technicolor - 2020 Universal Registration Document

FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 10 - Provisions & contingencies

Key management compensation 9.4 Directors’ fees and compensation expenses (incl. Social security costs) amounted to €1 million in 2020 and €0.9 million in 2019. The amounts due to Directors who are non-resident for French tax purposes are subject to a withholding tax. Fees due to Directors and advisors in respect to fiscal year 2020 will be paid in 2021. Compensation expenses allocated by the Group to Members of the Executive Committee (including those who left this function during 2020 and 2019), during 2020 and 2019 are shown in the table below:

2020 (1)

2019 (1)

(in million euros)

Short-term employee benefits (1)

14

15

LT employment benefit Termination benefits (2) Share-based payment

2 4

- - 1

-

TOTAL

20

16

12 members in 2020 and 15 members in 2019. (1) Amounts accrued under post-employment obligations are almost nil as of December 31, 2019 and 2020. (2)

In addition, a non-compete indemnity of €0.6 million has been paid to Mr Frédéric Rose in 2020. The Members of the Executive Committee can benefit from severance packages in case of an involuntary termination and in absence of fault, which represent a total estimated amount of €5 million.

Provisions & contingencies NOTE 10

ACCOUNTING ESTIMATES AND JUDGMENTS Technicolor’s management is required to make judgments about provisions and contingencies, including the probability of pending and potential future litigation outcomes that, by their nature, are dependent on future events that are inherently uncertain. In making its determinations of likely outcomes of litigation and tax matters, management considers the opinion of outside counsel knowledgeable Provisions for restructuring costs are recognized when the Group has a constructive obligation towards third parties, which results from a decision made by the Group before the balance sheet date and supported by the following items: the existence of a detailed and finalized plan identifying the sites • concerned, the location, the role and the approximate number of headcounts concerned, the nature of the expenses that are to be incurred and the effective date of the plan; and the announcement of this plan to those affected by it. • The restructuring provision only includes the costs directly linked to the plan. about each matter, as well as developments in case law. PROVISIONS FOR RESTRUCTURING

Provisions are recorded at the balance sheet date when the Group has an obligation as a result of a past event and when it is probable that an outflow of resources embodying economic benefits will be required and a reliable estimate can be made of the amount of the obligation. The obligation may be contractual, legal, regulatory or it may represent a constructive obligation deriving from the Group’s actions where, by an established pattern of past practice, published policies or a sufficiently specific current statement, the Group has indicated to other parties that it will accept certain responsibilities, and as a result, has created a valid expectation on the part of those other parties that it will discharge those responsibilities. The recorded provision represents the best estimate of the expenditure required to settle the obligation at the balance sheet date. If a reliable estimate cannot be made of the amount of the obligation, no provision is recorded but details of the obligation are disclosed in the notes to the consolidated financial statements. Where the discounting effect is material, the recorded amount is the present value of the expenditures expected to be required to settle the related obligation. The present value is determined using pre-tax discount rates that reflect the assessment of the time value of money. Unwinding of discounts is recognized in the line item “Net financial income (expense)” in the consolidated statement of operations.

6

TECHNICOLOR UNIVERSAL REGISTRATION DOCUMENT 2020 259