technicolor - 2018 Registration document

FINANCIAL STATEMENTS

NOTE 8 FINANCIAL ASSETS, FINANCING LIABILITIES & DERIVATIVE FINANCIAL INSTRUMENTS

IMPACT OF DERIVATIVE FINANCIAL INSTRUMENTS ON GROUP PERFORMANCE 8.6.2 As indicated in note 8.2.2.1, due to the practice of the Group treasury exposure which is monitored daily, the characteristics of its portfolio of for its foreign currency exposure of executing mainly short-term hedging instruments at the closing date is not representative of the derivative instruments, which are rolled over as a function of its global impact on the year’s results nor that of future years.

The table below presents the impact of hedging instruments on the Group’s performance in 2018.

Instruments not documented as hedges

Foreign currency hedges

Interest rate hedges

Impact of effective portion (1)

Impact of ineffective portion (2)

Impact of effective portion (1)

Impact of ineffective portion (3)

Impact of changes in value

(in million euros) Gross margin

2

- -

- - - -

- - - - - -

- -

Net interest expense

- - - -

Foreign currency gain (loss)

4

Other

-

- - - - -

Net financial result

4 4

NET OPERATING RESULTAT BEFORE TAX Gains/(losses) before tax resulting from the valuation at fair value of instruments hedging future cash flows

2

-

(3) (3)

- -

- -

(1) (1)

OTHER ELEMENTS OF GLOBAL RESULT

The effective portions of the hedges are recorded in the same item of the financial statement as the underlying hedged elements. (1) The ineffective portions of foreign exchange hedges come mainly from forward points on forward exchange operations and foreign currency swaps, which the Group excludes (2) from hedging relationships. Forward points related to hedges of financial exposures are recorded in “Net interest expense”. The forward points related to the hedges of commercial exposures are recorded in foreign currency gain/(loss). The ineffective portions of interest rate hedges come mainly from the time value of interest rate options (caps) and are excluded from the hedging relationship. (3)

The impact of the hedges of future cash flows is represented by the gains/(losses) before taxes on the fair value of instruments hedging such cash flows and is recorded in net equity. At December 31, 2018 the impact amounted to €(3) million.

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TECHNICOLOR REGISTRATION DOCUMENT 2018