technicolor - 2018 Registration document

6 FINANCIAL STATEMENTS NOTE 10 PROVISIONS & CONTINGENCIES

Contingencies 10.2

GRI [103-2 Anti-competitive behavior] [103-3 Anti-competitive behavior] [103-2 Environmental compliance] [103-3 Environmental compliance] [103-2 Socioeconomic compliance] [103-3 Socioeconomic compliance] [206-1] [307-1] [419-1]

In the ordinary course of the business, the Group is involved in various legal proceedings and is subject to tax, customs and administrative regulation. The Group’s general policy is to accrue a reserve when a risk represents a contingent liability towards a third-party and when the probability of a loss is probable and it can be reasonably estimated. Significant pending legal matters include the following: POLAND TAX PROCEEDINGS The French and Polish Competent Authorities have finally come to an agreement to conclude a Mutual Agreement Procedure initiated in 2009. This procedure aimed at eliminating double taxation further to a transfer pricing adjustment on 2003. This arrangement has definitely settled a decade-long dispute as well as its related ongoing litigations/procedures in Poland. The financial consequences of this agreement were booked in 2018 further to the requests of the Competent Authorities. This led to a cash collection of about €9 million ( i.e. Zlotys 40.3 million) by the Polish subsidiary (half of which being late interests) versus a cash outflow of €4 million for the French subsidiary. FRANCE VAT AUDIT The French tax authorities audited the Company for 2009 and 2010 tax years and issued a VAT assessment amounting to €1 million (for 2009) and €1 million (for 2010) related to a subsidy granted to a former subsidiary (Novatech) on which VAT was mistakenly charged. Following receipt of the recovery notice in September 2014, the Company paid this reassessment. The Company therefore filed different claims: before the French Ministry of Finance requesting the refund of the wrongly paid VAT to Novatech (liquidated in April 2014), and before the administrative Tribunal of Cergy-Pontoise. In September 2018 the French tax authorities decided to give up this reassessment and repaid the €2 million to the Company in December 2018. TAOYUAN COUNTY FORM RCA EMPLOYEES’ SOLICITUDE ASSOCIATION In April 2004, the plaintiff, Taoyuan County Former RCA Employees’ Solicitude Association (the “Association”), which is a non-profit entity

composed of former RCA employees of Technicolor’s subsidiary TCETVT (or heirs of former workers) who claim to have worked at TCETVT’s former manufacturing facility in Taoyuan (the “Facility”) filed a purported class action under Article 44-1 of the Taiwan Code of Civil Procedure in the Taipei District Court, Taiwan, Republic of China against Technicolor and General Electric entities. The Association is alleging they were exposed to various contaminants while living and working at the Facility, which allegedly caused them to suffer various diseases, including cancer, or caused them emotional distress from fear that living and working at the Facility increased their risk of contracting diseases. The Association originally claimed damages of NTD 2.7 billion (€77 million at the December 31, 2018 exchange rate). The Taiwan court announced its ruling in April 2015 and entered judgment against Technicolor entities for approximately NTD 564 million (€16 million at the December 31, 2018 exchange rate) plus interest penalty. Appeals were filed, and in October 2017, the Taiwan High Court entered judgment against TCETVT, Technicolor SA, TCE Bermuda, and General Electric International, Inc. for approximately NTD 718 million (€21 million at the exchange rate as of December 31, 2018) plus late interest penalty (5% interest per annum starting September 2009). The Association, GEI, TCETVT, Technicolor SA and TCE Bermuda appealed the ruling to Taiwan’s Supreme Court which, on August 16, 2018: confirmed the Taiwan High Court decision of awarding • NTD 518 million (€15 million at the exchange rate as of December 31, 2018) in damages to 262 claimants; remanded the claims of 246 claimants for further proceedings at the • High Court. In May 2016, the Association brought a new suit against Technicolor entities and General Electric claiming damages in the amount of NTD 7.38 billion (€211 million at the December 31, 2018 exchange rate). The Association’s complaint offered no new argument or facts from the pending claims. Technicolor considers that it is General Electric’s legal and contractual obligation to indemnify it and its subsidiaries for the Association’s claims as, among other reasons, TCETVT operated for less than 4 years after its sale to the Technicolor group while GEI, and its predecessor-in-interest RCA Corporation, owned and operated TCETVT for approximately twenty years.

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TECHNICOLOR REGISTRATION DOCUMENT 2018