NOTE 17—INVESTMENTS ACCOUNTED FOR UNDER THE EQUITY METHOD

The Group investments accounted for under the Equity method are Constellium-UACJ ABS LLC and Rhenaroll S.A.


*(in millions of Euros)*	Year ended 2017			Year ended 2016
At January 1,		16			30
Group share in loss		(29	)		(14	)
Additions		—			—
Reclassified to non-current other financial assets		14			—
Effects of changes in foreign exchange rates		—			—

At December 31,		1			16

As of December 31, 2017, the loan to Constellium-UACJ ABS LLC is, in substance, part of Constellium’s investment in the joint-venture as it represents a long-term strategic investment that is not expected to be settled in the foreseeable future. Constellium’s share of the losses of joint-ventures, in excess of the initial investment, is thus recognized against other financial assets for €14 million at December 31, 2017.


				Joint venture’s net assets					Joint venture’s profit/ (loss)
*(In millions of Euros)*	% interest			At December 31, 2017			At December 31, 2016		At December 31, 2017			At December 31, 2016
Constellium-UACJ ABS LLC^(A)		51.00	%		(14	)		15		(29	)		(14	)
Rhenaroll S.A.^(B)		49.85	%		1			1		—			—

Group share					(13	)		16		(29	)		(14	)

Reclassified to non-current other financial assets					14			—		—			—

Investment in joint venture					1			16		(29	)		(14	)

Constellium-UACJ ABS LLC and Rhenaroll S.A. are private companies with no quoted market prices available for their shares.

(A)

Constellium-UACJ ABS LLC, a joint-venture in which Constellium holds a 51% interest, was created in 2014. This joint-venture operates a facility located in Bowling Green, Kentucky and supplies aluminium sheet to the North American automotive industry. The joint venture started its operations during 2016.

(B)

The Group also holds a 49.85% interest in a joint-venture named Rhenaroll S.A. (located in Biesheim, France), specialized in the chrome-plating, grinding and repairing of rolling mills’ rolls and rollers. Revenue was €3 million for the years ended December 31, 2017 and 2016 respectively. The entity’s net income was immaterial in both 2017 and 2016.

Both investments are included in P&ARP segment assets.

Constellium-UACJ ABS LLC financial statements

The information presented hereafter reflects the amounts included in the financial statements of the relevant entity in accordance with Group accounting principles and not the Company’s share of those amounts.


*(in millions of Euros)*	At December 31, 2017			At December 31, 2016
Current assets
Cash and cash equivalents		5			6
Trade receivables and other		35			7
Inventories		57			28
Non-current assets
Property, plant and equipment		161			189
Intangible assets		1			1

Total Assets		259			231

Current liabilities
Trade payables and other		34			26
Borrowings^(A)		206			129
Non-current liabilities
Borrowings		47			46
Equity		(28	)		30

Total Equity and Liabilities		259			231

(A)	In February 2018, the maturity of shareholders loan facilities was extended to March 31, 2023.


*(in millions of Euros)*	Year ended December 31, 2017			Year ended December 31, 2016
Revenue		123			15
Cost of sales		(151	)		(28	)
Selling and administrative expenses		(14	)		(8	)

Loss from operations		(42	)		(21	)

Finance costs		(15	)		(6	)

Net loss		(57	)		(27	)

The transactions during the year and the year-end balances between Group companies that are fully consolidated and Constellium UACJ ABS LLC are included in Group’s Consolidated income statement and Consolidated statement of financial position are detailed below:


*(in millions of Euros)*	At December 31, 2017	At December 31, 2016
Trades receivables and other—current	15		10
Other financial assets ^(A)	83		66

Total Assets	98		76

(A)

Other financial assets correspond to the loan to Constellium UACJ ABS LLC as of December 31, 2017 and 2016. As of December 31, 2017, the fair value of the loan is €97 million, which approximates the carrying value. The fair value is presented net of €14 million of Constellium’s share of losses of joint venture.


*(in millions of Euros)*	Year ended December 31, 2017		Year ended December 31, 2016
Revenue		59		13
Fees and recharges^(B)		3		3
Finance income		6		4

Total Income		68		20

(B)	Fees and recharges are presented in Cost of sales or Selling and administrative expenses depending on their nature.

Guarantees and commitments given to Constellium UACJ ABS LLC by the Group are:


*(in millions of euros)*	At December 31, 2017		At December 31, 2016
Financial guarantees		11		—
Loan facility commitment		—		15
Supplier guarantees		3		19

Total Guarantees and commitments		14		34

Constellium and UACJ have pledged their intention to financially support the Constellium UACJ ABS LLC, such that Constellium UACJ ABS LLC would be in a position to meet its financial obligations on a timely basis through February 14, 2019, and for a reasonable period thereafter.