technicolor - 2019 Universal registration document

FINANCIAL STATEMENTS FINANCIAL ASSETS, FINANCING LIABILITIES & DERIVATIVE FINANCIAL INSTRUMENTS

Covenants Application scope

Leverage covenant Had the covenant applied at December 31, 2019, total gross debt of the Group could not have been more than 4.00 times the EBITDA of the Group in 2019. Under the terms of the RCF and the WF Line the gross debt does not include lease liabilities that became financial debt due to the application of IFRS 16 (see note 1.2.2). For information purposes, the calculation at December 31 was:

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 U.S.$125 million credit line agreement signed with Wells Fargo in November 2017 contains the same financial covenant but this covenant is only applicable if outstanding availability under the line is less than U.S.$25 million on June 30 or December 31 of each financial year. Because the outstanding drawings on the RCF were not more than 40% of the RCF amount and the outstanding availability under the Wells Fargo credit line was not less than U.S.$25 million, the covenant did not apply at December 31, 2019.

Gross Debt*

€1,026 million €324 million

Covenant Adjusted EBITDA*

Gross Debt/Covenant Adjusted EBITDA Ratio 3.17 Gross debt and Adjusted EBITDA in respect of the leverage covenant definition. *

Since 3.17 is less than the maximum allowed level of 4,00, the Group meets this financial covenant.

Cash and cash equivalents

8.4

Cash corresponds to cash in bank accounts as well as demand deposits. Cash equivalents corresponds to very liquid short-term investments, with an original maturity not exceeding three months, which are easily convertible at any time into a known amount of cash and for which the risk on the principal amount is negligible.

2019

2018

(in million euros)

Cash

58

134 157 291

Cash equivalents

7

CASH AND CASH EQUIVALENTS

65

Net financial income (expense)

8.5

6

Year ended December 31, 2019

2018

(in million euros) Interest income Interest expense (1)

1

3

(70) (69)

(43) (40)

Net interest expense

Net interest expense on defined benefit liability Change in fair value of on financial instruments

(7)

(6)

4

-

Foreign exchange gain/(loss) (2)

(2) (11)

10

Other

(15) (11) (51)

Other financial income (expense)

(15) (84)

NET FINANCIAL INCOME (EXPENSE)

2019 interest expense includes €23 million of interests on lease debts. (1) In 2018 the exchange result is mainly due to the impact of the depreciation of the BRL vs. the USD on an intercompany lending denominated in USD from the Group’s (2) subsidiary in Brazil to Technicolor SA.

TECHNICOLOR UNIVERSAL REGISTRATION DOCUMENT 2019 239