Jean-Bernard Lévy - Chief Executive Officer, Chairman of the Management Board Jacques Espinasse - Chief Financial Officer Daniel Scolan - EVP, Investor Relations

Charles Grom - Analyst Julien Roch - Merrill Lynch Duton Gautier - AXA Investment Managers Andrew O'Neill - Sanford Bernstein Richard Jones - Lehman Brothers Giasone Salati - CSFB Unidentified Analysts

[Translation] Could you please all be seated? Good afternoon, ladies and gentlemen. Mr. Jean-Bernard Levy, Chairman of the Management Board of Vivendi, and Mr. Jacques Espinasse, Member of the Management Board and Chief Financial Officer of our Group, are going to be presenting to you the first quarter earnings for 2006, as well as the outlook for 2006/2007 for Vivendi. Therefore it will be done a bit differently today. The presentation will be made in French today, with simultaneous interpretation into English. If you are in the room, you can use channel 1 for French and channel 2 for English. Furthermore, for those listening to us going through a webcast on vivendi.com/ir, the slides are also available on the Internet. You will be able to listen to this presentation again online for the next two weeks. After the presentation, there will be a Q&A session. Answers to the questions will be made in the questioner’s language, English or French. I would like to give the floor to our Chairman. Jean-Bernard Lévy: [Translation] Thank you, Daniel. Good afternoon to you all. Good afternoon to those of you in the room and those of you listening to us through the webcast, or the conference calls. In a few moments, I will be giving the floor to Jacques Espinasse and have him talk to you about our quarterly earnings, which are good, which will enable us to increase our outlook for 2006 earnings, as announced a few months ago. After the presentation made by Jacques, I will be talking to you briefly about our strategy and the actual figures involved in that strategy. On April 20th, at the shareholders meeting, we gave a good description, a long-term description, of what Vivendi is now building. Since then, we have worked with our various business units, and today, we an actually give you the specific figures to talk to you about what Vivendi may well look like by 2011. We will broadly outline what we are actually building right now. I will also talk to you about the nascent proposal we received from a shareholder in the past few days. It was just a few hours before a supervisory board meeting, which approved the strategy plan which we submitted to them, and the management board and the supervisory board unanimously rejected that idea, that suggestion, that request to cooperate, with an eye to an alternative strategy, targeting dismantlement. But I will talk to you about that more specifically later. After that, Jacques and I will be happy to field any questions you might have, but for the time being, I would like to give the floor over to Jacques Espinasse, who will be presenting you with our quarterly earnings.

[Translation] Good afternoon to you all. I would like to begin by thanking our English language interpreters. Usually these quarterly meetings are conducted in the English language. Today this will be done in French, though in the future we will lapse back into English, but today, the circumstances are somewhat exceptional, exceptional communications. It is a pleasure to have Jean-Bernard with us, who is not always in attendance at these quarterly meetings. Before beginning to comment on operating results for Q1, I would like to remind you of something that is already written in the reference documents. I talked to you about the reasons for changes in scope toward the beginning of the year. There were some changes that took place in scope and, as is our custom, we will be talking about changes in the group. First of all, toward the beginning of the year, minority stake in Matsushita was bought, both in music and NBC Universal. That was a beautifully run negotiation by Robert Damas, who is here in the front row. It was a significant discount to the tune of 30%. That enabled us to restructure, simplify all of our interests, particularly in North America. Next, we mentioned to you in the reference document that we would be buying, in addition to a stake we already had, to reach 19.9% of [AMT] capital, which is Verizon MVNO. It is an MVNO specialized in event coverage they reformat for cell-phones. Our investment all in all, direct and indirect investment, amounts to around $50 million. In the first quarter, we also, and this is a major feature of quarter 1, we applied -- we were not successful, but we applied to acquire 35% of Tunisia Telecom’s capital, which demonstrates that our investments process is firmly controlled, highly disciplined, and effective. We felt the price was not right to create value for our shareholders. In the first quarter, we thought the somewhat confusing situation in Poland would be settled. It has not been settled yet. We will see what the future holds. Next, in the first quarter, very recently, actually, we received the approval from the majority of ADR holders in the United States so that we would be able, by 28 August, we would be able to de-list as the major stage in the New York Stock Exchange. Thanks to the de-listing and the long run, we should be able to de-register in the United States, so we will no longer be subject to that. This is important because of about two-thirds of the ADR holders gave the go-ahead so that we could do this, and de-list from the New York Stock Exchange. Now, the first slide, which is on page 2 of the document, growth in revenue by 6.5%. Earnings from operations grew by 10.9%, as we indicated in the press release. It is because -- I will just go through them quickly. Adjusted net income grew as well. We will come back to these in greater detail later. Something is not mentioned in this page, since we attached less importance to this, nevertheless, this is something which we need to mention. The group share of the net income after any non-recurring event, is €770 million as opposed to €501 million last year, which is a growth of 41.1%. Now I would like to move on to the following page to talk about earnings from operations. Now, what we can say here is that we have had strong operating performance in Q1, which strengthens us looking forward. You have known this for about six weeks now. In decreasing order of growth rates, you know our business activities. The best was Vivendi Games growth here in Q1, about 18.6%. Next comes Maroc Telecom at 14.2%. Universal Music Group, 8.2%, and Canal+ Group, fourth position, 7.7%. SFR, 2.9% growth rate. It is true the regulators really got involved in SFR in spite of all of this. Growth rates against some analysts expectations are in the neighborhood of 2.9% for SFR. If you compare this with SFR’s direct competitors and their growth rates, we can say that SFR’s performance is satisfactory in Q1. If memory serves, other telecoms are plus 0.6 generally, or Bouygues Telecom, plus 0.6%, Orange about 1.6% up, so if we are trying to compare apples and apples, we still have to try and adjust things, and this is one of the strengths of SFR. SFR owns about 700 stores. They have their wholesale revenues as well as their retail revenues in marketing their products. If we adjusted for the 2.9%, it would become 2.3% -- 9.3%, sorry, which is scarcely better than the competitor, unless of course, competitors. Now, when it comes to earnings from operations and such, I would like to make a comment. Growth here is 10.9% in EFO after, to reach approximately €1 billion. Some of you will have observed, and we did indicate, that Universal Music Group, there was a write-back of their provisions. It was more than a write-back, actually. It is a reversal of charges. Under ISRS we had to put these under earnings from operation. This has to do with a deposit that had been put down for a lawsuit. The lawsuit had been lost. People were trying to quarrel with us, but we then subsequently recovered the deposit, about €50 million. This has an impact, non-recurring, one-off impact in Q1. Also, something for quarter 1, there is some non-recurring elements -- I will not go through all of them here, but they do have an impact on operations. For instance, the Canal+, Canal+ let’s say this right off the bat, Canal+’s performance is entirely satisfactory. In the first quarter, something somewhat unusual though, which you may not have noted. 2006 is the year of the soccer World Cup, taking place in Germany, as we all know. This has made for real upheaval in the league 1 calendar. In Q1, day to date, there were two more league 1 days than in Q1 last year. One league, one day for Canal+ cost a tidy sum of €15 million. Multiply that, that is about €32 million, the quantitative difference of €32 million. A second reason for the variance, which has a negative impact on Canal+, new packages, new negotiations that took place with the national soccer league for three years. This has led to quite a step up. We went from €600 million. That takes effect as from July of 2005. This is why we can see in quarter 1 and in Q2, I would also mention, the step up from the previous rate to the current rate, which is a big step up, and this is an explanation. We are not disappointed at all, but this does explain why there is less operational performance for Canal+. This slight delay we have observed superficially will be reabsorbed by the end of the year because Canal+ has agreement to earnings from operations entirely in line with last year’s figures. Now, page 4, on page 4, as every quarter, you have an analysis of growth in our adjusted net income. Here, you can see +11.7%, a €62 million increase. You can see that most of it is thanks to the improvement in our earnings from operations. Furthermore, there is a slight improvement in growth in income from equity affiliates. There is a slight drop in taxes for technical reasons. Let’s just quickly move on to page 5 though. We will skip over that last set there and we will go to page 5 to talk to you about the consolidated first quarter 2006 statement of earnings. Let me just highlight the following. Look at the bullet points on the right-hand side. They are in small print, but these are non-recurring elements, such as the sale of securities that we had, some shares of Sogecable. We still have some, a small amount. Furthermore, you can see some other points here, negative, but I suggest we not spend too much time on these. Let’s move on to the next page. As to the detailed accounts, these documents will be placed online after the meeting. A 45-page document giving you a full account, a complete analysis of our Q1 results compared to quarter 1 of last year. There is a wealth of information available to both investors and analysts, and of course, if you have any technical or very specific questions on any of these matters, you can send these to your usual contacts in investor relations. Revenues, just skip ahead quickly -- let me just say something very briefly about the impact of the dollar versus the euro. You all know that since the beginning of the year, the dollar has weakened vis-à-vis the euro by around 10%, not quite 10%, around 9%, 10% in Q1. It has continued slipping a bit. I think it is around, going down by about 10% at this point. The impact on our financials is substantial when it comes to revenues, and this is why we have a footnote here, talking about growth at constant currency. We always give the figure in constant currency as well. Now, in terms of earnings, group earnings, adjusted net income group share, the impact is not as big here due to hedging and so forth. The impact was budgeted -- we budgeted for a dollar of 1.25, so the impact is very minor, really. Although it is not totally minor for the whole group. We have certainly dollar-denominated assets, for instance, in music and games, plus in the Universal that represent about $20 billion. Of course, it is more pleasant when the dollar is more stable than when it drops. But all in all, this does not have a major impact on our income statement. Let’s take a look at the contribution of equity affiliates. I would like to run through this fairly quickly. You can see that all of this is in line. For the time being, we have received it from SFR first, payments for dividend. Maroc Telecom’s payment of dividend will take place in the second quarter. There could be some timing issues here for things coming from certain companies. Just to say something briefly -- sorry, wrong page there. I wanted to talk to you briefly about net available cash flow. This is something that we analyze as more precise for you before CapEx. The line before CapEx growth is 18.6% compared to last year Q1. This is an entirely satisfactory level, almost €1.6 billion. We need to draw your attention to the following: there is a slight difference because of IFRS with SFR. Renewal of 3G license has a fixed part and a variable part. This time, we are able to do -- 2G license, not 3G. 2G license renewals very positive, nonetheless, it does have a fixed component and a floating or variable component. The fixed part of the contract renewal has to be capitalized, and that has an impact on capital expenditure. Its value is adjusted to current value. That is in accordance with IFRS regulations. The counterpart has an impact on debt, and that is why it was important for us to give you these figures separately, so that you could get a fuller understanding of changes in our cash flow after CapEx, and that has been affected by various timing issues, but we are very much in-sync with what we were expecting. Let us move forward to the changes in financial debt, net financial debt. Since the 31st of December, 31, 2005 -- On the 31st of March, our net debt equaled €5.1 billion, so you have the changes in the debt featured here, pluses and minuses. The minuses have to do with use of funds, or capital expenditure, amongst other things, and the upward pointing arrows have to do with cash flow generated over that period of time, so the end result is €5.1 billion. Now we are up to €6.3 billion, and by year-end, the debt should equal approximately €4.5 billion. Now this, of course, will be a function of our ability to succeed in the intended investment. Very briefly now, on our various business units, you are all no doubt very familiar with this. What about the contacts, what about the local distribution platforms, what about the capital intensity in those very specific units? One page features all of the details with the growth rate of revenues. Of EFO, we have heard about that already. And you have those rates for each of the units. So to turn to Universal Music Group now, the results are growing in a very satisfactory fashion. Some of it has to do with changes in currencies, but we are confident that things are heading in the right direction. Music downloads are growing steadily, and that more than offsets the shrinking of the derived revenues from physical product, in terms of profitability. Pay downloads have slightly higher margins than concrete products. By contrast, the return on invested capital is much better for downloading than it is concrete products, because you do not need to store them. There are no inventories and there are no accounts receivable. Let’s now switch to games, Vivendi Games. That is a point of satisfaction for us, over 6.4 million online [sales], 1 million online players for World of Warcraft, so a resounding success indeed, as expected for that product, as well as for other products presented in Los Angeles. Those include console-based games. Canal+ now, I told you the most salient area, the operating result has dropped, but that will be offset by year-end. On page 19, you have metrics, so we are fully transparent. You have the number of subscribers to the premium channel in thousands, as well as for Canal+ LE BOUQUET. You also have the number of CANALSAT subscribers, so year on year, there have been 285,000 more subscribers. When one looks to the ARPU both for Canal+ and CANALSAT, ARPU is growing on the first quarter of 2005. Page 20 now, this recapitulates the most relevant information on SFR, and you have a whole set of figures to substantiate that. I know some of you are very keen on figures. Those are supplied in an appendix to account for the resounding success of this business unit. Note there is great success already and great potential for further growth. Maroc Telecom now, I told you earlier that we are very with Maroc Telecom’s growth. Not only is its traditional mobile business growing, but land lines and ADSL units are also growing. So this brings me to page 24. When looking at various units across the group, Frank said on two occasions during the shareholders general meeting that our books now are fully legible and predictable as well, including various minor changes we may have to introduce, and given that we are now four-and-a-half months into the 2006 financial year, we now have to resize ourselves and fix outlooks upward. We were originally planning adjusted net income growth between 11% and 13%, but we now revise that up to approximately 16%. In other words, an adjusted net result to the tune of €2.4 billion, with a dividend payout rate around 50%. This brings my presentation to an end. I will now give the floor back to Jean-Bernard for strategy and strategic outlook. Jean-Bernard Lévy: [Translation] Thank you, Jacques. Thank you very much for giving the floor to address the strategy issues. I have mentioned already, at the shareholders’ general meeting, our perspective on the way we shall follow on the effort we have made for the past four years to restore the shining star of the Group, which went somewhat astray, to make sure also that our shareholders benefit from more value creation than those of our competitors. So I would like to highlight some key points which have enabled us to mention at the supervisory board meeting, which met on Monday, just a few weeks after the Board of Directors, how our strategy will be implemented in concrete, targeted terms. In September 2002, we started looking at our assets, at the scope of the Group, and we realized that we had very strong assets in growth sectors. Those were the ones upon which we relied in order to rebuild and revitalize the Group. Those growth sectors are telecom and media. Not only are they growing in terms of the results, and the Group results have tremendously increased over the past three years. SFR today, for example, is now doing far better than its competitors when it comes to innovation, when it comes to introducing new services, when it comes to planning ahead for the future, when it comes to investing. In the field of media, too, we have proved more than able to invest in very promising, budding games, such as World of Warcraft in California, and it has been a resounding success indeed. So through ongoing innovation, and because of the very fast cycles of our business unit, but also because the sheer use of products and services is also growing tremendously, that is what the future of our Group relies upon. Take mobile telephony, for example. Many people are wondering whether margins may not be shrinking the way they have done for fixed line. However, that is not our perception at all, nor is it reflected by figures, since the revenues have grown by approximately 10% over the past quarter. So, because we are very deeply convinced of this, we have overhauled our Group and we have now completed the scope overhaul. Our strategy now is, I believe, fully legible. And we have kept our directors abreast of the changes, so as to give them as clear a view as possible of our future. Our future will have to do with harnessing the tremendous growth of broadband, as well as mobile broadband, the association of the two, so as to sell our subscribers increasingly sophisticated, increasingly innovative products. Just three years ago, broadband services were far from a foregone conclusion. However, today, not only in France but also around the world, broadband has a very high penetration rate and we also have mobile broadband. SFR is at the forefront of innovation. So they launched mobile broadband with HSDPA. The announcement took place just a few days ago. We are one step ahead of the competition, and that is because SFR was able to invest and to harness its sound knowledge of the market. It’s not just a matter of investing into tomorrow's technology, because obviously you also have to invest at the right time. As for mobile services, they make a tremendous difference in the lives of our consumers for voice services, but also music, or data. And the consumers have proven remarkably eager to watch television on small-sized mobile telephones, which were not initially designed for that use. However, the screens have proved fully appropriate for TV watching, especially for specially designed programs, relatively short programs, or short or medium-length programs. Anyway, what will drive the Group is our ability to sell and innovate across the whole range of services that are enabled by new technologies, with a special focus on broadband and mobile services. To this end, we shall be able to harness a wide-ranging effort across Vivendi, at Maroc Telecom or Universal Music Group, Vivendi Games, or especially Canal+. This is one of the most, if not the most, promising asset within the Group. So, for a number of years, our investment enabled us to strengthen our position so that, where we are actually the leader. We are not striving for diversification for diversification’s sake. We try to strengthen our position where we are already active, where we already have know-how, management know-how, and sound performance. That is the case for distribution and content. Conversely, we do not strive for diversification into those areas where we do not feel competent. For example, we have decided, or realized, that we would not be able to provide our shareholders with additional added value for bids for tender on telecommunication carriers. Similarly, in spite of our very good assets in Hollywood, we realized we were not in the best position to manage them and reinvest in them, because those are businesses which we are not familiar enough with, because they are too disconnected from our core businesses. So we rely upon our ability to innovate and sell in growth businesses. Basically, we aim to reinforce our leadership. To do so, we benefit from a competitive edge, not only are we already the leader in our various businesses but the Vivendi Group also benefits from a competitive edge by dint of its sheer size. Our size enables us to think ahead, to take risks, and also to share experience with a view to investing in cutting edge businesses, businesses which more stand-alone competitors would not be able to tackle. However, we have in-house skills which we may harness to this end. For example, we have a games unit which has not focused very much on telephone games. We have PC games, but nothing much on telephony. We also have major assets on mobile telephony with more and more media on mobile telephony services. This means that on this emerging market, we may aim to become one of the leading mobile terminal game groups worldwide by harnessing our various know-hows we have developed across Vivendi Games and SFR. Just a few months ago we set up a mobile games unit in France, next to SFR. They have very close ties with SFR. However, they are part of Vivendi Games because they are about creating games and selling them across the world. This is an example where you don’t have very high risks, and it demonstrates our ability to move ahead faster than competitors. We can reap the benefits of our know-how, of sharing some of our experience. This is an example which demonstrates the advantages of business unit complementarities. It offers size advantages. This enables us to invest, for instance, in football rights, soccer rights in France. These are large amounts, it’s true, but we can do this, and that has a triggering effect. We saw this in the month that followed when we won our bid, that triggered a restructuring which still had to be decided on after the competition authority’s opinion, but a big restructuring, revamping of the pay TV landscape in France, and clearly, for us this will be a real growth driver. So these are the things we can do. These are examples, and clearly others would not be able to do this. I’ll give you a few additional examples. When we take a look at what the competitors are doing, we see that we’re already way ahead. We’re way ahead of what they would like to do, what they have announced that they would like to be doing. Almost every day we see telecom operators, conventional operators, infrastructure telecom operators that make strategy presentations and talk about content. They say content will be one of their growth drivers. They are constantly buying sporting rights, and sometimes they headhunt specialists, sometimes from us, in buying rights catalogues and managing rights catalogues. All of them think that content for media are a way of making their infrastructure profitable. I would say content and infrastructure are a way of better serving customers. That’s how I see it. Go beyond that conventional dichotomy that the different telecom sectors, analysts look at telecoms, other analysts look at the media, investors look at the two sectors separately. No. Our customers have needs today. If you look at these through what the telecoms carriers are doing, or through what the content providers are doing, we see our customer needs are driving our growth. So clearly, business complementarities is a huge asset for us and our future. It’s where our telecom operators like to get to. It’s also clearly where the media operators would like to get to. They’re buying up websites. They’re buying interactive service systems. They’re buying video on demand products. They’re trying to go beyond their status of broadcasters to move closer to their customers, to enhance the value of their brands to different region networks, multiple networks. They want to try to make their investments, their big investments, like our big content investments should be made more profitable across the world, all these platforms. So broadband internet, mobility, these will be speeding up growth. It’s what’s being called convergence, but that’s just a new term that is to look at the consumers’ needs, and we think, we hope very much, we’re in the best position to benefit from this. What we’ve done over the past few weeks, what we do every year, we adjusted our strategy plan, our strategy forecast. This was scheduled quite some time ago. We presented it to the Strategy Committee and the Supervisory Board meeting that took place a few days ago. The Board approved the strategy plan and authorized me to go through main lines here to talk you to you about what Vivendi may look like in the medium-term, in the five-year term. So today we’re announcing actual figures, the translation into figures of this strategy. This is the strategy looking towards 2011. It’s a broad-brush strategy approach, of course you have to look at this summary overview, and then go into more specifics. I know you’ll have a lot of questions as to the interim figures, and I know in advance that I won’t be able to answer all of your questions; not about year-over-year specifics, or the breakdown between the various business activities, how this growth would break down. All I can say is that 2007 will have to be a special year. In the second half, we’re expecting the green light from the Ministry of Economy for the combination of TPS/Canal+ and probably in 2007 we’ll have a one-off expense which will be in earnings from operations and adjusted net income. This will be the exceptional one-off spending relating to this combination of TPS and Canal+. That one-off expense, we have an idea but we’re keeping that idea to ourselves. It’s in our interest and for our negotiation process with the Ministry of the Economy. It’s an expense we’ll only able to actually specify once we know the detailed commitments we have to make to get the approval from the Ministry of Economy. So we’re working on the basis of a central scenario which we may have to slightly adjust, marginally adjust, depending on the final decisions once they are made by the authorities. We always like to break things down and explain the growth in great detail. I will just say that today, we consider that two of our businesses in the next five years should have average annual growth above the others. Pay TV in France will benefit from our investment, as well as the new momentum created through the combination of the two satellite. And video games, here, clearly we have already made major headway, returned to profitability in Vivendi Games, but we certainly have not yet reached our objective in entirety. Other business units, all of them will make a contribution to growth, possibly slightly lower than the average of 8% or 10% growth for earnings from operations per annum, but all of our business units will display growth in revenues, top line growth, growth in earnings, and will be self-financing. We are able to finance all of the investments which we think our business units will need to make in the next five years. In our plan, which is the plan that underpins the summary results we are showing you, in the plan we are foreseeing not only self-funding all the investments, self-financing, but also, we will be able to pay out every year a dividend. As has been the case now for two financial years, we’re paying out at least half of our net adjusted income which will be growing. Now, earnings from operations in the current Group scope, and without considering any significant acquisitions, the only acquisition that we’re considering as probable, which is included in this plan, we are expecting that after the three years TF1 and M6 will use their option to sell the 15% of the future entity Canal+ France. So we’re assuming that after three years, TF1 and M6 no longer held capital, and we would have spent the approximate €1 billion which of course corresponds to that acquisition. Aside from that, our reasoning is, on the basis of this unchanged scope, using Group resources as we have been able to as today. So the adjusted net income 2011 would be in the range of between €3.5 billion to €4 billion. Now, the small asterisk you see here is very important. Our working assumption is conservative, because today, out of the €2.4 billion in our guidance for 2006, we are benefiting from the consolidated global profit system which is a tax asset, deferred tax asset, which Vivendi will have for a few years’ time. We think by 2011 it’s possible we will still have some deferred tax assets left. But, to be conservative, and for the sake of this plan, and considering the consumption of the deferred tax assets, our assumption here is in our plan that at the end of 2010 we would have entirely exhausted, used up, all of the deferred tax assets. We hope things will be a little bit better than that. But to not complicate the scenario, we’re just assuming that in 2011, Vivendi would no longer have these deferred tax assets. So this consolidated tax system would no longer be providing specific benefits in our financials. That’s our assumption there. So the €3.5 billion to €4 billion adjusted net income for 2011, you mustn’t compare these specifically to the €2.4 billion adjusted net income which we are assuming will be the case for 2006. This was tracked from the €2.4 billion in 2006 to €550 million that correspond to our expected refund for the tax carry-forward in this financial year. Now, assuming we no longer have the deferred tax asset in 2011, actually, you’re talking about €2.4 billion minus €550 million approximately, €1.850 billion in earnings which we’d be making in 2006 to compare with about twice that in 2011. So we’re talking about a doubling of our improvement, excluding these deferred tax assets in the timeframe 2006-2011. Again, this will be performing thanks to growth in all business units, including telecommunications, but it is true this will be driven a bit more by stronger growth in the media businesses. This is growth which will be taking place with a constant scope but just implementing decisions that have already been taken or almost all been taken regarding pay TV restructuring in France. These earnings will be achieved and all the while we will maintain our dividend which will continue to be approximately or slightly greater than 50% payout of adjusted net income. You can do the calculation yourself a bit differently. These figures demonstrate to you a return to shareholders in terms of rate of return for the Vivendi shareholders which is in the neighborhood of 13% to 17% per annum over the next five years, including the dividend in this return to shareholders. So in the neighborhood of 15% average figure each year, a value created for shareholders, so today that’s our strategy plan. Now, I’d like to finish by coming back to some information which is in the press release published by Vivendi this morning before markets opened. About two months ago, we were informed, as were you, that a shareholder called Sebastian Holdings had taken a stake in Vivendi’s equity. That shareholder made a request to meet us. We did meet with Sebastian Holdings’ representative, as we very naturally meet with any shareholder that asks to meet with Group management. So we answered some questions. They asked us questions during the meeting. A few days ago, we received from that shareholder a document which we will not call an offer. It is not a bid in compliance with any regulations. Let’s just call it a working document, a nascent proposal, the beginnings of a proposal, which we consider to be an approach which asks Vivendi management to cooperate on an alternative project. Our strategy, which we’ve outlined here, is the Group’s strategy. It was approved by the Supervisory Board, but by definition, we can listen to any alternative that may be suggested by an investor. We did look into, analyze this alternative, which would lead to a dismantling of Vivendi. The Supervisory Board and the Management Board which met towards the beginning of this week, unanimously rejected this suggestion, feeling that this would not create value for shareholders. They confirmed that the strategy which the Group has been enacting, is going to be continued in the future. I would like to emphasize the following. This document, we view as a request to cooperate. But we have a hard time really, in analyzing it fully, it wasn’t clearly structured. Some of the major Group assets aren’t mentioned in it. Financing is claimed, but the bank supporting letters show that that financing is far from being assured, and in any event, it’s incomplete, which is why we feel this working document is not an actual offer. The figures, the rumors that have been bantered about as to the value which would be attached to the Vivendi share are not in any way backed up. Now clearly, at no time, and I want to emphasize this, at no time did we give any encouragement or any sign of approval of this type of approach. That seems crystal clear to me, so I just wanted to say this, and I hope I will no longer have to reiterate this. This unexpected approach by the shareholder which was rejected, which clearly did not entail any assured financing, as we see it, this is a chapter which is now drawing to a close. That’s what I wanted to say to you at this juncture about the Group’s business. You can see how promising our results are. You can see how confident we are in our ability, as from 2006, of creating great satisfaction for shareholders. We are working very hard to build the future, with our long-term view, which is going to give a high return to the people who placed their trust in us. I’d like to thank you for your attention. With Jacques Espinasse, I’ll be happy to field any questions you might have. We will answer these in the questioner’s language. Possibly that will make things easier on all of us. Thank you.

[Translation] The first question in French. Would you please introduce yourself.

[Translation] Could you give us a rough idea of Sebastian Holdings’ proposed alternative strategy? And could you explain to us in what ways it is incompatible with the strategy outlined by your Supervisory Board? Jean-Bernard Levy: [Translation] Well, our strategy entails continuing with value creation for our shareholders by focusing on our strong points and by investing in them. By contrast, the idea underpinning this nascent proposal from Sebastian Holdings would entail breaking up Vivendi into three chunks, some of which would be sold right away. Others would be sold with leverage. Now, such dismantling entails unrealistic premises, in our view, because it does not take the context of our activities into account, nor does it take into account what our industrial assets are. It doesn’t either factor in the existing regulation, or the Group’s financial assets, or our commitment to a number of partners. So, basically, the underlying assumption behind Sebastian Holdings’ proposal would be to turn additional face value through leverage. However, in practical terms, what we have been sent is a hardly legible document. The sums just don’t add up. There are several billion euros missing, and nowhere does it say where those are to come from. The proposed plan is not terribly feasible either, because there is no consideration of the approvals to be granted or of the timelines to be complied with when it comes to selling or transferring assets, or to altering the modus operandi of some of our businesses, because in order to do so you need to get approval from the regulators. So, if that approach were to be followed, not only would it run against our current value-creation strategy, but there would also be insuperable hurdles to be overcome. No, the document we have been sent does not clarify this. Could you please use the microphone?

[Translation] Good afternoon. I have two questions. On the tax -- the deferred tax asset, if you were to sell SFR or Canal+, would you lose that deferred tax asset at Group level? Jean-Bernard Levy: [Translation] In 2004, the French Ministry of Economy allowed us to switch from the standard tax regime to the deferred tax asset regime. However, that entailed specific conditions on the Group’s scope, including SFR and Canal+, and I believe that was made public at the time.

[Translation] Thank you. My second question has to do with Canal+. What about the [soccer]-related expenses for L1? Could you tell us what the figures for in 2005 and 2006 in million euros? Jean-Bernard Levy: [Translation] Microphone, please. In late March, for the first quarter, there were €116 million. There’s a €116 million gap between 2005 and 2006. Out of those €116 million, there are two additional days to be added at the 2006 price, so that’s an additional €30 million included in the €116 million, €32 million.

[Translation] So maybe we’ll now give the floor to Julien Roch, who is calling us. Julien Roch - Merrill Lynch: [Translation] I have three questions, one about the growth assumptions in 2011. You said you’d not make any comments by business unit or year by year. However, about the Canal+/TPS merger on top of the expense in 2007, when you made a presentation and mentioned 15% margin two years ago, there was no prospects of benefit until 2010. So do you believe that this 8% to 10% growth prospect for the next two years would entail more growth on the last two years than on the first three of that period of time? Next, about the net indebtedness, Jacques mentioned €4.5 billion at year-end, but this will depend on the investment that you need to make. Now, do you have any proposed investment as part of this €4.5 billion? You’re not telling what exactly you’re thinking of buying, but just to get some idea. The third question, could you give us an update on Poland? Jean-Bernard Levy: [Translation] I will address the first and third questions and let Jacques deal with your second question. We are not going to give you an overview of our profile business by business, or year by year, but obviously Canal+ will undergo a thorough overhaul in 2007, so that year will be much less legible. But we’ll do our utmost to help you understand what will happen in 2007, both on the recurring and non-recurring aspects. Having said that, our performance profile from 2006 to 2011 should vary across time. However, Vivendi Games is picking up far more in the earlier part of that timeline than in the later part, so things are very soundly balanced, without going into details. Having said that, there will be a restructuring expense in 2007, obviously. As far as Poland is concerned now, we came very close to making a public announcement to bring the impossible situation to an end, because this has been going on for seven years. However, in late March, a Polish Court of Justice issued an unexpected ruling which is not really in our interests, to tell you the truth. This has resulted in Deutsche Telekom leaving the negotiating table just a few hours after the agreement was announced. So, as a result, we have sued Deutsche Telekom because they had undertaken to sign up to the agreement aiming to put an end to the impossible situation we were all locked into. In other words, today we have to deal with yet another source of litigation. The case is not closed. Hopefully, reason will prevail. That was the case throughout last winter, throughout all of the negotiations. However, I cannot tell you yet when the negotiations will resume, if they resume. And if they don’t, we will remain locked in this impossible situation that we would love to solve. So, to err on the side of caution, we have decided not to factor in a satisfactory solution to the Polish case for our 2011 outlook. Now, should things reach a satisfactory conclusion, then our results will be even better than what we are predicting.

[Translation] On the issue of net indebtedness and the underlying assumptions for the €4.5 billion figure at year-end, let me make two comments. There are two kinds of investment. There are so-called very simple ordinary investment, which may be physical or not, and then you have financial investment. For so-called ordinary investment, I am under the impression that, in both telecom and the media, our unit leaders are not particularly unhappy. We have not stood in their way. So, given our satisfactory growth, we can give the green light, if anything. As far as financial investment is concerned now, or divestiture for that matter, we will not make any major sales by year end, if you get my drift, nor have we decided to make any key investments by year end. So we will see what happens. We’re just giving you a basic idea. Given the free cash flow generation within the Group, we should bring the €6.5 billion down to €4.5 billion by year end. That is what I meant. Julien Roch - Merrill Lynch: [Translation] Thank you very much.

[Translation] We now have a question from Mr. Duton Gautier from AXA Investment Managers. Duton Gautier - AXA Investment Managers: [Translation] Good afternoon. I don’t know whether you will be able to answer my question, but after the EMI Warner proposed merger, would you consider growing your music division? We’ve also had rumors about [Bergerman] which might leave its JV with Sony. Would you consider buying those assets? Jean-Bernard Levy: [Translation] We are simply hearing those rumors, as you do. Of course we pay very close attention to what is going on. As I said earlier this year, in 2006 or 2007 -- now, that is not up to us, of course -- but things will likely happen that will enable us to extend our rights portfolio in music publishing. Now, you’ve mentioned two possible operations whereby we would become not just close observers but actually active participants. However, nothing is underway as yet. But, having said that, one of our key strategic objectives is to get stronger in that area, because it is a very promising one.

[Translation] Are there any questions from the floor now? Unidentified Analyst - La Tribune: [Translation] You talked about rumors about these figures. You mentioned a working document. Isn’t there clearly a bid at €33.50 that was made to you? Jean-Bernard Levy: [Translation] No, madam, there is no bid at €33.50. There is a document. When we read the document, we understand that if things were to go well, if financing were put together, if some of the assets (we don’t which) were sold, if other assets were listed with debt leveraged, then possibly if these working assumptions all came into play and everything went well, we could propose to shareholders some cash and some shares, and possibly the value would be in the neighborhood of €33.50. There are lots of uncertainties, lots of conditions, lots of question marks. What are the assets? What’s the debt? What’s the timetable? That’s basically what it’s about. Unidentified Analyst - La Tribune: [Translation] So what you’re saying, the proposal mentioned a proposed exit from the stock exchange with an offer in cash and shares? Jean-Bernard Levy: [Translation] No, madam. It does not say in the proposal to exit the exchange with cash and shares. It says that we could work to propose to our shareholders cash and shares and a new structure. The question of whether to exit the stock exchange, as I see, that’s a fairly big question. That’s not even mentioned in the document. This is one of the very numerous uncertainties in that document. Unidentified Analyst - La Presse: [Translation] You mentioned banking uncertainties, uncertainties as to banking. Apparently a U.S. and a European bank would be committed to finance. Is their commitment only related to the fact this needs to be a friendly approach? Jean-Bernard Levy: [Translation] Look, if you really want to get into this detail, yes, two banks did sign an appendix to this nascent document we received. Their signature entailed three main conditions. The first condition, it had to be a friendly operation. Secondly, full due diligence had to be conducted on all of Vivendi; a few million pages would have to be photocopied and sifted through. The third term, the banks would commit the professionals -- these letters are non-commitments. It doesn’t actually specify any bona fide commitment in the letters. They aren’t letters of commitment, they are subject to full due diligence. They’re subject to it being a friendly transaction. I’d also emphasize the amounts aren’t consistent with what would be necessary to go in the direction of the amounts that were mentioned earlier. So there’s a lack of financing to the tune of €10 billion. Now, this thought process, this beginning of a proposal, also has a condition whereby the deferred tax loss would have to be transferred to a new entity. That’s something hitherto unseen in France, unknown France.

[Translation] We have a question from Andrew O’Neill from Sanford Bernstein. Andrew O'Neill - Sanford Bernstein: Thank you. Andrew O’Neill from Bernstein. I just have a follow-up, perhaps, on the proposal that you are faced with. Could you just tell us some of the essential flaws or some of the areas of logic that were not accurate in that proposal? You mentioned just now possibly the inability to transfer a deferred tax loss. Are there any other things like this, or is this primarily a question of not having a very well-articulated document or the requisite financing? Jean-Bernard Levy: Yes, maybe just in a nutshell, because I think I have already covered a number of these issues. There is no clear structure. Some major assets, we don’t know what happened to them. There is a lack of financing. If even the two banks do confirm the financing -- in other words if they do not request due diligence, if they agree to work in a hostile environment -- there is a lack of financing, as we see it, of €10 billion. There is no vision and no view about how long it takes to sell assets. There is no view on what is the regulatory approach on very regulated businesses that we have in several countries, and so on and so forth. There is no view as to the feasibility with respect to French book legality, as you know, legal technicalities, and so on and so forth. And I could add to this, but I will stop it because it already shows how unfeasible all this looks, as it is. Andrew O'Neill - Sanford Bernstein: If I might follow up with another topic, could you tell us what drove the increase in your guidance for this year, 2006? If there’s a particular area where you’re seeing strength through the balance of the year? Jean-Bernard Levy: You know we discuss budgets with our businesses and then we have a risk assessment, on how the businesses behaving. I have to say that all through Vivendi, we have had very good performance in Q4 of ’05 and in Q1 of ’06 that has led us to believe that, generally speaking, we are in a good position to achieve the top end of our internal targets. We have seen, generally speaking, good consumption in all the countries where we are, and we are happy to report that and to lift our guidance. So it is not due to one or two specific areas. Andrew O'Neill - Sanford Bernstein: One last question. On SFR, would you be able to share with us the EBITDA that the business reported in the first quarter? Jean-Bernard Levy: Yes, I think we should do that. Jacques or Guillaume and Pierre, if we have an EBITDA number for the first quarter? Guillaume or Pierre? If you’ll just wait for a couple of seconds. Jean-Bernard Levy: 865 versus 786 last year. Andrew O'Neill - Sanford Bernstein: That’s great. Thank you very much.

Okay, we have a question from Richard Jones from Lehman Brothers. Richard? Richard Jones - Lehman Brothers: Jean-Bernard Levy: I would interpret this, but this is only the way I look at it, as a call into the management of the Company that is saying we would like that you cooperate with us in order to break up the Company. How would you like that we work towards that idea, that we break it up into three parts and maybe we can get something that would look like €33.5 if everything goes well. We have said we do not approve that idea. Richard Jones - Lehman Brothers: Great, thanks. Secondly, back onto the operations. I just wonder if you could comment on the music business. You had digital being 10% of revenues in the first quarter, to what extent you’re actually seeing higher margins from digital benefiting the operating profit in music as yet? What are your thoughts about the impact of that potentially going forward? And, if you’re thinking that comments from your competitors about achieving higher margins going forward can now be possible? Jean-Bernard Levy: It’s difficult to say. We obviously have good numbers, because now we have 10% of the global revenues made of various kinds of downloads. It was only 5% through ’05, and now it’s 10% in Q1 ’06. It is slightly improving the margins, yes indeed, but we are not counting on a significant change in our mix of sales between physical and downloads to drive an improvement in the margins. It will improve it a bit, but most of the improvements will come from our better performance, not from so much the mix of the business. But yes indeed, when we look at it, it is a slight improvement in our margins when we get rid of some of the costs linked to manufacturing, distribution, logistics, returns in the physical world. Richard Jones - Lehman Brothers: Great, thanks.

[Translation] A question in the room. Giasone Salati - Credit Suisse First Boston: Two questions, please. The first one is on guidance to 2011. Without going into details, but could you confirm that free cash flow would move roughly the same way as net income, or do you expect a much higher CapEx? Jean-Bernard Levy: We expect free cash flow to move a bit quicker than net income, but we won’t give any details. We do expect that the CapEx to revenues ratio could decrease a little bit. Giasone Salati - Credit Suisse First Boston: So the free cash flow growth over the year 2006/2011 period faster? Jean-Bernard Levy: Slightly faster, that is correct.

Let me clarify that point. When we speak about free cash flow, it’s of course free cash flow before dividend. So far, one of our beauties of our activities within Vivendi Group is that the free cash flow before dividend is pretty much in line with the adjusted net income. We see now that it can increase even faster than the adjusted net income in the years to come. Giasone Salati - Credit Suisse First Boston: The second question is again on 2011 targets. It doesn’t include Poland; it may include the buyout of minorities in the new [inaudible] from TF1 and M6. Does it include any other change in parameter, consolidation or deconsolidation?

No, it doesn’t. When you are talking about the 2011 objective and perspective as have been presented to you, it doesn’t include any other changes in the scope of activities. Giasone Salati - Credit Suisse First Boston: The third one is trying to close the circle on this proposal. Maybe, could you tell us, if you wanted to break up Vivendi, could you do that in a reasonable time horizon, say 12, 24 months, or are there constraints which clearly don’t make it possible? Jean-Bernard Levy: I think the management of timing of such a scenario is one of the key obstacles to it being put in place. It does not mean it is not feasible, but obviously it would take a very long time to organize this. During that time we would be seen as forced sellers. We would have these management problems that we have unfortunately had to manage three, four years ago when you have to deal with managers in companies that are for sale. We would obviously destroy a lot of value in terms of our ability to innovate, and also, we would lose our tax assets. So, when we look at all this and the time it may take -- 12, 24, 36 months, who knows -- we see huge obstacles in performing such a scenario.

Let me add also that our competitors, on telco and on media, really envy our situation. So we really should be masochist to take apart something which is looked at as a pretty good situation by our competitors, and we are not masochists.

[Translation] Yes, two questions. Firstly, I would like to know who your major stakeholder is today and what percentage of your equity they own, because Sebastian Holdings claimed to own between 3% and 5%, although nobody quite knows. Secondly, Andre [Lagardiare] in tomorrow’s issue of L’Expresse claims to be willing to take over Canal+, the pay TV channel, tomorrow if need be. Now, have you been in touch with him? Jean-Bernard Levy: [Translation] Well, if that’s raised other people’s envy then their pity, as the French saying goes. As you know, anything in excess of a 5% threshold has to be registered with the French stock exchange regulator and the threshold, between 4.5 and 5%, not only does the Company itself, but the French stock exchange regulator also has to be notified above 5%. Now, Sebastian Holdings told us they now owned in excess of 1% of Vivendi’s equity. However, for all our requests, we have not had any statement from Sebastian Holdings whereby they own more of our equity than that. However, in the shareholders’ general meeting we were told that Sebastian Holdings had made voting arrangements with other shareholders. However, Sebastian Holdings have failed to answer our questions to clarify the latter for the sake of all our shareholders.

[Translation] Well, who is your leading shareholder? Jean-Bernard Levy: [Translation] Financial institutions who do not wish to have their name publicized, inasmuch as they do not hold in excess of 5% of our equity.

[Translation] Well, at one point [inaudible] was said to be your major stakeholder. Jean-Bernard Levy: [Translation] At the shareholders’ general meeting there were representatives who acted as tellers and they represented the major shareholders of our Company. However, Societe General, who’s crossed that 5% threshold as part of its trading activities and then they slipped below the threshold again. So anyway, about shareholding structure, only those shareholders who wished to have their names known do so as long as they remain under the 5% threshold. And as far as Mr. [Lagardiare] is concerned, I have not been in touch with him, so I have nothing to say.

[Translation] Sebastian Holdings’ offer is not concrete or straightforward enough but, if that is the case, why overhaul your financial perspective, because in general Q1 results are mostly non-events but this time you have decided to tell us about your perspective to 2011? Jean-Bernard Levy: [Translation] Well, the reason we have done so is because, based on what happened in the shareholders’ meeting, we realized that we needed to support our strategic plan announcement by figures. Since our strategic plan has been generally approved by our shareholders at the meeting, we thought the time was right. Given that our strategic plan is now very clear cut and is obviously a sound one in the long term, we thought it would make sense to set targets over five years.

[Translation] One thing is not quite clear in my mind about this proposed €33.5. Do you deny that amount or do you claim that the working document you have been provided with is so unclear that the €33.5 mark does not make sense? Jean-Bernard Levy: [Translation] Well, both, because there is no €33.5 proposal. No, there isn’t. No, that is something we denied as early as 8.30 a.m. today. It is not an offer, nor is it a proposal. What we have been provided with is a document asking us whether we might be willing to consider an alternative approach to the one we currently follow. And our reply was, no, we are not interested.

[Translation] Now, this figure you quoted, 1% for Sebastian Holdings, are you talking about 1% -- 1.2% of equity? Jean-Bernard Levy: [Translation] Yes, we got a notification from Sebastian Holdings to the tune of 1.2% of equity and that statement we received several weeks ago. I believe we need to wrap up, since we all have many further commitments this afternoon. Thank you very much for being with us. Thank you for your questions and we look forward to seeing you again.