TECHNICOLOR_REGISTRATION_DOCUMENT_2017

- 6 FINANCIAL STATEMENTS

Notes to the consolidated financial statements

Contractual obligations and commercial commitments 11.3. The following table provides information regarding the aggregate as firm commitments or obligations. When an obligation leading to maturities of contractual obligations and commercial commitments as future payments can be cancelled through a penalty payment, the of December 31, 2017 for which the Group is either obliged or future payments included in the tables are those that management conditionally obliged to make future cash payments but cannot be has determined most likely to occur.

recognized in the balance sheet. This table includes firm commitments that would result in unconditional or conditional future payments but excludes all options since the latter are not considered

Amount of commitments by maturity

2017 Less than 1 year

1 – 3 years

3 – 5 years More than 5 years

(in million euros)

Off-balance sheet obligations Unconditional future payments Operating leases (see note 4.5) Other unconditional future payments (1)

309

86

100

43

80

25

6

8

6

5

TOTAL UNCONDITIONAL FUTURE PAYMENTS Conditional future payments Guarantees given and other conditional future payments TOTAL CONDITIONAL FUTURE PAYMENTS

334

92

108

49

85

61

13

1

- -

47

61

13

1

47

Other unconditional future payments relate mainly to the maintenance costs associated with the lease. (1)

The Group provides certain guarantees to third parties (financial institutions, customers, partners and government agencies) to ensure the fulfilment of contractual obligations by Technicolor and its consolidated subsidiaries in the ordinary course of their business. The guarantees are not shown in the table above as they do not increase the Group’s commitments in relation to the initial commitments undertaken by the entities concerned. Subsidiaries within the Entertainment Services segment may provide guarantees to its customers on the products stored and then distributed against any risk or prejudice that may occur during manufacturing, storage or distribution. Such guarantees provided are covered by insurance and are therefore excluded from the table above. The disclosed guarantees comprise: guarantees given to tax offices for €13 million related to ongoing ■ tax litigations; a parental guarantee provided by Technicolor SA to secure the UK. ■ pension plan under section 75 for €47 million; various operational guarantees granted to customs administrations ■ in order to exempt from duties goods transiting through customs warehouses for re-exportation, and transit guarantees in order that taxes on goods are only paid at their final destination in the import country. The maturity of these bank guarantees matches the one-month renewable term of the agreements.

Guarantees and commitments received amount to €32 million as of December 31, 2017. This amount is mainly related to the royalties from Trademarks licensees. On December 19, 2017, we entered into a 5-year replication services agreement with Sony, with an effective date of February 1, 2018. Pursuant to this agreement, a contract advance will be paid by Technicolor. The above table is only related to continuing entities. The net contractual obligations and commercial commitments taken by discontinued entities as of December 31, 2017 is nil (with future payments €7 million compensated by a guarantee received for the same amount). Total off-balance sheet unconditional future payments and conditional future payments as of December 31, 2016 amounted respectively to €424 million and €60 million on continuing entities.

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TECHNICOLOR

REGISTRATION DOCUMENT 2017