Hello, it is me again :) I have 2 questions need be answered regarding to pdf file named HCS 2 AREVA in the attachment. Questions are in the word file.. for 2 anwers words should be up 1000 words.

9-109-092 REV: JUNE 2, 2009 V.G. NARAYANAN LISA BREM AREVA We thought there was a future in nuclear power when no one else believed in it. Anne Lauvergeon, CEO, AREVA1 Nuclear power, long dormant as a viable power source, was poised for a comeback. By 2008, the nuclear accidents in the United States and Russia were fading from memory and petroleum prices reached all time highs; countries struggled with how to implement the Kyoto Protocol's push to reduce CO2 emissions while lessening dependence on foreign energy sources. This confluence of events caused many electric utilities and governments around the world to reevaluate nuclear energy, while turning to France as an example of the benefits of nuclear power. France had invested heavily in building its nuclear infrastructure; the country's 59 nuclear plants, which for three decades had hummed along without major incident,2 generated 76% of France's electric power in 2008.3 AREVA, born in 1981 through the merger of French nuclear energy industry companies COGEMA and Framatome, was the star of France's nuclear success story. By 2008, AREVA led the world in civilian nuclear power market share.4 Its European Pressurized Water Reactor (EPR) was the first \"advanced Generation III+ power plant under construction in the world\"5 and the first new nuclear plant to begin construction in a Western country in 10 years.6 The EPR was under construction in Finland (OL3) and Flamanville, France. In addition, AREVA had recently contracted to build two EPRs in China's Guangdong Province. AREVA was negotiating aggressively to sell new plants in Europe, the United Kingdom, the United States, the Middle East, South Africa, China, and India. The fall of 2008, however, presented some possible setbacks to the resurgence of nuclear power. The credit crisis and accompanying recession reversed the increase in petroleum prices and the worldwide demand for energy. In addition, governments and utilities had less ability to issue bonds for large infrastructure projects, while budget shortfalls made such projects uncertain in the near term. Although factoring in CO2 emission costs for coal plants could make nuclear more affordable by 1 As quoted in: \"Business: Power struggle; Nuclear energy,\" The Economist, December 6, 2008, p. 81, via ProQuest, ABI/Inform, www.proquest.com, accessed April 2009. 2 Matt Mabe, \"Will French Leaks Harm Nuclear's Revival?\" Business Week (Online), July 29, 2008, via ProQuest, ABI/Inform, www.proquest.com, accessed April 2009. 3 AREVA, 2008 Reference Document, p. 60, http://www.AREVA.com/servlet/finance/financelibrary-en.html, accessed May 2009. 4 Ibid., p. 72. 5 Ibid., p. 111. 6 Ibid., p. 110. ________________________________________________________________________________________________________________ Professor V.G. Narayanan and Research Associate Lisa Brem prepared this case. This case was developed from published sources. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright 2009 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to www.hbsp.harvard.edu/educators. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School. 109-092 AREVA comparison, nuclear plant construction continued to be considered by some to be more expensive than coal or gas-powered plants.7 Financial Results AREVA's 2008 consolidated financial results reflected its positive position in the industry; the company's 2008 backlog was 48.2 billion, up 21% from 39.8 billion in 2007, while revenues were up 10.4% to 13.2 billion, compared with 11.9 billion in 2007.8 Since 80% of its nuclear business was recurring and based on long term contracts, most division revenues in 2008 were not drastically impacted by the economic crisis, according to CEO Anne Lauvergeon. Lauvergeon explained that the company's vertically integrated business model was a competitive advantage, allowing it to meet a wide array of customer needs.9 See Exhibits 1 through 4 for consolidated financial results. AREVA had four major divisions, which contributed to the group's financial performance: Front End, Reactors and Services, Back End, and Transmission & Distribution (T&D) (see Exhibits 5 through 7 for selected financial results by division). The following are highlights from the company's 2008 financial results: Backlog: Leading contributors were the Front End (up 27.6% to 26.9 billion), the Back End (up 25.5% to 7.8 billion), and T&D (up 16.5% to 5.7 billion).10 The Front End division's growth was due to several \"major, multiyear contracts\" with EDF,11 and U.S. and Japanese utilities. The Back End signed contracts with EDF, the U.S. Department of Energy, and the NDA12 of Great Britain. T&D's growth was due to recurrent business and new contracts, such as 130 million with Dubai Electricity, 100 million with UTE in Uruguay, and a 60 million offshore wind farm in the United Kingdom.13 See Exhibit 8 for backlog by division. Revenue: Growth was led by the T&D division, which rose 17% from 4.3 billion to 5 billion in 2008. Strong sales growth in the Products, Systems, and Automation business units contributed to the increase in revenue. The Front End grew 7.1%, from 3.1 billion to 3.4 billion, due largely to rising average sale prices on long term uranium contracts, strong exports of enrichment services to Asia and rising enrichment prices, and strong fuel volumes in Europe. Reactors and Services saw revenue growth of 11.8%, from 2.9 billion in 2007 to 3.2 billion in 2008, due to a 40% increase in contribution from the Plants business unit (from completion of major projects), strong nuclear service business in the United States, and increased business in biomass and nuclear propulsion submarines.14 7 Paul Betts, \"The stop-start revival of the nuclear power industry,\" Financial Times, November 28, 2008, p. 14, via ProQuest, ABI/Inform, www.proquest.com, accessed April 2009. 8 AREVA Press Release, January 29, 2009, p. 1, http://www.AREVA.com/servletews-en.html, accessed May 2009. 9 Transcript, \"Q4 2008 AREVA CI Earnings Presentation-Final,\" Fair Disclosure Wire, February 25, 2009, via ProQuest, ABI/Inform, www.proquest.com, accessed April 2009. 10 AREVA 2008 financial results presentation, pages 29, 42, and 44, http://www.AREVA.com/servlet/BlobProvider?blobcol=urluploadedfile&blobheader=application%2Fpdf&blobkey=id&blo btable=Downloads&blobwhere=1235488434272&filename=resultatsannuels2008en.pdf, accessed May 2009. 11 Electricite de France, France's major electric utility. 12 Nuclear Decommissioning Authority. 13 AREVA Press Release, January 29, 2009, p. 1, http://www.AREVA.com/servletews-en.html, accessed May 2009. 14 Ibid. 2 AREVA 109-092 Challenges Ahead While revenues and backlog continued to be strong, three issues clouded AREVA's otherwise positive outlook: (1) cost overruns associated with the Finland OL3 EPR construction, which forced AREVA to take provisions totaling 749 million in 2008;15 a 1.7 billion loss on completion of the project overall,16 (2) Siemens' decision in January 2009 to exit its partnership in AREVA NP and exercise its put option,17 and (3) the projected shortfall of 3 billion for AREVA's 2009 investment budget.18 The OL3 provision negatively impacted AREVA's financial performance for 2008, reducing operating income from 1.2 billion to 417 million, compared to operating income after provisions of 751 million in 2007. This provision lowered earnings per share in 2008 to 16.62 compared to 20.95 in 2007 (see Exhibit 1). The Siemens' put, which required AREVA to buy Siemens out of its 34% stake in AREVA NP by 2012, was valued at 2.1 billion at the end of 2007. Industry analysts expected Siemens and AREVA to negotiate an exit for Siemens much earlier than 2012, some anticipating an agreement as early as mid2009, and that the value of the put option may possibly be reduced in exchange for a softening of the non-compete terms for Siemens.19 The 2.1 billion put increased AREVA's net debt to 5.4 billion, compared with 4 billion at the end of 2007.20 See Exhibit 9 for net debt reconciliation. As a result of these events, AREVA sought solutions to its projected cash flow needs. While the company continued to sell noncore assets, cut costs, and seek out partners to share the cost of investments, the industry and business press speculated about AREVA's next moves. The press mentioned five possible scenarios that AREVA could use to alleviate its cash crunch:21 1. 2. 3. 4. 5. Continued sale of assets, such as business units that were not core or minority stakes in other companies.22 Straight government loan or equity purchase. Stock issue to the public (IPO). Increased sharing of the cost of investments with partners. Acquisition/merger with other large French companies. For AREVA, its vertically integrated structure, its unique experience with new plant construction, and its deep expertise in mining, services, disposal, recycling, and T&D positioned it to take advantage of the opportunities inherent in the resurgence of nuclear power. Which of the above options would best suit its business strategy going forward? Were there other options to be considered? 15 AREVA, 2008 Reference Document, p. 165. 16 AREVA 2008 financial results presentation, p.39. 17 A put option is a contract between a buyer and a seller that gives the seller the option to sell a set number of shares to the buyer. A put option may or may not be exercised by the seller, but if it is exercised, the buyer is obligated to purchase the shares. 18 David Gauthier-Villars, \"France's AREVA Feels Its Power Wane-Nuclear-Engineering Firm Considers Asset Sales, Seeks Government Aid to Fill Financing Hole,\" Wall Street Journal, February 23, 2009, p. B1, via ProQuest, ABI/Inform, www.proquest.com, accessed, April 2009. 19 Peggy Hollinger, \"AREVA in threat to sue Siemens over Rosatom deal,\" Financial Times, March 5, 2009, p. 16, via ProQuest, ABI/Inform, www.proquest.com, accessed, April 2009. 20 AREVA, 2008 Reference Document, p. 166. 21 Peggy Hollinger, \"AREVA concedes assets in return for backing,\" Financial Times, February 26, 2009, p. 15; and \"'Madame Non' in battle to keep the nuclear hot seat,\" Financial Times, March 13, 2009, p. 20, via ProQuest, ABI/Inform, www.proquest.com, accessed, April 2009. 22 David Gauthier-Villars. 3 109-092 Exhibit 1 AREVA AREVA Consolidated Income Statement (in millions of euros, except where noted) 2008 2007 2006 13,160 32 (10,906) 11,923 21 (9,183) 10,863 55 (8,698) 2,286 (453) (607) (980) (202) 373 2,762 (421) (529) (881) (243) 64 2,220 (355) (493) (778) (312) 125 Operating income 417 751 407 income from cash and cash equivalents Gross borrowing costs 38 (148) 37 (110) 50 (78) (111) (73) (29) (707) 788 (408) 546 (330) 456 81 138 126 (29) 64 97 (46) (81) (51) Net income of consolidated businesses Share in net income of associates 343 156 734 148 453 220 Net income from continuing operations Net income from discontinued operations 498 0 882 0 672 0 Net income for the period Less: minority interests 498 (91) 882 139 672 24 Net income attributable to equity holders of the parent 589 743 649 35,442,701 35,442,701 35,442,701 16.62 16.62 16.62 20.95 20.95 20.95 18.31 18.31 18.31 Revenue Other income from operations Cost of sales Gross margin Research and development expenses Marketing and sales expenses General and administrative expenses Other operating expenses Other operating income Net borrowing costs Other financial expenses Other financial income Other financial income and expense Net financial income (expense) Income tax Average number of shares outstanding Earnings per share from continuing operations (in euros) Basic earnings per share Diluted earnings per share (1) Source: AREVA, \"AREVA Consolidated Financial Statements 2008,\" AREVA web site, http://www.AREVA.com/servlet/ BlobProvider?blobcol=urluploadedfile&blobheader=application%2Fpdf&blobkey=id&blobtable=Downloads&blob where=1236778062720&filename=AREVA_+Financial_statements_2008%2C0.pdf, accessed May 2009. (1) AREVA has not issued any instruments with a dilutive impact on share capital. 4 AREVA Exhibit 2 109-092 AREVA Consolidated Balance Sheet (in millions of euros) 31-Dec-08 31-Dec-07 31-Dec-06 Non-current assets Goodwill on consolidated companies Other intangible assets Property, plant and equipment End-of-life-cycle assets (third party share) Assets earmarked for end-of-life-cycle operations Investments in associates Other non-current financial assets Pension fund assets Deferred tax assets 22,841 4,803 3,089 4,913 270 4,954 1,757 2,152 1 900 21,425 4,377 2,729 4,204 2,491 2,873 1,558 2,588 0 604 17,350 2,515 1,175 3,814 2,091 2,986 1,521 2,376 0 873 Current assets Inventories and work-in-process Trade accounts receivable and related accounts Other operating receivables Current tax assets Other non-operating receivables Cash and cash equivalents Other current financial assets Assets of operations held for sale 11,804 3,403 4,486 2,434 164 154 1,050 113 0 9,251 2,817 3,884 1,402 94 141 634 279 0 8,543 2,306 3,604 1,121 116 142 962 292 0 Total assets 34,644 30,676 25,893 Source: AREVA, \"AREVA Consolidated Financial Statements 2008,\" AREVA web site, http://www.AREVA.com/servlet/ BlobProvider?blobcol=urluploadedfile&blobheader=application%2Fpdf&blobkey=id&blobtable=Downloads&blob where=1236778062720&filename=AREVA_+Financial_statements_2008%2C0.pdf, accessed May 2009. 5 109-092 Exhibit 3 AREVA AREVA Consolidated Liabilities and Equity (in millions of euros) 31-Dec-08 31-Dec-07 31-Dec-06 7,292 7,464 7,016 Share capital 1,347 1,347 1,347 Consolidated premiums and reserves 4,455 3,925 3,619 287 1,117 1,131 Equity and minority interests Deferred unrealized gains and losses on financial instruments Currency translation reserves (131) (138) (25) Net income attributable to equity holders of the parent 589 743 649 Minority interests 745 470 294 11,795 11,951 8,352 Employee benefits 1,268 1,175 1,122 Provisions for end-of-life cycle operations 5,674 5,075 4,585 Non-current liabilities Other non-current provisions 123 121 113 Long-term borrowings 3,969 4,302 1,407 Deferred tax liabilities 760 1,277 1,124 Current liabilities 15,558 11,261 10,526 Current provisions 2,081 1,823 1,788 Short-term borrowings 2,693 613 712 Advances and prepayments received 4,752 4,172 4,185 Trade accounts payable and related accounts 2,991 2,565 2,093 Other operating liabilities 2,884 1,921 1,650 104 127 74 53 41 23 0 0 0 34,644 30,676 25,893 Current tax liabilities Other non-operating liabilities Liabilities of operations held for sale Total liabilities and equity Source: AREVA, \"AREVA Consolidated Financial Statements 2008,\" AREVA web site, http://www.AREVA.com/servlet/ BlobProvider?blobcol=urluploadedfile&blobheader=application%2Fpdf&blobkey=id&blobtable=Downloads&blob where=1236778062720&filename=AREVA_+Financial_statements_2008%2C0.pdf, accessed May 2009. 6 AREVA 109-092 Exhibit 4 AREVA Consolidated Cash Flow Statement (in millions of euros) 2008 2007 2006 Net income before minority interests 498 882 672 Less: income from discontinued operations Net income from continuing operations Share in net income of associates Net amortization, depreciation and impairment of PP&E and intangible assets and marketable securities maturing in more than 3 months Goodwill impairment losses Net share to provisions Net effect of reverse discounting of assets and provisions Income tax expense (current and deferred) Net interest included in borrowing costs Loss (gain) on disposals of fixed assets and marketable securities maturing in more than 3 months: change in fair value Other non-cash items Cash flow from operations before interest and taxes Net interest received (paid) Income tax paid Cash flow from operations after interest and tax Change in working capital requirement Net cash from operating activities Investment in PP&E and intangible assets Loans granted and acquisitions of non-current financial assets Acquisitions of shares of consolidated companies, net of acquired cash Disposals of PP&E and intangible assets Loan repayments and disposals of non-current financial assets Disposals of shares of consolidated companies, net of disposed cash Dividends from equity associates Net cash used in investing activities Share issues subscribed by minority shareholders in consolidated subsidiaries Dividends paid to shareholders of the parent company Dividends paid to minority shareholders of consolidated companies Increase (decrease) in borrowings Net cash used in financing activities Increase (decrease) in securities recognized at fair value through profit and loss Impact of foreign exchange movements Net cash flow from discontinued operations Increase (decrease) in net cash Net cash at the beginning of the year Cash at the end of the year Less: short-term bank facilities and non-trade current accounts (credit balances) Net cash at the end of the year 0 498 (156) 0 882 (148) 0 672 (220) 565 0 271 272 46 108 553 0 9 147 81 55 500 0 314 178 50 7 (347) (353) 904 (82) (295) 527 (446) 81 (1,623) (1,648) (133) 41 1,530 495 80 (1,259) 268 (240) (86) 1,574 1,516 42 (22) 0 357 520 1,050 (172) 877 (160) (125) 1,294 (26) (130) 1,138 (416) 722 (1,112) (1,127) (1,853) 40 1,204 0 52 (2,796) 5 (300) (45) 1,862 1,522 178 (7) 0 (381) 901 634 (113) 520 (259) (15) 1,231 0 (90) 1,141 (344) 797 (1,134) (2,318) (240) 42 2,650 21 27 (953) 0 (350) (79) 64 (364) (1) 2 0 (518) 1,419 962 (61) 901 Source: AREVA, \"AREVA Consolidated Financial Statements 2008,\" AREVA web site, http://www.AREVA.com/servlet/ BlobProvider?blobcol=urluploadedfile&blobheader=application%2Fpdf&blobkey=id&blobtable=Downloads&blob where=1236778062720&filename=AREVA_+Financial_statements_2008%2C0.pdf, accessed May 2009. Note: \"Net Cash\" taken into account in establishing the cash flow statement consists of: (1) \"Cash and cash equivalents,\" which includes cash balances and non-trade current accounts, and risk-free marketable securities initially maturing in less than three months, and money market funds; and (2) after deduction of short-term bank facilities and non-trade current accounts included in short-term borrowings. 7 109-092 Exhibit 5 AREVA AREVA 2008 Segment Data by Division (in millions of euros, except personnel data) Income Statement Front End Gross revenue 3,411 (48) Contribution to consolidated revenue Operating income Inter-company sales* % of gross revenue Depreciation and amortization of PP&E and intangible assets Impairment of PP&E and intangible assets Net reversal (increase) in provisions Gain (loss) on asset disposals recognized in operating income Reactors and Services Back End T&D 3,220 1,987 (183) (295) 3,363 3,037 453 Total Group Corporate Eliminations 5,071 303 (832) 13,160 (7) (300) 832 0 1,692 5,065 3 0 13,160 (687) 270 561 (170) (10) 417 13.3% -21.3% 13.6% 11.1% n.a. 3.2% (215) (133) (133) (85) (12) (578) 0 0 91 (1) 0 91 (108) (210) (10) 58 (1) (270) 189 1 1 8 (3) 195 5,595 1,436 1,947 1,308 2,539 (19) 12,806 718 38 4,468 0 0 0 5,224 Balance Sheet PP&E and intangible assets (including goodwill) Assets earmarked for end-of-life-cycle operations Other non-current assets 0 0 0 0 4,810 0 4,810 6,313 1,474 6,415 1,308 7,350 (19) 22,841 3,055 2,015 1,708 3,709 665 (674) 10,477 0 0 0 0 1,327 0 1,327 Subtotal: Current assets 3,055 2,015 1,708 3,709 1,992 (674) 11,804 Total assets 9,368 3,488 8,123 5,017 9,332 (694) 34,644 1,430 228 5,097 258 52 0 7,065 0 0 0 0 4,730 0 4,730 1,430 228 5,097 258 4,782 0 11,795 383 874 374 355 97 0 2,081 1,742 2,251 3,718 3,076 581 (689) 10,680 0 0 0 0 2,797 0 2,797 Subtotal: Current liabilities 2,125 3,125 4,092 3,431 3,474 (689) 15,558 Total liabilities 3,555 3,353 9,189 3,689 8,257 (689) 27,353 Workforce 14,240 19,477 10,906 29,966 825 0 75,414 Subtotal: Non-current assets Inventories and receivables (excluding tax receivables) Other current assets Employee benefits and non-current provisions Other non-current liabilities Subtotal: Non-current liabilities Current provisions Advances, down payments and other debt, excluding tax liabilities Other current liabilities Source: AREVA, \"AREVA Consolidated Financial Statements 2008,\" AREVA web site, http://www.AREVA.com/servlet/ BlobProvider?blobcol=urluploadedfile&blobheader=application%2Fpdf&blobkey=id&blobtable=Downloads&blob where=1236778062720&filename=AREVA_+Financial_statements_2008%2C0.pdf, accessed May 2009. * Transfer prices used in inter-company transactions are determined at arm's length. 8 AREVA Exhibit 6 109-092 AREVA 2007 Segment Data by Division (in millions of euros, except personnel data) Income Statement Front End Gross revenue 3,181 Reactors and Services Total Group Back End T&D 2,870 1,978 4,340 280 (726) 11,923 (42) (152) (240) (12) (280) 726 - Contribution to consolidated revenue 3,140 2,717 1,738 4,327 1 0 11,923 Operating income 496 (178) 207 406 (166) (14) 751 15.6% -6.2% 10.5% 9.3% n.a. 6.3% (191) (88) (143) (76) (4) (503) 0 0 0 0 0 - (41) 29 (22) 47 (25) (12) 3 0 1 0 0 4 4,894 1,141 1,897 1,053 2,332 697 46 4,621 0 0 0 5,365 0 0 0 0 4,750 0 4,750 5,591 1,187 6,518 1,053 7,082 (7) 21,425 2,308 1,687 1,383 2,909 419 (461) 8,244 Inter-company sales* % of gross revenue Depreciation and amortization of PP&E and intangible assets Impairment of PP&E and intangible assets Net reversal (increase) in provisions Gain (loss) on asset disposals recognized in operating income Corporate Eliminations Balance Sheet PP&E and intangible assets (including goodwill) Assets earmarked for end-of-life-cycle operations Other non-current assets Subtotal: Non-current assets Inventories and receivables (excluding tax receivables) Other current assets (7) 11,310 0 0 0 0 1,007 0 1,007 Subtotal: Current assets 2,308 1,687 1,383 2,909 1,426 (461) 9,251 Total assets 7,899 2,874 7,900 3,961 8,508 (468) 30,676 1,324 273 4,479 272 22 0 6,371 0 0 0 0 5,580 0 5,580 1,324 273 4,479 272 5,602 0 11,951 259 637 419 378 130 0 1,823 1,416 1,815 3,113 2,513 308 (466) 8,699 Employee benefits and non-current provisions Other non-current liabilities Subtotal: Non-current liabilities Current provisions Advances, down payments and other debt, excluding tax liabilities Other current liabilities Subtotal: Current liabilities 0 0 0 0 740 0 740 1,675 2,452 3,532 2,891 1,178 (467) 11,261 Total liabilities 2,999 2,725 8,012 3,163 6,779 (467) 23,212 Workforce 12,577 16,500 10,638 25,248 620 0 65,583 Source: AREVA, \"AREVA Consolidated Financial Statements 2008,\" AREVA web site, http://www.AREVA.com/servlet/ BlobProvider?blobcol=urluploadedfile&blobheader=application%2Fpdf&blobkey=id&blobtable=Downloads&blob where=1236778062720&filename=AREVA_+Financial_statements_2008%2C0.pdf, accessed May 2009. * Transfer prices used in inter-company transactions are determined at arm's length. 9 109-092 Exhibit 7 AREVA AREVA 2006 Segment Data by Division (in millions of euros, except personnel data) Income Statement Front End Gross revenue 2,971 (52) 2,919 Inter-company sales* Contribution to consolidated revenue Reactors and Services Back End T&D 2,441 2,203 (129) 2,312 Total Group Corporate Eliminations 3,725 255 (732) 10,863 (295) 1,908 (1) 3,724 (254) 0 732 0 10,863 (1) 407 456 (420) 273 191 (93) 15.4% -17.2% 12.4% 5.1% n.a. 3.7% (180) (68) (153) (76) (2) (479) Impairment of PP&E and intangible assets (17) 0 0 0 0 (17) Net reversal (increase) in provisions Gain (loss) on asset disposals recognized in operating income 33 (358) 40 10 (45) (320) 34 (5) 1 2 20 51 2,321 918 1,954 961 1,344 3 7,502 429 70 4,581 0 0 0 5,080 0 0 0 0 4,769 0 4,769 2,750 988 6,535 961 6,113 3 17,350 1,890 1,494 1,326 2,513 375 (426) 7,172 0 0 0 0 1,370 0 1,370 Subtotal: Current assets 1,890 1,494 1,326 2,513 1,745 (426) 8,542 Total assets 4,640 2,482 7,861 3,474 7,858 (423) 25,893 1,153 197 4,154 279 38 0 5,821 0 0 0 0 2,531 0 2,531 Subtotal: Non-current liabilities Current provisions 1,153 204 197 670 4,154 413 279 408 2,569 95 0 (2) 8,352 1,788 Advances, down payments and other debt, excluding tax liabilities Other current liabilities Subtotal: Current liabilities 1,131 0 1,335 1,676 0 2,346 3,248 0 3,661 2,089 0 2,498 232 786 1,114 (425) 0 (427) 7,952 786 10,526 Total liabilities 2,488 2,543 7,815 2,776 3,682 (427) 18,878 Workforce 11,995 14,936 10,697 22,988 495 0 61,111 Operating income % of gross revenue Depreciation and amortization of PP&E and intangible assets Balance Sheet PP&E and intangible assets (including goodwill) Assets earmarked for end-of-life-cycle operations Other non-current assets Subtotal: Non-current assets Inventories and receivables (excluding tax receivables) Other current assets Employee benefits and non-current provisions Other non-current liabilities Source: AREVA, \"AREVA Consolidated Financial Statements 2008,\" AREVA web site, http://www.AREVA.com/servlet/ BlobProvider?blobcol=urluploadedfile&blobheader=application%2Fpdf&blobkey=id&blobtable=Downloads&blob where=1236778062720&filename=AREVA_+Financial_statements_2008%2C0.pdf, accessed May 2009. * Transfer prices used in inter-company transactions are determined at arm's length. 10 AREVA Exhibit 8 109-092 Backlog by Division (in billions of euros) Source: Casewriter's graph, based on data from AREVA 2008 financial results presentation, http://www.AREVA.com/ servlet/BlobProvider?blobcol=urluploadedfile&blobheader=application%2Fpdf&blobkey=id&blobtable=Downloads &blobwhere=1235488434272&filename=resultatsannuels2008en.pdf, accessed May 2009. 11 109-092 Exhibit 9 AREVA AREVA Consolidated Net Debt23 Reconciliation between net cash reported in the cash flow statement and net cash (debt) reported on the balance sheet (in millions of euros) Net cash per cash flow statement Short-term bank facilities and non-trade current accounts (credit balances) Securities held for trading maturing in more than 3 months Other current financial assets and derivatives on financing activities Cash position per the balance sheet Borrowings Net cash (debt) including Siemens' put option Siemens put option Net cash (debt) excluding Siemens' put option 2008 2007 877 172 6 107 1,163 (6,662) (5,499) 2,049 (3,450) 520 113 69 210 913 (4,915) (4,002) 2,049 (1,954) Schedule of borrowings (in millions of euros) 2008 2007 Put options of minority shareholders (including Siemens' put option) Interest-bearing advances Loans from financial institutions Short-term bank facilities and other credit balances Financial instruments Other debt Total borrowings 2,068 727 3,582 172 54 59 6,662 2,049 652 2,009 113 27 65 4,915 2008/2007 change +68.7% +52.2% -91.3% -49.0% +27.4% +35.5% +37.4% 0.0% +76.6% 2008/2007 change +0.9% +11.5% +78.3% +52.2% +100.0% -9.2% +35.5% Source: AREVA, 2008 Reference Document, p. 190, http://www.AREVA.com/servlet/finance/financelibrary-en.html, accessed May 2009. 23 Net cash (debt) is defined as the sum of \"Cash and cash equivalents\" and \"Other current financial assets,\" less \"Current and non-current borrowings.\" \"Current and non-current borrowings\" include the present value of the put held by Siemens. 12 1. Explain each one of five possible scenarios that AREVA could use to alleviate its cash crunch. 2. Suggest the option which is the best, in your opinion, and explain your views on that