technicolor - 2019 Universal registration document

FINANCIAL STATEMENTS PROVISION & CONTINGENCIES

PROVISIONS

As of December 31, 2019

As of December 31, 2018

Usage during the period

Reversals and reclassifications

Increases

(in million euros)

3

- -

- -

- - - -

3

Provisions for retirement benefit and jubilee

Subsidiaries and other risks

- -

- -

Restructuring measures relating to employees

2

(2)

Related to activities disposed of (1)

15

17

-

32

Other (2)

4

-

(1)

(1) (1)

2

Other provisions for risks

19

19

(3)

34

TOTAL PROVISIONS FOR LOSSES AND CONTINGENCIES

22

19

(3)

(1)

37

Provision relating to the disposal of businesses, notably the former Cathode Ray Tubes activity. (1) Mainly concerns provisions for litigation (see note 11.2). (2) Contingencies 11.2 TAOYUAN COUNTY FORMER RCA EMPLOYEES’ SOLICITUDE ASSOCIATION Technicolor, certain of its subsidiaries and General Electric are being sued by an association of former employees (or heirs of former employees) at a former manufacturing facility in Taiwan (TCETVT). They allege exposure to various contaminants while living and working at the facility, which allegedly caused them to suffer various diseases, including cancer, or caused emotional distress from fear that living and working at the facility increased their risk of contracting diseases. After a first ruling of the Taiwan court and an appeal before the Taiwan High Court (first appeals court), the Taiwan Supreme Court, in August 2018: confirmed the Taiwan High Court decision of awarding (i) NTD 517.75 million (c. €15.4 million at the exchange rate as of December 31, 2019) in damages to 260 claimants; and remanded the claims of 246 claimants for further proceedings at (ii) the High Court. General Electric paid to the Court the full amount of the decision in December 2019. In 2016, the association brought a second lawsuit against Technicolor and certain of its subsidiaries and General Electric on behalf of additional former workers making virtually identical allegations as were made in the first lawsuit. The Taipei District Court announced its ruling on 27 December 2019 and awarded approximately NTD $2.3 billion (c. €68.5 million at the exchange rate as of December 31, 2019) plus late interest penalty. Technicolor and General Electric were held jointly and severally liable. Technicolor intends to appeal this decision. Technicolor and its subsidiaries claim, among other reasons, that TCETVT operated for less than four years after its purchase from General Electric, while General Electric and its predecessor-in-interest RCA Corporation, owned and operated TCETVT for approximately twenty years.

Should the Group or any of the subsidiaries ultimately be held liable or settle the claims, the amounts of any such liability or settlement could be high. There are currently too many uncertainties to assess the extent of any liability that Technicolor or its subsidiaries may incur as a consequence of this lawsuit. Technicolor also has various avenues to mitigate any risk, including contractual indemnities owed to it by General Electric and others.

CATHODE RAY TUBES CASES United States

Between 2014 and 2017, Technicolor settled with all plaintiffs in the legal actions that Technicolor had been defending in the United States pertaining to alleged anticompetitive conduct in the Cathode Ray Tubes (“CRT”) industry. However, the District Court decision approving the settlement in 2015 for U.S.$13.75 million in June 2015 of a class action brought by a group of indirect purchasers of CRT was remanded in February 2019 to the U.S. District Court by the California Court of Appeals so that the District Court may reconsider its approval of the settlement. As part of the remand process, the settlement agreement was amended by agreement of the parties in September 2019, which, if approved by the Court, will result in a small part of the settlement amount being returned to the defendants, including Technicolor, and plaintiffs from nine U.S. states being excluded from the settlement. Approval of the amended settlement agreement is pending with the District Court. Since September 2019, motions to intervene and complaints were filed by consumers from those nine states. Those motions also are pending with the District Court. Technicolor believes that its exposure is limited in size and that it has valid means of defense.

6

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