technicolor - 2019 Universal registration document

FINANCIAL STATEMENTS GOODWILL, INTANGIBLE & TANGIBLE ASSETS

Production services

DVD Services

Connected Home

Discontinued operations

Total

(in million euros)

2019 Impairment loss on goodwill

-

(53)

- - - - -

-

(53)

Impairment losses on intangible assets Impairment losses on tangible assets

(1)

(3) (3)

(1)

(4) (4)

-

-

Impairment losses on non-current operating assets

(1)

(59)

(1)

(61)

Impairment reversal on intangible assets

-

-

-

-

NET IMPAIRMENT LOSSES ON NON-CURRENT OPERATING ASSETS

(1)

(59)

-

(1)

(61)

Impairment loss on goodwill

- -

(77)

-

-

(77)

Impairment losses on intangible assets Impairment losses on tangible assets

(1) (1)

(1) (1)

(4)

(6) (9)

(7) (7)

-

Impairment losses on non-current operating assets

(79)

(2)

(4)

(92)

Impairment reversal on intangible assets

-

-

-

-

-

NET IMPAIRMENT LOSSES ON NON-CURRENT OPERATING ASSETS (1)

(7)

(79)

(2)

(4)

(92)

(1)

€(81) million in Net impairment and €(7) million in Restructuring of continuing result.

The impairment tests performed in 2019 on the carrying value of the CGU related to DVD Services resulted in an impairment of €59 million of assets.

MAIN ASSUMPTIONS AT DECEMBER 31, 2019 4.5.1 In order to perform the annual impairment test, the Group used the following assumptions to determine the recoverable amount of the main goodwill reporting units: Production Services DVD Services Connected Home Basis used to determine the recoverable amount Value in use Fair Value Fair Value Description of key assumptions Budget and Business Plans Period for projected future cash flows 5 years * 5 years Growth rate used to extrapolate cash flow projections beyond projection period: as of December 31, 2019 • 2.0% * 0% as of December 31, 2018 • 2.0% * 2.0% Post-tax discount rate applied (1) : as of December 31, 2019 • 8.0% 8.0% 9.0% as of December 31, 2018 • 8.0% 8.0% 10.0% The corresponding pre-tax discount rates are within a range from 10.6% to 12.2%. (1) The main activities of the DVD Services Division have been considered to have a finite life. Accordingly, no terminal value has been applied for this activity. *

6

For the DVD Services GRU, in the absence of a binding sale agreement at closing date, of an active market and of comparable recent transactions, discounted cash flow projections have been used to estimate fair value less costs to sell. Technicolor management considers that fair value less costs to sell is the most appropriate method to estimate the value of its GRU as it takes into account the future restructuring measures the Group will need to make against a rapid technological environment change. Such restructuring actions would be considered by any market participant given the economic environment of the business.

The discounted cash flow of DVD Services is computed over a finite life of circa twenty years and accordingly the goodwill will be impaired over this period depending on the evolution of the fair value as determined through the discounted cash flow. The Group recorded an impairment charge of €(53) million on goodwill as of December 31, 2019. An impairment charge of €(77) million on goodwill was recorded in 2018.

TECHNICOLOR UNIVERSAL REGISTRATION DOCUMENT 2019 223