technicolor - 2018 Registration document

6 FINANCIAL STATEMENTS NOTE 1 GENERAL INFORMATION

General Information

NOTE 1

Technicolor is a leader in Media & Entertainment Services, developing and monetizing next-generation video technologies. Technicolor SA is the holding company of the Group and manages the cash of the Group’s subsidiaries. These notes are an integral part of these annual financial statements. They contain additional information relating to the statements of financial position and of operations and give a true and fair view of the Company’s assets, financial position and results. Information which is not mandatory is disclosed only if material. Main events of the year 1.1

SALE OF PATENT LICENSING BUSINESS TO INTERDIGITAL On July 30, 2018, the Group concluded the sale to InterDigital of its Patent Licensing business excluding some mobile patents, a small number of patents for nascent technologies and some patents associated with patents pools, for a total price of €188 million. On February 11, 2019, the Group announced being in exclusive negotiations with InterDigital for the divestiture of its Research & Innovation activity. This transaction would amend the contingent consideration to be received on the sale of the Patent Licensing business by reducing by 50% the future expected cash receipts.

LOAN REIMBURSEMENT In December 2018, Technicolor SA has reimbursed the €90 million loan from European Investment Bank (“EIB”) maturing in 2023 (see note 9.2).- TRANSFER OF TRADEMARK LICENSING ACTIVITY TO TECHNICOLOR SA From October 1, 2018, Technicolor SA has undertaken from RCA Trademark Management SAS the role of licensing Agent for Trademarks licensed by the Group.

Accounting Policies

1.2

treatments of forward financial instruments and hedging operations. In this context, the Company has supplemented information in the notes relating to hedging transactions (see notes 9.4 and 12.4). The impact of this regulation on the Company’s balance sheet and income statement is not significant. These financial statements are presented in euro, the functional currency of Technicolor SA and have been rounded to the nearest million. 1.2.2 The process of drawing up the parent company financial statements involves using certain estimates and assumptions to calculate the figures presented in the Statements of Financial Position and of Operations. The Company periodically reviews its valuations and estimates based on its past experience and various other factors considered reasonable and relevant for the determination of the fair estimates of the assets and liabilities’ carrying value and of the revenues and expenses. The actual results could significantly differ from these estimates depending on different conditions and assumptions. USE OF ESTIMATES

BASIS OF PREPARATION 1.2.1 The annual financial statements are drawn up according to the accounting standards defined by the French General Chart of Accounts ( Plan Comptable Général ) and the French Commercial Code. The guidelines and recommendations of the Autorité des normes comptables , the Ordre des Experts Comptables and the Compagnie Nationale des Commissaires aux Compte s are also applied. The financial statements were approved by the Board of Directors of Technicolor SA on February 27, 2019. Pursuant to French law, the financial statements will be considered as definitive when approved by Company’s shareholders at the Ordinary Shareholders’ Meeting called to approve 2018 financial statements. The methods used to prepare the 2018 accounts remain unchanged compared to previous year. The Company applies the provisions of the ANC 2015-05 regulation, approved by decree on December 28, 2015. This regulation, mandatory from January 1, 2017, aims to specify the accounting

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TECHNICOLOR REGISTRATION DOCUMENT 2018