TECHNICOLOR_REGISTRATION_DOCUMENT_2017

6 - FINANCIAL STATEMENTS

Notes to the consolidated financial statements

PROVISIONS & CONTINGENCIES NOTE 10.

Provisions are recorded at the balance sheet date when the Group has an obligation as a result of a past event and when it is probable that an outflow of resources embodying economic benefits will be required and a reliable estimate can be made of the amount of the obligation. The obligation may be contractual, legal, regulatory or it may represent a constructive obligation deriving from the Group's actions where, by an established pattern of past practice, published policies or a sufficiently specific current statement, the Group has indicated to other parties that it will accept certain responsibilities, and as a result, has created a valid expectation on the part of those other parties that it will discharge those responsibilities. The recorded provision represents the best estimate of the expenditure required to settle the obligation at the balance sheet date. If a reliable estimate cannot be made of the amount of the obligation, no provision is recorded but details of the obligation are disclosed in the notes to the consolidated financial statements. Where the discounting effect is material, the recorded amount is the present value of the expenditures expected to be required to settle the related obligation. The present value is determined using pre-tax discount rates that reflect the assessment of the time value of money. Unwinding of discounts is recognized in the line item “Net financial income (expense)” in the consolidated statement of operations. ACCOUNTING ESTIMATES AND JUDGMENTS Technicolor’s management is required to make judgments about provisions and contingencies, including the probability of pending and potential future litigation outcomes that, by their nature, are dependent on future events that are inherently uncertain. In making its determinations of likely outcomes of litigation and tax matters, management considers the opinion of outside counsel knowledgeable about each matter, as well as developments in case law. PROVISIONS FOR RESTRUCTURING Provisions for restructuring costs are recognized when the Group has a constructive obligation towards third parties, which results from a decision made by the Group before the balance sheet date and supported by the following items: the existence of a detailed and finalized plan identifying the sites concerned, the location, the role and the approximate number of headcounts ■ concerned, the nature of the expenses that are to be incurred and the effective date of the plan; and the announcement of this plan to those affected by it. ■ The restructuring provision only includes the costs directly linked to the plan.

Detail of provisions 10.1.

Provisions for risks & litigations related to

Provisions for restructuring related to

Provisions for warranty

Continuing operations

Discontinued operations

Continuing operations

Discontinued operations

Total

(€ in millions)

As of December 31, 2016

46 23 (2)

68

36 10 (2) (5) (9)

14 46 (3)

4 3

168

Current period additional provision

15

97

Release

(14) (25)

(1) (4)

(22) (94) (16)

Usage during the period

(20)

(40)

Other movements and currency translation adjustments AS OF DECEMBER 31, 2017

(4)

(3)

-

-

43

41

30

17

2

133

Of which current

43

35

13 17

17

2

110

Of which non-current

-

6

-

-

23

The provisions for restructuring are mainly composed of termination costs related to continuing operations (for both employees and facilities).

240

TECHNICOLOR REGISTRATION DOCUMENT 2017