OFFERING CIRCULARDated 19th July, 2001

SOCIETE NATIONALE DES CHEMINS DE FER FRANÇAIS€7,000,000,000

Euro Medium Term NotesDue from one day from the date of original issue

Under the Euro Medium Term Note Programme described in this Offering Circular (the "Programme"), Société Nationale desChemins de fer Français (the "Issuer"), subject to compliance with all relevant laws, regulations and directives, may from time to time issueoutside the Republic of France Euro Medium Term Notes (the "Notes").' The aggregate nominal amount of Notes outstanding will not atany time exceed €7,000,000,000 (or its equivalent in other currencies).

This Offering Circular (the "Offering Circular") supersedes and replaces the Offering Circular dated 26th June, 2000.

Notes will be issued in one or more series (each a "Series"). Each Series shall be in bearer form or in registered form and may beissued in one or more tranches (each a "Tranche") on different issue dates and on terms otherwise identical (except in relation to the interestcommencement dates and matters related thereto).

Application has been made to list Notes issued under the Programme on the Luxembourg Stock Exchange (the "Luxembourg StockExchange") and application may be made in certain circumstances to list Notes on Euronext Paris S.A. ("Euronext Paris"). In relation toNotes listed on the Luxembourg Stock Exchange, this Offering Circular is valid for a period of one year from the date hereof. However,unlisted Notes may be issued pursuant to the Programme. The relevant Pricing Supplement (as defined below) in respect of the issue of anyNotes will specify whether or not such Notes will be listed and, if so, the relevant stock exchange(s).

This Offering Circular has not been submitted to the clearance procedures of, nor registered by, the Commission des Opérations deBourse (the "COB"), and no Notes may be listed on Euronext Paris unless and until a prospectus incorporating this Offering Circular (the"Document de Base") has been approved by the COB and a registration number granted with respect thereto.

Notes of each Tranche of each Series of Notes in bearer form will initially be represented by a temporary global note in bearer form(each a "Temporary Global Note") or a permanent global note in bearer form (each a "Permanent Global Note" and, collectively with anyTemporary Global Note, the "Global Notes"), each without interest coupons. Global Notes may be deposited (a) in the case of a Trancheintended to be cleared through Euroclear and/or Clearstream Banking, société anonyme ("Clearstream, Luxembourg") on the issue date ofthe relevant Tranche of each Series with a common depositary on behalf of Euroclear Bank S.A./N.V., as operator of the Euroclear System("Euroclear"); and Clearstream, Luxembourg, (b) in the case of a Tranche intended to be cleared through Euroclear France and theIntermédiaires financiers habilités, authorised to maintain accounts therein (together, "Euroclear France"), on the issue date with EuroclearFrance, acting as central depositary, and (c) in the case of a Tranche intended to be cleared through a clearing system other than or inaddition to Euroclear, Clearstream, Luxembourg or Euroclear France or delivered outside a clearing system, as agreed between the Issuerand the relevant Dealer. The provisions governing the exchange of interests in Global Notes for other Global Notes and definitive Notes aredescribed in "Form of Notes and Transfer Restrictions".

Notes of each Tranche of each Series of Notes in registered form ("Registered Notes" comprising a "Registered Series") and whichare sold in an "offshore transaction" within the meaning of Regulation S under the U.S. Securities Act of 1933 as amended (the "SecuritiesAct") will initially be represented by one or more global certificates (each an "Unrestricted Global Certificate") in fully registered formwithout interest coupons which will be (a) in the case of a Tranche intended to be cleared through Euroclear and/or Clearstream,Luxembourg, deposited with, and registered in the name of a nominee of, a common depositary for Euroclear and Clearstream, Luxembourgand (b) in the case of a Tranche intended to be cleared through Euroclear France, deposited with, and registered in the name of, EuroclearFrance or as otherwise agreed with Euroclear France, which may in each case be exchangeable under their terms for definitive RegisteredNotes. Notes of each Tranche of each Registered Series sold to a qualified institutional buyer within the meaning of Rule 144A under theSecurities Act, as referred to in, and subject to the transfer restrictions described in, "Form of Notes and Transfer Restrictions - RegisteredNotes" and "Subscription and Sale", will initially be represented by one or more global certificates (each a "Restricted Global Certificate"and, together with the Unrestricted Global Certificates, "Global Certificates") in fully registered form without interest coupons which will bedeposited with a custodian for, and registered in the name of a nominee of. The Depository Trust Company ("DTC") on its issue date. See"Form of Notes and Transfer Restrictions - Registered Notes". Individual definitive Registered Notes will only be available in certainlimited circumstances as described herein.

THE NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, ASAMENDED (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD OR DELIVERED WITHIN THE UNITEDSTATES EXCEPT TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT TO RULE 144A UNDER THE SECURITIES ACT.FOR CERTAIN RESTRICTIONS ON TRANSFER OF THE NOTES, SEE "FORM OF NOTES AND TRANSFER RESTRICTIONS".

Arranger for the Programme

ABN AMRO

DealersABN AMRO BNP PARIBAS

Deutsche Bank Morgan StanleyNomura International UBS Warburg

The Issuer having made all reasonable enquiries confirms that this document contains or incorporates allinformation with respect to the Issuer, the Issuer and its consolidated subsidiaries taken as a whole (the "Group")and the Notes that is material in the context of the issue and offering of the Notes, the statements contained in itrelating to the Issuer and the Group are in every material particular true and accurate and not misleading, theopinions and intentions expressed in this Offering Circular with regard to the Issuer and the Group are honestlyheld, have been reached after considering all relevant circumstances and are based on reasonable assumptionsand to the best of its knowledge and belief there are no other facts in relation to the Issuer, the Group or theNotes the omission of which would, in the context of the issue and offering of the Notes, make any statement inthis Offering Circular misleading in any material respect and all reasonable enquiries have been made by theIssuer to ascertain such facts and to verify the accuracy of all such information and statements. The Issuer acceptsresponsibility accordingly.

No person has been authorised to give any information or to make any representation other than thosecontained in this Offering Circular in connection with the issue or sale of the Notes and, if given or made, suchinformation or representation must not be relied upon as having been authorised by the Issuer or any of theDealers or the Arranger (as defined in "Summary of the Programme"). Neither the delivery of this OfferingCircular nor the offering, sale or delivery of any Notes shall, under any circumstances, create any implication thatthere has been no change in the affairs of the Issuer or the Group since the date hereof or the date upon whichthis Offering Circular has been most recently amended or supplemented or that there has been no adverse changein the financial position of the Issuer or the Group since the date hereof or the date upon which this OfferingCircular has been most recently amended or supplemented or that any other information supplied in connectionwith the Programme is correct as of any time subsequent to the date on which it is supplied or, if different, thedate indicated in the document containing the same.

The distribution of this Offering Circular and the offering or sale of the Notes in certain jurisdictions maybe restricted by law. Persons into whose possession this Offering Circular comes are required by the Issuer, theDealers and the Arrangers to inform themselves about and to observe any such restrictions. The Notes have notbeen and will not be registered under the Securities Act and include Notes in bearer form that are subject to U.S.tax law requirements. Subject to certain exceptions, Notes may not be offered, sold or delivered within the UnitedStates or to U.S. persons. For a description of certain restrictions on offers and sales of Notes and on distributionof this Offering Circular, see "Subscription and Sale".

Prospective purchasers are hereby notified that a seller of the Notes may be relying on the exemption fromthe registration requirements of Section 5 of the Securities Act provided by Rule 144A under such Act("Rule 144A").

This Offering Circular does not constitute an offer of, or an invitation by or on behalf of the Issuer or theDealers to subscribe for, or purchase, any Notes.

Neither the Dealers nor the Arranger have verified the information contained in this Offering Circular.None of them makes any representation, express or implied, or accepts any responsibility, with respect to theaccuracy or completeness of any of the information in this Offering Circular. Neither this Offering Circular norany document incorporated by reference nor any other financial statements are intended to provide the basis ofany credit or other evaluation and should not be considered as a recommendation by any of the Issuer, theArranger or the Dealers that any recipient of this Offering Circular or any other financial statements or anydocument incorporated by reference should purchase the Notes. Each potential purchaser of Notes shoulddetermine for itself the relevance of the information contained in this Offering Circular and its purchase of Notesshould be based upon such investigation as it deems necessary. None of the Dealers or the Arranger undertakesto review the financial condition or affairs of the Issuer during the life of the arrangements contemplated by thisOffering Circular nor to advise any investor or potential investor in the Notes of any information coming to theattention of any of the Dealers or the Arranger.

In connection with any Tranche, one of the Dealers may act as a stabilising manager (the "StabilisingManager"). The identity of the Stabilising Manager will be disclosed in the relevant Pricing Supplement.References in the next paragraph to "this issue" are to each Tranche in relation to which a Stabilisation Manageiis appointed. .

In connection with this issue, the Stabilising Manager may over-allot or effect transactions which stabilise 01maintain the market price of the Notes at a level which might not otherwise prevail. Such stabilising, ilcommenced, may be discontinued at any time and will be carried out in accordance with applicable laws andregulations.

In this Offering Circular, unless otherwise specified or the context otherwise requires, references to "FF","FRF", "Francs" and "French Francs" are to the lawful currency of the Republic of France prior to 1st January,1999 and references to "€" and "euro" are to the lawful currency of the Member States of the European Unionthat adopt the single currency in accordance with the Treaty establishing the European Community, as amendedby the Treaty on European Union and as amended by the Treaty of Amsterdam. References to "U.S. dollars","U.S.$" and "$" are to the lawful currency of the United States of America and to "Sterling" and "£" are to thelawful currency of the United Kingdom.

CONTENTS

PageSUMMARY OF THE PROGRAMME : 5TERMS AND CONDITIONS OF THE NOTES 10USE OF PROCEEDS 27FORM OF NOTES AND TRANSFER RESTRICTIONS 28SOCIETE NATIONALE DES CHEMINS DE FER FRANÇAIS

INTRODUCTION 38MANAGEMENT REPORT FOR THE YEAR ENDED 31st DECEMBER, 2000 40CONSOLIDATED FINANCIAL STATEMENTS 66NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 70STATUTORY AUDITORS' REPORT ON THE CONSOLIDATED FINANCIAL

STATEMENTS FOR THE YEAR ENDED 31st DECEMBER, 2000 102CAPITALISATION 103RECENT DEVELOPMENTS 105

SUBSCRIPTION AND SALE 106FORM OF PRICING SUPPLEMENT 108GENERAL INFORMATION 117

THE NOTES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE U.S. SECURITIESAND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION IN THE UNITED STATESOR ANY OTHER U.S. REGULATORY AUTHORITY NOR HAVE ANY OF THE FOREGOINGAUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE OFFERING OF NOTES ORTHE ACCURACY OR THE ADEQUACY OF THIS OFFERING CIRCULAR. ANY REPRESENTATIONTO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.

NOTICE TO NEW HAMPSHIRE RESIDENTS: NEITHER THE FACT THAT A REGISTRATIONSTATEMENT OR AN APPLICATION FOR A LICENCE HAS BEEN FILED UNDER CHAPTER 421-BOF THE NEW HAMPSHIRE REVISED STATUTES WITH THE STATE OF NEW HAMPSHIRE NORTHE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED INTHE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OFNEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE ANDNOT MISLEADING, NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OREXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THESECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONSOF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY ORTRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVEPURCHASER, CUSTOMER OR CLIENT, ANY REPRESENTATION INCONSISTENT WITH THEPROVISIONS OF THIS PARAGRAPH.

DOCUMENTS INCORPORATED BY REFERENCE

All amendments and supplements to this Offering Circular prepared by the Issuer from time to time, themost recently published audited annual accounts, and any interim accounts (whether audited or unaudited)published subsequently to such annual accounts, of the Issuer from time to time, shall be deemed to beincorporated in, and to form part of, this Offering Circular and shall be deemed to modify or supersede thecontents of this Offering Circular to the extent that a statement contained in any such document is inconsistentwith such contents. Copies of all the documents incorporated by reference shall be available to any interestedperson, free of charge, at the specified offices of each of the Paying Agents.

For Euronext Paris listing purposes, the most recently published annual accounts of the Issuer and theinterim accounts (whether audited or unaudited) published subsequently to such annual accounts must becontained in a document submitted to the clearance procedures of the COB.

SUPPLEMENTAL OFFERING CIRCULAR

The Issuer has undertaken to the Dealers and the Luxembourg Stock Exchange that if at any time duringthe duration of the Programme there is a significant change affecting any matter contained in this OfferingCircular whose inclusion would reasonably be required by investors and their professional advisers, and wouldreasonably be expected by them to be found in this Offering Circular, for the purpose of making an informedassessment of the assets and liabilities, financial position, profits and losses and prospects of the Issuer and therights attaching to the Notes, the Issuer shall prepare an amendment or supplement to this Offering Circular orpublish a replacement Offering Circular for use in connection with any offering of the Notes to be listed on theLuxembourg Stock Exchange or Euronext Paris, as the case may be, or otherwise and shall supply to each Dealersuch number of copies of such supplement hereto as such Dealer may reasonably request.

AVAILABLE INFORMATION

For as long as any of the Notes remain outstanding and are "restricted securities" within the meaning oíRule 144(a)(3) under the Securities Act, the Issuer will, during any period in which it is not subject to Section 13or 15(d) under the U.S. Securities Exchange Act of 1934 (the "Exchange Act") nor exempt from reportingpursuant to Rule 12g3-2(b) under such Act, make available, upon request, to any person in whose name a GlobalCertificate is registered, to any owner of a beneficial interest in a Global Certificate, to a prospective purchaser ofa Registered Note (as defined below) or beneficial interest therein who is a qualified institutional buyer within themeaning of Rule 144A designated by any such person or beneficial owner, or to Deutsche Bank AG London asfiscal agent (the "Fiscal Agent") for delivery to any such person, beneficial owner or prospective purchaser, as thecase may be, in connection with the resale of a beneficial interest in a Global Certificate by such person orbeneficial owner, the information specified in Rule 144A(d)(4) under the Securities Act. In addition, the Issuerwill furnish the Fiscal Agent, the Paying Agent and the Luxembourg Stock Exchange with copies of its auditedannual accounts and unaudited semi-annual accounts, in each case prepared in accordance with accountingprinciples generally accepted in the Republic of France.

SUMMARY OF THE PROGRAMME

The following summary is qualified in its entirety by the remainder of this Offering Circular and, in relation tothe terms and conditions of any particular Tranche of Notes, the applicable Pricing Supplement.

Issuer

Description:

Amount:

Arranger:

Dealers:

Fiscal Agent and PrincipalPaying Agent:

Paying Agent:

Registran

Transfer Agents:

Method of Issue:

Redenomination:

Issue Price:

Société Nationale des Chemins de fer Français

Euro Medium Term Note Programme (thé "Programme")

Up to €7,000,000,000 (or its equivalent in other currencies at the date of issue)aggregate nominal amount of Notes outstanding at any one time.

ABN AMRO Bank N.V.

ABN AMRO Bank N.V., BNP PARIBAS, Deutsche Bank AG London,Morgan Stanley & Co. International Limited, Nomura International pic, andUBS AG, acting through its business group UBS Warburg.

The Issuer may from time to time terminate the appointment of any dealerunder the Programme or appoint additional dealers either in respect of one ormore Tranches or in respect of the whole Programme. References in thisOffering Circular to "Permanent Dealers" are to the persons listed above asDealers and to such additional persons that are appointed as dealers inrespect of the whole Programme (and whose appointment has not beenterminated) and references to "Dealers" are to all Permanent Dealers and allpersons appointed as a dealer in respect of one or more Tranches.

Issues of Notes denominated in euro will be carried out in accordance withapplicable French law and regulations.

Deutsche Bank AG London is the initial Fiscal Agent and Principal PayingAgent.

Deutsche Bank Luxembourg S.A.

Bankers Trust Company, New York

Deutsche Bank AG London, Deutsche Bank Luxembourg S.A. and BankersTrust Company, New York

The Notes will be issued on a syndicated or non-syndicated basis. The Noteswill be issued in one or more Series having one or more issue dates and onterms otherwise identical (or identical other than in respect of the firstpayment of interest), the Notes of each Series being intended to beinterchangeable with all other Notes of that Series. Each Series may beissued in Tranches on the same or different issue dates with no minimumissue size. In addition, Notes listed on Euronext Paris will be issued incompliance with the Principes Généraux of the COB and the Conseil desmarchés financiers published from time to time. Further Notes may be issuedas part of an existing Series. The specific terms of each Tranche (which will besupplemented, where necessary, with supplemental terms and conditions and,save in respect of the issue date, issue price, first payment of interest andnominal amount of the Tranche, will be identical to the terms of otherTranches of the same Series) will be set out in a pricing supplement to thisOffering Circular (a "Pricing Supplement").

Notes issued in the currency of any Member State of the EU whichparticipates in the third stage of EMU may be redenominated into europursuant to the provisions of "Terms and Conditions of the Notes - Form,Denomination, Title and Redenomination" below (see also "Consolidation"below).

Notes may be issued at their nominal amount or at a discount or premium totheir nominal amount. Partly-paid Notes may be issued, the issue price ofwhich will be payable in two or more instalments.

Form of Notes:

Clearing Systems:

Currencies:

The Notes may be issued in bearer form ("Bearer Notes"), in bearer formexchangeable for Registered Notes ("Exchangeable Bearer Notes") or inregistered form ("Registered Notes").

Each Tranche of Bearer Notes and Exchangeable Bearer Notes will initiallybe represented by interests in a Temporary Global Note in bearer form,without interest coupons, if (i) definitive Notes are to be made available toNoteholders following the expiry of 40 days after their issue date or (ii) suchNotes have an initial maturity of more than one year and are being issued incompliance with the D Rules (as defined in "Summary of the Programme -Selling Restrictions"), otherwise such Tranche will be represented byinterests in a Permanent Global Note in bearer form without interestcoupons.

Registered Notes offered and sold outside the United States in reliance onRegulation S under the Securities Act ("Regulation S") will be representedby an Unrestricted Global Certificate, in registered form, without interestcoupons attached, which will be deposited on or about the Issue Date (i) inthe case of a Tranche intended to be cleared through Euroclear and/orClearstream, Luxembourg, with Deutsche Bank AG London, as commondepositary for, and registered in the name of BT Globenet Nominees Limitedas nominee for such common depositary in respect of interests held through,Euroclear and Clearstream, Luxembourg and (ii) in the case of a Trancheintended to be cleared through Euroclear France, with, and registered in thename of, Euroclear France or as otherwise agreed with Euroclear France inrespect of interests held through Approved Intermediaries (as definedbelow). A beneficial interest in the Unrestricted Global Certificate may at alltimes be held only through Euroclear and Clearstream, Luxembourg orEuroclear France, as the case may be.

Registered Notes offered and sold in reliance on Rule 144A will berepresented by a Restricted Global Certificate, in registered form, withoutinterest coupons attached, which will be deposited on or about the Issue Datewith Bankers Trust Company, New York, as custodian for, and registered inthe name of Cede & Co. as nominee for, DTC. The Restricted GlobalCertificate (and any definitive Registered Notes issued in exchange therefor)will be subject to certain restrictions on transfer contained in a legendappearing on the face of such Certificate.

Clearstream, Luxembourg, Euroclear and Euroclear France for Bearer Notesand Clearstream, Luxembourg, Euroclear, Euroclear France and DTC forRegistered Notes. Application will be made for trading of Registered Notesin Portal, as specified in the applicable Pricing Supplement. In relation to anyTranche, Notes may be cleared through such other clearing system or systemsas may be agreed between the Issuer, the Fiscal Agent and the relevantDealer.

Subject to compliance with all relevant laws, regulations and directives, Notesmay be issued in any currency agreed between the Issuer and the relevantDealers.

Maturities:

Denomination:

Fixed Interest Rate Notes:

Floating Rate Notes:

Zero Coupon Notes:

Issues of Notes denominated in Swiss francs or carrying a Swiss franc relatedelement with a maturity of more than one year (other than Notes privatelyplaced with a single investor with no publicity) will be effected in compliancewith the relevant regulations of the Swiss National Bank based on article 7 ofthe Federal Law on Banks and Savings Banks of 8th November, 1934 (asamended) and article 15 of the Federal Law on Stock Exchanges andSecurities Trading of 24th March, 1995 in connection with article 2, paragraph2 of the Ordinance of the Federal Banking Corporation on Stock Exchangesand Securities Trading of 2nd December, 1996. Under the said regulations,the relevant Dealer or, in the case of a syndicated issue the lead manager (the"Swiss Dealer"), must be a bank domiciled in Switzerland (which includesbranches or subsidiaries of a foreign bank located in Switzerland or asecurities dealer only licensed by the Swiss-Federal Banking Commission asper the Federal Law on Stock Exchanges, and Securities Trading of24th March, 1995). The Swiss Dealer must report certain details of therelevant transaction to the Swiss National Bank no later than the relevantissue date for such a transaction.

Issues of Notes denominated in Sterling shall comply with all applicable lawsand regulations (as amended from time to time) of United Kingdomauthorities. See Banking Act 1987 (Exempt Transactions) Regulations 1997under "General Information" below.

Subject to compliance with all relevant laws, regulations and directives, anymaturity greater than one day.

Notes will be in such denominations as may be agreed by the Issuer and therelevant Dealer(s) and specified in the relevant Pricing Supplement, subjectto applicable laws and regulations. However, unless permitted by then currentlaws, regulations and directives, Registered Notes resold pursuant to Rule144A shall be in denominations of U.S.$500,000 (or its equivalent roundedupwards as agreed between the Issuer and the relevant Dealer(s)) and higherintegral multiples of U.S.$1,000 (or its equivalent rounded as aforesaid) andNotes (including Sterling Notes) in respect of which the issue proceeds are tobe accepted by the Issuer in the United Kingdom will have a minimumdenomination of £100,000 (or its equivalent in other currencies), unless suchNotes may not be redeemed until the third anniversary of their date of issueand are to be listed on the Luxembourg Stock Exchange or any other EEAStock Exchange (as defined in the Banking Act 1987 (Exempt Transactions)Regulations 1997).

Fixed interest will be payable in arrear on the date or dates in each yearspecified in the relevant Pricing Supplement.

Floating Rate Notes will bear interest determined separately for each Seriesas follows:

(i) on the same basis as the floating rate under a notional interest rate swaptransaction in the relevant Specified Currency governed by an agreementincorporating the 2000 ISDA Definitions published by the InternationalSwaps and Derivatives Association Inc., and as amended and updated as atthe Issue Date of the first Tranche of the Notes of the relevant Series; or

(ii) by reference to LIBOR, LIBID, LIMEAN or EURIBOR (or such otherbenchmark as may be specified in the relevant Pricing Supplement) asadjusted for any applicable margin.

Interest periods will be defined in the relevant Pricing Supplement.

Zero Coupon Notes may be issued at their nominal amount or at a discountto it and will not bear interest.

Dual Currency Notes: Payments (whether in respect of principal or interest and whether at maturityor otherwise) in respect of Dual Currency Notes will be made in suchcurrencies, and based on such rates of exchange as may be specified in therelevant Pricing Supplement.

Index Linked Notes: Payments of principal in respect of Index Linked Redemption Notes or oiinterest in respect of Index Linked Interest Notes will be calculated byreference to such index and/or such formula as may be specified in therelevant Pricing Supplement.

Variable Coupon Amount Notes: The Pricing Supplement issued in respect of each issue of variable coupor.amount Notes will specify the basis for calculating the amounts of interestpayable, which may be by reference to a stock index or formula or a;otherwise provided in the relevant Pricing Supplement.

Interest Periods and InterestRates:

Redemption:

Redemption by Instalments:

Other Notes:

Optional Redemption:

Early Redemption:

Status of Notes:

Negative Pledge:

Cross Default:

The length of the interest periods for the Notes and the applicable interestrate or its method of calculation may differ from time to time or be constan-for any Series. Notes may have a maximum interest rate, a minimum interés'rate, or both. The use of interest accrual periods permits the Notes to beaiinterest at different rates in the same interest period. All such informatioiwill be set out in the relevant Pricing Supplement.

The relevant Pricing Supplement will specify the basis for calculating theredemption amounts payable.

Unless permitted by then current laws and regulations, Notes (includinjSterling Notes) in respect of which the issue proceeds are to be accepted b;the Issuer in the United Kingdom will have a minimum redemption amounof £100,000 (or its equivalent in other currencies), unless such Notes may nobe redeemed until the third anniversary of their date of issue and are to bilisted on the Luxembourg Stock Exchange or any other EEA StoclExchange.

The Pricing Supplement issued in respect of each issue of Notes that arcredeemable in two or more instalments will set out the dates on which, amthe amounts in which, such Notes may be redeemed.

Terms applicable to high interest Notes, low interest Notes, step-up .Notesstep-down Notes, dual currency Notes, reverse dual currency Notes, optionadual currency Notes, partly-paid Notes and any other type of Note that thiIssuer, and any Dealer or Dealers may agree to issue under the Programmewill be set out in the relevant Pricing Supplement.

The Pricing Supplement issued in respect of each issue of Notes will stat<whether such Notes may be redeemed prior to their stated maturity at thioption of the Issuer (either in whole or in part) and/or the holders, and if scthe terms applicable to such redemption.

Except as provided in "Optional Redemption" above, Notes will btredeemable at the option of the Issuer prior to maturity only for ta:reasons. See "Terms and Conditions of the Notes - Redemption Purchasiand Options."

Subject to "Terms and Conditions of the Notes - Negative Pledge", the Notewill constitute direct, unconditional, unsubordinated and unsecureiobligations of the Issuer and rank and will rank pari passu without an;preference among themselves, all as described in "Terms and Conditions othe Notes - Status".

There will be a negative pledge as set out in Condition 4 - see "Terms amConditions of the Notes - Negative Pledge".

There will be a cross default as set out in Condition 10(iii) - see "Terms amConditions of the Notes - Events of Default".

..8

Rating:

Withholding Tax:

Consolidation:

Governing Law:

Listing:

Selling Restrictions:

Transfer Restrictions:

The Issuer's long term debt has been rated AAA by Standard & Poor's, Aalby Moody's Deutschland GmbH and AAA by Fitch and its short term debthas been rated A1+ by Standard & Poor's, Prime-1 by Moody's DeutschlandGmbH and F1+ by Fitch.

Subject as set out below and unless otherwise provided in the relevant PricingSupplement, payments in respect of the Notes will be made withoutwithholding or deduction for, or on account of, taxes imposed by or onbehalf of the Republic of France as provided by article 131 quater of theFrench General Tax Code, to the extent that the Notes are issued (or deemedto be issued) outside France.

Notes constituting obligations under French law will be issued (or deemed tobe issued) outside France (i) in the case of Notes denominated in euro, asprovided in the Circular of the Direction Generale des Impôts dated30th September, 1998, (ii) in the case of syndicated issues of Notesdenominated in currencies other than euro, if, inter alia, the Issuer and therelevant Dealers agree not to offer the Notes to the public in the Republic ofFrance and such Notes are offered in the Republic of France only to"qualified investors" as described in articles L.411-1 and L.411-2 of the CodeMonétaire et Financier or (iii) in the case of non-syndicated issues of Notesdenominated in currencies other than euro if each of the subscribers of theNotes is domiciled or resident for tax purposes outside the Republic ofFrance.

The tax regime applicable to Notes which do not constitute obligations will beset out in the relevant Pricing Supplement.

Notes of one Series may be consolidated with those of another Series, all asdescribed in "Terms and Conditions of the Notes - Further Issues andConsolidation".

English.

The Luxembourg Stock Exchange or as otherwise specified in the relevantPricing Supplement. As specified in the relevant Pricing Supplement, a Seriesof Notes need not be listed on any stock exchange. Any listing of Notes onEuronext Paris will be subject to the requirements of the COB and EuronextParis. It is a requirement of the COB that a prospectus in relation to theProgramme incorporating this Offering Circular (a "Document de Base") besubmitted to, and approved by, the COB and a registration number grantedwith respect thereto. As of the date of this Offering Circular, neither thisOffering Circular nor any Document de Base has been approved by the COB.Application may be made to have one or more Series of Notes accepted fortrading in The Portal Market ("Portal") of The Nasdaq Stock Market, Inc.

There are restrictions on the sale of Notes and the distribution of offeringmaterial in various jurisdictions. See "Subscription and Sale".

The Issuer is Category 2 for the purposes of Regulation S.

The Notes will be issued in compliance with U.S. Treas. Reg. 1/21.163-5(c)(2)(i)(D) (the "D Rules") unless (i) the relevant Pricing Supplementstates that Notes are issued in compliance with U.S. Treas. Reg. 1/21.163-5(c)(2)(i)(C) (the "C Rules") or (ii) the Notes are issued other than incompliance with the D Rules or the C Rules but in circumstances in which theNotes will not constitute "registration required obligations" under the UnitedStates Tax Equity and Fiscal Responsibility Act of 1982 ("TEFRA"), whichcircumstances will be referred to in the relevant Pricing Supplement as atransaction to which TEFRA is not applicable.

There are restrictions on the transfer of Registered Notes sold pursuant toRule 144A under the Securities Act. See "Form of Notes and TransferRestrictions".

TERMS AND CONDITIONS OF THE NOTES

The following is the text of the terms and conditions that, subject to completion and amendment andas supplemented or varied in accordance with the provisions of the relevant Pricing Supplement, shall beapplicable to the Notes, in definitive form (if any) issued in exchange for the Global Note(s) and the GlobalCertificates representing each Series. Either (i) the full text of these terms and conditions together with therelevant provisions of the Pricing Supplement or (ii) these terms and conditions as so completed, amended,supplemented or varied (and subject to simplification by the deletion of non-applicable provisions), shall beendorsed on such Bearer Notes or on the Certificates relating to such Registered Notes. All capitalised termsthat are not defined in these Conditions will have the meanings given to them in the relevant PricingSupplement. Those definitions will be endorsed on the definitive Notes or Certificates, as the case may be.References in the Conditions to "Notes" are to the Notes of one Series only, not to all Notes that may beissued under the Programme.

The Notes are issued (or deemed to be issued) outside the Republic of France by Société Nationaledes Chemins de fer Français (the "Issuer") pursuant to an amended and restated Agency Agreementdated 19th July, 2001 (as further amended or supplemented as at the date of issue of the Notes (the "IssueDate") between the Issuer, Deutsche Bank AG London as successor to Bankers' Trust Company,London Branch, as inter alia fiscal agent and principal paying agent and the other agents named in it, the"Agency Agreement") with the benefit of a deed of covenant (as amended or supplemented at the IssueDate, the "Deed of Covenant") dated 19th July, 2001 and executed by the Issuer in relation to the Notes.The fiscal agent, the paying agents, the registrar, the transfer agents and the calculation agent(s) for thetime being (if any) are referred to below respectively as the "Fiscal Agent", the "Paying Agents" (whichexpression shall include the Fiscal Agent), the "Registrar", the "Transfer Agents" and the "CalculationAgent(s)". The Noteholders (as defined below), the holders of the interest coupons (the "Coupons")relating to interest bearing Notes in bearer form and, where applicable in the case of such Notes, talonsfor further Coupons (the "Talons") (the "Couponholders") and the holders of the receipts for thepayment of instalments of principal (the "Receipts") relating to Notes in bearer form of which theprincipal is payable in instalments are deemed to have notice of all of the provisions of the AgencyAgreement applicable to them.

Copies of the Agency Agreement and the Deed of Covenant are available for inspection at thespecified offices of each of the Paying Agents, the Registrar and the Transfer Agents.

1. Form, Denomination, Title, Currency and Redenomination(a) Form, Denomination and Title:

The Notes are issued in bearer form ("Bearer Notes", which expression includes Notes that arespecified to be Exchangeable Bearer Notes), in registered form ("Registered Notes") or in bearerform exchangeable for Registered Notes ("Exchangeable Bearer Notes") in each case in theSpecified Denomination(s) shown hereon.

All Registered Notes shall have the same Specified Denomination. Where Exchangeable BearerNotes are issued, the Registered Notes for which they are exchangeable shall have the sameSpecified Denomination as the lowest denomination of Exchangeable Bearer Notes.

This note is a Fixed Rate Note, a Floating Rate Note, a Zero Coupon Note, an Index LinkedInterest Note, an Index Linked Redemption Note, an Instalment Note, a Dual Currency Note or aPartly Paid Note, a combination of any of the foregoing or any other kind of Note, depending uponthe Interest and Redemption/Payment Basis shown hereon.

Bearer Notes are serially numbered and are issued with Coupons (and, where appropriate, a Talon)attached, save in the case of Zero Coupon Notes in which case references to interest (other than inrelation to interest due after the Maturity Date), Coupons and Talons in these Conditions are notapplicable. Instalment Notes are issued with one or more Receipts attached.

Registered Notes are represented by registered certificates ("Certificates") and, save as provided inCondition 2(c), each Certificate shall represent the entire holding of Registered Notes by the sameholder.

Title to the Bearer Notes and the Receipts, Coupons and Talons shall pass by delivery. Title to theRegistered Notes shall pass by registration in the register that the Issuer shall procure to be kept bythe Registrar in accordance with the provisions of the Agency Agreement (the "Register"). Except

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as ordered by a court of competent jurisdiction or as required by law, the holder (as defined below)of any Note, Receipt, Coupon or Talon shall be deemed to be and may be treated as its absoluteowner for all purposes, whether or not it is overdue and regardless of any notice of ownership, trustor an interest in it, any writing on it (or on the Certificate representing it) or its theft or loss (or thatof the related Certificate) and no person shall be liable for so treating the holder.

In these Conditions, "Noteholder" means the bearer of any Bearer Note and the Receipts relatingto it or the person in whose name a Registered Note is registered (as the case may be), "holder" (inrelation to a Note, Receipt, Coupon or Talon) means the bearer of any Bearer Note, Receipt,Coupon or Talon or the person in whose name a Registered Note is registered (as the case may be),"Series" means a series of Notes comprising one or more Tranches (as defined below), whether ornot issued on the same date, that except in respect of the first payment of interest and their issueprice) have identical terms on issue and are expressed to have the same series number, "Tranche"means, in relation to a Series, those Notes of that Series that are issued on the same date at the sameissue price and in respect of which the first payment of interest is identical, and capitalised termshave the meanings given to them hereon, the absence of any such meaning indicating that such termis not applicable to the Notes.

(b) Redenomination:The Issuer may (if so specified hereon) without the consent of the holder of any Note, Receipt,Coupon or Talon, redenominate all, but not some only, of the Notes of any Series on or after thedate on which the Member State of the European Union in whose national currency such Notes aredenominated has become a participating Member State in the third stage of the European economicand monetary union ("EMU"), all as more fully provided in the relevant Pricing Supplement.

2. Exchanges of Exchangeable Bearer Notes and Transfers of Registered Notes(a) Exchange of Exchangeable Bearer Notes:

Subject as provided in Condition 2(f), Exchangeable Bearer Notes may be exchanged for the sameaggregate nominal amount of Registered Notes at the request in writing of the relevant Noteholderand upon surrender of each Exchangeable Bearer Note to be exchanged, together with allunmatured Receipts, Coupons and Talons relating to it, at the specified office of any TransferAgent; provided, however, that where an Exchangeable Bearer Note is surrendered for exchangeafter the Record Date (as defined in Condition 7(b)) for any payment of interest, the Coupon inrespect of that payment of interest need not be surrendered with it. Registered Notes may not beexchanged for Bearer Notes. Bearer Notes of one Specified Denomination may not be exchangedfor Bearer Notes of another Specified Denomination. Bearer Notes that are not ExchangeableBearer Notes may not be exchanged for Registered Notes.

(b) Transfer of Registered Notes:One or more Registered Notes may be transferred upon the surrender (at the specified office of theRegistrar or any Transfer Agent) of the Certificate representing such Registered Notes to betransferred, together with the form of transfer endorsed on such Certificate (or another form oftransfer substantially in the same form and containing the same representations and certifications (ifany), unless otherwise agreed by the Issuer), duly completed and executed and any other evidenceas the Registrar or Transfer Agent may reasonably require. In the case of a transfer of part only of aholding of Registered Notes represented by one Certificate, a new Certificate shall be issued to thetransferee in respect of the part transferred and a further new Certificate in respect of the balance ofthe holding not transferred shall be issued to the transferor.

(c) Exercise of Options or Partial Redemption in Respect of Registered Notes:In the case of an exercise of an Issuer's or Noteholders' option in respect of, or a partial redemptionof, a holding of Registered Notes represented by a single Certificate, a new Certificate shall beissued to the holder to reflect the exercise of such option or in respect of the balance of the holdingnot redeemed. In the case of a partial exercise of an option resulting in Registered Notes of thesame holding having different terms, separate Certificates shall be issued in respect of those Notesof that holding that have the same terms. New Certificates shall only be issued against surrender ofthe existing Certificates to the Registrar or any Transfer Agent. In the case of a transfer ofRegistered Notes to a person who is already a holder of Registered Notes, a new Certificate

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representing the enlarged holding shall only be issued against surrender of the Certificaterepresenting the existing holding.

(d) Delivery of New Certificates:

Each new Certificate to be issued pursuant to Conditions 2(a), (b) or (c) shall be available fordelivery within three business days of receipt of the request for exchange, form of transfer orExercise Notice (as defined in Condition 6(e)) and/or surrender of the Certificate for exchange.Delivery of the new. Certificate(s) shall be made at the specified office of the Transfer Agent or ofthe Registrar (as the case may be) to whom delivery or surrender of such request for exchange, formof transfer, Exercise Notice or Certificate shall have been made or, at the option of the holdermaking such delivery or surrender as aforesaid and as specified in the relevant request for exchange,form of transfer, Exercise Notice or otherwise in writing, be mailed by uninsured post at the risk ofthe holder entitled to the new Certificate to such address as may be so specified, unless such holderrequests otherwise and pays in advance to the relevant Agent (as defined in the AgencyAgreement) the costs of such other method of delivery and/or such insurance as it may specify. Inthis Condition 2(d), "business day" means a day, other than a Saturday or Sunday, on which banksare open for business in the place of the specified office of the relevant Transfer Agent or theRegistrar (as the case may be).

(e) Exchange Free of Charge:

Exchange and transfer of Notes and Certificates on registration, transfer, partial redemption orexercise of an option shall be effected without charge by or on behalf of the Issuer, the Registrar orthe Transfer Agents, but upon payment of any tax or other governmental charges that may beimposed in relation to it (or the giving of such indemnity as the Registrar or the relevant TransferAgent may require).

(f) Closed Periods:

No Noteholder may require the transfer of a Registered Note to be registered or an ExchangeableBearer Note to be exchanged for one or more Registered Note(s) (i) during the period of 15 daysending on the due date for redemption of, or payment of any Instalment Amount in respect of, thatNote, (ii) during the period of 15 days before any date on which Notes may be called for redemptionby the Issuer at its option pursuant to Condition 6(d), (iii) after any such Note has been called forredemption or (iv) during the period of seven days ending on (and including) any Record Date. AnExchangeable Bearer Note called for redemption may, however, be exchanged for one or moreRegistered Note(s) in respect of which the Certificate is simultaneously surrendered not later thanthe relevant Record Date.

3. StatusThe Notes and the Receipts and Coupons relating to them constitute (subject to Condition 4) direct,

unconditional and unsecured obligations of the Issuer and rank and will rank pari passu without anypreference among themselves and, save for statutorily preferred exceptions, equally with all its otherobligations which are unsecured and unsubordinated.

4. Negative PledgeSo long as any of the Notes, Receipts or Coupons remain outstanding (as defined in the Agency

Agreement) the Issuer will not secure or allow to be secured any loan, debt, guarantee or otherobligation, now or hereafter existing, by any mortgage, lien (other than liens arising by operation of law),pledge or other charge upon any of the present or future revenues or assets of the Issuer (except for anymortgage, lien, pledge or other charge on property purchased by the Issuer as security for all or part ofthe purchase price thereof) without at the same time according to the Notes the same or equivalentsecurity.

5. Interest and other Calculations

(a) Interest on Fixed Rate Notes:Each Fixed Rate Note bears interest on its outstanding nominal amount from the InterestCommencement Date at the rate per annum (expressed as a percentage) equal to the Rate ofInterest, such interest being payable in arrear on each Interest Payment Date.

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If a Fixed Coupon Amount or a Broken Amount is specified hereon, the amount of interest payableon each Interest Payment Date will amount to the Fixed Coupon Amount or, if applicable, theBroken Amount so specified and in the case of the Broken Amount will be payable on theparticular Interest Payment Date(s) specified hereon.

(b) Interest on Floating Rate Notes and Index Linked Interest Notes:(i) Interest Payment Dates:

Each Floating Rate Note and Index Linked Interest Note bears interest on its outstandingnominal amount from the Interest Commencement Date at the rate per annum (expressed as apercentage) equal to the Rate of Interest, such interest being payable in arrear on eachInterest Payment Date. Such Interest Payment Date(s) is/are either shown hereon as SpecifiedInterest Payment Dates or, if no Specified Interest Payment Date(s) is/are shown hereon,Interest Payment Date shall mean each date which falls the number of months or other periodshown hereon as the Specified Period after the preceding Interest Payment Date or, in the caseof the first Interest Payment Date, after the Interest Commencement Date.

(ii) Business Day Convention:If any date referred to in these Conditions that is specified to be subject to adjustment inaccordance with a Business Day Convention would otherwise fall on a day that is not aBusiness Day, then, if the Business Day Convention specified is (A) the Floating RateBusiness Day Convention, such date shall be postponed to the next day that is a Business Dayunless it would thereby fall into the next calendar month, in which event (x) such date shall bebrought forward to the immediately preceding Business Day and (y) each subsequent suchdate shall be the last Business Day of the month in which such date would have fallen had itnot been subject to adjustment, (B) the Following Business Day Convention, such date shallbe postponed to the next day that is a Business Day, (C) the Modified Following Business DayConvention, such date shall be postponed to the next day that is a Business Day unless itwould thereby fall into the next calendar month, in which event such date shall be broughtforward to the immediately preceding Business Day or (D) the Preceding Business DayConvention, such date shall be brought forward to the immediately preceding Business Day.

(iii) Rate of Interest for Floating Rate Notes:The Rate of Interest in respect of Floating Rate Notes for each Interest Accrual Period shallbe determined in the manner specified hereon and the provisions below relating to eitherISDA Determination or Screen Rate Determination shall apply, depending upon which isspecified hereon.

(A) ISDA Determination for Floating Rate Notes

Where ISDA Determination is specified hereon as the manner in which the Rate ofInterest is to be determined, the Rate of Interest for each Interest Accrual Period shallbe determined by the Calculation Agent as a rate equal to the relevant ISDA Rate plusor minus (as indicated hereon) the Margin (if any). For the purposes of this sub-paragraph (A), "ISDA Rate" for an Interest Accrual Period means a rate equal to theFloating Rate that would be determined by the Calculation Agent under a SwapTransaction under the terms of an agreement incorporating the ISDA Definitions andunder which:

(x) the Floating Rate Option is as specified hereon;

(y) the Designated Maturity is a period specified hereon; and

(z) the relevant Reset Date is the first day of that Interest Accrual Period unlessotherwise specified hereon.

For the purposes of this sub-paragraph (A), "Floating Rate", "Calculation Agent","Floating Rate Option", "Designated Maturity", "Reset Date", and "SwapTransaction" have the meanings given to those terms in the ISDA Definitions.

(B) Screen Rate Determination for Floating Rate Notes

Where Screen Rate Determination is specified hereon as the manner at which the Rateof Interest is to be determined, the Rate of Interest for each Interest Accrual Period

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shall be determined by the Calculation Agent at or about the Relevant Time on theInterest Determination Date in respect of such Interest Accrual Period in accordancewith the following:

(x) if the Primary Source for the Floating Rate is a Page, subject as provided below,the Rate of Interest shall be:

(I) the Relevant Rate (where such Relevant Rate on such Page is a compositequotation or is customarily supplied by one entity); or

(II) the arithmetic mean of the Relevant Rates of the persons whose RelevantRates appear on that Page,

in each case appearing on such Page at the Relevant Time on the InterestDetermination Date;

(y) if the Primary Source for the Floating Rate is Reference Banks or if sub-paragraph(x)(I) above applies and no Relevant Rate appears on the Page at the RelevantTime on the Interest Determination Date or if sub-paragraph (x)(II) above appliesand fewer than two Relevant Rates appear on the Page at the Relevant Time onthe Interest Determination Date, subject as provided below, the Rate of Interestshall be the arithmetic mean of the Relevant Rates that each of the ReferenceBanks is quoting to leading banks in the Relevant Financial Centre at the RelevantTime on the Interest Determination Date, as determined by the Calculation Agent;

(z) if paragraph (y) above applies and the Calculation Agent determines that fewerthan two Reference Banks are so quoting Relevant Rates, subject as providedbelow, the Rate of Interest shall be the arithmetic mean of the rates per annum(expressed as a percentage) that the Calculation Agent determines to be the rates(being the nearest equivalent to the Benchmark) in respect of a RepresentativeAmount of the Specified Currency that at least two out of five leading banksselected by the Calculation Agent in the principal financial centre of the country ofthe Specified Currency or, if the Specified Currency is euro, in the Euro-zone asselected by the Calculation Agent, (the "Principal Financial Centre") are quotingat or about the Relevant Time on the date on which such banks would customarilyquote such rates for a period commencing on the Effective Date for a periodequivalent to the Specified Duration (I) to leading banks carrying on business inEurope, or (if the Calculation Agent determines that fewer than two of such banksare so quoting to leading banks in Europe) (II) to leading banks carrying onbusiness in the Principal Financial Centre; except that, if fewer than two of suchbanks are so quoting to leading banks in the Principal Financial Centre, the Rate ofInterest shall be the Rate of Interest determined on the previous InterestDetermination Date (after readjustment for any difference between any Margin,Rate Multiplier or Maximum or Minimum Rate of Interest applicable to thepreceding Interest Accrual Period and to the relevant Interest Accrual Period);

(iv) Rate of Interest for Index Linked Interest Notes:

The Rate of Interest in respect of Index Linked Interest Notes for each Interest AccrualPeriod shall be determined in the manner specified hereon and interest will accrue byreference to an Index or Formula as specified hereon.

(c) Zero Coupon Notes:Where a Note the Interest Basis of which is specified to be Zero Coupon is repayable prior to theMaturity Date and is not paid when due, the amount due and payable prior to the Maturity Dateshall be the Early Redemption Amount of such Note. As from the Maturity Date, the Rate ofInterest for any overdue principal of such a Note shall be a rate per annum (expressed as apercentage) equal to the Amortisation Yield (as defined in Condition 6(b)).

(d) Dual Currency Notes:In the case of Dual Currency Notes, if the rate or amount of interest fails to be determined byreference to a Rate of Exchange or a method of calculating a Rate of Exchange, the rate or amountof interest payable shall be determined in the manner specified hereon.

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(e) Partly Paid Notes:In the case of Partly Paid Notes (other than Partly Paid Notes which are Zero Coupon Notes),interest will accrue as aforesaid on the paid-up nominal amount of such Notes and otherwise asspecified hereon.

(f) Accrual of Interest:Interest shall cease to accrue on each Note on the due date for redemption unless, upon duepresentation, payment is improperly withheld or refused, in which event interest shall continue toaccrue (as well after as before judgment) at the Rate of Interest in the manner provided in thisCondition 5 to the Relevant Date (as defined in Condition 8).

(g) Margin, Maximum/Minimum Rates of Interest, Instalment Amounts and Redemption Amounts, RateMultipliers and Rounding:(i) If any Margin or Rate Multiplier is specified hereon (either (x) generally, or (y) in relation to

one or more Interest Accrual Periods), an adjustment shall be made to all Rates of Interest, inthe case of (x), or the Rates of Interest for the specified Interest Accrual Periods, in the case of(y), calculated in accordance with (b) above by adding (if a positive number) or subtractingthe absolute value (if a negative number) of such Margin or multiplying by such RateMultiplier, subject always to the next paragraph;

(ii) If any Maximum or Minimum Rate of Interest, Instalment Amount or Redemption Amount isspecified hereon, then any Rate of Interest, Instalment Amount or Redemption Amount shallbe subject to such maximum or minimum, as the case may be;

(iii) For the purposes of any calculations required pursuant to these Conditions (unless otherwisespecified), (x) all percentages resulting from such calculations shall be rounded, if necessary, tothe nearest one hundred thousandth of a percentage point (with halves being rounded up), (y)all figures shall be rounded to seven significant figures (with halves being rounded up) and (z)all currency amounts that fall due and payable shall be rounded to the nearest unit of suchcurrency (with halves being rounded up), save in the case of yen, which shall be rounded downto the nearest yen. For these purposes "unit" means the lowest amount of such currency that isavailable as legal tender in the country or countries of such currency.

(h) Calculations:The amount of interest payable in respect of any Note for any period shall be calculated bymultiplying the product of the Rate of Interest and the outstanding nominal amount of such Note bythe Day Count Fraction, unless an Interest Amount (or a formula for its calculation) is specified inrespect of such period, in which case the amount of interest payable in respect of such Note for suchperiod shall equal such Interest Amount (or be calculated in accordance with such formula). Whereany Interest Period comprises two or more Interest Accrual Periods, the amount of interest payablein respect of such Interest Period shall be the sum of the amounts of interest payable in respect ofeach of those Interest Accrual Periods.

(i) Determination and Publication of Rates of Interest, Interest Amounts, Final Redemption Amounts,Early Redemption Amounts, Optional Redemption Amounts and Instalment Amounts:As soon as practicable after the Relevant Time on such date as the Calculation Agent may berequired to calculate any rate or amount, obtain any quotation or make any determination orcalculation, it shall determine such rate and calculate the Interest Amounts in respect of eachSpecified Denomination of the Notes for the relevant Interest Accrual Period, calculate the FinalRedemption Amount, Early Redemption Amount, Optional Redemption Amount or InstalmentAmount, obtain such quotation or make such determination or calculation, as the case may be, andcause the Rate of Interest and the Interest Amounts for each Interest Period and the relevantInterest Payment Date and, if required to be calculated, the Final Redemption Amount, EarlyRedemption Amount, Optional Redemption Amount or any Instalment Amount to be notified tothe Fiscal Agent, the Issuer, each of the Paying Agents, the Noteholders, any other CalculationAgent appointed in respect of the Notes that is to make a further calculation upon receipt of suchinformation and, if the Notes are listed on a stock exchange and the rules of such exchange sorequire, such exchange as soon as possible after their determination but in no event later than (i) thecommencement of the relevant Interest Period, if determined prior to such time, in the case of

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notification to such exchange of a Rate of Interest and Interest Amount, or (ii) in all other cases, thefourth Business Day after such determination. Where any Interest Payment Date or Interest PeriodDate is subject to adjustment pursuant to Condition 5(b)(ii), the Interest Amounts and the InterestPayment Date so published may subsequently, be amended (or appropriate alternativearrangements made by way of adjustment) without notice in the event of an extension orshortening of the Interest Period. If the Notes become due and payable under Condition 10, theaccrued interest and the Rate of Interest payable in respect of the Notes shall nevertheless continueto be calculated as previously in accordance with this Condition but no publication of the Rate ofInterest or the Interest Amount so calculated need be made. The determination of any rate oramount, the obtaining of each quotation and the making of each determination or calculation by theCalculation Agent(s) shall (in the absence of manifest error) be final and binding upon all parties.

(j) Definitions: In these Conditions, unless the context otherwise requires, the following defined termsshall have the meanings set out below:

"Benchmark" means the benchmark source specified in the Pricing Supplement for the purposes ofcalculating the Relevant Rate in respect of Floating Rate Notes.

"Business Day" means:

(i) in the case of a currency other than euro, a day (other than a Saturday or Sunday) on whichcommercial banks and foreign exchange markets settle payments in the principal financialcentre for such currency; and/or

(ii) in the case of euro, a day on which the TARGET system is operating (a "TARGET BusinessDay"); and/or

(iii) in the case of a currency and/or one or more Additional Business Centres, a day (other than aSaturday or a Sunday) on which commercial banks and foreign exchange markets settlepayments in such currency in the Additional Business Centre(s) or, if no currency is indicated,generally in each of the Additional Business Centres.

"Day Count Fraction" means, in respect of the calculation of an amount of interest on any Note forany period of time (from and including the first day of such period to but excluding the last)(whether or not constituting an Interest Period, the "Calculation Period"):

(i) if "Actual/365" or "Actual/Actual - ISDA" is specified hereon, the actual number of days inthe Calculation Period divided by 365 (or, if any portion of that Calculation Period falls in aleap year, the sum of (A) the actual number of days in that portion of the Calculation Periodfalling in a leap year divided by 366 and (B) the actual number of days in that portion of theCalculation Period falling in a non-leap year divided by 365);

(ii) if "Actual/365 (Fixed)" is specified hereon, the actual number of days in the CalculationPeriod divided by 365;

(iii) if "Actual/360" is specified hereon, the actual number of days in the Calculation Perioddivided by 360;

(iv) if "30/360", "360/360" or "Bond Basis" is specified hereon, the number of days in theCalculation Period divided by 360 (the number of days to be calculated on the basis of a yearof 360 days with 12 30-day months (unless (a) the last day of the Calculation Period is the31st day of a month but the first day of the Calculation Period is a day other than the 30th or31st day of a month, in which case the month that includes that last day shall not be consideredto be shortened to a 30-day month, or (b) the last day of the Calculation Period is the last dayof the month of February, in which case the month of February shall not be considered to belengthened to a 30-day month));

(v) if "30E/360" or "Eurobond Basis" is specified hereon, the number of days in the CalculationPeriod divided by 360 (the number of days to be calculated on the basis of a year of 360 dayswith 12 30-day months, without regard to the date of the first day or last day of the CalculationPeriod unless, in the case of a Calculation Period ending on the Maturity Date, the MaturityDate is the last day of the month of February, in which case the month of February shall not beconsidered to be lengthened to a 30-day month);

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(vi) I) if "Actual/Actual-ISMÀ" is specified hereon,

(a) in case of Notes where the number of days in the relevant period from andincluding the most recent Interest Payment Date (or, if none, the InterestCommencement Date) to (but excluding) the relevant payment date (the "AccrualPeriod") is equal to or shorter than the Determination Period during which theAccrual Period ends, the number of days in such Accrual Period divided by theproduct of (1) the number of days in such Determination Period and (2) thenumber of Determination Dates (as specified in the applicable PricingSupplement) that would occur in one calendar year; or

(b) in the case of Notes where the Accrual Period is longer than the DeterminationPeriod during which the Accrual Period ends, the sum of:

1. the number of days in such Accrual Period falling in the DeterminationPeriod in which the Accrual Period begins divided by the product of (x) thenumber of days in such Determination Period and (y) the number ofDetermination Dates (as specified in the applicable Pricing Supplement) thatwould occur in one calendar year; and

2. the number of days in such Accrual Period falling in the next DeterminationPeriod divided by the product of (x) the number of days in suchDetermination Period and (y) the number of Determination Dates thatwould occur in one calendar year; and

II) if "30/360" is specified in the applicable Pricing Supplement, the number of days in theperiod from and including the most recent Payment Date (or, if none, the InterestCommencement Date) to but excluding the relevant payment date (such number of daysbeing calculated on the basis of 12 30-day months) divided by 360.

"Determination Period" means each period from (and including) a Determination Date to butexcluding the next Determination Date (including, where either the Interest Commencement Dateor the final Interest Payment Date is not a Determination Date prior to, and ending on the firstDetermination Date falling after, such date).

"Effective Date" means, with respect to any Floating Rate to be determined on an InterestDetermination Date, the date specified as such hereon or, if none is so specified, the first day of theInterest Accrual Period to which such Interest Determination Date relates.

"Euro-zone" means the region comprised of member states of the European Union that adopt thesingle currency in accordance with the Treaty establishing the European Community as amended bythe Treaty on European Union and by the Treaty of Amsterdam.

"Interest Accrual Period" means the period beginning on (and including) the InterestCommencement Date and ending on (but excluding) the first Interest Period Date and eachsuccessive period beginning on (and including) an Interest Period Date and ending on (butexcluding) the next succeeding Interest Period Date.

"Interest Amount" means the amount of interest payable, and in the case of Fixed Rate Notesmeans the Fixed Coupon Amount or Broken Amount.

"Interest Commencement Date" means the Issue Date or such other date as may be specifiedhereon.

"Interest Determination Date" means, with respect to Rate of Interest and Interest Accrual Period,the date specified as such hereon or, if none is so specified, (i) the first day of such Interest AccrualPeriod if the Specified Currency is Sterling or (ii) the day falling two Business Days in London forthe Specified Currency prior to the first day of such Interest Accrual Period if the SpecifiedCurrency is neither Sterling nor euro or (iii) the day falling two TARGET Business Days prior tothe first day of such Interest Accrual Period if the Specified Currency is euro.

"Interest Period" means the period beginning on (and including) the Interest Commencement Dateand ending on (but excluding) the first Interest Payment Date and each successive period beginningon (and including) an Interest Payment Date and ending on (but excluding) the next succeedingInterest Payment Date.

"Interest Period Date" means each Interest Payment Date unless otherwise specified hereon.

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"ISDA Definitions" means the 2000 ISDA Definitions (as amended and updated as at the IssueDate of the first Tranche of the Notes) published by the International Swaps and DerivativesAssociation, Inc., unless otherwise specified hereon.

"Page" means such page, section, caption, column or other part of a particular information service(including, but not limited to, the Reuter Markets 3000 ("Reuters") and Bridge Telerate("Telerate")) as may be specified for the purpose of providing a Relevant Rate, or such other page,section, caption, column or other part as may replace it on that information service or on such otherinformation service, in each case as may be nominated by the person or organisation providing orsponsoring the information appearing there for the purpose of displaying rates or prices comparableto that Relevant Rate.

"Rate of Interest" means the rate of interest payable from time to time in respect of this Note andthat is either specified or calculated in accordance with the provisions hereon.

"Reference Banks" means the institutions specified as such hereon or, if none, four major banksselected by the Calculation Agent in the interbank market (or, if appropriate, money, swap or over-the-counter index options market) that is most closely connected with the Benchmark (which ifEURIBOR is the relevant Benchmark, shall be the Euro-zone).

"Relevant Financial Centre" means, with respect to any Floating Rate to be determined inaccordance with a Screen Rate Determination on an Interest Determination Date, the financialcentre as may be specified as such hereon or, if none is so specified, the financial centre with whichthe relevant Benchmark is most closely connected (which, in the case of EURIBOR shall be theEuro-zone) or, if none is so connected, London.

"Relevant Rate" means the Benchmark for a Representative Amount of the Specified Currency fora period (if applicable or appropriate to the Benchmark) equal to the Specified Durationcommencing on the Effective Date.

"Relevant Time" means, with respect to any Interest Determination Date, the local time in theRelevant Financial Centre specified hereon or, if no time is specified, the local time in the RelevantFinancial Centre at which it is customary to determine bid and offered rates in respect of deposits inthe Specified Currency in the interbank market in the Relevant Financial Centre and for thispurpose "local time" means, with respect to Europe and the Euro-zone as a Relevant FinancialCentre, Central European Time.

"Representative Amount" means, with respect to any Floating Rate to be determined inaccordance with a Screen Rate Determination on an Interest Determination Date, the amountspecified as such hereon or, if none is specified, an amount that is representative for a singletransaction in the relevant market at the time.

"Specified Currency" means the currency specified as such hereon or, if none is specified, thecurrency in which the Notes are denominated.

"Specified Duration" means, with respect to any Floating Rate to be determined in accordance witha Screen Rate Determination on an Interest Determination Date, the duration specified hereon or,if none is specified, a period of time equal to the relative Interest Accrual Period, ignoring anyadjustment pursuant to Condition 5(b)(ii).

"TARGET System" means the Trans-European Real-Time Gross-Settlement Express Transfer(TARGET) System or any successor thereto.

(k) Calculation Agent and Reference Banks:The Issuer shall procure that there shall at all times be four Reference Banks (or such other numberas may be required) with offices in the Relevant Financial Centre and one or more CalculationAgents if provision is made for them hereon and for so long as any Note is outstanding. If anyReference Bank (acting through its relevant office) is unable or unwilling to continue to act as aReference Bank, then the Issuer shall appoint another Reference Bank with an office in theRelevant Financial Centre to act as such in its place. Where more than one Calculation Agent isappointed in respect of the Notes, references in these Conditions to the Calculation Agent shall beconstrued as each Calculation Agent performing its respective duties under the Conditions. If theCalculation Agent is unable or unwilling to act as such or if the Calculation Agent fails duly toestablish the Rate of Interest for an Interest Period or Interest Accrual Period or to calculate any

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Interest Amount, Instalment Amount, Final Redemption Amount, Early Redemption Amount orOptional Redemption Amount, as the case may be or to comply with any other requirement, theIssuer shall appoint a leading bank or investment banking firm engaged in the interbank market (or,if appropriate, money, swap or over-the-counter index options market) that is most closelyconnected with the calculation or determination to be made by the Calculation Agent (actingthrough its principal London office or any other office actively involved in such market) to act assuch in its place. The Calculation Agent may not resign its duties without a successor having beenappointed as aforesaid.

5. Redemption, Purchase and Options(a) Redemption by Instalments and Final Redemption:

(i) Unless previously redeemed, purchased and cancelled as provided in this Condition 6 or therelevant Instalment Date (being one of the dates so specified hereon) is extended pursuant toany Issuer's or Noteholder's option in accordance with Condition 6(d) or 6(e), each Note thatprovides for Instalment Dates and Instalment Amounts shall be partially redeemed on eachInstalment Date at the related Instalment Amount specified hereon. The outstanding nominalamount of each such Note shall be reduced by the Instalment Amount (or, if such InstalmentAmount is calculated by reference to a proportion of the nominal amount of such Note, suchproportion) for all purposes with effect from the related Instalment Date, unless payment ofthe Instalment Amount is improperly withheld or refused on presentation of the relatedReceipt, in which case, such amount shall remain outstanding until the Relevant Date relatingto such Instalment Amount.

(ii) Unless previously redeemed, purchased and cancelled as provided below or its maturity isextended pursuant to any Issuer's or Noteholder's option in accordance with Condition 6(d) or6(e), each Note shall be finally redeemed on the Maturity Date specified hereon at its FinalRedemption Amount (which, unless otherwise provided, is its nominal amount) or, in the caseof a Note falling within sub-paragraph (i) above, its final Instalment Amount.

(b) Early Redemption:

(i) Zero Coupon Notes:

(A) The Early Redemption Amount payable in respect of any Zero-Coupon Note, the EarlyRedemption Amount of which is not linked to an index and/or a formula, uponredemption of such Note pursuant to Condition 6(c) or upon it becoming due andpayable as provided in Condition 10, shall be the Amortised Face Amount (calculated asprovided below) of such Note unless otherwise specified hereon.

(B) Subject to the provisions of sub-paragraph (C) below, the Amortised Face Amount ofany such Note shall be the scheduled Final Redemption Amount of such Note on theMaturity Date discounted at a rate per annum (expressed as a percentage) equal to theAmortisation Yield (which, if none is shown hereon, shall be such rate as would producean Amortised Face Amount equal to the issue price of the Notes if they were discountedback to their issue price on the Issue Date) compounded annually.

(C) If the Early Redemption Amount payable in respect of any such Note upon itsredemption pursuant to Condition 6(c) or upon it becoming due and payable as providedin Condition 10 is not paid when due, the Early Redemption Amount due and payable inrespect of such Note shall be the Amortised Face Amount of such Note as defined insub-paragraph (B) above, except that such sub-paragraph shall have effect as though thereference therein to the date on which the Note becomes due and payable were replacedby a reference to the Relevant Date. The calculation of the Amortised Face Amount inaccordance with this sub-paragraph shall continue to be made (as well after as beforejudgment) until the Relevant Date, unless the Relevant Date falls on or after theMaturity Date, in which case the amount due and payable shall be the scheduled FinalRedemption Amount of such Note on the Maturity Date together with any interest thatmay accrue in accordance with Condition 5(c).

Where such calculation is to be made for a period of less than one year, it shall be made on thebasis of the Day Count Fraction shown hereon.

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(ii) Other Notes:

The Early Redemption Amount payable in respect of any Note (other than Notes described in(i) above), upon redemption of such Note pursuant to Condition 6(c) or upon it becoming dueand payable as provided in Condition 10, shall be the Final Redemption Amount unlessotherwise specified hereon.

(c) Redemption for Taxation Reasons:(i) If by reason of any change in, or amendment to, the laws and regulations of the Republic of

France or any political subdivision or any authority therein or thereof having power to tax, orany change in the official application or interpretation thereof, becoming effective after theIssue Date, the Issuer would become obliged to pay additional amounts as provided orreferred to in Condition 8, the Issuer may (having given not more than 60 nor less than 30days' notice to the Noteholders, which notice shall be irrevocable) redeem at their EarlyRedemption Amount (as described in Condition 6(b) above) together with interest accrued (ifany) to the date fixed for redemption all (but not some only) of the Notes on any InterestPayment Date, or, if so specified hereon, at any time, at their Early Redemption Amount(together with interest accrued to the date fixed for redemption), provided that the due datefor redemption of which notice hereunder shall be given shall be the latest practicable date atwhich the Issuer could make payment of principal and interest without withholding for Frenchtaxes.

(ii) If, on the occasion of the next payment due in respect of the Notes, the Issuer would beprevented by French law from making payment to the Noteholders and the Couponholders ofthe full amount then due and payable, notwithstanding the undertaking to pay additionalamounts as provided in Condition 8(b), then the Issuer shall forthwith give notice of such factto the Fiscal Agent and shall redeem all, but not some only, of the Notes then outstanding attheir Early Redemption Amount, together with interest accrued (if any) to the date of suchredemption on (A) the latest practicable Interest Payment Date on which the Issuer couldmake payment of the full amount then due and payable in respect of the Notes, provided thatif such notice would expire after such Interest Payment Date the date for redemption pursuantto such notice of Noteholders shall be the later of (i) the latest practicable date on which theIssuer could make payment of the full amount then due and payable in respect of the Notesand (ii) 14 days after giving notice to the Fiscal Agent as aforesaid or (B) if so specified on thisNote, at any time, provided that the due date for redemption of which notice hereunder shallbe given shall be the latest practicable date on which the Issuer could make payment of the fullamount payable in respect of the Notes, Receipts or Coupons or, if that date is passed, as soonas practicable thereafter.

(d) Redemption at the Option of the Issuer and Exercise of. Issuer's Options:If Call Option is specified hereon, the Issuer may, on giving not less than 15 nor more than 30 days'irrevocable notice to the Noteholders (or such other notice period as may be specified hereon)redeem, or exercise any Issuer's option (as may be described hereon) in relation to, all or, if soprovided, some of the Notes on any Optional Redemption Date or Option Exercise Date, as thecase may be. Any such redemption of Notes shall be at their Optional Redemption Amounttogether with interest accrued to the date fixed for redemption. Any such redemption or exercisemust relate to Notes of a nominal amount at least equal to the minimum nominal amount to beredeemed specified hereon and no greater than the maximum nominal amount to be redeemedspecified hereon.

All Notes in respect of which any such notice is given shall be redeemed, or the Issuer's option shallbe exercised, on the date specified in such notice in accordance with this Condition.

In the case of a partial redemption or a partial exercise of an Issuer's option, the notice toNoteholders shall also contain the certificate numbers of the Notes to be redeemed or in respect ofwhich such option has been exercised, which shall have been drawn in such place and in suchmanner as may be fair and reasonable in the circumstances, taking account of prevailing marketpractices, subject to compliance with any applicable laws and stock exchange requirements. So longas the Notes are listed on the Luxembourg Stock Exchange and the rules of that Stock Exchange sorequire, the Issuer shall, once in each year in which there has been a partial redemption of theNotes, cause to be published in a leading newspaper of general circulation in Luxembourg a noticespecifying the aggregate nominal amount of Notes outstanding and a list of the Notes drawn forredemption but not surrendered.

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) Redemption at the Option of Noteholders and Exercise of Noteholders' Options:

If Put Option is specified hereon, the Issuer shall, at the option of the holder of any such Note, uponthe holder of such Note giving not less than 15 nor more than 30 days' notice to the Issuer (or suchother notice period as may be specified hereon) redeem such Note on the Optional RedemptionDate(s) at its Optional Redemption Amount together with interest accrued to the date fixed forredemption.

To exercise such option or any other Noteholders' option that may be set out hereon (which mustbe exercised on an Option Exercise Date) the holder must deposit (in the case of Bearer Notes)such Note (together with all unmatured Receipts and Coupons and unexchanged Talons) with anyPaying Agent or (in the case of Registered Notes) the Certificate representing such Note(s) with theRegistrar or any Transfer Agent at its specified office, together with a duly completed optionexercise notice ("Exercise Notice") in the form obtainable from any Paying Agent, the Registrar orany Transfer Agent (as applicable) within the notice period. No Note or Certificate so depositedand option exercised may be withdrawn (except as provided in the Agency Agreement) without theprior consent of the Issuer.

) Partly Paid Notes:

Partly Paid Notes will be redeemed whether at maturity, early redemption or otherwise, inaccordance with the provisions of this Condition and the provisions specified hereon.

;) Purchases:The Issuer may at any time acquire Notes (provided that all unmatured Receipts and Coupons andunexchanged Talons relating thereto are attached thereto or surrendered therewith) in the openmarket or by tender or by private treaty or otherwise at any price.

i) Cancellation:

All Notes purchased by or on behalf of the Issuer will be surrendered for cancellation, in the case ofBearer Notes, by surrendering each such Note together with all unmatured Receipts and Couponsand all unexchanged Talons to the Fiscal Agent and, in the case of Registered Notes, bysurrendering the Certificate representing such Notes to the Registrar and, in each case, if sosurrendered, shall, together with all Notes redeemed by the Issuer, be cancelled forthwith (togetherwith all unmatured Receipts and Coupons and unexchanged Talons attached thereto or surrenderedtherewith). Any Notes so surrendered for cancellation may not be reissued or resold and theobligations of the Issuer in respect of any such Notes shall be discharged.

Payments and Talonsa) Bearer Notes:

Payments of principal and interest in respect of Bearer Notes shall, subject as mentioned below, bemade against presentation and surrender of the relevant Receipts (in the case of payments ofInstalment Amounts other than on the due date for redemption and provided that the Receipt ispresented for payment together with its relative Note), Notes (in the case of all other payments ofprincipal and, in the case of interest, as specified in Condition 7(f)(vi)) or Coupons (in the case ofinterest, save as specified in Condition 7(f)(vi)), as the case may be, at the specified office of anyPaying Agent outside the United States by a cheque payable in the relevant currency drawn on, or,at the option of the holder, by transfer to an account denominated in such currency with, a bank inthe principal financial centre for such currency, or, in the case of euro, in a city in which banks haveaccess to the TARGET System.

b) Registered Notes:

(i) Payments of principal (which for the purposes of this Condition 7(b) shall include finalInstalment Amounts but not other Instalment Amounts) in respect of Registered Notes shallbe made against presentation and surrender of the relevant Certificates at the specified officeof any of the Transfer Agents or of the Registrar and in the manner provided in paragraph (ii)below.

(ii) Interest (which for the purpose of this Condition 7(b) shall include all Instalment Amountsother than final Instalment Amounts) on Registered Notes shall be paid to the person shownon the Register at the close of business on the fifteenth day before the due date for payment

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thereof (the "Record Date"). Payments of interest on each Registered Note shall be made inthe relevant currency by cheque drawn on a bank in the principal financial centre of thecountry of the currency concerned, subject as provided in paragraph (a) above, and mailed tothe holder (or to the first named of joint holders) of such Note at its address appearing in theRegister. Upon application by the holder to the specified office of the registrar or anyTransfer Agent before the Record Date, and, subject as provided in paragraph (a) above, suchpayment of interest may be made by transfer to an account in the relevant currencymaintained by the payee with a bank in the principal financial centre of the country of thatcurrency.

(c) Payments in the United States:

Notwithstanding the foregoing, if any Bearer Notes are denominated in U.S. dollars, payments inrespect thereof may be made at the specified office of any Paying Agent in New York City in thesame manner as aforesaid if (i) the Issuer shall have appointed Paying Agents with specified officesoutside the United States with the reasonable expectation that such Paying Agents would be able tomake payment of the amounts on the Notes in the manner provided above when due, (ii) paymentin full of such amounts at all such offices is illegal or effectively precluded by exchange controls orother similar restrictions on payment or receipt of such amounts and (iii) such payment is thenpermitted by United States law, without involving, in the opinion of the Issuer, any adverse taxconsequence to the Issuer.

(d) Payments Subject to Fiscal Laws:

All payments are subject in all cases to any applicable fiscal or other laws, regulations anddirectives, but without prejudice to the provisions of Condition 8. No commission or expenses shallbe charged to the Noteholders or Couponholders in respect of such payments.

(e) Appointment of Agents:

The Fiscal Agent, the Paying Agents, the Registrar, the Transfer Agents and the Calculation Agentinitially appointed by the Issuer and their respective specified offices are listed below. The FiscalAgent, the Paying Agents, the Registrar, Transfer Agents and the Calculation Agent(s), act solelyas agents of the Issuer and do not assume any obligation or relationship of agency or trust for orwith any Noteholder or Couponholder. The Issuer reserves the right at any time to vary orterminate the appointment of the Fiscal Agent, any other Paying Agent, the Registrar, any TransferAgent or the Calculation Agent(s) and/or approve any change in the specified office through whichany Paying Agent acts and to appoint additional or other Paying Agents or Transfer Agents,provided that the Issuer shall at all times maintain (i) a Fiscal Agent, (ii) a Registrar in relation toRegistered Notes, (iii) a Transfer Agent in relation to Registered Notes, (iv) one or moreCalculation Agent(s) where the Conditions so require, (v) a Redenomination Agent and aConsolidation Agent where the Conditions so require (and further provided that on aredenomination of the Notes pursuant to Condition l(b) and a consolidation of the Notes with afurther issue of Notes pursuant to Condition 12, the Issuer shall procure that the same entity shall beappointed as the Redenomination Agent and the Consolidation Agent in respect of both the Notesand such other issues of notes), (vi) at least one Paying Agent having a specified office in acontinental European city and provided further that, (A) so long as the Notes are listed on theLuxembourg Stock Exchange, the Issuer will maintain a Paying Agent and Transfer Agent inLuxembourg and (B) if and so long as the Notes are listed on Euronext Paris, the Issuer willmaintain a Paying Agent and Transfer Agent in Paris, (vii) the Issuer will maintain such otheragents as may be required by any other stock exchange on which the. Notes may be listed (or anyother relevant authority) and (viii) if any European Union Directive on the taxation of savingsimplementing the conclusions of the ECOFIN Council meeting of 26th-27th November, 2000 or anylaw implementing or complying with or introduced in order to conform to such Directive isintroduced, the Issuer will ensure that it maintains a Paying Agent in an EU Member State that willnot be obliged to withhold or deduct tax pursuant to any such Directive or law.

In addition, the Issuer shall forthwith appoint a Paying Agent in New York City in respect of anyBearer Notes denominated in U.S. dollars in the circumstances described in paragraph (c) above.

Notice of any such change or any change of any specified office shall promptly be given to theNoteholders.

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f) Unmatured Coupons and Receipts and unexchanged Talons:

(i) Unless the Notes provide that the relative Coupons are to become void upon the due date forredemption of those Notes, Bearer Notes should be surrendered for payment together with allunmatured Coupons (if any) appertaining thereto, failing which an amount equal to the facevalue of each missing unmatured Coupon (or, in the case of payment not being made in full,that proportion of the amount of such missing unmatured Coupon that the sum of principal sopaid bears to the total principal due) shall be deducted from the Final Redemption Amount,Early Redemption Amount or Optional Redemption Amount, as the case may be, due forpayment. Any amount so deducted shall be paid in the manner mentioned above againstsurrender of such missing Coupon within a period of 10 years from the Relevant Date for thepayment of such principal (whether or not such Coupon has become void pursuant toCondition 9).

(ii) If the Notes so provide, upon the due date for redemption of any Bearer Note, unmaturedCoupons relating to such Note (whether or not attached) shall become void and no paymentshall be made in respect of them.

(iii) Upon the due date for redemption of any Bearer Note, any unexchanged Talon relating tosuch Note (whether or not attached) shall become void and no Coupon shall be delivered inrespect of such Talon.

(iv) Upon the due date for redemption of any Bearer Note that is redeemable in instalments, allReceipts relating to such Note having an Instalment Date falling on or after such due date(whether or not attached) shall become void and no payment shall be made in respect of them.

(v) Where any Bearer Note that provides that the relative unmatured Coupons are to becomevoid upon the due date for redemption of those Notes is presented for redemption without allunmatured Coupons, and where any Bearer Note is presented for redemption without anyunexchanged Talon relating to it, redemption shall be made only against the provision of suchindemnity as the Issuer may require.

(vi) If the due date for redemption of any Note is not a due date for payment of interest, interestaccrued from the preceding due date for payment of interest or the Interest CommencementDate, as the case may be, shall only be payable against presentation (and surrender ifappropriate) of the relevant Bearer Note or Certificate representing it, as the case may be.Interest accrued on a Note that only bears interest after its Maturity Date shall be payable onredemption of such Note against presentation of the relevant Note or Certificate representingit, as the case may be.

(g) Talons:On or after the Interest Payment Date for the final Coupon forming part of a Coupon sheet issuedin respect of any Bearer Note, the Talon forming part of such Coupon sheet may be surrendered atthe specified office of the Fiscal Agent in exchange for a further Coupon sheet (and if necessaryanother Talon for a further Coupon sheet) (but excluding any Coupons that may have become voidpursuant to Condition 9).

(h) Non-Business Days:

If any date for payment in respect of any Note, Receipt or Coupon is not a business day, the holdershall not be entitled to payment until the next following business day nor to any interest or othersum in respect of such postponed payment. In this paragraph, "business day" means a day (otherthan a Saturday or a Sunday) on which banks and foreign exchange markets are open for business inthe relevant place of presentation, in such jurisdictions as shall be specified as "Additional FinancialCentres" hereon and:

(i) in the case of a payment in a currency other than euro, where payment is to be made bytransfer to an account maintained with a bank in the relevant currency, on which foreignexchange transactions may be carried on in the relevant currency in the principal financialcentre of the country of such currency; or

(ii) in the case of a payment in euro, which is a TARGET Business Day.

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8. Taxation

(a) Tax Regime:

The Notes being issued outside the Republic of France, interest and other revenues with respect tothe Notes benefit from the exemption provided for in article 131 quater of the Code General desImpôts (general tax code) from deduction of tax at source. Accordingly, such payments do not givethe right to any tax credit from any French source.

(b) Additional Amounts:If French law should require that payments of principal or interest in respect of any Note be subjectto withholding or deduction with respect to any taxes or duties whatsoever, the Issuer will, to thefullest extent then permitted by French law, pay such additional amounts as may be necessary inorder that the net amounts received by the holders of Notes, Receipts and Coupons after suchwithholding or deduction shall equal the respective amounts of principal and interest which wouldhave been receivable in respect of the Notes, Receipts or Coupons, in the absence of suchwithholding or deduction; except that no such additional amounts shall be payable with respect toany Note, Receipt or Coupon:

(i) presented for payment in France; or

(ii) presented for payment by or on behalf of a holder who is liable to such taxes or duties inrespect of such Note or Coupon by reason of his having some connection with the Republic ofFrance other than the mere holding of the Note, Receipt or Coupon; or

(iii) where such withholding or deduction is imposed on a payment to an individual and is requiredto be made pursuant to any European Union Directive on the taxation of savingsimplementing the conclusions of the ECOFIN Council meeting of 26th-27th November,2000 or any law implementing or complying with, or introduced in order to conform to, suchDirective; or

(iv) presented for payment by or on behalf of a holder who would be able to avoid suchwithholding or deduction by presenting the relevant Note, Receipt or Coupon to anotherPaying Agent in a Member State of the European Union; or

(v) presented for payment more than 30 days after the Relevant Date, except to the extent thatthe holder thereof would have been entitled to such additional amounts on presenting thesame for payment on the last day of such period of 30 days.

As used in these Conditions, "Relevant Date" in respect of any Note, Receipt or Coupon means thedate on which payment in respect of it first becomes due or (if any amount of the money payable isimproperly withheld or refused) the date on which payment in full of the amount outstanding is made or(if earlier,) the date seven days after that on which notice is duly given to the Noteholders that, uponfurther presentation of the Note (or relative Certificate), Receipt or Coupon being made in accordancewith the Conditions, such payment will be made, provided that payment is in fact made upon suchpresentation. References in these Conditions to (i) "principal" shall be deemed to include any premiumpayable in respect of the Notes, all Instalment Amounts, Final Redemption Amounts, Early RedemptionAmounts, Optional Redemption Amounts, Amortised Face Amounts and all other amounts in the natureof principal payable pursuant to Condition 6 or any amendment or supplement to it, (ii) "interest" shallbe deemed to include all Interest Amounts and all other amounts payable pursuant to Condition 5 or anyamendment or supplement to it and (iii) "principal" and/or "interest" shall be deemed to include anyadditional amounts that may be payable under this Condition.

9. PrescriptionClaims against the Issuer for payment in respect of the Notes, Receipts and Coupons (which for this

purpose shall not include Talons) shall be prescribed and become void unless made within 10 years (in thecase of principal) or five years (in the case of interest) from the appropriate Relevant Date in respect ofthem.

10. Events of DefaultUpon any of the following events ("Events of Default") taking place, the holder of any Note may

give written notice to the Issuer through the Fiscal Agent at its specified office that such Note isimmediately due and payable, whereupon the Early Redemption Amount of such Note together with

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ccrued interest to the date of payment shall become immediately due and payable, unless such Event of)efault shall have been remedied prior to the receipt of such notice by the Fiscal Agent:

(i) default is made for more than 15 days in the payment of any principal and interest due inrespect of the Notes; or

(ii) default by the Issuer in the performance or observance of any other obligation on its partunder the Notes and such default continuing for 30 days after written notice requiring suchdefault to be remedied has been given by the holder of any Note through the Fiscal Agent tothe Issuer; or

(iii) any other indebtedness for money borrowed by the Issuer becoming prematurely repayablefollowing a default, or steps being taken to enforce any security in respect thereof, or theIssuer defaulting in the repayment of any such indebtedness at the maturity thereof asextended by any applicable grace period, or any guarantee of any indebtedness for moneyborrowed given by the Issuer not being honoured when due and called upon; or

(iv) the Issuer being dissolved or merged into a company, unless in such event the obligations ofthe Issuer pursuant to the Notes are assumed by such company either expressly by contract orby virtue of applicable law.

11. Replacement of Bearer Notes, Certificates, Receipts, Coupons and TalonsIf a Bearer Note, Certificate, Receipt, Coupon or Talon is lost, stolen, mutilated, defaced or

lestroyed, it may be replaced, subject to applicable laws, regulations and stock exchange regulations, at.he specified office of the Paying Agent in Luxembourg (in the case of Bearer Notes, Receipts, Coupons>r Talons) and of the Registrar (in the case of Certificates) or such other Paying Agent or Transfer Agent,is the case may be, as may from time to time be designated by the Issuer for the purpose and notice ofvhose designation is given to Noteholders, in each case on payment by the claimant of the fees and costsncurred in connection therewith and on such terms as to evidence, security and indemnity (which mayprovide, inter alia, that if the allegedly lost, stolen or destroyed Bearer Note, Certificate, Receipt, Couponjr Talon is subsequently presented for payment or, as the case may be, for exchange for further Coupons,.here shall be paid to the Issuer on demand the amount payable by the Issuer in respect of such BearerMotes, Certificates, Receipts, Coupons or further Coupons) and otherwise as the Issuer may require.Mutilated or defaced Bearer Notes, Certificates, Receipts, Coupons or Talons must be surrenderedbefore replacements will be issued.

12. Further Issues and ConsolidationThe Issuer may from time to time without the consent of the Noteholders or Couponholders create

and issue further notes ranking pari passa with the Notes and having the same terms and conditions as theNotes in all respects (or in all respects except for the first payment of interest on them) and so that suchfurther issue shall be consolidated and form a single series with such Notes, and references in theseConditions to "Notes" shall be construed accordingly.

The Issuer may also from time to time upon not less than 30 days' prior notice to Noteholders,without the consent of the holders of the Notes or Coupons of any Series, consolidate the Notes withnotes of one or more other Series issued by it provided that, in respect of all periods subsequent to suchconsolidation, the notes of all such other Series are denominated in the same currency as such Notes(irrespective of the currency in which any notes of such other Series were originally issued) andotherwise, have the same terms and conditions as such Notes. Notice of any such consolidation will begiven to the Noteholders in accordance with Condition 14. The Fiscal Agent shall act as the consolidationagent (in such capacity, the "Consolidation Agent").

With effect from their consolidation, the Notes and the notes of such other Series will (if listed priorto such consolidation) be listed on at least one European stock exchange on which either such Notes orthe notes of such other Series were listed immediately prior to consolidation.

The Issuer shall in dealing with the holders of such Notes following a consolidation pursuant to thisCondition 12 have regard to the interests of the holders of such Notes and the holders of the notes of suchother Series, taken together as a class, and shall treat them alike.

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13. Meeting of Noteholders and Modifications(a) Meetings of Noteholders:

The Agency Agreement contains provisions for convening meetings of Noteholders to consider anymatter affecting their interests, including the sanctioning by Extraordinary Resolution (as defined inthe Agency Agreement) of a modification of any of these Conditions. Such a meeting may beconvened by Noteholders holding not less than 10 per cent, in nominal amount of the Notes for thetime being outstanding. The quorum for any meeting convened to consider an ExtraordinaryResolution shall be two or more persons holding or representing a clear majority in nominal amountof the Notes for the time being outstanding, or at any adjourned meeting two or more persons beingor representing Noteholders whatever the nominal amount of the Notes held 01 ; spresented, unlessthe business of such meeting includes consideration of proposals, inter alia, (other than asspecifically provided in these Conditions) (i) to amend the dates of maturity or redemption of theNotes, any Instalment Date or any date for payment of interest or Interest Amounts on the Notes,(ii) to reduce or cancel the nominal amount of, or any Instalment Amount of, or any premiumpayable on redemption of, the Notes, (iii) to reduce the rate or rates of interest in respect of theNotes or to vary the method or basis of calculating the rate or rates or amount of interest or thebasis for calculating any Interest Amount in respect of the Notes, (iv) if a Minimum and/or aMaximum Rate of Interest, Instalment Amount or Redemption Amount is shown hereon, to reduceany such Minimum and/or Maximum, (v) to vary any method of, or basis for, calculating the FinalRedemption Amount, the Early Redemption Amount or the Optional Redemption Amount,including the method of calculating the Amortised Face Amount, (vi) to vary the currency orcurrencies of payment or denomination of the Notes, (vii) to take any steps that are specified hereonmay only be taken following approval by an Extraordinary Resolution to which the special quorumprovisions apply or (viii) to modify the provisions concerning the quorum required at any meetingof Noteholders or the majority required to pass the Extraordinary Resolution, in which case thenecessary quorum shall be two or more persons holding or representing not less than 75 per cent, orat any adjourned meeting not less than 25 per cent, in nominal amount of the Notes for the timebeing outstanding. Any Extraordinary Resolution duly passed shall be binding on Noteholders(whether or not they were present at the meeting at which such resolution was passed) and on allCouponholders.

These Conditions may be amended, modified, or varied in relation to any Series of Notes by the termsof the relevant Pricing Supplement in relation to such Series.

(b) Modification of Agency Agreement:The Issuer shall only permit any modification (including for the purposes of giving effect to theprovisions of Conditions l(b) and 12) of, or any waiver or authorisation of any breach or proposedbreach of or any failure to comply with, the Agency Agreement, if to do so could not reasonably beexpected to be prejudicial to the interests of the Noteholders.

14. NoticesNotices to the holders of Registered Notes will be valid (i) if sent by mail to them at their respective

addresses in the Register and deemed to have been given on the fourth weekday (being a day other than aSaturday or a Sunday) after the date of mailing (ii) in addition, so long as the Notes are listed on theLuxembourg Stock Exchange and the rules of that exchange so require, if published in a daily newspaperwith general circulation in Luxembourg (which is expected to be the Luxemburger Wort) and (iii) (inrespect of any Notes listed on Euronext Paris and so long as the rules of that exchange so require), ifpublished in a daily newspaper with general circulation in Paris (which is expected to be La Tribune).Notices to the holders of Bearer Notes shall be valid if published (i) in a daily newspaper of generalcirculation in London (which is expected to be the Financial Times), (ii) so long as the Notes are listed onthe Luxembourg Stock Exchange and the rules of that exchange so require, in a daily newspaper withgeneral circulation in Luxembourg, (which is expected to be the Luxemburger Wort) and (iii) (in respectof any Notes listed on Euronext Paris and so long as the rules of that exchange so require) in a dailynewspaper of general circulation in Paris (which is expected to be La Tribune). If any such publication isnot practicable, notice shall be validly given if published in another leading daily English languagenewspaper with general circulation in Europe and so long as the Notes are listed on Euronext Paris andthe rules of that exchange so require, in a French language newspaper with general circulation in Europe.Any such notice shall be deemed to have been given on the date of such publication or, if published morethan once or on different dates, on the date of the first publication as provided above. Couponholdersshall be deemed for all purposes to have notice of the contents of any notice given to the holders of

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•earer Notes in accordance with this Condition 14. The Issuer shall also ensure that notices are dulyublished in a manner which complies with the rules and regulations of any other stock exchange (orther relevant authority) on which the Notes are for the time being listed. Any such notice will beeemed to have been given on the date of the first publication or, where required to be published in morelan one newspaper, on the date of the first publication in each such newspaper.

Except in the case of Notes listed on the Luxembourg Stock Exchange or Euronext Paris, until such.me as any definitive Notes are issued, there may (provided that in the case of Notes listed on any stockxchange, the rules of such stock exchange (or other relevant authority) so permit), so long as the globaliote(s) is or are held in its/their entirety on behalf of Euroclear and Clearstream, Luxembourg, beubstituted for such publication in such newspaper(s) the delivery of the relevant notice to Euroclear and^learstream, Luxembourg for communication by them to the Noteholders. Any such notice shall beleemed to have been given to the holders of the Notes on the seventh day after the day on which the saidlotice was given to Euroclear and Clearstream, Luxembourg.

Notices to be given by any holder of the Notes shall be in writing and given by lodging the same,ogether with the relative Note or Notes, with the Agent. Whilst any of the Notes are represented by a;lobal Note, such notice may be given by any holder of a Note to the Agent via Euroclear and/or31earstream, Luxembourg, as the case may be, in such manner as the Agent and Euroclear and/orUlearstream, Luxembourg, as the case may be, may approve for this purpose.

15. Contracts (Rights of Third Parties) Act 1999No person shall have any right to enforce any term or condition of the Notes under the Contracts

Rights of Third Parties) Act 1999 except and to the extent (if any) that the Notes expressly provide for;uch Act to apply to any of their terms.

16. Governing Law and Jurisdiction^a) Governing Law:

The Notes, the Receipts, the Coupons, the Talons and the Agency Agreement are governed by, andshall be construed in accordance with, English law.

(b) Jurisdiction:

The courts of England are to have jurisdiction to settle any disputes that may arise out of or inconnection with any Notes, Receipts, Coupons or Talons and accordingly any legal action orproceedings arising out of or in connection with any Notes, Receipts, Coupons or Talons("Proceedings") may be brought in such courts. The Issuer irrevocably submits to the jurisdiction ofsuch courts and waives any objection to Proceedings in such courts on the ground of venue or on theground that the Proceedings have been brought in an inconvenient forum. This submission is madefor the benefit of each of the holders of the Notes, Receipts, Coupons and Talons and shall notaffect the right of any of them to take Proceedings in any other court of competent jurisdiction norshall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings inany other jurisdiction (whether concurrently or not).

(c) Service of Process:

The Issuer irrevocably appoints Rail Europe Limited of 179 Piccadilly, London W1V OBA as itsauthorised agent in England to receive, for it and on its behalf, service of process in any Proceedingsin England. Such service shall be deemed completed on delivery to such process agent (whether ornot it is forwarded to and received by the Issuer). If for any reason such process agent ceases to beable to act as such or no longer has an address in London, the Issuer irrevocably agrees to appoint asubstitute process agent and shall immediately notify Noteholders of such appointment inaccordance with Condition 14. Nothing shall affect the right to serve process in any mannerpermitted by law.

(d) Immunity from Attachment:

The assets and properties of the Issuer cannot be subject to any attachment or other enforcementproceedings in the Republic of France.

USE OF PROCEEDSThe net proceeds of each issue of Notes will be applied by the Issuer in refinancing existing debt and

financing its operations.

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FORM OF NOTES AND TRANSFER RESTRICTIONS

Initial Issue of Notes

Each Tranche of Bearer Notes having an original maturity of more than 365 days will initially berepresented by a Temporary Global Note and each Tranche of Bearer Notes having an original maturityof 365 days or less will initially be represented by a Permanent Global Note. Upon the initial deposit of aGlobal Note with a common depositary for Euroclear and Clearstream, Luxembourg (the "CommonDepositary") or registration of Registered Notes in the name of any nominee for Euroclear andClearstream, Luxembourg and/or DTC and delivery of the relative Global Certificate to the CommonDepositary and/or a custodian for DTC (the "Custodian"), Euroclear, Clearstream, Luxembourg or DTC(as the case may be) will credit each subscriber with a nominal amount of Notes equal to the nominalamount thereof for which it has subscribed and paid.

Upon the initial deposit of a Global Note with, or registration of Registered Notes in the name of,or any nominee for, and delivery of the relative Global Certificate to, Euroclear Fra; \< e (including whereEuroclear France is acting as central depositary), the intermédiaires financiers habilités (French banks orbrokers authorised to maintain securities accounts on behalf of their clients (each an "ApprovedIntermediary")) who are entitled to such Notes according to the records of Euroclear France will crediteach subscriber with a principal amount of Notes equal to the nominal amount thereof for which it hassubscribed and paid.

Notes that are initially deposited with the Common Depositary or the Custodian may also becredited to the accounts of subscribers with Approved Intermediaries or (if indicated in the relevantPricing Supplement) other clearing systems through direct or indirect accounts with Euroclear,Clearstream, Luxembourg and DTC held by Euroclear France or other clearing systems. Conversely,Notes that are initially deposited with Euroclear France or any other clearing system may similarly becredited to the accounts of subscribers with Euroclear, Clearstream, Luxembourg, DTC or other clearingsystems.

Relationship of Accountholders with Clearing Systems

Each of the persons shown in the records of Euroclear, Clearstream, Luxembourg, an ApprovedIntermediary, DTC or any other clearing system (an "Alternative Clearing System") as the holder of aNote represented by a Global Note or a Global Certificate must look solely to Euroclear, Clearstream,Luxembourg, DTC, such Approved Intermediary or such Alternative Clearing System (as the case maybe) for his share of each payment made by the Issuer to the bearer of such Global Note or the holder ofthe underlying Registered Notes, as the case may be, and in relation to all other rights arising under theGlobal Notes or Global Certificates, subject to and in accordance with the respective rules andprocedures of Euroclear, Clearstream, Luxembourg, DTC, Euroclear France or such AlternativeClearing System (as the case may be). Such persons shall have no claim directly against the Issuer inrespect of payments due on the Notes for so long as the Notes are represented by such Global Note orGlobal Certificate and such obligations of the Issuer will be discharged by payment to the bearer of suchGlobal Note or the holder of the underlying Registered Notes, as the case may be, in respect of eachamount so paid.

Exchange of Interests in Global Notes

1 Temporary Global Notes

Each Temporary Global Note will be exchangeable, free of charge to the holder, on or after itsExchange Date (as defined below):

(i) if the relevant Pricing Supplement indicates that such Global Note is issued in compliancewith the C Rules or in a transaction to which TEFRA is not applicable (as to which, see"Summary of the Programme-Selling Restrictions"), in whole, but not in part, for theDefinitive Notes defined and described below; and

(ii) otherwise, in whole or in part upon certification as to non-U.S. beneficial ownership in theform set out in the Agency Agreement for interests in a Permanent Global Note or, if soprovided in the relevant Pricing Supplement, for Definitive Notes.

Each Temporary Global Note that is also an Exchangeable Bearer Note will be exchangeable forRegistered Notes in accordance with the Conditions in addition to any Permanent Global Note or

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»efinitive Notes for which it may be exchangeable and, before its Exchange Date, will also be^changeable in whole or in part for Registered Notes only.

Permanent Global NotesEach Permanent Global Note will be exchangeable, free of charge to the holder, on or after its

.xchange Date in whole but not, except as provided under "Partial Exchange of Permanent Globalfotes", in part for Definitive Notes or, in the case of (iii) below, Registered Notes:

(i) unless principal in respect of any Notes is not paid when due, by the Issuer giving notice to theNoteholders and the Fiscal Agent of its intention to effect such exchange;

(ii) if the relevant Pricing Supplement provides that such Global Note is exchangeable at therequest of the holder, by the holder giving notice to the Fiscal Agent of its election for suchexchange;

(iii) if the Permanent Global Note is an Exchangeable Bearer Note, by the holder giving notice tothe Fiscal Agent of its election to exchange the whole or a part of such Global Note forRegistered Notes; and

(iv) otherwise, (1) if the Permanent Global Note is held on behalf of Euroclear, Clearstream,Luxembourg, Euroclear France or an Alternative Clearing System, and any such clearingsystem is closed for business for a continuous period of 14 days (other than by reason ofholidays, statutory or otherwise) or announces an intention permanently to cease business orin fact does so or (2) if principal in respect of any Notes is not paid when due, by the holdergiving notice to the Fiscal Agent of its election for such exchange.

Partial Exchange of Permanent Global NotesFor so long as a Permanent Global Note is held on behalf of a clearing system and that clearing

ystem so permits, such Permanent Global Note will be exchangeable in part on one or more occasions1) for Registered Notes if the Permanent Global Note is an Exchangeable Bearer Note and the partubmitted for exchange is to be exchanged for Registered Notes, or (2) for Definitive Notes (i) if principaln respect of any Notes is not paid when due or (ii) if so provided in, and in accordance with, theConditions (which will be set out in the relevant Pricing Supplement) relating to Partly-paid Notes.

I Delivery of NotesOn or after any due date for exchange the holder of a Global Note may surrender such Global Note

IT, in the case of a partial exchange, present it for endorsement to or to the order of the Fiscal Agent. In;xchange for any Global Note, or the part thereof to be exchanged, the Issuer will (i) in the case of aTemporary Global Note exchangeable for a Permanent Global Note, deliver, or procure the delivery of, a^ermanent Global Note in an aggregate nominal amount equal to that of the whole or that part of aTemporary Global Note that is being exchanged or, in the case of a subsequent exchange, endorse, or>rocure the endorsement of, a Permanent Global Note to reflect such exchange or (ii) in the case of ajlobal Note exchangeable for Definitive Notes or Registered Notes, deliver, or procure the delivery of,in equal aggregate nominal amount of duly executed and authenticated Definitive Notes and/orCertificates, as the case may be. In this Offering Circular, "Definitive Notes" means, in relation to anyjlobal Note, the definitive Bearer Notes for which such Global Note may be exchanged (if appropriate,laving attached to them all Coupons and Receipts in respect of interest or Instalment Amounts that havelot already been paid on the Global Note and a Talon). Definitive Notes will be security printed iniccordance with any applicable legal and stock exchange requirements in or substantially in the form setjut in the Schedules to the Agency Agreement. On exchange in full of each Permanent Global Note, theissuer will, if the holder so requests, procure that it is cancelled and returned to the holder together with.he relevant Definitive Notes.

5 Exchange Date"Exchange Date" means, in relation to a Temporary Global Note, the day falling after the expiry of

40 days after its issue and, in relation to a Permanent Global Note, a day falling not less than 60 days, orin the case of failure to pay principal in respect of any Notes when due, 30 days, after that on which thenotice requiring exchange is given and on which banks are open for business in the city in which thespecified office of the Fiscal Agent is located and in the city in which the relevant clearing system islocated.

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Modification of the Conditions of the Notes while in Global Form

The Global Notes and Global Certificates contain provisions that apply to the Notes that theyrepresent, some of which modify the effect of the terms and conditions of the Notes set out in thúOffering Circular. The following is a summary of certain of those provisions:

1 Payments

No payment falling due after the Exchange Date will be made on any Global Note unless exchangefor an interest in a Permanent Global Note or for Definitive Notes or Registered Notes is improper!}withheld or refused. Payments on any Temporary Global Note issued in compliance with the D Rule:before the Exchange Date will only be made against presentation of certification as to non-U.S. beneficiaownership in the form set out in the Agency Agreement. All payments in respect of Notes represented b)a Global Note will be made against presentation for endorsement and, if no further payment falls to btmade in respect of the Notes, surrender of that Global Note to or to the order of the Fiscal Agent or suchother Paying Agent as shall have been notified to the Noteholders for such purpose. A record of eaclpayment so made will be endorsed on each Global Note, which endorsement will be prima facie evidencethat such payment has been made in respect of the Notes.

2 Prescription

Claims against the Issuer in respect of principal and interest in respect of Notes that are représentéeby a Global Note will become void unless it is presented for payment within a pe.i id of ten years (in thecase of principal) and five years (in the case of interest) from the appropriate Relevant Date (as definecin Condition 8).

3 MeetingsThe holder of a Permanent Global Note or of the Notes represented by a Global Certificate shal

(unless such Permanent Global Note or Global Certificate represents only one Note) be treated as beinjtwo persons for the purposes of any quorum requirements of a meeting of Noteholders and at any suclmeeting, as having one vote in respect of each minimum Specified Denomination of Notes for which suclGlobal Note may be exchanged. (All holders of Registered Notes are entitled to one vote in respect o:each Note comprising such Noteholder's holding, whether or not represented by a Global Certificate.)

4 Cancellation

Cancellation of any Note represented by a Global Note that is required by the Conditions to becancelled (other than upon its redemption) will be effected by reduction in the nominal amount of therelevant Global Note.

5 Purchase

Notes represented by a Permanent Global Note may only be purchased by the Issuer if they arepurchased together with the rights to receive all future payments of interest and Instalment Amounts (iiany) thereon.

6 Events of Default

Each Global Note and Global Certificate provides that the holder may cause such Global Note, or iportion of it, or Registered Notes represented by such Global Certificate, as the case may be, to becomedue and repayable in the circumstances described in Condition 10 by stating in the notice to the FiscaAgent the nominal amount of such Global Note or Registered Notes which is becoming due anerepayable. If principal in respect of any Note is not paid when due, the holder of a Global Note 01Registered Notes represented by a Global Certificate may elect for direct enforcement rights against theIssuer under the terms of a Deed of Covenant executed as a deed by the Issuer on 19th July, 2001 (a;supplemented from time to time) to come into effect in relation to the whole or a part of such GlobalNote or such Registered Notes, as the case may be, as accountholders with a clearing system. Followingany such acquisition of direct rights, the Global Note or, as the case may be, the Global Certificate ancthe corresponding entry in the register kept by the Registrar will become void as to the specified portioror Registered Notes, as the case may be. However, no such election may be made in respect of Note;represented by a Global Certificate unless the transfer of the whole or a part of the holding of Notéerepresented by that Global Certificate shall have been improperly withheld or refused.

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Issuer's Option

Any option of the Issuer provided for in the Conditions of any Notes while such Notes arepresented by a Permanent Global Note shall be exercised by the Issuer giving notice to the Noteholdersthin the time limits set out in and containing the information required by the Conditions, except thate notice shall not be required to contain the serial numbers of Notes drawn in the case of a partialercise of an option and accordingly no drawing of Notes shall be required. If any option of the Issuer isercised in respect of some but not all of the Notes of any Series, the rights of accountholders with aìaring system or an Approved Intermediary in respect of the Notes will be governed by the standardocedures of Euroclear, Clearstream, Luxembourg, Euroclear France or other relevant clearing systems the case may be).

Noteholders' Options

Any option of the Noteholders provided for in the Conditions of any Notes while such Notes arepresented by a Permanent Global Note may be exercised by the holder of the Permanent Global Noteving notice to the Fiscal Agent within the time limits relating to the deposit of Notes with a Payinggent set out in the Conditions substantially in the form of the notice available from any Paying Agent,:cept that the notice shall not be required to contain the serial numbers of the Notes in respect of whiche option has been exercised, and stating the nominal amount of Notes in respect of which the option is:ercised and at the same time presenting the Permanent Global Note to the Fiscal Agent, or to a Payinggent acting on behalf of the Fiscal Agent, for notation.

NoticesNotices to the holders of Registered Notes will be valid (i) if sent by mail to them at their respective

Idresses in the Register and deemed to have been given on the fourth weekday (being a day other than aiturday or a Sunday) after the date of mailing (ii) in addition, so long as the Notes are listed on theaxembourg Stock Exchange and the rules of that exchange so require, if published in a daily newspaperith general circulation in Luxembourg (which is expected to be the Luxemburger Wort) and (iii) (inspect of any Notes listed on Euronext Paris and so long as the rules of that exchange so require), ifiblished in a daily newspaper with general circulation in Paris (which is expected to be La Tribune).otices to the holders of Bearer Notes shall be valid if published (i) in a daily newspaper of generalrculation in London (which is expected to be the Financial Times), (ii) so long as the Notes are listed onie Luxembourg Stock Exchange and the rules of that exchange so require, in a daily newspaper with:neral circulation in Luxembourg, (which is expected to be the Luxemburger Wort) and (iii) (in respect: any Notes listed on Euronext Paris and so long as the rules of that exchange so require) in a daily¡wspaper of general circulation in Paris (which is expected to be La Tribune). If any such publication isjt practicable, notice shall be validly given if published in another leading daily English languagejwspaper with general circulation in Europe and so long as the Notes are listed on Euronext Paris and•e rules of that exchange so require, in a French language newspaper with general circulation in Europe,ny such notice shall be deemed to have been given on the date of such publication or, if published morean once or on different dates, on the date of the first publication as provided above. Couponholderslall be deemed for all purposes to have notice of the contents of any notice given to the holders ofearer Notes in accordance with Condition 14. The Issuer shall also ensure that notices are dulyablished in a manner which complies with the rules and regulations of any other stock exchange (orher relevant authority) on which the Notes are for the time being listed. Any such notice will beiemed to have been given on the date of the first publication or, where required to be published in more¡an one newspaper, on the date of the first publication in each such newspaper.

Except in the case of Notes listed on the Luxembourg Stock Exchange or Euronext Paris, until suchme as any definitive Notes are issued, there may (provided that in the case of Notes listed on any stockxhange, the rules of such stock exchange (or other relevant authority) so permit), so long as the globalote(s) is or are held in its/their entirety on behalf of Euroclear and Clearstream, Luxembourg, beibstituted for such publication in such newspaper(s) the delivery of the relevant notice to Euroclear andlearstream, Luxembourg for communication by them to the Noteholders. Any such notice shall beiemed to have been given to the holders of the Notes on the seventh day after the day on which the saidatice was given to Euroclear and Clearstream, Luxembourg.

Notices to be given by any holder of the Notes shall be in writing and given by lodging the same,>gether with the relative Note or Notes, with the Fiscal Agent. Whilst any of the Notes are representedy a global Note, such notice may be given by any holder of a Note to the Fiscal Agent via Euroclear and/

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or Clearstream, Luxembourg, as the case may be, in such manner as the Agent and Euroclear and/o.Clearstream, Luxembourg, as the case may be, may approve for this purpose.

10 Partly-Paid Notes

The provisions relating to Partly-Paid Notes are not set out in this Offering Circular, but will bcontained in the relevant Pricing Supplement and thereby in the Global Notes. While any instalments othe subscription moneys due from the holder of Partly-Paid Notes are overdue, no interest in a GlobaNote representing such Notes may be exchanged for an interest in a Permanent Global Note or foDefinitive Notes (as the case may be). If any Noteholder fails to pay any instalment due on any PartlyPaid Notes within the time specified, the Issuer may forfeit such Notes and shall have no furtheobligation to their holder in respect of them.

11 Redenomination and Consolidation

A Global Note or Global Certificate may be amended or replaced by the Issuer (in such manner as iconsiders necessary after consultation with the Redenomination Agent and/or the Consolidation Agent, athe case may be) for the purposes of taking account of the redenomination and/or consolidation of thNotes pursuant to Conditions l(b) and 12. Any consolidation may, in such circumstances, require a changin the relevant common depositary or central depositary or custodian or nominee, as the case may be.

Form of Registered Notes

Registered Notes offered and sold outside the United States in reliance on Regulation S under thSecurities Act will be represented by interests in an Unrestricted Global Certificate in registered fornwithout interest coupons attached, which will be deposited on or about the Issue Date (i) in the case ofTranche intended to be cleared through Euroclear and/or Clearstream, Luxembourg with, and registerein the name of, BT Globenet Nominees Limited, as nominee for, the Common Depositary and (ii) in thcase of a Tranche intended to be cleared through Euroclear France, with, and registered in the name (Euroclear France or as otherwise agreed with Euroclear France. A beneficial interest in the UnrestricteGlobal Certificate may at all times be held only through Euroclear and Clearstream, Luxembourg or thApproved Intermediaries.

Registered Notes offered and sold in reliance on Rule 144A will be represented by interests inRestricted Global Certificate, in registered form, without interest coupons attached, which will bregistered in the name of Cede & Co., as nominee for, and which will be deposited on or about the IssuDate with Bankers Trust Company, New York as custodian (the "Custodian") for, DTC. The RestricteGlobal Certificate (and any definitive Registered Notes issued in exchange therefor) will be subject tcertain restrictions on transfer contained in a legend appearing on the face of such Note described unde"Transfer Restrictions in respect of Registered Notes".

Each Unrestricted Global Certificate will have an ISIN and each Restricted Global Certificate wihave a CUSIP number.

Transfer Restrictions in respect of Registered Notes

On or prior to the 40th day after the Issue Date, a beneficial interest in the Unrestricted Glob;Certificate may be transferred to a person who wishes to take delivery of such beneficial interest througthe Restricted Global Certificate only upon receipt by the Registrar of a written certification from thtransferor (in the applicable form provided in the Agency Agreement) to the effect that such transferbeing made to a person whom the transferor reasonably believes is a qualified institutional buyer withithe meaning of Rule 144A, in a transaction meeting the requirements of Rule 144A and in accordanewith any applicable securities laws of any state of the United States or any other jurisdiction. After sue40th day, such certification requirements will no longer apply to such transfers, but such transfers wicontinue to be subject to the transfer restrictions contained in the legend appearing on the face of sueNotes, as set out below.

A beneficial interest in the Restricted Global Certificate may also be transferred to a person whwishes to take delivery of such beneficial interest through the Unrestricted Global Certificate only uporeceipt by the Registrar of a written certification from the transferor (in the applicable form provided ithe Agency Agreement) to the effect that such transfer is being made in accordance with Regulation S cRule 144 (if available) under the Securities Act.

Any beneficial interest in either the Restricted Global Certificate or the Unrestricted Glob.Certificate that is transferred to a person who takes delivery in the form of a beneficial interest in th

32

)ther Global Certificate will, upon transfer, cease to be a beneficial interest in such Global Certificate and>ecome a beneficial interest in the other Global Certificate and, accordingly, will thereafter be subject toill transfer restrictions and other procedures applicable to a beneficial interest in such other GlobalCertificate for so long as such person retains such an interest.

Each person purchasing Notes from a Dealer or its affiliate (the "Vendor") pursuant to Rule 144Aicknowledges that (i) it has not relied on the Vendor in connection with its investigation of the accuracy)f the information contained in this Offering Circular or its investment decision and (ii) no person has>een authorised to give any information or to make any representation concerning the Issuer or the Notes)ther than those contained in this Offering Circular, and, if given or made, such other information orepresentation should not be relied upon as having been authorised by the Issuer or the Vendor. ThisDffering Circular has been prepared by the Issuer solely for use in connection with the offer and sale ofhe Notes outside the United States to non-U.S. persons and for resales of the Notes to qualifiednstitutional buyers in the United States and for the listing of the Notes on the Luxembourg StockExchange and Euronext Paris. The Issuer and the Vendor reserve the right to reject any offer tojurchase, in whole or in part, for any reason, or to sell less than the number of Notes which may bejffered pursuant to Rule 144A. This Offering Circular does not constitute an offer to any person in theJnited States or to any U.S. person other than a qualified institutional buyer within the meaning of Rule144A under the Securities Act to whom an offer has been made directly by the Vendor.

Each prospective purchaser of Notes offered in reliance on Rule 144A (a "144A Offeree"), byiccepting delivery of this Offering Circular, will be deemed to have represented and agreed with respect:o such Notes as follows:

1 such 144A Offeree acknowledges that this Offering Circular is personal to such 144A Offereeand does not constitute an offer to any other person or to the public generally to subscribe foror otherwise acquire Notes other than pursuant to Rule 144A or in offshore transactions inaccordance with Regulation S. Distribution of this Offering Circular, or disclosure of any of itscontents, to any person other than such 144A Offeree and those persons, if any, retained toadvise such 144A Offeree with respect thereto and other persons meeting the requirements ofRule 144A or Regulation S is unauthorised, and any disclosure of any of its contents, withoutthe prior written consent of the Issuer, is prohibited; and

2 such 144A Offeree agrees to make no photocopies of this Offering Circular or any documentsreferred to therein and, if such 144A Offeree does not purchase Notes or the offering isterminated, to return this Offering Circular and all documents referred to herein to theVendor.

Because of the following restrictions, purchasers of Notes offered in the United States in reliance onRule 144A are advised to consult legal counsel prior to making any offer, resale, pledge or transfer ofsuch Notes.

Each purchaser of Notes offered in reliance on Rule 144A will be deemed to have represented,agreed and acknowledged as follows (terms used herein that are defined in Rule 144A are used herein asdefined therein):

1 It is (A) a qualified institutional buyer within the meaning of Rule 144A, (B) acquiring theNotes for its own account or for the account of such a qualified institutional buyer and (C)aware, and each beneficial owner of such Notes has been advised, that the sale of the Notes toit is being made in reliance on Rule 144A.

2 It understands that the Notes are being offered only in a transaction not involving any publicoffering in the United States within the meaning of the Securities Act, and the Notes offeredhereby have not been and will not be registered under the Securities Act and may not bereoffered, resold, pledged or otherwise transferred except in accordance with the legend setforth below.

3 It understands that the Restricted Global Certificate, unless the Issuer determines otherwise incompliance with applicable law, will bear a legend to the following effect:

"THE NOTES IN RESPECT OF WHICH THIS CERTIFICATE HAS BEEN ISSUEDHAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S.SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT"), OR WITHANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHERJURISDICTION OF THE UMTED STATES AND MAY NOT BE OFFERED, RESOLD,

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PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN ACCORDANCE WITIRULE 144A UNDER THE SECURITIES ACT TO A PERSON THAT THE HOLDEIREASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHCTHE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOITHE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER, (2) IN AN OFFSHOR1TRANSACTION IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION :UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FRORREGISTRATION PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OI(4) TO THE ISSUER, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABL1SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. N(REPRESENTATIONS CAN BE MADE AS TO THE AVAILABILITY OF TH1EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOIRESALES OF THE NOTES IN RESPECT OF WHICH THIS CERTIFICATE HAS BEE!ISSUED."

4 The Issuer, the Registrar, and the Dealers and their affiliates and others will rely upon thtruth and accuracy of the foregoing acknowledgements, representations and agreements. Ifis acquiring any Restricted Notes for the account of one or more qualified institutional buyeiit represents that it has sole investment discretion with respect to each such account and that ihas full power to make the foregoing acknowledgements, representations and agreements obehalf of each such account.

5 It understands that the Restricted Notes offered in reliance on Rule 144A will be representeby a Restricted Global Certificate. Before any interest in a Restricted Global Certificate mabe offered, sold, pledged or otherwise transferred to a person who takes delivery in the form can interest in an Unrestricted Global Certificate, it will be required to provide the Issuer anthe Registrar with a written certification (in the form provided in the Agency Agreement) ato compliance with applicable securities laws.

Prospective purchasers are hereby notified that sellers of the Notes may be relyii. on thexemption from the provisions of Section 5 of the Securities Act provided by Rule 144A.

Exchange of Interests in Global CertificatesRegistration of title to Notes initially represented by a Restricted Global Certificate in a name othe

than DTC or a successor depositary or one of their respective nominees will not be permitted unless (iDTC or such successor depositary notifies the Issuer that it is no longer willing or able to dischargproperly its responsibilities as depositary with respect to the Restricted Global Certificate or ceases to ba "clearing agency" registered under the Exchange Act, or is at any time no longer eligible to act as suchand the Issuer is unable to locate a qualified successor within 90 days of receiving notice of suclineligibilky on the part of such depositary, (ii) principal in respect of any Notes is not paid when du(provided that the rules of DTC so permit) or (iii) the relevant Pricing Supplement specifies that thRestricted Global Certificate is exchangeable for definitive Registered Notes, and in any such case thFiscal Agent has received a notice from the registered holder of the Restricted Global Certificatrequesting exchange of the Restricted Global Certificate in full for individual definitive certificates (th"Certificates").

Registration of title to Notes initially represented by an Unrestricted Global Certificate in a namother than the nominee of the Common Depositary or the name of Euroclear France (or its nominee), athe case may be, will not be permitted unless (i) Euroclear, Clearstream, Luxembourg or EurocleaFrance, as the case may be, is closed for business for a continuous period of 14 days (other than by reasoof holidays statutory or otherwise) or announces an intention permanently to cease business or in facdoes so, (ii) principal in respect of any Notes is not paid when due (provided that the rules of EurocleaiClearstream, Luxembourg or Euroclear France, as the case may be, so permit) or (iii) the relevant PricinSupplement specifies that the Unrestricted Global Certificate is exchangeable for definitive Registere<Notes, and in any such case the Registrar or any Transfer Agent has received a notice from the registere*holder of a specified amount of the Unrestricted Global Certificate requesting exchange of thUnrestricted Global Certificate for individual Certificates.

In such circumstances, the relevant Global Certificate shall be exchanged in full or in part, as th<case may be, for Certificates and the Issuer will, at the cost of the Issuer (but against such indemnity as th'Registrar or any relevant Transfer Agent may require in respect of any tax or other duty of whatevenature which may be levied or imposed in connection with such exchange), cause sufficient Certificates t<

34

•e executed and delivered to the Registrar for completion, authentication and dispatch to the relevantJoteholders. A person having an interest in a Global Certificate must provide the Registrar with (i) a/ritten order containing instructions and such other information as the Issuer and the Registrar mayequire to complete, execute and deliver such Certificates and (ii) in the case of the Restricted GlobalCertificate only, a fully completed, signed certificate substantially to the effect that the exchanging holder5 not transferring its interest at the time of such exchange or, in the case of simultaneous sale pursuant tolule 144A, that the transfer is being made in compliance with the provisions of Rule 144A. Certificates>sued in exchange for a beneficial interest in the Restricted Global Certificate shall bear the legendspplicable to transfers pursuant to Rule 144A, as set out under "Transfer Restrictions".

The holder of a Registered Note may transfer such Registered Note in accordance with the>rovisions of Condition 2. Certificates may not be eligible for trading in the clearing systems.

Upon the transfer, exchange or replacement of a Certificate bearing the Rule 144A legend referredo under "Transfer Restrictions", or upon specific request for removal of the Rule 144A legend on aCertificate, the Issuer will deliver only Certificates that bear such legend, or will refuse to remove suchegend, as the case may be, unless there is delivered to the Issuer and the Registrar such satisfactory'vidence, which may include an opinion of counsel, as may reasonably be required by the Issuer to ensurehat neither the legend nor the restrictions on transfer set forth therein are required to ensure compliancevith the provisions of the Securities Act.

The Registrar will not register the transfer of or exchange of interests in a Global Certificate forCertificates for a period of three business days ending on the due date for any payment of principal. Forhe purposes hereof and for payment of interest, "business day" means a day on which commercial banksmd foreign exchange markets are open for business in London and New York City.

luroclear, Clearstream, Luxembourg, Euroclear France and DTC Arrangements for Registered Notes

So long as DTC or its nominee or Euroclear, Clearstream, Luxembourg or the nominee of theCommon Depositary or Euroclear France (or its nominees) is the registered holder of a GlobalCertificate, DTC, Euroclear, Clearstream, Luxembourg, Euroclear France or such nominee, as the casenay be, will be considered the sole owner or holder of the Notes represented by such Global Certificateor all purposes under the Agency Agreement and the Notes. Payments of principal, interest andidditional amounts, if any, in respect of the Global Certificates will be made to DTC, Euroclear,Clearstream, Luxembourg, Euroclear France or such nominee, as the case may be, as the registerediiolder thereof. None of the Issuer, any Agent or any Dealer or any affiliate of any of the above or anyperson by whom any of the above is controlled for the purposes of the Securities Act will have anyresponsibility or liability for any aspect of the records relating to or payments made on account ofBeneficial ownership interests in the Global Certificates or for maintaining, supervising or reviewing anyrecords relating to such beneficial ownership interests.

Distributions of principal and interest with respect to book-entry interests in the Notes held throughEuroclear, Clearstream, Luxembourg or Euroclear France, as the case may be, will be credited, to thejxtent received by, or on behalf of, Euroclear, Clearstream, Luxembourg or Euroclear France, as the casenay be, from the Fiscal Agent, to the cash accounts of Euroclear or Clearstream, Luxembourg customersjr the accounts of Approved Intermediaries, as the case may be, in accordance with the relevant clearingsystem's rules and procedures.

Holders of book-entry interests in the Notes through DTC will receive, to the extent received byDTC from the Fiscal Agent, all distributions of principal and interest with respect to book-entry interestsin the Notes from the Fiscal Agent through DTC. Distributions in the United States will be subject torelevant U.S. tax laws and regulations.

Interest on the Notes (other than interest payable on redemption) will be paid to the holder shownon the Register on the third business day before the due date for such payment so long as the Notes arerepresented by a Global Certificate, instead of on the fifteenth day before the due date for such payment(as provided by Condition 2(f)) so long as the Notes are in definitive form (the "Record Date"). Tradingbetween a Restricted Global Certificate and a related Unrestricted Global Certificate will therefore benet of accrued interest from the relevant Record Date to the relevant Interest Payment Date.

The laws of some states of the United States require that certain persons take physical delivery ofsecurities in definitive form. Consequently, the ability to transfer interests in a Global Certificate to suchpersons will be limited. Because DTC, Euroclear, Clearstream, Luxembourg and Euroclear France (orApproved Intermediaries) can only act on behalf of participants, who in turn act on behalf of indirect

35

participants, the ability of a person having an interest in a Global Certificate to pledge such interest tcpersons or entities which do not participate in the relevant clearing system, or otherwise take actions irrespect of such interest, may be affected by the lack of a physical certificate in respect of such interest

The holdings of book-entry interests in the Notes through Euroclear, Clearstream, Luxembourg ancDTC will be reflected in the book-entry accounts of each such institution. As necessary, the Registrar wiladjust the amounts of Notes on the Register for the accounts of (i) BT Globenet Nominees Limited anc(ii) Cede & Co. to reflect the amounts of Notes held through Euroclear, Clearstream, LuxembourgEuroclear France and DTC, respectively. Beneficial ownership of Notes will be held through financiainstitutions as direct and indirect participants in Euroclear, Clearstream, Luxembourg, Euroclear Franaand DTC, as the case may be.

Interests in each Unrestricted Global Certificate and Restricted Global Certificate will be iruncertified book-entry form.

Trading between Euroclear and/or Clearstream, Luxembourg Accountholders and/or ApprovecIntermediaries. Secondary market sales of book-entry interests in the Notes held through EuroclearClearstream, Luxembourg or Euroclear France, as the case may be, to purchasers of book-entry interest:in the Notes through Euroclear, Clearstream, Luxembourg or Euroclear France, as the case may be, wilbe conducted in accordance with the normal rules and operating procedures of Euroclear, ClearstreamLuxembourg or Euroclear France, as the case may be, and will be settled using the procedures applicableto conventional Eurobonds.

Trading between DTC Participants. Secondary market sales of book-entry interests in the Note:between DTC participants will occur in the ordinary way in accordance with DTC rules and will besettled using the procedures applicable to United States corporate debt obligations in DTC's Same-Da)Funds Settlement System. Where payment is not effected in U.S. dollars, separate payments outside DTCare required to be made between the DTC participants.

Trading between DTC Seller and Eurodear/Clearstream, Luxembourg/Euroclear France PurchaserWhen book-entry interests in Notes are to be transferred from the account of a DTC participant to theaccount of a Euroclear or Clearstream, Luxembourg accountholder, as the case may be, wishing tcpurchase a beneficial interest in an Unrestricted Global Certificate (subject to such certifi :atiorprocedures as are provided in the Agency Agreement), the DTC participant will deliver instruction foidelivery to the relevant Euroclear or Clearstream, Luxembourg accountholder to DTC by 12 noon, NewYork City time, on the settlement date. Separate payment arrangements are required to be madebetween the DTC participant and the relevant Euroclear or Clearstream, Luxembourg accountholder, asthe case may be. On the settlement date, the Custodian will instruct the Registrar to (i) decrease theamount of Notes registered in the name of the nominee for DTC and evidenced by the relevantRestricted Global Certificate and (ii) increase the amount of Notes registered in the name of the nomineefor the Common Depositary and evidenced by the relevant Unrestricted Global Certificate. Certificatebook-entry interests will be delivered free of payment to Euroclear or Clearstream, Luxembourg, as thecase may be, for credit to the relevant accountholder on the first business day following the settlemenldate. See above for details of the Record Date for payments of interest.

The relevant procedures relating to transfers of book-entry interests in Notes to be transferred fromthe account of a DTC participant to the account of an Approved Intermediary will be in such manner asshall be agreed by DTC and Euroclear France at the relevant time.

Trading between Euroclear/Clearstream, Luxembourg/Euroclear France Seller and DTC Purchaser.When book-entry interests in Notes are to be transferred from the account of a Euroclear or Clearstream.Luxembourg accountholder, as the case may be, to the account of a DTC participant wishing to purchasea beneficial interest in a Restricted Global Certificate (subject to such certification procedures as areprovided in the Agency Agreement), the Euroclear or Clearstream, Luxembourg accountholder musisend to Euroclear or Clearstream, Luxembourg delivery free of payment instructions by 19.45 hours.Brussels or Luxembourg time, one business day prior to the settlement date. Separate paymentarrangements are required to be made between the DTC participant and the relevant Euroclear 01Clearstream, Luxembourg accountholders, as the case may be. On the settlement date, the CommonDepositary will (i) transmit appropriate instructions to the Custodian who will in turn deliver such book-entry interests in the Notes free of payment to the relevant account of the DTC participant and (ii)instruct the Registrar to (a) decrease the amount of Notes registered in the name of the nominee of theCommon Depositary and evidenced by the relevant Unrestricted Global Certificate and (b) increase the

36

mount of Notes registered in the name of the nominee for DTC and evidenced by the relevantlestricted Global Certificate. See above for details of the Record Date for payments of interest.

The relevant procedures relating to transfers of book-entry interests in Notes to be transferred fromtie account of an Approved Intermediary to the account of a DTC participant will be in such manner ashall be agreed between Euroclear France and DTC at the relevant time.

DTC has advised the Issuer as follows: DTC is a limited purpose trust company organised under theaws of the State of New York, a "banking organisation" under the laws of the State of New York, anember of the U.S. Federal Reserve System, a "clearing corporation" within the meaning of the Newfork Uniform Commercial Code and a "clearing agency" registered pursuant to the provisions oflection 17A of the Exchange Act. DTC was created to hold securities for its participants and facilitate the:learance and settlement of securities transactions between participants through electronic computerised)ook-entry changes in the accounts of its participants, thereby eliminating the need for physicalnovement of certificates. Direct participants include securities brokers and dealers, banks, trust:ompanies, clearing corporations and certain other organisations. Indirect access to DTC is available to)thers, such as banks, securities brokers, dealers and trust companies, that clear through or maintain a:ustodial relationship with a DTC direct participant, either directly or indirectly.

Although the foregoing sets out the procedures of Euroclear, Clearstream, Luxembourg, EuroclearTrance and DTC in order to facilitate the transfers of interests in the Notes among participants of DTC,Suroclear, Clearstream, Luxembourg and Euroclear France, none of Euroclear, Clearstream,Luxembourg, Euroclear France or DTC is under any obligation to perform or continue to perform;uch procedures, and such procedures may be discontinued at any time. None of the Issuer, any Agent ormy Arranger or Dealer or any affiliate of any of the above, or any person by whom any of the above is:ontrolled for the purposes of the Securities Act, will have any responsibility for the performance byDTC, Euroclear, Clearstream, Luxembourg or Euroclear France (or any Approved Intermediary) or:heir respective direct or indirect participants or accountholders of their respective obligations under therules and procedures governing their operations or for the sufficiency of any purpose of the arrangementsdescribed above.

37

SOCIETE NATIONALE DES CHEMINS DE FER FRANÇAIS

INTRODUCTION

1 Establishment

SNCF is a French public entity of an industrial and commercial character (établissement publi<industriel et commercial — "EPIC") with autonomous management created under Act No. 82-1153 datée30th December, 1982 and modified by the Reform Law on 13th February, 1997 as Act No. 97-135. It:duration is unlimited. As from 1st January, 1983, SNCF became the successor of the corporation createcpursuant to the Laws of 31st August, 1937 and took over the name Société Nationale des Chemins de fe:Français. The registered office of SNCF currently is at 34, rue du Commandant Mouchotte, 75014 Paris

As with all Etablissements Publics (whether Etablissements Publics Administratifs (EPAs) o:EPICs), the French State is ultimately responsible for the solvency of SNCF pursuant to Act No. 80-53'.of 16th July, 1980 (the "Act of 1980") on the execution of judgments on public entities. In the event thaan EPIC defaults, the Act of 1980 assigns responsibility to the relevant supervisory authority (which iicase of SNCF is the French State itself) which must either provide the EPIC with new resources o.automatically approve the sums for which the EPIC is held liable by court order.

Moreover, court-ordered reorganisation and liquidation proceedings do not apply to EPICs (Article2 of the Act of 25th January, 1985).

2. SNCF's Objects

The Reform Law modifies Act No. 82-1153 dated 30th December, 1982 (the "Act of 1982") whichinter alia, sets out SNCF objects. SNCF's new objects are to operate railway services over the nationarailway network and to manage the railway infrastructure on behalf of RFF, each in accordance with theprinciples applicable to public services. SNCF is empowered to carry out all activities directly 01indirectly connected with such objects. The management of the railway infrastructure involve:responsibility for traffic regulation, the security of the network and the good state of repair ancmaintenance of the infrastructure. It may create subsidiaries or take shareholdings in companies, group:or other entities, the purpose of which is related or contributes to that of SNCF.

3. Capital

The capital of SNCF amounts to 28,015,249,838 FRF and is totally owned by the French State.SNCF has no shares and pays no dividends.

4. Relation with Reseau Ferre de France (RFF)

SNCF's fixed assets relating to railway infrastructure existing as at 1st January, 1997 weretransferred to RFF with effect from 1st January, 1997. They were detailed in the Décret No. 97-445 oi5th May, 1997 and principally comprised installations, tracks, signals, lighting, telecommunication devicesand real estate on which such assets were located.

SNCF as Transportation Service Provider pays RFF fees for using the infrastructure which aredetermined in accordance with the Décret No. 97-446 of 5th May, 1997 and the decree of 30th December.1997. This amounts to EUR 1,561 million compared to EUR 1,520 million in 1999.

RFF makes payments to SNCF in respect of management activities. This amounts to EUR 2,617million compared with EUR 2,622 million in 1999.

In parallel, there was a transfer of a liability of EUR 20.5 billion to RFF in consideration for thetransfer of infrastructure assets on 1st January, 1997. This transfer resulted in the recognition in balancesheet assets of a RFF receivable. SNCF liabilities remained unchanged. As at 31st December, 2000 theamount outstanding of this debt is at EUR 15,693 million (cf financial statements).

5. Relationship with the French StatePursuant to the Act of 1982, a Cahier des Charges, an operating agreement entered into between the

Republic of France and SNCF, was approved by Décret No. 83-817 dated 13th September, 1983 asmodified by Décret No.99-11 dated 7th January, 1999. It sets out the conditions and general principlesunder which SNCF shall provide its services to the public and the basis of the contractual relationship ofSNCF with both the French State and local authorities including the principle of compensatory payments.

38

SNCF receives compensatory payments from the French State: contributions which remuneratelobal services, specific works and subsidies to promote the developpment.

Following the signature of new agreements during 2000, the accounting classification ofontributions received from the French State and local authorities was reviewed. As such, certainontributions (the contributions remunerating global services) are now recorded in Revenues (cf financialtatements).

The Reform Law provided also a tranfer of organizational responsibility for regional passenger railransport to local authorities. From 1997 to 2001, an experiment was engaged with 7 local authorities.

Based on this experiment, the SRU (Urban Solidarity and Renewal) law was enacted on3th December, 2000 with effect from January 2002, enacting the transfer to the local authorities of theesponsibility for regional passenger rail transport. Article 129 of this law specifies local authorities haveo sign contracts with SNCF to determine the managing and financial conditions of regional passenger railervices.

>. Special Debt Account

In accordance with the corporate plan ("contrat de plan") signed by the French State and SNCF in990, a Special Debt Account was set up on 1st January, 1991. This account has no independent legaltatus, although separate accounting records are kept by SNCF.

The role of this account is to isolate part of the SNCF debt, in respect of which interest and capitalmyments are essentially made by the French State. Debt transferred to the Special Debt Accountemains there until extinguished.

Debt corresponding to accumulated losses of SNCF at the end of 1989 was transferredEUR 5.8 billion).

In 1997 and 1999 further amounts was transferred (respectively EUR 4.4 billion andÌUR 0.6 billion).

The outstanding indebtedness of the Special Debt Account as at 31st December, 2000 amounts toZUR 8.937 billion (see Note 7 to the consolidated financial statements).

7. Corporate Plan

The Pacte de Modernisation signed between SNCF and the French State on 18th November, 1996defines the relationship between SNCF and the French State over the coming years. It also provides that:he French State will continue to support SNCF financially in its role as provider of public services, and:hat agreements will.be signed between SNCF and the State or local authorities. SNCF's retirement rulesremain unchanged and the French State will continue to assume liability for the debt transferred to theSpecial Debt Account referred to above.

The first phase of SNCF's corporate plan was achieved in 1999 with the ambition to make SNCF anîxemplary public service in France and in Europe with a return to equilibrium and debt stabilization. Thesecond phase 2000-2002 was launched in 2000 with a focus on customers, Europe and efficiency.

39

MANAGEMENT REPORT FOR THE YEAR ENDED 31 DECEMBER 2000

1. Group Presentation

SNCF Group entered phase two of its corporate plan in 2000, with renewed ambition "to beconxthe public service company of reference in both France and Europe by 2002".

In this context, the Group's objectives for 2000 were to strengthen its operating structure t(emphasize its European dimension. The corporate reorganization policy was, therefore, continuedconcentrated around several key lines of development: enhancing both freight and passenger raitransport services, capitalizing on existing assets and expertise, developing international partnerships amwithdrawing from non-core sectors.

_ At the same time, improvement of the Group's financial structure remained a key objective.

40

.1 Simplified Organizational Chart

The SNCF Group's simplified organisation chart as at 31st December, 2000 is shown below:

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SNCF Participations, a 99.83 per cent, subsidiary of the parent company, holds the investments inthe majority of the Group subsidiaries. SNCF Participations is responsible for the financial control of allsubsidiaries and offers its expert advice on changes in Group structure.

41

1.2 Presentation

SNCF is comprised of partner companies, which express the effectiveness of the Group througltheir ability to capitalize on the complementary nature of their services.

A major travel and logistics player in Europe, SNCF Group is now able to fulfill increasingly globatransport service requests: intermodality, transport-related services, logistics. Each Group company i:active in one or more of the operating divisions making up the Group's activities:

• passenger transport,

• freight,

• infrastructure and leveraging of SNCF's assets and know-how.

SNCF Participations, a 99.83 per cent, subsidiary, holds the majority of the Group's investmentsWell beyond its own boundaries, SNCF Participations performs a role of financial and legal control ancoffers its expertise on Group developments to all subsidiaries.

1.3 Significant Events of the Year

1.3.1 Changes in Group Structure

Fiscal year 2000 was marked by the continuation of the subsidiary and investment activemanagement policy launched in 1998.

The sale of non-core activities continued:

• In July 2000, SNCF sold 80 per cent, of its stake in France Rail Publicité to Dauphin - CleaiChannel Group.

• In May 2000, Geodis sold Extand to the UK Post Office. The proceeds from this transaction enablecGeodis to improve its financial structure by substantially reducing its net indebtedness.

At the end of 1999, the Group strengthened its strategic position in the passenger public transponsector by acquiring, jointly with Connex, a stake in Via GTI Group. The integration of Via GTI into therail group became effective in 2000:

• During the first half of 2000, the Group finalized the sale of networks intended for Connex.retaining approximately 60 per cent, of the activity volume realized by the former Via GTI group.

• The progressive buy-out of former stockholders (primarily Paribas) led Via GTI to perform acommon stock reduction enabling an initial repayment to these stockholders.

• The Via GTI and Cariane merger process was accelerated: the SNCF Group intends to rapidlycreate a player of European dimension in the urban and suburban regional transport market bymerging Via GTI and Cariane. By the end of 2000, all Cariane stock held by the Group had ': ;entransferred to Via GTI. The new Via Cariane entity, renamed Keolis, is owned 43.5 per cent, by theGroup and is a leading player in the urban and suburban transport market with revenues of close toEUR 1.5 billion.

• Via GTI net income is included for the first time in the consolidated financial statements for theyear ended December 31,2000 on an equity basis. Cariane net income, whose stock was transferredat the year-end to Via GTI Group, is fully consolidated in the Group financial statements. Thebalance sheet of the new Via Cariane entity is equity accounted as of December 31, 2000.

The Group strengthened its existing positions, undertaking the following investments:

• SNCF Participations increased its interest in the Swiss Group Ermewa from 22.5 per cent, to 45 percent, on July 1, 2000. The Group already held a 33 per cent, stake in the common stock of ErmewaFrance. Partnership agreements signed between the Group and Ermewa led to the creation ofErmefret France in March 2000, a transport and logistics operator in the chemical, petrochemicaland petroleum product sectors. This new company, owned 60 per cent, by Ermewa France and40 per cent, by SNCF Participations, combines SNCF expertise in rail transport and logistics withErmewa's freight car operating experience. In a European market undergoing major restructuring,with several industrialists completely rethinking their logistic activities and outsourcing themanagement of their entire operations, Ermefret France has carved out a niche market in which itoffers comprehensive transport solutions on a European scale.

42

In July 2000, the Group acquired 'Rouch Intermodal. This; investment enabled the Group tostrengthen its position in the combined rail and road transportation sector.

As part of its overall Internet strategy, SNCF spun-off the Internet activities within the GLIinternational holding company, creating Gl.e-commerce. In June 2000, the Group launched the firstrail travel gateway in Europe, baptized Voyages SNCF.com. In addition, the development ofpassenger transport activities in the USA led the Group to create Eurovacations.com, a companyspecializing in the e-marketing of travel services in Europe and targeting an American customerbase. This travel agency is the first to provide customers not only with information on their trip, butalso the ability to create their own "travel package" on-line.

The Group launched the reorganization of its parcel delivery and logistic activities:

One of Geodis' key lines of development is to expand the range of parcel delivery and logisticservices offered by Group. The alliance with Sernam should help strengthen the company's positionin the French parcel delivery market: Geodis plans to purchase a 60 per cent, stake in the commonstock of Sernam SCS as soon as the European authorities have given the go-ahead.

With this perspective in mind, the Sernam activity was spun-off into a wholly-owned SNCFsubsidiary on February 1,2000 (Sernam SCS). This decision was the outcome of an extensive searchfor a solution, as Sernam's worsening results make it impossible for this activity to continue in itsexisting state.

Geodis also acquired control of Züst Ambrosetti, the parcel delivery group, effective January 1,2001.

(.3.2 General Policy'Rail Transport Package"

The Council of Ministers and European Parliament reached an agreement on November 22, 2000egarding the "Rail Transport Package", three draft directives concerning the development of railransport in Europe.

The overall agreement provides notably for:

» the creation of a trans-European rail freight transport network (TERFN); this network will be opento international freight transport and, under certain conditions, primarily safety-related, license-holding rail companies;

» investment to reduce saturation of the TERFN, harmonize safety rules, develop inter-operabilityand progressively harmonize infrastructure fees;

• the creation of a supervisory body responsible for analyzing the development of rail transport inMember States, assessing the success of community measures implemented and undertakingpreliminary studies of all new measures considered by the Commission.

Member States may draw up rules for the priority allocation of markets in the interest of publicervice or the development of rail freight transport. It was also decided that for the purposes ofnternational traffic, the TERFN network should be extended to encompass the entire European railletwork, seven years after implementation of the directives.

However, the European Parliament request to extend access to the network to international>assenger transport and national freight traffic was not adopted.

deduction in the Working Week

Although the law on the reduced working week is not applicable to SNCF, the public authorities,nanagement and trade unions felt that negotiations on the 35-hour working week should be held iniccordance with the provisions of this law.

The signatories asserted their mutual desire to create and ensure continued employment throughhe implementation of the terms of the national agreement. In this way, 25,000 employees are to beecruited between 1999 to 2001.

The implementation of the 35-hour working week within SNCF from January 1, 2000, involved a•eduction in the working week and the granting of additional days off.

43

As the other Group companies are covered by the scope of the Law, the necessary measures weretaken for the implementation of the 35-hour working week within the required legal timeframe.

1.3.3 Other events by division - Passenger transportContract with STIF in Ile de France

On July 12, 2000, SNCF and Syndicat des Transports Parisiens, now known as Syndicat de;Transports d'Ile de France (STIF), the regulatory authority, signed a new contract superseding the 1981agreement and governing relations between the two entities up to 2003. This agreement brought to arend the automatic accounts balancing mechanism regulating operating activities up until now.

From now on, the contract details the services offered by the transporter and its remuneration basisIt also lays down the profit-sharing mechanisms covering the development of traffic volume ancimprovements to service quality. The challenge facing SNCF is, therefore, to cut costs while improvingquality.

The contract took effect retroactively from January 1, 2000.

Le Transilien program, launched in Ile de France, will be continued and stepped-up within thecontext of this contract.

Adoption of the SRU LawWhen voting the SRU Law (Urban Solidarity and Renewal), the French Parliament decided tx

transfer to the regions, with effect from January 2002, organizational responsibility for regional passengeirails transport. This represents a major change in the institutional landscape in which passenger raitransport public services are organized.

Based on the experience gained during the experiment launched in January 1997 in six region:(Alsace, Centre, Nord-Pas-de-Calais, Loire Valley, Provence-Alpes-Cte d'Azur and Rhne-Alpes), plu:Limousin from 1999, the Group is confident in the development possibilities offered by regionapassenger transport activities.

This experiment enabled SNCF to initiate a dynamic public rail transport trend, with traffic volume:and income increasing substantially faster in the experimental regions (12.4 per cent, over the period 199(to 1999 compared to 7 per cent, in other regions). This dynamic trend is attributable to the closeinvolvement of regional Councils, as a result of which the Regional Express Train (TER) became imeans of leveraging social cohesion and regional development:

• modernization and replacement of rolling stock, with investment levels of around EUR 915 million

• refurbishment of close to 350 railroad stations,

• increase in the number of scheduled stops,

• implementation of innovative pricing scales.

Onboard CateringOn October 25, 2000, SNCF finalized an agreement with Accor group setting forth terms anc

conditions for a return to profitability of onboard catering. In the last two years, this activity has seeicommercial sales increase by over 30 per cent, and customer satisfaction levels have increased from 68 peícent, to 85 per cent.

This agreement offers employees considerable assurance as to the future prospects of this activity

Accor group has committed itself with confidence, thanks to the one-off financial support providecby SNCF, to its modernization program, continued commercial development (refurbishment of TG\bars, progressive introduction of automatic distributors in addition to the current range of services) anipreparations for the launch of the Mediterranean TGV in June 2001.

South-Central Concession in the UKIn December 2000, Go-Via (joint venture between Via Cariane (35 per cent.) and Go Ahead (65 peí

cent.)) was named the preferred candidate by the UK authorities for obtaining the 20-year operatinglicense for the South-Central rail network (estimated annual revenues of EUR 457 million), to the soutiof London.

44

SNCF will provide Go-Via with technical support in its role as a rail expert. This company alreadyperales a concession in Greater London, Thames-Link, which uses the same maintenance technicalistallations as South-Central and manages several major correspondences with this network.

In addition, the friendly acquisition by Via Cariane of a 5.9 per cent, stake in Go Ahead shouldontribute to the development of further partnerships for the take-over of rail franchises in the UK.

Operating Start-up of the Stockholm RER by Via Cariane

The Citypendeln contract (Stockholm RER) was renegotiated by Via Cariane in 2000. This contract'¡etails service quality objectives, which were reached from the beginning of December 2000 and have>een maintained since that date.

.3.4 Other events by division - Freight Transport

The Freight Division reorganized its structure in 2000, with the creation of a strategy division andhe strengthening of its management-finance division. The Division subsidiaries are organized around theiperating segments by market, in order to offer a comprehensive international service, from logistics toransport. STVA is already present on the European automobile market as a logistics operator. TheCombined Division is currently being reorganized around CNC. The Chemicals Division will coordinatets activities with Ermewa. The creation of a Cereals and Bulk Division is being planned. Theseeorganization measures aim to position the Freight Division as a European logistics operator.

Strengthening of ties between Novatrans and CNC

The Group and the National Federation of Road-haulers decided to create a Joint StrategicCommittee between CNC and Novatrans, a transport organizer and combined railroad transport>perator.

The goal is to strengthen the presence of both operators at a European level by improving:omplementarity.

Transfer of Feron de ClebsattelOn November 20, 2000, the Group announced the acquisition by SNCF Participations of Feron de

31ebsattel, a Geodis subsidiary (two-stage operation in January 2001 and at the beginning of 2002). This•eorganization will provide Feron de Clebsattel (port and road transport activities) with the necessary•esources for its development and strengthen synergies between SNCF Group members within theeading French ports. It forms an integral part of SNCF's strategy to control the logistic transport chain as:lose to the source as possible, in order to offer comprehensive transport services favoring rail transport.

Geodis and Geopost Alliance

In September 2000, the Boards of Directors of SNCF and La Poste approved the outline of anndustrial alliance between Geodis and Geopost - the holding company regrouping all La Poste packagemd logistic activities - covering their parcel delivery, Express package and related logistic activities.Completion of this operation is subject to finalization of the operating, financial and stockholder termsind conditions. The partners have already set-up a number of operating partnerships between Geodis andLa Poste, which should enable Geodis to expand the capacity of its comprehensive service range inEurope.

1.3.5 Other events by division - Infrastructure and leveraging of SNCF's assets and know-howTélécom Développement

Fiscal year 2000 witnessed an acceleration of the Group's telecommunication activities, particularlyis regards Internet traffic. This activity growth lead to a record increase in Télécom Développementrevenues, which have nearly doubled since 1999 (EUR 707 million compared to EUR 361 million in1999).

Renegotiation of the EOF Energy Sales Agreement

In connection with the new French law on the modernization and development of electricity publicservices, EDF and SNCF signed a new electricity purchase agreement on December 30, 2000, forelectricity produced by SNCF Group. This new contract, which came into force in 2000, enabled theimplementation of a pricing structure more closely reflecting market price.

45

2. SNCF Group

2.1 Financial Statement Comparability

The Group consolidated financial statements have been drawn up in accordance with prevailinglegislation and regulations in France and, from January 1, 2000, in accordance with CRC Regulation 99-02 of the French Accounting Standards Setting Body. Application of the new measures and in-depthaccounting analyses notably led to the presentation of:

• employee profit-sharing and incentive schemes being recorded in personnel costs;

• employee-related provisions within personnel costs and subsidies from the French State withinrevenues, together with income from work performed for RFF on the rail infrastructure,

• borrowings net of sale and lease-back guarantee deposits.

All changes in Group structure and presentation affecting prior year comparisons in the incomestatement are detailed in Note 2 to the financial statements. In addition, 1999 pro forma figures arepresented to facilitate comparison.

2.2 ActivityThe following graph presents annual revenue trends for the last four years:

IE Consolidated revenues

1997 1998 1999 2000

2.3 Consolidated Net IncomeFiscal year 2000 enjoyed a similar context to 1999: economic growth in France (+3.2 per cent.),

inflation widely under control (+ 2.2 per cent.), interest rate rises not affecting short-term recovery inactivity levels.

In this overall favorable economic environment and while reducing its net debt (EUR 7,634 millionat the end of 2000, compared to EUR 8,138 million at the end of 1999), SNCF Group reported net incomefrom ordinary activities and net income for the second year in a row.

46

7999 2000in EUR millions

'evenuesCapitalized production and subsidies'urchases and external charges"axes and duties other than IT'ersonnel costsïross Operating Income)epreciation, amortization and provisions, net...)ther operating income and expenses•let Operating IncomeJet financial income/(expense)iet Income from Ordinary Activities of

Consolidated Companiesexceptional itemsncome tax4et Income of Consolidated Companieslhare in earnings of equity affiliatesAmortization of goodwillConsolidated Net Income/linority interests :«Jet Income for the Year (Group Share)

18,435820

(8,678)(730)

(8,183)1,664(1,195)

(57)412(317)

19,839824

(9,682)(774)

(8,602)(1,605)(1,192)

(6)407(333)

1,4044

(1,004)(44)(419)(59)351(5)(16)

Change Change

7.6%

9537

(40)92

(38)(14)401151

744649

169146(19)295

(119)177

(21)9

8977

184(5)

255(130)126

(3.5)%

(1.2)%

(22.1)%

Despite revenue growth of 7.6 per cent., net operating income remained stable at EUR 407 million,ompared to EUR 412 million in 1999. This lack of growth was primarily due to the combined impact of:

• a marked increase in Télécom Développement net operating income (+ EUR 81 million) and moremodest growth in parent company net income (+ EUR 48 million on a pro forma basis),

a reduction in Sernam (- EUR 30 million), Geodis sub-group (- EUR 26 million) and SeaFrance(- EUR 23 million) net operating income.

Implementation of the 35 hour working week throughout the Group in 2000, particularly sensitiveo labor cost trends as are all service activities, weighed heavily on the results of all entities, as did thencrease in diesel prices for a certain number of them.

'.3.1 Net Financial Income/(Expense)The net financial expense for the period was EUR 333 million, compared to EUR 317 million in

1999, a slight increase of EUR 16 million. The key factors underlying this rise were:

• a net interest expense of EUR 430 million, up EUR 41 million on 1999, essentially due to:

- a EUR 12 million increase in the financial costs of SNCF Participations subsidiaries as a resultof rising interest rates and the full cash impact of external growth operations financed at theend of 1999 (primarily phase one of the Via GTI and Ermewa Suisse acquisitions) and during2000 (phase two of Ermewa Suisse and Via GTI, Rouch and Cariane).

- a modernization of the train pool for use on the Regional Express Train lines.

> net gains on lease finance transactions of EUR 72 million as of December 31, 2000, up EUR 33million. These gains primarily correspond to net income recorded on new corporate financingcontracts, known as "service contracts".

• income from unconsolidated investments of EUR 22 million in 2000 compared to EUR 16 million in1999, mainly due to an increase in dividends paid by EVS (subsidiary of France Wagons) of close toEUR 3 million and income from other parent company marketable securities of EUR 3 million.

» a EUR 14 million net increase in Other financial expenses.

2.3.2 Exceptional Items

Showing a net income of EUR 46 million in 2000, exceptional items were less affected in 2000 byrestructuring operations than in the previous year (exceptional loss of EUR 37 million for 1999):

47

• net capital gains on asset disposals totaled EUR 314 million. The majority of 2000 capital gains wenrealized on the sale of an 80 per cent, stake in France Rail Publicité to the Dauphin Group (EUP142 million) and of the Extand Group by Geodis (EUR 73 million). Sales of real estate ancintangible assets also generated capital gains of some EUR 41 million (including EUR 33 million orthe sale of the 8 rue de Londres building).

• the worrying situation within several of its subsidiaries led Geodis to perform asset write-downs oEUR 35 million.

• the business tax revised assessment issued to the parent company in respect of fiscal years 1997 t(1999 was provided in the amount of EUR 90 million.

2.3.3 Income Tax

The tax position of certain subsidiaries reduced the current tax charge by some EUR 30 millioibetween 1999 and 2000. In addition, Télécom Développement's return to profits and its profit outlook fothe future led to the recognition of a deferred tax asset of EUR 58 million, corresponding to accumulatectax losses carried forward since its creation (49.9 per cent, of this tax saving belongs to TéléconDéveloppement minority interests).

Overall, the tax charge change improved consolidated net income by some EUR 89 million.

2.3.4 Share in Earnings of Equity Affiliates

Investments in equity affiliates are investments in entities which the parent company does nocontrol but over which its exercises significant influence.

As of December 31, 2000, the Group share in earnings of equity affiliates totaled EUR 146 millioncompared to a net loss of EUR 38 million in 1999. This EUR 184 million increase between 1999 and 200(is primarily attributable to the Télécom Développement Group subsidiaries (Cegetel 7 and CegeteEntreprises). In effect, a debt waiver accompanied by a financial recovery clause was granted by CegeteSA (the other Telecom Développement stockholder with a majority interest in these subsidiaries) t<these two companies in the amount of EUR 813 million, to accelerate their development. The Grou]share in earnings of these two subsidiaries, after the Cegetel SA majority stockholder debt waiver, was .net income of EUR 125 million, compared to a net loss of EUR 57 million in 1999, an overa!improvement of EUR 181 million. Note that 49.9 per cent, of this net income of EUR 125 million goes t<Télécom Développement minority interests.

Net income (Group share) for fiscal year 2000 is EUR 177 million, compared to EUR 51 million ii1999. The following graph demonstrates the constant growth in net income over the last four years (iiEUR millions).

El Net income

1997 1998 1999 2000

48

2.4 Cash Position and Finance Sources

2.4.1 Cash PositionThe Group's principal source of liquid resources is cashflow from operations.

• Net cash from operations

Net cash from operating activities is equal to Cashflow adjusted for changes in working capitalrequirements. Cash flow from operations totaled EUR 903 million in 2000 compared to EUR 745 millionin 1999.

Net cash from operations therefore increased EUR 158 million in 2000 compared to 1999. Thisgrowth is attributable to a lesser deterioration in working capital requirements and an improvement innet income.

• Net cash used in investing activities

Net cash used in investing activities comprises tangible and intangible asset purchases and disposals,acquisitions of participating interests, investments in equity affiliates and net movements in otherparticipating interests and marketable securities.

Net cash used in investing activities totaled EUR 831 million in 2000, compared to EUR 1,282million in 1999, a decrease of EUR 451 million. This drop was partly due to a EUR 199 million reductionin capital expenditures and changes in Group structure for EUR 223 million (with notably in 2000 the saleof an 80 per cent, stake in FRP, the sale of Extand, the acquisition of Ermewa Suisse and RouchIntermodal and the entry into the scope of consolidation of Via GTI).

• Net cash used in financing activities

Net cash used in financing activities totaled EUR 524 million in 2000, compared to net cash fromfinancing activities of EUR 949 million in 1999, a downturn of EUR 1,473 million. This change wasprimarily due to a EUR 666 million increase in loan repayments, a reduction in the number of new loanssecured, a drop in subsidies received and a stock issue by Télécom Développement in 1999.

• Cash from operations/'Capex

I CD Investment working capital

1999 2000

2.4.2 Sources of Financing• Debt Management

Debt and Risk ManagementGroup debt as of December 31, 2000 totaled EUR 25,728 million, compared to EUR 28,002 million

last year (pro forma). The law creating Réseau Ferré de France led to the transfer by the Group of debtof EUR 20 billion to this company in 1997 (in consideration for the transfer of infrastructure assets). Thistransfer is reflected by the recognition in Group assets of an amount receivable from Réseau Ferré deFrance. Liabilities are unchanged. As of December 31, 2000 the RFF receivable stood at EUR 7,634million compared to EUR 8,138 million as of December 31,1999 (pro forma). This decrease is primarilyattributable to a reduction in parent company debt (which represents over 90 per cent, of Group debt).

49

Financing secured in 2000 remained stable compared to 1999 at EUR 1.9 billion.

The majority of operations during the year were either performed directly in euros or were subjecito swap contracts on issuance transforming foreign currency commitments into floating rate eurodenominated commitments. Only one issue was retained in its initial currency (CHF 100 million'following the early repayment by the Group of existing bond lines.

In order to maintain a major presence on the markets and ensure the active management of its debtthe Group's objective in 2000 was to perform one major operation in order to protect SNCF's position a:a top quality issuer and a number of operations of smaller unit volume, potentially structured and ove¡shorter terms, in order to gain a cost price advantage.

As such, and based on the same strategy governing the major issue in 1999, a EUR 500 millioimajor issue, maturing October 25,2010 (identical to the 10 year OAT French treasury note) was launchecat the end of June, after a roadshow in Italy, Spain, Sweden, Finland, Germany and the Netherland:during which SNCF presented both itself and its ambitions. This enabled the Group to confirm it:presence in the Euro zone, as underlined by the diversity of its investors (21.40 per cent, in Benelux38.66 per cent, in France, 22.53 per cent, in Switzerland, 9.22 per cent, in Finland, 7.17 per cent, in Spainetc.).

Furthermore, given the favorable conditions offered by BEI, the Group renewed two loans granteein 1994 and 1995 and rescheduled a Swiss franc loan within the framework of the TGV North and TG\Mediterranean projects. These operations were performed in agreement with RFF, in accordance willthe debt agreement between the two companies.

The simultaneous flattening of the interest rate curve and the slight drop in long-term interest rate;at the year-end led the Group to reduce its exposure to floating interest rate risk. The fixed rate portion oborrowings thereby increased from 65 per cent, to 70 per cent.

2.5 Employees and Social PolicyThe annual average number of Group employees (parent company and fully-consolidatec

subsidiaries) increased from 211,265 in 1999 to 216,605 in 2000, a rise of 5,340.

2000 7999 ChangeSNCF(2) 177,623 174,305 3,31EGeodis Group 25,368 25,258 11CCariane Group 3,576 3,560 liSCS Sernam Group 1,379 1,445 (6fSté de Transport de Véhicules Automobiles (STVA) GroupSeaFrance Group 1,552 1,365 187SFCI(1)...... 1,264 1,295 (31Other subsidiaries and participating interests 1,789 N/A l,78i

4,054 4,037 I'/

Total 216,605 211,265 5,34(

Notes:

(1) New entry into the scope of consolidation in 2000.

(2) Including 2,460 employees seconded to SCS Sernam in 2000.

This increase in the number of employees was the net result of:

• increases due to:

- the entry into the scope of consolidation of SFCI;

recruitment by the Group under the 35 hour working week agreement;

the acquisition by the STVA Group of three "Cars et commercial" companies (+ 187);

a marked rise in activity by the Geodis Group (+ 110).

• decreases due to:

the sale of France Rail Publicité.

50

Annual average employee number trends over recent years are as follows:

'arent company*2^.Subsidiaries

1996—

31,856

7997

175,01232,816

1998175,225(1)

35,479

7999

74,305(1)

36,960

2000

177,623(1)

38,982

Total Group 209,746 207,828 210,704 211,265 216,605

•lotes:

1) Management employees excluding individuals recruited under youth employment schemes.

2) including 2,460 employees seconded to SCS Sernam in 2000.

1.6 Environment PolicyIn 1999, the Group, together with seven other public companies, signed a "Public Company and

Sustainable Growth" Charter expressing its firm commitment to protect the environment.

Group Management decided to make the environment a strategic priority. It implemented a mulli-car action plan at parent company level, aimed at ensuring the commitment of all activities and thewidespread development of an environmental culture within the company.

The action plan comprises over fifty individual measures, drawn up after extensive consultation with:he different entities:

• Controlling rail-related noise pollution;

» Reducing atmospheric pollution produced by diesel engines;

» Managing industrial installations, waste and resources;

» Enhancing and eliminating used equipment;

i Planting and controlling vegetation;

» Undertaking environmental research with the set-up of a specific skills division;

» Assessing the external impact of transport;

• Integrating environmental issues into training programs.

2.7 Introduction of the EuroAs early as 1997, fully aware of the challenges presented by the introduction of the euro, the parent

company set-up a "Euro" unit responsible for coordinating actions taken both within the company and inconjunction with the outside environment. This unit prepared a progressive scenario for the introductionof the single currency which was approved by the Executive Committee.

A detailed schedule of actions to be taken was drawn up covering both the training and informationof employees and customers and the adaptation of systems and procedures.

The parent company progressively migrated the majority of its applications to the euro during 1999:cash, suppliers, central accounting system, freight and Sernam billing, passenger tickets, payroll.

The majority of other Group companies migrated their accounting systems to the euro on1st January, 2001.

The parent company booked a provision as of 31st December, 2000 to cover identifiable andforeseeable external costs associated with the introduction of the euro over the entire period. Theprovision stood at EUR 18 million as of December 31, 2000.

2.8 Outlook for the Future

The Group enjoyed a year of strong growth in 2000. Thanks to this, the Group, the parent companyand the main subsidiaries all reported profits, for the first time in several years. The objective for 2001 isto consolidate and extend this trend.

The Group is now fully concentrated on growth. It is at the heart of its corporate plan, both as theGroup's mission is to transport more and more passengers and freight and because growth represents thebest way to assure and finance its future.

51

Above all, 2001 will be the inaugural year of the Mediterranean TGV. This project is alreadysuccess for the Group's Infrastructure Division. It now represents a major commercial challenge for tlparent company and its customers, as well as for the nation. The Group must succeed and make tlproject a springboard for its future development and international reputation.

However, the Group will have other challenges to master: improve service quality, faced in 20'with an actual "growth crisis", in particular in the freight division; prepare the way for regionalizationall French regions on 1st January, 2002; place greater emphasis on its European ambitions; look intomore efficient operating structure for the customer.

All this is evidence of a dynamic Group, which develops and prepares its future.

3. Activity and Results by Division

Group revenues for the year totaled EUR 19,839 million, compared to EUR 18,435 million (pforma) in 1999, an increase of 7.6 per cent. When compared against economic growth of 3.2 per cent.France and 3.4 per cent, in the Euro zone as a whole, this increase is encouraging.

However, gross operating income fell slightly year-on-year to EUR 1,605 million (EUR 1,6million in 1999), while net operating income remained stable at EUR 407 million. In effect, the excellegrowth in Group activities was dampened at profit level by the costs generated by the implementationthe 35-hour working week agreement and at road transport level by successive increases in fuel priethroughout the year.

Division contribution to revenues, gross operating income and net operating income (in ELmillion)

Division revenuesGross operating income.Net operating income

Passengertransport

8,5621,130

343

Freight

6,512184(69)

Infra-structure

andleveragingofSNCF'sassets andknow-how

4,765291133

Grò.19,81,6

4-

Contribution by Division to consolidated revenues

S Passenger transport

m Freight

D Leveraging SNCF's assetsknow-how

3.1 Passenger TransportThis Division brings together all passenger transport activities of the Group - rail (TGV a:

traditional mainline trains, Thalys, Eurostar, Regional Express Trains and Transilien), ferri(SeaFrance) and bus, tram and subway (Via-Cariane, renamed Keolis) - as well as distributi,activities and new services complementary to the intrinsic activities of the Division (Effia, Mlvoyagesncf.com).

52

Change2000 1999 %

Division revenues 8,562 7,926 +8.0%3ross operating income 1.130 1,100 +2.7%

% of revenues 13.2% 13.9Met operating income 343 365 (6.0)%

% of revenues 4.0% 4.6%

All activities of the Passenger Transport Division enjoyed substantial growth in 2000. The rise intotal revenues is essentially attributable to the excellent commercial results of rail activities, whichaccount for close to three-quarters of Division revenues: Mainline revenues increased 6.8 per cent.,Regional Express Train revenues 5.5 per cent, and Transilien revenues 7.3 per cent. The distribution ofrail products abroad and the management of international lines within the International MainlineDivision also enjoyed substantial growth in 2000. Its revenues increased from EUR 141 million to EUR268 million between 1999 and 2000 thanks to the performance of European products and especially linemanagement, with the transfer of the Eurostar Group to the International Mainline Division.

The drop in Division net operating income between 1999 and 2000 was primarily attributable todifficulties encountered by ferry transport activities (SeaFrance): 2000 was the first full year following theend of duty free sales and represented a delicate transition period; the market remains highly competitiveand SeaFrance, penalized at the beginning and end of the year by labor disputes and operating problems,had to face an increase in the capacity of competition. The launch in fiscal year 2000 of several e-commerce subsidiaries (FL ecommerce, voyagesncf.com, etc.) also had a negative impact on Division netoperating income this year, even if future prospects are promising.

3.1.1 Long-distance Rail Transport

MainlinesRevenues increased EUR 283 million (6.8 per cent.) following a marked increase in income from

rail traffic (8.9 per cent.) and traffic-related income in the same proportion. This growth was partiallyoffset by a decrease in State subsidies covering special fares.

This strong growth in traffic income was achieved in an economic context favorable to thedevelopment of rail traffic, compounded by market share gains.

Passenger transport rose 5.1 per cent, on 1999. Growth was recorded across the entire new pricescale: full fare passengers (5.2 per cent, rise in traffic), the discovery range (up 6 per cent.), the 12-25 card(up 11 per cent.) and the child Plus card (up 11.5 per cent.).

The share of TGV traffic (including international) in total Mainline traffic continued to rise - closeto 67 per cent, in 2000 compared to 66 per cent, in 1999 and 64 per cent, in 1998 - and this despite a 2.8 percent, rise in Traditional Mainline Train (TRN) traffic.

Gross operating income rose 5.9 per cent. After excluding additional infrastructure fees, this figureincreases to 15 per cent.

Net operating income is EUR 273 million, down EUR 15 million (5.2 per cent.) year-on-year,notably after the increase in net depreciation and amortization charges of EUR 60 million in 2000.

3.1.2 European Long Distance TransportFiscal year 2000 continued in line with 1999 with:

• the creation of Rhealys, a Luxembourg research company, in partnership with German,Luxembourg and Swiss rail companies, responsible for drawing the future route of the EastEuropean TGV,

• the creation of Elipses Internacional, in partnership with Renfe, to manage the Talgo TransPyrenean trains.

Total income generated by the line management subsidiaries in 2000 totaled EUR 1.2 billion,including EUR 0.7 billion in respect of parent company Mainline activities, an increase of 15 per cent,compared to 1999.

53

3.1.3 Regional and Loca! Public TransportRegional Express Trains (TER)

Revenues increased 5.5 per cent, from EUR 1,569 million in 1999 to EUR 1,655 million in 2000. TIexcellent performance of these activities was attributable to:

• a combination of commercial performance and economic environment. Price innovations we:numerous and the economic recovery encouraged mobility,

• a 6 per cent, increase in the range of services, including (approximately 20 per cent.) interntransfers (Mainline to TER), notably in Brittany and Picardy. This explains the improviperformance of those regions not included in the current experiment, compared with past trend

Gross operating income fell EUR 59 million to EUR 31 million in 2000, with revenue grownecessitating substantial investment in resources dedicated to this activity (employees, externassistance, communication). TER activities also recorded an increase in personnel costs linked to tiimplementation of the 35-hour working week agreement. A net operating loss of EUR 40 million wreported for the year, representing a significant downturn compared to 1999.

Transilien2000 revenues totaled EUR 1,791 million. This considerable increase compared to 1999 (+ EUR 1'

million) was primarily due to:

• the implementation of a new contract with STIF, taking into account the financing of the statkupgrading program,

• the full year impact of the new Eole line (inaugurated in July 1999),

• a substantial increase in the volume of traffic in 2000.

Traffic increased 6.6 per cent, in 2000 year-on-year. This rise reflects an improvement in tlactivity's public image (general public reputation barometer) and is also attributable to the favorabeconomic environment (national growth in excess of 3 per cent., 11 per cent, drop in unemployment ratin Ile de France over 2 years).

Gross operating income totaled EUR 314 million in 2000, up EUR 16 million on 1999, primarily dito increased revenues and a reduction in traction energy expenses. Net operating income totaled EU143 million in 2000 compared to EUR 134 million in 1999.

KEOLISThe Cariane and Via GTI (Keolis Group) head office teams merged at the end of 2000, enabling th

implementation of a new group structure. This Group is now well placed to meet customers' expectatioifor intermodality, with, in particular, improved synergy between the different transport means arnetworks as a result of the complementary activities of the two merged entities.

The key events in France in 2000 were:

• the renewal in France of all urban contracts and inter-urban agreements subject to bids, with tlexception of Charleville where Via Cariane chose not to submit a tender.

• market share gains, notably in the airport sector, both through external growth (purchase of PacifCars) and successful calls for bids (Roissy CDG Airport, Lyon Salólas, Marseille Provence).

• since the end of 2000, the operation of two night bus routes in the Paris region in partnership wilTransilien.

Via Cariane also enjoyed a particularly active year in the international arena:

• the group helped defend its UK partner, Go Ahead, against a hostile takeover bid by C3D, tpurchasing slightly over 5 per cent, of its common stock.

• together with a German partner, the group acquired a majority stockholding in two Germacommunal transport companies (Badkreuznach, Zweibrücken).

• in Sweden, Sydvasten, which operated the Göteborg/Malmoe rail line, went into bankruptc(following a decision by the Swedish authorities to nationalize this activity and transfer it to thnational rail company in 2001). At the same time, and following a difficult start-up period due to th

54

labor environment, the contract held by Citypendeln (Stockholm RER) was renegotiated and thelevel of service required contractually reached on December 1.

Finally, the first half of 2000 was marked by the sale to Connex of real-estate assets, of 49 Via GTIubsidiaries and certain Cariane subsidiaries, in accordance with the original stockholders agreementigned in 1999 at the time of the takeover of Via GTI.

¡.1.4 Transport Ancillary ServicesStation Activities

Activity revenues totaled EUR 62 million for the year and comprised income of EUR 44 millionrom concessions granted to businesses to provide services in railroad stations, EUR 7 million from theental of advertising space, EUR 5 million from car parking and EUR 5 million of miscellaneous income.

Gross operating income totaled EUR 55 million, thanks in particular to service contributions billedo other passenger transport activities for services rendered.

Rail Europe distribution subsidiaries now cover over 40 countries worldwide. Revenue totaledEUR 115 million for the year, comprising commission and miscellaneous income, for net sales ofEuropean rail products on the international market of EUR 0.5 billion in 2000, up significantly on 1999.^Jote however, that the weak euro, notably against the dollar and the pound, had a positive impact on the•esults expressed in French Francs. Net results for fiscal year 2000 are stable on 1999.

Voyages-SNCF.com, the subsidiary responsible for developing SNCF's Internet activities andaunching the first rail transport gateway in Europe, was created in June 2000. It reported revenues ofEUR 8 million for an activity volume since June of close to EUR 91 million, a mere 2 per cent, of parent:ompany sales volume. Sncf.com sales volume in fact totaled EUR 89 million, making it the number onei-commerce site in France.

$.1.5 Ferry transport

SeaFrance operates the Calais-Dover line. Fiscal year 2000 was a delicate period of transition forSeaFrance. In this first full year without duty-free sales, penalized in the opening and closing months byabor disputes, SeaFrance had to face a marked increase in the capacity of its competitors. Following anarder placed at the end of March 2000 for a new ship to be delivered at the end of September 2001,SeaFrance is the leader on the Calais-Dover line, with a new high-performance ship designed to meet thedemands of the new post duty-free market. With a capacity of 120 trucks or 700 cars and a speed of 25knots, the SF Rodin will be the largest and fastest ship to operate this line.

SeaFrance became the sole owner of SPN, in which it held a 49 per cent, stake at the end of 1999,following the transfer of the stock held by GIE Transmanche, financed by a SeaFrance capital increasesubscribed to by the parent company. SeaFrance then merged with SPN with retroactive effect fromJanuary 1, 2000. In this way, SeaFrance added to its assets the two ships previously leased by SPN.

Faced with competitors expanding their product range and with 736 fewer crossings than in 1999,SeaFrance lost market share year-on-year in terms of the number of cars (466,500 transported in 2000,3.9 per cent, of the market, compared to 9.5 per cent, in 1999) and passengers (2.5 million in 2000, 9.4 percent, of the market, compared to 11.2 per cent, in 1999) transported; its share of the freight marketremained stable.

Fiscal year 2000 revenues totaled EUR 175 million, down 13 per cent, on 1999. Thanks to anincrease in transport prices, production sold rose 1.5 per cent, in 2000, but remained insufficient to offsetthe drop in on-board sales of goods.

The end of duty-free sales impacted substantially on gross margin and the surge in energy pricesweighed heavily on costs, resulting in a decline in net operating results and producing a loss of EUR 11million in 2000 compared to a profit of EUR 12 million in 1999.

55

3.2 Freight Division

This Division brings together the freight and logistic activities of the Group, irrespective of t.transport method (rail or road).

Chan2000 1999

Division revenues 6,512 6,184 +5.3Gross operating income 184 251 (27.0)

% of revenues 2.8% 4.1Net operating income (69) (30)

% of revenues (1.1)% (0.5)%

In 2000, the Freight Division benefited from a particularly buoyant economic environmeireflected by growth in revenues. This growth was most notable for the key player in this Division, Geodwhich reported an increase in revenues of close to EUR 296 million in fiscal year 2000.

This improvement in Division activities is not however reflected in gross and net operating incorrGross operating income declined nearly EUR 67 million due to:

• the ongoing deterioration of Sernam parcel delivery activities (loss of EUR 91 million in 20'compared to EUR 66 million in 1999), due to difficulties in turning around its operations.

• Geodis gross operating income fell substantially to EUR 129 million from EUR 149 million in 19Çdespite a strong level of activity. Operating margins were substantially eroded under the combinieffect of several internal and external factors:

- the increase in diesel prices weighed heavily on production costs throughout the better partthe year;

- the implementation of the 35-hour working week agreement increased personnel costs;

- the combined effect of the increase in diesel prices, the implementation of the 35-howorking week and the ongoing high level of activity contributed to an increase in sucontracting costs.

• Rail transport activities reported a decrease in gross operating income due to the impact of the 3.hour working week on payroll costs and the resulting increase in staff numbers.

As a result of the above factors, Division net operating income decreased.

3.2.1 Rail Freight

2000 revenues (EUR 2,136 million) increased EUR 77 million (3.7 per cent.) on 1999 (EUR 2,0.'million). Key movements included the financial impact of the end of the mandate awarded to ScetTransport in the second quarter of 1999, which resulted in a EUR 45 million decrease in revenues.

On a comparable group structure basis, revenues increased EUR 82 million or 4.1 per cenRevenue trends varied, however, between Freight markets. The Wood, Materials and Quarry Producunit reported a 19 per cent, increase in revenues, benefiting from the wood evacuation work generated tthe December 1999 storms. The reopening of 150 wood stations and the provision of an additional 2,OCfreight cars, enabled a twofold increase in wood traffic on 1999.

Similarly, iron and steel products reported growth of 11 per cent. (16 per cent, for iron producalone). The transport of mineral water increased 5.6 per cent. Cereal transport revenues increased 4.4 p(cent., although the growth rate recorded at the beginning of the year slowed during the second half of thyear. Sugar and related products revenues rose 22.8 per cent. Conversely fertilizers reported a downtuiof 1.9 per cent.

Intermodal transport revenues increased only 2.4 per cent., following a downturn in service qualitand poor weather conditions in Italy.

The Petrol, Chemicals and Metals unit suffered from poor weather conditions (transport of salt fcsnow clearing) and an increase in carbonate imports by sea. Petroleum products, together with butanand propane fell back 1.4 per cent. Minerals, non-ferrous metals, explosives and nuclear materialincreased slightly (2.5 per cent.).

56

Finally, the reduction in automobile revenues (down 9 per cent.) was primarily due to a drop in the:1 of new registrations in both France and Europe, a sharp drop in the German market (down 10 pert.), an increase in ferries (notably between Italy and England) and road competition due to the poorlity of rail services and a 16.9 per cent, decrease in the spare parts sector.

Personnel costs increased EUR 43 million (7 per cent.), primarily due to an increase in the numbermployees following a recruitment wave triggered by the implementation of the 35-hour working weekîement. Purchases and external expenses increased EUR 19 million (3.8 per cent.) following an•ease in freight car rental costs and purchases of substitute services to compensate for the decrease inility.

The increase in production costs led to a slight downturn in gross operating income from EUR 80lion in 1999 to EUR 67 million in 2000 (down EUR 13 million). The net operating loss for the period; EUR 3 million compared to EUR 9 million in 1999.

.2 Sernam Parcel Delivery Services

Fiscal year 2000 was marked by several exceptional events. Firstly, Sernam's activity within theent company was spun-off on February 1, 2000. This first step was accompanied by the drafting of air-year transformation project, which will involve the decentralization of responsibilities to the regionsJ divisions and the adaptation of the division network.

Other target areas key to recovery include, in the commercial sector, the clean-out of the currentnmercial base and the development of Sernam's original products, and in the production sector, theiptation of the production tool in line with economic imperatives and to provide the level of qualityjected by the customer base.

Overall, revenues totaled EUR 593 million for the year.

For the first time in several years, revenues from grouping activities outstripped forecasts, both in: parcel delivery sector and the express sector.

On a full year's basis, parcel delivery services reported a drop on 1999 while express servicesritinued to grow. Selling prices increased substantially during the year (+12 per cent, for parcel delivery•vices and +8 per cent, for express services) in response to rising costs, in turn caused by the surge injsel prices and the implementation of the reduced working week by road-haulers.

Charter margin rates exceeded forecasts despite a downward trend in the opening months of thear.

Finally on a commercial front, fiscal year 2000 saw the development of diversification products»istram, Night deliveries, Flash) which remain one of Sernam's unique assets. These products (includinggistic activities) generate revenues of EUR 76 million per year.

The launch of the transformation process has yet to improve the company's financial position and abstantial net loss was once again reported for the fiscal year.

The Sernam Transport Group was created by the purchase in 1993 by SNCF of the companiesoviding transport services on behalf of Sernam. Its main activities include ensuring a substantial shareSernam final destination delivery activities and a "road" activity, notably assuring Sernam transport

an road links.

Sales volume increased substantially in 2000 due to the comprehensive management of truckrvices at certain Sernam divisions in a bid to improve productivity, particularly through the use of sub-mtractors.

The creation of SCS Sernam in February 2000 resulted in a change in Sernam Transport's majorockholder. SCS Sernam took over 100 per cent, of the common stock of Sernam Transport Group. Thistter contributed actively to the Sernam recovery project, which is expected to generate a positive impact. 2001.

2.3 Geodis Group

In 2000, Geodis benefited from a buoyant economic environment, reporting a 9 per cent, increase inivenues (from EUR 3.2 billion to EUR 3.5 billion). Geodis won a number of major commercialDntracts in 2000: in March, a partnership with France Telecom associating this latter's telesales hub withieodis' transport and logistics solutions; in April, a contract with Plastic Omnium for the management of

57

automobile spare parts transport and logistics flows; in September, an agreement with Philips Consurr.Electronics to take over Philips' logistic activities in Europe. Net operating income for the year w.however, EUR 42 million compared to EUR 68 million in 1999.

Geodis' parcel delivery activities are based around Calberson in France, plus a number of majstrategic operations in the majority of European countries. Revenues increased 8.6 per cent, oncomparable group structure and exchange rate basis, thanks to a good level of activity by Calberscwhich reported substantial commercial growth, in particular for its express services. The increase in tpound sterling exchange rate also impacted significantly on the revenues of the UK subsidiaries. Both tdynamism and performance of Calberson were maintained in 2000, despite a shortage of truck driveboth internally and on the sub-contracting market.

"Road Transport" activities organize and manage the transport of batches and full loads. Trestructuring of its commercial range, launched in 1999, was continued with the screening of its custorrportfolio and the definition of new service offers. Revenues increased 3.6 per cent, compared to 1999. Tautomobile (spare parts), distribution, press and air transport sectors enjoyed a good rate of growth. .with Geodis' other activities, net results were affected by an increase in personnel costs and extencosts.

"Logistic" activities group together the integrated management, at European level, of storage flo\product management and related information on behalf of industrial companies and supermarket chaiiRevenues increased 17 per cent, thanks, in particular, to the telephony, electronics, pharmacy asupermarket sectors. Net results were, nonetheless, affected by new contract start-up costs, althouoverall profitability remained satisfactory.

"Overseas" activities offer comprehensive solutions for the international transport of gooimultimodal transport (air and sea), inter-continental logistics and corporate plans. This activity is bason a network located in France, Europe, Africa, Latin America and the Asian-Pacific area. Revenues aup 11 per cent, on last year, thanks to good activity levels and a strong US dollar. Activity net results wenonetheless penalized by losses in South America and Africa (political instability in Ivory Coast) and tFrench subsidiary Setcargo, where a turnaround plan has been implemented.

3.2.4 Combined Transport

CNC

As both a forwarding agent and owner of a pool of 5,500 freight cars, containers and handling siteCNC offers shippers and sea container operators door to door service. To provide this service, it sucontracts rail transport to SNCF and final delivery to road haulage companies. CNC recorded a sligincrease in traffic in 2000 compared to 1999. This masks, however, a number of contrary trends.

The beginning of the year was marked by substantial activity growth (up 8 per cent, at the end .May), particularly in the sea shipping sector (up 15 per cent, at the end of May) thanks to a cooperatkpolicy launched with the ports.

From June onwards, the marked drop in the quality of rail links wiped out this growth, penaliziiboth ground transport and sea shipping activities and especially ground transport activities. A modetailed analysis shows an increase in the gap between sea shipping and ground transport activity trencnotably due to the significant reduction and, during certain periods, the complete termination <international rail links with Italy and England.

In this context, Maritime activities recorded 8 per cent, growth to the end of December on 199while ground transport activities recorded a downturn of close to 4 per cent. CNC nonetheless movedstep closer in 2000 to its objective of a return to profitability.

At the same time and with a close eye on economic balance, CNC continued to revamp iinformation system, work towards quality certification, reorganize its road network and develop itransport and terminal plan.

NovatransA member of the International Union of Combined Rail-Road Transport Companies (UIRR

Novatrans owns freight cars and handling sites, but, as opposed to CNC, only offers road-haulers site-t<site services for the transportation of their semitrailers and swap bodies.

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After two years of consecutive decline, Novatrans enjoyed a return to growth, recording a 8.9 percent, increase in the number of swap bodies transported. This was attributable to both an increase indomestic (up 7.6 per cent.) and international (up 10 per cent.) traffic.

FroidcombiFroidcombi, created in 1998, is a refrigerated combined transporter offering road-haulers site-to-site

rail transport services. It operates primarily along the North-South route and traffic mainly comprisesfruit and vegetables in the south (Avignon, Perpignan) and industrialized food products in the north-east(Valentón, Lille, Nancy, Strasbourg).

Despite problems with rail transport, revenues reported a 12.2 per cent, rise in 2000 compared to1999, with 17,300 swap bodies transported.

ROUGH Intermodal

A specialist in combined railroad transport, Rouch Intermodal recorded 28,400 movements duringthe year, representing 115 swap body departures every day. International activities accounted for 26 percent, of this total and revenues totaled EUR 28 million, up 4 per cent, on 1999. Rouch Intermodalnonetheless enjoyed stable activity volume in 2000. This was mainly due to difficulties encountered withdeveloping International activities, in particular in Germany (closure of the Düsseldorf division) and Italyand by the saturation of departure'terminals in the Lille region, which put a break on growth potential.With 90 per cent, of Rouch Intermodal activities in the combined transport sector, this company is highlysensitive to the quality of SNCF services, which was poor in 2000. The customer portfolio nonethelesscontinued to expand and the growth potential of international activities is particularly good in Belgium.A storage and distribution hub was opened in Toulouse for one of Rouch's major customers, anencouraging sign of diversification for the future.

3.2.5 Cereals & bulk

LogistraIn 2000, Logistra took its place as a fully-fledged player in this sector, with a market share of

approximately 30 per cent. The company continues to develop its position in the cereals and relatedproducts market through its three activities: trains, combined transport and conventional and specializedroad chartering. Its strategic targeting of industrial traffic has borne fruit. Nonetheless, Logistra recordedan increase in transportation delays in 2000, detrimental to its profitability and resulting in a reduction intransport capacity offered to customers (shortage of freight cars in particular).

CTCCTC manages around 5,500 cereal transport freight cars which belong to private owners and are

operated in a pool (Transcéréales). Half of these freight cars belong to CTC.

Transcéréales pool activities were substantial in 2000 and even exceeded 1999 activity levels,already considered excellent. Pool utilization rates were high (average of 81 per cent, over the year).Sustained activity levels marked the period. The marked downturn in transportation times in the fourthquarter (20 per cent, longer on average), led to resource saturation and a pool utilization rate in excess of88 per cent. Overall, the pool supported an increased number of freight car rental days (up 12 per cent.)while transporting lower tonnage (down 1 per cent.) than in 1999.

CTC reported revenues of EUR 27 million, up 3.8 per cent, on 1999.

3.2.6 Automobile TransportThe STVA group offers automobile manufacturers a comprehensive service direct to the

dealerships, using both road and rail transport techniques and entrusting intermediary storage, vehiclepreparation and local transport to specialized subsidiaries.

The European automobile market declined 2.2 per cent, overall in 2000 compared to 1999 to14,740,000, with significant variations between national markets: the German market fell 11 per cent., theSpanish market remained more or less stable at 1999 levels, the new car market increased 1 per cent, inthe UK and the Italian market recorded growth of 3 per cent. In France, registrations decreased 1 percent, in 2000 compared to the previous year.

In the rail sector, STVA manages a pool of 4,200 freight cars at the end of 2000, including over 300"VMV" type freight cars recently brought into service for the transportation of medium/large volume

59

vehicles. These new high capacity freight cars are highly successful with customers, being well adapted t<the needs of the market and easy to load. Nonetheless, the number of vehicles transported by rail bSVTA is down overall by 5.8 per cent. (1,030,000 vehicles), in line notably with the drop in US customevolumes.

For distribution activities in France and Europe, STVA uses a network of subsidiaries (France) anipartners (Europe). Road haulage subsidiaries in France, Belgium and the UK enable the Group to offecustomers an alternative end-to-end road solution, when volumes or special conditions make ra:transport inappropriate.

At the same time, the French STVA subsidiaries enjoyed mixed fortunes. While total subsidiartransit activities recorded a decline of 4 per cent, due to a weakening on the French market of certai:manufacturers, storage activities remained buoyant throughout the year enjoying an increase of 21 pecent, and vehicle preparation activities rose substantially (44 per cent.). This increase was due to thtechnical preparation of all vehicles transported to dealerships from March 1, 2000. Substanti?investment was made in this new market in Tours, Limoges, Dijon, Marseille and Valentón wheretransfer line was installed increasing capacity to 450 technical preparations per day.

3.2.7 International Freight

In 2000, International freight activities were marked by the spin-off of the Brussels Europea:Commercial Division and the creation of Fret Europe Benelux on October 1, and by preparations for thcreation in 2001 of subsidiaries in partnership with RENFE in Spain, with DB Cargo in Germany for thmanagement of Franco-German products and with FS Cargo in Italy for the development of iron an>steel product traffic between France and Italy.

At the same time, SNCF Fret Italia and SNCF Fret Deutschland, brought into the scope oconsolidation on January 1, 2000, enjoyed their first full year of operation, with a high level of traffic an>transport operator activities with French customers. Freight Europe UK suffered a relatively difficulyear marked by a shortage of freight cars, in particular those of UK size, making any material increase i¡revenues impossible in 2000.

Consolidated revenues totaled EUR 11.5 million, up over 50 per cent.

3.2.8 Freight Car Management

France Wagons, created in 1993 following the transfer of the parent company's pool of networlfreight cars, is responsible for ensuring the renewal of this pool in line with the requirements of FreSNCF, the principal user, as well as the maintenance of this rolling stock. In addition, it holds investmentin several entities which manage private freight car pools: 85 per cent, stake in GIE Transengrais, 34 pecent, stake in EVS, and since 1999, 10 per cent, stake in Transucre and 8.46 per cent, stake in SGW. Athe end of 2000, the France Wagons pool comprised 53,386 freight cars compared to 55,032 at the end o1999. This reduction was primarily due to the ongoing sale of surplus and obsolete freight cars outside th(Group. Conversely, the company invested EUR 1.2 million in the purchase of second-hand freight carfrom various owners and in the acquisition of equipment. France Wagons performed conversion worlcosting a total of EUR 9 million, in a bid to modernize the existing pool and enhance the value of underutilized freight cars. This equipment will be commissioned starting at the beginning of 2001.

The company reported revenues of EUR 124 million in 2000 compared to EUR 122 million in 1999This rise was primarily due to an increase in the number of freight cars rented to third parties an<invoiced to Fret SNCF to satisfy the growth in traffic in certain sectors such as the drinks sector. Neoperating income increased from EUR 3 million to EUR 6 million as a result of a tight control ovemaintenance costs.

3.3 Infrastructure and Leveraging SNCF's Assets and know-how

The "Infrastructure and leveraging SNCF's assets and know-how" Division brings togetheinfrastructure management, telecommunications (Télécom Développement), engineering and researcl(SHEM, AREP, SNCF International) activities as well as the management of Group real-estate asset.(SNEF, SFCI).

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Change2000 1999 %

Division revenues 4,765 4,325 +10.2%Gross operating income 291 313 (7.0)%

% of revenues 6.1% 7.2%Net operating income 133 77 +72.7%

% of revenues 2.9 1.8%

The marked increase in Division revenues between 1999 and 2000 reflects the explosion in Grouptelecommunication activities. Telecom Développement revenues surged (from EUR 360 million in 1999to EUR 707 million in 2000) particularly from Internet traffic. This in turn necessitated a significantincrease in network capacity.

3 J.I Managing the Infrastructure

Activity revenues remained stable in 2000 at EUR 3,683 million compared to EUR 3,702 million in1999, as a result of stable activity volume. This income is billed to Réseau Ferré de France to remuneraterail infrastructure management services rendered by the parent company as well as owner'srepresentative and project manager services rendered and work performed.

2000 saw RFF rail network maintenance activities continue at the same rate as in 1999, without anymajor change. The distance covered by lines in operation decreased from 31,700 kms in 1999 to 31,500kms in 2000. Infrastructure refurbishment work totaled EUR 625 million in 2000 compared to EUR 645million in 1999. This work enabled, inter alia, the full or partial refurbishment of 608 kms of railway line,up slightly on the last two years.

Infrastructure work on the TGV Mediterranean line performed on behalf of RFF was completed in2000 on schedule and on budget. Commercial services are scheduled to start in June 2001.

Gross operating income totaled EUR 146 million in 2000 compared to EUR 217 million in 1999.This drop was primarily due to an increase in average employee numbers following the implementationof the 35-hour working week. Net operating income remained nonetheless stable in 2000 (EUR 68 millioncompared to EUR 69 million in 1999).

3.3.2 TelecommunicationsFiscal year 2000 saw a further acceleration in Télécom Développement (TD) activities, notably with

respect to Internet traffic. This necessitated a substantial increase in network capacity.

As regards services, Télécom Développement launched direct access telecom operator pre-selectionfor the "7" (Cegetel's fixed-line service) at the beginning of the year and, at the end of the year, selectionof the telecom operator for calls to cell phones.

In addition to this new traffic, traditional TD traffic recorded substantial growth and particularly thecollection and final delivery of traffic for third-party voice operators and the amazing surge in Internetactivities. Volumes increased threefold on 1999, with 17 billion minutes transported by the network in2000. Daily traffic levels at the end of 2000 totaled 70 million minutes, compared to a mere 30 millionminutes one year previously.

During the year, TD substantially expanded the number of national and international broadbandlinks on offer to the Cegetel Group, third-party operators, SNCF and major French administrativeauthorities. The commercial pool comprised close to 10,000 2 Mbit/s equivalent links at the end of 2000,triple that on offer at the end of 1999. This marked increase both in traffic carried and links leased wasmade possible by the size and capillarity of the network, which allows the company to offer a high level ofcapacity at economically competitive terms and conditions.

During the year, TD more than doubled the size of its transmission and commutation network andlinked up with over 150 new France Télécom hubs, enabling one in two calls to be passed at this level ofinter-connection. It also opened 6 new inter-connections with foreign operators, enabling two in threecalls to be routed directly.

In conjunction with SNCF, responsible for leading the deployment project, TD continued todevelop its network adding approximately 200 new kilometers of cable.

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Anticipating a further surge in traffic in 2001, TD launched the construction of four new function,sites in the Paris and Lyon regions, which will be operational at the beginning of 2001.

In this context, revenues for the period totaled EUR 707 million and net operating income EUR (million, up EUR 81 million. Despite the aggressive competition faced by the commercial companiiCegetel 7 and Cegetel Entreprises leading to yet further price decreases, both companies, owned 20 picent, by TD, reported a substantial increase in revenues to EUR 470 million.

3.3.3 Hydro-Electric Power Production

The corporate purpose of the SHEM Group is the production of electrical energy. The groicomprises SHEM, which merged with its subsidiary Compagnie Hydro-électrique de l'Aubrac in Jui2000 and three other subsidiaries, Forces Motrices du Valentin, Energie du Sud-Ouest and EnergLagarde.

Fiscal year 2000 was marked by the entry into force of a new energy purchase agreement with EDpursuant to the new law governing the modernization and development of electricity public services. Tbagreement was the outcome of high-level negotiations between SNCF and EOF and is based on a pri<scale which more closely reflects market price.

In March 2000, the public authorities renewed SHEM's Licq - Sainte Engrace operating license fa period of 75 years. At the beginning of the summer the Capdenac plant was fitted with a bulb turbiiequipped with innovative technology, which should enable production to be increased by 7.5 GWh pyear.

These events triggered a substantial change in revenues, which increased to EUR 80 million in 20(from EUR 44 million in 1999. This change was accompanied by the implementation of energy purchaagreements between SHEM and its subsidiaries. Gross energy production remained stable in 20001,647 GWh, compared to 1,689 GWh in 1999.

4. Additional Information Concerning the Parent Company

4.1 Changes in Accounting Method

The 2000 income statement was affected by a number of structural factors which explain tlsubstantial change in certain headings compared to 1999.

These factors include:

• the spin-off of Sernam on February 1, 2000 and the resulting decrease in traffic income arintermediary consumption (1 month's activity in 2000 compared to 12 months in 1999) and tlinclusion in the 2000 income statement of reciprocal billing flows previously included in interncompany flows;

• the reclassification in revenues of service compensations paid by the French State and regions arSTIF, following an analysis of the nature of these compensations which remunerate global serviodetailed in corresponding agreements;

• the reclassification in revenues of project management, project leader and production sold serviorendered by SNCF for Réseau Ferré de France (RPF) - referred to hereafter as "Work perforrmfor RFF";

• the reclassification in personnel costs of provisions for paid vacation and leave not taken (previousrecorded in operating provisions) and for early retirement (previously recorded in exceptionitems).

In order to facilitate a year-on-year comparison, the impact of these changes (excluding the spin-cof Sernam) are summarized in the parent company financial statements presented below (pro fornfigures).

4.2 Parent Company Results

The parent company financial statements for the year ended December 31,2000 report a net inconof EUR 68 million. The 1999 financial statements reported a net loss of EUR 87 million.

The Company recorded a marked increase in both passenger traffic (TGV: up 7.1 per cenTraditional Mainline Trains: up 0.8 per cent.; Regional Express Trains: up 6.6 per cent., or 5.3 per cenfor the principal network, Transilien: up 5 per cent.) and freight traffic (up 6.2 per cent.), thanks to

62

favorable economic environment, confirming the appropriateness of the volume policy launched fouryears ago.

The volume policy launched in 1996, offering easier and cheaper access to trains, has enabledunprecedented growth. The train has won back passengers, with a 15 per cent, increase in mainline,regional express and Transilien traffic between 1996 and 2000. Freight won market share from roadhaulage in 2000, while freight traffic increased 15 per cent, between 1996 and 2000.

The parent company is ahead of the market plan set by the corporate plan. This is partly due tosustained economic growth and an increase in fuel prices. It is also the result of a commercial policy whichmore closely reflects customer needs, such as the desire by shippers to better organize their trafficbetween road and rail. The Company was, however, forced to deal with a growth crisis. The most tangiblesign of this crisis was poor service quality, both for freight and passenger transport, and notably in the Hede France region. The parent company must ensure it is able to manage these traffic surges, invest for thefuture, notably in rolling stock and propose the necessary capex to the French State and RFF to reducesaturation of the infrastructure. A degree of capex is already provided for in the State-Regional PlanContracts, covering the period of the XII plan (2000 - 2006). These contracts represent a marked changein policy in favor rail transport.

As the parent company accounts for over two-thirds of Group activity, the information presentedon the 2000 consolidated results explains the majority of the parent company results.

In summary, 2000 net operating income is EUR 256 million, compared to EUR 208 million in 1999pro forma and net income from ordinary activities EUR 101 million compared to EUR 45 million in 1999pro forma. Exceptional items show a net expense of EUR 78 million.

Note that the parent company did not record a tax charge in respect of the year due to tax lossescarried forward (EUR 973 million of tax group ordinary losses as of December 31, 2000 and EUR 8,399million of tax group tax losses carried forward indefinitely).

4.3 Material Movements in InvestmentsDuring fiscal year 2000, investments fell by EUR 243 million overall. The main transactions were as

follows:

• Sale to the Dauphin Group of an 80 per cent, stake in France Rail Publicité for EUR 154 million,based on a net book value of EUR 1 million.

4.4 Corporate Governance

The Board of Directors of the Industrial and Commercial Public Institution SNCF compriseseighteen members:

• Seven representatives of the French State appointed by decree, based on the report of the TransportMinister:

two at the recommendation of the Transport Minister,!

- one at the recommendation of the Economic and Finance Minister,

- one at the recommendation of the Budget minister,

- one at the recommendation of the Minister responsible for planning and regionaldevelopment,

- one at the recommendation of the Industry Minister,

- the Chairman of the Board appointed from among directors and at their recommendation by aCouncil of Ministers' Decree.

• Five members chosen for their expertise and appointed by decree:

- a representative of passengers,

- a representative of shippers,

two local councilors chosen for their knowledge of regional, department and local rail-relatedmatters,

an individual chosen for his personal expertise in the transport sector.

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• Six members, including a management representative, elected by employees of Group companiwith a minimum workforce of 200.

A Council of State ("Conseil d'Etat") Decree lays down the parent company bylaws and sets tlprocedures for the appointment and election of Board members.

Board members are appointed for a five-year term of office. A director may not exercise more th;three consecutive terms of office. Directors receive no compensation for their activities.

The Government Commissioner or, in his absence, the Assistant Government Commissioner has ;advisory seat on the Board and all sub-committees and commissions created.

The head of the Transport Economic and Finance Control Office or his representative has ;advisory seat on the Board and all sub-committees and commissions. The Board Secretary and t)Central Company Committee Secretary also have a seat on the Board. The Board of Directors metmonthly.

In order to strengthen its analysis and decision-making capacity and in accordance with the termsthe bylaws, the Board of Directors has set up a number of specialized committees and commissions.

Audit and Risk Committee, responsible for reviewing the accounts, budget and risk control.

Finance and Plan Commission, responsible for dealing with questions concerning financimanagement, the budget and the annual and half-year financial statements.

Group Commission, consulted on matters concerning general policy and Group restructurir.Group company financial statements, acquisitions of new or additional investments and disposals, tlcreation, sale and winding up of subsidiaries.

Regionalization Commission, responsible for monitoring matters concerning the regionalizationregional and local passenger public transport services.

Markets Commission, consulted on projects involving contracts, public markets, acquisiticidisposals, building exchanges etc. exceeding a predetermined threshold set by the Board.

4.4.1 Executive Management

Executive CommitteeThe Chairman appoints the members of the Executive Committee and defines their tasks.

The Executive Committee collectively reviews, at the initiative of the Chairman or on the proposof one of its members, development and strategic projects necessary to the development of the Grou

The Chairman approves decisions concerning all matters reviewed by the Executive Committee. !their areas of expertise, the Chairman delegates powers to Executive Committee members to enabthem to act and decide in his name.

The powers delegated carry authority over all Company bodies.

4.5 Extracts from the SNCF Parent Company Financial StatementsThe key explanations concerning the company financial statements of the public institution SNC

are presented in the consolidated financial statements. As such, only the summary financial statementsSNCF are presented here.

The company financial statements may be obtained by simple request from SNCF (ManagemeControl Division).

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Summary Income Statement1999(1)

2000 Pro formaEUR millions

RevenuesOther incomePurchases and external chargesValue addedOperating subsidiesFaxes and duties other than ITPersonnel costs ;Gross operating incomeDepreciation, amortization and provisions, net.Other operating income and expensesÌSet operating incomeNet financial expenseNet income from ordinary activitiesExceptional itemsIncome from tax grouping ,Net income/(loss) for the year

14,348553

(6,032)8,869234(645)

(7,364)1,094(795)(43)256(155)101(78)4568

14,113525

(6,063)8,575222(608)

(7,045)1,144(876)(60)208(163)45

(146)14(87)

1999Published

11,9641,454(6,063)7,3551,442(608)

(7,015)1,174(865)(60)249(163)86

(187)14(87)

Note:(1) The 1999 financial statements were restated in accordance with the new presentation adopted in fiscal year 2000.

Summary Balance Sheet

Tangible and intangible assetsRéseau Ferré de France (RFF) receivableOther long-term investmentsInventory and work-in-processOperating receivablesSpecial Debt Account and Employee-Related Benefits Service Account

assetsCash and cash equivalentsPrepaid expenses and deferred chargesTotal assets

Stockholders' equityReserves for contingencies and lossesBorrowingsOperating liabilitiesSpecial Debt Account and Employee-Related Benefits Service Account

liabilitiesAccruals and deferred incomeTotal liabilities and stockholders' equity

Summary Statement of Cashflows

Cash flow from company operations*2*Change in working capital requirements

- Net cash from operations- Net cash used in investing activities- Net cash from/(used in) financing activities

Increase/(decrease) in the cash balance

2000 1999EUR millions

10,597 10,17416,256 18,1763,382 3,296

441 4576,691 4,146

1,5361,323

76640,992

6,1831,686

21,6178,336

5742,596

40,992

1,6011,2021,519

40,571

5,8461,301

24,3236,482

7971,822

40,571

1999(D

2000 Pro formaEUR millions

1,040(642)398

(870)609

1,035(416)619

(331)(389)(101) 137

Notes:(1) The 1999 financial statements were restated in accordance with the new presentation adopted in fiscal year 2000.(2) Cashflow is obtained by adding Charges to current asset provisions to Cash flow from company operations.

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CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated information set forth below for 1999 and 2000 is included for informatiopurposes. The financial information appearing below should be read in conjunction with "Characteristicof Financial Year 1999 and Subsequent Events" and "Characteristics of Financial Year 2000 anSubsequent Events". The consolidated financial statements of SNCF for 1999 and 2000 including thnotes thereto have been audited by SNCF's statutory auditors.

66

CONSOLIDATED BALANCE SHEET AS OF 31st DECEMBER(in EUR millions)

Vssetsjoodwillntangible assetsTangible assetsleseau Ferre de France ("RFF") ReceivableDther long-term investmentsEquity affiliates

Total non-current assets

inventory and work-in-processOperating receivablesSpecial debt account and employee-related benefits

service account assets3ash and cash equivalents

Total current assets

Prepaid expenses and deferred charges

Total assets

Liabilities and Stockholders' EquityCapitalReserves and accumulated profitstockholders' Equity (Group Share)

¡Minority interests

Reserves for contingencies and losses

Loans and borrowingsOperating liabilitiesSpecial debt account and employee-related benefits

service account liabilities

Total liabilities

Accruals and deferred income

Total liabilities and stockholders' equity

Note

4567

1011

3112

Note

131313

14

15

17, 1819

31

2000

256117

14,10116,255

823426

4655,675

1,5371,570

9,247

41,225

2000

4,27180

4,351

301

1,384

25,7288,887

574

35,189

41,225

1999pro

forma(1)

179122

13,83318,176

849326

31,978 33,485

4806,028

1,6011,479

9,588

1999published

179122

13,83318,1761,562

326

34,198

4805,202

1,6011,479

8,762

826

43,073 43,786

1999pro

forma(1)

4,271(94)

4,177

213

1,384

28,0028,500

797

7999published

4,271(94)

4,177

213

1,614

28,7155,914

797

37,299 35,426

2,356

43,073 43,786

Vote:

,1) The 1999 financial statements were restated in accordance with the new presentation adopted in fiscal year 2000 (cf. Note 2Changes in presentation).

67

CONSOLIDATED INCOME STATEMENTFOR THE YEAR ENDED 31st DECEMBER

(in EUR-millions)

Consolidated revenuesWork performed for RFFCapitalised production and production for stock.Operating subsidiesPurchases and external chargesTaxes and duties other than ITPersonnel costs

Gross operating income

Depreciation, amortization and provisions, net...Other operating income and expenses

Net operating income

Share in earnings of joint venture operations

Net financial income/(cxpense)

Net income from ordinary activities ofconsolidated companies

Exceptional items

Income taxEmployee profit-sharing

Net income of consolidated companies

Share in earnings of equity affiliatesAmortization of goodwill

Consolidated net income

Minority interests

Net income for the year (group share)

Nose

20

2.221

23

24

25

26

27

94

14

2000

19,839

589235

(9,682)(774)

(8,602)

1,605

(1,192)(6)

407

(333)

74

46

49

169

146(19)

296

119

7999pro

formc(l)

18,435

593227

(8,678)(730)

(8,183)

1,664

(1,195)(57)

412

(317)

95

37

(40)

92

19publish

16,295

1,4(8,6

('i(8,1

1,7

(1,1

(38)(14)

40

(3

177 51

Note:

(1) The 1999 financial statements were restated in accordance with the new presentation adopted in fiscal year 2000 (cf. Not'Changes in presentation).

68

CONSOLIDATED STATEMENT OF CASHFLOWSFOR THE YEAR ENDED 31st DECEMBER

(in EUR millions)

Note

Net income of consolidated companiesAdd-back of non-cash items:

Depreciation, amortization and provisions, net(excluding current asset provisions)

Deferred tax movementCapital gains/(losses) on disposalOther

Cash flow from consolidated company operations

Dividends received from equity affiliatesChange in working capital requirements

Net cash from/(used in) operations

Non-current asset purchasesNon-current asset disposalsChange in loans and receivablesImpact of changes in group structureOther investment changes

Net cash from/(used in) investing activities

Dividends paid to minority interests in consolidated companies.New loans securedLoan repaymentsInvestment subsidies receivedOther changes

Net cash from/(used in) financing activities

Increase/(dccrcase) in cash balance

Opening cash balanceClosing cash balanceImpact of exchange rate fluctuationsImpact of changes in accounting method

30

30

30

30

30

1999pro

2000 forma(1)

169

1,422(53)

(304)(11)

1,223

9(329)

903

(1,175)17326

12916

(7)1,645

(2,133)263

(292)

(524)

(452)

57(348)

52(5).

92

1,405

(279)

1,219

6(480)

745

(1,464)22031

(94)25

(831) (1,282)

(8)1,812

(1,467)369244

949

412

(348)57(7)

Notes:

(1) The consolidated statement of cashflows is published for the first time in fiscal year 2000. A 1999 pro forma statement hasbeen prepared for comparative purposes.

(2) Cashflow is obtained by adding Charges to current asset provisions (EUR 21 million in 2000) to Cashflow from operations.

69

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll amounts are in millions of euro, unless stated otherwise

1. Accounting Standards

Pursuant to Article 25 of the Orientation Law on Domestic Transport (LOTI) of 30th Decembe1982, Société Nationale des Chemins de fer Français (SNCF), a state-owned industrial and commerciinstitution "is subject to the financial management and accounting rules applicable to commercicompanies". SNCF keeps its accounting books and records in accordance with prevailing legislation ar.regulations in France.

As from 1st January, 2000, the consolidated financial statements are prepared in accordance wiithe new rules and methods applicable to consolidated financial statements, approved by the Ministeri.Order of 22nd June, 1999 authorizing CRC Regulation 99-02 issued by the French Accounting StandanSetting Body.

2. Comparability of the Financial Statements

Amendents introduced by CRC Regulations 99-02 to the Presentation of the Consolidated Baianesheet and Income Statement

Prepayment and accrual accounts, presented separately on the balance sheet up until 31December, 1999, are now included in operating receivables and payables. Prepayment and accrueincome accounts totaled EUR 729 million and Accrual and deferred income accounts EUR 2,806 millicin 2000 compared to EUR 826 million and EUR 2,356 million in 1999 respectively,

Employee profit-sharing, presented separately in the income statement up until 31st Decembe1999, is now included in Personnel costs (EUR 6 million in 1999 and EUR 9 million in 2000),

The share in earnings of joint venture operations, presented separately in the income statement vuntil 31st December, 1999, is now included within Net financial income. This income totaleEUR 0.3 million in 2000 compared to EUR 1.4 million in 1999.

1999 figures have been restated in the pro forma column in order to facilitate comparison.

Other changes in PresentationRevenues

Following the signature of new agreements during 2000, the Group decided to review the accounclassification of contributions received from the French State and Local Authorities. As such, certaicontributions included in Operating subsidies up until 1999 are now recorded in Revenues (EUR 1,17million in 2000 and EUR 1,219 million in 1999), as indicated in Notes 20 and 22.

An analysis showed these contributions to remunerate global services, the characteristics of whic(quality objectives, supply, etc.) are detailed in each contract.

In addition, project management, project leadership and production sold services rendered by thGroup, primarily for Réseau Ferré de France, are recorded starting from fiscal year 2000 in Revenues ithe amount of EUR 935 million (EUR 929 million presented on a separate line of the income statemeiin 1999).

The impact of this analysis and the resulting reclassifications is as follows:

7999 79Í2000 Pro forma Publisht

Income statementRevenues 19,839 18,435 16,2SWork f o r R F F - - 9 2Operating subsidies 235 227 1,44

Personnel Costs

Up until 1999, reserves for paid vacation and leave not taken were recorded in the balance she<under Reserves for contingencies and losses and the charge in Charge to operating provisions. Thipresentation was changed in the 2000 financial statements. Reserves for paid vacation and leave not take

70

re now recorded in Operating liabilities in the balance sheet and the charge in Personnel costs in theicome statement.

Reserves booked in respect of the early departure of employees (pre-retirement leave, progressiveîrmination of activities, lay-off allowances) were until 31st December, 1999 recorded in the balancefleet under Reserves for contingencies and losses and the charge in Exceptional items. This presentation'as amended at the 2000 year-end. Charges relating to the early departure of employees are nowîcorded in Personnel costs in the income statement and Operating liabilities in the balance sheet.

These changes impacted on the financial statement presentation as follows:

1999 19992000 Pro forma Published

•alance sheetleserves for contingencies and losses 1,384 1,384 1,614Derating liabilities 8,887 8,500 5,914ncome statement'ersonnel costs (8,602) (8,183)(1) (8,146))epreciation, amortization and provisions, net (1,192) (1,195) (1,185)íet operating income 408 412(1) 459exceptional items 46 37 (4)

Jote:

L) Including the reclassification of employee profit-sharing of EUR 6 million within Personnel costs

.ease Finance Contracts

Sale and lease-back agreements include, from signature, the set-up of guarantee deposits.

These deposits and the related capitalized interest are progressively retroceded to the lessee overhe term of the agreement in the form of lease installment reductions. The residual balance on expiry ofhe contract is deducted from the purchase option exercise price.

Up until 31st December, 1999, these guarantee deposits were recorded within Other long-termnvestments (in the amount of EUR 713 million). Starting from fiscal year 2000, the borrowing is^resented net of deposits.

The balance sheet impact of this change is as follows:

1999 19992000 Pro forma Published

Long-term investments 823 849 1,562Borrowings 25,728 28,002 28,715

Changes in Group Structure

A list of the main companies included in the scope of consolidation is presented in Note 33.

» Acquisitions/entries into the scope of consolidation

Following the acquisition in November 1999 of a 17.9 per cent, stake in the common stock of VIAGTI, SNCF Group purchased a further 12.6 per cent, stake in VIA GTI in 2000, bringing itspercentage holding to 30.5 per cent, and transferred its interest in Cariane SA to VIA GTI witheffect from December 30, 2000. Following these transactions, SNCF Group now holds a 43.5 percent, stake in the new Via Cariane entity.

Via Cariane is equity accounted as of December 31, 2000.

SNCF Group increased its stake in the Suisse Group Ermewa from 22.46 per cent, to 44.9 per cent,on 1st July, 2000. This sub-group is equity accounted as of 31st December, 1999 and 2000.

Following the acquisition by SNCF of the entire common stock of SFCI in 2000, this company isfully consolidated in fiscal year 2000.

As part of the reorganization of Sernam, the Group created a wholly-owned subsidiary (SCSSernam) which took over the operation of parcel delivery activities from 1st February, 2000.

71

• Disposals/removals from the scope of consolidation

The Geodis sub-group withdrew from the "parcel" sector by selling Extand to the UK Post Office iMay 2000 for a consideration of EUR 108.

In July 2000, SNCF sold 80 per cent, of its stake in France Rail Publicité for a consideration (EUR 154 million.

The companies sold made the following contributions to revenues in 1999:

Extand (202)France Rail Publicité (93)

Total (295)

3. Accounting Policies

Presentation of the Financial Statements in Euros

The consolidated financial statements were prepared in French francs and translated into eurothe official exchange rate set on 31st December, 1998 of 1 euro equal to 6.55957 French francs.

Consolidation PolicyCompanies over which SNCF exercises exclusive control, directly or indirectly, are ful

consolidated.

Companies over which control is exercised jointly with a limited number of stockholders aconsolidated on a proportional basis.

Companies which the Group does not control but over which it exercise significant influence aequity accounted. Significant influence is deemed to exist when the Group holds a percentage interest20 per cent, or more.

Companies over which the Group exercises control or significant influence but which are not, aswhole, material to the consolidated financial statements are excluded from the scope of consolidation

The SICF and SOCRIF sub-groups, comprising HLM low-rental housing companies, are n>consolidated due to the regulatory restrictions applicable to HLM companies (see Note 8).

The financial statements of consolidated and equity accounted companies are adjustedaccordance with Group accounting policies.

The financial statements of all companies included in the scope of consolidation are drawn up31st December, 2000 (except for the Financière Systra financial statements drawn up to September 3(

Translation of Foreign Company Financial StatementsThe financial statements of foreign subsidiaries are translated into French francs using the closii

rate of exchange, method:

• balance sheet accounts are translated at the year-end exchange rate,

• income statement items are translated at the average annual exchange rate,

• translation differences arising on the retranslation of opening balance sheet items (movernebetween opening and closing exchange rates) and income statement items (movement betwe<average and closing exchange rates) are taken to Translation reserves in Consolidated stockholde:equity.

Translation of Foreign Currency TransactionsForeign-currency denominated transactions are translated at the exchange rate prevailing at t:

transaction date or at the appropriate hedge rate.

Foreign-currency denominated assets and liabilities are valued at the closing rate of exchange or tiappropriate hedge rate and any gains or losses arising taken to the income statement.

72

atement of CashflowsThe Statement of Cashflows is prepared using the indirect method which involves adjusting

impany net income for non-cash income and expense items in order to determine Cashflow fromDerations.

The cash balance presented in the Statement comprises cash and cash equivalents, marketablecurities, deposits and cash borrowings with an initial maturity of three months or less.

oodwill

Up until 31st December, 1999, the difference on consolidation recognized on the acquisition of anvestment represented the difference between the acquisition cost of the investment and the relevantlare in adjusted stockholders' equity of the company acquired. The residual difference not allocated tojlance sheet items was recorded in balance sheet assets within Goodwill on consolidated investments.

As from 1st January, 2000, the difference between the acquisition cost of the investment and the fairilue of identifiable assets and liabilities as of the acquisition date is recorded as goodwill. Operating;sets are stated at their carrying value. Assets not intended for use in operations are stated at theiritimated market value as of the acquisition date or, in the absence of a market value, at their expected;alizable value.

Pursuant to the option offered by Regulation 99-02, acquisitions prior to 1st January, 2000 have notsen adjusted in accordance with the new valuation rules.

Positive goodwill balances are recorded in consolidated assets and amortized over a periodsnerally not exceeding 20 years.

Negative goodwill balances are recorded in Reserves for contingencies and losses in the balanceleet and released to income in accordance with the assumptions and objectives set at the time of the:quisition.

itangible Assets

Preliminary expenses are amortized in full in the year incurred.

Software is amortized over a period of 1 to 5 years, depending on its forecast economic life.

Purchased goodwill and market share is amortized over a period not exceeding 20 years,ommencing the date of acquisition.

Assets are valued using methods specific to each category and enabling value movements over time3 be monitored. The methods adopted refer to one or more physical or financial indicators enabling suchalues to be monitored on a regular basis.

An impairment reserve is booked when the market value of such assets is less than their, net bookalue.

Tangible AssetsGroup tangible assets include assets made available by the French State, assets owned outright and

ssets held under lease finance agreements.

'ublic Domain Real Estate Assets made available by the French State

The French Orientation Law on Domestic Transport (LOTI) lays down the terms of possession ofissets entrusted to SNCF.

On the creation of the industrial and commercial public institution SNCF on 1st January, 1983, theeal estate assets previously given under concession to the semi-public limited liability company which itucceeded, were appropriated to it.

These assets made available by the French State, without transfer of title, are recorded in the GroupBalance sheet in the relevant tangible asset accounts, to enable an economic assessment of Groupperformance.

Subject to legal provisions applicable to infrastructures deemed of general interest or public utility,;he parent company exercises full management powers over all real estate assets entrusted to it orpurchased by it.

73

Real estate assets held by the public institution, no longer used in the performance of its activities ewhich are part of its private domain, may be allocated to another purpose or sold by the public institutiofor profit.

Owned Assets

Tangible assets owned outright are recorded in consolidated assets at acquisition or production cos

Production cost comprises the cost of raw materials and labor used to manufacture the asset:including that of purchased spare parts. Interest costs are not capitalized.

The cost of overhauls performed at the end of the technical life of rolling stock, together wilrefurbishment and transformation costs, are capitalized in assets.

All costs incurred during the life of equipment (repair work on faulty spare parts and replacemerof unusable and missing parts) are recorded as operating expenses.

Tangible assets are depreciated over their expected useful life, primarily using the straight-linmethod.

Depreciation Period

Tangible assets are depreciated over the following periods:• Buildings 10 to 50 years• Industrial plant and machinery (excluding rolling stock) 3 to 20 years

• Overland transport equipment:- TGV high-speed trains 15 to 30 years- Electric locomotives 25 to 30 years- Diesel locomotives 20 to 30 years- Motorized carriages 15 to 30 years- Passenger carriages 20 years- Freight cars 7 to 15 years- Tractors, trailers (trucks) 4 to 10 years- Buses 8 years

• Rolling stock overhaul, refurbishment and transformation costs 7 years

• Ferries 8 years

• Other tangible assets 3 to 5 years

Depreciation charges relating to the assets held under concession agreements by the Group, whicwill be returned to the local and administrative authorities free of charge at the end of the concessio;period are recorded within Reserves for contingencies and losses.

Long-term Investments

Investments in unconsolidated companies and other long-term investments are recorded in thbalance sheet at acquisition cost net of any impairment reserves. Impairment reserves are booked whethe fair value of an investment is less than its acquisition cost.

The fair value of an investment is its carrying value to the Group. This is determined taking accounof the Group's share in net equity (potentially revalued), future profitability and, for listed companie:stock market trends.

Inventory

Inventory is valued at the lower of cost price and net realizable value. Cost price is equal Iacquisition or purchase cost. Purchase cost includes both direct and indirect production expenses.

Cost price is calculated using the weighted average cost method.

Inventory reserves are booked based on the age of items.

Operating receivablesReceivables are stated at face value. An impairment reserve is booked when a potential risk of non

recovery arises. This reserve is determined based on an individual or statistical appraisal of non-recover;risk.

74

Marketable SecuritiesMarketable securities are recorded in the balance sheet at the lower of acquisition cost and market

i'alue. The market value of listed shares is equal to the stock market price on the last day of the fiscal/ear.

Bonds are recorded on the acquisition date at face value adjusted for any premiums or discounts,rhe year-end value includes any accrued interest receivable.

Shares in French mutual funds (SICAV) are recorded at acquisition cost net of purchase charges.An impairment reserve is booked at the year-end when the net asset value is less than the acquisition:ost.

Marketable debt securities are recorded at acquisition cost and interest taken to financial income oni time-apportioned basis.

Derivative InstrumentsDerivative instruments traded by SNCF Group to manage currency, interest rate and commodity

isks are recorded off-balance sheet (see Note 18).

All hedging instruments used by the Group to manage long-term commitments are allocated, as a;eneral rule, to borrowings on issue or to existing borrowings.

» Currency derivatives

The Group trades on the forex market to hedge foreign-currency denominated receipts andpayments linked to debt servicing and commercial activities. The Group uses futures and forwardcontracts, swaps and forex options.

Forex option premiums received or paid are recognized in full to the income statement in the yearof exercise.

> Interest rate derivatives

Interest Rate Swaps and Swaptions

The Group uses interest rate swaps and swaptions to hedge loan issues and manage its existing debt.

Option premiums received or paid are recognized in full in the income statement in the year ofexercise.

Whenever possible, the Group seeks to cancel existing contracts in order to reduce the number ofcontracts covering the same loan and thereby reduce counterparty risk and commitment levels.Cash balances received or paid on the conclusion or cancellation of swaps are deferred over theterm of the underlying commitment. However, when a debt restructuring operation calls for theimplementation of options, the cash balance resulting from the cancellation of swaps following theexercise of these options is taken directly to the income statement, provided such cancellation isdesigned to optimize implementation of the strategy.

Interest Rate Futures and Forward Contracts

The Group may be called on to trade on interest rate forward markets, notably when preparing aloan issue or in order to manage interest-rate exposure on floating-rate assets and liabilities.Transactions are performed on both organized markets and over-the-counter.

Income and expenses on firm futures and forward contracts are deferred over the term of theunderlying debt.

Option premiums received and paid are recognized in full in the year of exercise.

> Commodity Derivative Instruments

In order to optimize the average cost of fuel supplies, the Group trades in the petroleum hedgemarkets. Transactions traded primarily consist of swaps and swaptions.

Option premiums received and paid are recognized in full in the year of exercise.

75

Issue Premiums, Discounts and Expenses, Loan Redemption Premiums

When an issue is performed at below par, the discount is deducted from the liability accountExpenses are recorded in deferred charges in balance sheet assets.

Discounts and expenses are released to the income statement on a straight-line basis over the loaterm.

When an issue is performed at above par, the issue premium is allocated in priority to thamortization of issue expenses; the residual balance represents:

• deferred income when the premium exceeds issue expenses,

• offset issue expenses, when the premium is less than issue expenses.

The residual balance is released to the income statement over the loan term.

Investment SubsidiesThe Group receives investment subsidies in the form of third party financing, primarily fro

regional authorities.

Investment subsidies are recorded as deferred income and released to operating income (deduct«from Depreciation, amortization and provisions) over the estimated economic life of the relevant assei

Lease Financing

Leased assets are recorded as purchases when the contract terms and conditions correspond to leafinancing arrangements. Lease finance agreements are contracts whereby the lessor transfers to the lessithe right to use an asset for a given period in exchange for payment; the lessor transfers all benefits airisks inherent to ownership of the asset.

Such assets are recorded in assets at historical cost and depreciated over the same period as similassets owned outright or public domain real estate assets made available by the French State.

Lease agreements not having the characteristics of lease financing arrangements are recordedoperating leases. Only the lease installments are taken to income.

Sale and Lease-Back Transactions and Equivalent

Sales and lease-back transactions

Proceeds from the sale of assets to a lessor under a lease finance arrangement are cancelled in nincome in the year of the transaction. Capital gains are released to the income statement in line with assdepreciation charges.

Other TransactionsIn addition, certain financial arrangements concern existing lease finance agreements.

As the existing equipment financing structure is not altered, the proceeds of such transactions arecognized in net financial income on signature of the agreements.

Deferred TaxThe Group recognizes deferred tax on all temporary differences between the tax and book values

assets and liabilities in the consolidated balance sheet.

Deferred tax is recorded using the liability method, applying the most recently voted tax rate at tyear end applicable to the period in which the temporary differences are expected to reverse.

Deferred tax assets in respect of temporary differences and tax losses or credits carried forward arecognized when recovery is deemed probable.

Deferred tax balances are discounted to present value when the impact of such discountingmaterial and the reversal schedule for temporary differences and tax losses can be drawn up reliably

76

Reserves for Contingencies and Losses

Reserves for Major Repairs

These reserves are intended to cover foreseeable, material costs, not incurred each year and whichirimarily relate to freight cars.

Reserves for Environmental RisksThe Group provides for environmental risks when the realization of the risk is deemed probable.

Reserves for Disputes and LitigationThe Group is involved in a certain number of disputes and litigation arising in the normal course of

ts activities and notably:

• performance guarantees received from companies supplying construction work,

> guarantees granted to clients in the freight transportation sector covering incidents arising duringtransport.

!uch disputes and litigation are provided based on an assessment of the related risk.

Restructuring Reserves

The cost of restructuring measures is provided in full in the current year when such measures have)een decided, in principle, and announced prior to accounts closure. Restructuring costs primarily consist)f employee relocation, training and departure costs and the cost of writing-off non-current assets,nventory and other assets.

Suro Reserves

Non-capitalizable costs generated by the introduction of the euro and meeting the conditionsletailed in Opinion n° 9701 issued by the French National Accounting Association ("Conseil National dea Comptabilité") Urgent Issues Taskforce on 24th January, 1997, are provided in the accounts.

Detailed figures are presented in Note 15.

>elf-Insurance Costs

Up through 1999, the parent company provided its own insurance against the majority of itsjperating risks. In 2000, it took out insurance policies covering risks in excess of an initial level covered3y self-insurance. Insurance premiums are expensed in the income statement.

Revenue and other Income RecognitionTransport Activities (Passengers, Freight)

Revenue is recognized based on the effective transportation of passengers and freight.

Revenue recognized on the issue of a passenger transport ticket is adjusted at the period end forickets issued but not used (taken to Deferred income).

Contributions from the French State and Regional AuthoritiesThese contributions comprise price subsidies covering socially-motivated fare reductions introduced

)y the French State, contributions remunerating global or specific services and subsidies providingspecific aids for development.

As from 1st January, 2000, contributions from the French State and Regional Authorities•emunerating either global or specific services are recorded within Revenue (see Note 2 Changes inpresentation).

Engineering and Contracting Services performed by the GroupSub-contracting and project leader work performed by the Group is recognized on a percentage

completion basis.

77

Maintenance

Maintenance income and income from the operation of the rail network is recognized in accordancewith the contract negotiated with the network owner ("RFF").

Research and Development Costs

Research and development costs are expensed in the year incurred.

Ordinary and Exceptional ActivitiesNet income from ordinary activities includes all recurring income and expense items directly

relating to the operating activities of the Group.

Exceptional income and expenses comprise material items which, due to their nature, unusualcharacter or non-recurrence cannot be considered inherent to the operating activities of the Group.

Division and Geographical Segment Information

Business SegmentsAround its core businesses of passenger and freight transport and the delegated management of the

infrastructure, SNCF has developed a number of activities performed by subsidiaries.

These primarily enrich, complement and extend the activities of the parent company in threeoperating divisions:

• passenger transport,

• freight,

• management of the railway infrastructure and enhancement of assets and know-how: LeveragingSNCF's assets and know-how.

Segment IndicatorsThe business segment indicators are:

• Revenue,

• Gross Operating Income,

• Net Operating Income.

Items common to the different divisions, SNCF Participations holding company costs and resultsspecific to services rendered by the parent company (Traction, Equipment), are allocated to the operatingdivisions based on their respective contributions to Revenue.

The accounting methods adopted by each operating division are identical to those used in thepreparation of the consolidated financial statements.

Inter-Division Transactions

All material transactions between operating divisions are eliminated and recorded in the line"Elimination of inter-division transactions".

Geographical AreasAs activities are essentially carried out in France, the geographical areas presented are France and

Rest of the world. The latter category encompasses all activities performed abroad and the exportactivities of French Group companies.

Employee BenefitsDefined employee benefits (retirement and medical care) are estimated in accordance with

prevailing actuarial standards. These commitments are not accrued but recorded off-balance sheet.

Commitments in respect of employees of companies included in the scope of consolidation in fiscalyear 2000 are accrued.

Accounting Treatment of Employee-Related Service Accounts

Pursuant to the French Act of 21st July, 1909, the employee-related services carried out by theparent company have no legal status but have been granted accounting and financial autonomy.

In order to ensure the comparability of the Group's financial statements with other industrial andcommercial groups, total asset and liability accounts relating to these employee-related parent companyservices are presented in the Group balance sheet under the headings "Special debt account and

78

mployee-related benefits service account assets" and "Special debt account and employee-relatedBenefits service account liabilities" respectively.

The financial statements of these employee-related services are presented in Note 31.

)ebt Transferred to the Special Debt Account ("SAAD")In accordance with the corporate plan ("contrat de plan") signed by the French State and the

•arent company in 1990, a Special Debt Account was set up on 1st January, 1991. This account has noidependent legal status, although separate accounting records are kept by the parent company.

The role of this account is to isolate part of the SNCF debt, in respect of which interest and capitallayments are essentially made by the French State. Debt transferred to the Special Debt Accountemains there until extinguished.

V total of EUR 10.7 billion has been transferred to the Special Debt Account:

EUR 5.8 billion (EUR 5.9 billion face value) on creation on 1st January, 1991,

net liabilities of EUR 4.4 billion on 1st January, 1997 (EUR 4.4 billion face value),

EUR 0.6 billion on 1st January, 1999 (EUR 0.61 billion face value) accompanied by an amendmentto its structure by loan substitution.

Special Debt Account resources consist of an annual contribution from the French State of EUR1.677 billion, paid in equal quarterly installments and an annual payment by the parent company of EUR7.8 million, paid mid-year.

The excess of the French State contribution over net annual expenses is capitalized in the SpecialDebt Account. The parent company contribution is recorded in net financial income.

When loan repayments allocated to the Special Debt Account exceed the debt repayment capacityif the year, the shortfall is covered by interim financing deducted from French franc financing (now:uro), directly or after swap contracts, secured by the parent company on the markets during the year.

As the respective balances were not of identical composition at the outset, nor were they expectedo be during the life of the Special Debt Account, the decision was taken to equalize the financial charges>orne by the two accounting structures once a year as follows:

> the effective charge rate borne by the debt allocated to the Special Debt Account and the debtretained by the parent company and the effective rate borne by the overall debt is calculated at eachyear end,

• the charge rates borne by Euro zone currency denominated debt recorded in the Special DebtAccount and that retained by the parent company are equalized, such that each entity bears theoverall charge rate. An equalization payment is calculated and taken to net financial income for theyear. Between 1999 and 2002 inclusive, the equalization payment owed by the parent company issubject to a reduction of EUR 84.8 million.

Total Special Debt Account assets and liabilities are presented in the Group balance sheet underhe headings "Special Debt Account Assets" and "Special Debt Account Liabilities" respectively (see

31).

1. Goodwill2000 1999

jross value ................................................................................................................. 342 230\mortization .............................................................................................................. (86) (51)«Jet value ...................................... . ............................................................................. 256 179

The principal goodwill balances, net of amortization, concern:

» the Geodis sub-group in the amount of EUR 73 million as of 31st December, 2000 (EUR 88 millionas of 31st December, 1999),

> the VIA Cariane sub-group, whose entry into the scope of consolidation generated goodwill ofEUR 112 million as of 31st December, 2000.

79

5. Intangible Assets

Gross value:Concessions, patents and similar rights.Purchased goodwillOther intangible assets

Gross value

Amortization:Concessions, patents and similar rights.Purchased goodwillOther intangible assets

Amortization.

Net value

2000

1162679

221

104

117

1999

912472

187

65

122

Movemer,

2

828

14 .

377

21

4

(

6. Tangible Assets

Gross valueLandBuildingsIndustrial and technicalplantTransport equipment^...Other tangible assetsAssets under construction

Total gross valueDepreciationLandBuildingsIndustrial and technicalplantTransport equipment(1)...Other tangible assetsAssets under construction

Total depreciation

Net value

Changes inAdditions/

1999

1,3846,118

1,83416,016

672827

charges

13203

214451113319

Disposals/releases

(16)(36)

(16)(81)(23)(20)

Groupstructure

1170

(22)(165)(157)

17

Other

(9)16

32189(36)(28)

200

1,376,47

2,0416,41

561,11

26,851 1,313 (192) (150) 164 27,98

422,360

9389,2184582

13,018

4151

148724697

1,103

0(16)

(14)(35)(19)0

(84)

0100

(17)(117)(142)(1)

(177)

01

101130

25

42,59

1,069,7937

13,88

13,833 210 (108) 27 139 14,10

Note:(1) Work performed in 2000 on the accounting treatment of complex lease finance transactions (Eurofima, Pickle Lease, Sale an

lease-back, etc.) resulted in a EUR 1.11 billion «classification between gross value and depreciation, with no impact on thIncome Statement.

Changes in Group structure primarily consisted of the entry into the scope of consolidation of SFCpartially offset by the equity accounting of Cariane.

Other tangible asset movements include:

• adjustments to lease finance agreements, notably concerning Regional Express Train (TERactivities. These adjustments increased net assets and borrowings by EUR 143 million. The impacon opening stockholders' equity is not material,

• negative exchange rate movements of EUR 4 million.

80

Assets recorded in tangible assets and held under lease finance agreements break down as follows:

Railway equipment3uildingsDther non-current assets.

2000Grossvalue3,420

25760

Deprec.2,335

7746

1999

Net value Net value1,085 1,400

180 20714 17

Total 3,737 2,458 1,279 1,624

Parent Company Fixed Assets RegisterThe parent company fixed assets register, excluding railway equipment, is currently being reviewed.

3iven the magnitude of this task, it will take several years to complete.

Since 1997, the allocation of certain assets between the parent company and Réseau Ferré deFrance has required clarification, due to differences in the interpretation of Law n° 97-135 of 02/13/97 and.ts application decrees.

In 1999, the National Commission of Asset Allocation launched an analysis of the four main areasDÍ disagreement: land used for freight purposes (CM4 lots), housing, passenger concourses in stations and:he volume division of buildings. These assets are currently included in Group fixed assets. Arbitrationrulings have been issued and further rulings are expected over the coming years. To date, no financial:ompensation mechanism has been approved.

7. Reseau Ferre de France Receivable

Article 7 of the Law of February 13,1997 creating Réseau Ferré de France (RFF), provides for thetransfer of a liability of EUR 20.5 billion to Réseau Ferré de France in consideration for the transfer ofinfrastructure assets on January 1, 1997.

This transfer resulted in the recognition in balance sheet assets of a RFF receivable. Companyliabilities remained unchanged.

The RFF receivable was constructed line-by-line to provide it with a maturity, currency and interestrate structure identical in all manners to the company debt of EUR 30.3 billion as of December 31,1996,after swap contracts.

The exchange rates initially adopted for foreign currencies included in the receivable were rates asof December 31, 1996.

Deferred income and expenses representing premiums and issue costs and income and expenses onswap contracts were also transferred, materialized by a cash payment. This payment is recorded in thecompany accounts in the form of deferred income and released to the income statement in line with thematurities of the corresponding transactions.

An agreement signed by the two institutions evidences the RFF receivable.

Debt Maturities after Adjustment for Derivative Instruments

2000 1999Maturing within:Less than 1 year 2,009 1,4941 to 5 years 7,086 7,674More than 5 years 6,598 8,403

Total 15,693 17,571

Accrued interest receivable 562 605Total 16,255 18,176

81

Currency Structure after Adjustment for Derivative Instruments and excluding Accrued InterestReceivable (after Swaps)

2000 199iFrench francs 13,559 15,22(Other Euro zone currencies 444 56(Swiss francs 1,423 1,67'Pound sterling 267 10:

Total 15,693 17,57:

Interest Rate Structure after Adjustment for Derivative Instruments and Excluding Accrued InterestReceivable

2000 199'.Fixed rate 12,312 14,3»Floating rate 3,381 3,18.

Total 15,693 17,57

8. Other Long-term Investments

2000 1999 199'.Amortization pro forma publishei

andGross reserves Net Net Ne

Unconsolidated investments 381 37. 344 379 37!Loans to unconsolidatedinvestments 226 1 225 256 25«Loans 208 5 203 189 18!Other long-term investments 63 11 51 25 73:

Total 878 54 823 849 1,56:

Unconsolidated investments break down as follows:

Stock-% holders' Net NBV o_

interest equity income investmenSICF 100.00 475 12 30'SOCRIF 99.77 84 5 (Other unconsolidated investments - - - 3 " .

Total 34^

The SICF and SOCRIF sub-groups are not consolidated due to regulatory restrictions regarding theappropriation of earnings applicable to HLM (low-rental housing limited liability companies):

• the liquidation surplus which may be distributed to stockholders is limited to 50 per cent, of the paivalue of securities held,

• distributable earnings are limited to 5 per cent, of common stock each year.

82

Balance sheets as of December 31, 2000 were as follows (in EUR millions):

SICF sub-group

Net non-current assets 1,870

Net current assets. 226

67

Total Assets 2,163

Prepaid expenses and deferred charges

SOCRIF sub-groupNet non-current assets.

Net current assets

166

14

Prepaid expenses and deferred charges 1

Total Assets 181

9. Equity Affiliates

EurofimaErmewa SA SuisseGeodis Group contribution.Via Cariane Group(1^ ,Systra Group ,TransfesaErmewaSNCMSTVA GroupFRPGroup(1)

NovatransCegetel 7Cegetel Entreprises(2)

Other investments

Total.

Stockholders' equity 475(including net income for the year ofEUR 12 million)Reserves for contingencies and losses.. 112Liabilities 1,430Accruals and deferred income 146

Total Liabilities & SHs' equity 2,163

Stockholders' equity(including net income for the year ofEUR 30 million)

84

ReservesLiabilitie:Accruals

Total Lia

% interest24.9044.91

43.2635.0716.3030.7520.00

20.0039.1010.0010.00

-

-

for contingencies and lossessand deferred i

ibilities & SHs

2000Net

income1

(2)50—26

(2)012

30951

145

income

' equity

295

181

1999published

Investment Investment14270665727201711644

NM—2

426

1313560

—271812135-2--

23

326

Notes:(1) Groups equity accounted as of 12/31/00.(2) Negative contribution to stockholders' equity (EUR 3 million reserve for subsidiary risks as of 12/31/00).

83

Movements in investments in equity affiliates break down as follows:

2000 publishiOpening balanceShare in net incomeTransfer to equity affiliates and other account reclassificationsChanges in Group structure^Movement in share of negative net equity (Reserves for contingencies andlosses)(2)

Dividends paidExchange rate fluctuationsAcquisitions and common stock increases

Closing balance

326 2(146 ('•(21)99

(125)(9)91

426 3:

Notes:(1) Fiscal year 2000 movements primarily concern Via Cariane (EUR 57 million), Ermewa SA Suisse (EUR 37 million) and Fl

(EUR 3 million).(2) Negative contributions concern Cegetel 7 and Cegetel Entreprises; the balancing entry is recorded in Reserves l

contingencies and losses (Note 15).

10. Inventory and Work-in-process

Raw materialsOther suppliesProduction work-in-process

Total

Gross5476652

665

2000Reserves

1982

200

Net3496452

465

19'

3'

4.

11. Operating Receivables

Trade receivables and relatedaccountsPayments on account of ordersEmployee-related receivablesAmounts receivable from theFrench StateOther operating receivablesPrepaid expenses and deferredcharges

Total

Gross

3,6953130

1,209322

729

6,016

2000 Pro forma publish.Reserves Net Net A

141 3,554 3,259 3,231 2330 25

1,209 1,345 1,3200 122 550 5.

729 826

341 5,675 6,028 5,2«

Notes:(1) With effect from fiscal year 2000, Regulation 99-02 requires the reclassification of prepayment and accrual accounts will

operating receivables (See Note 2).

84

12. Cash and cash equivalents12.31.2000 12.31.1999

Initial maturities of more than three months and/or exposed to interest-rateriskFrench and foreign bondsMedium-term marketable debt instruments

Initial maturities of less than three months, not exposed to interest-rate riskMarketable debt instrumentsFrench mutual funds (SICAV)Marketable debt instrument repurchase agreementsForeign currency investments

Acrued interest receivable

Cash in hand and at bank

Total cash and cash equivalents

11310310

1,2346914932525

1

222

1,570

99990

1,054662318

074

23

303

1479

Only marketable securities with an initial maturity of three months or less fall within the definitionof Cash for the purposes of the Consolidated Statement of Cashflows.

13. Stockholders' equityMovements in stockholders' equity (Group share) break down as follows:

As of December 31, 1998Exchange rate fluctuationsTransfer to Special Debt Account

OtherAs of December 31, 1999 :Exchange rate fluctuationsConsolidated net income - Group shareOtherAs of December 31, 2000

14. Minority Interest

As of January 1,Dividend distributionExchange rate fluctuationsChanges in group structureMinority interests share in net incomeOtherAs of December 31,

Reservesand net

Common income forstock the year4,271 (760)

610<;i

14,271 (98)

177(10)

4,271 69

Translationdifferences

(1)5

4 '7

11

2000213

(7)1

(8)119(17)301

TotalGroupshare3,510

5610

<NI1

4,1777

177(10)

4,351

1999195

(8)2

32(11)

3213

The minority interest share in fiscal year 2000 net income is primarily attributable to debt waiversgranted by Cegetel to Télécom Développement subsidiaries (Cegetel 7 and Cegetel Entreprises).

85

15. Reserves for Contingencies and Losses

As indicated in Note 2, it was decided in 2000 to transfer Reserves for paid vacation and leave notaken and Reserves for the early departure of employees from Reserves for contingencies and losses t<Accrued expenses.

Reserves for contingencies and losses break down as follows:

7992000 publishe,

Employee early departure - 61

Paid vacation and leave not taken - l?iSpin-off of SERNAM(1) 271 28'Tax, social security and customs risks(2) 276 22.Environmental risks 141 11Major repairs(3) 129 10Litigation and disputes 144 11Compensation for work-related injuries and miscellaneous 107 9.Restructuring costs 54 5Negative goodwill(4) 16 12.Other reserves for contingencies and losses including the Euro reserve 246 26

Total : 1,384 1,61

Notes:(1) All consequences of the Sernam restructuring and its future take-over by Geodis have been taken into account as c

December 31, 2000. The reserve includes the impact of SCS Sernam net recapitalization commitments vis-a-vis Geodi:employee relocation costs and asset non-values.

(2) Tax and social security inspections were performed by the French Authorities at the parent company and penalties issueiAccepted penalties were expensed in the fiscal year. Conversely, contested penalties were provided in the interests cprudence. Tax risks identified and provided as of December 31, 2000 primarily relate to:• VAT on onboard catering EUR 57 million• 1991 to 1993 business tax rebates repayable EUR 115 million• Social security disputes EUR 51 millionIncome tax penalties were not provided as their impact is limited to a reduction in tax losses carried forward.

(3) Includes depreciation charges relating to assets held under concession agreements and reserves for major repairs in respect oassets held under concession by the SHEM Group in the amount of EUR 54 million as of December 31,2000 (EUR 52 millioias of December 31, 1999) and reserves for major repair work on freight cars.

(4) Includes negative investments in equity affiliates. Movements during the year are the result of an improvement in th>financial position of Télécom Développement subsidiaries (EUR 3 million in 2000 compared to EUR 128 million in 1999)

16. Employee BenefitsEmployee benefits (retirement and medical care and similar commitments) calculated using th<

projected benefit valuation method are as follows:

Commitments Commitmentas of as o

December 31, December 312000 799!

Employee pensions 3,010 2,331Medical care 1,055 1,04!Compensation for work-related injuries

(retired employees and widows) 460 46(.

Total off-balance sheet commitments 4,525 3,84.'

86

The following valuation assumptions were adopted:

let discount rate 4% above inflation.ife expectancy table SNCF male table plus INSEE 94-96 table up to 55

years and TC8890 after 100 yearslate of salary increase 1% above inflationlate of increase in pensions and medical careenefits 1% above inflation

Retirement Benefit CommitmentsRetirement benefit commitments primarily result from the Law of July 21,1909 defining the special

egime applicable to SNCF employees and Article 30 of the SNCF terms of reference defining, with effectrom January 1, 1970, the share of such costs borne by the French State.

In return for the payment of standard contributions, the French State finances the SNCF employeeetirement benefit scheme in the amount of a "standard" benefits scheme. Standard contribution levelsmd the benchmark scheme were reviewed regularly until 1990. The Decree of February 27, 1991 set thetandard contribution level at 36.29 per cent, of total payroll costs, broken down between employee:ontributions of 7.85 per cent, and employer contributions of 28.44 per cent.

All benefits specific to the SNCF scheme, created in 1990, compared with the benchmark scheme,ire financed by SNCF and its employees. The different benefits relate to the definition of the pension>ase (successive integration of residence compensation percentages, implementation of the newemuneration system) and an increase in the minimum pension level.

• Medical Care and Other CommitmentsThe parent company finances medical care benefits provided to active and retired employees itself,

. 'ia the SNCF medical care fund and the SNCF senior executive medical care fund.

Benefits include the reimbursement of medical costs, temporary accommodation allowances,etirement allowances and death allowances. Part of these guarantees are covered by the nationaledistribution mechanism under the Social Security healthcare regime.

As such, only additional healthcare coverage, temporary accommodation allowances, retirementillowances and death allowances are borne by the parent company. These constitute the SNCF employeemedical care regime, financed by employee and employer contributions over and above contributions to:he national redistribution mechanism and benefiting active and retired employees.

> Compensation for Work-Related InjuriesThe parent company finances itself compensation for work-related injuries owed to active and

retired employees.

Payments made to retired employees and surviving spouses are viewed by SNCF as additionalpensions. As such, the probable present value of these additional pension payments, discounted at a rateof 4 per cent., is included in off-balance sheet commitments.

Annual compensation for work-related injuries owed to active employees are viewed as additionalremuneration. A reserve is booked to cover the probable present value of such payments, discounted at arate of 4 per cent. (EUR 66 million as of December 31, 2000).

2000 expense in respect of retirement benefit and medical care commitments

The increase in commitments during fiscal year 2000 was the result of:

• standard calculation:

- financial cost linked to discounting factors,

- cost of entitlement vested in the year due to the acquisition of an additional year of service,

- payment of services,

- payment of employee contributions,

87

• changes during the year:

scheme amendments (such as the inclusion of residence compensation percentages in thpension base)

actuarial differences resulting from changes in assumptions or relating to differences betweeassumptions made at the beginning of the year and their effective realization during the yea

The following amendments were taken into account in the 2000 pension cost:

• amendment to Article 14, paragraph 9 of the pension regulations in 1999 (this amendment was n<taken into account at the end of 1999 as its impact was not material and difficult to measure as thchange took place mid-year),

• increase in the minimum pension level during fiscal year 2000,

• inclusion of residence compensation percentages in the pension base during fiscal year 2000.

These movements can be broken down as follows:

Medic,care .

Pension othtCommitments at the end of 1999 2,330 1,0¿Financial cost 128 iCost of vested entitlement 41 ]Payments made (193) (£Employee contributions 79 ]Amendments : .• 550Actuarial differences 74

Commitments at the end of 2000 3,009 l,0f

Simulated Application of the preferred method recommended by Regulation 99.02.

The provision of all commitments as required by the preferred method recommended hRegulation 99-02 on consolidation rules and methods, would have the following impact on the SNCGroup financial statements:

Impact iEU.

millioReserves for contingencies and losses +4,32Stockholders' equity as of 01/01/2000(1) (3,842000 net income (4?Stockholders' equity as of 12/3172000 (4,32

Note:(1) Impact of change in method on stockholders' equity as of January 1, 2000.

The assumptions and methods adopted for the purposes of this simulation were as follows:

• amortization of the impact of amendments on entitlement not definitively vested, on a straight-liribasis over the average employment term within the Group, that is 13.5 years in the case of thpension scheme,

• spreading of actuarial differences resulting from changes in assumption and differences betweeassumptions made and their effective realization, in accordance with the corridor principle.

This method of amortizing actuarial differences involves the recognition of actuarial differenceonly when they exceed, in absolute value, 10 per cent, of the higher of commitment levels and the value <underlying financial assets, if any. The fraction exceeding this 10 per cent, limit is spread over the lilexpectancy of scheme beneficiaries, starting in the fiscal year following that in which the actuari;differences arise.

17. Loans and BorrowingsLoans and borrowings recorded in the balance sheet consist of long-term loans issued by the Group

(excluding the parent company Special Debt Account), liabilities relating to lease finance operationsentered into by the Group and cash borrowings.

Long-term borrowingsBond issuesOther loan-term borrowings.Accrued interest payableCash borrowingsTreasury notesEMTNCash securityOther borrowingsBank overdraftsAccrued interest payable

Liabilities excluding lease financing.

Lease finance liabilities....Lease finance liabilities....Accrued interest payable.

Loans and borrowings.

12.31.200019,73617,1381,935

6631,839

99622

3890

4302

21,575

4,1534,105

48

25,728

31.12.99pro forma

22,38519,0902,561

7341,688

807353289

0237

2

24,073

3,9293,875

54

28,002

12.31.1999published

22,38519,0902,561

7341,688

807353289

0237

2

24,073

4,6424,588

54

28,715

Borrowings guaranteed by the Group total EUR 11 million.

Long-Term BorrowingsMaturities of long-term borrowings, including lease finance liabilities, after adjustment for

derivative instruments.

12.31.1999 12.31.199912.31.2000 pro forma published

Maturing within 1 year 3,756 . 3,244 3,294Maturing within 1 to 5 years 10,239 12,405 12,776Maturing after 5 years 8,872 9,437 9,729Neutralization of swap contracts 342 450 450Neutralization of net Eurofima translation differences (31) (10) (10)Long-term borrowings excluding accrued interest 23,178 25,526 . 26,239Accrued interest payable 711 789 789Long-term borrowings 23,889 26,315 27,027

Currency structure of long-term borrowings, including lease finance liabilities, before adjustmentfor derivative instruments and excluding accrued interest payable.

12.31.1999 12.31.199912.31.2000 pro forma published

Euro 18,042 19,476 20,189Swiss franc 2,170 2,605 2,605US dollar 1,444 2,012 2,012Japanese yen 753 881 881Pound Sterling 533 324 324Other currencies 267 238 238Neutralization of Eurofima translation differences (31) (10) (10)Long-term borrowings excluding accrued interest payable 23,178 25,526 26,239

Currency structure of long-term borrowings, including lease finance liabilities, after adjustment forderivative instruments and excluding accrued interest payable.

89

12.31.1999 1231.19%12.31.2000 pro forma published

Euro 20,216 22,271 22,984Swiss franc 2,170 2,480 2,48CPound Sterling 285 130 13CJapanese Yen ! 187 195 19fOther -. 9 10 1CNeutralization of swap contracts 342 450 45(Neutralization of net Eurofima translation differences (31) (10) (1CLong-term borrowings excluding accrued interest payable 23,178 25,526 26,23S

Interest rate structure of long-term borrowings, including lease finance liabilities, after adjustmentfor derivative instruments and excluding accrued interest payable.

12.31.1999 12.31.199Í12.31.2000 pro forma publisher

Fixed rate 15,658 17,361 18,07¿Floating rate 7,209 7,725 7.72ÎNeutralization of swap contracts 342 450 45(Neutralization of net Eurofima translation differences (31) (10) (1CLong-term borrowings excluding accrued interest payable 23,178 25,526 26.23Í

Long-Term Borrowings Net of the Reseau Ferre de France (RFF) ReceivableThe structure of the RFF receivable is described in Note 7.

Maturities of net long-term borrowings, including lease finance liabilities, after adjustment foiderivative instruments.

12.31.1999 12.31.199Í12.31.2000 pro forma publisher

Maturing within 1 year 1,747 1,750 1.80CMaturing within 1 to 5 years 3,153 4,732 5,102Maturing after 5 years 2,274 1,034 1,326Neutralization of swap contracts 342 450 450Neutralization of net Eurofima translation differences (31) (10) (10Net Long-term borrowings excluding accrued interest 7,485 7,956 8,669Accrued interest payable 149 182 182Net Long-term borrowings..... 7,634 8,138 8,851

Currency structure of net long-term borrowings, including lease finance liabilities, after adjustmentfor derivative instruments and excluding accrued interest payable.

12.31.1999 12.31.199912.31.2000 pro forma published

Euro 6,213 6,480 7,193Swiss franc 747 803 803Japanese Yen 187 195 195Other 27 38 38Neutralization of swap contracts 342 450 450Neutralization of net Eurofima translation differences (31) (10) (10Net Long-term borrowings excluding accrued interest payable 7,485 7,956 8,669

Interest rate structure of net long-term borrowings, including lease finance liabilities, afteradjustment for derivative instruments and excluding accrued interest payable.

90

Fixed rateFloating rateNeutralization of swap contractsNeutralization of net Eurofima translation differencesNet Long-term borrowings excluding accrued interest payable

Maturities of Cash Borrowings

12.31.20005,0052,169

342(31)

7,485

12.31.1999pro forma

4,9382,578

450(10)

7,956

12.31.1999published

5,6512,578

450(10)

8,669

Initial maturity of 3 months or lessTreasury notesBank overdraftsCash securityInitial maturity of more than 3 months.EMTNCash securityOther borrowingsAccrued interest payableCash Borrowings

12.31.20001,80599643037934221002

1,839

12.31.19991,3228072372783663531102

1,688

Only cash borrowings with an initial maturity of three months or less fall within the definition ofCash for the purposes of the Consolidated Statement of Cashflows.

18. Derivative Instruments

Foreign Exchange InstrumentsCurrency Swaps

In order to reduce its exposure to exchange rate fluctuations on certain borrowings, the Groupenters into currency swaps. Such hedges are matched specifically against the corresponding borrowing.

The face amount of currency swaps as of December 31, 2000 is as follows:

DeutschmarkLuxembourg and Belgian franc-Italian lireSpanish pesetaEcuPound sterlingPound sterling ,Norwegian kroneDanish kroneSwiss francUS dollarUS dollarCanadian dollarHong Kong dollarJapanese yenJapanese yenSouth African randFrench franc

Commitments received(currency, in millions)

40010,300

486,85040,000

3858075

400400200

1,16118190

20059,30022,540

46473

Commitments given(in millions)

EUR 204EUR 261EUR 249EUR 245EUR 378EUR 132EUR 109EUR 50EUR 54

EUR 124EUR 1,026JPY 21,300

EUR 52EUR 28

EUR 441EUR 214EUR 68EUR 11

91

Forward Currency Purchases CurrencyUS Dollar USD 30 million(1)

Pound Sterling GBP 14 million(2:

Notes:(1) Finance activity hedges(2) Operating activity hedges

Currency Options 12.31.2000Purchase Euro call 20Sale Euro call 227Sale Euro put 270

Interest Rate InstrumentsIn managing the interest rate risk exposure of its borrowings, the Group trades on the interest rate

swap and swaption market.

Swap and swaption outstandings, represented by the face value of outstandings, are as follows:

Net long-term Net short-termborrowings borrowings

Floating rate payable swaps 9 0Fixed rate receivable swaps 3,245 693Fixed rate payable swaps 3,569 575Index-based swaps 1,382 22Sale of swaptions 1,100Sale of interest rate floors 15

Commodity Instruments

As part of its ordinary activities, the Group trades on petroleum product forward markets in orderto optimize its fuel supply costs. The corresponding commitments are presented below:

Volume(in tons)

Commodity swaps 60,000Sale of commodity swaptions 55,000

Management of Counterparty RiskThe main transactions which generate counterparty risk are primarily:

Financial Investments

Financial investments are diversified. They primarily consist of marketable debt instruments(certificates of deposit, commercial paper), treasury note repos and subscriptions to French mutual funds(SICAV).

A counterparty approval procedure exists, with investment volume and term limits for eachcounterparty.

Derivative Instruments

Derivative transactions seek to manage the interest rate and foreign exchange risk resulting fromnormal activities. They are restricted to regulated market and over-the-counter transactions withapproved counterparties with which a framework agreement has been signed. A guarantee frameworkagreement is also signed with certain counterparties in order to limit counterparty risk.

Market Value of Derivative InstrumentsProcedures for valuing derivative instruments as of December 31, 2000 differ according to the

nature of the instrument concerned.

The fair value of conventional interest rate and currency swaps was calculated by discounting futureflows, leg by leg, using zero coupon curves as of December 29, 2000.

92

Other interest rate and currency swap transactions were valued at prices provided as of December29, 2000 by financial institution counterparties of the company.

The fair value of OTC currency options was determined using the company valuation model.

All market parameters used in this valuation were obtained from contributors external to thecompany.

The market value of derivative instruments corresponds to the amount payable (-) or receivable(+), excluding accrued interest, to cancel these commitments.

Estimated market values as of December 31, 2000 (excluding accrued interest) are presented below:

Estimatedmarket value

(excludingaccrued interest)

as of 12/29/00

Profitability(premiums —

market value)as of 12/29/00

Management of forex riskCurrency swaps 268 -Currency options (23) 4Management of interest rate riskInterest rate swaps 26 -Options (23) (15)

19. Operating Liabilities

1999 19992000 pro forma published

Accounts payables and related accounts 2,526 2,547 2,547Payments on account received on orders 221 59 59Employee-related payables 822 753 523Amounts payable to the French State 1,626 1,660 1,660Other operating liabilities 887 1,125 1,125Accruals and deferred income 2,805 2,356 -

Total 8,887 8,500 5,914

As of December 31, 2000, accrual and deferred income accounts comprise net investment subsidiesof EUR 1,780 million and deferred income relating to operations.

20. Revenue1999 1999

2000 pro forma publishedPassenger transport 8,562 7,926 6,707Freight 6,512 6,184 6,184Infrastructure and leveraging SNCF's assets and know-how 4,765 4,325 3,396

Total SNCF Group 19,839 18,435 16,287

21. Purchases and External Charges2000 7999

Purchases (including inventory movements) 3,052 2,818Sub-contracting 2,365 2,006Rental 632 567Réseau Ferré de France infrastructure fee 1,562 1,519Other external charges 2,071 1,768

Total 9,682 8,678

93

22. Operating Subsidies

Passenger rail transport subsidiesFreight rail transport subsidiesInfrastructure development subsidies.,Employee-related subsidies ,Other operating subsidies

20006179314618

Total. 235

1999pro forma

12236

3534

227

2999published

1,34136

3534

1,446

23. Personnel Costs and Employee Numbers

Personnel costsof which employee profit-sharingAverage number of employees (full-time equivalent).

1999 19992000 pro forma published8,602 8,183 8,146

9 6216,605 211,265 211,265

Management Compensation

Total gross compensation paid to Group management (Executive Committee members during 2000) inrespect of fiscal year 2000 was EUR 1.2 million (EUR 1.2 million in 1999).

24. Depreciation, Amortization and Operating Provisions

Depreciation and amortization (net)Provisions (net)Non-current assets ,Current assetsContingencies and lossesPaid vacation and leave not taken

2000(1,030)

(162)(18)(22)

(122)

Total. (1,192)

pro forma(1,050)

(145)(1)

(29)(115)

(1,195)

1999published

(1,050(135

0(29

(115« 10

(1,185

25. Net Financial Incomc/(Expcnse)

Net interest chargeNet gains on lease finance transactionsIncome from unconsolidated equity investments.Other financial income and expensesShare in earnings of joint venture operations(1)...

Total.

2000(430)

732220

(333)

1999published

(389401614

(319

94

26. Exceptional ItemsExceptional items break down as follows:

79992000 published

Capital gains on asset disposalsFrance Rail Publicité 142Extand (before tax but after inclusion of purchase warranty risk) 73Frantour 38Télécom Développement (including dilution profit) 154Real-estate 41 60Geodis asset write-downs and exceptional costs (57)Tax and social security revised penalties (114) (33)Sernam spin-off 15 (187)Environmental risk provisions (46) (17)Progressive termination of activity and pre-retirement leave 0 (41)Other (8) 22

Total 46 (4)

27. Income TaxAnalysis of the Tax ChargeThe income tax charge breaks down as follows:

2000 1999Current tax charge (8) (39)Deferred tax (charge)/income 57 (1)Total tax (charge)/income 49 (40)

The deferred tax income recognized in the year primarily relates to Télécom Développement.

Effective Tax RateThe effective tax rate is of little informational value due to:

• the level of tax losses carried forward not recognized in the scope of the SNCF tax group,

• the recognition for the first time this year of deferred tax assets in respect of TélécomDéveloppement.

Deferred Tax Assets RecognizedAs of December 31, 2000, such assets primarily relate to Télécom Développement:

2000 7999Tax losses carried forward (asset) (58) NSTemporary differences (liability) 1 NS

Tax Assets Not RecognizedSNCF opted for the tax grouping regime on July 1, 1988. As of December 31, 2000, the tax group

comprised 31 subsidiaries (54 subsidiaries in 1999). The main subsidiaries are SHEM Group, GrandesLignes Internationales (GLI), Société d'Equipement des Grands Itinéraires (SEGI), Sceta Parc, SNCFParticipations and certain of its subsidiaries.

The tax losses carried forward of the SNCF tax group as of December 31, 2000 totaled EUR 9billion and included:

• ordinary losses of EUR 0.9 billion,

• tax losses carried forward for an indefinite period of EUR 8.1 billion.

95

28. Division and Geographical Segment Information

The following table breaks down the key operating headings by SNCF Group division:

Passenger transportRevenue ......................................................................................................................Gross operating income ...........................................................................................Net operating income ...............................................................................................FreightRevenue ......................................................................................................................Gross operating income ...........................................................................................Net operating income ...............................................................................................Infrastructure and leveraging SNCF's assets and know-howRevenue ......................................................................................................................Gross operating income ...........................................................................................Net operating income ...............................................................................................Total SNCF GroupRevenue. .....................................................................................................................Gross operating income ...........................................................................................Net operating income ...............................................................................................

Break down by geographical area2000

Revenue: ..................................................................... 19,839France .......................................................................... 16,130 81%Rest of the world ...................................................... 3,709 19%Net non-current assets: ............................................. 14,217France .......................................................................... 14,035 99%Rest of the world ...................................................... 182 1%

29. Off-Balance Sheet Commitments

Financial commitmentsCommitments given:Endorsements and guarantees .................................................................................Guarantees issued in respect of loans secured by employees ............................Miscellaneous guarantees .........................................................................................Of which guarantees given in favor of SOCRIF ..................................................Other ...........................................................................................................................

Total commitments given .........................................................................................

Commitments received:Bank guarantees ........................................................................................................Bank credit lines ........................................................................................................Other guarantees and endorsements ......................................................................

Total commitments received ...................................................................................

2000

8,5621,130

343

6,512184(69)

4,765291133

19,8391,605

407

1999

7,9261,100

365

6,184251(30

4,325313

77

18,4351,664

412

1999 pro forma18,43515,148 82%3,287 18%

13,95513,758 99%

197 1%

2000

14539694987439

1999

182397

1,04796910

1,529 1,636

44129684

25925191

821 601

Retirement benefit, medical care and similar commitments are presented in Note 16.

Financial commitments are presented in Note 18.

Other Commitments Given

In the course of its ordinary activities, the Group entered into capex-related commitments in respectof its rail transport activities. These commitments amount to EUR 2.3 billion as of December 31, 2000.

In the course of its international activities, the Group issued performance first demand guaranteesof GBP 35 million to the UK Ministry of Transport, in respect of commitments given by its subsidiaryICCR Limited to this authority.

96

Agreements concerning the takeover of VIA GTI resulted in Paribas and SNCF Participationsgranting each other, in separate agreements, three promises to purchase or sell the VIA GTI stock stillheld by Paribas, expiring January 30, 2002.

On May 18, 2000, VIA GTI granted a guarantee to Storstockholms Lokaltrafik on behalf ofCitypendeln in the amount of SEK 300 million.

Other Commitments ReceivedWithin the framework of existing partnership agreements, Cegetel granted SNCF, on April 11,

1997, a promise to purchase its interest in Télécom Développement over a five-year period.

30. Consolidated Statement of CashflowsCashflow from consolidated company operations in fiscal year 2000 totaled EUR 1,223 million.

After adjustment for current asset provisions (EUR 21 million), working capital provided by operations isEUR 1,244 million.

CLOSING CASH BALANCE - INCREASE/(DECREASE) IN CASH BALANCE

The closing cash balance breaks down as follows:

Cash at bank and in handMarketable securities with an initial maturity of less than 3 monthsCash borrowings with an initial maturity of less than 3 months

Cash balance per the Consolidated Statement of Cashflows

2000222

1235(1,805)

(348)

7999303

1076(1,322)

57

The cash balance therefore decreased EUR 452 million in 2000, after inclusion of foreign currencygains of EUR 52 million and the EUR 5 million impact of a change in accounting method.

ANALYSIS OF CAPITAL GAINS/(LOSSES) ON DISPOSALThe main gains and losses on disposal during fiscal year 2000 were as follows (in EUR millions):

• capital gain on the sale of 80 per cent, of France Rail Publicité 141

• capital gain on the sale of Extand 96

• capital loss on the sale of Rail Europe Amérique Latine 8

• capital gain on the sale of buildings by the parent company 41

ANALYSIS OF NON-CURRENT ASSET DISPOSALS

The main flows generated by the sale of non-current assets concerned the following transactions (inEUR millions):

• sale of parent company buildings 43

• change in receivables on the sale of equity investments 51

CHANGES IN GROUP STRUCTUREChanges in Group structure had an impact of EUR 129 million in fiscal year 2000. The principal

acquisitions and disposals impacting the Group structure were as follows:

• sale of France Rail Publicité (EUR 154 million) and Extand (EUR 108 million) securities,

• acquisition of GTI (EUR 17 million), Ermewa Suisse (EUR 43 million), SCI KEY (EUR 12million) and Rouch Intermodal (EUR 6 million) securities.

97

31. SNCF Financial Statement for the Special Debt Account and Employee-Related Benefits Account

SNCF Balance Sheet and Income Statement for Employee-Related Benefits AccountBalance Sheet

Assets

Current assets

Total Assets

Liabilities & Stockholders' Equity

Other liabilitiesIntergroup account

Total Liabilities & Stockholders'Equity

Total Liabilities & Stockholders'Equity excl. Intergroup Account

Income Statement

ExpensesBenefits paid to members

Total Expenses

Income

Employer contributionsCompensations & contractual

Total Income

Net Income/(Loss)

PensionFund

291,166 '

1,195

4093

1,063

1,196

132

PensionFund

4,28855

4,343

3131,125

2,715190

4,343

2000Medicalcare &Other

2148

150

32188(70)

150

220

2000Medicalcare &Other

1,43855

1,493

25442

1,00626

1,499

6

SNCF Balance Sheet and Income Statement forEmployee-Related Benefits Account

Balance SheetAssetsMiscellaneous assetsIntergroup accounts

Total

Total excluding Intergroup

Liabilities and SHs' EquityCapital contribution for theAccumulated deficits^Net income for the year

Total

Borrowings^Other liabilities..

Total

Total excluding Intergroup

accounts...

year (See

accounts...

Note 2.5)..

OtherFunds Total

39 7023 1,337

62 1,407

29 10135 316(3) 990

61 1,407

64 416

OtherFunds Total

228 5.95411 121

239 6,075

1 33910 1,577

220 3,94110 26

241 6,083

2 8

the Special Debt

1999Medical

Pension care & OtherFund Other Funds

27 2 411,078 158 24

1,105 160 65

39 26 28161 220 46905 (86) (9)

1,105 160 65

200 247 75

1999Medical

Pension care & OtherFund Other Funds

4,280 1,383 24878 51 11

4,358 1,434 259

304 24 11,097 430 9

2,828 957 239129 25 11

4358 1,436 260

2 1

Account and

200012929

158

129

200023

(9,204)24

(9,157)

9,28827

158

158

Total

701,260

1,330

93427810

1,330

521

Total

5,911140

6,051

3291,536

4,024165

6,054

3

1999270

6

276

270

199923

(9,248}21

(9,204)

9,44436

276

276

Notes:(1) The Accumulated deficits balance is reduced each year by net income from the Special Debt Account and the prior year

capital contribution.(2) Including accrued interest payable.

98

Income StatementExpenses 2000 1999Financial expenses 760 655Other expenses 0 1Net income for the year 24 21

Total 784 677

Income 2000 1999Financial income 112 5French State contribution 654 654SCNF contribution 18 18

Total 784 677

As of December 31, 2000, Special Debt Account liabilities, after swap contracts, amounted to EUR 8.9billion, excluding accrued interest payable.

Maturities of Special Debt Account Borrowings12.31.2000 12.31.1999

Maturing within less than 1 year 0 5151 to 5 years 4,281 2,835More than 5 years 4,649 5,596Neutralization of swaps 7 111

Special Debt Account borrowings excl. accrued interest payable 8,937 9,057

Accrued interest payable 351 387

Currency Structure of Special Debt Account Borrowings, excluding Accrued Interest PayableThe currency breakdown of borrowings allocated to the Special Debt Account, before adjustment forderivative instruments, is as follows:

12.31.2000 12.31.1999Euro 8,806 8,640Other Euro zone currencies O OSwiss franc 131 125Japanese yen 0 292

Special Debt Account borrowings excl. accrued interest payable 8,937 9,057

The currency breakdown of borrowings allocated to the Special Debt Account, after adjustment forderivative instruments, is as follows:

12.31.2000 12.31.1999Euro 8,930 8,764Other Euro zone currencies 117Swiss franc 65Japanese yen 7 111

Special Debt Account borrowings excl. accrued interest payable 8,937 9,057

99

Interest Rate Structure of Special Debt Account Borrowings, Excluding Accrued Interest PayableThe break down by interest rate type of borrowings allocated to the Special Debt Account, afteradjustment for derivative instruments and the cash balance mechanism is as follows:

12.31.2000 12.31.1999Fixed rate 6,660 6,051Floating rate 2,270 2,895Neutralization of swaps 7 111

Special Debt Account borrowings excl. accrued interest payable 8,937 9,057

32. Litigation and Disputes

The parent company, SNCF, is currently involved in two proceedings before the EuropeanCommunity authorities involving Sernam.

The first, concerning a complaint of cross-subsidies between SNCF and Sernam, gave rise to arequest for information, which was answered within the requisite period. This case is currently beingreviewed.

The second proceeding concerns European Commission notification of the Sernam restructuringplan. This plan should ensure Sernam's return to profitability in the long-term and enable an externalpartner to be found.

Given the steps taken by SNCF, Company Management is confident as to the favorable outcome ofthese proceedings.

100

33. Scope of ConsolidationA list of the main consolidated subsidiaries is presented below. A comprehensive list of all

subsidiaries may be obtained by simple request to the company registered office.

Percentage interest: share in the common stock of the consolidated company held by theconsolidating company, either directly or indirectly.

Percentage control: percentage of voting rights held by the consolidating company in theconsolidated company, either directly or indirectly.

% de %Passenger transport division Change control interestDirect SNCF subsidiaries

Fully consolidatedSeafrance 100.00 100.00Direct SNCF Participations subsidiaries

Fully consolidatedGrandes Lignes International 100.00 99.80

Equity affiliateVIA CARIANE ECE/CME 43.35 43.26Freight divisionDirect SNCF subsidiaries

Fully consolidatedSCS SERNAM ECR 100.00 100.00Direct SNCF Participations subsidiaries

Fully consolidatedFrance Wagons CGR 100.00 99.80Sté de Transports de Véhicules Automobiles (S.T.V.A.)... 81.13 80.69Cie Nouvelle de Conteneurs (C.N.C.) 75.95 72.77Cié de Transports de Céréales (C.T.C.) 53.06 62.56Géodis 43.32 43.23

Equity affiliateERMEWA SA - GENEVE 45.00 44.91Direct Geodis subsidiaries

Fully consolidatedBourgey Montreuil Holding 100.00 43.23CalbersonSA 100.00 43.23Leveraging SNCF's assets and know-how divisionDirect SNCF subsidiaries

Fully consolidatedSté Française de Construction Immobilière (S.F.C.I.) ECO 100.00 100.00SNCF Participations 99.83 99.80Sté Hydro-Electrique du Midi (S.H.E.M.) 99.62 99.62Télécom Développement 50.00 50.00Direct SNCF Participations subsidiaries

Fully consolidatedSNCF International 100.00 99.80

Notes:Entries: ECE (external acquisition), ECO (consolidation criteria met), ECR (creation).

Changes: CME (change in consolidation method), CGR (change of sub-group).

101

STATUTORY AUDITORS' REPORTON THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31st DECEMBER, 2000

The following is a free translation of the statutory auditors' report on the consolidated financialstatements for the year ended 31st December, 2000. References in this translation to the "company" are toSNCF and to the "Group" are to SNCF and its consolidated subsidiaries.

In accordance with our appointment as auditors of your company, we have audited theaccompanying consolidated financial statements of the SNCF for the year ended December 31, 2000.prepared in euros, in accordance with accounting principles generally accepted in France.

The consolidated financial statements have been approved by the Board of Directors. Our role is toexpress an opinion on these financial statements, based on our audit.

We conducted our audit in accordance with professional standards applicable in France, with theexception of the points raised in the paragraphs below; those standards require that we plan and performthe audit to obtain reasonable assurance about whether the consolidated financial statements are free olmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall financial statemenlpresentation. We believe that our audit provides a reasonable basis for our opinion.

• Although the passenger transport revenue monitoring system is in the final roll-out stage,some uncertainties remain in respect of this information for the year ended December 31,2000and may only be resolved once this system has been actually implemented.

• As shown in note 6, Réseau Ferré de France (RFF) and SNCF have differences of opinion onthe transfer of certain fixed assets, a situation which must be resolved in the near future. In thiscontext and given that a fixed asset management system is curently being developed and thatthe follow-up of the detailed fixed asset inventory is under way, we are unable to ascertain thenet book value of fixed installations and investment subsidies.

Subject to the above qualifications, in our opinion, the consolidated financial statements give a trueand fair view of the financial position and the assets and liabilities of the company as at December 31,2000 and the results of its operations for the year then ended in accordance with accounting principlesgenerally accepted in France.

Without qualifying the above opinion, we would draw your attention to note 2 which specifies theamendments introduced by CRC regulation 99-02 to the presentation of the consolidated financialstatements and the changes in the presentation of revenue, personnel costs and lease finance contracts.

We have also performed the procedures required by law on the Group financial information givenin the report of the Board of Directors.

Except for the impact of the above matters, we have no further comment to make as to the fairpresentation of this information nor its consistency with the consolidated financial statements.

The Statutory Auditors

CALAN RAMOLINO & Associés ERNST & YOUNG AuditMembre de Deloitte Touche Tohmatsu

Etienne Jacquemin Pascal Pincemin Patrick Gounelle Francis Gidoin

May 23, 2001

102

CAPITALISATION

The following unaudited table sets out the capitalisation of SNCF (including Special Debt Account)as at 30th April, 2001 (in millions).

9 l/4% Bonds due 2001 CAD3 3/4% Bonds due 2002 CHF2% Bonds due 2004 CHF7% Bonds due 2004 CHF5 V/° Bonds due 2005 CHF4 V/o Bonds due 2005 CHF4 V/o Bonds due 2006 CHF5% Bonds due 2015 CHFLoans from European Investment Bank CHF5 V/o Bonds due 2001 DEM6 3/8% Bonds due 2004 DKK7% Bonds due 2002 ESP5 V/° Bonds due 2002 ESP8 V/o Bonds due 2021 ESPSNCF Mutual funds 2001 EURSNCF Mutual funds 2002 EUR9.80% Bonds due 2002 EURSNCF Mutual funds 2003 EUR9% Bonds due 2003 EURSNCF Mutual funds 2004 EUR8.60% Bonds due 2004 EURSNCF Mutual funds 2005 EUR8 V4% Bonds due 2005 EURSNCF Mutual funds 2006 EUR6% Bonds due 2006 EUR8% Bonds due 2007 EUR6 3/4% Bonds due 2007 EUR8 3/8% Bonds due 2007 EURFRN Bonds CNO-TEC10 due 2007 EUR7 V2% Bonds due 2008 EUR6 V/o Bonds due 2009 EUR4 5/8% Bonds due 2009 EUR5 7/8% Bonds due 2010 EURPrivate Placements FRFLoans from the Paris Regional District and mise FRFLoans from European Invesment Bank FRFLoans from ECSC FRF10.40% Bonds due 2001 FRFFRN Bonds TAM due 2001 FRFFRN Bonds TME due 2001 FRFFRN Bonds TME due 2001 FRF7 3/4% Bonds due 2002 FRFZero coupon Bonds due 2004 FRF6 3/4% Bonds due 2013 FRF8 7/8% Bonds due 2023 FRFLoans from European Investment Bank GBPLoans from European Investment Bank ITLF/RFRN Notes due 2007 . ITLReverse Dual Currency Bonds JPY/AUD due 2006 JPYReverse Dual Currency Bonds JPY/AUD due 2006 JPYF/FRN Bonds due 2015 JPYReverse Dual Currency Bonds JPY/AUD-DEM-USD due 2015 JPY6% Bonds due 2001 LUF

Principalamounts

outstanding90.00

250.00300.00450.00300.00200.00300.00200.00200.9

400.00400.00

10,000.0010,000.0010,000.00

113.16138.58

1,099.02158.69

2,247.62184.58

2,415.01202.53

2,515.2525.15

1,981.84457.35914.69400.00304.90

1,829.39457.35

1,000.00500.00500.00

1,239.441,412.00

877.802,900.001,500.001,000.001,000.006,000.00

500.004,000.005,950.00

387.6125,000.00161,850.0012,000.0015,000.0020,000.0010,000.002,000.00

Equivalent inEUR65.69

162.70195.24292.85195.24130.16195.24130.16130.74204.5253.5960.1060.1060.10

113.16138.58

1,099.02158.69

2,247.62184.58

2,415.01202.53

2,515.2525.15

1,981.84457.35914.69400.00304.90

1,829.39457.35

1,000.00500.0076.22

188.95215.26133.82442.10228.67152.45152.45914.6976.22

609.80907.07625.6764.5683.60

109.42136.77182.3791.1849.58

103

8 V4% Bonds due 2001 LUF8.10% Bonds due 2001 LUF5 5/8% Bonds due 2001 LUF8 V8% Bonds due 2004 LUF7 V2% Bonds due 2002 NOKDual Currency Bonds due 2001 USDFloating Rate Credit due 2002 USD6 V2% Bonds due 2002 USD5 V/o Bonds due 2003 USD

Total long-term debt

Principalamounts

outstanding2,000.002,000.002,500.001,500.00

400.00115.27150.00250.00500.00

Equivalent ir,EUR49.5Í49.5É61.9-,37.1Í49.4:

129.8',169.0(281.6(563.3:

25,713.9(

Notes

(1)

(2)(3)

(4)

(5)

(6)

The foregoing table does not include neither the equivalent (as at 30th April, 2001) of approximately EUR 2.953 billioiprincipal amount outstanding under rolling stock lease financing contracts with Eurofima nor USD 300 million amEUR 500 million issued after 30th April, 2001.Translation of foreign currencies to euros in this table have been made at the rates as of 30th April, 2001.References in this table to FRF are to French francs, to DEM are to Deutsche Marks, to EUR are to Euro, to LUF are t<Luxembourg francs, to CHF are to Swiss francs, to USD are to United States Dollars, to DKK are to Danish Kroners, to ESIare to Spanish pesetas, to ITL are Italian lire, to JPY are to Japanese yen, to GBP are Great Britain Pounds and to CAD anCanadian Dollars and to AUD are to Australian Dollars.The capitalisation of SNCF in the foregoing table does not take account of the net debt owing by SNCF as a result of th>EUR 14.945 billion owed by RFF to SNCF following the Reform.SNCF has a EUR 7,000,000,000 Euro Medium Term Note Programme, dated 26th June 2000. The foregoing table does noinclude the equivalent (as at 30th April, 2001) of EUR 620.80 million private placements issued off this Programme amEUR 118.4 million issued since 30th April, 2001.Save as disclosed above, there has been no material change in the capitalisation of SNCF since 30th April, 2001.

AGGREGATE PAYMENTS TABLE

The following unaudited table sets out at 30th April, 2001 the aggregate payments (expressed iiEUR millions) required to be made in respect of principal on the outstanding long-term debt of SNC1(including Special Debt Account and lease financing contracts with EUROFIMA) as modified b\currency exchange agreements:

EUR.CHF..GBP..Total.

20011,940.12

0.49

20023,283.71

435.86

20033,627.41

0.49

(EUR millions)2004

3,240.26474.90

20052,795.85

325.39

20062,417.08

195.23

EUR.CHF..GBP-Total .

20081,838.65

0.00103.13

1,838.61

20091,854.18

0.0069.45

1,854.18

2010838.79

0.00168.50838.79

(EUR millions)2011

282.320.00

341.08385.45

200;2,196.2',

0.0(

1,940.61 3,719.57 3,627.90 3,715.16 3,121.23 2,612.31 2,196.21

2072 Balance Tota421.31 2,510.80 27,246.7?

0.00 260.90 1,693.2:

490.76 2,940.20 29,281.lJ

104

RECENT DEVELOPMENTSSernam

On 23 May 2001, the European Commission expressed a favourable opinion on the restructuringaids paid by SNCF to SCS SERNAM, for the purpose of the recovery of the company through itstakeover by the GEODIS group.

On 28 June 2001, the Board of Directors of the GEODIS group ascertained that, to date, thedecision of the Brussels Commission relating to the envisaged acquisition of SERNAM by GEODIS hadnot been published and did not allow implementation of the Memorandum of Understanding enteredinto between SNCF and GEODIS on 20 April 2000 whose validity extends until 30 June 2001.

Considering the length of the period of the examination of the file by the Commission and thenotice for the publication of its decision, the Board wanted to intensify and step up the update of theMemorandum setting the conditions under which SERNAM could be backed to the GEODIS group.

Impact of the Dispute of March-April 2001 on the 2001 SNCF Accounts

Further to the dispute which has affected SNCF in March-April 2001, SNCF reviewed its 2001budget. After review, this budget showed a negative net income from ordinary activities of €162 millioncompared to the previous one which was €31.7 million negative.

Causes of this decline are mostly, on one hand, loss of revenues due to strikes, and, on the otherhand, an increase of employer's contributions resulting from recruitment projections and social measuresfinalised during the two round tables of 27 March and 5 April 2001.

105

SUBSCRIPTION AND SALESubject to the terms and on the conditions contained in an amended and restated Dealer

Agreement dated 19th July, 2001 (the "Dealer Agreement"), between the Issuer, the Permanent Dealersand the Arrangers, the Notes will be offered by the Issuer to the Permanent Dealers. However, the Issuerhas reserved the right to issue Notes directly on its own behalf to Dealers that are not Permanent Dealersand who agree to be bound by the restrictions below. The Notes may be resold at prevailing marketprices, or at prices related thereto, at the time of such resale, as determined by the relevant Dealer. TheNotes may also be sold by the Issuer through the Dealers, acting as agents of the Issuer. The DealerAgreement also provides for Notes to be issued in syndicated Tranches that are jointly and severallyunderwritten by two or more Dealers.

The Issuer will pay each relevant Dealer a commission as agreed between them in respect of Notessubscribed by it. The Issuer has agreed to reimburse the Arranger for certain of its expenses incurred inconnection with the update of the Programme. The commissions in respect of an issue of Notes on asyndicated basis will be stated in the relevant Pricing Supplement.

The Issuer has agreed to indemnify the Dealers and the Arrangers against certain liabilities inconnection with the offer and sale of the Notes. The Dealer Agreement entitles the Dealers to terminateany agreement that they make to subscribe Notes in certain circumstances prior to payment for suchNotes being made to the Issuer.

United States

The Notes have not been and will not be registered under the Securities Act and may not be offeredor sold within the United States or to, or for the account or benefit of, U.S. persons except in certaintransactions exempt from the registration requirements of the Securities Act. Terms used in thisparagraph have the meanings given to them by Regulation S under the Securities Act.

The Dealer Agreement provides that the Dealers may directly or through their respective agents oraffiliates which are U.S. registered broker-dealers arrange for resales of Notes in registered form in theUnited States to qualified institutional buyers pursuant to Rule 144A.

Notes in bearer form are subject to U.S. tax law requirements and may not be offered, sold ordelivered within the United States or its possessions or to a United States person, except in certaintransactions permitted by U.S. tax regulations. Terms used in this paragraph have the meanings given tothem by the U.S. Internal Revenue Code and regulations thereunder.

Each Dealer has agreed that neither it nor its affiliates nor any person acting on its or their behalfand each further Dealer appointed under the Programme will be required to agree that, except aspermitted by the Dealer Agreement, it will not offer, sell or deliver Notes (i) as part of their distributionat any time or (ii) otherwise until 40 days after completion of the distribution of an identifiable Tranche ofwhich such Notes are a part as determined, and certified to the Issuer and the relevant Dealer by theFiscal Agent or, in the case of Notes issued on a syndicated basis, by the Lead Manager, within the UnitedStates or to, or for the account or benefit of, U.S. persons, and it will have sent to each Dealer to which itsells Notes during the distribution compliance period (other than resales pursuant to Rule 144A) aconfirmation or other notice setting out the restrictions on offers and sales of the Notes within the UnitedStates or to, or for the account or benefit of, U.S. persons. Terms used in the preceding sentence have themeanings given to them by Regulation S.

In addition, until 40 days after the commencement of the offering of any identifiable tranche ofNotes, an offer or sale of such Notes within the United States by any dealer that is not participating in theoffering of such Notes may violate the registration requirements of the Securities Act if such offer or saleis made otherwise than in accordance with Rule 144A.

Each issuance of index-, commodity- or currency-linked Notes may be subject to such additionalU.S. selling restrictions as the relevant Dealer(s) may agree with the Issuer as a term of the issuance andpurchase or, as the case may be, subscription of such Notes. Each Dealer agrees that it shall offer, sell anddeliver such Notes only in compliance with such additional U.S. selling restrictions.

United Kingdom

Each Dealer has represented and agreed that:

1 it has not offered or sold and will not offer or sell prior to the date six months after their date ofissue any Notes to persons in the United Kingdom, except to persons whose ordinary activities

106

involve them in acquiring, holding, managing or disposing of investments (as principal or agent) forthe purposes of their businesses or otherwise in circumstances that have not resulted and will notresult in an offer to the public in the United Kingdom within the meaning of the Public Offers ofSecurities Regulations 1995 (as amended);

2 it has complied with and will comply with all applicable provisions of the Financial Services Act1986 with respect to anything done by it in relation to the Notes in, from or otherwise involving theUnited Kingdom; and

3 it has only issued or passed on and will only issue or pass on in the United Kingdom any documentreceived by it in connection with the issue of the Notes to a person who is of a kind described in Article11(3) of the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996 asamended or is a person to whom such document may otherwise lawfully be issued or passed on.

FranceThe Dealer Agreement contains a full description of the selling restrictions that may apply in France

with respect to a particular issue of Notes.

Each of the Dealers and the Issuer has represented and agreed, and each further Dealer appointedunder the Programme will be required to represent and agree that it has not offered or sold and will notoffer or sell, directly or indirectly, Notes to the public in France, and has not distributed or caused to bedistributed and will not distribute or cause to be distributed to the public of France, the Offering Circularor any other offering material relating to Notes, and that such offers, sales and distributions have beenand shall only be made in France to qualified investors (investisseurs qualifiés), as defined in and inaccordance with Articles L.411-1 and L.411-2 of the Code Monétaire et Financier and décret No.98-880 of1 October, 1998.

Investors in France may only participate in the issue of Notes for their own account in accordancewith the conditions set out in décret No.98-880 of 1 October, 1998. Notes may only be issued, directly orindirectly, to the public in France in accordance with Articles L.411-1 and L.411-2 of the Code Monétaireet Financier.

GermanyEach Dealer represents and agrees that it will only offer Notes in the Federal Republic of Germany

in compliance with the provisions of the German Securities Prospectus Act of 13th December, 1990, asamended, or any other laws applicable in the Federal Republic of Germany governing the offer and saleof the Notes in the Federal Republic of Germany.

JapanThe Notes have not been and will not be registered under the Securities and Exchange Law of

Japan (the "Securities and Exchange Law"). Accordingly, each of the Dealers has represented andagreed that it has not, directly or indirectly, offered or sold and will not, directly or indirectly, offer or sellany Notes in Japan or to a resident of Japan except pursuant to an exemption from the registrationrequirements of, and otherwise in compliance with the Securities and Exchange Law and other relevantlaws and regulations of Japan. As used in this paragraph, "resident of Japan" means any person residentin Japan, including any corporation or other entity organised under the laws of Japan.

General

These selling restrictions may be modified by the agreement of the Issuer and the Dealers following achange in a relevant law, regulation or directive. Any such modification will be set out in the Pricing Supplementissued in respect of the issue of Notes to which it relates or in a supplement to this Offering Circular.

No action has been or will be taken in any jurisdiction that would permit a public offering of any ofthe Notes, or possession or distribution of the Offering Circular or any other offering material or anyPricing Supplement, in any country or jurisdiction where action for that purpose is required.

Each Dealer has agreed that it will comply th all relevant laws, regulations and directives in eachjurisdiction in which it purchases, offers, sells or delivers Notes or has in its possession or distributes theOffering Circular, any other offering material or any Pricing Supplement and obtain any consent,approval or permission required for the purchase, offer or sale of Notes under the laws and regulations inforce in any jurisdiction to which it is a subject or in which it makes such purchases, offers or sales andneither the Issuer nor any other Dealer shall have responsibility therefor.

107

FORM OF PRICING SUPPLEMENTThe form of Pricing Supplement that will be issued in respect of each Tranche of Notes issued under

Société Nationale des Chemins de fer Français' €7,000,000,000 Euro Medium Term Note Programme(which is supplemental to, and should be read in conjunction with, this Offering Circular dated 19th July,2001), subject only to the deletion of non-applicable provisions, is set out below:

1

3

4

Issuer:

(i)

(u)

Series Number:

Tranche Number:

(If fungible with an existing Series, details of thatSeries, including the date on which the Notesbecome fungible.)

Specified Currency or Currencies:

Aggregate Nominal Amount:

(i) Series:

(ii) Tranche:

(i) Issue Price:

(ii) Net proceeds:

6 Specified Denominations:

7 [(i)] Issue Date [and Interest CommencementDate]:

[(ii) Interest Commencement Date (if differentfrom the Issue Date):]

8 Maturity Date:

Interest Basis:

10 Redemption/Payment Basis:

11 Change of Interest or Redemption/Payment Basis:

Société Nationale des Chemins de ferFrançais

[•] per cent, of the Aggregate NominalAmount [plus accrued interest from [insertdate] {in the case of fungible issues only, ifapplicable)]

[•] (Required only for listed issues)

[specify date or (for Floating Rate Notes)Interest Payment Date falling in therelevant month and year]

[[•] per cent. Fixed Rate]

[[specify reference rate] +/- [•] per cent.Floating Rate]

[Zero Coupon]

[Index Linked Interest]

[Other (specify)]

(further particulars specified below)

[Redemption at par]

[Index Linked Redemption]

[Dual Currency]

[Partly Paid]

[Instalment]

[Other (specify)]

[Specify details of any provision forconvertibility of Notes into another interestor redemption/payment basis]

108

12 Put/Call Options:

13 Status of the Notes:

14 Listing:

15 Method of distribution

PROVISION RELATING TO INTEREST (IF ANY)PAYABLE

16 Fixed Rate Note Provisions

(i) Rate(s) of Interest:

(ii) Interest Payment Date(s):

(iii) Fixed Coupon Amount(s):

(iv) Broken Amount(s):

17

(v) Day Count Fraction (Condition 5(/)):

(vi) Determination Date(s) (Condition 50')):

(vii) Other terms relating to the method ofcalculating interest for Fixed Rate Notes:

Floating Rate Provisions

(i) Specified Period(s)/Specified InterestPayment Dates:

(ii) Business Day Convention:

[Put]

[Call]

[(further particulars specified below)]

Unsubordinated

[Euronext Paris/Luxembourg/Other(specify)fNone]

[Syndicated/Non-Syndicated]

[Applicable/Not Applicable]

(If not applicable, delete the remaining sub-paragraphs of this paragraph)

[•] per cent, per annum [payable[annually/semi-annually/quarterly/monthly] in arrear]

[•] in each year

[•] per [•] in nominal amount

[Insert particulars of any initial or finalbroken interest amounts which do notcorrespond with the Fixed CouponAmountf(s)] and the Interest PaymentDate(s) to which they relate]

[Consider if day count fraction for eurodenominated issues should be on an Actual/Actual-ISDA or Actual/Actual-ISMAbasis]

[Insert day(s) and month(s) on whichinterest is normally paid (if more than one,then insert such dates in the alternative)] ineach year1

[Not Applicable/give details]

[Applicable/Not Applicable] (// notapplicable, delete the remaining sub-paragraphs of this paragraph. Alsoconsider whether EURO BBA LIBOR orEURIBOR is the appropriate reference ratefor Notes denominated in euro)

[Floating Rate Business Day Convention/Following Business Day Convention/Modified Following Business DayConvention/Preceding Business DayConvention/other (give details)]

1 Only to be completed for an issue denominated in euro where Day Count Fraction to Actual/Actual-ISMA.

109

(iii)

(iv)

(v)

(vi)

(viii)

(ix)

(x)

(xi)

(xii)

Additional Business Centre(s) (Condition [•]50')):

Manner in which the Rate(s) of Interest is/are [Screen Rate Determination/ISDADetermination/other (give details)]to be determined:

Interest Period Date(s):

Party responsible for calculating the Rate(s)of Interest and Interest Amount(s) (if not theCalculation Agent):

(vii) Screen Rate Determination (Condition

Relevant Time:

Interest Determination Date:

Primary Source for Floating Rate:

Reference Banks (if Primary Source is"Reference Banks"):

Relevant Financial Centre:

Benchmark:

- Representative Amount:

Effective Date:

Specified Duration:

ISDA Determination (Condition 5(6)(iii)(A)):

- Floating Rate Option:

Designated Maturity:

Reset Date:

ISDA Definitions: (if different fromthose set out in the Conditions)

Margin(s):

Minimum Rate of Interest:

Maximum Rate of Interest:

Day Count Fraction (Condition 5(/))-'

[Not Applicable/specify dates]

[[•] [TARGET] Business Days in [specifycity] for [specify currency] prior to [the firstday in each Interest Accrual Period/eachInterest Payment Date]]

[Specify relevant screen page or"Reference Banks"]

[Specify four]

[The financial centre most closelyconnected to the Benchmark - specify if notLondon]

[LIBOR, LIBID, LIMEAN, EURIBORor other benchmark}

[Specify if screen or Reference Bankquotations are to be given in respect of atransaction of a specified notional amount]

[Specify if quotations are not to be obtainedwith effect from commencement of InterestAccrual Period]

[Specify period for quotation if notduration of Interest Accrual Period]

[+/-] [•] per cent, per annum

[•] per cent, per annum

[•] per cent, per annum

(xiii) Rate Multiplier:

110

(xiv) Fall back provisions, rounding provisions,denominator and any other terms relating tothe method of calculating interest onFloating Rate Notes, if different from thoseset out in the Conditions:

18 Zero Coupon Note Provisions

(i) Amortisation Yield (Condition 6(6)):

(ii) Day Count Fraction (Condition 50')):

(iii) Any other formula/basis of determiningamount payable:

Index Linked Interest Note Provisions19

20

(i) Index/Fomula:

(ii) Calculation Agent responsible for calculatingthe interest due:

(iii) Provisions for determining Coupon wherecalculation by reference to Index and/orFormula is impossible or impracticable:

(iv) Specified Period(s)/Specified InterestPayment Dates:

(v) Business Day Convention:

(vi) AdditionalBusinessCentre(s) (Condition5(/)):

(vii) Minimum Rate of Interest:

(viii) Maximum Rate of Interest:

(ix) Day Count Fraction (Condition 5(j)):

Dual Currency Note Provisions

(i) Rate of Exchange/Method of calculatingRate of Exchange:

(ii) Calculation Agent, if any, responsible forcalculating the principal and/or interest due:

(iii) Provisions applicable where calculation byreference to Rate of Exchange impossible orimpracticable:

(iv) Person at whose option SpecifiedCurrency(ies) is/are payable:

(v) Day Count Fraction (Condition 5(/)):

[Applicable/Not Applicable] (If notapplicable, delete the remaining sub-paragraphs of this paragraph)

[•] per cent, per annum

[Applicable/Not Applicable] (// notapplicable, delete the remaining sub-paragraphs of this paragraph)

[Give or annex details]

[Floating Rate Business Day Convention/Following Business Day Convention/Modified Following Business DayConvention/Preceding Business DayConvention/other (give details)]

[•] per cent, per annum

[•] per cent, per annum

[Applicable/Not Applicable] (// notapplicable, delete the remaining sub-paragraphs of this paragraph)

[Give details]

111

PROVISIONS RELATING TO REDEMPTION

21 Call Option

(i) Optional Redemption Date(s):

(ii) Optional Redemption Amount(s) andmethod, if any, of calculation of suchamount(s):

(iii) If redeemable in part:

(a) Minimum nominal amount to beredeemed:

(b) Maximum nominal amount to beredeemed:

(iv) Option Exercise Date(s):

(v) Description of any other Issuer's option:

(vi) Notice period (if other than as set out in the

22

23

24

Conditions):

Put Option

(i) Optional Redemption Date(s):

(ii) Optional Redemption Amount(s) andmethod, if any, of calculation of suchamount(s):

(iii) Option Exercise Date(s):

(iv) Description of any other Noteholders' option:

(v) Notice period (if other than as set out in theConditions):

Final Redemption Amount

Early Redemption Amount

(i) Early Redemption Amount(s) payable onredemption for taxation reasons (Condition6(c)) or an event of default (Condition 10)and/or the method of calculating the same (ifrequired or if different from that set out inthe Conditions):

(ii) Redemption for taxation reasons permittedon days other than Interest Payment Dates(Condition 6(c)):

(iii) Unmatured Coupons to become void uponearly redemption (Bearer Notes only)(Condition 7(/)):

GENERAL PROVISIONS APPLICABLE TO THENOTES

25 Form of Notes

[Applicable/Not Applicable] (// notapplicable, delete the remaining sub-paragraphs of this paragraph)

[Applicable/Not Applicable] (// notapplicable, delete the remaining sub-pamgraphs of this paragraph)

[Nominal amount/Other/See Appendix]

[Yes/No]

[Yes/No/Not Applicable]

[Bearer Notes/Exchangeable BearerNotes/Registered Notes]

[Delete as appropriate]

112

(i) Temporary or permanent global Note/Certificate:

(ii) Applicable TEFRA exemption:

26 Additional Financial Centre(s) (Condition 7(/z)) orother special provisions relating to payment dates:

27 Talons for future Coupons or Receipts to beattached to Definitive Notes (and dates on whichsuch Talons mature):

28 Details relating to Partly Paid Notes: amount ofeach payment comprising the Issue Price and dateon which each payment is to be made andconsequences (if any) of failure to pay, including anyright of the Issuer to forfeit the Notes and interestdue on late payment:

29 Details relating to Instalment Notes:

(i) Instalment Amount(s):

(ii) Instalment Date(s):

(iii) Minimum Instalment Amount:

(iv) Maximum Instalment Amount:

30 Redenomination, renominalisation andreconventioning provisions:

31 Consolidation provisions:

32 Other terms or special conditions:2

[temporary Global Note/Certificateexchangeable for a permanent GlobalNote/Certificate which is exchangeable forDefinitive Notes/Certificates on [•] days'notice/at any time/in the limitedcircumstances specified in the permanentGlobal Note/Certificate]

[temporary Global Note/Certificateexchangeable for Definitive Notes/Certificates on [•] days' notice]

[permanent Global Note/Certificateexchangeable for Definitive Notes/Certificates on [•] days' notice/at anytime/in the limited circumstances specifiedin the permanent Global Note/Certificate]

[Unrestricted Global Certificate/Restricted Global Certificate]

[C Rules/D Rules/Not Applicable]

[Not Applicable/Give details. Note that thisitem relates to the place of payment, andnot interest period end dates, to which item17(Hi) relates]

[Yes/No. If yes, give details}

[Not Applicable/give details}

[Not Applicable/give details]

[Not Applicable/The provisions [inCondition 1(6)] [annexed to this PricingSupplement] apply][Not Applicable/The provisions [inCondition 12] [annexed to this PricingSupplement] apply]

[Not Applicable/give details]

If full terms and conditions are to be used, please add the following here:

"The full text of the Conditions which apply to the Notes [and which will be endorsed on the Notes in definitive form] are setout in [the Annex hereto], which Conditions replace in their entirety those appearing in the Offering Circular for the purposesof these Notes and such Conditions will prevail over any other provision to the contrary."

The first set of bracketed words is to be deleted where there is a permanent global Note instead of Notes in definitive form. Thefull Conditions should be attached to and form part of the pricing supplement.

113

DISTRIBUTION

33 (i) If syndicated, names of Managers:

(ii) Stabilising Manager (if any):

(iii) Dealer's Commission:

34 If non-syndicated, name of Dealer:

35 Additional selling restrictions: (*French sellingrestrictions)

OPERATIONAL INFORMATION

36 ISIN Code:

37 Common Code:

38 CUSIP Code:

39 CINS Code:

40 Any clearing system(s) other than Euroclear andClearstream, Luxembourg and Euroclear Franceand the relevant identification number(s):

41 Delivery:

42 The Agents appointed in respect of the Notes are:

GENERAL

[Not Applicable/g/ve names]

[Not Applicable/give name]

[•][Not Applicable/give name]

[Not Applicable/give details]

[Not Applicable/give name(s) andnumber (s)]

Delivery [against/free of] payment

[Not Applicable/give details]

[Not Applicable/euro[*]]

[Specify, if yes]

43 Additional steps that may be taken followingapproval by an Extraordinary Resolution inaccordance with Condition 13(a):

44 The aggregate principal amount of Notes issued hasbeen translated into euro at the rate of [•],producing a sum of (for Notes not denominated ineuro):

[45 Euroclear France to act as Central Depositary

[46 Details of any additions or variations to the Dealer [•]Agreement:]

47 [Notes in respect of which the issue proceeds are accepted by the Issuer in the United Kingdom andwhich are to be listed. The text set out below may be deleted if the Issuer is relying on any ofRegulation 13(4)(c) to (g).

[The Issuer confirms that it:

1. has complied with its obligations under the relevant rules (as defined in the Banking Act 1987(Exempt Transactions) Regulations 1997) in relation to the admission to and continuing listing ofthe Notes under the Programme and of any previous issues made under it and listed on the sameexchange as the Programme;

2. will have complied with its obligations under the relevant rules in relation to the admission to listingof such Notes by the time when such Notes are so admitted; [and]

3. has not, since the last publication, if any, in compliance with the relevant rules of information aboutthe Programme, any previous issues made under it and listed on the same exchange as theProgramme, or the Notes, having made all reasonable enquiries, become aware of any change incircumstances which could reasonably be regarded as significantly and adversely affecting its abilityto meet its obligations as Issuer in respect of the Notes as they fall due[./; and

4. has complied and will continue to comply with its obligations under the Regulations to lodge allrelevant information (as defined in the Regulations) in relation to any such Notes with the FinancialServices Authority in its capacity as competent authority under the Financial Services Act 1986("the UK Listing Authority").

(*French selling restrictions) - The appropriate French selling restrictions should be included. The French selling restrictions setout in the Dealer Agreement have been drafted on the basis that the Notes constitute obligations. If this is not the case, therestrictions may need to be altered.

114

If the Issuer is relying on Regulation 13(4)(b) and the Offering Circular does not include one, includehere a summary of the tax treatment relevant to United Kingdom resident holders of the Notes.]

[LISTING APPLICATIONThis Pricing Supplement comprises the details required to list the issue of Notes described herein

pursuant to the listing of the €7,000,000,000 Euro Medium Term Note Programme of Société Nationaledes Chemins de fer Français.]

[THE NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S.SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT") OR WITH ANYSECURITIES REGULATORY AUTHORITY OF ANY STATE OR ANY JURISDICTION OF THEUNITED STATES [AND THE NOTES COMPRISE BEARER NOTES THAT ARE SUBJECT TO U.S.TAX LAW REQUIREMENTS]. SUBJECT TO CERTAIN EXCEPTIONS, THE NOTES MAY NOTBE [OFFERED OR SOLD/OFFERED, SOLD OR DELIVERED] WITHIN THE UNITED STATES[OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS (AS DEFINED INREGULATION S UNDER THE SECURITIES ACT ("REGULATION S")). THIS PRICINGSUPPLEMENT HAS BEEN PREPARED BY THE ISSUER FOR USE IN CONNECTION WITHTHE OFFER AND SALE OF THE NOTES OUTSIDE THE UNITED STATES TO NON-U.S.PERSONS IN RELIANCE ON REGULATION S [AND WITHIN THE UNITED STATES TO"QUALIFIED INSTITUTIONAL BUYERS" IN RELIANCE ON RULE 144A UNDER THESECURITIES ACT ("RULE 144A") [AND FOR LISTING OF THE NOTES ON THE[LUXEMBOURG/PARIS] STOCK EXCHANGE]. PROSPECTIVE PURCHASERS AREHEREBY NOTIFIED THAT SELLERS OF THE NOTES MAY BE RELYING ON THEEXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACTPROVIDED BY RULE 144A]. FOR A DESCRIPTION OF THESE AND CERTAIN FURTHERRESTRICTIONS ON OFFERS AND SALES OF THE NOTES AND DISTRIBUTION OF THISPRICING SUPPLEMENT, SEE "SUBSCRIPTION AND SALE" IN THE OFFERING CIRCULAR.]

[STABILISINGIn connection with this issue, [insert name of Stabilising Manager] may over-allot or effect

transactions which stabilise or maintain the market price of the Notes at a level which might nototherwise prevail. Such stabilising, if commenced, may be discontinued at any time.]

MATERIAL ADVERSE CHANGE STATEMENT[Except as disclosed in this document, there/There]2 has been no significant change in the financial

or trading position of the Issuer or of the Group since [insert date of last audited accounts or interimaccounts (if later)] and no material adverse change in the financial position or prospects of the Issuer or ofthe Group since [insert date of last published annual accounts.]

2 If any change is disclosed in the Pricing Supplement, it will require approval by the Financial Services Authority in its capacity ascompetent authority under the Financial Services Act 1986 (for London-listed deals) or the Stock Exchange(s) as the case may be.Consideration should be given as to whether or not such disclosure should be made by means of a supplemental Offering Circular[comprising supplementary listing particulars] rather than in a Pricing Supplement.

RESPONSIBILITY

The Issuer accepts responsibility for the information contained in this Pricing Supplement which,when read together with the Offering Circular [and the supplemental Offering Circular] referred toabove, contains all information that is material in the context of the issue of the Notes.

Signed on behalf of the Issuer:

By:

Duly authorised

115

[THE BANKING ACT 1987 (EXEMPT TRANSACTIONS) REGULATIONS 1997

[The Notes constitute [commercial paper] [shorter/longer term debt securities]3 issued inaccordance with regulations made under section 4 of the Banking Act 1987. The Issuer of the Notes isSociété Nationale des Chemins de fer Français, which is not an authorised institution or a Europeanauthorised institution (as such terms are defined in the Banking Act 1987 (Exempt Transactions)Regulation 1997). Repayment of the principal and payment of any interest or premium in connectionwith the Notes has not been guaranteed by an authorised institution, or a European authorisedinstitution4.]

[The Issuer (a) has complied with its obligations under the listing rules of the Luxembourg StockExchange in relation to the admission to and continuing listing of any Notes issued under the Programmeand of any previous issues made by it under the Programme and listed on the same exchange; (b) confirmsthat it will have complied with its obligations under the listing rules of the Luxembourg Stock Exchangein relation to the admission to listing of the Notes by the time when the Notes are so admitted; [and] (c)has not, since the last publication of information in compliance with the listing rules of the LuxembourgStock Exchange about the Programme, any previous issues made by it under the Programme and listedon the Luxembourg Stock Exchange, or the Notes, having made all reasonable enquiries, become awareof any change in circumstances which could reasonably be regarded as significantly and adverselyaffecting its ability to meet its obligations as Issuer in respect of the Notes as they fall due[; and (d) hascomplied and will continue to comply with its obligations under the Banking Act 1987 (ExemptTransactions) Regulations 1997 to lodge all relevant information in relation to the Notes with theFinancial Services Authority in its capacity as competent authority under the Financial Services Act1986]5.]6

3 Include "commercial paper" if Notes must be redeemed before their first anniversary. Include "shorter" if Notes may not beredeemed before their first anniversary but must be redeemed before their third anniversary. Include "longer" if Notes may notbe redeemed before their third anniversary.

4 Unless otherwise permitted, text to be included for all Notes (including Notes denominated in sterling) in respect of which theissue proceeds are accepted by the Issuer in the U.K.

5 Wording only applies where the Issuer is relying on Regulation 13(4)(b).

6 Unless otherwise permitted, text to be included for all Notes which are to be listed on an EEA Stock Exchange. The text wouldnot be required if the Issuer is relying on Regulation 13(4)(c) to (g) of the Regulations.

116

GENERAL INFORMATION

1 Notes have been accepted for clearance through the Euroclear and Clearstream, Luxembourgclearing systems. The Common Code, the International Securities Identification Number (ISIN)and (where applicable) the Sicovam number, if any, for each Series will be contained in the PricingSupplement relating thereto. The Issuer will make an application with respect to any RestrictedNotes of a Registered Series to be accepted for trading in book-entry form by DTC. Acceptance byDTC of Restricted Notes of each Tranche of a Registered Series will be confirmed in the applicablePricing Supplement. The CINS and CUSIP numbers, if any, for each Series will be contained in thePricing Supplement relating thereto. Application may be made for acceptance for trading ofRestricted Notes in Portal.

2 The Issuer has obtained all necessary consents, approvals and authorisations in the Republic ofFrance in connection with the issue and performance of the Notes.

3 In connection with the application to list the Notes issued under the Programme on theLuxembourg Stock Exchange, a legal notice relating to the issue of the Notes and copies of theconstitutive documents of the Issuer will be deposited with the Chief Registrar of the District Courtin Luxembourg ("Greffier en Chef du Tribunal d'Arrondissement de et à Luxembourg") where suchdocuments may be examined and copies obtained. The Luxembourg Stock Exchange has allocatedto the Programme the number 12027 for listing purposes.

Prior to listing of any Notes on Euronext Paris, a prospectus incorporating this Offering Circularand referred to as the "Document de Base" is required to be submitted to, and approved by, theCOB and a registration number granted by the COB with respect to it. In addition, the PricingSupplement applicable to an issue of Notes is currently required to be approved at the time of therelevant issue. The relevant approval in relation to this Offering Circular has not at the date of thisOffering Circular been granted by the COB and no registration number has been granted by theCOB in relation to any Document de Base. The relevant approval in relation to each issue of Noteswill be evidenced by the issue of a visa by the COB. The visa number will be disclosed in theapplicable Pricing Supplement.

4 In connection with any application to list Notes on Euronext Paris:

(a) a legal notice relating to the issue of such Notes will be published in the Bulletin des AnnoncesLégales Obligatoires prior to such listing;

(b) the Pricing Supplement applicable to such issue will be submitted to the approval of the COBand the relevant approval will be evidenced by the issue of a visa by the COB which will bedisclosed in the relevant Pricing Supplement applicable to the relevant Notes and bypublication in the Bulletin d'Euronext Paris S.A.; and

(c) the Pricing Supplement applicable to such issue will specify the additional places in Paris atwhich documents required to be made available for inspection may be inspected duringnormal business hours.

5 Save as disclosed herein, there has been no significant change in the financial or trading position ofthe Issuer or the Group since 31st December, 2000 and no material adverse change in the financialposition or prospects of the Issuer or the Group since 31st December, 2000.

6 Except as disclosed in this Offering Circular, the Issuer is not involved in any legal or arbitrationproceedings which are material in the context of the Programme or the issue of the Notes under theProgramme nor, so far as the Issuer is aware, are any such proceedings pending or threatened.

7 Each Bearer Note, Receipt, Coupon and Talon will bear the following legend: "Any United Statesperson who holds this obligation will be subject to limitations under the United States income taxlaws, including the limitations provided in Sections 165(j) and 1287(a) of the Internal RevenueCode".

8 Copies of the latest annual report and consolidated accounts of the Issuer and all amendments andsupplements (including the Pricing Supplements) to this Offering Circular may be obtained free ofcharge, and copies of the Agency Agreement and the Deed of Covenant will be available forinspection, at the specified offices of each of the Paying Agents during normal business hours, solong as any of the Notes is outstanding. The Issuer does not publish interim balance sheets orincome statements.

117

9 Notes (including Sterling Notes) in respect of which the issue proceeds are to be accepted by theIssuer in the United Kingdom and which are issued pursuant to an exempt transaction underregulation 13(1) or (3) of the Banking Act 1987 (Exempt Transactions) Regulations 1997 (the"Regulations") will constitute commercial paper, or shorter term debt securities or longer termdebt securities (in each case, as defined in the Regulations), as specified in the applicable PricingSupplement, in each case issued in accordance with regulations made under section 4 of the BankingAct 1987. The Issuer is not an authorised institution or a European authorised institution (as suchterms are defined in the Regulations) and repayment of the principal and payment of any interest orpremium in connection with such Notes will not be guaranteed by an authorised institution or aEuropean authorised institution.

In relation to any Notes which are issued pursuant to an exempt transaction under regulation 13(3)of the Regulations where such Notes would fall within regulation 13(4)(a) or (b) of the Regulations,the Issuer confirms that:

(a) as at the date hereof, it has complied with its obligations under the relevant rules (as defined inthe Regulations) in relation to the admission to and continuing listing of the Notes issuedunder the Programme and of any previous issues made under it and listed on the sameexchange as the Programme;

(b) it will have complied with its obligations under the relevant rules in relation to the admissionto listing of such Notes by the time when such Notes are so admitted; and

(c) as at the date hereof, it has not, since the last publication, if any, in compliance with therelevant rules of information about the Programme, any previous issues made under it andlisted on the same exchange as the Programme, or any Notes falling within regulation 13(4)(a)or (b) of the Regulations, having made all reasonable enquiries, become aware of any changein circumstances which could reasonably be regarded as significantly and adversely affectingits ability to meet its obligations as issuer in respect of such Notes as they fall due.

In relation to Notes which are to be exempt transactions under regulation 13(3) of the Regulationsand fall within regulation 13(4)(b) of the Regulations, the Issuer confirms that, as at the date hereof,it has complied and will continue to comply with its obligations under the Regulations to lodge allrelevant information (as defined in the Regulations) in relation to any such Notes with the UKListing Authority.

10 The European Union is currently considering proposals for a new directive regarding the taxation ofsavings income. Subject to a number of important conditions being met, it is proposed that MemberStates will be required to provide to the tax authorities of another Member State details ofpayments of interest or other similar income paid by a person within its jurisdiction to an individualresident in that other Member State, subject to the right of certain Member States to opt instead fora withholding system for a transitional period in relation to such payments, and subject to theproposals not being required to be applied to Notes issued before 1st March, 2001 or to Tranches ofNotes issued before 1st March, 2002 and fungible with Notes issued before 1st March, 2001 or wherethe original prospectus was certified before that date. The proposals are not yet final, and they maybe subject to further amendment and/or clarification.

11 The Contracts (Rights of Third Parties) Act 1999 (the "Act") was enacted on llth November 1999and provides that persons who are not parties to a contract governed by the laws of England andWales or Northern Ireland may be given enforceable rights under such contract. Unless specificallyprovided in the relevant Pricing Supplement to the contrary, this Programme expressly excludes theapplication of the Act to any issue of Notes under the Programme.

118

ISSUERSociété Nationale des Chemins de fer Français

34, rue du Commandant Mouchotte75699 Paris Cedex 14

France

DEALERSABN AMRO Bank N.V.

250 BishopsgateLondon EC2M 4AA

England

BNP PARIBAS10 Harewood AvenueLondon NW1 6AA

England

Deutsche Bank AG LondonWinchester House

1 Great Winchester StreetLondon EC2N 2DB

England

Morgan Stanley & Co. International Limited25 Cabot Square

Canary WharfLondon E14 4QA

England

Nomura International PLCNomura House

1 St Martins-le-GrandLondon EC1A 4NP

England

UBS Warburg1 Finsbury AvenueLondon EC2P 2PP

England

ARRANGERABN AMRO Bank N.V.

250 BishopsgateLondon EC2M 4AA

England

FISCAL AGENT, PRINCIPAL PAYING AGENT AND TRANSFER AGENTDeutsche Bank AG London

Winchester House1 Great Winchester Street

London EC2N 2DBEngland

REGISTRAR AND TRANSFER AGENT

Bankers Trust Company, New YorkFour Albany Street

New York, NY 10006U.S.A.

PAYING AGENT AND TRANSFER AGENT

Deutsche Bank Luxembourg S.A.2, boulevard Konrad Adenauer

L-1115 LuxembourgLuxembourg

CALCULATION AGENTDeutsche Bank Luxembourg S.A.2, boulevard Konrad Adenauer

L-1115 LuxembourgLuxembourg

LUXEMBOURG LISTING AGENT

Deutsche Bank Luxembourg S.A.2, boulevard Konrad Adenauer

L-1115 LuxembourgLuxembourg

PARIS LISTING AGENT

ABN AMRO Fixed Income France65, rue de Courcelles

75008 ParisFrance

Calan Ramolino & Associés191, avenue Charles de Gaulle

92200 Neuilly-sur-SeineFrance

AUDITORS

Ernst & Young Audit34, boulevard Haussmann

75009 ParisFrance

LEGAL ADVISERS

To the Issuer

in respect of French law

Société Nationale des Chemins de fer FrançaisDirection Juridique

10, place de Budapest75436 Paris Cedex 09

France

To the Dealers

in respect of English law

Allen & OveryEdouard VII

26, boulevard des Capucines75009 Paris

France

RF59812 Prinfed by Royle Financial Prinl