technicolor - 2018 Registration document

FINANCIAL STATEMENTS

NOTE 1 GENERAL INFORMATION

Main standards, amendments and interpretations that are not yet effective and have not 1.2.2.2 been early adopted by Technicolor New standard and interpretation Effective Date Main provisions IFRS 16 – Leases Annual periods beginning on or after January 1, 2019 IFRS 16 specifies how to measure, present and disclose leases. The standard provides a single lease accounting model, requiring the lessee to recognize assets and liabilities for all leases unless the term lease is 12 months or less or the underlying asset has low value. Lessors continue to classify leases as operating or finance leases, applying substantially a comparable methodology from its predecessor, IAS 17. At this stage, the Group has provided all the information requested for the transition (see hereunder).

Amendments to IAS 28 – Long-term Interests in Associates and Joint Ventures Amendments to IFRS 9 – Prepayment Features with Negative Compensation IFRIC 23- Uncertainty over Income Tax Treatments

These amendments have been added to clarify that an entity applies IFRS 9 to long-term interest in an associate or joint venture that form part of the net investment in the associate or joint venture but to which the equity method is not applied. They have been adopted by the European Union on February 8, 2019. These amendments clarify the classification of particular prepayable financial assets and the accounting for financial liabilities following a modification. They have been adopted by the European Union on March 22, 2018. This interpretation brings additional guidance to IAS12- Disclosure of interests in other entities on valuation and accounting of Uncertainties over Income Tax Treatments. The interpretation has been adopted by the European Union on October 23, 2018 and is effective from January 1, 2019. The Group is currently analyzing the accounting impact in its books. These amendments state that if a plan amendment, curtailment or settlement occurs, the current service cost and the net interest for the period after the remeasurement are determined using the assumptions used for the remeasurement. In addition, amendments have been included to clarify the effect of a plan amendment, curtailment or settlement on the requirements regarding the asset ceiling. These amendments are effective from January 1, 2019, provided that they are adopted by the European Union. The Group is currently analyzing the accounting impact in its books. These amendments are related to IFRS 3 – Business Combinations and IFRS 11 – Joint Arrangements, IAS 12 – Income Taxes and IAS 23 – Borrowing Costs but they ahave not been adopted by the European Union yet.

Amendments to IAS19-Plan amendment, curtailment or settlement

Improvements to IFRSs 2015-2017

IFRS 16 – Leases The transition to IFRS 16 has been performed on the basis of an analysis of most significant long-term lease agreements of the Group generating the majority off-balance sheet commitments, which amount in total to €331 million as of December 31, 2018 (€306 million in continued operations, see note 4.5, and €25 million in discontinued operations). Most of those agreements are operating leases relating to production, commercial and administrative buildings based in the countries, where the Group operates. The analysis of lease agreement in the context of the IFRS 16 transition has been performed using a specific and dedicated software. As at December 31, 2018, the agreement reviewed represents 68% of the total off balance sheet Group commitments Based on the work performed at 2018 closing, the Group decided to choose the simplified method for the transition to IFRS 16.

Main assumptions The length considered for the discounted rates is the remaining life of the contract starting January 1, 2019 until termination. For buildings, incremental borrowing rates have been determined for each country by adding to the swap rate the credit spread corresponding to the Group notation as at December 31, 2018. For equipment, the implicit rate of the contract has been used. Transition options as applied by the Group Scope options: the Group decided to grandfather the previous • assessments for leases previously identified in accordance with IAS 17. As a result, conclusions of analysis performed under IAS 17 and IFRIC 4 – Determining whether an Arrangement contains a lease are still valid. No changes have been brought to financial leases previously recorded.

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TECHNICOLOR REGISTRATION DOCUMENT 2018