-1-
SUMMARY
INTERIM CONSOLIDATED PROFIT AND LOSS ACCOUNT ............................................................................................... 3
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME......................................................................... 4
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (1/2) ......................................................................... 5
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (2/2) ......................................................................... 6
INTERIM CONSOLIDATED BALANCE SHEET .................................................................................................................. 7
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS .............................................................................................. 8
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS............................................................................................ 9
1.ACCOUNTINGSTANDARDSFRAMEWORK............................................................................................................................. 9 a)Basis of preparation of the condensed interim consolidated financial statements .........................................................9 b)First-time adoption of the new consolidation standards ...............................................................................................10 c)New IFRS standards mandatorily applicable after 30 June 2014 ...................................................................................13
2.CHANGEINSCOPEOFCONSOLIDATION............................................................................................................................. 13 a)Main changes in scope of consolidation ........................................................................................................................13 b)Main changes in consolidation methods .......................................................................................................................13
3.SEGMENTINFORMATION.............................................................................................................................................. 14 a)Information by business segment ..................................................................................................................................14 b)Adjusted results..............................................................................................................................................................16 c)Sales (direct and indirect) by country / region of destination ........................................................................................17
4.DISPOSAL OF ASSETS,CHANGES IN SCOPE OF CONSOLIDATION AND OTHER ................................................................................17
5.GOODWILL................................................................................................................................................................ 18
6.TANGIBLE AND INTANGIBLE ASSETS..................................................................................................................................19
7.INVESTMENTSINJOINTLYCONTROLLEDCOMPANIES............................................................................................................ 19 a)Impact of equity accounting of jointly controlled companies at transition date ...........................................................19 b)Group's share in net equity and net income (loss) in jointly controlled companies .......................................................20 c)Change in investment in jointly controlled companies ...................................................................................................20 d)DCNS summarized financial information .......................................................................................................................20
8.INVESTMENTS IN ASSOCIATES .........................................................................................................................................21
9.OTHERFINANCIALINCOME(EXPENSE) .............................................................................................................................. 21
10.NETCASH(NETDEBT)................................................................................................................................................. 22 a)Net cash (net debt) at closing ........................................................................................................................................22 b)Change in net cash (net debt) ........................................................................................................................................22
11.STATEMENTOFCASHFLOWS........................................................................................................................................ 23 a)Changes in working capital requirements......................................................................................................................23 b)Reserves for contingencies (excluding construction contracts) .....................................................................................23 c)Net financial investment ................................................................................................................................................24
12.INCOMETAX............................................................................................................................................................ 24
13.SHAREHOLDERS' EQUITY............................................................................................................................................. 25 a)Share capital ..................................................................................................................................................................25 b)Treasury shares ..............................................................................................................................................................25 c)Earnings per share..........................................................................................................................................................26 d)Dividends........................................................................................................................................................................26 e)Non-controlling interests ...............................................................................................................................................26
14.PENSIONSANDOTHEREMPLOYEEBENEFITS..................................................................................................................... 27 a)Actuarial assumptions ...................................................................................................................................................27 b)Changes in provision for pensions and other employee benefits ...................................................................................27
15.SUMMARY OF FINANCIAL ASSETS AND LIABILITIES..............................................................................................................28
a)Financial assets ..............................................................................................................................................................28 b)Financial liabilities..........................................................................................................................................................29
16.LITIGATION.............................................................................................................................................................. 29
17.RELATED PARTY TRANSACTIONS ....................................................................................................................................29
18.EVENTS AFTER REPORTING PERIOD ................................................................................................................................29
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INTERIM CONSOLIDATED PROFIT AND LOSS ACCOUNT
(€ Million)
Sales note 3 Cost of sales Research and development expenses Marketing and selling expenses General and administrative expenses Restructuring costs Amortisation of intangible assets acquired (PPA) ** | 5,694.7 (4,276.6) (285.9) (455.9) (255.8) (52.5) (26.8) | 5,731.5 12,697.6 (4,394.2) (9,685.3) (271.5) (612.2) (444.1) (894.0) (262.5) (506.2) (53.6) (121.6) (30.3) (61.8) |
Income from operations note 3 | 341.2 | 275.3 816.5 |
Disposal of assets, change in scope of consolidation and other note 4 Impairment of non-current operating assets note 5 | 224.6 -- | 10.0 16.1 -- (3.0) |
Income from operating activities before impact of equity affiliates | 565.8 | 285.3 829.6 |
Share in net income (loss) of equity affiliates of which, share in net income of jointly controlled companies note 7 of which, share in net income of associates note 8 | 41.0 18.8 22.2 | 48.6 106.0 32.6 79.8 16.0 26.2 |
Income from operating activities after impact of equity affiliates | 606.8 | 333.9 935.6 |
Financial interests on gross debt Financial income from cash at bank and equivalents Financial interests, net Other financial income (expense) note 9 Finance costs on pensions and other employee benefits note 14 Income tax note 12 | (10.9) 10.0 | (15.3) (26.6) 8.9 17.7 |
Financial interests on gross debt Financial income from cash at bank and equivalents Financial interests, net Other financial income (expense) note 9 Finance costs on pensions and other employee benefits note 14 Income tax note 12 | (0.9) (15.0) (43.4) (79.1) | (6.4) (8.9) (16.1) (45.1) (39.5) (69.5) (67.1) (203.5) |
Net income (loss) | 468.4 | 204.8 608.6 |
Attributable to: | ||
Shareholders of the parent company Non-controlling interests | 446.6 21.8 | 189.5 573.4 15.3 35.2 |
Basic earnings per share (in euros) note 13 Diluted earnings per share (in euros) note 13 | 2.19 2.17 | 0.95 2.85 0.95 2.84 |
* New consolidation standards, mentioned in note 1-b, prescribe a retrospective application. Consequently, the financial statements presented for comparative periods have been restated accordingly.
In this context, and given that joint ventures and associates are an integral part of the Group's businesses, share in net income (loss) of equity affiliates is now presented within "income from operating activities after share in net income (loss) of equity affiliates", according to recommendation 2013-01 of the French Authority of Accounting Standards.
** This line corresponds to the amortisation of PPA related to fully-consolidated entites. Amortisation of PPA related to equity affiliates is included in the share in net income (loss) of equity affiliates, as detailled in note 3-b.
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INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
First half 2014
Total attributable to: First half 2013 * Total attributable to: Full year 2013 * Total attributable to:Shareholders
Non-
Shareholders
Non-
Shareholders
Non-
(€ Million)
of the parent
controlling
Totalof the parent
controlling
Totalof the parent controlling
Totalcom pany
interes ts
com pany
interes ts
com pany
interes ts
Net income (loss) for the period | 446.6 21.8 468.4 | |
Cum ulative trans lation adjus tm ent Deferred tax Net Cas h flow hedge Deferred tax Net Financial as s ets available for s ale Items to be subsequently reclassified to P&L Of which, part related to equity affiliates Actuarial gains (los s es ) on pens ions : s ubs idiaries (note 14) Actuarial gains (los s es ) on pens ions : equity affiliates Deferred tax Items that will not be reclassified to P&L | 40.8 0.1 40.9 (0.5) -- (0.5) | |
Cum ulative trans lation adjus tm ent Deferred tax Net Cas h flow hedge Deferred tax Net Financial as s ets available for s ale Items to be subsequently reclassified to P&L Of which, part related to equity affiliates Actuarial gains (los s es ) on pens ions : s ubs idiaries (note 14) Actuarial gains (los s es ) on pens ions : equity affiliates Deferred tax Items that will not be reclassified to P&L | 40.3 0.1 40.4 (52.7) (3.8) (56.5) 19.0 -- 19.0 | |
Cum ulative trans lation adjus tm ent Deferred tax Net Cas h flow hedge Deferred tax Net Financial as s ets available for s ale Items to be subsequently reclassified to P&L Of which, part related to equity affiliates Actuarial gains (los s es ) on pens ions : s ubs idiaries (note 14) Actuarial gains (los s es ) on pens ions : equity affiliates Deferred tax Items that will not be reclassified to P&L | (33.7) (3.8) (37.5) 0.4 -- 0.4 | |
Cum ulative trans lation adjus tm ent Deferred tax Net Cas h flow hedge Deferred tax Net Financial as s ets available for s ale Items to be subsequently reclassified to P&L Of which, part related to equity affiliates Actuarial gains (los s es ) on pens ions : s ubs idiaries (note 14) Actuarial gains (los s es ) on pens ions : equity affiliates Deferred tax Items that will not be reclassified to P&L | 7.0 (3.7) 3.3 | |
Cum ulative trans lation adjus tm ent Deferred tax Net Cas h flow hedge Deferred tax Net Financial as s ets available for s ale Items to be subsequently reclassified to P&L Of which, part related to equity affiliates Actuarial gains (los s es ) on pens ions : s ubs idiaries (note 14) Actuarial gains (los s es ) on pens ions : equity affiliates Deferred tax Items that will not be reclassified to P&L | 8.8 -- 8.8 | |
Cum ulative trans lation adjus tm ent Deferred tax Net Cas h flow hedge Deferred tax Net Financial as s ets available for s ale Items to be subsequently reclassified to P&L Of which, part related to equity affiliates Actuarial gains (los s es ) on pens ions : s ubs idiaries (note 14) Actuarial gains (los s es ) on pens ions : equity affiliates Deferred tax Items that will not be reclassified to P&L | (158.3) (1.4) (159.7) | |
Cum ulative trans lation adjus tm ent Deferred tax Net Cas h flow hedge Deferred tax Net Financial as s ets available for s ale Items to be subsequently reclassified to P&L Of which, part related to equity affiliates Actuarial gains (los s es ) on pens ions : s ubs idiaries (note 14) Actuarial gains (los s es ) on pens ions : equity affiliates Deferred tax Items that will not be reclassified to P&L | (0.2) -- (0.2) | |
Cum ulative trans lation adjus tm ent Deferred tax Net Cas h flow hedge Deferred tax Net Financial as s ets available for s ale Items to be subsequently reclassified to P&L Of which, part related to equity affiliates Actuarial gains (los s es ) on pens ions : s ubs idiaries (note 14) Actuarial gains (los s es ) on pens ions : equity affiliates Deferred tax Items that will not be reclassified to P&L | 41.2 0.4 41.6 | |
Cum ulative trans lation adjus tm ent Deferred tax Net Cas h flow hedge Deferred tax Net Financial as s ets available for s ale Items to be subsequently reclassified to P&L Of which, part related to equity affiliates Actuarial gains (los s es ) on pens ions : s ubs idiaries (note 14) Actuarial gains (los s es ) on pens ions : equity affiliates Deferred tax Items that will not be reclassified to P&L | (117.3) (1.0) (118.3) | |
Other comprehensive income (loss) for the period, net of tax | (110.3) (4.7) (115.0) | |
Total comprehensive income (loss) for the period | 336.3 17.1 353.4 |
* New consolidation standards, mentioned in note 1-b, prescribe a retrospective application. Consequently, the financial statements presented for comparative periods have been restated accordingly.
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INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (1/2)
(€ Million)
Number of shares outstanding (thousands)
Share capital
Paid-in surplus
Retained earnings
Cash flow hedge
AFS invest ments
Cumulative translation adjustment
Treasury shares
Total attrib. to shareholders of the parent
company
Non controlling interests
Total
At 31 December 2013 published 203,254 617.2 3,826.6 (267.6) 56.6 1.5 (241.9) (81.4) 3,911.0 29.9 | 3,940.9 | |
New consolidation standards impact -- -- -- (64.1) -- -- -- -- (64.1) 208.3 | 144.2 | |
At 1 January 2014 restated * 203,254 617.2 3,826.6 (331.7) 56.6 1.5 (241.9) (81.4) 3,846.9 238.2 | 4,085.1 | |
Net income (loss) of the period Other comprehensive income (loss) Total comprehensive income (loss) for first half 2014 Employee share issues Parent company dividend distribution Third party share in dividend distributions of subsidiaries Share-based payments Acquisitions/disposals of treasury shares Other Changes in scope of consolidation | -- -- -- 446.6 -- -- -- -- 446.6 21.8 -- -- -- (117.3) (33.7) 0.4 40.3 -- (110.3) (4.7) | 468.4 (115.0) |
Net income (loss) of the period Other comprehensive income (loss) Total comprehensive income (loss) for first half 2014 Employee share issues Parent company dividend distribution Third party share in dividend distributions of subsidiaries Share-based payments Acquisitions/disposals of treasury shares Other Changes in scope of consolidation | -- -- -- 329.3 (33.7) 0.4 40.3 -- 336.3 17.1 1,857 5.6 56.4 -- -- -- -- -- 62.0 -- -- -- -- (172.8) -- -- -- -- (172.8) -- -- -- -- -- -- -- -- -- -- (130.9) -- -- -- 7.7 -- -- -- -- 7.7 -- (115) -- -- 0.2 -- -- -- (5.2) (5.0) -- -- -- -- (7.5) -- -- -- -- (7.5) 0.7 -- -- -- 4.1 -- -- -- -- 4.1 49.1 | 353.4 62.0 (172.8) (130.9) 7.7 (5.0) (6.8) 53.2 |
At 30 June 2014 204,996 622.8 3,883.0 (170.7) 22.9 1.9 (201.6) (86.6) 4,071.7 174.2 | 4,245.9 |
(€ Million)
Number of shares outstanding (thousands)
Share capital
Paid-in surplus
Retained earnings
Cash flow hedge
AFS invest ments
Cumulative translation adjustment
Treasury shares
Total attrib. to shareholders of the parent
company
Non controlling interests
Total
At 1 January 2013 published 199,544 607.0 3,731.6 (623.7) 18.7 1.6 (106.2) (87.9) 3,541.1 10.4 | 3,551.5 | |
New consolidation standards impact -- -- -- (64.1) -- -- -- -- (64.1) 219.1 | 155.0 | |
At 1 January 2013 restated * 199,544 607.0 3,731.6 (687.8) 18.7 1.6 (106.2) (87.9) 3,477.0 229.5 | 3,706.5 | |
Net income (loss) of the period Other comprehensive income (loss) Total comprehensive income (loss) for first half 2013 restated* Employee share issue Parent company dividend distribution Third party share in dividend distributions of subsidiaries Share-based payments Acquisitions / disposals of treasury shares Other Changes in scope of consolidation | -- -- -- 189.5 -- -- -- -- 189.5 15.3 -- -- -- 66.5 (13.9) 0.4 (56.1) -- (3.1) (8.0) | 204.8 (11.1) |
Net income (loss) of the period Other comprehensive income (loss) Total comprehensive income (loss) for first half 2013 restated* Employee share issue Parent company dividend distribution Third party share in dividend distributions of subsidiaries Share-based payments Acquisitions / disposals of treasury shares Other Changes in scope of consolidation | -- -- -- 256.0 (13.9) 0.4 (56.1) -- 186.4 7.3 1,420 4.3 34.5 -- -- -- -- -- 38.8 -- -- -- -- (125.8) -- -- -- -- (125.8) -- -- -- -- -- -- -- -- -- -- (31.9) -- -- -- 7.4 -- -- -- -- 7.4 -- 329 -- -- (28.8) -- -- -- 11.6 (17.2) -- -- -- -- 3.2 -- -- -- -- 3.2 -- -- -- 1.3 -- -- -- -- 1.3 3.8 | 193.7 38.8 (125.8) (31.9) 7.4 (17.2) 3.2 5.1 |
At 30 June 2013 restated * 201,293 611.3 3,766.1 (574.5) 4.8 2.0 (162.3) (76.3) 3,571.1 208.7 | 3,779.8 |
* New consolidation standards, mentioned in note 1-b, prescribe a retrospective application. Consequently, the financial statements presented for comparative periods have been restated accordingly
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INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (2/2)
(€ Million)
Number of shares outstanding (thousands)
Share capital
Paid-in surplus
Retained earnings
Cash flow hedge
AFS invest ments
Cumulative translation adjustment
Treasury shares
Total attrib. to shareholders of the parent
company
Non controlling interests
Total
At 1 January 2013 published 199,544 607.0 3,731.6 (623.7) 18.7 1.6 (106.2) (87.9) 3,541.1 10.4 | 3,551.5 | |
New consolidation standards impact -- -- -- (64.1) -- -- -- -- (64.1) 219.1 | 155.0 | |
At 1 January 2013 restated * 199,544 607.0 3,731.6 (687.8) 18.7 1.6 (106.2) (87.9) 3,477.0 229.5 | 3,706.5 | |
Net income (loss) for the period Other comprehensive income (loss) Total comprehensive income (loss) for 2013 restated* Employee share issues Parent company dividend distribution Third party share in dividend distributions of subsidiaries Share-based payments Acquisitions / disposals of treasury shares Other Changes in scope of consolidation | -- -- -- 573.4 -- -- -- -- 573.4 35.2 -- -- -- (43.3) 37.9 (0.1) (135.7) -- (141.2) 1.5 | 608.6 (139.7) |
Net income (loss) for the period Other comprehensive income (loss) Total comprehensive income (loss) for 2013 restated* Employee share issues Parent company dividend distribution Third party share in dividend distributions of subsidiaries Share-based payments Acquisitions / disposals of treasury shares Other Changes in scope of consolidation | -- -- -- 530.1 37.9 (0.1) (135.7) -- 432.2 36.7 3,405 10.2 95.0 -- -- -- -- -- 105.2 -- -- -- -- (180.7) -- -- -- -- (180.7) -- -- -- -- -- -- -- -- -- -- (31.9) -- -- -- 14.7 -- -- -- -- 14.7 -- 305 -- -- (10.4) -- -- -- 6.5 (3.9) -- -- -- -- 4.0 -- -- -- -- 4.0 (0.2) -- -- -- (1.6) -- -- -- -- (1.6) 4.1 | 468.9 105.2 (180.7) (31.9) 14.7 (3.9) 3.8 2.5 |
At 31 December 2013 restated * 203,254 617.2 3,826.6 (331.7) 56.6 1.5 (241.9) (81.4) 3,846.9 238.2 | 4,085.1 |
* New consolidation standards, mentioned in note 1-b, prescribe a retrospective application. Consequently, the financial statements presented for comparative periods have been restated accordingly
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INTERIM CONSOLIDATED BALANCE SHEET
(€ Million)
ASSETS Notes 30/06/14 31/12/13 * 01/01/13 *Goodwill, net note 5 Other intangible assets, net note 6 Tangible assets, net note 6 Total non-current operating assets Investment in jointly controlled companies note 7 Investment in associates note 8 Non-consolidated investments Other non-current financial assets Total non-current financial assets Non-current derivatives - assets note10 Deferred tax assets | 3,369.4 501.9 1,459.1 | 2,923.6 2,913.7 527.8 564.2 1,322.3 1,273.8 |
Goodwill, net note 5 Other intangible assets, net note 6 Tangible assets, net note 6 Total non-current operating assets Investment in jointly controlled companies note 7 Investment in associates note 8 Non-consolidated investments Other non-current financial assets Total non-current financial assets Non-current derivatives - assets note10 Deferred tax assets | 5,330.4 1,224.9 360.2 61.7 152.6 | 4,773.7 4,751.7 1,411.4 1,439.5 246.8 203.0 65.0 191.5 153.0 132.3 |
Goodwill, net note 5 Other intangible assets, net note 6 Tangible assets, net note 6 Total non-current operating assets Investment in jointly controlled companies note 7 Investment in associates note 8 Non-consolidated investments Other non-current financial assets Total non-current financial assets Non-current derivatives - assets note10 Deferred tax assets | 1,799.4 35.8 841.2 | 1,876.2 1,966.3 16.6 23.5 803.6 993.3 |
Non-current assets | 8,006.8 | 7,470.1 7,734.8 |
Inventories and work in progress Construction contracts: assets Advances to suppliers Accounts, notes and other current receivables Current derivatives - assets Total current operating assets note 11 Current tax receivables Current financial assets Cash at bank and equivalents Total current financial assets note 10 | 2,420.4 2,258.2 267.1 3,984.6 139.6 | 2,124.1 2,111.2 1,995.2 2,029.5 285.2 231.0 3,810.0 3,888.1 176.5 119.1 |
Inventories and work in progress Construction contracts: assets Advances to suppliers Accounts, notes and other current receivables Current derivatives - assets Total current operating assets note 11 Current tax receivables Current financial assets Cash at bank and equivalents Total current financial assets note 10 | 9,069.9 | 8,391.0 8,378.9 |
Inventories and work in progress Construction contracts: assets Advances to suppliers Accounts, notes and other current receivables Current derivatives - assets Total current operating assets note 11 Current tax receivables Current financial assets Cash at bank and equivalents Total current financial assets note 10 | 45.3 70.3 1,553.5 | 31.9 35.1 196.9 271.8 2,563.7 2,127.3 |
Inventories and work in progress Construction contracts: assets Advances to suppliers Accounts, notes and other current receivables Current derivatives - assets Total current operating assets note 11 Current tax receivables Current financial assets Cash at bank and equivalents Total current financial assets note 10 | 1,623.8 | 2,760.6 2,399.1 |
Current assets | 10,739.0 | 11,183.5 10,813.1 |
TOTAL ASSETS | 18,745.8 | 18,653.6 18,547.9 |
Capital, paid-in surplus and other reserves Cumulative translation adjustment Treasury shares Total attributable to shareholders of the parent company Non-controlling interests | 4,359.9 (201.6) (86.6) | 4,170.2 3,671.1 (241.9) (106.2) (81.4) (87.9) |
Capital, paid-in surplus and other reserves Cumulative translation adjustment Treasury shares Total attributable to shareholders of the parent company Non-controlling interests | 4,071.7 174.2 | 3,846.9 3,477.0 238.2 229.5 |
Total equity note 13 | 4,245.9 | 4,085.1 3,706.5 |
Financial debt: long-term note 10 Non-current derivatives - liabilities note 10 Provisions for pensions and other employee benefits note 14 Deferred tax liabilities | 1,459.8 -- 2,066.6 141.9 | 1,451.6 712.2 2.6 -- 1,857.9 1,883.4 149.1 183.4 |
Non-current liabilities | 3,668.3 | 3,461.2 2,779.0 |
Advances received from customers on contracts Refundable grants Construction contracts: liabilities Reserves for contingencies Accounts, notes and other current payables Current derivatives - liabilities Total current operating liabilities note 11 Current tax payables Financial debt: short-term note 10 | 3,721.0 135.4 974.2 1,047.5 4,685.1 63.6 | 3,739.3 3,741.2 143.0 148.1 1,073.9 1,267.9 1,026.1 1,156.2 4,746.9 4,836.6 72.9 92.5 |
Advances received from customers on contracts Refundable grants Construction contracts: liabilities Reserves for contingencies Accounts, notes and other current payables Current derivatives - liabilities Total current operating liabilities note 11 Current tax payables Financial debt: short-term note 10 | 10,626.8 57.8 147.0 | 10,802.1 11,242.5 59.5 39.4 245.7 780.5 |
Current liabilities | 10,831.6 | 11,107.3 12,062.4 |
TOTAL EQUITY AND LIABILITIES | 18,745.8 | 18,653.6 18,547.9 |
* New consolidation standards, mentioned in note 1-b, prescribe a retrospective application. Consequently, the financial statements presented for comparative periods have been restated accordingly
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INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
First First half half
Full year (€ Million) Notes 2014 2013 * 2013 *Net income (loss) Add (deduct) Incom e tax expens e (gain) Financial interes ts , net expens e Share in net (incom e) los s of equity affiliates Dividends received from equity-accounted, jointly controlled entities note 7 Dividends received from equity-accounted, as s ociates note 8 Depreciation and am ortis ation of tangible and intangible as s ets note 6 Provis ions for pens ions and other em ployee benefits note 14 Im pairm ent of non-current operating as s ets Los s (gain) on dis pos als of as s ets and other Net allowances to res tructuring provis ions Other item s Operating cash flows before working capital changes, interests and tax Change in working capital requirem ents and in res erves for contingencies note 11 Paym ent of contributions / pens ions benefits (defined benefit plans ): - related to reduction of the UK deficit: - related to future service (recurrent contrib utions): Financial interes ts paid Financial interes ts received Incom e tax paid | 468.4 79.1 0.9 (41.0) 29.0 6.1 183.1 88.1 -- (224.6) 4.3 7.5 | 204.8 608.6 67.1 203.5 6.4 8.9 (48.6) (106.0) 47.7 95.8 3.5 16.9 167.3 366.9 85.4 154.5 -- 3.0 (10.0) (16.1) (9.1) (39.2) 14.5 32.9 |
Net income (loss) Add (deduct) Incom e tax expens e (gain) Financial interes ts , net expens e Share in net (incom e) los s of equity affiliates Dividends received from equity-accounted, jointly controlled entities note 7 Dividends received from equity-accounted, as s ociates note 8 Depreciation and am ortis ation of tangible and intangible as s ets note 6 Provis ions for pens ions and other em ployee benefits note 14 Im pairm ent of non-current operating as s ets Los s (gain) on dis pos als of as s ets and other Net allowances to res tructuring provis ions Other item s Operating cash flows before working capital changes, interests and tax Change in working capital requirem ents and in res erves for contingencies note 11 Paym ent of contributions / pens ions benefits (defined benefit plans ): - related to reduction of the UK deficit: - related to future service (recurrent contrib utions): Financial interes ts paid Financial interes ts received Incom e tax paid | 600.9 (843.3) (90.0) (33.7) (56.3) (14.5) 10.2 (43.8) | 529.0 1,329.7 (671.3) (300.7) (90.5) (187.4) (31.1) (64.3) (59.4) (123.1) (32.6) (47.5) 8.4 16.3 (18.4) (39.8) |
Net cash flows from operating activities - I - | (380.5) | (275.4) 770.6 |
Capital expenditure on tangible and intangible as s ets Proceeds from dis pos al of tangible and intangible as s ets Net operating investment note 6 Acquis itions of s ubs idiaries , net note 11 Dis pos als of s ubs idiaries , net note 11 Decreas e (increas e) in non current financial as s ets Decreas e (increas e) in current financial as s ets Net financial investment | (162.2) (383.9) 19.3 25.7 | |
Capital expenditure on tangible and intangible as s ets Proceeds from dis pos al of tangible and intangible as s ets Net operating investment note 6 Acquis itions of s ubs idiaries , net note 11 Dis pos als of s ubs idiaries , net note 11 Decreas e (increas e) in non current financial as s ets Decreas e (increas e) in current financial as s ets Net financial investment | (202.8) 14.4 | (162.2) (383.9) 19.3 25.7 |
Capital expenditure on tangible and intangible as s ets Proceeds from dis pos al of tangible and intangible as s ets Net operating investment note 6 Acquis itions of s ubs idiaries , net note 11 Dis pos als of s ubs idiaries , net note 11 Decreas e (increas e) in non current financial as s ets Decreas e (increas e) in current financial as s ets Net financial investment | (188.4) | (142.9) (358.2) (24.5) (44.0) -- 8.9 (17.1) (14.3) 48.8 81.1 |
Capital expenditure on tangible and intangible as s ets Proceeds from dis pos al of tangible and intangible as s ets Net operating investment note 6 Acquis itions of s ubs idiaries , net note 11 Dis pos als of s ubs idiaries , net note 11 Decreas e (increas e) in non current financial as s ets Decreas e (increas e) in current financial as s ets Net financial investment | (306.5) 0.8 8.2 133.2 | (142.9) (358.2) (24.5) (44.0) -- 8.9 (17.1) (14.3) 48.8 81.1 |
Capital expenditure on tangible and intangible as s ets Proceeds from dis pos al of tangible and intangible as s ets Net operating investment note 6 Acquis itions of s ubs idiaries , net note 11 Dis pos als of s ubs idiaries , net note 11 Decreas e (increas e) in non current financial as s ets Decreas e (increas e) in current financial as s ets Net financial investment | (164.3) | 7.2 31.7 |
Capital expenditure on tangible and intangible as s ets Proceeds from dis pos al of tangible and intangible as s ets Net operating investment note 6 Acquis itions of s ubs idiaries , net note 11 Dis pos als of s ubs idiaries , net note 11 Decreas e (increas e) in non current financial as s ets Decreas e (increas e) in current financial as s ets Net financial investment | 7.2 31.7 | |
Net cash flows from investing activities - II - | (352.7) | (135.7) (326.5) |
Parent com pany dividend dis tribution note 13 Third party s hare in dividend dis tributions of s ubs idiaries Increas e in equity (exercis e of s ubs cription options ) Purchas e / s ale of treas ury s hares Increas e in financial debt Repaym ent of financial debt | (172.8) (110.7) 51.2 (4.9) 29.4 (78.6) | (125.8) (180.7) (31.9) (31.9) 27.5 97.3 0.8 (6.8) 831.3 840.3 (710.2) (699.3) |
Net cash flows from financing activities - III - | (286.4) | (8.3) 18.9 |
Effect of exchange rate variations and other - IV - | 9.4 | (16.6) (26.6) |
Total increase (decrease) in cash at bank and equivalents) I+II+III+IV | (1,010.2) | (436.0) 436.4 |
Cas h at bank and equivalents at beginning of period Cash at bank and equivalent at end of period | 2,563.7 1,553.5 | 2,127.3 2,127.3 1,691.3 2,563.7 |
* New consolidation standards, mentioned in note 1-b, prescribe a retrospective application. Consequently, the financial statements presented for comparative periods have been restated accordingly
The Group net cash position and its change on both periods are presented in note 10.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
All monetary amounts included in these notes are expressed in € million, except for per share data.
1. ACCOUNTING STANDARDS FRAMEWORK
On 24 July 2014, the Board of Directors approved and authorised for issue Thales' condensed interim consolidated financial statements for the six months ended 30 June 2014.
Thales Parent Company is a listed French société anonyme, registered with the Nanterre commercial registrary (Registre du Commerce et des Sociétés de Nanterre) under the number 552 059 024.
The condensed interim consolidated financial statements for the six months ended 30 June 2014 have been prepared in accordance with IAS 34 "Interim financial reporting" and with IFRS standards as approved by the European Union at 30 June 20141.
The interim condensed consolidated financial statements are prepared using the same accounting policies as those used to prepare the full-year financial statements at 31 December 2013 (see notes 1 and 23 of the financial consolidated statements in the 2013 registration document), with the exception of the first time adoption of the new consolidation standards presented in note 1-b.
The specific provisions relating to the preparation of interim financial statements are described hereafter.
▪ Measurement procedures used for the interim condensed consolidated financial statements
Pensions and other employee benefits
Pension costs for interim periods are calculated on the basis of the actuarial valuations performed at the end of the prior year. If necessary, these valuations are adjusted to take into account curtailments, settlements or other major non-recurring events during the period. Furthermore, amounts recognised in the balance sheet in respect of defined benefit plans are adjusted, if necessary, in order to reflect material changes impacting the yield on investment-grade corporate bonds in the geographic area concerned (the benchmark used to determine the discount rate) and the actual return on plan assets.
Income taxes
Current and deferred income tax expense for interim periods is calculated at the level of each tax entity by applying the average estimated annual effective tax rate for the current year to income for the period. When required, this amount is adjusted to take into account the tax effects of specific events of the period.
Goodwill
Impairment tests are performed for each annual closing using the methodology described in paragraph
23-i of the 2013 registration document, and whenever there is an indication of impairment. Impairment that may be recognised in the first half of the year is not reversible.
▪ Seasonality of business
In accordance with accounting policies, revenues are recognised, as at year end, over the period of their realisation.
In previous years the level of business has been higher in the last quarter, and particularly in December. The seasonality of business has led to revenues and income from operations being generally lower in the first half of the year. The company has noted that this phenomenon is of a recurring nature, even if its extent varies from year to year.
1 Available at the following internet address : http://ec.europa.eu/internal_market/accounting/ias_en.htm.
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The main closing and average exchange rates for the periods used are the following:
30 June 2014 | 30 June 2013 | 31 December 2013 | ||||
Euros | Closing | Average | Closing | Average | Closing | Average |
Australian Dollar Pound Sterling Dollar U.S. | 1.4537 0.8015 1.3658 | 1.4998 0.8189 1.3705 | 1.4171 0.8572 1.3080 | 1.3081 0.8535 1.3107 | 1.5423 0.8337 1.3791 | 1.3936 0.8501 1.3308 |
The following new standards have been published by the IASB and applied by the Group as from 1
January 2014, according to European Union specific provisions. Consolidated Financial Statements (IFRS 10)
This new standard replaces IAS 27 and SIC 12 (Consolidation - Special Purpose Entities).
IFRS 10 introduces a new single control model defined as follows: "An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee". Previously, control was based on the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
In this framework, the Group has undertaken an analysis of its not fully owned investments to determine the level of control exercised over them and to confirm their method of consolidation.
In particular, this led to review, according to IFRS 10 criteria, the consolidation method of Space activities that were, up to now, consolidated under the proportionate method. It was concluded that these activities should be consolidated as follows:
- Thales Alenia Space, sub-group owned at 67 %, under the full consolidation method ;
- Telespazio, owned at 33%, under the equity method.
These changes have been implemented in the Group consolidated accounts published as from 1 January
2014.
Joint Arrangements (IFRS 11)
IFRS 11 replaces IAS 31 "Interests in Joint Ventures" and SIC 13 "Jointly Controlled Entities - Non
Monetary Contributions by Venturers".
This standard defines the accounting treatment of joint arrangements through which at least two parties exercise joint control. Pursuant to this new standard, there are only two types of joint arrangement: joint ventures and joint operations.
The classification is based on the rights and obligations of the parties to the arrangement, taking into consideration the structure and legal form of the arrangement, the terms agreed by the parties in the contractual arrangement and, when relevant, other facts and circumstances.
- A joint operation is a joint arrangement whereby the parties have rights to the assets and obligations for the liabilities, relating to the arrangement. The Group did not identify a joint operation in its perimeter;
- A joint venture is a joint arrangement whereby the parties (joint venturers) that have joint control of the arrangement have rights to the net assets of the arrangement. Pursuant to IAS 31, the Group accounted for its joint arrangements, all classified as joint ventures, using the proportionate consolidation method. In accordance with IFRS 11, joint arrangements classified as joint ventures must be accounted for under the equity method (proportionate consolidation is no longer allowed).
Consequently, the Group now accounts all arrangements under a join control using the equity method. Disclosure of Interests in Other Entities (IFRS 12)
IFRS 12 includes into a single standard the disclosures relating to entity's interests in subsidiaries, joint
arrangements, associates and unconsolidated structured entities. This standard will be implemented for the first time during the preparation of the 2014 annual consolidated financial statements and will lead to additionnal disclosures in the Notes to the Financial Statements. At 30 June 2014, some of the
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information required by the standard are provided in the notes to enable a proper understanding of the interim financial statements (note 7).
• Impact of changes in consolidation methods on the 2013 financial statements
The financial statements presented for comparative periods have been restated with the following impacts:
Consolidated Balance Sheet at 1 January 2013
Of which: DCNS im pact
(1,076.3)
838.2 (6.8) (147.2)
(1,359.1) (577.1)
(2,328.3)
(37.0)
-- (49.4) (203.2) (2,016.5)
(22.2)
(2,328.3)
(619.0)
Consolidated Balance Sheet at
31 December 2013
Of which: DCNS im pact
(1,107.6)
829.8 (5.4) (292.4)
(1,477.8) (350.9)
(2,404.3)
(37.0) (14.6) (25.3) (200.1) (2,099.2) (28.1)
(2,404.3)
(555.2)
* The € -64.1 million are explained by:
- In the context of a joint application of IFRS 11 and IAS 28 requirements, the Group has chosen to restate the transactions that led to take over / lose joint control. The restatement (€ -41.0 million) essentially comes from the cancellation of the revaluation of shares previously held at the date of the additional 10% DCNS acquisition (end of 2011).
- Moreover, in the context of the reallocation of goodwill to joint ventures, the Group carried out impairment tests which led to a depreciation of € -23.1 million (note 5).
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