Page 239 - 2012 Annual Report

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VIVENDI l 2012 l Annual Report
FINANCIAL REPORT – CONSOLIDATED FINANCIAL STATEMENTS – STATUTORY AUDITORS’ REPORT ON THE
CONSOLIDATED FINANCIAL STATEMENTS – STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS –
STATUTORY FINANCIAL STATEMENTS 4
4
III - CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 2 Major changes in the scope of consolidation
Following the closing of this transaction, Bolloré Group reported having
increased its interest in Vivendi SA to 4.41%. Subsequently, on October
16, 2012, it announced that it had crossed the 5% threshold in Vivendi SA’s
share capital.
On December 13, 2012, Vivendi’s Supervisory Board co-opted Vincent
Bolloré, Chairman and Chief Executive Officer of the Bolloré Group, as
a member of the Supervisory Board. This cooptation will be submitted
for ratification at the General Shareholders Meeting to be held on
April 30, 2013.
The purchase price allocation will be finalized within the 12-month period
as required by accounting standards. The final amount of goodwill may
differ significantly from the provisional goodwill of €310 million recorded
as of December 31, 2012.
2.3. STRATEGIC PARTNERSHIP AMONG CANAL+ GROUP, ITI, AND TVN IN POLAND
In accordance with the agreement announced on December 19, 2011, and
following the receipt on September 14, 2012 of unconditional approval
from the Polish Competition and Consumer Protection Authority, on
November 30, 2012, Canal+ Group, ITI, and TVN finalized the combination
of their Polish Pay-TV platforms, which remain controlled by Canal+ Group,
and the acquisition by Canal+ Group of a 40% interest in N-Vision, which
has been accounted for under the equity method since that date.
Following the merger of Canal+ Cyfrowy (Canal+ Group’s Cyfra+ platform)
with ITI Neovision (TVN’s “n” platform), which created a new satellite
TV platform in Poland, with a base of 2.5 million customers, Canal+
Group owns a 51% interest in the new structure “nc+” (compared to
a previous 75% interest in Canal+ Cyfrowy); TVN and UPC own a 32%
and 17% interest, respectively. As Canal+ Group has the majority on the
Supervisory Board and the power to govern the financial and operating
policies of “nc+”, the latter has been fully consolidated by Canal+ Group
since November 30, 2012.
Liquidity rights
The key liquidity rights under the agreements are as follows:
✱ At the level of N-Vision:
– ITI has a put option to sell an additional 9% of N-Vision to
Canal+ Group+, exercisable during a 90-day period beginning on
December 18, 2013, on the basis of a value equal to Group Canal+’
initial investment in N-Vision, i.e. for a cash price of €61 million.
Since the option is based on an equity affiliate interest given to a
third party it does not relate to a commitment to purchase a non-
controlling interest, and thus follows the accounting treatment of
a derivative instrument;
– Canal+ Group has a call option to acquire ITI’s remaining N-Vision
shares, exercisable at any time during the two 3-month periods
beginning February 29, 2016 and February 28, 2017, at the then-
prevailing market value;
– conversely, in the event that Canal+ Group does not exercise its call
option on ITI’s interest in N-Vision, ITI has a call option to acquire
Canal+ Group’s interest in N-Vision, exercisable at any time during
the two 3-month periods beginning May 30, 2016 and May 29,
2017, and between November 1, 2017 and December 31, 2017 and
between May 1, 2018 and June 30, 2018, at the then-prevailing
market value; and
– Canal+ Group and ITI each has the liquidity right, following the
above call option periods, to sell its entire interest in N-Vision.
✱ At the level of “nc+”:
– Canal+ Group has a call option to acquire TVN’s 32% interest in
“nc+” at market value, which is exercisable during the 3-month
periods beginning November 30, 2015 and November 30, 2016;
– if Canal+ Group exercises its call option, Canal+ Group will be
required to acquire ITI’s remaining interest in N-Vision; and
– in the event that Canal+ Group does not exercise its call option,
TVN has liquidity rights in the form of an Initial Public Offering of
its interest in “nc+”.
Purchase price allocation of ITI Neovision “n”
The purchase price of 100% interest in “n” was valued at €268 million.
The allocation of the fair value of the acquired assets and incurred or
assumed liabilities will be finalized within the 12-month period as
required by accounting standards. The final amount of goodwill may differ
significantly from the provisional goodwill of €213 million recorded as of
December 31, 2012 and valued according to the full goodwill method.
In addition, in accordance with accounting standards, the dilution of
Canal+ Group by 24% due to its interest in Canal+ Cytrowy resulted in a
€114 million income directly recognized in equity. Finally, “n” acquisition-
related costs amounted to €15 million, of which €8 million were incurred
in 2011. These costs were recognized as other charges from EBIT in the
Consolidated Statement of Earnings and as investing activities in the
Consolidated Statement of Cash Flows.
Interest in N-Vision
The 40% interest in N-Vision was acquired by Canal+ Group for
€277 million, paid in cash. Simultaneously, the €120 million loan granted
in December 2011 by Canal+ Group to ITI has been redeemed. As of
December 31, 2012, this interest was valued using the most recent
cash flow forecasts approved by the Management of TVN, resulting in a
€119 million impairment loss (including the additional put option of 9%
interest in N-Vision).