2011 Annual Report Update - Technicolor

A French corporation (société anonyme) with a share capital of €223,759,083

Registered offices: 1-5, rue Jeanne d‟Arc, 92130 Issy-les-Moulineaux, France

333 773 174 Corporate and Trade Register, Nanterre

2011 Annual Report Update

This 2011 Annual Report Update was filed with the Autorité des Marchés Financiers (AMF) on

June 11, 2012 in accordance with Article 212-13 IV of the AMF General Regulations. It comes in

addition to the 2011 Annual Report of Technicolor, filed with the Autorité des Marchés Financiers on

March 27, 2012 under the number D.12-0224.

This document was prepared by the issuer and is the responsibility of the signatories thereof.

It may be used in connection with a financial transaction provided it is accompanied by a transaction

note (note d’opération) approved by the AMF.

Copies of this update of the Annual Report are available free of charge at the registered offices of

Technicolor, 1-5, rue Jeanne d‟Arc, 92130 Issy-les-Moulineaux, and on the Company‟s Website

(www.technicolor.com).

http://images.google.fr/imgres?imgurl=http://www.amf-france.org/documents/statique/fr/doc/amf_logo_2c.jpg&imgrefurl=http://www.amf-france.org/affiche_page.asp?Id_Tab=0&lang=fr&urldoc=logotheque.htm&usg=__ef9GLCjww_I1saj3GAOR7Yk-F1I=&h=369&w=538&sz=28&hl=fr&start=1&um=1&tbnid=8teShKSNONb9CM:&tbnh=91&tbnw=132&prev=/images?q=amf&hl=fr&sa=N&um=1

2 English translation – for information purposes only

Contents

1. SELECTED FINANCIAL INFORMATION AND RECENT DEVELOPMENTS ........ 4

1.1. PRESS RELEASE OF 26TH

APRIL 2012: FIRST QUARTER 2012 REVENUES .......................... 4 1.2. PRESS RELEASE OF 3

RD MAY 2012: TECHNICOLOR STRENGTHENS ITS BALANCE SHEET

AND STABILIZES ITS SHAREHOLDER BASE THROUGH A CAPITAL INCREASE OF UP TO €158 MILLION

10 1.3. INFORMATION ABOUT THOMSON ANGERS ................................................................... 12 1.4. PRESS RELEASE OF 28

TH MAY 2012: VECTOR CAPITAL REQUESTS THE INCLUSION OF

RESOLUTIONS IN THE AGENDA FOR THE JUNE 20, 2012 GENERAL SHAREHOLDERS‟ MEETING .. 12 1.5. PRESS RELEASE OF 30

TH MAY 2012: RECOMMENDATION OF TECHNICOLOR‟S BOARD OF

DIRECTORS FOR THE GENERAL SHAREHOLDERS‟ MEETING OF 20TH

JUNE 2012 ......................... 13 1.6. PRESS RELEASE OF 6

TH JUNE 2012: FURTHER DETAILS FOLLOWING THE PRESS RELEASE

OF MAY 30, 2012 ....................................................................................................................... 15 1.7. PRESS RELEASE OF 11TH JUNE 2012: UPDATE ON THE JPMORGAN PROPOSED

TRANSACTION............................................................................................................................. 16

2. NOTES ON THE 2012 FORECASTS AND STATUTORY AUDITORS’ REPORT ON

THE PROFIT FORECASTS....................................................................................................... 17

2.1 NOTES ON THE 2012 FORECASTS ....................................................................................... 17 2.2 STATUTORY AUDITORS‟ REPORT ON THE PROFIT FORECASTS............................................ 20

3. INFORMATION ABOUT THE SEGMENTAL PRESENTATION OF THE GROUP’S

ACTIVITIES ................................................................................................................................ 21

4. ONGOING LITIGATIONS ............................................................................................... 22

5. SHARE OWNERSHIP THRESHOLD CROSSING NOTIFICATIONS SINCE 15TH

MARCH 2012 ............................................................................................................................... 22

6. PERSON RESPONSIBLE FOR THE ANNUAL REPORT AND ITS UPDATE ......... 23

6.1 PERSON RESPONSIBLE FOR THE ANNUAL REPORT AND ITS UPDATE ................................. 23 6.2 CERTIFICATION OF THE PERSON RESPONSIBLE FOR THE UPDATE...................................... 23

7. CROSS REFERENCE TABLE ......................................................................................... 25


General information

As used in this 2011 Annual Report Update the following terms have the following meanings set

forth below:

• the “Company” means Technicolor;

• the “Group” means the Company and all of its consolidated subsidiaries;

• the “Annual Report” means the Technicolor 2011 Annual Report, filed with the AMF

on March 27, 2012 under the number D.12-0224;

• the “Update” means this update of the Annual Report.

N.B.: A cross-reference table indicating the pages of the Annual Report which correspond to the

25 headings provided in Appendix I of the European Regulation (EC) No. 809/2004 of

April 29, 2004 and the pages of this Update appears starting on page 26.


1. Selected Financial Information and Recent Developments

1.1. Press release of 26th

April 2012: First quarter 2012 revenues

Paris (France), 26th

April 2012 – The Board of Directors of Technicolor (Euronext Paris: TCH)

met yesterday to review the Group‟s revenues for the first quarter of 2012.

Q1 2012 revenues highlights

Group revenues from continuing operations amounted to €800 million compared to a strong first

quarter of 2011 at €812 million.

Technology: continued strength in Licensing revenues.

Entertainment Services: resilient revenue performance almost entirely compensating the rapid

decline in photochemical film activities.

Digital Delivery: stabilization at Connected Home level as the division recorded stable

revenues year-on-year.

Revenues of the first quarter of 2012 (ending 31 March)

In € million Q1 2011 Q1 2012 Change,

reported

(%)

Technology 130 121 (6.4)%

Change at constant currency (%) (8.7)%

Entertainment Services1 405 395 (2.3)%


Digital Delivery 277 284 +2.4%

Change at constant currency (%) +0.3%

Of which Connected Home 238 242 +1.5%


Total revenues from continuing operations 812 800 (1.5)%


Q1 2012 highlights

Entertainment Services started new services to the Studios, in particular with the opening of

Sound facilities both in Los Angeles and in France.

Connected Home won new customers awards in Latin America and Asia-Pacific, strengthening

its position in fast growing markets, while maintaining its focus on improving its overall top

line with the introduction of new services and new products. The action plan announced at the

end of December 2011 has already started to generate some improvements. Technicolor

confirms its objective of returning Connected Home to Adjusted EBITDA2 breakeven in 2012.

1 Media Services activity, formerly reported in Digital Delivery segment, is now included in Creation Services business within

Entertainment Services segment. Media Services revenues amounted to €15 million in the first quarter of 2012, stable

compared with the first quarter of 2011.

2 EBIT from continuing operations excluding other income (expense), and Depreciation & Amortization (including impact of provisions for risks, litigations and warranties).


Innovation: Technicolor has launched new research orientations to align technology innovation

with its Amplify 2015 strategic roadmap.

Technicolor signed a binding agreement to sell its Broadcast Services activity to Ericsson.

Update on financial situation: continued focus on improving financial structure

Estimated gross debt at the end of the first quarter of 2012 decreased both in nominal value

and on an IFRS basis compared to year-end 2011, reflecting €47 million of debt repayments

split between mandatory prepayments and excess cash flow allocation. As net cash has

decreased as expected in the first quarter, net debt was up compared with the end of December

2011.

Technicolor has signed an amendment to improve terms and conditions of the $125 million

Wells Fargo credit facility. The new amendment includes an extension of the credit line from

April 2013 to April 2016, a change in the calculation of the borrowing base improving funding

availability and a reduction of ongoing costs.

Confirmation of 2012 objectives

Based on a resilient first quarter performance, Technicolor confirms its 2012 objectives:

Adjusted EBITDA in the range of €475-500 million;

Continue to generate positive free cash flow3 despite higher restructuring expenses and

investments in growth businesses;

Operate within the financial covenants of credit agreements.

Frederic Rose, Chief Executive Officer of Technicolor, stated: “Technicolor delivered a solid

sales performance in the first quarter of 2012. I am particularly encouraged by the commercial

and operational progress of Connected Home, as well as the sustained level of our Licensing

revenues. This performance makes me confident that we are well on track to delivering on our

2012 objectives of Adjusted EBITDA of €475-500 million and continued generation of positive

free cash flow.”

3 Free Cash Flow from both continuing operations and discontinued operations.


First quarter 2012 segment review

Technology

In € million Q1 2010 Q1 2011 Q1 2012

Revenues 93 130 121

Change as reported (%) +38.9% (6.4)%

Change at constant currency (%) +47.9% (8.7)%

Of which Licensing revenues 93 129 121



In the first quarter of 2012, Technology revenues amounted to €121 million, down 6.4% at current

currency and down 8.7% at constant currency compared to the first quarter of 2011.

Licensing revenues were down 8.5% at constant currency compared to a very strong first

quarter of 2011 (up 47.4% compared to Q1 2010), which had benefited from significant

growth in worldwide consumer electronic product shipments and significant contribution of

MPEGLA revenues. In the first quarter of 2012, Licensing business recorded a strong

performance. Negotiations of new contracts and contract renewals continued in all its

Licensing programs. Licensing revenues also reflected the positive contribution of the first

signed contract for the optical media storage device (OMSD) program. In addition, the division

crossed another milestone in the first quarter of 2012 by expanding its trademark program in

two new countries (Brazil, Russia) and in new product categories (lighting, home automation).

In the context of Amplify 2015 and anticipating technology and market evolutions, Research

and Innovation has implemented a new strategic project portfolio to create opportunities for

delivering differentiating technology assets drawing on fundamental research. The focus

remains anchored on technologies that can lead to high-value intellectual property and

distinctive transfers to the Group‟s businesses, reinforcing competitive advantages in their

products and services, whilst maintaining a high level of scientific excellence. The new

research orientations are centered on making the user experience incomparably more

immersive and secure than current practices, and aim at the following:

o Put the consumers at the centre of the media experience by simplifying their digital life,

securing and personalizing their data, delivering and rendering personalized and interactive

content;

o Provide dynamically targeted content for all stakeholders by allowing creators to target

content to markets, distributors to personalize and adapt recommendations and advertisers

to optimize monetization opportunities;

o Empower creativity and systematize production by narrowing the gap between the set and

postproduction, providing greater digital workflow flexibility and maintaining creative

fidelity from scene to screen;

o Deploy online collaborative capabilities in content creation by maximizing access to talent

diversity, leveraging high added-value content enrichment services and ensuring quality

and consistency of content.


Entertainment Services

In € million Q1 2010 Q1 2011 Q1 2012

Revenues 339 405 395



In the first quarter of 2012, Entertainment Services revenues amounted to €395 million, down

2.3% at current currency and down 5.6% at constant currency compared to the first quarter of

2011.

Creation Services recorded another quarter of growth in the first quarter of 2012. This good

performance reflected continued strong growth in Digital Production and further improvement

in Postproduction, confirming the leadership of Technicolor in media monetization solutions

for content creators.

o Digital Production revenues recorded double-digit growth in the first quarter of 2012,

driven by sustained activity in Visual Effects (“VFX”) for feature films and commercials

and in animation, as well as by the addition of new capacities, in particular in Vancouver

and New York. VFX teams notably completed work on Wrath of the Titans and Dark

Shadows, while continuing work on -among others- Prometheus and Superman. In

Animation, dedicated teams completed work for major games customers and started

working on a new DVD project with Mattel.

o Postproduction activities recorded further improvement, reflecting the positive impact of

the launch of operations in France, Laser Pacific acquisition and higher revenues in Sound

activities with the opening of the Paramount lot sound facility, which have fully offset the

deconsolidation of New York activities and difficult market conditions in Canada. During

the first quarter of 2012, Technicolor provided a large range of services for several movies,

including Wrath of the Titans, American Union, Mirror Mirror and Hunger Games.

o Media Services activity is now integrated into the Creation Services business to offer

integrated digital workflow and stronger project management between postproduction and

content delivery. Media Services revenues were flat year-on-year as the growth in Digital

Services revenues, driven by market share gains with major VOD and OTT players as well

as by the roll out of the Group‟s media management platform, MediAffinity™, now fully

offsets the impact of the continued decline in traditional Tape Duplication Services.

Theatrical Services performance reflected the finalization of the shift to digital. Digital screens

are expected to represent 95% or more of total screens in France and in the UK by the end of

2012, and 84% in North America. Photochemical film activities recorded another quarter of

sharp drop in revenues, as a result of a 40% decrease in photochemical footage compared to

the first quarter of 2011. They now represent only 5% of total Group‟s revenues. This trend

benefited Digital Cinema Distribution activities, which recorded double-digit growth in the

first quarter of 2012.

Combined DVD and Blu-ray™ volumes decreased by 9% in the first quarter of 2012,

primarily due to a weaker slate of new release titles compared to an unusually strong first

quarter of 2011 that included multiple blockbuster titles such as Harry Potter and the Deathly

Hollows: Part 1, Tangled, Tron, and Megamind. North America demonstrated ongoing

resiliency as volumes were stable year-on-year, despite the weaker slate of releases. The

decline was due solely to the European market, which faced a particularly challenging


comparison to the first quarter of 2011, which, in addition to the strong title slate, also included

a large number of territory specific multi-disc sets and back catalog promotions. Despite

ongoing growth in Blu-rayTM

consumer adoption and title availability, Q1 2012 volumes were

slightly down, due to the aforementioned weaker new release slate across key Studio

customers. Games volumes grew by a strong 13% in the first quarter of 2012 compared with

the first quarter of 2011.

DVD Volumes

In million units Q1 2010 Q1 2011 Q1 2012

Total DVD volumes 216 326 297

Change (%) +51% (9)%

o/w SD DVD (Standard Definition DVD) 192 275 248

Change (%) +44% (10)%

o/w BD (Blu-ray™) 7 28 27

Change (%) +311% (4)%

o/w Games/Software and Kiosk 18 23 22

Change (%) +31% (8)%

Digital Delivery

In € million Q1 2010 Q1 2011 Q1 2012

Revenues 271 277 284

Change, as reported (%) +2.3% +2.4%

Change at constant currency (%) +1.3% +0.3%

Of which Connected Home 229 238 242

Change, as reported (%) +3.9% +1.5%


Following the disposal of the Broadcast Services activity currently underway, the Group decided

to reorganize its Digital Delivery operating segments and transferred the Media Services activity,

formerly reported as part of Digital Delivery segment, to the Creation Services business within the

Entertainment Services segment. The Digital Delivery segment now includes Connected Home

business, which accounted for 85% of its total revenues in the first quarter of 2012, and Broadcast

Services activity, which will be deconsolidated upon completion of the transaction expected mid-

2012.

In the first quarter of 2012, Digital Delivery revenues amounted to €284 million, up 2.4% at

current currency and up 0.3% at constant currency compared with the first quarter of 2011.

In the first quarter of 2012, Connected Home revenues remained stable compared with the first

quarter of 2011, as a result of a combination of several factors, including principally continued

strength in customer demand in Latin America, particularly in Brazil, a less favorable product

mix in North America, due to Hard Disc Drive supply constraints associated with last year‟s

flooding in Thailand, as well as continued softness in European operations.

o In North America, Connected Home product volumes increased substantially in the

quarter, driven by robust growth in deliveries to key Cable and Satellite customers. Overall

product mix was however less favorable year-on-year, due in particular to strong shipments


of lower-end digital-to-analog adaptors in Cable, combined with weaker HD PVR volumes

in Satellite, which were affected by HDD supply shortage. The Group remains confident in

its ability to deliver stable revenue year-on-year in North America on a full year basis.

o In Latin America, demand remained strong in the quarter, as reflected by sharply higher

shipments of Connected Home products, which benefited from large deliveries to Satellite

customers, particularly in Brazil. Overall product mix also improved year-on-year, driven

by stronger shipments of higher-end devices such as Telecom broadband gateways, as well

as new HD product launches in Cable, partly offset by HDD supply issues in Satellite.

Technicolor expects strong revenue growth over the course of the year as LATAM markets

remain buoyant.

o In Europe, Middle-East and Africa, Connected Home performance continued to be

affected by soft customer spending in a difficult economic environment. Volumes declined

in the quarter, while overall product mix weakened year-on-year, due principally to the

phase-out of some Satellite and Telecom products, and despite larger deliveries of HD

PVRs in Cable. The Group now expects market conditions for its European operations to

improve progressively throughout 2012.

o In Asia-Pacific, Connected Home product volumes were lower in the quarter, as strength in

deliveries to both Satellite and Cable customers was not enough to offset lower shipments

of Telecom devices, due notably to a product transition. Overall mix was also less

favorable year-on-year, but primarily as a result of softer volumes of Telecom tablets. The

Group remains confident that revenues will grow strongly in Asia-Pacific for the remainder

of 2012.

In the first quarter of 2012, the turnaround plan of Connected Home started to generate

some improvements. Fixed costs at Manaus, which represent 10% of the facility costs, have

been reduced by 8%, and the Group has confirmed that a solution for its Angers plant will be

achieved by the summer. The Group remains focused on non quality costs, which were flat

compared to the first quarter of 2011, but should decrease over the course of the year. The

streamlining of global functions is well on track, while the division has been implementing a

new organization in R&D functions, with the transfer of R&D capabilities from contractors in

the US and Europe to China and India.

Connected Home Product Volumes by Region

In million units Q1 2011 Q1 2012

Total Connected Home Product Volumes* 5.9 6.3

Change (%) +8%

o/w NAM 1.8 2.0

Change (%) +9%

o/w LATAM 2.1 2.5

Change (%) +21%

o/w EMEA 1.4 1.3

Change (%) (5)%

o/w APAC 0.6 0.5

Change (%) (12)%

* Including tablets and other connected devices


APPENDIX

Following the disposal of the Broadcast Services activity currently underway, the Group decided

to reorganize its Digital Delivery operating segments and transferred the Media Services activity,

formerly reported as part of Digital Delivery segment, to the Creation Services business within the

Entertainment Services segment.

The following table provides pro forma information on quarterly revenues per segment for 2011

and the first quarter of 2012.

In € million Q1 11 Q2 11 H1 11 Q3 11 Q4 11 H2 11 FY 11 Q1 12

Technology 130 89 219 107 130 237 456 121

Entertainment Services 405 379 784 454 594 1,048 1,832 395

Digital Delivery 277 277 554 275 329 604 1,157 284

Of which Connected Home 238 234 473 233 283 517 989 242

Other 1 2 3 1 1 2 5 0

Total revenues from

continuing operations

812 747 1,559 837 1,054 1,891 3,450 800

1.2. Press release of 3rd

May 2012: Technicolor strengthens its balance sheet and

stabilizes its shareholder base through a capital increase of up to

€158 million

JPMorgan to increase stake in support of Technicolor‟s strategic plan

Paris (France), 3rd

May 2012 – Technicolor (Euronext Paris: TCH) announces that it plans to

launch a capital increase of up to €158 million to strengthen its balance sheet and enhance its

capabilities to implement its “Amplify 2015” strategic roadmap4.

The planned capital increase, which is subject to shareholder approval, will also contribute to

stabilizing Technicolor‟s shareholder base. The stake will be acquired by an investment vehicle

jointly owned by One Equity Partners, the private investment arm of JPMorgan Chase, and

JPMorgan Chase & Co., which already holds 1% of Technicolor‟s equity and plans to increase its

stake as part of the transaction to support Technicolor‟s publicly disclosed strategy.

Frederic Rose, CEO of Technicolor, said: "I am delighted that JPMorgan plans to make a

substantial investment in Technicolor to become a long-term shareholder in the Company. The

capital increase we are planning will provide the Company with a stronger financial structure and

a stable shareholder base to implement its growth strategy. The planned investment is a strong

evidence of confidence in Technicolor and an endorsement of our strategy and growth potential."

David Walsh, Managing Director at One Equity Partners said: "We believe that the company has

defined a strategy that will deliver long-term value to Technicolor’s shareholders. We look

forward to working closely with management to help it execute this strategy by investing for

growth, enhancing market-leading positions and delivering upon its financial objectives."

1. A two-step capital increase

At the close of the transaction, the investment vehicle, Jesper Cooperatief (“Jesper”) will,

including the existing stake of 1% held by JPMorgan Chase & Co., come to hold a stake of

4 Strategic plan unveiled at Technicolor’s FY 2011 results on February 24, 2012.


between 25% and 29.96% of the issued share capital of Technicolor through a planned capital

increase, which will take place in two steps:

Technicolor will issue 72,280,964 shares through a reserved capital increase to Jesper at a

price of €1.60 per share (the "Reserved Capital Increase");

Technicolor will offer 26,912,732 shares to existing shareholders at a price of €1.56 per share

and Jesper irrevocably commits to acquire up to 75% of the offering to ensure its success (the

"Rights Issue").

This price of the Reserved Capital Increase represents a 10.3% premium over the volume-

weighted average price of Technicolor shares over the last 10 trading days.

The level of participation of existing shareholders in the Rights Issue will determine the final stake

of Jesper in Technicolor, which shall, following the Rights Issue, be at least 25%, but shall in no

event exceed 29.96% of the issued share capital of Technicolor.

2. Key objectives of the agreement

The proceeds of the planned capital increase will represent a minimum of €147 million and a

maximum of €158 million. It will allow Technicolor to reduce its financial debt, increase

headroom on financial covenants, and enhance the Group‟s capabilities to implement its “Amplify

2015” strategic roadmap.

In accordance with the credit agreements, 80% of the net proceeds of the capital increase will be

used to pay down debt, for an amount comprised between €118 million and €126 million. Pro

forma for the transaction, the Group‟s 2011 IFRS Net Debt would stand at between €813 million

and €823 million and Technicolor‟s 2011 Net Debt/EBITDA ratio would stand at 1.7x, compared

to 2.0x as published end of 2011.

This increased financial flexibility will support the implementation of “Amplify 2015” strategic

plan, which aims to make Technicolor a leader in innovation in media monetization solutions by:

Expanding its innovation pipeline and Licensing business;

Developing innovative solutions to address expanding digital media markets;

Consolidating its activities and expanding geographically to gain scale or access broader

ecosystems.

3. Governance

Jesper has entered into a governance agreement that will last for a period of 30 months from the

settlement of the Reserved Capital Increase.

Following the implementation of the transaction, Technicolor‟s Board will be composed of nine

members: two representatives from Jesper, six independent directors and the Chief Executive

Officer of Technicolor.

Subject to customary exceptions, Jesper has agreed to retain its shares for at least 1 year

commencing on the settlement of the Reserved Capital Increase.

4. Shareholder approval and other conditions precedent

Resolutions relating to the Reserved Capital Increase, the Rights Issue, as well as the appointment

of representatives of Jesper to the Board of Technicolor, will be submitted to Technicolor

shareholder approval at the Annual Shareholders‟ Meeting to be convened on June 20, 2012. Prior

to the Annual Shareholders‟ Meeting of Technicolor, a prospectus will be published once the visa

of the AMF has been obtained, describing the characteristics of the Reserved Capital Increase and

the Rights Issue, as well as the main terms and conditions of the governance agreement.


The transaction is also subject to other customary conditions including regulatory clearance.

5. Envisaged timeline

Subject to the conditions precedent being met, it is expected that settlement of the Reserved

Capital Increase will occur on the date of the Annual Shareholders' Meeting of Technicolor. The

Rights Issue offer is expected to be open between June 27, 2012 and July 3, 2012.

6. Appointment of an independent expert

An independent expert has been appointed by Technicolor to provide a fairness opinion on the

terms of the Reserved Capital Increase. The conclusions of this opinion will be shared with the

shareholders of Technicolor in the Prospectus.

The Digital Delivery segment now includes the Connected Home business and the Broadcast

Services activity, which will be deconsolidated upon completion of the transaction expected mid-

2012.

1.3. Information about Thomson Angers

1.3.1 Press release of 25th May 2012: Information about Thomson Angers


May 2012 – Technicolor (Euronext Paris: TCH) announces that the President

of Thomson Angers SAS has filed for insolvency (“cessation de paiement”) with the Nanterre

Commercial Court (France) and has petitioned the Court to open rehabilitation proceedings

(“redressement judiciaire”) for Thomson Angers SAS. The company Thomson Angers SAS owns

the Angers facility, which manufactures set-top-boxes.

1.3.2 Recent events related to Thomson Angers

By a decision dated June 1, 2012, the Nanterre commercial court initiated rehabilitation

proceedings (procédure de redressement judiciaire) in relation to Thomson Angers and decided

that the duration of the observation period would be 6 months. The court also ordered the

Company to pay a EUR 2 million-amount for the purpose of financing the observation period.


May 2012: Vector Capital requests the inclusion of

Resolutions in the Agenda for the June 20, 2012 General Shareholders’

Meeting


May 2012 –By letter dated May 25, 2012, Vector Capital Corporation, an

American investment fund which holds 0.6% of the share capital of Technicolor, requested that

Technicolor include 6 unsolicited proposed shareholder resolutions in the agenda for the General

Shareholders‟ Meeting of the Company scheduled to take place on June 20, 2012.

Vector specifies that the approval of its resolutions by the General Shareholders‟ Meeting requires

the prior rejection of the resolutions proposed by the Board of directors and relating to the

implementation of the transaction agreed upon with Jesper Cooperatief U.A., an entity controlled

by JPMorgan Chase & Co., in accordance with the agreements entered into between Technicolor

and Jesper and announced by Technicolor in its press release dated May 3, 2012.

Vector specifies that its proposed resolutions call for:

“a 17.5% capital increase (through the issue of ordinary shares) of Technicolor reserved

to Petalite Investments S.à r.l. (which is an investment vehicle indirectly wholly-owned

by the Funds and controlled by their management company, Vector Capital Corporation),

at a price of €1.90 per share (the “Vector Reserved Capital Increase”), following which


Vector will hold 18% of Technicolor‟s share capital (taking into account its current

shareholding);

a subsequent rights issue representing a maximum of 18.5% of Technicolor‟s share

capital to the company‟s shareholders, at a price of €1.56 per share, 75% backstopped by

Petalite investments S.à r.l. and following which Vector‟s shareholding shall not be equal

to or greater than 30% (the “Vector Rights Issue”); and

the appointment of two candidates proposed by Vector as members of the Board”.

Vector‟s proposed resolutions are accompanied by a binding and irrevocable offer to subscribe to

the Vector Reserved Capital Increase and to the Vector Rights Issue, which is subject to (i) the

approval by the shareholders of the resolutions submitted by Vector, (ii) the visa of the AMF on

the prospectus relating to the capital increases proposed by Vector and (iii) the required antitrust

clearance. The offer letter also contains commitments relating to governance, standstill and lock-

up.

The Board of Directors of Technicolor will meet on May 29, 2012 in order to review the proposed

shareholder resolutions so as to set the agenda for the next General Shareholders‟ Meeting

scheduled for June 20, 2012.

The proposed resolutions submitted by Vector and the offer letter will be made available to

shareholders on the company‟s website in accordance with legal requirements on May 30, 2012.


May 2012: Recommendation of Technicolor’s Board of

Directors for the General Shareholders’ Meeting of 20th

June 2012


May 2012 – The Board of Directors of Technicolor, which met yesterday in

Paris, unanimously resolved to recommend to the Company‟s shareholders that they vote in favor

of the resolutions relating to the implementation of the transaction agreed between Jesper

Cooperatief U.A., an entity controlled by JPMorgan Chase & Co., (“Jesper”) and Technicolor (the

“JPMorgan Resolutions”). This recommendation is in accordance with the contracts entered on

May 2, 2012 (the “JPMorgan Contracts”).

The JPMorgan Contracts were approved by the Board of Directors on May 2, 2012 and are the

result of extensive discussions with Jesper and other potential investors. The Board of Directors, at

its May 2, 2012 meeting, concluded that Jesper provided the best offer, including from a financial

standpoint, but it also concluded that significant long term value would be derived by Technicolor

from being supported by JP Morgan Chase & Co., the leading worldwide entertainment financier.

The JPMorgan Contracts provide a fully-negotiated 30-month agreement with regard to the

governance of the Company, that would provide key support towards achieving the strategic goals

outlined in Technicolor‟s Amplify 2015 strategic plan and maximize shareholder value.

Technicolor will benefit from its association with JP Morgan Chase & Co., its global brand, its

experience and industry expertise. In addition, the proceeds from the capital increase contemplated

by the JPMorgan Contracts amount to up to €158 million corresponding to up to 99,193,696

shares (as specified below) and will allow Technicolor to reduce its financial debt, increase

headroom on financial covenants and benefit from JPMorgan Chase & Co.‟s active support in

further improving its balance sheet.

During its meeting held yesterday, the Board of Directors of Technicolor also reviewed the

unsolicited proposed shareholders resolutions together with the attached binding and irrevocable

offer letter submitted on May 25, 2012 by Vector Capital (“Vector”), an American investment

fund that conducted discussions with Technicolor before April 30, 2012. The Board included such

proposed resolutions (the “Vector Resolutions”) in the agenda for the June 20, 2012 General

Shareholders‟ Meeting. In its offer, Vector expressed support for the Company's strategy as


defined in its Amplify 2015 strategic plan without specifying precisely its declaration of intent vis-

à-vis the Company following the planned capital increase it proposes. The proceeds from the

capital increase contemplated by the Vector Resolutions amount to up to €186 million

corresponding to up to 109,114,822 shares (as specified below).

The Board notes, as Vector specified, that the approval of its resolutions by the General

Shareholders‟ Meeting requires the prior rejection of the JPMorgan Resolutions proposed by the

Board of Directors.

Accordingly, the Board of Directors does not recommend the Vector Resolutions, it being

specified that, in the event that the JPMorgan Resolutions are rejected by the General

Shareholders‟ Meeting, the JPMorgan Contracts shall be deemed null and void. In such a case, the

Vector Resolutions shall be implemented only after having been adopted by the General

Shareholders‟ Meeting.

The Company will post on its website, prior to the General Shareholders‟ Meeting, all requested

information and documents in accordance with applicable rules as well as the full text of Vector‟s

offer for the proper information of the shareholders.

Technicolor will file the required prospectuses with the Autorité des marchés financiers (AMF)

relating to the capital increase transactions contained respectively in the JPMorgan Resolutions

and the Vector Resolutions, in accordance with the terms of the JPMorgan Contracts and the

Vector offer.

Impact from the JPMorgan Resolutions

Take up Rate by the existing shareholders 0% 100%

(million of shares)

Number of shares issued in the reserved capital increase 72.3 72.3

Number of shares issued in the rights issue 20.2 26.9

Total number of shares issued 92.5 99.2

Number of shares issued to existing shareholders 0.0 20.1

Number of shares issued to JPMorgan 92.5 79.1

JPMorgan ownership post right issue 29.96% 25.18%

(million euros)

Total investment by JPMorgan 147 126

Proceeds financed by existing shareholders 0 31

Total proceeds for Technicolor 147 158


Impact from the Vector Resolutions

Take up Rate by the existing shareholders 0% 100%

(million of shares)

Number of shares issued in the reserved capital increase 47.5 47.5

Number of shares issued in the rights issue 46.2 61.6

Total number of shares issued 93.7 109.1

Number of shares issued to existing shareholders 0.0 50.5

Number of shares issued to Vector 93.7 58.6

Vector ownership post right issue 29.94% 18%

(million euros)

Total investment by Vector 162 108

Proceeds financed by existing shareholders 0 79

Total proceeds for Technicolor 162 186


June 2012: Further details following the press release of

May 30, 2012

Paris (France), 6th

June 2012 – Following discussions with the Autorité des marchés financiers

(AMF), the Company provides the following details on the transaction agreed with Jesper

Cooperatief U.A. ("Jesper"), a company controlled by JPMorgan Chase & Co., and on Vector

Capital‟s offer received on May 25:

- In accordance with its undertaking to promote the transaction agreed with Jesper to its

shareholders, Technicolor will continue to use its reasonable best efforts to obtain the

approval of the transaction by the General Shareholders‟ Meeting to be held on June 20 and to

seek undertakings to vote in favor of this transaction from shareholders holding at least 2% of

the share capital of the Company.

- As a reminder, at its May 29, 2012 meeting, the Board of Directors unanimously resolved to

recommend to the Company‟s shareholders that they vote in favor of the resolutions relating

to the implementation of the transaction agreed upon in the contracts entered into between

Technicolor and Jesper on May 2, 2012 (the "JPMorgan Contracts"). This recommendation is

based, among other elements, on the contractual commitments undertaken by the Company to

Jesper under these contracts.

- In execution of the JPMorgan Contracts, the Company filed with the AMF for its approval a

draft prospectus relating to the capital increases that are part of the transaction agreed upon

with Jesper.

- In the event that the General Shareholders‟ Meeting rejects the resolutions recommended by

the Board of Directors and approves the proposed resolutions submitted by Vector Capital on

May 25 (the "Vector Resolutions"), Technicolor will file a draft prospectus as soon as

possible for AMF approval, based on the commitments of Vector Capital, for the

implementation of the capital increases contemplated by the Vector Resolutions.

To the date the 2011 Annual Report Update was filed, there has been no other noticeable change

in the commercial and financial situation of the Group since the filing of the 2011 annual report.


1.7. Press release of 11th June 2012: Update on the JPMorgan proposed

transaction

Paris (France), June 11, 2012 – Following the filing by Vector Capital on May 25 of resolutions

to be submitted to the General Shareholders‟ Meeting to be held on June 20 (the “Vector

Resolutions”), Technicolor received on June 8 in the morning a proposal (the “Amended

Proposal”) submitted by Jesper Cooperatief U.A. (“JPMorgan), in order to amend the contracts

entered into between the two parties on May 2, 2012 (the “JPMorgan Contracts”). The Board of

Directors of Technicolor met the same day to review the Amended Proposal.

Under the Amended Proposal, JPMorgan proposed to increase the subscription price of the shares

to be issued under the reserved capital increase from €1.6 to €1.9 per share, so that the total capital

increase proceeds would have been comprised between €169 million and €179 million, compared

to the total proceeds implied by the JPMorgan Contracts comprised between €147 million and

€158 million. The Board viewed very favorably JPMorgan‟s willingness to increase the price of

the reserved capital increase.

The Amended Proposal was subject, however, to the introduction of new terms in the JPMorgan

Contracts that the Board of Directors deemed unfavorable to the Company and its shareholders.

These new terms, which were not included in the JPMorgan Contracts, included a break-up fee

and a new condition making the JPMorgan Resolutions subject to no resolution having an

equivalent object (including the Vector Resolutions, as amended, as the case may be) being put to

the vote of the General Shareholders' Meeting5. Given the obligation under French law to put to

the vote of the General Shareholders„ Meeting the Vector Resolutions or any amendment

presented by a shareholder, this condition would have made the JPMorgan commitments under the

Amended Proposal less certain than in the original JPMorgan Contracts. As a consequence, the

Board concluded that the firm and irrevocable nature of the JPMorgan Contracts was more

beneficial to the Company and its shareholders, and that the uncertainty created by the new

condition outweighed the benefits of the Amended Proposal.

In compliance with its obligations under the JPMorgan Contracts, the Company will continue to

use its reasonable best efforts to obtain the approval of the transaction agreed on May 2 by the

General Shareholders‟ Meeting to be held on June 20. As a reminder, at its May 29, 2012 meeting,

the Board of

Directors unanimously resolved to recommend to the Company‟s shareholders that they vote in

favor of the resolutions relating to the implementation of this transaction.

5This condition is specified as follows in the Amended Proposal: “no submission nor approval of

any resolutions having an equivalent object, including the resolutions A, B, C, D, E, F [the Vector

Capital resolutions] as amended, as the case may be”.


2. Notes on the 2012 forecasts - Statutory Auditors’ report on

the profit forecasts

2.1 Notes on the 2012 forecasts

The Company confirms the targets announced in previous publications, namely:

to generate Adjusted EBITDA of €475-500 million, reflecting:

o ongoing robust activity in the Technology and Entertainment Services businesses,

o the return to profit of the Connected Home business, with Adjusted EBITDA expected to

reach positive figures in the second half of the year,

o a rise in operating expenses to support growing businesses, including M-GO,

o an uncertain economic environment;

to continue to generate positive available cash flow within the Group, despite higher

restructuring expenses and investment in growing businesses; and

compliance with all covenants relating to the Group's credit agreements.

The 2012 Adjusted EBITDA target, qualified as results forecasts for the purposes of the current

Update, is subject to the following main underlying assumptions, on which the Group has based its

forecasts, and to the Statutory Auditors‟ report.

In order to provide a comparable view of changes in operating performance, Technicolor publishes

Adjusted EBITDA which excludes asset impairment charges, restructuring costs, other income

and expenses, amortization and the impact of provisions for risks, litigation and warranties. The

Company considers that this information may help investors in their analysis of the Group‟s

performance by excluding factors it considers to be non-representative of Technicolor‟s normal

operating performance. The Group uses Adjusted EBITDA to evaluate the results of its strategic

efforts. This definition of Adjusted EBITDA is comparable with Technicolor's credit agreements

and is used in the calculation of the applicable financial covenants.

As a reminder, in fiscal year 2011 Technicolor generated Adjusted EBITDA of €475 million.

The 2012 forecasts presented above are the result of a budget update based on the following

process:

the annual budget exercise approved in early 2012 for all the Group's segments and

businesses;

2012 first quarter activity (review of major KPIs, risks and opportunities, market trends and

competition, customer portfolio analysis, strategic programs and key initiatives) review with

Executive Management;

presentation to the Board of Directors on April 25, 2012, of first quarter results and updated

forecasts for each business for the following three quarters (including main income statement

indicators such as revenue and Adjusted EBITDA as well as cash flow items).

These perspectives have been prepared in accordance with accounting methods in line with those

used in the preparation of the consolidated financial statements and are based on assumptions

defined by the Group, including:

a US dollar/euro exchange rate of 1.40;


a stable scope of consolidation with no significant acquisitions or disposals, other than the

current disposal of the Broadcast Services business which is expected to be deconsolidated in

mid-2012, following completion of the operation;

an uncertain economic context, in which the Group forecasts different market trends in its

main businesses during fiscal year 2012.

Finally, the Adjusted EBITDA target also includes specific assumptions for each segment and the

successful application of actions to improve operating performance and reduce costs, particularly

those announced in December 2011. These assumptions are set out below:

Technology:

In 2011, this segment generated revenue of €456 million and Adjusted EBITDA of €346 million.

2012 forecasts are based on the following main assumptions:

the Licenses business is expected to continue to benefit from the expansion of its licensing

programs in 2012. Contracts are also expected to be renewed and new ones signed with a

comparable operating expenses structure. Finally, the business should continue to expand its

brand name licensing program, by expanding into new product categories;

Research & Innovation expenses will not increase;

in addition, a significant step is anticipated in 2012 with the commercial launch of MediaNavi

during the summer. This initiative aims to encourage an increase in new digital content

distribution models under the consumer brand M-GO, which was presented at the Consumer

Electronics Show (“CES”) in Las Vegas in January 2012. This launch is expected to lead to

an increase in marketing expenses.

Entertainment Services:

In 2011, this segment generated revenue of €1,832 million and Adjusted EBITDA of €230 million.

2012 forecasts are based on the following main assumptions:

a strong seasonal bias with revenues and Adjusted EBITDA higher in the second half, as

customer business in this segment is higher in the second half of the year;

forecasts are based on a provisional film production calendar provided by the studios.

Forecasts also depend on the success of films;

the Group expects the specific markets in which its DVD replication business is concentrated

to show better resilience to the overall decline in the DVD market expected by Futuresource

Consulting. Forecasts are based on a limited drop in volumes for the Company as lower

DVD-SD volumes are partly offset by a rise in Blu-ray™ volumes;

the Group expects the Film Services business to experience a drop in photochemical film

volumes over the year as a whole, in line with trends seen in the first quarter of 2012;

the Creation Services business is expected to offset the fall in Film Services activity, notably

due to the expected growth in digital production and post production business;

outsourcing agreements with Deluxe in Europe and Asia Pacific for photochemical film

production services should lead to lower fixed costs and thereby limit the impact on Adjusted

EBITDA, which is also expected to benefit from operating improvement initiatives in the

Creation Services and Theatrical Services businesses.


Digital Delivery:

In 2011, this segment generated revenue of €1,157 million and a negative Adjusted EBITDA of

€20 million. 2012 forecasts are based on the following main assumptions:

trends in Set-Top Box and Gateways should vary widely from one region to another, with

dynamic markets mainly in Latin America and Asia Pacific.

a recovery in the Digital Delivery segment whose scope will cover only the Connected Home

business following completion of the disposal of the Broadcast Services business in mid-

2012;

the Group has based its 2012 forecasts for the Connected Home business on:

o unchanged revenues in North America compared to the previous fiscal year,

o a sharp increase in revenues in Latin America, which remains a very dynamic market,

o an increase in revenues in Asia Pacific, where the Company is increasing its presence,

o a gradual improvement in market conditions in Europe,

o unchanged R&D capacity through new rationalization of hardware and software

operations as well as increased use of "ODM" (Original Design Manufacturer)

outsourcing for the design and manufacture of low and mid-range Set-Top Boxes,

o the business recovery plan announced in December 2011, which targets a return to

Adjusted EBITDA breakeven in 2012 for this business, with positive Adjusted EBITDA

expected in the second half of 2012. This recovery plan is expected to generate savings of

approximately €30 million in 2012.

Finally, the Group expects to see an improvement in the cost structure of its support functions

through a number of cost saving initiatives amounting to approximately €10 million on an

annualized basis.

These forecasts reflect the Group's current view of the future and remain subject to risk and

uncertainty. They are based on management‟s current expectations and beliefs in light of the

information currently available and are subject to a number of factors and uncertainties that could

cause actual results to differ materially from those described in the forward-looking statements.

Moreover, the materialization of certain risks described in section 3 "Risk Factors" of the 2011

Annual Report could impact the Group's businesses and the achievement of the forecasts,

statements and information set out above.

In addition to statements that are forward-looking by reason of context, other forward-looking

statements may be identified by use of the terms “may”, “will”, “should”, “expects”, “plans”,

“intends”, “anticipates”, “believes”, “estimates”, “projects”, “predicts” and “continue” and similar

expressions. By their nature, forward-looking statements involve risk and uncertainty because they

relate to events and depend on circumstances that are anticipated to occur in the future. Such

statements are also subject to assumptions concerning, among other things, the Group‟s

anticipated business strategies, its intention to introduce new products and services, anticipated

trends in its business, and Technicolor‟s ability to continue to control costs and maintain quality.


2.2 Statutory Auditors’ report on the profit forecasts

To the Chief Executive Officer

In our capacity as Statutory Auditors and pursuant to European Commission regulation (EC)

809/2004, we have prepared the current report on the results forecasts for Technicolor S.A. as

included in section 2.1 of the update to the 2011 Annual Report filed with the AMF on

June 11, 2012.

These forecasts and significant underlying assumptions have been prepared under your

responsibility, pursuant to the provisions of European Commission regulation (EC) 809/2004 and

CESR recommendations relating to the forecasts.

It is our responsibility, on the basis of our work, to give our conclusion, in the terms required by

Appendix I, point 13.2 of European Commission regulation (EC) 809/2004, on the adequacy of

the preparation of these forecasts.

We conducted our work by applying the procedures we considered necessary in light of the

professional standards of the French auditing body (“Compagnie Nationale des Commissaires aux

Comptes”) for this type of engagement. These procedures include an assessment of the processes

used by Management to prepare the forecasts as well as procedures to ensure the compliance of

accounting methods used with those followed in the preparation of Technicolor S.A.'s historical

information. They also include the collection of information and clarifications which we believed

necessary to obtain reasonable assurance that the forecasts have been adequately prepared on the

basis of the stated assumptions.

We remind you that, as forecasts are by nature uncertain, actual results may differ significantly

from the forecasts presented and we offer no opinion as to the likelihood of these forecasts being

achieved.

In our opinion:

the forecasts have been adequately prepared in accordance with the indications;

the accounting base used to prepare these forecasts complies with the accounting methods

used by Technicolor S.A.

This report is issued for the sole purpose of public offerings in France and other European Union

countries in which the prospectus, including the update to the 2011 Annual Report approved by

the AMF, may be issued and may not be used in any other context.

The Statutory Auditors

Paris La Défense, June 11, 2012 Courbevoie, June 11, 2012

KPMG Audit Mazars

A division of KPMG SA.

Isabelle Allen

Partner

Jacques Pierre

Partner

Jean-Louis Simon

Partner

Simon Beillevaire

Partner


3. Information about the segmental presentation of the

Group’s activities

End 2011, the “Digital Delivery” Segment comprised 2 businesses, namely “Connected Home”

and “Digital Content Delivery”. The latest business brought together 2 activities “Media Services”

and “Broadcast Services”.

Following the disposal of the “Broadcast Services” activity currently underway, the “Media

Services” activity will focus on its traditional activity in 2012 and will, as of mid-2012, be under

the operational control of the “Creation and Theatrical Services” business.

The segmental presentation of financial information has been modified accordingly in 2012, to

reflect this new internal organization:

The “Media Services” activity, formerly reported as part of the „Digital Delivery‟

segment, are transferred to the “Creation Services” business within the “Entertainment

Services” segment.

The “Digital Delivery” segment now includes the “Connected Home” business and the

“Broadcast Services” activity, which will be deconsolidated upon completion of the

transaction expected mid-2012. After the transaction is completed, “Connected Home”

will be the sole business within the “Digital Delivery” segment.

New presentation

Technology

Entertainment

Services

Creation and Theatrical Services

DVD Services

PRN

Digital Delivery

Connected Home

Media Services

Broadcast Services

Technology

Entertainment

Services

Creation and Theatrical Services

DVD Services

PRN

Digital Delivery

Connected Home

Divested to Ericsson, closing

expected mid 2012

2011 New presentation


4. Ongoing litigations

Note 35 of the Group‟s consolidated financial statements is updated as follows:

Banco Finantia case

In the course of the Sauvegarde proceeding, the Mandataires Judiciaires in charge of Technicolor‟s

Sauvegarde contested the claim in an amount of €9.9 million of Banco Finantia, a Portuguese

bank, due to a declaration outside of the legal time limit. Banco Finantia had acquired such claim

from the French branch of Bank of America, which held the claim at the opening of the

Sauvegarde proceeding, and which did not declare the claim prior to the transfer to Banco

Finantia. Banco Finantia declared its claim on the last day of the 4-month deadline applicable to

foreign creditors under Article R. 622-24 of the French Commercial Code. The Company and its

Mandataires Judiciaires consider that, as this claim was held by a French creditor on the date the

Sauvegarde proceeding was opened (the French branch of Bank of America), it should have been

declared within the two-month deadline applicable to French creditors rather than the four-month

deadline applicable to foreign creditors.

On February 22, 2011, the Juge-Commissaire rendered a decision in favor of Banco Finantia,

holding that Banco Finantia benefited from the four-month deadline for the purposes of filing a

claim. The Company has appealed against this decision.

The Company envisages lodging an appeal with the French Supreme Court (Cour de cassation).

All other litigations described in note 35 of the Group‟s consolidated financial statements saw no

important change since the release of the 2011 Annual Report.

5. Share ownership threshold crossing notifications since 15th

March 2012

To the Company‟s best knowledge, no shareholder held more than 5% of the share capital or

voting rights at 15th May 2012.other than The Royal Bank of Scotland Group Plc., Apollo

Management Holdings L.P., and West Face Capital.

The following threshold crossing has been notified by shareholders to the Company and/or the

Autorité des Marchés Financiers since March 15, 2012:

Shareholders

Date of crossing

the share

ownership

threshold

Share ownership

threshold

upwards or

downwards

Threshold

crossed

Percentage of

share capital

held

Number of

shares held

West Face

Capital 19th April 2012 Upwards 5% 5.09% 11,386,038

Third point

LLC. 13th April 2012 Downwards 5% 4.84% 10,825,000


6. Person responsible for the Annual Report and its Update

6.1 Person Responsible for the Annual Report and its Update

Mr. Frederic Rose, Chief Executive Officer of Technicolor.

6.2 Certification of the Person Responsible for the Update

“I declare that, having taken all reasonable care to ensure that such is the case, the information

contained in this update to the 2011 Annual Report is, to the best of my knowledge, in accordance

with the facts and that there is no omission likely to affect the fairness of the presentation.

I have received a letter of completion of assignment from the Statutory Auditors, in which they

state that they have verified the information relating to the financial position and the financial

statements set out in the update to the 2011 Annual Report and have read the update to the 2011

Annual Report in its entirety.

The report on the consolidated financial statements for the year ended December 31, 2011,

included on page 231 of the 2011 Annual Report filed with the Autorité des marches financiers on

March 27, 20112 (no. D.12-0224) is unqualified and contains the following emphasis of matter:

“Without qualifying our opinion, we draw your attention to note 3.1 to the consolidated

financial statements which describes the reasons for applying the going concern

assumption to approve the consolidated financial statements.”

The report on the annual financial statements for the same year, included on page 258 of the 2011

Annual Report is unqualified and contains the following emphasis of matter:

“Without qualifying our opinion, we draw your attention to note 2 to the financial

statements which describes the reasons for applying the going concern assumption to

approve the financial statements."

The Statutory Auditors‟ report on the consolidated financial statements for the year ended

December 31, 2010, included on page 252 of the 2010 Registration Document submitted to the

AMF on March 30, 2011 under the n° D. 11-0196 is unqualified and contains the following

emphasis of matter:

“Without qualifying our opinion, we draw your attention to the following notes to the

consolidated financial statements:

- notes 1.2. and 3.1, which describe the impact of the financial restructuring as well as

the reasons for applying the going concern assumption to approve the consolidated

financial statements;

- notes 2.2. and 2.3., relating to the new standards effective as of January 1, 2010, and

to the new interpretation IFRIC 19 “Extinguishing Financial Liabilities with Equity

Instruments” which the Company adopted on January 1, 2010 in advance of its

effective application date.”

The report on the annual financial statements for the same fiscal year included on page 281 of the

2010 Annual Report is unqualified and contains the following observation:

“Without qualifying our opinion, we draw your attention to the notes 1.2 and 2 to the

financial statements which describe the impact of the financial restructuring as well as


the reasons for applying the going concern assumption to approve the financial

statements.”

The Statutory Auditors‟ report on the consolidated financial statements for the year ended

December 31, 2009, included on page 299 of the 2009 Annual Report submitted to the AMF on

March 30, 2010 under the n° D. 10-0193 is unqualified and contains the following emphasis of

matter:

“Without qualifying the above opinion, we draw your attention to notes 1.2 and 3.1 of the

consolidated financial statements, which describe, in particular, the Company’s situation

in relation to the Sauvegarde proceeding and its financial restructuring.”

The Statutory Auditors‟ report on the parent company financial statements for the same fiscal year

included on page 326 of the 2009 Annual Report is unqualified and contains the following

emphasis of matter:

“Without qualifying the above opinion, we draw your attention to notes 1.2 and 2 of the

financial statements, which describe, in particular, the Company’s situation in relation to

the Sauvegarde proceeding and its financial restructuring.”

The historical financial information presented in the 2011 Annual Report has been subject to

reports by the Statutory Auditors.

Chief Executive Officer, Technicolor,

Frederic Rose


7. Cross Reference Table

Information required under Appendix 1 of

regulation (EC) 809/2004

Corresponding

sections and chapters

of the Annual Report

Corresponding sections

and chapters of the update

1. Person responsible

1.1 Names and positions of the persons

responsible for the information

Chapter 7, section

7.9.2

Section 6

1.2 Declaration by the persons responsible Chapter 7, section

7.9.1

Section 6

2. Statutory Auditors

2.1 Name and address Chapter 7, sections

7.7.1 and 7.7.2

N/A

2.2 Resignation or departure of Statutory

Auditors N/A

N/A

3. Selected financial information

3.1 Historical financial information Chapter 1, section 1.1 Section 1

3.2 Interim financial information N/A N/A

4. Risk factors Chapter 3 N/A

5. Information about the issuer

5.1 History and development of the Company Chapter 1, section

1.2.1

N/A

5.2 Investments Chapter 8, section 8.2

Notes 4, 12, 13, 33

and 37 to the

consolidated financial

statements

N/A

6. Business overview

6.1 Principal activities Chapter 1, sections

1.2.3 and 1.3

Section 3

6.2 Principal markets Chapter 1, section 1.3

and Chapter 2, section

2.2

N/A

6.3 Exceptional events N/A N/A

6.4 Dependency from certain contracts Chapter 2, section

2.10.3 and Chapter 3,

section 3.3

N/A

6.5 Competitive position Statements regarding

competitive position

(preambule)

N/A

7. Organizational structure

7.1 Brief description Chapter 7, sections

7.5.1 and 7.5.2

N/A

7.2 List of main subsidiaries Chapter 7, section

7.5.1 and chapter 8,

section 8.2

Note 38 to the


statements

N/A

8. Property, plants and equipment

8.1 Material tangible fixed assets important or

planned

Chapter 7, section 7.1

and chapter 8, section

N/A




Corresponding





8.2

Note 12 to the


statements

8.2 Environmental issues potentially affecting the

use of the tangible fixed assets Chapter 6, section 6.2

N/A

9. Operating and financial review

9.1 Financial position Chapter 2, sections

2.3, 2.9 and 2.10.3

Section 1

9.2 Operating results Chapter 2, section 2.2,

2.4,2.5 and 2.9

N/A

10. Cash and capital

10.1 Information concerning capital resources

(short and long term)


Note 22 to the


statements

N/A

10.2 Sources, amounts and description of cash

flows

Chapter 2, section

2.10

N/A

10.3 Information on borrowing conditions and

financing structure

Chapter 2, section

2.10.3


Notes 25 and 26 to the


statements

N/A

10.4 Restrictions on use of capital resources,

having materially impact on business operations

Chapter 2, section

2.10.3


N/A

10.5 Expected sources of financing N/A N/A

11. Research and development, patents and

licenses

Chapter 1, section

1.3.1, Chapter 2,

section 2.9.3 and Note

7 to the consolidated

financial statements

N/A

12. Trend information

12.1 Main trends in production, sales and

inventory, and in costs and selling prices, since the end

of the last fiscal year N/A

N/A

12.2 Known trends, uncertainties, demands,

commitments or events that might have a material

effect on prospects for the current fiscal year

Chapter 2, sections 2.2

and 2.11

N/A

13. Profit forecasts or estimates N/A Section 2

14. Administrative, management, and

supervisory bodies and senior management

14.1 Information concerning Members of the

administrative and management bodies (list of

mandates performed during the last five years)

Chapter 4, sections

4.1.2 and 4.1.3

N/A

14.2 Conflicts of interest in administrative and

management bodies

Chapter 4, section

4.1.3.3

N/A

15. Remuneration and benefits

15.1 Remuneration paid and benefits in kind Chapter 4, sections 4.4

and 4.5.2

N/A

15.2 Amounts of provisions booked or otherwise Chapter 4, section N/A




Corresponding





recognized for the payment of pensions, retirement

annuities or other benefits

4.5.2

16. Board practices

16.1 Expiry date of current terms of office Chapter 4, section

4.1.2

N/A

16.2 Service contracts with Members of

administrative bodies

Chapter 4, section

4.1.3.6

N/A

16.3 Information about the Audit Committee and

the Remuneration Committee

Chapter 4, section

4.2.1.4

N/A

16.4 Declaration – Corporate governance

applicable in the home country of the issuer

Chapter 4, section

4.2.1.1

N/A

17. Employees

17.1 Number of employees Chapter 6, section

6.1.1

N/A

17.2 Profit sharing and stock options Chapter 4, sections

4.1.3.5 and 4.4.5 and

chapter 6, sections

6.1.3 and 6.1.4

N/A

17.3 Agreements for employees‟ equity stake in

the capital of the issuer

Chapter 6, section

6.1.2

N/A

18. Major shareholders

18.1 Shareholders owning more than 5% of the

share capital or voting rights

Chapter 5, section

5.1.1

Section 5

18.2 Existence of specific voting rights Chapter 7, section

7.2.3

N/A

18.3 Control of the Company Chapter 5, section

5.1.3

N/A

18.4 Agreement known to the Company which

could lead to a change in control if implemented N/A

N/A

19. Related party transactions Chapter 8, section 8.2

Note 36 to the


statements

N/A

20. Financial information concerning the issuer‟s

assets and liabilities, financial position and profits and

losses

20.1 Historical financial information Chapter 8, sections

8.1, 8.2, 8.4 and 8.5

N/A

20.2 Pro forma financial information N/A N/A

20.3 Financial statement Chapter 8 N/A

20.4 Auditing of historical annual financial

information

Chapter 7, sections

7.9;

Chapter 8, sections 8.3

and 8.7

N/A

20.5 Age of latest audited financial information Chapter 8, section 8.1 N/A

20.6 Interim and other financial information N/A Section 1

20.7 Dividend distribution policy Chapter 5, section

5.1.9

N/A

20.8 Legal and arbitration proceedings Chapter 3, sections

3.1and 3.4,


Section 4




Corresponding





Note 35 to the


statements

20.9 Significant change in the

financial or business

situation

N/A

N/A

21. Additional information

21.1 Share capital Chapter 5, section 5.1 N/A

21.2 Articles of incorporation and bylaws Chapter 4, section

4.1.1 Chapter 7,

section 7.2

N/A

22. Material contracts Chapter 7, section 7.3 N/A

23. Third-party information, statement by experts

and declarations of any interest

N/A

23.1 Information on any statement or report

included in the document N/A

23.2 Information from a third party Preambule

24. Documents on display Chapter 7, section 7.6 N/A

25. Information on holdings N/A N/A

2011 Annual Report Update - Technicolor

Documents

Transcript of 2011 Annual Report Update - Technicolor