TECHNICOLOR_REGISTRATION_DOCUMENT_2017

- 2 OPERATING AND FINANCIAL REVIEW AND PROSPECTS Liquidity and capital resources

acquisition of businesses (net of cash acquired), which amounted to ■ €25 million in 2017, compared to €21 million in 2016. In 2017, it corresponded mainly to the acquisition of the LG Electronics set-top-box business for €15 million. In 2016, it corresponded mainly to a complementary payment for €18 million related to the acquisition of Cinram Inc.; proceeds from sales of equity holdings, which amounted to €11 in ■ 2017 compared to €52 million in 2016 (net of cash in companies disposed of). In 2017, it corresponded mainly to a second payment €8 million related to the disposal of Digital Cinema in 2016. In 2016, it corresponded mainly to the disposal of SV Holdco for €29 million, the disposal of Media-Navi for €11 million, the minimum consideration following the Digital Cinema activity disposal for €5 million, and the disposal of available-for-sale investments. Discontinued Operations Net cash used in discontinued operations was €1 million in 2017 compared to €1 million net cash generated in 2016. Net cash used in financing activities Continuing operations Net financing cash used in continuing activities was €28 million in 2017 compared to €331 million in 2016. The net cash used in 2017 was primarily for repayment of borrowings for a net amount of €603 million, consisting of prepayment of the Old Term Loan Debt for €553 million, normal scheduled repayments for €10 million and other repayments for €40 million. In addition to New Term Loan Debt issued in December 2016, €275 million and US$300 million maturing 2023 were issued in March 2017, as well as a

loan from the European Investment Bank (“EIB”) for €90 million in January 2017. The net cash used in 2016 was primarily for repayment of borrowings for a net amount of €775 million, consisting of prepayment of the Old Term Loan Debt for €701 million, normal scheduled repayments for €67 million and other repayments for €7 million. Net cash received was from New Term Loan Debt issued in December 2016 for €450 million. For more information, please refer to note 11.2 to the Group’s consolidated financial statements. Discontinued operations Net cash used in discontinued operations was €3 million in 2017 compared to €7 million generated in 2016. FINANCIAL RESOURCES 2.3.3 Gross financial debt totaled €1,097 million (IFRS value) at the end of 2017, compared with €1,050 million at the end of 2016. At December 31, 2017, financial debt consisted primarily of €1,058 million of term loans issued in 2016 and 2017. At December 31, 2016, financial debt consisted primarily of €1,022 million of term loans issued in 2013, 2014, 2015 and 2016. Financial debt due within one year amounted to €20 million at the end of 2017, compared with €52 million at the end of 2016. At December 31, 2017 the Group had €319 million of cash and deposits, compared with €371 million at December 31, 2016. For more detailed information on the Group’s debt, please refer to note 8.3 to the Group’s consolidated financial statements.

43

TECHNICOLOR

REGISTRATION DOCUMENT 2017