technicolor - 2018 Registration document

FINANCIAL STATEMENTS

NOTE 10 PROVISIONS & CONTINGENCIES

CATHODE RAY TUBES CASES United States

ENVIRONMENTAL MATTERS Some of Technicolor’s current and previously-owned manufacturing sites have a history of industrial use. Soil and groundwater contamination, which occurred at some sites, may occur or be discovered at other sites in the future. Industrial emissions at sites that Technicolor has built or acquired expose the Group to remediation costs. The Group has identified certain sites at which chemical contamination has required or will require remedial measures. Soil and groundwater contamination was detected at a former manufacturing facility in Taoyuan, Taiwan that was acquired from GE in a 1987 transaction. In 1992, the facility was sold to a local developer. Soil remediation was completed in 1998. In 2002, the Taoyuan County Environmental Protection Bureau (“EPB”) ordered remediation of the groundwater underneath the former facility. The groundwater remediation process is underway. EPB and TCETVT continue to negotiate over the scope of that work. Technicolor has reached an agreement with General Electric with respect to allocation of responsibility related to the soil and groundwater remediation. In addition to soil and groundwater contamination, the Group sells or has sold in the past products which are subject to recycling requirements and is exposed to changes in environmental legislation affecting these requirements in various jurisdictions. The Group believes that the amounts reserved and the contractual guarantees provided by its contracts for the acquisition of certain production assets will enable it to reasonably cover its safety, health and environmental obligations. However, potential problems cannot be predicted with certainty and it cannot be assumed that these reserve amounts will be precisely adequate.

In 2017, Technicolor entered into settlement agreements with the remaining plaintiffs in the legal actions that Technicolor had been defending in the United States pertaining to alleged anticompetitive conduct in the Cathode Ray Tubes (“CRT”) industry. With these final settlements, all CRT cases are now settled in the US. However, the District Court decision approving the settlement in 2015 of a class action brought by a group of indirect purchasers of CRT was remanded in February 2019 to the U.S. District Court by the California Court of Appeals so that the District Court may reconsider its approval of the settlement. As a result of those settlements, the Group recognized in 2018 a cash impact of €7 million. Rest of the world In November 2014, several Vestel entities filed a lawsuit before a court in the Netherlands against Technicolor SA and Technicolor USA (and other defendants) alleging anticompetitive behaviour in the CRT industry. Technicolor USA was dismissed from the case by the Dutch court in July 2016 on jurisdictional grounds. As appropriate and to the extent required, Technicolor SA will file responsive pleadings. Vestel also brought suit in Turkey, which was dismissed on procedural grounds in January 2019. Finally, Technicolor SA, along with other defendants, is defending on similar grounds a number of cases: in Germany against German manufacturers; •

in the Netherlands against Brazilian manufacturers; and • in the United Kingdom against a Turkish manufacturer. •

At this time, Technicolor is unable to assess the potential outcome from those cases and the resulting potential liability as the proceedings are at an early stage and the claims have been substantiated.

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TECHNICOLOR REGISTRATION DOCUMENT 2018