FINANCIAL STATEMENTS Consolidated financial statements as of December 31, 2017 3 5.12.2 Exchange rate hedging Klépierre manages its exposure to foreign exchange risk linked to some Turkish malls owned with rents denominated in USD, by selling forward USD ($215 million) against euro. These transactions are qualified as Net Investment Hedges. Klépierre also used to hedge commercial paper issuances denominated in USD by entering into EUR/USD Foreign exchange swaps. Fair value of the exchange rate hedging portfolio Fair value net of accrued In €m interest as of 12/31/2017 Change in fair value during 2017 Counterparty Trading (net investment hedge) 1.5 17.4 Shareholders’ equity Trading (FX) -1.6 -3.6 Borrowings/Earnings TOTAL -0.1 13.9 5.13 Non-current provisions Accounting policies Provisions and contingent liabilities In accordance with IAS 37 “Provisions, contingent liabilities and contingent assets”, a provision is recognized where the Group has a liability towards a third party, and it is probable or certain that an outflow of resources will be required to settle this liability without an equivalent or greater amount expected to be received from the third party concerned. IAS 37 requires that non-interest-bearing long-term liabilities are discounted. Non-current provisions amount to €26.9 million as of December 31, 2017 compared to €23.5 million as of December 31, 2016, dedicated mainly to cover risks related to tax and business-related litigations in different countries where Klépierre operates. 5.14 Social and tax liabilities and other liabilities In €m 12/31/2017 12/31/2016 Social and tax liabilities 172.5 189.9 Staff and related accounts 36.6 37.1 Social security and other bodies 14.1 14.9 Tax payables > Corporate income tax 48.1 32.7 > VAT 33.7 65.3 Other taxes and duties 40.1 40.0 Other liabilities 312.4 317.5 Creditor customers 18.4 20.8 Prepaid income 47.3 50.4 Other liabilities 246.7 246.3 The €18.4 million of advance payments received from tenants related to call of charges is recognized in “Creditor customers”. The “Other” item also includes funds representing the management accounts of Klépierre Management’s principals, balanced by an equal amount in “Other receivables” on the asset side of the balance sheet. These funds totaled €83.3 million at December 31, 2017, compared to €85.2 million at December 31, 2016. KLÉPIERRE 2017 REGISTRATION DOCUMENT 101