Orano - Annual Activity Report 2025 332 6 FINANCIAL STATEMENTS Consolidated financial statements – financial year ended December 31, 2025 or the feasibility of development projects for new processes, (iii) the estimated costs of recovering these materials and (iv) the commercial prospects or economic benefits expected from these materials once recovered. A provision is recognized when the business outlook or economic benefits are insufficient in relation to the costs of treating or developing the valuation channels and the provision may be reliably estimated. The discount rate is determined on the basis of the yield curve for French government securities (OAT rates) at the reporting date, extended for non-liquid maturities using a long-term equilibrium rate, plus a spread applicable to Investment Grade corporate bonds as well as an illiquidity premium. Based on expected disbursements, a single equivalent rate is deducted from the rate curve constructed in this manner. The inflation rate is set in accordance with the long-term inflation projections for the Eurozone and taking into account the European Central Bank’s target rate. Changes in assumptions relating to changes in cost estimates, discount and inflation rates, and payment schedules are recognized in profit or loss. Onerous contracts An onerous contract is one in which the costs to fulfill the terms of the contract exceed the economic benefits expected from it. Costs to fulfill the terms of the contract reflect the net cost of exit from the contract, which is the lesser of the cost of performing the contract or any compensation or penalty arising from the failure to perform it. When the group records an onerous contract, the present value of the resulting obligation is subject to a provision (after taking into account any impairment of the assets earmarked for its performance). Provisions for restructuring A provision for restructuring is recognized by the group when it has a constructive obligation, which is materialized when: (i) there is a formalized and detailed plan specifying the activity or part of the activity concerned, the location and number of people affected, an estimate of the expenses to be incurred and the date on which the plan will be implemented; and (ii) the people affected have been properly informed of the plan’s main features. Provisions for mining site remediation These provisions correspond to foreseeable expenses stemming from the cost of rehabilitating mining sites borne by the group. The provision is constituted as and when the site is operated, in accordance with the principle of “progressive deterioration”. The provision for mining site reclamation is equal to the proportion of tonnages processed since the commissioning of the site compared to the total tonnage of the site (quantities already processed and yet to be processed). 1.3.12 Provisions for end-of-lifecycle operations Provisions for end-of-lifecycle operations cover costs that directly contribute to extinguish obligations: ● the costs of dismantling to bring the facility to the final state of decommissioning, including the costs of treatment and packaging of the waste resulting from the dismantling operations; ● the costs of storage, retrieval, treatment, and packaging of certain legacy waste from older used fuel treatment contracts that could not be processed on site (WRP); ● costs related to the long-term management of radioactive waste (warehousing, transport, and storage); and ● costs relating to the monitoring of storage sites after their closure. At the reporting date, these costs are adjusted in view of the prevailing economic conditions, and are positioned by payment date so as to be discounted using the inflation rate and the discount rate corresponding to the schedule of forecast expenditure. Provisions for end-of-lifecycle operations performed by the group and relating to the dismantling of facilities are an integral part of the cost of facilities. They are therefore measured and recognized in full as of the date of active commissioning of the corresponding nuclear facility, against a dismantling asset set out in tangible fixed assets (see Note 1.3.7.2). Treatment of amortization Dismantling assets are amortized on a straight-line basis over the same period as the relevant facilities. The corresponding amortization expense does not contribute to the progress of the contracts and is not taken into account in the cost of inventories. It is however included in the statement of income under “Cost of sales”, deducted from gross profit. Treatment of accretion expenses The discounting of the provision is reversed at the end of each financial year: the discounting reversal corresponds to the increase in the provision due to the passage of time. This increase is recorded as a financial expense. Inflation and discount rates used to discount end-oflifecycle operations The inflation and discount rates used to measure present value of provisions for end-of-lifecycle operations are determined on the basis of the principles described below. The inflation rate is set in accordance with the long-term inflation projections for the Eurozone and taking into account the European Central Bank’s target rate. The discount rate is set pursuant to IAS 37, i.e. based on market conditions at the reporting date and the specific characteristics of the liability. The rate is thus determined on the basis of a riskfree rate curve for France at the closing date, extended for illiquid
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