PSA_GROUP_REGISTRATION_DOCUMENT_2017

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2017 Notes to the consolidated financial Statements at December 2017

DEFERRED TAX ASSETS AND LIABILITIES 14.4.

31 December 2017

31 December 2016

(in million euros)

Tax credits

13

-

Deferred tax assets on tax loss carryforwards Gross (1)

5,007

5,190 (1,719)

Valuation allowances

(2,649)

Previously unrecognised deferred tax assets (2) Deferred tax asset offset (French tax group) (3)

(1,741) (534)

(2,894)

(453)

Other deferred tax assets offset

(31)

(9) 115

Total deferred tax assets on tax loss carryforwards

52

Other deferred tax assets DEFERRED TAX ASSETS

739 804

478 593

Deferred tax liabilities before offsetting of the French tax group (4)

(1,431)

(1,348)

Deferred tax liabilities offset (French tax group) (3)

534

453

DEFERRED TAX LIABILITIES (895) The gross amount of deferred tax assets corresponding to tax loss carryforwards represents all deferred tax assets corresponding to tax (1) losses that can be carried forward, regardless of whether they were recognised on the balance sheet at 31 December 2017. Of the impaired unrecognised deferred tax assets, €671 million (€722 million at 31 December 2016) are related to Faurecia, and €781 million (2) are related to the French tax group (€1,883 million at 31 December 2016). Offsetting consists of presenting on the face of the balance sheet the net deferred tax position of the French tax group, with deferred tax (3) assets covered by deferred tax liabilities, taking into account the legal restrictions on the use of tax loss carryforwards (see Note 14.1). The main temporary differences that generate deferred tax liabilities arise from the capitalisation of research and development costs and (4) differences in amortisation or depreciation methods or periods. (897)

Tax loss carryforwards relating to the French tax group totalled €11,788 million at 31 December 2017. The IAS 12 test led to the impairment of Opel and its subsidiaries’ deferred tax assets on loss carryforwards for €1,031 million and the deferred tax assets on temporary differences for €1,062 million, as well as the tax credits for €48 million.

EQUITY AND EARNINGS PER SHARE NOTE 15

EQUITY 15.1.

Peugeot S.A. shares are held in treasury for the following purposes: to award shares to employees, directors and officers of the „ Company or of companies or groupings that are affiliated with it when the stock options are exercised or when performance plans’ shares are allocated; to reduce the Company’s share capital. „ Analysis of share capital and changes B. in the year Rights issues Capital increase consecutive to the exercise of equity warrants As part of the capital increases carried out in the first half of 2014, equity warrants were issued to former shareholders, exercisable from the second year. During the year 2017, 128,295,194 warrants had been exercised, out of a total of 342,060,365 warrants issued. Their exercise resulted in the delivery of 44,903,318 new shares and a cash inflow of €288 million. The equity warrants (BSA) were exercisable until 29 April 2017. Employees shareholding plan In Q4 2017, the Group undertook a capital increase reserved for employees. Over 11,000 employees took up this “Accelerate” offer. It resulted in the delivery of 1,508,515 treasury shares.

Capital management policy A. The capital management policy relates to equity as defined under IFRS. It is designed to optimise the Group’s cost of capital and ensure that it has secure long-term capital resources. Managing capital essentially involves deciding the level of capital to be held currently or in the future and setting dividend policies. Equity breaks down into portions attributable to minority interests and to equity holders of the parent company. Equity attributable to equity holders of the parent is equal to the share capital of Peugeot S.A. less any treasury shares, plus reserves and retained earnings of the Group’s various business segments. Minority interests mainly represent non-Group shareholders of Faurecia. Equity attributable to minority interests varies in line with changes in the Faurecia Group’s consolidated equity (in particular net earnings and change in translation reserves) and - exceptionally - in the event of a sale, purchase or any other equity transaction carried out by Peugeot S.A. in respect of Faurecia. There are no financial covenants based on consolidated equity. The drawdown on the confirmed credit facilities of Peugeot S.A. and GIE PSA Trésorerie is subject to compliance with an equity-based financial ratio (see Note 12.4). Banque PSA Finance complies with the capital adequacy ratio and other capital requirements imposed under banking regulations.

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GROUPE PSA - 2017 REGISTRATION DOCUMENT