technicolor - 2020 Universal Registration Document

FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 5 - Other operating information

For DVD Services: a decrease of 5% on BD volumes from 2023 would decrease the • enterprise value by €4 million, without generating any impairment; an increase of 0.5 point in the WACC rate assumption would • decrease the enterprise value by €9 million, without generating any impairment;

a decrease of 1 point of the EBITDA margin from 2023 would • decrease the enterprise value by €29 million, generating an impairment of €9 million; a decrease of Freight revenue by 10% in Terminal Year would • decrease the enterprise value by €3 million, without generating any impairment.

Other operating information

NOTE 5

Operating assets & liabilities

5.1 5.1.1

NON-CURRENT OPERATING ASSETS & LIABILITIES

2020

2019

(in million euros)

Customer contract advances and up-front prepaid discount

8

13 19 32 (8)

Other

19 27 (4)

OTHER OPERATING NON-CURRENT ASSETS Payable on acquisitions of business & fixed assets

Other

(17) (21)

(17)

OTHER OPERATING NON-CURRENT LIABILITIES

(24)

As part of its normal course of business, Technicolor makes cash a particular territory over the specified contract period (generally from advances and up-front prepaid discount to its customers, principally 1 to 5 years). The contracts contain provisions that establish pricing terms within its DVD Services segment. These are generally in the framework for services and volumes to be provided and other terms and conditions.

of a long-term relationship or contract and can take different forms. Consideration is typically paid as an advance to the customers in return for the customer’s various commitments over the life of the contracts. These contracts award to the Group a customer’s business within

Such advanced payments are classified under “Non-current assets”, recorded as “Contracts advances and up-front prepaid discount” and are amortized as a reduction of “Revenues” on the basis of units of production or film processed.

5.1.2

INVENTORIES

ACCOUNTING ESTIMATES AND JUDGMENTS The management takes into consideration all elements that could have an impact on the inventory valuation, as declining sales forecasts, expected reduction in selling prices, specific actions engaged as rework or incentive plans, and obsolescence of products or slow rotation.

Inventories are valued at acquisition or production cost. The production costs include the direct costs of raw materials, labor costs and a part of the overheads representative of the indirect production costs, and exclude general administrative costs. The cost of inventory sold is determined based on the weighted average method or the FIFO (first in – first out) method, depending on the nature of the inventory. When the net realizable value of inventories is lower than its carrying amount, the inventory is written down by the difference.

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