FINANCIAL AND ACCOUNTING INFORMATION As of December 31, 2017, derivative instruments classified as cash flow hedges are as follows: WEIGHTED TOTAL NOTIONAL TOTAL NOTIONAL AVERAGE AMOUNT AMOUNT FLOATING FIXED RATE FAIR VALUE (1) (in millions of currency)(in millions of euros) MATURITY RATE RECEIVED PAID (in millions of euros) SWAPS PAYING FIXED RATE American dollar 100.0 83.4 June 2018 Libor 3M 1.24% 0.2 250.0 208.5 September 2018 Libor 3M 1.33% 0.7 100.0 83.4 December 2019 Libor 3M 1.68% 0.6 150.0 125.1 April 2020 Libor 3M 1.78% 0.7 150.0 125.1 September 2020 Libor 3M 1.68% 1.6 Canadian dollar 100.0 66.5 October 2018 CDOR 3M 1.23% 0.3 30.0 19.9 June 2020 CDOR 3M 1.11% 0.5 Australian 80.0 52.1 July 2018 BBSW AUD 3M 2.26% (0.2) dollar 75.0 48.9 June 2020 BBSW AUD 3M 1.94% 0.2 Total 812.8 4.4 (1)Derivative instruments are presented at fair value, including accrued interest payable for €0.1 million. The change in fair value of the cash flow hedging instruments for the year ended December 31, 2017 was recorded as a €4.7 million increase in cash flow hedge reserve (before tax). The ineffectiveness recognized in profit and loss in 2017 was immaterial. 5 Derivatives not eligible for hedge accounting WEIGHTED AVERAGE TOTAL NOTIONAL TOTAL NOTIONAL FIXED AMOUNT AMOUNT FLOATING RATE RATE PAID FAIR VALUE (1) (in millions of currency)(in millions of euros) MATURITY RECEIVED (PAID) (RECEIVED) (in millions of euros) SWAPS PAYING FIXED RATE Swedish Krona 750.0 76.2 February 2020 Stibor 3M (0.07)% (0.1) Swiss franc 100.0 85.5 February 2020 Libor 3M (0.69)% 0.2 Euro 62.5 62.5 May 2018 Euribor 6M 3.21% (2.0) Total 224.1 (1.9) (1)Derivative instruments are presented at fair value, including accrued interest payable of €1.4 million. These derivatives are designated primari ly as €4.7 million in the income statement and €9.4 million hedges of variable cash flows arising from interest in other comprehensive income. rate swaps and are not eligible to hedge accounting under IAS 39 requirements. 23.2 Foreign exchange risk Sensitivity to interest rate variation The Group’s financing policy is to centralize external borrowings and to provide financing to its foreign As of December 31, 2017, a 1% increase in interest subsidiaries in their own functional currencies. rates on variable debt after effective interest rate The foreign currency risk arises principal ly from hedging would lead to an increase in the current intercompany financings denominated in currencies annual interest expense estimated to €11.4 mil lion other than euro and is managed at corporate level. In and a €14.1 mil l ion gain related to the change in order to neutralize foreign exchange risk exposure, fair value of the hedging instruments of which a the Group’s parent company incurs external REXEL 2017 – REGISTRATION DOCUMENT 261