Vivendi Se · EURONEXT:VIV
Vivendi — Vivendi Universal — Merger or Acquisition (May 2004)
30 slides from Vivendi's merger presentation, May 13, 2004
Slide 1: Jean-Bernard Levy, Vivendi Universal Chief Operating Officer
Jean-Bernard LEVY Vivendi Universal Chief Operating Officer IMPORTANT NOTICE: INVESTORS ARE STRONGLY URGED TO READ THE IMPORTANT DISCLAIMER AT THE END OF THIS PRESENTATION. May 13, 2004
Slide 2: Overview of NBC Universal Merger
Overview of NBC Universal Merger
Slide 3: Valuation
Valuation VUE valued at $14.2 billion * VU receives 18.5% of NBC Universal (GE 80%, MEI 1.5%) $5.9 billion reduction in net debt $3.4 billion net cash proceeds NBC Universal estimated value of $43 billion pre synergies * Includes assets contributed to NBC Universal that are held outside of VUE
Slide 4: A Compelling Strategic Combination
A Compelling Strategic Combination A Compelling Strategic Combination One of the world's most profitable and fastest-growing media companies, offering consumers and advertisers broad reach, compelling brands and superior operational expertise compelling brands and superior operational expertise comp
Slide 5: NBC Universal Profile
NBC Universal Profile 2003 Pro forma Financials Revenues $13 billion EBITDA $3.3 billion Operating Margins > 20% Debt $1.7 billion Targeted synergies of $400-$500 million per year Broad balance of revenue sources including: Advertising ~ 50% Subscriber Fees/Other Recurring Revenues ~ 50% Highest ope
Slide 6: NBC Universal Pro Forma Projections
NBC Universal Pro Forma Projections 2003 2004 2005 Rev. 13 14 15 Op. Income 3 3.2 3.6 Revenue Operating income $13B $15B $15B $3.0B $3.2B $3.6B 2003 Pro Forma 2004 Pro Forma Estimated 2005 Estimated Olympics Source: Vivendi Universal and General Electric $ in billions
Slide 7: Benefits of the Merger
Benefits Of The Merger Revenue Synergies of ~ $100 million Pre-eminent promotion engine Content drives new platforms Ad sales opportunity Combined TV production Cost savings of ~ $350 million Advertising and promotion Sourcing Program development Overlapping Structures Corporate Support Information
Slide 8: Synergies on Track
Synergies on Track $100 million in 2004 ..... ~90% identified $300 million in 2005 ..... ~80% identified $400 million total synergies in 18 months $400 to $500 million annually by 2006 Source: General Electric
Slide 9: Long term partnership with NBC Universal
Long term partnership with NBC Universal Relationship between Vivendi Universal, a European based media company and NBC Universal, a US media company, provides opportunities to strengthen commercial agreements Canal + Group Universal Music Group Vivendi Universal Games Vivendi Universal has three se
Slide 10: Flexible, Guaranteed Exit at Fair Market Value
Flexible, Guaranteed Exit at Fair Market Value Exit windows selected by Vivendi Universal Vivendi Universal can choose to sell during selected windows each year from 2006 to 2010 Detailed mechanism to provide Vivendi Universal with liquidity Once Vivendi Universal decides to exit, GE must either agr
Slide 11: Impact of the Transaction on Vivendi Universal
Impact of the Transaction on Vivendi Universal
Slide 12: Ownership Structure of NBC Universal
Ownership Structure of NBC Universal General Electric Co. Universal Studios Holding Vivendi Universal Matsushita Electronic, Inc. (MEI) 92.3% 7.7% NBC Universal 80% 20% NBC VUE 100% 94.6% * InterActiveCorp 5.4% * VU has exercised its call right to acquire Barry Diller's 1.5% stake for $275 million a
Slide 13: Estimated Transaction Impact on VU's Net Debt
Estimated Transaction Impact on VU's Net Debt as of May 11,2004 * Does not include the $275 million payment for Barry Diller's 1.5% stake in VUE.
Slide 14: Estimated impact on VU's P&L and Shareholders' Equity
* Foreign currency loss is an estimated loss based on an exchange rate of 1 euro = $1.185 Estimated impact on VU's P&L and Shareholders' Equity Estimated Impact on VU's P&L (Based on Net Book Value as of December 31, 2003, post impairment) In US$ billions Pre tax profit 0.9 Tax (substantially all no
Slide 15: Accounting impact of the transaction
Accounting impact of the transaction Accounting treatment: VUE is consolidated until May 11, 2004 The 20%* stake in NBC Universal is accounted for under the equity method of accounting from May 12, 2004 New contingent liability: If NBC Universal sells all or a significant portion of Universal Parks
Slide 16: Defeasance of Class A Preferred Shares' Covenants
Defeasance of Class A Preferred Shares' Covenants Class A Preferred Shares remain in VUE, now part of NBC Universal, after the defeasance of the covenants through letters of credit issued by Royal Bank of Scotland and Citigroup to InterActiveCorp. These letters of credit are counter-guaranteed by a
Slide 17: Transfer of Class B Preferred Shares
Transfer of Class B Preferred Shares $ 1.8 billion, accreted value, of Class B Preferred Shares remain in VUE, now part of NBC Universal Vivendi Universal retains the economic responsibility for 94.56% of the after-tax cost of the cash coupons 3.6% cash interest p.a. $.3 billion NPV, net of taxes 56
Slide 18: Net Cash Adjustment
Net Cash Adjustment At closing, VUE's available net cash of $.6 billion as of September 30, 2003, has been retained by VUE's former shareholders VUE's net cash generated between October 1, 2003, and May 11, 2004, (approximately $.7 billion) is to be retained by VUE Net cash generated between October
Slide 19: Net proceeds used to repay bank facilities; new credit facility
Net proceeds of approximately $5.9 billion from the NBC Universal transaction has been used to repay or cancel the three existing secured bank facilities: 3 billion euro and 2.5 billion euro facilities and the £136 million UMO facility New 2.7 billion euro unsecured credit facility is available to b
Slide 20: Creates value for Vivendi Universal Shareholders
Creates value for Vivendi Universal Shareholders Creates an exceptional media company NBC Universal transaction estimated value of $43 billion Unique opportunity to merge complementary assets Upside from synergies Strengthen VUE's assets to achieve a critical size Risk reduced through revenue divers
Slide 21: Appendix
——————_— Appendix
Slide 22: Competitive Position
Competitive Position Source: MSDW Research and General Electric 2003E ($ Billion) $13B $16B $12B $18B $17B Profitable ... Diversified ... Growing Cable Ad Sales Cable Fees Broadcast Film & TV Total Sales $13B $27B $42B $17B $27B Op. Profit % >20% 19% 14% 12% 11%
Slide 23: Pro-forma Revenue
Pro-forma Revenue Network & Stations $5.7 $0 $5.7 Motion Picture $0 $4.1 $4.1 TV Production & Synd. $0.3 $1.0 $1.3 Cable Networks $0.7 $1.2 $1.9 Parks & Resorts $0 $0.3 $0.3 TOTAL REVENUE $6.7 $6.6 ~$13.3 Source - Vivendi Universal and General Electric ~ $13 Complimentary and Diverse ... Great Combi
Slide 24: Motion Pictures
Successful Box Office Record Five $100million+ Titles in '03 Robust Talent Pipeline Valuable Library of ~5,000 Titles Excellent Management Team with Strong Track Record and Operating Discipline Synergy Opportunities: Cross-platform Marketing & Promotion Content for Emerging Distribution Pipes (VOD,
Slide 25: Motion Pictures: Library and Revenue Streams
Library Provides Steady Cash- Flows... Universal Owns 3rd Largest Multiple Revenue Streams... Box Office < 25% of Total Strong Operating Disciplines ....Manageable # of Releases ....Rigorous "Green Light" Process ....Tightly Controlled Costs (Adv.) ....Risk Sharing Strategies Strong Track Record Und
Slide 26: TV Production and Syndication
~50% of NBC Prime-Time Schedule Extensive Television Library of 32,000 Episodes Investing in 1st Run Syndication Synergy Opportunities Infrastructure Effective Development... Pilots & Scripts Across Multiple Platforms Vertical Integration '01 '03 $1.0 ~$1.3 TV Production and Syndication Operating Pr
Slide 27: Cable Networks
Broad Reach Popular Brands & Content Hi-Definition Content Synergy Opportunities Infrastructure Cross-Channel Programming Cross-Platform Promotion Opportunity Attractive Package of Program Offerings...VOD, Olympics Cable Networks '01 '03 $1.8 ~$2.2 * * * * * * Operating Profit % ~40% ($ Billion) NBC
Slide 28: Parks and Resorts
Parks and Resorts '01 '03 $0.4 ~$0.3 Operating Profit % ~10-12% ($ Billion) NBC UNIVERSAL Revenue + 10% CAGR Manage for Value ... Base for Promotion Revenues Reflect Tourism Market Challenges 1 Owned Park, 1 JV, Minority Interests in 3 Parks Presence in Europe & Asia Strong Relative Position 3 of To
Slide 29: InterActiveCorp Rights
InterActiveCorp Rights In 2002, in connection with Vivendi Universal's acquisition of the entertainment assets of InterActiveCorp (IACI), IACI and Mr. Barry Diller received 5.44% and 1.50%, respectively, of the common interests in Vivendi Universal Entertainment LLLP (VUE), the group formed by combi
Slide 30: Legal Disclaimer
Legal Disclaimer This presentation contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from the forward-looking statements