TECHNICOLOR_REGISTRATION_DOCUMENT_2017

- 6 FINANCIAL STATEMENTS

Notes to the consolidated financial statements

Assumptions used in actuarial calculation 9.2.5.

Pension plan benefits

Medical post-retirement benefits

2017 2.1% 1.7%

2016 2.2% 1.7%

2017 3.5% N/A

2016 3.3% N/A

Weighted average discount rate

Weighted average long-term rate of compensation increase

Discount rate methodology The projected benefit cash flows under the U.S. schemes are determined based on AA rate corporate bonds common indexes and discounted using a specific yield curve based on AA rated corporate are as follows: bonds. The discount rates used for the Euro zone and the UK. are

Medical post-retirement benefits

Pension plan benefits

Early retirement

Index Reference

(in %)

Euro zone

1.3% 2.5%

0.0% N/A N/A

N/A

Iboxx AA10+

UK. U.S.

N/A Aon Hewitt AA curve 3.51% Citigroup pension discount curve

3.27%

Risk associated to the plans & sensitivity analysis 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;

if the discount rate is 0.25% lower, the obligation would increase by ■ €18 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.

Share-based compensation plans 9.3. The Group issues equity-settled and cash-settled share-based payments to certain employees. According to IFRS 2, the advantage given to the employees regarding the grant of stock options or free shares consists of an additional compensation to these employees estimated at the grant date. Equity-settled share-based payments are measured at fair value at the grant date. They are accounted for as an employee expense on a straight-line basis over the vesting period of the plans, based on the Group’s estimate of instruments that will eventually vest. For cash-settled share-based payments, a liability equal to the portion of the goods or services received is recognized at the current fair value determined at each balance sheet date with any changes in fair value recognized in profit or loss for the period within “Other financial income (expense).” In addition, for plans based on non-market performance conditions, the probability of achieving the performance is assessed each year and the expense is adjusted accordingly.

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TECHNICOLOR

REGISTRATION DOCUMENT 2017