Page 307 - 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 26 Contractual obligations and other commitments
(b) As part of the takeover of Neuf Cegetel, the approval from the Ministry of Economy, Industry and Employment, dated April 15, 2008, resulted in
additional commitments from Vivendi and its subsidiaries. They address competitor access and new market entrants to wholesale markets on SFR’s
fixed and mobile networks, acceptance on the fixed network of an independent television distributor if such a player appears, as well as the availability,
on a non-exclusive basis, of ADSL on eight new channels which are leaders in their particular field (Paris Première, Teva, Jimmy, Ciné Cinéma Famiz,
three M6 Music channels and Fun TV). Most of these commitments have expired, excluding those related to pay-TV, which will expire in April 2013.
(c) On August 30, 2006, the TPS/Canal+ Group merger was authorized, in accordance with the merger control regulations, pursuant to a decision of the
French Minister of Economy, Finance and Industry, subject to Vivendi and Canal+ Group complying with certain undertakings for a maximum period of
six years, with the exception of those commitments concerning the availability of channels and VOD, which could not exceed five years.
On October 28, 2009, the French Competition Authority opened an enquiry regarding the implementation of certain undertakings given by Canal+ Group
in connection with the merger of CanalSatellite and TPS.
For more information on the enquiry into compliance with certain undertakings given in connection with the merger of Canal Satellite and TPS, please
refer to Note 27, below.
On December 21, 2012, the French Council of State rejected Vivendi and Canal+ Group’s filed motions requesting the annulment of the French
Competition Authority’s decisions of September 20, 2011 and July 23, 2012. Under the first motion, the €30 million fine imposed on Canal+ Group was
reduced to €27 million. Under the second motion, the transaction was cleared once again, subject to compliance with 33 injunctions.
Canal+ Group has implemented a number of these injunctions, which have been by, for some since July 23, 2012 and others since October 23, 2012,
mainly focusing on:
– Acquisition of movie rights:
• by limiting the duration of output deals to three years, requiring separate agreements for different types of rights (1st pay-TV window, 2nd pay-TV
window, series, etc) and prohibiting output deals for French films; and
• by divesting its interest in Orange Cinema Series – OCS SNC or by adopting measures limiting its influence on Orange Cinema Series – OCS SNC.
– Distribution of pay-TV channels:
• by the distribution of a minimum number of independent channels, the distribution of any channel holding premium rights, and by drafting a model
distribution deal relating to independent channels included in the CanalSat offer;
• by the obligation to promote, in a transparent and separate manner, the distribution of exclusive independent channels on each owned platform
serving more than 500,000 subscribers; and
• by making all its own movie channels distributed by Canal+ Group (Cine+ channels) available to third-party distributors (unbundling).
– Video on demand (VOD) and subscription video on demand (SVOD):
• by separating contracts entered into for the purchase of VOD and SVOD rights on a non-exclusive basis, and not combining them with rights
purchased for linear distribution on pay-TV;
• by offering StudioCanal’s VOD and SVOD rights to any interested operator; and
• by forbidding exclusive distribution deals for the benefit of Canal+ Group’s VOD and SVOD offers on Internet Service Providers platforms.
These injunctions are imposed for a period of five years, renewable once. At the end of the five-year period, the French Competition Authority will
review the competition situation in order to determine whether the injunctions should be kept in place. If market conditions have changed significantly,
Canal+ Group will be able to request that these injunctions be waived or partially or totally revised. An independent trustee, proposed by Canal+ Group
and approved by the French Competition Authority on September 25, 2012, will be responsible for monitoring the injunctions implementation.
In addition, as part of the sale of a 20% interest in Canal+ France to Lagardère Active on January 4, 2007, Canal+ Group made tax and social
representations and warranties to Lagardère Active with a €162 million cap on the entities held by Canal+ France, excluding CanalSatellite,
MultiThématiques and the TPS entities. The tax and social guarantees expired on January 4, 2011.
Moreover, Vivendi granted a counter-guarantee, in favor of TF1 and M6 to assume commitments and guarantees made by TF1 and M6 in connection
with some of the contractual content commitments and other long term obligations of TPS and other obligations recognized in the Statement of
Financial Position of TPS. As of December 31, 2012, the remaining amount of these commitments was not significant and the counter-guarantee
expired on January 4, 2013.
(d) In connection with the divestiture of Canal+ Nordic in October 2003, Canal+ Group has retained distribution guarantees given in favor of Canal Digital
and Telenor Broadcast Holding by a former subsidiary, which guarantees are covered by a counter-guarantee given by the buyers.
(e) As part of the divestiture of NC Numéricâble on March 31, 2005, the Canal+ Group granted specific guarantees with a €241 million cap (including tax
and social risks). Specific risks relating to cable networks used by NC Numéricâble are included in this maximum amount and are counter-guaranteed
by France Telecom up to €151 million.
(f) In connection with the sale of its 49.9% interest in Sithe to Exelon in December 2000, Vivendi granted customary representations and guarantees.
Claims, other than those made in relation to foreign subsidiary commitments, are capped at $480 million. In addition, claims must exceed $15 million,
except if they relate to foreign subsidiaries or the divestiture of certain electrical stations to Reliant in February 2000. Some of these guarantees
expired on December 18, 2005. Some environmental commitments still exist and any potential liabilities related to contamination risks will survive for
an indefinite period of time.