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o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
OR | ||
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2004 | ||
OR | ||
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
N/A | Republic of France | |
(Translation of Registrant’s name into English) | (Jurisdiction of incorporation or organization) |
Name of each exchange | ||
Title of each class | on which registered | |
Ordinary Shares, nominal value€5.50 per share | New York Stock Exchange* | |
American Depositary Shares (as evidenced by American Depositary Receipts), each representing one share, nominal value€5.50 per share | New York Stock Exchange |
* | Listed, not for trading or quotation purposes, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission. |
American Depositary Shares | 63,224,034 | |||
Ordinary Shares, nominal value€5.50 per share | 1,072,624,363 |
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• | our ability to retain or obtain required licenses, permits, approvals and consents; | |
• | legal and regulatory requirements, and the outcome of legal proceedings and pending investigations; | |
• | the lack of commercial success of our product or services, particularly in the television, motion pictures and music markets; | |
• | challenges to, loss, infringement, or inability to enforce intellectual property rights; | |
• | lost sales due to piracy, particularly in the motion picture and music business; | |
• | downturn in the markets in which we operate, particularly the music market; | |
• | increased technical and commercial competition, particularly in the television market; | |
• | our ability to develop new technologies or introduce new products and services; | |
• | changes in our corporate rating or rating of Vivendi Universal’s debt; | |
• | the availability and terms of financing; | |
• | changes in business strategy or development plans; | |
• | political instability in the jurisdictions in which we operate; | |
• | fluctuations in interest rates or foreign currency exchange rates and currency devaluations; | |
• | inflation and instability in the financial markets; | |
• | restrictions on the repatriation of capital; | |
• | natural disasters; and | |
• | war or acts of terrorism. |
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Item 1: | Identity of Directors, Senior Management and Advisers |
Item 2: | Offer Statistics and Expected Timetable |
Item 3: | Key Information |
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Year Ended December 31, | |||||||||||||||||||||||||||||
2002 with VE | |||||||||||||||||||||||||||||
accounted for | |||||||||||||||||||||||||||||
2004 as | 2003 as | using the equity | 2002 as | 2001 as | 2000 | 2000 as | |||||||||||||||||||||||
published | published | method(a) | published | published | restated(b) | published | |||||||||||||||||||||||
(In millions of euros) | |||||||||||||||||||||||||||||
STATEMENT OF INCOME | |||||||||||||||||||||||||||||
Amounts in accordance with French GAAP | |||||||||||||||||||||||||||||
Revenues | € | 21,428 | € | 25,482 | € | 28,112 | € | 58,150 | € | 57,360 | € | 41,580 | € | 41,798 | |||||||||||||||
Operating income | € | 3,476 | € | 3,309 | € | 1,877 | € | 3,788 | € | 3,795 | € | 1,823 | € | 2,571 | |||||||||||||||
Income (loss) before gain (loss) on businesses sold, net of provisions, income tax, equity affiliates, goodwill amortization and minority interests | 2,774 | 2,102 | (2,217 | ) | (954 | ) | 1,867 | 1,061 | 1,938 | ||||||||||||||||||||
Gain (loss) on businesses sold, net of provisions/exceptional items(b) | (140 | ) | 602 | 1,125 | 1,049 | 2,365 | 3,812 | 2,947 | |||||||||||||||||||||
Goodwill amortization and impairment losses | (669 | ) | (2,912 | ) | (19,434 | ) | (19,719 | ) | (15,203 | ) | (634 | ) | (634 | ) | |||||||||||||||
Minority interests | (1,030 | ) | (1,212 | ) | (574 | ) | (844 | ) | (594 | ) | (625 | ) | (625 | ) | |||||||||||||||
Net income (loss) | € | 754 | € | (1,143 | ) | € | (23,301 | ) | € | (23,301 | ) | € | (13,597 | ) | € | 2,299 | € | 2,299 | |||||||||||
Earnings (loss) per share — basic | 0.70 | (1.07 | ) | (21.43 | ) | (21.43 | ) | (13.53 | ) | 3.63 | 3.63 | ||||||||||||||||||
Earnings (loss) per share — diluted | 0.63 | (1.07 | ) | (21.43 | ) | (21.43 | ) | (13.53 | ) | 3.41 | 3.41 | ||||||||||||||||||
Amounts in accordance with US GAAP | |||||||||||||||||||||||||||||
Revenues | 21,254 | 25,321 | — | 40,062 | 51,733 | 34,276 | 34,276 | ||||||||||||||||||||||
Net income (loss) | 2,921 | (1,358 | ) | — | (43,857 | ) | (1,172 | ) | 1,908 | 1,908 | |||||||||||||||||||
Earnings (loss) per share — basic | 2.73 | (1.27 | ) | — | (40.35 | ) | (1.19 | ) | 3.24 | 3.24 | |||||||||||||||||||
Earnings (loss) per share — diluted | 2.58 | (1.27 | ) | — | (40.35 | ) | (1.19 | ) | 3.03 | 3.03 | |||||||||||||||||||
Dividend per share | 0.0 | 0.0 | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 | ||||||||||||||||||||||
Average share outstanding (millions)(c) | 1,072.1 | 1,071.7 | 1,087.4 | 1,087.4 | 1,004.8 | 633.8 | 633.8 | ||||||||||||||||||||||
Shares outstanding at year-end (millions) | 1,072.6 | 1,071.5 | 1,068.6 | 1,068.6 | 1,085.8 | 1,080.8 | 1,080.8 | ||||||||||||||||||||||
STATEMENT OF FINANCIAL POSITION | |||||||||||||||||||||||||||||
Amounts in accordance with French GAAP | |||||||||||||||||||||||||||||
Intangible assets, net (including goodwill, net) | 23,195 | 29,567 | 34,768 | 34,768 | 60,919 | 67,313 | 67,313 | ||||||||||||||||||||||
Shareholders’ equity | € | 13,621 | € | 11,923 | € | 14,020 | € | 14,020 | € | 36,748 | € | 56,675 | € | 56,675 | |||||||||||||||
Minority interests | 2,959 | 4,929 | 5,497 | 5,497 | 10,208 | 9,787 | 9,787 | ||||||||||||||||||||||
Equity and quasi-equity(d) | 17,580 | 17,852 | 20,517 | 20,517 | 46,956 | 66,462 | 66,462 | ||||||||||||||||||||||
Total assets | 43,288 | 54,920 | 69,333 | 69,333 | 139,002 | 150,738 | 150,738 | ||||||||||||||||||||||
Financial net debt(e) | € | 3,135 | € | 11,565 | € | 12,337 | € | 12,337 | € | 37,055 | € | 35,535 | € | 35,535 | |||||||||||||||
Amounts in accordance with US GAAP | |||||||||||||||||||||||||||||
Shareholders’ equity | 14,483 | 9,804 | — | 11,655 | 54,268 | 64,729 | 64,729 | ||||||||||||||||||||||
Total assets | 44,061 | 54,696 | — | 69,790 | 151,139 | 151,818 | 151,818 | ||||||||||||||||||||||
STATEMENT OF CASH FLOWS | |||||||||||||||||||||||||||||
Amounts in accordance with French GAAP | |||||||||||||||||||||||||||||
Net cash provided by operating activities | 4,798 | 3,886 | 2,795 | 4,670 | 4,500 | 2,514 | 2,514 | ||||||||||||||||||||||
Net cash provided by (used for) investing activities | 2,986 | (3,900 | ) | 4,109 | 405 | 4,340 | (1,481 | ) | (1,481 | ) | |||||||||||||||||||
Net cash (used for) provided by financing activities | (7,517 | ) | (4,313 | ) | (2,461 | ) | (3,792 | ) | (7,469 | ) | (631 | ) | (631 | ) | |||||||||||||||
Capital expenditures and purchases of investments | € | 1,947 | € | 5,974 | € | 3,729 | € | 8,926 | € | 13,709 | € | 38,343 | € | 38,343 |
(a) | This condensed French GAAP financial data presents Vivendi Universal’s consolidation scope as of December 31, 2002. VE is accounted for using the equity method from January 1, 2002, instead of December 31, 2002. |
(b) | Restated to reflect changes in accounting policies and financial statement presentation adopted in 2001. As permitted by theComité de la Réglementation Comptable(CRC) Rule 99.02 (§41), Vivendi Universal elected to present its Consolidated Statement of Income in a format that classifies income and expenses by function rather than by category, which was the format previously presented, and the definition of exceptional items was restricted to gain (loss) on businesses sold, net of provisions. Prior to 2001, Vivendi Universal adopted a broader definition of exceptional items, including restructuring costs, plant dismantling and closure costs and the effect of guarantees given when exercised, among others. These items are now included as a component of operating income or financing expense when they concern the impairment of financial assets. |
(c) | Excluding treasury shares recorded as a reduction of shareholders’ equity. |
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(d) | Including total shareholders’ equity, minority interests and other equity (notes mandatorily redeemable in new shares of Vivendi Universal), which are separate lines in the Consolidated Statement of Financial Position. |
(e) | Financial Net Debt, a non-GAAP measure, is defined as gross financial debt (sum of long-term debt, bank overdrafts and other short-term borrowings which are separate lines in the Consolidated Statement of Financial Position) less cash and cash equivalents, as presented in the Consolidated Statement of Financial Position. Until 2001, Vivendi Universal used a notion corresponding to Financial Net Debt less other marketable securities, short-term loans receivable, and net interest-bearing long-term loans receivable. |
Period | Average | |||||||||||||||
Month Ended | End | Rate(1) | High | Low | ||||||||||||
May 31, 2005 | 1.23 | 1.27 | 1.29 | 1.23 | ||||||||||||
April 30, 2005 | 1.29 | 1.29 | 1.31 | 1.28 | ||||||||||||
March 31, 2005 | 1.30 | 1.32 | 1.35 | 1.29 | ||||||||||||
February 28, 2005 | 1.33 | 1.30 | 1.33 | 1.28 | ||||||||||||
January 31, 2005 | 1.30 | 1.31 | 1.35 | 1.30 | ||||||||||||
December 31, 2004 | 1.36 | 1.34 | 1.36 | 1.32 |
Period | Average | |||||||||||||||
Year Ended | End | Rate(2) | High | Low | ||||||||||||
December 31, 2004 | 1.36 | 1.24 | 1.30 | 1.18 | ||||||||||||
December 31, 2003 | 1.26 | 1.13 | 1.26 | 1.04 | ||||||||||||
December 31, 2002 | 1.05 | 0.95 | 1.05 | 0.86 | ||||||||||||
December 31, 2001 | 0.89 | 0.89 | 0.95 | 0.84 | ||||||||||||
December 31, 2000 | 0.94 | 0.92 | 1.03 | 0.83 |
(1) | The average of the exchange rates for all days during the applicable month. |
(2) | The average of the exchange rates on the last day of each month during the applicable year. |
Dividend per | Dividend per | |||||||
Ordinary Share | ADS | |||||||
(euros) | (dollars)(1) | |||||||
2000(2) | 1.00 | 0.89 | ||||||
2001 | 1.00 | 0.89 | ||||||
2002 | 1.00 | 0.91 | ||||||
2003 | — | — | ||||||
2004(3) | — | — |
(1) | Translated solely for convenience into US dollars at the noon buying rates on the respective dividend payment dates, or on the following business day if such date was not a business day in the US. The noon buying rate may differ from the rate that may be used by the depositary to convert euros to US dollars for the purpose of making payments to holders of ADSs. |
(2) | Prior to December 8, 2000, the date of the completion of the Vivendi S.A., The Seagram Company Ltd. and Canal Plus, S.A. merger transactions (described below under “Item 4 — Information on the Company — History and Development of the Company”), each |
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Vivendi ADS represented one-fifth of a Vivendi ordinary share, while each Vivendi Universal ADS now represents one Vivendi Universal ordinary share. | |
(3) | The payment of a dividend of€0.60 per share for fiscal year 2004 was approved at the annual meeting of the shareholders held on April 28, 2005. This dividend was paid on May 4, 2005. |
• | fluctuations in currency exchange rates (particularly the US dollar-euro exchange rate) and currency devaluations; |
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• | restrictions on the repatriation of capital; | |
• | differences and unexpected changes in regulatory environments; | |
• | varying tax regimes which could adversely affect our results of operations or cash flows; | |
• | exposure to different legal standards and enforcement mechanisms and the associated cost of compliance therewith; and | |
• | tariffs, duties, export controls and other trade barriers. |
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Our Strategy |
• | Platforms: We have already implemented or have begun to develop the platforms on which we expect media content will be distributed in the future. The Canal+ Group currently broadcasts content across terrestrial, cable, satellite, ADSL, Digital Terrestrial Television (DTT) and UMTS (3G) platforms. UMG distributes content on CDs, DVDs, portable digital music players, other digital platforms and mobile telephony. Vivendi Universal Games (VU Games) develops products for various formats: CD-ROM, Internet, consoles and handheld devices. | |
• | Networks: We believe that quality content will drive the future success of telecommunications networks. We expect that growth of UMTS mobile telephony will rely on the availability of games, music, Internet, television and movie content. Similarly, we expect growth in fixed telephony and ADSL to be driven by the availability of music, television and video on demand. |
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Cash and | Impact | |||||||||||||
cash | Financial | on financial | ||||||||||||
Date | Assets | equivalents | gross debt | net debt | ||||||||||
(In millions of euros) | ||||||||||||||
June/December 2002 | Veolia Environnement(a) | € | 3,335 | € | — | € | 3,335 | |||||||
June/July 2002 | Vivendi Universal Publishing (VUP) — Professional and Health divisions | 894 | 37 | 931 | ||||||||||
June 2002 | Canal+ Digital | 264 | — | 264 | ||||||||||
July 2002 | Interest in Lagardère | 44 | — | 44 | ||||||||||
August 2002 | Vizzavi | 143 | — | 143 | ||||||||||
December 2002 | Houghton Mifflin | 1,195 | 372 | 1,567 | ||||||||||
December 2002 | Interest in EchoStar | 1,037 | — | 1,037 | ||||||||||
December 2002 | VUP publishing activities in Europe | 1,121 | 17 | 1,138 | ||||||||||
December 2002 | Sithe Energies Inc. | 319 | — | 319 | ||||||||||
Other divestitures (including divestiture fees) | 219 | — | 219 | |||||||||||
Sales of investments in 2002 (excluding Veolia Environnement) | 8,571 | 426 | 8,997 | |||||||||||
June 2002 | Vinci shares(b) | 291 | — | 291 | ||||||||||
Total 2002(c) | € | 8,862 | € | 426 | € | 9,288 | ||||||||
(1) | Represents the impact on the Financial Net Debt (€19.7 billion) and the value of assets received as a result of the divestitures (€4.9 billion). |
(2) | Represents the impact on the Financial Net Debt (€12.3 billion) and the value of the exchanged stake (€11.8 billion). |
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Cash and | Impact | |||||||||||||
cash | Financial | on financial | ||||||||||||
Date | Assets | equivalents | gross debt | net debt | ||||||||||
(In millions of euros) | ||||||||||||||
February 2003 | Consumer Press division | 200 | — | 200 | ||||||||||
February 2003 | Canal+ Technologies | 191 | — | 191 | ||||||||||
February/June 2003 | InterActiveCorp warrants | 600 | — | 600 | ||||||||||
April 2003 | Telepiù(d) | 457 | 374 | 831 | ||||||||||
May 2003 | Fixed-line telecommunication in Hungary(e) | 10 | 305 | 315 | ||||||||||
May 2003 | Comareg | 135 | — | 135 | ||||||||||
May 2003 | Interest in Vodafone Egypt | 43 | — | 43 | ||||||||||
June 2003 | Interest in Sithe International | 40 | — | 40 | ||||||||||
October 2003 | Canal+ Nordic(f) | 48 | — | 48 | ||||||||||
Other divestitures (including divestiture fees) | (316 | ) | 239 | (77 | ) | |||||||||
Sales of investments in 2003 | 1,408 | 918 | 2,326 | |||||||||||
June 2003 | VUE real estate(b) | 276 | — | 276 | ||||||||||
Total 2003 | € | 1,684 | € | 918 | € | 2,602 | ||||||||
February 2004 | Atica & Scipione | 31 | 10 | 41 | ||||||||||
March 2004 | Sportfive | 274 | — | 274 | ||||||||||
May 2004 | Vivendi Universal Entertainment(g) | 2,312 | 2,984 | 5,296 | ||||||||||
May 2004 | Kencell | 190 | — | 190 | ||||||||||
June 2004 | Monaco Telecom | 169 | — | 169 | ||||||||||
June/August 2004 | “flux-divertissement” (“flow entertainment”) businesses at StudioExpand and Canal+ Benelux | 49 | (7 | ) | 42 | |||||||||
June 2004 | Egée and Cèdre Towers | 84 | — | 84 | ||||||||||
August 2004 | Interest in VIVA Media | 47 | — | 47 | ||||||||||
October 2004 | UCI Cinemas | 170 | — | 170 | ||||||||||
December 2004 | 15% of Veolia Environnement | 1,497 | — | 1,497 | ||||||||||
Other divestitures (including divestiture fees) | (118 | ) | 46 | (72 | ) | |||||||||
Sales of investments in 2004 | 4,705 | 3,033 | 7,738 | |||||||||||
September 2004 | Canal+ Group headquarters(b) | 108 | — | 108 | ||||||||||
Total 2004 | € | 4,813 | € | 3,033 | € | 7,846 | ||||||||
Total divestitures completed between 2002 and 2004 | € | 15,359 | € | 4,377 | € | 19,736 | ||||||||
including the divestiture plan decided by the board of directors (between July 2002 and December 2004) | € | 12,387 | € | 4,340 | € | 16,727 |
(a) | This transaction led to the deconsolidation of Veolia Environnement debt (€15.7 billion) and the accounting of Veolia Environnement using the equity method as of December 31, 2002. | |
(b) | Divestiture of assets not included in the line “sales of investments” of the consolidated statement of cash flows but part of the divestiture plan approved by the board of directors on September 25, 2002. | |
(c) | Includes the impact of€6,279 million on Financial Net Debt for the second half of 2002, excluding Veolia Environnement. | |
(d) | Includes a€13 million adjustment corresponding to the reimbursement of accounts payable net of debt. | |
(e) | Excludes the promissory note of€10 million received by Vivendi Universal in August 2004. | |
(f) | Excludes a residual amount of approximately€7 million of deferred purchase consideration received in the first quarter of 2004 and excludes inter-company loans. | |
(g) | Corresponds to gross cash proceeds of€3,073 million, net of transaction fees and other (€107 million), Matsushita Electronic, Inc. (MEI) proceeds (€40 million) and cash closing adjustments (€614 million). Please refer to “Item 5 — Operating and Financial Review and Prospects — Liquidity and Capital Resources — Net cash provided by (used for) investing and financing activities”. From an accounting standpoint, the combination of NBC and VUE was recorded as the divestiture of 80% of Vivendi Universal’s stake in VUE, and the concurrent acquisition of a 20% stake in NBC. |
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Cash and | Impact on | |||||||||||||||||||||||
cash | Financial | financial | Exchange of | Total | ||||||||||||||||||||
Date | Assets | equivalents | gross debt | net debt | interests | impact | ||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||
January 2002 | EchoStar shares | € | 1,699 | € | — | € | 1,699 | € | — | € | 1,699 | |||||||||||||
January 2002 | Interest in Sportfive | 122 | — | 122 | — | 122 | ||||||||||||||||||
Other | 179 | — | 179 | — | 179 | |||||||||||||||||||
Purchases of investments in 2002 | 2,000 | — | 2,000 | — | 2,000 | |||||||||||||||||||
May 2002 | Entertainment assets of InterActiveCorp. | 1,757 | 2,507 | 4,264 | 6,871 | (a) | 11,135 | |||||||||||||||||
Total 2002 | € | 3,757 | € | 2,507 | € | 6,264 | € | 6,871 | € | 13,135 | ||||||||||||||
January 2003 | Additional 26% interest in SFR (ex Cegetel Group S.A.) | 4,011 | — | 4,011 | — | 4,011 | ||||||||||||||||||
March 2003 | Closing of contractual guarantees to former Rondor shareholders | 207 | — | 207 | — | 207 | ||||||||||||||||||
December 2003 | Telecom Développement | 56 | 162 | 218 | — | 218 | ||||||||||||||||||
Other | 148 | (24 | ) | 124 | — | 124 | ||||||||||||||||||
Purchases of investments in 2003 | 4,422 | 138 | 4,560 | — | 4,560 | |||||||||||||||||||
January 2004 | DreamWorks(b) | 94 | — | 94 | — | 94 | ||||||||||||||||||
March 2004 | Sportfive — exercise of put option by Jean-Claude Darmon | 30 | — | 30 | — | 30 | ||||||||||||||||||
May 2004 | VUE — exercise of call option on Barry Diller’s stake (1.5%) | 226 | — | 226 | — | 226 | ||||||||||||||||||
May 2004 | VUE — acquisition of 20% interest in NBC | — | — | — | 4,929 | (c) | 4,929 | |||||||||||||||||
Other | 57 | (6 | ) | 51 | — | 51 | ||||||||||||||||||
Purchases of investments in 2004 | 407 | (6 | ) | 401 | 4,929 | 5,330 | ||||||||||||||||||
Total completed between 2002 and 2004 | € | 8,586 | € | 2,639 | € | 11,225 | € | 11,800 | € | 23,025 | ||||||||||||||
November 2004 | Additional 16% interest in Maroc Telecom (estimation)(d) | 1,100 | — | 1,100 | — | 1,100 | ||||||||||||||||||
Total acquisitions signed between January 2002 and December 2004 | € | 9,686 | € | 2,639 | € | 12,325 | € | 11,800 | € | 24,125 | ||||||||||||||
(a) | Contribution of 320.9 million USANi LLC shares held by Vivendi Universal and stakes of 5.44% and 1.5% in VUE issued to InterActiveCorp (IAC, formerly known as USA Interactive and prior thereto as USA Networks, Inc.) and to Barry Diller, respectively, and after deduction of IAC warrants received by Vivendi Universal. | |
(b) | Includes the purchase of the music rights catalog as well as the advance on the film rights distribution agreement. | |
(c) | From an accounting standpoint, the combination of NBC and VUE is recorded as the divestiture of 80% of Vivendi Universal’s stake in VUE, and the concurrent acquisition of a 20% stake in NBC. | |
(d) | Signed on November 18, 2004 and completed on January 4, 2005. |
Subsequent Developments in 2005 — Purchase of IAC’s Equity Interests in VUE |
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2004 Developments |
Combination of VUE and NBC to form NBC Universal (NBC-Universal transaction) — May 2004 |
(3) | The main shareholder agreements entered into with GE relating to the NBC-Universal transaction are available at http://finance.vivendiuniversal.com. |
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* | Before the closing of the NBC-Universal transaction, Vivendi Universal exercised the call option on Barry Diller’s 1.5% stake in VUE for $275 million (€226 million). |
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• | a capital gain of $653 million, before a $290 million tax impact, resulting in an after-tax profit of $363 million (€312 million). The carrying value in dollars of disposed assets did not exceed the transaction value in dollars; and | |
• | a -€2,105 million foreign currency translation adjustment (with no impact on cash position or on shareholders’ equity), as Vivendi Universal reclassified to net income 80% of a cumulative foreign currency translation adjustment related to VUE (previously recorded as a reduction of shareholders’ equity and resulting from the depreciation of the dollar versus the euro since VUE’s acquisition date). |
Divestiture of 15% of Veolia Environnement, Part of Vivendi Universal’s 20.3% Stake — December 2004 |
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Maroc Telecom in 2004: Listing on the Casablanca and Paris Stock Exchanges and Execution of an Agreement for the Acquisition of 16% of the Capital |
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Consolidated Global Profit Tax System since January 1, 2004 |
Reinforcement of the Program Offerings of Canal+ Group |
Elektrim Telekomunikacja Sp. z.o.o (Elektrim Telekomunikacja) in 2004 |
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1. The transfer by Elektrim to Elektrim Telekomunikacja of the PTC shares was ineffective, and the PTC shares were to be considered as never having ceased to form part of the assets of Elektrim; | |
2. The said sale did not constitute a material breach of Article 16.1 of the shareholders agreement between DT and Elektrim, but such a material breach would occur if Elektrim did not recover the shares concerned within two months of service of the Award; | |
3. The Tribunal dismissed DT’s claim for a declaration that an Economic Impairment on the part of Elektrim existed; and | |
4. The Tribunal did not have jurisdiction over Elektrim Telekomunikacja, and the claims concerning Elektrim Telekomunikacja could not be entertained in the context of the arbitration. |
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Vivendi Universal Disposed of Approximately€1.1 Billion in Assets (Not Including the NBC-Universal and Veolia Environnement Transactions) in 2004 |
Canal+ Group |
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Non-core operations |
Vivendi Telecom International (VTI) |
Finalization of the Total Withdrawal from Publishing Operations: Divestiture of Brazilian Publishing Operations — February 2004 |
Divestiture of United Cinema International (UCI) — October 2004 |
2003 Developments |
SFR Cegetel: Vivendi Universal Invested €4 Billion in January 2003 to Strengthen its Position in SFR Cegetel |
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a. | SIT, wholly owned, controlled and consolidated by Vivendi Universal, was initially the legal owner of the 26% shareholding at an acquisition cost of€4 billion. |
b. | SIT financed this acquisition by a€2.7 billion cash contribution from Vivendi Universal (in turn financed partly by the€1 billion bond issue completed in November 2002 and redeemable in Vivendi Universal new shares on November 25, 2005) and by a non-recourse loan of€1.3 billion with a scheduled maturity of June 30, 2004. Debt service on this loan, which was drawn on January 23, 2003, was to be provided by dividends paid in respect of its 26% shareholding in Cegetel Groupe S.A. This loan was repaid in July 2003 out of the proceeds of the issuance of five-year High Yield Notes. Following the repayment of its credit facility, SIT merged with Vivendi Universal, allowing the Vivendi Universal group to simplify the ownership structure of the 26% stake in Cegetel Groupe S.A. acquired in January 2003, and thereby increase its access to dividends from Cegetel Groupe S.A. |
• | Vodafone and SFR signed an agreement to increase their cooperation and their joint economies of scale in a number of different areas through: coordination of their activities in the development and rollout of new products and services, including Vodafone live!, and development of operational synergies in procurement (including IT and technology), and best practice sharing. | |
• | On December 18, 2003, the extraordinary shareholders’ meeting of Cegetel Groupe S.A. approved the simplification of the group’s structure through the merger of Transtel, Cofira and SFR into Cegetel Groupe S.A. holding company. |
The new company resulting from the merger, which is both a mobile phone operator and the holding company of the group, was renamed SFR. It is owned 55.8% by Vivendi Universal, 43.9% by Vodafone, and 0.3% by individual shareholders. In connection with this simplification, an amendment to the Cegetel shareholders’ agreement was signed in order to include the specific provisions of the SFR shareholders’ agreement (this document is available at:http://www.vivendiuniversal.com). The group, comprised of SFR and its subsidiaries and the fixed line operator Cegetel, became SFR Cegetel. |
• | In 2004, SFR decided to implement a dividend distribution plan, which will in part involve the distribution of premiums and reserves and the introduction of quarterly advance dividend payments. Please refer to “Item 5 — Operating and Financial Review and Prospects — Liquidity and Capital Resources”. |
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* | Stake acquired by Vodafone in 2003 |
Canal+ Group: recovery efforts in 2003 |
Cash drains in 2003 |
2003 Divestitures: Vivendi Universal divested about€3 billion of assets |
Canal+ Group |
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Vivendi Universal Entertainment in 2003 |
Non-core operations in 2003 |
Vivendi Universal Publishing (VUP) in 2003 |
Vivendi Telecom International in 2003 |
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Other 2003 transactions |
• | Vivendi Universal holds 37.8% of UGC S.A.’s share capital. After the elimination of the UGC S.A. treasury shares, Vivendi Universal will hold only 40% of UGC S.A.’s share capital, and the family shareholders’ stake will be 56.20%. Vivendi Universal holds five of the 14 seats on the UGC board of directors. | |
• | Vivendi Universal has been released from the put option previously granted to the family shareholders, thereby removing a significant off-balance-sheet commitment for Vivendi Universal. | |
• | Vivendi Universal also granted a call option to the family shareholders for its UGC S.A. shares at a price of€80 million until December 31, 2005. The price may be adjusted in the case of an onward sale by UGC family shareholders at a later date (within one year of exercise of the call) with an increase in value. |
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2002 Developments |
Acquisition of the Entertainment Assets of InterActiveCorp for€11,135 million — May 2002 |
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2002 Divestitures:€9.3 billion in 2002 |
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Reorganization of Vivendi Universal Headquarters in 2002 |
Other 2002 Transactions |
• | Treasury Shares: Transactions related to treasury shares are detailed in “Item 18 — Financial Statements — Note 11.1”. The cumulative impact of treasury share cancellation on shareholders’ equity between 2000 and December 2002 was a reduction of approximately€4.6 billion. | |
• | Sale of Put Options on Vivendi Universal Shares: Vivendi Universal sold put options on its own shares, by which it agreed to buy its own shares on specified dates at specified exercise prices. As of December 31, 2002 and December 31, 2001, Vivendi Universal had outstanding obligations on 3.1 million and 22.8 million shares, respectively. The average exercise prices were€50.5 and€70, respectively, resulting in a potential commitment of€154 million and€1,597 million, respectively. These put options were only exercisable on their exercise dates and expired during the first quarter of 2003. The losses incurred by Vivendi Universal during 2002 resulting from option holders exercising their rights was€589 million, representing the net premium paid on cash settlement of the difference between the market price and the exercise price. At the end of December 2002, Vivendi Universal then marked to market put options with a specific future exercise date. This resulted in a provision of€104 million, corresponding to the premium paid by Vivendi Universal in connection with cash settlements of these options during the first quarter of 2003. The cumulative cash impact of these transactions was€951 million. |
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Year ended December 31, | ||||||||||||||||||||
On a comparable | ||||||||||||||||||||
As published | basis(a) | |||||||||||||||||||
2004 | 2003 | 2002 | 2004 | 2003 | ||||||||||||||||
(In millions of euros) | ||||||||||||||||||||
Canal+ Group | € | 3,580 | € | 4,158 | € | 4,833 | € | 3,470 | € | 3,339 | ||||||||||
Universal Music Group | 4,993 | 4,974 | 6,276 | 4,993 | 4,974 | |||||||||||||||
Vivendi Universal Games | 475 | 571 | 794 | 475 | 571 | |||||||||||||||
Media | 9,048 | 9,703 | 11,903 | 8,938 | 8,884 | |||||||||||||||
SFR Cegetel | 8,317 | 7,574 | 7,067 | 8,317 | 7,537 | |||||||||||||||
Maroc Telecom | 1,627 | 1,471 | 1,487 | 1,658 | 1,523 | |||||||||||||||
Telecom | 9,944 | 9,045 | 8,554 | 9,975 | 9,060 | |||||||||||||||
Non-core operations and elimination of intercompany transactions(b) | 109 | 584 | 813 | (20 | ) | 28 | ||||||||||||||
Total Vivendi Universal (Excluding VUE, VE and VUP assets sold in 2003) | € | 19,101 | € | 19,332 | € | 21,270 | € | 18,893 | € | 17,972 | ||||||||||
Vivendi Universal Entertainment(c) | 2,327 | 6,022 | 6,270 | — | — | |||||||||||||||
VUP assets sold in 2003(d) | — | 128 | 572 | — | — | |||||||||||||||
Veolia Environnement | — | — | 30,038 | — | — | |||||||||||||||
Total Vivendi Universal | € | 21,428 | € | 25,482 | € | 58,150 | € | 18,893 | € | 17,972 | ||||||||||
(a) | Comparable basis essentially illustrates the effect of the divestiture of VUE, the divestitures at Canal+ Group (Telepiù, Canal+ Nordic, Canal+ Benelux, etc.), the divestitures of VUP (Comareg and Atica & Scipione), Vivendi Telecom Hungary, Kencell and Monaco Telecom and the abandonment of Internet operations, and includes the full consolidation of Telecom Développement at SFR Cegetel and of Mauritel at Maroc Telecom as if these transactions had occurred at the beginning of 2003. In addition, comparable basis takes into consideration a change in presentation adopted as of December 31, 2004: in order to standardize the accounting treatments of sales of services provided to customers on behalf of content providers (mainly toll numbers), following the consolidation of Telecom Développement, sales of services to customers, managed by SFR Cegetel and Maroc Telecom on behalf of content providers, previously presented on a gross basis in SFR and Telecom Développement’s revenues, are presented net of the related expenses. This change in presentation has no impact on operating income. At SFR Cegetel, it reduced revenues by€168 million in 2004. At Maroc Telecom, the impact was immaterial. |
(b) | Corresponds to VUP activities in Brazil (Atica & Scipione) deconsolidated since January 1, 2004, Internet operations abandoned since January 1, 2004, VTI, Vivendi Valorisation and other non-core businesses. |
(c) | VUE was deconsolidated as of May 11, 2004 as a result of the divestiture (from an accounting standpoint) of 80% of Vivendi Universal’s interest in this company. |
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(d) | Corresponds to Consumer Press Division sold in February 2003, which was deconsolidated as of January 1, 2003, and Comareg sold in May 2003. |
Year ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(In millions of euros) | ||||||||||||
France | € | 12,075 | € | 11,515 | € | 26,391 | ||||||
Rest of Europe | 2,749 | 4,359 | 15,092 | |||||||||
United States of America | 3,704 | 6,238 | 10,810 | |||||||||
Rest of world | 2,900 | 3,370 | 5,857 | |||||||||
Total | € | 21,428 | € | 25,482 | € | 58,150 | ||||||
Media |
Canal+ Group |
• | Pay-TV channel production in France, which includes the Canal+ premium channel and theme channels such as Sport+, i>Télé, CinéCinéma channels, Planète channels, Jimmy, Seasons, Comédie! and Cuisine TV; and | |
• | Pay-TV channel distribution terrestrially, via satellite, cable or ADSL, which includes CanalSatellite (renamed CanalSat in May 2005), CanalSatDSL, NC Numéricâble and Media Overseas. |
Pay-TV — France |
The Canal+ Premium Channel |
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Theme Channels |
Pay-TV Distribution |
CanalSatellite |
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NC Numéricâble |
Media Overseas |
ADSL TV |
Digital Terrestrial Television (DTT) |
Video On Demand (VOD) |
StudioCanal |
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Other Activities |
Cyfra+ (Poland) |
Paris Saint-Germain (PSG) |
Seasonality |
Competition |
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Regulatory Environment |
• | gained more flexibility in the scheduling and programming of movies on the Canal+ channel and other Canal+ related channels; | |
• | agreed to allocate 17% of its obligation to acquire French-language movies to films with a budget of€4 million or less as part of a more ambitious and diverse film acquisition policy; | |
• | renewed its financial commitment to support all film industry segments and will continue to allocate at least 9% (up to 12.5% in certain circumstances) of its revenues to the acquisition of French-language films, as part of its obligation to devote 12% of its revenues to the acquisition of European movies; and | |
• | agreed to continue to invest 80% of its French-language film obligation in films prior to the first day of filming. |
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Research and Development |
Raw Materials |
Property, Plant and Equipment |
• | The stability of the management team compared to UMG’s major competitors, which allowed UMG to have a consistent strategy to respond effectively to industry and social trends and challenges; |
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• | UMG’s size and strength in marketing and distribution, which builds on itself by attracting established artists; | |
• | UMG’s large catalog of prior hit releases that provide a stable and profitable revenue stream, accounting for approximately 30% of sales, without significant additional investment; | |
• | UMG’s diverse array of labels in the major markets and local representation across the globe complement each other through their focus on different genres, sub-genres and music segments, and thereby mitigate the effect of changes in consumer tastes; and | |
• | Multi-album and multi-year contracts, which secure long-term relationships with some of the most important artists and talent finders in the industry. |
Recorded Music |
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E-Commerce and Electronic Delivery |
• | growth of download offerings in the US; | |
• | expansion of download offerings in Europe; and | |
• | growth of mobile offerings in Europe, Asia and the US. |
Music Publishing |
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Seasonality |
Competition |
Regulatory Environment |
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Research and Development |
Raw Materials |
Property, Plant and Equipment |
Vivendi Universal Games |
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Seasonality |
Competition |
Piracy |
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Regulatory Environment |
Research and Development |
Raw Materials |
Property, Plant and Equipment |
Telecommunications |
SFR Cegetel Group |
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Mobile Telephony |
Network |
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Fixed Telephony, Data and Internet |
Seasonality |
Competition |
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Regulatory Environment |
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Research and Development |
Raw Materials |
Property, Plant and Equipment |
Maroc Telecom |
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Mobile Telephony |
Fixed-line Telephony, Data and Internet |
• | telephony services; | |
• | interconnection services with national and international operators; | |
• | data transmission services to professional markets and to Internet service providers, as well as to other telecoms operators; and | |
• | Internet services which include Internet access services and related services such as hosting. |
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Distribution |
• | the direct network, composed of 269 sales agencies; | |
• | the local indirect network, comprised of independent shops subject to exclusive agreements, which are managed by the closest Maroc Telecom commercial agency. A significant part of these resellers also have a phone shop; | |
• | an independent local network, primarily dedicated to mobile telephony, managed by GSM Al Maghrib, a company in which Maroc Telecom has held a 35% stake since July 2003; and | |
• | retailers with nationwide networks whose main business is not in telecommunications (supermarkets, newspaper and magazine retailers, tobacco shops or Moroccan post offices). |
Network |
Mauritel Group |
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Seasonality |
Competition |
Fixed-line Telephony |
Mobile |
Internet |
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Regulatory Environment |
Research and Development |
Raw Materials |
Property, Plant and Equipment |
Other |
NBC Universal |
• | the production of live and recorded television programs; | |
• | the production and distribution of motion pictures; |
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• | the operation, under licenses from the Federal Communications Commission (FCC), of television broadcasting stations; | |
• | the ownership of several cable/satellite networks around the world; | |
• | the operation of theme parks; and | |
• | investment and programming activities in multimedia and the Internet. |
Veolia Environnement |
Vivendi Telecom International (VTI) |
Elektrim Telekomunikacja |
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Publishing Operations |
Vivendi Universal Net (VU Net) |
2004 | 2003 | |||||||||||||||||||||||||||||||||||
Country of | Accounting | Voting | Ownership | Accounting | Voting | Ownership | ||||||||||||||||||||||||||||||
Incorporation | Method | Interest | Interest | Method | Interest | Interest | ||||||||||||||||||||||||||||||
direct | indirect | direct | indirect | |||||||||||||||||||||||||||||||||
Canal+ Group | ||||||||||||||||||||||||||||||||||||
Groupe Canal+ S.A. | France | C | 100% | 100% | C | 100% | 100% | |||||||||||||||||||||||||||||
Canal+ S.A.(a) | France | C | 49% | 49% | C | 49% | 49% | |||||||||||||||||||||||||||||
CanalSatellite S.A. | France | C | 66% | 66% | C | 66% | 66% | |||||||||||||||||||||||||||||
StudioCanal S.A. | France | C | 100% | 100% | C | 100% | 100% | |||||||||||||||||||||||||||||
MultiThématiques(b) | France | C | 70% | 70% | C | 64% | 64% | |||||||||||||||||||||||||||||
Universal Music Group | ||||||||||||||||||||||||||||||||||||
Universal Studios Holding I Corp. | USA | C | 92% | 92% | C | 92% | 92% | |||||||||||||||||||||||||||||
Universal International Music B.V. | Netherlands | C | 100% | 92% | C | 100% | 92% | |||||||||||||||||||||||||||||
Universal Music (UK) Holdings Ltd. | UK | C | 100% | 92% | C | 100% | 92% | |||||||||||||||||||||||||||||
Universal Entertainment GmbH | Germany | C | 100% | 92% | C | 100% | 92% | |||||||||||||||||||||||||||||
Universal Music K.K. | Japan | C | 100% | 92% | C | 100% | 92% | |||||||||||||||||||||||||||||
Universal Music France S.A.S. | France | C | 100% | 92% | C | 100% | 92% | |||||||||||||||||||||||||||||
Universal Music Group, Inc. | USA | C | 100% | 92% | C | 100% | 92% | |||||||||||||||||||||||||||||
UMG Recordings, Inc. | USA | C | 100% | 92% | C | 100% | 92% | |||||||||||||||||||||||||||||
Vivendi Universal Games | USA | C | 100% | 99% | C | 100% | 99% | |||||||||||||||||||||||||||||
SFR Cegetel Group | ||||||||||||||||||||||||||||||||||||
SFR(c) | France | C | 56% | 56% | C | 56% | 56% | |||||||||||||||||||||||||||||
Cegetel S.A.S.(d) | France | C | 65% | 36% | C | 65% | 36% | |||||||||||||||||||||||||||||
Maroc Telecom S.A.(e) | Morocco | C | 51% | 35% | C | 51% | 35% | |||||||||||||||||||||||||||||
Mauritel(f) | Mauritania | C | 51% | 14% | — | — | — | |||||||||||||||||||||||||||||
Vivendi Universal Entertainment/ NBC Universal | ||||||||||||||||||||||||||||||||||||
Universal Studios Holding I Corp. | USA | C | 92% | 92% | C | 92% | 92% | |||||||||||||||||||||||||||||
Vivendi Universal Entertainment LLLP(g) | USA | — | — | — | C | 93% | 86% | |||||||||||||||||||||||||||||
NBC Universal | USA | E | 20% | 18% | — | — | — |
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2004 | 2003 | |||||||||||||||||||||||||||||||||||
Country of | Accounting | Voting | Ownership | Accounting | Voting | Ownership | ||||||||||||||||||||||||||||||
Incorporation | Method | Interest | Interest | Method | Interest | Interest | ||||||||||||||||||||||||||||||
direct | indirect | direct | indirect | |||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||
Vivendi Telecom International S.A. | France | C | 100% | 100% | C | 100% | 100% | |||||||||||||||||||||||||||||
Kencell S.A.(g) | Kenya | — | — | — | C | 60% | 60% | |||||||||||||||||||||||||||||
Monaco Télécom S.A.M.(g) | Monaco | — | — | — | C | 55% | 55% | |||||||||||||||||||||||||||||
Elektrim Telekomunikacja(h) | Poland | E | 49% | 49% | E | 49% | 49% | |||||||||||||||||||||||||||||
Vivendi Universal Publishing S.A. | France | C | 100% | 100% | C | 100% | 100% | |||||||||||||||||||||||||||||
Atica & Scipione(g) | Brazil | — | — | — | C | 98% | 49% | |||||||||||||||||||||||||||||
Vivendi Universal Net(i) | France | — | — | — | C | 100% | 100% | |||||||||||||||||||||||||||||
UGC | France | E | 38% | 38% | E | 38% | 38% | |||||||||||||||||||||||||||||
Veolia Environnement S.A.(g) | France | — | — | — | E | 20% | 20% |
C: | Consolidated; E: Equity. |
(a) | Consolidated because Vivendi Universal (i) has majority control over the board of directors, (ii) no other shareholder or shareholder group is in a position to exercise substantive participating rights that would allow them to veto or block decisions taken by Vivendi Universal and (iii) it assumes the majority of risks and benefits pursuant to an agreement between Canal+ S.A. and Canal+ Distribution, a wholly owned subsidiary of Vivendi Universal. Under the terms of this agreement, Canal+ Distribution guarantees Canal+ S.A. results in return for exclusive commercial rights to the Canal+ S.A. subscriber base. |
(b) | In February 2005, Canal+ Group and Lagardère Group ended their participation in MultiThématiques (that is now owned 100% by Canal Group) and Lagardère Thématiques. |
(c) | SFR is owned 55.8% by Vivendi Universal, 43.9% by Vodafone, and 0.3% by individual shareholders. Under the terms of the shareholders’ agreement, Vivendi Universal has management control of SFR, majority control over the board of directors and appoints the chairman and CEO, majority control over the shareholders’ general meeting, and no other shareholder or shareholder group is in a position to exercise substantive participating rights that would allow them to veto or block decisions taken by Vivendi Universal. |
(d) | In December 2003, Cegetel S.A. and Telecom Développement (a network operator, and subsidiary of SNCF) were merged into a new entity named Cegetel S.A.S. The capital of this company is owned 65% by SFR and 35% by SNCF. In May 2005, Cegetel and Neuf Telecom announced their merger plan to form Neuf Cegetel, which will be 28% owned by SFR (corresponding to a 15.62% interest for Vivendi Universal through its 55.8% ownership in SFR) and equity-accounted. This transaction is subject to approval from personnel representatives of both Neuf Telecom and Cegetel and from competition and regulatory authorities. |
(e) | As of December 31, 2004, Vivendi Universal owned a 35% interest in Maroc Telecom, the Kingdom of Morocco holds 50.1% and the remaining 14.9% is held by private investors following an IPO which led to the simultaneous listing of Maroc Telecom shares on the Casablanca and Paris stock exchanges in December 2004. Vivendi Universal consolidates Maroc Telecom because under company by-laws and shareholders’ agreements, Vivendi Universal has majority control over its supervisory board and management board. Under shareholders’ agreements, Vivendi Universal appoints three of the five members of the management board, appoints the chairman of the management board, exercises 51% of all voting rights at shareholders’ general meetings, granting it, under the majority rules set forth in the company’s by-laws, control over the shareholders’ general meeting, as well as over the supervisory and management boards of Maroc Telecom. |
(f) | Maroc Telecom has a 51% voting interest and approximately 41% ownership interest in Mauritel SA, which was acquired in April 2001. This company, the incumbent telecommunications operator in Mauritania, operates both a fixed-line network and a mobile phone license through a wholly owned subsidiary. In connection with this acquisition, the Islamic Republic of Mauritania and Maroc |
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Telecom entered into a shareholders’ agreement which provided for, among others, the grant to the Mauritanian government of veto rights relating to significant transactions. Since these veto rights expired on June 30, 2004, Maroc Telecom is now able to exercise exclusive control over Mauritel. As a result, this subsidiary, accounted for using the equity method as of January 1, 2004, has been fully consolidated since July 1, 2004. | |
(g) | Participations sold in 2004. |
(h) | Please refer to “Item 18 — Financial Statements — Note 7.3.” |
(i) | Operations abandoned as of January 1, 2004. |
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Changes in Accounting Principles and Financial Statement Presentation |
New Accounting Standard and Change in Estimate |
New accounting policy: CRC Rule 04-03 issued on May 4, 2004 concerning the consolidation of Special Purpose Entities |
Real estate defeasance |
Ymer |
Qualified Technological Equipment (QTE) operations |
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New accounting policy: Notice n°2004-E issued on October 13, 2004 by the CNC Urgent Issues Taskforce |
Change in presentation of Telecom operation revenues |
Change in estimate at Universal Music Group |
Use of Estimates |
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Asset Impairment |
Valuation of long-term assets |
Goodwill and other intangible assets with indefinite lives |
Investments and receivables from equity affiliates |
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Revenue Recognition |
Film and Television Revenues and Costs |
Music Advances to Artists |
Pension Benefit Costs |
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Contingencies |
Provisions and Liabilities |
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Year Ended December 31, | |||||||||||||
2004 as | 2003 as | 2002 as | |||||||||||
Published(a) | Published | Published | |||||||||||
(In millions of euros, | |||||||||||||
except per share amounts) | |||||||||||||
Revenues | € | 21,428 | € | 25,482 | € | 58,150 | |||||||
Cost of revenues | (11,633 | ) | (15,268 | ) | (40,574 | ) | |||||||
Gross margin(%) | 46 | % | 40 | % | 30 | % | |||||||
Selling, general and administrative expenses | (6,201 | ) | (6,812 | ) | (12,937 | ) | |||||||
Other operating expenses, net | (118 | ) | (93 | ) | (851 | ) | |||||||
Operating income | 3,476 | 3,309 | 3,788 | ||||||||||
Financing expense | (455 | ) | (698 | ) | (1,333 | ) | |||||||
Other financial expenses, net of provisions | (247 | )(b) | (509 | ) | (3,409 | ) | |||||||
Financing and other expenses, net | (702 | ) | (1,207 | ) | (4,742 | ) | |||||||
Income (loss) before gain (loss) on businesses sold, net of provisions, income tax, equity affiliates, goodwill amortization and minority interests | 2,774 | 2,102 | (954 | ) | |||||||||
Gain (loss) on businesses sold, net of provisions | (140 | )(c) | 602 | 1,049 | |||||||||
Income tax | (400 | )(d) | 408 | (2,556 | ) | ||||||||
Income (loss) before equity affiliates, goodwill amortization and minority interests | 2,234 | 3,112 | (2,461 | ) | |||||||||
Equity in earnings of sold subsidiaries | — | 1 | 17 | ||||||||||
Income (loss) from equity affiliates | 219 | 71 | (294 | ) | |||||||||
Veolia Environnement impairment | — | (203 | ) | — | |||||||||
Goodwill amortization | (638 | ) | (1,120 | ) | (1,277 | ) | |||||||
Impairment losses | (31 | ) | (1,792 | ) | (18,442 | ) | |||||||
Income (loss) before minority interests | 1,784 | 69 | (22,457 | ) | |||||||||
Minority interests | (1,030 | ) | (1,212 | ) | (844 | ) | |||||||
Net income (loss) | € | 754 | € | (1,143 | ) | € | (23,301 | ) | |||||
Basic earnings per share | € | 0.70 | € | (1.07 | ) | € | (21.43 | ) | |||||
Diluted earnings per share | € | 0.63 | € | (1.07 | ) | € | (21.43 | ) | |||||
Weighted average common shares outstanding (in millions)(e) | 1,072.1 | 1,071.7 | 1,087.4 | ||||||||||
Potential dilutive effect of outstanding financial instruments (in millions) | 127.0 | (f) | 137.9 | 146.3 |
(a) | Given the deconsolidation of VUE as of May 11, 2004, the 2004 statement of income includes 132 days of business for this entity (please refer to “Item 18 — Financial Statements — Note 3.1”). | |
(b) | Includes High Yield Notes redemption costs (-€350 million). | |
(c) | Includes the after-tax loss on the divestiture of 80% of Vivendi Universal’s interest in VUE (-€1,793 million net of a -€2,105 million foreign currency translation adjustment — with no impact on cash position and shareholders’ equity, please refer to “Item 18 — Financial Statements — Note 3.1”, the capital gain on the divestiture of 15% of Vivendi Universal’s interest in VE (+€1,316 million), as well as the gain on the divestiture of other entities, net of provisions (+€337 million). | |
(d) | Following its admission to the French Consolidated Global Profit Tax System as of January 1, 2004, Vivendi Universal recognized a tax saving of€956 million. Please refer to “Item 4 — 2004 Developments — Consolidated Global Profit Tax System since January 1, 2004” and to “Item 18 — Financial Statements — Note 24”. | |
(e) | Excluding treasury shares recorded as a reduction in shareholders’ equity (2,441 shares as of December 31, 2004). | |
(f) | Financial instruments in the money as of December 31, 2004 represented approximately 104.8 million common shares. |
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+€167 million from improvement in operating income, despite VUE deconsolidation as of May 11, 2004 generating an unfavorable difference of€594 million; | |
+€243 million from reduction in financing expenses resulting from (i) VUE deconsolidation as of May 11, 2004, and (ii) the decrease in the average financial gross debt (€10.3 billion in 2004 compared to€16.4 billion in 2003); | |
+€262 million from improvement in other financial expenses, net of provisions (mainly due to an improvement in the foreign exchange result: net gain of€9 million compared to net loss of€228 million in 2003, the loss induced by the forgiveness ofSociété Financière de Distribution(SFD) debt of€200 million by SFR Cegetel in 2003 and the premium received on call options for VE shares for€173 million and despite the cost related to the redemption of the High Yield Notes for€307 million); | |
+€147 million from improvement in income from equity affiliates and equity in earnings of sold subsidiaries mainly as a consequence of the equity accounting of NBCU from May 12, 2004 (€172 million corresponding to 234 days); | |
+€2,446 million of reduction in goodwill amortization and impairment losses; and | |
+€182 million from lower minority interests: in 2003, SFR Cegetel’s result benefited from tax savings relating to the rationalization of its structure; |
- | €808 million from an increase in income tax expense due to the increase of earnings before tax, particularly at SFR Cegetel. The positive impact of the Consolidated Global Profit Tax System in 2004 (+€956 million) was offset by the impact of the rationalization of the SFR Cegetel structure recognized in 2003 (+€515 million before minority interests) and a reversal in 2003 of a reserve established in 2002 related to VUE (+€477 million); and | |
- | €742 million on capital losses, mainly due to the divestiture of 80% of Vivendi Universal’s interest in VUE, which was partially offset by the gain on the disposition of the 15% stake in VE. |
Revenues |
Cost of Revenues and Gross Margin |
(4) | For a definition of comparable basis, please refer to “— Revenues and operating income from operations by business segment on a comparable basis 2004 - 2003.” |
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Selling, General and Administrative Expenses |
Depreciation and Amortization |
Other Operating Expenses, Net |
Operating Income |
Financing Expense |
59
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Other Financial Expenses, Net of Provisions |
Gain (Loss) on Businesses Sold, Net of Provisions |
• | A capital loss of€1,793 million related to the divestiture of 80% of Vivendi Universal’s interests in VUE, completed on May 11, 2004 (please refer to “Item 18 — Financial Statements — Note 3.1”). This loss was comprised of: |
• | before-tax profit of $653 million, since the carrying value in dollars of disposed assets was less than their transaction value in dollars; | |
• | tax expense of $290 million, i.e., an after-tax profit of $363 million (€312 million); and | |
• | the reclassification to net income of the share of negative non-cash cumulative foreign currency translation adjustments relating to the divested assets, in the amount of€2,105 million. |
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• | The gain on the divestiture of 15% of Vivendi Universal’s interests in VE of€1,316 million (please refer to “Item 18 — Financial Statements — Note 3.2”). | |
• | The gain on the divestiture of other entities, net of provisions, of€337 million, which was mainly comprised of various liquidation bonuses (+€74 million), the impact of the divestiture of the “flux-divertissement” business of StudioExpand and Canal+ Benelux (+€66 million), UCI Cinemas (+€64 million), Sportfive (+€44 million), Kencell (+€38 million), Monaco Telecom (+€21 million) and Atica & Scipione (-€8 million), as well as a provision relating to the anticipated divestiture of NC Numéricâble (-€56 million) and the impact of the abandonment of Internet operations (+€34 million). |
Income Tax |
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Income from Equity Affiliates |
Goodwill Amortization |
Impairment Losses |
Minority Interests |
Earnings per share — Basic and Diluted |
Revenues |
Cost of Revenues |
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Table of Contents
Selling, General and Administrative Expenses |
Depreciation and Amortization |
Other Operating Expenses, Net |
Operating Income |
Financing Expense |
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Other Financial Expenses, Net of Provisions |
Gain on Businesses Sold, Net of Provisions |
Income Tax |
Income from Equity Affiliates |
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Goodwill Amortization |
Impairment Losses |
Minority Interests |
Earnings per Share — Basic and Diluted |
Year Ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(In millions, except per share | ||||||||||||
amount) | ||||||||||||
Revenues | € | 21,254 | € | 25,321 | € | 40,062 | ||||||
Operating income (loss)(a) | 3,266 | 940 | (18,633 | ) | ||||||||
Net income (loss) | 2,921 | (1,358 | ) | (43,857 | ) | |||||||
Net income (loss) per share — basic | € | 2.73 | € | (1.27 | ) | € | (40.35 | ) | ||||
Net income (loss) per share — diluted | € | 2.58 | € | (1.27 | ) | € | (40.35 | ) |
(a) | The reconciliation of the operating income as reported under French GAAP to the operating income (loss) under US GAAP is as follows: |
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Year Ended December 31, | ||||||||||||||
2004 | 2003 | 2002 | ||||||||||||
(In millions) | ||||||||||||||
Operating income — French GAAP | € | 3,476 | € | 3,309 | € | 3,788 | ||||||||
Adjustments to conform to US GAAP | ||||||||||||||
Impairment losses | (30 | ) | (2,301 | ) | (21,587 | ) | ||||||||
Real estate defeased properties | 21 | 44 | 182 | |||||||||||
Employee benefit plans | (21 | ) | (66 | ) | (69 | ) | ||||||||
Amortization of SFR market share | (147 | ) | (138 | ) | — | |||||||||
Other | (33 | ) | 92 | (947 | ) | |||||||||
Operating income (loss) — US GAAP | € | 3,266 | € | 940 | € | (18,633 | ) | |||||||
Operating Income |
Net Income (Loss) |
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Operating Income |
Net Loss |
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As Published | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2004 | 2003 | % Change | 2002 | ||||||||||||||
(In millions of euros) | |||||||||||||||||
Revenues | |||||||||||||||||
Canal+ Group | € | 3,580 | € | 4,158 | -14 | % | € | 4,833 | |||||||||
Universal Music Group | 4,993 | 4,974 | 0 | % | 6,276 | ||||||||||||
Vivendi Universal Games | 475 | 571 | -17 | % | 794 | ||||||||||||
Media | 9,048 | 9,703 | -7 | % | 11,903 | ||||||||||||
SFR Cegetel | 8,317 | 7,574 | 10 | % | 7,067 | ||||||||||||
Maroc Telecom | 1,627 | 1,471 | 11 | % | 1,487 | ||||||||||||
Telecom | 9,944 | 9,045 | 10 | % | 8,554 | ||||||||||||
Non core operations and elimination of intercompany transactions(a) | 109 | 584 | -81 | % | 813 | ||||||||||||
Total Vivendi Universal (Excluding VUE, VE and VUP assets sold in 2003) | € | 19,101 | € | 19,332 | -1 | % | € | 21,270 | |||||||||
Vivendi Universal Entertainment(b) | 2,327 | 6,022 | -61 | % | 6,270 | ||||||||||||
VUP assets sold in 2003(c) | — | 128 | na | * | 572 | ||||||||||||
Veolia Environnement | — | — | na | * | 30,038 | ||||||||||||
Total Vivendi Universal | € | 21,428 | € | 25,482 | -16 | % | € | 58,150 | |||||||||
Operating Income | |||||||||||||||||
Canal+ Group | € | 198 | € | 247 | -20 | % | € | (325 | ) | ||||||||
Universal Music Group | 338 | 70 | x5 | 556 | |||||||||||||
Vivendi Universal Games | (183 | ) | (201 | ) | 9 | % | 63 | ||||||||||
Media | 353 | 116 | x3 | 294 | |||||||||||||
SFR Cegetel | 2,257 | 1,919 | 18 | % | 1,449 | ||||||||||||
Maroc Telecom | 673 | 628 | 7 | % | 468 | ||||||||||||
Telecom | 2,930 | 2,547 | 15 | % | 1,917 | ||||||||||||
Holding & corporate | (220 | ) | (330 | ) | 33 | % | (665 | ) | |||||||||
Non core operations(a) | 76 | 39 | 95 | % | (471 | ) | |||||||||||
Total Vivendi Universal (Excluding VUE, VE and VUP assets sold in 2003) | € | 3,139 | € | 2,372 | 32 | % | 1,075 | ||||||||||
Vivendi Universal Entertainment(b) | 337 | 931 | -64 | % | 816 | ||||||||||||
VUP assets sold in 2003(c) | — | 6 | na | * | (14 | ) | |||||||||||
Veolia Environnement | — | — | na | * | 1,911 | ||||||||||||
Total Vivendi Universal | € | 3,476 | € | 3,309 | 5 | % | € | 3,788 | |||||||||
*na: | non applicable |
(a) | Corresponds to VUP activities in Brazil (Atica & Scipione) deconsolidated since January 1, 2004, Internet operations abandoned since January 1, 2004, VTI, Vivendi Valorisation and other non-core businesses. | |
(b) | VUE was deconsolidated as of May 11, 2004 as a result of the divestiture (from an accounting standpoint) of 80% of Vivendi Universal’s interest in this company. | |
(c) | Corresponds to Consumer Press Division sold in February 2003, which was deconsolidated as of January 1, 2003, and Comareg sold in May 2003. |
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Comparable Basis | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
% Change at | |||||||||||||||||
Constant | |||||||||||||||||
2004 | 2003 | % Change | Currency | ||||||||||||||
(In millions of euros) | |||||||||||||||||
Revenues | |||||||||||||||||
Canal+ Group | € | 3,470 | € | 3,339 | 4 | % | 4 | % | |||||||||
Universal Music Group | 4,993 | 4,974 | 0 | % | 5 | % | |||||||||||
Vivendi Universal Games | 475 | 571 | -17 | % | -11 | % | |||||||||||
Media | 8,938 | 8,884 | 1 | % | 3 | % | |||||||||||
SFR Cegetel | 8,317 | 7,537 | 10 | % | 10 | % | |||||||||||
Maroc Telecom | 1,658 | 1,523 | 9 | % | 11 | % | |||||||||||
Telecom | 9,975 | 9,060 | 10 | % | 10 | % | |||||||||||
Non core operations and elimination of intercompany transactions(a) | (20 | ) | 28 | na | * | na | * | ||||||||||
Total Vivendi Universal | € | 18,893 | € | 17,972 | 5 | % | 7 | % | |||||||||
Operating Income | |||||||||||||||||
Canal+ Group | € | 184 | € | 95 | 94 | % | 95 | % | |||||||||
Universal Music Group | 338 | 70 | x5 | x5 | |||||||||||||
Vivendi Universal Games | (183 | ) | (201 | ) | 9 | % | 0 | % | |||||||||
Media | 339 | (36 | ) | na | * | na | * | ||||||||||
SFR Cegetel | 2,257 | 1,971 | 15 | % | 15 | % | |||||||||||
Maroc Telecom | 682 | 642 | 6 | % | 8 | % | |||||||||||
Telecom | 2,939 | 2,613 | 12 | % | 13 | % | |||||||||||
Holding & corporate | (220 | ) | (330 | ) | 33 | % | 31 | % | |||||||||
Non core operations(a) | 59 | (31 | ) | na | * | na | * | ||||||||||
Total Vivendi Universal | € | 3,117 | € | 2,216 | 41 | % | 41 | % | |||||||||
(a) | Corresponds to VTI (excluding Vivendi Telecom Hungary, Kencell and Monaco Telecom), Vivendi Valorisation and other non-core businesses. |
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Year Ended December 31, | ||||||||||||||||||||||
Comparable | ||||||||||||||||||||||
As Published | Basis(a) | |||||||||||||||||||||
2004 | 2003 | % Change | 2002(b) | % Change | ||||||||||||||||||
(In millions of euros, except for margins) | ||||||||||||||||||||||
Revenues | ||||||||||||||||||||||
Pay-TV — France | € | 2,861 | € | 2,813 | 2 | % | € | 2,663 | 3 | % | ||||||||||||
Film — StudioCanal | 394 | 351 | 12 | % | 455 | 12 | % | |||||||||||||||
Other | 325 | 994 | -67 | % | 1,715 | 8 | % | |||||||||||||||
Total Canal+ Group | € | 3,580 | € | 4,158 | -14 | % | € | 4,833 | 4 | % | ||||||||||||
Operating income (loss) | € | 198 | € | 247 | -20 | % | € | (325 | ) | 94 | % | |||||||||||
Operating margin(%) | 6 | % | 6 | % | stable | na* | +2 points | |||||||||||||||
Subscriptions(in thousands)(c) | ||||||||||||||||||||||
Analog | 2,455 | 2,611 | -6 | % | 2,864 | |||||||||||||||||
Digital | 1,917 | 1,738 | 10 | % | 1,613 | |||||||||||||||||
Individual subscribers | 4,372 | 4,349 | 1 | % | 4,477 | |||||||||||||||||
Collective | 402 | 375 | 7 | % | 363 | |||||||||||||||||
Overseas | 181 | 183 | -1 | % | 178 | |||||||||||||||||
Total Canal+ (premium channel) | 4,955 | 4,907 | 1 | % | 5,018 | |||||||||||||||||
CanalSatellite | 2,989 | 2,751 | 9 | % | 2,520 | |||||||||||||||||
NC Numericâble | 436 | 423 | 3 | % | 407 | |||||||||||||||||
Total subscriptions in France | 8,380 | 8,081 | 4 | % | 7,945 |
(a) | Comparable basis essentially illustrates the effect of the divestitures at Canal+ Group (Telepiù, Canal+ Nordic, Canal+ Benelux, etc.) as if these transactions had occurred at the beginning of 2003. | |
(b) | Please note that to better reflect the performances of each separate business, Canal+ Group has reallocated dedicated operations and holding costs to each appropriate business line. These amounts were previously reported in “other”. As a consequence, breakdown of revenues and operating income by business differs from figures published in 2002. | |
(c) | Individual and collective subscriptions differ from 2002 published data, which included only individual subscriptions. |
2004 versus 2003 |
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Pay TV — France: |
Film — StudioCanal: |
Other: |
Pay-TV — France: |
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Film — StudioCanal: |
Other: |
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Year Ended December 31, | |||||||||||||||||
As published | |||||||||||||||||
2004 | 2003 | % Change | 2002 | ||||||||||||||
(In millions of euros, except for | |||||||||||||||||
margins) | |||||||||||||||||
Revenues | |||||||||||||||||
North America(a) | € | 1,985 | € | 1,895 | 5 | % | € | 2,670 | |||||||||
Europe(a) | 2,003 | 2,044 | -2 | % | 2,418 | ||||||||||||
Asia(a) | 455 | 516 | -12 | % | 563 | ||||||||||||
Rest of the World(a) | 216 | 193 | 12 | % | 263 | ||||||||||||
€ | 4,659 | € | 4,648 | 0 | % | € | 5,914 | ||||||||||
Publishing | 372 | 370 | 1 | % | 412 | ||||||||||||
Intersegment elimination | (38 | ) | (44 | ) | -14 | % | (50 | ) | |||||||||
Total UMG | € | 4,993 | € | 4,974 | 0 | % | € | 6,276 | |||||||||
Operating income | € | 338 | € | 70 | x5 | € | 556 | ||||||||||
Operating margin(%) | 7 | % | 1 | % | +6 points | 9 | % | ||||||||||
Market shares(b) | |||||||||||||||||
North America | 29.9 | % | 27.9 | % | 31.7 | % | |||||||||||
Europe | 26.7 | % | 25.6 | % | 27.1 | % | |||||||||||
Asia | 12.8 | % | 13.4 | % | 12.0 | % | |||||||||||
Rest of the World | na | * | na | * | na | * | |||||||||||
Total UMG | 24.7 | % | 23.5 | % | 25.4 | % | |||||||||||
Music market growth(b) | |||||||||||||||||
North America | 4.1 | % | -5.9 | % | -8.2 | % | |||||||||||
Europe | -5.1 | % | -8.5 | % | -4.1 | % | |||||||||||
Asia | -5.1 | % | -9.8 | % | -10.3 | % | |||||||||||
Rest of the World | na | * | na | * | na | * | |||||||||||
Total UMG | -0.8 | % | -7.6 | % | -7.2 | % |
Best selling titles | Artist | Units | Artist | Units | Artist | Units | ||||||||||||||||||
(Units sold, in millions) | ||||||||||||||||||||||||
Eminem | 9 | 50 Cent | 9 | Eminem | 14 | |||||||||||||||||||
U2 | 8 | t.A.T.u. | 4 | Shania Twain | 8 | |||||||||||||||||||
Shania Twain | 5 | Eminem | 3 | Nelly | 8 | |||||||||||||||||||
Guns N’Roses | 5 | Sheryl Crow | 3 | 8 Mile OST | 6 | |||||||||||||||||||
Black Eyed Peas | 4 | Toby Keith | 3 | U2 | 5 | |||||||||||||||||||
% of top 15 of total units sold | 13 | % | 10 | % | 14 | % |
* | na: not applicable |
(a) | In 2003, revenues by country included publishing revenues. In 2004, to better reflect the economic reality, revenues by country did not include publishing revenues, which are now presented on a separate line. As a result, 2002 and 2003 data differs from that published in 2003. |
(b) | Music market and market share data for 2004 are UMG estimates using the IFPI methodology. Music market and market share data for 2003 and 2002 are IFPI data. |
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2003 versus 2002 |
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As published | |||||||||||||||||||||
Year ended December 31, | |||||||||||||||||||||
2004 | 2003 | % change | 2002 | ||||||||||||||||||
(In millions of euros, except for margins) | |||||||||||||||||||||
Revenues | € 475 | € 571 | -17 | % | €794 | ||||||||||||||||
Operating income (loss) | (183 | ) | (201 | ) | 9 | % | 63 | ||||||||||||||
Operating margin(%) | na | * | na | * | na | * | 8 | % | |||||||||||||
% sales | |||||||||||||||||||||
PC | 46 | % | 38 | % | 59 | % | |||||||||||||||
Console | 48 | % | 62 | % | 40 | % | |||||||||||||||
Online and Other | 6 | % | — | 2 | % | ||||||||||||||||
Breakdown of revenues | |||||||||||||||||||||
North America | 56 | % | 55 | % | 63 | % | |||||||||||||||
Europe | 34 | % | 34 | % | 27 | % | |||||||||||||||
Asia Pacific and ROW | 10 | % | 11 | % | 10 | % |
Best selling titles | • Half-Life 2 | • Simpsons Hit and Run | • Warcraft III | |||
• Simpsons Hit and Run | • Hulk | • Fellowship of the Ring | ||||
• Crash Twinsanity | • Crash Nitro Kart | • Crash V | ||||
• World of Warcraft | • Warcraft III expansion pack | • The Thing | ||||
• Spyro: A Hero’s Tail | • Hobbit | • Spyro I |
* | na: not applicable |
2004 versus 2003 |
2003 versus 2002 |
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Year Ended December 31, | |||||||||||||||||||||
Comparable | |||||||||||||||||||||
As Published | basis(a) | ||||||||||||||||||||
2004 | 2003(b) | % change | 2002(b) | % of variation | |||||||||||||||||
(In millions of euros, except for margins) | |||||||||||||||||||||
Revenues | |||||||||||||||||||||
Network revenues | € | 6,850 | € | 6,338 | 8% | € | 5,800 | 10% | |||||||||||||
Equipment sales, net | 433 | 370 | 17% | 316 | 17% | ||||||||||||||||
Other (including connection fees and intercompany transactions) | (100 | ) | 41 | na* | 46 | na* | |||||||||||||||
Mobile | € | 7,183 | € | 6,749 | 6% | € | 6,162 | 10% | |||||||||||||
Fixed and Internet | 1,134 | 825 | 37% | 905 | 12% | ||||||||||||||||
Total SFR Cegetel | € | 8,317 | € | 7,574 | 10% | € | 7,067 | 10% | |||||||||||||
Operating Income | € | 2,257 | € | 1,919 | 18% | € | 1,449 | 15% | |||||||||||||
Operating margin(%) | 27% | 25% | +2 points | 21% | +1 point | ||||||||||||||||
MOBILE OPERATIONS(c) | |||||||||||||||||||||
Number of customers(end of period, in thousands) | |||||||||||||||||||||
Postpaid | 9,601 | 8,501 | 13% | 7,187 | |||||||||||||||||
Prepaid | 6,219 | 6,223 | 0% | 6,360 | |||||||||||||||||
Total number of customers(d) | 15,820 | 14,724 | 7% | 13,547 | |||||||||||||||||
Market share | 35.5% | 35.3% | +0.2 point | 35.1% | |||||||||||||||||
Annual rolling ARPU(in€/year)(e) | |||||||||||||||||||||
Postpaid | € | 603 | € | 635 | -5% | € | 674 | -4% | |||||||||||||
Prepaid | 183 | 176 | 4% | 162 | 5% | ||||||||||||||||
Total | € | 432 | € | 431 | 0% | € | 424 | 2% | |||||||||||||
Churn rate(in %/year) | |||||||||||||||||||||
Postpaid | 13% | 13% | +0 point | 21% | |||||||||||||||||
Prepaid | 36% | 36% | +0 point | 33% | |||||||||||||||||
Total | 24% | 24% | +0 point | 27% |
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Year Ended December 31, | |||||||||||||||||||||
Comparable | |||||||||||||||||||||
As Published | basis(a) | ||||||||||||||||||||
2004 | 2003(b) | % change | 2002(b) | % of variation | |||||||||||||||||
(In millions of euros, except for margins) | |||||||||||||||||||||
FIXED OPERATIONS | |||||||||||||||||||||
Breakdown of revenues (before SFR | |||||||||||||||||||||
Cegetel intercompany transactions) | |||||||||||||||||||||
Revenues(f) | 1,435 | 825 | 74% | 905 | 11% | ||||||||||||||||
Residential and professional(%) | 26% | 46% | ns* | 48% | -3 points | ||||||||||||||||
Corporate(%) | 27% | 54% | ns* | 52% | -3 points | ||||||||||||||||
Wholesale(%) | 47% | 0% | ns* | 0% | +6 points | ||||||||||||||||
Customers (end of period, in thousands) | |||||||||||||||||||||
Residential and professional(g) | 1,722 | 1,472 | 17% | 3,286 | |||||||||||||||||
DSL | 244 | ns* | ns* | ns* | |||||||||||||||||
Total DSL (incl. third parties) | 699 | ns* | ns* | ns* | |||||||||||||||||
DSL unbundled | 337 | ns* | ns* | ns* | |||||||||||||||||
Corporate Data sites | 28.0 | 20.3 | 38% | 12.4 | |||||||||||||||||
Backbone switched traffic (minutes, in billions) | 42 | 40 | 5% | 34 |
*na: | not applicable; ns: non significant |
(a) | Comparable basis illustrates the full consolidation of Telecom Développement as if the merger had occurred at the beginning of 2003. In addition, comparable basis takes into consideration a change in presentation adopted as of December 31, 2004. In order to standardize the accounting treatment of sales of services provided to customers on behalf of content providers (mainly toll numbers), following the consolidation of Telecom Développement, sales of services to customers managed by SFR Cegetel on behalf of content providers, previously presented in a gross basis in SFR and Telecom Développement’s revenues, are presented net of related expenses. This change in presentation had no impact on operating income. At SFR Cegetel, it resulted in a reduction in revenues by€168 million in 2004. | |
(b) | Please note that because of the merger of SFR and Cegetel Groupe S.A., and to better reflect the performances of each separate business, SFR Cegetel has reallocated holding and other revenues, which were previously reported in the “fixed and other” line renamed “fixed and internet”, to the “mobile” line. As a consequence, SFR Cegetel’s breakdown of results by business in 2002 and 2003 differs from figures published in 2003. | |
(c) | Including mainland France (SFR) and La Réunion (French overseas department) (SRR). | |
(d) | Source: ARCEP. | |
(e) | ARPU is defined as revenues net of promotions and net of third-party content provider revenues (including toll numbers related revenues) excluding roaming in and equipment sales divided by average ARCEP total customer base for the last twelve months. | |
(f) | In order to better reflect the economic reality of fixed operations, Cegetel revenues are presented before inter-company transactions, which increased in 2004 following Telecom Développement consolidation. | |
(g) | In order to better reflect the economic reality of fixed operations, this line now presents only residential and professional active voice customers. As a result, the number of residential and professional customers differs from data presented in 2003. |
2004 versus 2003 |
Mobile: |
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Fixed and Other: |
2003 versus 2002 |
(5) | Cegetel 2004 fourth quarter net increase in the number of direct broadband customers, according to market data disclosed by ARCEP on January 17, 2005. |
(6) | DSL lines include ADSL lines and, marginally, Turbo DSL lines. |
(7) | Cegetel number of DSL unbundled lines at the end of December 2004 according to market data disclosed by ARCEP on January 17, 2005. |
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Mobile: |
Fixed and Internet: |
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Year ended December 31, | |||||||||||||||||||||
Comparable | |||||||||||||||||||||
As published | basis(a) | ||||||||||||||||||||
% of | |||||||||||||||||||||
2004 | 2003 | % change | 2002 | variation | |||||||||||||||||
(In millions of euros, except for margins) | |||||||||||||||||||||
Revenues | |||||||||||||||||||||
Network revenues | 600 | 505 | 19 | % | 447 | 19 | % | ||||||||||||||
Equipment sales, net | 93 | 79 | 18 | % | 96 | 18 | % | ||||||||||||||
Other (including connection fees and intercompany transactions) | 208 | 192 | 8 | % | 203 | 8 | % | ||||||||||||||
Mauritel (mobile) | 20 | — | na* | — | 20 | % | |||||||||||||||
Mobile | 921 | 776 | 19 | % | 746 | 16 | % | ||||||||||||||
Voice revenues | 604 | 608 | -1 | % | 645 | -1 | % | ||||||||||||||
Data and Internet revenues | 73 | 70 | 4 | % | 60 | 4 | % | ||||||||||||||
Other (including connection fees, data, Internet and intercompany transactions) | 325 | 360 | -10 | % | 361 | -10 | % | ||||||||||||||
Mauritel (fixed) | 14 | — | na* | — | 7 | % | |||||||||||||||
Fixed and Internet | 1,016 | 1,038 | -2 | % | 1,066 | -3 | % | ||||||||||||||
Elimination of intercompany transactions | (310 | ) | (343 | ) | na* | (325 | ) | na* | |||||||||||||
Total Maroc Telecom | 1,627 | 1,471 | 11 | % | 1,487 | 9 | % | ||||||||||||||
Operating income | 673 | 628 | 7 | % | 468 | 6 | % | ||||||||||||||
Operating margin(%) | 41 | % | 43 | % | -2 points | 31 | % | -1 point | |||||||||||||
Mobile(b) | |||||||||||||||||||||
Number of customers (end of period, in thousands) | 6,361 | 5,214 | 22 | % | 4,598 | ||||||||||||||||
% of prepaid customers | 96 | % | 96 | % | stable | 96 | % | ||||||||||||||
Market share(c) | 68 | % | 71 | % | -3 points | 74 | % | ||||||||||||||
ARPU(in€/month)(d) | |||||||||||||||||||||
Postpaid | 72 | 76 | -5 | % | 81 | ||||||||||||||||
Prepaid | 9 | 9 | 0 | % | 10 | ||||||||||||||||
Total | 11 | 11 | 0 | % | 12 | ||||||||||||||||
Churn rate(in %/year) | |||||||||||||||||||||
Postpaid | 16 | % | 20 | % | na* | 22 | % | ||||||||||||||
Prepaid | 11 | % | 12 | % | na* | 12 | % | ||||||||||||||
Total | 12 | % | 12 | % | na* | 12 | % | ||||||||||||||
Fixed and Internet (in thousands)(b) | |||||||||||||||||||||
Number of lines(e) | |||||||||||||||||||||
Residential | 890 | 871 | 2 | % | 801 | ||||||||||||||||
Public phone(f) | 136 | 92 | 48 | % | 78 | ||||||||||||||||
Professional and corporate | 283 | 256 | 11 | % | 248 | ||||||||||||||||
Total | 1,309 | 1,219 | 7 | % | 1,127 | ||||||||||||||||
Number of Internet subscribers(g) | 105 | 47 | 123 | % | 34 |
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(a) | Comparable basis illustrates the full consolidation of Mauritel as if this transaction had occurred at the beginning of 2003. In addition, the comparable basis takes into consideration a change in presentation adopted as of December 31, 2004: in order to standardize the accounting treatment of sales of services provided to customers on behalf of content providers (mainly toll numbers), following the consolidation of Telecom Développement, sales of services to customers managed by Maroc Telecom on behalf of content providers, previously presented in a gross basis in SFR and Telecom Développement’s revenues, are presented net of related expenses. This change in presentation had no impact on operating income. At Maroc Telecom, the impact was immaterial. |
(b) | Maroc Telecom only |
(c) | Source: ANRT. |
(d) | Maroc Telecom ARPU is defined as revenues (from incoming and outgoing calls and data services), net of promotions, excluding roaming in and equipment sales, divided by average customer base over the period. |
(e) | Excluding Internet customers. |
(f) | “Téléboutique” lines and Maroc Telecom’s public phones. |
(g) | 2003 and 2002 data differs from data published in 2003 as it includes ADSL customers and leased lines. |
2004 versus 2003 |
Mobile: |
Fixed and Internet: |
2003 versus 2002 |
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2004 versus 2003 |
2003 versus 2002 |
As published | |||||||||||||
Year ended December 31, | |||||||||||||
2004 | 2003 | 2002 | |||||||||||
(In millions of euros) | |||||||||||||
Revenues | |||||||||||||
Vivendi Telecom International | € | 125 | € | 340 | € | 461 | |||||||
Internet | — | 79 | 174 | ||||||||||
Other businesses | (16 | ) | 165 | 178 | |||||||||
Non core operations and elimination of intercompany transactions | € | 109 | € | 584 | € | 813 | |||||||
Vivendi Universal Entertainment | 2,327 | 6,022 | 6,270 | ||||||||||
VUP assets sold in 2003 | — | 128 | 572 | ||||||||||
Veolia Environnement(a) | — | — | 30,038 | ||||||||||
Total Revenues | € | 2,436 | € | 6,734 | € | 37,693 | |||||||
Operating income | |||||||||||||
Non core operations | € | 76 | € | 39 | € | (471 | ) | ||||||
Vivendi Universal Entertainment | 337 | 931 | 816 | ||||||||||
VUP assets sold in 2003 | — | 6 | (14 | ) | |||||||||
Veolia Environnement(a) | — | — | 1,911 | ||||||||||
Total Operating Income | € | 413 | € | 976 | € | 2,242 | |||||||
(a) | VE’s published figures may differ from the figures presented in Vivendi Universal’s Consolidated Financial Statements, primarily due to the elimination of non-material inter-company transactions. Moreover, Vivendi Universal’s definition of operating income differs from VE’s definition of EBIT used in their December 31, 2002 accounts, which does not include restructuring charges of€56 million. |
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2004 versus 2003 |
2003 versus 2002 |
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Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||
2004 as | 2003 as | 2002 as | |||||||||||||||||||||||||||||||||||||||
Published | Published | Published | 2001(a) | 2000(a) | |||||||||||||||||||||||||||||||||||||
(In millions of euros) | |||||||||||||||||||||||||||||||||||||||||
Long-term debt(b) | € | 4,549 | 72% | € | 9,621 | 67% | € | 10,455 | 53% | € | 27,777 | 66% | € | 23,954 | 62% | ||||||||||||||||||||||||||
Bank overdrafts and other short-term borrowings(b) | 1,744 | 28% | 4,802 | 33% | 9,177 | 47% | 14,003 | 34% | 14,852 | 38% | |||||||||||||||||||||||||||||||
Financial gross debt | 6,293 | 100% | 14,423 | 100% | 19,632 | 100% | 41,780 | 100% | 38,806 | 100% | |||||||||||||||||||||||||||||||
Cash and cash equivalents(b) | (3,158 | ) | (2,858 | ) | (7,295 | ) | (4,725 | ) | (3,271 | ) | |||||||||||||||||||||||||||||||
Financial Net Debt | € | 3,135 | € | 11,565 | € | 12,337 | € | 37,055 | € | 35,535 | |||||||||||||||||||||||||||||||
(a) | Up to 2001, Vivendi Universal used a notion corresponding to Financial Net Debt less other marketable securities, short-term loan receivables, and net interest-bearing long-term loan receivables. | |
(b) | As presented in the Consolidated Statement of Financial Position. |
• | At the closing of the NBC-Universal transaction, on May 11, 2004, Vivendi Universal received approximately€3 billion (after minority interests and other) and deconsolidated, at that date, total gross financial debt of approximately€3.6 billion borne by VUE, including a $920 million loan |
(5) | Defined as Vivendi Universal’s net cash provided by operating activities and capital expenditures, net of proceeds excluding SFR Cegetel and Maroc Telecom plus dividends received from SFR Cegetel and Maroc Telecom. Please refer to the end of “— Liquidity Management and Capital Resources.” |
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• | At the same time, Vivendi Universal was able to repay the€1.8 billion drawn portion of the€3 billion multicurrency revolving credit facility, the€1 billion Tranche B of the€2.5 billion dual currency facility (the unused portion of both loans being cancelled) and the £136 million (€205 million) loan contracted by Universal Music Operations (UMO). In addition, a€2.7 billion multicurrency credit facility, signed on February 25, 2004, was set up on the basis of conditions more favorable than the previous revolving credit facilities. | |
• | On May 25, 2004, Vivendi Universal launched a tender offer to purchase€1 billion of High Yield Notes. On June 16, 2004, the size of this offer was increased to€2.4 billion (including premium and interests). As part of this offer, the holders of the Notes were also solicited to waive covenants attached to the Notes. On June 29, 2004, the offer terminated with a tender rate of 96.4% for the 9.50% and 9.25% High Yield Notes and a tender rate of 72.0% for the 6.25% High Yield Notes, for a total amount of approximately€2.0 billion, out of a total of€2.4 billion (i.e., 83% tendered). In addition, the covenants attached to the Notes were waived. The premium amount paid to the bondholders and the accrued interest amounted to€0.3 billion. | |
• | At the same time, Vivendi Universal was able to place€700 million floating rate notes issued with European institutional investors. These notes, issued on July 12, 2004, have a three-year maturity and a yield of three month EURIBOR + 60 basis points. | |
• | Following the success of this note issuance, the€2.7 billion multicurrency credit facility was reduced to€2.5 billion and its conditions were renegotiated on more favorable terms. As of December 31, 2004, this credit facility was undrawn and was used as a back-up for the treasury bills issued for€274 million. | |
• | In addition, SFR Cegetel set up, in May 2004, a securitization program for an aggregate amount of€405 million (drawn for€400 million as of December 31, 2004). Furthermore, in order to refinance certain of its existing indebtedness, a revolving credit facility was set up on July 15, 2004, with a five-year maturity for a total amount of€1.2 billion (drawn for€350 million as of December 31, 2004). | |
• | In December 2004, Vivendi Universal divested 15% of its 20.3% stake in VE. In total, Vivendi Universal received€1,497 million related to the overall transactions (please refer to “Item 4 — Divestiture of 15% of Veolia Environnement, Part of Vivendi Universal’s 20.3% Stake — December 2004”). |
Since December 31, 2004: |
• | To finance the purchase of 16% of Maroc Telecom on January 4, 2005, a MAD 6 billion (€537 million) facility was set up. The borrowing comprises two tranches: a MAD 2 billion tranche with a 2007 maturity and a MAD 4 billion tranche with a 2012 maturity. | |
• | On January 21, 2005, the remaining High Yield Notes were redeemed for a principal amount of approximately€400 million (corresponding to $107 million Notes issued in dollars and€316 million Notes issued in euros), following the sending of a formal Note of Redemption to all bondholders in December 2004. On completion of this transaction, none of the High Yield Notes issued by Vivendi Universal remained outstanding. The premium paid to the bondholders amounted to€41 million. | |
• | On February 15, 2005, Vivendi Universal issued€600 million of bonds maturing on February 15, 2012 with a 3.9% yield rate. The proceeds of this issue were used to repay, at no penalty, the $780 million note issued to NBCU on May 11, 2004, which was due to expire no later than May 2007. This new bond issue enabled Vivendi Universal S.A. to pay down the remainder of its secured debt, and extended the average maturity of the Vivendi Universal group’s debt at no extra cost (had the bond been issued on December 31, 2004, average maturity of the debt would have been 3.4 versus 3.0 years, as of December 31, 2004, excluding revolving bank credit). |
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• | On April 6, 2005, Vivendi Universal issued bonds of€630 million with a 3.755% yield rate, maturing in April 2010. These bonds enabled to extend the average maturity of the group’s debt and the early redemption of bonds convertible into Vinci shares, issued in March 2001 for a total consideration of€527 million and redeemable in March 2006. | |
• | On April 19, 2005, a MAD 6 million credit facility was set up by SPT from Altijari, a Moroccan bank. This facility was backed by a cash collateral deposit at VTI for the same amount. | |
• | On April 29, 2005, in order to benefit from good bank credits market conditions, Vivendi Universal issued a€2 billion syndicated loan, to refinance the€2.5 billion syndicated loan. With an initial tenure of 5 years (April 2010), the syndication has two one-year extensions to be exercised before the second anniversary. As at June 23, 2005, this facility was undrawn. |
• | the issuance of€1.2 billion High Yield Notes with a 7-year maturity concurrently with the implementation by Vivendi Universal of a€2.5 billion syndicated secured bank facility, which together enabled Vivendi Universal to reimburse and cancel several existing facilities, falling due in 2003 and 2004, for a total amount of€2.5 billion; | |
• | the refinancing of VUE’s $1.62 billion short-term bridge loan facility in the first half of 2003 by a $750 million securitization of VUE’s film rights with a 6-year maturity and a $920 million term loan with a 5-year maturity. These two operations produced not only a significant extension of the maturity of VUE’s debt but also allowed the upstream flow of cash from VUE to Vivendi Universal; | |
• | the issuance of€1.3 billion High Yield Notes in July 2003, which enabled Vivendi Universal to repay the balance outstanding on a€1.3 billion loan granted to a special purpose subsidiary in connection with the acquisition of a 26% interest in SFR Cegetel; following this refinancing, Vivendi Universal was able to take direct control of its participation in SFR Cegetel and, thus, fully benefit from the corresponding dividend stream; and | |
• | the strengthening by Vivendi Universal of its position in its bond financings by the decision in August 2003 of the holders, of the€527 million bonds due March 2006 exchangeable into Vinci shares to remove a put option that would have otherwise been exercisable in March 2004 and the issuance of€605 million bonds due October 2008 exchangeable for Sogecable shares. |
• | Dividends and other distributions (including payment of interest, repayments of loans, other returns on investment or other payments) from Vivendi Universal’s subsidiaries are restricted under certain agreements. Some of Vivendi Universal’s subsidiaries that are less than wholly owned are unable to pool their cash with Vivendi Universal and must pay a portion of any dividends to other shareholders. These subsidiaries include SFR Cegetel and Maroc Telecom. | |
• | Since January 1, 2004, SFR Cegetel has implemented the dividend distribution plan agreed to by its two main shareholders, which in particular involves the distribution of premiums and reserves and the introduction of quarterly interim dividend payments. | |
• | The ability of Vivendi Universal’s subsidiaries to make certain distributions may also be limited by financial assistance rules, corporate benefit laws and other legal restrictions which, if violated, might require the recipient to refund unlawful payments. |
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Rating agency | Rating date | Type of debt | Ratings | Outlook | ||||||||
Standard & Poor’s | June 1, 2004 | Long-term corporate Short-term corporate Senior unsecured debt | BBB- A-3 BBB- | } } } | Positive (November 23, 2004) | |||||||
Moody’s | October 22, 2004 | Long-term senior unsecured debt | Baa3 | Stable | ||||||||
Fitch Ratings | December 10, 2004 | Long-term senior unsecured debt | BBB | Stable |
Condensed Statement of Consolidated Cash Flows |
Year ended December 31, | ||||||||||||
2004 Actual | 2003 Actual | 2002 Actual | ||||||||||
(In millions of euros) | ||||||||||||
Net cash provided by operating activities | € | 4,798 | € | 3,886 | € | 4,670 | ||||||
Net cash provided by (used for) investing activities | 2,986 | (3,900 | ) | 405 | ||||||||
Net cash provided by (used for) financing activities | (7,517 | ) | (4,313 | ) | (3,792 | ) | ||||||
Foreign currency translation adjustment | 33 | (110 | ) | 1,287 | ||||||||
Change in cash and cash equivalents | �� | € | 300 | € | (4,437 | ) | € | 2,570 | ||||
Net Cash Provided by Operating Activities |
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Net Cash Provided by (used for) Investing and Financing Activities |
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Change in Financial Net Debt in 2004 |
Cash and | Impact on | |||||||||||||
cash | Financial | Financial Net | ||||||||||||
equivalents | Gross Debt | Debt | ||||||||||||
(In millions of euros) | ||||||||||||||
Financial Net Debt at December 31, 2003 | € | (2,858 | ) | € | 14,423 | € | 11,565 | |||||||
Net cash provided by operating activities(a) | (4,798 | ) | — | (4,798 | ) | |||||||||
Investing activities: | ||||||||||||||
Capital expenditures | 1,540 | — | 1,540 | |||||||||||
Proceeds from sales of property, plant, equipment and intangible assets | (239 | ) | — | (239 | ) | |||||||||
Purchases of investments | ||||||||||||||
VUE — exercise of the call option on Barry Diller’s stake (1.5%) (May) | 226 | — | 226 | |||||||||||
DreamWorks — purchase of the music rights catalog (January) | 64 | — | 64 | |||||||||||
DreamWorks — advance on film rights distribution agreement (January) | 30 | — | 30 | |||||||||||
Sportfive — exercise of his put option by Jean-Claude Darmon (March)(b) | 30 | — | 30 | |||||||||||
Other | 57 | (6 | ) | 51 | ||||||||||
407 | (6 | ) | 401 | |||||||||||
Sales of investments | ||||||||||||||
VUE (May)(c) | (2,312 | ) | (4,320 | ) | (6,632 | ) | ||||||||
15% of Veolia Environnement (December) | (1,497 | ) | — | (1,497 | ) | |||||||||
Sportfive (March)(b) | (274 | ) | — | (274 | ) | |||||||||
Kencell (May)(d) | (190 | ) | — | (190 | ) | |||||||||
Monaco Telecom (June)(e) | (169 | ) | — | (169 | ) | |||||||||
Atica & Scipione (February) | (31 | ) | (10 | ) | (41 | ) | ||||||||
“Flux-divertissement” business of StudioExpand and Canal+ Benelux (June/August)(f) | (49 | ) | 7 | (42 | ) | |||||||||
VIVA Media (August) | (47 | ) | — | (47 | ) | |||||||||
Cèdre and Egée towers (June) | (84 | ) | — | (84 | ) | |||||||||
UCI Cinemas (October)(g) | (170 | ) | — | (170 | ) | |||||||||
Other(h) | 118 | (46 | ) | 72 | ||||||||||
(4,705 | ) | (4,369 | ) | (9,074 | ) | |||||||||
Net (decrease) increase in financial receivables | (13 | ) | — | (13 | ) | |||||||||
Purchase (sales) of marketable securities | 24 | — | 24 | |||||||||||
Net cash (provided by) used for investing activities | ��� | (2,986 | ) | € | (4,375 | ) | € | (7,361 | ) | |||||
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Cash and | Impact on | |||||||||||||
cash | Financial | Financial Net | ||||||||||||
equivalents | Gross Debt | Debt | ||||||||||||
(In millions of euros) | ||||||||||||||
Financing activities: | ||||||||||||||
Proceeds from issuance of borrowings and other long-term debt | ||||||||||||||
VUE — term loan set up to purchase US Treasury Bonds (May)(c) | € | (695 | ) | € | 695 | € | — | |||||||
VUE — purchase of US Treasury Bonds (May)(c) | 695 | — | 695 | |||||||||||
SFR Cegetel —€1.2 billion revolving credit facility (July) | (350 | ) | 350 | — | ||||||||||
€700 million floating notes (July) | (700 | ) | 700 | — | ||||||||||
Other | (7 | ) | 7 | — | ||||||||||
(1,057 | ) | 1,752 | 695 | |||||||||||
Principal payment on borrowings and other long-term liabilities | ||||||||||||||
Proceeds | ||||||||||||||
Loan contracted by UMO (£136 million) (May) | 205 | (205 | ) | — | ||||||||||
High Yield Notes (June)(i) | 2,000 | (2,000 | ) | — | ||||||||||
€2.5 billion dual currency facility (May) | 1,000 | (1,000 | ) | — | ||||||||||
Other | 236 | (236 | ) | — | ||||||||||
Other financing arrangements | ||||||||||||||
Vivendi Universal — Promissory note to USI (NBC Universal subsidiary) (May)(c) | — | 658 | 658 | |||||||||||
Consolidation of Special Purpose Vehicles used for the defeasance of real estate (January)(j) | 7 | 326 | 333 | |||||||||||
3,448 | (2,457 | ) | 991 | |||||||||||
Net decrease (increase) in short-term borrowings and other | ||||||||||||||
Bank overdrafts and other short-term borrowings and other SFR Cegetel — securitization program | (487 | ) | 487 | — | ||||||||||
SFR Cegetel — treasury bills | (218 | ) | 218 | — | ||||||||||
Vivendi Universal — Treasury bills | (274 | ) | 274 | — | ||||||||||
Vivendi Universal —€3 billion multicurrency revolving credit facility | 1,000 | (1,000 | ) | — | ||||||||||
Vivendi Universal convertible 1.25% (OCEANE) (January) | 1,699 | (1,699 | ) | — | ||||||||||
SFR Cegetel —€600 million bonds (July) | 600 | (600 | ) | — | ||||||||||
Other | 817 | (817 | ) | — | ||||||||||
Other financing activities | 157 | (96 | ) | 61 | ||||||||||
3,294 | (3,233 | ) | 61 | |||||||||||
Net proceeds from issuance of common shares | (18 | ) | — | (18 | ) | |||||||||
Cash dividends paid by consolidated companies to their minorities shareholders | ||||||||||||||
SFR Cegetel(k) | 1,470 | — | 1,470 | |||||||||||
Maroc Telecom S.A.(l) | 303 | — | 303 | |||||||||||
Other subsidiaries | 77 | — | 77 | |||||||||||
1,850 | — | 1,850 | ||||||||||||
Net cash (provided by) used for financing activities | € | 7,517 | € | (3,938 | ) | € | 3,579 | |||||||
Foreign currency translation adjustment | (33 | ) | 183 | 150 | ||||||||||
Change in Financial Net Debt during 2004 | € | (300 | ) | € | (8,130 | ) | € | (8,430 | ) | |||||
Financial Net Debt at December 31, 2004 | € | (3,158 | ) | € | 6,293 | € | 3,135 | |||||||
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(a) | Net cash provided by operating activities includes, among other things, dividends that have no impact on net income. Such dividends include, among other things, dividends received from NBCU: a€224 million dividend received in June 2004 corresponding to 20% (before Universal Studios Holding Corp. minority interests) of the cash generated by NBC and VUE from October 1, 2003 to May 11, 2004, as well as dividends of€78 million and€55 million received in September 2004 and December 2004, respectively. |
(b) | The net impact of the divestiture of Sportfive on Financial Net Debt amounts to€229 million, net of the preliminary acquisition of Sportfive shares held by Jean-Claude Darmon (€30 million) and after the payment, by Canal+ Group, of€15 million to conclude an historical litigation with Sportfive relating to vendor warranties. Please refer to “Item 4 – Information on the Company — 2004 Developments.” |
(c) | In May 2004, Vivendi Universal divested (from an accounting standpoint) 80% of VUE to which an enterprise value of approximately€10.2 billion was attributed by the transaction with GE, corresponding to the related reduction in Financial Net Debt (€5.3 billion) and to the value of the 20% stake received in NBC (€4.9 billion). For a detailed analysis of the NBC-Universal transaction’s impacts on Financial Net Debt, please refer to “— Liquidity and Capital Resources — Detailed analysis of the NBC-Universal transaction’s impact on the change in Financial Net Debt.” |
(d) | The net impact of Kencell’s divestiture on Financial Net Debt amounts to€178 million, after deconsolidation of the cash and divestiture fees presented in “other” (please refer to (h) below). |
(e) | The net impact of Monaco Telecom’s divestiture on Financial Net Debt amounts to€74 million, after deconsolidation of the€68 million cash held by this company and divestiture fees presented in “others” (please refer to (h) below). |
(f) | Includes€23 million of price adjustment on Canal Benelux divestiture. Furthermore, the net impact of the divestiture of StudioExpand’s“flux divertissement” business and Canal+ Benelux on Financial Net Debt amounts to€16 million, after deconsolidation of the cash held by Canal+ Benelux, the cash payment made as part of a litigation and divestiture fees, presented in “other” (please refer to (h) below). |
(g) | The net impact of UCI Cinemas divestiture on Financial Net Debt amounts to€158 million, after taking into account the cash held by this company and distributed to shareholders by the buyer and divestiture fees presented in “other” (please refer to (h) below). |
(h) | These amounts include inter-company loan redemptions, divestiture fees, the cash outflow of Monaco Telecom, Kencell and Canal+ Benelux, the compensation pursuant to the settlement and release agreement of $19.5 million paid in respect of the Houghton Mifflin purchase price adjustment (please refer to “Item 18 — Financial Statements — Note 28”) as well as the impact of other divestitures. |
(i) | Vivendi Universal has also paid a premium to bondholders (€259 million) and accrued interest for a total amount of€307 million, corresponding to a total cash outflow of€2.3 billion. |
(j) | As a result of the application of CRC Rule 04-03 issued on May 4, 2004, Vivendi Universal has fully consolidated Special Purpose Entities used for the defeasance of certain real estate assets since January 1, 2004. Please refer to “Item 18 — Financial Statements — Note 1.” |
(k) | In January 2004, SFR Cegetel paid an exceptional dividend of€899 million out of which€398 million was paid to minority shareholders. In addition, it paid a 2003 total dividend of€1,258 million (including€556 million to minority shareholders) and a 2004 interim dividend of€1,167 million (including€516 million to minority shareholders). |
(l) | In 2004, the total amount of dividends paid by Maroc Telecom was€465 million. |
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Detailed analysis of the NBC-Universal transaction’s impact on the change in Financial Net Debt |
Net impact | |||||||||||||
Cash and cash | Financial | on Financial | |||||||||||
equivalents | Gross Debt | Net Debt | |||||||||||
(In millions of euros) | |||||||||||||
Divestiture of 80% of VUE | |||||||||||||
Net cash proceeds | € | (2,926 | ) | € | — | € | (2,926 | ) | |||||
Gross cash proceeds | (3,073 | ) | — | (3,073 | ) | ||||||||
Transaction fees and others | 107 | — | 107 | ||||||||||
MEI proceeds | 40 | — | 40 | ||||||||||
Deconsolidation of VUE’s debt | — | (4,320 | ) | (4,320 | ) | ||||||||
$920 million loan agreement | — | (776 | ) | (776 | ) | ||||||||
Securitization program | — | (630 | ) | (630 | ) | ||||||||
VUE class A preferred interests | — | (701 | ) | (701 | ) | ||||||||
VUE class B preferred interests | — | (1,518 | ) | (1,518 | ) | ||||||||
Term loan set up to purchase US Treasury Bonds(a) | — | (695 | ) | (695 | ) | ||||||||
Cash closing adjustment as of May 11, 2004(b) | 614 | — | 614 | ||||||||||
Net cash (provided by) used for investing activities | € | (2,312 | ) | € | (4,320 | ) | € | (6,632 | ) | ||||
VUE — Term loan set up to purchase US Treasury Bonds | (695 | ) | 695 | — | |||||||||
VUE — Purchase of US Treasury Bonds(a) | 695 | — | 695 | ||||||||||
Vivendi Universal — Promissory note to USI(a) | — | 658 | 658 | ||||||||||
Net cash (provided by) used for financing activities | € | — | € | 1,353 | € | 1,353 | |||||||
Foreign currency translation adjustment | — | (17 | ) | (17 | ) | ||||||||
Total impact on Financial Net Debt | € | (2,312 | ) | € | (2,984 | ) | € | (5,296 | ) | ||||
(a) | After the defeasance of covenants of the VUE Class A preferred interests immediately prior to the closing of the NBC-Universal transaction, VUE purchased US Treasury Bonds for€695 million financed by a term loan. The amount of these securities will at least equal the VUE Class A preferred interest amount (including interest) at maturity in 2022; i.e., approximately $1,990 million. In accordance with the terms of the transaction, Vivendi Universal then issued a promissory note to USI, a subsidiary of NBCU, for $780 million to reimburse 94.56% of the cost of this defeasance. Please refer to “Item 4 — Subsequent Developments in 2005 — Purchase of IAC’s Equity Interests in VUE” for information on the restructuring of VUE in June 2005. | |
(b) | The Business Combination Agreement between Vivendi Universal, GE and NBC contained specific provisions related to the settlement of the inter-company loan between VUE and Vivendi Universal between October 1, 2003 and May 11, 2004, the completion date of the NBC-Universal transaction. As of September 30, 2003, the balance on the inter-company loan was $562 million. Since that date, Vivendi Universal has received the full amount of the cash flow generated by VUE through this inter-company loan ($728 million (€614 million) which was reimbursed to VUE as of May 11, 2004). In June, Vivendi Universal received a dividend of€224 million corresponding to 20% (before Universal Studios Holding Corp. minority interests) of the cash generated by NBC and VUE between October 1, 2003 and May 11, 2004. Since May 12, 2004, Vivendi Universal has access to the cash flows generated by NBCU, up to its stake held in the company, through a loan undrawn as at June 23, 2005. |
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Change in Financial Net Debt during 2003 |
Cash and | Impact on | |||||||||||||
cash | Financial | Financial | ||||||||||||
equivalents | Gross Debt | Net Debt | ||||||||||||
(In millions of euros) | ||||||||||||||
Financial Net Debt at December 31, 2002 | € | (7,295 | ) | € | 19,632 | € | 12,337 | |||||||
Net cash provided by operating activities | € | (3,886 | ) | — | € | (3,886 | ) | |||||||
Investing activities: | ||||||||||||||
Capital expenditures | 1,552 | — | 1,552 | |||||||||||
Proceeds from sale of property, plant and equipment and intangible assets(a) | (477 | ) | — | (477 | ) | |||||||||
Purchases of investments | ||||||||||||||
Additional 26% interest acquired in Cegetel Groupe S.A. (January) | 4,011 | — | 4,011 | |||||||||||
Closing of contractual guarantees to former Rondor shareholders (March) | 207 | — | 207 | |||||||||||
Telecom Développement (December 2003) | 56 | 162 | 218 | |||||||||||
Other | 148 | (24 | ) | 124 | ||||||||||
4,422 | 138 | 4,560 | ||||||||||||
Sales of investments | ||||||||||||||
InterActiveCorp warrants (February/June) | (600 | ) | — | (600 | ) | |||||||||
Telepiù (April) | (457 | ) | (374 | ) | (831 | ) | ||||||||
Consumer Press division (February) | (200 | ) | — | (200 | ) | |||||||||
Canal+ Technologies (January) | (191 | ) | — | (191 | ) | |||||||||
Comareg (May) | (135 | ) | — | (135 | ) | |||||||||
Canal+ Nordic (October)(b) | (48 | ) | — | (48 | ) | |||||||||
Interest in Vodafone Egypt (May) | (43 | ) | — | (43 | ) | |||||||||
Interest in Sithe International (June)(c) | (40 | ) | — | (40 | ) | |||||||||
Fixed line telecommunication in Hungary (May)(d) | (10 | ) | (305 | ) | (315 | ) | ||||||||
Other(e) | 316 | (239 | ) | 77 | ||||||||||
(1,408 | ) | (918 | ) | (2,326 | ) | |||||||||
Net (decrease) increase in financial receivables | (140 | ) | — | (140 | ) | |||||||||
Purchases (sales) of marketable securities | (49 | ) | — | (49 | ) | |||||||||
Net cash (provided by) used for investing activities | € | 3,900 | € | (780 | ) | € | 3,120 | |||||||
Financing activities: | ||||||||||||||
Proceeds from issuance of borrowings and other long-term debt | ||||||||||||||
Senior notes (2010) (April) | (1,183 | ) | 1,183 | — | ||||||||||
Senior notes (2008) (July) | (1,353 | ) | 1,353 | — | ||||||||||
€2.5 billion dual currency facility (May) | (1,000 | ) | 1,000 | — | ||||||||||
VUE — $920 million loan agreement (June)(f) | (800 | ) | 800 | — | ||||||||||
VUE securitization program (March)(f) | (704 | ) | 704 | — | ||||||||||
Sogecable exchangeable (October) | (605 | ) | 605 | — | ||||||||||
Other | (12 | ) | 12 | — | ||||||||||
(5,657 | ) | 5,657 | — | |||||||||||
Principal payment on borrowings and other long-term liabilities | ||||||||||||||
Cash settlement of Veolia Environnement exchangeable notes (March)(g) | 1,781 | (1,781 | ) | — | ||||||||||
Other | 166 | (166 | ) | — | ||||||||||
1,947 | (1,947 | ) | — |
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Cash and | Impact on | |||||||||||||
cash | Financial | Financial | ||||||||||||
equivalents | Gross Debt | Net Debt | ||||||||||||
(In millions of euros) | ||||||||||||||
Net decrease (increase) in short-term borrowings and other | ||||||||||||||
SIT —€1.3 billion acquisition facility (July) | (1,300 | ) | 1,300 | — | ||||||||||
€3 billion multicurrency revolving credit facility | (1,000 | ) | 1,000 | — | ||||||||||
€3 billion multicurrency revolving credit facility | 3,000 | (3,000 | ) | — | ||||||||||
VUE — $1.62 billion loan (June)(f) | 1,456 | (1,456 | ) | — | ||||||||||
BSkyB exchangeable 1% (July)(h) | 1,440 | (1,440 | ) | — | ||||||||||
SIT —€1.3 billion acquisition facility (January 2003) | 1,300 | (1,300 | ) | — | ||||||||||
Other(i) | 2,363 | (2,195 | ) | 168 | ||||||||||
7,259 | (7,091 | ) | 168 | |||||||||||
Net proceeds from issuance of common shares | (71 | ) | — | (71 | ) | |||||||||
Sales (purchases) of treasury shares(j) | 98 | — | 98 | |||||||||||
Cash dividends paid by consolidated companies to their minorities shareholders | 737 | — | 737 | |||||||||||
Net cash (provided by) used for financing activities | € | 4,313 | € | (3,381 | ) | € | 932 | |||||||
Foreign currency translation adjustment | 110 | (1,048 | ) | (938 | ) | |||||||||
Change in Financial Net Debt during 2003 | € | 4,437 | € | (5,209 | ) | € | (772 | ) | ||||||
Financial Net Debt at December 31, 2003 | € | (2,858 | ) | € | 14,423 | € | 11,565 | |||||||
(a) | Including the sale of “10 Universal City Plaza” to a group of US investors. The asset is a 35-story tower block located in Los Angeles, California, and Universal Studios will continue to rent the building. | |
(b) | Excluding the residual amount of€7 million received during the first quarter 2004, excluding the inter-company account. | |
(c) | In June 2003, Vivendi Universal sold its interest in Sithe International (operations in Asia Pacific) to the Japanese group Marubeni for $47 million. | |
(d) | Excluding the€10 million promissory note received by Vivendi Universal in August 2004. | |
(e) | Including the negative impact of the cash flow generated by sold entities until the closing of transactions (Telepiù in 2003 for the amount of€193 million), when surrendered to the purchasers in accordance with the terms and conditions of the share purchase agreement. However, this allocation has no impact on net debt. Certain divestitures also include inter-company redemption. | |
(f) | The proceeds from the VUE securitization program and the $920 million loan agreement have been used to repay the $1.62 billion loan dated November 25, 2002 that matured on June 30, 2003. | |
(g) | In February 2001, Vivendi Universal issued 32,352,941 bonds exchangeable, at any time after April 17, 2001, for shares in VE (interest 2%; yield to maturity 3.75%; expiring March 2006; nominal value€55.90, or 30% above the average weighted price of VE shares the previous day). Following the exercise of the put by investors in March 2003, Vivendi Universal reimbursed 31,858,618 of VE exchangeable bonds at a total cost of€1.8 billion. | |
(h) | In July 2000, Vivendi issued 59,455,000 bonds exchangeable for BSkyB shares or redeemable in cash, at a unit par value of€24.22. These bonds earned interest at 1% and matured on July 5, 2003. The conversion rate was one BSkyB share (with a par value of 50 pence) for one Vivendi Universal bond. On July 5, 2003, all outstanding bonds were redeemed at a unit price of€24.87. | |
(i) | Including the reimbursement of revolving credit facilities of€850 million, the Société Générale€215 million and€275 million revolving credit facilities and a CDC IXIS€200 million revolving credit facility. | |
(j) | Including the€104 million impact of put options on treasury shares. |
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Financial Net Debt: Reconciliation to US GAAP |
December 31, 2004 | ||||||||||||||||||||||
Bank overdrafts | ||||||||||||||||||||||
and other | Cash and | Total | ||||||||||||||||||||
Long-term | short term | Financial | cash | financial | ||||||||||||||||||
debt | borrowings | gross debt | equivalents | net debt | ||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||
Financial Net Debt — French GAAP | €4,549 | €1,744 | €6,293 | €(3,158 | ) | €3,135 | ||||||||||||||||
Adjustments to conform to US GAAP | ||||||||||||||||||||||
Forward contract related to the acquisition of 16% of Maroc Telecom(a) | — | 1,100 | 1,100 | — | 1,100 | |||||||||||||||||
Real estate defeased properties(b) | 240 | — | 240 | — | 240 | |||||||||||||||||
Other | (20 | ) | 389 | 369 | — | 369 | ||||||||||||||||
Financial Net Debt — US GAAP | €4,769 | €3,233 | €8,002 | €(3,158 | ) | €4,844 | ||||||||||||||||
(a) | Following the share purchase agreement (in the form of a firm commitment to purchase from the Kingdom of Morocco 16% of the share capital of Maroc Telecom) signed in November 2004, a financial liability was recognized for an amount of€1,100 million against minority interests in the US GAAP consolidated statement of financial position. The transaction was executed on January 4, 2005. Please refer to “Item 18 — Financial Statements — Note 30.” | |
(b) | In compliance with CRC Rule 04-03 dated May 4, 2004, Vivendi Universal fully consolidates as of January 1, 2004, certain Special Purpose Entities used for the defeasance of some real estate assets. Please refer to Item 18 — Financial Statements — Note 32.7 “Summary of significant differences between accounting policies adopted by Vivendi Universal and US GAAP.” |
December 31, 2003 | ||||||||||||||||||||||
Bank overdrafts | ||||||||||||||||||||||
and other | Cash and | Total | ||||||||||||||||||||
Long-term | short term | Financial | cash | financial | ||||||||||||||||||
debt | borrowings | gross debt | equivalents | net debt | ||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||
Financial Net Debt — French GAAP | €9,621 | €4,802 | €14,423 | €(2,858 | ) | €11,565 | ||||||||||||||||
Adjustments to conform to US GAAP | ||||||||||||||||||||||
Impact of VUE classification as an “asset held for sale”(c) | (3,438 | ) | — | (3,438 | ) | 124 | (3,314 | ) | ||||||||||||||
Real estate defeased properties | 848 | — | 848 | — | 848 | |||||||||||||||||
Other | — | 336 | 336 | — | 336 | |||||||||||||||||
Financial Net Debt — US GAAP | €7,031 | €5,138 | €12,169 | €(2,734 | ) | €9,435 | ||||||||||||||||
(c) | Please refer to “Item 18 — Financial Statements — Note 3.1” and “Item 4 — Subsequent Developments in 2005 — Purchase of IAC’s Equity Interests in VUE”. Under the terms of the NBC-Universal transaction, Vivendi Universal paid the cost of the required defeasance of certain covenants of the VUE Class A preferred interests and was also responsible for the net cost of the dividends on the VUE Class B preferred interests. |
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• | a€1.2 billion 5-year credit line was set up by SFR in July 2004. |
— | a maximum ratio of Financial Net Debt to EBITDA: 3.5 to 1, | |
— | a minimum ratio of Operating Income to Net Financing costs (financing expense): 3 to 1. |
• | two securitization programs for a total net amount of€405 million were set up on May 11, 2004 for a 5-year period. They carry early repayment provisions if the delinquency rate is higher than a certain percentage, in the event of a change in control of SFR, and in the case of customary events of default. In addition, the granting of these borrowings is subject to the satisfaction of some conditions precedent, including a borrowing ratio (Net financial debt/EBITDA) which must be lower than 3.5 at the end of each half year. |
• | maximum ratio of Financial Net Debt to proportionate EBITDA: 2.8 to 1 from December 31, 2004, | |
• | minimum ratio of proportionate EBITDA to Net Financing Costs (financing expense): 4.5 to 1 from March 31, 2005. |
• | review of minutes of meetings of shareholders, directors, committees of the board, and management committees for matters such as contracts, litigation, and authorization of fixed asset acquisitions or divestitures; | |
• | review with banks of items such as guarantees and endorsements; | |
• | review with internal and/or external legal counsel of pending litigation, claims (in dispute) and environmental matters as well as related assessments for unrecorded contingencies; | |
• | review of tax examiner’s reports, notices of assessments and income tax analyses for additional prior year amounts; | |
• | review with risk management, insurance agents and brokers of coverage for unrecorded contingencies; | |
• | review of related party transactions for guarantees and other commitments; and | |
• | review of all contracts and agreements. |
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Total as of | |||||||||||||||||||||||||||||
Recorded as liabilities in | Total as of | Payments due in | December 31, | ||||||||||||||||||||||||||
the Consolidated Statement of | December 31, | ||||||||||||||||||||||||||||
Financial Position | 2004 | 2005 | 2006-2007 | 2008-2009 | After 2009 | 2003 | 2002 | ||||||||||||||||||||||
(In millions of euros) | |||||||||||||||||||||||||||||
Long-term debt | 4,549 | € | — | € | 2,302 | € | 1,791 | € | 456 | € | 9,621 | € | 10,455 | ||||||||||||||||
including capital leases | 440 | — | 8 | 84 | 348 | 196 | 274 | ||||||||||||||||||||||
Bank overdrafts and other short-term borrowings | 1,744 | 1,744 | — | — | — | 4,802 | 9,177 | ||||||||||||||||||||||
Sports rights(a) | 2,134 | 531 | 1,287 | 316 | — | 695 | 1,065 | ||||||||||||||||||||||
Broadcasting rights(b)(*) | 36 | — | 3 | 22 | 11 | 370 | 506 | ||||||||||||||||||||||
Creative talent and employment agreements(c) | 121 | 13 | 52 | 33 | 23 | 220 | 250 | ||||||||||||||||||||||
Other | 84 | 41 | 14 | 2 | 27 | 231 | 240 | ||||||||||||||||||||||
Total | € | 8,668 | € | 2,329 | € | 3,658 | € | 2,164 | € | 517 | € | 15,939 | € | 21,693 | |||||||||||||||
Total as of | ||||||||||||||||||||||||||||
Total as of | Payments due in | December 31, | ||||||||||||||||||||||||||
Other contractual obligations and | December 31, | |||||||||||||||||||||||||||
commercial commitments | 2004 | 2005 | 2006-2007 | 2008-2009 | After 2009 | 2003 | 2002 | |||||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||||||
Operating leases(d) | € | 1,628 | € | 274 | �� | € | 443 | € | 376 | € | 535 | € | 1,384 | € | 1,868 | |||||||||||||
Sports rights | — | — | — | — | — | — | 1,440 | (e) | ||||||||||||||||||||
Broadcasting rights(b)(*) | 2,081 | 645 | 548 | 250 | 638 | 1,740 | 2,690 | |||||||||||||||||||||
Creative talent and employment agreements(c)(*) | 828 | 363 | 327 | 105 | 33 | 1,503 | 1,473 | |||||||||||||||||||||
Real estate defeasance(f) | 240 | — | 240 | — | — | 947 | 846 | |||||||||||||||||||||
Other | 328 | 93 | 93 | 32 | 110 | 1,026 | 701 | |||||||||||||||||||||
Total | € | 5,105 | € | 1,375 | € | 1,651 | € | 763 | € | 1,316 | € | 6,600 | € | 9,018 | ||||||||||||||
(*) | The decrease in these commitments as of December 31, 2004 primarily results from the deconsolidation of VUE as of May 11, 2004. |
(a) | Exclusivity contracts for broadcasting sporting events by Canal+ Group recorded in other non-current liabilities. As of December 31, 2004, they primarily include broadcasting rights to the coming three French Football National League 1 seasons (2005-2008) for€1,800 million. |
(b) | Primarily contracts valid over several years related to the broadcasting of future film and TV productions, commitments to film productions and broadcasting rights at Canal+ Group and VUE (in 2003 and 2002). In 2004 Canal+ Group notably extended an agreement for first broadcast rights to all Twentieth Century Fox film features (covering 2007-2012). |
(c) | Agreements in the normal course of business, which relate to creative talent and employment agreements principally at UMG, VU Games and VUE (in 2003 and 2002). |
(d) | Lease obligations assumed in the normal course of business for rental of buildings and equipment, as well as satellite capacities at Canal+ Group. |
(e) | Exclusivity contracts for Canal+ Group broadcasting rights to French National Football League 1 matches for the seasons 2004-2007, on hold as of December 31, 2002. |
(f) | Lease obligations related to the defeasance of real estate. Pursuant to Rule 04-03 issued on May 4, 2004 by the CRC, Vivendi Universal has fully consolidated, as of January 1, 2004, special purpose entities used for the defeasance of certain real estate assets. This consolidation resulted in (i) on the assets side, the recognition of certain real estate assets still defeased as of today, i.e., an increase of€245 million in “Property, plant and equipment”, and (ii) on the liabilities side, an increase of€333 million in “Long- |
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term debt” (please refer to “Item 18 — Financial Statements — Note 1.1”). These amounts, recorded in the Consolidated Statement of Financial Position as of January 1, 2004, do not include the two defeased office towers located at La Défense in Paris sold to German investors on June 29 and 30, 2004. They include (i) the third building located at La Défense sold to Philip Morris in 1998 and leased back to Vivendi Universal under a very long-term lease and (ii) two buildings in Berlin which were sold in 1996, the sales being coupled with very long-term leases. The recording in the Consolidated Statement of Financial Position of these assets leads to the cancellation of the related off-balance sheet commitments. In addition, the off-balance sheet commitments related to the two Philip Morris buildings sold in June 2004 were cancelled. Off-balance sheet commitments still existing in respect of the different buildings in La Défense and in Berlin have been reduced to (i) a rent guarantee, up to a maximum accrued amount of€16 million granted by Vivendi Universal to the buyer of one of two office towers sold in June 2004 and (ii) an annual rental guarantee of€12 million granted by Vivendi Universal to the buyer of the Berlin building Quartier 207 in 1996. This building has not been consolidated as of January 1, 2004 because the associated annual rental guarantees are to terminate in December 2006, following the exercise of the put option committing Dresdner Bank to buy it. The underlying debt related to this building is recorded as an off-balance sheet commitment. |
• | at a price of 75% of the market value of the company as determined by a group of experts should this value not exceed€627 million for the total amount of the capital, with a floor of€250 million; | |
• | for a fixed sum of€470 million if a group of experts value the capital between€627 million and€1,100 million; | |
• | for€470 million plus 35% of the value of the capital in excess of€1,100 million, as determined by a group of experts, if more than€1,100 million. |
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Transactions and guarantees | Amount | Expiry | ||||
Put options to minority shareholders granted by Canal+ Group | Approximately€53 million of which€1 million were exercisable as of December 31, 2004 | — | ||||
Put option on “The Inc.” records | — | 2007 | ||||
Buy/sell agreement on 35% interest in Cegetel SAS held by SNCF | Price depends on the amount of realizable value of the company: | 2007-2010 | ||||
— between 0 and€627 million: price equal to 75% of the realizable value (minimum€250 million). | ||||||
— between€627 million and€1,100 million: price equal to€470 million | ||||||
— above€1,100 million: price equal to€470 million plus 35% of the value of the capital (in excess of€1,100). | ||||||
UMTS license | 1% of revenues earned | 2021 | ||||
Investment program agreed with the Moroccan government | MAD 2.8 billion (€250 million) | 2005 | ||||
Stock guarantee granted by Vivendi Universal to Maroc Telecom employees over Maroc Telecom shares | Maximum of€22 million | 2007-2008 | ||||
Shareholders’ governance agreement with members of the Bronfman family | — | 2005 | ||||
Counter-guarantee on surety bonds | €7 million | — | ||||
Obligations to GenRe | — | — | ||||
Obligations related to the permission to use the Consolidated Global Profit System | — Creation of jobs (2,100 within 5 years) | 2009 | ||||
— Payment of€5 million annually for 5 years | 2009 | |||||
Counter guarantees to banks in connection with Spanish UMTS license | €55 million | — | ||||
Individual entitlement to training | Approximately 207,000 hours in 2004 | — | ||||
NBC-Universal transaction |
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Transactions and guarantees | Amount | Expiry | ||||
— breaches of obligations relating to retained businesses and liabilities, and the divesture of certain businesses | Capped at $2,087.9 million | — | ||||
— obligation to cover the Most Favored Nation provisions | — 50% of every dollar of loss up to $50 million | — | ||||
— 100% of all losses in excess for $50 million | — | |||||
Divestiture of Canal+ Technologies | Specific guarantees capped at€4 million | — | ||||
Divestiture of Canal+ Nordic | — Customary guarantees up to€22 million | 2005 | ||||
— Specific guarantees capped at€50 million | 2010 | |||||
Divestiture of Canal+ Belgique and Canal+ N.V. | — Customary guarantees up to€5 million for each transaction | 2005 | ||||
— Other specific guarantees capped at€8 million | — | |||||
Divestiture of the StudioExpand animation and entertainment operations and certain MultiThématiques assets | Guarantees capped at€27 million | 2014 | ||||
Divestiture of Sportfive | Guarantees capped at€50 million | 2006 | ||||
Divestiture of Canal+ Nederland | Guarantees capped at€4 million | 2006 | ||||
Divestiture of fixed-line telecommunications in Hungary | Customary guarantees related, among other, to the license | — | ||||
Divestiture of Monaco Telecom | — Guarantees capped at€90 million | 2006 | ||||
— Specific guarantees capped at€20 million | 2009 | |||||
Divestiture of Kencell | — Guarantees capped at $40 million | 2006 | ||||
— Specific guarantees | — | |||||
Divestiture of Houghton Mifflin | Guarantees relating to intellectual property, to the environment, to tax and employee matters and to share ownership | 2005-2007 | ||||
Divestiture of 50% stake in Vizzavi | Customary guarantees | — | ||||
Dismantling of MP3 operations | Guarantees to insurers | — | ||||
Divestiture of Sithe | Guarantees capped at $480 million | 2005 | ||||
Sale of real estate assets | — Vendor warranties | 2007 | ||||
— Autonomous first demand guarantees capped at€150 total | 2017 | |||||
Divestiture of AéroServices | Customary guarantees capped at $27.5 million | 2005 | ||||
Divestiture of UCI | Customary guarantees capped at€135 million | 2007 | ||||
Various other miscellaneous guarantees | Approximately€68 million | — |
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As | Canal+ | VTI Assets | Comparable | |||||||||||||||||||||||||||
Year Ended December 31, 2004 | Published | VUE | Assets (a) | Mauritel | (b) | Other | Basis | |||||||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||
Canal+ Group | € | 3,580 | € | — | € | (110 | ) | € | — | € | — | € | — | € | 3,470 | |||||||||||||||
Universal Music Group | 4,993 | — | — | — | — | — | 4,993 | |||||||||||||||||||||||
Vivendi Universal Games | 475 | — | — | — | — | — | 475 | |||||||||||||||||||||||
Media | 9,048 | — | (110 | ) | — | — | — | 8,938 | ||||||||||||||||||||||
SFR Cegetel | 8,317 | — | — | — | — | — | 8,317 | |||||||||||||||||||||||
Maroc Telecom | 1,627 | — | — | 31 | — | — | 1,658 | |||||||||||||||||||||||
Telecom | 9,944 | — | — | 31 | — | — | 9,975 | |||||||||||||||||||||||
Non core operations | 109 | — | — | — | (119 | ) | (10 | ) | (20 | ) | ||||||||||||||||||||
Total Vivendi Universal | € | 19,101 | € | — | € | (110 | ) | € | 31 | € | (119 | ) | € | (10 | ) | € | 18,893 | |||||||||||||
(Excluding VUE) | — | |||||||||||||||||||||||||||||
VUE | 2,327 | (2,327 | ) | — | — | — | — | — | ||||||||||||||||||||||
Total Vivendi Universal | € | 21,428 | € | (2,327 | ) | € | (110 | ) | € | 31 | € | (119 | ) | € | (10 | ) | € | 18,893 | ||||||||||||
Operating Income (Loss) | ||||||||||||||||||||||||||||||
Canal+ Group | € | 198 | € | — | € | (14 | ) | € | — | € | — | € | — | € | 184 | |||||||||||||||
Universal Music Group | 338 | — | — | — | — | — | 338 | |||||||||||||||||||||||
Vivendi Universal Games | (183 | ) | — | — | — | — | — | (183 | ) | |||||||||||||||||||||
Media | 353 | — | (14 | ) | — | — | — | 339 | ||||||||||||||||||||||
SFR Cegetel | 2,257 | — | — | — | — | — | 2,257 | |||||||||||||||||||||||
Maroc Telecom | 673 | — | — | 9 | — | — | 682 | |||||||||||||||||||||||
Telecom | 2,930 | — | — | 9 | — | — | 2,939 | |||||||||||||||||||||||
Holding & Corporate | (220 | ) | — | — | — | — | — | (220 | ) | |||||||||||||||||||||
Non core operations | 76 | — | — | — | (16 | ) | (1 | ) | 59 | |||||||||||||||||||||
Total Vivendi Universal | € | 3,139 | € | — | € | (14 | ) | € | 9 | € | (16 | ) | € | (1 | ) | € | 3,117 | |||||||||||||
(Excluding VUE) | ||||||||||||||||||||||||||||||
VUE | 337 | (337 | ) | — | — | — | — | — | ||||||||||||||||||||||
Total Vivendi Universal | € | 3,476 | € | (337 | ) | € | (14 | ) | € | 9 | € | (16 | ) | € | (1 | ) | € | 3,117 | ||||||||||||
(a) | Mainly corresponds to Canal+ Nederland and “flux-divertissement” businesses of StudioExpand. |
(b) | Corresponds to Monaco Telecom and Kencell. |
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VUP | |||||||||||||||||||||||||||||||||||||||||||||||||||||
assets | Canal+ | Telecom | Change in | VTI | |||||||||||||||||||||||||||||||||||||||||||||||||
As | sold in | assets | Développe- | presentation | Atica & | assets | Comparable | ||||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2003 | published | Telepiú | VUE | 2003 | (a) | ment | Mauritel | (b) | Scipione | Internet | (c) | Other | basis | ||||||||||||||||||||||||||||||||||||||||
(In millions of euros) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Canal+ Group | € | 4,158 | € | (311 | ) | € | — | € | — | € | (508 | ) | € | — | € | — | € | — | € | — | € | — | € | — | € | — | € | 3,339 | |||||||||||||||||||||||||
Universal Music Group | 4,974 | — | — | — | — | — | — | — | — | — | — | — | 4,974 | ||||||||||||||||||||||||||||||||||||||||
Vivendi Universal Games | 571 | — | — | — | — | — | — | — | — | — | — | — | 571 | ||||||||||||||||||||||||||||||||||||||||
Media | 9,703 | (311 | ) | — | — | (508 | ) | — | — | — | — | — | — | — | 8,884 | ||||||||||||||||||||||||||||||||||||||
SFR Cegetel | 7,574 | — | — | — | — | 140 | — | (177 | ) | — | — | — | — | 7,537 | |||||||||||||||||||||||||||||||||||||||
Maroc Telecom | 1,471 | — | — | — | — | — | 53 | (1 | ) | — | — | — | — | 1,523 | |||||||||||||||||||||||||||||||||||||||
Telecom | 9,045 | — | — | — | — | 140 | 53 | (178 | ) | — | — | — | — | 9,060 | |||||||||||||||||||||||||||||||||||||||
Non core operations | 584 | — | — | — | — | — | — | — | (87 | ) | (79 | ) | (331 | ) | (59 | ) | 28 | ||||||||||||||||||||||||||||||||||||
Total Vivendi Universal | € | 19,332 | € | (311 | ) | € | — | € | — | € | (508 | ) | € | 140 | € | 53 | € | (178 | ) | € | (87 | ) | € | (79 | ) | € | (331 | ) | € | (59 | ) | € | 17,972 | ||||||||||||||||||||
(Excluding VUE and VUP assets sold in 2003) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
VUE | 6,022 | — | (6,022 | ) | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
VUP assets sold in 2003 | 128 | — | — | (128 | ) | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Total Vivendi Universal | € | 25,482 | € | (311 | ) | € | (6,022 | ) | € | (128 | ) | € | (508 | ) | € | 140 | € | 53 | € | (178 | ) | € | (87 | ) | € | (79 | ) | € | (331 | ) | € | (59 | ) | € | 17,972 | ||||||||||||||||||
Operating Income (Loss) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Canal+ Group | € | 247 | € | (113 | ) | € | — | € | — | € | (39 | ) | € | — | € | — | € | — | € | — | € | — | € | — | € | — | € | 95 | |||||||||||||||||||||||||
Universal Music Group | 70 | — | — | — | — | — | — | — | — | — | — | — | 70 | ||||||||||||||||||||||||||||||||||||||||
Vivendi Universal Games | (201 | ) | — | — | — | — | — | — | — | — | — | — | — | (201 | ) | ||||||||||||||||||||||||||||||||||||||
Media | 116 | (113 | ) | — | — | (39 | ) | — | — | — | — | — | — | — | (36 | ) | |||||||||||||||||||||||||||||||||||||
SFR Cegetel | 1,919 | — | — | — | — | 52 | — | — | — | — | — | — | 1,971 | ||||||||||||||||||||||||||||||||||||||||
Maroc Telecom | 628 | — | — | — | — | — | 14 | — | — | — | — | — | 642 | ||||||||||||||||||||||||||||||||||||||||
Telecom | 2,547 | — | — | — | — | 52 | 14 | — | — | — | — | — | 2,613 | ||||||||||||||||||||||||||||||||||||||||
Holding & Corporate | (330 | ) | — | — | — | — | — | — | — | — | — | — | — | (330 | ) | ||||||||||||||||||||||||||||||||||||||
Non core operations | 39 | — | — | — | — | — | — | — | (14 | ) | 15 | (40 | ) | (31 | ) | (31 | ) | ||||||||||||||||||||||||||||||||||||
Total Vivendi Universal | € | 2,372 | € | (113 | ) | € | — | € | — | € | (39 | ) | € | 52 | € | 14 | € | — | € | (14 | ) | € | 15 | € | (40 | ) | € | (31 | ) | € | 2,216 | ||||||||||||||||||||||
(Excluding VUE and VUP assets sold in 2003) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
VUE | 931 | — | (931 | ) | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
VUP assets sold in 2003 | 6 | — | — | (6 | ) | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Total Vivendi Universal | € | 3,309 | € | (113 | ) | € | (931 | ) | € | (6 | ) | € | (39 | ) | € | 52 | € | 14 | € | — | € | (14 | ) | € | 15 | € | (40 | ) | € | (31 | ) | € | 2,216 | ||||||||||||||||||||
(a) | Mainly corresponds to Canal+ Nordic, Canal+ Benelux and “flux-divertissement” businesses of StudioExpand. |
(b) | Corresponds to a change in presentation adopted as of December 31, 2004: in order to standardize the accounting treatment of sales of services provided to customers on behalf of content providers (mainly toll numbers), following the full consolidation of Telecom Développement, sales of services to customers, managed by SFR Cegetel and Maroc Telecom on behalf of content providers, previously presented on a gross basis in SFR and Telecom Développement’s revenues, are presented net of the related expenses. This change in presentation has no impact on operating income. At SFR Cegetel, it reduced revenues by€168 million in 2004. At Maroc Telecom, the impact was immaterial. |
(c) | Corresponds to Vivendi Telecom Hungary, Monaco Telecom and Kencell. |
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Item 6: | Directors, Senior Management and Employees |
The Management Board |
Mission |
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Composition |
Name | Age | Positions and Responsibilities | ||||
Jean-Bernard Lévy | 50 | Chairman of the management board and Chief Executive Officer of Vivendi Universal | ||||
Abdeslam Ahizoune | 50 | Chairman of the management board of Maroc Telecom | ||||
Jacques Espinasse | 62 | Chief Financial Officer of Vivendi Universal | ||||
Frank Esser | 46 | Chairman of SFR Cegetel Group | ||||
Bertrand Meheut | 53 | Chairman of the executive board of Canal+ Group. Chairman and Chief Executive Officer of Canal+ S.A. | ||||
Doug Morris | 66 | Chairman and Chief Executive Officer of Universal Music Group | ||||
René Pénisson | 63 | Chairman of VU Games. Senior Executive Vice- President, Human Resources of Vivendi Universal |
Biographies |
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The Supervisory Board |
Mission |
Composition |
Expiration of | ||||||||||
Name | Age | Position | term(1) | |||||||
Jean-René Fourtou(2)(3) | 66 | Chairman of the supervisory board | 2008 | |||||||
Claude Bébéar(2)(3) | 69 | Member of the supervisory board | 2008 | |||||||
Gérard Brémond(3) | 67 | Member of the supervisory board | 2008 | |||||||
Fernando Falcó y Fernández de Córdova(3) | 65 | Member of the supervisory board | 2006 | |||||||
Paul Fribourg(3) | 51 | Member of the supervisory board | 2008 | |||||||
Gabriel Hawawini(3) | 57 | Member of the supervisory board | 2006 | |||||||
Henri Lachmann(3) | 66 | Member of the supervisory board | 2008 | |||||||
Pierre Rodocanachi(3) | 66 | Member of the supervisory board | 2008 | |||||||
Karel Van Miert(3) | 63 | Member of the supervisory board | 2008 | |||||||
Sarah Frank | 59 | Member of the supervisory board | 2009 | |||||||
Patrick Kron | 52 | Member of the supervisory board | 2009 | |||||||
Andrzej Olechowski | 57 | Member of the supervisory board | 2009 |
(1) | Term expires at the annual shareholders’ meeting approving the accounts for the year set forth in this column. |
(2) | Under French law, this member of the supervisory board is not considered independent. |
(3) | This member was a director prior to the change of our corporate form and was appointed as member of the supervisory board for the remainder of his term as director. |
Biographies |
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Name | Age | Positions and Responsibilities | ||||
Jean-Bernard Lévy | 50 | Chairman of the management board and Chief Executive Officer of Vivendi Universal | ||||
Jacques Espinasse | 62 | Member of the management board and Chief Financial Officer of Vivendi Universal | ||||
Robert de Metz | 53 | Senior Executive Vice-President, Strategy and Development | ||||
René Pénisson | 63 | Member of the management board and Senior Executive Vice-President, Human Resources, Vivendi Universal. Chairman of Vivendi Universal Games | ||||
Jean-François Dubos | 59 | Executive Vice-President and General Counsel, Secretary of the management and supervisory boards | ||||
Michel Bourgeois | 55 | Executive Vice-President, Communications and Public Affairs | ||||
Régis Turrini | 46 | Executive Vice-President, Mergers and Acquisitions |
Biographies |
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Year of | ||||||
appointment | ||||||
Name | Position | as Director | ||||
Jean-René Fourtou(1)(2) | Chairman and Chief Executive Officer | 2002 | ||||
Claude Bébéar(1)(2) | Director | 2002 | ||||
Gérard Brémond(2) | Director | 2003 | ||||
Bertrand Collomb | Director | 2003 | ||||
Fernando Falcó y Fernández de Córdova(2) | Director | 2002 | ||||
Paul Fribourg(2) | Director | 2003 | ||||
Gabriel Hawawini(2) | Director | 2003 | ||||
Gerard Kleisterlee | Director | 2002 | ||||
Marie-Josée Kravis | Director | 2001 | ||||
Henri Lachmann(2) | Director | 2000 | ||||
Pierre Rodocanachi(2) | Director | 2004 | ||||
Karel Van Miert(2) | Director | 2004 |
(1) | Under French law, this director was not considered independent. |
(2) | Appointed as member of the supervisory board at the Annual Meeting. |
Compensation of Directors in 2004 |
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(In euros) | ||||
Members of the Board of directors in 2004 | ||||
Mr. Jean-René Fourtou(1) | 0 | |||
Mr. Claude Bébéar | 135,500 | |||
Mr. Gérard Brémond | 77,000 | |||
Mr. Bertrand Collomb | 99,500 | |||
Mr. Fernando Falcó y Fernández de Córdova | 75,250 | |||
Mr. Paul Fribourg | 93,250 | |||
Mr. Gabriel Hawawini | 68,000 | |||
Mr. Gerard Kleisterlee | 52,750 | |||
Mrs. Marie-Josée Kravis | 144,500 | |||
Mr. Henri Lachmann | 91,875 | |||
Mr. Pierre Rodocanachi | 29,500 | |||
Mr. Karel Van Miert | 34,000 | |||
Total | 901,125 | |||
(1) | Mr. Fourtou waived the payment of his fees for 2004. |
Compensation of the Chairman and Chief Executive Officer in 2004 |
Compensation of Senior Executives |
(6) | At the Annual Meeting held on April 28, 2005, Mr. Fourtou was appointed Chairman of the supervisory board. |
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Creation and Functioning of Committees — Common Attributes |
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Audit Committee |
Composition |
Mission |
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Strategy Committee |
Composition |
Mission |
Human Resources Committee |
Composition |
Mission |
Corporate Governance Committee |
Composition |
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Mission |
Breakdown of employees by business segments |
Number of | Number of | Number of | ||||||||||
employees in 2004 | employees in 2003 | employees in 2002 | ||||||||||
Canal+ Group | 4,275 | 4,798 | 7,541 | |||||||||
UMG | 9,661 | 10,849 | 11,754 | |||||||||
VU Games | 1,654 | 1,985 | 2,074 | |||||||||
VUE(a) | — | 14,187 | 14,605 | |||||||||
SFR Cegetel Group(b) | 9,781 | 9,036 | 10,882 | |||||||||
Maroc Telecom | 12,204 | (c) | 12,145 | 13,493 | ||||||||
Other(d) | 331 | 2,451 | 1,466 | |||||||||
Total | 37,906 | 55,451 | (e) | 61,815 | ||||||||
(a) | Vivendi Universal Entertainment was deconsolidated on May 11, 2004. |
(b) | In 2002, including VTI; in 2003, excluding Telecom Développement. |
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(c) | Excludes Mauritel. |
(d) | For 2002, VU Net and Corporate. For 2003, VU Net, VTI, Corporate and Atica & Scipione. For 2004, VU Net, VTI, and Corporate. |
(e) | Excludes Studios Babelsberg. |
Breakdown of employees by geographic location |
Number of | Number of | Number of | ||||||||||
employees in 2004 | employees in 2003 | employees in 2002 | ||||||||||
North America | 4,713 | 18,910 | 20,188 | |||||||||
Europe (excl. France) | 4,667 | 6,504 | 9,552 | |||||||||
France | 14,529 | 14,740 | 16,043 | |||||||||
Africa | 12,252 | 12,776 | 14,100 | |||||||||
Asia Pacific | 1,409 | 1,322 | 1,494 | |||||||||
South America | 336 | 1,199 | 438 | |||||||||
Total | 37,906 | 55,451 | 61,815 | |||||||||
Share Ownership |
Name | Number of shares held | |||
Jean-René Fourtou | 400,000 | (1) | ||
Claude Bébéar | 2,000 | |||
Gérard Brémond | 750 | |||
Bertrand Collomb | 1,607 | |||
Fernando Falcó y Fernández de Córdova | 1,000 | |||
Paul Fribourg | 1,000 | |||
Gabriel Hawawini | 1,390 | |||
Gerard Kleisterlee | 800 | |||
Marie-Josée Kravis | 750 | |||
Henri Lachmann | 1,500 | |||
Pierre Rodocanachi | 1,800 | |||
Karel Van Miert | 750 | |||
Total | 413,437 | (2) | ||
(1) | Including 128,622 as usufructuary. |
(2) | represents 0.04% of our share capital. |
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• | 10,886,898 options(1) to purchase ADSs or Vivendi Universal shares, representing 1% of Vivendi Universal’s outstanding share capital, were granted to 3,681 beneficiaries in December 2000, exercisable at a strike price, without discount, of€78.64 for Vivendi Universal shares or $67.85 for ADSs; | |
• | 5,200,000 options(1) to purchase ADSs or Vivendi Universal shares, representing 0.48% of Vivendi Universal’s outstanding share capital, were granted to a select group (approximately 100) senior executives in December 2000 under the Outperformance Plan (the vesting and exercisability of these stock options are linked to the outperformance of Vivendi Universal against a weighted index media company performance comprised of 60% Media MSCI and 40% Stoxx Media); | |
• | 13,333,627 options(1) to purchase ADSs or Vivendi Universal shares, representing 1.23% of Vivendi Universal’s share capital then outstanding, were granted to 2,816 beneficiaries in October 2001, exercisable at a strike price, without discount, of€48.20 for Vivendi Universal shares or $44.25 for ADSs; | |
• | 3,619,300 options(1) to purchase ADSs or Vivendi Universal shares, representing 0.33% of Vivendi Universal’s share capital then outstanding, were granted to 51 beneficiaries in September 2002, exercisable at a strike price of€12.10 for Vivendi Universal shares or $11.79 for ADSs. | |
• | 1,660,000 options(1) to purchase ADSs or Vivendi Universal shares, representing 0.16% of Vivendi Universal’s share capital then outstanding, were granted to 35 beneficiaries in January 2003, exercisable at a strike price of€15.90 for Vivendi Universal shares or $16.85 for ADSs. | |
• | 11,299,000 options(1) to purchase ADSs or Vivendi Universal shares, representing 1.06% of Vivendi Universal’s share capital then outstanding, were granted to 489 beneficiaries in May 2003, exercisable at a strike price, without discount, of€14.40 for Vivendi Universal shares or $16.44 for ADSs. | |
• | 1,015,000 options(1) to purchase ADSs or Vivendi Universal shares, representing 0.09% of Vivendi Universal’s share capital then outstanding, were granted to 80 beneficiaries in December 2003, exercisable at a strike price, without discount, of€19.07 for Vivendi Universal shares or $22.59 for ADSs. | |
• | 9,279,600 options(1) to purchase ADSs or Vivendi Universal shares, representing 0.87% of Vivendi Universal’s share capital then outstanding, were granted to 563 beneficiaries in March 2004, exercisable at a strike price, without discount, of€20.67 for Vivendi Universal shares or $24.61 for ADSs. |
(1) | As a consequence of the 2002 dividend payment taken from the retained earnings (in accordance with applicable rules), we adjusted the exercise prices and number of Vivendi Universal shares or ADSs subject to each outstanding stock option and the number of Vivendi Universal shares or ADSs reserved for issuance under each of the existing stock option plans before 2002 in order to preserve the value of each option. |
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• | if, after a three-year period, the performance of Vivendi Universal’s stock price exceeds the index performance by 9% or more; | |
• | if, after a four-year period, the performance of Vivendi Universal’s stock price exceeds the index performance by 12% or more; or | |
• | if, after a five-year period, the performance of Vivendi Universal’s stock price exceeds the index performance by 15% or more. |
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Item 7: | Major Shareholders and Related Party Transactions |
Item 8: | Financial Information |
COB/ AMF Procedure |
AMF Investigation into Vivendi Universal’s Purchase of Its Own Shares |
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AMF Complaint in Connection with the Issuance of Notes Mandatorily Redeemable for New Shares of Vivendi Universal |
Investigation by the Financial Department of the Parquet de Paris |
Securities Class Action Litigation |
Elektrim Telekomunikacja |
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1. The transfer by Elektrim to Elektrim Telekomunikacja of the PTC shares was ineffective, and the PTC shares were to be considered as never having ceased to form part of the assets of Elektrim; | |
2. The said sale did not constitute a material breach of Article 16.1 of the shareholders agreement between DT and Elektrim, but such a material breach would occur if Elektrim did not recover the shares concerned within two months of service of the Award; | |
3. The Tribunal dismissed DT’s claim for a declaration that an economic impairment on the part of Elektrim existed; and | |
4. The Tribunal did not have jurisdiction over Elektrim Telekomunikacja, and the claims concerning Elektrim Telekomunikacja could not be entertained in the context of the arbitration. |
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Dispute with the IRS |
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SFR |
Universal Music Group |
Dividend Policy |
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Last Six Months |
Eurolist by | ||||||||||||||||
EuronexttmParis | ||||||||||||||||
(Ordinary | NYSE | |||||||||||||||
Shares) | (ADSs) | |||||||||||||||
High | Low | High | Low | |||||||||||||
May, 2005 | € | 25.05 | € | 23.25 | $ | 31.48 | $ | 29.70 | ||||||||
April, 2005 | 24.50 | 22.50 | 31.39 | 29.65 | ||||||||||||
March, 2005 | 24.50 | 22.78 | 32.15 | 30.38 | ||||||||||||
February, 2005 | 25.21 | 23.42 | 32.73 | 31.39 | ||||||||||||
January, 2005 | 24.62 | 23.23 | 32.33 | 30.64 | ||||||||||||
December, 2004 | 24.00 | 22.10 | 32.28 | 29.88 |
Last Two Years by Quarter |
Eurolist by | ||||||||||||||||
EuronexttmParis | NYSE | |||||||||||||||
(Ordinary Shares) | (ADSs) | |||||||||||||||
High | Low | High | Low | |||||||||||||
2005 | ||||||||||||||||
Second Quarter (through June 23, 2005) | € | 25.98 | € | 22.50 | $ | 31.48 | $ | 29.65 | ||||||||
First Quarter | 25.21 | 22.78 | 32.73 | 30.23 | ||||||||||||
2004 | ||||||||||||||||
Fourth Quarter | 24.00 | 20.31 | 32.28 | 25.94 | ||||||||||||
Third Quarter | 23.29 | 19.06 | 28.27 | 23.57 | ||||||||||||
Second Quarter | 23.37 | 19.00 | 28.10 | 23.08 | ||||||||||||
First Quarter | 23.85 | 19.30 | 29.32 | 24.45 | ||||||||||||
2003 | ||||||||||||||||
Fourth Quarter | 19.71 | 15.11 | 24.28 | 18.38 | ||||||||||||
Third Quarter | 17.63 | 14.52 | 18.80 | 16.57 | ||||||||||||
Second Quarter | 17.75 | 12.03 | 20.63 | 13.73 | ||||||||||||
First Quarter | 17.98 | 11.03 | 18.90 | 12.30 |
Last Five Years |
Eurolist by | ||||||||||||||||
EuronexttmParis | NYSE | |||||||||||||||
(Ordinary Shares) | (ADSs) | |||||||||||||||
High | Low | High | Low | |||||||||||||
2005 (through June 23, 2005) | € | 25.98 | € | 22.50 | $ | 32.73 | $ | 29.65 | ||||||||
2004 | 24.00 | 19.00 | 32.28 | 23.08 | ||||||||||||
2003 | 19.71 | 11.03 | 24.28 | 12.30 | ||||||||||||
2002 | 64.40 | 8.62 | 57.90 | 8.90 | ||||||||||||
2001 | 82.00 | 40.22 | 76.00 | 37.30 | ||||||||||||
2000 | 150.00 | 68.60 | 142.50 | 50.00 |
Item 10: | Additional Information |
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Register Information |
Purpose |
Members of the Management and Supervisory Boards |
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General |
Notice |
Attendance and Voting |
Proxies and Votes by Mail |
Quorum and Majority |
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Limitations on Right to Own Securities |
Anti-Takeover Provisions of our By-Laws |
Anti-Takeover Effects of Applicable Law |
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Dividends |
Voting Rights |
Liquidation Rights |
Future Capital Calls |
Changes in Share Capital |
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Amendments to Rights of Holders |
• | dealers or traders in securities or foreign currency, including traders in securities that use a mark-to-market method of accounting for their holdings; | |
• | tax-exempt organizations or retirement plans, except to a limited extent under “French Taxation of US Holders of Our Ordinary Shares or ADSs — Taxation of Dividends”; | |
• | banks, thrifts, insurance companies, regulated investment companies, or other financial institutions or “financial services entities”; | |
• | real estate investment trusts; |
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• | persons that acquire our ordinary shares or ADSs as compensation; | |
• | persons that hold our ordinary shares or ADSs together with other investments as part of a “straddle”, “hedge”, “conversion transaction”, “constructive sale”, or other integrated transaction; | |
• | US persons that have a functional currency other than the US dollar; | |
• | certain expatriates and former long-term residents of the United States; | |
• | certain foreign corporations treated as domestic corporations pursuant to section 269B or section 7874 of the Code; | |
• | partnerships and other pass-through entities, or investors that hold our ordinary shares or ADSs through partnerships or other pass-through entities; | |
• | persons that own, whether directly, indirectly, or through attribution, at least 10% of the value or voting power of our shares; | |
• | persons that are not entitled to the benefits of the Convention between the US and France for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital, entered into on August 31, 1994 (the Treaty); and | |
• | persons whose ownership of our ordinary shares or ADSs is connected with the conduct of business through a permanent establishment or fixed base in France. |
• | a citizen or resident of the US; | |
• | a corporation created or organized in the US or under the laws of the US or any state thereof or the District of Columbia; | |
• | an estate the income of which is includible in gross income for US federal income tax purposes regardless of its source; or |
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• | a trust, if (i) a court within the US is able to exercise primary supervision of the administration of the trust and one or more US persons have the authority to control all substantial decisions of the trust or (ii) the trust has a valid election in effect under applicable US Treasury regulations to be treated as a US person. |
Taxation of Dividends |
• | Name and address of the US financial institution managing the securities account of the US Holder; | |
• | Name and address of the US Holder; | |
• | French tax identification number of the US Holder, if necessary; | |
• | Nature of the rights held; | |
• | Dividend payment date; | |
• | Par value of the stock in respect of which dividends were paid; and | |
• | Total amount distributed to the US Holder. |
Taxation of Capital Gains |
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Wealth Tax |
Taxation of Dividends |
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Taxation of Capital Gains |
Tax Consequences if We Are a Passive Foreign Investment Company |
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Overview |
Composition of Board of Directors; Independence |
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Board Committees |
Audit Committee |
Corporate Governance Guidelines |
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Other Differences |
Item 11: | Quantitative and Qualitative Disclosures about Market Risk |
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a 5% change: |
• | a positive change (appreciation of the US dollar) would lead to an increase of about 1.9% in revenue, 0.7% in operating income and 1.6% in net cash provided by operating activities; | |
• | a negative change (depreciation of the US dollar) would lead to a decrease of about 1.7% in revenue, 0.7% in operating income and 1.5% in net cash provided by operating activities. |
a 10% change: |
• | a positive change (appreciation of the US dollar) would lead to an increase of about 4.0% in revenue, 1.6% in operating income and 3.4% in net cash provided by operating activities; | |
• | a negative change (depreciation of the US dollar) would lead to a decrease of about 3.3% in revenue, 1.3% in operating income and 2.8% in net cash provided by operating activities. |
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December 31, | |||||||||||||||||||||||||
2004 | 2003 | 2002 | |||||||||||||||||||||||
Carrying | Carrying | Carrying | |||||||||||||||||||||||
Value | Fair Value | Value | Fair Value | Value | Fair Value | ||||||||||||||||||||
(In millions of euros) | |||||||||||||||||||||||||
Financial assets | |||||||||||||||||||||||||
Other investments | € | 2,449 | € | 3,013 | € | 3,549 | € | 3,909 | € | 4,138 | € | 4,138 | (a) | ||||||||||||
Interest rate collars | — | — | — | 1 | — | — | |||||||||||||||||||
Currency swaps | 17 | 17 | 20 | 20 | 44 | 44 | |||||||||||||||||||
Forward exchange contracts | — | — | — | — | 106 | 106 | |||||||||||||||||||
Financial liabilities | |||||||||||||||||||||||||
Long-term debt | € | 4,549 | € | 4,760 | € | 9,621 | € | 10,294 | € | 10,455 | € | 10,622 | |||||||||||||
Interest rate swaps (including accrued interest)(b) | 162 | 163 | 228 | 257 | 241 | 257 | |||||||||||||||||||
Forward exchange contracts | — | — | 4 | 4 | — | — | |||||||||||||||||||
Put options on treasury shares(b) | — | — | — | — | 104 | 104 |
(a) | In 2002, due to provisions recognized, the net carrying value of investments corresponds to their fair value. |
(b) | In addition to accrued interest, provisions were recorded on these elements in respect of potential losses as of December 31, 2002 and 2003. |
Item 12: | Description of Securities Other than Equity Securities |
Item 13: | Default, Dividend Arrearages and Delinquencies |
Item 14: | Material Modifications to the Rights of Security Holders |
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Item 15: | Controls and Procedures |
Item 16A: | Audit Committee Financial Expert |
Item 16B: | Code of Ethics |
Item 16C: | Principal Accountant Fees and Services |
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RSM | Barbier | ||||||||||||||||
Amount | Amount | ||||||||||||||||
2004 | 2003 | 2004 | 2003 | ||||||||||||||
(In millions of euros) | |||||||||||||||||
Audit fees | 5.7 | 7.8 | 10.9 | 10.4 | |||||||||||||
Audit-related fees | 2.0 | 1.9 | 2.6 | 12.7 | |||||||||||||
Tax fees | — | — | — | — | |||||||||||||
All Other fees | — | — | — | — | |||||||||||||
Total | 7.7 | 9.7 | 13.5 | 23.1 | |||||||||||||
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Item 16D: | Exemptions from the Listing Standards for Audit Committees |
Item 16E: | Purchases of Equity Securities by the Issuer and Affiliated Purchasers |
Total Number of | Maximum Number | |||||||||||||||
Shares Purchased as | of Shares that May | |||||||||||||||
Part of Publicly | Yet Be Purchased | |||||||||||||||
Total Number of | Average Price Paid | Announced Plans or | Under the Plans or | |||||||||||||
Period | Shares Purchased | per Share (€) | Programs | Programs | ||||||||||||
January 2004 | (1) | (1) | — | 6,350,000 | ||||||||||||
February 2004 | (1) | (1) | — | 6,350,000 | ||||||||||||
March 2004 | (1) | (1) | — | 6,350,000 | ||||||||||||
April 2004 | (1) | (1) | — | 6,350,000 | ||||||||||||
May 2004 | 1,001,500 | (3) | 20.13 | (5) | 1,001,500 | (2) | 5,348,500 | |||||||||
June 2004 | 2,514,325 | (4) | 23.13 | (5) | 2,514,325 | (2) | 2,834,175 | |||||||||
July 2004 | 1,247,000 | (6) | 22.58 | 1,247,000 | (2) | 1,587,175 | ||||||||||
August 2004 | — | — | — | 1,587,175 | ||||||||||||
September 2004 | — | — | — | 1,587,175 | ||||||||||||
October 2004 | — | — | — | 1,587,175 | ||||||||||||
November 2004 | — | — | — | — | ||||||||||||
December 2004 | — | — | — | — |
(1) | The shares purchase program has been implemented on May 5, 2004. |
(2) | The Combined Shareholders’ Meeting held on April 29, 2003 authorized the board of directors of Vivendi Universal to buy and sell the company’s own shares on the market for a period of 18 months in compliance with the objectives and procedures of the stock purchase program approved on May 3, 2004 by theCommission des Opérations de Bourse(COB) under visa no. 04-355. The number of shares held or acquired may not exceed 5% of the company authorized share capital. Under this authorization, 4,762,825 shares have been repurchased from May 5, 2004 to October 27, 2004. However, the board of directors has decided to limit the number of shares to be purchased to 6,350,000. |
(3) | Including 1,000,000 shares purchased on the Euronext market and 1,500 by exercise of call options. |
(4) | Including 550,000 shares purchased on the Euronext market and 1,964,325 by exercise of call options. |
(5) | Average price paid for shares purchased on the Euronext market. The average price of shares purchased by exercise of call options granted to the Canal+ Group employees was€19.58. |
(6) | Purchased on the Euronext market. |
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Exhibit | ||||
Number | Description | |||
1 | .1 | Amended and Restated By-Laws and Articles of Association (statuts) of Vivendi Universal (English translation). | ||
2 | .1* | Deposit Agreement, dated as of April 19, 1995, as amended and restated as of September 11, 2000, and as further amended and restated as of December 8, 2000, by and among Vivendi Universal, S.A., The Bank of New York, as Depositary, and all the Owners and Beneficial Owners from time to time of American Depositary Shares issued thereunder (incorporated by reference to Vivendi Universal’s Registration Statement on Form 8-A, filed on December 29, 2000, File No. 001-16301). | ||
2 | .2 | Vivendi Universal agrees to furnish to the Commission on request a copy of any instrument defining the rights of holders of long-term debt of Vivendi Universal and any subsidiary for which consolidated or unconsolidated financial statements are required to be filed. | ||
4 | .1* | Merger Agreement, dated as of June 19, 2000, by and among Vivendi S.A., Canal Plus S.A., Sofiée S.A., 3744531 Canada Inc. and The Seagram Company Ltd. (incorporated by reference to Vivendi Universal’s Registration Statement on Form F-4, filed on October 30, 2000, File No. 333-48966). | ||
4 | .2* | Shareholder Governance Agreement, dated as of June 19, 2000, by and among Vivendi S.A., Sofiée S.A. and certain shareholders of the Seagram Company Ltd. (incorporated by reference to Vivendi Universal’s Registration Statement on Form F-4, filed on October 30, 2000, File No. 333-48966). | ||
4 | .3* | Business Combination Agreement, dated as of October 8, 2003, by and among General Electric Company, National Broadcasting Company Holding, Inc., National Broadcasting Company, Inc., Universal Studios Holding III Corp. and Vivendi Universal, S.A. (incorporated by reference to Vivendi Universal’s Report of Foreign Private Issuer on Form 6-K, filed on November 4, 2003, File No. 001-16301). | ||
4 | .4* | IACI Matters Agreement, dated as of October 8, 2003, by and among General Electric Company, National Broadcasting Company Holding, Inc., National Broadcasting Company, Inc., Universal Studios Holding III Corp. and Vivendi Universal, S.A. (incorporated by reference to Vivendi Universal’s Report of Foreign Private Issuer on Form 6-K, filed on November 4, 2003, File No. 001-16301). | ||
8 | .1 | List of subsidiaries of Vivendi Universal S.A. | ||
12 | .1 | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities and Exchange Act of 1934. | ||
12 | .2 | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities and Exchange Act of 1934. | ||
13 | .1 | Certification of the Chief Executive Officer Pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code. | ||
13 | .2 | Certification of the Chief Financial Officer Pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code. | ||
14 | .1 | Consent of RSM Salustro Reydel and Barbier Frinault & Cie. | ||
15 | .1 | IFRS 2004 Transition. |
* | Incorporated herein by reference as indicated. |
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Page | |||||
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS | F-5 | ||||
CONSOLIDATED STATEMENT OF FINANCIAL POSITION | F-6 | ||||
CONSOLIDATED STATEMENT OF INCOME | F-7 | ||||
CONSOLIDATED STATEMENT OF CASH FLOWS | F-8 | ||||
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY | F-9 | ||||
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES | F-10 | ||||
1.1. New Accounting Policy: CRC Rule 04-03 Issued on May 4, 2004 Concerning the Consolidation of Special Purpose Entities | F-10 | ||||
1.2. New Accounting Policy: Notice N°2004-E Issued on October 13, 2004 by the CNC Urgent Issues Taskforce | F-10 | ||||
1.3. Change in Presentation of Telecommunications Operation Revenues | F-11 | ||||
1.4. Change in Estimate at Universal Music Group | F-11 | ||||
1.5. Use of Estimates | F-11 | ||||
1.6. Principles of Consolidation | F-11 | ||||
1.7. Foreign Currency Translation | F-12 | ||||
1.8. Revenues and Costs | F-12 | ||||
1.9. Earnings per Share | F-14 | ||||
1.10. Long-Term Assets | F-14 | ||||
1.11. Current Assets | F-16 | ||||
1.12. Liabilities | F-17 | ||||
1.13. Other | F-17 | ||||
NOTE 2 DATA RELATED TO THE MAIN OPERATIONS DIVESTED IN 2004, 2003 AND 2002 (UNAUDITED) | F-18 | ||||
NOTE 3 CHANGES IN SCOPE IN 2004 AND 2003 | F-19 | ||||
3.1. NBC-Universal Transaction Completed on May 11, 2004 | F-19 | ||||
3.2. Divestiture of 15% of Veolia Environnement, Part of Vivendi Universal’s 20.3% Stake — December 2004 | F-22 | ||||
3.3. Other 2004 and 2003 Changes in Scope | F-23 | ||||
NOTE 4 GOODWILL AS OF DECEMBER 31, 2004, 2003 AND 2002 | F-25 | ||||
4.1. Changes in Goodwill | F-25 | ||||
4.2. Purchase Price Allocation of the 26% Interest in SFR (Formerly Known As | |||||
Cegetel Groupe S.A.) | F-25 | ||||
4.3. Purchase Price Allocation of the Entertainment Assets of InterActivecorp (IAC) | F-26 | ||||
4.4. Impairment Losses | F-26 | ||||
NOTE 5 OTHER INTANGIBLE ASSETS AS OF DECEMBER 31, 2004, 2003 AND 2002 | F-28 | ||||
NOTE 6 PROPERTY, PLANT AND EQUIPMENT AS OF DECEMBER 31, 2004, 2003 AND 2002 | F-29 | ||||
NOTE 7 INVESTMENTS IN EQUITY AFFILIATES AS OF DECEMBER 31, 2004, 2003 AND 2002 | F-30 | ||||
7.1. Equity Affiliates | F-30 | ||||
7.2. Change in Equity Affiliates During the Year | F-31 |
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Page | |||||
7.3. Equity Accounting of Elektrim Telekomunikacja | F-31 | ||||
7.4. Supplemental Financial Information with Respect to Equity Affiliates | F-35 | ||||
NOTE 8 OTHER INVESTMENTS AS OF DECEMBER 31, 2004, 2003 AND 2002 | F-37 | ||||
8.1. Investments Accounted for Using the Cost Method | F-37 | ||||
8.2. Portfolio Investments — Securities | F-38 | ||||
8.3. Portfolio Investments — Other | F-39 | ||||
NOTE 9 ACCOUNTS RECEIVABLE AND OTHER AS OF DECEMBER 31, 2004, 2003 AND 2002 | F-40 | ||||
NOTE 10 MARKETABLE SECURITIES AS OF DECEMBER 31, 2004, 2003 AND 2002 | F-40 | ||||
NOTE 11 SHAREHOLDERS’ EQUITY AS OF DECEMBER 31, 2004, 2003 AND 2002 | F-41 | ||||
11.1. Treasury Shares Held by Vivendi Universal and its Subsidiaries | F-41 | ||||
11.2. Stripped Shares | F-41 | ||||
11.3. Goodwill Recorded as a Reduction in Shareholders’ Equity | F-42 | ||||
11.4. Potential Dilutive Effect of Outstanding Financial Instruments | F-42 | ||||
NOTE 12 MINORITY INTERESTS IN 2004, 2003 AND 2002 | F-43 | ||||
NOTE 13 OTHER EQUITY: NOTES MANDATORILY REDEEMABLE FOR NEW SHARES OF VIVENDI UNIVERSAL | F-43 | ||||
NOTE 14 PROVISIONS AS OF DECEMBER 31, 2004, 2003 AND 2002 | F-43 | ||||
NOTE 15 EMPLOYEE BENEFIT PLANS AS OF DECEMBER 31, 2004, 2003 AND 2002 | F-44 | ||||
NOTE 16 RESTRUCTURING COSTS AS OF DECEMBER 31, 2004, 2003 AND 2002 | F-48 | ||||
NOTE 17 FINANCIAL NET DEBT AS OF DECEMBER 31, 2004, 2003 AND 2002 | F-50 | ||||
17.1. Financial Net Debt as of December 31, 2004 | F-51 | ||||
17.2. Financial Net Debt as of December 31, 2003 | F-53 | ||||
17.3. Financial Net Debt as of December 31, 2002 | F-54 | ||||
17.4. Supplemental Information Regarding Long-term Debt | F-55 | ||||
NOTE 18 OTHER NON-CURRENT LIABILITIES AND ACCRUED EXPENSES AS OF DECEMBER 31, 2004, 2003 AND 2002 | F-56 | ||||
NOTE 19 ACCOUNTS PAYABLE AS OF DECEMBER 31, 2004, 2003 AND 2002 | F-56 | ||||
NOTE 20 OPERATING INCOME FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002 | F-57 | ||||
20.1. Breakdown of Revenues and Costs of Revenues | F-57 | ||||
20.2. Research and Development Costs | F-57 | ||||
20.3. Personnel Costs and Numbers of Employees | F-57 | ||||
NOTE 21 COMPENSATION FOR EXECUTIVE OFFICERS, SENIOR EXECUTIVES AND DIRECTORS IN 2004 | F-57 | ||||
21.1. Compensation of Executive Officers | F-57 | ||||
21.2. Compensation of Chairman and Chief Executive Officer | F-58 | ||||
21.3. Compensation of Senior Executives | F-58 | ||||
21.4. Compensation of Directors | F-58 | ||||
NOTE 22 OTHER FINANCIAL EXPENSES, NET OF PROVISIONS FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002 | F-59 | ||||
NOTE 23 GAIN (LOSS) ON BUSINESSES SOLD, NET OF PROVISIONS, FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002 | F-62 |
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Page | |||||
NOTE 24 INCOME TAX FOR THE 2004, 2003 AND 2002 FISCAL YEARS | F-63 | ||||
24.1. Consolidated Global Profit Tax System | F-63 | ||||
24.2. Components of Income Tax | F-64 | ||||
24.3. Effective Income Tax Rate | F-65 | ||||
24.4. Components of Deferred Taxes Assets and Liabilities | F-66 | ||||
24.5. Tax Audits | F-67 | ||||
NOTE 25 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2004, 2003, 2002 | F-67 | ||||
25.1. Depreciation and Amortization | F-67 | ||||
25.2. Changes in Working Capital | F-67 | ||||
25.3. Cash Dividends | F-68 | ||||
25.4. Non-Cash Investing and Financing Activities | F-68 | ||||
NOTE 26 BUSINESS SEGMENT DATA FOR THE YEARS ENDED DECEMBER 31, 2004, 2003, 2002 | F-69 | ||||
26.1. Geographic Data | F-69 | ||||
26.2. Business Segment Data | F-69 | ||||
NOTE 27 RELATED PARTY TRANSACTIONS WHICH OCCURRED DURING THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002 | F-71 | ||||
27.1. Related Companies | F-71 | ||||
27.2. Related Parties | F-73 | ||||
NOTE 28 COMMITMENTS AND CONTINGENCIES | F-75 | ||||
28.1. Procedures | F-75 | ||||
28.2. Contractual Obligations and Commercial Commitments Given as of December 31, 2004, 2003 and 2002 | F-75 | ||||
28.3. Specific Commitments Given as of December 31, 2004 | F-77 | ||||
28.4. Commitments Received as of December 31, 2004 | F-83 | ||||
28.5. Contingent Liabilities | F-84 | ||||
28.6. Collateral and Pledges as of December 31, 2004 | F-87 | ||||
28.7. Financial Instruments as of December 31, 2004, 2003 and 2002 | F-87 | ||||
28.8. Environmental Matters | F-93 | ||||
NOTE 29 STOCK BASED COMPENSATION AS OF DECEMBER 31, 2004, 2003 AND 2002 | F-93 | ||||
29.1. Employee Stock Option Plans | F-93 | ||||
29.2. Employee Stock Purchase Plans | F-95 | ||||
NOTE 30 SIGNIFICANT SUBSIDIARIES AS OF DECEMBER 31, 2004 AND 2003 | F-96 | ||||
NOTE 31 SUBSEQUENT EVENTS | F-97 | ||||
NOTE 32 SUPPLEMENTAL DISCLOSURES REQUIRED UNDER US GAAP AND SECURITIES AND EXCHANGE COMMISSION REGULATIONS | F-98 | ||||
32.1 Reconciliation of Shareholders’ Equity to US GAAP | F-98 | ||||
32.2 Reconciliation of Net Income (Loss) to US GAAP | F-99 | ||||
32.3 Reconciliation of Net Income (Loss) per Share to US GAAP | F-100 | ||||
32.4 Statement of Comprehensive Income (Loss) | F-101 | ||||
32.5 Reconciliation of Consolidated Statement of Cash Flows to US GAAP | F-102 | ||||
32.6 Summary of Significant Differences Between Accounting Policies Adopted by Vivendi Universal and US GAAP | F-102 |
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Page | ||||
32.7 Impairment Losses — SFAS 142 | F-109 | |||
32.8 Film and Television Costs | F-113 | |||
32.9 NBC-Universal Transaction Completed on May 11, 2004 | F-113 | |||
32.10 Agreement to acquire 16% of the share capital of Maroc Telecom (November 2004) | F-115 | |||
32.11 Purchase Price Allocation of the 26% Interest in SFR (2003) | F-116 | |||
32.12 Discontinued Operations | F-116 | |||
32.13 Divestiture of Investment in BSkyB (2002) | F-117 | |||
32.14 Accounting for Veolia Environnement (2002) | F-118 | |||
32.15 Employee Benefit Plans | F-122 | |||
32.16 Share Based Compensation | F-122 | |||
32.17 Restructuring Costs | F-123 |
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/s/ RSM Salustro Reydel | /s/ Barbier Frinault & Cie. A member firm of Ernst & Young International |
F-5
Table of Contents
December 31, | |||||||||||||||||
Note | 2004 | 2003 | 2002 | ||||||||||||||
(In millions of euros) | |||||||||||||||||
ASSETS | |||||||||||||||||
Goodwill, net | 4.1 | € | 15,555 | € | 17,789 | € | 20,062 | ||||||||||
Other intangible assets, net | 5 | 7,640 | 11,778 | 14,706 | |||||||||||||
Property, plant and equipment, net | 6 | 5,063 | 6,365 | 7,686 | |||||||||||||
Investments in equity affiliates | 7.1 | 880 | 1,083 | 1,903 | |||||||||||||
Investment in NBC Universal | 3.1 | 696 | — | — | |||||||||||||
Other investments in equity affiliates | 184 | 1,083 | 1,903 | ||||||||||||||
Other investments | 8 | 2,449 | 3,549 | 4,138 | |||||||||||||
Total long-term assets | 26.1 | 31,587 | 40,564 | 48,495 | |||||||||||||
Inventories and work-in-progress | 443 | 744 | 1,310 | ||||||||||||||
Accounts receivable and other | 9 | 6,545 | 8,809 | 9,892 | |||||||||||||
Deferred tax assets | 24.4 | 1,219 | 1,546 | 1,613 | |||||||||||||
Short-term loans receivable | 73 | 140 | 640 | ||||||||||||||
Marketable securities | 10 | 263 | 259 | 88 | |||||||||||||
Cash and cash equivalents | 17 | 3,158 | 2,858 | 7,295 | |||||||||||||
Total current assets | 11,701 | 14,356 | 20,838 | ||||||||||||||
Total Assets | 26.2 | € | 43,288 | € | 54,920 | € | 69,333 | ||||||||||
SHAREHOLDERS’ EQUITY AND LIABILITIES | |||||||||||||||||
Share capital | € | 5,899 | € | 5,893 | € | 5,877 | |||||||||||
Additional paid-in capital | 6,109 | 6,030 | 27,687 | ||||||||||||||
Retained earnings and others | 1,613 | — | (19,544 | ) | |||||||||||||
Total shareholders’ equity | 11 | 13,621 | 11,923 | 14,020 | |||||||||||||
Minority interests | 12 | 2,959 | 4,929 | 5,497 | |||||||||||||
Other equity | 13 | 1,000 | 1,000 | 1,000 | |||||||||||||
Deferred income | 100 | 560 | 579 | ||||||||||||||
Provisions | 14 | 2,236 | 2,294 | 3,581 | |||||||||||||
Long-term debt | 17 | 4,549 | 9,621 | 10,455 | |||||||||||||
Other non-current liabilities and accrued expenses | 18 | 3,826 | 2,407 | 3,894 | |||||||||||||
28,291 | 32,734 | 39,026 | |||||||||||||||
Accounts payable | 19 | 10,046 | 12,261 | 13,273 | |||||||||||||
Deferred taxes liabilities | 24.4 | 3,207 | 5,123 | 7,857 | |||||||||||||
Bank overdrafts and other short-term borrowings | 17 | 1,744 | 4,802 | 9,177 | |||||||||||||
Total current liabilities | 14,997 | 22,186 | 30,307 | ||||||||||||||
Total Shareholders’ Equity and Liabilities | € | 43,288 | € | 54,920 | € | 69,333 | |||||||||||
F-6
Table of Contents
Year Ended December 31, | ||||||||||||||||
Note | 2004(a) | 2003 | 2002 | |||||||||||||
(In millions of euros, except | ||||||||||||||||
per share amounts) | ||||||||||||||||
Revenues | 20.1 | € | 21,428 | € | 25,482 | € | 58,150 | |||||||||
Cost of revenues | 20.1 | (11,633 | ) | (15,268 | ) | (40,574 | ) | |||||||||
Selling, general and administrative expenses | (6,201 | ) | (6,812 | ) | (12,937 | ) | ||||||||||
Other operating expenses, net | (118 | ) | (93 | ) | (851 | ) | ||||||||||
Operating income | 26.2 | 3,476 | 3,309 | 3,788 | ||||||||||||
Financing expense | (455 | ) | (698 | ) | (1,333 | ) | ||||||||||
Other financial expenses, net of provisions | 22 | (247 | ) | (509 | ) | (3,409 | ) | |||||||||
Financing and other expenses, net | (702 | ) | (1,207 | ) | (4,742 | ) | ||||||||||
Income (loss) before gain (loss) on businesses sold, net of provisions, income tax, equity affiliates, goodwill amortization and minority interests | 2,774 | 2,102 | (954 | ) | ||||||||||||
Gain (loss) on businesses sold, net of provisions | 23 | (140 | ) | 602 | 1,049 | |||||||||||
Income tax | 24 | (400 | ) | 408 | (2,556 | ) | ||||||||||
Income (loss) before equity affiliates, goodwill amortization and minority interests | 2,234 | 3,112 | (2,461 | ) | ||||||||||||
Equity in earnings of sold subsidiaries | 2 | — | 1 | 17 | ||||||||||||
Income (loss) from equity affiliates | 7.1 | 219 | 71 | (294 | ) | |||||||||||
Veolia Environnement impairment | 7.1 | — | (203 | ) | — | |||||||||||
Goodwill amortization | 4.1 | (638 | ) | (1,120 | ) | (1,277 | ) | |||||||||
Impairment losses | 4.4 | (31 | ) | (1,792 | ) | (18,442 | ) | |||||||||
Income (loss) before minority interests | 1,784 | 69 | (22,457 | ) | ||||||||||||
Minority interests | 12 | (1,030 | ) | (1,212 | ) | (844 | ) | |||||||||
Net income (loss) | € | 754 | € | (1,143 | ) | € | (23,301 | ) | ||||||||
Basic earnings per share | € | 0.70 | € | (1.07 | ) | € | (21.43 | ) | ||||||||
Diluted earnings per share | € | 0.63 | € | (1.07 | ) | € | (21.43 | ) | ||||||||
�� | ||||||||||||||||
Weighted average common shares outstanding (in millions)(b) | 1,072.1 | 1,071.7 | 1,087.4 | |||||||||||||
Potential dilutive effect of outstanding financial instruments (in millions) | 11.4 | 127.0 | 137.9 | 146.3 |
(a) | Given the deconsolidation of Vivendi Universal Entertainment LLLP (VUE) as of May 11, 2004, the 2004 Consolidated Statement of Income includes 132 days of business for this entity (please refer to note 3.1. “NBC-Universal transaction completed on May 11, 2004”). | |
(b) | Excluding treasury shares recorded as a reduction in shareholders’ equity (2,441 shares as of December 31, 2004). |
F-7
Table of Contents
Year ended December 31, | |||||||||||||||||
Note | 2004 | 2003 | 2002 | ||||||||||||||
(In millions of euros) | |||||||||||||||||
Cash flow — operating activities: | |||||||||||||||||
Net income (loss) | € | 754 | € | (1,143 | ) | € | (23,301 | ) | |||||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization | 25.1 | 2,587 | 4,759 | 24,040 | |||||||||||||
Veolia Environnement impairment | — | 203 | — | ||||||||||||||
Financial provisions and provisions related to businesses sold (a) | (205 | ) | (1,007 | ) | 2,895 | ||||||||||||
Gain on sale of property, plant and equipment and financial assets | 281 | 47 | (1,748 | ) | |||||||||||||
Income (loss) from equity affiliates and businesses sold | (219 | ) | (72 | ) | 277 | ||||||||||||
Deferred taxes | 24 | (530 | ) | (842 | ) | 1,608 | |||||||||||
Minority interests | 12 | 1,030 | 1,212 | 844 | |||||||||||||
Dividends received from equity affiliates | 25.3 | 410 | 59 | 179 | |||||||||||||
Changes in working capital | 25.2 | 690 | 670 | (124 | ) | ||||||||||||
Net cash provided by operating activities | 4,798 | 3,886 | 4,670 | ||||||||||||||
Cash flow — investing activities: | |||||||||||||||||
Capital expenditures | 26.2 | (1,540 | ) | (1,552 | ) | (4,134 | ) | ||||||||||
Proceeds from sales of property, plant, equipment and intangible assets | 239 | 477 | 158 | ||||||||||||||
Purchases of investments | (407 | ) | (4,422 | ) | (4,792 | ) | |||||||||||
Sales of investments | 4,705 | 1,408 | 10,325 | (b) | |||||||||||||
Net decrease (increase) in financial receivables | 13 | 140 | (1,365 | )(b) | |||||||||||||
Sales (purchases) of marketable securities | (24 | ) | 49 | 213 | |||||||||||||
Net cash provided by (used for) investing activities | 2,986 | (3,900 | ) | 405 | |||||||||||||
Cash flow — financing activities: | |||||||||||||||||
Proceeds from issuance of borrowings and other long-term liabilities | 1,057 | 5,657 | 2,748 | ||||||||||||||
Principal payment on borrowings and other long-term liabilities | (3,448 | ) | (1,947 | ) | (1,854 | ) | |||||||||||
Net increase (decrease) in short-term borrowings and other | (3,294 | ) | (7,259 | ) | (5,991 | ) | |||||||||||
Notes mandatorily redeemable for new shares of Vivendi Universal | — | — | 767 | ||||||||||||||
Net proceeds from issuance of common shares | 18 | 71 | 1,622 | ||||||||||||||
Sales (purchases) of treasury shares | — | (98 | ) | 1,973 | |||||||||||||
Cash dividends paid by consolidated companies to their minority shareholders | 25.3 | (1,850 | ) | (737 | ) | (252 | ) | ||||||||||
Cash dividends paid by Vivendi Universal S.A. | 25.3 | — | — | (1,048 | ) | ||||||||||||
Cash payment to InterActiveCorp. | — | — | (1,757 | ) | |||||||||||||
Net cash provided by (used for) financing activities | (7,517 | ) | (4,313 | ) | (3,792 | ) | |||||||||||
Foreign currency translation adjustment | 33 | (110 | ) | 1,287 | |||||||||||||
Change in cash and cash equivalents | € | 300 | € | (4,437 | ) | € | 2,570 | ||||||||||
Cash and cash equivalents: | |||||||||||||||||
Beginning | € | 2,858 | € | 7,295 | € | 4,725 | |||||||||||
Ending | € | 3,158 | € | 2,858 | € | 7,295 | |||||||||||
Supplementary information | |||||||||||||||||
Net interests paid (all cash interests paid related to financing activities) | € | 430 | € | 621 | € | 1,145 | |||||||||||
Income tax paid | 24.2 | € | 580 | € | 1,242 | € | 1,252 |
(a) | Comprises financial provisions reported in “other financial expenses, net of provisions” (€52 million as of December 31, 2004; please refer to note 22 “Other financial expenses, net of provisions, for the years ended December 31, 2004, 2003 and 2002”) and provisions reported in “Gain (loss) on businesses sold, net of provisions” (€153 million as of December 31, 2004; please refer to note 23 “Gain (loss) on businesses sold, net of provisions, for the years ended December 31, 2004, 2003 and 2002”). |
(b) | In 2002, included the reclassification of a€662 million refund, previously recorded as “Sales of investments”. |
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Retained Earnings and Others | ||||||||||||||||||||||||||||||||||||
Foreign | ||||||||||||||||||||||||||||||||||||
Common shares | Additional | Currency | ||||||||||||||||||||||||||||||||||
Paid-in | Retained | Translation | Treasury | Shareholders’ | ||||||||||||||||||||||||||||||||
Note | Number | Amount | Capital | Earnings | Adjustment | Shares(a) | Total | Equity | ||||||||||||||||||||||||||||
(Thousands) | ||||||||||||||||||||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||||||||||||||
Balance at December 31, 2001 | 1,085,828 | € | 5,972 | € | 28,837 | € | 6,047 | € | 997 | € | (5,105 | ) | € | 1,939 | € | 36,748 | ||||||||||||||||||||
Net loss for the year 2002 | — | — | — | (23,301 | ) | — | — | (23,301 | ) | (23,301 | ) | |||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | (3,615 | ) | — | (3,615 | ) | (3,615 | ) | |||||||||||||||||||||||||
Dividends paid,€1 per share | — | — | (890 | ) | (421 | ) | — | — | (421 | ) | (1,311 | ) | ||||||||||||||||||||||||
Goodwill from business combination reversed | — | — | — | 1,001 | — | — | 1,001 | 1,001 | ||||||||||||||||||||||||||||
Conversion of ex-Seagram exchangeables | 11,463 | 63 | 848 | (887 | ) | — | — | (887 | ) | 24 | ||||||||||||||||||||||||||
Conversion of ex-Seagram stock options | 1,239 | 7 | 92 | — | — | — | — | 99 | ||||||||||||||||||||||||||||
Conversion of bonds, warrants, stock options and issuances under the employee stock purchase plan | 1,396 | 8 | 48 | — | — | — | — | 56 | ||||||||||||||||||||||||||||
Treasury shares and recombined stripped shares cancellation | (31,367 | ) | (173 | ) | (1,248 | ) | — | — | — | — | (1,421 | ) | ||||||||||||||||||||||||
Treasury shares and stripped shares allocation | — | — | — | 807 | — | 5,100 | 5,907 | 5,907 | ||||||||||||||||||||||||||||
Release of revaluation surplus and other | — | — | — | (167 | ) | — | — | (167 | ) | (167 | ) | |||||||||||||||||||||||||
Balance at December 31, 2002 | 1,068,559 | € | 5,877 | € | 27,687 | € | (16,921 | ) | € | (2,618 | ) | € | (5 | ) | € | (19,544 | ) | € | 14,020 | |||||||||||||||||
Net loss for the year 2003 | — | — | — | (1,143 | ) | — | — | (1,143 | ) | (1,143 | ) | |||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | (1,132 | ) | — | (1,132 | ) | (1,132 | ) | |||||||||||||||||||||||||
Appropriation of 2002 net income | — | — | (21,789 | ) | 21,789 | — | — | 21,789 | — | |||||||||||||||||||||||||||
Conversion of ex-Seagram exchangeables | 2,052 | 11 | 152 | (163 | ) | — | — | (163 | ) | — | ||||||||||||||||||||||||||
Conversion of bonds, warrants, stock options and issuances under the employee stock purchase plan | 3,361 | 19 | 18 | — | — | — | — | 37 | ||||||||||||||||||||||||||||
Stripped shares | 11.2 | (2,453 | ) | (14 | ) | (38 | ) | 52 | — | — | 52 | — | ||||||||||||||||||||||||
Treasury shares allocation | — | — | — | — | — | 5 | 5 | 5 | ||||||||||||||||||||||||||||
Release of revaluation surplus and other | — | — | — | 136 | — | — | 136 | 136 | ||||||||||||||||||||||||||||
Balance at December 31, 2003 | 1,071,519 | € | 5,893 | € | 6,030 | € | 3,750 | € | (3,750 | ) | € | — | € | — | € | 11,923 | ||||||||||||||||||||
Net income for the year 2004 | — | — | — | 754 | — | — | 754 | 754 | (b) | |||||||||||||||||||||||||||
Reversal of foreign currency translation adjustment related to 80% of the interests in VUE | 3.1 | — | — | — | — | 2,105 | — | 2,105 | 2,105 | (b) | ||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | (1,115 | ) | — | (1,115 | ) | (1,115 | ) | |||||||||||||||||||||||||
Impact of the implementation of CRC Rule 04-03 | 1.1 | — | — | — | (58 | ) | — | — | (58 | ) | (58 | ) | ||||||||||||||||||||||||
Impact of the implementation of Notice 2004-E issued by the Urgent Issues Taskforce | 1.2 | — | — | — | (29 | ) | — | — | (29 | ) | (29 | ) | ||||||||||||||||||||||||
Conversion of ex-Seagram exchangeables | 1,148 | 6 | 85 | (91 | ) | — | — | (91 | ) | — | ||||||||||||||||||||||||||
Conversion of bonds, warrants, stock options and issuances under the employee stock purchase plan | 1,115 | 6 | 12 | — | — | — | — | 18 | ||||||||||||||||||||||||||||
Stripped shares | 11.2 | (1,158 | ) | (6 | ) | (18 | ) | 24 | — | — | 24 | — | ||||||||||||||||||||||||
Release of revaluation surplus and other | — | — | — | 23 | — | — | 23 | 23 | ||||||||||||||||||||||||||||
Balance at December 31, 2004 | 1,072,624 | € | 5,899 | € | 6,109 | € | 4,373 | € | (2,760 | ) | € | — | € | 1,613 | € | 13,621 | ||||||||||||||||||||
(a) | Excluding stripped shares. |
(b) | In accordance with accounting principles, upon the divestiture of 80% of its interest in VUE, Vivendi Universal reclassified to net income, in proportion to the divested economic interest, the cumulative foreign translation adjustment related to VUE recorded as a reduction in shareholders’ equity. This reclassification resulted in a loss of€2,105 million, but had no impact on shareholders’ equity. |
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Basis of Presentation |
1.1. | New Accounting Policy: CRC Rule 04-03 Issued on May 4, 2004 Concerning the Consolidation of Special Purpose Entities |
1.2. | New Accounting Policy: Notice n° 2004-E Issued on October 13, 2004 by the CNC Urgent Issues Taskforce |
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December 31 | ||||||||||||||||||||||||
2004 | 2003 | 2002 | ||||||||||||||||||||||
Closing | Average | Closing | Average | Closing | Average | |||||||||||||||||||
Rate | Rate | Rate | Rate | Rate | Rate | |||||||||||||||||||
US Dollar | 1.362 | 1.235 | 1.245 | 1.120 | 1.030 | 0.934 | ||||||||||||||||||
Moroccan Dirham | 11.207 | 11.014 | 11.037 | 10.803 | 10.629 | 10.366 |
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• | The fair value of plan assets is deducted from accrued liabilities; | |
• | The actuarial gains and losses are amortized using the corridor method: actuarial gains and losses in excess of 10% of the greater of the obligation and the fair value of plan assets are divided by the average remaining service period of active employees (or, if all or almost all of a plan’s participants are inactive, the average remaining life expectancy of the inactive participants). |
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Derivative financial instruments |
Stock-based compensation |
Note 2. | Data Related to the Main Operations Divested in 2004, 2003 and 2002 (Unaudited) |
Year ended December 31, 2002 | ||||||||||||||||
Publishing | Publishing | |||||||||||||||
Veolia | activities | activities | ||||||||||||||
Environnement | divested in | divested in | ||||||||||||||
(a) | 2002(b) | 2003(b) | Total | |||||||||||||
(In millions in euros) | ||||||||||||||||
Revenues | € | 30,038 | € | 2,838 | € | 572 | € | 33,448 | ||||||||
Operating income (loss) | 1,911 | 268 | (14 | ) | 2,165 | |||||||||||
Financing and other expenses, net | (648 | ) | (116 | ) | (7 | ) | (771 | ) | ||||||||
Loss on businesses sold, net of provisions | (76 | ) | (50 | ) | (9 | ) | (135 | ) | ||||||||
Net income (loss) | € | 235 | € | 17 | € | (33 | ) | € | 219 | |||||||
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(a) | Veolia Environnement was fully consolidated until December 31, 2002 in the Consolidated Statement of Income and accounted for using the equity method after that date. |
(b) | Vivendi Universal Publishing activities divested in 2002 were presented on the line “equity in earnings of sold businesses” in the 2002 Consolidated Statement of Income. Vivendi Universal Publishing activities sold in 2003 comprised the Consumer Press Division (sold in February 2003) and presented on the line “Equity in earnings of sold businesses” in the 2003 Consolidated Statement of Income, and Comareg, (sold in May 2003). |
(*) | Before the closing of the NBC-Universal transaction, Vivendi Universal exercised its call option on Barry Diller’s 1.5% stake in VUE for $275 million (€226 million). |
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3.1.1.1. | Contribution of VUE to the Consolidated Statements of Financial Position, Income and Cash Flows |
May 11, | December 31, | |||||||||
2004 | 2003 | |||||||||
(In millions of euros) | ||||||||||
Consolidated Statement of Financial Position: | ||||||||||
Long-term assets | €16,373 | €14,034 | ||||||||
Current assets | 2,646 | 2,776 | ||||||||
including cash and cash equivalents | 614 | 124 | ||||||||
Total assets | €19,019 | €16,810 | ||||||||
Shareholders’ equity | 8,243 | 7,837 | ||||||||
Minority interests | 1,704 | 831 | ||||||||
Long-term debt | 4,320 | 1,135 | ||||||||
Other non-current liabilities and accrued expenses | 1,072 | 1,133 | ||||||||
Bank overdrafts and other short-term borrowings | — | 3,392 | ||||||||
Other short-term liabilities | 3,680 | 2,482 | ||||||||
Total shareholders’ equity and liabilities | €19,019 | €16,810 | ||||||||
Year ended December 31, | |||||||||
2004(a) | 2003 | ||||||||
132 days | 365 days | ||||||||
(In millions of euros) | |||||||||
Consolidated Statement of Income: | |||||||||
Revenues | € | 2,327 | € | 6,022 | |||||
Operating income | 337 | 931 | |||||||
Financing and other expenses, net | (80 | ) | (350 | ) | |||||
Gain on businesses sold, net of provisions | 28 | 18 | |||||||
Net income (loss) | € | 62 | € | (133 | ) | ||||
Consolidated Statement of Cash Flows: | |||||||||
Net cash provided by operating activities | € | 400 | € | 738 | |||||
Net cash provided by (used for) investing activities | (1,647 | ) | 127 | ||||||
Net cash provided by (used for) financing activities | 1,077 | (791 | ) | ||||||
Foreign currency translation adjustment | 47 | (19 | ) | ||||||
Change in cash and cash equivalents | € | (123 | ) | € | 55 | ||||
(a) | Contribution of VUE from January 1, 2004 to May 11, 2004, when this entity was deconsolidated. |
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Vivendi Universal’s | ||||||||||||||||
Total | share(a) | |||||||||||||||
In millions | In millions | In millions | In millions | |||||||||||||
of dollars | of euros | of dollars | of euros | |||||||||||||
Cash proceeds | $ | 3,650 | € | 3,073 | $ | 3,379 | € | 2,845 | ||||||||
Fair value of received interest in NBC(b) | 5,854 | 4,929 | 5,406 | 4,552 | ||||||||||||
Total consideration received | 9,504 | 8,002 | 8,785 | 7,397 | ||||||||||||
Carrying value of the divested assets | (6,670 | ) | (5,616 | ) | (6,670 | ) | (5,616 | ) | ||||||||
Cost of the defeasance of covenants of the VUE Class A preferred interests(c) | (780 | ) | (657 | ) | (720 | ) | (607 | ) | ||||||||
Net costs of the dividends on the VUE Class B preferred interests(d) | (354 | ) | (298 | ) | (327 | ) | (275 | ) | ||||||||
Other costs(e) | (436 | ) | (361 | ) | (415 | ) | (343 | ) | ||||||||
Transaction income before taxes | 1,264 | 1,070 | 653 | 556 | ||||||||||||
Taxes | (297 | ) | (250 | ) | (290 | ) | (244 | ) | ||||||||
Transaction income after taxes | 967 | 820 | 363 | 312 | ||||||||||||
Foreign currency translation adjustment reclassified to net income | (2,105 | ) | ||||||||||||||
Transaction loss, net | € | (1,793 | ) | |||||||||||||
(a) | After minority interests who indirectly held 7.7% of VUE’s interests. Their equity in the transaction income amounted to€508 million, of which€471 million was recorded by Vivendi Universal and allocated to minority interests and€37 million was received directly by the latter. Please refer to note 12 “Minority Interests in 2004, 2003 and 2002”. |
(b) | Under the terms of the NBC-Universal transaction, the fair value of NBCU was approximately $42 billion, of which approximately $29 billion was the fair value for NBC. |
(c) | Vivendi Universal issued a promissory note to USI, a subsidiary of NBCU, to reimburse 94.56% of the costs borne by NBCU in connection with the defeasance of covenants of the VUE Class A preferred interests. This promissory note was repaid on January 28, 2005. Please refer to note 17.1 “Financial net debt as of December 31, 2004”. |
(d) | Net present value of after-tax dividends of 3.6% per annum which will be paid to IAC. This liability is recorded in “other non-current liabilities and accrued expenses”. |
(e) | Includes, notably, non-cash adjustments relating to the NBC-Universal transaction of -$83 million (after minority interests) and a loss of $42 million (after minority interests), relating to the exercise by Vivendi Universal of its call option on Barry Diller’s 1.5% stake in VUE for $275 million. These costs also include expenses related to pensions, stock based compensations and other compensation (approximately -$116 million, after minority interests) as well as transaction costs (approximately -$114 million, after minority interests). |
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20% interest in NBC | ||||
(In millions of euros) | ||||
Net assets acquired (20% interest)(a) | € | 738 | ||
Identifiable intangible assets (definite life) | 157 | |||
Deferred tax liabilities, net | (85 | ) | ||
Other, net | 54 | |||
Goodwill amortized over 40 years | 4,065 | |||
Purchase price | € | 4,929 | ||
(a) | Includes, for an amount of€104 million, dividends received by Vivendi Universal corresponding to its equity (20% before USH minority interests) in the cash flow generated by NBC from October 1, 2003 to May 11, 2004. Please refer to note 25.3 “Cash dividends”. |
3.2. | Divestiture of 15% of Veolia Environnement, Part of Vivendi Universal’s 20.3% Stake — December 2004 |
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Year ended December 31, 2004 | ||||||||||||||||||||
Gain on | ||||||||||||||||||||
Financing | businesses | |||||||||||||||||||
Operating | and other | sold, net of | Income | Net | ||||||||||||||||
income | expenses, net | provisions | tax | income | ||||||||||||||||
(In millions of euros) | ||||||||||||||||||||
Divestitures of 15% of Veolia Environnement’s interests | ||||||||||||||||||||
Cash proceeds | € | — | € | — | € | 1,497 | € | — | € | 1,497 | ||||||||||
Fees | — | — | (15 | ) | — | (15 | ) | |||||||||||||
Carrying value of the divested shares and foreign currency translation adjustment reclassified in net income | — | — | (6 | ) | — | (6 | ) | |||||||||||||
Net accrual of long-term differed taxes previously activated | — | — | — | (161 | ) | (161 | ) | |||||||||||||
Derivative transactions | ||||||||||||||||||||
Reversal in net income of the premium related to the call options granted in November 2002 | — | 173 | — | — | 173 | |||||||||||||||
Other | — | (3 | ) | — | — | (3 | ) | |||||||||||||
Total | — | 170 | 1,476 | (161 | ) | 1,485 | ||||||||||||||
Termination of the obligations to guarantee compensations related to renewals | ||||||||||||||||||||
Remaining balance paid | (35 | ) | — | (159 | ) | — | (194 | ) | ||||||||||||
Other | — | — | (1 | ) | — | (1 | ) | |||||||||||||
Total | (35 | ) | — | (160 | ) | — | (195 | ) | ||||||||||||
Total impact of the transactions related to Veolia Environnement | € | (35 | ) | € | 170 | € | 1,316 | € | (161 | ) | € | 1,290 | ||||||||
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Media: |
• | Divestiture of Sportfive (March — consideration:€274 million). | |
• | Divestiture of “Flux-divertissement” Business of StudioExpand and Canal+ Benelux (June/August — consideration:€42 million). |
Telecommunications |
• | Accounting for Mauritel using the equity method (January) before full consolidation (July). |
Other: |
• | Abandonment of Internet operations (January). | |
• | Divestiture of Atica & Scipione (February — consideration:€41 million). | |
• | Divestiture of Kencell (May — consideration:€190 million). | |
• | Divestiture of Monaco Telecom (June — consideration:€169 million). | |
• | Divestiture of UCI Cinemas (October — consideration:€170 million). |
• | Divestiture of Canal+ Technologies (January — consideration:€191 million). | |
• | Divestiture of Telepiù (April — consideration:€831 million). | |
• | Divestiture of Canal+ Nordic (October — consideration:€55 million). |
• | Acquisition of a 26% interest in Cegetel Groupe S.A. (January — total consideration paid:€4 billion). Please refer to note 4.2 “Purchase price allocation of the 26% interest in SFR (formerly known as Cegetel Groupe S.A.)”. | |
• | Merger of Transtel, Cofira and SFR into Cegetel Groupe S.A. (December). | |
• | Merger of Cegetel S.A. and Telecom Développement (December). Please refer to note 30(c) “Significant subsidiaries as of December 31, 2004 and 2003”. |
• | Divestiture of Consumer Press Division (February — consideration:€200 million). | |
• | Divestiture of Comareg (May — consideration:€135 million). | |
• | Divestiture of fixed line telecommunication in Hungary (May — consideration:€325 million). | |
• | Dilution in Sogecable (July). Please refer to note 10(a) “Marketable securities as of December 31, 2004, 2003 and 2002”. | |
• | Dilution in UGC (December). Please refer to note 7.1(e) “Equity method investments”. |
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Goodwill, | Accumulated | Goodwill, | ||||||||||||||
Note | Gross | Amortization | Net | |||||||||||||
(In millions of euros) | ||||||||||||||||
Balance at December 31, 2002 | € | 51,750 | € | (31,688 | ) | € | 20,062 | |||||||||
Acquisition of 26% interest in SFR | 2,260 | — | 2,260 | |||||||||||||
Divestiture of Telepiù | (1,754 | ) | 1,754 | — | ||||||||||||
Divestiture of Canal+ Technologies | (2,336 | ) | 2,290 | (46 | ) | |||||||||||
Deconsolidation of Sogecable | (593 | ) | 418 | (175 | ) | |||||||||||
Divestiture of Canal+ Nordic | (541 | ) | 496 | (45 | ) | |||||||||||
Final purchase price allocation of IAC entertainment assets | 4.3 | (114 | ) | — | (114 | ) | ||||||||||
Other changes in scope of consolidation(a) | 4.4 | (1,152 | ) | 1,016 | (136 | ) | ||||||||||
Amortization(b)(c) | — | (1,120 | ) | (1,120 | ) | |||||||||||
Impairment losses | 4.4 | — | (1,273 | ) | (1,273 | ) | ||||||||||
Foreign currency translation adjustment and other | (6,359 | ) | 4,735 | (1,624 | ) | |||||||||||
Balance at December 31, 2003 | € | 41,161 | € | (23,372 | ) | € | 17,789 | |||||||||
Divestiture of 80% of VUE(d) | 3.1 | (12,486 | ) | 7,229 | (5,257 | ) | ||||||||||
Acquisition of 20% of NBC(d) | 3.1 | 4,065 | — | 4,065 | ||||||||||||
Divestiture of Sportfive | (200 | ) | 200 | — | ||||||||||||
Divestiture of Kencell | (37 | ) | 37 | — | ||||||||||||
Finalization of the divestiture of Canal+ Benelux | (582 | ) | 582 | — | ||||||||||||
Abandonment of Internet operations | (371 | ) | 369 | (2 | ) | |||||||||||
Divestiture of Atica & Scipione | (55 | ) | 17 | (38 | ) | |||||||||||
Divestiture of Monaco Telecom | (108 | ) | 25 | (83 | ) | |||||||||||
Other changes in scope of consolidation | 8 | 17 | 25 | |||||||||||||
Amortization(b) | — | (638 | ) | (638 | ) | |||||||||||
Impairment losses | 4.4 | — | (26 | ) | (26 | ) | ||||||||||
Foreign currency translation adjustment and other | (690 | ) | 410 | (280 | ) | |||||||||||
Balance at December 31, 2004 | € | 30,705 | € | (15,150 | ) | € | 15,555 | |||||||||
(a) | In 2003, included the divestiture of other publishing and Internet operations and reclassification of impairment losses reducing other intangible assets and other assets. |
(b) | Amortization expenses incurred during the period are traditionally recorded on this line. |
(c) | In 2003, included an exceptional amortization of€129 million at Canal+ Group, recorded to offset the reversal of a provision at operating income level in the first quarter of 2003. This provision was accrued in 2000 in connection with the purchase price allocation of Canal+ Group. |
(d) | In 2004, following the divestiture (from an accounting standpoint) of 80% of VUE, net goodwill relating to Vivendi Universal’s residual 20% interest in VUE (i.e.,€1,348 million) was reclassified to goodwill and added to the goodwill generated by the investment in NBC (€4,065 million). As of May 12, 2004, goodwill (gross) in respect of Vivendi Universal’s stake in NBCU amounted to€5,413 million. It has been amortized over 40 years since that date. The purchase price allocation in respect of the 20% interest in NBC is presented in note 3.1. “NBC-Universal transaction completed on May 11, 2004”. |
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26% interest in SFR | ||||
(In millions of euros) | ||||
Net assets acquired (26% interest) | € | 837 | ||
SFR tradename | 264 | |||
Market share | 650 | |||
Goodwill amortized over 40 years | 2,260 | |||
Purchase price | € | 4,011 | ||
Entertainment Assets of | ||||
InterActiveCorp | ||||
(In millions of euros) | ||||
Film costs | € | 891 | ||
Accounts receivable | 343 | |||
Property, plant and equipment | 39 | |||
Identifiable intangible assets | 1,200 | |||
Accounts payable and accrued expenses | (287 | ) | ||
Obligations for program rights and film costs | (447 | ) | ||
Other, net | (98 | ) | ||
Goodwill amortized over 40 years | 9,494 | |||
Purchase price | € | 11,135 | ||
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Cumulative | Cumulative Goodwill Impairment as of December 31, 2004 | |||||||||||||||||||||||||||||||||||
Goodwill, | Amortization | Goodwill, | ||||||||||||||||||||||||||||||||||
Gross as of | as of | Changes in scope | Total | Net as of | ||||||||||||||||||||||||||||||||
December 31, | December 31, | Recorded | Recorded | Recorded | Recorded | of consolidation | impairment | December 31, | ||||||||||||||||||||||||||||
2004 | 2004 | in 2001 | in 2002 | in 2003 | in 2004 | and other | losses | 2004 | ||||||||||||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||||||||||||||
Canal+ Group | € | 9,476 | € | (377 | ) | € | (6,000 | ) | € | (5,436 | ) | € | (165 | ) | € | (21 | ) | € | 6,073 | (a) | € | (5,549 | ) | € | 3,550 | |||||||||||
Universal Music Group | 10,816 | (1,342 | ) | (3,100 | ) | (5,300 | ) | (1,100 | ) | (5 | ) | 3,646 | (5,859 | ) | 3,615 | |||||||||||||||||||||
Vivendi Universal Games | 91 | (55 | ) | — | — | — | — | (15 | ) | (15 | ) | 21 | ||||||||||||||||||||||||
Media | 20,383 | (1,774 | ) | (9,100 | ) | (10,736 | ) | (1,265 | ) | (26 | ) | 9,704 | (11,423 | ) | 7,186 | |||||||||||||||||||||
SFR Cegetel | 3,656 | (453 | ) | — | (206 | )(b) | — | — | — | (206 | ) | 2,997 | ||||||||||||||||||||||||
Maroc Telecom | 1,779 | (64 | ) | (700 | ) | (300 | ) | — | — | 10 | (990 | ) | 725 | |||||||||||||||||||||||
Telecom | 5,435 | (517 | ) | (700 | ) | (506 | ) | — | — | 10 | (1,196 | ) | 3,722 | |||||||||||||||||||||||
NBC Universal at Holding & Corporate | 4,722 | (75 | ) | — | — | — | — | — | — | 4,647 | ||||||||||||||||||||||||||
Non core operations | 165 | (2 | ) | (1,094 | ) | (700 | ) | (8 | ) | — | 1,639 | (163 | ) | — | ||||||||||||||||||||||
Total Vivendi Universal excl. VUE | 30,705 | (2,368 | ) | (10,894 | ) | (11,942 | ) | (1,273 | ) | (26 | ) | 11,353 | (12,782 | ) | 15,555 | |||||||||||||||||||||
Vivendi Universal Entertainment | — | — | (1,300 | ) | (6,500 | ) | — | — | 7,800 | — | — | |||||||||||||||||||||||||
Total Vivendi Universal | € | 30,705 | € | (2,368 | ) | € | (12,194 | )(c) | € | (18,442 | ) | € | (1,273 | ) | € | (26 | ) | € | 19,153 | € | (12,782 | )(d) | € | 15,555 | ||||||||||||
(a) | Including€5,405 million in respect of 2003, and notably the deconsolidation of Canal+ Technologies (€2,206 million), Telepiù (€1,691 million), Canal+ Nordic (€439 million) and Sogecable (€388 million). |
(b) | In 2002, Telecom Développement only. |
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(c) | In 2001, impairment losses as reported in the Consolidated Statement of Income (€13,515 million) included exceptional goodwill amortization of€521 million and impairment losses in respect of equity affiliates of€800 million (recorded as a deduction from the carrying value of the related investments). |
(d) | Before minority interests and impairment of goodwill previously recorded as a reduction in shareholders’ equity (i.e., a notional write-off of€1.7 billion accrued, cumulatively, in 2001 and 2002). |
2004 | 2003 | |||||||||||
Perpetual | Perpetual | |||||||||||
Method | Discount Rate | Growth Rate | Method | Discount Rate | Growth Rate | |||||||
Canal+ Group | ||||||||||||
Pay TV(a) | DCF and guideline companies | 9.0% - 10.0% | 2.0% - 2.5% | DCF and guideline companies | 8.0% - 10.0% | 2.0% - 3.5% | ||||||
StudioCanal | DCF and guideline companies | 9.0% - 10.0% | -8.0% | DCF and guideline companies | 9.0% | 2.0% | ||||||
Sportfive | not applicable | — | — | stock market price | — | — | ||||||
Other international assets under divestiture(b) | not applicable | — | — | net realizable value | — | — | ||||||
Universal Music Group | } | 9.0% | 2.2% - 2.5% | } | 10.0% | 4.0% | ||||||
} | DCF and guideline companies | } | DCF and guideline companies | |||||||||
Vivendi Universal Games | } | 11.5% | 3.5% | } | 11.0% | 6.0% | ||||||
SFR Cegetel | Guideline companies | — | — | based on the acquisition of BT Group’s 26% interest in January 2003 | ||||||||
Maroc Telecom | stock market price | — | — | DCF and guideline companies | 12.6% | 2.5% | ||||||
NBC Universal | DCF of dividends and exit | — | — | not applicable | — | — | ||||||
Other International assets in telecommunications and internet | not applicable | — | — | net realizable value | ||||||||
Vivendi Universal Entertainment | not applicable | — | — | based on the transaction with GE signed in October 2003 to combine VUE and NBC |
(a) | Mainly includes Canal+ S.A., CanalSatellite. |
(b) | In 2003, mainly included Canal+ Nordic, Canal+ Benelux — Nederland and certain StudioExpand subsidiaries, divested in 2004. |
Balance at | ||||||||||||||||||||||||||||
December 31, | Foreign Currency | Changes in Scope | Balance at | |||||||||||||||||||||||||
Addition/ | Divestiture/ | Translation | of Consolidation | December 31, | ||||||||||||||||||||||||
2002 | 2003 | Allocation | Reversal | Adjustment | and Other | 2004 | ||||||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||||||
Other intangible assets | € | 22,168 | € | 23,171 | € | 2,951 | € | (413 | ) | € | (462 | ) | € | (8,175 | ) | € | 17,072 | |||||||||||
Accumulated amortization | (7,462 | ) | (11,393 | ) | (1,311 | ) | 9 | 372 | 2,891 | (9,432 | ) | |||||||||||||||||
Other intangible assets, net | € | 14,706 | € | 11,778 | € | 1,640 | € | (404 | ) | € | (90 | ) | € | (5,284 | ) | € | 7,640 | |||||||||||
Music publishing rights, catalogs and advances to artists(a)(b) | € | 4,134 | € | 2,512 | € | (157 | ) | € | (22 | ) | € | (244 | ) | € | (3 | ) | € | 2,086 | ||||||||||
Audiovisual rights | 1,424 | 722 | 1,871 | (c) | (381 | ) | — | (52 | ) | 2,160 | ||||||||||||||||||
Trade names, market shares, editorial resources(d) | 2,903 | 2,827 | (7 | ) | — | 75 | (1,865 | ) | 1,030 | |||||||||||||||||||
Film costs, net of amortization | 3,367 | 2,615 | (36 | ) | — | 123 | (2,356 | ) | 346 | |||||||||||||||||||
Telecom licenses(e) | 989 | 947 | (45 | ) | — | (6 | ) | (15 | ) | 881 | ||||||||||||||||||
Software | 627 | 696 | 27 | 9 | (1 | ) | (24 | ) | 707 | |||||||||||||||||||
Other | 1,262 | 1,459 | (13 | ) | (10 | ) | (37 | ) | (969 | ) | 430 | |||||||||||||||||
Other intangible assets, net | € | 14,706 | € | 11,778 | € | 1,640 | € | (404 | ) | € | (90 | ) | € | (5,284 | ) | € | 7,640 | |||||||||||
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(a) | Includes€176 million,€246 million and€301 million as of December 31, 2004, 2003 and 2002, respectively, for net long-term advances to artists which are recoverable against future royalties. |
(b) | These assets include acquired intangibles, primarily those acquired with the Seagram acquisition in December 2000, recorded on the basis of third-party appraisals obtained at that time of $5,358 million and subsequently impaired as a result of updated appraisals in 2002 (impairment of€2,125 million) and 2003 (impairment of€270 million). The valuations were determined by applying the DCF method to the entire portfolio of recordings of artists under contract with UMG and recordings of artists no longer under contract, but for which UMG has continuing rights. |
(c) | Includes broadcasting rights obtained by Canal+ in December 2004 to the French National Football League 1 of€1,800 million. |
(d) | The following table presents a breakdown of trade names, markets shares and editorial resources: |
Balance at | Balance at | Balance at | |||||||||||
December 31, | December 31, | December 31, | |||||||||||
2002 | 2003 | 2004 | |||||||||||
(In millions of euros) | |||||||||||||
Telepiù trade name | € | 576 | € | — | € | — | |||||||
SFR market share | — | 650 | 650 | ||||||||||
SFR trade name | — | 264 | 264 | ||||||||||
Universal trade name and Universal Studio Networks channel business step-up | 1,276 | 988 | (*) | — | |||||||||
MSO agreements — USA Networks | 858 | 710 | — | ||||||||||
Indefinite-lived intangible assets | 2,710 | 2,612 | 914 | ||||||||||
Other | 193 | 215 | (*) | 116 | |||||||||
Trade names, market shares, editorial resources | € | 2,903 | € | 2,827 | € | 1,030 | |||||||
(*) | In 2003, after impairment losses recorded against VUE and VUG trade names (€75 million and€61 million, respectively). Please refer to note 4.4 “Impairment losses”. |
(e) | Includes Maroc Telecom’s license for€340 million (amortized on a straight-line basis over 15 years) and upfront fee of€619 million paid by SFR in September 2001 in connection with the acquisition of a 20-year license to operate a 3G UMTS mobile telephony service in France. The latter is amortized on a straight-line basis since the service commencement mid-June 2004 and up to termination (i.e., August 2021). |
Balance at | Foreign | Changes in | ||||||||||||||||||||||||||||||
December 31, | Currency | Scope of | Balance at | |||||||||||||||||||||||||||||
Addition/ | Divestiture/ | Translation | Consolidation | December 31, | ||||||||||||||||||||||||||||
Note | 2002 | 2003 | Allocation | Reversal | Adjustment | and Other | 2004 | |||||||||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||||||||||
Property, plant and equipment | € | 14,981 | € | 13,866 | € | 1,153 | € | (1,195 | ) | € | 12 | € | (1,832 | ) | € | 12,004 | ||||||||||||||||
Accumulated depreciation | (7,295 | ) | (7,501 | ) | (1,230 | ) | 933 | 12 | 845 | (6,941 | ) | |||||||||||||||||||||
Property, plant and equipment, net | € | 7,686 | € | 6,365 | € | (77 | ) | € | (262 | ) | € | 24 | € | (987 | ) | € | 5,063 | |||||||||||||||
Land | € | 859 | € | 696 | € | 4 | € | (205 | ) | € | 5 | € | (173 | ) | € | 327 | ||||||||||||||||
Buildings | 1,839 | 1,414 | (5 | ) | (59 | ) | 22 | (567 | ) | 805 | ||||||||||||||||||||||
Machinery and equipment | 3,316 | 2,944 | (195 | ) | 15 | (13 | ) | 125 | 2,876 | |||||||||||||||||||||||
Construction-in-progress | 394 | 626 | 249 | 8 | 4 | (506 | ) | 381 | ||||||||||||||||||||||||
Defeased real estate | 1.1 | — | — | (10 | ) | — | — | 245 | 235 | |||||||||||||||||||||||
Other | 1,278 | 685 | (120 | ) | (21 | ) | 6 | (111 | ) | 439 | ||||||||||||||||||||||
Property, plant and equipment, net | € | 7,686 | € | 6,365 | € | (77 | ) | € | (262 | ) | € | 24 | € | (987 | ) | € | 5,063 | |||||||||||||||
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Net Value of Equity | Proportionate Share of | |||||||||||||||||||||||||||||||||||||||
Voting Interest | Affiliates | Net Income (Loss) | ||||||||||||||||||||||||||||||||||||||
December 31, | December 31, | Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||
Note | 2004 | 2003 | 2002 | 2004 | 2003 | 2002 | 2004 | 2003(a) | 2002 | |||||||||||||||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||||||||||||||||||
NBC Universal | 3.1 | 20.0 | % | — | — | € | 696 | € | — | € | — | € | 172 | € | — | € | — | |||||||||||||||||||||||
Veolia Environnement(b) | 3.2 | — | 20.4 | % | 20.4 | % | — | — | 304 | 19 | (170 | ) | — | |||||||||||||||||||||||||||
UC Development Partners(c)(d) | — | 50.0 | % | 50.0 | % | — | 287 | 358 | (5 | ) | (13 | ) | (6 | ) | ||||||||||||||||||||||||||
Sundance Channels(c) | — | 50.0 | % | 50.0 | % | — | 143 | 156 | — | 20 | — | |||||||||||||||||||||||||||||
Universal Studios Florida(c)(d) | — | 50.0 | % | 50.0 | % | — | 120 | 147 | 2 | (1 | ) | 1 | ||||||||||||||||||||||||||||
UGC(e) | 37.8 | % | 37.8 | % | 58.0 | % | 77 | 61 | 47 | 15 | (3 | ) | (12 | ) | ||||||||||||||||||||||||||
UGC Ciné Cité(e) | — | — | 15.6 | % | — | — | 31 | — | — | — | ||||||||||||||||||||||||||||||
Sportfive(f) | — | 46.4 | % | 46.4 | % | — | 201 | 294 | 5 | 8 | 2 | |||||||||||||||||||||||||||||
Elektrim Telekomunikacja | 7.3 | 49.0 | % | 49.0 | % | 49.0 | % | — | — | — | — | — | (115 | ) | ||||||||||||||||||||||||||
Telecom Développement(g) | — | — | 49.9 | % | — | — | 286 | — | (1 | ) | 5 | |||||||||||||||||||||||||||||
Xfera Moviles | — | — | 26.2 | % | — | — | — | — | — | (59 | ) | |||||||||||||||||||||||||||||
Société Financière de Distribution | 49.0 | % | 49.0 | % | 49.0 | % | 18 | 16 | — | 2 | 98 | — | ||||||||||||||||||||||||||||
Other investments(h) | na | * | na | * | na | * | 89 | 255 | 280 | 9 | (183 | ) | (110 | ) | ||||||||||||||||||||||||||
€ | 880 | € | 1,083 | € | 1,903 | € | 219 | € | (245 | ) | € | (294 | ) | |||||||||||||||||||||||||||
* | na: not applicable. |
(a) | In 2003, included net income from equity affiliates (€71 million) and Veolia Environnement impairment loss (- €203 million) as reported in the Consolidated Statement of Income, as well as impairment losses recognized in respect of certain VUE affiliates (- €113 million). Please refer to note 4.4 “Impairment losses”. |
(b) | Following the various transactions implemented in December 2004, and the resulting decrease in ownership interest to 5.3%, Vivendi Universal’s interest in Veolia Environnement was deconsolidated from December 9, 2004. |
(c) | VUE’s subsidiaries, deconsolidated on May 11, 2004. |
(d) | In 2002 and 2003, no shareholder had the majority voting interest in these companies; however, shareholders exercised substantive participating rights that enabled them to veto or block decisions taken by the subsidiary’s board. Vivendi Universal consequently accounted for its interest in UC Development Partners and Universal Studio Florida using the equity method. |
(e) | Vivendi Universal and the family shareholders of UGC Group signed an agreement on December 31, 2003, modifying the structure of UGC S.A.’s equity capital. Under the terms of the agreement, Vivendi Universal surrendered its participation in UGC Ciné Cité and holds 37.8% of UGC S.A.’s equity capital. After the elimination of UGC S.A. treasury stocks, Vivendi Universal will hold 40% of UGC S.A.’s equity capital, and the family shareholders’ stake will be 54.79%. Vivendi Universal holds five of the fourteen seats on the UGC Board of Directors. Accordingly, this investment is accounted for using the equity method. |
(f) | Participation sold in 2004. |
(g) | In December 2003, Cegetel S.A. (fixed line operator, subsidiary of SFR) and Telecom Développement (network operator, subsidiary of SNCF, in which SFR has minority interests) were merged into a new entity named Cegetel S.A.S. The capital of this company is held 65% by SFR and 35% by SNCF. Please refer to note 30 (c) “Significant Subsidiaries as of December 31, 2004 and 2003”. |
(h) | Other investments consist of various entities whose aggregate net value is below€24 million as of December 31, 2004. |
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7.2. | Change in Equity Affiliates During the Year |
Net Value of | Net Value of | |||||||||||||||||||||||
Equity Affiliates | Changes in | Proportionate | Foreign | Equity Affiliates | ||||||||||||||||||||
as of | Scope of | Share of Net | Currency | as of | ||||||||||||||||||||
December 31, | Consolidation | Income | Dividends | Translation | December 31, | |||||||||||||||||||
2003 | and Other | (Loss) | Received | Adjustment | 2004 | |||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||
NBC Universal | €— | €790 | €172 | €(151 | ) | €(115 | ) | €696 | ||||||||||||||||
Veolia Environnement | — | (2 | ) | 19 | (45 | ) | 28 | — | ||||||||||||||||
Elektrim Telekomunikacja | — | — | — | — | — | — | ||||||||||||||||||
UC Development Partners | 287 | (258 | ) | (5 | ) | (2 | ) | (22 | ) | — | ||||||||||||||
Sundance Channels | 143 | (143 | ) | — | — | — | — | |||||||||||||||||
Universal Studios Florida | 120 | (114 | ) | 2 | — | (8 | ) | — | ||||||||||||||||
UGC | 61 | — | 15 | — | 1 | 77 | ||||||||||||||||||
Sportfive | 201 | (206 | ) | 5 | — | — | — | |||||||||||||||||
Other | 271 | (221 | ) | 11 | (10 | ) | 56 | 107 | ||||||||||||||||
€1,083 | €(154 | ) | €219 | €(208 | ) | €(60 | ) | €880 | ||||||||||||||||
7.3. | Equity Accounting of Elektrim Telekomunikacja |
7.3.1. | Investment in Elektrim Telekomunikacja Sp. z.o.o (Elektrim Telekomunikacja) |
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7.3.2. | Accounting for Elektrim Telekomunikacja |
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7.3.3. | Book Value of the Investment in Elektrim Telekomunikacja |
December 31, | |||||||||||||||||
Note | 2002 | 2003 | 2004 | ||||||||||||||
(In millions of euros) | |||||||||||||||||
Elektrim Telekomunikacja shares accounted for using the equity method (49%)(a) | |||||||||||||||||
Gross value | 1,209 | 1,209 | 1,209 | ||||||||||||||
Impairment losses | (1,209 | ) | (1,209 | ) | (1,209 | ) | |||||||||||
Net value | — | — | — | ||||||||||||||
Loans to Elektrim Telekomunikacja | 8.3 | ||||||||||||||||
Gross value | 595 | 588 | 622 | ||||||||||||||
Provisions | (203 | ) | (243 | ) | (243 | ) | |||||||||||
Net value(b) | 392 | 345 | 379 | ||||||||||||||
Total investment in Elektrim Telekomunikacja | |||||||||||||||||
Gross value | 1,804 | 1,797 | 1,831 | ||||||||||||||
Provisions | (1,412 | ) | (1,452 | ) | (1,452 | ) | |||||||||||
Net value | 392 | 345 | 379 | ||||||||||||||
Elektrim Telekomunikacja shares accounted for using the cost method (2%)(c) | 8.1 | ||||||||||||||||
Gross value | 105 | ||||||||||||||||
Provisions | (105 | ) | |||||||||||||||
Net value | — |
(a) | Vivendi Universal investments in Elektrim Telekomunikacja and Carcom. |
(1) | In the “Unaudited Supplemental Financial Data” section of this document, for information purposes only, Vivendi Universal provides unaudited supplemental financial data to enable shareholders to assess the impact of the accounting method adopted. This supplemental data presents: |
• | the unaudited financial statements of Elektrim Telekomunikacja in condensed format; |
• | the unaudited estimated impact of the proportionate consolidation of Elektrim Telekomunikacja. |
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(b) | Shareholder advances granted to Elektrim Telekomunikacja by Vivendi Universal (€309 million, net of valuation allowances as of December 31, 2004) and by VTI (€70 million as of December 31, 2004). |
(c) | Pursuant to CRC Rule 04-03, Ymer, a special purpose entity, is fully consolidated by Vivendi Universal with effect from January 1, 2004. Its assets consist of a 2% equity interest in Elektrim Telekomunikacja. Please refer to notes 1.1.2. “Ymer”, 7.3.2 “Accounting for Elektrim Telekomunikacja”, and 8.1 “Investments accounted for using the cost method”. |
7.3.4. | Disputes with Deutsche Telekom and Elektrim |
1. The transfer by Elektrim to Elektrim Telekomunikacja of the PTC shares was ineffective, and the PTC shares were to be considered as never having ceased to form part of the assets of Elektrim; | |
2. The said sale did not constitute a material breach of Article 16.1 of the Shareholders Agreement between DT and Elektrim, but such a material breach would occur if Elektrim did not recover the shares concerned within two months of service of the Award; | |
3. The Tribunal dismissed DT’s claim for a declaration that an Economic Impairment on the part of Elektrim existed; and | |
4. The Tribunal did not have jurisdiction over Elektrim Telekomunikacja, and the claims concerning Elektrim Telekomunikacja could not be entertained in the context of the arbitration; |
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Year Ended December 31, 2004 | ||||||||||||||||||||
NBC | Veolia | Elektrim | ||||||||||||||||||
Universal | Environnement(a) | Telekomunikacja | Other | Total | ||||||||||||||||
(In millions of euros) | ||||||||||||||||||||
Revenues | € | 8,139 | € | 24,673 | (b) | € | — | € | 977 | € | 33,789 | |||||||||
Operating income (loss) | 1,427 | 1,499 | (b)(*) | (26 | ) | 37 | 2,937 | |||||||||||||
Net income | 958 | 55 | (b) | 153 | 66 | 1,232 | ||||||||||||||
Shareholders’ equity | 17,468 | na | * | (671 | ) | 363 | 17,160 | |||||||||||||
Long-term debt | 1,837 | (c) | na | * | 622 | (d) | 93 | 2,552 | ||||||||||||
Other non-current liabilities and accrued expenses | 3,033 | na | * | — | 186 | 3,219 | ||||||||||||||
Current liabilities | 3,587 | na | * | 66 | 338 | 3,991 | ||||||||||||||
Total shareholders’ equity and liabilities | € | 25,925 | € | — | € | 17 | € | 980 | € | 26,922 | ||||||||||
Year Ended December 31, 2003 | ||||||||||||||||
Veolia | Elektrim | |||||||||||||||
Environnement(a) | Telekomunikacja | Other | Total | |||||||||||||
(In millions of euros) | ||||||||||||||||
Revenues | € | 28,603 | € | 702 | € | 5,588 | € | 34,893 | ||||||||
Operating income | 1,751 | (*) | 89 | 77 | 1,917 | |||||||||||
Net income (loss) | (2,055 | ) | (81 | ) | 68 | (2,068 | ) | |||||||||
Shareholders’ equity | 3,575 | (108 | ) | 1,902 | 5,369 | |||||||||||
Long-term debt | 12,586 | 960 | 2,864 | 16,410 | ||||||||||||
Other non-current liabilities and accrued expenses | 7,469 | 147 | (d) | 402 | 8,018 | |||||||||||
Current liabilities | 15,291 | (e) | 295 | 1,649 | 17,235 | |||||||||||
Total shareholders’ equity and liabilities | € | 38,921 | € | 1,294 | € | 6,817 | € | 47,032 | ||||||||
Year Ended December 31, 2002 | ||||||||||||||||
Veolia | Elektrim | |||||||||||||||
Environnement(a) | Telekomunikacja | Other | Total | |||||||||||||
(In millions of euros) | ||||||||||||||||
Revenues | na | * | € | 749 | € | 6,050 | € | 6,799 | ||||||||
Operating income (loss) | na | * | 125 | (241 | ) | (116 | ) | |||||||||
Net loss | na | * | (1,063 | ) | (891 | ) | (1,954 | ) | ||||||||
Shareholders’ equity | 6,330 | — | (f) | 2,735 | 9,065 | |||||||||||
Long-term debt | 12,913 | 1,132 | (d) | 3,774 | 17,819 | |||||||||||
Other non-current liabilities and accrued expenses | 7,372 | 175 | 621 | 8,168 | ||||||||||||
Current liabilities | 15,403 | (e) | 428 | 4,238 | 20,069 | |||||||||||
Total shareholders’ equity and liabilities | € | 42,018 | € | 1,735 | € | 11,368 | € | 55,121 | ||||||||
* | na: not applicable (Please refer to footnote(a)). |
(a) | Veolia Environnement was accounted for as an equity method investment on December 31, 2002 up to December 9, 2004. This company was previously fully consolidated in Vivendi Universal’s statement of income. Consequently, the year ended December 31, 2004 does not include information from this affiliate’s statement of financial position while the year ended December 31, 2002 does not include information from this affiliate’s statement of income. |
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(b) | The revenues presented were published by Veolia Environnement in theBulletin des Annonces Légales Obligatoires (BALO) on February 9, 2005. Operating income and net income were estimated for the period January 1, 2004 to December 9, 2004, when Veolia Environnement was deconsolidated by Vivendi Universal. |
(c) | Does not include VUE Class B preferred interests which are classified in minority interests. |
(d) | Before elimination of loans to Elektrim Telekomunikacja by Vivendi Universal (€552 million as of December 31, 2004) and Vivendi Telecom International (€70 million as of December 31, 2004). Please refer to note 8.3 “Portfolio investment — other”. |
(e) | Including€3,827 million and€3,796 million short-term financial debt as of December 31, 2003 and 2002, respectively. |
(f) | After taking into consideration the impairment losses recorded by Vivendi Universal in 2002. |
December 31, | ||||||||||||||||
Note | 2004 | 2003 | 2002 | |||||||||||||
(In millions of euros) | ||||||||||||||||
Investments accounted for using the cost method | 8.1 | € | 157 | € | 415 | € | 378 | |||||||||
Portfolio investments — securities | 8.2 | 612 | 1,673 | 1,899 | ||||||||||||
Portfolio investments — other | 8.3 | 1,680 | 1,461 | 1,861 | ||||||||||||
Total other investments | € | 2,449 | € | 3,549 | € | 4,138 | ||||||||||
December 31, 2004 | ||||||||||||||||||||||||
Valuation | Estimated | |||||||||||||||||||||||
Note | Interest | Gross | Allowance | Net | Fair Value | |||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||
Elektrim S.A.(a) | 15.04 | % | € | 124 | € | (111 | ) | € | 13 | € | 13 | |||||||||||||
Elektrim Telekomunikacja | 7.3 | 2.0 | % | 105 | (105 | ) | — | na | * | |||||||||||||||
Other | na | * | 797 | (653 | ) | 144 | na | * | ||||||||||||||||
€ | 1,026 | € | (869 | ) | € | 157 | na | * | ||||||||||||||||
December 31, 2003 | ||||||||||||||||||||||||
Valuation | Estimated | |||||||||||||||||||||||
Note | Interest | Gross | Allowance | Net | Fair Value | |||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||
Elektrim S.A.(a) | 15.04 | % | € | 124 | € | (119 | ) | € | 5 | € | 5 | |||||||||||||
LBI fund | 7.3 | na | * | 105 | (100 | ) | 5 | na | * | |||||||||||||||
Mauritel(b) | 30 | 14.3 | % | 38 | (5 | ) | 33 | na | * | |||||||||||||||
Other | na | * | 864 | (492 | ) | 372 | na | * | ||||||||||||||||
€ | 1,131 | € | (716 | ) | € | 415 | na | * | ||||||||||||||||
December 31, 2002 | ||||||||||||||||||||||||
Valuation | Estimated | |||||||||||||||||||||||
Interest | Gross | Allowance | Net | Fair Value | ||||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||
Elektrim S.A.(a) | 10.04 | % | € | 96 | € | (91 | ) | € | 5 | € | 5 | |||||||||||||
Mauritel | 18.9 | % | 42 | — | 42 | na | * | |||||||||||||||||
Other | na | * | 695 | (364 | ) | 331 | na | * | ||||||||||||||||
€ | 833 | € | (455 | ) | € | 378 | na | * | ||||||||||||||||
* | na: not applicable. |
(a) | In February 2003, Vivendi Universal increased its stake in Elektrim S.A. to 15.04% after settlement of a share carrying operation concerning 4.99% of this company. |
(b) | Entity consolidated since January 1, 2004. |
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December 31, 2004 | ||||||||||||||||||||||||||||||||
Foreign | ||||||||||||||||||||||||||||||||
Currency | Gross | Gross | Estimated | |||||||||||||||||||||||||||||
Translation | Valuation | Net | Unrealized | Unrealized | Fair | |||||||||||||||||||||||||||
Note | Cost | Adjustment | Allowance | Value | Gains | Losses | Value | |||||||||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||||||||||
DuPont(a) | € | 853 | € | (272 | ) | € | — | € | 581 | € | 11 | € | — | € | 592 | |||||||||||||||||
Veolia Environnement(b) | 3.2 | 20 | — | — | 20 | 553 | — | 573 | ||||||||||||||||||||||||
Other | 13 | (2 | ) | — | 11 | — | — | 11 | ||||||||||||||||||||||||
Total portfolio investments — securities | € | 886 | € | (274 | ) | € | — | € | 612 | € | 564 | € | — | € | 1,176 | |||||||||||||||||
December 31, 2003 | ||||||||||||||||||||||||||||
Foreign | ||||||||||||||||||||||||||||
Currency | Gross | Gross | Estimated | |||||||||||||||||||||||||
Translation | Valuation | Net | Unrealized | Unrealized | Fair | |||||||||||||||||||||||
Cost | Adjustment | Allowance | Value | Gains | Losses | Value | ||||||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||||||
DuPont(a) | € | 853 | € | (216 | ) | € | (31 | ) | € | 606 | € | — | € | — | € | 606 | ||||||||||||
InterActiveCorp(c) | 1,323 | (285 | ) | — | 1,038 | 360 | — | 1,398 | ||||||||||||||||||||
Other | 31 | (2 | ) | — | 29 | — | — | 29 | ||||||||||||||||||||
Total portfolio investments — securities | € | 2,207 | € | (503 | ) | € | (31 | ) | € | 1,673 | € | 360 | € | — | € | 2,033 | ||||||||||||
December 31, 2002 | ||||||||||||||||||||||||||||
Foreign | ||||||||||||||||||||||||||||
Currency | Gross | Gross | Estimated | |||||||||||||||||||||||||
Translation | Valuation | Net | Unrealized | Unrealized | Fair | |||||||||||||||||||||||
Cost | Adjustment | Allowance | Value | Gains | Losses | Value | ||||||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||||||
DuPont(a) | € | 853 | € | (68 | ) | € | (173 | ) | € | 612 | € | 65 | € | — | € | 677 | ||||||||||||
InterActiveCorp(c) | 1,323 | (68 | ) | — | 1,255 | — | (26 | ) | 1,229 | |||||||||||||||||||
Softbank Capital Partners(d) | 230 | — | (230 | ) | — | — | — | — | ||||||||||||||||||||
Other | 33 | (1 | ) | — | 32 | — | — | 32 | ||||||||||||||||||||
Total portfolio investments — securities | € | 2,439 | € | (137 | ) | € | (403 | ) | € | 1,899 | € | 65 | € | (26 | ) | € | 1,938 | |||||||||||
(a) | Represents 16,444,062 shares, with a carrying amount of $794 million. The listed market price of DuPont as of December 31, 2004 was $49.05 per share. |
(b) | Following the various transactions which occurred in December 2004, Vivendi Universal’s stake in Veolia Environnement fell to 5.3%, leading to the deconsolidation of Veolia Environnement as of December 9, 2004. The listed market price of Veolia Environnement as of December 31, 2004 was€26.63. |
(c) | Represents 18,181,308 shares of common stock, with a carrying amount of $374 million, 13,430,000 Class B shares, with a carrying amount of $276 million, and 25,000,000 common shares acquired from Liberty Media as part of Vivendi Universal’s acquisition of IAC’s entertainment assets in May 2002. These preferred interests were transferred to NBCU in May 2004 (please refer to note 3.1 “NBC-Universal transaction completed on May 11, 2004”). |
(d) | Sold in 2003. |
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December 31, 2004 | ||||||||||||||||
Valuation | ||||||||||||||||
Note | Gross | Allowance | Net | |||||||||||||
(In millions of euros) | ||||||||||||||||
Deposits related to the Qualified Technological Equipment operations | 1.1 | € | 865 | € | — | 865 | ||||||||||
Loan to Elektrim Telekomunikacja granted by Vivendi Universal | 7.3 | 552 | (243 | ) | 309 | |||||||||||
Loan to Elektrim Telekomunikacja granted by VTI(a) | 7.3 | 70 | — | 70 | ||||||||||||
Premium related to the derivative transaction on Veolia Environnement shares | 3.2 | 68 | — | 68 | ||||||||||||
Other(b) | 455 | (87 | ) | 368 | ||||||||||||
Total portfolio investments — other | € | 2,010 | € | (330 | ) | € | 1,680 | |||||||||
December 31, 2003 | ||||||||||||||||
Valuation | ||||||||||||||||
Note | Gross | Allowance | Net | |||||||||||||
(In millions of euros) | ||||||||||||||||
Loan to Elektrim Telekomunikacja granted by Vivendi Universal | 7.3 | € | 520 | € | (243 | ) | € | 277 | ||||||||
Other | 1,475 | (291 | ) | 1,184 | ||||||||||||
Total portfolio investments — other | € | 1,995 | € | (534 | ) | € | 1,461 | |||||||||
December 31, 2002 | ||||||||||||||||
Valuation | ||||||||||||||||
Note | Gross | Allowance | Net | |||||||||||||
(In millions of euros) | ||||||||||||||||
InterActiveCorp warrants(c) | € | 929 | € | (454 | ) | € | 475 | |||||||||
Loan to Elektrim Telekomunikacja granted by Vivendi Universal | 7.3 | 525 | (203 | ) | 322 | |||||||||||
UGC bonds(d) | 7.1 | 153 | (119 | ) | 34 | |||||||||||
Loan to Veolia Environnement(e) | 27.1 | 120 | — | 120 | ||||||||||||
Other | 1,116 | (206 | ) | 910 | ||||||||||||
Total portfolio investments — other | € | 2,843 | € | (982 | ) | € | 1,861 | |||||||||
(a) | This loan was previously recorded in short-term loans receivable for€67 million and€68 million as of December 31, 2003 and 2002, respectively. |
(b) | Other portfolio investments with an individual carrying value of less than€60 million. |
(c) | These warrants were received in connection with the acquisition of IAC’s entertainment assets in May 2002 and sold back to IAC in 2003. |
(d) | These bonds were redeemed in December 2003 in connection with the UGC transactions. |
(e) | This loan, granted in connection with the Vinci exchangeable bond issue in 2001, was repaid on September 30, 2003. |
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December 31, | ||||||||||||||||||
Note | 2004 | 2003 | 2002 | |||||||||||||||
(In millions of euros) | ||||||||||||||||||
Trade accounts receivable | € | 6,850 | (a) | € | 9,122 | € | 9,601 | |||||||||||
Accounts receivable write-offs | (1,854 | ) | (2,285 | ) | (1,492 | ) | ||||||||||||
Total trade accounts receivable, net | € | 4,996 | € | 6,837 | € | 8,109 | ||||||||||||
Other | 1,549 | (a) | 1,972 | 1,783 | ||||||||||||||
including tax receivable resulting from 2004 impact of the Consolidated Global Profit Tax System | 24.1 | 464 | — | — | ||||||||||||||
including premium on VUE class A and B preferred interests(b) | 3.1 | — | 577 | 734 | ||||||||||||||
Total accounts receivable and other | € | 6,545 | € | 8,809 | € | 9,892 | ||||||||||||
(a) | Of which€7,683 million is due in 2005. |
(b) | Corresponded, on the date of acquisition of IAC’s entertainment assets (May 7, 2002), to the difference between the fair value (calculated using a 7.5% discount rate) and the redemption value of the Class A and B preferred interests. This difference ($756 million), which was similar to a premium, was amortized on a straight-line basis to maturity date (i.e., 2022). These preferred interests were transferred to NBCU in May 2004. |
December 31, 2004 | ||||||||||||||||
Valuation | ||||||||||||||||
Note | Gross | Allowance | Net | |||||||||||||
(In millions of euros) | ||||||||||||||||
Sogecable(a) | € | 249 | € | — | € | 249 | ||||||||||
Treasury shares | 11.1 | 13 | (4 | ) | 9 | |||||||||||
Unlisted marketable securities(b) | 5 | — | 5 | |||||||||||||
€ | 267 | € | (4 | ) | € | 263 | ||||||||||
December 31, 2003 | ||||||||||||||||
Valuation | ||||||||||||||||
Note | Gross | Allowance | Net | |||||||||||||
(In millions of euros) | ||||||||||||||||
Sogecable(a) | € | 249 | € | — | € | 249 | ||||||||||
Treasury shares | 11.1 | 6 | (5 | ) | 1 | |||||||||||
Unlisted marketable securities(b) | 9 | — | 9 | |||||||||||||
€ | 264 | € | (5 | ) | € | 259 | ||||||||||
December 31, 2002 | ||||||||||||||||
Valuation | ||||||||||||||||
Note | Gross | Allowance | Net | |||||||||||||
(In millions of euros) | ||||||||||||||||
Treasury shares | 11.1 | € | 38 | € | (12 | ) | € | 26 | ||||||||
Listed marketable securities | 10 | — | 10 | |||||||||||||
LBI Fund | 7.3/8.1 | 104 | (66 | ) | 38 | |||||||||||
Unlisted marketable securities(b) | 64 | (50 | ) | 14 | ||||||||||||
€ | 216 | € | (128 | ) | € | 88 | ||||||||||
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(a) | In July 2003, Sogecable made a capital increase subscribed exclusively by a third party. As a consequence, Canal+ Group’s ownership interest in this affiliate decreased from 21.3% to 16.4%. Vivendi Universal ceased to equity account for Sogecable on October 1, 2003. This transaction generated a dilution profit of€71 million. |
(b) | Consists principally of shares in investment companies. |
Number of | % of | Average | Gross | ||||||||||||||||||||||
Treasury | Share | Price per | Carrying | Valuation | Net Carrying | ||||||||||||||||||||
Shares | Capital | Share | Value | allowance | Value | ||||||||||||||||||||
(In euros) | (In millions of euros) | ||||||||||||||||||||||||
At December 31, 2002 | 562,375 | 0.05 | % | € | 77.9 | € | 43 | € | (16 | ) | € | 27 | |||||||||||||
Sales to employees exercising their stock options | (318,932 | ) | — | 69.6 | (22 | ) | 10 | (12 | ) | ||||||||||||||||
Acquisitions on the market in March 2003 | 8,681,432 | — | 13.0 | 113 | — | 113 | |||||||||||||||||||
Transfer to former Rondor shareholders in connection with the settlement of the contingent purchase price for Rondor Music | (8,844,289 | ) | — | 13.5 | (128 | ) | 14 | (114 | ) | ||||||||||||||||
Other, net | 7,230 | — | na | * | ns | ** | (13 | ) | (13 | ) | |||||||||||||||
At December 31, 2003 | 87,816 | 0.01 | % | € | 68.3 | € | 6 | € | (5 | ) | € | 1 | |||||||||||||
Acquisitions on the market | 2,797,000 | — | 21.8 | 61 | — | 61 | |||||||||||||||||||
Exercise of Vivendi Universal’s stock options | 2,020,516 | — | 21.3 | 43 | — | 43 | |||||||||||||||||||
Sales to employees exercising their stock options | (4,333,765 | ) | — | 22.4 | (97 | ) | — | (97 | ) | ||||||||||||||||
Other, net | (1,469 | ) | — | na | * | ns | ** | 1 | ns | ** | |||||||||||||||
At December 31, 2004 | 570,098 | 0.05 | % | € | 22.3 | € | 13 | € | (4 | ) | € | 9 | |||||||||||||
of which classified under marketable securities principally hedging stock options granted to employees | 567,657 | 13 | (4 | ) | 9 | ||||||||||||||||||||
of which recorded as a reduction in shareholders’ equity | 2,441 | ns | ** | ns | ** | ns | ** |
* | na: not applicable. |
** | ns: not significant. |
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December 31, | ||||||||||||||||
Note | 2004 | 2003 | 2002 | |||||||||||||
(In number of shares) | ||||||||||||||||
Vivendi Universal convertible 1.25% (OCEANE), fully repaid in cash in January 2004 | — | — | 18,820,004 | |||||||||||||
Bonds convertible and exchangeable into Vivendi Universal shares (OCEANE) (January 2005)(a) | — | 16,654,225 | 16,654,225 | |||||||||||||
Notes mandatorily redeemable for new shares of Vivendi Universal (November 2005)(b) | 13 | 78,672,470 | 78,675,630 | 78,678,206 | ||||||||||||
Exchangeable bonds issued in connection with the merger of Vivendi and Seagram in respect of Seagram’s former stock subscription plans granted to officers, management and employees | 21,866,411 | 23,389,853 | 26,675,827 | |||||||||||||
Stock options (subscription plans) | 26,505,520 | 19,193,741 | 5,518,568 | |||||||||||||
Total potential dilutive effect | 127,044,401 | 137,913,449 | 146,346,830 | |||||||||||||
(a) | In April 1999, Veolia Environnement, a then wholly-owned subsidiary of Vivendi Universal, issued 10,516,606 convertible and exchangeable bonds (OCEANE) to the public for an aggregate amount of€2,850 million, maturing January 1, 2005. Upon the Veolia Environnement IPO in July 2000, some of the bonds were converted into Veolia Environnement shares. After this date, outstanding bonds were only convertible or exchangeable into Vivendi Universal shares (which may be treasury or newly-issued shares), on the exercise by bondholders of their options, or redeemable in cash at the maturity date. Veolia Environnement redeemed these bonds for cash in January 2005. |
(b) | Had bondholders redeemed these bonds as of December 31, 2004, they would have received 72,822,148 shares. |
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December 31, | |||||||||||||||||
Note | 2004 | 2003 | 2002 | ||||||||||||||
(In millions of euros) | |||||||||||||||||
Opening balance | € | 4,929 | € | 5,497 | € | 10,208 | |||||||||||
Changes in scope of consolidation | (1,625 | )(a) | (622 | )(b) | (4,229 | )(c) | |||||||||||
Minority interests in earnings of consolidated subsidiaries(d) | 1,030 | 1,212 | 844 | ||||||||||||||
Minority interests in the capital gain realized on the divestiture of 80% of VUE | 3.1 | 471 | — | — | |||||||||||||
Dividends paid by consolidated subsidiaries | 25.3 | (1,849 | ) | (737 | ) | (200 | ) | ||||||||||
Foreign currency translation adjustment | 36 | (443 | ) | (798 | ) | ||||||||||||
Other changes, net | (33 | ) | 22 | (328 | ) | ||||||||||||
Closing balance | € | 2,959 | € | 4,929 | € | 5,497 | |||||||||||
(a) | In 2004, mainly includes a€1,492 million reduction related to the divestiture (from an accounting standpoint) of 80% of VUE. |
(b) | In 2003, included a€819 million reduction related to the acquisition of BT Group’s 26% interest in SFR (formerly known as Cegetel Groupe S.A.). |
(c) | In 2002, included the 5.44% and 1.50% common interests in VUE and the related put options issued to IAC and Barry Diller, respectively, in connection with Vivendi Universal’s acquisition of the entertainment assets of IAC. The values of the put options granted to IAC and Barry Diller were determined by an independent third party valuation firm and amounted to $0 and $75 million respectively. |
(d) | Mainly concerns minority interests in SFR Cegetel and Maroc Telecom. |
Balance at | Balance at | Reversals | Changes in scope | Balance at | ||||||||||||||||||||||||||||
December 31, | December 31, | and changes | of consolidation | December 31, | ||||||||||||||||||||||||||||
Note | 2002 | 2003 | Addition | Utilization | in estimate | and other | 2004 | |||||||||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||||||||||
Employee benefits | € | 240 | € | 675 | (a)(b) | € | 86 | € | (99 | ) | € | (35 | ) | € | (96 | ) | € | 531 | (a) | |||||||||||||
Financial provisions(c) | 1,519 | 834 | 78 | (80 | ) | (31 | ) | (40 | ) | 761 | ||||||||||||||||||||||
Litigation | 28.5 | 320 | 348 | 123 | (89 | ) | (37 | ) | 56 | 401 | ||||||||||||||||||||||
Restructuring costs | 16 | 57 | 169 | 101 | (101 | ) | (6 | ) | (19 | ) | 144 | |||||||||||||||||||||
Warranties and customer care | 78 | 44 | 8 | (10 | ) | (1 | ) | 11 | 52 | |||||||||||||||||||||||
Other | 1,367 | 224 | 253 | (149 | ) | (82 | ) | 101 | 347 | |||||||||||||||||||||||
Provisions | € | 3,581 | € | 2,294 | € | 649 | € | (528 | ) | € | (192 | ) | € | 13 | € | 2,236 | ||||||||||||||||
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(a) | Employee benefits break down as follows: |
Balances at | ||||||||||||
December 31, | ||||||||||||
Note | 2003 | 2004 | ||||||||||
(In millions of | ||||||||||||
euros) | ||||||||||||
Employee benefit plan | 15 | € | 425 | € | 384 | |||||||
Postretirement benefits | 15 | 154 | 147 | |||||||||
Severance costs | 59 | — | ||||||||||
Other | 37 | — | ||||||||||
Employee benefits | € | 675 | € | 531 | ||||||||
(b) | After the reclassification of other employee benefits previously accounted for as “other non-current liabilities and accrued expenses”. |
(c) | Financial provisions break down as follows: |
Balance at | Balance at | Reversals | Changes in scope | Balance at | ||||||||||||||||||||||||||||
December 31, | December 31, | and changes | of consolidation | December 31, | ||||||||||||||||||||||||||||
Note | 2002 | 2003 | Addition | Utilization | in estimate | and other | 2004 | |||||||||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||||||||||
Divestiture of Telepiù | 23 | € | 360 | € | — | € | — | € | — | € | — | € | — | € | — | |||||||||||||||||
Premium paid on call options on treasury shares | 22 | 226 | 226 | — | — | — | — | 226 | ||||||||||||||||||||||||
Mark-to-market of interest rate swaps | 22 | 261 | 204 | — | (70 | ) | — | — | 134 | |||||||||||||||||||||||
Redemption premiums on exchangeable bonds | 22/28.5 | 138 | 67 | 22 | — | — | — | 89 | ||||||||||||||||||||||||
Put option on interest in Cegetel S.A.S. granted to SNCF | 22/28.3 | — | 85 | 35 | — | — | — | 120 | ||||||||||||||||||||||||
Put options on treasury shares | 22 | 104 | — | — | — | — | — | — | ||||||||||||||||||||||||
LineInvest total return swap | 22 | 97 | — | — | — | — | — | — | ||||||||||||||||||||||||
Other | 333 | 252 | 21 | (10 | ) | (31 | ) | (40 | ) | 192 | ||||||||||||||||||||||
Financial provisions | € | 1,519 | € | 834 | € | 78 | € | (80 | ) | € | (31 | ) | € | (40 | ) | € | 761 | |||||||||||||||
Pension Benefits | Postretirement Benefits | |||||||||||||||||||||||
2004 | 2003 | 2002 | 2004 | 2003 | 2002 | |||||||||||||||||||
Discount rate | 5.1 | % | 5.4 | % | 5.7 | % | 5.3 | % | 5.6 | % | 6.0 | % | ||||||||||||
Expected return on plan assets | 6.4 | % | 6.5 | % | 7.2 | % | na | * | na | * | na | * | ||||||||||||
Rate of compensation increase | 3.8 | % | 3.6 | % | 3.5 | % | 3.6 | % | 3.7 | % | 3.7 | % | ||||||||||||
Expected residual active life (in years) | 12.9 | 13.5 | 12.5 | 11.7 | 6.7 | 16.1 |
* | na: not applicable. |
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Minimum | Maximum | |||||||
Equity | 30 | % | 57 | % | ||||
Property | 0 | % | 1 | % | ||||
Fixed Interest | 44 | % | 56 | % | ||||
Cash | 6 | % | 7 | % |
December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
Equity | 46.4 | % | 38.5 | % | 39.1 | % | ||||||
Property | 0.3 | % | 0.4 | % | 0.3 | % | ||||||
Fixed Interest | 47.0 | % | 54.6 | % | 57.0 | % | ||||||
Cash | 6.3 | % | 6.5 | % | 3.6 | % | ||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
Pension | Postretirement | |||||||
Benefits | Benefits | |||||||
(In millions of euros) | ||||||||
2005 | €109 | €16 | ||||||
2006 | 85 | 16 | ||||||
2007 | 82 | 16 | ||||||
2008 | 82 | 15 | ||||||
2009 | 76 | 15 | ||||||
2010-2014 | 369 | 70 |
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Postretirement | ||||||||||||||||||||||||
Pension Benefits | Benefits | |||||||||||||||||||||||
2004 | 2003 | 2002 | 2004 | 2003 | 2002 | |||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||
Change in benefit obligation | ||||||||||||||||||||||||
Benefit obligation at beginning of the year | € | 1,439 | € | 1,580 | € | 2,712 | € | 206 | € | 219 | € | 274 | ||||||||||||
Service cost | 27 | 45 | 54 | 1 | — | 2 | ||||||||||||||||||
Interest cost | 72 | 80 | 109 | 11 | 12 | 17 | ||||||||||||||||||
Plan participants’ contributions | 1 | 2 | 2 | — | — | — | ||||||||||||||||||
Business combinations | — | — | 19 | 9 | — | — | ||||||||||||||||||
Divestitures | — | (47 | ) | (1,088 | ) | — | — | (65 | ) | |||||||||||||||
Curtailments | (22 | ) | (8 | ) | (2 | ) | — | — | — | |||||||||||||||
Settlements | (126 | ) | (8 | ) | (118 | ) | — | — | — | |||||||||||||||
Transfers | 2 | 27 | 54 | — | 4 | — | ||||||||||||||||||
Plan amendments | 1 | (12 | ) | 64 | — | (3 | ) | — | ||||||||||||||||
Actuarial loss, net | 58 | 62 | 109 | 8 | 28 | 38 | ||||||||||||||||||
Benefits paid | (132 | ) | (114 | ) | (139 | ) | (16 | ) | (17 | ) | (16 | ) | ||||||||||||
Special termination benefits | 11 | — | 4 | — | — | — | ||||||||||||||||||
Other (foreign currency translation adjustments) | (55 | ) | (168 | ) | (200 | ) | (18 | ) | (37 | ) | (31 | ) | ||||||||||||
Benefit obligation at the end of the year | € | 1,276 | € | 1,439 | € | 1,580 | € | 201 | € | 206 | € | 219 | ||||||||||||
Change in fair value of plan assets | ||||||||||||||||||||||||
Fair value of plan assets at the beginning of the year | € | 769 | € | 808 | € | 2,049 | € | — | € | — | € | — | ||||||||||||
Actual return on plan assets | 52 | 84 | (85 | ) | — | — | — | |||||||||||||||||
Employers’ contributions | 131 | 71 | 96 | 16 | 18 | 16 | ||||||||||||||||||
Plan participants’ contributions | 1 | 2 | 2 | — | — | — | ||||||||||||||||||
Business combinations | — | — | 14 | — | — | — | ||||||||||||||||||
Divestitures | — | (25 | ) | (980 | ) | — | — | — | ||||||||||||||||
Settlements | (107 | ) | (8 | ) | (118 | ) | — | — | — | |||||||||||||||
Transfers | 1 | 22 | 75 | — | — | — | ||||||||||||||||||
Benefits paid | (132 | ) | (114 | ) | (138 | ) | (16 | ) | (18 | ) | (16 | ) | ||||||||||||
Other (foreign currency translation adjustments) | (30 | ) | (71 | ) | (107 | ) | — | — | — | |||||||||||||||
Fair value of plan assets at the end of the year | € | 685 | € | 769 | € | 808 | € | — | € | — | € | — | ||||||||||||
Funded status | ||||||||||||||||||||||||
Underfunded obligation (fair value of the invested funds) | € | (591 | ) | € | (670 | ) | € | (772 | ) | € | (201 | ) | € | (206 | ) | € | (219 | ) | ||||||
Unrecognized actuarial (gain) loss | 324 | 356 | 424 | 55 | 54 | 54 | ||||||||||||||||||
Unrecognized prior service benefit | 25 | 27 | 39 | (1 | ) | (2 | ) | (4 | ) | |||||||||||||||
Impacts of transition obligation, prior service costs and actuarial gains recognized with a different timing under local regulations and others | — | — | (1 | ) | — | — | — | |||||||||||||||||
Net accrued liability | € | (242 | ) | € | (287 | ) | € | (310 | ) | € | (147 | ) | € | (154 | ) | € | (169 | ) | ||||||
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Postretirement | ||||||||||||||||||||||||
Pension Benefits | Benefits | |||||||||||||||||||||||
2004 | 2003 | 2002 | 2004 | 2003 | 2002 | |||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||
Reconciliation to consolidated statement of financial position (gross impact) | ||||||||||||||||||||||||
Assets | € | 142 | € | 138 | € | 166 | € | — | € | — | € | — | ||||||||||||
Liabilities | (384 | ) | (425 | ) | (476 | ) | (147 | ) | (154 | ) | (169 | ) | ||||||||||||
€ | (242 | ) | € | (287 | ) | € | (310 | ) | € | (147 | ) | € | (154 | ) | € | (169 | ) | |||||||
Postretirement | ||||||||||||||||||||||||
Pension Benefits | Benefits | |||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||
2004 | 2003 | 2002 | 2004 | 2003 | 2002 | |||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||
Benefit obligation | ||||||||||||||||||||||||
US companies | € | 567 | € | 665 | € | 826 | € | 183 | € | 189 | € | 201 | ||||||||||||
French companies | 62 | 60 | 79 | — | — | — | ||||||||||||||||||
Other | 647 | € | 714 | 675 | 18 | 17 | 18 | |||||||||||||||||
€ | 1,276 | € | 1,439 | € | 1,580 | € | 201 | € | 206 | € | 219 | |||||||||||||
Fair value of plan assets | ||||||||||||||||||||||||
US companies | € | 292 | € | 301 | € | 369 | € | — | € | — | € | — | ||||||||||||
French companies | 32 | 23 | 25 | — | — | — | ||||||||||||||||||
Other | 361 | 445 | 414 | — | — | — | ||||||||||||||||||
€ | 685 | € | 769 | € | 808 | € | — | € | — | € | — | |||||||||||||
December 31, | |||||||||||||
2004 | 2003 | 2002 | |||||||||||
(In millions of euros) | |||||||||||||
US companies | |||||||||||||
Accumulated benefit obligation | € | 566 | € | 644 | € | 799 | |||||||
Projected benefit obligation | 567 | 664 | 825 | ||||||||||
Plan assets at fair value | 292 | 300 | 368 | ||||||||||
UK companies | |||||||||||||
Accumulated benefit obligation | 299 | 272 | 310 | ||||||||||
Projected benefit obligation | 303 | 276 | 336 | ||||||||||
Plan assets at fair value | 218 | 197 | 243 | ||||||||||
French companies | |||||||||||||
Accumulated benefit obligation | 34 | 38 | 56 | ||||||||||
Projected benefit obligation | 43 | 47 | 69 | ||||||||||
Plan assets at fair value | 11 | 4 | 10 |
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December 31, | |||||||||||||
2004 | 2003 | 2002 | |||||||||||
(In millions of euros) | |||||||||||||
Other companies | |||||||||||||
Accumulated benefit obligation | 188 | 230 | 218 | ||||||||||
Projected benefit obligation | 196 | 245 | 232 | ||||||||||
Plan assets at fair value | 1 | 53 | 39 | ||||||||||
Total | |||||||||||||
Accumulated benefit obligation | € | 1,087 | € | 1,184 | € | 1,383 | |||||||
Projected benefit obligation | € | 1,109 | € | 1,232 | € | 1,462 | |||||||
Plan assets at fair value | € | 522 | € | 554 | € | 660 |
Equity | Property | Fixed Interest | Cash | Total | ||||||||||||||||
Corporate Supplementary Plan | 10.0 | % | 3.0 | % | 71.8 | % | 15.2 | % | 100.0 | % | ||||||||||
SFR Supplementary Plan | 4.8 | % | 3.9 | % | 91.3 | % | 0.0 | % | 100.0 | % | ||||||||||
Canal+ Group IDR* Plan | 14.5 | % | 12.0 | % | 73.5 | % | 0.0 | % | 100.0 | % |
* | IDR (Indemnité de départ en retraite): Indemnities payable on retirement. |
Note 16. | Restructuring Costs as of December 31, 2004, 2003 and 2002 |
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Universal | Vivendi | Vivendi | Total | |||||||||||||||||||||||||||||||||||
Canal+ | Music | Universal | SFR | Maroc | Holding & | Non Core | Universal | Vivendi | ||||||||||||||||||||||||||||||
Group | Group | Games | Cegetel | Telecom | Corporate | Operations | Entertainment | Universal | ||||||||||||||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||||||||||||||||
Employee termination reserves | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2002 | € | — | € | — | € | 3 | € | — | € | — | € | — | € | 23 | € | — | € | 26 | ||||||||||||||||||||
Changes in scope of consolidation and purchase accounting adjustments | — | — | (6 | ) | — | — | — | (1 | ) | — | (7 | ) | ||||||||||||||||||||||||||
Additions | 32 | — | 16 | — | 2 | — | 27 | — | 77 | |||||||||||||||||||||||||||||
Utilization | — | — | (2 | ) | — | — | — | (16 | ) | — | (18 | ) | ||||||||||||||||||||||||||
Reversals | — | — | — | — | — | — | (10 | ) | — | (10 | ) | |||||||||||||||||||||||||||
Balance at December 31, 2003 | € | 32 | € | — | € | 11 | € | — | € | 2 | € | — | € | 23 | € | — | € | 68 | ||||||||||||||||||||
Changes in scope of consolidation and purchase accounting adjustments | (2 | ) | — | (1 | ) | — | (2 | ) | — | (23 | ) | — | (28 | ) | ||||||||||||||||||||||||
Additions | 3 | — | 23 | — | — | — | — | — | 26 | |||||||||||||||||||||||||||||
Utilization | (20 | ) | — | (18 | ) | — | — | — | — | — | (38 | ) | ||||||||||||||||||||||||||
Reversals | (6 | ) | — | — | — | — | — | — | — | (6 | ) | |||||||||||||||||||||||||||
Balance at December 31, 2004 | € | 7 | € | — | € | 15 | € | — | € | — | € | — | € | — | € | — | € | 22 | ||||||||||||||||||||
Other restructuring reserves | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2002 | € | 13 | € | — | € | — | € | — | € | — | € | 56 | € | 18 | € | — | € | 87 | ||||||||||||||||||||
Changes in scope of consolidation and purchase accounting adjustments | 4 | — | 4 | — | — | — | — | — | 8 | |||||||||||||||||||||||||||||
Additions | — | 80 | — | — | — | 5 | 22 | — | 107 | |||||||||||||||||||||||||||||
Utilization | (4 | ) | (8 | ) | (3 | ) | — | — | (15 | ) | (10 | ) | — | (40 | ) | |||||||||||||||||||||||
Reversals | (7 | ) | (5 | ) | — | — | — | (25 | ) | (8 | ) | — | (45 | ) | ||||||||||||||||||||||||
Balance at December 31, 2003 | € | 6 | € | 67 | € | 1 | € | — | € | — | € | 21 | € | 22 | € | — | € | 117 | ||||||||||||||||||||
Changes in scope of consolidation and purchase accounting adjustments | (1 | ) | (2 | ) | (4 | ) | — | — | 31 | (17 | ) | — | 7 | |||||||||||||||||||||||||
Additions | 1 | 29 | 12 | 8 | 14 | 6 | 5 | — | 75 | |||||||||||||||||||||||||||||
Utilization | (3 | ) | (54 | ) | (2 | ) | — | — | — | (4 | ) | — | (63 | ) | ||||||||||||||||||||||||
Reversals | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Balance at December 31, 2004 | € | 3 | € | 40 | € | 7 | € | 8 | € | 14 | € | 58 | € | 6 | € | — | € | 136 | ||||||||||||||||||||
Total restructuring reserves | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2004 | € | 10 | € | 40 | € | 22 | € | 8 | € | 14 | € | 58 | € | 6 | € | — | € | 158 | ||||||||||||||||||||
Seagram Acquisition |
Canal+ Group |
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Universal Music Group |
Vivendi Universal Games |
SFR Cegetel |
Maroc Telecom |
Non core operations |
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December 31, 2004 | |||||||||||||||||||||
Bank Overdrafts and Other | |||||||||||||||||||||
Short-Term Borrowings | |||||||||||||||||||||
Current | |||||||||||||||||||||
Portion of | Other | Total | |||||||||||||||||||
Long-Term | Long-Term | Short-Term | Short-Term | ||||||||||||||||||
Debt | Debt | Debt | Debt | Total | |||||||||||||||||
(In millions of euros) | |||||||||||||||||||||
Promissory note to USI(a) | € | 573 | € | — | € | 2 | € | 2 | € | 575 | |||||||||||
SFR securitization program(b) | — | — | 487 | 487 | 487 | ||||||||||||||||
Capital leases(c) | 440 | — | — | — | 440 | ||||||||||||||||
Total secured debt(d) | € | 1,013 | € | — | € | 489 | € | 489 | € | 1,502 | |||||||||||
SFR€1.2 billion revolving credit facility (July 2009)(e) | 350 | — | — | — | 350 | ||||||||||||||||
SFR Treasury Bills | — | — | 325 | 325 | 325 | ||||||||||||||||
Other | 213 | (f) | 3 | 402 | 405 | 618 | |||||||||||||||
Total unsecured subsidiaries’ debt | € | 563 | € | 3 | € | 727 | € | 730 | (l) | € | 1,293 | ||||||||||
€700 million floating notes (July 2007)(g) | 700 | — | — | — | 700 | ||||||||||||||||
Senior notes 9.25% — 9.5% (2010)(h) | 38 | — | 1 | (i) | 1 | 39 | |||||||||||||||
Senior notes 6.25% (2008)(h) | 356 | — | 10 | (i) | 10 | 366 | |||||||||||||||
Vinci exchangeable 1% (March 2006)(j) | 527 | — | 4 | (i) | 4 | 531 | |||||||||||||||
Sogecable exchangeable 1.75% (October 2008)(k) | 605 | — | 2 | (i) | 2 | 607 | |||||||||||||||
Treasury Bills | — | — | 274 | 274 | (l) | 274 | |||||||||||||||
Other | 747 | (f) | 180 | 54 | 234 | (l) | 981 | ||||||||||||||
Total other unsecured debt | € | 2,973 | € | 180 | € | 345 | € | 525 | € | 3,498 | |||||||||||
Financial gross debt | € | 4,549 | € | 183 | € | 1,561 | € | 1,744 | € | 6,293 | |||||||||||
Cash and cash equivalents | (3,158 | ) | |||||||||||||||||||
Financial net debt | € | 3,135 | |||||||||||||||||||
(a) | Vivendi Universal issued a promissory note to USI, subsidiary of NBCU, to reimburse 94.56% of the costs borne by NBCU for the defeasance of covenants of the VUE Class A preferred interests. The note is collateralized by a pledge on Vivendi Universal’s NBCU shares in an amount equal to 125% of the value of the promissory note, which expires in May 2007 at the latest. This note was repaid, at no penalty, on January 28, 2005 after the issuance of€600 million of bonds with a 7-year maturity (i.e., maturing in February 2012), with a coupon rate of 3.875%. The bonds were sold at a discount that will provide an overall yield of 3.905% for investors. The pledge related to the promissory note was therefore released. |
(b) | On May 11, 2004, SFR Cegetel set up two five-year receivable securitization contracts with a financial institution for an amount of€350 million for SFR and SRR and of€55 million for Cegetel S.A.S., net of subordinated deposits (cash collaterals) set up as guarantees. On December 31, 2004, the total amount of deposits made by SFR and Cegetel S.A.S. was€87 million. The financings bear interest at a rate corresponding to the issuance rate of the treasury bills issued through the securitization vehicle or to EURIBOR, plus the fees customary for this type of transaction (subrogation fees, commitments fees and agent fees). |
(c) | Finance lease agreements that may include a purchase option in favor of the lessee (French“crédit bail” contracts), also include various rental guarantees relating to real estate defeasance transactions. The increase in this line compared with December 31, 2003 is related to the application of CRC Rule 04-03 issued on May 4, 2004: since January 1, 2004, Vivendi Universal fully consolidates Special Purpose Entities used for the defeasance of certain real estate assets. This consolidation resulted in an increase in long term debt of€326 million as of December 31, 2004. Please refer to note 1.1 “New accounting policy: CRC Rule 04-03 issued on May 4, 2004 concerning the consolidation of Special Purpose Entities”. The items consolidated primarily include the tower located in La Défense sold to Philip Morris Capital Corporation (PMCC) in 1998 and leased back to Vivendi Universal under a very long-term lease. The related debt amounted to€77 million as of December 31, 2004. The legal documentation provides PMCC with the ability to accelerate the lease if Vivendi Universal sells all or substantially all of its assets in the energy and water sector. In a letter dated |
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November 18, 2003, PMCC advised Vivendi Universal that, pursuant to this clause, it was studying the impact of the sale by Vivendi Universal of 50% of its stake in Veolia Environnement in December 2002 and the grant of call options by Vivendi Universal covering its remaining stake in Veolia Environnement. | |
(d) | The debt is considered as secured whenever the creditor(s) of the debt is/are backed by (i) a pledge on the borrower and/or its guarantors’ assets and/or (ii) guarantees provided by the borrower and/or its guarantors. |
(e) | On July 15, 2004, SFR set up a revolving credit facility with a five-year maturity for a total amount of€1.2 billion. The facility bears interest at EURIBOR 1 month + 0.24%. |
(f) | Comprised of numerous individual items (bonds of€617 million and other financial long-term debt of€343 million) for a total of€683 million in fixed rate debt with interest rates ranging from 0% to 8.67%, maturing from 2006 to 2040, and€277 million in floating rate debt with interest rates ranging from EURIBOR 3 months -0.27% to EURIBOR 3 months +0.60%, maturing from 2006 to 2009. |
(g) | On July 12, 2004, Vivendi Universal issued€700 million floating rate notes due in July 2007 at an issue price of 99.854%. The notes bear interest at EURIBOR 3 month plus a margin of 0.55%. Interest is payable annually in arrears on July 12 of each year. Unless previously redeemed or purchased and cancelled, the notes will be redeemed on maturity in cash at their principal amount (€1,000 per bond). The notes, listed on the Luxembourg Stock Exchange, are subject to customarypari passu, negative pledge and event of default provisions. |
(h) | On May 25, 2004, Vivendi Universal launched a tender offer to purchase€1 billion in aggregate principal amount of the euro-denominated 9.50% Senior Notes (High Yield Notes), the dollar-denominated 9.25% Senior Notes and the 6.25% Senior Notes denominated in euros and US dollars. This offer was subsequently amended, and its size was increased to€2.4 billion in aggregate cash consideration. On June 29, 2004, it terminated with a tender rate of 96.4% for the 9.50% and 9.25% Senior Notes and a tender rate of 72.0% for the 6.25% Senior Notes, for an aggregate cash consideration of approximately€2.3 billion (including accrued interest and the premium paid to bondholders). The remaining bonds were redeemed on January 21, 2005, following the note sent by Vivendi Universal to bondholders in December 2004, for an aggregate consideration of€409 million (including accrued interest and the premium paid to bondholders). |
(i) | Corresponds to accrued interest. |
(j) | In March 2001, Vivendi Universal issued 6,818,695 bonds exchangeable, at any time after April 10, 2001, for Vinci shares, for an amount of€527.4 million. The bonds bore interest at 1%, with 3.75% yield to maturity, and mature on March 1, 2006. The issue price was€77.35. On August 11, 2003, the redemption price of the bonds was increased from€88.81 to€93.25, in return for which, the bondholders fully relinquished their right to exercise their early redemption option on March 1, 2004. The new redemption price provides the holders with a gross return of 5.66% per annum from October 1, 2003 until maturity. Vivendi Universal purchased Vinci share call options in order to be able to present Vinci shares on maturity of the bonds maturity, if necessary (please refer to note 28.7 “Financial instruments as of December 31, 2004, 2003 and 2002”). |
(k) | On October 30, 2003, Vivendi Universal issued€605 million of 1.75% exchangeable bonds due 2008 and exchangeable for ordinary shares of Sogecable S.A. (a limited liability company incorporated under the laws of the Kingdom of Spain, whose shares are listed on the Madrid Stock Exchange). Interest is payable annually in arrears on October 30 of each year, commencing on October 30, 2004. Each bond is exchangeable at the holders’ discretion at any time, from January 1, 2004 up to the tenth business day preceding the maturity date, into ordinary shares of Sogecable S.A. at an exchange ratio, subject to adjustment on the occurrence of certain events, of one share for one bond. Vivendi Universal may at its discretion elect to pay holders exercising their option the cash equivalent in euros of the then market value of the relevant shares. Vivendi Universal is entitled, at any time on or after October 30, 2006, at its discretion, to redeem in cash all, but not less than all, of the outstanding bonds, if on 20 out of 30 consecutive trading days, the product of (i) the closing price of a Sogecable share on the Madrid Stock Exchange and (ii) the then applicable exchange ratio equals or exceeds 125% of the sum of the principal amount of one bond (€29.32) plus accrued interest to, but excluding, the date set for redemption. In addition, Vivendi Universal is entitled at any time to redeem in cash all, but not less than all, of the bonds outstanding at a price equal to the principal amount of the bonds plus accrued interest, if any, if less than 10% of the bonds originally issued remain outstanding at that time. Unless previously redeemed, exchanged or purchased and cancelled, the bonds will be redeemed in cash on the maturity date at their principal amount. The bonds, listed on the Luxembourg Stock Exchange, are subject to customarypari passu, negative pledge and event of default provisions. At the time of issuance, Vivendi Universal committed to lend a maximum of 20 million Sogecable shares to the financial institution acting as bookrunner for the bond issue, this number to be reduced by the number of bonds redeemed following the exercise by any bondholder of their exchange rights and, from October 1, 2004, by the number of shares, if any, sold by Vivendi Universal, subject to a minimum threshold of 5 million Sogecable shares which are committed to remain available to the financial institution. |
(l) | Bank overdrafts and other short-term borrowings are comprised of numerous individual items. Of the total,€798 million is fixed rate debt with interest rates ranging from 0% to 9%, and€440 million is floating rate debt, with interest rates ranging from EURIBOR 3 months +0.16% to EURIBOR 1 month +0.60%. |
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17.2. | Financial Net Debt as of December 31, 2003 |
December 31, 2003 | |||||||||||||||||||||
Bank Overdrafts and Other | |||||||||||||||||||||
Short-Term Borrowings | |||||||||||||||||||||
Current | |||||||||||||||||||||
Portion of | Other | Total | |||||||||||||||||||
Long-Term | Long-Term | Short-Term | Short-Term | ||||||||||||||||||
Debt | Debt | Debt | Debt | Total | |||||||||||||||||
(In millions of euros) | |||||||||||||||||||||
€3 billion multicurrency revolving credit facility(a) | € | — | € | — | € | 992 | € | 992 | € | 992 | |||||||||||
€2.5 billion dual currency facility(a) | 1,000 | — | — | — | 1,000 | ||||||||||||||||
VUE securitization program(b) | 602 | — | — | — | 602 | ||||||||||||||||
VUE — $920 million loan agreement(b) | 739 | — | — | — | 739 | ||||||||||||||||
Capital leases | 196 | — | — | — | 196 | ||||||||||||||||
Other secured debt | 194 | (c) | — | 2 | 2 | 196 | |||||||||||||||
Total secured debt(d) | € | 2,731 | € | — | € | 994 | € | 994 | € | 3,725 | |||||||||||
VUE Class A and B preferred interests(b)(e) | 2,097 | — | — | — | 2,097 | ||||||||||||||||
Other | 360 | (c) | 624 | 520 | 1,144 | 1,504 | |||||||||||||||
Total unsecured subsidiaries’ debt | € | 2,457 | € | 624 | € | 520 | € | 1,144 | € | 3,601 | |||||||||||
Senior notes 9.25% — 9.5% (2010) | 1,076 | — | 41 | (h) | 41 | 1,117 | |||||||||||||||
Senior notes 6.25% (2008) | 1,283 | — | 48 | (h) | 48 | 1,331 | |||||||||||||||
Veolia Environnement exchangeable 2% (March 2006)(f) | 28 | — | — | — | 28 | ||||||||||||||||
Vivendi Universal convertible 1.25% (OCEANE — January 2004)(g) | — | 1,699 | 21 | (h) | 1,720 | 1,720 | |||||||||||||||
Vinci exchangeable 1% (March 2006) | 527 | — | 4 | (h) | 4 | 531 | |||||||||||||||
Sogecable exchangeable 1.75% (October 2008) | 605 | — | 2 | (h) | 2 | 607 | |||||||||||||||
Other | 914 | (c) | 748 | 101 | 849 | 1,763 | |||||||||||||||
Total other unsecured debt | € | 4,433 | € | 2,447 | € | 217 | € | 2,664 | € | 7,097 | |||||||||||
Financial gross debt | € | 9,621 | € | 3,071 | € | 1,731 | € | 4,802 | (i) | € | 14,423 | ||||||||||
Cash and cash equivalents | (2,858 | ) | |||||||||||||||||||
Financial net debt | € | 11,565 | |||||||||||||||||||
(a) | Facilities reimbursed and terminated on May 11, 2004. |
(b) | Debt deconsolidated on May 11, 2004, following the closing of the NBC-Universal transaction that resulted in the divestiture (from an accounting standpoint) of 80% of Vivendi Universal’s interests in VUE. |
(c) | Comprised of numerous individual items (bonds of€742 million and other financial long-term debt of€726 million) for a total of€809 million in fixed rate debt with interest rates ranging from 0% to 9.25%, maturing from 2005 to 2040, and€659 million in floating rate debt with interest rates ranging from EURIBOR 3 months -0.27% to LIBOR GBP 6 months +2.25%, maturing from 2005 to 2009. |
(d) | The debt is considered as secured whenever the creditor(s) of the debt is/are backed by (i) a pledge on the borrower and/or its guarantors’ assets and/or (ii) guarantees provided by the borrower and/or its guarantors. |
(e) | In May 2002, Vivendi Universal acquired the entertainment assets of IAC. Following this transaction, IAC received VUE Class A and Class B preferred interests, the liquidation amount of which was $750 million and $1.75 billion, respectively, (the latter being |
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exchangeable for up to 56.6 million IAC shares, via put and call options agreed between Vivendi Universal and IAC). These preferred interests have the following characteristics: |
— | Class A preferred interests: Paid-In-Kind (PIK) interest at 5% per year; maturity on the 20th anniversary of the closing (i.e., May 2022). | |
— | Class B preferred interests: dividends at 3.6% per annum and PIK accretion at 1.4% per annum; exchangeable on Vivendi Universal’s or IAC’s initiative after 20 years. |
These preferred interests were transferred to NBCU in May 2004 (please refer to note 3.1 “NBC-Universal transaction completed on May 11, 2004”). |
(f) | Following the exercise of a put option by investors in March 2003, Vivendi Universal redeemed most of these bonds exchangeable for Veolia Environnement shares at a total cost of€1.8 billion. |
(g) | As of December 31, 2003, 6,023,946 bonds were outstanding. They were fully repaid in cash in January 2004. |
(h) | Corresponds to accrued interest. |
(i) | Bank overdrafts and other short-term borrowings are comprised of numerous individual items. Of the total,€3,424 million is fixed rate debt with interest rates ranging from 0% to 9% and€1,378 million is floating rate debt with interest rates ranging from EURIBOR 3 months -0.3% to LIBOR USD 1 year +8%. |
17.3. | Financial Net Debt as of December 31, 2002 |
December 31, 2002 | |||||||||||||||||||||
Bank Overdrafts and Other | |||||||||||||||||||||
Short-Term Borrowings | |||||||||||||||||||||
Current | |||||||||||||||||||||
Portion of | Other | Total | |||||||||||||||||||
Long-Term | Long-Term | Short-Term | Short-Term | ||||||||||||||||||
Debt | Debt | Debt | Debt | Total | |||||||||||||||||
(In millions of euros) | |||||||||||||||||||||
€3 billion multicurrency revolving credit facility | € | — | € | — | € | 3,074 | € | 3,074 | € | 3,074 | |||||||||||
VUE — $1.62 billion loan | — | — | 1,573 | 1,573 | 1,573 | ||||||||||||||||
Capital leases | 274 | — | — | — | 274 | ||||||||||||||||
Other secured debt | 507 | (a) | 20 | 1,645 | (b) | 1,665 | 2,172 | ||||||||||||||
Total secured debt(c) | € | 781 | € | 20 | € | 6,292 | € | 6,312 | € | 7,093 | |||||||||||
VUE Class A and B preferred interests | 2,507 | — | — | — | 2,507 | ||||||||||||||||
Other | 1,355 | (a) | 120 | 651 | 771 | 2,126 | |||||||||||||||
Total unsecured subsidiaries’ debt | € | 3,862 | € | 120 | € | 651 | € | 771 | € | 4,633 | |||||||||||
Veolia Environnement exchangeable 2% (March 2006) | 1,809 | — | 30 | 30 | 1,839 | ||||||||||||||||
Vivendi Universal convertible 1.25% (OCEANE — January 2004) | 1,699 | — | 21 | 21 | 1,720 | ||||||||||||||||
Vinci exchangeable 1% (March 2006) | 527 | — | 4 | 4 | 531 | ||||||||||||||||
BSkyB exchangeable 1% (July 2003) | — | 1,440 | 7 | 1,447 | 1,447 | ||||||||||||||||
Other | 1,777 | (a) | 416 | 176 | 592 | 2,369 | |||||||||||||||
Total other unsecured debt | € | 5,812 | € | 1,856 | € | 238 | € | 2,094 | € | 7,906 | |||||||||||
Financial gross debt | € | 10,455 | € | 1,996 | € | 7,181 | € | 9,177 | (d) | € | 19,632 | ||||||||||
Cash and cash equivalents | (7,295 | ) | |||||||||||||||||||
Financial net debt | € | 12,337 | |||||||||||||||||||
(a) | Comprised of numerous individual items, for a total of€2,407 million in fixed rate debt with interest rates ranging from 0% to 15%, maturing from 2004 to 2040, and€1,232 million in floating rate debt with interest rates ranging from LIBOR GBP -0.58% to EURIBOR +3%, maturing from 2004 to 2012. |
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(b) | Including various revolving credit facilities totaling€850 million, Société Générale’s€215 million and€275 million revolving credit facilities and CDC IXIS’s€200 million revolving credit facility. |
(c) | The debt is considered as secured whenever the creditor(s) of the debt is/are backed by (i) a pledge on the borrower and/or its guarantors’ assets, and/or (ii) guarantees provided by the borrower and/or its guarantors. |
(d) | Bank overdrafts and other short-term borrowings are comprised of numerous individual items. Of the total,€1,501 million is fixed rate debt with interest rates ranging from 1% to 6.5%, and€7,676 million is floating rate debt with interest rates ranging from EURIBOR +0% to LIBOR USD +5%. |
December 31, | ||||||||||||||
2004 | 2003 | 2002 | ||||||||||||
(In millions of euros) | ||||||||||||||
Total long-term debt detailed by: | ||||||||||||||
Currency: | ||||||||||||||
EUR | € | 3,731 | € | 4,262 | € | 7,146 | ||||||||
USD | 810 | 5,154 | 2,933 | |||||||||||
GBP | — | 205 | 288 | |||||||||||
Other | 8 | — | 88 | |||||||||||
Total | € | 4,549 | € | 9,621 | € | 10,455 | ||||||||
Maturity: | ||||||||||||||
Due between one and two years | € | 957 | € | 473 | € | 2,878 | ||||||||
Due between two and four years | 2,497 | } | } | |||||||||||
} | 5,800 | } | 4,013 | |||||||||||
} | } | |||||||||||||
Due between four and five years | 639 | } | } | |||||||||||
Due after five years | 456 | 3,348 | 3,564 | |||||||||||
Total | € | 4,549 | € | 9,621 | € | 10,455 | ||||||||
Nature of interest rate: | ||||||||||||||
Fixed interest rate | € | 2,595 | € | 6,866 | € | 8,925 | ||||||||
Floating interest rate | 1,954 | 2,755 | 1,530 | |||||||||||
Total | € | 4,549 | € | 9,621 | € | 10,455 | ||||||||
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December 31, | ||||||||||||||||
Note | 2004 | 2003 | 2002 | |||||||||||||
(In millions of euros) | ||||||||||||||||
Sports rights | € | 2,134 | (a) | € | 695 | € | 1,065 | |||||||||
Advance lease payments in respect of Qualified Technological Equipment operations | 1.1 | 865 | — | — | ||||||||||||
Net cost of dividends on the VUE Class B preferred interests | 3.1 | 244 | (b) | — | — | |||||||||||
Royalties payable, participations and commitments | 286 | (c)(*) | 1,101 | 1,386 | ||||||||||||
Accrued compensation and other benefits | — | 23 | 184 | |||||||||||||
Accrual for exit activities related to the acquisition of Seagram | 14 | 16 | 56 | |||||||||||||
Contingent price adjustment towards Rondor’s previous shareholders | — | — | 223 | |||||||||||||
Other | 283 | 572 | 980 | |||||||||||||
Total other non-current liabilities and accrued expenses | € | 3,826 | € | 2,407 | € | 3,894 | ||||||||||
(*) | The reduction in royalties payable as of December 31, 2004 primarily results from the deconsolidation of VUE on May 11, 2004. |
(a) | Mainly includes broadcasting rights obtained by Canal+ in December 2004 to the French National Football League 1 for€1,800 million. |
(b) | Corresponds to the net present value of after tax dividends of 3.6% per annum which will be paid to IAC. |
(c) | In 2004, includes€64 million for the reversal of excess provisions recorded in 2000 as part of the UMG purchase price adjustment. This provision reversal, recorded in operating income, does not impact net income as it is offset by an exceptional goodwill amortization. |
December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(In millions of euros) | ||||||||||||
Trade accounts payable and other | € | 9,202 | € | 11,335 | € | 11,955 | ||||||
Social costs payable | 845 | 926 | 1,318 | |||||||||
Total accounts payable | € | 10,047 | (a) | € | 12,261 | € | 13,273 | |||||
(a) | Including€7,866 million payable in 2005. |
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Year Ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(In millions of euros) | ||||||||||||
Product sales, net | € | 7,779 | € | 11,721 | € | 19,333 | ||||||
Service revenues | 12,758 | 12,933 | 38,773 | (a) | ||||||||
Other revenues | 891 | 828 | 44 | |||||||||
Total revenues | € | 21,428 | € | 25,482 | € | 58,150 | ||||||
Cost of products sold | (5,079 | ) | (7,793 | ) | (12,750 | ) | ||||||
Cost of service revenues | (6,228 | ) | (7,126 | ) | (27,788 | ) | ||||||
Expenses applicable to other revenues | (326 | ) | (349 | ) | (36 | ) | ||||||
Total cost of revenues | € | (11,633 | ) | € | (15,268 | ) | € | (40,574 | ) | |||
(a) | In 2002, included excise taxes and contributions collected by Veolia Environnement on behalf of local authorities in an amount of€1,675 million. |
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2004 | 2003 | |||||||
compensation | compensation | |||||||
(In euros) | ||||||||
Fixed salary | € | 1,000,008 | € | 1,000,008 | ||||
2003 bonuses paid in 2004 | 2,425,000 | — | ||||||
2002 2nd half bonus paid in 2003 | — | 1,250,000 | ||||||
Fringe benefits and miscellaneous | 24,555 | (a) | 6,212 | |||||
Total | € | 3,449,563 | € | 2,256,220 | ||||
(a) | In 2004, this amount includes employer retirement and contingency fund contributions exceeding the legal deductible threshold (which are included back into taxable income) and a company car. |
(1) | The evaluation of the benefit resulting from the options granted is provided for information purposes only. It was calculated according to the “binomial” method used when applying the IFRS 2 standard regarding the evaluation of compensation paid in shares (shares based payment). This theoretical evaluation does not necessarily correspond to the gain that might be obtained when the shares are sold. The actual gain will depend on the evolution of the share price on the date when the option is exercised and the date of sale of the shares subscribed by exercising the option. |
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Note 22. | Other Financial Expenses, Net of Provisions, for the Years Ended December 31, 2004, 2003 and 2002 |
Year Ended December 31, 2004 | ||||||||||||||||
Financial | ||||||||||||||||
Financial | provisions, | |||||||||||||||
(expense)/ | (accrual)/ | |||||||||||||||
Note | income | reversal | Net | |||||||||||||
(In millions of euros) | ||||||||||||||||
Premium on call options on Veolia Environnement shares | 3.2 | € | 173 | € | — | € | 173 | |||||||||
Mark-to-market of DuPont shares | 8.2 | — | 31 | 31 | ||||||||||||
Divestiture of VIVA Media shares | 26 | — | 26 | |||||||||||||
Loss incurred on the settlement of interest rate swaps | (56 | ) | 67 | 11 | ||||||||||||
Loss incurred on the sale of treasury shares to employees exercising their stock options | 11.1 | (23 | ) | — | (23 | ) | ||||||||||
Provision on put option on interest in Cegetel SAS granted to SNCF | 14 | — | (35 | ) | (35 | ) | ||||||||||
Amortization of deferred charges related to bond issuance, facilities and other | (70 | ) | — | (70 | ) | |||||||||||
Senior Notes redemption costs | 17.1 | (350 | ) | — | (350 | ) | ||||||||||
Other, net | 1 | (11 | ) | (10 | ) | |||||||||||
€ | (299 | ) | € | 52 | € | (247 | ) | |||||||||
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Year Ended December 31, 2003 | ||||||||||||||||
Financial | ||||||||||||||||
Financial | provisions, | |||||||||||||||
(expense)/ | (accrual)/ | |||||||||||||||
income | reversal | Net | ||||||||||||||
(In millions of euros) | ||||||||||||||||
Sale of InterActiveCorp warrants(a) | € | (329 | ) | € | 454 | € | 125 | |||||||||
Mark-to-market of DuPont shares | — | 142 | 142 | |||||||||||||
Termination of LineInvest total return swap(b) | — | 97 | 97 | |||||||||||||
Improvement of Vivendi Universal proportionate share in SFD shareholders’ equity | — | 86 | 86 | |||||||||||||
Sale of impaired investment in Softbank Capital Partners | 29 | — | 29 | |||||||||||||
Losses related to put options on treasury shares | (104 | ) | 104 | — | ||||||||||||
Redemptions premiums on Veolia Environnement and BSkyB exchangeable bonds | (102 | ) | 102 | — | ||||||||||||
Sale of Vinci call options | (39 | ) | 13 | (26 | ) | |||||||||||
SEC Fair Fund(c) | — | (40 | ) | (40 | ) | |||||||||||
Fees related to the implementation of the refinancing plan | (50 | ) | — | (50 | ) | |||||||||||
Evaluation of put option on interest in Cegetel SAS granted to SNCF | — | (85 | ) | (85 | ) | |||||||||||
Amortization of deferred charges related to bond issuances, facilities and other | (129 | ) | (64 | ) | (193 | ) | ||||||||||
SFD debt forgiveness vis-a-vis SFR(d) | (200 | ) | — | (200 | ) | |||||||||||
Foreign exchange loss | (228 | ) | — | (228 | ) | |||||||||||
Other, net | (49 | ) | (117 | ) | (166 | ) | ||||||||||
€ | (1,201 | ) | € | 692 | € | (509 | ) | |||||||||
(a) | The IAC warrants, marked-to-market as of December 31, 2002, were sold in 2003 for a total consideration of€600 million. |
(b) | Reversal of the provision accrued in 2002 to cover the market risk under the terms of the total return swap agreed with LineInvest in the event of a payment by AOL Time Warner in its own shares in connection with the sale of certain preferred shares of AOL Europe held by Vivendi Universal in 2001. |
(c) | On December 23, 2003, Vivendi Universal reached a final settlement with the US Securities and Exchange Commission (SEC), which concluded the SEC’s investigation into Vivendi Universal. As part of that settlement, the SEC filed a complaint against Vivendi Universal and Messrs. Messier and Hannezo in the United States District Court for the Southern District of New York on December 23, 2003, containing certain allegations against Vivendi Universal and Messrs. Messier and Hannezo. The SEC did not allege that any of Vivendi Universal’s financial statements were false or misleading and did not require Vivendi Universal to restate any of its past financial statements. In a Consent Decree also filed in Court on December 23, 2003, Vivendi Universal agreed, without admitting or denying any liability, (i) not to violate certain specified provisions of the US securities laws in the future; and (ii) to deposit $50,000,001 (a civil penalty and a $1 disgorgement) into a “fair fund” established pursuant to Section 308 of the Sarbanes-Oxley Act of 2002. Vivendi Universal expects that the “fair fund” will, in due course, be distributed to certain Vivendi Universal shareholders under a plan of distribution to be established by the SEC. Messrs. Messier and Hannezo also settled with the SEC by entering into separate Consent Decrees. As part of his settlement with the SEC, Mr. Messier agreed to relinquish all his claims against Vivendi Universal under his termination agreement and to give up the approximately $25 million that he was claiming from Vivendi Universal. |
(d) | This debt cancellation was offset by an improvement in SFD’s net income and shareholders’ equity, which positively impacted SFR equity earnings as SFD is 49% held by SFR. |
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Year Ended December 31, 2002 | ||||||||||||
Financial | ||||||||||||
Financial | provisions, | |||||||||||
(expense)/ | (accrual)/ | |||||||||||
income | reversal | Net | ||||||||||
(In millions of euros) | ||||||||||||
Sale of Vinci shares | € | 153 | € | — | € | 153 | ||||||
Foreign exchange gain | 24 | — | 24 | |||||||||
Mark-to-market of the investment in Elektrim S.A. (a) | — | (86 | ) | (86 | ) | |||||||
Potential market risk on AOL Time Warner shares | — | (97 | ) | (97 | ) | |||||||
Impairment of Softbank Capital Partners investment | — | (120 | ) | (120 | ) | |||||||
Mark-to-market of DuPont shares | — | (173 | ) | (173 | ) | |||||||
Amortization of deferred charges related to bond issuances, facilities and other | — | (174 | ) | (174 | ) | |||||||
Impairment of investments in international telecom | — | (175 | ) | (175 | ) | |||||||
Fees related to the implementation of the refinancing plan | (193 | ) | — | (193 | ) | |||||||
Impairment of investments in UGC and UGC Ciné Cité(b) | — | (220 | ) | (220 | ) | |||||||
Premium paid on call options on treasury shares | — | (226 | ) | (226 | ) | |||||||
Mark-to-market of interest rate swaps | — | (261 | ) | (261 | ) | |||||||
Mark-to-market of IAC warrants | — | (454 | ) | (454 | ) | |||||||
Impairment of Elektrim Telekomunikacja investment(c) | — | (609 | ) | (609 | ) | |||||||
Losses related to put options on treasury shares | (589 | ) | (104 | ) | (693 | ) | ||||||
Other, net | 91 | (196 | ) | (105 | ) | |||||||
€ | (514 | ) | € | (2,895 | ) | € | (3,409 | ) | ||||
(a) | Comprised the mark-to-market of the Elektrim investment of -€21 million and the mark-to-market of related marketable securities of -€65 million. |
(b) | Comprised the impairment of investments in UGC and UGC Ciné Cité in the amount of -€101 million and the impairment of UGC bonds in the amount of -€119 million. |
(c) | Comprised a -€406 million impairment of this investment and a -€203 million impairment of the related loan. |
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Note 23. | Gain (Loss) on Businesses Sold, Net of Provisions, for the Years Ended December 31, 2004, 2003 and 2002 |
Income/(Expense) | ||||||||||||||||
Provision | ||||||||||||||||
(accrual)/ | ||||||||||||||||
Year Ended December 31, 2004 | Note | Gross | reversal | Net | ||||||||||||
(In millions of euros) | ||||||||||||||||
80% of VUE | 3.1 | € | (1,793 | ) | € | — | € | (1,793 | ) | |||||||
15% of Veolia Environnement | 3.2 | 1,316 | — | 1,316 | ||||||||||||
Various liquidation bonuses | (1 | ) | 75 | 74 | ||||||||||||
“Flux-divertissement” business of StudioExpand and Canal+ Benelux | 42 | 24 | 66 | |||||||||||||
UCI Cinemas | 64 | — | 64 | |||||||||||||
Sportfive | 22 | 22 | 44 | |||||||||||||
Kencell | 45 | (7 | ) | 38 | ||||||||||||
Abandonment of Internet operations | — | 34 | 34 | |||||||||||||
Monaco Telecom | 26 | (5 | ) | 21 | ||||||||||||
Atica & Scipione | (8 | ) | — | (8 | ) | |||||||||||
NC Numéricâble (in process) | — | (56 | ) | (56 | ) | |||||||||||
Other, net | (6 | ) | 66 | 60 | ||||||||||||
€ | (293 | ) | € | 153 | € | (140 | )(a) | |||||||||
(a) | Income tax and minority interests related to gains on businesses sold, net of provisions, were -€10 million and€1 million, respectively. |
Income/(Expense) | ||||||||||||||||
Provision | ||||||||||||||||
reversal/ | ||||||||||||||||
Year Ended December 31, 2003 | Note | Gross | (accrual) | Net | ||||||||||||
(In millions of euros) | ||||||||||||||||
Telepiù(a) | € | (137 | ) | € | 352 | € | 215 | |||||||||
Consumer Press Division | 104 | — | 104 | |||||||||||||
Sogecable (dilution) | 71 | — | 71 | |||||||||||||
Other Canal+ Group subsidiaries | 93 | (34 | ) | 59 | ||||||||||||
Comareg | 42 | — | 42 | |||||||||||||
Internet subsidiaries | 32 | 6 | 38 | |||||||||||||
International telecom assets | 30 | — | 30 | |||||||||||||
Interest in Cegetel S.A. sold to SNCF in connection with the merger of Cegetel S.A. and Telecom Développement | 30 | 24 | — | 24 | ||||||||||||
Xfera | 91 | (75 | ) | 16 | ||||||||||||
UGC (dilution) | (47 | ) | — | (47 | ) | |||||||||||
Other, net | (16 | ) | 66 | 50 | ||||||||||||
€ | 287 | € | 315 | € | 602 | (b) | ||||||||||
(a) | The net gain results from improvements in working capital recorded by Telepiù during the first quarter of 2003. |
(b) | Income tax and minority interests related to gains on businesses sold, net of provisions, were -€21 million and€11 million, respectively. |
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Income/ | ||||||||
Year Ended December 31, 2002 | (Expense) | |||||||
(In millions | ||||||||
of euros) | ||||||||
BSkyB shares (250 million) | € | 1,588 | ||||||
Veolia Environnement (divestitures and dilution) | 1,419 | |||||||
European publishing activities | 329 | |||||||
Canal+ Digital | 172 | |||||||
Vizzavi Europe | 90 | |||||||
Sithe shares | (232 | ) | ||||||
VUP Professional and Health divisions | (298 | ) | ||||||
Telepiù(a) | (360 | ) | ||||||
Echostar shares(b) | (674 | ) | ||||||
Houghton Mifflin | (822 | ) | ||||||
Other, net | (163 | ) | ||||||
€ | 1,049 | (c) | ||||||
(a) | This transaction, agreed to on October 1, 2002, was subject to regulatory approval obtained in April 2003. |
(b) | On December 18, 2002, Vivendi Universal sold its entire EchoStar equity position, 57.6 million class A common shares, back to EchoStar. Total net proceeds of the sale were $1,066 million. Vivendi Universal held these shares following the conversion of 5.8 million class D EchoStar preferred stock in January 2002 for an amount of $1.5 billion. |
(c) | Income tax and minority interests related to gains on businesses sold, net of provisions, were -€1,022 million and€211 million, respectively. |
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Year Ended December 31, | |||||||||||||
2004 | 2003 | 2002 | |||||||||||
(In millions of euros) | |||||||||||||
Current | |||||||||||||
Impact of the Consolidated Global Profit Tax System | 464 | — | — | ||||||||||
Current income tax charge | (1,394 | ) | (434 | )(a) | (948 | ) | |||||||
€ | (930 | ) | € | (434 | ) | € | (948 | ) | |||||
Deferred | |||||||||||||
Impact of the Consolidated Global Profit Tax System | 492 | — | — | ||||||||||
Other changes of the valuation allowance on deferred tax assets | 61 | 208 | (511 | ) | |||||||||
Impact of the change(s) in tax rates | (10 | ) | — | — | |||||||||
Other income (expenses) of deferred tax | (13 | ) | 634 | (b) | (1,097 | )(b) | |||||||
€ | 530 | € | 842 | € | (1,608 | ) | |||||||
Income tax | € | (400 | ) | € | 408 | € | (2,556 | ) | |||||
(a) | In 2003, included tax savings relating to the rationalization of the SFR Cegetel structure (€515 million) |
(b) | In 2003, included, in particular, the reversal of a€477 million reserve recorded in 2002 in respect of a potential contractual liability for tax indemnification that might have arisen in 2002 if VUE had been unable to secure refinancing for the bridge loan relating to the Vivendi Universal Entertainment Leveraged Partnership Distribution dated May 7, 2002. |
Year Ended December 31, | |||||||||||||
2004 | 2003 | 2002 | |||||||||||
(In millions of euros) | |||||||||||||
Current | |||||||||||||
France | (430 | )(a) | (229 | )(b) | (741 | ) | |||||||
U.S. | (247 | ) | 85 | (133 | ) | ||||||||
Other jurisdictions | (253 | ) | (290 | ) | (74 | ) | |||||||
Total current income tax | € | (930 | ) | € | (434 | ) | € | (948 | ) | ||||
Deferred | |||||||||||||
France | 318 | 213 | (940 | ) | |||||||||
U.S. | 209 | 457 | (c) | (523 | )(c) | ||||||||
Other jurisdictions | 3 | 172 | (145 | ) | |||||||||
Total deferred income tax | € | 530 | € | 842 | € | (1,608 | ) | ||||||
Income tax | € | (400 | ) | € | 408 | € | (2,556 | ) | |||||
Income tax paid | |||||||||||||
France | (333 | )(d) | (612 | )(d) | (614 | ) | |||||||
U.S. | (17 | ) | (47 | ) | (278 | ) | |||||||
Other jurisdictions | (230 | ) | (583 | ) | (360 | ) | |||||||
Total income tax paid | € | (580 | ) | € | (1,242 | ) | € | (1,252 | ) | ||||
(a) | In 2004, includes tax savings resulting from adoption of the Consolidated Global Profit Tax System (€464 million). |
(b) | In 2003, included tax savings relating to the rationalization of the SFR Cegetel structure (€515 million). |
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(c) | In 2003, included, in particular, the reversal of a€477 million reserve recorded in 2002 in respect of a potential contractual liability for tax indemnification that might have arisen in 2002 if VUE had been unable to secure refinancing for the bridge loan relating to the Vivendi Universal Entertainment Leveraged Partnership Distribution dated May 7, 2002. |
(d) | In 2004, includes tax savings relating to the rationalization of the SFR Cegetel structure (payment of€63 million in 2004 compared to€554 million in 2003). |
Year Ended December 31, | |||||||||||||||||
Note | 2004 | 2003 | 2002 | ||||||||||||||
(In millions of euros, except %) | |||||||||||||||||
Net income (loss) | € | 754 | € | (1,143 | ) | € | (23,301 | ) | |||||||||
“Add back:” | |||||||||||||||||
Income tax | 400 | (408 | ) | 2,556 | |||||||||||||
Minority interests | 1,030 | 1,212 | 844 | ||||||||||||||
Net income (loss) before income tax and minority interests | € | 2,184 | € | (339 | ) | € | (19,901 | ) | |||||||||
French statutory tax rate | 35.4 | % | 35.4 | % | 35.4 | % | |||||||||||
Theoretical income tax based on French statutory tax rate | (773 | ) | 120 | 7,045 | |||||||||||||
Reconciliation from theoretical to effective income tax: | |||||||||||||||||
Tax savings related to the Consolidated Global Profit Tax System | 24.1 | 956 | — | — | |||||||||||||
Foreign currency translation adjustment on the divestiture of 80% of VUE | 3.1 | (745 | )(a) | — | — | ||||||||||||
Consolidation adjustments on capital gain related to the divestiture of 15% of Veolia Environnement | 3.2 | 289 (a | ) | — | — | ||||||||||||
Tax losses | (162 | ) | 508 | (2,886 | ) | ||||||||||||
Nondeductible goodwill amortization and impairment losses(a) | (237 | ) | (1,032 | ) | (6,985 | ) | |||||||||||
Income from equity affiliates(a) | 78 | (46 | )(b) | (98 | ) | ||||||||||||
Long-term capital gains (losses) taxed at reduced tax rate | 81 | 45 | (477 | ) | |||||||||||||
Other, net | 113 | 813 | 845 | ||||||||||||||
Effective income tax | € | (400 | ) | € | 408 | € | (2,556 | ) | |||||||||
Effective income tax rate | 18.3 | % | 120.4 | % | (12.8 | )% |
(a) | Non-taxable consolidation adjustments. |
(b) | In 2003, included the Veolia Environnement impairment. |
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Balance at | Foreign | Changes in | |||||||||||||||||||||||
December 31, | Accruals | Currency | Scope of | Balance at | |||||||||||||||||||||
and | Translation | Consolidation | December 31, | ||||||||||||||||||||||
2002(a) | 2003 | reversals | Adjustment | and Other | 2004 | ||||||||||||||||||||
(In millions of euros) | |||||||||||||||||||||||||
Deferred tax assets | |||||||||||||||||||||||||
Tax losses carried forward | € | 4,182 | € | 4,315 | € | (297 | ) | € | — | € | 24 | € | 4,042 | (b) | |||||||||||
Long-term losses | 4,201 | 4,701 | (175 | ) | — | (4,493 | )(c) | 33 | (c) | ||||||||||||||||
Purchase accounting depreciation of assets | 1,157 | 1,278 | 45 | (2 | ) | (828 | )(d) | 493 | |||||||||||||||||
Other temporary differences | 826 | 728 | 1 | — | 112 | 841 | |||||||||||||||||||
Gross deferred tax assets | 10,366 | 11,022 | (426 | ) | (2 | ) | (5,185 | ) | 5,409 | ||||||||||||||||
Depreciations(e) | (8,753 | ) | (9,476 | ) | 1,051 | (f) | — | 4,235 | (c) | (4,190 | ) | ||||||||||||||
Total deferred tax assets | € | 1,613 | € | 1,546 | € | 625 | € | (2 | ) | € | (950 | ) | € | 1,219 | |||||||||||
Deferred tax liabilities | |||||||||||||||||||||||||
Purchase accounting revaluation of assets(g) | € | 3,887 | 2,530 | (15 | ) | (2 | ) | (1,781 | )(d) | 732 | |||||||||||||||
DuPont share redemption(h) | 1,574 | 1,271 | — | (108 | )(h) | — | 1,163 | ||||||||||||||||||
Spirits and wine sale | 1,020 | 669 | (i) | (15 | ) | (60 | ) | (4 | ) | 590 | |||||||||||||||
Other | 1,376 | 653 | (j) | 125 | (17 | ) | (39 | ) | 722 | ||||||||||||||||
Total deferred tax liabilities | € | 7,857 | € | 5,123 | € | 95 | € | (187 | ) | € | (1,824 | ) | € | 3,207 | |||||||||||
Net deferred tax liability | € | 6,244 | € | 3,577 | € | (530 | ) | € | (185 | ) | € | (874 | ) | € | 1,988 | ||||||||||
(a) | Includes some transfers between the different deferred tax categories compared with 2002 data as reported in 2003, primarily purchase accounting reevaluation of assets of€1,637 million transferred from “Other”. |
(b) | As of December 31, 2004, before the impact of the Consolidated Global Profit Tax System, Vivendi Universal reported tax losses carried forward of€13.4 billion (€12.5 billion available for unlimited carry forward, including€11.8 billion in respect of the Vivendi Universal S.A. tax group, compared to€11.3 billion as of December 31, 2003). In 2004, the Consolidated Global Profit Tax System enabled the offset of Vivendi Universal S.A. tax group losses of€1,392 million, generating tax savings in 2004 of€464 million. As such, after the impact of the Consolidated Global Profit Tax System, Vivendi Universal group reported corporate tax losses of€12 billion at a rate of 33.33%. |
(c) | Article 39 of the amended 2004 Finance Act introduced a progressive capital gains tax exemption over three years. As such, Vivendi Universal will only be able to relieve current long-term capital losses against capital gains realized in 2005 and 2006, at the tax rates prevailing in these years (2005: 15%; 2006: 8%). Application of these principles led Vivendi Universal to recognize a restricted deferred tax asset of€33 million. |
(d) | The decrease as of December 31, 2004 primarily results from the deconsolidation of VUE as of May 11, 2004. |
(e) | Estimated based on gross assets value prospects. |
(f) | Following its admission to the Consolidated Global Profit Tax System, Vivendi Universal reversed a€492 million provision in 2004 (please refer to paragraph 24.1 above). |
(g) | These tax liabilities generated by asset revaluations as a result of the purchase price allocation of company acquisition costs are cancelled on the amortization or divestiture of the underlying asset and generate no current tax charge. |
(h) | The changes recognized between 2002 and 2004 mainly relate to foreign currency translation adjustments. The tax treatment reported by Seagram in 1995 with respect to the DuPont share redemption is being challenged by the US Internal Revenue Service. Please refer to note 28.5 “Contingent liabilities”. |
(i) | The decrease compared with December 31, 2002, mainly relates to provision reversals resulting from the conclusion of tax audits covering prior taxable periods and reversals of tax reserves that are no longer required due to settlement or to the resolution of the litigations for which provisions were made. |
(j) | The decrease between 2002 and 2003, was mainly due to the reversal of a€477 million reserve recorded in 2002 in respect of a potential contractual liability for tax indemnification that might have arisen in 2002 if VUE had been unable to secure refinancing for the bridge loan relating to the Vivendi Universal Entertainment Leveraged Partnership Distribution dated May 7, 2002. In addition, in 2003 Vivendi Universal reversed tax reserves that were no longer required following the conclusion of tax audits. |
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Note 25. | Consolidated Statement of Cash Flows for the Years Ended December 31, 2004, 2003 and 2002 |
Year Ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(In millions of euros) | ||||||||||||
Depreciation of property, plant and equipment | € | 1,158 | € | 1,211 | € | 3,223 | ||||||
Amortization of other intangible assets | 685 | 766 | 1,098 | |||||||||
Other operating provisions and allowances, net | 75 | (130 | ) | — | ||||||||
Goodwill amortization | 638 | 1,120 | 1,277 | |||||||||
Impairment losses | 31 | 1,792 | 18,442 | |||||||||
Total depreciation and amortization | € | 2,587 | € | 4,759 | € | 24,040 | ||||||
Year Ended December 31, | |||||||||||||
2004 | 2003 | 2002 | |||||||||||
(In millions of euros) | |||||||||||||
Inventories and work-in-progress | € | 93 | € | 189 | € | 179 | |||||||
Accounts receivable | (127 | ) | 330 | (457 | ) | ||||||||
Other assets | (28 | ) | (245 | ) | (777 | ) | |||||||
Working capital assets | € | (62 | ) | € | 274 | € | (1,055 | ) | |||||
Accounts payable | (801 | ) | 406 | (1,836 | ) | ||||||||
Other liabilities and accrued expenses | 49 | (802 | ) | 905 | |||||||||
Working capital liabilities | € | (752 | ) | € | (396 | ) | € | (931 | ) | ||||
Net change in working capital | € | 690 | € | 670 | € | (124 | ) | ||||||
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Year Ended December 31, | |||||||||||||
2004 | 2003 | 2002 | |||||||||||
(In millions of euros) | |||||||||||||
Dividends received from NBC Universal | € | 357 | € | — | € | — | |||||||
in June(a) | 224 | — | — | ||||||||||
in September(b) | 78 | — | — | ||||||||||
in December(b) | 55 | — | — | ||||||||||
Dividends received from Veolia Environnement | 45 | 45 | — | ||||||||||
Other dividends received from equity affiliates | 8 | 14 | 179 | ||||||||||
Dividends received from equity affiliates | € | 410 | € | 59 | € | 179 | |||||||
Dividends paid by SFR to its minority shareholders | (1,470 | ) | (540 | ) | — | ||||||||
Dividends paid by Maroc Telecom to its minority shareholders | (303 | ) | (150 | ) | (40 | ) | |||||||
Dividends paid by Veolia Environnement Group to its minority shareholders | — | — | (180 | ) | |||||||||
Other dividends paid to minority shareholders | (77 | ) | (47 | ) | (32 | ) | |||||||
Dividends paid by consolidated companies to their minority shareholders | € | (1,850 | ) | € | (737 | ) | € | (252 | ) | ||||
Dividends paid by Vivendi Universal S.A. | — | — | (1,048 | ) | |||||||||
Dividends received from SFR | 1,854 | 621 | — | ||||||||||
Dividends received from Maroc Telecom (after a 10% deduction at source) | 146 | 73 | 19 | ||||||||||
Dividends received from Veolia Environnement | — | — | 120 | ||||||||||
Dividends received from Vivendi Universal Publishing | — | — | 658 | ||||||||||
Main intercompany dividends with no impact on the group cash position | € | 2,000 | € | 694 | € | 797 |
(a) | In 2004, as part of the Business Combination Agreement between Vivendi Universal, GE and NBC, Vivendi Universal paid over the entire cash flow generated by VUE (that is€614 million) from October 1, 2003 to May 11, 2004. In addition, as decided by the NBCU Board of Directors, Vivendi Universal received a dividend corresponding to 20% (before Universal Studios Holding Corp. minority interests) of the cash generated by NBC and VUE between October 1, 2003 and May 11, 2004. |
(b) | The shareholders’ agreements provide for a quarterly cash distribution, where distributable earnings exist and subject to approval by the NBCU Board of Directors. The dividends received are netted from the after tax cost of VUE Class B preferred interests (for the period from May 11 to December 31 in 2004). Please refer to note 18 “Other non-current liabilities and accrued expenses as of December 31, 2004, 2003 and 2002”. |
Year Ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(In millions of euros) | ||||||||||||
Purchase of affiliates by issuance of common stock | € | — | € | — | € | 1,219 | ||||||
Issuance of common stock in settlement of note payable | € | — | € | — | € | — |
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Year Ended December 31, | |||||||||||||||||||||||||
2004 | 2003 | 2002 | |||||||||||||||||||||||
(In millions of euros) | |||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||
France | € | 12,075 | 56% | € | 11,515 | 45% | € | 26,391 | 45% | ||||||||||||||||
Rest of Europe | 2,749 | 13% | 4,359 | 17% | 15,092 | 26% | |||||||||||||||||||
United States of America | 3,704 | 17% | 6,238 | 25% | 10,810 | 19% | |||||||||||||||||||
Rest of World | 2,900 | 14% | 3,370 | 13% | 5,857 | 10% | |||||||||||||||||||
Total Vivendi Universal | € | 21,428 | 100% | € | 25,482 | 100% | € | 58,150 | 100% | ||||||||||||||||
December 31, | |||||||||||||
2004 | 2003 | 2002 | |||||||||||
(In millions of euros) | |||||||||||||
Long-term assets | |||||||||||||
France | € | 12,325 | € | 9,907 | € | 15,356 | |||||||
Rest of Europe | 4,961 | 6,065 | 4,087 | ||||||||||
United States of America | 12,071 | 23,338 | 17,477 | ||||||||||
Rest of World | 2,230 | 1,254 | 11,575 | ||||||||||
Total Vivendi Universal | € | 31,587 | € | 40,564 | € | 48,495 | |||||||
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Vivendi | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Holding | Universal | Vivendi | ||||||||||||||||||||||||||||||||||||||||||||||||||
Universal | Vivendi | & | Non core | excl. | Universal | Veolia | Total | |||||||||||||||||||||||||||||||||||||||||||||
Canal+ | Music | Universal | SFR | Maroc | Telecom- | Corporate | operations | VUE | Entertainment | Environnement | Vivendi | |||||||||||||||||||||||||||||||||||||||||
Group | Group | Games | Media | Cegetel | Telecom | munications | (a) | (b) | and VE | (c) | (d) | Universal | ||||||||||||||||||||||||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended December 31, 2004 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | € | 3,580 | € | 4,993 | € | 475 | € | 9,048 | € | 8,317 | € | 1,627 | € | 9,944 | € | — | € | 109 | € | 19,101 | € | 2,327 | na* | € | 21,428 | |||||||||||||||||||||||||||
Operating expenses excl. D&A | (3,165 | ) | (4,250 | ) | (583 | ) | (7,998 | ) | (5,132 | ) | (691 | ) | (5,823 | ) | (208 | ) | (85 | ) | (14,114 | ) | (1,909 | ) | (16,023 | ) | ||||||||||||||||||||||||||||
Depreciation and amortization (D&A) | (224 | ) | (342 | )(e) | (40 | ) | (606 | ) | (890 | ) | (248 | ) | (1,138 | ) | (15 | ) | (19 | ) | (1,778 | ) | (65 | ) | (1,843 | ) | ||||||||||||||||||||||||||||
Other | 7 | (63 | ) | (35 | ) | (91 | ) | (38 | ) | (15 | ) | (53 | ) | 3 | 71 | (70 | ) | (16 | ) | (86 | ) | |||||||||||||||||||||||||||||||
Operating income (loss) | € | 198 | € | 338 | € | (183 | ) | € | 353 | € | 2,257 | € | 673 | € | 2,930 | € | (220 | ) | € | 76 | € | 3,139 | € | 337 | na* | € | 3,476 | |||||||||||||||||||||||||
Year ended December 31, 2003 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | € | 4,158 | € | 4,974 | € | 571 | € | 9,703 | € | 7,574 | € | 1,471 | € | 9,045 | € | — | € | 712 | € | 19,460 | € | 6,022 | na* | € | 25,482 | |||||||||||||||||||||||||||
Operating expenses excl. D&A | (3,531 | ) | (4,536 | ) | (661 | ) | (8,728 | ) | (4,875 | ) | (630 | ) | (5,505 | ) | (252 | ) | (651 | ) | (15,136 | ) | (4,898 | ) | (20,034 | ) | ||||||||||||||||||||||||||||
Depreciation and amortization (D&A) | (282 | ) | (287 | ) | (89 | ) | (658 | ) | (759 | ) | (218 | ) | (977 | ) | (37 | ) | (98 | ) | (1,770 | ) | (207 | ) | (1,977 | ) | ||||||||||||||||||||||||||||
Other | (98 | ) | (81 | ) | (22 | ) | (201 | ) | (21 | ) | 5 | (16 | ) | (41 | ) | 82 | (176 | ) | 14 | (162 | ) | |||||||||||||||||||||||||||||||
Operating income (loss) | € | 247 | € | 70 | € | (201 | ) | € | 116 | € | 1,919 | € | 628 | € | 2,547 | € | (330 | ) | € | 45 | € | 2,378 | € | 931 | na* | € | 3,309 | |||||||||||||||||||||||||
Year ended December 31, 2002 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | € | 4,833 | € | 6,276 | € | 794 | € | 11,903 | € | 7,067 | € | 1,487 | € | 8,554 | € | — | € | 1,385 | € | 21,842 | € | 6,270 | € | 30,038 | € | 58,150 | ||||||||||||||||||||||||||
Operating expenses excl. D&A | (4,609 | ) | (5,315 | ) | (623 | ) | (10,547 | ) | (4,738 | ) | (701 | ) | (5,439 | ) | (483 | ) | (1,404 | ) | (17,873 | ) | (5,073 | ) | ||||||||||||||||||||||||||||||
Depreciation and amortization (D&A) | (490 | ) | (450 | ) | (109 | ) | (1,049 | ) | (865 | ) | (272 | ) | (1,137 | ) | (57 | ) | (168 | ) | (2,411 | ) | (258 | ) | ||||||||||||||||||||||||||||||
Other | (59 | ) | 45 | 1 | (13 | ) | (15 | ) | (46 | ) | (61 | ) | (125 | ) | (298 | ) | (497 | ) | (123 | ) | ||||||||||||||||||||||||||||||||
Operating income (loss) | € | (325 | ) | € | 556 | € | 63 | € | 294 | € | 1,449 | € | 468 | € | 1,917 | € | (665 | ) | € | (485 | ) | € | 1,061 | € | 816 | € | 1,911 | € | 3,788 | |||||||||||||||||||||||
* | na: not applicable. |
(a) | Holding & Corporate operating expenses primarily comprise occupancy costs and compensation and benefits paid to corporate employees. |
(b) | Includes companies that Vivendi Universal has sold or intends to sell (Publishing and Internet through December 31, 2003 as well as VTI and Vivendi Valorisation) and the elimination of intercompany transactions. |
(c) | Deconsolidated on May 11, 2004. |
(d) | Includes Veolia Environnement accounted for using the equity method since December 31, 2002. Before that date, the results published by Veolia Environnement may have differed from those presented by Vivendi Universal as non-material, inter-segment transactions impact Veolia Environnement’s contribution to the Vivendi Universal financial statements. Furthermore, the definition of operating income (loss) used by Vivendi Universal differed from the EBIT figure published by Veolia Environnement, as the latter does not include restructuring charges. |
(e) | Includes a€9 million impairment charge in respect of UMG’s Music Clubs in the UK and France prior to their sale in December. |
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Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Vivendi | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Universal | Vivendi | |||||||||||||||||||||||||||||||||||||||||||||||||||
Universal | Vivendi | Holding & | Non core | excl. | Universal | Veolia | Total | |||||||||||||||||||||||||||||||||||||||||||||
Canal+ | Music | Universal | SFR | Maroc | Telecom- | Corporate | operations | VUE | Entertainment | Environnement | Vivendi | |||||||||||||||||||||||||||||||||||||||||
Group | Group | Games | Media | Cegetel | Telecom | munications | (a)(b) | (c) | and VE | (d) | (e) | Universal | ||||||||||||||||||||||||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2004 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill, net | € | 3,550 | € | 3,615 | € | 21 | € | 7,186 | € | 2,997 | € | 725 | € | 3,722 | € | 4,647 | € | — | € | 15,555 | na* | na* | € | 15,555 | ||||||||||||||||||||||||||||
Other intangible assets, net | 2,506 | 2,087 | 123 | 4,716 | 2,552 | 332 | 2,884 | 37 | 3 | 7,640 | na* | na* | 7,640 | |||||||||||||||||||||||||||||||||||||||
Investments in equity affiliates | 37 | 22 | — | 59 | 48 | — | 48 | 773 | — | 880 | na* | na* | 880 | |||||||||||||||||||||||||||||||||||||||
Total assets | € | 7,961 | € | 7,772 | € | 474 | € | 16,207 | € | 11,319 | € | 3,428 | € | 14,747 | € | 11,263 | € | 1,071 | € | 43,288 | na* | na* | € | 43,288 | ||||||||||||||||||||||||||||
Capital expenditures | € | 144 | € | 54 | € | 17 | € | 215 | € | 1,035 | € | 210 | € | 1,245 | € | 3 | € | 24 | € | 1,487 | € | 53 | na* | € | 1,540 | |||||||||||||||||||||||||||
December 31, 2003 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill, net | € | 3,500 | € | 4,114 | € | 50 | € | 7,664 | € | 3,100 | € | 744 | € | 3,844 | € | — | € | 77 | € | 11,585 | € | 6,204 | na* | € | 17,789 | |||||||||||||||||||||||||||
Other intangible assets, net | 1,410 | 2,514 | 149 | 4,073 | 2,487 | 336 | 2,823 | 60 | 53 | 7,009 | 4,769 | na* | 11,778 | |||||||||||||||||||||||||||||||||||||||
Investments in equity affiliates | 231 | 36 | — | 267 | 50 | — | 50 | 61 | 2 | 380 | 703 | na* | 1,083 | |||||||||||||||||||||||||||||||||||||||
Total assets | € | 7,762 | € | 9,046 | € | 707 | € | 17,515 | € | 11,285 | € | 3,440 | € | 14,725 | € | 3,646 | € | 2,224 | € | 38,110 | € | 16,810 | na* | € | 54,920 | |||||||||||||||||||||||||||
Capital expenditures | € | 207 | € | 45 | € | 16 | € | 268 | € | 936 | € | 184 | € | 1,120 | € | 1 | € | 43 | € | 1,432 | € | 120 | na* | € | 1,552 | |||||||||||||||||||||||||||
December 31, 2002 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill, net | € | 3,957 | € | 5,479 | € | 74 | € | 9,510 | € | 919 | € | 793 | € | 1,712 | € | 48 | € | 155 | € | 11,425 | € | 8,637 | na* | € | 20,062 | |||||||||||||||||||||||||||
Other intangible assets, net | 2,895 | 4,218 | 303 | 7,416 | 1,205 | 333 | 1,538 | 64 | 208 | 9,226 | 5,480 | na* | 14,706 | |||||||||||||||||||||||||||||||||||||||
Investments in equity affiliates | 320 | 31 | — | 351 | 316 | — | 316 | 382 | (5 | ) | 1,044 | 859 | na* | 1,903 | ||||||||||||||||||||||||||||||||||||||
Total assets | € | 11,158 | € | 12,581 | € | 1,002 | € | 24,741 | € | 7,190 | € | 3,509 | € | 10,699 | € | 9,081 | € | 3,510 | € | 48,031 | € | 21,302 | na* | € | 69,333 | |||||||||||||||||||||||||||
Capital expenditures | € | 443 | € | 92 | € | 15 | € | 550 | € | 595 | € | 257 | € | 852 | € | 17 | € | 143 | € | 1,562 | € | 167 | € | 2,405 | € | 4,134 |
* | na: not applicable |
(a) | In the Consolidated Statement of Financial Position, assets allocated to Holding & Corporate are those not considered to directly relate to the operations of our business segments, including: |
• | non-consolidated investments (e.g., DuPont shares); | |
• | non-operating short-term assets such as deferred tax assets; | |
• | equity affiliates, such as NBCU since May 12, 2004 and Veolia Environnement in 2002 and 2003; and | |
• | cash generated by divestitures in 2004: mainly 80% of Vivendi Universal’s stake in VUE and 15.3 % of Veolia Environnement. |
(b) | Includes Universal Studios Holding Corp. which holds a 20% stake in NBCU. |
(c) | Includes companies that Vivendi Universal has sold or intends to sell (Publishing and Internet through December 31, 2003 as well as VTI and Vivendi Valorisation). |
(d) | Deconsolidated on May 11, 2004. |
(e) | Includes Veolia Environnement, accounted for using the equity method since December 31, 2002 and deconsolidated on December 9, 2004. |
Note 27. | Related Party Transactions Which Occurred During the Years Ended December 31, 2004, 2003 and 2002 |
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December 31, | |||||||||||||
2004 | 2003 | 2002 | |||||||||||
(In millions of euros) | |||||||||||||
Assets | |||||||||||||
Other investments(a) | € | 435 | € | 598 | € | 559 | |||||||
Inventories and work-in-progress | 21 | 28 | — | ||||||||||
Accounts receivable | 147 | 69 | 154 | ||||||||||
Short-term loans receivable | 1 | 130 | 257 | ||||||||||
Liabilities | |||||||||||||
Long-term debt | 608 | (b) | — | — | |||||||||
Accounts payable | 169 | 51 | 116 | ||||||||||
Short-term borrowings | 17 | 77 | 9 | ||||||||||
Profit and Loss Account | |||||||||||||
Revenues | 465 | 408 | 414 | ||||||||||
Operating expenses | (500 | ) | (979 | ) | (919 | ) | |||||||
Financial income | 46 | 69 | 62 | ||||||||||
Financial expenses | (2 | ) | (206 | )(c) | (14 | ) | |||||||
€ | 9 | € | (708 | ) | € | (457 | ) | ||||||
(a) | Includes advances granted to Elektrim Telekomunikacja by Vivendi Universal and VTI (€379 million, net of provisions, as of December 31, 2004). Please refer to Note 8.3 “Portfolio investments — Other”. | |
(b) | In 2004, includes the promissory note to USI, a NBCU subsidiary, for€573 million, redeemed on January 28, 2005. Please refer to note 17.1 “Financial net debt as of December 31, 2004”. | |
(c) | In 2003, included the SFD debt forgiveness of€200 million granted by SFR. |
Agreement for exclusive first-broadcasting rights to NBCU studio’s production (NBCU accounted for using the equity method by Vivendi Universal since May 12, 2004) |
Telecom Développement (2002-2003) |
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Specific commitment given to SNCF |
Vivendi Universal and Veolia Environnement (2002-2003) |
Vinci Bonds (2002-2003) |
Theme parks (2002-2003) |
Priority option contract dated April 15, 1999 between Canal+, Group Jean-Claude Darmon, as an intermediary, and the soccer clubs of Monaco, Olympique de Marseille, Olympique Lyonnais (Lyon), Lens, Girondins de Bordeaux and Paris Saint Germain |
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Transactions with IAC (2002) |
— | VUE provided certain support services to IAC under a Transition Services Agreement. These services included use of pre-production, production and post-production facilities, information technology services, physical distribution, contract administration, legal services and office space. VUE earned $3.2 million during the period from January 1, 2002 to May 6, 2002 for these services. | |
— | VUE and IAC had an International Television Distribution Agreement under which all programming owned or controlled by IAC outside of the US was distributed by VUE. VUE earned a 10.0% distribution fee for these services. Additionally, VUE licensed certain television programming to IAC to be aired on its cable channels. VUE earned $9.7 million during the period from January 1, 2002 to May 6, 2002 for providing these services. VUE and IAC also had a Domestic Television Distribution Agreement under which IAC distributed certain of VUE’s programming in the US. VUE incurred fees of $0.5 million during the period from January 1, 2002 to May 6, 2002 for these services. | |
— | Under an agreement covering approximately 50 of VUE’s films, IAC earned a distribution fee for the distribution of these films in the US. IAC was responsible for collecting and remitting the net amount, after its fee, to VUE, except for amounts applied against the advance of fees initially given to VUE. An affiliate of VUE provided certain fulfillment services on behalf of IAC in the US and Canadian home video markets. Beginning January 1, 2002, VUE replaced the affiliate providing these services. VUE incurred fees of $6.8 million during the period from January 1, 2002 to May 6, 2002 for these services. | |
— | VUE had several other arrangements with IAC for the purchase of advertising time and the licensing of certain properties for merchandising. VUE incurred fees of $0.5 million during the period from January 1, 2002 to May 6, 2002 for these services. |
Loans to directors, officers and employees (2002-2003) |
Cooperation with Vodafone (2003-2004) |
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Edgar Bronfman, Jr. |
• | US pension plan |
— | review of minutes of meetings of shareholders, directors, committees of the board, and management committees for matters such as contracts, litigation, and authorization of fixed asset acquisitions or divestitures; | |
— | review with banks of items such as guarantees and endorsements; | |
— | review with internal and/or external legal counsel of pending litigation, claims (in dispute) and environmental matters as well as related assessments for unrecorded contingencies; | |
— | review of tax examiner’s reports, notices of assessments and income tax analyses for additional prior year amounts; | |
— | review with risk management, insurance agents and brokers of coverage for unrecorded contingencies; | |
— | review of related party transactions for guarantees and other commitments; and | |
— | review of all contracts and agreements. |
28.2. | Contractual Obligations and Commercial Commitments Given as of December 31, 2004, 2003 and 2002 |
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Total as of | |||||||||||||||||||||||||||||||||
Total as of | Payments due in | December 31, | |||||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||||||
Note | 2004 | 2005 | 2006 - 2007 | 2008 - 2009 | After 2009 | 2003 | 2002 | ||||||||||||||||||||||||||
(In millions of euros) | |||||||||||||||||||||||||||||||||
Recorded as liabilities in the Consolidated Statement of Financial Position | |||||||||||||||||||||||||||||||||
Long-term debt | 17.1 | € | 4,549 | € | — | € | 2,302 | € | 1,791 | € | 456 | € | 9,621 | € | 10,455 | ||||||||||||||||||
including capital leases | 17.1 | 440 | — | 8 | 84 | 348 | 196 | 274 | |||||||||||||||||||||||||
Bank overdrafts and other short-term borrowings | 17.1 | 1,744 | 1,744 | — | — | — | 4,802 | 9,177 | |||||||||||||||||||||||||
Sports rights(a) | 18 | 2,134 | 531 | 1,287 | 316 | — | 695 | 1,065 | |||||||||||||||||||||||||
Broadcasting rights(b)(*) | 36 | — | 3 | 22 | 11 | 370 | 506 | ||||||||||||||||||||||||||
Creative talent and employment agreements(c) | 121 | 13 | 52 | 33 | 23 | 220 | 250 | ||||||||||||||||||||||||||
Other | 84 | 41 | 14 | 2 | 27 | 231 | 240 | ||||||||||||||||||||||||||
Total | € | 8,668 | € | 2,329 | € | 3,658 | € | 2,164 | € | 517 | € | 15,939 | € | 21,693 | |||||||||||||||||||
Total as of | ||||||||||||||||||||||||||||
Total as of | Payments due in | December 31, | ||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||
2004 | 2005 | 2006 - 2007 | 2008 - 2009 | After 2009 | 2003 | 2002 | ||||||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||||||
Other contractual obligations and commercial commitments | ||||||||||||||||||||||||||||
Operating leases(d) | € | 1,628 | € | 274 | € | 443 | € | 376 | € | 535 | € | 1,384 | € | 1,868 | ||||||||||||||
Sports rights | — | — | — | — | — | — | 1,440 | (e) | ||||||||||||||||||||
Broadcasting rights(b)(*) | 2,081 | 645 | 548 | 250 | 638 | 1,740 | 2,690 | |||||||||||||||||||||
Creative talent and employment agreements(c)(*) | 828 | 363 | 327 | 105 | 33 | 1,503 | 1,473 | |||||||||||||||||||||
Real estate defeasance(f) | 240 | — | 240 | — | — | 947 | 846 | |||||||||||||||||||||
Other | 328 | 93 | 93 | 32 | 110 | 1,026 | 701 | |||||||||||||||||||||
Total | € | 5,105 | € | 1,375 | € | 1,651 | € | 763 | € | 1,316 | € | 6,600 | € | 9,018 | ||||||||||||||
(*) | The decrease in these commitments as of December 31, 2004 primarily results from the deconsolidation of VUE as of May 11, 2004. | |
(a) | Exclusivity contracts for broadcasting sporting events by Canal+ Group recorded in other non-current liabilities. As of December 31, 2004, they primarily include broadcasting rights to the coming three French Football National League 1 seasons (2005-2008) for€1,800 million. | |
(b) | Primarily contracts valid over several years related to the broadcasting of future film and TV productions, commitments to film productions and broadcasting rights at Canal+ Group and VUE (in 2003 and 2002). In 2004 Canal+ Group notably extended an agreement for first broadcast rights to all Twentieth Century Fox film features (covering 2007-2012). | |
(c) | Agreements in the normal course of business, which relate to creative talent and employment agreements principally at UMG, VUG and VUE (in 2003 and 2002). | |
(d) | Lease obligations assumed in the normal course of business for rental of buildings and equipment, as well as satellite capacities at Canal+ Group. | |
(e) | Exclusivity contracts for Canal+ Group broadcasting rights to French National Football League 1 matches for the seasons 2004-2007, on hold as of December 31, 2002. | |
(f) | Lease obligations related to the defeasance of real estate. Pursuant to Rule 04-03 issued on May 4, 2004 by the “Comité de la Régulation Comptable”, Vivendi Universal has fully consolidated as of January 1, 2004, Special Purpose Entities used for the defeasance of certain real estate assets. This consolidation resulted in (i) on the assets side, the recognition of certain real estate assets still defeased as of today, i.e., an increase of€245 million in “Property, plant and equipment”, and (ii) on the liabilities side, an increase of€333 million in “Long-term debt” (please refer to note 1.1 “New accounting policy: CRC Rule 04-03 issued on May 4, 2004 concerning the consolidation of Special Purpose Entities”). These amounts, recorded in the Consolidated Statement of |
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Financial Position as of January 1, 2004, do not include the two defeased office towers located at La Défense in Paris sold to German investors on June 29 and 30, 2004. They include (i) the third building located at La Défense sold to Philip Morris in 1998 and leased back to Vivendi Universal under a very long-term lease and (ii) two buildings in Berlin which were sold in 1996, the sales being coupled with very long-term leases. The recording in the Consolidated Statement of Financial Position of these assets leads to the cancellation of the related off-balance sheet commitments. In addition, the off-balance sheet commitments related to the two Philip Morris buildings sold in June 2004 were cancelled. Off-balance sheet commitments still existing in respect of the different buildings in La Défense and in Berlin have been reduced to (i) a rent guarantee, up to a maximum accrued amount of€16 million granted by Vivendi Universal to the buyer of one of two office towers sold in June 2004 and (ii) an annual rental guarantee of€12 million granted by Vivendi Universal to the buyer of the Berlin building Quartier 207 in 1996. This building has not been consolidated as of January 1, 2004 because the associated annual rental guarantees are to terminate in December 2006, following the exercise of the put option committing Dresdner Bank to buy it. The underlying debt related to this building is recorded as an off-balance sheet commitment. |
Canal+ Group |
Universal Music Group |
SFR Cegetel |
— | at a price of 75% of the market value of the company as determined by a group of experts should this value not exceed€627 million for the total amount of the capital, with a floor of€250 million; | |
— | for a fixed sum of€470 million if a group of experts value the capital between€627 million and€1,100 million; | |
— | for€470 million plus 35% of the value of the capital in excess of€1,100 million, as determined by a group of experts, if more than€1,100 million. |
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Maroc Telecom |
Holding & Corporate |
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Vivendi Telecom International |
Individual entitlement to training |
Commitments related to divestitures and restructuring |
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Transactions and guarantees | Amount | Expiry | ||
Put options to minority shareholders granted by Canal+ Group | Approximately€53 million of which€1 million were exercisable as of December 31, 2004 | — | ||
Put option on “The Inc.” records | — | 2007 | ||
Buy/sell agreement on 35% interest in Cegetel SAS held by SNCF | Price depends on the amount of realizable value of the company: | 2007-2010 | ||
— between 0 and€627 million: price equals to 75% of the realizable value (minimum€250 million); | ||||
— between€627 million and€1,100 million: price equals to€470 million; | ||||
— above€1,100 million: price equals to€470 million plus 35% of the value of the capital (in excess of€1,100). | ||||
UMTS license | 1% of revenues earned | 2021 | ||
Investment program agreed with the Moroccan government | MAD 2.8 billion (€250 million) | 2005 | ||
Stock guarantee granted by Vivendi Universal to Maroc Telecom employees over Maroc Telecom shares | Maximum of€22 million | 2007-2008 | ||
Shareholders’ governance agreement with members of the Bronfman family | — | 2005 | ||
Counter-guarantee on surety bonds | €7 million | — | ||
Obligations to GenRe | — | — | ||
Dispute between Vivendi Universal and InterActiveCorp | Letter of credit of $91 million to IAC | — | ||
Obligations related to the permission to use the Consolidated Global Profit System | — Creation of jobs (2,100 within 5 years) | 2009 | ||
— Payment of€5 million annually for 5 years | 2009 | |||
Counter guarantees to banks in connection with Spanish UMTS license | €55 million | — | ||
Individual entitlement to training | Approximately 207,000 hours in 2004 | — | ||
NBC-Universal transaction | ||||
— breaches of obligations relating to retained businesses and liabilities, and the divestiture of certain businesses | Capped at $2,087.9 million | — | ||
— obligation to cover the Most Favored Nation provisions | — 50% of every dollar of loss up to $50 million | — | ||
— 100% of all losses in excess for $50 million | — | |||
— violation of environmental laws and remedial actions indemnification of aggregate losses stemming from VUE operations | — 100% up to $15 million | 2009 | ||
— 50% for those greater than $15 million but not exceeding $57 million | 2009 | |||
— if Universal Parks & Resorts (UPR) is sold before May 11, 2008 | — Payment of 40% of the shortfall amount if any equal to the excess in value of these operations set at the time of the transaction over the sale proceeds, up to a maximal amount of $520 million | 2008 | ||
Divestiture of Canal+ Technologies | Specific guarantees capped at€4 million | — | ||
Divestiture of Canal+ Nordic | — Customary guarantees up to€22 million | 2005 | ||
— Specific guarantees capped at€50 million | 2010 | |||
Divestiture of Canal+ Belgique and Canal+ N.V. | — Customary guarantees up to€5 million for each transaction | 2005 | ||
— Other specific guarantees capped at€8 million | — | |||
Divestiture of the StudioExpand animation and entertainment operations and certain MultiThématiques assets | Guarantees capped at€27 million | 2014 | ||
Divestiture of Sportfive | Guarantees capped at€50 million | 2006 | ||
Divestiture of Canal+ Nederland | Guarantees capped at€4 million | 2006 | ||
Divestiture of fixed-line telecommunications in Hungary | Customary guarantees related, among other, to the license | — | ||
Divestiture of Monaco Telecom | — Guarantees capped at€90 million | 2006 | ||
— Specific guarantees capped at€20 million | 2009 | |||
Divestiture of Kencell | — Guarantees capped at $40 million | 2006 | ||
— Specific guarantees | — | |||
Divestiture of Houghton Mifflin | Guarantees relating to intellectual property, to the environment, to tax and employee matters and to share ownership | 2005-2007 | ||
Divestiture of 50% stake in Vizzavi | Customary guarantees | — | ||
Dismantling of MP3 operations | Guarantees to insurers | — | ||
Divestiture of Sithe | Guarantees capped at $480 million | 2005 |
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Transactions and guarantees | Amount | Expiry | ||
Sale of real estate assets | — Vendor warranties | 2007 | ||
— Autonomous first demand guarantees capped at€150 total | 2017 | |||
Divestiture of Aeroservice | Customary guarantees capped at $27.5 million | 2005 | ||
Divestiture of UCI | Customary guarantees capped at€135 million | 2007 | ||
Various other miscellaneous guarantees | Approximately€68 million | — |
Canal+ Group |
Universal Music Group |
Vivendi Universal Games |
SFR Cegetel |
Holding & Corporate |
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Total recorded in | |||||||||||||||||||||||||
the Consolidated | |||||||||||||||||||||||||
Maturity | Amount of asset | Statement of | Corresponding | ||||||||||||||||||||||
Nature of assets collaterized or pledged | Note | Inception Date | Date | pledged | Financial Position | percentage | |||||||||||||||||||
(In millions of euros) | |||||||||||||||||||||||||
On investments | |||||||||||||||||||||||||
— Pledge on Maroc Telecom shares (corresponding to a 35% interest) to guarantee payment of the put option granted to the Kingdom of Morocco in respect of a 16% stake in Maroc Telecom | 30 | April 2003 | nd** | (a) | 1,518 | (b) | na* | (c) | na* | ||||||||||||||||
— Pledge on NBC Universal shares equal to 125% of the promissory note issued to USI in order to guarantee this financing | 17.1 | May 2004 | May 2007 | (d) | 716 | na* | na* | ||||||||||||||||||
— Pledges on other investments | 1997 | nd** | 50 | 2,449 | 2 | % | |||||||||||||||||||
On cash and cash equivalents | |||||||||||||||||||||||||
— Miscellaneous cash collaterals | 2004 | nd** | 13 | 3,158 | ns*** | ||||||||||||||||||||
Total | 2,297 | na* | na* | ||||||||||||||||||||||
* | na: not applicable; **nd: not determined; ***ns: non significant |
(a) | This pledge was released on January 4, 2005. |
(b) | As these shares are consolidated, the amount indicated corresponds to the value of the shares in the statutory accounts of the holding company. |
(c) | As the pledged shares are shares of a consolidated company, they are eliminated in the Consolidated Statement of Financial Position. |
(d) | This pledge was released on January 28, 2005. |
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December 31, | ||||||||||||||
2004 | 2003 | 2002 | ||||||||||||
(In millions of euros) | ||||||||||||||
Pay-fixed interest rate swaps | ||||||||||||||
Notional amount of indebtedness | € | 2,356 | € | 6,321 | € | 8,492 | ||||||||
Average interest rate paid | 4.92 | % | 4.46 | % | 4,50 | % | ||||||||
Average interest rate received | 2.19 | % | 2.09 | % | 2.82 | % | ||||||||
Expiry: | ||||||||||||||
Due within one year | — | 2,668 | 1,818 | |||||||||||
Due between one and two years | 92 | } | } | |||||||||||
Due between two and four years | 1,654 | } | 3,043 | } | 4,410 | |||||||||
Due between four and five years | 610 | } | } | |||||||||||
Due after five years | — | 610 | 2,264 | |||||||||||
Pay-floating interest rate swaps | ||||||||||||||
Notional amount of indebtedness | € | 341 | € | 1,018 | € | 626 | ||||||||
Average interest rate paid | 2.34 | % | 3.65 | % | 2.85 | % | ||||||||
Average interest rate received | 4.12 | % | 6.33 | % | 5.80 | % | ||||||||
Expiry: | ||||||||||||||
Due within one year | 2 | 487 | 387 | |||||||||||
Due between one and two years | — | } | } | |||||||||||
Due between two and four years | 281 | } | 531 | } | 208 | |||||||||
Due between four and five years | — | } | } | |||||||||||
Due after five years | 58 | — | 31 | |||||||||||
Interest rate swap options | ||||||||||||||
Notional amount of indebtedness | € | 61 | € | 61 | € | — | ||||||||
Strike price | 5.42 | % | 5.42 | % | — | |||||||||
Expiry: | ||||||||||||||
Due between two and four years | 61 | 61 | — | |||||||||||
Interest rate collars | ||||||||||||||
Notional amount of indebtedness | € | — | € | 457 | € | — | ||||||||
Guarantee rate written | — | 4.60 | % | — | ||||||||||
Guarantee rate bought | — | 2.50 | % | — | ||||||||||
Expiry: | ||||||||||||||
Due between two and four years | — | } | 457 | — | ||||||||||
Due between four and five years | — | } | — |
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Due within | Due between one | Due between two | Due between four | Due after five | ||||||||||||||||||||
Total | one year(a) | and two years | and four years | and five years | years | |||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||
Financial gross debt including microhedging instruments | € | 6,293 | € | 3,775 | € | 855 | € | 1,004 | € | 229 | € | 430 | ||||||||||||
Cash and cash equivalents | (3,158 | ) | (3,158 | ) | — | — | — | — | ||||||||||||||||
Net balance before interest rate risk management | € | 3,135 | € | 617 | € | 855 | € | 1,004 | € | 229 | € | 430 | ||||||||||||
Notional amount of the swaps (off Consolidated Statement of Financial Position) | — | (2,017 | ) | 92 | 1,373 | 552 | — | |||||||||||||||||
Net balance after interest rate risk management | € | 3,135 | € | (1,400 | ) | € | 947 | € | 2,377 | € | 781 | € | 430 | |||||||||||
(a) | Including floating-rate debt. |
— | a positive change (appreciation of the US dollar) would lead to an increase of about 1.9% in revenue, 0.7% in operating income and 1.6% in net cash provided by operating activities; | |
— | a negative change (depreciation of the US dollar) would lead to a decrease of about 1.7% in revenue, 0.7% in operating income and 1.5% in net cash provided by operating activities. |
— | a positive change (appreciation of the US dollar) would lead to an increase of about 4.0% in revenue, 1.6% in operating income and 3.4% in net cash provided by operating activities; | |
— | a negative change (depreciation of the US dollar) would lead to a decrease of about 3.3% in revenue, 1.3% in operating income and 2.8% in net cash provided by operating activities. |
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December 31, | ||||||||||||||
2004 | 2003 | 2002 | ||||||||||||
(In millions of euros) | ||||||||||||||
Currency swaps: | ||||||||||||||
Notional amount | € | 2,870 | € | 1,834 | € | 2,217 | ||||||||
Sale against the euro | 979 | 864 | 1,437 | |||||||||||
Sale against other currencies | 701 | 369 | 93 | |||||||||||
Purchase against the euro | 475 | 224 | 594 | |||||||||||
Purchase against other currencies | 715 | 377 | 93 | |||||||||||
Expiry: | ||||||||||||||
Due within one year | 2,870 | 1,834 | 2,217 | |||||||||||
Forward contracts: | ||||||||||||||
Notional amount | € | 93 | € | 73 | € | 3,453 | ||||||||
Sale against the euro | 90 | — | 3,315 | |||||||||||
Sale against other currencies | — | 2 | 46 | |||||||||||
Purchase against the euro | 3 | 69 | 45 | |||||||||||
Purchase against other currencies | — | 2 | 47 | |||||||||||
Expiry: | ||||||||||||||
Due within one year | 93 | 73 | 3,453 |
USD | GBP | CHF | JPY | CAD | SEK | NOK | DKK | AUD | HKD | SGD | MXN | CZK | PLN | |||||||||||||||||||||||||||||||||||||||||||
(In millions of currency) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets | 2,728 | 1 | — | 70 | 570 | 37 | — | 13 | — | 170 | — | 366 | 26 | 275 | ||||||||||||||||||||||||||||||||||||||||||
Liabilities | (985 | ) | (478 | ) | (23 | ) | (23,045 | ) | — | — | (91 | ) | — | (30 | ) | — | (2 | ) | — | — | (102 | ) | ||||||||||||||||||||||||||||||||||
Net balance before management | 1,743 | (477 | ) | (23 | ) | (22,975 | ) | 570 | 37 | (91 | ) | 13 | (30 | ) | 170 | (2 | ) | 366 | 26 | 173 | ||||||||||||||||||||||||||||||||||||
Off-balance sheet balance | (1,836 | ) | 474 | 21 | 22,920 | (565 | ) | (58 | ) | 108 | (4 | ) | 29 | (169 | ) | — | (365 | ) | (25 | ) | (143 | ) | ||||||||||||||||||||||||||||||||||
Net balance after management | (93 | ) | (3 | ) | (2 | ) | (55 | ) | 5 | (21 | ) | 17 | 9 | (1 | ) | 1 | (2 | ) | 1 | 1 | 30 | |||||||||||||||||||||||||||||||||||
USD | GBP | CHF | JPY | CAD | SEK | NOK | DKK | AUD | HKD | SGD | MXN | CZK | PLN | |||||||||||||||||||||||||||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets | 2,004 | 1 | — | — | 343 | 4 | — | 2 | — | 16 | — | 24 | 1 | 68 | ||||||||||||||||||||||||||||||||||||||||||
Liabilities | (724 | ) | (680 | ) | (15 | ) | (164 | ) | — | — | (11 | ) | — | (17 | ) | — | (1 | ) | — | — | (25 | ) | ||||||||||||||||||||||||||||||||||
Net balance before management | 1,280 | (679 | ) | (15 | ) | (164 | ) | 343 | 4 | (11 | ) | 2 | (17 | ) | 16 | (1 | ) | 24 | 1 | 43 | ||||||||||||||||||||||||||||||||||||
Off-balance sheet balance | (1,348 | ) | 674 | 14 | 163 | (340 | ) | (6 | ) | 13 | (1 | ) | 17 | (16 | ) | — | (24 | ) | (1 | ) | (35 | ) | ||||||||||||||||||||||||||||||||||
Net balance after management | (68 | ) | (5 | ) | (1 | ) | (1 | ) | 3 | (2 | ) | 2 | 1 | — | — | (1 | ) | — | — | 8 | ||||||||||||||||||||||||||||||||||||
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December 31, | ||||||||||||||
2004 | 2003 | 2002 | ||||||||||||
(In millions of euros) | ||||||||||||||
Equity-linked swaps: | ||||||||||||||
Notional amount | € | 160 | € | 37 | € | 266 | ||||||||
Expiry: | ||||||||||||||
Due within one year | — | — | 132 | |||||||||||
Due between one and two years | 37 | } | } | |||||||||||
Due between two and four years | 70 | } | 37 | } | 11 | |||||||||
Due between four and five years | 53 | } | } | |||||||||||
Due after five years (maximum 8 years) | — | — | 123 | |||||||||||
Total return swaps: | ||||||||||||||
Notional amount | € | — | € | — | € | 788 | (a) | |||||||
Expiry: | ||||||||||||||
Due within one year | — | �� | 788 |
(a) | Relates to the AOL Europe total return swap put in place with LineInvest. This was unwound in 2003 following the exercise by AOL Time Warner of its call options on AOL Europe shares. |
December 31, | ||||||||||||||||||
Note | 2004 | 2003 | 2002 | |||||||||||||||
Call option purchased | ||||||||||||||||||
Vinci shares(a) | 17.1 | |||||||||||||||||
Number of shares | 6,817,684 | 6,817,684 | 5,266,390 | |||||||||||||||
Maximum exercise amount (in millions of euros) | € | 636 | € | 636 | € | 468 | ||||||||||||
Expiry | March 2006 | March 2006 | March 2006 | |||||||||||||||
Treasury shares(b) | ||||||||||||||||||
Number of shares | 30,877,644 | 35,106,349 | 36,084,147 | |||||||||||||||
Maximum exercise amount (in millions of euros) | € | 2,253 | € | 2,292 | € | 2,320 | ||||||||||||
Expiry | December 2008 | December 2008 | December 2008 | |||||||||||||||
Veolia Environnement warrants(c) | ||||||||||||||||||
Number of warrants | 218,255,690 | 218,255,690 | 218,255,690 | |||||||||||||||
Maximum exercise amount (in millions of euros) | € | 1,715 | € | 1,715 | € | 1,715 | ||||||||||||
Expiry | March 2006 | March 2006 | March 2006 | |||||||||||||||
Call option sold | ||||||||||||||||||
Veolia Environnement | 3.2 | |||||||||||||||||
Number of shares | — | 82,486,072 | 82,486,072 | |||||||||||||||
Exercise amount (in millions of euros) | — | € | 2,186 | € | 2,186 | |||||||||||||
Expiry | — | December 2004 | December 2004 |
(a) | These options were purchased in September 2003 in order to allow Vivendi Universal to deliver, if necessary, Vinci shares at the maturity date of the exchangeable bonds issued in March 2001. |
(b) | These options were purchased in June 2001 and December 2002 in order to allow Vivendi Universal to deliver shares on the exercise of stock option plans granted to employees. Based on the current stock price, no options are in the money. |
(c) | These warrants, given in December 2001 to Veolia Environnement shareholders, allow their holders to acquire Veolia Environnement shares for€55 per share at a ratio of one share for seven warrants. These warrants should have allowed Vivendi Universal to deliver |
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Veolia Environnement shares at the initial maturity date (March 2006) of the exchangeable bond issued in March 2001. This bond was redeemed in cash in March 2003 and, given the current market price of the Veolia Environnement share, these warrants should not be exercised. |
December 31, | |||||||||||||||||||||||||
2004 | 2003 | 2002 | |||||||||||||||||||||||
Carrying | Carrying | Carrying | |||||||||||||||||||||||
Value | Fair Value | Value | Fair Value | Value | Fair Value | ||||||||||||||||||||
(In millions of euros) | |||||||||||||||||||||||||
Financial assets | |||||||||||||||||||||||||
Other investments | € | 2,449 | € | 3,013 | € | 3,549 | € | 3,909 | € | 4,138 | € | 4,138 | (a) | ||||||||||||
Interest rate collars | — | — | — | 1 | — | — | |||||||||||||||||||
Currency swaps | 17 | 17 | 20 | 20 | 44 | 44 | |||||||||||||||||||
Forward exchange contracts | — | — | — | — | 106 | 106 | |||||||||||||||||||
Financial liabilities | |||||||||||||||||||||||||
Long-term debt | € | 4,549 | € | 4,760 | € | 9,621 | € | 10,294 | € | 10,455 | € | 10,622 | |||||||||||||
Interest rate swaps (including accrued interest)(b) | 162 | 163 | 228 | 257 | 241 | 257 | |||||||||||||||||||
Forward exchange contracts | — | — | 4 | 4 | — | — | |||||||||||||||||||
Put options on treasury shares(b) | — | — | — | — | 104 | 104 |
(a) | In 2002, due to provisions recognized, the net carrying value of investments corresponds to their fair value. |
(b) | In addition to accrued interest, provisions were recorded on these elements in respect of potential losses as of December 31, 2002 and 2003. |
28.7.5. | Credit Concentration and Counter-Party Risk |
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Rating agency | Rating date | Type of debt | Ratings | Outlook | ||||||
Standard & Poor’s | June 1, 2004 | Long term corporate | BBB- | } | Positive | |||||
Short term corporate | A-3 | } | (November 23, | |||||||
Senior unsecured debt | BBB- | } | 2004) | |||||||
Moody’s | October 22, 2004 | Long term senior unsecured debt | Baa3 | Stable | ||||||
Fitch Ratings | December 10, 2004 | Long term senior unsecured debt | BBB | Stable |
28.8. | Environmental Matters |
Note 29. | Stock Based Compensation as of December 31, 2004, 2003 and 2002 |
29.1. | Employee Stock Option Plans |
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December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
Expected life (in years) | 10.0 | 9.8 | 5.5 | |||||||||
Interest rate | 4.4 | % | 3.9 | % | 5.0 | % | ||||||
Volatility | 20.0 | % | 20.0 | % | 60.0 | % | ||||||
Dividend yield | 3.0 | % | 3.8 | % | 0 | % |
Exercise Price | |||||||||
of Stock | |||||||||
Stock Options | Options | ||||||||
Outstanding | Outstanding | ||||||||
Balance at December 31, 2002 | 48,715,827 | € | 58.5 | ||||||
Granted | 12,467,000 | 14.7 | |||||||
Payable | (234,792 | ) | 21.6 | ||||||
Cancelled | (3,125,277 | ) | 66.3 | ||||||
Balance at December 31, 2003 | 57,822,758 | € | 48.9 | ||||||
Granted | 8,267,200 | 20.7 | |||||||
Exercised | (1,674,669 | ) | 19.6 | ||||||
Payable | (4,741,765 | ) | 36.5 | ||||||
Cancelled | (1,488,466 | ) | 56.2 | ||||||
Balance at December 31, 2004 | 58,185,058 | € | 46.5 | ||||||
Weighted | |||||||||
Average | |||||||||
Exercise Price | |||||||||
of ADS | |||||||||
ADS Options | Options | ||||||||
Outstanding | Outstanding | ||||||||
Balance at December 31, 2002 | 48,461,321 | $ | 49.0 | ||||||
Granted | 1,510,592 | 19.4 | |||||||
Adjusted | 73 | 129.0 | |||||||
Exercised | (231,093 | ) | 14.4 | ||||||
Payable | (713,609 | ) | 33.3 | ||||||
Cancelled | (4,477,165 | ) | 49.1 | ||||||
Balance at December 31, 2003 | 44,550,119 | $ | 48.4 | ||||||
Granted | 1,684,280 | 36.2 | |||||||
Adjusted | 177 | 64.4 | |||||||
Exercised | (2,929,000 | ) | 18.7 | ||||||
Payable | (1,057,479 | ) | 36.8 | ||||||
Cancelled | (1,930,571 | ) | 64.1 | ||||||
Balance at December 31, 2004 | 40,317,526 | $ | 49.6 | ||||||
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Weighted | |||||||||||||||||||||
Weighted | Average | Weighted | |||||||||||||||||||
Average | Remaining | Average | |||||||||||||||||||
Number | Exercise | Contractual | Number | Exercise | |||||||||||||||||
Range of Exercise Prices | Outstanding | Price | Life | Vested | Price | ||||||||||||||||
(In euros) | (In years) | (In euros) | |||||||||||||||||||
Stock options in euros | |||||||||||||||||||||
Under€20 | 14,756,830 | € | 14.3 | 7.7 | 5,912,642 | € | 14.0 | ||||||||||||||
€20 - €30 | 8,182,000 | 20.7 | 9.4 | 1,000 | 20.7 | ||||||||||||||||
€30 - €40 | 1,598,730 | 31.9 | 1.1 | 1,572,356 | 31.9 | ||||||||||||||||
€40 - €50 | 9,293,236 | 47.4 | 4.0 | 9,293,236 | 47.4 | ||||||||||||||||
€50 - €60 | 771,926 | 56.1 | 4.7 | 556,922 | 57.2 | ||||||||||||||||
€60 - €70 | 5,449,565 | 62.3 | 2.5 | 5,449,565 | 62.3 | ||||||||||||||||
€70 - €80 | 12,738,615 | 74.0 | 3.2 | 12,738,615 | 74.0 | ||||||||||||||||
€80 and more | 5,394,156 | 94.6 | 3.7 | 5,394,156 | 94.6 | ||||||||||||||||
58,185,058 | € | 46.5 | 5.3 | 40,918,492 | € | 58.6 | |||||||||||||||
(In dollars) | (In years) | (In dollars) | |||||||||||||||||||
Stock options on ADS’s in US dollars | |||||||||||||||||||||
Under $20 | 2,856,579 | $ | 15.4 | 6.5 | 2,374,951 | $ | 15.6 | ||||||||||||||
$20 - $30 | 2,900,205 | 24.7 | 7.7 | 1,598,856 | 25.2 | ||||||||||||||||
$30 - $40 | 2,230,893 | 35.7 | 1.8 | 2,138,160 | 35.7 | ||||||||||||||||
$40 - $50 | 16,091,017 | 44.1 | 3.4 | 16,091,017 | 44.1 | ||||||||||||||||
$50 - $60 | 3,191,671 | 57.9 | 4.0 | 3,191,671 | 57.9 | ||||||||||||||||
$60 - $70 | 6,981,875 | 65.7 | 4.0 | 6,486,495 | 65.5 | ||||||||||||||||
$70 - $80 | 6,045,256 | 74.0 | 5.0 | 6,039,062 | 74.0 | ||||||||||||||||
$80 and more | 20,030 | 206.0 | 5.1 | 20,030 | 206.0 | ||||||||||||||||
40,317,526 | $ | 49.6 | 4.2 | 37,940,242 | $ | 50.7 | |||||||||||||||
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December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
Number of shares | 831,171 | 955,864 | 2,402,142 | |||||||||
Amount subscribed (in millions of euros) | 15 | 12 | 25 |
2004 | 2003 | |||||||||||||||||||||||||||||
Accounting | Voting | Ownership | Accounting | Voting | Ownership | |||||||||||||||||||||||||
Country | Method | Interest | Interest | Method | Interest | Interest | ||||||||||||||||||||||||
France | Parent company | Parent company | ||||||||||||||||||||||||||||
Vivendi Universal S.A. | ||||||||||||||||||||||||||||||
Canal+ Group | ||||||||||||||||||||||||||||||
Groupe Canal+ S.A. | France | C | 100% | 100% | C | 100% | 100% | |||||||||||||||||||||||
Canal+ S.A.(a) | France | C | 49% | 49% | C | 49% | 49% | |||||||||||||||||||||||
CanalSatellite S.A. | France | C | 66% | 66% | C | 66% | 66% | |||||||||||||||||||||||
StudioCanal S.A. | France | C | 100% | 100% | C | 100% | 100% | |||||||||||||||||||||||
MultiThématiques | France | C | 70% | 70% | C | 64% | 64% | |||||||||||||||||||||||
Universal Music Group | ||||||||||||||||||||||||||||||
Universal Studios Holding I Corp. | USA | C | 92% | 92% | C | 92% | 92% | |||||||||||||||||||||||
Universal International Music B.V. | Netherland | C | 100% | 92% | C | 100% | 92% | |||||||||||||||||||||||
Universal Music (UK) Holdings Ltd. | GB | C | 100% | 92% | C | 100% | 92% | |||||||||||||||||||||||
Universal Entertainment GmbH | Germany | C | 100% | 92% | C | 100% | 92% | |||||||||||||||||||||||
Universal Music K.K. | Japan | C | 100% | 92% | C | 100% | 92% | |||||||||||||||||||||||
Universal Music France S.A.S. | France | C | 100% | 92% | C | 100% | 92% | |||||||||||||||||||||||
Universal Music Group, Inc. | USA | C | 100% | 92% | C | 100% | 92% | |||||||||||||||||||||||
UMG Recordings, Inc. | USA | C | 100% | 92% | C | 100% | 92% | |||||||||||||||||||||||
Vivendi Universal Games | USA | C | 100% | 99% | C | 100% | 99% | |||||||||||||||||||||||
SFR Cegetel | ||||||||||||||||||||||||||||||
SFR(b) | France | C | 56% | 56% | C | 56% | 56% | |||||||||||||||||||||||
Cegetel S.A.S.(c) | France | C | 65% | 36% | C | 65% | 36% | |||||||||||||||||||||||
Maroc Telecom S.A.(d) | Morocco | C | 51% | 35% | C | 51% | 35% | |||||||||||||||||||||||
Mauritel(e) | Mauritania | C | 51% | 14% | — | — | — | |||||||||||||||||||||||
Vivendi Universal Entertainment/NBC Universal | ||||||||||||||||||||||||||||||
Universal Studios Holding I Corp. | USA | C | 92% | 92% | C | 92% | 92% | |||||||||||||||||||||||
Vivendi Universal Entertainment LLLP(f) | USA | — | — | — | C | 93% | 86% | |||||||||||||||||||||||
NBC Universal | USA | E | 20% | 18% | — | — | — | |||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||
Vivendi Telecom International S.A. | France | C | 100% | 100% | C | 100% | 100% | |||||||||||||||||||||||
Kencell S.A.(f) | Kenya | — | — | — | C | 60% | 60% | |||||||||||||||||||||||
Monaco Telecom S.A.M.(f) | Monaco | — | — | — | C | 55% | 55% | |||||||||||||||||||||||
Elektrim Telekomunikacja(g) | Poland | E | 49% | 49% | E | 49% | 49% | |||||||||||||||||||||||
Vivendi Universal Publishing S.A. | France | C | 100% | 100% | C | 100% | 100% | |||||||||||||||||||||||
Atica & Scipione(f) | Brazil | — | — | — | C | 98% | 49% | |||||||||||||||||||||||
Vivendi Universal Net(h) | France | — | — | — | C | 100% | 100% | |||||||||||||||||||||||
UGC | France | E | 38% | 38% | E | 38% | 38% | |||||||||||||||||||||||
Veolia Environnement S.A.(f) | France | — | — | — | E | 20% | 20% |
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(a) | Consolidated because Vivendi Universal (i) has majority control over the Board of Directors, (ii) no other shareholder or shareholder group is in a position to exercise substantive participating rights that would allow them to veto or block decisions taken by Vivendi Universal and (iii) it assumes the majority of risks and benefits pursuant to an agreement between Canal+ S.A. and Canal+ Distribution, a wholly-owned subsidiary of Vivendi Universal. Under the terms of this agreement, Canal+ Distribution guarantees Canal+ S.A. results in return for exclusive commercial rights to the Canal+ S.A. subscriber base. | |
(b) | SFR is owned 55.8% by Vivendi Universal, 43.9% by Vodafone, and 0.3% by individual shareholders. Under the terms of the shareholders’ agreement, Vivendi Universal has management control of SFR, majority control over the board of directors and appoints the chairman and CEO, majority control over the shareholders’ general meeting, and no other shareholder or shareholder group is in a position to exercise substantive participating rights that would allow them to veto or block decisions taken by Vivendi Universal. | |
(c) | In December 2003, Cegetel S.A. and Telecom Développement (a network operator, and subsidiary of SNCF) were merged into a new entity named Cegetel S.A.S. The capital of this company is owned 65% by SFR and 35% by SNCF. | |
(d) | As of December 31, 2004, Vivendi Universal owns a 35% interest in Maroc Telecom, the Kingdom of Morocco holds 50.1% and the remaining 14.9% is held by private investors following an IPO which led to the simultaneous listing of Maroc Telecom shares on the Casablanca and Paris stock exchanges in December 2004. Vivendi Universal consolidates Maroc Telecom because under company by-laws and shareholders’ agreements, Vivendi Universal has majority control over its supervisory board and management board. Under shareholders’ agreements, Vivendi Universal appoints three of the five members of the management board, appoints the chairman of the management board, exercises 51% of all voting rights at shareholders’ general meetings, granting it, under the majority rules set forth in the company’s by-laws, control over the shareholders’ general meeting, as well as over the supervisory and management boards of Maroc Telecom. | |
On November 18, 2004, Vivendi Universal and the Kingdom of Morocco agreed to the acquisition by Vivendi Universal of 16% of Maroc Telecom’s capital. Under the terms of the agreement, Vivendi Universal acquired, indirectly throughSociété de Participation dans les Télécommunications (100% subsidiary of Vivendi Universal) an additional 16% stake in Maroc Telecom. This acquisition, completed on January 4, 2005, allows Vivendi Universal, a strategic partner holding the operating control of Maroc Telecom since the beginning of 2001, to increase its stake from 35% to 51% and, thus, to perpetuate its control over the company. The stake held by the Kingdom of Morocco decreased from 50.1% to 34.1%. Indeed, beyond the shareholders’ agreements which granted Vivendi Universal the majority of votes at shareholders’ general meetings and at the supervisory board until December 30, 2005, Vivendi Universal’s control is now ensured as a result of (i) the direct holding, unlimited in time, of the majority of voting rights at shareholders’ general meetings and (ii) the right to appoint, pursuant to the company by-laws and shareholders’ agreements, three out of the five members of the management board and five out of the eight members of the supervisory board. The acquisition was completed on January 4, 2005 for a deal price of MAD 12.4 billion, or approximately€1.1 billion, including a premium for continuing control. Payment was made on January 4, 2005 and was financed 50% by long-term debt issued in Morocco of MAD 6 billion, or approximately€537 million. | ||
The agreement signed November 18, 2004 also terminated the obligations under the put option granted by Vivendi Universal to the Kingdom of Morocco concerning 16% of Maroc Telecom share capital. The pledge over the Maroc Telecom shares held by Vivendi Universal, implemented as a payment guarantee, was released on January 4, 2005 following the acquisition of the 16% stake in Maroc Telecom. | ||
(e) | Maroc Telecom has a 51% voting interest and approximately 41% ownership interest in Mauritel S.A., which was acquired in April 2001. This company, the incumbent telecom operator in Mauritania, operates both a fixed-line network and a mobile phone license through a wholly-owned subsidiary. In connection with this acquisition, the Islamic Republic of Mauritania and Maroc Telecom entered into a shareholders’ agreement which provided for, among others, the grant to the Mauritanian Government of veto rights relating to significant transactions. Since these veto rights expired on June 30, 2004, Maroc Telecom is now able to exercise exclusive control over Mauritel. As a result, this subsidiary, accounted for using the equity method as of January 1, 2004, has been fully consolidated since July 1, 2004. | |
(f) | Participations sold in 2004. | |
(g) | Please refer to note 7.3 “Equity accounting of Elektrim Telekomunikacja”. | |
(h) | Operations abandoned as of January 1, 2004. |
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Note 32 | Supplemental Disclosures Required Under US GAAP and Securities and Exchange Commission Regulations |
December 31, | |||||||||||||
2004 | 2003(a) | 2002(a) | |||||||||||
(In millions of euros) | |||||||||||||
French GAAP shareholders’ equity as reported in the Consolidated Statement of Financial Position | € | 13,621 | € | 11,923 | € | 14,020 | |||||||
Adjustments to conform to US GAAP:(b) | |||||||||||||
Business combinations/goodwill | 3,820 | 5,078 | 4,395 | ||||||||||
Impairment | (3,280 | ) | (7,705 | ) | (5,994 | ) | |||||||
Intangible assets | (298 | ) | (377 | ) | (131 | ) | |||||||
Financial instruments | 1,162 | (c) | 1,048 | (747 | ) | ||||||||
Employee benefit plans | (271 | ) | (232 | ) | (196 | ) | |||||||
Other | (151 | ) | (61 | ) | (208 | ) | |||||||
Tax effect | (120 | ) | 130 | 671 | |||||||||
14,483 | 9,804 | 11,810 | |||||||||||
Put options on Vivendi Universal treasury shares | — | — | (155 | ) | |||||||||
US GAAP shareholders’ equity | € | 14,483 | € | 9,804 | € | 11,655 | |||||||
(a) | Certain amounts have been reclassified to permit comparison with 2004. |
(b) | For 2004, 2003 and 2002 these adjustments impact the French GAAP Consolidated Statement of Financial Position as follows: |
• | Business combinations and goodwill: “Goodwill, net”. These adjustments mainly impact gross amount of goodwill due to differences in accounting standards between French and US GAAP. Please refer to note 32.6. “Summary of significant differences between accounting policies adopted by Vivendi Universal and US GAAP” | |
• | Impairment: “Goodwill, net”, “Other intangible asset, net” and “Property, plant and equipment, net” (mainly relates to real estate assets) | |
• | Intangible assets “Other intangible assets, net”. These adjustments mainly impact the accumulated amortization line for these assets | |
• | Financial instruments: “Marketable securities” and “Other investments” | |
• | Employee benefit plans: “Provisions” | |
• | Tax effect: “Deferred tax assets” and “Deferred tax liabilities” |
(c) | In 2004, it included the unrealized gains on equity securities classified as available-for-sale before tax for€636 million, of which€520 million related to the investment in Veolia Environnement and€101 million in respect of Sogecable. |
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Year Ended December 31, | |||||||||||||
2004 | 2003 | 2002 | |||||||||||
(In millions of euros) | |||||||||||||
French GAAP net income (loss) as reported in the Consolidated Statement of Income | € | 754 | € | (1,143 | ) | € | (23,301 | ) | |||||
Adjustments to conform to US GAAP: | |||||||||||||
Business combinations/goodwill(a) | 550 | 1,021 | 32 | ||||||||||
Impairment | (300 | )(b) | (767 | )(c) | (4,147 | ) | |||||||
Intangible assets | (150 | ) | (152 | ) | (23 | ) | |||||||
Financial instruments | (134 | ) | 155 | 1,363 | |||||||||
Employee benefit plans | (17 | ) | (66 | ) | (72 | ) | |||||||
Other(d) | (38 | ) | 50 | (2,108 | ) | ||||||||
Divestiture of 80% of Vivendi Universal interest in VUE(e) | 2,200 | — | — | ||||||||||
Tax effect | 68 | (428 | ) | 1,461 | |||||||||
US GAAP net income (loss) before cumulative effect of changes in accounting policy, after tax | 2,933 | (1,330 | ) | (26,795 | ) | ||||||||
Cumulative effect of changes in accounting policy, after tax | (12 | ) | (28 | )(f) | (17,062 | )(g) | |||||||
US GAAP net income (loss) | € | 2,921 | € | (1,358 | ) | € | (43,857 | ) | |||||
(a) | Amortization of goodwill under French GAAP is reversed, since goodwill is no longer amortized under US GAAP. |
(b) | In 2001, the impairment related to Elektrim Telekomunikacja recognized under French GAAP included an accrual for contingent losses (€300 million) that did not meet the FAS 5 criteria for accrual and therefore was not taken into account under US GAAP. Given the recent developments surrounding the ownership of the Elektrim Telekomunikacja stake into PTC (please refer to note 7.3 “Equity accounting of Elektrim Telekomunikacja”), the carrying value of this investment was fully impaired in the US GAAP consolidated statement of financial position, as it has been in the French GAAP consolidated statement of financial position since December 31, 2002. |
(c) | Included notably the impairment loss of€920 million recorded with respect to VUE (please refer to note 32.9 “NBC-Universal transaction completed on May 11, 2004”) offset by the lower impairment loss recorded with respect to UMG (€1,370 million under French GAAP versus€982 million under US GAAP). |
(d) | Except for the impact of the divestiture of the investment in BSkyB in 2002, corresponding to -€2,025 million (please refer to note 32.13. “Divestiture of investment in BSkyB (2002)”), other adjustments mainly relate to less material reconciliation adjustments from French GAAP to US GAAP net income, thus not disclosed as specific line items: lease contracts, public service contracts in the environment business and reserves not recognized under US GAAP. |
(e) | Under French GAAP, the capital loss amounted to -€1,793 million (please refer to note 3.1 “NBC-Universal transaction completed on May 11, 2004”). Under US GAAP, this transaction generated a capital gain of€407 million (please refer to note 32.9 “NBC-Universal transaction completed on May 11, 2004”). |
(f) | Adoption of SFAS 150 “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” which affects the treatment applied by Vivendi Universal to VUE Class A preferred interests (-€39 million), and SFAS 143 “Assets Retirement Obligations” (€7 million) as well as changes in the depreciation method used in respect of certain equipment by Veolia Environnement (€4 million). |
(g) | Adoption of SFAS 142 Impairment. This impairment recorded under US GAAP in 2002, was effectively recorded under French GAAP in 2001. Please refer to note 32.7. “Impairment losses — SFAS 142”. |
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Year Ended December 31, | |||||||||||||
2004 | 2003 | 2002 | |||||||||||
(In millions of euros) | |||||||||||||
Income (loss) from continuing operations | 2,897 | (1,647 | ) | (22,808 | ) | ||||||||
Income (loss) from discontinued operations (net of tax of€0 million,€1 million and€64 million, respectively)(a) | 36 | 317 | (3,987 | ) | |||||||||
US GAAP net income (loss) before cumulative effect of changes in accounting policy, after tax | 2,933 | (1,330 | ) | (26,795 | ) | ||||||||
Cumulative effect of changes in accounting policy, after tax | (12 | ) | (28 | ) | (17 062 | ) | |||||||
US GAAP net income (loss) — basic | € | 2,921 | € | (1,358 | ) | € | (43,857 | ) | |||||
US GAAP net income (loss) — diluted | € | 2,971 | € | (1,358 | ) | € | (43,857 | ) | |||||
(a) | Discontinued operations are disclosed in note 32.12 “Discontinued operations”. |
Year Ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(In millions) | ||||||||||||
Weighted average number of shares outstanding under French GAAP | 1,072.1 | 1,071.7 | 1,087.4 | |||||||||
Treasury shares recorded as marketable securities | (0.6 | ) | (0.1 | ) | (0.5 | ) | ||||||
Weighted average number of shares outstanding under US GAAP | 1,071.5 | 1,071.6 | 1,086.9 | |||||||||
Vivendi Universal convertible 1.25% (OCEANE), fully repaid in cash in January 2004 | — | — | 18.8 | |||||||||
Bonds convertible and exchangeable into Vivendi Universal shares (OCEANE) (January 2005) | — | 16.7 | 16.7 | |||||||||
Notes mandatorily redeemable for new shares of Vivendi Universal (November 2005) | 72.8 | 78.7 | 78.7 | |||||||||
Exchangeable bonds issued in connection with the merger of Vivendi and Seagram in respect of Seagram’s former stock subscription plans granted to officers, management and employees | — | — | 0.3 | |||||||||
Vivendi Universal subscription plans | — | 1.8 | 2.7 | |||||||||
Vivendi Universal put options | — | — | 19.9 | |||||||||
Vivendi Universal stock option plan | 6.7 | — | 1.1 | |||||||||
Weighted average number of shares after dilutive effect under US GAAP | 1,151.0 | 1,168.8 | 1,225.1 | |||||||||
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Year Ended December 31, | |||||||||||||
2004 | 2003 | 2002 | |||||||||||
(In euros) | |||||||||||||
Earnings (loss) per share of common stock | |||||||||||||
Continuing operations | 2.70 | (1.54 | ) | (20.98 | ) | ||||||||
Discontinued operations | 0.04 | 0.30 | (3.67 | ) | |||||||||
Total before cumulative effect of changes in accounting policy, after tax | 2.74 | (1.24 | ) | (24.65 | ) | ||||||||
Cumulative effect of changes in accounting policy, after tax | (0.01 | ) | (0.03 | ) | (15.70 | ) | |||||||
US GAAP net income (loss) per share of common stock — basic | € | 2.73 | € | (1.27 | ) | € | (40.35 | ) | |||||
US GAAP net income (loss) per share of common stock — diluted | € | 2.58 | € | (1.27 | )(a) | € | (40.35 | )(a) | |||||
(a) | For the years ended December 31, 2003 and 2002, potentially dilutive incremental shares have been excluded from the computation of diluted earnings per share because the inclusion of such potentially dilutive incremental shares would be anti-dilutive to the Company’s reported net loss for these periods. |
Year Ended December 31, | ||||||||||||||
2004 | 2003 | 2002 | ||||||||||||
(In millions of euros) | ||||||||||||||
US GAAP net income (loss) | € | 2,921 | € | (1,358 | ) | € | (43,857 | ) | ||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||
Foreign currency translation adjustment | 985 | (1,367 | ) | (3,615 | ) | |||||||||
Unrealized gains (losses) on equity securities | 397 | (a) | 293 | (560 | ) | |||||||||
Unrealized gains (losses) on cash flow hedges | 16 | 161 | — | |||||||||||
Minimum pension liabilities adjustment | 29 | 67 | (19 | ) | ||||||||||
US GAAP comprehensive income (loss) | € | 4,348 | € | (2,204 | ) | € | (48,051 | ) | ||||||
(a) | In 2004, it included the change in unrealized gains (losses) on equity securities classified as available for sale for€670 million and the effect of the divestiture of Vivendi Universal’s interest in VUE for - €273 million. |
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32.5. | Reconciliation of Consolidated Statement of Cash Flows to US GAAP |
Year Ended December 31, | ||||||||||||||
2004 | 2003 | 2002 | ||||||||||||
(In millions of euros) | ||||||||||||||
Net cash provided by operating activities as reported in the Consolidated Statement of Cash Flows | € | 4,798 | € | 3,886 | € | 4,670 | ||||||||
Adjustments to conform to US GAAP: | ||||||||||||||
VE proportionate consolidation adjustment through June 30, 2002 | — | — | (591 | ) | ||||||||||
VE equity-accounted from July 1, 2002 | — | — | (969 | ) | ||||||||||
Net cash provided by operating activities under US GAAP | € | 4,798 | € | 3,886 | € | 3,110 | ||||||||
Net cash provided by (used for) investing activities as reported in the Consolidated Statement of Cash Flows | € | 2,986 | € | (3,900 | ) | € | 405 | |||||||
Adjustments to conform to US GAAP: | ||||||||||||||
VE proportionate consolidation adjustment through June 30, 2002 | — | — | 850 | |||||||||||
VE equity-accounted from July 1, 2002 | — | — | 190 | |||||||||||
Net cash provided by investing activities under US GAAP | € | 2,986 | € | (3,900 | ) | € | 1,445 | |||||||
Net cash used for financing activities as reported in the Consolidated Statement of Cash Flows | € | (7,517 | ) | € | (4,313 | ) | € | (3,792 | ) | |||||
Adjustments to conform to US GAAP: | ||||||||||||||
VE proportionate consolidation adjustment through June 30, 2002 | — | — | (145 | ) | ||||||||||
VE equity-accounted from July 1, 2002 | — | — | 1,067 | |||||||||||
Net cash used for financing activities under US GAAP | € | (7,517 | ) | € | (4,313 | ) | € | (2,870 | ) | |||||
32.6. | Summary of Significant Differences Between Accounting Policies Adopted by Vivendi Universal and US GAAP |
New US accounting standard applied by the Company from January 1, 2004 |
Principles of consolidation |
• | Use of the proportionate consolidation method |
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December 31, | ||||
2002 | ||||
(In millions | ||||
of euros) | ||||
Revenues | € | 5,570 | ||
Operating income | 464 | |||
Net income | 204 | |||
Net cash provided by operating activities | € | 591 | ||
Net cash used for investing activities | (850 | ) | ||
Net cash provided by financing activities | 145 |
• | Special purpose entity |
Business combinations and goodwill |
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Intangible assets |
Impairment of long-lived assets |
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Investments in debt and equity services |
Other Equity |
Financial Instruments with Characteristics of both Liabilities and Equity |
Treasury shares |
Employee benefit plans |
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Share based compensation |
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Year Ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(In millions of euros, except per | ||||||||||||
share amount) | ||||||||||||
Net income (loss) under US GAAP as reported | € | 2,921 | € | (1,358 | ) | € | (43,857 | ) | ||||
Add: Share based employee compensation expense included in reported net income, net of related tax effects | 13 | 24 | 68 | |||||||||
Deduct: Total share based employee compensation expense determined using the fair value method for all awards, net of related tax effects | (87 | ) | (214 | ) | (524 | ) | ||||||
Pro forma net income (loss) under US GAAP | € | 2,847 | € | (1,548 | ) | € | (44,313 | ) | ||||
Income (loss) per share — basic: | ||||||||||||
As reported | € | 2.73 | € | (1.27 | ) | € | (40.35 | ) | ||||
Pro forma | € | 2.66 | € | (1.44 | ) | € | (40.77 | ) | ||||
Income (loss) per share — diluted: | ||||||||||||
As reported | € | 2.58 | € | (1.27 | ) | € | (40.35 | ) | ||||
Pro forma | € | 2.52 | € | (1.44 | ) | € | (40.77 | ) |
Operating expenses |
• Shipping and handling costs |
• Slotting fees and cooperative advertising programs |
• Advertising costs |
New accounting standards to be applied by the Company from January 1, 2005 or January 1, 2006 |
• International financial reporting standards (“IFRS”) in 2005 |
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• SFAS No. 123R “Share Based Payment” in 2006 |
32.7. | Impairment Losses — SFAS 142 |
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Goodwill, net | ||||||||||||||||||||
Changes in | Foreign | |||||||||||||||||||
Net Balance at | Consolidation | Currency | Net Balance at | |||||||||||||||||
January 1, | Impairment | Scope and | Translation | December 31, | ||||||||||||||||
2004 | losses | other | Adjustment | 2004 | ||||||||||||||||
(In millions of euros) | ||||||||||||||||||||
Canal+ Group | € | 3,612 | € | (21 | ) | € | 190 | € | — | € | 3,781 | |||||||||
Universal Music Group | 3,677 | (5 | ) | (72 | ) | (299 | ) | 3,301 | ||||||||||||
Vivendi Universal Games | 108 | — | (15 | ) | (10 | ) | 83 | |||||||||||||
SFR Cegetel | 3,905 | — | (227 | ) | — | 3,678 | ||||||||||||||
Maroc Telecom | 787 | — | 880 | (12 | ) | 1,655 | ||||||||||||||
Non core operations | 79 | — | (79 | ) | — | — | ||||||||||||||
Total | € | 12,168 | € | (26 | ) | € | 677 | € | (321 | ) | € | 12,498 | ||||||||
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Goodwill, net | ||||||||||||||||||||
Changes in | Foreign | |||||||||||||||||||
Net Balance at | Consolidation | Currency | Net Balance at | |||||||||||||||||
January 1, | Impairment | Scope and | Translation | December 31, | ||||||||||||||||
2003 | losses | other | Adjustment | 2003 | ||||||||||||||||
(In millions of euros) | ||||||||||||||||||||
Canal+ Group | € | 3,909 | € | (165 | ) | € | (131 | ) | € | (1 | ) | € | 3,612 | |||||||
Universal Music Group | 6,112 | (982 | ) | (944 | ) | (509 | ) | 3,677 | ||||||||||||
Vivendi Universal Games | 120 | — | — | (12 | ) | 108 | ||||||||||||||
Vivendi Universal Entertainment | 4,743 | — | (4,743 | )(a) | — | — | ||||||||||||||
SFR Cegetel | 1,466 | — | 2,439 | (b) | — | 3,905 | ||||||||||||||
Maroc Telecom | 817 | — | (30 | ) | — | 787 | ||||||||||||||
Non core operations | 200 | (8 | ) | (113 | ) | — | 79 | |||||||||||||
Total | € | 17,367 | € | (1,155 | ) | € | (3,522 | ) | € | (522 | ) | € | 12,168 | |||||||
(a) | Under US GAAP, VUE was classified as asset held for sale. Please refer to note 32.9. “NBC-Universal transaction completed on May 11, 2004”. |
(b) | Please refer to note 32.11. “Purchase price allocation of the 26% interest in SFR (2003)”. |
Goodwill, net | ||||||||||||||||||||||||||||
Impairment losses (a) | ||||||||||||||||||||||||||||
Changes in | Foreign | |||||||||||||||||||||||||||
Net Balance | At adoption | Year ended | Consolidation | Currency | Net Balance at | |||||||||||||||||||||||
at January 1, | Reclassification | (January 1, | December 31, | Scope and | Translation | December 31, | ||||||||||||||||||||||
2002 | and Other | 2002) | 2002 | other | Adjustment | 2002 | ||||||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||||||
Canal+ Group | € | 16,435 | € | (350 | ) | € | (7,590 | ) | € | (5,336 | ) | € | 750 | € | — | € | 3,909 | |||||||||||
Universal Music Group | 15,862 | — | (3,900 | ) | (4,718 | ) | 49 | (1,181 | ) | 6,112 | ||||||||||||||||||
Vivendi Universal Games | 164 | (31 | ) | — | — | — | (13 | ) | 120 | |||||||||||||||||||
Vivendi Universal Entertainment | 9,360 | — | (2,660 | ) | (8,161 | ) | 7,866 | (1,662 | ) | 4,743 | ||||||||||||||||||
SFR Cegetel | 1,466 | — | — | — | — | — | 1,466 | |||||||||||||||||||||
Maroc Telecom | 1,247 | 600 | (700 | ) | (330 | ) | — | — | 817 | |||||||||||||||||||
Non core operations | 4,526 | 200 | (260 | ) | (807 | ) | (3,426 | ) | (33 | ) | 200 | |||||||||||||||||
Holding and Corporate | 1,368 | (1,368 | ) | — | — | — | — | — | ||||||||||||||||||||
Veolia Environnement | 7,499 | 900 | (1,522 | ) | — | (6,485 | ) | (392 | ) | — | ||||||||||||||||||
Total | € | 57,927 | € | (49 | ) | € | (16,632 | ) | € | (19,352 | ) | € | (1,246 | ) | € | (3,281 | ) | € | 17,367 | |||||||||
(a) | At December 31, 2002, impairment losses not only included€16,146 million relative to the annual impairment review of goodwill prescribed by SFAS 142, but also included€4,486 million relative to various entities held for sale (€2,564 million for Canal+ Group,€462 million for Internet operations,€206 million for VTI and€130 million for Vivendi Universal Publishing). Impairment losses did not include€430 million (€300 million for Elektrim Telekomunikacja and€130 million for Vizzavi Europe) as of January 1, 2002 and€1,115 million (€503 million for Sportfive,€374 million for Sogecable,€206 million for Telecom Développement and€32 million for Elektrim Telekomunikacja) at December 31, 2002. |
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Balance at | Foreign | ||||||||||||||||||||||||||||
December 31, | Currency | Changes in Scope | Balance at | ||||||||||||||||||||||||||
Addition/ | Divestiture/ | Translation | of Consolidation | December 31, | |||||||||||||||||||||||||
2002 | 2003(a) | Allocation | Reversal | Adjustment | and Other | 2004 | |||||||||||||||||||||||
(In millions of euros) | |||||||||||||||||||||||||||||
Other intangible assets | € | 20,417 | € | 16,218 | € | 600 | € | (64 | ) | € | (702 | ) | € | (1,433 | ) | € | 14,619 | ||||||||||||
Accumulated amortization | (6,870 | ) | (9,213 | ) | (1,000 | ) | 49 | 423 | 524 | (9,217 | ) | ||||||||||||||||||
Other intangible assets, net | € | 13,547 | € | 7,005 | € | (400 | ) | € | (15 | ) | € | (279 | ) | € | (909 | ) | € | 5,402 | |||||||||||
Other finite-lived intangible assets: | |||||||||||||||||||||||||||||
Audiovisual and music rights | 5,558 | 3,475 | (195 | ) | (22 | ) | (265 | ) | (659 | ) | 2,334 | ||||||||||||||||||
Trade names, market shares and editorial resources | 39 | 599 | (b) | (162 | ) | (2 | ) | (5 | ) | (14 | ) | 416 | |||||||||||||||||
Film costs, net of amortization | 3,599 | 550 | (83 | ) | — | (2 | ) | (119 | ) | 346 | |||||||||||||||||||
Telecom licenses | 967 | 923 | (44 | ) | — | (6 | ) | 8 | 881 | ||||||||||||||||||||
Software | 50 | 696 | 55 | 9 | (1 | ) | (100 | ) | 659 | ||||||||||||||||||||
Other | 367 | 498 | 29 | — | — | (25 | ) | 502 | |||||||||||||||||||||
Total | € | 10,580 | € | 6,741 | € | (400 | ) | € | (15 | ) | € | (279 | ) | € | (909 | ) | € | 5,138 | |||||||||||
Other indefinite-lived intangible assets: | |||||||||||||||||||||||||||||
Brands, trade names and other | 2,298 | 264 | (b)(c) | — | — | — | — | 264 | |||||||||||||||||||||
Multiple service operator (MSO) agreements | 669 | — | — | — | — | — | — | ||||||||||||||||||||||
Total | € | 2,967 | € | 264 | € | — | € | — | € | — | € | — | € | 264 | |||||||||||||||
(a) | Under US GAAP, VUE was classified as an asset held for sale. Please refer to note 32.9. “NBC-Universal transaction completed on May 11, 2004”. |
(b) | Mainly related to SFR market share (gross value of€650 million) and trade name (€264 million). Please refer to note 32.11. “Purchase price allocation of the 26% interest in SFR (2003)”. |
(c) | The significant reduction as at December 31, 2003 compared with December 31, 2002 primarily results from the divestiture of Telepiù in May 2003. |
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December 31, | |||||||||||||||||||||||||||||
2004 | 2003 | 2002 | |||||||||||||||||||||||||||
Canal+ | Canal+ | Vivendi Universal | Canal+ | Vivendi Universal | |||||||||||||||||||||||||
Group | Group | Entertainment(a) | Total | Group | Entertainment(a) | Total | |||||||||||||||||||||||
(In millions of euros) | |||||||||||||||||||||||||||||
Theatrical film costs: | |||||||||||||||||||||||||||||
Released, less amortization | € | 303 | € | 301 | € | 956 | € | 1,257 | € | 350 | € | 1,085 | € | 1,435 | |||||||||||||||
Completed, not released | — | 52 | 52 | 104 | 8 | 5 | 13 | ||||||||||||||||||||||
In production | 33 | 81 | 389 | 470 | 62 | 583 | 645 | ||||||||||||||||||||||
In development | — | — | 15 | 15 | — | 17 | 17 | ||||||||||||||||||||||
€ | 336 | € | 434 | € | 1,412 | € | 1,846 | € | 420 | € | 1,690 | € | 2,110 | ||||||||||||||||
Television costs: | |||||||||||||||||||||||||||||
Released, less amortization | 6 | 13 | 424 | 437 | 24 | 483 | 507 | ||||||||||||||||||||||
Completed, not released | — | — | 18 | 18 | — | 32 | 32 | ||||||||||||||||||||||
In production | 4 | 8 | 17 | 25 | 26 | 77 | 103 | ||||||||||||||||||||||
In development | — | — | — | — | — | 2 | 2 | ||||||||||||||||||||||
€ | 10 | € | 21 | € | 459 | € | 480 | € | 50 | € | 594 | € | 644 | ||||||||||||||||
Program costs, less amortization: | |||||||||||||||||||||||||||||
Current | — | — | 192 | 192 | — | 241 | 241 | ||||||||||||||||||||||
Non current | — | — | 211 | 211 | — | 303 | 303 | ||||||||||||||||||||||
€ | — | € | — | € | 403 | € | 403 | € | — | € | 544 | € | 544 | ||||||||||||||||
Total | 346 | 455 | 2,274 | 2,729 | 470 | 2,828 | 3,298 | ||||||||||||||||||||||
Less current portion | — | — | 192 | 192 | — | 241 | 241 | ||||||||||||||||||||||
Film costs, net of amortization | € | 346 | € | 455 | € | 2,082 | € | 2,537 | € | 470 | € | 2,587 | € | 3,057 | |||||||||||||||
(a) | In May 2004, Vivendi Universal divested 80% of its stake in VUE. Please refer to note 32.9 “NBC-Universal transaction completed on May 11, 2004”. |
The transaction |
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Classification of Vivendi Universal’s interest in VUE in the statement of financial position |
French GAAP |
US GAAP |
Accounting for the divestiture of VUE |
French GAAP |
US GAAP |
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Vivendi Universal’s | ||||
share(a) | ||||
(In millions of euros) | ||||
Cash proceeds | € | 2,845 | ||
Fair value of received interest in NBC | 4,552 | |||
Total consideration received | 7,397 | |||
Carrying value of the divested assets | (4,673 | ) | ||
Cost of the defeasance of covenants of the VUE Class A preferred interests | (607 | ) | ||
Net costs of the dividends on the VUE Class B preferred interests | (275 | ) | ||
Other costs | (314 | ) | ||
Capital gain before taxes | 1,528 | |||
Taxes | (244 | ) | ||
Capital gain after taxes | 1,284 | |||
Foreign currency translation adjustment reclassified to net income | (1,911 | ) | ||
Other comprehensive income | 114 | |||
Reversal of the impairment loss recognized as of December 31, 2003 | 920 | |||
Capital gain, net | € | 407 | ||
(a) | After minority interests who indirectly held 7.7% of VUE’s interests. |
Year Ended | ||||
December 31, 2004 | ||||
(In millions of euros) | ||||
Revenues | € | 8,139 | ||
Cost of revenues | (5,477 | ) | ||
Net income | 958 | |||
Current assets | 4,433 | |||
Non-current assets | 21,492 | |||
Total asset | € | 25,925 | ||
Current liabilities | 3,587 | |||
Non-current liabilities | 4,870 | |||
Minority interest(a) | 1,588 | |||
Shareholders’ equity | 15,880 | |||
Total liabilities and shareholders’ equity | € | 25,925 | ||
32.10. | Agreement to Acquire 16% of the Share Capital of Maroc Telecom (November 2004) |
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French GAAP |
US GAAP |
32.11. | Purchase Price Allocation of the 26% Interest in SFR (2003) |
26% interest in SFR | ||||
(In millions of euros) | ||||
Net assets acquired (26% interest) | € | 917 | ||
SFR tradename | 264 | |||
Market share | 650 | |||
Deferred tax liabilities, net(a) | (241 | ) | ||
Goodwill | 2,421 | |||
Purchase price | € | 4,011 | ||
32.12. | Discontinued Operations |
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Gain (loss) on divestitures(b) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | Net income (loss)(a) | 2004 | 2003 | 2002 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2004 | 2003 | 2002 | 2004 | 2003 | 2002 | Gross | Tax | Net | Gross | Tax | Net | Gross | Tax | Net | ||||||||||||||||||||||||||||||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2004 — divestitures | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Atica & Scipione | € | — | € | 87 | € | 90 | € | — | € | — | € | 5 | € | (8 | ) | € | — | € | (8 | ) | € | — | € | — | € | — | € | — | € | — | € | — | ||||||||||||||||||||||||||||
Monaco Telecom | 72 | 170 | 175 | 6 | 16 | 16 | (4 | ) | — | (4 | ) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Kencell | 47 | 100 | 105 | 4 | (5 | ) | (111 | ) | 38 | — | 38 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
2003 — divestitures | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comareg/Express-Expansion | — | 128 | 573 | — | 5 | (163 | ) | — | — | — | 152 | (17 | ) | 135 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Matel — VTH | — | 61 | 177 | — | (21 | ) | (294 | ) | — | — | — | 42 | — | 42 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Telepiù | — | 311 | 795 | — | (20 | ) | (1,444 | ) | — | — | — | 234 | 13 | 247 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Canal+ Nordic | — | 123 | 165 | — | (27 | ) | (253 | ) | — | — | — | 17 | 1 | 18 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Canal+ Benelux | — | 221 | 225 | — | (84 | ) | (380 | ) | — | — | — | 33 | 4 | 37 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
2002 — divestitures | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Publishing | — | — | — | — | — | 66 | — | — | — | (26 | ) | — | (26 | ) | (1,493 | ) | 64 | (1,429 | ) | |||||||||||||||||||||||||||||||||||||||||
Total | € | 119 | € | 1,201 | € | 2,305 | € | 10 | € | (136 | ) | € | (2,558 | ) | € | 26 | € | — | € | 26 | € | 452 | € | 1 | € | 453 | € | (1,493 | ) | € | 64 | € | (1,429 | ) | ||||||||||||||||||||||||||
(a) | Income (loss) from operations of discontinued component (less applicable income taxes if any) — before any gain (loss) on divestiture. |
(b) | Gain (loss) on divestitures (less applicable income taxes if any). |
32.13. | Divestiture of Investment in BSkyB (2002) |
The transaction |
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French GAAP |
US GAAP |
French GAAP |
US GAAP |
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Year Ended | |||||
December 31, on | |||||
the Basis | |||||
Described Above | |||||
2002 | |||||
(In millions | |||||
of euros) | |||||
Revenues | € | 43,063 | |||
Cost of revenues | (28,754 | ) | |||
Selling, general and administrative expenses | (10,871 | ) | |||
Other operating expenses, net | (550 | ) | |||
Operating income | 2,888 | ||||
Financing expense | (996 | ) | |||
Other financial expenses, net of provisions | (3,535 | ) | |||
Loss before gain on businesses sold, net of provisions, income tax, equity affiliates, goodwill amortization and minority interests | (1,643 | ) | |||
Gain on businesses sold, net of provisions | 1,694 | ||||
Income tax | (2,416 | ) | |||
Loss before equity affiliates, goodwill amortization and minority interests | (2,365 | ) | |||
Equity in earnings of sold subsidiaries | 17 | ||||
Loss from equity affiliates | (685 | ) | |||
Goodwill amortization | (1,129 | ) | |||
Impairment losses | (18,442 | ) | |||
Loss before minority interests | (22,604 | ) | |||
Minority interests | (697 | ) | |||
Net loss | € | (23,301 | ) | ||
Basic loss per share | € | (21.43 | ) | ||
Adjustments to conform to US GAAP | |||||
Cumulative effect of changes in accounting policy, after tax, impairment resulting from adoption of FAS 142 | € | (15,540 | ) | ||
Business combination/goodwill | (36 | ) | |||
Impairment | (4,147 | ) | |||
Intangible assets | (5 | ) | |||
Financial instruments | 1,348 | ||||
Employee benefit plans | (70 | ) | |||
Other | (2,076 | ) | |||
Tax effect | 1,440 | ||||
US GAAP adjustments in respect of Veolia Environnement | (1,470 | ) | |||
Sub-total | (20,556 | ) | |||
US GAAP net loss | € | (43,857 | ) | ||
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Year Ended | |||||||
December 31, | |||||||
on the basis | |||||||
described above | |||||||
2002 | |||||||
(In millions | |||||||
of euros) | |||||||
Cash flow — operating activities | |||||||
Net loss | € | (23,301 | ) | ||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation and amortization | 23,163 | ||||||
Financial provisions and provisions related to businesses sold | 2,839 | ||||||
Gain on sale of property, plant and equipment and financial assets | (2,119 | ) | |||||
Undistributed earnings from equity affiliates, net of dividends | 840 | ||||||
Reversal of equity in (losses) earnings of businesses sold | (17 | ) | |||||
Deferred taxes | 1,704 | ||||||
Minority interests | 697 | ||||||
Changes in working capital | (517 | ) | |||||
Net cash provided by operating activities | 3,289 | ||||||
Cash flow — investing activities | |||||||
Capital expenditures | (2,837 | ) | |||||
Proceeds from sales of property, plant and equipment and intangible assets | 217 | ||||||
Purchases of investments | (4,682 | ) | |||||
Sales of investments | 9,714 | ||||||
Net decrease (increase) in financial receivables | (1,626 | ) | |||||
Sales (purchases) of marketable securities | 312 | ||||||
Net cash provided by investing activities | 1,098 | ||||||
Cash flow — financing activities | |||||||
Proceeds from issuance of borrowings and other long-term liabilities | 2,152 | ||||||
Principal payment on borrowings and other long-term liabilities | (1,515 | ) | |||||
Net increase (decrease) in short-term borrowings and other | (3,235 | ) | |||||
Notes mandatorily redeemable for new shares of Vivendi Universal | 767 | ||||||
Net proceeds from issuance of common shares | 63 | ||||||
Sales (purchases) of treasury shares | 1,973 | ||||||
Cash dividends paid | (1,243 | ) | |||||
Cash payment to InterActiveCorp | (1,757 | ) | |||||
Net cash used for financing activities | (2,795 | ) | |||||
Foreign currency translation adjustment | 978 | ||||||
Change in cash and cash equivalents | € | 2,570 | |||||
Cash and cash equivalents | |||||||
Beginning | € | 4,725 | |||||
Ending | € | 7,295 |
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Pension Benefits | Postretirement Benefits | |||||||||||||||||||||||
2004 | 2003 | 2002 | 2004 | 2003 | 2002 | |||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||
French GAAP net accrued liability in Consolidated Financial Statements | € | (242 | ) | € | (287 | ) | € | (310 | ) | € | (147 | ) | € | (154 | ) | € | (169 | ) | ||||||
Impact of transition obligation, prior service costs and actuarial gains and losses recognized with a different timing under local regulations and others | — | — | 1 | — | — | — | ||||||||||||||||||
US GAAP net accrued liability recognized | € | (242 | ) | € | (287 | ) | € | (309 | ) | € | (147 | ) | € | (154 | ) | € | (169 | ) | ||||||
Minimum liability adjustment(a) | (312 | ) | (328 | ) | (396 | ) | — | — | — | |||||||||||||||
US GAAP net accrued liability | € | (554 | ) | € | (615 | ) | € | (705 | ) | € | (147 | ) | € | (154 | ) | € | (169 | ) | ||||||
of which | ||||||||||||||||||||||||
Prepaid benefit cost | 24 | 33 | 73 | — | — | — | ||||||||||||||||||
Accrued benefit liability | (578 | ) | (648 | ) | (778 | ) | (147 | ) | (154 | ) | (169 | ) |
(a) | US GAAP requires the recognition of a liability when the accumulated benefit obligation exceeds the fair value of plan assets by an amount in excess of any accrued or prepaid pension cost reported. The additional liability is offset by an intangible asset, up to the amount of any unamortized prior service cost and the excess, if any, is recorded as a reduction in shareholders’ equity, net of tax. US GAAP does not permit the recognition of an asset if the fair value of the plan assets is less than the accumulated benefit obligation. |
Postretirement | ||||||||||||||||||||||||
Pension Benefits | Benefits | |||||||||||||||||||||||
2004 | 2003 | 2002 | 2004 | 2003 | 2002 | |||||||||||||||||||
(In millions of euros) | ||||||||||||||||||||||||
Service cost | € | 27 | € | 45 | € | 54 | € | 1 | € | — | € | 2 | ||||||||||||
Interest cost | 72 | 80 | 109 | 11 | 12 | 17 | ||||||||||||||||||
Expected return on plan assets | (46 | ) | (47 | ) | (83 | ) | — | — | — | |||||||||||||||
Amortization of prior service costs | 2 | (4 | ) | 4 | (1 | ) | (1 | ) | (1 | ) | ||||||||||||||
Amortization of actuarial gains and losses | 27 | 26 | 32 | 3 | 19 | 1 | ||||||||||||||||||
Curtailments / settlements and special termination benefits | 24 | (3 | ) | 85 | — | — | — | |||||||||||||||||
Write-off of prepaid on multi-employer scheme overtime | — | — | 3 | — | — | — | ||||||||||||||||||
Net benefit cost | € | 106 | € | 97 | € | 204 | € | 14 | € | 30 | € | 19 | ||||||||||||
32.16. | Share Based Compensation |
32.16.1. | Employee Stock Option Plans |
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32.16.2. | Employee Stock Purchase Plans |
32.17. | Restructuring Costs |
December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(In millions of euros) | ||||||||||||
French GAAP restructuring reserve: | ||||||||||||
Reorganization and restructuring costs(a) | € | 144 | € | 169 | € | 57 | ||||||
Accrual for exit activities relating to Seagram acquisition(b) | 14 | 16 | 56 | |||||||||
158 | 185 | 113 | ||||||||||
Adjustments to US GAAP | (19 | )(c) | (23 | ) | — | |||||||
US GAAP restructuring reserve | € | 139 | € | 162 | € | 113 | ||||||
(a) | Recorded in provisions in the Consolidated Statement of Financial Position (please refer to note 14 “Provisions as of December 31, 2004, 2003 and 2002”). |
(b) | Recorded in other non-current liabilities and accrued expenses in the Consolidated Statement of Financial Position (please refer to note 19 “Other non-current liabilities and accrued expenses as of December 31, 2004, 2003 and 2002”). |
(c) | Mainly concerned accruals that do not comply with US GAAP (including€22 million regarding the restructuring plans initiated by SFR Cegetel and Maroc Telecom as of December 31, 2004). |
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• | the unaudited financial statements of Elektrim Telekomunikacja in condensed format; | |
• | the unaudited estimated impact of the proportionate consolidation of Elektrim Telekomunikacja. |
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Elektrim Telekomunikacja | ||||||||||||
Year Ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(In millions of euros) | ||||||||||||
Revenues | € | — | € | 702 | € | 749 | ||||||
Operating income (loss) | (26 | ) | 89 | 125 | ||||||||
Income (loss) before gain (loss) on businesses sold, net of provisions, income tax, equity affiliates, goodwill amortization and minority interests | 153 | (120 | ) | (132 | ) | |||||||
Income (loss) before equity affiliates, goodwill amortization and minority interests | 153 | (42 | ) | (163 | ) | |||||||
Net income (loss) | € | 153 | * | € | (81 | ) | € | (1,063 | ) | |||
* | excluding equity in PTC’s earnings. |
Elektrim Telekomunikacja | |||||||||||||
December 31, | |||||||||||||
2004 | 2003 | 2002 | |||||||||||
(In millions of euros) | |||||||||||||
Long-term assets | € | — | € | 1,136 | € | 1,559 | (a) | ||||||
Current assets | 17 | 158 | 176 | ||||||||||
including cash and cash equivalents | 16 | 22 | 8 | ||||||||||
Total assets | € | 17 | € | 1,294 | € | 1,735 | |||||||
Shareholders’ equity | (671 | ) | (108 | ) | — | (a) | |||||||
Long-term debt(b) | 622 | 960 | 1,132 | ||||||||||
Other non-current liabilities and accrued expenses | — | 147 | 175 | ||||||||||
Bank overdrafts and other short-term borrowings | — | 40 | 182 | ||||||||||
Other short-term liabilities | 66 | 255 | 246 | ||||||||||
Total shareholders’ equity and liabilities | € | 17 | € | 1,294 | € | 1,735 | |||||||
(a) | After impairment losses recorded by Vivendi Universal in 2002. |
(b) | Before elimination of shareholder advances granted to Elektrim Telekomunikacja by Vivendi Universal and VTI of€622 million,€588 million and€595 million as of December 31, 2004, 2003 and 2002 respectively. |
Elektrim | ||||||||||||
Telekomunikacja | ||||||||||||
Year Ended | ||||||||||||
December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(In millions of euros) | ||||||||||||
Net cash provided by operating activities | na | * | na | * | na | * | ||||||
Net cash provided by (used for) investing activities | na | * | na | * | na | * | ||||||
Net cash provided by (used for) financing activities | na | * | na | * | na | * | ||||||
Change in cash and cash equivalents | na | * | na | * | na | * | ||||||
* | na: not available. |
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• | an increase of 2.5% in operating income and an increase of 3.0% in financial net debt on the basis of the proportionate consolidation of Elektrim Telekomunikacja and PTC; | |
• | a decrease of 0.4% in operating income and a decrease of 0.5% in financial net debt on the basis of proportionate consolidation of Elektrim Telekomunikacja based on financial statements in which PTC is not consolidated. |
• | an increase in consolidated revenues compared with the published financial statements of Vivendi Universal of€355 million for the year ended December 31, 2004 (+1.7%),€343 million for the year ended December 31, 2003 (+1.3%) and€364 million for the year ended December 31, 2002 (+0.6%); | |
• | an increase in operating income compared with the published financial statements of Vivendi Universal of€87 million for the year ended December 31, 2004 (+2.5%),€54 million for the year ended December 31, 2003 (+1.6%) and€61 million for the year ended December 31, 2002 (+1.6%); | |
• | an increase in total consolidated assets compared with the published financial statements of Vivendi Universal of€394 million as of December 31, 2004 (+0.9%),€394 million as of December 31, 2003 (+0.7%) and€553 million as of December 31, 2002 (+0.8%); | |
• | an increase in financial net debt compared with the published financial statements of Vivendi Universal of€94 million as of December 31, 2004 (+3.0%),€192 million as of December 31, 2003 (+1.7%) and€348 million as of December 31, 2002 (+2.8%). |
• | nil impact on consolidated revenues compared with the published financial statements of Vivendi Universal for the year ended December 31, 2004 and an increase in consolidated revenues compared with the published financial statements of Vivendi Universal of€19 million for the year ended December 31, 2003 (+0.1%) and€40 million for the year ended December 31, 2002 (+0.1%); | |
• | a decrease in operating income compared with the published financial statements of Vivendi Universal of -€13 million for the year ended December 31, 2004 (-0.4%), -€15 million for the year ended December 31, 2003 (-0.5%) and -€17 million for the year ended December 31, 2002 (-0.4%); | |
• | an increase in total consolidated assets compared with the published financial statements of Vivendi Universal of€106 million as of December 31, 2004 (+0.2%),€113 million as of December 31, 2003 (+0.2%) and€167 million as of December 31, 2002 (+0.2%); | |
• | a decrease in financial net debt compared with the published financial statements of Vivendi Universal of€8 million as of December 31, 2004 (-0.5%) and an increase in financial net debt compared with the published financial statements of Vivendi Universal of€12 million as of December 31, 2003 (+0.1%) and€82 million as of December 31, 2002 (+0.7%). |
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Vivendi Universal, S.A. |
By: | /s/Jean-Bernard Lévy |
Name: Jean-Bernard Lévy | |
Title: Chief Executive Officer |