Financial Risk Management (Tables)

12 Months Ended

Dec. 31, 2017

Summary of Effect of Foreign Currency Derivatives Impacts in Consolidated Income Statement and Statement of Comprehensive Income/(Loss)

The table below details the effect of foreign currency derivatives in the Consolidated Income Statement and the Statement of Comprehensive Income/(Loss):


(In millions of Euros)	Notes		Year ended December 31, 2017			Year ended December 31, 2016			Year ended December 31, 2015
Derivatives that do not qualify for hedge accounting
Included in Other gains / (losses) – net
Realized gains / (losses) on foreign currency derivatives—net		8		(19	)		(46	)		(37	)
Unrealized gains / (losses) on foreign currency derivatives—net^(A)		8		16			40			(10	)

Derivatives that qualify for hedge accounting
Included in Revenue
Realized gain on foreign currency derivatives—net		8		1			—			—
Unrealized gain on foreign currency derivatives—net		8		1			—			—
Included in Other gains / (losses)—net
Realized gains on foreign currency derivatives—net		8		3			—			—
Unrealized gains / (losses) on foreign currency derivatives—net		8		—			—			—
Realized gain/(loss) in ineffective portion of derivatives				—			—			—
Included in Other Comprehensive Income / (Loss)
Unrealized gains / (losses) on foreign currency derivatives—net				48			(27	)		—
Gain/loss reclassified from cash flow hedge reserve to profit and loss				(2	)		—			—

(A)	Gains or losses on the hedging instruments are expected to offset losses or gains on the underlying hedged forecasted sales that will be reflected in future periods when these sales are recognized.

Summary of Exposure to Financial Counterparties by Rating Type

The number of financial counterparties is tabulated below showing our exposure to the counterparty by rating type (Parent company ratings from Moody’s Investor Services):


	At December 31, 2017				At December 31, 2016
	Number of financial counterparties ^(A)		Exposure (in millions of Euros)		Number of financial counterparties ^(A)		Exposure (in millions of Euros)
Rated Aa or better		3		52		3		13
Rated A		12		224		9		369
Rated Baa		3		19		3		16

Total		18		295		15		398

(A)	Financial Counterparties for which the Group’s exposure is below €250 thousand have been excluded from the analysis.

Summary of Undiscounted Contractual Values by Relevant Maturity Groupings

The tables below show undiscounted contractual values by relevant maturity groupings based on the remaining period from December 31, 2017 and December 31, 2016 to the contractual maturity date.


	At December 31, 2017						At December 31, 2016
*(in millions of Euros)*	Less than 1 year		Between 1 and 5 years		Over 5 years		Less than 1 year		Between 1 and 5 years		Over 5 years
Financial assets:
Net debt derivatives		6		3		—		32		82		—
Net cash flows from derivative assets related to currencies and commodities		59		15		—		22		3		—

Total		65		18		—		54		85		—


			At December 31, 2017						At December 31, 2016
*(in millions of Euros)*	Notes		Less than 1 year		Between 1 and 5 years		Over 5 years		Less than 1 year		Between 1 and 5 years		Over 5 years
Financial liabilities:
Borrowings^(A)				67		318		1,692		54		1,329		999
Interest				103		421		264		170		490		125
Net debt derivatives				3		10		—		—		—		—
Net cash flows from derivatives liabilities related to currencies and commodities				17		11		—		35		63		3
Trade payables and other (excluding deferred revenue)		19		920		20		—		825		19		—

Total				1,110		780		1,956		1,084		1,901		1,127

(A)	Borrowings include the pan US ABL facility which is considered short-term in nature and are included in the category “Less than 1 year” and undiscounted forecasted interest and exclude finance leases.

Currency risk [member]

Summary of Nominal Value of Derivatives

The following tables outline the nominal value (converted in millions of Euros at the closing rate) of derivatives for Constellium’s most significant foreign exchange exposures as at December 31, 2017.


Forward derivatives sales	Maturity Period		Less than 1 year		Over 1 year
USD/EUR		2018-2023		387		376
EUR/CHF		2018-2022		49		19
Other currencies		2018-2020		16		2


Forward derivatives purchases	Maturity Period		Less than 1 year		Over 1 year
USD/EUR		2018-2022		395		90
EUR/CHF		2018-2022		103		35
EUR/CZK		2018-2019		63		62
Other currencies		2018		1		—

Summary of Effect of Foreign Currency Derivatives Impacts in Consolidated Income Statement

The table below details the effect of foreign currency derivatives in the Consolidated Income Statement


*(In millions of Euros)*	Year ended December 31, 2017			Year ended December 31, 2016
*Derivatives*
Included in Finance Costs—net
Realized gain / (loss) on foreign currency derivatives—net		31			15
Unrealized gain / (loss) on foreign currency derivatives—net		(110	)		30

Total		(79	)		45

Commodity price risk [member]

Summary of Nominal Value of Derivatives

At December 31, 2017, the nominal amount of commodity derivatives are as follows:


*(In millions of Euros)*	Maturity period	Less than 1 year		Over 1 year
Aluminium	2018-2022		335		43
Premiums	2018-2021		5		7
Copper	2018		3		—
Silver	2018		7		—
Natural gas	2018		4		—
Zinc	2018		10		—

Summary of Effect of Foreign Currency Derivatives Impacts in Consolidated Income Statement

The Group does not apply hedge accounting on commodity derivatives and therefore any mark-to-market movements are recognized in Other gains / (losses) – net.


*(In millions of Euros)*	Year ended December 31, 2017		Year ended December 31, 2016
*Derivatives*
Included in Other gains / (losses)—net
Realized gains / (losses) on commodity derivatives—net		16		(16	)
Unrealized gains / (losses) on commodity derivatives—net		41		31

Non-US [member]

Summary of Impact on Profit and Equity (before tax effect) of a 10 % strengthening of the US Dollar versus the Euro

The largest exposures of the Group are related to the Euro/Dollar exchange rate. The table below summarizes the impact on profit and Equity (before tax effect) of a 10 % strengthening of the U.S. Dollar versus the Euro for non U.S. Dollar functional currency entities.


*(in millions of Euros)*	Effect on profit before tax			Effect on pretax equity
Trade receivables		5			—
Trade payables		(1	)		—
Derivatives on commercial transaction^(A)		14			(43	)

Commercial transaction exposure		18			(43	)

Cash in Bank and intercompany loans		103			—
Borrowings		(144	)		—
Derivatives on financing transaction		41			—

Financing transaction exposure		—			—

Total		18			(43	)

(A)

Gains or losses on the hedging instruments are expected to offset losses or gains on the underlying hedged forecasted sales that will be reflected in future periods when these sales are recognized. The impact on pretax equity (€43 million) relates to derivatives hedging future sales spread from 2018 to 2022 which are designated as cash flow hedges.

U.S. Dollar [member]

Summary of Impact on Profit and Equity (before tax effect) of a 10 % strengthening of the US Dollar versus the Euro

The table below summarizes the impact on profit and Equity (before tax effect) of a 10 % strengthening of the US Dollar versus the Euro (on average rate for profit before tax and closing rate for pretax equity) for US Dollar functional currency entities.


*(in millions of Euros)*	Effect on profit before tax			Effect on pretax equity
10% strengthening US Dollar/Euro		(8	)		11