FORM 20-F THOMSON multimedia - Technicolor

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anticipates a favorable currency exchange rate fluctuation, the corporate treasury department may leave a portion of our estimated exposure unhedged. Financial exposure. Our general policy is for subsidiaries to borrow and invest excess cash in the same currency as their functional currency. In certain developing countries with depreciating currencies we may, however, elect to maintain deposits in U.S. dollars or euro rather than the subsidiaries’ functional currency. These transactions are performed through the corporate treasury department to the extent practical. In order to balance the currencies that the corporate treasury department borrows (both internally and externally) with currencies that we lend to affiliates, we enter into currency swaps, unless local regulation makes it impossible. At December 31, 2001, these swaps were primarily undertaken to swap euro deposited internally with our corporate treasury against U.S. dollars lent out by our corporate treasury department. Impact on Thomson. The majority of our net sales have traditionally been denominated in U.S. dollars. This reflects our strong presence in the United States, particularly with our Consumer Products division, and the important contribution of this division to our net sales. As a result, the fluctuations of the euro/U.S. dollar exchange rate have a significant translation impact on our net sales. Nevertheless, we believe that the impact of exchange rate fluctuations on our net income is limited due to certain natural hedges. ) Our euro/U.S. dollar commercial exposure is reduced since most of the U.S. dollar sales generated by European subsidiaries (mainly Patents and Licensing) are offset by their U.S. dollar purchases in Asia (mainly finished products). ) The euro/Japanese yen commercial exposure is also reduced since most of Japanese yen sales generated by European subsidiaries (mainly Patents and Licensing) are offset by their Japanese yen purchases in Asia (components and finished products). ) Remaining net exposures are generally hedged with financial counterparts as described above. Interest Rate Fluctuations We are exposed to interest rate risk exposure through our deposits and indebtedness. In order to reduce this exposure, we enter into interest rate swaps and forward rate agreements. Our policy is for all subsidiaries to borrow from, and invest excess cash with, our corporate treasury department, which in turn satisfies its net cash needs by borrowing from external counterparts. Subsidiaries that are unable to enter into transactions with our corporate treasury department because of local laws or regulations borrow or invest directly with local banks under policies established by the corporate treasury department. The corporate treasury department manages our financing by applying established procedures, and it hedges interest rate risk exposure in accordance with target ratios of fixed to floating debt, which are set periodically as a function of market conditions. Because a portion of our debt and all of our deposits are at floating rates, changes in interest rates will impact our net interest expense. In 2001, our average debt amounted to approximately 0 1,148 million, 28% at floating rates taking into account interest rate hedging operations. Our average deposits in 2001 amounted to approximately 0 1,121 million, 100% at floating rates. A 1% point variation in interest rates applied to the floating rate debt and deposits would have had an impact on our annual financial expenses of approximately 0 8.0 million. In 2000 our average debt amounted to 0 583 million, 63% at floating rates taking into account interest rate hedging operations, and our average deposits amounted to 0 597 million, 100% at floating rates. 98
Sensitivity To Exchange Rate Fluctuations The tables below provide an indication of the estimated future cash flows from our existing currency hedging instruments at December 31, 2001, shown by maturity dates and calculated based on the applicable forward rate. At December 31, 2001 2002 2003 2004 2005 2006 Thereafter (1 in millions) Commercial Transactions Forward purchases: euro.......................................................................... 341 — — — — — U.S. dollar................................................................ 147 — — — — — Japanese yen .......................................................... 57 — — — — — Canadian dollar ....................................................... 49 — — — — — Singaporean dollar .................................................. 33 — — — — — Mexican peso .......................................................... 20 — — — — — British pound ........................................................... 20 — — — — — Other currencies...................................................... 2 — — — — — Total..................................................................... 669 — — — — — Forward sales: U.S. dollar................................................................ 300 — — — — — euro.......................................................................... 138 — — — — — British pound ........................................................... 64 — — — — — Canadian dollar ....................................................... 51 — — — — — Japanese yen .......................................................... 38 — — — — — Swedish crown ........................................................ 15 — — — — — Australian dollar....................................................... 14 — — — — — Swiss franc .............................................................. 13 — — — — — Other currencies...................................................... 36 — — — — — Total..................................................................... 669 — — — — — Financial Transactions Forward purchases: euro.......................................................................... 1,127 — — — — — U.S. dollar................................................................ 126 — — — — — Other currencies...................................................... 28 — — — — — Total..................................................................... 1,281 — — — — — Forward sales: U.S. dollar................................................................ 976 — — — — — euro.......................................................................... 147 — — — — — British pound ........................................................... 78 — — — — — Canadian dollar ....................................................... 32 — — — — — Swiss franc .............................................................. 27 — — — — — Other currencies...................................................... 30 — — — — — Total..................................................................... 1,290 — — — — — Options Purchases: U.S. dollar................................................................ 27 — — — — — Total..................................................................... 27 — — — — — Sales: Canadian dollar ....................................................... 28 — — — — — Total..................................................................... 28 — — — — — 99
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As filed with the Securities and Ex
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INTRODUCTION In this Annual Report
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PART I ITEM 1 — IDENTITY OF DIREC
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1997 1998 1999 2000 2001 (1) 2001 1
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B — Exchange Rate Information Our
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we have limited operating history,
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projects that such shareholder may
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publishers, network operators and e
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division. Our relative decrease in
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we initiated at the end of 2001 our
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approval. Nextream combines busines
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) Digital Optical Components We pro
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our presence with global retailers
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product. Through Nextream, we will
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) Within personal media services, w
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We have obtained significant price
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Location Division Products Asia: Ba
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ITEM 5 — OPERATING AND FINANCIAL
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and 10% in 1999. The acquisition of
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Accordingly, under U.S. GAAP, the g
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effect of the events of September 1
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labor costs resulting from the impl
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Our operating income under U.S. GAA
Page 47 and 48: offerings, the accounting treatment
Page 49 and 50: GROWL in the United States. These p
Page 51 and 52: Other income and expense Other inco
Page 53 and 54: In evaluating our cash flow perform
Page 55 and 56: Guarantees given by subsidiaries of
Page 57 and 58: ITEM 6 — DIRECTORS, SENIOR MANAGE
Page 59 and 60: Initially Other business Principal
Page 61 and 62: Charles Dehelly was appointed Chief
Page 63 and 64: The following table, sets forth the
Page 65 and 66: French subsidiaries will pay bonuse
Page 67 and 68: our shares and have a nominal value
Page 69 and 70: exclusive right to grant licenses t
Page 71 and 72: In connection with the investigatio
Page 73 and 74: consumers who acquired certain tele
Page 75 and 76: are also permitted to offer investo
Page 77 and 78: The tables below set forth, for the
Page 79 and 80: ITEM 10 — ADDITIONAL INFORMATION
Page 81 and 82: general meeting affecting these rig
Page 83 and 84: oth for a period of up to five year
Page 85 and 86: an ordinary general meeting, or by
Page 87 and 88: that Euroclear France provide us at
Page 89 and 90: The shareholders, at an extraordina
Page 91 and 92: This discussion is intended only as
Page 93 and 94: ) a tax-exempt organization, ) a li
Page 95 and 96: A simplified certificate must state
Page 97: ITEM 11 — QUANTITATIVE AND QUALIT
Page 101 and 102: December 31, 2000 December 31, 2001
Page 103 and 104: ITEM 17 — FINANCIAL STATEMENTS No
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FORM 20-F THOMSON multimedia - Technicolor

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