technicolor - 2019 Universal registration document

FINANCIAL STATEMENTS SCOPE OF CONSOLIDATION

For the years ended December 31, 2019 and 2018, Technicolor’s consolidated financial statements include the accounts of all investments in subsidiaries, jointly controlled entities and associates. Their location is summarized below and main entities are listed in note 15.

Europe (exc. France)

France

U.S.

Other

Total

Number of companies as of December 31, 2019 Parent company and consolidated subsidiaries Companies accounted for under the equity method

15

39

19

30

103

1

-

1

3

5

TOTAL

16

39

20

33

108

Europe (exc. France)

Number of companies as of December 31, 2018 Parent company and consolidated subsidiaries Companies accounted for under the equity method

France

U.S.

Other

Total

17

41

23

29

110

1

-

1

3

5

TOTAL

18

41

24

32

115

Change in the scope of consolidation of 2019

2.2

GRI [102-10] [102-49]

RESEARCH & INNOVATION ACTIVITY On May 31, 2019, the Group concluded the sale to Interdigital of its Research & Innovation business.

transaction, Technicolor also renounces to part of the potential cash flows from the earn-out clause of the Patent Licensing disposal. Finally, Technicolor commits to funding part of the research led by Interdigital until 2022. As patentable innovation ownership will be kept by

Compensation received amounted to one euro; in addition to assets and Interdigital, this contract will be considered as negative compensation. liabilities transferred, the transaction ends the research agreement by Research & Innovation activity is presented in discontinued activities. which Interdigital benefited from R&I research. As a part of the (in million euros) Total compensation (21) Net liabilities transferred 29 CAPITAL GAIN IN DISCONTINUED ACTIVITIES 8

No other significant acquisition or divestiture occurred during 2019.

6

Change in the scope of consolidation 2018

2.3

[102-49]

GRI

PATENT LICENSING DIVISION On July 30, 2018, the Group concluded the sale to InterDigital of its Patent Licensing Division excluding some mobile patents, some patents for nascent technologies and some patents associated with patents pools, and a Research Cooperation Agreement. The consideration received for this sole transaction is composed of 4 items: U.S.$150 million (€129 million) cash paid up-front; a)

an earn-out consisting in a variable contingent consideration equal b) to 42.5% of all future cash receipts from InterDigital’s licensing activities in the Consumer Electronics field beyond operating expenses over 20 years; a perpetual grant-back licensing agreement, which gives c) Technicolor freedom to run its operating businesses and benefit from existing and future patents, over their remaining life, whilst providing Technicolor with an adequate level of Intellectual Property protection. This grant-back is a non-cash consideration received in the sale transaction;

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TECHNICOLOR UNIVERSAL REGISTRATION DOCUMENT 2019