New AREVA Holding Annual Activity Report* 2016 * Including: - the management report of the Board of Directors, including the management report of the New AREVA group; - the report of the Board of Directors on the principles and criteria for determining, distributing and allocating fixed, variable and exceptional items making up total compensation and benefits of any kind attributable to the executive directors of New AREVA Holding, pursuant to article L. 225-37-2 of the French Commercial Code; - the corporate social responsibility report (CSR); and - the report of the Chairman of the Board of Directors on the conditions for preparing and organizing the work of the Board of Directors and on internal control and risk management procedures. New AREVA Holding | Annual Activity Report – 2016 1/67 CONTENTS 1 SITUATION AND ACTIVITIES OF THE COMPANY AND ITS SUBSIDIARIES ....................................................... 3 1.1 Overview ................................................................................................................................................................................ 3 1.2 Situation and activities of the company and its subsidiaries by business segment during the year ...................................... 7 1.3 Research and development activities .................................................................................................................................. 30 1.4 Key non-financial performance indicators related to the company's specific activities ........................................................ 31 1.5 Foreseeable developments and future prospects ................................................................................................................ 31 1.6 Significant events since the date of closing ......................................................................................................................... 34 1.7 Description of major risks and uncertainties confronting the company ................................................................................ 37 1.8 Company exposure to price, credit, liquidity and cash management risk ............................................................................ 54 1.9 Information on accounts payable to suppliers ..................................................................................................................... 57 1.10 Representative and branch offices ...................................................................................................................................... 58 2 PRESENTATION OF THE ANNUAL FINANCIAL STATEMENTS ......................................................................... 59 2.1 Consolidated financial statements for the year ended December 31, 2016 ........................................................................ 59 2.2 Financial statements for the year ended December 31, 2016 ............................................................................................. 59 2.3 Dividends ............................................................................................................................................................................. 59 2.4 Non-deductible expenses .................................................................................................................................................... 59 3 INFORMATION ON SHARE CAPITAL.................................................................................................................... 59 3.1 Structure and changes in the capital of the company and treasury shares ......................................................................... 59 3.2 Distribution of capital and voting rights ................................................................................................................................ 60 4 MANAGEMENT OF THE COMPANY – STATUTORY AUDITORS ........................................................................ 60 4.1 List of terms of office and functions exercised in any company by each of the executive directors .................................... 60 4.2 Compensation and benefits of any kind paid during the period, and criteria applied to their calculation or the circumstances under which they were established .............................................................................................................. 62 4.3 Detail of commitments of any kind made by the company towards its directors and officers, in particular any item of compensation, payments or benefits due or likely to be due as a result of the assumption, cessation or change of and in these functions or thereafter. Description of methods for determining said commitments as well as their amounts if they appear in the agreements. ................................................................................................................................................... 62 4.4 Stock options allowing subscription or acquisition of shares for no consideration .............................................................. 63 4.5 Delegation of authority to the Chief Executive Officer for sureties, endorsements or guarantees ...................................... 63 4.6 Report of the Board of Directors on compensation of executive directors ........................................................................... 63 4.7 Statutory auditors ................................................................................................................................................................. 63 5 OTHER INFORMATION .......................................................................................................................................... 63 5.1 Injunctions and fines for anti-competitive practices ............................................................................................................. 63 5.2 Agreements referred to in article L. 225-102 paragraph 13 of the French Commercial Code ............................................. 64 5.3 Review of regulated agreements authorizing in 2016 .......................................................................................................... 64 5.4 Review of regulated agreements authorized during previous financial years with continuing effect in the last financial year ............................................................................................................................................................................................. 64 5.5 Observations of the Works Council ..................................................................................................................................... 64 6 SOCIAL, SOCIETAL AND ENVIRONMENTAL INFORMATION ............................................................................ 64 7 APPENDICES TO THE ANNUAL ACTIVITY REPORT .......................................................................................... 65 New AREVA Holding | Annual Activity Report – 2016 2/67 1 Situation and activities of the company and its subsidiaries As a preliminary comment, we hereby inform you that this management report from the New AREVA Holding company (“the company”) includes the management report of the group constituted by New AREVA Holding and the companies entering into its scope of consolidation (“the NEW AREVA group”, or “the group”). In its capacity as an issuer of securities1 admitted for trading on a regulated market, the company is subject to the provisions of the French Commercial Code applicable to limited liability companies organized under French law as well as to applicable stock market regulations, in particular Regulation (EU) no. 596/2014 of April 16, 2014 on market abuse (market abuse regulation), as well as certain provisions of the General Regulations of the Autorité des marchés financiers (AMF, the stock market regulator). The AREVA SA company controlled the company at December 31, 2016. 1.1 Overview 1.1.1 Change in operations The New AREVA group, refocused on the nuclear fuel cycle operations (including in particular the Mining, Front End and Back End operations), was created on November 10, 2016 in the framework of the implementation of the AREVA SA restructuring plan described in the “2016-2020 roadmap” presented to the market by the AREVA SA company on June 15, 2016. 1.1.2 Highlights of the period Restructuring of the AREVA group Change in management In 2016, the AREVA group underwent a transformation and since July 1, 2016 has been organized into two separate entities: AREVA NP (reactors and fuel operations) and the New AREVA group (fuel cycle operations). Since that date, the New AREVA group thus has an Executive Committee in charge of steering operations. As of this date, the composition of the committee is as follows: Name Title Philippe Knoche Chief Executive Officer of AREVA SA François Nogué Chief Executive Officer of New AREVA Holding and Senior Executive Vice President of Human Resources and Communications Stéphane Lhopiteau Chief Legal and Financial Officer Guillaume Dureau Senior Executive Vice President of Customers, Strategy, Innovation and R&D Éric Chassard Senior Executive Vice President of the AREVA Projects Business Unit and Director of Performance Jacques Peythieu Senior Executive Vice President of the Mining Business Unit Antoine Troesch Senior Executive Vice President of the Chemistry/Enrichment Business Unit Pascal Aubret Senior Executive Vice President of the Recycling BU Alain Vandercruyssen Senior Executive Vice President of the Dismantling