technicolor - 2019 Universal registration document

FINANCIAL STATEMENTS EMPLOYEE BENEFIT

Disaggregation of the fair value by category 9.2.4.2

Plan assets allocation at December 31

Fair value of plan assets at December 31

2019

2019

2018

2018

(in % and in millions euros) Cash and cash equivalents

3%

2% 9%

6

3

Equity investments

10% 67%

21

16

Debt securities

69%

137

123

Properties

1%

2%

2

4

Annuity contracts

19%

18%

38

33

TOTAL

100%

100%

204

178

The fair value of the above equity and debt instruments is determined based on quoted market prices in active markets. The fair value of the plan assets did not include any Technicolor’s own financial instruments or any asset used by the Group. The 2019 actual return on plan assets amounts to €25 million (€(9) million in 2018).

9.2.5

ASSUMPTIONS USED IN ACTUARIAL CALCULATION

Pension plan benefits

Medical post-retirement benefits

2019 1.60% 1.20%

2019 2.80%

2018 3.90%

2018 2.50% 1.20%

Weighted average discount rate

Weighted average long-term rate of compensation increase

N/A

N/A

Discount rate methodology The projected benefit cash flows under the U.S. schemes are discounted using a specific yield curve based on AA rated corporate bonds. The discount rates used for the Euro zone and the UK are determined based on AA rate corporate bonds common indexes and are as follows:

Pension plan benefits

Early retirement

Medical post-retirement benefits

Index Reference

(in %)

Euro zone

0.77% 2.00% 2.65%

0.00%

N/A

Iboxx AA10+

UK

N/A N/A

N/A Aon Hewitt AA curve 2.87% Citigroup pension discount curve

U.S.

6

9.2.6 Pension plans are mainly exposed to: longevity risk due to mortality assumption; • financial risks due to discount rate and salary increase rate • assumptions. Medical plans are mainly exposed to: longevity risk due to mortality assumption; • financial risks due to discount rate and medical trend rate assumptions. • The sensitivity of the actuarial valuation is described below: if the discount rate is 0.25% higher, the obligation would decrease by • €17 million; if the discount rate is 0.25% lower, the obligation would increase by • €19 million;

RISK ASSOCIATED TO THE PLANS & SENSITIVITY ANALYSIS

if the healthcare costs are 1% higher, the obligation would increase by • less than €1 million; if the healthcare costs are 1% lower, the obligation would decrease by • less than €1 million; if the salary increase rate is 0.25% higher, the obligation would • increase by €1 million; if the salary increase rate is 0.25% lower, the obligation would • decrease by less than €1 million. The sensitivity analysis presented have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

TECHNICOLOR UNIVERSAL REGISTRATION DOCUMENT 2019 247