Offer Amount of Notes and, if applicable, Pari Passu Indebtedness or portions of Notes and such Pari Passu Indebtedness so validly tendered and not properly withdrawn pursuant to the Asset Disposition Offer or KB Shares Disposition Offer, or if less than the Asset Disposition Offer Amount has been validly tendered and not properly withdrawn, all Notes and, if applicable, Pari Passu Indebtedness so validly tendered and not properly withdrawn and, in the case of the Notes, in minimum denominations of €100,000 and in integral multiples of €1,000 in excess thereof or, in the case of the Pari Passu Indebtedness, in such minimum denominations or integral multiples in excess thereof as set forth in the documentation governing such Pari Passu Indebtedness. The Issuer will deliver to the Trustee an Officer’s Certificate stating that such Notes or portions thereof were accepted for payment by the Issuer in accordance with the terms of this covenant. The Issuer or the Principal Paying Agent, as the case may be, will promptly (but 170

in any case not later than five Business Days after termination of the Asset Disposition Offer Period) mail or deliver to each tendering holder of Notes an amount equal to the purchase price of the Notes so validly tendered and not properly withdrawn by such Holder, and accepted by the Issuer for purchase, and the Issuer will promptly issue a new Note (or amend the Global Note), and the Trustee, upon delivery of an Officer’s Certificate from the Issuer, will authenticate (via an authenticating agent) and mail or deliver (or cause to be transferred by book entry) such new Note to such Holder, in an aggregate principal amount equal to any unpurchased portion of the Note surrendered; provided that each such new Note will be in an aggregate principal amount with a minimum denomination of €100,000. Any Note not so accepted will be promptly mailed or delivered (or transferred by book entry) by the Issuer to the Holder thereof. For the purposes of clause (2) of the first paragraph of this covenant, the following will be deemed to be cash: (1) the assumption by the transferee of Indebtedness of the Issuer or Indebtedness of a Restricted Subsidiary (other than Subordinated Indebtedness of the Issuer or a Guarantor) and the release of the Issuer or such Restricted Subsidiary from, or its indemnification against, all liability on such Indebtedness in connection with such Asset Disposition; (2) securities, notes or other obligations received by the Issuer or any Restricted Subsidiary of the Issuer from the transferee that are converted by the Issuer or such Restricted Subsidiary into cash or Cash Equivalents within 180 days following the closing of such Asset Disposition; (3) Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Disposition, to the extent that the Issuer and each other Restricted Subsidiary are released from, or indemnified against any liability under, any Guarantee of payment of such Indebtedness in connection with such Asset Disposition; provided that such Indebtedness is not, directly or indirectly, secured by any Lien on any of the assets or property of the Issuer and its Restricted Subsidiaries (including Capital Stock of a Restricted Subsidiary of the Issuer); (4) consideration consisting of Indebtedness of the Issuer or a Restricted Subsidiary (other than Subordinated Indebtedness) received after the Issue Date from Persons who are not the Issuer or any Restricted Subsidiary;

(5) any Designated Non-Cash Consideration received by the Issuer or any Restricted Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this covenant that is at that time outstanding, not to exceed the greater of €20 million and 2% of Total Assets (with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value); and (6) any Capital Stock or assets of a kind referred to in clause (3)(c) of the first paragraph of this covenant. The Issuer will comply, to the extent applicable, with the requirements of any applicable securities laws or regulations (or rules of any exchange on which the Notes are then listed) in connection with the repurchase of Notes pursuant to the Indenture. To the extent that the provisions of any securities laws or regulations (or exchange rules) conflict with provisions of this covenant, the Issuer will comply with the applicable securities laws and regulations (or exchange rules) and will not be deemed to have breached its obligations under the Indenture by virtue of any conflict. For purposes of this covenant only, if an Asset Disposition Offer or KB Shares Disposition Offer is required to be made but, in order for the Notes to be purchased using such Excess Proceeds or Excess KB Shares Proceeds, money needs to be upstreamed or otherwise transferred from a Restricted Subsidiary of the Issuer to effect that purchase and that money cannot be so upstreamed or transferred or an amount cannot be applied towards such purchase (i) without breaching a financial assistance prohibition or other legal restriction (including, for the avoidance of doubt, capital maintenance rules) applicable to a Restricted Subsidiary (or any of its directors or officers) or its shareholders or there being a reasonable likelihood of personal liability of management or shareholders or (ii) due to counsel advising that such upstreaming or transfer of money would present a material risk of liability for any Restricted Subsidiary or its directors, officers or shareholders, then there shall be no obligation to make that Asset Disposition Offer or KB Shares Disposition Offer until that impediment no longer applies, and once such impediment no longer applies, an Asset Disposition Offer or KB Shares Disposition Offer shall be promptly made by the Issuer; provided, however, that (A) the Issuer and its Restricted Subsidiaries shall use their reasonable endeavors to overcome such impediment and (B) the Issuer shall use its reasonable endeavors to ensure that an Asset Disposition Offer or KB Shares Disposition Offer is made promptly using the cash resources available where to do so would not be prejudicial to the overall liquidity of the Issuer and its Restricted Subsidiaries and would not give rise to the issues referred to in clauses (i) and (ii). 171

Limitation on Affiliate Transactions The Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into or conduct any transaction or series of related transactions (including the purchase, sale, lease or exchange of any property or the rendering of any service) with, or for the benefit of, any Affiliate of the Issuer (any such transaction or series of related transactions, “Affiliate Transaction”) involving aggregate value in excess of €2.5 million unless: (1) the terms of such Affiliate Transaction taken as a whole are not materially less favorable to the Issuer or such Restricted Subsidiary, as the case may be, than those that could be obtained in a comparable transaction at the time of such transaction or the execution of the agreement providing for such transaction in arm’s-length dealings with a Person who is not such an Affiliate; (2) in the event such Affiliate Transaction involves an aggregate value in excess of €10 million, the terms of such transaction or series of transactions have been approved by a majority of the members of the Board of Directors of the Issuer; and (3) in the event such Affiliate Transaction involves an aggregate value in excess of €40 million, the Issuer delivers to the Trustee a letter from an Independent Financial Advisor (i) stating that such transaction is fair to the Issuer or the relevant Restricted Subsidiary from a financial point of view or (ii) stating that the terms are not materially less favorable to the Issuer or such Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person on an arm’s-length basis. The provisions of the preceding paragraph will not apply to: (1) any Restricted Payment permitted or not prohibited to be made pursuant to the covenant described under “— Limitation on Restricted Payments,” any transaction specifically excluded from the definition of Restricted Payments, any Permitted Payments (other than pursuant to clause (9)(b)(ii) of the second paragraph of the covenant described under “—Limitation on Restricted Payments”) or any Permitted Investment (other than Permitted Investments as defined in paragraphs (1)(b), (2), (11) and (16) (other than Guarantees provided by the Issuer or any Restricted Subsidiary in connection with any joint venture engaging in one or more Programs) of the definition thereof); (2) any issuance, sale or transfer of Capital Stock, options, other equity-related interests or other securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or in connection with, or the funding of, or entering into, or maintenance of, any employment, consulting, collective bargaining or benefit plan, program, agreement or arrangement, related trust or other similar agreement and other compensation arrangements, options, warrants or other rights to purchase and the purchase, repurchase, redemption or other acquisition of Capital Stock of the Issuer, any Restricted Subsidiary or any Parent, restricted stock plans, long-term incentive plans, stock appreciation rights plans, participation plans or similar employee benefits or consultants’ plans (including valuation, health, insurance, deferred compensation, severance, retirement, savings or similar plans, programs or arrangements) or indemnities provided to or on behalf of officers, employees, directors or consultants approved by the Board of Directors of the Issuer or a Restricted Subsidiary, as applicable, in each case in the ordinary course of business; (3) any Management Advances and any waiver or transaction with respect thereto; (4) any transaction between or among the Issuer and any Restricted Subsidiary (or entity that becomes a Restricted Subsidiary as a result of such transaction), or between or among Restricted Subsidiaries; (5) the payment of reasonable fees and reimbursement of expenses to, and customary indemnities (including under customary insurance policies) and employee benefit and pension expenses provided on behalf of, directors, officers, consultants or employees of the Issuer, any Restricted Subsidiary of the Issuer or any Parent (whether directly or indirectly and including through any Person owned or controlled by any of such directors, officers or employees); (6) the Refinancing and the entry into and performance of obligations of the Issuer or any of its Restricted Subsidiaries under the terms of any transaction arising out of, and any payments pursuant to or for purposes of funding, any agreement or instrument in effect as of or on the Issue Date (including the New Senior Facilities Agreement, the FD10 Shareholder Loan Agreement, the FN Administrative Support Agreement, the Undertaking of Non Dissolution Agreement, the RKCI Agreements and the CA-CIB Heads of Terms), as these agreements 172

and instruments may be amended, modified, supplemented, extended, renewed or refinanced from time to time in accordance with the other terms of this covenant or to the extent not more disadvantageous to the Holders in any material respect and the entry into and performance of any registration rights or other listing agreement; (7) execution, delivery and performance of any Tax Sharing Agreement or the formation and maintenance of any consolidated group for tax, accounting or cash pooling or management purposes in the ordinary course of business; (8) transactions with (a) customers, clients, suppliers, contractors or purchasers or sellers of goods or services in the ordinary course of business, or (b) a Permitted Holder for its provision of investment banking or commercial banking or similar services to the Issuer or a Restricted Subsidiary, which are, in each case, fair to the Issuer or the relevant Restricted Subsidiary in the reasonable determination of the Board of Directors or the Senior Management of the Issuer or the relevant Restricted Subsidiary, or are on terms no less favorable than those that could reasonably have been obtained at such time from an unaffiliated party; (9) any transaction between or among the Issuer or any Restricted Subsidiary and any Affiliate of the Issuer or an Associate or similar entity that would constitute an Affiliate Transaction solely because the Issuer or a Restricted Subsidiary owns an equity interest in or otherwise controls such Affiliate, Associate or similar entity; (10) (a) issuances or sales of Capital Stock (other than Disqualified Stock or Designated Preference Shares) of the Issuer or options, warrants or other rights to acquire such Capital Stock or Subordinated Shareholder Funding; provided that the interest rate and other financial terms of such Subordinated Shareholder Funding are approved by a majority of the members of the Board of Directors of the Issuer in their reasonable determination and (b) any amendment, waiver or other transaction with respect to any Subordinated Shareholder Funding in compliance with the other provisions of the Indenture; (11) without duplication in respect of payments made pursuant to clause (12) hereof and so long as no Default or Event of Default has occurred and is continuing (or would result therefrom), (a) payments by the Issuer or any Restricted Subsidiary to any Permitted Holder (whether directly or indirectly, including through any Parent) of annual customary management, consulting, monitoring or advisory fees and related expenses in an aggregate amount not to exceed €2 million per year and (b) customary payments by the Issuer or any Restricted Subsidiary to any Permitted Holder (whether directly or indirectly, including through any Parent) for financial advisory, financing, underwriting or placement services, including in connection with acquisitions or divestitures, which payments in respect of this clause (b) are approved by a majority of the Board of Directors of the Issuer in good faith; (12) so long as no Default or Event of Default has occurred and is continuing (or would result therefrom), payment to any Permitted Holder of all reasonable out-of-pocket expenses Incurred by such Permitted Holder in connection with its direct or indirect investment in the Issuer and its Subsidiaries; (13) any transaction effected as part of a Qualified Receivables Financing; (14) the performance of any transactions or obligations of any Person or any of its Subsidiaries under the terms of any transaction arising out of, or payments made pursuant to or for the purposes of funding, any agreement or instrument in effect at the time such Person is acquired by the Issuer or any Restricted Subsidiary, including by way of a merger, amalgamation or consolidation with or into the Issuer or any of its Restricted Subsidiaries in a transaction that is not prohibited by the Indenture; provided that such agreements or instruments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on, or made pursuant to binding commitments existing on, the date of such acquisition, merger, amalgamation or consolidation; (15) transactions in which the Issuer or any Restricted Subsidiary, as the case may be, delivers to the Trustee a letter or opinion from an Independent Financial Advisor stating that (i) the terms are not materially less favorable to the Issuer or its relevant Restricted Subsidiary, as the case may be, than those that would have been obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person on an arm’s-length basis or (ii) that the transaction is fair to the Issuer or such Restricted Subsidiary from a financial point of view; and (16) the existence of, or the performance by the Issuer or any of its Restricted Subsidiaries of its obligations under the terms of any shareholders’ agreement (including any registration rights agreement or purchase agreement related

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thereto) to which it is a party as of the Issue Date and any similar agreements which it may enter into thereafter; provided that the existence of, or the performance by the Issuer or any of its Restricted Subsidiary of obligations under, any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date shall only be permitted by this clause (16) to the extent that the terms of any such amendment or new agreement are not disadvantageous to the holders of the Notes in any material respect.

Reports For so long as any Notes are outstanding, the Issuer shall provide to the Trustee the following reports: (1) within 135 days after the end of the Issuer’s fiscal year beginning with the first fiscal year ending after the Issue Date, annual reports containing, to the extent applicable, the following information: (a) audited consolidated balance sheets of the Issuer or its predecessor as of the end of the two most recent fiscal years and audited consolidated income statements and statements of cash flow of the Issuer or its predecessor for the two most recent fiscal years, including complete footnotes to such financial statements and the report of the independent auditors on the financial statements; (b) unaudited pro forma income statement information and balance sheet information of the Issuer (which, for the avoidance of doubt, shall not include the provision of a full income statement or balance sheet to the extent not reasonably available), together with explanatory footnotes, for any material acquisitions, dispositions or recapitalizations (but only to the extent that such pro forma financial information is required to be disclosed for such acquisitions, dispositions or recapitalizations by applicable French laws and regulations (including those of the French Autorité des Marchés Financiers (“AMF”)) that have occurred since the beginning of the most recently completed fiscal year; provided that such pro forma financial information will be provided only to the extent available without unreasonable expense, in which case the Issuer will provide, in the case of a material acquisition, acquired company financials; (c) an operating and financial review of the audited financial statements, including a discussion of the results of operations, financial condition, and liquidity and capital resources of the Issuer, and a discussion of material commitments and contingencies and critical accounting policies, with a similar scope to that included in these Listing Particulars; (d) a description of the business, management and shareholders of the Issuer, all material affiliate transactions and a description of all material contractual arrangements, including material debt instruments; and (e) a description of material risk factors and material recent developments (which, for the avoidance of doubt, does not require disclosure of confidential negotiations (as determined in good faith by the Issuer)); provided, further, that any item of disclosure that complies in all material respects with the requirements of applicable French laws and regulations (including those of the AMF) for annual reports with respect to such item will be deemed to satisfy the Issuer’s obligations under this clause (1) with respect to such item; (2) within 75 days following the end of each of the first three fiscal quarters in each fiscal year of the Issuer, beginning with the quarter ending February 28, 2014, all quarterly reports of the Issuer containing the following information: (a) an unaudited condensed consolidated balance sheet as of the end of such quarter and unaudited condensed statements of income and cash flow for the most recent quarter year-to-date period ending on the unaudited condensed balance sheet date, and the comparable prior year period, together with condensed footnote disclosure (but only to the extent that such financial statements or footnote disclosure is required to be disclosed by applicable French laws and regulations (including those of the AMF) for quarterly or semi-annual reports, as applicable); (b) unaudited pro forma income statement information and balance sheet information of the Issuer (which, for the avoidance of doubt, shall not include the provision of a full income statement or balance sheet to the extent not reasonably available), together with explanatory footnotes, for any material acquisitions, dispositions or recapitalizations (but only to the extent that such pro forma financial information is required to be disclosed for such acquisitions, dispositions or recapitalizations by applicable French laws and regulations (including those of the AMF)) that have occurred since the beginning of the relevant quarter; provided that such pro forma financial information will be provided only to the extent available without unreasonable expense, in which case the Issuer will provide, in the case of a material acquisition, acquired company financials; (c) an operating and financial review of the unaudited financial statements, including a discussion of the results of operations, financial condition, EBITDA and material changes in liquidity and capital resources of the Issuer, and a discussion of material changes not in the ordinary course of business in commitments and contingencies since the most recent report; and (d) material recent developments (which, for the avoidance of doubt, does not require disclosure of confidential negotiations (as determined in good faith by the Issuer)); provided, further, that any item of disclosure that complies in all material respects with the requirements of applicable French laws and regulations (including those of the AMF) for quarterly or semi-annual reports, as applicable, with respect to such item will be deemed to satisfy the Issuer’s obligations under this clause (2) with respect to such item; and 174

(3) promptly after the occurrence of any material acquisition, disposition or restructuring or any senior executive officer changes at the Issuer or change in auditors of the Issuer or any other material event that the Issuer or any of its Restricted Subsidiaries announces publicly, a report containing a description of such event (but only to the extent that such acquisition, disposition, restructuring, change or event is required to be publicly announced or disclosed by the applicable French laws and regulations (including those of the AMF)). All financial statement and pro forma financial information shall be prepared in accordance with IFRS as in effect on the date of such report or financial statement (or otherwise on the basis of IFRS as then in effect) and on a consistent basis for the periods presented; provided, however, that the reports set forth in clauses (1), (2) and (3) above may, in the event of a change in applicable IFRS, present earlier periods on a basis that applied to such periods. Except as provided for above, no report need include separate financial statements for any Subsidiaries of the Issuer. The filing of an Annual Report on Form 20-F within the time period specified in (1) will satisfy such provision.

At any time that any of the Issuer’s Subsidiaries are Unrestricted Subsidiaries and any such Unrestricted Subsidiary or group of Unrestricted Subsidiaries, if taken together as one Subsidiary, constitutes a Significant Subsidiary of the Issuer, then the annual and quarterly financial information required by clauses (1) and (2) of the first paragraph of this covenant shall include either (i) a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, of the financial condition and results of operations of the Issuer and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of Issuer or (ii) stand-alone audited or unaudited financial statements, as the case may be, of such Unrestricted Subsidiary or Unrestricted Subsidiaries (as a group or otherwise) together with an unaudited reconciliation to the financial information of the Issuer and its Subsidiaries, which reconciliation shall include the following items: revenues, EBITDA, net income, cash, total assets, total debt, shareholders equity, capital expenditures and interest expense. As an alternative to providing reports of the Issuer as set forth above, at any time the primary asset of the Issuer is comprised of Capital Stock of the Company, the Issuer may satisfy the requirements of (1) and (2) above by delivering a substantially similar report with respect to the Company; provided that such report shall include a consolidated balance sheet, consolidated income statement and, only with respect to the annual and semi-annual reports, statement of cash flow of the Issuer instead of the Company for the relevant year or period and the comparable prior year (audited) or period (together with complete footnotes to the annual financial statements and condensed footnotes disclosure for the semi-annual reports) and a description of any material differences in the financial condition and results of operations between the Issuer on a consolidated basis, on the one hand, and the Company on a consolidated basis, on the other hand, for such periods; provided, further, that for so long as the Company’s shares remain listed on the Premier Marché of the Paris stock exchange (now NYSE Euronext), annual or quarterly reports with respect to the Company that are consistent with such reports delivered by the Company to its shareholders in compliance with applicable French laws and regulations shall be deemed to satisfy the Issuer’s obligations under clause (1) or (2), as applicable, subject to the first proviso. Substantially concurrently with the issuance to the Trustee of the reports specified in clauses (1), (2) and (3) of the first paragraph of this covenant, the Issuer shall also (a) use its commercially reasonable efforts (i) to post or cause to be posted copies of such reports on such website as may be then maintained by the Issuer or its Subsidiaries or (ii) otherwise to provide substantially comparable availability of such reports (as determined by the Issuer in good faith) or (b) to the extent the Issuer determines in good faith that it cannot make such reports available in the manner described in the preceding clause (a) owing to applicable law or after the use of its commercially reasonable efforts, furnish such reports to the Holders and, upon request, prospective purchasers of the Notes. The Issuer will also make available copies of all reports required by clauses (1) through (3) of the first paragraph of this covenant, if and so long as the Notes are listed on the Official List of the Irish Stock Exchange and admitted for trading on the Global Exchange Market and the rules of the Irish Stock Exchange so require, at the offices of the Listing Agent. In addition, so long as the Notes remain outstanding and during any period during which the Issuer is not subject to Section 13 or 15(d) of the Exchange Act nor exempt therefrom pursuant to Rule 12g3-2(b), the Issuer shall furnish to the Holders and, upon their request, prospective purchasers of the Notes, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

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Merger and Consolidation The Issuer will not consolidate with or merge with or into, or convey, transfer or lease all or substantially all its assets to, any Person, unless: (1) the resulting, surviving or transferee Person (the “Successor Issuer”) will be a Person organized and existing under the laws of any member state of the European Union or the United States of America, any State of the United States or the District of Columbia, Canada or any province of Canada, Norway or Switzerland and the Successor Issuer (if not the Issuer) will expressly assume (a) by supplemental indenture, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all the obligations of the Issuer under the Notes and the Indenture and (b) all obligations of the Issuer under the Security Documents and any Intercreditor Agreement; (2) immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the Successor Issuer or any Subsidiary of the Successor Issuer as a result of such transaction as having been Incurred by the Successor Issuer or such Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing;

(3) immediately after giving effect to such transaction, either (a) the Successor Issuer would be able to Incur at least an additional €1.00 of Indebtedness pursuant to the first paragraph of the covenant described under “—Limitation on Indebtedness” applicable to the Issuer or (b) the Consolidated Fixed Charge Coverage Ratio of the Successor Issuer would not be less than the Consolidated Fixed Charge Coverage Ratio was immediately prior to giving effect to such transaction; and (4) the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each to the effect that such consolidation, merger or transfer and such supplemental indenture (if any) comply with the Indenture and an Opinion of Counsel to the effect that such supplemental indenture (if any) has been duly authorized, executed and delivered and is a legal, valid and binding agreement enforceable against the Successor Issuer (in each case, in form and substance reasonably satisfactory to the Trustee), provided that in giving an Opinion of Counsel, counsel may rely on an Officer’s Certificate as to any matters of fact, including as to satisfaction of clauses (2) and (3) above. For purposes of this covenant, the sale, lease, conveyance, assignment, transfer, or other disposition of all or substantially all of the properties and assets of one or more Subsidiaries of the Issuer, which properties and assets, if held by the Issuer instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Issuer on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Issuer. The Successor Issuer will succeed to, and be substituted for, and may exercise every right and power of, the Issuer under the Indenture but in the case of a lease of all or substantially all its assets, the predecessor company will not be released from its obligations under such Indenture or the Notes. Notwithstanding the preceding clauses (2), (3) and (4) of the first paragraph of this covenant, any Restricted Subsidiary of the Issuer may consolidate or otherwise combine with, merge into or transfer all or part of its properties and assets to the Issuer. Notwithstanding the preceding clauses (2), (3) and (4) (which do not apply to the transactions referred to in this sentence), the Issuer may consolidate or otherwise combine with, merge into or transfer all or a portion of its assets to an Affiliate incorporated or organized for the purpose of changing the legal domicile of the Issuer, reincorporating the Issuer in another jurisdiction, or changing the legal form of the Issuer. Notwithstanding the preceding clauses (2) and (3) (which do not apply to the transactions referred to in this sentence), the Issuer may consolidate or otherwise combine with, merge into or transfer all or part of its properties and assets to any Guarantor or the Company. There is no precise established definition of the phrase “substantially all” under applicable law. Accordingly, in certain circumstances there may be a degree of uncertainty as to whether a particular transaction would involve “all or substantially all” of the property or assets of a Person. The foregoing provisions (other than the requirements of clause (2) of the first paragraph of this covenant) will not apply to the creation of a new subsidiary of the Issuer that becomes a parent of one or more of the Issuer’s Subsidiaries.

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For the avoidance of doubt, any Restricted Subsidiary (other than the Issuer or a Subsidiary Guarantor) may consolidate or otherwise combine with, merge into or transfer all or part of its properties and assets to any other such Restricted Subsidiary or any Guarantor.

Limitations to Holding Company Activities The Indenture will provide that the Issuer may not carry on any business or own any assets or Incur any Indebtedness other than: • pursuant to or in connection with the Refinancing, including the issuance of the Notes and entering into the Security Documents and any future Intercreditor Agreements and any other transaction undertaken with the purpose of fulfilling its obligations or rights under the Notes, the Indenture, the Security Documents, any future Intercreditor Agreements and any other documents relating to the foregoing; • subject to compliance with the terms of the Indenture, any activity related to the offering, sale, issuance, servicing, purchase, redemption, amendment, exchange, refinancing or retirement of or investment in the Notes or any other Indebtedness Incurred in accordance with the Indenture;

• the granting of security interests in accordance with the terms of the Notes, the Indenture and any other Indebtedness or obligations, in each case, not prohibited by the Indenture; • the ownership of (i) shares in the Company, (ii) intra-group debit or credit balances and other credit balances in bank accounts and (iii) any other asset or property to the extent contributed substantially concurrently to a Parent; • holding cash, Cash Equivalents and Temporary Cash Investments; • Incurring Subordinated Shareholder Funding; • Incurring any other Indebtedness not prohibited by the Indenture and performing its obligations thereunder; • entering into and performing any rights or obligations in respect of (i) contracts and agreements with its officers, directors and employees, (ii) subscription or purchase agreements for securities or preferred equity certificates, public offering rights agreements, voting and other shareholder agreements, engagement letters, underwriting agreements, agreements with rating agencies and other agreements in respect of its securities or any offering, issuance or sale thereof, (iii) engagement letters and reliance letters in respect of legal, accounting and other advice or reports received or commissioned by it and (iv) the CA-CIB Heads of Terms, in each case, in relation to transactions which are not prohibited by the Indenture; • making any payment, distribution or investment not prohibited by the Indenture; • the sale or disposal of any assets not prohibited by the Indenture; • issuing directors’ qualifying shares and shares to its shareholders; • entering into any transactions in compliance with the covenant described above under “—Merger and Consolidation”; • (i) listing its Capital Stock and the issuance, offering and sale of its Capital Stock (including in a Public Offering), including compliance with applicable regulatory and other obligations in connection therewith, (ii) using the net cash proceeds of such issuance, or exchanging or converting such instruments, to contribute to the equity of its subsidiaries and (iii) any purchase, repurchase, redemption or the performance of the terms and conditions of, and exercise of rights in respect of, the foregoing, in each case, to the extent such activities are not prohibited by the Indenture; • the provision of administrative, managerial, treasury, accounting, legal, strategic and advisory services and any ancillary services and activities related thereto to its Affiliates and the ownership of assets necessary to provide such services; • entering into and performing any rights or obligations under any Taxing Sharing Agreements and acting as the head of the consolidated tax group for itself and its Subsidiaries (including engaging in any activities or making any payments in relation thereto);

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• the payment of wages and the incurrence of obligations and liabilities arising by operation of law or that are typical of or incidental to the activities of a holding company; • the conduct of its business as a holding company and any related taxes, professional fees and administration costs; • entering into any transactions related or reasonably incidental to the establishment or maintenance of its and its Subsidiaries’ corporate existence and any other transactions of a type customarily entered into by holding companies and their subsidiaries; and • undertaking any other activities which are not specifically listed above and which are (i) ancillary to or related to those listed above or (ii) de minimis in nature, provided, however, that upon the Initial Public Offering of the Issuer, this covenant will cease to apply or have any effect.

Suspension of Covenants on Achievement of Investment Grade Status If on any date following the Issue Date, the Notes have achieved Investment Grade Status and no Default or Event of Default has occurred and is continuing (a “Suspension Event”), then, beginning on that day and continuing until the Reversion Date, the provisions of the Indenture summarized under the following captions will not apply to such Notes: “— Limitation on Restricted Payments,” “—Limitation on Indebtedness,” “—Limitation on Restrictions on Distributions from Restricted Subsidiaries,” “—Limitation on Affiliate Transactions,” “—Limitation on Sales of Assets and Subsidiary Stock,” “—Additional Guarantees” and the provisions of clause (3) of the first paragraph of the covenant described under “—Merger and Consolidation,” and, in each case, any related default provision of the Indenture will cease to be effective and will not be applicable to the Issuer and its Restricted Subsidiaries. Such covenants and any related default provisions will again apply according to their terms from the first day on which a Suspension Event ceases to be in effect. Such covenants will not, however, be of any effect with regard to actions of the Issuer properly taken during the continuance of the Suspension Event, and the “—Limitation on Restricted Payments” covenant will be interpreted as if it has been in effect since the date of such Indenture except that no Default will be deemed to have occurred solely by reason of a Restricted Payment made while that covenant was suspended. On the Reversion Date, all Indebtedness Incurred during the continuance of the Suspension Event will be classified, at the Issuer’s option, as having been Incurred pursuant to the first paragraph of the covenant described under “—Limitation on Indebtedness” or one of the clauses set forth in the second paragraph of such covenant (to the extent such Indebtedness would be permitted to be Incurred thereunder as of the Reversion Date and after giving effect to Indebtedness Incurred prior to the Suspension Event and outstanding on the Reversion Date). To the extent such Indebtedness would not be so permitted to be incurred under the first two paragraphs of the covenant described under “—Limitation on Indebtedness,” such Indebtedness will be deemed to have been outstanding on the Issue Date, so that it is classified as permitted under clause (4)(b) of the second paragraph of the covenant described under “—Limitation on Indebtedness.” The Issuer shall notify the Trustee and the Holders that the two conditions set forth in the first paragraph under this heading have been satisfied, provided that such notification shall not be a condition for the suspension of the covenants set forth above to be effective. The Trustee shall not be obliged to notify Holders of such event. There can be no assurance that the Notes will ever achieve or maintain an investment grade rating.

Additional Guarantees The Issuer will not cause or permit any of its Restricted Subsidiaries that are not Guarantors, directly or indirectly, to Guarantee any Indebtedness of the Issuer that is Incurred under a Credit Facility or Guarantee any Public Debt of the Issuer and, in each case, any refinancing thereof in whole or in part unless such Restricted Subsidiary becomes a Guarantor on the date on which such other Guarantee is Incurred and, if applicable, executes and delivers to the Trustee a supplemental indenture in the form attached to the Indenture pursuant to which such Restricted Subsidiary will provide a Note Guarantee of the Notes, which Note Guarantee will be senior to or pari passu with such Restricted Subsidiary’s Guarantee of such other Indebtedness. A Restricted Subsidiary that is not a Guarantor may become a Guarantor if it executes and delivers to the Trustee a supplemental indenture in the form attached to the Indenture pursuant to which such Restricted Subsidiary will provide a Note Guarantee of the Notes.

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Each additional Guarantee will be limited as necessary to recognize certain defenses generally available to guarantors (including those that relate to fraudulent conveyance or transfer, voidable preference, financial assistance, corporate purpose, thin capitalization, distributable reserves, capital maintenance or similar laws, regulations or defenses affecting the rights of creditors generally) or other considerations under applicable law. Notwithstanding the foregoing, the Issuer shall not be obligated to cause such Restricted Subsidiary to Guarantee the Notes to the extent and for so long as the Incurrence of such Note Guarantee could reasonably be expected to give rise to or result in: (1) any violation of applicable law or regulation; (2) any liability for the officers, directors or (except in the case of a Restricted Subsidiary that is a partnership) shareholders of such Restricted Subsidiary (or, in the case of a Restricted Subsidiary that is a partnership, directors or shareholders of the partners of such partnership); or (3) any cost, expense, liability or obligation (including with respect to any Taxes) other than reasonable out-of-pocket expenses and other than reasonable expenses incurred in connection with any governmental or regulatory filings required as a result of, or any measures pursuant to clause (1) of this paragraph undertaken in connection with, such Note Guarantee, which in any case under any of clauses (1), (2) and (3) of this paragraph cannot be avoided through measures reasonably available to the Issuer or a Restricted Subsidiary. In addition, no Note Guarantee shall be required as a result of any Guarantee of Indebtedness that existed at the time such Person became a Restricted Subsidiary if the Guarantee was not Incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary. Notwithstanding the foregoing, any Guarantee of the Notes created pursuant to this provisions shall be released and discharged (i) upon a sale or other disposition (including by way of consolidation or merger) of ownership interests in the Guarantor (directly or through a parent company) such that (a) the Guarantor does not remain a Restricted Subsidiary, or (b) the sale or disposition of all or substantially all the assets of the Guarantor, in each of (a) and (b), other than to the Issuer or a Restricted Subsidiary and otherwise not prohibited by the Indenture, (ii) upon payment in full of principal, interest and all other obligations in respect of the Notes issued under the Indenture or the defeasance or discharge of the Notes as provided in “—Defeasance” or “—Satisfaction and Discharge”, in each case, in accordance with the terms and conditions of the Indenture, (iii) if the Guarantor is designated as an Unrestricted Subsidiary in compliance with applicable provisions of the Indenture, (iv) upon the release of the Guarantee that gave rise to the obligation to Guarantee the Notes or (v) in accordance with certain enforcement actions pursuant to any Intercreditor Agreement. The Trustee shall take all necessary actions, including the granting of releases or waivers under the Indenture, to effectuate any release in accordance with these provisions.

Intercreditor Agreements Upon the written direction of the Issuer, at the time of, or prior to any time that, the Issuer or any of its Restricted Subsidiaries Incurs any Indebtedness permitted to be secured by a Lien on the Collateral (other than in respect of any Additional Notes or any Guarantees with respect thereto) in accordance with the covenant described above under “—Certain Covenants—Limitation on Liens” (“Pari Passu Debt”), which Collateral (the “Shared Collateral”) also equally and ratably secures the Notes, the Issuer and any relevant Restricted Subsidiary, the Trustee and the Security Agent, and without the consent of holders of the Notes, will enter into an intercreditor agreement (each, an “Intercreditor Agreement”) in respect of the Shared Collateral with creditors of any Pari Passu Debt (the “Shared Collateral Creditors”) sharing the benefit of such Lien (or their respective agent, representative or trustee), containing provisions which reflect the following terms, and other terms which are or become customary for similar agreements (in the case of such other terms, terms which are not materially less favorable to holders of the Notes) (together, the “Fundamental Intercreditor Rights”): (i) Obligations under the Notes shall rank pari passu in all respects with any Pari Passu Debt and any obligations under Hedging Agreements permitted to be secured on a senior ranking basis. The holders of the Notes shall share the net proceeds from enforcement of the Shared Collateral on a pro rata basis with creditors of any Pari Passu Debt. (ii) Any Intercreditor Agreement shall not restrict payments in respect of any obligations under Pari Passu Debt or obligations under the Notes (together, the “Shared Collateral Creditor Obligations”) except that, following the occurrence of an acceleration event under any Pari Passu Debt or the Notes under the Indenture or certain events of bankruptcy or insolvency, none of the Issuer or the Restricted Subsidiaries (the “Debtors”) may make, and no Shared Collateral Creditors may receive, payments of the Shared Collateral Creditor Obligations except amounts properly distributed in accordance with such Intercreditor Agreement. (iii) The Intercreditor Agreement shall specify that upon any of the Liens becoming enforceable, enforcement decisions under the Shared Collateral documents will be made by the Shared Collateral Creditors constituting

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more than half (50%) of the Shared Collateral Creditor Obligations outstanding on a euro-for-euro basis (the “Majority Shared Collateral Creditors” or an “Instructing Group”). No Shared Collateral Creditor shall have any independent right to enforce any of the Liens or to instruct or require the security agent to enforce any of the Shared Collateral documents except as instructed by the applicable Instructing Group. Any instructions given by the Instructing Group will be binding on all of the Shared Collateral Creditors. (iv) The Intercreditor Agreement will contain customary turnover provisions. (v) The Intercreditor Agreement shall include provisions such that if, for any reason, any of the Shared Collateral Creditor Obligations remain unpaid after the date enforcement action is taken and the resulting losses are not borne by the Shared Collateral Creditors in the proportions which their respective exposures at such enforcement date bore to the aggregate exposures of all the Shared Collateral Creditors at such enforcement date, the Shared Collateral Creditors will make such payments among themselves as the Security Agent shall require to put the Shared Collateral Creditors in such a position that (after taking into account of such payments) their respective losses are borne in those proportions. The Trustee shall not be required to make payments if it has distributed amounts received to holders of the Notes and did not have written notice at least two Business Days prior to the date of such distribution of the obligation to make such equalization payments. (vi) Any Intercreditor Agreement shall permit, on customary terms, any Shared Collateral Creditor Obligations (including new Pari Passu Debt) to be financed or refinanced with other senior secured equal ranking debt and for such new indebtedness to be ranked equally with other Shared Collateral Creditor Obligations (including sharing in the security under the Liens); provided that such debt is permitted to be Incurred under the terms of the relevant credit documentation in respect of any Shared Collateral Creditor Obligations that will remain following such financing or refinancing. (vii) Any Intercreditor Agreement shall be governed by the laws of England and Wales or the State of New York. The Shared Collateral will only be released, and Liens will only be granted on the assets the subject of the Shared Collateral, to the extent permitted under (or not prohibited by) the Indenture, the applicable Security Documents and the documents governing the terms of the applicable Pari Passu Debt. Each Intercreditor Agreement will have an intercreditor agent or security agent (if not the Security Agent) who acts on behalf of all holders of Pari Passu Debt and the Notes, the Trustee and any of their agents. Any Intercreditor Agreement may contain provisions in addition to those described above to the extent necessary or desirable to enable the Issuer or any of its Restricted Subsidiaries to enter into and consummate corporate, financing and other transactions. Provided (i) such provisions do not conflict with the Fundamental Intercreditor Rights described above and (ii) such Intercreditor Agreement contains such provisions as are customarily requested by note trustees when entering into intercreditor agreements on behalf of holders of the Notes, the Trustee and the Security Agent shall enter into such Intercreditor Agreements on behalf of the holders of Notes. The Indenture will provide that, at the written direction of the Issuer and without the consent of the holders of the Notes, the Trustee and the Security Agent may from time to time enter into one or more amendments to an Intercreditor Agreement or deed to: (i) cure any ambiguity, omission, defect or inconsistency therein; (ii) make any change to reflect or give effect to any of the provisions of this covenant; (iii) increase the amount of Indebtedness of the types covered by the Intercreditor Agreement or otherwise implement any Permitted Collateral Liens, in each case, in a manner not prohibited by the Indenture and substantially consistent with the ranking and terms of such Intercreditor Agreement; (iv) add Guarantors or other parties (such as representatives of new issuances of Indebtedness) thereto; (v) make any change necessary or desirable, in the good faith determination of the Board of Directors of the Issuer, in order to implement any transactions permitted under the caption “—Merger and Consolidation”; provided that such change does not adversely affect the Fundamental Intercreditor Rights of any holder of the Notes in any material respect; or (vi) make any other changes that do not, in any material respect, adversely affect the Fundamental Intercreditor Rights of any holder of the Notes; provided further that any such changes contemplated do not impose any personal obligations on the Trustee or the Security Agent or adversely affect the rights, duties, liabilities, indemnities or immunities of the Trustee or the Security Agent under the Indenture or the Intercreditor Agreement. The Issuer shall not otherwise direct the Trustee or the Security Agent to enter into any amendment to any Intercreditor Agreement without the consent of the holders of a majority in aggregate principal amount of the Notes then outstanding, except as permitted below under “—Amendments and Waivers.”

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Any Intercreditor Agreement may be terminated at the option of the Issuer if at the date of such termination the Pari Passu Debt covered thereby has been repaid or refinanced or otherwise discharged. The Trustee and the Security Agent shall take all reasonably necessary actions to effectuate the termination of any Intercreditor Agreement in accordance with these provisions, subject to customary protections and indemnifications. Each holder of a Note, by accepting such Note, will be deemed to have: (1) appointed and authorized each of the Trustee and the Security Agent to give effect to such provisions;

(2) authorized the Trustee and the Security Agent to become a party to any future Intercreditor Agreement described above; (3) agreed to be bound by such provisions and the provisions of any future Intercreditor Agreement described above; and (4) irrevocably appointed the Trustee and the Security Agent to act on its behalf to enter into and comply with such provisions and the provisions of any future Intercreditor Agreement described above.

No Impairment of Security Interest The Issuer shall not, and shall not permit any Restricted Subsidiary to, take or omit to take any action that would have the result of materially impairing the security interest with respect to the Collateral (it being understood that the Incurrence of Permitted Collateral Liens shall under no circumstances be deemed to materially impair the security interest with respect to the Collateral) for the benefit of the Trustee and the Holders, and the Issuer shall not, and shall not permit any Restricted Subsidiary to, grant to any Person other than the Security Agent, for the benefit of the Trustee and the Holders and the other beneficiaries described in the Security Documents, any Lien over any of the Collateral that is prohibited by the covenant entitled “Limitation on Liens;” provided that the Issuer and its Restricted Subsidiaries may Incur Permitted Collateral Liens and the Collateral may be discharged, transferred or released in accordance with the Indenture, any Intercreditor Agreement and the applicable Security Documents. Notwithstanding the above, nothing in this covenant shall restrict the discharge and release of any security interest in accordance with the Indenture, any Intercreditor Agreement and the Security Documents. Subject to the foregoing, the Security Documents may be amended, extended, renewed, restated or otherwise modified or released (followed by an immediate retaking of a Lien of at least equivalent ranking over the same assets) to (i) cure any ambiguity, omission, defect or inconsistency therein; (ii) provide for Permitted Collateral Liens; (iii) add to the Collateral; or (iv) make any other change thereto that does not adversely affect the Holders in any material respect; provided, however, that, except where permitted by the Indenture or any Intercreditor Agreement, no Security Document may be amended, extended, renewed, restated or otherwise modified or released (followed by an immediate retaking of a Lien of at least equivalent ranking over the same assets), unless contemporaneously with such amendment, extension, renewal, restatement or modification or release (followed by an immediate retaking of a Lien of at least equivalent ranking over the same assets), the Issuer delivers to the Security Agent and the Trustee, any of (1) a solvency opinion, in form and substance reasonably satisfactory to the Security Agent and the Trustee, from an Independent Financial Advisor or appraiser or investment bank of international standing which confirms the solvency of the Issuer and its Subsidiaries, taken as a whole, after giving effect to any transactions related to such amendment, extension, renewal, restatement, modification or release (followed by an immediate retaking of a lien of at least equivalent ranking over the same assets), (2) a certificate from the chief executive officer, chief financial officer or the Board of Directors of the relevant Person which confirms the solvency of the Person granting such security interest after giving effect to any transactions related to such amendment, extension, renewal, restatement, modification or release (followed by an immediate retaking of a lien of at least equivalent ranking over the same assets), or (3) an Opinion of Counsel (subject to any qualifications customary for this type of opinion of counsel), in form and substance reasonably satisfactory to the Trustee, confirming that, after giving effect to any transactions related to such amendment, extension, renewal, restatement, modification or release (followed by an immediate retaking of a lien of at least equivalent ranking over the same assets), the Lien or Liens securing the Notes created under the Security Documents, so amended, extended, renewed, restated, modified or released and replaced are valid and perfected Liens not otherwise subject to any limitation, imperfection or new hardening period, in equity or at law, that such Lien or Liens were not otherwise subject to immediately prior to such amendment, extension, renewal, restatement, modification or release and replacement and to which the new Indebtedness secured by the Permitted Collateral Lien is not subject. In the event that the Issuer and its Restricted Subsidiaries comply with the requirements of this covenant, the Trustee and the Security Agent shall (subject to customary protections and indemnifications) consent to such amendments without the need for instructions from the Holders. 181

Maintenance of Listing The Issuer will use its commercially reasonable efforts to maintain the listing of the Notes on the Global Exchange Market of the Irish Stock Exchange for so long as such Notes are outstanding; provided that if the Issuer determines that it will not maintain such listing, it will use its commercially reasonable efforts to (where the Notes are initially so listed, prior to the delisting of the Notes from the Global Exchange Market) obtain, and thereafter use commercially reasonable efforts to maintain, a listing of such Notes on another “recognized stock exchange” as defined in Section 1005 of the Income Tax Act 2007 of the United Kingdom.

Payments for Consent The Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any holder of Notes for or as an inducement to any consent, waiver or amendment of any of the terms of the provisions of the Indenture or the Notes unless such consideration is offered to be paid and is paid to all holders of the Notes that consent, waive or agree to such amendment in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement. Notwithstanding the foregoing, the Issuer and its Restricted Subsidiaries shall be permitted, in any offer or payment of consideration for, or as an inducement to, any consent, waiver or amendment of any of the terms or provisions of the Indenture, to exclude holders of Notes in any jurisdiction or any category of holders of Notes where (1) the solicitation of such consent, waiver or amendment, including in connection with any tender or exchange offer, or (2) the payment of the consideration therefor could reasonably be interpreted as requiring the Issuer or any of its Restricted Subsidiaries to file a registration statement, prospectus or similar document under any applicable securities laws or listing requirements (including, but not limited to, the United States federal securities laws and the laws of the European Union or any of its member states), which the Issuer in its sole discretion determines (acting in good faith) (a) would be materially burdensome (it being understood that it would not be materially burdensome to file the consent document(s) used in other jurisdictions, any substantially similar documents or any summary thereof with the securities or financial services authorities in such jurisdiction); or (b) such solicitation would otherwise not be permitted under applicable law in such jurisdiction or with respect to such category of holders of Notes.

Events of Default Each of the following is an “Event of Default” under the Indenture: (1) default in any payment of interest or Additional Amounts, if any, on any Note when due and payable, continued for 30 days; (2) default in the payment of the principal amount of or premium, if any, on any Note issued under the Indenture when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise; (3) failure to comply with the provisions of the covenant described under “—Certain Covenants—Merger and Consolidation”; (4) failure to comply for 30 days after written notice by the Trustee on behalf of the Holders or by the Holders of 30% in aggregate principal amount of the outstanding Notes with any of the Issuer’s obligations under the covenants described under “—Change of Control” above or under the covenants described under “—Certain Covenants” above (in each case, other than as specifically addressed in clause (3) above and a failure to purchase Notes which will constitute an Event of Default under clause (2) above); (5) failure by the Issuer or any of its Restricted Subsidiaries to comply for 60 days after written notice by the Trustee on behalf of the Holders or by the Holders of at least 30% in aggregate principal amount of the outstanding Notes with its other agreements contained in the Indenture;

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(6) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Issuer or any of its Restricted Subsidiaries (or the payment of which is Guaranteed by the Issuer or any of its Restricted Subsidiaries) other than Indebtedness owed to the Issuer or a Restricted Subsidiary whether such Indebtedness or Guarantee now exists, or is created after the date hereof, which default: (a) is caused by a failure to pay principal at stated maturity thereof, or interest or premium when due and payable, on such Indebtedness, immediately upon the expiration of any grace period provided in such Indebtedness (“payment default”); or

(b) results in the acceleration of such Indebtedness prior to its maturity (the “cross acceleration provision”) and, in each case, the aggregate principal amount of any such outstanding Indebtedness, together with the aggregate principal amount of any other such outstanding Indebtedness under which there has been a payment default or the maturity of which has been so accelerated, aggregates €20 million or more; (7) certain events of bankruptcy, insolvency or court protection of the Issuer or a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements of the Issuer and its Restricted Subsidiaries), would constitute a Significant Subsidiary (the “bankruptcy provisions”); (8) failure by the Issuer or any Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements of the Issuer and its Restricted Subsidiaries), would constitute a Significant Subsidiary to pay final judgments currently due for payment aggregating in excess of €20 million (exclusive of any amounts that a solvent insurance company has acknowledged liability for), which judgments are not paid, discharged or stayed for a period of 60 days after the judgment becomes final (the “judgment default provision”); and (9) any security interest under the Security Documents on any material Collateral shall, at any time, cease to be in full force and effect (other than in accordance with the terms of the relevant Security Document, any Intercreditor Agreement or the Indenture) for any reason other than the satisfaction in full of all obligations under the Indenture or the release or amendment of any such security interest in accordance with the terms of the Indenture, any Intercreditor Agreement or such Security Document or any such security interest created thereunder shall be declared invalid or unenforceable or the Issuer or any Restricted Subsidiary shall assert in writing that any such security interest is invalid or unenforceable and any such Default continues for 10 days (the “security default provisions”). However, a default under clauses (3), (4), (5), (6) or (8) of this paragraph will not constitute an Event of Default until the Trustee or the Holders of 30% in aggregate principal amount of the outstanding Notes notify the Issuer of the default and, with respect to clauses (3), (4), (5), (6) or (8), the Issuer does not cure such default within the time specified in clauses (3), (4), (5), (6) or (8) as applicable, of this paragraph after receipt of such notice. If an Event of Default (other than an Event of Default with respect to the Issuer described in clause (7) above) occurs and is continuing, the Trustee by notice to the Issuer or the Holders of at least 30% in aggregate principal amount of the outstanding Notes by written notice to the Issuer and the Trustee, may, and the Trustee at the request of such Holders shall, declare the principal of, premium, if any, and accrued and unpaid interest, including Additional Amounts, if any, on all the Notes to be due and payable. Upon such a declaration, such principal, premium and accrued and unpaid interest, including Additional Amounts, if any, will be due and payable immediately. In the event of a declaration of acceleration of the Notes because an Event of Default described in clause (6) under “Events of Default” has occurred and is continuing, the declaration of acceleration of the Notes shall be automatically annulled, and the related Event of Default shall be automatically waived, if the event of default or payment default triggering such Event of Default pursuant to clause (6) shall have been remedied or cured, or waived by the holders of the Indebtedness, or the Indebtedness that gave rise to such Event of Default shall have been discharged in full, within 30 days after the declaration of acceleration with respect thereto and if (1) the annulment of the acceleration of the Notes would not conflict with any judgment or decree of a court of competent jurisdiction and (2) all existing Events of Default, except nonpayment of principal, premium or interest, including Additional Amounts, if any, on the Notes that became due solely because of the acceleration of the Notes, have been cured or waived. If an Event of Default with respect to the Issuer described in clause (7) above occurs and is continuing, the principal of, premium, if any, and accrued and unpaid interest, including Additional Amounts, if any, on all the Notes will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.

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The Holders of a majority in aggregate principal amount of the outstanding Notes under the Indenture may waive all past or existing Defaults or Events of Default (except with respect to nonpayment of principal, premium or interest, or Additional Amounts, if any, which may only be waived with the consent of Holders holding at least 90% of the aggregate principal amount of the outstanding Notes under the Indenture) and rescind any such acceleration with respect to such Notes and its consequences if rescission would not conflict with any judgment or decree of a court of competent jurisdiction.

Subject to the provisions of the Indenture relating to the duties of the Trustee, if an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee indemnity and/or security satisfactory to the Trustee against any loss, liability or expense. Except to enforce the right to receive payment of principal or interest when due, no Holder may pursue any remedy with respect to the Indenture or the Notes unless: (1) such Holder has previously given the Trustee written notice that an Event of Default is continuing; (2) Holders of at least 30% in aggregate principal amount of the outstanding Notes have requested in writing the Trustee to pursue the remedy; (3) such Holders have offered in writing the Trustee security or indemnity satisfactory to the Trustee against any loss, liability or expense; (4) the Trustee has not complied with such request within 60 days after the receipt of the written request and the offer of such security and/or indemnity; and (5) the Holders of a majority in aggregate principal amount of the outstanding Notes have not given the Trustee a written direction that, in the opinion of the Trustee, is inconsistent with such request within such 60-day period. Subject to certain restrictions, the Holders of a majority in aggregate principal amount of the outstanding Notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Indenture will provide that, in the event an Event of Default has occurred and is continuing, the Trustee will be required in the exercise of its powers to use the degree of care that a prudent person would use in the conduct of its own affairs. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability. Prior to taking any action under the Indenture, the Trustee will be entitled to indemnification and/or security satisfactory to it against all losses and expenses caused by taking or not taking such action. The Indenture will provide that if a Default occurs and is continuing and the Trustee is informed of such occurrence by the Issuer, the Trustee must give notice of the Default to the Holders within 60 days after being notified by the Issuer. Except in the case of a Default in the payment of principal of, or premium, if any, or interest on any Note, the Trustee may withhold notice if and so long as a committee of trust officers of the Trustee in good faith determines that withholding notice is in the interests of the Holders. The Issuer will be required to deliver to the Trustee, within 120 days after the end of each fiscal year, an Officer’s Certificate indicating whether the signers thereof know of any Default that occurred during the previous year. The Issuer will be required to deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any events of which it is aware which would constitute a Default, their status and what action the Issuer is taking or proposes to take in respect thereof. The Indenture will provide that (i) if a Default occurs for a failure to deliver a required certificate in connection with another default (an “Initial Default”), then at the time such Initial Default is cured, such Default for a failure to report or deliver a required certificate in connection with the Initial Default will also be cured without any further action and (ii) any Default or Event of Default for the failure to comply with the time periods prescribed in the covenant entitled “—Reports” or otherwise to deliver any notice or certificate pursuant to any other provision of the Indenture shall be deemed to be cured upon the delivery of any such report required by such covenant or notice or certificate, as applicable, even though such delivery is not within the prescribed period specified in the Indenture. The Notes provide for the Trustee to take action on behalf of the Holders in certain circumstances, but only if the Trustee is indemnified or secured to its satisfaction. It may not be possible for the Trustee to take certain actions in relation to the Notes and, accordingly, in such circumstances the Trustee will be unable to take action, notwithstanding the provision of an indemnity to it, and it will be for Holders to take action directly. Holders of the Notes may not enforce the Indenture or the Notes except as provided in the Indenture and may not enforce the Security Documents except as provided in such Security Documents and any Intercreditor Agreement.

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The Indenture will provide that the Trustee has, and by accepting the Notes each Holder will be deemed to have, consented to the repurchase of the Capital Stock of the Issuer from CA-CIB pursuant to the CA-CIB Heads of Terms as contemplated in these Listing Particulars under the caption “Use of Proceeds” and waive any right it may have to oppose any such capital reduction under Article L.225-205 of the French Commercial Code and to take any actions in respect thereto, including to request any collateral.

Amendments and Waivers Subject to certain exceptions, the Note Documents may be amended, supplemented or otherwise modified with the consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, such Notes) and, subject to certain exceptions, any default or compliance with any provisions thereof may be waived with the consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, such Notes). However, without the consent of Holders holding not less than 90% of the then outstanding aggregate principal amount of Notes affected, an amendment or waiver may not, with respect to any such series of the Notes held by a non-consenting Holder: (1) reduce the principal amount of such Notes whose Holders must consent to an amendment; (2) reduce the stated rate of or extend the stated time for payment of interest on any such Note; (3) reduce the principal of, or extend the Stated Maturity of, any such Note; (4) reduce the premium payable upon the redemption of any such Note or change the time at which any such Note may be redeemed, in each case as described above under “—Optional Redemption”; (5) make any such Note payable in money other than that stated in such Note; (6) impair the right of any Holder to receive payment of principal of, and interest on, such Holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any such payment on or with respect to such Holder’s Notes; (7) make any change in the provision of the Indenture described under “—Withholding Taxes” that adversely affects the right of any Holder of such Notes in any material respect or amends the terms of such Notes in a way that would result in a loss of an exemption from any of the Taxes described thereunder or an exemption from any obligation to withhold or deduct Taxes so described thereunder unless the Payor agrees to pay Additional Amounts, if any, in respect thereof; (8) release all or substantially all of the Collateral granted for the benefit of the Holders other than pursuant to the terms of the relevant Security Documents, the Indenture and any Intercreditor Agreement; (9) waive a Default or Event of Default with respect to the nonpayment of principal, premium or interest (except (i) pursuant to a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of such Notes and a waiver of the payment default that resulted from such acceleration or (ii) as otherwise provided under paragraph three of “Events of Default”); or (10) make any change in the amendment or waiver provisions which require the Holders’ consent described in this sentence. Notwithstanding the foregoing, without the consent of any Holder, the Issuer, the Trustee, the Security Agent and the other parties thereto, as applicable, may amend or supplement any Note Document to: (1) cure any ambiguity, omission, defect, error or inconsistency, conform any provision to this “Description of the Notes,” or reduce the minimum denomination of the Notes; (2) provide for the assumption by a successor Person of the obligations of the Issuer or any Guarantor under any Note Document; (3) provide for uncertificated Notes in addition to or in place of certificated Notes (provided that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code);

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(4) add to the covenants or provide for a Guarantee for the benefit of the Holders, directly or indirectly, or surrender any right or power conferred upon the Issuer or any Restricted Subsidiary;

(5) make any change that does not adversely affect the rights of any Holder in any material respect; (6) make such provisions as necessary (as determined in good faith by the Issuer) for the issuance of Additional Notes; (7) provide for any Restricted Subsidiary to provide a Guarantee in accordance with the covenant described under “—Certain Covenants—Limitation on Indebtedness” and “—Certain Covenants—Additional Guarantors,” to add Guarantees with respect to the Notes, to add Collateral for the benefit of the Notes, or to confirm and evidence the release, termination, discharge or retaking of any Guarantee or Lien (including the Collateral and the Security Documents) with respect to or securing the Notes when such release, termination, discharge or retaking is provided for under the Indenture, the relevant Security Documents or any Intercreditor Agreement; (8) to evidence and provide for the acceptance and appointment under the Note Documents of a successor Trustee or Security Agent pursuant to the requirements thereof or to provide for the accession by the Trustee or Security Agent to any Note Document; (9) in the case of the Security Documents, to mortgage, pledge, hypothecate or grant a security interest in favor of the Security Agent for the benefit of the Holders in any property which is required by the Indenture to be mortgaged, pledged or hypothecated, or in which a security interest is required to be granted to the Security Agent, or to the extent necessary to grant a security interest for the benefit of any Person; provided that the granting of such security interest is not prohibited by the Indenture and the covenant described under “—Certain Covenants—No Impairment of Security Interest” is complied with; or (10) to create or evidence the relevant priority of any Permitted Lien or Permitted Collateral Lien. In formulating its decisions on such matters, the Trustee shall be entitled to rely on such evidence as it deems appropriate including Officer’s Certificates and Opinions of Counsel. The consent of the Holders is not necessary under the Indenture to approve the particular form of any proposed amendment of any Note Document. It is sufficient if such consent approves the substance of the proposed amendment. A consent to any amendment or waiver under the Indenture by any Holder of Notes given in connection with a tender of such Holder’s Notes will not be rendered invalid by such tender.

Acts by Holders In determining whether the Holders of the required aggregate principal amount of the Notes have concurred in any direction, waiver or consent, any Notes owned by the Issuer or by any Person directly or indirectly controlled, or controlled by, or under direct or indirect common control with, the Issuer will be disregarded and deemed not to be outstanding.

Defeasance The Issuer at any time may terminate all its and each Guarantor’s obligations under the Notes and the Indenture (“legal defeasance”) and cure all then existing Defaults and Events of Default, except for certain obligations, including those respecting the defeasance trust, the rights, powers, trusts, duties, immunities and indemnities of the Trustee and the obligations of the Issuer in connection therewith and obligations concerning issuing temporary Notes, registrations of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust. Subject to the foregoing, if the Issuer exercises its legal defeasance option, the Security Documents in effect at such time will terminate (other than with respect to the defeasance trust). The Issuer at any time may terminate its and each Guarantor’s obligations under the covenants described under “— Certain Covenants” (other than with respect to clauses (1) and (2) of the covenant described under “—Certain Covenants— Merger and Consolidation”) and “—Change of Control” and the default provisions relating to such covenants described under “—Events of Default” above, the operation of the cross-default upon a payment default, the cross acceleration provisions, the bankruptcy provisions with respect to the Issuer, its Significant Subsidiaries and a group of its Restricted Subsidiaries, that taken together, would constitute a Significant Subsidiary, the judgment default provision and the security default provisions described under “—Events of Default” above (“covenant defeasance”).

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The Issuer at its option at any time may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option. If the Issuer exercises its legal defeasance option, payment of the Notes may not be accelerated because of an Event of Default with respect to the Notes. If the Issuer exercises its covenant defeasance option with respect to the Notes, payment of the Notes may not be accelerated because of an Event of Default specified in clauses (3) (other than with respect to clauses (1) and (2) of the covenant described under “—Certain Covenants—Merger and Consolidation”), (4), (5), (6), (7) (other than with respect to the Issuer), (8) or (9) under “—Events of Default” above. In order to exercise either defeasance option, the Issuer must irrevocably deposit in trust (the “defeasance trust”) with the Trustee (or such entity designated or appointed (as agent) by the Trustee for this purpose) cash in euros or euro- denominated European Government Obligations or a combination thereof for the payment of principal, premium, if any, and interest on the Notes to redemption or maturity, as the case may be, and must comply with certain other conditions, including delivery to the Trustee of: (1) an Opinion of Counsel in the United States to the effect that Holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject to U.S. federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred (and in the case of legal defeasance only, such Opinion of Counsel in the United States must be based on a ruling of the U.S. Internal Revenue Service or other change in applicable U.S. federal income tax law since the issuance of the Notes); (2) an Officer’s Certificate stating that the deposit was not made by the Issuer with the intent of defeating, hindering, delaying, defrauding or preferring any creditors of the Issuer; (3) an Officer’s Certificate and an Opinion of Counsel (which opinion of counsel may be subject to customary assumptions and exclusions), each stating that that all conditions precedent provided for or relating to legal defeasance or covenant defeasance, as the case may be, have been complied with; (4) an Opinion of Counsel to the effect that the trust resulting from the deposit does not constitute, or is qualified as, a regulated investment company under the U.S. Investment Company Act of 1940; and (5) the Issuer delivers to the Trustee all other documents or other information that the Trustee may reasonably require in connection with either defeasance option.

Satisfaction and Discharge The Indenture, and the rights of the Trustee and the Holders under the Security Documents, will be discharged and cease to be of further effect (except as to surviving rights of conversion or transfer or exchange of the Notes, as expressly provided for in the Indenture) as to all outstanding Notes when (1) either (a) all the Notes previously authenticated and delivered (other than certain lost, stolen or destroyed Notes and certain Notes for which provision for payment was previously made and thereafter the funds have been released to the Issuer) have been delivered to the Paying Agent or Registrar for cancellation; or (b) all Notes not previously delivered to the Paying Agent or Registrar for cancellation (i) have become due and payable, (ii) will become due and payable at their Stated Maturity within one year or (iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer; (2) the Issuer has deposited or caused to be deposited with the Trustee (or such entity designated or appointed (as agent) by the Trustee for this purpose), euros or euro-denominated European Government Obligations or a combination thereof in an amount sufficient to pay and discharge the entire indebtedness on the Notes not previously delivered to the Paying Agent or Registrar for cancellation, for principal, premium, if any, and interest to the date of deposit (in the case of Notes that have become due and payable), or to the Stated Maturity or redemption date, as the case may be; (3) the Issuer has paid or caused to be paid all other sums payable under the Indenture; (4) the Issuer has delivered irrevocable instructions under the Indenture to apply the deposited money towards payment of the Notes at maturity or on the redemption date, as the case may be; and (5) the Issuer has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel each to the effect that all conditions precedent under the “—Satisfaction and Discharge” section of the Indenture relating to the satisfaction and discharge of the Indenture have been complied with, provided that any such counsel may rely on any Officer’s Certificate as to matters of fact (including as to compliance with the foregoing clauses (1), (2), (3) and (4)).

No Personal Liability of Directors, Officers, Employees and Shareholders No director, officer, employee, incorporator or shareholder of the Issuer or any of its Subsidiaries or Affiliates, as such, shall have any liability for any obligations of the Issuer under the Note Documents or for any claim based on, in respect of, or 187

by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the U.S. federal securities laws and it is the view of the SEC that such a waiver is against public policy.

Concerning the Trustee and Certain Agents The Law Debenture Trust Corporation p.l.c. is to be appointed as Trustee under the Indenture. The Indenture will provide that, except during the continuance of an Event of Default, the Trustee will perform only such duties as are set forth specifically in such Indenture. During the existence of an Event of Default, the Trustee will exercise such of the rights and powers vested in it under the Indenture and use the same degree of care that a prudent Person would use in conducting its own affairs. The permissive rights of the Trustee to take or refrain from taking any action enumerated in the Indenture will not be construed as an obligation or duty. The Trustee, Security Agent, Paying Agents, Transfer Agent and Registrar will be permitted to engage in other transactions with the Issuer and its Affiliates and Subsidiaries. The Indenture will set out the terms under which the Trustee may retire or be removed, and replaced. Such terms will include, among others, (1) that the Trustee may be removed at any time by the Holders of a majority in principal amount of the then outstanding Notes, or may resign at any time by giving written notice to the Issuer and (2) that if the Trustee at any time (a) has or acquires a conflict of interest that is not eliminated or (b) becomes incapable of acting as Trustee or becomes insolvent or bankrupt, then the Issuer may remove the Trustee, or any Holder who has been a bona fide Holder for not less than 6 months may petition any court for removal of the Trustee and appointment of a successor Trustee. Any removal or resignation of the Trustee shall not become effective until the acceptance of appointment by the successor Trustee. The Indenture will contain provisions for the indemnification of the Trustee for any loss, liability and expenses incurred without negligence, willful misconduct or fraud on its part, arising out of or in connection with the acceptance or administration of the Indenture.

Notices All notices to Holders of Notes will be validly given if mailed to them at their respective addresses in the register of the Holders of the Notes, if any, maintained by the Registrar. In addition, for so long as any of the Notes are listed on the Irish Stock Exchange and the rules of the Irish Stock Exchange shall so require, notices with respect to the Notes will be published in a newspaper having general circulation in Dublin (which is expected to be The Irish Times) or, to the extent and in the manner permitted by such rules, posted on the official website of the Irish Stock Exchange (www.ise.ie). In addition, for so long as any Notes are represented by Global Notes, all notices to Holders of the Notes will be delivered to Euroclear and Clearstream, each of which will give such notices to the holders of Book-Entry Interests, in substitution of the aforementioned mailing. Such notices may also be published on the website of the Irish Stock Exchange (www.ise.ie), to the extent and in the manner permitted by the rules of the Irish Stock Exchange. Each such notice shall be deemed to have been given on the date of such publication or, if published more than once on different dates, on the first date on which publication is made; provided that, if notices are mailed, such notice shall be deemed to have been given on the later of such publication and the seventh day after being so mailed. Any notice or communication mailed to a Holder shall be mailed to such Person by first-class mail or other equivalent means and shall be sufficiently given to such Holder if so mailed within the time prescribed. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.

Prescription Claims against the Issuer or any Guarantor for the payment of principal, or premium, if any, on the Notes will be prescribed five years after the applicable due date for payment thereof. Claims against the Issuer or any Guarantor for the payment of interest on the Notes will be prescribed three years after the applicable due date for payment of interest.

Currency Indemnity and Calculation of Euro-Denominated Restrictions The euro is the sole currency of account and payment for all sums payable by the Issuer under or in connection with the Notes, including damages. Any amount received or recovered in a currency other than euro, whether as a result of, or the 188

enforcement of, a judgment or order of a court of any jurisdiction, in the winding-up or dissolution of the Issuer or otherwise by any Holder or by the Trustee, in respect of any sum expressed to be due to it from the Issuer will only constitute a discharge of the obligations of the Issuer to the extent of the euro amount which the recipient is able to purchase with the amount so received or recovered in that other currency on the date of that receipt or recovery (or, if it is not practicable to make that purchase on that date, on the first date on which it is practicable to do so). If that euro amount is less than the euro amount expressed to be due to the recipient or the Trustee under any Note, the Issuer will indemnify them against any loss sustained by such recipient or the Trustee as a result. In any event, the Issuer will indemnify the recipient or the Trustee on a joint or several basis against the cost of making any such purchase. For the purposes of this currency indemnity provision, it will be prima facie evidence of the matter stated therein for the Holder of a Note or the Trustee to certify in a manner reasonably satisfactory to the Issuer (indicating the sources of information used) the loss it Incurred in making any such purchase. These indemnities constitute a separate and independent obligation from the Issuer’s other obligations, will give rise to a separate and independent cause of action, will apply irrespective of any waiver granted by any Holder of a Note or the Trustee (other than a waiver of the indemnities set out herein) and will continue in full force and effect despite any other judgment, order, claim or proof for a liquidated amount in respect of any sum due under any Note or to the Trustee. Except as otherwise specifically set forth herein, for purposes of determining compliance with any euro-denominated restriction herein, the euro equivalent amount for purposes hereof that is denominated in a non-euro currency shall be calculated based on the relevant currency exchange rate in effect on the date such non-euro amount is Incurred or made, as the case may be.

Enforceability of Judgments Since substantially all the assets of the Issuer are held by Subsidiaries of the Issuer outside the United States, and any judgment obtained in the United States against the Issuer, including judgments with respect to the payment of principal, premium, if any, interest, Additional Amounts, if any, and any redemption price and any purchase price with respect to the Notes may not be collectable within the United States.

Consent to Jurisdiction and Service In relation to any legal action or proceedings arising out of or in connection with the Indenture and the Notes and any Note Guarantees, the Issuer and any Guarantor will in the Indenture, or a supplemental indenture, irrevocably submit to the non-exclusive jurisdiction of the federal and state courts in the Borough of Manhattan in the City of New York, County and State of New York, United States.

Governing Law The Indenture and the Notes, including any Note Guarantees, and the rights and duties of the parties thereunder will be governed by and construed in accordance with the laws of the State of New York.

Certain Definitions “Acquired Indebtedness” means Indebtedness (1) of a Person or any of its Subsidiaries existing at the time such Person becomes a Restricted Subsidiary, or (2) assumed in connection with the acquisition of assets from such Person, in each case, whether or not Incurred by such Person in connection with such Person becoming a Restricted Subsidiary of the Issuer or such acquisition or (3) of a Person at the time such Person merges with or into or consolidates or otherwise combines with the Issuer or any Restricted Subsidiary. Acquired Indebtedness shall be deemed to have been Incurred, with respect to clause (1) of the preceding sentence, on the date such Person becomes a Restricted Subsidiary and, with respect to clause (2) of the preceding sentence, on the date of consummation of such acquisition of assets and, with respect to clause (3) of the preceding sentence, on the date of the relevant merger, consolidation or other combination. “Additional Assets” means: (1) any property or assets (other than Indebtedness and Capital Stock) used or to be used by the Issuer, a Restricted Subsidiary or otherwise useful in a Similar Business (it being understood that capital expenditures shall be deemed an investment in Additional Assets); (2) the Capital Stock of a Person that is engaged in a Similar Business and becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Issuer or a Restricted Subsidiary of the Issuer; or 189

(3) Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary of the Issuer. “Affiliate” of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing. “Applicable Premium” means, with respect to any Note, the greater of: (1) 1% of the principal amount of such Note; and (2) on any redemption date, the excess (to the extent positive) of: (a) the present value at such redemption date of (i) the redemption price of such Note at March 31, 2016 (such redemption price (expressed in percentage of principal amount) being set forth in the table under “—Optional Redemption” (excluding accrued but unpaid interest)), plus (ii) all required interest payments due on such Note through March 31, 2016 (excluding accrued but unpaid interest), computed upon the redemption date using a discount rate equal to the Bund Rate at such redemption date plus 50 basis points; over (b) the outstanding principal amount of such Note, as calculated by the Issuer or on behalf of the Issuer by such Person as the Issuer shall designate. For the avoidance of doubt, calculation of the Applicable Premium shall not be a duty or obligation of the Trustee or Paying Agent. “Asset Disposition” means any direct or indirect sale, lease (other than an operating lease entered into in the ordinary course of business), transfer, issuance or other disposition, or a series of related sales, leases (other than operating leases entered into in the ordinary course of business), transfers, issuances or dispositions that are part of a common plan, of shares of Capital Stock of a Subsidiary (other than directors’ qualifying shares or shares required by applicable law to be held by a Person other than the Issuer or a Subsidiary), property or other assets (each referred to for the purposes of this definition as a “disposition”) by the Issuer or any of its Restricted Subsidiaries, including any disposition by means of a merger, consolidation or similar transaction. Notwithstanding the preceding provisions of this definition, the following items shall not be deemed to be Asset Dispositions: (1) a disposition by a Restricted Subsidiary to the Issuer or by the Issuer or a Restricted Subsidiary to a Restricted Subsidiary; (2) a disposition of cash, Cash Equivalents, Temporary Cash Investments or Investment Grade Securities; (3) a disposition of inventory, real property or other assets in the ordinary course of business;

(4) a disposition of obsolete, surplus or worn out equipment or other assets or equipment, facilities or inventory or other assets that are no longer used or useful in the conduct of the business of the Issuer and its Restricted Subsidiaries; (5) transactions permitted under “—Certain Covenants—Merger and Consolidation” or a transaction that constitutes a Change of Control; (6) an issuance or transfer of Capital Stock by a Restricted Subsidiary to the Issuer or to another Restricted Subsidiary or as part of, or pursuant to, an equity incentive or compensation plan approved by its Board of Directors or an issuance or sale by a Restricted Subsidiary of Preferred Stock that is permitted by the covenant described above under “—Certain Covenants—Limitation on Indebtedness”; (7) any dispositions of Capital Stock, properties or assets in a single transaction or series of related transactions with a fair market value (as determined in good faith by the Issuer) of less than €5 million or, if greater, 0.5% of Total Assets; (8) any Restricted Payment that is permitted or not prohibited to be made, under and in compliance with the covenant described above under “—Certain Covenants—Limitation on Restricted Payments”, any transaction specifically excluded from the definition of Restricted Payments and any Permitted Payment or Permitted

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Investment or, solely for purposes of clause (3) of the first paragraph under “—Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock,” asset sales, the proceeds of which are used to make such Restricted Payments or Permitted Investments; (9) dispositions in connection with the granting of Liens permitted by the covenant described above under the caption “—Certain Covenants—Limitation on Liens;” (10) dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements; (11) the licensing, sub-licensing, lease or assignment of intellectual property or other general intangibles and licenses, sub-licenses, leases, subleases, assignments or other dispositions of other property, in each case, in the ordinary course of business; (12) foreclosure, condemnation, taking by eminent domain or any similar action with respect to any property or other assets; (13) the sale or discount (with or without recourse, and on customary or commercially reasonable terms) of accounts receivable or notes receivable arising in the ordinary course of business, or the conversion or exchange of accounts receivable for notes receivable; (14) any disposition of Capital Stock, Indebtedness or other securities of an Unrestricted Subsidiary; (15) any disposition of Capital Stock of a Restricted Subsidiary pursuant to an agreement or other obligation with or to a Person (other than the Issuer or a Restricted Subsidiary) from whom such Restricted Subsidiary was acquired, or from whom such Restricted Subsidiary acquired its business and assets (having been newly formed in connection with such acquisition), made as part of such acquisition and in each case comprising all or a portion of the consideration in respect of such sale or acquisition; (16) any surrender or waiver of contract rights or the settlement, release, recovery on or surrender of contract, tort or other claims of any kind; (17) any disposition of assets to a Person who is providing services related to such assets, the provision of which have been or are to be outsourced by the Issuer or any Restricted Subsidiary to such Person in relation to information technology, accounting and other clerical or ancillary functions; provided, however, that the Board of Directors of the Issuer shall certify that in the opinion of the Board of Directors, the outsourcing transaction will be economically beneficial to the Issuer and its Restricted Subsidiaries (considered as a whole); (18) any disposition with respect to property built, owned or otherwise acquired by the Issuer or any Restricted Subsidiary pursuant to customary sale and lease-back transactions, asset securitizations and other similar financings permitted by the Indenture;

(19) sales or dispositions of receivables in connection with any Qualified Receivables Financing or any factoring transaction or in the ordinary course of business; (20) any transfer, termination, unwinding or other disposition of Hedging Agreements not for speculative purposes; and (21) any disposition of Capital Stock of a Program Subsidiary in the ordinary course of business. “Associate” means (1) any Person engaged in a Similar Business of which the Issuer or its Restricted Subsidiaries are the legal and beneficial owners of between 20% and 50% of all outstanding Voting Stock and (2) any joint venture entered into by the Issuer or any Restricted Subsidiary of the Issuer. “Board of Directors” means (1) with respect to the Issuer or any corporation, the board of directors (including any “conseil d’administration”) or managers, as applicable, of the corporation (which, in the case of any corporation having both a supervisory board (including any “conseil de surveillance”) and an executive or management board (including any “directoire”), shall be the executive or management board), or any duly authorized committee thereof; (2) with respect to any partnership, the board of directors or other governing body of the general partner of the partnership or any duly authorized committee thereof; (3) with respect to a limited liability company, the managing member or members (or analogous governing body) or any controlling committee of managing members thereof; and (4) with respect to any other Person, the board or any duly authorized committee of such Person serving a similar function. For the purposes of the definition of 191

“Change of Control” only, Board of Directors of the Issuer shall mean the Issuer’s supervisory board or its managing board. Whenever any provision requires any action or determination to be made by, or any approval of, a Board of Directors, such action, determination or approval shall be deemed to have been taken or made if approved by a majority of the directors (excluding employee representatives, if any) on any such Board of Directors (whether or not such action or approval is taken as part of a formal board meeting or as a formal board approval). “Bund Rate” means the yield to maturity at the time of computation of direct obligations of the Federal Republic of Germany (Bunds or Bundesanleihen) with a constant maturity (as officially compiled and published in the most recent financial statistics that has become publicly available at least two Business Days (but not more than five Business Days) prior to the redemption date (or, if such financial statistics are not so published or available, any publicly available source of similar market data selected by the Issuer in good faith)) most nearly equal to the period from the redemption date to March 31, 2016; provided, however, that if the period from the redemption date to March 31, 2016 is not equal to the constant maturity of a direct obligation of the Federal Republic of Germany for which a weekly average yield is given, the Bund Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of direct obligations of the Federal Republic of Germany for which such yields are given, except that if the period from such redemption date to March 31, 2016 is less than one year, the weekly average yield on actually traded direct obligations of the Federal Republic of Germany adjusted to a constant maturity of one year shall be used. “Business Day” means each day that is not a Saturday, Sunday or other day on which banking institutions in Paris, France, London, United Kingdom, or New York, New York, United States are authorized or required by law to close; provided, however, that for any payments to be made under the Indenture, such day shall also be a day on which the Trans- European Automated Real-time Gross Settlement Express Transfer (“TARGET”) payment system is open for the settlement of payments. “CA-CIB” means Crédit Agricole Corporate and Investment Bank (formerly Calyon, until February 2010), a société anonyme governed by French law, having its registered office at 9, quai du Président Paul Doumer, 92920 Paris La Défense, France, registered under number 304 187 701 with the Nanterre Trade and Companies Register (Registre du Commerce et des Sociétés) and its successors or assigns. “CA-CIB Heads of Terms” means the heads of terms agreement dated as of March 17, 2014 among the Issuer, Financière Daunou 10 S.à r. l. and Crédit Agricole Corporate and Investment Bank, as amended or supplemented from time to time. “Capital Stock” of any Person means any and all shares of, rights to purchase, warrants or options for, or other equivalents of or partnership or other interests in (however designated), equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity. “Capitalized Lease Obligations” means an obligation that is required to be classified and accounted for as a capitalized lease for financial reporting purposes on the basis of IFRS (as in effect on the Issue Date for purposes of determining whether a lease is a capital lease). The amount of Indebtedness represented by such obligation will be the capitalized amount of such obligation at the time any determination thereof is to be made as determined on the basis of IFRS, and the Stated Maturity thereof will be the date of the last payment of rent or any other amount due under such lease prior to the first date such lease may be terminated without penalty. “Cash Equivalents” means: (1) securities issued or directly and fully Guaranteed or insured by the United States or Canadian governments, a Permissible Jurisdiction, Japan, Switzerland or Norway or, in each case, any agency or instrumentality of thereof (provided that the full faith and credit of such country or such member state is pledged in support thereof), having maturities of not more than two years from the date of acquisition; (2) certificates of deposit, time deposits, eurodollar time deposits, overnight bank deposits or bankers’ acceptances having maturities of not more than one year from the date of acquisition thereof issued by any Lender or by any bank or trust company (a) whose commercial paper is rated at least “A-1” or the equivalent thereof by S&P or at least “P-1” or the equivalent thereof by Moody’s (or if at the time neither is issuing comparable ratings, then a comparable rating of another Nationally Recognized Statistical Rating Organization) or (b) (in the event that the bank or trust company does not have commercial paper which is rated) having combined capital and surplus in excess of €500 million;

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(3) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clauses (1) and (2) entered into with any bank meeting the qualifications specified in clause (2) above; (4) commercial paper rated at the time of acquisition thereof at least “A-2” or the equivalent thereof by S&P or “P- 2” or the equivalent thereof by Moody’s or carrying an equivalent rating by a Nationally Recognized Statistical Rating Organization, if both of the two named rating agencies cease publishing ratings of investments or, if no rating is available in respect of the commercial paper, the issuer of which has an equivalent rating in respect of its long-term debt, and in any case maturing within one year after the date of acquisition thereof; (5) readily marketable direct obligations issued by any state of the United States of America, any province of Canada, any Permissible Jurisdiction, Japan, Switzerland or Norway or any political subdivision thereof, in each case, having one of the two highest rating categories obtainable from either Moody’s or S&P (or, if at the time, neither is issuing comparable ratings, then a comparable rating of another Nationally Recognized Statistical Rating Organization) with maturities of not more than two years from the date of acquisition; (6) Indebtedness or preferred stock issued by Persons with a rating of “BBB-” or higher from S&P or “Baa3” or higher from Moody’s (or, if at the time, neither is issuing comparable ratings, then a comparable rating of another Nationally Recognized Statistical Rating Organization) with maturities of 12 months or less from the date of acquisition; (7) bills of exchange issued in the United States, Canada, a Permissible Jurisdiction, Switzerland, Norway or Japan eligible for rediscount at the relevant central bank and accepted by a bank (or any dematerialized equivalent); and (8) interests in any investment company, money market or enhanced high yield fund which invests 95% or more of its assets in instruments of the type specified in clauses (1) through (7) above. “Change of Control” means the occurrence of any of the following: (1) the Issuer becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) any “person” or “group” of related persons (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act as in effect on the Issue Date), other than one or more Permitted Holders, being or becoming the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act as in effect on the Issue Date), directly or indirectly, of more than 50% of the total voting power of the Voting Stock of the Issuer; provided that for the purposes of this clause, (x) no Change of Control shall be deemed to occur by reason of the Issuer becoming a Subsidiary of a Successor Parent and (y) any Voting Stock of which any Permitted Holder is the “beneficial owner” (as so defined) shall not be included in any Voting Stock of which any such person or group is the “beneficial owner” (as so defined), unless that person or group is not an Affiliate of a Permitted Holder and has greater voting power with respect to that Voting Stock; (2) following the Initial Public Offering of the Issuer or any Parent, during any period of two consecutive years, individuals who at the beginning of such period constituted the majority of the directors (excluding any employee representatives, if any) on the Board of Directors of the Issuer or any Parent (together with any new directors whose election by the majority of such directors on such Board of Directors of the Issuer or any Parent or whose nomination for election by shareholders of the Issuer or any Parent, as applicable, was approved by a vote of the majority of such directors on the Board of Directors of the Issuer or any Parent then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) ceased for any reason to constitute the majority of the directors (excluding any employee representatives, if any) on the Board of Directors of the Issuer or any Parent, then in office; or (3) the sale, lease, transfer, conveyance or other disposition (other than by way of merger, consolidation or other business combination transaction), in one or a series of related transactions, of all or substantially all of the assets of the Issuer and its Restricted Subsidiaries taken as a whole to a Person, other than a Restricted Subsidiary or one or more Permitted Holders, provided that, in each case, a Change of Control shall not be deemed to have occurred if such Change of Control is also a Specified Change of Control Event. “CICE” means the competitive and employment tax credit pursuant to the French 3rd Amended Finance Law for 2012 (3ème loi de finances rectificative pour 2012) no 2012-1510 dated December 29, 2012, including any amendment, supplement, replacement or successor thereto and any legislation or regulation of a similar or related nature adopted in the Republic of France. 193

“CIR” means the research tax credit provided for in Articles 244 quater B and 199 ter B of the French tax code (“Code general des impôts”), including any amendment, supplement, replacement or successor thereto and any legislation or regulation of a similar or related nature adopted in the Republic of France. “Clearstream” means Clearstream Banking, société anonyme, as currently in effect or any successor securities clearing agency. “Code” means the United States Internal Revenue Code of 1986, as amended. “Collateral ” means any and all assets from time to time in which a security interest has been or will be granted on the Issue Date or thereafter pursuant to any Security Document to secure the obligations under the Indenture, the Notes or any Note Guarantee. “Commodity Hedging Agreements” means, in respect of a Person, any commodity purchase contract, commodity futures or forward contract, commodities option contract or other similar contract (including commodities derivative agreements or arrangements), to which such Person is a party or a beneficiary. “Consolidated EBITDA” means, with respect to any specified Person for any period, without duplication, the Consolidated Net Income of such Person for such period, plus the following to the extent deducted in calculating such Consolidated Net Income: (1) Consolidated Interest Expense; (2) Consolidated Income Taxes; (3) consolidated depreciation expense; (4) consolidated amortization or impairment expense; (5) any expenses, charges or other costs related to any Equity Offering, Investment, acquisition (including one-time amounts paid in connection with the acquisition or retention of one or more individuals comprising part of a management team retained to manage the acquired business; provided that such payments are made in connection with such acquisition and are consistent with the customary practice in the industry at the time of such acquisition), disposition, recapitalization or the Incurrence of any Indebtedness permitted by the Indenture (in each case whether or not successful), in each case, as determined in good faith by an Officer of the Issuer or the Company; (6) any minority interest expense (whether paid or not) consisting of income attributable to minority equity interests of third parties in such period, and the amount of any dividends declared or paid on, or other cash payments in respect of, Capital Stock of the Company or any other Restricted Subsidiary owned by any Person other than the Issuer or a Restricted Subsidiary; (7) the amount of management, monitoring, consulting and advisory fees and related expenses paid in such period to the Permitted Holders to the extent permitted by the covenant described under “—Certain Covenants—Limitation on Affiliate Transactions”; and (8) other non-cash charges, write-downs or items reducing Consolidated Net Income (excluding any such non-cash charge, write-down or item to the extent it represents an accrual of or reserve for cash charges in any future period) or other items classified by such Person as extraordinary, exceptional, unusual or nonrecurring items less other non-cash items of income increasing Consolidated Net Income (other than non-cash items increasing Consolidated Net Income pursuant to clauses (1) through (16) of the definition of Consolidated Net Income and excluding any such non-cash item of income to the extent it represents a receipt of cash in any future period); (9) the proceeds of any business interruption insurance received or that become receivable during such period to the extent the associated losses arising out of the event that resulted in the payment of such business interruption insurance proceeds were included in computing Consolidated Net Income; (10) payments received or that become receivable with respect to, expenses that are covered by the indemnification provisions in any agreement entered into by such Person in connection with an acquisition to the extent such expenses were included in computing Consolidated Net Income; and

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(11) any Receivables Fees and discounts on the sale of accounts receivables in connection with any Qualified Receivables Financing representing, in such Person’s reasonable determination, the implied interest component of such discount for such period, provided, however, any interest expense that was capitalized and accounted for as cost of inventory pursuant to IAS 23 “Borrowing costs” during the applicable period shall not be added back to Consolidated Net Income for such period for purposes of the “Consolidated EBITDA” definition. “Consolidated Fixed Charge Coverage Ratio” means, as of any date of determination, the ratio of (x) the Consolidated EBITDA of the Issuer for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding such date to (y) the Consolidated Interest Expense of the Issuer for such period; provided that, in calculating Consolidated Fixed Charge Coverage Ratio or any element thereof for any period, pro forma calculations will be made in good faith by an executive, financial or accounting Officer of the Issuer or the Company (including any pro forma cost reduction and cost saving synergies that have occurred or are reasonably expected to occur, in the good faith judgment of an executive, financial or accounting Officer of the Issuer or the Company (regardless of whether these cost reduction or cost saving synergies could then be reflected in pro forma financial statements)). In the event that the Issuer or any of its Restricted Subsidiaries Incurs, repays, repurchases, redeems, defeases or otherwise discharges any Indebtedness (other than ordinary working capital borrowings) subsequent to the commencement of the period for which the Consolidated Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Consolidated Fixed Charge Coverage Ratio is made (for the purpose of this definition, the “Calculation Date”) (but not giving effect to (i) any Indebtedness Incurred on the Calculation Date pursuant to the second paragraph under the caption “—Certain Covenants—Limitation on Indebtedness” (other than for purposes of calculating the Consolidated Fixed Charge Coverage Ratio under clause (5) of such second paragraph) or (ii) the repayment, repurchase, redemption, defeasance or other discharge of any Indebtedness on the Calculation Date, to the extent that such repayment, repurchase, redemption, defeasance or other discharge is made with the proceeds of Indebtedness Incurred pursuant to the second paragraph under the caption “—Certain Covenants—Limitation on Indebtedness”), then the Consolidated Fixed Charge Coverage Ratio will be calculated giving pro forma effect (as determined in good faith by an executive, financial or accounting Officer of the Issuer or the Company) to such Incurrence, repayment, repurchase, redemption, defeasance or other discharge of Indebtedness, and the use of the proceeds therefrom, as if the same had occurred on the first day of the four fiscal quarter reference period. In addition, for purposes of calculating the Consolidated Fixed Charge Coverage Ratio: (1) acquisitions of business entities or property and assets constituting a division or line of business that have been made by the Issuer or any of its Restricted Subsidiaries, including through mergers or consolidations, of any or by any Person, and including all related financing transactions and including increases in ownership of any Restricted Subsidiary, during the four fiscal quarter reference period or subsequent to such reference period and on or prior to the Calculation Date will be given pro forma effect (as determined in good faith by an executive, financial or accounting Officer of the Issuer or the Company and may include anticipated cost reduction and cost saving synergies) as if the same had occurred on the first day of the four fiscal quarter reference period; (2) the Consolidated EBITDA attributable to discontinued operations, as determined in accordance with IFRS, and operations, businesses or groups of assets that constitute an operating unit or division of a business (and ownership interests therein) disposed of on or prior to the Calculation Date, will be excluded on a pro forma basis as if the same had occurred on the first day of the four fiscal quarter reference period; (3) the Consolidated Interest Expense attributable to discontinued operations, as determined in accordance with IFRS, and operations, businesses or groups of assets that constitute an operating unit or division of a business (and ownership interests therein) disposed of on or prior to the Calculation Date, will be excluded on a pro forma basis as if the same had occurred on the first day of the four fiscal quarter reference period, but only to the extent that the obligations giving rise to such Consolidated Interest Expense will not be obligations of the Issuer or any of its Restricted Subsidiaries following the Calculation Date; (4) any Person that is a Restricted Subsidiary of the Issuer on the Calculation Date will be deemed to have been a Restricted Subsidiary of the Issuer at all times during the four fiscal quarter reference period; (5) any Person that is not a Restricted Subsidiary of the Issuer on the Calculation Date will be deemed not to have been a Restricted Subsidiary of the Issuer at any time during the four fiscal quarter reference period;

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(6) if any Indebtedness bears a floating rate of interest and such Indebtedness is to be given pro forma effect, the interest expense on such Indebtedness will be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire four fiscal quarter reference period (taking into account any Hedging Obligation applicable to such Indebtedness if such Hedging Obligation has a remaining term as at the Calculation Date in excess of 12 months, or, if shorter, at least equal to the remaining term of such Indebtedness); and (7) interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by an executive, financial or accounting Officer of the Issuer or the Company to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with IFRS. For the purposes of this definition and the definitions of Consolidated EBITDA, Consolidated Income Taxes, Consolidated Interest Expense and Consolidated Net Income, calculations will be as determined in good faith by an executive, financial or accounting Officer of the Issuer or the Company (including, to the extent applicable, in respect of anticipated cost reduction and cost saving synergies). In addition, for purposes of this definition and the definition of Consolidated Net Leverage Ratio, whenever pro forma effect is to be given to any Indebtedness Incurred pursuant to a revolving credit facility, the amount outstanding on the date of such calculation will be computed based on (1) the average daily balance of such Indebtedness during such four fiscal quarters or such shorter period for which such facility was outstanding or (2) if such facility was created after the end of such four fiscal quarters, the average daily balance of such facility to the date of such calculation. “Consolidated Income Taxes” means, with respect to any specified Person, taxes or other payments, including deferred Taxes, based on income, profits or capital, including pursuant to the Cotisation sur la valeur ajoutée des entreprises, regardless of the accounting treatment of such taxes or payments (including without limitation withholding taxes) and franchise taxes of the specified Person and its Restricted Subsidiaries whether or not paid, estimated, accrued or required to be remitted to any Governmental Authority. For the avoidance of doubt, subsidies and tax reduction grants such as the CICE or the CIR shall not be construed as taxes. “Consolidated Interest Expense” means, with respect any specified Person for any period (in each case, determined on the basis of IFRS), the consolidated interest expense of such Person and its Restricted Subsidiaries (net of any interest income), whether paid or accrued, including any pension liability interest cost and expected return on pension plan assets, plus or including (without duplication) any interest, costs and charges consisting of: (1) interest expense attributable to Capitalized Lease Obligations; (2) amortization of debt discount, but excluding amortization of debt issuance costs, fees and expenses and the expensing of any financing fees; (3) non-cash interest expense (but excluding any non-cash interest expense attributable to the movement in the mark- to-market valuation of Hedging Obligations or other derivative instruments); (4) the net payments (if any) on Interest Rate Agreements and Currency Agreements (excluding amortization of fees and discounts and unrealized gains and losses); (5) dividends on other distributions in respect of all Disqualified Stock of the Issuer (if the specified Person is the Issuer) and all Preferred Stock of any Restricted Subsidiary, to the extent held by Persons other than the Issuer or a subsidiary of the Issuer; (6) the consolidated interest expense that was capitalized during such period; and (7) interest actually paid by such Person or any of its Restricted Subsidiaries under any Guarantee of Indebtedness or other obligation of any other Person. Notwithstanding any of the foregoing, Consolidated Interest Expense shall not include (i) any interest accrued, capitalized or paid in respect of Subordinated Shareholder Funding, (ii) any commissions, discounts, yield and other fees and charges related to Qualified Receivables Financing, (iii) any payments on any operating leases, including without limitation any payment on any lease, sublease, rental or license of property (or guarantee thereof) which would be considered an operating lease under IFRS in effect as of the Issue Date, (iv) any interest expense attributable to any Ordinary Course Commitments, (v) any interest expense that was capitalized and accounted for as cost of inventory pursuant to IAS 23 “Borrowing costs” and (vi) any commissions, fees and other costs (including any related amortization thereof) in connection with the Refinancing (including the termination of any Hedging Agreements).

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“Consolidated Net Income” means, with respect to any specified Person for any period, the net income (loss) of such Person and its Restricted Subsidiaries determined on a consolidated basis on the basis of IFRS; provided, however, that there will not be included in such Consolidated Net Income: (1) subject to the limitations contained in clause (3) below, any net income (loss) of any Person if such Person is not a Restricted Subsidiary, except that the specified Person’s equity in the net income of any such Person for such period will be included in such Consolidated Net Income up to the aggregate amount of cash or Cash Equivalents actually distributed by such Person during such period to the specified Person or its Restricted Subsidiary as a dividend or other distribution or return on investment or could have been distributed, as reasonably determined by an Officer of the Issuer or the Company (subject, in the case of a dividend or other distribution or return on investment to a Restricted Subsidiary, to the limitations contained in clause (2) below) but including the net income (loss) allocable to minority interests in Qualified Minority Entities (except to the extent otherwise included in such Consolidated Net Income); (2) solely for the purpose of determining the amount available for Restricted Payments under clause (c)(i) of the first paragraph of the covenant described under “—Certain Covenants—Limitation on Restricted Payments,” any net income (loss) of any Restricted Subsidiary (other than Guarantors) if such Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to the specified Person by operation of the terms of such Restricted Subsidiary’s charter or any agreement, instrument, judgment, decree, order, statute or governmental rule or regulation applicable to such Restricted Subsidiary or its shareholders (other than (a) restrictions that have been waived or otherwise released, (b) restrictions pursuant to the Notes or the Indenture, (c) contractual restrictions in effect on the Issue Date with respect to such Restricted Subsidiary (including pursuant to the New Senior Facilities Agreement), and other restrictions with respect to such Restricted Subsidiary that, taken as a whole, are not materially less favorable to the Holders than such restrictions in effect on the Issue Date, (d) restrictions that arise under a Program Loan, (e) pursuant to applicable law, rule, regulation, order, governmental licenses, concessions, franchises or permits or (f) restrictions permitted under the covenant described under “—Certain Covenants—Limitation on Restrictions on Distributions from Restricted Subsidiaries”), except that the specified Person’s equity in the net income of any such Restricted Subsidiary for such period will be included in such Consolidated Net Income up to the aggregate amount of cash or Cash Equivalents or non-cash distributions to the extent converted into cash or Cash Equivalents actually distributed or that could have been distributed (including by way of a loan) by such Restricted Subsidiary during such period to the specified Person or another Restricted Subsidiary as a loan, dividend or other distribution (subject, in the case of a loan, dividend or distribution to another Restricted Subsidiary, to the limitation contained in this clause); (3) any net gain (or loss) realized upon the sale, abandonment or other disposition of any asset or disposed operations of the specified Person or any of its Restricted Subsidiaries (including pursuant to any sale/leaseback transaction) which is not sold, abandoned or otherwise disposed of in the ordinary course of business (as determined in good faith by an Officer or the Board of Directors of the Issuer or the Company); (4) any extraordinary, exceptional, unusual or nonrecurring gain, loss, charge or expense or any charges, expenses or reserves in respect of any restructuring, redundancy, relocation, refinancing, integration or severance or other post-employment arrangements, signing, retention or completion bonuses, transaction costs (including any related amortization thereof and any costs related to the Refinancing or any investments), acquisition costs, business optimization, system establishment, software or information technology implementation or development costs related to governmental investigations and curtailments or modifications to pension or post-retirement benefits schemes, litigation or any asset impairment charges or the financial impacts of natural disasters (including fire, flood, storm and related events), in each case, as determined in good faith by the Issuer or the Company; (5) the cumulative effect of a change in accounting principles; (6) any non-cash compensation charge or expense arising from any grant of stock, stock options or other equity based awards and any non-cash deemed finance charges in respect of any pension liabilities or other provisions; (7) all deferred financing costs written off and premiums paid or other expenses incurred directly in connection with any early extinguishment of Indebtedness and any net gain (loss) from any write-off or forgiveness of Indebtedness;

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(8) any unrealized gains or losses in respect of Hedging Obligations or any ineffectiveness recognized in earnings related to qualifying hedge transactions or the fair value of changes therein recognized in earnings for derivatives that do not qualify as hedge transactions, in each case, in respect of Hedging Obligations; (9) any unrealized foreign currency transaction gains or losses in respect of Indebtedness of any Person denominated in a currency other than the functional currency of such Person and any unrealized foreign exchange gains or losses relating to translation of assets and liabilities denominated in foreign currencies; (10) any unrealized foreign currency translation or transaction gains or losses in respect of Indebtedness or other obligations of the specified Person or any of its Restricted Subsidiary owing to the specified Person or any of its Restricted Subsidiary; (11) any purchase accounting effects including adjustments to inventory, property and equipment, software and other intangible assets and deferred revenues in component amounts required or permitted by IFRS and related authoritative pronouncements (including the effects of such adjustments pushed down to the specified Person and its Restricted Subsidiaries), as a result of any consummated acquisition or the amortization or write-off of any amounts thereof (including any write-off of in process research and development); (12) any goodwill or other intangible asset impairment charge, amortization or write-off; (13) Consolidated Income Taxes to the extent in excess of cash payments made in respect of such Consolidated Income Taxes; (14) the impact of capitalized, accrued or accreting or pay-in-kind interest or principal on Subordinated Shareholder Funding; (15) to the extent covered by insurance and actually reimbursed, or, so long as the Issuer or the Company has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to the extent that such amount is (a) not denied by the applicable carrier in writing within 180 days and (b) in fact reimbursed within 365 days of the date of such evidence (with a deduction for any amount so added back to the extent not so reimbursed within 365 days), losses with respect to business interruption; and (16) any minority interest expense (whether paid or not) consisting of income attributable to minority equity interests of third parties in such period, other than any amount of dividends declared or paid on Capital Stock of the Company or any other Restricted Subsidiary owned by any Person other than the Issuer or a Restricted Subsidiary. “Consolidated Net Leverage” means, with respect to any specified Person, the sum of the aggregate outstanding Indebtedness of such Person and its Restricted Subsidiaries (excluding Hedging Obligations permitted by clause (6) of the second paragraph of the covenant described under “—Certain Covenants—Limitation on Indebtedness”). “Consolidated Net Leverage Ratio” means, with respect to any specified Person as of any date of determination, the ratio of (x) the Consolidated Net Leverage of such Person less cash and Cash Equivalents of such Person and its Restricted Subsidiaries on such date to (y) the Consolidated EBITDA of such Person for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding such date; provided that, in calculating Consolidated Net Leverage Ratio or any element thereof for any period, pro forma calculations will be made in good faith by an executive, financial or accounting Officer of the Issuer or the Company (including any pro forma cost reduction and cost saving synergies that have occurred or are reasonably expected to occur, in the good faith judgment of an executive, financial or accounting Officer of the Issuer or the Company (regardless of whether these cost reduction or cost saving synergies could then be reflected in pro forma financial statements)); provided further, that in calculating Consolidated Net Leverage Ratio, no cash or Cash Equivalents shall be included in this calculation that are, or are derived from, the proceeds of Indebtedness in respect of which the pro forma calculation is to be made, except, for the avoidance of doubt, to the extent cash or Cash Equivalents will be expended in a transaction to which pro forma effect is given. In the event that such Person or any of its Subsidiaries Incurs, repays, repurchases, redeems, defeases or otherwise discharges any Indebtedness (other than ordinary working capital borrowings) subsequent to the commencement of the period for which the Consolidated Net Leverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Consolidated Net Leverage Ratio is made (for the purpose of this definition, the “Calculation Date”) (but not giving effect, except as otherwise specifically set forth herein, to (i) any Indebtedness Incurred on the Calculation Date pursuant to the second paragraph under the caption “—Certain Covenants—Limitation on Indebtedness” (other than for purposes of calculating the Consolidated Net Leverage Ratio under clause (5) of such second paragraph) or 198

(ii) the repayment, repurchase, redemption, defeasance or other discharge of any Indebtedness on the Calculation Date, to the extent that such repayment, repurchase, redemption, defeasance or other discharge is made with the proceeds of Indebtedness Incurred pursuant to the second paragraph under the caption “—Certain Covenants—Limitation on Indebtedness,” except for any such Indebtedness included in the calculation of the Consolidated Net Leverage Ratio), then the Consolidated Net Leverage Ratio will be calculated giving pro forma effect (as determined in good faith by an executive, financial or accounting Officer of the Issuer or the Company) to such Incurrence, repayment, repurchase, redemption, defeasance or other discharge of Indebtedness, and the use of the proceeds therefrom, as if the same had occurred on the first day of the four fiscal quarter reference period.

For purposes of calculating the Consolidated EBITDA for such period: (1) acquisitions of business entities or property and assets constituting a division or line of business that have been made by such Person or any of its Restricted Subsidiaries, including through mergers or consolidations of or by any Person, and including all related financing transactions and including increases in ownership of any Restricted Subsidiary, during the four fiscal quarter reference period or subsequent to such reference period and on or prior to the Calculation Date (including transactions giving rise to the need to calculate such Consolidated Net Leverage Ratio) will be given pro forma effect (as determined in good faith by an executive, financial or accounting Officer of the Issuer or the Company and may include anticipated cost reduction and cost saving synergies) as if the same had occurred on the first day of the four fiscal quarter reference period; (2) the Consolidated EBITDA attributable to discontinued operations, as determined in accordance with IFRS, and operations, businesses or groups of assets that constitute an operating unit or division of a business (and ownership interests therein) disposed of on or prior to the Calculation Date, will be excluded on a pro forma basis as if the same had occurred on the first day of the four fiscal quarter reference period; (3) the Consolidated Interest Expense attributable to discontinued operations, as determined in accordance with IFRS, and operations, businesses or groups of assets that constitute an operating unit or division of a business (and ownership interests therein) disposed of on or prior to the Calculation Date, will be excluded on a pro forma basis as if the same had occurred on the first day of the four fiscal quarter reference period, but only to the extent that the obligations giving rise to such Consolidated Interest Expense will not be obligations of such Person or any of its Restricted Subsidiaries following the Calculation Date; (4) any Person that is a Restricted Subsidiary of such Person on the Calculation Date will be deemed to have been a Restricted Subsidiary at all times during the four fiscal quarter reference period; (5) any Person that is not a Restricted Subsidiary of such Person on the Calculation Date will be deemed not to have been a Restricted Subsidiary at any time during the four fiscal quarter reference period; (6) if any Indebtedness bears a floating rate of interest and such Indebtedness is to be given pro forma effect, the interest expense on such Indebtedness will be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire four fiscal quarter reference period (taking into account any Hedging Obligation applicable to such Indebtedness if such Hedging Obligation has a remaining term as at the Calculation Date in excess of 12 months, or, if shorter, at least equal to the remaining term of such Indebtedness); (7) interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by an executive, financial or accounting Officer of the Issuer or the Company to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with IFRS; and (8) if, since the beginning of such period, a transfer of shares of, or other transaction has occurred or is contractually committed with respect to, such Person or any of its Restricted Subsidiaries, that constitutes an event that is contemplated by the definition of “Specified Change of Control Event” (any such transaction, a “Specified Change of Control Transaction”), and solely for the purposes of making the determination pursuant to “Specified Change of Control Event,” Consolidated EBITDA for such period shall be calculated after giving pro forma effect thereto (including any anticipated cost reduction and cost saving synergies from cooperation and other arrangements associated with the Specified Change of Control Transaction calculated in good faith by an executive, financial or chief accounting Officer of the Issuer or the Company) as if such Specified Change of Control Transaction (including such anticipated cost reduction and cost saving synergies associated with the Specified Change of Control Transaction calculated in good faith by an executive, financial or chief accounting Officer of the Issuer or the Company) had occurred on the first day of such period.

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For the purposes of this definition and the definitions of Consolidated EBITDA, Consolidated Income Taxes, Consolidated Interest Expense and Consolidated Net Income, calculations will be as determined in good faith by an executive, financial or chief accounting officer of the Issuer or the Company (including, to the extent applicable, in respect of anticipated cost reduction and cost saving synergies).

“Consolidated Net Secured Leverage” means, with respect to any specified Person, the sum of the aggregate outstanding Secured Indebtedness of such Person and its Restricted Subsidiaries (excluding Hedging Obligations permitted by clause (6) of the second paragraph of the covenant described under “—Certain Covenants—Limitation on Indebtedness”). “Consolidated Net Secured Leverage Ratio” means, with respect to any specified Person as of any date of determination, the ratio of (x) Consolidated Net Secured Leverage less cash and Cash Equivalents of such Person and its Restricted Subsidiaries at such date to (y) the Consolidated EBITDA of such Person for the most recently ended four full fiscal quarters for which internal consolidated financial statements are available, in each case calculated with such pro forma and other adjustments as are permitted or required when determining the Consolidated Net Leverage Ratio pursuant to the definition of Consolidated Net Leverage Ratio. “Contingent Obligations” means, with respect to any Person, any obligation of such Person guaranteeing in any manner, whether directly or indirectly, any operating lease, dividend or other obligation that does not constitute Indebtedness (“primary obligations”) of any other Person (the “primary obligor”), including any obligation of such Person, whether or not contingent: (1) to purchase any such primary obligation or any property constituting direct or indirect security therefor; (2) to advance or supply funds: (a) for the purchase or payment of any such primary obligation; or (b) to maintain the working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or (3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof. “Credit Facility” means, with respect to the Issuer or any of its Subsidiaries, one or more debt facilities, indentures or other arrangements (including the New Senior Facilities Agreement or commercial paper facilities and overdraft facilities) with banks, other financial institutions or investors providing for revolving credit loans, term loans, notes, receivables financing (including through the sale of receivables to such institutions or to special purpose entities formed to borrow from such institutions against such receivables), letters of credit or other Indebtedness, in each case, as amended, restated, modified, renewed, refunded, replaced, restructured, refinanced, repaid, increased or extended in whole or in part from time to time (and whether in whole or in part and whether or not with the original administrative agent and lenders or another administrative agent or agents or other banks or institutions and whether provided under the original New Senior Facilities Agreement or one or more other credit or other agreements, indentures, financing agreements or otherwise) and, in each case, including all agreements, instruments and documents executed and delivered pursuant to or in connection with the foregoing (including any notes and letters of credit issued pursuant thereto and any Guarantee and collateral agreement, patent and trademark security agreement, mortgages or letter of credit applications and other Guarantees, pledges, agreements, security agreements and collateral documents). Without limiting the generality of the foregoing, the term “Credit Facility” shall include any agreement or instrument (1) changing the maturity of any Indebtedness Incurred thereunder or contemplated thereby, (2) adding Subsidiaries of the Issuer as additional borrowers or guarantors thereunder, (3) increasing the amount of Indebtedness Incurred thereunder or available to be borrowed thereunder or (4) otherwise altering the terms and conditions thereof. “Currency Agreement” means, in respect of any Person, any foreign exchange contract, currency swap agreement, currency futures contract, currency option contract, currency derivative or other similar agreement to which such Person is a party or beneficiary. “Default” means any event which is, or after notice or passage of time or both would be, an Event of Default. “Designated Non-Cash Consideration” means the fair market value (as determined in good faith by the Issuer) of non- cash consideration received by the Issuer or one of its Restricted Subsidiaries in connection with an Asset Disposition that is so designated as Designated Non-Cash Consideration pursuant to an Officer’s Certificate, setting forth the basis of such 200

valuation, less the amount of cash, Cash Equivalents or Temporary Cash Investments received in connection with a subsequent payment, redemption, retirement, sale or other disposition of such Designated Non-Cash Consideration. A particular item of Designated Non-Cash Consideration will no longer be considered to be outstanding when and to the extent it has been paid, redeemed or otherwise retired or sold or otherwise disposed of in compliance with the covenant described under “—Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock.” “Designated Preference Shares” means, with respect to the Issuer or any Parent, Preferred Stock (other than Disqualified Stock) (1) that is issued for cash (other than to the Issuer or a Subsidiary of the Issuer or an employee stock ownership plan or trust established by the Issuer or any such Subsidiary for the benefit of their employees to the extent funded by the Issuer or such Subsidiary) and (2) that is designated as “Designated Preference Shares” pursuant to an Officer’s Certificate of the Issuer at or prior to the issuance thereof, the Net Cash Proceeds of which are excluded from the calculation set forth in clause (c)(ii) of the first paragraph of the covenant described under “—Certain Covenants—Limitation on Restricted Payments.” “Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person which by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable) or upon the happening of any event: (1) matures or is mandatorily redeemable for cash or in exchange for Indebtedness pursuant to a sinking fund obligation or otherwise; (2) is convertible or exchangeable for Indebtedness or Disqualified Stock (excluding Capital Stock which is convertible or exchangeable solely at the option of the Issuer or a Restricted Subsidiary); or (3) is or may become (in accordance with its terms) upon the occurrence of certain events or otherwise redeemable or repurchasable for cash or in exchange for Indebtedness at the option of the holder of the Capital Stock in whole or in part, in each case, on or prior to the earlier of (a) the Stated Maturity of the Notes or (b) the date on which there are no Notes outstanding; provided, however, that (i) only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date will be deemed to be Disqualified Stock and (ii) any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require the Issuer to repurchase such Capital Stock upon the occurrence of a change of control or asset sale (howsoever defined or referred to) shall not constitute Disqualified Stock if any such redemption or repurchase obligation is subject to compliance by the relevant Person with the covenant described under “—Certain Covenants—Limitation on Restricted Payments;” provided, further, that Disqualified Stock shall not include any Capital Stock of the Issuer that is redeemable or repurchasable for cash in connection with the CA-CIB Heads of Terms. “Equity Offering” means a sale of either (1) Capital Stock of the Issuer (other than Disqualified Stock) other than offerings registered on Form S-8 (or any successor form) under the Securities Act or any similar offering in other jurisdictions, or (2) Capital Stock or other securities, the proceeds of which are contributed to the equity (other than through the issuance of Disqualified Stock or Designated Preference Shares or through an Excluded Contribution) of, or as Subordinated Shareholder Funding to, the Issuer or any of its Restricted Subsidiaries. “Escrowed Proceeds” means the proceeds from the offering of any debt securities or other Indebtedness paid into an escrow account with an independent escrow agent on the date of the applicable offering or Incurrence pursuant to escrow arrangements that permit the release of amounts on deposit in such escrow account upon satisfaction of certain conditions or the occurrence of certain events. The term “Escrowed Proceeds” shall include any interest earned on the amounts held in escrow. “euro” or “€” means the currency introduced at the start of the third stage of the European economic and monetary union pursuant to the Treaty establishing the European Community, as amended by the Treaty on European Union. “Euroclear ” means Euroclear Bank SA/NV, or any successor securities clearing agency. “European Government Obligations” means any security that is (1) a direct obligation of Belgium, The Netherlands, France, Germany or any Permissible Jurisdiction, for the payment of which the full faith and credit of such country is pledged or (2) an obligation of a person controlled or supervised by and acting as an agency or instrumentality of any such country the payment of which is unconditionally Guaranteed as a full faith and credit obligation by such country, which, in either case under the preceding clause (1) or (2), is not callable or redeemable at the option of the issuer thereof.

“European Union” means all members of the European Union as of January 1, 2004. 201

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder, as amended. “Excluded Contribution” means Net Cash Proceeds or property or assets received by the Issuer after the Issue Date as capital contributions to the equity (other than through the issuance of Disqualified Stock or Designated Preference Shares) of the Issuer or from the issuance or sale (other than to a Restricted Subsidiary or an employee stock ownership plan or trust established by the Issuer or any Subsidiary of the Issuer for the benefit of its employees to the extent funded by the Issuer or any Restricted Subsidiary) of Capital Stock (other than Disqualified Stock or Designated Preference Shares) of the Issuer, in each case, to the extent designated as an Excluded Contribution pursuant to an Officer’s Certificate of the Issuer. “Existing Senior Facilities Agreement” means the Senior Facilities Agreement dated July 9, 2007, as amended or restated on July 27, 2007, January 23, 2009, June 30, 2009, November 25, 2009, March 10, 2010, July 25, 2011 and October 17, 2012, between, among others, the Issuer and the Company, as borrowers, Calyon and Merrill Lynch International, as mandated lead arrangers and bookrunners, and Calyon, as agent. “fair market value” may be conclusively established by means of an Officer’s Certificate or a resolution of the Board of Directors of the Issuer setting out such fair market value as determined by such Officer or such Board of Directors, as applicable, in good faith. “FD 10 Shareholder Loan Agreement” means the loan agreement between the Issuer and Financière Daunou 10 S.à r.l. dated June 30, 2009, as amended, restated or supplemented from time to time. “Fitch” means Fitch Ratings, Inc. or any of its successors or assigns that is a Nationally Recognized Statistical Rating Organization. “FN Administrative Support Agreement” means the administrative support agreement between the Company and Financière de Neuilly S.A.S. dated April 11, 2008, as amended or supplemented from time to time. “Governmental Authority” means any nation, sovereign or government, any state, province, territory or other political subdivision thereof, and any entity or authority exercising executive, legislative, judicial, regulatory, self-regulatory or administrative functions of or pertaining to government, including a central bank or stock exchange. “Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person, including any such obligation, direct or indirect, contingent or otherwise, of such Person: (1) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take-or-pay or to maintain financial statement conditions or otherwise); or (2) entered into primarily for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part), provided, however, that the term “Guarantee” will not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning. “Guarantor ” means any Subsidiary of the Issuer that provides a Guarantee for the Notes in accordance with the provisions of the Indenture, including its successors. “Hedging Obligations” of any Person means the obligations of such Person pursuant to any Interest Rate Agreement, Currency Agreement or Commodity Hedging Agreement (each, a “Hedging Agreement”). “Holder ” means each Person in whose name the Notes are registered on the Registrar’s books, which shall initially be the respective nominee of Clearstream and Euroclear. “IFRS” means International Financial Reporting Standards (formerly International Accounting Standards) (“IFRS”) endorsed from time to time by the European Union or any variation thereof with which the Issuer or its Restricted Subsidiaries are, or may be, required to comply; provided that at any date after the Issue Date the Issuer may make an irrevocable election to establish that “IFRS” shall mean IFRS as in effect on a date that is on or prior to the date of such election. “Incur” means issue, create, assume, enter into any Guarantee of, incur, extend or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise) will be deemed to be Incurred by such Restricted 202

Subsidiary at the time it becomes a Restricted Subsidiary and the terms “Incurred” and “Incurrence” have meanings correlative to the foregoing and any Indebtedness pursuant to any revolving credit or similar facility shall only be “Incurred” at the time any funds are borrowed thereunder. “Indebtedness” means, with respect to any Person on any date of determination (without duplication): (1) the principal of indebtedness of such Person for borrowed money; (2) the principal of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (3) all reimbursement obligations of such Person in respect of letters of credit, bankers’ acceptances or other similar instruments (the amount of such obligations being equal at any time to the aggregate then undrawn and unexpired amount of such letters of credit or other instruments plus the aggregate amount of drawings thereunder that have been reimbursed) (except to the extent such reimbursement obligations relate to trade payables and such obligations are satisfied within 30 days of Incurrence), in each case only to the extent that the underlying obligation in respect of which the instrument was issued would be treated as Indebtedness; (4) the principal component of all obligations of such Person to pay the deferred and unpaid purchase price of property (except trade payables or in connection with any purchase of property in the ordinary course of business), where the deferred payment is arranged primarily as a means of raising finance, which purchase price is due more than one year after the date of placing such property in service or taking final delivery and title thereto; (5) Capitalized Lease Obligations of such Person; (6) the principal component of all obligations, or liquidation preference, of such Person with respect to any Disqualified Stock or, with respect to any Restricted Subsidiary, any Preferred Stock (but excluding, in each case, any accrued dividends); (7) the principal component of all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided, however, that the amount of such Indebtedness will be the lesser of (a) the fair market value of such asset at such date of determination (as determined in good faith by the Issuer) and (b) the amount of such Indebtedness of such other Persons; (8) Guarantees by such Person of the principal component of Indebtedness of other Persons to the extent Guaranteed by such Person; and (9) to the extent not otherwise included in this definition, net obligations of such Person under Currency Agreements and Interest Rate Agreements (the amount of any such obligations to be equal at any time to the termination value of such agreement or arrangement giving rise to such obligation that would be payable by such Person at such time). The term “Indebtedness” shall not include (a) Subordinated Shareholder Funding, (b) any lease, concession or license of property (or Guarantee thereof) which would be considered an operating lease under IFRS as in effect on the Issue Date, (c) any asset retirement obligations, (d) any prepayments or deposits received from clients or customers in the ordinary course of business, (e) any obligations under any license, permit or other approval (or Guarantees given in respect of such obligations) Incurred prior to the Issue Date or in the ordinary course of business, (f) any obligations in respect of Ordinary Course Commitments of the Issuer and its Restricted Subsidiaries; provided that in the case of letters of credit, performance bonds or surety bonds provided by the Issuer or any Restricted Subsidiary, such letters of credit or bonds are not drawn upon, or, if and to the extent drawn upon, are honored in accordance with their terms and if, to be reimbursed, are reimbursed no later than the 10th business day following receipt by such Person of a demand for reimbursement following payment on the letter of credit or bond, (g) non-interest bearing installment obligations and accrued liabilities Incurred in the ordinary course of business that are not more than 90 days past due, (h) any obligation to make payments in respect of commission amounts collected by the Issuer or any of its Restricted Subsidiaries, (i) deferred or prepaid revenue, (j) any obligations arising by operation of law in respect of liabilities of entities in the form of Société Civile Immobilière (“SCI”) so long as the direct parent company of the SCI does not hold any material assets other than the shares in such SCI and the shareholders of such direct parent company are not liable for any liability of the SCI by operation of law and (k) any “parallel debt” obligations (including any Guarantees with respect thereof) created in connection with Indebtedness permitted to be Incurred and secured by a Lien under the Indenture. For the avoidance of doubt and notwithstanding the foregoing, the term “Indebtedness” excludes any accrued expenses and trade payables.

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The amount of Indebtedness of any Person at any time in the case of a revolving credit or similar facility shall be the total amounts of funds borrowed and then outstanding. The amount of Indebtedness of any Person at any date shall be determined as set forth above or otherwise provided in the Indenture, and (other than with respect to letters of credit or Guarantees or Indebtedness specified in clause (7), (8) or (9) above) shall equal the amount thereof that would appear on a balance sheet of such Person (excluding any notes thereto) prepared on the basis of IFRS. Indebtedness represented by loans, notes or other debt instruments shall not be included to the extent funded with the proceeds of Indebtedness which the Issuer or any Restricted Subsidiary has guaranteed or for which any of them is otherwise liable and which is otherwise included. Notwithstanding the above provisions, in no event shall the following constitute Indebtedness: (1) Contingent Obligations Incurred in the ordinary course of business and obligations under or in respect of Qualified Receivables Financings; (2) in connection with the purchase by the Issuer or any Restricted Subsidiary of any business, any post-closing payment adjustments to which the seller may become entitled to the extent such payment is determined by a final closing balance sheet or such payment depends on the performance of such business after the closing; provided, however, that, at the time of closing, the amount of any such payment is not determinable and, to the extent such payment thereafter becomes fixed and determined, the amount is paid within 30 days thereafter; or (3) for the avoidance of doubt, any obligations in respect of workers’ compensation claims, early retirement or termination obligations, pension fund obligations or contributions or similar claims, obligations, jubilee obligations or contributions or social security or wage Taxes. “Independent Financial Advisor” means an investment banking or accounting firm of international standing or any third-party appraiser of international standing; provided, however, that such firm or appraiser is not an Affiliate of the Issuer. “Initial Investors” means PAI, CA-CIB, and funds or partnerships managed, advised or controlled, directly or indirectly, by PAI or CA-CIB and any of their respective Affiliates. “Initial Public Offering” means an Equity Offering of common stock or other common equity interests of the Issuer or any Parent or any successor of the Issuer or any Parent (the “IPO Entity”) following which there is a Public Market and, as a result of which, the shares of common stock or other common equity interests of the IPO Entity in such offering are listed on an internationally recognized exchange or traded on an internationally recognized market. “Interest Rate Agreement” means, with respect to any Person, any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement to which such Person is party or a beneficiary. “Investment ” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of any direct or indirect advance, loan or other extensions of credit (other than advances or extensions of credit to customers, suppliers, directors, officers or employees of any Person in the ordinary course of business, and excluding any debt or extension of credit represented by a bank deposit other than a time deposit) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or the Incurrence of a Guarantee of any obligation of, or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by, such other Persons and all other items that are or would be classified as investments on a balance sheet prepared on the basis of IFRS; provided, however, that endorsements of negotiable instruments and documents in the ordinary course of business will not be deemed to be an Investment. If the Issuer or any Restricted Subsidiary issues, sells or otherwise disposes of any Capital Stock of a Person that is a Restricted Subsidiary such that, after giving effect thereto, such Person is no longer a Restricted Subsidiary, any Investment by the Issuer or any Restricted Subsidiary in such Person remaining after giving effect thereto will be deemed to be a new Investment at such time. For purposes of “—Certain Covenants—Limitation on Restricted Payments”: (1) “Investment” will include the portion (proportionate to the Issuer’s equity interest in a Restricted Subsidiary to be designated as an Unrestricted Subsidiary) of the fair market value of the net assets of such Restricted Subsidiary of the Issuer at the time that such Restricted Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Issuer will be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to (a) the Issuer’s “Investment” in such Subsidiary at the time of the designation of such Subsidiary as an Unrestricted Subsidiary less (b) the portion (proportionate to the Issuer’s equity interest in such Subsidiary) of 204

the fair market value of the net assets (as conclusively determined by the Board of Directors of the Issuer in good faith) of such Subsidiary at the time that such Subsidiary is so re-designated a Restricted Subsidiary; and (2) any property transferred to or from an Unrestricted Subsidiary will be valued at its fair market value at the time of such transfer, in each case as determined in good faith by the Board of Directors of the Issuer. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced (at the Issuer’s option) by any dividend, distribution, interest payment, return of capital, repayment or other amount or value received in respect of such Investment. “Investment Grade Securities” means: (1) securities issued or directly and fully Guaranteed or insured by the United States or Canadian government or any agency or instrumentality thereof (other than Cash Equivalents); (2) securities issued or directly and fully guaranteed or insured by a Permissible Jurisdiction or Switzerland, Norway or any agency or instrumentality thereof (other than Cash Equivalents); (3) debt securities or debt instruments with a rating of “A-” or higher from S&P or “A3” or higher by Moody’s or the equivalent of such rating by such rating organization or, if no rating of Moody’s or S&P then exists, the equivalent of such rating by any other Nationally Recognized Statistical Ratings Organization, but excluding any debt securities or instruments constituting loans or advances among the Issuer and its Subsidiaries; and (4) investments in any fund that invests exclusively in investments of the type described in clauses (1), (2) and (3) above which fund may also hold cash and Cash Equivalents pending investment or distribution. “Investment Grade Status” shall occur when the Notes receive any two of the following: (1) a rating of “BBB-” or higher from S&P; (2) a rating of “Baa3” or higher from Moody’s; or (3) a rating of “BBB-” or higher from Fitch, or the equivalent of such rating by either such rating organization or, if no rating of Fitch, Moody’s or S&P then exists, the equivalent of such rating by any other Nationally Recognized Statistical Ratings Organization. “IPO Market Capitalization” means an amount equal to (1) the total number of issued and outstanding shares of common stock or common equity interests of the IPO Entity at the time of closing of the Initial Public Offering multiplied by (2) the price per share at which such shares of common stock or common equity interests are sold in such Initial Public Offering.

“Issue Date” means March 31, 2014. “KB Shares Disposition” means any disposition, or issuance, of ordinary shares of the Company by the Issuer or any of its Restricted Subsidiaries (other than any issuance or transfer of ordinary shares by the Company to the Issuer or as a part of, or pursuant to, an equity incentive or compensation plan approved by the Board of Directors of the Company). “Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof). “Management Advances” means loans or advances made to, or Guarantees with respect to loans or advances made to, directors, officers, employees or consultants of any Parent, the Issuer or any Restricted Subsidiary: (1) (a) in respect of travel, entertainment or moving-related expenses Incurred in the ordinary course of business or (b) for purposes of funding any such person’s purchase of Capital Stock or Subordinated Shareholder Funding (or similar obligations) of the Issuer, its Subsidiaries or any Parent with (in the case of this sub-clause (b)) the approval of the Board of Directors; (2) in respect of moving-related expenses Incurred in connection with any closing or consolidation of any facility or office; or (3) not exceeding €2 million in the aggregate outstanding at any time.

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“Management Equity Subsidiary” means any Subsidiary of any Parent (a) engaged solely in holding Capital Stock in any Parent or the Issuer and (b) whose minority shareholders are limited to members of management, directors or consultants of the Issuer, any of its Subsidiaries or any Parent. “Management Investors ” means the current or, to the extent any Voting Stock held by them were received in their capacity as such, former, officers, directors, employees and other members of the management of or consultants to any Parent, the Issuer or any of their respective Subsidiaries or any Management Equity Subsidiary, or spouses, family members or relatives thereof, as applicable, or any trust, partnership or other entity for the benefit of or the beneficial owner of which (directly or indirectly) is any of the foregoing, or any of their heirs, executors, successors, permitted transferees and legal representatives, who at any date beneficially own or have the right to acquire, directly or indirectly, Capital Stock of the Issuer, any Restricted Subsidiary or any Parent. “Market Capitalization” means an amount equal to (1) the total number of issued and outstanding shares of common stock or common equity interests of the IPO Entity on the date of the declaration of the relevant dividend multiplied by (2) the arithmetic mean of the closing prices per share of such common stock or common equity interests for the 30 consecutive trading days immediately preceding the date of declaration of such dividend. “Moody’s ” means Moody’s Investors Service, Inc. or any of its successors or assigns that is a Nationally Recognized Statistical Rating Organization. “Nationally Recognized Statistical Rating Organization” means a nationally recognized statistical rating organization within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act. “Net Available Cash” from an Asset Disposition means cash payments received (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise and net proceeds from the sale or other disposition of any securities received as consideration, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring person of Indebtedness or other obligations relating to the properties or assets that are the subject of such Asset Disposition or received in any other non-cash form) therefrom, in each case net of: (1) all legal, accounting, investment banking, title and recording tax expenses, commissions and other fees and expenses Incurred, and all Taxes paid or required to be paid or accrued as a liability under IFRS (after taking into account any available tax credits or deductions and any tax sharing agreements), as a consequence of such Asset Disposition; (2) all payments made on any Indebtedness which is secured by any assets subject to such Asset Disposition, in accordance with the terms of any Lien upon such assets, or which by its terms or by applicable law are required to be repaid out of the proceeds from such Asset Disposition;

(3) all distributions and other payments required to be made to minority interest holders (other than any Parent, the Issuer or any of their respective Subsidiaries) in Subsidiaries or joint ventures as a result of such Asset Disposition; and (4) the deduction of appropriate amounts required to be provided by the seller as a reserve, on the basis of IFRS, against any liabilities associated with the assets disposed of in such Asset Disposition and retained by the Issuer or any Restricted Subsidiary after such Asset Disposition, including pension and other post-employment benefits liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such transaction. “Net Cash Proceeds,” with respect to any issuance or sale of Capital Stock or Subordinated Shareholder Funding, means the cash proceeds of such issuance or sale net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, listing fees, discounts or commissions and brokerage, consultant and other fees and charges actually Incurred in connection with such issuance or sale and net of taxes paid or payable as a result of such issuance or sale (after taking into account any available tax credit or deductions and any tax sharing arrangements). “New Senior Facilities Agreement” means the term and revolving facilities agreement dated on or about March 19, 2014 between, among others, the Company as the borrower, certain subsidiaries of the Company as guarantors, Credit Agricole Corporate and Investment Bank as agent and security agent and certain financial institutions as lenders, as amended or supplemented from time to time.

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“Non-Recourse Indebtedness” means Indebtedness secured by a Lien on property to the extent that the liability for such Indebtedness (and any interest thereon) is limited to the security of such property without liability on the part of the Issuer or any of its Restricted Subsidiaries for any deficiency, including liability by reason of any agreement by the Issuer or any of its Restricted Subsidiaries to provide additional capital or maintain the financial condition or otherwise support the credit of the Person incurring such Indebtedness. “Note Documents” means the Notes (including Additional Notes), the Indenture, the Security Documents and any Intercreditor Agreement. “Note Guarantee” means any Guarantee of the Notes provided by a Subsidiary of the Issuer. “Officer” means, with respect to any Person, (1) the Chairman of the Board of Directors (including any “président du conseil d’administration”), the Chief Executive Officer (including any “directeur general”), the President, the Chief Financial Officer, any Vice President, the Treasurer, any Managing Director, or the Secretary (a) of such Person or (b) if such Person is owned or managed by a single entity, of such entity, or (2) any other individual designated as an “Officer” for the purposes of the Indenture by the Board of Directors of such Person. “Officer’s Certificate” means, with respect to any Person, a certificate signed by one Officer of such Person. “Opinion of Counsel” means a written opinion from legal counsel reasonably satisfactory to the Trustee. The counsel may be an employee of or counsel to the Issuer or its Subsidiaries. “Ordinary Course Commitments” means, with respect to any Person, (i) all letters of credit issued in the ordinary course of business of such Person with respect to trade payables, any items under the caption “fournisseurs” in such Person’s financial statements and other accrued liabilities arising in the ordinary course of business, (ii) letters of credit, banker’s acceptances, performance, completion, surety or appeal bonds or similar instruments issued in the ordinary course of business (including, without limitation, letters of credit or similar instruments in respect of self-insurance or workers’ compensation obligations), (iii) work completion guarantees (garanties financières d’achèvement), guarantees issued pursuant to the Hoguet Law and any other guarantee or similar commitment issued by the Issuer or any Restricted Subsidiary or reimbursement obligations of the Issuer or any Restricted Subsidiary in connection with a guarantee or similar commitment issued by a third party, in each case pursuant to French laws or regulations applicable generally to companies in the same line of business as the Issuer and its Subsidiaries, land purchase guarantees (indemnités d’immobilisation), future payment guarantees provided to suppliers, retention money guarantees and reimbursement guarantees received by the Issuer or any Restricted Subsidiary to protect against failure to obtain building permits and (iv) any “carence locative” or similar Guarantee pursuant to which the Issuer or any Restricted Subsidiary Guarantees a client receipt of rent or rental revenue in connection with any third-party property manager arrangements.

“PAI” means PAI partners S.A.S. “Parent ” means any Person of which the Issuer at any time is or becomes a Subsidiary after the Issue Date and any holding companies established by any Permitted Holder for purposes of holding its investment in any Parent. “Parent Expenses” means: (1) costs (including all professional fees and expenses) Incurred by any Parent in connection with reporting obligations under or otherwise Incurred in connection with compliance with applicable laws, rules or regulations of any governmental, regulatory or self-regulatory body or stock exchange, the Indenture or any other agreement or instrument relating to Indebtedness of the Issuer or any Restricted Subsidiary, including in respect of any reports filed with respect to the Securities Act, Exchange Act or the respective rules and regulations promulgated thereunder; (2) customary indemnification obligations of any Parent or Management Equity Subsidiary owing to directors, officers, employees or other Persons under its charter or by-laws or pursuant to written agreements with any such Person to the extent relating to the Issuer and its Subsidiaries; (3) obligations of any Parent or Management Equity Subsidiary in respect of director and officer insurance (including premiums therefor) to the extent relating to the Issuer and its Subsidiaries; (4) fees and expenses payable by any Parent in connection with the Refinancing; (5) general corporate overhead expenses, including (a) professional fees and expenses and other administrative, general corporate and operational expenses of any Parent or Management Equity Subsidiary related to the 207

ownership or operation of the business of the Issuer or any of its Restricted Subsidiaries (including any such expenses related to the exploration of strategic transactions involving the Issuer and its Subsidiaries); and (b) costs and expenses with respect to any litigation or other dispute relating to the Refinancing or the ownership, directly or indirectly, by any Parent or Management Equity Subsidiary; (6) (a) any taxes and other fees and expenses required to maintain any Parent’s or Management Equity Subsidiary’s corporate existence and to provide for other ordinary course operating costs, including customary salary, bonus and other benefits payable to officers and employees of such Parent or Management Equity Subsidiary and to pay reasonable directors’ fees and to reimburse reasonable out-of-pocket expenses of the Board of Directors of such Parent or Management Equity Subsidiary and to pay fees and expenses, as incurred, of an acquisition, where the proceeds of such acquisition were contributed to or combined with the Issuer or its Related Subsidiaries; and (b) other fees, expenses and costs relating directly or indirectly to activities of the Issuer and its Subsidiaries or any Parent or Management Equity Subsidiary or any other Person established for purposes of or in connection with the Refinancing or which holds directly or indirectly any Capital Stock or Subordinated Shareholder Funding of the Issuer; provided that the aggregate amount pursuant to this clause (6) shall not exceed €3 million in any fiscal year; and (7) expenses Incurred by any Parent in connection with any Public Offering or other sale of Capital Stock or Indebtedness: (a) where the net proceeds of such offering or sale are intended to be received by or contributed to the Issuer or a Restricted Subsidiary; (b) in a pro-rated amount of such expenses in proportion to the amount of such net proceeds intended to be so received or contributed; or (c) otherwise on an interim basis prior to completion of such offering so long as any Parent shall cause the amount of such expenses to be repaid to the Issuer or the relevant Restricted Subsidiary out of the proceeds of such offering promptly if completed. “Pari Passu Indebtedness” means Indebtedness of the Issuer or any Guarantor if such Indebtedness or Guarantee ranks equally in right of payment to the Notes or any Note Guarantee, as the case may be, and, in each case, is secured by a Lien on all or a portion of the Collateral.

“Paying Agent” means any Person authorized by the Issuer to pay the principal of (and premium, if any) or interest on any Note on behalf of the Issuer. “Permissible Jurisdiction” means any member state of the European Union (other than Greece, Ireland, Portugal, Italy and Spain so long as European Government Obligations issued, or unconditionally guaranteed, by the governments of such jurisdictions do not have a rating of “BBB-” or higher from S&P and “Baa3” or higher from Moody’s (or, if at the time, neither is issuing comparable ratings, then a comparable rating of another Nationally Recognized Statistical Rating Organization)). “Permitted Asset Swap” means the substantially concurrent purchase and sale or exchange of assets used or useful in a Similar Business or a combination of such assets and cash, Cash Equivalents or Temporary Cash Investments between the Issuer or any of its Restricted Subsidiaries and another Person; provided that any cash or Cash Equivalents received in excess of the value of any cash or Cash Equivalents sold or exchanged must be applied in accordance with the covenant described under “—Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock.” “Permitted Collateral Liens” means: (1) Liens on the Collateral (a) described in one or more of clauses (2), (3), (4), (5), (6), (8), (9), (11), (12), (18), (19), (20), (23) and (24) of the definition of “Permitted Liens” or (b) that are Liens in secured accounts equally and ratably granted to cash management banks securing cash management obligations; (2) Liens on the Collateral to secure Indebtedness of the Issuer or a Restricted Subsidiary that is permitted to be Incurred under clauses (1), (2) (to the extent such Guarantee is in respect of Indebtedness otherwise permitted to be secured and specified in this definition of Permitted Collateral Liens), (4)(a) and (c) (if the original Indebtedness was so secured), (6) or (11) of the second paragraph of the covenant described under “—Certain Covenants—Limitation on Indebtedness” and any Refinancing Indebtedness in respect of such Indebtedness;

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provided, however, in the case of this clause (2), that any such Lien permitted by this clause (2) ranks either (a) equal or junior to the Liens on such Collateral securing the Notes and any Note Guarantees, and in the case of Permitted Collateral Liens on the Collateral to secure Additional Notes and any Guarantees with respect thereto, all assets and properties that secured the Additional Notes and such Guarantees with respect thereto secure the Notes and any Guarantees with respect thereto or (b) junior to Liens securing the Notes and any Note Guarantees if the Lien secures Subordinated Indebtedness of the Issuer or the relevant Guarantor; (3) Liens on the Collateral securing Indebtedness Incurred under the first paragraph or clause (12) of the second paragraph of “—Certain Covenants—Limitation on Indebtedness;” provided that, in the case of this clause (3), after giving effect to such Incurrence on that date, the Consolidated Net Secured Leverage Ratio of the Issuer is less than 4.8 to 1.0; and further provided that any such Lien permitted by this clause (3) ranks either (a) equal or junior to all other Liens on such Collateral securing the Notes and any Note Guarantees, and in the case of Permitted Collateral Liens on the Collateral to secure Additional Notes and any Guarantees with respect thereto, all assets and properties that secured the Additional Notes and such Guarantees with respect thereto secure the Notes and any Note Guarantees with respect thereto or (b) junior to Liens securing the Notes and any Note Guarantees if the Lien secures Subordinated Indebtedness of the Issuer or the relevant Guarantor; and (4) Liens on the Collateral that secure Indebtedness on a basis junior to the Notes, provided that each of the parties to Indebtedness secured by Permitted Collateral Liens (other than in respect of any Additional Notes or any Guarantees with respect thereto) pursuant to clause (2) or (3) hereof or their agent, representative or trustee will have entered into, or acceded to an Intercreditor Agreement. “Permitted Holders” means, collectively, (1) the Initial Investors, (2) Senior Management, (3) any Related Person of any of the foregoing and (4) any Person who is acting as an underwriter in connection with a public or private offering of Capital Stock of any Parent, the Issuer or the Company, acting in such capacity. Any person or group whose acquisition of beneficial ownership constitutes (1) a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of the Indenture or (2) a Change of Control which is a Specified Change of Control Event will thereafter, together with its Affiliates, constitute an additional Permitted Holder.

“Permitted Investment” means (in each case, by the Issuer or any of its Restricted Subsidiaries): (1) Investments in (a) a Restricted Subsidiary (including the Capital Stock of a Restricted Subsidiary) or the Issuer or (b) a Person (including the Capital Stock of any such Person) that is engaged in any Similar Business and such Person will, upon the making of such Investment, become a Restricted Subsidiary; (2) Investments in another Person if such Person is engaged in any Similar Business and as a result of such Investment such other Person is merged, consolidated or otherwise combined with or into, or transfers or conveys all or substantially all its assets to, the Issuer or a Restricted Subsidiary; (3) Investments in cash, Cash Equivalents, Temporary Cash Investments or Investment Grade Securities; (4) Investments in receivables owing to the Issuer or any Restricted Subsidiary created or acquired in the ordinary course of business; (5) Investments in payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business; (6) Management Advances; (7) Investments received in settlement of debts created in the ordinary course of business and owing to the Issuer or any Restricted Subsidiary, or as a result of foreclosure, perfection or enforcement of any Lien, or in satisfaction of disputes or judgments or pursuant to any plan of reorganization or similar arrangement including upon the bankruptcy or insolvency of a debtor; (8) Investments made as a result of the receipt of non-cash consideration from a sale or other disposition of property or assets, including an Asset Disposition, in each case, that was made in compliance with “—Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock;”

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(9) Investments in existence on, or made pursuant to legally binding commitments in existence on, the Issue Date and any extension, modification or renewal of any Investment existing on, or made pursuant to a binding commitment existing on, the Issue Date; (10) Currency Agreements, Interest Rate Agreements, Commodity Hedging Agreements and related Hedging Obligations, which transactions or obligations are Incurred in compliance with “—Certain Covenants— Limitation on Indebtedness;” (11) Investments, taken together with all other Investments made pursuant to this clause (11) and at any time outstanding, in an aggregate amount at the time of such Investment not to exceed the greater of €30 million and 3% of Total Assets; provided that, if an Investment is made pursuant to this clause in a Person that is not a Restricted Subsidiary and such Person subsequently becomes a Restricted Subsidiary or is subsequently designated a Restricted Subsidiary pursuant to the covenant described under “—Certain Covenants—Limitation on Restricted Payments,” such Investment shall thereafter be deemed to have been made pursuant to clause (1) or (2) of the definition of “Permitted Investments” and not this clause; (12) pledges or deposits with respect to leases or utilities provided to third parties in the ordinary course of business or Liens otherwise described in the definition of “Permitted Liens” or made in connection with Liens permitted under the covenant described under “—Certain Covenants—Limitation on Liens;” (13) any Investment to the extent made using Capital Stock of the Issuer (other than Disqualified Stock), Subordinated Shareholder Funding or Capital Stock of any Parent as consideration; (14) any transaction to the extent constituting an Investment that is permitted by and made in accordance with the provisions of the second paragraph of the covenant described under “—Certain Covenants—Limitation on Affiliate Transactions” (except those described in clauses (1), (3), (6), (8), (9), (12) and (16) of that paragraph); (15) Investments consisting of purchases and acquisitions of inventory, supplies, materials and equipment or licenses or leases of intellectual property, in any case, in the ordinary course of business and in accordance with the Indenture;

(16) guarantees, keepwells and similar arrangements permitted or not prohibited by the covenant described under “— Certain Covenants—Limitation on Indebtedness;” (17) Investments in the Notes and any other Indebtedness of the Issuer or any Restricted Subsidiary; (18) Investments acquired after the Issue Date as a result of the acquisition by the Issuer or any Restricted Subsidiary of another Person, including by way of a merger, amalgamation or consolidation with or into the Issuer or any of its Restricted Subsidiaries in a transaction that is not prohibited by the Indenture to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on, or made pursuant to binding commitments existing on, the date of such acquisition, merger, amalgamation or consolidation; (19) Investments in joint ventures in a Similar Business or in Unrestricted Subsidiaries having an aggregate fair market value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (19) that are at the time outstanding not to exceed the greater of €40 million and 4% of Total Assets; provided that, if an Investment is made pursuant to this clause in a Person that is not a Restricted Subsidiary and such Person subsequently becomes a Restricted Subsidiary or is subsequently designated a Restricted Subsidiary pursuant to the covenant described under “—Certain Covenants—Limitation on Restricted Payments,” such Investment shall thereafter be deemed to have been made pursuant to clause (1) or (2) of the definition of “Permitted Investments” and not this clause; (20) any Investment in a Qualified Minority Entity; provided, however that such Investments will not exceed the greater of €30 million and 3% of Total Assets in aggregate amount outstanding at any time; provided, further, that if an Investment is made pursuant to this clause in a Person that is not a Restricted Subsidiary and such Person subsequently becomes a Restricted Subsidiary, such Investment shall thereafter be deemed to have been made pursuant to clause (1) or (2) of the definition of “Permitted Investments” and not this clause; (21) Investments in respect of any Ordinary Course Commitment;

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(22) Investments in respect of any RKCI Loans; and (23) Investments in prepaid expenses, negotiable instruments held for collection and lease, utility, workers’ compensation, performance and other similar deposits, in each case, in the ordinary course of business. “Permitted Liens” means, with respect to any Person: (1) Liens on assets or property of a Restricted Subsidiary that is not a Guarantor securing Indebtedness of any Restricted Subsidiary that is not a Guarantor; (2) pledges, deposits or Liens under workmen’s compensation laws, unemployment insurance laws, social security laws or similar legislation, or insurance-related obligations (including pledges or deposits securing liability to insurance carriers under insurance or self-insurance arrangements), or in connection with bids, tenders, completion guarantees, contracts (other than for borrowed money) or leases, or to secure utilities, licenses, public or statutory obligations, or to secure surety, indemnity, judgment, appeal or performance bonds, guarantees of government contracts (or other similar bonds, instruments or obligations), or as security for contested taxes or import or customs duties or for the payment of rent, or other obligations of like nature, in each case Incurred in the ordinary course of business; (3) Liens imposed by law, including carriers’, warehousemen’s, mechanics’, landlords’, materialmen’s and repairmen’s or other like Liens, in each case for sums not yet overdue for a period of more than 60 days or that are bonded or being contested in good faith by appropriate proceedings; (4) Liens for taxes, assessments or other governmental charges not yet delinquent or which are being contested in good faith by appropriate proceedings; provided that appropriate reserves required pursuant to IFRS have been made in respect thereof; (5) Liens in favor of the issuers of surety, performance or other bonds, guarantees or letters of credit or bankers’ acceptances (not issued to support Indebtedness for borrowed money) issued pursuant to the request of and for the account of the Issuer or any Restricted Subsidiary in the ordinary course of its business;

(6) encumbrances, ground leases, easements (including reciprocal easement agreements), survey exceptions, or reservations of, or rights of others for, licenses, rights of way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning, building codes or other restrictions (including minor defects or irregularities in title and similar encumbrances) as to the use of real properties or Liens incidental to the conduct of the business of the Issuer and its Restricted Subsidiaries or to the ownership of its properties which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of the Issuer and its Restricted Subsidiaries; (7) Liens on assets or property of the Issuer or any Restricted Subsidiary securing Hedging Obligations permitted under the Indenture; (8) leases, licenses, subleases and sublicenses of assets (including real property and intellectual property rights), in each case entered into in the ordinary course of business; (9) Liens arising out of judgments, decrees, orders or awards not giving rise to an Event of Default so long as any appropriate legal proceedings which may have been duly initiated for the review of such judgment, decree, order or award have not been finally terminated or the period within which such proceedings may be initiated has not expired; (10) Liens on assets or property of the Issuer or any Restricted Subsidiary for the purpose of securing Capitalized Lease Obligations or Purchase Money Obligations, or securing the payment of all or a part of the purchase price of, or securing other Indebtedness Incurred to finance or refinance the acquisition, improvement or construction of, assets or property acquired or constructed in the ordinary course of business; provided that (a) the aggregate principal amount of Indebtedness secured by such Liens is otherwise permitted to be Incurred under the Indenture and (b) any such Lien may not extend to any assets or property of the Issuer or any Restricted Subsidiary other than assets or property acquired, improved, constructed or leased with the proceeds of such Indebtedness and any improvements or accessions to such assets and property;

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(11) Liens arising by virtue of any statutory or common law provisions relating to banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depositary or financial institution; (12) Liens arising from Uniform Commercial Code financing statement filings (or similar filings in other applicable jurisdictions) regarding operating leases entered into by the Issuer and its Restricted Subsidiaries in the ordinary course of business; (13) Liens existing on the Issue Date; (14) Liens on property, other assets or shares of stock of a Person at the time such Person becomes a Restricted Subsidiary (or at the time the Issuer or a Restricted Subsidiary acquires such property, other assets or shares of stock, including any acquisition by means of a merger, consolidation or other business combination transaction with or into the Issuer or any Restricted Subsidiary); provided, however, that such Liens are not created, Incurred or assumed in anticipation of or in connection with such other Person becoming a Restricted Subsidiary (or such acquisition of such property, other assets or stock); provided, further, that such Liens are limited to all or part of the same property, other assets or stock (plus improvements, accession, proceeds or dividends or distributions in connection with the original property, other assets or stock) that secured (or, under the written arrangements under which such Liens arose, could secure) the obligations to which such Liens relate; (15) Liens on assets or property of the Issuer or any Restricted Subsidiary securing Indebtedness or other obligations of the Issuer or such Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary, or Liens in favor of the Issuer or any Restricted Subsidiary; (16) Liens (other than Permitted Collateral Liens) securing Refinancing Indebtedness Incurred to refinance Indebtedness that was previously so secured, and permitted to be secured under the Indenture; provided that any such Lien is limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or, under the written arrangements under which the original Lien arose, could secure) the Indebtedness being refinanced or is in respect of property that is or could be the security for or subject to a Permitted Lien hereunder;

(17) any interest or title of a lessor under any Capitalized Lease Obligation or operating lease; (18) (a) mortgages, liens, security interests, restrictions, encumbrances or any other matters of record that have been placed by any government, statutory or regulatory authority, developer, landlord or other third party on property over which the Issuer or any Restricted Subsidiary of the Issuer has easement rights or on any leased property and subordination or similar arrangements relating thereto and (b) any condemnation or eminent domain proceedings affecting any real property; (19) any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement; (20) Liens on property or assets under construction (and related rights) in favor of a contractor or developer or arising from progress or partial payments by a third party relating to such property or assets; (21) Liens on cash accounts securing Indebtedness incurred under clause (11) of the second paragraph of the covenant described under “—Certain Covenants—Limitation on Indebtedness” with local financial institutions; (22) Liens on Escrowed Proceeds for the benefit of the related holders of debt securities or other Indebtedness (or the underwriters or arrangers thereof) or on cash set aside at the time of the Incurrence of any Indebtedness or government securities purchased with such cash, in either case, to the extent such cash or government securities pre-fund the payment of interest on such Indebtedness and are held in an escrow account or similar arrangement to be applied for such purpose; (23) Liens securing or arising by reason of any netting or set-off arrangement entered into in the ordinary course of banking or other trading activities, or liens over cash accounts and receivables securing cash pooling or cash management arrangements; (24) Liens arising out of conditional sale, title retention, hire purchase, consignment or similar arrangements for the sale of goods or property entered into in the ordinary course of business; (25) Liens with respect to obligations which do not exceed €10 million at any one time outstanding; 212

(26) Permitted Collateral Liens; (27) Liens on Capital Stock or other securities or assets of any Unrestricted Subsidiary or Qualified Minority Entity that secure Indebtedness of such Unrestricted Subsidiary or Qualified Minority Entity; (28) Liens on Receivables Assets Incurred in connection with a Qualified Receivables Financing; (29) Liens on cash, Cash Equivalents or other property arising in connection with the defeasance, discharge or redemption of Indebtedness; (30) Liens securing Indebtedness of a Restricted Subsidiary that is permitted to be Incurred under clause (1) of the second paragraph of the covenant described under “—Certain Covenants—Limitation on Indebtedness”; (31) Liens to secure Indebtedness Incurred by Subsidiaries of the Issuer developing co-promotion programs pursuant to clause (15) of the second paragraph described in “—Certain Covenants—Limitation on Indebtedness” but solely on the assets or Capital Stock of such Subsidiaries; and (32) any extension, renewal or replacement, in whole or in part, of any Lien described in the foregoing clauses (1) through (31); provided that any such extension, renewal or replacement shall be no more restrictive in any material respect than the Lien so extended, renewed or replaced and shall not extend in any material respect to any additional property or assets. “Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company, government or any agency or political subdivision thereof or any other entity. “Preferred Stock,” as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person.

“Program” means the acquisition, construction, renovation or improvement of real property. “Program Loan” means any loan, including any overdraft facility, or other credit provided to a Person with respect to a Program (including guarantees or security interests relating thereto), including all fees, commissions and expenses related thereto or related to such program loan or credit to the extent that the liability for the associated Indebtedness (and any interest thereon) is either Non-Recourse Indebtedness or is recourse only to such Person or to the holders of the Capital Stock of such Person. “Program Subsidiary” means a Restricted Subsidiary whose business consists of one or more Programs. “Public Debt” means any Indebtedness consisting of bonds, debentures, notes or other similar debt securities issued in (1) a public offering registered under the Securities Act or (2) a private placement to institutional investors that is underwritten for resale in accordance with Rule 144A or Regulation S under the Securities Act, whether or not it includes registration rights entitling the holders of such debt securities to registration thereof with the SEC for public resale. “Public Market” means any time after: (1) an Equity Offering has been consummated; and (2) shares of common stock or other common equity interests of the IPO Entity having a market value in excess of €50 million on the date of such Equity Offering have been distributed pursuant to such Equity Offering. “Public Offering” means any offering, including an Initial Public Offering, of shares of common stock or other common equity interests that are listed on an exchange or publicly offered (which shall include an offering pursuant to Rule 144A and/or Regulation S under the Securities Act to professional market investors or similar persons). “Purchase Money Obligations” means any Indebtedness (a) consisting of the deferred purchase price of property, conditional sale obligations, obligations under any title retention agreement, other purchase money obligations and obligations in respect of industrial revenue bonds, in each case where the maturity of such Indebtedness does not exceed the anticipated useful life of the property being financed, or (b) Incurred to finance or refinance the acquisition, leasing, construction or improvement of property (real or personal) or assets (including Capital Stock), and whether acquired through the direct acquisition of such property or assets or the acquisition of the Capital Stock of any Person owning such property or assets, or otherwise. 213

“Qualified Minority Entities” means entities whose business consists of one or more Programs unless (i) the restrictions on dividends or other distributions on its Capital Stock are outside of the ordinary course of business or discriminate against the minority or (ii) the entities have not commenced distributions within one year after termination of its Program Loan. “Qualified Receivables Financing” means any Receivables Financing of a Receivables Subsidiary that meets the following conditions: (1) an Officer or the Board of Directors of the Issuer shall have determined in good faith that such Qualified Receivables Financing (including financing terms, covenants, termination events and other provisions) is in the aggregate economically fair and reasonable to the Issuer and the Receivables Subsidiary, (2) all sales of accounts receivable and related assets to the Receivables Subsidiary are made at fair market value (as determined in good faith by the Issuer), and (3) the financing terms, covenants, termination events and other provisions thereof shall be on market terms (as determined in good faith by the Issuer) and may include Standard Securitization Undertakings. The grant of a security interest in any accounts receivable of the Issuer or any of its Restricted Subsidiaries (other than a Receivables Subsidiary) to secure Indebtedness under a Credit Facility or Indebtedness in respect of the Notes shall not be deemed a Qualified Receivables Financing. “Receivables Assets” means any assets that are or will be the subject of a Qualified Receivables Financing. “Receivables Fees” means distributions or payments made directly or by means of discounts with respect to any participation interest issued or sold in connection with, and other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Receivables Financing.

“Receivables Financing” means any transaction or series of transactions that may be entered into by the Issuer or any of its Subsidiaries pursuant to which the Issuer or any of its Subsidiaries may sell, convey or otherwise transfer to (1) a Receivables Subsidiary (in the case of a transfer by the Issuer or any of its Subsidiaries), or (2) any other Person (in the case of a transfer by a Receivables Subsidiary), or may grant a security interest in, any accounts receivable (whether now existing or arising in the future) of the Issuer or any of its Subsidiaries, and any assets related thereto, including all collateral securing such accounts receivable, all contracts and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets which are customarily transferred or in respect of which security interest are customarily granted in connection with asset securitization transactions involving accounts receivable and any Hedging Obligations entered into by the Issuer or any such Subsidiary in connection with such accounts receivable. “Receivables Repurchase Obligation” means any obligation of a seller of receivables in a Qualified Receivables Financing to repurchase receivables arising as a result of a breach of a representation, warranty or covenant or otherwise, including as a result of a receivable or portion thereof becoming subject to any asserted defense, dispute, off-set or counterclaim of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller. “Receivables Subsidiary” means a Wholly Owned Subsidiary of the Issuer (or another Person formed for the purposes of engaging in a Qualified Receivables Financing with the Issuer in which the Issuer or any Subsidiary of the Issuer makes an Investment and to which the Issuer or any Subsidiary of the Issuer transfers accounts receivable and related assets) which engages in no activities other than in connection with the financing of accounts receivable of the Issuer and its Subsidiaries, all proceeds thereof and all rights (contractual or other), collateral and other assets relating thereto, and any business or activities incidental or related to such business, and which is designated by the Board of Directors of the Issuer (as provided below) as a Receivables Subsidiary and: (1) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is guaranteed by the Issuer or any other Restricted Subsidiary of the Issuer (excluding guarantees of obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is subject to terms that are substantially equivalent in effect to a guarantee of any losses on securitized or sold receivables by the Issuer or any other Restricted Subsidiary of the Issuer, (iii) is recourse to or obligates the Issuer or any other Restricted Subsidiary of the Issuer in any way other than pursuant to Standard Securitization Undertakings or (iv) subjects any property or asset of the Issuer or any other Restricted Subsidiary of the Issuer, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings; (2) with which neither the Issuer nor any other Restricted Subsidiary of the Issuer has any contract, agreement, arrangement or understanding other than on terms which the Issuer reasonably believes to be no less favorable to the Issuer or such Restricted Subsidiary than those that might be obtained at the time from Persons that are not

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Affiliates of the Issuer, other than fees payable in the ordinary course of business in connection with servicing accounts receivable of such entity; and (3) to which neither the Issuer nor any other Restricted Subsidiary of the Issuer has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results. Any such designation by the Board of Directors of the Issuer shall be evidenced to the Trustee by filing with the Trustee a copy of the resolution of the Board of Directors of the Issuer giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the foregoing conditions. “Refinance” means refinance, refund, replace, renew, repay, modify, restate, defer, substitute, supplement, reissue, resell, extend or increase (including pursuant to any defeasance or discharge mechanism) and the terms “refinances,” “refinanced” and “refinancing” as used for any purpose in the Indenture shall have a correlative meaning. “Refinancing ” means the repayment in full of the borrowings under the Existing Senior Credit Facilities, the issuance of the Notes, the entry into the New Senior Facilities Agreement, the repurchase of the capital stock of the Issuer pursuant to the CA-CIB Head of Terms as contemplated in these Listing Particulars under the caption “Use of Proceeds” and the payment or incurrence of any fees, expense or charges associated with any of the foregoing.

“Refinancing Indebtedness” means Indebtedness that is Incurred to refund, refinance, replace, exchange, renew, repay or extend (including pursuant to any defeasance or discharge mechanism) any Indebtedness existing on the date of the Indenture or Incurred in compliance with the Indenture (including Indebtedness of the Issuer that refinances Indebtedness of any Restricted Subsidiary and Indebtedness of any Restricted Subsidiary that refinances Indebtedness of another Restricted Subsidiary), in each case, including Indebtedness that refinances Refinancing Indebtedness; provided, however, that: (1) if the Indebtedness being refinanced constitutes Subordinated Indebtedness, the Refinancing Indebtedness has a final Stated Maturity at the time such Refinancing Indebtedness is Incurred that is the same as or later than the final Stated Maturity of the Indebtedness being refinanced or, if shorter, the Notes; (2) such Refinancing Indebtedness is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the sum of the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced (plus, without duplication, any additional Indebtedness Incurred to pay interest required by the instruments governing such existing Indebtedness and costs, expenses and fees (including any premium and defeasance costs) Incurred in connection therewith); and (3) if the Indebtedness being refinanced is expressly subordinated to the Notes, such Refinancing Indebtedness is subordinated to the Notes on terms at least as favorable to the Holders as those contained in the documentation governing the Indebtedness being refinanced, provided, however, that Refinancing Indebtedness shall not include Indebtedness of the Issuer or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary. “Related Person” with respect to any Permitted Holder means: (1) any controlling equityholder or Subsidiary of such Person; or (2) in the case of an individual, any spouse, family member or relative of such individual, any trust or partnership for the benefit of one or more of such individual and any such spouse, family member or relative, or the estate, executor, administrator, committee or beneficiaries of any thereof; or (3) any trust, corporation, partnership or other Person for which one or more of the Permitted Holders and other Related Persons of any thereof constitute the beneficiaries, stockholders, partners or owners thereof, or Persons beneficially holding in the aggregate a majority (or more) controlling interest therein; or (4) in the case of the Initial Investors any investment fund or vehicle managed, sponsored or advised by such Person or any successor thereto, or by any Affiliate of such Person or any such successor. “Related Taxes” means: (1) any Taxes, including sales, use, transfer, rental, ad valorem, value added, stamp, property, consumption, franchise, license, capital, registration, business, customs, net worth, gross receipts, excise, occupancy,

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intangibles or similar Taxes (other than (x) Taxes measured by income and (y) withholding imposed on payments made by any Parent), required to be paid (provided such Taxes are in fact paid) by any Parent by virtue of its: (a) being organized or having Capital Stock outstanding (but not by virtue of owning stock or other equity interests of any corporation or other entity other than, directly or indirectly, the Issuer or any of the Issuer’s Subsidiaries); (b) issuing or holding Subordinated Shareholder Funding; (c) being a holding company parent, directly or indirectly, of the Issuer or any of the Issuer’s Subsidiaries; (d) receiving dividends from or other distributions in respect of the Capital Stock of, directly or indirectly, the Issuer or any of the Issuer’s Subsidiaries; or

(e) having made any payment in respect to any of the items for which the Issuer is permitted to make payments to any Parent pursuant to “—Certain Covenants—Limitation on Restricted Payments”; or (2) if and for so long as the Issuer is a member of a group filing a consolidated or combined tax return with any Parent, any Taxes measured by income for which such Parent is liable up to an amount not to exceed with respect to such Taxes the amount of any such Taxes that the Issuer and its Subsidiaries would have been required to pay on a separate company basis or on a consolidated basis if the Issuer and its Subsidiaries had paid tax on a consolidated, combined, group, affiliated or unitary basis on behalf of an affiliated group consisting only of the Issuer and its Subsidiaries. “Restricted Investment ” means any Investment other than a Permitted Investment. “Restricted Subsidiary ” means any Subsidiary of the Issuer other than an Unrestricted Subsidiary. “Reversion Date” means, after the Notes have achieved Investment Grade Status, the date, if any, that such Notes shall cease to have such Investment Grade Status. “RKCI Agreements” means the RKCI Services Agreement and the RKCI Loans. “RKCI Loans” means (i) a vendor loan from the Issuer to RKCI, a company controlled by Nordine Hachemi, in connection with its purchase of 22,806 shares of the Company’s Capital Stock on November 29, 2013 and (ii) any additional vendor loans to be made from the Issuer to RKCI in connection with its purchase of the Company’s Capital Stock for a purchase price of up to €400,000 in 2014. “RKCI Services Agreement” means the agreement dated November 29, 2013 between the Issuer and RKCI. “S&P ” means Standard & Poor’s Investors Ratings Services or any of its successors or assigns that is a Nationally Recognized Statistical Rating Organization. “SEC” means the U.S. Securities and Exchange Commission or any successor thereto. “Secured Indebtedness” means any Indebtedness secured by a Lien on a basis pari passu with or senior to the security in favor of the Notes. “Securities Act” means the U.S. Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder, as amended. “Security Documents” means each collateral pledge agreement, security assignment agreement or other document under which collateral is pledged to secure the Notes including the KB Share Pledge and the Designated Bank Account Pledge. “Senior Management” means the officers, directors, and other members of senior management of a Parent, the Issuer or any of its Subsidiaries, who at any date beneficially own or have the right to acquire, directly or indirectly, Capital Stock of the Issuer or any Parent. “Significant Subsidiary” means any Restricted Subsidiary that meets any of the following conditions: (1) the Issuer’s and its Restricted Subsidiaries’ investments in and advances to the Restricted Subsidiary exceed 10% of the total assets of the Issuer and its Restricted Subsidiaries on a consolidated basis as of the end of the most recently completed fiscal year; 216

(2) the Issuer’s and its Restricted Subsidiaries’ proportionate share of the total assets (after intercompany eliminations) of the Restricted Subsidiary exceeds 10% of the total assets of the Issuer and its Restricted Subsidiaries on a consolidated basis as of the end of the most recently completed fiscal year; or (3) the Issuer’s and its Restricted Subsidiaries’ equity in the income from continuing operations before income taxes, extraordinary items and cumulative effect of a change in accounting principle of the Restricted Subsidiary exceeds 10% of such income of the Issuer and its Restricted Subsidiaries on a consolidated basis for the most recently completed fiscal year.

“Similar Business” means (1) any businesses, services or activities engaged in by the Issuer or any of its Subsidiaries or any Associates on the Issue Date and (2) any businesses, services and activities engaged in by the Issuer or any of its Subsidiaries or any Associates that are related, complementary, incidental, ancillary or similar to any of the foregoing or are extensions or developments of any thereof. “Specified Change of Control Event” means the occurrence of any event that would constitute a Change of Control pursuant to the definition thereof; provided that immediately prior to the occurrence of such event and immediately thereafter, and giving pro forma effect thereto, the Consolidated Net Leverage Ratio of the Issuer would have been less than 4.3 to 1.0. Notwithstanding the foregoing, only one Specified Change of Control Event shall be permitted under the Indenture after the Issue Date. “Standard Securitization Undertakings” means representations, warranties, covenants, indemnities and guarantees of performance entered into by the Issuer or any Subsidiary of the Issuer which the Issuer has determined in good faith to be customary in a Receivables Financing, including those relating to the servicing of the assets of a Receivables Subsidiary, it being understood that any Receivables Repurchase Obligation shall be deemed to be a Standard Securitization Undertaking. “Stated Maturity” means, with respect to any security, the date specified in such security as the fixed date on which the payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision, but shall not include any contingent obligations to repay, redeem or repurchase any such principal prior to the date originally scheduled for the payment thereof. “Subordinated Indebtedness” means, with respect to any person, any Indebtedness (whether outstanding on the Issue Date or thereafter Incurred) which is expressly subordinated in right of payment to the Notes pursuant to the terms of a written agreement. “Subordinated Shareholder Funding” means, collectively, any funds provided to the Issuer by a Parent, a Permitted Holder or any of their respective Affiliates in exchange for or pursuant to any security, instrument or agreement other than Capital Stock, in each case issued to and held by any of the foregoing Persons, together with any such security, instrument or agreement and any other security or instrument other than Capital Stock issued in payment of any obligation under any Subordinated Shareholder Funding; provided, however, that such Subordinated Shareholder Funding: (1) does not mature or require any amortization, redemption or other repayment of principal or any sinking fund payment prior to the first anniversary of the Stated Maturity of the Notes (other than through conversion or exchange of such funding into Capital Stock (other than Disqualified Stock) of the Issuer or any funding meeting the requirements of this definition); (2) does not require, prior to the first anniversary of the Stated Maturity of the Notes, payment of cash interest, cash withholding amounts or other cash gross-ups, or any similar cash amounts; (3) contains no change of control or similar provisions (other than Subordinated Shareholder Funding outstanding on the Issue Date) and does not accelerate and has no right to declare a default or event of default or take any enforcement action or otherwise require any cash payment, in each case, prior to the first anniversary of the Stated Maturity of the Notes; (4) does not provide for or require any security interest or encumbrance over any asset of the Issuer or any of its Subsidiaries; and (5) pursuant to its terms is fully subordinated and junior in right of payment to the Notes pursuant to subordination, and, to the extent the Issuer has entered into an Intercreditor Agreement, payment blockage and enforcement limitation, terms which are customary in all material respects for similar funding.

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“Subsidiary” means, with respect to any Person: (1) any corporation, association or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof; or

(2) any partnership, joint venture, limited liability company or similar entity of which: (a) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof whether in the form of membership, general, special or limited partnership interests or otherwise; and (b) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity. “Successor Parent” with respect to any Person means any other Person with more than 50% of the total voting power of the Voting Stock of which is, at the time the first Person becomes a Subsidiary of such other Person, “beneficially owned” (as defined below) by one or more Persons that “beneficially owned” (as defined below) more than 50% of the total voting power of the Voting Stock of the first Person immediately prior to the first Person becoming a Subsidiary of such other Person. For purposes hereof, “beneficially own” has the meaning correlative to the term “beneficial owner,” as such term is defined in Rules 13d-3 and 13d-5 under the Exchange Act (as in effect on the Issue Date). “Taxes” means all present and future taxes, levies, imposts, deductions, charges, duties and withholdings and any charges of a similar nature (including interest, penalties and other liabilities with respect thereto) that are imposed by any government or other taxing authority. “Tax Sharing Agreement” means any tax sharing or profit and loss pooling or similar agreement or election with customary or arm’s-length terms entered into with any Parent or Subsidiary, as the same may be amended, supplemented, waived or otherwise modified from time to time in accordance with the terms thereof, as applicable, and of the Indenture. “Temporary Cash Investments” means any of the following: (1) any investment in (a) direct obligations of, or obligations Guaranteed by, (i) the United States of America or Canada, (ii) any Permissible Jurisdiction, (iii) Japan, Switzerland or Norway, (iv) any country in whose currency funds are being held specifically pending application in the making of an investment or capital expenditure by the Issuer or a Restricted Subsidiary in that country with such funds or (v) any agency or instrumentality of any such country or member state; or (b) direct obligations of any country recognized by the United States of America rated at least “A” by S&P or “A-1” by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any Nationally Recognized Statistical Rating Organization); (2) overnight bank deposits, and investments in time deposit accounts, certificates of deposit, bankers’ acceptances and money market deposits (or, with respect to foreign banks, similar instruments) maturing not more than one year after the date of acquisition thereof issued by: (a) any lender under the New Senior Facilities Agreement; (b) any institution authorized to operate as a bank in any of the countries or member states referred to in subclause (1)(a) above; or (c) any bank or trust company organized under the laws of any such country or member state or any political subdivision thereof, in each case, having capital and surplus aggregating in excess of €250 million (or the foreign currency equivalent thereof) and whose long-term debt is rated at least “A” by S&P or “A-2” by Moody’s (or, in either case, the equivalent of such rating

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by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any Nationally Recognized Statistical Rating Organization) at the time such Investment is made; (3) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (1) or (2) above entered into with a Person meeting the qualifications described in clause (2) above;

(4) Investments in commercial paper, maturing not more than 270 days after the date of acquisition, issued by a Person (other than the Issuer or any of its Subsidiaries), with a rating at the time as of which any Investment therein is made of “P-2” (or higher) according to Moody’s or “A-2” (or higher) according to S&P (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any Nationally Recognized Statistical Rating Organization); (5) Investments in securities maturing not more than one year after the date of acquisition issued or fully Guaranteed by any state, commonwealth or territory of the United States of America, Canada, any Permissible Jurisdiction or Japan, Switzerland, Norway or by any political subdivision or taxing authority of any such state, commonwealth, territory, country or member state, and rated at least “BBB” by S&P or “Baa3” by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any Nationally Recognized Statistical Rating Organization); (6) bills of exchange issued in the United States, Canada, a Permissible Jurisdiction, Switzerland, Norway or Japan eligible for rediscount at the relevant central bank and accepted by a bank (or any dematerialized equivalent); (7) any money market deposit accounts issued or offered by a commercial bank organized under the laws of France or a country that is a member of the Organization for Economic Co-operation and Development, in each case, having capital and surplus in excess of €250 million (or the foreign currency equivalent thereof) or whose long- term debt is rated at least “A” by S&P or “A2” by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any Nationally Recognized Statistical Rating Organization) at the time such Investment is made; (8) investment funds investing 95% of their assets in securities of the type described in clauses (1) through (7) above (which funds may also hold reasonable amounts of cash pending investment and/or distribution); and (9) investments in money market funds complying with the risk limiting conditions of Rule 2a-7 (or any successor rule) of the SEC under the U.S. Investment Company Act of 1940, as amended. “Total Assets” means the consolidated total assets (excluding goodwill) of the Issuer and its Restricted Subsidiaries in accordance with IFRS as shown on the most recent balance sheet of such Person. “Trust Indenture Act” means the U.S. Trust Indenture Act of 1939, as amended. “Undertaking of Non Dissolution Agreement” means the agreement entered into between, among others, the Issuer, PAI Partners, Financière Daunou 10 S.à r.l., Financière de Neuilly and the management dated June 30, 2009. “Uniform Commercial Code” means the New York Uniform Commercial Code. “Unrestricted Subsidiary” means: (1) any Subsidiary of the Issuer that at the time of determination is an Unrestricted Subsidiary (as designated by the Board of Directors of the Issuer in the manner provided below); and (2) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors of the Issuer may designate any Subsidiary of the Issuer (including any newly acquired or newly formed Subsidiary or a Person becoming a Subsidiary through merger, consolidation or other business combination transaction, or Investment therein but excluding the Company) to be an Unrestricted Subsidiary only if: (1) such Subsidiary or any of its Subsidiaries does not own any Capital Stock or Indebtedness of, or own or hold any Lien on any property of, the Issuer or any other Subsidiary of the Issuer which is not a Subsidiary of the Subsidiary to be so designated or otherwise an Unrestricted Subsidiary; and (2) such designation and the Investment of the Issuer in such Subsidiary complies with “—Certain Covenants— Limitation on Restricted Payments.”

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Any such designation by the Board of Directors of the Issuer shall be evidenced to the Trustee by filing with the Trustee a resolution of the Board of Directors of the Issuer giving effect to such designation and an Officer’s Certificate certifying that such designation complies with the foregoing conditions. The Board of Directors of the Issuer may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that immediately after giving effect to such designation (1) no Default or Event of Default would result therefrom and (2)(x) the Issuer could Incur at least €1.00 of additional Indebtedness pursuant to the first paragraph of the “Limitation on Indebtedness” covenant or (y) the Consolidated Net Leverage Ratio of the Issuer would not be greater than it was immediately prior to giving effect to such designation, in each case, on a pro forma basis taking into account such designation. Any such designation by the Board of Directors of the Issuer shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of such Board of Directors giving effect to such designation or an Officer’s Certificate certifying that such designation complied with the foregoing provisions. “Voting Stock” of a Person means all classes of Capital Stock of such Person then outstanding and normally entitled to vote in the election of directors. “Wholly Owned Subsidiary” means a Restricted Subsidiary of the Issuer, all of the Voting Stock of which (other than directors’ qualifying shares or shares required by any applicable law or regulation to be held by a Person other than the Issuer or another Wholly Owned Subsidiary) is owned by the Issuer or another Wholly Owned Subsidiary.

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BOOK-ENTRY; DELIVERY AND FORM General Notes sold to qualified institutional buyers in reliance on Rule 144A will initially be represented by a global note in registered form without interest coupons attached (the “Rule 144A Global Note”). Notes sold outside the United States to non-U.S. persons in reliance on Regulation S will initially be represented by a global note in registered form without interest coupons attached (the “Regulation S Global Note” and, together with the Rule 144A Global Note, the “Global Notes”). The Global Notes will be deposited, on the closing date, with, or on behalf of, a common depositary and registered in the name of the nominee of the common depositary for the accounts of Euroclear and Clearstream. Ownership of interests in the Rule 144A Global Note (the “Rule 144A Book-Entry Interests”) and ownership of interests in the Regulation S Global Note (the “Regulation S Book-Entry Interests” and, together with the Rule 144A Book-Entry Interests, the “Book-Entry Interests”) will be limited to persons that have accounts with Euroclear and/or Clearstream or persons that hold interests through such participants. Euroclear and Clearstream will hold interests in the Global Notes on behalf of their participants through customers’ securities accounts in their respective names on the books of their respective depositories. Except under the limited circumstances described below, Book-Entry Interests will not be issued in definitive form. Book-Entry Interests will be shown on, and transfers thereof will be effected only through, records maintained by Euroclear and Clearstream and their participants. The laws of some jurisdictions, including certain states of the United States, may require that certain purchasers of securities take physical delivery of those securities in definitive form. The foregoing limitations may impair your ability to own, transfer or pledge Book-Entry Interests. In addition, while the Notes are in global form, holders of Book-Entry Interests will not have the Notes registered in their name, will not have received physical delivery of the Notes in certificated form and will not be considered the registered owners or “holders” of Notes under the Indenture for any purpose. So long as the Notes are held in global form, the common depositary for Euroclear and/or Clearstream (or its nominee), as applicable, will be considered the sole holders of the Global Notes for all purposes under the Indenture. In addition, participants must rely on the procedures of Euroclear and Clearstream, and indirect participants must rely on the procedures of Euroclear and Clearstream and the participants through which they own Book-Entry Interests, to transfer their interests or to exercise any rights of holders of Notes under the Indenture. None of us, the Principal Paying Agent, the Transfer Agent, the Registrar or the Trustee (or any of our or their respective agents) will have any responsibility, or be liable, for any aspect of the records relating to the Book-Entry Interests.

Definitive Registered Notes Under the terms of the Indenture, owners of the Book-Entry Interests will receive definitive registered Notes in certificated form (“Definitive Registered Notes”) only: (1) if either Euroclear or Clearstream notifies us that it is unwilling or unable to continue to act as depositary and a successor depositary is not appointed by the Issuer within 120 days; or (2) if the owner of a Book-Entry Interest requests such exchange in writing delivered through Euroclear or Clearstream following an event of default under the Indenture and enforcement action is being taken in respect thereof under the Indenture. In such an event, the Issuer will instruct the Registrar to issue Definitive Registered Notes, registered in the name or names and issued in any approved denominations, requested by or on behalf of Euroclear, Clearstream or us, as applicable (in accordance with their respective customary procedures and based upon directions received from participants reflecting the beneficial ownership of Book-Entry Interests), and such Definitive Registered Notes will bear the restrictive legend as provided in the Indenture, unless that legend is not required by the Indenture or applicable law. To the extent permitted by law, we, the Trustee, the Principal Paying Agent, the Transfer Agent and the Registrar shall be entitled to treat the registered holder of any Global Note as the absolute owner thereof and no person will be liable for treating the registered holder as such. Ownership of the Global Notes will be evidenced through registration from time to time at the registered office of the Issuer, and such registration is a means of evidencing title to the Notes.

The Registrar will send a copy of the register to the Issuer on the Issue Date and after any change to the register of holders of the Notes made by the Registrar, with such copy to be held by the Issuer at its registered office. 221

We will not impose any fees or other charges in respect of the Notes; however, owners of the Book-Entry Interests may incur fees normally payable in respect of the maintenance and operation of accounts in Euroclear and Clearstream.

Redemption of the Global Notes In the event that any Global Note (or any portion thereof) is redeemed, Euroclear and/or Clearstream, as applicable, will redeem an equal amount of the Book-Entry Interests in such Global Note from the amount received by them in respect of the redemption of such Global Note. The redemption price payable in connection with the redemption of such Book-Entry Interests will be equal to the amount received by Euroclear and Clearstream, as applicable, in connection with the redemption of such Global Note (or any portion thereof). We understand that, under the existing practices of Euroclear and Clearstream, if fewer than all of the Notes are to be redeemed at any time, Euroclear and Clearstream will credit their respective participants’ accounts on a proportionate basis (with adjustments to prevent fractions), by lot or on such other basis as they deem fair and appropriate (including the pool factor).

Payments on Global Notes We will make payments of any amounts owing in respect of the Global Notes (including principal, premium, if any, interest and additional amounts, if any) to the Principal Paying Agent for onward payment to or to the order of the common depositary or its nominee for Euroclear and Clearstream. Euroclear and Clearstream will distribute such payments to participants in accordance with their customary procedures. We will make payments of all such amounts without deduction or withholding for, or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature, except as may be required by law and as described under “Description of the Notes—Additional Amounts.” If any such deduction or withholding is required to be made, then, to the extent described under “Description of the Notes— Additional Amounts,” we will pay additional amounts as may be necessary in order for the net amounts received by any holder of the Global Notes or owner of Book-Entry Interests after such deduction or withholding will equal the net amounts that such holder or owner would have otherwise received in respect of such Global Note or Book-Entry Interest, as the case may be, absent such withholding or deduction. We expect that standing customer instructions and customary practices will govern payments by participants to owners of Book-Entry Interests held through such participants. Under the terms of the Indenture, we, the Trustee, the Security Agent, the Transfer Agent, the Registrar and the Principal Paying Agent will treat the registered holders of the Global Notes (i.e., the common depositary for Euroclear or Clearstream (or its nominee)) as the owners thereof for the purpose of receiving payments and for all other purposes. Consequently, none of us, the Trustee, the Security Agent, the Principal Paying Agent, the Transfer Agent, the Registrar or any of their respective agents has or will have any responsibility or liability for: • any aspect of the records of Euroclear, Clearstream or any participant or indirect participant relating to, or payments made on account of, a Book-Entry Interest, for any such payments made by Euroclear or Clearstream or any participant or indirect participant or for maintaining, supervising or reviewing the records of Euroclear or Clearstream or any participant or indirect participant relating to, or payments made on account of, a Book-Entry Interest; • any other matters relating to the actions and practices of Euroclear, Clearstream or any participant or indirect participant; or • the records of the common depositary. Payments by participants to owners of Book-Entry Interests held through participants are the responsibility of such participants.

Currency of Payment for the Global Notes The principal of, premium, if any, and interest on, and all other amounts payable in respect of, the Global Notes will be paid to holders of interests in such Notes through Euroclear and/or Clearstream in euro.

Action by Owners of Book-Entry Interests Euroclear and Clearstream have advised us that they will take any action permitted to be taken by a holder of Notes (including the presentation of Notes for exchange as described above) only at the direction of one or more participants to whose account the Book-Entry Interests in the Global Notes are credited and only in respect of such portion of the aggregate principal amount of Notes as to which such participant or participants has or have given such direction. Euroclear and 222

Clearstream will not exercise any discretion in the granting of consents, waivers or the taking of any other action in respect of the Global Notes. However, if there is an event of default under the Indenture, Euroclear and Clearstream, at the request of the holders of the Notes, reserve the right to exchange the Global Notes for Definitive Registered Notes and to distribute such Definitive Registered Notes to their respective participants.

Transfers Transfers between participants in Euroclear or Clearstream will be effected in accordance with Euroclear and Clearstream’s rules and will be settled in immediately available funds. If a holder of Notes requires physical delivery of Definitive Registered Notes for any reason, including to sell Notes to persons in states which require physical delivery of such securities or to pledge such securities, such holder of Notes must transfer its interests in the Global Notes in accordance with the normal procedures of Euroclear and Clearstream and in accordance with the procedures set forth in the Indenture. The Global Notes will bear a legend to the effect set forth under “Transfer Restrictions.” Book Entry Interests in the Global Notes will be subject to the restrictions on transfers and certification requirements discussed under “Transfer Restrictions.” Transfers of Rule 144A Book-Entry Interests to persons wishing to take delivery of Rule 144A Book-Entry Interests will at all times be subject to such transfer restrictions. Rule 144A Book-Entry Interests may be transferred to a person who takes delivery in the form of a Regulation S Book- Entry Interest only upon delivery by the transferor of a written certification (in the form provided in the Indenture) to the effect that such transfer is being made in accordance with Regulation S or Rule 144 under the U.S. Securities Act or any other exemption (if available under the U.S. Securities Act). Regulation S Book-Entry Interests may be transferred to a person who takes delivery in the form of a Rule 144A Book- Entry Interest only upon delivery by the transferor of a written certification (in the form provided in the Indenture) to the effect that such transfer is being made to a person who the transferor reasonably believes is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A or otherwise in accordance with the transfer restrictions described under “Transfer Restrictions” and in accordance with any applicable securities laws of any other jurisdiction. In connection with transfers involving an exchange of a Regulation S Book-Entry Interest for a Rule 144A Book-Entry Interest, appropriate adjustments will be made to reflect a decrease in the principal amount of the Regulation S Global Note and a corresponding increase in the principal amount of the Rule 144A Global Note. Definitive Registered Notes may be transferred and exchanged for Book-Entry Interests in a Global Note only as described under “Description of the Notes—Transfer and Exchange” and, if required, only if the transferor first delivers to the Trustee a written certificate (in the form provided in the Indenture) to the effect that such transfer will comply with the appropriate transfer restrictions applicable to such Notes. See “Transfer Restrictions.” Any Book-Entry Interest in one of the Global Notes that is transferred to a person who takes delivery in the form of a Book-Entry Interest in any other Global Note will, upon transfer, cease to be a Book-Entry Interest in the first-mentioned Global Note and become a Book-Entry Interest in such other Global Note, and accordingly will thereafter be subject to all transfer restrictions, if any, and other procedures applicable to Book-Entry Interests in such other Global Note for as long as it remains such a Book-Entry Interest.

Information Concerning Euroclear and Clearstream All Book-Entry Interests will be subject to the operations and procedures of Euroclear and Clearstream as applicable. We have provided the following summaries of those operations and procedures solely for the convenience of investors. The operations and procedures of the settlement system are controlled by the settlement system and may be changed at any time. Neither we nor the initial purchasers are responsible for those operations or procedures. We understand as follows with respect to Euroclear and Clearstream: Euroclear and Clearstream hold securities for participating organizations. They facilitate the clearance and settlement of securities transactions between their participants through electronic book-entry changes in accounts of such participants. Euroclear and Clearstream provide various services to their participants, including the safekeeping, administration, clearance, settlement, lending and borrowing of internationally traded securities. Euroclear and Clearstream interface with domestic securities markets. Euroclear and Clearstream participants are financial institutions such as underwriters, securities brokers and dealers, banks, trust companies 223

and certain other organizations. Indirect access to Euroclear and Clearstream is also available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Euroclear and Clearstream participant, either directly or indirectly. Because Euroclear and Clearstream can only act on behalf of participants, who in turn act on behalf of indirect participants and certain banks, the ability of an owner of a beneficial interest to pledge such interest to persons or entities that do not participate in the Euroclear and/or Clearstream system, or otherwise take actions in respect of such interest, may be limited by the lack of a definitive certificate for that interest. The laws of some jurisdictions require that certain persons take physical delivery of securities in definitive form. Consequently, the ability to transfer beneficial interests to such persons may be limited. In addition, owners of beneficial interests through the Euroclear or Clearstream systems will receive distributions attributable to the 144A Global Notes only through Euroclear or Clearstream participants.

Global Clearance and Settlement under the Book-Entry System The Notes represented by the Global Notes are expected to be listed on the Official List of the Irish Stock Exchange and admitted for trading on its Global Exchange Market. Transfers of interests in the Global Notes between participants in Euroclear or Clearstream will be effected in the ordinary way in accordance with their respective system’s rules and operating procedures. Although Euroclear and Clearstream currently follow the foregoing procedures in order to facilitate transfers of interests in the Global Notes among participants in Euroclear or Clearstream, they are under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued or modified at any time. None of the Issuer, the initial purchasers, the Trustee, the Transfer Agent, the Registrar or the Principal Paying Agent will have any responsibility for the performance by Euroclear, Clearstream or their participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

Initial Settlement Initial settlement for the Notes will be made in euro. Book-Entry Interests owned through Euroclear or Clearstream accounts will follow the settlement procedures applicable to conventional bonds in registered form. Book-Entry Interests will be credited to the securities custody accounts of Euroclear and Clearstream holders on the business day following the settlement date against payment for value on the settlement date.

Secondary Market Trading The Book-Entry Interests will trade through participants of Euroclear and Clearstream and will settle in same-day funds. Since the purchase determines the place of delivery, it is important to establish at the time of trading of any Book- Entry Interests where both the purchaser’s and the seller’s accounts are located to ensure that settlement can be made on the desired value date.

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TRANSFER RESTRICTIONS You are advised to consult legal counsel prior to making any offer, resale, pledge or other transfer of any of the Notes offered hereby. The Notes have not been and will not be registered under the U.S. Securities Act, or any state securities laws, and, unless so registered, may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable state securities laws. Accordingly, the Notes offered hereby are being offered and sold only to qualified institutional buyers (as defined in Rule 144A under the U.S. Securities Act) in reliance on Rule 144A under the U.S. Securities Act and to non-U.S. persons in offshore transactions in reliance on Regulation S under the U.S. Securities Act. We use the terms “offshore transaction,” “U.S. person” and “United States” with the meanings given to them in Regulation S. Each purchaser of Notes, by its acceptance thereof, will be deemed to have acknowledged, represented to and agreed with us and the Initial Purchasers as follows: (1) The purchaser understands that the Notes are being offered in a transaction not involving any public offering in the United States within the meaning of the U.S. Securities Act, that the Notes have not been and will not be registered under the U.S. Securities Act and that (A) if in the future it decides to offer, resell, pledge or otherwise transfer any of the Notes, such Notes may be offered, resold, pledged or otherwise transferred only (i) in the United States to a person whom the seller reasonably believes is a QIB in a transaction meeting the requirements of Rule 144A, and (ii) outside the United States to non-U.S. persons in a transaction complying with the provisions of Rule 904 under the U.S. Securities Act, in each case in accordance with any applicable securities laws of any State of the United States, and that (B) the purchaser will, and each subsequent holder is required to, notify any subsequent purchaser of the Notes from it of the resale restrictions referred to in (A) above. (2) You are not our “affiliate” (as defined in Rule 144 under the U.S. Securities Act) or acting on our behalf and that either: • you are a QIB, within the meaning of Rule 144A under the U.S. Securities Act and are aware that any sale of Notes to you will be made in reliance on Rule 144A under the U.S. Securities Act, and such acquisition will be for your own account or for the account of another QIB; or • you are not a U.S. person or purchasing for the account or benefit of a U.S. person, other than a distributor, and you are purchasing the Notes in an offshore transaction in accordance with Regulation S under the U.S. Securities Act. (3) You acknowledge that none of the Company, the Issuer or the Initial Purchasers, nor any person representing any of them, has made any representation to you with respect to us, the Issuer and its subsidiaries or the offer or sale of any of the Notes, other than the information contained in these Listing Particulars, which Listing Particulars have been delivered to you and upon which you are relying in making your investment decision with respect to the Notes. You acknowledge that neither the Initial Purchasers nor any person representing the Initial Purchasers makes any representation or warranty as to the accuracy or completeness of these Listing Particulars. You have had access to such financial and other information concerning the Company, the Issuer and our subsidiaries and the Notes as you have deemed necessary in connection with your decision to purchase any of the Notes, including an opportunity to ask questions of, and request information from, us and the Initial Purchasers. (4) You are purchasing the Notes for your own account, or for one or more investor accounts for which you are acting as a fiduciary or agent, in each case for investment, and not with a view to, or for offer or sale in connection with, any distribution thereof in violation of the U.S. Securities Act or any state securities laws, subject to any requirement of law that the disposition of your property or the property of such investor account or accounts be at all times within its or their control and subject to your or their ability to resell such Notes pursuant to Rule 144A or Regulation S. (5) You agree on your own behalf and on behalf of any investor account for which you are purchasing the Notes, and each subsequent holder of the Notes by its acceptance thereof will be deemed to agree, to offer, sell or otherwise transfer such Notes only (i) to the Issuer, (ii) for so long as the Notes are eligible for resale pursuant to Rule 144A under the U.S. Securities Act, to a person you reasonably believe is a QIB that purchases for its own account or for the account of a QIB to whom notice is given that the transfer is being made in reliance on 225

Rule 144A under the U.S. Securities Act or (iii) to non-U.S. persons pursuant to offers and sales that occur outside the United States in compliance with Regulation S under the U.S. Securities Act, subject in each of the foregoing cases to any requirement of law that the disposition of its property or the property of such investor account or accounts be at all times within its or their control and to compliance with any applicable state securities laws, and any applicable local laws and regulations, and further subject to our and the Trustee’s rights prior to any such offer, sale or transfer, to require that a certificate of transfer in the form appearing in the Indenture is completed and delivered by the transferor to the Trustee. (6) Each purchaser acknowledges that each Note will contain a legend substantially to the following effect: THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”)) OR (B) IT IS ACQUIRING THIS NOTE IN AN “OFFSHORE TRANSACTION” (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT), (2) IN THE CASE OF NOTES ISSUED UNDER RULE 144A, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR FOR WHICH IT HAS PURCHASED SECURITIES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) WHICH IS [IN THE CASE OF RULE 144A NOTES: ONE YEAR] [IN THE CASE OF REGULATION S NOTES: 40 DAYS] (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE) ONLY (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT, OR ANY PERSON ACTING ON ITS BEHALF, REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO NON-U.S. PERSONS IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT IN EACH OF THE FOREGOING CASES TO ANY REQUIREMENT OF LAW THAT THE DISPOSITION OF ITS PROPERTY OR THE PROPERTY OF SUCH INVESTOR ACCOUNT OR ACCOUNTS BE AT ALL TIMES WITHIN ITS OR THEIR CONTROL AND TO COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR TERRITORY OF THE UNITED STATES OR ANY OTHER JURISDICTION, AND ANY APPLICABLE LOCAL LAWS AND REGULATIONS AND FURTHER SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S RIGHTS PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSES (D) AND (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND (II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

(7) You agree that you will give to each person to whom you transfer the Notes notice of any restrictions on the transfer of such Notes.

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(8) You acknowledge that the Registrar will not be required to accept for registration or transfer any Notes acquired by you except upon presentation of evidence satisfactory to us and the Registrar that the restrictions set forth therein have been complied with. (9) You acknowledge that we, the Initial Purchasers and others will rely upon the truth and accuracy of your acknowledgements, representations, warranties and agreements and agree that if any of the acknowledgements, representations, warranties and agreements deemed to have been made in connection with your purchase of the Notes are no longer accurate, you shall promptly notify the Initial Purchasers. If you are acquiring any Notes as a fiduciary or agent for one or more investor accounts, you represent that you have sole investment discretion with respect to each such investor account and that you have full power to make the foregoing acknowledgements, representations and agreements on behalf of each such investor account. (10) You understand that no action has been taken in any jurisdiction (including the United States) by us or the Initial Purchasers that would result in a public offering of the Notes or the possession, circulation or distribution of these Listing Particulars or any other material relating to us or the Notes in any jurisdiction where action for such purpose is required. Consequently, any transfer of the Notes will be subject to the selling restrictions set forth under “Plan of Distribution.”

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TAX CONSIDERATIONS EU Savings Directive On 3 June 2003, the EU Council of Economic and Finance Ministers adopted the Council Directive 2003/48/EC regarding the taxation of savings income (the “EU Savings Directive”) that entered into force on 1 July 2005. Member States are required to provide to the tax authorities of other Member States and to the tax authorities of Anguilla, Aruba, the British Virgin Islands, the Cayman Islands, Curaçao, Guernsey, Jersey, Isle of Man, Montserrat, Sint Maarten and Turk and Caicos (collectively, the “Dependent and Associated Territories” and each a “Dependent and Associated Territory”) details of payments of interest and other similar income paid by a paying agent (within the meaning of the EU Savings Directive) to (or under certain circumstances, to the benefit of) an individual or a residual entity (as defined by the EU Savings Directive) resident or established in another Member State or in a Dependent and Associated Territory in accordance with certain bilateral agreements concluded between Luxembourg and those countries provided such agreements foresee reciprocal measures. Also with effect from 1 July 2005, a number of non-EU countries (Switzerland, Andorra, Liechtenstein, Monaco and San Marino) have agreed to adopt similar measures (either provision of information or transitional withholding) in relation to payments made by a paying agent (within the meaning of the EU Savings Directive) within its jurisdiction to, or collected by such a paying agent for, an individual resident or a residual entity (as defined by the EU Savings Directive) established in a Member State. For a transitional period, however, currently Austria and Luxembourg are instead allowed (unless they elect otherwise) to impose a withholding tax that currently is set at a rate of 35% unless the beneficiary of the interest payments elects for the exchange of information above mentioned. Furthermore, the Luxembourg government has publicly announced that Luxembourg will replace the current withholding regime with respect to the EU Savings Directive with an automatic information exchange mechanism as of 1 January 2015.

Certain French Tax Considerations The following description is a summary of certain French tax considerations relating to potential purchasers or holders of the Notes who (i) are not French residents for French tax purposes, (ii) do not hold their Notes in connection with a permanent establishment or a fixed base in France, (iii) do not otherwise hold shares of our company and (iv) are not related parties of the Issuer within the meaning of Article 39, 12 of the French Tax Code (for the purposes of this section the “holders” of Notes). It represents only a summary of certain provisions of French tax laws and regulations, as currently in effect and applied by the French tax authorities, all of which are subject to change or to different interpretation. The following description is for general information only and, because of its summary character, does not cover all details and tax considerations which may apply in specific individual cases and may even require a deviation therefrom, including as a result of the application of the provisions of any relevant tax treaty. Furthermore, it does not deal with any aspects of tax other than the withholding, income and transfer taxes described below. Prospective investors in the Notes are urged to consult their own professional tax advisors as to the French tax consequences of purchasing, owning and disposing of the Notes in light of their particular circumstances.

EU Savings Directive The EU Savings Directive was implemented into French law under Articles 199 ter, 242 ter and Articles 49 I ter to 49 I sexies of Schedule III of the French Tax Code, which impose on paying agents based in France an obligation to report to the French tax authorities certain information with respect to interest payments made to beneficial owners domiciled in another Member State, including, among other things, the identity and address of the beneficial owner and a detailed list of the different categories of interest paid to that beneficial owner.

Payments of interest and other revenues with respect to the Notes Payments of interest and other revenues made by the Issuer with respect to debt (including debt in the form of notes such as the Notes) are not subject to the withholding tax set forth under Article 125 A, III of the French Tax Code unless such payments are made outside France in a non-cooperative State or territory (Etat ou territoire non coopératif) within the 228

meaning of Article 238-0 A of the French Tax Code (an “NCST”). If such payments with respect to notes are made in an NCST, a 75% mandatory withholding tax is due by virtue of Article 125 A, III of the French Tax Code (subject to exceptions, certain of which are set forth below, and to the more favorable provisions of any applicable double tax treaty). The 75% withholding tax is applicable irrespective of the holder’s residence for tax purposes or registered headquarters. The list of NCST is published by a ministerial executive order, which is updated on an annual basis. Furthermore, according to Article 238 A of the French Tax Code, interest and other revenues with respect to debt (including debt in the form of notes such as the Notes) are not deductible from the taxable income of the Issuer if they are paid or accrued to persons domiciled or established in an NCST or paid into a bank account opened in a financial institution established in an NCST. Under certain conditions, any such non-deductible interest or other revenues may be re-characterized as constructive dividends pursuant to Articles 109 et seq. of the French Tax Code, in which case it may be subject to the withholding tax provided under Article 119 bis, 2 of the same Code, at a rate of 30% or 75%, subject to the more favorable provisions of any applicable double tax treaty. Notwithstanding the foregoing, neither the withholding tax provided by Article 125 A, III of the French Tax Code, nor, to the extent the relevant interest or other revenues relate to genuine transactions and are not in an abnormal or exaggerated amount, the non-deductibility of the interest and other revenues pursuant to Article 238 A of the French Tax Code and the related withholding tax set out under Article 119 bis, 2 of the same Code that may be levied as a result of such nondeductibility, will apply in respect of a particular issue of debt instruments, provided that the issuer can prove that the main purpose and effect of such issue was not that of enabling payments of interest and revenues to be made in an NCST (the “Exception”). Pursuant to the provisions of the administrative guidelines (Bulletin Officiel des Finances Publiques—Impôts BOI- INT-DG-20-50 dated February 11, 2014, BOI-RPPM-RCM-30-10-20-50 dated February 11, 2014 and its annex BOI-ANNX- 000364 dated September 12, 2012 and BOI-IR-DOMIC-10-20-20-60 dated February 11, 2014) (the “Administrative Guidelines”), an issue of debt instruments benefits from the Exception without the issuer having to provide any evidence supporting the main purpose and effect of such issue of debt instruments (the “Safe Harbor”), if such debt instruments are: • issued in a public offering within the meaning of Article L.411-1 of the French Code monétaire et financier or pursuant to an equivalent offer in a state other than an NCST (for this purpose, an “equivalent offering” means any offering requiring the registration or submission of an offering document by or with a foreign securities market authority); • admitted to trading on a French or foreign regulated market or multilateral financial instruments trading facility provided that such market or facility is not located in an NCST and that such market is operated by a market operator, an investment services provider or by such other similar foreign entity that is not located in an NCST; or • admitted, at the time of their issue, to the operations of a central depositary or of a securities clearing and delivery and payments systems operator within the meaning of Article L.561-2 of the French Code monétaire et financier, or of one or more similar foreign depositaries or operators provided that such depositary or operator is not located in an NCST. Since the Notes issued by the Issuer under these Listing Particulars qualify as debt securities under French commercial law and to the extent that they are (i) admitted to trading on the Irish Stock Exchange in Ireland which does not qualify as an NCST and that such market is operated by a market operator that is not located in an NCST, and/or (ii) admitted, at the time of their issue, to the operations of a central depositary or of a securities clearing and delivery and payments systems operator within the meaning of Article L. 561-2 of the French Code monétaire et financier that is not located in an NCST, payments of interest and other revenues made by or on behalf of the Issuer with respect to the Notes to their holders will fall under the Safe Harbor.

Accordingly, such payments made by or on behalf of the Issuer to the holders of the Notes will be exempt from the withholding tax set forth under Article 125 A, III of the French Tax Code, as construed under the Administrative Guidelines. Moreover, under the same conditions and to the extent that the relevant interest and other revenues relate to genuine transactions and are not in an abnormal or exaggerated amount, interest and other revenues paid by or on behalf of the Issuer to the holders of the Notes in respect of the Notes will not be subject, pursuant to the Administrative Guidelines, to the related non-deductibility rule set forth under Article 238 A of the French Tax Code and, as a result, will not be subject to the related withholding tax set forth under Article 119 bis 2 of the French Tax Code solely on account of their being paid or

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accrued to a person domiciled or established in a NCST State or paid into a bank account opened in a financial institution established in such a NCST.

Sale or Other Disposition of the Notes The holders of Notes who are not a resident of France for French tax purposes and who do not hold their Notes in connection with a permanent establishment or a fixed place of business in France will not be subject to income or withholding taxes in France with respect to gains realized on the sale, exchange or other disposition of their Notes.

Stamp Duty and Similar Taxes No transfer taxes or similar duties are payable in France in connection with the issuance or redemption of the Notes, as well as in connection with the transfer of the Notes, other than the possible application of a fixed registration duty (droit fixe) in case of filing on a voluntary basis with the French tax authorities.

Material U.S. Federal Income Tax Considerations To ensure compliance with Internal Revenue Service Circular 230, you are hereby notified that any discussion of tax matters set forth in these Listing Particulars was written in connection with the promotion or marketing of the Transactions or matters addressed herein and was not intended or written to be used, and cannot be used by any prospective investor, for the purpose of avoiding tax-related penalties under federal, state or local tax law. Each prospective investor should seek advice based on its particular circumstances from an independent tax advisor. The following is a summary of the material U.S. federal income tax consequences of the purchase, ownership and disposition of Notes as of the date hereof. This summary deals only with Notes that are held as capital assets by a U.S. holder (as defined herein) who acquires the Notes upon original issuance at their initial offering price. A “U.S. holder” means a beneficial owner of Notes that is for U.S. federal income tax purposes any of the following: • an individual who is a citizen or resident of the U.S.; • a corporation (or any other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the U.S., any state thereof or the District of Columbia; • an estate the income of which is subject to U.S. federal income taxation regardless of its source; or • a trust if it (1) is subject to the primary supervision of a court within the U.S. and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable United States Treasury Regulations (“Treasury Regulations”) to be treated as a U.S. person. This summary is based upon provisions of the United States Internal Revenue Code of 1986, as amended (the “Code”), and Treasury Regulations, rulings and judicial decisions as of the date hereof. Those authorities may be changed, perhaps retroactively, so as to result in U.S. federal income tax consequences different from those summarized below. This summary does not address all aspects of U.S. federal income taxes and does not address foreign, state, local or other tax consequences that may be relevant to U.S. holders in light of their particular circumstances. In addition, it does not represent a detailed description of the U.S. federal income tax consequences applicable to you if you are subject to special treatment under the U.S. federal income tax laws. For example, this summary does not address: • tax consequences to holders who may be subject to special tax treatment, such as dealers in securities or currencies, traders in securities that elect to use the mark-to-market method of accounting for their securities, financial institutions, regulated investment companies, real estate investment trusts, investors in partnerships or other pass-through entities for U.S. federal income tax purposes, tax-exempt entities or insurance companies; • tax consequences to persons holding the Notes as part of a hedging, integrated, constructive sale or conversion transaction or a straddle; • tax consequences to U.S. holders whose “functional currency” is not the U.S. dollar; • U.S. federal estate or gift tax consequences, if any; or • alternative minimum tax consequences, if any.

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If an entity treated as a partnership for U.S. federal income tax purposes holds the Notes, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. If you are a partner of a partnership holding the Notes, you should consult your tax advisors. If you are considering the purchase of Notes, you should consult your tax advisors concerning the particular U.S. federal income tax consequences to you of the purchase, ownership and disposition of the Notes, as well as the consequences to you arising under the laws of any other taxing jurisdiction.

Payments of interest Stated interest on a Note generally will be taxable to you as ordinary income at the time it is paid or accrued in accordance with your method of accounting for tax purposes. In addition to interest on the Notes, which includes any foreign tax withheld from the interest payments you receive, you will be required to include in income any additional amounts paid in respect of such foreign tax withheld. You may be entitled to deduct or credit such foreign taxes, subject to certain limitations (including that the election to deduct or credit foreign taxes applies to all of your applicable foreign taxes for a particular tax year). Stated interest income (including any additional amounts) on a Note generally will be considered foreign source income and, for purposes of the U.S. foreign tax credit, generally will be considered passive category income. You generally will be denied a foreign tax credit for foreign taxes imposed with respect to the Notes where you do not meet a minimum holding period requirement during which you are not protected from risk of loss. The rules governing the foreign tax credit are complex. You are urged to consult your tax advisors regarding the availability of the foreign tax credit under your particular circumstances. If you receive interest payments in euro and you use the cash basis method of accounting for U.S. federal income tax purposes, you will be required to include in income the U.S. dollar value of the amount received, determined by translating the euro received at the “spot rate” in effect on the date of receipt regardless of whether the payment is in fact converted into U.S. dollars. You will not recognize exchange gain or loss with respect to the receipt of such payment, but may have exchange gain or loss attributable to the actual disposition of any euro actually received. If you use the accrual method of accounting for U.S. federal income tax purposes, you may determine the amount of income recognized with respect to such stated interest in accordance with either of two methods. Under the first method, you will be required to include in income for each taxable year the U.S. dollar value of the stated interest that has accrued during such year, determined by translating such interest at the average rate of exchange for the period or periods during which such interest accrued. Under the second method, you may elect to translate stated interest income at the spot rate on: • the last day of the accrual period, • the last day of the taxable year if the accrual period straddles your taxable year, or

• the date the stated interest payment is received if such date is within five business days of the end of the accrual period. This election will apply to all debt obligations you hold from year to year and cannot be changed without the consent of the United States Internal Revenue Service (the “IRS”). You should consult your tax advisors as to the advisability of making the above election. In addition, upon receipt of a stated interest payment on a Note (including, upon the sale of a Note, the receipt of proceeds which include amounts attributable to accrued interest previously included in income), you will recognize exchange gain or loss generally treated as ordinary income or loss, in an amount equal to the difference, if any, between the U.S. dollar value of such payment (determined by translating the euro received at the spot rate in effect on the date of receipt) and the U.S. dollar value of the stated interest income you previously included in income with respect to such payment. Exchange gain or loss will be treated as ordinary income or loss and generally will be U.S. source gain or loss.

Sale, exchange, retirement and other disposition of Notes Upon the sale, exchange, retirement or other taxable disposition of a Note, you generally will recognize gain or loss equal to the difference between the amount realized upon the sale, exchange, retirement or other taxable disposition (less an amount equal to any accrued but unpaid stated interest, which will be taxable as interest income to the extent not previously included in income) and your adjusted tax basis in the Note. Your adjusted tax basis in a Note, in general, will be your U.S. dollar cost for that Note reduced by any payments other than payments of stated interest. If you purchased your Note with euro, your cost generally will be the U.S. dollar value of the euro paid for such Note determined at the spot rate on the 231

closing date of the Offering. If your Note is sold, exchanged, retired or otherwise disposed of in a taxable transaction for euro, the amount realized generally will be based on the spot rate in effect on the date of such sale, exchange, retirement or other taxable disposition (or, in the case of a cash basis or electing accrual basis taxpayer, the settlement date of the sale, exchange, retirement or disposition, if the Note is treated as traded on an established securities market for U.S. federal income tax purposes). Subject to the foreign currency rules discussed below, your gain or loss generally will be capital gain or loss and will be long-term capital gain or loss if at the time of sale, exchange, retirement or other taxable disposition, you have held the Note for more than one year. Capital gains of individuals derived in respect of capital assets held for more than one year are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations. Gain or loss realized by you on the sale, exchange, retirement or other taxable disposition of a Note generally would be treated as U.S. source gain or loss. A portion of your gain or loss with respect to the principal amount of a Note may be treated as exchange gain or loss. Exchange gain or loss will be treated as ordinary income or loss and generally will be U.S. source gain or loss. For these purposes, the principal amount of the Note is your purchase price for the Note calculated in euro on the date of purchase, and the amount of exchange gain or loss recognized is equal to the difference between (i) the U.S. dollar value of such principal amount determined on the date of the sale, exchange, retirement or other taxable disposition of the Note (or in the case of a cash basis or electing accrual basis taxpayer, the settlement date, if the Note is treated as traded on an established securities market for U.S. federal income tax purposes) and (ii) the U.S. dollar value of such principal amount determined on the date you purchased the Note. The amount of exchange gain or loss will be limited to the amount of overall gain or loss realized on the disposition of the Note.

Exchange gain or loss with respect to euro Your tax basis in the euro received as interest on a Note will be the U.S. dollar value thereof at the spot rate in effect on the date the euro are received. Upon the sale, exchange, retirement or other taxable disposition of a Note, if the Notes are traded on an established securities market, a cash basis taxpayer (or, upon election, an accrual basis taxpayer) will have a basis in the euro received equal to the U.S. dollar value thereof at the spot rate in effect on the settlement date of such sale, exchange, retirement or disposition (that is, the same date that the euro are valued for purposes of determining the amount realized on the Note). In all other cases, since the amount realized is based on the spot rate in effect on the date of the sale, exchange or retirement of the Note (including the trade date if the Notes are traded on an established securities market), (i) the taxpayer will realize foreign exchange gain or loss to the extent the U.S. dollar value of the euro received (based on the spot rate in effect on the date of receipt) differs from the U.S. dollar value of the euro on the date of the sale, exchange, or retirement of the Note, and (ii) the taxpayer’s basis in the euro received will equal the U.S. dollar value of the euro, based on the spot rate in effect on the date of receipt. Any gain or loss recognized by you on a sale, exchange, retirement or other disposition of the euro will be ordinary income or loss and generally will be U.S. source gain or loss.

Information reporting and backup withholding Generally, information reporting requirements may apply to payments of principal and interest on a Note or the proceeds from the sale of a Note, unless you are an exempt recipient. Additionally, if you fail to provide your accurate taxpayer identification number, or in the case of interest payments fail either to report in full dividend and interest income or to make certain certifications, you may be subject to backup withholding. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against your U.S. federal income tax liability provided the required information is timely furnished to the IRS.

Disclosure Requirements Certain U.S. holders are required to report information relating to an interest in the Notes, subject to certain exceptions (including an exception for Notes held in accounts maintained by certain financial institutions), by attaching a complete IRS Form 8938 (Statement of Specified Foreign Financial Assets) with their tax return for each year in which they hold an interest in the Notes. You are urged to consult your tax advisors regarding information reporting requirements relating to your ownership of the Notes. Certain transactions are required to be reported to the IRS, including, in certain circumstances, a sale, exchange, retirement or other taxable disposition of a Note to the extent that such sale, exchange, retirement or other taxable disposition 232

results in a tax loss in excess of a threshold amount. You should consult with your tax advisors to determine the tax return obligations, if any, with respect to an investment in the Notes, including any requirement to file IRS Form 8886 (Reportable Transaction Disclosure Statement).

Additional Notes The Issuer may issue Additional Notes as described under “Description of the Notes—Additional Notes.” These Additional Notes, even if they are treated for non-tax purposes as part of the same series as the Notes issued hereby (the “Original Notes”), in some cases may not be “fungible” with the Original Notes for U.S. federal income tax purposes. In such case, the Additional Notes may be considered to have original issue discount, which may affect the market value of the Original Notes if the Additional Notes are not otherwise distinguishable from the Original Notes. The Original Notes generally should not be subject to the 30% withholding tax under Sections 1471-1474 of the Code (“FATCA Withholding”). However, if the Additional Notes are subject to FATCA Withholding and are not otherwise distinguishable from the Original Notes, withholding agents may treat all of the Notes, including the Original Notes, as subject to FATCA Withholding. In the event any FATCA Withholding applies, neither the Issuer nor any other person would, pursuant to the terms of the Notes, be required to pay additional amounts with respect to the withheld amount. Holders should consult their tax advisors on how the issuance of Additional Notes that are subject to FATCA Withholding may affect their investment in the Original Notes.

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LIMITATIONS ON VALIDITY AND ENFORCEABILITY OF THE SECURITY INTERESTS AND CERTAIN INSOLVENCY LAW CONSIDERATIONS Set forth below is a summary of certain limitations on the enforceability of the security interests as well as certain aspects of insolvency law in France.

French Insolvency Law We conduct most of our business activity in France and, to the extent that the center of our main interests is deemed to be in France, we would be subject to French insolvency proceedings affecting creditors, including court-assisted pre- insolvency proceedings (mandat ad hoc or conciliation proceedings), and court-administered insolvency proceedings being either safeguard (procédure de sauvegarde), accelerated financial safeguard (sauvegarde financière accélérée), reorganization or liquidation proceedings (redressement or liquidation judiciaire). In general, French insolvency legislation favors the continuation of a business and protection of employment over the payment of creditors and could limit your ability to enforce your rights under the Notes and corresponding security interests. The following is a brief description of certain aspects of the procedures for treatment of entities facing corporate difficulties under French law and of insolvency proceedings governed by French law. French insolvency law may change as a result of Ordinance No. 2014-326 of March 12, 2014 relating to the reform of the prevention of corporate difficulties and of insolvency proceedings (the “Ordinance No. 2014-326”), which is expected to come into force on July 1, 2014. This reform, which aims to improve the efficacy of insolvency proceedings and to increase certain creditors’ rights in such proceedings, will affect court-assisted proceedings and court-administered proceedings described below. With respect to court-assisted proceedings, Ordinance No. 2014-326 provides for an extension of the New Money Lien (as defined below in “—Court-assisted Proceedings—Conciliation Proceedings”) to creditors who agree to provide cash, goods or services to a debtor in the course of conciliation proceedings. Under current law, creditors are only entitled to enjoy the New Money Lien priority of payment over claims approved under the conciliation agreement (as described below “— Court-assisted Proceedings—Conciliation Proceedings”). With respect to court-administered proceedings, the reform introduces new general “accelerated safeguard” proceedings (sauvegarde accélérée) process alongside the existing safeguard proceedings (see “—Court-administered Proceedings—Safeguard Proceedings”) and accelerated financial safeguard proceedings (see “—Court-administered Proceedings—Accelerated Safeguard Proceedings”). These accelerated safeguard proceedings will be available to a company when its indebtedness is not mainly financial, i.e. when the creditors of the company which are involved in the conciliation are not mainly banks (for example, suppliers, tax administration, social security administration or employees). The requirements to commence these accelerated safeguard proceedings are similar to those existing for accelerated financial safeguard proceedings. In accelerated safeguard proceedings, however, the safeguard plan must be adopted within three months of the commencement of the proceedings, compared to only one month for the accelerated financial safeguard proceedings. Furthermore, creditors are granted the right to submit a safeguard or reorganization plan concurrently with the plan submitted by the debtor. As of today, only the debtor and the court-appointed administrator (administrateur judiciaire), as the case may be, are entitled to put such plans to the vote of the committee of creditors (see “—Court-administered Proceedings—Safeguard, Reorganization and Liquidation Proceedings”). In addition, the claim declaration regime will be simplified and will be more favorable to creditors: any claim brought to the attention of the court-appointed administrator (administrateur judiciaire) by the debtor will be deemed declared whereas, under current law, all the creditors are required to declare to the court-appointed administrator the debts that arose prior to the commencement of the proceedings (see “Court- administered Proceedings—Safeguard, Reorganization and Liquidation Proceedings”).

European Union Under European Council Regulation (EC) No.1346/2000 of May 29, 2000 on insolvency proceedings, if a debtor is located in the EU (other than Denmark), French courts shall have jurisdiction over the main insolvency proceedings if the center of the debtor’s main interests is situated in France. In the case of a company or legal person, the place of the registered office is deemed to be the center of its main interests in the absence of proof to the contrary. In determining whether the center of main interests of a company is in France, French courts will take into account a broad range of factual elements.

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Grace Periods In addition to insolvency laws discussed below, you could, like any other creditors, be subject to Articles 1244-1 et seq. of the French Civil Code (Code civil). Pursuant to the provisions of these articles, French courts may, in any civil proceedings involving the debtor, whether initiated by the debtor or the creditor, taking into account the debtor’s financial position and the creditor’s financial needs, defer or otherwise reschedule the payment dates of payment obligations over a maximum period of two years and decide that any amounts, the payment date of which is thus deferred or rescheduled, will bear interest at a rate which is lower than the contractual rate (but not lower than the legal rate set by the French Central Bank (Banque de France), which is currently 0.04% per annum) or that payments made shall first be allocated to repayment of the principal. A court order made under Articles 1244-1 et seq. of the French Civil Code will suspend most pending enforcement measures, and any contractual interest or penalty for late payment will not accrue or be due during the period ordered by the court. A creditor cannot contract out of such grace periods. When the debtor benefits from conciliation proceedings, these statutory provisions shall be read in combination with Article L.611-7 of the French Commercial Code.

Insolvency Test Under French law, a company is deemed insolvent (en état de cessation des paiements) when it is unable to pay its debts as they fall due with its available assets, taking into account available credit lines, existing rescheduling agreements and debt moratoria.

Court-assisted Proceedings Mandat Ad Hoc Proceedings. A company that is facing any type of difficulties and has not then been insolvent for more than 45 days may request from the court the appointment of an ad hoc agent (mandataire ad hoc) whose name can be suggested by the company. Mandat ad hoc proceedings are confidential. The mandataire ad hoc’s duties are determined by the court. Such mandataire ad hoc is usually appointed in order to facilitate negotiations with creditors but it has no legal powers to coerce the creditors into accepting a proposal. The agreement reached by the parties (if any) with the help of such mandataire ad hoc can be reported by the latter to the President of the relevant Commercial Court but is not approved by such court or the President of such court. Under mandat ad hoc proceedings, the restructuring agreement between the company and its creditors will be negotiated on a purely consensual and voluntary basis; those creditors not willing to sign up to the agreement cannot be bound by its terms. Creditors are not barred from taking legal action or exercising their rights against the company to recover their claims during mandat ad hoc proceedings, although in practice they usually accept not to do so. In any event, the debtor retains the right during mandat ad hoc proceedings to petition the relevant judge for an order under Articles 1244-1 et seq. of the French Civil Code as set forth above. Conciliation Proceedings. A company may, in its sole discretion, apply for the commencement of conciliation proceedings (procédure de conciliation) with respect to itself, provided it (i) is not insolvent, or has been insolvent for less than 45 days and (ii) experiences current or predictable legal, economic or financial difficulties. The debtor petitions the President of the Commercial Court for the appointment of a conciliator (conciliateur) (whose name it can suggest) in charge of assisting the debtor in negotiating with all or part of its creditors and/or trade partners an agreement putting an end to the company’s difficulties. Conciliation proceedings are confidential (subject to certain exceptions) and may last up to five months. During the proceedings, creditors may continue to sue individually for payment of their claims, although in practice they usually accept not to do so. In addition, under Article L.611-7 of the French Commercial Code, the debtor retains the right to petition the President of the Commercial Court for a grace period pursuant to Articles 1244-1 et seq. of the French civil code. The agreement among the debtor and those of its creditors who are party to the conciliation proceedings may be either acknowledged (constaté) by the President of the Court or approved (homologué) by the Court. The acknowledgement (constatation) of the agreement by the President of the Court gives the agreement the legal force of a final judgment, which means that it constitutes a judicial title that can be enforced by the parties without further recourse to a judge (titre exécutoire), but the conciliation proceedings remain confidential (i.e., third parties and non-party creditors are not entitled to know about the content of this agreement).

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The approval (homologation) of the conciliation agreement by the court, which occurs at the debtor’s request and under specific conditions, will make the conciliation proceedings public and will have the following specific consequences: • creditors who provided new money, goods or services designed to ensure the continuation of the business of the debtor pursuant to the conciliation agreement (other than shareholders providing new equity) will (except if they waive this right) enjoy a priority of payment over all pre-proceedings and post-proceedings claims (other than certain pre-proceedings employment claims and procedural costs), in the event of subsequent safeguard proceedings, judicial reorganization proceedings or judicial liquidation proceedings (the “New Money Lien”); and • in the event of subsequent judicial reorganization proceedings or judicial liquidation proceedings, the date on which the debtor will subsequently be deemed to have become insolvent (en état de cessation des paiements) and therefore the starting date of the suspect period (as defined below) cannot, except in cases of fraud (see “— Fraudulent Conveyance in France”), be set by the court as of a date earlier than the date of the court decision granting approval (homologation) of the agreement by the court (see the definition of the date of the cessation des paiements in “—Court-administered Proceedings—Judicial Reorganization or Liquidation Proceedings”). Joint debtors, personal guarantors, or any third party that granted a guarantee (sûreté personnelle) or a security interest (sûreté réelle) to guarantee the debtor’s liabilities can benefit from the provisions of the approved or acknowledged conciliation agreement. In the event of a breach of the conciliation agreement, any party to an agreement that has been acknowledged or approved in the manner described above may petition the Court for its termination. The commencement of subsequent insolvency proceedings will automatically put an end to the conciliation agreement, in which case the creditors will recover their claims and security interests, to the extent of those amounts not already paid to them. In accordance with Article L.628- 1 of the French Commercial Code, the commencement of conciliation proceedings is a condition to the commencement of accelerated financial safeguard proceedings, which may be commenced when a draft plan has been negotiated and is supported by a large majority of creditors (without the need to reach unanimity) (see “—Court-administered Proceedings— Accelerated Financial Safeguard Proceedings”)

Court-administered Proceedings—Safeguard, Reorganization and Liquidation Proceedings Court-administered Proceedings—Safeguard Proceedings A company may, in its sole discretion, initiate safeguard proceedings (procédure de sauvegarde) with respect to itself, provided that (i) it is not insolvent (en état de cessation des paiements) at the time and (ii) it experiences difficulties which it finds itself unable to overcome. Creditors of the company are not notified of nor invited to attend the hearing before the court at which the commencement of safeguard proceedings is requested. Following the commencement of safeguard proceedings, a court-appointed administrator (administrateur judiciaire) is usually appointed in accordance with Articles L.621-4 and L.622-1 of the French Commercial Code, to assist and monitor the debtor in the management of its business during an observation period, which may last up to 18 months and helps the company elaborate a draft safeguard plan (projet de plan de sauvegarde). Creditors do not have effective control over the proceedings, which remain in the hands of the debtor assisted by the court-appointed administrator (administrateur judiciaire) and are overseen by the court. During the safeguard proceedings, payment by the debtor of any debts incurred prior to the commencement of the proceedings is prohibited, subject to very limited exceptions. For example, the bankruptcy judge may authorize payments for prior debts in order to discharge a security interest on property needed for the continued operation of the business or recover goods or rights transferred as collateral in a fiduciary estate (patrimoine fiduciaire). In addition, creditors are required to declare to the representative of all the debtor’s creditors (mandataire judiciaire), appointed by the bankruptcy court in accordance with Article L.621-4 of the French Commercial Code, the debts that arose prior to the commencement of the proceedings (as well as the post-commencement non-privileged debts (as defined below)); creditors are also prohibited from filing any individual lawsuit against the debtor for any payment default in relation to such debts (see “—Status of Creditors during Safeguard Proceedings, Accelerated Financial Safeguard Proceedings, Judicial Reorganization Proceedings or Judicial Liquidation Proceedings”) and the accrual of interest on short-term loans with a maturity of less than one year), or on payments deferred for less than one year, is stopped. Debts arising after the commencement of the safeguard proceedings and which relate to expenses that are necessary for the continued activity of the business during such observation period or required by the proceedings, or in consideration of a service rendered to the debtor during this period must be paid as and when they fall due. If such is not the case, they will be given priority over debts incurred prior to the commencement of the safeguard proceedings (with certain limited exceptions such as the “New Money Lien” granted in conciliation proceedings). 236

In the case of large companies (with more than 150 employees or a turnover greater than €20 million) or upon request of the debtor or the administrator, two creditors’ committees will then be established: one for credit institutions (which includes any person or entity having granted credit or advances in favor of the debtor) and the other for suppliers holding claims representing more than 3% of the total claims held by the debtor’s suppliers. These committees will be consulted on the safeguard plan drafted by the debtor’s management during the observation period. In addition, any member of these committees may submit any safeguard plan proposal to the debtor and the court-appointed administrator. Holders of notes or bonds are organized in a single general meeting of all noteholders (obligataires), without making any distinction between notes or bond issues or the law applicable to them, which general meeting is convened and held for that purpose. The committees must each approve or reject the safeguard plan within a minimum 20 to 30 days of its submission. This period may be extended or shortened but will never be shorter than 15 days. The plan must be approved by vote of each committee, in each case, at a two-thirds majority of all outstanding claims of voting creditors. The claims that are secured by a trust (fiducie) constituted as a guarantee granted by the debtor are not taken into account in this calculation. In addition, creditors (i) the repayment schedule of which is not modified by the plan, or (ii) the claims of which are to be paid in full and in cash as soon as the plan is adopted or as soon as their claims are admitted, are not included in the quorum and do not take part in the vote. Noteholders approve the plan at the same two-thirds majority of the outstanding claims of all noteholders expressing a vote. Approval of the plan at the two-thirds majority shall, if the plan is approved by the court, bind all the members of the committees and the noteholders (including those who abstained or voted against the adoption of the plan). The plan submitted to the committees and the noteholders, if any, must take into account subordination agreements entered into by the creditors before the commencement of the proceedings, may treat creditors differently where their situation so justifies and may also include debt rescheduling or cancelling, and/or (with relevant shareholder consent) debt- for-equity swaps. If, within the first six months of the observation period, the creditors’ committees and the general meeting of noteholders approve the plan, the court will adopt the plan subject to verification by the court that the interests of all creditors are sufficiently safeguarded and to a rescheduling of the claims of creditors that are not members of the committees or noteholders (see below). With respect to creditors who are not members of the committees, or in the event no committees are established, proposals may be made to and accepted by each creditor collectively or individually. For those creditors who do not belong to creditors’ committees or to the noteholders’ general meeting and who have not otherwise reached a debt restructuring or cancellation agreement with the debtor, the court may reschedule the repayment of their debts over a maximum period of ten years, except for debts with maturity dates of more than ten years, in which case the maturity date shall remain the same. The court cannot obligate such creditors to waive any part of their claim or accept debt-for-equity-swaps. The first payment must be made within a year of the judgment adopting the plan (as from the third year included, the amount of each annual instalment must be of at least 5% of the total admitted liabilities to be paid in accordance with the plan), except if this would have the effect of accelerating the existing contractual repayment terms. In the event that the debtor company’s proposed plan is not approved in identical terms by both committees and the general meeting of noteholders within the first six months of the observation period (either because any of the groups of creditors has rejected it or because any of the groups of creditors has still not voted on it), the court can still adopt a safeguard plan in the time remaining until the end of the observation period. In such a case the rules are the same as the ones applicable to creditors that are not part of the committees and, in particular, the Court can only impose a rescheduling of the debt repayment (as described above).

Creditors whose repayment schedule is not modified by the plan, or who are to be paid as soon as the plan is adopted or as soon as their claims are admitted, are not required to be consulted or to vote on the plan. Should safeguard (or judicial reorganization) proceedings be opened against the Issuer, the holders of the Notes will be treated as noteholders of the Issuer and will take part in the general meeting of noteholders and requested to vote on any draft safeguard plan proposed by the Issuer.

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Court-administered Proceedings—Accelerated Financial Safeguard Proceedings Conceived as a means of facilitating “pre-packaged” bankruptcy proceedings in France, accelerated financial safeguard proceedings (the “AFS”) are available to debtors having prepared in conciliation proceedings a draft safeguard plan ensuring the continuation of their business as a going concern and supported by enough of their financial creditors (i.e., members of the credit institutions’ committee and noteholders (if any)) to render likely its adoption (at the two-thirds majority applicable in safeguard proceedings) by the credit institutions’ committee and the general meeting of noteholders (if any), within a maximum of two months from the commencement of the proceedings. Only such financial creditors are involved in such a restructuring plan and consulted on the draft safeguard plan, and therefore an AFS filing does not affect nor entail suspension of payment to creditors other than such financial creditors. As with traditional safeguard proceedings, the plan adopted in the context of an AFS may notably provide for rescheduling, debt reduction/cancellation, and conversion of debt into equity (debt-for-equity swaps requiring the relevant shareholders’ consent). In order to file for an AFS, the debtor company must (i) be engaged in conciliation proceedings; (ii) not be insolvent; (iii) face financial difficulties which it finds itself unable to overcome; and (iv) have (a) either more than 150 employees or a turnover greater than €20 million or (b) total assets on their balance sheet (aa) exceeding €25 million or (bb) of at least €10 million if they control another company (X) which has more than 150 employees, (Y) whose turnover for the previous financial year is greater than €20 million or (Z) whose total assets on their balance sheet exceed €25 million. Creditors, other than financial creditors, such as public creditors, the tax or social security administration and suppliers are not directly impacted by the AFS. Their debts will continue to be due and payable in accordance with their contractual or legal terms. Since the AFS are by nature accelerated proceedings, very tight deadlines are imposed. The commercial court must approve any restructuring plan within one month of the commencement of the proceedings, although this deadline may be extended by up to a maximum of one additional month. If an AFS plan is not adopted by the creditors and approved by the court within such deadlines, the court must terminate the AFS proceedings.

Court-administered Proceedings—Judicial Reorganization or Liquidation Proceedings Judicial reorganization (redressement judiciaire) or liquidation proceedings (liquidation judiciaire) may be initiated against or by a company only if it is insolvent and, as regards liquidation proceedings, only if the company’s restructuring is manifestly impossible. A decision from the French Constitutional Court dated December 7, 2012 no 2012-286 QPC held anti- constitutional the commencement of judicial reorganization proceedings by the Court at its own initiative (the same reasoning is likely to apply to judicial liquidation proceedings). The company is required to petition for insolvency proceedings within 45 days of becoming insolvent, if it has not otherwise requested the commencement of conciliation proceedings. If it does not, de jure managers (including directors) and, as the case may be, de facto managers may incur personal civil liability. The date of insolvency (cessation des paiements) is deemed to be the date of the court order commencing such proceedings, unless the court sets an earlier date, which may be up to 18 months before the date of the court order. However, except in the case of fraud, the date of insolvency may not be fixed at a date earlier than the date of the final court decision that approved an agreement (homologation) in the context of conciliation proceedings (see “—Conciliation Proceedings”). The date of insolvency is important because it marks the beginning of the suspect period (période suspecte). Certain transactions undertaken during the suspect period may be void or voidable. The court order commencing the proceedings may order either the reorganization or the liquidation of the company. In the event of reorganization, an administrator (administrateur judiciaire) is usually appointed by the court to monitor the business of the company during an observation period of 6 months, which may be extended by 6 or 12 months, and makes proposals either for the reorganization of the company (by elaborating, with the assistance of the debtor, a reorganization plan, which is similar to a safeguard plan; see “—Safeguard Proceedings”), or the sale of the business or the liquidation of the company. Committees of creditors and a general noteholders meeting may set up under the same conditions as in safeguard proceedings (see above). At any time during this observation period, the court can order the liquidation of the company (however, it cannot be ruled out that, further to the aforementioned decision from the French Constitutional Court, the constitutionality of the conversion of a safeguard or judicial reorganization proceedings into judicial reorganization or liquidation proceedings be challenged when it is decided upon the court’s own initiative).

Void and Voidable Transactions Void transactions include transactions or payments entered into during the suspect period that may constitute voluntary preferences for the benefit of some creditors to the detriment of other creditors. These include transfers of assets for no 238

consideration, contracts under which the reciprocal obligations of the company significantly exceed those of the other party, payments of debts not due at the time of payment, payments made in a manner that is not commonly used in the ordinary course of business, security granted for pre-existing indebtedness; any provisional measures (mesures conservatoires) (unless the writ of attachment or seizure predates the date of insolvency); operations relating to stock options; fiduciary transfers (unless the transfer is made as a security for an indebtedness simultaneously entered into) and modifications to existing fiduciary transfers securing previous debts. Voidable transactions include: transactions or payments for due debts made as from the date of insolvency; transactions for consideration; notices of attachments made to third parties (avis à tiers détenteur); seizures (saisie attribution); and oppositions made during the suspect period; in each case, if the party dealing with the company in any of these transactions knew that the company was then insolvent. Transactions relating to the transfer of assets for no consideration are also voidable when entered into during the six months period prior to the beginning of the suspect period.

Creditors’ Liability Pursuant to Article L.650–1 of the French Commercial Code, as interpreted by case law, where safeguard, judicial reorganization or judicial liquidation proceedings have been commenced, creditors may be held liable for the losses suffered as a result of facilities granted to the debtor only if the granting of such facilities was wrongful and in the case of (i) fraud, (ii) interference with the management of the debtor, or (iii) if the security or guarantees taken to support the facilities are disproportionate to such facilities. In addition, any security or guarantees taken to support facilities in respect of which a creditor is found liable in such circumstances can be cancelled or reduced by the court.

Status of Creditors during Safeguard Proceedings, AFS, Judicial Reorganization Proceedings or Judicial Liquidation Proceedings As a general rule, creditors domiciled in France whose claims arose prior to the commencement of the proceedings must file a claim with the court-appointed mandataire judiciaire within two months of the publication of the court order in the BODACC (Bulletin Officiel des Annonces Civiles et Commerciales) (by exception, the deadline starts upon receipt of an individual notification for those creditors whose claim arose out of a published contract or who benefit from a published security interest); this period is extended to four months for creditors domiciled outside France. Creditors who have not submitted their claims during the relevant period are barred, from receiving distributions made in accordance with the proceedings (subject to very limited exceptions). Employees are not subject to such limits and are preferential creditors under French law. From the date of the court order commencing its insolvency proceedings (safeguard, AFS (subject to the below), judicial reorganization and liquidation proceedings), the company is prohibited from paying (i) debts outstanding prior to that date (subject to specified exceptions, which essentially concern (x) the set-off of interrelated debts and (y) payments made to recover assets for which recovery is justified by the continued operation of the business where such payments are authorized by the bankruptcy court), and (ii) debts arising after commencement of the proceedings, if such debts are not useful to continued operation of the company after the commencement of the proceedings (“post-commencement non-privileged debts”). During this period, creditors may not pursue any legal action against the company with respect to any claim arising prior to the court order commencing the proceedings or post-commencement non-privileged debts if the objective of such legal action is: • to obtain an order for or payment of a sum of money by the company to the creditor (however, the creditor may nonetheless require that a court rule to determine the amount due); or • to terminate a contract for non-payment of pre-petition debts of the company or to enforce the creditor’s rights against any assets of the company (except where such asset, whether tangible or intangible, movable or immovable, is located in another Member State of the European Union, in which case the creditors’ in rem rights thereon would not be affected by the insolvency proceedings, in accordance with the terms of Article 5 of EC Regulations 1346/2000). In AFS proceedings, however: • debts owed to creditors other than financial creditors party to the AFS proceedings should be paid as they fall due; and • the debtor prepares a list of the claims of all creditors who took part in the conciliation proceedings: this list is certified by its statutory auditors (or the debtor’s accountant, as the case may be). Although such creditors can 239

file proofs of claim pursuant to the regular process, they may also avail themselves of this simplified alternative and merely adjust the amounts of their claims as set forth on the list prepared by the debtor (within the two- or four-month time limit). Those financial creditors who did not take part in the conciliation proceedings (but who would be members of the financial institutions’ committee or the noteholders’ general meeting) will have to file their proofs of claim within the aforementioned legal time limits. Contractual provisions whereby a company’s payment obligations are accelerated upon the occurrence of the commencement of safeguard, AFS or judicial reorganization proceedings or insolvency (cessation des paiements) are not enforceable under French law. The commencement of liquidation proceedings, however, automatically accelerates the maturity of all of a company’s obligations unless the court ordered the continued operation of the business with a view to the adoption of a “disposal sale plan” (plan de cession) (for a period of 3 months, renewable once), in which case the acceleration of the obligations will only occur on the date of the court decision adopting the “disposal sale plan” or on the date on which the continued operation of the business ends. The administrator may elect to terminate ongoing contracts (contrats en cours) which the administrator believes the debtor will not be able to continue to perform. On the contrary, the administrator may require the continuation of such contracts, notwithstanding the existence of pre-commencement breaches, provided that the company fully performs its post- commencement contractual obligations. The court may also set a time period during which the assets that it deems necessary to the continuation of the business of the debtor may not be sold without its consent. If the court adopts a “disposal sale plan” (plan de cession) in judicial reorganization or liquidation proceedings with a temporary continuation of business, the proceeds from the sale will be allocated to the payment of creditors according to their ranking. French insolvency law provides for a priority order of payment among the following categories of creditors: employees, officials appointed by the insolvency court as required by the regulations relating to insolvency proceedings, creditors who, as part of an approved conciliation agreement, have provided new money or goods or services (see “New Money Lien” in “—Court-administered Proceedings—Safeguard Proceedings”), certain secured creditors in the event of judicial liquidation proceedings, post-petition creditors, the French State, other pre-petition secured creditors and pre-petition unsecured creditors. If the court decides to order the judicial liquidation of the company, the court will appoint a liquidator to sell the assets of the company and settle the relevant debts in accordance with their ranking. However, in practice, where a plan for the sale of the business is considered, it will usually appoint a judicial administrator to manage the company and organize such sale process.

Parallel Debt Under French law, certain “accessory” security interests such as pledges require that the pledgee and the creditor be the same person. Such security interests cannot be granted to third parties who do not hold the secured claim, unless they act as a fiduciary agent (fiduciaire) under Article 2011 of the French Civil Code. The Indenture will provide for the creation of a so- called “parallel debt.” Pursuant to the parallel debt mechanism, the Security Agent becomes the holder of a claim equal to each amount payable by an obligor under the Indenture. The security interests in the Collateral, which shall be governed by French law, will directly secure the parallel debt, and may not directly secure the obligations under the Notes. The French Supreme Court (Cour de cassation) held on September 13, 2011 (Cass. com. 13 September 2011 no 10-25533 Belvedere) in the context of safeguard proceedings opened in France, that, subject to certain conditions, the legal concept of parallel debt created under the laws of the State of New York was not incompatible with the French law concept of international public policy (ordre public international). However, this decision cannot be considered as a general recognition that the rights of a security agent under a parallel debt obligation are enforceable in France in all circumstances, nor any assurance can be given that such a structure will be upheld in all cases before the French courts. Should the security interests in the Collateral created under the parallel debt structure be successfully challenged, holders of the Notes will not receive any proceeds from an enforcement of the security interest in the Collateral.

Fraudulent Conveyance in France French law contains specific provisions dealing with fraudulent conveyance both during and outside insolvency proceedings, the so-called action paulienne. The action paulienne offers creditors some protection against actions that would adversely affect their chances of recovery. Any action (acte juridique) performed outside the suspect period by the debtor (including, without limitation, an agreement pursuant to which it agrees to provide or provides security for any of its or a third party’s obligations, enters into additional agreements benefiting from existing security and any other legal act having similar effect) may be challenged by any creditor, acting individually, whose chances of recovery were affected as a 240

consequence of such action, and may also be challenged during insolvency proceedings by the creditors’ representative (mandataire judiciaire), or the commissioner to the safeguard or recovery plan (commissaire à l’exécution du plan), appointed by the court to monitor the performance of the safeguard plan in accordance with the provisions of Article L.626- 25 of the French Commercial Code, acting in the general interest of all creditors. Even after the commencement of insolvency proceedings, creditors are able to act individually against the debtor’s contracting party, since the mandatory stay of individual actions only applies with respect to the debtor. However, creditors remain prohibited from receiving any payment outside the scope of the insolvency proceedings: if a creditor’s challenge is successful, it will only be entitled to have its individual claim admitted in the proceedings As a result of this challenge, any such action (acte juridique) may be declared unenforceable against third parties if: (i) it adversely affected the chances of recovery of the creditor bringing the challenge or (where the challenge is brought by the creditors’ representative) of all creditors (this could be the case for instance when the debtor performed actions without any obligation to do so); and (ii) at the time such action was performed both the debtor and the counterparty to the transaction knew or should have known that one or more of its creditors (existing or future) would be harmed by a decrease in its or their chances of recovery of their claims (where the action was performed for no consideration (à titre gratuit), no knowledge by the counterparty is required for a successful challenge). If a court finds that the issuance of the Notes or the grant of the security interests in the Collateral involved a fraudulent conveyance that did not qualify for any defense under applicable law, then the issuance of the Notes or the granting of the security interests in the Collateral could be declared unenforceable against third parties or against the creditor that filed the claim. As a result of such successful challenges, holders of the Notes may not enjoy the benefit of the Notes or the security interests in the Collateral and the value of any consideration that holders of the Notes received with respect to the Notes or the security interests in the Collateral could also be subject to recovery from the holders of the Notes and, possibly, from subsequent transferees. In addition, under such circumstances, holders of the Notes might be held liable for any damages incurred by prejudiced creditors of the Issuer as a result of the fraudulent conveyance.

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PLAN OF DISTRIBUTION Subject to the terms and conditions set forth in a purchase agreement (the “Purchase Agreement”) dated as of March 26, 2014, the Issuer has agreed to sell to each Initial Purchaser, and each Initial Purchaser has agreed, severally and not jointly, to purchase the Notes from the Issuer. The Purchase Agreement provides that the obligations of the Initial Purchasers to pay for and accept delivery of the Notes are subject to, among other conditions, the delivery of certain legal opinions by counsel. The Initial Purchasers propose to offer the Notes initially at the price indicated on the cover page hereof. After the initial offering of the Notes, the offering price and other selling terms of the Notes may from time to time be varied by the Initial Purchasers without notice. We have agreed to provide the Initial Purchasers certain customary fees or discounts for their services in connection with the Offering of the Notes and to reimburse them for certain out-of-pocket expenses. Persons who purchase Notes from the Initial Purchasers may be required to pay stamp duty, taxes and other charges in accordance with the laws and practice of the country of purchase in addition to the offering price set forth on the cover page hereof. The Purchase Agreement provides that we will indemnify and hold harmless the Initial Purchasers against certain liabilities, including liabilities under the U.S. Securities Act, and will contribute to payments that the Initial Purchasers may be required to make in respect thereof. We have agreed not to offer, sell, contract to sell or otherwise dispose of, except as provided under the Purchase Agreement, any debt securities of the Issuer or its subsidiaries or parent companies during the period from the date of the Purchase Agreement through and including the date 90 days after the date of the Purchase Agreement, without the prior written consent of Goldman Sachs International and Credit Suisse Securities (Europe) Limited, as representatives for the Initial Purchasers. The Notes have not been and will not be registered under the U.S. Securities Act and may not be offered or sold within the United States, except to “qualified institutional buyers” in accordance with Rule 144A and to non-U.S. persons outside of the United States in offshore transactions in reliance on Regulation S. Terms used in this paragraph have the meanings given to them by Rule 144A and Regulation S. Resales of the Notes are restricted as described under “Transfer Restrictions.” Each Initial Purchaser has represented that it (i) has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) received by it in connection with the issue or sale of any Notes in circumstances in which section 21(1) of the FSMA does not apply to the Issuer and (ii) has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Notes in, from or otherwise involving the United Kingdom. No action has been taken in any jurisdiction, including the United States, by us or the Initial Purchasers that would permit a public offering of the Notes or the possession, circulation or distribution of these Listing Particulars or any other material relating to us or the Notes in any jurisdiction where action for this purpose is required. Accordingly, the Notes may not be offered or sold, directly or indirectly, and neither these Listing Particulars nor any other offering material or advertisements in connection with the Notes may be distributed or published, in or from any country or jurisdiction, except in compliance with any applicable rules and regulations of any such country or jurisdiction. These Listing Particulars do not constitute an offer to sell or a solicitation of an offer to purchase in any jurisdiction where such offer or solicitation would be unlawful. Persons into whose possession these Listing Particulars come are advised to inform themselves about and to observe any restrictions relating to the offering of the Notes, the distribution of these Listing Particulars and resale of the Notes. See “Notice to Investors” and “Transfer Restrictions.” The Notes are a new issue of securities for which there currently is no market. The Irish Stock Exchange has approved this document as Listing Particulars for purposes of the Notes being listed on the Official List of the Irish Stock Exchange and to be admitted for trading on its Global Exchange Market. However, we cannot assure you that the Notes will be maintained. The Initial Purchasers have advised us that they intend to make a market in the Notes as permitted by applicable law after completing the Offering of the Notes. The Initial Purchasers are not obligated, however, to make a market in the Notes, and any market-making activity may be discontinued at any time at the sole discretion of the Initial Purchasers without notice. In addition, any such market-making activity will be subject to the limits imposed by the U.S. Securities Act and the U.S. Exchange Act. Accordingly, we cannot assure you that any market for the Notes will develop, that it will be liquid if it

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does develop, or that you will be able to sell any Notes at a particular time or at a price which will be favorable to you. See “Risk Factors—Risks Related to Our Indebtedness and the Notes.” The Initial Purchasers may engage in over-allotment, stabilizing transactions, covering transactions and penalty bids in accordance with Regulation M under the U.S. Exchange Act. Over-allotment involves sales in excess of the offering size, which creates a short position for the relevant Initial Purchasers. Stabilizing transactions permit bidders to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. Covering transactions involve purchase of the Notes in the open market after the distribution has been completed in order to cover short positions. Penalty bids permit the Initial Purchasers to reclaim a selling concession from a broker or dealer when the Notes originally sold by that broker or dealer are purchased in a stabilizing or covering transaction to cover short positions. In connection with the Offering of the Notes, the Stabilizing Manager, or persons acting on its behalf, may engage in transactions that stabilize, maintain or otherwise affect the price of the Notes. Specifically, the Stabilizing Manager, or persons acting on its behalf, may bid for and purchase Notes in the open markets to stabilize the price of the Notes. The Stabilizing Manager, or persons acting on its behalf, may also over allot the Offering of the Notes creating a syndicate short position, and may bid for and purchase Notes in the open market to cover the syndicate short position. In addition, the Stabilizing Manager, or persons acting on its behalf, may bid for and purchase Notes in market making transactions as permitted by applicable laws and regulations and impose penalty bids. These activities may stabilize or maintain the respective market price of the Notes above market levels that may otherwise prevail. The Stabilizing Manager is not required to engage in these activities, and may end these activities at any time. Accordingly, no assurance can be given as to the liquidity of, or trading markets for, the Notes. See “Risk Factors—Risks Related to Our Indebtedness and the Notes.” These stabilizing transactions and covering transactions may cause the price of the Notes to be higher than it would otherwise be in the absence of these transactions. These transactions may begin on or after the date on which adequate public disclosure of the terms of the Offering of the Notes is made and, if commenced, may be discontinued at any time at the sole discretion of the Stabilizing Manager. If these activities are commenced, they must end no later than the earlier of 30 days after the Issue Date of the Notes and 60 days after the date of the allotment of the Notes. These transactions may be effected in the over-the-counter market or otherwise. The Initial Purchasers and their affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial investment banking, financial advising, investment management, principal investment, hedging, financing and brokerage activities. The Initial Purchasers or their respective affiliates from time to time have provided in the past and may provide in the future investment banking, financial advisory and commercial banking services to the Issuer and its affiliates in the ordinary course of business for which they have received or may receive customary fees and commissions. The Initial Purchasers and their affiliates may receive allocations of the Notes.

Other relationships The Initial Purchasers and their affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial investment banking, financial advising, investment management, principal investment, hedging, financing and brokerage activities. They may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. The Initial Purchasers or their respective affiliates from time to time have provided in the past and may provide in the future investment banking, financial advisory, commercial and general corporate banking services to the Issuer and its affiliates in the ordinary course of business for which they have received or may receive customary fees. A portion of the proceeds from the Offering will be used to repay in full outstanding indebtedness under our Existing FG8 Senior Facilities. CA-CIB is a lender, arranger, bookrunner, agent and security agent, and Natixis is a lender, in connection with the Existing Senior Facilities Agreement, and in their capacities as lenders thereunder they each will receive a portion of the proceeds of the Offering. In its capacity as agent and security agent under the Existing Senior Facilities Agreement, CA-CIB is entitled to customary fees in connection with the repayment in full of outstanding indebtedness under the Existing FG8 Senior Facilities. Additionally, certain of the proceeds from the issuance of the Notes will be used to repurchase a portion of the Issuer’s preference shares from CA-CIB. Following the Offering and the application of the gross proceeds therefrom, CA-CIB will hold all of the remaining preference shares of the Issuer. In addition, each of the Initial Purchasers or their affiliates is expected to act as an arranger and lender under the New Senior Facilities Agreement. Furthermore, a nominee of CACEIS, an affiliate of CA-CIB, holds 2.01% of the Company’s ordinary shares.

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The Initial Purchasers and their respective affiliates may purchase the Notes for their own account and be allocated Notes.

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LEGAL MATTERS Certain legal matters in connection with the Offering will be passed upon for us by Cravath, Swaine & Moore LLP as to matters of U.S. federal and New York law and Gide Loyrette Nouel AARPI as to matters of French law. Certain legal matters in connection with the Offering will be passed upon for the Initial Purchasers by Latham & Watkins (London) LLP as to matters of U.S. federal and New York law and Latham & Watkins AARPI as to matters of French law.

STATUTORY AUDITORS The consolidated financial statements of the Issuer as of and for the financial years ended November 30, 2011, 2012 and 2013 have been audited by Ernst & Young et Autres, statutory auditors, as stated in their respective reports. Ernst & Young et Autres are members of the Compagnie Régionale des Commissaires aux Comptes de Versailles.

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SERVICE OF PROCESS AND ENFORCEMENT OF CIVIL LIABILITIES The Issuer and the Company are organized and established under the laws of France. The security documents relating to the Collateral will be governed by the laws of France. The Indenture and the Notes will be governed by New York law. All of the directors and executive officers of the Issuer are non-residents of the United States. Since the assets of the Issuer and their respective directors and executive officers, are located outside the United States, any judgment obtained in the United States against the Issuer or any such other person, including judgments with respect to the payment of principal, premium (if any) and interest on the Notes or any judgment of a U.S. court predicated upon civil liabilities under U.S. federal or state securities laws, may not be collectible in the United States. As a result, although the Issuer will appoint an agent for service of process in the United States and will submit to the jurisdiction of New York courts, in each case, in connection with any action in relation to the Notes and the Indenture or under U.S. securities laws, it may be difficult for investors to effect service of process on us or such other persons as mentioned above within the United States in any action, including actions predicated upon the civil liability provisions of U.S. federal or state securities laws. Moreover, certain provisions of laws or of regulations may limit the possibility to enforce judicial measures rendered against the Issuer in France and elsewhere on certain of its assets. If a judgment is obtained in a U.S. court against the Issuer, investors will need to enforce such judgment in France. Even though the enforceability of U.S. court judgments in France is described below, you should consult with your own advisors as needed to enforce a judgment in France or elsewhere in the United States.

France The United States and France are not parties to a treaty providing for reciprocal recognition and enforcement of judgments, other than arbitral awards, rendered in civil and commercial matters. Accordingly, a judgment rendered by any U.S. federal or state court based on civil liability, whether or not predicated solely upon U.S. federal or state securities laws, enforceable in the United States, would not directly be recognized or enforceable in France. A party in whose favor such judgment was rendered could initiate enforcement proceedings (exequatur) in France before the relevant civil court (Tribunal de Grande Instance). Enforcement in France of such U.S. judgment could be obtained following proper (i.e., non ex parte) proceedings if the competent French court is satisfied that the following conditions have been met (which conditions, under prevailing French case law, do not include a review by the French courts of the merits of the foreign judgment): • such U.S. judgment was rendered by a court having jurisdiction over the matter in accordance with French rules of international conflicts of jurisdiction (including, without limitation, whether the dispute is clearly connected to the United States and the choice of the U.S. court was not fraudulent) and the French courts did not have exclusive jurisdiction over the matter; • such U.S. judgment does not contravene French international public policy rules, both pertaining to the merits and to the procedure of the case, including defense rights; • such U.S. judgment is not tainted with fraud under French law; • such U.S. judgment does not conflict with a French judgment or a foreign judgment that has become effective in France, and there are no proceedings pending before French courts at the time enforcement of the judgment is sought and having the same or similar subject matter as such U.S. judgment; and • such U.S. judgment must be enforceable in the U.S. and, in certain circumstances, final. Under French law, a judgment is deemed to be final where it is not subject to appeal or to a motion to vacate. In addition, the discovery process under actions filed in the United States could be adversely affected under certain circumstances by French criminal law No. 68-678 of July 26, 1968, as modified by French law No. 80-538 of July 16, 1980 and French Ordinance No. 2000-916 of September 19, 2000 (relating to the communication of documents and information of an economic, commercial, industrial, financial or technical nature to foreign authorities or persons), which could prohibit or restrict obtaining evidence in France or from French persons in connection with a U.S. judicial or administrative action. Pursuant to the regulations above, the U.S. authorities would have to comply with international (the 1970 Hague Convention on the Taking of Evidence Abroad) or French procedural rules to obtain evidence in France or from French persons.

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Similarly, French data protection rules (law No. 78-17 of January 6, 1978 on data processing, data files and individual liberties, as most recently modified by French Ordinance No. 2011-1012 of August 24, 2011) can limit, under certain circumstances, the possibility of obtaining information in France or from French persons in connection with a judicial or administrative U.S. action in a discovery context. Furthermore, if an original action is brought in France, French courts may refuse to apply foreign law designated by the applicable French rule of conflict (including the law chosen by the parties to govern their contract) if the application of such law (in the case at hand) is deemed to contravene French international public policy (as determined on a case-by-case basis by French courts). Furthermore, in an action brought in France on the basis of U.S. federal or state securities laws, French courts may not have the requisite power to grant all the remedies sought. Pursuant to Articles 14 and 15 of the French Civil Code, a French national (either a company or an individual) can sue a foreign defendant before French courts in connection with the performance of obligations contracted by the foreign defendant in France with a French person or in a foreign country with French persons (Article 14) and can be sued by a foreign claimant before French courts in connection with the performance of obligations contracted by the French national in a foreign country with the foreign claimant (Article 15). For a long time, case law has interpreted these provisions as meaning that a French national, either claimant or defendant, could not be forced against its will to appear before a jurisdiction other than French courts. However, according to recent case law, the French courts’ jurisdiction over French nationals is no longer mandatory to the extent an action has been commenced before a court in a jurisdiction that has sufficient contacts with the litigation and the choice of jurisdiction is not fraudulent. In addition, French nationals may waive their rights to benefit from the provisions of Articles 14 and 15 of the French Civil Code, including by way of conduct by voluntarily appearing before the foreign court. The French Supreme Court (Cour de cassation) has recently held that a contractual provision submitting one party to the exclusive jurisdiction of a court and giving another party the discretionary option to choose any competent jurisdiction was invalid on the ground that it was discretionary (potestative). Accordingly, any provisions to the same effect in any relevant documents would not be binding on the party submitted to the exclusive jurisdiction of the court or prevent a French party from bringing an action before the French courts.

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LISTING AND GENERAL INFORMATION Listing on the Irish Stock Exchange (a) The address of the Issuer is 232, rue de Rivoli, 75001 Paris, France, and its telephone number is +33 (0) 1 43 16 63 00. The Issuer was incorporated in France on April 30, 2007, as a société anonyme under the laws of France and is registered under number 497 658 377 with the Paris Trade and Companies Register. (b) The Irish Stock Exchange has approved this document for purposes of the Notes being listed on the Official List of the Irish Stock Exchange and traded on the Irish Stock Exchange’s Global Exchange Market. (c) So long as the Notes are listed on the Official List of the Irish Stock Exchange and are traded on the Irish Stock Exchange’s Global Exchange Market and the rules of such exchange shall so require, physical copies of the following documents may be inspected and obtained free of charge at the registered office of the paying agent during normal business hours on any business day: • the organizational documents of the Issuer; • the financial statements included in these Listing Particulars; • the annual and interim financial statements required to be provided under “Description of the Notes— Certain Covenants—Reports;” and • the Indenture governing the Notes (which include the form of the Notes). (d) The Issuer accepts responsibility for the information contained in these Listing Particulars. The Issuer declares that, having taken all reasonable care to ensure that such is the case, the information contained in these Listing Particulars is, to the best of its knowledge, in accordance with the facts and does not omit anything likely to affect the import of these Listing Particulars. (e) Senior management is directly responsible for the internal control system of the Company. It defines internal control policies and supervises the implementation of all components. In this area, it ensures that all establishments and subsidiaries of the Company are equipped with effective control mechanisms. The Chief Finance Officer is more specifically responsible for overseeing and maintaining internal control measures governing accounting and financial information. The internal control process includes a risk management system that lists and analyzes the major identifiable risks to the Company’s objectives and ensures that measures are in place to manage those risks. One of the objectives of the internal control system is to prevent and control risks resulting from the Company’s activities as well as risks of error or fraud, in particular in the financial and accounting areas. As with any control system, however, it cannot provide an absolute guarantee that such risks have been totally eliminated, and it seeks to obtain reasonable assurance that the objective of the internal control system will be attained. (f) Except as disclosed elsewhere in these Listing Particulars, there has been no significant change in the financial or trading position of the Group since November 30, 2013 (being the last day of the period in respect of which we published our latest annual audited consolidated financial statements). (g) The business address of the directors of the Issuer is 232, rue de Rivoli, 75001 Paris, France. We have appointed The Bank of New York Mellon SA/NV as listing agent. Its registered address is 4th Floor, Hanover Building, Windmill Lane, Dublin 2, Ireland.

Prescription Claims against the Issuer for the payment of principal or additional amounts, if any, on the Notes will be prescribed ten years after the applicable due date for payment thereof. Claims against the Issuer for the payment of interest on the Notes will be prescribed five years after the applicable due date for payment of interest.

Clearing Information The Notes have been, or will be, accepted for clearance through the facilities of Euroclear and Clearstream. Certain trading information with respect to the Notes is set forth below.

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Common ISIN Codes

Rule 144A Note ...... XS1050202362 105020236 Regulation S Note ...... XS1050202446 105020244

Resolutions, Authorizations and Approvals by Virtue of Which the Notes Have Been Issued We have obtained, or will obtain, all necessary consents, approvals and authorizations in the jurisdiction of our incorporation in connection with the issuance and performance of the Notes. The creation and issuance of the Notes were authorized by the board of directors of the Issuer on March 19, 2014 and by a decision of the Chairman and Chief Executive Officer of the Issuer on March 26, 2014.

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INDEX TO FINANCIAL STATEMENTS

Page

English translation of audited consolidated financial statements of the Issuer as of and for the years ended November 30, 2013 Report of the statutory auditors ...... F-2 Statement of consolidated comprehensive income ...... F-5 Statement of other items of comprehensive income ...... F-6 Statement of consolidated financial position ...... F-7 Statement of cash flows ...... F-8 Statement of changes in shareholders’ equity ...... F-9 Notes to the consolidated financial statements ...... F-11

English translation of audited consolidated financial statements of the Issuer as of and for the years ended November 30, 2012 Report of the statutory auditors ...... F-55 Statement of consolidated comprehensive income ...... F-58 Statement of other items of comprehensive income ...... F-59 Statement of consolidated financial position ...... F-60 Statement of cash flows ...... F-61 Statement of changes in shareholders’ equity ...... F-62 Notes to the consolidated financial statements ...... F-64

English translation of audited consolidated financial statements of the Issuer as of and for the years ended November 30, 2011 Report of the statutory auditors ...... F-103 Statement of consolidated comprehensive income ...... F-106 Statement of other items of comprehensive income ...... F-107 Statement of consolidated financial position ...... F-108 Statement of cash flows ...... F-109 Statement of changes in shareholders’ equity ...... F-110 Notes to the consolidated financial statements ...... F-111

F-1

This is a free translation into English of the statutory auditors’ report on the consolidated financial statements issued in French and it is provided solely for the convenience of English-speaking users. The statutory auditors’ report includes information specifically required by French law in such reports, whether modified or not. This information is presented below the audit opinion on the consolidated financial statements and includes an explanatory paragraph discussing the auditors’ assessments of certain significant accounting and auditing matters. These assessments were considered for the purpose of issuing an audit opinion on the consolidated financial statements taken as a whole and not to provide separate assurance on individual account balances, transactions or disclosures. This report also includes information relating to the specific verification of information given in the group’s management report. This report should be read in conjunction with and construed in accordance with French law and professional auditing standards applicable in France.

Financière Gaillon 8 Year ended November 30, 2013

Statutory auditors’ report on the consolidated financial statements

ERNST & YOUNG et Autres

F-2

Financière Gaillon 8 Year ended November 30, 2013

Statutory auditors’ report on the consolidated financial statements

To the Shareholders, In compliance with the assignment entrusted to us by the shareholders meeting, we hereby report to you, for the year ended November 30, 2013, on: • the audit of the accompanying consolidated financial statements of Financière Gaillon 8; • the justification of our assessments; • the specific verification required by law. These consolidated financial statements have been approved by the board of directors. Our role is to express an opinion on these consolidated financial statements based on our audit.

I. Opinion on the consolidated financial statements We conducted our audit in accordance with professional standards applicable in France; those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit involves performing procedures, using sampling techniques or other methods of selection, to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made, as well as the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. In our opinion, the consolidated financial statements give a true and fair view of the assets and liabilities and of the financial position of the Group as at November 30, 2013 and of the results of its operations for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union.

II. Justification of our assessments In accordance with the requirements of article L. 823-9 of the French commercial code (Code de commerce) relating to the justification of our assessments, we bring to your attention the following matters: • your company recognizes revenues and margins on sales before completion (VEFA) in accordance with the accountings method described in note 1.20 to the consolidated Financial Statements. The revenue and margin recognized arte therefore contingent on the estimates at completion made by the Company. Our works consisted in examining the reasonableness of the assumptions on which these estimates are based and reviewing the calculations performed by the Company; • at the end of each reporting period your Company performs an impairment test on goodwill and the Kaufman & Broad brand name according to the method described in note 1.8 to the consolidated financial statements. We have examined the procedures for this impairment test as well as the assumptions used by the Company and we have verified that note 14 to the consolidated financial statements provides an appropriate disclosure. These assessments were made as part of our audit of the consolidated financial statements taken as a whole, and therefore contributed to the opinion we formed which is expressed in the first part of this report.

III. Specific verification As required by law we have also verified in accordance with professional standards applicable in France the information presented in the Group’s management report.

We have no matters to report as to its fair presentation and its consistency with the consolidated financial statements.

Paris-La Défense, February 28, 2014 F-3

The statutory auditors ERNST & YOUNG et Autres French original signed by

Gilles Cohen

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FINANCIÈRE GAILLON 8 SA STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME

(in € thousands) Note November 30, 2013 November 30, 2012

Revenues ...... 4 1,025,954 1,030,046 Cost of sales ...... -830,011 -830,896

Gross margin ...... 195,943 199,150

Selling expenses...... 5 -30,619 -29,242 General and administrative expenses ...... 6 -65,192 -63,092 Technical and customer service expenses ...... 7 -18,052 -16,301 Other expenses ...... 8 -10,180 -9,326 Other income ...... 8 3,170 951

Current operating profit ...... 75,070 82,140

Other non-recurring income ...... 9 5 1,538 Other non-recurring expenses ...... 9 -6 -10

Operating income ...... 75,069 83,668

Financial expenses ...... -27,620 -30,831 Financial income ...... 773 1,799

Cost of net financial debt ...... 10 -26,848 -29,032

Other interest expense ...... 11 -1,699 Other financial income...... 11 14,330

Pre-tax income of consolidated companies ...... 48,222 67,267

Income tax (expenses)/income ...... 12 -21,675 -24,787

Net Income of consolidated companies ...... 26,546 42,480

Share of income (loss) of equity affiliates and joint ventures ...... 642 -61

Income/loss from assets held for sale ......

Income (loss) attributable to shareholders ...... 27,188 42,419

Minority interests ...... 21.4 14,838 13,571 Income attributable to shareholders ...... 12,350 28,848

Number of shares ...... 13 1,366,109,921 1,366,109,921

Earnings per share ...... 13 0.009 0.021

Diluted earnings per share ...... 13 0.009 0.021

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STATEMENT OF OTHER ITEMS OF COMPREHENSIVE INCOME

(in € thousands) November 30, 2013 November 30, 2012

Income (loss) attributable to shareholders ...... 27,188 42,419 Change in gross value of derivative instruments ...... 91 2,271 Tax impact on derivative instruments ...... -31 -785

Gains and losses recognized directly in shareholders’ equity recyclable through income ...... 60 1,486

Change in actuarial gains and losses ...... -958 -1,579 Tax effect on actuarial gains and losses ...... 335 543

Total gains and losses recognized directly in equity not recyclable as income ...... -623 -1,036

Consolidated net comprehensive income ...... 26,625 42,869

Attributable ...... 11,796 29,255

Minority interests ...... 14,829 13,614

For fiscal year 2013, the change in fair value of derivative instruments includes derivatives set up as of November 30, 2012 by Kaufman and Broad SA which totaled €0.1 million. For fiscal year 2012, the change in fair value of derivative instruments includes derivatives set up as of November 30, 2010 by Kaufman and Broad SA which totaled €2.3 million.

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STATEMENT OF CONSOLIDATED FINANCIAL POSITION

(in € thousands) Note November 30, 2013 November 30, 2012

Goodwill ...... 14 144,370 144,370 Intangible assets ...... 15.1 85,240 84,761 Property, plant and equipment ...... 15.2 4,713 5,604 Equity affiliates and joint ventures ...... 16 8,181 4,373 Other non-current assets ...... 18 2,520 2,520 Other non-current financial assets ...... 16 20,139 1,262

Non-current assets ...... 265,163 242,890

Inventories ...... 17 325,466 285,798 Accounts receivable ...... 18 291,778 268,189 Other receivables ...... 18 136,809 143,147 Other financial receivables ...... 18 0 2,379 Current tax ...... 19 16,611 34,601 Cash and cash equivalents ...... 20 190,321 155,787 Prepaid expenses ...... 18 880 1,021

Current assets...... 961,864 890,922

TOTAL ASSETS ...... 1,227,027 1,133,812

(in € thousands) Note November 30, 2013 November 30, 2012

Capital stock ...... 21 37 37 Attributable reserves ...... -91,806 -117,704 Other reserves ...... -11,844 -10,728 Blocked current accounts ...... 24 4,900 4,900 Attributable consolidated net income ...... 12,350 28,848

Attributable shareholders’ equity ...... -86,363 -94,647

Minority interests ...... 21.4 27,240 21,687

Shareholders’ equity ...... -59,123 -72,960

Non-current provisions ...... 22 33,436 24,535 Borrowings and other non-current financial liabilities ...... 23 530,840 522,302 Other non-current liabilities ...... 25 15,286 15,286 Deferred taxes ...... 19 40,538 56,042

Non-current liabilities ...... 620,100 618,165

Current provisions ...... 1,724 1,000 Other current financial liabilities ...... 25 19,926 504 Accounts payable ...... 25 550,314 473,690 Other payables ...... 25 92,869 111,797 Deferred income ...... 25 1,217 1,616

Current liabilities ...... 666,050 588,607

TOTAL EQUITY AND LIABILITIES ...... 1,227,027 1,133,812

F-7

STATEMENT OF CASH FLOWS

November 30, November 30, (in € thousands) Note 2013 2012

Current operating activities Consolidated net income ...... 27,188 42,420 Share of net income of equity affiliates and joint ventures ...... 16.1 -642 61 Income from assets held for sale ...... 16.1 Estimated income and expenses...... 12,865 12,441 Cash flow after cost of financial debt and tax ...... 39,411 54,922 Cost of financial debt ...... 10 26,440 29,031 Other interest expenses (income) ...... 11 0 -12,631 Tax liability (income) ...... 12 22,245 24,787 Cash flow before cost of financial debt and tax ...... 88,096 96,109 Tax (paid)/received ...... 131 -2,057 Change in operating working capital requirements ...... 26 -10,672 61,726

Cash-flow from operating activities (A) ...... 77,555 155,778

Investing activities Acquisition of tangible and intangible assets (net of disposals) ...... -1,907 -3,960 Acquisition of financial assets (net of disposals)(a)...... -16,387 10,622 Cash flow with equity affiliates and joint ventures ...... 16.1 -3,145 -517 Change in the scope of consolidation ...... -11

Cash-flow from investing activities (B) ...... -21,450 6,145

Free cash-flow ...... 56,105 161,923

Financing activities Distributions to minority shareholders ...... -9,468 -13,975 Minority interest buybacks ...... -2,058 -1,828 Buyback of treasury shares, net of resales ...... -1,228 -6,392 Decrease in quasi-equity ...... Change in other financial assets ...... Loan repayments ...... -45 -125,124 Net financial interests paid ...... -8,773 77

Cash-flow from financing activities (C) ...... -21,572 -147,242

Increase (decrease) in cash (A + B + C) ...... 34,533 14,681

Cash and cash equivalents at the beginning of the period ...... 155,787 141,106

Cash and cash equivalents at the end of the period ...... 190,321 155,787

Increase (decrease) in cash ...... 34,534 14,681

Cash and cash equivalents ...... 20 190,321 155,787 Credit facilities...... 23.1 -512 -454 Interest accrued on cash and cash equivalents ...... 23.1 512 454

Cash and cash equivalents at the end of the period ...... 190,321 155,787

(a) Funds segregated in relation to a Kaufman & Broad program (see Note 27.3)

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STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

Number Reserves Blocked- Total of shares related to Attributable Other current Attributable Attributable Minority shareholders’ (in € thousands) outstanding Capital capital reserves reserves accounts income equity interests equity

December 1,

2011 ...... 1,366,109,921 37 -128,444 -7,876 4,900 11,645 -119,737 24,987 -94,750

Allocation of

profit or loss .. 11,645 -11,645 0 0 Actuarial gains

(losses) ...... -939 -939 -97 -1,036 Change in hedging

reserves ...... 1,347 1,347 140 1,487

Other transactions 0 0

Total expenses and income recognized directly in

equity ...... 408 408 43 451

Net income at Nov. 30,

2012 ...... 28,848 28,848 13,571 42,419

Total expenses and income for the

period ...... 408 28,848 29,256 13,614 42,870

Change in scope ... 570 1,888 2,458 -2,458 0 Liquidity

commitment ... 0 0 Share-based

payments ...... -5,149 -5,149 -536 -5,685 Treasury share

transactions .... 0 0 Buyback of minority

interests ...... -1,475 -1,475 -154 -1,629

Distributions ...... 0 -13,766 -13,766 Increase/(decreas

e) in capital .... 0 0

November 30, 2012 ...... 1,366,109,921 37 0 -117,704 -10,728 4,901 28,848 -94,647 21,687 -72,960

Allocation of

profit or loss .. 28,848 -28,848 0 Actuarial gains

(losses) ...... -564 -564 -59 -623 Change in hedging

reserves ...... 54 54 6 60

Other transactions 0 0

Total expenses and income recognized directly in

equity ...... -510 0 -510 -53 -563

Net income at Nov. 30,

2013 ...... 12,350 12,350 14,838 27,188

Total expenses and income for the

period ...... 0 0 0 -510 12,350 11,840 14,785 26,625

Change in scope ... 237 237 -237 0 Liquidity

commitment ... -586 -586 -586 Share-based

payments ...... -608 -608 -62 -670 Treasury share

transactions .... 0 0 F-9

Buyback of minority

interests ...... -1,994 -1,994 -203 -2,197

Other transactions -607 -607 -65 -672

Distributions ...... -8,665 -8,665 Increase/(decreas

e) in capital ....

November 30,

2013 ...... 37 0 -91,806 -11,846 4,901 12,350 -86,365 27,240 -59,123

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SIGNIFICANT EVENTS OF THE PERIOD

GENERAL INFORMATION

NOTE 1 ACCOUNTING METHODS AND PRINCIPAL VALUATION ASSUMPTIONS F-11 NOTE 2 SCOPE OF CONSOLIDATION F-20 NOTE 3 SEGMENT REPORTING F-20

STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME

NOTE 4 REVENUES F-21 NOTE 5 SELLING EXPENSES F-21 NOTE 6 GENERAL AND ADMINISTRATIVE EXPENSES F-21 NOTE 7 TECHNICAL EXPENSES AND CUSTOMER SERVICE F-22 NOTE 8 OTHER INCOME AND EXPENSES F-22 NOTE 9 OTHER NON-CURRENT EXPENSES AND INCOME F-22 NOTE 10 COST OF NET FINANCIAL DEBT AND OTHER FINANCIAL INCOME AND EXPENSES F-23 NOTE 11 OTHER FINANCIAL EXPENSES F-23 NOTE 12 TAX LIABILITY F-24 NOTE 13 NET EARNINGS AND DILUTED EARNINGS PER SHARE F-25

STATEMENT OF CONSOLIDATED FINANCIAL POSITION—ASSETS—

NOTE 14 GOODWILL F-25 NOTE 15 PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE FIXED ASSETS F-25 NOTE 16 NON-CURRENT FINANCIAL ASSETS F-26 NOTE 17 INVENTORIES F-27 NOTE 18 ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES F-28 NOTE 19 CURRENT AND DEFERRED TAXES F-29 NOTE 20 CASH AND CASH EQUIVALENTS F-30

STATEMENT OF CONSOLIDATED FINANCIAL POSITION—LIABILITIES—

NOTE 21 EQUITY F-30 NOTE 22 PROVISIONS F-32 NOTE 23 FINANCIAL DEBT F-34 NOTE 24 BLOCKED CURRENT ACCOUNTS F-36 NOTE 25 CURRENT LIABILITIES F-36

ADDITIONAL INFORMATION

NOTE 26 NOTES TO THE STATEMENT OF CASH FLOWS F-37 NOTE 27 OFF-BALANCE SHEET COMMITMENTS F-37 NOTE 28 EXPOSURE TO MARKET RISKS AND FINANCIAL INSTRUMENTS F-40 NOTE 29 RELATED PARTY TRANSACTIONS F-43 NOTE 30 POST-CLOSING EVENTS F-48 NOTE 31 INFORMATION ABOUT THE KAUFMAN & BROAD GROUP F-49

F-11

SIGNIFICANT EVENTS OF THE PERIOD Fiscal year highlights for the Kaufman & Broad group Acquisition of Flandres Promotion Kaufman & Broad SA, a subsidiary of Financière Gaillon 8, agreed to acquire the regional development company Flandres Promotion on May 29, 2013 for an estimated price of €0.6 million, of which €0.4 million will be paid at the signing of agreements. This acquisition enables the group to boost its presence on the Nord Flandres region with a property portfolio of about 80 lots through four programs under management at the acquisition date.

Buyback of minority interests The group repurchased several minority interests over the fiscal year, including five programs in Île-de-France, for a total investment of €2.2 million, under satisfactory conditions of profitability. In accordance with IAS27R, the impact of these transactions was recognized in shareholders’ equity.

General information NOTE 1—ACCOUNTING METHODS AND PRINCIPAL VALUATION ASSUMPTIONS 1.1 Information about the company The company was created at the end of April 2007 and its fiscal year ends on November 30. The consolidated financial statements as of November 30, 2013 reflect the operations of Financière Gaillon 8 (“FG8”) and of Kaufman & Broad SA and its subsidiaries (“the Kaufman & Broad group”) over the 12-month period from December 1, 2012 to November 30, 2013. The registered offices of the company are located at 232 rue de Rivoli 75001 Paris (France).

1.2 Basis for the Preparation of the Financial Statements Since Financière Gaillon 8 is only a holding company, its financial statements are primarily comprised of the consolidated financial statements of the Kaufman & Broad group. Accordingly, Financière Gaillon 8 applies the same accounting methods and valuation estimates as those used by Kaufman & Broad. The only material items not resulting from the consolidated financial statements of Kaufman & Broad are the allocation of the acquisition price of Kaufman & Broad, the debt directly underwritten by FG 8 and the liquidity commitment that was granted in 2008 to certain Kaufman & Broad employees for the bonus shares granted by Kaufman & Broad. Accordingly, the Financière Gaillon 8 consolidated financial statements were prepared in compliance with IFRS (International Financial Reporting Standards) and IFRIC (International Financial Reporting Interpretations Committee) interpretations as adopted by the European Union as of November 30, 2013 and available on the European Commission website: http://ec.europa.eu/internal_market/accounting/ias_en.htm.) The accounting methods described below have been continuously applied to all the periods presented in the consolidated financial statements, after taking into account, or with the exception of, the new standards and interpretations described below. The consolidated financial statements and the accompanying notes are denominated in euros. The consolidated annual financial statements as of November 30, 2013 and the notes pertaining thereto were approved by the Board of Directors at its meeting of February 26, 2014.

1.2.1. Standards and interpretations Standards, interpretations and amendments which must be applied to the fiscal year beginning on December 1, 2012 No new standard or interpretation whose application is mandatory for the fiscal year beginning on December 1, 2010 had any impact on the Financière Gaillon 8 group’s financial statements.

These standards are as follows:

F-12

Mandatory application date for annual periods beginning Standards on or after

Amendment to IAS 1—Presentation of items of other income and expenses recognized directly in equity ...... July 1, 2012

Date of application to periods beginning Standards on or after IFRS 9—Financial Instruments: Classification and measurement and amendments(a) ...... January 1, 2015 IFRS 10—Consolidated Financial Statements and amendments(b) ...... January 1, 2013 IFRS 11—Joint Arrangements and amendments(b) ...... January 1, 2013 IFRS 12—Disclosure of Interests in Other Entities and amendments(b) ...... January 1, 2013 IFRS 13—Fair Value Measurement ...... January 1, 2013 IAS 28 revised—Investments in Associates and Joint Ventures ...... January 1, 2013 IAS 19 revised—Employee Benefits ...... January 1, 2013 Amendment to IAS 12—Deferred Tax: Recovery of Underlying Assets ...... January 1, 2013 Amendment to IAS 32—Offsetting Financial Assets and Financial Liabilities ...... January 1, 2014 Amendment to IFRS 7—Disclosures : offsetting of financial assets and financial liabilities January 1, 2013 Amendments to IFRS 1: public subsidies ...... January 1, 2013 Improvements to IFRS 2012: Annual Improvements to various standards (published in the IASB on May 17, 2012) ...... January 1, 2013 IAS 27—Separate Financial Statements ...... January 1, 2014 IAS 36—Disclosure of the recoverable value of assets ...... January 1, 2014

(a) This standard issued by the IASB has not yet been approved by the European Union. (b) The date of application planned by the European Union is January 1, 2014, with the possibility of early application at January 1, 2013. Financière Gaillon 8 group has not adopted any of these new standards or interpretations early and does not anticipate any significant impact on its financial statements in their application to the extent that the application of the proportional consolidation method was discontinued with the transition to IFRS.

USE OF ESTIMATES AND ASSUMPTIONS In order to prepare the group’s financial statements, the management of Financière Gaillon 8 is required to make estimates and assumptions for items in the financial statements which cannot be accurately measured. These estimates and assumptions are made based on past experience and from the expected changes in the markets in which the group operates, or other factors deemed reasonable considering the circumstances. These assessments have an effect on the amounts of the income and expenses and on the book value of the assets and liabilities. The estimates and assumptions primarily concern: • earnings forecasts for the real estate programs used to recognize percentage-of-completion transactions (Notes 1.9 and 4); • the business plans used for the performance of impairment tests on goodwill and other intangible assets. • the recoverability of tax assets.

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Selling price and take-up rate assumptions based on the earnings forecast for real-estate developments and actual budget results for the medium-term provisional budgets used for such purposes could be impacted by the economic environment and regulatory changes, particularly government tax incentives.

1.3 OPTIONS AVAILABLE UNDER THE ACCOUNTING STANDARDS AND USED BY FINANCIÈRE GAILLON 8 Certain IASB standards provide for options with regard to the measurement and recognition of assets and liabilities. Accordingly, the group has opted to: • use the valuation method on the basis of the historical amortized cost of tangible and intangible fixed assets. The group decided not to revalue its tangible and intangible assets on each closing date (IAS 16 “Property, Plant and Equipment” and IAS 38 “Intangible Assets”); • apply the option provided in the amendment to IAS 19 “Employee benefits” to recognize all actuarial gains and losses on defined-benefit plans in the balance sheet through equity, net of deferred taxes; • apply the option provided for by IAS 31 Section 38 to consolidate companies held under joint control using the equity method. Consolidation based on the financial statements as of November 30 includes almost all the companies included in the consolidation. A few equity affiliates have a different balance sheet date and are consolidated on the basis of interim financial statements as of November 30, corresponding to 12 months of operations, as their contribution is immaterial.

1.4 CONSOLIDATION METHODS Kaufman & Broad and its subsidiaries are fully consolidated, with the exception of Kaufman & Broad subsidiaries jointly controlled or over which the group exercises significant influence, which are consolidated using the equity method.

1.5 BUSINESS COMBINATIONS AND GOODWILL IFRS 3R is applied on a forward-looking basis to new business combinations as from December 1, 2009. At the time of acquisition of control and the assets, liabilities and any identifiable contingent liabilities of the entity acquired that meet the criteria for recognition under IFRS are generally recognized at their fair value determined on the acquisition date. For partial acquisitions, minority interests may either be recognized at their share of the fair value of the assets and liabilities acquired or measured at fair value. This option is applied on a transaction-by-transaction basis. In accordance with the provisions of the standard, costs associated with combinations since December 1, 2009 are expensed for the period in which they were incurred. Goodwill is determined once on the date of the takeover (concept of single goodwill). The analysis of goodwill is finalized during the valuation period, which is 12 months from the date of takeover. The impact of subsequent percentage changes not affecting control is recognized in equity. Debt indexed to a price adjustment clause is recognized at fair value starting from the acquisition date. Any subsequent adjustments to the fair value of the debt are recognized in income.

1.6 INTANGIBLE ASSETS Intangible assets include primarily the valuation of the Kaufman & Broad brands and logos. The life of this asset is indefinite and is therefore not amortized, but it subject to impairment tests conducted annually or as soon as there are indicators of impairment. The other intangible assets are design costs and software. They are recognized at their acquisition or production cost and are amortized using the straight-line method over their useful life, which generally does not exceed five years.

Research and Development Expenses The development expenses of the Financière Gaillon 8 group are comprised of expenses attached to land (commitments related to programs for which commitments to buy the land have been executed) and are treated as inventory, as an element of the cost price, when it is probable that the program will be developed.

1.7 PROPERTY, PLANT AND EQUIPMENT F-14

Property, plant and equipment are recognized at acquisition cost; they are the property, plant and equipment of the Kaufman & Broad group. Depreciation expenses are calculated on the basis of the rate of consumption of the economic benefits expected per asset on the basis of the acquisition cost, minus, where applicable, a residual value. In this respect, the straight-line method is generally applied over the following periods:

• Fittings, improvements, facilities 10 years • Office equipment 5 years • Construction site equipment 5 years • Office furniture 10 years • Rolling stock 5 years • IT equipment 3 years The assets available to the Kaufman & Broad group under a finance lease agreement, which correspond primarily to IT equipment, are treated as if they had been acquired on credit and are depreciated on a straight-line basis over the period indicated above. Payments under operating leases are recognized as expenses until termination of the lease. Simple leases (other than sub-leases) are shown in the off-balance sheet commitments.

1.8 IMPAIRMENT OF LONG-TERM ASSETS Financière Gaillon 8 has only one CGU, the Kaufman & Broad group. For goodwill and intangible assets with an indefinite useful life, impairment tests are conducted at least once a year in order to ensure that the net book value (“NBV”) of the goodwill and of the non-amortizable intangible assets is at least equal to the recoverable value. Fixed assets (both property, plant and equipment and intangible) are subject to impairment when, because of events or circumstances during the relevant period (obsolescence, physical deterioration, material changes in the mode of use, performance below forecasts, decrease in income, and other external factors, etc.), their recoverable value appears to be permanently lower than their net book value. The impairment tests are carried out by comparing the recoverable value and the net book value of the assets. The need to recognize an impairment is assessed by comparing the book value of the assets and liabilities and their recoverable value. The recoverable value is the greater of the net fair value of the exit costs and the value in use. The net fair value of the exit costs is determined as the best estimate of the sale value net of the exit costs for a transaction made at arm’s length between informed and willing parties. This estimate is determined on the basis of the market information available taking into account specific situations. The useful value used by the Financière Gaillon 8 group corresponds to the aggregate discounted free cash flows generated over a three-year period with a terminal value.

1.9 EQUITY AFFILIATES AND JOINT VENTURES The carrying amount of the equity affiliates and joint ventures corresponds to the share of equity held. This item includes, for development operations, capital and similar investments, i.e., the current account advances made by the group in order to finance programs.

1.10 INVENTORIES “New projects” are Kaufman & Broad group programs that have not yet been developed. These programs are valued at cost and include reservation deposits for acquisition of land, design fees, land development expenses and all other fees incurred in connection with the projects. On each period-end date, the share of these expenditures incurred in respect of projects for which land purchase promises are not signed and for which there is a lack of probability of development in the near future is expensed. Inventories of programs under development are valued at cost. This cost includes the land acquisition price, related fees, taxes, cost of roads and equipment, cost of construction and development of the model areas, land expenses, as well as F-15

the fees and commissions inherent in the agency agreements executed by Kaufman & Broad in order to sell the real estate programs. For new programs since December 1, 2009, cost also includes financial expenses in accordance with IAS 23, “Borrowing costs”. All advertising expenses, including the expenses directly attributable to the real estate programs, are expensed. IAS 2 provides for the recognition of indirect fixed expenses to inventories, insofar as such expenses are clearly identifiable and can be allocated. These expenses must be integrated into the inventories by using systematic and rational methods applied in a consistent and ongoing manner to all costs having similar characteristics. Indirect fixed expenses (salaries, payroll expenses and other expenses) should be included in inventories when they are related to the land, technical and general administration departments and are essentially comprised of expenses related to development, works supervision, project management and after-sales management for the part that can be directly allocated to the real estate programs and is incurred after the execution of the land purchase promise. The group does not have in place management tools to identify and measure those costs in accordance with the IFRS criteria. Accordingly, it recognizes these expenses as indirect fixed costs. A fair value adjustment was indentified and allocated to inventories in relation to the allocation of the Kaufman & Broad acquisition price. It is removed from inventories on a percentage-of-completion basis and therefore in line with revenue recognition. Provisions are set aside in order to cover foreseeable losses, which are valued on the basis of an analysis of economic data and financial forecasts specific to each project.

1.11 ACCOUNTS RECEIVABLE Accounts receivable correspond to receivables of the Kaufman & Broad group accrued because of the recognition of revenues according to the completion of the programs. Accounts receivable include the following: • Calls for funds made to customers at various stages of the work in accordance with regulations in force that are still unpaid; • The lag that can exist between the calls for funds and the actual completion at the close of the financial year. This lag generates most of these receivables; these receivables are not yet payable. • Accounts receivable are measured at nominal value, after deducting the impairment charges recognized when the realizable value of the amounts due is less than the carrying amount.

1.12 CASH AND CASH EQUIVALENTS Cash and cash equivalents are comprised of the cash, demand deposits and cash equivalents as defined by IAS 7. These are short-term investments, generally for less than three months, readily convertible into a known amount of cash and not subject to any material risk of change in value; they are denominated in euros (primarily money-market SICAVs and money- market mutual funds and certificates of deposit).

At each period-end date, short-term investments are marked to market and any difference is booked through income.

1.13 PREPAID EXPENSES Prepayments are primarily related to rent and other maintenance expenses.

1.14 KAUFMAN & BROAD TREASURY SHARES Purchases or sales of treasury shares by the Kaufman & Broad group are treated as changes in the ownership interest of Financière Gaillon 8 in the Kaufman & Broad group.

F-16

The group valued the benefit awarded to employees on the basis of its fair value on the date of allotment of the rights. The value of the stock options and bonus shares is determined on the basis of the exercise price and term of the option, the current price of the underlying shares, the anticipated volatility in the share price, the dividends anticipated on the shares, the likelihood of exercise of the option, and the risk-free interest rate for the term of the option. That value is posted to general and administrative expenses on a straight-line basis between the options award date and the exercise date of the option or the date of availability of the shares with a direct contra entry posted to shareholders’ equity.

1.16 NON-CURRENT PROVISIONS Under IAS 37 “Provisions, Contingent Liabilities and Contingent Assets,” provisions are recognized when, at the end of the year, the group has an obligation to a third party resulting from a past event, the settlement of which is expected to result for the company in an outflow of resources representing economic benefits. Where applicable, such outflow of resources may be discounted. The obligation may be statutory, regulatory or contractual in nature. It may also result from the group’s practices or from public commitments that created a legitimate expectation from the third parties concerned as regards the assumption of certain responsibilities by the group. The estimate of the amount included as a provision corresponds to the resource outflow that the group will probably have to suffer in order to extinguish its obligation. If no reliable estimate of such amount can be prepared, then no provision is set aside. The liability is then contingent. Contingent liabilities are potential obligations resulting from past events whose existence will be confirmed only by the occurrence of uncertain future events not under the company’s control, or from current obligations resulting from past event, but that are not recognized because (i) it is not probable that an outflow of resources embodying economic benefits will be required to extinguish the obligation or (ii) the amount of the obligation cannot be determined with sufficient reliability. These liabilities are disclosed in Note 27.3. Non-current provisions primarily include provisions of the Kaufman & Broad group: • a provision for risks related to equity affiliates; • the provisions for commercial and legal risks; • a provision for tax risks; • and employee benefits. The group has no commitment other than the Kaufman & Broad and Financière Gaillon 8 retirement benefits that are provisioned in the group’s consolidated financial statements in accordance with IAS 19.

This provision is valued by an independent expert. The actuarial method used corresponds to the projected units of credit method described in IAS 19. This method consists in evaluating, for each employee, the amount of the benefit corresponding to the projected salary at the end of the career, and to the rights applied to the seniority vested on the valuation date. The amount of the benefit thus valued is discounted and tested for probability using the mortality table and the employee turnover table. Actuarial gains and losses are fully recognized in equity (outside the income statement) during the period in which they occur.

1.17 FINANCIAL LIABILITIES Current and non-current borrowings and financial liabilities Borrowings and other financial liabilities consist primarily of the syndicated lines of credit. These borrowings are initially marked to market and then valued on the basis of their amortized cost, calculated by using the effective interest rate (EIR). Transaction expenses that can be directly allocated to the acquisition or issuance of a financial liability are applied against the amount of such financial liability. The expenses are then amortized according to an actuarial method over the term of the liability by using the EIR method. F-17

The effective interest rate is the rate which discounts the anticipated future cash outflows until maturity or until the date closest to the next date of determination of price at the market rate, at the current net book value of the financial liability. This calculation includes all commissions paid or received between the parties to the agreement. The portion of the financial debt maturing in less than one year is shown among current liabilities.

Accounts payable and other liabilities Because of their short-term nature, the book values stated in the consolidated financial statements are reasonable estimates of market value.

Derivative financial instruments The group is exposed to the market risk, in particular interest rate risk. To deal with such risk, the group relies on a number of derivative financial instruments. Derivatives are marked to market. Any change in the fair value of derivatives is recorded in profit or loss, except in cases of hedging as indicated below.

Cash flow hedging instruments The group uses only future cash flow hedging instruments: • the cash flow hedge covers the exposure to changes in cash flows attributable to a specific risk associated with a recognized asset or liability or with an anticipated transaction (e.g., interest flows on variable-rate debt) where such risk would affect the reported net income. • the effective portion of the change in fair value of the hedging instruments is recognized directly through equity. The change in the value of the ineffective part of the hedging instrument is recognized through income. The amounts recorded as equity are shown in income in a manner symmetrical to the way in which the hedged assets and liabilities are recognized.

NOTE 1.18. FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value measurements are broken down by level, in accordance with the following fair-value hierarchy: • the instrument is quoted on an active market (level 1);

• the valuation employs measurement techniques based on observable data, directly (price) or indirectly (price derivatives) (level 2); • at least one significant component of the fair value is based on non-observable data (level 3). The fair value of financial instruments traded on active markets is based on quotations on the financial statement closing date. A market is considered to be active if the quotations are readily and regularly available from an exchange, traders, brokers, an appraiser or a regulatory agency and such quotations are based on regular transactions. These instruments are classified as Level 1. The fair value of financial instruments not quoted on an active market (for example, over-the-counter derivatives) is determined through the use of measurement techniques. These various methods make maximum use of observable market data, if available, and have little basis in the group’s own estimates. If all elements required for the fair value calculation are observable, this instrument is classified as Level 2. If one or more of the main elements of the calculation are not based on observable market data, the instrument is classified as Level 3.

F-18

IAS 12 requires, in particular, the recognition of deferred tax liabilities relating to all intangible assets recognized at the time of a business combination (trademarks, etc.). Under IAS 12, deferred tax assets and liabilities are not discounted. The group does not recognize any tax expense with regard to that portion of income attributed to holders of minority interests in tax-transparent companies, considering their tax status. The main impacts on the deferred tax are as follows: • application of the percentage of completion method for the determination of the margin on operations • elimination of internal services • deductibility of certain goodwill • timing differences related to provisions for liabilities and charges • The company recognizes its tax assets when they are recoverable either because of tax policies or because of income projections.

1.20 STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME As allowed by IAS 1 “Presentation of Financial Statements,” the group reports income by function. The group applied CNC Recommendation 2009-R-03 of July 8, 2009 for the reporting of income. The identification of the cost of goods sold is used to present gross margin as an intermediary sub-total in accordance with IAS 1, § 83. Operating income corresponds to net income before: • financial income; • financial expenses; • current and deferred taxes;

• the share of income or loss of equity affiliates; • income or loss from operations discontinued or held for sale.

Revenue recognition The group markets all of its development projects under the sale before completion (VEFA) plan. Through the VEFA agreement, lawmakers have given real estate developers the option to call for the clients’ funds based on the percentage of completion of programs, based on a schedule determined by law, while giving clients a Performance Bond. The customers’ cumulated payments may not exceed 35% of the prices upon completion of the foundations, 70% upon completion of the roof and 95% upon completion of the building. This contract transfers to the buyer the title to the land and building as the building is completed. Revenues are recognized in accordance with IAS 18 “Income from continuing operations” and the terms of IAS 11 “Construction Contracts” as regards recognition on the basis of the percentage of completion, i.e., based on technical completion, the starting point of which is the acquisition of the land and commercial completion (execution of the deeds of sale) of each program. The revenues and margin are recognized as the work is completed, in accordance with the following rule: revenues recognized for a given program are equal to the product of the cumulated revenues from the lots for which a deed of sale has been signed multiplied by the ratio between the amount of the land expenses and the construction expenses incurred by the group in respect of said program and the total budget of the program’s expenditures. The forecasts used were re-examined in full at year end and take into account, to the best of management’s knowledge, expected changes in the sales prices, marketing and costs.

F-19

The net income or loss is attributed to the owners of the parent company and to minority interests, even if this results in a loss for minority interests. Minority interests include all income and expenses attributable to the minority shareholders of the companies held in partnership and fully consolidated.

1.21 EARNINGS PER SHARE The group discloses earnings per share and diluted earnings per share. Earnings per share are calculated by dividing the net income of the fiscal year attributable to the group’s shareholders by the average number of shares of common stock outstanding during the fiscal year. Diluted net earnings per share are calculated according to the share purchase method. It is calculated on the basis of the net income attributable to the group’s shareholders, corrected for the financial costs of the diluting instruments, net of the corresponding tax effect. The number of shares used for the calculation of diluted earnings takes into account the conversion into shares of common stock of diluting instruments outstanding at the close of the period. In order to ensure the comparability of the earnings per share presented, the weighted average numbers of shares outstanding during the fiscal year and during earlier years are adjusted in case of a capital increase made at a price lower than the market price.

1.22 STATEMENT OF CASH FLOWS The Statement of Cash Flows is presented in accordance with IAS 7 and CNC Recommendation 2009-R-03. The group’s cash position, the changes in which are analyzed in the cash flow statement, is defined as the net change in the following balance sheet items: • cash and cash equivalents;

• credit facilities; • interest accrued on cash and cash equivalents.

1.23 OFF-BALANCE SHEET COMMITMENTS The summary of the group’s contractual obligations and commercial commitments is provided in Note 27.

1.24 FINANCIAL INDICATORS Financière Gaillon 8 applies the same financial indicators as the Kaufman & Broad group. Definition of the main financial indicators:

1.24.1 Gross margin This indicator is the difference between revenues and the cost of goods sold. The gross margin rate is the “gross- margin-to-revenues” ratio.

1.24.2 EBITDA EBITDA represents income (loss) attributable to shareholders before amortization, depreciation and other non-cash elements, income tax (expenses) / income, cost of net financial debt, other interest expense, other financial income, other non-recurring income, other non-recurring expenses and share of income (loss) of equity affiliates and joint ventures.

1.24.3 Free cash flow and cash flow from operations The free cash flow is equal to cash flow, less the net operating investments made during the year. Cash flow from operations after the cost of financial debt and taxes is equal to the consolidated net earnings adjusted for the portion of net earnings of equity affiliates, joint ventures and earnings of discontinued operations and estimated income and expenses.

F-20

1.24.4 Financial debt See Note 23.

NOTE 2—SCOPE OF CONSOLIDATION The consolidated financial statements of Financière Gaillon 8 consolidate the financial statements of the Kaufman & Broad group as of November 30, 2013 using the full consolidation method. Kaufman & Broad prepares its own consolidated financial statements in accordance with IAS/IFRS. The percentage of holding and the percentage of ownership interest of Financière Gaillon 8 that takes into account the treasury shares held by Kaufman & Broad SA can be analyzed as follows:

November 30, November 30, 2013 2012

% held ...... 87.96% 87.96% % interest after taking into account own shares ...... 90.74% 90.57% Own shares held by Kaufman & Broad SA ...... 681,840 643,093 Kaufman & Broad capital stock ...... 21,584,658 21,584,658 % Kaufman & Broad treasury stock ...... 3.16% 2.98% % treasury stock held through Financière Gaillon 8 ...... 2.78% 2.62%

NOTE 3—SEGMENT REPORTING Segment reporting is not applicable for Financière Gaillon 8, due to the existence of a single CGU, the Kaufman & Broad group. Kaufman & Broad segment reporting is disclosed in the notes to the consolidated financial statements of the Kaufman & Broad group as of November 30, 2013.

STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME The statement of consolidated comprehensive income corresponds primarily to Kaufman & Broad’s business activities over twelve months. The comprehensive income statement presents the financial expenses related to the financing of the Kaufman & Broad stock acquired and the expenses related to the allocation of the acquisition price.

NOTE 4 REVENUES AND GROSS MARGIN

November 30, 2013 November 30, 2012

Revenue Gross margin Revenue Gross margin

Total Apartments ...... 919,297 177,543 976,726 187,378

Total Single-family homes ...... 48,221 10,487 23,933 4,273

TOTAL HOUSING ...... 967,518 188,030 1,000,659 191,651

Offices ...... 51,223 5,981 21,087 5,781 Land & fees ...... 698 73 1,649 255 Showroom ...... 6,515 1,859 6,650 1,463

GRAND TOTAL ...... 1,025,954 195,943 1,030,045 199,150

(a) Gross margin includes a fair value inventory adjustment recognized in cost of sales totaling €1.184 million as of November 30, 2013, compared to €3.399 million as of November 30, 2012. The Group does not provide any services other than those performed under the delegated management contract and no significant goods or services have been exchanged as of November 30, 2013. NOTE 5—SELLING EXPENSES

F-21

November 30, November 30, (in € thousands) 2013 2012

Salaries and payroll taxes ...... 8,167 7,468 Advertising expenses and cost of model areas ...... 19,894 19,076 Rents and rental expenses ...... 403 385 Fees ...... 17 18 Temporary employees ...... 764 652 Recruitment costs ...... 27 39 Vehicle expenses—Travel ...... 673 748 Telephone—Electricity (EDF)—Minor maintenance ...... 40 36 Taxes ...... 594 768 Other expenses ...... 40 52

Total selling expenses ...... 30,619 29,242

The selling expenses of the Financière Gaillon 8 group (€30.619 million as of November 30, 2013 compared to €29.242 million as of November 30, 2012) represent the selling expenses of the Kaufman & Broad group.

NOTE 6—GENERAL AND ADMINISTRATIVE EXPENSES

November 30, November 30, (in € thousands) 2013 2012

Salaries and payroll taxes ...... 39,164 36 974 Rents and rental expenses ...... 5,325 5,969 Fees ...... 3,462 3,865 Financial reporting costs ...... 311 307 Taxes ...... 7,655 6,503 Temporary employees ...... 513 452 Recruitment costs ...... 447 254 Insurance ...... 71 209 Internet ...... 564 453 Telephone—Electricity (EDF)—Maintenance costs ...... 2,250 2,310 Vehicle expenses—Travel ...... 2,145 2,152 Information systems ...... 1,464 949 Other expenses ...... 1,820 2,695

Total general and administrative expenses ...... 65,191 63,092

The general and administrative expenses of the Financière Gaillon 8 group (€65.191 million) represent the general and administrative expenses for fiscal year 2013 of the Kaufman & Broad group in the amount of €65.058 million and Financière Gaillon 8’s own expenses in the amount of €133,000. The general and administrative expenses for fiscal year 2012 included the expenses of the Kaufman & Broad group in the amount of €62.935 million and Financière Gaillon 8’s own expenses in the amount of €157,000.

NOTE 7—TECHNICAL EXPENSES AND CUSTOMER SERVICE

November 30, November 30, (in € thousands) 2013 2012

Salaries and payroll taxes ...... 16,356 14,662 Fees ...... 35 39 Recruitment costs ...... 21 36 Temporary employees ...... 152 106 Vehicle expenses—Travel ...... 1,085 1,155 Telephone—Electricity (EDF)—Minor maintenance ...... 76 76 Taxes ...... 293 266 F-22

November 30, November 30, (in € thousands) 2013 2012

Other expenses ...... 34 -39

Total technical expenses and customer service ...... 18,052 16,301

Technical expenses and customer service derived exclusively from amounted to €18.0 million in 2013 as against €16.3 million in 2012, up 10.7%. This was primarily due to the increase in the salaries and payroll taxes related to the increase in workforce.

NOTE 8—OTHER INCOME AND EXPENSES

November 30, November 30, (in € thousands) 2013 2012

Fees ...... 4 Bank fees ...... 1,496 1,491 Expenses on discontinued projects ...... 2,594 4,553 Amortization, depreciation and provision expenses (net of reversals) ...... 4,071 1,941 Net amount of fixed assets sold ...... 449 271 Other expenses ...... 1,570 1,066

Total other expenses ...... 10,180 9,326

Sale of services ...... -1,886 -951 Proceeds from disposal of fixed assets ...... -1,284

Total other income ...... -3,170 -951

The other income and expenses of the Financière Gaillon 8 group represent the other income and expenses of the Kaufman & Broad group.

NOTE 9—OTHER NON-RECURRING INCOME AND EXPENSES

November 30, November 30, (in € thousands) 2013 2012

Reversal of provisions for impairment of land(a) ...... 1,500 Cost of job protection plan ...... 38 Risk on litigation with partners ...... 5 NBV of sold assets

Total other non-current income ...... 5 1,538

NBV of sold assets ...... 6 3 Risk on litigation with partners ...... 7

Total other non-current expenses ...... 6 10

(a) The Kaufman & Broad group purchased land in previous years and it estimated as of November 30, 2009 that sale was more likely than development. In this context, a provision of €5.1 million was booked to reduce the valuation of these properties to market value. To continue the reorganization plan adopted in 2008, these items are classified as other non-recurring expenses. For fiscal year 2012, having revisited the setup of a real estate program, the group decided to market the project on a previously depreciated piece of land. The impairment provision was thus immediately reversed, resulting in a net reversal of €1.5 million for fiscal year 2012.

NOTE 10—COST OF NET FINANCIAL DEBT AND OTHER FINANCIAL INCOME AND EXPENSES COST OF NET FINANCIAL DEBT

F-23

November 30, November 30, (in € thousands) 2013 2012

Financial expenses ...... -27,620 -30,831 Financial income ...... 773 1,799

Cost of net financial debt ...... -26,848 -29,032

The cost of net financial debt totaled €26.8 million, a reduction of €2.2 euros compared to 2012. Financial expenses can be analyzed as follows:

November 30, November 30, (in € thousands) 2013 2012

Interest expenses on syndicated loan ...... 31,055 34,588 Interest expense on swaps ...... 151 3,438 Expenses for deferring syndicate lines origination fees ...... 3,868 2,328 Capitalization of financial expenses—IAS 23 Kaufman & Broad ...... -9,444 -11,356 Other ...... 1,990 1,833

Financial expenses ...... 27,620 30,831

The financial expenses are mainly due to the use of syndicated loan facilities. Through the application of the total effective interest rate, financial expenses include amortization of the €3.8 million syndicated loan origination fees. Financial income can be analyzed as follows:

November 30, November 30, (in € thousands) 2013 2012

Capital gain on sale of money-market SICAVs and certificates of deposit ...... -681 -1,534 Other income from cash and cash equivalents ...... -92 -265

Financial income ...... -773 -1,799

NOTE 11—OTHER FINANCIAL INCOME AND EXPENSES Other interest expense

November 30, November 30, (in € thousands) 2013 2012

Expenses to defer origination fees on syndicated lines ...... 0 1,699

Total other financial expenses ...... 0 1,699

Other financial income

November 30, November 30, (in € thousands) 2013 2012

Financial income relating to the early repayment of the Kaufman & Broad Senior B and Senior C lines ...... 0 -1,000 Financial income relating to the early repayment of the Financière Gaillon 8 Senior B et Senior C lines ...... 0 -13,330 Financial income relating to the waiver of the use of a portion of the RCF line ..... 0

Total other financial income ...... 0 -14,330

Following the early repayment of the Senior B and C lines and the waiver of drawdown rights on a portion of the RCF line that took place in 2012, further amortization of the origination fees for the Senior B and Senior C lines was recorded in “Other financial expenses” in the amount of €1.7 million and financial income of €14.3 million was recorded in 2012. F-24

NOTE 12—TAX EXPENSE 12.1 ANALYSIS OF CORPORATE INCOME TAX EXPENSE As of November 30, 2013, the group noted expenses as follows:

November 30, November 30, (in € thousands) 2013 2012

Current CIT expense/(income) ...... 28,570 3,811 Provision for tax risk ...... 8,300 1,600 Deferred taxes ...... -15,195 19,376

Total tax on net income of consolidated companies ...... 21,675 24,787

The share of net income of affiliates is shown on a pre-tax basis. The corresponding tax liabilities are included in the group’s tax liability. Tax is calculated on the group’s share of net earnings.

12.2 TAX RECONCILIATION Deferred tax is calculated on the basis of the approved tax rates, i.e., 34.43% for 2010 and the years following. The reconciliation between the theoretical tax calculated on the basis of the French statutory tax rates and the effective tax liability is as follows:

November 30, November 30, (in € thousands) 2013 2012

Pre-tax income of consolidated companies ...... 48,221 67,267 Applicable tax rate ...... 34.43% 34.40% Theoretical tax—expense /(income) ...... 16,602 23,140 Provision for tax risk ...... 8,300 1,600 Impact of permanent differences ...... -7,938 -1,044 Impact of non-capitalized timing differences ...... 8,296 4,238 Tax on share of income (loss) of equity affiliates ...... 221 -21 Tax borne by minority Kaufman & Broad shareholders of tax-transparent companies ...... -3,806 -3,126

Group tax liability/(income) ...... 21,675 24,787

Permanent differences are due to Kaufman & Broad’s permanent differences in the amount of -€7.9 million resulting primarily from tax savings enjoyed by the group for its Belgian subsidiary before the transfer of its registered office to France in the amount of -€8.2 million in 2013, compared to -€1.5 million in 2012, to interest expenses for under-capitalization of subsidiaries of -€1.0 million (€1.0 million in 2012) and other non-deductible expenses. Kaufman & Broad SA and Financière Gaillon SA are not a group consolidated for tax purposes; therefore, profits generated by Kaufman & Broad SA and its subsidiaries consolidated for tax purposes are not charged against the losses of Financière Gaillon 8 SA. Since there is no projected use of tax losses generated by Financière Gaillon 8 SA, no deferred tax asset has been recognized for those losses in the consolidated financial statements of the Financière Gaillon 8 group.

12.3 ANALYSIS OF THE TAX RECOGNIZED DIRECTLY IN EQUITY

November 30, November 30, (in € thousands) 2013 2012

Actuarial gains or losses on deferred income taxes ...... 335 543 Hedging instruments (deferred tax) ...... -31 -785

Tax recognized directly in equity ...... 304 -242

F-25

NOTE 13—NET EARNINGS AND DILUTED EARNINGS PER SHARE Earnings per share are obtained by dividing the group’s attributable net income by the average number of shares outstanding in fiscal year 2013.

November 30, November 30, (in € thousands) 2013 2012

Attributable net income ...... 12,350 28,848 Average number of shares outstanding ...... 1,366,109,921 1,366,109,921

Earnings per share (in euros) ...... 0.009 0.021

Diluted earnings per share (in euros) ...... 0.009 0.021

STATEMENT OF FINANCIAL POSITION—ASSETS NOTE 14—GOODWILL The acquisition price of the Kaufman & Broad group was allocated to identifiable acquired assets and liabilities. Changes in the net value of goodwill can be analyzed as follows:

November 30, November 30, (in € thousands) 2013 2012

Balance at the beginning of the period ...... 144,370 144,370 Acquisition of Additional securities ...... 0 0 Change in % ownership interest in KB ...... 0 0 Reallocation of minority share ...... 0 0 Expenses related to acquisition ...... 0 0 Impairment ...... 0 0

Balance at the end of the period ...... 144,370 144,370

Goodwill was tested for impairment in accordance with IAS 36 “Asset Impairment”. The test showed no impairment as of November 30, 2013. The discount rate, used to determine the useful value as of November 30, 2013, is equal to 9.50%. This rate is calculated based on the average cost of capital employed and includes a risk premium. The free cash flows are determined on the basis of reasonable and documented assumptions. The group used budget forecasts made at the fiscal year-end and a 0.5% stable annual growth rate for the future. The recoverability test was conducted based on the CGU for the entire capital employed, including goodwill, the Kaufman & Broad brand, property, plant and equipment and the net working capital requirements. Sensitivity tests using the previous assumptions were performed to measure the impact of changing parameters for calculating, on the basis of variations deemed to be reasonably possible by the Management: the increase in the discount rate (50 basis points) and the decrease in the long-term growth rate (50 basis points). No potential impairment appears using these assumptions.

NOTE 15—PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS 15.1 NET INTANGIBLE ASSETS

Accumulated November 30, November 30, 2013 2012 amortization (in € thousands) Gross amount and depreciation Net amount Net amount

Kaufman & Broad brand...... 80,422 80,422 80,422 Other intangible assets ...... 12,639 -7,821 4,818 4,339

Intangible assets ...... 93,061 -7,821 85,240 84,761 F-26

Other intangible assets correspond solely to Kaufman & Broad software.

The change in net value of intangible assets can be analyzed as follows:

November 30, November 30, (in € thousands) 2013 2012

Balance at the beginning of the period ...... 84,761 82,874

Acquisitions of intangible assets ...... 2,219 1,931 Disposal and scrapping and change in scope of consolidation ...... 1,286 Depreciation ...... -1,740 -1,330

Balance at the end of the period ...... 85,240 84,761

Acquisitions of intangible assets and depreciation correspond only to computer software.

15.2 NET PROPERTY, PLANT AND EQUIPMENT

Accumulated November 30, 2013 November 30, 2012 amortization and (in € thousands) Gross amount depreciation Net amount Net amount

Land ...... 0 144

Buildings ...... 0 169 Technical facilities ...... 1 -1 0 0 Other tangible assets ...... 13,629 -9,876 3,753 4,476 Property, plant and equipment in progress ...... 960 960 815

Net property, plant and equipment ...... 14,590 -9,877 4,713 5,604

Inc. finance lease

(amortized over 3 years) 0 14 Property, plant and equipment represent only the Kaufman & Broad group’s property, plant and equipment. Finance leases primarily cover IT equipment. The change in net value of tangible assets can be analyzed as follows:

November 30, November 30, (in € thousands) 2013 2012

Balance at the beginning of the period ...... 5,604 5,883 Acquisitions of tangible assets ...... 848 2,030 Disposal and scrapping and change in scope of consolidation ...... -1,740 -1,286 Depreciation (net of reversals) ...... 1 -1,023

Balance at the end of the period ...... 4,713 5,604

NOTE 16—NON-CURRENT FINANCIAL ASSETS

November 30, November 30, (in € thousands) 2013 2012

Equity affiliates and joint ventures ...... 8,181 4,373 Pledged SICAVs and other amounts(a) ...... 18,446 Security deposits and bonds ...... 1,693 1,262

Other non-current financial assets ...... 28,320 5,635

(a) see Note 27.3 F-27

16.1 EQUITY AFFILIATES AND JOINT VENTURES The shares of equity affiliates as of November 30, 2013, were primarily as follows:

Share of shareholders’ equity Contribution to Percentage of of equity affiliates Current the consolidated (in € thousands) capital held and joint ventures account position

SAS St Exupéry Montaudran ...... 50.00% -992 114 -878 SCI 87- 91 av de la div Leclerc ...... 50.00% 93 51 144 SCCV Colombes Marine Lot A ...... 10.00% -201 612 411 SCCV Colombes Marine Lot B ...... 10.00% 75 326 401 SCCV Colombes Marine Lot H ...... 10.00% 33 438 471 SCI Gonesse—Fontaine St Nico ...... 43.00% 19 576 595 SCCV Athena ...... 40.00% 722 -482 240 La Lilatte ...... 33.33% -157 495 338 Le clos des Arts ...... 50.00% -2 106 104 SARL Foncière JLG Amenageur ...... 50.00% -172 1,600 1,428 SCI St Maur—Parking Ilôt 1 ...... 50.00% -2 122 120 SCCV Bagneux—Paul Eluard ...... 50.00% 368 2,858 3,226 SCV Bagneux—Fontaine Gueffier II ...... 50.00% -54 1,470 1,416 Other companies ...... — -68 233 165

Equity affiliates and joint ventures ...... -338 8,519 8,181 The share of the net income of equity affiliates and joint ventures, in the amount of €642.000 as of November 30 2013, is included in the shareholders’ equity above. The change in the value of the equity associates and joint ventures can be analyzed as follows:

November 30, November 30, (in € thousands) 2013 2012

Balance at the beginning of the period ...... 4,373 3,473

Changes in current accounts and other companies ...... 3,166 961 Attributable net income ...... 642 -61

Balance at the end of the period ...... 8,181 4,373

NOTE 17—INVENTORIES

November 30, November 30, 2013 2012

(in € thousands) Gross Depreciation Net Gross Depreciation Net

New projects ...... 27,126 -2,358 24,768 24,247 -718 23,529 Programs in progress ...... 302,360 -1,662 300,698 263,960 -1,691 262,269

Total ...... 329,486 -4,020 325,466 288,207 -2,409 285,798 The change in impairments can be broken down as follows:

November 30, November 30, (in € thousands) 2012 Expenses Reversals 2013

New projects ...... 718 3,367 -1,727 2,358 Programs in progress ...... 1,691 216 -245 1,662

Total ...... 2,409 3,583 -1,972 4,020 Gross inventories of programs in progress declined by €38.4 million during the year. Expense inventories of new projects rose by €1.2 million, a consequence of the development of new operations. F-28

Recognized reversals of provisions for impairment mainly correspond to the reduction in provisions for loss at termination on operations developed in 2007 as they progressed. The provision for expense inventories of new projects increased following the decision to depreciate project expenses where there was no formal decision to discontinue but whose development is uncertain.

NOTE 18—ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES AND OTHER NON-CURRENT ASSETS

November 30, November 30, 2013 2012

(in € thousands) Note Gross Depreciation Net Gross Depreciation Net

Accounts receivable ...... (18.1) 292,668 -890 291,778 269,367 -1,178 268,189 Government—VAT ...... (18.2) 107,931 -992 106,939 129,028 -971 128,057

Government—CIT ...... (19) 16,611 16,611 34,601 34,601 Advances and down

payments ...... 994 994 2,182 2,182 Current equity affiliates

accounts ...... (18.3) 9,251 9,251 9,170 9,170

Other financial receivables .. (18.4) 0 0 2,379 2,379

Receivables from notaries .... 11,203 11,203 811 811

Other ...... 14,057 -3,115 10,942 9,265 -3,817 5,447

Prepaid expenses ...... 880 880 1,021 1,021

Total ...... 453,595 -4,997 448,598 457,824 -5,966 451,857

All “Accounts Receivable” and “Other Receivables,” excluding the corporate income tax (“CIT”) and excluding Financière Gaillon 8’s VAT receivable mature in less than one year. Of these receivables, €446.0 million originate from Kaufman & Broad SA’s consolidated financial statements and €2.5 million from receivables of Financière Gaillon 8 in relation to a VAT receivable maturing in 1 to 5 years that is classified as a non-current asset.

Change in depreciation

(in € thousands) Nov. 30, 2012 Expenses Reversals Nov. 30, 2013

Accounts receivable ...... 1,178 107 -395 890 Other receivables ...... 4,788 1,067 -1,749 4,107

Total ...... 5,966 1,174 -2,144 4,997 During the fiscal year, there were no significant allowances, or reversals of allowances, for trade and other receivables.

NOTE 18.1 ACCOUNTS RECEIVABLE The difference between net accounts receivable (€291.8 million) and the amount of cash calls outstanding (€43.9 million) net of impairments, i.e., €247.9 million, corresponds to the lag time between the contractual calls for funds and the program percentage-of-completion revenues recognized. Receivables corresponding to that difference are posted exclusive of tax. The civil-law notary drafting the deed of sales is generally required to ensure that the financing of the sale is closed upon the execution of the deed. Therefore, provisions for accounts receivable are rare. Receivables beyond 90 days essentially include payment delays on cash calls on lots not yet delivered to buyers. Receivables on which the group believes there is a risk of non-collection are provisioned in the amount of €0.9 million. According to our standard terms of payment, calls for funds are payable immediately upon receipt. As of November 30, 2013, the calls for funds’ by age were as follows:

between 0 and 30 days ...... € 36.7 million between 30 and 60 days ...... € 3.4 million between 60 and 90 days ...... € 0.8 million F-29

more than 90 days ...... € 3.0 million

Total cash calls ...... € 43.9 million

NOTE 18.2 GOVERNMENT—VAT As of November 30, 2013, the VAT item included the VAT deductible on recorded supplier invoices, amounting to €29.9 million (€44.8 million in 2012), the VAT recognized on unreceived invoices associated with the recognition of expenses on a program percentage-of-completion basis, amounting to €55.9 million (€60.0 million in 2012), and VAT credits amounting to €15.6 million (€23.9 million in 2010).

NOTE 18.3 CURRENT ACCOUNTS EQUITY AFFILIATES This item reflects the portion of the loss allocated to minority equity affiliates and not settled as of November 30, 2013 on fully consolidated operations. A provision was recorded in the amount of €9.1 million to cover the risk associated with defaulting equity affiliates (see Note 22.3).

NOTE 18.4 OTHER FINANCIAL RECEIVABLES “Other financial receivables” represent non-current provisions on the loan granted to Seniors Santé, which was settled in January 2013.

NOTE 19—CIT AND DEFERRED TAXES

November 30, November 30, (in € thousands) 2013 2012

Current CIT (assets) ...... 16,611 34,601 Government—current CIT (liabilities) ...... -10,694 Deferred tax liabilities ...... -40,538 -56,042

Balance at the end of the period ...... -34,621 -21,441

The Financière Gaillon group has a deferred tax liability in the amount of €40.538 million, of which €40.365 million originate from the Kaufman & Broad group and €173,000 from FG8 in relation to goodwill. The result of the tax consolidation of the Kaufman & Broad group for 2013 was a profit of €111.1 million. €56 million in previous loss carryforwards were able to be allocated, thus bringing the group’s loss carryforwards to €28.4 million. Current tax debt as of November 30, 2013 of an amount of €16.2 million includes debt from carryback losses of €15.7 million recorded in fiscal years 2009 and 2010, as well as other debts related to sponsorship tax credits of €0.1 million and CICE, a French tax, of €0.4 million. The current tax liability corresponds to a Belgian tax debt of €10.7 million.

Source of deferred taxes by nature:

Deferred tax base Deferred taxes at at November 30, November 30, (in € thousands) 2013 2013

Differences in recognition of real estate programs ...... 141,752 -48,805 Provisions and expenses with deferred deductibility ...... -14,575 5,018 Tax deductible beneficial ownership ...... 24,301 -8,367 Provisions for land ...... -600 207 Hedging swaps ...... -121 41 Tax loss carryforwards ...... -29,510 10,160 FG8 fair value adjustments ...... 503 -173 Other ...... -4,009 1,380

Balance at end of period ...... 117,741 -40,538

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Most of the deferred taxes originate in the differences in the recognition of real estate programs between the fiscal accounts and the consolidated accounts (nature of the costs integrated in inventories and recognition of income by completion in the fiscal accounts).

Deferred taxes changed as follows:

November 30, November 30, (in € thousands) 2013 2012

Balance of deferred taxes at the beginning of the period—assets/(liabilities) ...... -56,042 -36,687

Recognized in profit and loss(a) ...... 15,200 -19,376 Recognized in equity ...... 304 -242 (a) Other changes ...... 263

Balance of deferred taxes at the end of the period—assets/(liabilities) ...... -40,538 -56,042

(a) The impact came primarily from the Kaufman & Broad financial statements. (b) The other changes correspond to the reclassification of the prior period as current tax.

NOTE 20—CASH AND CASH EQUIVALENTS The group’s cash and cash equivalents can be analyzed as follows:

November 30, November 30, (in € thousands) 2013 2012

Bank balances and cash on hand(3) ...... 116,352 88,626 Short-term investments(1) ...... 71,572 63,324 Order balances(2) ...... 2,397 3,837

Cash and cash equivalents ...... 190,321 155,787

1) Financière Gaillon 8’s short term investments consist only of money-market SICAVs and certificates of deposit.

2) Order balances represent 5% of deposits paid by Kaufman & Broad’s clients into a blocked bank account. These amounts are released and therefore available upon execution of the notarized deed.

3) In accordance with the provisions of the Construction and Housing Code, payment of any sum owed by program companies to their equity affiliates may only be made strictly within the limits of the amounts freely available to the program companies based on the percentage of completion of building operations.

STATEMENT OF FINANCIAL POSITION—LIABILITIES NOTE 21—SHAREHOLDERS’ EQUITY As of November 30, 2013, Financière Gaillon 8 SA’s stock capital totaled €37,000, divided into 684,089,563 shares of common stock and 682,020,358 shares of preferred stock with the same par value. Preferred shares do not carry voting rights and entitle their holders to a share of profits and to the liquidation dividend of the company which will be permanently approved on the date of disposal by the company of its ownership interest in its subsidiary Kaufman & Broad SA. Share ownership did not change in fiscal year 2013. Its structure as of November 30, 2013 is detailed in the table below.

Number of shares Number of shares of preferred Distribution of Shareholder of common stock stock voting rights % capital

Financière Daunou 10 ...... 465,180,900 68% 34%

CACIB ...... 682,020,358 50% Financière de Neuilly SAS ...... 218,908,660 32% 16% Frédéric Stevenin ...... 1 Sophie Lombard...... 1 Patrick Mouterde ...... 1

Total ...... 684,089,563 682,020,358 100% 100%

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21.1 CHANGE IN CAPITAL

(in € thousands) November 30, 2012 Expenses Reversals November 30, 2013

Number of shares ...... 1,366,109,921 1,366,109,921

Capital in € ...... 37,000 37,000

21.2 TREASURY SHARES As of November 30, 2013, the group did not hold any treasury shares.

21.3 DISTRIBUTIONS There was no distribution carried out by Financière Gaillon 8 for the fiscal year.

21.4 MINORITY INTEREST As of November 30, 2013, the share of income attributable to minority interests totals €14.9 million, €11.1 million of which corresponds to the share of the companies under full consolidation in the financial statements of the Kaufman & Broad group attributable to external shareholders, since none of those companies had material share in the earnings of the group, and €3.8 million of which corresponds to the share of income net of tax of Kaufman & Broad attributable to Kaufman & Broad’s minority shareholders.

21.5. SHARE PAYMENTS AT KAUFMAN & BROAD 21.5.1. KAUFMAN & BROAD STOCK OPTION PLANS A stock option plan instituted group-wide at Kaufman & Broad in 2006 is still in effect as of November 30, 2013. No new tranche has been granted nor has a new stock option plan been put in place in 2013. The main characteristics of the plan in effect as of November 30, 2013 at Kaufman & Broad are itemized in the table below:

Stock-options Extraordinary Shareholders’ Meeting authorization date ...... 04/19/2006 Date of Board of Directors Meeting granting the options/shares ...... 04/19/2006 Total number of options granted ...... 95,500 Number of beneficiaries...... 26 Start date for exercising options ...... 04/19/2008 Expiration date ...... 04/19/2016 Restriction from disposing of shares until ...... 04/19/2010 Strike price ...... € 44.23 Options in circulation at the start of the fiscal year ...... 31,100 Options granted during the fiscal year ...... — Options abandoned during the fiscal year ...... — Options exercised during the fiscal year ...... — Options expired ...... 0 Options in circulation as of November 30, 2013 ...... 31,100 Options eligible to be exercised as of November 30, 2013 ...... 31,100

21.5.2. KAUFMAN & BROAD FREE SHARE ALLOCATION PLAN In compliance with the authorizations of the Kaufman & Broad SA April 2009 and April 2012 Shareholders’ Meetings, it was resolved to institute a share allocation plan for certain executives of Kaufman & Broad SA and affiliated companies in order to tie them more closely to the company’s development. As part of the free share allocation plan begun on February 17, 2011, 34,000 free shares were allocated on February 17, 2013 at the end of the vesting period, and were issued. F-32

As authorized by the April 19, 2012 Shareholders’ Meeting, the Board of Directors allocated 35,800 additional free shares on January 22, 2013. Ownership of the allocated shares in connection with the various plans described below is transferred at the end of the vesting period, i.e., the end of a two-year period following the date on which the shares are allocated by the Board of Directors. Moreover, beneficiaries of these plans may not transfer ownership of the shares actually vested by any means whatsoever prior to the expiration of the retention period, i.e., two years after the date said shares are acquired.

The main characteristics of the plans in place as of November 30, 2013 within the Group are itemized in the table below:

Free share allocation plan January 17, 2012 January 22, 2013

Extraordinary Shareholders’ Meeting authorization date ...... April 9, 2009 April 19, 2012 Number of free shares that may be allocated ...... 22,183 100,000 Date of the Board of Directors meeting allocating the shares ...... January 17, 2012 January 22, 2013 Number of beneficiaries...... 21 40 Types of share ...... Existing Existing Number of free shares allocated ...... 20,000 35,800 Shares that have lapsed ...... 1,000 600 Shares in effect as of November 30, 2013 ...... 19,000 35,200 Strike price ...... — — Price on allocation day ...... €14.62 €16.63 Acquisition date ...... January 18, 2014 January 23, 2015 Date available ...... January 18, 2016 January 23, 2016 Plan’s initial fair value ...... €270,314 €522,544 Date entered in the model: ...... Binomial model Binomial model —strike price ...... — — —illiquidity discount of securities (% of future price) ...... 1% 1% —anticipated dividends (as a % of capitalization) ...... — €1 per share— —no-risk interest rate (market rate) ...... 1.25% 0.60% —lending/borrowing rate of securities ...... 0.50% — —discounted future price ...... Euribor + 300 bps Euribor + 300 bps —turnover rate ...... — — The free share allocation plans generated an expense for the period of €430 thousands, broken down as follows, recorded under income and offset in equity.

(in € thousands) 02/17/11 Plan 01/17/12 Plan 01/22/13 Plan Total

Initial valuation ...... 762 270 523 1,555 Expense for the year ...... 79 128 223 430

NOTE—22 PROVISIONS The provisions are those of the Kaufman & Broad group.

Used Unused (in € thousands) Note 11/30/2012 Expenses reversals reversals 11/30/2013

Provisions for retirement benefits ...... (22.2) 3,469 1,251 -201 -11 4,509 Provisions for risks with partners ...... (22.3) 8,935 677 -190 -338 9,084

Provision for tax risk ...... (22.4) 4,600 9,534 14,134

Provisions for restructuring ...... (22.5) 258 258

Provisions for charges ...... 20 20 Provisions for social litigation risks ...... (22.5) 2,966 1,580 -2,147 -59 2,340 Provisions for other risks ...... (22.6) 5,287 1,909 -1,343 -1,036 4,816

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Used Unused (in € thousands) Note 11/30/2012 Expenses reversals reversals 11/30/2013

Provisions ...... 25,535 14,951 -3,881 -1,445 35,160

22.1 MATURITY

Less than More than (in € thousands) Nov. 30, 2013 one year one year

Provisions for retirement benefits ...... 4,509 4,509

Provisions for risks with partners ...... 9,084 9,084 Provision for tax risk ...... 14,134 1,234 12,900 Provisions for restructuring ...... 258 137 121

Provisions for charges ...... 20 20

Provisions for social litigation risks ...... 2,340 2,340 Provisions for other risks ...... 4,816 353 4,463

Provisions ...... 35,160 1,724 33,436

22.2 PROVISIONS FOR RETIREMENT BENEFITS The following assumptions were used in order to calculate retirement benefits: • discount rate: 3.0% rate on “AA” corporate bonds (value determined by the IBOXX index); a change in this rate of 25 bps up or down would lead to a difference of some 130 thousand euros upward or downward, respectively. • average wage increase rate: 2.00%; • inflation rate: 2%; • retirement age of 62 for all personnel categories; • average annual turnover of: 3.89%, knowing that a differential rate calculated on the average of the last three years was applied by age bracket in 2012. The discount rate applied by the company depending on market conditions is based on commitments made over periods similar to the estimated duration of the company’s commitments for employee benefits. The company does not hold any hedging assets for retirement benefits plans. This provision includes the payroll taxes which the company would have to pay if it required employee retirement pursuant to the labor laws in force. The change in the provision is as follows: The table below shows the details of the expense items recognized for the fiscal year for retirement indemnities:

(in € thousands) November 30, 2013 November 30, 2012

Costs of services rendered during the fiscal year(a)...... 209 101 Financial cost(b) ...... 94 67

Expense recognized in profit and loss ...... 303 167

(a) The cost of services rendered during the fiscal year was recognized in “Salaries and payroll expenses”. (b) The financial cost is recorded under the “Cost of net financial debt” item. The change in the provision is as follows:

(in € thousands) November 30, 2013 November 30, 2012

Net liability at the beginning of the period ...... 3,469 2,098 Cost for the fiscal year ...... 303 168 Benefits paid ...... 220 376 F-34

(in € thousands) November 30, 2013 November 30, 2012

Actuarial gains or losses (recognized in equity) ...... 957 1,579

Net liability at the end of the period ...... 4,509 3,469 Personnel costs recorded for the workforce of the Group companies can be broken down as follows:

November 30, 2013 November 30, 2012

Average workforce (full time equivalent) ...... 730 730 Salaries and payroll taxes ...... 65,098 60,349 Of which salaries and wages(a) ...... 43,268 39,336 Of which: employer matching contribution ...... 835 740 free shares(b) ...... 430 515 Social security contributions(c) ...... 21,830 21,013

Total personnel costs ...... 65,098 60,349

(a) This amount reflects the impact of the Group’s commitments with regard to employee pensions. (b) The information with regard to payments in shares can be found in Note 21. (c) Expenses recognized in connection with pension schemes totaled €5.0 million for fiscal year 2013, as compared with €5.0 million for fiscal year 2012.

22.3 PROVISIONS FOR RISKS WITH PARTNERS This provision of €9.1 million covers the risk associated with defaulting affiliates; it includes €6.4 million that represents the risk relating to a partner as the result of a legal dispute (see Note 18.3).

22.4 PROVISIONS FOR TAX RISK After accounting audits, several proposals to modify were made to Kaufman & Broad SA by France’s National and International Tax Audit Directorate (DVNI) with respect to Kaufman & Broad operations in Belgium. The total risk notified on the basis of Article 209B of the General Tax Code amounted to €25.9 million. On this basis, Kaufman & Broad has booked €12.9 million as a provision for the period from 2008 to May 2010, during which the Belgian entity Kaufman & Broad Europe had neither offices nor employees. Kaufman & Broad SA disputes the merits of all of these adjustments, and has referred the matter to the courts for the 2008 tax adjustment.

22.5 PROVISIONS FOR RESTRUCTURING AND SOCIAL RISKS A provision for restructuring charges had been booked in the financial statements as of November 30, 2008. It amounts to €0.3 million as of November 30, 2013, which reflects the costs associated with labor disputes related to the Job Protection Plan that appeared during 2009 and the residual risks relating to land acquisition promises that were signed and not implemented. The provision for disputes with former employees of the group is €0.5 million. A provision in the amount of €1.8 million covers URSSAF adjustments of which notice was given to GIE Kaufman & Broad. This tax adjustment, which is for the unpaid contributions on travel allowances, was provisioned for the risk estimated by the company to the extent that part of the documentation to be provided must reduce the amount of the adjustment.

22.6 PROVISIONS FOR OTHER RISKS The provision for commercial and legal risks essentially covers ongoing disputes with customers or suppliers of delivered projects, amounting to €4.8 million.

NOTE 23—FINANCIAL DEBT 23.1 GROSS FINANCIAL DEBT BY TYPE F-35

Gross financial debt represents: • Kaufman & Broad’s gross financial debt in the amount of €238.3 million. • Financière Gaillon 8’s gross financial debt in the amount of €312.5 million.

(in € thousands) November 30, 2013 November 30, 2012

Syndicated bank credit line ...... 510,047 489,663 Other borrowings ...... 0 4 Credit facilities...... 512 454 Issuance expenses ...... -1,073 -4,941 Other financial liabilities ...... 41,280 37,626

Gross financial debt ...... 550,766 522,806

—of which non-current ...... 530,840 522,302 —of which current ...... 19,926 504

Financing totaling €562.9 million includes senior loans in the amount of €476.9 million and an operations financing line for €86.0 million (drawn in the amount of €33.1 million). The syndicated bank credit facilities were drawn in the amount of €510.0 million as of November 30, 2013.

Principal As of Nov. 30, As of Nov. 30, (in € thousands) Fin. Gaillon 8(1) Kauf. & Broad Total Maturity 2013 2012

Line B1 ...... 48,986 48,986 10/07/2015 48,986 45,320

Line B2 ...... 70,434 70,434 10/07/2015 70,434 65,163

Line B3 ...... 101,479 101,479 10/07/2015 101,479 101,479

Line B4 ...... 19,196 19,196 10/07/2015 19,196 19,196

Line C1 ...... 49,159 49,159 10/07/2016 49,159 45,481

Line C2 ...... 70,670 70,670 10/07/2016 70,670 65,382

Line C3 ...... 102,088 102,088 10/07/2016 102,088 102,088

Line C4 ...... 14,903 14,903 10/07/2016 14,903 14,903

Revolving ...... 52,900 52,900 10/07/2014 0 0

Revolving ...... 33,129 33,129 10/07/2015 33,129 30,650

TOTAL ...... 272,380 290,567 562,947 510,047 489,663

(1) includes interests capitalized as of June 30, 2013

23.2 MATURITY

November 30, Maturing Maturing> Maturing (in € thousands) 2013 Not applicable < 1 year 1 year and <5 years > 5 years

Syndicated credit facility ...... 510,047 18,708 491,339

Credit facilities used/Accrued interest Other borrowings ...... 512 512 Issuance expenses ...... -1,073 -1,073 Other financial liabilities(1) ...... 41,280 706 40,574

Gross financial debt ...... 550,766 -1,073 19,926 531,913

The maturities of the syndicated bank credit facilities set up in 2007 by Kaufman & Broad and Financière Gaillon 8 mature for the RCF line on July 10, 2014 for the share due by Kaufman & Broad (€52.9m) and on July 10, 2015 for the share due by Financière Gaillon 8 (€33.1m), for the balance of the Senior B line on July 10, 2015 and for the balance of the Senior C line on July 10, 2016. The loan agreement’s main acceleration and termination clause is related to the non-compliance with one or more of the financial covenants detailed in the notes to Kaufman & Broad’s consolidated financial statements and below for the financial covenants pertaining to Financière Gaillon 8.

Applicable covenants The Senior Facilities Agreement, which results from the final agreement signed by the company and its lenders on January 23, 2009 and the supplemental agreements signed on June 30, 2009 and November 25, 2009, stipulates an adjustment in the financial ratios applicable to the company: • in the following accounting quarters until the expiration of the agreement in 2016, the group will be required to comply with two ratios, calculated on the basis of the Kaufman & Broad group consolidated financial indicators, with levels redefined as follows:

Nov. Feb. May Aug. Nov. Nov. RATIOS 2013 2014 2014 2014 2014 2015

Debt ratio ...... ‹ 4.05 < 3.95 < 3.60 < 3.40 ‹ 3.30 ‹ 2.20 Minimum cash flow level (in € millions) ...... 328 342 379 419 440 540

• Supplemental Agreement No. 5, signed on March 10, 2010, modified the financial definitions of EBITDA, cash flow and net cash interest stipulated by the Senior Facilities Agreement in order to neutralize the effects of IAS 23 (Borrowing Costs) on these ratios and to ensure for the financial parties the same protection they received under the contract before the application of this standard.

Details of the covenants as of November 30, 2013

Threshold November 2013

Debt ratio(a) ...... < 4.05 0.63 Minimum cash flow level (in € millions) ...... 328 570

(a) Or Net Financial Debt divided by EBITDA. The covenants were respected as of November 30, 2013.

23.3 MAIN NET DEBT ITEMS Net financial debt is corresponds to gross financial debt minus cash and cash equivalents. The balance sheet items contributing to net financial debt are as follows:

(in € thousands) November 30, 2013 November 30, 2012

Gross financial debt ...... 550,766 522,806

Cash and cash equivalents ...... 190,321 155,787

Net financial debt ...... 360,445 367,019

NOTE 24—BLOCKED CURRENT ACCOUNTS The amount of €4.9 million as of November 30, 2012 and November 30, 2013 corresponds to the loan granted by Financière Daunou 10, which is Financière Gaillon 8’s majority shareholder and an investment vehicle for funds managed by PAI Partners.

NOTE 25—CURRENT AND NON-CURRENT LIABILITIES

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November 30, November 30, (in € thousands) 2013 2012

Current provisions ...... 1,724 1,000 Other current financial liabilities (see Note 23.1) ...... 19,926 504 Accounts payable ...... 550,314 473,690 Other payables ...... 92,869 111,797 Deferred income ...... 1,217 1,616

Total current liabilities ...... 666,050 588,607

The “Other liabilities” item corresponds primarily to tax and social security liabilities of €65.8 million, including €30.1 million in VAT, €10.7 in current CIT liability, €7.7 million in advances and down payments received, and €17.9 million in shareholders’ current accounts. A PAI invoice in the amount of €15.3 million relative to the cost of the acquisition of the Kaufman & Broad shares was reclassified under non-current liabilities as its maturity is from one to five years.

Additional Information NOTE 26—NOTES TO THE STATEMENT OF CASH FLOWS DETAILS OF THE CHANGE IN OPERATING WORKING CAPITAL REQUIREMENTS

November 30, Change in Change in Other November 30, (in € thousands) 2012 WCR scope changes 2013

Inventories ...... 285,798 42,031 -1,944 -420 325,466

Accounts receivable ...... 268,189 20,734 2,855 291,778 Accounts payable ...... -488,977 -76,617 -30 24 -565,600 Other ...... 33,275 24,428 -830 -56 56,817

Operating working capital requirement (Statement of cash flows) ...... 98,285 10,576 52 -452 108,461

Current CIT ...... 34,601 -28,684 5,917

Working capital requirement ...... 132,886 -18,108 52 -452 114,378

The change in operating working capital requirements (excluding current CIT) amounted to €10.6 million between December 1, 2012 and November 30, 2013. The amount of inventories on the balance sheet, i.e., €325.5 million includes an allocation of a share of the acquisition price for €0.5 million.

NOTE 27—OFF-BALANCE SHEET COMMITMENTS As of November 30, 2013, Management believes, to the best of its current knowledge, that there are no commitments likely to have a material impact on the current or future financial position of the group, other than those indicated in Note 23.1.

• a disposal of trade receivables agreement, as collateral on Financière Gaillon 8 intercompany receivables with respect to its subsidiaries, between Financière Gaillon 8 and Calyon.

Security interests have been granted by Kaufman & Broad SA to guarantee its commitments for the financing set up in July 2007.

Final % Total assets Kaufman & expiration Amount of assets Total balance Broad SA as of Nov. 30, Type of pledge / lien Start date date pledged(b) sheet item 2013

Pledge of financial instrument account—100% of Kaufman & Broad Homes SAS shares held by the (a ) company ...... € 10,450,195 € 10,450,195 2%

Pledge of the credit balance in the Kaufman & Broad SA (a ) bank accounts ...... 506,652 506,652 —

Framework agreement for the assignment of intra-group receivables from Kaufman & Broad SA’s subsidiaries, in particular Kaufman & Broad (a ) Financement SNC ......

Pledge of 100% of Kaufman & Broad Europe (a ) SAS shares ...... € 217,436,878 € 217,436,878 42%

Total ...... € 228,393,725 € 228,393,725 44%

(a) These pledges are intended to be maintained until full payment of the amounts and fees owed by the company as borrower and guarantor under the Senior Facilities Agreement and ancillary agreements. (b) Net book value in the statutory financial statements as of November 30, 2013.

Guarantees and bonds given All the items detailed below are related to the normal course of Kaufman & Broad’s operations and have been provided by the Kaufman & Broad group.

November 30, November 30, (in € thousands) 2013 2012

Performance bonds(a) ...... 203,729 268,062 Hoguet Law guarantees(b) ...... 220 220 Order indemnities(c) ...... 14,363 17,014 Other guarantees given(d) ...... 89,073 64,004

Guarantees and bonds given ...... 307,385 349,300

In consideration for such guarantees, Kaufman & Broad typically gives such financial institutions or insurance companies a mortgage commitment and a non- assignment of shares undertaking if the program is funded by a special-purpose entity.

Performance bonds are valued internally each month and are then updated on the basis of the figures communicated by the financial institution on the basis of its own reports to Banque de France or to the Insurance Control Commission.

(b) The Hoguet Law guarantees are required from companies intending to operate as a real estate agent. This purely ad-hoc operation does not form part of the group’s strategy. (c) Order indemnities are bank guarantees given in lieu and in place of security deposits in connection with land acquisition commitments. (d) These other guarantees principally cover acquisitions of land and matters related to roads and infrastructure.

Commitments related to capital expenditures, purchases and rentals These commitments were given by the Kaufman & Broad group.

Payments due by maturity

Nov. 30, Less than 1 to 5 More than Nov. 30, (in € thousands) 2013 one year years 5 years 2012

Commitments for leases...... 49,015 8,103 23,601 17,311 50,324

Capital expenditure commitments

Total ...... 49,015 8,103 23,601 17,311 50,324

This table includes the commitment given by the Kaufman & Broad group in connection with a 9-year lease of its offices in a real estate transaction initiated by the group beginning with the delivery of the building envisages for June 2014, for annual rental payments of €3.2 million, i.e., a total of €28.6 million. However, the group reserves the right to find another lessee, who would bring this commitment to an end.

Commitments for leases The table below shows, as of November 30, 2013, the minimum future rents on leases not subject to any termination:

November 30, November 30, (in € thousands) 2013 2012

2013 ...... 0 6,902 2014 ...... 8,103 7,733 2015 ...... 8,730 7,866 2016 ...... 5,962 5,042 2017 ...... 4,649 4,222 2018 ...... 4,260 3,765 2019 and beyond ...... 17,311 14,794

Total minimum future rents ...... 49,015 50,324 The rent expense recognized on the income statement as of November 30, 2012 for operating leases amounted to €5.7 million (€6.4 million as of November 30, 2012). The group’s finance leasing agreements are capitalized.

27.2 COMMITMENTS RECEIVED Work guarantees All items detailed below are related to the normal course of operations of the Kaufman & Broad group.

(in € thousands) 11/30/2013 11/30/2012

Guarantees on work contracts ...... 105,540 108,929

Unutilized syndicated lines of credit

F-40

(in € thousands) 11/30/2013 Nov. 30, 2012

Unutilized RCF line(a) ...... 52,900 52,900

(a) The amount of this line maturing in July 2014 was reduced in fiscal year 2012 by €50 million as part of Supplemental Agreement No. 8 to the Senior Facilities Agreement signed in October 2012.

Pledges and liens Under a memorandum of understanding, Kaufman & Broad SA stood surety for one of its partners, limited to €4 million excluding VAT and the provision of a first-demand bank guarantee, in respect of commitments made by two of its subsidiaries in the aforementioned memorandum of understanding. In exchange, this partner’s main shareholder stood surety for its subsidiary’s commitments to joint ventures for the same amount plus its own provision of a first-demand bank guarantee.

27.3 CONTINGENT ASSETS AND LIABILITIES The dispute that originated in 1996 concerning the Roissy Park development and in which a subsidiary of Kaufman & Broad SA had been added as a party in the faulty workmanship and various defects claim. There was a ruling in January 2013, which was immediately appealed, ordering the subsidiary to pay a sum of €6.6 million plus various discounts or interest, with security being granted for the most part by manufacturers and insurers. As it stands, this subsidiary is financially liable in the amount of €0.9 million, of which €0.3 million was provisioned as of November 30, 2013. This subsidiary also prefunded in execution of the judgment an amount of €2.0 million which it incurred recovery from the called collateral. The Kaufman & Broad group considers the risk of a final judgment low. The concession agreement granted to Kaufman & Broad on a real estate project launched by the group in 2012 is being challenged. Procedures related to this challenge are in progress at the balance sheet date. The gross margin on sales related to the transaction, which was concluded under conditions subsequent and precedent, was recognized on November 30, 2012 at €3.7 million, of which €2.5 million euros in fiscal year 2013. Since the risk of cancellation of the concession contract is considered low, no provision has been recorded in the accounts. On November 30, 2013, the Kaufman & Broad group segregated in the form of a pledged SICAV funds in the amount of €18.4 million corresponding to the calls for funds paid by purchasers who signed the deeds of sale subject to a condition subsequent, at the balance of the land price, which was paid for in kind, and potential costs to resolve these sales.

NOTE 28—EXPOSURE TO MARKET RISKS AND FINANCIAL INSTRUMENTS 28.1 MANAGEMENT OF INTEREST RATE RISK The policy for managing interest rate risk is intended to limit and control fluctuations in interest rates and their impact on net earnings and cash flow, so that the total cost of the debt remains acceptable. To achieve this objective, the group hedges its variable-rate loan interest flows with interest-rate swaps. Swaps are derivatives serving to hedge cash flows. They are marked to market on the balance sheet. The group applies hedge accounting. Under the Senior Facilities Agreement, the group also agreed to keep hedges in place in the amount of 50% of borrowings. Interest rate hedges are made by way of instruments listed on organized markets or over-the-counter with high-quality counterparties. The following table contains details of the portfolio of one-month Euribor lender/fixed-rate borrower swaps as of November 30, 2013.

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Market value Market value as of as of Notional November 30, November 30, amount 2013 as a% 2012 as a% Type (in € millions) Fixed rate Expiration date Type of face value of face amount

EUR 1M fixe 0.202 -0.06 -0.10 d rate swap 50 % Nov. 30, 2012 – Nov. 30, 2014 Hedge % % EUR 1M fixed 0.218 -0.08 -0.14 rate swap ... 50 % Nov. 30, 2012 – Nov. 30. 2014 Hedge % % EUR 1M fixed 0.240 -0.10 -0.18 rate swap ... 50 % Nov. 30, 2012 – Nov. 30, 2014 Hedge % %

Total ...... 150

The fair value of these derivatives is provided by a specialized company outside the group (level 2 valuation as defined by IFRS 7). The hedging reserve in equity at 30 November 2013 amounted to—€ 79 thousand.

The exposure of the group’s net debt as of November 30, 2013 was:

Type of instrument Variable/fixed Less than one year 1 to 5 years More than 5 years

RCF + Senior B and C ...... variable 18,708 491,339

Other financial liabilities ...... fixed 586

Credit facilities...... variable 512

Financial liabilities ...... — 19,806 491,339 —

Bank balances and cash on hand ...... variable 116,352

Short-term investments ...... variable 71,572

Order balances ...... variable 2,397

Financial assets ...... — 190,321 — —

Net position before management ...... -170,516 491,339 —

Swap ...... -150,000

Off-Balance sheet items ...... -150,000 — —

Net position after management ...... -320,516 491,339 —

The exposure of the group’s net debt as of November 30, 2012 was:

Type of instrument Variable / fixed Less than one year 1 to 5 years More than 5 years

Senior B and C ...... variable 489,663

Credit facilities...... variable 454

Financial liabilities ...... 454 489,663 0

Bank balances and cash on hand ...... variable 88,626

Short-term investments ...... variable 63,324

Order balances ...... variable 3,837

Financial assets ...... 155,787 0 0

Net position before management ...... -155,333 489,663 0

Swap ...... 0 -150,000

Off-Balance sheet items ...... 0 -150,000 0

Net position after management ...... -155,333 339,663 0

28.2 MANAGEMENT OF CURRENCY RISK F-42

The group does not have exposure to foreign exchange risk as all of its assets and liabilities and its flows are denominated in euros.

28.3 MANAGEMENT OF EQUITY RISK The company has only limited exposure to equity risk because the marketable securities held by Financière Gaillon 8 are money-market SICAVs rated investment grade and distributed by recognized institutions.

28.4 MANAGEMENT OF COUNTERPARTY RISK The counterparty risks primarily concern Kaufman & Broad suppliers and subcontractors, Kaufman & Broad customers and banking counterparties. Because of the large number of suppliers and subcontractors, their insolvency is unlikely to have any material impact on operations. The group considers that the counterparty risk on accounts receivable is very limited because of the large number of clients and the fact that sales are signed exclusively before a civil-law notary, generally after the financing for the property acquisition has been secured. Customer-related credit risks are managed by the agencies under the oversight of corporate headquarters. Due to the nature of its business, the group’s exposure to client default risks is low. Aging receivables are reviewed monthly. The group invests its cash and cash equivalents and its investment securities with top-tier financial institutions. The group also enters into interest rate agreements with leading financial institutions.

28.5 MANAGEMENT OF LIQUIDITY RISK The table below shows the group’s contractual obligations for payment of interest, repayment of financial debt, derivatives excluded, and the derivatives with their positive or negative fair values. Interest payments at variable rates were calculated based on the latest interest rate known as of November 30, 2013 and November 30, 2012.

Less than one year 1 to 5 years More than 5 years Book value (in € thousands) Nov. 30, 2013 Interest Repayments Interest Repayments Interest Repayments

Borrowings and financial

liabilities Syndicated lines of

credit ...... 510,047 32,443 18,708 41,537 491,339 Other financial

liabilities ...... 586 — 586 Credit facilities and

other borrowings .. 512 16 512

Total ...... 511,145 32,459 19,806 41,537 491,339

Less than one year 1 to 5 years More than 5 years Book value (in € thousands) Nov. 30, 2012 Interest Repayments Interest Repayments Interest Repayments

Borrowings and financial

liabilities Syndicated lines of

credit ...... 489,663 31,103 — 68,430 489,663 —

Credit facilities and 458 — 458 F-43

Less than one year 1 to 5 years More than 5 years Book value (in € thousands) Nov. 30, 2013 Interest Repayments Interest Repayments Interest Repayments

other borrowings ..

Total ...... 490,121 31,103 458 68,430 489,663 — —

The interest flows are paid monthly and take into account the swaps taken out in November 2012 and classified as hedging instruments. Details on the syndicated credit are provided in Note 23.

28.6 BOOK VALUE OF FINANCIAL INSTRUMENTS BY IAS 39 CATEGORIES We detail below the main methods and assumptions used in order to determine the fair market value of financial instruments.

LOANS AND RECEIVABLES, FINANCIAL ASSETS AVAILABLE FOR SALE The group believes that the balance sheet value of cash, accounts receivable and accounts payable is the value most representative of their market value because of the high level of liquidity of these items.

DEBT AT AMORTIZED COST Non-current financial liabilities are variable-rate. The group believes that the fair value is close to book value.

Fair value Fair value Assets Debt at Book through profit through available for Loans and amortized November 30, 2013 value and loss equity sale receivables cost

Financial assets

Accounts receivable ...... 291,778 291,778

Cash and cash equivalents ...... 190,321 190,321

Current tax ...... 16,611 16,611

Other current receivables ...... 139,929 139,329 Other non-current financial

assets ...... 20,139 20,139

Total financial assets ...... 658,778 190,321 0 0 467,857 0

Financial liabilities

Loans and financial debts ...... 550,766 120 550,646

Account payables ...... 565,600 565,600

Other current liabilities ...... 94,086 94,086

Total financial liabilities ...... 1,210,452 0 120 0 0 1,210,332

Fair value Fair value Assets Debt at Book through profit through available for Loans and amortized November 30, 2012 value and loss equity sale receivables cost

Financial assets

Accounts receivable ...... 268,189 268,189

Cash and cash equivalents ...... 155,787 155,787

Current tax ...... 34,601 34,601

Other current receivables ...... 145,667 145,667 Other non-current financial

assets ...... 1,262 1,262

Total financial assets ...... 605,506 155,787 0 0 449,719 0

Financial liabilities F-44

Fair value Fair value Assets Debt at Book through profit through available for Loans and amortized November 30, 2012 value and loss equity sale receivables cost

Loans and financial debts ...... 522,806 212 522,594

Account payables ...... 488,976 488,976

Other current liabilities ...... 113,413 113,413

Total financial liabilities ...... 1,125,195 0 212 0 0 1,124,983

NOTE 29—RELATED-PARTY TRANSACTIONS The consolidated financial statements include the financial statements of Financière Gaillon 8, of Kaufman & Broad SA and its subsidiaries. Parent company and entity with significant influence over the group The Financière Gaillon 8 group is controlled by the Luxembourg company Financière Daunou 10, an investment vehicle for funds managed by PAI partners. As of November 30, 2008, Financière Daunou 10 had disbursed to Financière Gaillon 8 funds in the amount of €284.6 million under a shareholder loan in application of a shareholder loan agreement dated July 9, 2007, amended by a supplemental agreement dated September 19, 2007. On June 30, 2009, Financière Gaillon 8 (the company) had an equity increase through the capitalization of receivables from the company held by Financière Daunou 10 S.à.r.l. under the various shareholder loans that it has granted to the company, which resulted in the issue of ordinary shares of the company at its profit.

Concurrently with these transactions involving the company’s capital, a shareholder’s agreement was signed on June 30, 2009 between the company, PAI Partners, Financière Daunou 10 S.à r.l., Calyon and ML IBK Positions, Inc., aimed at organizing the relationship among the financial shareholders within the company. A shareholder loan agreement was further signed between the company and Financière Daunou 10 S.à r.l. under which the latter disbursed to the company a principal amount of €4,900,000. The transactions conducted between Financière Gaillon 8 and Kaufman & Broad SA were authorized by the Board of Directors of the two companies. They pertain to a Service Agreement set up in March 2008. No other entity exercises significant influence over the Financière Gaillon 8 group. Relationships with the senior manager of the Kaufman & Broad group All ownership interests held by certain corporate officers and employees of the Kaufman & Broad group in the company are combined within Financière de Neuilly. On June 30, 2009, Financière Daunou 10 S.à r.l. tendered to Financière de Neuilly the ownership interest it held in the company as reserve with a view to allocating it to the new managers; it also transferred to Financière de Neuilly, 210,473,105 company shares. Considering the company’s capital restructuring transactions and the restructuring of its shareholding structure, a shareholders’ agreement superseding the shareholders’ agreement signed in 2007 was signed on June 30, 2009, between the company, Financière Daunou 10 S.à r.l., Financière de Neuilly, and the employers and managers of the Kaufman & Broad group. On November 28, 2013, the Board of Directors authorized the sale of 22,806 Kaufman & Broad shares to RKCI, the company with individual ownership owned by Nordine Hashemi, Managing Director, then Chief Executive Officer of Kaufman & Broad as of January 24, 2014, for a price €400,016 payable half in cash and half by seller credit. This sale was effective December 4, 2013. In addition, the Board granted to Nordine Hashemi (with right of substitution) and RKCI the right to invest up to €400,000 each in Kaufman & Broad shares in 2014 (with payment half in cash and half credit for seller the balance). In fiscal year 2013, the group did not grant any loans to the members of its administrative and management bodies.

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COMPENSATION OF MEMBERS OF THE GOVERNING AND MANAGEMENT BODIES The table below shows the fiscal year 2013 Kaufman & Broad compensation of persons who at the fiscal year end or during the fiscal year ended November 30, 2013 were members of the administrative and management bodies of the Kaufman & Broad group.

November 30, November 30, (in € thousands) 2013 2012

Short-term benefits other than employer contributions(a) ...... 4,627 4,264 Short-term benefits: employer contributions ...... 2,118 34 Post-employment benefits—balance sheet impact(b) ...... 177 NA Other long-term benefits(c) ...... NA NA Retirement indemnities ...... 613 NA Directors’ fees(d) ...... 191 208 Share-based payments...... 0 0 Stock option awards (number) ...... 0 0 Bonus share awards (number) ...... 7,000 0

(a) Include gross salaries, compensation, bonuses, incentives, profit-sharing and in-kind benefits paid for the fiscal year. Compensation relates to members of the Management Committee. (b) Services rendered representing a retirement benefit. (c) Other compensation vested but due in the long term. (d) Compensation paid only to non-executive corporate officers.

RELATED PARTY TRANSACTIONS Related party agreements authorized or amended since the 2012 fiscal year-end: 1. Service agreement with RKCI On November 29, 2013, the company signed an assistance and consulting agreement with RKCI, a company controlled by Mr. Nordine Hashemi, under the organization of the eventual withdrawal by Financière Gaillon 8 from the capital of Kaufman & Broad and the possible implementation of a process to sell all or part of its investment in Kaufman & Broad SA. Depending on whether the withdrawal takes the form of a disposal of Kaufman & Broad shares or disposal of Financière Gaillon 8 shares, the recipient of the services will be the company or Financière Daunou 10, controlling shareholder of the company. The signature of this agreement was authorized by the Board of Directors on November 28, 2013.

Related-party transactions approved during prior fiscal years that continued in fiscal year 2013 2. Senior Facilities Agreement To finance the acquisition of Kaufman & Broad SA and to enable the company, Kaufman & Broad SA and its subsidiaries, among other things (i) to refinance their existing debt, (ii) to meet their working capital requirements and general operating requirements and (iii) to finance the investments and acquisitions of the Kaufman & Broad group, senior facilities were disbursed to the company and to Kaufman & Broad SA under a “Senior Facilities Agreement” (drafted in English) signed on July 9, 2007 (as amended by supplemental agreement of July 27, 2007), by, inter alia, the company as the original borrower and original joint surety, Calyon and Merrill Lynch International as the mandated legal arrangers, Calyon as agent and a group of financial institutions (the “Senior Facilities Agreement”). It should be noted that Kaufman & Broad S.A. became party to the Senior Facilities Agreement as additional borrower and additional joint surety by accession letter dated July 10, 2007 and Kaufman and Broad Homes S.A.S. became party to the Senior Facilities Agreement as additional joint surety by accession letter dated November 9, 2007. Under the Senior Facilities Agreement, the Banks named in said Agreements granted to the company: (a) a term credit facility B1 (Facility B1) for up to €43.10 million; (b) a term credit facility B2 (Facility B2) for up to €146.90 million; (c) a term credit facility C1 (Facility C1) for up to €43.10 million; (d) a term credit facility C2 (Facility C2) for up to

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€146.90 million; (d) a term bridge facility (Bridge Facility 1) for up to €26.40 million, (e) a term bridge facility (Bridge Facility 2) for up to €26.10 million and (f) a revolving credit facility (Revolving Facility) for up to €200 million. The Senior Facilities Agreement had three supplemental agreements signed during the fiscal year ended November 30, 2009:

2.1. Supplemental Agreement No. 2 to the Senior Facilities Agreement signed on January 23, 2009: The purpose of Supplemental Agreement 2 to the Senior Facilities Agreement was to reflect the terms and conditions of the agreement signed by Financière Gaillon 8, Kaufman & Broad S.A. and the senior lenders on December 26, 2008, under the name “Heads of Agreement”, relative to the credit lines granted to the Kaufman & Broad S.A. group. The signature of that Supplemental Agreement was authorized by the company’s Board of Directors on January 23, 2009.

2.2. Supplemental Agreement No. 3 to the Senior Facilities Agreement signed on June 30, 2009: At the time of signature of the aforementioned Supplemental Agreement No. 2, no global agreement had been found relative to the lines of credit granted to the company. The purpose of Supplemental Agreement No. 3 to the Senior Credit Agreement was to reflect the terms and conditions of a new agreement including Financière Gaillon 8, Kaufman & Broad SA and senior lenders entitled “Heads of Agreement” dated May 27, 2009, relative to lines of credit granted to the company. The signature of that Supplemental Agreement was authorized by the company’s Board of Directors on June 30, 2009.

2.3. Supplemental Agreement No. 4 to the Senior Facilities Agreement signed on November 25, 2009: In the context of the relaunch of the Kaufman & Broad group’s business in the second half of 2009 and in anticipation of a continued trend in that sense in the following months, a Supplemental Agreement No. 4 to the Senior Facilities Agreement was signed by the company; the purpose of that Supplemental Agreement was, among other things: • replacement of the cash-flow hedging with a minimum cash flow amount, to be tested quarterly as from May 31, 2010; • partial early repayments of the loans by Kaufman & Broad SA; • alignment of interest rate hedging under the Senior Facilities Agreement to the new market conditions. In that respect, it is provided for Kaufman & Broad SA’s option to cancel the existing swaps and to set up new interest- rate swaps; • amendment to the terms of the clean-down obligation of Kaufman & Broad SA following the cancellation in its entirety of the liquidity and acquisition line. The signature of that Supplemental Agreement was authorized by the company’s Board of Directors on November 24, 2009.

2.4. Supplemental Agreement No. 5 to the Senior Facilities Agreement signed on March 10, 2010 Supplemental Agreement No. 5, signed on March 10, 2010, modified the financial definitions of EBITDA, cash flow and net cash interest stipulated by the Senior Facilities Agreement in order to neutralize the effects of IAS 23 (Borrowing Costs) on these ratios and to ensure for the financial parties the same protection they received under the contract before the application of this standard. The signature of this Supplemental Agreement to the Senior Facilities Agreements was authorized by the Board of Directors on 18 February 2010.

2.5. Supplemental Agreements No. 6 and No. 7 to the Senior Facilities Agreement signed on July 25, 2011 Supplemental Agreement No. 6, signed on July 25, 2011, provides that Kaufman & Broad SA may start repaying a portion of its fixed term debt under the Senior Facilities Agreement in amounts less than the face amount of said debt, this discount taking the form of waivers of receivables granted by the relevant lenders, in accordance with specific terms and

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conditions, in particular that the principal amount could not exceed €70 million and the repayments needed to take place on one or more occasions by February 29, 2012 at the latest. Supplemental Agreement No. 7, signed on July 25, 2011, provides that Kaufman & Broad SA may cancel all or part of the commitments of certain lenders under the revolving line of credit who wished to withdraw from said line prior to its final expiration, in exchange for payment by these lenders of a cancellation commission in accordance with specific terms and conditions, in particular that the principal amount could not exceed €75 million and the cancellations could be made on one or more occasions without limitation and would need to take place at the latest by February 29, 2012. The signing of Supplemental Agreements No. 6 and No. 7 to the Senior Facilities Agreement was authorized by the Board of Directors on 21 July 2011.

2.6. Supplemental Agreement No. 8 to the Senior Facilities Agreement signed on October 17, 2012 Supplemental Agreement No. 8, signed on October 17, 2012 provides that Financière Gaillon 8 may repay a portion of its term debt under the Senior Facilities Agreement at amounts lower than the nominal value of the said debt, and this discount will take the form of debt waivers granted by the lenders concerned, under specific terms and conditions, in particular that the amount paid would be financed through a dividend distribution that Kaufman & Broad would make by 28 February 2013, the total net dividend applied in repayment of the senior debt through a reverse bidding procedure could not exceed €44 million and repayments should be made in one or more installments at the latest by February 28, 2013. The signing of Supplemental Agreement No. 8 to the Senior Facilities Agreement was authorized by the Board of Directors on October 17, 2012. The various effects on the consolidated financial statements are specified in Note 23.

3. “Managers” Shareholders’ Agreement of June 30, 2009 between the company, Financière Daunou 10 S.à.r.l., Financière de Neuilly and the partners of Financière de Neuilly Pursuant to the agreement on the amendments to be made to the shareholders’ agreement of the company signed on December 3, 2007, on June 30, 2009, the company signed with Financière Daunou 10 S.à r.l., Financière de Neuilly and the partners of Financière de Neuilly a shareholders’ agreement that incorporates the amendments that the direct and indirect shareholders of the company agreed to make to the company’s shareholders’ agreement of December 3, 2007, to take into account the planned restructuring. The purpose of that shareholders’ agreement which supersedes the Shareholders’ Agreement signed on December 3, 2007 is to organize the relationships within the company between Financière Daunou 10 and the group’s managers and Financière de Neuilly, and to stipulate and organize the circumstances and conditions under which the managers of the group will have the right or the obligation to sell some of the shares issued by Kaufman & Broad, which they hold. The signature of that shareholders’ agreement was authorized by the Board of Directors on June 30, 2009.

4. Shareholder’s loan agreement of June 30, 2009 between Financière Daunou 10 S.à.r.l., as lender and the company, as borrower Under a shareholder loan agreement dated June 30, 2009, Financière Daunou 10 S.à r.l. disbursed to the company a principal amount of €4,900,000 in the form of a shareholder loan, the purpose of which was to enable the company to finance its existing liquidity commitments, all the costs and fees related to the restructuring and its operating costs and current expenses. Said loan bears no interest and will be repayable as from the date of transfer of all the Kaufman & Broad SA shares by the company and will be subordinated to the payment of all sums due by the company under the senior debt. The signature of this agreement was authorized by the Board of Directors on June 30, 2009.

5. Agreement relative to the application of Article L.225-248 of the French Commercial Code to the company On June 30, 2009, the company signed an agreement with PAI Partners, Financière Daunou 10 S.à.r.l., Financière de Neuilly, the partners of Financière de Neuilly, the company’s senior lenders, Calyon and Merrill Lynch International Limited, London Subsidiary as mezzanine creditors, and Calyon and ML IBK Positions, Inc. as holders of preferred company shares,

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in relation to the application of Article L.225-248 of the French Commercial Code and to the commitments made in relation thereto by the parties to that agreement. The signature of that agreement was authorized by the Board of Directors on June 30, 2009.

6. Supplemental Agreement No. 1 and No. 2 to the subordination agreement of January 23, 2009 and June 30, 2009, respectively Under the Senior Facilities Agreement, the company signed on July 9, 2007 a subordination agreement among the senior lenders, Financière Daunou 10 S.à r.l. Calyon as senior credit agent, Merrill Lynch International Bank Limited, London subsidiary as mezzanine credit agent, the mezzanine lenders (the “Subordination Agreement”), the purpose of which is, among other things, to manage the order and conditions of repayment of the sums borrowed. Kaufman & Broad S.A. became party to the Subordination Agreement as additional borrower and additional joint surety by accession instrument dated July 10, 2007 and Kaufman and Broad Homes S.A.S. became party to the Subordination Agreement as additional joint surety by instrument dated November 9, 2007. The Subordination Agreement had two supplemental agreements signed during the fiscal year ended November 30, 2009:

6.2. Supplemental Agreement No. 1 to the Subordination Agreement signed on January 23, 2009: The signing of Supplemental Agreement No. 2 to the Senior Facilities Agreement and the aforementioned agreements relative to the financial restructuring of the company required the amendment of the Subordination Agreement. An amendment to that agreement was signed for that purpose on January 23, 2009.

In application of Articles L.225-38 and l.225-40 of the French Commercial Code, the signature of that agreement was authorized by the company’s Shareholders’ Meeting on June 30, 2009 since the Board members were unable to vote in the proceedings of the company’s Board of Directors on June 30, 2009.

6.3. Supplemental Agreement No. 2 to the Subordination Agreement signed on June 30, 2009: The signing of Supplemental Agreement No. 3 to the Senior Facilities Agreement and the aforementioned agreements relative to the financial restructuring of the company required the amendment of the Subordination Agreement. An amendment to that agreement was signed for that purpose on June 30, 2009. In application of Articles L.225-38 and l.225-40 of the French Commercial Code, the signature of that agreement was authorized by the company’s Shareholders’ Meeting on June 30, 2009 since the Board members were unable to vote in the proceedings of the company’s Board of Directors on June 30, 2009.

7. Shareholders’ Agreement of the Mezzanine lenders of June 30, 2009 signed by the company, PAI Partners, Financière Daunou 10 S.à r.l., Calyon and ML IBK Positions Inc. The mezzanine lenders, Calyon and ML IBK Positions Inc., became shareholders of the company at the completion of their subscription to a capital increase of the company carried out on June 30, 2009, since the subscription took place through offset of the company’s debt to them under a mezzanine credit agreement dated July 27, 2007, signed between the company, Calyon and Merrill Lynch International Bank. At the completion of that subscription, Calyon and ML IBK Positions, Inc. signed with the company, Financière Daunou 10 S.à.r.l. and PAI Partners a shareholders’ agreement the purpose of which is to organize the relationships between the parties within the company and, in particular, to set the rules applicable to (i) transfers of the Kaufman & Broad SA shares held by the company, (ii) transfer of preferred shares held by the Mezzanine lenders. The signature of that shareholders’ agreement was authorized by the Board of Directors on June 30, 2009.

NOTE 30—POST-CLOSING EVENTS On December 4, 2013, the company sold 22,806 Kaufman & Broad shares to RKCI, the company individually owned by Nordine Hashemi, Managing Director, then Chief Executive Officer of Kaufman & Broad on January 24, 2014 for a price of €400,016, half payable in cash and half by seller credit.

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Under a liquidity agreement signed on July 17, 2008 respecting the purchase of 24,724 shares with some Kaufman & Broad SA managers, the company bought back: • 7,104 shares at a price of €168,000 corresponding to a price of €23.70 per share on December 13, 2013, • 15,026 shares at a price of €356,000 corresponding to a price of €23.70 per share on January 27, 2014. The number of treasury shares held at January 31, 2014 amounted to 18,984,125 (excluding 1,000 shares lent to Kaufman & Broad SA directors), representing 87.95% of the capital of Kaufman & Broad SA.

NOTE 31—INFORMATION ABOUT THE KAUFMAN & BROAD GROUP The consolidated financial statements of Kaufman & Broad as of November 30, 2013 were approved by the Board of Directors at its meeting of February 20, 2014 as presented below:

STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME Consolidated Income Statement

November 30, November 30, (in € thousands) Note 2013 2012

Revenues ...... (4) 1,025,954 1,030,046 Cost of sales ...... -829,185 -827,912

Gross margin ...... 196,769 202,134

Selling expenses...... (5) -30,619 -29,242 General and administrative expenses ...... (6) -65,058 -62,935 Technical and customer service expenses ...... (7) -18,052 -16,301 Other expenses ...... (8) -10,180 -9,326 Other income ...... (8) 3,170 951

Current operating profit/(loss) ...... 76,030 85,281

Other non-recurring income ...... (9) 5 1,538 Other non-recurring expenses ...... (9) -6 -10

Operating profit/(loss) 76,029 86,809

Financial expenses ...... -3,551 -5,918 Financial income ...... 744 1,797

Cost of net financial debt ...... (11) -2,807 -4,121

Other interest expense ...... (12) — -1,109 Other financial income...... (12) — 1,000

Pre-tax income of consolidated companies ...... 73,222 82,579

Income tax ...... (13) -21,961 -25,814

Net income of consolidated companies ...... 51,261 56,765

Share of income (loss) of equity affiliates and joint ventures ...... 642 -61

Income (loss) attributable to shareholders ...... 51,903 56,704

Income from minority interests ...... (22.3) 11,055 9,080 Attributable net income ...... 40,848 47,624 Average number of shares outstanding ...... (14) 20,915,865 21,135,155

Earnings per share ...... (14) € 1.95 € 2.25

Diluted earnings per share ...... (14) € 1.95 € 2.25

Consolidated net comprehensive income

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November 30, November 30, (in € thousands) 2013 2012

Income (loss) attributable to shareholders ...... 51,903 56,704

Change in gross value of derivative instruments ...... 91 2,271 Tax impact on derivative instruments ...... -31 -785

Gains and losses recognized directly in shareholders’ equity recyclable as income ...... 60 1,486

Change in actuarial gains and losses ...... -972 -1,566 Tax effect on actuarial gains and losses ...... 335 539

Total gains and losses recognized directly in equity not recyclable as income . -637 -1,027

Consolidated net comprehensive income ...... 51,326 57,163

Attributable ...... 40,271 48,084 Minority interests ...... 11,055 9,080

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STATEMENT OF CONSOLIDATED FINANCIAL POSITION Assets

November 30, November 30, (in € thousands) Note 2013 2012

Goodwill ...... (15) 68,511 68,511 Intangible assets ...... (16.1) 85,376 84,897 Property, plant and equipment ...... (16.2) 4,713 5,604 Equity affiliates and joint ventures ...... (17) 8,181 4,373 Other non-current financial assets ...... (17) 20,139 1,262

Non-current assets ...... 186,920 164,647

Inventories ...... (18) 324,963 284,469 Accounts receivable ...... (19) 291,778 268,189 Other receivables ...... (19) 136,793 143,161 Other financial receivables ...... (19.4) — 2,379 Current tax ...... 16,611 34,601 Cash and cash equivalents ...... (21) 188,258 153,763 Prepaid expenses ...... (19) 867 1,008

Current assets...... 959,270 887,570

Total Assets ...... 1,146,190 1,052,217

Equity and Liabilities

November 30, November 30, (in € thousands) Note 2013 2012

Capital stock ...... (22) 5,612 5,612 Reserves related to capital ...... 979 979 Attributable reserves ...... 153,154 156,886 Other reserves ...... -13,002 -12,177 Treasury shares ...... (22.1) -10,199 -9,778 Interim dividends ...... — -48,455 Attributable net income ...... 40,847 47,624

Attributable shareholders’ equity ...... 177,391 140,691

Minority interests ...... (22.3) 10,811 8,420

Shareholders’ equity ...... 188,202 149,111

Non-current provisions ...... (24) 33,422 24,510 Borrowings and other non-current financial liabilities ...... (25.1) 218,959 234,535 Deferred taxes ...... (20) 40,365 55,586

Non-current liabilities ...... 292,746 314,631

Current provisions ...... (24) 1,724 1,000 Other current financial liabilities ...... (25.1) 19,340 458 Accounts payable ...... (26) 550,233 473,624 Other payables ...... (26) 92,729 111,777 Deferred income ...... (26) 1,217 1,616

Current liabilities ...... 665,242 588,475

Total Liabilities & Shareholders’ Equity ...... 1,146,190 1,052,217

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SEGMENT REPORTING The segment information reported corresponds to the organization of the internal reports intended for group’s Management Committee, which is the major operational decision-maker.

INCOME BY OPERATING SEGMENT

At November 30, 2013 Île-de- (in € thousands) France West Southwest Southeast

Revenues ...... 432,139 63,343 162,791 253,418

Gross margin ...... 93,119 10,376 30,292 43,508

Selling expenses...... -12,452 -1,453 -4,988 -6,437 General and administrative expenses ...... -14,989 -2,961 -8,213 -8,961 Technical and customer service expenses ...... -7,809 -948 -2,908 -4,117 Other expenses ...... -1,124 -1,041 -1,399 -2,786 Other income ...... 565 62 458 134 Reallocation of portion of corporate reinvoicing ...... -11,206 -2,247 -6,256 -7,106

Current operating income ...... 46,107 1,789 6,986 14,235

Other non-recurring income and expenses ...... 10 — — -7

Operating income ...... 46,117 1,789 6,986 14,228

Cost of net financial debt and other financial income/expenses ...... 5,804 492 83 748 Reallocation of cost of net financial debt...... -3,805 -763 -2,124 -2,413

Pre-tax income of consolidated companies ...... 48,116 1,518 4,945 12,563

Income tax ...... -15,035 -316 -1,324 -3,237 Share of income (loss) of equity affiliates and joint ventures ...... 478 -34 9 -61

Income (loss) attributable to shareholders ...... 33,559 1,168 3,631 9,265

Attributable ...... 28,269 529 2,319 5,934 Minority interests ...... 5,290 639 1,312 3,331

At November 30, 2013 Rhône- Commercial Other Head (in € thousands) Alpes property Regions office Total

Revenues ...... 57,621 41,243 15,400 — 1,025,954

Gross margin ...... 13,821 3,927 1,725 — 196,768

Selling expenses...... -1,834 -54 -86 -3,315 -30,619 General and administrative expenses ...... -4,156 -1,583 -862 -23,332 -65,058 Technical and customer service expenses ...... -1,210 -187 -187 -694 -18,052 Other expenses ...... -845 230 273 -3,488 -10,180 Other income ...... 1,465 1 25 461 3,170 Reallocation of portion of corporate reinvoicing ...... -2,338 -911 -304 30,368 —

Current operating income ...... 4,902 1,423 584 — 76,030

Other non-recurring income and expenses ...... -3 — -1 -1

Operating profit/(loss) ...... 4,899 1,423 583 — 76,029

Cost of net financial debt and other financial income/expenses ...... 1,349 -532 -440 -10,311 -2,807 Reallocation of cost of net financial debt...... -794 -309 -103 10,311

Pre-tax income of consolidated companies ...... 5,454 582 40 — 73,222

Income tax ...... -1,825 -211 -16 — -21,961 Share of income (loss) of equity affiliates and joint ventures ...... 251 — — — 642 F-53

Income (loss) attributable to shareholders ...... 3,880 371 24 — 51,903

Attributable ...... 3,401 371 20 — 40,848

Minority interests ...... 479 — 4 11,055 The reinvoicing portions of corporate expenses (including the cost of net financial debt) are reallocated on the basis of the relative proportion of each segment in the group total. This share is assessed on the basis of the activity (measured in delivered Equivalent Housing Units—EHU) and the employees projected in the budget for the relevant fiscal year. In addition, the income tax is calculated on the basis of a theoretical tax for each of the segments based on their net income before taxes. The impacts related to the permanent differences included in the calculation of the income tax are reallocated using the key described above.

As of November 30, 2012 Île-de (in € thousands) -France West Southwest Southeast

Revenues ...... 460,288 56,703 151,545 256,149

Gross margin ...... 95,272 9,117 28,973 45,988

Selling expenses...... -11,275 -1,416 -4,661 -7,612 Administrative expenses ...... -13,040 -2,509 -7,346 -8,233 Technical and customer service expenses ...... -6,739 -901 -2,428 -3,891 Other expenses ...... -4,726 -1,313 -2,341 -3,355 Other income ...... 273 16 172 66 Reallocation of portion of corporate reinvoicing ...... -8,020 -1,592 -5,359 -6,019

Current operating income ...... 51,745 1,402 7,010 16,944

Other non-recurring income and expenses ...... 2 — 1,520 -14

Operating income ...... 51,747 1,402 8,530 16,930

Cost of net financial debt and other financial income/expenses ...... 9,280 1,116 1,192 1,818 Reallocation of cost of net financial debt...... -6,451 -1,213 -3,807 -4,454

Pre-tax income of consolidated companies ...... 54,576 1,305 5,915 14,294

Income tax ...... -18,016 -400 -1,843 -3,688 Share of income (loss) of equity affiliates and joint ventures ...... -100 98 -129 7

Income (loss) attributable to shareholders ...... 36,460 1,003 3,943 10,613

Attributable ...... 33,768 660 3,193 6,650 Minority interests ...... 2,692 343 750 3,963

As of November 30, 2012 Rhône Commercial Other Head (in € thousands) -Alpes property Regions office Total

Revenues ...... 90,507 5,692 9,162 — 1,030,046

Gross margin ...... 20,365 1,055 1,364 — 202,134

Selling expenses...... -1,940 -51 -75 -2,212 -29,242 Administrative expenses ...... -4,079 -1,127 -668 -25,933 -62,935 Technical and customer service expenses ...... -1,188 -278 -222 -654 -16,301 Other expenses ...... -1,156 -69 -289 3,923 -9,326 Other income ...... 115 0 19 290 951 Reallocation of portion of corporate reinvoicing ...... -2,850 -420 -326 24,586 —

Current operating income ...... 9,267 -890 -197 — 85,281

Other non-recurring income and expenses ...... -1 — 21 — 1,528

Operating income ...... 9,266 -890 -176 — 86,809

Cost of net financial debt and other fin. income/expenses ...... 1,884 190 -1,382 -18,328 -4,230 F-54

As of November 30, 2012 Rhône Commercial Other Head (in € thousands) -Alpes property Regions office Total

Reallocation of cost of net financial debt...... -1,897 -249 -257 18,328 —

Pre-tax income of consolidated companies ...... 9,253 -949 -1,815 — 82,579

Income tax ...... -2,803 320 618 -2 -25,814 Share of income (loss) of equity affiliates and joint ventures ...... 58 — -1 6 -61

Income (loss) attributable to shareholders ...... 6,508 -629 -1,198 4 56,704

Attributable ...... 5,176 -629 -1,198 4 47,624 Minority interests ...... 1,332 — — — 9,080

BREAKDOWN BY OPERATING SEGMENT OF INVENTORY, DEBT AND WORKING CAPITAL REQUIREMENTS

As of November 30, 2013 (in € thousands) Île-de-France West Southwest Southeast

Inventories ...... 93,850 20,392 112,849 82,252 Accounts receivable ...... 96,011 18,597 79,449 45,878 Other ...... -206,336 -26,259 -121,386 -87,099

Working Capital Requirements...... -16,475 12,730 70,912 41,031

As of November 30, 2013 Commercial (in € thousands) Rhône-Alpes property Other Regions Head Office Total

Inventories ...... 9,716 1,610 4,293 — 324,962 Accounts receivable ...... 10,959 37,752 2,993 139 291,778 Other ...... -27,762 -20,830 -10,142 9,908 -489,906

Working Capital Requirements...... -7,087 18,532 -2,856 10,047 126,834

As of November 30, 2012 (in € thousands) Île-de-France West Southwest Southeast

Inventories ...... 59,665 23,835 91,301 97,022 Accounts receivable ...... 102,458 18,374 59,291 59,873 Other ...... -169,270 -23,246 -89,899 -93,611

Working Capital Requirements...... -7,156 18,963 60,693 63,284

As of November 30, 2012 Commercial (in € thousands) Rhône-Alpes property Other Regions Head office Total

Inventories ...... 6,942 2,239 3,474 — 284,469 Accounts receivable ...... 8,262 18,946 841 126 268,189 Other ...... -30,892 -3,288 -9,428 11,408 -408,225

Working Capital Requirements...... -15,688 17,897 -5,113 11,534 144,413

F-55

Financière Gaillon 8 Year ended November 30, 2012

Statutory auditors’ report on the consolidated financial statements

ERNST & YOUNG et Autres

F-56

Financière Gaillon 8 Year ended November 30, 2012

Statutory auditors’ report on the consolidated financial statements

To the Shareholders, In compliance with the assignment entrusted to us by your articles of association, we hereby report to you, for the year ended November 30, 2012, on: • the audit of the accompanying consolidated financial statements of Financière Gaillon 8; • the justification of our assessments; • the specific verification required by law. These consolidated financial statements have been approved by the board of directors. Our role is to express an opinion on these consolidated financial statements based on our audit.

In our opinion, the consolidated financial statements give a true and fair view of the assets and liabilities and of the financial position of the Group as at November 30, 2012 and of the results of its operations for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union.

III. Specific verification As required by law we have also verified in accordance with professional standards applicable in France the information presented in the Group’s management report.

We have no matters to report as to its fair presentation and its consistency with the consolidated financial statements. Paris-La Défense, April 26, 2013 F-57

The statutory auditors ERNST & YOUNG et Autres French original signed by

Gilles Cohen

F-58

FINANCIÈRE GAILLON 8 SA STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME

(in € thousands) Note Nov. 30, 2012 Nov. 30, 2011

Revenues ...... 4 1,030,046 1,044,255 Cost of sales ...... -830,896 -847,278

Gross margin ...... 199,150 196,977

Selling expenses...... 5 -29,242 -27,375 Administrative expenses ...... 6 -63,092 -62,233 Technical and customer service expenses ...... 7 -16,301 -15,634 Other expenses ...... 8 -9,326 -10,026 Other income ...... 8 951 1,395

Current operating profit ...... 82,140 83,104

Other non-recurring income ...... 9 1,538 1,734 Other non-recurring expenses ...... 9 -10 -952

Operating income ...... 83,668 83,886

Financial expenses ...... -30,831 -41,857 Financial income ...... 1,799 3,619

Cost of net financial debt ...... 10 -29,032 -38,238

Other interest expense ...... 11 -1,699 -2,444 Other financial income...... 11 14,330 9,359

Pre-tax income of consolidated companies ...... 67,267 52,563

Income tax (expenses)/income ...... 12 -24,787 -26,707

Net income of consolidated companies ...... 42,480 25,856

Share of income (loss) of equity affiliates and joint ventures ...... -61 955

Income/loss from assets held for sale

Income (loss) attributable to shareholders ...... 42,419 26,811

Minority interests ...... 21.4 13,571 15,165 Income attributable to shareholders ...... 28,848 11,646

Number of shares ...... 131,366,109,921 1,366,109,921

Earnings per share ...... 13 0.021 0.009

Diluted earnings per share ...... 13 0.021 0.009

F-59

STATEMENT OF OTHER ITEMS OF COMPREHENSIVE INCOME

(in € thousands) Nov. 30, 2012 Nov. 30, 2011

Income (loss) attributable to shareholders ...... 42,419 26,811 Change in fair value of derivative instruments, gross ...... 2,271 1,192 Tax impact on hedging instruments ...... -785 -410 Deferral of fair value of swaps unwound at the end of 2009 ...... — 3,560 Tax impact on swaps unwound at the end of 2009 ...... — -581 Net on derivative instruments ...... 1,486 3,761 Actuarial gains and losses for the period ...... -1,579 -461 Tax impact on actuarial gains and losses for the period ...... 543 157 Net on actuarial gains and losses ...... -1,036 -304

Total gains and losses recognized directly in equity ...... 450 3,457

Comprehensive net profit (loss) ...... 42,869 30,268

Attributable ...... 29,255 15,804

Minority interests ...... 13,614 14,464

For fiscal year 2012, the change in the fair value of derivative instruments includes the derivatives set up as of November 30, 2010 at Kaufman and Broad SA which totaled €2.3 million. For fiscal year 2011, the change in the fair value of derivative instruments includes the impact of the deferral of the cancellation adjustment of the swaps unwound at the end of 2009 for a total amount of €3.5 million, (impact in the amount of €1.8 million for Kaufman and Broad SA and in the amount of €1.7 million for Financière Gaillon 8). The derivatives set up as of November 30, 2010 at Kaufman and Broad SA totaled €1.2 million.

F-60

STATEMENT OF CONSOLIDATED FINANCIAL POSITION

(in € thousands) Note Nov. 30, 2012 Nov. 30, 2011

Goodwill ...... 14 144,370 144,370 Intangible assets ...... 15.1 84,761 82,874 Property, plant and equipment ...... 15.2 5,604 5,883 Equity affiliates and joint ventures ...... 16 4,373 3,473 Other non-current assets ...... 18 2,520 2,520 Other non-current financial assets ...... 16 1,262 2,551

Non-current assets ...... 242,890 241,671

Inventories ...... 17 285,798 239,869 Accounts receivable ...... 18 268,189 305,673 Other receivables ...... 18 143,147 141,235 Other financial receivables ...... 18 2,379 11,535 Current tax ...... 19 34,601 36,971 Cash and cash equivalents ...... 20 155,787 141,106 Prepaid expenses ...... 18 1,021 817

Current assets...... 890,922 877,206

TOTAL ASSETS ...... 1,133,812 1,118,877

(in € thousands) Note Nov. 30, 2012 Nov. 30, 2011

Capital stock ...... 21 37 37 Attributable reserves ...... -117,704 -127,554 Other reserves ...... -10,728 -8,765 Consolidated net income, group share ...... 28,848 11,645

Attributable shareholders’ equity ...... -99,547 -124,637

Minority interests ...... 21.4 21,687 24,987

Shareholders’ equity ...... -77,860 -99,650

Blocked current accounts ...... 24 4,900 4,900

Shareholders’ equity and blocked current accounts ...... -72,960 -94,750

Non-current provisions ...... 22 24,535 24,434 Borrowings and other non-current financial liabilities ...... 23 522,302 601,063 Other non-current liabilities ...... 25 15,286 15,286 Deferred taxes ...... 19 56,042 36,687

Non-current liabilities ...... 618,165 677,470

Current provisions ...... 1,000 — Other current financial liabilities ...... 25 504 21,052 Accounts payable ...... 25 473,690 409,730 Other payables ...... 25 111,797 104,017 Deferred income ...... 25 1,616 1,357

Current liabilities ...... 588,607 536,156

TOTAL EQUITY AND LIABILITIES ...... 1,133,812 1,118,877

F-61

STATEMENT OF CASH FLOWS

November 30, November 30, (in € thousands) Note 2012 2011

Current operating activities Consolidated net income ...... 42,420 26,810 Share of net income of associates and joint ventures ...... 16.1 61 -955

Income from assets held for sale ...... 16.1 Estimated income and expenses...... 12,441 10,089 Cash flow after cost of financial debt and tax ...... 54,922 35,944 Cost of financial debt ...... 10 29,031 38,238 Other interest expenses (income) ...... 11 -12,631 -6,915 Tax liability (income) ...... 12 24,787 26,707 Cash flow before cost of financial debt and tax ...... 96,109 93,974 Tax (paid)/received ...... -2,057 -2,540 Change in operating working capital requirements ...... 26 61,726 -20,994

Cash flow from operating activities (A) ...... 155,778 70,440

Investing activities Acquisition of tangible and intangible assets (net of disposals) ...... -3,960 -2,888 Acquisition of financial assets (net of disposals) ...... 10,622 5,029 Cash flow with equity affiliates and joint ventures ...... 16.1 -517 2,841 Change in scope of consolidation ...... -418

Cash flow from investing activities (B) ...... 6,145 4,564

Free cash-flow ...... 161,923 75,004

Financing activities Distributions to minority shareholders ...... -13,975 -13,292 Minority interest buybacks ...... -1,828 -3,315 Buyback of treasury shares, net of resales ...... -6,392 -2,386

Decrease in quasi-equity ......

Change in other financial assets ...... Loan repayments ...... -125,124 -50,846 Net financial interests paid ...... 77 -5,121

Cash flow from financing activities (C)...... -147,242 -74,960

Increase (decrease) in cash (A + B + C) ...... 14,681 44

Cash and cash equivalents at beginning of the period ...... 141,106 141,062

Cash and cash equivalents at the end of the period ...... 155,787 141,106

Increase (decrease) in cash ...... 14,681 44

Cash and cash equivalents ...... 20 155,787 141,106 Credit facilities...... 23.1 -454 -533 Interest accrued on cash and cash equivalents ...... 23.1 454 533

Cash and cash equivalents at the end of the period ...... 155,787 141,106

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STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

Number Reserves Attributable Total of shares related to Attributable Other Attributable shareholders’ Shareholding shareholders’ (in € thousands) outstanding Capital capital income reserves income equity interest equity

December 1, 2008 1,366,109,921 37 0 -95,776 -11,065 -29,524 -136,329 24,319 -112,010

Allocation of

profit or loss ... -29,524 29,524 0 0 Actuarial gains

(losses) ...... -272 -272 -32 -304 Change in hedging

reserves ...... 3,541 3,541 220 3,761

Other transactions . 889 889 -889 0 Total expenses and income recognized directly in

equity ...... 4,158 4,158 -701 3,457 Net income at November 30,

2011 ...... 11,645 11,645 15,165 26,810 Total expenses and income

for the period 4,158 11,645 15,803 14,464 30,267 Change in scope of

consolidation .. 0 0 Liquidity

commitment .... 4 4 4 Share-based

payments ...... -974 -974 -119 -1,093 Treasury share

transactions ..... 0 0 Buyback of minority

interests ...... -3,144 -3,144 -385 -3,529

Distributions ...... 0 -13,292 -13,292 Increase/(decrease

) in capital ...... 0 0

November 30, 2011 ...... 1,366,109,921 37 0 -128,444 -7,876 11,645 -124,637 24,987 -99,650

Allocation of

profit or loss ... 11,645 -11,645 Actuarial gains

(losses) ...... -939 -939 -97 -1,036 Change in hedging

reserves ...... 1,347 1,347 140 1,487

Other transactions . Total expenses and income recognized directly in

equity ...... 408 0 408 43 451 Net income at November 30,

2012 ...... 28,848 28,848 13,571 42,419 Total expenses and income

for the period 0 0 0 408 28,848 29,256 13,614 42,870 Change in scope of

consolidation .. 570 1,888 2,458 -2,458 0 Liquidity

commitment .... Share-based

payments ...... -5,149 -5,149 -536 -5,685 Treasury share

transactions ..... Buyback of minority

interests ...... -1,475 -1,475 -154 -1,629

Distributions ...... -13,766 -13,766

Increase/(decrease F-63

) in capital ......

November 30, 2012 ...... 1,366,109,921 37 0 -117,704 -10,729 28,848 -99,547 21,687 -77,860

F-64

SIGNIFICANT EVENTS OF THE PERIOD

GENERAL INFORMATION

NOTE 1 ACCOUNTING METHODS AND PRINCIPAL VALUATION ASSUMPTIONS ...... F-63 NOTE 2 SCOPE OF CONSOLIDATION ...... F-73 NOTE 3 SEGMENT REPORTING ...... F-73

STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME

NOTE 4 REVENUES ...... F-73 NOTE 5 SELLING EXPENSES ...... F-74 NOTE 6 GENERAL AND ADMINISTRATIVE EXPENSES ...... F-74 NOTE 7 TECHNICAL EXPENSES AND CUSTOMER SERVICE ...... F-74 NOTE 8 OTHER OPERATING INCOME AND EXPENSES ...... F-75 NOTE 9 OTHER NON-CURRENT EXPENSES AND INCOME ...... F-75 NOTE 10 COST OF NET FINANCIAL DEBT AND OTHER FINANCIAL INCOME AND EXPENSES F-75 NOTE 11 OTHER FINANCIAL EXPENSES ...... F-76 NOTE 12 TAX LIABILITY ...... F-77 NOTE 13 NET EARNINGS AND DILUTED EARNINGS PER SHARE ...... F-78

STATEMENT OF CONSOLIDATED FINANCIAL POSITION—ASSETS—

NOTE 14 GOODWILL...... F-78 NOTE 15 PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE FIXED ASSETS ...... F-78 NOTE 16 NON-CURRENT FINANCIAL ASSETS ...... F-79 NOTE 17 INVENTORIES ...... F-80 NOTE 18 ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES ...... F-80 NOTE 19 CURRENT AND DEFERRED TAXES...... F-81 NOTE 20 CASH AND CASH EQUIVALENTS; ...... F-82

STATEMENT OF CONSOLIDATED FINANCIAL POSITION—LIABILITIES—

NOTE 21 EQUITY ...... F-83 NOTE 22 PROVISIONS...... F-83 NOTE 23 FINANCIAL DEBT ...... F-85 NOTE 24 BLOCKED CURRENT ACCOUNTS ...... F-87 NOTE 25 CURRENT LIABILITIES ...... F-87

ADDITIONAL INFORMATION

NOTE 26 NOTES TO THE STATEMENT OF CASH FLOWS ...... F-87 NOTE 27 OFF-BALANCE SHEET COMMITMENTS ...... F-87 NOTE 28 EXPOSURE TO MARKET RISKS AND FINANCIAL INSTRUMENTS ...... F-90 NOTE 29 RELATED PARTY TRANSACTIONS ...... F-92 NOTE 30 POST-CLOSING EVENTS ...... F-97 NOTE 31 INFORMATION ABOUT THE KAUFMAN & BROAD GROUP ...... F-98

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SIGNIFICANT EVENTS OF THE PERIOD Fiscal year highlights for the Kaufman & Broad Group Early partial repayment of the Senior debt Following the twofold bidding process launched by Kaufman & Broad SA on July 26, 2011, which resulted in the early repayment in 2011 of a portion of its term debt under its Senior Facilities Agreement in the amount of €50.8 million and the cancellation of part of the credit commitments that the company has as part of its revolving credit line under this agreement, on February 29, 2012, Kaufman & Broad SA prepaid an additional amount of €10 million on its term debt. This transaction led to a net profit of €1 million, recognized in other financial income. Moreover, as stipulated in the loan documentation, Kaufman & Broad SA also made an early repayment of €17.9 million in late January 2012. At the end of October 2012, following the signing of a new supplemental agreement (Supplemental Agreement No. 8) to the Senior Facilities Agreement, Kaufman & Broad SA made a voluntary early repayment of €40 million, bringing the total amount of debt repaid in fiscal year 2012 to €68 million. Under that supplemental agreement, Kaufman & Broad SA also reduced its drawdown right for the RCF line by €50 million to €52.9 million (see Note 23.2).

Buyback of minority interests The Group repurchased several minority interests over the fiscal year, through the acquisition of the equity interest of its associate Elgéa in a program in Île-de-France, the equity interest of Partim in a program in Marseille, a share of the equity interest of its associate HDI in a program in Toulon and stakes from associates in companies at end-of-life for a total investment of €1.8 million under satisfactory profitability conditions. In accordance with IAS27R, an impact of €1.6 million was recognized in shareholders’ equity for these transactions.

Payment of an interim dividend On October 23, 2012, after reviewing the results of the company over recent past fiscal years and its prospects, the Board of Directors decided to distribute an interim dividend of €2.31 per share for fiscal year 2012. The interim dividend was paid on November 15, 2012 for an amount of €48.5 million, excluding treasury shares. Since this was an intragroup transaction, the dividend was eliminated in the consolidated financial statements of Financière Gaillon 8. Furthermore, the dividend was used for debt repayment.

Fiscal year highlights for Financière Gaillon 8 At its meeting of October 17, 2012 the Board of Directors of Financière Gaillon 8 authorized the signing of Supplemental Agreement No. 8 to its Senior Facilities Agreement, which provides the option for the company to start repaying a portion of its senior debt at the completion of a reverse bidding procedure and in amounts less than the face value of that debt. Under these terms, Financière bought back €57.2 million of its debt. This transaction led to a net profit of €12.7 million, which was recognized in other financial income.

General information NOTE 1—ACCOUNTING METHODS AND PRINCIPAL VALUATION ASSUMPTIONS 1.1 Information about the company The company was created at the end of April 2007 and its fiscal year ends on November 30. The consolidated financial statements at November 30, 2012 reflect the operations of Financière Gaillon 8 (“FG8”) and those of Kaufman & Broad SA and its subsidiaries (“the Kaufman & Broad Group”) over the 12-month period from December 1, 2011 to November 30, 2012. The registered offices of the company are located at 232 rue de Rivoli 75001 Paris (France).

accounting methods and valuation estimates as those used by Kaufman & Broad. The only material items not resulting from the consolidated financial statements of Kaufman & Broad are the allocation of the Kaufman & Broad acquisition price, the debt and the hedging instruments subscribed directly by FG8 and the liquidity commitment granted to the Kaufman & Broad employees for their options and shares under options issued by Kaufman & Broad prior to the assumption of control over Kaufman & Broad by Financière Gaillon 8 as part of the simplified tender offer that Financière Gaillon 8 was required to file for the shares not held by it in accordance with applicable stock market regulations. Accordingly, the Financière Gaillon 8 consolidated financial statements were prepared in compliance with IFRS (International Financial Reporting Standards) and IFRIC (International Financial Reporting Interpretations Committee) interpretations as adopted by the European Union as of November 30, 2012 and available on the European Commission website: (http://ec.europa.eu/internal_market/accounting/ias_fr.htm) The accounting methods described below have been continuously applied to all the periods presented in the consolidated financial statements, after taking into account, or with the exception of, the new standards and interpretations described below. The consolidated financial statements and the accompanying notes are denominated in euros. The consolidated annual financial statements as of November 30, 2011 and the notes pertaining thereto were approved by the Board of Directors at its meeting of March 29, 2013.

1.2.1. Standards and interpretations Standards, interpretations and amendments which must be applied to the fiscal year beginning on December 1, 2011 No new standard or interpretation whose application is mandatory for the fiscal year beginning on December 1, 2011 had any impact on the financial statement of the Financière Gaillon 8 Group. These standards are as follows:

Mandatory application date for annual periods beginning Standards on or after

IAS 24 (revised)—Related Party Disclosures ...... January 1, 2011 May 2010 Improvements to IFRS ...... January 1, 2011 amendment to IFRS 7—Disclosures: Disclosures ...... January 1, 2011 Amendment to IFRIC 14—Early repayment of a Minimum Funding Requirement . January 1, 2011 No new standard or interpretation whose application is mandatory for the fiscal year beginning on December 1, 2010 had any impact on the financial statement of the Financière Gaillon 8 Group.

Date of application to annual periods beginning Standards on or after IFRS 9—“Financial Instruments”: classification and measurement ...... January 1, 2013 IFRS 10—Consolidated Financial Statements ...... January 1, 2013 IFRS 11—Joint Arrangements ...... January 1, 2013 IFRS 12—Disclosure of Interests in Other Entities ...... January 1, 2013 IFRS 13—Fair Value Measurement ...... January 1, 2013 IAS 28 revised—Investments in Associates and Joint Ventures ...... January 1, 2013 IAS 19 revised—Employee Benefits ...... January 1, 2013 amendment to IAS 12—“Deferred Tax”: Recovery of Underlying Assets ...... January 1, 2012 Amendment to IAS 1—Presentation of items of other income and expenses recognized directly July 1, 2012 F-67

Date of application to annual periods beginning Standards on or after in equity ...... Amendment to IAS 32—Offsetting Financial Assets and Financial Liabilities ...... January 1, 2014 amendment to IFRS 7—Disclosures : offsetting financial assets and financial liabilities January 1, 2013 Amendments to IFRS 1: public subsidies ...... January 1, 2013 Improvements to IFRS 2012: Annual Improvements to various standards (published in the IASB on May 17, 2012) ...... January 1, 2013 IAS 27—Separate Financial Statements ...... January 1, 2014 The Financière Gaillon 8 Group has not made early application of any of these new standards or interpretations and is in the course of assessing the impact of their initial application.

USE OF ESTIMATES AND ASSUMPTIONS In order to prepare the Group’s financial statements, the management of Financière Gaillon 8 is required to make estimates and assumptions for items in the financial statements that cannot be accurately valued. These estimates and assumptions are made based on past experience and from the expected changes in the markets in which the Group operates, or other factors deemed reasonable considering the circumstances. These assessments have an effect on the amounts of the income and expenses and on the book value of the assets and liabilities. The estimates and assumptions primarily concern: • earnings forecasts for the real estate programs used to recognize percentage-of-completion transactions (Notes 1.9 and 4); • the business plans used for the performance of impairment tests on goodwill and other intangible assets. • the recoverability of tax assets. Selling price and take-up rate assumptions based on the earnings forecast for real estate developments and actual budget results for the medium-term provisional budgets used for such purposes could be impacted by the economic environment and regulatory changes, particularly government tax incentives.

1.3 OPTIONS CREATED BY THE ACCOUNTING STANDARDS AND USED BY FINANCIÈRE GAILLON 8 Certain IASB standards developed by IASB provide for options with regard to the measurement and recognition of assets and liabilities. Accordingly, the Group has elected to: • use the valuation method on the basis of the historical amortized cost of tangible and intangible fixed assets. The Group decided not to revalue its tangible and intangible assets on each closing date (IAS 16 “Property, Plant and Equipment” and IAS 38 “Intangible Assets”);

• apply the option provided in the amendment to IAS 19 “Employee benefits” to recognize all actuarial gains and losses on defined-benefit plans in the balance sheet through equity, net of deferred taxes; • apply the option provided for by IAS 31 Section 38 to consolidate companies held under joint control using the equity method. Consolidation based on the financial statements as of November 30 includes almost all the companies included in the consolidation. A few equity affiliates have a different balance sheet date and are consolidated on the basis of interim financial statements as of November 30, corresponding to 12 months of operations. That is because their contribution is immaterial.

1.4 CONSOLIDATION METHODS Kaufman & Broad and its subsidiaries are fully consolidated.

1.5 BUSINESS COMBINATIONS AND GOODWILL

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IFRS 3R is applied on a forward-looking basis to new business combinations as from December 1, 2009. At the time of acquisition of control, the assets, liabilities and any identifiable contingent liabilities of the entity acquired that meet the criteria for recognition under IFRS are generally recognized at their fair value determined on the acquisition date. For partial acquisitions, minority interests may either be recognized at their share of the fair value of the assets and liabilities acquired or measured at fair value. This option is applied on a transaction-by-transaction basis. Pursuant to the standard, the costs related to the combination as from December 1, 2009 expensed for the period in which they are incurred. Goodwill is determined once on the date of the takeover (concept of single goodwill). The analysis of goodwill is finalized during the valuation period, which is 12 months from the date of takeover. The impact of subsequent percentage changes not affecting control is recognized in equity. Debt indexed to a price adjustment clause is recognized at fair value starting from the acquisition date. Any subsequent adjustments to the fair value of the debt are recognized in income.

1.6 INTANGIBLE ASSETS Intangible assets include primarily the valuation of the Kaufman & Broad brands and logos. The life of this asset is indefinite and is therefore not amortized, but is subject to impairment tests conducted annually or as soon as there are indicators of impairment. The other intangible assets are design costs and software. They are recognized at their acquisition or production cost and are amortized using the straight-line method over their useful life, which generally does not exceed five years.

Research and Development Expenses The development expenses of the Financière Gaillon 8 Group are comprised of expenses attached to the land (commitments related to programs for which commitments to buy the land have been executed) and are treated as inventory, as an element of the cost price, when it is probable that the program will be developed.

1.7 PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are recognized at acquisition cost; they are the property, plant and equipment of the Kaufman & Broad Group. Depreciation expenses are calculated on the basis of the rate of consumption of the economic benefits expected per asset on the basis of the acquisition cost, minus, where applicable, a residual value.

In this respect, the straight-line method is generally applied over the following periods:

• Fittings, improvements, facilities 10 years • Office equipment 5 years • Construction site equipment 5 years • Office furniture 10 years • Rolling stock 5 years • IT equipment 3 years The assets available to the Kaufman & Broad Group under a finance lease agreement, which correspond primarily to IT equipment, are treated as if they had been acquired on credit and are depreciated on a straight-line basis over the period indicated above. Payments under operating leases are recognized as expenses until termination of the lease. Simple leases (other than sub-leases) are shown in the off-balance sheet commitments.

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decrease in income, and other external factors, etc.), their recoverable value appears to be permanently lower than their net book value. The impairment tests are carried out by comparing the recoverable value and the net book value of the assets. The need to recognize an impairment is assessed by comparing the book value of the assets and liabilities and their recoverable value. The recoverable value is the greater of the net fair value of the exit costs and the value in use. The net fair value of the exit costs is determined as the best estimate of the sale value net of the exit costs for a transaction made at arm’s length between informed and willing parties. This estimate is determined on the basis of the market information available taking into account specific situations. The useful value used by the Financière Gaillon 8 Group corresponds to the aggregate discounted free cash flows generated over a five-year period with a terminal value.

1.9 EQUITY AFFILIATES AND JOINT VENTURES The carrying amount of the equity affiliates and joint ventures corresponds to the share of equity held. This item includes, for development operations, capital and similar investments, i.e. the current account advances made by the Group in order to finance programs.

1.10 INVENTORIES “New projects” are Kaufman & Broad Group programs that have not yet been developed. These programs are valued at cost and include reservation deposits for acquisition of land, design fees, land development expenses and all other fees incurred in connection with the projects. On each period-end date, the share of these expenditures incurred in respect of projects for which land purchase promises are not signed and for which there is a lack of probability of development in the near future is expensed. Inventories of programs under development are valued at cost. This cost includes the land acquisition price, related fees, taxes, cost of roads and equipment, cost of construction and development of the model areas, land expenses, as well as the fees and commissions inherent in the agency agreements executed by Kaufman & Broad in order to sell the real estate programs. For new programs since December 1, 2009, cost also includes financial expenses in accordance with IAS 23, “Borrowing costs.” All advertising expenses, including the expenses directly attributable to the real estate programs, are expensed.

IAS 2 provides for the recognition of indirect fixed expenses to inventories, insofar as such expenses are clearly identifiable and can be allocated. These expenses must be integrated into the inventories by using systematic and rational methods applied in a consistent and ongoing manner to all costs having similar characteristics. Indirect fixed expenses (salaries, payroll expenses and other expenses) should be included in inventories when they are related to the land, technical and general administration departments, and are essentially comprised of expenses related to development, works supervision, project management and after-sales management, for the part that can be directly allocated to the real estate programs and is incurred after the execution of the land purchase promise. The Group is not equipped with the management tools needed to identify and assess these costs in accordance with the IFRS criteria. Accordingly, it recognizes these expenses as indirect fixed costs. A fair value increment was identified and allocated to inventories in relation to the allocation of the Kaufman & Broad acquisition price. It is removed from inventories on a percentage-of-completion basis and therefore in line with revenue recognition. Provisions are set aside in order to cover foreseeable losses, which are valued on the basis of an analysis of economic data and financial forecasts specific to each project.

1.11 ACCOUNTS RECEIVABLE

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Accounts receivable correspond to receivables of the Kaufman & Broad Group accrued because of the recognition of revenues according to the completion of the programs. Accounts receivable include the following: • Calls for funds made to customers at various stages of the work in accordance with regulations in force that are still unpaid; • The lag that can exist between the calls for funds and the actual completion at the close of the financial year. This lag generates most of these receivables; these receivables are not yet payable. • Accounts receivable are measured at nominal value, after deducting the impairment charges recognized when the realizable value of the amounts due is less than the carrying amount.

1.12 CASH AND CASH EQUIVALENTS Cash and cash equivalents are comprised of the cash, demand deposits and cash equivalents as defined by IAS 7. These are short-term investments, generally for less than three months, readily convertible into a known amount of cash and not subject to any material risk of change in value; they are denominated in euros (primarily SICAVs and money-market mutual funds and certificates of deposit). At each period-end date, short-term investments are marked to market and any difference is booked through income.

1.13 PREPAID EXPENSES Early repayments are primarily related to rent and other maintenance expenses.

1.14 KAUFMAN & BROAD TREASURY SHARES Purchases or sales of treasury shares by the Kaufman & Broad Group are treated as changes in the ownership interest of Financière Gaillon 8 in the Kaufman & Broad Group.

The Group valued the benefit awarded to employees on the basis of its fair value on the date of allotment of the rights. The value of the stock options and bonus shares is determined on the basis of the exercise price and term of the option, the current price of the underlying shares, the anticipated volatility in the share price, the dividends anticipated on the shares, the likelihood of exercise of the option, and the risk-free interest rate for the term of the option. That value is posted to general and administrative expenses on a straight-line basis between the options award date and the exercise date of the option or the date of availability of the shares with a direct contra entry posted to shareholders’ equity.

1.16 NON-CURRENT PROVISIONS Under IAS 37 “Provisions, Contingent Liabilities and Contingent Assets,” provisions are recognized when, at the end of the year, the Group has an obligation to a third party resulting from a past event, the settlement of which is expected to result for the company in an outflow of resources representing economic benefits. Where applicable, such outflow of resources may be discounted. The obligation may be statutory, regulatory or contractual in nature. It may also result from the Group’s practices or from public commitments that created a legitimate expectation from the third parties concerned as regards the assumption of certain responsibilities by the Group. The estimate of the amount included as a provision corresponds to the resource outflow that the Group will probably have to suffer in order to extinguish its obligation. If no reliable estimate of such amount can be prepared, then no provision is set aside. The liability is then contingent. Contingent liabilities are potential obligations resulting from past events whose existence will be confirmed only by the occurrence of uncertain future events not under the company’s control, or from current obligations resulting from past event, but that are not recognized because either (i) it is not probable that an outflow of resources embodying economic benefits will

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be required to extinguish the obligation or (ii) the amount of the obligation cannot be determined with sufficient reliability. These liabilities are disclosed in Note 27.3. Non-current provisions primarily include provisions of the Kaufman & Broad Group: • a provision for risks related to equity affiliates; • the provisions for commercial and legal risks; • and employee benefits. The Group has no commitment other than Kaufman & Broad’s retirement benefits that are provisioned in the Group’s consolidated financial statements in accordance with IAS 19. This provision is valued by an independent expert. The actuarial method used corresponds to the projected units of credit method described in IAS 19. This method consists in evaluating, for each employee, the amount of the benefit corresponding to the projected salary at the end of the career, and to the rights applied to the seniority vested on the valuation date. The amount of the benefit thus valued is discounted and tested for probability using the mortality table and the employee turnover table. Actuarial gains and losses are fully recognized in equity (outside the income statement) during the period in which they occur.

Transaction expenses that can be directly allocated to the acquisition or issuance of a financial liability are applied against the amount of such financial liability. The expenses are then amortized according to an actuarial method over the term of the liability by using the EIR method. The effective interest rate is the rate which discounts the anticipated future cash outflows until maturity or until the date closest to the next date of determination of price at the market rate, at the current net book value of the financial liability. This calculation includes all commissions paid or received between the parties to the agreement. The portion of the financial debt maturing in less than one year is shown among current liabilities.

Accounts payable and other liabilities Because of their short-term nature, the book values stated in the consolidated financial statements are reasonable estimates of market value.

Derivative financial instruments The Group is exposed to market risk, in particular interest rate risk. To deal with such risk, the Group relies on a number of derivative financial instruments. Derivatives are marked to market. Any change in the fair value of derivatives is recorded in profit or loss in the income statement, except in cases of hedging as indicated below.

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• the effective portion of the change in fair value of the hedging instruments is recognized directly through equity. The change in the value of the ineffective part of the hedging instrument is recognized through income. The amounts recorded as equity are shown in income in a manner symmetrical to the way in which the hedged assets and liabilities are recognized.

NOTE 1.18 FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value measurements are broken down by level, in accordance with the following fair-value hierarchy: • the instrument is quoted on an active market (level 1); • the valuation employs measurement techniques based on observable data, directly (price) or indirectly (price derivatives) (level 2); • at least one significant component of the fair value is based on non-observable data (level 3). The fair value of financial instruments traded on active markets is based on quotations on the financial statement closing date. A market is considered to be active if the quotations are readily and regularly available from an exchange, traders, brokers, an appraiser or a regulatory agency and such quotations are based on regular transactions. These instruments are classified as Level 1. The fair value of financial instruments not quoted on an active market (for example, over-the-counter derivatives) is determined through the use of measurement techniques. These various methods make maximum use of observable market data, if available, and have little basis in the Group’s own estimates. If all elements required for the fair value calculation are observable, this instrument is classified as Level 2. If one or more of the main elements of the calculation are not based on observable market data, the instrument is classified as Level 3.

1.19 DEFERRED TAXES Under IAS 12 “Income Taxes,” deferred taxes are recognized when there are timing differences between the book values of assets and liabilities and their tax bases, and when there are tax losses, according to the variable carry forward method. Deferred tax assets are recognized only when their recovery is likely. IAS 12 requires, in particular, the recognition of deferred tax liabilities relating to all intangible assets recognized at the time of a business combination (trademarks, etc.). Under IAS 12, deferred tax assets and liabilities are not discounted. The Group does not recognize any tax expense with regard to that portion of income attributed to holders of minority interests in tax-transparent companies, considering their tax status. The main impacts on the deferred tax are as follows: • application of the percentage of completion method for the determination of the margin on operations • elimination of internal services • deductibility of certain goodwill • timing differences related to provisions for liabilities and charges • The company recognizes its tax assets when they are recoverable either because of tax policies or because of income projections.

Operating income corresponds to net income before: • financial income; • financial expenses; • current and deferred taxes; • the share of income/loss of equity affiliates; • income (loss) from operations discontinued or held for sale.

The revenues and margin are recognized as the work is completed, in accordance with the following rule: revenues recognized for a given program are equal to the product of the cumulated revenues from the lots for which a deed of sale has been signed multiplied by the ratio between the amount of the land expenses and the construction expenses incurred by the Group in respect of said program and the total budget of the program’s expenditures. The forecasts used were re-examined in full at year-end and take into account, to the best of management’s knowledge, expected changes in sales prices, marketing and costs. The net income (loss) is attributed to the owners of the parent company and to minority interests, even if this results in a loss for minority interests. Minority interests include all income and expenses attributable to the minority shareholders of the companies held in partnership and fully consolidated.

1.21 EARNINGS PER SHARE The Group discloses earnings per share and diluted earnings per share. Earnings per share are calculated by dividing the net income of the fiscal year attributable to the Group’s shareholders by the average number of shares of common stock outstanding during the fiscal year. Diluted net earnings per share are calculated according to the share purchase method. It is calculated on the basis of the net income attributable to the Group’s shareholders, corrected for the financial costs of the diluting instruments, net of the corresponding tax effect. The number of shares used for the calculation of diluted earnings takes into account the conversion into shares of common stock of diluting instruments outstanding at the close of the period. In order to ensure the comparability of the earnings per share presented, the weighted average numbers of shares outstanding during the fiscal year and during earlier years are adjusted in case of a capital increase made at a price lower than the market price.

1.22 STATEMENT OF CASH FLOWS The Statement of Cash Flows is presented in accordance with IAS 7 and CNC Recommendation 2009-R-03.

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The Group’s cash position, the changes in which are analyzed in the cash flow statement, is defined as the net change in the following balance sheet items: • cash and cash equivalents; • credit facilities • interest accrued on cash and cash equivalents

1.23 OFF-BALANCE SHEET COMMITMENTS The summary of the Group’s contractual obligations and commercial commitments is provided in Note 27.

1.24 FINANCIAL INDICATORS Financière Gaillon 8 applies the same financial indicators as the Kaufman & Broad Group. Definition of the main financial indicators:

1.24.1 Gross margin This indicator is the difference between revenues and the cost of goods sold. The gross margin rate is the “gross margin-to-revenues” ratio.

1.24.2 EBITDA EBITDA represents income (loss) attributable to shareholders before amortization, depreciation and provisions, income tax (expenses) / income, cost of net financial debt, other interest expense, other financial income, other non-recurring income, other non-recurring expenses and share of income (loss) of equity affiliates and joint ventures.

1.24.4 Financial debt See Note 23.

NOTE 2—SCOPE OF CONSOLIDATION The consolidated financial statements of Financière Gaillon 8 consolidate the financial statements of the Kaufman & Broad Group as of November 30, 2012 using the full consolidation method. Kaufman & Broad prepares its own consolidated financial statements in accordance with IAS/IFRS. The percentage of holding and the percentage of ownership interest of Financière Gaillon 8 that takes into account the treasury shares held by Kaufman & Broad SA can be analyzed as follows:

November 30, November 30, 2012 2011

% held ...... 87.96% 87.95% % interest after taking into account own shares ...... 90.57% 89.08% Own shares held by Kaufman & Broad SA ...... 643,093 278,109 Kaufman & Broad capital stock ...... 21,584,658 21,584,658 % Kaufman & Broad treasury stock ...... 2.98% 1.29% % treasury stock held in Financière Gaillon 8 ...... 2.62% 1.13%

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NOTE 3—SEGMENT REPORTING Segment reporting is not applicable for Financière Gaillon 8, due to the existence of a single CGU, the Kaufman & Broad Group. Kaufman & Broad segment reporting is disclosed in the notes to the consolidated financial statements of the Kaufman & Broad Group as of November 30, 2012.

NOTE 4—REVENUES

November 30, November 30, (in € thousands) 2012 2011

Total Apartments ...... 976,726 925,282 Total single-family homes ...... 23,933 58,148 TOTAL HOUSING ...... 1,000,660 983,430 Offices ...... 21,087 48,901 Land & fees ...... 1,649 7,642 Showroom ...... 6,650 4,282

GRAND TOTAL ...... 1,030,046 1,044,255

NOTE 5—SELLING EXPENSES

November 30, November 30, (in € thousands) 2012 2011

Salaries and payroll taxes ...... 7,468 7,008 Advertising expenses and cost of model areas ...... 19,076 18,627 Rents and rental expenses ...... 385 21 Fees ...... 18 28 Temporary employees ...... 652 402 Recruitment costs ...... 39 16 Vehicle expenses—Travel ...... 748 627 Telephone—Electricity (EDF)—minor maintenance ...... 36 36 Taxes ...... 768 567 Other expenses ...... 52 42

Total selling expenses ...... 29,242 27,374

The selling expenses of the Financière Gaillon 8 Group, (€29.242 million as of November 30, 2012 compared to €27.374 million as of November 30, 2011) represent the selling expenses of the Kaufman & Broad Group.

NOTE 6—GENERAL AND ADMINISTRATIVE EXPENSES

November 30, November 30, (in € thousands) 2012 2011

Salaries and payroll taxes ...... 36,974 35,762 Rents and rental expenses ...... 5,969 5,744 Fees ...... 3,865 4,876 Financial reporting costs ...... 307 298 Taxes ...... 6,503 6,199 Temporary employees ...... 452 446 Recruitment costs ...... 254 316 F-76

November 30, November 30, (in € thousands) 2012 2011

Insurance ...... 209 73 Internet ...... 453 308 Telephone—Electricity (EDF)—Maintenance costs ...... 2,310 2,450 Vehicle expenses—Travel ...... 2,152 2,270 Information systems ...... 949 1,588 Other expenses ...... 2,695 1,903

Total general and administrative expenses ...... 63,092 62,233

The general and administrative expenses of the Financière Gaillon 8 Group, (€63.092 million) represent the general and administrative expenses for fiscal year 2012 of the Kaufman & Broad Group in the amount of €62.935 million and to Financière Gaillon 8’s own expenses in the amount of €157,000. The general and administrative expenses for fiscal year 2011 included the expenses of the Kaufman & Broad Group in the amount of €62.086 million and Financière Gaillon 8’s own expenses in the amount of €147,000.

NOTE 7—TECHNICAL EXPENSES AND CUSTOMER SERVICE

November 30, November 30, (in € thousands) 2012 2011

Salaries and payroll taxes ...... 14,662 13,593 Fees ...... 39 75 Recruitment costs ...... 36 152 Temporary employees ...... 106 212 Vehicle expenses—Travel ...... 1,155 1,229 Telephone—Electricity (EDF)—Minor maintenance ...... 76 63 Taxes ...... 266 288 Other expenses ...... -39 22

Total technical expenses and customer service ...... 16,301 15,634

Technical and customer service expenses include all the salaries of the personnel responsible for technical monitoring of real estate programs and the services related to after-sale operations, travel costs, income and other taxes (primarily the local “CET” tax), maintenance costs, and supplies of the Kaufman & Broad Group.

NOTE 8—OTHER INCOME AND EXPENSES

November 30, November 30, (in € thousands) 2012 2011

Fees ...... 4 65 Bank fees ...... 1,491 1,496 Expenses on discontinued projects ...... 4,553 3,789 Amortization, depreciation and provision expenses (net of reversals) ...... 2,212 2366 Other expenses ...... 1,066 2,310

Total other expenses ...... 9,326 10,026

Sale of services...... -951 -1,395

Total other income ...... -951 -1,395

The other income and expenses of the Financière Gaillon 8 Group represent the other income and expenses of the Kaufman & Broad Group.

NOTE 9—OTHER NON-RECURRING INCOME AND EXPENSES

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November 30, November 30, (in € thousands) 2012 2011

Income from discontinued projects(b) ...... 668 (a) Reversal of provisions for impairment of land ...... 1,500 Cost of job protection plan ...... 38 995 Risk on associated litigation ...... 71

NBV of sold assets

Total other non-current income ...... 1,538 1,734

Expenses on discontinued projects(b) ...... -93 Increase in provisions for amortization of land(a) ...... -779 NBV of sold assets ...... 3 -80

Risk on associated litigation ...... 7

Total other non-current expenses ...... 10 -952

(a) The Kaufman & Broad Group purchased land in previous fiscal years and it estimated at November 30, 2009 that sale was more likely than development. In this context, a provision of €5.1 million was booked to reduce the valuation of these properties to market value. To continue the reorganization plan adopted in 2008, these items are classified as other non-recurring expenses. In fiscal year 2012, having revisited the conducting of a real estate transaction, the Group decided to market the project on a previously depreciated piece of land. The impairment was thus immediately reversed, resulting in a net reversal of €1.5 million for fiscal year 2012. The impairment was increased for 2011 by €0.8 million for one of those land properties prior to its disposal.

(b) Reversals of provisions for discontinued projects recorded in 2008 and 2009 in the other non-recurring expenses item. Expenses related to discontinued projects for fiscal year 2010 have been recorded under other income and expenses (See Note 8).

NOTE 10—COST OF NET FINANCIAL DEBT AND OTHER FINANCIAL INCOME AND EXPENSES COST OF NET FINANCIAL DEBT

November 30, November 30, (in € thousands) 2012 2011

Financial expenses ...... -30,831 -41,857 Financial income ...... 1,799 3,619

Cost of net financial debt ...... -29,032 -38,238

The cost of net financial debt amounted to -€29.0 million, a reduction of €9.2 million compared to 2011, which was mainly due to the €4.7 million increase in the capitalization of interest expenses related to the gradual application of IAS 23 to new programs since December 1, 2010 and the reduction in financial expenses related to the decline in average financial debt. In addition, the Group no longer supports the expenses from the deferral of the swaps cancellation adjustment, which amounted to €3.5 million in 2011.

Financial expenses can be analyzed as follows:

November 30, November 30, (in € thousands) 2012 2011

Interest expenses on syndicated loans ...... 34,588 39,641 Interest expenses on Kaufman and Broad swaps and swap cancellation adjustment 3,438 3,879 Deferral of FG8 cancellation adjustment ...... — 1,748 Expenses for deferral of origination fees for syndicated loans ...... 2,328 2,283 Capitalization of financial expenses—IAS 23 Kaufman & Broad ...... -11,356 -6,626 Other ...... 1,833 932

Financial expenses ...... 30,831 41,857

The financial expenses are mainly due to the use of syndicated loan facilities. Through the application of the total effective interest rate, financial expenses include the amortization of the syndicated loan facility in the amount of €3.2 million.

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Financial income can be analyzed as follows:

November 30, November 30, (in € thousands) 2012 2011

Capital gain on sale of money-market SICAVs and certificates of deposit ...... -1,534 -2,314 Other income from cash and cash equivalents ...... -265 -1,305

Financial income ...... -1,799 -3,619

Other income from cash and cash equivalents consisted primarily of interest on a loan to Seniors Santé in 2010 in the amount of €0.3 million, compared to €0.7 million in 2011. In 2011, this item also included late fees charged to buyers in the amount of €0.5 million.

NOTE 11—OTHER FINANCIAL INCOME AND EXPENSES Other interest expense

November 30, November 30, (in € thousands) 2012 2011

Expenses for deferral of origination fees for syndicated loans ...... 1,699 2,344 Trading commission ...... 0 100

Total other financial expenses; ...... 1,699 2,444

Other financial income

November 30, November 30, (in € thousands) 2012 2011

Financial income relating to the early repayment of the Kaufman & Broad Senior B and C lines ...... -1,000 -3,756 Financial income relating to the early repayment of the Financière Gaillon 8 Senior B and C lines ...... -13,330 Financial income tied to waiver of the use of a portion of the RCF line ...... 0 -5,603

Total other financial income ...... -14,330 -9,359

Following the early repayment of the Senior B and C lines and the waiver of drawdown rights on a portion of the RCF line that occurred in 2011 and 2012 (see Note 4.1.1 “Significant events of the period”), additional amortization of the origination fees for the Senior B and C lines was recorded in “Other financial expenses” for €1.7 million in 2012 versus €2.3 million in 2011 and financial income was recorded in the amount of €14.3 million in 2012 versus €9.4 million in 2011.

NOTE 12—TAX EXPENSE 12.1 ANALYSIS OF CORPORATE INCOME TAX EXPENSE At November 30, 2012, the Group noted expenses as follows:

November 30, November 30, (in € thousands) 2012 2011

Current CIT expense/(income) ...... 3,811 -646 Provision for tax risk ...... 1,600 3,710 Deferred taxes ...... 19,376 23,643

Total tax on net income on consolidated companies ...... 24,787 26,707

The share of net income of affiliates is shown on a pre-tax basis. The corresponding tax liabilities are included in the Group’s tax liability. Tax is calculated on the Group’s share of net earnings.

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12.2 TAX RECONCILIATION Deferred tax is calculated on the basis of the approved tax rates, i.e. 34.43% for 2010 and the years following. The reconciliation between the theoretical tax calculated on the basis of the French statutory tax rates and the effective tax liability is as follows:

November 30, November 30, (in € thousands) 2012 2011

Pre-tax income of consolidated companies ...... 67,267 52,563 Applicable tax rate ...... 34.40% 34.40% Theoretical tax—expense /(income) ...... 23,140 18,082 Provision for tax risk ...... 1,600 3,635 Impact of permanent differences ...... -1,044 -1,144 Impact of non-capitalized timing differences ...... 4,238 9,240 Tax on share of profit (loss) of equity affiliates ...... -21 329 Tax borne by minority Kaufman & Broad shareholders of tax-transparent companies -3,126 -3,435

Group tax liability/(income) ...... 24,787 26,707 Permanent differences are due to Kaufman & Broad’s permanent differences in the amount of -€1.0 million mainly originating from the tax savings enjoyed by the Group for its Belgian subsidiary in the amount of -€1.5 million in 2012, the interest expenses from undercapitalizing the subsidiaries of €1.0 million (€1.0 million in 2011), the additional contribution of 3% on the interim dividend paid in November 2012 for €1.5 million and other nondeductible expenses. Moreover, Kaufman & Broad as parent company of the consolidated Group recorded a tax savings of €2.4 million related to the crediting of interest on thin capitalization, deduction of which was deferred for previous years. Kaufman & Broad SA and Financière Gaillon SA are not a Group consolidated for tax purposes; therefore, profits generated by Kaufman & Broad SA and its subsidiaries consolidated for tax purposes are not charged against the losses of Financière Gaillon 8 SA. Since there is no projected use of tax losses generated by Financière Gaillon 8 SA, no deferred tax asset has been recognized for those losses in the consolidated financial statements of the Financière Gaillon 8 Group.

12.3 ANALYSIS OF TAX RECOGNIZED DIRECTLY IN EQUITY

November 30, November 30, (in € thousands) 2012 2011

Actuarial gains or losses on deferred income taxes ...... 543 157 Hedging instruments (deferred tax) ...... -785 -991

Tax recognized directly in equity ...... -242 -834

NOTE 13—NET EARNINGS PER SHARE AND DILUTED EARNINGS PER SHARE Earnings per share are obtained by dividing the Group’s attributable net income by the average number of shares outstanding in fiscal year 2012.

November 30, November 30, (in € thousands) 2012 2011

Attributable net income ...... 28,848 11,646 Average number of shares outstanding ...... 1,366,109,921 1,366,109,921

Earnings per share (in euros) ...... 0.021 0.009

Diluted earnings per share (in euros) ...... 0.021 0.009

STATEMENT OF FINANCIAL POSITION – ASSETS NOTE 14—GOODWILL The acquisition price of the Kaufman & Broad Group was allocated to identifiable acquired assets and liabilities. F-80

Changes in the net value of goodwill can be analyzed as follows:

November 30, November 30, (in € thousands) 2012 2011

Balance at the end of the period ...... 144,370 144,370

Goodwill was tested for impairment in accordance with IAS 36 “Asset Impairment”. The test showed no impairment as of November 30, 2012. The discounting rate used to determine the going concern value as of November 30, 2012 is equal to 9.50%. This rate is calculated based on the average cost of capital employed and includes a risk premium. The free cash flows are determined on the basis of reasonable and documented assumptions. The Group used budget forecasts made at the fiscal year-end and a 0.5% stable growth rate for the future. The recoverability test was performed based on the CGU for the entire capital employed, including goodwill, the Kaufman & Broad brand, property, plant and equipment and the net working capital requirements.

NOTE 15 — PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS 15.1 NET INTANGIBLE ASSETS

Accumulated Nov. 30, 2012 Nov. 30, 2011 depreciation and (in € thousands) Gross amount amortization Net amount Net amount

Kaufman & Broad brand...... 80,422 0 80,422 80,422 Other intangible assets ...... 10,420 -6,081 4,339 2,452

Intangible assets ...... 90,842 -6,081 84,761 82,874

15.2 NET PROPERTY, PLANT AND EQUIPMENT

Accumulated Nov. 30, 2012 Nov. 30, 2011 depreciation and (in € thousands) Gross amount amortization Net amount Net amount

Land ...... 144 0 144 144 Buildings ...... 1,114 -945 169 199 Technical facilities ...... 1 -1 0 0 Other tangible assets ...... 13,408 -8,932 4,476 4,729 Property, plant and equipment in progress...... 815 0 815 811

Net property, plant and equipment ...... 15,482 -9,878 5,604 5,883

Inc. finance lease (amortized over 3 years) 28 -14 14 23 Property, plant and equipment represent only the Kaufman & Broad Group’s property, plant and equipment. Finance leases primarily cover IT equipment.

NOTE 16—NON-CURRENT FINANCIAL ASSETS

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November 30, November 30, (in € thousands) 2012 2011

Equity affiliates and joint ventures ...... 4,373 3,473 Security deposits and bonds ...... 1,262 2,551

Other non-current financial assets ...... 5,635 6,024

16.1 EQUITY AFFILIATES AND JOINT VENTURES The shares of equity affiliates and joint ventures as of November 30, 2012 were primarily as follows:

Share of shareholders’ Contribution to equity the Percentage of of equity affiliates Current consolidated (in € thousands) capital held and joint ventures account position

SARL Profipar ...... 25.00% -36 8 -28 SAS St Exupéry Montaudran ...... 50.00% -938 37 -901 SCI 87-91 AV DE LA DIV LECLERC .... 50.00% 106 38 144 SCCV Colombes Marine Lot H ...... 10.00% -41 552 511 SCI GONESSE—FONTAINE ST NICO . 43.00% 206 820 1,026 SCCV Athena ...... 40.00% 789 138 927 La Lilatte ...... 33.33% -126 328 202 SCI Les Terrasses du Parc ...... 50.00% -175 300 125 SARL Foncière JLG Amenageur ...... 50.00% -152 1,644 1,492 SCI Les Terrasses de Diane ...... 30.00% -78 34 -44 SCI Les Hameaux de Chartreuse ...... 50.00% -61 80 19 SARL Les Jardins de Daudet ...... 25.00% -42 73 31

Other companies ...... 35 834 869

Equity affiliates and joint ventures ...... -513 4,886 4,373 The share of fiscal year 2012 net earnings represented by equity affiliates and joint ventures coming within the scope of consolidation at November 30, 2012 representing -€61,000, is included in shareholders’ equity above.

The change in the value of the equity associates and joint ventures can be analyzed as follows:

November 30, November 30, (in € thousands) 2012 2011

Balance at the beginning of the period ...... 3,473 5,359

Change in current accounts and other companies ...... 961 -2,841 Attributable net income ...... -61 955

Balance at the end of the period ...... 4,373 3,473

NOTE 17—INVENTORIES

Nov. 30, 2012 Nov. 30, 2011

(in € thousands) Gross Depreciation Net Gross Depreciation Net

New projects ...... 24,247 -718 23,529 17,882 -559 17,323 Programs in progress ...... 263,960 -1,691 262,269 225,191 -2,645 222,546

Total ...... 288,207 -2,409 285,798 243,073 -3,204 239,869 The change in depreciation can be broken down as follows:

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(in € thousands) Nov. 30, 2011 Expenses Reversals Nov. 30, 2012

New projects ...... 559 1,611 -1,452 718 Programs in progress ...... 2,645 868 -1,822 1,691

Total ...... 3,204 2,479 -3,274 2,409 The change in gross inventories of programs in progress in the amount of €38.8 million includes an increase of €42.7 million for the year following the acquisition and the launch of several material programs and a decrease in the acquisition price allocated to inventory in the amount of €2.9 million. New project inventories net of expenses rose by €6.2 million, a consequence of the development of new operations. Recognized reversals of provisions for impairment mainly correspond to the reduction in provisions for loss at completion on operations developed in 2007 as they progressed.

NOTE 18—ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES AND OTHER NON-CURRENT ASSETS

Nov. 30, 2012 Nov. 30, 2011

(in € thousands) Note Gross Depreciation Net Gross Depreciation Net

Accounts receivable ...... (18.1) 269,367 -1,178 268,189 307,423 -1,750 305,673

Government—VAT ...... (18.2) 129,028 -971 128,057 119,684 119,684

Government—Current CIT ...... (19) 34,601 34,601 36,971 36,971

Advances and down payments .. 2,182 2,182 629 629 Current equity affiliates

accounts ...... (18.3) 9,170 9,170 10,644 10,644

Other financial receivables ...... (18.4) 2,379 2,379 11,535 11,535

Receivables from notaries ...... 811 811 7,712 7,712

Other ...... 9,265 -3,817 5,447 8,856 -3,770 5,086

Prepaid expenses ...... 1,021 1,021 817 817

Total ...... 457,824 -5,966 451,857 504,271 -5,520 498,751

All “Accounts Receivable” and “Other Receivables,” excluding the current CIT receivable and excluding Financière Gaillon 8’s VAT receivable mature in less than one year. Of these receivables, €449.3 million originate from Kaufman & Broad SA’s consolidated financial statements and €2.5 million from receivables of Financière Gaillon 8 in relation to a VAT receivable maturing in 1 to 5 years which is posted to other non-current assets.

Change in depreciation

(in € thousands) Nov. 30, 2011 Expenses Reversals Nov. 30, 2012

Accounts receivable ...... 1,750 139 -712 1,178 Other receivables ...... 3,770 1,549 -530 4,788

Total ...... 5,520 1,688 -1,242 5,966

During the period, there were no significant allowances, or reversals of allowances, for trade and other receivables.

NOTE 18.1 ACCOUNTS RECEIVABLE The difference between net accounts receivable (€268.2 million) and the amount of cash calls outstanding (€35.8 million) net of provisions (€232.4 million) corresponds to the lag time between the contractual calls for funds and the program percentage-of-completion revenues recognized. Receivables corresponding to that difference are posted exclusive of tax. The civil-law notary drafting the deed of sales is generally required to ensure that the financing of the sale is closed upon the execution of the deed. Therefore, provisions for accounts receivable are rare. Receivables beyond 90 days essentially include payment delays on cash calls on lots not yet delivered to buyers. Receivables for which the Group believes there is a risk of non-collection are provisioned in the amount of €1.2 million.

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According to our standard terms of payment, calls for funds are payable immediately upon receipt. As of November 30, 2012, the calls for funds’ by age were as follows:

between 0 and 30 days ...... € 28.0 million between 30 and 60 days ...... € 2.9 million between 60 and 90 days ...... € 1.5 million more than 90 days ...... € 3.4 million

Total cash calls ...... € 35.8 million

NOTE 18.2 GOVERNMENT—VAT As of November 30, 2012, the VAT item included the VAT deductible on recorded supplier invoices, amounting to 44.8 million (€41.7 million in 2011), the VAT recognized on unreceived invoices associated with the recognition of expenses on a program percentage-of-completion basis, amounting to €60.0 million (€45.7 million in 2011), and VAT credits amounting to €23.9 million (€29.8 million in 2011).

NOTE 18.3 CURRENT ACCOUNTS EQUITY AFFILIATES This item reflects the portion of the loss allocated to minority equity affiliates and not settled as of November 30, 2012 on fully consolidated operations. A provision was recorded in the amount of €10.1 million to cover the risk associated with defaulting equity affiliates (see Note 22.3).

NOTE 18.4 OTHER FINANCIAL RECEIVABLES Other financial receivables represent the portion due in less than one year on the loan granted to Seniors Santé. The portion due in less than one year at November 30, 2011 of €11.5 million was repaid in the amount of €9.2 million in fiscal 2012. In accordance with the rescheduling negotiated in late June 2012, the balance of the debt and the corresponding interest, an amount of €2.4 million due on November 30, 2012 was postponed and settled during January 2013.

NOTE 19—CIT AND DEFERRED TAXES

November 30, November 30, (in € thousands) 2012 2011

Corporate income tax ...... 34,601 36,971 Deferred tax liabilities ...... -56,042 -36,687

Balance at the end of the period ...... -21,441 284

The Financière Gaillon Group has a deferred tax liability in the amount of €56.042 million, of which €55.586 million originate from the Kaufman & Broad Group and €456,000 from FG8 in relation to goodwill.

The tax consolidation of the Kaufman & Broad Group for 2012 shows a profit in the amount of €21 million, after using €13 million in prior year losses, the Group’s loss carryforward was €80.7 million. The current CIT receivable as of November 30, 2012 of €34.6 million includes the carry back of €33.4 million recorded for 2009 and 2010, as well as receivables related to tax credits for sponsorships of €0.6 million and early repayments of €0.6 million spread over several non-consolidated subsidiaries as of November 30, 2012.

Source of deferred taxes by nature:

Deferred tax base Deferred taxes at at November 30, November 30, (in € thousands) 2012 2012

Differences in recognition of real estate programs ...... 191,882 -66,067 Provisions and expenses with deferred deductibility ...... -19,966 6,874 Kaufman&Broad brand...... 44,292 -15,055 Bond issuance expenses ...... 3,344 -1,151 Tax deductible beneficial ownership ...... 24,301 -8,367 F-84

Deferred tax base Deferred taxes at at November 30, November 30, (in € thousands) 2012 2012

Provisions for land ...... -600 207 Hedging swaps ...... -212 73 Tax loss carryforwards ...... -81,719 28,137 FG8 fair value adjustments ...... 1,329 -456 Other ...... 686 -236

Balance at the end of the period ...... 163,337 -56,042

Most of the deferred taxes are related to the differences in the recognition of real estate programs between the fiscal accounts and the consolidated accounts (nature of the costs integrated in inventories and recognition of income by completion in the fiscal accounts). Deferred taxes changed as follows:

November 30, Nov. 30, (in € thousands) 2012 2011

Balance of deferred taxes at the beginning of the period—assets/(liabilities) ...... -36,687 -12,342

Recognized in profit and loss(a) ...... -19,376 -23,643 Recognized in equity ...... -242 -834 Other changes(b) ...... 263 132

Balance of deferred taxes at the end of the period—assets/(liabilities) ...... -56,042 -36,687

(a) as of November 30, 2011, this expense included the impairment of previously recognized assets in the amount of €4.2 million (see Note 12.2). (b) The other changes correspond to the reclassification of the prior period as current CIT.

NOTE 20—CASH AND CASH EQUIVALENTS The Group’s cash and cash equivalents can be analyzed as follows:

November 30, November 30, (in € thousands) 2012 2011

Bank balances and cash on hand(3) ...... 88,626 57,898 Short-term investments(1) ...... 63,324 80,340 Order balances(2) ...... 3,837 2,868

Cash and cash equivalents ...... 155,787 141,106

1) Financière Gaillon 8’s short term investments consist only of money-market SICAVs and certificates of deposit.

2) Order balances represent 5% of deposits paid by Kaufman & Broad’s clients into a blocked bank account. These amounts are released and therefore available upon execution of the notarized deed.

STATEMENT OF FINANCIAL POSITION—LIABILITIES NOTE 21—SHAREHOLDERS’ EQUITY As of November 30, 2012, Financière Gaillon 8 SA’s stock capital totaled €37,000, divided into 684,089,563 shares of common stock and 682,020,358 shares of preferred stock with the same par value. Preferred shares do not carry voting rights and entitle their holders to a share of profits and to the liquidation dividend of the company which will be permanently approved on the date of disposal by the Company of its ownership interest in its subsidiary Kaufman & Broad SA. Share ownership did not change in fiscal year 2012. Its structure as of November 30, 2012 is detailed in the table below.

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Number of shares Number of shares of preferred Breakdown of Shareholder of common stock stock voting rights % capital

Financière Daunou 10 ...... 465,180,900 68% 34%

CALYON ...... 682,020,358 0% 50% Financière de Neuilly ...... 218,908,660 32% 16% Frédéric Stevenin ...... 1 Sophie Lombard...... 1 Patrick Mouterde ...... 1

Total ...... 684,089,563 682,020,358 100% 100%

21.1 CHANGE IN CAPITAL

(in € thousands) Nov. 30, 2011 Expenses Reversals Nov. 30, 2012

Number of shares ...... 1,366,109,921 1,366,109,921

Capital in € ...... 37,000 37,000

21.2 TREASURY SHARES As of November 30, 2012 the Group did not hold any treasury shares.

21.3 DISTRIBUTIONS There was no distribution carried out by Financière Gaillon 8 for the fiscal year.

21.4 MINORITY INTEREST As of November 30, 2012, the share of income attributable to minority interests totals €13.6 million, €9.1 million of which corresponds to the share of the companies under full consolidation in the financial statements of the Kaufman & Broad Group attributable to external shareholders, since none of those companies had material share in the earnings of the Group, and €4.5 million of which corresponds to the share of income net of tax of Kaufman & Broad attributable to Kaufman & Broad’s minority shareholders.

NOTE—22 PROVISIONS The provisions are those of the Kaufman & Broad Group.

Reversals Unused Nov. 30, (in € thousands) Note Nov. 30, 2011 Expenses used reversals 2012

Provisions for retirement indemnities ...... (22.2) 2,098 1,461 -90 3,469 Provisions for risks with partners ...... (22.3) 10,222 842 -638 -1,491 8,935 Provision for tax risk ...... (22.4) 4,026 1,600 -113 -913 4,600 Provisions for restructuring ...... (22.5) 305 -47 258

Provisions for charges ...... 20 20 Provisions for social litigation risks ...... (22.5) 2,437 2,823 -1,025 -1,269 2,966 Provisions for other risks ...... (22.6) 5,326 2,038 -830 -1,248 5,287

Provisions ...... 24,434 8,764 -2,696 -4,968 25,535

22.1 MATURITY

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Less than More than (in € thousands) Nov. 30, 2012 one year one year

Provisions for retirement indemnities ...... 3,469 3,469

Provisions for risks with partners ...... 8,935 8,935

Provision for tax risk ...... 4,600 4,600

Provisions for restructuring ...... 258 258

Provisions for charges ...... 20 20 Provisions for social litigation risks ...... 2,966 506 2,460 Provisions for other risks ...... 5,287 494 4,793

Provisions ...... 25,535 1,000 24,535

22.2 PROVISIONS FOR RETIREMENT BENEFITS The following assumptions were used in order to calculate retirement benefits: • discount rate: 3.0 % rate on “AA” corporate bonds (value determined by the IBOXX index); • average wage increase rate: 2.00%; • inflation rate: 2%; • retirement age of 62 for all personnel categories; • average annual turnover of 6.71%, knowing that a differential rate calculated on the average of the last three years was applied by age bracket in 2012. The discount rate applied by the company depending on market conditions is based on commitments made over periods similar to the estimated duration of the company’s commitments for employee benefits. The company does not hold any hedging assets for retirement benefits. This provision includes the payroll taxes which the company would have to pay if it required employee retirement pursuant to the labor laws in force. As of November 30, 2012, the provision was in the amount of €3.5 million and it originated almost exclusively from the Kaufman & Broad financial statements.

22.3 PROVISIONS FOR RISKS WITH PARTNERS This provision of €8.9 million covers the risk associated with defaulting affiliates; it includes €6.4 million that represents the risk relating to a partner as the result of a legal dispute.

22.4 PROVISIONS FOR TAX RISK Following an audit of the accounts for fiscal years 2005 to 2008, a proposed correction was sent to Kaufman & Broad SA on July 13, 2010 by France’s National and International Tax Audit Directorate (DVNI) in respect of Kaufman & Broad’s operations in Belgium. The amount of the correction was €7.6 million, including €2.4 million in interest and penalties. In September 2010, Kaufman & Broad SA shared its observations regarding the proposed correction with the DVNI, which maintained its position. The company filed an appeal with a higher administrative authority, following which the DVNI advised that it wished to pursue the correction proceedings. With the outcome yet to be determined, Kaufman & Broad SA has booked a liability provision of €3 million as of November 30, 2011. The Departmental Committee on Direct and Other Taxes for revenues originally scheduled on December 3, 2012 will be held February 21, 2013. Kaufman & Broad SA has been involved in adjustment proceedings solely for the year ended November 30, 2009, for which the tax authorities contest the Group’s Belgian activities. This procedure resulted in a proposed correction received on July 16, 2012, for an amount of €4.2 million, which includes €1.2 million in interest and penalties.

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Consequently, an additional provision of €1.6 million was recorded by Kaufman & Broad SA for 2012, increasing the initial provision to €4.6 million as of November 30, 2012.

22.5 PROVISIONS FOR RESTRUCTURING AND SOCIAL RISKS A provision for restructuring charges had been booked in the financial statements at November 30, 2008 primarily to meet the company’s employee commitments. This provision has been reduced for fiscal 2012 to an amount not used. It amounts to €0.3 million at November 30, 2012, which reflects the costs associated with labor disputes related to the Employment Preservation Plan that appeared during 2009. The provision for disputes with former employees of the Group is €1.2 million. A provision in the amount of €1.8 million covers Urssaf adjustments of which notice was given to GIE Kaufman & Broad. This tax adjustment, which is for the unpaid contributions on travel allowances, was provisioned for the risk estimated by the company to the extent that part of the documentation to be provided must reduce the amount of the adjustment.

22.6 PROVISIONS FOR OTHER RISKS The provision for commercial and legal risks mostly covers ongoing disputes with customers or suppliers of delivered projects, amounting to €5.3 million.

NOTE 23—FINANCIAL DEBT 23.1 GROSS FINANCIAL DEBT BY TYPE Gross financial debt represents: • Kaufman & Broad’s gross financial debt in the amount of €235.0 million • Financière Gaillon 8’s gross financial debt in the amount of €287.8 million

(in € thousands) Nov. 30, 2012 Nov. 30, 2011

Syndicated bank credit line ...... 489,663 591,587 Other borrowings ...... 4 23 Credit facilities...... 454 533 Issuance expenses ...... -4,941 -8,968 Other financial liabilities ...... 37,626 38,940

Gross financial debt ...... 522,806 622,115

—of which non-current ...... 522,302 601,063 —of which current ...... 504 21,052

Financing totaling €542.6 million includes senior loans in the amount of €459 million and an operations financing line for €83.6 million (drawn in the amount of €30.7 million). The syndicated bank credit facilities were drawn in the amount of €489.7 million as of November 30, 2012.

Principal End of At November 30, At November 30, In €k Fin. Gaillon 8(1) Kauf. & Broad Total term 2012 2011

Line B1 ...... 45,320 45,320 10/07/2015 45,320 50,467

Line B2 ...... 65,163 65,163 10/07/2015 65,163 77,661

Line B3 ...... 101,479 101,479 10/07/2015 101,479 136,591

Line B4 ...... 19,196 19,196 10/07/2015 19,196 23,829

Line C1 ...... 45,481 45,481 10/07/2016 45,481 50,636

Line C2 ...... 65,382 65,382 10/07/2016 65,382 77,921

Line C3 ...... 102,088 102,088 10/07/2016 102,088 126,723

Line C4 ...... 14,903 14,903 10/07/2016 14,903 18,499

Revolving ...... 52,900 52,900 10/07/2014 0 0

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Principal End of At November 30, At November 30, In €k Fin. Gaillon 8(1) Kauf. & Broad Total term 2012 2011

Revolving ...... 30,650 30,650 10/07/2015 30,650 29,260

TOTAL ...... 251,996 290,567 542,563 489,663 591,587

(1) includes interests capitalized as of 6/30/2012

23.2 MATURITY

November 30, Maturity Maturity > Maturity (in € thousands) 2012 Not applicable < 1 year 1 year and <5 years > 5 years

Syndicated credit facility ...... 489,663 489,663 Credit facilities used/Accrued interest ...... 454 454 Other borrowings ...... 4 4 Issuance expenses ...... -4,941 -4,941 Other financial liabilities(1) ...... 37,626 46 37,580

Gross financial debt ...... 522,806 -4,941 504 527,243

(1) As of November 30, 2008, Financière Gaillon 8 was hedging the interest flows of its floating-rate borrowings by purchasing swaps in accordance with its contractual commitments to the lending banks. These contracts were terminated and entailed the invoicing of termination fees recognized in debt for up to €19m, the balance corresponding primarily to accrued interest as of November 30, 2008, i.e., a total of €22.7m (Hedging) posted to financial debt under the agreements signed as of June 30, 2009. The interest accrued as of June 30, 2012 were capitalized and brought the total of the hedging debt to €27.8 million. This financial debt generated interest posted to accrued interests between July 1, 2011 and November 30, 2012 which will be, like the interest generated on the other lines of credit, capitalized as of June 30, 2013. Interest accrued as of November 30, 2012 for the entire debt totaled €9.6m. The maturities of the syndicated bank credit facilities set up in 2007 by Kaufman & Broad and Financière Gaillon 8 mature for the RCF line on July 10, 2014 for the share due by Kaufman & Broad (€52.9m) and on July 10, 2015 for the share due by Financière Gaillon 8 (€30.7m), for the balance of the Senior B line on July 10, 2015 and for the balance of the Senior C line on July 10, 2016. Following the signature in 2011 and 2012 of Supplemental Agreements Nos. 6, 7 and 8 to Senior Facilities Agreement and the double bidding process launched by Kaufman & Broad SA in 2011 and by Financière Gaillon 8 in 2012 with the aim of repaying early a portion of its fixed-term debt under the Senior Facilities Agreement (see Significant events during the period), repayments were made in the amount of €125 million in 2012 of which €68 million repaid by Kaufman & Broad and €57 million repaid by Financière Gaillon 8. Supplemental Agreement No. 8 signed on October 17, 2012 also stipulated a reduction of the drawdown right for the RCF line by €50 million to €52.9 million. The loan agreement’s main acceleration and termination clause is related to the non-compliance with one or more of the financial covenants detailed in the notes to Kaufman & Broad’s consolidated financial statements and below for the financial covenants pertaining to Financière Gaillon 8.

Applicable covenants The Senior Facilities Agreement, which results from the final agreement signed by the company and its lenders on January 23, 2009 and the supplemental agreements signed on June 30, 2009 and November 25, 2009, stipulates an adjustment in the financial ratios applicable to the company: • in the following accounting quarters until the expiration of the agreement in 2016, the Group will be required to comply with two ratios, calculated on the basis of the Kaufman & Broad Group consolidated financial indicators, with levels redefined as follows:

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Nov Feb May Aug. Nov. Nov. Nov. RATIOS 2012 2013 2013 2013 2013 2014 2015

Debt ratio ...... ‹ 5,60 < 5,30 < 4,95 < 4,60 ‹ 4,05 ‹ 3,30 ‹ 2,20 Minimum cash flow level (in € millions) ...... 207 224 262 306 328 440 540

23.3 MAIN NET DEBT ITEMS Net financial debt corresponds to the gross financial debt, as defined above, minus cash and cash equivalents.

The balance sheet items contributing to net financial debt are as follows:

(in € thousands) Nov. 30, 2012 Nov. 30, 2011

Gross financial debt ...... 522,806 622,115

Cash and cash equivalents ...... 155,787 141,106

Net financial debt ...... 367,019 481,009

NOTE 24—BLOCKED CURRENT ACCOUNTS The amount of €4.9 million as of November 30, 2011 and as of November 30, 2012 corresponds to the loan granted by Financière Daunou 10, which is Financière Gaillon 8’s majority shareholder and an investment vehicle for funds managed by PAI Partners.

NOTE 25—CURRENT AND NON-CURRENT LIABILITIES

(in € thousands) Nov. 30, 2012 Nov. 30, 2011

Current provisions ...... 1,000 — Other current financial liabilities (see Note 23.1) ...... 504 21,052 Accounts payable ...... 473,690 409,730 Other payables ...... 111,797 104,017 Deferred income ...... 1,616 1,357

Total current liabilities ...... 588,607 536,156

The “Other liabilities” item corresponds primarily to tax and social security liabilities of €71.7 million, including €46.7 million in VAT, €22.0 million in advances and down payments received, and €17.6 million in shareholders’ current accounts. A PAI invoice in the amount of €15.3 million relative to the cost of the acquisition of the Kaufman & Broad shares was classified under non-current liabilities as its maturity is from one to five years.

Additional Information NOTE 26—NOTES TO THE STATEMENT OF CASH FLOWS DETAILS OF THE CHANGE IN OPERATING WORKING CAPITAL REQUIREMENTS

Nov. 30, Change in Change in scope Other Nov. 30, (in € thousands) 2011 WCR of consolidation changes 2012

Inventories ...... 239,869 44,262 239 1,378 285,798

Accounts receivable ...... 305,673 -37,484 268,189 Accounts payable ...... -425,016 -62,535 -364 -1,062 -488,977

Other ...... 39,198 -5,998 75 33,275

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Nov. 30, Change in Change in scope Other Nov. 30, (in € thousands) 2011 WCR of consolidation changes 2012

Operating working capital requirement (Statement of cash flows) ...... 159,724 -61,755 -50 316 98,285

Current CIT ...... 36,971 -2,370 34,601

Working capital requirement ...... 196,695 -64,125 -50 316 132,886

The change in operating working capital requirements (excluding current CIT) amounted to €61.8 million between December 1, 2010 and November 30, 2012. The amount of inventories on the balance sheet, i.e., €285.8 million includes an allocation of a share of the acquisition price for €1.3 million.

NOTE 27—OFF-BALANCE SHEET COMMITMENTS As of November 30, 2012, Management believes, to the best of its current knowledge, that there are no commitments likely to have a material impact on the current or future financial position of the Group, other than those indicated in Note 23.1.

27.1 COMMITMENTS GIVEN Pledges All of Kaufman & Broad SA’s equity securities have been pledged in favor of the lending institutions to guarantee the commitments of Financière Gaillon 8 under the financing. Financière Gaillon 8 has signed the following agreements: • a pledge of the credit balance of its bank accounts under an agreement between Financière Gaillon 8 and Calyon, • a pledge of a financial instruments account opened in the name of Financière Gaillon 8 in which are recorded all the Kaufman & Broad shares held by the company, and • an agreement for the assignment of trade receivables as guarantee on the intra-Group receivables of Financière Gaillon 8 from its subsidiaries, between Financière Gaillon 8 and Calyon. Security interests have been granted by Kaufman & Broad SA to guarantee its commitments for the financing set up in July 2007.

Total % of Final Amount of Kaufman & Broad SA expiration assets Balance sheet balance sheet as of Type of pledge/lien Start date date pledged(b) item total Nov. 30, 2012

Pledge of financial instruments account —100% of Kaufman & Broad Homes SAS shares held by the company ...... July 11, 2007 (a ) € 10,450,195 € 10,450,195 2%

Pledge of the credit balance in the Kaufman & Broad SA bank accounts ...... July 11, 2007 (a ) € 211,169 € 211,169 0%

Framework agreement for the assignment of intra-group trade receivables from Kaufman & Broad SA’s subsidiaries, in particular Kaufman & Broad Financement SNC ...... July 11, 2007 (a ) — — —

Pledge of 100% of Kaufman & Broad (a ) Europe SA shares ...... € 217,436,878 € 217,436,878 44% F-91

Total % of Final Amount of Kaufman & Broad SA expiration assets Balance sheet balance sheet as of Type of pledge/lien Start date date pledged(b) item total Nov. 30, 2012

Total ...... € 228,098,242 € 228,098,242 46%

(a) These pledges are intended to be maintained until full payment of the amounts and fees owed by the company as borrower and guarantor under the Senior Facilities Agreement and ancillary agreements. (b) Net book value in the individual company financial statements as of November 30, 2012.

Guarantees and bonds given All the items detailed below are related to the normal course of Kaufman & Broad’s operations and have been provided by the Kaufman & Broad Group.

November 30, November 30, (in € thousands) 2012 2011

Performance bonds(a) ...... 268,062 215,873 Hoguet Law guarantees (b) ...... 220 220 Order indemnities(c) ...... 17,014 9,144 Other guarantees given(d) ...... 64,004 51,935

Guarantees and bonds given ...... 349,300 277,172

(a) Financial performance bonds are given to customers in sales before completion (VEFA sales). Kaufman & Broad asks a financial institution, mutual guarantee institution or insurance company to issue a guarantee of completion in favor of the Kaufman & Broad customers. These guarantees are established on a transaction by transaction basis and have a term comparable to the transaction completion term. In consideration for such guarantees, Kaufman & Broad typically gives such financial institutions or insurance companies a mortgage commitment and a non- assignment of shares undertaking if the program is funded by a special-purpose entity.

Performance bonds are shown on the balance sheet in the amount of the risk incurred by the financial institution issuing such guarantees. Such risk is valued, for each transaction, as follows: program’s forecast production cost less the part financed by the Group and the amount of sales signed as of the closing date. This valuation thus does not take into account orders made as of the closing date or the percentage of completion of construction on lots not sold.

(b) The Hoguet Act guarantees are required from companies intending to operate as a real estate agent. This purely ad-hoc operation does not form part of the Group’s strategy. (c) Order indemnities are bank guarantees given in lieu and in place of security deposits in connection with land acquisition commitments. (d) These other guarantees principally cover acquisitions of land and matters related to roads and infrastructure.

Commitments related to capital expenditures, purchases and rentals These commitments were given by the Kaufman & Broad Group.

Payments due by maturity

Nov. 30, Less than 1 to 5 More than Nov. 30, (in € thousands) 2012 one year years 5 years 2011

Commitments for leases...... 50,324 6,902 24,863 18,559 50,805

Capital expenditure commitments ...... 22

Total ...... 50,324 6,902 24,863 18,559 50,827

This table includes the commitment given by the Kaufman & Broad Group in connection with a 9-year lease of its offices in a real estate transaction initiated by the Group beginning with the delivery of the building envisages for June 2014, for annual rental payments of €3.2 million, i.e., a total of €28.6 million. However, the Group reserves the right to find another lessee, who would bring this commitment to an end.

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Commitments for leases The table below shows, as of November 30, 2012, the minimum future rents on leases not subject to any termination:

November 30, November 30, (in € thousands) 2012 2011

2012 ...... 5,805 2013 ...... 6,902 5,725 2014 ...... 7,733 8,535 2015 ...... 7,866 4,274 2016 ...... 5,042 4,134 2017 ...... 4,222 4,048 2018 and beyond ...... 18,559 18,284

Total minimum future rents ...... 50,324 50,805 The rent expense recognized on the income statement at November 30, 2012 for operating leases amounted to €6.4 million (€5.7 million at November 30, 2011). The Group’s finance leasing agreements are capitalized. 27.2 COMMITMENTS RECEIVED Work guarantees All items detailed below are related to the normal course of operations of the Kaufman & Broad Group.

(in € thousands) Nov. 30, 2012 Nov. 30, 2011

Guarantees on work contracts ...... 108,929 81,408

Unutilized syndicated lines of credit

(in € thousands) Nov. 30, 2012 Nov. 30, 2011

Unutilized RCF line(a) ...... 52,900 102,900

The amount of this line maturing in July 2014 was reduced in fiscal year 2012 by 50 million as part of Supplemental Agreement No. 8 to the Senior Facilities Agreement signed in October 2012 (see Significant events during the period).

27.3 CONTINGENT ASSETS AND LIABILITIES The dispute that originated in 1996 over the Roissy Park development, where a Kaufman & Broad SA subsidiary was accused of faulty workmanship and miscellaneous defects, saw no significant developments over the course of the fiscal year. No provision was recognized for this proceeding, the updated amount of which totals €6.5 million, excluding any late penalties, as the remedies of Kaufman & Broad appear to be preserved. The concession agreement granted to Kaufman & Broad on a real estate project launched by the Group in 2012 is being challenged. Procedures related to this challenge are in progress at the balance sheet date. A €1.1 million margin on sales related to the transaction, which was concluded under conditions precedent and rescission, was recognized as of November 30, 2012. Since the cancellation risk for the concession agreement is considered low, no provision has been recorded in the financial statements.

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NOTE 28—EXPOSURE TO MARKET RISKS AND FINANCIAL INSTRUMENTS 28.1 MANAGEMENT OF INTEREST RATE RISK The policy for managing interest rate risk is intended to limit and control fluctuations in interest rates and their impact on net earnings and cash flow, so that the total cost of the debt remains acceptable. To achieve this objective, the Group hedges its variable-rate loan interest flows with interest-rate swaps. Swaps are derivatives serving to hedge cash flows. They are marked to market on the balance sheet. The Group applies hedge accounting. Under the Senior Facilities agreement, the Group also agreed to keep hedges in place in the amount of 50% of borrowings. Interest rate hedges are made by way of instruments listed on organized markets or over-the-counter with high-quality counterparties. The following table contains details of the portfolio of one-month Euribor lender/fixed-rate borrower swaps as at November 30, 2012.

Notional amount Market value in millions at November 30, 2012 Type of euros Fixed rate End of term Type in % of face amount

EUR 1m fixed rate swap 50 0.202% Nov. 30, 2012 –Nov. 30, 20 Hedge -0.10% EUR 1m fixed rate swap 50 0.218% Nov. 30, 2012 – Nov. 30, 20 Hedge -0.14% EUR 1m fixed rate swap 50 0.240% Nov. 30, 2012 – Nov. 30, 20 Hedge -0.18%

Total ...... 150

The fair value of these derivatives is provided by a specialized company outside the Group (level 2 valuation as defined by IFRS 7). The hedging reserve in equity as of November 30, 2012 amounted to -€139,000. The exposure of the Group’s net debt is:

Type of instrument Variable/Fixed Less than one year 1 to 5 years More than 5 years

Seniors B and C ...... Variable 489,663

Credit facilities...... Variable 454

Financial liabilities ...... 454 489,663 0

Bank balances and cash on hand ...... Variable 88,626

Short-term investments ...... Variable 63,324

Order balances ...... Variable 3,837

Financial assets ...... 155,787 0 0

Net position before management ...... -155,333 489,663 0

Swap ...... 0 -150,000

Off-Balance sheet items ...... 0 -150,000 0

Net position after management ...... -155,333 339,663 0

28.2 MANAGEMENT OF CURRENCY RISK The Group does not have exposure to foreign exchange risk as all of its assets and liabilities and its flows are denominated in euros.

28.4 MANAGEMENT OF COUNTERPARTY RISK

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The counterparty risks primarily concern Kaufman & Broad suppliers and subcontractors, Kaufman & Broad customers and banking counterparties. Because of the large number of suppliers and subcontractors, their insolvency is unlikely to have any material impact on operations. The Group considers that the counterparty risk on accounts receivable is very limited because of the large number of customers and the fact that sales are signed exclusively before a civil-law notary, generally after the financing for the property acquisition has been secured. Customer-related credit risks are managed by the agencies under the oversight of corporate headquarters. Due to the nature of its business, the Group’s exposure to customer default risks is low. Aging receivables are reviewed monthly. The Group invests its cash and cash equivalents and its investment securities with top-tier financial institutions. The Group also enters into interest rate agreements with leading financial institutions. For programs developed jointly with partners, the consequences of the measures taken in 2009, whose impacts were felt in 2010 (particularly a reduction in sale prices), continue to pose the risk that the Group may have to cover their insolvency in the financing of such programs and, as applicable, their share of the losses in non-profitable developments.

28.5 MANAGEMENT OF LIQUIDITY RISK The table below shows the Group’s contractual obligations for payment of interest, repayment of financial debt, derivatives excluded, and the derivatives with their positive or negative fair values. Variable rate interest payments were calculated on the basis of the latest interest rates known prior to November 30, 2012.

Book Less than More than value one year 1 to 5 years 5 years (in € thousands) Nov. 30, 2012 Interest Repayments Interest Repayments Interest Repayments

Borrowings and financial

liabilities

Syndicated lines of credit ...... 489,663 31,103 0 68,430 489,663 Credit facilities and other

borrowings ...... 458 0 458

Fair value of derivatives

Total ...... 490,121 31,103 458 68,430 489,663 0 0 The interest flows are paid monthly and take into account the swaps taken out in November 2012 and classified as hedging instruments. Details on the syndicated credit are provided in Note 23.

28.6 BOOK VALUE OF FINANCIAL INSTRUMENTS BY IAS 39 CATEGORIES We detail below the main methods and assumptions used in order to determine the fair market value of financial instruments.

LOANS AND RECEIVABLES, FINANCIAL ASSETS AVAILABLE FOR SALE The Group believes that the balance sheet value of cash, accounts receivable and accounts payable is the value most representative of their market value because of the high level of liquidity of these items.

DEBT AT AMORTIZED COST Non-current financial liabilities are variable-rate. The Group believes that their fair value was close to their book value.

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Fair value Fair value Assets Debt at Book through through sh. available for Loans and amortized November 30, 2012 value income equity sale receivables cost

Financial assets Accounts receivable ...... 268,189 268,189

Cash and cash equivalents ...... 155,787 155,787 Current tax ...... 34,601 34,601 Other current receivables ...... 145,667 145,667 Other non-current financial assets 1,262 1,262

Total financial assets ...... 605,506 155,787 0 0 449,719 0

Financial liabilities

Loans and financial debts ...... 522,806 212 522,594

Supplier payables ...... 488,976 488,976

Other current liabilities ...... 113,413 113,413

Total financial liabilities ...... 1,125,195 0 212 0 0 1,124,983

NOTE 29—RELATED-PARTY TRANSACTIONS The consolidated financial statements include the financial statements of Financière Gaillon 8, of Kaufman & Broad SA and its subsidiaries.

Parent company and entity with significant influence over the Group The Financière Gaillon 8 Group is controlled by the Luxembourg company Financière Daunou 10, an investment vehicle for funds managed by PAI partners. As of November 30, 2008, Financière Daunou 10 had disbursed to Financière Gaillon 8 funds in the amount of €284.6 million under a shareholder loan in application of a shareholder loan agreement dated July 9, 2007, amended by a supplemental agreement dated September 19, 2007. On June 30, 2009, Financière Gaillon 8 (the company) had an equity increase through the capitalization of receivables from the company held by Financière Daunou 10 S.à.r.l. under the various shareholder loans that it has granted to the company, which resulted in the issue of ordinary shares of the company at its profit. Concurrently with these transactions involving the company’s capital, a shareholder’s agreement was signed on June 30, 2009 between the company, PAI Partners, Financière Daunou 10 S.à.r.l., Calyon and ML IBK Positions, Inc., aimed at organizing the relationship among the financial shareholders within the company. A shareholder loan agreement was further signed between the company and Financière Daunou 10 S.à.r.l. under which the latter disbursed to the company a principal amount of €4,900,000. The transactions conducted between Financière Gaillon 8 and Kaufman & Broad SA were authorized by the Board of Directors of the two companies; they are presented under related-party transactions: They pertain to a Service Agreement set up in March 2008. No other entity exercises significant influence over the Financière Gaillon 8 Group. Relationships with the senior manager of the Kaufman & Broad Group All ownership interests held by certain corporate officers and employees of the Kaufman & Broad Group in the company are combined within Financière de Neuilly. On June 30, 2009, Financière Daunou 10 S.à.r.l. tendered to Financière de Neuilly the ownership interest it held in the company as reserve with a view to allocating it to the new managers; it also transferred to Financière de Neuilly, 210,473,105 company shares. Considering the company’s capital restructuring transactions and the restructuring of its shareholding structure, a shareholders’ agreement superseding the shareholders’ agreement signed in 2007 was signed on June 30, 2009, between the F-96

company, Financière Daunou 10 S.à.r.l., Financière de Neuilly, and the employers and managers of the Kaufman & Broad Group. In fiscal year 2012 the Group did not grant any loans to the members of its administrative and management bodies.

COMPENSATION OF MEMBERS OF THE GOVERNING AND MANAGEMENT BODIES The table below shows the fiscal year 2012 Kaufman & Broad compensation of persons who at the fiscal year end or during the fiscal year ended November 30, 2012 were members of the administrative and management bodies of the Kaufman & Broad Group.

November 30, November 30, (in € thousands) 2012 2011

Short-term benefits other than employer contributions(a) ...... 4,264 4,118 Short-term benefits: employer contributions ...... 34 1,966 Post-employment benefits—balance sheet impact(b) ...... NA 886 Other long-term benefits(c) ...... NA NA Retirement indemnities ...... NA NA Directors’ fees(d) ...... 208 216 Share-based payments...... 0 0 Stock option awards (number) ...... 0 0 Bonus share awards (number) ...... 0 22,000

(a) Include gross salaries, compensation, bonuses, incentives, profit-sharing and in-kind benefits paid for the fiscal year.

Compensation relates to members of the Management Committee. (b) Services rendered representing a retirement benefit. (c) Other compensation vested but due in the long term. (d) Compensation paid only to non-executive corporate officers.

RELATED PARTY TRANSACTIONS Related party agreements authorized or amended since the 2011 fiscal year-end: 1. Senior Facilities Agreement To finance the acquisition of Kaufman & Broad SA and to enable the company, Kaufman & Broad SA and its subsidiaries, among other things (i) to refinance their existing debt, (ii) to meet their working capital requirements and general operating requirements and (iii) to finance the investments and acquisitions of the Kaufman & Broad Group, senior facilities were disbursed to the company and to Kaufman & Broad SA under a “Senior Facilities Agreement” (drafted in English) signed on July 9, 2007 (as amended by supplemental agreement of July 27, 2007), by, inter alia, the company as the original borrower and original joint surety, Calyon and Merrill Lynch International as the mandated legal arrangers, Calyon as agent and a Group of financial institutions (the “Senior Facilities Agreement”). It should be noted that Kaufman & Broad S.A. became party to the Senior Facilities Agreement as additional borrower and additional joint surety by accession letter dated July 10, 2007 and Kaufman and Broad Homes S.A.S. became party to the Senior Facilities Agreement as additional joint surety by accession letter dated November 9, 2007. Under the Senior Facilities Agreement, the Banks named in said Agreement granted to the company: (a) a term credit facility B1 (Facility B1) for up to €43.10 million; (b) a term credit facility B2 (Facility B2) for up to €146.90 million; (c) a term credit facility C1 (Facility C1) for up to €43.10 million; (d) a term credit facility C2 (Facility C2) for up to €146.90 million; (d) a term bridge facility (Bridge Facility 1) for up to €26.40 million, (e) a term bridge facility (Bridge Facility 2) for up to €26.10 million and (f) a revolving credit facility (Revolving Facility) for up to €200 million.

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The Senior Facilities Agreement had three supplemental agreements signed during the fiscal year ended November 30, 2009:

1.1. Supplemental Agreement No. 2 to the Senior Facilities Agreement signed on January 23, 2009 : The purpose of Supplemental Agreement No. 2 to the Senior Facilities Agreement was to reflect the terms and conditions of the agreement signed by Financière Gaillon 8, Kaufman & Broad S.A. and the senior lenders on December 26, 2008, under the name “Heads of Agreement”, relative to the credit lines granted to the Kaufman & Broad S.A. Group. The signature of that Supplemental Agreement was authorized by the company’s Board of Directors on January 23, 2009.

1.2. Supplemental Agreement No. 3 to the Senior Facilities Agreement signed on June 30, 2009: At the time of signature of the aforementioned Supplemental Agreement No. 2, no global agreement had been found relative to the lines of credit granted to the company. The purpose of Supplemental Agreement No. 3 to the Senior Facilities Agreement was to reflect the terms and conditions of the agreement signed by Financière Gaillon 8, Kaufman & Broad S.A. and the senior lenders on May 27, 2009, under the name “Heads of Agreement”, relative to the credit lines granted to the Kaufman & Broad S.A. Group. The signature of that Supplemental Agreement was authorized by the company’s Board of Directors on June 30, 2009.

1.3. Supplemental Agreement No. 4 to the Senior Facilities Agreement signed on November 25, 2009: In the context of the relaunch of the Kaufman & Broad Group’s business in the second half of 2009 and in anticipation of a continued trend in that sense in the following months, a Supplemental Agreement No. 4 to the Senior Facilities Agreement was signed by the company; the purpose of that Supplemental Agreement was among other things: • replacement of the cash-flow hedging with a minimum cash flow amount, to be tested quarterly as from May 31, 2010; • partial early repayments of the loans by Kaufman & Broad SA; • alignment of interest rate hedging under the Senior Facilities Agreement to the new market conditions. In that respect, it is provided for Kaufman & Broad SA’s option to cancel the existing swaps and to set up new interest- rate swaps; • amendment to the terms of the clean-down obligation of Kaufman & Broad SA following the cancellation in its entirety of the liquidity and acquisition line. The signature of that Supplemental Agreement was authorized by the company’s Board of Directors on 24 November 2009.

1.4. Supplemental Agreement No. 5 to the Senior Facilities Agreement signed on March 10, 2010 Supplemental Agreement No. 5, signed on March 10, 2010, modified the financial definitions of EBITDA, cash flow and net cash interest stipulated by the Senior Facilities Agreement in order to neutralize the effects of IAS 23 (Borrowing Costs) on these ratios and to ensure for the financial parties the same protection they received under the contract before the application of this standard. The signature of this Supplemental Agreement to the Senior Facilities Agreements was authorized by the Board of Directors on 18 February 2010.

expiration, in exchange for payment by these lenders of a cancellation commission in accordance with specific terms and conditions, in particular that the principal amount could not exceed €75 million and the cancellations could be made on one or more occasions without limitation and would need to take place at the latest by February 29, 2012. The signing of Supplemental Agreements No. 6 and No. 7 to the Senior Facilities Agreement was authorized by the Board of Directors on 21 July 2011.

1.6. Supplemental Agreement No. 8 to the Senior Facilities Agreement signed on October 17, 2012: Supplemental Agreement No. 8 signed on October 17, 2012 provides that Financière Gaillon 8 may start repaying a portion of its fixed term debt under the Senior Facilities Agreement in amounts less than the face amount of said debt, this discount taking the form of waivers of receivables granted by the relevant lenders, in accordance with specific terms and conditions, in particular that the amount repaid must be financed through a distribution of dividends to be made by Kaufman & Broad by February 28, 2013, that the total of the net dividend income applied as repayment to the senior debt within a reversed bidding procedure cannot exceed € 44 million and that the repayments must be made on one or several occasions no later than February 28, 2013. The signing of Supplemental Agreement No. 8 to the Senior Facilities Agreement was authorized by the Board of Directors on October 17, 2012. The various effects on the consolidated financial statements are specified in Note 23.

Related-party transactions approved during prior fiscal years that continued in fiscal year 2012 2. “Managers” Shareholders’ Agreement of June 30, 2009 between the company, Financière Daunou 10 S.à.r.l., Financière de Neuilly and the partners of Financière de Neuilly Pursuant to the agreement on the amendments to be made to the shareholders’ agreement of the company signed on December 3, 2007, on June 30, 2009 the company signed with Financière Daunou 10 S.à.r.l., Financière de Neuilly and the partners of Financière de Neuilly a shareholders’ agreement that incorporates the amendments that the direct and indirect shareholders of the company agreed to make to the company’s shareholders’ agreement of December 3, 2007, to take into account the planned restructuring. The purpose of that shareholders’ agreement which supersedes the Shareholders’ Agreement signed on December 3, 2007 is to organize the relationships within the company between Financière Daunou 10 and the Group’s managers and Financière de Neuilly, and to stipulate and organize the circumstances and conditions under which the managers of the Group will have the right or the obligation to sell some of the shares issued by Kaufman & Broad, which they hold. The signature of that shareholders’ agreement was authorized by the Board of Directors on June 30, 2009.

3. Shareholder’s loan agreement of June 30, 2009 between Financière Daunou 10 S.à.r.l., as lender and the company, as borrower Under a shareholder loan agreement dated June 30, 2009, Financière Daunou 10 S.à.r.l. disbursed to the company a principal amount of €4,900,000 in the form of a shareholder loan, the purpose of which was to enable the company to finance its existing liquidity commitments, all the costs and fees related to the restructuring and its operating costs and current expenses. Said loan bears no interest and will be repayable as from the date of transfer of all the Kaufman & Broad SA shares by the company and will be subordinated to the payment of all sums due by the company under the senior debt. The signature of this agreement was authorized by the Board of Directors on June 30, 2009.

4. Agreement relative to the application of Article L.225-248 of the French Commercial Code to the company On June 30, 2009, the company signed an agreement with PAI Partners, Financière Daunou 10 S.à.r.l., Financière de Neuilly, the partners of Financière de Neuilly, the company’s senior lenders, Calyon and Merrill Lynch International Limited, London Subsidiary as mezzanine creditors, and Calyon and ML IBK Positions, Inc. as holders of preferred company shares, in relation to the application of Article L.225-248 of the French Commercial Code and to the commitments made in relation thereto by the parties to that agreement.

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The signature of that agreement was authorized by the Board of Directors on June 30, 2009.

5. Supplemental Agreement No. 1 and No. 2 to the subordination agreement of January 23, 2009 and June 30, 2009, respectively Under the Senior Facilities Agreement, the company signed on July 9, 2007 a subordination agreement among the senior lenders, Financière Daunou 10 S.à.r.l, Calyon as senior credit agent, Merrill Lynch International Bank Limited, London subsidiary as mezzanine credit agent, the mezzanine lenders (the “Subordination Agreement”), the purpose of which is, among other things, to manage the order and conditions of repayment of the sums borrowed. Kaufman & Broad S.A. became party to the Subordination Agreement as additional borrower and additional joint surety by accession instrument dated July 10, 2007 and Kaufman and Broad Homes S.A.S. became party to the Subordination Agreement as additional joint surety by instrument dated November 9, 2007. The Subordination Agreement had two supplemental agreements signed during the fiscal year ended November 30, 2009:

5.1. Supplemental Agreement No. 1 to the Subordination Agreement signed on January 23, 2009: The signature of Supplemental Agreement No. 2 to the Senior Facilities Agreement and the aforementioned agreements relative to the financial restructuring of the company required the amendment of the Subordination Agreement. An amendment to that agreement was signed for that purpose on January 23, 2009.

5.2. Supplemental Agreement No. 2 to the Subordination Agreement signed on June 30, 2009: The signing of Supplemental Agreement No. 3 to the Senior Facilities Agreement and the aforementioned agreements relative to the financial restructuring of the company required the amendment of the Subordination Agreement. An amendment to that agreement was signed for that purpose on June 30, 2009. In application of Articles L.225-38 and l.225-40 of the French Commercial Code, the signature of that agreement was authorized by the company’s Shareholders’ Meeting on June 30, 2009 since the Board members were unable to vote in the proceedings of the company’s Board of Directors on June 30, 2009.

6. Service Agreement of February 28, 2008 On February 28, 2008, the company SA signed an agreement, effective March 1, 2008, between Kaufman & Broad SA and the main subsidiaries of Kaufman & Broad SA pursuant to which the companies assigned a support and consulting function to Financière Gaillon 8 for, among other things, the preparation of consolidated reports, forward-looking financial plans, of budgets and forecasts, the preparation of the consolidated financial statements, the provision of tools and systems required for the performance of reporting and management tools. In consideration for services performed, Kaufman & Broad SA and its main subsidiaries pay the company fees equal to 100% of the direct and indirect costs incurred by the company for the services under this agreement, plus an additional 5%. These fees, apportioned among Kaufman &Broad Group companies using an allocation key defined in the agreement, came to €707,000 at November 30, 2012. The signature of this agreement was authorized by the Board of Directors on 28 February 2008.

7. Administrative Support Agreement with Kaufman & Broad SA dated October 5, 2007 On 5 October 2007, the Company signed an agreement to define the conditions under which Kaufman & Broad SA would provide the Company with the material and human resources necessary to perform administrative, financial, accounting and legal services. These services are invoiced on the basis of strict equivalence with the cost incurred by Kaufman & Broad SA for providing those employees by GIE Kaufman & Broad. The company recognized fees of €20,600 for fiscal year 2012. F-100

8. Shareholders’ Agreement of the Mezzanine lenders of June 30, 2009 signed by the company, PAI Partners, Financière Daunou 10 S.à.r.l., Calyon and ML IBK Positions Inc. The mezzanine lenders, Calyon and ML IBK Positions Inc., became shareholders of the company at the completion of their subscription to a capital increase of the company carried out on June 30, 2009, since the subscription took place through offset of the company’s debt to them under a mezzanine credit agreement dated July 27, 2007, signed between the company, Calyon and Merrill Lynch International Bank. At the completion of that subscription, Calyon and ML IBK Positions, Inc. signed with the company, Financière Daunou 10 S.à.r.l. and PAI Partners a shareholders’ agreement the purpose of which is to organize the relationships between the parties within the company and, in particular, to set the rules applicable to (i) transfers of the Kaufman & Broad SA shares held by the company, (ii) transfer of preferred shares held by the Mezzanine lenders. The signature of that shareholders’ agreement was authorized by the Board of Directors on June 30, 2009.

NOTE 30—POST-CLOSING EVENTS None

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NOTE 31—INFORMATION ABOUT THE KAUFMAN & BROAD GROUP The consolidated financial statements of Kaufman & Broad as of November 30, 2012 were approved by the Board of Directors at its meeting of February 15, 2013 as presented below:

STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME Consolidated Income Statement

(in € thousands) Nov. 30, 2012 Nov. 30, 2011

Revenues ...... 1,030,046 1,044,255 Cost of sales ...... -827,912 -841,460

Gross margin ...... 202,134 202,795

Selling expenses...... -29,242 -27,375 Administrative expenses ...... -62,935 -62,086 Technical and customer service expenses ...... -16,301 -15,634 Other expenses ...... -9,326 -10,026 Other income ...... 951 1,395

Current operating profit ...... 85,281 89,069

Other non-recurring income ...... 1,538 1,734 Other non-recurring expenses ...... -10 -952

Operating income ...... 86,809 89,851

Financial expenses ...... -5,918 -15,141 Financial income ...... 1,797 3,619

Cost of net financial debt ...... -4,121 -11,522

Other interest expense ...... -1,109 -2,444 Other financial income...... 1,000 9,359

Pre-tax income of consolidated companies ...... 82,579 85,244

Income tax ...... -25,814 -28,709

Net income of consolidated companies ...... 56,765 56,535

Share of income (loss) of equity affiliates and joint ventures ...... -61 955

Income (loss) attributable to shareholders ...... 56,704 57,490

Income from minority interests ...... 9,080 9,977 Income attributable to shareholders ...... 47,624 47,513 Average number of shares ...... 21,135,155 21,381,864

Earnings per share ...... € 2.25 € 2.22

Diluted earnings per share ...... € 2.25 € 2.22

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Consolidated net comprehensive income

(in € thousands) Nov. 30, 2012 Nov. 30, 2011

Income (loss) attributable to shareholders ...... 56,704 57,490

Change in gross value of derivative instruments ...... 2,271 1,192 Tax impact on derivative instruments ...... -785 -410 Deferral of fair value of swaps unwound at the end of 2009 ...... — 1,812 Tax effect of swaps unwound at the end of 2009 ...... — -581 Change in actuarial gains and losses ...... -1,566 -453 Tax effect on actuarial gains and losses ...... 539 156

Total gains and losses recognized directly in equity ...... 460 1,716

Consolidated net comprehensive income ...... 57,164 59,206

Attributable ...... 48,084 52,229 Minority interests ...... 9,080 9,977

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STATEMENT OF CONSOLIDATED FINANCIAL POSITION Assets

(in € thousands) Nov. 30, 2012 Nov. 30, 2011

Goodwill ...... 68,511 68,511 Intangible assets ...... 84,897 83,010 Property, plant and equipment ...... 5,604 5,883 Equity affiliates and joint ventures ...... 4,373 3,473 Other non-current financial assets ...... 1,262 2,551

Non-current assets ...... 164,647 163,428

Inventories ...... 284,469 235,556 Accounts receivable ...... 268,189 305,673 Other receivables ...... 143,161 141,260 Other financial receivables ...... 2,379 11,535 Current tax ...... 34,601 36,971 Cash and cash equivalents ...... 153,763 138,878 Prepaid expenses ...... 1,008 805

Current assets...... 887,570 870,678

Total Assets ...... 1,052,217 1,034,106

Equity and Liabilities

(in € thousands) Nov. 30, 2012 Nov. 30, 2011

Capital stock ...... 5,612 5,612 Reserves related to capital ...... 979 979 Attributable reserves ...... 156,886 111,001 Other reserves ...... -12,177 -12,274 Treasury shares ...... -9,778 -4,455 Interim dividends ...... -48,455 — Attributable net income ...... 47,624 47,513

Attributable shareholders’ equity ...... 140,691 148,376

Minority interests ...... 8,420 8,470

Shareholders’ equity ...... 149,111 156,846

Non-current provisions ...... 24,510 24,424 Borrowings and other non-current financial liabilities ...... 234,535 283,284 Deferred taxes ...... 55,586 35,205

Non-current liabilities ...... 314,631 342,913

Current provisions ...... 1,000 — Other current financial liabilities ...... 458 19,337 Accounts payable ...... 473,624 409,668 Other payables ...... 111,777 103,985 Deferred income ...... 1,616 1,357

Current liabilities ...... 588,475 534,347

Total Liabilities & Shareholders’ Equity ...... 1,052,217 1,034,106

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Financière Gaillon 8 Year ended November 30, 2011

Statutory auditors’ report on the consolidated financial statements

ERNST & YOUNG et Autres

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Financière Gaillon 8 Year ended November 30, 2011

Statutory auditors’ report on the consolidated financial statements

To the Shareholders, In compliance with the assignment entrusted to us by your articles of association, we hereby report to you, for the year ended November 30, 2011, on: • the audit of the accompanying consolidated financial statements of Financière Gaillon 8; • the justification of our assessments; • the specific verification required by law. These consolidated financial statements have been approved by the board of directors. Our role is to express an opinion on these consolidated financial statements based on our audit.

I. Opinion on the consolidated financial statements We conducted our audit in accordance with professional standards applicable in France; those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit involves performing procedures, using sampling techniques or other methods of selection, to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made, as well as the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. In our opinion, the consolidated financial statements give a true and fair view of the assets and liabilities and of the financial position of the Group as at November 30, 2011 and of the results of its operations for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union.

II. Justification of our assessments In accordance with the requirements of article L. 823-9 of the French commercial code (Code de commerce) relating to the justification of our assessments, we bring to your attention the following matters: • your company recognizes revenues and margins on sales before completion (VEFA) in accordance with the accountings method described in note 1.20 to the consolidated Financial Statements. The revenue and margin recognized arte therefore contingent on the estimates at completion made by the Company. Our works consisted in examining the reasonableness of the assumptions on which these estimates are based and reviewing the calculations performed by the Company; • at the end of each reporting period your Company performs an impairment test on goodwill and the Kaufman & Broad brand name according to the method described in note 1.8 to the consolidated financial statements. We have examined the procedures for this impairment test as well as the assumptions used by the Company and we have verified that note 15 to the consolidated financial statements provides an appropriate disclosure. These assessments were made as part of our audit of the consolidated financial statements taken as a whole, and therefore contributed to the opinion we formed which is expressed in the first part of this report.

III. Specific verification As required by law we have also verified in accordance with professional standards applicable in France the information presented in the Group’s management report.

We have no matters to report as to its fair presentation and its consistency with the consolidated financial statements.

Paris-La Défense, May 11, 2012 F-106

The statutory auditors ERNST & YOUNG et Autres French original signed by

Gilles Cohen

Financière Gaillon 8 Year ended November 30, 2011

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FINANCIERE GAILLON 8 SA STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME

(in € thousands) Note Nov. 30, 2011 Nov. 30, 2010

Revenues ...... 4 1,044,255 935,702 Cost of sales ...... -847,278 -794,172

Gross margin ...... 196,977 141,530

Selling expenses...... 5 -27,375 -22,651 Administrative expenses ...... 6 -62,233 -57,612 Technical and customer service expenses ...... 7 -15,634 -14,370 Other expenses ...... 8 -10,026 -3,843 Other income ...... 8 1,395 1,656

Current operating profit ...... 83,104 44,710

Other non-recurring income ...... 9 1,734 4,319 Other non-recurring expenses ...... 9 -952 -189

Operating income ...... 83,886 48,840

Financial expenses ...... -41,857 -62,285 Financial income ...... 3,619 1,407

Cost of net financial debt ...... 10 -38,238 -60,878

Other interest expense ...... 11 -2,444 -374

Other financial income...... 11 9,359

Pre-tax income of consolidated companies ...... 52,563 -12,412

Income tax (expenses)/income ...... 12 -26,707 -517

Net income of consolidated companies ...... 25,856 -12,929

Share of income (loss) of equity affiliates and joint ventures ...... 955 633 Income/loss from assets held for sale ...... -1,000

Income (loss) attributable to shareholders ...... 26,811 -13,296

Minority interests ...... 21.4 15,165 16,228 Income attributable to shareholders ...... 11,646 -29,524

Number of shares ...... 13 1,366,109,921 1,366,109,921

Earnings per share ...... 13 0.009 -0.022

Diluted earnings per share ...... 13 0.009 -0.022

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STATEMENT OF OTHER ITEMS OF COMPREHENSIVE INCOME

(in € thousands) Nov. 30, 2011 Nov. 30, 2010

Income (loss) attributable to shareholders ...... 26,811 -13,296 Change in fair value of derivative instruments, gross ...... 1,192 -3,675 Tax impact on hedging instruments ...... -410 1,267 Deferral of fair value of swaps unwound at the end of 2009 ...... 3,560 19,182 Tax impact on swaps unwound at the end of 2009 ...... -581 -3,811 Net on derivative instruments ...... 3,761 12,963 Actuarial gains and losses for the period ...... -461 -586 Tax impact on actuarial gains and losses for the period ...... 157 201 Net on actuarial gains and losses ...... -304 -385

Total gains and losses recognized directly in equity ...... 3,457 12,578

Comprehensive net profit (loss) ...... 30,268 -718

Attributable ...... 15,804 -18,331

Minority interests ...... 14,464 17,613

For fiscal year 2011, the change in the fair value of derivative instruments includes the impact of the deferral of the cancellation adjustment of the swaps unwound at the end of 2009 for a total amount of €3.5 million, (impact in the amount of €1.8 million for Kaufman and Broad SA and in the amount of €1.7 million for Financière Gaillon 8). The derivatives set up as of November 30, 2010 at KB SA totaled €1.2 million. For fiscal year 2010, the change in the fair value of derivative instruments includes the impact of the deferral of the cancellation adjustment of the swaps unwound at the end of 2009 for a total amount of €19.2 million, (impact in the amount of €11.1 million for Kaufman and Broad SA and in the amount of €8.1 million for Financière Gaillon 8). The derivatives set up as of November 30, 2010 at Kaufman and Broad SA totaled €3.7 million.

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STATEMENT OF CONSOLIDATED FINANCIAL POSITION

(in € thousands) Note Nov. 30, 2011 Nov. 30, 2010

Goodwill ...... 14 144,370 144,370 Intangible assets ...... 15.1 82,874 82,174 Property, plant and equipment ...... 15.2 5,883 5,988 Equity affiliates and joint ventures ...... 16 3,473 5,359 Other non-current assets ...... 18 2,520 Other non-current financial assets ...... 16 2,551 12,678

Non-current assets ...... 241,671 250,569

Inventories ...... 17 239,869 256,278 Accounts receivable ...... 18 305,673 203,325 Other receivables ...... 18 141,235 161,986 Other financial receivables ...... 18 11,535 6,189 Current tax ...... 19 36,971 33,846 Cash and cash equivalents ...... 20 141,106 142,797 Prepaid expenses ...... 18 817 730

Current assets...... 877,206 805,151

TOTAL ASSETS ...... 1,118,877 1,055,720

(in € thousands) Note Nov. 30, 2011 Nov. 30, 2010

Capital stock ...... 21 37 37 Attributable reserves ...... -127,554 -95,777 Other reserves ...... -8,765 -11,065 Attributable consolidated net income ...... 11,645 -29,524

Attributable shareholders’ equity ...... -124,637 -136,329 Minority interests ...... 21.4 24,987 24,319

Shareholders’ equity ...... -99,650 -112,010 Blocked current accounts ...... 24 4,900 4,900

Shareholders’ equity and blocked current accounts ...... -94,750 -107,110

Provisions ...... 22 24,434 20,966 Borrowings and other non-current financial liabilities ...... 23 601,063 643,665 Other non-current liabilities ...... 25 15,286 Deferred taxes ...... 19 36,687 12,342

Non-current liabilities ...... 677,470 676,973

Other current financial liabilities ...... 25 21,052 2,978 Accounts payable ...... 25 409,730 392,667 Other payables ...... 25 104,017 88,951 Deferred income ...... 25 1,357 1,261

Current liabilities ...... 536,156 485,857

TOTAL EQUITY AND LIABILITIES ...... 1,118,877 1,055,720

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STATEMENT OF CASH FLOWS

(in € thousands) Note Nov. 30, 2011 Nov. 30, 2010

Current operating activities Consolidated net income ...... 26,810 -13,296 Share of net income of associates and joint ventures ...... 16.1 -955 -633 Income from assets held for sale ...... 16.1 1,000 Estimated income and expenses...... 10,089 -703 Cash flow after cost of financial debt and tax ...... 35,944 -13,632 Cost of financial debt ...... 10 38,238 60,878 Other interest expenses (income) ...... 11 -6,915 374 Tax liability (income) ...... 12 26,707 517 Cash flow before cost of financial debt and tax ...... 93,974 48,137 Tax (paid)/received ...... -2,540 8,241 Change in operating working capital requirements ...... 26 -20,994 38,234

Cash flow from operating activities (A) ...... 70,440 94,612

Investing activities Acquisition of tangible and intangible assets (net of disposals) ...... -2,888 -3,508 Acquisition of financial assets (net of disposals) ...... 5,029 -514 Cash flow with equity affiliates and joint ventures ...... 16.1 2,841 12,247 Change in scope of consolidation ...... -418

Cash flow from investing activities (B) ...... 4,564 8,225

Free cash-flow ...... 75,004 102,837

Financing activities Distributions to minority shareholders ...... -13,292 -8,980 Minority interest buybacks ...... -3,315 -2,301 Buyback of treasury shares, net of resales ...... -2,386 Decrease in quasi-equity ...... -47 Change in other financial assets Loan repayments ...... -50,846 -53,666 Net financial interests paid ...... -5,121 -18,474

Cash flow from financing activities (C)...... -74,960 -83,468

Increase (decrease) in cash (A + B + C) ...... 44 19,369

Cash and cash equivalents at the beginning of the period ...... 141,062 121,693 Cash and cash equivalents at the end of the period ...... 141,106 141,062

Increase (decrease) in cash ...... 44 19,369

Cash and cash equivalents ...... 20 141,106 142,797 Credit facilities...... 23.1 -533 -2,245 Interest accrued on cash and cash equivalents ...... 23.1 533 510

Cash and cash equivalents at the end of the period ...... 141,106 141,062

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STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

Number Reserves Attributable Total of shares related to Attributable Other Attributable shareholders’ Minority shareholders’ (in € thousands) outstanding Capital capital reserves reserves income equity interests equity

December 1, 2009 .. 1,366,109,921 37 0 19,813 -23,201 -113,541 -116,892 15,822 -101,070

Allocation of

profit or loss .... -113,541 113,541 0 0 Actuarial gains

(losses) ...... -343 -343 -42 -385 Change in hedging

reserves ...... 11,536 11,536 1,427 12,963 Total expenses and income recognized directly in

equity ...... 11,193 11,193 1,385 12,578 Net income at

Nov. 30, 2010 .. -29,524 -29,524 16,228 -13,296 Total expenses and income

for the period . 11,193 -29,524 -18,331 17,613 -718 Change in scope of

consolidation ... 0 0 Liquidity

commitment ..... -4 -4 -4 Share-based

payments ...... 947 947 117 1,064 Treasury share

transactions ...... 0 0 Buyback of minority

interests ...... -2,048 -2,048 -253 -2,301

Distributions ...... 0 -8,980 -8,980 Increase/(decrease)

in capital ...... 0 0

November 30, 2010 ...... 1,366,109,921 37 0 -95,776 -11,065 -29,524 -136,329 24,319 -112,010

Allocation of

profit or loss .... -29,524 29,524 0 0 Actuarial gains

(losses) ...... -272 -272 -32 -304 Change in hedging

reserves ...... 3,541 220 220

Other transactions .. 889 889 -889 0 Total expenses and income recognized directly in

equity ...... 4,158 4,158 -701 3,457 Net income at

Nov. 30, 2011 .. 11,645 11,645 15,165 26,810 Total expenses and income

for the period . 4,158 11,645 15,803 14,464 30,267 Change in scope of

consolidation ... 0 0 Liquidity

commitment ..... 4 4 4 Share-based

payments ...... -974 -974 -119 -1,093 Treasury share

transactions ...... 0 0 Buyback of minority

interests ...... -3,144 -3,144 -385 -3,529

Distributions ...... 0 -13,292 -13,292 Increase/(decrease)

in capital ...... 0 0

November 30, 2011 ...... 1,366,109,921 37 0 -128,443 -7,876 11,645 -124,637 24,987 -99,650

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SIGNIFICANT EVENTS OF THE PERIOD

GENERAL INFORMATION

NOTE 1 ACCOUNTING METHODS AND PRINCIPAL VALUATION ASSUMPTIONS ...... F-110 NOTE 2 SCOPE OF CONSOLIDATION ...... F-120 NOTE 3 SEGMENT REPORTING...... F-120

STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME

NOTE 4 REVENUES ...... F-120 NOTE 5 SELLING EXPENSES ...... F-121 NOTE 6 GENERAL AND ADMINISTRATIVE EXPENSES ...... F-121 NOTE 7 TECHNICAL EXPENSES AND CUSTOMER SERVICE ...... F-121 NOTE 8 OTHER OPERATING INCOME AND EXPENSES ...... F-122 NOTE 9 OTHER NON-CURRENT EXPENSES AND INCOME ...... F-122 NOTE 10 COST OF NET FINANCIAL DEBT AND OTHER FINANCIAL INCOME AND EXPENSES F-122 NOTE 11 OTHER FINANCIAL EXPENSES ...... F-123 NOTE 12 TAX LIABILITY ...... F-123 NOTE 13 NET EARNINGS AND DILUTED EARNINGS PER SHARE ...... F-124

STATEMENT OF CONSOLIDATED FINANCIAL POSITION—ASSETS—

NOTE 14 GOODWILL ...... F-125 NOTE 15 PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE FIXED ASSETS ...... F-125 NOTE 16 NON-CURRENT FINANCIAL ASSETS ...... F-126 NOTE 17 INVENTORIES ...... F-126 NOTE 18 ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES ...... F-127 NOTE 19 CURRENT AND DEFERRED TAXES ...... F-128 NOTE 20 CASH AND CASH EQUIVALENTS; ...... F-129

STATEMENT OF CONSOLIDATED FINANCIAL POSITION—LIABILITIES—

NOTE 21 EQUITY ...... F-129 NOTE 22 PROVISIONS ...... F-130 NOTE 23 FINANCIAL DEBT ...... F-131 NOTE 24 BLOCKED CURRENT ACCOUNTS ...... F-133 NOTE 25 CURRENT LIABILITIES ...... F-133

ADDITIONAL INFORMATION

NOTE 26 NOTES TO THE STATEMENT OF CASH FLOWS ...... F-134 NOTE 27 OFF-BALANCE SHEET COMMITMENTS ...... F-134 NOTE 28 EXPOSURE TO MARKET RISKS AND FINANCIAL INSTRUMENTS ...... F-137 NOTE 29 RELATED PARTY TRANSACTIONS ...... F-139 NOTE 30 EVENTS AFTER THE BALANCE SHEET DATE ...... F-144 NOTE 31 INFORMATION ABOUT THE KAUFMAN & BROAD GROUP ...... F-144

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SIGNIFICANT EVENTS OF THE PERIOD Fiscal year highlights for the Kaufman & Broad Group Early partial repayment of the senior debt Following a twofold bidding process by Kaufman & Broad SA on July 26, 2011 for the early repayment of a portion of its long-term debt under the Senior Facilities Agreement and the cancellation of a portion of the commitments to open a new credit line for which the company is eligible as part of its revolving loan under the same facilities agreement, Kaufman & Broad SA repaid €50.8 million of its long-term debt during the period (see Note 25.1) and cancelled €72.1 million in revolving loan commitments (see Note 25.1). These two transactions led to a net profit of €6.9 million, which was recognized in financial income.

Buyback of minority interests The Group purchased a number of minority interests during the fiscal year. It purchased ASA Immo (a company involved in a number of programs in Île-de-France), the equity interest of its associate Elgéa in a program in Île-de-France, and the equity interest of Azur Investissements in a program in Marseilles. It also purchased the Fiparimmo companies 1 to 16, which were involved in several programs in the Southwest of France. The Group’s total investment was €10 million, with a satisfactory return. In accordance with IAS27R, a capital loss of €3.5 million was recognized in shareholder’s equity for these transactions.

General information NOTE 1—ACCOUNTING METHODS AND PRINCIPAL VALUATION ASSUMPTIONS 1.1 Information about the company The company was created at the end of April 2007 and its fiscal year ends on November 30. The consolidated financial statements at November 30, 2011 reflect the operations of Financière Gaillon 8 (“FG8”) and of Kaufman & Broad SA and its subsidiaries (“the Kaufman & Broad Group”) over the 12-month period from December 1, 2010 to November 30, 2011. The registered offices of the Company have been located at 232 rue de Rivoli 75001 Paris (France) since May 2011.

Basis for the Preparation of the Financial Statements Since Financière Gaillon 8 is only a holding company, its financial statements are primarily comprised of the consolidated financial statements of the Kaufman & Broad Group. Accordingly, Financière Gaillon 8 applies the same accounting methods and valuation estimates as those used by Kaufman & Broad. The only material items not resulting from the consolidated financial statements of Kaufman & Broad are the allocation of the Kaufman & Broad acquisition price, the debt and the hedging instruments subscribed directly by FG8 and the liquidity commitment granted to the Kaufman & Broad employees for their options and shares under options issued by Kaufman & Broad prior to the assumption of control over Kaufman & Broad by Financière Gaillon 8 as part of the simplified tender offer that Financière Gaillon 8 was required to file for the shares not held by it in accordance with applicable stock market regulations. Accordingly, the Financière Gaillon 8 consolidated financial statements were prepared in compliance with IFRS (International Financial Reporting Standards) and IFRIC (International Financial Reporting Interpretations Committee) interpretations as adopted by the European Union as of November 30, 2011 and available on the European Commission website: (http://ec.europa.eu/internal_market/accounting/ias_en.htm.) The accounting methods described below have been continuously applied to all the periods presented in the consolidated financial statements, after taking into account, or with the exception of, the new standards and interpretations described below. The consolidated financial statements and the accompanying notes are denominated in euros. The consolidated annual financial statements as of November 30, 2011 and the notes pertaining thereto were approved by the Board of Directors at its meeting of March 30, 2012.

1.2.1. Standards and interpretations

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Standards, interpretations and amendments that must be applied to the fiscal year beginning on December 1, 2010 No new standard or interpretation whose application is mandatory for the fiscal year beginning on December 1, 2010 had any impact on the financial statement of the Financière Gaillon 8 Group. These standards are as follows: • amendment to IFRS 2, “Group cash-settled share-based payment transactions”: mandatory application for fiscal years beginning on or after January 1, 2010; • IFRIC 19 interpretation “Extinguishing financial liabilities using equity instruments”. mandatory application for fiscal years beginning on or after July 1, 2010; • Improvements to IFRS, April 2009: mandatory application for fiscal years beginning on or after January 1, 2010; • IFRIC 15 “Agreements for the construction of real estate”: mandatory application for fiscal years beginning on or after January 1, 2010.

Standards and interpretations effective after the balance sheet date Subject to final adoption by the European Union, the standards, amendments to standards, and interpretations published by the IASB and presented below must be applied after November 30, 2011: • IAS 24 revised—“Related Party Disclosures” (applicable to annual periods beginning on or after January 1, 2011) • IFRS 9—“Financial Instruments”: Classification and measurement (applicable to annual periods beginning on or after January 1, 2013) • IFRS 10—“Consolidated Financial Statements” (applicable to annual periods beginning on or after January 1, 2013) • IFRS 11—“Joint Arrangements” (applicable to annual periods beginning on or after January 1, 2013) • IFRS 12—“Disclosure of Interests in Other Entities” (applicable to annual periods beginning on or after January 1, 2013) • IFRS 13—“Fair Value Measurement” (applicable to annual periods beginning on or after January 1, 2013) • IAS 28 revised—“Investments in Associates and Joint Ventures” (applicable to annual periods beginning on or after January 1, 2013) • IAS 19 revised—“Employee Benefits” (applicable to annual periods beginning on or after January 1, 2013) • IFRS improvements, May 2010 (applicable to annual periods beginning on or after January 1, 2011) • Amendment to IFRS 7—Disclosures: transfer of financial assets (applicable to annual periods beginning on or after July 1, 2011) • Amendment to IAS 12—“Deferred Tax”: Recovery of underlying assets (applicable to annual periods beginning on or after January 1, 2012) • Amendment to IAS 1—Presentation of items of other income and expenses directly recognized in equity (applicable to annual periods beginning on or after July 1, 2012)

• Amendment to IAS 32—Offsetting of financial assets and liabilities (applicable to annual periods beginning on or after January 1, 2014) • Amendment to IFRS 7—Disclosures: Offsetting of financial assets and liabilities (applicable to annual periods beginning on or after January 1, 2013) • Amendment to IFRIC 14—Prepayment of a minimum funding requirement (applicable to annual periods beginning on or after January 1, 2011)

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The Financière Gaillon 8 Group has not made early application of any of these new standards or interpretations and is in the course of assessing the impact of their initial application.

USE OF ESTIMATES AND ASSUMPTIONS In order to prepare the Group’s financial statements, the management of Financière Gaillon 8 is required to make estimates and assumptions for items in the financial statements that cannot be accurately valued. These estimates and assumptions are made based on past experience and from the expected changes in the markets in which the Group operates, or other factors deemed reasonable considering the circumstances. These assessments have an effect on the amounts of the income and expenses and on the book value of the assets and liabilities. The estimates and assumptions primarily concern: • earnings forecasts for the real estate programs used to recognize percentage-of-completion transactions (Notes 1.9 and 4); • the business plans used for the performance of impairment tests on goodwill and other intangible assets. • the recoverability of tax assets. Selling price and take-up rate assumptions based on the earnings forecast for real estate developments and actual budget results for the medium-term provisional budgets used to carry out impairment tests could be impacted by the economic environment and regulatory changes, particularly government tax incentives.

OPTIONS CREATED BY THE ACCOUNTING STANDARDS AND USED BY FINANCIERE GAILLON 8 Certain IASB standards developed by IASB provide for options with regard to the measurement and recognition of assets and liabilities. Accordingly, the Group has elected to: • use the valuation method on the basis of the historical amortized cost of tangible and intangible fixed assets. The Group decided not to revalue its tangible and intangible assets on each closing date (IAS 16 “Property, Plant and Equipment” and IAS 38 “Intangible Assets”); • apply the option provided in the amendment to IAS 19 “Employee benefits” to recognize all actuarial gains and losses on defined-benefit plans in the balance sheet through equity, net of deferred taxes; • apply the option provided for by IAS 31 Section 38 to consolidate companies held under joint control using the equity method. Consolidation based on the financial statements as of November 30 includes almost all the companies included in the consolidation. A few equity affiliates have a different balance sheet date and are consolidated on the basis of interim financial statements as of November 30, corresponding to 12 months of operations. That is because their contribution is immaterial.

1.4 CONSOLIDATION METHODS Kaufman & Broad and its subsidiaries are fully consolidated.

1.5 BUSINESS COMBINATIONS AND GOODWILL IFRS 3R is applied on a forward-looking basis to new business combinations as from December 1, 2009. At the time of acquisition of control and the assets, liabilities and any identifiable contingent liabilities of the entity acquired that meet the criteria for recognition under IFRS are generally recognized at their fair value determined on the acquisition date. For partial acquisitions, minority interests may either be recognized at their share of the fair value of the assets and liabilities acquired or measured at fair value. This option is applied on a transaction-by-transaction basis. Pursuant to the standard, the costs related to the combination as from December 1, 2009 are expensed for the period in which they are incurred. Goodwill is determined once on the date of the takeover (concept of single goodwill). The analysis of goodwill is finalized during the valuation period, which is 12 months from the date of takeover. The impact of subsequent percentage

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changes not affecting control is recognized in equity. Debt indexed to a price adjustment clause is recognized at fair value starting from the acquisition date. Any subsequent adjustments to the fair value of the debt are recognized in income.

1.6 INTANGIBLE ASSETS Intangible assets include primarily the valuation of the Kaufman & Broad brands and logos. The life of this asset is indefinite and is therefore not amortized, but is subject to impairment tests conducted annually or as soon as there are indicators of impairment. The other intangible assets are design costs and software. They are recognized at their acquisition or production cost and are amortized using the straight-line method over their useful life, which generally does not exceed five years.

Research and Development Expenses The development expenses of the Financière Gaillon 8 Group are comprised of expenses attached to land (commitments related to programs for which commitments to buy the land have been executed) and are treated as inventory, as an element of the cost price, when it is probable that the program will be developed.

• Fittings, improvements, facilities 10 years • Construction site equipment 5 years • Rolling stock 5 years • Office equipment 5 years • Office furniture 10 years • IT equipment 3 years The assets available to the Kaufman & Broad Group under a finance lease agreement, which correspond primarily to IT equipment, are treated as if they had been acquired on credit and are depreciated on a straight-line basis over the period indicated above. Payments under operating leases are recognized as expenses until termination of the lease. Simple leases (other than sub-leases) are shown in the off-balance sheet commitments.

1.8 IMPAIRMENT OF LONG-TERM ASSETS Financière Gaillon 8 has only one CGU, the Kaufman & Broad Group. For goodwill and intangible assets with an indefinite useful life, impairment tests are conducted at least once a year in order to ensure that the net book value of the goodwill and of the non-amortizable intangible assets is at least equal to the recoverable value. Fixed assets (both tangible or intangible) are subject to impairment when, because of events or circumstances during the relevant period (obsolescence, physical deterioration, material changes in the mode of use, performance below forecasts, decrease in income, and other external factors, etc.), their recoverable value appears to be permanently lower than their net book value. The impairment tests are carried out by comparing the recoverable value and the net book value of the assets. The need to recognize an impairment is assessed by comparing the book value of the assets and liabilities and their recoverable value. The recoverable value is the greater of the net fair value of the exit costs and the value in use.

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The net fair value of the exit costs is determined as the best estimate of the sale value net of the exit costs for a transaction made at arm’s length between informed and willing parties. This estimate is determined on the basis of the market information available taking into account specific situations. The useful value used by the Financière Gaillon 8 Group corresponds to the aggregate discounted free cash flows generated over a three-year period with a terminal value.

1.9 EQUITY AFFILIATES AND JOINT VENTURES The carrying amount of the equity affiliates and joint ventures corresponds to the share of equity held. This item includes, for property development operations, capital and similar investments, i.e., the current account advances made by the Group in order to finance programs.

1.10 INVENTORIES “New projects” are Kaufman & Broad Group programs that have not yet been developed. These programs are valued at cost and include reservation deposits for acquisition of land, design fees, land development expenses and all other fees incurred in connection with the projects. On each period-end date, the share of these expenditures incurred in respect of projects for which land purchase promises are not signed and for which there is a lack of probability of development in the near future is expensed. Inventories of programs under development are valued at cost. This cost includes the land acquisition price, related fees, taxes, cost of roads and equipment, cost of construction and development of the model areas, land expenses, as well as the fees and commissions inherent in the agency agreements executed by Kaufman & Broad in order to sell the real estate programs. For new programs since December 1, 2009, cost also includes financial expenses in accordance with IAS 23, “Borrowing costs”. All advertising expenses, including the expenses directly attributable to the real estate programs, are expensed. IAS 2 provides for the recognition of indirect fixed expenses to inventories, insofar as such expenses are clearly identifiable and can be allocated. These expenses must be integrated into the inventories by using systematic and rational methods applied in a consistent and ongoing manner to all costs having similar characteristics.

Indirect fixed expenses (salaries, payroll expenses and other expenses) should be included in inventories when they are related to the land, technical and general administration departments and are essentially comprised of expenses related to development, works supervision, project management and after-sales management for the part that can be directly allocated to the real estate programs and is incurred after the execution of the land purchase promise. The Group is not equipped with the management tools needed to identify and assess these costs in accordance with the IFRS criteria. Accordingly, it recognizes these expenses as indirect fixed costs. A fair value adjustment was identified and allocated to inventories in relation to the allocation of the Kaufman & Broad acquisition price. It is removed from inventories on a percentage-of-completion basis and therefore in line with revenue recognition. Provisions are set aside in order to cover foreseeable losses, which are valued on the basis of an analysis of economic data and financial forecasts specific to each project.

1.11 ACCOUNTS RECEIVABLE Accounts receivable correspond to receivables of the Kaufman & Broad Group accrued because of the recognition of revenues according to the completion of the programs. Accounts receivable include the following: • Calls for funds made to customers at various stages of the work in accordance with regulations in force that are still unpaid; • The lag that can exist between the calls for funds and the actual completion at the close of the financial year. This lag generates most of these receivables; these receivables are not yet payable. • Accounts receivable are measured at nominal value, after deducting the impairment charges recognized when the realizable value of the amounts due is less than the carrying amount. F-118

1.12 CASH AND CASH EQUIVALENTS Cash and cash equivalents are comprised of the cash, demand deposits and cash equivalents as defined by IAS 7. These are short-term investments, generally for less than three months, readily convertible into a known amount of cash and not subject to any material risk of change in value; they are denominated in euros (primarily money-market SICAVs and Collective Investment Undertakings and certificates of deposit). At each period-end date, short-term investments are marked to market and any difference is booked through income.

1.13 PREPAID EXPENSES Prepayments are primarily related to rent and other maintenance expenses.

1.15 SHARE-BASED PAYMENTS Under IFRS 2 “Share-based payments,” the stock purchase or subscription options, offerings reserved for employees and bonus share allotments of shares awarded to employees and officers of the Group are valued as of the date of the award. The Group valued the benefit awarded to employees on the basis of its fair value on the date of allotment of the rights. The value of the stock options and bonus shares is determined on the basis of the exercise price and term of the option, the current price of the underlying shares, the anticipated volatility in the share price, the dividends anticipated on the shares, the likelihood of exercise of the option, and the risk-free interest rate for the term of the option. That value is posted to general and administrative expenses on a straight-line basis between the options award date and the exercise date of the option or the date of availability of the shares with a direct contra entry posted to shareholders’ equity.

1.16 NON-CURRENT PROVISIONS Under IAS 37 “Provisions, contingent liabilities and contingent assets,” provisions are recognized where, at the end of the year, the Group has an obligation to a third party resulting from a past event, the settlement of which is expected to result for the company in an outflow of resources embodying economic benefits. Where applicable, such outflow of resources may be discounted. The obligation may be statutory, regulatory or contractual in nature. It may also result from the Group’s practices or from public commitments that created a legitimate expectation from the third parties concerned as regards the assumption of certain responsibilities by the Group. The estimate of the amount included as a provision corresponds to the resource outflow that the Group will probably have to suffer in order to extinguish its obligation. If no reliable estimate of such amount can be prepared, then no provision is set aside. The liability is then contingent. Contingent liabilities are potential obligations resulting from past events whose existence will be confirmed only by the occurrence of uncertain future events not under the company’s control, or from current obligations resulting from past event, but that are not recognized because (i) it is not probable that an outflow of resources embodying economic benefits will be required to extinguish the obligation or (ii) the amount of the obligation cannot be determined with sufficient reliability. These liabilities are disclosed in Note 27.3. Non-current provisions primarily include provisions of the Kaufman & Broad Group: • a provision for risks related to equity affiliates; • a provision for restructuring expenses; • the provisions for commercial and legal risks; • and employee benefits.

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The Group has no commitment other than Kaufman & Broad’s retirement benefits that are provisioned in the Group’s consolidated financial statements in accordance with IAS 19. This provision is valued by an independent expert. The actuarial method used corresponds to the projected units of credit method described in IAS 19. This method consists in evaluating, for each employee, the amount of the benefit corresponding to the projected salary at the end of the career, and to the rights applied to the seniority vested on the valuation date. The amount of the benefit thus valued is discounted and tested for probability using the mortality table and the employee turnover table. Actuarial gains and losses are fully recognized in equity (outside the income statement) during the period in which they occur.

Accounts payable and other liabilities Because of their short-term nature, the book values stated in the consolidated financial statements are reasonable estimates of market value.

Derivative financial instruments The Group is exposed to the market risk, in particular interest rate risk. To deal with such risk, the Group relies on a number of derivative financial instruments. Derivatives are marked to market. Any change in the fair value of derivatives is recorded in profit or loss the income statement, except in cases of hedging as indicated below.

Cash flow hedging instruments The Group uses only future cash flow hedging instruments: • the cash flow hedge covers the exposure to changes in cash flows attributable to a specific risk associated with a recognized asset or liability or with an anticipated transaction (e.g., interest flows on variable-rate debt) where such risk would affect the reported net income. • the effective portion of the change in fair value of the hedging instruments is recognized directly through equity. The change in the value of the ineffective part of the hedging instrument is recognized through income. The amounts recorded as equity are shown in income in a manner symmetrical to the way in which the hedged assets and liabilities are recognized.

• the valuation employs measurement techniques based on observable data, directly (price) or indirectly (price derivatives) (level 2); • at least one significant component of the fair value is based on non-observable data (level 3). The fair value of financial instruments traded on active markets is based on quotations on the financial statement closing date. A market is considered to be active if the quotations are readily and regularly available from an exchange, traders, brokers, an appraiser or a regulatory agency and such quotations are based on regular transactions. These instruments are classified as Level 1. The fair value of financial instruments not quoted on an active market (for example, over-the-counter derivatives) is determined through the use of measurement techniques. These various methods make maximum use of observable market data, if available, and have little basis in the Group’s own estimates. If all elements required for the fair value calculation are observable, this instrument is classified as Level 2. If one or more of the main elements of the calculation are not based on observable market data, the instrument is classified as Level 3.

IAS 12 requires, in particular, the recognition of deferred tax liabilities relating to all intangible assets recognized at the time of a business combination (trademarks, etc.). Under IAS 12, deferred tax assets and liabilities are not discounted. The Group does not recognize any tax expense with regard to that portion of income attributed to holders of minority interests in tax-transparent companies, considering their tax status. The main impacts on the deferred tax are as follows: • application of the percentage of completion method for the determination of the margin on operations • elimination of internal services • deductibility of certain goodwill • timing differences related to provisions for liabilities and charges • The company recognizes its tax assets when they are recoverable either because of tax policies or because of income projections.

1.20 STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME As allowed by IAS 1 “Presentation of Financial Statements,” the Group presents the income statement by function. The Group applied CNC Recommendation 2009-R-03 of July 8, 2009 for the presentation of its income statement. The identification of the cost of goods sold makes it possible to present gross margin as an intermediary sub-total in accordance with IAS 1, § 83. Operating income corresponds to net income before: • financial income; • financial expenses; • current and deferred taxes; • the share of income/loss of equity affiliates; • income (loss) from operations discontinued or held for sale. F-121

Revenue recognition The Group markets all of its development projects under the sale before completion (VEFA) plan. Through the VEFA agreement, the law has given real estate developers the option to call for the clients’ funds based on the percentage of completion of programs, based on a schedule determined by law, while giving clients a Performance Bond. The customers’ cumulated payments may not exceed 35% of the prices upon completion of the foundations, 70% upon completion of the roof and 95% upon completion of the building. This contract transfers to the buyer the title to the land and building as the building is completed. Revenues are recognized in accordance with IAS 18 “Income from continuing operations” and the terms of IAS 11 “Construction Contracts” as regards recognition on the basis of the percentage of completion, i.e., based on technical completion, the starting point of which is the acquisition of the land and commercial completion (execution of the deeds of sale) of each program. The revenues and margin are recognized as the work is completed, in accordance with the following rule: revenue recognized for a given program is equal to the product of the cumulated revenues from the lots for which a deed of sale has been signed multiplied by the ratio of the amount of the land expenses to the construction expenses incurred by the Group in respect of said program and the total budget of the program’s expenditures.

The forecasts used were re-examined in full at year-end and take into account, to the best of management’s knowledge, expected changes in sales prices, marketing and costs. The net income (loss) is attributed to the owners of the parent company and to minority interests, even if this results in a loss for minority interests. Minority interests include all income and expenses attributable to the minority shareholders of the companies held in partnership and fully consolidated.

1.21 EARNINGS PER SHARE The Group discloses basic earnings per share and diluted earnings per share. Earnings per share are calculated by dividing the net income of the fiscal year attributable to the Group’s shareholders by the average number of shares of common stock outstanding during the fiscal year. Diluted net earnings per share are calculated according to the share purchase method. It is calculated on the basis of the net income attributable to the Group’s shareholders, corrected for the financial costs of the diluting instruments, net of the corresponding tax effect. The number of shares used for the calculation of diluted earnings takes into account the conversion into shares of common stock of diluting instruments outstanding at the close of the period. In order to ensure the comparability of the earnings per share presented, the weighted average numbers of shares outstanding during the fiscal year and during earlier years are adjusted in case of a capital increase made at a price lower than the market price.

1.22 STATEMENT OF CASH FLOWS The Statement of Cash Flows is presented in accordance with IAS 7 and CNC Recommendation 2009-R-03. The Group’s cash position, the changes in which are analyzed in the cash flow statement, is defined as the net change in the following balance sheet items: • cash and cash equivalents; • credit facilities • interest accrued on cash and cash equivalents

1.23 OFF-BALANCE SHEET COMMITMENTS The summary of the Group’s contractual obligations and commercial commitments is provided in Note 27.

1.24 FINANCIAL INDICATORS F-122

Financière Gaillon 8 applies the same financial indicators as the Kaufman & Broad Group. Definition of the main financial indicators:

1.24.1 Gross margin This indicator is the difference between revenues and the cost of goods sold. The gross margin rate is the “gross- margin-to-revenues” ratio.

1.24.4 Financial debt See Note 23.

NOTE 2—SCOPE OF CONSOLIDATION The consolidated financial statements of Financière Gaillon 8 consolidate the financial statements of the Kaufman & Broad Group as of November 30, 2011 using the full consolidation method. Kaufman & Broad prepares its own consolidated financial statements in accordance with IAS/IFRS. The percentage of holding and the percentage of ownership interest of Financière Gaillon 8 that takes into account the treasury shares held by Kaufman & Broad SA can be analyzed as follows:

Nov. 30, 2011 Nov. 30, 2010

% held ...... 87.95% 87.95% % interest after taking into account own shares ...... 89.08% 88.99% Own shares held by Kaufman & Broad SA ...... 278,109 255,096 Kaufman & Broad capital stock ...... 21,584,658 21,584,658 % Kaufman & Broad treasury stock ...... 1.29% 1.18% % treasury stock held in Financière Gaillon 8 ...... 1.13% 1.04%

NOTE 4—REVENUES

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(in € thousands) Nov. 30, 2011 Nov. 30, 2010

Total Apartments ...... 925,282 791,937 Total single-family homes ...... 58,148 126,037 TOTAL HOUSING ...... 983,430 917,974 Offices ...... 48,901 3,052 Land & fees ...... 7,642 8,790 Showroom ...... 4,282 5,886

GRAND TOTAL ...... 1,044,255 935,702

NOTE 5—SELLING EXPENSES

(in € thousands) Nov. 30, 2011 Nov. 30, 2010

Salaries and payroll taxes ...... 7,008 6,139 Advertising expenses and cost of model areas ...... 18,627 14,215 Rents and rental expenses ...... 21 326 Fees ...... 28 35 Temporary employees ...... 402 464 Recruitment costs ...... 16 47 Vehicle expenses—Travel ...... 627 709 Telephone—Electricity (EDF)—Minor maintenance ...... 36 38 Taxes ...... 567 617 Other expenses ...... 42 61

Total selling expenses ...... 27,374 22,651

The selling expenses of the Financière Gaillon 8 Group (€27.374 million as of November 30, 2011 compared to €22.651 million as of November 30, 2010) represent the selling expenses of the Kaufman & Broad Group.

NOTE 6—GENERAL AND ADMINISTRATIVE EXPENSES

(in € thousands) Nov. 30, 2011 Nov. 30, 2010

Salaries and payroll taxes ...... 35,762 32,166 Rents and rental expenses ...... 5,744 4,715 Fees ...... 4,876 6,603 Financial reporting costs ...... 298 297 Taxes ...... 6,199 3,812 Recruitment costs ...... 316 518 Temporary employees ...... 446 568 Insurance ...... 73 384 Internet ...... 308 476 Telephone—Electricity (EDF)—Maintenance costs ...... 2,450 2,412 Vehicle expenses—Travel ...... 2,270 1,982 Information systems ...... 1,588 1,560 Other expenses ...... 1,903 2,119

Total general and administrative expenses ...... 62,233 57,612

The general and administrative expenses of the Financière Gaillon 8 Group (€62.233 million) represent the general and administrative expenses for fiscal year 2011 of the Kaufman & Broad Group in the amount of €62.086 million and Financière Gaillon 8’s own expenses in the amount of €147,000. The general and administrative expenses for fiscal year 2010 included the expenses of the Kaufman & Broad Group in the amount of €57.519 million and Financière Gaillon 8’s own expenses in the amount of €93,000.

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NOTE 7—TECHNICAL EXPENSES AND CUSTOMER SERVICE

(in € thousands) Nov. 30, 2011 Nov. 30, 2010

Salaries and payroll taxes ...... 13,593 12,579 Fees ...... 75 10 Recruitment costs ...... 152 60 Temporary employees ...... 212 309 Vehicle expenses—Travel ...... 1,229 1,079 Telephone—Electricity (EDF)—Minor maintenance ...... 63 56 Taxes ...... 288 232 Other expenses ...... 22 45

Total technical expenses and customer service ...... 15,634 14,370

NOTE 8—OTHER INCOME AND EXPENSES

(in € thousands) Nov. 30, 2011 Nov. 30, 2010

Fees ...... 65 298 Bank fees ...... 1,496 1,006 Expenses on discontinued projects ...... 3,789 1,346 Amortization, depreciation and provision expenses (net of reversals) ...... 2,366 92 Other expenses ...... 2,310 1,285

Total other expenses ...... 10,026 3,843

Sale of services...... -1,395 -1,656

Total other income ...... -1,395 -1,656

The other income and expenses of the Financière Gaillon 8 Group represent the other income and expenses of the Kaufman & Broad Group.

NOTE 9—OTHER NON-RECURRING INCOME AND EXPENSES

(in € thousands) Nov. 30, 2011 Nov. 30, 2010

Income from discontinued projects(b) ...... 668 645 Reversal of provisions for impairment of land(a) ...... 3,477 Cost of job protection plan ...... 995 84 Risk on litigation with partners ...... 71 NBV of sold assets ...... 113

Total other non-current income ...... 1734 4,319

Expenses on discontinued projects(b) ...... -93 Increase in provisions for amortization of land(a) ...... -779 NBV of sold assets ...... -80 Risk on litigation with partners ...... -189

Total other non-current expenses ...... -952 -189

(a) The Kaufman & Broad Group purchased land in previous fiscal years, and it estimated at November 30, 2009 that sale was more likely than development. In this context, a provision of €5.1 million was booked to reduce the valuation of these properties to market value. To continue the reorganization plan adopted in 2008, these items are classified as other non-recurring expense. Over fiscal year 2010, as a result of the improvement in market conditions, and after re-studying financing for real estate operations, the Group decided to launch projects for sale on some of the land previously impaired. The impairment was thus immediately reversed, resulting in a net reversal of €3.5 million for fiscal year 2010. The impairment was increased in 2011 by €0.8 million for one of those land properties prior to its disposal. F-125

NOTE 10—COST OF NET FINANCIAL DEBT AND OTHER FINANCIAL INCOME AND EXPENSES COST OF NET FINANCIAL DEBT

(in € thousands) Nov. 30, 2011 Nov. 30, 2010

Financial expenses ...... -41,857 -62,285 Financial income ...... 3,619 1,407

Cost of net financial debt ...... -38,238 -60,878

Financial expenses can be analyzed as follows:

(in € thousands) Nov. 30, 2011 Nov. 30, 2010

Interest expenses on syndicated loans ...... 39,641 37,177 Interest expenses on Kaufman & Broad swaps and swap cancellation adjustment ... 3,879 15,345 Deferral of FG8 cancellation adjustment ...... 1,748 8,076 Interest expenses on partner account Expenses for deferral of origination fees for syndicated loans ...... 2,283 3,087 Capitalization of financial expenses—IAS 23 Kaufman ...... -6,626 -2,208 Other ...... 932 808

Financial expenses ...... 41,857 62,285

(in € thousands) Nov. 30, 2011 Nov. 30, 2010

Capital gain on sale of money-market SICAVs and certificates of deposit ...... -2,314 -391 Other income from cash and cash equivalents ...... -1,305 -1,016

Financial income ...... -3,619 -1,407

Other income from cash and cash equivalents is primarily made up of interest on a loan granted to Seniors Santé in 2010 in the amount of €0.7 million and of late fees billed to the buyers and amounting to €0.5 million.

NOTE 11—OTHER FINANCIAL INCOME AND EXPENSES Other interest expense

(in € thousands) Nov. 30, 2011 Nov. 30, 2010

Expenses for deferral of origination fees for syndicated loans ...... 2,344 0 Trading commission ...... 100 0 Gain (loss) on sale of Seniors Santé ...... -374

Total other financial expenses ...... 2,444 -374

Other financial income

(in € thousands) Nov. 30, 2011 Nov. 30, 2010

Financial income relating to the early repayment of the Senior B and Senior C lines -3,756 — Financial income tied to waiver of the use of a portion of the RCF line ...... -5,603 —

Total other financial income ...... -9,359 0 F-126

(in € thousands) Nov. 30, 2011 Nov. 30, 2010

Following the early repayment of the Senior B and C lines and the waiver of drawdown rights on a portion of the RCF line that took place in 2011 (see Significant events during the period) and taking into account the partial repayment planned for 2012, further amortization of the origination fees for the Senior B and C lines was recorded in “Other financial expenses” in the amount of €2.3 million and financial income of €9.4 million was recorded at November 30, 2011.

NOTE 12—TAX EXPENSE 12.1 ANALYSIS OF CIT EXPENSE

(in € thousands) Nov. 30, 2011 Nov. 30, 2010

Current CIT expense/(income) ...... -646 -1,465 Provision for tax risk ...... 3,710 357 Deferred taxes ...... 23,643 1,625

Total tax on net income on consolidated companies ...... 26,707 517

(in € thousands) Nov. 30, 2011 Nov. 30, 2010

Pre-tax income of consolidated companies ...... 52,563 -12,412 Applicable tax rate ...... 34.40% 34.43% Theoretical tax—expense /(income) ...... 18,082 -4,270 Provision for tax risk ...... 3,635 357 Impact of permanent differences ...... -1,144 -1,645 Impact of non-capitalized timing differences ...... 9,240 10,762 Tax on share of profit (loss) of equity affiliates ...... 329 215 Tax borne by minority Kaufman & Broad shareholders of tax-transparent companies ...... -3,435 -4,902

Group tax liability/(income) ...... 26,707 517 Permanent differences are due to Kaufman & Broad’s permanent differences in the amount of -€1.1 million resulting primarily from tax savings enjoyed by the Group for its Belgian subsidiary in the amount of €2.9 million in 2011, to reduced tax savings recorded for prior years that the Group believes it cannot use in the amount of €4.2 million, to the tax savings related to the short-term capital loss recorded for the sale of shares of subsidiaries in the amount of -€3.8 million, to interest expenses for under-capitalization of subsidiaries of €1.0 million and other non-deductible expenses. Kaufman & Broad SA and Financière Gaillon SA are not a Group consolidated for tax purposes; therefore, profits generated by Kaufman & Broad SA and its subsidiaries consolidated for tax purposes are not charged against the losses of Financière Gaillon 8 SA. Since there is no projected use of tax losses generated by Financière Gaillon 8 SA, no deferred tax asset has been recognized for those losses in the consolidated financial statements of the Financière Gaillon 8 Group.

12.3 ANALYSIS OF TAX RECOGNIZED DIRECTLY IN EQUITY

(in €thousands) Nov. 30, 2011 Nov. 30, 2010

Actuarial gains or losses on deferred income taxes ...... 157 201 Hedging instruments (deferred tax) ...... -991 -2,544

Tax recognized directly in equity ...... -834 -2,343 F-127

(in €thousands) Nov. 30, 2011 Nov. 30, 2010

Attributable net income ...... 11,646 -29,524 Average number of shares outstanding ...... 1,366,109,921 1,366,109,921

Earnings per share (in euros) ...... 0.009 -0.022

Diluted earnings per share (in euros) ...... 0.009 -0.022

STATEMENT OF FINANCIAL POSITION—ASSETS NOTE 14—GOODWILL The acquisition price of the Kaufman & Broad Group was allocated to identifiable acquired assets and liabilities. Changes in the net value of goodwill can be analyzed as follows:

(in €thousands) Nov. 30, 2011 Nov. 30, 2010

Balance at the end of the period ...... 144,370 144,370

Goodwill was tested for impairment in accordance with IAS 36 “Asset Impairment”. The test showed no impairment as of November 30, 2011. The discounting rate used to determine the going concern value as of 30 November 2011 is equal to 9.50%. This rate is calculated based on the average cost of capital employed and includes a risk premium. The free cash flows are determined on the basis of reasonable and documented assumptions. The Group used budget forecasts made at the fiscal year-end and a 0.5% stable growth rate for the future. The recoverability test was performed based on the CGU for the entire capital employed, including goodwill, the Kaufman & Broad brand, property, plant and equipment and the net working capital requirements.

NOTE 15—PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS 15.1 NET INTANGIBLE ASSETS

Accumulated amortization and Nov. 30, 2011 Nov. 30, 2010 (in € thousands) Gross amount depreciation Net amount Net amount

Kaufman & Broad brand...... 80,422 80,422 80,422 Other intangible assets ...... 7,203 -4,751 2,452 1,752

Intangible assets ...... 87,625 -4,751 82,874 82,174

15.2 NET PROPERTY, PLANT AND EQUIPMENT

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Accumulated depreciation and Nov. 30, 2011 Nov. 30, 2010 (in € thousands) Gross amount amortization Net amount Net amount

Land ...... 144 144 149 Buildings ...... 1,114 -915 199 231 Technical facilities ...... 1 -1 0 0 Other tangible assets ...... 12,667 -7,938 4,729 4,380 Property, plant and equipment in progress...... 811 811 1,228

Net property, plant and equipment ...... 14,737 -8,854 5,883 5,988

Inc. finance lease (amortized over 3 years) 23 293 Property, plant and equipment represent only the Kaufman & Broad Group’s property, plant and equipment. Finance leases primarily cover IT equipment.

NOTE 16—NON-CURRENT FINANCIAL ASSETS

(in € thousands) Nov. 30, 2011 Nov. 30, 2010

Equity affiliates and joint ventures ...... 3,473 5,359 Long-term loans ...... 0 11,875 Security deposits and bonds ...... 2,551 803

Other non-current financial assets ...... 6,024 18,037 In 2010, the long-term loans item included primarily the portion maturing in more than one year (€11.286 million), the balance of the loan for €17.4 million granted to Seniors Santé when this ownership interest was sold in 2010. The balance of that loan is reflected in current financial assets at November 30, 2011 (see Note 18).

16.1 EQUITY AFFILIATES AND JOINT VENTURES The shares of equity affiliates as of November 30 2011 were primarily as follows:

Contribution to Percentage Share of shareholders’ equity consolidated of capital of equity affiliates Current financial (in € thousands) held and joint ventures(a) account position

SCI Hameaux de la Butit ...... 50% 1 180 179 Antony 87-91 div leclerc ...... 50% 107 309 416 SCI Passage de Melun ...... 35% -543 344 -199 SCI Rue de Richelieu ...... 45% 99 56 155

SCI Grand Parc ...... 40% 0

SCI Elodia ...... 50% 0 SCI Terrasse du Parc ...... 50% -174 297 123 SAS JLG Aménageur ...... 50% -145 1,643 1498 SAS Saint Exupéry ...... 50% -873 41 -832 SCI Gonesse ...... 43% 70 1033 1103 SCI Belle Brise ...... 50% -3 74 71 SCI St Malo Athéna ...... 40% 328 0 328

Other companies ...... -400 1,031 631

Equity affiliates and joint ventures ...... -1,533 5,008 3,473

(a) The share of the net income of Kaufman & Broad’s equity affiliates and joint ventures, in the amount of €955,000 as of November 30, 2011 is included in the shareholders’ equity above.

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The change in the value of the equity associates and joint ventures can be analyzed as follows:

(in € thousands) Nov. 30, 2011 Nov. 30, 2010

Balance at the beginning of the period ...... 5,359 4,270

Change in current accounts and other companies ...... -2,841 -680 Change in scope of consolidation (SM2I) 1,136 Attributable net income ...... 955 633

Balance at the end of the period ...... 3,473 5,359

NOTE 17—INVENTORIES

Nov. 30, 2011 Nov. 30, 2010 (in € thousands) Gross Write-downs Net Gross Write-downs Net

New projects ...... 17,882 -559 17,323 14,057 -328 13,729 Current programs ...... 225,191 -2,645 222,546 247,810 -5,261 242,549

Total ...... 243,073 -3,204 239,869 261,867 -5,589 256,278

The change in write-downs can be broken down as follows:

(in € thousands) Nov. 30, 2010 Expenses Reversals Nov. 30, 2011

New projects ...... 328 231 559 Current programs ...... 5,261 1,030 -3,646 2,645

Total ...... 5,589 1,261 -3,646 3,204 Gross inventories of current programs declined by €16.8 million during the year due to the strong take-up of new programs and the inventory reduction for older programs. Expense inventories of new projects rose by €3.8 million, a consequence of the development of new operations. Recognized reversals of provisions for impairment mainly correspond to the reduction in provisions for loss at termination on operations developed in 2007 as they progressed. NOTE 18—TRADE AND OTHER RECEIVABLES

Nov. 30, 2011 Nov. 30, 2010 (in € thousands) Note Gross Depreciation Net Gross Depreciation Net

Accounts receivable . (18.1) 307,423 -1,750 305,673 205,306 -1,981 203,325

Government—VAT . (18.2) 119,684 119,684 104,979 104,979 Government—

Current CIT ...... (19) 36,971 36,971 33,846 33,846 Advances and down

payments ...... 629 629 645 645 Current equity affiliates

accounts ...... (18.3) 10,644 10,644 10,971 10,971 Other financial

receivables ...... (18.4) 11,535 11,535 6,189 6,189 Receivables from

notaries ...... 7,712 7,712 38,774 38,774

Other ...... 8,856 -3,770 5,086 9,864 -3,247 6,617

Prepaid expenses ...... 817 817 730 730

Total ...... 504,271 -5,520 498,751 411,304 -5,228 406,076

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Broad SA’s consolidated financial statements and €2.5 million from receivables of Financière Gaillon 8 in relation to a VAT receivable maturing in 1 to 5 years.

Change in depreciation

(in € thousands) Nov. 30, 2010 Expenses Reversals Nov. 30, 2011

Accounts receivable ...... 1,981 270 -501 1,750 Other receivables ...... 3,247 745 -222 3,770

Total ...... 5,228 1015 -723 5,520

During the period, there were no significant allowances, or reversals of allowances, for trade and other receivables.

NOTE 18.1 ACCOUNTS RECEIVABLE The difference between net accounts receivable (€305.7 million) and the amount of cash calls outstanding (€52.4 million) net of provisions (€253.3 million) corresponds to the lag time between the contractual calls for funds and the program percentage-of-completion revenues recognized. Receivables corresponding to that difference are posted exclusive of tax. The civil-law notary drafting the deed of sales is generally required to ensure that the financing of the sale is closed upon the execution of the deed. Therefore, provisions for accounts receivable are rare.

Receivables beyond 90 days essentially include payment delays on cash calls on lots not yet delivered to buyers. Receivables for which the Group believes there is a risk of non-collection are provisioned in the amount of €1.8 million. According to our standard terms of payment, calls for funds are payable immediately upon receipt. As of 30 November 2011, the calls for funds’ by age were as follows:

between 0 and 30 days ...... € 43.6 million between 30 and 60 days ...... € 1.3 million between 60 and 90 days ...... € 1.9 million more than 90 days ...... € 5.6 million Total cash calls ...... € 52.4 million

NOTE 18.2 GOVERNMENT—VAT At November 30, 2011, the VAT item included the VAT deductible on recorded supplier invoices, amounting to 41.7 million (€21.8 million in 2010), the VAT recognized on unreceived invoices associated with the recognition of expenses on a program percentage-of-completion basis, amounting to €45.7 million (€39.1 million in 2010), and VAT credits amounting to €29.8 million (€41.6 million in 2010).

NOTE 18.3 CURRENT ACCOUNTS OF EQUITY AFFILIATES This item reflects the portion of the loss allocated to minority equity affiliates and not settled as of November 30, 2011 on fully consolidated operations. A provision was recorded in the amount of €10.1 million to cover the risk associated with defaulting equity affiliates (see Note 24.2).

NOTE 18.4 OTHER FINANCIAL RECEIVABLES The “Other financial receivables” item represents the portion due in less than one year on the loan granted to Seniors Santé. The portion due in less than one year as of November 30, 2010, i.e., €6.2 million, was repaid over the course of fiscal year 2011. The amount due for repayment as of December 31, 2011, €6.3 million, was brought forward and settled in January 2012. All accounts receivable and other receivables, excluding the current tax receivable, mature in less than one year. €6.2 million of the other financial receivables item represents the portion due in less than one year on the loan granted to Seniors Santé. Of these receivables, €496.2 million originate from Kaufman & Broad SA’s consolidated financial statements and €2.5 million from receivables of Financière Gaillon 8 in relation to a VAT receivable. F-131

NOTE 19—CURRENT CIT AND DEFERRED TAXES The Financière Gaillon Group has a deferred tax liability in the amount of €36.687 million, of which €35.205 million originate from the Kaufman & Broad Group and €1.482 million from FG8 in relation to goodwill. The deterioration of the real estate market since 2008 brought with it a significant decrease in margin and in the portion of income tied to the percentage-of-completion of work, leading to a tax consolidation loss for the Kaufman & Broad Group in 2009 and 2010. In accordance with the recommendations of tax authorities, the tax treatment of advertising expenses and marketing fees accrued during the period entailed a tax loss in 2011. In light of the 2011 Budget Act, no request for carryback of the loss generated for fiscal year 2011 can be made, unlike for 2010 and 2009; the loss must instead be carried forward. The 2011 year-end current tax receivable of €37 million essentially consists of the carryback request for €36.4 million for 2009 and 2010, as well as receivables associated with down payments of €0.6 million spread across a number of subsidiaries not included within the tax consolidation.

Source of deferred taxes by nature:

Deferred tax base at Deferred taxes at (in € thousands) November 30, 2011 November 30, 2011

Differences in recognition of real estate programs ...... 151,113 -51,759 Provisions and expenses with deferred deductibility ...... -15,246 5,249 Kaufman & Broad brand...... 35,452 -12,306 Bond issuance expenses ...... 6,061 -2,087 Tax deductible beneficial ownership ...... 24,301 -8,367 Provisions for land ...... -2,100 723 Hedging swaps ...... -2,483 855 Tax loss carryforwards ...... -94,743 32,620 FG8 fair value adjustments ...... 4,304 -1,482 Other ...... -386 -133

Balance at the end of the period ...... 106,273 -36,687

(in € thousands) November 30, 2011 November 30, 2010

Balance of deferred taxes at the beginning of the period—assets/(liabilities) ...... -12,342 -10,061

Recognized in income—profit and loss(a) ...... -23,643 -1,625 Recognized in equity ...... -834 -2,343 Other changes(b) ...... 132 1,687

Balance of deferred taxes at the end of the period—assets/(liabilities) ...... -36,687 -12,342

NOTE 20—CASH AND CASH EQUIVALENTS The Group’s cash and cash equivalents can be analyzed as follows:

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Total (in € thousands) November 30, 2011 November 30, 2010

Bank balances and cash on hand ...... 57,898 81,911 Short-term investments(1) ...... 80,340 57,312 Order balances (2) ...... 2,868 3,574

Cash and cash equivalents ...... 141,106 142,797

(1) Financière Gaillon 8’s short term investments consist only of money-market SICAVs. These investments are made with well-known institutions.

(2) Order balances represent 5% of deposits paid by Kaufman & Broad’s clients into a blocked bank account. These amounts are released and therefore available upon execution of the notarized deed.

STATEMENT OF FINANCIAL POSITION—LIABILITIES NOTE 21—SHAREHOLDERS’ EQUITY As of November 30, 2011, Financière Gaillon 8 SA’s stock capital totaled €37,000, divided into 684,089,563 shares of common stock and 682,020,358 shares of preferred stock with the same par value. Preferred shares do not carry voting rights and entitle their holders to a share of profits and to the liquidation dividend of the Company which will be permanently approved on the date of disposal by the Company of its ownership interest in its subsidiary Kaufman & Broad SA. Share ownership has changed in fiscal year 2011. Its structure as of November 30, 2011 is detailed in the table below.

Number of shares of Number of shares of Breakdown of Shareholder common stock preferred stock voting rights % capital

Financière Daunou 10 ...... 465,180,900 68% 34%

CALYON ...... 682,020,358 0% 50%

MERRYL LYNCH ...... 0 0% 0% Financière de Neuilly ...... 218,908,660 32% 16% Frédéric STEVENIN ...... 1 0% Sophie Lombard...... 1 0% Patrick Mouterde ...... 1 0%

Total ...... 684,089,563 682,020,358 100% 100%

21.1 CHANGE IN CAPITAL

(in € thousands) Nov. 30, 2010 Expenses Reversals Nov. 30, 2011

Number of shares ...... 1,366,109,921 1,366,109,921

Capital in € ...... 37,000 37,000

21.2 TREASURY SHARES As of November 30, 2011 the Group did not hold any treasury shares.

21.3 DISTRIBUTIONS There was no distribution carried out by Financière Gaillon 8 for the fiscal year.

21.4 MINORITY INTEREST As of November 30, 2011, the share of income attributable to minority interests totals €15.2 million, €10.0 million of which corresponds to the share of the companies under full consolidation in the financial statements of the Kaufman & Broad Group attributable to external shareholders, since none of those companies had material share in the earnings of the Group, and €5.2 million of which corresponds to the share of income net of tax of Kaufman & Broad attributable to Kaufman & Broad’s minority shareholders.

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NOTE—22 PROVISIONS The provisions are those of the Kaufman & Broad Group.

Reversals Unused (in € thousands) Note Nov. 30, 2010 Expenses used reversals Nov. 30, 2011

Provisions for retirement indemnities .... (22.1) 1,604 494 2,098 Provisions for risks with parties ...... (22.2) 10,084 983 -194 -651 10,222

Provision for tax risk ...... (22.3) 1,282 3258 -514 4,026 Provisions for restructuring ...... (22.4) 1,480 923 -377 -1721 305

Provisions for charges ...... 283 -45 -218 20 Provisions for social litigation risks ...... (22.4) 1,150 1960 -444 -229 2,437 Provisions for other risks ...... (22.5) 5,083 2874 -1556 -1075 5,326

Provisions ...... 20,966 10,492 -3,130 -3,894 24,434

22.1 PROVISIONS FOR RETIREMENT BENEFITS The following assumptions were used in order to calculate retirement benefits: • discount rate: 4.75% rate on “AA” corporate bonds (value determined by the IBOXX index); • average wage increase rate: 3.00%;

• inflation rate: 2%; • retirement age of 62 for all personnel categories; • annual turnover rate: 10% The discount rate applied by the company depending on market conditions is based on commitments made over periods similar to the estimated duration of the company’s commitments for employee benefits. The company does not hold any hedging assets for retirement benefits. As of November 30, 2011, the provision was in the amount of €2.1 million and it originated almost exclusively from the Kaufman & Broad financial statements.

22.2 PROVISIONS FOR RISKS WITH PARTNERS This provision of €10.2 million covers the risk associated with defaulting affiliates; it includes €6.4 million that represents the risk relating to a partner as the result of a legal dispute.

22.3 PROVISIONS FOR TAX RISK Following an audit of the accounts for fiscal years 2005 to 2008, a proposed correction was sent to Kaufman & Broad SA on July 13, 2010 by France’s National and International Tax Audit Directorate (DVNI) in respect of Kaufman & Broad’s operations in Belgium. The amount of the correction was €7.6 million, including €2.4 million in interest and penalties. In September 2010, Kaufman & Broad SA shared its observations regarding the proposed correction with the DVNI, which maintained its position. The company filed an appeal with a higher administrative authority, following which the DVNI advised that it wished to pursue the correction proceedings. The matter was referred to the Departmental Commission on Direct and Turnover Taxes in May of 2011. The latter was supposed to meet prior to the end of fiscal year 2012. In light of how the procedure has evolved, Kaufman & Broad SA recognized a provision for risks in the amount of €3 million for fiscal year 2011.

22.4 PROVISIONS FOR RESTRUCTURING AND SOCIAL RISKS A provision for restructuring charges had been booked in the financial statements at November 30, 2008 primarily to meet the company’s employee commitments. That provision was reduced in fiscal year 2011 to the amount of the expenses settled during the period (€377,000) and an unutilized amount of €1.7 million resulting from the re-discounting of

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outstanding commitments to employees. It totaled €0.3 million as of November 30, 2011, reflecting the balance on outstanding expenses as well as expenses incurred in fiscal year 2009 for labor disputes related to the job protection plan. The provision for legal disputes with former employees of the Group is €1.2 million. A provision in the amount of €1.7 million covers URSSAF assessments reported to GIE Kaufman & Broad and dealing mainly with unpaid contributions for travel allowances, in the amount of the risk estimated by the company, insofar as a portion of the documentation to be provided must allow the amount of the assessment to be reduced.

22.4 PROVISIONS FOR OTHER RISKS The provision for commercial and legal risks mostly covers ongoing disputes with customers or suppliers of delivered projects and amounts to €5.3 million.

NOTE 23—FINANCIAL DEBT 23.1 GROSS FINANCIAL DEBT BY TYPE Gross financial debt represents: • Kaufman & Broad’s gross financial debt in the amount of €302.6 million. • Financière Gaillon 8’s gross financial debt in the amount of €319.5 million.

(in € thousands) Nov. 30, 2011 Nov. 30, 2010

Syndicated bank credit line ...... 591,587 620,965 Other borrowings ...... 23 307 Credit facilities...... 533 2,245 Issuance expenses ...... -8,968 -14,207 Other financial liabilities(1) ...... 38,940 37,333

Total debt ...... 622,115 646,643

—of which non-current ...... 601,063 643,665 —of which current ...... 21,052 2,978 Financing totaling €694.5 million includes senior loans in the amount of €562.3 million and an operations financing line for €132 million (drawn in the amount of €29 million). The syndicated bank credit facilities were drawn in the amount of €592.0 million as of November 30, 2011.

Principal In €k Fin. Gaillon 8(1) Kauf. & Broad Total End of term At Nov. 30, 2011 At Nov. 30, 2010

Line B1 ...... 50,467 50,467 10/07/2015 50,467 46,681

Line B2 ...... 77,661 77,661 10/07/2015 77,661 71,834

Line B3 ...... 136,591 136,591 10/07/2015 136,591 173,750

Line B4 ...... 23,829 23,829 10/07/2015 23,829 26,250

Line C1 ...... 50,636 50,636 10/07/2016 50,636 46,837

Line C2 ...... 77,921 77,921 10/07/2016 77,921 72,075

Line C3 ...... 126,723 126,723 10/07/2016 126,723 156,474

Line C4 ...... 18,499 18,499 10/07/2016 18,499

Revolving ...... 102,900 102,900 10/07/2014 0

Revolving ...... 29,260 29,260 10/07/2015 29,260 27,064

TOTAL ...... 285,945 408,542 694,487 591,587 620,965

(1) includes interests capitalized as of June 30, 2011

23.2 MATURITY

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Maturity Maturity > Maturity (in € thousands) Nov. 30, 2011 Not applicable < 1 year 1 year and <5 years > 5 years

Syndicated credit facility ...... 591,587 17,975 573,612 Credit facilities used/Accrued interest 533 533 Other borrowings ...... 23 18 5 Issuance expenses ...... -8,968 -8,968 Other financial liabilities(1) ...... 38,940 2,526 36,414

Gross financial debt ...... 622,115 -8,968 21,052 610,031 0

(1) As of November 30, 2008, Financière Gaillon 8 was hedging the interest flows of its floating-rate borrowings by purchasing swaps in accordance with its contractual commitments to the lending banks. These contracts were terminated and entailed the invoicing of termination fees recognized in debt for up to €19m, the balance corresponding primarily to accrued interest as of November 30, 2008, i.e., a total of €22.7m (Hedging) posted to financial debt under the agreements signed as of June 30, 2009. The interests accrued as June 30, 2011 were capitalized and brought the total of the hedging debt to €25.7 million. This financial debt generated interest posted to accrued interest between July 1, 2011 and November 30, 2011 which will be, like the interest generated on the other lines of credit, capitalized as of June 30, 2012. Interest accrued as of November 30, 2011 for the entire debt totaled €10.7m. The maturities of the syndicated bank credit facilities set up in 2007 by Kaufman & Broad and Financière Gaillon 8 mature for the RCF line on July 10, 2014 for the share due by Kaufman & Broad (€102.9m) and on July 10, 2015 for the share due by Financière Gaillon 8 (€29m), for the balance of the Senior B line on July 10, 2015 and for the balance of the Senior C line on July 10, 2016. Following the signing of Supplemental Agreements No. 6 and No. 7 to the Senior Facilities Agreement and the double bidding process launched by Kaufman & Broad SA on July 26, 2011 with the aim of repaying early a portion of its fixed- term debt under the Senior Facilities Agreement (see Significant events during the period), repayments were made in the amount of €50.3 million in August 2011 and €0.5 million in October 2011.

The loan agreement’s main acceleration and termination clause is related to the non-compliance with one or more of the financial covenants detailed in the notes to Kaufman & Broad’s consolidated financial statements and below for the financial covenants pertaining to Financière Gaillon 8.

Applicable covenants The Senior Facilities agreement, which results from the final agreement signed by the Company and its lenders on January 23, 2009 and the supplemental agreements signed on June 30, 2009 and November 25, 2009, stipulates an adjustment in the financial ratios applicable to the Company: • in the following accounting quarters until the expiration of the agreement in 2016, the Group will be required to comply with two ratios, calculated on the basis of the Kaufman & Broad Group consolidated financial indicators, with levels redefined as follows:

Nov. Feb. May Aug. Nov. Nov. Nov. Nov. RATIOS 2011 2012 2012 2012 2012 2013 2014 2015

Debt ratio ...... ‹ 7,05 < 6,80 < 6,40 < 6,15 ‹ 5,60 ‹ 4,05 ‹ 3,30 ‹ 2,20 Minimum cash flow level (in € millions) ...... 116 117 143 183 207 328 440 540

23.3 MAIN NET DEBT ITEMS Net financial debt corresponds to gross financial debt, as defined above, minus cash and cash equivalents. The balance sheet items contributing to net financial debt are as follows:

(in € thousands) November 30, 2011 November 30, 2010

Gross financial debt ...... 622,115 646,643

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(in € thousands) November 30, 2011 November 30, 2010

Cash and cash equivalents ...... 141,106 142,797

Net financial debt ...... 481,009 503,846

NOTE 24—BLOCKED CURRENT ACCOUNTS The amount of €4.9 million as of November 30, 2011 corresponds to the loan granted by Financière Daunou 10, which is Financière Gaillon 8’s majority shareholder and an investment vehicle for funds managed by PAI Partners.

NOTE 25—CURRENT AND NON-CURRENT LIABILITIES

(in € thousands) Nov. 30, 2011 Nov. 30, 2010

Other current financial liabilities (see Note 23.1) ...... 21,052 2,978 Accounts payable ...... 409,730 392,667 Other payables ...... 104,017 88,951 Deferred income ...... 1,357 1,261

Total current liabilities ...... 536,156 485,857 The “Other liabilities” item corresponds primarily to tax and social security liabilities of €70.5 million, including €47.6 million in VAT, €19.2 million in advances and down payments received, and €14.3 million in shareholders’ current accounts. A PAI invoice in the amount of €15.3 million relative to the cost of the acquisition of the Kaufman & Broad shares was reclassified under non-current liabilities as its maturity is from one to five years.

Additional Information NOTE 26—NOTES TO THE STATEMENT OF CASH FLOWS DETAILS OF THE CHANGE IN OPERATING WORKING CAPITAL REQUIREMENTS

Change in Change in scope of Other (in € thousands) November 30, 2010 WCR consolidation changes November 30, 2011

Inventories ...... 256,278 -16,139 -270 239,869 Accounts receivable ...... 203,325 102,348 305,673 Accounts payable ...... -392,667 -32,553 418 -214 -425,016 Other ...... 72,504 -32,662 -644 39,198

Operating working capital requirement (Statement of cash flows) ...... 139,440 20,994 418 -1,128 159,724

Current CIT ...... 33,846 3,125 36,971

Working capital requirement ... 173,286 24,119 418 -1,128 196,695

The change in operating working capital requirements (excluding current CIT) amounted to €21 million between December 1, 2010 and November 30, 2011. The amount of inventories on the balance sheet, i.e., €239.9 million includes an allocation of a share of the acquisition price for €4.3 million.

NOTE 27—OFF-BALANCE SHEET COMMITMENTS As of November 30, 2011, Management believes, to the best of its current knowledge, that there are no commitments likely to have a material impact on the current or future financial position of the Group, other than those indicated in Note 23.1.

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27.1 COMMITMENTS GIVEN Pledges All of Kaufman & Broad SA’s equity securities have been pledged in favor of the lending institutions to guarantee the commitments of Financière Gaillon 8 under the financing. Financière Gaillon 8 has signed the following agreements: • a pledge of the credit balance of its bank accounts under an agreement between Financière Gaillon 8 and Calyon, • a pledge of a financial instruments account opened in the name of Financière Gaillon 8 in which are recorded all the Kaufman & Broad shares held by the Company, and • an agreement for the assignment of trade receivables as guarantee on the intra-Group receivables of Financière Gaillon 8 from its subsidiaries, between Financière Gaillon 8 and Calyon.

Security interests have been granted by Kaufman & Broad SA to guarantee its commitments for the financing set up in July 2007.

% total of Kaufman & Broad SA Final Amount of balance sheet Type of pledge/ expiration assets Total balance at Nov. 30, Mortgages Start date date pledged(b) sheet value 2011

Pledge of financial instruments account—100% of Kaufman & Broad Homes SAS shares held by the company ...... 11/07/2007 (a) € 10,450,195 € 10,450,195 2%

Pledge of credit balance in the Kaufman & Broad SA bank accounts ...... 11/07/2007 (a) € 256,785 € 256,785 0%

Framework agreement for the assignment of intra-group receivables from Kaufman & Broad SA’s subsidiaries Kaufman & Broad Financement SNC ...... 11/07/2007 (a) € 0 € 0

Pledge of 100% of Kaufman & Broad Europe SA shares ...... 09/11/2007 (a) € 262,436,879 € 262,436,879 49%

Total ...... € 273,143,859 € 273,143,859 51%

(a) These pledges are intended to be maintained until full payment of the amounts and fees owed by the company as borrower and guarantor under the Senior Facilities Agreement and ancillary agreements. (b) Net book value in the individual company financial statements as of 30 November 2011.

Guarantees and bonds given All the items detailed below are related to the normal course of Kaufman & Broad’s operations and have been provided by the Kaufman & Broad Group.

November 30, November 30, (in € thousands) 2011 2010

Performance bonds(a) ...... 215,873 162,897 Hoguet Law guarantees(b) ...... 220 220 Order indemnities(c) ...... 9,144 9,425

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November 30, November 30, (in € thousands) 2011 2010

Other guarantees given(d) ...... 51,935 75,713

Guarantees and bonds given ...... 277,172 248,255

Performance bonds are shown on the balance sheet in the amount of the risk incurred by the financial institution issuing such guarantees. Such risk is valued, for each transaction, as follows: program’s forecast production cost less the part financed by the Group and the amount of sales signed as of the closing date. This valuation thus does not take into account orders made as of the closing date or the percentage of completion of construction on lots not sold.

Commitments related to capital expenditures, purchases and rentals These commitments were given by the Kaufman & Broad Group.

(in € thousands) Payments due by maturity

Nov. 30, Less than 1 More than Nov. 30, 2011 one year to 5 years 5 years 2010

Commitments for leases...... 50,805 5,805 22,668 22,332 21,543

Capital expenditure commitments ...... 22 18 4 293

Total ...... 50,827 5,823 22,672 22,332 21,836

Commitments for leases The table below shows, as of November 30, 2011, the minimum future rents on leases not subject to any termination:

(in € thousands) November 30, 2011 November 30, 2010

2011 ...... 4,816 2012 ...... 5,805 4,895 2013 ...... 5,725 4,522 2014 ...... 8,535 5,972 2015 ...... 4,274 1,338

2016 ...... 4,134

2017 and beyond ...... 22,332

Total minimum future rents ...... 50,805 21,543 The rent expense recognized on the income statement at November 30, 2011 for operating leases amounted to €5.7 million (€5.0 million at November 30, 2010). The Group’s finance leasing agreements are capitalized.

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27.2 COMMITMENTS RECEIVED Work guarantees All items detailed below are related to the normal course of operations of the Kaufman & Broad Group.

(in € thousands) Nov. 30, 2011 Nov. 30, 2010

Guarantees on work contracts ...... 81,408 80,603

Pledges and liens To guarantee the amount remaining as of November 30, 2011 (€11.5 million) of the loan granted to Seniors Santé, the Kaufman & Broad Group holds (i) payment delegations for payments to be made, subject to certain conditions, by the Korian company as part of the latter’s acquisition of shareholdings in certain Seniors Santé subsidiaries, and (ii) pledges pertaining to a number of financial securities accounts in which shares of certain Seniors Santé subsidiaries are registered.

Under a memorandum of understanding, Kaufman & Broad SA stood surety for one of its partners, limited to €4 million excluding VAT and the provision of a first-demand bank guarantee, in respect of commitments made by two of its subsidiaries in the aforementioned memorandum of understanding. In exchange, this partner’s main shareholder stood surety for its subsidiary’s commitments to joint ventures for the same amount plus its own provision of a first-demand bank guarantee.

NOTE 28—EXPOSURE TO MARKET RISKS AND FINANCIAL INSTRUMENTS 28.1 MANAGEMENT OF INTEREST RATE RISK The policy for managing interest rate risk is intended to limit and control fluctuations in interest rates and their impact on net earnings and cash flow, so that the total cost of the debt remains acceptable. To achieve this objective, the Group hedges its variable-rate loan interest flows with interest-rate swaps. Swaps are derivatives serving to hedge cash flows. They are marked to market on the balance sheet. The Group applies hedge accounting. Under the Senior Credit Facilities Agreement, the Group agreed to set up hedging instruments to cover the payment of interest on at least 50% of the amounts due under the senior B and C loans. Interest rate hedges are made by way of instruments listed on organized markets or over-the-counter with high-quality counterparties. The following table contains details of the portfolio of one-month Euribor lender/fixed-rate borrower swaps as at November 30, 2011.

Notional amount Market value in millions Fixed at November 30, 2011 Type of euros rate Expiration date Type in % of face amount

EUR 1m fixed rate swap ...... 97 1.800% Nov. 30, 2009—Nov. 30, 2012 hedge -0.97% EUR 1m fixed rate swap ...... 83 1.800% Nov. 30, 2009—Nov. 30 2012 hedge -0.97% EUR 1m fixed rate swap ...... 70 1.895% Nov. 30, 2009—Nov. 30, 2012 hedge -1.06%

Total ...... 250

The fair value of these derivatives was provided by a specialized third-party company. F-140

The hedging reserve in shareholders’ equity was -€2.483 million (€1.626 million net of deferred taxes) as of November 30, 2011. The exposure of the Group’s net debt is:

Type of instrument Variable/Fixed Less than one year 1 to 5 years More than 5 years

Seniors B and C ...... Variable 591,587 573,612 — Credit facilities...... Variable 533 0 —

Financial liabilities 592,120 573,612 — Bank balances and cash on hand ...... Variable 57,898 0 — Short-term investments ...... Variable 80,340 0 — Order balances ...... Variable 2,868 —

Financial assets ...... 141,106 0 —

Net position before management ...... 451,014 573,612 —

Swap ...... -250,000 0

Off-Balance sheet items ...... -250,000 0 —

Net position after management ...... 201,014 573,612 —

28.2 MANAGEMENT OF CURRENCY RISK The Group does not have exposure to foreign exchange risk as all of its assets and liabilities and its flows are denominated in euros.

28.4 MANAGEMENT OF COUNTERPARTY RISK The counterparty risks primarily concern Kaufman & Broad suppliers and subcontractors, Kaufman & Broad customers and banking counterparties. Because of the large number of suppliers and subcontractors, their insolvency is unlikely to have any material impact on operations. The Group considers that the counterparty risk on accounts receivable is very limited because of the large number of customers and the fact that sales are signed exclusively before a civil-law notary, generally after the financing for the property acquisition has been secured. Customer-related credit risks are managed by the agencies under the oversight of corporate headquarters. Due to the nature of its business, the Group’s exposure to customer default risks is low. Aging receivables are reviewed monthly. The Group invests its cash and cash equivalents and its investment securities with top-tier financial institutions. The Group also enters into interest rate agreements with leading financial institutions.

For programs developed jointly with partners, the consequences of the measures taken in 2009, whose impacts were felt in 2010 (particularly a reduction in sale prices), continue to pose the risk that the Group may have to cover their insolvency in the financing of such programs and, as applicable, their share of the losses in non-profitable developments. 28.5 MANAGEMENT OF LIQUIDITY RISK The table below shows the Group’s contractual obligations for payment of interest, repayment of financial debt, derivatives excluded, and the derivatives with their positive or negative fair values. Variable rate interest payments were calculated on the basis of the latest interest rates known prior to November 30, 2011.

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Book value Less than one year 1 to 5 years More than 5 years

(in € thousands) Nov. 30, 2011 Interest Repayment Interest Repayment Interest Repayment

Borrowings and

financial liabilities Syndicated lines of

credit ...... 591,587 40,459 17,975 143,185 573,612 Credit facilities and

other borrowings ..... 556 28 551 5 Fair value of

derivatives

Total ...... 592,143 40,487 18,526 143,185 573,617 0 0 The interest flows are paid monthly and take into account the swaps taken out in November 2010 and classified as hedging instruments. Details on the syndicated credit are provided in Note 23.

28.6 BOOK VALUE OF FINANCIAL INSTRUMENTS BY IAS 39 CATEGORIES We detail below the main methods and assumptions used in order to determine the fair market value of financial instruments. LOANS AND RECEIVABLES, FINANCIAL ASSETS AVAILABLE FOR SALE The Group believes that the balance sheet value of cash, accounts receivable and accounts payable is the value most representative of their market value because of the high level of liquidity of these items. DEBT AT AMORTIZED COST Non-current financial liabilities are variable-rate. The Group believes that their fair value was close to their book value.

Fair value through Fair value Assets Debt at Book profit and through sh. available for Loans and amortized November 30, 2011 value loss equity sale receivables cost

Financial assets Accounts receivable ...... 305,673 305,673

Cash and cash equivalents ...... 141,106 141,106 Current tax ...... 36,971 36,971 Other current receivables ...... 143,755 143,755 Other non-current financial assets 2,551 2,551

Total financial assets ...... 630,056 141,106 0 0 488,950 0

Financial liabilities

Loans and financial debts ...... 622,115 2,484 619,631

Accounts payable ...... 425,016 425,016

Other current liabilities ...... 105,374 105,374

Total financial liabilities ...... 1,152,505 0 2,484 0 0 1,150,021

As of November 30, 2008, Financière Daunou 10 had disbursed to Financière Gaillon 8 funds in the amount of €284.6 million under a shareholder loan in application of a shareholder loan agreement dated July 9, 2007, amended by a supplemental agreement dated September 19, 2007. On June 30, 2009, Financière Gaillon 8 (the Company) had an equity increase through the capitalization of receivables from the Company held by Financière Daunou 10 S.à.r.l. under the various shareholder loans that it has granted to the Company, which resulted in the issue of ordinary shares of the Company at its profit Concurrently with these transactions involving the Company’s capital, a shareholder’s agreement was signed on June 30, 2009 between the Company, PAI Partners, Financière Daunou 10 S.à.r.l., Calyon and ML IBK Positions, Inc., aimed at organizing the relationship among the financial shareholders within the Company. A shareholder loan agreement was further signed between the Company and Financière Daunou 10 S.à.r.l. under which the latter disbursed to the Company a principal amount of €4,900,000. The transactions conducted between Financière Gaillon 8 and Kaufman & Broad SA were authorized by the Board of Directors of the two companies; they are presented under related-party transactions:

They pertain to a Service Agreement set up in March 2008. No other entity exercises significant influence over the Financière Gaillon 8 Group.

Relationships with the senior manager of the Kaufman & Broad Group All ownership interests held by certain corporate officers and employees of the Kaufman & Broad Group in the Company are combined within Financière de Neuilly. On June 30, 2009, Financière Daunou 10 S.à.r.l. tendered to Financière de Neuilly the ownership interest it held in the Company as reserve with a view to allocating it to the new managers; it also transferred to Financière de Neuilly, 210,473,105 Company shares. Considering the Company’s capital restructuring transactions and the restructuring of its shareholding structure, a shareholders’ agreement superseding the shareholders’ agreement signed in 2007 was signed on June 30, 2009, between the Company, Financière Daunou 10 S.à.r.l., Financière de Neuilly, and the employers and managers of the Kaufman & Broad Group. In fiscal year 2011, the Group did not grant any loans to the members of its administrative and management bodies.

COMPENSATION OF MEMBERS OF THE GOVERNING AND MANAGEMENT BODIES The table below shows the fiscal year 2011 Kaufman & Broad compensation of persons who at the fiscal year end or during the fiscal year ended November 30, 2011 were members of the administrative and management bodies of the Kaufman & Broad Group.

November 30, November 30, (in € thousands) 2011 2010

Short-term benefits other than employer contributions (a) ...... 4,118 4,184 Short-term benefits: employer contributions ...... 1,966 2,043 Post-employment benefits—balance sheet impact (b) ...... 886 376 Other long-term benefits(c) ...... NA NA Retirement indemnities ...... NA NA Directors’ fees(d) ...... 216 90 Share-based payments...... 0 0 Stock option awards (number) ...... 0 0 Bonus share awards (number) ...... 22,000 26,000

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RELATED PARTY TRANSACTIONS Related party agreements authorized or amended since the 2010 fiscal year-end: 1. Senior Facilities Agreement To finance the acquisition of Kaufman & Broad SA and to enable the Company, Kaufman & Broad SA and its subsidiaries, among other things (i) to refinance their existing debt, (ii) to meet their working capital requirements and general operating requirements and (iii) to finance the investments and acquisitions of the Kaufman & Broad Group, senior facilities were disbursed to the Company and to Kaufman & Broad SA under a “Senior Facilities Agreement” (drafted in English) signed on July 9, 2007 (as amended by supplemental agreement of July 27, 2007), by, inter alia, the Company as the original borrower and original joint surety, Calyon and Merrill Lynch International as the mandated legal arrangers, Calyon as agent and a Group of financial institutions (the “Senior Facilities Agreement”). It should be noted that Kaufman & Broad S.A. became party to the Senior Facilities Agreement as additional borrower and additional joint surety by accession letter dated July 10, 2007 and Kaufman and Broad Homes S.A.S. became party to the Senior Facilities Agreement as additional joint surety by accession letter dated November 9, 2007. Under the Senior Facilities Agreement, the Banks named in said Agreements granted to the Company: (a) a term credit facility B1 (Facility B1) for up to €43.10 million; (b) a term credit facility B2 (Facility B2) for up to €146.90 million; (c) a term credit facility C1 (Facility C1) for up to €43.10 million; (d) a term credit facility C2 (Facility C2) for up to €146.90 million; (d) a term bridge facility (Bridge Facility 1) for up to €26.40 million, (e) a term bridge facility (Bridge Facility 2) for up to €26.10 million and (f) a revolving credit facility (Revolving Facility) for up to €200 million. The Senior Facilities Agreement had three supplemental agreements signed during the fiscal year ended November 30, 2009:

1.1. Supplemental Agreement No. 2 to the Senior Facilities Agreement signed on January 23, 2009 : The purpose of Supplemental Agreement 2 to the Senior Facilities Agreement was to reflect the terms and conditions of the agreement signed by Financière Gaillon 8, Kaufman & Broad S.A. and the senior lenders on December 26, 2008, under the name “Heads of Agreement”, relative to the credit lines granted to the Kaufman & Broad S.A. Group. The signature of this Supplemental Agreement was authorized by the Company’s Board of Directors on January 23, 2009.

1.2. Supplemental Agreement No. 3 to the Senior Facilities Agreement signed on June 30, 2009: At the time of signature of the aforementioned Supplemental Agreement No. 2, no global agreement had been found relative to the lines of credit granted to the Company. The purpose of Supplemental Agreement No. 3 to the Senior Facilities Agreement was to reflect the terms and conditions of the agreement signed by Financière Gaillon 8, Kaufman & Broad S.A. and the senior lenders on May 27, 2009, under the name “Heads of Agreement”, relative to the credit lines granted to the Kaufman & Broad S.A. Group. The signature of this Supplemental Agreement was authorized by the Company’s Board of Directors on June 30, 2009.

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• alignment of interest rate hedging under the Senior Facilities Agreement to the new market conditions. In that respect, it is provided for Kaufman & Broad SA’s option to cancel the existing swaps and to set up new interest- rate swaps; • amendment to the terms of the clean-down obligation of Kaufman & Broad SA following the cancellation in its entirety of the liquidity and acquisition line. The signature of that Supplemental Agreement was authorized by the Company’s Board of Directors on November 24, 2009.

1.5. Supplemental Agreements No. 6 and No. 7 to the Senior Facilities Agreement signed on July 25, 2011 Supplemental Agreement No. 6, signed on July 25, 2011, provides that Kaufman & Broad SA may start repaying a portion of its fixed term debt under the Senior Facilities Agreement in amounts less than the face amount of said debt, this discount taking the form of waivers of receivables granted by the relevant lenders, in accordance with specific terms and conditions, in particular that the principal amount could not exceed €70 million and the repayments needed to take place on one or more occasions by February 29, 2012 at the latest. Supplemental Agreement No. 7, signed on July 25, 2011, provides that Kaufman & Broad SA may cancel all or part of the commitments of certain lenders under the revolving line of credit who wished to withdraw from said line prior to its final expiration, in exchange for payment by these lenders of a cancellation commission in accordance with specific terms and conditions, in particular that the principal amount could not exceed €75 million and the cancellations could be made on one or more occasions without limitation and would need to take place at the latest by February 29, 2012. The signing of Supplemental Agreements No. 6 and No. 7 to the Senior Facilities Agreement was authorized by the Board of Directors on 21 July 2011. The various effects on the consolidated financial statements are specified in Note 23.

Related-party transactions approved during prior fiscal years that continued in fiscal year 2011 2. “Managers” Shareholders’ Agreement of June 30, 2009 between the Company, Financière Daunou 10 S.à.r.l., Financière de Neuilly and the partners of Financière de Neuilly Pursuant to the agreement on the amendments to be made to the shareholders’ agreement of the Company signed on December 3, 2007, on June 30, 2009, the Company signed with Financière Daunou 10 S.à.r.l., Financière de Neuilly and the partners of Financière de Neuilly a shareholders’ agreement that incorporates the amendments that the direct and indirect shareholders of the Company agreed to make to the Company’s shareholders’ agreement of December 3, 2007, to take into account the planned restructuring. The purpose of that shareholders’ agreement which supersedes the Shareholders’ Agreement signed on December 3, 2007 is to organize the relationships within the Company between Financière Daunou 10 and the Group’s managers and Financière de Neuilly, and to stipulate and organize the circumstances and conditions under which the managers of the Group will have the right or the obligation to sell some of the shares issued by Kaufman & Broad, which they hold. The signature of that shareholders’ agreements was authorized by the Board of Directors on June 30, 2009.

3. Shareholder’s loan agreement of June 30, 2009 between Financière Daunou 10 S.à.r.l., as lender and the Company, as borrower Under a shareholder loan agreement dated June 30, 2009, Financière Daunou 10 S.à.r.l. disbursed to the Company a principal amount of €4,900,000 in the form of a shareholder loan, the purpose of which was to enable the Company to

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finance its existing liquidity commitments, all the costs and fees related to the restructuring and its operating costs and current expenses. Said loan bears no interest and will be repayable as from the date of transfer of all the Kaufman & Broad SA shares by the Company and will be subordinated to the payment of all sums due by the Company under the senior debt. The signature of this agreement was authorized by the Board of Directors on June 30, 2009.

4. Agreement relative to the application of Article L.225-248 of the French Commercial Code to the Company On June 30, 2009, the Company signed an agreement with PAI Partners, Financière Daunou 10 S.à.r.l., Financière de Neuilly, the partners of Financière de Neuilly, the Company’s senior lenders, Calyon and Merrill Lynch International Limited, London Subsidiary as mezzanine creditors, and Calyon and ML IBK Positions, Inc. as holders of preferred Company shares, in relation to the application of Article L.225-248 of the French Commercial Code and to the commitments made in relation thereto by the parties to that agreement. The signature of that agreement was authorized by the Board of Directors on June 30, 2009.

5. Supplemental Agreement No. 1 and No. 2 to the subordination agreement of January 23, 2009 and June 30, 2009, respectively Under the Senior Facilities Agreement, the Company signed on July 9, 2007 a subordination agreement among the senior lenders, Financière Daunou 10 S.à.r.l, Calyon as senior credit agent, Merrill Lynch International Bank Limited, London subsidiary as mezzanine credit agent, the mezzanine lenders (the “Subordination Agreement”), the purpose of which is, among other things, to manage the order and conditions of repayment of the sums borrowed. Kaufman & Broad S.A. became party to the Subordination Agreement as additional borrower and additional joint surety by accession instrument dated July 10, 2007 and Kaufman and Broad Homes S.A.S. became party to the Subordination Agreement as additional joint surety by instrument dated November 9, 2007. The Subordination Agreement had two supplemental agreements signed during the fiscal year ended November 30, 2009:

5.1. Supplemental Agreement No. 1 to the Subordination Agreement signed on January 23, 2009: The signing of Supplemental Agreement No. 2 to the Senior Facilities Agreement and the aforementioned agreements relative to the financial restructuring of the Company required the amendment of the Subordination Agreement. An amendment to that agreement was signed for that purpose on January 23, 2009. In application of Articles L.225-38 and l.225-40 of the French Commercial Code, the signature of that agreement was authorized by the Company’s Shareholders’ Meeting on June 30, 2009 since the Board members were unable to vote in the proceedings of the Company’s Board of Directors on June 30, 2009.

5.2. Supplemental Agreement No. 2 to the Subordination Agreement signed on June 30, 2009: The signing of Supplemental Agreement No. 3 to the Senior Facilities Agreement and the aforementioned agreements relative to the financial restructuring of the Company required the amendment of the Subordination Agreement. An amendment to that agreement was signed for that purpose on June 30, 2009. In application of Articles L.225-38 and l.225-40 of the French Commercial Code, the signature of that agreement was authorized by the Company’s Shareholders’ Meeting on June 30, 2009 since the Board members were unable to vote in the proceedings of the Company’s Board of Directors on June 30, 2009.

6. Service Agreement of February 28, 2008 On February 28, 2008, the Company SA signed an agreement, effective March 1, 2008, between Kaufman & Broad SA and the main subsidiaries of Kaufman & Broad SA pursuant to which the companies assigned a support and consulting function to Financière Gaillon 8 for, among other things, the preparation of consolidated reports, forward-looking financial plans, of budgets and forecasts, the preparation of the consolidated financial statements, the provision of tools and systems required for the performance of reporting and management tools.

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In consideration for services performed, Kaufman & Broad SA and its main subsidiaries pay the Company fees equal to 100% of the direct and indirect costs incurred by the Company for the services under this agreement, plus an additional 5%. These fees, apportioned among Kaufman &Broad Group companies using an allocation key defined in the agreement, came to €740,000 at November 30, 2011.

The signature of this agreement was authorized by the Board of Directors on 28 February 2008.

7. Shareholders’ Agreement of the Mezzanine lenders of June 30, 2009 signed by the Company, PAI Partners, Financière Daunou 10 S.à.r.l., Calyon and ML IBK Positions Inc. The mezzanine lenders, Calyon and ML IBK Positions Inc., became shareholders of the Company at the completion of their subscription to a capital increase of the Company carried out on June 30, 2009, since the subscription took place through offset of the Company’s debt to them under a mezzanine credit agreement dated July 27, 2007, signed between the Company, Calyon and Merrill Lynch International Bank. At the completion of that subscription, Calyon and ML IBK Positions, Inc. signed with the Company, Financière Daunou 10 S.à.r.l. and PAI Partners a shareholders’ agreement the purpose of which is to organize the relationships between the parties within the Company and, in particular, to set the rules applicable to (i) transfers of the Kaufman & Broad SA shares held by the Company, (ii) transfer of preferred shares held by the Mezzanine lenders. The signature of that shareholders’ agreement was authorized by the Board of Directors on June 30, 2009.

NOTE 30—POST-CLOSING EVENTS None

NOTE 31—INFORMATION ABOUT THE KAUFMAN & BROAD GROUP The consolidated financial statements of Kaufman & Broad as of November 30, 2011 were approved by the Board of Directors at its meeting of February 16, 2012 as presented below:

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STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME Consolidated Income Statement

(in € thousands) Note Nov. 30, 2011 Nov. 30, 2010

Revenues ...... 1,044,255 935,702 Cost of sales ...... -841,460 -772,289

Gross margin ...... 202,795 163,413

Selling expenses...... -27,375 -22,651 Administrative expenses ...... -62,086 -57,519 Technical and customer service expenses ...... -15,634 -14,370 Other expenses ...... -10,026 -3,842 Other income ...... 1,395 1,656

Current operating profit ...... 89,069 66,687

Other non-recurring income ...... 1,734 4,319 Other non-recurring expenses ...... -952 -189

Operating income ...... 89,851 70,817

Financial expenses ...... -15,141 -31,136 Financial income ...... 3,619 1,407

Cost of net financial debt ...... -11,522 -29,729

Other interest expense ...... -2,444 -374 Other financial income...... 9,359

Pre-tax income of consolidated companies ...... 85,244 40,714

Income tax ...... -28,709 -8,045

Net income of consolidated companies ...... 56,535 32,669

Share of income (loss) of equity affiliates and joint ventures ...... 955 633

Income/loss from assets held for sale ...... — -1,000

Income (loss) attributable to shareholders ...... 57,490 32,302

Income from minority interests ...... 9,977 14,239

Income attributable to shareholders ...... 47,513 18,063

Average number of shares ...... 21,381,864 21,332,939

Earnings per share ...... 2.22 0.85

Diluted earnings per share ...... 2.22 0.85

Consolidated net comprehensive income

(in € thousands) Nov. 30, 2011 Nov. 30, 2010

Income (loss) attributable to shareholders ...... 57,490 32,302

Change in gross value of derivative instruments ...... 1,192 -3,675 Tax impact on derivative instruments ...... -410 1,267 Deferral of fair value of swaps unwound at the end of 2009 ...... 1,812 11,106 Tax effect of swaps unwound at the end of 2009 ...... -581 -3,811 Change in actuarial gains and losses ...... -453 -586 Tax effect on actuarial gains and losses ...... 156 201

Total gains and losses recognized directly inequity ...... 1,716 4,502

Consolidated net comprehensive income ...... 59,206 36,804 F-148

(in € thousands) Nov. 30, 2011 Nov. 30, 2010

Attributable ...... 52,229 22,565 Minority interests ...... 9,977 14,239

F-149

STATEMENT OF CONSOLIDATED FINANCIAL POSITION Assets

(in € thousands) Note Nov. 30, 2011 Nov. 30, 2010

Goodwill ...... 68,511 68,511 Intangible assets ...... 83,010 82,310 Property, plant and equipment ...... 5,883 5,988 Equity affiliates and joint ventures ...... 3,473 5,359 Other non-current financial assets ...... 2,551 12,678

Non-current assets ...... 163,428 174,846

Inventories ...... 235,556 246,146 Accounts receivable ...... 305,673 203,325 Other receivables ...... 141,260 159,480 Other financial receivables ...... 11,535 6,189 Current tax ...... 36,971 33,846 Cash and cash equivalents ...... 138,878 140,430 Prepaid expenses ...... 805 718

Current assets...... 870,678 790,134

Total Assets ...... 1,034,106 964,980

Equity and Liabilities

(in € thousands) Note Nov. 30, 2011 Nov. 30, 2010

Capital stock ...... 5,612 5,612 Reserves related to capital ...... 979 979 Attributable reserves ...... 111,001 96,467 Other reserves ...... -12,274 -13,914 Treasury shares ...... -4,455 -3,438 Attributable net income ...... 47,513 18,063

Attributable shareholders’ equity ...... 148,376 103,769

Minority interests ...... 8,470 11,785

Shareholders’ equity ...... 156,846 115,554

Provisions ...... 24,424 20,961 Borrowings and other non-current financial liabilities ...... 283,284 351,549 Deferred taxes ...... 35,205 8,857

Non-current liabilities ...... 342,913 381,367

Other current financial liabilities ...... 19,337 567 Accounts payable ...... 409,668 377,292 Other payables ...... 103,985 88,939 Deferred income ...... 1,357 1,261

Current liabilities ...... 534,347 468,059

Total Liabilities & Shareholders’ Equity ...... 1,034,106 964,980

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REGISTERED OFFICE OF THE ISSUER Financière Gaillon 8 S.A. 232 rue de Rivoli 75001 Paris France

LEGAL ADVISORS TO THE ISSUER

(as to U.S. law) (as to French law) Cravath, Swaine & Moore LLP Gide Loyrette Nouel AARPI One Ropemaker Street 22 cours Albert Ier London EC2Y 9HR 75008 Paris United Kingdom France

LEGAL ADVISORS TO THE INITIAL PURCHASERS

(as to U.S. law) (as to French law) Latham & Watkins (London) LLP Latham & Watkins AARPI 99 Bishopsgate 45 Rue Saint-Dominique London EC2M 3XF 75007 Paris United Kingdom France

TRUSTEE AND SECURITY AGENT PRINCIPAL PAYING AGENT

The Law Debenture Trust Corporation p.l.c. Deutsche Bank AG, London branch Fifth Floor, 100 Wood Street Winchester House London EC2V 7EX 1 Great Winchester Street United Kingdom London EC2N 2DB United Kingdom

LISTING AGENT REGISTRAR AND TRANSFER AGENT

The Bank of New York Mellon SA/NV Deutsche Bank Luxembourg S.A. 4th Floor, Hanover Building 2 Boulevard Konrad Adenaur Windmill Lane L-1115 Luxembourg Dublin 2 Luxembourg Ireland

LEGAL ADVISOR TO THE TRUSTEE

White & Case LLP 5 Old Broad Street London EC2N 1DW United Kingdom

STATUTORY AUDITORS OF THE ISSUER

Ernst & Young et Autres Tour First 1, place des Saisons 92037 Paris—La Défense

France

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