technicolor - 2020 Universal Registration Document

6 FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 9 - 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

2020

2020

2019

2019

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

2% 11%

3%

5

6

Equity investments

10% 67%

22

21

Debt securities

69%

144

137

Properties

1%

1%

3

2

Annuity contracts

17%

19%

35

38

TOTAL

100%

100%

209

204

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 2020 actual return on plan assets amounts to €20 million (€25 million in 2019).

9.2.5

ASSUMPTIONS USED IN ACTUARIAL CALCULATION

Pension plan benefits

Medical post-retirement benefits

2020 1.01% 1.22%

2020 2.00%

2019 1.60% 1.20%

2019 2.80%

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:

Medical post-retirement benefits

Pension plan benefits

Early retirement

Index Reference

(in %)

Euro Zone

0.35% 1.45% 1.80%

0.00%

N/A N/A

Iboxx AA10+

UK

N/A N/A

Aon Hewitt AA curve

U.S.

2.02% Citigroup pension discount curve

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;

RISK ASSOCIATED TO THE PLANS & SENSITIVITY ANALYSIS

if the discount rate is 0.25% lower, the obligation would increase • by €19 million; 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 €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 2020 254