Annual report 2014

Financial Report | Statutory Auditors’ Report on the Consolidated Financial Statements |

Consolidated

Financial Statements

| Statutory Auditors’ Report on the Financial Statements | Statutory Financial Statements

Note 21. Borrowings and other financial liabilities

20.3.

UMG long-term incentive plan

Effective from January 1, 2010, UMG implemented long-term incentive

arrangements under which certain key executives of UMG are awarded

phantom equity units and phantom stock appreciation rights whose value

is intended to reflect the value of UMG. These units are simply account

units and do not represent an actual ownership interest in either UMG or

Vivendi. The equity units are notional grants of equity that will be payable

in cash upon settlement no later than 2015 or earlier under certain

circumstances. The stock appreciation rights are essentially options on

those notional shares that provide additional compensation tied to any

increase in value of UMG over the term.

Payouts under the plan generally coincide with terms of employment,

but can be accelerated or reduced under certain circumstances. The

values for both payouts are based upon third party valuations. While the

participants’ rights vest at the end of a fixed vesting period, compensation

expense is recognized over the vesting period as services are rendered. At

each closing date, the expense is recognized based on the portion of the

vesting period that has elapsed and the fair value of the units calculated

using an appropriate grant date model in accordance with IFRS 2.

During the third quarter of 2014, one executive, who benefited from

the plan, ended his employment contract. The phantom equity units

and phantom stock appreciation rights that were awarded to him were

therefore cancelled. Consequently, the amount previously accrued for

these rights was reversed (€19 million).

As of December 31, 2014, the remaining amount accrued under these

arrangements was €12 million (€26 million as of December 31, 2013). No

payments have been made to date.

Note 21.

Borrowings and other financial liabilities

(in millions of euros)

Note

December 31, 2014

December 31, 2013

Total

Long-term Short-term Total

Long-term Short-term

Bonds

21.1

1,950

7,827

6,633

1,194

Bank credit facilities (drawn confirmed)

21.2

2,075

2,014

Commercial paper issued

1,906

Bank overdrafts

168

143

Accrued interest to be paid

186

Other

Nominal value of borrowings

2,199

1,955

244

12,210

8,700

3,510

Cumulative effect of amortized cost and revaluation

due to hedge accounting

Commitments to purchase non-controlling interests

Derivative financial instruments

Borrowings and other financial liabilities

2,347

2,074

273 12,266

8,737

3,529

263

Annual Report 2014