2012 ANNUAL REPORT REPORT ANNUAL Corporate Headquarters: 1-5, rue Jeanne d’Arc 92130 Issy-les-Moulineaux – France E-mail: [email protected] Tel.: +33 (0)1 41 86 50 00 – Fax: +33 (0)1 41 86 58 59 Technicolor Inc. 6040 Sunset Blvd Hollywood, CA 90 028 USA Tel.: +1 (323) 817 6600 www.technicolor.com ANNUAL REPORT 2012 Technicolor S.A. with a share capital of €335,543,841 – 333 773 174 R.C.S. Nanterre including the Annual Financial Report TTEN2012EN2012_D DRFRF_E ENN_C COUVOUV_P PLANCHE.inddLANCHE.indd I 115/04/135/04/13 1 17:297:29 PRESENTATION OF THE GROUP AND TECHNICOLOR ITS ACTIVITIES ................................................................................................................................................................................................... 5 AND ITS SHAREHOLDERS ...........................................................................................................................93 1 1.1 financial data ..................................................................................................................................................................... 6 5 5.1 Share capital ............................................................................................................................................................................................................. 94 1.2 History and strategy of the Company .................................................................................................. 8 5.2 Listing information ................................................................................................................................................................................100 1.3 Business overview ...................................................................................................................................................................................... 13 SOCIAL INFORMATION OPERATING AND FINANCIAL REVIEW AND SUSTAINABILITY.................................................................................................................................................103 AND PROSPECTS ............................................................................................................................................................................ 23 6 6.1 Employees and workforce ................................................................................................................................................104 2 2.1 2Overview .......................................................................................................................................................................................................................... 4 6.2 Environmental matters ............................................................................................................................................................ 113 2.2 Trends in the M&E industry ....................................................................................................................................... 24 6.3 Stakeholder relations and local impacts of the 2.3 Summary of results .............................................................................................................................................................................. 25 Company’s activities .................................................................................................................................................................... 123 ............................................................... 2.4 Seasonality ................................................................................................................................................................................................................ 26 6.4 Technicolor foundation for cinema heritage 124 2.5 Geographic breakdown of revenues & effect of exchange rate fluctuations ............................................................................................................................................... 26 2.6 Events subsequent to December 31, 2012 ....................................................................... 27 2.7 Notification of interests acquired in the share capital of French companies in 2012 ................................................................................................ 27 ADDITIONAL INFORMATION .............................................................................................. 125 2.8 Notification of interests acquired in the share 7.1 Property, plant and equipment ..........................................................................................................................126 ................................................................................................... capital of French companies in 2011 28 7 7.2 Memorandum and bylaws .................................................................................................................................................128 ............................................................................. 2.9 Results of operations for 2012 and 2011 28 7.3 Material contracts ...................................................................................................................................................................................130 2.10 Liquidity and capital resources ............................................................................................................................. 36 7.4 Additional tax information ..............................................................................................................................................130 2.11 Priorities and objectives for 2013 .............................................................................................................. 44 7.5 Organization of the Group ........................................................................................................................................... 131 7.6 Available documents .......................................................................................................................................................................134 7.7 Information on accounting services ........................................................................................................134 7.8 Accounting fees and services ....................................................................................................................................135 7.9 Persons responsible for the Registration RISK FACTORS ........................................................................................................................................................................................ 45 Document and the Annual Financial Report ................................................................136 3.1 Riskrelated to the debt restructuring ............................................................................................... 46 3 3.2 Market risks .............................................................................................................................................................................................................. 49 3.3 Risks related to the business ....................................................................................................................................... 50 3.4 Other risks ................................................................................................................................................................................................................... 57 3.5 6Insurance ........................................................................................................................................................................................................................ 0 FINANCIAL STATEMENTS .................................................................................................................... 137 8.1 Technicolor 2012 consolidated financial 8 statements ................................................................................................................................................................................................................... 138 8.2 Notes to the consolidated financial statements ....................................................144 8.3 Statutory Auditors' report on the Consolidated CORPORATE GOVERNANCE AND Financial Statements ..................................................................................................................................................................... 221 INTERNAL CONTROL ................................................................................................................................................ 61 8.4 Technicolor SA parent company financial statements ................................................................................................................................................................................................................. 223 4 4.1 Board of Directors ................................................................................................................................................................................. 62 8.5 Notes to the parent company financial statements .................................. 226 4.2 Chairman’s report on corporate governance, internal control and risk management .............................................................................................