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o		REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
		OR
þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the fiscal year ended December 31, 2005
		OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from                             to
o		SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		Date of event requiring this shell company report

N/A		Republic of France
(Translation of Registrant’s name into English)		(Jurisdiction of incorporation or organization)

		Name of each exchange
Title of each class		on which registered
Ordinary Shares, nominal value €5.50 per share		New York Stock Exchange*
American Depositary Shares (as evidenced by American Depositary Receipts), each representing one share, nominal value €5.50 per share		New York Stock Exchange

*	Listed, not for trading or quotation purposes, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.

American Depositary Shares			63,224,034
Ordinary Shares, nominal value €5.50 per share			1,153,477,321

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o

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	•	our ability to retain or obtain required licenses, permits, approvals and consents;
	•	legal and regulatory requirements, and the outcome of legal proceedings and pending investigations;
	•	the lack of commercial success of our products or services, particularly in the television, motion pictures, music and game markets;
	•	challenges to, loss, infringement or inability to enforce intellectual property rights;
	•	lost sales due to piracy, particularly in the motion picture and music business;
	•	downturn in the markets in which we operate, particularly the music market;
	•	increased technical and commercial competition, particularly in the television market;
	•	our ability to develop new technologies or introduce new products and services;
	•	changes in our corporate rating or rating of Vivendi debt;
	•	the availability and terms of financing;
	•	changes in business strategy or development plans;
	•	political instability in the jurisdictions in which we operate;
	•	fluctuations in interest rates or foreign currency exchange rates and currency devaluations;
	•	inflation and instability in the financial markets;
	•	restrictions on the repatriation of capital;
	•	natural disasters; and
	•	war or acts of terrorism.

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				Page
Item 1:		Identity of Directors, Senior Management and Advisers			1
Item 2:		Offer Statistics and Expected Timetable			1
Item 3:		Key Information			1
Item 4:		Information on the Company			6
Item 5:		Operating and Financial Review and Prospects			31
Item 6:		Directors, Senior Management and Employees			86
Item 7:		Major Shareholders and Related Party Transactions			107
Item 8:		Financial Information			107
Item 9:		The Offer and Listing			113
Item 10:		Additional Information			114
Item 11:		Quantitative and Qualitative Disclosures about Market Risk			128
Item 12:		Description of Securities Other than Equity Securities			131
Item 13:		Default, Dividend Arrearages and Delinquencies			131
Item 14:		Material Modifications to the Rights of Security Holders and Use of Proceeds			131
Item 15:		Controls and Procedures			131
Item 16A:		Audit Committee Financial Expert			131
Item 16B:		Code of Ethics			131
Item 16C:		Principal Accountant Fees and Services			131
Item 16D:		Exemptions from the Listing Standards for Audit Committees			133
Item 16E:		Purchases of Equity Securities by the Issuer and Affiliated Purchasers			133
Item 17:		Financial Statements			134
Item 18:		Financial Statements			134
Item 19:		Exhibits			134
EXHIBIT 1.1
EXHIBIT 2.1.1
EXHIBIT 8.1
EXHIBIT 12.1
EXHIBIT 12.2
EXHIBIT 13.1
EXHIBIT 13.2
EXHIBIT 14.1

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Item 1:	Identity of Directors, Senior Management and Advisers

Item 2:	Offer Statistics and Expected Timetable

Item 3:	Key Information

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			Year Ended
			December 31,
			2005				2004
			(In millions of euros,
			except per share
			data)
CONSOLIDATED STATEMENT OF EARNINGS
Revenues			€	19,484			€	17,883
Earnings from operations			€	3,746			€	3,233
Earnings from operations/Revenues (%)				19.2	%			18.1	%
Earnings from continuing operations before income taxes				4,378				4,338
Earnings on the divestiture of businesses or financial investments				668				1,738
Earnings from discontinued operations				92				777
Other charges from ordinary activities				(170	)			(25	)
Earnings				4,266				4,823
Attributable to:
Equity holders of the parent			€	3,154			€	3,767
Minority interests				1,112				1,056
Earnings per share, attributable to the equity holders of the parent
	basic		€	2.74			€	3.29
	diluted		€	2.72			€	3.27
Dividend per share			€	0.60			€	—
Average share outstanding (millions)				1,149.6				1,144.4
Share outstanding at year end (millions)				1,153.5				1,072.6
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Intangible assets (including goodwill and content assets)				18,195				17,762
Equity, attributable to equity holders of the parent			€	18,769			€	15,449
Minority interests			€	2,839			€	2,643
Total equity				21,608				18,092
Total assets				44,483				43,039
Financial net debt(a)			€	3,768			€	4,724
CONSOLIDATED STATEMENT OF CASH FLOWS
Net cash provided by operating activities				3,558				4,238
Net cash provided by (used for) investing activities				(2,817	)			3,744
Net cash provided by (used for) financing activities				(1,035	)			(7,545	)
Capital expenditures and purchases of investments			€	2,986			€	1,716

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		Year Ended December 31,
						2004 restated
		2005				(b)				2003				2002				2001
		(In millions of euros, except per share data)
CONSOLIDATED STATEMENT OF EARNINGS
Revenues		€	20,156			€	21,208			€	25,321			€	40,062			€	51,733
Earnings, attributable to equity holders of the parent			2,571				2,921				(1,358	)			(43,857	)			(1,172	)
Earnings (loss) per share — basic		€	2.39			€	2.73			€	(1.27	)		€	(40.35	)		€	(1.19	)
Earnings (loss) per share — diluted		€	2.28			€	2.61			€	(1.27	)		€	(40.35	)		€	(1.19	)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Shareholders’ equity			17,830				14,212				9,804				11,655				54,268
Total assets			43,772				43,104				54,696				69,790				151,139

(a)	Vivendi believes that Financial Net Debt, a non-GAAP financial measure, is an important indicator measuring Vivendi’s indebtedness. Financial Net Debt is calculated as the sum of long-term and short-term borrowings and other long-term and short-term financial liabilities (including commitments to purchase minority interests) less cash and cash equivalents all as reported on the Consolidated Statement of Financial Position, as well as derivative financial instruments recorded as assets and cash deposits backing borrowings (included in the Consolidated Statement of Financial Position under “non-current financial assets”). A reconciliation of this measure to the Consolidated Statement of Financial Position items is presented in “Item 5. Operating and Financial Review and Prospects”.
(b)	The Company’s shareholder’s equity under US GAAP as at December 31, 2004 has been restated to reflect certain adjustments relating to Consolidated Financial Statements for the year ended December 31, 2002 under primary GAAP. These adjustments resulted in a decrease in the previously reported shareholder’s equity as at December 31, 2004 of €271 million. Please refer to “Item 18. Financial Statements — Note 34”.

		Period				Average
Month Ended		End				Rate(1)				High				Low
May 31, 2006			1.28				1.28				1.30				1.26
April 30, 2006			1.26				1.23				1.26				1.20
March 31, 2006			1.21				1.20				1.22				1.19
February 28, 2006			1.19				1.19				1.22				1.18
January 31, 2006			1.22				1.21				1.23				1.18
December 31, 2005			1.18				1.19				1.21				1.17

		Period				Average
Year Ended		End				Rate(2)				High				Low
December 31, 2005			1.28				1.24				1.36				1.16
December 31, 2004			1.36				1.24				1.30				1.18
December 31, 2003			1.26				1.13				1.26				1.04
December 31, 2002			1.05				0.95				1.05				0.86
December 31, 2001			0.89				0.89				0.95				0.84

(1)	The average of the exchange rates for all days during the applicable month.
(2)	The average of the exchange rates on the last day of each month during the applicable year.

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		Dividend per				Dividend per
		Ordinary Share				ADS
		(euros)				(dollars)(1)
2001			1.00				0.89
2002			1.00				0.91
2003			—				—
2004			0.60				0.77
2005(2)			1.00				1.27

(1)	Translated solely for convenience into US dollars at the noon buying rates on the respective dividend payment dates or on the following business day, if such date was not a business day in the US. The noon buying rate may differ from the rate that may be used by the depositary to convert euros to US dollars for the purpose of making payments to holders of ADSs.
(2)	The payment of a dividend of €1.00 per share for fiscal year 2005 was approved at the annual meeting of the shareholders held on April 20, 2006. This dividend was paid on May 4, 2006 to the holders of ordinary shares and May 25, 2006 to the holders of ADSs.

	•	fluctuations in currency exchange rates (particularly the US dollar-euro exchange rate) and currency devaluations;
	•	restrictions on the repatriation of capital;
	•	differences and unexpected changes in regulatory environments;
	•	varying tax regimes which could adversely affect our results of operations or cash flows, including regulations relating to setting transfer costs and withholding tax on repatriation of funds and other payments made by joint ventures and subsidiaries; and
	•	tariffs, duties, export controls and other trade barriers.

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	•	creating and publishing exclusive content;
	•	creating and managing distribution platforms for content and other services aimed at the general public by drawing on its vast expertise in subscriber database management, customer loyalty, marketing and distribution networks; and
	•	investing in telecom and pay-TV infrastructure and technological innovations particularly in mobile telephone and broadband applications.

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	•	Completing the combination of Canal+ and TPS and finalizing the agreement with Lagardère to become a leader in the French broadcasting market, which will be able to compete with large foreign media companies, cable and Internet operators;
	•	resolving its differences with Elektrim and Deutsche Telekom in order to assert Vivendi’s rights with regard to its 51% equity stake in Elektrim Telekomunikacja and to eventually increase such stake to 100%;
	•	moving further into music publishing, and in certain territories, into the production and distribution of recorded music; and
	•	ensuring the balanced development of Vivendi Games among online, console and mobile games.

	Main Developments for 2003

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		Year ended December 31,
										(on a comparable
		(as published)								basis(a))
		2005				2004				2005				2004
		(millions of euros)
Universal Music Group			4,893				4,989				4,893				4,819
Vivendi Games			641				475				641				475
Canal+ Group			3,452				3,560				3,407				3,277
SFR(b)			8,687				7,192				8,687				8,117
Maroc Telecom			1,860				1,581				1,860				1,611
Non-core operations and elimination of inter-segment transactions(c)			(49	)			86				(49	)			(62	)
Total revenue			19,484				17,883				19,439				18,237

(a)	Comparable basis essentially illustrates the effect of the divestitures that occurred in 2005 (primarily, NC Numéricâble) and 2004 (mainly the “Flux-divertissement” business of StudioExpand, Canal+ Benelux, UMG’s music clubs, Kencell and Monaco Telecom) and includes the full consolidation of minority interests in distribution subsidiaries at SFR and of Mauritel at Maroc Telecom, as if these transactions had occurred as of January 1, 2004. In 2004, comparable basis also includes estimated mobile-to-mobile sales at SFR applying in 2004 the rate applied in 2005. Comparable basis revenues are not necessarily indicative of the combined revenues that would have been reported had the events actually occurred as of January 1, 2004.
(b)	Beginning January 1, 2005, SFR’s revenue and cost of sales include mobile-to-mobile sales which amount to €909 million for the fiscal year ended December 31, 2005. In 2004, comparable basis includes estimated mobile-to-mobile sales applying in 2004 the rate applied in 2005, i.e., €875 million for fiscal year 2004.
(c)	Including Vivendi Telecom International, Vivendi Valorisation and other non core businesses.

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		Year ended
		December 31,
		2005				2004
		(millions of euros)
France			12,216				10,835
Rest of Europe			1,933				2,176
United States			2,414				2,260
Morocco			1,773				1,516
Rest of World			1,148				1,096
Total			19,484				17,883

	Universal Music Group

	•	the stability of the management team compared to UMG’s major competitors, which allows UMG to have a consistent strategy to respond effectively to industry and social trends and challenges;
	•	UMG’s size and strength in marketing and distribution, which builds on itself by attracting established artists;
	•	UMG’s large catalog of prior hit releases that provide a stable and profitable revenue stream, which accounts for approximately 30% of sales, without significant additional investment;
	•	UMG’s diverse array of labels in the major markets and local representation across the globe complement each other through their focus on different genres, sub-genres and music segments and thereby mitigate the effect of changes in consumer tastes; and
	•	multi-album and multi-year contracts, which secure long-term relationships with some of the most important artists and talent finders in the industry.

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	Recorded Music

	E-Commerce and Electronic Delivery

	•	growth of download offerings in the US;
	•	expansion of download offerings in Europe and Japan;
	•	worldwide growth of mobile offerings with particularly strong growth in the US; and
	•	the monetization of online music video streaming and downloads.

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	Music Publishing

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	Seasonality

	Competition

	Regulatory Environment

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	Research and Development

	Raw Materials

	Property, Plant and Equipment

	Vivendi Games

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	Seasonality

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	Competition

	Piracy

	Regulatory Environment

	Research and Development

	Raw Materials

	Property, Plant and Equipment

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	The Canal+ Group

	•	Pay-TV channel production in France, which includes the Canal+ premium channel (Canal+ Le Bouquet) and theme channels such as Sport+, i>Télé, CinéCinéma channels, Planète channels, Jimmy, Seasons, Comédie! and Cuisine TV; and
	•	Pay-TV channel distribution via satellite, cable, ADSL or 3G mobile telephony, which includes CanalSat and Media Overseas.

	Pay-TV — France

	The Canal+ Premium Channel

(1)	In April 2006, the Canal+ Group entered into an agreement regarding the divestiture of its interest in the Paris Saint-Germain soccer club (PSG) to a group of institutional investors. The Canal+ Group finalized the divestiture of PSG on June 20, 2006.

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	Theme Channels

	Pay-TV Distribution

	CanalSat

	Media Overseas

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	Cyfra+ (Poland)

	ADSL TV

	Digital Terrestrial Television (DTT)

	Legal Downloading of Video and Video On Demand (VOD)

	StudioCanal

	Seasonality

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	Competition

	Regulatory Environment

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	•	renewed its financial commitment to support all film industry segments and agreed to continue to allocate at least 9% (up to 12.5% in certain circumstances) of its revenues to the acquisition of French-language films, as part of its obligation to devote 12% of its revenues to the acquisition of European movies;
	•	agreed to continue to invest 80% of its French-language film obligation in films prior to the first day of filming; and
	•	made certain other financial and technological commitments.

	Research and Development

	Raw Materials

	Property, Plant and Equipment

	Telecommunications

	SFR

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	Mobile Telephony

	•	SFR’s investment strategy in its own telecommunications networks and in particular in its UTMS network through a significant increase of available capacities for voice calls and data transfers to meet its diversified customer needs;
	•	multiple initiatives to boost the French market, including 3G access from the lowest monthly subscription rate (€22) and the cheapest pre-paid card (€10) regardless of the plan chosen (subscription, pre-paid or rechargeable blocked accounts), along with a significant decrease in the price of 3G handsets; and
	•	a strong commercial presence within the French territory with 5,000 outlets.

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	Network

	Services

(2)	AUPU (Average Usage Per User) is defined as the incoming and outgoing “voice” volumes divided by the average customer base (as defined by ARCEP) for the last twelve months.

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	Seasonality

	Competition

	Regulatory Environment

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	Research and Development

	Raw Materials

	Property, Plant and Equipment

	Maroc Telecom

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	Mobile Telephony

	Fixed-line Telephony, Data and Internet

	•	telephony services;
	•	interconnection services with national and international operators;

(3)	The customer base, in compliance with the definition of the ANRT and as used by Maroc Telecom in 2006, is calculated as the sum of prepaid customers giving or receiving a voice call during the last three months and the number of not resiliated postpaid customers.

(4)	ARPU (Average Revenue Per User) is calculated by dividing revenues (from incoming and outcoming calls and data services) net of promotions, excluding roaming in and equipment sales by average customer base over the period.

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	•	data transmission services for professional markets and Internet service providers, as well as to other telecoms operators; and
	•	Internet services which include Internet access services and related services such as hosting.

	Distribution

	•	the direct network, comprised of 277 sales agencies;
	•	the local indirect network, comprised of independent resellers subject to exclusive agreements, which are managed by the closest Maroc Telecom commercial agency. A significant part of these resellers also operate phone shops approved by Maroc Telecom;
	•	an independent local network, primarily dedicated to mobile telephony, managed by GSM Al Maghrib, a company in which Maroc Telecom held a 35% stake until March 2006; and
	•	retailers with nationwide networks whose main business is not in telecommunications (supermarkets, newspaper and magazine retailers, tobacco shops or Moroccan post offices).

	Network

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	Mauritel Group

	Seasonality

	Competition

	Fixed-line Telephony

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	Mobile

	Internet

	Regulatory Environment

	Research and Development

	Raw Materials

	Property, Plant and Equipment

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	Other

	NBC Universal

	•	production of live and recorded television programs;
	•	production and distribution of motion pictures;
	•	operation, under licenses from the Federal Communications Commission (FCC), of television broadcasting stations;
	•	furnishing of US network television services to affiliated stations;
	•	ownership of several cable/ satellite networks around the world;
	•	operation of theme parks; and
	•	investment and programming activities in multimedia and the Internet.

	Veolia Environnement

	Elektrim Telekomunikacja

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	Critical accounting estimates

	Deferred taxes

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	Contingencies and Provisions

	Employee benefits

	•	a 50 basis point increase in the 2005 discount rate would lead to an increase of €2 million in the pre-tax expense, whereas a 50 basis point decrease would have had no significant impact on the 2005 expense; and
	•	a 50 basis point increase (or decrease) in the expected return on plan assets for 2005 would lead to a decrease (or an increase) of €4 million in the pre-tax expense.

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	Share-based compensation

	Financial instruments

	Revenue recognition

	Impairment of Assets

	Investments and receivables from equity affiliates

	Goodwill, other intangible assets or property, plant and equipment

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	Music Advances to Artists

	Exemptions to IFRS

	Business combinations

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	Cumulative unrecognized actuarial gains and losses

	Cumulative translation adjustments

	Revaluation of certain intangible assets and property, plant and equipment at fair value

	Share-based payment

	Other IFRS Options

	Acquisition of minority interests

	Commitments to purchase minority interests

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	Loyalty programs

	Overview of 2005 and 2004

	2005 developments

	Acquisition of 16% of the capital of Maroc Telecom

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	SFR: combination of Cegetel and Neuf Telecom to create Neuf Cegetel, the leading alternative fixed-line telecommunications operator in France

	•	From an accounting standpoint, this combination is accounted for as the divestiture of 71.8% of SFR’s interest in Cegetel for €617 million (corresponding to the value of Neuf Telecom shares received for €237 million and the value of the bonds issued by Neuf Telecom in an amount of €380 million) and the concurrent acquisition of a 28.2% interest in the share capital of Neuf Telecom.
	•	As a result, earnings and expenses of Cegetel from January 1, 2004 to August 22, 2005 were deconsolidated and presented netted, of which 71.8% were recorded as earnings from discontinued operations and 28.2% as income from equity affiliates.
	•	As of December 31, 2005, this transaction resulted in a capital gain of €121 million (€58 million after SFR’s minority interests) recorded in earnings from discontinued operations.

	Reinforcement of the program offerings and distribution of the Canal+ Group in 2005 and 2004

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	Elektrim Telekomunikacja situation in 2005

Organization chart as of December 31, 2004:		Simplified organization chart as of December 31, 2005:

	Canal+ and TPS combination agreement and Lagardère agreement

	Canal+ and TPS combination agreement

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	•	During the first phase, on January 6, 2006, we paid TF1 and M6 a €150 million advance corresponding to a 15% interest in TPS after cancellation of the debt of TPS and the transformation of TPS from a S.N.C. into a S.A. In addition, TF1 and M6 agreed to divest TPS to us, directly or via the Canal+ Group. Until the completion of the transaction, the Canal+ Group and TPS will retain their management autonomy.
	•	During a second phase, following the approval by the competition authorities, the €150 million advance, plus interest, would be repaid to us. TF1’s and M6’s interests in the new group “Canal+ France” would be 9.9% and 5.1%, respectively. “Canal+ France” would be comprised of the Canal+ Group and TPS, by way of an exchange of shareholding without cash payment. The remaining stake would be shared between us and Lagardère.
	•	However, if we resolve not to complete the combination, we would keep a 15% interest in TPS in exchange for our initial advance of €150 million and would compensate TF1 and M6 for an amount of €100 million.
	•	Under certain strictly defined circumstances related to the conditions of the approval by the competition authorities, we could acquire TF1’s and M6’s stake in TPS for €900 million (plus interest) or could determine not to complete the combination, under circumstances described above.
	•	Moreover, TF1 and M6 would benefit from a put option granted by us on their 15% interest in the new group for a minimum of 3 years following the completion of the transaction. The exercise price of this option would be based on the market value, as determined by a third-party valuation expert, with a minimum guarantee of €1,130 million for 15% of the new pay-TV group in France, representing €7.5 billion for 100%.

	Agreement with Lagardère

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	The Canal+ Group: Unwinding of MultiThématiques/ Lagardère cross-shareholdings

	The Canal+ Group: Withdrawal from NC Numéricâble/Ypso

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	UMG: Divestiture of CD and DVD manufacturing facilities in the United States and Germany

	Divestiture of Vivendi’s stake in UGC

	Other 2005 transactions

	IACI exited Vivendi Universal Entertainment (VUE). IACI and Vivendi agreed to end litigation

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	Early termination of the derivative structure affecting 5% of the share capital of Veolia Environnement

	Partial redemption of bonds exchangeable into Sogecable shares

	Subsequent Events since December 31, 2005

	Purchase of the 7.7% stake held by Matsushita Electric Industrial (MEI) in Universal Studios Holding Corp (USHI)

	Investment in 19.9% of the voting capital of Amp’d

	Sale of Canal+’s interest in Paris Saint-Germain (PSG)

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	Increase of SFR’s stake in Neuf Telecom

	Settlement of tax dispute over DuPont Shares and Sale of DuPont Shares

	2004 developments

	Permission to use the French Consolidated Global Profit Tax System as of January 1, 2004

	Combination of VUE and NBC to form NBC Universal (NBC-Universal transaction)

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(*)	Before the closing of the NBC-Universal transaction, Vivendi exercised the call option on Barry Diller’s 1.5% stake in VUE for $275 million (€226 million).
(**)	The MEI’s 7.659% minority interest was repurchased in February 2006.

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	Divestiture of 15% of Veolia Environnement

	Listing of Maroc Telecom and full consolidation of Mauritel

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	Completion of the asset divestiture plan: Vivendi disposed of approximately €1.1 billion in assets (excluding the NBC-Universal and Veolia Environnement transactions) in 2004

	The Canal+ Group

	•	Sportfive — In March 2004, RTL Group and the Canal+ Group signed an agreement with Advent International for the divestiture of their respective interests in Sportfive. Before signing the agreement on March 31, 2004, the Canal+ Group and RTL Group acquired Jean Claude Darmon’s approximate 4.9% stake in Sportfive for a total consideration of €60 million (including a price adjustment of €5 million). The sale to Advent International of the 48.85% stake in Sportfive held by the Canal+ Group, for which the group received €274 million in cash, was completed on June 25, 2004. This divestiture generated a capital gain of €38 million (including a €22 million provision reversal).
	•	The Canal+ Group completed, among other things, the divestiture of the companies of StudioExpand’s “flux-divertissement” business in June 2004 and Canal+ Benelux in August 2004 for a total amount of €42 million (the deconsolidation of the cash held by these companies, as well as the payment of a litigation had a negative impact of €26 million on our Financial Net Debt). These divestitures generated a capital gain of €65 million (net of a €24 million provision reversal).
	•	Quai André Citroën Headquarters — In September 2004, the Canal+ Group completed the divestiture of its former headquarters at Quai André Citroën for €108 million. This divestiture generated a capital gain of €13 million.

	Non-core operations

	Vivendi Telecom International (VTI)

	•	Kencell — In May 2004, we sold our 60% interest in Kencell, Kenya’s No. 2 mobile phone operator, for a cash consideration of $230 million (€190 million as of the transaction date). This divestiture generated a capital gain of €39 million (net of a €7 million provision accrual).
	•	Monaco Telecom — In June 2004, we sold to Cable and Wireless our 55% interest in Monaco Telecom for a total cash consideration of €169 million (including a €7 million dividend distribution). This divestiture generated a capital loss of €4 million (net of a €5 million provision accrual).

	Completion of the Total Withdrawal from Publishing Operations: Divestiture of Brazilian Publishing Operations

	Divestiture of United Cinema International (UCI)

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	Other 2004 transactions

	•	Divestiture of two Philip Morris Towers — In June 2004, the divestiture of the Cèdre tower (27,000 square meters) and the Egée tower (55,000 square meters) located at La Défense, Paris, resulted in a €333 million reduction in our Financial Net debt with respect to long-term leases signed with Philip Morris in 1996. In addition, the reimbursement of the different participating loans and/or guarantees granted by us resulted into a net cash inflow of €84 million.
	•	UMG: divestiture of the stake held in VIVA Media — In August 2004, UMG sold its approximately 15% interest in VIVA Media to Viacom for a total consideration of €47 million. This divestiture generated a capital gain of €26 million.

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		Year ended
		December 31,
		2005				2004
		(In millions of
		euros, except per
		share amounts)
Revenues		€	19,484			€	17,883
Cost of revenues			(9,898	)			(9,100	)
Margin from operations			9,586				8,783
Margin from operations rate			49	%			49	%
Selling, general and administrative expenses			(5,807	)			(5,464	)
Other operating expenses			(33	)			(86	)
Earnings from operations			3,746				3,233
Other income from ordinary activities			75				89
Other charges from ordinary activities			(170	)			(25	)
Income from equity affiliates			326				221
Earnings before interest, other financial charges and income and income taxes			3,977				3,518
Interest			(218	)			(406	)
Other financial charges and income			619				1,226
Interest and other financial charges and income			401				820
Earnings from continuing operations before income taxes			4,378				4,338
Provision for income taxes			(204	)			(292	)
Earnings from continuing operations			4,174				4,046
Earnings from discontinued operations			92				777
Earnings		€	4,266			€	4,823
Attributable to:
Equity holders of the parent		€	3,154			€	3,767
Minority interests			1,112				1,056
Earnings, attributable to the equity holders of the parent per share — basic (in euros)		€	2.74			€	3.29
Earnings, attributable to the equity holders of the parent per share — diluted (in euros)		€	2.72			€	3.27

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	•	a €513 million increase in earnings from operations, as a result of the return to break-even at Vivendi Games (+€244 million), the return to growth at UMG (+€121 million) and ongoing profitability at SFR (+€90 million despite a negative net impact of €115 million of non recurring items in 2005) and at Maroc Telecom (+€100 million);
	•	a €188 million reduction in interest, resulting from the decrease in the average amount of borrowings as well as improved financing conditions;
	•	a €105 million increase in income from equity affiliates; and
	•	€88 million from lower provisions for income taxes mainly due to non-recurring items. Excluding non-recurring items, provisions for income taxes were higher as a result of the improvement in taxable earnings (UMG, SFR, Maroc Telecom), offset by tax savings resulting from the utilization of ordinary losses carried forward in France and in the United States.

	•	a €685 million decrease in earnings from discontinued operations. The 2004 numbers reflected the impact of the divestiture of VUE on May 11, 2004, including capital gains for €707 million and 80% of charges and income generated by VUE over the period in the amount of €132 million;
	•	a €607 million decrease in other financial income, mainly due to capital gains on the divestiture of businesses or financial investments in the amount of €668 million in 2005 compared to €1,738 million in 2004 (including €1,606 million of capital gain on the sale of the 15% Veolia Environnement stake);
	•	a €145 million increase in other charges from ordinary activities, mainly resulting from the accounting in 2005 of non-cash adjustments relating to the NBC-Universal transaction;
	•	a €56 million increase in minority interest earnings; and
	•	a €14 million decrease in other income from ordinary activities.

(5)

Comparable basis essentially illustrates the effect of the divestitures that occurred in 2005 (primarily, NC Numéricâble) and 2004 (mainly, the “Flux-divertissement” business of StudioExpand, Canal+ Benelux, UMG’s music clubs, Kencell and Monaco Telecom) and includes the full consolidation of minority interests in distribution subsidiaries at SFR and of Mauritel at Maroc Telecom as if these transactions had occurred as of January 1, 2004. In 2004, Comparable basis also includes estimated mobile-to-mobile sales at SFR applying in 2004 the rate applied in 2005.

(6)

Mobile-to-mobile sales were not invoiced (income and expenses) between French mobile operators until December 31, 2004. They have been treated as an exchange of goods and services, the fair value of which was not determinable for the year ended December 31, 2004, and no revenues were recognized on these calls. Since 2005, these call terminations have been invoiced. For the year ended December 31, 2004, the impact of estimated mobile-to-mobile sales amounted to €875 million on revenues and to -€875 million on cost of revenues.

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	Impact of amortized cost on borrowings (including premiums incurred for early redemption)

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	•	Premiums incurred for the early redemption of notes and other financial liabilities represented a charge of €71 million as of December 31, 2005, compared to a €308 million charge as of December 31, 2004, corresponding to the premium (including accrued interests) related to the early redemption of 83% of the High Yield Notes in June 2004. A charge of €50 million was incurred in 2005 for the redemption of the remaining High Yield Notes in January 2005. In addition, the early redemption of the bonds exchangeable into Vinci shares in the course of March 2005 generated a charge of €27 million.
	•	In 2005, the impact of amortized cost on borrowings represented a charge of €44 million (compared to a charge of €178 million as of December 31, 2004, including a €53 million charge due to the cancellation of credit lines following the NBC-Universal transaction).

	Changes in value of derivative instruments

	•	the early termination of the collar on the 5% stake in Veolia Environnement in 2005, representing an upside adjustment of €25 million;
	•	the upside adjustment to the value of the embedded option on the bonds exchangeable into Sogecable shares (€16 million in 2005), corresponding to the portion of the bonds not exchanged during the fourth quarter of 2005, compared to a downside adjustment of €11 million in the first nine months of 2004; and
	•	the smaller downside adjustment to the value of the put option granted to SNCF on 35% of the capital of Cegetel SAS exercised on August 22, 2005 (€14 million as of December 31, 2005, compared to €35 million as of December 31, 2004).

	Change in financial component of costs related to employee benefit plans

	Gain/(loss) on the divestiture of businesses or financial investments

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	Adjustments to conform to US GAAP

		Year Ended
		December 31,
US GAAP		2005				2004
		(In millions, except
		per share amount)
Revenues		€	20,156			€	21,208
Earnings from operations(a)			3,311				3,334
Earnings, attributable to equity holders of the parent			2,571				2,921
Earnings, attributable to equity holders of the parent per share — basic		€	2.39			€	2.73
Earnings, attributable to equity holders of the parent per share — diluted		€	2.28			€	2.61

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(a)	The reconciliation of the earnings from operations as reported under IFRS to the earnings from operations under US GAAP is as follows:

				Year Ended December 31, 2005
								Vivendi				Canal+								Maroc				Holding and				Non core								Total
				UMG				Games				Group				SFR				Telecom				Corporate				operations				VUE				Vivendi
				(In millions of euros)
Earnings from operations — IFRS				€	480			€	41			€	203			€	2,422			€	762			€	(195	)		€	33			€	—			€	3,746
	Adjustments to conform to US GAAP
		Business combinations/goodwill/ impairment			(2	)			—				2				(6	)			—				(124	)			—				—				(130	)
		Divestiture of Cegetel			—				—				—				(51	)			—				(2	)			—				—				(53	)
		Employee benefit plans			(23	)			—				—				—				—				(44	)			—				—				(67	)
		Share-based compensation			1				—				—				—				—				45				—				—				46
		Intangible assets			—				(6	)			—				(147	)			(31	)			—				—				—				(184	)
		Other			(22	)			(10	)			—				12				(14	)			(21	)			8				—				(47	)
Earnings from operations — US GAAP				€	434			€	25			€	205			€	2,230			€	717			€	(341	)		€	41			€	—			€	3,311

				Year Ended December 31, 2004
								Vivendi				Canal+								Maroc				Holding and				Non core								Total
				UMG				Games				Group				SFR				Telecom				Corporate				operations				VUE				Vivendi
				(In million of euros)
Earnings from operations — IFRS				€	359			€	(203	)		€	188			€	2,332			€	662			€	(193	)		€	88			€	—			€	3,233
	Adjustments to conform to US GAAP
		Business combinations/goodwill/impairment			(6	)			(2	)			(19	)			—				—				—				—				—				(27	)
		Divestiture of VUE and Cegetel			1				—				—				(67	)			—				(1	)			—				387				320
		Employee benefit plans			(31	)			—				—				—				—				(55	)			—				—				(86	)
		Share-based compensation			6				5				10				14				1				8				—				—				44
		Intangible assets			—				6				—				(110	)			—				—				—				—				(104	)
		Other			(33	)			(15	)			(20	)			3				11				—				8				—				(46	)
Earnings from operations — US GAAP				€	296			€	(209	)		€	159			€	2,172			€	674			€	(241	)		€	96			€	387			€	3,334

	—	Divestiture of VUE (May 2004) and Cegetel (August 2005): Under US GAAP, VUE and Cegetel did not qualify as discontinued operations and as a result were fully consolidated in the consolidated statement of earnings until their disposal, which occurred on May 11, 2004 and August 22, 2005, respectively. However, these operations qualified as discontinued under IFRS and were presented on a single line of the statement of earnings during the relevant periods. See “Item 18. Financial Statements — Note 34.4”.
	—	Acquisition of minority interests in SFR (26% in January 2003) and in Maroc Telecom (16% in January 2005): Under US GAAP, acquisitions of minority interests in SFR and Maroc Telecom were treated as step- up acquisitions and consequently, the purchase price was allocated to the fair value of the incremental portion of the identifiable assets acquired and liabilities assumed, with any excess being allocated to goodwill. Under IFRS, the difference between the purchase price of the minority interests acquired and their net carrying value was recognized as goodwill. Consequently, earnings from operations in US GAAP include the amortization of the portion of the purchase price allocated to definite-lived intangible assets, in particular to customer relationship. Regarding SFR, the customer relationship was valued on the basis of both the acquisition costs of new customers at the date of the transaction and the discounted value of expected revenues attributable to the customers

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		existing at the date of the acquisition. This customer relationship is amortized over periods ranging from 3 to 5 years. The related charge amounted to €147 million in 2005 and 2004. For Maroc Telecom, in US GAAP, the customer relationships were valued on the basis of the discounted value of expected revenues attributable to the customers existing at the date of the acquisition. These customer relationships are amortized over periods ranging from 6 to 7 years. The mobile license is amortized over 11 years. The related amortization charges amounted to €31 million in 2005. See “Item 18. Financial Statements — Note 34.5”.
	—	Impairment losses of goodwill and other intangible assets acquired through business combinations: the impairment losses recorded with respect to goodwill and other intangible assets acquired through business combinations were included in earnings from operations under US GAAP for €130 million in 2005 and €27 million in 2004. Under IFRS, they were excluded from earnings from operations. See “Item 18. Financial Statements — Note 34.5”.

	—	under IFRS, the carrying value did not include that portion of the cumulative translation adjustment which was reclassified to earnings at the time of divestiture. In addition, as a result of its reversal against retained earnings pursuant to IFRS 1, the cumulative foreign currency translation adjustments were nil as of January 1, 2004; and
	—	under US GAAP, the carrying value also included that portion of the cumulative translation adjustment which was reclassified to earnings at the time of divestiture. As a result, the carrying value of VUE was reduced and a corresponding impairment loss of €920 million was recognized on December 31, 2003.

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	Revenues and earnings from operations by business segment for the years ended December 31, 2005 and 2004

	Revenues and earnings from operations as published by business segment for the years ended December 31, 2005 and 2004

			AS PUBLISHED
			Year ended December 31,
			2005				2004				% Change
			(In millions of euros)
Revenues
	Universal Music Group		€	4,893			€	4,989				-1.9	%
	Vivendi Games			641				475				34.9	%
	Canal+ Group			3,452				3,560				-3.0	%
	SFR(a)			8,687				7,192				20.8	%
	Maroc Telecom			1,860				1,581				17.6	%
	Non core operations and elimination of inter segment transactions(b)			(49	)			86				na	*
	Total Vivendi		€	19,484			€	17,883				9.0	%
Earnings from operations
	Universal Music Group		€	480			€	359				33.7	%
	Vivendi Games			41				(203	)			na	*
	Canal+ Group			203				188				8.0	%
	SFR(a)			2,422				2,332				3.9	%
	Maroc Telecom			762				662				15.1	%
	Holding & Corporate			(195	)			(193	)			-1.0	%
	Non core operations(b)			33				88				-62.5	%
	Total Vivendi		€	3,746			€	3,233				15.9	%
Earnings from operations/Revenues(%)				19	%			18	%			+1 point

(a)	In accordance with IFRS 5, Cegetel qualified as discontinued operations as of January 1, 2004. Net income and expenses from January 1, 2004 to August 22, 2005 were deconsolidated and presented in the amount of 71.8% in earnings from discontinued operations and in the amount of 28.2% in income from equity affiliates. Consequently, revenues and earnings from operations as published for SFR for both 2005 and 2004 exclude Cegetel and only include mobile operations (including the distribution subsidiaries as of January and April 2005). In addition, as of January 1, 2005, SFR revenues include mobile-to-mobile sales for €909 million for the year ended December 31, 2005.
(b)	Includes Vivendi Telecom International, Vivendi Valorisation and other non core businesses.

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	Revenues and earnings from operations on a comparable basis by business segment for the years ended December 31, 2005 and 2004

			COMPARABLE BASIS (UNAUDITED)
			Year ended December 31,
															% Change at
															constant
			2005				2004				% Variation				currency
			(In millions of euros)
Revenues
	Universal Music Group		€	4,893			€	4,819				1.5	%			1.6	%
	Vivendi Games			641				475				34.9	%			34.6	%
	Canal+ Group			3,407				3,277				4.0	%			3.3	%
	SFR(a)			8,687				8,117				7.0	%			7.0	%
	Maroc Telecom			1,860				1,611				15.5	%			16.0	%
	Non core operations and elimination of inter segment transactions			(49	)			(62	)			21.0	%			21.0	%
	Total Vivendi		€	19,439			€	18,237				6.6	%			6.5	%
Earnings from operations
	Universal Music Group		€	480			€	399				20.4	%			18.8	%
	Vivendi Games			41				(203	)			na	*			na	*
	Canal+ Group			176				187				-5.9	%			-9.3	%
	SFR(a)			2,422				2,338				3.6	%			3.6	%
	Maroc Telecom			762				671				13.6	%			14.2	%
	Holding & corporate			(195	)			(193	)			-1.0	%			-1.6	%
	Non core operations			33				63				-47.6	%			-47.6	%
	Total Vivendi		€	3,719			€	3,262				14.0	%			13.7	%
Earnings from operations/Revenues (%)				19	%			18	%			+1 point				+1 point

(a)	As of January 1, 2005, SFR revenues include mobile-to-mobile sales for €909 million for the year ended December 31, 2005. In 2004, comparable basis also included estimated mobile-to-mobile sales applying in 2004 the rate applied in 2005, representing €875 million for the year ended December 31, 2004.

	Reconciliation of revenues and earnings from operations as published to revenues and earnings from operations on a comparable basis

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			Year ended December 31, 2004
							Divestiture								SFR				Mobile-to-								Divestiture								Comparable
			As				of Canal+				UMG’s Music				distribution				mobile								of VTI								basis
			published				assets(a)				Clubs				subsidiaries				sales(b)				Mauritel				assets(c)				Other				(unaudited)
			(In millions of euros)
Revenues
	Universal Music Group		€	4,989			€	—			€	(170	)		€	—			€	—			€	—			€	—			€	—			€	4,819
	Vivendi Games			475				—				—				—				—				—				—				—				475
	Canal+ Group			3,560				(283	)			—				—				—				—				—				—				3,277
	SFR			7,192				—				—				50				875				—				—				—				8,117
	Maroc Telecom			1,581				—				—				—				—				31				—				(1	)			1,611
	Non core operations and elimination of inter segment transactions			86				—				—				—				—				—				(118	)			(30	)			(62	)
	Total Vivendi		€	17,883			€	(283	)		€	(170	)		€	50			€	875			€	31			€	(118	)		€	(31	)		€	18,237
Earnings from operations
	Universal Music Group		€	359			€	—			€	40			€	—			€	—			€	—			€	—			€	—			€	399
	Vivendi Games			(203	)			—				—				—				—				—				—				—				(203	)
	Canal+ Group			188				(1	)			—				—				—				—				—				—				187
	SFR			2,332				—				—				6				—				—				—				—				2,338
	Maroc Telecom			662				—				—				—				—				9				—				—				671
	Holding & Corporate			(193	)			—				—				—				—				—				—				—				(193	)
	Non core operations			88				—				—				—				—				—				(17	)			(8	)			63
	Total Vivendi		€	3,233			€	(1	)		€	40			€	6			€	—			€	9			€	(17	)		€	(8	)		€	3,262
Earnings from operations/Revenues(%)				18	%																															18	%

(a)	Mainly corresponds to “Flux-divertissement” business of StudioExpand, Canal+ Benelux and NC Numéricâble.
(b)	Corresponds to an estimate of the mobile-to-mobile sales applying in 2004 the rate applied in 2005.
(c)	Corresponds to Monaco Telecom and Kencell.

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			Year ended December 31,
															Comparable basis
			As published												(unaudited)(a)
																			% change at
			2005				2004				% change				% change				constant currency
			(In millions of euros, except for margins)
Revenues
	North America(b)		€	2,091			€	2,006				4.2	%			4.2	%			4.5	%
	Europe			1,821				2,003				-9.1	%			-0.6	%			-0.6	%
	Asia			425				455				-6.6	%			-6.6	%			-5.0	%
	Rest of the world(b)			207				191				8.5	%			8.5	%			1.9	%
				4,544				4,655				-2.4	%			1.3	%			1.4	%
	Publishing			392				372				5.6	%			5.6	%			5.8	%
	Elimination of intercompany transactions			(43	)			(38	)			-14.6	%			-14.6	%			-14.7	%
	Total UMG		€	4,893			€	4,989				-1.9	%			1.5	%			1.6	%
Earnings from operations			€	480			€	359				33.8	%			20.4	%			18.8	%
Earnings from operations/Revenues (%)				10	%			7	%			+3 points				+2 points				+2 points
Physical market shares(c)
	North America			34.0	%			32.5	%
	Europe			25.4	%			26.8	%
	Asia			12.3	%			12.4	%
	Rest of the world			na	*			na	*
	Total UMG			25.6	%			25.5	%
Physical music market growth(c)
	North America			-7.0	%			2.2	%
	Europe			-5.0	%			-5.3	%
	Asia			-8.8	%			-1.8	%
	Rest of the world			na	*			na	*
	Total World			-6.3	%			-1.3	%

(a)	Comparable basis primarily illustrates the effect of the divestitures of UMG’s music clubs in the United Kingdom and in France as if these transactions had occurred as of January 1, 2004.
(b)	In order to better reflect management responsibility, some operations presented in “rest of the world” in 2004 were reallocated to North America. As a result, breakdown of revenues by business differs from figures published in 2004.
(c)	Physical music market and market share data for 2005 are UMG estimates using the IFPI methodology. Physical music market and market share data for 2004 are IFPI data. Excludes digital sales.

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		2005						2004
Artist		Units				Artist		Units
Mariah Carey			8			Eminem			9
50 Cent			8			U2			8
Black Eyed Peas			7			Shania Twain			5
Eminem			5			Guns N’Roses			5
Gwen Stefani			4			Black Eyed Peas			4
Kanye West			4			Nelly (Suit)			4
Jack Johnson			4			Ashlee Simpson			4
The Game			3			D-12			3
Nickelback			3			Kanye West			3
NOW 20			3			Keane			3
The Killers			3			NOW 16			3
Bon Jovi			3			Toby Keith			3
OST “Get Rich Or Die Tryin”			2			George Strait			3
The Pussycat Dolls			2			Hoobastank			3
Fallout Boy			2			Gwen Stefani			2
% of top 15 of total units sold by UMG			13	%					13	%

	Revenues

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			As published
			Year ended December 31,
															% change at
			2005				2004				% change				constant currency
			(In millions of euros, except for margins)
Revenues				€641				€ 475				34.9	%			34.6	%
Earnings from operations				€ 41				€(203	)			na	*			na	*
Earnings from operations/ Revenues(%)				6	%			na	*			na	*			na	*
% sales
	PC			17	%			46	%
	Console			34	%			48	%
	Online games and other			49	%			6	%
Breakdown of revenues by geographical area
	North America			53	%			56	%
	Europe			33	%			34	%
	Asia pacific and rest of the world			14	%			10	%
*na: not applicable

Best-selling titles

World of Warcraft

Half-Life 2

50 Cent: Bulletproof

Simpsons: Hit

Crash Tag Team

and Run

Racing

Crash Twinsanity

Robots

World of Warcraft

F.E.A.R.

Spyro: A Hero’s Tail

Hulk II

	Revenues

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	Earnings from operations

				Year ended December 31,
																Comparable basis
				As published												(unaudited)(a)
				2005				2004				% change				% change
				(In millions of euros, except for margins)
Revenues
	Pay-TV — France(b)			€	2,765			€	2,663				3.8	%			4.3	%
	Other core operations(b)				642				624				2.9	%			3.1	%
	Other(b)				45				273				-83.5	%			na	*
	Total Canal+ Group				3,452				3,560				-3.0	%			4.0	%
Earnings from operations				€	203			€	188				8.0	%			-5.9	%
Earnings from operations/Revenues(%)					6	%			5	%			+1 point
Subscriptions (in thousands)
		Analog			2,278				2,455				-7.2	%			-7.2	%
		Digital			2,186				1,917				14.0	%			14.0	%
	Individual subscribers				4,464				4,372				2.1	%			2.1	%
	Collective(c)				407				395				3.0	%			3.0	%
	Overseas (individual and collective)(c)				190				188				1.1	%			1.1	%
Total Canal+ (premium channel)					5,061				4,955				2.1	%			2.1	%
CanalSat					3,192				2,989				6.8	%			6.8	%
NC Numéricâble					—				436				na	*			na	*
Total subscriptions in France					8,253				8,380				-1.5	%			3.9	%

(a)	Comparable basis primarily illustrates the effect of the divestitures made by the Canal+ Group (Canal+ Benelux in 2004 and NC Numéricâble in March 2005) as if these transactions had occurred as of January 1, 2004.
(b)	To better reflect the performances of each separate business, the Canal+ Group has reallocated dedicated operations (notably NC Numéricâble, with revenues of €175 million in 2004) to the line “Other” and holding costs to the line “Other core operations”; these elements were previously reported in “Pay-TV — France”. Moreover, the line “Other core operations” includes operations from StudioCanal, pay-TV activities in Poland, PSG soccer club and holdings.
(c)	Overseas collective subscriptions, previously recorded under the “Collective” line in 2004, are now reported with individual subscribers in “Overseas” line.

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	Revenues

	Pay-TV

	Other core operations

	Earnings from operations

	Pay-TV

	Other core operations

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				Year ended December 31,
																Comparable
																basis
				As published												(unaudited)(a)
				2005				2004				% change				% change
				(In millions of euros, except for margins)
Revenues
		Network revenues		€	8,220			€	6,837				20.2	%			7.1	%
		Equipment sales, net			348				286				21.7	%			-6.2	%
		Other (including connection fees)			119				69				72.5	%			72.5	%
	Total SFR			€	8,687			€	7,192				20.8	%			7.0	%
Earnings from operations				€	2,422			€	2,332				3.9	%			3.6	%
Earnings from operations/Revenues(%)					na	*			na	*			na	*			-1 point	(b)
Capital expenditures (Capex)				€	1,072			€	876				22.4	%			20.4	%
Customers (end of period, in thousands)(c)
		Postpaid			10,880				9,601				13.3	%
		Prepaid			6,318				6,219				1.6	%
	Total SFR trade name				17,198				15,820				8.7	%
	Wholesale customers total base				119				—				na	*
	Total SFR network				17,317				15,820				9.5	%
Market share (customer base)(c)/(d)					35.8	%			35.5	%			+0.3  point
Market share (new customers)(c)/(d)					39.4	%			38.2	%			+1.2  point
ARPU (in euros/year)(e)
		Postpaid			576				603				-4.5	%			-3.7	%
		Prepaid			186				183				1.6	%			1.8	%
		Total			429				432				-0.7	%			-0.2	%
Data ARPU (in euros/year)					59				50				18.0	%
AUPU (in minutes/year)(f)					296				268				10.5	%
Churn rate (in %/year)
		Postpaid			12	%			14	%			-2 points
		Total SFR customers			23	%			24	%			-1 point

(a)	For 2004, comparable basis includes estimated mobile-to-mobile sales at SFR applying in 2004 the rate applied in 2005 and illustrates the full consolidation of minority stakes in distribution subsidiaries as of January 1, 2004. It does not include the revenues from phone directory activities (Annuaire Express) as of January 1, 2004 (with an impact on network revenues and ARPU and with no impact on SFR total revenues).
(b)	On a comparable basis, the margin rate declined in 2005 compared to 2004 due to a fine from the French Competition Council, which SFR appealed.
(c)	Source: French Telecommunications Regulatory Authority (ARCEP).
(d)	SFR excluding wholesale customer total base.
(e)	ARPU (Average Revenue Per User) is calculated by dividing revenues net of promotions and net of third-party content provider revenues (including toll numbers related revenues) excluding roaming in and equipment sales by average ARCEP total customer base for the last twelve months. ARPU is calculated excluding estimated mobile-to-mobile sales.

(f)	AUPU (Average Usage per User) is defined as the incoming and outgoing “voice” volumes divided by the average customer base (as defined by ARCEP) for the last twelve months.

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	Revenues

	Earnings from operations

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			Year ended December 31,
															Comparable
															Basis
															(unaudited)(a)
			As published
															% change at
			2005				2004				% change				constant currency
			(In millions of euros, except for margins)
Revenues
	Mobile			1,156				879				31.5	%			29.2	%
	Fixed and Internet			1,082				1,011				7.0	%			5.9	%
	Elimination of intercompany transactions			(378	)			(309	)			na	*			na	*
	Total Maroc Telecom		€	1,860			€	1,581				17.6	%			16.0	%
Earnings from operations			€	762			€	662				15.1	%			14.2	%
Earnings from operations/ Revenues(%)				41	%			42	%			-1 point
Mobile(b)
	Number of customers (end of period, in thousands)			8,800				6,361				38.3	%
	% of prepaid customers			96	%			96	%
Market share (as per ANRT)				67	%			68	%
ARPU (in euros/ month)(c)
	Postpaid			64.3				71.8				-10.4	%
	Prepaid			8.5				8.6				-1.2	%
	Total			10.8				11.2				-3.6	%
Churn rate (in %/ year)
	Postpaid			14	%			16	%
	Prepaid			12	%			11	%
	Total			12	%			12	%
Fixed and Internet (in thousands)(b)
Number of lines(d)
	Residential			885				890				-0.6	%
	Public phone(e)			164				136				20.6	%
	Professional and corporate			292				283				3.2	%
Total				1,341				1,309				2.4	%
Number of Internet subscribers				252				105				na	*
	Number of ADSL subscribers			242				60				na	*

(a)	Comparable basis illustrates the effects of the full consolidation of Mauritel as if this transaction had occurred on January 1, 2004.
(b)	Excluding Mauritel.
(c)	ARPU (Average Revenue per User) is calculated by dividing revenues (from incoming and outcoming calls and data services) net of promotions excluding roaming in and equipment sales by average customer base over the period.
(d)	Excluding Internet customers.
(e)	Including “Téléboutique” lines and Maroc Telecom’s public phones.

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	Revenues

	Mobile

	Fixed

	Earnings from operations

	Earnings (losses) from operations

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			As Published
			Year Ended
			December 31,
			2005				2004
			(In millions of
			euros)
Revenues
	Vivendi Telecom International (VTI)		€	6			€	125
	Other operations		€	55			€	86
Non core operations				61				211
Elimination of inter segment transactions				(110	)			(125	)
Total revenues				(49	)			86
Earnings from operations			€	33			€	88

	Revenues

	Earnings from operations

	Change in the Financial Net Debt in 2005

	•	an increase in the amount of tax paid to €1,386 million (compared to €622 million in 2004). This reflects SFR’s tax payments resulting from the reorganization of SFR Cegetel’s legal structure in 2003 (€1,414 million paid in 2005, of which €628 million was for the 2004 fiscal year, compared to

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		€68 million paid in 2004), which was partly offset by €465 million received from the French Treasury in respect of the Consolidated Global Profit Tax System for fiscal year 2004;
	•	a net increase in capital expenditures to €1,491 million (32%), mainly at Maroc Telecom (+38%) and SFR (+26%);
	•	the cost of interest on borrowings and refinancing activities (€540 million), including:

	•	the cost of interest on borrowings, which decreased substantially to €218 million (as compared to €406 million in 2004);
	•	refinancing costs of €111 million (with an impact of €281 million on cash and cash equivalents) including unwinding interest-rate swaps without counterparties and the early redemption of bonds exchangeable for Vinci shares and the remaining High Yield Notes; and
	•	the cost of foreign exchange hedging (€217 million), due to the increase of the US dollar in 2005.

	•	financing activities of €1,723 million, including:

	•	dividend payments made to Vivendi shareholders (€689 million) and minority shareholders (€965 million); and
	•	the favorable impact of partial reimbursement of the Sogecable convertible bonds (€363 million) in exchange for Sogecable shares held by Vivendi.

	•	investing activities of €95 million, including:

	•	the acquisition of an additional 16% interest in Maroc Telecom for €1,112 million, already accounted for at the end of 2004;
	•	the positive impact of the Cegetel-Neuf Telecom combination (+€97 million) (including a €329 million negative impact on cash and cash equivalents and a €426 million decrease in borrowings and other financial liabilities);
	•	other investing operations (€560 million), including the unwinding of IACI’s interest in VUE (€203 million), the acquisition of a 2% interest in Elektrim Telekomunikacja (€91 million), the acquisition of development studios by Vivendi Games (€52 million) and various other acquisitions (€214 million); and
	•	divestitures for €609 million, including the partial redemption of Notes issued by Neuf Telecom (€200 million), the divestiture of NC Numéricâble/Ypso (€133 million), the divestiture of UGC (€54 million), various other divestitures and the reimbursement of financial receivables for €221 million.

	Changes in the Financial Net Debt in 2004

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			December 31, 2005
							Commitments to				Derivative financial
							purchase minority				instruments and				Financial Net
			Borrowings				interests				other(a)				Debt
			(In millions of euros)
Borrowings and other financial liabilities
	Long-term		€	4,442			€	39			€	64			€	4,545
	Short-term			2,125				69				21				2,215
Derivative financial instruments in assets				—				—				(29	)			(29	)
Cash deposits backing borrowings				—				—				(61	)			(61	)
			€	6,567			€	108			€	(5	)		€	6,670
Cash and cash equivalents																(2,902	)
Financial Net Debt															€	3,768

			December 31, 2004
							Commitments to				Derivative financial
							purchase minority				instruments and				Financial Net
			Borrowings				interests				other(a)				Debt
			(In millions of euros)
Borrowings and other financial liabilities
	Long-term		€	4,497			€	414			€	446			€	5,357
	Short-term		€	1,722			€	1,103			€	17				2,842
Derivative financial instruments in assets				—				—				(257	)			(257	)
Cash deposits backing borrowings				—				—				(59	)			(59	)
			€	6,219			€	1,517			€	147			€	7,883
Cash and cash equivalents																(3,159	)
Financial Net Debt															€	4,724

(a)	“Other” corresponds to cash deposits backing borrowings.

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										Impact on
		Cash and cash				Borrowings				Financial Net
		equivalents				and other(a)				Debt
		(In millions of euros)
Financial Net Debt as of January 1, 2004		€	(2,726	)		€	12,654			€	9,928
Net cash related to:
Operating activities			(4,238	)			—				(4,238	)
Investing activities			(3,744	)			(407	)			(4,151	)
Financing activities			7,545				(4,404	)			3,141
Foreign currency translation adjustments			15				14				29
Net cash of discontinued operations			(11	)			26				15
Change in financial net debt over the year ended December 31, 2004			(433	)			(4,771	)			(5,204	)
Financial Net Debt as of December 31, 2004		€	(3,159	)		€	7,883				4,724
Net cash related to:
Operating activities			(3,558	)			—				(3,558	)
Investing activities			2,817				(1,402	)			1,415
Financing activities			1,035				148				1,183
Foreign currency translation adjustments			(37	)			41				4
Net cash of discontinued operations			—				—				—
Change in financial net debt over the year ended December 31, 2005			257			€	(1,213	)			(956	)
Financial Net Debt as of December 31, 2005			(2,902	)		€	6,670			€	3,768

(a)	“Other” comprises commitments to purchase minority interests, derivative financial instruments and cash deposits backing borrowings.

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				Year ended December 31,
				2005				2004				% change
				(In millions of euros)
Revenues				€	19,484			€	17,883				9	%
Operating expenses excluding depreciation and amortization					(14,153	)			(12,948	)			9	%
	Sub-total				5,331				4,935				8	%
Restructuring charges paid					(110	)			(140	)			-21	%
Dividends received from unconsolidated companies					37				23				61	%
Dividends received from equity affiliates
	NBC Universal				346				357				-3	%
	Other				9				47				-81	%
					355				404				-12	%
Content investments, net(a)
	Advances to artists and repertoire owners, net at UMG
		Payment of advances			(588	)			(535	)			10	%
		Recoupment of advances			570				669				-15	%
					(18	)			134				na	*
	Film and television rights, net at Canal+ Group
		Acquisition of film and television rights			(567	)			(588	)			-4	%
		Consumption of film and television rights			551				578				-5	%
					(16	)			(10	)			60	%
	Sports rights, net at Canal+ Group(b)
		Acquisition of sports rights			(554	)			(383	)			45	%
		Consumption of sports rights			570				460				24	%
					16				77				-79	%
	Other				3				18				-83	%
					(15	)			219				na	*
Other changes in net working capital and other					50				39				28	%
Net cash provided by operating activities before interest paid, other financial items and income tax paid				€	5,648			€	5,480				3	%
Interest paid					(218	)			(406	)			-46	%
Premium paid as part of the early redemption of borrowings and the unwinding of derivative instruments
	Unwinding of interest rate swaps without cash consideration(c)				(131	)			(56	)			na	*
	Early redemption of bonds exchangeable into Vinci shares(c)				(108	)			(8	)			na	*
	Early redemption of the High Yield Notes				(41	)			(265	)			na	*
	Other				(1	)			—				na	*
					(281	)			(329	)			-15	%

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			Year ended December 31,
			2005				2004				% change
			(In millions of euros)
Other financial items (excluding sales of financial investments)				(210	)			87				na	*
Income tax (paid)/collected
	Income tax paid at SFR			(1,414	)			(68	)			na	*
	Payment received from the French State Treasury as part of the Consolidated Global Profit Tax System			465				—				na	*
	Other			(437	)			(554	)			-21	%
				(1,386	)			(622	)			na	*
	Other			5				28				-82	%
Net cash provided by operating activities			€	3,558			€	4,238				-16	%
Contribution to the reduction of financial net debt			€	(3,558	)		€	(4,238	)			-16	%

(a)	For more details, please refer to “Item 18. Financial Statements — Note 10. Content assets and liabilities as of December 31, 2005 and December 31, 2004”.
(b)	The Canal+ Group obtained exclusive rights to broadcast the French Professional Soccer League 1 for the seasons 2005/2006, 2006/2007 and 2007/2008. The cost of these rights were €1,800 million, representing €600 million per season. They have been recognized as follows:

	•	Rights were recorded as off-balance sheet commitments for €1,800 million at their acquisition date in December 2004.
	•	Upon the opening of each League 1 season (in July 2005, July 2006 and July 2007, respectively), the rights corresponding to the related season are recognized in the Statement of Financial Position, as current content assets (less than 12 months), against current accounts payable owed to the French Professional Soccer League. Therefore, in July 2005, we recorded a €600 million content asset and an accounts payable for the same amount (to which the related VAT was added) in our statement of financial position. As of that date, the rights recorded as off-balance sheet commitments were €1,200 million with respect to the 2006/ 2007 and 2007/ 2008 seasons.
	•	The asset is then amortized as cost of revenues over its broadcasting period, on a pro rata basis of the games broadcast. As of December 31, 2005, after broadcasting 19 days of League 1 soccer, the portion of the amortized rights related to the 2005/ 2006 season was €300 million and the net amount of these rights in content assets was €300 million.
	•	Accounts payable are amortized in line with payments to the French Professional Soccer League. As of December 31, 2005, in accordance with the payment schedule, payments related to the rights to the 2005/ 2006 season totaled €273 million and the accounts payable balance (including VAT) was €391 million.

(c)

Pursuant to IAS 32 and IAS 39, derivative financial instruments are recognized in the Statement of Financial Position at fair value. When this value is negative (for example, interest rate orphan swaps, net of interest), these instruments are recorded as financial liabilities under “borrowings and other liabilities”. Consequently, when a derivative financial instrument is unwound at its market value, as recorded in the Statement of Financial Position, the premium paid is deducted from cash but has no impact on Financial Net Debt, the corresponding liability having already been reflected in the Statement of Financial Position.

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				Impact on				Impact on				Impact on
				cash and cash				borrowings				Financial
				equivalents				and other (a)				Net Debt
				(In millions of euros)
Financial investments
	Purchases of consolidated companies, after acquired cash
		Acquisition of an additional 16% stake in Maroc Telecom by Vivendi (January)		€	1,112			€	(1,100	)		€	12
		Unwinding of cross-shareholdings in MultiThématiques: purchase by Canal+ of the shares held by Lagardère (February)			20				—				20
		Vivendi Games — acquisition of development studios: Radical, Swingin’ Ape, Swordfish and High Moon Studios			52				—				52
		Telco/Carcom (December)			80				50				130
		Other(b)			142				(1	)			141
	Total financial investments				1,406				(1,051	)			355
Financial divestments
Proceeds from sales of consolidated companies, after divested cash
		Merger Cegetel — Neuf Telecom (August)			329				(426	)			(97	)
		Termination on Veolia Environnement collar option (October)			(140	)			93				(47	)
		NC Numéricâble — enterprise value (March)			(96	)			—				(96	)
		Preferred shares with no Ypso voting right (December)			(37	)			—				(37	)
		Unwinding of IACI stake in VUE by Vivendi (June)			203				—				203
		Other(b)			(59	)			(18	)			(77	)
					200				(351	)			(151	)
	Sales of investments in equity affiliates
		Sale of the stake in UGC			(54	)			—				(54	)
	Decrease in financial assets
		Reimbursement of bonds issued by Neuf Telecom			(200	)			—				(200	)
		Other			(26	)			—				(26	)
					(226	)			—				(226	)
	Total financial divestments				(80	)			(351	)			(431	)
Investing activities in 2005 excluding capital expenditures and proceeds from sales of property, plant, equipment and intangible assets					1,326				(1,402	)			(76	)
	Capital expenditures
		At SFR			1,099				—				1,099
		At Maroc Telecom			291				—				291
		Other			190				—				190
					1,580				—				1,580
	Proceeds from sales of property, plant, equipment and intangible assets				(89	)			—				(89	)
Investing activities in 2005					2,817				(1,402	)			1,415

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				Impact on				Impact on				Impact on
				cash and cash				borrowings				Financial
				equivalents				and other (a)				Net Debt
				(In millions of euros)
Financial investments
	Purchases of consolidated companies, after acquired cash
		VUE — exercise of the call option on Barry Diller’s stake (1.5%) (May)		€	226			€	—			€	226
		DreamWorks — purchase of the music rights catalog (January)			64				—				64
		DreamWorks — advance on film rights distribution agreement (January)			30				—				30
		Other(b)			44				(12	)			32
					364				(12	)			352
	Purchases of investments in equity affiliates
		Sportfive — exercise of his put option by Jean-Claude Darmon (March)			30				—				30
					30				—				30
	Total financial investments				394				(12	)			382
Financial divestments
	Proceeds from sales of consolidated companies, after divested cash
		VUE (May)			(2,926	)			—				(2,926	)
		15% of Veolia Environnement (December)			(1,497	)			—				(1,497	)
		Kencell (May)			(190	)			—				(190	)
		Monaco Telecom (June)			(169	)			(98	)			(267	)
		“Flux-divertissement” business of StudioExpand and Canal+ Benelux (June/August)			(49	)			7				(42	)
		Viva Media (August)			(47	)			—				(47	)
		Cèdre and Egée towers (June)			(84	)			(249	)			(333	)
		Atica & Scipione (February)			(32	)			—				(32	)
		UCI Cinemas (October)			(170	)			—				(170	)
		Other(b)			197				(55	)			142
					(4,967	)			(395	)			(5,362	)
	Sales of investments in equity affiliates
		Sportfive (March)			(274	)			—				(274	)
					(274	)			—				(274	)
	Decrease in financial assets
		Other(b)			(23	)			—				(23	)
					(23	)			—				(23	)
	Total financial divestments				(5,264	)			(395	)			(5,659	)
Investing activities in 2004 excluding capital expenditures and proceeds from sales of property, plant, equipment and intangible assets					(4,870	)			(407	)			(5,277	)

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				Impact on				Impact on				Impact on
				cash and cash				borrowings				Financial
				equivalents				and other (a)				Net Debt
				(In millions of euros)
	Capital expenditures				1,322				—				1,322
		At SFR			870				—				870
		At Maroc Telecom			211				—				211
		Other			241				—				241
					1,322				—				1,322
	Proceeds from sales of property, plant, equipment and intangible assets				(196	)			—				(196	)
Investing activities in 2004					(3,744	)			(407	)			(4,151	)

(a)	“Other” comprises commitments to purchase minority interests, derivative financial instruments and cash deposits backing borrowings.
(b)	Including acquisition and divestiture fees.

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												Impact
												on
				Impact on				Impact on				Financial
				cash and cash				borrowings				Net
				equivalents				and other(a)				Debt
				(In millions of euros)
Transactions on equity
Net proceeds from issuance of common shares				€	(39	)		€	—			€	(39	)
(Sales) purchases of treasury shares					108				—				108
Cash dividends paid by Vivendi S.A.					689				—				689
Cash dividends paid by subsidiaries to their minority shareholders SFR (March, May, September and November)(b)					712				—				712
	Maroc Telecom (June)(c)				196				—				196
	Other subsidiaries				57				—				57
					965				—				965
	Transactions on equity				1,723				—				1,723
Transactions on borrowings and other financial liabilities
Setting up of long-term borrowings and increase in other long-term financial liabilities
	Maroc Telecom — MAD 6 billion borrowings — MAD 4 billion tranche (January)(d)				(350	)			350				—
	Vivendi — €600 million notes (February)(e)				(600	)			600				—
	Vivendi — €630 million notes (April)(f)				(630	)			630				—
	SFR — €600 million notes (July)(g)				(600	)			600				—
	SFR — €1.2 billion revolving credit facility				(200	)			200				—
					(2,380	)			2,380				—
Principal payment on long-term borrowings and decrease in other long-term financial liabilities
	Payments
		Vivendi — High Yield Notes (January)(h)			394				(394	)			—
		Vivendi — Bonds exchangeable into Vinci shares (March)(f)			527				(527	)			—
		Other			155				(155	)			—
					1,076				(1,076	)			—
	Other financing arrangements
		Vivendi — Promissory note to USI (NBC Universal subsidiary) (January)			573				(573	)			—
		Partial redemption of bonds exchangeable into Sogecable shares (November, December)			—				(363	)			(363	)
					573				(936	)			(363	)
					1,649				(2,012	)			(363	)
	Principal payments on short-term borrowings SFR — Securitization program				423				(423	)			—
		Other			540				(540	)			—
					963				(963	)			—

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												Impact
												on
				Impact on				Impact on				Financial
				cash and cash				borrowings				Net
				equivalents				and other(a)				Debt
				(In millions of euros)
	Net increase (decrease) in short-term borrowings and other
		SFR — Treasury bills			(632	)			632				—
		Maroc Telecom — MAD 6 billion borrowings — MAD 2 billion tranche (January)(d)			(177	)			177				—
		Other			(111	)			111				—
					(920	)			920				—
		Other financing activities			—				28				28
	Derivative instruments				—				(205	)			(205	)
		Transactions on borrowings and other financial liabilities			(688	)			148				(540	)
Financing activities in 2005				€	1,035			€	148			€	1,183

(a)	“Other” comprises commitments to purchase minority interests, derivative financial instruments and cash deposits backing borrowings.
(b)	In 2005, SFR paid a dividend of €1,614 million for 2005 fiscal year, including €712 million paid to minority shareholders.
(c)	In 2005, Maroc Telecom paid a dividend of €398 million for 2004 fiscal year, including €196 million paid to minority shareholders.
(d)	To finance the purchase of 16% of Maroc Telecom on January 4, 2005, a MAD 6 billion note (representing €551 million as of December 31, 2005) was issued by Société de Participation dans les Télécommunications (SPT), a Moroccan company wholly-owned by Vivendi, which now directly holds 51% of Maroc Telecom’s shares. The borrowing comprises two tranches, a MAD 2 billion tranche with a 2006 maturity and a MAD 4 billion tranche with a 2011 maturity.
(e)	On February 15, 2005, Vivendi issued notes for €600 million maturing on February 15, 2012 with a 3.9% yield rate. The proceeds of this issue were used to repay, at no penalty, the $780 million note issued to NBC Universal on May 11, 2004, which was due to expire no later than May 2007. This new note issue enabled Vivendi SA to extinguish its remaining secured debt.

(f)	On April 6, 2005, Vivendi issued notes for €630 million with a 3.755% yield rate, maturing in April 2010. These notes enabled Vivendi to extend the average maturity of the Group’s debt and the early redemption of bonds exchangeable into Vinci shares, issued in March 2001, for a total consideration of €527 million and redeemable in March 2006.

(g)	On July 18, 2005, SFR issued notes for €600 million maturing in July 2012 with a 3.4% yield rate which enabled SFR to diversify its financing sources and extend the maturity of its debt.
(h)	On January 21, 2005, the remaining High Yield Notes were redeemed for a principal amount of €394 million (corresponding to $107 million notes issued in dollars and €316 million notes issued in euros), following the sending of a formal Note of Redemption to all bondholders in December 2004. On completion of this transaction, none of the High Yield Notes issued by Vivendi remained outstanding. In addition, Vivendi paid a premium to the bondholders (€41 million) and accrued interest, representing a total cash outflow of €437 million.

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												Impact
				Impact on				Impact on				on
				cash and cash				borrowings				Financial
				equivalents				and other(a)				Net Debt
				(In millions of euros)
Transactions on equity
Net proceeds from issuance of common shares				€	(18	)		€	—			€	(18	)
(Sales) purchases of treasury shares					27				—				27
Cash dividends paid by Vivendi S.A.					—				—				—
Cash dividends paid by subsidiaries to their minority shareholders SFR(b)					1,470				—				1,470
	Maroc Telecom(c)				303				—				303
	Other subsidiaries				59				—				59
					1,832				—				1,832
	Transactions on equity				1,841				—				1,841
Transactions on borrowings and other financial liabilities
Setting up of long-term borrowings and increase in other long-term financial liabilities
	SFR — €1.2 billion revolving credit facility				(350	)			350				—
	Vivendi — €700 million floating notes (July)(d)				(700	)			700				—
	Other				(98	)			98				—
					(1,148	)			1,148				—
Principal payment on long-term borrowings and decrease in other long-term financial liabilities
	Payments
		UMG — Loan contracted by UMO (£136 million) (May)(e)			205				(205	)			—
		Vivendi — €2.5 billion dual currency facility (May)(e)			1,000				(1,000	)			—
		Vivendi — High Yield Notes (June)(f)			2,000				(2,000	)			—
		Other			243				(243	)			—
	Other financing arrangements
		Vivendi — Promissory note to USI (NBC Universal subsidiary) (January)			—				658				658
					3,448				(2,790	)			658
	Principal payments on short-term borrowings
		Vivendi — €3 billion multicurrency revolving credit facility(e)			1,000				(1,000	)			—
		Vivendi — convertible 1.25% (OCEANE) (January)			1,699				(1,699	)			—
		SFR — €600 million bonds (July)			600				(600	)			—
		Other			1,044				(1,044	)			—
	Other financing activities				204				(143	)			61
					4,547				(4,486	)			61
	Net increase (decrease) in short-term borrowings and other
		SFR — securitization program			(422	)			422				—
		SFR — treasury bills			(218	)			218				—
		Vivendi — treasury bills			(274	)			274				—
		Other			(229	)			229				—
					(1,143	)			1,143				—
	Derivative instruments				—				581				581
		Transactions on borrowings and other financial liabilities			5,704				(4,404	)			1,300
Financing activities in 2004				€	7,545			€	(4,404	)		€	3,141

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(a)	“Other” comprises commitments to purchase minority interests, derivative financial instruments and cash deposits backing borrowings.
(b)	In January 2004, SFR paid an exceptional dividend of €899 million, including €398 million paid to minority shareholders. In addition, it paid an aggregate dividend of €1,258 million for fiscal year 2003 (including €556 million to minority shareholders) and a 2004 interim dividend of €1,167 million (including €516 million to minority shareholders).
(c)	In 2004, the total amount of dividends paid by Maroc Telecom was €465 million.
(d)	At the same time of the redemption of the High Yield Notes, Vivendi issued €700 million of floating rate notes to European institutional investors. These notes, issued on July 12, 2004, have a three-year maturity and a yield of three month EURIBOR + 60 basis points.
(e)	At the same time of the NBC-Universal transaction, Vivendi repaid the €1.8 billion drawn portion of the €3 billion multicurrency revolving credit facility, the €1 billion Tranche B of the €2.5 billion dual currency facility (the unused portion of both loans being cancelled) and the £136 million (€205 million) loan contracted by a subsidiary of UMG.

(f)

On May 25, 2004, Vivendi launched a tender offer to purchase €1 billion of High Yield Notes. On June 16, 2004, the size of this offer was increased to €2.4 billion (including premium and interests). As part of this offer, the holders of the notes were also solicited to waive covenants attached to the notes. On June 29, 2004, the offer terminated with a tender rate of 96.4% for the 9.50% and 9.25% High Yield Notes and a tender rate of 72.0% for the 6.25% high yield notes, representing a total amount of approximately €2.0 billion, out of a total amount of €2.4 billion (representing 83% of the total notes tendered). In addition, the covenants attached to the notes were waived. The premium amount paid to bondholders and the accrued interest was €0.3 billion.

New

Rating agency

Rating date

Type of debt

ratings

Outlook

Previous ratings

Standard & Poor’s

July 27, 2005

Long-term corporate Short-term corporate Senior unsecured debt

BBB A-2 BBB

Stable

BBB- A-3 BBB-

(June 1, 2004)

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Moody’s

September 13, 2005

Long-term senior unsecured debt

Baa2

Stable

Baa3

(October 22, 2004)

Fitch Ratings

December 10, 2004

Long-term senior unsecured debt

BBB

Positive (December 19, 2005

)

BBB-

(May 12, 2004)

			December 31, 2005
											Derivatives financial
			Borrowings and other								instruments in
			financial liabilities								assets and cash								Cash				Total
											deposits backing								and Cash				Financial
			Long-term				Short-term				borrowings				Sub total				Equivalents				Net Debt
			(in millions of euros)
Financial Net Debt — IFRS			€	4,545			€	2,215			€	(90	)		€	6,670			€	(2,902	)		€	3,768
Adjustments to conform to US GAAP
	Real estate defeased properties(a)			240				—				—				240				—				240
	Put options granted to various third parties by Canal+ Group(b)			—				(55	)			—				(55	)			—				(55	)
	Other			—				—				6				6				—				6
Financial Net Debt — US GAAP			€	4,785			€	2,160			€	(84	)		€	6,861			€	(2,902	)		€	3,959

			December 31, 2004
											Derivatives financial
			Borrowings and other								instruments in
			financial liabilities								assets and cash								Cash				Total
											deposits backing								and Cash				Financial
			Long-term				Short-term				borrowings				Sub total				Equivalents				Net Debt
			(in millions of euros)
Financial Net Debt — IFRS				€5,357				€2,842				€(316	)			€7,883				€(3,159	)			€4,724
Adjustments to conform to US GAAP
	Real estate defeased properties(a)			240				—				—				240				—				240
	Put options granted to SNCF on 35% of the share capital of Cegetel S.A.S.(b)			(184	)			—				—				(184	)			—				(184	)
	Put options granted to various third parties by Canal+ Group(b)			(47	)			(3	)			—				(50	)			—				(50	)
	Other			—				—				5				5								5
Financial Net Debt — US GAAP				€5,366				€2,839				€(311	)			€7,894				€(3,159	)			€4,735

(a)	An annual rental guarantee of €12 million was granted by Vivendi to the buyer of the Berlin building Quartier 207 in 1996. Under IFRS, Vivendi does not consolidate the building and the debt used for its acquisition to the extent the related annual rental guarantees terminate in December 2006, considering the likely exercise by the buyer of the building of the put option granted by the Dresdner Bank. Under US GAAP, this building and this debt have to be consolidated. Please refer to “Item 18. Financial Statements — Note 34. Summary of significant differences between accounting policies adopted by Vivendi and US GAAP”.
(b)	Under IFRS, commitments granted by Vivendi to shareholders of certain of its fully consolidated subsidiaries to purchase their minority interests are reported, in accordance with IAS 32, as financial liabilities at the present value of the purchase consideration. Under US GAAP SFAS 150, these commitments are recorded as liabilities at their fair value. Except for share purchase agreement in the form of a firm commitment (e.g. forward purchase contract), this fair market value is generally estimated to be nil. However, any potential losses expected to be incurred upon the exercise of put options correspond to the negative fair value of the options, which are recorded through income and classified as financial liabilities in the statement of financial position under US GAAP. Please refer to “Item 18. Financial Statements — Note 34. Supplemental disclosures required under US generally accepted accounting principles (US GAAP) and US securities and exchange commission (SEC)”.

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	•	a ratio of Financial Net Debt to EBITDA not exceeding 3.5; and
	•	a ratio of Earnings from operations to Net Financing Costs (interest) equal to or greater than 3.

	•	a ratio of Proportionate Financial Net Debt to Proportionate EBITDA not exceeding 2.8; and
	•	a ratio of Proportionate EBITDA to Net Financing Costs equal to or greater than 4.5.

(7)	In 2005, defined as our Financial Net Debt less the share of Financial Net Debt attributable to minority shareholders of SFR and Maroc Telecom.

(8)	In 2005, defined as our modified EBITDA (Earnings from Operations before depreciation, amortization, restructuring and other one time items) less modified EBITDA attributable to minority shareholders of SFR and Maroc Telecom plus the dividends received from NBC Universal and Veolia Environnement.

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			Note to our								Payments due in
			Consolidated				Total as of
			Financial				December 31,																								After
			Statements				2005				2006				2007				2008				2009				2010				2010
			(In millions of euros)
Long-term borrowings and other financial liabilities				23			€	4,545			€	—			€	799			€	393			€	308			€	1,209			€	1,836
	including finance leases			12				362				—				40				30				15				16				261
Short-term borrowings and other financial liabilities				24				2,215				2,215				—				—				—				—				—
Contractual contents commitments				10.3				704				550				33				26				65				3				27
Subtotal — recorded in our Consolidated Statement of Financial Position							€	7,464			€	2,765			€	832			€	419			€	373			€	1,212			€	1,863
Operating leases				29.2			€	1,506			€	251			€	227			€	214			€	195			€	155			€	464
Contractual contents commitments				10.3				4,627				1,522				1,274				735				222				190				684
Other purchase obligations				29.3				1,111				318				144				140				139				86				284
Subtotal — not recorded in our Consolidated Statement of Financial Position							€	7,244			€	2,091			€	1,645			€	1,089			€	556			€	431			€	1432
Total contractual obligations							€	14,708			€	4,856			€	2,477			€	1,508			€	929			€	1,643			€	3,295

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	(A) Contractual content commitments

						Payments due in
		Total as of
		December 31,																								After
		2005				2006				2007				2008				2009				2010				2010
		(In millions of euros)
Film and television broadcasting rights(a)		€	135			€	135			€	—			€	—			€	—			€	—			€	—
Sports rights(b)			373				358				5				10				—				—				—
Creative talent and employment agreements(c)			196				57				28				16				65				3				27
Subtotal — recorded in our Consolidated Statement of Financial Position		€	704			€	550			€	33			€	26			€	65			€	3			€	27
Film and television broadcasting rights(a)		€	2,320			€	795			€	337			€	237			€	156			€	138			€	657
Sports rights			1,377	(b)			309				690				362				13				2				1
Creative talent and employment agreements(c)			930				418				247				136				53				50				26
Subtotal — not recorded in our Consolidated Statement of Financial Position		€	4,627			€	1,522			€	1,274			€	735			€	222			€	190			€	684
Total contractual content obligations		€	5,331			€	2,072			€	1,307			€	761			€	287			€	193			€	711

(a)	Includes primarily contracts valid over several years relating to the broadcast of future film and TV productions (mainly exclusivity contracts with major US studios and pre-purchases in the French movie industry), StudioCanal film coproduction commitments (given and received) and broadcasting rights of CanalSat and Cyfra+ multichannel digital TV packages. They are recorded as content assets when the broadcast is available for initial release.
(b)	Includes €1,200 million in respect of residual rights to broadcast the French Professional Soccer League won by the Canal+ Group in December 2004 for the seasons 2006 — 2008. These rights are recognized in the statement of financial position on the opening of the related sport season or at first payment.
(c)	UMG routinely commits to artists and other parties to pay agreed amounts upon delivery of content or other product (“Creative talent and employment agreements”). Until the artist or other party has not delivered his or her content, UMG’s obligation is not recorded in the statement of financial position.

	(B) Other purchase obligations

						Payments due in
		Future minimum																								After
		payments				2006				2007				2008				2009				2010				2010
		(In millions of euros)
Satellite transponders		€	883			€	123			€	130			€	130			€	130			€	86			€	284
Capital expenditures(a)			183				179				4				—				—				—				—
Other			45				16				10				10				9				—				—
Total		€	1,111			€	318			€	144			€	140			€	139			€	86			€	284

(a)	Mainly related to SFR and Maroc Telecom.

	(A) Other commitments relating to operations

(1) SFR holds an UMTS license for its networks and for the supply of its telecommunications services in France for a period of 20 years (August 2001-August 2021). On the acquisition of this license, the fixed amount paid, i.e. €619 million, was recorded as an intangible asset (please refer to “Item 18. Financial Statements — Note 11. Other intangible assets as of December 31, 2005 and December 31,

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	2004”). Since the variable part of the fee (equal to 1% of GSM revenues) cannot reliably be determined, it is not recorded as a liability in the statement of financial position. It is recorded as an expense when incurred.
	(2) SFR holds a GSM license for its networks and for the supply of its telecommunications services in France for a period of 15 years (March 1991-March 2006). In March 2006, the French Government authorized SFR to keep on using its GSM license during the next 15 years (between April 1, 2006 and March 31st, 2021), against a yearly payment divided in a fixed part of €25 million (capitalized over the period for its present value of €278 million as of March 31, 2006) and a variable part equal to 1% of the yearly revenues generated by the 2G technology. This variable part cannot be calculated with enough precision to be capitalized and is therefore not recorded as a liability in the statement of financial position.

	(B) Share purchase and sale commitments

	(1) As part of the divestiture of NC Numéricâble in March 2005, the Canal+ Group granted two call options to Cinven and Altice, at a pre-defined price, on its stake in Ypso Holding (holding company of the new group). The first option concerns half of the Canal+ Group’s stake while the second option concerns the Canal+ Group’s remaining stake. These options can be exercised during one year starting on March 31, 2008 and March 31, 2010 respectively. Please refer to “Item 18. Financial Statements — Note 32.3. Divestiture of the residual 20% stake in Ypso — January 31, 2006”.
	(2) As part of the NBC-Universal transaction which occurred in May 2004, Vivendi received certain liquidity commitments and guarantees from General Electric (GE). As part of the agreements with GE, Vivendi is entitled to sell its stake in NBCU under mechanisms providing for exit conditions at fair market value. In connection with the unwinding of IACI’s interest in VUE on June 7, 2005, the dates initially set for Vivendi’s liquidity rights in the original NBCU agreement were deferred by one year, including the date GE may exercise its call right on Vivendi’s equity interest. As a result, Vivendi will be able to monetize its equity interest in NBCU beginning in 2007, for an amount up to $3 billion in 2007 and $4 billion in 2008 and each year thereafter. GE will have the right to pre-empt any Vivendi sale to the market.
	Under certain circumstances, if Vivendi does exercise its right to monetize its equity interest in NBCU and if GE does not exercise its preemptive right, Vivendi will be able to exercise a put option to GE. Lastly, for a 12-month period commencing on May 11, 2010 (sixth anniversary of completion of the NBC-Universal transaction), GE will have the right to call either (i) all of Vivendi’s NBCU shares, or (ii) $4 billion of Vivendi’s NBCU shares, in each case at the greater of their market value at the time the call is exercised or their value as determined at the time of the NBC-Universal transaction (i.e. $8.3 billion). If GE calls $4 billion, but not all, of Vivendi’s NBCU shares, GE must call the remaining NBCU shares held by Vivendi by the end of 12-month period commencing on May 11, 2011 (seventh anniversary of completion of the NBC-Universal transaction).

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	The Management Board

	Mission

	Composition

Name		Age				Positions and Responsibilities
Jean-Bernard Lévy			51			Chairman of the management board and Chief Executive Officer of Vivendi
Abdeslam Ahizoune			51			Chairman of the management board and Chief Executive Officer of Maroc Telecom
Jacques Espinasse			63			Chief Financial Officer of Vivendi
Frank Esser			47			Chairman and Chief Executive Officer of SFR
Bertrand Meheut			54			Chairman of the executive board and Chief Executive Officer of the Canal+ Group. Chairman and Chief Executive Officer of Canal+ SA
Doug Morris			67			Chairman and Chief Executive Officer of Universal Music Group
René Pénisson			64			Chairman of Vivendi Games. Senior Executive Vice-President, Human Resources of Vivendi

	Biographies of Our Management Board

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	The Supervisory Board

	Mission

	Composition

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										Expiration of
Name		Age				Position				term(1)
Jean-René Fourtou(2)(3)			67				Chairman of the supervisory board				2008
Henri Lachmann(3)			67			Vice-Chairman and Member of the supervisory board					2008
Claude Bébéar(2)(3)			70				Member of the supervisory board				2008
Gérard Brémond(3)			68				Member of the supervisory board				2008
Fernando Falcó y Fernández de Córdova(3)(5)			67				Member of the supervisory board				2009
Sarah Frank			59				Member of the supervisory board				2009
Paul Fribourg(3)(4)			52				Member of the supervisory board				2006
Gabriel Hawawini(3)(5)			58				Member of the supervisory board				2009
Patrick Kron			52				Member of the supervisory board				2009
Andrzej Olechowski			58				Member of the supervisory board				2009
Pierre Rodocanachi(3)			67				Member of the supervisory board				2008
Karel Van Miert(3)			64				Member of the supervisory board				2008

(1)	Term expires at the annual shareholders’ meeting approving the financial statements for the year set forth in this column.
(2)	According to the criteria of the AFEP/Medef report, this member of the supervisory board is not considered independent.
(3)	This member was a director prior to the change of our corporate form and was appointed as member of the supervisory board for the remainder of his term as director.
(4)	On June 7, 2006, Mr. Fribourg resigned from his position at his own request.
(5)	Term of office renewed at the shareholders’ meeting held on April 20, 2006.

	Biographies of Our Supervisory Board

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Name		Age				Positions and Responsibilities
Jean-Bernard Lévy			51			Chairman of the management board and Chief Executive Officer of Vivendi
Jacques Espinasse			63			Member of the management board and Chief Financial Officer of Vivendi
Robert de Metz			54			Senior Executive Vice-President, Strategy and Development
René Pénisson			64			Chairman of Vivendi Games, Member of the management board and Senior Executive Vice-President, Human Resources of Vivendi.
Jean-François Dubos			60			Executive Vice-President and General Counsel, Secretary of the management and supervisory boards
Michel Bourgeois			56			Executive Vice-President, Communications and Public Affairs
Régis Turrini			47			Executive Vice-President, Mergers and Acquisitions

	Biographies of our Senior Executives

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	The Board of Directors

				Year of
				appointment
Name		Position		as Director
Jean-René Fourtou(1)(2)		Chairman and Chief Executive Officer			2002
Claude Bébéar(1)(2)		Director			2002
Gérard Brémond(2)		Director			2003
Bertrand Collomb		Director			2003
Fernando Falcó y Fernández de Córdova(2)		Director			2002
Paul Fribourg(2)		Director			2003
Gabriel Hawawini(2)		Director			2003
Gerard Kleisterlee		Director			2002
Marie-Josée Kravis		Director			2001
Henri Lachmann(2)		Director			2000
Pierre Rodocanachi(2)		Director			2004
Karel Van Miert(2)		Director			2004

(1)	According to the criteria of the AFEP/Medef report, this director was not considered independent.
(2)	Appointed as member of the supervisory board at the Annual Meeting held on April 28, 2005.

	Compensation of Members of our supervisory board

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Members of the supervisory board		2005 Directors’ fees
		(in euro)
Jean-René Fourtou			0
Henri Lachmann			107,500
Claude Bébéar			102,416
Gérard Brémond			76,791
Fernando Falcó y Fernández de Córdova			75,500
Sarah Frank			43,500
Paul Fribourg			77,875
Gabriel Hawawini			79,000
Patrick Kron			43,500
Andrzej Olechowski			43,500
Pierre Rodocanachi			92,500
Karel Van Miert			76,916

Directors up to April 28, 2005
Bertrand Collomb			54,083
Marie-Josée Kravis			61,333
Gerard Kleisterlee			26,375

	Compensation of Members of our management board

		Compensation and Other Benefits in 2005 (in euro)
		Fixed				2005 bonus				Benefits
Members of the Management Board		compensation				(paid in 2006)				in kind(*)				Total
Jean-Bernard Lévy			800,000				1,472,000				195,047	(**)			2,467,047
Abdeslam Ahizoune			512,757				346,958				—				859,715
Jacques Espinasse			460,000				846,400				10,164				1,316,564
Frank Esser			650,000				1,150,500				13,727				1,814,227
Bertrand Meheut			650,000				1,189,500				28,014	(a)			1,867,514
Doug Morris			4,453,144				9,881,733	(b)			127,525	(c)			14,462,402
René Pénisson			460,000				846,400				22,000	(a)			1,328,400

(*)	Includes employer’s pension contributions in excess of the legal tax-deductible threshold and the benefit of a company car.
(**)	Includes €181,595 of holiday premium pay for previous salaried position.
(a)	Includes valuation of days of holiday transferred from the time saving account (compte épargne temps) to the pension savings plan.
(b)	Includes the 2006 payment of the 2005 portion amount of a deferred long-term bonus under the Universal Music Group contract, in the amount of €3,977,800.
(c)	Includes air travels and the benefit of a company car.

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	Executive Compensation

	Creation and Functioning of Committees — Common Attributes

98

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	Audit Committee

99

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	•	the financial statements and the consolidated financial statements for the financial year 2004 and their reconciliation to US GAAP, the 2005 half-year and quarterly accounts and the reports of the Company’s statutory auditors;
	•	the impact on the Group of the application of the international accounting standards (IFRS);
	•	the results of internal audit plans;
	•	internal control procedures and their implementation within the Group;
	•	the renewal of the mandate of the Company’s statutory auditors; and
	•	the compliance procedures put into place within each business unit of the Group.

	Strategy Committee

	•	the Group’s priorities and strategic challenges;
	•	potential developments in telecommunications, games and the Internet;
	•	challenges of digital terrestrial television and developments in the pay-TV sector in France;
	•	the impact of changing the Company’s corporate name; and
	•	the situation in telephony in Poland.

	Human Resources Committee

	•	the compensation (including bonus compensation), representation and travel expenses of directors (mandataires sociaux) and stock option plans for 2005;

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	•	an additional defined pension plan for senior managers; and
	•	the succession plans for executive officers at the Company’s headquarters and at the business unit level.

	Corporate Governance Committee

	•	the proposed amendments to the Company’s by-laws and the internal regulations of the supervisory board and the management board;
	•	the candidates for membership of the supervisory board, the appointment of the chairman and vice-chairman of the supervisory board and the composition of the committees of the supervisory board; and
	•	the allocation of directors’ fees to members of the supervisory board.

	Employees by business segments

		Number of
		Employees
		in 2005				in 2004
Canal+ Group			3,880				4,275
UMG			7,915				9,661
Vivendi Games			2,657				1,654
SFR(a)			8,033				9,781
Maroc Telecom			11,251				12,204	(b)
Other(c)			295				331
Total			34,031				37,906

(a)	Excludes fixed-line operations as of December 31, 2005.
(b)	Excludes Mauritel.
(c)	Includes VU Net, VTI, and Corporate for 2004 and including Corporate for 2005.

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	Employees by geographic location

		Number of
		Employees
		in 2005				in 2004
North America			4,416				4,713
Europe (excl. France)			3,210				4,667
France			13,142				14,529
Africa-Middle East			11,418				12,252
Asia Pacific			1,500				1,409
South America			345				336
Total			34,031				37,906

	Share Ownership

	Members of our supervisory board

Name		Number of shares held
Jean-René Fourtou			500,000	(1)
Henri Lachmann			4,000
Claude Bébéar			2,000
Gérard Brémond			1,000
Fernando Falcó y Fernández de Córdova			1,500
Sarah Frank			1,000
Paul Fribourg			1,000
Gabriel Hawawini			1,390
Patrick Kron			1,000
Andrzej Olechowski			1,000
Pierre Rodocanachi			1,800
Karel Van Miert			1,000
Total			516,690	(2)

(1)	Includes 128,622 as usufructuary.
(2)	Representing approximately 0.04% of our share capital.

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	Members of our management board

Name		Number of shares held(1)
Jean-Bernard Lévy			57,615
Abdeslam Ahizoune			10,000
Jacques Espinasse			77,475
Frank Esser			16,095
Bertrand Meheut			19,801
Doug Morris			10,000
René Pénisson			36,783
Total			227,769(2)

(1)	Includes shares held in the Group Saving’s Plan (PEG), valued on the basis of €26.46 corresponding to the share price of Vivendi at close of business on December 30, 2005.
(2)	Representing approximately 0.02% of our share capital.

	Stock Option Plans

	SO I, SO 10 and SO 100 Plans (traditional options)

	SO III Plan (performance options)

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	SO IV Plan (performance options)

	•	if, after a three-year period, the performance of Vivendi’s stock price exceeds the index performance by 9% or more;
	•	if, after a four-year period, the performance of Vivendi’s stock price exceeds the index performance by 12% or more; or
	•	if, after a five-year period, the performance of Vivendi’s stock price exceeds the index performance by 15% or more.

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																		Number of
														Number of				Members of								Exercise								Number of
														Options				Governing								Price of				Number of				Ordinary
										Number				Granted to				Bodies who								Options				Options				Shares				Balance of
Date of the						Number of				of				Members of				can exercise								per				cancelled at				purchased by				Ordinary
Shareholders’				Meetings of the Board of		Options				Benefi-				Governing				their				Expiration				Ordinary				December 31,				December 31,				Shares to be
Meeting				Directors and Grant Dates		Granted				ciaries				Bodies				Options				Date				Share				2005				2005				purchased
	SO I
	05/15/1998			07/03/1998			2,192,760				648				598,857				13				07/03/2006				€49.13				21,946				—				2,158,111
				01/22/1999			42,672				13				—				—				01/22/2007				€59.64				—				—				43,887
				04/08/1999			3,302,569				818				1,068,015				11				04/08/2007				€63.21				17,877				—				3,296,676
				09/10/1999			15,000				2				—				—				09/10/2007				€60.10				—				—				15,425
				11/25/1999			9,000				3				—				—				11/25/2007				€60.88				—								9,256
				03/10/2000			5,000				2				—				—				03/10/2008				€103.42				—				—				5,142
				05/23/2000			2,783,560				1,047				914,000				12				05/23/2008				€108.37				3,431								2,624,142
	09/21/2000			11/23/2000			20,000				1				—				—				11/23/2008				€81.43				—				—				20,568
				11/23/2000			3,114,000				511				—				—				11/23/2008				€81.43				14,399								2,726,474
				12/11/2000			5,508,201				1,988				1,489,771				12				12/11/2008				€76.47				30,875				—				4,456,547
				12/11/2000			5,378,697				1,693				1,605,400				2				12/11/2008				$65.74				10,399								4,584,544
				03/09/2001			2,000				1				—				—				03/09/2009				€67.83				—				—				1,368
				03/09/2001			127,500				2				—				—				03/09/2009				$63.75				—				—				7,740
				04/24/2001			11,000				2				—				—				04/24/2009				€73.42				—				—				11,312
				09/25/2001(a)			6,999,322				1,545				1,553,157				14				10/10/2009				€46.87				65,479				—				6,020,617
				09/25/2001(a)			6,334,305				1,271				1,653,265				6				10/10/2009				$42.88				14,811				—				4,601,552
	11/13/2000			09/25/2001(a)			304,959				41				62,254				3				10/10/2009				€46.87				—				—				295,061
	04/17/2000			09/25/2001(a)			917,995				361				32,080				2				10/10/2009				€46.87				37,417				—				694,605
				09/25/2001(a)			75,712				15				—				—				10/10/2009				$42.88				—				—				58,576
				09/25/2001(a)			586,950				33				54,180				2				10/10/2009				€57.18				—				—				485,947
				09/25/2001(a)			78,260				4				—				—				10/10/2009				$52.31				—				—				59,029
	09/21/2000			01/24/2002			56,392				46				—				—				01/24/2010				€53.38				—				—				36,424
				01/24/2002			200,000				1				—				—				01/24/2010				€53.38				—				—				205,668
				01/24/2002			1,200,000				4				150,000				1				01/24/2010				$45.64				—				—				1,186,789
				03/05/2002(b)			200,000				1				—				—				03/20/2010				$37.98				—				—				206,424
				04/24/2002			404,000				2				—				—				04/24/2010				€37.83				—				—				4,114
				04/24/2002			200,000				2				—				—				04/24/2010				$33.26				—				—				206,435
				05/29/2002			75,000				1				—				—				05/29/2010				€33.75				—				—				75,000
				05/29/2002			20,000				1				—				—				05/29/2010				$31.62				—				—				20,000
							40,164,854								9,180,979																216,634				—				34,117,433
	SO III
	05/15/1998			05/11/1999			5,729,237				53				2,392,259				10				05/11/2007				€71.00				62,676				—				5,734,782
							5,729,237								2,392,259																62,676				—				5,734,782
	SO 10/SO 100
	05/15/1998			11/25/1999			1,919,520				189,207				1,100				10				11/25/2007				€60.88				—				—				2,108,963
				11/25/1999			283,620				28,362				—				—				11/25/2007				$61.83				—				—				311,982
							2,203,140								1,100																—				—				2,420,945
	SO IV
	09/21/2000			12/11/2000			3,700,000				65				1,925,000				12				12/11/2008				€76.47				25,710				—				2,416,713
				12/11/2000			1,500,000				26				700,000				3				12/11/2008				$65.74				—				—				1,264,329
							5,200,000								2,625,000																25,710				—				3,681,042

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														Number of				Number of								Exercise								Number of
														Options				Members of								Price of				Number of				Ordinary				Balance of
										Number				Granted to				Governing								Options				Options				Shares				Ordinary
Date of the				Meetings of the Board of		Number of				of				Members of				Bodies who								per				cancelled at				purchased by				Shares
Shareholders’				Directors or of the Management		Options				Benefi-				Governing				can exercise				Expiration				Ordinary				December 31,				December 31,				to be
Meeting				Board and Grant dates		Granted				ciaries				Bodies				the Options				Date				Share				2005				2005				purchased
	04/28/1998			12/10/1998			285,840				45				—				—				12/10/2006				€36.37				—				—				289,610
							285,840								—				—												—				—				289,610
	09/21/2000			09/25/2002(a)			2,451,000				13				1,800,000				6				10/10/2010				€12.10				—				149,000				2,302,000
				09/25/2002(a)			1,168,300				38				100,000				1				10/10/2010				$11.79				—				176,667				675,201
				01/29/2003			1,610,000				34				1,175,000				8				01/29/2011				€15.90				—				10,000				1,583,333
				01/29/2003			50,000				1				50,000				1				01/29/2011				$16.85				—				—				50,000
							5,279,300								3,125,000																—				335,667				4,610,534
	04/29/2003			05/28/2003			10,547,000				414				3,000,000				9				05/28/2013				€14.40				295,516				306,656				9,800,325
				05/28/2003			752,000				75				180,000				1				05/28/2013				$16.44				10,168				53,832				662,000
				12/09/2003			310,000				29				0				0				12/09/2013				€19.07				53,334				—				256,666
				12/09/2003			705,000				51				0				0				12/09/2013				$22.59				133,336				13,531				443,133
				05/06/2004(b)			8,267,200				425				2,320,000				8				05/21/2014				€20.67				330,841				—				7,851,159
				05/06/2004(b)			1,012,400				138				0				0				05/21/2014				$24.61				109,469				—				835,431
				03/09/2005(c)			7,284,600				472				2,595,000				11				04/26/2015				€23.64				116,500				—				7,168,100
				03/09/2005(c)			1,786,400				184				125,000				1				04/26/2015				$30.63				58,000				—				1,728,400
							30,664,600								8,220,000																1,107,164				374,019				28,745,214
	04/28/2005			06/28/2005			39,000				4				—				0				06/28/2015				$30.63				—				—				39,000
							39,000								—																—				—				39,000

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	Group Savings Plan

	COB/ AMF Procedure

107

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	AMF Investigation into Vivendi’s Purchase of Its Own Shares

	AMF Investigation in Connection with the Issuance of Notes Mandatorily Redeemable for New Shares of Vivendi

	Investigation by the Financial Department of the Parquet de Paris

	Securities Class Action Litigation

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	Arbitral Award Rendered in Vienna on 26 November 2004 (the “Vienna Award”)

	—	the Telco transfer is ineffective and the PTC shares which were the subject of this transfer remained Elektrim’s property at all material times;
	—	the transfer of the PTC shares to Telco by Elektrim does not as such qualify as a Material Breach under Article 16.1 of the Shareholders Agreement but it would do so in case Elektrim would not recover the shares from Telco within two months at the latest from the notification of the award;
	—	DT’s Economic Impairment Claim is dismissed; and
	—	this arbitral tribunal has no jurisdiction over Telco and DT’s claims against Telco cannot be entertained in this Arbitration.

	Exequatur Proceedings of the Vienna Award before Polish Courts

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	Declaratory Proceedings before the Polish Courts

	Proceedings before the Registry Court (District Court) of Warsaw

	Proceedings concerning the “Mega” Operation before Polish Courts

	Proceedings for the Annulment of the Vienna Award before the Austrian Courts

	Vivendi Case against the Polish State

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	Arbitration Proceedings before the London Court of International Arbitration (LCIA)

	Proceedings before the Polish Competition and Consumer Protection Office

	Proceedings against DT before the Paris Commercial Court

	Arbitral Proceedings under the Aegis of the International Chamber of Commerce of Geneva (Switzerland)

	DT’s Call Option

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	Settlement of Tax Dispute over DuPont Shares

	SFR

	Universal Music Group

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	Last Six Months

		Eurolist
		(Ordinary								NYSE
		Shares)								(ADSs)
		High				Low				High				Low
May, 2006		€	29.60			€	26.95			$	36.89			$	34.65
April, 2006			29.13				27.36				36.53				33.68
March, 2006			29.35				25.00				35.11				30.75
February, 2006			26.61				24.74				31.93				29.83
January, 2006			26.88				25.00				32.34				30.48
December, 2005			26.90				24.71				31.85				29.38

	Last Two Years by Quarter

		Eurolist
		(Ordinary								NYSE
		Shares)								(ADSs)
		High				Low				High				Low
2006
Second Quarter (through June 27, 2006)		€	29.60			€	26.08			$	37.00			$	33.42
First Quarter			29.35				24.74				35.11				29.83
2005
Fourth Quarter			27.50				24.39				32.54				28.95
Third Quarter			27.56				24.66				33.01				30.96
Second Quarter			26.48				22.50				31.54				29.65
First Quarter			25.21				22.78				32.73				30.38

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		Eurolist
		(Ordinary								NYSE
		Shares)								(ADSs)
		High				Low				High				Low
2004
Fourth Quarter			24.00				20.31				32.28				25.94
Third Quarter			23.29				19.06				28.27				23.57
Second Quarter			23.37				19.00				28.10				23.08
First Quarter			23.85				19.30				29.32				24.45

	Last Five Years

		Eurolist
		(Ordinary								NYSE
		Shares)								(ADSs)
		High				Low				High				Low
2006 (through June 27, 2006)		€	29.60			€	24.74			$	37.00			$	29.83
2005			27.56				22.50				31.54				28.95
2004			24.00				19.00				32.28				23.08
2003			19.71				11.03				24.28				12.30
2002			64.40				8.62				57.90				8.90
2001			82.00				40.22				76.00				37.30

	Register Information

	Purpose

	Members of the Management and Supervisory Boards

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	General

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	Notice

	Attendance and Voting

	Proxies and Votes by Mail

	Quorum and Majority

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	Limitations on Right to Own Securities

117

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	Change in Control

	Requirements for Holdings Exceeding Certain Percentages

118

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	Dividends

	Voting Rights

	Liquidation Rights

	Future Capital Calls

	Changes in Share Capital

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	Amendments to Rights of Holders

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	•	dealers or traders in securities or foreign currency, including traders in securities that use a mark-to-market method of accounting for their holdings;
	•	tax-exempt organizations or retirement plans, except to a limited extent under “French Taxation of US Holders of Our Ordinary Shares or ADSs — Taxation of Dividends”;
	•	banks, thrifts, insurance companies, regulated investment companies, or other financial institutions or “financial services entities”;
	•	real estate investment trusts;
	•	persons that acquire our ordinary shares or ADSs as compensation;
	•	persons that hold our ordinary shares or ADSs together with other investments as part of a “straddle”, “hedge”, “conversion transaction”, “constructive sale”, or other integrated transaction;
	•	US persons that have a functional currency other than the US dollar;
	•	certain expatriates and former long-term residents of the United States;
	•	certain foreign corporations treated as domestic corporations pursuant to section 269B or section 7874 of the Code;
	•	partnerships and other pass-through entities, or investors that hold our ordinary shares or ADSs through partnerships or other pass-through entities;
	•	persons that own, whether directly, indirectly, or through attribution, at least 10% of the value or voting power of our shares;

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	•	persons that are not entitled to the benefits of the Convention between the US and France for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital, entered into on August 31, 1994 (the Treaty); and
	•	persons whose ownership of our ordinary shares or ADSs is connected with the conduct of business through a permanent establishment or fixed base in France.

	•	a citizen or resident of the US;
	•	a corporation created or organized in the US or under the laws of the US or any state thereof or the District of Columbia;
	•	an estate the income of which is includible in gross income for US federal income tax purposes regardless of its source; or
	•	a trust, if (i) a court within the US is able to exercise primary supervision of the administration of the trust and one or more US persons have the authority to control all substantial decisions of the trust or (ii) the trust has a valid election in effect under applicable US Treasury regulations to be treated as a US person.

	Taxation of Dividends

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	•	Name and address of the US financial institution managing the securities account of the US Holder;
	•	Name and address of the US Holder;
	•	French tax identification number of the US Holder, if necessary;
	•	Nature of the rights held;
	•	Dividend payment date;
	•	Par value of the stock in respect of which dividends were paid; and
	•	Total amount distributed to the US Holder.

	Taxation of Capital Gains

	Wealth Tax

	Taxation of Dividends

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	Taxation of Capital Gains

	Tax Consequences if We Are a Passive Foreign Investment Company

125

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	Overview

126

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	Composition of Board of Directors; Independence

	Board Committees

127

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	Audit Committee

	Corporate Governance Guidelines

	Other Differences

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	•	Vivendi is the sole counterparty for foreign currency transactions for the Group, subject to regulatory and operational restrictions;
	•	all foreign currency hedging transactions relate, in amount and by maturity, to an identified underlying economic item; and
	•	all identified exposures are hedged at a minimum level of 80% for forecasted transaction exposures and 100% for firm commitments.

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		USD																MAD
Average exchange rate used over the year 2005		1.2570																11.05
Change assumptions			+5%				-5%				+10%				-10%				+5%				-5%				+10%				-10%
Revenues			-0.6%				0.6%				-1.3%				1.3%				-0.4%				0.5%				-0.8%				1.0%
Earnings from operations			-0.1%				0.1%				-0.1%				0.1%				-0.9%				1.0%				-1.8%				2.2%
Net cash provided by operating activities			-1.4%				1.4%				-2.7%				2.9%				-1.0%				1.1%				-1.9%				2.3%

		USD																MAD
Exchange rate used as of December 31, 2005		1.1849																10.89
Change assumptions			+5%				-5%				+10%				-10%				+5%				-5%				+10%				-10%
Redemption value of borrowings			-0.1%				0.1%				-0.1%				0.2%				-0.4%				0.5%				-0.8%				1.0%
Cash and cash equivalents			-0.1%				0.1%				-0.2%				0.2%				-1.1%				1.2%				-2.1%				2.6%

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			SR								Barbier
			Amount								Amount
			2005				2004				2005				2004
			(In millions of euros)
Audit fees				6.4				5.7				8.6				10.9
Audit-related fees				1.3				2.0				0.7				2.6
Tax fees				—				—				—				—
All Other fees				—				—				0.05				—
	Total			7.7				7.7				9.35				13.5

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										Total Number of				Maximum Number
										Shares Purchased as				of Shares that May
										Part of Publicly				Yet Be Purchased
		Total Number of				Average Price Paid				Announced Plans or				Under the Plans or
Period		Shares Purchased				per Share (€)				Programs				Programs
January 2005			—				—				—				6,350,000
February 2005			715,000	(1)			24.68				715,000	(1)			5,635,000
March 2005			910,020	(1)			23.48				910,000	(1)			4,724,980
April 2005			520,000	(1)			23.78				520,000	(1)			4,204,980
May 2005			—				—				—				4,204,980
June 2005			—				—				—				4,204,980
July 2005			—				—				—				4,204,980
August 2005			—				—				—				4,204,980
September 2005			—				—				—				4,204,980
October 2005			—				—				—				4,204,980
November 2005			—				—				—				4,204,980
December 2005			1,200,000	(2)			26.38				1,200,000	(2)			400,000
January 2006			—				—				—				400,000
February 2006			—				—				—				400,000
March 2006			—				—				—				400,000
April 2006			—				—				—				400,000
May 2006			—				—				—				400,000

(1)	The general shareholders’ meeting of May 6, 2004 authorized the board of directors for a period of 18 months to repurchase and dispose of up to 5% of the Company’s shares at a maximum purchase price per share of €30 and a minimum sale price per share of €20. This authorization was implemented on January 24, 2005 pursuant to delegations of the board of directors dated June 29th and December 7, 2004. The maximum number of shares that could be purchased by virtue of this authorization and the maximum purchase price per share were reduced to 0.60% of the Company’s shares and €30, respectively. This share repurchase program is described in the share repurchase program prospectus (note d’information) which received approval or visa no. 05-032 of the AMF on January 21, 2005. Under this authorization, 2,145,020 shares have been repurchased from January 2005 until December 2005, other than in connection with the liquidity agreement.
(2)	The general shareholders’ meeting of April 28, 2005 authorized the management board for a period of 18 months to repurchase and dispose of up to 10% of the Company’s shares at a maximum purchase price per share of €40. This authorization was implemented on December 20, 2005 pursuant to a delegation of the management board dated October 5, 2005. The maximum number of shares that could be purchased by virtue of this authorization and the maximum purchase price per share were reduced to 0.14% of the Company’s shares and €32, respectively. A summary of this share repurchase program is available at our website http://www.vivendi.com and at the AMF website http://amf-france.org. Under this authorization, 1,200,000 shares have been repurchased from December 21, 2005 to May 31, 2006, other than in connection with the liquidity agreement.

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Exhibit
Number				Description
	1	.1		Amended and Restated By-Laws and Articles of Association (statuts) of Vivendi as amended on April 20, 2006 (English translation).
	2	.1*		Deposit Agreement, dated as of April 19, 1995, as amended and restated as of September 11, 2000, and as further amended and restated as of December 8, 2000, by and among Vivendi SA, The Bank of New York, as Depositary, and all the Owners and Beneficial Owners from time to time of American Depositary Shares issued thereunder (incorporated by reference to Vivendi’s Registration Statement on Form 8-A, filed on December 29, 2000, File No. 001-16301).
	2	.1.1		Amendment to the Deposit Agreement, dated as of May 22, 2006.
	4	.1*		Merger Agreement, dated as of June 19, 2000, by and among Vivendi SA, Canal Plus SA, Sofiée S.A., 3744531 Canada Inc. and The Seagram Company Ltd. (incorporated by reference to Vivendi’s Registration Statement on Form F-4, filed on October 30, 2000, File No. 333-48966).
	4	.2*		Shareholder Governance Agreement, dated as of June 19, 2000, by and among Vivendi SA, Sofiée SA and certain shareholders of the Seagram Company Ltd. (incorporated by reference to Vivendi’s Registration Statement on Form F-4, filed on October 30, 2000, File No. 333-48966).
	4	.3*		Business Combination Agreement, dated as of October 8, 2003, by and among General Electric Company, National Broadcasting Company Holding, Inc., National Broadcasting Company, Inc., Universal Studios Holding III Corp. and Vivendi SA (incorporated by reference to Vivendi’s Report of Foreign Private Issuer on Form 6-K, filed on November 4, 2003, File No. 001-16301).
	4	.4*		IACI Matters Agreement, dated as of October 8, 2003, by and among General Electric Company, National Broadcasting Company Holding, Inc., National Broadcasting Company, Inc., Universal Studios Holding III Corp. and Vivendi, S.A. (incorporated by reference to Vivendi’s Report of Foreign Private Issuer on Form 6-K, filed on November 4, 2003, File No. 001-16301).
	8	.1		List of subsidiaries of Vivendi SA.
	12	.1		Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities and Exchange Act of 1934.
	12	.2		Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities and Exchange Act of 1934.
	13	.1		Certification of the Chief Executive Officer Pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code.
	13	.2		Certification of the Chief Financial Officer Pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code.
	14	.1		Consent of Salustro Reydel and Barbier Frinault & Autres.
	15	.1*		IFRS 2004 Transition (incorporated by reference to Vivendi’s filed annual report on Form 20-F for the year ended December 31, 2004, on June 29, 2005, File No. 001-16301).

*	Incorporated herein by reference as indicated.

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			Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS				F-6
CONSOLIDATED STATEMENT OF EARNINGS FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004				F-7
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF DECEMBER 31, 2005 AND DECEMBER 31, 2004				F-8
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004				F-9
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004				F-10
NOTE 1. ACCOUNTING POLICIES AND VALUATION METHODS				F-12
	1.1. Basis of preparation of the 2005 Consolidated Financial Statements and the 2004 comparative financial statements			F-12
	1.2. Compliance with accounting standards			F-13
	1.3. Principles governing the preparation of the Consolidated Financial Statements			F-14
	1.4. Presentation principles used for financial statements			F-25
	1.5. Contractual obligations and contingent assets and liabilities			F-26
	1.6. New IFRS applicable as of January 1, 2006			F-26
NOTE 2. CHANGES IN THE SCOPE OF CONSOLIDATION FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004				F-27
	2.1. Acquisition of an additional 16% stake in Maroc Telecom on January 4, 2005			F-27
	2.2. Combination of Cegetel SAS with Neuf Telecom on August 22, 2005			F-27
	2.3. Acquisition of an additional 2% stake in Elektrim Telekomunikacja on December 12, 2005			F-28
	2.4. Divestiture of 80% of Vivendi Universal Entertainment (VUE) on May 11, 2004			F-30
	2.5. Other changes in the scope of consolidation in 2005 and 2004			F-31
NOTE 3. SEGMENT DATA IN 2005 AND 2004				F-31
	3.1. Business segment data			F-31
	3.2. Geographic data			F-34
NOTE 4. EARNINGS BEFORE INTEREST AND OTHER FINANCIAL CHARGES AND INCOME AND PROVISION FOR INCOME TAXES FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004				F-35
	4.1. Breakdown of revenues and cost of revenues for the years ended December 31, 2005 and 2004			F-35
	4.2. Personnel costs and average employee numbers for the years ended December 31, 2005 and 2004			F-36
	4.3. Additional information on operating expenses for the years ended December 31, 2005 and 2004			F-36
	4.4. Other income from ordinary activities for the years ended December 31, 2005 and 2004			F-36
	4.5. Other charges from ordinary activities for the years ended December 31, 2005 and 2004			F-36
NOTE 5. INTEREST AND OTHER FINANCIAL CHARGES AND INCOME FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004				F-37

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			Page
NOTE 6. INCOME TAXES FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004				F-38
	6.1. Components of the provision for income taxes			F-38
	6.2. Effective tax rate			F-41
	6.3. Changes in current and deferred tax assets and liabilities			F-42
	6.4. Tax audits			F-43
NOTE 7. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE IN 2005 AND 2004				F-43
	7.1. Combination of Cegetel SAS with Neuf Telecom			F-44
	7.2. Divestiture of 80% of Vivendi Universal Entertainment (VUE)			F-44
NOTE 8. EARNINGS PER SHARE FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004				F-46
NOTE 9. GOODWILL AS OF DECEMBER 31, 2005 AND DECEMBER 31, 2004				F-46
	9.1. Goodwill as of December 31, 2005 and December 31, 2004			F-46
	9.2. Changes in goodwill in 2005 and 2004			F-47
	9.3. Impairment of goodwill test			F-47
NOTE 10. CONTENT ASSETS, LIABILITIES AND CONTRACTUAL COMMITMENTS AS OF DECEMBER 31, 2005 AND DECEMBER 31, 2004				F-48
	10.1. Content assets as of December 31, 2005 and December 31, 2004			F-48
	10.2. Content liabilities as of December 31, 2005 and December 31, 2004			F-51
	10.3. Contractual content commitments as of December 31, 2005			F-51
NOTE 11. OTHER INTANGIBLE ASSETS AS OF DECEMBER 31, 2005 AND DECEMBER 31, 2004				F-53
	11.1. Other intangible assets as of December 31, 2005 and December 31, 2004			F-53
	11.2. Changes in other intangible assets for the years ended December 31, 2005 and 2004			F-53
NOTE 12. PROPERTY, PLANT AND EQUIPMENT AS OF DECEMBER 31, 2005 AND DECEMBER 31, 2004				F-54
	12.1. Property, plant and equipment as of December 31, 2005 and December 31, 2004			F-54
	12.2. Changes in property, plant and equipment for the years ended December 31, 2005 and 2004			F-54
	12.3. Property, plant and equipment financed by finance lease contracts			F-55
NOTE 13. PROPERTY, PLANT, EQUIPMENT AND INTANGIBLE ASSETS OF TELECOM OPERATIONS				F-55
NOTE 14. INVESTMENTS IN EQUITY AFFILIATES AS OF DECEMBER 31, 2005 AND DECEMBER 31, 2004				F-56
	14.1. Equity affiliates as of December 31, 2005 and December 31, 2004			F-56
	14.2. Changes in value of equity affiliates during the years ended December 31, 2005 and 2004			F-56
	14.3. Financial information relating to equity affiliates as of December 31, 2005 and December 31, 2004			F-57
NOTE 15. FINANCIAL ASSETS AS OF DECEMBER 31, 2005 AND DECEMBER 31, 2004				F-58
	15.1. Changes in available-for-sale securities during the years ended December 31, 2005 and 2004			F-58
	15.2. Changes in derivative financial instruments during the years ended December 31, 2005 and 2004			F-59

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			Page
	15.3. Cash deposits backing borrowings as of December 31, 2005 and December 31, 2004			F-60
	15.4. Other financial assets at cost or at amortized cost as of December 31, 2005 and December 31, 2004			F-60
NOTE 16. OTHER CHANGES IN NET WORKING CAPITAL AS OF DECEMBER 31, 2005 AND DECEMBER 31, 2004				F-60
	16.1. Changes in net working capital during the years ended December 31, 2005 and 2004			F-60
	16.2. Trade accounts receivable and other as of December 31, 2005 and December 31, 2004			F-61
	16.3. Trade accounts payable and other as of December 31, 2005 and December 31, 2004			F-61
	16.4. Other non-current liabilities as of December 31, 2005 and December 31, 2004			F-62
NOTE 17. CASH AND CASH EQUIVALENTS AS OF DECEMBER 31, 2005 AND DECEMBER 31, 2004				F-62
NOTE 18. INFORMATION ON THE SHARE CAPITAL AS OF DECEMBER 31, 2005 AND DECEMBER 31, 2004				F-62
	18.1. Number of common shares and voting rights outstanding as of December 31, 2005 and December 31, 2004			F-62
	18.2. Compound financial instruments as of December 31, 2005 and December 31, 2004			F-63
	18.3. 2005 Dividends			F-63
NOTE 19. SHARE-BASED COMPENSATION FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004				F-63
	19.1. Impact on earnings before minority interests of share-based compensation for the years ended December 31, 2005 and 2004			F-63
	19.2. Employee stock option plans			F-64
	19.3. Employee stock purchase plans			F-66
NOTE 20. PROVISIONS AS OF DECEMBER 31, 2005 AND DECEMBER 31, 2004				F-67
NOTE 21. EMPLOYEE BENEFITS AS OF DECEMBER 31, 2005 AND DECEMBER 31, 2004				F-67
	21.1. Analysis of the expense related to employee benefit plans for the years ended December 31, 2005 and 2004			F-67
	21.2. Retirement pensions through defined benefit plans			F-68
NOTE 22. RESTRUCTURING PROVISIONS AS OF DECEMBER 31, 2005, DECEMBER 31, 2004 AND JANUARY 1, 2004				F-73
NOTE 23. LONG-TERM BORROWINGS AND OTHER FINANCIAL LIABILITIES AS OF DECEMBER 31, 2005 AND DECEMBER 31, 2004				F-76
	23.1. Analysis of long-term borrowings and other financial liabilities as of December 31, 2005 and December 31, 2004			F-76
	23.2. Currency, maturity and nature of interest rate of the nominal value of borrowings as of December 31, 2005 and December 31, 2004			F-78
NOTE 24. SHORT-TERM BORROWINGS AND OTHER FINANCIAL LIABILITIES AS OF DECEMBER 31, 2005 AND DECEMBER 31, 2004				F-79
	24.1. Analysis of short-term borrowings and other financial liabilities as of December 31, 2005 and December 31, 2004			F-79
	24.2. Currency of the nominal value of borrowings as of December 31, 2005 and December 31, 2004			F-80

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			Page
NOTE 25. FAIR VALUE OF FINANCIAL INSTRUMENTS AS OF DECEMBER 31, 2005 AND DECEMBER 31, 2004				F-80
NOTE 26. RISK MANAGEMENT AND FINANCIAL DERIVATIVE INSTRUMENTS AS OF DECEMBER 31, 2005 AND DECEMBER 31, 2004				F-81
	26.1. Interest rate risk management			F-82
	26.2. Foreign currency risk management			F-85
	26.3. Equity market risk management			F-87
	26.4. Credit and investment concentration risk and counterparty risk			F-89
	26.5. Liquidity risk			F-89
NOTE 27. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004				F-90
	27.1. Adjustments			F-90
	27.2. Cash dividends			F-91
	27.3. Investing and financing activities with no impact on Vivendi’s cash position			F-91
NOTE 28. TRANSACTIONS WITH RELATED PARTIES				F-91
	28.2. Other related parties			F-97
NOTE 29. CONTRACTUAL OBLIGATIONS AND CONTINGENT ASSETS AND LIABILITIES				F-99
	29.1. Contractual obligations and commercial commitments recorded in the statement of financial position			F-100
	29.2. Off-balance sheet operating leases and subleases as of December 31, 2005			F-100
	29.3. Off-balance sheet commercial commitments as of December 31, 2005			F-101
	29.4. Other given and received commitments relating to operations			F-101
	29.5. Share purchase and sale commitments			F-102
	29.6. Contingent assets and liabilities subsequent to given or received commitments related to the divestiture or acquisition of shares			F-103
	29.7. Shareholder agreements			F-108
	29.8. Collaterals and pledges as of December 31, 2005 and December 31, 2004			F-108
NOTE 30. LITIGATIONS				F-108
NOTE 31. MAJOR CONSOLIDATED ENTITIES AS OF DECEMBER 31, 2005 AND 2004				F-113
NOTE 32. SUBSEQUENT EVENTS				F-114
	32.1. Canal+ and TPS combination agreement — January 6, 2006 and Lagardère agreement — announced on February 17, 2006			F-114
	32.2. Vivendi announces its intention to terminate its American Depositary Receipts (ADR) program — January 17, 2006			F-116
	32.3. Divestiture of the residual 20% stake in Ypso — January 31, 2006			F-116
	32.4. Purchase of the 7.7% stake held by Matsushita Electric Industrial Co, Ltd (MEI) in Universal Studios Holding — February 7, 2006			F-117
	32.5. Investment in 19.9% of the voting capital of Amp’d — February 7, 2006			F-117
NOTE 33. RECONCILIATION OF THE FINANCIAL STATEMENTS PREPARED UNDER FRENCH GAAP AND IFRS FINANCIAL INFORMATION				F-117
	33.1. Summary of adjustments to 2004 equity and earnings			F-118
	33.2. Reconciliation of equity as of January 1, 2004			F-120
	33.3. Reconciliation of 2004 earnings			F-122
	33.4. Reconciliation of equity as of December 31, 2004			F-123

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			Page
	33.5. Consolidated statement of cash flows			F-125
	33.6. NBC-Universal transaction under IFRS			F-125
	33.7. Principal adjustments			F-125
	33.8. Principal reclassifications			F-133
NOTE 34. SUPPLEMENTAL DISCLOSURES REQUIRED UNDER US GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (US GAAP) AND US SECURITIES AND EXCHANGE COMMISSION (SEC)				F-134
	34.1.  Condensed US GAAP Consolidated Financial Statements			F-135
	34.2.  Reconciliation of earnings and equity to US GAAP			F-138
	34.3.  First time adoption of International Financial Reporting Standards (IFRS)			F-139
	34.4.  Accounting treatment of the divestiture of VUE and Cegetel			F-140
	34.5.  Business combinations, goodwill and impairment			F-145
	34.6.  Intangible assets			F-151
	34.7.  Financial Instruments			F-154
	34.8.  Employee benefit plans			F-157
	34.9.  Share-based compensation			F-159
	34.10. Deferred taxes			F-160
	34.11. Other			F-161
	34.12. Other disclosure required under US GAAP and SEC regulations			F-162
	34.13. New accounting standards to be applied by the Company from January 1, 2006			F-164
	34.14. Subsequent events			F-165

F-5

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Salustro Reydel		Barbier Frinault & Autres
Member of KPMG International		Ernst & Young
Benoit Lebrun		Dominique Thouvenin

F-6

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						Year Ended
						December 31,
		Note				2005				2004
						(In millions of
						euros, except per
						share amounts)
Revenues			4			€	19,484			€	17,883
Cost of revenues			4				(9,898	)			(9,100	)
Margin from operations							9,586				8,783
Selling, general and administrative expenses							(5,807	)			(5,464	)
Other operating expenses							(33	)			(86	)
Earnings from operations							3,746				3,233
Other income from ordinary activities			4				75				89
Other charges from ordinary activities			4				(170	)			(25	)
Income from equity affiliates			14				326				221
Earnings before interest and other financial charges and income and provision for income taxes							3,977				3,518
Interest			5				(218	)			(406	)
Other financial charges and income			5				619				1,226
Interest and other financial charges and income			5				401				820
Earnings from continuing operations before provision for income taxes							4,378				4,338
Provision for income taxes			6				(204	)			(292	)
Earnings from continuing operations							4,174				4,046
Earnings from discontinued operations			7				92				777
Earnings						€	4,266			€	4,823
Attributable to:
Equity holders of the parent						€	3,154			€	3,767
Minority interests							1,112				1,056
Earnings from continuing operations, attributable to the equity holders of the parent per share — basic (in euros)			8			€	2.70			€	2.61
Earnings from continuing operations, attributable to the equity holders of the parent per share — diluted (in euros)			8			€	2.68			€	2.59
Earnings from discontinued operations per share — basic (in euros)			8			€	0.08			€	0.68
Earnings from discontinued operations per share — diluted (in euros)			8			€	0.08			€	0.68
Earnings, attributable to the equity holders of the parent per share — basic (in euros)			8			€	2.74			€	3.29
Earnings, attributable to the equity holders of the parent per share — diluted (in euros)			8			€	2.72			€	3.27

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						December 31,
		Note				2005				2004
						(In millions of euros)
ASSETS
Goodwill			9			€	13,796			€	13,154
Non current content assets			10				2,462				2,431
Other intangible assets			11				1,937				2,177
Property, plant and equipment			12				4,331				4,740
Investments in equity affiliates			14				6,856				5,773
Non current financial assets			15				3,783				3,787
Deferred tax assets			6				1,784				1,282
Non current assets							34,949				33,344
Inventories			16				375				315
Current tax receivables			6				822				772
Current content assets			10				790				579
Trade accounts receivable and other			16				4,531				4,528
Short-term financial assets			15				114				162
Cash and cash equivalents			17				2,902				3,159
							9,534				9,515
Assets held for sale			7				—				180
Current assets							9,534				9,695
TOTAL ASSETS						€	44,483			€	43,039
EQUITY AND LIABILITIES
Share capital			18			€	6,344			€	5,899
Additional paid-in capital			18				6,939				7,313
Retained earnings and other							5,486				2,237
Equity associated with assets held for sale			7				—				—
Equity, attributable to equity holders of the parent							18,769				15,449
Minority interests							2,839				2,643
Total equity							21,608				18,092
Non current provisions			20				1,220				1,561
Long-term borrowings and other financial liabilities			23				4,545				5,357
Deferred tax liabilities			6				3,476				3,282
Other non current liabilities			16				1,342				1,955
Non current liabilities							10,583				12,155
Trade accounts payable and other			16				8,737				8,187
Current tax payables			6				762				1,298
Current provisions			20				578				357
Short-term borrowings and other financial liabilities			24				2,215				2,842
							12,292				12,684
Liabilities associated with assets held for sale			7				—				108
Current liabilities							12,292				12,792
Total liabilities							22,875				24,947
Contractual obligations and contingent assets and liabilities			29				—				—
TOTAL EQUITY AND LIABILITIES						€	44,483			€	43,039

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							Year Ended
							December 31,
			Note				2005				2004
							(In millions of
							euros)
Operating activities:
	Earnings, attributable to equity holders of the parent						€	3,154			€	3,767
	Minority interests							1,112				1,056
	Adjustments			27				876				(80	)
	Dividends received from equity affiliates			27				355				404
	Content investments, net			10				(15	)			219
	Other changes in net working capital			16				166				114
	Interest paid			5				(218	)			(406	)
	Other financial items (excluding sales of financial assets)							(486	)			(214	)
	Income tax paid			6				(1,386	)			(622	)
	Net cash provided by operating activities						€	3,558			€	4,238
Investing activities:
	Capital expenditures							(1,580	)			(1,322	)
	Purchases of consolidated companies, after acquired cash							(1,406	)			(364	)
	Purchases of investments in equity affiliates							—				(30	)
	Increase in financial assets							—				—
	Investments						€	(2,986	)		€	(1,716	)
	Proceeds from sales of property, plant, equipment and intangible assets							89				196
	Proceeds from sales of consolidated companies, after divested cash							(200	)			4,967
	Sales of investments in equity affiliates							54				274
	Decrease in financial assets							226				23
	Divestments						€	169			€	5,460
	Net cash provided by (used for) investing activities						€	(2,817	)		€	3,744
Financing activities:
	Net proceeds from issuance of common shares							39				18
	Sales (purchases) of treasury shares							(108	)			(27	)
	Dividends paid by Vivendi S.A.							(689	)			—
	Dividends paid by consolidated companies to their minority shareholders			27				(965	)			(1,832	)
	Transactions on equity						€	(1,723	)		€	(1,841	)
	Setting up of long-term borrowings and increase in other long-term financial liabilities							2,380				1,148
	Principal payment on long-term borrowings and decrease in other long-term financial liabilities							(1,649	)			(3,448	)
	Principal payment on short-term borrowings							(963	)			(4,547	)
	Other changes in short-term borrowings and other short-term financial liabilities							920				1,143
	Transactions on borrowings and other financial liabilities						€	688			€	(5,704	)
	Net cash provided by (used for) financing activities							(1,035	)			(7,545	)
	Foreign currency translation adjustments							37				(15	)
	Net cash related to discontinued operations			7				—				11
	Change in cash and cash equivalents						€	(257	)		€	433
Cash and cash equivalents:
	At beginning of the year						€	3,159			€	2,726
	At end of the year						€	2,902			€	3,159

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								Attributable to Vivendi SA shareholders
																				Retained Earnings and Other
																																												Equity
								Common shares																Net				Foreign								Equity								attributable
																Additional								unrealized				currency								associated								to equity
								Number of								Paid-in				Retained				gains				translation				Treasury				with assets								holders of				Minority				Total
				Note				shares				Amount				Capital				Earnings				(losses)				adjustments				shares				held for sale				Total				the parent				interests				equity
								(In thousands)
																(In millions of euros, except number of shares)
BALANCE AS OF DECEMBER 31, 2004									1,072,624				5,899			€	7,313			€	2,929			€	910			€	(1,593	)		€	(9	)		€	—			€	2,237			€	15,449			€	2,643			€	18,092
		Redemption of ORA (November 2005)			18.2				78,672				433				(433	)			—				—				—				—				—				—				—				—				—
		Dividends paid by Vivendi S.A. (€0.6 per share)							—				—				—				(689	)			—				—				—				—				(689	)			(689	)			—				(689	)
		Other transactions with shareholders							2,181				12				59				(43	)			—				—				(44	)			—				(87	)			(16	)			—				(16	)
	Dividends and other transactions with shareholders								80,853				445				(374	)			(732	)			—				—				(44	)			—				(776	)			(705	)			—				(705	)
		Available-for- sale securities, net of €55 million of tax			15.1				—				—				—				—				(11	)			—				—				—				(11	)			(11	)			(1	)			(12	)
		Other charges and income directly recorded in equity							—				—				—				1				(10	)			891	(a)			—				—				882				882				(1	)			881
	Total charges and income directly recorded in equity								—				—				—				1				(21	)			891				—				—				871				871				(2	)			869
	Earnings								—				—				—				3,154				—				—				—				—				3,154				3,154				1,112				4,266
	Total charges and income recorded over the year								—				—				—				3,155				(21	)			891				—				—				4,025				4,025				1,110				5,135
		Acquisition of an additional 16% stake in Maroc Telecom			2.1				—				—				—				—				—				—				—				—				—				—				(38	)			(38	)
		Dividends paid by subsidiaries to minority interests			27.2				—				—				—				—				—				—				—				—				—				—				(965	)			(965	)
		Other transactions with minority interests							—				—				—				—				—				—				—				—				—				—				89				89
	Transactions with minority interests								—				—				—				—				—				—				—				—				—				—				(914	)			(914	)
Total changes over the year									80,853				445				(374	)			2,423				(21	)			891				(44	)			—				3,249				3,320				196				3,516
BALANCE AS OF DECEMBER 31, 2005									1,153,477				6,344			€	6,939			€	5,352			€	889			€	(702	)		€	(53	)		€	—			€	5,486			€	18,769			€	2,839	(b)		€	21,608
Percentage change over the year									+7.5%																																				+21.5%				+7.4%

(a)	Includes changes in foreign currency translation adjustments relating to the investment in NBC Universal in the amount of €761 million.
(b)	Includes €120 million in cumulative foreign currency translation adjustments.

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								Attributable to Vivendi SA shareholders
																				Retained Earnings and Other
																																												Equity
								Common shares																Net				Foreign								Equity								attributable
																Additional								unrealized				currency								associated								to equity
								Number of								Paid-in				Retained				gains				translation				Treasury				with assets								holders of				Minority				Total
				Note				shares				Amount				Capital				Earnings				(losses)				adjustments				shares				held for sale				Total				the parent				interests				equity
								(In thousands)
																(In millions of euros, except number of shares)
BALANCE AS OF JANUARY 1, 2004									1,071,519				5,893			€	7,234			€	(883	)		€	257			€	—			€	(1	)		€	231			€	(396	)		€	12,731			€	3,961			€	16,692
	Dividends and other transactions with shareholders								1,105				6				79				(67	)			—				—				(8	)			—				(75	)			10				—				10
		Available-for- sale securities, net of - €39 million of tax			15.1				—				—				—				—				653				—				—				—				653				653				—				653
		Other charges and income directly recorded in equity							—				—				—				112				—				(1,593	)(a)			—				(231	)			(1,712	)			(1,712	)			—				(1,712	)
	Total charges and income directly recorded in equity								—				—				—				112				653				(1,593	)			—				(231	)			(1,059	)			(1,059	)			—				(1,059	)
	Earnings								—				—				—				3,767				—				—				—				—				3,767				3,767				1,056				4,823
	Total charges and income recorded over the year								—				—				—				3,879				653				(1,593	)			—				(231	)			2,708				2,708				1,056				3,764
		NBC-Universal transaction: divestiture of 80% of VUE			2.4				—				—				—				—				—				—				—				—				—				—				(563	)			(563	)
		Change in value of commitments to purchase minority interests							—				—				—				—				—				—				—				—				—				—				55				55
		Dividends paid by subsidiaries to minority interests			27.2				—				—				—				—				—				—				—				—				—				—				(1,849	)			(1,849	)
		Other transactions with minority interests							—				—				—				—				—				—				—				—				—				—				(17	)			(17	)
	Transactions with minority interests								—				—				—				—				—				—				—				—				—				—				(2,374	)			(2,374	)
Total changes over the year									1,105				6				79				3,812				653				(1,593	)			(8	)			(231	)			2,633				2,718				(1,318	)			1,400
BALANCE AS OF DECEMBER 31, 2004									1,072,624				5,899			€	7,313			€	2,929			€	910			€	(1,593	)		€	(9	)		€	—			€	2,237			€	15,449			€	2,643	(b)		€	18,092

(a)	Includes changes in foreign currency translation adjustments relating to the investment in NBC Universal in the amount of -€764 million.
(b)	Includes €9 million in cumulative foreign currency translation adjustments.

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Note 1.	Accounting policies and valuation methods

1.1.	Basis of preparation of the 2005 Consolidated Financial Statements and the 2004 comparative financial statements

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1.2.	Compliance with accounting standards

	1. All mandatory IFRS/IFRIC (International Financial Reporting Interpretations Committee) standards and interpretations as of December 31, 2005. All of these standards and interpretations, as applied by Vivendi, have been adopted by the EU.
	2. As of January 1, 2004:

	•	IAS 32 and 39 on financial instruments. Vivendi is not impacted by any of the sections of IAS 39 that were not adopted by the EU. Consequently, Vivendi has applied IAS 39 in full in its 2004 comparative financial statements and its 2005 Consolidated Financial Statements;
	•	IFRS 5, which requires the reclassification of activities whose disposal has been decided as assets held for sale or discontinued operations; and
	•	Revised IAS 19, which notably requires additional information on employee benefit plans.

	3. IFRIC Draft Interpretation D17, IFRS 2 — Group and Treasury Share Transactions

	4. The following options, pending a decision of the IASB or IFRIC on the matter:

	•	In the absence of guidance provided by the IFRS, in the event of the acquisition of an additional interest in a subsidiary, Vivendi recognizes the excess of the acquisition cost over the carrying amount of minority interests acquired as goodwill.
	•	In accordance with IAS 32, put options granted by Vivendi to holders of minority interests in its subsidiaries are reported as financial liabilities at the present value of the cost of acquisition. In the absence of guidance provided by IFRS 3 on business combinations and pending publication of an IASB/IFRIC interpretation, Vivendi accounts for as goodwill, the difference arising on initial recognition of these options, between the carrying amount of the minority interests and the present value of the cost of acquisition, and the subsequent change in this present value (with the exception of the undiscounting effect or expected losses).
	•	Pending an IFRIC interpretation, Vivendi does not accrue loyalty coupons granted to the customers of SFR and Maroc Telecom for the replacement of their mobile phone, which do not result in an additional cost. In effect, these bonuses do not represent a benefit greater than that granted to new customers at the inception date of a contract. Loyalty coupons convertible into free services are accrued.

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1.3.	Principles governing the preparation of the Consolidated Financial Statements

1.3.1	Use of estimates

1.3.2	Principles of consolidation

	Full consolidation

	Proportionate consolidation

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	Equity method

1.3.3	Foreign currency translation

1.3.4	Revenues from operations and associated costs

1.3.4.1	Universal Music Group (UMG)

1.3.4.2	Vivendi Games

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1.3.4.3	The Canal+ Group

	Pay television

	Theatrical film and television programming distribution

1.3.4.4	SFR and Maroc Telecom

1.3.4.5	Other

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1.3.5	Assets

1.3.5.1	Goodwill and business combinations

	•	On the acquisition date, goodwill is allocated to each cash-generating unit likely to benefit from the business combination.
	•	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.
	•	Goodwill is no longer amortized.

1.3.5.2	Content assets

	UMG

	Vivendi Games

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	The Canal+ Group

	Film, television or sport broadcasting rights

	—	Film and television broadcasting rights are recognized at their acquisition cost, when the screening certificate has been obtained and the programming is available for exhibition. They are expensed over their broadcasting period.
	—	Sport broadcasting rights are recognized at their acquisition cost, on the opening of the broadcasting period of the related sport season or upon the first payment and are expensed as they are broadcast.
	—	Expensing of film, television or sport broadcasting rights is included in cost of revenues.

	Theatrical film and television rights produced or acquired to be sold

	Film and television rights catalogs

1.3.5.3	Research and development costs

	Cost of software for rental, sale or commercialization

	Cost of internal use software

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1.3.5.4	Other intangible assets

	SFR and Maroc Telecom

1.3.5.5	Property, plant and equipment

1.3.5.6	Asset impairment

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	•	Irrespective of whether there is any indication of impairment, goodwill and other indefinite life intangible assets are subject to an annual impairment test. This test is performed during the fourth quarter of each year. The recoverable value of each of the Group’s operating units is compared to the carrying amount of the corresponding assets (including goodwill).
	•	Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. If this is the case, recoverable amount is determined for the group of assets.
	•	Value in use is determined based on cash flow projections consistent with the most recent budget and business plan approved by executive management and presented to the management board. The discount rate applied reflects current assessments by the market of the time value of money and the risks specific to the asset or group of assets.
	•	Fair value (less costs to sell) is the amount obtainable from the sale of the asset or group of assets in an arm’s length transaction between knowledgeable and willing parties, less costs to sell. These values are determined based on market data (comparison with similar listed companies, value attributed in recent transactions and stock market prices) or, in the absence of reliable data, based on discounted future cash flows.
	•	If the recoverable amount is less than the carrying amount of an asset or group of assets, an impairment loss is recognized for the difference. In the case of a group of assets, this impairment loss is recorded first against goodwill.
	•	Impairment losses recognized in respect of property, plant and equipment and intangible assets (other than goodwill) may be reversed in a later period if the recoverable amount becomes greater than the carrying amount, within the limit of impairment losses previously recognized. Impairment losses recognized in respect of goodwill cannot be reversed.

1.3.5.7	Financial assets

1.3.5.8	Inventories

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1.3.5.9	Cash and cash equivalents

1.3.6	Assets held for sale and discontinued operations

1.3.7	Financial liabilities

	—	Notes and facilities, as well as miscellaneous other borrowings (including treasury bills and debt related to finance leases) and related accrued interest;
	—	Obligations arising in respect of commitments to purchase minority interests; and
	—	The negative value of other derivative financial instruments. Derivatives with positive fair values are recorded as financial assets in the statement of financial position.

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	—	on initial recognition, the commitment to purchase minority interests is recognized as a financial liability for the present value of the purchase consideration under the put option or forward purchase contract, mainly offset through minority interests and the balance through goodwill;
	—	subsequent changes in the value of the commitment are recognized as a financial liability by an adjustment to goodwill, with the exception of the undiscounting effect recognized in other financial charges and income;
	—	where applicable, at the time of initial recognition or the recognition of subsequent changes, any expected loss on purchase is recognized in other financial charges and income; and
	—	on maturity of the commitment, if the minority interests are not purchased, the entries previously recognized are reversed; if the minority interests are purchased, the amount recognized in financial liabilities is reversed, offset by the cash outflow relating to the purchase of the minority interests.

1.3.8	Compound financial instruments

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1.3.9	Other liabilities

	•	The fair value of plan assets is deducted from accrued liabilities; and
	•	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.

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1.3.10	Deferred taxes

	•	deferred tax assets, when the tax base value is greater than the carrying amount (expected future tax saving); and
	•	deferred tax liabilities, when the tax base value is lower than the carrying amount (expected future tax expense)

1.3.11	Share-based compensation

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	—	for the group savings plan: immediately, on subscription; and
	—	for stock option plans: over a 3 year-period, by tranches of one third, in application of the rules of the Vivendi plans.

1.4.	Presentation principles used for financial statements

1.4.1	Statement of earnings

1.4.1.1	Earnings from operations and Earnings before interest and other financial charges and income and provision for income taxes

1.4.1.2	Interest and other financial charges and income

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1.4.2	Statement of financial position

1.4.3	Consolidated statement of cash flows

1.5.	Contractual obligations and contingent assets and liabilities

	—	review of minutes of shareholders’ meetings, meetings of the management board and of the supervisory board and meetings of the supervisory board committees, for matters such as contracts, litigation, and authorization of asset acquisitions or divestitures;
	—	review with banks and financial institutions of items such as pledges or guarantees;
	—	review with internal and/or external legal counsel of pending litigation, claims (in dispute) and environmental matters as well as related assessments for unrecorded contingencies;
	—	review of tax examiner’s reports, notices of assessments and tax expense analyses for additional prior year amounts;
	—	review with risk management, insurance agents and brokers of coverage for unrecorded contingencies;
	—	review of related party transactions for guarantees and other given or received commitments; and
	—	review of any contract and agreement that is generally relevant.

1.6.	New IFRS applicable as of January 1, 2006

1.6.1	IFRS 7 — Financial instruments: disclosures and Amendment to IAS 1 — Presentation of financial statements: capital disclosures

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1.6.2	IFRIC Interpretation 6 — Liabilities arising from Participating in a Specific Market — Waste Electrical and Electronic Equipment

Note 2.	Changes in the scope of consolidation for the years ended December 31, 2005 and 2004

2.1.	Acquisition of an additional 16% stake in Maroc Telecom on January 4, 2005

2.2.	Combination of Cegetel SAS with Neuf Telecom on August 22, 2005

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	•	From an accounting standpoint, this combination is accounted for as the divestiture of 71.8% of SFR’s interest in Cegetel for €617 million (corresponding to the value of Neuf Telecom shares received, i.e., €237 million together with the value of the bonds issued by Neuf Telecom), and as the concurrent acquisition of a 28.2% interest in Neuf Telecom.
	•	As a result, earnings and expenses of Cegetel from January 1, 2004 to August 22, 2005 were deconsolidated and presented netted, in the amount of 71.8% in earnings from discontinued operations and in the amount of 28.2% in income from equity affiliates.
	•	As of December 31, 2005, this transaction resulted in a capital gain of €121 million, before SFR’s minority interests, i.e., €58 million for Vivendi, after minority interests, recorded in earnings from discontinued operations.

2.3.	Acquisition of an additional 2% stake in Elektrim Telekomunikacja on December 12, 2005

2.3.1	Telco / PTC

2.3.2	Acquisition of an additional interest in December 2005

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2.3.3	Accounting for Ymer

2.3.4	Accounting for Telco / PTC(1)

(1)	Following the investigation opened by the Commission des Opérations de Bourse(COB) on September 12, 2003, the consolidation using the equity method of Telco was challenged by a decision of the Autorité des Marchés Financiers (AMF) Sanctions Commission. The AMF Sanctions Commission upheld the criticism challenging the recording of Telco using the equity method rather than proportionate consolidation. On February 4, 2005, Vivendi appealed this decision before the Paris Court of Appeal, because Vivendi considers, in agreement with its auditors, that the method adopted to account for this company during the period reviewed by the COB was in compliance with applicable accounting regulations. On June 28, 2005, the Paris Court of Appeal partially overturned the decision of the AMF Sanctions Commission validating Vivendi accounting treatment. On August 25, 2005, the AMF appealed against this decision before the French Supreme Court (Cour de Cassation). On February 3, 2006, Vivendi submitted its briefs in response. Please refer to Note 30 “Litigations”. In the “Unaudited Supplemental Financial Data” section of the Form 20-F filed with the SEC on June 29, 2005, as requested by the AMF and for information purposes only, Vivendi provided unaudited supplemental financial data to enable shareholders to assess the impact of the accounting method adopted. These supplemental unaudited data present:               — the unaudited financial statements of Telco in condensed format; and               — the estimated impact of the proportionate consolidation of Telco.
	In this respect, the AMF, Vivendi and its auditors exchanged confirmation letters before the filing of the 2004 Document de référence, which were read during the shareholders’ meeting held on April 28, 2005.

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2.4.	Divestiture of 80% of Vivendi Universal Entertainment (VUE) on May 11, 2004

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2.5.	Other changes in the scope of consolidation in 2005 and 2004

2.5.1	Other main changes in scope in 2005 (acquisition, divestiture, dilution or merger) were as follows:

	—	Full consolidation of minority stakes in distribution subsidiaries at SFR (January / April).
	—	Acquisition of additional stake in MultiThématiques (now wholly-owned by the Canal+ Group) and divestiture of Lagardère Thématiques (February — consideration: €20 million).
	—	Divestiture of NC Numéricâble (March — consideration: €96 million): from an accounting standpoint, this transaction led to the divestiture of 80% of the Canal+ Group’s stake in NC Numéricâble and to the concurrent acquisition of 20% of Ypso Holding. As of December 31, 2004, NC Numéricâble’s stake was recorded as an asset held for sale (please refer to Note 7 “Discontinued operations and assets held for sale in 2005 and 2004”).
	—	Divestiture of a 37.8% ownership interest, representing a 40% voting interest, held in UGC (December — consideration: €89 million) (please refer to Note 14.2 “Changes in the value of equity affiliates in 2005 and 2004”).

2.5.2	Other main changes in scope in 2004 (acquisition, divestiture, dilution or merger) were as follows:

	—	discontinuation of Internet operations (January);
	—	equity accounting of Mauritel (January) before full consolidation (July);
	—	divestiture of Atica & Scipione (February) for a consideration of €32 million;
	—	divestiture of Sportfive (March) for a consideration of €274 million;
	—	divestiture of Kencell (May) for a consideration of €190 million;
	—	divestiture of Monaco Telecom (June) for a consideration of €267 million;
	—	divestiture of “Flux-divertissement” Business of StudioExpand and Canal+ Benelux (June/August) for a consideration of €42 million;
	—	divestiture of UCI Cinemas (October) for a consideration of €170 million; and
	—	divestiture of 15% of Veolia Environnement, part of Vivendi’s 20.3% stake (December) for a consideration of €1,497 million.

Note 3.	Segment data in 2005 and 2004

3.1.	Business segment data

	•	Universal Music Group, publishing and distribution of music content (original creation or catalogs);
	•	Vivendi Games, publishing and distribution of video games, online or on other media (such as console, PC, mobile phones);
	•	The Canal+ Group, production and distribution of pay-TV in France, analog or digital (terrestrially, via satellite or ADSL);

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	•	SFR, mobile phone services in France; and
	•	Maroc Telecom, telecommunications operator (mobile, fixed and Internet) in Morocco.

	•	The segment “Holding & Corporate” includes the cost of Vivendi SA’s headquarter in Paris and of its New York office, after the allocation of a portion of these costs to each of the businesses;
	•	Vivendi Universal Entertainment (divested on May 11, 2004) and Cegetel SAS (divested on August 22, 2005) qualified as discontinued operations for the years presented (2005 and 2004), pursuant to IFRS 5, paragraph 34;
	•	The segment “Non core operations” includes miscellaneous businesses outside Vivendi’s core businesses (mainly Vivendi Telecom International, Vivendi Valorisation), whose assets are being divested or liquidated and which are not sufficiently material to be disclosed as discontinued operations as required by IFRS 5;
	•	Inter-segment commercial relations are conducted on an arm’s length basis on terms and conditions close to those which would be proposed by third parties; and
	•	The business segments presented below are identical to those appearing in the information given to Vivendi’s management board and supervisory board.

3.1.1	Consolidated statement of earnings for the years ended December 31, 2005 and 2004

		Universal																				Holding &
		Music				Vivendi				Canal+								Maroc				Corporate				Non core								Total
Year Ended December 31, 2005		Group				Games				Group				SFR				Telecom				(a)				operations				Eliminations				Vivendi
		(In millions of euros)
External revenues		€	4,877			€	641			€	3,379			€	8,683			€	1,848			€	—			€	56			€	—			€	19,484
Inter-segments revenues			16				—				73				4				12				—				5				(110	)			—
Revenues			4,893				641				3,452				8,687				1,860				—				61				(110	)			19,484
Operating expenses excl. D&A			(4,133	)			(555	)			(3,083	)			(5,478	)			(804	)			(149	)			(61	)			110				(14,153	)
Depreciation and amortization (D&A)			(261	)			(43	)			(165	)			(767	)			(266	)			(8	)			(15	)			—				(1,525	)
Other			(19	)			(2	)			(1	)			(20	)			(28	)			(38	)			48				—				(60	)
Earnings from operations		€	480			€	41			€	203			€	2,422			€	762			€	(195	)		€	33			€	—			€	3,746
Income from equity affiliates																																			326
Other income (charges) from ordinary activities																																			(95	)
Earnings from ordinary activities																																			3,977
Interest and other financial charges and income																																			401
Provision for income taxes																																			(204	)
Earnings from discontinued operations																																			92
Earnings																																		€	4,266
Attributable to:
Equity holders of the parent																																			3,154
Minority interests																																			1,112

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		Year Ended December 31, 2004
		Universal
		Music				Vivendi				Canal+								Maroc				Holding &				Non core								Total
		Group				Games				Group				SFR				Telecom				Corporate				operations				Eliminations				Vivendi
		(In millions of euros)
External revenues		€	4,962			€	475			€	3,500			€	7,188			€	1,569			€	—			€	189			€	—			€	17,883
Inter-segments revenues			27				—				60				4				12				—				22				(125	)			—
Revenues			4,989				475				3,560				7,192				1,581				—				211				(125	)			17,883
Operating expenses excl. D&A			(4,225	)			(588	)			(3,156	)			(4,114	)			(637	)			(181	)			(172	)			125				(12,948	)
Depreciation and amortization (D&A)			(342	)			(55	)			(224	)			(725	)			(267	)			(14	)			(27	)			—				(1,654	)
Other			(63	)			(35	)			8				(21	)			(15	)			2				76				—				(48	)
Earnings from operations		€	359			€	(203	)		€	188			€	2,332			€	662			€	(193	)		€	88			€	—			€	3,233
Income from equity affiliates																																			221
Other income (charges) from ordinary activities																																			64
Earnings from ordinary activities																																			3,518
Interest and other financial charges and income																																			820
Provision for income taxes																																			(292	)
Earnings from discontinued operations																																			777
Earnings																																		€	4,823
Attributable to:
Equity holders of the parent																																			3,767
Minority interests																																			1,056

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3.1.2	Consolidated statement of financial position as of December 31, 2005 and December 31, 2004

		Universal
		Music				Vivendi				Canal+								Maroc				Holding &				Non core				Total
		Group				Games				Group				SFR				Telecom				Corporate				operations				Vivendi
		(In millions of euros)
December 31, 2005
Segment assets(a)		€	8,085			€	361			€	5,735			€	11,498			€	3,861			€	8,572			€	863			€	38,975
incl. investments in equity affiliates(b)			34				—				5				397				1				6,419				—				6,856
Unallocated assets(c)																															5,508
Total assets																															44,483
Segment liabilities(d)			3,008				238				2,210				4,401				870				853				297				11,877
Unallocated liabilities(e)																															10,998
Total liabilities																															22,875
Capital expenditures(f)		€	43			€	31			€	113			€	1,100			€	291			€	2			€	—			€	1,580
December 31, 2004
Segment assets(a)		€	7,436			€	366			€	5,709			€	11,490			€	3,627			€	8,111			€	907			€	37,646
incl. investments in equity affiliates(b)			22				—				54				64				—				5,633				—				5,773
Unallocated assets(c)																															5,393
Total assets																															43,039
Segment liabilities(d)			2,930				231				2,135				4,356				708				1,312				388				12,060
Unallocated liabilities(e)																															12,887
Total liabilities																															24,947
Capital expenditures(f)		€	54			€	17			€	144			€	870			€	210			€	3			€	24			€	1,322

(a)	Includes goodwill, content assets, other intangible assets, property, plant and equipment, investments in equity affiliates, financial assets, inventories and trade accounts receivable and other.
(b)	From May 12, 2004, Holding & Corporate included the 20% stake in NBC Universal held by Universal Studios Holding Corp. (92.3% owned by Vivendi as of December 31, 2005).
(c)	Includes deferred tax assets, current tax receivables, cash and cash equivalents and assets held for sale.
(d)	Includes provisions, other non-current liabilities and trade accounts payable and other.
(e)	Includes borrowings and other financial liabilities, deferred tax liabilities, current tax payables and liabilities associated with assets held for sale.
(f)	The cumulated change in goodwill, content assets, other intangible assets, and property, plant and equipment, was +€235 million in 2005 and -€1,382 million in 2004. The increase in goodwill, and content assets, by segment is presented in Notes 9 and 10. The decrease in other intangible assets, i.e. €240 million in 2005 and €185 million in 2004, mainly concerned SFR (-€241 million in 2005 and +€81 million in 2004). The decrease in property, plant and equipment, i.e. €409 million in 2005 and €865 million in 2004, mainly concerned SFR (-€343 million in 2005 and +€44 million in 2004) and Maroc Telecom (+€92 million in 2005 and +€5 million in 2004).

3.2.	Geographic data

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			Year Ended December 31,
			2005								2004
			(In millions of euros)
Revenues
	France		€	12,216				63%			€	10,835				61%
	Rest of Europe			1,933				10%				2,176				12%
	US			2,414				12%				2,260				13%
	Morocco			1,773				9%				1,516				8%
	Rest of World			1,148				6%				1,096				6%
			€	19,484				100%			€	17,883				100%

			December 31,
			2005								2004
			(In millions of euros)
Segment assets(a)
	France		€	19,053				49%			€	19,423				52%
	Rest of Europe			1,680				4%				1,840				5%
	US			14,049				36%				12,435				33%
	Morocco			3,746				10%				3,527				9%
	Rest of World			447				1%				421				1%
			€	38,975				100%			€	37,646				100%

(a)	Please refer to the definition provided in (a) to the Note 3.1.2. “Consolidated statement of financial position as of December 31, 2005 and December 31, 2004”.

Note 4.	Earnings before interest and other financial charges and income and provision for income taxes for the years ended December 31, 2005 and 2004

4.1.	Breakdown of revenues and cost of revenues for the years ended December 31, 2005 and 2004

		Year Ended
		December 31,
		2005				2004
		(In millions of
		euros)
Product sales, net		€	5,739			€	5,805
Service revenues			13,700				12,056
Other			45				22
Revenues		€	19,484			€	17,883
Cost of products sold, net			(3,699	)			(3,696	)
Cost of service revenues			(6,196	)			(5,434	)
Other			(3	)			30
Cost of revenues		€	(9,898	)		€	(9,100	)
Margin from operations rate			49	%			49	%

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4.2.	Personnel costs and average employee numbers for the years ended December 31, 2005 and 2004

						Year Ended
						December 31,
		Note				2005				2004
						(In millions of
						euros except
						number of
						employees)
Annual average number of full time equivalent employees							37,166				38,889
Salaries						€	(1,561	)		€	(1,535	)
Social security and other employment charges							(367	)			(386	)
Capitalized personnel costs							16				18
Wages and expenses						€	(1,912	)		€	(1,903	)
Share-based compensation			19				(50	)			(64	)
Employee benefit plans			21				(92	)			(48	)
Other							(112	)			(116	)
Personnel costs						€	(2,166	)		€	(2,131	)

4.3.	Additional information on operating expenses for the years ended December 31, 2005 and 2004

4.3.1	Research and development costs for the years ended December 31, 2005 and 2004

4.3.2	Advertising costs for the years ended December 31, 2005 and 2004

4.4.	Other income from ordinary activities for the years ended December 31, 2005 and 2004

						Year Ended
						December 31,
		Note				2005				2004
						(In millions
						of euros)
Dividends from unconsolidated interests			27			€	38			€	23
Interests received on loans to equity affiliates and other financial receivables							37				66
Other income from ordinary activities						€	75			€	89

4.5.	Other charges from ordinary activities for the years ended December 31, 2005 and 2004

						Year Ended
						December 31,
		Note				2005				2004
						(In millions
						of euros)
Impairment of goodwill losses			9.3			€	(50	)		€	(23	)
Impairment losses of other intangible assets acquired in business combinations							—				(2	)
Other non cash write-off			14.2				(124	)			—
Other							4				—
Other charges from ordinary activities						€	(170	)		€	(25	)

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Note 5.	Interest and other financial charges and income for the years ended December 31, 2005 and 2004

			Year Ended
			December 31,
			2005				2004
			(In millions of
			euros)
	Interest expenses on borrowings		€	(262	)		€	(362	)
	Interest income from cash and cash equivalents			45				40
	Interest income (expenses) on interest rate swaps			(1	)			(84	)
Interest			€	(218	)		€	(406	)
	Premiums incurred for early redemption of notes and other financial liabilities			(71	)			(308	)
	Impact of other amortized cost on borrowings			(44	)			(178	)
				(115	)			(486	)
	Downside adjustment of the value of derivative instruments			(21	)			(117	)
	Capital loss on the divestiture of businesses or financial investments			(26	)			(108	)
	Interest cost related to employee benefit plans			(75	)			(83	)
	Effect of undiscounting other assets and liabilities			(13	)			(14	)
	Other			(37	)			(65	)
Other financial charges				(287	)			(873	)
	Upside adjustment of the value of derivative instruments			19				107
	Capital gain on the divestiture of businesses or financial investments			694				1,846
	Expected return on assets of employee benefit plans			40				46
	Other			153				100
Other financial income				906				2,099
Other financial charges and income			€	619			€	1,226
Interest and other financial charges and income			€	401			€	820

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Note 6.	Income taxes for the years ended December 31, 2005 and 2004

6.1.	Components of the provision for income taxes

								Year Ended
								December 31,
				Note				2005				2004
								(In millions of euros)
Provision for income taxes:
	Current
		Tax savings related to the Consolidated Global Profit Tax System			6.1.1			€	507			€	464
		Tax savings related to the US fiscal group							258				167
		Use of tax losses and temporary differences previously unrecognized							14				117
		Adjustments to prior year tax expense(a)							49				—
		Current provision for income taxes							(1,519	)			(1,414	)
								€	(691	)		€	(666	)
	Deferred
		Impact of the Consolidated Global Profit Tax System			6.1.1				88				492
		Other changes in deferred tax assets							145				61
		Impact of the change(s) in tax rates							(16	)			(10	)
		Reversal of tax liabilities relating to tax years no longer open to audit							300				—
		Other deferred tax income/(expenses)							(30	)			(169	)
								€	487			€	374
Provision for income taxes								€	(204	)		€	(292	)

(a)	Including the impact of adjustments to prior year tax expenses and other revised tax assessments, where applicable.

6.1.1	Consolidated Global Profit Tax System

	•	As of December 31, 2004, Vivendi carried forward losses of €11,258 million as the head company consolidating for tax purposes the results of French and foreign companies (based on “French” tax results for the latter) in which it holds at least 50% of the share capital, as well as Canal+ SA.

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	•	As of February 21, 2006, date of the management board meeting held to approve the financial statements for the year ended December 31, 2005, the “French” 2005 taxable profits of tax group companies cannot be determined with sufficient certainty. As such, the amount of ordinary tax losses available for carry forward as of December 31, 2005 also cannot be determined with sufficient certainty at this date.
	•	Therefore, before adjustment for the impact of 2005 taxable profits on the future utilization of ordinary tax losses carried forward, Vivendi SA will be able to realize maximum tax savings of €3,752 million (undiscounted value based on the current income tax rate of 33.33%).
	•	Nonetheless, the period during which losses will be relieved cannot currently be determined with sufficient precision given the uncertainty associated with any economic activity, in terms of both future results and scope of activities.
	•	Vivendi therefore values its tax losses carried forward under the Consolidated Global Profit Tax System based on one year’s forecast results, taken from the budget for the following year.

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6.1.2	Provision for income taxes and income tax paid by geographical area:

					Year Ended
					December 31,
					2005				2004
					(In millions of
					euros)
Provision for income taxes:
	Current
		France			€	(437	)		€	(430	)
		US				7				(16	)
		Morocco				(260	)			(232	)
		Other jurisdictions				(1	)			12
					€	(691	)		€	(666	)
	Deferred
		France				156				393
		US				292				(24	)
		Morocco				7				5
		Other jurisdictions				32				—
					€	487			€	374
Provision for income taxes					€	(204	)		€	(292	)
Income tax (paid)/collected:
		France				(1,057	)			(333	)
			including Consolidated Global Profit Tax System(a)			464				—
			including SFR(b)			(1,414	)			(68	)
		US				7				(17	)
		Morocco				(279	)			(220	)
		Other jurisdictions				(57	)			(52	)
Income tax paid					€	(1,386	)		€	(622	)

(a)	Tax savings generated by the Consolidated Global Profit Tax System in respect of 2004 received in cash in 2005.
(b)	The increase in the tax expense paid by SFR was notably due to catch-up adjustments resulting from the rationalization of the SFR Cegetel Group legal structure at the end of 2003.

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6.2.	Effective tax rate

								Year Ended
								December 31,
				Note				2005				2004
								(In millions of
								euros, except %)
Earnings, attributable to equity holders of the parent								€	3,154			€	3,767
Add back:
	Provision for income taxes								204				292
	Earnings from discontinued operations								(92	)			(777	)
	Minority interests								1,112				1,056
Earnings from continuing operations before provision for income taxes								€	4,378			€	4,338
French statutory tax rate(a)									33.3	%			33.3	%
Theoretical provision for income taxes based on French statutory tax rate									(1,459	)			(1,446	)
Reconciliation of the theoretical and effective provision for income taxes:
	Permanent differences
		Income from equity affiliates(b)							114				74
		Long term capital gains and losses taxed at reduced rate							—				81
		Untaxable consolidation capital gains							104				222
		Other differences from tax rates							(75	)			(79	)
		Other permanent differences							(154	)			(117	)
	Restatements in respect of the provision for income taxes of previous years
		Reversal of tax liabilities relating to tax years no longer open to audit							300				—
		Other							49				—
	Tax losses
		Current tax savings related to the Consolidated Global Profit Tax System			6.1.1				507				464
		Change in the deferred tax asset related to the Consolidated Global Profit Tax System			6.1.1				88				492
		Other changes from deferred tax assets							123				—
		Use of unrecognized ordinary losses (France and US)							215				209
		Unrecognized tax losses							(16	)			(192	)
Effective provision for income taxes								€	(204	)		€	(292	)
Effective tax rate									4.7	%			6.7	%

(a)	The French statutory tax rate is 33.33%. The December 30, 2004 Finance Act (Act n°2004-1484) provided for the phasing out of the additional contribution (contribution additionnelle) surtax, equal to 3% of the corporate tax liability of French companies since 2002. This surtax has since been reduced to 1.5% from January 1, 2005 and will be abolished in 2006. Act n°99-1140 of December 29, 1999 dealing with the financing of the social security system provided for the introduction of a surtax equal to 3.3% of the corporate tax liability of French companies. This surtax had the effect of raising the French corporate tax rate by 1.1 percentage points. The French corporate tax rate was therefore 34.93% in 2005 (versus 35.43% in 2004) and will be 34.43% in 2006.
(b)	Non-taxable consolidation adjustments.

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6.3.	Changes in current and deferred tax assets and liabilities

								(Expense)/																Changes in foreign
								income in the												Changes in				currency translation
				December 31,				statement of				Impact on				Payments/				scope of				adjustments				December 31,
				2004				earnings				equity				(Collections)				consolidation				and other				2005
				(In millions of euros)
Current taxes
	Asset			€	772			€	828			€	—			€	(514	)		€	3			€	(267	)		€	822
		including Consolidated Global Profit Tax System			464				507				—				(464	)			—				—			€	507
	Liability				(1,298	)			(1,519	)			—				1,900				(1	)			156			€	(762	)
				€	(526	)		€	(691	)		€	—			€	1,386			€	2			€	(111	)		€	60
Deferred taxes
	Asset				1,282				375				—				—				(42	)			169			€	1,784
		including Consolidated Global Profit Tax System			561				225				—				—				—				—			€	786
	Liability				(3,282	)			112				55				—				81				(442	)		€	(3,476	)
		including Consolidated Global Profit Tax System			(69	)			(137	)			—				—				—				—			€	(206	)
				€	(2,000	)		€	487			€	55			€	—			€	39			€	(273	)		€	(1,692	)

	Deferred tax asset and liability components

			December 31,				December 31,
			2005				2004
			(In millions of euros)
Deferred tax assets
	Activable deferred taxes(a)		€	5,251			€	5,362	(b)
	Unrecognized deferred taxes(c)			(3,467	)			(4,080	)(b)
	Recorded deferred tax assets		€	1,784			€	1,282
Deferred tax liabilities
	Neutralization of the deferred tax assets due to the
	Consolidated Global Profit Tax System			206				69
	Purchase accounting reevaluation of assets(d)			824				732
	DuPont share redemption(e)			1,559				1,356
	Spirits and wine sale			225				397
	Other			662				728
	Recorded deferred tax liabilities		€	3,476			€	3,282
Deferred tax assets/(liabilities), net			€	(1,692	)		€	(2,000	)

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(a)	Mainly includes deferred tax assets in respect of ordinary tax losses carried forward by Vivendi as head of the tax group under the Consolidated Global Profit Tax System (€3,752 million as of December 31, 2004 before utilization for 2005 tax savings, estimated at €507 million; please refer to Note 6.1.1 above), and ordinary tax losses carried forward by the US tax group (€263 million) and deferred tax assets in respect of other deductible tax bases.
(b)	Article 39 of the amended 2004 Finance Act introduced a progressive capital gains tax exemption over three years. As such, as of December 31, 2004, Vivendi was only able to recognize the relief of long-term capital losses against capital gains expected in 2005 and 2006 at the tax rates prevailing in those years (2005: 15.72%; 2006: 8.26%). Application of these principles led Vivendi to recognize a restricted deferred tax asset of €38 million as of December 31, 2005 and €33 million as of December 31, 2004. This rise was due to an increase in the reduced-tax rate base.
(c)	Not recognized due to gross assets value prospects. As of December 31, 2005, they mainly concerned tax losses carried forward. In effect, the period during which tax losses will be relieved cannot currently be determined with sufficient precision given the uncertainty associated with any economic activity. Vivendi SA recognized expected tax savings for the years 2005 and 2006 only (please refer to paragraph 6.1 above).
(d)	These tax liabilities generated by asset revaluations as a result of the purchase price allocation of company acquisition costs are cancelled on the depreciation, amortization or divestiture of the underlying asset and generate no current tax charge.
(e)	The changes recognized in 2005 and 2004 mainly relate to foreign currency translation adjustments. The tax treatment reported by Seagram in 1995 with respect to the DuPont share redemption is being challenged by the US Internal Revenue Service. Please refer to Note 30 “Litigations”.

6.4.	Tax audits

Note 7.	Discontinued operations and assets held for sale in 2005 and 2004

		Year Ended
		December 31,
		2005				2004
		(In millions
		of euros)
Statements of earnings
Equity earnings of Cegetel SAS (up to 71.8%)		€	(29	)			€(62	)
Capital gain realized on the divestiture of 71.8% of Cegetel SAS (no tax impact)			121				—
Equity earnings of VUE (up to 80%)			—				132
Capital gain realized on the divestiture of 80% of VUE, net of tax of €244 million			—				707
Earnings from discontinued operations		€	92				€777

		December 31,				December 31,
		2005				2004(a)
		(In millions of euros)
Statements of financial position
Assets held for sale		€	—			€	180
Liabilities associated with assets held for sale			—				108
Equity associated with assets held for sale		€	—			€	—

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		Year Ended
		December 31,
		2005(b)				2004(b)(c)
		(In millions of euros)
Consolidated statements of cash flows
Net cash provided by operating activities of discontinued operations		€	(6	)		€	550
Net cash provided by (used for) investing activities of discontinued operations			(18	)			(703	)
Net cash provided by (used for) financing activities of discontinued operations			21				1,144
Net cash outflow related to the divestiture of the period			3				(980	)
Net cash related to discontinued operations		€	—			€	11

(a)	NC Numéricâble. Please refer to Note 2.5. “Other changes in scope in 2005 and 2004”.
(b)	Cegetel SAS.
(c)	Cegetel SAS and VUE.

7.1.	Combination of Cegetel SAS with Neuf Telecom

		Period from January 1				Year Ended
		to August 22, 2005				December 31, 2004
		(In millions of euros)
		234 days				366 days
Revenues		€	685			€	1,027
Earnings from operations			(94	)			(72	)
Earnings before interest and other financial charges and income and provision for income taxes			(94	)			(72	)
Interest and other financial charges and income			(6	)			(8	)
Earnings before provision for income taxes			(100	)			(80	)
Provision for income taxes			—				—
Earnings before adjustments related to the classification of 71.8% of Cegetel SAS as discontinued operations		€	(100	)		€	(80	)
Income from equity affiliates (28.2% of earnings)		€	(28	)		€	(22	)
Earnings from discontinued operations (71.8% of earnings and adjustments)		€	(29	)(a)		€	(62	)

(a)	Includes the cessation of depreciation and amortization of property, plant and equipment and intangible assets in the amount of €42 million after tax as of August 22, 2005.

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		Period from January 1				Year Ended
		to August 22, 2005				December 31, 2004
		(In millions of euros)
Net cash provided by operating activities		€	(6	)		€	150
Net cash provided by (used for) investing activities			(18	)			(159	)
Net cash provided by (used for) financing activities			21				20
Net cash outflow related to the divestiture of the period			3				—
Change in cash and cash equivalents		€	—			€	11

7.2.	Divestiture of 80% of Vivendi Universal Entertainment (VUE)

	VUE’s condensed statement of earnings for the period presented was as follows:

		Period from
		January 1
		to May 11, 2004
		(In millions of euros)
		132 days
Revenues		€	2,327
Earnings from operations			337
Earnings before interest and other financial charges and income and provision for income taxes			328
Interest and other financial charges and income			(99	)
Earnings before provision for income taxes			229
Provision for income taxes			(81	)
Earnings before adjustments related to the classification of 80% of VUE as discontinued operations		€	148
Income from equity affiliates (20% of earnings)		€	30
Earnings from discontinued operations (80% of earnings and adjustments(a))		€	132

(a)	Includes the cessation of depreciation and amortization of property, plant and equipment and intangible assets, in the amount of €34 million after tax, as well as the elimination of intercompany interest amounting to €11 million.

	Cash flow related to VUE for the period presented were as follows:

		Period from
		January 1
		to May 11, 2004
		(In millions of euros)
Net cash provided by operating activities		€	400
Net cash provided by (used for) investing activities			(544	)
Net cash provided by (used for) financing activities			1,124
Retrocedence of generated cash flows(a)			(980	)
Change in cash and cash equivalents		€	—

(a)

The agreement for the combination of NBC and VUE signed by Vivendi, General Electric and NBC on October 8, 2003 contained specific provisions concerning the availability of cash generated by VUE between October 1, 2003 and May 11, 2004, the transaction completion date. In effect, the agreement provided that Vivendi must pay over all cash generated by VUE between October 1, 2003 and May 11, 2004. As such, the change in VUE cash and cash equivalents in 2004 does not impact Group cash and cash equivalents, in particular given the classification of VUE’s assets, including cash and cash equivalents, in assets held for sale from October 8, 2003.

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Note 8.	Earnings per share for the years ended December 31, 2005 and 2004

		Year Ended December 31,
		2005								2004
		Basic				Diluted				Basic				Diluted
Earnings (in millions of euros)
Earnings from continuing operations, attributable to the equity holders of the parent		€	3,109			€	3,109			€	2,983			€	2,983
Earnings from discontinued operations			92				92				777				777
Earnings, attributable to equity holders of the parent			3,154				3,154				3,767				3,767
Number of shares (in millions)			1,149.6				1,158.5				1,144.4				1,151.1
Earnings per share (in euros)
Earnings from continuing operations, attributable to the equity holders of the parent per share		€	2.70			€	2.68			€	2.61			€	2.59
Earnings from discontinued operations per share		€	0.08			€	0.08			€	0.68			€	0.68
Earnings, attributable to equity holders of the parent per share		€	2.74			€	2.72			€	3.29			€	3.27

							Year Ended December 31,
			Note				2005				2004				% change
							(In number of shares)
Weighted average number of shares outstanding over the period								1,152,131,605				1,072,099,023				7.5%
Notes mandatorily redeemable for new shares of Vivendi (ORA) (maturity: November 2005)				18.2				—				72,822,148
Treasury shares at the end of the period								(2,498,948	)			(570,098	)
Weighted average number of shares outstanding restated over the period								1,149,632,657				1,144,351,073				0.5%
Potential dilutive effect:
	— Vivendi stock subscriptions plans(a)							8,893,705				6,713,341
Potential dilutive effect of financial instruments outstanding								8,893,705				6,713,341
Weighted average number of shares after potential dilutive effect								1,158,526,362				1,151,064,414				0.6%

(a)	The dilutive effect of Vivendi’s subscriptions plans was determined using the share repurchase method.

Note 9.	Goodwill as of December 31, 2005 and December 31, 2004

9.1.	Goodwill as of December 31, 2005 and December 31, 2004

		December 31,				December 31,
		2005				2004
		(In millions of euros)
Goodwill, gross		€	27,063			€	25,818
Impairment losses			(13,267	)			(12,664	)
Goodwill		€	13,796			€	13,154

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9.2.	Changes in goodwill in 2005 and 2004

											Changes in value
											of commitments								Changes in foreign
			Goodwill as of								to purchase								currency translation				Goodwill as of
			December 31,				Impairment				minority				Changes in scope				adjustments				December 31,
			2004				losses				interests				of consolidation				and other				2005
			(In millions of euros)
Universal Music Group			€	3,755			€	(50	)(a)		€	—			€	—			€	570			€	4,275
Vivendi Games				29				—				—				37				11				77
Canal+ Group				3,732				4				(13	)			61				—				3,784
	including StudioCanal			62				2				—				43				(1	)			106
SFR				4,025				—				—				(6	)(b)			5				4,024
Maroc Telecom				1,612				—				—				(22	)			46				1,636
Non core operations				1				—				—				—				(1	)			—
Total			€	13,154			€	(46	)		€	(13	)		€	70			€	631			€	13,796

(a)	Pursuant to IAS 12, a write-off of goodwill of €48 million was recorded in order to offset the recognition of deferred tax assets relating to ordinary tax losses not recognized at the end of 2000 as part of UMG’s purchase price allocation.
(b)	Including -€155 million in respect of the deconsolidation of Cegetel SAS, partially offset by the recognition of additional goodwill (€97 million) on the acquisition of 35% of the share capital of Cegetel SAS from SNCF before the divestiture of Cegetel SAS to Neuf Telecom (please refer to Note 2.2. “Combination of Cegetel SAS with Neuf Telecom on August 22, 2005”).

											Changes in value
											of commitments								Changes in foreign
			Goodwill as of								to purchase								currency translation				Goodwill as of
			January 1,				Impairment				minority				Changes in scope				adjustments				December 31,
			2004				losses				interests				of consolidation				and other				2004
			(In millions of euros)
Universal Music Group			€	4,114			€	(5	)		€	—			€	2			€	(356	)		€	3,755
Vivendi Games				51				—				—				(1	)			(21	)			29
Canal+ Group				3,558				(18	)			21				33				138				3,732
	including StudioCanal			58				—				—				4				—				62
SFR				3,987				—				42				—				(4	)			4,025
Maroc Telecom				1,161				—				449				14				(12	)			1,612
Non core operations				71				—				—				(73	)			3				1
Total			€	12,942			€	(23	)		€	512			€	(25	)		€	(252	)		€	13,154

9.3.	Impairment of goodwill test

	•	The Canal+ Group: mainly (i) pay-television in France, comprising the following operating units: Canal+ SA, CanalSat, MultiThématiques and MédiaOverseas and (ii) StudioCanal; and
	•	Other operating units: UMG, Vivendi Games, SFR, Maroc Telecom.

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			2005										2004
									Perpetual										Perpetual
			Method		Discount Rate				Growth Rate				Method		Discount Rate				Growth Rate
Universal Music Group			DCF and guideline companies			8.25%				2.5%			DCF and guideline companies			9.0%				2.2% - 2.5%
Vivendi Games			DCF			11.0% - 12.0%				3.5%			DCF and guideline companies			11.5%				3.5%
Canal+ Group
	Pay TV		by reference to the merger of French pay- TV operations signed with TF1 and M6 on January 6, 2006			—				—			DCF and guideline companies			9.0% - 10.0%				2.0% - 2.5%
	StudioCanal		DCF			8.0% - 9.0%				2.0% - 2.5%			DCF and guideline companies			9.0% - 10.0%				-8.0%
SFR			DCF and guideline companies			8.00%				2.5%			Guideline companies			—				—
Maroc Telecom			stock market price, DCF and guideline companies			10.50%				2.5%			stock market price			—				—

Note 10.	Content assets, liabilities and contractual commitments as of December 31, 2005 and December 31, 2004

						Accumulated
		Content				amortization and				Content
December 31, 2005		assets, gross				impairment losses				assets
		(In millions of euros)
Music catalogs and publishing rights			€5,350				€(3,361	)			€1,989
Advances to artists and repertoire owners			366				—				366
Sports rights			355				—				355
Film and television costs			3,697				(3,188	)			509
Games advances			185				(152	)			33
Content assets			€9,953				€(6,701	)			€3,252
Deduction of current content assets			(983	)			193				(790	)
Non current content assets			€8,970				€(6,508	)			€2,462

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						Accumulated
		Content				amortization and				Content
December 31, 2004		assets, gross				impairment losses				assets
		(In millions of euros)
Music catalogs and publishing rights			€4,694				€(2,784	)			€1,910
Advances to artists and repertoire owners			321				—				321
Sports rights			187				—				187
Film and television costs			3,528				(2,972	)			556
Games advances			155				(119	)			36
Content assets			€8,885				€(5,875	)			€3,010
Deduction of current content assets			(729	)			150				(579	)
Non current content assets			€8,156				€(5,725	)			€2,431

	Changes in the main content assets during the years ended December 31, 2005 and 2004 were as follows:

		Year Ended
		December 31,
		2005				2004
		(In millions of
		euros)
Opening balance of music catalogs and publishing rights			€1,910				€2,266
Amortization, net			(200	)			(232	)
Purchases of catalogs			6				99
Divestitures of catalogs			—				(51	)
Changes in foreign currency translation adjustments and other			273				(172	)
Closing balance of music catalogs and publishing rights			€1,989				€1,910

		Year Ended
		December 31,
		2005				2004
		(In millions of
		euros)
Opening balance of advances to artists and repertoire owners		€	321			€	439
Payment of advances			588				535
Recoupment of advances, net			(570	)			(669	)
Changes in foreign currency translation adjustments and other			27				16
Closing balance of advances to artists and repertoire owners		€	366			€	321

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		Year Ended
		December 31,
		2005				2004
		(In millions of
		euros)
Opening balance of sports rights		€	187			€	103
Rights acquisition			554				383
Rights accrual			198				161
Consumption of broadcasting rights			(570	)			(460	)
Other			(14	)			—
Closing balance of sports rights		€	355			€	187

	•	At the acquisition of the rights in December 2004, they were recorded as off-balance sheet commitments for €1,800 million.
	•	Upon the opening of each League 1 season (in July 2005, July 2006 and July 2007, respectively), the rights corresponding to the related opened season are recognized in the statement of financial position, as current content assets (less than 12 months), against current accounts payable owed to the French Professional Soccer League. Therefore, in Vivendi’s financial statements as of July 2005, a €600 million content asset was recorded against accounts payable for the same amount (to which the related VAT was added). At that date, the rights recorded as off-balance sheet commitments amounted to €1,200 million and related to the 2006 — 2007 and 2007 — 2008 seasons.
	•	The asset is then amortized in cost of revenues, over the broadcasting period, pro rata to the number of games broadcast. As of December 31, 2005, after broadcasting 19 days of League 1, the portion of the rights related to the 2005 — 2006 season amortized amounted to €300 million and the net amount of these rights in content assets was therefore €300 million.
	•	Accounts payable are amortized in line with payments to the French Professional Soccer League. As of December 31, 2005, in accordance with the payment schedule, payments relating to the rights to the 2005 — 2006 season amounted to €273 million and the accounts payable balance (including the VAT) was therefore €391 million.

		Year Ended
		December 31,
		2005				2004
		(In millions of
		euros)
Opening balance of film and television costs		€	556			€	663
Acquisition of coproductions and catalogs			25				49
Coproductions developed internally			—				9
Consumption of coproductions and catalogs			(44	)			(120	)
Acquisition of film and television broadcasting rights			567				588
Consumption of film and television broadcasting rights			(551	)			(578	)
Other			(44	)			(55	)
Closing balance of film and television costs		€	509			€	556

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	Additional information on film costs and television programs excluding broadcasting rights:

			December 31,				December 31,
			2005				2004
			(In millions of euros)
Film costs(a):
	Released in theaters, less amortization		€	252			€	303
	Completed, not released			—				—
	In production			22				33
			€	274			€	336
Costs of television coproductions:
	Released, less amortization			5				6
	In production			1				4
			€	6			€	10
Film and television costs generating income			€	280			€	346

(a)	Includes films produced or acquired before their first release for sale to third parties, as well as television rights catalogs.

		December 31,				December 31,
		2005				2004
		(In millions of euros)
Music royalties to artists and repertoire owners		€	1,514			€	1,348
Creative talent and employment agreements			196				160
Content liabilities		€	1,710			€	1,508

	Commitments given recorded in the statement of financial position

		Total as of				Payments due in
Commitments given recorded in the consolidated		December 31,
statement of financial position		2005				2006				2007				2008				2009				2010				After 2010
		(In millions of euros)
Film and television broadcasting rights(a)		€	135			€	135			€	—			€	—			€	—			€	—			€	—
Sports rights(b)			373				358				5				10				—				—				—
Creative talent and employment agreements(c)			196				57				28				16				65				3				27
Total		€	704			€	550			€	33			€	26			€	65			€	3			€	27

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	Off-balance sheet commitments given/ received

			Total as of				Payments due in																								Total as of
			December 31,																												December 31,
Off balance sheet commitments			2005				2006				2007				2008				2009				2010				After 2010				2004
			(In millions of euros)
Film and television broadcasting rights(a)			€	2,320			€	795			€	337			€	237			€	156			€	138			€	657			€	2,081
Sports rights				1,377	(b)			309				690				362				13				2				1				1,973
Creative talent and employment agreements(c)				930				418				247				136				53				50				26				830
	Total given		€	4,627			€	1,522			€	1,274			€	735			€	222			€	190			€	684			€	4,884
Film and television broadcasting rights(a)				(111	)			(82	)			(22	)			(6	)			—				—				(1	)			(79	)
Sports rights				(48	)			(19	)			(19	)			(10	)			—				—				—				—
Creative talent and employment agreements(c)			Not Quantifiable
	Total received		€	(159	)		€	(101	)		€	(41	)		€	(16	)		€	—			€	—			€	(1	)		€	(79	)

	(a) Includes primarily contracts valid over several years relating to the broadcast of future film and TV productions (mainly exclusivity contracts with major US studios and pre-purchases in the French movie industry), StudioCanal film coproduction commitments (given and received) and broadcasting rights of CanalSat and Cyfra+ multichannel digital TV packages. They are recorded as content assets when the broadcast is available for initial release.
	(b) Includes €1,200 million in respect of residual rights to broadcast the French Professional Soccer League won by the Canal+ Group in December 2004 for the seasons 2006 — 2008. These rights are recognized in the statement of financial position on the opening of the related sport season or at first payment.
	(c) UMG routinely commits to artists and other parties to pay agreed amounts upon delivery of content or other product (“Creative talent and employment agreements”). Until the artist or other party has not delivered his or her content, UMG discloses its obligation as an off-balance sheet commitment. While the artist or other party is also obligated to deliver content or other product to UMG (these arrangements are generally exclusive), UMG does not report these obligations (or the possible effect of the other party’s failure to deliver) as an offset to its off-balance sheet commitments.

	Other off-balance sheet commitments received

	•	Vivendi Games granted operating licenses for the massively multiplayer online role playing game World of Warcraft to China The 9 in China and to Softworld in Taiwan. The game was launched in China in June 2005 and in Taiwan in November 2005. In both cases, Vivendi Games received a guaranteed minimum earning from royalties. In addition, these partners are responsible for local technical aspects, game masters and customer assistance as well as distribution and marketing.
	•	The Canal+ Group has received commitments from its subscribers estimated at approximately €1,907 million (including VAT) as of December 31, 2005. This estimate reflects the minimum commitments granted by subscribers over the residual life of the contracts (including decoder rental, where appropriate).

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Note 11.	Other intangible assets as of December 31, 2005 and December 31, 2004

11.1.	Other intangible assets as of December 31, 2005 and December 31, 2004

						Accumulated
		Other intangible				amortization and				Other intangible
December 31, 2005		assets, gross				impairment losses				assets
		(In millions of euros)
Internally developed software(a)		€	839			€	(483	)		€	356
Acquired software(b)			1,202				(901	)			301
Telecom licenses			988				(158	)			830
Trade names(c)			232				(188	)			44
Other			898				(492	)			406
		€	4,159			€	(2,222	)		€	1,937

						Accumulated
		Other intangible				amortization and				Other intangible
December 31, 2004		assets, gross				impairment losses				assets
		(In millions of euros)
Internally developed software(a)		€	819			€	(492	)		€	327
Acquired software(b)			1,348				(929	)			419
Telecom licenses			970				(89	)			881
Trade names(c)			202				(151	)			51
Other			1,022				(523	)			499
		€	4,361			€	(2,184	)		€	2,177

(a)	Includes mainly the cost of internal software developed by SFR and amortized over 4 years.
(b)	Includes mainly SFR software amortized over 4 years.
(c)	Vivendi Games trade names, amortized on a straight-line basis over 10 years.

11.2.	Changes in other intangible assets for the years ended December 31, 2005 and 2004

		Year Ended
		December 31,
		2005				2004
		(In millions of
		euros)
Opening balance		€	2,177			€	2,362
Amortization(a)			(414	)			(371	)
Impairment losses			(3	)			(2	)
Acquisitions			254				321
Increase related to internal developments			197				161
Divestitures / Decrease			(24	)			(46	)
Changes in scope of consolidation(b)			(234	)			(33	)
Reclassification as an asset held for sale			—				(13	)
Changes in foreign currency translation adjustments			19				(13	)
Other			(35	)			(189	)
Closing balance		€	1,937			€	2,177

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(a)	Accounted for in cost of revenues and in selling, general and administrative expenses. In 2005, the amortization charge mainly consisted of telecom licenses (SFR: -€38 million, Maroc Telecom: -€25 million), internally developed software (-€101 million) and acquired software (-€144 million).
(b)	In 2005, consisted of Cegetel SAS other intangible assets, including internally-developed software for €47 million, acquired software for €12 million, telecom licenses for €18 million and user rights and rights of passage for €209 million (please refer to Note 2.2 “Combination of Cegetel SAS with Neuf Telecom as of August 22, 2005”).

Note 12.	Property, plant and equipment as of December 31, 2005 and December 31, 2004

12.1.	Property, plant and equipment as of December 31, 2005 and December 31, 2004

						Accumulated
		Property, plant and				depreciation and				Property, plant and
December 31, 2005		equipment, gross				impairment losses				equipment
		(In millions of euros)
Land		€	297			€	(29	)		€	268
Buildings			1,905				(1,111	)			794
Equipment and machinery			5,985				(3,610	)			2,375
Construction-in-progress			239				—				239
Other			2,436				(1,781	)			655
		€	10,862			€	(6,531	)		€	4,331

						Accumulated
		Property, plant and				depreciation and				Property, plant and
December 31, 2004		equipment, gross				impairment losses				equipment
		(In millions of euros)
Land		€	362			€	(35	)		€	327
Buildings			1,967				(1,056	)			911
Equipment and machinery			6,237				(3,754	)			2,483
Construction-in-progress			365				(1	)			364
Other			2,319				(1,664	)			655
		€	11,250			€	(6,510	)		€	4,740

12.2.	Changes in property, plant and equipment for the years ended December 31, 2005 and 2004

		Year Ended
		December 31,
		2005				2004
		(In millions of
		euros)
Opening balance		€	4,740			€	5,605
Depreciation(a)			(870	)			(1,100	)
Acquisitions / Increase			1,163				1,051
Divestitures / Decrease			(137	)			(521	)
Changes in scope of consolidation(b)			(634	)			(85	)
Reclassification as an asset held for sale			—				(180	)
Changes in foreign currency translation adjustments			52				(23	)
Other			17				(7	)
Closing balance		€	4,331			€	4,740

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(a)	Accounted for in cost of revenues and in selling, general and administrative expenses. In 2005, the depreciation charge mainly consisted of buildings (€135 million) and equipment and machinery (€526 million).
(b)	In 2005, consisted of Cegetel SAS property, plant and equipment including land for €3 million, buildings for €75 million, equipment and machinery for €438 million and construction-in-progress for €87 million (please refer to Note 2.2 “Combination of Cegetel SAS with Neuf Telecom as of August 22, 2005”).

12.3.	Property, plant and equipment financed by finance lease contracts

		December 31,
		2005
		(In millions of
		euros)
Land		€	21
Buildings			256
Equipment and machinery			7
Property, plant and equipment financed by finance lease contracts		€	284

	•	An office block located in La Défense sold to Philip Morris Capital Corporation (PMCC) in 1998 and leased back to Vivendi under a very long-term lease (30 years) with a net carrying amount of €84 million as of December 31, 2005. The legal documentation provides PMCC with the ability to accelerate the lease if Vivendi sells all or substantially all of its assets in the energy and water sector. In a letter dated November 18, 2003, PMCC advised Vivendi that, pursuant to this clause, it was studying the impact of the sale by Vivendi of 50% of its stake in Veolia Environnement in December 2002 and the grant of call options by Vivendi covering its remaining stake in Veolia Environnement.
	•	Two buildings in Berlin which were sold in 1996, the sales being coupled with very long-term leases (expiring in 2012 and 2016), with a total net carrying amount of €90 million as of December 31, 2005.

Note 13.	Property, plant, equipment and intangible assets of telecom operations

		December 31,				December 31,
		2005				2004
		(In millions of euros)
Network equipment(a)		€	2,160			€	2,479
Software(b)			671				649
Telecom licenses(b)(c)			574				609
Other			440				691
Property, plant, equipment and intangible assets of telecom operations at SFR		€	3,845			€	4,428

		December 31,				December 31,
		2005				2004
		(In millions of euros)
Network equipment(a)		€	844			€	812
Software(b)			82				79
Telecom licenses(b)(d)			256				272
Other			343				276
Property, plant, equipment and intangible assets of telecom operations at Maroc Telecom		€	1,525			€	1,439

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(a)	Principally antennas, radio and transmission equipment, switch centers and servers and hardware.
(b)	Recorded as “Other intangible assets”.
(c)	Includes the gross value of €619 million of the UMTS license paid by SFR in September 2001 (20-year license to operate a 3G UMTS mobile telephony service in France). This license is amortized on a straight-line basis since service commencement mid-June 2004 and up to termination (i.e. August 2021).
(d)	Includes the gross value of Maroc Telecom’s license valued at €340 million during the purchase price adjustment allocation of the 35% interest in this subsidiary in April 2001. It is amortized on a straight-line basis over 15 years.

Note 14.	Investments in equity affiliates as of December 31, 2005 and December 31, 2004

14.1.	Equity affiliates as of December 31, 2005 and December 31, 2004

						Voting Interest								Value of Equity Affiliates
						December 31,				December 31,				December 31,				December 31,
		Note				2005				2004				2005				2004
						(In millions of euros)
NBC Universal/VUE			2.4				20.0	%			20.0	%		€	6,419			€	5,555	(a)
Neuf Cegetel			2.2				28.2	%			—				363				—
Elektrim Telekomunikacja			2.3				—(b)				49.0	%			—				—
Veolia Environnement			2.5				—				—				—				—
Sportfive			2.5				—				—				—				—
UGC			2.5				—				37.8	%			—				78
Other							na*				na*				74				140
														€	6,856			€	5,773

(a)	Universal Studios Holding Corp.’s historical stake in VUE and the investment in NBC for €4,929 million.
(b)	Following the acquisition from Ymer of an additional 2% stake in Elektrim Telekomunikacja in December 2005, this affiliate is fully consolidated in Vivendi’s financial statements.

14.2.	Changes in value of equity affiliates during the years ended December 31, 2005 and 2004

						Value of Equity																Changes in foreign				Value of Equity
						Affiliates as of				Changes in				Income from								currency translation				Affiliates as of
						December 31,				Scope of				Equity				Dividends				adjustments				December 31,
		Note				2004				Consolidation				Affiliates				Received				and other				2005
						(In millions of euros)
NBC Universal			2.4			€	5,555			€	—			€	361			€	(346	)		€	849	(a)		€	6,419
Neuf Cegetel			2.2				—				413	(b)			(50	)			—				—				363
UGC			2.5				78				(80	)(c)			3				—				(1	)			—
Other							140				4				12				(9	)			(73	)			74
						€	5,773			€	337			€	326			€	(355	)		€	775			€	6,856

(a)	Includes the impact of non-cash adjustments relating to the investment in NBC Universal (€124 million).
(b)	Corresponds to the reclassification of SFR’s 28.19% stake in Cegetel SAS (€176 million), following the combination of Cegetel SAS with Neuf Telecom (please refer to Note 7), and the 28.19% investment in Neuf Telecom (€237 million).
(c)	In December 2005, when the call option was exercised by the family shareholders, Vivendi divested its 37.8% stake in UGC SA’s share capital for €89 million (including interest).

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						Value of Equity																Changes in foreign				Value of Equity
						Affiliates as of				Changes in				Income from								currency translation				Affiliates as of
						January 1,				Scope of				Equity				Dividends				adjustments				December 31,
		Note				2004				Consolidation				Affiliates				Received				and other				2004
						(In millions of euros)
NBC Universal/VUE			2.4			€	1,699			€	4,828			€	205			€	(151	)		€	(1,026	)		€	5,555
Veolia Environnement			2.5				—				—				—				—				—				—
Sportfive			2.5				203				(211	)			8				—				—				—
UGC			2.5				61				—				16				—				1				78
Other							133				24				15				(3	)			(29	)			140
						€	2,096			€	4,641			€	244	(a)		€	(154	)		€	(1,054	)		€	5,773

(a)	Excludes the 28.2% share in earnings of Cegetel SAS, a discontinued operation, included in “Income from equity affiliates” in the consolidated statement of earnings (please refer to Note 7 “Discontinued operations and assets held for sale in 2005 and 2004”).

14.3.	Financial information relating to equity affiliates as of December 31, 2005 and December 31, 2004

		December 31, 2005
										Elektrim
		NBC				Neuf Cegetel				Telekomunikacja
		Universal				(a)				(b)				Other				Total
		(In millions of euros)
Vivendi’s ownership interests			18.47	%			15.79	%			49.00	%			na*				na*
Revenues			2,089				436				—				124				2,649
Earnings from operations			464				(26	)			(4	)			10				444
Earnings			338				(28	)			(11	)			6				305
Total assets			4,951				603				na*				92				5,646
Total liabilities			1,446				452				na*				63				1,961

		December 31, 2004
		NBC				Veolia
		Universal				Environnement				Elektrim
		(c)				(d)				Telekomunikacja				Other				Total
		(In millions of euros)
Vivendi’s ownership interests			18.47	%			20.40	%			49.00	%			na*				na*
Revenues			1,503				4,590				—				318				6,411
Earnings from operations			285				302				(13	)			14				588
Earnings			177				108				75				25				385
Total assets			4,788				na*				8				353				5,149
Total liabilities			1,562				na*				337				221				2,120

(a)	Company equity accounted from August 22, 2005.
(b)	Company consolidated, with a 51% ownership interest, from December 12, 2005. Please refer to Note 2.3 “Acquisition of an additional 2% stake in Elektrim Telekomunikacja (Telco) on December 12, 2005”.
(c)	Company equity accounted from May 12, 2004.
(d)	Company equity accounted up to December 9, 2004.

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						December 31,				December 31,
		Note				2005				2004
						(In millions of euros)
Available-for-sale securities			15.1				€1,706				€1,854
Derivative financial instruments			15.2				29				257
Other							91	(a)			5
Financial assets at fair value							1,826				2,116
Advances to equity affiliates			14				10				379	(b)
Cash deposits backing borrowings			15.3				61				59
Other financial receivables							193				209
Other			15.4				1,807				1,186
Financial assets at cost or at amortized cost							2,071				1,833
Financial assets							€3,897				€3,949
Deduction of short-term financial assets							(114	)			(162	)
Non current financial assets							€3,783				€3,787

(a)	Includes interests in the LBI Fund for €87 million (please refer to Note 2.3 “Acquisition of an additional 2% stake in Elektrim Telekomunikacja (Telco) on December 12, 2005).
(b)	Shareholder advances granted to Elektrim Telekomunikacja by Vivendi and VTI.

15.1.	Changes in available-for-sale securities during the years ended December 31, 2005 and 2004

																		Changes in foreign
																		currency translation
						December 31,				Changes in				Acquisition/				adjustments and				December 31,
		Note				2004				value				divestiture				other				2005
						(In millions of euros)
Veolia Environnement shares						€	573			€	250			€	—			€	—			€	823
DuPont shares							592				(86	)			—				84				590
Sogecable shares hedging the exchangeable bonds(a)			23				671				14				(403	)(b)			—				282
Other							18				(8	)			—				1				11
Available-for-sale securities						€	1,854			€	170			€	(403	)		€	85			€	1,706

(a)	As of December 31, 2005, including 8.3 million Sogecable shares (compared to 14.7 million as of December 31, 2004) that were subject to a loan. At the time of the issuance, Vivendi committed to lend a maximum of 20 million Sogecable shares to the financial institution acting as a bookrunner for the bond issue.
(b)	In November and December 2005, Vivendi divested 12.5 million Sogecable shares to bondholders.

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														Changes in foreign
														currency translation
		January 1,				Changes in				Acquisition/				adjustments and				December 31,
		2004				value				divestiture				other				2004
		(In millions of euros)
Veolia Environnement shares		€	—			€	573			€	—			€	—			€	573
DuPont shares			606				42				—				(56	)			592
Sogecable shares hedging the exchangeable bonds			568				103				—				—				671
Other			33				7				(21	)			(1	)			18
Available-for-sale securities		€	1,207			€	725			€	(21	)		€	(57	)		€	1,854

15.2.	Changes in derivative financial instruments during the years ended December 31, 2005 and 2004

														Changes in foreign
														currency translation
		December 31,				Changes in				Acquisition/				adjustments and				December 31,
		2004				value				divestiture				other				2005
		(In millions of euros)
Collar option on Veolia Environnement shares(a)		€	93			€	—			€	(93	)		€	—			€	—
Call options on Vinci shares hedging the exchangeable bonds			72				—				(72	)(b)			—				—
Foreign currency hedging swaps			32				(19	)			—				—				13
Interest rate swaps			42				(32	)			—				—				10
Other			18				(12	)			—				—				6
Derivative financial instruments		€	257			€	(63	)		€	(165	)		€	—			€	29

(a)	Pursuant to the sale of 15% of the share capital of Veolia Environnement in December 2004, Vivendi and Société Générale set up a derivative structure comprising a notional commitment covering 5% of the share capital of Veolia Environnement and enabling Vivendi to benefit over a 3-year period from any increase in the share price of Veolia Environnement above €23.91. This derivative structure was terminated early in October 2005. Due to an increase in the share price of Veolia Environnement above the collar trigger price set in December 2004, the unwinding of this instrument led to the recognition in 2005 of a financial income of €115 million, definitively acquired by Vivendi, equal to the gross income from the transaction (€208 million after commission) less the value of the collar as of January 1, 2005 (€93 million).
(b)	These options were unwound concurrently with the early redemption of the bonds exchangeable for Vinci shares which occurred in March 2005.

														Changes in foreign
														currency translation
		January 1,				Changes in				Acquisition/				adjustments and				December 31,
		2004				value				divestiture				other				2004
		(In millions of euros)
Collar option on Veolia Environnement shares		€	—			€	25			€	68			€	—			€	93
Call options on Vinci shares hedging the exchangeable bonds			16				56				—				—				72
Foreign currency hedging swaps			66				(34	)			—				—				32
Interest rate swaps			48				(6	)			—				—				42
Other			13				5				—				—				18
Derivative financial instruments		€	143			€	46			€	68			€	—			€	257

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15.3.	Cash deposits backing borrowings as of December 31, 2005 and December 31, 2004

		December 31,				December 31,
		2005				2004
		(In millions of euros)
Cash deposits backing finance leases		€	61			€	59
Cash deposits backing borrowings		€	61			€	59

15.4.	Other financial assets at cost or at amortized cost as of December 31, 2005 and December 31, 2004

						December 31,				December 31,
		Note				2005				2004
						(In millions of euros)
Deposits related to Qualified Technological Equipment operations(a)			16.4			€	807			€	865
Bonds issued by Neuf Telecom			2.2				180				—
PTC shares held by Telco and Carcom			2.3				531				—
Other unconsolidated interests							151				104
Other							138				217
Other financial assets at cost or at amortized cost						€	1,807			€	1,186

(a)	Cash deposits assuring the pre-financing of arrangement commissions for Qualified Technological Equipment (QTE) leases/ subleases set up by SFR in 1999 and 2001.

Note 16.	Other changes in net working capital as of December 31, 2005 and December 31, 2004

16.1.	Changes in net working capital during the years ended December 31, 2005 and 2004

							Net cash								Changes in foreign
			As of				provided by				Changes in				currency translation				As of
			December 31,				operating				Scope of				adjustments and				December 31,
			2004				activities				Consolidation				other				2005
			(In millions of euros)
Inventories			€	315			€	48			€	28			€	(16	)		€	375
Trade accounts receivable and other				4,528				300				(401	)			104				4,531
	Working capital assets		€	4,843			€	348			€	(373	)		€	88			€	4,906
Trade accounts payable and other				8,187				739				(546	)			357				8,737
Other non current liabilities				1,955				(225	)			(343	)			(45	)			1,342
	Working capital liabilities		€	10,142			€	514			€	(889	)		€	312			€	10,079
Net working capital			€	(5,299	)		€	(166	)		€	516			€	(224	)(a)		€	(5,173	)

(a)	Includes -€233 million of changes in foreign currency translation adjustments.

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							Net cash								Changes in foreign
			As of				provided by				Changes in				currency translation				As of
			January 1,				operating				Scope of				adjustments and				December 31,
			2004				activities				Consolidation				other				2004
			(In millions of euros)
Inventories			€	364			€	(22	)		€	(26	)		€	(1	)		€	315
Trade accounts receivable and other				5,126				(105	)			(281	)			(212	)			4,528
	Working capital assets		€	5,490			€	(127	)		€	(307	)		€	(213	)		€	4,843
Trade accounts payable and other				8,653				(165	)			(553	)			252				8,187
Other non current liabilities				1,771				152				(25	)			57				1,955
	Working capital liabilities		€	10,424			€	(13	)		€	(578	)		€	309			€	10,142
Net working capital			€	(4,934	)		€	(114	)		€	271			€	(522	)		€	(5,299	)

16.2.	Trade accounts receivable and other as of December 31, 2005 and December 31, 2004

			December 31,				December 31,
			2005				2004
			(In millions of euros)
Trade accounts receivable				€4,188				€4,431
Trade accounts receivable write-offs				(788	)			(847	)
Trade accounts receivable, net				€3,400				€3,584
Other				1,131				944
Including
	VAT to be received			635				546
	Social costs and other taxes			33				20
	Prepaid charges			167				156
Trade accounts receivable and other				€4,531				€4,528

16.3.	Trade accounts payable and other as of December 31, 2005 and December 31, 2004

			December 31,				December 31,
			2005				2004
			(In millions of euros)
Trade accounts payable				€4,766				€3,326
Other				3,971				4,861
Including
	VAT			588				584
	Social costs and other taxes			408				313
Trade accounts payable and other				€8,737				€8,187

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16.4.	Other non-current liabilities as of December 31, 2005 and December 31, 2004

						December 31,				December 31,
		Note				2005				2004
						(In millions of euros)
Advance lease payments in respect of Qualified Technological Equipment operations			15.4			€	840			€	906
Net cost of dividends on the VUE Class B preferred interests			2.4				—				244
Non current content liabilities			10.2				255				286
Accrued compensation and other benefits							—				95
Other							247				424
						€	1,342			€	1,955

Note 17.	Cash and cash equivalents as of December 31, 2005 and December 31, 2004

		December 31,				December 31,
		2005				2004
		(In millions of euros)
Cash		€	517			€	1,140
Cash equivalents			2,385				2,019
Cash and cash equivalents		€	2,902			€	3,159

Note 18.	Information on the share capital as of December 31, 2005 and December 31, 2004

18.1.	Number of common shares and voting rights outstanding as of December 31, 2005 and December 31, 2004

		December 31,				December 31,
		2005				2004
		(In thousands)
Common shares outstanding (nominal value: €5.5 per share)			1,153,477				1,072,624
Treasury shares(a)			(2,499	)			(570	)
Voting rights			1,150,978				1,072,054

(a)	Treasury shares were mainly held to hedge certain stock purchase options granted to management and employees. In 2005, Vivendi acquired a net amount of approximately 1.9 million shares for €44 million, which was recorded against equity.

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18.2.	Compound financial instruments as of December 31, 2005 and December 31, 2004

			ORA (November 25, 2005)(a)								OCEANE (January 2, 2004)(b)
			December 31,				December 31,				December 31,				December 31,
			2005				2004				2005				2004
			(In millions of euros)
Statement of financial position
	Capital stock		€	433			€	—			€	—			€	—
	Additional paid-in capital			567				1,000				204				204
	Reserves (prepaid interest)			(156	)			(156	)			—				—
	Reserves (equity component)			—				—				(204	)			(204	)
	Equity			844				844				—				—
	Current portion of long term borrowings			—				—				—				—
	Borrowings and other financial liabilities		€	—			€	—			€	—			€	—

(a)	In November 2002, Vivendi issued 78,678,206 notes for a total amount of €1 billion. The Bonds due November 25, 2005 were redeemable for new Vivendi shares at a rate of one share for one note. The notes bore interest at 8.25% per annum. Due to the advance payment of interest in full on issue (i.e. €233 million), the liability component is nil. As such, the nominal value (€1,000 million) was recognized in additional paid-in capital, and residual issue costs and prepaid interest were deducted from reserves. The notes were redeemed on November 25, 2005 and resulted in the issuance of 78,672,415 Vivendi shares. The related share capital increase amounted to €433 million.
(b)	In January 1999, Vivendi issued bonds convertible or exchangeable for new or existing Vivendi shares.

18.3.	2005 Dividends

Note 19.	Share-based compensation for the years ended December 31, 2005 and 2004

19.1.	Impact on earnings before minority interests of share-based compensation for the years ended December 31, 2005 and 2004

						Year Ended
						December 31,
		Note				2005				2004
						(In millions
						of euros)
Employee stock option plans			19.2			€	48			€	91
Vivendi employee stock purchase plans			19.3				7				2
Maroc Telecom employee stock purchase plans			19.3				—				4
Share-based compensation(a)						€	55			€	97

(a)	Includes the compensation allocated to employees of discontinued operations for €5 million and €33 million in 2005 and 2004, respectively.

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19.2.	Employee stock option plans

19.2.1	Stock option plans

		Subscription plans
		2005								2004				2003												2002
		June 28				April 26				May 21				December 9				May 28				January 29				October 10
Grant date
Options strike price		€	25.13			€	23.64			€	20.67			€	19.07			€	14.40			€	15.90			€	12.10
Maturity (in years)			10				10				10				10				10				8				8
Number of options initially granted			39,000				9,071,000				9,279,600				1,015,000				11,299,000				1,660,000				3,619,300
Share market price at grant date		€	25.50			€	23.72			€	20.15			€	18.85			€	15.67			€	15.20			€	10.98
Expected dividend		€	0.80			€	0.80			€	0.60			€	0.60			€	0.60			€	0.60				—
Expected volatility(*)			17.00	%			17.00	%			20.00	%			20.00	%			20.00	%			20.00	%			60.00	%
Risk-free interest rate			3.17	%			3.48	%			4.35	%			3.90	%			3.90	%			3.90	%			5.00	%
Expected dividend yield			3.14	%			3.37	%			2.98	%			3.18	%			3.83	%			3.95	%			0.00	%
Fair value of the granted options		€	4.76			€	4.33			€	4.78			€	4.21			€	3.65			€	2.64			€	7.25

		Purchase plans
		2002																2001
		May 29				April 24				March 20				January 24				October 10				October 10				April 24				March 9
Grant date
Options strike price		€	33.75			€	37.83			€	43.35			€	53.38			€	57.18			€	46.87			€	73.42			€	67.83
Maturity (in years)			8				8				8				8				8				8				8				8
Number of options initially granted			95,000				604,000				200,000				1,456,392				665,210				14,632,293				11,000				129,500
Share market price at grant date		€	33.75			€	38.90			€	44.75			€	53.60			€	48.20			€	48.20			€	75.50			€	69.75
Expected dividend			—				—				—				—			€	0.55			€	0.55			€	0.55			€	0.55
Expected volatility(*)			60.00	%			60.00	%			60.00	%			60.00	%			35.00	%			35.00	%			35.00	%			35.00	%
Risk-free interest rate			5.00	%			5.00	%			5.00	%			5.00	%			4.90	%			4.90	%			4.90	%			4.90	%
Expected dividend yield			0.00	%			0.00	%			0.00	%			0.00	%			1.14	%			1.14	%			0.73	%			0.79	%
Fair value of the granted options		€	22.87			€	26.57			€	16.38			€	36.36			€	18.69			€	21.51			€	35.24			€	32.34

(*)

Volatility is a measure of the amount by which the return on a financial asset is expected to vary over time. The Vivendi shares were subject to extremely high volatility prior to the valuation period of the stock option plans (1999 — 2002). As a result, Vivendi has limited relevant statistical data to build estimates of future volatility for the purpose of valuing its stock option plans in accordance with IFRS 2. Vivendi has therefore valued its stock options using the implicit volatility rate for short-term securities.

	•	Rate applicable in year 1 of the plan: 100% of the first tranche (fully vested in the first year), + 50% of the second tranche (vested over 2 years) + 33.33% of the third tranche (vested over 3 years), that is 61.11%;

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	•	Rate applicable in year 2 of the plan: second half of the second tranche (vested over 2 years) + 33.33% of the third tranche (vested over 3 years), that is 27.78%; and
	•	Rate applicable in year 3 of the plan: final third of the third tranche (vested over 3 years), that is 11.11%.

	Other plans

19.2.2	Information on outstanding plans

	Transactions involving stock options and stock options exercisable for ADSs since January 1, 2004 are summarized as follows:

			Stock Options on Ordinary Shares								Stock Options on ADSs
							Weighted Average				Number of
			Number of				Strike Price of				Stock Options				Weighted Average
			Stock Options				Stock Options				on ADSs				Strike Price of
			Outstanding				Outstanding				Outstanding				ADS Options
							(in euros)								(in US dollars)
Balance as of January 1, 2004				57,822,758			€	48.9				44,550,119				$48.4
	Granted			8,267,200				20.7				1,684,280				36.2
	Adjusted			—				—				177				64.4
	Exercised			(1,674,669	)			19.6				(2,929,000	)			18.7
	Forfeited			(4,741,765	)			36.5				(1,057,479	)			36.8
	Cancelled			(1,488,466	)			56.2				(1,930,571	)			64.1
Balance as of December 31, 2004				58,185,058			€	46.5				40,317,526				$49.6
	Granted			7,284,600				23.6				1,825,400				28.9
	Exercised			(465,656	)			13.7				(965,077	)			18.1
	Forfeited			(1,222,167	)			85.3				(2,414,192	)			38.7
	Cancelled			(1,083,840	)			30.0				(860,046	)			38.1
Balance as of December 31, 2005				62,697,995			€	44.7				37,903,611				$50.3
Exercisable as of December 31, 2005				40,910,022	(a)		€	53.3				33,789,143	(a)			$51.6

(a)	The number of stock options that are exercisable is calculated on the basis of purchase and subscription plans outstanding as of December 31, 2005, excluding exceptional performance-related plans.

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19.3.	Employee stock purchase plans

											Weighted
											Average
			Number				Weighted Average				Remaining				Number				Weighted Average
Range of Strike Prices			Outstanding				Strike Price				Contractual Life				Vested				Strike Price
							(in euros)				(in years)								(in euros)
Stock options on ordinary shares in euros
	Under €20			13,942,324			€	14.3				6.7				10,659,484			€	14.2
	€20 — €30			15,019,259				22.1				8.8				3,659,707				21.0
	€30 — €40			368,724				35.9				1.6				368,724				35.9
	€40 — €50			9,168,394				47.4				3.0				9,168,394				47.4
	€50 — €60			771,926				56.1				3.7				566,258				57.1
	€60 — €70			5,431,688				62.3				1.5				5,431,688				62.3
	€70 — €80			12,619,354				74.0				2.2				12,619,354				74.0
	€80 and more			5,376,326				94.6				2.7				5,376,326				94.6
				62,697,995			€	44.7				4.9				47,849,935			€	52.0
Stock options on ADSs in US dollars				ADSs				(in US dollars)				(in years)								(in US dollars)
	Under $20			2,047,534				$14.9				5.6				1,909,179				$14.8
	$20 — $30			2,450,195				24.8				6.8				1,798,352				25.0
	$30 — $40			2,405,379				31.7				8.0				637,979				34.7
	$40 — $50			15,086,715				44.1				2.5				15,086,715				44.1
	$50 — $60			3,130,177				57.9				3.0				3,130,177				57.9
	$60 — $70			6,964,478				65.7				3.0				6,964,478				65.7
	$70 — $80			5,803,492				74.0				4.0				5,803,492				74.0
	$80 and more			15,641				196.0				4.1				15,641				196.0
				37,903,611				$50.3				3.7				35,346,013				$51.8

		Year Ended
		December 31,
		2005				2004
Subscription price		€	19.46			€	18.20
Share price at grant date		€	24.21			€	20.90
Number of shares subscribed(a)			1,399,097				831,171
Amount subscribed (in millions of euros)			27				15

(a)	Including 286,675 and 89,951 shares subscribed by Cegetel SAS employees in 2005 and 2004, respectively. The related expenses, i.e. €1.4 million in 2005 and €0.2 million in 2004, were recorded in earnings from discontinued operations.

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Note 20.	Provisions as of December 31, 2005 and December 31, 2004

						Balance as of												Reversal and				Changes in scope				Balance as of
						December 31,												changes in				of consolidation				December 31,
		Note				2004				Addition				Utilization				estimates				and other				2005
						(In millions of euros)
Employee benefit plans			21			€	691			€	47			€	(124	)		€	(10	)		€	120			€	724
Financial risks							103				18				(6	)			—				(61	)			54
Litigations			30				368				84				(126	)			(51	)			6				281
Restructuring costs			22				124				27				(81	)			(3	)			6				73
Warranties and customer care							56				2				(20	)			(11	)			13				40
Other							576				249				(207	)			(57	)			65				626
Provisions						€	1,918			€	427			€	(564	)		€	(132	)		€	149			€	1,798
Deduction of current provisions							(357	)			(214	)			217				55				(279	)			(578	)
Non current provisions						€	1,561			€	213			€	(347	)		€	(77	)		€	(130	)		€	1,220

Note 21.	Employee benefits as of December 31, 2005 and December 31, 2004

21.1.	Analysis of the expense related to employee benefit plans for the years ended December 31, 2005 and 2004

							Year Ended
							December 31,
			Note				2005				2004
							(In millions
							of euros)
Retirement pensions through defined contribution plans							€	69			€	34
Retirement pensions through defined benefit plans				21.2				23				14
	including pension benefits							23				13
	including postretirement benefits							—				1
Employee benefit plans							€	92			€	48

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21.2.	Retirement pensions through defined benefit plans

21.2.1	Assumptions used in the evaluation and sensitivity analysis

										Postretirement
		Pension Benefits								Benefits
		2005				2004				2005				2004
Discount rate			4.9%				5.1%				5.2%				5.3%
Expected return on plan assets			4.7%				6.4%				na*				na*
Rate of compensation increase			3.8%				3.8%				3.4%				3.6%
Expected residual active life (in years)			13.2				12.9				11.0				11.7

*	na: not applicable.

		US								UK								Germany								France
		2005				2004				2005				2004				2005				2004				2005				2004
Discount rate			5.3%				5.5%				4.9%				5.3%				4.2%				4.4%				4.2%				4.5%
Expected return on plan assets			5.5%				7.5%				4.5%				6.0%				na*				na*				3.9%				5.0%
Rate of compensation increase			4.0%				4.0%				4.3%				4.3%				3.5%				3.5%				3.4%				3.3%

*	na: not applicable.

		US								Canada
		2005				2004				2005				2004
Discount rate			5.3%				5.3%				5.0%				5.5%
Expected return on plan assets			na*				na*				na*				na*
Rate of compensation increase			4.0%				4.0%				na*				na*

*	na: not applicable.

		Minimum				Maximum
Equity securities			33%				52%
Real estate			0%				1%
Debt securities			42%				62%
Cash			6%				7%

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		December 31,
		2005				2004
Equity securities			43.0%				46.4%
Real estate			0.4%				0.3%
Debt securities			50.5%				47.0%
Cash			6.1%				6.3%
Total			100.0%				100.0%

21.2.2	Analysis of the expense recorded for the years ended December 31, 2005 and 2004

		Pension								Postretirement
		Benefits								Benefits
		Year Ended December 31,
		2005				2004				2005				2004
		(In millions of euros)
Current service cost		€	15			€	27			€	—			€	1
Amortization of actuarial (gains) losses			1				6				—				—
Amortization of past service costs			2				1				—				—
Effect of curtailments/ settlements			5				(21	)			—				—
Adjustments related to asset cap			—				—				—				—
Impact on selling, administrative and general expenses			23				13				—				1
Interest cost			64				72				11				11
Expected return on plan assets			(40	)			(46	)			—				—
Impact on other financial charges and income			24				26				11				11
Net benefit cost		€	47			€	39			€	11			€	12

21.2.3	Analysis of net benefit obligations with respect to pensions and postretirement benefits as of December 31, 2005 and December 31, 2004

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										Postretirement
		Pension Benefits								Benefits
		2005				2004				2005				2004
		(In millions of euros)
Changes in benefit obligation
Benefit obligation at the beginning of the year		€	1,276			€	1,439			€	201			€	206
Current service cost			15				27				—				1
Interest cost			64				72				11				11
Contributions by plan participants			1				1				1				—
Business combinations			—				—				—				9
Divestitures			(4	)			—				—				—
Curtailments			(4	)			(22	)			(1	)			—
Settlements			(64	)			(126	)			—				—
Transfers			—				2				—				—
Plan amendments			7				1				(18	)			—
Experience differential			(4	)			(4	)			(4	)			(3	)
Actuarial (gains) losses related to changes in actuarial assumptions			65				62				—				11
Benefits paid			(90	)			(132	)			(19	)			(16	)
Special termination benefits			5				11				—				—
Other (foreign currency translation adjustments)			109				(55	)			29				(18	)
Benefit obligation at the end of the year		€	1,376			€	1,276			€	200			€	201
Including wholly or partly funded benefits			1,049				921				—				—
Including wholly unfunded benefits(a)			327				355				200				201
Changes in fair value of plan assets
Fair value of plan assets at the beginning of the year			685				769				—				—
Expected return on plan assets(b)			40				46				—				—
Actuarial (gains) losses related to changes in actuarial assumptions(b)			9				6				—				—
Contributions by employers			152				131				18				16
Contributions by plan participants			1				1				1				—
Business combinations			—				—				—				—
Divestitures			—				—				—				—
Settlements			(59	)			(107	)			—				—
Transfers			3				1				—				—
Benefits paid			(90	)			(132	)			(19	)			(16	)
Other (foreign currency translation adjustments)			65				(30	)			—				—
Fair value of plan assets at the end of the year		€	806			€	685			€	—			€	—
Funded status
Underfunded obligation			(570	)			(591	)			(200	)			(201	)
Unrecognized actuarial (gains) losses			92				50				(16	)			7
Unrecognized past service cost			5				—				—				—
Net (provision) asset recorded in the statement of financial position		€	(473	)		€	(541	)		€	(216	)		€	(194	)
Including asset			35				28				—				—
Including provisions for employee benefit plans			(508	)			(569	)			(216	)			(194	)

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(a)	Certain pension plans, in accordance with the laws and practices, are not covered by pension funds. As of December 31, 2005, they principally comprise additional pension plans in the US and pension plans in Germany.
(b)	The sum of the expected return on plan assets with actuarial (gains) losses related to changes in actuarial assumptions corresponds to the actual return on plan assets.

										Postretirement
		Pension Benefits								Benefits
		December 31,
		2005				2004				2005				2004
		(In millions of euros)
Benefit obligations
US companies		€	633			€	567			€	177			€	183
UK companies			457				400				—				—
French companies			69				62				—				—
Other			217				247				23				18
		€	1,376			€	1,276			€	200			€	201
Fair value of plan assets
US companies			341				292				—				—
UK companies			337				289				—				—
French companies			40				32				—				—
Other			88				72				—				—
		€	806			€	685			€	—			€	—

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			December 31,
			2005				2004
			(In millions
			of euros)
U.S. companies
	Accumulated benefit obligation excluding wage increase		€	632			€	566
	Projected benefit obligation			633				567
	Plan assets at fair value			341				292
U.K. companies
	Accumulated benefit obligation excluding wage increase		€	421			€	299
	Projected benefit obligation			457				303
	Plan assets at fair value			337				218
French companies
	Accumulated benefit obligation excluding wage increase		€	26			€	34
	Projected benefit obligation			36				43
	Plan assets at fair value			5				11
Other companies
	Accumulated benefit obligation excluding wage increase		€	147			€	188
	Projected benefit obligation			152				196
	Plan assets at fair value			—				1
Total
	Accumulated benefit obligation excluding wage increase		€	1,226			€	1,087
	Projected benefit obligation		€	1,278			€	1,109
	Plan assets at fair value		€	683			€	522

21.2.4	Additional information on pension benefits in France

		Equity				Real				Debt
		securities				estate				securities				Total
Corporate Supplementary Plan			11	%			5	%			84	%			100	%
Corporate Management Supplementary Plan			11	%			5	%			84	%			100	%
SFR Supplementary Plan			11	%			5	%			84	%			100	%
Canal+ Group IDR* Plan			16	%			11	%			73	%			100	%

*	IDR (Indemnités de départ en retraite): Indemnities payable on retirement.

21.2.5	Benefits estimation and future payments

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		Pension				Postretirement
		Benefits				Benefits
		(In millions of euros)
2006		€	140			€	9
2007			121				9
2008			78				9
2009			69				9
2010			68				9
2011 — 2015			358				38

Note 22.	Restructuring provisions as of December 31, 2005, December 31, 2004 and January 1, 2004

			Universal
			Music				Vivendi				Canal+								Maroc				Holding &				Non core				Total
			Group				Games				Group				SFR				Telecom				Corporate				operations				Vivendi
			(In millions of euros)
Employee termination reserves
	Balance as of January 1, 2004		€	67			€	12			€	32			€	—			€	2			€	18			€	—			€	131
	Changes in scope of consolidation and purchase accounting adjustments			(2	)			(2	)			(2	)			—				(2	)			(2	)			—				(10	)
	Additions			29				23				3				—				—				1				—				56
	Utilization			(54	)			(18	)			(20	)			—				—				(8	)			—				(100	)
	Reversals			—				—				(6	)			—				—				—				—				(6	)
	Balance as of December 31, 2004		€	40			€	15			€	7			€	—			€	—			€	9			€	—			€	71
	Changes in scope of consolidation and purchase accounting adjustments			3				(2	)			2				—				—				—				—				3
	Additions			24				1				—				—				—				1				—				26
	Utilization			(33	)			(10	)			(6	)			—				—				(4	)			—				(53	)
	Reversals			—				—				—				—				—				—				—				—
								—				—				—				—				—				—				—
	Balance as of December 31, 2005		€	34			€	4			€	3			€	—			€	—			€	6			€	—			€	47

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			Universal
			Music				Vivendi				Canal+								Maroc				Holding &				Non core				Total
			Group				Games				Group				SFR				Telecom				Corporate				operations				Vivendi
			(In millions of euros)
Other restructuring reserves
	Balance as of January 1, 2004			—				—				6				—				—				24				6				36
	Changes in scope of consolidation and purchase accounting adjustments			—				(3	)			(1	)			—				—				(2	)			(6	)			(12	)
	Additions			—				12				1				8				14				10				—				45
	Utilization			—				(2	)			(3	)			—				—				(11	)			—				(16	)
	Reversals			—				—				—				—				—				—				—				—
	Balance as of December 31, 2004		€	—			€	7			€	3			€	8			€	14			€	21			€	—			€	53
	Changes in scope of consolidation and purchase accounting adjustments			—				4				—				(8	)			—				1				6				3
	Additions			—				—				—				—				1				—				—				1
	Utilization			—				(4	)			(1	)			—				(14	)			(4	)			(5	)			(28	)
	Reversals			—				—				—				—				—				(3	)			—				(3	)
	Balance as of December 31, 2005		€	—			€	7			€	2			€	—			€	1			€	15			€	1			€	26
Total restructuring reserves
	Balance as of December 31, 2005		€	34			€	11			€	5			€	—			€	1			€	21			€	1			€	73

	Universal Music Group

	Vivendi Games

	The Canal+ Group

	SFR

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	Maroc Telecom

	Holding & Corporate

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Note 23.	Long-term borrowings and other financial liabilities as of December 31, 2005 and December 31, 2004

23.1.	Analysis of long-term borrowings and other financial liabilities as of December 31, 2005 and December 31, 2004

											Effective interest								December 31,				December 31,
			Note				Nominal interest rate (%)				rate				Maturity				2005				2004
							(In millions of euros)
Promissory note to USI								Libor USD 3 months +0.40%				na				January 2005			€	—			€	573
Finance leases								—				—				2006 — 2026				362				440
	Asset-backed borrowings(a)																		€	362			€	1,013
Notes
	€700 million notes (July 2004)(b)							Euribor 3 months +0.55%				2.28%				July 2007				700				700
	€630 million notes (April 2005)(b)							3.63%				3.63%				April 2010				630				—
	€600 million notes (February 2005)(b)							3.88%				3.94%				February 2012				600				—
	€600 million notes (July 2005) — SFR(b)							3.40%				3.43%				July 2012				600				—
	High yield notes (April 2003)							9.25%-9.50%				10.20%-10.50%				January 2005				—				38
	High yield notes (July 2003)							6.25%				6.51%-7.04%				January 2005				—				356
	Bonds exchangeable for Sogecable shares(c)							1.75%				6.48%				October 2008				242				605
	Bonds exchangeable for Vinci shares							1.00%				5.76%				March 2005				—				527
	Bonds exchangeable for Veolia Environnement shares							2.00%				6.42%				March 2006				—				28
	Other notes(d)							—				—				—				275				590
Facilities
	€1.2 billion revolving credit facility — SFR							Euribor 1 month +0.18%				2.62%				April 2010				550				350
	MAD 6 billion notes — tranche B: 4 billion(e)			2.1				TMP BDT 5 yrs. +1.15%				na*				December 2011				367				—
	Other(d)							—				—				—				169				342
	Unsecured borrowings																		€	4,133			€	3,536
Nominal value of borrowings																			€	4,495			€	4,549
Cumulative effect of amortized cost and split accounting of embedded derivatives								na*				na*				na*				(53	)			(52	)
Borrowings																			€	4,442			€	4,497
Put option granted to SNCF on 35% of the share capital of Cegetel S.A.S				2.2				na*				na*				—				—				304
Put options granted to various third parties by Canal+ Group								na*				na*				—				39				110
Commitments to purchase minority interests																			€	39			€	414
Embedded derivative in bonds exchangeable for Sogecable shares								na*				na*				October 2008				50				165
Embedded derivative in bonds exchangeable for Vinci shares								na*				na*				March 2005				—				78
Other financial derivative instruments								na*				—				—				14				203
Other derivative instruments																			€	64			€	446
Long-term borrowings and other financial liabilities																			€	4,545			€	5,357

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*	na: no interest accrued on other financial liabilities.
(a)	Borrowings are considered secured whenever the creditor(s) is/are backed by a pledge on the borrower’s and/or its guarantors’ assets.
(b)	The notes, listed on the Luxembourg Stock Exchange, were subject to customary pari passu, negative pledge and event of default provisions.
(c)	On October 30, 2003, Vivendi issued 1.75% exchangeable bonds due 2008 for an amount of €605 million. The bonds are exchangeable for common shares of Sogecable SA (a limited liability company incorporated under the laws of the Kingdom of Spain, whose shares are listed on the Madrid Stock Exchange). Interest is payable annually in arrears on October 30 of each year, commencing on October 30, 2004. Each bond is exchangeable at the option of the bondholder at any time, from January 1, 2004 up to the tenth business day preceding the maturity date, into common shares of Sogecable SA at an exchange ratio of one share for one bond, subject to certain adjustments upon the occurrence of certain events. In June 2005, this ratio was increased to 1.0118 share for one bond. Vivendi may at its discretion elect to pay holders exercising their option the cash equivalent in euros of the then market value of the relevant shares. In November and December 2005, Vivendi divested 12.5 million Sogecable shares, at the bondholders’ request, as part of the redemption of €363 million of the bonds exchangeable into Sogecable shares (please refer to Note 15.1 “Changes in available-for-sale securities for the years ended December 31, 2005 and 2004”).
	In addition, Vivendi is entitled, at any time on or after October 30, 2006, at its discretion, to redeem in cash all, but not less than all, of the outstanding bonds, if on 20 out of 30 consecutive trading days, the product of (i) the closing price of a Sogecable share on the Madrid Stock Exchange and (ii) the then applicable exchange ratio equals or exceeds 125% of the sum of the principal amount of one bond (€29.32) plus accrued interest to (but excluding) the date set for redemption. In addition, Vivendi is entitled at any time to redeem in cash all, but not less than all, of the bonds outstanding at a price equal to the principal amount of the bonds plus accrued interest, if any, if less than 10% of the bonds originally issued remain outstanding at that time. Unless previously redeemed, exchanged or purchased and cancelled, the bonds will be redeemed in cash on the maturity date at their principal amount. The bonds, which are listed on the Luxembourg Stock Exchange, are subject to customary pari passu, negative pledge and event of default provisions.

(d)	Additional information on “other notes” and “other”:

		Fixed interest rate												Floating interest rate
		Rate (%)				Maturity				Amount				Rate (%)		Maturity				Amount				Total
		(In millions of euros)
As of December 31, 2005
Other notes			6.50%				January 2009			€	152			Euribor 3 months			2008-2009			€	123			€	275
														-0.27% to Libor
														3 months -0.23%
Other			0%-8.67%				2007-2023				136			Euribor 3 months			>2007				33				169
														+0.215%
Total										€	288									€	156			€	444
As of December 31, 2004
Other notes			6.50%-6.70%				2006-2009			€	457			Euribor 3 months			2006-2009			€	133			€	590
														-0.27% to Euribor
														3 months -0.10%
Other			0%-8.67%				2006-2040				254			Euribor 3 months			2006-2008				88				342
														-0.60% to Euribor
														6 months +0.50%
Total										€	711									€	221			€	932

(e)

These MAD 6 billion notes were issued in connection with the acquisition of a 16% stake in Maroc Telecom on January 4, 2005. They are comprised of two tranches: MAD 2 billion tranche A expiring in December 2006 (please refer to Note 24.1, hereunder) and MAD 4 billion tranche B expiring in December 2011. The interest rate is based on the weighted average rate of the treasury bonds issued by the Kingdom of Morocco.

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23.2.	Currency, maturity and nature of interest rate of the nominal value of borrowings as of December 31, 2005 and December 31, 2004

			2005
			December 31,
											2004
			)
			(In millions of euros
Currency:
	Euro — EUR		€	4,025				89.5	%		€	3,731				82.0	%
	US dollar — USD			92				2.1	%			810				17.8	%
	Dirham — MAD			367				8.2	%			—				—
	Other			11				0.2	%			8				0.2	%
	Total		€	4,495				100.0	%		€	4,549				100.0	%
Maturity:
	Due between one and two years		€	778				17.3	%		€	957				21.0	%
	Due between two and three years			375				8.4	%			1,347				29.6	%
	Due between three and four years			307				6.8	%			1,150				25.3	%
	Due between four and five years			1,197				26.6	%			639				14.1	%
	Due after five years			1,838				40.9	%			456				10.0	%
	Total		€	4,495				100.0	%		€	4,549				100.0	%
Nature of interest rate:
	Fixed interest rate		€	2,681				59.6	%		€	2,613				57.4	%
	Floating interest rate			1,814				40.4	%			1,936				42.6	%
	Total		€	4,495				100.0	%		€	4,549				100.0	%

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Note 24.	Short-term borrowings and other financial liabilities as of December 31, 2005 and December 31, 2004

24.1.	Analysis of short-term borrowings and other financial liabilities as of December 31, 2005 and December 31, 2004

											December 31,				December 31,
							Nominal interest rate (%)				2005				2004
			Note
											(In millions of euros)
Securitization programs
	SFR(a)							—				€—				€422
	Cegetel SAS			2.2				—				—				65
Other								—				1				2
	Asset-backed borrowings(b)											€1				€489
Treasury Bills
	Vivendi SA							Eonia + 0.05%				173				274
	SFR							Eonia + 0.03%				957				325
Current portion of long-term borrowings
	MAD 6 billion notes — tranche A: 2 billion			23.1				TMP BDT 52 wks. +1.15%				184				—
	Other notes(c)							—				342				152
	Other borrowings(c)							—				68				31
Other(c)								—				391				473
	Unsecured borrowings											€2,115				€1,255
Nominal value of borrowings												€2,116				€1,744
Cumulative effect of amortized cost and split accounting of embedded derivatives								na*				9				(22	)
Borrowings												€2,125				€1,722
Put option granted to SNCF on 35% of the share capital of Cegetel SAS				2.2				na*				—				—
Commitment to purchase 16% of the share capital of Maroc Telecom from the Kingdom of Morocco				2.1				na*				—				1,100
Put options granted to various third parties by Canal+ Group								na*				69				3
Commitments to purchase minority interests												€69				€1,103
Other financial derivative instruments												€21				€17
Short-term borrowings and other financial liabilities												€2,215				€2,842

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(a)	This five-year receivable securitization contract entered into on May 11, 2004 by SFR with a financial institution was unwound in November 2005. It amounted to €350 million, net of subordinated deposits (cash collaterals) established as a guarantee (recorded as cash and cash equivalents). The financings bore interest at a rate corresponding to the issue rate of treasury bills issued through the securitization vehicle or to EURIBOR, plus the fees customary for this type of transaction (subrogation commitment and agent fees).
(b)	Borrowings are considered secured whenever the creditor(s) is/are backed by a pledge on the borrower’s and/or its guarantors’ assets.

Fixed interest rate

Floating interest rate

Rate (%)

Amount

Rate (%)

Amount

Total

(In millions of euros)

As of December 31, 2005

0%-9%

386

Euribor 3 months

415

€

801

-0.10% to Libor USD

6 months +0.50%

As of December 31, 2004

0%-9%

489

Euribor 3 months

167

€

656

+0.16% to Euribor

1 month +0.60%

24.2.	Currency of the nominal value of borrowings as of December 31, 2005 and December 31, 2004

		December 31,
		2005								2004
		(In millions of euros)
Euro — EUR			€1,810				85.5%				€1,713				98.2%
US dollar — USD			15				0.7%				14				0.8%
Dirham — MAD			222				10.5%				—				—
Other			69				3.3%				17				1.0%
Total			€2,116				100.0%				€1,744				100.0%

Note 25.	Fair value of financial instruments as of December 31, 2005 and December 31, 2004

•	Financial assets, which comprise any of the following assets:

	—	Cash;
	—	Contractual rights to receive cash or another financial asset;
	—	Contractual rights to exchange a financial instrument under conditions that are potentially favorable; and
	—	Equity instruments of another entity.

•	Financial liabilities, which comprise any of the following liabilities:

	—	Contractual obligations to deliver cash or another financial asset; and
	—	Contractual obligations to exchange a financial instrument under conditions that are potentially unfavorable.

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	•	Equity instruments of the Group (including equity derivative instruments).

								December 31,
								2005								2004
								Carrying								Carrying
				Note				Value				Fair Value				Value				Fair Value
								(In millions of euros)
Financial assets
	Financial assets at fair value				15			€	1,826			€	1,826			€	2,116			€	2,116
	Financial assets at cost or at amortized cost				15				2,071				2,071				1,833				1,833
	Trade accounts receivable and other				16				4,531				4,531				4,528				4,528
	Cash and cash equivalents				17				2,902				2,902				3,159				3,159
Financial liabilities
	Borrowings and other financial liabilities				23&24			€	6,760			€	6,998			€	8,199			€	8,320
	including
		Long term borrowings			23				4,442				4,680				4,497				4,618
		Short term borrowings			24				2,125				2,125				1,722				1,722
		Commitments to purchase minority interests			23&24				108				108				1,517				1,517
		Other derivative instruments			23&24				85				85				463				463
	Other non current liabilities				16				1,342				1,342				1,955				1,955
	Trade accounts payable and other				16				8,737				8,737				8,187				8,187

Note 26.	Risk management and financial derivative instruments as of December 31, 2005 and December 31, 2004

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							December 31, 2005								December 31, 2004
							Derivative				Derivative				Derivative				Derivative
							financial				financial				financial				financial
							instruments as				instruments as				instruments as				instruments as
			Note				assets				liabilities				assets				liabilities
							(In millions of euros)
Interest rate risk managements
	Pay-fixed interest rate swaps						€	—			€	3			€	—			€	169	(a)
	Pay-floating interest rate swaps							10				—				42				—
	Interest rate swaps options							—				—				—				—
Foreign currency risk management
	Currency swaps							13				19				32				15
	Forward contracts							—				—				—				—
Equity market risk management
	Swaps indexed on Vivendi shares							1				5				1				6
	Swaps indexed on other shares							—				1				—				3
	Vivendi call options							—				—				—				—
	Collar option on Veolia Environnement shares			15.2				—				—				93				—
	Veolia Environnement warrants							2				—				2				—
	Call options on Vinci shares hedging the exchangeable bonds			15.2				—				—				72				—
Other derivative instruments
	Embedded derivative in bonds exchangeable for Sogecable shares(b)			23.1				—				50				—				165
	Other embedded derivatives on borrowings							—				5				—				82
	Other							3				3				15				22
Total							€	29			€	86			€	257			€	462
Deduction of current derivative financial instruments								(13	)			(22	)			(132	)			(17	)
Non current derivative financial instruments							€	16			€	64			€	125			€	445

(a)	As of December 31, 2002, following the implementation of the refinancing plan during the second half of 2002, the unsettled portion of the interest rate swap portfolio was no longer backed by underlying interests. As of December 31, 2004, due to changes in interest rates and the settlement of part of this portfolio, the interest rate swap portfolio was valued at approximately €162 million. The remainder of the portfolio was settled in March 2005.
(b)	As of December 31, 2005, Vivendi held 8.3 million Sogecable shares with a carrying amount of €282 million, to hedge residual outstanding bonds exchangeable for shares (please refer to Note 15.1 “Changes in available-for-sale securities during the years ended December 31, 2005 and 2004”).

26.1.	Interest rate risk management

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				December 31,
				2005				2004
				(In millions
				of euros)
Pay-fixed interest rate swaps
	Notional amount of indebtedness			€	566			€	2,356
		Average interest rate paid			3.56	%			4.92	%
		Average interest rate received			2.58	%			2.19	%
	Maturity:
		Due within one year			66				—
		Due between one and two years			500				92
		Due between two and three years			—				457
		Due between three and four years			—				1,197
		Due between four and five years			—				610
		Due after five years			—				—
Pay-floating interest rate swaps
	Notional amount of indebtedness				280				341
		Average interest rate paid			2.43	%			2.34	%
		Average interest rate received			3.28	%			4.12	%
	Maturity:
		Due within one year			—				2
		Due between one and two years			250				—
		Due between two and three years			30				250
		Due between three and four years			—				31
		Due between four and five years			—				—
		Due after five years			—				58
Interest rate swaps options
	Notional amount of indebtedness				—				61
	Strike price				—				5.42	%
	Maturity:
		Due between two and four years			—				61
Interest rate caps(a)
	Notional amount of indebtedness				150				—
		Guarantee rate bought			3.33	%			—
	Maturity:
		Due between one and two years			150				—

(a)	In 2007, interest rate caps will be converted into pay-fixed interest rate swaps expiring in 2011.

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		Maturity
										Due between				Due between				Due between				Due between
						Due within				one and two				two and				three and				four and five				Due after
		Total				one year(b)				years				three years				four years				years				five years
Redemption value of borrowings including microhedging instruments		€	6,611			€	3,930			€	48			€	264			€	250			€	648			€	1,471
Cash and cash equivalents			(2,902	)			(2,902	)			—				—				—				—				—
Net balance before interest rate risk management			3,709				1,028				48				264				250				648				1,471
Notional amount of swap contracts			—				(220	)			250				(30	)			—				—				—
Net balance after interest rate risk management		€	3,709			€	808			€	298			€	234			€	250			€	648			€	1,471

(b)	Including floating-rate borrowings.

26.2.	Foreign currency risk management

	•	Vivendi is the sole counter-party for foreign currency transactions within the Group, subject to regulatory or operational restrictions.
	•	All foreign currency hedging transactions relate, in amount and by maturity, to an identified economic underlying item.
	•	All identified exposures are hedged at a minimum of 80% for forecasted transactions exposures and 100% for firm commitment contracts.

26.2.1	Sensitivity of operating indicators and indebtedness to the US dollar and the dirham

		USD																MAD
Average exchange rate used over the year 2005		1.2570																11.05
Change assumptions			+5	%			-5	%			+10	%			-10	%			+5	%			-5	%			+10	%			-10	%
Revenues			-0.6	%			0.6	%			-1.3	%			1.3	%			-0.4	%			0.5	%			-0.8	%			1.0	%
Earnings from operations			-0.1	%			0.1	%			-0.1	%			0.1	%			-0.9	%			1.0	%			-1.8	%			2.2	%
Net cash provided by operating activities			-1.4	%			1.4	%			-2.7	%			2.9	%			-1.0	%			1.1	%			-1.9	%			2.3	%

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		USD																MAD
Exchange rate used as of December 31, 2005		1.1849																10.89
Change assumptions			+5	%			-5	%			+10	%			-10	%			+5	%			-5	%			+10	%			-10	%
Redemption value of borrowings			-0.1	%			0.1	%			-0.1	%			0.2	%			-0.4	%			0.5	%			-0.8	%			1.0	%
Cash and cash equivalents			-0.1	%			0.1	%			-0.2	%			0.2	%			-1.1	%			1.2	%			-2.1	%			2.6	%

26.2.2	Characteristics of foreign currency risk management instruments

				December 31,
				2005				2004
				(In millions of
				euros)
Currency swaps:
	Notional amount			€	2,844			€	2,870
		Sales against the euro			2,257				979
		Sales against other currencies			132				701
		Purchases against the euro			444				475
		Purchases against other currencies			11				715
	Maturity:
		Due within one year			2,844				2,870
Forward contracts:
	Notional amount				43				93
		Sales against the euro			—				90
		Sales against other currencies			—				—
		Purchases against the euro			—				3
		Purchases against other currencies			43				—
	Maturity:
		Due within one year			43				93

26.2.3	Indebtedness after foreign currency risk management

		Total				EUR				USD				MAD				Other
		(In millions of euros)
Redemption value of borrowings		€	6,611			€	5,836			€	107			€	589			€	79
Cash and cash equivalents			(2,902	)			(2,022	)			(54	)			(668	)			(158	)
Net balance before foreign currency risk management			3,709				3,814				53				(79	)			(79	)
Notional amount of swap contracts			—				(1,813	)			1,406				—				407
Net balance after foreign currency risk management		€	3,709			€	2,001			€	1,459			€	(79	)		€	328

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26.2.4	Group net balance sheet positions

		USD				GBP				CAD				JPY				Other
		(In millions of euros)
Assets		€	1,675			€	85			€	433			€	—			€	131
Liabilities			—				—				—				(147	)			(65	)
Net position before management			1,675				85				433				(147	)			66
Derivative financial instruments			(1,733	)			(78	)			(427	)			146				(60	)
Net position after management		€	(58	)		€	7			€	6			€	(1	)		€	6

26.3.	Equity market risk management

26.3.1	Available-for-sale securities

26.3.2	Other investments recognized at cost

26.3.3	Vivendi shares

			December 31,
			2005				2004
Call option purchased on Vivendi shares
	Number of shares			29,824,619				30,877,644
	Vivendi maximum commitment (in millions of euros)			€     2,149				€     2,129
	Expiry			December 2008				December 2008

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				December 31,
				2005				2004
				(In millions
				of euros)
Equity-linked swaps:
	Notional amount			€	132			€	123
	Maturity:
		Due within one year			9				—
		Due between one and two years			—				—
		Due between two and three years			70				—
		Due between three and four years			53				70
		Due between four and five years			—				53
		Due after five years (maximum 8 years)			—				—

26.3.4	Hedges for other commitments and bonds exchangeable for shares

							December 31,
			Note				2005				2004
Call options purchased on Vinci shares(a)
	Number of shares							—				6,817,684
	Vivendi maximum commitment (in millions of euros)							—			€	636
	Maturity							—				March 2006
Collar option on Veolia Environnement shares				15.2
	Number of shares							—				20,321,100
	Vivendi maximum commitment (in millions of euros)							—			€	15
	Maturity							—				December 2007
Veolia Environnement warrants(b)
	Number of warrants							218,255,690				218,255,690
	Vivendi maximum commitment (in millions of euros)						€	1,715			€	1,715
	Maturity							March 2006				March 2006

(a)	These options, purchased in September 2003, enabled Vivendi to deliver Vinci shares to holders of exchangeable bonds on early redemption, during the first quarter of 2005, of the bond issue dated March 2001.
(b)	These warrants, issued in December 2001 through a free attribution to Veolia Environnement shareholders, entitle their holders to subscribe for Veolia Environnement shares at the unit price of €55 based upon a ratio of one share for seven warrants. These warrants would have allowed Vivendi to deliver Veolia Environnement shares at the initial maturity date (March 2006) of the exchangeable bonds issued in March 2001. This bond issue was redeemed in cash in March 2003 and, given the current market price of the Veolia Environnement share, these warrants are not expected to be exercised.

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								December 31,
				Note				2005				2004
Call option sold
	Vinci shares				23.1
		Number of shares							—				6,817,684
		Expiry							—				March 2006
	Sogecable shares				23.1
		Number of shares							8,340,850				20,637,728
		Expiry							October 2008				October 2008

26.4.	Credit and investment concentration risk and counterparty risk

26.5.	Liquidity risk

	•	A €2 billion syndicated bank facility obtained by Vivendi in April 2005. This syndicated credit facility had an initial term of five years, which was extended by one year to April 2011. In February 2007, the term of this facility may be extended for a further year until April 2012. As of February 21, 2006, this syndicated credit facility had not been drawn.
	•	A €1.2 billion syndicated credit line obtained by SFR in July 2004. This credit line was amended in 2005 and is available until April 2010. It may be extended up to one additional year. As of February 21, 2006, €280 million had been drawn from this credit line.
	•	A €450 million syndicated credit line obtained by SFR in November 2005 with a 5-year term which may be extended up to two additional years. As of February 21, 2006, this credit line had not been drawn.

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Note 27.	Consolidated statements of cash flows for the years ended December 31, 2005 and 2004

27.1.	Adjustments

								Year Ended
								December 31,
				Note				2005				2004
								(In millions of
								euros)
Items related to operating activities
Non cash items
	Depreciation and amortization, net
		— content assets						€	241			€	266
		— other intangible assets							414				401
		— property, plant and equipment							870				987
		— other							(165	)			(162	)
	Impairment losses								170				25
	Income from equity affiliates(a)				14				(326	)			(221	)
	Other non cash items from earnings before interest and provision for income taxes								(42	)			(66	)
Interest and other financial charges and income(a)					5				(401	)			(820	)
Provision for income taxes(a)					6				204				292
Earnings from discontinued operations(a)					7				(92	)			(777	)
Items related to investing and financing activities
Proceeds from sales of property, plant, equipment and intangible assets(b)									3				(5	)
Adjustments								€	876			€	(80	)

(a)	As presented in the consolidated statement of earnings.
(b)	Included in other income from ordinary activities as presented in the consolidated statement of earnings.

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27.2.	Cash dividends

			Year Ended
			December 31,
			2005				2004
			(In millions of
			euros)
Dividends received from equity affiliates(a)
	— NBC Universal		€	346			€	357
	— Veolia Environnement			—				45
	— Other			9				2
			€	355			€	404
Dividends received from unconsolidated interests(b)
	— Veolia Environnement		€	15			€	—
	— Other			23				23
			€	38			€	23
Dividends paid by subsidiaries to their minority shareholders(a)
	— SFR		€	(712	)		€	(1,470	)
	— Maroc Telecom (including Mauritel)			(196	)			(303	)
	— Other			(57	)			(59	)
			€	(965	)		€	(1,832	)
Main intercompany dividends not impacting the group cash position
	— SFR		€	902			€	1,854
	— Maroc Telecom		€	202			€	162

(a)	As presented in the consolidated statement of cash flows.
(b)	Included in other income from ordinary activities as presented in the consolidated statement of earnings.

27.3.	Investing and financing activities with no impact on Vivendi’s cash position

		Year Ended
		December 31,
		2005				2004
		(In millions of
		euros)
Redemption of borrowings and other financial liabilities by issuing financial instruments other than cash and cash equivalents		€	363			€	—

Note 28.	Transactions with related parties

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28.1.	Compensation of Directors and Officers

28.1.1	Individual Compensation

28.1.1.1	Compensation of the Chairman and Chief Executive Officer

(1)

The valuation of the benefit arising from the option grants is given for information purposes only. It was calculated according to the “binomial” method used when applying the IFRS 2 standard for the valuation of share-based payments. This theoretical valuation does not necessarily correspond to the gain which might be realized when the shares are sold. The actual gain will depend on the difference between the share price as of the date of exercise of the option and the share price as of the date of the sale of the shares subscribed, pursuant to the exercise of the option.

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		Paid in 2006				Paid in 2005
		pro rata				pro rata				Paid in 2004
Fixed salary			—			€	333,334			€	1,000,008
Bonus for 2005 paid in 2006		€	766,600				—				—
Bonus for 2004 paid in 2005			—			€	2,320,000				—
Bonus for 2003 paid in 2004			—				—			€	2,425,000
Benefits in kind and other			—			€	11,182	*		€	24,555	*
Total		€	766,600			€	2,664,516	**		€	3,449,563

(*)	This amount takes into account employer’s pension contributions in excess of the legal tax-deductible threshold and which have been added to the taxable salary, as well as the benefit in kind of a company car.
(**)	Includes the compensation paid on a pro rata basis for services in his capacity as chairman and chief executive officer, to which a pro rata amount of €666,667 has been added for services in his capacity as chairman of the supervisory board (see below).

28.1.1.2	Compensation of the Chairman of the Supervisory Board

28.1.2	Compensation of the Members of the Supervisory Board and Previous Members of the Board of Directors

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		(in euros — rounded)
Members of the Supervisory Board
Jean-René Fourtou(a)			0
Claude Bébéar			102,416
Gérard Brémond			76,791
Fernando Falcó y Fernández de Córdova			75,500
Sarah Frank			43,500
Paul Fribourg			77,875
Gabriel Hawawini			79,000
Patrick Kron			43,500
Henri Lachmann			107,500
Andrzej Olechowski			43,500
Pierre Rodocanachi			92,500
Karel Van Miert			76,916
Directors up to April 28, 2005
Bertrand Collomb			54,083
Marie-Josée Kravis			61,333
Gerard Kleisterlee			26,375

(a)	Mr. Fourtou waived his rights to directors’ fee payments allocated to members of the board of directors and supervisory board of the Company and its subsidiaries.

28.1.3	Compensation of the Chairman and Members of the Management Board

28.1.3.1	Compensation of the Chairman of the Management Board

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28.1.3.2	Compensation of the Members of the Management Board

		Fixed				Variable portion:
		compensation				2005 bonus paid				Benefits in
Members of the Management Board		in 2005				in 2006				kind(*)				Total 2005
Jean-Bernard Lévy			800,000				1,472,000				195,047	(**)			2,467,047
Abdeslam Ahizoune			512,757				346,958				—				859,715
Jacques Espinasse			460,000				846,400				10,164				1,316,564
Frank Esser			650,000				1,150,500				13,727				1,814,227
Bertrand Meheut			650,000				1,189,500				28,014	(a)			1,867,514
Doug Morris			4,453,144				9,881,733	(b)			127,525	(c)			14,462,402
René Pénisson			460,000				846,400				22,000	(a)			1,328,400

(*)	This amount takes into account employer’s pension contributions in excess of the legal tax-deductible threshold and which have been added to the taxable salary, as well as the benefit in kind for a company car.
(**)	Includes holiday pay for his previous salaried position (€181,595).
(a)	Includes valuation of days of holiday transferred from the time saving account (compte épargne temps) to the pension savings plan.
(b)	Includes the 2006 payment of the 2005 portion of a deferred long-term bonus under the Universal Music Group contract in the amount of €3,977,800.
(c)	Air travel and company car.

	•	Mr. Jean-Bernard Lévy (employment contract, dated August 9, 2002, suspended during his term of office as chairman of the management board): six months fixed and variable salary, regardless of the unexpired term of his notice period;
	•	Mr. Abdeslam Ahizoune (employment contract with Vivendi Group, dated December 2000, as amended on July 8, 2004): 24 months fixed salary and target bonus paid by Vivendi SA and Maroc Telecom, including the legal amount of indemnity payments;
	•	Mr. Jacques Espinasse (employment contract, dated July 12, 2002): 12 months fixed salary and target bonus;
	•	Mr. Frank Esser (employment contract, dated May 22, 2000, as amended on October 4, 2002): 24 months fixed salary and target bonus, in addition to the legal amount of indemnity payments;
	•	Mr. Bertrand Meheut (employment contract, dated September 20, 2002): €2 million, including the legal amount of indemnity payments;
	•	Mr. Doug Morris (employment contract with Universal Music Group dated February 6, 2001, as amended on August 4, 2005 — until termination of his contract as chairman and chief executive officer of Universal Music Group: December 31, 2008): equal to the fixed salary and target bonus to be paid until the termination of the contract (December 31, 2008), in any case, may not be less than one year’s salary; and
	•	Mr. René Pénisson (employment contract, dated September 20, 2002): no contractual severance payment.

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28.1.4	Pension Plans

28.1.5	Compensation of Senior Executives of the Group

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28.2.	Other related parties

28.2.1	Operations entered into the ordinary course of business

							December 31,				December 31,
			Note				2005				2004
							(In millions of euros)
Assets
	Non current content assets			12			€	21			€	—
	Non current financial assets			15				181	(a)			435	(b)
	Inventories			16				21				21
	Trade accounts receivable and other			16				166				175
	Short-term financial assets			15				—				1
Liabilities
	Long-term borrowings and other financial liabilities			23				—				608	(c)
	Trade accounts payable and other			16				251				169
	Short-term borrowings and other financial liabilities			24				12				17
Statement of earnings
	Revenues			4				645				675
	Operating expenses			4				(781	)			(809	)
	Financial income			5				—				46
	Financial charges			5				—				(2	)
							€	(136	)		€	(90	)

(a)	Including notes issued by Neuf Telecom for €180 million.
(b)	Including shareholder advances granted to Elektrim Telekomunikacja by Vivendi and VTI (€379 million, net of provisions, as of December 31, 2004).
(c)	Included the promissory note to USI, a NBCU subsidiary, for €573 million, redeemed on January 28, 2005. Please refer to Note 23 “Long-term borrowings and other financial liabilities as of December 31, 2005 and December 31, 2004”.

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28.2.2	Other transactions

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Note 29.	Contractual obligations and contingent assets and liabilities

	•	Contracts related to operations such as content commitments (please refer to Note 10.3 “Contractual content commitments as of December 31, 2005”), contractual obligations and commercial commitments recorded in the statement of financial position, including finance leases (please refer to Note 12 “Property, plant and equipment as of December 31, 2005 and December 31, 2004”), off-balance sheet operating leases and subleases and off-balance sheet commercial commitments, such as long-term service contracts and purchase or investment commitments;
	•	Commitments related to investments or divestitures such as share purchase or sale commitments, contingent assets and liabilities subsequent to given or received commitments related to the divestiture or acquisition of shares, commitments resulting from shareholders’ agreements and collateral and pledges granted to third parties over Vivendi’s assets;
	•	Contingent assets and liabilities linked to litigations in which Vivendi is either plaintiff or defendant (please refer to Note 30 “Litigations”).

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29.1.	Contractual obligations and commercial commitments recorded in the statement of financial position

							Total as of				Payments due in																								Total as of
							December 31,																												December 31,
							2005				2006				2007				2008				2009				2010				After 2010				2004
			Note
							(In millions of euros)
Items recorded in the Consolidated Statement of Financial Position
Long-term borrowings and other financial liabilities				23			€	4,545			€	—			€	799			€	393			€	308			€	1,209			€	1,836			€	5,357
	including finance leases			12				362				—				40				30				15				16				261				440
Short-term borrowings and other financial liabilities				24				2,215				2,215				—				—				—				—				—				2,842
Total							€	6,760			€	2,215			€	799			€	393			€	308			€	1,209			€	1,836			€	8,199

	—	contractual content commitments (Note 10.3);
	—	employee benefit commitments (Note 21); and
	—	risk management (Note 26).

						Payments due in
		Future minimum
		lease payments				2006				2007				2008				2009				2010				After 2010
						(In millions of euros)
Buildings(a)			€1,475			€	236			€	216			€	209			€	195			€	155			€	464
Other			31				15				11				5				—				—				—
Leases			1,506				251				227				214				195				155				464
Buildings(a)			(57	)			(12	)			(12	)			(13	)			(12	)			(5	)			(3	)
Subleases			(57	)			(12	)			(12	)			(13	)			(12	)			(5	)			(3	)
Total net			€1,449			€	239			€	215			€	201			€	183			€	150			€	461

(a)	Mainly related to offices and technical premises.

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29.3.	Off-balance sheet commercial commitments as of December 31, 2005

						Payments due in
		Future minimum
		payments				2006				2007				2008				2009				2010				After 2010
						(In millions of euros)
Satellite transponders		€	883			€	123			€	130			€	130			€	130			€	86			€	284
Investment commitments(a)			183				179				4				—				—				—				—
Other			45				16				10				10				9				—				—
Given commitments			1,111				318				144				140				139				86				284
Satellite transponders			(47	)			(23	)			(16	)			(7	)			(1	)			—				—
Other			(6	)			(6	)			—				—				—				—				—
Received commitments			(53	)			(29	)			(16	)			(7	)			(1	)			—				—
Total net		€	1,058			€	289			€	128			€	133			€	138			€	86			€	284

(a)	Mainly related to SFR and Maroc Telecom.

29.4.	Other given and received commitments relating to operations

References		Nature of the commitment		Amount of the commitment		Expiry
		Given
		Undrawn bank facilities as of February 21, 2006		€3,370 million (please refer to note 26.5).		2010
1		UMTS license (assigned in August 2001)		1% of revenues earned.		2021
		Obligations related to the permission to use the Consolidated Global Profit System		— Creation of 2,100 jobs within 5 years (561 already created in 2005);		2009
				— Payment of €5 million annually for 5 years (€5 million already paid).		2009
		Individual entitlement to training of French employees		Approximately 441,000 hours as of December 31, 2005		—
2		Various other miscellaneous guarantees given		€211 million		—
		Received
1		Licenses for SFR networks and for the supply of telecommunications services: GSM (March 1991 — March 2006) and UMTS (August 2001 — August 2021)		—		2006/2021
		Various other miscellaneous guarantees received		€72 million		—

	(1) SFR holds licenses for its networks and for the supply of its telecommunications services in France for a period of 15 years for GSM (March 1991-March 2006), and 20 years for UMTS (August

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	2001-August 2021). On the acquisition of the UMTS license, the fixed amount paid, i.e. €619 million, was recorded as an intangible asset (please refer to Note 11 “Other intangible assets as of December 31, 2005 and December 31, 2004”). Since the variable part of the fee (equal to 1% of GSM revenues) cannot reliably be determined, it is recorded as an off-balance sheet commitment. It is recorded as an expense when incurred. The terms for the renewal of the GSM license, which terminated in March 2006, were set by the French telecommunications regulator and the French Ministry of Finance on March 24, 2004. The terms require the payment of a fixed annual fee of €25 million and a variable fee equal to 1% of GSM revenues. The new terms are associated with commitments to extend the network, principally to include zones not currently covered.
	(2) Including a guarantee capped at €21 million that would be reimbursed in approximately 5 years, if it were to be called. In addition, Vivendi grants guarantees in various forms to financial institutions on behalf of its subsidiaries in the pursuit of their operations.

29.5.	Share purchase and sale commitments

References		Nature of the commitment		Amount of the commitment		Expiry
		Given
1		Divestiture of NC Numéricâble (March 2005)		Call options granted on the stake held in Ypso Holding.		2008-2011
		Various other miscellaneous arrangements given		€6 million		—
		Received
2		NBC-Universal transaction (May 2004) and amendments in June 2005		— Ability to sell NBC Universal shares on the market beginning in 2007 (up to $3 billion in 2007 and $4 billion each year thereafter).		—
				— Put option to General Electric under certain circumstances.		—
				— General Electric call option exercisable from May 11, 2010 for a 12-month period.		—

	(1) As part of the divestiture of NC Numéricâble in March 2005, the Canal+ Group granted two call options to Cinven and Altice, at a pre-defined price, on its stake in Ypso Holding (the holding company of the new group). The first option relates to half of the Canal+ Group’s stake while the second option relates to the Canal+ Group’s remaining stake. These options can be exercised during one year starting March 31, 2008 and March 31, 2010, respectively (please refer to Note 29.6 hereof). Please refer to Note 32.3 “Divestiture of the residual 20% stake in Ypso — January 31, 2006.”
	(2) As part of the NBC-Universal transaction which was completed in May 2004, Vivendi received certain liquidity commitments and guarantees from General Electric (GE). As part of the agreements with GE, Vivendi is entitled to sell its stake in NBCU under mechanisms providing for exit conditions at fair market value. In connection with the unwinding of IACI’s interest in VUE on June 7, 2005, the dates initially set for Vivendi’s liquidity rights in the original NBCU agreement were deferred by one year, including the date GE may exercise its call right on Vivendi’s equity interest. As a result, Vivendi will be able to monetize its equity interest in NBCU beginning in 2007, for an amount up to $3 billion in 2007 and $4 billion in 2008 and each year thereafter. GE will have the right to pre-empt any Vivendi sale to the market.
	Under certain circumstances, if Vivendi does exercise its right to monetize its equity interest in NBCU and if GE does not exercise its preemptive right, Vivendi will be able to exercise a put option to GE. Lastly, for a 12-month period commencing on May 11, 2010 (the sixth anniversary of the

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completion of the NBC-Universal transaction), GE will have the right to call either (i) all of Vivendi’s NBCU shares, or (ii) $4 billion of Vivendi’s NBCU shares, in each case at the greater of their market value at the time the call is exercised or their value as determined at the time of the NBC-Universal transaction (i.e. $8.3 billion). If GE calls $4 billion, but not all, of Vivendi’s NBCU shares, GE must call the remaining NBCU shares held by Vivendi by the end of 12-month period commencing on May 11, 2011 (seventh anniversary of completion of the NBC-Universal transaction). Please refer to Note 29.6 hereof.

29.6.	Contingent assets and liabilities subsequent to given or received commitments related to the divestiture or acquisition of shares

References		Nature of the commitment		Amount of the commitment		Expiry
		Contingent liabilities
		Divestiture of UMG supply and distribution operations (May 2005)		Supply and distribution contracts signed with the buyer EDC.		2015
		Divestiture of UMG’s UK manufacturing facilities (2002)		Supply contract signed with the buyer for €25 million.		2007
		Commitment to the Royalty Services LLP starting in 2007		Use of their services for the management of royalties to artists and repertoire owners for a seven-year period starting at the setting of the special purpose software.		2014
		Contingent compensation for acquired games studios		€17 million under conditions.		2009
1		NBC-Universal transaction (May 2004) and amendments in June 2005		— Breaches of obligations relating to retained businesses and liabilities, and the divestiture of certain businesses capped at $2,088 million.		—
				— Obligation to cover the Most Favored Nation provisions limited to 50% of every dollar of loss up to $50 million and to 100% of all losses in excess for $50 million.		—
				— Violation of environmental laws and remedial actions: indemnification of aggregate losses stemming from VUE operations. $325 million minimum ($10 million threshold).		2014
2		Divestiture of Canal+ Nordic (October 2003)		Specific guarantee capped at €50 million.		2010

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References		Nature of the commitment		Amount of the commitment		Expiry
		Divestitures of Canal+ Technologies (January 2003), Canal+ Belgique and Canal+ N.V. (December 2003) and Canal+ Pays-Bas (August 2004)		— Customary guarantees capped at a cumulated €9 million (except for tax and employee-related liabilities).		2006
				— Specific guarantees capped at a cumulated €12 million (provisioned up to €8 million).
		Divestiture of the StudioExpand animation and entertainment operations, some of MultiThématiques assets (2004) and Régie Outremer (June 2005)		Customary guarantees capped at a cumulated €26 million.		2014
3		Divestiture of Sportfive (2004)		Guarantees capped at €50 million excluding tax guarantee (€3.5 million threshold).		2006
4		Divestiture of NC Numéricâble (March 2005)		— Customary guarantees capped at €42 million counter-guaranteed by France Telecom up to €26 million.		2006
				— Specific guarantees capped at €241 million (including tax and social risks) counter-guaranteed by France Telecom up to €151 million. €15 million of provisions.		2006
5		Divestiture of Xfera (2003)		Counter-guarantee of €55 million to banks in connection with Spanish UMTS frequency spectrum fees (provisioned up to €20 million).		—
6		Guarantees given by Veolia Environnement subsidiaries counter- guaranteed by Veolia Environnement		€13 million counter-guaranteed by Veolia Environnement.		—
		Divestiture of fixed-line telecommunications in Hungary (May 2003)		Customary guarantees related, among other, to 2002 license payments.		—
		Divestiture of Monaco Telecom (June 2004)		— Guarantees capped at €90 million (€2.5 million threshold).		2006
				— Specific guarantees capped at €20 million.		2009
		Divestiture of Kencell (May 2004)		— Guarantees capped at $40 million.		2006
				— Specific guarantees.		—

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References		Nature of the commitment		Amount of the commitment		Expiry
7		Divestiture of Houghton Mifflin (December 2002)		Guarantees relating to the environment, to tax and employee matters and to share ownership.		2007
		Divestiture of 50% stake in Vizzavi (August 2002)		Customary guarantees.		—
		Dismantling of MP3 operations (2003)		Guarantees to insurers.		—
8		Divestiture of Sithe (December 2000)		Guarantees capped at $480 million.		—
9		Real estate defeasance		€240 million.		2006
10		Sale of real estate assets (June 2002)		— Vendor warranties.		2007
				— Autonomous first demand guarantees capped at €150 million total.		2017
11		Divestiture of UCI (October 2004, May and October 2005)		Customary guarantees limited to €145 million.		2006-2009
		Various other miscellaneous contingent liabilities		€10 million.		2007
		Contingent assets
		Divestiture of UMG supply and distribution operations (May 2005)		— Future $22 million rebates granted by the buyer related to the US businesses.		2009
				— Future €15 million rebates granted by the buyer related to the European businesses.		2014
		Divestiture of the music clubs, Dial and UGD (2004)		Earn out dependent on 2005 turnover levels up to €6 million.		—
4		Guarantees on divestiture of NC Numéricâble		€177 million counter-guaranteed by France Telecom.		2006
		Acquisition of several companies within MultiThématiques and Expand		Guarantees from the sellers for approximately €17 million.		2007
12		Divestiture of 37.8% stake in UGC (December 2005)		— Earn out variable depending on different factors.		—
				— Security on UGC shares.		—
		Various other miscellaneous contingent assets		€23 million.		—

	(1) As part of the NBC-Universal transaction which occurred in May 2004, Vivendi and General Electric (GE) gave certain reciprocal commitments customary for this type of transaction and Vivendi retained certain liabilities relating to taxes and excluded assets. Vivendi and GE undertook to indemnify

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	each other against losses stemming from among other things any breach of their respective representations, warranties and covenants.
	Neither party will have any indemnification obligations for losses arising as a result of any breach of representations and warranties (i) for any individual item where the loss is less than $10 million and (ii) in respect of each individual item where the loss is equal to or greater than $10 million except where the aggregate amount of all losses exceeds $325 million. In that event, the liable party will be required to pay the amount of losses which exceeds $325 million, but in no event will the aggregate indemnification payable exceed $2,088 million.
	In addition, Vivendi will have indemnification liabilities for 50% of every US dollar of loss up to $50 million and for all losses in excess for $50 million relating to liabilities arising out of the most favored nation provisions set forth in certain contracts.
	As part of the unwinding of IACI’s interest in VUE on June 7, 2005, Vivendi and IACI agreed to terminate their pending tax dispute, enabling Vivendi to cancel the $91 million letter of credit issued in favor of IACI in August 2004. In addition, Vivendi’s obligation to pay up to $520 million to NBC Universal in respect of any loss from the sale of Universal Parks and Resorts was eliminated. Finally, Vivendi’s commitments with regard to environmental matters were amended and Vivendi’s liability is now subject to a de minimus exception of $10 million and a payment basket of $325 million.
	The representations and warranties other than those regarding authorization, capitalization and tax representations terminated on August 11, 2005. Notices of claims for indemnity for environmental matters must be made by May 11, 2009, except for remediation claims which must be brought by May 11, 2014. Other claims, including those related to taxes, will be subject to applicable statutes of limitations.
	(2) In connection with the divestiture of Canal+ Nordic in October 2003, the Group granted certain customary guarantees to the acquirers up to €22 million, which expired in 2005. A specific guarantee was also granted up to €50 million, expiring in April 2010. Its application could be extended under certain conditions. Two guarantees given to American studios on output deals retained by the Canal+ Group, amount respectively to a maximum of €20 million and $15 million over the life of the contracts. These guarantees are covered by a back-to-back agreement by the buyers. The Canal+ Group has also kept distribution guarantees towards Canal Digital and Telenor Broadcast Holding on behalf of its former subsidiary. These guarantees are covered by a back-to-back agreement by the buyers.
	(3) In connection with the divestiture of Sportfive in 2004, both sellers, i.e. RTL Group and Canal+, granted customary guarantees and specific guarantees related to the collection of certain receivables as well as several litigations, expiring on June 30, 2006. The guarantees are capped at €100 million for the sellers (€7 million threshold), i.e., €50 million for the Canal+ Group. The sellers also granted customary tax guarantees with no limit as to amount.
	(4) As part of the divestiture of NC Numéricâble on March 31, 2005, the Canal+ Group granted the buyer, Ypso France, several customary guarantees expiring on December 31, 2006 for an amount capped at €42 million. These guarantees are covered by a €26 million counter-guarantee given by France Telecom in respect to the cable networks used by NC Numéricâble. In addition, the Canal+ Group granted specific guarantees with a €241 million cap (including tax and social risks), for which €15 million of provisions were accrued as of December 31, 2005. Specific risks related to cable networks used by NC Numéricâble are included in this maximum amount and are counter-guaranteed by France Telecom up to €151 million. In addition, the Canal+ Group also recorded a €5 million provision, following the dispute with the buyers concerning the amount of net debt sold to them. Furthermore, if the Canal+ Group sells its shares in Ypso, Altice will receive part of the capital gain realized by the Canal+ Group if such gain exceeds a certain amount.
	(5) In connection with its investment in Xfera, which was sold in 2003, Vivendi granted counter-guarantees of €55 million to a group of banks, which provided a guarantee to the Spanish government

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	covering payment by Xfera of UMTS frequency spectrum fees. A provision in the amount of €20 million has been made with respect to the risks associated with these commitments.
	(6) As of December 31, 2005, Vivendi continued to guarantee commitments given by Veolia Environnement subsidiaries for a total amount of approximately €13 million, mainly relating to performance guarantees given to local authorities (including New Bedford). All these commitments are being progressively transferred to Veolia Environnement and have been counter-guaranteed by Veolia Environnement.
	(7) Under the terms of the agreement governing the sale of Houghton Mifflin shares in December 2002, all the guarantees granted by Vivendi expired on June 30, 2004, except those relating to intellectual property which expired at the end of December 2005, guarantees relating to the environment which expire in December 2007, guarantees relating to tax and employee matters subject to statutes of limitation and guarantees relating to share ownership which are unlimited in time.
	(8) In connection with the sale of its 49.9% interest in Sithe to Exelon in December 2000, Vivendi granted guarantees on its own representations and those of Sithe. Claims, other than those made in relation to foreign subsidiary commitments, are capped at $480 million. In addition, claims must exceed $15 million, except if they relate to foreign subsidiaries or the divestiture of certain electrical stations to Reliant in February 2000. Some of these guarantees expired on December 18, 2005.
	(9) An annual rental guarantee of €12 million was granted by Vivendi to the buyer of the Berlin building Quartier 207 in 1996. The building and the debt used for its acquisition are not consolidated by Vivendi because the related annual rental guarantees are to terminate in December 2006, following the likely exercise by the buyer of the building of the put option granted by the Dresdner Bank.
	(10) As part of the sale of real estate assets in June 2002 to Nexity, Vivendi granted two autonomous first demand guarantees, one for €40 million and one for €110 million to several subsidiaries of Nexity (SAS Nexim 1 to 6). The guarantees are effective until June 30, 2017. These autonomous guarantees are in addition to the vendor warranties granted by Sig 35, Vivendi’s subsidiary, to SAS Nexim 1 to 6 in connection with guarantee contracts dated June 28, 2002. The vendor warranties are valid for a period of 5 years, from June 28, 2002, except those relating to litigation (valid until the end of the proceedings), tax, custom, and employee-related liabilities (statute of limitations plus 3 months) and the decennial guarantee applicable to real estate.
	(11) In connection with the divestiture of its 50% stake in UCI in October 2004, Vivendi granted customary guarantees to the buyer capped at €135 million. These guarantees expire on April 28, 2006, except for guarantees relating to environmental matters, which expire on April 28, 2007, and guarantees relating to tax matters, which expire at the end of the applicable statute of limitations period. At the same time, Vivendi continues to provide guarantees in respect of UCI rent commitments to owners of cinema theaters in Germany of approximately €127 million as of December 31, 2005. It received counter-guarantees in this respect from the purchaser of its 50% stake. In addition, as part of the separate disposal of the group’s 50% stake in UCI Brazil in October 2005, Vivendi granted guarantees covering lease and operational matters as above capped at $14 million and expiring October 12, 2008.
	(12) Vivendi has a first rank security on UGC shares held by family shareholders to guarantee the payment of its loan to such shareholders following the divestiture of its 37.8% stake in UGC in December 2005. In addition, if the shares are resold by family shareholders at a price higher than the repurchase one, an earn out will be due to Vivendi depending on the resale date, over different periods according to the repayment dates of the loan.

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29.7.	Shareholder agreements

29.8.	Collaterals and pledges as of December 31, 2005 and December 31, 2004

														December 31, 2005												December 31, 2004
																		Total recorded in
														Amount of				the Consolidated
						Inception								asset				Statement of				Corresponding				Amount of asset
Nature of assets collaterized or pledged		Note				Date				Maturity				pledged				Financial Position				percentage				pledged
														(In millions of euros)
On financial assets
— Pledge on Maroc Telecom shares (corresponding to a 35% interest) to guarantee payment of the put option granted to the Kingdom of Morocco in respect of a 16% stake in Maroc Telecom			2.1				April 2003				January 4, 2005			€	—			€	—				—			€	1,518	(a)
— Pledge on NBC Universal shares equal to 125% of the promissory note issued to USI in order to guarantee this financing			23.1				May 2004				January 28, 2005				—				—				—				716
— Pledges on other financial assets							1997				2016				49				3,783				1	%			50
On other assets
— Miscellaneous cash collaterals							2004				nd**				1				2,902				ns***				13
Total															50				na*				na*				2,297

*		na: not applicable; **nd: not determined; ***ns: not significant
(a)		As the pledged shares are shares of a consolidated company, they are eliminated in the Consolidated Statement of Financial Position and the amount indicated corresponds to the value of the shares in the statutory accounts of the holding company.

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•	AMF investigation into Vivendi’s purchase of its own shares opened in May 2002

•	AMF investigation in connection with the issuance of notes mandatorily redeemable for new shares of Vivendi

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•	Investigation by the Financial Department of the Parquet de Paris

•	Securities class action in the United States

•	Elektrim Telekomunikacja

	— Arbitral Award Rendered in Vienna on 26 November 2004 (the “Vienna Award”)

	—	the Telco transfer is ineffective and the PTC shares which were the subject of this transfer remained Elektrim’s property at all material times;
	—	the transfer of the PTC shares to Telco by Elektrim does not as such qualify as a Material Breach under Article 16.1 of the Shareholders Agreement but it would do so in case Elektrim would not recover the shares from Telco within two months at the latest from the notification of the award;
	—	DT’s Economic Impairment Claim is dismissed; and
	—	it has no jurisdiction over Telco and DT’s claims against Telco cannot be entertained in this Arbitration.

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	— Exequatur Proceedings of the Vienna Award before Polish Courts

	— Declaratory Proceedings before the Polish Courts

	— Proceedings before the Registry Court (District Court) of Warsaw

	— Proceedings concerning the “Mega” operation before Polish Courts

	— Proceedings for the annulment of the Vienna Award before the Austrian Courts

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	— Vivendi case against the Polish State

	— Arbitration Proceedings before the London Court of International Arbitration (LCIA)

	— Proceedings before the Polish Competition and Consumer Protection Office

	— Proceedings against DT before the Paris Commercial Court

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Note 31.	Major consolidated entities as of December 31, 2005 and 2004

												December 31, 2005												December 31, 2004
												Accounting				Voting				Ownership				Accounting				Voting				Ownership
				Note				Country				Method				Interest				Interest				Method				Interest				Interest
Vivendi SA
Universal Music Group
	Universal Studios Holding I Corp.				32.4				US				C				92	%			92	%			C				92	%			92	%
		PolyGram Holding, Inc.							US				C				100	%			92	%			C				100	%			92	%
		Universal Music Group, Inc.							US				C				100	%			92	%			C				100	%			92	%
		UMG Recordings, Inc.							US				C				100	%			92	%			C				100	%			92	%
		Centenary Holding B.V							Netherlands				C				100	%			92	%			C				100	%			92	%
		Universal International Music B.V							Netherlands				C				100	%			92	%			C				100	%			92	%
		Universal Entertainment GmbH							Germany				C				100	%			92	%			C				100	%			92	%
		Universal Music K.K							Japan				C				100	%			92	%			C				100	%			92	%
		Universal Music France SAS							France				C				100	%			92	%			C				100	%			92	%
		Centenary Music Holdings Limited							UK				C				100	%			92	%			C				100	%			92	%
		Universal Music (UK) Holdings Limited							UK				C				100	%			92	%			C				100	%			92	%
Vivendi Games									US				C				100	%			99	%			C				100	%			99	%

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												December 31, 2005												December 31, 2004
												Accounting				Voting				Ownership				Accounting				Voting				Ownership
				Note				Country				Method				Interest				Interest				Method				Interest				Interest
Canal+ Group
	Groupe Canal+ SA								France				C				100	%			100	%			C				100	%			100	%
		Canal+ SA(a)							France				C				49	%			49	%			C				49	%			49	%
		CanalSatellite SA							France				C				66	%			66	%			C				66	%			66	%
		StudioCanal SA							France				C				100	%			100	%			C				100	%			100	%
		MultiThématiques			2.5				France				C				100	%			100	%			C				70	%			70	%
		Cyfra+							Poland				C				75	%			75	%			C				75	%			75	%
		Media Overseas							France				C				100	%			100	%			C				100	%			100	%
SFR
	SFR(b)								France				C				56	%			56	%			C				56	%			56	%
		Neuf Telecom SA			2.2				France				E				28	%			16	%			—				—				—
		Cegetel SAS			2.2				France				—				—				—				C				65	%			36	%
Maroc Telecom SA					2.1				Morocco				C				51	%			51	%			C				51	%			35	%
	Mauritel								Mauritania				C				51	%			21	%			C				51	%			14	%
NBC Universal
		Universal Studios Holding I Corp.			32.4				US				C				92	%			92	%			C				92	%			92	%
		NBC Universal			2.4				US				E				20	%			18	%			E				20	%			18	%
Other
	Vivendi Telecom International SA								France				C				100	%			100	%			C				100	%			100	%
		Elektrim Telekomunikacja			2.3				Poland				C				51	%			51	%			E				49	%			49	%
		Polska Telefonica Cyfrowa			2.3				Poland				NC				51	%			26	%			NC				49	%			25	%
	Vivendi Universal Publishing SA								France				C				100	%			100	%			C				100	%			100	%
	UGC				14				France				—				—				—				E				38	%			38	%

(a)	This company is consolidated because Vivendi (i) has majority control over the board of directors, (ii) no other shareholder or shareholder group is in a position to exercise substantive participating rights that would allow them to veto or block decisions taken by Vivendi and (iii) it assumes the majority of risks and benefits pursuant to an agreement between Canal+ SA and Canal+ Distribution, a wholly-owned subsidiary of Vivendi. Under the terms of this agreement, Canal+ Distribution guarantees Canal+ SA results in return for exclusive commercial rights to the Canal+ SA subscriber base.
(b)	SFR is 56% owned by Vivendi and 44% owned by Vodafone. Under the terms of the shareholders’ agreement, Vivendi has management control of SFR, majority control over the board of directors and appoints the chairman and CEO, has majority control over shareholders’ general meetings, and no other shareholder or shareholder group is in a position to exercise substantive participating rights that would allow them to veto or block decisions taken by Vivendi.

32.1.	Canal+ and TPS combination agreement — January 6, 2006 and Lagardère agreement — announced on February 17, 2006

	Canal+ and TPS combination agreement

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	•	During the first stage, on January 6, 2006, Vivendi paid TF1 and M6 a €150 million advance corresponding to a 15% interest in TPS after cancellation of the debt of TPS and its transformation from a S.N.C. into a S.A. In addition, TF1 and M6 agreed to divest TPS to Vivendi, directly or via the Canal+ Group. Until the completion of the transaction, the Canal+ Group and TPS will retain their management autonomy.
	•	During a second stage, after the approval by antitrust authorities, the €150 million advance, plus interest, would be repaid to Vivendi. TF1’s and M6’s interests in the new group “Canal+ France” would be 9.9% and 5.1%, respectively. The new group “Canal+ France” would comprise the Canal+ Group and TPS, by way of an exchange of shareholding without cash payment. The remaining stake would be shared between Vivendi and Lagardère.
	•	However, if Vivendi determines not to complete the combination, Vivendi would keep a 15% interest in TPS for its initial advance of €150 million, and would compensate TF1 and M6 for an amount of €100 million.
	•	Under certain strictly defined circumstances related to the conditions of the approval of competition authorities, Vivendi could acquire TF1’s and M6’s stake in TPS for €900 million (plus interests) or could determine not to complete the combination, under the circumstances described above.
	•	Moreover, TF1 and M6 would benefit, for a minimum of 3 years after the completion of the transaction, from a put option granted by Vivendi on their 15% stake in the new group. The price of this option would be based on the market value, as determined by a third-party valuation expert, with a minimum guarantee of €1,130 million for 15% of the scope of the new pay-TV group in France, i.e., €7.5 billion for 100%.

	Agreement with Lagardère

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	•	liquidity right for its stake in the event of an IPO, under certain circumstances; and
	•	under certain other circumstances, linked to the approval of the combination with TPS by competition authorities and to Lagardère’s specific assets, Lagardère has the right to exit from CanalSat by selling before December 31, 2006 its entire stake to Vivendi or the Canal+ Group for €985 million (including €126 million for its pro rata share of cash).

32.2.	Vivendi announces its intention to terminate its American Depositary Receipts (ADR) program — January 17, 2006

32.3.	Divestiture of the residual 20% stake in Ypso — January 31, 2006

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32.4.	Purchase of the 7.7% stake held by Matsushita Electric Industrial Co, Ltd (MEI) in Universal Studios Holding — February 7, 2006

32.5.	Investment in 19.9% of the voting capital of Amp’d — February 7, 2006

Note 33.	Reconciliation of the financial statements prepared under French GAAP and IFRS financial information

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		Please refer								Earnings				Foreign				Unrealized				Impact of
		to the				Equity as of				attributable to				currency				gain/(losses) on				change in								Equity as of
		paragraph				January 1,				equity holders of				translation				available-for-sale				accounting								December 31,
		mentioned				2004				the parent				adjustment				securities				principles				Other				2004
						(In millions of euros)
Equity attributable to equity holders of the parent under French GAAP						€	11,923			€	754			€	990			€	—			€	(87	)		€	41			€	13,621
ORA/OCEANE (IAS 32/39)			33.7.D				844				78				—				—				—				—				922
Cancellation of foreign currency translation adjustments in respect of VUE as of January 1, 2004 (IFRS 1)			33.6.				—				2,490				(2,490	)			—				—				—				—
Commitment to repurchase minority interests (IAS 32/39)			33.7.C				11				(7	)			—				—				—				—				4
Valuation difference of available-for-sale securities, excluding VUE (IAS 32/39)			33.7.E				257				—				—				632				—				—				889
Valuation difference of available-for-sale securities in respect of VUE			33.6.				231				(114	)			—				(88	)			—				(29	)			—
Mark-to-market of other financial instruments in respect of VUE (IAS 32/39)			33.6.				(15	)			(29	)			—				—				—				44				—
Mark-to-market of other financial instruments (IAS 32/39)			33.7.F				175				(122	)			—				—				—				11				64
Elimination of goodwill amortization, excluding VUE (IFRS 3)			33.7.G				—				530				(4	)			—				—				(17	)			509
Elimination of goodwill amortization in respect of VUE (IFRS 3)			33.7.G				—				85				—				—				—				(85	)			—
Special purpose entities			33.7.H				(83	)			—				—				—				57				—				(26	)
Employee benefits (IAS 19)			33.7.I				(299	)			43				9				—				—				(5	)			(252	)
Catch up on past amortization as of January 1, 2004 of intangible assets (IFRS 1)			33.7.J				(89	)			(2	)			6				—				—				—				(85	)
Share-based payments (IFRS 2)			33.7.K				—				(95	)			—				—				—				95				—
Other restatements							(224	)			156				(104	)			60				30				(115	)			(197	)
Total restatements before tax and minority interests							808				3,013				(2,583	)			604				87				(101	)			1,828
Equity attributable to equity holders of the parent						€	12,731			€	3,767			€	(1,593	)		€	604			€	—			€	(60	)		€	15,449

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										Earnings				Foreign				Unrealized gain/
		Please refer				Equity as of				attributable to				currency				(losses) on				Dividends								Equity as of
		to the				January 1,				minority				translation				available-for-sale				paid by								December 31,
		paragraph				2004				interests				adjustment				securities				subsidiaries				Other				2004
		mentioned
						(In millions of euros)
Minority interests under French GAAP						€	4,929			€	1,030			€	36			€	—			€	(1,849	)		€	(1,187	)		€	2,959
Commitments to repurchase minority interests and other restatements in respect of VUE (IAS 32)			33.6.				(514	)			—				(25	)			—				—				539				—
Commitments to repurchase minority interests (IAS 32 / 39)			33.7.C				(442	)			—				—				—				—				106				(336	)
Mark-to-market of other financial instruments (IAS 32 / 39)			33.7.F				—				(3	)			—				—				—				—				(3	)
Share-based payments (IFRS 2)			33.7.K				—				(2	)			—				—				—				2				—
Employee benefits (IAS 19)			33.7.I				—				(1	)			—				—				—				1				—
Other restatements							(12	)			32				(2	)			—				—				5				23
Total restatements before tax							(968	)			26				(27	)			—				—				653				(316	)
Minority interests under IFRS						€	3,961			€	1,056			€	9			€	—			€	(1,849	)		€	(534	)		€	2,643
Total equity under IFRS						€	16,692			€	4,823			€	(1,584	)		€	604			€	(1,849	)		€	(594	)		€	18,092

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		January 1, 2004 (format compliant with French accounting standards)
						Cancellation of
						the foreign								Commitments
		French				currency				Repurchase				to purchase				ORA/				Available-				VUE				Other				Special
		accounting				translation				of minority				minority				OCEANE				for-sale				financial				financial				Purpose				Employee				Intangible				Other
		standards				adjustment				interest				interest				bonds				securities				instruments				instruments				Entities				benefits				assets				restatements				IFRS
		(In millions of euros)
						IFRS 1				IFRS 3				IAS 32				IAS 32/39				IAS 32/39				IAS 32/39				IAS 32/39				SIC 12				IAS 19				IAS 38
Please refer to the paragraph mentioned							33.7.A				33.7.B				33.7.C				33.7.D				33.7.E				33.6				33.7.F				33.7.H				33.7.I				33.7.J
ASSETS
Goodwill, net		€	17,789			€	—			€	914			€	537			€	—			€	—			€	36			€	—			€	—			€	—			€	—			€	3			€	19,279
Other intangible assets, net			11,778				—				(914	)			5				—				—				—				58				—				(10	)			(848	)			3				10,072
Property, plant and equipment, net			6,365				—				—				—				—				—				—				—				417				—				—				60				6,842
Investments in equity affiliates			1,083				—				—				—				—				—				—				2				—				—				—				—				1,085
Other investments			3,549				—				—				—				(9	)			571				373				35				874				—				—				135				5,528
Total long-term assets			40,564				—				—				542				(9	)			571				409				95				1,291				(10	)			(848	)			201				42,806
Inventories and work-in-progress			744				—				—				—				—				—				—				—				—				—				103				85				932
Accounts receivable and other			8,809				—				—				1				(147	)			—				(559	)			(38	)			—				(115	)			—				(54	)			7,897
Deferred tax assets			1,546				—				—				—				—				—				—				21				14				153				—				30				1,764
Short-term loans receivable			140				—				—				—				—				—				341				4				—				—				—				12				497
Marketable securities			259				—				—				—				—				(249	)			—				—				—				—				—				(3	)			7
Cash and cash equivalents			2,858				—				—				8				—				—				—				—				—				—				—				(14	)			2,852
Total current assets			14,356				—				—				9				(147	)			(249	)			(218	)			(13	)			14				38				103				56				13,949
TOTAL ASSETS		€	54,920			€	—			€	—			€	551			€	(156	)		€	322			€	191			€	82			€	1,305			€	28			€	(745	)		€	257			€	56,755
LIABILITIES
Other equity		€	1,000			€	—			€	—			€	—			€	(1,000	)		€	—			€	—			€	—			€	—			€	—			€	—			€	—			€	—
Deferred income			560				—				—				—				—				—				—				(173	)			(185	)			—				—				—				202
Provisions			2,294				—				—				(101	)			—				—				—				(330	)			38				339				—				535				2,775
Long-term debt			9,621				—				—				342				—				—				(3	)			287				606				—				—				—				10,853
Other non-current liabilities and accrued expenses			2,407				—				—				—				—				—				—				1				931				(12	)			(688	)			(161	)			2,478
			15,882				—				—				241				(1,000	)			—				(3	)			(215	)			1,390				327				(688	)			374				16,308
Accounts payable			12,261				—				—				(49	)			—				—				—				(2	)			(2	)			(1	)			—				96				12,303
Deferred taxes liabilities			5,123				—				—				—				—				65				148				87				—				1				32				33				5,489
Bank overdrafts and other short-term borrowings			4,802				—				—				790				—				—				344				36				—				—				—				(9	)			5,963
Total current liabilities			22,186				—				—				741				—				65				492				121				(2	)			—				32				120				23,755
TOTAL LIABILITIES		€	38,068			€	—			€	—			€	982			€	(1,000	)		€	65			€	489			€	(94	)		€	1,388			€	327			€	(656	)		€	494			€	40,063
SHAREHOLDERS’ EQUITY
Share capital			5,893				—				—				—				—				—				—				—				—				—				—				—				5,893
Additional paid-in capital			6,030				—				—				—				1,204				—				—				—				—				—				—				—				7,234
Retained earnings and others			—				—				—				11				(360	)			257				216				175				(83	)			(299	)			(89	)			(224	)			(396	)
Including foreign currency translation adjustment			(3,750	)			3,750				—				—				—				—				—				—				—				—				—				—				—
Total shareholders’ equity			11,923				—				—				11				844				257				216				175				(83	)			(299	)			(89	)			(224	)			12,731
Minority interests			4,929				—				—				(442	)			—				—				(514	)			1				—				—				—				(13	)			3,961
TOTAL EQUITY		€	16,852			€	—			€	—			€	(431	)		€	844			€	257			€	(298	)		€	176			€	(83	)		€	(299	)		€	(89	)		€	(237	)		€	16,692

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		January 1, 2004
						Reclassification				Media/
						of VUE as an				Entertainment				Reclassification
Format compliant with French						asset held for				content assets				of current/non								Other
accounting standards		IFRS				sale				classification				current items				Offsetting				reclassifications				IFRS				Format compliant with IFRS
		(In millions of euros)
						IFRS 5								IAS 1				IAS 1/IAS 32
Please refer to the paragraph mentioned							33.6./33.8.M				33.8.N				33.8.P				33.8.R
ASSETS																														ASSETS
Goodwill, net		€	19,279			€	(6,286	)		€	—			€	—			€	—			€	(51	)		€	12,942			Goodwill
			—				—				2,971				—				—				—				2,971			Non current content assets
Other intangible assets, net			10,072				(4,777	)			(2,971	)			—				—				38				2,362			Other intangible assets
Property, plant and equipment, net			6,842				(1,065	)			—				—				(165	)			(7	)			5,605			Property, plant and equipment
Investments in equity affiliates			1,085				995				—				—				—				16				2,096			Investments in equity affiliates
Other investments			5,528				(1,666	)			—				18				(172	)			54				3,762			Non current financial assets
			—				—				—				1,108				—				(6	)			1,102			Deferred tax assets
Total long-term assets			42,806				(12,799	)			—				1,126				(337	)			44				30,840			Non current assets
Inventories and work-in-progress			932				(209	)			(307	)			—				—				(52	)			364			Inventories
			—				—				—				372				—				1				373			Current tax receivables
			—				—				583				—				—				—				583			Current content assets
Accounts receivable and other			7,897				(1,221	)			(276	)			(390	)			(618	)			(266	)			5,126			Trade accounts receivable and other
Deferred tax assets			1,764				(656	)			—				(1,108	)			—				—				—
Short-term loans receivable			497				(342	)			—				—				—				(61	)			94			Short-term financial assets
Marketable securities			7				—				—				—				—				(7	)			—
Cash and cash equivalents			2,852				(124	)			—				—				—				(2	)			2,726			Cash and cash equivalents
			13,949				(2,552	)			—				(1,126	)			(618	)			(387	)			9,266
			—				13,784				—				—				—				113				13,897			Assets held for sale
Total current assets			13,949				11,232				—				(1,126	)			(618	)			(274	)			23,163			Current assets
TOTAL ASSETS		€	56,755			€	(1,567	)		€	—			€	—			€	(955	)		€	(230	)		€	54,003			TOTAL ASSETS
SHAREHOLDERS’ EQUITY AND LIABILITIES																														EQUITY AND LIABILITIES
Share capital		€	5,893			€	—			€	—			€	—			€	—			€	—			€	5,893			Share capital
Additional paid-in capital			7,234				—				—				—				—				—				7,234			Additional paid-in capital
Retained earnings and others			(396	)			(231	)			—				—				—				—				(627	)		Retained earnings and other
Including foreign currency translation adjustments			—				—				—				—				—				—				—			Including foreign currency translation adjustments
			—				231				—				—				—				—				231			Equity associated with assets held for sale
Total shareholders’ equity			12,731				—				—				—				—				—				12,731			Equity, attributable to equity holders of the parent
Minority interests			3,961				—				—				—				—				—				3,961			Minority interests
Other equity			—				—				—				—				—				—				—
			16,692				—				—				—				—				—				16,692			Total equity
Deferred income			202				(98	)			—				—				—				(104	)			—
Provisions			2,775				(125	)			—				(355	)			(165	)			(267	)			1,863			Non current provisions
Long-term debt			10,853				(3,436	)			—				—				—				(1	)			7,416			Long-term borrowings and other financial liabilities
			—				—				—				3,670				—				—				3,670			Deferred tax liabilities
Other non-current liabilities and accrued expenses			2,478				(833	)			—				—				—				126				1,771			Other non current liabilities
			16,308				(4,492	)			—				3,315				(165	)			(246	)			14,720			Non current liabilities
Accounts payable			12,303				(1,676	)			—				(1,157	)			(790	)			(27	)			8,653			Trade accounts payable and other
			—				—				—				1,156				—				1				1,157			Current tax payables
			—				—				—				356				—				(1	)			355			Current provisions
Deferred taxes liabilities			5,489				(1,819	)			—				(3,670	)			—				—				—
Bank overdrafts and other short-term borrowings			5,963				(344	)			—				—				—				(8	)			5,611			Short-term borrowings and other financial liabilities
			23,755				(3,839	)			—				(3,315	)			(790	)			(35	)			15,776
							6,764				—				—				—				51				6,815			Liabilities associated with assets held for sale
Total current liabilities			23,755				2,925				—				(3,315	)			(790	)			16				22,591			Current liabilities
Total liabilities			40,063				(1,567	)			—				—				(955	)			(230	)			37,311			Total liabilities
TOTAL EQUITY AND LIABILITIES		€	56,755			€	(1,567	)		€	—			€	—			€	(955	)		€	(230	)		€	54,003			TOTAL EQUITY AND LIABILITIES

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33.3.	Reconciliation of 2004 earnings

		Year Ended December 31, 2004
						Cancellation of
Format						foreign currency
compliant						translation
with						adjustment								Revenues																												Reclassification												Format
French						related to VUE				Elimination				of				Share-based												Other				VUE as				Cegetel as				of lines of the				Reclassification								compliant
accounting		French				as of January 1,				of goodwill				telecom				compen-				Employee				Financial				restate-				discontinued				discontinued				statement of				of financial								with
standards		GAAP				2004				amortization				operators				sation				benefits				instruments				ments				operation				operation				earnings				instruments				IFRS				IFRS
		(in millions of euros)
						IFRS 1				IFRS 3				IAS 18				IFRS 2				IAS 19				IAS 32/39								IFRS 5				IFRS 5
Please refer to the paragraph mentioned							33.7.A				33.7.G				33.7.L				33.7.K				33.7.I				33.7.F								33.6./33.8.M				33.8.M				33.8.Q
Revenues		€	21,428			€	—			€	—			€	(144	)		€	—			€	—			€	—			€	(47	)		€	(2,327	)		€	(1,027	)		€	—			€	—			€	17,883			Revenues
Operating income			3,476				—				—				10				(64	)			86				(5	)			(5	)			(337	)			72				—				—				3,233			Earnings from operations
							—				—				—				—				—				—				—				—				—				—				89				89			Other income from ordinary activities
							—				—				—				—				—				—				—				—				—				(25	)			—				(25	)		Other charges from ordinary activities
							—				—				—				—				—				—				—				—				—				221				—				221			Income from equity affiliates
							—				—				10				(64	)			86				(5	)			(5	)			(337	)			72				196				89				3,518			Earnings before interest and other financial charges and income and provision for income taxes
Financing expense			(455	)			—				—				—				—				—				78				(13	)			54				8				—				(78	)			(406	)		Interest
Other financial expenses			(247	)			—				—				—				—				(37	)			(202	)			(4	)			45				—				1,682				(11	)			1,226			Other financial charges and income
Financing and other expenses, net			(702	)			—				—				—				—				(37	)			(124	)			(17	)			99				8				1,682				(89	)			820			Interest and other financial charges and income
Income (loss) before gain (loss) on businesses sold, net of provisions, income tax, equity affiliates, goodwill amortization and minority interests			2,774				—				—				10				(64	)			49				(129	)			(22	)			(238	)			80				1,878				—				4,338			Earnings from continuing operations before provision for income taxes
Gain (loss) on businesses sold, net of provisions			(140	)			2,490				—				—				—				—				—				40				(708	)			—				(1,682	)			—				—
Income tax			(400	)			—				—				(3	)			—				(18	)			49				(1	)			81				—				—				—				(292	)		Provision for income taxes
Income (loss) before equity affiliates, goodwill amortization and minority interests			2,234				2,490				—				7				(64	)			31				(80	)			17				(865	)			80				196				—				4,046			Earnings from continuing operations
Income (loss) from equity affiliates			219				—				—				—				—				—				—				(15	)			39				(22	)			(221	)			—				—
Goodwill amortization			(638	)			—				638				—				—				—				—				—				—				—				—				—				—
Impairment losses			(31	)			—				—				—				—				—				—				6				—				—				25				—				—
																																			839				(62	)			—								777			Earnings from discontinued operations
Income (loss) before minority interests		€	1,784			€	2,490			€	638			€	7			€	(64	)		€	31			€	(80	)		€	8			€	13			€	(4	)		€	—			€	—			€	4,823			Earnings
Attributable to																																																						Attributable to:
Net income (loss)		€	754			€	2,490			€	615			€	4			€	(62	)		€	33			€	(77	)		€	6			€	8			€	(4	)		€	—			€	—			€	3,767			Equity holders of the parent
Minority interests			1,030				—				23				3				(2	)			(2	)			(3	)			2				5				—				—				—				1,056			Minority interests

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33.4.	Reconciliation of equity as of December 31, 2004

33.4.1	Restatements

		December 31, 2004 (format compliant with French accounting standards)
										Commitments
		French				Repurchase				to purchase				ORA/				Available-				Other				Elimination of				Special
		accounting				of minority				minority				OCEANE				for-sale				financial				goodwill				Purpose				Employee				Intangible				Other
		standards				interest				interest				bonds				securities				instruments				amortization				Entities				benefits				assets				restatements				IFRS
		(In millions of euros)
						IFRS 3				IAS 32				IAS 32/39				IAS 32/39				IAS 32/39				IFRS 3				SIC 12				IAS 19				IAS 38
Please refer to the paragraph mentioned							33.7.B				33.7.C				33.7.D				33.7.E				33.7.F				33.7.G				33.7.H				33.7.I				33.7.J
ASSETS
Goodwill, net		€	15,555			€	914			€	995			€	—			€	—			€	—			€	532			€	—			€	—			€	—			€	(107	)		€	17,889
Other intangible assets, net			7,640				(914	)			—				—				—				—				—				—				—				(2,225	)			60				4,561
Property, plant and equipment, net			5,063				—				—				—				—				—				—				—				—				—				67				5,130
Investments in equity affiliates			880				—				—				—				—				—				—				—				—				—				138				1,018
Other investments			2,449				—				—				—				1,241				99				—				—				—				—				(54	)			3,735
Total long-term assets			31,587				—				995				—				1,241				99				532				—				—				(2,225	)			104				32,333
Inventories and work-in-progress			443				—				—				—				—				—				—				—				—				187				111				741
Accounts receivable and other			6,545				—				—				(78	)			—				(9	)			—				—				(131	)			—				48				6,375
Deferred tax assets			1,219				—				—				—				—				6				—				13				154				—				3				1,395
Short-term loans receivable			73				—				—				—				—				84				—				—				—				—				1				158
Marketable securities			263				—				—				—				(249	)			—				—				—				—				—				—				14
Cash and cash equivalents			3,158				—				—				—				—				1				—				—				—				—				—				3,159
Total current assets			11,701				—				—				(78	)			(249	)			82				—				13				23				187				163				11,842
TOTAL ASSETS		€	43,288			€	—			€	995			€	(78	)		€	992			€	181			€	532			€	13			€	23			€	(2,038	)		€	267			€	44,175
LIABILITIES
Other equity			1,000				—				—				(1,000	)			—				—				—				—				—				—				—				—
Deferred income			100				—				—				—				—				—				—				—				—				—				—				100
Provisions			2,236				—				(120	)			—				—				(310	)			—				—				280				—				390				2,476
Long-term debt			4,549				—				414				—				—				394				—				—				—				—				—				5,357
Other non-current liabilities and accrued expenses			3,826				—				—				—				—				42				—				41				(11	)			(1,973	)			(52	)			1,873
			11,711				—				294				(1,000	)			—				126				—				41				269				(1,973	)			338				9,806
Accounts payable			10,046				—				(70	)			—				—				(41	)			—				(2	)			6				—				92				10,031
Deferred taxes liabilities			3,207				—				—				—				103				37				—				—				—				20				28				3,395
Bank overdrafts and other short-term borrowings			1,744				—				1,103				—				—				(5	)			—				—				—				—				—				2,842
Total current liabilities			14,997				—				1,033				—				103				(9	)			—				(2	)			6				20				120				16,268
TOTAL LIABILITIES			26,708				—				1,327				(1,000	)			103				117				—				39				275				(1,953	)			458				26,074
SHAREHOLDERS’ EQUITY
Share capital			5,899				—				—				—				—				—				—				—				—				—				—				5,899
Additional paid-in capital			6,109				—				—				1,204				—				—				—				—				—				—				—				7,313
Retained earnings and others			1,613				—				4				(282	)			889				64				509				(26	)			(252	)			(85	)			(188	)			2,246
Total shareholders’ equity			13,621				—				4				922				889				64				509				(26	)			(252	)			(85	)			(188	)			15,458
Minority interests			2,959				—				(336	)			—				—				—				23				—				—				—				(3	)			2,643
TOTAL EQUITY		€	16,580			€	—			€	(332	)		€	922			€	889			€	64			€	532			€	(26	)		€	(252	)		€	(85	)		€	(191	)		€	18,101

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33.4.2	Reclassifications

		December 31, 2004
										Reclassification
						Content				of equity				Reclassification
Format compliant with French						assets				affiliates				of current/non								Other
accounting standards		IFRS				classification				goodwill				current items				Offsetting				reclassifications				IFRS				Format compliant with IFRS
		(In millions of euros)
										IAS 28				IAS 1				IAS 1/IAS 32
Please refer to the paragraph mentioned							33.8.N				33.8.O				33.8.P				33.8.R
ASSETS																														ASSETS
Goodwill, net		€	17,889			€	—			€	(4,737	)		€	—			€	—			€	2			€	13,154			Goodwill
			—				2,431				—				—				—				—				2,431			Non current content assets
Other intangible assets, net			4,561				(2,431	)			—				—				—				47				2,177			Other intangible assets
Property, plant and equipment, net			5,130				—				—				—				(145	)			(245	)			4,740			Property, plant and equipment
Investments in equity affiliates			1,018				—				4,737				—				—				18				5,773			Investments in equity affiliates
Other investments			3,735				—				—				21				—				31				3,787			Non current financial assets
			—				—				—				1,395				(112	)			(1	)			1,282			Deferred tax assets
Total long-term assets			32,333				—				—				1,416				(257	)			(148	)			33,344			Non current assets
Inventories and work-in-progress			741				(398	)			—				—				—				(28	)			315			Inventories
			—				—				—				772				—				—				772			Current tax receivables
			—				579				—				—				—				—				579			Current content assets
Accounts receivable and other			6,375				(181	)			—				(793	)			(618	)			(255	)			4,528			Trade accounts receivable and other
Deferred tax assets			1,395				—				—				(1,395	)			—				—				—
Short-term loans receivable			158				—				—				—				—				4				162			Short-term financial assets
Marketable securities			14				—				—				—				—				(14	)			—
Cash and cash equivalents			3,159				—				—				—				—				—				3,159			Cash and cash equivalents
			11,842				—				—				(1,416	)			(618	)			(293	)			9,515
																							180				180			Assets held for sale
Total current assets			11,842				—				—				(1,416	)			(618	)			(113	)			9,695			Current assets
TOTAL ASSETS		€	44,175			€	—			€	—			€	—			€	(875	)		€	(261	)		€	43,039			TOTAL ASSETS
SHAREHOLDERS’ EQUITY AND LIABILITIES																														EQUITY AND LIABILITIES
Share capital			5,899				—				—				—				—				—				5,899			Share capital
Additional paid-in capital			7,313				—				—				—				—				—				7,313			Additional paid-in capital
Retained earnings and others			2,246				—				—				—				—				(9	)			2,237			Retained earnings and other
			—				—				—				—				—				—				—			Equity associated with assets held for sale
Total shareholders’ equity			15,458				—				—				—				—				(9	)			15,449			Equity, attributable to equity holders of the parent
Minority interests			2,643				—				—				—				—				—				2,643			Minority interests
Other equity			—				—				—				—				—				—				—
			18,101				—				—				—				—				(9	)			18,092			Total equity
Deferred income			100				—				—				—				—				(100	)			—
Provisions			2,476				—				—				(357	)			(145	)			(413	)			1,561			Non current provisions
Long-term debt			5,357				—				—				—				—				—				5,357			Long-term borrowings and other financial liabilities
			—				—				—				3,394				(112	)			—				3,282			Deferred tax liabilities
Other non-current liabilities and accrued expenses			1,873				—				—				—				—				82				1,955			Other non current liabilities
			9,806				—				—				3,037				(257	)			(431	)			12,155			Non current liabilities
Accounts payable			10,031				—				—				(1,296	)			(618	)			70				8,187			Trade accounts payable and other
			—				—				—				1,297				—				1				1,298			Current tax payables
			—				—				—				357				—				—				357			Current provisions
Deferred taxes liabilities			3,395				—				—				(3,395	)			—				—				—
Bank overdrafts and other short-term borrowings			2,842				—				—				—				—				—				2,842			Short-term borrowings and other financial liabilities
			16,268				—				—				(3,037	)			(618	)			71				12,684
			—				—				—				—				—				108				108			Liabilities associated with assets held for sale
Total current liabilities			16,268				—				—				(3,037	)			(618	)			179				12,792			Current liabilities
Total liabilities			26,074				—				—				—				(875	)			(252	)			24,947			Total liabilities
TOTAL EQUITY AND LIABILITIES		€	44,175			€	—			€	—			€	—			€	(875	)		€	(261	)		€	43,039			TOTAL EQUITY AND LIABILITIES

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33.5.	Consolidated statement of cash flows

33.6.	NBC-Universal transaction under IFRS

		Year Ended
		December 31, 2004
		(In millions of
		euros)
Capital loss under French GAAP			(1,793	)
Cancellation of foreign currency translation adjustment as of January 1, 2004			2,490
Other IFRS adjustments, net			10
Capital gain under IFRS		€	707

33.7.	Principal adjustments

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(a)	Impact on the transitional statement of financial position as of January 1, 2004

(b)	Impact on the IFRS statement of earnings for the year ended December 31, 2004

(a)	Impact on the IFRS transitional statement of financial position as of January 1, 2004

(b)	Impact on the IFRS statement of earnings for the year ended December 31, 2004

	•	on initial recognition, the commitment to purchase minority interests is recognized as a financial liability for the present value of the purchase consideration under the put option or forward contract, offset mainly through minority interests and the balance through goodwill;
	•	subsequent changes in the value of the commitment are recognized in financial liabilities 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 purchase is recognized in “Other financial charges and income”; and

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	•	on expiry of the commitment, if the minority interests are not purchased, the entries previously recognized are reversed; if the minority interests are purchased the amount recognized in financial liabilities is reversed, offset by the cash outflow relating to the purchase of the minority interests.

(a)	Impact on the statement of financial position

	•	a €1,132 million increase in financial liabilities (with €342 million allocated to Long-term financial liabilities and €790 million to Short-term financial liabilities), comprising put options granted to the Republic of Morocco on 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 the Canal+ Group for €105 million;
	•	through a €442 million decrease in minority interests and a €537 million increase in goodwill.

	•	a €1,517 million impact on financial liabilities (with €414 million allocated to Long-term financial liabilities and €1,103 million to Short-term financial liabilities), 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 the Canal+ Group for €113 million;
	•	through a €336 million reduction in minority interests and a €995 million increase in goodwill.

	(b) Impact on the IFRS statement of earnings for the year ended December 31, 2004

	(a) Impact on the IFRS transitional statement of financial position as of January 1, 2004

	ORAs

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	OCEANEs

	(b) Impact on the IFRS statement of earnings for the year ended December 31, 2004

	(a) Impact on the transitional statement of financial position as of January 1, 2004

	(b) Impact on the statement of financial position as of December 31, 2004

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	•	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 a €417 million increase in “Property, plant and equipment”; and (ii) in liabilities, a €606 million increase in “Long-term borrowings and other financial liabilities”. Equity attributable to the equity holders of the parent is negatively impacted for €54 million. Earnings attributable to the equity holders of the parent for the period is negatively impacted for €4 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 a €886 million increase in “Financial assets” and (ii) in liabilities, the recognition of advance lease payments in “Other non current liabilities” for the same amount; the €45 million arrangement commission received by SFR 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.

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	Impact on the IFRS statement of financial position as of January 1 and December 31, 2004

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	•	group savings plan: immediately, on subscription; and
	•	stock option plans: over a 3-year period, by one-third block, in accordance with Vivendi plan rules.

	(a) Stock option plans

	•	rate applicable in year 1 of the plan: 100% of the first block (fully vested in the first year) + 50% of the second tranche (vested over 2 years) + 33.33% of the third tranche (vested over 3 years), that is 61.11%;
	•	rate applicable in year 2 of the plan: second half of the second tranche (vested over 2 years) + 33.33% of the third tranche (vested over 3 years), that is 27.78%; and
	•	rate applicable in year 3 of the plan: final third of the third tranche (vested over 3 years), that is 11.11%

	(b) Group savings plan

	(c) Impact on the IFRS statement of earnings for 2004

	(a) Recognition of “equipment” revenues

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	(b) Recognition of customer subsidies as a deduction from “equipment” revenues

	•	to new customers: “win” subsidies, representing an acquisition cost to the operator; and
	•	to existing customers: “loyalty” subsidies, representing retention cost to the operator.

	(c) Recognition of rollover minutes in pay monthly plans (“services” revenues)

	(d) Expected cost of loyalty programs

	•	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.

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33.8.	Principal reclassifications

	(a) Impact on the transitional statement of financial position as of January 1, 2004

										Liabilities				Equity
										associated				associated
						Assets held				with assets				with assets
		Note				for sale				held for sale				held for sale(1)
						(In millions of euros)
Vivendi Universal Entertainment			33.6.			€	13,784			€	(6,764	)		€	231
Vivendi Universal Publishing							101				(51	)			—
Other							12				—				—
						€	13,897			€	(6,815	)		€	231

(1)	Corresponds to the unrealized gains (losses) associated with assets held for sale.

						Liabilities				Equity
						associated				associated
		Assets held				with assets				with assets
		for sale				held for sale				held for sale
		(In millions of euros)
N.C. Numéricâble			180				(108	)			—
		€	180			€	(108	)		€	—

	(b) Impact of discontinued operations on the IFRS statement of earnings for the year ended December 31, 2004

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Note 34.	Supplemental disclosures required under US Generally Accepted Accounting Principles (US GAAP) and US Securities and Exchange Commission (SEC)

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34.1.	Condensed US GAAP Consolidated Financial Statements

34.1.1	Condensed US GAAP consolidated statement of earnings for the years ended December 31, 2005 and 2004

		Year Ended
		December 31,
		2005				2004
		(In millions of euros)
Revenues		€	20,156			€	21,208
Cost of revenues			(10,435	)			(11,429	)
Selling, general and administrative expenses			(6,214	)			(6,325	)
Other operating expenses			(196	)			(120	)
Earnings from operations			3,311				3,334
Other charges and income from ordinary activities			71				89
Income from equity affiliates			354				(96	)
Interest			(302	)			(532	)
Other financial charges and income			163				(403	)
Other income			406				1,984
Earnings from continuing operations before provision for income taxes			4,003				4,376
Provision for income taxes			(348	)			(337	)
Minority interests			(1,084	)			(1,102	)
Net earnings from continuing operations			2,571				2,937
Earnings from discontinued operations (net of taxes and of minority interests, respectively)			—				—
Cumulative effect of accounting changes			—				(16	)
Net earnings		€	2,571			€	2,921

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	Earnings per share

						Year Ended
						December 31,
		Note				2005				2004
Earnings (in millions of euros)
Net earnings from continuing operations before accounting changes						€	2,571			€	2,937
Cumulative effect of accounting changes							—				(16	)
Net earnings — basic							2,571				2,921
Interest expense on notes mandatorily redeemable for new shares of Vivendi			34.7.5				70				78
Net earnings — diluted							2,641				2,999
Number of shares (in millions)
Weighted average number of shares outstanding over the period — basic							1,077.9				1,071.5
Notes mandatorily redeemable for new shares of Vivendi (November 2005)			34.7.5				71.8				72.8
Vivendi stock option plans							8.9				6.7
Weighted average number of shares after dilutive effect							1,158.5				1,151.1
Per-share amount (in euros)
Net earnings from continuing operations before accounting changes per share							2.39				2.74
Cumulative effect of accounting changes per share							—				(0.01	)
Basic net earnings per share						€	2.39			€	2.73
Diluted net earnings per share						€	2.28			€	2.61

34.1.2	Condensed US GAAP consolidated statement of financial position as of December 31, 2005 and December 31, 2004

		December 31,				December 31,
		2005				2004
		(In millions of euros)
ASSETS
Cash and cash equivalents		€	2,902			€	3,159
Current content assets			444				418
Other current assets			6,647				6,542
			9,993				10,119
Assets held for sale			—				225
Current assets			9,993				10,344
Goodwill			12,668				12,470
Non current content assets			2,688				2,680
Other intangible assets			2,651				2,825
Investments in equity affiliates			6,662				5,580
Other non current assets			9,110				9,205
Non current assets			33,779				32,760
TOTAL ASSETS		€	43,772			€	43,104

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		December 31,				December 31,
		2005				2004
		(In millions of euros)
LIABILITIES AND EQUITY
Short-term borrowings and other financial liabilities		€	2,160			€	2,839
Other current liabilities			9,905				9,841
			12,065				12,680
Liabilities associated with assets held for sale			—				134
Current liabilities			12,065				12,814
Long-term borrowings and other financial liabilities			4,785				5,366
Other non current liabilities			6,083				7,783
Non current liabilities			10,868				13,149
Minority interests			3,009				2,929
Share capital			6,344				5,899
Comprehensive income			3,564				4,348
Other equity attributable to equity holders of the parent			7,922				3,965
Equity, attributable to equity holders of the parent			17,830				14,212
TOTAL LIABILITIES AND EQUITY		€	43,772			€	43,104

34.1.3	Condensed US GAAP statement of comprehensive income for the years ended December 31, 2005 and 2004

			Year Ended
			December 31,
			2005				2004
			(In millions of
			euros)
Net earnings				€2,571				€2,921
Other comprehensive income, net of taxes:
	Foreign currency translation adjustments			974				985
	Unrealized gains on equity securities			106				397	(a)
	Unrealized gains (losses) on cash flow hedges			(20	)			16
	Minimum pension liabilities adjustment			(67	)			29
Comprehensive income				€3,564				€4,348

(a)	Includes for 2004, €670 million of unrealized gains or losses on equity securities classified as available-for-sale and -€273 million related to the effect of the divestiture of Vivendi’s interest in VUE.

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34.1.4	Condensed US GAAP consolidated statement of cash flows for the years ended December 31, 2005 and 2004

			Year Ended
			December 31,
			2005				2004
			(In millions of
			euros)
Net cash provided by operating activities			€	3,552			€	4,788
Net cash provided by (used for) investing activities				(2,832	)			3,041
Net cash provided by (used for) financing activities				(1,014	)			(7,429	)
Foreign currency translation adjustments				37				33
	Change in cash and cash equivalents		€	(257	)		€	433
Cash and cash equivalents:
	At beginning of the year			3,159				2,726
	At end of the year			2,902				3,159

34.2.	Reconciliation of earnings and equity to US GAAP

34.2.1	Reconciliation of earnings attributable to equity holders of the parent to US GAAP

								Year Ended
								December 31,
				Note				2005				2004
								(In millions of
								euros)
IFRS earnings attributable to equity holders of the parent as reported in the Consolidated Statement of Earnings								€	3,154			€	3,767
	Adjustments to conform to US GAAP:
		Business combinations/goodwill/impairment			34.5				52				(391	)
		Divestiture of VUE and Cegetel			34.4				1				(136	)
		Intangible assets			34.6				(196	)			(136	)
		Financial instruments			34.7				(265	)			(84	)
		Employee benefit plans			34.8				(32	)			(59	)
		Share-based compensation			34.9				46				44
		Other			34.11				(45	)			(23	)
	Tax effect				34.10				(144	)			(45	)
US GAAP net earnings before cumulative effect of accounting changes									2,571				2,937
Cumulative effect of accounting changes									—				(16	)
US GAAP net earnings								€	2,571			€	2,921

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	Reconciliation of weighted average number of shares

		Year Ended December 31,
		2005				2004
Weighted average number of shares outstanding under IFRS			1,149,632,657				1,144,351,073
Reversal of the impact of the notes mandatorily redeemable for new shares of Vivendi before their conversion (November 2005)			(71,774,601	)			(72,822,148	)
Weighted average number of shares outstanding under US GAAP			1,077,858,056				1,071,528,925
Notes mandatorily redeemable for new shares of Vivendi (November 2005)			71,774,601				72,822,148
Vivendi stock option plans			8,893,705				6,713,341
Weighted average number of shares after dilutive effect under US GAAP			1,158,526,362				1,151,064,414

34.2.2	Reconciliation of equity attributable to Vivendi SA shareholders to US GAAP

								December 31,
												2004
				Note				2005				restated(a)
								(In millions of euros)
IFRS equity attributable to Vivendi SA shareholders as reported in the Consolidated Statement of Financial Position									€18,769				€15,449
	Adjustments to conform to US GAAP(a)
		Business combinations/goodwill/impairment			34.5				(89	)			220
		Divestiture of VUE and Cegetel			34.4				—				—
		Intangible assets			34.6				(455	)			(280	)
		Financial instruments			34.7				(11	)			(940	)
		Employee benefit plans			34.8				24				116
		Other			34.11				(47	)			36
	Tax effect(b)				34.10				(361	)			(389	)
US GAAP shareholders’ equity									€17,830				€14,212	(a)

(a)	For US GAAP, the Company’s shareholder’s equity as of December 31, 2004 has been restated to reflect certain adjustments relating to primary GAAP Consolidated Financial Statements for the year ended December 31, 2002. These adjustments taken as a whole resulted in a €271 million decrease in the previously reported shareholder’s equity as of December 31, 2004.
(b)	Including net deferred tax liabilities recorded in connection with the allocation to identifiable intangible assets of the cost of acquisition for 26% of SFR in 2003 and 16% of Maroc Telecom in 2005 (€324 million as of December 31, 2005 and €241 million as of December 31, 2004). Please refer to Notes 34.5.5 and 34.5.6, hereof.

34.3.	First time adoption of International Financial Reporting Standards (IFRS)

	—	Vivendi prepared the 2005 Consolidated Financial Statements, as discussed in Note 1 “Accounting policies and valuation method”, adopting all mandatory IFRS/ IFRIC (International Financial Reporting Interpretations Committee) standards and interpretations as of December 31, 2005. All these standards and interpretations, as applied by Vivendi, have been adopted by the EU. There are no significant differences between IFRS as adopted by the EU and IFRS as issued by the International Accounting Standards Board (IASB).

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	—	In addition, the following comparative information for the year ended December 31, 2004 were included in the Consolidated Financial Statements as of December 31, 2005: comparative statement of earnings, statement of financial position, statement of cash-flows and statement of changes in equity as of December 31, 2004, which have been prepared using the same basis of accounting.

34.3.1	Foreign currency translation adjustments

34.3.2	Unrecognized actuarial gains and losses related to employee benefit plans

34.3.3	Business combinations

	—	As permitted under French GAAP prior to December 31, 1999, goodwill could be recorded as a reduction of shareholders’ equity when the acquisition was paid for with equity securities, notably US Filter in 1999 and Canal+ in 1998 and 1999, whereas under US GAAP goodwill is always recognized as an asset.
	—	Additionally, under French GAAP, certain acquisitions, notably Havas in 1998 and Pathe in 1999, were accounted for as mergers. Under this method, goodwill is computed as the difference between the consideration paid and the net historical book value acquired. Under US GAAP applied until June 30, 2001, the Havas and Pathe acquisitions did not meet the criteria for pooling and, therefore, were accounted for as purchase business combinations. Accordingly, goodwill was computed as the excess of consideration paid over the fair value of assets acquired and liabilities assumed.

34.4.	Accounting treatment of the divestiture of VUE and Cegetel

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34.4.1	Divestiture of VUE

	Classification of VUE as discontinued

	Capital gain on the divestiture of VUE

	—	Under IFRS, for the purposes of this measurement, the carrying value did not include that portion of the cumulative translation adjustment which was reclassified to earnings at the time of divestiture. In addition, under IFRS, as a result of its reversal against retained earnings pursuant to IFRS 1, the cumulative foreign currency translation adjustments were nil as of January 1, 2004.
	—	Under US GAAP, for the purposes of this measurement, the carrying value also included that portion of the cumulative translation adjustment which was reclassified to earnings at the time of divestiture. As a consequence, the carrying value of VUE was reduced and a corresponding impairment loss of €920 million was recognized on December 31, 2003.

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		Year Ended
		December 31, 2004
		(In millions of euros)
Capital gain under IFRS			707
Reversal of cancellation of foreign currency translation adjustment as of January 1, 2004			(2,490	)
Difference in the carrying value of the divested assets			1,057
Difference in the foreign currency translation adjustment reclassified to net earnings			193
Reversal of the impairment recognized under US GAAP as of December 31, 2003			920
Other US GAAP adjustments, net			(10	)
Capital gain under US GAAP		€	377

34.4.2	Divestiture of Cegetel

	Classification of Cegetel as discontinued

	Capital gain on the divestiture of Cegetel

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34.4.3	Impacts on the statement of earnings for the years ended December 31, 2005 and December 31, 2004

		Year Ended
		December 31,
		2005				2004
		(In millions
		of euros)
Equity earnings of Cegetel SAS (up to 28.2%)		€	(28	)		€	(22	)
Equity earnings of VUE (up to 20%)			—				30
Income from equity affiliates		€	(28	)		€	8
Equity earnings of Cegetel SAS (up to 71.8%)		€	(29	)		€	(62	)
Capital gain realized on the divestiture of 71.8% of
Cegetel SAS (no tax impact)			121				—
Equity earnings of VUE (up to 80%)			—				132
Capital gain realized on the divestiture of 80% of VUE, net of tax of €244 million			—				707
Earnings from discontinued operations		€	92			€	777

		Year Ended December 31, 2005
						Cegetel SAS:
						operations from				Cegetel
						January 1 to				SAS
Format compliant with IFRS		IFRS				August 22, 2005				capital gain				US GAAP				Format compliant with US GAAP
		(in millions of euros)
Revenues		€	—			€	685							€	685			Revenues
Earnings from operations			—				(51	)			—				(51	)		Earnings from operations
Income from equity affiliates			(28	)			28				—				—			Income from equity affiliates
Earnings before interest and other financial charges and income and provision for income taxes			(28	)			(36	)			—				—
Interest and other financial charges and income			—				(2	)			—				(2	)		Interest and other financial charges and income
							—				110				110			Other income
Earnings from continuing operations before provision for income taxes			(28	)			(38	)			110				44			Earnings from continuing operations before provision for income taxes
Provision for income taxes			—				—				—				—			Provision for income taxes
							1				20				(9	)		Minority interests
Earnings from continuing operations			(28	)			(37	)			130				35			Net earnings from continuing operations
Earnings from discontinued operations			92				34				(126	)			—			Earnings from discontinued operations
Earnings		€	64
Attributable to:
Equity holders of the parent			34											€	35			Net earnings
Minority interests			30

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		Year Ended December 31, 2004
						VUE:								Cegetel SAS:
						operations from								operations for the
						January 1 to				VUE				year ended
Format compliant with IFRS		IFRS				May 11, 2004				capital gain				December 31, 2004				US GAAP				Format compliant with US GAAP
		(In millions of euros)
Revenues		€	—			€	2,322				€—				€1,000				3,322			Revenues
Earnings from operations			—				387				—				(67	)			320			Earnings from operations
Income from equity affiliates			8				(39	)			—				22				(9	)		Income from equity affiliates
Earnings before interest and other financial charges and income and provision for income taxes			8				348				—				(45	)			—
Interest and other financial charges and income			—				(4	)			—				(8	)			(12	)		Interest and other financial charges and income
							—				377				—				377			Other income
Earnings from continuing operations before provision for income taxes			8				344				377				(53	)			676			Earnings from continuing operations before provision for income taxes
Provision for income taxes			—				(124	)			—				—				(124	)		Provision for income taxes
							(32	)			—				(3	)			(19	)		Minority interests
Earnings from continuing operations			8				188				377				(56	)			533			Net earnings from continuing operations
Earnings from discontinued operations			777				(132	)			(707	)			62				—			Earnings from discontinued operations
Earnings		€	785
Attributable to:
Equity holders of the parent			801															€	533			Net earnings
Minority interests			(16	)

34.4.4	Reconciliation of cash flows from IFRS to US GAAP statements for the years ended December 31, 2005 and December 31, 2004

		Year Ended December 31, 2005
						Cegetel SAS:
						operations from
						January 1 to
		IFRS				August 22, 2005				US GAAP
		(In millions of euros)
Net cash provided by operating activities		€	—			€	(6	)		€	(6	)
Net cash provided by (used for) investing activities			—				(15	)			(15	)
Net cash provided by (used for) financing activities			—				21				21
Net cash related to discontinued operations			—				—				—
Change in cash and cash equivalents		€	—			€	—			€	—

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		Year Ended December 31, 2004
						Cegetel SAS:
						operations for the				VUE: operations
						year ended				from January 1 to
						December 31,				May 11,
		IFRS				2004				2004				US GAAP
		(In millions of euros)
Net cash provided by operating activities		€	—			€	150			€	400			€	550
Net cash provided by (used for) investing activities			—				(159	)			(544	)			(703	)
Net cash provided by (used for) financing activities			—				20				144	(a)			164
Net cash related to discontinued operations			11				(11	)			—				—
Change in cash and cash equivalents		€	11			€	—			€	—			€	11

(a)	Including foreign currency translation adjustments in the amount of €48 million.

34.5.	Business combinations, goodwill and impairment

34.5.1	Repurchase of minority interests

	—	Under IFRS, in the absence of any specific rules governing the repurchase of minority interests, Vivendi freezes the values of identifiable assets acquired and liabilities assumed at the date the control is obtained. Upon the acquisition of an additional interest in the subsidiary, Vivendi recognizes the difference between the purchase cost and the net book value of minority interests acquired as goodwill.
	—	Under US GAAP, the incremental portion of identifiable assets acquired and liabilities assumed is recorded at fair value, with any excess of purchase cost being allocated to goodwill.

34.5.2	Impairment of long-lived assets

	—	The US GAAP reporting unit may be at a higher level than an IFRS cash generating unit, as US GAAP has a “top down” approach in determining an entity’s reporting units as opposed to IFRS “bottom up” approach in determining a cash generating unit. Moreover, indefinite life intangible assets are tested for impairment separately under SFAS 142 and not as part of a reporting unit. Under IAS 36, indefinite life intangible assets are generally tested for impairment as part of a single cash-generating unit or a group of cash-generating units. The application by Vivendi of IAS 36 principles leads to no effective reconciling item.
	—	Under IAS 36, recoverable value of each of the Group’s operating units is compared to the carrying amount of the corresponding assets (including goodwill) and recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. If this is the case, recoverable amount is determined for the group of assets.
	—	SFAS 142 requires a two step-approach to perform impairment test for goodwill. Step one involves comparing the fair value of the reporting unit to its carrying value. This permits the identification of a potential impairment. Step two permits the determination of the amount of the goodwill impairment.

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		The entity is required to allocate the fair value of the reporting unit among the fair values of all the assets and liabilities in the reporting unit as if it had just been acquired a business combination. The residual goodwill arising from this exercise is the implied fair value of the goodwill and is compared with the carrying amount of that goodwill. If the carrying amount of the goodwill exceeds its implied fair value, then it is written down to the implied fair value. IAS 36 principles applied by Vivendi are described above.
	—	US GAAP do not permit the reversal of any impairment losses. Under IFRS, impairment losses recognized in respect of long-lived assets (other than goodwill) may be reversed in a later period if the recoverable amount becomes greater than the carrying amount, within the limit of impairment losses previously recognized.

	—	Upon adoption of the new standard, Vivendi completed its initial review for impairment, which required the allocation of goodwill and other intangible assets to various reporting units. The fair value of each reporting unit was compared to its carrying value to identify a potential impairment. When the fair value of the reporting unit was less than its carrying value, an impairment loss was recognized to the extent that the fair value of goodwill and other intangible assets within the reporting unit was less than its carrying value. Fair value of goodwill and other intangible assets was determined using a discounted cash flow analysis, supported by a market approach, reviewed by third-party appraisers. The total impairment resulting from the adoption of SFAS 142 was approximately €17.1 billion, which was recorded as a cumulative effect of a change in accounting principle in the first quarter of 2002. This loss primarily reflected the continued deterioration of the economy since December 2001, as well as the resulting decline in value of some media and telecom assets, which had occurred since the Vivendi, Seagram and Canal+ merger was announced in June 2000, combined with the impact of the increase in the future financing cost due to the Company’s liquidity issues in 2002.
	—	As of October 1, 2002, Vivendi performed its annual impairment review. In accordance with SFAS 142, the total impairment resulting from this annual impairment review of goodwill was approximately €16.1 billion, which was recorded as a charge in US GAAP earnings attributable to equity holders of the parent as of December 31, 2002. Fair value of other intangibles was determined using a discounted cash flow analysis, supported by a market approach, reviewed by third-party appraisers.
	—	In the fourth quarter of 2003, Vivendi performed its annual impairment review using the same methods. As a result, a €1,155 million impairment was recorded in US GAAP earnings attributable to equity holders of the parent as of December 31, 2003.
	—	In 2004, given the developments surrounding the ownership of the Elektrim Telekomunikacja (Telco) stake into PTC (please refer to Note 2.3. “Telco/PTC”), the carrying value of this investment was fully impaired in the US GAAP consolidated statement of financial position, as it has been in the primary GAAP consolidated statement of financial position since December 31, 2002. In 2001, the impairment related to Telco recognized under primary GAAP included an accrual for contingent losses (€300 million) that did not meet the FAS 5 criteria for accrual and therefore was not taken into account under US GAAP. No other material impairment losses were recognized as of December 31, 2004.
	—	In 2005, no material impairment losses were recognized in the US GAAP consolidated statement of earnings.

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34.5.3	Goodwill amortization

	—	Under IFRS, in accordance with IFRS 3, goodwill is not amortized from January 1, 2004.
	—	Under US GAAP, pursuant to SFAS 142, goodwill is not amortized from January 1, 2002, although goodwill arising from business combinations consummated after July 1, 2001 had not been amortized. This timing difference resulted in differences in book value of goodwill.

34.5.4	Detailed reconciliation impacts on the statement of financial position as of December 31, 2005 and December 31, 2004

	As of December 31, 2005

						Acquisition of
						16% of				Change in estimates								Total impact on
		Acquisition of				Maroc				of uncertainties								US GAAP
		26% of SFR				Telecom				related to income								statement of
		(2003)				(2005)				taxes in business				Other				financial
Format compliant with IFRS		(a)				(a)				combinations				differences				position
		(In millions of euros)
Please refer to the paragraph mentioned			34.5.5				34.5.6				34.10.2
ASSETS
Goodwill		€	(700	)		€	(151	)		€	(287	)		€	67			€	(1,071	)
Non current content assets			—				—				—				226	(b)			226
Other intangible assets			914				231				—				7				1,152
Investments in equity affiliates			—				—				—				(194	)(c)			(194	)
Other non current assets			88				—				—				(20	)			68
Non current assets			302				80				(287	)			86				181
Current content assets			—				—				—				—				—
Other current assets			—				—				—				—				—
Cash and cash equivalents			—				—				—				—				—
			—				—				—				—				—
Assets held for sale			—				—				—				—				—
Current assets			—				—				—				—				—
TOTAL ASSETS		€	302			€	80			€	(287	)		€	86			€	181

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						Acquisition of
						16% of				Change in estimates								Total impact on
		Acquisition of				Maroc				of uncertainties								US GAAP
		26% of SFR				Telecom				related to income								statement of
		(2003)				(2005)				taxes in business				Other				financial
Format compliant with IFRS		(a)				(a)				combinations				differences				position
		(In millions of euros)
EQUITY AND LIABILITIES
Equity, attributable to equity holders of the parent			(27	)			(1	)			(283	)			(221	)			(532	)(d)
Minority interests			—				—				(4	)			226				222
Long-term borrowings and other financial liabilities			—				—				—				—				—
Other non current liabilities			329				81				—				81				491
Non current liabilities			329				81				—				81				491
Short-term borrowings and other financial liabilities			—				—				—				—				—
Other current liabilities			—				—				—				—				—
Liabilities associated with assets held for sale			—				—				—				—				—
Current liabilities			—				—				—				—				—
Total liabilities			329				81				—				81				491
TOTAL EQUITY AND LIABILITIES		€	302			€	80			€	(287	)		€	86			€	181

										Total impact on
		Acquisition of								US GAAP
		26% of SFR				Other				statement of
Format compliant with IFRS		(2003)(a)				differences				financial position
		(In millions of euros)
Please refer to the paragraph mentioned			34.5.5
ASSETS
Goodwill		€	(700	)		€	147			€	(553	)
Non current content assets			—				249	(b)			249
Other intangible assets			914				—				914
Investments in equity affiliates			—				(192	)(c)			(192	)
Other non current assets			88				(20	)			68
Non current assets			302				184				486
Current content assets			—				—				—
Other current assets			—				—				—
Cash and cash equivalents			—				—				—
			—				—				—
Assets held for sale			—				45				45
Current assets			—				45				45
TOTAL ASSETS		€	302			€	229			€	531

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										Total impact on
		Acquisition of								US GAAP
		26% of SFR				Other				statement of
Format compliant with IFRS		(2003)(a)				differences				financial position
		(In millions of euros)
EQUITY AND LIABILITIES
Equity, attributable to equity holders of the parent			(27	)			(101	)			(128	)(e)
Minority interests			—				217				217
Long-term borrowings and other financial liabilities			—				—				—
Other non current liabilities			329				86				415
Non current liabilities			329				86				415
Short-term borrowings and other financial liabilities			—				—				—
Other current liabilities			—				—				—
			—				—				—
Liabilities associated with assets held for sale			—				27				27
Current liabilities			—				27				27
Total liabilities			329				113				442
TOTAL EQUITY AND LIABILITIES		€	302			€	229			€	531

(a)	Corresponding to the gross impact of the allocation of the cost of acquisition of a 26% interest in SFR and a 16% interest in Maroc Telecom, respectively. The amortization of the recognized intangible assets is disclosed in Note 34.6.2.
(b)	Corresponding to the difference in net book value of UMG publishing rights. A €270 million impairment charge was recognized under primary GAAP as of December 31, 2003. This impairment charge did not meet the criteria of SFAS 144, resulting in a difference in the carrying value of the publishing rights in US GAAP. Since January 1, 2004, this difference has been reduced by the supplemental amortization charge recognized under US GAAP. As of December 31, 2005 and December 31, 2004, the remaining balance of this difference amounted to €226 million and €249 million, respectively.
(c)	Corresponding essentially to a difference in the carrying value of the 20% interest in NBC Universal, resulting from the difference in the amount of impairment of goodwill losses recognized with respect to VUE between primary GAAP and US GAAP.
(d)	Including tax effects for -€443 million that are reported in the “tax effect” line item of the reconciliation of equity attributable to Vivendi SA shareholders to US GAAP as of December 31, 2005 (please refer to Note 34.2.2, above). Excluding those tax effects, the reconciling impact on shareholders’ equity amounted to -€89 million, as reported in Note 34.2.2.
(e)	Including tax effects for -€348 million that are reported in the “tax effect” line item of the reconciliation of equity attributable to Vivendi SA shareholders to US GAAP as of December 31, 2004 (please refer to Note 34.2.2, above). Excluding those tax effects, the reconciling impact on shareholders’ equity amounted to €220 million, as reported in Note 34.2.2.

	—	Under IFRS, the final amount of goodwill recognized (€3,121 million) corresponds to the excess of the acquisition cost (€4,011 million) over the carrying amount of the acquired minority interests (€890 million).
	—	Under US GAAP, the incremental portion of identifiable assets acquired and liabilities assumed was recorded at fair value, with any excess of the acquisition cost being allocated to goodwill. The allocation of the purchase price (€4,011 million) is set forth in the table below:

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		26% interest in SFR
		(In millions of euros)
Net assets acquired (26% interest)		€	917
SFR trade name			264
Customer relationship			650
Deferred tax assets			88
Deferred tax liabilities			(329	)
Goodwill			2,421
Purchase price		€	4,011

	—	Under IFRS, the final amount of goodwill recognized (€844 million) corresponds to the excess of the acquisition cost (€1,112 million) over the carrying amount of the acquired minority interests (€268 million).
	—	Under US GAAP, the incremental portion of identifiable assets acquired and liabilities assumed was recorded at fair value, with any excess of the acquisition cost being allocated to goodwill. The allocation of the purchase price (€1,112 million) is set forth in the table below:

		16% interest in Maroc Telecom
		(In millions of euros)
Net assets acquired (16% interest)		€	269
Licenses			101
Customer relationships			130
Deferred tax liabilities			(81	)
Goodwill			693
Purchase price		€	1,112

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	—	Under IFRS, pursuant to IAS 38, an intangible asset is recognised if, and only if: (a) it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity; and (b) the cost of the asset can be measured reliably. The assessment of the probability of expected future economic benefits is performed using reasonable and supportable assumptions that reflect management’s best estimate of the set of economic conditions that will exist over the useful life of the asset. With regards to sport broadcasting rights, those conditions are considered to be met. Where contracts provide for sports rights for multiple games over one season, those conditions are generally considered to be met for the entire season. Sport broadcasting rights acquired are reported as off-balance sheet commitments upon signing of the broadcasting agreement. They are recorded in the statement of financial position, classified as content assets, at their acquisition cost, on the opening of the broadcasting period of the related sport season or upon the first payment. They are expensed as they are broadcast. Expenses relating to sport broadcasting rights are included in the cost of revenues.
	—	Under US GAAP, pursuant to SFAS 63, a licensee reports an asset and a liability for the rights acquired and obligations incurred under a broadcasting license agreement when the license period begins and all of the following conditions have been met: (a) the cost of each program is known or reasonably determinable; (b) the program material has been accepted by the licensee in accordance with the conditions of the licensee agreement; and (c) the program is available for its first showing or telecast. Under US GAAP, as under IFRS, sport broadcasting rights acquired are reported as off-balance sheet commitments upon signing of the broadcasting agreement. However, such rights are recorded in the statement of financial position, classified as content assets, at their acquisition cost, when they are available for transmission. Similar to IFRS, these rights are expensed as they are broadcast and included in cost of revenues.

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34.6.2	Detailed reconciliation impacts on the statement of financial position as of December 31, 2005 and December 31, 2004

	As of December 31, 2005

						Amortization of
						intangible assets
						recognized in				Total impact on
						purchase price				US GAAP
		Sport				allocation of SFR				statement of
		broadcasting				and Maroc				financial
Format compliant with IFRS		rights				Telecom				position
		(In millions of euros)
Please refer to the paragraph mentioned			34.6.1				34.5.5 & 34.5.6
ASSETS
Goodwill		€	—			€	—			€	—
Non current content assets			—				—				—
Other intangible assets			—				(464	)			(464	)
Investments in equity affiliates			—				—				—
Other non current assets			(4	)			(88	)			(92	)
Non current assets			(4	)			(552	)			(556	)
Current content assets			(346	)			—				(346	)
Other current assets			(68	)			—				(68	)
Cash and cash equivalents			—				—				—
			(414	)			—				(414	)
Assets held for sale			—				—				—
Current assets			(414	)			—				(414	)
TOTAL ASSETS		€	(418	)		€	(552	)		€	(970	)
EQUITY AND LIABILITIES
Equity, attributable to equity holders of the parent			4				(378	)			(374	)(a)
Minority interests			5				—				5
Long-term borrowings and other financial liabilities			—				—				—
Other non current liabilities			—				(174	)			(174	)
Non current liabilities			—				(174	)			(174	)
Short-term borrowings and other financial liabilities			—				—				—
Other current liabilities			(427	)			—				(427	)
			(427	)			—				(427	)
Liabilities associated with assets held for sale			—				—				—
Current liabilities			(427	)			—				(427	)
Total liabilities			(427	)			(174	)			(601	)
TOTAL EQUITY AND LIABILITIES		€	(418	)		€	(552	)		€	(970	)

(a)	Including tax effects for €81 million that are reported in the “tax effect” line item of the reconciliation of equity attributable to Vivendi SA shareholders to US GAAP as of December 31, 2005 (please refer to Note 34.2.2, above). Excluding those tax effects, the reconciling impact on shareholders’ equity amounted to -€455 million, as reported in Note 34.2.2.

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	As of December 31, 2004

						Amortization of								Total impact on
						intangible assets								US GAAP
		Sport				recognized in								statement of
		broadcasting				purchase price				Other				financial
Format compliant with IFRS		rights				allocation of SFR				differences				position
		(In millions of euros)
Please refer to the paragraph mentioned			34.6.1				34.5.5
ASSETS
Goodwill		€	—			€	—			€	—			€	—
Non current content assets			—				—				—				—
Other intangible assets			—				(285	)			5				(280	)
Investments in equity affiliates			—				—				—				—
Other non current assets			—				(88	)			(2	)			(90	)
Non current assets			—				(373	)			3				(370	)
Current content assets			(161	)			—				—				(161	)
Other current assets			(31	)			—				—				(31	)
Cash and cash equivalents			—				—				—				—
			(192	)			—				—				(192	)
Assets held for sale			—				—				—				—
Current assets			(192	)			—				—				(192	)
TOTAL ASSETS		€	(192	)		€	(373	)		€	3			€	(562	)
EQUITY AND LIABILITIES
Equity, attributable to equity holders of the parent			—				(264	)			3				(261	)(a)
Minority interests			—				—				—				—
Long-term borrowings and other financial liabilities			—				—				—				—
Other non current liabilities			—				(109	)			—				(109	)
Non current liabilities			—				(109	)			—				(109	)
Short-term borrowings and other financial liabilities			—				—				—				—
Other current liabilities			(192	)			—				—				(192	)
			(192	)			—				—				(192	)
Liabilities associated with assets held for sale			—				—				—				—
Current liabilities			(192	)			—				—				(192	)
Total liabilities			(192	)			(109	)			—				(301	)
TOTAL EQUITY AND LIABILITIES		€	(192	)		€	(373	)		€	3			€	(562	)

(a)	Including tax effects for €19 million that are reported in the “tax effect” line item of the reconciliation of equity attributable to Vivendi SA shareholders to US GAAP as of December 31, 2004 (please refer to Note 34.2.2, above). Excluding those tax effects, the reconciling impact on shareholders’ equity amounted to -€280 million, as reported in Note 34.2.2.

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34.7.	Financial Instruments

34.7.1	Commitments to purchase minority interests

	—	Under IFRS, commitments granted by Vivendi to shareholders of certain of its fully consolidated subsidiaries to purchase their minority interests are reported, in accordance with IAS 32, as financial liabilities at the present value of the purchase consideration. These purchase commitments may be conditional (e.g. put options) or firm (e.g. forward purchase contract). In the absence of guidance provided by IFRS 3 on business combinations and pending publication of an IASB/IFRIC interpretation, Vivendi records the difference arising on initial recognition of these options, between the carrying amount of the minority interests and the present value of the purchase consideration, and the subsequent change in this present value (with the exception of the undiscounting effect or expected losses) through goodwill.
	—	Under US GAAP (SFAS 150), a financial instrument mandatorily redeemable in cash or against any other assets issued after June 15, 2003 must be recorded as a liability (or as an asset in some cases). Commitments granted by Vivendi to shareholders of certain of its fully consolidated subsidiaries to purchase their minority interests are considered as such. Except for share purchase agreement in the form of a firm commitment (e.g. forward purchase contract), their fair market value is generally estimated to be nil. However, any potential losses expected to be incurred upon the exercise of put options correspond to the negative fair value of the options, which are recorded through income and classified as financial liabilities in the statement of financial position under US GAAP.

34.7.2	Financial instruments with characteristics of both liabilities and equity

	—	Under IFRS, the various components of these instruments are accounted for in borrowings and other financial liabilities and in equity, according to their classification under IAS 32. The component classified as borrowings and other financial liabilities 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 having similar characteristics (maturity, cash flows) except for the option for conversion or redemption in shares. The component classified as equity is defined as the difference between the fair value of the instrument and the fair value of the financial liability component.
	—	Under US GAAP (SFAS 150), the financial instruments mandatorily redeemable in cash or against any other assets issued after June 15, 2003 must be recorded as a liability (or as an asset in some cases).

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34.7.3	Detailed reconciliation impacts on the statement of financial position as of December 31, 2005 and December 31, 2004

	As of December 31, 2005

										Total impact on
										US GAAP
		Put options to								statement of
		purchase minority				Other				financial
Format compliant with IFRS		interests				differences				position
		(In millions of euros)
Please refer to the paragraph mentioned			34.7.4
ASSETS
Goodwill		€	(57	)		€	—			€	(57	)
Non current content assets			—				—				—
Other intangible assets			—				—				—
Investments in equity affiliates			—				—				—
Other non current assets			—				—				—
Non current assets			(57	)			—				(57	)
Current content assets											—
Other current assets			—				(6	)			(6	)
Cash and cash equivalents			—				—				—
			—				(6	)			(6	)
Assets held for sale			—				—				—
Current assets			—				(6	)			(6	)
TOTAL ASSETS		€	(57	)		€	(6	)		€	(63	)
EQUITY AND LIABILITIES
Equity, attributable to equity holders of the parent			(6	)			(5	)			(11	)
Minority interests			(3	)			—				(3	)
Long-term borrowings and other financial liabilities			—				—				—
Other non current liabilities			6				(1	)			5
Non current liabilities			6				(1	)			5
Short-term borrowings and other financial liabilities			(55	)			—				(55	)
Other current liabilities			1				—				1
			(54	)			—				(54	)
Liabilities associated with assets held for sale			—				—				—
Current liabilities			(54	)			—				(54	)
Total liabilities			(48	)			(1	)			(49	)
TOTAL EQUITY AND LIABILITIES		€	(57	)		€	(6	)		€	(63	)

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														Total impact on
														US GAAP
		Put options to				ORA								statement of
		purchase				(November				Other				financial
Format compliant with IFRS		minority interests				2005)				differences				position
		(In millions of euros)
Please refer to the paragraph mentioned			34.7.4				34.7.5
ASSETS
Goodwill			€(129	)		€	—			€	—			€	(129	)
Non current content assets			—				—				—				—
Other intangible assets			—				—				—				—
Investments in equity affiliates			—				—				—				—
Other non current assets			—				—				—				—
Non current assets			(129	)			—				—				(129	)
Current content assets			—				—				—				—
Other current assets			—				70				(4	)			66
Cash and cash equivalents			—				—				—				—
			—				70				(4	)			66
Assets held for sale			—				—				—				—
Current assets			—				70				(4	)			66
TOTAL ASSETS			€(129	)		€	70			€	(4	)		€	(63	)
EQUITY AND LIABILITIES
Equity, attributable to equity holders of the parent			(6	)			(930	)			(4	)			(940	)
Minority interests			106				—				—				106
Long-term borrowings and other financial liabilities			(231	)			—				—				(231	)
Other non current liabilities			—				1,000				—				1,000
Non current liabilities			(231	)			1,000				—				769
Short-term borrowings and other financial liabilities			(3	)			—				—				(3	)
Other current liabilities			5				—				—				5
			2				—				—				2
Liabilities associated with assets held for sale			—				—				—				—
Current liabilities			2				—				—				2
Total liabilities			(229	)			1,000				—				771
TOTAL EQUITY AND LIABILITIES			€(129	)		€	70			€	(4	)		€	(63	)

34.7.4	Analysis of the commitments to purchase minority interests

	•	a €108 million increase in financial liabilities (with €39 million allocated to long-term financial liabilities and €69 million to short-term financial liabilities), with respect to put options granted to various third parties by the Canal+ Group;
	•	principally against a €3 million increase of minority interests and a €57 million increase of goodwill.

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	—	a €417 million increase in financial liabilities (with €414 million allocated to long-term financial liabilities and €3 million to short-term financial liabilities), with put options granted to SNCF on 35% of the share capital of Cegetel SAS for €304 million and to various third parties by the Canal+ Group for €113 million;
	—	principally against a €106 million reduction of minority interests and a €129 million increase in goodwill.

34.7.5	ORA November 2005

	—	Under IFRS, the notes mandatorily redeemable for new shares of Vivendi issued in November 2002 and redeemed in November 2005 were recognized in additional paid in capital at nominal value (€1,000 million). Due to the advance payment of interest in full on issuance (i.e. €233 million), the liability component was nil. Issuance costs and prepaid interest were deducted from reserves.
	—	Under US GAAP, these notes were recorded as a liability for €1,000 million. However, the Company separated these notes from other components of the Company’s debt since the extinguishment of the notes did not require the transfer or use of the Company’s assets unlike the Company’s other debt. The related interests were recognized in the interest item in the statement of earnings (for €70 million in 2005 and €78 million in 2004).

34.8.	Employee benefit plans

34.8.1	Unrecognized actuarial gains and losses

	—	Under IFRS, in accordance with the provisions of IFRS 1, Vivendi recorded unrecognized actuarial gains and losses against consolidated equity as of January 1, 2004.
	—	Under US GAAP, those actuarial gains and losses are recognized over the average remaining working lives of the employees.

34.8.2	Recognition of a plan asset

	—	US GAAP require the recognition of a liability when the accumulated benefit obligation exceeds the fair value of plan assets by an amount in excess of any accrued or prepaid pension cost reported, i.e. the minimum liability adjustment. The additional liability is offset by an intangible asset, up to the amount of any unamortized prior service cost and the excess, if any, is recorded as a reduction in shareholders’ equity, net of tax. US GAAP do not permit the recognition of an asset if the fair value of the plan assets is less than the accumulated benefit obligation.
	—	Under IFRS, there is no such requirement.

34.8.3	Pension past service costs

	—	Under IFRS, in accordance with IAS 19, pension past service costs are spread over the average remaining service period of employees covered by the plan. In accordance with the provisions of

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		IFRS 1, on January 1, 2004, Vivendi recorded unrecognized past service costs related to retirees against consolidated equity.
	—	Under US GAAP, pension past service costs are spread over the expected average residual life of employees covered by the plan.

34.8.4	Classification of the financial component of the cost of employee benefit plans

	—	Under IFRS, in accordance with IAS 19, Vivendi decided to record the financial component of the cost of employee benefit as a financial charge or income. The financial component of this cost is comprised of the undiscounting effect of the benefit obligation and of the expected return on plan assets. This presentation leads to an improvement in earnings from operations due to a decline in financial charges of the same amount. This presentation has no impact on the earnings attributable to equity holders of the parent.
	—	Under US GAAP, the entire cost of employee benefits is accounted for as a charge recorded in earnings from operations.

		Pension								Postretirement
		Benefits								Benefits
		2005				2004				2005				2004
		(In millions of euros)
IFRS net accrued liability in Consolidated Financial Statements		€	(473	)		€	(541	)		€	(216	)		€	(194	)
Impact of the differences described above			304				299				51				47
US GAAP net accrued liability recognized		€	(169	)		€	(242	)		€	(165	)		€	(147	)
Minimum liability adjustment			(353	)			(312	)			—				—
US GAAP net accrued liability		€	(522	)		€	(554	)		€	(165	)		€	(147	)
of which
Prepaid benefit cost			31				24				—				—
Accrued benefit liability			(553	)			(578	)			(165	)			(147	)

	IFRS

		Pension								Postretirement
		Benefits								Benefits
		2005				2004				2005				2004
		(In millions of euros)
Service cost		€	15			€	27			€	—			€	1
Interest cost			64				72				11				11
Expected return on plan assets			(40	)			(46	)			—				—
Amortization of prior service costs			2				1				—				—
Amortization of actuarial gains and losses			1				6				—				—
Curtailments/settlements and special termination benefits			5				(21	)			—				—
Write-off of prepaid on multi-employer scheme overtime			—				—				—				—
Net benefit cost		€	47			€	39			€	11			€	12

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	IFRS to US GAAP

		Pension								Postretirement
		Benefits								Benefits
		2005				2004				2005				2004
		(In millions of euros)
Service cost		€	—			€	—			€	—			€	—
Interest cost			—				—				—				—
Expected return on plan assets			—				—				—				—
Amortization of prior service costs			1				1				(1	)			(1	)
Amortization of actuarial gains and losses			17				21				3				3
Curtailments/settlements and special termination benefits			6				45				—				—
Write-off of prepaid on multi-employer scheme overtime			—				—				—				—
Net benefit cost		€	24			€	67			€	2			€	2

	US GAAP

		Pension								Postretirement
		Benefits								Benefits
		2005				2004				2005				2004
		(In millions of euros)
Service cost		€	15			€	27			€	—			€	1
Interest cost			64				72				11				11
Expected return on plan assets			(40	)			(46	)			—				—
Amortization of prior service costs			3				2				(1	)			(1	)
Amortization of actuarial gains and losses			18				27				3				3
Curtailments/settlements and special termination benefits			11				24				—				—
Write-off of prepaid on multi-employer scheme overtime			—				—				—				—
Net benefit cost		€	71			€	106			€	13			€	14

34.9.	Share-based compensation

	—	Under IFRS, this is valued at the fair value of the Vivendi shares or equity derivatives issued. In the case of stock options granted to management or employees, the compensation expense is equal to the value of the option at grant date, measured by using a binomial model. In the case of increases in capital reserved for employees and retirees within the group savings plan, the compensation expense is equal to the discount on the subscription price, being equal to the difference between the share subscription price and the share price at the grant date (a maximum discount of 20% under French law). This deferred compensation is amortized to earnings over the vesting period.
	—	Under US GAAP, plans that sell or grant common shares or stock options to employees are qualified as compensatory if such plans are not open to substantially all employees and do not require the employee to make a reasonable investment in the shares, usually defined as no less than 85% of the market value at the grant date. If a stock purchase plan is deemed to be compensatory, compensation arising from such plan is measured based on the intrinsic value of the shares sold or options granted to employees. If a stock option plan is deemed to be compensatory, the compensation expense is calculated as the difference between the fair value of the stock at the grant date and the strike price. The compensation expense for compensatory share-based compensation plans is generally recognized over the vesting period. Vivendi accounts for its stock compensation arrangements under the intrinsic value method in accordance with Accounting Principles Board (APB) opinion No 25, Accounting for

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		stock issued to employees, and FASB interpretation No 44, Accounting for Certain Transactions Involving Stock Compensation. The Company has adopted the disclosure-only provisions of FASB Statement No 123, Accounting for Share-based Compensation. If Vivendi had elected to recognize a compensation expense for the granting of options under stock option plans based on the fair value at the grant date consistent with the methodology prescribed by Statement No 123, earnings attributable to equity holders of the parent and earnings attributable to equity holders of the parent per share would have been reported at the following pro forma amounts.

			Year Ended
			December 31,
			2005				2004
			(In millions of
			euros, except per
			share amount)
Net earnings under US GAAP as reported			€	2,571			€	2,921
	Add: Share based employee compensation expense included in reported net earnings, net of related tax effects			3				13
	Deduct: Total share based employee compensation expense determined using the fair value method for all awards, net of related tax effects			(48	)			(91	)
Pro forma net earnings under US GAAP			€	2,526			€	2,843
Basic net earnings per share
	As reported		€	2.39			€	2.73
	Pro forma		€	2.34			€	2.65
Diluted net earnings per share
	As reported		€	2.28			€	2.61
	Pro forma		€	2.24			€	2.54

34.10.	Deferred taxes

34.10.1	Adjustment of deferred tax assets originally not accounted for in a business combination

	—	Under IFRS, pursuant to IAS 12, when an acquirer did not recognise deferred tax assets of the acquiree as identifiable assets at the date of a business combination and those deferred tax assets are subsequently recognised by the acquirer, the resulting deferred tax income is recognised in the income statement. In addition, the acquirer:

	(a) adjusts the gross carrying amount of the goodwill and the related accumulated amortization to the amounts that would have been recorded if the deferred tax asset had been recognized as an identifiable asset at the date of the business combination; and
	(b) recognizes the reduction in the net carrying amount of the goodwill as an expense.

	—	Under US GAAP, to the extent that an acquired tax benefit was not recognized (i.e. valuation allowance was established) at the acquisition date, when subsequently recognized, it first reduces goodwill and then other non current assets. Once these assets are reduced to zero, the benefit is included in income as a reduction of income tax expense.

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	—	In 2005, under IFRS, a tax benefit of €48 million was credited to income upon recognition of deferred tax assets originally not accounted for in prior business combinations. This benefit was offset by a reduction of goodwill recorded as an expense for the same amount. Under US GAAP, this tax benefit was credited to goodwill for €48 million, hence no reconciling difference was generated on the statement of financial position.
	—	In 2004, no material reconciling difference was generated.

34.10.2	Changes in estimates of uncertainties related to income taxes in a business combination

	—	Under IFRS, pursuant to IAS 12, adjustments resulting from the post-acquisition changes in estimates of income tax uncertainties existing or arising at the time of a business combination are recognized in the income statement.
	—	Under US GAAP, such adjustments reduce or increase goodwill. If goodwill is eliminated, any remaining adjustment should be applied first to reduce to nil other identifiable non current assets related to the acquisition and then to income.
	—	In 2005, under IFRS, a tax benefit of €273 million was credited to income due to adjustments resulting from changes in estimates of income tax uncertainties, whereas under US GAAP, those adjustments were credited to goodwill, which generated a reconciling difference of €287 million (after taking into account the related foreign currency translation adjustment for €14 million) on the statement of financial position.
	—	In 2004, no material reconciling difference was generated.

34.10.3	Changes in deferred taxes originally charged or credited to equity

	—	Under IFRS, consistent with the initial treatment, IAS 12 requires that the resulting change in deferred taxes be charged or credited directly to equity.
	—	Under US GAAP, FAS 109 requires allocation of the resulting change in deferred taxes to continuing operations, i.e. in the statement of earnings.
	—	In 2005, €48 million were credited to equity under IFRS, and to tax income under US GAAP.
	—	In 2004, no material reconciling difference was generated.

34.11.	Other

34.11.1	Restructuring reserve

	—	Under IFRS, if a detailed formal plan is announced or implementation of such a plan has started, a constructive obligation to restructure being arisen;
	—	Under US GAAP, when a transaction or event occurs that leaves an entity little or no discretion to avoid the future transfer or use of assets to settle the liability; an exit or disposal plan, by itself, does not create a present obligation to others for costs expected to be incurred under the plan.

	—	a “voluntary measure” restructuring provision is based, under IFRS on the number of employees that could accept the plan, whereas under US GAAP it is based on the number of employees that have accepted the plan;

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	—	a provision for rental costs of vacant location is recognized, under IFRS when it is probable that the location will be vacant, whereas under US GAAP when employees have left the location.

			December 31,
			2005				2004
			(In millions
			of euros)
IFRS restructuring reserve:				73				124
	Adjustments to US GAAP
	Maroc Telecom voluntary departure plan			—				(14	)
	Reorganisation of Cegetel’s network and service departments			—				(8	)
	Other			(2	)			(5	)
US GAAP restructuring reserve			€	71			€	97

34.12.	Other disclosure required under US GAAP and SEC regulations

34.12.1	US GAAP goodwill as of December 31, 2005 and December 31, 2004

														Change in
														foreign currency
		Goodwill as of								Changes in				translation				Goodwill as of
		December 31,				Impairment				Consolidation				adjustments				December 31,
		2004				losses				Scope				and other				2005
		(In millions of euros)
Universal Music Group		€	3,301			€	(2	)		€	—			€	147			€	3,446
Vivendi Games			83				—				37				19				139
Canal+ Group			3,781				3				62				—				3,846
SFR			3,650				—				58				5				3,713
Maroc Telecom			1,655				—				(174	)			43				1,524
Non core operations			—				—				—				—				—
Total		€	12,470			€	1			€	(17	)		€	214			€	12,668

34.12.2	US GAAP content assets as of December 31, 2005 and December 31, 2004

		Content				Accumulated
		assets,				amortization and				Content
December 31, 2005		gross				impairment losses				assets
		(In millions of euros)
Music catalogs and publishing rights		€	5,350			€	(3,135	)		€	2,215
Advances to artists and repertoire owners			366				—				366
Sports rights			9				—				9
Film and television costs			3,697				(3,188	)			509
Games advances			185				(152	)			33
Content assets		€	9,607			€	(6,475	)		€	3,132
Deduction of current content assets			(637	)			193				(444	)
Non current content assets		€	8,970			€	(6,282	)		€	2,688

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		Content				Accumulated
		assets,				amortization and				Content
December 31, 2004		gross				impairment losses				assets
		(In millions of euros)
Music catalogs and publishing rights		€	4,693			€	(2,534	)		€	2,159
Advances to artists and repertoire owners			321				—				321
Sports rights			26				—				26
Film and television costs			3,529				(2,972	)			557
Games advances			155				(120	)			35
Content assets		€	8,724			€	(5,626	)		€	3,098
Deduction of current content assets			(568	)			150				(418	)
Non current content assets		€	8,156			€	(5,476	)		€	2,680

34.12.3	US GAAP other intangible assets as of December 31, 2005 and December 31, 2004

						Accumulated
		Other intangible				amortization and				Other intangible
December 31, 2005		assets, gross				impairment losses				assets
		(In millions of euros)
Software			2,089				(1,431	)		€	658
Telecom licenses			1,091				(168	)			923
Trade names and customer relationships (a)			1,280				(642	)			638
Other			925				(493	)			432
		€	5,385			€	(2,734	)		€	2,651

						Accumulated
		Other intangible				amortization and				Other intangible
December 31, 2004		assets, gross				impairment losses				assets
		(In millions of euros)
Software			2,208				(1,457	)		€	751
Telecom licenses			970				(89	)			881
Trade names and customer relationships			1,116				(436	)			680
Other			1,039				(526	)			513
		€	5,333			€	(2,508	)		€	2,825

(a)	Includes SFR and Maroc Telecom customer relationships (gross value of €650 million and €134 million respectively as of December 31, 2005), and SFR trade name for €264 million, which, as an indefinite-lived intangible asset, is not amortized.

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34.12.4	US GAAP financial information related to NBC Universal

		Year Ended				Year Ended
		December 31, 2005				December 31, 2004
		(In millions of euros)
Revenues		€	11,310			€	8,139
Cost of revenues			(6,980	)			(5,477	)
Earnings attributable to equity holders of the parent			1,831				958
Current assets			4,155				4,433
Non-current assets			22,652				21,492
Total asset		€	26,807			€	25,925
Current liabilities			4,455				3,587
Non-current liabilities			3,376				4,870
Minority interest			28				1,588	(a)
Shareholders’ equity			18,948				15,880
Total liabilities and shareholders’ equity		€	26,807			€	25,925

(a)	Includes VUE Class B preferred interests.

34.13.	New accounting standards to be applied by the Company from January 1, 2006

34.13.1	SFAS No. 123R “Share-Based Payment”

34.13.2	SFAS No. 154 “Accounting Changes and Error Corrections”

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34.14.	Subsequent events

34.14.1	Settlement of tax dispute over DuPont Shares and Sale of DuPont Shares

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	Vivendi, S.A.

	By:	/s/ Jean-Bernard Lévy

	Name: Jean-Bernard Lévy

	Title:  Chairman of the management board

	and Chief Executive Officer