##### 



Exhibit 15.1 (VIVENDI UNIVERSAL LOGO) IFRS 2004 transition Analysts Conference  April 14, 2005 This English language translation of IFRS 2004 transition prepared in French has been provided
solely for the convenience of English speaking readers. Despite all the efforts devoted to this
translation, certain errors, omissions or approximations may subsist. Vivendi Universal, its
representatives and employees decline all responsibility in this regard.




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PRELIMINARY REMARKS
    
    
    2IFRS CONSOLIDATED STATEMENT OF FINANCIAL POSITION
    
    
    3IFRS CONSOLIDATED STATEMENT OF EARNINGS
    
    
    4NOTE 1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES
    
    
    51.1. BASIS OF PREPARATION
    
    
    51.2. PRESENTATION OF STANDARDS AND INTERPRETATIONS ADOPTED IN THE PREPARATION OF THE 2004 IFRS FINANCIAL INFORMATION
    
    
    51.2.1. Standards adopted
    
    
    51.2.2. Description of accounting options associated with first time adoption of IFRS standards
    
    
    51.3. PRINCIPLES GOVERNING THE PREPARATION OF 2004 IFRS FINANCIAL INFORMATION
    
    
    61.3.1. Use of estimates
    
    
    61.3.2. Principles of consolidation
    
    
    61.3.3. Foreign currency translation
    
    
    61.3.4. Revenues from operations and associated costs
    
    
    61.3.5. Long-lived assets
    
    
    71.3.6. Media/ Entertainment content assets
    
    
    91.3.7. Current assets
    
    
    91.3.9. Liabilities
    
    
    91.3.10. Long-term debt  compound instruments
    
    
    101.3.11. Other liabilities
    
    
    101.3.12. Deferred taxes
    
    
    101.3.13. Stock-based compensation
    
    
    111.4. PRESENTATION PRINCIPLES USED FOR 2004 FINANCIAL INFORMATION
    
    
    111.4.1. Financial net debt
    
    
    111.4.2. Earnings from operations and Earnings before interest and income taxes
    
    
    111.4.3. Interest and other financial charges and income
    
    
    11NOTE 2.RECONCILIATION OF THE FINANCIAL STATEMENTS PREPARED UNDER FRENCH GAAP AND IFRS FINANCIAL INFORMATION
    
    
    122.1. SUMMARY OF RESTATEMENTS TO 2004 EQUITY AND EARNINGS
    
    
    122.2. RECONCILIATION OF EQUITY AS OF JANUARY 1, 2004
    
    
    132.2.1. RESTATEMENTS
    
    
    132.2.2. RECLASSIFICATIONS
    
    
    142.3. RECONCILIATION OF 2004 EARNINGS
    
    
    152.3.1. Restatements
    
    
    152.3.2. Reclassifications
    
    
    162.4. RECONCILIATION OF EQUITY AS OF DECEMBER 31, 2004
    
    
    172.4.1. Restatements
    
    
    172.4.2. Reclassifications
    
    
    182.5. RECONCILIATION OF FINANCIAL NET DEBT
    
    
    192.6. CONSOLIDATED STATEMENT OF CASH FLOWS
    
    
    192.7. NBC-UNIVERSAL TRANSACTION UNDER IFRS
    
    
    192.8. PRINCIPAL RESTATEMENTS
    
    
    20A. Foreign currency translation adjustments (IFRS 1)
    
    
    20B. Repurchase of minority interests (IFRS 3)
    
    
    20C. Commitments to repurchase minority interests (IAS 32)
    
    
    20D. ORA and OCEANE bonds (IAS 32 / 39)
    
    
    21E. Available-for-sale assets (IAS 32 / 39)
    
    
    21F. Derivative financial instruments (IAS 32 / 39)
    
    
    22G. Business combinations
    
    
    22H. Special purpose entities (SIC 12)
    
    
    22I. Pension and retirement benefit obligations (IFRS 1/IAS 19)
    
    
    26J. Intangible assets (IAS 38)
    
    
    22K. Share-based payments (IFRS 2)
    
    
    23L. Revenues of telecom operators (IAS 18)
    
    
    232.9. PRINCIPAL RECLASSIFICATIONS
    
    
    24M. Non-current assets held for sale and discontinued operations (IFRS 5)
    
    
    24N. Media / Entertainment business content assets
    
    
    25O. Equity affiliates (IAS 28)
    
    
    25P. Other reclassifications in the Statement of financial position (IAS 1)
    
    
    25Q. Gain (loss) on the sale of activities and financial investments (IAS 1)
    
    
    25NOTE 3.BUSINESS SEGMENT DATA
    
    
    25
 1




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PRELIMINARY REMARKS Basis of preparation In application of European regulation 1606/2002 dated July 19, 2002 concerning international
standards, the consolidated financial statements of Vivendi Universal for the financial year ending
December 31, 2005, will be prepared in accordance with the IAS (International Accounting Standards)
/ IFRS (International Financial Reporting Standards) applicable as of December 31, 2005, as
approved by the European Union. The first financial statements published in accordance with
IAS/IFRS will be those for the 2005 financial year, with comparative figures for 2004 prepared
using the same primary basis of accounting. To provide comparative information, Vivendi Universal has prepared financial information for the
2004 financial year relating to the IAS / IFRS transition, which begins by outlining the expected
quantifiable impact of IFRS adoption on:  
    the consolidated statement of financial position as of the transition date, January 1,
2004, the date at which the confirmed impact of transition will be recorded in equity on
the publication of the 2005 consolidated financial statements,
    the financial position as of December 31, 2004 and the financial performance for the
2004 year. This information was
established under Vivendi Universals management responsibility
and was presented to the Audit Committee at their meeting of April 11, 2005. Given the remaining uncertainties concerning the standards and interpretations which will be
applicable as of December 31 2005, Vivendi Universal reserves the right to modify certain
accounting methods and options adopted during the preparation of this 2004 financial information,
on final and definitive reporting of the first IFRS financial statements. 2




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IFRS CONSOLIDATED STATEMENT OF FINANCIAL POSITION January 1,
    
    
    December 31,(In millions of euros)
    
    2004
    
    
    2004ASSETSGoodwill, net
    
    
    12,969
    
    
    
    13,181Media / Entertainment non current content assets, net
    
    
    2,971
    
    
    
    2,431Other intangible assets, net
    
    
    2,362
    
    
    
    2,177Property, plant and equipment, net
    
    
    5,768
    

    
    
    4,882Investments in equity affiliates
    
    
    2,096
    
    
    
    5,773Non current derivative instruments
    
    
    79
    
    
    
    125Cash deposits backing financing
    
    
    230
    
    
    
    59Other non current financial assets
    
    
    3,653
    
    
    
    3,628Deferred income tax assets
    
    
    1,094
    
    
    
    1,388Other non current assets
    
    
    87
    
    
    
    451Non current assets
    
    
    31,309
    
    
    
    34,095Inventories
    
    
    364
    
    
    
    315Current income tax receivables
    
    
    373
    
    
    
    772Media / Entertainment current content assets, net
    
    
    583
    
    
    
    418Accounts receivable and other
    
    
    5,673
    
    
    
    4,682Current derivative instruments
    
    
    64
    
    
    
    132Other short-term financial assets
    
    
    30
    
    
    
    30Cash and equivalents
    
    
    2,726
    
    
    
    3,1599,813
    
    
    
    9,508Assets held for sale
    
    
    13,897
    
    
    
    180Current assets
    
    
    23,710
    
    
    
    9,688TOTAL ASSETS
    
    
    55,019
    
    
    
    43,783EQUITY AND LIABILITIESShare capital
    
    
    5,893
    
    
    
    5,899Additional paid-in capital
    
    
    7,234
    
    
    
    7,313Retained earnings and others
    
    
    (277
    )
    
    
    2,586Equity associated with assets held for sale
    
    
    231
    
    
    
    Equity attributable to equity holders of the parent
    
    
    13,081
    
    
    
    15,798Minority interests
    
    
    3,961
    
    
    
    2,643Total equity
    
    
    17,042
    
    
    
    18,441Non current provisions
    
    
    843
    
    
    
    795Long-term debt
    
    
    7,416
    
    
    
    5,357Deferred income tax liabilities
    
    
    3,670
    
    
    
    3,395Other non current liabilities
    
    
    2,669
    
    
    
    2,833Non current liabilities
    
    
    14,598
    
    
    
    12,380Accounts payable
    
    
    9,441
    
    
    
    8,357Current income tax payables
    
    
    1,157
    
    
    
    1,298Current provisions
    
    
    355
    
    
    
    357Short-term borrowings
    
    
    5,611
    
    
    
    2,84216,564
    
    
    
    12,854Liabilities associated with assets held for sale
    
    
    6,815
    
    
    
    108Current liabilities
    
    
    23,379
    
    
    
    12,962Total liabilities
    
    
    37,977
    
    
    
    25,342TOTAL EQUITY AND LIABILITIES
    
    
    55,019
    
    
    
    43,783
 3




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IFRS CONSOLIDATED STATEMENT OF EARNINGS Year EndedDecember 31,(In millions of euros, except per share amounts)
    
    2004Revenues
    
    
    18,932Cost of revenues
    
    
    (9,885
    )Margin from operations
    
    
    9,047Selling, general and administrative expenses
    
    
    (5,788
    )Other operating expenses
    
    
    (100
    )Earnings from operations
    
    
    3,159Other income from ordinary activities
    
    
    89Other charges from ordinary activities
    
    
    (25
    )Income from equity affiliates
    
    
    244Earnings before interest and income taxes
    
    
    3,467Interest
    
    
    (414
    )Other financial charges
    
    
    (430
    )Other financial income
    
    
    1,693Interest and other financial income and charges
    
    
    849Earnings before income taxes and discontinued operations
    
    
    4,316Provision for income taxes
    
    
    (298
    )Earnings from continuing operations
    
    
    4,018Earnings from discontinued operations
    
    
    860Earnings for the year
    
    
    4,878Attributable to :Minority interests
    
    
    1,057Equity holders of the parent
    
    
    3,821Earnings attributable to discontinued operations per share  basic
    
    
    0.75Earnings attributable to discontinued operations per share  diluted
    
    
    0.75Earnings attributable to the equity holders of the parent per share  basic
    
    
    3.34Earnings attributable to the equity holders of the parent per share  diluted
    
    
    3.32
 4




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NOTE 1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES 1.1. Basis of preparation In application of European regulation 1606/2002 dated July 19, 2002 concerning international
standards, the consolidated financial statements of Vivendi Universal for the financial year ending
December 31, 2005, will be prepared in accordance with the IAS (International Accounting Standards)
/ IFRS (International Financial Reporting Standards) applicable as of December 31, 2005, as
approved by the European Union. The first financial statements published in accordance with
IAS/IFRS standards will be those for the 2005 financial year, with comparative figures for 2004
prepared using the same primary basis of accounting. To provide comparative information, Vivendi Universal has prepared in accordance with IFRS, an
transitional Statement of financial position as of January 1, 2004, the IFRS transition date,
recording the impacts of transition through equity. The financial information provided for the 2004
financial year only was prepared in compliance with IAS / IFRS applicable as of December 31, 2005,
as anticipated by Vivendi Universal. Given the remaining uncertainties concerning the standards and interpretations which will be
applicable as of December 31 2005, Vivendi Universal reserves the right to modify certain
accounting methods and options adopted during the preparation of the 2004 financial information, on
final and definitive reporting of the first IFRS financial statements 1.2. Presentation of standards and interpretations adopted in the preparation of the 2004 IFRS financial information 1.2.1. Standards adopted The 2004 IFRS financial information has been prepared based on standards and interpretation
published as of December 31, 2004 and adopted by the European Union. The options elected by Vivendi
Universal management are in line with the early adoption of certain standards and interpretations
not yet published or adopted but applicable on December 31, 2005. Vivendi Universal therefore prepared the 2004 IFRS financial information on the basis of the
following:  1.
    all mandatory IFRS/IFRIC standards and interpretations as of January 1, 2005. All these
standards and interpretations have been adopted by the European Union.2.
    early adoption of:  
    IAS 32 and 39 concerning financial instruments. Vivendi Universal is not impacted by any
sections of IAS 39 not adopted by the European Union. Vivendi Universal has consequently
applied IAS 39 in full to its 2004 IFRS financial information;
    IFRS 2 concerning share-based payments, including incentive plans (stock purchase and
subscription options) and stock purchase plans (Group savings plan) granted to employees.
    IFRS 5, which requires reclassification of activities, the disposal of which has been decided, as discontinued operations;
    IFRIC 4 concerning determining whether an arrangement contains a lease, which has not yet been adopted by the European Union.  3.
    the following options, pending publication of an IASB or IFRIC text on the matter:  
    Put options granted by Vivendi Universal to the holders of minority interests in its
subsidiaries are reported, in accordance with IAS 32, as financial liabilities at the
present value of the repurchase consideration.Pending publication of an IASB/IFRIC text, Vivendi Universal records the difference arising
on initial recognition of these options, between the carrying amount of the minority
interests and the present value of the repurchase consideration, and any subsequent changes
in this present value through goodwill.
    Pending an IFRIC interpretation, Vivendi Universal does not accrue loyalty coupons
granted to customers of its Telecom activities for the replacement of their mobile phone,
which do not result in an additional outflow of resources. In effect, these bonuses do not
represent a benefit greater than that granted to new customers on the initial signature of
a contract. Loyalty coupons convertible into free services are accrued. 1.2.2. Description of accounting options associated with first time adoption of IFRS
standards The 2004 IFRS financial information has been prepared in accordance with the provisions of IFRS 1
First time adoption of International Financial Reporting Standards. The opening Statement of
financial position has generally been restated for the retrospective application of accounting
policies adopted for IFRS financial reporting purposes. The impact of these restatements is
recorded directly through equity. The Group has adopted a number of options to not restate retrospectively certain assets and
liabilities offered by IFRS 1. (a) Business combinations
Vivendi Universal has chosen not to restate business combinations prior to January 1, 2004 in
accordance with standard IFRS 3. (b) Actuarial gains and losses on employee benefit plans
Vivendi Universal has decided to adopt the option provided for in IFRS 1, involving recording on
January 1, 2004 of unrecognized actuarial gains and losses against consolidated equity. (c) Foreign currency translation adjustments
Vivendi Universal has transferred to consolidated reserves foreign currency translation adjustments
as of January 1, 2004, relating to the translation into euro of the financial statements of
subsidiaries with foreign currencies as their accounting currencies,. (d) Measurement of certain intangible/tangible assets at fair value
Vivendi Universal has chosen not to apply the option provided for in IFRS 1, involving the
remeasurement, as of January 1, 2004, of certain intangible and tangible assets at their fair value
at that date. (e) Share-based compensation
Vivendi Universal has decided to apply the provisions of IFRS 2 solely to equity-based compensation
granted after November 7, 2002, for which the rights acquisition date falls after December 31,
2003. For all other IFRS standards, opening values for assets and liabilities as of January 1, 2004 have
been restated retrospectively as if the IFRS standards in force at December 31, 2005 had always
been applied. 5




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1.3. Principles governing the preparation of 2004 IFRS financial information The Vivendi Universal consolidated 2004 IFRS financial information has been prepared in accordance
with the historical cost principle, with the exception of certain asset and liability categories,
detailed below, pursuant to IFRS. The consolidated 2004 IFRS financial information is expressed in
euro, and all values are rounded to the nearest million, unless otherwise stated. Compliance with accounting standards The consolidated IFRS financial information for Vivendi Universal SA and all its subsidiaries has
been prepared in accordance with International Financial Reporting Standards (IFRS). 1.3.1. Use of estimates The preparation of financial statements in compliance with GAAP requires management of Vivendi
Universal to make certain estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. On a constant basis, management reviews its estimates and judgments based on historical experience
and on various other factors that are believed to be reasonable under the circumstances, the
results, of which, form the basis for making judgments about the carrying values of assets and
liabilities. Actual results could differ significantly from these estimates under different
assumptions or conditions. 1.3.2. Principles of consolidation Full consolidation: All companies in which Vivendi Universal has a controlling interest,
specifically when it has the power to direct the financial and operational policies of these
companies to obtain benefit from their operations, are fully consolidated. A controlling position is assumed to exist where Vivendi Universal holds, directly or indirectly, a
voting interest exceeding 50%, and where no other shareholder or group of shareholders exercises
substantive participating rights which would enable it to veto or block ordinary decisions taken by
Vivendi Universal. A controlling position also exists where Vivendi Universal, holding an interest of 50% or less in
an entity, possesses control over more than 50% of the voting rights by virtue of an agreement with
other investors, power to direct the financial and operational policies of the entity by virtue of
a statute or contract, power to appoint or remove from office the majority of the members of the
Board of Directors or equivalent management body, or the power to assemble the majority of voting
rights at meetings of the Board of Directors or equivalent management body. Vivendi Universal consolidates special purpose entities which it controls in substance because
where it has the right to obtain a majority of benefits, or where it retains the majority of
residual risks inherent in the special purpose entity or its assets. Equity accounting: Vivendi Universal equity-accounts affiliates over which it exercises significant
influence, and joint ventures in which it shares control with other shareholders under the terms of
a contract. Significant influence is assumed to exist where Vivendi Universal holds, directly or indirectly, at
least a 20% voting interest in an entity, unless it can be clearly demonstrated that this is not
the case. The existence of significant influence can be proven on the basis of other criteria, such
as representation on the Board of Directors or equivalent management body of the entity,
participation in the process of policy definition, the existence of material transactions with the
held entity or exchange of management personnel. Vivendi Universal has a December 31 year-end. Subsidiaries that do not have a December 31 year-end
prepare interim financial statements, except when their year-end falls within the three months
prior to December 31. The Consolidated Financial Statements include the accounts of Vivendi
Universal and its subsidiaries after elimination of material inter-company accounts and
transactions. Subsidiaries acquired are consolidated in the Group financial statements as from their acquisition
date, or for reasons of convenience and if the impact is not material, as from the date of
preparation of the most recent consolidated Statement of financial position. 1.3.3. Foreign currency translation Foreign currency transactions: Foreign currency transactions are initially recorded in the
functional currency at the transaction date exchange rate. At closing date, monetary assets and
liabilities denominated in a foreign currency are translated into the functional currency at the
closing date exchange rate. All foreign currency adjustments are expensed, apart from adjustments
on borrowing in foreign currencies, constituting a hedge for the net investment in a foreign
entity. These adjustments are allocated directly to equity until the divestiture of the net
investment. Financial statements of subsidiaries for which the functional currency is not the euro are
translated into euros as follows: all asset and liability accounts are translated at the year-end
exchange rate and all income and expense accounts and cash flow statements are translated at
average exchange rates for the year. The resulting translation gains and losses are recorded as
foreign currency translation adjustments in equity. 1.3.4. Revenues from operations and associated costs Revenues from operations are reported when it is probable that future economic benefits will be
obtained by the Group, and that these revenues can be reliably measured.  1.3.4.1.
    Vivendi Universal Entertainment (VUE) (divested on May 11, 2004) and Canal+
Group Filmed entertainment: Generally, theatrical films are for initial distribution in the worldwide
theatrical market followed by distribution in the home video, worldwide pay-TV, network exhibition,
television syndication and basic cable television markets. Television films and series may be
licensed for network exhibition, domestic and foreign syndication, cable and pay-TV, and home
video. Theatrical revenues are recognized as the films are exhibited. Revenues from television
licensing agreements are recognized when the films or series are available for broadcast, and all
other conditions of the sale have been met. Television barter syndication revenues (sales of
advertising time in lieu of cash fees for the licensing of program broadcast rights to a broadcast
station) are recognized upon both the commencement of the license period of the program and the
sale of advertising time pursuant to non-cancelable agreements, provided that the program is
available for its first broadcast. Home 6




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video product revenues, less a provision for estimated returns and allowances, are recognized upon
shipment and availability of the product for retail sale. Theatrical and television products are amortized and related participation and residual costs are
expensed based on the ratio of the current periods gross revenues to estimated total gross
revenues from all sources on an individual film forecast basis. Estimated losses, if any, are
provided in full in the current period earnings on an individual film forecast basis when such
losses are estimated. Estimates of total gross revenues can change significantly due to a variety
of factors, including the level of market acceptance of film and television products. Accordingly,
revenue estimates are reviewed periodically and amortization is adjusted as necessary. Such
adjustments could have a material effect on results of operations in future periods. Cost of revenues includes film and television amortization costs, participation and residual
expenses, theatrical print costs, home video inventory costs and theatrical, television and home
video marketing costs. Cable and network: Revenues from subscriber fees related to pay-TV, cable or satellite programming
are recognized as revenues in the period the service is provided. Advertising revenues are
recognized in the period during which the advertising commercials are broadcast. Certain contracts
with advertisers contain minimum commitments with respect to advertising viewership. In the event
that such minimum commitments are not met, the contracts require additional subsequent airings of
the advertisement. As a result, provisions are recorded against advertising revenues for viewer
shortfalls (makegoods) until such subsequent airings are conducted. Subscriber management and
acquisition costs, as well as television distribution expenses, are included in cost of revenues. Theme parks and retail operations (sold in May 2004):Revenues at theme parks are usually
recognized at the time of visitor attendance, except for multi-day or annual passes, which Vivendi
Universal recognizes over the period of usage. Revenues for retail operations are recognized at the
point-of-sale. Cost of revenues includes the cost of food, beverage and merchandise, inventory
damage and obsolescence expenses, and duty and freight costs. Selling, general and administrative
expenses are comprised of indirect warehouse expenses, including receiving and inspection expenses.  1.3.4.2.
    Universal Music Group (UMG) Revenues from the sale of recorded music, net of a provision for estimated returns and allowances,
are recognized on shipment to third parties for products sold FOB shipping point, and on delivery
for products sold FOB destination.

Cost of revenues includes manufacturing and distribution costs, royalty and copyright expenses, and
artists and recording costs. Selling, general and administrative expenses include marketing and
advertising expenses, selling costs and bad debt expenses, and obsolete inventory.  1.3.4.3.
    Vivendi Universal Games (VUG) VUGs revenues, including income generated by the sale of boxes and prepaid cards for Massively
Multiplayer Online Games (MMOG), are recorded when ownership and related risks are transferred to
the distributor, net of a provision for estimated returns and allowances. The income generated by
subscriptions to online games is recorded on a straight-line basis over the duration of the
service. Cost of revenues includes manufacturing costs, warehousing, shipping and handling costs, royalty
expenses, research and development expenses, and the amortization of capitalized software
development costs.  1.3.4.4.
    Telecoms Revenues from telephone subscriptions are recognized on a straight-line basis over the invoicing
period. Revenues from incoming and outgoing traffic are recognized when the service is rendered.
Revenues from the sale of telecommunications equipment (mobile phone and other), net of
point-of-sale discounts and connection charges, are recognized on activation of the line. Customer
acquisition and loyalty costs for mobile phones principally consisting of rebates on the sale of
equipment to customers through distributors are recognized as a deduction from revenues. Customer
acquisition and loyalty costs consisting of premiums not related to the sale of equipment and
commissions paid to distributors are recognized as selling and general expenses. Sales of services provided to customers managed by SFR Cegetel and Maroc Telecom on behalf of
content providers (mainly toll numbers), are net of related expenses. Cost of revenues includes purchasing costs, interconnection and access costs, and network and
equipment costs. Selling, general and administrative expenses principally include commercial costs
consisting of marketing and customer care expenses.  1.3.4.5.
    Other costs Selling, general and administrativeexpenses principally include salaries and benefits, rent,
consulting and services fees, insurance costs, travel and entertainment expenses, administrative
department costs (e.g. finance, human resources, legal, information technology and headquarters),
and other operating expenses. Advertising costsare expensed as incurred. 1.3.5. Long-lived assets  1.3.5.1.
    Goodwill and business combinations Business combinations are accounted for by applying the purchase method. Under this method, assets
acquired and liabilities and contingent liabilities assumed are recognized at their fair value. Goodwill is measured at cost at the acquisition date, this being the excess of the cost of the
business combination over the purchasers interest in the fair value of the assets, liabilities and
any identifiable contingent liabilities acquired. Subsequently, goodwill is measured at cost less accumulated impairment losses. Goodwill is subject
to impairment tests each year, or more frequently where indications of impairment loss exist. In
the event of a loss in value, an impairment loss is recorded in Other charges from ordinary
activities. On the acquisition date, goodwill is allocated to each cash-generating unit likely to benefit from
the business combination. 7




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In the event of acquisition of an additional interest in a subsidiary, the excess of the
acquisition cost over the carrying amount of minority interests acquired is recognized as goodwill.  1.3.5.2.
    Research and development costs Research costsare reported as expenses when incurred. Development expenses are capitalized when
the recoverability of the project can reasonably be considered certain: Cost of software for rental, sale or commercialization: Capitalized software development costs
comprise costs incurred during the internal development of products. Software development costs are
capitalized when the technical feasibility of the software has been established, and they are
considered as recoverable. Technical feasibility is determined individually for each product.
Non-capitalized software development costs are immediately recorded in research and development
costs. Cost of internal use software: Direct internal and external costs incurred for the development of
computer software for internal use, including web site development costs, are capitalized during
the application development stage. Application development stage costs generally include software
configuration, coding, installation and testing. Costs of significant upgrades and enhancements
resulting in additional functionality are also capitalized. Maintenance and minor upgrade and
enhancement costs are expensed as incurred. Other research and development costs: All other research and development costs are expensed as
incurred.  1.3.5.3.
    Other intangible assets Intangible assets acquired separately are reported at cost, and intangible assets acquired in
connection with a business combination are reported at their fair value at acquisition date. The
historical cost model is applied to intangible assets subsequent to their initial recognition.
Amortization is accrued for assets with a finite lifetime. Telecom: Licenses to operate telecom networks are recorded at historical cost and amortized on a
straight line basis from the effective starting date of the service until maturity. Licenses to
operate in France are recognized in the amount of the fixed upfront fee paid at the granting of the
license. The variable fee which cannot reliably be determined (equal for the UMTS license to 1% of
the income generated by the activity) is recorded as an expense when incurred.  1.3.5.4.
    Property, plant and equipment Property, plant and equipment are carried at historical cost. Borrowing costs are expensed as
incurred. Depreciation is computed using the straight-line method based on the estimated useful
life of the assets, generally 15 - 60 years for buildings and 5 - 30 years for equipment and
machinery. Assets financed by finance lease contracts are capitalized at the lower of the fair
value of future payments and market value. They are depreciated on a straight-line basis over the
estimated useful life of the assets. Depreciation expenses on assets acquired under such leases are
included in depreciation expenses. Subsequent to initial recognition, the cost model is applied to tangible assets, including
investment real estate.  1.3.5.5.
    Impairment of long-lived assets Goodwill and intangible assets with an indefinite useful life are tested for impairment at the end
of each annual reporting period and whenever there is an indication that they may be impaired. The
carrying value of other long-lived assets is also subject to impairment tests whenever events or
changes in circumstance indicate that the carrying value may not be recoverable. Impairment tests
consist of comparing the carrying amount of an asset to its recoverable amount, defined as the
higher of fair value less costs to sell and the value in use to Vivendi Universal. The recoverable amount is determined individually for each asset unless the asset does not generate
cash inflows from continuing use that are largely independent of those from other assets or groups
of assets. In such cases, as for goodwill, the recoverable amount is determined for the
cash-generating unit. Vivendi Universal has defined its operating businesses as cash-generating
units: these correspond to operating segments or one level below where the relevant units have
economic characteristics which are distinct from the rest of the operating segment. The appropriate
level is generally that considered by Vivendi Universal management when assessing operating
performance. Value in use is equal to the sum of future cash flows expected to be obtained from the continuing
use of the asset (or the operating unit) and from its ultimate disposal. Cash flows used are
consistent with the most recent budgets and business plans approved by Management and presented to
the Board of Directors. The discount rate applied reflects current market assessments of the time
value of money and risks inherent to the asset (or operating unit). Fair value less costs to sell represents an estimate of the amount which could be obtained from the
disposal of the asset (or the operating unit) in an arms length transaction between knowledgeable
and willing parties, after deducting the costs of disposal. These values are determined based on market information (comparison with similar listed companies,
recent transactions and stock market prices) or in the absence of such information based on
discounted cash flows. Fair values are determined with the assistance of a third-party appraiser
appointed by Vivendi Universal. Where the fair value is less than the net carrying value of the cash-generating unit, this loss in
value is recognized in earnings before interest and income taxes in the amount of the difference
and offset in priority through goodwill.  1.3.5.6.
    Investments Investments are initially recognized at cost, corresponding to the fair value of the price paid,
including associated acquisition costs. Investments classified as available for sale are
subsequently measured at fair value. Profits and losses on investments available for sale are
recognized in equity until the investment is sold, collected or disposed of in another way, or
until it is demonstrated that the investment is impaired, at which time the accumulated profit or
loss previously reported in equity is expensed. For investments actively traded in organized public markets, fair value is determined by reference
to the published market price at closing date. For investments for which no published market price
exists in an active market, fair value, which is generally immaterial, is estimated. 8




---



##### 



1.3.6. Media/ Entertainment content assets VUE (divested on May 11, 2004) and Canal+ Group: Inventories of theatrical and television products
(film costs), which are produced or acquired for sale to third parties, are stated at cost less
accumulated amortization. Film costs principally consist of direct production costs, production
overheads and capitalized interest. A portion of Vivendi Universals cost to acquire Seagram
Company Ltd. (Seagram) in December 2000 was allocated to film costs, including an allocation to
previously released films whose initial release dates were at least three years prior to the
Vivendi Universal acquisition (library products). License agreements for program material are accounted for as a purchase of program rights. The
assets related to the program rights acquired and the liability for the obligation incurred are
recorded at their gross value when the license period begins and the program is available for its
initial broadcast. The asset is amortized primarily based on the estimated number of airings.
Amortization is computed generally on a straight-line basis as programs air, however, when
management estimates that the first airing of a program has more value than subsequent airings, an
accelerated method of amortization is used. Other costs related to programming, which include
program assembly, commercial integration and other costs, are expensed as incurred. Program rights, net of amortization and classified as current assets, include the portion of
unamortized costs of program rights allocated to network, first-run syndication and initial
international distribution markets. Acquired library products are amortized over 20 years. UMG: Recoverable long-term artist advances, which are recovered over the life of the artist, are
capitalized only in the case of proven artists, defined as those whose past performance and
current popularity support capitalization. Unearned balances are reviewed periodically and if
future performance is no longer assured, the balances are appropriately reserved. Royalties are
expensed with direct costs associated with the creation of record masters as declared. Acquired library products are amortized over 15 years. VUG: Royalties and license agreements consist primarily of prepayments for manufacturing royalties
and license fees paid to organizations for use of their trade names and licensed content. Also
included in royalties and license arrangements are prepayments made to independent software
developers under development arrangements that have alternative future uses. Media content assets are classified as non-current assets when they are expected to be realized
after more than one year and as current assets when they are expected to be realized within one
year. 1.3.7. Current assets Inventoriesare valued at the lower of cost and net realizable value. Cost comprises purchase costs, production costs and other supply and packaging costs. Net
realizable value is the estimated selling price in the normal course of business, less estimated
completion costs and estimated selling cost. 1.3.8. Assets held for sale and discontinued operations A long-lived asset or a group of assets and liabilities is held for sale where its carrying amount
will be recovered principally through its divestiture and not by continuing utilization. To meet
this definition, the asset must be available for immediate sale, and divestiture must be highly
probable. An operation is regarded as discontinued when the criteria for classification as an asset held for
sale have been met, or when Vivendi Universal has sold the asset. 1.3.9. Liabilities Interest-bearing loans- All loans are initially recognized at cost, corresponding to the fair
value of the amount received, net of costs relating to the loan. Interest-bearing loans are
subsequently valued at amortized cost, applying the effective interest rate method.
Premiums/discounts and loan issue costs are, therefore, deducted from Long-term debt and the
discount is unwound over the term of the loan. Commitments to repurchase minority interests- Vivendi Universal has granted commitments to
shareholders of certain of its fully consolidated subsidiaries to repurchase their minority
interests. These repurchase commitments may be conditional (e.g. put options) or firm (commitments
to repurchase minority interests at a future date). Pending IFRIC interpretation or a specific
IFRS, the following accounting treatment has been adopted provisionally in accordance with
prevailing IFRS:  -
    On initial recognition, the commitment to repurchase minority
interests is recognized as a financial debt for the present value of
the repurchase consideration under the put option or forward contract,
offset through minority interests and the balance through goodwill;-
    Subsequent changes in the value of the commitment are recognized by an
adjustment to goodwill, with the exception of the unwinding of the
discount recognized in Other financial charges;-
    Where applicable, at the time of initial recognition or the
recognition of subsequent changes, any expected loss on repurchase is
recognized in Other financial charges;-
    On expiry of the commitment, if the minority interests are not
repurchased, the entries previously recognized are reversed; if the
minority interests are repurchased the amount recognized in Long-term
debt is reversed, offset by the cash outflow relating to the
repurchase of the minority interests. Derivative financial instruments: Vivendi Universal uses various derivative financial instruments
mainly to manage its exposure to fluctuations in interest rates, foreign currency exchange rates
and stock prices for investments in equity and debt securities. These instruments include interest
rate swap and collar agreements, currency swap agreements and forward exchange contracts. Other
derivative financial instruments are used to hedge debt where principal repayment terms are based
on the value of Vivendi Universal stock. Most derivative instruments used by the Group do not
qualify as hedges for accounting purposes, and are measured at fair value. Fair value movements
during the period in respect of derivatives which do not qualify for hedge accounting, are recorded
as income or expenses of the current period. With regards to the management of foreign currency hedges, accounting choices do not impact
management practices, which are currently based on the systematic hedging of all foreign exchange
exposure: 9




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##### 



-
    Firm commitments (e.g. certain sports rights within Canal+
Group): hedge accounting requires the implementation of
compliant documentation and results in the symmetrical
recognition of fair value movements in the hedged item and the
hedging instrument, in earnings from operations;-
    Budgeted operating activities: no hedge accounting; as the
Statement of earnings is presented by function, the accounting
impact of changes in the hedged item and the hedging
instrument are recognized in earnings from operations. 1.3.10. Long-term debt  compound instruments Some financial instruments comprise a liability and equity component. This is the case with the
notes mandatorily redeemable for new shares of Vivendi Universal issued in November 2002. These
instruments were included in the consolidated financial statements under other equity in accordance
with French accounting principles. The various components of these instruments are accounted for in Equity and Long-term debt
according to their classification, as defined in IAS 32 Financial Instruments: Disclosure and
Presentation. The component classified as a financial liability is valued at issuance at the present value
(taking into account the credit risk at issuance date) of the future cash flows (including interest
and repayment of the nominal value) of an instrument with the same characteristics (maturity, cash
flows) but without any conversion option or reimbursement in shares. 1.3.11. Other liabilities Provisionsare recognized when at the end of the reporting period the Group has a legal,
regulatory or contractual obligation as a result of past events, it is probable that an outflow of
resources will be required to settle the obligation, and the obligation can be reliably estimated.
Where the effect of the time value of money is material, provisions are determined by discounting
expected future cash flows using a pre-tax discount rate that reflects current market assessments
of the time value of money. If no reliable estimate can be made of the amount of the obligation, no
provision is recorded and disclosure is made in the Notes to the consolidated financial statements. Employee benefit plans
In accordance with the laws and practices of each country in which it operates, Vivendi Universal
participates in, or maintains, employee benefit plans providing retirement pensions,
post-retirement health care, life insurance and post-employment benefits, principally severance, to
eligible employees. Retirement pensions are provided for substantially all employees through
defined contribution or defined benefit plans, which are integrated with local social security and
multi-employer plans in the first case and generally managed via Group pension plans in the second
case. Vivendi Universals funding policy is consistent with the applicable government funding
requirements and regulations of each country in which the group maintains a pension plan. The
defined benefit plans may be funded with investments in various instruments such as insurance
contracts and equity and debt investment securities, but not holdings in Vivendi Universal shares.
Contributions to defined contribution and multi-employer plans are expensed during the year. For defined benefit plans, pension expenses are determined by independent actuaries using the
projected unit credit method. This method considers the probability of employees remaining with
Vivendi Universal until retirement, expected changes in future compensation and an appropriate
discount rate for each country in which Vivendi Universal maintains a pension plan. This results in
the recognition of pension-related assets and liabilities and the related net expense over the
estimated term of service of Vivendi Universals employees. Furthermore, Vivendi Universal applies the following rules:  
    The fair value of plan assets is deducted from accrued liabilities;
    The actuarial gains and losses are amortized using the corridor method: actuarial gains
and losses in excess of 10% of the greater of the obligation and the fair value of plan
assets are divided by the average remaining service period of active employees (or, if all
or almost all of a plans participants are inactive, the average remaining life expectancy
of the inactive participants). Where financial assets exceed recognized obligations, an asset is recognized up to the maximum
cumulative amount of net actuarial losses and unrecognized past service costs. 1.3.12. Deferred taxes Deferred tax assets and liabilities are recognized using the Statement of financial position
liability method for all temporary differences existing at closing date between the tax base values
of assets and liabilities and their carrying value in the consolidated statement of financial
position.

Deferred tax liabilities are recognized for all taxable temporary differences:  
    except where the deferred tax liability results from goodwill impairment not deductible
for tax purposes, or initial recognition of an asset or liability in a transaction not
corresponding to a business combination, and which, at the transaction date, does not impact
accounting income or taxable profit or loss; and
    for taxable temporary differences relating to equity investments in subsidiaries,
affiliates and joint ventures, except where the date at which the temporary difference is
reversed can be controlled, and it is probable that the temporary difference will not be
reversed in the foreseeable future. Deferred tax assets are recognized for all deductible temporary differences, carry-forward of tax
losses and unapplied tax credits, insofar as it is probable that a taxable profit will be available
to make use of said deductible temporary differences, tax loss carry-overs and unapplied tax
credits:  
    except where the deferred tax asset associated with the deductible temporary difference
is generated by initial recognition of an asset or liability in a transaction which is not a
business combination, and which, at the transaction date, does not impact accounting income
or tax loss;
    for deductible timing differences associated with equity interests in subsidiaries,
affiliates and joint ventures, deferred tax assets are only reported insofar as it is
probable that the temporary difference will be reversed in the foreseeable future, and that
taxable profit exists to which the temporary difference can be allocated. The carrying amount of deferred tax assets is reviewed on each closing, and reduced insofar as it
is no longer probable that sufficient taxable profit will be available to benefit from all or part
of the deferred tax asset.

Deferred tax assets and liabilities are measured at the expected tax rates in the financial year
during which the asset will be realized or the liability settled, on the basis of the tax rates
(and tax regulations) adopted or substantially adopted at closing
date.

Taxes relating to items directly recognized in equity are reported under equity and not expensed. 10




---



##### 



1.3.13. Stock-based compensation Vivendi Universal maintains stock option incentive plans that grant options on its common shares to
certain senior executives and employees and also to certain employees of equity affiliates. The
purpose of these stock option plans is to align management interests with those of shareholders by
providing an additional incentive to improve company performance and increase the share price on a
long-term basis. Vivendi Universal also maintains employee stock purchase plans that allow substantially all its
full-time employees and those of certain of its subsidiaries and equity affiliates to purchase
shares in Vivendi Universal within reserved capital increases. Shares purchased by employees under
these plans are subject to certain restrictions relating to their sale or transfer. The grant of stock option plans and the offer to subscribe in the group savings plan represent a
benefit given to management, employees and retirees and represent additional compensation borne by
Vivendi Universal. This is valued at the fair value of the shares or derivative instruments of
common shares of Vivendi Universal issued. In the case of stock option plans granted to management
or employees, it represents the value of the option at grant date, evaluated using a binomial
model. In the case of increases in capital reserved to employees and retirees within the group
savings plan, it represents the discount on the subscription price, being the difference between
the subscription price of the shares and the share price on the day of grant (of a maximum of 20%
according to French law). This remuneration paid in shares or derivative instruments of common shares of Vivendi Universal is
recorded as a employee cost, offset against equity, and its recognition is spread over the length
of vesting of the benefit given:  -
    for the group savings plan: immediately, on subscription-
    for stock option plans: over a period of 3 years, by tranches of one third, in application of the rules of the Vivendi Universal plans. The dilution effect of the stock option plans which are in the process of vesting for management
and employees is reflected in the calculation of the diluted earnings
per share.

The Group benefits from the transitional arrangements of the standard IFRS 2 concerning share based
payments and has only applied IFRS 2 to instruments allocated after November 7, 2002 and which vest
after December 31, 2003. 1.4. Presentation principles used for 2004 financial information 1.4.1. Financial net debt Financial net debt includes:  -
    long and short-term financial gross debt less cash and cash equivalents. Financial
gross debt is comprised of notes and facilities, as well as other financial debt (including
treasury bills and debt related to capital leases);-
    obligations arising in respect of commitments to repurchase minority interests;-
    the fair value of derivative financial instruments. Derivatives with positive fair
values are recorded as assets in the consolidated statement of financial position on a
single line. Derivatives with negative fair value are included in long and short-term
financial gross debt, depending on whether they are classified as current or non current
liabilities;-
    cash deposits backing financing. 1.4.2. Earnings from operations and Earnings before interest and income taxes Earnings from operations include the margin from operations, selling, general and administrative
expenses, employee benefit plan costs, stock-based compensation, restructuring costs, changes in
the fair value of foreign currency risk hedges relating to operating activities and income from the
sale of tangible and intangible assets. Earnings before interest and income taxes include earnings from operations, other income from
ordinary activities, including dividends received from unconsolidated interests and interest
collected on long-term accounts receivable, other charges from ordinary activities, including non
current asset impairment, and income from equity affiliates. 1.4.3. Interest and other financial charges and income Interest includes interest charges on gross financial debt and interest income from cash and cash
equivalents. Other financial charges primarily include changes in financial instrument fair value (assets,
liabilities and derivatives), foreign exchange gains and losses (other than hedges relating to
operating activities classified in earnings from operations) and earnings from the divestiture of
securities available for sale, non-consolidated investments and consolidated companies not held
under discontinued operations. 11




---



##### 



NOTE 2.RECONCILIATION OF THE FINANCIAL STATEMENTS PREPARED UNDER FRENCH GAAP AND IFRS FINANCIAL INFORMATION 1.1. Summary of restatements to 2004 equity and earnings Please refer
    
    
    
    
    
    
    Earnings
    
    
    Foreign
    
    
    Unrealized gain /
    
    
    Impact ofto the
    
    
    Equity as of
    
    
    attributable to
    
    
    currency
    
    
    (losses) on
    
    
    change in
    
    
    
    
    
    
    Equity as ofparagraph
    
    
    January 1,
    
    
    equity holders of
    
    
    translation
    
    
    available-for-sale
    
    
    accounting
    
    
    
    
    
    
    December 31,(In millions of euros)
    
    mentioned
    
    
    2004
    
    
    the parent
    
    
    adjustment
    
    
    assets
    
    
    principles
    
    
    Other
    
    
    2004Equity attributable to equity holders of the parent under
French GAAP
    
    
    
    
    
    
    11,923
    
    
    
    754
    
    
    
    990
    
    
    
    
    
    
    
    (87
    )
    
    
    41
    
    
    
    13,621ORA / OCEANE (IAS 32/39)
    
    
    2.8
    .D
    
    
    844
    
    
    
    78
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    922Cancellation of foreign currency translation adjustments in
respect of VUE as
of January 1, 2004 (IFRS 1)
    
    
    2.7
    .
    
    
    
    
    
    
    2,490
    
    
    
    (2,490
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Commitment to repurchase minority interests (IAS 32/39)
    
    
    2.8

    .C
    
    
    11
    
    
    
    (7
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4Valuation difference of available-for-sale assets, excluding
VUE (IAS 32 / 39)
    
    
    2.8
    .E
    
    
    257
    
    
    
    
    
    
    
    
    
    
    
    632
    
    
    
    
    
    
    
    
    
    
    
    889Valuation difference of available-for-sale assets in respect
of VUE
    
    
    2.7
    .
    
    
    231

    
    
    
    (114
    )
    
    
    
    
    
    
    (88
    )
    
    
    
    
    
    
    (29
    )
    
    
    Mark-to-market of other financial instruments in respect of
VUE (IAS 32 / 39)
    
    
    2.7
    .
    
    
    (15
    )
    
    
    (29
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44
    
    
    
    Mark-to-market of other financial instruments (IAS 32 / 39)
    
    
    2.8
    .F
    
    
    230
    
    
    
    (122
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    119Elimination of goodwill amortization, excluding VUE (IFRS 3)
    
    
    2.8
    .G
    
    
    
    
    
    
    530
    
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    (17
    )
    
    
    509Elimination of goodwill amortization in respect
of VUE (IFRS 3)
    
    
    2.8
    .G
    
    
    
    
    
    
    85
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (85
    )
    
    
    Share-based payments (IFRS 2)
    
    
    2.8
    .K
    
    
    
    
    
    
    (41
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41
    
    
    
    Pensions (IAS 19)
    
    
    2.8
    .I
    
    
    (279
    )
    
    
    43
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    (234
    )Other restatements
    
    
    
    
    
    
    (121
    )
    
    
    154
    
    
    
    (98
    )
    
    
    60
    
    
    
    87
    
    
    
    (114
    )
    
    
    (32
    )Total restatements before tax and minority interests
    
    
    
    
    
    
    1,158
    
    
    
    3,067
    
    
    
    (2,585
    )
    
    
    604
    
    
    
    87
    
    
    
    (154
    )
    
    
    2,177Equity attributable to equity holders of the parent
    
    
    
    
    
    
    13,081
    
    
    
    3,821
    
    
    
    (1,595
    )
    
    
    604
    
    
    
    
    
    
    
    (113
    )
    
    
    15,798
 Foreign
    
    
    Unrealized gain /Equity as of
    
    
    Earnings
    
    
    currency
    
    
    (losses) on
    
    
    
    
    
    
    
    
    
    
    Equity as ofJanuary 1,
    
    
    attributable to
    
    
    translation
    
    
    available-for-sale
    
    
    Dividends paid
    
    
    
    
    
    
    December 31,(In millions of euros)
    
    
    
    
    
    2004
    
    
    minority interests
    
    
    adjustment
    
    
    assets
    
    
    by subsidiaries
    
    
    Other
    
    
    2004Minority interests under French GAAP
    
    
    
    
    
    
    4,929
    
    
    
    1,030
    
    
    
    36
    
    
    
    
    
    
    
    (1,849
    )
    
    
    (1,187
    )
    
    
    2,959Commitments to repurchase minority interests and other
restatements in
respect of VUE (IAS 32)
    
    
    2.7
    .
    
    
    (514
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    514
    
    
    
    Commitments to repurchase minority interests (IAS 32 / 39)
    
    
    2.8
    .C
    
    
    (442
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    106
    
    
    
    (336
    )Mark-to-market of other financial instruments (IAS 32 / 39)
    
    
    2.8
    .F
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )Share-based payments (IFRS 2)
    
    
    2.8
    .K
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    Pensions (IAS 19)
    
    
    2.8
    .I
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    Other restatements
    
    
    
    
    
    
    (12
    )
    
    
    33
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    23Total restatements before tax
    
    
    
    
    
    
    (968
    )
    
    
    27
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    627
    
    
    
    (316
    )Minority interests under IFRS
    
    
    
    
    
    
    3,961
    
    
    
    1,057
    
    
    
    34
    
    
    
    
    
    
    
    (1,849
    )
    
    
    (560
    )
    
    
    2,643Total equity under IFRS
    
    
    
    
    
    
    17,042
    
    
    
    4,878
    
    
    
    (1,561
    )
    
    
    604
    
    
    
    (1,849
    )
    
    
    (673
    )
    
    
    18,441
 12




---



##### 



2.2. Reconciliation of equity as of January 1,
2004 2.2.1. Restatements January
1, 2004 (format compliant with French accounting standards)Cancellation ofthe foreign
    
    
    
    
    
    
    CommitmentsFrench
    
    
    currency
    
    
    Repurchase
    
    
    to repurchase
    
    
    ORA /
    
    
    Available
    
    
    VUE
    
    
    Other
    
    
    Specialaccounting
    
    
    translation
    
    
    of minority
    
    
    minority
    
    
    OCEANE
    
    
    for sale
    
    
    financial
    
    
    financial
    
    
    Purpose
    
    
    
    
    
    
    Intangible
    
    
    Other(In millions of euros)
    
    standards
    
    
    adjustment
    
    
    interest
    
    
    interest
    
    
    bonds
    
    
    assets
    
    
    instruments
    
    
    instruments
    
    
    Entities
    
    
    Pensions
    
    
    assets
    
    
    restatements
    
    
    IFRSIFRS 1
    
    
    IFRS 3
    
    
    IAS32
    
    
    IAS 32 / 39
    
    
    IAS 32 / 39
    
    
    IAS 32 / 39
    
    
    IAS 32 / 39
    
    
    SIC 12
    
    
    IAS 19
    
    
    IAS 38Please refer to the paragraph mentioned
    
    
    
    
    
    2.8.A
    
    
    2.8.B
    
    
    2.8.C
    
    
    2.8.D
    
    
    2.8.E
    
    
    2.7
    
    
    2.8.F
    
    
    2.8.H
    
    
    2.8.I
    
    
    2.8.JASSETSGoodwill, net
    
    
    17,789
    
    
    
    
    
    
    
    914
    
    
    
    537
    
    
    
    
    
    
    
    
    
    
    
    36
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31
    
    
    
    19,307Other intangible assets, net
    
    
    11,778
    
    
    
    
    
    
    
    (914
    )
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58
    
    
    
    
    
    
    
    (10
    )
    
    
    (848
    )
    
    
    3
    
    
    
    10,072Property, plant and equipment, net
    
    
    6,365
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    417
    
    
    
    
    
    
    
    
    
    
    
    57
    
    
    
    6,839Investments in equity affiliates
    
    
    1,083
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,085Other investments
    
    
    3,549
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9
    )
    
    
    571
    
    
    
    373
    
    
    
    35
    
    
    
    874
    
    
    
    
    
    
    
    
    
    
    
    182
    
    
    
    5,575Total long-term assets
    
    
    40,564
    
    
    
    
    
    
    
    
    
    
    
    542
    
    
    
    (9
    )
    
    
    571
    
    
    
    409
    
    
    
    95
    
    
    
    1,291
    
    
    
    (10
    )
    
    
    (848
    )
    
    
    273
    
    
    
    42,878Inventories and work-in-progress
    
    
    744
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    96
    
    
    
    85
    
    
    
    925Accounts receivable and other
    
    
    8,809
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    (147
    )
    
    
    
    
    
    
    (559
    )
    
    
    (38
    )
    
    
    
    
    
    
    (96
    )
    
    
    
    
    
    
    (75
    )
    
    
    7,895Deferred tax assets
    
    
    1,546
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21
    
    
    
    14
    
    
    
    145
    
    
    
    
    
    
    
    30
    
    
    
    1,756Short-term loans receivable
    
    
    140
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    341
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12
    
    
    
    497Marketable securities
    
    
    259
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (249
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    7Cash and cash equivalents
    
    
    2,858
    
    
    
    
    
    
    
    
    
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14
    )
    
    
    2,852Total current assets
    
    
    14,356
    
    
    
    
    
    
    
    
    
    
    
    9
    
    
    
    (147
    )
    
    
    (249
    )
    
    
    (218
    )
    
    
    (13
    )
    
    
    14
    
    
    
    49
    
    
    
    96
    
    
    
    35
    
    
    
    13,932TOTAL ASSETS
    
    
    54,920
    
    
    
    
    
    
    
    
    
    
    
    551
    
    
    
    (156
    )
    
    
    322
    
    
    
    191
    
    
    
    82
    
    
    
    1,305
    
    
    
    39
    
    
    
    (752
    )
    
    
    308
    
    
    
    56,810LIABILITIESOther equity
    
    
    1,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Deferred income
    
    
    560
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (173
    )
    
    
    (185
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    202Provisions
    
    
    2,294
    
    
    
    
    
    
    
    
    
    
    
    (101
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (385
    )
    
    
    38
    
    
    
    (292
    )
    
    
    
    
    
    
    (3
    )
    
    
    1,551Long-term debt
    
    
    9,621
    
    
    
    
    
    
    
    
    
    
    
    342
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    287
    
    
    
    606
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,853Other non-current liabilities and accrued expenses
    
    
    2,407
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    931
    
    
    
    609
    
    
    
    (695
    )
    
    
    119
    
    
    
    3,37215,882
    
    
    
    
    
    
    
    
    
    
    
    241
    
    
    
    (1,000
    )
    
    
    
    
    
    
    (3
    )
    
    
    (270
    )
    
    
    1,390
    
    
    
    317
    
    
    
    (695
    )
    
    
    116
    
    
    
    15,978Accounts payable
    
    
    12,261
    
    
    
    
    
    
    
    
    
    
    
    (49
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    129
    
    
    
    12,337Deferred taxes liabilities
    
    
    5,123
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    65
    
    
    
    148
    
    
    
    87
    
    
    
    
    
    
    
    1
    
    
    
    32
    
    
    
    33
    
    
    
    5,489Bank overdrafts and other short-term borrowings
    
    
    4,802
    
    
    
    
    
    
    
    
    
    
    
    790
    
    
    
    
    
    
    
    
    
    
    
    344
    
    
    
    36
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9
    )
    
    
    5,963Total current liabilities
    
    
    22,186
    
    
    
    
    
    
    
    
    
    
    
    741
    
    
    
    
    
    
    
    65
    
    
    
    492
    
    
    
    121
    
    
    
    (2
    )
    
    
    1
    
    
    
    32
    
    
    
    153
    
    
    
    23,789TOTAL LIABILITIES
    
    
    38,068
    
    
    
    
    
    
    
    
    
    
    
    982
    
    
    
    (1,000
    )
    
    
    65
    
    
    
    489
    
    
    
    (149
    )
    
    
    1,388
    
    
    
    318
    
    
    
    (663
    )
    
    
    269
    
    
    
    39,767SHAREHOLDERS EQUITYShare capital
    
    
    5,893
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,893Additional paid-in capital
    
    
    6,030
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,204
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,234Retained earnings and others
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    (360
    )
    
    
    257
    
    
    
    216
    
    
    
    230
    
    
    
    (83
    )
    
    
    (279
    )
    
    
    (89
    )
    
    
    52
    
    
    
    (45
    )Including foreign currency translation adjustment
    
    
    (3,750
    )
    
    
    3,750
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total shareholders equity
    
    
    11,923
    
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    844
    
    
    
    257
    
    
    
    216
    
    
    
    230
    
    
    
    (83
    )
    
    
    (279
    )
    
    
    (89
    )
    
    
    52
    
    
    
    13,082Minority interests
    
    
    4,929
    
    
    
    
    
    
    
    
    
    
    
    (442
    )
    
    
    
    
    
    
    
    
    
    
    (514
    )
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13
    )
    
    
    3,961TOTAL EQUITY
    
    
    16,852
    
    
    
    
    
    
    
    
    
    
    
    (431
    )
    
    
    844
    
    
    
    257
    
    
    
    (298
    )
    
    
    231
    
    
    
    (83
    )
    
    
    (279
    )
    
    
    (89
    )
    
    
    39
    
    
    
    17,043
 13




---



##### 



2.2.2. Reclassifications January 1, 2004Media /Format compliant with French accounting standards
    
    
    
    
    
    Reclassification of
    
    
    Entertainment
    
    
    ReclassificationVUE as an asset
    
    
    content assets
    
    
    of current / non
    
    
    OtherIFRS
    
    
    held for sale
    
    
    classification
    
    
    current items
    
    
    reclassifications
    
    
    IFRS
    
    
    Format compliant with IFRS(In millions of euros)
    
    
    
    
    
    IFRS 5
    
    
    
    
    
    
    IAS 1Please refer to the paragraph mentioned
    
    
    
    
    
    2.7. / 2.9.M
    
    
    2.9.N
    
    
    2.9.PASSETS
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ASSETSGoodwill, net
    
    
    19,307
    
    
    
    (6,286
    )
    
    
    
    
    
    
    
    
    
    
    (52
    )
    
    
    12,969
    
    
    Goodwill, net2,971
    
    
    
    
    
    
    
    
    
    
    
    2,971
    
    
    Media / Entertainment non current content assets, netOther intangible assets, net
    
    
    10,072
    
    
    
    (4,777
    )
    
    
    (2,971
    )
    
    
    
    
    
    
    38
    
    
    
    2,362
    
    
    Other intangible assets, netProperty, plant and equipment, net
    
    
    6,839
    
    
    
    (1,065
    )
    
    
    
    
    
    
    
    
    
    
    (6
    )
    
    
    5,768
    
    
    Property, plant and equipment, netInvestments in equity affiliates
    
    
    1,085
    
    
    
    995
    
    
    
    
    
    
    
    
    
    
    
    16
    
    
    
    2,096
    
    
    Investments in equity affiliates79
    
    
    
    79
    
    
    Non current derivative instruments230
    
    
    
    230
    
    
    Cash deposits backing financingOther investments
    
    
    5,575
    
    
    
    (1,666
    )
    
    
    
    
    
    
    
    
    
    
    (256
    )
    
    
    3,653
    
    
    Other non current financial assets1,100
    
    
    
    (6
    )
    
    
    1,094
    
    
    Deferred income tax assets87
    
    
    
    
    
    
    
    87
    
    
    Other non current assetsTotal long-term assets
    
    
    42,878
    
    
    
    (12,799
    )
    
    
    
    
    
    
    1,187
    
    
    
    43
    
    
    
    31,309
    
    
    Non current assetsInventories and work-in-progress
    
    
    925
    
    
    
    (209
    )
    
    
    (307
    )
    
    
    
    
    
    
    (45
    )
    
    
    364
    
    
    Inventories
    
    
    
    373
    
    
    
    
    
    
    
    373
    
    
    Current income tax receivables583
    
    
    
    
    
    
    
    
    
    
    
    583
    
    
    Media / Entertainment current content assets, netAccounts receivable and other
    
    
    7,895
    
    
    
    (1,221
    )
    
    
    (276
    )
    
    
    (460
    )
    
    
    (265
    )
    
    
    5,673
    
    
    Accounts receivable and otherDeferred tax assets
    
    
    1,756
    
    
    
    (656
    )
    
    
    
    
    
    
    (1,100
    )
    
    
    
    
    
    
    64
    
    
    
    64
    
    
    Current derivative instrumentsShort-term loans receivable
    
    
    497
    
    
    
    (342
    )
    
    
    
    
    
    
    
    
    
    
    (125
    )
    
    
    30
    
    
    Other short-term financial assetsMarketable securities
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7
    )
    
    
    Cash and cash equivalents
    
    
    2,852
    
    
    
    (124
    )
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    2,726
    
    
    Cash and equivalents13,932
    
    
    
    (2,552
    )
    
    
    
    
    
    
    (1,187
    )
    
    
    (380
    )
    
    
    9,813
    
    
    
    13,784
    
    
    
    
    
    
    
    
    
    
    
    113
    
    
    
    13,897
    
    
    Assets held for saleTotal current assets
    
    
    13,932
    
    
    
    11,232
    
    
    
    
    
    
    
    (1,187
    )
    
    
    (267
    )
    
    
    23,710
    
    
    Current assetsTOTAL ASSETS
    
    
    56,810
    
    
    
    (1,567
    )
    
    
    
    
    
    
    
    
    
    
    (224
    )
    
    
    55,019
    
    
    TOTAL ASSETSSHAREHOLDERS EQUITY AND LIABILITIES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    EQUITY AND LIABILITIESShare capital
    
    
    5,893
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,893
    
    
    Share capitalAdditional paid-in capital
    
    
    7,234
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,234
    
    
    Additional paid-in capitalRetained earnings and others
    
    
    (45
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (232
    )
    
    
    (277
    )
    
    Retained earnings and othersIncluding foreign currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Including foreign currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    231
    
    
    
    231
    
    
    Equity attributable to equity holders of the parentTotal shareholders equity
    
    
    13,082
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    13,081
    
    
    Equity attributable to equity holders of the parentMinority interests
    
    
    3,961
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,961
    
    
    Minority interestsOther equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,043
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    17,042
    
    
    Total equityDeferred income
    
    
    202
    
    
    
    (98
    )
    
    
    
    
    
    
    
    
    
    
    (104
    )
    
    
    Provisions
    
    
    1,551
    
    
    
    (125
    )
    
    
    
    
    
    
    (355
    )
    
    
    (228
    )
    
    
    843
    
    
    Non current provisionsLong-term debt
    
    
    10,853
    
    
    
    (3,436
    )
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    7,416
    
    
    Long-term debt
    
    
    
    
    
    
    
    
    
    
    
    3,670
    
    
    
    
    
    
    
    3,670
    
    
    Deferred income tax liabilitiesOther non-current liabilities and accrued expenses
    
    
    3,372
    
    
    
    (833
    )
    
    
    
    
    
    
    35
    
    
    
    95
    
    
    
    2,669
    
    
    Other non current liabilities15,978
    
    
    
    (4,492
    )
    
    
    
    
    
    
    3,350
    
    
    
    (238
    )
    
    
    14,598
    
    
    Non current liabilitiesAccounts payable
    
    
    12,337
    
    
    
    (1,676
    )
    
    
    
    
    
    
    (1,192
    )
    
    
    (28
    )
    
    
    9,441
    
    
    Accounts payable1,157
    
    
    
    
    
    
    
    1,157
    
    
    Current income tax payables355
    
    
    
    
    
    
    
    355
    
    
    Current provisionsDeferred taxes liabilities
    
    
    5,489
    
    
    
    (1,819
    )
    
    
    
    
    
    
    (3,670
    )
    
    
    
    
    
    
    Bank overdrafts and other short-term borrowings
    
    
    5,963
    
    
    
    (344
    )
    
    
    
    
    
    
    
    
    
    
    (8
    )
    
    
    5,611
    
    
    Short-term borrowings23,789
    
    
    
    (3,839
    )
    
    
    
    
    
    
    (3,350
    )
    
    
    (36
    )
    
    
    16,5646,764
    
    
    
    
    
    
    
    
    
    
    
    51
    
    
    
    6,815
    
    
    Liabilities associated with assets held for saleTotal current liabilities
    
    
    23,789
    
    
    
    2,925
    
    
    
    
    
    
    
    (3,350
    )
    
    
    15
    
    
    
    23,379
    
    
    Current liabilitiesTOTAL SHAREHOLDERS EQUITY AND LIABILITIES
    
    
    39,767
    
    
    
    (1,567
    )
    
    
    
    
    
    
    
    
    
    
    (223
    )
    
    
    37,977
    
    
    Total
liabilities
    56,810
    
    
    
    (1,567
    )
    
    
    
    
    
    
    
    
    
    
    (224
    )
    
    
    55,019
    
    
    TOTAL EQUITY AND LIABILITIES
 14




---



##### 



2.3.
Reconciliation of 2004 earnings 2.3.1. Restatements Year Ended December 31, 2004 (format compliant with French accounting standards)Cancellation ofVUE foreigncurrencytranslation
    
    
    Elimination of
    
    
    Revenues ofFrench
    
    
    adjustment as of
    
    
    goodwill
    
    
    telecom
    
    
    Share-based
    
    
    
    
    
    
    Financial
    
    
    OtherGAAP
    
    
    January 1, 2004
    
    
    amortization
    
    
    operators
    
    
    compensation
    
    
    Pensions
    
    
    instruments
    
    
    restatements
    
    
    IFRS(in millions of euros)
    
    
    
    
    
    IFRS 1
    
    
    IFRS 3
    
    
    IAS 18
    
    
    IFRS 2
    
    
    IAS 19
    
    
    IAS 32 / 39Please refer to the paragraph mentioned
    
    
    
    
    
    2.7.
    
    
    2.8.G
    
    
    2.8.L
    
    
    2.8.K
    
    
    2.8.I
    
    
    2.8.F / 2.8.DRevenues
    
    
    21,428
    
    
    
    
    
    
    
    
    
    
    
    (144
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25
    )
    
    
    21,259Cost of revenues
    
    
    (11,633
    )
    
    
    
    
    
    
    
    
    
    
    76
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45
    
    
    
    (11,512
    )Margin from operations
    
    
    9,795
    
    
    
    
    
    
    
    
    
    
    
    (68
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20
    
    
    
    9,747Selling, general and administrative expenses
    
    
    (6,201
    )
    
    
    
    
    
    
    
    
    
    
    78
    
    
    
    (43
    )
    
    
    66
    
    
    
    
    
    
    
    (16
    )
    
    
    (6,116
    )Other financial expenses
    
    
    (118
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    40
    
    
    
    (83
    )Operating income
    
    
    3,476
    
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    (43
    )
    
    
    66
    
    
    
    (5
    )
    
    
    44
    
    
    
    3,548Financing expense
    
    
    (455
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    78
    
    
    
    (13
    )
    
    
    (390
    )Other financial expenses, net of provisions
    
    
    (247
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (202
    )
    
    
    (3
    )
    
    
    (452
    )Financing and other expenses, net
    
    
    (702
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (124
    )
    
    
    (16
    )
    
    
    (842
    )Income (loss) before gain (loss) on businesses sold, net of
provisions, income tax, equity affiliates, goodwill amortization and minority interests
    
    
    2,774
    
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    (43
    )
    
    
    66
    
    
    
    (129
    )
    
    
    28
    
    
    
    2,706Gain (loss) on businesses sold, net of provisions
    
    
    (140
    )
    
    
    2,490
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40
    
    
    
    2,390Income tax
    
    
    (400
    )
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (24
    )
    
    
    49
    
    
    
    (20
    )
    
    
    (398
    )Income (loss) before equity affiliates, goodwill amortization and
minority interests
    
    
    2,234
    
    
    
    2,490
    
    
    
    
    
    
    
    7
    
    
    
    (43
    )
    
    
    42
    
    
    
    (80
    )
    
    
    48
    
    
    
    4,698Income (loss) from equity affiliates
    
    
    219
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14
    )
    
    
    205Goodwill amortization
    
    
    (638
    )
    
    
    
    
    
    
    638
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Impairment losses
    
    
    (31
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    (25
    )Income (loss) before minority interests
    
    
    1,784
    
    
    
    2,490
    
    
    
    638
    
    
    
    7
    
    
    
    (43
    )
    
    
    42
    
    
    
    (80
    )
    
    
    40
    
    
    
    4,878Attributable to
Minority interests
    
    
    1,030
    
    
    
    
    
    
    
    23
    
    
    
    3
    
    
    
    (2
    )
    
    
    (1
    )
    
    
    (3
    )
    
    
    7
    
    
    
    1,057Net income (loss)
    
    
    754
    
    
    
    2,490
    
    
    
    615
    
    
    
    4
    
    
    
    (41
    )
    
    
    43
    
    
    
    (77
    )
    
    
    33
    
    
    
    3,821
 15




---



##### 



2.3.2. Reclassifications Year Ended December 31, 2004Format compliant with French accounting standards
    
    
    
    
    
    
    
    
    
    
    
    
    
    Reclassification of VUE asReclassification of
    
    
    
    
    
    
    discontinued operationlines of the
    
    
    Reclassification
    
    
    
    
    
    Incomestatement of
    
    
    of financial
    
    
    Gain on the
    
    
    generated by(in millions of euros)
    
    IFRS
    
    
    earnings
    
    
    instruments
    
    
    divestiture
    
    
    VUE
    
    

IFRS
    
    

Format
compliant with IFRSPlease refer to the paragraph mentioned
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.7.
    
    
    
    2.7.Revenues
    
    
    21,259
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,327
    )
    
    
    18,932
    
    
    RevenuesCost of revenues
    
    
    (11,512
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,627
    
    
    
    (9,885
    )
    
    Cost of revenuesMargin from operations
    
    
    9,747
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (700
    )
    
    
    9,047
    
    
    Margin from operationsSelling, general and administrative expenses
    
    
    (6,116
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    328
    
    
    
    (5,788
    )
    
    Selling, general and administrative expensesOther financial expenses
    
    
    (83
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17
    )
    
    
    (100
    )
    
    Other operating expensesOperating income
    
    
    3,548
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (389
    )
    
    
    3,159
    
    
    Earnings from operations
    
    
    
    89
    
    
    
    
    
    
    
    
    
    
    
    89
    
    
    Other income from ordinary activities(25
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25
    )
    
    Other charges from ordinary activities205
    
    
    
    
    
    
    
    
    
    
    
    39
    
    
    
    244
    
    
    Income from equity affiliates180
    
    
    
    89
    
    
    
    
    
    
    
    (350
    )
    
    
    3,467
    
    
    Earnings before interest and
income taxesFinancing expense
    
    
    (390
    )
    
    
    
    
    
    
    (78
    )
    
    
    
    
    
    
    54
    
    
    
    (414
    )
    
    InterestOther financial expenses, net of provisions
    
    
    (452
    )
    
    
    
    
    
    
    (11
    )
    
    
    
    
    
    
    33
    
    
    
    (430
    )
    
    Other financial charges2,390
    
    
    
    
    
    
    
    (697
    )
    
    
    
    
    
    
    1,693
    
    
    Other financial incomeFinancing and other expenses, net
    
    
    (842
    )
    
    
    2,390
    
    
    
    (89
    )
    
    
    (697
    )
    
    
    87
    
    
    
    849

    
    
    Interest and other financial
income and chargesIncome (loss) before gain (loss) on businesses sold, net of
provisions, income tax, equity affiliates, goodwill amortization
and minority interests
    
    
    2,706
    
    
    
    2,570
    
    
    
    
    
    
    
    (697
    )
    
    
    (263
    )
    
    
    4,316
    
    
    Earnings before income taxes and
discontinued operationsGain (loss) on businesses sold, net of provisions
    
    
    2,390
    
    
    
    (2,390
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Income tax
    
    
    (398
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100
    
    
    
    (298
    )
    
    Provision for income taxesIncome (loss) before equity affiliates, goodwill amortization and
minority interests
    
    
    4,698
    
    
    
    180
    
    
    
    
    
    
    
    (697
    )
    
    
    (163
    )
    
    
    4,018
    
    
    Earnings from continuing
operationsIncome (loss) from equity affiliates
    
    
    205
    
    
    
    (205
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Goodwill amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Impairment losses
    
    
    (25
    )
    
    
    25
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    697
    
    
    
    163
    
    
    
    860
    
    
    Earnings from discontinued operationsIncome (loss) before minority interests
    
    
    4,878
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    


    4,878
    
    
    Earnings for the yearAttributable to
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Attributable to:Minority interests
    
    
    1,057
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,057
    
    
    Minority interestsNet income (loss)
    
    
    3,821
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    


    3,821
    
    
    Equity holders of the parent
 16




---



##### 



2.4 Reconciliation of equity as of December 31, 2004 2.4.1. Restatements Year Ended December 31, 2004 (format compliant with French accounting standards)Commitments toFrench
    
    
    Repurchase
    
    
    repurchase
    
    
    ORA /
    
    
    Available
    
    
    Other
    
    
    Elimination of
    
    
    Specialaccounting
    
    
    of minority
    
    
    minority
    
    
    OCEANE
    
    
    for sale
    
    
    financial
    
    
    goodwill
    
    
    Purpose
    
    
    
    
    
    
    Intangible
    
    
    Other(In millions of euros)
    
    standards
    
    
    interest
    
    
    interest
    
    
    bonds
    
    
    assets
    
    
    instruments
    
    
    amortization
    
    
    Entities
    
    
    Pensions
    
    
    assets
    
    
    restatements
    
    
    IFRSIFRAS 3
    
    IAS 32
    
    IAS 32/39
    
    IAS 32/39
    
    IAS 32/39
    
    IFRS 3
    
    SIC 12
    
    IAS 19
    
    IAS 38Please refer to the paragraph mentioned
    
    
    
    
    
    
    2.8.B
    
    
    
    2.8.C
    
    
    
    2.8.D
    
    
    
    2.8.E
    
    
    
    2.8.F
    
    
    
    2.8G
    
    
    
    2.8.H
    
    
    
    2.8.I
    
    
    
    2.8.JASSETSGoodwill, net
    
    
    15,555
    
    
    
    914
    
    
    
    995
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    532
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (79
    )
    
    
    17,917Other intangible assets, net
    
    
    7,640
    
    
    
    (914
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,225
    )
    
    
    60
    
    
    
    4,561Property, plant and equipment, net
    
    
    5,063
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    64
    
    
    
    5,127Investments in equity affiliates
    
    
    880
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    138
    
    
    
    1,018Other investments
    
    
    2,449
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,241
    
    
    
    99
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7
    )
    
    
    3,782Total long-term assets
    
    
    31,587
    
    
    
    
    
    
    
    995
    
    
    
    
    
    
    
    1,241
    
    
    
    99
    
    
    
    532
    
    
    
    
    
    
    
    
    
    
    
    (2,225
    )
    
    
    176
    
    
    
    32,405Inventories and work-in-progress
    
    
    443
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26
    
    
    
    111
    
    
    
    580Accounts receivable and other
    
    
    6,545
    
    
    
    
    
    
    
    
    
    
    
    (78
    )
    
    
    
    
    
    
    (9
    )
    
    
    
    
    
    
    
    
    
    
    (113
    )
    
    
    
    
    
    
    (4
    )
    
    
    6,341Deferred tax assets
    
    
    1,219
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    13
    
    
    
    147
    
    
    
    
    
    
    
    3
    
    
    
    1,388Short-term loans receivable
    
    
    73
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    84
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    158Marketable securities
    
    
    263
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (249
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14Cash and cash equivalents
    
    
    3,158
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,159Total current assets
    
    
    11,701
    
    
    
    
    
    
    
    
    
    
    
    (78
    )
    
    
    (249
    )
    
    
    82
    
    
    
    
    
    
    
    13
    
    
    
    34
    
    
    
    26
    
    
    
    111
    
    
    
    11,640TOTAL ASSETS
    
    
    43,288
    
    
    
    
    
    
    
    995
    
    
    
    (78
    )

    
    
    992
    
    
    
    181
    
    
    
    532
    
    
    
    13
    
    
    
    34
    
    
    
    (2,199
    )
    
    
    287
    
    
    
    44,045LIABILITIESOther equity
    
    
    1,000
    
    
    
    
    
    
    
    
    
    
    
    (1,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Deferred income
    
    
    100
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100Provisions
    
    
    2,236
    
    
    
    
    
    
    
    (120
    )
    
    
    
    
    
    
    
    
    
    
    (365
    )
    
    
    
    
    
    
    
    
    
    
    (300
    )
    
    
    
    
    
    
    79
    
    
    
    1,530Long-term debt
    
    
    4,549
    
    
    
    
    
    
    
    414
    
    
    
    
    
    
    
    
    
    
    
    394
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,357Other non-current liabilities and accrued expenses
    
    
    3,826
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42
    
    
    
    
    
    
    
    41
    
    
    
    561
    
    
    
    (2,134
    )
    
    
    1
    
    
    
    2,33711,711
    
    
    
    
    
    
    
    294
    
    
    
    (1,000
    )
    
    
    
    
    
    
    71
    
    
    
    
    
    
    
    41
    
    
    
    261
    
    
    
    (2,134
    )
    
    
    80
    
    
    
    9,324Accounts payable
    
    
    10,046
    
    
    
    
    
    
    
    (70
    )
    
    
    
    
    
    
    
    
    
    
    (41
    )
    
    
    
    
    
    
    (2
    )
    
    
    7
    
    
    
    
    
    
    
    94
    
    
    
    10,034Deferred taxes liabilities
    
    
    3,207
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    103
    
    
    
    37
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20
    
    
    
    28
    
    
    
    3,395Bank overdrafts and other short-term borrowings
    
    
    1,744
    
    
    
    
    
    
    
    1,103
    
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,842Total current liabilities
    
    
    14,997
    
    
    
    
    
    
    
    1,033
    
    
    
    
    
    
    
    103
    
    
    
    (9
    )
    
    
    
    
    
    
    (2
    )
    
    
    7
    
    
    
    20
    
    
    
    122
    
    
    
    16,271TOTAL LIABILITIES
    
    
    26,708
    
    
    
    
    
    
    
    1,327
    
    
    
    (1,000
    )
    
    
    103
    
    
    
    62
    
    
    
    
    
    
    
    39
    
    
    
    268
    
    
    
    (2,114
    )
    
    
    202
    
    
    
    25,595SHAREHOLDERS EQUITYShare capital
    
    
    5,899
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,899Additional paid-in capital
    
    
    6,109
    
    
    
    
    
    
    
    
    
    
    
    1,204
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,313Retained earnings and others
    
    
    1,613
    
    
    
    
    
    

    
    4
    
    
    
    (282
    )
    
    
    889
    
    
    
    119
    
    
    
    509
    
    
    
    (26
    )
    
    
    (234
    )
    
    
    (85
    )
    
    
    88
    
    
    
    2,595Total shareholders equity
    
    
    13,621
    
    
    
    
    
    
    
    4
    
    
    
    922
    
    
    
    889
    
    
    
    119
    
    
    
    509
    
    
    
    (26
    )
    
    
    (234
    )
    
    
    (85
    )
    
    
    88
    
    
    
    15,807Minority interests
    
    
    2,959
    
    
    
    
    
    
    
    (336
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    2,643TOTAL EQUITY
    
    
    16,580
    
    
    
    
    
    
    
    (332
    )
    
    
    922
    
    
    
    889
    
    
    
    119
    
    
    
    532
    
    
    
    (26
    )
    
    
    (234
    )
    
    
    (85
    )
    
    
    85
    
    
    
    18,450
   17




---



##### 



2.4.2. Reclassifications Year Ended December 31, 2004Media /Entertainment
    
    
    Reclassification of
    
    
    Reclassification ofFormat compliant with French accounting standards
    
    
    
    
    
    content assets
    
    
    equity affiliates
    
    
    current / non
    
    
    Other(In millions of euros)
    
    IFRS
    
    
    classification
    
    
    goodwill
    
    
    current items
    
    
    reclassifications
    
    
    IFRS
    
    
    Format compliant with IFRSIAS 28
    
    
    IAS 1Please refer to the paragraph mentioned
    
    
    
    
    
    
    2.9.N
    
    
    
    2.9.O
    
    
    
    2.9.PASSETS
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ASSETSGoodwill,net
    
    
    17,917
    
    
    
    
    
    
    
    (4,737
    )
    
    
    
    
    
    
    1
    
    
    
    13,181
    
    
    Goodwill, net
    
    
    
    2,431
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,431
    
    
    Media / Entertainment non current content assets, netOther intangible assets, net
    
    
    4,561
    
    
    
    (2,431
    )
    
    
    
    
    
    
    
    
    
    
    47
    
    
    
    2,177
    
    
    Other intangible assets, netProperty, plant and equipment, net
    
    
    5,127
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (245
    )
    
    
    4,882
    
    
    Property, plant and equipment, netInvestments in equity affiliates
    
    
    1,018
    
    
    
    
    
    
    
    4,737
    
    
    
    
    
    
    
    18
    
    
    
    5,773
    
    
    Investments in equity affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    125
    
    
    
    125
    
    
    Non current derivative instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    59
    
    
    
    59
    
    
    Cash deposits backing financingOther investments
    
    
    3,782
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (154
    )
    
    
    3,628
    
    
    Other non current financial assets
    
    
    
    
    
    
    
    
    
    
    
    1,388
    
    
    
    
    
    
    
    1,388
    
    
    Deferred income tax assets
    
    
    
    
    
    
    
    
    
    
    
    451
    
    
    
    
    
    
    
    451
    
    
    Other non current assetsTotal long-term assets
    
    
    32,405
    
    
    
    
    
    
    
    
    
    
    
    1,839
    
    
    
    (149
    )
    
    
    34,095
    
    
    Non current assetsInventories and work-in-progress
    
    
    580
    
    
    
    (237
    )
    
    
    
    
    
    
    
    
    
    
    (28
    )
    
    
    315
    
    
    Inventories
    
    
    
    
    
    
    
    
    
    
    
    772
    
    
    
    
    
    
    
    772
    
    
    Current income tax receivables
    
    
    
    418
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    418
    
    
    Media / Entertainment current content assets, netAccounts receivable and other
    
    
    6,341
    
    
    
    (181
    )
    
    
    
    
    
    
    (1,223
    )
    
    
    (255
    )
    
    
    4,682
    
    
    Accounts receivable and otherDeferred tax assets
    
    
    1,388
    
    
    
    
    
    
    
    
    
    
    
    (1,388
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    132
    
    
    
    132
    
    
    Current derivative instrumentsShort-term loans receivable
    
    
    158
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (128
    )
    
    
    30
    
    
    Other short-term financial assetsMarketable securities
    
    
    14
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14
    )
    
    
    Cash and
cash equivalents
    
    
    3,159
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,159
    
    
    Cash and equivalents11,640
    
    
    
    
    
    
    
    
    
    
    
    (1,839
    )
    
    
    (293
    )
    
    
    9,508180
    
    
    
    180
    
    
    Assets held for saleTotal current assets
    
    
    11,640
    
    
    
    
    
    
    
    
    
    
    
    (1,839
    )
    
    
    (113
    )
    
    
    9,688
    
    
    Current assetsTOTAL ASSETS
    
    
    44,045
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (262
    )
    
    
    43,783
    
    
    TOTAL ASSETSSHAREHOLDERS EQUITY AND LIABILITIES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    EQUITY AND LIABILITIESShare capital
    
    
    5,899
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,899
    
    
    Share capitalAdditional paid-in capital
    
    
    7,313
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,313
    
    
    Additional paid-in capitalRetained earnings and others
    
    
    2,595
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9
    )
    
    
    2,586
    
    
    Retained earnings and others
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Equity associated with assets held for saleTotal shareholders equity
    
    
    15,807
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9
    )
    
    
    15,798
    
    
    Equity attributable to equity holders of the parentMinority interests
    
    
    2,643
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,643
    
    
    Minority interestsOther equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,450
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9
    )
    
    
    18,441
    
    
    Total equityDeferred income
    
    
    100
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (100
    )
    
    
    Provisions
    
    
    1,530
    
    
    
    
    
    
    
    
    
    
    
    (357
    )
    
    
    (378
    )
    
    
    795
    
    
    Non current provisionsLong-term debt
    
    
    5,357
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,357
    
    
    Long-term debt
    
    
    
    
    
    
    
    
    
    
    
    3,395
    
    
    
    
    
    
    
    3,395
    
    
    Deferred income tax liabilitiesOther non-current liabilities and accrued expenses
    
    
    2,337
    
    
    
    
    
    
    
    
    
    
    
    289
    
    
    
    207
    
    
    
    2,833
    
    
    Other non current liabilities9,324
    
    
    
    
    
    
    
    
    
    
    
    3,327
    
    
    
    (271
    )
    
    
    12,380
    
    
    Non current liabilitiesAccounts payable

    
    
    10,034
    
    
    
    
    
    
    
    
    
    
    
    (1,587
    )
    
    
    (90
    )
    
    
    8,357
    
    
    Accounts payable
    
    
    
    
    
    
    
    
    
    
    
    1,298
    
    
    
    
    
    
    
    1,298
    
    
    Current income tax payables
    
    
    
    
    
    
    
    
    
    
    
    357
    
    
    
    
    
    
    
    357
    
    
    Current provisionsDeferred taxes liabilities
    
    
    3,395
    
    
    
    
    
    
    
    
    
    
    
    (3,395
    )
    
    
    
    
    
    
    Bank overdrafts and other short-term borrowings
    
    
    2,842
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,842
    
    
    Short-term borrowings16,271
    
    
    
    
    
    
    
    
    
    
    
    (3,327
    )
    
    
    (90
    )
    
    
    12,854
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    108
    
    
    
    108
    
    
    Liabilities associated with assets held for saleTotal current liabilities
    
    
    16,271
    
    
    
    
    
    
    
    
    
    
    
    (3,327
    )
    
    
    18
    
    
    
    12,962
    
    
    Current liabilitiesTOTAL SHAREHOLDERS EQUITY AND LIABILITIES
    
    
    25,595
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (253
    )
    
    
    25,342
    
    
    Total liabilities
    44,045
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (262
    )
    
    
    43,783
    
    
    TOTAL EQUITY AND LIABILITIES
   18




---



##### 



2.5. Reconciliation of financial net debt January 1, 2004Commitments to
    
    
    
    
    
    
    
    
    
    
    ReclassificationFrench
    
    
    Special
    
    
    repurchase
    
    
    Other
    
    
    
    
    
    
    of VUE as anGAAP
    
    
    purpose
    
    
    minority
    
    
    financial
    
    
    
    
    
    
    asset held for(In millions of euros)
    
    
    
    
    
    entities
    
    
    interest
    
    
    instruments
    
    
    Other
    
    
    sale
    
    
    IFRSSIC 12
    
    IAS 32
    
    IAS 32 / 39
    
    
    
    
    
    IFRS 5Please refer to the paragraph mentioned
    
    
    
    
    
    
    2.8.H
    
    
    
    2.8.C
    
    
    
    2.8.F
    
    
    
    
    
    
    
    2.7.Long-term debt
    
    
    9,621
    
    
    
    606
    
    
    
    342
    
    
    
    284
    
    
    
    (1
    )
    
    
    (3,436
    )
    
    
    7,416Short-term borrowings
    
    
    4,802
    
    
    
    
    
    
    
    790
    
    
    
    380
    
    
    
    (17
    )
    
    
    (344
    )
    
    
    5,611Gross debt
    
    
    14,423
    
    
    
    606
    
    
    
    1,132
    
    
    
    664
    
    
    
    (18
    )
    
    
    (3,780
    )
    
    
    13,027Cash and cash equivalent
    
    
    (2,858
    )
    
    
    
    
    
    
    (8
    )
    
    
    
    
    
    
    16
    
    
    
    124
    
    
    
    (2,726
    )Financial gross debt  cash and cash equivalent
    
    
    11,565
    
    
    
    606
    
    
    
    1,124
    
    
    
    664
    
    
    
    (2
    )
    
    
    (3,656
    )
    
    
    10,301Non-current derivative instruments in assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (94
    )
    
    
    
    
    
    
    15
    
    
    
    (79
    )Current derivative instruments in assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (405
    )
    
    
    
    
    
    
    341
    
    
    
    (64
    )Cash deposits backing financing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (230
    )
    
    
    
    
    
    
    (230
    )Financial net debt
    
    
    11,565
    
    
    
    606
    
    
    
    1,124
    
    
    
    165
    
    
    
    (232
    )
    
    
    (3,300
    )
    
    
    9,928
 December 31, 2004Commitments torepurchase
    
    
    OtherFrench
    
    
    minority
    
    
    financial(In millions of euros)
    
    GAAP
    
    
    interest
    
    
    instruments
    
    
    Other
    
    
    IFRSIAS 32
    
    IAS 32 / 39Please refer to the paragraph mentioned
    
    
    
    
    
    
    2.8C
    
    
    
    2.8FLong-term debt
    
    
    4,549
    
    
    
    414
    
    
    
    394
    
    
    
    
    
    
    
    5,357Short-term borrowings
    
    
    1,744
    
    
    
    1,103
    
    
    
    (5
    )
    
    
    
    
    
    
    2,842Gross debt
    
    
    6,293
    
    
    
    1,517
    
    
    
    389
    
    
    
    
    
    
    
    8,199Cash and cash equivalent
    
    
    (3,158
    )
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    (3,159
    )Financial gross debt  cash and cash equivalent
    
    
    3,135
    
    
    
    1,517
    
    
    
    388
    
    
    
    
    
    
    
    5,040Non-current derivative instruments in assets
    
    
    
    
    
    
    
    
    
    
    (125
    )
    
    
    
    
    
    
    (125
    )Current derivative instruments in assets
    
    
    
    
    
    
    
    
    
    
    (132
    )
    
    
    
    
    
    
    (132
    )Cash deposits backing financing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (59
    )
    
    
    (59
    )Financial net debt
    
    
    3,135
    
    
    
    1,517
    
    
    
    131
    
    
    
    (59
    )
    
    
    4,724
 2.6. Consolidated statement of cash flows The majority of IFRS adjustments has no impact on the consolidated statement of cash flows
(measurement of available-for-sale assets at fair value, recognition of share-based payments, fair
value of derivatives etc.). The cash flow statement, as defined in IAS 7, is very similar to the consolidated statement of cash
flows already presented by the Group, with the exception of the separate presentation of cash flows
relating to assets held for sale and discontinued operations, as required by IFRS 5. Consequently,
except for the classification of VUE as a discontinued operation, there should be no major change
in the presentation of the consolidated statement of cash flows under IFRS compared with
information presented in the 2004 consolidated financial statements under French GAAP. 2.7. NBC-Universal transaction under IFRS On October 8, 2003, Vivendi Universal and General Electric (GE) announced the signing of a
definitive agreement for the combination of the respective businesses of National Broadcasting
Company (NBC) and Vivendi Universal Entertainment (VUE). This transaction, which was completed on
May 11, 2004, resulted from an accounting standpoint, in the divestiture of 80% of Vivendi
Universals interest in VUE and the concurrent acquisition of a 20% interest in NBC. The new
company, called NBC Universal (NBCU), is 80% owned by GE and 20% controlled by Vivendi Universal
which has equity accounted for NBCU since May 12, 2004, with an ownership interest of 18.5%. Due to the October 2003 agreement, VUEs assets and liabilities are recorded in compliance with
IFRS 5 as assets and liabilities held for sale, since that date. In the IFRS opening consolidated
statement of financial position as of January 1, 2004, VUEs assets and liabilities were
deconsolidated and presented in the amount of 80% of the carrying value as assets held for sale and
liabilities relating to assets held for sale, and in the amount of 20% of the carrying value as
investments in equity affiliates. Moreover, pursuant to IFRS 5, the portion of VUEs tangible and intangible assets recorded as
assets held for sale are no longer depreciated or amortized as of October 8, 2003. In the 2004 Statement of earnings, VUEs income and expenses for the period from January 1 to May
11, 2004 were deconsolidated and presented in the amount of 80% of their net value in Earnings
from discontinued operations and in the amount of 20% in Income from equity affiliates. From May
12, 2004, NBCUs income is equity-accounted in the amount of 20%, as under French GAAP. 19




---



##### 



Year EndedDecember 31,(In millions of euros)
    
    2004Equity earnings of VUE from January 1, 2004 to May 11, 2004, as adjusted in
IFRS
    
    
    163Capital gain under IFRS
    
    
    697Earnings from discontinued operations attributable to VUE
    
    
    860
 Under IFRS, the divestiture of 80% of VUE generated a capital gain due to the elimination of
the foreign currency translation adjustment on this stake as of January 1, 2004: Year EndedDecember 31,(In millions of euros)
    
    2004Capital loss under French GAAP
    
    
    (1,793
    )Cancellation of foreign currency translation adjustment as of January 1, 2004
    
    
    2,490Other IFRS adjustments, net
    
    
    Capital gain under IFRS
    
    
    697
 Elimination of the foreign currency translation adjustment Due to changes in the US dollar/euro exchange rate since the date of Vivendi Universals
acquisition of Universal Studios in December 2000 and the date of Vivendi Universals acquisition
of the entertainment assets of IAC in May 2002, a cumulative foreign currency loss was recorded as
a reduction in shareholders equity. Under French GAAP, upon closing of the transaction on May 11,
2004, Vivendi Universal reclassified to the income statement an 80% pro-rata portion of this
cumulative translation adjustment i.e.,  2,105 million. The related foreign currency loss
reduced earnings but did not impact either shareholders equity or the cash position of Vivendi
Universal. Under IFRS, the foreign currency loss relating to VUE as of January 1, 2004, i.e.
 2,490 million was reclassified in reserves and therefore no longer impacts the result on
divestment. 2.8. Principal restatements A.Foreign currency translation adjustments (IFRS 1) IFRS 1 (First-time adoption of IFRS) authorizes companies not to restate retrospectively cumulative
translation adjustments existing as of January 1, 2004. As such, in the event of the future sale of
an activity or a subsidiary whose functional currency is not the consolidating currency, the gain
or loss on divestiture will not take into account translation adjustments generated prior to
January 1, 2004. (a) Impact on the transitional Statement of financial position as of January 1, 2004 The adoption of this optional treatment results in the reclassification in the statement of
financial position as of the transition date of  3,750 million from cumulative foreign currency
translation adjustments to consolidated reserves, without impacting shareholders equity as of
January 1, 2004. (b) Impact on the IFRS Statement of earnings for the year ended December 31, 2004 Due to the cancellation of cumulative foreign currency translation adjustments as of January 1,
2004, the sale of the 80% interest in VUE generates a capital gain (see 2.7.). B.Repurchase of minority interests (IFRS 3) Under French GAAP, Vivendi Universal applied the partial revaluation method to purchases of
minority interests after acquiring control. Under this method, identifiable assets and liabilities
are restated at fair value to the extent of the acquired interest. Under IFRS, in the absence of any specific rules governing the repurchase of minority interests,
Vivendi Universal freezes the values of identifiable assets acquired and liabilities assumed at the
date control is obtained and, on the acquisition of additional interests in the subsidiary,
recognizes as goodwill the difference between the purchase cost and the net book value of minority
interests acquired. (a) Impact on the IFRS transitional Statement of financial position as of January 1, 2004 The partial restatement of intangible assets (market shares and trade names) performed on the
acquisition of an additional 26% stake in SFR is cancelled through goodwill in the amount of

914 million (market share in the amount of  650 million and trade name in the amount of
 264 million respectively). (b) Impact on the IFRS Statement of earnings for the year ended December 31, 2004 Market share and trade name were not amortized under French GAAP and goodwill is not amortized
under IFRS. This restatement does not, therefore, impact the Statement of earnings. C.Commitments to repurchase minority interests (IAS 32) Vivendi Universal has granted commitments to shareholders of its fully consolidated subsidiaries
(companies in which Vivendi Universal holds over 50% of voting rights or exercises any other form
of control under law or in substance) to repurchase their minority interests. These repurchase
commitments can take the form of put options on minority interests or firm commitments to
repurchase minority interests at a future date (forward contracts on minority interests). Under French GAAP, these minority interest repurchase commitments were presented off-balance sheet.
Where applicable, foreseeable losses on repurchases were accrued. Under IFRS, pending IFRIC interpretation or a specific IFRS, the following accounting treatment has
been adopted in accordance with prevailing IFRS: 20




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##### 




    On initial recognition, the commitment to repurchase minority interests is recognized as
a financial debt for the present value of the repurchase consideration under the put option
or forward contract, offset through minority interests and the balance through goodwill;
    Subsequent changes in the value of the commitment are recognized by an adjustment to
goodwill, with the exception of the unwinding of the discount recognized in Other
financial charges;
    Where applicable, at the time of initial recognition or the recognition of subsequent
changes, any expected loss on repurchase is recognized in Other financial charges;
    On expiry of the commitment, if the minority interests are not repurchased, the entries
previously recognized are reversed; if the minority interests are repurchased the amount
recognized in Long-term debt is reversed, offset by the cash outflow relating to the
repurchase of the minority interests. (a) Impact on the Statement of financial position As of January 1, 2004, the recognition of commitments to repurchase minority interests has the
following impact on the transitional Statement of financial position:  
    Financial debt: increase of  1,132 million (allocated  342 million to Long-term
debt and  790 million to Short-term borrowings), comprising put options granted to the
Republic of Morocco of 16% of the share capital of Maroc Telecom for  673 million, to
SNCF on 35% of the share capital of Cegetel SAS for  256 million, to the Principality of
Monaco on 45% of the share capital of Monaco Telecom for  98 million and to various
third parties by Canal+ Group for  105 million.
    Through a reduction in minority interests of  442 million and an increase in goodwill
of  537 million. As of December 31, 2004, given the change in the present value of repurchase commitments and the
sale of Monaco Telecom by Vivendi Universal without the Principality exercising its put option, the
impact of commitments to repurchase minority interests on the IFRS Statement of financial position
is as follows:  
    Impact on financial debt of  1,517 million (allocated  414 million to Long-term
debt and  1,103 million to Short-term borrowings), comprising the firm commitment to
repurchase from the Republic of Morocco 16% of the share capital of Maroc Telecom for
 1,100 million (following agreements signed in November 2004) and put options granted to
SNCF on 35% of the share capital of Cegetel SAS for  304 million and to various third
parties by Canal+ Group for  113 million;
    Through a reduction in minority interests of  336 million and an increase in goodwill
of  995 million. (b) Impact on the IFRS Statement of earnings for the year ended December 31, 2004 Unwinding of discount of commitments to repurchase minority interests represents an expense of
 4 million recognized in Other financial charges in the IFRS Statement of earnings for the year
ended December 31, 2004. As under French GAAP the change in the anticipated loss on the repurchase
commitment granted to SNCF amounted to  35 million, recognized in Other financial charges. D.ORA and OCEANE bonds (IAS 32 / 39) The notes manditorily redeemable for shares (ORA) issued by Vivendi Universal in November 2002 and
the convertible or exchangeable bonds (OCEANE) issued by Vivendi Universal in January 1999 are
compound financial instruments that, according to IAS 32, include a liability component and an
equity component (please refer to Note 1 Summary of accounting policies and practices). (a) Impact on the IFRS transitional Statement of financial position as of January 1, 2004 ORA bonds In the French GAAP Statement of financial position, the ORA bonds are recognized in Other equity
for the nominal amount of the bond issue, i.e.  1,000 million. Under IFRS, due to the advance
payment of interest in full on issue, the liability component is nil. The ORA bonds are therefore
recognized in Shareholders equity in the IFRS Statement of financial position at nominal value,
net of issue costs and prepaid interest of  844 million, recognized in prepaid expenses as of
January 1, 2004 in the French GAAP financial statements. The nominal value ( 1,000 million) is
recognized in Additional paid-in capital and residual issue costs and prepaid interest ( 156
million) are deducted from reserves. OCEANE bonds In the French GAAP Statement of financial position, OCEANE bonds are recognized in Long-term debt
for the nominal amount of the bond issue, i.e.  1,700 million. Under IFRS, the equity component
of the OCEANE bonds ( 204 million) is presented in Additional paid-in capital, offset through
reserves. The liability component is presented in long-term debt in the amount of  1,700
million, given its redemption in cash for  1,700 million on January 2, 2004. (b) Impact on the IFRS Statement of earnings for the year ended December 31, 2004 The restatement relating to the ORA bonds impacts the future financial results of Vivendi Universal
due to the recognition of prepaid expenses (issue costs and prepaid interest) of  156 million in
Shareholders equity as of January 1, 2004. In the IFRS Statement of earnings for the year ended
December 31, 2004, interest savings recognized in the interest total  78 million. The
restatements relating to the OCEANE bonds do not impact the IFRS Statement of earnings for the year
ended December 31, 2004 due to their redemption on January 2, 2004. E.Available-for-sale assets (IAS 32 / 39) In accordance with IAS 39, available-for-sale assets as defined by IAS 39 are recognized in the
Statement of financial position (Other non current financial assets) at fair value. For listed
shares (e.g. portfolio investment securities), the restatement consists of recognizing in Equity
under Unrealized gains (losses) associated with available-for-sale assets, the difference between
the carrying value and the market value, net of any possible deferred tax impacts. As
available-for-sale assets are recognized in the French GAAP Statement of financial position at the
lower of historical cost and market value, the restatement impacts positively equity. (a) Impact on the transitional Statement of financial position as of January 1, 2004 The impact, net of deferred tax, of the remeasurement of available-for-sale financial assets on
equity as of January 1, 2004 is  257 million, including  255 million in respect of Sogecable.
These shares were recorded as marketable securities under French GAAP. (b) Impact on the Statement of financial position as of December 31, 2004 In December 2004, Vivendi Universal sold the majority of its stake in Veolia, losing therefore its
significant influence over the company (please refer to Note 3.2 Divestiture of 15% of Vivendi
Universals 20.3% stake in Veolia Environment  December 2004 to the French GAAP consolidated
financial statements for the year ended December 31, 2004). As such, this investment which was
equity accounted is now included in non-consolidated investments in Other non current financial
assets. The impact, net of deferred tax, on equity of the remeasurement of available-for-sale
financial assets between January 1 and December 31, 2004 is  889 million, including  520
million in respect of the investment in Veolia Environment and  356 million in respect of
Sogecable. 21




---



##### 



F.Derivative financial instruments (IAS 32 / 39) Under French GAAP, derivates were recognized at the lower of fair value and historical cost. In
accordance with the rules laid down in IAS 39 concerning financial instruments, derivatives are
measured at fair value in the Statement of financial position. Gains and losses resulting from the
marking-to-market at the period end of non-hedging derivatives are recognized in earnings, under
Other financial charges. Under French GAAP, gains and loss resulting from the remeasurement of derivatives classified for
accounting purposes as hedging instruments were deferred until the gains or losses generated by the
hedged items are effectively realized. In order to qualify for the more restrictive fair value
hedge accounting under IFRS, financial instruments must present the following characteristics: (i)
there is formal designation and documentation of the hedging relationship at the inception date;
and (ii) the hedge is expected to be highly effective, with this effectiveness reliably measured
and demonstrated throughout the hedging relationship initially determined. In addition, IAS 39 requires the separate recognition of embedded derivatives, such as call options
included in convertible bonds, in the same way as other derivatives. These derivatives were not
recognized under French GAAP. In the IFRS Statement of financial position, derivatives are recognized at fair value in Derivative
instruments in assets and Long-term debt, depending on whether they are positive or negative. Given
the particularly strict rules in IAS 32 governing the offset of financial assets and liabilities
and depending on the instruments used, it is generally impossible to offset assets and liabilities
relating to derivatives. These rules therefore result in a considerable increase in other assets
and liabilities in the Statement of financial position. (a) Impact on the Statement of financial position The recognition of derivatives in accordance with IAS 32/39 has a positive impact on equity as of
January 1, 2004 and December 31, 2004 of  231 million and  119 million respectively. (b) Impact on the IFRS Statement of earnings for the year ended December 31, 2004 Changes in derivative fair values under IAS 32/39 have a negative impact on 2004 earnings under
IFRS of  202 million, recognized in Other financial charges. G.Business combinations As Vivendi Universal has elected to apply the option offered by IFRS 1 not to restate business
combinations which took place prior to January 1, 2004 which are not in compliance with the
provisions of IFRS 3, first-time adoption of IFRS will not impact the accounting treatment adopted
in the past. In accordance with IFRS 3, goodwill is not amortized from January 1, 2004. The positive impact of
this restatement on 2004 earnings under IFRS is  638 million. H.Special purpose entities (SIC 12) In accordance with SIC 12, Vivendi Universal consolidates certain special purpose entities which it
controls in substance in its transitional Statement of financial position as of January 1, 2004,
which were not consolidated in the French GAAP Statement of financial position as of December 31,
2003, as Vivendi Universal did not hold any shares. The recognition of these special purpose entities became mandatory under French GAAP on January 1,
2004 pursuant to CRC Regulation 04-03 (please refer to Note 1.1 New accounting policy: CRC Rule
04-03 issued on May 4, 2004 concerning the consolidation of Special Purpose Entities to the French
GAAP Consolidated financial statements for the year ended December 31, 2004). A restatement is not,
therefore, necessary between French GAAP and IFRS as of December 31, 2004. The impact of this restatement on the transitional Statement of financial position as of January 1,
2004 is as follows:  
    With regard to certain special purpose entities created by the defeasance of real estate
assets (i) in assets, the add-back of real estate assets, representing an increase in
Property, plant and equipment, net of  417 million; and (ii) in liabilities, an
increase in Long-term debt of  606 million. The impact on equity attributable to the
equity holders of the parent is negative  58 million. The impact on earnings
attributable to the equity holders of the parent for the period is
negative
 8 million.
    With regard to entities created by SFR pursuant to Qualified Technological Equipment
(QTE) operations (i) in assets, the recognition of deposits relating to the pre-financing
of QTE agreement arrangement commission, generating an increase in Other investments of
 886 million; and (ii) in liabilities, the recognition of advance lease payments in
Other non current liabilities in the same amount; the arrangement commission received by
SFR of  45 million represents deferred income under IFRS and is recognized in Other non
current liabilities and released to the Statement of earnings over the term of the
operation (15 years). Under French GAAP this was taken to income immediately. I.Pension and retirement benefit obligations (IFRS 1/IAS 19) The measurement and recognition of pension and retirement benefit obligations as described in Note
1 Summary of significant accounting policies and practices and Note 15 Employee benefit plans as
of December 31, 2004, 2003 and 2002 to the French GAAP consolidated financial statements for the
year ended December 31, 2004, comply with the rules laid down in IAS 19 (Employee benefits), with
the exception of pension past service costs which are spread over the average residual life under
French GAAP. (a) Impact on the transitional Statement of financial position as of January 1, 2004 However, pursuant to IFRS 1, Vivendi Universal has elected to recognize as of January 1, 2004
actuarial gains and losses not yet recognized in the Statement of financial position through
consolidated equity. This option resulted in the recognition of net actuarial losses through equity
in the transitional Statement of financial position as of January 1, 2004 in the amount of  279
million, net of deferred tax ( 423 million before deferred tax). Past service costs, representing obligations to employees generated by plan amendments impacting
unvested rights, are amortized under IFRS over the average remaining service life. Vested rights of
retired employees as of January 1, 2004 are recognized through equity in the transitional Statement
of financial position in the amount of negative  24 million, before deferred tax. (b) Impact on the IFRS Statement of earnings for the year ended December 31, 2004 In addition, this restatement of actuarial losses and past service cost in the transitional
Statement of financial position as of January 1, 2004 results in a reduction in the cost of
pensions and severance payments on retirement recognized in earnings from operations. This saving
is  66 million, before deferred tax, in the IFRS Statement of earnings for the year ended
December 31, 2004. J.Intangible assets (IAS 38) Under French GAAP, Canal+ Group sports rights are recognized in Intangible assets at the date of
signature of the rights purchase agreement. 22




---



##### 



Under IFRS, Canal+ Group sports rights are recognized in assets on performance of the contract,
corresponding to the date of the sporting event. Impact on the IFRS Statement of financial position as of January 1 and December 31, 2004 Sports rights recognized in the French GAAP Consolidated Statement of financial position (through
an offsetting entry in Other non current liabilities) of  695 million as of January 1, 2004 and
 2,314 million as of December 31, 2004, have been reclassified as off-balance sheet commitments.
This reclassification did not impact equity. K.Share-based payments (IFRS 2) Adoption of IFRS 2 (Share-based payment) changes the recognition method for stock-option plans
(stock purchase and subscription options granted by Vivendi Universal to its employees and those of
its subsidiaries) and Group savings plans (share capital increases reserved for current and retired
employees of Vivendi Universal and its subsidiaries). Vivendi Universal has elected for early
adoption of this standard as of January 1, 2004. Only plans issued after November 7, 2002 with
rights vesting after January 1, 2004 are restated. This concerns:  
    stock-option plans granted in 2003 and 2004 and all future plans;
    Group savings plans opened to subscription in 2004 and all future plans. In accordance with IFRS 2, the benefit awarded to employees on the granting of stock options (value
of the option at the grant date) and the subscription of Group savings plan (maximum discount of
20%) represents additional compensation. This additional compensation is recognized as an employee
expense, spread over the benefit vesting period:  
    Group savings plan: immediately, on subscription;
    Stock-option plans: over a 3-year period, by one-third block, in accordance with Vivendi Universal plan rules. (a) Stock option plans Vivendi Universal uses a binomial model to measure the employee expense relating to the options
granted. The fair value of these options determined on their respective grant dates represents
deferred compensation of  75 million, with no net impact on equity in the transitional Statement
of financial position as of January 1, 2004. This deferred compensation is amortized to earnings
over the vesting period. Amortization is not straight-line, as entitlement is vested under the plan
by one-third blocks over three years. The expense is, therefore, amortized in accordance with the
following spread rates:  
    Rate applicable in year 1 of the plan: 100% of the first block (fully vested in the
first year)) + 50% of the second block (vested over 2 years) + 33.33% of the third block
(vested over 3 years), that is 61.11%
    Rate applicable in year 2 of the plan: second half of the second block (vested over 2
years) + 33.33% of the third block (vested over 3 years), that is 27.78%
    Rate applicable in year 3 of the plan: final third of the third block (vested over 3
years), that is 11.11% (b) Group savings plan The accounting expense is equal to the discount granted to current and retired employees, that is
the difference between the share subscription price and the share price on the grant date,
recognized on the plan subscription date. (c) Impact on the IFRS Statement of earnings for the year ended December 31, 2004 The expense recognized in respect of share-based compensation is  43 million. Stock options that
vested in 2004 represent an expense of  37 million, the Vivendi Universal Group savings plan an
expense of  2 million and the Maroc Telecom savings plan an expense of  4 million. This
impact is presented in the Statement of earnings in selling, general and administrative expenses.
As this expense does not involve a cash outflow and is offset through a consolidated reserves
account, the adoption of this standard has no net impact on equity as of January 1 and December 31,
2004. Adoption of this standard will have a negative impact on the future results of the Group as rights
vest. It is difficult to estimate the impact of future plans as their fair value is dependent on
market and behavioral factors (notably changes in the share price, share price volatility and
option exercise practices by option holders, etc.). L.Revenues of telecom operators (IAS 18) (a) Recognition of equipment revenues Equipment revenues of operators include sales of mobile phones in telephone packs (sales
comprising a mobile phone and a telephone subscription) and mobile-only sales. The pack or the
mobile phone is generally sold by the operator to the distributor which then sells it on to the
future customer of the operator. Under French GAAP, equipment revenues of the operator were recognized when sold to the
distributor. Under IFRS, as the conditions of the sale to the distributor are determined by the
conditions of the sale to the final customer, equipment revenues are recognized when the line is
activated by the new customer. In effect, the distributor benefits from favorable terms and
conditions from the operator limiting its exposure under the transaction. The operator is the
principle party for the service offered (communication); it defines the specific terms and
conditions and is primarily responsible for promoting its
services.

In the IFRS Statement of earnings for the year ended December 31, 2004, the impact of this
restatement is a reduction in Revenues of  20 million (comprising  18 million for SFR and
 2 million for Maroc Telecom), offset through a reduction in cost of revenues of  23 million
(comprising  18 million for SFR and  5 million for Maroc Telecom). (b) Recognition of customer subsidies as a deduction from equipment revenues The operator grants subsidies on sales of telephone packs and individual mobile phones (e.g. phones
sold separately to a customer of the operator):  
    To new customers: win subsidies, representing an acquisition cost to the operator;
    To existing customers: loyalty subsidies, representing a retention cost to the operator. Under French GAAP, win subsidies were recorded in operating expenses (Selling, general and
administrative expenses), with the exception of the margin realized on the sale to distributors,
which was cancelled. Loyalty subsidies were recognized as a deduction from equipment revenues,
with the exception of subsidies paid on the sale of individual mobile phones, which were recognized
in operating expenses. Under IFRS, subsidies in respect of sales of telephone packs are deducted from equipment
revenues. In effect, the sale of a telephone pack is a composite sale and the customer subsidy is a
component of equipment revenues generated by the telecom operator, now recognized on the 23




---



##### 



sale to
the customer. Subsidies granted to customers on the sale of individual mobile phones are recognized
in operating expenses (Selling, general and administrative expenses). In the IFRS Statement of earnings for the year ended December 31, 2004, the impact of this
restatement is a reduction in revenues of  125 million (comprising  78 million for SFR and
 47 million for Maroc Telecom), offset through a reduction in Maroc Telecom Cost of revenues of
 47 million and in SFR Selling, general and administrative expenses of  78 million, with no
net impact on earnings from operations. (c) Recognition of rollover minutes in pay monthly plans (services revenues) The telecom operator sells certain pay monthly plans under which unused communication minutes from
one month can be carried forward to the next month. Under French GAAP, rollover minutes in pay monthly plans were accrued for based on their cost
price. Under IFRS, rollover minutes are recognized in telephone revenues for the amount they
represent on the effective consumption of these minutes or when they expire. In the IFRS Statement of earnings for the year ended December 31, 2004, the impact of this
restatement is a reduction in SFR Cost of revenues of  6 million (no impact for Maroc Telecom). (d) Expected cost of loyalty programs The operator offers customers the benefit of loyalty programs which grant existing customers
loyalty coupons to be used at a later date either to subsidize the replacement of their mobile
phone (loyalty subsidies) or to receive services free of charge, whether goods or services marketed
by the operator or purchased by the operator from a third party. Under French GAAP, the nominal value of the forecast probable cost of the mobile replacement and
free-services subsidies was deducted from services revenues of the operator on the effective
acquisition of the loyalty coupons by the customer. Under IFRS, pending an IFRIC interpretation,
the following accounting treatment has been provisionally adopted in accordance with prevailing
IFRS: deduction from services revenues of the telecom operator on the effective acquisition of
the loyalty coupons by the customer:  
    of the fair value of mobile replacement subsidies, representative of the additional
outflow of resources on top of acquisition subsidies granted to new customers,
    of the nominal value of the probable expected cost of free services. In the IFRS Statement of earnings for the year ended December 31, 2004, the impact of this
restatement is an increase in revenues of  1 million (comprising a reduction of  2 million
for SFR and an increase of  3 million for Maroc Telecom). 2.9. Principal reclassifications M.Non-current assets held for sale and discontinued operations
(IFRS 5) (a) Impact on the transitional Statement of financial position as of January 1, 2004 Under IFRS 5, non-current assets or groups of assets held for sale whose carrying amount will be
recovered principally through a sales transaction rather than continuing use, are recognized as
assets held for sale and liabilities associated with assets held for sale, without offset. Assets
which meet this criterion are no longer depreciated. The reclassifications
performed in this respect impact the transitional Statement of financial
position as of January 1, 2004 as follows: EquityLiabilities
    
    
    associatedassociated
    
    
    with assetsAssets held for
    
    
    with assets
    
    
    held for sale(In millions of euros)
    
    
    
    
    
    sale
    
    
    held for sale
    
    
    (1)Vivendi Universal Entertainment
    
    
    2.7.
    
    
    
    13,784
    
    
    
    (6,764
    )
    
    
    231Vivendi Universal Publishing
    
    
    
    
    
    
    101
    
    
    
    (51
    )
    
    
    Other
    
    
    
    
    
    
    12
    
    
    
    
    
    
    
    
    13,897
    
    
    
    (6,815
    )
    
    
    231
    The reclassifications performed in this respect impact the Statement of financial position as of
December 31, 2004 as follows: Liabilities
    
    
    Equityassociated
    
    
    associatedAssets held for
    
    
    with assets
    
    
    with assets(In millions of euros)
    
    sale
    
    
    held for sale
    
    
    held for saleN.C. Numéricâble
    
    
    180
    
    
    
    (108
    )
    
    
    
    180
    
    
    
    (108
    )
    
    
    
 (b) Impact of discontinued operations on the IFRS Statement of earnings for the year ended
December 31, 2004 Under IFRS 5, discontinued operations (Group components which Vivendi Universal has sold or which
are recognized as held for sale) are presented in a single line of the Statement of earnings
comprising the earnings after tax of discontinued operations for the period and the gain or loss
after tax on sale or fair value measurement, less costs to sell, of the assets and liabilities
making up the discontinued operations. The reclassifications performed in this respect concern VUE (see 2.7.).   24




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##### 



N.Media / Entertainment business content assets In order to bring the presentation of the IFRS Statement of financial position into line with
sector practice, Vivendi Universal has regrouped in a single line of the Consolidated statement of
financial position, split between current and non-current assets, all content assets relating to
the Groups media businesses (Canal+ Group, UMG, VUG). These assets primarily concern cinema and
television products (film costs) which are produced or purchased for sale to third parties,
audiovisual rights purchased by Canal+ Group for broadcast (mainly sports and cinema rights as well
as fiction and documentaries), music catalogs and recoverable advances granted to UMG artists. O.Equity affiliates (IAS 28) Under IAS 28, goodwill in respect of equity affiliates is recognized in Investments in equity
affiliates and not in Goodwill. This reclassification has an impact of  15 million on the
transitional Statement of financial position and of  4,737 million on the Statement of financial
position as of December 31, 2004, with no impact on equity. P.Other reclassifications in the Statement of financial position
(IAS 1) The mandatory distinction under IAS 1 (Presentation of financial statements) between current and
non-current items in the IFRS Statement of financial position does not correspond to the
presentation adopted by Vivendi Universal under French GAAP, based on the nature and/or the
liquidity of assets and liabilities. The presentation of the Statement of financial position has,
therefore, been adapted accordingly. Assets and liabilities relating to the operating cycle and
those falling due within 12 months at the period end are classified as current, with all other
assets and liabilities classified as non-current. Deferred tax assets and liabilities are presented
on a separate line in assets and liabilities, among non-current items. In addition, certain specific rules concerning the offsetting of assets and liabilities result in
the reclassification of certain items in the Statement of financial position compared to French
GAAP. The adoption of IAS 1 also results in the inclusion of minority interests in equity, with the
distinction between equity attributable to equity holders of the parent and minority interests
retained within the presentation of equity. Q.Gain (loss) on the sale of activities and financial investments
(IAS 1) The adoption of IAS 1 results in the reclassification of the gain (loss) on the sale of activities
in the lines of the Statement of earnings corresponding to the function of the underlying asset
(other financial income or earnings from discontinued operations). NOTE 3.BUSINESS SEGMENT DATA The Groups activity operates through different businesses. Each business offers different products
and services that are marketed through different channels. Given the unique customer base,
technology, marketing and distribution requirements of these businesses, they are managed
separately and represent the primary segment reporting level. As of December 31, 2004, Vivendi
Universal had two main businesses with different segments: Media with Canal+ Group, UMG and VUG;
and Telecom with SFR Cegetel and Maroc Telecom. Management evaluates the performance of these segments and allocates resources to them based on
several performance measures. There are no significant inter-segment revenues; however, corporate
headquarters allocates a portion of its costs to each of the operating segments. 25




---



##### 



Financial information by business segment 3.1. Statement of earnings data (a) French GAAP TotalUniversal
    
    
    Vivendi
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Vivendi
    
    
    Vivendi
    
    
    TotalCanal+
    
    
    Music
    
    
    Universal
    
    
    
    
    
    
    SFR
    
    
    Maroc
    
    
    
    
    
    
    Holding &
    
    
    Non core
    
    
    Universal
    
    
    Universal
    
    
    Vivendi(In millions of euros)
    
    Group
    
    
    Group
    
    
    Games
    
    
    Media
    
    
    Cegetel
    
    
    Telecom
    
    
    Telecom
    
    
    Corporate
    
    
    operations
    
    
    excl. VUE
    
    
    Entertainment
    
    
    UniversalYear ended December 31, 2004Revenues
    
    
    3,580
    
    
    
    4,993
    
    
    
    475
    
    
    
    9,048
    
    
    
    8,317
    
    
    
    1,627
    
    
    
    9,944
    
    
    
    
    
    
    
    109
    
    
    
    19,101
    
    
    
    2,327
    
    
    
    21,428Operating expenses excl. D&A
    
    
    (3,165
    )
    
    
    (4,250
    )
    
    
    (583
    )
    
    
    (7,998
    )
    
    
    (5,132
    )
    
    
    (691
    )
    
    
    (5,823
    )
    
    
    (208
    )
    
    
    (85
    )
    
    
    (14,114
    )
    
    
    (1,909
    )
    
    
    (16,023
    )Depreciation and amortization (D&A)
    
    
    (224
    )
    
    
    (342
    )
    
    
    (40
    )
    
    
    (606
    )
    
    
    (890
    )
    
    
    (248
    )
    
    
    (1,138
    )
    
    
    (15
    )
    
    

    (19
    )
    
    
    (1,778
    )
    
    
    (65
    )
    
    
    (1,843
    )Other
    
    
    7
    
    
    
    (63
    )
    
    
    (35
    )
    
    
    (91
    )
    
    
    (38
    )
    
    
    (15
    )
    
    
    (53
    )
    
    
    3
    
    
    
    71
    
    
    
    (70
    )
    
    
    (16
    )
    
    
    (86
    )Operating income (loss)
    
    
    198
    
    
    
    338
    
    
    
    (183
    )
    
    
    353
    
    
    
    2,257
    
    
    
    673
    
    
    
    2,930
    
    
    
    (220
    )
    
    
    76
    
    
    
    3,139
    
    
    
    337
    
    
    
    3,476
 (b) Reconciliation French GAAP/IFRS TotalUniversal
    
    
    Vivendi
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Vivendi
    
    
    Vivendi

    
    
    TotalCanal+
    
    
    Music
    
    
    Universal
    
    
    
    
    
    
    SFR
    
    
    Maroc
    
    
    
    
    
    
    Holding &
    
    
    Non core
    
    
    Universal
    
    
    Universal
    
    
    Vivendi(In millions of euros)
    
    Group
    
    
    Group
    
    
    Games
    
    
    Media
    
    
    Cegetel
    
    
    Telecom
    
    

Telecom
    
    
    Corporate
    
    
    operations
    
    
    excl. VUE
    
    
    Entertainment
    
    
    UniversalYear ended December 31, 2004Revenues
    
    
    (20
    )
    
    
    (4
    )
    
    
    
    
    
    
    (24
    )
    
    
    (98
    )
    
    
    (46
    )
    
    
    (144
    )
    
    
    
    
    
    
    (1
    )
    
    
    (169
    )
    
    
    (2,327
    )
    
    
    (2,496
    )Operating expenses excl. D&A
    
    
    19
    
    
    
    20
    
    
    
    
    
    
    
    39
    
    
    
    107
    
    
    
    55
    
    
    
    162
    
    
    
    2
    
    
    
    16
    
    
    
    219
    
    
    
    1,909
    
    
    
    2,128Depreciation and amortization (D&A)
    
    
    
    
    
    
    
    
    
    
    (15
    )
    
    
    (15
    )
    
    
    2
    
    
    
    (19
    )
    
    
    (17
    )
    
    
    1
    
    
    
    (8
    )
    
    
    (39
    )
    
    
    65
    
    
    
    26Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    (1
    )
    
    
    4
    
    
    
    (1
    )
    
    
    6
    
    
    
    9
    
    
    
    16
    
    
    
    25Operating income (loss)
    
    
    (1
    )
    
    
    16
    
    
    
    (15
    )
    
    
    
    
    
    
    16
    
    
    
    (11
    )
    
    
    5
    
    
    
    2
    
    
    
    13
    
    
    
    20
    
    
    
    (337
    )
    
    
    (317
    )
 (c) IFRS TotalUniversal
    
    
    Vivendi
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Vivendi
    
    
    Vivendi
    
    
    TotalCanal+
    
    
    Music
    
    
    Universal
    
    
    
    
    
    
    SFR
    
    
    Maroc
    
    
    
    
    
    
    Holding &
    
    
    Non core
    
    
    Universal
    
    
    Universal
    
    
    Vivendi(In millions of euros)
    
    Group
    
    
    Group
    
    
    Games
    
    
    Media
    
    
    Cegetel
    
    
    Telecom
    
    
    Telecom
    
    

Corporate
    
    
    operations
    
    
    excl. VUE
    
    
    Entertainment
    
    
    UniversalYear ended December 31, 2004Revenues
    
    
    3,560
    
    
    
    4,989
    
    
    
    475
    
    
    
    9,024
    
    
    
    8,219
    
    
    
    1,581
    
    
    
    9,800
    
    
    
    
    
    
    
    108
    
    
    
    18,932
    
    
    
    
    
    
    
    18,932Operating expenses excl. D&A
    
    
    (3,146
    )
    
    
    (4,230
    )
    
    
    (583
    )
    
    
    (7,959
    )
    
    
    (5,025
    )
    
    
    (636
    )
    
    
    (5,661
    )
    
    
    (206
    )
    
    
    (69
    )
    
    
    (13,895
    )
    
    
    
    
    
    
    (13,895
    )Depreciation and amortization (D&A)
    
    
    (224
    )
    
    
    (342
    )
    
    
    (55
    )
    
    
    (621
    )
    
    
    (888
    )
    
    
    (267
    )
    
    
    (1,155
    )
    
    
    (14
    )
    
    
    (27
    )
    
    
    (1,817
    )
    
    
    
    
    
    
    (1,817
    )Other
    
    
    7
    
    
    
    (63
    )
    
    
    (35
    )
    
    
    (91
    )
    
    
    (33
    )
    
    
    (16
    )
    
    
    (49
    )
    
    
    2
    
    
    
    77
    
    
    
    (61
    )
    
    
    
    
    
    
    (61
    )Earnings from operations
    
    
    197
    
    
    
    354
    
    
    
    (198
    )
    
    
    353
    
    
    
    2,273
    
    
    
    662
    
    
    
    2,935
    
    
    
    (218
    )
    
    
    89
    
    
    

    3,159
    
    
    
    
    
    
    
    3,159
 26




---



##### 



3.2. IFRS Statement of financial position data TotalUniversal
    
    
    Vivendi
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Vivendi
    
    
    Vivendi
    
    
    TotalCanal+
    
    
    Music
    
    
    Universal
    
    
    
    
    
    
    SFR
    
    
    Maroc
    
    
    
    
    
    
    Holding &
    
    
    Non core
    
    
    Universal
    
    
    Universal
    
    
    Vivendi(In millions of euros)
    
    Group
    
    
    Group
    
    
    Games
    
    
    Media
    
    
    Cegetel
    
    
    Telecom
    
    
    Telecom
    
    

Corporate
(a)
    
    
    operations
    
    
    excl. VUE
    
    
    Entertainment
    
    
    UniversalJanuary 1, 2004Goodwill, net
    
    
    3,558
    
    
    
    4,114
    
    
    
    51
    
    
    
    7,723
    
    
    
    4,014
    
    
    
    1,161
    
    
    
    5,175
    
    
    
    
    
    
    
    71
    
    
    
    12,969
    
    
    
    
    
    
    
    12,969Media / Entertainment non current content
assets, net
    
    
    459
    
    
    
    2,512
    
    
    
    
    
    
    
    2,971
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,971
    
    
    
    
    
    
    
    2,971Other intangible assets, net
    
    
    217
    
    
    
    2
    
    
    
    92
    
    
    
    311
    
    
    
    1,599
    
    
    
    377
    
    
    
    1,976
    
    
    
    32
    
    
    
    43
    
    
    
    2,362
    
    
    
    
    
    
    
    2,362Investments in equity affiliates
    
    
    233
    
    
    
    35
    
    
    
    
    
    
    
    268
    
    
    
    66
    
    
    
    
    
    
    
    66
    
    
    
    61
    
    
    
    2
    
    
    
    397
    
    
    
    1,699
    
    
    
    2,096Total assets
    
    
    7,475
    
    
    
    9,056
    
    
    
    649
    
    
    
    17,180
    
    
    
    12,417
    
    
    
    3,865
    
    
    
    16,282
    
    
    
    3,398
    
    
    
    2,649
    
    
    
    39,509
    
    
    
    15,510
    
    
    
    55,019December 31, 2004Goodwill, net
    
    
    3,732
    
    
    
    3,755
    
    
    
    29
    
    
    
    7,516
    
    
    
    4,052
    
    
    
    1,612
    
    
    
    5,664
    
    
    
    
    
    
    
    1
    
    
    
    13,181
    
    
    
    
    
    
    
    13,181Media / Entertainment non current content
assets, net
    
    
    345
    
    
    
    2,086
    
    
    
    
    
    
    
    2,431
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,431
    
    
    
    
    
    
    
    2,431Other intangible assets, net
    
    
    53
    
    
    
    1
    
    
    
    61
    
    
    
    115
    
    
    
    1,681
    
    
    
    375
    
    
    
    2,056
    
    
    
    4
    
    
    
    2
    
    
    
    2,177
    
    
    
    
    
    
    
    2,177Investments in equity affiliates
    
    
    54
    
    
    
    22
    
    
    
    
    
    
    
    76
    
    
    
    64
    
    
    
    
    
    
    
    64
    
    
    
    5,633
    
    
    
    
    
    
    
    5,773
    
    
    
    
    
    
    
    5,773Total assets
    
    
    6,014
    
    
    
    7,937
    
    
    
    420
    
    
    
    14,371
    
    
    
    11,707
    
    
    
    4,331
    
    
    
    16,038
    
    
    
    12,304
    
    
    
    1,070
    
    
    
    43,783
    
    
    
    
    
    
    
    43,783
   (a)
    As of December 31, 2004, includes Universal Studios Holding Corp. which holds a 20% stake
in NBC Universal. 27