technicolor - 2018 Registration document

FINANCIAL STATEMENTS

NOTE 8 FINANCIAL ASSETS, FINANCING LIABILITIES & DERIVATIVE FINANCIAL INSTRUMENTS

history of customers. From time to time, the Group may decide to insure or factor without recourse trade receivables in order to manage underlying credit risk. The credit risk exposure on the Group’s trade receivables corresponds to the net book value of these assets. The maximum credit risk exposure on the Group’s cash and cash • equivalents was €291 million at December 31, 2018. The Group minimizes this risk by limiting the deposits made with any single bank and by making deposits primarily with banks that have strong credit ratings or occasionally by investing in diversified, highly liquid money market funds. As of December 31, 2018, 88% of the Group cash deposits are made with banks that have a counterparty rating of, at least A-1 according to Standard & Poor’s. The financial instruments used by the Group to manage its interest • rate and currency exposure are all undertaken with counterparts having a rating of at least A-2 according to Standard & Poor’s. Credit risk on such transactions is minimized by the foreign exchange policy of trading short-term operations. The marked-to-market carrying values are therefore a good proxy of the maximum credit risk.

The Group’s committed credit lines consist of: a receivables backed committed credit facility in an amount of • U.S.$125 million, €109 million at the December 31, 2018 exchange rate, (the “WF Line”) which matures in 2021, the availability of this credit line varies depending on the amount of receivables; a €250 million revolving credit facility maturing in 2021 (the “RCF”); • and a €35 million bilateral credit facility maturing in May 2019. • None of these facilities was drawn at December 31, 2018. CREDIT AND COUNTERPARTY RISK MANAGEMENT Credit risk arises from the possibility that counterparties may not be • able to perform their financial obligations to Technicolor. Credit risk on trade receivable is managed by each operational • division based on policies that take into account the credit quality and 8.2.4

Borrowings 8.3 The Group’s debt consists primarily of Term Loan Debt in U.S. dollars and in euros, issued by Technicolor SA in December 2016 and March 2017 and maturing in 2023. A loan in the amount of €90 million from the European Investment Bank (“EIB”) issued by Technicolor SA in January 2017 was prepaid in December 2018.

8.3.1

ANALYSIS BY NATURE

2018

2017 1,058

(in million euros)

Debt due to financial institutions

978

Bank overdrafts

-

-

Other financial debt

43

35

Accrued interest

3

4

DEBT UNDER IFRS

1,024 1,004

1,097 1,077

Total non-current

Total current

20

20

6

217

TECHNICOLOR REGISTRATION DOCUMENT 2018