VINCI

Annual / Quarterly Financial Statement • Feb 10, 2017

AT 31 DECEMBER 2016

Table of contents

Key figures	3
Consolidated income statement for the period	4
Consolidated comprehensive income statement for the period	5
Consolidated balance sheet	6
Consolidated cash flow statement	8
Consolidated statement of changes in equity	9

Notes to the consolidated financial statements at 31 December 2016

General policies and use of estimates	10
	14
1. Growth of concessions	14
2. Changes in consolidation scope	14
	19
1. Information by operating segment	19
2. Breakdown of revenue by geographical area	24
3. Detail of capital employed and breakdown by geographical area	25
Main income statement items	26
4. Operating income	26
5. Cost of net financial debt	27
6. Other financial income and expense	28
7. Income tax expense	28
8. Earnings per share	30
	31
	31
	33
	35
Concession and PPP contracts	36
12. Concession intangible assets	37
13. PPP financial receivables	40
14. Concession and PPP contracts of companies accounted for under the equity method	42
Construction contracts (VINCI Energies, Eurovia, VINCI Construction)	44
15. Information on construction contracts	44
Other balance sheet items and business-related commitments	46
16. Property, plant and equipment and other intangible assets	46
17. Loans and receivables	49
18. Working capital requirement and current provisions	49
19. Non-current provisions	52
20. Other contractual obligations of an operational nature and other commitments given and received	53
	Key events in the period and changes in consolidation scope Financial indicators by business line and geographical area Investments in other companies 9. Goodwill and goodwill impairment tests 10. Investments in companies accounted for under the equity method 11. Available-for-sale financial assets

I.	Equity	54
	21. Information on equity	54
	22. Dividends	56
J.	Financing and financial risk management	57
	23. Net financial debt	57
	24. Net cash managed and available resources	62
	25. Financial risk management	65
	26. Book and fair value of financial instruments by accounting category	72
K.	Employee benefits and share-based payments	74
	27. Provisions for employee benefits	74
	28. Share-based payments	80
L.	Other notes	83
	29. Related party transactions	83
	30. Statutory Auditors' fees	84
M.	Note on litigation	85
N.	Post-balance sheet events	86
	31. Appropriation of 2016 net income	86
	32. Other post-balance sheet events	86
O.	Other information on the consolidation scope	87
	Other consolidation rules and methods	87
	List of the main controlled companies at 31 December 2016	89
	List of the main equity-accounted companies at 31 December 2016	97

Consolidated financial statements

Key figures

(in € millions)	2016	2015
Revenue (*)	38,073	38,518
Revenue generated in France (*)	22,418	22,414
% of revenue (*)	58.9%	58.2%
Revenue generated outside France (*)	15,654	16,104
% of revenue (*)	41.1%	41.8%
Operating income from ordinary activities	4,174	3,758
% of revenue (*)	11.0%	9.8%
Recurring operating income	4,167	3,788
Operating income	4,118	3,715
Net income attributable to owners of the parent including non-recurring changes in deferred tax (**)	2,505	2,046
% of revenue (*)	6.6%	5.3%
(**) Diluted earnings per share including non-recurring changes in deferred tax (in €)	4.48	3.66
Net income attributable to owners of the parent excluding non-recurring changes in deferred tax (**)	2,376	2,046
(**) Diluted earnings per share excluding non-recurring changes in deferred tax (in €)	4.24	3.66
Dividend per share (in €)	2.10 (***)	1.84
Cash flows from operations before tax and financing costs	5,966	5,664
Operating investments (net of disposals)	(558)	(624)
Growth investments in concessions and PPPs	(839)	(903)
Free cash flow (after investments)	2,948	2,995
Equity including non-controlling interests	17,006	15,256
Net financial debt	(13,938)	(12,436)

(*) Excluding concession subsidiaries' revenue derived from works carried out by non-Group companies.

(**) The Group's deferred tax at 31 December 2016 has been revalued mainly following the adoption of the 2017 Finance Act in France, which provides for a reduction in the corporate income tax rate

from 33.33% to 28% for all companies from 2020. The impact on net income attributable to owners of the parent is €129 million (€0.23 per share).

(***) Dividend proposed to the Shareholders' General Meeting of 20 April 2017, including an interim dividend of €0.63 per share paid on 10 November 2016.

Consolidated income statement for the period

(in € millions)	Notes	2016	2015
Revenue (*)	1-2	38,073	38,518
Concession subsidiaries' revenue derived from works carried out by non-Group companies		475	643
Total revenue		38,547	39,161
Revenue from ancillary activities	4	130	160
Operating expenses	4	(34,503)	(35,563)
Operating income from ordinary activities	1-4	4,174	3,758
Share-based payments (IFRS 2)	28	(118)	(95)
Profit/(loss) of companies accounted for under the equity method	4-10	69	89
Other recurring operating items		42	36
Recurring operating income	4	4,167	3,788
Non-recurring operating items	4	(49)	(73)
Operating income	4	4,118	3,715
Cost of gross financial debt		(551)	(600)
Financial income from cash investments		26	43
Cost of net financial debt	5	(526)	(557)
Other financial income and expense	6	(35)	(24)
Income tax expense	7	(1,013)	(1,055)
of which impact of non-recurring changes in deferred tax (**)		129	-
Net income		2,545	2,079
Net income attributable to non-controlling interests		39	34
Net income attributable to owners of the parent		2,505	2,046
Basic earnings per share (in €) (**)	8	4.52	3.69
Diluted earnings per share (in €) (**)	8	4.48	3.66

Net income attributable to owners of the parent excluding non-recurring changes in deferred tax (**)	2,376	2,046
Diluted earnings per share excluding non-recurring changes in deferred tax (in €) (**)	4.24	3.66

(*) Excluding concession subsidiaries' revenue derived from works carried out by non-Group companies.

(**) The Group's deferred tax at 31 December 2016 has been revalued mainly following the adoption of the 2017 Finance Act in France, which provides for a reduction in the corporate income tax rate from 33.33% to 28% for all companies from 2020. The impact on net income attributable to owners of the parent is €129 million (€0.23 per share).

Consolidated comprehensive income statement for the period

		2016			2015
(in € millions)	Attributable to owners of the parent	Attributable to non controlling interests	Total	Attributable to owners of the parent	Attributable to non controlling interests	Total
Net income	2,505	39	2,545	2,046	34	2,079
Changes in fair value of cash flow and net investment hedging instruments (*)	33	-	33	71	-	71
Currency translation differences	52	4	56	32	4	36
Tax (**)	(12)	-	(12)	(26)	-	(26)
Share in net income of companies accounted for under the equity method	26	-	26	60	-	60
Other comprehensive income that may be recycled subsequently to net income	99	4	103	137	4	140
Actuarial gains and losses on retirement benefit obligations	(149)	-	(149)	(105)	-	(105)
Tax	31	-	31	25	-	25
Other comprehensive income that may not be recycled subsequently to net income	(118)	-	(118)	(80)	-	(80)
Total other comprehensive income recognised directly in equity	(19)	4	(15)	57	3	60
Total comprehensive income	2,486	43	2,529	2,102	37	2,139

(*) Changes in the fair value of cash flow hedges are recognised in equity for the effective portion. Cumulative gains and losses in equity are taken to profit or loss at the time when the cash flow affects profit or loss.

(**) Tax effects relating to changes in the fair value of cash flow hedging financial instruments (effective portion).

Consolidated balance sheet

Assets

(in € millions)	Notes	31/12/2016	31/12/2015
Non-current assets
Concession intangible assets	12	26,691	23,915
Goodwill	9	8,113	7,296
Other intangible assets	16	409	387
Property, plant and equipment	16	4,468	4,241
Investments in companies accounted for under the equity method	10	1,505	1,404
Other non-current financial assets	11-13-17	881	942
Derivative financial instruments – non-current assets	25	721	803
Deferred tax assets	7	228	278
Total non-current assets		43,016	39,267
Current assets
Inventories and work in progress	18	935	964
Trade and other receivables	18	11,422	10,696
Other current operating assets	18	5,099	4,635
Other current non-operating assets		55	30
Current tax assets		167	365
Other current financial assets		35	27
Derivative financial instruments – current assets	25	370	364
Cash management financial assets	24	154	166
Cash and cash equivalents	24	6,678	5,632
Total current assets		24,915	22,880
Total assets		67,931	62,147

Consolidated balance sheet

Equity and liabilities

(in € millions)	Notes	31/12/2016	31/12/2015
Equity
Share capital	21.1	1,473	1,471
Share premium	21.1	9,463	9,044
Treasury shares	21.2	(1,581)	(1,534)
Consolidated reserves		5,549	5,024
Currency translation reserves		88	31
Net income attributable to owners of the parent		2,505	2,046
Amounts recognised directly in equity	21.4	(1,032)	(962)
Equity attributable to owners of the parent		16,465	15,119
Non-controlling interests	21.5	541	137
Total equity		17,006	15,256
Non-current liabilities
Non-current provisions	19	945	949
Provisions for employee benefits	27	1,653	1,515
Bonds	23	12,496	11,147
Other loans and borrowings	23	3,769	3,854
Derivative financial instruments – non-current liabilities	25	203	224
Other non-current liabilities		135	129
Deferred tax liabilities	7	1,910	1,656
Total non-current liabilities		21,110	19,474
Current liabilities
Current provisions	18	4,172	4,053
Trade payables	18	7,740	7,590
Other current operating liabilities	18	11,838	10,884
Other current non-operating liabilities		480	360
Current tax liabilities		190	351
Derivative financial instruments – current liabilities	25	166	193
Current borrowings	23	5,229	3,986
Total current liabilities		29,815	27,417
Total equity and liabilities		67,931	62,147

Consolidated cash flow statement

(in € millions)	Notes	2016	2015
Consolidated net income for the period (including non-controlling interests)		2,545	2,079
Depreciation and amortisation	4.2	2,003	2,033
Net increase/(decrease) in provisions and impairment		52	61
Share-based payments (IFRS 2) and other restatements		15	4
Gain or loss on disposals		(80)	(3)
Change in fair value of financial instruments		6	-
Share of profit or loss of companies accounted for under the equity method		(76)	(98)
and dividends received from unconsolidated companies
Capitalised borrowing costs		(36)	(23)
Cost of net financial debt recognised	5	526	557
Current and deferred tax expense recognised	7.1	1,013	1,055
Cash flows from operations before tax and financing costs	1	5,966	5,664
Changes in operating working capital requirement and current provisions	18.1	23	307
Income taxes paid		(1,213)	(1,041)
Net interest paid		(525)	(534)
Dividends received from companies accounted for under the equity method		94	125
Cash flows (used in)/from operating activities	I	4,346	4,522
Purchases of property, plant and equipment and intangible assets		(706)	(749)
Proceeds from sales of property, plant and equipment and intangible assets		148	125
Operating investments (net of disposals)	1	(558)	(624)
Operating cash flow	1	3,787	3,898
Investments in concession fixed assets (net of grants received)		(824)	(886)
Financial receivables (PPP contracts and others)		(15)	(16)
Growth investments in concessions and PPPs	1	(839)	(903)
Free cash flow (after investments)	1	2,948	2,995
Purchases of shares in subsidiaries and affiliates (consolidated and unconsolidated) (1)	1-2	(2,579)	(403)
Proceeds from sales of shares in subsidiaries and affiliates (consolidated and unconsolidated) (2)	1-2	172	18
Net effect of changes in scope of consolidation		(1,039)	(70)
Net financial investments		(3,446)	(456)
Other		67	44
Net cash flows (used in)/from investing activities	II	(4,777)	(1,938)
Share capital increases and decreases and repurchases of other equity instruments (3)		440	(64)
Transactions on treasury shares	21.2	(562)	(688)
Non-controlling interests in share capital increases and decreases of subsidiaries		197	-
Acquisitions/disposals of non-controlling interests (without acquisition or loss of control)		(7)	(27)
Dividends paid	22	(1,084)	(1,044)
- to shareholders of VINCI SA (4)		(1,052)	(1,019)
- to non-controlling interests		(32)	(25)
Proceeds from new long-term borrowings	23.1	2,458	129
Repayments of long-term borrowings	23.1	(2,107)	(1,418)
Change in cash management assets and other current financial debts		484	3
Net cash flows (used in)/from financing activities	III	(182)	(3,109)
Other changes (5)	IV	1,164	112
Change in net cash	I+II+III+IV	551	(413)
Net cash and cash equivalents at beginning of period		5,077	5,491
Net cash and cash equivalents at end of period	24.1	5,628	5,077
Change in cash management assets and other current financial debts		(484)	(3)
(Proceeds from)/repayment of loans		(350)	1,289
Other changes (5)		(1,219)	(28)
Change in net financial debt		(1,502)	845
Net financial debt at beginning of period		(12,436)	(13,281)
Net financial debt at end of period	23	(13,938)	(12,436)

(1) Including in 2016, the acquisitions of Lamsac, Aerodom, Aéroports de Lyon and J&P Richardson for €1,273 million, €411 million, €535 million and €62 million respectively, along with funding provided to companies operating concessions at Kansai airport (€149 million) and Santiago de Chile airport (€13 million).

In 2015, acquisitions of Orteng Engenharia e Sistemas for €87 million, HEB Construction for €43 million and a 20% stake in Constructora Conconcreto for €81 million.

(2) Including the residual stake in Infra Foch Topco, sold in September 2016.

(3) Including in 2015 capital increases totalling €436 million and the early redemption of perpetual subordinated bonds for €500 million.

(4) Including in 2015 interest payments on the perpetual subordinated bonds for €30 million.

(5) Including the debts of companies integrated during the year (particularly Lamsac, Aerodom, Aéroports de Lyon and J&P Richardson) on their respective acquisition dates.

Consolidated statement of changes in equity

	Equity attributable to owners of the parent
(in € millions)	Share capital	Share premium	Treasury shares	Other equity instruments	Consolidated reserves	Net income	Currency translation reserves	Amounts recognised directly in equity	Total attributable to owners of the parent	Non controlling interests	Total
Balance at 01/01/2015	1,475	8,633	(1,560)	491	4,205	2,486	(1)	(987)	14,743	125	14,868
Net income for the period	-	-	-	-	-	2,046	-	-	2,046	34	2,079
Other comprehensive income recognised directly in the equity of controlled companies	-	-	-	-	-	-	32	(35)	(3)	4	1
Other comprehensive income recognised directly in the equity of companies accounted for under the equity method	-	-	-	-	-	-	3	57	60	-	60
Total comprehensive income for the period	-	-	-	-	-	2,046	35	22	2,102	37	2,139
Increase in share capital	26	411	-	-	-	-	-	-	437	-	437
Decrease in share capital and repurchases of other equity instruments	(30)	-	625	(491)	(606)	-	-	-	(501)	-	(501)
Transactions on treasury shares	-	-	(599)	-	(89)	-	-	-	(688)	-	(688)
Allocation of net income and dividend payments	-	-	-	-	1,467	(2,486)	-	-	(1,019)	(25)	(1,044)
Share-based payments (IFRS 2)	-	-	-	-	61	-	-	-	61	-	61
Impact of acquisitions or disposals of non-controlling interests after acquisition of control	-	-	-	-	(7)	-	-	-	(7)	-	(7)
Changes in consolidation scope	-	-	-	-	2	-	(4)	2	-	-	-
Other	-	-	-	-	(10)	-	-	1	(9)	-	(10)
Balance at 31/12/2015	1,471	9,044	(1,534)	-	5,024	2,046	31	(962)	15,119	137	15,256
Net income for the period	-	-	-	-	-	2,505	-	-	2,505	39	2,545
Other comprehensive income recognised directly in the equity of controlled companies	-	-	-	-	-	-	52	(96)	(44)	4	(41)
Other comprehensive income recognised directly in the equity of companies accounted for under the equity method	-	-	-	-	-	-	3	23	26	-	26
Total comprehensive income for the period	-	-	-	-	-	2,505	54	(73)	2,486	43	2,529
Increase in share capital	22	418	-	-	-	-	-	-	440	197	637
Decrease in share capital	(20)	-	507	-	(487)	-	-	-	-	-	-
Transactions on treasury shares	-	-	(553)	-	(9)	-	-	-	(562)	-	(562)
Allocation of net income and dividend payments	-	-	-	-	993	(2,046)	-	-	(1,052)	(32)	(1,084)
Share-based payments (IFRS 2)	-	-	-	-	79	-	-	-	79	-	79
Impact of acquisitions or disposals of non-controlling interests after acquisition of control	-	-	-	-	(28)	-	-	-	(28)	(1)	(29)
Changes in consolidation scope	-	-	-	-	(4)	-	1	3	-	202	202
Other	-	-	-	-	(20)	-	1	1	(18)	(4)	(22)
Balance at 31/12/2016	1,473	9,463	(1,581)	-	5,549	2,505	88	(1,032)	16,465	541	17,006

A. General policies and use of estimates

1. Basis for preparing the financial statements

Pursuant to Regulation (EC) No. 1606/2002 of 19 July 2002, VINCI's consolidated financial statements for the period ended 31 December 2016 have been prepared under the International Financial Reporting Standards (IFRS) as adopted by the European Union at 31 December 2016 (*) .

The accounting policies used at 31 December 2016 are the same as those used in preparing the consolidated financial statements at 31 December 2015, except for the change in presentation of the comprehensive income statement described below and changes in the standards and interpretations adopted by the European Union applicable as from 1 January 2016.

The Group's consolidated financial statements are presented in millions of euros, rounded to the nearest million. This may in certain circumstances lead to non-material differences between the sum of the figures and the subtotals that appear in the tables.

The information relating to 2014, presented in the 2015 registration document D.16-0086 filed with the AMF on 26 February 2016, is deemed to be included herein.

The consolidated financial statements were adopted by the Board of Directors on 7 February 2017 and will be submitted to the Shareholders' General Meeting for approval on 20 April 2017.

New standards and interpretations applicable from 1 January 2016

No new standards applied for the first time from 1 January 2016. There were only a few amendments of standards applying mandatorily to periods beginning in 2016:

• Amendments to IAS 1 "Disclosure Initiative";
• Amendments to IAS 16 and IAS 38 "Clarification of Acceptable Methods of Depreciation and Amortisation";
• Amendments to IAS 19 "Defined Benefit Plans: Employee Contributions";
• Amendments to IFRS 11 "Accounting for Acquisitions of Interests in Joint Operations";
• Annual improvements 2010-2012 and 2012-2014.

The implementation of these amendments has no material impact at Group level.

The presentation of comprehensive income takes into account the amendments to IAS 1 "Improvements to Disclosures in the Notes". A specific line item has been created to present separately the proportion of other comprehensive income that may be reclassified subsequently to net income for entities accounted for under the equity method.

At 31 December 2016, the Group had no other comprehensive income that could not be reclassified subsequently to net income relating to entities accounted for under the equity method.

Standards and interpretations adopted by the IASB but not yet applicable at 31 December 2016

The Group has not applied early the following standards and interpretations that could concern the Group and of which application was not mandatory at 1 January 2016:

• IFRS 9 "Financial Instruments";
• IFRS 15 "Revenue from Contracts with Customers";
• IFRS 16 "Leases";
• Amendments to IAS 7 "Disclosure Initiative";
• Amendments to IAS 12 "Recognition of Deferred Tax Assets for Unrealised Losses";
• Amendments to IFRS 10 and IAS 28 "Sale or Contribution of Assets between an Investor and its Associate or Joint Venture";
• Amendments to IFRS 2 "Classification and Measurement of Share-Based Payment Transactions";
• Annual Improvements 2014-2016;
• IFRIC 22 "Foreign Currency Transactions and Advance Consideration".

An analysis of the impacts and practical consequences of applying these standards is under way.

^(*) Available at: http://ec.europa.eu/finance/company-reporting/ifrs-financial-statements/index_en.htm

2. Consolidation methods

In accordance with IFRS 10, companies in which the Group holds, whether directly or indirectly, the majority of voting rights in shareholders' general meetings, in the Boards of Directors or in the equivalent management bodies, giving it the power to direct their operational and financial policies, are generally deemed to be controlled and are fully consolidated. To determine control, VINCI carries out an in-depth analysis of the established governance arrangements and of the rights held by other shareholders. Where necessary, an analysis is performed in relation to instruments held by the Group or by third parties (potential voting rights, dilutive instruments, convertible instruments, etc.) that, if exercised, could alter the type of influence exerted by each party.

For some infrastructure project companies operating under concessions or public-private partnership contracts and in which VINCI is not the only capital investor, in addition to the analysis of the governance arrangements with each partner, the Group may look at the characteristics of subcontracting contracts to check that they do not confer additional powers that could lead to a situation of de facto control. This most often concerns construction contracts and contracts to operate/maintain concession assets.

An analysis is performed if a specific event takes place that may affect the level of control exerted by the Group, such as a change in an entity's ownership structure or governance, or the exercise of a dilutive financial instrument.

In accordance with IFRS 11, the Group's joint arrangements fall into two categories (joint ventures and joint operations) depending on the nature of the rights and obligations held by each party. Classification is generally determined by the legal form of the project vehicle.

Most joint arrangements in the Contracting business are joint operations because of the legal form of the vehicles used. In France, for example, parties generally use sociétés en participation (SEPs) to contractualise their joint works activities.

In some situations, where the facts and circumstances show that a company's activities amount to providing production to the parties, it is regarded as a joint operation even where the vehicle's legal form does not establish transparency between the joint operators' assets and those of the joint arrangement. In that situation, the parties have the rights to substantially all of the economic benefits associated with the company's assets, and will settle its liabilities. For the VINCI Group, this situation concerns certain coating plants held and used by Eurovia in its road infrastructure construction and renovation activities. French property development joint arrangements contractualised in the form of sociétés civiles de construction-vente (SCCVs) are joint ventures under IFRS 11 and accounted for under the equity method.

Associates are entities over which the Group exerts significant influence. They are accounted for under the equity method in accordance with IAS 28. Significant influence is presumed where the Group's stake is more than or equal to 20%. However, it may arise where the ownership interest is lower, particularly where the Group is represented on the Board of Directors or any equivalent governance body, and therefore takes part in determining the entity's operational and financial policies and strategy. This applies to the Group's stakes in Aéroports de Paris (ADP) and CFE.

The Group's consolidation scope does not include any subsidiaries in which there are any non-controlling interests, or joint ventures or associates individually material. That assessment is based on the impact of those interests on the Group's financial performance, consolidated balance sheet and cash flows. VINCI does not own any interest in structured entities as defined by IFRS 12.

VINCI's consolidated financial statements include the financial statements of all companies with revenue of more than €2 million, and of companies whose revenue is below this figure but whose impact on certain of the Group's balance sheet and income statement indicators is material.

The list of the main consolidated companies is in Note O "Other information on the consolidation scope".

3. Use of estimates

The preparation of financial statements under IFRSs requires estimates to be used and assumptions to be made that affect the amounts shown in those financial statements.

These estimates assume the operation is a going concern and are made on the basis of information available at the time. Estimates may be revised if the circumstances on which they were based alter or if new information becomes available. Actual results may be different from these estimates.

The consolidated financial statements for the period have been prepared with reference to the immediate environment, in particular as regards the estimates given below.

Measurement of construction contract profit or loss using the stage of completion method

For revenue and income or losses on construction contracts, the Group applies general revenue recognition rules based on the stage of completion.

The stage of completion and the revenue to be recognised are determined on the basis of a large number of estimates made by monitoring the work performed and taking into account unforeseen circumstances. Adjustments may therefore be made to initial estimates throughout contracts and may materially affect future results.

Values used in impairment tests

The assumptions and estimates made to determine the recoverable amount of goodwill, intangible assets and property, plant and equipment relate in particular to the assessment of market prospects needed to estimate the cash flows, and the discount rates adopted. Any change in these assumptions could have a material effect on the recoverable amount. The main assumptions used by the Group are described in Note E.9 "Goodwill and goodwill impairment tests".

Measurement of provisions

The factors that may cause a material change in the amount of provisions are:

• the estimates made using statistical methods on the basis of expenses incurred in previous years, to determine after-sales-service provisions;
• the forecasts of expenditures on major maintenance over several years used as a basis for the provisions for obligations to maintain the condition of concession assets. These forecasts are estimated taking account of indexation clauses included in construction and civil engineering contracts (mainly the TP01, TP02 and TP09 indexes for France);

• the estimates of forecast profit or loss on construction contracts, which serve as a basis for the determination of losses on completion (see Note G.15 "Information on construction contracts");

• the discount rates used.

Measurement of fair value

The Group mainly uses fair value in measuring, on a consistent basis, the derivative instruments, cash and cash equivalents, available-for-sale financial assets, cash management financial assets and identifiable assets and liabilities acquired in business combinations on its balance sheet. The fair value of other financial instruments (particularly debt instruments and loans and receivables at amortised cost) is stated in Note J.26 "Book and fair value of financial instruments by accounting category" below.

Fair value is the price that would be received from selling an asset or paid to transfer a liability in a normal transaction. It is recognised on the basis of the asset or liability's main market (or the most advantageous market if there is no main market), i.e. the one that offers the highest volume and activity levels. The fair value of derivative financial instruments includes a "counterparty risk" component for derivatives carried as assets and an "own credit risk" component for derivatives carried as liabilities.

To determine these fair values, the Group uses the following measurement methods:

• market-based approaches, based on observable market prices or transactions;
• revenue-based approaches, which convert future cash flows into a single present value;
• cost-based approaches, which take into account the asset's physical, technological and economic obsolescence.

The following three-level hierarchy of fair values is used:

• Level 1 – price quoted on an active market. Marketable securities, some available-for-sale financial assets and listed bond issues are measured in this way;

• Level 2 – internal model using internal measurement techniques with observable factors: these techniques are based on usual mathematical computation methods, which incorporate observable market data (forward prices, yield curves, etc.). The calculation of the fair value of most derivative financial instruments (swaps, caps, floors, etc.) traded over the counter is made on the basis of models commonly used by market participants to price such financial instruments.

Every quarter, the internally calculated values of derivative instruments are checked for consistency with those sent to VINCI by the counterparties;

• Level 3 – internal model using non-observable factors: this model applies to customer relationships and contracts acquired through business combinations, as well as to holdings of unlisted shares, which, in the absence of an active market, are measured at their cost of acquisition plus transaction costs.

Measurement of retirement benefit obligations

The Group is involved in defined contribution and defined benefit retirement plans. Its obligations in connection with these defined benefit plans are measured using the actuarial projected unit credit method based on assumptions such as the discount rate, future increases in wages and salaries, employee turnover, mortality rates and the rate of increase of health expenses. Those obligations may therefore change if assumptions change, most of which are updated annually. Details of the assumptions used and how they are determined are given in Note K.27 "Provisions for employee benefits". The Group considers that the actuarial assumptions used are appropriate and justified in the current conditions.

Measurement of share-based payment expense

The Group recognises a share-based payment expense relating to share subscription, performance share and Group savings plans offered to employees or some of its employees. This expense is measured on the basis of actuarial calculations using estimated behavioural assumptions based on observation of past behaviour.

The main actuarial assumptions (volatility, return on shares, etc.) adopted by the Group are described for each plan in Note K.28 "Share-based payments".

B. Key events in the period and changes in consolidation scope

1. Growth of concessions

Airport concessions

VINCI Airports maintained its growth in 2016, which included the following developments:

• Japan: from 1 April, it took over the operation of Kansai and Osaka airports for a 44-year term, in partnership with Orix Corporation (40%) and other Japanese companies (20%);

• Dominican Republic: on 8 April, it acquired Aerodom, which operates six airports in the country, including Santo Domingo airport (see Note B.2.2 "Acquisition of Aerodom");

• France: on 9 November 2016, a consortium made up of VINCI Airports, Caisse des Dépôts and Crédit Agricole Assurances acquired a 60% stake in Aéroports de Lyon (ADL) (see Note B.2.3 "Acquisition of Aéroports de Lyon").

Other concession contracts

In February, VINCI won a 54-year concession contract for the design, financing, construction, operation and maintenance of the A355, which bypasses Strasbourg to the west (24 km).

In April, VINCI was named as the preferred bidder for the concession contract regarding the future A45 motorway connecting Saint Étienne with Greater Lyon.

VINCI Highways – in partnership with Constructora Conconcreto (25%) and Industrial Conconcreto (25%) – signed a 30-year concession contract to operate 141 km of motorway between Bogota and Girardot in Colombia and to build a third lane over 65 km. Operations under the contract commenced on 1 December 2016.

In December, VINCI Highways acquired Peruvian company Lamsac (see Note B.2.1 "Acquisition of Lamsac"), which holds a 33-year concession contract for the construction, operation and maintenance of the Linea Amarilla toll expressway (25 km) in Lima, Peru.

Parking business

In September, VINCI completed the sale of its remaining 24.6% stake in Infra Foch Topco (the holding company that owns Indigo, formerly known as VINCI Park) to Ardian Infrastructure and Crédit Agricole Assurances.

2. Changes in consolidation scope

		31/12/2016			31/12/2015
(number of companies)	Total	France	Foreign	Total	France	Foreign
Controlled companies	1,891	1,121	770	1,881	1,122	759
Joint ventures (*)	167	116	51	161	110	51
Associates (*)	40	21	19	47	23	24
Total	2,098	1,258	840	2,089	1,255	834

(*) Entities accounted for under the equity method.

The main changes during the period involved the creation or acquisition of project companies handling the new concession contracts won in 2016, along with acquisitions of companies during the year.

Other changes relate mainly to legal restructuring within the Group.

2.1 Acquisition of Lamsac

On 20 December 2016, VINCI Concessions subsidiary VINCI Highways completed the acquisition of all shares in Lamsac, which holds the concession for the Linea Amarilla toll expressway in Lima, Peru due to run until November 2049. Lamsac has been fully consolidated in VINCI's consolidated financial statements since that date.

Provisional determination of assets and liabilities acquired at the date of acquiring control

(in € millions)
Assets and liabilities acquired	Fair value
Concession intangible and operating fixed assets	1,737
Property, plant and equipment	8
Other non-current financial assets	44
Total non-current assets	1,789
Trade and other operating receivables	16
Cash and cash equivalents	62
Total current assets	79
Provisions and other non-current liabilities	6
Bond debt and other financial debt	532
Deferred tax liabilities	242
Total non-current liabilities	780
Current borrowings	31
Trade payables and other current liabilities	43
Total current liabilities	74
Net assets acquired	1,014
Acquisition-date fair value of the total consideration transferred	1,273
Provisional goodwill	259

Provisional goodwill, as shown in the table above, represents the future economic benefits that VINCI expects to derive from the acquisition of Lamsac. It has been allocated to the VINCI Highways business segment.

Lamsac made a €2 million contribution to Group revenue, a €5 million negative contribution to Group operating income from ordinary activities and a €3 million negative contribution to Group net income in 2016.

For full-year 2016, on the basis of the same assumptions as those retained at the acquisition date, Lamsac would have generated revenue of €79 million, an operating loss from ordinary activities of €2 million and a net loss of €10 million (unaudited figures).

2.2 Acquisition of Aerodom

On 8 April 2016, VINCI Airports completed the acquisition of all shares in Aeropuertos Dominicanos Siglo XXI SA (Aerodom), the company that holds a concession contract with the government of the Dominican Republic to operate six airports in the country until March 2030. Aerodom has been fully consolidated in VINCI's consolidated financial statements since that date.

Provisional determination of assets and liabilities acquired at the date of acquiring control

(in € millions)
Assets and liabilities acquired	Fair value
Concession intangible and operating fixed assets	748
Property, plant and equipment	2
Other non-current financial assets	52
Deferred tax assets	11
Total non-current assets	813
Inventories and work in progress	2
Trade and other operating receivables	16
Cash and cash equivalents	29
Total current assets	47
Provisions and other non-current liabilities	5
Bonds	456
Deferred tax liabilities	202
Total non-current liabilities	663
Current provisions	22
Current borrowings	16
Trade payables and other current liabilities	15
Total current liabilities	53
Net assets acquired	144
Acquisition-date fair value of the total consideration transferred	411
Provisional goodwill	266

Provisional goodwill, as shown in the table above, represents the future economic benefits that VINCI expects to derive from the acquisition of Aerodom. It has been allocated to the VINCI Airports business segment.

Aerodom made a €95 million contribution to Group revenue, a €14 million contribution to Group operating income from ordinary activities and €20 million negative contribution to Group net income in 2016.

For full-year 2016, revenue, on the basis of the same assumptions as those retained at the acquisition date, Aerodom would have generated revenue of €134 million, operating income from ordinary activities of €26 million and a net loss of €22 million (unaudited figures).

2.3 Acquisition of Aéroports de Lyon

On 9 November 2016, the consortium made up of VINCI Airports, Caisse des Dépôts and Crédit Agricole Assurances completed the acquisition of a 60% stake in Aéroports de Lyon (ADL), which holds a concession contract under which it operates Lyon-Saint-Exupéry (commercial and freight aviation) and Lyon-Bron (business aviation) airports until 31 December 2047.

Since VINCI Airports controls the company that holds a 60% stake in Aéroports de Lyon, ADL has been fully consolidated in VINCI's consolidated financial statements since that date.

Provisional determination of assets and liabilities acquired at the date of acquiring control

(in € millions)
Assets and liabilities acquired	Fair value
Concession intangible and operating fixed assets	934
Other non-current financial assets	1
Deferred tax assets	14
Total non-current assets	949
Inventories and work in progress	1
Trade and other operating receivables	34
Cash and cash equivalents	46
Total current assets	81
Non-controlling interests	201
Provisions and other non-current liabilities	10
Loans and financial debt	174
Deferred tax liabilities	239
Total non-current liabilities	624
Current provisions	53
Current borrowings	1
Trade payables and other current liabilities	51
Total current liabilities	105
Net assets acquired	301
Acquisition-date fair value of the total consideration transferred	535
Provisional goodwill	234

Provisional goodwill, as shown in the table above, represents the future economic benefits that VINCI expects to derive from taking control of Aéroports de Lyon. It has been allocated to the VINCI Airports business segment.

Aéroports de Lyon made a €23 million contribution to Group revenue, a €2 million negative contribution to Group operating income from ordinary activities and a €1 million negative contribution to Group net income in 2016.

For full-year 2016, revenue, operating income from ordinary activities and net income, on the basis of the same assumptions as those retained at the acquisition date, would have been €172 million, €12 million and €5 million respectively (unaudited figures).

2.4 Acquisition of J&P Richardson

In February 2016, VINCI Energies completed the acquisition of all shares in Australian company J&P Richardson Industries Pty Limited, which is based in Queensland, Australia.

J&P Richardson Industries Pty Limited carries out engineering, installation and maintenance work relating to electricity and water distribution networks, telecoms networks and industrial processes.

The acquisition price was €62 million. The goodwill related to the J&P Richardson acquisition was provisionally measured at €54 million on the date the Group took control.

J&P Richardson Industries Pty Limited has been fully consolidated in VINCI's consolidated financial statements since February 2016.

2.5 Other acquisitions

In February 2016, Eurovia acquired Canadian rail works company Rail Cantech. This company, which is mainly present in the provinces of Quebec and Ontario, operates in the fields of engineering, construction and maintenance of national rail networks, urban transport networks and industrial sidings.

Rail Cantech has been fully consolidated in VINCI's consolidated financial statements since February 2016.

In July 2016, a Chilean company in which Eurovia owns a 50.10% stake, increased its stake in Bitumix CVV, which specialises in roadworks in the Biobio and Araucania regions of Chile, from 50% to 100%. It has production facilities in several cities in Chile and also in Los Angeles in the United States.

Bitumix CVV has been fully consolidated in VINCI's consolidated financial statements since July 2016.

In September 2016, VINCI Highway acquired a 30% stake in TollPlus, an American company that specialises in developing, implementing and maintaining electronic toll management and customer relations solutions. That stake strengthens VINCI's position in the electronic toll collection market.

TollPlus has been accounted for under the equity method in VINCI's consolidated financial statements since September 2016.

2.6 Acquisitions and disposals in previous periods

The main acquisitions in 2015 involved VINCI Energies (Orteng Engenharia e Sistemas and APX Intégration), VINCI Construction International Network (HEB Construction), VINCI (Constructora Conconcreto) and Soletanche Freyssinet (Grupo Rodio Kronsa).

In relation to these companies, VINCI assessed the fair value of the identifiable assets and liabilities acquired in accordance with IFRS 3 Amended. The values allocated to identifiable acquired assets and liabilities on the dates when control was acquired in 2015 were not adjusted materially in 2016. At 31 December 2016, the allocation of purchase prices resulted in the recognition of:

• €91 million of goodwill for Orteng Engenharia e Sistemas;

• €54 million of goodwill for HEB Construction.

Details of these transactions are provided in Note B.2 "Changes in consolidation scope" of the 2015 registration document.

C. Financial indicators by business line and geographical area

1. Information by operating segment

Based on the Group's organisational structure and internal reporting system, segment information is presented by business line.

The Group consists of two core businesses (Concessions and Contracting), which each consist of business lines.

Concessions

• VINCI Autoroutes: motorway concessions in France (ASF, Escota, Cofiroute, Arcour and Arcos).
• VINCI Airports: airport concessions in Portugal, France, Cambodia, Chile, the Dominican Republic and Japan.

• Other concessions: VINCI Highways (motorway and road infrastructure outside France), VINCI Railways (rail infrastructure) and VINCI Stadium (four stadiums in France, one in London).

Contracting

• VINCI Energies: industry, infrastructure, engineering and works, facilities management, and information and communication technology.

• Eurovia: building and maintenance of roads, motorways and railways, urban infrastructure, production of materials (asphalt mixes), quarries, and services.

• VINCI Construction: design and construction of buildings (residential and commercial property) and civil engineering infrastructure, specialised civil engineering and major projects.

VINCI Immobilier, whose business consists of property development (residential and commercial), reports directly to the VINCI holding company.

1.1 Information by business

The data below is for the Concessions business and each Contracting business line separately and is stated before elimination, at their own level, of transactions with the rest of the Group.

2016

		Contracting			VINCI
						Immobilier
		VINCI		VINCI		and holding
(in € millions)	Concessions	Energies	Eurovia	Construction	Total	companies	Eliminations	Total
Income statement
Revenue (*)	6,298	10,200	7,585	13,681	31,466	774	(466)	38,073
Concession subsidiaries' works revenue	722	-	-	-	-	-	(248) (**)	475
Total revenue	7,020	10,200	7,585	13,681	31,466	774	(713)	38,547
Operating income from ordinary activities	2,953	581	243	330	1,153	68	-	4,174
% of revenue (*)	46.9%	5.7%	3.2%	2.4%	3.7%	-	-	11.0%
Recurring operating income	3,031	542	240	273	1,055	82	-	4,167
Operating income	3,066	494	239	237	970	82	-	4,118
Cash flow statement
Cash flows from operations before tax and financing costs	4,302	626	416	539	1,581	83	-	5,966
% of revenue (*)	68.3%	6.1%	5.5%	3.9%	5.0%	-	-	15.7%
Depreciation and amortisation	1,335	113	230	320	664	4	-	2,003
Net increase/(decrease) in provisions and impairment	9	41	(1)	8	48	(6)	-	52
Operating investments (net of disposals)	(26)	(96)	(216)	(219)	(530)	(2)	-	(558)
Operating cash flow	2,842	418	132	83	633	312	-	3,787
Growth investments in concessions and PPPs	(822)	2	2	(21)	(17)	-	-	(839)
Free cash flow (after investments)	2,019	420	134	62	617	312	-	2,948
Balance sheet
Capital employed at 31/12/2016	29,354	2,590	795	79	3,465	764	-	33,583
of which investments in companies accounted for under the equity method	1,006	7	106	269	383	117	-	1,505
Net financial surplus (debt)	(28,515)	(420)	159	1,133	872	13,704	-	(13,938)

(*) Excluding concession subsidiaries' revenue derived from works carried out by non-Group companies.

(**) Intragroup revenue of the Contracting business derived from works carried out for the Group's concession operating companies.

2015

		Contracting		VINCI
(in € millions)	Concessions	VINCI Energies	Eurovia	VINCI Construction	Total	Immobilier and holding companies	Eliminations	Total
Income statement
Revenue (*)	5,804	10,180	7,899	14,491	32,570	707	(562)	38,518
Concession subsidiaries' works revenue	882	-	-	-	-	-	(239) (**)	643
Total revenue	6,686	10,180	7,899	14,491	32,570	707	(802)	39,161
Operating income from ordinary activities	2,576	568	233	299	1,100	82	-	3,758
% of revenue (*)	44.4%	5.6%	3.0%	2.1%	3.4%	-	-	9.8%
Recurring operating income	2,627	538	237	292	1,067	94	-	3,788
Operating income	2,627	527	224	247	998	90	-	3,715
Cash flow statement
Cash flows from operations before tax and financing costs	3,933	597	432	536	1,565	166	-	5,664
% of revenue (*)	67.8%	5.9%	5.5%	3.7%	4.8%	-	-	14.7%
Depreciation and amortisation	1,338	113	230	348	691	4	-	2,033
Net increase/(decrease) in provisions and impairment	32	5	8	16	30	(1)	-	61
Operating investments (net of disposals)	(29)	(104)	(193)	(292)	(589)	(6)	-	(624)
Operating cash flow	2,381	465	415	228	1,108	408	-	3,898
Growth investments in concessions and PPPs	(917)	2	(1)	13	14	-	-	(903)
Free cash flow (after investments)	1,464	467	414	242	1,122	408	-	2,995
Balance sheet
Capital employed at 31/12/2015	26,247	2,581	757	(7)	3,331	554	-	30,132
of which investments in companies accounted for under the equity method	871	6	110	308	424	109	-	1,404
Net financial surplus (debt)	(23,551)	(472)	174	1,332	1,034	10,081	-	(12,436)

(*) Excluding concession subsidiaries' revenue derived from works carried out by non-Group companies.

(**) Intragroup revenue of the Contracting business derived from works carried out for the Group's concession operating companies.

1.2 Information relating to the Concessions business

2016

		Concessions
	VINCI	VINCI	Other
(in € millions)	Autoroutes	Airports	concessions	Total
Income statement
Revenue (*)	5,111	1,055	131	6,298
Concession subsidiaries' works revenue	679	43	-	722
Total revenue	5,790	1,098	132	7,020
Operating income from ordinary activities	2,588	368	(3)	2,953
% of revenue (*)	50.6%	34.8%	-2.0%	46.9%
Recurring operating income	2,629	443	(42)	3,031
Operating income	2,629	443	(6)	3,066
Cash flow statement
Cash flows from operations before tax and financing costs	3,710	563	29	4,302
% of revenue (*)	72.6%	53.3%	22.0%	68.3%
Depreciation and amortisation	1,146	177	12	1,335
Net increase/(decrease) in provisions and impairment	(47)	12	44	9
Operating investments (net of disposals)	(9)	(7)	(9)	(26)
Operating cash flow	2,259	434	149	2,842
Growth investments in concessions and PPPs	(686)	(127)	(9)	(822)
Free cash flow (after investments)	1,573	306	140	2,019
Balance sheet
Capital employed at 31/12/2016	21,598	5,655	2,101	29,354
of which investments in companies accounted for under the equity method	-	918	87	1,006
Net financial surplus (debt)	(22,309)	(4,295)	(1,910)	(28,515)

(*) Excluding concession subsidiaries' revenue derived from works carried out by non-Group companies.

2015

		Concessions
	VINCI	VINCI	Other
(in € millions)	Autoroutes (**)	Airports	concessions (**)	Total
Income statement
Revenue (*)	4,871	820	112	5,804
Concession subsidiaries' works revenue	746	93	42	882
Total revenue	5,617	914	155	6,686
Operating income from ordinary activities	2,350	289	(64)	2,576
% of revenue (*)	48.2%	35.3%	-56.6%	44.4%
Recurring operating income	2,341	320	(34)	2,627
Operating income	2,341	320	(35)	2,627
Cash flow statement
Cash flows from operations before tax and financing costs	3,522	412	-	3,933
% of revenue (*)	72.3%	50.2%	-0.1%	67.8%
Depreciation and amortisation	1,204	124	10	1,338
Net increase/(decrease) in provisions and impairment	(9)	5	36	32
Operating investments (net of disposals)	(10)	(3)	(15)	(29)
Operating cash flow	2,139	298	(55)	2,381
Growth investments in concessions and PPPs	(784)	(109)	(24)	(917)
Free cash flow (after investments)	1,355	188	(79)	1,464
Balance sheet
Capital employed at 31/12/2015	21,866	3,634	747	26,247
of which investments in companies accounted for under the equity method	-	706	164	871
Net financial surplus (debt)	(20,247)	(2,812)	(492)	(23,551)

(*) Excluding concession subsidiaries' revenue derived from works carried out by non-Group companies.

(**) 2015 figures adjusted following the transfer of Transjamaican Highway Ltd and Jamaican Infra Operator from VINCI Autoroutes to VINCI Concessions.

2. Breakdown of revenue by geographical area

Accounting policies

Consolidated revenue of the Concessions business is recognised in accordance with IAS 18 "Revenue" and IAS 11 "Construction Contracts". The method for recognising revenue under concession contracts is explained in Note F "Concession and PPP contracts". This revenue consists of:

• tolls for the use of motorway infrastructure operated under concession, revenue from airport service concessions, and ancillary income such as fees for the use of commercial installations, rental of telecommunications infrastructure and advertising space; and

• revenue in respect of the construction of new infrastructure under concession recognised on a stage of completion basis in accordance with IAS 11.

Consolidated revenue of the Contracting business (VINCI Energies, Eurovia and VINCI Construction) is recognised in accordance with IAS 11. It includes the total of the work, goods and services generated by the consolidated subsidiaries pursuing their main activity and the revenue for construction work on infrastructure under concession. The method for recognising revenue under construction contracts is explained in Note G.15 "Information on construction contracts".

In the French property sector, revenue arising on lots sold is recognised as the property development proceeds (in accordance with IFRIC 15 "Agreements for the Construction of Real Estate" and statutory provisions relating to off-plan sales).

(in € millions)	2016	%	2015	%
France	22,418	58.9%	22,414	58.2%
United Kingdom	2,495	6.6%	2,679	7.0%
Germany	2,689	7.1%	2,703	7.0%
Central and Eastern Europe (*)	1,611	4.2%	1,884	4.9%
Portugal	701	1.8%	617	1.6%
Other European countries	2,176	5.7%	2,082	5.4%
Europe (**)	32,089	84.3%	32,379	84.1%
of which European Union	31,291	82.2%	31,594	82.0%
North America	1,471	3.9%	1,408	3.7%
Central and South America	1,020	2.7%	956	2.5%
Africa	1,319	3.5%	1,479	3.8%
Russia, Asia Pacific and Middle East	2,173	5.7%	2,295	6.0%
International excluding Europe	5,983	15.7%	6,139	15.9%
International excluding France	15,654	41.1%	16,104	41.8%
Revenue (***)	38,073	100.0%	38,518	100.0%

(*) Albania, Belarus, Bosnia-Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Moldova, Montenegro, Poland, Romania, Serbia, Slovakia, Slovenia and Ukraine. (**) Including the eurozone for €27,218 million (71.5% of total revenue) in 2016 and €27,044 million (S70.2% of total revenue) in 2015.

(***) Excluding concession subsidiaries' revenue derived from works carried out by non-Group companies.

Revenue arising outside France amounted to €15,654 million in 2016, down 2.8% from 2015. It accounted for 41.1% of revenue excluding concession subsidiaries' revenue derived from works carried out by non-Group companies (41.8% in 2015).

3. Detail of capital employed and breakdown by geographical area

Reconciliation between capital employed and the balance sheet

(in € millions)	Note	31/12/2016	31/12/2015
Capital employed – Assets
Concession intangible assets	12	26,691	23,915
- Deferred tax on business combination fair value adjustments		(1,975)	(1,694)
Goodwill, gross	9	8,346	7,485
Other intangible assets		409	387
Property, plant and equipment	16	4,468	4,241
Investments in companies accounted for under the equity method	10	1,505	1,404
Other non-current financial assets	11-13-17	1,602	1,745
- Collateralised loans and receivables (at more than one year)		-	(2)
- Derivative financial instruments (non-current assets)	23-25	(721)	(803)
Inventories and work in progress	18	935	964
Trade and other receivables	18	11,422	10,696
Other current operating assets	18	5,099	4,635
Other current non-operating assets		55	30
Current tax assets		167	365
Capital employed – Liabilities
Current provisions	18	(4,172)	(4,053)
Trade payables	18	(7,740)	(7,590)
Other current operating liabilities	18	(11,838)	(10,884)
Other current non-operating liabilities		(480)	(360)
Current tax liabilities		(190)	(351)
Total capital employed		33,583	30,132

Capital employed by geographical area

(in € millions)	31/12/2016	31/12/2015
France	25,876	25,100
Germany	184	221
United Kingdom	202	278
Portugal	2,656	2,758
Other European countries	766	705
Total Europe	29,685	29,061
North America	441	387
Central and South America	3,072	369
Africa	(33)	62
Russia, Asia, Pacific and Middle East	419	253
Total capital employed	33,583	30,132

Capital employed in the eurozone at 31 December 2016 was €29,453 million and made up almost 88% of the total (€28,736 million and 95% of the total in 2015).

D. Main income statement items

4. Operating income

Accounting policies

Operating income from ordinary activities measures the operational performance of fully consolidated Group subsidiaries before taking into account share-based payment expense (IFRS 2). It also excludes the share of the income or loss of companies accounted for under the equity method, and other recurring operating items and non-recurring items.

Recurring operating income is intended to present the Group's recurring operational performance excluding the impact of non-recurring transactions and events during the period. It is obtained by adding the impacts associated with share-based payments (IFRS 2), income/losses from companies accounted for under the equity method and other recurring operating income and expense to operating income from ordinary activities.

Goodwill impairment losses and other material non-recurring operating items, including gains or losses on the disposal of shares and the impact of remeasuring equity interests at fair value when changes of control take place, are recognised under operating income. Operating income is therefore obtained by adding income and expenses regarded as non-recurring to recurring operating income.

(in € millions)	2016	2015
Revenue (*)	38,073	38,518
Concession subsidiaries' revenue derived from works carried out by non-Group companies	475	643
Total revenue	38,547	39,161
Revenue from ancillary activities (**)	130	160
Purchases consumed	(8,074)	(8,531)
External services	(4,989)	(4,670)
Temporary staff	(999)	(998)
Subcontracting (including concession operating companies' construction costs)	(7,869)	(8,598)
Taxes and levies	(1,088)	(1,086)
Employment costs	(9,557)	(9,536)
Other operating income and expense on activity	59	67
Depreciation and amortisation	(2,003)	(2,033)
Net provision expense	15	(178)
Operating expenses	(34,503)	(35,563)
Operating income from ordinary activities	4,174	3,758
% of revenue (*)	11.0%	9.8%
Share-based payments (IFRS 2)	(118)	(95)
Profit/(loss) of companies accounted for under the equity method	69	89
Other recurring operating items	42	36
Recurring operating income	4,167	3,788
Goodwill impairment losses	(52)	(8)
Impact from changes in scope and gain/(loss) on disposals of shares	34	(27)
Other non-recurring operating items	(31)	(38)
Total non-recurring operating items	(49)	(73)
Operating income	4,118	3,715

(*) Excluding concession subsidiaries' revenue derived from works carried out by non-Group companies.

(**) Revenue from ancillary activities mainly comprises rental income, sales of equipment, materials and merchandise, study work and fees other than those generated by concession operators.

Other recurring operating items include financial income from shareholders loans and advances granted by the Group to certain associates, along with the impact of changes in indexation clauses used to measure provisions for obligations to maintain the condition of infrastructure under concession.

Non-recurring operating items include, in 2016, the gain on selling the remaining interest in Infra Foch Topco (the holding company that owns Indigo, formerly known as VINCI Park), restructuring costs in France and a partial write-down of goodwill in VINCI Energies' subsidiaries in Brazil following a review of medium-term business prospects in that country.

In 2015, non-recurring items related mainly to the impact of divestments, impairment losses and restructuring costs, principally in France.

4.1 Other operating income and expense from ordinary activities

(in € millions)	2016	2015
Net gains or losses on disposal of property, plant and equipment and intangible assets	62	42
Share in operating income or loss of joint operations	22	23
Other	(25)	2
Total	59	67

4.2 Depreciation and amortisation

Depreciation and amortisation break down as follows:

(in € millions)	2016	2015
Concession intangible assets	(1,088)	(1,096)
Intangible assets	(39)	(45)
Property, plant and equipment	(876)	(891)
Depreciation and amortisation	(2,003)	(2,033)

Amortisation of concession intangible assets includes the full-year impact of the motorway stimulus plan in France, implemented in the second half of 2015, which caused the duration of motorway concession contracts in France to be extended.

5. Cost of net financial debt

Accounting policies

The cost of net financial debt includes:

• the cost of gross financial debt, which includes the interest expense calculated at the effective interest rate, and gains and losses on interest rate derivatives allocated to gross financial debt whether designated as hedges for accounting purposes or not; and

• financial income from investments, which comprises the return on investments of cash and cash equivalents measured at fair value through profit and loss.

The cost of net financial debt amounted to €526 million in 2016 compared with €557 million in 2015, a decrease of €31 million. The decrease was mainly the result of:

• the impact of lower rates on floating rate debt;
• the refinancing, during 2016, of debt maturing in 2015 and 2016 on more favourable market terms.

The cost of net financial debt in 2016 can be analysed as follows:

(in € millions)	2016	2015
Financial liabilities at amortised cost	(676)	(689)
Financial assets and liabilities at fair value through profit and loss	25	43
Derivatives designated as hedges: assets and liabilities	132	97
Derivatives at fair value through profit and loss: assets and liabilities	(7)	(8)
Total cost of net financial debt	(526)	(557)

The "Derivatives designated as hedges: assets and liabilities" item breaks down as follows:

(in € millions)	2016	2015
Net interest on derivatives designated as fair value hedges	201	181
Change in value of derivatives designated as fair value hedges	(95)	(116)
Change in value of the adjustment to fair value hedged financial debt	95	116
Reserve recycled through profit or loss in respect of cash flow hedges	(69)	(84)
of which recycling in fair value of derivative instruments hedging cash flows	(25)	(39)
Ineffective portion of cash flow hedges	-	-
Gains and losses on derivative instruments allocated to net financial debt	132	97

6. Other financial income and expense

Accounting policies

Other financial income and expense comprises mainly discounting effects, the impact of capitalised borrowing costs, foreign exchange gains and losses relating to financial items and changes in the value of derivatives not allocated to hedging interest rate or exchange rate risk.

Capitalised borrowing costs relate to infrastructure under concession and are included during the construction period in the value of those assets. They are determined as follows:

• to the extent that funds are borrowed specifically for the purpose of constructing an asset, the borrowing costs eligible for capitalisation on that asset are the actual borrowing costs incurred during the period less any investment income arising from the temporary investment of those borrowings;

• when borrowing is not intended to finance a specific project, the interest eligible for capitalisation on an asset is determined by applying a capitalisation rate to the expenditure on that asset. This capitalisation rate is equal to the weighted average of the costs of borrowing funds for construction work, other than those specifically intended for the construction of given assets.

This does not relate to the construction of concession assets accounted for using the financial asset model (see Note F.13 "PPP financial receivables").

Other financial income and expense break down as follows:

(in € millions)	2016	2015
Effect of discounting to present value	(66)	(49)
Borrowing costs capitalised	36	23
Foreign exchange gains and losses	(6)	1
Total other financial income and expense	(35)	(24)

The effect of discounting to present value relates to provisions for retirement benefit obligations for €33 million in 2016 (€35 million in 2015) and to provisions for the obligation to maintain the condition of concession assets for €21 million in 2016 (€11 million in 2015).

In 2016, capitalised borrowing costs related in particular to the ASF group for €27 million (€22 million in 2015) and Arcos for €7 million.

7. Income tax expense

Accounting policies

Income tax is computed in accordance with the tax legislation in force in the countries where the income is taxable.

In accordance with IAS 12, deferred tax is recognised on the temporary differences between the carrying amount and the tax base of assets and liabilities. It is calculated using the latest tax rates enacted or substantively enacted at the accounts closing date. The effects of a change in the tax rate from one period to another are recognised in the income statement in the period in which the change occurs, except where they relate to transactions recognised under other comprehensive income or directly in equity.

Deferred tax relating to share-based payments (IFRS 2) is taken to income to the extent that the deductible amount does not exceed the fair value of plans established according to IFRS 2.

Whenever subsidiaries have distributable reserves, a deferred tax liability is recognised in respect of the probable distributions that will be made in the foreseeable future. Moreover, shareholdings in associates and certain joint ventures give rise to recognition of a deferred tax liability in respect of all the differences between the carrying amount and the tax base of the shares.

Net deferred tax is determined on the basis of the tax position of each entity or group of entities included in the tax group under consideration and is shown under assets or liabilities for its net amount per tax jurisdiction. Deferred tax is reviewed at each balance sheet date to take account in particular of the impact of changes in tax law and the prospect of recovery. Deferred tax assets are only recognised if their recovery is probable.

Deferred tax assets and liabilities are not discounted.

7.1 Breakdown of net tax expense

(in € millions)	2016	2015
Current tax	(1,312)	(1,120)
Deferred tax	170	66
of which temporary differences	147	84
of which losses carried forward	23	(18)
Total excluding non-recurring changes in deferred tax	(1,142)	(1,055)
Impact of non-recurring changes in deferred tax	129	-
Total	(1,013)	(1,055)

The net tax expense for the period, excluding non-recurring changes in deferred tax, comprises:

• a tax expense recognised by French subsidiaries for €914 million (€858 million in 2015), including €884 million at VINCI SA, the lead company in the tax consolidation group that comprises 999 subsidiaries (€795 million in 2015). This expense includes the contribution of 3% on dividend payments totalling €32 million (€30 million in 2015);

• a tax expense of €228 million for foreign subsidiaries (€197 million in 2015).

The Group's deferred tax position at 31 December 2016 has been revalued following the adoption of the 2017 Finance Act in France, which provides for a reduction in the corporate income tax rate from 33.33% to 28% for all companies from 2020. The impact on net income attributable to owners of the parent is €129 million.

7.2 Effective tax rate

The effective tax rate for the Group (excluding the Group's stakes in companies accounted for under the equity method) was 32.7% in 2016 excluding non-recurring changes in deferred tax, compared with 34.6% in 2015. The decrease was mainly due to France's 10.7% corporate income surtax, which had increased the rate to 38% in 2015, being discontinued in 2016.

The Group's effective tax rate for 2016 is slightly lower than the theoretical tax rate of 34.43% in force in France, because of some foreign subsidiaries being taxed at rates lower than the French rate. The difference between the tax calculated using the standard tax rate in force in France and the amount of tax effectively recognised in the period can be analysed as follows:

(in € millions)	2016	2015
Income before tax and income/(loss) of companies accounted for under the equity method	3,489	3,045
Theoretical tax rate in France	34.4%	38.0%
Theoretical tax expense expected	(1,201)	(1,157)
Impact of taxes due on income taxed at a lower rate in France	8	10
Tax rate differential on foreign income	94	61
Impact of tax loss carryforwards and other temporary differences that are not recognised or that have previously been subject to limitation	(3)	(27)
Goodwill impairment losses	(17)	(3)
Permanent differences and other	(22)	60
Tax expense recognised excluding non-recurring changes in deferred tax	(1,142)	(1,055)
Effective tax rate excluding non-recurring changes in deferred tax	32.7%	34.6%
Impact of non-recurring changes in deferred tax	129
Effective tax rate (*)	29.0%	34.6%

(*) Excluding the Group's share of companies accounted for under the equity method.

7.3 Breakdown of deferred tax assets and liabilities

		Changes
(in € millions)	31/12/2016	Profit or loss	Equity	Other	31/12/2015
Deferred tax assets
Losses carried forward	368	49	(1)	(3)	323
Temporary differences on retirement benefit obligations	394	(43)	36	4	397
Temporary differences on provisions	572	23	1	8	540
Temporary differences on financial instruments	89	1	(20)	-	107
Temporary differences related to finance leases	20	3	-	-	16
Other	424	20	18	43	343
Netting of deferred tax assets and liabilities by tax jurisdiction	(1,144)	-	-	(96)	(1,047)
Total deferred tax assets before impairment	724	54	35	(44)	679
Impairment	(497)	(94)	(6)	4	(401)
Total deferred tax assets after impairment	228	(39)	29	(40)	278
Deferred tax liabilities
Remeasurement of assets (*)	(2,514)	355	(10)	(581)	(2,279)
Temporary differences related to finance leases	(22)	-	-	-	(22)
Temporary differences on financial instruments	(33)	(3)	1	-	(30)
Other	(485)	(13)	(8)	(91)	(372)
Netting of deferred tax assets and liabilities by tax jurisdiction	1,144	-	-	96	1,047
Total deferred tax liabilities	(1,910)	339	(17)	(576)	(1,656)
Net deferred tax	(1,683)	299	12	(616)	(1,378)

(*) Including measurement at fair value of the assets and liabilities of ASF, Lamsac, Aéroports de Lyon and ANA at date of first consolidation: €1,228 million, €241 million, €216 million and €117 million respectively at 31 December 2016.

Deferred tax assets whose recovery is not probable are written down. They amounted to €497 million at 31 December 2016 (€401 million at 31 December 2015), including €441 million outside France (€332 million at 31 December 2015).

8. Earnings per share

Accounting policies

Basic earnings per share is the net income for the period after non-controlling interests, divided by the weighted average number of shares outstanding during the period less the weighted average number of treasury shares.

In calculating diluted earnings per share, the weighted average number of shares outstanding is adjusted for the potentially dilutive effect of all equity instruments issued by the company, in particular share subscription options and performance shares. The dilution resulting from the exercise of share subscription options and from performance shares is determined using the method defined in IAS 33. In accordance with this standard, plans of which the stock market price is greater than the average price during the period are excluded from the diluted earnings per share calculation.

In calculating basic and diluted earnings per share, earnings are also adjusted as necessary for changes in income and expenses taken directly to equity resulting from the conversion into shares of all potentially dilutive instruments.

The table below shows the reconciliation between basic and diluted earnings per share:

		2016			2015
	Average number of shares	Net income (in € millions)	Earnings per share (in €)	Average number of shares	Net income (in € millions)	Earnings per share (in €)
Total shares	593,324,563			595,424,717
Treasury shares	(38,549,755)			(41,444,909)
Basic earnings per share	554,774,808	2,505	4.52	553,979,808	2,046	3.69
Subscription options	1,601,098			2,129,991
Group savings plan	239,709			500,370
Performance shares	3,121,007			1,556,904
Diluted earnings per share	559,736,622	2,505	4.48	558,167,073	2,046	3.66

E. Investments in other companies

9. Goodwill and goodwill impairment tests

Accounting policies

Goodwill is the excess of the cost of a business combination over the Group's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities at the date of acquisition, recognised on first consolidation.

Goodwill in fully consolidated subsidiaries is recognised under goodwill in consolidated assets. Goodwill relating to companies accounted for under the equity method is included in the line item "Investments in companies accounted for under the equity method".

Goodwill is not amortised but is tested for impairment at least annually and whenever there is an indication that an impairment loss has arisen. Whenever a goodwill impairment loss arises, the difference between its carrying amount and its recoverable amount is charged irreversibly to operating income in the period.

Negative goodwill is recognised directly in profit or loss in the year of acquisition.

Following adoption of IFRS 3 Amended, an option is available to measure non-controlling interests on the acquisition date either at fair value (the full goodwill method) or for the portion of the net assets acquired that they represent (the partial goodwill method). The choice can be made for each business combination.

9.1 Main goodwill items

Changes in the period were as follows:

(in € millions)	31/12/2016	31/12/2015
Net at beginning of period	7,296	6,994
Goodwill recognised during the period	870	252
Impairment losses	(52)	(8)
Entities no longer consolidated	(3)	(2)
Currency translation differences	(1)	13
Other movements	3	47
Net at end of period	8,113	7,296

VINCI Airports' acquisition of control over Aerodom in the Dominican Republic and Aéroports de Lyon resulted in goodwill provisionally estimated at €287 million and €234 million respectively at 31 December 2016. The Group provisionally estimated the goodwill relating to its acquisition of Peruvian company Lamsac at €259 million.

In 2015, the main changes related to the acquisition of control over Orteng Engenharia e Sistemas by VINCI Energies and of HEB Construction by VINCI Construction International Network.

The main items of goodwill at 31 December 2016 were as follows:

		31/12/2015
(in € millions)	Gross	Impairment losses	Net	Net
VINCI Energies France	2,336	-	2,336	2,309
ASF group (*)	1,935	-	1,935	1,935
VINCI Airports	1,004	-	1,004	483
VINCI Energies Germany	537	-	537	527
VINCI Highways	265	-	265	-
VINCI Energies Benelux	264	-	264	264
Entrepose	201	-	201	201
Soletanche Bachy	171	-	171	171
VINCI Energies Australia – New Zealand	158	-	158	97
Nuvia	133	-	133	155
VINCI Energies Switzerland	133	-	133	126
ETF	108	-	108	108
VINCI Construction UK	154	(71)	83	97
VINCI Energies Scandinavia	81	-	81	84
Other goodwill	869	(161)	707	742
Total	8,346	(233)	8,113	7,296

(*) ASF and Escota.

9.2 Goodwill impairment tests

Accounting policies

In accordance with IAS 36 "Impairment of Assets", the goodwill and other non-financial assets of cash-generating units (CGUs) were tested for impairment losses at 31 December 2016.

CGUs are identified in line with operational reporting and their recoverable amounts are based on a value in use calculation. Values in use are determined by discounting the forecast operating cash flows before tax (operating income plus depreciation and amortisation plus/minus the change in non-current provisions minus operating investments plus/minus the change in operating working capital requirement) at the rates below.

For concessions, forecast cash flows are determined across the length of contracts by applying a variable discount rate, determined for each period depending on the debt to equity ratio of the entity in question.

For the other CGUs, projected cash flows are generally established for a five-year period on the basis of management forecasts. At the end of that period, a terminal value is determined by capitalising the final year's projected cash flow to infinity, and that value is discounted to present value.

Goodwill was tested for impairment losses using the following assumptions:

	Carrying		Impairment losses recognised in the period
	amount of				Discount rates
(in € millions)	goodwill 31/12/2016	Growth rate (years n+1 to n+5)	Growth rate (terminal value)	31/12/2016	31/12/2015	2016	2015
VINCI Energies France	2,336	1.8%	1.0%	8.7%	9.9%	-	-
ASF group	1,935	(*)	(*)	8.0%	8.1%	-	-
VINCI Airports	1,004	(*)	(*)	9.0%	8.6%	-	-
VINCI Energies Germany	537	2.4%	1.0%	6.4%	7.5%	-	-
VINCI Energies Benelux	264	1.1%	1.0%	7.8%	9.2%	-	-
Entrepose	201	6.1%	1.5%	9.3%	9.0%	-	-
Soletanche Bachy	171	4.1%	1.5%	9.5%	9.1%	-	-
VINCI Energies Australia – New Zealand	158	2.1%	3,0%	8.2%	9.7%	-	-
Other goodwill	1,508	-3% to 15%	1% to 5%	5.4% to 16.1%	6.5% to 19.4%	(52)	(8)
Total	8,113					(52)	(8)

(*) For concessions, cash flow projections are determined over the length of concession contracts.

The average revenue growth rate for the ASF group, based on the residual periods of contracts, is 1.4%.

The overall average revenue growth used for VINCI Airports is 3.9%.

In 2016, the economic and political situation in Brazil prompted the Group to revise the medium-term business prospects of VINCI Energies in that country and to partially write down goodwill on its local subsidiaries.

Sensitivity of the value in use of cash-generating units to the assumptions made

The following table shows the sensitivity of enterprise value to the assumptions made for the main goodwill items:

Sensitivity to discount and perpetual growth rates and to cash flows

			Sensitivity to rates		Sensitivity to cash flows
		Discount rate for cash flows		Perpetual growth rate for cash flows		Change in forecast operating cash flows (before tax)
(in € millions)	0.5%	-0.5%	0.5%	-0.5%	5.0%	-5.0%
VINCI Energies France	(281)	320	248	(217)	237	(237)
ASF group	(860)	910	(*)	(*)	1,224	(1,225)
VINCI Airports	(608)	679	(*)	(*)	484	(484)
VINCI Energies Germany	(226)	273	227	(189)	136	(136)
VINCI Energies Benelux	(49)	57	46	(39)	36	(36)
Entrepose	(38)	43	33	(29)	30	(30)
Soletanche Bachy	(153)	175	135	(118)	131	(130)
VINCI Energies Australia – New Zealand	(23)	28	23	(19)	13	(13)

(*) Forecasts of cash flows are determined over the residual periods of the concession contracts.

These sensitivity calculations show that a change of 50 basis points in the assumptions for discount and perpetual growth rates or a +/-5% change in projected operating cash flows would not have a material impact on the results of impairment tests or, therefore, on the Group's consolidated financial statements at 31 December 2016.

10. Investments in companies accounted for under the equity method: associates and joint ventures

Accounting policies

Investments in companies accounted for under the equity method are initially recognised at the cost of acquisition, including any goodwill arising, and acquisition costs. Their carrying amount is then increased or decreased to recognise the Group's share of the entity's profits or losses after the date of acquisition. Whenever losses are greater than the value of the Group's net investment in the equity-accounted company, those losses are not recognised unless the Group has entered into a commitment to recapitalise the company or provide it with funding. The share of the negative net equity of companies accounted for under the equity method arising from decreases in the fair value of financial hedging instruments may therefore be presented under provisions for financial risks.

If there is an indication that an impairment loss has arisen, the investment's recoverable amount is tested in a way similar to that described in Note E.9.2 "Goodwill impairment tests". Impairment losses shown by these impairment tests are recognised as a deduction from the carrying amount of the corresponding investments.

In order to present business lines' operational performance in the best way possible, the income or loss of companies accounted for under the equity method is reported on a specific line between the "Operating income from ordinary activities" and "Recurring operating income" lines.

10.1 Movements during the period

		2016			2015
(in € millions)	Associates	Joint ventures	Total	Associates	Joint ventures	Total
Value of shares at beginning of period	1,187	217	1,404	1,094	215	1,309
of which Concessions	762	109	871	772	73	845
of which Contracting	421	87	508	318	106	424
of which VINCI Immobilier	4	20	25	4	36	40
Increase in share capital of companies accounted for under the equity method	9	167	176	90	41	131
Group share of profit or loss for the period	55	14	69	70	19	89
Group share of other comprehensive income for the period	13	12	26	13	46	60
Dividends paid	(36)	(58)	(94)	(70)	(55)	(125)
Changes in consolidation scope and other	(118)	(10)	(127)	-	(13)	(12)
Reclassifications (*)	(27)	80	53	(11)	(37)	(48)
Value of shares at end of period	1 083	423	1,505	1,187	217	1,404
of which Concessions	686	320	1,006	762	109	871
of which Contracting	393	83	476	421	87	508
of which VINCI Immobilier	4	20	24	4	20	25

(*) Reclassifications of shares in the negative net equity of equity-accounted companies under provisions for financial risks.

At 31 December 2016, the Group's interests in associates included, for the Concessions business, the stake in the Aéroports de Paris group (€683 million) and, for the Contracting business, the stake in the CFE group (€207 million).

Changes in the Group's interests in 2016 mainly concern the Concessions business and relate to changes in the consolidation scope during the year, including:

• the disposal of the remaining stake in Infra Foch Topco (associates);

• the creation of Kansai Airports to take over the concession contracts for Kansai and Osaka airports in Japan (joint ventures).

Impacts included under "Group share of other comprehensive income for the period" relate mainly to cash flow and interest rate hedging transactions on concession and public-private partnership projects.

10.2 Aggregated financial information

The contribution of equity-accounted companies to the Group's consolidated comprehensive income is as follows:

	2016				2015
(in € millions)	Associates (*)	Joint ventures	Total	Associates	Joint ventures	Total
Net income	55	14	69	70	19	89
of which Concessions	31	18	49	38	7	45
of which Contracting	24	(21)	3	32	(1)	31
of which VINCI Immobilier	-	16	16	-	13	13
Other comprehensive income	13	12	26	13	46	60
of which Concessions	7	20	26	11	47	58
of which Contracting	6	(7)	(1)	2	-	2
Comprehensive income	68	26	94	84	65	149
of which Concessions	38	38	76	49	53	103
of which Contracting	30	(28)	2	34	(2)	33
of which VINCI Immobilier	-	16	16	-	13	13

(*) Including Infra Foch TopCo until the date of sale of remaining stake.

The revenue of companies accounted for under the equity method breaks down as follows (data reflecting the Group's share):

	2016			2015
(in € millions)	Associates	Joint ventures	Total	Associates	Joint ventures	Total
Income statement
Revenue (*)	1,302	1,711	3,012	1,414	1,180	2,594
of which Concessions	763	654	1,417	838	170	1,008
of which Contracting	536	897	1,433	573	843	1,416
of which VINCI Immobilier	3	160	163	3	167	170

(*) Excluding works revenue related to concession activities.

In accordance with IAS 28, the Group's recognition of its share of losses at associates and joint ventures is limited to its liabilities. At 31 December 2016, losses thus unrecognised amounted to €89 million (€71 million at 31 December 2015).

The main features of concession and PPP contracts are given in Note F.14 "Concession and PPP contracts of companies accounted for under the equity method". The list of companies accounted for under the equity method is given in Note O "Other information on the consolidation scope".

10.3 Commitments made in respect of associates and joint ventures

At 31 December 2016, Group funding commitments to equity-accounted companies (via capital or subordinated loans) amounted to €333 million (€453 million at 31 December 2015). They mainly concern the funding commitment made by the Group to Via 40 Express, the company holding the concession for the motorway between Bogota and Girardot in Colombia, for €138 million at 31 December 2016, and the funding commitment made to LISEA, the company holding the concession for the high-speed rail line between Tours and Bordeaux, for €113 million at 31 December 2016 (€113 million at 31 December 2015).

The funding used in April 2016 to set up Kansai Airports explains most of the decrease in these commitments during the year (commitments of €229 million at 31 December 2015).

Collateral security has also been granted in the form of pledges of shares in companies accounted for under the equity method. The net carrying amount of the shares pledged at 31 December 2016 was €48 million and mainly related to shares in SCN Pudahuel (company holding the concession for Santiago airport in Chile) for €37 million and SMTPC (the holder of the concession for the Prado Carénage road tunnel in Marseille) for €10 million.

The Group has also granted collateral security in the form of cash deposits relating to the SEA Tours–Bordeaux HSL project for €135 million.

10.4 Investment commitments given by associates and joint ventures

At 31 December 2016, the Group's share of investment commitments given by these companies amounted to €1,142 million (€1,401 million at 31 December 2015).

They relate mainly to projects involving infrastructure under construction in the Concessions business, including the new sections 7 and 8 of the M11 motorway between Moscow and St Petersburg (€422 million), Santiago airport in Chile (€338 million) and the Regina Bypass in Canada (€174 million).

The decrease in these investment commitments in 2016 reflects progress with works carried out as part of concession projects, particularly at Olympia Odos in Greece, LISEA and the Regina Bypass in Canada.

10.5 Controlled subsidiaries' transactions with associates and joint ventures

The financial statements include certain commercial transactions between controlled subsidiaries and associates and joint ventures. The main transactions are as follows:

		31/12/2016	31/12/2015
(in € millions)	Associates	Joint ventures	Total	Associates	Joint ventures	Total
Revenue (*)	96	838	934	55	1,145	1,200
Trade receivables	78	105	183	42	233	274
Purchases	4	27	30	9	37	46
Trade payables	1	8	9	3	11	14

(*) In 2016, revenue included in particular revenue from activity carried out by Contracting entities on behalf of LISEA, the holder of the concession for the high-speed rail line between Tours and Bordeaux.

11. Available-for-sale financial assets

Accounting policies

At the balance sheet date, available-for-sale securities are measured at their fair value. The fair value of shares in listed companies is determined on the basis of the stock market price at the relevant balance sheet date. For unlisted securities, if their fair value cannot be determined reliably, the securities continue to be measured at their original cost, i.e. their cost of acquisition plus transaction costs.

Changes in fair value are recognised in other comprehensive income.

Whenever there is an objective indication that such an asset is impaired, the corresponding loss is recognised in profit or loss and may not be reversed.

• For securities quoted on an active market, a long-lasting or material decline in fair value below their cost is an objective indication of their impairment. The factors considered by the Group in assessing the long-lasting or material nature of a decline in fair value are generally the following:

• the impairment loss is long-lasting whenever the closing stock market price has been lower than the cost of the security for more than 18 months;

• the impairment loss is material whenever, at the balance sheet date, there has been a 30% fall in the current market price compared with the cost of the financial asset.

• For unlisted securities, the factors considered are the decrease in value of the share of equity held and the absence of prospects for generating profits.

At 31 December 2016, available-for-sale assets included the unlisted shareholdings of subsidiaries that do not meet VINCI's minimum financial criteria for consolidation. They are presented on the asset side of the consolidated balance sheet under "Other non-current financial assets" along with "PPP financial receivables" and "Loans and receivables":

(in € millions)	31/12/2016	31/12/2015
Available-for-sale financial assets	134	96
PPP financial receivables (*)	215	202
Loans and receivables (*)	531	644
Other non-current financial assets	881	942

(*) Information relating to "PPP financial receivables" is provided in Note F.13 and information relating to "Loans and receivables" is provided in Note H.17.

During the period, the change in available-for-sale financial assets broke down as follows:

(in € millions)	2016	2015
Beginning of period	96	125
Acquisitions during period	54	11
Acquisitions as part of business combinations	1	4
Fair value adjustment recognised in equity	-	-
Impairment losses	(6)	(7)
Disposals during period	(1)	(1)
Other movements and currency translation differences	(10)	(36)
End of period	134	96

F. Concession and PPP contracts

Accounting policies

Under the terms of IFRIC 12 "Service Concession Arrangements", a concession operator has a twofold activity:

• a construction activity in respect of its obligations to design, build and finance a new asset that it delivers to the grantor: revenue is recognised on a stage of completion basis in accordance with IAS 11;

• an operating and maintenance activity in respect of concession assets: revenue is recognised in accordance with IAS 18.

In return for its activities, the operator receives remuneration from:

• users: the intangible asset model applies. The operator has a right to receive tolls (or other payments) from users in consideration for the financing and construction of the infrastructure. The intangible asset model also applies whenever the concession grantor remunerates the concession operator based on the extent of use of the infrastructure by users, but with no guarantees as to the amounts that will be paid to the operator (under a simple "pass through" or "shadow toll" agreement).

Under this model, the right to receive toll payments (or other remuneration) is recognised in the concession operator's balance sheet under "Concession intangible assets", net of any investment grants received. This right corresponds to the fair value of the asset under concession plus the borrowing costs capitalised during the construction phase. It is amortised over the term of the arrangement in a manner that reflects the pattern in which the concession asset's economic benefits are consumed by the entity, starting from the entry into service of the asset.

This treatment applies to most of the infrastructure concessions, in particular the motorway networks in France, the main airports managed by the Group and certain bridges.

• the grantor: the financial asset model applies. The operator has an unconditional contractual right to receive payments from the concession grantor, irrespective of the amount of use made of the infrastructure.

Under this model, the operator recognises a financial asset, attracting interest, in its balance sheet, in consideration for the services it provides (design and construction). Such financial assets are recognised in the balance sheet under "Other financial assets", in an amount corresponding to the fair value of the infrastructure on first recognition and subsequently at amortised cost. The receivable is settled by means of the grantor's payments received. The income calculated on the basis of the effective interest rate is recognised under operating income (revenue from ancillary activities).

In the case of bifurcated models, the operator is remunerated partly by users and partly by the grantor. The part of the investment that is covered by an unconditional contractual right to receive payments from the grantor (in the form of grants or rental) is recognised as a financial receivable up to the amount guaranteed. The unguaranteed balance, of which the amount is dependent on the extent of use of the infrastructure, is recognised under "Concession intangible assets".

The motorway concession companies ASF, Cofiroute, Escota, Arcour and Arcos, along with most of the Group's airport concession companies, use the straight-line method of depreciation.

12. Concession intangible assets

12.1 Breakdown of concession intangible assets

(in € millions)	VINCI Autoroutes	VINCI Airports	Other concessions	Total for the Concessions business	Other concession infrastructure	Total
Gross
01/01/2015	30,254	2,558	203	33,015	6	33,021
Acquisitions during period (*)	768	99	1	869	-	869
Disposals during period	(3)	(2)	-	(5)	-	(5)
Currency translation differences	-	32	-	32	-	32
Changes in scope and other	8	10	2	20	(6)	14
	31,028	2,697	206	33,931	-	33,931
Grants received	(8)	(2)	-	(10)	-	(10)
31/12/2015	31,020	2,695	206	33,921	-	33,921
Acquisitions during period (*)	713	104	4	822	-	822
Disposals during period	(3)	(2)	(2)	(7)	-	(7)
Currency translation differences	-	58	(2)	55	-	55
Changes in scope and other	(58)	1,314	1,745	3,001	-	3,001
	31,673	4,168	1,950	37,791	-	37,791
Grants received	(48)	-	-	(48)	-	(48)
31/12/2016	31,625	4,168	1,950	37,743	-	37,743
Amortisation and impairment losses
01/01/2015	(8,565)	(165)	(146)	(8,877)	(4)	(8,880)
Amortisation during period	(1,025)	(64)	(6)	(1,095)	(2)	(1,096)
Impairment losses	-	(1)	-	(1)	-	(1)
Reversals of impairment losses	-	1	-	1	-	1
Disposals during period	-	-	-	-	-	-
Currency translation differences	-	(12)	-	(12)	-	(12)
Other	(12)	(9)	(2)	(23)	5	(17)
31/12/2015	(9,602)	(250)	(154)	(10,006)	-	(10,006)
Amortisation during period	(979)	(101)	(7)	(1,086)	(1)	(1,088)
Impairment losses	-	(9)	-	(9)	-	(9)
Reversals of impairment losses	-	1	-	1	-	1
Disposals during period	-	-	2	2	-	2
Currency translation differences	-	(6)	-	(6)	-	(6)
Other	52	1	(2)	51	1	53
31/12/2016	(10,529)	(365)	(160)	(11,053)	-	(11,053)
Net
01/01/2015	21,689	2,393	57	24,139	2	24,141
31/12/2015	21,418	2,444	52	23,915	-	23,915
31/12/2016	21,096	3,804	1,791	26,691	-	26,691

(*) Including capitalised borrowing costs.

In 2016, acquisitions totalled €822 million (€869 million in 2015).

They include investments by the ASF group for €489 million (€662 million in 2015), by Cofiroute for €94 million (€76 million in 2015) and by VINCI Airports for €104 million (€97 million in 2015). The ASF group's investments included further work on the relief motorway for the A9 near Montpellier and the widening of the A63 motorway in the Basque Country.

The changes in the consolidation scope in 2016 mainly involve the integration of Lamsac, Aerodom and Aéroports de Lyon.

Concession intangible assets include assets under construction for €1,742 million at 31 December 2016 (€1,247 million at 31 December 2015). These relate to VINCI Autoroutes subsidiaries for €1,457 million (including ASF for €1,086 million, Escota for €192 million and Cofiroute for €122 million) and VINCI Airports subsidiaries for €284 million.

12.2 Main features of concession and PPP contracts – intangible asset model

The main features of contracts for concession and PPP contracts operated by controlled subsidiaries are as follows:

	Control and regulation of prices by concession grantor	Remuneration paid by	Grant or guarantee from concession grantor	Residual value	Concession end date
VINCI Autoroutes
ASF group
ASF 2,714 km of toll motorways (France)	Pricing law as defined in the concession contract. Price increases subject to agreement by grantor	Users	Nil	Infrastructure returned to grantor for no consideration at end of contract unless purchased before term by the grantor on the basis of the economic value	2036
Escota 471 km of toll motorways (France)	Pricing law as defined in the concession contract. Price increases subject to agreement by grantor	Users	Nil	Infrastructure returned to grantor for no consideration at end of contract unless purchased before term by the grantor on the basis of the economic value	2032
Cofiroute
Intercity network 1,100 km of toll motorways (France)	Pricing law as defined in the concession contract. Price increases subject to agreement by grantor	Users	Nil	Infrastructure returned to grantor for no consideration at end of contract unless purchased before term by the grantor on the basis of the economic value	2034
A86 Duplex 11 km toll tunnel west of Paris (France)	Pricing law as defined in the concession contract. Price increases subject to agreement by grantor	Users	Nil	Infrastructure returned to grantor for no consideration at end of contract unless purchased before term by the grantor on the basis of the economic value	2086
Arcour
A19 101 km of toll motorways (France)	Pricing law as defined in the concession contract. Price increases subject to agreement by grantor	Users	Investment grant	Infrastructure returned to grantor for no consideration at end of contract	2070
Arcos
A355 24 km of toll motorways (France)	Pricing law as defined in the concession contract. Price increases subject to agreement by grantor	Users	Nil	Infrastructure returned to grantor for no consideration at end of contract unless purchased before term by the grantor on the basis of the economic value	2070
VINCI Highways
Lamsac Linea Amarilla: 25 km toll expressway in Lima (Peru)	Pricing law as defined in the concession contract. Price increases subject to agreement by grantor	Users	Nil	Infrastructure returned to grantor for no consideration at end of contract	2049
VINCI Airports
ANA 10 airports in Portugal	Regulated air tariffs; unregulated non-air revenue	Users, airlines	Nil	Infrastructure returned to grantor for no consideration at end of contract	2063
Cambodia Airports Phnom Penh, Siem Reap and Sihanoukville airports (Cambodia)	Pricing law as defined in the concession contract. Price increases subject to agreement by grantor	Users, airlines	Nil	Infrastructure returned to grantor for no consideration at end of contract	2040
Grand Ouest airports concession company (France) Airport near Nantes	Regulated air tariffs. Unregulated non-air revenue	Users, airlines	Investment grant agreed under the concession contract for the construction of the new airport	Infrastructure returned to grantor for no consideration at end of contract	2065
Aerodom Six airports in Dominican Republic	Regulated air tariffs. Unregulated non-air revenue	Users, airlines	Nil	Infrastructure returned to grantor for no consideration at end of contract	2030
Aéroports de Lyon Lyon Saint Exupéry and Lyon Bron airports	Regulated air tariffs. Unregulated non-air revenue	Users, airlines	Nil	Infrastructure returned to grantor for no consideration at end of contract	2047

	Control and regulation of prices by concession grantor	Remuneration paid by	Grant or guarantee from concession grantor	Residual value	Concession end date
Other concessions
Consortium Stade de France 80,000 seats	Nil	Organiser of events and/or final customer + miscellaneous revenue	Investment grant + compensation for absence of resident club (currently suspended)	Infrastructure returned to grantor for no consideration at end of contract	2025

12.3 Commitments made under concession contracts – intangible asset model

Contractual investment, renewal or financing obligations

(in € millions)	31/12/2016	31/12/2015
ASF group	1,716	2,312
Cofiroute	985	1,102
Arcos – company holding the concession for the western Strasbourg bypass	523	-
Grand Ouest airports concession company	366	367
ANA Group	166	109
Lamsac	136	-
Aéroports de Lyon (ADL)	85	-
Other	19	25
Total	3,997	3,914

Contractual capital investment obligations for motorway concession companies (ASF group, Cofiroute) relate mainly to undertakings as part of multi-year master plans and the motorway stimulus plan implemented in the second half of 2015. Progress with investments made by the ASF group and Cofiroute during the year led to a €713 million reduction in their commitments.

The increase in commitments arose mainly from investments to be made under new concession contracts, particularly the western Strasbourg bypass project led by Arcos (€523 million), the Lima ring road project in Peru led by Lamsac (€136 million) and Aéroports de Lyon (€85 million).

The above amounts do not include obligations relating to maintenance expenditure on infrastructure under concession, for which provisions are set aside (see Note H.18.3 "Breakdown of current provisions").

Collateral security connected with the financing of concessions

Some concession operating companies have given collateral security to guarantee the financing of their investments in infrastructure under concession. These break down as follows:

(in € millions)	Start date	End date	Amount
Arcour	2008	2045	583
Aerodom	2016	2019	383
Aéroports de Lyon (ADL)	2016	2032	225
Other concession operating companies			16

13. PPP financial receivables (controlled companies)

13.1 Movements during the period and maturity schedule

PPP financial receivables related to concession and PPP contracts managed by the Group are presented on the consolidated balance sheet for their part at more than one year, under the "Other non-current financial assets" item, which also includes "Loans and receivables" and "Available-for-sale financial assets" (see Note E.11 "Available-for-sale financial assets").

Changes in PPP financial receivables during the period and their breakdown by maturity are as follows:

(in € millions)	2016	2015
Beginning of period	202	175
Acquisitions during period	35	82
Acquisitions as part of business combinations	-	3
Impairment losses	-	-
Redemptions	(20)	(64)
Other movements and currency translation differences	(1)	6
End of period	215	202
Of which:
Between 1 and 5 years	76	75
Over 5 years	140	127

In 2016, the increase in PPP financial receivables mainly concerns the public-private partnership contract for the creation of the new building for France's Institute for Radiological Protection and Nuclear Safety (IRSN) in the Hauts de Seine region of France, which is held by PPP Prisme, a subsidiary of VINCI Construction.

The increase in PPP financial receivables in 2015 concerned mainly the Caraibus public-private partnership contract in Martinique; the construction phase of the infrastructure under concession was completed during 2015.

The part at less than one year of PPP financial receivables is included in the balance sheet under "Other current financial assets". At 31 December 2016, it amounted to €16 million (€11 million at 31 December 2015).

13.2 Main features of concession and PPP contracts – financial asset and/or bifurcated model

The main features of concession and PPP contracts operated by controlled subsidiaries (financial asset and/or bifurcated model) are as follows:

	Control and regulation of prices by concession grantor	Remuneration paid by	Grant or guarantee from concession grantor	Residual value	Concession end date	IFRIC 12 accounting model
Caraibus: Bus rapid transit system (Martinique)	Annual fee paid by grantor (with no traffic level risk)	Grantor	Nil	Infrastructure returned to grantor for no consideration at end of contract	2035	Financial asset
MMArena Le Mans stadium (France)	Pricing schedule approved by grantor	Ticket + miscellaneous revenue	Investment grant and operating grant ( in the absence of a resident club)	Infrastructure returned to grantor for no consideration at end of contract	2043	Bifurcated: intangible asset and financial asset
Park Azur Car rental firm business complex at Nice-Côte d'Azur airport (France)	Rent paid by car rental companies as set out in the concession contract and guaranteed by the grantor	Grantor and car rental companies Sale of photovoltaic electricity	Investment grant and operating grant	Infrastructure returned to grantor for no consideration at end of contract	2040	Bifurcated: intangible asset and financial asset

13.3 Commitments made under concession and PPP contracts – financial asset and/or bifurcated model

Contractual investment, renewal or financing obligations

Under their concession and PPP contracts, certain Group subsidiaries undertake to make investments. Where the financial asset or bifurcated model applies, they receive a guarantee of payment from the concession grantor in return for their investment commitment. At 31 December 2016, the Group's investment commitments with respect to concession and PPP contracts under the financial asset or bifurcated models amounted to €4 million (€33 million at 31 December 2015).

Collateral security connected with the financing of PPPs

Some companies have given collateral security to guarantee the financing of their investments relating to infrastructure under concession. This collateral amounts to €71 million at 31 December 2016, including Park Azur for €36 million and MMArena (Le Mans stadium) for €34 million.

14. Concession and PPP contracts of companies accounted for under the equity method

14.1 Main features of concession and PPP contracts of companies accounted for under the equity method

The features of the main or new concession or public-private partnership contracts operated by companies accounted for under the equity method are shown below:

	Control and regulation of prices by concession grantor	Remuneration paid by	Grant or guarantee from concession grantor	Residual value	Concession end date	IFRIC 12 Accounting model
	Motorway and road infrastructure (including bridges and tunnels) outside France
A5 Malsch–Offenburg A-Modell (60 km to be renovated, including 41.5 km to be widened to 2x3 lanes) (Germany)	Inflation-linked price increases based on the 2009 toll level (excluding increases decided by the grantor). Effect of environmental regulations on prices (with traffic level risk)	Heavy vehicle users through the tolls levied by the grantor	Nil	Infrastructure returned to grantor for no consideration at end of contract	2039	Intangible asset
Moscow–St Petersburg motorway section 1 First section (43.2 km ) of M11 motorway between Moscow and St Petersburg (Russia)	Pricing law as defined in the concession contract. Price increases possible subject to a price limit (with traffic level risk)	Users	Investment grant	Infrastructure returned to grantor for no consideration at end of contract	2040	Intangible asset
Moscow–St Petersburg motorway sections 7 and 8 Sections 7 and 8 (138 km) of M11 motorway between Moscow and St Petersburg (Russia)	Annual fee paid by grantor (with no traffic level risk)	Grantor	Investment grant	Infrastructure returned to grantor for no consideration at end of contract	2041	Financial asset
Olympia Odos Toll motorway connecting Elefsina, Corinth and Patras (Greece)	Pricing law as defined in the concession contract. Price increases possible subject to a price limit (with traffic level risk)	Users	Investment grant	Infrastructure returned to grantor for no consideration at end of contract	2038	Intangible asset
Via Express 40
Design, financing, construction, operation and maintenance of 141 km of toll motorways, including construction of a third lane over 65 km (Colombia)	Pricing law as defined in the concession contract. Price increases possible subject to a price limit (with traffic level risk)	Users	Nil	Infrastructure returned to grantor for no consideration at end of contract	2042	Intangible asset
Granvia (R1 Expressway) (Slovakia)	Annual fee paid by grantor (with no traffic level risk)	Grantor	Nil	Infrastructure returned to grantor for no consideration at end of contract	2041	Financial asset
Ohio River Bridges East End Crossing Bridge over the Ohio River and access tunnel (USA)	Annual fee paid by grantor (with no traffic level risk)	Grantor	Investment grant	Infrastructure returned to grantor for no consideration at end of contract	2051	Financial asset
Regina Bypass 61 km dual carriageway around Regina (Canada)	Annual fee paid by grantor (with no traffic level risk)	Grantor	Investment grant	Infrastructure returned to grantor for no consideration at end of contract	2049	Financial asset
Hounslow Rehabilitation and maintenance of roadways, traffic signs and lighting (UK)	Fee paid by grantor (with no traffic level risk)	Grantor	Investment grant	Infrastructure returned to grantor for no consideration at end of contract	2037	Financial asset
Isle of Wight Rehabilitation and maintenance of roadways, traffic signs and lighting (UK)	Annual fee paid by grantor (with no traffic level risk)	Grantor	Investment grant	Infrastructure returned to grantor for no consideration at end of contract	2038	Financial asset

	Control and regulation of prices by concession grantor	Remuneration paid by	Grant or guarantee from concession grantor	Residual value	Concession end date	IFRIC 12 Accounting model
Airports
Kansai Airports Kansai and Osaka airports (Japan)	Regulated air tariffs; unregulated non-air revenue	Users, airlines	Nil	Infrastructure returned to grantor for no consideration at end of contract	2060	Intangible asset
Arturo Merino Benítez International airport, Santiago de Chile	Pricing law as defined in the concession contract. Price increases possible subject to a price limit (with traffic level risk)	Users, airlines	Nil	Infrastructure returned to grantor for no consideration at end of contract	2035	Intangible asset
Railway infrastructure
LISEA South Europe Atlantic high-speed rail line High-speed rail link between Tours and Bordeaux (302 km) (France)	Inflation-linked price increases (with traffic level risk)	Pricing law as defined in the concession contract (on the basis of train kilometre and slot kilometre)	Investment grant paid by the concession grantor and local authorities	Infrastructure returned to grantor for no consideration at end of contract	2061	Bifurcated model: intangible asset and financial asset

14.2 Commitments made under concession and PPP contracts of companies accounted for under the equity method

The commitments made under concession and PPP contracts of companies accounted for under the equity method are presented in Note E.10.3 "Commitments made in respect of associates and joint ventures".

G. Construction contracts (VINCI Energies, Eurovia, VINCI Construction)

15. Information on construction contracts

Accounting policies

The Group recognises construction contract income and expenses using the stage of completion method defined by IAS 11. For the VINCI Construction business line, the stage of completion is usually determined on a physical basis. For the other business lines (Roads and Energy), it is determined on the basis of the percentage of total costs incurred to date.

If the estimate of the final outcome of a contract indicates a loss, a provision is made for the loss on completion regardless of the stage of completion, based on the best estimates of income, including, if need be, any rights to additional revenue or claims if these are probable and can be reliably estimated. Provisions for losses on completion are shown under liabilities.

Part payments received under construction contracts before the corresponding work has been carried out are recognised under liabilities under advances and payments on account received.

15.1 Financial information on construction contracts

Costs incurred net of intermediate invoicing plus profits recognised less losses recognised are determined on a contract-by-contract basis. If for a given contract this amount is positive, it is shown on the line "Construction contracts in progress – assets". If negative, it is shown on the line "Construction contracts in progress – liabilities".

(in € millions)	31/12/2016	31/12/2015
Balance sheet data
Advances and payments on account received	(797)	(690)
Construction contracts in progress – assets	2,474	2,145
Construction contracts in progress – liabilities	(2,819)	(2,745)
Construction contracts in progress – net	(345)	(600)
Total income and expenses to date recognised on contracts in progress
Costs incurred plus profits recognised less losses recognised to date	51,024	53,733
Less invoices issued	(51,369)	(54,332)
Construction contracts in progress – net	(345)	(600)

15.2 Commitments made and received in connection with construction contracts

The Group manages an order book. In accepting orders, it makes commitments to carry out work or render services. In connection with these contracts, the Group makes and receives guarantees (personal sureties).

The amount of the guarantees given below consists mainly of guarantees on contracts for work being performed, issued by financial institutions or insurers.

Moreover, Group companies benefit from guarantees issued by financial institutions at the request of the joint contractors or subcontractors (guarantees received).

	31/12/2016		31/12/2015
(in € millions)	Guarantees given	Guarantees received	Guarantees given	Guarantees received
Performance guarantees and performance bonds	5,051	772	4,797	600
Retentions	3,447	560	3,048	528
Deferred payments to subcontractors and suppliers	1,582	495	1,603	547
Bid bonds	212	-	163	9
Total	10,292	1,828	9,610	1,684

Whenever events such as late completion or disputes about the execution of a contract make it likely that a liability covered by a guarantee will materialise, a provision is taken in respect of that liability.

In general, under the rules in force, any risk of loss in connection with performance of a commitment given by VINCI or its subsidiaries would result in a provision being recognised in the Group's financial statements. VINCI therefore considers that the off-balance sheet commitments above are unlikely to have a material impact on the Group's financial position or net assets.

VINCI also grants after-sales service warranties covering several years in its normal course of business. These warranties lead to provisions estimated either on a statistical basis having regard to past experience or on an individual basis in the case of any major problems identified. These commitments are therefore not included in the above table.

Moreover, in connection with the construction of the future South Europe Atlantic high-speed rail line between Tours and Bordeaux, the Group has provided a joint and several guarantee and an independent first demand guarantee in favour of concession company LISEA under which the Group guarantees contract performance by the design and construction joint venture (GIE COSEA). Lastly, GIE COSEA has provided retention money on behalf of LISEA: it will remain in force until the end of a one-year period after acceptance of the infrastructure.

Joint and several guarantees covering unconsolidated partnerships (SNCs, Economic Interest Groupings, etc.)

Part of VINCI's business in the Construction and Roads business lines is conducted through unincorporated joint venture partnerships (SEPs), in line with industry practice. In partnerships, partners are legally jointly and severally liable for that entity's debts to non-Group companies, without limit. In this context, the Group may set up crossed counter guarantees with its partners.

Whenever the Group is aware of a particular risk relating to a joint venture partnership's activity, a provision is taken if this risk gives rise to an obligation for the Group that can only be extinguished through an outflow of resources.

The amount shown under off-balance sheet commitments in respect of joint and several guarantees is the Group's share of the liabilities of the partnerships in question less equity and financial debt (loans or current account advances) due to partners. That amount was €49 million at 31 December 2016 (€52 million at 31 December 2015), as opposed to total commitments of €129 million at 31 December 2016 (€128 million at 31 December 2015).

Given in particular the quality of its partners, the Group considers that the risk of its guarantee being invoked in respect of these commitments is negligible.

H. Other balance sheet items and business-related commitments

16. Property, plant and equipment and other intangible assets

16.1 Property, plant and equipment

Accounting policies

Items of property, plant and equipment are recorded at their acquisition or production cost net of investment grants received, less cumulative depreciation and any impairment losses. They are not revalued. They also include concession operating assets that are not controlled by the grantor but that are necessary for operation of the concession such as buildings intended for use in the operation, equipment for toll collection, signage, data transmission and video surveillance equipment, vehicles and other equipment.

Depreciation is generally calculated on a straight-line basis over the period of use of the asset. Accelerated depreciation may, however, be used when it appears more appropriate to the conditions under which the asset is used.

For certain complex assets comprising several components, in particular buildings and constructions, each component of the asset is depreciated over its own period of use. To reflect the consumption of economic benefits associated with the asset, quarries are depreciated as materials are extracted (volumes extracted during the period are compared with the estimated total volume of deposits to be extracted from the quarry over its useful life).

Investment property is property held to earn rentals or for capital appreciation. It is recorded at its acquisition cost less cumulative depreciation and any impairment losses.

The main periods of use of the various categories of items of property, plant and equipment are as follows:

Constructions:
- Structure	Between 20 and 50 years
- General technical installations	Between 5 and 20 years
Site equipment and technical installations	Between 3 and 12 years
Vehicles	Between 3 and 5 years
Fixtures and fittings	Between 8 and 10 years
Office furniture and equipment	Between 3 and 10 years

Depreciation commences as from the date when the asset is ready to enter service.

Assets acquired under finance leases are recognised as non-current assets whenever the effect of the lease is to transfer to the Group substantially all the risks and rewards incidental to ownership of these assets, with recognition of a corresponding financial liability. Assets held under finance leases are depreciated over their period of use.

	Concession		Constructions and
(in € millions)	operating fixed assets	Land	investment property	Plant, equipment and fixtures	Total
Gross
01/01/2015	3,495	849	1,085	6,662	12,091
Acquisitions as part of business combinations	-	25	16	109	150
Other acquisitions during period	108	22	164	534	829
Disposals during period	(40)	(17)	(34)	(558)	(650)
Currency translation differences	-	(1)	2	41	42
Changes in scope and other	14	(14)	(80)	165	84
31/12/2015	3,577	863	1,152	6,953	12,545
Acquisitions as part of business combinations	352	2	8	48	411
Other acquisitions during period	138	16	154	508	816
Disposals during period	(31)	(15)	(59)	(647)	(751)
Currency translation differences	14	-	(3)	3	14
Changes in scope and other	2	6	(95)	18	(68)
31/12/2016	4,052	873	1,158	6,883	12,966
Depreciation and impairment losses
01/01/2015	(2,109)	(269)	(575)	(4,822)	(7,775)
Depreciation during period	(211)	(19)	(46)	(615)	(891)
Impairment losses	-	(9)	(4)	(9)	(22)
Reversals of impairment losses	-	4	4	10	19
Disposals during period	38	7	18	508	571
Currency translation differences	-	-	(1)	(25)	(26)
Other movements	(9)	(5)	(13)	(152)	(179)
31/12/2015	(2,291)	(291)	(617)	(5,105)	(8,304)
Depreciation during period	(225)	(17)	(48)	(586)	(876)
Impairment losses	-	(12)	(3)	(2)	(17)
Reversals of impairment losses	-	2	13	3	17
Disposals during period	26	5	39	594	664
Currency translation differences	(1)	1	1	(5)	(4)
Other movements	(7)	(1)	(7)	38	22
31/12/2016	(2,497)	(314)	(624)	(5,063)	(8,498)
Net
01/01/2015	1,386	580	510	1,840	4,316
31/12/2015	1,286	572	534	1,849	4,241
31/12/2016	1,555	559	534	1,820	4,468

Property, plant and equipment include assets under construction for €248 million at 31 December 2016 (€222 million at 31 December 2015).

At 31 December 2016, assets acquired under finance leases amounted to €102 million (€103 million at 31 December 2015). They relate mainly to plant and equipment used in operations. The debts relating to these assets are shown in Note J.23.1 "Detail of long-term financial debt".

At 31 December 2016, the breakdown of property, plant and equipment by business was as follows:

			Contracting
(in € millions)	Concessions	VINCI Energies	Eurovia	VINCI Construction	Total	VINCI Immobilier and holding companies	Total
Concession operating fixed assets	1,553	-	-	2	2	-	1,555
Land	4	48	442	63	553	2	559
Constructions and investment property	6	129	199	194	522	7	534
Plant, equipment and fixtures	58	234	699	827	1,759	3	1,820
Total property, plant and equipment	1,620	410	1,340	1,086	2,836	12	4,468

16.2 Other intangible assets

Accounting policies

Other purchased intangible assets are measured at cost less amortisation and any cumulative impairment losses. Quarrying rights are amortised as materials are extracted (volumes extracted during the period are compared with the estimated total volume of deposits to be extracted from the quarry over its useful life) in order to reflect the decline in value due to depletion. Other intangible assets are amortised on a straight-line basis over their useful life.

At 31 December 2016, other intangible assets amounted to €409 million (€387 million at 31 December 2015). They include software for €69 million (€47 million at 31 December 2015) and patents, licences and other intangible assets for €340 million (€340 million at 31 December 2015).

Amortisation recognised during the period totalled €39 million (€45 million in 2015).

16.3 Impairment losses on property, plant and equipment and intangible assets

Accounting policies

Impairment tests are performed on property, plant and equipment and intangible assets where evidence of an impairment loss arises. For intangible assets with an indefinite useful life and construction work in progress, a test is performed at least annually and whenever there is an indication of an impairment loss.

Assets to be tested for impairment losses are grouped within cash-generating units (CGUs) that correspond to homogeneous groups of assets that generate identifiable cash inflows from their use.

In accordance with IAS 36, the criteria adopted to assess indications that an impairment loss has arisen are either external (e.g. a material change in market conditions) or internal (e.g. a material reduction in revenue), without distinction.

The Group did not recognise any material impairment losses on property, plant and equipment or intangible assets in either 2016 or 2015.

17. Loans and receivables

Accounting policies

When first recognised, loans and receivables are recognised at their fair value less the directly attributable transaction costs. At each balance sheet date, these assets are measured at their amortised cost using the effective interest method.

If there is an objective indication of an impairment loss affecting these loans and receivables, an impairment loss is recognised at the balance sheet date. That loss corresponds to the difference between the carrying amount and the recoverable amount (i.e. the present value of the expected cash flows discounted using the original effective interest rate), and is recognised in profit or loss. It may be reversed if the recoverable amount increases subsequently and if this favourable change can objectively be linked to an event arising after recognition of the impairment loss.

Loans and receivables at amortised cost mainly comprise receivables relating to shareholdings, including shareholders' advances to Concessions business or PPP project companies for €328 million (€285 million at 31 December 2015). They are presented on the asset side of the consolidated balance sheet under "Other non-current financial assets" (for the part at more than one year).

The part at less than one year of loans and receivables is included under "Other current financial assets" for €19 million at 31 December 2016 (€17 million at 31 December 2015).

Changes in loans and receivables at amortised cost during the period and their breakdown by maturity are as follows:

(in € millions)	2016	2015
Beginning of period	644	630
Acquisitions during period	214	99
Acquisitions as part of business combinations	-	66
Impairment losses	(15)	(11)
Disposals during period	(215)	(128)
Other movements and currency translation differences	(97)	(11)
End of period	531	644
Of which:
Between 1 and 5 years	294	316
Over 5 years	238	328

In 2016, the change in other loans and receivables related mainly to the integration of Kansai Airports (increase of €96 million), the sale of the remaining stake in Infra Foch Topco (decrease of €112 million) and the redemption by Pathé of bonds subscribed by the Group, on behalf of Foncière du Montout (the company leading the Parc Olympique Lyonnais project), for €43 million.

18. Working capital requirement and current provisions

Accounting policies

Trade receivables are current financial assets and are initially measured at their fair value, which is generally their nominal value, unless the effect of discounting is material. At each balance sheet date, trade receivables are measured at their amortised cost less any impairment losses taking account of any likelihood of non-recovery.

An estimate of the likelihood of non-recovery is made at each balance sheet date and an impairment loss is recognised if necessary. The likelihood of non-recovery is assessed in the light of payment delays and guarantees obtained.

Trade payables correspond to current financial liabilities and are initially measured at their fair value, which is usually their nominal value, unless the effect of discounting is material.

Inventories and work in progress are recognised at their cost of acquisition or of production by the entity. At each balance sheet date, they are measured at the lower of cost and net realisable value.

18.1 Change in working capital requirement

			Changes
(in € millions)	31/12/2016	31/12/2015	Changes in operating WCR	Other changes (*)
Inventories and work in progress (net)	935	964	(29)	-
Trade and other receivables	11,422	10,696	715	12
Other current operating assets	5,099	4,635	511	(47)
Inventories and operating receivables (I)	17,456	16,295	1,197	(36)
Trade payables	(7,740)	(7,590)	(146)	(4)
Other current operating liabilities	(11,838)	(10,884)	(1,042)	88
Trade and other operating payables (II)	(19,578)	(18,474)	(1,188)	84
Working capital requirement (excluding current provisions) (I + II)	(2,122)	(2,179)	9	48
Current provisions	(4,172)	(4,053)	(32)	(86)
of which part at less than one year of non-current provisions	(241)	(227)	(18)	4
Working capital requirement (including current provisions)	(6,294)	(6,232)	(23)	(38)

(*) Mainly currency translation differences and changes in consolidation scope.

18.2 Current operating assets and liabilities

Current operating assets and liabilities break down as follows:

		Maturity
			Within 1 year
(in € millions)	31/12/2016	1 to 3 months	3 to 6 months	6 to 12 months	Between 1 and 5 years	After 5 years
Inventories and work in progress (net)	935	404	65	87	377	2
Trade and other receivables	11,422	9,667	634	708	407	6
Other current operating assets	5,099	4,259	333	217	271	20
Inventories and operating receivables I	17,456	14,329	1,032	1,012	1,055	28
Trade payables	(7,740)	(7,025)	(272)	(172)	(269)	(2)
Other current operating liabilities	(11,838)	(10,108)	(607)	(604)	(424)	(95)
Trade and other operating payables II	(19,578)	(17,133)	(879)	(776)	(693)	(97)
Working capital requirement connected with I + II operations	(2,122)	(2,804)	153	236	362	(69)

					Maturity
				Within 1 year
(in € millions)		31/12/2015	1 to 3 months 3 to 6 months		6 to 12 months	Between 1 and 5 years	After 5 years
Inventories and work in progress (net)		964	435	50	77	390	12
Trade and other receivables		10,696	9,156	730	450	354	6
Other current operating assets		4,635	3,864	368	232	167	3
Inventories and operating receivables	I	16,295	13,456	1,148	759	910	21
Trade payables		(7,590)	(6,778)	(465)	(144)	(201)	-
Other current operating liabilities		(10,884)	(9,313)	(639)	(385)	(451)	(96)
Trade and other operating payables	II	(18,474)	(16,092)	(1,104)	(529)	(652)	(96)
Working capital requirement connected with operations	I + II	(2,179)	(2,636)	44	230	258	(75)

Breakdown of trade receivables

Trade receivables and allowances were as follows:

(in € millions)	31/12/2016	31/12/2015
Trade receivables invoiced	6,578	6,049
Allowances against trade receivables	(504)	(484)
Trade receivables, net	6,074	5,565

At 31 December 2016, trade receivables between six and 12 months past due amounted to €466 million (compared with €334 million at 31 December 2015). €62 million of impairment has been recognised in consequence (€31 million at 31 December 2015). Receivables more than one year past due amounted to €406 million (€361 million at 31 December 2015) and impairment of €271 million has been recognised in consequence (€239 million at 31 December 2015).

18.3 Breakdown of current provisions

Accounting policies

Current provisions are provisions directly linked to each business line's own operating cycle, whatever the expected time of settlement of the obligation. They are recognised in accordance with IAS 37. They also include the part at less than one year of provisions not directly linked to the operating cycle.

These provisions are recognised at their present value. The effect of discounting provisions is recognised under "Other financial income and expense".

Provisions are taken for contractual obligations to maintain the condition of concession assets, principally by the motorway concession operating companies to cover the expense of major road repairs (surface courses, restructuring of slow lanes, etc.), bridges, tunnels and hydraulic infrastructure. They also include expenses to be incurred by airport concession companies (repairs to runways, traffic lanes and other paved surfaces). Provisions are calculated on the basis of maintenance expense plans spanning several years, which are updated annually. These expenses are reassessed on the basis of appropriate indexes (mainly the TP01, TP02 and TP09 indexes in France). Provisions are also taken whenever recognised signs of defects are encountered on identified infrastructure.

Provisions for after-sales service cover Group entities' commitments under statutory warranties relating to completed projects, in particular the 10-year warranty on building projects in France. They are estimated statistically on the basis of expenses incurred in previous years or individually on the basis of specifically identified events.

Provisions for losses on completion of contracts and construction project liabilities are set aside mainly when end-of-contract projections, based on the most likely estimated outcome, indicate a loss, and those covering work yet to be carried out in respect of completed projects under completion warranties.

Provisions for disputes connected with operations relate mainly to disputes with customers, subcontractors, joint contractors or suppliers.

Restructuring provisions include the cost of plans and measures for which there is a commitment whenever these have been announced before the period end.

Provisions for other current liabilities comprise mainly provisions for other risks related to operations.

Changes in current provisions reported in the balance sheet were as follows in 2016 and 2015:

					Changes in consolidation	Change in the	Currency
		Provisions	Provisions		scope and	part at less than	translation
(in € millions)	Opening	taken	used	Other reversals	miscellaneous	one year	differences	Closing
01/01/2015	3,670	1,432	(1,132)	(144)	(17)	16	18	3,844
Obligation to maintain the condition of concession assets	758	89	(100)	(7)	1	-	3	744
After-sales service	379	118	(96)	(16)	(1)	-	4	387
Losses on completion and construction project liabilities	1,176	744	(687)	(36)	57	-	11	1,266
Disputes	508	185	(125)	(45)	8	-	1	532
Restructuring costs	39	31	(17)	(6)	5	-	-	51
Other current liabilities	736	360	(226)	(27)	1	-	3	847
Reclassification of the part at less than one year	247	-	-	-	(3)	(16)	(1)	227
31/12/2015	3,844	1,526	(1,251)	(137)	68	(16)	20	4,053
Obligation to maintain the condition of concession assets	744	105	(60)	(7)	28	-	3	812
After-sales service	387	122	(103)	(14)	(1)	-	(5)	386
Losses on completion and construction project liabilities	1,266	692	(672)	(33)	18	-	(6)	1,265
Disputes	532	179	(146)	(49)	(9)	-	(2)	505
Restructuring costs	51	25	(27)	(9)	2	-	-	42
Other current liabilities	847	401	(283)	(59)	18	-	(3)	920
Reclassification of the part at less than one year	227	-	-	-	(4)	18	-	241
31/12/2016	4,053	1,524	(1,291)	(171)	52	18	(13)	4,172

At 31 December 2016, contractual obligations to maintain the condition of concession assets mainly comprised €368 million for the ASF group (€381 million at 31 December 2015), €234 million for Cofiroute (€241 million at 31 December 2015), and €189 million for airport concessions (€106 million at 31 December 2015) including €74 million for the ANA group (€70 million at 31 December 2015).

Provisions for other current liabilities include provisions for worksite restoration and removal costs for €163 million (€131 million at 31 December 2015).

19. Non-current provisions

Accounting policies

Non-current provisions are recognised whenever, at the balance sheet date, the Group has a legal or constructive present obligation towards non-Group companies arising from a past event, whenever it is probable that an outflow of resources embodying economic benefits will be required to settle this obligation and whenever a reliable estimate can be made of the amount of the obligation. These provisions are measured at their present value, corresponding to the best estimate of the outflow of resources required to settle the obligation.

The part at less than one year of other employee benefits is reported under "Other current non-operating liabilities". The part at less than one year of provisions not directly linked to the operating cycle is reported under "Current provisions".

Detail of non-current provisions

Changes in other non-current provisions reported in the balance sheet (excluding employee benefits) were as follows in 2016 and 2015:

(in € millions) 01/01/2015	Opening 718	Provisions taken 186	Provisions used (142)	Other reversals not used (24)	Changes in consolidation scope and miscellaneous 232	Change in the part at less than one year (16)	Currency translation differences 3	Closing 956
Financial risks	674	54	(34)	(3)	(47)	-	-	644
Other liabilities	528	140	(119)	(13)	(4)	-	-	532
Reclassification of the part at less than one year	(247)	-	-	-	3	16	1	(227)
31/12/2015	956	194	(153)	(16)	(48)	16	1	949
Financial risks	644	58	(29)	(7)	(22)	-	-	643
Other liabilities	532	138	(100)	(83)	57	-	-	543
Reclassification of the part at less than one year	(227)	-	-	-	4	(18)	-	(241)
31/12/2016	949	195	(129)	(91)	39	(18)	(1)	945

Provisions for financial risks

Provisions for financial risks include the Group's share of the negative net equity of companies accounted for under the equity method. That negative net equity results from the measurement of interest rate derivative instruments (cash flow hedges) at fair value in the financial statements of the companies concerned.

Provisions for other liabilities

Provisions for other liabilities, not directly linked to the operating cycle, include provisions for disputes and arbitration, some of which are described in Note M "Note on litigation". These amounted to €543 million at 31 December 2016 (€532 million at 31 December 2015), including €352 million at more than one year (€349 million at 31 December 2015).

20. Other contractual obligations of an operational nature and other commitments given and received

Other contractual obligations of an operational nature and commitments given and received break down as follows:

20.1 Other contractual obligations of an operational nature

(in € millions)	31/12/2016	31/12/2015
Operating leases	1,230	1,191
Purchase and capital expenditure obligations (*)	459	403

(*) Excluding capital investment obligations related to concession and PPP contracts (see Notes F "Concession and PPP contracts").

Operating lease commitments amounted to €1,230 million at 31 December 2016 (€1,191 million at 31 December 2015). Of this, €778 million was for property (€783 million at 31 December 2015) and €452 million for movable items (€408 million at 31 December 2015).

The purchase and capital expenditure obligations mentioned above include mainly Eurovia's quarrying rights. These obligations relate mainly to Eurovia, VINCI Energies and VINCI Immobilier. The increase in 2016 includes VINCI's undertaking to acquire land in the Les Groues district of Nanterre as the site for the Group's future head office.

The breakdown by maturity of contractual obligations is as follows:

		Payments due by period
			Between
(in € millions)	Total	Within 1 year	1 and 5 years	After 5 years
Operating leases	1,230	433	687	109
Purchase and capital expenditure obligations (*)	459	277	140	42

(*) Excluding capital investment obligations related to concession and PPP contracts.

20.2 Other commitments made and received

(in € millions)	31/12/2016	31/12/2015
Collateral security	31	31
Other commitments made (received)	394	321

The collateral security mentioned above relates mainly to VINCI Energies and Eurovia.

The Group's off-balance sheet commitments are subject to specific reporting at each full-year and half-year closing. They are presented according to the activity to which they relate, in the corresponding notes.

Accordingly, the commitments made and received by the Group in connection with concession contracts, construction contracts and items connected with unrecognised retirement benefit obligations are shown in the following notes:

• E.10.3 "Commitments made in respect of associates and joint ventures";
• F.12.3 "Commitments made under concession contracts intangible asset model";
• F.13.3 "Commitments made under concession and PPP contracts financial asset and/or bifurcated model";
• G.15.2 "Commitments made and received in connection with construction contracts";
• K.27.1 "Provisions for retirement benefit obligations".

I. Equity

21. Information on equity

Capital management policy

In 2016, VINCI continued its purchases of own shares under the programme approved by the Shareholders' General Meeting held on 14 April 2015 and under the new programme approved by the Shareholders' General Meeting of 19 April 2016. The new programme is for a period of 18 months and relates to a maximum amount of purchases of €2 billion at a maximum share price of €80. In 2016, 8,699,360 shares were bought at an average price of €64.46, for a total of €561 million.

Treasury shares (see Note I.21.2 "Treasury shares") are allocated to financing external growth transactions and to covering performance share plans and the employer contributions to international employee share ownership plans. They may also be cancelled.

On 16 December 2016, VINCI SA cancelled 8 million treasury shares for €507 million.

VINCI's employee savings policy aims to make it easier for Group employees to become shareholders. At 31 December 2016, over 60% of the Group's employees were VINCI shareholders through unit funds invested in VINCI shares. Since those funds own 9.23% of the Company's shares, the Group's current and former employees form its largest group of shareholders.

Neither the Group's consolidated equity nor the equity of parent company VINCI SA is subject to any external constraints in the form of financial covenants.

21.1 Share capital

At 31 December 2016, the parent company's share capital was represented by 589,305,520 ordinary shares of €2.5 nominal value each.

The changes in the number of shares during the period were as follows:

	31/12/2016	31/12/2015
Number of shares at beginning of period	588,453,075	590,098,637
Increases in share capital	8,852,445	10,354,438
Cancelled treasury shares	(8,000,000)	(12,000,000)
Number of shares at end of period	589,305,520	588,453,075
Number of shares issued and fully paid	589,305,520	588,453,075
Nominal value of one share (in €)	2.5	2.5
Treasury shares held directly by VINCI	34,685,354	34,195,347
of which shares allocated to covering performance share plans and employee share ownership plans	5,522,399	4,906,899

The changes in capital during 2015 and 2016 break down as follows:

		Share premiums
	Increases	arising on
	(reductions)	contributions or	Number of shares
	in share capital	mergers	representing the
	(in €)	(in €)	share capital
01/01/2015	1,475,246,593	8,736,736,767	590,098,637
Group savings plan	17,675,140	292,190,175	7,070,056
Exercise of share subscription options	8,210,955	118,724,967	3,284,382
Cancelled treasury shares	(30,000,000)		(12,000,000)
31/12/2015	1,471,132,688	9,147,651,909	588,453,075
Group savings plan	14,890,160	312,952,787	5,956,064
Exercise of share subscription options	7,240,952	105,358,398	2,896,381
Cancelled treasury shares	(20,000,000)		(8,000,000)
31/12/2016	1,473,263,800	9,565,963,094	589,305,520

21.2 Treasury shares

Accounting policies

Treasury shares held by the Group are booked as a deduction from equity at their cost of acquisition. Any gains or losses connected with the purchase, sale or cancellation of treasury shares are recognised directly in equity without affecting the income statement.

Changes in treasury shares were as follows:

Number of shares at end of period	34,685,354	34,195,347
Cancelled treasury shares	(8,000,000)	(12,000,000)
Employer contribution in connection with the Castor International plan	(209,353)	(286,839)
Allocation of 2015 performance shares to employees		(500)
Allocation of 2014 performance shares to employees		(505)
Allocation of 2013 performance shares to employees		(1,913,455)
Purchases of shares	8,699,360	12,782,264
Number of shares at beginning of period	34,195,347	35,614,382
	31/12/2016	31/12/2015

At 31 December 2016, the total number of treasury shares held was 34,685,354. These were recognised as a deduction from consolidated equity for €1,580 million.

A total of 5,522,399 shares are allocated to covering long-term incentive plans and employee share ownership transactions, and 29,162,955 shares are intended to be used as payment in external growth transactions or to be sold.

21.3 Distributable reserves and statutory reserve

At 31 December 2016, VINCI SA's distributable reserves amounted to €29.4 billion (€25.8 billion at 31 December 2015) and its statutory reserve to €150 million (€150 million at 31 December 2015).

21.4 Amounts recognised directly in equity

		31/12/2016			31/12/2015
		Attributable to	Attributable to		Attributable to	Attributable to
(in € millions)		owners of the parent	non-controlling interests	Total	owners of the parent	non-controlling interests	Total
Available-for-sale financial assets
Reserve at beginning of period		2	-	2	2	-	2
Gross reserve before tax effect at balance sheet date	I	3	-	3	2	-	2
Cash flow and net investment hedges
Reserve at beginning of period		(916)	-	(916)	(1,068)	-	(1,068)
Changes in fair value of companies accounted for under the equity method		36	-	36	81	-	81
Other changes in fair value in the period		(35)	-	(36)	(13)	-	(13)
Items recognised in profit or loss		69	-	69	84	-	84
Changes in consolidation scope and miscellaneous		(1)	-	(1)	(1)	-	(1)
Gross reserve before tax effect at balance sheet date	II	(847)	(1)	(848)	(916)	-	(916)
of which gross reserve relating to companies accounted for under the equity method		(666)	-	(666)	(701)	-	(701)
Total gross reserve before tax effects (items that may be recycled to income)	I+II	(845)	(1)	(845)	(914)	-	(914)
Associated tax effect		270	-	271	295	-	295
Reserve net of tax (items that may be recycled to income)	III	(574)	(1)	(575)	(618)	-	(618)
Actuarial gains and losses on retirement benefit obligations
Reserve at beginning of period		(344)	-	(344)	(267)	-	(267)
Actuarial gains and losses recognised in the period		(149)	-	(149)	(105)	-	(105)
Associated tax effect		31	-	31	25	-	25
Changes in consolidation scope and miscellaneous		4	-	4	3	-	3
Reserve net of tax at end of period (items that may not be recycled to income)	IV	(458)	-	(458)	(344)	-	(344)
Total amounts recognised directly in equity	III+IV	(1,032)	(1)	(1,033)	(962)	-	(963)

The amounts recorded directly in equity relate to actuarial gains and losses on retirement benefit obligations, net investment hedging transactions (negative effect of €35 million) and cash flow hedging transactions (negative effect of €813 million). Transactions relating to the hedging of interest rate risk have a negative effect of €803 million, comprising:

• a negative effect of almost €142 million relating to fully consolidated companies, including VINCI Autoroutes (negative effect of €105 million). The maturity schedule relating to the reclassification of these amounts in income is presented in Note J.25.1.2 "Interest rate risk management – cash flow hedges";

• a negative effect of €662 million relating to companies accounted for under the equity method, mainly relating to LISEA (negative effect of €387 million) and other companies managing infrastructure projects on a PPP or concession basis.

These transactions are described in Note J.25.1.2 "Cash flow hedges".

21.5 Non-controlling interests

At 31 December 2016, non-controlling interests amounted to €541 million (€137 million at 31 December 2015).

22. Dividends

The dividend paid by VINCI SA to its shareholders in respect of 2016 and 2015 breaks down as follows:

	2016	2015
Dividend per share (in €)
Interim dividend	0.63	0.57
Final dividend	1.47	1.27
Net total dividend	2.10	1.84
Amount of dividend (in € millions)
Interim dividend	349	316
Final dividend	815 (*)	702
Net total dividend	1,164	1,018

(*) Estimate based on the number of shares giving rights to a dividend at 28 January 2017, i.e. 554,679,615 shares.

VINCI paid the final dividend in respect of 2015 on 28 April 2016 and an interim dividend in respect of 2016 on 10 November 2016.

The Shareholders' Ordinary General Meeting of 20 April 2017 will be asked to approve the overall dividend that will be paid in respect of 2016 (see Note N.31 "Appropriation of 2016 net income").

J. Financing and financial risk management

23. Net financial debt

Accounting policies

Bonds, other loans and financial debt are recognised at amortised cost using the effective interest method. The effective interest rate is determined after taking account of redemption premiums and issuance expenses. Under this method, the interest expense is measured actuarially and reported under the cost of gross financial debt.

The economic benefit of a loan at a significantly below-market rate of interest, which is the case in particular for project finance granted by public-sector organisations, is treated as a government grant and recognised as a reduction of the debt and the related investments, in accordance with IAS 20.

Certain financing contracts provide for early redemption options, for amounts that are always close to the amortised cost of the financial liabilities that are recognised as a result. Consequently, the Group does not recognise any derivative financial instrument separately from the original contracts.

The part at less than one year of borrowings is included in "Current borrowings".

At 31 December 2016, net financial debt, as defined by the Group, stood at €13.9 billion, up €1.5 billion compared with 31 December 2015. It breaks down as follows:

Analysis by					31/12/2016				31/12/2015
accounting			Non					Non
heading	(in € millions)	Note	current	Ref.	Current (*)	Ref.	Total	current	Current (*)	Total
	Bonds	23.1	(12,496)	(1)	(1,606)	(3)	(14,102)	(11,147)	(1,315)	(12,462)
	Other bank loans and other financial debt	23.1	(3,717)	(2)	(893)	(3)	(4,610)	(3,803)	(968)	(4,771)
	Finance lease debt	23.1	(52)	(2)	(26)	(3)	(78)	(51)	(26)	(77)
	Long-term financial debt (**)		(16,264)		(2,526)		(18,790)	(15,001)	(2,309)	(17,310)
Financial liabilities at	Commercial paper	24.2	-		(1,491)	(3)	(1,491)	-	(951)	(951)
amortised cost	Other current financial liabilities	24.1	-		(79)	(3)	(79)	-	(68)	(68)
	Bank overdrafts	24.1	-		(1,051)	(3)	(1,051)	-	(555)	(555)
	Financial current accounts, liabilities	24.1	-		(83)	(3)	(83)	-	(103)	(103)
	I - Gross financial debt		(16,264)		(5,229)		(21,494)	(15,001)	(3,986)	(18,987)
	of which impact of fair value hedges		(651)		(4)		(655)	(744)	(6)	(750)
Loans and receivables	Loans and collateralised financial receivables		-	(4)	-	(5)	-	2	-	2
	Financial current accounts, assets	24.1	-		30	(6)	30	-	82	82
Financial assets	Cash management financial assets	24.1	-		124	(6)	124	-	84	84
at fair value through profit	Cash equivalents	24.1	-		3,421	(7)	3,421	-	2,930	2,930
and loss	Cash	24.1	-		3,257	(7)	3,257	-	2,702	2,702
	II - Financial assets		-		6,832		6,832	2	5,798	5,800
	Derivative financial instruments – liabilities	25	(203)	(8)	(166)	(10)	(369)	(224)	(193)	(417)
Derivatives	Derivative financial instruments – assets	25	721	(9)	370	(11)	1,091	803	364	1,168
	III - Derivative financial instruments		519		204		723	579	172	751
	Net financial debt (I+II+III)		(15,745)		1,807		(13,938)	(14,420)	1,984	(12,436)
	Net financial debt breaks down by business as follows:
	Concessions		(26,749)		(1,766)		(28,515)	(22,804)	(746)	(23,551)
	Contracting		(2,696)		3,568		872	(3,135)	4,169	1,034
	Holding companies and VINCI Immobilier		13,700		5		13,704	11,520	(1,439)	10,081

(*) The current part includes accrued interest not matured.

(**) Including the part at less than one year.

Reconciliation of net financial debt with balance sheet items:

(in € millions)	Ref.	31/12/2016	31/12/2015
Bonds	(1)	(12,496)	(11,147)
Other loans and borrowings	(2)	(3,769)	(3,854)
Current borrowings	(3)	(5,229)	(3,986)
Non-current collateralised loans and receivables	(4)	-	2
Current collateralised loans and receivables	(5)	-	-
Cash management financial assets	(6)	154	166
Cash and cash equivalents	(7)	6,678	5,632
Derivative financial instruments – non-current liabilities	(8)	(203)	(224)
Derivative financial instruments – non-current assets	(9)	721	803
Derivative financial instruments – current liabilities	(10)	(166)	(193)
Derivative financial instruments – current assets	(11)	370	364
Net financial debt		(13,938)	(12,436)

Derivative financial instruments that are not designated as hedges for accounting purposes are reported as "derivative financial instruments – current assets" or "derivative financial instruments – current liabilities", whatever their maturity dates.

23.1 Detail of long-term financial debt by business

The breakdown of net long-term financial debt (including the part at less than one year) by business at 31 December 2016 was as follows:

		31/12/2016				31/12/2015
			Holding companies and VINCI				Holding companies and VINCI
(in € millions)	Concessions	Contracting	Immobilier	Total	Concessions	Contracting	Immobilier	Total
Bonds	(11,470)	-	(2,632)	(14,102)	(9,372)	-	(3,089)	(12,462)
Other bank loans and other financial debt	(4,506)	(112)	8	(4,610)	(4,649)	(132)	10 (*)	(4,771)
Finance lease debt	(2)	(76)	-	(78)	(1)	(76)	-	(77)
Long-term financial debt	(15,978)	(188)	(2,624)	(18,790)	(14,023)	(207)	(3,079)	(17,310)

(*) Net of arrangement commissions relating to the undrawn VINCI syndicated credit family, recognised as a reduction in debt.

At 31 December 2016, long-term financial debt amounted to €18.8 billion, up €1.5 billion relative to 31 December 2015 (€17.3 billion). The increase was due mainly to the following transactions:

• the integration of Aerodom, which has US dollar-denominated bond debt due to mature in 2019 with a value of €491 million at 31 December 2016, and of Lamsac, which has Peruvian sol-denominated bond debt due to mature in 2037 with a value of €359 million at 31 December 2016;

• ADL Participations's €149 million syndicated loan, in addition to the existing bank debt of Aéroports de Lyon for an amount of €172 million at 31 December 2016;

• new financing for the ASF group in an amount of €890 million, breaking down into an issue of €500 million of bonds maturing in May 2026 and with a coupon of 1% as part of its EMTN (Euro Medium Term Notes) programme, and a €390 million loan from the EIB (European Investment Bank) maturing in April 2033 to finance the relief motorway for the A9 near Montpellier;

• new financing for Cofiroute amounting to €1.3 billion through a bond issue as part of its EMTN programme, split equally (€650 million each) between bonds maturing in February 2025 with a coupon of 0.375% and bonds maturing in September 2028 with a coupon of 0.75%;

• repayments made in April, July and November 2016 in relation to Caisse Nationale des Autoroutes (CNA), CNA/EIB and EIB loans, i.e. €735 million paid by ASF, along with €500 million paid by VINCI Holding in April 2016 and €500 million paid by Cofiroute in October 2016 in relation to bond issues.

Details of the Group's main financial debts are given in the tables below:

Concessions

	31/12/2016				31/12/2015
		Contractual interest		Capital remaining	Carrying	of which accrued interest	Capital remaining	Carrying
(in € millions)	Currency	rate	Maturity	due	amount	not matured	due	amount
Bonds I				10,653	11,470	251	8,500	9,372
ASF group				6,792	7,517	187	6,289	7,022
of which:
ASF 2011 bond issue	€	4.0%	September 2018	500	519	5	500	526
ASF 2009 bond issue and supplement	€	7.4%	March 2019	970	1,049	56	970	1,066
ASF 2010 bond issue and supplement	€	4.1%	April 2020	650	739	19	650	751
ASF 2007 bond issue	€	5.6%	July 2022	1,575	1,824	44	1,575	1,838
ASF 2013 bond issue	€	2.9%	January 2023	700	782	19	700	769
ASF 2014 bond issue	€	3.0%	January 2024	600	612	17	600	617
ASF 2016 bond issue	€	1.0%	May 2026	500	495	3	-	-
Cofiroute				3,011	3,089	57	2,211	2,350
of which:
2001 bond issue and supplement in 2005	€	5.9%	October 2016	-	-	-	500	514
2003 bond issue	€	5.3%	April 2018	600	626	21	600	629
2006 bond issue and supplement in 2007	€	5.0%	May 2021	1100	1,194	33	1,100	1,196
2016 bond issue	€	0.4%	February 2025	650	645	1	-	-
2016 bond issue	€	0.8%	September 2028	650	614	2	-	-
VINCI Airports				491	497	6
of which Aerodom 2012	\$	9.8%	November 2019	491	497	6
Other concessions				359	367	-
of which Lamsac 2012	PEN	inflat.	June 2037	256	264	-
of which Lamsac 2012	PEN	8,6 %	June 2037	104	103	-
Other bank loans and other financial debt II				4,491	4,506	69	4,607	4,649
ASF group				2,290	2,321	59	2,634	2,691
CNA loans				1,282	1,339	52	1,698	1,769
of which:
ASF - CNA 2001	€	inflat.	July 2016	-	-	-	416	425
ASF and Escota - CNA 2002	€	5.3%	January 2017	532	558	26	532	557
ASF - CNA 2004 to 2005	€	4.5%	March 2018	750	782	26	750	786
CNA/EIB loans				138	129	6	427	427
EIB loans Credit facilities				771 100	757 96	1	409 100	400 95
						-
Cofiroute				897	900	7	949	955
Arcour				580	560		587	565
of which Arcour 2008	€	E6M	March 2018	387	386	-	391	390
VINCI Airports				599	598	2	308	308
of which ADL group (Aéroports de Lyon)				321	319	1
Other concessions				125	127	1	130	130
Finance lease debt III				2	2	-	1	1
Long-term financial debt I+II+III				15,146	15,978	320	13,108	14,023

Holding companies

		31/12/2016					31/12/2015
(in € millions) Bonds I	Currency	Contractual interest rate	Maturity	Nominal remaining due 2,484	Carrying amount 2,632	of which accrued interest not matured 61	Nominal remaining due 2,919	Carrying amount 3,089
VINCI SA				2,484	2,632	61	2,919	3,089
of which:
2013 bond issue	€	E3M	April 2016	-	-	-	500	500
2011 bond issue and supplement in 2012	€	4.1%	February 2017	1,000	1,038	36	1,000	1,056
2012 bond issue	€	3.4%	March 2020	750	806	19	750	810
Other bank loans and other financial debt II				-	(8)	-	-	(10)
VINCI SA (*)				-	(8)	-	-	(10)
Long-term financial debt I+II				2,484	2,624	61	2,919	3,079

(*) Net of arrangement commissions relating to the undrawn VINCI syndicated credit facility, recognised as a reduction in debt.

Breakdown of long-term financial debt by currency

At 31 December 2016, 91% of the Group's long-term financial debt was denominated in euros. Debts in foreign currency of companies of which the functional currency is the euro (mainly VINCI and ASF) have been hedged at their time of issue and do not generate any exposure to exchange rate risk. Generally, the Group's activities in foreign countries are financed in the local currency.

23.2 Net financial debt maturity schedule

On the basis of interest rates at 31 December 2016, the Group's debt and associated interest payments break down as follows, by maturity date:

		31/12/2016
	Carrying	Capital and		Between 1 and	Between 2 and
(in € millions)	amount	interest	Within 1 year	2 years	5 years	After 5 years
Bonds		payments
Capital	(14,102)	(13,137)	(1,266)	(1,129)	(4,498)	(6,245)
Interest payments	-	(2,759)	(543)	(498)	(1,018)	(701)
Other bank loans and other financial debt
Capital	(4,610)	(4,605)	(824)	(1,477)	(713)	(1,591)
Interest payments	-	(305)	(102)	(63)	(63)	(77)
Finance lease debt
Capital	(78)	(78)	(26)	(17)	(29)	(6)
Interest payments	-	(5)	(2)	(1)	(1)	-
Long-term financial debt	(18,790)	(20,889)	(2,763)	(3,184)	(6,323)	(8,619)
Commercial paper	(1,491)	(1,491)	(1,491)	-	-	-
Other current financial liabilities	(79)	(79)	(79)	-	-	-
Bank overdrafts	(1,051)	(1,051)	(1,051)	-	-	-
Financial current accounts, liabilities	(83)	(83)	(83)	-	-	-
Financial debt I	(21,494)	(23,593)	(5,466)	(3,184)	(6,323)	(8,619)
Financial assets II	6,832 (*)
Derivative financial instruments – liabilities	(369)	43	(3)	14	18	14
Derivative financial instruments – assets	1,091	1,204	245	237	470	252
Derivative financial instruments III	723	1,247	241	251	488	266
Net financial debt I+II+III	(13,938)

(*) Of which €6.8 billion at less than three months, consisting mainly of €3.4 billion of cash equivalents and €3.3 billion of cash (see Note J.24.1 "Net cash managed").

At 31 December 2016, the average maturity of the Group's long-term financial debt was 5 years (4.6 years at 31 December 2015). The average maturity was 5.5 years in Concession subsidiaries, 3.1 years for the Contracting business and 2 years for holding companies and VINCI Immobilier.

23.3 Credit ratings and financial covenants

Credit ratings

On 26 May 2016, credit rating agency Moody's raised its long-term credit rating on the Group by one notch, from Baa1 to A3 and its short-term rating from P2 to P1.

At 31 December 2016, the Group's credit ratings were:

			Rating
	Agency	Long term	Outlook	Short term
VINCI SA	Standard & Poor's	A-	Stable	A2
	Moody's	A3	Stable	P1
ASF	Standard & Poor's	A-	Stable	A2
	Moody's	A3	Stable	P1
Cofiroute	Standard & Poor's	A-	Stable	A2

Financial covenants

Some financing agreements include early repayment clauses applicable in the event of non-compliance with financial ratios. The main clauses are described below:

(in € millions)	Finance agreements	Ratios (*)	Thresholds	Ratios at 31/12/2016
ASF	CNA (Caisse nationale des	Consolidated net financial debt/Consolidated Ebitda	< or = 7	4.2
	autoroutes) loans	Consolidated Ebitda/Consolidated financing costs	> 2.2	7.9

(*) Ebitda = gross operating income defined as the difference between operating income and operating expenses excluding depreciation, amortisation and provisions.

The above ratios were all met at 31 December 2016.

Some finance agreements entered into by Group entities provide that a change in control of the borrower may constitute a case for mandatory early redemption or trigger a demand for early repayment.

24. Net cash managed and available resources

Accounting policies

Cash and cash equivalents comprise current accounts at banks and short-term liquid investments subject to negligible risks of fluctuations of value. Cash equivalents include money-market UCITS and certificates of deposit with maturities not exceeding three months at the origin. Bank overdrafts are not included in cash and are reported under current financial liabilities. Changes in the fair value of these instruments are recognised directly in profit or loss.

"Cash management financial assets" comprises investments in money market securities and bonds, and units in UCITS, made with a short-term management objective, that do not satisfy the IAS 7 criteria for recognition as cash. They are measured and recognised at their fair value. Changes in value are recognised in profit or loss.

Purchases and sales of cash management financial assets are recognised at their transaction date.

At 31 December 2016, the Group's available resources amounted to €10.1 billion, including €4.1 billion net cash managed and €6 billion of available, confirmed medium-term bank credit facilities expiring in May 2021.

24.1 Net cash managed

Net cash managed, which includes in particular cash management financial assets and commercial paper issued, breaks down as follows:

	31/12/2016
			Holding
(in € millions)	Concessions	Contracting	companies and VINCI Immobilier	Total
Cash equivalents	243	345	2,834	3,421
Marketable securities and mutual funds (UCITS)	64	4	1,998	2,067
Negotiable debt securities with an original maturity of less than 3 months (*)	178	341	835	1,354
Cash	347	1,712	1,198	3,257
Bank overdrafts	-	(559)	(492)	(1,051)
Net cash and cash equivalents	589	1,498	3,540	5,628
Cash management financial assets	55	68	-	124
Marketable securities and mutual funds (UCITS) (**)	-	13	-	13
Negotiable debt securities and bonds with an original maturity of less than 3 months	1	45	-	46
Negotiable debt securities and bonds with an original maturity of more than 3 months	54	11	-	66
Commercial paper issued	-	-	(1,491)	(1,491)
Other current financial liabilities	(11)	(68)	(1)	(79)
Balance of cash management current accounts	(1,385)	2,132	(799)	(52)
Net cash managed	(751)	3,631	1,249	4,129

(*) Including term deposits, interest earning accounts and certificates of deposit.

(**) Short-term investments in UCITS units that do not meet the criteria to be designated as cash equivalents as defined by IAS 7.

	31/12/2015
(in € millions)	Concessions	Contracting	Holding companies and VINCI Immobilier	Total
Cash equivalents	151	440	2,340	2,930
Marketable securities and mutual funds (UCITS)	26	22	424	472
Negotiable debt securities with an original maturity of less than 3 months (*)	125	418	1,915	2,458
Cash	96	1,709	897	2,702
Bank overdrafts	-	(467)	(88)	(555)
Net cash and cash equivalents	247	1,682	3,148	5,077
Cash management financial assets	34	49	1	84
Marketable securities and mutual funds (UCITS) (**)	-	7	-	7
Negotiable debt securities and bonds with an original maturity of less than 3 months	1	33	-	34
Negotiable debt securities and bonds with an original maturity of more than 3 months	33	9	1	43
Commercial paper issued	-	-	(951)	(951)
Other current financial liabilities	(8)	(60)	-	(68)
Balance of cash management current accounts	534	2,597	(3,152)	(21)
Net cash managed	807	4,269	(954)	4,121

(*) Including term deposits, interest earning accounts and certificates of deposit.

(**) Short-term investments in UCITS units that do not meet the criteria to be designated as cash equivalents as defined by IAS 7.

The investment vehicles used by the Group are money market UCITS, interest earning accounts, term deposits and negotiable debt securities (certificates of deposit generally with a maturity of less than three months). They are measured and recognised at their fair value.

Net cash is managed with limited risk to capital. The performance and the risks associated with these investments of net cash are monitored regularly through a report detailing the yield of the various assets on the basis of their fair value and analysing the associated level of risk.

At 31 December 2016, net cash managed by VINCI SA amounted to €1.8 billion, arising mainly from the cash surpluses transferred upwards from French subsidiaries through a cash pooling system. VINCI Finance International, a wholly owned subsidiary of VINCI that centralises the cash surpluses of foreign subsidiaries, managed investments and cash of €0.2 billion at 31 December 2016. This centralisation enables the management of financial resources to be optimised at Group level and the risks relating to the counterparties and investment vehicles used to be better managed.

Other subsidiaries' cash investments are managed in a decentralised manner while complying with the guidelines and instructions issued by VINCI, which define in particular the investment vehicles and the counterparties authorised. The investments amounted to €2.2 billion at 31 December 2016, including €0.6 billion for the Concessions business and €1.5 billion for the Contracting business.

24.2 Other available resources

Revolving credit facilities

VINCI, ASF and Cofiroute have a revolving credit facility each. In the first half of 2016, the expiry of all three facilities was extended to May 2021 after the lenders agreed to a second one-year extension.

At 31 December 2016, none of the above credit facilities was being used.

The amounts authorised and maturities of the credit facilities of VINCI and its subsidiaries are as follows:

			Maturity
	Amounts used at	Amounts authorised		Between 1 and
(in € millions)	31/12/2016	at 31/12/2016	Within 1 year	5 years	After 5 years
VINCI syndicated facility	-	3,830	-	3,830	-
ASF: syndicated facility	-	1,670	-	1,670	-
Cofiroute: syndicated facility	-	500	-	500	-
Total	-	6,000	-	6,000	-

The ASF syndicated credit facility includes an early repayment clause applicable in the event of non-compliance with the following financial ratios:

(in € millions)	Finance agreements	Ratios	Threshold	Ratios at 31/12/2016
		Consolidated net financial debt (*)/Consolidated cash flow from operations before tax and financing costs + dividends received from companies accounted for under the equity method	< or = 7	4.2
ASF	Syndicated credit facility	Consolidated cash flow from operations before tax and financing costs + dividends received from companies accounted for under the equity method/Consolidated financing costs	> or = 2.2	7.9

(*) Excluding derivatives designated as cash flow hedges.

Commercial paper

At 31 December 2016, VINCI had a €3 billion commercial paper programme rated A2 by Standard & Poor's and P1 by Moody's.

At 31 December 2016, €1.5 billion had been issued under that programme.

25. Financial risk management

Accounting policies

The Group uses derivative financial instruments to hedge its exposure to market risks (mainly interest rates and foreign currency exchange rates). Most interest rate and foreign currency exchange rate derivatives used by VINCI are designated as hedging instruments. Hedge accounting is applicable in particular if the conditions provided for in IAS 39 are satisfied:

• at the time of setting up the hedge, there is a formal designation and documentation of the hedging relationship;

• the effectiveness of the hedging relationship must be demonstrated from the outset and at each balance sheet date, prospectively and retrospectively.

Changes in fair value from one period to the next are recognised differently depending on whether they are designated as:

• a fair value hedge of an asset or a liability or of an unrecognised firm commitment;
• a cash flow hedge; or
• a hedge of a net investment in a foreign entity.

A fair value hedge enables the exposure to the risk of a change in the fair value of a financial asset, a financial liability or unrecognised firm commitment to be hedged.

Changes in the fair value of the hedging instrument are recognised in profit or loss for the period. The change in value of the hedged item attributable to the hedged risk is recognised symmetrically in profit or loss for the period (and adjusts the carrying amount of the hedged item). Except for the ineffective portion of the hedge, these two revaluations offset each other within the same line items in the income statement.

A cash flow hedge allows exposure to variability in future cash flows associated with an existing asset or liability, or a highly probable forecast transaction, to be hedged.

Changes in the fair value of the derivative financial instrument are recognised as other comprehensive income, under equity for the effective portion and in profit or loss for the period for the ineffective portion. Cumulative gains or losses in equity are taken to profit or loss under the same line item as the hedged item – i.e. under operating income and expenses for cash flows from operations and under financial income and expense otherwise – when the hedged cash flow affects profit or loss.

If the hedging relationship is disqualified because it is no longer considered effective, the cumulative gains or losses in respect of the derivative instrument are retained in equity and recognised symmetrically with the cash flow hedged. If the future cash flow is no longer expected, the gains and losses previously recognised in equity are taken to profit or loss.

A hedge of a net investment denominated in a foreign currency hedges the exchange rate risk relating to the net investment in a consolidated foreign subsidiary. The effective portion of the changes in the value of the derivative instrument is recorded in equity under currency translation differences and the portion considered as ineffective is recognised in profit or loss.

The change in the value of the hedging instrument recognised in "Currency translation differences" is reversed through profit or loss when the foreign entity in which the initial investment was made leaves the Group.

Derivative financial instruments that are not designated as hedging instruments are reported in the balance sheet at fair value and changes in their fair value are recognised in profit or loss.

Management rules

VINCI has implemented a system to manage and monitor the financial risks to which it is exposed, principally interest rate risk.

In accordance with the rules laid down by the Group's Finance Department, the responsibility for identifying, measuring and hedging financial risks lies with the operational entity in question. On the other hand, derivative financial instruments are normally managed by the Group Finance Department on behalf of the subsidiaries in question.

Treasury committees, in which the Group's Finance Department and the concerned companies participate, analyse the main exposures regularly and decide on management strategies for the entities that have the most material exposure to financial risks (VINCI SA, ASF, Cofiroute, VFI).

In order to manage its exposure to market risks, the Group uses derivative financial instruments, which are recognised in the balance sheet at their fair value.

At the balance sheet date, the fair value of derivative financial instruments breaks down as follows:

		31/12/2016	31/12/2015
(in € millions)	Note	Fair value (*)	Fair value (*)
Interest rate derivatives: fair value hedges	25.1.2	788	879
Interest rate derivatives: cash flow hedges	25.1.2	(116)	(172)
Interest rate derivatives not designated as hedges	25.1.3	39	38
Interest rate derivatives		712	746
Foreign currency exchange rate derivatives: fair value hedges	25.2	13	4
Foreign currency exchange rate derivatives: cash flow hedges	25.2	(1)	-
Foreign currency exchange rate derivatives: hedges of net foreign investments	25.2	(3)	(1)
Foreign currency exchange rate derivatives not designated as hedges	25.2	4	4
Foreign currency exchange rate derivatives		13	6
Other derivatives		(1)	(2)
Total derivative financial instruments		723	751

(*) Fair value includes interest accrued but not matured of €135 million at 31 December 2016 and €132 million at 31 December 2015.

25.1 Interest rate risk

Interest rate risk is managed within the Group, making a distinction between the Concessions business, the Contracting business and holding companies as their respective financial profiles are not the same.

For concession operating subsidiaries, interest rate risk is managed with two timescales: the long term, aiming to ensure and maintain the concession's economic equilibrium, and the short term, with an objective of limiting the earnings impact of the average cost of debt depending on the situation in financial markets.

Over the long term, the objective is to change over time the breakdown between fixed and floating rate debt depending on the debt level (measured by the ratio of net debt to cash flows from operations before tax and financing costs), with a greater proportion at fixed rate when the level of debt is high.

As regards Contracting activities and holding companies, they have a structural net cash surplus because the Contracting subsidiaries' cash surpluses, of which the management is mainly centralised under the Group cash pooling system, are higher than the holding companies' debt. For these activities, the objective is to ensure that the risks connected with financial assets and financial liabilities are well matched.

To hedge its interest rate risk, the Group uses derivative financial instruments in the form of options or swaps of which the start may be deferred. These derivatives may be designated as hedges for accounting purposes or not, in accordance with the IFRSs.

25.1.1 Long-term financial debt before and after interest rate hedging and sensitivity to interest rate risk

Long-term financial debt before and after interest rate hedging

The table below shows the breakdown at 31 December 2016 of long-term debt between fixed rate, capped floating rate or inflation-linked debt, and the part at floating rate before and after taking account of hedging derivative financial instruments:

	Breakdown between fixed and floating rate before hedging
		Fixed rate			Inflation-linked			Floating rate		Total
(in € millions)	Debt	Proportion	Rate	Debt	Proportion	Rate	Debt	Proportion	Rate	Debt	Rate
Concessions	12,668	84%	4.25%	442	3%	8.36%	2,006	13%	0.64%	15,117	3.89%
Contracting	132	70%	3.47%	-	0%	0.00%	56	30%	1.36%	188	2.84%
Holding companies	2,131	86%	3.71%	-	0%	0.00%	350	14%	0.69%	2,481	3.28%
Total at 31/12/2016	14,931	84%	4.17%	442	2%	8.36%	2,411	14%	0.66%	17,785	3.80%
Total at 31/12/2015	12,842	79%	4.60%	618	4%	3.56%	2,774	17%	0.73%	16,234	3.90%

		Breakdown between fixed and floating rate after hedging
		Fixed rate			Inflation-linked/Capped floating rate			Floating rate		Total
(in € millions)	Debt	Proportion	Rate	Debt	Proportion	Rate	Debt	Proportion	Rate	Debt	Rate
Concessions	8,775	58%	4.11%	243	2%	10.32%	6,099	40%	1.24%	15,117	3.20%
Contracting	133	71%	3.47%	-	0%	0.00%	55	29%	1.36%	188	2.85%
Holding companies	280	11%	3.65%	-	0%	0.00%	2,200	89%	1.56%	2,481	1.79%
Total at 31/12/2016	9,188	52%	4.09%	243	1%	10.32%	8,354	47%	1.32%	17,785	3.00%
Total at 31/12/2015	8,735	54%	4.36%	418	3%	2.87%	7,081	44%	1.41%	16,234	3.27%

Sensitivity to interest rate risk

VINCI is exposed to the risk of fluctuations in interest rates, given:

• the cash flows connected with net floating rate financial debt;
• fixed rate financial instruments, recognised on the balance sheet at fair value through profit and loss;

• derivative financial instruments that are not designated as hedges. These mainly comprise net call option positions of which the maximum loss over the life of the transaction is equal to the premium paid.

On the other hand, fluctuations in the value of derivatives designated as cash flow hedges are recognised directly in equity and have no effect on profit or loss (for the effective portion).

The analysis below has been prepared assuming that the amount of the financial debt and derivatives at 31 December 2016 remains constant over one year. The consequence of a variation in interest rates of 25 basis points at the balance sheet date would be an increase or decrease of equity and pre-tax income for the amounts shown below. For the purpose of this analysis, the other variables are assumed to remain constant.

	31/12/2016
	Income Equity
(in € millions)	Impact of sensitivity calculation +25 bp	Impact of sensitivity calculation -25 bp	Impact of sensitivity calculation +25 bp	Impact of sensitivity calculation -25 bp
Floating rate debt after hedging (accounting basis)	(21)	21	-	-
Floating rate assets after hedging (accounting basis)	10	(10)	-	-
Derivatives not designated as hedges for accounting purposes	5	(5)	-	-
Derivatives designated as cash flow hedges	-	-	86	(86)
Total	(6)	6	86	(86)

25.1.2 Description of hedging transactions

Fair value hedges

At the balance sheet date, details of the instruments designated as fair value hedges (receive fixed/pay floating interest rate swaps only) were as follows:

				Receive fixed/pay floating interest rate swap
		Notional	Within	Between	Between	After
(in € millions)	Fair value	amount	1 year	1 and 2 years	2 and 5 years	5 years
31/12/2016	788	8,641	1,774	444	2,559	3,864
31/12/2015	879	7,503	162	1,774	2,503	3,064

These transactions relate mainly to the fixed rate bond issues by ASF, VINCI SA and Cofiroute.

Cash flow hedges

The Group is exposed to fluctuations in interest rates on its floating rate debt and may set up receive floating/pay fixed interest rate swaps designated as cash flow hedges to hedge this risk.

The Group has thus set up interest rate swaps that serve to render interest payments on floating rate debt fixed ("certain" cash flow hedging). Contractual cash flows relating to swaps are paid symmetrically with the hedged interest payment flows. The amount deferred in equity is recognised in profit or loss in the period in which the interest payment cash flow affects profit or loss.

The Group has also set up deferred start swaps at ASF with maturities of up to 2019 ("highly probable" cash flow hedges). These serve to fix the interest payments on future issues of debt considered as highly probable. At 31 December 2016, the portfolio of these swaps had a negative fair value of €8 million.

At 31 December 2016, details of the instruments designated as cash flow hedges were as follows:

		31/12/2016
		Notional	Within	Between	Between	After
(in € millions)	Fair value	amount	1 year	1 and 2 years	2 and 5 years	5 years
Receive floating/pay fixed interest rate swaps	(116)	1,154	51	520	492	91
Total interest rate derivatives designated for accounting purposes as cash flow hedges	(116)	1,154	51	520	492	91
Of which hedging of contractual cash flows	(108)	1,002	51	520	340	91
Of which hedging of highly probable forecast cash flows (*)	(8)	152	-	-	152	-

(*) Receive floating/pay fixed interest rate swaps.

		31/12/2015
(in € millions)	Fair value	Notional amount	Within 1 year	Between 1 and 2 years	Between 2 and 5 years	After 5 years
Receive floating/pay fixed interest rate swaps	(171)	1,967	323	52	1,495	97
Forward rate agreements (FRA)	(1)	900	900	-	-	-
Total interest rate derivatives designated for accounting purposes as cash flow hedges	(172)	2,867	1,223	52	1,495	97
Of which hedging of contractual cash flows	(138)	2,100	1,219	52	732	97
Of which hedging of highly probable forecast cash flows (*)	(33)	767	4	-	763	-

(*) Receive floating/pay fixed interest rate swaps.

The following table shows the periods in which the Group expects the amounts recorded in equity at 31 December 2016 for the instruments designated as cash flow hedges to have an impact on profit or loss:

			31/12/2016
	Amount recorded in		Amount recycled in profit or loss
	equity of controlled		Between 1 and 2	Between 2 and 5
(in € millions)	companies	Within 1 year	years	years	After 5 years
Total interest rate derivatives designated for accounting purposes as cash flow hedges	(142)	(58)	(35)	(25)	(24)
Of which hedging of contractual cash flows	(105)	(36)	(17)	(27)	(25)
Of which hedging of highly probable forecast cash flows	(37)	(22)	(18)	2	1

25.1.3 Description of non-hedging transactions

	31/12/2016
				Between	Between	After
(in € millions)	Fair value	Notional amount	Within 1 year	1 and 2 years	2 and 5 years	5 years
Interest rate swaps	39	1,000	-	-	1,000	-
Total	39	1,000	-	-	1,000	-

		31/12/2015
(in € millions)	Fair value	Notional amount	Within 1 year	Between 1 and 2 years	Between 2 and 5 years	After 5 years
Interest rate swaps	45	1,001	-	-	1,000	-
Forward rate agreements (FRA)	(7)	8,090	8,090	-	-	-
Total	38	9,091	8,090	-	1,000	-

These transactions are mainly swaps with short maturities and mirror swaps (symmetrical positions that generate no risk of fluctuation of fair value in the income statement).

25.2 Management of foreign currency exchange rate risk

Nature of the Group's risk exposure

VINCI's foreign currency risk management policy consists of hedging the transactional risk connected with operations.

71% of VINCI's revenue is generated in the eurozone. Contracts outside the eurozone are generally carried out in the local currency in respect of local subsidiaries' activities, and to a large extent in euros and dollars in the case of major export projects. The Group's exposure to currency risk is therefore limited.

VINCI's foreign currency risk management policy consists of hedging the transactional risk connected with subsidiaries' commercial flows denominated in currencies other than their functional currency. Such flows are small compared with the Group's consolidated revenue.

In some cases, the Group also hedges its asset-related exchange rate risk related to its foreign currency investments by matching the currency of part of its debt with the currency in which the assets generate cash flows. Asset-related exchange rate hedging decisions are taken by the subsidiaries concerned in conjunction with the Group Finance Department depending on the value of the net asset in the Group's financial statements, the predictability of the volume and timeframe of the foreign-currency cash flows generated, and the economic terms of the foreign-currency borrowings concerned.

Analysis of foreign currency exchange rate risk

The principal foreign exchange risk exposure was as follows at 31 December 2016:

(in $\epsilon$ millions)

(in € millions)			31/12/2016
Currency	USD (US dollar)	GBP (Pound sterling)	CLP (Chilean peso)	HKD (Hong Kong dollar)	MXN (Mexican peso)
Closing rate	1.0541	0.8561	704.945	8.1751	21.7719
Exposure	572	57	14	(46)	(25)
Hedging	(518)	(44)	-	(7)	-
Net position	54	13	14	(52)	(26)

Given a residual exposure on some assets that have not been designated as hedges, a 10% appreciation of foreign currencies against the euro would have a positive impact on pre-tax earnings of €4 million.

Detail of foreign currency exchange rate derivatives

Transactions to hedge currency risk designed to cover commercial or financial transactions break down as follows:

	31/12/2016
		Notional		Between	Between	After
(in € millions)	Fair value	amount	Within 1 year	1 and 2 years	2 and 5 years	5 years
Currency swaps (incl. cross currency swaps)	13	388	162	-	-	226
Fair value hedges	13	388	162	-	-	226
Currency swaps (incl. cross currency swaps)	(1)	11	11	-	-	-
Cash flow hedges	(1)	11	11	-	-	-
Currency swaps (incl. cross currency swaps)	(3)	971	645	26	100	200
Forward foreign exchange transactions	-	2	2	-	-	-
Hedges of net foreign investments	(3)	973	647	26	100	200
Currency swaps (incl. cross currency swaps)	5	556	556	-	-	-
Forward foreign exchange transactions	(1)	25	25	-	-	-
Foreign currency exchange rate derivatives not designated as hedges for accounting purposes	4	581	581	-	-	-
Total foreign currency exchange rate derivatives	13	1,953	1,400	26	100	426

				31/12/2015
		Notional	Within	Between	Between	After
(in € millions)	Fair value	amount	1 year	1 and 2 years	2 and 5 years	5 years
Currency swaps (incl. cross currency swaps)	4	388	-	162	-	226
Fair value hedges	4	388	-	162	-	226
Currency swaps (incl. cross currency swaps)	(1)	569	198	120	93	158
Hedges of net foreign investments	(1)	569	198	120	93	158
Currency swaps (incl. cross currency swaps)	4	349	349	-	-	-
Forward foreign exchange transactions	-	8	8	-	-	-
Foreign currency exchange rate derivatives not designated as hedges for accounting purposes	4	357	357	-	-	-
Total foreign currency exchange rate derivatives	6	1,314	555	282	93	384

25.3 Management of credit and counterparty risk

VINCI is exposed to credit risk in the event of default by its customers and to counterparty risk in respect of its investments of cash (mainly credit balances at banks, negotiable debt securities, term deposits and marketable securities), subscription to derivatives, commitments received (sureties and guarantees received), unused authorised credit facilities, and financial receivables.

The Group has set up procedures to manage and limit credit risk and counterparty risk.

Trade receivables

Approximately a third of consolidated revenue is generated with public-sector or quasi-public-sector customers. Moreover, VINCI considers that the concentration of credit risk connected with trade receivables is limited because of the large number of customers and the fact that they are geographically dispersed. No customer accounts for more than 10% of VINCI's revenue. In export markets, the risk of non-payment is generally covered by appropriate insurance policies (Coface, documentary credits and other insurance). Trade receivables are broken down in Note E.18.2 "Breakdown of trade receivables".

Financial instruments (cash investments and derivatives)

Financial instruments (cash investments and derivatives) are set up with financial institutions that meet the Group's credit rating criteria. The Group has also set up a system of counterparty limits to manage its counterparty risk. Maximum risk amounts by counterparty are defined taking account of their credit ratings attributed by Standard & Poor's and Moody's. The limits are regularly monitored and updated on the basis of a consolidated quarterly reporting system.

The Group Finance Department also distributes instructions to subsidiaries laying down the authorised limits by counterparty, the list of authorised UCITS (French subsidiaries) and the selection criteria for money market funds (foreign subsidiaries).

The measurement of the fair value of derivative financial instruments carried by the Group includes a "counterparty risk" component for derivatives carried as assets and a "credit risk" component for derivatives carried as liabilities. Credit risk is measured using standard mathematical models for market participants. At 31 December 2016, adjustments recognised with respect to counterparty risk and own credit risk were not material.

Netting agreements relating to derivative financial instruments

At 31 December 2016 and in accordance with IAS 32, the Group's financial assets and liabilities (including derivative financial instruments) are not netted on the balance sheet, except where the Group has netting agreements. In the event of default by the Group or the financial institutions with which it has contracted, these agreements provide for netting between the fair values of assets and liabilities arising from derivative financial instruments presented in the consolidated balance sheet.

The table below sets out the Group's net exposure arising from these netting agreements:

		31/12/2016			31/12/2015
	Fair value of derivatives	Impact		Fair value of derivatives	Impact
	recognised on the	of netting		recognised on the	of netting
(in € millions) Derivative financial instruments – assets	balance sheet (*) 1,091	agreements (211)	Total 880	balance sheet (*) 1,168	agreements (273)	Total 894
Derivative financial instruments – liabilities	(369)	211	(157)	(417)	273	(144)
Net derivative instruments	723		723	751		751

(*) Gross amounts as stated on the Group's consolidated balance sheet.

25.4 Management of other risks

Equity risk

At 31 December 2016, the Group held 34,685,354 VINCI shares (representing 5.89% of the share capital) acquired at an average price of €45.57. Increases or decreases of the stock market price of these treasury shares have no impact on the Group's consolidated profit or loss or equity.

Regarding assets to cover retirement benefit obligations, a breakdown by asset type is given in Note K.27.1 "Provisions for retirement benefit obligations".

Commodity risks

Most of the Group's revenue arises either from contracts that include price revision clauses or under short-term contracts. The risks associated with an increase in commodity prices are therefore generally limited.

For major contracts with no price revision clauses, the commodity risks are analysed on a case-by-case basis and managed in particular by negotiating firm price agreements with suppliers and/or through cash-and-carry deals and/or hedging derivatives based on commodity indexes. Eurovia has set up a policy to manage bitumen price risks through short-maturity hedging derivatives (swaps of less than three months on average). This policy applies to small contracts in France with an average length of less than three months and which do not include price revision clauses.

VINCI uses little unprocessed raw material, other than the aggregates produced and used by Eurovia. In 2016, approximately 35% of Eurovia's aggregates came from Group quarries.

26. Book and fair value of financial instruments by accounting category

The following table shows the carrying amount and the fair value of financial assets and liabilities in the balance sheet by accounting category as defined in IAS 39:

31/12/2016			Accounting categories (1)					Fair value
Balance sheet headings and classes of instrument	Financial instruments at fair value through profit and loss	Derivatives designated as hedges	Financial assets measured at fair value	Available for-sale financial assets	Loans and receivables	Financial liabilities at amortised cost	Total net book value of the class	Level 1: quoted prices and cash	Level 2: internal model using observable factors	Level 3: internal model using non-observable factors	Fair value of the class
Available-for-sale	-	-	-	134	-	-	134	1	-	134	134
financial assets Loans and financial	-	-	-	-	747	-	747	-	747	-	747
receivables incl. PPP
I - Non-current financial assets (2)	-	-	-	134	747	-	881	1	747	134	881
II - Derivative financial instruments – assets	202	890	-	-	-	-	1,091	-	1,091	-	1,091
Cash management financial assets	-	-	124	-	-	-	124	13	111	-	124
Financial current accounts, assets	-	-	30	-	-	-	30	30	-	-	30
Cash equivalents	-	-	3,421	-	-	-	3,421	2,067	1,354(3)	-	3,421
Cash	-	-	3,257	-	-	-	3,257	3,257	-	-	3,257
III - Current financial assets	-	-	6,832	-	-	-	6,832	5,367	1,465	-	6,832
Total assets	202	890	6,832	134	747	-	8,805	5,368	3,303	134	8,805
Bonds						(14,102)	(14,102)	(13,835)	(1,062)	-	(14,897)
Other bank loans and other financial debt						(4,610)	(4,610)	(1,383)(4)	(3,333)	-	(4,717)
Finance lease debt						(78)	(78)	-	(78)	-	(78)
IV - Long-term financial debt	-	-	-	-	-	(18,790)	(18,790)	(15,218)	(4,473)	-	(19,692)
V - Derivative financial instruments – liabilities	(158)	(210)	-	-	-	-	(369)	-	(369)	-	(369)
Other current financial liabilities						(1,570)	(1,570)	-	(1,570)	-	(1,570)
Financial current accounts, liabilities						(83)	(83)	(83)	-	-	(83)
Bank overdrafts						(1,051)	(1,051)	(1,051)	-	-	(1,051)
VI - Current financial liabilities	-	-	-	-	-	(2,704)	(2,704)	(1,133)	(1,570)	-	(2,704)
Total liabilities	(158)	(210)	-	-	-	(21,494)	(21,862)	(16,351)	(6,412)	-	(22,764)
Total	43	680	6,832	134	747	(21,494)	(13,058)	(10,984)	(3,109)	134	(13,959)

(1) The Group holds no held-to-maturity financial assets.

(2) See Notes E.11, F.13 and H.17.

(3) Mainly comprising certificates of deposit, term deposits and interest bearing accounts.

(4) Listed price of loans issued by CNA.

The method of measuring the fair value of financial assets and liabilities was not altered in 2016.

31/12/2015			Accounting categories (1)							Fair value
Balance sheet headings and classes of instrument	Financial instruments at fair value through profit and loss	Derivatives designated as hedges	Financial assets measured at fair value	Available for-sale financial assets	Loans and receivables	Financial liabilities at amortised cost	Total net book value of the class	Level 1: quoted prices and cash	Level 2: internal model using observable factors	Level 3: internal model using non-observable factors	Fair value of the class
Available-for-sale financial assets	-	-	-	96	-	-	96	1	-	96	96
Loans and financial receivables incl. PPP	-	-	-	-	846	-	846	-	846	-	846
I - Non-current financial assets (2)	-	-	-	96	846	-	942	1	846	96	942
II - Derivative financial instruments – assets	229	939	-	-	-	-	1,168	-	1,168	-	1,168
Cash management financial assets	-	-	84	-	-	-	84	7	77	-	84
Financial current accounts, assets	-	-	82	-	-	-	82	82	-	-	82
Cash equivalents			2,930				2,930	472	2,458 (3)	-	2,930
Cash			2,702				2,702	2,702	-	-	2,702
III - Current financial assets	-	-	5,798	-	-	-	5,798	3,264	2,535	-	5,798
Total assets	229	939	5,798	96	846	-	7,908	3,264	4,548	96	7,908
Bonds	-	-	-	-	-	(12,462)	(12,462)	(12,590)	(686)	-	(13,277)
Other bank loans and other financial debt	-	-	-	-	-	(4,771)	(4,771)	(1,442) (4)	(3,438)	-	(4,880)
Finance lease debt	-	-	-	-	-	(77)	(77)	-	(77)	-	(77)
IV - Long-term financial debt	-	-	-	-	-	(17,310)	(17,310)	(14,032)	(4,201)	-	(18,233)
V - Derivative financial instruments – liabilities	(187)	(230)	-	-	-	-	(417)	-	(417)	-	(417)
Other current financial liabilities	-	-	-	-	-	(1,019)	(1,019)	-	(1,019)	-	(1,019)
Financial current accounts, liabilities	-	-	-	-	-	(103)	(103)	(103)	-	-	(103)
Bank overdrafts	-	-	-	-	-	(555)	(555)	(555)	-	-	(555)
VI - Current financial liabilities	-	-	-	-	-	(1,677)	(1,677)	(658)	(1,019)	-	(1,677)
Total liabilities	(187)	(230)	-	-	-	(18,987)	(19,404)	(14,691)	(5,637)	-	(20,327)
Total	42	709	5,798	96	846	(18,987)	(11,496)	(11,426)	(1,089)	96	(12,419)

(1) The Group holds no held-to-maturity financial assets.

(2) See Notes E.11, F.13 and H.17.

(3) Mainly comprising certificates of deposit, term deposits and interest bearing accounts.

(4) Listed price of loans issued by CNA.

K. Employee benefits and share-based payments

27. Provisions for employee benefits

At 31 December 2016, the part at more than one year of provisions for employee benefits broke down as follows:

(in € millions)	Note	31/12/2016	31/12/2015
Provisions for retirement benefit obligations	27.1	1,558	1,425
Long-term employee benefits	27.2	96	91
Total provisions for employee benefits		1,653	1,515

27.1 Provisions for retirement benefit obligations

Accounting policies

Provisions are taken on the liabilities side of the consolidated balance sheet for obligations connected with defined benefit retirement plans for both current and former employees (people who have retired and those with deferred rights). These provisions are determined using the projected unit credit method on the basis of actuarial valuations made at each annual balance sheet date. The actuarial assumptions used to determine the obligations vary depending on the economic conditions of the country or monetary zone in which the plan is operated. Each plan's obligations are recognised separately.

Under IAS 19, for defined benefit plans financed under external management arrangements (i.e. pension funds or insurance policies), the surplus or shortfall of the fair value of the assets compared with the present value of the obligations is recognised as an asset or liability in the consolidated balance sheet. That recognition is subject to asset ceiling rules and minimum funding requirements set out in IFRIC 14.

The expense recognised under operating income or loss in each period comprises the current service cost and the effects of any change, reduction or winding up of the plan. The accretion impact recognised on actuarial liability and interest income on plan assets are recognised under other financial income and expenses. Interest income from plan assets is calculated using the discount rate used to calculate obligations with respect to defined benefit plans.

The impacts of remeasuring net liabilities (or assets as the case may be) relating to defined benefit pension plans are recorded under other comprehensive income. They comprise:

• actuarial gains and losses on obligations resulting from changes in actuarial assumptions and from experience adjustments (the effects of differences between the actuarial assumptions adopted and that which has actually occurred);

• plan asset outperformance/underperformance (i.e. the difference between the effective return on plan assets and the return calculated using the discount rate applied to the actuarial liability); and

• changes in the asset ceiling effect.

At 31 December 2016, provisions for retirement benefit obligations comprised provisions for lump sums on retirement and provisions with respect to obligations for supplementary retirement benefits.

(in € millions)	31/12/2016	31/12/2015
At more than one year	1,558	1,425
At less than one year (*)	50	50
Total provisions for retirement benefit obligations	1,608	1,475

(*) The part of provisions for retirement benefit obligations that matures within less than one year is shown under "Other current non-operating liabilities".

The VINCI Group's main supplementary retirement benefit obligations relate to defined benefit plans, which have the following characteristics: • For French subsidiaries, these are contractual lump sums paid on retirement (generally based on a percentage of final salary, depending on the employee's length of service and applicable collective agreements), supplementary defined benefit retirement plans of which some of the Group's employees, retired employees and officers are members, and a specific obligation in respect of VINCI's Vice-Chairman and Senior Director.

Some plans, of which several Group executives are members, are pre-financed through two insurance policies taken out with Cardif (BNP Paribas group) and one policy taken out with Allianz. These policies involve active management with reference to composite indexes, and aim to achieve a good balance between the expected return on investments and the associated risks. Sufficient liquidity, in view of the timescale of plan liabilities, is maintained so that pensions and other one-off payments can be met.

• To cover the liabilities of VINCI's UK subsidiaries (VINCI plc, Nuvia, Freyssinet UK, Ringway, Actemium UK) and those of Etavis in Switzerland, plans are funded through independent pension funds.

In the UK, defined benefit plans for certain Group employees and former employees give rise to benefits that are mainly based on final salaries. They also provide benefits in the event of death and disability.

At 31 December 2016, 4,679 people, including 2,283 retired people, were covered by the plans. Most plans are now closed to new members. The average duration of the plans is 18 years.

The investment strategy for plan assets is defined by the trustees representing the pension funds. Contribution schedules and the plan's level of funding are determined by the employer and the trustee, based on three-yearly actuarial valuations. Contribution schedules are intended to cover future service costs and any deficit arising from vested rights.

In Switzerland, plans for the Group's employees and former employees (2,014 people at 31 December 2016, of which over 90% are active) are "cash balance" pension plans that guarantee their members a minimum return on their contributions. They provide benefits in the event of death or disability, along with a pension when members stop working. Plans are open to new members. Their duration is around 18 years.

• For German subsidiaries, there are several internal plans within the Group, including so-called "direct promises" plans. These plans provide members with pensions along with death and disability benefits. At 31 December 2016, 10,035 individuals were covered by the plans, including 5,821 retired people, 2,431 people working for Group subsidiaries and 1,783 people who were generally still working but no longer working for the Group. Most of the plans were closed at 31 December 2016. Their average duration is 13 years.

Commitments relating to lump-sum payments on retirement for manual construction workers, which are met by contributions to an outside multi-employer insurance fund (CNPO), are considered as being under defined contribution plans and are therefore recognised as an expense as and when contributions are payable.

The retirement benefit obligations covered by provisions recognised in the balance sheet are calculated using the following assumptions:

		Eurozone		United Kingdom	Switzerland
Assumptions	31/12/2016	31/12/2015	31/12/2016	31/12/2015	31/12/2016	31/12/2015
Discount rate	1,20 % - 1,85%	2,10 %	2,25% - 2,85 %	3,70 %	0,20 %	0,90 %
Inflation rate	1,60 %	1,80 %	2,20 % - 3,20 %(*)	2,20 % - 3,20 %	1,20 %	1,50 %
Rate of salary increases	1,60 % - 4,00 %	1,80 % - 4,00 %	2,00 % - 4,10 %	2,00 % - 4,20 %	1,70 %	2,00 %
Rate of pension increases	0,80 % - 1,60 %	0,80 % - 1,80 %	2,10 % - 5,00 %	2,20 % - 5,00 %	N/A	NA

(*) Inflation rates: CPI 2,20%; RPI 3.20%.

Discount rates have been determined by geographical area on the basis of the yields on private-sector bonds with a rating of AA and whose maturities correspond to the plans' expected cash flows.

The other local actuarial assumptions (economic and demographic assumptions) are set on the basis of the specific features of each of the countries in question.

Plan assets are valued at their fair value at 31 December 2016. The book value at 31 December 2016 is used for assets invested with insurance companies.

On the basis of the actuarial assumptions referred to above, details of the retirement benefit obligations, provisions recognised in the balance sheet, and the retirement benefit expenses recognised in 2016 are provided below.

Result of actuarial valuations in the period

Breakdown by type of obligation

		31/12/2016			31/12/2015
(in € millions)	Lump sums paid on retirement in France	Pensions, supplementary pensions and other	Total	Lump sums paid on retirement in France	Pensions, supplementary pensions and other	Total
Actuarial liability from retirement benefit obligations	823	1,976	2,799	738	1,933	2,671
Plan assets at fair value	49	1,143	1,192	52	1,145	1,197
Deficit (or surplus)	774	833	1,607	686	789	1,474
Provision recognised under liabilities on the balance sheet	I 774	834	1,608	686	789	1,475
Overfunded plans recognised under assets on the balance sheet	II -	-	-	-	-	-
Asset ceiling effect (IFRIC 14) (*)	III -	1	1	-	1	1
Total I-II-III	774	834	1,607	686	789	1,474

(*) Effect of asset ceiling rules and minimum funding requirements.

At 31 December 2016, the proportion of obligations relating to retired beneficiaries was around 30%.

Breakdown by country

		31/12/2016
				United		Other
(in € millions)		France	Germany	Kingdom	Switzerland	countries	Total
Actuarial liability from retirement benefit obligations		1,069	493	781	364	92	2,799
Plan assets at fair value		155	7	638	328	64	1,192
Deficit (or surplus)		914	486	143	37	27	1,607
Provision recognised under liabilities on the balance sheet	I	914	486	143	37	28	1,608
Overfunded plans recognised under assets on the balance sheet	II	-	-	-	-	-	-
Asset ceiling effect (IFRIC 14) (*)	III	-	-	-	-	1	1
Total	I-II-III	914	486	143	37	27	1,607

(*) Effect of asset ceiling rules and minimum funding requirements.

		31/12/2015
				United		Other
(in € millions)		France	Germany	Kingdom	Switzerland	countries	Total
Actuarial liability from retirement benefit obligations		980	461	808	343	79	2,671
Plan assets at fair value		153	6	683	300	54	1,197
Deficit (or surplus)		827	455	124	43	25	1,474
Provision recognised under liabilities on the balance sheet	I	827	455	124	43	26	1,475
Overfunded plans recognised under assets on the balance sheet	II	-	-	-	-	-	-
Asset ceiling effect (IFRIC 14) (*)	III	-	-	-	-	1	1
Total	I-II-III	827	455	124	43	25	1,474

(*) Effect of asset ceiling rules and minimum funding requirements.

Change in actuarial liability and plan assets

(in € millions)		2016	2015
Actuarial liability from retirement benefit obligations
At beginning of period		2,671	2,451
of which obligations covered by plan assets		1,617	1,418
Current service cost		73	73
Actuarial liability discount cost		62	71
Past service cost (plan changes and curtailments)		(13)	(21)
Plan settlements		(1)	(1)
Actuarial gains and losses recognised in other comprehensive income		214	92
of which impact of changes in demographic assumptions		(39)	14
of which impact of changes in financial assumptions		275	85
of which experience gains and losses		(22)	(7)
Benefits paid to beneficiaries		(113)	(99)
Employee contributions		10	10
Currency translation differences		(116)	72
Business combinations		8	29
Disposals of companies and other assets		3	(6)
At end of period	I	2,799	2,671
of which obligations covered by plan assets		1,648	1,617
Plan assets
At beginning of period		1,197	1,070
Interest income during period		30	36
Actuarial gains and losses recognised in other comprehensive income (*)		65	(12)
Plan settlements		-	-
Benefits paid to beneficiaries		(50)	(37)
Contributions paid to funds by the employer		38	39
Contributions paid to funds by employees		10	10
Currency translation differences		(97)	67
Business combinations		-	24
Disposals of companies and other assets		(1)	-
At end of period	II	1,192	1,197
Deficit (or surplus)	I-II	1,607	1,474

(*) Experience gains and losses corresponding to the observed difference between the actual return on plan assets and a nominal return based on the discount rate for the actuarial liability.

In 2016, the recognised past service cost includes positive impacts related to the alteration of certain plans in the UK and the Netherlands, which have been converted into defined contribution plans.

Actuarial losses recognised during the period were mainly due to the fall in discount rates in the eurozone, the UK and Switzerland. Actuarial gains on obligations resulted in particular from the updating of turnover tables in Switzerland. The performance of certain plan assets, particularly in the UK, the Netherlands and Switzerland, led to the recognition of an actuarial gain on assets in 2016.

VINCI estimates the payments to be made in 2017 in respect of retirement benefit obligations at €79 million, comprising €51 million of benefits to be paid to retired employees or beneficiaries and not covered by plan assets, and €28 million of contributions to be paid to fund managing bodies.

Pension funds are also likely to pay €54 million of benefits to retired employees or their beneficiaries. Since those benefits are pre-funded, they will have no impact on the Group's cash position.

Change in provisions for retirement benefit obligations during the period

(in € millions)	2016	2015
Provisions for retirement benefit obligations recognised under liabilities on the balance sheet
At beginning of period	1,475	1,384
Total charge recognised with respect to retirement benefit obligations	96	88
Actuarial gains and losses recognised in other comprehensive income	149	104
Benefits paid to beneficiaries by the employer	(63)	(62)
Contributions paid to funds by the employer	(38)	(39)
Currency translation differences	(19)	5
Business combinations	8	5
Disposals of companies and other assets	(1)	(10)
At end of period	1,608	1,475

Breakdown of expenses recognised in respect of defined benefit plans

(in € millions)	2016	2015
Current service cost	(73)	(73)
Actuarial liability discount cost	(62)	(71)
Interest income on plan assets	30	36
Past service cost (plan changes and curtailments)	13	21
Impact of plan settlements and other	(4)	(2)
Total	(96)	(88)

Breakdown of plan assets by country and type of investment

The breakdown of plan assets by type of investment is as follows:

	31/12/2016
	United Kingdom	Switzerland	France	Other countries	Weighted average
Breakdown of plan assets
Equities	30%	30%	28%	39%	30%
Bonds	43%	42%	61%	38%	45%
Property	13%	19%	4%	1%	13%
Money market securities	2%	9%	1%	0%	4%
Other	12%	0%	6%	23%	9%
Total	100%	100%	100%	100%	100%
Plan assets (in € millions)	638	328	155	71	1,192
Plan assets by country (% of total)	54%	27%	13%	6%	100%

	31/12/2015
					Weighted
	United Kingdom	Switzerland	France	Other countries	average
Breakdown of plan assets
Equities	35%	31%	29%	36%	33%
Bonds	41%	44%	61%	36%	44%
Property	13%	18%	4%	1%	12%
Money market securities	1%	8%	1%	0%	3%
Other	10%	0%	6%	27%	8%
Total	100%	100%	100%	100%	100%
Plan assets (in € millions)	683	300	153	60	1,197
Plan assets by country (% of total)	57%	25%	13%	5%	100%

At 31 December 2016, the amount of plan assets listed on active markets (fair value level 1 as defined by IFRS 13) was €994 million (€1,018 million at 31 December 2015). During the period, the actual rate of return on plan assets was 11.4% in the UK, 2.6% in Switzerland and 1.7% in France.

Sensitivity analysis

For all post-employment benefit plans for Group employees (lump sums paid on retirement, pensions and supplementary pensions), a 0.5 point fall in the discount rate would increase the actuarial liability by around 8%.

For all pension and supplementary pension plans in force within the Group, a 0.5 point increase in long-term inflation rates would increase the value of obligations by some 5%.

For pension and supplementary pension plans in Switzerland and the UK, sensitivity to mortality rates is calculated based on a one-year reduction in the age of each beneficiary. Applying this assumption increases the corresponding obligation by around 3%.

Expenses recognised in respect of defined contribution plans

In some countries, and more especially in France and Spain, the Group contributes to basic state pension plans, for which the expense recognised is the amount of the contributions called by the state bodies. Basic state pension plans are considered as being defined contribution plans.

The amounts taken as an expense in the period in respect of defined contribution plans (excluding basic state plans) totalled €520 million in 2016 (€519 million in 2015). These amounts include the contributions paid in France to the external multi-employer fund (CNPO) in respect of obligations in regard to lump sums paid on retirement to construction workers.

27.2 Other employee benefits

Provisions for other employee benefits mainly include long-service bonuses and jubilee bonuses. At 31 December 2016, they amounted to €110 million, including €14 million for the part at less than one year (€107 million including €17 million for the part at less than one year at 31 December 2015).

Long-service bonuses and jubilee bonuses have been calculated using the following actuarial assumptions:

	31/12/2016	31/12/2015
Discount rate	1.20%	2.10%
Inflation rate	1.60%	1.80%
Rate of salary increases	1.60% - 2.60%	1.80% - 3.00%

28. Share-based payments

Accounting policies

The measurement and recognition methods for share subscription plans, the Plans d'Epargne Groupe (Group savings plans) and performance share plans, are defined by IFRS 2 "Share-based Payment". The granting of share options, performance shares and offers to subscribe to Group savings plans in France and abroad represent a benefit granted to their beneficiaries and therefore constitute supplementary remuneration borne by VINCI.

Because such transactions do not give rise to monetary transactions, the benefits granted in this way are recognised as expenses in the period in which the rights are acquired, with a corresponding increase in equity. Benefits are measured by an external actuary on the basis of the fair value, at the grant date, of the equity instruments granted.

Benefits granted under share option plans, performance share plans and Group savings plans are implemented as decided by VINCI's Board of Directors after approval by the Shareholders' General Meeting, and are not, in general, systematically renewed. As their measurement is not directly linked to the business lines' operations, VINCI has considered it appropriate not to include the corresponding expense in operating income from ordinary activities, which is an indicator of business lines' performance, but to report it on a separate line, labelled "Share-based payment expense (IFRS 2)", in recurring operating income.

28.1 Share subscription options

Options to subscribe to shares have been granted to certain Group employees and senior executives. For some of these plans, definitive vesting of those options was conditional on performance conditions (stock market performance or financial criteria) being met. The fair value of options, calculated by an external actuary, is determined at the grant date using the Monte Carlo valuation model. That model takes account of the impact of the market performance condition if applicable. It allows a large number of scenarios to be modelled, by including in particular the valuation of assumptions about beneficiaries' behaviour on the basis of historical observations.

No new share subscription option plans were set up in 2016 or 2015.

No expense relating to share subscription option plans was recognised in 2016 (€1 million in 2015 with respect to the 2012 plan which became fully vested in April 2015).

Movements in the number and weighted average exercise prices of share subscription options were as follows in 2016:

	31/12/2016		31/12/2015
	Average exercice		price		Average exercice price
	Options	(in €)	Options	(in €)
Options in circulation at beginning of period	5,704,701	39.00	9,012,808	38.87
Options exercised	(2,896,381)		(3,284,382)
Options cancelled	(27,801)		(23,725)
Options in circulation at end of period	2,780,519	39.15	5,704,701	39.00
of which exercisable options	2,780,519		5,704,701

Options exercised in 2016 and remaining to be exercised at 31 December 2016

	Number of options
	Number of options	remaining to be	Exercise price
Share subscription option plans	exercised in 2016	exercised at 31/12/2016	(in €)
VINCI 2009	1,002,171	-	38.37
VINCI 2010	604,610	944,515	36.70
VINCI 2011	345,682	537,450	43.70
VINCI 2012	943,918	1,298,554	39.04
Total	2,896,381	2,780,519	39.15 (*)

(*) Based on the number of options remaining to be exercised at 31/12/2016.

28.2 Performance shares

Performance shares subject to vesting conditions have been granted to certain Group employees and senior executives. Plans under which the final vesting of the shares may be dependent on the realisation of financial criteria, the number of performance shares measured at fair value in the calculation of the IFRS 2 expense is adjusted for the impact of the change in the likelihood of the financial criteria being met.

Information on changes in performance share plans currently in force

Number of shares granted subject to performance conditions not vested at end of period	4,236,319	2,031,364
Shares cancelled	(44,721)	(55,277)
Shares acquired by beneficiaries	-	(1,914,460)
Shares granted	2,249,676	1,036,658
Number of shares granted subject to performance conditions at beginning of period	2,031,364	2,964,443
	31/12/2016	31/12/2015

Information on the features of the performance share plans currently in force

	Plan granted on 19/04/2016	Plan granted on 14/04/2015	Plan granted on 15/04/2014
Original number of beneficiaries	2,051	1,846	1,850
Vesting date of the shares granted	19/04/2019	14/04/2018	15/04/2017
End of conservation period for shares acquired	N/A	N/A	N/A
Number of shares granted subject to performance conditions	2,249,676	1,036,658	1,027,651
Shares cancelled	(500)	(32,225)	(42,766)
Shares acquired by beneficiaries	-	(500)	(1,675)
Number of shares granted subject to performance conditions at end of period	2,249,176	1,003,933	983,210

On 19 April 2016, VINCI's Board of Directors decided to set up a new long-term performance share plan involving conditionally allotting performance shares (2,249,676 shares) to 2,051 employees. The shares granted will only vest definitively after a period of three years. Vesting is subject to beneficiaries being employed by the Group until the end of the vesting period, and to performance conditions in respect of the performance shares.

The performance conditions are as follows:

• an internal criterion (80% weighting) consisting of the ratio at 31 December 2018 of return on capital employed (ROCE) to the average weighted average cost of capital (WACC), with each of those indicators calculated as an average over the previous three years (2016, 2017 and 2018).

This ratio must be equal to or greater than 1.1 for all performance shares granted to vest. If the ratio is between 1 and 1.1, the number of performance shares that vest will be reduced in proportion and no shares will vest if the ratio is equal to or less than 1.

• an external criterion (20% weighting) consisting of the difference, at 31 December 2018, between:
• the average total return on VINCI shares, with dividends reinvested, over a three-year period (2016, 2017 and 2018);
• and the average total return for a shareholder investing in the CAC 40 index over a three-year period (2016, 2017 and 2018).

Total shareholder returns include dividends.

The difference must be equal to or greater than +10% for all performance shares granted to vest. If the difference is between +10% and -10%, the number of performance shares that vest will be reduced in proportion and no shares will vest if the difference is equal to or less than -10%.

The 2014 and 2015 long-term incentive plans involved allotments of cash (deferred cash) and conditional allotments of performance shares.

Fair value of the performance share plans

The fair value of the performance shares has been calculated by an external actuary at the respective grant dates of the shares on the basis of the following characteristics and assumptions:

	2016 plan	2015 plan	2014 plan
Price of VINCI share on date plan was announced (in €)	66.18	56.45	52.61
Fair value of performance share at grant date (in €)	56.17	47.22	44.88
Fair value compared with share price at grant date	84.87%	83.65%	85.31%
Original maturity (in years) – vesting period	3 years	3 years	3 years
Risk-free interest rate (*)	-0.41%	-0.15%	0.28%

(*) Three-year government bond yield in the eurozone.

An expense of €62 million was recognised in 2016 in respect of performance share and long-term incentive plans for which vesting is in progress (April 2016, April 2015 and April 2014 plans), compared with €35 million in 2015 (April 2015, April 2014 and April 2013 plans).

28.3 Group savings plans

VINCI's Board of Directors defines the conditions for subscribing to Group savings plans in accordance with the authorisations granted to it by the Shareholders' General Meeting.

Group savings plan – France

In France, VINCI issues new shares reserved for employees three times a year at a subscription price that includes a 5% discount against the average stock market price over 20 trading days before the Board of Directors meeting that set the subscription price. Subscribers also benefit from an employer contribution with an annual maximum of €2,500 per person. The benefits granted in this way to Group employees are recognised in profit or loss and are valued in accordance with IFRS 2 on the basis of the following assumptions:

• length of subscription period: four months;

• length of period during which funds are frozen: five years.

The estimated number of shares subscribed to at the end of the subscription period is calculated based on a linear regression method applied to historical observations of the plans between 2006 and 2015, taking account of the cost of restrictions on the availability of units in the savings fund.

As certain restrictions apply to the sale or transfer of shares acquired by employees under these plans, the fair value of the benefit to the employee takes account of the fact that the shares acquired cannot be freely disposed of for five years. The opportunity cost of the frozen shares subscribed to is estimated from the point of view of a third party holding a diversified portfolio and prepared to acquire the frozen shares in return for a discount, which should correspond to the return demanded by a purchaser on own funds allocated to hedge against market risk over the period in which the shares are frozen (five years). The market risk is assessed on an annual basis applying a value-at-risk approach.

	2016
Group savings plans – France	First four-month period of 2017 (1 January – 30 April 2017)	Third four-month period of 2016 (1 September – 31 December 2016)	Second four-month period of 2016 (1 May – 31 August 2016)
Anticipated return from VINCI shares	4.53%	4.63%	4.92%
Subscription price (in €)	63.92	60.86	56.62
Share price at date of Board of Directors' meeting	66.88	63.69	60.29
Historical volatility of the VINCI share price	23.32%	25.01%	24.95%
Estimated number of shares subscribed	1,751,230	431,588	508,309
Estimated number of shares issued (subscriptions plus employer contribution)	2,267,875	572,903	662,327

	2015
Group Savings Plans – France	First four-month period of 2016 (1 January – 30 April 2016)	Third four-month period of 2015 (1 September – 31 December 2015)	Second four-month period of 2015 (1 May – 31 August 2015)
Anticipated return from VINCI shares	5.44%	5.77%	5.39%
Subscription price (in €)	54.62	50.69	45.15
Share price at date of Board of Directors' meeting	57.69	54.80	48.33
Historical volatility of the VINCI share price	24.72%	23.96%	25.04%
Estimated number of shares subscribed	2,065,701	678,996	679,958
Estimated number of shares issued (subscriptions plus employer contribution)	2,674,876	900,283	881,264

Group savings plan – international

In 2016, in accordance with authorisations given to the Board of Directors by the Shareholders' General Meeting, VINCI initiated new savings plans for the employees of certain foreign subsidiaries. Known as Castor International, the plans covered 29 countries in 2016: Australia, Austria, Bahrain, Belgium, Brazil, Cambodia, Canada, Chile, Czech Republic, Germany, Hong Kong, Indonesia, Luxembourg, Malaysia, Mexico, Morocco, Netherlands, New Zealand, Poland, Portugal, Romania, Singapore, Slovakia, Spain, Sweden, Switzerland, United Arab Emirates, United Kingdom and United States.

The main characteristics of these plans are as follows:

• subscription period: from 23 May to 10 June 2016 in all countries other than the UK (seven successive periods between March and September 2016 in the UK);

• employer contribution consisting of bonus shares with, as the case may be, delivery deferred for three years or immediate delivery but a threeyear vesting period;

• no lock-up period beyond the three-year vesting period for bonus shares.

Castor International plan (excluding the UK)	2016	2015	2014
Subscription price (in €)	64.90	55.65	54.16
Closing share price on the last day of the subscription period (in €)	64.67	55.47	56.38
Anticipated dividend pay-out rate	2.55%	3.35%	3.40%
Fair value of bonus shares on the last day of the subscription period (in €)	59.97	50.24	51.00

For the Group as a whole, the aggregate expense recognised in 2016 in respect of employee savings plans inside and outside France amounted to €56 million versus €59 million in 2015.

L. Other notes

29. Related party transactions

The Group's transactions with related parties mainly concern:

• remuneration and similar benefits paid to members of the governing and management bodies;

• transactions with companies over which VINCI exercises significant influence or joint ventures over which VINCI has joint control. Transactions with related parties are undertaken at market prices.

29.1 Remuneration and similar benefits paid to members of the governing and management bodies

The remuneration of the Group's company officers is determined by the Board of Directors following proposals from the Remuneration Committee.

The table below shows the remuneration and similar benefits, on a full-year basis, granted by VINCI SA and the companies that it controls to persons who, at the balance sheet date are (or, during the period, have been), members of the Group's governing bodies and Executive Committee. The corresponding amounts have been recognised and expensed in 2016 and 2015 as follows:

	Members of governing bodies and the Executive Committee
(in € thousands)	2016	2015
Remuneration	12,091	12,581
Employer social contributions	8,086	8,217
Post-employment benefits	2,486	2,432
Termination benefits	-	89
Share-based payments (*)	7,884	5,239
Directors' fees	1,080	1,204

(*) This amount is determined in accordance with IFRS 2 and as described in Note K.28 "Share-based payments".

The variable portion of remuneration and similar benefits relating to 2016 is an estimate, for which a provision has been taken in the period.

The aggregate amount of retirement benefit obligations (contractual lump sums payable on retirement and supplementary defined benefit plans) in favour of members of the Group's governing bodies and Executive Committee amounted to €75.1 million at 31 December 2016 (€71.9 million at 31 December 2015).

29.2 Other related parties

Financial information on companies accounted for under the equity method is given in Note E.10.2 "Aggregated financial information".

Qatar Holding LLC owns 4.0% of VINCI. VINCI Construction Grands Projets (49%) and Qatari Diar Real Estate Investment Company (QD, 51%) jointly own Qatari Diar VINCI Construction (QDVC), which is accounted for under the equity method. This company's corporate object is the development of construction activities in Qatar and international markets. It generated revenue of €795 million in 2016.

Group companies can also carry out work for principals in which QD may have a shareholding. Lastly, the Group has normal but non-material business relations with companies in which members of the VINCI Board of Directors are senior executives or directors.

30. Statutory Auditors' fees

As recommended by the AMF, this table includes only fully consolidated companies.

		Deloitte & Associés network				KPMG network
(in € millions)	2016	%	2015	%	2016	%	2015	%
Audit
Statutory audit	7.6	86%	7.5	87%	8.6	79%	8.5	86%
VINCI SA	0.4	5%	0.3	4%	0.4	4%	0.3	4%
Fully consolidated subsidiaries	7.2	81%	7.2	83%	8.2	75%	8.2	82%
Directly linked services and work	0.9	10%	0.8	9%	1.9	17%	0.8	8%
VINCI SA	0.3	3%	-	0%	0.6	5%	0.4	4%
Fully consolidated subsidiaries	0.6	7%	0.8	9%	1.3	12%	0.4	4%
Subtotal, audit	8.5	96%	8.3	97%	10.5	96%	9.3	94%
Other services
Legal, tax and employment	0.3	4%	0.3	3%	0.4	4%	0.6	6%
Other	-	-	-	-	-	-	-	-
Subtotal, other services	0.3	4%	0.3	3%	0.4	4%	0.6	6%
Total	8.8	100%	8.6	100%	10.9	100%	9.9	100%

M. Note on litigation

The companies comprising the VINCI Group are sometimes involved in litigation arising from their activities. The related risks are assessed by VINCI and the subsidiaries involved on the basis of their knowledge of the cases, and provisions are taken in consequence as appropriate.

The main legal, administrative or arbitration proceedings that were in progress on or had ended by 31 December 2016 were as follows:

• King County, the county seat of which is Seattle, Washington, was in dispute with a consortium in which VINCI Construction Grands Projets has a 60% share. The dispute concerned the performance of a contract for the construction of two underground tunnels known as Brightwater Central and more specifically liability for the costs arising from particularly difficult geotechnical conditions. In a decision on 7 September 2016, the Washington State Supreme Court confirmed the decision by the Washington Court of Appeals on 9 November 2015, which itself confirmed the decision by the King County Superior Court on 7 May 2013, which formalised the jury verdict handed down on 20 December 2012. Those decisions have been implemented.

• SNCF initiated proceedings in the Paris Administrative Court on 14 March 2011 against around 20 construction companies, including several Group subsidiaries, seeking €59.4 million for damages it claims to have suffered as a result of contracts formed in 1993 relating to the construction of civil engineering structures at the Magenta and Saint Lazare Condorcet railway stations. These proceedings followed a ruling made against those companies by the Conseil de la concurrence(*) (competition authority) on 21 March 2006. On 8 March 2016, the Paris Administrative Court noted the reciprocal discontinuance of proceedings and waiver of rights of action between SNCF Mobilités and all VINCI Group companies involved in these proceedings, following a settlement.

• The Czech Republic's roads and motorways department (RMD) has made several claims against Eurovia CS, a Eurovia subsidiary based in the Czech Republic, as well as several other non-Group companies. These claims concern works carried out between 2003 and 2007 in building the D47 motorway. In late 2012, the RMD commenced arbitration and legal proceedings challenging (I) the inflation coefficients used in revising the price of works and (II) the payment of various sums for what RMD alleges was defective work affecting the roads and engineering structures that were built. As regards the claims relating to inflation coefficients, all awards made under arbitration decisions have been much smaller than those sought by RMD. Regarding the other claims, relating mainly to defective work, the RMD is currently claiming CZK3.22 billion, of which Eurovia CS's share would be around 75%. Repairs have been carried out since the start of 2014, costing substantially less than that amount, and technical assessments are under way on the worksite. In view of the current situation, the Group considers that this dispute will not have a material effect on its financial situation.

• Soletanche Bachy France has submitted a request for arbitration to the International Chamber of Commerce after ACT (Aqaba Container Terminal) terminated a contract for the construction of an extension to a container terminal in the port of Aqaba in Jordan. Soletanche Bachy is disputing the grounds for terminating the contract, and is claiming \$10 million in damages. ACT contends that it had valid grounds for terminating the contract and that it incurred additional costs in completing the works, and is counter-claiming \$44 million in damages. In view of the current situation, the Group considers that this dispute will not have a material effect on its financial situation.

• In 2011, Freyssinet Canada undertook to make prefabricated beams for PIC under a contract worth CAD23 million. Prefabrication work started in 2012 but was suspended in 2013 because the project owner took the view that the beams were defective. PIC terminated the supply contract, resulting in legal proceedings before the Superior Court of Ontario. Freyssinet Canada is claiming CAD11 million for wrongful termination and PIC is claiming CAD55 million from Freyssinet Canada and several Soletanche Freyssinet group companies for losses arising from the alleged defects. In view of the current situation, the Group considers that this dispute is unlikely to have a material effect on its financial situation.

• There are several disputes between Consortium Stade de France (CSDF), which operates the Stade de France, and the sporting federations that use the stadium. On 13 June 2013, the French Rugby Federation (Fédération française de rugby or FFR) commenced proceedings against CSDF before the Paris regional court (Tribunal de Grande Instance de Paris) on the grounds of "significant contractual imbalance" in the rights and obligations arising from the 15-year stadium provision agreement formed on 26 April 1995. The FFR claimed that the purported imbalance caused it harm, which it quantified at €164 million, corresponding to the amount it claims was wrongly received by CSDF. In separate proceedings, the FFR is claiming €2.3 million in damages for various types of purported commercial harm arising in particular from the cancellation of a match. The Paris regional court decided to stay these proceedings pending a final decision in the proceedings initiated by the FFR against the French state on 17 May 2013 regarding certain clauses in the concession contract that it claimed to be unlawful. In a judgment on 3 October 2014, the Paris administrative court rejected FFR's action. After FFR appealed, the Paris administrative appeal court also rejected FFR's claims. As a result of that decision, which is now definitive, the proceedings involving a claim of significant contractual imbalance have resumed before the Paris Regional Court. In addition, the FFR, for reasons of territorial jurisdiction, has commenced new proceedings against the CSDF before the Bobigny regional court regarding the cancellation of the match, and the stayed proceedings have also resumed.

The French Football Federation (Fédération française de football or FFF) commenced proceedings against CSDF before the Paris regional court on 1 September 2015, seeking a ruling that the stadium provision agreement formed on 3 September 2010 and for a period expiring on 28 April 2025 was void. The FFF is claiming that it has suffered harm, which it has not yet quantified. In addition, the FFF commenced proceedings against the French state before the Paris administrative court on 21 September 2015, seeking an order forcing the state to terminate the concession contract formed with CSDF. However, in submissions made on 5 December 2016, the FFF asked the administrative court to recognise formally its discontinuance of the proceedings. In view of the current situation, the Group considers that these disputes will not have a material effect on its financial situation.

To the Company's knowledge, there are no other legal, administrative or arbitration proceedings that are likely to have, or have had in the last 12 months, a material effect on the business, financial performance, net assets or financial situation of the Company or Group.

N. Post-balance sheet events

31. Appropriation of 2016 net income

The Board of Directors finalised the consolidated financial statements for the year ended 31 December 2016 on 7 February 2017. These financial statements will only become definitive when approved by the Shareholders' General Meeting. A Resolution will be put to the Shareholders' Ordinary General Meeting of 20 April 2017 for the payment of a dividend of €2.10 per share in respect of 2016. Taking account of the interim dividend already paid on 10 November 2016 (€0.63 per share), this would result in a final dividend of €1.47 per share to be paid on 27 April 2017 (ex-date: 25 April 2017).

32. Other post-balance sheet events

32.1 Bond issue by ASF as part of its EMTN programme

On 18 January 2017, as part of its EMTN programme, ASF issued €1.0 billion of bonds with an annual coupon of 1.25% and due to mature in January 2027.

32.2 Aerodom bond issue

On 12 January 2017, as part of a Rule 144A placement, Aerodom issued \$317 million of 12-year amortising bonds.

32.3 Motorway investment plan

On 26 January 2017, VINCI Autoroutes signed a €432 million motorway investment plan with the French government. The plan consists of 25 operations to improve transport links in the French regions across the ASF, Cofiroute and Escota networks, and will particularly improve connections to urban and suburban areas by upgrading 19 interchanges.

These projects will be co-financed by the regional authorities concerned and by VINCI Autoroutes through additional toll increases of between 0.161% and 0.258% in 2019, 2020 and 2021.

Subject to the approval of the French rail and road regulatory body (Arafer) followed by the publication of the corresponding decrees in the Conseil d'Etat, it will be possible to start the first operations in late 2017.

O. Other information on the consolidation scope

Other consolidation rules and methods

Intragroup transactions

Reciprocal operations and transactions relating to assets, liabilities, income and expenses between companies that are fully consolidated are eliminated in the consolidated financial statements.

Where a fully consolidated Group entity carries out a transaction with a joint venture or associate that is accounted for under the equity method, income and losses resulting from the transaction are only recognised in the Group's consolidated financial statements to the extent of the interest owned by third parties in the joint venture or associate.

Translation of the financial statements of foreign companies and establishments

In most cases, the functional currency of companies and establishments is their local currency.

The financial statements of foreign companies of which the functional currency is different from that used in preparing the Group's consolidated financial statements are translated at the closing rate for balance sheet items and at the average rate for the period for income statement items. Any resulting translation differences are recognised under other comprehensive income. Goodwill relating to foreign entities forms part of the assets acquired and is therefore denominated in the company's functional currency and translated at the exchange rate in force at the balance sheet date.

Foreign currency transactions

Transactions in foreign currency are translated into euros at the exchange rate at the transaction date. Assets and monetary liabilities denominated in foreign currencies are translated at the closing rate. Foreign exchange gains and losses are recognised in income.

Foreign exchange gains and losses arising on loans denominated in foreign currency or on foreign currency exchange rate derivatives qualifying as hedges of net investments in foreign subsidiaries are recorded under currency translation differences in equity.

Business combinations

Under IFRS 3 Amended, the cost of a business combination is the fair value, at the date of exchange, of the assets given, liabilities assumed, and/or equity instruments issued by the acquirer in exchange for control of the acquiree. Contingent price adjustments are included in the cost of the business combination and are measured at fair value at each balance sheet date. From the acquisition date, any subsequent changes to this fair value resulting from events after control was acquired are recognised in profit or loss.

Expenses that are directly attributable to the acquisition, such as professional fees for due diligence and other related fees, are expensed as they are incurred. They are presented in the "Impact of changes in scope and gain/(loss) on disposals of shares" item on the income statement.

Non-controlling interests in the acquiree, where they give their holders present ownership interests in the entity (voting rights, a share of earnings, etc.) and entitle them to a proportionate share of net assets in the event of liquidation, are measured either at their share of the acquiree's net identifiable assets, or at their fair value. This option is applied on a case-by-case basis for each acquisition.

On the date control is acquired, the cost of acquisition is allocated by recognising the identifiable assets acquired and liabilities assumed from the acquiree at their fair value at that date, except for tax assets and liabilities and employee benefits, which are measured according to their reference standard (IAS 12 and IAS 19 respectively) and asset groups classified as held for sale, which are recognised under IFRS 5 at their fair value less costs to sell. The positive difference between the cost of acquisition and the fair value of the identifiable assets and liabilities acquired constitute goodwill. Where applicable, goodwill can include a portion of the fair value of non-controlling interests if the full goodwill method has been selected.

The Group has 12 months from the date of acquisition to finalise the accounting for business combinations.

In the case of a business combination achieved in stages, previously acquired shareholdings in the acquiree are measured at fair value at the date of acquisition of control. Any resulting gain or loss is recognised in profit or loss.

Transactions between shareholders, acquisitions and disposals of non-controlling interests after acquisition of control

In accordance with IFRS 10, acquisitions or disposals of non-controlling interests, with no impact on control, are considered as transactions with the Group's shareholders. The difference between the consideration paid to increase the percentage shareholding in an already-controlled entity and the supplementary share of equity thus acquired is recorded under equity attributable to owners of the parent. Similarly, a decrease in the Group's percentage interest in an entity that continues to be controlled is booked in the accounts as a transaction between shareholders, with no impact on profit or loss. Professional fees and other costs relating to acquisitions and disposals of non-controlling interests that have no impact on control, and any associated tax effects, are recorded under equity. Cash flows related to transactions between shareholders are presented under cash flows (used in)/from financing activities in the consolidated cash flow statement.

Put options granted to non-controlling shareholders

Put options (options to sell) granted to the non-controlling shareholders of certain Group subsidiaries are recognised under other non-current liabilities for the present value of the exercise price of the option and as a corresponding reduction of consolidated equity (non-controlling interest and equity attributable to equity holders of the parent for the surplus, if any).

Assets held for sale and discontinued operations (halted, sold or in the process of being sold)

Assets held for sale

Non-current assets of which the sale has been decided during the period are shown on a separate line of the balance sheet whenever the sale is regarded as highly probable and expected to be completed within 12 months. Such assets are measured at the lower of their carrying amount and fair value, which corresponds to the estimated selling price less costs to sell.

Income statement and cash flow items relating to assets held for sale are not shown on a separate line as long as they do not meet the definition of discontinued operations.

Discontinued operations

Discontinued operations (halted or sold) or operations in the process of being sold concern either a business line or a geographical area of business that is material for the Group and that forms part of a single disposal plan, or a subsidiary acquired exclusively with a view to resale. Assets connected with discontinued operations, if held for sale, are measured at the lower of their carrying amount and fair value less costs to sell. Income statement and cash flow items relating to these discontinued operations are shown on a separate line for all the periods presented.

List of the main controlled companies at 31 December 2016

FC: fully consolidated companies

	31 December 2016		31 December 2015
	Consolidation method	VINCI's percentage holding	Consolidation method	VINCI's percentage holding
1. CONCESSIONS
VINCI Autoroutes	FC	100.00	FC	100.00
Autoroutes du Sud de la France (ASF)	FC	100.00	FC	100.00
Escota	FC	99.29	FC	99.29
Cofiroute	FC	100.00	FC	100.00
Arcour (A19)	FC	100.00	FC	100.00
Arcos - company holding the concession for the western Strasbourg bypass	FC	100.00
VINCI Airports	FC	100.00	FC	100.00
ANA (Portugal)	FC	100.00	FC	100.00
SCA - Société Concessionnaire de l'Aéroport de Pochentong (Cambodia)	FC	70.00	FC	70.00
SCAGO - Grand Ouest airport	FC	85.00	FC	85.00
SEAGI - Grenoble airport	FC	100.00	FC	100.00
SEACA - Chambéry airport	FC	100.00	FC	100.00
SEACFA - Clermont Ferrand airport	FC	100.00	FC	100.00
SEAQC - Quimper-Cornouaille airport	FC	100.00	FC	100.00
SEAPB - Poitiers Biard airport	FC	100.00	FC	100.00
Société d'exploitation de l'Aéroport de Toulon-Hyères	FC	100.00	FC	100.00
VINCI Airports International	FC	100.00	FC	100.00
Aéroports de Lyon	FC	30.60
ADL Participations	FC	51.00
Aerodom - Aeropuertos Dominicanos Siglo XXI	FC	100.00
Société d'exploitation de l'Aéroport du Castellet	FC	100.00
VINCI Airports Atlantica	FC	100.00
VINCI Stadium	FC	100.00	FC	100.00
Consortium Stade de France	FC	66.67	FC	66.67
Le Mans Stadium	FC	100.00	FC	100.00
London Olympic Stadium	FC	100.00	FC	100.00
VINCI Highways
Lamsac (Peru)	FC	100.00
Pex (Peru)	FC	100.00
VINCI Railways
MESEA	FC	70.00	FC	70
Others concessions and holding companies
Caraibus (Martinique)	FC	100.00	FC	100.00
VINCI Concessions SAS	FC	100.00	FC	100.00

	31 December 2016		31 December 2015
	Consolidation method	VINCI's percentage holding	Consolidation method	VINCI's percentage holding
2. CONTRACTING
VINCI Energies
VINCI Energies France
Santerne Nord Picardie Infra	FC	100.00	FC	100.00
Entreprise Demouselle	FC	100.00	FC	100.00
Cegelec Franche-Comté	FC	100.00	FC	100.00
SDEL Infi	FC	100.00	FC	100.00
L'Entreprise Électrique	FC	100.00	FC	100.00
GT Le Mans	FC	100.00	FC	100.00
Cegelec IBDL	FC	100.00	FC	100.00
Centre Électrique Entreprise	FC	100.00	FC	100.00
Cegelec Space SA	FC	100.00	FC	100.00
Graniou Azur	FC	100.00	FC	100.00
Novintel	FC	100.00	FC	100.00
Santerne Mediterranée	FC	100.00	FC	100.00
Santerne Centre-Est Télécommunication	FC	100.00	FC	100.00
Graniou Île-de-France	FC	100.00	FC	100.00
Imoptel	FC	100.00	FC	100.00
Santerne Nord Telecom	FC	100.00	FC	100.00
Cegelec Ouest Telecoms	FC	100.00	FC	100.00
Synerail Construction	FC	60.00	FC	60.00
APX Intégration	FC	100.00	FC	100.00
Interact Systemes IDF	FC	100.00	FC	100.00
Masselin Communication	FC	100.00	FC	100.00
SDEL Vidéo Télécom	FC	100.00	FC	100.00
Cigma	FC	100.00	FC	100.00
Cegelec Dauphiné	FC	100.00	FC	100.00
Cegelec Industrie Sud-Est	FC	100.00	FC	100.00
Cegelec Défense et Naval SE	FC	100.00	FC	100.00
Smart Grid Energy	FC	100.00
CEF Nord	FC	100.00	FC	100.00
Cegelec Nord Industrie	FC	100.00	FC	100.00
Cegelec Lorraine-Alsace	FC	100.00	FC	100.00
Électricité Industrielle de l'Est	FC	100.00	FC	100.00
Cegelec Haute-Normandie	FC	100.00	FC	100.00
Actemium Process Automotive	FC	100.00	FC	100.00
Cegelec Paris	FC	100.00	FC	100.00
Cigma Île-de-France	FC	100.00	FC	100.00
GTIE Infi	FC	100.00	FC	100.00
Cegelec Toulouse	FC	100.00	FC	100.00
Cegelec Polynésie	FC	100.00	FC	100.00
Cegelec Pau	FC	100.00	FC	100.00
Cegelec Bordeaux	FC	100.00	FC	100.00
Barillec	FC	99.99	FC	99.99
Établissements Jean Graniou	FC	100.00	FC	100.00
Santerne Marseille	FC	100.00	FC	100.00
Tunzini Toulouse	FC	100.00	FC	100.00
Cegelec Loire-Océan	FC	100.00	FC	100.00
Cegelec Portes de Bretagne	FC	100.00	FC	100.00
Masselin Energie	FC	99.95	FC	99.95
Saga Entreprise	FC	100.00	FC	100.00
Lefort Francheteau	FC	100.00	FC	100.00
Phibor Entreprises	FC	100.00	FC	100.00
Santerne Île-de-France	FC	100.00	FC	100.00
Tunzini	FC	100.00	FC	100.00
SDEL Tertiaire	FC	100.00	FC	100.00

		31 December 2016		31 December 2015
	Consolidation method	VINCI's percentage holding	Consolidation method	VINCI's percentage holding
GTIE Tertiaire	FC	100.00	FC	100.00
Saga Tertiaire	FC	100.00	FC	100.00
Cegelec Tertiaire Île-de-France	FC	100.00	FC	100.00
Santerne Nord Tertiaire	FC	100.00	FC	100.00
Tunzini Protection Incendie	FC	100.00	FC	100.00
Protec Feu	FC	100.00	FC	100.00
Energilec	FC	100.00	FC	100.00
Opteor IDF Tertiaire	FC	100.00	FC	100.00
Arteis	FC	100.00	FC	100.00
Cegelec Missenard	FC	100.00	FC	100.00
Cegelec Elmo	FC	100.00	FC	100.00
Faceo FM IDF	FC	100.00	FC	100.00
Faceo FM Centre-Ouest	FC	100.00	FC	100.00
Faceo FM Sud-Ouest	FC	100.00	FC	100.00
Cegelec Maintenance Tertiaire Sud-Est	FC	100.00	FC	100.00
Faceo FM Centre-Est	FC	100.00	FC	100.00
VINCI Energies International Systems
Jetec Ingénierie (France)	FC	100.00	FC	100.00
Cegelec Oil & Gas (France)	FC	100.00	FC	100.00
Mentor IMC Group (UK)	FC	100.00	FC	100.00
Cegelec Abu Dhabi	FC	100.00	FC	100.00
Cegelec SAS (Power Plant) (France)	FC	100.00	FC	100.00
Cegelec Mobility (France)	FC	100.00	FC	100.00
Cegelec AS (Czech Republic)	FC	100.00	FC	100.00
Cegelec Renewable Energies	FC	100.00	FC	100.00
Cegelec Nucléaire Sud-Est (France)	FC	100.00	FC	100.00
Cegelec NDT-PSC (France)	FC	100.00	FC	100.00
CG3N (France)	FC	100.00	FC	100.00
Cegelec CEM (France)	FC	100.00	FC	100.00
Cegelec NDT-PES (France)	FC	100.00	FC	100.00
ISDEL Energy	FC	100.00	FC	100.00
Tunzini Nucléaire	FC	100.00	FC	100.00
Entreprise d'Électricité et d'Équipement (France)	FC	100.00	FC	100.00
SDEL Contrôle Commande (France)	FC	100.00	FC	100.00
Fournié Grospaud Synerys (France)	FC	100.00	FC	100.00
Fournié Grospaud Energie (France)	FC	100.00	FC	100.00
SDEL Elexa	FC	100.00	FC	100.00
Cegelec SA (Brazil)	FC	100.00	FC	100.00
Orteng Engenharia (Brazil)	FC	100.00	FC	100.00
PT Indokomas Buana Perkasa (Indonesia)	FC	99.72	FC	99.72
ELECTRIX Pty (Australia)	FC	100.00	FC	100.00
ELECTRIX Ltd (New Zealand)	FC	100.00	FC	100.00
J&P Richardson Industries Pty Ltd (Australia)	FC	100.00
Cegelec (Morocco)	FC	98.70	FC	98.70
VINCI Energies Europe
Spark Iberica (Spain)	FC	100.00	FC	100.00
Tecuni (Spain)	FC	100.00	FC	100.00
Sotécnica (Portugal)	FC	80.00	FC	80.00
Emil Lundgren Vast AB (Sweden)	FC	100.00	FC	100.00
Axians AB (Sweden)	FC	100.00	FC	100.00
Axians Communication AB (Sweden)	FC	100.00	FC	100.00
Actemium Controlmatic GmbH (Germany)	FC	100.00	FC	100.00
Actemium Cegelec GmbH (Germany)	FC	100.00	FC	100.00
Actemium Cegelec Services GmbH (Germany)	FC	100.00	FC	100.00

	31 December 2016		31 December 2015
	Consolidation method	VINCI's percentage holding	Consolidation method	VINCI's percentage holding
H&F Industry GmbH (Germany)	FC	70.00	FC	70.00
Calanbau Brandschutzanlagen GmbH (Germany)	FC	100.00	FC	100.00
G+H Isolierung GmbH (Germany)	FC	100.00	FC	100.00
G+H Schallschutz GmbH (Germany)	FC	100.00	FC	100.00
Isolierungen Leipzig GmbH (Germany)	FC	100.00	FC	100.00
Wrede & Niedecken GmbH (Germany)	FC	100.00	FC	100.00
GFA Gesellschaft für Anlagenbau GmbH (Germany)	FC	100.00	FC	100.00
Calanbau - GFA Feuerschutz GmbH (Germany)	FC	100.00	FC	100.00
Actemium BEA GmbH (Germany)	FC	100.00	FC	100.00
Axians GA Netztechnik GmbH (Germany)	FC	100.00	FC	100.00
Omexom Frankenluk GmbH (Germany)	FC	100.00	FC	100.00
Omexom GA Nord GmbH (Germany)	FC	100.00	FC	100.00
Omexom GA Süd GmbH (Germany)	FC	100.00	FC	100.00
Omexom Hochspannung GmbH (Germany)	FC	100.00	FC	100.00
Omexom GA Energo technik s.r.o. (Czech Republic)	FC	78.34	FC	78.34
Omexom Umspannwerke (Germany)	FC	100.00	FC	100.00
G+H Kühllager und Industriebau (Germany)	FC	100.00	FC	100.00
G+H Innenausbau (Germany)	FC	100.00	FC	100.00
Lagrange TWM GmbH (Germany)	FC	100.00	FC	100.00
SKE Support Services GmbH (Germany)	FC	100.00	FC	100.00
SKE Facility Management GmbH (Germany)	FC	100.00	FC	100.00
Stingl GmbH (Germany)	FC	100.00	FC	100.00
SKE Technical Services GmbH (Germany)	FC	100.00	FC	100.00
VINCI Facilities GmbH (Germany)	FC	100.00	FC	100.00
SKE S.R.L. (Italy)	FC	100.00	FC	100.00
Axians Networks & Solutions GmbH (Germany)	FC	100.00	FC	100.00
Fritz & Macziol Software und Computervertrieb GmbH (Germany)	FC	100.00	FC	100.00
Infoma Software Consult GmbH (Germany)	FC	100.00	FC	100.00
Axians ICT Austria Gmbh (Austria)	FC	100.00	FC	100.00
Graniou Atem (Poland)	FC	100.00	FC	100.00
Tiab (Romania)	FC	93.80	FC	93.70
Cegelec AT (Austria)	FC	100.00	FC	100.00
Etavis AG (Switzerland)	FC	100.00	FC	100.00
Etavis Kriegel + Schaffner AG (Switzerland)	FC	100.00	FC	100.00
Etavis Grossenbacher AG (Switzerland)	FC	100.00	FC	100.00
Axians Micatel AG (Switzerland)	FC	100.00	FC	100.00
Cegelec Infra Technics NV (Belgium)	FC	100.00	FC	100.00
Promatic-B (Belgium)	FC	100.00	FC	100.00
Cegelec SA (Belgium)	FC	100.00	FC	100.00
Cegelec Building Services SA (Belgium)	FC	100.00	FC	100.00
Cegelec Industry NV/SA (Belgium)	FC	100.00	FC	100.00
AEG Belgium (Belgium)	FC	100.00	FC	100.00
Plant Solutions Zuid-Oost (Netherlands)	FC	100.00	FC	100.00
Axians Communication Solutions B.V. (Netherlands)	FC	100.00	FC	100.00
Cegelec BV (Netherlands)	FC	100.00	FC	100.00
Actemium UK	FC	100.00	FC	100.00
Powerteam Electrical Services Ltd (UK)	FC	100.00	FC	100.00
Axians Networks Limited (UK)	FC	100.00	FC	100.00

	31 December 2016		31 December 2015
	Consolidation method	VINCI's percentage holding	Consolidation method	VINCI's percentage holding
Eurovia
Eurovia France
Eurovia	FC	100.00	FC	100.00
Eurovia Management	FC	100.00	FC	100.00
Eurovia Stone	FC	100.00	FC	100.00
Carrières de Luché	FC	100.00	FC	100.00
Carrières Kléber Moreau	FC	89.97	FC	89.97
Compagnie Industrielle des Fillers et Chaux	FC	100.00	FC	100.00
Durance Granulats	FC	53.00	FC	53.00
EJL Île-de-France	FC	100.00	FC	100.00
EJL Nord	FC	100.00	FC	100.00
Emulithe	FC	100.00	FC	100.00
Eurovia Alpes	FC	100.00	FC	100.00
Eurovia Alsace-Franche-Comté	FC	100.00	FC	100.00
Eurovia Aquitaine	FC	100.00	FC	100.00
Eurovia Atlantique	FC	100.00	FC	100.00
Eurovia Basse-Normandie	FC	100.00	FC	100.00
Eurovia Bitumes Sud-Ouest	FC	100.00	FC	100.00
Eurovia Bourgogne	FC	100.00	FC	100.00
Eurovia Bretagne	FC	100.00	FC	100.00
Eurovia Centre-Loire	FC	100.00	FC	100.00
Eurovia Champagne Ardenne	FC	100.00	FC	100.00
Eurovia Drôme-Ardèche-Loire-Auvergne	FC	100.00	FC	100.00
Eurovia Haute-Normandie	FC	100.00	FC	100.00
Eurovia Île-de-France	FC	100.00	FC	100.00
Eurovia Lorraine Eurovia Méditerranée	FC FC	100.00 100.00	FC FC	100.00 100.00
Eurovia Midi-Pyrénées	FC	100.00	FC	100.00
Eurovia Pas-de-Calais	FC	100.00	FC	100.00
Eurovia Picardie	FC	100.00	FC	100.00
Eurovia Poitou-Charentes-Limousin	FC	100.00	FC	100.00
Matériaux Routiers Franciliens	FC	100.00	FC	100.00
Valentin	FC	100.00	FC	100.00
Caraib Moter (Martinique)	FC	74.50	FC	74.50
Carrières Unies de Porphyre SA (CUP) (Belgium)	FC	100.00	FC	100.00
Eurovia Belgium (Belgium)	FC	100.00	FC	100.00
Eurovia Europe, rail and specialities
Cardem	FC	100.00	FC	100.00
Signature SAS	FC	100.00	FC	100.00
SAR - Société d'Applications Routières	FC	100.00	FC	100.00
ETF	FC	100.00	FC	100.00
Eurovia Teerbau (Germany)	FC	100.00	FC	100.00
Eurovia VBU (Germany)	FC	100.00	FC	100.00
Eurovia Beton GmbH (Germany)	FC	100.00	FC	100.00
Eurovia Industrie GmbH (Germany)	FC	100.00	FC	100.00
Elbekies (Germany)	FC	100.00	FC	100.00
SKUBB - SAND + KIES Union GmbH Berlin-Brandenburg (Germany) Probisa Vias y Obras (Spain)	FC FC	65.40 100.00	FC FC	65.40 100.00
Eurovia Lietuva (Lithuania)	FC	99.95	FC	99.95
Eurovia Polska (Poland)	FC	100.00	FC	100.00
Eurovia Kruszywa (Poland)	FC	100.00	FC	100.00
Eurovia CS (Czech Republic)	FC	100.00	FC	100.00
Eurovia Kamenolomy CZ (Czech Republic)	FC	100.00	FC	100.00
Viarom Construct SRL (Romania)	FC	96.73	FC	96.73
Eurovia SK (Slovakia)	FC	99.19	FC	99.19

		31 December 2016		31 December 2015
	Consolidation method	VINCI's percentage holding	Consolidation method	VINCI's percentage holding
Eurovia Americas & United Kingdom
Construction DJL (Canada)	FC	100.00	FC	100.00
Carmacks Enterprises Ltd (Canada)	FC	100.00	FC	100.00
Carmacks Maintenance Services Ltd (Canada)	FC	100.00	FC	100.00
B.A. Blacktop (Canada)	FC	100.00
Eurovia Quebec Construction Inc. (Canada)	FC	100.00	FC	100.00
Bitumix (Chile)	FC	50.10	FC	50.10
Productos Bituminosos (Chile)	FC	50.10	FC	50.10
Hubbard Construction (USA)	FC	100.00	FC	100.00
Blythe Construction (USA)	FC	100.00	FC	100.00
J.L. Polynésie (French Polynesia)	FC	82.99	FC	82.99
Ringway Infrastructure Services Ltd (UK)	FC	100.00	FC	100.00
Eurovia Infrastructure Ltd (UK)	FC	100.00	FC	100.00
Ringway Hounslow Highways Ltd (UK)	FC	100.00	FC	100.00
Ringway Island Roads (UK)	FC	100.00	FC	100.00
VINCI Construction
VINCI Construction France	FC	100.00	FC	100.00
Bateg	FC	100.00	FC	100.00
Campenon Bernard Construction	FC	100.00	FC	100.00
GTM Bâtiment	FC	100.00	FC	100.00
Petit	FC	100.00	FC	100.00
Dumez Île-de-France	FC	100.00	FC	100.00
Sicra Île-de-France	FC	100.00	FC	100.00
Sogea Travaux Publics et Industriels en Île-de-France	FC	100.00	FC	100.00
Chantiers Modernes Construction	FC	100.00	FC	100.00
GTM TP Île-de-France	FC	100.00	FC	100.00
Sogea Île-de-France Hydraulique	FC	100.00	FC	100.00
Botte Fondations	FC	100.00	FC	100.00
EMCC	FC	100.00	FC	100.00
Campenon Bernard Régions	FC	100.00	FC	100.00
Sogea Nord-Ouest	FC	100.00	FC	100.00
Sogea Nord-Ouest TP	FC	100.00	FC	100.00
Sogea Centre	FC	100.00	FC	100.00
Sogea Atlantique BTP	FC	100.00	FC	100.00
Bourdarios	FC	100.00	FC	100.00
Sogea Sud-Ouest Hydraulique	FC	100.00	FC	100.00
Sogea Caroni	FC	100.00	FC	100.00
Sogea Picardie	FC	100.00	FC	100.00
Dumez Méditerranée	FC	100.00	FC	100.00
GTM Sud	FC	100.00	FC	100.00
Sogea Sud	FC	100.00	FC	100.00
Dumez Sud	FC	100.00	FC	100.00
Les Travaux du Midi	FC	100.00	FC	100.00
Citinea Ouvrages Fonctionnels	FC	100.00	FC	100.00
GTM Halle	FC	100.00	FC	100.00
GTM Bâtiment Aquitaine	FC	100.00	FC	100.00

	31 December 2016		31 December 2015
	Consolidation method	VINCI's percentage holding	Consolidation method	VINCI's percentage holding
VINCI Construction International Network
Sogea-Satom and its subsidiaries (various African countries)	FC	100.00	FC	100.00
SBTPC - Société Bourbonnaise de Travaux Publics et de Construction (Reunion Island)	FC	100.00	FC	100.00
Sogea Réunion	FC	100.00	FC	100.00
Sogea Mayotte	FC	100.00	FC	100.00
GTM Guadeloupe	FC	100.00	FC	100.00
Getelec TP (Guadeloupe)	FC	100.00	FC	100.00
Nofrayane (French Guiana)	FC	100.00	FC	100.00
Dumez-GTM Calédonie (New Caledonia)	FC	100.00	FC	100.00
Warbud (Poland)	FC	99.74	FC	99.74
SMP CZ (Czech Republic)	FC	100.00	FC	100.00
Prumstav (Czech Republic)	FC	100.00	FC	100.00
HEB Construction (New Zealand)	FC	100.00	FC	100.00
Soletanche Freyssinet	FC	100.00	FC	100.00
Soletanche Bachy France	FC	100.00	FC	100.00
Soletanche Bachy Pieux SAS	FC	100.00	FC	100.00
Bermingham (Canada)	FC	80.63	FC	80.63
Grupo Rodio Kronsa (Spain)	FC	100.00	FC	100.00
Nicholson Construction Company Inc (USA)	FC	100.00	FC	100.00
Bachy Soletanche Group Ltd (Hong Kong)	FC	100.00	FC	100.00
Cimesa (Mexico)	FC	100.00	FC	100.00
Soletanche Polska (Poland)	FC	100.00	FC	100.00
Roger Bullivant (UK)	FC	100.00	FC	100.00
Bachy Soletanche Ltd (UK)	FC	100.00	FC	100.00
Zetas (Turkey)	FC	60.00	FC	60.00
Freyssinet France	FC	100.00	FC	100.00
Freyssinet Menard Saudi Arabia (Saudi Arabia)	FC	100.00	FC	100.00
Freyssinet Australia (Australia)	FC	100.00	FC	100.00
Freyssinet International et Cie (USA)	FC	100.00	FC	100.00
Freyssinet de Mexico (Mexico)	FC	79.98	FC	79.98
Freyssinet UK (UK)	FC	100.00	FC	100.00
Menard (France)	FC	100.00	FC	100.00
The Reinforced Earth Cy - RECO (USA)	FC	100.00	FC	100.00
Nuvia Process (ex-Salvarem)	FC	100.00	FC	100.00
Nuvia Support (ex-Essor)	FC	100.00	FC	100.00
Nuvia Ltd (UK)	FC	100.00	FC	100.00
VINCI plc (UK)	FC	100.00	FC	100.00
VINCI Construction UK	FC	100.00	FC	100.00
VINCI Investments Ltd	FC	100.00	FC	100.00
Taylor Woodrow Construction	FC	100.00	FC	100.00
Entrepose	FC	100.00	FC	100.00
Entrepose Projets	FC	100.00	FC	100.00
Spiecapag	FC	100.00	FC	100.00
Geocean	FC	100.00	FC	100.00
Entrepose Services	FC	100.00	FC	100.00
Cofor	FC	95.11	FC	95.11
Geostock	FC	90.00	FC	90.00
VINCI Environnement	FC	100.00	FC	100.00

	31 December 2016		31 December 2015
	Consolidation method	VINCI's percentage holding	Consolidation method	VINCI's percentage holding
VINCI Construction Grands Projets	FC	100.00	FC	100.00
VINCI Construction Terrassement	FC	100.00	FC	100.00
Dodin Campenon Bernard	FC	100.00	FC	100.00
VINCI Immobilier
VINCI Immobilier	FC	100.00	FC	100.00

List of the main equity-accounted companies at 31 December 2016

A: associate JV: joint venture

	31 December 2016		31 December 2015
	Consolidation method	VINCI's percentage holding	Consolidation method	VINCI's percentage holding
1. CONCESSIONS
VINCI Autoroutes
Axxès (France)	A	42.93	A	42.93
VINCI Airports
Kansai Airports (Japan)	JV	40.00	JV	40.00
Sociedad Concesionaria Nuevo Pudahuel SA (Chile)	JV	40.00	JV	40.00
SEARD - Rennes and Dinard airports (France)	JV	49.00	JV	49.00
ADP - Aéroports de Paris (France)	A	8.00	A	8.00
VINCI Highways
Via Gateway Thüringen (Germany)	JV	50.00	JV	50.00
Via Solutions Thüringen (Germany)	JV	50.00	JV	50.00
Via Solutions Südwest (Germany)	JV	53.62	JV	53.62
SGTP Highway Bypass (Canada)	JV	37.50	JV	37.50
Via 40 Express (Colombia)	JV	50.00
WVB East End Partners (Bridge over the Ohio River, USA)	JV	33.33	JV	33.33
Tollplus LLC (USA)	JV	30.00
SMTPC (Prado Carénage Tunnel, France)	JV	33.29	JV	33.29
Tunnel du Prado Sud (France)	JV	58.51	JV	58.51
Lusoponte (bridges over the River Tagus, Portugal)	JV	37.27	JV	37.27
Morgan VINCI Ltd (Newport bypass, UK)	JV	50.00	JV	50.00
Severn River Crossing (bridges over the River Severn, UK)	JV	35.00	JV	35.00
Hounslow Highways Services Ltd (UK)	JV	50.00	JV	50.00
Island Roads Services Ltd (UK)	JV	50.00	JV	50.00
NWCC - North West Concession Company (Moscow-St Petersburg
motorway, Russia)	JV	50.00	JV	50.00
United Toll Collection Systems LLC (Russia)	JV	50.00	JV	50.00
Granvia (Slovakia)	JV	50.00	JV	50.00
Strait Crossing Development Inc (Confederation Bridge, Canada)	A	19.90	A	19.90
MRDC Operations Corporation (Canada)	A	25.00	A	25.00
Gefyra (Rion–Antirion bridge, Greece)	A	57.45	A	57.45
Aegan Motorway (Maliakos–Kleidi motorway, Greece)	A	13.75	A	13.75
Olympia Odos (Elefsina–Corinth–Patras–Tsakona motorway, Greece)	A	29.90	A	29.90
Two Capitals Highway LLC (Russia)	A	40.00	A	40.00
Coentunnel (Netherlands)			A	18.00
VINCI Railways
LISEA (France)	JV	33.40	JV	33.40
Rhônexpress (France)	JV	35.20	JV	35.20
Synerail (France)	JV	30.00	JV	30.00
Locorail (Liefkenshoek railway concessions, Belgium)			JV	25.00
VINCI Stadium
Stade Bordeaux Atlantique (France)	JV	50.00	JV	50.00
Nice Eco Stadium (France)	A	50.00	A	50.00
Others concessions and holding companies
Baméo (France)	JV	50.00	JV	50.00
Infra Foch TopCo (holding company of Indigo, previously VINCI Park)			A	24.61

		31 December 2016		31 December 2015
		VINCI's percentage		VINCI's percentage
	Consolidation method	holding	Consolidation method	holding
2. CONTRACTING
VINCI Energies
VINCI Energies France
Evesa (France)	JV	26.00	JV	26.00
Ceritex (France)	JV	50.00	JV	50.00
Cinergy (France)	JV	50.00	JV	50.00
Synerail Exploitation (France)	A	40.00	A	40.00
VINCI Energies Europe
Imprese Alta Tensione (Italy)	JV	50.00
Eurovia
Eurovia Délégations France
Carrières Roy	JV	50.00	JV	50.00
GBA (Granulats de Bourgogne Auvergne)	A	30.00	A	30.00
GDFC (Granulats de Franche-Comté)	A	40.00	A	40.00
Bremanger Quarry (Norway)	A	23.00	A	23.00
Eurovia Americas & United Kingdom
South West Highways (UK)	JV	50.00	JV	50.00
Ringway Jacobs Ltd (UK)	JV	50.00	JV	50.00
Bear Scotland Limited (UK)	JV	37.50	JV	37.50
VINCI Construction
Soletanche Freyssinet
Soletanche Bachy Cimas SA (Colombia)	JV	50.00	JV	50.00
VINCI Construction Grands Projets
QDVC (Qatar)	JV	49.00	JV	49.00
Compagnie d'Entreprises CFE (Belgium)	A	12.11	A	12.11
Holding company
Constructora Conconcreto SA (Colombia)	A	20.00	A	20.00

Report of the Statutory Auditors on the consolidated financial statements

For the year ended 31 December 2016

To the Shareholders,

In accordance with our appointment as Statutory Auditors by your Shareholders' General Meeting, we hereby report to you for the year ended 31 December 2016 on:

• the audit of the accompanying consolidated financial statements of VINCI;
• the justification of our assessments; and
• the specific verification required by law.

The consolidated financial statements have been approved by the Board of Directors. Our role is to express an opinion on these financial statements, based on our audit.

1. Opinion on the consolidated financial statements

We conducted our audit in accordance with the professional standards applicable in France. Those standards require that we plan and perform the audit in such a way as to obtain reasonable assurance that the consolidated financial statements are free of material misstatement. An audit consists in examining, by sampling or other selection methods, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also consists in assessing the accounting principles used, significant estimates made and the overall presentation of the consolidated financial statements. We believe that the information that we have collected provides a sufficient and appropriate basis for our opinion.

In our opinion, the consolidated financial statements for the year give a true and fair view of the financial position, the assets and liabilities, and the results of the group formed by the persons and entities included in the consolidation, in accordance with the International Financial Reporting Standards as endorsed by the European Union.

2. Justification of our assessments

As required by Article L.823-9 of the French Commercial Code relating to the justification of our assessments, we inform you of the following:

As stated in Note A.3 to the consolidated financial statements, the VINCI Group uses estimates prepared on the basis of information available at the time of preparing its consolidated financial statements. These estimates relate in particular to:

• construction contracts: the VINCI Group recognises income from its long-term contracts using the percentage of completion method on the basis of the best available estimates of the final outcome of contracts, as stated in Notes A.3 and G.15 to the consolidated financial statements. We have assessed the assumptions used by the Group companies in making these estimates and reviewed the calculations made.

• impairment tests on non-financial assets: the VINCI Group performs impairment tests at least annually on goodwill, and also assesses whether there is any indication that long-term assets may be impaired, in accordance with the methodology described in Notes E.9 and H.16.3 to the consolidated financial statements. We have examined how these impairment tests are performed and the cash flow forecasts and assumptions used.

These assessments were made as part of our audit of the consolidated financial statements taken as a whole and have therefore contributed to the formation of our opinion, expressed in the first part of this report.

3. Specific verification

We have also verified in accordance with the professional standards applicable in France and as required by law, the information concerning the Group presented in the report of the Board of Directors.

We have no comments to make as to its fair presentation and its consistency with the consolidated financial statements.

Paris-la Défense and Neuilly sur Seine, 10 February 2017 The Statutory Auditors French original signed by

KPMG Audit IS		Deloitte & Associés
Jay Nirsimloo	Philippe Bourhis	Alain Pons	Marc de Villartay

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 captions or on information taken outside of the consolidated financial statements.

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.

1, cours Ferdinand-de-Lesseps 92851 Rueil-Malmaison Cedex – France Tél. : +33 1 47 16 35 00 Fax : +33 1 47 51 91 02 www.vinci.com