TECHNICOLOR_REGISTRATION_DOCUMENT_2017

6 - FINANCIAL STATEMENTS

Notes to the consolidated financial statements

Changes in outstanding options & free shares 9.3.2. Movements in the number of options and free shares outstanding with their related weighted average exercise prices are as follows for 2017 and 2016: Number of options and free shares Weighted Average Exercise Price (in euros) Outstanding as of December 31, 2015 (with an average remaining contractual life of 6 years – excluding free shares) 17,907,823 4.43 (ranging from 0 to 7) Of which exercisable 3,251,110 4.03 Granted* 3,040,500 na Delivered (Free Share Plan) (250) na Delivered (MIP) (1,802,677) 3.36 Forfeited & other (1,538,467) 4.79 Outstanding as of December 31, 2016 (with an average remaining contractual life of 5 years – excluding free shares) 17,606,929 4.53 (ranging from 0 to 7) Of which exercisable 7,389,710 4.23 Granted* 4,507,500 na Delivered (Free Share Plan) (778,750) na Delivered (MIP) (436,461) 3.19 Forfeited & other (1,468,046) 5.87 Outstanding as of December 31, 2017 (with an average remaining contractual life of 4 years – excluding free shares) 19,431,172 4.48 (ranging from 0 to 7) Of which exercisable 11,087,249 4.27 Related to 2016 and 2017 Long-Term Incentive Plan (LTIP). * Significant assumptions used The estimated fair values of the options granted were calculated using the Black&Scholes valuation model. The inputs into the model were as follows: Stock options plan granted in

December  2015

June  2015

April  2015

October  2014

June  2014

March  2014

October  2013

May & June 2013

June  2010

(in % and in euro)

Weighted average share price at measurement date

7.05

6.13 5.88

6.06 5.83

4.71 4.92

5.68 5.79

4.88 4.53

4.06 3.93

3.20 3.19

5.50 6.29

Weighted average exercise price

7.11

Expected volatility Expected option life*

40% 40% 40% 40% 40% 40% 40% 40% 52% 5 years 5 years 5 years 5 years 5 years 5 years 5 years 5 years 5 years 0.12% 0.17% 0.17% 0.13% 0.31% 0.62% 0.77% 0.62% 1.85% 0.7% 0.8% 0.8% 0% 0% 0% 0% 0% 0%

Risk free rate

Expected dividend yield

Fair value of option at measurement date 2.22 Expected option life is shorter than the contractual option life as it represents the period from grant date to the date on which the option is expected to be exercised. * 2.27 1.91 1.88 1.45 1.82 1.73 1.40 1.06

Factors that have been considered in estimating expected volatility for the long-term maturity stock option plans include: the historical volatility of Technicolor's shares over the longest ■ period available;

adjustments to this historical volatility based on changes in ■ Technicolor's business profile. For shorter maturity options, expected volatility was determined based on implied volatility on Technicolor's share observable at grant date.

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TECHNICOLOR REGISTRATION DOCUMENT 2017