PSA_GROUP_REGISTRATION_DOCUMENT_2017

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

Covenants None of the borrowings of the manufacturing and sales companies excluding Faurecia are subject to specific acceleration clauses based on minimum credit ratings. In some cases, the borrowings of manufacturing and sales companies are subject to clauses whereby the borrower gives the lenders certain guarantees that are commonly required within the automotive industry. They include: negative pledge clauses whereby the borrower undertakes not to „ grant any collateral to any third parties. These clauses nevertheless carry certain exceptions; “material adverse changes” clauses, which apply in the event of a „ major negative change in economic conditions; pari passu clauses, which ensure that lenders enjoy at least the „ same treatment as other creditors; “cross-default” clauses, whereby if one loan goes into default „ other loans become repayable immediately; clauses whereby the borrower undertakes to provide regular „ information to the lenders; clauses whereby the borrower undertakes to comply with „ applicable legislation; change of control clauses. „ In addition, EIB loans are dependent on the Group carrying out the projects being financed and, in some cases, require the Group to Drawing on the €3 billion syndicated credit facility established in April 2014 and amended in November 2015 (see Note 12.4) is subject to compliance with: a level of net debt of manufacturing and sales companies of less „ than of €6 billion; a ratio of the net debt of manufacturing and sales companies to „ consolidated equity of less than 1. The net debt of manufacturing and sales companies is defined and disclosed in Note 12.3. The Group’s equity is that listed under “Total Equity” in liabilities. The €1,200 million syndicated line of credit arranged on 15 December 2014 by Faurecia and comprising only one €1,200 million tranche expiring in June 2021 (see Note 12.4) contains only one covenant setting limits on debt. pledge a minimum amount of financial assets. All of these clauses were complied with in 2017.

Adjusted net debt (1) /EBITDA (2) maximum

2.50

Consolidated net debt. (1) EBITDA: Faurecia’s Earnings Before Interest, Tax, Depreciation and (2) Amortisation for the last 12 months. The compliance with this ratio is a condition to the availability of this credit facility. As of 31 December 2017, Faurecia complied with this ratio. Interest Rate Risks (2) Trade receivables and payables are due within one year and their value is not affected by the level of interest rates. Cash reserves and short-term financing needs of manufacturing and sales companies - excluding Automotive Equipment companies - are mainly centralised at the level of GIE PSA Trésorerie, which invests net cash reserves on the financial markets. These short-term instruments are indexed to variable rates or at fixed rates. The gross borrowings of manufacturing and sales companies - excluding Automotive Equipment companies - consist mainly of fixed-rate long-term loans. The proportion of the manufacturing and sales companies’ borrowings - excluding Automotive Equipment companies - at variable rates of interest is now 2%, based on the principal borrowed. Faurecia independently manages hedging of interest rate risks on a centralised basis. Such management is implemented through Faurecia’s Finance and Treasury Department, which reports to its executive management. Hedging decisions are made by a Market Risk Committee that meets on a monthly basis. A significant part of the gross borrowings (syndicated credit facility, sale of receivables, short-term loans, commercial paper as applicable) are at variable or renewable rates. The aim of the Group’s interest rate hedging policy is to reduce the impact of changes in short-term rates on earnings. The hedges arranged comprise mainly euro-denominated interest rate swaps. In order to benefit from historically low interest rates, 2- and 3-year maturity hedges have been set up. These hedges cover a part of the interest on variable rate borrowings, due in 2018 and first quarter of 2019, against a rise in interest rates. Some of Faurecia’s derivative instruments have qualified for hedge accounting under IAS 39 since 2008. The other derivative instruments purchased by Faurecia represent economic hedges of interest rate risks on borrowings but do not meet the criteria in IAS 39 for the application of hedge accounting. Faurecia is the only entity that holds cash flow hedges of interest rate risks.

The net interest rate position of manufacturing and sales companies is as follows:

31 December 2017

Intraday to one year

2 to 5 years

Beyond 5 years

Total

(in million euros)

Fixed rate

1,484 11,565

90

241

1,815

Total assets

Variable rate

-

-

11,565

Fixed rate (2,405)

(1,403)

(3,015) (6,823)

Total liabilities

Variable rate FIXED RATE

-

(213)

-

(213)

(921)

(1,313)

(2,774) (5,008)

VARIABLE RATE 11,565

(213)

- - -

11,352

NET POSITION BEFORE HEDGING

Fixed rate

(415)

383

(32)

Derivative financial instruments

Variable rate

415

(383) (930) (596)

32

FIXED RATE (1,336) VARIABLE RATE 11,980

(2,774) (5,040)

NET POSITION AFTER HEDGING

-

11,384

208

GROUPE PSA - 2017 REGISTRATION DOCUMENT