Annual report 2014

Notes to the 2014 Statutory Financial Statements

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

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

Statutory Financial Statements

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Plan to sell GVT

On August 28, 2014, Vivendi’s Supervisory Board decided to enter

into exclusive negotiations with Telefonica to sell GVT (which it held

mainly through SIG 108, a 100% subsidiary of Vivendi). After receiving

a positive opinion from employee representatives, on September 18,

2014 it authorized the execution of an agreement with Telefonica for

the sale of GVT. This agreement, the key terms of which are described

below, represents a total enterprise value of €7.45 billion (based on the

stock market value and foreign exchange rates on the date the exclusive

negotiations were entered into with Telefonica), corresponding to a

2014 estimated EBITDA multiple of 10x. The closing of the transaction

is subject to certain conditions, including the approval by the relevant

regulatory authorities, and is expected to occur during the second

quarter of 2015.

Cash proceeds

at the completion date

€4.66 billion subject to the sale price adjustment, based, among other things, on exceptional changes in net working

capital, GVT’s bank debt (approximately €480 million), as well as certain restatements as defined contractually

by the parties, at the completion date of the sale. Depending on these adjustments and the actual numbers as of the

completion date, the amount of cash consideration paid, may be increased or decreased. Moreover, the cash proceeds,

net of adjustments, will also be decreased by any applicable taxes related to the sale, currently estimated

at approximately €500 million.

Consideration shares

7.4% interest in Telefonica Brasil (VIVO/GVT) and 5.7% interest (8.3% voting rights) in Telecom Italia.

Financing

Capital increase at Vivo to fund cash proceeds, guaranteed by Telefonica.

Conditions precedent

Completion of the transaction is subject to obtaining approvals from ANATEL (

Agência Nacional de Telecomunicações

)

and CADE (

Conselho Administrativo de Defesa Econômica

) in Brazil, and other conditions customary in this type of

transaction.

Commitments given

Limited representations and warranties.

Liquidity

With respect to Vivendi’s interest in the combined VIVO/GVT entity:

maximum 180 day lock-up period starting as from the completion date of the transaction; and

tag-along rights.

Governance

No specific governance rights in VIVO/GVT and Telecom Italia.

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Sale of interest in Maroc Telecom group

On May 14, 2014, pursuant to the agreements entered into with Etisalat

on November 4, 2013, Vivendi sold, concomitantly with SFR, its 2% stake

in the capital of the Moroccan company, SPT, which held 53% of Maroc

Telecom. Vivendi received cash proceeds of €82.3 million (see Note 4,

Net Exceptional Items and Note 8, Current Assets).

The Maroc Telecom shares held by Vivendi (0.09%) were sold on the

market for €6.4 million.

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Sale of Activision Blizzard shares

In accordance with the agreements entered into on October 11, 2013, the

83 million Activision Blizzard shares retained by Vivendi were subject to

a two-tiered lock-up provision:

from October 11, 2013 until April 9, 2014, Vivendi cannot sell,

transfer, hedge or otherwise dispose of any Activision Blizzard shares

directly or indirectly; from April 10, until July 9, 2014, Vivendi can sell

Activision Blizzard shares provided they constitute no more than the

lesser of (i) 50% of Vivendi’s 83 million remaining shares and (ii) 9%

of the outstanding shares of Activision Blizzard; and

from July 10, 2014 until January 7, 2015, Vivendi was subject to

another lock-up provision; as from January 7, 2015, Vivendi may sell

its remaining Activision Blizzard shares without restriction.

On May 22, 2014, Vivendi sold a first tranche of 41.5 million Activision

Blizzard shares for $852 million (€623 million). The capital gain generated

on the sale amounted to €206.2 million (see Note 4, Net Exceptional

Items).

As of December 31, 2014, the book value of the remaining interest of

41.5 million Activision Blizzard shares is €417 million.

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New borrowings and credit facilities put in place/

reimbursed by Vivendi SA

On November 27, 2014, to further enhance its balance sheet, Vivendi

allocated a portion of the SFR sale proceeds to the early redemption of all

eight tranches of its euro and U.S. dollar denominated bonds with a make-

whole option, representing an aggregate principal amount of €4.25 billion

and $0.6 billion. This transaction, completed in December 2014, resulted

in a premium payment of €642 million, net of gains on interest rate risk

hedging (see Note 4, Net Exceptional Items and Note 17, Borrowings).

In addition, on November 27, 2014, following receipt of cash proceeds

from the sale of SFR, Vivendi renegotiated its €1.5 billion bank credit

facility to increase the amount to €2.0 billion, maturing in five years

(2019) with two one-year renewal options, and canceled all other existing

credit facilities for €5.6 billion (see Note 17, Bank borrowings).

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Annual Report 2014