TECHNICOLOR_REGISTRATION_DOCUMENT_2017

6 - FINANCIAL STATEMENTS

Notes to the consolidated financial statements

As described in note 8.2.1, the Group uses derivatives to reduce market risk. Technicolor uses principally forward foreign currency operations to hedge foreign exchange risk.

The Group’s financial derivatives are governed by standard ISDA (International Swaps and Derivatives Association, Inc..), Master Agreements or similar master agreements customary in the French market.

The Group executes operations on the over the counter derivatives markets on a short-term basis. 2017

2016

Assets

Liabilities

Assets

Liabilities

(in million euros)

Forward foreign exchange contracts - cash flow and fair value hedges

- -

1

3

1

TOTAL

1

3

1

Cash-flow hedges 8.5.1. Forward foreign currency operations hedging forecast exposures of commercial purchases and sales in foreign currencies are designated as cash flow hedges. During 2017, of the result on hedging instruments recognized in OCI at December 31, 2016, a gain of €1.6 million was recognized in profit (loss) from continuing operations as the underlying hedged amounts were realized. At December 31, 2017, a loss of €4.7 million on hedging instruments was recognized in OCI. In 2017 a total of €56 million in forecasted transactions for which hedge accounting had been applied did not occur and as a result the hedges were cancelled; the total foreign exchange gain/loss on the cancellation of the hedges was nil. Fair value hedges 8.5.2. Forward foreign currency operations hedging accounts payable and accounts receivable in foreign currencies are designated as fair value hedges. At December 31, 2017, there was a loss of €13.6 million on

the hedging instruments and a gain of €13.6 million on the hedged items. Ineffectiveness recognized in profit and 8.5.3. loss The forward points on the foreign currency hedges described above are excluded from the hedging relationship and are recognized in profit and loss. In 2017, this impact was a gain of €2 million (nil in 2016) booked in “Other financial income (expense), net”. Commitments related to financial 8.5.4. instruments Commitments related to financial instruments held by the Group generate both future cash payments and receipts. These commitments are disclosed in the following table. Forward exchange contracts, swaps and options for their related cash inflow and outflow amounts.

2017

(in million euros)

Currency swaps

514

TOTAL COMMITMENTS GIVEN

514

Currency swaps

514

TOTAL COMMITMENTS RECEIVED

514

228

TECHNICOLOR REGISTRATION DOCUMENT 2017