Good day, and welcome to the Pershing Square event call. Today's call is being recorded. Following today's presentation, we will be taking questions from our phone audience. If you would like to ask a question, you may press star one on your telephone keypad to join the queue. It is now my pleasure to turn the call over to your host, Bill Ackman, CEO and Portfolio Manager. Thank you very much, operator. Just here with me, I've got Ryan Israel, CIO of Pershing Square, Feroz Qayyum, who is a member of the UMG investment team. Investment team member is a part of the UMG team, and then Michael Ovitz. Just briefly on Michael and I have known each other 31 years. He's known Lucian for about 40, and considered by many to be the greatest agent of all time, and obviously represented some of the great actors, artists, film producers, and otherwise. In the music industry, Michael Jackson, Madonna, and I'm sure Michael can give you a very long list of some of his interesting clients. That's the group. I'm going to walk you through a pretty detailed presentation, and we welcome your questions. Just to answer kind of a threshold question, why did we release this publicly? The answer is, we did so to facilitate communications with the shareholders of the company and particularly the larger shareholders of the company. This is a company with, as you know, a concentrated shareholder base. Bolloré Group controls 28% of the business. The transaction here requires a two-thirds vote of shareholders who attend the meeting. Without Bolloré, we don't have a transaction. My first phone call yesterday was to Bolloré, and to just share with them a high-level summary of the transaction. I guess the words I got back were, "These are music to my ears." With that, we decided to go forward, and launch this sort of presentation. Now, all that being said, we certainly haven't called for a vote from big shareholders or small shareholders. A lot of details of the transaction need to be reviewed. I can't speak on behalf of any shareholder of the company. We do believe this transaction addresses a lot of the issues that have sort of overhung the company and held back Universal from achieving its full potential as a public company. Just for context, we think the business has done actually quite well. We gave a presentation in September of 2021, when the company was listed. You can still find that presentation on the web. We put out projections of how we thought the business would do. The business has exceeded our expectations. Revenues have grown 60% since the company listed. Adjusted EBITDA is up 70%. Now, notably, the stock price, since the listing, is down almost 40%. I'm sorry. The stock is down 39% from its peak and down 23% from its listing price more than four years ago, despite strong business performance. In the market's assessment, this was the company that traded in the low 30s x earnings in the first year as a public company. Today, the stock is trading at a 15.6x multiple. That valuation decline, I would say the average multiple has been about 25x over the period until beginning July of last year, where the stock has crashed to the lowest valuation in its history. Meanwhile, the business continues to perform well. The question is, what has caused the kind of re-rating of the stock and the stock price's kind of poor performance since it's been a public company? Some of the recent events, a very important catalyst was Cyrille Bolloré, the representative from Bolloré Group, surprised the market by resigning from the Universal board. Bolloré controls approximately 28% of the company, and that sort of put in question their intentions with respect to whether they were going to hold their stake. I think the market was anticipating a U.S. listing of the business. That's been postponed. Over time, the company has effectively de-levered, reducing the ability of the business to earn more attractive return on equity. The company has not provided clarity to shareholders about how they intend to allocate capital. There is no sort of stated earnings algorithm. In fact, there really isn't a focus at all on an earnings per share metric or any other kind of per share metric, in terms of the company's guidance or in terms of the way the business is presented to the market. The company has a EUR 2.7 billion stake in Spotify. The market gives no credit for that stake to shareholders, and really, there's been no presentation by the company of what the plans are for that holding. In general, we hear from shareholders that they just find the business hard to understand. They have difficulty getting their questions answered. They're surprised almost every quarter with puts and takes in the earnings. Really, this relates to how investor relations have been handled by the company. Actually, embarrassingly, we left off one other member of our group in the room who's quite relevant in this regard, and that's Jill Chapman. Jill joined Pershing Square a couple of months ago from Hilton, where she was head of investor relations for more than a decade and was the number one ranked investor relations person in the S&P 500 over that decade period of time. We invested in Hilton probably eight years ago or so. At the time, it was an underappreciated story. Stock was trading at something like 18x earnings. Today, in the middle of a war, Hilton's trading at 33x earnings, and it really speaks to what can be accomplished with kind of proactive, transparent investor communications and capital allocation policies. Hilton, I would say, is an exemplar in the way they've managed their business from a public company perspective. They've also done a superb job in managing the business from an operational perspective. In fact, Hilton has a very analogous, I would say, economic characteristics to Universal in its capital light business model. Hilton is a royalty on people staying in hotels, in much the same way that Universal's a royalty on people listening to music. I think the differential performance of the two companies is incredibly stark, but is largely explained by the issues that we've identified here. The transaction is, effectively what's happening here is we are using a merger to effectuate a significant corporate change of the company, changes in the balance sheet of the company, changes in the board of directors of the company, changes in the dividend policy, a relisting of the company or a listing of the company on the New York Stock Exchange. The economics of the transaction is that shareholders will receive a little over EUR 5 in cash and 0.77 shares in New UMG. The package we value at EUR 30.40, a 78% premium to the closing price the last time the stock traded before the holiday. New UMG will have 1.541 billion shares outstanding. In terms of economic substance, what's happening is the company, as effectuated by the merger, is buying back stock at a price of EUR 22 and canceling 17% of the shares outstanding as part of this transaction. The EUR 5 comes from EUR 9.4 billion of cash. EUR 2.5 billion of that comes from the Pershing Square funds and the SPARC rights holders. We are backstopping the SPARC rights holders. If the rights holders were not to choose to exercise their rights, we will take up all of those rights. EUR 5.4 billion of incremental investment-grade debt. We think it's important for the company to have significant continued and strong financial flexibility. We'll walk you through the company's balance sheet and its cash generation over the next five years. The transaction is financed in part by monetization sale of the Spotify stake, net of taxes, and with a share to the artist. The other big labels have sold their stake. They were all anchor investors in Spotify. The others have sold their stake, and appropriately shared part of the proceeds with artists. Universal will do the same, and we estimate the net proceeds after taxes and the artist share. UMG will be a Nevada corporation. We've chosen Nevada because it's become a favorite place for companies to locate. Less risk of the typical plaintiff spurious litigation and a very constructive corporate regime, and a listing on the New York Stock Exchange. Obviously, there's flexibility. If the company were to prefer Delaware or prefer Nasdaq, we could accommodate those requests. The transaction can be completed, we believe, by the fourth quarter of this year. It requires support of the UMG board and a vote of two-thirds of the shareholders in attendance at the meeting called for the purpose of approving the transaction. In short, stock last traded at EUR 17.1. You receive EUR 505 in cash, which is about 30% of the market value of the common stock of the company. You receive 0.7 shares in New UMG. We value those shares in the post-merger environment, change in board, change in capital allocation policy, change in IR policies, at 25.34 for a combined package value of EUR 30.4. It's actually a simple transaction. We're merging a clean shell. It's an SEC-registered entity. It files 10-Ks and 10-Qs. You can find it at sec.gov. There's really been no activity in the vehicle other than we've put capital, about EUR 40 million or so, or maybe EUR 50 million of capital into the entity that we've used to pay transaction costs in connection with reviewing potential merger partners. New UMG will be a new corporation that will own 100% of Universal Music Group. There will be no change to the way the business operates. There may be opportunities, actually, for more efficient tax structure of the company that could bring down the company's corporate tax rate today from 27%. How does New UMG create value? One, we're going to, as part of the transaction, the balance sheet takes on leverage. It gets 2.5 turns, well within the existing ratings construct. For the business, that capital is returned to shareholders and used economically, in effect, to cancel shares. We make a complete redo, a refresh start in how the company engages with shareholders, everything from the nature of the financial disclosures. Obviously, the company will file 10-Ks and 10-Qs, providing quarterly detail. That, on its own, will be very helpful in enabling people to follow the business. The company will have a very proactive approach in how it engages with shareholders and analysts and providing information to shareholders. The board will be refreshed as well. We've proposed Michael Ovitz as Chairman. Michael is an incredibly experienced executive in the entertainment industry, quite broadly. Obviously, Universal, it's a music company, but it's also a company that produces films and all kinds of licensing and other opportunities with this activity that Michael has extraordinary experience with. Also, a wonderful long-term relationship with Lucian, which we think is very, very helpful. Two representatives from Pershing Square. It'll probably be two of the three of us sitting at this table. We haven't decided nor discussed with the company who those two should be, but we're open to that decision. The company lists in the U.S. The significance of the listing is highly material. Today, if you're a company that is not eligible for S&P 500 inclusion and you're a company of significant scale, it is hard to achieve a full valuation for the business. Index ownership has grown very, very substantially. Universal would be the only music company in the S&P 500. We think there's an opportunity for an accelerated addition to the index in light of the iconic nature of the business. Importantly, it's not just the index inclusion. It makes the stock ownable by the large number of investors whose mandate does not allow them to invest in companies that are listed only, for example, on the Euronext index. How do we get to a consideration value of 30/40? The answer is, our model gets us to, under the kind of recast balance sheet, EUR 1.32 in earnings in 2027. We assigned a 25x multiple, which is basically the average multiple the stock has traded at until the last several months. We think that is actually conservative for a business of this quality. We'll walk you through some of the comps. The stock, we believe, will trade at a 92% premium to the current level, which is obviously quite extraordinary, and we expect as a result that investors will. You'll have the opportunity to elect cash, stock, or some mix. We expect that overwhelmingly, shareholders will elect stock in light of the higher value of the stock, but if shareholders elect cash, they'll receive EUR 22, which is a 39% premium to the current unaffected price of the company. The more shareholders elect cash, the more value for the shareholders who elect stock in the company. We think the stock price, this is not just a short-term pop in the stock. Following this business plan over the next five years, we believe generates total value to shareholders of EUR 74. That is a 45% IRR, a more than fourfold increase in the stock price. The components, we begin with a EUR 17 stock price, and then just the resetting of the balance sheet, the relisting in the U.S., the changes to the board, the commitments to shareholders about investor relations, the greater disclosure, we believe, gets the company back to its historic multiple of 25x. That gets UMG to a EUR 33 share price. EPS growth drives another significant increment of value, and then we believe by five years from today, perhaps sooner, multiple expands to 30x, which we think is appropriate based on comparables for a business of this quality. That's EUR 71, and over the period, the company distributes EUR 2 in dividends. Importantly, we are not cutting the current dividend. The company has had a policy of distributing 50% of net income to shareholders. We think that is actually too big a percentage of earnings being sent back to shareholders and reduce the company's financial flexibility. Rather than cut the dividend, what we're doing is just we're going to grow the dividend at 2% per annum. Over time, the distribution percentage of earnings will decline over time, giving the company incremental financial flexibility. The value creation plan. We start with capital allocation and balance sheet optimization. Steps are, as part of this transaction, we're monetizing, i.e. selling the Spotify stake. We'll either sell that in the market or in a block trade. It's a 3% position. It will not have any impact on Spotify's share price. We will adopt a net debt to Adjusted EBITDA leverage target of 2.5 x, and the company will operate with quote unquote, "a constant leverage target." The idea being here, the company can very comfortably support 2.5 turns of leverage. As the operating income of the business grows over time, and Adjusted EBITDA grows over time, we'll maintain that leverage target. The business will generate cash flow in the ordinary course and will also generate, if you will, almost like refi proceeds on your home as the business value grows, maintaining that target. That will generate a substantial amount of cash, giving the company significant financial flexibility. By the way, that approach is not unique to Universal, but it's an approach that Hilton and other very highly regarded companies take in how they allocate capital to shareholders. A dividend of 2% over time, allowing the payout ratio to decline. The company today has a EUR 2.7 billion market value investment in Spotify. We estimate about EUR 480 million in taxes. We estimate an artist share of EUR 750 million. This transaction will deliver EUR 750 million approximately of value in cash to artists. If there's some recoupment, perhaps that needs to be collected first, obviously, before artist receives the balance of their payment. This is a very pro-artist transaction. That leaves EUR 1.5 billion remaining to distribute to shareholders as part of this transaction. Today, the company has 0.9 turns of leverage, and that has declined over time as the business has generated more Adjusted EBITDA. Net of a kind of on-balance sheet non-core assets, it's actually 0.1 turns of leverage. The company is effectively unlevered today. Warner has 2.5 turns of leverage, and Warner is not Universal Music. It is not the most dominant company. Universal is the dominant player. The rating agencies and bond investors obviously look at market position, dominance, scale, and thinking about what an appropriate level of leverage is. We believe Universal could have actually a meaningfully higher number of turns of leverage and still achieve better ratings than Warner. This is not a transaction about pushing limits. It's a transaction about the company maintaining very strong financial position. Notably, Warner, in the summer of 2024, when it had 2.7 turns of leverage, was upgraded to investment grade. Again, not the business that Universal is. The new dividend policy will generate an approximate EUR 3 billion of incremental cash, giving the company significant financial flexibility. The 50% dividend policy was a vestige of a transaction that was done five or so years ago. That obligation to distribute 50% of dividends expired when the group dissolved last year. Very important slide. The company has talked over time about the importance of strategic and financial flexibility. We couldn't agree more. All of that being said, this is a company that will generate EUR 12.8 billion of cash flow over the next five years, net of the EUR 4.1 billion of dividends, which includes a 2% per annum increase from today. The company has EUR 8.7 billion of free cash flow available over the next five years, just from operations, after tax. Maintaining a constant leverage target, the company will generate EUR 6.1 billion of incremental proceeds that are available for strategic investment and other purposes. That's EUR 14.9 billion of total cash available over the next five years for investments. Since the company has been a public company, over the last 4.5 years, the company has spent EUR 1.8 billion on acquisitions. We've got effectively EUR 3 billion per annum available for the company to do whatever makes sense for the business. Our first priority for every company we invest in is if they've got a great use of capital that improves the company's strategic position, that should be the first priority, and this is a transaction that is not in any way going to hamper the company in continuing to be the dominant player in the industry. Let's talk about shareholder engagement. The company holds an analyst capital markets day. This is the most recent presentation where they put out some kind of long-term guidance on revenue growth, subscription growth, Adjusted EBITDA growth, free cash flow, et cetera. Notably, the business, in some sense, Universal, in our view, has never graduated from being operated like a private company. While these are metrics that make sense, they're not, I would say, complete metrics for a business that's public that has a shareholder base. Ultimately, what matters in valuing a business is what kind of cash will the business generate per share over its life, and there are no per-share metrics that the company puts out to shareholders. The lack of a per-share focus, obviously, is concerning to investors who don't get to participate in the earnings of the company until it's not just adjusted EBITDA, but there's capital expenditures, there are taxes that need to be paid, there's some depreciation, there are option issuances, there's cost associated with. The absence of a focus on a per-share metric, we think, has been a significant concern for the shareholder base. We're proposing that the company update its long-term growth algorithm to add EPS growth and ambitions with respect to growth plus dividend yield for the business. We believe the company can be a high teens earnings grower over the next foreseeable future, decade plus, under the plan. One of the things that I think we know well, we obviously have, as an investor in many businesses over time, also as an investor who sat on boards of directors, we have a unique perspective on how shareholders should be treated, how they should be provided with information, what kind of level of transparency is appropriate. Our approach here is we want to give shareholders the information they would want in order to understand the business. Of course, not giving away anything that would threaten the competitive position of the company, unless there was, of course, a legal obligation to do so. That's kind of philosophy we intend to adopt here, and we're going to work very closely with management and Matt Ellis. We think Erica is an excellent investor relations professional, but she needs to have a mandate to provide the information that shareholders need. Okay. Governance. Our proposal here is three directors that will join a new board. The board will be comprised of the three we're proposing, directors from the current board, possibly some other additions. We want to set an appropriate board for a U.S.-listed S&P 500-eligible company. Listing venue. Universal is a U.S. business. More than half of revenues, profits come from America. The company is based in Santa Monica. The peers that the companies should ultimately be judged by are both listed here. The analyst community, which covers Warner, really should be covering Universal. The fact that Universal is a Euronext-listed company affects not just who can own the stock, but who covers the stock. Having everyone covered by the same analysts, listed in the same market, providing under the same accounting, we think provides a level of transparency that is necessary. Most important benefits of listing, of course, Universal as a company is a EUR 50 billion-ish company, and the stock trades as if it's a smaller cap business. We believe a listing here would be a dramatic increase to the liquidity of the stock, would broaden the investment base to include investors who love businesses with this kind of characteristic. There will be some owners that will have to own the stock, i.e., index. A significant additional index inclusion, and plus there are many investors, of course, that track the index themselves. Why is Universal underowned? There are mandate issues for investors who cannot invest in a Euronext-listed company, the limited liquidity of the stock, having to worry about translation risk on a business where the stock price is denominated in euros. IFRS and GAAP have some important differences, which creates some confusion for investors, and the other sort of closest comps are listed here. This is a list of indices, and the Xs are where Universal is not included. S&P 500, Russell 1000, the CRSP U.S. Total Market Index, these are critically important indexes in terms of market share where the company does not participate. By the way, it is not essential as part of this transaction that UMG gives up its Euronext listing. That's something that could be considered. Now there are, we think, some other burdensome issues associated with having a domicile overseas. We think that it's important for the company to be domiciled here, but that is, again, another area of flexibility that can be examined. Okay. I'm going to turn over to Ryan Israel, who's going to speak to financials and the valuation of the company, starting with sources and uses. Thanks, Bill. What I'll do is provide a little bit more detail in terms of the total consideration that Bill's talked about before, as well as some of the underlying assumptions that really lead to a lot of the per-share value creation inherent in our proposal. To start with the sources and uses, in terms of cash, as Bill mentioned, we're providing EUR 9.4 billion. Of that, a total of EUR 2.5 billion of funding is going to come from the Pershing Square funds affiliates and SPARC, all of which will be backstopped by the Pershing Square funds and affiliates. To be a little bit more specific of that EUR 2.5 billion, we envision EUR 1.4 billion coming from Pershing Square funds and affiliates directly, and another EUR 1.1 billion coming from the SPARC holdings, of which we are backstopping importantly. In addition, we think that. One point of clarity there. The EUR 2.5 billion that we are investing in the company is being invested at a price of EUR 22 per share. We're paying. Some people have questioned, is Pershing Square part of the overhang for the stock? In fact, we're buying, as part of this transaction, EUR 2.5 billion more shares at a 39% premium to the last trade. That, I would argue, is a pretty significant indication that we're not part of the overhang. Absolutely. We're committed to the company. In addition to that, there will be further cash coming from the company's balance sheet of about EUR 5.4 billion, which would be the incremental debt proceeds from taking net debt leverage up to 2.5 x, and another EUR 1.5 billion, as Bill mentioned, coming from the net proceeds from the sale of Spotify shares. All of that EUR 9.4 billion will be coming in at that EUR 22 a share, which will fund a little bit over EUR 5 in cash per share. Now, as Bill mentioned, in terms of the pro forma ownership, while we're already, in terms of the Pershing Square group, a very large and one of the largest owners of the company at 4.6% of the total outstanding shares, this transaction and the net incremental investment that the Pershing Square funds at SPARC, all of which will be part of the Pershing Square group, will be investing, will further increase our ownership. When you take into account the net cancellation of shares that will be occurring, we will increase our ownership overall to 11.7%, making us one of the largest owners of the business and a major shareholder in support of the value creation plan that we will work with management to implement. Now, the EUR 9.4 billion is ultimately going to, in function, cancel shares, which will very accretively, relative to the value that we ascribe to the business, help improve the per-share value. We're going to be canceling 17% of the shares, and therefore New UMG will benefit substantially from the per-share value growth of having fewer shares outstanding that can be financed in a very attractive way between the debt proceeds as well as the initial EUR 22 a share. Basically, not only does the incremental debt improve the return on equity of the business going forward, but the per-share earnings of the business are increased significantly because of the cancellation of 17% of the outstanding shares. As Bill's mentioned previously, we believe that UMG ultimately is a business that can grow its per-share earnings at a very high teens rate over time for at least a decade or more. I'll walk you through some of the details as to how we build up to that approach, starting with revenue. We think that UMG can ultimately grow revenue at a high single-digit rate that could be close to approaching double digits over time because of the success of the subscription and streaming business, which is about half of the overall revenue profile, and that we think itself will be growing at a double-digit rate. More people around the world every day are able to subscribe to UMG's subscription services, ultimately through its digital service providers such as Spotify, Apple, and Amazon. Those services are very underpriced, which provides an opportunity over time for the company to grow its revenue in addition to subscribers due to the increasing prices, while still keeping music as the lowest cost form of entertainment, but better reflecting the value that it delivers to people. The other 50% of the business across a variety of different segments is generally growing at close to a high single-digit rate, except for some of the smallest parts of the business, which are growing at a more modest rate. We think over time, this should be a business that's growing at a sort of 7%-9% rate, high single digits in terms of revenue. We think on page 36, you can see, though, that the Adjusted EBITDA growth of this business will be able to grow significantly in excess of that because the company has an opportunity over time to improve its profit margins from a mid-20s% level today to something over the next four to five years in the high 20s%. This is due to a combination of factors. First of all, we think that the current EBITDA levels margins are negatively impacted by a mix shift. UMG has three different sources of revenue. The highest margin source of its revenue is ultimately coming from the subscription and streaming services. While those are growing at a healthy rate due to COVID, there are other parts of the business that are recovering, such as merchandising, which is a much lower margin business that's growing more quickly, which creates a negative mix shift. At the same time, the physical business, which is experiencing a renaissance due to a lot of the growth in vinyl recordings, it's also a lower margin business. Some of the lower margin businesses, while very good, are growing at a faster rate, and that is negatively hurting margins. Once we are past the recovery from COVID in terms of merchandising and physical slows down to what we think is a longer-term rate in the mid-single digits, we would expect there to be a positive reversal of the mix shift in the margins of the business. Secondly, though, we think that gross margins can expand over time. As I mentioned earlier, streaming itself, we think, is a faster-growing business than the rest of Universal Music Group's revenue, and it's a higher margin. Inside of streaming, we think that a lot of the catalog, which is experiencing a fast rate of growth, is actually higher margin than other parts of the streaming business, allowing us to grow gross margins due to both of those factors. While there's a little bit of an offset in gross margins due to the recent acquisition of Downtown Music, we think that because that business is a fundamentally lower margin, we do think there's a lot of synergies which could, over time, help offset some of that and improve margins as well. Fundamentally, we think a lot of the opportunity for an expansion of Adjusted EBITDA margins is going to come from the fact that the company has a high fixed cost base where the incremental expenses do not need to grow nearly as quickly as that high single-digit rate of revenue growth, which is propelling the business going forward. Some of those costs, for example, such as Artists and Repertoire, while they can experience very nice growth, don't need to be growing at the same rate, high single digits. We also think that in an AI world, there's a lot of opportunities that UMG will experience, much like other companies, from operational efficiencies, which should further limit cost growth below the rate of revenue growth. Just sort of one easy example of this is a lot of the sort of back office legal part of Universal. We've been using Harvey. Yes. Yeah, Harvey software or AI software, which has been a major productivity tool for our legal team on everything from contract reviews to writing contracts, et cetera. That is a meaningful part of the and significant expense for the company and an opportunity if the company is not already using Harvey tools and other AI software tools. It can be a significant opportunity for productivity and cost savings. In addition to the fundamental factors that we think apply to UMG's business, just given the overall characteristics of the company, we also think that looking at its smaller peer, Warner Music Group, supports that there's an opportunity. UMG has nearly double the level of revenue as its smaller peer and is the undisputed market leader in terms of reputation, market share, and a lot of other things where this is a business where scale matters tremendously and allows the company, which is a better company than its peer, to ultimately benefit from those advantages. As you can see on page 38, though, while the company has enormous scale and other advantages, the company's margins are relatively similar to Warner Music Group's. Just for point of clarification here, what we're showing are operating profit margins, not Adjusted EBITDA, as there are some differences in accounting due to the listing jurisdictions and other descriptions where the operating profit is a little bit easier way to compare the two businesses' margins directly. We think this shows that the company has an opportunity over time to expand its margins because Warner Music Group actually is expanding its margins and has a target where they would go from the mid-20s% to the high 20s% over the next several years in a longer-term path, which is exactly what we think is the opportunity that UMG has as well, but is even more so because of the company's scale advantages. When you add together the high single-digit revenue growth that we believe the company can generate consistently over time, combined with the opportunities to leverage some of its costs in order to have margin expansion, we actually think that the company can grow its EBITDA at something in the rate of 11%-14% annually over time due to the combination of a high single-digit revenue growth, the benefits from operating leverage, and the positive mix shift. The company has also done some tuck-in acquisitions, which we expect they'll continue to do over time, allowing the business to grow at a very healthy low to mid-teens rate. We'd also note that we believe that the margins of this business are going to have a slight decrease relative to the impacts of the Downtown, which will be a temporary phenomenon as the company's margin profile there is less than 5%, but we expect synergies and other operational improvements will help that be a temporary headwind that will reverse itself over time. When you then compare UMG's revenue growth and Adjusted EBITDA growth, which we think can be very healthy, we think ultimately the capital allocation framework that New UMG will implement with our help will allow it to have a very high degree of accelerated earnings per share growth, which, as Bill mentioned, is ultimately the key measure for investors to create value in the share price and in the company over time. If you compare several key categories, capital allocation today, it's a little bit vague in terms of how the company intends. Post-transaction, we'll have a formulaically articulated strategy where we will be increasingly devoting funds to repurchase shares, which we believe will be a big enhancement to per share value and to earnings per share growth. For M&A, right now it's a bit episodic. In our financial model, we're assuming the company can continue to do these types of acquisitions at about EUR 500 million a year. In terms of dividend policy, right now, the company pays out 50%. In our transaction, that payout ratio would decline over time, although the dividend itself would continue to grow at a level of 2%, which would be far below the rate of earnings per share growth, which would allow the payout ratio to decline and allow us to buy back more shares. Share purchases, the company on March 30th announced its first repurchase of EUR 500 million. Post-transaction, after we effectively cancel the 17% of shares initially, we would expect excess capital will be available for share buybacks substantially exceeding the EUR 500 million. In terms of leverage, the company is currently unlevered. Post-transaction, we would have a net leverage ratio of 2.5 x, which would allow it to continue to be investment grade rated, and as Bill mentioned, provide significant financial flexibility to make investments in the business, other acquisitions, as well as buy back shares. By the way, the EUR 500 million, we think episodic M&A, of course, makes sense. You don't want to have a plan to spend a certain fixed dollar amount each year. The company will have EUR 15 billion over the next five years, well more than we believe the potential list of targets that are either acquirable for the company or make economic sense for the business. Maintain tremendous investment flexibility, maintain an investment-grade rating, but have a more optimized capital structure. When you add it all together, we believe that on a per-share metric, UMG can grow its earnings per share at 15%-19%, and then we'll also get the benefit of a 1% annual dividend, leading to a 16%-20% rate of annual growth at a constant earnings multiple. We believe that this is best in class for the music industry and is very consistent with a lot of other companies that we think are high quality, royalty-like, strong secular growers that appropriately trade at very high multiples that reflect their per-share value growth over time. We think that over time, this will be very similar with UMG as the company's shareholders gain increasing confidence that the company can deliver the results that we see them in a post-transaction world. As Bill mentioned earlier, the combination of the Pershing Square board representation with Michael Ovitz and then also having had the help of Jill Chapman and understanding how to create value for shareholders and getting the public confidence is something key to allowing for the company to trade at a multiple that is much more in line with what we believe is its appropriate growth characteristics and where similarly positioned businesses trade. On page 43, you can see companies that we believe are comparable in terms of their business quality, in terms of their growth profile, and what you notice is the multiples are nearly double the level for these businesses. Most of them trade at 30x or slightly above relative to UMG, which was trading at 16x as of the last close prior to the holiday. We think that the earnings per share growth for UMG is actually higher than some of the companies on this page, yet the multiple is nearly half the level. By the way, the earnings growth rate that we show here is now optimized for this new business plan. The current earnings growth rate is actually below the current plan. Part of the reason this transaction creates value by canceling 17% of the shares outstanding, maintaining constant leverage, taking excess free cash flow and returning it to shareholders, reducing the growth rate of the dividend, we can accelerate earnings growth in a kind of meaningful way, leading to an appropriately higher multiple. The historic 25 average P/E the company traded at did not reflect the benefit of these opportunities to accelerate earnings growth going forward, which is why we believe that 25 multiple is conservative. When you add everything together, you take the initial transaction, which provides the EUR 9.4 billion or a little over EUR 5 per share, which ultimately goes to reduce about 17% of the shares outstanding. You grow the business at an earnings per share level at a high-teens rate. Over time, we believe in the future, we can get something close to EUR 2.40 per share by the end of 2031. If you put a multiple that is more consistent with where peers that have a similar level of growth trade at, we think that the business in about 4.5 years could be valued at EUR 71 per share. With the dividends of about EUR 2 per share, that would be a total of EUR 74 per share, which is about 4.3 x the level of capital in the mid-case as to what they were prior to the holiday's close, which would be about a 45% IRR. We think that That's a 4.3x multiple of the stock price at a 45%. Correct. Yes. We believe that there's an opportunity where based upon some of the peers and what we think is possible for the business, the results could be even better than that. Enormous value creation due to the uplift and the current base of earnings, the stated target that we think is more consistent with the business is optimally run from a capital allocation perspective with very strong business performance, should allow it, with good shareholder engagement and investor communication, to trade at a level that's much higher than where the market is currently assigning the multiple to very low 16x earnings. Okay. With that, operator, let's go to Q&A, and we welcome questions from analysts as well as shareholders and other investors. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure that your mute function is turned off. A voice prompt on the phone line will indicate when your line is open. Please state your name and company before posing your question. Again, you may press star one to ask a question, and we'll pause for just a moment to allow everyone an opportunity to signal. We'll move to our first question. Your line is now open. Hi, good morning. This is Michael Morris from Guggenheim. Thank you for the information and for taking the questions. My first question is about the revenue growth outlook for the business. I think that one of the overhangs for the stock has really been concern about the sustained rate of top-line growth, its subscription streaming in particular. You point out some things like pent-up pricing potential, the transition to wholesale rates. You also have some positive comments about AI. I do think that investors have had those topics on their minds for a while. My question for you is really, how does this change, and are you proposing a more significant strategic or tactical change at the company? Then if I could just ask one second one. Structurally, just the path to approval, given that there's that share ownership concentration of the top three holders with about 40% of the shares, can you just talk about how you see achieving the approvals that you need relative to that concentration? Thank you. I'll start with the second question, and then Ryan maybe could address the first. This transaction requires two-thirds of the shareholders who show up at the meeting to vote for it. In our view, we think we're going to have overwhelming shareholder support for the transaction. We have only spoken at this point to Bolloré Group in a very brief conversation that took place yesterday. We did not want to put them in a position of giving them material nonpublic information until we were prepared to launch the transaction. They are, I would say, intrigued. Music to our ears, but of course, the devil's in the details. We think this transaction will be very appealing to every shareholder, and the benefits here, if I can speak from the fear that some people have. What catalyzed the original step-down beginning in the summer when Bolloré Group's representative dropped from the board, was a court decision that had the potential to cause them to have to write a large check to acquire control of, or 100% ownership of some partially owned subsidiaries. The market said, "Okay, they may have to sell some of their Universal Music stake." Now, Bolloré Group has a large cash position excluding its Universal stake. Well, this transaction will generate something like EUR 2.7 billion of incremental cash to Bolloré, and they can still retain their stake in the company. We think this is a great way for the largest shareholder to receive significant cash consideration and continue to maintain a very substantial stake in the company. We don't think that there are really any element of this transaction that's not going to be appealing to Tencent or to any of the other holders. We now are in a position where we're going to be able to talk to the other holders. Yes, it will require support from Bolloré. Obviously, the transaction has our support. I think the transaction could be completed if we don't get every large shareholder to support it, but I don't see a reason why all the shareholders won't support this transaction. Of course, we need board approval from Universal Music. We need the support, ultimately, I think, of Lucian and the management team. Michael and I had a dinner with Lucian a couple of weeks ago, where we presented the idea of this potential transaction without really getting into details about a specific proposal. Lucian encouraged us to send it in, and something the company's going to take a hard look at. Again, I don't want to speak for management or the existing board, but I would say I'm very confident this is a transaction that addresses really everyone's concerns. It's almost frictionless. There's a small amount of dilution, if you will, because Pershing Square is investing EUR 2.5 billion at a 39% premium. An existing shareholder, in effect, receives EUR 505 in cash and will own 93% of their previous percentage ownership of the company. You're going to own a slightly smaller percentage of a much more valuable, frankly, better managed and better governed public company. I think it's important for us to be able to make a significant investment. Our vehicle is structured in a way where the minimum capital we have to raise is about EUR 1.2 billion from our kind of SPARC shareholders. We've designed this transaction to be as friction-free as possible, and one that we think will be appealing to obviously the board of the company, the management of the company. Obviously, you've got an employee base that received a large amount of stock options that are today massively out of the money. That's no fun for employees. It's no fun for the senior management in managing a team of employees whose options are kind of out of the money. I think this transaction has important benefits for really all of the stakeholders. The other point we mentioned is that the artists get a nice EUR 750 million check as part of it. We think the transaction kind of checks the box for all the various holders. Again, I can't speak for any of the big holders. They have to have time to examine it. They're hearing the details really the first time now. Ryan, why don't you address the other question? Yes. In terms of revenue growth, I think there will be no changes to how the company is currently managing the business in terms of growing the revenues. We are very optimistic and excited of the success the company has had historically since they've become a publicly traded company over the last 4.5 years. I think when you look at those results of nearly double-digit subscription and streaming growth over that period of time without the benefit of wholesale pricing, we think that really the future could be even better than the past has been. What I would note is that I think a lot of this starts with how essential and valuable music is, yet how low cost. It is. It is really a big disconnect between the value that people pay for music and the value that they receive, which we think has a dual benefit of both continuing for a decades-long opportunity for more people to continue to subscribe to these valuable music services. At the same time, we also think that that means pricing over time can be an uplift. One of the key things that we're very excited by now is the shift to wholesale pricing. Previously, despite having a very underpriced product, UMG was relying upon the digital service providers to decide to take up retail pricing. Those digital service providers themselves decided that they wanted to continue, by and large, in our view, to underprice the service relative to its value so that they could grow subscribers even more quickly. Now there has been more of a desire to balance out those considerations consistent with how other media companies, for example, Netflix, have decided to approach things over time, but UMG still had to wait for them. Now, with the advent of wholesale pricing, we think there's an additional lever for the company to help be able, in a prudent manner, to have music be priced more appropriately. When you combine the longer term growth in subscribers, which we think will continue at a healthy rate, combined with what we think over time is a very significant opportunity in a reasonable cadence to take up pricing, we think this allows for the future of revenue as currently run, to be very bright. Where we think that we can add a lot of value is help in capital allocation and shareholder communications. We think the combination of those two things can be very powerful to allow for very significant earnings per share growth over time. Thank you. Next question, please. As a reminder, if you'd like to join the queue, you may press star one on your telephone keypad now. If you find that your question has been answered, you may remove yourself from the queue by pressing star two. We'll move to our next question. Your line is now open. Good morning, guys, and thanks for the question. This is Omar Mejias at Wells Fargo. First, maybe on capital allocation, how do you guys balance this new capital allocation plan that focuses on shareholder returns versus long-term investments in growth? I think that's been a key consideration for UMG and the board, especially with M&A, JVs, and growing market share in some of these emerging markets. Just curious how you approach that in terms of balancing the level of spend and focus. Sure. We agree with management that the first priority of the free cash flow of the business is investments, acquisitions that further improve the competitive position of the company. We think there's a large international opportunity, particularly in kind of smaller markets around the world. That's where the big driver of growth is, and the company's done a very good job of targeted tuck-in and other acquisitions to improve its position, Asia, Africa, other kind of regions around the world. This transaction doesn't in any way take away the company's flexibility to pursue those kinds of transactions. The free cash flow the business will generate after debt service is approximately EUR 8.7 billion just operationally, and that, we think, is probably more than sufficient for what's required for reinvestment in the business. in addition to that, just maintaining constant leverage, the company will generate an additional EUR 6 billion of capital. That total of EUR 14.9 billion is available to the extent some incredible opportunity were to come along. Now, the company, of course, has been looking for those and pursuing those opportunities for the last 4.5 years since it's been a public company, and the company's only actually identified and executed on EUR 1.8 billion. We have EUR 15 billion of capacity against what the company spent over the previous five years of about EUR 1.8 billion. This is a, whatever, 8x or 7.5x, so 7.7x of incremental flexible capital that can be used for acquisitions. Now the reality is, we think, the various constraints in terms of UMG's market share and otherwise that make it difficult for the company to do Universal can't buy Warner or Sony. We're not really in a place where EUR 15 billion could be spent, in our view, on investments or acquisitions, which creates the flexibility for that capital to be returned with share repurchases. Does that make sense? That's very helpful. Maybe a follow-up on maybe another topic that's really weighing on the sector is obviously the AI narrative has been challenging for UMG and certainly other folks in the music space. How do you view communication on that front? Then I think there's been some key debates on open source and walled garden approaches in terms of how to adopt some of the initiatives in AI. I think folks are also curious to see if you guys would have a different approach in terms of how do you communicate on the AI front and maybe execute on the space. Thank you. We've anticipated the question. We have a few slides that Feroz can walk you through on our thoughts on UMG and AI. Go ahead, Feroz. Sure. Thanks, Omar, for the question. Very topical, given investor scrutiny in general how are businesses being affected by AI. For those following along on page 52, we talk a little bit about how, in our opinion, AI actually further solidifies the role of labels and will hopefully enhance UMG's growth potential. First and foremost, this idea of music flooding the DSPs is not new. That has been happening for several years now, and through that, the labels have maintained share. As that increases further, the labels themselves become an essential curation engine, and for real artists to actually be able to differentiate themselves that actually go global. What's happening today is that most music is actually not listened to, and is actually unmonetized under the new agreements that the major labels have signed with major DSPs. As I mentioned, despite this proliferation, UMG in particular, among the majors, has maintained its market share. What's also notable that you highlighted in your note highlights that you put out yesterday is that this actually creates new opportunities beyond the traditional DSP model. UMG is taking all the necessary steps to defend and protect its IP, but also has struck a number of revenue-generating partnerships. UMG, I would also highlight, was among the first to utilize AI use cases, Now and Then several years ago by the Beatles, releasing simultaneous songs in several languages. What I think is under-discussed broadly is that AI is already being used by real artists today. Real artists are using it to ideate, generate new ideas, melodies, and that'll hopefully increase the velocity at which they can actually increase vocals. As Bill and Ryan mentioned, we think AI can also hopefully make the business more efficient. If you could go to the next slide, Bill. What's also notable is that music is not just a sound, right? It is created fundamentally and performed by human artists. If you look at the top artists, they are really cultural phenomena. The idea that Taylor Swift performs her songs is quite important, as opposed to if Taylor was just a virtual artist. Now, virtual artists can be a niche. AI artists definitely will be a niche. We don't think they will be as commercially relevant as a Taylor Swift or Drake, for example. If you go to the next slide, Bill, this really highlights what we were speaking to earlier, that there is already a vast catalog of songs available. The vast majority of those actually do not get listened to, what we think of as not commercially relevant, and only about 10% of songs get 1,000 to 100,000 streams. Fewer than 1% of songs are truly commercially relevant and even fewer, less than 0.2% of songs are, I would say, culturally relevant. If you go to the next slide, Bill. What's also notable is that, as you can see on the left-hand side, this is the percent of total content, songs delivered to DSPs, individual unique IDs, over the last two years. In 2024, the majors represented about 8%. In 2025, as you would expect, given the proliferation of AI music, and other sort of easier ways to make music, that went to 4%. What happened during that time to the majors' collective share, and this stat on the right-hand side is from Spotify's annual report that many are familiar with. There are other sources as well. Over that timeframe actually, the collective share for UMG, Sony, Warner and Merlin actually went up by 100 basis points. Quite notable, and I think this is likely to continue. One of the breakout stars of last year was this songwriter turned artist named Xania Monet. She joined a couple of charts. What's notable here is that, A, she's actually a real artist. She is a very talented songwriter that was able to use Suno to better commercialize and create songs of her own content. Which one is notable. Two, what's interesting is that an independent label actually signed her. Like other technologies before it, such as the electronic synthesizer, we think AI can broaden the idea of who is an artist. Again, the labels will be there to help these people break out. Maybe the next slide. This gets to your question, Omar, about open versus walled gardens. UMG has been at the forefront, even before AI, of striking new deals with new DSPs. I would note that every single time a new format came to bear, Michael Nash, Lucian Grainge and their collective team have been the first to strike those deals. Your specific question about open versus walled gardens seems to be a debate right now, in particular, how UMG is operating relative to Warner. Warner has gone ahead and signed a deal with Suno, which is the leading AI platform, whereas UMG is holding its line. Our view on that is we have full trust in UMG's management on how to get the best deal for not only the business, but all their stakeholders, including artists. To the extent open studios make sense, where artists whose content is being used to generate those sounds are fairly paid, I think UMG management would happily sign that deal. I think going back to my earlier point, it is notable that while UMG is first to sign these new deals, Warner went ahead first. We have full confidence and faith that UMG will do the right thing for its business and its shareholders. Then maybe the last page, Bill, on this topic. What I think is under-discussed is the impact that AI can have in potentially making UMG's business even more efficient. Bill spoke to some very specific examples. The business affairs function at these labels is among the largest. All day they're negotiating contracts. That's one where you can certainly make the business more efficient. Think about automated A&R, being able to predictively figure out who might chart or who might break out on social media, better engaging with fans. The idea that you have this massive catalog that can be activated on a moment's notice, being able to push forward better marketing resources for new artists. These are all ways that UMG can better use AI to make their business more efficient and their catalog even more valuable. I'll leave it at that. Yeah, I think I would also add that as the DSP algorithms improve on what music to serve to the customer, where AI will be helpful, we would expect obviously more listening hours. Next question. We'll move to our next question. Your line is now open. Please go ahead. Yes. Good morning. It's Christophe Cherblanc from Bernstein. I had two questions. The first one was on capital allocation. You insisted on disciplined allocation. What's your take on the mix between catalog and planned acquisition, and should we expect more use of structure like Cord? The second one was on artist and repertoire cost. I was a bit intrigued why you're confident that A&R costs do not need to scale proportionally with revenue, because my feeling was we are going to shift to new geographies, more independent distribution, which I would assume is leading to more A&R payout. Thank you. I'll take the first, and I'll give perspective, having been on the board of UMG for a number of years. This has always been a concern of shareholders. Is the company going to make, quote-unquote, a stupid acquisition of a catalog asset? Obviously, every catalog asset that becomes available, UMG effectively has the first opportunity to acquire it because of who they are and their resources. Any transaction that has happened to date, Universal could have purchased it at that price. The company has been, I would say, incredibly disciplined and thoughtful about which are the important enduring artists where it would be an enhancement to the company's catalog for an acquisition to make sense. They've also been very thoughtful about the way they've structured their ability to acquire catalog assets going forward. You referenced Cord, these other vehicles. This is a case where these vehicles can have a lower cost of capital than a public company, and where Universal as a partner, can bring very significant value in enhancing the monetization of catalog assets. They're the natural first call. Universal will put up some capital, will get some promote and some fee income, and effectively structure a transaction where they can control an important asset, make it effectively part of its catalog, but earn very attractive returns going forward. We think that model makes tremendous sense, and we've seen some other labels write some massive checks. Unclear to us how they hope to earn an attractive return. We've also seen some financial players come into the marketplace who do not have the expertise or bring value beyond some cash and leverage to acquire an asset. We think the company is extremely well-positioned, has been very thoughtful and disciplined about the way they deployed capital, acquiring catalog assets. If you're interested in this, music royalty assets, catalog assets, the right ones are kind of a differentiated fixed income sort of asset class. There are pension funds and other investors with very low cost of capital that for diversification, other reasons want exposure to this asset class. They don't bring any value beyond capital. That's where Universal plays a very important role and where it can extract important value because they can make a catalog asset more valuable. The EUR 15 billion of financial flexibility over the next five years, we don't expect that to be deployed with massive catalog investments. We do think the company will do other Cord-like joint ventures so that they're in a position to buy the right asset at the right price on the right terms for the company. Next question, please. And then- Oh, yeah. Go ahead, please. On the cost. We think that there certainly are some costs, and for example, on A&R, some of those costs will rise at a higher level than overheads. I think the point that we were trying to make is we believe that there is an opportunity throughout the overall P&L for UMG's margins to expand. For example, there is a positive gross margin uplift over time due to the natural mix shift of the business towards higher gross margin components, which should help margins. At the same time, a very reasonably large-sized amount of the company's costs, not related to A&R, in our view, are relatively fixed and do not need to be growing at a high single-digit rate. A lot of things like G&A, overhead costs, those are things in which we believe AI will be an opportunity, but also that a lot of the companies that are listed in sort of the comps that have a very high level of earnings growth focus a lot on making sure that costs that are not going to be generating revenue over time for the business are managed very carefully. We think UMG, some of their cost-cutting programs that they've had over the last several years highlight that. We also think going forward, there can be an increased and continued focus on that to make sure that we don't have any costs growing at a high rate that aren't adding a lot of value to the business. Next question, please. Next question, your line is now open. Hi, this is Geoffroy Laugier from Kepler Cheuvreux. Thank you for taking my two questions. You guys have opened up a Pandora's box, per se, of shareholder value creation, which so far UMG has kind of avoided. However, considering that the transaction is so far non-binding, are you open to other value-creating alternatives that could be put forward by either UMG or one of its referenced shareholders to form a consensus? Secondly, have you had the chance to look into the change of control clauses that this potential transaction triggers relating to UMG debt instruments, or change of control clauses pertaining to artist contracts that may impact the financials of the transaction? We don't have a high degree of detail deep into the company on change of control contracts. Economically, what's happening here in effect is the same shareholders are going to own the company pre and post-transaction. Other than Pershing Square is going to have slightly more ownership than it had before, and the other shareholders will have slightly less ownership. Board composition is something that we're very open to the inclusion of directors from the current board, and we believe there are no change of control. There's no significant frictional costs that are created as a result of if this were deemed to be a change of control transaction. One of the things we point out in the materials is that one of the conditions to the transaction is a reset or redo of Lucian's contract. My view is his contract is much too complicated, and there's an opportunity to restructure it in a way that makes sense. That will be part of this transaction. I do believe there is a change of control element in his contract, although I haven't studied it recently. Other than Lucian's, I do not believe there is any employee-related change of control that is triggered as part of this arrangement. Go ahead, Ryan. Alternative transaction. Yes. We're open to any and all transactions that create value for Universal shareholders and that make sense strategically for the company. Okay, next question. We'll move to our next question. Your line is now open. Hello. Good afternoon, everyone. This is Adrian from Bank of America. Hopefully, you can hear me okay. First question, if we assume that Bolloré rolls over his stake and Vivendi also rolls over, I think both entities end up with about 26% in UMG in total. I think you would have about 12% and you're asking for three directors. Would you give board seats to Bolloré or to Vivendi? Secondly, I think in your plan, UMG is going to raise EUR 5.4 billion of gross debt. Presumably, that's about EUR 200 million of post-tax interest. About 10% hit to the current net income, which negates about half of the EPS upside, if I'm right. Just wanted to check if you had that math also put forward when it comes to the EPS growth that you expect. On board composition, I have an excellent relationship with Cyrille Bolloré, and if he wanted to rejoin the board, we'd be delighted. If someone else from Bolloré made sense. The board composition ultimately has to be satisfactory to the company and ultimately to Bolloré as a critically important shareholder here and to us as a group putting forward a transaction. We want the best board for the company, and of course, a shareholder with a major stake in the business is entitled to appropriate representation on the board of a company. With respect to the financial model, go ahead, Feroz. Yeah. To clarify your question, Adrian, the numbers, the EPS and the free cash flow numbers that Bill has shared are all inclusive of the incremental debt raise. You are correct, the interest expense of the company will increase because of the higher leverage, but the EPS accretion is material given the amount of shares that will be retired. EUR 1.32 is post all of that, and we're happy to connect offline and walk you through the math as well. Okay. Next question, please. We'll move to our next question. Your line is now open. Yeah, hi there. It's Julian with Barclays. Thank you for taking my questions. I have three. The first one is, can you get back on the deal structure? I get the EUR 9.4 billion of cash, but how did you set the EUR 0.77 per share and the 1,541 million shares post-transaction? That's the first question. On the EUR 22 cash offer, you only have EUR 9.4 billion of cash available for the deal. So if Pershing Square take 100% shares and everybody else take cash, you only get EUR 5.3 cash, not EUR 22. So basically, for an investor to get a EUR 22 cash offer, you need four shareholders to choose 100% shares or am I wrong? The last question is, on page 22, you have EUR 12.8 billion of free cash flow, which is based on 65% conversion to Adjusted EBITDA. The historical average is 41% post-catalog acquisition and 60% pre-catalog acquisition. I assume your free cash flow conversion is pre-catalog. Can you confirm? If that's the case, why do you expect the conversion to go up by five percentage points? Thank you. Sure. With respect to the deal structure, it's the math of the transaction. We're investing EUR 2.5 billion at a price of EUR 22 as part of this transaction. That capital is coming approximately $1.2 billion, EUR 1.05 billion from Pershing Square SPARC Holdings, and the balance, EUR 1.5 billion is coming from Pershing Square. The purchase of those shares increases the share count, and then that's offset by the cancellation, in effect, of shares by the cash that goes out to the existing shareholder base. The math gets you to the ratio of stock that you receive for each share that you have in the company. We've designed this transaction to be minimally dilutive to shareholders. What I mean by that is, we believe the post-merger stock is worth in the low EUR 30 versus EUR 22 with the cash price. The result of that is we believe the vast majority of holders are going to elect stock, the higher valued stock as opposed to the cash alternative. In fact, if some shareholders elect the cash alternative, the transaction's even more valuable to the shareholders who elect stock because they'll get a greater proportion of stock than they would if the pro rata allocation were to happen. I haven't checked your math, but effectively, there's enough cash that, what is it, 23%? If 23% of the shareholders want all cash and 77% of the shareholders want all stock, then the shareholders electing all cash will get 100% cash. I don't think that's a likely outcome. I think people not paying attention might elect all cash, and the balance of the shareholders will elect stock. Feroz, you want to address the model question? Yeah, sure. Really to think about UMG's cash conversion, the company has put out some targets in its 2024 capital markets day about how much of EBITDA they convert to cash flow. The easiest way to think about it is post net income, there's really CapEx, artist advances, and then benefit from positive net working capital. We assume the nominal CapEx continues, and we actually assume that artist royalties or artist advances rather are a persistent headwind to free cash flow. The free cash flow numbers that Bill has quoted are prior to investments like M&A and catalog. In our model and the numbers we are showing in terms of earnings growth, we assume that the company spends $500 million annually on- EUR 500 million. EUR 500 million annually on strategic investments, including catalogs. Yes, those will be certainly episodic. You could have a year where you do EUR 1 billion, you could have a year you do EUR 200 million. Certainly, the numbers you quoted are because the company was going through a period of particular market activity around catalogs, which has lessened somewhat. The most important thing I'd highlight is that it now has a very capital light way of funding these catalog acquisitions through some of these JVs it has set up. Then on top of that, earn administration fees, which, again, drop fully to the bottom line. In fact, quite an attractive way they figured out a way to do these catalog acquisitions going forward. Okay. That is clear. Thank you. Do you want to have a follow-up? We welcome a follow-up question. Okay. Hearing no follow-up question. We have no further questions. Is that correct? That is correct. Okay, great. Okay. Thank you, operator, and thank you all for paying attention. We welcome your offline follow-up as well. Thanks so much. This concludes today's call. Thank you again for your participation. You may now disconnect and have a great day.