unédic : financial report 2011

FINANCIALREPORT

2011

U N E M P L O Y M E N T I N S U R A N C E

2| UNEMPLOYMENT INSURANCE – FINANCIAL REPORT 2011

MANAGING DIRECTOR’S MANAGEMENT REPORT 3

CONSOLIDATED FINANCIAL STATEMENTS 6

CONSOLIDATED BALANCE SHEET – UNEMPLOYMENT INSURANCE 6CONSOLIDATED PROFIT AND LOSS ACCOUNT – UNEMPLOYMENT INSURANCE 7CONSOLIDATED CASH FLOW STATEMENT 8

APPENDIX1. Key events of the financial year 92. Accounting principles, rules and methods 143. Balance sheet analysis 174. Profit and loss account analysis 235. Additional information 29

AUDITORS’ REPORT 31

UNEMPLOYMENT INSURANCE – FINANCIAL REPORT 2011 | 3

MANAGING DIRECTOR’SMANAGEMENT REPORT

After an extremely dynamic first quarter 2011,economic activity in France remained unchan-ged in the second quarter, due to the continua-tion and deepening of the sovereign debt crisis inthe Euro zone. In the second half of 2011, growthremained very modest, against a background ofbudgetary consolidation measures and a persis-tently high unemployment rate. At the end ofthe year, the GDP in France increased by anannual average of 1.7% in 2011, after increasingby 1.4% in 2010 (Source: Insee (National Instituteof Statistics and Economic Studies).Job creations, which were still thriving in the firsthalf of 2011, slowed down from the third quarter2011, in line with activity. The number of jobsee-kers required to engage in positive job searches,unemployed (category A) decreased in the firstquarter 2011, before going back up in the secondquarter, under the combined effect of less dyna-mic job creations and an increase in the activepopulation, in line with pension reform. At thesame time, the number of unemployed personsreceiving benefits from the Unemploymentinsurance scheme, on a downward trend sincethe end of 2010, increased again from mid-2011.So, at the end of December 2011, there were 2.2million unemployed persons in receipt of bene-fits in France, i.e. an increase of 87,000 jobsee-kers over the year (CVS data, whole of France).

This change in the labour market made it possi-ble to limit the deterioration in theUnemployment insurance scheme’s accounts to1.461 billion Euros in 2011, compared to the lossof 3.247 billion recorded in 2010:•benefit expenses decreased by 0.5% in one year:

+0.7% for unemployment benefit (ARE);-11.8% for the other benefits;

•the revenue from contributions increased pri-marily under the influence of the increase inthe affiliated wage bill in 2011 (+3.6%).

The discrepancy between the contributions andthe benefit and assistance expenses is positive,amounting to 3.7 billion Euros. After taking intoaccount expenses relating to validation of bene-

fit recipients’ pension points in particular (1.61billion Euros) and the contribution of theUnemployment insurance scheme to the run-ning of Pôle emploi (State employment agency)(2.97 billion Euros), the technical profit.

In terms of financing the Unemployment insu-rance scheme, it should be emphasised that:•during autumn, the rating agencies confirmed

the maximum ratings attributed to Unédic(AAA, Aaa). However, at the same time asdowngrading France’s rating, Standard &Poor’s downgraded Unédic’s rating to AA+ inJanuary 2012, without affecting the excellentcredit conditions obtained by Unédic on thefinancial markets;

•the Amending Finance Law of 28 December2011 authorises the Ministry of Economy andFinance to grant a French State guarantee tobond issues which Unédic shall launch in 2012up to the maximum principal amount of 7 bil-lion Euros.

After two test phases carried out in 2010 in theParis region and in the department of the Rhône,the widespread application of the recovery pro-cedure took place on 1 January 2011 across thewhole Acoss (Central Agency of Social SecurityOrganisations) network. CCMSA (Central Fundfor the Agricultural Mutual Insurance Scheme)and CCVRP (Social Security and UnemploymentBenefit Management Agency) retain jurisdictionin their professional domain, while Pôle emploicontinues to manage the stock of existing debts,in addition to the contributions of populations(expatriate, casual workers in the entertainmentindustry) and specific arrangements (CRP(Personal redeployment agreement), CSP(Improved job security contract).The Unemployment insurance scheme’s regula-tions have been the subject of a new Conventionon unemployment insurance applicable since 1June 2011, and the conclusion of the Improvedjob security contract taking over from the CRPand CTP (Occupation transition contract).

Characteristics of 2011


The net change in cash balance for the Unemployment insurance operations is negative by 2,957 mil-lion Euros and is analysed in the following manner:

The contribution due to Pôle emploi for the 2011 financial year increased to 2,966 million Euros. Giventhe payments made and the set-off of debts and receivables between Pôle emploi and Unédic, thebalance standing to the credit of the Pôle emploi 10% contribution account is reduced to the sum of 212million Euros.

Net accounting result

The discrepancy between the change in cashbalance and the book loss for the financial yearof 1,461 million Euros is explained by:•the allowance and write-back of allowance

operations for amortisation and deprecia-tions, without affecting the cash balance, for anet amount of - 113 million Euros,

•the 1,647 million Euro increase in the working

capital requirements linked to the activity,including, in particular, the repayment of a 770million Euro debt to a financial institution, the125 million Euro reduction in Pôle emploi’scurrent account and a claim on Acoss for thebalance of contribution receipts for December2011 for 544 million.

The net position, taking into account the profitor loss for the financial year, is negative by10,611 million Euros as at 31 December 2011.

and represents the result of current operations.

Reconciliation between the changein cash balance and the accounting result

COMPLETION OF THE LIQUIDATIONOF THE EIG, SI - CONVERGENCE EMPLOIThe latest dissolution arrangements were thesubject of an agreement between the mem-bers, which made it possible to proceed withthe completion of the liquidation of the EIG, SI -Convergence emploi, with effect from 25 April2012.

The only residual elements concerned theamount of the recovery of software by Pôleemploi at the net book value as at 31 December2011, with the consequences being integratedinto the 2011 annual accounts.

Events subsequent to closure

Situation as at Situation as at31 December 2010 31 December 2011 Change

Bond issues - 4,000 - 5,900 - 1,900Bridge to bond - 650 0 650Commercial papers - 5,280 - 7,480 - 2,200Overdraft - 3 - 1 2Marketable securities 1,364 1,551 187Bank balances 3 307 304Total - 8,566 -11,523 - 2,957


In brief, the expenditure and revenue forecasts for 2012 would be as follows:

Total revenue: €32,585 m

Total expenditure: €35,619 m

• of which ARE/AREF benefits €28,855 m

i.e. a negative change in cash balance of 3,034 million Euros. At the end of 2012, the aggregate debtwould be 14.1 billion Euros.

MAN

AGIN

GDI

RECT

OR’S

MAN

AGEM

ENTR

EPOR

T

Unédic regularly updates its expenditure andrevenue forecasts by taking into account thechange in the economic situation.

The latest break-even point forecast for 2012,drawn up in May 2012, relies on the consensusof economists in April, which anticipates agrowth of +0.3% in 2012.As a consequence of weak growth, 74,100 jobsaffiliated to the Unemployment insurancescheme would be lost. For its part, the averagewage per capita (SMPT) would increase by 2.5%,particularly under the influence of the mini-mum wage (Smic) reassessments as at 1December 2011 and 1 January 2012. Theincrease in the wage bill, primarily supported by

wage developments, would then slow down to2.4% due to job losses.

The increase in those registered with Pôleemploi under category A would continue, underthe combined effect of the decline in employ-ment and an ever-increasing workingpopulation. Together with an increase in thepotential number of benefit recipients, theincrease in the number of unemployed personsreceiving benefits from the Unemploymentinsurance scheme would continue (+ 76,200unemployed persons receiving benefits).This labour market situation would increaseexpenditure and slow down the increase in theUnemployment insurance scheme’s revenue.

In order to guarantee enough liquidity to fulfil its missions, Unédic will contract new loans throu-ghout 2012.For this purpose, the Board of Directors, which met on 7 February 2012, approved a programme ofbond issues of 7 billion Euros, in one or more tranches, with a maximum term of 7 years.

Four new bond issues were successfully launched from February to June 2012:• 2.5 billion Euros at 3 years at the rate of 1.75%;• 1 billion Euros at 7 years at the rate of 3.00%;• 1 billion Euros at 5 years at the rate of 2.125%;• 1 billion Euros at 6 years at the rate of 2.125%.

Four additional bond issues also collected 1 billion Euros.All of these bond issues benefit from the State guarantee.

2012 outlook


Consolidated balance sheetUnemployment insurance (in thousands of Euros)

ASSETS 2011 2010Fixed assets 203.3 234.8

Intangible fixed assets 1.9 2.8Tangible fixed assets 174.2 203.1Financial fixed assets 27.2 28.9

Current assets: 6,834.4 5,445.8Receivables: 4,295.7 3,930.0- Benefit receivables 213.0 200.3- Affiliated receivables 4,082.7 3,729.7Other receivables 667.9 140.8Marketable securities 1,551.3 1,364.2Available capital 306.7 2.9Prepaid expenses 12.8 7.9

Deferred expenses 2.8 2.9Bond redemption premiums 7.0 8.0

TOTAL ASSETS 7,047.5 5,691.5

LIABILITIES 2011 2010Net financial position -10,610.8 -9,150.2

Retained earnings -9,150.2 -5,903.4Current year result -1,460.6 -3,246.8

Depreciations for contingencies and expenses 56.2 60.7Debts 17,583.8 14,767.9

Loans and financial debts 13,429.8 9,955.0- Bond issues 5,936.5 4,006.4- Other loans and financing 7,481.2 5,932.4- Bank loans and overdrafts 0.7 2.6- Other financial debts 11.4 13.6Other debts 4,154.0 4,812.9- Affiliated debts 120.0 105.6- Benefit debts 2,549.2 2,372.5- Tax and social security debts 67.3 68.5- Trade payables 4.6 6.0- State debts 0.0 0.0- Other debts 1,412.9 2,260.3

Accruals 18.3 13.1

TOTAL LIABILITIES 7,047.5 5,691.5

CONSOLIDATEDFINANCIAL STATEMENTs


Consolidated profit and loss statementUnemployment insurance (in thousands of Euros)

Technical management 2011 2010Income 32,720.5 30,809.6

Contributions 32,314.2 30,558.2Other income 100.0 206.7Write-back of depreciations 277.2 23.3Transfers of expenses 29.1 21.4

Expenses 33,975.4 34,020.8Unemployment benefit 25,220.8 25,047.6Other benefits 2,324.4 2,634.1Redeployment benefits 1,097.5 1,093.6Validation of pension points 1,614.1 1,646.7Other expenses 3,354.8 3,504.8Depreciations 363.8 94.0

Technical profit or loss -1,254.9 -3,211.2

Administrative managementIncome 81.4 97.7

Depreciation of services 43.8 44.2Other income 37.6 53.5

Expenses 106.5 127.1Purchases 0.5 0.7External services 49.1 52.5Taxes and levies 5.4 7.9Wages and social security contributions 25.9 26.6Other expenses 0.0 0.0Amortisation and depreciations 25.6 39.4

Administrative management profit or loss -25.1 -29.4

Financial managementFinancial income 14.4 4.8Financial expenses 191.4 121.5

Financial profit or loss -177.0 -116.7

Opérations exceptionnellesTechnical management 0.0 0.0Administrative management 0.0 114.8

Extraordinary profit or loss 0.0 114.8

Corporation tax and similar levies -3.6 -4.3

PROFIT OR LOSS -1,460.6 -3,246.8


Consolidated cash flow statementUnemployment insurance (in thousands of Euros)

2011 2010Consolidated net result -1,460.6 -3,246.8Elimination of transactions with no effect on the cash flowor not linked to the activity: 111.5 -5.1

- Amortisation and depreciations 112.7 110.1- Capital gains or losses on disposals -1.2 -115.2Change in working capital requirement 1,646.8 10.2

Net cash flow linked to the activity -2,995.9 -3,241.7

Acquisition of tangible and intangible fixed assets -1.5 -6.6Disposal of tangible and intangible fixed assets 15.2 326.3Change in financial fixed assets 1.7 0.6Change in suppliers of fixed assets -0.5 -1.5

Net cash flow linked to investment transactions 14.9 318.8

Bond issues 1,900.0 -2,200.0Short-term credit lines -650.0 650.0Commercial papers 2,200.0 2,655.0Other operations 23.7 -60.4

Net cash flow linked to financing transactions 3,473.7 1,044.6

Change in cash flow (all schemes) 492.8 -1,878.5

Net cash flow at the opening of the period 1,364.5 3,243.0Positive cash flow: available capital 1,367.1 3,277.9Negative cash flow: bank loans and overdrafts -2.6 -34.9

Net cash flow at the closing of the period 1,857.3 1,364.5Positive cash flow: available capital 1,858.0 1,367.1Negative cash flow: bank loans and overdrafts -0.7 -2.6

CONS

OLID

ATED

FINAN

CIAL

STAT

EMEN

TS


1.KEY EVENTS OF THEFINANCIAL YEAR

A P P E N D I X

The transfer of recoveryof contributions1.1

Law no. 2008-126 of 13 February 2008 on thereform of the organisation of the public employ-ment service provided for the transfer ofrecovery to Acoss no later than 1 January 2012.After the completion of two experimentsconducted in 2010 in the Paris region and in thedepartment of the Rhône, the widespread appli-cation to all of the regions has been effectivesince 1 January 2011.An agreement signed on 17 December 2010 bet-ween Unédic, AGS, Acoss and Pôle emploiformalised this transfer of competencies andorganised relations between the various organi-sations. Significant work was carried out byAcoss and the Urssaf agencies to optimise theefficiency of the new recovery procedures.Furthermore, Unédic relies on the arrangementput in place by ACOSS which makes it possibleto isolate with a specific code (CTP codes) thecash flows managed on behalf of theUnemployment insurance scheme. This agree-ment gave rise, in 2011, to the posting of 29,459million Euros in revenue for the financial yearand 25,759 million Euros in encashment.

Acoss also manages specific arrangements onbehalf of Unédic:• individual employers with financial flows of

669 million Euros;• chèques emploi associatif (employer cheque-

books for associations) (CEA) and titres emploiservice entreprise (enterprise service employ-ment vouchers) (TESE) with financial flows of61 million Euros;

• simplified employment permits in force in theoverseas departments with financial flows of15 million Euros.

Pôle emploi has retained management of debtsyet to be recovered as at 31 December 2010, as

well as the recovery of contributions from casualworkers in the entertainment industry, expa-triates and special contributions (CRP and CSP).The amount recovered in 2011 stands at 3,859million Euros, of which 3,479 million Euros inJanuary and February 2011, for the previousyear.

The CCMSA retains jurisdiction in the agricultu-ral sector, with relations being directlyestablished since 1 January 2011 between thisorganisation and Unédic. The cash inflows fromcontributions increased, for this year, to 1,093million Euros.The CCVRP continues to recover contributionsfrom travelling sales representatives with mul-tiple employers and, in 2011, collected 20 millionEuros on our behalf.Two new agreements came into force on 1January 2011, due to the geographical jurisdic-tion of these organisations:• the Social Services Compensation Fund of

Monaco, with cash inflows of 78 million Euros;• the Social Security Fund of Saint-Pierre-et-

Miquelon, with cash inflows of 3 million Euros.To complete the list of stakeholders in the fieldof contributions, three organisations should benoted:• the DGEFP (Delegation-General for

Employment and Vocational Training) whichpaid 177 million Euros by way of compensa-tion for contribution exemptions enjoyed byemployers who have recruited apprentices;

• the General Directorate of Infrastructure,Transport and the Sea which paid 7 millionEuros in addition to the contributions paid bycompanies from the ship management sector;

• IRCEM which paid back 5 million Euros by wayof adjustments from 2006 to 2010 for contri-butions from individual employers.


The convention on Unemployment insuranceof 6 May 2011 and the improved job securitycontract

1.2

Two important pieces of legislation were publi-shed in 2011 with the new convention onUnemployment insurance and the improved jobsecurity contract.The convention was signed on 6 May 2011 and

applies from 1 June 2011 to 31 December2013. The procedures for the assignment ofrights remain unchanged, with:

• one day of affiliation permitting one day ofbenefits (with a minimum affiliation durationof 4 months, and a maximum benefit dura-tion of 24 months for the under 50s, and 36months for the over 50s);

• a benefit rate unchanged at 40.4% of the dailyreference salary + fixed portion, or benefit rateof 57.4% without a fixed portion.

The arrangements relating to benefits concernthe following aspects:• the new convention integrates the conse-

quences of law no. 2010-1330 of 9 November2010 on pension reform with regard to theage at which unemployment benefits ceaseto be paid;

• people who are unemployed on a seasonalbasis now receive benefits according to thedepreciations of the general regulations;

• recipients of a 2nd or 3rd category disability

pension may, under certain conditions, com-bine the amount of their pension with theUnemployment insurance benefit.

The contribution rate remains unchanged at6.4% (employer share of 4% and employee shareof 2.4%). This rate is likely to be reduced on thedual condition of a technical management sur-plus and an improvement in Unédic’s netindebtedness.The personal redeployment agreement arran-gement was extended until 31 August 2011,with the improved job security contract takingover as of 1 September 2011. This arrangementapplies to any companies with fewer than 1,000employees and any companies in receivershipor compulsory liquidation. Employees under-going a redundancy procedure for economicreasons and who signed up to the improved jobsecurity contract benefit:• from a benefit equivalent to 80% of the salary

for a period of 12 months if they have beenan employee of the company for at least ayear;

• support services taking the form of a skillsassessment, specific signposting measures,training programmes or validation of expe-rience assets.

Pôle emploi and Unédic have financial relationswithin the framework of bipartite agreements(service for the allocation and recovery ofcontributions), the payment of the 10% contri-bution for the running of Pôle emploi and jointmanagement of special arrangements (CRP,CTP, CSP and special assistance for employ-ment).

Other management operations were alsoimplemented during 2011.Pôle emploi’s exemption from payingUnemployment insurance contributionsAfter monitoring the situation of all the formeremployees of Pôle emploi in order to ascertainthe benefit scheme which was applicable tothem, a protocol was signed on 16 December

2011, allowing for financial adjustment withregard to the repayment of 44 million Euros inUnemployment insurance contributions andAGS contributions paid in error.The consequences of this operation, namely therepayment of Unemployment insurance bene-fits, were the subject of a financial adjustmentas the rights of former employees were modi-fied during 2011, while the impact on the 10%contribution paid by Unédic will be effective in2013, in accordance with defined calculationprocedures.

Framework agreement on the leases enteredinto with Pôle emploiAs provided for upon the creation of Pôleemploi, the calculation of individual rental pay-

Financial relations betweenPôle emploi and Unédic1.3

ments per site replacing a fixed amount defi-ned in 2008 was the subject of a frameworkagreement between Unédic and Pôle emploi,approved on 16 December 2011. The frame-work agreement was completed by the signingby each of the sites occupied by Pôle emploi,either of a commercial lease with effect as of 1July 2011, or a tenancy-at-will agreement witheffect as of 1 January 2012. These new leases oragreements have no impact on the overall levelof rental payments paid by Pôle emploi, i.e.approximately 30 million Euros in 2011, with

the future decrease being linked to the pro-gressive vacancy of sites under atenancy-at-will agreement.

Sale of the Montreuil site propertiesIn addition to the sale of fixed assets that tookplace in 2010 and scheduled by the frameworkagreement of 15 November 2010, fixed assetsconsisting primarily of facilities, fitting out ofpremises and office furniture were sold to Pôleemploi, for the sum of 2.2 million Euros, on thebasis of a net book value as at 1 January 2010.

By agreement of 5 November 2010, the Stateand Unédic agreed to compensate jobseekerswho exhausted their rights to Unemploymentinsurance benefit between 1 January and 31December 2010. This arrangement made it pos-sible to pay a special allowance for employment(AEPE) financed equally by the State and Unédic,managed by Pôle emploi. It represented anexpenditure for the Unemployment insurancescheme of 8.9 million Euros in 2011, comparedwith 5.2 million Euros in 2010.Furthermore, Unédic and the DGEFP continuedtheir partnership within the framework of theagreement on long-term reduced activity(APLD). This agreement, signed on 4 December2009, allows for the payment of additional par-

tial unemployment benefits to employees expe-riencing a reduction in activity. This measurebenefitted from a contribution by Unédic of 20.6million Euros in 2011.Finally, the State and Unédic signed the agree-ment on the improved job security contractunder the terms of which the State and Unédiceach contribute to the financing of the supportpackage, amounting to 800 Euros per benefi-ciary of this arrangement.The State also contributes to the financing ofthe improved job security benefit for recipientsfurnishing proof of 12 to 24 months’ employ-ment in the company at the time of joining thescheme, for the portion exceeding the amountof the unemployment benefit.

State /Unédic joint arrangements1.4

The Unédic Board of Directors decided, at its mee-ting on 30 June 2011, to increase the reference

salary, which serves as the basis for calculatingbenefits, by 1.5% as of 1 July 2011.

Increase in Unemploymentinsurance benefits

1.5



1.6.1.2011 financing operations

Financing the Unemploymentinsurance scheme

1.6

At the end of the 2011 financial year, the net position of outstanding loans is 11,523 Euros, i.e.:• bond issues: 5,900 million Euros;• commercial papers: 7,480 million Euros;• investments: -1,551 million Euros;• bank balances: - 306 million Euros.

N.B.: the aggregate net debt including the sums payable to Pôle emploi for the 10% contribution andwhich are not yet paid (212 million Euros) therefore amounts to 11,735 million Euros.

1.6.1.1.Bond issues and bank loans

In 2009, Unédic opened a 12 billion Euro EMTN(Euro Medium Term Notes) programme, withinwhich its bond issues are launched.An initial public offering was launched within thisframework in December 2009. Unédic raised 4 bil-lion Euros from this in 3 years, which constitutedits only bond issue at the end of the 2010 finan-cial year. In 2011, Unédic raised a total of 1.9 billionEuros on the bond market: 1.5 billion Euros in 3years, to which 150 million Euros are added in 3years, and 250 million Euros in 18 months. In2011, the EMTN programme benefitted from therating attributed to Unédic by the Fitch (AAA),Moody’s (Aaa) and Standard and Poor’s (AAA)rating agencies. This last rating was revised toAA+ in January 2012.Given the restrictions imposed by Article 213-15of the Financial and Monetary Code governingbond issues by associations on the financial mar-kets, the Board of Directors decided to apply for aState guarantee for its bond issues in 2012. Thisguarantee was authorised by the AmendingFinance Law of 28 December 2011 and grantedby order of the Minister for the Economy andFinance on 7 February 2012.

1.6.1.2.Commercial papers

The use of this financing method for the associa-tions was authorised, under certain conditions, inArticle 37 of law no. 2003-706 of 1 August 2003.The initial amount of 1.2 billion Euros in 2004 wasgradually increased, to reach a ceiling amount of 9billion Euros authorised by the Board of Directorsin June 2011.The total outstanding amount of the programmeas at 31 December 2011 is 7.48 billion Euros.These commercial papers are the subject of

drawdowns as needed.This commercial paper programme obtained theshort-term rating ”A1+” by the Standard & Poor’srating agency and “P1” by Moody’s as of its launchin January 2004. Since July 2009, it has also bene-fitted from the F1+ rating from the Fitch ratingagency.Initially, at the request of the Moody’s ratingagency, syndicated and confirmed lines of creditwere put in place to ensure 100% coverage of thisprogramme and thereby mitigate any imbalancesin the European money market.Since July 2011, the agencies’ coverage require-ment has been reduced to a quarter of theauthorised programme.

1.6.1.3.Traditional bank financing arrangements

Short-term financing requirements are covered inthe form of bank overdrafts negotiated by mutualagreement with Unédic’s banking partners (1.5billion Euros negotiated).The use of these overdrafts at the end of the 2011financial year is limited to 0.7 million Euros.

1.6.1.4.Marketable securities

A commitment was made with regard to therating agencies to build up a reserve of liquidassets when the drawdowns on the commercialpapers programme exceed an outstanding liabilityof 3 billion Euros. It is in return for this commit-ment that the level of coverage could be reducedto a quarter of the amount of the programmeconcerning 9 billion Euros.

Given a commercial paper outstanding liability of7,480 million Euros as at 31 December 2011, theinvestments represent 1,551 million to date, ofwhich 1,120 million is intended to cover the com-


mitments (25% of the commercial paper outstan-ding liability exceeding 3 billion Euros) made withthe rating agencies.

1.6.2.Financing of the 2012-2013period

The threefold strategy set out and approved bythe Board of Directors from 2009 remains ope-rational:• The work carried out with the rating agencies

enabled Unédic to continue to benefit from arating enabling it to raise the necessaryresources under the best conditions. However,it should be noted that, at the beginning of2012, the sovereign debt crisis led Standard &Poor’s to downgrade the French State’s ratingto AA+, while keeping its short-term ratingunchanged at A-1+. Unédic’s rating was auto-matically aligned with that of the FrenchState. This decision on the financing costs andthe opportunities to access the financial mar-kets for Unédic had very little effect, insofar asthe markets had anticipated it;

• The 12 billion Euro EMTN programme wasincreased to 14 billion Euros, and shall enableUnédic to retain the responsiveness neces-sary to its future bond issues. Four bondissues and supplements made from February

to June 2012 raised 6.5 billion Euros withmaturities of 3 to 7 years, thereby spreadingevenly its exposure to interest rate risk;

• The commercial papers programme, the cei-ling amount of which was increased to 12billion Euros, continues to enable Unédic toraise the additional short-term resources itneeds under the best conditions.

The financing instruments thus implementedwill enable Unédic to cover the needs for 2012.These needs can be summarised thus:• refinancing of the bond issue issued in

December 2009 for 4 billion Euros;• coverage of the expected 2012 deficit for 3 bil-

lion Euros in the technical balance of May2012.

Concerning the 2013 financial year, the technicalbalance forecasts, based on a growth thatshould remain weak (1%) and very poor job crea-tion, anticipate a result for the Unemploymentinsurance scheme that would remain negative,thereby generating a cash burn in the region of4 billion Euros. Net indebtedness would thenreach approximately 18 billion Euros at the endof the year, for which the (support, remunera-tion and maturity) financing procedures are yetto be specified given the situation of the finan-cial markets.


2.ACCOUNTING PRINCIPLESRULES AND METHODS

A P P E N D I X

The Unemployment insurance scheme’s conso-lidated annual accounts for the financial yearended 31 December 2011, drawn up in Euros,including the balance sheet, the profit and lossaccount and the appendix, were drawn up inaccordance with the Unemployment insuranceorganisations’ chart of accounts approved by theNational Accounting Council (CNC) dated 9January 1995 (notice of compliance no. 79).They take into account the specific informationlinked to the declaratory nature of

Unemployment insurance and the conse-quences which arise therefrom, with regard toboth the declarations of affiliates and the pay-ments to recipients.

The signatory organisations of the convention of6 May 2011 on Unemployment insurance, inview of Article L.351-3-1 of the French LabourCode on the method of financing benefits paidunder this scheme, certify that Unemploymentinsurance is a specific ”pay-as-you-go” scheme.

The regulatory depreciations stipulate that job-seekers register then provide Pôle emploi withevidence of their situation on a monthly basisto avoid their entitlements being called intoquestion. These formalities enable the benefitsto be dealt with on a monthly basis under tech-nical management expenses. In addition to theDecember benefits paid in January of the follo-wing year, payment adjustments that may takeplace in the following months will be estimatedto take into account corresponding expenditurein the corresponding year. For persons exemptfrom checking, accounting is, the aforementio-ned notwithstanding, also carried out on amonthly basis.

2.2.2.Benefit debts

Under the item ”Benefit debts” is the amountof benefits considered as owing for the current

financial year, according to the principles refer-red to above, and which are calculated by usingthe benefits paid in January of the followingyear and the estimate of the payment adjust-ments.

2.2.3.Benefit recipient receivables

The accounts receivable of benefit recipients(undue payments and advances) are the sub-ject of a depreciation built up according to theage of the debts.

The method for calculating depreciations fordepreciation of the benefit recipients’ unduepayments is based on statistical law making itpossible to measure the probability of recove-ring them.Undue payments for fraud were the subject ofa 100% depreciation of their amount.

General principles2.1

Unemployment benefits2.2


2.3.1.Income

The income from technical management corres-ponds to general and specific contributions thatthe employers are required to pay for the year,according to mandatory periodic declarationsthat they make to Urssaf agencies, CGSS (GeneralSocial Security Fund), CMSA (Agricultural SocialMutual Fund) and regional departments of Pôleemploi.

The forms received in January are deemed toconcern the previous year.

For those received in February, the reference onthe form for the previous year makes it possibleto register amounts declared in unearned income.When the forms are not received within the pres-cribed time limits, an estimate of thecontributions due is carried out per affiliate.

2.3.2.Affiliate receivables

Contributions yet to be received for the year arecalculated according to the income recorded bet-ween 1 January and 28 February of the followingfinancial year and relating to the financial yearelapsed. A depreciation is recorded at the end ofthe year on affiliates’ debts which appear doubtful.It is calculated according to the age of the debtsand forecasts of companies’ ability to pay accor-ding to their characteristics.

2.3.3.Creditor affiliates

Funds paid by affiliates and collected by the variousoperators recovering on behalf of Unédic and whichcould not be assigned to an identified debt areshown under balance sheet liabilities.

2.4.2.Corporate commitments

Given the depreciations of the National collec-tive agreement for Unemployment insurancescheme personnel, Unédic is required to payretirement indemnities calculated as monthlywage by number of years of service.Furthermore, bonuses are to be paid underlong-term service bonuses (médailles du tra-vail).Commitments are calculated using the follo-wing information:

• new CCN depreciations;• use of personal information: age, sex, salary,

length of service;• determination of internal actuarial assump-

tions: staff turnover rate (0% to 3% accordingto the employee’s age), retirement age andterms and conditions (60 to 65 according tothe year of birth with retirement at the initia-tive of the employee), wage increase rate of3% including inflation;

• use of a discount rate for the commitmentcorresponding to the Bloomberg referencerate, i.e. 3.75% for the 2011 financial year.

2.4.1. Fixed assets

The intangible and tangible fixed assets are recorded in the accounts according to the depreciationsof ARC (Accounting Regulatory Committee) regulation no. 2002-10 on the amortisation and depre-ciation of assets and ARC regulation no. 2004-06 on the definition, accounting and evaluation ofassets. Amortisation is practiced according to the straight-line method over the following durations:

Contributions of affiliates2.3

Other items2.4

Software 5 yearsBuildings and structures 10 to 40 yearsFixtures and fittings 10 to 20 yearsIT installations and equipment 3 to 6 yearsOffice furniture 10 yearsOffice equipment 5 yearsOther 4 to 10 years


Using this data, the amount of the commit-ments is calculated individually for eachemployee present, it being understood that forthe long-term service bonuses, the commit-ment must be calculated for the bonuses whichrisk being paid for the entire period of work, i.e.a maximum of 4 bonus levels.The amounts thus obtained are recorded in theaccounts as depreciations for contingenciesand expenses and the change in these depre-ciations is recorded in the result for the periodincluding the impacts of assumption changes.Added to this from 2010 is the amount of com-mitments due under the defined benefits pen-sion plan for the senior executives of theUnemployment insurance scheme present asat 1 January 2001, providing evidence of 8 yearsin this role and having ended their career in anUnemployment insurance institution.

2.4.3.Extraordinary profit or loss

The extraordinary profit or loss includes:• technical management operations which do

not derive from ordinary activity and relatingto benefit recipient or recovery domains;

• items relating to administrative manage-ment, that is to say the items provided for bythe general chart of accounts and, in particu-lar, the capital gains or losses from disposalsof tangible and intangible fixed assets.

The capital gains or losses from disposals offinancial fixed assets are, the aforementionednotwithstanding, recorded in the financialtransactions.

Unédic shall proceed with a ”consolidation” ofall Unemployment insurance institutions’accounts. Strictly on a legal basis, the ”consoli-dated” whole corresponds to a “combination” ofthe accounts according to regulation no. 99-02of the National Accounting Council. There is nolegal relationship between the entities includedin the scope of consolidation except for SCI (realestate investment trust) Reuilly 1, subsidiary ofUnédic. For the 2011 financial year, this situa-tion only concerns the single institution whichdid not merge with Unédic as at 31 December2011.

The scope of consolidation is presented in thechapter of the appendix on additional informa-tion.The main reprocessing operations concern:• the leasing held by SCI Reuilly 1;• proportional integration, at 50% of the SI

Convergence Emploi EIG;• elimination of balances from operations rela-

ting to the managed third party (AGS) shownin Unédic’s annual accounts, in order to onlypresent in the consolidated balance sheet theUnemployment insurance transactions

Principles of consolidation of Unemploymentinsurance scheme accounts

2.5


3.1.1. Fixed assets

3.1.1.1. Tangible and intangible fixed assets

All of the movable and immovable property was the subject of:• a sale of 11 real estate sites;• a physical inventory carried out for the furniture and office equipment of the registered office.

The transactions recorded with regard to the fixed assets and the amortisation during the 2011financial year are presented below.

Analysis of balance sheet assets3.1

3.BALANCE SHEET ANALYSISA P P E N D I X

CHANGES IN GROSS FIXED ASSETS IN 2011

(in millions of Euros) (1) (2) (3) (4) (5)=(1)+(2)-(3)+(4)Gross value at Acquisitions Sales Transfers Gross value atthe opening of and creations or decom- the closing of the

the financial year missionings financial year

Total intangible fixed assets (A) 9.3 0.3 0 0 9.6Total tangible fixed assets (B)) 518.8 1.2 37.2 0 482.8Property: Land, buildings and fittings 507.8 0.9 33.6 2.5 477.6Other tangible fixed assets 8.4 0.2 3.6 0.1 5.1Current tangible fixed assets 2.6 0.1 0 -2.6 0.1Total (A + B) 528.1 1.5 37.2 0 492.4

CHANGES IN AMORTISATION IN 2011(in millions of Euros) (1) (2) (3) (4) (5)=(1) +(2)-(3)+(4)

Amortisation Acquisitions Sales Transfers Gross value atat the opening of and creations or decom- the closing of thethe financial year missionings financial year

Total intangible fixed assets (A) 6.6 1.0 0 7.6Total tangible fixed assets (B) 315.6 16.5 23.5 0 308.6Property: buildings and fittings 310.3 16.2 20.7 0 305.8Other tangible fixed assets 5.3 0.3 2.8 0 2.8Total (A+B) 322.2 17.5 23.5 0 316.2


3.1.1.1. Financial fixed assets

This item, for an amount of 27.2 million Euros, essentially comprises the loans for their originalamount within the framework of the construction subsidy for 26.8 million Euros and the deposits andsecurities paid amounting to 0.4 million Euros.

3.1.1. Current assets

This item, for an amount of 27.2 million Euros, essentially comprises the loans for their originalamount within the framework of the construction subsidy for 26.8 million Euros and the deposits andsecurities paid amounting to 0.4 million Euros.

3.1.2.1. Receivables

a) Benefit recipient debtorsThe gross value of this item is up by 8.48% on the previous financial year: 467 million Euros compa-red with 430.5 million Euros. 95.58% of it is made up of undue Unemployment insurance paymentsto benefit recipients, i.e. 446.3 million Euros. The transactions relating to the undue Unemploymentinsurance payments are presented in the table below:

The risk of not recovering undue payments is covered by the setting aside of a depreciation equal to54.4% of the debt compared with a rate of 53.4% for the 2010 financial year.

b) AffiliatesThe burden of gross contributions yet to be recovered, i.e. 5,169.4 million Euros, is up by 8.9% on theprevious financial year. It is broken down into:• main contributions: 4,626.4 million Euros or 89.5% of the total;• individual contributions: 365.9 million Euros or 7.1% of the total;• additional contributions: 177.1 million Euros or 3.4% of the total.

(in millions of Euros) 2011 2010 Change2011 / 2010

Undue advances and payments on account at the opening of the financial year (A) 430.5 388.1 10.9%Detection of undue payments during the financial year (B) 901.4 867.1 4%Reimbursement and recoveries of undue payments (C) 821.6 796.2 3.2%Write-offs and losses on undue payments (D) 43.6 28.8 51.4%Advances and payments on account (E) 12.4 12.7 (2.4)%Recovered advances and payments on account (F) 12.1 12.4 (2.4)%Benefit recipient debtors at the end of the financial year (includingthe advances and payments on account) (G) = (A) + (B) - (C) - (D) + (E) - (F) 467.0 430.5 8.48%Depreciation set aside for bad debts (H) (254) (230.2) 10.3%Depreciation rate (H) / (G) 54.4% 53.4% 1 ptNet book value (I) = (G) - (H) 213 200.3 6.3%

(in millions of Euros) 2011 2010 Change2011 / 2010

Uncontested debts to be received (A) 3,799.8 3,478.7 9.2%Bad debts to be received (B) 1,369.6 1,268.6 8.0%Gross value (C) = (A) + (B) 5,169.4 4,747.3 8.9%Depreciation set aside for bad debts (D) (1,086.7) (1,017.6) 6.8%Depreciation rate (D) / (B) 79.3% 80.2% -0.9 ptsNet book value (E) = (C) – (D) 4,082.7 3,729.7 9.5%


The uncontested debts to be received corres-pond to contributions due for 2011 which weresettled at the beginning of the following finan-cial year.The burden of bad debts is up (8.0%), with thischange resulting primarily from a smaller num-ber of write-off decisions, and a large numberof calls for specific contributions made at thebeginning of 2012, the settlement of which wasmade after 28 February 2012.A depreciation is set aside in order to cover therisk of not recovering bad debts, which repre-sents 79.3% of the contested contributions to bereceived or an increase of 6.8% compared withthe 2010 financial year. The depreciation is cal-culated by each of the operators responsible forrecovering Unemployment insurance contribu-tions, according to the review of the results ofrecovering bad debts over previous years.

3.1.2.2.State

This item, for an amount of 50.2 million Euros,represents an amount due by the State forarrangements prior to 2009 managed on behalfof the State and not transferred to Pôle emploi.

3.1.2.3.Other debts

This item, for an amount of 617.4 million Euros,predominantly comprises:• the national participatory youth employment

programme (EJEN) to be received for 0.9 mil-lion Euros;

• an income to be received from the State aspart of the CA (Contract for the future) – CAE(Employment Support Contract) arrangementbalance for 16.1 million Euros;

• a claim against establishments under mana-gement agreements amounting to 18.6 mil-lion Euros;

• a claim against sales of fixed assets for 2.2million Euros;

• a 7.1 million Euro claim against Monaco rela-ting to current operations of the contributionrecovery domain;

• a 544.4 million Euro claim against Acoss, cor-responding to the balance of contributions

paid by the employers during December, to berepaid to Unédic;

• a claim against Saint-Pierre-et-Miquelon for0.8 million Euros, relating to current opera-tions of the contribution recovery domain;

• a claim against CCMSA for 12.5 million Euros,relating to current operations of the contri-bution recovery domain;

• a claim against CCVRP for 3.7 million Euros,relating to current operations of the contri-bution recovery domain.

3.1.2.4.Marketable securities

This item, for the sum of 1,551 million Euros,corresponds to money market funds, 1,120 mil-lion of which are dedicated to the coverage ofcommercial paper issues in the event of mar-ket failure.

Marketable security inventoryas at 01/01/2011 1,364Acquisitions in 2011 14,080Sales in 2011 13,893Marketable security inventoryas at 31/12/2011 1,551

3.1.2.5.Bank balances

This item, for an amount of 306.7 million Euros,comprises:• passbook deposits paid for an amount of 300

million Euros, to which 0.3 million Euros inaccrued interest is added at the end of thefinancial year;

• bank account balances amounting to 6.4 mil-lion Euros.

3.1.3.Deferred expenses

This item, for an amount of 2.8 million Euros,concerns the costs of bond issues which are dis-tributed in a linear manner over the term of thebonds. >>>


Summary of bond issues

Date Term Deferred fees Prior 2011 Aggregate Bond feeand costs amortisation amortisation amortisation amortisation

as at balance31/12/2011 31/12/2011

12/2009 3 years 4.4 1.6 1.5 3.1 1.303/2011 3 years 1.6 - 0.4 0.4 1.210/2011 18 months 0.2 - - - 0.212/2011 27 months 0.1 0.0 0.0 0.0 0.1

Total deferred expenses 6.3 1.6 1.9 3.5 2.8

Date Term Deferred fees Prior 2011 Aggregate Issueand costs amortisation amortisation amortisation Ptremium

as at balance31/12/2011

12/2009 3 years 12.50 4.50 4.20 8.70 3.8003/2011 3 years 4.30 - 1.10 1.10 3.20

Total issue premium 16.80 4.50 5.30 9.80 7.00

3.1.4.Redemption premiums

The bonds issued by Unédic include an issue premium, corresponding to the difference between the nominal value of thebonds and the issue value. These premiums are amortised over the term of the issue.

3.2.1.Net financial position

• Net financial position as at 31 December 2010 -9,150.2 million Euros• Negative result for the 2011 financial year: -1,460.6 million Euros• Net financial position as at 31 December 2011: -10,610.8 million Euros

3.2.2.Depreciations for contingencies and expenses

This item, for a total amount of 56.2 million Euros, predominantly comprises the following depreciations:•Unédic’s contribution to the financing of AS-FNE (special benefit from the national employment fund)

for 12.5 million Euros;•the rights acquired up to their retirement by the recipients of ARPE (job substitution allowance) for 0.1

million Euros (i.e. a reduction of 0.1 million Euros on 2010); this depreciation covers the costs of bene-fits yet to be paid and the financing of additional pension benefits;

•the unemployment insurance contributions paid in error by certain public employers and to be repaidfor 20.5 million Euros;

•the depreciation for risks of disputes over benefit recipient and recovery domains flagged up by theregional departments of Pôle emploi for 5.3 million Euros;

•depreciations for corporate commitments:- depreciation for retirement indemnities (IDR) for the sum of 15.5 million Euros;- depreciation for long-term service bonuses for 1.7 million Euros.

Analysis of balance sheet liabilities3.2


(In millions of Euros) Opening Depreciation Write-back Write-back Closingbalance depreciation depreciation balance

used not used

ARPE 0.2 - 0.1 - 0.1AS-FNE 18.2 12.5 18.2 - 12.5IDR 11.5 5.4 1.4 - 15.5Long-term service bonuses 1.1 0.6 - - 1.7Public employer reimbursement 20.8 -0.3 - - 20.5Other 8.9 -0.1 2.9 - 5.9

Total 60.7 18.1 22.6 - 56.2

Financing arrangements Opening Of which Additional Repayment Closing Of which(amounts in millions of Euros) balance accrued interest financing of financing balance accrued interest

Bond issues 4,006 6 1,900 5,937 37Credit/financing establishments loans 5,932 2,200 652 7,480

of which commercial papers 5,280 2,200 7,480of which other loans 652 652 0

Bank loans and overdrafts 3 2 1

Total 9,941 6 4,100 654 13,418 37

3.2.3. Loans and financial debts

The change in financing during 2011 is as follows:

The change in depreciations for contingencies and expenses during the 2011 financial year is presented in the table below.

3.2.3.1. Bond issuesThe bonded debt amounts to 5,937 million Euros at the end of the 2011 financial year.It corresponds to:• the 4 billion Euro loan (3 years, 2.125%) issued in December 2009;• the accrued interest on the 4 billion Euro loan, i.e. 6.6 million Euros;• the 1.650 billion Euro loan (3 years, 2.375%), of which 1.500 billion issued in March 2011 and 0.150

billion in December 2011;• the accrued interest on the 1.650 billion Euro loan, i.e. 30 million Euros;• the 0.250 billion Euro loan (18 months, 1.37%) issued in October 2011;• the accrued interest on the 0.250 billion Euro loan, i.e. 0.75 million Euros.

3.2.3.2. Loans from various credit and finance establishments• The total amount of this item comes to 7,480 million Euros, corresponding to the commercial papers

issued by Unédic.

The transactions concerning the commercial papers were as follows in 2010:

The due dates of these commercial papers are as follows:

Inventory as at 01/01/2011 Issues in 2011 Repayments in 2011 Inventory as at 31/12/20115,280 31,250 29,050 7,480

(amounts in millions of Euros)

Due date of commercial During During Duringpapers the 1st quarter 2012 the 2nd quarter 2012 the 2nd half of 2012 Total

6,755 710 15 7,480(amounts in millions of Euros)


3.2.3.3.Bank loans and overdraftsThe total amount of this item comes to 0.7 mil-lion Euros and corresponds to the accountingbalances of creditor bank and postal accountsand the accrued interest on bank overdraftsused. The bank loans and overdrafts correspondto the negative cash flow presented in the cashflow statement.

3.2.4.Other debts

3.2.4.1.Affiliated debtsThis item, amounting to 120.1 million Euros, cor-responds to the sums received from employersand which could not be assigned to debts at theend of the financial year.

3.2.4.2.Benefit recipient debts and other accountspayableThis item, for a total amount of 2,549.2 millionEuros, corresponds, essentially, to the benefitsto be paid: benefits from the month of December2011 paid at the start of 2012, i.e. 2,482.9 millionEuros and 64.9 million Euros for the redeploy-ment benefits to be paid to benefit recipientsand less the advance retirement levy for anamount of 101.7 million Euros.

3.2.4.3.Tax and social security debtsThis item, for a total of 67.3 million Euros, com-prises:•depreciation for paid leave and holiday and

13th month bonuses amounting to 2.6 millionEuros instead of 3.0 million Euros in 2010;

•the benefit recipient advance levies yet to bepaid, i.e. 47.6 million Euros corresponding tothe benefits paid in December 2011;

•the other tax and social security debts for 17.1million Euros.

3.2.4.4.Trade debtsThe amount of 4.6 million Euros, representingthe invoices yet to be paid as at 31 December2011, is divided into two sections:•suppliers of goods and services: 4.2 million

Euros;•suppliers of fixed assets: 0.4 million Euros.

3.2.4.5.Other debtsThe main items of this section, the total amountof which comes to 1,412.9 million Euros, concern:• the cost to be paid as at 31 December 2011 to

various pension funds, for the validation of the

benefit recipients’ additional pension points:• 540.1 million Euros due to Arrco (Association

of supplementary pension plans for salariedemployees) which is broken down into:

• 488.7 million Euros corresponding to thecontributions yet to be paid for 2011;

• 27.2 million Euros in respect of the semi-final2011 position;

• -47.6 million Euros due by Arrco in respect ofthe 2010 adjustment;

• 7.2 million Euros due to Arrco in respect of the2008 adjustment;

• 64.6 million Euros in respect of the AFSP(Benefit from the specific temporary fund)arrangement;

• 510.0 million Euros due to Agirc (GeneralAssociation of Pension Institutions forManagerial Staff) which is primarily brokendown into:

• 492.0 million Euros corresponding to Unédic’scommitment to Agirc, as provided for in theagreement of 19 December 1996 which hadvalued the amount of supplementary retire-ment contributions for the periods ofunemployment prior to this date and set a 20year payment schedule at the rate of 1/20theach year, with the debt amount being re-assessed each year by applying the price index;

• 228.6 million Euros corresponding to thecontributions yet to be paid for 2011;

• 19.9 million Euros in respect of the semi-final2011 position;

• -171.7 million Euros due by Agirc in respect ofthe 2010 adjustment;

• -64.0 million Euros due by Agirc in respect ofthe 2008 adjustment;

• 70.8 million Euros due to other supplementaryretirement pension organisations, includingIrcantec (Supplementary Retirement PensionsInstitution for Non-Certified State Employeesand Employees of Public Administrations);

• the liaison accounts with Pôle emploi for 239.3million Euros including that relating to thefinancing of Pôle emploi through the 10%contribution for the sum of 211.7 millionEuros.

3.2.5.AccrualsUnearned income, i.e. 18.3 million Euros, essen-tially concerns the payments made by publiccompanies and establishments which are notaffiliated to the Unemployment insurancescheme, but which have signed a managementagreement with Unédic.The payments are made for benefit recipientsregistered as unemployed and whose acquiredrights may be spread over several financialyears according to their age.


The main contributions are up, with a change of5.85%.The change in the wage bill is valued by Acoss at+3.6% between 2011 and 2010, breaking downinto a 1% increase in staff numbers and a 2.5%increase in the average salary per capita (SMPT).

Furthermore, the difference in the change incontribution income is explained by the specialadjustments recorded in 2010 and 2011.Special contributions saw a reduction of 1.54%given the drop in the number of members of theCRP (Personal redeployment agreement) arran-gement.

4.1.1.2.Other income

This item, for an amount of 100 million Euros,predominantly comprises the income in respect

of management agreements, i.e. 46.6 millionEuros, in addition to the surcharges for delay andpenalties for 41.5 million Euros.

4.1.1.3.Net write-back of depreciations

A decrease or the write-back of depreciations isrecorded relating to:

•Unédic’s contribution to the current financing ofAS-FNE amounting to 18.2 million Euros;

•the reduction in acquired rights until their reti-rement by the beneficiaries of ARPE for 0.1 mil-lion Euros;

•the depreciation of debts relating to manage-ment agreements for 0.3 million Euros;

•doubtful debts of affiliates for 257.7 millionEuros;

•the depreciation of detected undue paymentsfor 0.9 million Euros.

4.PROFIT AND LOSSACCOUNT ANALYSIS

A P P E N D I X

4.1.1. Income

4.1.1.1. Contributions

The income from contributions for the 2011 financial year is up by 5.75% on 2010:

Technical management4.1

(in millions of Euros) 2011 2010 2011 / 2010

Main contributions 31,878.6 30,115.7 5.85%Special contributions 435.7 442.5 -1.54%

TOTAL 32,314.3 30,558.2 5.75%


4.1.1.4.Transfer of expenses

This item, for the sum of 29.1 million Euros, pre-dominantly comprises:•the reimbursements of benefits by the affi-

liates amounting to 15.6 million Euros;•the full reimbursement of benefits paid to the

EJEN (National Youth EmploymentProgramme) for the sum of 7.4 million Euros;

•the reimbursement of benefits between the EUcountries for 5.5 million Euros;

•the reimbursement of CSP (improved job secu-rity contract) benefits for 0.5 million Euros.

4.1.2.Expenses

The technical management expenses totaldecreased by 0.13% in 2011, as a result of theimprovement in the economic situation duringthe first few months of the year, with theincrease in expenses nevertheless resuming inthe fourth quarter.

The reduction in expenses more specificallyaffects the benefit paid to members of the CRP,the number of which has decreased by 15.6%,even taking into account the CSP which tookover from this arrangement.

The expenses per benefit result from theassumption of responsibility for:• payments to benefit recipients made during

the financial year;• the reduction in expenses associated with the

detection of overpayments;• the depreciation reversal recorded in 2010 for

benefits to be paid for the previous financialyear;

• the supplementary expenses represented bythe depreciation recorded for the benefits paidat the start of 2012 for periods from 2011 orprevious years.

The calculation of these supplementaryexpenses no longer only concerns the assump-tion of responsibility for the transactions ofJanuary 2012, but also the transactions ofFebruary and March 2012 from periods from2011 or previous years. This represents an addi-tional amount of 103 million Euros.

A new benefit, the improved job security benefit,takes over from the specific redeployment bene-fit and the occupation transition benefit for

those signed up to this support arrangementfrom 1 September 2011.The change in payments to benefit recipients forthe main benefits is as follows:• ARE payments represented the sum of 25.797

billion Euros in 2011 compared with 25.712 bil-lion Euros in 2010, i.e. a 0.34% increase which isexplained by a 1.02% increase in the averageamount of the daily benefit, and a 0.68% reduc-tion in the number of compensated days;

• ARE Training payments represented anamount of 0.984 billion Euros in 2011 compa-red with 0.982 billion Euros in 2010, i.e. a 0.2%increase which is explained by a 0.72% increasein the average amount of the daily benefit, anda 0.52% reduction in the number of compensa-ted days;

• ASR, ASP and CTP payments represented thesum of 1.376 billion Euros in 2011 comparedwith 1.711 billion Euros in 2010, i.e. a 19.5%decrease which is explained by a 5.3% decreasein the average amount of the daily benefit, anda 15% reduction in the number of compensateddays.

4.1.2.1. Benefits

(in millions of Euros) 2011 2010 2011/2010

Unemployment benefit (ARE) 25,220.7 25,047.6 0.69%Other benefits 2,324.5 2,634.1 - 11.75%

Unemployment benefit (ARE) Training 1,060.0 1,044.1 1.52%Benefit for older unemployed persons (ACA) 8.4 21.1 - 60.19%Specific redeployment benefit (ASR) 1,180.9 1,551.8 - 23.90%Benefit from the specific temporary fund (ASP) 58.7 100%Other 16.5 17.1 - 3.51%

TOTAL 27,545.2 27,681.7 - 0.49%


4.1.2.2. Redeployment benefits

Redeployment benefits amounted to 1,097.5 million Euros in 2011, compared with 1,093.6 million Eurosin 2010, and are broken down in the following manner:

4.1.2.3. Validation of pension points

This item corresponds to the cost of the validation of benefit recipients’ supplementary pension pointsfor the sum of 1,614.1 million Euros in 2011, compared with 1,646.7 million Euros in 2010. This decreaseis explained by the drop in benefit recipient expenditure and adjustments over previous years.

The breakdown by pension scheme is shown in the table below:

4.1.2.4.Other technical management expenses

This item, for an amount of 3,354.8 million Euros,is down by 4.28% compared with 2010. The mainexpenses comprise:•the debt write-offs and cancellations of affilia-

ted debts for 207.9 million Euros;•the debt write-offs and cancellations of bene-

fit recipient debts for 43.8 million Euros;•the assumption of responsibility by Unédic of

its contribution to the FNE (NationalEmployment Fund) agreements for 12.3 mil-lion Euros;

•the 10% contribution due by Unédic to Pôleemploi for 2,965.7 million Euros;

•Unédic’s contribution to the supporting costsof those signed up to the CRP (Personal rede-

ployment agreement) for 50.6 million Euros;•Unédic’s contribution to the CSP (Improved job

security contract) costs for 18.8 million Euros;•Unédic’s contribution to the financing of the

long-term reduced activity (APLD) arrange-ment for the sum of 20.6 million Euros.

4.1.2.5.Depreciations

The depreciation of claims or against affiliates is326.8 million Euros for the year.The depreciation of undue payments to benefitrecipients reach the amount of 24.8 millionEuros.The depreciation for contingencies and expensesamounting to 12 million Euros concerns thedepreciation for financing the ASFNE.

ARCE (assistance for the takeover or creation of a company) represents the main benefit amounting to977.9 million Euros or 89% of all benefits. Its amount decreased by 1.19% in 2011.

(in millions of Euros) 2011 2010 2011/2010

ASCRE – Supplementary specific unemployment benefit 0 0 0.00%ADR – Compensatory allowance upon redeployment 50.9 43.6 16.74%ARCE – Assistance for the takeover or creation of a company 977.9 989.7 -1.19%IDR – CRP differential redeployment indemnity 14.4 19.1 -24.61%Other benefits 54.3 41.2 31.80%

Total redeployment benefits 1,097.5 1,093.6 0.36%

(in millions of Euros) TOTAL

Arrco 1,988.7Agirc 645.7Other funds (Ircantec – CRPNPAC) 106.1Total pension funds 2,740.5Contribution of benefit recipients -1,126.4Validation of pension points 1,614.1


Administrative management4.2

(in millions of Euros) 2011 2010

AGS 41.1 40.7Pôle emploi 2.6 3.8Other agreements with third parties 0.0 0.0Other depreciations of services 0.0 -0.3

TOTAL 43.7 44.2


Works and services provided by third parties 11.1 10.7Other external services (including expenses to finance union andemployer organisations: 4 million Euros in 2011) 10.5 13.7Rents 2.0 2.0Transportation and travel 1.3 1.5Postal and telecommunications costs 0.5 0.5Notarial fees and costs 18.0 19.3Bank and postal costs 5.7 4.8

TOTAL 49.1 52.5

4.2.1. Income

4.2.1.1. Depreciation of services

This item, amounting to 43.7 million Euros, is essentially made up of income received from third par-ties within the framework of management agreements:

4.2.1.2. Other income

This item, for a total amount of 30.2 million Euros,mainly represents the rent paid by Pôle emploiwithin the context of the supply of theUnemployment insurance scheme’s real estateassets for 29.4 million Euros, to which is addedthe re-invoicing of co-ownership expenses for 0.8million Euros.

4.2.2. Expenses

The expenses come to 106.5 million Euros in2011 and are down 16.2% compared with 2010,particularly as a result of the sale of fixed assetsto Pôle emploi.

The amortisation of the real estate base(approximately 300 sites as at 31 December2011), its maintenance and its managementconstitute a significant administrative manage-ment expense.

4.2.2.1. Purchases

This item represents 0.47% of the administrativemanagement expenses, or 0.5 million Euros,compared with 0.7 million Euros in 2010.

4.2.2.2. External services

This item represents 46.1% of the administrativemanagement expenses.

The Other external services item includes, inter alia, expenses relating to the financing of employer andunion organisations, within the context of managing the Unemployment insurance scheme, i.e. 4 mil-lion Euros in 2011.


Financial management4.3


Taxes on earnings 1.9 1.9Other taxes and levies 3.4 6.0

TOTAL 5.3 7.9


Wages 17.6 18.1Social security costs 8.3 8.4

TOTAL 25.9 26.5

4.2.2.3. Taxes and levies

This item represents 5% of the administrative management costs and is broken down as follows:

4.2.2.4. Wages and social security costs

This item represents 27.5% of the administrative management costs. It is broken down into:

4.2.2.5. Amortisation and depreciations

This item represents 24% of the administrative management expenses, or 25.6 million Euros, compa-red with 39.4 million Euros in 2010, with the significant reduction being attributable to the sales ofmovable and immovable property to Pôle emploi.

The financial result is negative:• -116.7 million Euros in 2010;• -177 million Euros in 2011.

The 2011 expenses came to 191.4 million Euros and correspond essentially to:• structured financing expenses for 184.1 million Euros, or:- 120.5 million Euros for the bond issues and the bridging facility;- 63.6 million Euros in interest on the commercial papers programme;• expenses relating to authorised bank overdrafts and miscellaneous expenses for 2.1 million Euros;• amortisation of bond issue redemption premiums for 5.2 million Euros.

The average financing rate for 2011 came to 1.422%.

The decrease in the Other taxes and levies item is primarily the result of obtaining property tax and hou-sehold refuse collection tax rebates amounting to 2.1 million Euros.


Extraordinary profit or loss4.4The slightly negative income from extraordinary transactions (less than 10,000 Euros) is made up of thefollowing transactions:•capital gains of 1.2 million Euros for sales of fixed assets;•miscellaneous income amounting to 0.4 million Euros;•miscellaneous expenses amounting to 1.6 million Euros.

Corporation tax4.5Unédic is liable for corporation tax for the profit or loss on property revenue. The tax due, at the rate of10%, came to 3.6 million Euros for 2011.

Financial year profit or loss4.6This item represents the net profit or loss for the 2011 financial year for the Unemployment insurancescheme. The result is negative by 1,460.6 million Euros.


Estimate of the benefits to be paid to benefitrecipients in receipt of benefits at the endof the financial year using underlyingassumptions

5.1

5.ADDITIONALINFORMATION

A P P E N D I X

The method of management by distributionimplies that certain technical depreciationswhich might be set aside within the frameworkof an insurance or welfare activity are not setaside within the specific framework of theUnemployment insurance scheme. However,they constitute potential forecast expenditurecalculated at the end of the financial year whichonly the break-even point of the Unemploymentinsurance scheme or a change in regulationmight call into question in the future.With a view to ensuring third parties are betterinformed, we present to you below the esti-mates which we consider the most important, inaddition to their means of calculation.More extensive information on the expenditureand income forecasts can be found in the mana-gement report in the ”2012 Outlook” section, inaccordance with works regularly conducted bythe Unemployment insurance scheme on thebenefits/contributions equilibrium and thecoverage of its financing needs.

5.1.1.Estimate of the benefits yetto be paid by the Unemploymentinsurance scheme to the benefitrecipients compensated atthe end of the financial year

The amount of benefits to be paid over the ave-rage duration of unemployment yet to run asof 31 December 2011, to benefit recipients

registered on this date, was assessed byUnédic’s department of studies and analyses at21,035 million Euros. This amount does not takeinto account the benefits to be paid to recipientsof an indemnification maintenance until theirretirement. The means and procedures used tocalculate this estimate are as follows:• calculation of benefits paid in 2011 to current

benefit recipients as at 31 December 2010(2,283,740 benefit recipients), i.e. 14,288 millionEuros;

•calculation of benefits yet to be paid to thispopulation after 31 December 2011, i.e. 5,942million Euros. This population represents 28%of current benefit recipients as at 31 December2010;

•for this 2010 population, the total amount ofbenefits yet to be paid by the Unemploymentinsurance scheme is 20,230 million Euros;

•this amount is updated, taking into account a3.98% increase in benefit recipients as at 31December 2011 compared with 31 December2010; the estimate of the benefits yet to bepaid to the benefit recipients compensated atthe end of the 2011 financial year is 21,035 mil-lion Euros.


5.1.2.Estimate of the benefits yetto be paid by the Unemploymentinsurance scheme to benefitrecipients receiving anindemnification maintenance

These benefits concern the jobseeker benefitrecipients who may, under certain conditions,

collect their indemnities up to retirement age.The amount of benefits yet to be paid to thesebenefit recipients registered at the end of thefinancial year was assessed by Unédic’s depart-ment for studies and analyses at 532 millionEuros. The calculation is made by prolonging theindemnification rate used as at 31 December2011 until the day before the retirement date,with the maximum age being 65.

The vocational training agreement, signed on 6October 2005, implements, by adapting them tothe context of Unemployment insurance, thedepreciations of law no. 2004-391 of 4 May 2004and the national multi-sector agreement of 5December 2003.The depreciations of the agreement stipulatethat from 1 January 2004, employees of theUnemployment insurance scheme acquire indi-vidual rights to training, capped at 21 hours per

annum and per employee. This right, cumulatedover 6 years, therefore amounts to a maximumof 126 hours per employee as at 31 December2011.When the accounts are drawn up, the acquiredrights are calculated by using the personal dataof the Unemployment insurance employees. Asat 31 December 2011, the cumulation of acquiredrights came to almost 7,037 hours.

Individual right to training5.2

The scope of consolidation includes:•Unédic;•one unmerged Assédic agency, French Guiana;•SCI Reuilly 1, Unédic subsidiary which holds the

leasing which financed the construction of theMontpellier IT production centre;

•the SI Convergence Emploi EIG created inMarch 2007 by ANPE and Unédic within theframework of implementing a common IT sys-tem, and in the process of being dissolved.

N° INSTITUTIONS69 French Guiana

SCI Reuilly 1Unédic

GIE SI Convergence Emploi

Scope of consolidation5.4

The number of Unédic staff as at 31 December 2011 is 339 Unédic employees, 239 of which are alloca-ted to the Unédic/AGS Delegation.

Number of Unemployment insurance staff5.3


AUDITORS’REPORTON THE CONSOLIDATED ACCOUNTS

Financial year ended 31 December 2011


To the members of the Board of Directors,

In fulfilment of the assignment entrusted to us by your Board of Directors, we hereby report to you,for the year ended 31 December 2011, on:• the audit of the so-called combined consolidated accounts of the Unemployment insurance

scheme managed by Unédic, as they are attached to this report;• the justification of our assessments;• the specific verification required by law.

The consolidated accounts have been approved by the Managing Director of Unédic. Our role is toexpress an opinion on these accounts based on our audit.

We conducted our audit in accordance with pro-fessional standards applicable in France. Thosestandards require that we plan and perform theaudit to obtain reasonable assurance aboutwhether the consolidated accounts are free ofmaterial misstatement. An audit includes exa-mining, on a test basis or by means of othermethods of selection, evidence supporting theamounts and information in the consolidatedaccounts. An audit also includes assessing theaccounting principles used and significant esti-mates made, as well as evaluating the overallpresentation of the accounts. We believe thatthe information that we have collected is suffi-cient and relevant on which to base our opinion.We certify that, in accordance with French

accounting rules and principles, the consolidatedaccounts of the financial year give a true and fairview of the assets, the financial position, and theincome of the whole made up of theUnemployment insurance institutions and theother entities included in the combination ofaccounts (”the consolidation”).Although not to undermine the opinion expres-sed above, we draw your attention to the pointreferred to in the appendix relating to the mea-sures taken in order to finance theUnemployment insurance scheme given theeconomic context and its impact on the techni-cal equilibrium forecasts (see note 1.6.2.”Financing of the 2012-2013 period”).

Opinion on the consolidated accounts1

Pursuant to the depreciations of Article L.823-9of the French Commercial Code relating to thejustification of our assessments, we herebyinform you that the assessments we have car-ried out concerned the appropriate nature of theaccounting principles applied and, where neces-sary, the reasonable nature of the significantestimates used and the overall presentation ofthe accounts, by way of:• The note in the appendix referring to theaccounting principles, rules and methods speci-fies that the Unemployment insurance scheme

is a specific scheme by distribution and that theaccounts were drawn up in accordance with thechart of accounts of the unemployment insu-rance organisations approved by the NationalAccounting Council. In order to draw up theconsolidated accounts, the specific informationlinked to the declarative nature ofUnemployment insurance is thereby taken intoaccount and the consequences arising there-from, both in respect of the declarations ofaffiliates and the payments to benefit recipients.

Justification of the assessments2

AUDI

TORS

’REP

ORT


• Furthermore, the financial year’s accountswere drawn up with a view to continuedUnemployment insurance activities, given thestructuring hypothesis referred to in note 1.6.2.of the ”Financing of the 2012-2013 period”appendix which sets out Unédic’s ability to haveaccess to the necessary financing.As part of our assessment of the accountingrules and principles used, we verified the appro-priate nature of the accounting methodsspecified above and the information provided inthe notes of the appendix.• The Unemployment insurance scheme’saccounts were drawn up on the basis of financialinformation produced by third parties, primarilyby Pôle emploi and ACOSS, with regard to thetransactions carried out by these entities onbehalf of the Unemployment insurance scheme.- We have familiarised ourselves with the”Auditors’ Report on the accounting statementsof Pôle emploi linked to the management onbehalf of Unédic of individual contributions fromcertain affiliates and payments to benefit reci-pients”, drawn up on 5 June 2012, and whichgives a favourable opinion.

- We have familiarised ourselves with the”Court’s positions on the 2011 accounts ofACOSS’ recovery activity” adopted by the 6thChamber of the French Accounting Court on 26June 2012 and which give reasonable assuranceas to the cash flows specifically concerning theUnemployment insurance scheme both in termsof income and collections.- We ensured the correct transcription of theseaccounting statements in the Unemploymentinsurance scheme’s accounts.- We were aware of the work carried out by thePôle emploi Auditors and by the FrenchAccounting Court and we supplemented it withspecific requests concerning both the internalaudit and the audit of the accounts. Our workconsisted in examining the relevance and suffi-cient nature of the information obtained.

The assessments were made in the context ofour audit of the consolidated accounts, taken asa whole, and therefore contributed to the for-mation of our opinion expressed in the first partof this report.

We have also performed the specific verificationrequired by law of the information on the groupgiven in the Managing Director’s managementreport, in accordance with professional standardsapplicable in France.

We have no matters to report regarding their fairpresentation and conformity with the consolida-ted accounts.

Paris and Neuilly, 27 June 2012

The Auditors

Specific verification3

Deloitte & Associés

Anne BLANCHE Vincent BLESTEL

FCN

Serge FLOCH Stéphane LOUBIERES

FINANCIALREPORT

2011

N O T E S

4 rue Traversière – 75012 ParisTelephone: +33 (0)1 44 87 64 00

Fax: +33 (0)1 44 87 64 01

www.unedic.frwww.twitter.com/unedic

UNéD

IC-D

IREC

TION

GEST

ION

ETCO

MPT

ABIL

ITé

-FIN

ANCI

ALRE

PORT

2011

-JUL

Y20

12-I

SNN

:099

7-13

51-C

REAT

ION

/DES

IGN

:WW

W.E

DITE

S.FR

FINANCIALREPORT

2011

unédic : financial report 2011

Economy & Finance

financial year92

million euros

changein cash balance

balance sheet analysis

standard job creations

positive job searches

benefit management agency

loss account analysis