TECHNICOLOR_REGISTRATION_DOCUMENT_2017

- 6 FINANCIAL STATEMENTS Notes to the Parent Company Financial Statements

FINANCIAL ASSETS NOTE 7.

Financial assets include investments in subsidiaries that the Company intends to keep as well as other financial assets, such as loans. Investments are recorded at acquisition cost. When the carrying value of such investments is less than their gross value, a valuation allowance is set up for the difference. Provision for current accounts and loans are made if the net financial position is negative. In addition, a provision for risk is set aside for the surplus over the residual net negative balance. Carrying values of investments in subsidiaries and associates held for the long-term are based their value in use. Value in use is determined case by case based on the portion of equity represented by the shares, re-evaluation of net assets or recoverable value. Until the announcement, in December 2017, of the divestiture of the Patent Licensing business, the recoverable value of Thomson Licensing SAS was determined based on discounted future cash flow increased by the cash available. As of December 31, 2017, value in use of Thomson Licensing SAS was determined based on re-evaluation of net assets, considering the probable value of the patents’ disposal.

Variation of financial assets 7.1. (in million euros)

Shares in subsidiaries

Other financial assets (1)

Total financial assets

At December 31, 2016, Net

3,413 11,587 (8,174)

183 241

3,596 11,828 (8,232)

Cost

Accumulated depreciation

(58)

Acquisitions/ recapitalizations (2)

244

-

244

Disposals (3)

(464)

(161)

(625)

Depreciation (4)

(1,580)

(14)

(1,594)

Reversals of depreciation provisions (5) AT DECEMBER 31, 2017, NET

472

-

472

2,085

8

2,093 11,447 (9,354)

Cost

11,367

80

Accumulated depreciation

(9,282)

(72)

In 2017, includes, net of depreciation, €5 million of collateral and guarantees and €3 million of Technicolor treasury shares (see note 8.2). (1) Corresponds mainly, to the recapitalization of the following subsidiaries: Technicolor Delivery Technologies SAS (€202 million), Technicolor Home Entertainment Services of (2) America SAS (€21 million), Technicolor Animation Productions SAS (€17 million). Corresponds mainly to the impact of Thomson Sales Europe SA capital reduction (€461 million) concerning the shares in subsidiaries and to the reimbursement of loans borrowed (3) by Technicolor Videocassette Holdings (UK.) Ltd. (€82 million) and Technicolor Europe Ltd. (€79 million) concerning the other financial shares. In 2017, depreciation of shares in subsidiaries concerns mainly the subsidiaries Thomson Licensing SAS (€1,417 million), Technicolor USA Inc. (€126 million) and Mikros Image (4) SAS (€30 million). Depreciation of other financial assets relates mainly to the reclassification of depreciation that were booked as provisions in 2016 (€13 million). In 2017, reversal of depreciation on financial investments concerns mainly the subsidiaries Thomson Sales Europe SA (€459 million). (5)

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TECHNICOLOR

REGISTRATION DOCUMENT 2017