Orano - Annual Activity Report 2025 325 FINANCIAL STATEMENTS 6 Consolidated financial statements – financial year ended December 31, 2025 ● treatment-recycling services; ● engineering support to the operator and dismantling of nuclear facilities; and ● transport and warehousing logistics services and solutions, including cask design and manufacturing. Customer contracts and performance obligations Contracts with customers are analyzed to determine the performance requirements that constitute the unit of account for income recognition. Contract price The contract price is the amount of the consideration that Orano expects to receive in exchange for the goods and services transferred. This price includes firm fixed items, as well as variable items in the proportion considered highly likely to be received. Variable items include price revisions potentially resulting from indexation clauses or riders, the potential effects of penalties or discounts, etc. The contract price is adjusted in the event that one of the parties to the contract receives a significant financing advantage from the other party, i.e. when the combination of (i) the time lag between receipt and transfer of control of the goods and services covered by the contract (i.e. revenue recognition) and (ii) the interest rate applicable to an equivalent credit facility has a significant impact on the contract price negotiated by the parties. This adjustment is equivalent to recognizing income on the basis of a transaction price reflecting the price that the customer would have paid for a spot transaction, i.e. net of any items related to the financing terms. The adjustment determined in this manner on the contract price is recognized at the same time as revenue, while the expense or financial income is recognized in proportion to the performance and amortization of the implied credit facility resulting from the terms of payment. The interest rate applied is the marginal financing rate that the party receiving the financing would have obtained from a financial institution by negotiating, on the date of the signature of the contract, a loan whose characteristics are similar to the implied financing granted. Allocation of the contract price to performance obligations The contract price is allocated to each performance obligation based on the proportions of the separate sale prices, generally in line with the contractual terms. Otherwise, the sale price of the performance obligation is calculated on the basis of costs and an expected margin for similar services. Recognition of income associated with each performance obligation Revenue is recognized when the Company transfers control of the goods or services to the customer. In application of this principle, revenue is recognized: ● for concentrate supply contracts: on delivery of uranium concentrates to conversion sites designated by customers; the delivery can be materialized by a physical delivery or by a transfer from the material account held by Orano with the converter to the material account held by the customer with the same converter (“book transfer”); ● for conversion and enrichment contracts: on delivery of the UF6. Delivery may take the form of a physical delivery or a transfer from the material account held by Orano to the material account held by the customer with the fuel enricher or assembler; ● for treatment-recycling, transportation and storage services: by the percentage-of-completion method; when the contract requires the customer to participate in the financing of the construction of an asset necessary for the performance of the services covered by the contract, the revenue relating to the financing received is recognized on the basis of the percentage of completion of the underlying services over the useful life of the asset, except if the customer takes control of the asset upon completion (in which case the revenue is recognized as the asset is constructed); and ● for design and equipment manufacturing contracts that meet the customer’s technical specifications: by the percentageof-completion method, except if the group does not have a sufficient right to payments for the services performed to date in the event of interruption of the contract for a reason other than the group’s default. When revenue recognition is made using the percentage-ofcompletion method in the cases described above, the percentage of completion is determined by the ratio of costs incurred to costs at termination. Revenue is recognized insofar as it is highly likely that it will not be subject to any subsequent reversal. Contract assets and liabilities Contract assets are the rights held by the group in respect of work performed, but which does not yet constitute an unconditional right to payment. Contract liabilities are the amounts recognized in the event of payments received in excess of the amount recognized as income in satisfaction of a performance obligation. They include: ● amounts received from customers and used to finance capital expenditure for the performance of long-term contracts to which they are party; and ● other advances and down payments received from customers reversed as and when the services covered by the contract are realized. In accordance with the provisions of the standard, the group offsets each contract between assets and liabilities. Trade receivables represent the unconditional right of the group to receive a payment depending solely on the passage of time. Costs of obtaining contracts Costs incurred to obtain a contract are only capitalized if: ● they are marginal costs that the group would not have incurred if it had not obtained the contract, and ● the group expects to recover them.
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