FINANCIAL STATEMENTS Consolidated financial statements as of December 31, 2017 3 2.4 Translation of foreign currencies In the event of disposal of a foreign operation, the total accrued deferred exchange gain/loss recognized as a distinct component The consolidated financial statements are presented in euro, which of equity for that foreign operation is recognized in the income is the presentation currency of the consolidated group, as well as the statement. functional currency used by Klépierre SA. Each Group entity selects its own functional currency, and all items in its financial statements 2.5 Distinction between liabilities and equity are measured using this functional currency. The Group’s foreign subsidiaries conduct some transactions in The difference between liabilities and equity depends on whether currencies other than their functional currency. These transactions or not the issuer is obliged to make a cash payment to the other are initially recorded in the functional currency at the exchange rate party. The fact of being able to make such a decision regarding cash applying on the transaction date. payment is the crucial distinction between these liabilities and equity. On the balance sheet date, monetary assets and liabilities stated in foreign currencies are translated into the functional currency at the 2.6 Net earnings per share exchange rate for that day. Non-monetary items stated in foreign currencies and measured at their historical cost are translated using Earnings per share is calculated by dividing net income for the period the exchange rates applying on the dates of the initial transactions. attributable to ordinary shareholders by the weighted average number Non-monetary items stated in foreign currencies and measured at of current shares in circulation, excluding treasury shares. their fair value are translated using the exchange rates applicable on Diluted earnings per share is calculated by dividing net income for the the dates when the fair values were calculated. period attributable to ordinary shareholders by the weighted average For the preparation of the consolidated financial statements of the number of current shares in circulation, excluding treasury shares, and Group, the assets and liabilities of the subsidiaries are translated into adjusted to reflect the effects of the diluting options adopted (if any). the Klépierre SA presentation currency – the euro – at the exchange In accordance with IAS 33, the average number of shares at the rate as of the closing date. Their income statements are translated balance sheet date is adjusted after payment of the dividend in the at the average weighted exchange rate for the year. Any resulting form of shares if necessary. translation differences are allocated directly to shareholder equity under a separate line item. Note 3 Segment information Accounting policies Segment information In accordance with IFRS 8 requirements, operating segments are identified on the basis of the internal reporting used by management when evaluating performance and allocating resources. 3.1 Segment earnings The management team monitors the operating results of each operating segment independently as a basis for decision-making and For management purposes, the Group is structured into business performance evaluation. segments corresponding to geographic regions. There are in total Group financial policy (including the impact of financial income and seven operating segments. expenses), corporate activities and tax result calculation are handled These seven operating segments are structured as follows: at Group level, and are not allocated to the operating segments. > France/Belgium (including Other retail properties); The sector “Scandinavia” includes all the legal entities of the Steen > Scandinavia (Steen & Strøm: Norway, Sweden and Denmark); & Strøm Group in which the minority shareholder owns 43.9% of the interests. The share of the minority shareholder in the equity of the > Italy; Scandinavian sector at Fair Value amounts to €933.4 million as of December 31, 2017, compared to €890.5 million as of December 31, > Iberia (Spain, Portugal); 2016. As of December 31, 2017, the share of the Scandinavian > The Netherlands; portfolio in the non-current assets using the Fair Value model equals to €3,849.2 million, in current assets €169.4 million, in non-current > Germany; liabilities €1,466.4 million and in current liabilities €555.5 million. > CEE & Turkey (Hungary, Poland, Czech Republic, Slovakia, Greece and Turkey). KLÉPIERRE 2017 REGISTRATION DOCUMENT 79