TECHNICOLOR_REGISTRATION_DOCUMENT_2017

6 - FINANCIAL STATEMENTS Notes to the Parent Company Financial Statements

In 2012, as part of an inter-company transaction, the shares of Thomson Licensing SAS were valued €2.2 billion by a third-party valuation expert using discounted cash-flows confirmed by the multiples approach. As of December 31, 2015, a depreciation of €0.5 billion was recorded leading to a carrying amount of €1.7 billion. As of December 31, 2017, our shares in Thomson Licensing SAS were significantly depreciated in the context of the announcement of negotiations relating to the divestiture of the Patent Licensing business. This strategic transaction is in line with Technicolor’s objective to simplify the Group’s structure and re-allocate its capital and resources. This depreciation reflects an acceleration of the loss in value of our patent portfolio mainly due to the following factors: (i) useful life of patents becomes shorter due to more rapid changes in technology, (ii) market conditions become more competitive resulting in a lower than expected royalty rates per unit, and (iii) market player

behavior evolving towards more litigation rather than contractual based. The value in use of Thomson Licensing SAS was determined based on re-evaluation of net assets, considering the probable value of the patents’ disposal. The depreciation amounted to 1.4 billion based on a US$/€ exchange rate of 1.15 and on an assumption of mid-range earn-out. An 10% increase in the US$/€ exchange rate and a decrease in the earn-out corresponding to our estimated low range would result in an increase of the depreciation of €36 and €70 million, respectively. In relation with the shares in subsidiaries, depreciation on current accounts and loans to subsidiaries amounts to €60 million (see note 12.1).

Maturities of receivables included in other financial assets 7.2. (in million euros) 2018

11 12

2019 and later

GROSS VALUE

23

Depreciation NET VALUE

(18)

5

268

TECHNICOLOR REGISTRATION DOCUMENT 2017