177
Annual Report -
2013
-
Vivendi
Financial Report
| Statutory Auditors’ Report on the Consolidated Financial Statements | Consolidated
Financial Statements | Statutory Auditors’ Report on the Financial Statements | Statutory Financial Statements
4
SECTION 1 - Significant events
1.1.4.
Acquisition of Lagardère Group’s non-controlling interest in Canal+ France
On November 5, 2013, Vivendi acquired Lagardère Group’s 20% interest
in Canal+ France, for €1,020 million in cash. In accordance with IFRS 10,
Vivendi recorded this transaction as an acquisition of a non-controlling
interest. The difference between the consideration paid and the
carrying value of the acquired non-controlling interest was recorded
as a deduction from equity attributable to Vivendi SA shareowners
(-€636 million). In addition, Vivendi and Lagardère Group have settled
all disputes between them (please refer to Note 28 to the Consolidated
Financial Statements for the year ended December 31, 2013). Thereafter,
Canal+ France SA was merged with and into Canal+ Group SA, pursuant
to a simplified merger, with retroactive effect to January 1, 2013.
1.1.5.
Completion of the acquisition of EMI Recorded Music by Vivendi
and Universal Music Group (UMG)
As a reminder, on September 28, 2012 Vivendi and UMG completed
the acquisition of 100% of the recorded music business of EMI Group
Global Limited (EMI Recorded Music). EMI Recorded Music has been
fully consolidated since that date. The purchase price, in enterprise
value, amounted to £1,130 million (€1,404 million). The authorization by
the European Commission was notably conditional upon the divestment
of the Parlophone, Now, and Mute labels. In accordance with IFRS 5,
Vivendi reported these assets as assets held for sale at market value
(less costs to sell), in the Statements of Financial Position, until
completion of the sale.
On February 7, 2013, Vivendi and UMG announced that they had entered
into an agreement for the sale of Parlophone Label Group to Warner
Music Group for an enterprise value of £487 million to be paid in cash.
Following the approval by the European Commission on May 15, 2013,
the sale of Parlophone Label Group was completed on July 1, 2013 and
Vivendi received consideration of £501 million (€591 million), including
the provisional estimated contractual price adjustments (£14 million).
Moreover, the divestments of Sanctuary, Now, and Mute were
completed.
The aggregate amount of divestments made in compliance with the
conditions imposed by the regulatory authorities in connection with the
acquisition of EMI Recorded Music was £543 million, less costs to sell
(approximately €679 million, including €39 million in gains on foreign
exchange hedging and a consideration of €19 million remaining payable
as of December 31, 2013).
1.1.6.
Agreement to share a part of SFR’s mobile access networks
On January 31, 2014, SFR and Bouygues Telecom entered into a
strategic agreement to share a part of their mobile access networks,
following a period of negotiations announced in July 2013. They will
roll out a new shared network in an area covering 57% of the French
population. This agreement will enable both operators to improve their
mobile coverage and generate significant savings over time.
The agreement is based on two principles:
the creation of a joint company, to manage the shared base station
assets; and
entry by the operators into a RAN-sharing service agreement
covering 2G, 3G, and 4G services in the shared area.
This network-sharing agreement is similar to numerous arrangements
already existing in other European countries. Each operator will retain
its own innovation capacity as well as complete commercial and pricing
independence.
The network-sharing agreement took effect upon the signing of the
agreement and the shared network is expected to be completed by the
end of 2017.
From an accounting perspective, this agreement had no impact on the
accounts for fiscal year 2013.
In practice, Activision Blizzard and Maroc Telecom Group have been
reported as follows:
their contribution, until the effective sale, if any, to each line
of Vivendi’s Consolidated Statement of Earnings (before non-
controlling interests) has been grouped under the line “Earnings
from discontinued operations”. Their share of net income has been
excluded from Vivendi’s adjusted net income; and
their contribution, until the effective sale, if any, to each line of
Vivendi’s Consolidated Statement of Cash Flows has been grouped
under the line “Cash flows from discontinued operations”. Their
cash flow from operations (CFFO), cash flow from operations before
capital expenditures, net (CFFO before capex, net), and cash flow
from operations after interest and income taxes (CFAIT) have been
excluded from Vivendi’s CFFO, CFFO before capex, net, and CFAIT.
In accordance with IFRS 5, these adjustments have been applied to all
periods presented in the Consolidated Financial Statements (2013 and
2012) to ensure consistency of information.
Moreover, the contribution of Maroc Telecom Group to each line
of Vivendi’s Consolidated Statement of Financial Position as of
December 31, 2013 has been grouped under the lines “assets of
discontinued businesses” and “liabilities associated with assets of
discontinued businesses”. Its Financial Net Debt was excluded from
Vivendi’s Financial Net Debt as of December 31, 2013.
Please refer to Note 7 to the Consolidated Financial Statements for the
year ended December 31, 2013.
