TECHNICOLOR_REGISTRATION_DOCUMENT_2017

6 - FINANCIAL STATEMENTS Notes to the Parent Company Financial Statements

GENERAL INFORMATION NOTE 1. The Technicolor group is a leader in Media & Entertainment Services, developing and monetizing next-generation video and audio technologies. Technicolor SA is the holding Company of the Group and manages the cash of the Group’s subsidiaries. These notes are an integral part of these annual financial statements. They contain additional information relating to the statements of financial position and of operations and give a true and fair view of the Company’s assets, financial position and results. Information which is not mandatory is disclosed only if material. On January 3, 2017, Technicolor SA borrowed 90 million euros from European Investment Bank (EIB) at a fixed interest rate of 2.542% and a maturity of 6 years. On March 30, 2017, Technicolor SA implemented two new Term Loans with a maturity on December 2023: 275 million euros at an interest rate of EURIBOR 3 months ■ +300 bps with EURIBOR subject to a 0.00% floor; 300 million U.S. dollars at an interest rate of LIBOR 3 months ■ +275 bps with LIBOR subject to a 0.00% floor. The proceeds of these borrowings have been primarily used to reimburse the Old Term Loans maturing in 2020 (see note 9.2 for further details). The objective of the refinancing was mainly to allow Technicolor to borrow funds at a lower rate and to extend its debt maturity profile. Signature of a bilateral credit facility In July 2017, Technicolor SA signed with a bank a bilateral multicurrency credit agreement (euro and U.S. dollar) maturing on May 2019, for a maximum principal of 35 million euros, at an interest rate of LIBOR +1.6% (LIBOR subject to a 0.00% floor). This credit facility, which comes in addition to the RCF of 250 million euros implemented in December 2016, is mainly dedicated to the financing of the working capital of the Company. The contract Main events of the year 1.1. Debt refinancing

transaction is in line with Technicolor’s objective to simplify the Group’s structure and allocate its capital and resources to its operating business. In this context, the value in use of the Thomson Licensing SAS’s shares has been re-estimated and a depreciation of 1.4 billion was recorded as of December 31, 2017 (see note 7.1).

Accounting policies 1.2. Basis of preparation 1.2.1.

The annual financial statements are drawn up according to the accounting standards defined by the French General Chart of Accounts ( Plan Comptable Général ) and the French Commercial Code. The guidelines and recommendations of the Autorité des normes comptables , the Ordre des Experts Comptables and the Compagnie Nationale des Commissaires aux Comptes are also applied. The financial statements were approved by the Board of Directors of Technicolor SA on February 21, 2018. Pursuant to French law, the financial statements will be considered as definitive when approved by Company’s shareholders at the Ordinary Shareholders’ Meeting which should take place in April 2018. The methods used to prepare the 2017 accounts remain unchanged compared to previous year. The Company applies the provisions of the ANC 2015-05 regulation, approved by decree on December 28, 2015. This regulation, mandatory from January 1, 2017, aims to specify the accounting treatments of forward financial instruments and hedging operations. In this context, the Company has supplemented information in the notes relating to hedging transactions (see notes 9.4 and 12.4). The impact of this regulation on the Company’s balance sheet and income statement is not significant. These financial statements are presented in euro, the functional currency of Technicolor SA and have been rounded to the nearest million. Use of estimates 1.2.2. The process of drawing up the parent company financial statements involves using certain estimates and assumptions to calculate the figures presented in the Statements of Financial Position and of Operations. The Company periodically reviews its valuations and estimates based on its past experience and various other factors considered reasonable and relevant for the determination of the fair estimates of the assets and liabilities’ carrying value and of the revenues and expenses. The actual results could significantly differ from these estimates depending on different conditions and assumptions.

includes covenants (see note 9.2.2). Patent Licensing business

On December 18, 2017, the Company announced being in negotiations for the divestiture of its patent licensing business. This

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TECHNICOLOR REGISTRATION DOCUMENT 2017