technicolor - 2019 Universal registration document

FINANCIAL STATEMENTS INFORMATION ON OPERATIONS

Revenue & geographical information

3.2

GRI [102-7]

DVD SERVICES SEGMENT Our DVD Services Division provides turnkey integrated supply-chain solutions including mastering, replication, packaging, direct-to-retail distribution through two separate contracts (a replication contract and a distribution contract). In case of variable price over the contract term, the revenue is already adjusted to anticipate the probable discount. In case of a contract advance paid to the customer, the consideration payable to the customer is already accounted for as a reduction of the transaction price and amortized based on the units of production. Revenues is recognized upon the rendering of services. PRODUCTION SERVICES SEGMENT Our Production Services Division provides a full set of award-wining services around Visual Effects (VFX), Animation and Games activities, as well Postproduction Services. The services are generally rendered over a short period except for VFX services and Animation where services may be provided over a longer period. Our contracts stipulate that we have a right to payment for performance completed to date in case of a termination by the customer, and no milestones are used for measuring the progress. Revenue is recognized upon the rendering of services.

Under IFRS 15 revenue is recognized to reflect the transfer of promised goods and services to customers for amounts that reflect the consideration to which an entity expects to be entitled in exchange for those goods and services. When either the Group or the customer as party to a contract has performed, the contract is presented in the statement of financial position as a contract asset or a contract liability, depending on the relationship between the goods delivered or services rendered and the customer’s payment. Any unconditional rights to consideration is presented separately as a receivable. CONNECTED HOME SEGMENT Connected Home segment offers a complete portfolio of Broadband and Video Customer Premise Equipment (CPE) and develops software solutions. The contracts signed have no multiple performance obligations and there is no variable consideration over time. Software inside modems or digital Set-Top Box are specific to each customer and are not marketed separately. Revenue is then recognized over at goods delivery.

In respect of IFRS 15 – Revenue from contracts with customers, continuing revenue per method of recognition, contract assets and liabilities are disaggregated in the following way:

December 31,

Production Services

DVD Services

Corporate & Other

December 31, 2018*

2019 Connected Home

(in million euros)

Revenue recognized at delivery of goods or services

3,329

1,983

464 429

882

- -

3,637

Revenue recognized over time (1)

429

- -

- -

307

Revenue from licenses (2)

43

-

43 43

44

6

REVENUE OF CONTINUING OPERATIONS

3,800 1,983

893

882

3,988

2018 amounts are re-presented to reflect the impacts of Discontinued Operations (see note 12). * Revenue recognized over time are related to certain VFX and animation production services provided over a long period. (1) Trademark licensing and remaining patent licensing revenue are recognized based on volumes reported or cash received depending on information available. (2)

INFORMATION ON MAIN CLIENTS As of December 31, 2019, one external customer represents 18% of the Group’s consolidated revenues (€682 million), one external customer represents more than 10% (€391 million) and one external customer represents more than 5% (€185 million). As of December 31, 2018, one external customer represents 15% of the Group’s consolidated revenues (€597 million) and three external customers representing more than 5% each (respectively €281million, €252 million and €207 million).

Relating to performance obligations still to be satisfied, only VFX activities included in Productions Services business divisions are part of contracts that have an original expected duration of one year or more. For these services, the performance obligations still to be performed under contract in force at the end of the reporting period amount to €262 million as of December 31, 2019; it will be recognized mostly in 2020.

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TECHNICOLOR UNIVERSAL REGISTRATION DOCUMENT 2019