technicolor - 2018 Registration document

6 FINANCIAL STATEMENTS

NOTE 9 BORROWINGS & FINANCIAL INSTRUMENTS

Covenants The Term Loan Debt does not contain a financial affirmative covenant. The RCF contains a single affirmative financial covenant which requires that the total gross debt be no more than 4.00 times Adjusted EBITDA on a trailing twelve-month basis (“Leverage covenant”) on June 30 and December 31 of each financial year, but this covenant is only applicable if there is an outstanding drawing of more than 40% of the RCF amount on June 30 or December 31 of each financial year. The €35 million credit line agreement signed with Crédit Agricole d’Île-de-France in July 2017 contains the same financial covenant but this covenant is only tested on December 31 of each financial year. Leverage covenant Total gross debt of the Group at December 31, 2018 must be no more than 4.00 times the Adjusted EBITDA of the Group for the twelve months ending December 31, 2018.

Since 3.85 is less than the maximum allowed level of 4.00, the Group meets this financial covenant. Other Restrictions In addition to certain information provision covenants, the agreements governing the Debt Instruments include certain negative covenants that restrict the ability of Technicolor SA to undertake various actions regarding indebtedness, investments and material changes in the general nature of the business. These restrictions are subject in each case to certain exceptions and limitations. In particular, the Group is subject to restrictions on its ability to, among other things and subject to certain exceptions: make restricted payments, if certain ratios are not met, in excess of • certain cumulative amounts, including payment of dividends, distributions, share purchases or redemptions, investments other than permitted investments, repayment of subordinated debt; incur additional financial debt in excess of certain cumulative amounts • and if certain ratios are not met and with certain carve outs; and make certain investments in joint ventures not controlled by the • Group and in which the Group has no veto right on material decisions, except to the extent the Group’s consolidated leverage ratio is under a threshold which decreases over time and subject to a certain cumulative amount and with certain carve-outs.

Gross Debt

€1,024 million €266 million

Covenant Adjusted EBITDA* Gross Debt/Covenant Adjusted EBITDA Ratio

3.85

Adjusted EBITDA in respect of the leverage covenant definition. *

Interest rate hedging operations 9.3 The Group has two interest rate hedging instruments outstanding at December 31, 2018. These instruments hedge future interest charges of the Group, which are principally indexed on a floating rate as shown in the table in note 9.2. The main characteristics are the following ones: Notional Hedge Issuance Maturity Fair value (1)

Receive 3m EURIBOR (2) /pay 0.22% 3m LIBOR capped at 3.00%

Interest rate swap

€240 million

May 2018 November 2021

(0.8)

Cap

U.S.$145 million

May 2018 November 2021

0.4

FAIR VALUE

(0.4)

Market value in million of euros at December 31, 2018. (1) EURIBOR floored at 0%. (2)

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TECHNICOLOR REGISTRATION DOCUMENT 2018