technicolor - 2018 Registration document

FINANCIAL STATEMENTS

NOTE 7 FINANCIAL ASSETS

Financial assets

NOTE 7

Financial assets include investments in subsidiaries that the Company intends to keep as well as other financial assets, such as loans. Investments are recorded at acquisition cost. When the value in use of such investments is less than their gross value, a valuation allowance is set up for the difference. Provision for current accounts and loans are made if the net financial position is negative. In

addition, a provision for risk is set aside for the surplus over the residual net negative balance. Investments in subsidiaries and associates held for the long-term are valuated based on their value in use which is determined case by case based on the portion of equity represented by the shares, on re-evaluation of net assets or on recoverable value.

Variation of financial assets

7.1

Shares in subsidiaries

Other financial assets (1)

Total financial assets

(in million euros)

At December 31, 2017, Net

2,085 11,367 (9,282)

8

2,093 11,447 (9,354)

Cost

80

Accumulated depreciation

(72)

552

-

552

Acquisitions/recapitalizations (2)

Disposals (3)

(4)

(1) (1)

(5)

Depreciation (4)

(289)

(290)

Reversals of depreciation provisions (5) AT DECEMBER 31, 2018, NET

408

-

408

2,752 11,915 (9,163)

6

2,758 11,994 (9,236)

Cost

79

Accumulated depreciation

(73)

In 2018, includes, net of depreciation, €5 million of collateral and guarantees and €1 million of Technicolor treasury shares (see note 8.2). (1) Corresponds mainly, to the acquisition of the following subsidiaries: Technicolor Canada Inc. (€418 million) and The Moving Picture Company Ltd (€100 million) and the (2) recapitalization of Technicolor USA Inc. (€33 million). Corresponds to the liquidation of Thomson Investment India B.V.I. subsidiary (€4 million) and an impact of (€1 million) concerning the Technicolor treasury shares. (3) In 2018, depreciation on shares in subsidiaries concerns mainly the subsidiaries Technicolor USA Inc. (€155 million), Thomson Licensing SAS (€111 million) and Technicolor (4) Delivery Technologies SAS (€15 million). Depreciation of other financial assets relates to Technicolor treasury shares. In 2018, reversal of depreciation on shares in subsidaries concerns mainly the subsidiaries Gallo 8 SAS (€390 million) and Société Française d’Investissement et d’Arbitrage – (5) Sofia SA (€13 million). The value in use of Thomson Licensing SAS was determined on the estimated fair value (future discounted cash flow increased of the cash available). This recoverable value takes into account notably the earnout related to the sale of Patent Licensing business, dated July 2018, and the announcement of the sale of R&I business. The depreciation of the shares equals to 111 million euros. A 10% decrease of the earnout would generate additional depreciation of 13 million euros. In relation with the shares in subsidiaries, depreciation on current accounts and loans to subsidiaries amounts to €62 million (see note 12.1). Maturities of receivables included in other financial assets 7.2

6

(in million euros) 2019 2020 and later GROSS VALUE

18

5

23

Depreciation NET VALUE

(18)

5

261

TECHNICOLOR REGISTRATION DOCUMENT 2018