technicolor - 2020 Universal Registration Document

FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 1 - General information

Effects of these events on the financial statements at December 31, 2020 The Group considered the New Money debt, the conversion of part of the existing debt to equity, and the restructuring of the remaining debt after conversion to be a single complex transaction with multiple elements. This transaction resulted in: derecognition of the previous debt; • receipt of the proceeds, net of fees, from the New Money; • recognition of new financial debt (New Money and Reinstated Term • Loans); issuance of equity instruments to lenders (shares and New Money • warrants). The new instruments are recognized at fair value on the date of the various transactions, with the amounts being different from the nominal amounts or the amounts net of fees presented in the description of the safeguard plan. As the various transactions which permitted the implementation of the New Money debt should be analyzed as a whole, the initial fair value of the New Money and the associated warrants was not presumed to be equal to the cash received but measured according to available market data. The difference between the derecognized debt and the new resources obtained was recognized in financial income (“Proceeds from financial restructuring”), in accordance with the IFRS applicable to financial restructuring operations (IFRS 9 – Financial Instruments, IFRIC 19 – Extinguishing Financial Liabilities with Equity Instruments). The breakdown of the net income before tax is as follows:

$125 million asset-based loan made available to Technicolor USA Inc. • on November 6, 2017 and certain other U.S. members of the Group was amended, in particular to extend the final maturity date of the loan to December 2023, and to allow the implementation of all of the transactions contemplated herein in order to achieve the restructuring. All conditions precedent to the effective Financial Safeguard Plan being removed, most notably the approval by the EGM on July 20, 2020, and by the Commercial Court of Paris on July 28, 2020, the final steps of the Safeguard Plan, that is the implementation of the Reinstated Term Loans and the repayment and equitization of the non reinstated debt facilities, were successfully completed in September 2020. The non reinstated Term Loan Debt and RCF debt were repaid in cash for an amount of €59,716,580.58 and equitized for an amount of €600,283,419.22. Additionally, on September 11, 2020, the U.S. Bankruptcy Court presiding over Technicolor’s Chapter 15 proceedings ordered the closing of such proceedings. This marked the final step of the Company’s proceedings in the United States of America. Following the completion of the these operations, the shareholding structure of the Company was greatly modified; details of the issuance of shares and major shareholders as of December 31, 2020 are presented in note 7.

(in million euros) Proceeds from the New Money

416

Debt derecognized

1,218 (38) (60) (399) (478) (466)

New Money warrants at fair value Capital increase subscribed in cash (1)

Capital increase subscribed by set-off of existing debt (1)

New Money debt (fair value) (2)

New Reinstated Term Loans (fair value) (3) RESULT OF THE OPERATION

193 (35) 158

6

Fees booked in Profit & Loss NET RESULT (DAY 1)

Capital increase for a nominal value of €660 million. (1) Nominal value of the New Money debt of €453 million. (2) Nominal value of Reinstated Term Loans of €574 million. (3) Amounts in U.S. dollars are converted into euros at the exchange rate on the date of each transaction (1.16 for the New Money and 1.17 for the Reinstated Term Loans)

The fair value measures used, based on market data available at the time of the transactions, are as follows: share value used for the valuation of equity instruments (shares and • New Money warrants): €2.18 (price on the date of delivery of these instruments, September 22, 2020); value of the New Money debt (ask price on date of receipt of funds – • July 23 and September 2): 105.5% of the Nominal; value of Reinstated Term Loans (ask price on the effective date • of new loans, September 22): 81.25% of the Nominal.

The effective interest rate of the New Money and the Reinstated Term Loans is presented in note 8.3.1. The effective interest rate is the rate used to discount the future repayment flows without consideration of the initial gains and losses. The fees attributable to the operation, i.e. €56 million, were recognized in equity (€15 million), financial income (€35 million) or as a reduction of the New Money debt (€6 million) depending on their nature. A reconciliation between nominal debt and debt as reflected under IFRS is available in note 8.3.1.

TECHNICOLOR UNIVERSAL REGISTRATION DOCUMENT 2020 209