FORM 20-F THOMSON multimedia - Technicolor

As a result of the Tax Indemnification Agreement, Thomson S.A. paid us 0 30 million for 1998
(plus 0 21 million for the gross-up), 0 35 million for 1999 (plus 0 23 million in respect of the gross-up)
and 0 51 million for 2000 (plus 0 31 million in respect of the gross-up).
In addition, in 2000, we recorded a deferred income tax gain of 0 106 million, principally due to
0 25 million of timing differences and to 0 81 million on valuation allowance reversals concerning
mainly deferred tax assets of U.S. and France affiliates. This reversal was possible because of
confirmed profitability of these companies for three continuing years.
Net Income
Minority interests represented a net loss of 0 18 million in 2000 compared with a net loss of
0 7 million in 1999.
As a result of the factors discussed above, we posted net income of 0 394 million in 2000,
which represented an increase of 70% compared with net income of 0 231 million in 1999. Net
income as a percentage of net sales reached 4.3%, an increase of 0.8 percentage point compared
with 1999.
Earnings per share reached 0 1.56 in 2000, compared with 0 1.17 in 1999, or an increase
of 33.5%. This progression takes into account an increase in the average number of shares to
252.0 million shares in 2000 from 197.5 million in 1999 (restated to take into account the two-for-one
stock split realized on June 16, 2000) as a result of the November 1999 and October 2000 capital
increases.
U.S. GAAP
Under U.S. GAAP, we recorded a net income of 0 136 million for 2000 compared to
0 148 million in 1999. The lower net income under U.S. GAAP versus French GAAP in 2000 resulted
mainly from restatements related to the employee offerings of February 1999, November 1999 and
October 2000, to sale/ leaseback accounting and to tax effects of restatements.
Please refer to Notes 29 and 30 of our consolidated financial statements for a further discussion
on the principal differences between French GAAP and U.S. GAAP.
Liquidity and Capital Resources
Cash Flows
2001 2000 1999
(1 in millions)
Operational cash flow (1) ................................................................................. 1,418 679 588
Cash flow from operating activities ............................................................... 1,005 410 435
Cash flow used in investing activities ........................................................... (1,173) (398) (366)
Cash flow from financing activities................................................................ (34) 1,413 17
Net increase (decrease) in cash and cash equivalents................................ (240) 1,370 134
(1) We calculate our operational cash flow by adding operating income, depreciation and amortization of business segment
assets (see Note 3 to our consolidated financial statements), net variation in warranty reserves (see Note 20 to our
consolidated financial statements), amortization of customer contracts (see the consolidated statement of cash flows),
utilization of restructuring reserves (see Note 19 to our consolidated financial statements) and changes in net operating
working capital (as defined below).
Cash flow from operating activities
Cash flow from operating activities reached 0 1,005 million at the end of 2001, more than double
the 0 410 million reached at the end of 2000.
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