AREVA: Update

• The group has taken note of the signature of a Memorandum of Understanding between the Chinese and U.S. governments.

Discussions continue with AREVA's Chinese interlocutors with a possible view to a global partnership that may include the front end of the fuel cycle, reactors and the back end of the fuel cycle.

• In 2006, the group won several contracts and initiated major strategic developments:
  • KATCO began mining uranium commercially in Kazakhstan and new mining permits were secured;
  • Enrichment export contracts hit an all-time high, at more than one billion euros;
  • The ETC agreement was signed, enabling the start of construction of the three billion euro GBII enrichment plant in July 2006;
  • A strategic agreement was signed with Mitsubishi Heavy Industries to develop a 1,000 MW Generation III reactor, with detailed design to be finalized within three years;
  • Contracts totaling more than one billion euros were signed in the Treatment and Recycling businesses.
    
    
• The Transmission & Distribution division completed its recovery a full year ahead of the initial schedule. This business has gone from being an unprofitable one and decreasing in orders intake when it was purchased in 2004 to the thriving business that it is today.
  
  
• With respect to the contract with TVO in Finland, AREVA reiterates that construction of the world's first Generation III reactor is scheduled to last about five and a half years.

The schedule change and the reasons for it have systematically and transparently been made public, in agreement with the customer.

Measures have been taken by the consortium. Discussions are ongoing with TVO, whose President, Pertti Simola, reaffirmed on December 19, 2006 that "the best reactor in the world is under construction at Olkiluoto".

• Provisions were recorded in the first half of 2006 to reflect changes impacting the Olkiluoto reactor construction schedule. Additional provisions will be necessary at year-end 2006 closing.

As a result, operating income for 2006 is expected to be sharply down from that of 2005, although it will easily remain well in the black. Net income, on the other hand, will be close to that of 2005 before gain from the sale of FCI.

The results for 2006 will be communicated on March 22, 2007.

The Supervisory Board also recognized the new AREVA NP SAS Board of Directors as of December 19, 2006:

• The terms of Messrs. Arbola, Gautrot and Guntermann have been renewed;
• François-Xavier Rouxel has been named to replace Philipp Knoche;
• Klaus Voges has been named to replace Nobert Koenig.