PSA_GROUP_REGISTRATION_DOCUMENT_2017

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

OFF-BALANCE SHEET COMMITMENTS AND CONTINGENT LIABILITIES RELATED 8.4. TO OPERATING ACTIVITIES

31 December 2017

31 December 2016

(in million euros)

Capital commitments for the acquisition of non-current assets

1,284

854

Orders for research and development work Minimum purchase commitments Non-cancellable lease commitments

22

33 53

173

1,867 3,346

1,473 2,413

TOTAL

Of which Opel Vauxhall Automotive segment

475

-

Minimum purchase commitments A. In order to speed up its growth and reduce costs, the Group has entered into cooperation agreements with other carmakers for the joint development and/or manufacture of mechanical sub-assemblies or vehicles. These joint arrangements enable the partners to share project costs, delivering economies of scale that translate into competitive advantage. Under the terms of these agreements, the Group is committed to financing investment in research and development and specific tooling and to taking delivery of a minimum quantity of products manufactured by the joint arrangements. If it fails to honour this minimum purchase commitment, it will be required to pay a penalty designed to cover the related production costs borne by the partner. Any adverse consequences of these commitments are reflected in the consolidated financial statements as soon as they are

considered probable, in the form of asset impairments or, if necessary, provisions for contingencies. For contracts where the products are manufactured by the Group’s partner, capacity reservation fees are accounted for as off-balance sheet commitments net of any provisions. Capital commitments for the acquisition B. of non-current assets This item corresponds mainly to commitments to purchase property, plant and equipment. It also includes the Group’s commitment towards the two Fonds d’Avenir Automobile (FAA - tier 1 and tier 2), two funds set up to support automotive equipment manufacturers. The Group’s total commitment to FAA amounted to €204 million. At 31 December 2017, the Group had already paid €145 million into these two funds.

Non-cancellable lease commitments C.

PERIODS

31 December 2017

31 December 2016

(in million euros)

2017 2018 2019 2020 2021 2022 2023

-

263 209 172 148 130 107

446 272 242

175 129

112

-

Subsequent years

491

444

TOTAL NON-CANCELLABLE LEASE COMMITMENTS

1,867

1,473

Non-cancellable leases are entered into in the normal course of business and consist mainly of leases on commercial property and vehicles. The lease terms reflect local practices in each country.

192

GROUPE PSA - 2017 REGISTRATION DOCUMENT