Vivendi Universal's 2003 Consolidated Financial Results.Business Editors PARIS--(BUSINESS WIRE)--March 17, 2004 Vivendi
VIVENDI® is a software package for care management and staff organisation published by the German software company CONNEXT and introduced in 1995. Universal (Paris Bourse Paris Bourse National stock market of France. : EX FP; NYSE NYSE See: New York Stock Exchange : V): 2003 MAJOR EVENTS -- Investment of E4 billion in SFR SFR Swiss Franc (national currency) SFR Société Française du Radiotéléphone (French cellular provider) SFR Single Family Residence SFR Single Family Residence (real estate) Cegetel. -- Agreement signed with GE to create, in the second quarter of 2004, NBC Universal NBC Universal is a media and entertainment company formed in May 2004 by the combination of General Electric's NBC with Vivendi Universal Entertainment (part of the French Media Group, Vivendi SA). GE owns 80% of NBC Universal with the remaining 20% owned by Vivendi SA. . 2003 CONSOLIDATED con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: FINANCIAL RESULTS -- Net debt(1) reduced to E11.6 billion at December December: see month. 31, 2003, after the E4 billion investment in SFR Cegetel. -- Adjusted net income(2) (excluding exceptional items and goodwill) -- positive at E349 million, an improvement of E863 million compared with 2002. -- Asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge: -- E1.8 billion asset impairment charge, notably at Universal Music Group and Vivendi Universal Games Universal Games is a Nevada company that produced such board games as Merger, Titanic: The Board Game, and the Apollo 13 edition of Solarquest. In 1965, their address was in Houston, Texas. Universal Games released Merger, a financial game for 2-4 players. -- Net loss of E1.1 billion. -- Strong growth of operating results on a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma (3) basis: -- Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of E3,309 million, up 61% on a pro forma basis, -- Consolidated cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses (4) of E4.4 billion, up 64% on a pro forma basis, -- Proportionate pro·por·tion·ate adj. Being in due proportion; proportional. tr.v. pro·por·tion·at·ed, pro·por·tion·at·ing, pro·por·tion·ates To make proportionate. cash flow from operations(5) of E2.8 billion, multiplied mul·ti·ply 1 v. mul·ti·plied, mul·ti·ply·ing, mul·ti·plies v.tr. 1. To increase the amount, number, or degree of. 2. Mathematics To perform multiplication on. by 3.7 times, on a pro forma basis. OUTLOOK 2004 -- Very strong growth in adjusted net income. -- Strong growth in operating income, excluding VUE See HP-VUE. VUE - Visual User Environment: a desktop manager for Unix from Hewlett-Packard. , NBC NBC in full National Broadcasting Co. Major U.S. commercial broadcasting company. It was formed in 1926 by RCA Corp., General Electric Co. (GE), and Westinghouse and was the first U.S. company to operate a broadcast network. Universal and Telepiu(6). -- Stable consolidated cash flow from operations, excluding VUE, NBC Universal and Telepiu(6). -- Net debt below E5 billion. -- In a position to pay a dividend to our shareholders in 2005. Further information is available at: http://finance.vivendiuniversal.com (1) French GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). gross debt less cash and cash equivalents. (2) For reconciliation of net income (loss) to adjusted net income (loss) please refer to the table in the supplementary schedules attached to this release page 15. (3) The pro forma information illustrates the effect of the acquisition of the entertainment assets of InterActiveCorp. in May 2002 and the disposition Act of disposing; transferring to the care or possession of another. The parting with, alienation of, or giving up of property. The final settlement of a matter and, with reference to decisions announced by a court, a judge's ruling is commonly referred to as disposition, regardless of of Vivendi Universal Publishing assets sold in 2003, as if these transactions had occurred at the beginning of 2002. It also illustrates the accounting of Veolia Environnement using the equity method at January January: see month. 1, 2002 instead of December 31, 2002. (4) Net cash provided by operating activities net of capital expenditures and before financing costs and taxes. (5) Defined as cash flow from operations excluding the minority stakes. (6) Telepiu consolidated until April 30, 2003 ; VUE consolidated until the closing of the transaction ; NBC Universal to be equity accounted. Vivendi Universal today announced its financial results for 2003 which are currently being audited and were approved by the Board of Directors. Comments by Jean-Rene Fourtou, Chairman and Chief Executive Officer "I am pleased to announce financial results for 2003 which have exceeded our guidance. Vivendi Universal's teams have accomplished a lot together in 18 months: we overcame a financial issue, we reduced our debt from approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. E35 billion to E11.6 billion, we divested approximately E10 billion of assets, not counting proceeds from the upcoming VUE transaction. Today, Vivendi Universal is in good working order. In 2003, Vivendi Universal has invested E1.6 billion of capital expenditures in its core businesses. It has also invested E4 billion for the acquisition of BT's 26% stake in SFR Cegetel. In addition, we have signed, in October October: see month. 2003, an agreement with General Electric to combine VUE and NBC. This will give birth to NBC Universal, one of the world's most profitable and fastest-growing media companies, in which we will be an active and long term partner. Our main commitment was to improve considerably our operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. and Vivendi Universal managers have focused successfully on this matter. As a result, our consolidated cash flow from operations grew 64% in 2003 and our proportionate cash flow from operations increased almost 4 times over the previous year, on a pro forma basis. We have reversed the trend: cash flow generation in the businesses now contributes to the reduction of the debt, while we maintain capital expenditures to strengthen our operations. We have eliminated the company's cash drains. The cost of the headquarters has been reduced 50%. For the first time in six years, Canal+ Group records a positive operating income. The Universal Music Group and Vivendi Universal Games are implementing a strong and determined reorganization plan A scheme authorized by federal law and promulgated by the president whereby he or she alters the structure of federal agencies to promote government efficiency and economy through a transfer, consolidation, coordination, authorization, or abolition of functions. . We have strengthened our relationship with Vodafone Vodafone Group Plc is a mobile network operator headquartered in Newbury, Berkshire, England, UK. It is the largest mobile telecommunications network company in the world by turnover and has a market value of about £84.7 billion (July 2007). for the benefit of SFR and shareholders. I am proud of the efficiency demonstrated by our teams, both at corporate and the business unit levels. A lot of work still needs to be accomplished this year: closing of the VUE-NBC transaction by the end of the first half, increasing our stake in Maroc Telecom Maroc Telecom (Arabic: اتصالات المغرب; Itissalatt Al Maghreb; Acronym: IAM) is the main telecommunication . IAM employs around 11,178 employees. , succeeding in SFR's 3G launch, continuing the process of strengthening Canal+ Group, improving Universal Music Group and Vivendi Universal Games operations, completing our non core assets divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). program and reducing our net debt. In 2004, I expect Vivendi Universal to deliver strong growth in its profit, to reach a level of debt below E5 billion at year end and be in a position to distribute dividends to its shareholders in 2005. On top of an improved financial structure, Vivendi Universal's main objective is to create value for its shareholders in two sectors with strong growth potential: over the long term, Media and Telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. have grown significantly faster than the rest of the economy. In 2005, Vivendi Universal will be a dynamic Media and Telecommunications group, delivering a strong increase in profit with high available cash flow and able to pursue internal growth as well as to invest in select external opportunities. " Comments on the Group's earnings: Due to substantial scope changes, the straightforward comparison of 2003 versus 2002 results, on an actual basis, may not be meaningful. This is why the comparisons below are presented on a pro forma basis(3). For comparison with "as published" statements, see the attached schedules. Adjusted net income The 2003 adjusted net income amounted to + E349 million. This compares with a loss of - E514 million in 2002. This E863 million improvement was achieved due to: + E1,432 million from the operating income improvement, + E393 million from the tax improvement (mainly a consequence of the simplification sim·pli·fy tr.v. sim·pli·fied, sim·pli·fy·ing, sim·pli·fies To make simple or simpler, as: a. To reduce in complexity or extent. b. To reduce to fundamental parts. c. of SFR's structure i.e., E287 million group share), and was partially offset by: - E48 million from the higher financing expenses, reflecting an increased average cost of the debt (4.8% in 2003 versus 4.1% in 2002) offset by a lower average gross debt (E16.4 billion in 2003 versus E22.1 billion in 2002), - E538 million from higher other financial expenses (mainly due to E228 million of foreign exchange losses in 2003 against E153 million capital gain on Vinci
Vinci may refer to:
2002), - E273 million from higher minority interests (mainly due to the improvement in SFR Cegetel and Maroc Telecom's results), - E103 million from the decrease in equity earnings or sold affiliates (reduced contribution from Veolia Environnement Veolia Environnement SA (Euronext: VIE, NYSE: VE) is a multinational French company with activities in four main areas - water, waste management, energy and transport services. - E459 million - not fully offset by reduced losses in VUNet, international telecom and Canal+). The 2003 adjusted net income (excluding exceptional items and goodwill) includes non recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. items. The positive items are the simplification of SFR's structure (E287 million group share) and the reversal reversal n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its of certain provisions (E649 million). They are largely offset by the negative impact of currency movements (E228 million of foreign exchange losses and E121 million from the effect of currency on the operating income) as well as restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). provisions and various exceptional charges (E510 million). Goodwill and asset impairment The company recorded E1,120 million in goodwill amortization (versus E992 million in 2002) and impairment losses of goodwill and other intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. amounted to E1,792 million (versus E18,442 million in 2002). Essentially due to declining market conditions in 2003, impairment losses were recorded on Universal Music (E1,370 million), VUE Universal Parks & Resorts (E188 million), Canal+ Group international assets (E165 million) and VU Games (E61 million). Financial provisions, exceptional items The company's 2003 earnings are impacted by a number of exceptional items, although to a much lesser extent than in 2002. The exceptional gains on divestitures were E602 million in 2003, compared to E1,125 million in 2002. The 2003 financial provisions (net of realized losses Realized Loss A loss recognized when assets are sold for a price lower than the original purchase price. Notes: A portion of the realized loss may be applied against a capital gain or realized profit to reduce taxes. ) and the charges related to the company's debt restructuring Debt Restructuring A method used by companies with outstanding debt obligations to alter the terms of the debt agreements in order to achieve some advantage. Notes: were limited to E94 million versus E3,567 million in 2002. The company benefited from E1,112 million of exceptional tax credits in 2003, compared to E1,022 million in 2002 of exceptional tax expenses. The most important swing factor was the reversal of a E477 million reserve (established in 2002 for E534 million for a potential contractual liability for tax indemnification Indemnification Used in insurance policy agreements as to compensation for damage or loss. In the context of corporate governance, Director Indemnification uses the bylaws and/or charter to indemnify officers and directors from certain legal expenses and judgements resulting from that would have arisen if Vivendi Universal had been unable to secure the refinancing Refinancing An extension and/or increase in amount of existing debt. of the bridge loan relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the VUE Leveraged Partnership Distribution). (3) The pro forma information illustrates the effect of the acquisition of the entertainment assets of InterActiveCorp. in May 2002 and the disposition of Vivendi Universal Publishing assets sold in 2003, as if these transactions had occurred at the beginning of 2002. It also illustrates the accounting of Veolia Environnement using the equity method at January 1, 2002 instead of December 31, 2002. Net Loss / Loss per share - basic Altogether, the company's net loss amounted to - E1,143 million (- E23,301 million in 2002). Vivendi Universal's 2003 net loss per share - basic amounted to - E1.07 (- E21.43 in 2002). Operating income Whereas Vivendi Universal's pro forma revenues declined by 10% and 3% at constant currency, pro forma 2003 operating income increased by 61% (and +67% at constant currency) to E3,303 million compared with E2,051 million in 2002. This strong operating income pro forma performance was achieved through: + E542 million improvement at Canal+ Group, which recorded E247 million of operating income in 2003 including some provision reversal early in the year , + E510 million from the elimination of the company's cash drains in the non core businesses (VU Net, VTI VTI Väg- och transportforskningsinstitutet VTI Velocity-Time Integral VTI Vietnam Telecom International VTI Vocational Training Institute VTI Virtual Tunnel Interface (Cisco) VTI Vermeer Technologies Incorporated and Vivendi Valorisation The valorization of capital is a concept created by Karl Marx in his critique of political economy. The German original term is "Verwertung" (specifically Kapitalverwertung ), + E470 million from the improved performance at SFR Cegetel Group, + E335 million from lower holding and corporate costs, + E160 million growth at Maroc Telecom, and was offset by: - E486 million decline at UMG UMG Universal Music Group UMG Universidad Mariano Gálvez de Guatemala (Mariano Galvez University of Guatemala) UMG Upgraded Metallurgical Grade (silicon) UMG Unlicensed Medical Graduate , - E264 million decline at VU Games, - E15 million decline at VUE (up 39%, on a stand-alone (jargon) stand-alone - Capable of operating without other programs, libraries, computers, hardware, networks, etc. Exactly what is absent is presumed to be obvious from context. "We only run Windows on stand-alone PCs because it's too dangerous to run it on networked ones." , pro forma, dollar and U.S. GAAP basis) Cash flow generation The consolidated cash flow from operations for the year 2003 was E4.4 billion, up 64% compared to E2.7 billion for the same period last year, on a pro forma basis. Approximately E400 million of the consolidated cash flow from operations came from non recurring asset sales, e.g., real estate asset sales at VUE. Also, the working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. of the 4th quarter 2003 have been reduced well below expectations due to positive timing of certain events and through improved cash management. Proportionate cash flow from operations for the full year was E2.8 billion, 3.7 times the E754 million in 2002, on a pro forma basis. Access to the cash flows from within the businesses has improved significantly, as the VUE ring fence Ring Fence A strategy with which an investor isolates a certain amount of money from any outside risk. Notes: Outside risks can include taxes, market fluctuation, inflation, and other economic factors. The ring fence is mainly used by offshore investors. was eliminated in June June: see month. 2003 and SFR Cegetel Group has started to distribute dividends in 2003 and adopted a quarterly dividend policy starting in 2004. The cash flow is now contributing to the reduction of debt, in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite strong levels of capital expenditures. Investments In 2003, Vivendi Universal invested E6.0 billion, of which E4.4 billion in various acquisitions including E4 billion to acquire 26% of Cegetel and E1.6 billion in capital expenditures. NBC Universal On October 8, 2003, Vivendi Universal and GE announced the signing of a definitive agreement for the combination of NBC and VUE. The new company, to be called NBC Universal, will be 80%-owned by GE, with approximately 20% held by Vivendi Universal. NBC Universal's assets will include: the NBC Television Network, Universal Pictures, television production studios (NBC Studios
NBC Studios and Universal Television), a portfolio of cable networks, the NBC TV stations group, Spanish-language TV broadcaster Telemundo Telemundo is an American television network based in Hialeah, Florida. Launched in San Juan, Puerto Rico by Angel Ramos in 1954, it is the second-largest Spanish-language content producer in the world[1]. and its 15 Telemundo stations and interests in five theme parks. On a pro forma basis, NBC Universal's 2003 revenues would be more than $13 billion and 2003 EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become exceeding $3 billion. As part of the transaction, GE is expected to pay at closing $3.65 billion of cash consideration, of which Vivendi Universal would receive approximately $3.3 billion, subject to adjustment in the event that InterActiveCorp exercises certain rights it has to participate in the VUE-NBC transaction. As a result of the deconsolidation of VUE, Vivendi Universal will also benefit from an approximately $3.2 billion reduction in net debt on a consolidated basis. This reduction comes from $1.7 billion related to VUE's debt and the net effect of the deconsolidation of class B preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. . Beginning in 2006, Vivendi Universal will have the option to begin monetizing its ownership interest in NBC Universal at fair market value. Vivendi Universal will hold three out of 15 seats on the Board of Directors of NBC Universal. The transaction had no impact on Vivendi Universal's 2003 accounts. The completion of the VUE NBC transaction is subject to customary approvals from various regulatory agencies regulatory agency Independent government commission charged by the legislature with setting and enforcing standards for specific industries in the private sector. The concept was invented by the U.S. and the defeasance defeasance n. an antiquated word for a document which terminates the effect of an existing writing such as a deed, bond, or contract if some event occurs. DEFEASANCE, contracts, conveyancing. of the covenants of the class A preferred shares. Vivendi Universal currently anticipates completing the VUE NBC transaction in the second quarter of 2004. Asset divestiture program The divestiture program is on track, with approximately E3 billion in proceeds generated in 2003 (mainly the Consumer Press division, Canal+ Technologies, InterActiveCorp warrants, Telepiu, Hungary's fixed line, Comareg and VUE real estate), and close to E10 billion in proceeds since July July: see month. 2002 (excluding the proposed VUE transaction). Net debt Vivendi Universal has been able to improve its liquidity and debt situation in 2003 due to improved cash flow generation and the success of its divestiture program. The net debt of the company was reduced from E34.9 billion in June 2002 to E12.3 billion at the end of 2002 and E11.6 billion at the end of 2003, even if Vivendi Universal invested E6.0 billion in 2003. The company's Credit Default Swaps Credit Default Swap A swap designed to transfer the credit exposure of fixed income products between parties. Notes: The buyer of a credit swap receives credit protection, whereas the seller of the swap guarantees the credit worthiness of the product. (CDS) have improved very significantly, reflecting the turn around of the company's finances. The 5-year CDS measures the risk associated with debt maturing in 5 years time. This indicator Indicator Anything used to predict future financial or economic trends. Notes: In the context of technical analysis, an indicator is a mathematical calculation based on a securities price and/or volume. The result is used to predict future prices. declined from 485 points at the end of March 2003 to 275 points at the beginning of June. It decreased further to 185 points in the beginning of September September: see month. 2003 and to 110 on December 31, 2003. Since July 2002, Vivendi Universal has restructured and set up E15 billion of debt. During the course of the 2003 financial year, Vivendi Universal was able to obtain new lines of credit allowing it to progressively regain its financial flexibility, to substantially reduce its bank margins, to regain a balance between bank financing and capital market financing and to extend the average maturity of its debt. At the end of January 2004, following the repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan of the E1.7 billion OCEANE which was maturing in early January, the average duration of Vivendi Universal's debt, including the series A and series B preferred stocks Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. issued by VUE, was approximately 6.7 years compared to 4.5 years at the end of 2002. Comments on operating income for Vivendi Universal's Media and Telecom businesses: Media activity (as fully consolidated at 100%) Revenues amounted to E15,725 million in 2003. Operating income was E1,047 million, down 9% on a constant currency and pro forma basis. Media activity has generated E1,920 million of cash flow from operations. Canal+ Group (100% Vivendi Universal economic interest):
In 2003 2002 % %
millions Actual Actual variation variation
of euros excluding
scope
changes
----------------------------------------------------------------------
Revenue 4,158 4,833 -14% +1%
----------------------------------------------------------------------
Operating NA NA
Income 247 (325)
----------------------------------------------------------------------
Significant improvement in Canal+ Group's operating income. In 2003, actual revenues at Canal+ Group declined by 14% (and 12% on a pro forma basis) to E4,158 million resulting from divestitures made in 2003. Excluding all scope changes (primarily Telepiu), Canal+ Group revenues were up 1% versus prior year. Canal+ Group ended 2003 with the operating income of E247 million compared to an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of E325 million in 2002. Recurring operating income amounted to E99 million. This represented a like-for-like increase of approximately E200 million over 2002. The difference with the actual operating income is explained by non-recurring items, principally a provision reversal impacting Telepiu's operating income for E129 million - this provision on a deal with a channel was reversed when Telepiu reached a high enough number of subscribers to make the contract profitable - and a slightly positive balance between other provision's allowances and reversals. Revenues from the French pay-TV pay-TV n. A system for receiving television broadcasts by making subscription payments, as by renting a device that unscrambles the broadcaster's scrambled signal. Also called pay television. operations, Canal+ Group's core business, increased 6% to E2,813 million. Canal+ Group ended 2003 with nearly 8.1 million subscriptions to its Canal+ pay-TV offerings in France, representing a net growth of approximately 135,000 subscriptions for the year. With 4.9 million subscriptions at December 31, the Canal+ premium channel significantly limited the forecast decline in its subscriber subscriber, n the person, usually the employee, who represents the family unit in relation to the prepayment plan. Other family members are dependents. Also called certificate holders or enrollees. base to a net of approximately 110,000, primarily due to the sustained level of commitments of new subscribers whose number rose 10% during the year. CanalSatellite continued to grow, ending the year with 2.8 million subscriptions, for a net annual increase of approximately 230,000 subscriptions. Pay-TV's operating income doubled from the previous year at E128 million. All of the operations (premium channel, theme channels, satellite and cable packages and operations in the French overseas departments and territories) contributed to the increase. The good operating performances were achieved through revenue growth, restructuring efforts and cost savings. StudioCanal revenues were down 23% to E351 million, in line with the company's strategy to be more selective on its movie investments. StudioCanal's "Les Nuls l'Integrule" ranked number one among France's best-selling best·sell·er also best seller n. A product, such as a book, that is among those sold in the largest numbers. best videos and DVDs during the holiday season, with nearly one million copies sold, an unprecedented achievement for a comedy DVD DVD: see digital versatile disc. DVD in full digital video disc or digital versatile disc Type of optical disc. The DVD represents the second generation of compact-disc (CD) technology. in France. Despite the revenue decline, StudioCanal operating income was positive at E26 million (compared to a E95 million operating loss in 2002) due to the benefits of the company's restructuring, the introduction of a new editorial policy and the decision to discontinue dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. movie production. Universal Music Group (92% Vivendi Universal economic interest):
%
variation
pro forma
In 2003 2002 % at
millions Actual Actual variation constant
of euros currency
----------------------------------------------------------------------
Revenue 4,974 6,276 -21% -12%
----------------------------------------------------------------------
Operating
Income 70 556 -87% -90%
----------------------------------------------------------------------
UMG operating income impacted by a weak market, restructure costs and legal charges UMG's revenues of E4,974 million were 21% below 2002 due to adverse currency movements, weakness in the global music market and a lower number of releases from global superstars This article is about the televised sports competition. For other uses, see Superstar. Superstars is an all-around sports competition that pits elite athletes from different sports against one another in a series of athletic challenges resembling a decathlon. . Revenues declined 12% in constant currency with growth in Japan and the U.K. more than offset by declines in the U.S., Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). , and France. Best sellers included 50 Cent CENT, money. A copper coin of the United States of the value of ten mills; ten of them are equal to a dime, and one hundred, to one dollar. Each cent is required to contain one hundred and sixty-eight grains. Act of January 18th, 1837, 4 Sharsw. cont. of Story',s L. U. S. 2524. , which was the number one best seller of the year in the U.S. and strong carryover carryover n. in taxation accounting, using a tax year's deductions, business losses or credits to apply to the following year's tax return to reduce the tax liability. (See: carryback) sales from 2002 releases by t.A.T.u. and Eminem. Other major sellers were from Sheryl Sheryl is a female given name and may refer to: In Business
 The introduction of this article is too short.To comply with Wikipedia's lead section guidelines, it should be expanded. , The Black Eyed Peas This article is about the American hip hop group. For the vegetable, see Black-eyed pea. The Black Eyed Peas are an American hip hop group from Los Angeles, California, who have enjoyed worldwide pop success. The group is currently composed of will.i.am, apl.de. with very strong sales outside of North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Sting and Busted bust·ed adj. 1. Slang a. Smashed or broken: busted glass; a busted rib. b. Out of order; inoperable: a busted vending machine. 2. , who had two albums in the year selling over 1 million units. UMG estimates that its worldwide market share declined slightly from the record level of 24.3% attained at·tain v. at·tained, at·tain·ing, at·tains v.tr. 1. To gain as an objective; achieve: attain a diploma by hard work. 2. in 2002 but remains higher than 2001 and prior years. In 2003, operating income at UMG declined 87% to E70 million. This decline reflected the margin impact of the decline in revenue and a higher proportion of lower margin activity partially offset by lower marketing and catalog catalog, descriptive list, on cards or in a book, of the contents of a library. Assurbanipal's library at Nineveh was cataloged on shelves of slate. The first known subject catalog was compiled by Callimachus at the Alexandrian Library in the 3d cent. B.C. amortization expenses. Operating income also reflected the costs incurred as a result of a restructuring program commenced in mid- mid- pref. Middle: midbrain. 2003 and a charge relating to the cash deposit made with the United States District Court United States District Court In the U.S., any of the 94 trial courts of general jurisdiction in the federal judicial system. Each state, as well as the District of Columbia and the Commonwealth of Puerto Rico, has at least one federal district court. in connection with the Company's appeal of an unfavourable decision after trial in a lawsuit lawsuit: see procedure; tort. brought by TVT Records TVT Records is an independent record label founded in 1985 by Steve Gottlieb. Artists
transmissible venereal tumor. Music, Inc. Cash flow from operations was down 11% versus last year despite the sharp drop in operating income and the TVT matter, primarily due to a reduction in other working capital requirements, lower artist and repertoire Repertoire may mean Repertory but may also refer to:
The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. will not be reduced to cash until 2004. In a difficult and evolving environment, UMG is pursuing a multi-pronged approach to restore its profitability and revenue growth. These include continuation continuation - continuation passing style of the cost-cutting initiatives begun last year, the active support of legitimate on line services and other efforts to combat piracy piracy, robbery committed or attempted on the high seas. It is distinguished from privateering in that the pirate holds no commission from and receives the protection of no nation but usually attacks vessels of all nations. , and further adjustment to the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. pricing policy. Vivendi Universal Games (99% Vivendi Universal economic interest):
%
variation
at
In millions 2003 2002 % constant
of euros Actual Actual variation currency
----------------------------------------------------------------------
Revenue 571 794 -28% -16%
----------------------------------------------------------------------
Operating NA NA
Income (201) 63
----------------------------------------------------------------------
Vivendi Universal Games performance suffered a decline. Vivendi Universal Games revenues, comprised of a balanced mix of original content (45%), licensed properties (40%) and third-party releases (15%), decreased to E571 million for the year, 28% below prior year. On a constant currency basis, revenues were down by 16%. Operating loss amounted to E201 million compared to operating income of E63 million in 2002 mainly reflecting lower gross margins on declining revenues and the write off of R&D expenses (E54 million). A weaker release schedule compare to the prior year compounded by slippage Slippage The difference between estimated transaction costs and the amount actually paid. Notes: Slippage is usually attributed to a change in the spread. See also: Spread, Transaction Costs Slippage resulted in lower revenues, higher returns, price protection, and product and advance write-offs. A new management team has been put in place to stabilize stabilize See peg. the company and turn it around. 2004 will be a transition year for the company, with the most important titles being released late in the year. The company is focused on significantly enhancing the product portfolio by building off a strong intellectual property base (IP) and alliances, developing new IP for console (1) The physical control panel on a computer or electronic device. (2) A terminal or desktop computer used to monitor and control a network. (3) Any display terminal. , expanding into the on-line space and strengthening its market leading PC franchise. Vivendi Universal Entertainment (86% Vivendi Universal economic interest):
%
variation
In millions pro forma
of euros at
In French 2003 2002 % constant
G.A.A.P. Actual Actual variation currency
----------------------------------------------------------------------
Revenue 6,022 6,270 - 4% +4%
----------------------------------------------------------------------
Operating
Income 931 816 +14% +19%
----------------------------------------------------------------------
In millions of
dollars 2003 2002 % variation
In U.S. G.A.A.P. Actual Pro Forma(7)
----------------------------------------------------------------------
Revenue 6,622 5,960 +11%
----------------------------------------------------------------------
Operating
Income 1,008 723 +39%
----------------------------------------------------------------------
On a comparable basis (stand alone, pro forma, in dollars and in U.S. G.A.A.P.), VUE's operating income increased 39%. VUE revenues amounted to E6,022 million, down 4%. On a pro forma(7) and constant currency basis, VUE revenues were up 4% and up 10% excluding Spencer Spencer, city (1990 pop. 11,066), seat of Clay co., NW Iowa, on the Little Sioux River; inc. 1880. The city lies in a fertile farm area. Beef is processed, and Spencer's manufactures include work clothes, machinery, prefabricated buildings, and metal products. Gifts sold in May 2003. On a comparable basis (stand alone, pro forma, in US GAAP and in dollars), VUE revenues increased by $662 million or 11%. Operating income was up 14% to E931 million and up 19% on a pro forma and constant currency basis. On a comparable basis (stand alone, pro forma basis, in US GAAP and in dollars), VUE operating income increased $285 million or 39%. Strong performance at Universal Pictures as well as at Universal Television Production and Distribution were key drivers of the improved results. Universal Pictures Group operating income increased 47% versus prior year primarily due to the strength of the current year film slate. Significant drivers included strong theatrical and video performances from Bruce Bruce, Scottish royal family descended from an 11th-century Norman duke, Robert de Brus. He aided William I in his conquest of England (1066) and was given lands in England. Almighty, 2 Fast 2 Furious, Seabiscuit Seabiscuit famous horse in history of thoroughbred racing. [Am. Hist.: NCE, 1273] See : Horse and theatrical results from American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Wedding. 2003 also included strong video performances from 8-Mile, Bourne Bourne, town (1990 pop. 16,064), Barnstable co., SE Mass., crossed by Cape Cod Canal; settled 1627, inc. 1884. Bourne Bridge (1935), across the canal, made the town an entry point to Cape Cod and a resort and commercial center. Identity and Scarface. Operating income increased 8% at Universal Television Group. Operating income at Universal Television Production and Distribution was up 40%, driven by the continued success of the Law & Order franchise as well as higher margins on sales of library products. Operating income at Universal Television Networks was flat versus prior year as increases in advertising sales and affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. fees were offset by investment in acquired and original programming, which is expected to drive future profits. Universal Parks & Resorts and Other operating income increased 18% over the prior period. Operating income increased 20% at Universal Parks & Resorts, which included a benefit from the 2003 sale of hotel properties located at Universal City. Operating income at Universal Studios Networks, a group of international cable channels, improved by 183%, due to higher affiliate fees and subscribers combined with reduced overhead costs overhead costs see fixed costs. . Telecom activity (as fully consolidated at 100%) Revenues amounted to E9,045 million in 2003. Operating income was E2,547 million, up 34% on a constant currency and pro forma basis. Telecom activity has generated E2,749 million of cash flow from operations. SFR Cegetel (approximately 56% Vivendi Universal economic interest): In millions of 2003 Actual 2002 Actual % variation euros ---------------------------------------------------------------------- Revenue 7,574 7,067 +7% ---------------------------------------------------------------------- Operating Income 1,919 1,449 +32% ---------------------------------------------------------------------- (7) Pro forma basis as if interActiveCorp entertainment assets had been consolidated from January 1, 2002, and the results of Universal Studios' international television networks had been reported by VUE instead of Canal Plus Group (8) Annual rolling ARPU (Average Revenue Per User) A calculation often used to determine the overall value of an application. It is also used to rate particular customers, especially in the wireless space, by comparing someone's account to the overall average. : annual rolling average revenue per user defined as annual rolling mobile (SFR+SRR SRR Short-Range Radar SRR System Requirements Review SRR Shaped Round Robin (queuing protocol for Cisco routers) SRR Special Reconnaissance Regiment (British Army) SRR Split Ring Resonator ) revenues excluding roaming-in and excluding equipment sales, net of promotions on yearly average ART (Autorite de Regulation des Telecommunications) total subscriber base. SFR Cegetel's operating income grew 32% to E1,919 million, due to good marketing performance and efficient cost management. SFR Cegetel Group reported an excellent performance in 2003 with consolidated revenue growth of 7% to E7,574 million. Operating income increased by 32% to E1,919 million compared to E1,449 million in 2002 mainly reflecting efficient cost management. Mobile telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. revenues increased 10% to E6,733 million, driven by significant growth in the customer base and a strong annual rolling ARPU(8). SFR increased its market share on the French mobile market to 35.3% against 35.1% at the end of December 2002. In 2003 and for the first time ever, SFR (including SRR) became the market leader in net adds with a 38% market share, taking its registered customer base to 14.7 million, a 9% increase against 2002. This good performance was primarily achieved due to strong market share on postpaid post·paid adj. With the postage having been paid in advance. postpaid Adverb, adj with the postage prepaid Adj. 1. net adds (43%). Furthermore, SFR is actively focused on increasing loyalty of postpaid customers resulting in a 7.1 points churn rate (1) The percentage of customers who cancel their online, cellphone or other subscription service during a certain time period. (2) The percentage of employees who leave the company during a certain time period. See churning. decline to reach 13.4% in 2003. Annual rolling ARPU grew 1.7% to E431, despite the fixed incoming Incoming is a 3-D shooter developed by Rage Software and published by Interplay. The PC version was released in late 1998, and the Dreamcast version, a launch title for the console, was released in 1998 in Japan and in 1999 in the rest of the world. call price decrease of 15% on January 1, 2003. This favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. ARPU trend is explained by an improved customer mix and increased usage: postpaid customer base grew 18% (compared to a 14% market growth), improving the customer mix to 57.7% against 53% at the end of December 2002. Overall voice usage increased 7% year over year to 256 minutes per average customer per month. In addition, the number of multimedia customers more than doubled to more than 2.3 million at the end of December 2003. The growing adoption of multimedia mobile services by SFR customers is confirmed with approximately 330,000 customers (as of December 31, 2003) to the new multimedia service portal Vodafone live! launched in October 2003 (and approximately 410,000 customers at the end of January 2004), 3.3 billion text messages (SMS (1) (Storage Management System) Software used to routinely back up and archive files. See HSM. (2) (Systems Management Server) Systems management software from Microsoft that runs on Windows NT Server. ) and 6 million multimedia messages (MMS (Multimedia Messaging Service) An enhanced transmission service that enables graphics, video clips and sound files to be transmitted via cellphones. Developed as part of the 3GPP project, MMS phones are generally backward compatible with SMS and EMS. ) sent in 2003. Growth in the customer base, strong annual rolling ARPU, declining customer acquisition costs per gross addition resulting from efficient cost management and a strong reduction in bad debt increased operating income by 26% to E1,949 million. Fixed telephony revenues declined 9% to E841 million mainly explained by the unfavorable impact of year end 2002 voice price decreases and an unfavorable traffic mix. Operating losses decreased by 71% to E30 million mainly due to the improvement of cost management and favorable non-recurring events that more than offset revenue decline. Pro forma of the TD-Cegetel merger, fixed telephony activity, recorded a slightly positive operating income. Maroc Telecom (35% Vivendi Universal economic interest):
%
variation
at
2003 2002 % constant
In millions of euros Actual Actual variation currency
----------------------------------------------------------------------
Revenue 1,471 1,487 -1% +3%
----------------------------------------------------------------------
Operating Income 628 468 +34% +40%
----------------------------------------------------------------------
Maroc Telecom operating income experienced a strong 40% growth to E 628 million, at constant currency, due to the efficient control of costs. For the full year 2003, Maroc Telecom's revenues amounted to E1,471 million, up 3% at constant currency when compared with the year 2002. Mobile revenues, representing 46% of 2003 total revenues, were up 8.5% when compared to 2002, thanks to a larger customer base. Mobile customers at year end increased 13% by 617,000 to 5,214,000. Fixed-line Refers to wired devices. For example, a fixed-line phone is a standard phone with the handset wired to the base unit in contrast to a portable phone or cellphone. revenues were stable, the increase of incoming mobile calls and internet being balanced by lower national voice traffic and the loss of Meditel's (the mobile competitor) international traffic. Reversing the trend of the previous years, Maroc Telecom's fixed-line customer base increased by 92,000 to reach 1,219,000 customers. Operating income was up 34% (40% at constant currency) to E628 million mainly driven by strong operational improvement, cost management, impact of 2002 restructuring, lower bad debt, lower mobile acquisition costs and a reduction in selling, general and administrative expenses. Forward looking Statements: This annual report includes "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of Section 27A of the Securities Act of 1933, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, or Exchange Act. Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to divestitures, acquisitions, working capital and capital requirements, available liquidity, maturity of debt obligations, business trends and other information that is not historical information. Forward-looking statements can be identified by context. For example, when we use words such as "estimate(s)," "aim(s)," "expect(s)," "feel(s)," "will," "may," "believe(s)," "anticipate(s)" and similar expressions in this document, we are intending to identify those statements as forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. . All forward-looking statements, including, without limitation, the launching or prospective development of new business initiatives and products, anticipated music or motion picture releases, Internet or theme park projects, and anticipated cost savings from asset disposals and synergies are based upon our current expectations and various assumptions. Our expectations, beliefs, assumptions and projections are expressed in good faith, and we believe there is a reasonable basis for them. There can be no assurance, however, that managements' expectations, beliefs and projections will be achieved. There are a number of risks and uncertainties that could cause our actual results to differ materially from our forward-looking statements. These include, among others: satisfaction of the conditions specified spec·i·fy tr.v. spec·i·fied, spec·i·fy·ing, spec·i·fies 1. To state explicitly or in detail: specified the amount needed. 2. To include in a specification. 3. in the transaction agreements related to the planned combination of VUE and NBC, including, without limitation, the receipt of required governmental and other third-party approvals of the transaction; changes in the stock market and interest rate environment that affect revenues; general economic and business conditions, particularly a general economic downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. ; industry trends; the availability and terms of financing; the terms and conditions of asset disposals and the timing thereof; changes in ownership structure; competition; changes in business strategy or development plans; challenges to, or losses or infringements of intellectual property rights; customer preference; technological advancements; political conditions; foreign currency exchange rate fluctuations; legal and regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. and the outcome of legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. and pending investigations; environmental liabilities; natural disasters; and war or acts of terrorism terrorism, the threat or use of violence, often against the civilian population, to achieve political or social ends, to intimidate opponents, or to publicize grievances. . The foregoing list is not exhaustive and there are other factors that may cause actual results to differ materially from the forward-looking statements. We urge you to review and consider carefully the various disclosures we make concerning the factors that may affect our business. All forward-looking statements attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to us or persons acting on our behalf apply only as of the date of this document and are expressly qualified in their entirety The whole, in contradistinction to a moiety or part only. When land is conveyed to Husband and Wife, they do not take by moieties, but both are seised of the entirety. by the cautionary statements. We undertake no obligation to publish revised forward-looking statements to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date of this document or to reflect the occurrence of unanticipated events. Press Conference
Speakers: Mr. Jean-Rene Fourtou, Mr. Jean-Bernard Levy and Mr. Jacques
Espinasse
Date: Wednesday March 17, 2004.
10:30 AM Paris time
9:30 AM London time
4:30 AM New York EST
At Vivendi Universal's headquarters in Paris. 42, avenue de Friedland.
75008 Paris.
Webcast details:
The meeting/call will also be webcast at
http://www.vivendiuniversal.com
Analyst Conference Call
Speakers: Mr. Jean- Rene Fourtou, Mr. Jean-Bernard Levy and Mr.
Jacques Espinasse
Date: Wednesday March 17, 2004.
2:30 PM Paris time
1:30 PM London time
8:30 AM New York EST
Media invited on a listen only basis.
Conference Call details:
France: +33 (0)1 70 70 81 78 Or +353 (0)1 247 5109
- Access code: 651177
UK: +44 (0)207 784 1004 -Access code: 337233
US toll free: +1 866 850 2201
US: +1 718 354 1152 - Access code: 337233
Webcast details:
The meeting/call will also be webcast at:
http://finance.vivendiuniversal.com
VIVENDI UNIVERSAL
CONSOLIDATED STATEMENT OF INCOME
(French GAAP, unaudited)
Quarter ended December 31, Year ended December 31,
-------------------------- (Euro, in ------------------------
2003 2002 Millions 2003 2002 2002
As As except per As With VE As
published published share published accounted published
(a) (a) amounts) (a) for using (a)
the equity
method
----------- ---------- ------------ ------- ---------- ---------
EUR 7,215 EUR 15,969 Revenues EUR 25,482 EUR 28,112 EUR 58,150
Operating
EUR 736 EUR 588 income EUR 3,309 EUR 1,877 EUR 3,788
Financing
EUR (167) EUR (357) expense (698) (650) (1,333)
Other
Financial
expenses,
net of
(124) 321 provisions (509) (3,444) (3,409)
---------- ---------- ------------- -------- ---------- ----------
Financing and
other
expenses,
EUR (291) EUR (36) net EUR(1,207) EUR(4,094) EUR(4,742)
---------- ---------- ------------- -------- ---------- ----------
Income (loss)
before gain
(loss) on
businesses
sold, net of
provision,
income taxes,
equity interest,
goodwill
amortization
and minority
EUR 445 EUR 552 interests EUR 2,102 EUR(2,217) EUR (954)
Gain on business
sold, net of
121 (334) provisions 602 1,125 1,049
Income tax
1,253 (1,762) expense 408 (2,119) (2,556)
---------- ----------- --------------- ------ ---------- ----------
Income (loss)
before equity
interest,
goodwill
amortization
and minority
EUR 1,819 EUR(1,544) interest EUR 3,112 EUR(3,211) EUR(2,461)
Equity in
earning of sold
1 (16) subsidiaries(a) 1 17 17
Equity in (losses)
earnings of
unconsolidated
112 25 companies 71 (99) (294)
Equity loss in
Veolia
Environnement
(13) - impairment (b) (203) - -
Goodwill
(495) (365) amortization (1,120) (992) (1,277)
Impairment
(1,631) (7,442) losses (1,792) (18,442) (18,442)
---------- ---------- -------------- ------- ---------- ----------
Income (loss)
before
minority
EUR (207) EUR (9,341) interests EUR 69 EUR(22,727)EUR(22,457)
Minority
(435) (420) Interest (1,212) (574) (844)
--------- ---------- -------------- ------- ---------- ----------
EUR (642) EUR (9,761) Net loss EUR(1,143)EUR(23,301)EUR(23,301)
========= =========== ============== ======= ========== ==========
Loss per
share -
EUR(0.60) EUR (8.98) basic EUR (1.07) EUR(21.43) EUR(21.43)
========= =========== ============== ======= ========== ==========
Weighted
average
common
shares
outstanding
(in
1,072.7 1,086.4 millions)(c) 1,071.7 1,087.4 1,087.4
(a) In 2002 and 2003, Vivendi Universal applied the option proposed in
paragraph 23100 of the French rules 99-02 and presented the equity
in (losses) earnings of businesses that were sold during the year
on one line in the consolidated statement of income as "equity in
(losses) earnings of sold subsidiaries". In 2002 sold subsidiaries
included all of the Vivendi Universal Publishing activities
excluding: Vivendi Universal Games, publishing activities in
Brazil and the Consumer Press Division and Comareg. In 2003 sold
subsidiaries included the Consumer Press Division, which was sold
in early February 2003.
(b) The impairment loss of E203 million corresponds to Vivendi
Universal's 20.4% interest in Veolia Environnement's impairment of
goodwill and other intangible assets (i.e., E453 million), after a
notional impairment of goodwill initially recorded as a reduction
of shareholder's equity of E250 million, as prescribed by French
GAAP.
(c) Excluding treasury shares recorded as a reduction of shareholders'
equity (that is 4,360 shares as at December 31, 2003). The
weighted average common shares outstanding including the potential
dilution effect of outstanding convertible bonds and stock options
represented approximately 1,209.6 million common shares as at
December 31, 2003. The financial instruments with potential
dilution effect that were in the money as of December 31, 2003
represented approximately 96.2 million common shares out of 137.9
million common shares to be potentially issued.
VIVENDI UNIVERSAL
REVENUES AND OPERATING INCOME BY BUSINESS SEGMENT
(French GAAP, unaudited)
AS PUBLISHED
Quarter Ended Year Ended
December 31, December 31,
(Euros, % %
in millions) 2003 2002 Change 2003 2002 Change
------------------------------------------------------
Revenues
Canal+ Group EUR 974 EUR 1,322 -26% EUR 4,158 EUR 4,833 -14%
Universal
Music Group 1,691 2,075 -19% 4,974 6,276 -21%
Vivendi Universal
Games (a) 254 292 -13% 571 794 -28%
Vivendi Universal
Entertainment 1,755 1,828 -4% 6,022 6,270 -4%
------------------------------------------------------
Media EUR 4,674 EUR 5,517 -15% EUR 15,725 EUR 18,173 -13%
SFR Cegetel
Group 2,021 1,821 11% 7,574 7,067 7%
Maroc Telecom 370 372 ns* 1,471 1,487 -1%
------------------------------------------------------
Telecom EUR 2,391 EUR 2,193 9% EUR 9,045 EUR 8,554 6%
Others(b) 150 201 -25% 584 813 -28%
------------------------------------------------------
Total Vivendi
Universal
(Excluding VE and
VUP assets sold
in 2003) EUR 7,215 EUR 7,911 -9% EUR 25,354 EUR 27,540 -8%
========================================================
VUP assets sold
in 2003(c) - 155 na** 128 572 -78%
--------------------------------------------------------
Total Vivendi
Universal
(Excluding VE)EUR 7,215 EUR 8,066 -11% EUR 25,482 EUR 28,112 -9%
========================================================
Veolia
Environnement - 7,903 na - 30,038 na
--------------------------------------------------------
Total Vivendi
Universal EUR 7,215 EUR 15,969 -55% EUR 25,482 EUR 58,150 -56%
========================================================
Operating Income (Loss)
Canal+ Group EUR (131) EUR (296) na EUR 247 EUR 345 na
Universal Music
Group 108 371 -71% 70 556 -87%
Vivendi Universal
Games(a) (91) 26 na (201) 63 na
Vivendi Universal
Entertainment 239 91 163% 931 816 14%
-------------------------------------------------------
Media EUR 125 EUR 192 -35% EUR 1,047 EUR 1,110 -6%
SFR Cegetel
Group 404 243 66% 1,919 1,449 32%
Maroc Telecom 171 153 12% 628 468 34%
-------------------------------------------------------
Telecom EUR 575 EUR 396 -45% EUR 2,547 EUR 1,917 33%
Holding &
Corporate (117) (411) na (330) (665) na
Others(b) 153 (130) na 39 (471) na
-------------------------------------------------------
Total Vivendi
Universal
(Excluding VE and
VUP assets sold
in 2003) EUR 736 EUR 47 na EUR 3,303 EUR 1,891 75%
======================================================
VUP assets sold
in 2003(c) - (2) na 6 (14) na
------------------------------------------------------
Total Vivendi
Universal
(Excluding VE)EUR 736 EUR 45 na EUR 3,309 EUR 1,877 76%
======================================================
Veolia
Environnement - 543 na - 1,911 na
------------------------------------------------------
Total Vivendi
Universal EUR 736 EUR 588 25% EUR 3,309 EUR 3,788 -13%
======================================================
(a) Vivendi Universal Games was formerly part of Vivendi Universal
Publishing (VUP) (includes Kids Activities, e.g., Adi/Adibou in
France and JumpStart in the US).
(b) Others correspond to Vivendi Telecom International, Internet,
Vivendi Valorisation, Vivendi Universal Publishing (VUP) assets
not sold during 2002 and 2003 (Atica & Scipione: publishing
activities in Brazil) and the elimination of intercompany
transactions.
(c) VUP assets sold in 2003 correspond to the Consumer Press Division
sold in February 2003, which was deconsolidated as of January 1,
2003 and Comareg sold in May 2003.
*: not significant
**: not applicable
VIVENDI UNIVERSAL
PRO FORMA REVENUES AND OPERATING INCOME BY BUSINESS SEGMENT
(French GAAP, unaudited)
PRO FORMA (*)
--------------------------------------------
Quarter Ended December 31,
--------------------------------------------
% Change
at constant
(Euros, in millions) 2003 2002 % Change rate
-------- ----------- ----------- -----------
Revenues
--------
Canal+ Group EUR 974 EUR 1,300 -25% -25%
Universal Music Group 1,691 2,075 -19% -11%
Vivendi Universal Games 254 292 -13% -1%
Vivendi Universal
Entertainment 1,755 1,838 -5% 14%
-------- ----------- ----------- -----------
Media EUR 4,674 EUR 5,505 -15% -5%
SFR Cegetel Group 2,021 1,821 11% 11%
Maroc Telecom 370 372 ns(**) 3%
-------- ----------- ----------- -----------
Telecom EUR 2,391 EUR 2,193 9% 10%
Others 150 201 -25% -20%
-------- ----------- ----------- -----------
Total Vivendi
Universal EUR 7,215 EUR 7,899 -9% -2%
======== =========== =========== ===========
Operating income (loss)
-----------------------
Canal+ Group EUR (131) EUR (275) na(***) na
Universal Music Group 108 371 -71% -74%
Vivendi Universal Games (91) 26 na na
Vivendi Universal
Entertainment 239 62 na 77%
---------- ----------- ----------- -----------
Media EUR 125 EUR 184 -32% na
SFR Cegetel Group 404 243 66% 66%
Maroc Telecom 171 153 12% 16%
---------- ----------- ----------- -----------
Telecom EUR 575 EUR 396 45% 47%
Holding & corporate (117) (411) na na
Others 153 (130) na na
---------- ----------- ----------- -----------
Total Vivendi
Universal EUR 736 EUR 39 na na
========== =========== =========== ===========
PRO FORMA (*)
--------------------------------------------
Year Ended December 31,
--------------------------------------------
% Change
at constant
(Euros, in millions) 2003 2002 % Change rate
-------- ----------- ----------- -----------
Revenues
--------
Canal+ Group EUR 4,158 EUR 4,742 -12% -12%
Universal Music Group 4,974 6,276 -21% -12%
Vivendi Universal Games 571 794 -28% -16%
Vivendi Universal
Entertainment 6,022 6,978 -14% 4%
---------- ----------- ----------- -----------
Media EUR 15,725 EUR 18,790 -16% -6%
SFR Cegetel Group 7,574 7,067 7% 7%
Maroc Telecom 1,471 1,487 -1% 3%
---------- ----------- ----------- -----------
Telecom EUR 9,045 EUR 8,554 6% 6%
Others 584 813 -28% -22%
---------- ----------- ----------- -----------
Total Vivendi
Universal EUR 25,354 EUR 28,157 -10% -3%
========== =========== =========== ===========
Operating income (loss)
-----------------------
Canal+ Group EUR 247 EUR (295) na na
Universal Music Group 70 556 -87% -90%
Vivendi Universal Games (201) 63 na na
Vivendi Universal
Entertainment 931 946 -2% 19%
---------- ----------- ----------- -----------
Media EUR 1,047 EUR 1,270 -18% -9%
SFR Cegetel Group 1,919 1,449 32% 32%
Maroc Telecom 628 468 34% 40%
---------- ----------- ----------- -----------
Telecom EUR 2,547 EUR 1,917 33% 34%
Holding & corporate (330) (665) 50% 47%
Others 39 (471) na na
---------- ----------- ----------- -----------
Total Vivendi
Universal EUR 3,303 EUR 2,051 61% 67%
========== =========== =========== ===========
* The pro forma information illustrates the effect of the acquisition
of the entertainment assets of InterActiveCorp and the disposition
of VUP assets in 2003, as if these transactions had occurred at
the beginning of 2002. It also illustrates the accounting for
Veolia Environnement for using the equity method with a 20.4%
ownership interest from January 1, 2002 instead of December 31,
2002. The pro forma information is calculated as a simple sum of
the actual results of Vivendi Universal's businesses (excluding
businesses sold) and the actual results reported by each of the
acquired businesses in each period presented. Additionally, the
results of Universal Studios international television networks are
reported by Vivendi Universal Entertainment instead of Canal+
Group. This reclassification has no impact on the total results of
Vivendi Universal. The pro forma results are not necessarily
indicative of the combined results that would have occurred had
the transactions actually occurred at the beginning of 2002.
**: not significant
***: not applicable
VIVENDI UNIVERSAL
RECONCILIATION OF NET LOSS TO ADJUSTED NET INCOME (LOSS)
(French GAAP, unaudited)
(Euros, in millions) Year ended December 31
-----------------------------
2003 2002 Change
as With VE
Published accounted
for using
the equity
method
--------- ---------- ---------
Net loss (a) EUR (1,143) EUR(23,301)EUR + 22,158
Adjustments to determine
adjusted net income (loss)
Financial provisions and
amortization of financial
charges (b) (563) 2,786 - 3,349
Realized losses reported
in other financial
expenses, net of
financial
provisions
taken previously (b) 503 (1) + 504
Other non-operating,
non-recurring items
reported in other
financial expenses,
net of provisions (b) 154 782 - 628
------------ ---------- ----------
Subtotal impact on financing
and other expenses, net
(see note below) (b) EUR 94 EUR 3,567 - 3,473
Adjustments on Veolia
Environnement reported
as for using the equity
method (c) 203 256 - 53
Gain on business sold, net
of provisions (d) (602) (1,125) + 523
Goodwill amortization (a) 1,120 992 + 128
Impairment losses (a) 1,792 18,442 - 16,650
Income tax expense (e) (1,112) 1,022 - 2,134
Minority interests
on adjustments (3) (367) + 364
------------- ---------- ----------
Adjusted net income (loss) EUR 349 EUR (514) + 863
============= ========== ==========
Note:
(a) As reported in the consolidated statement of income.
(b) Details on 2003 impact on financing and other expenses, net:
------------------------------------------------
(Euros, in millions) Financial Realized Other non- Total
provisions losses operating,
and non-
amortization recurring
of financial items
charges
------------- ----------- ---------- ---------
InterActiveCorp
warrants 454 (329) - 125
Veolia Environnement
and BSkyB redemption
premiums 102 (102) - -
Amortization of deferred
charges related to bonds
issuances, facilities and
others (193) - - (193)
Fees related to the
implementation of the
refinancing plan - - (50) (50)
Settlement of put options
on treasury shares 104 - (104) -
Loss on sale of Vinci call
options 13 (39) - (26)
Other 83 (33) - 50
---------- ------------ ---------- ----------
Total EUR 563 EUR (503) EUR(154) EUR (94)
=========== ============ ========== ==========
(c) In 2003, corresponds only to equity loss in Veolia Environnement
impairment.
(d) As reported in the consolidated statement of income. In 2003, this
item consisted mainly of capital gains on the divestiture of
and/or dilution of our interest in the following companies:
Telepiu (E215 million), Consumer Press Division (E104 million),
Sogecable (E71 million), UGC (E-47 million), Comareg (E42 million)
and other various items (E217 million).
(e) Income tax (expense) corresponds to a reversal of a reserve of
E477 million (established in 2002 for E534 million for a potential
contractual liability for tax indemnification that would have
arisen in 2002 if Vivendi Universal had been unable to secure
refinancing for the bridge loan relating to the Vivendi Universal
Entertainment Leveraged Partnership Distribution), and other
provision reversals resulting from the conclusion of tax audit for
prior taxable period and income tax (expense) benefit on
adjustments.
VIVENDI UNIVERSAL
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(French GAAP, unaudited)
---------------------
December 31,
---------------------
(Euros, in millions) 2003 2002
ASSETS ---------- ----------
Goodwill, net EUR 17,789 EUR 20,062
Other intangible assets, net 11,778 14,706
Fixed assets and investments 10,997 13,727
---------- ----------
Total long-term assets EUR 40,564 EUR 48,495
---------- ----------
Other current assets 11,498 13,543
Cash and cash equivalents 2,858 7,295
---------- ----------
Total current assets EUR 14,356 EUR 20,838
---------- ----------
TOTAL ASSETS EUR 54,920 EUR 69,333
========== ==========
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity EUR 11,923 EUR 14,020
Minority interests 4,929 5,497
Other equity 1,000 1,000
Other non-current liabilities 5,261 8,054
Gross debt 14,423 19,632
Deferred tax liabilities 5,123 7,857
Other current liabilities 12,261 13,273
----------- ----------
TOTAL SHAREHOLDERS' EQUITY AND
LIABILITIES EUR 54,920 EUR 69,333
=========== ==========
NET DEBT
----------------------------------
December 31,
----------------------------------
(Euros, in millions) 2003 2002 Change
----------- ---------- ------------
Gross debt EUR 14,423 EUR 19,632 - 5,209
Cash and cash
equivalents (2,858) (7,295) + 4,437
----------- ---------- ------------
Net Debt EUR 11,565 EUR 12,337 - 772
=========== ========== ============
NET DEBT MATURITY
------------------------------------------------------------
December 31, 2003
------------------------------------------------------------
TOTAL Due before Due Due between Due after
one year between two and five five years
one and two years
(Euros, years
in millions)
------------- ----------- ----------- ------------ ---------
Gross debt EUR 14,423 EUR 4,802 EUR 473 EUR 5,800 EUR 3,348
Cash and Cash
Equivalents (2,858) (2,858) - - -
------------- ----------- ----------- ------------ ---------
Net Debt EUR 11,565 EUR 1,944(*)EUR 473 EUR 5,800 EUR 3,348
============= =========== =========== ============ =========
* Of which E1,699 million Oceane was effectively repaid in January 2,
2004.
VIVENDI UNIVERSAL
CONSOLIDATED STATEMENT OF CASH FLOWS
(French GAAP, unaudited)
Year Ended December 31,
---------------------------------
(a) 2003 2002 2002
With VE
accounted
for using
the equity
method
------------- ---------- ---------
Cash flow - operating activities:
Net loss EUR (1,143)EUR(23,301)EUR(23,301)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Depreciation, amortization and
other operating provisions
and allowances 4,759 22,103 24,040
Equity loss in Veolia
Environnement 203 - -
Financial provisions and
provisions related to businesses
sold (1,007) 2,786 2,895
Gain on sale of property, plant
and equipment and financial
assets, net 47 (1,541) (1,748)
Undistributed earnings from
affiliates, net (13) 356 456
Deferred taxes (154) 1,589 1,608
Minority interests 1,212 574 844
Changes in assets and liabilities,
net of effect of acquisitions
and divestitures (18) 229 (124)
------------ ---------- ----------
Net cash provided by operating
activities EUR 3,886 EUR 2,795 EUR 4,670
Cash Flow- investing activities:
Capital expenditures (1,552) (1,729) (4,134)
Proceeds from sale of property,
plant and equipment and
intangible assets 477 158 158
Purchases of investments (b) (4,422) (2,000) (4,792)
Sales of investments (b) 1,408 9,233 10,987
Net decrease (increase)
in financial receivables 140 (1,875) (2,027)
Sales (purchases)of marketable
securities 49 322 213
------------ ---------- ----------
Net cash provided by (used
for) investing activities EUR (3,900) EUR 4,109 EUR 405
Cash flow - financing activities:
Net increase (decrease) in short-
term borrowings (7,259) (3,271) (5,991)
Notes mandatorily redeemable for
new shares of Vivendi Universal - 767 767
Proceeds from issuance of borrowings
and other long-term debt 5,657 369 2,748
Principal payment on borrowings
and other long-term liabilities (1,947) 510 (1,854)
Net proceeds from issuance of
common shares 71 68 1,622
Sales (purchases) of treasury
shares (98) 1,973 1,973
Cash dividends paid (737) (1,120) (1,300)
Cash payment to InterActiveCorp - (1,757) (1,757)
------------ ---------- ----------
Net cash provided by (used for)
financing activities EUR (4,313) EUR(2,461) EUR(3,792)
Foreign currency translation
adjustment on cash and cash
equivalents (110) 981 1,287
------------- ---------- ----------
Change in cash and cash
equivalents EUR (4,437) EUR 5,424 EUR 2,570
============= ========== ==========
Cash and cash equivalents:
Beginning EUR 7,295 EUR 1,871 EUR 4,725
============= ========== ==========
Ending EUR 2,858 EUR 7,295 EUR 7,295
============= ========== ==========
(a) 2002 and 2003 include 100% of Maroc Telecom and Vivendi Universal
Entertainment which are controlled by Vivendi Universal with a 51%
and 92% voting interest respectively and with a 35% and 86%
ownership interest respectively. It also includes 100% of SFR
(formerly known as Cegetel Groupe S.A.) which is controlled by
Vivendi Universal with an approximately 56% ownership interest as
of December 31, 2003.
(b) Purchase of investments and sales of investments include net cash
from acquired and divested companies, particularly an investment
of E4 billion in SFR Cegetel group (formerly known as Cegetel
Groupe SA) on January 23, 2003.
ADDITIONAL INFORMATION The following compares 2003 actual results with illustrative il·lus·tra·tive adj. Acting or serving as an illustration. il·lus  tra·tive·ly adv.Adj. 1. 2002 income statement that presents Veolia Environnement accounted for as an equity investment. OTHER FINANCIAL EXPENSES, NET OF PROVISIONS In 2003, other financial expenses, net of provisions amounted to E 509 million compared to E3,444 million in 2002.
----------------------------------------------------------------------
EUR million Included
in
adjusted
net
income 2003
======================================================================
Financial provisions and amortization of financial No
charges, net of realized losses (including puts) (44)
Fees related to refinancing plan No (50)
Foreign exchange losses Yes (228)
Other Yes (187)
Of which gain on financial asset sales 20
----------------------------------------------------------------------
Total (509)
----------------------------------------------------------------------
Financial provisions, net of realized losses were mainly comprised of the assessment of the put option granted to SNCF SNCF Société Nationale des Chemins de fer Français (French National Railways) SNCF Sans Nous les Cafés Ferment (French) on Cegetel SAS (1) (SAS Institute Inc., Cary, NC, www.sas.com) A software company that specializes in data warehousing and decision support software based on the SAS System. Founded in 1976, SAS is one of the world's largest privately held software companies. See SAS System. interest (E85 million) and the SEC indemnity Recompense for loss, damage, or injuries; restitution or reimbursement. An indemnity contract arises when one individual takes on the obligation to pay for any loss or damage that has been or might be incurred by another individual. (E40 million), offset by the sale of InterActiveCorp warrants (a E125 million gain after a E454 million provision reversal), the provision reversal following the mark to market of DuPont Dupont, DuPont, Du Pont, or du Pont may refer to: Companies
Any swap in which the non-floating rate side is based on the total return of an equity or fixed income instrument with a life longer than the swap. Notes: Total return swaps are most common in equity or physical commodity markets. (a E97 million gain), and the sale of impaired See assistive technology. investment in Softbank Capital SOFTBANK Capital is a venture capital group in the United States. See also
"Other" mainly includes the cancellation cancellation (See: cancel) CANCELLATION. Its general acceptation, is the act of crossing a writing; it is used sometimes to signify the manual operation of tearing or destroying the instrument itself. Hyde v. Hyde, 1 Eq. Cas. Abr. 409; Rob. of a debt of SFD SFD Single Family Dwelling SFD Sacramento Fire Department (California, USA) SFD Start of Frame Delimiter (networking) SFD Saudi Fund for Development SFD Seattle Fire Department vis-a-vis SFR-Cegetel for E 200 million. This cancellation was offset by an improvement in SFD's net income and shareholder equity, therefore it has no impact on the adjusted net income. GAIN (LOSS) ON BUSINESS SOLD, NET OF PROVISIONS In 2003, gain on businesses sold, net of provisions, of E602 million consisted mainly of capital gains on the divestiture of and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. of our interest in the following companies: Telepiu (+E215 million, including a E352 million provision reversal), Consumer Press Division (+E104 million), Sogecable Sogecable (IBEX-35: SGC) is the leading pay TV company in Spain, created in 1989. It was the first company to introduce interactive systems and specially Digital Television in Spain. (+E71 million), UGC See user-generated content. (-E47 million), Comareg (+E42 million), Xfera (-E16 million, including a E75 million provision accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. ) and Internet subsidiaries (+E38 million). At December 31, 2003, income tax expense and minority interests related to gain on business sold, net of provisions, amounted to E21 million and E11 million, respectively. In 2002, gain on businesses sold, net of provisions totaled E1 billion. INCOME TAX EXPENSE In 2003, the company recorded a tax credit of E 408 million compared to a cost of E 2,119 million in 2002. ---------------------------------------------------------------------- EUR million 2003 ====================================================================== Total taxes excluded from Adjusted Net Income 1,112 Leverage Partnership distribution 477 Other provision reversal 211 Tax asset activation 424 Taxes included in the Adjusted Net Income (704) of which 100% of savings from SFR Cegetel group structure simplification 515 In 2003, Vivendi Universal's income tax rate on the adjusted net income in 2003 was reduced to 32% compared to 81% in 2002. However, since SFR Cegetel Group, Maroc Telecom, CanalSatellite and Canal+ SA are not part of Vivendi Universal's consolidated tax group, losses elsewhere in the group are not available to offset profits taxable at those entities. Therefore, this reduced 32% tax rate cannot be sustained in the current structure. EQUITY IN GAIN (LOSSES) EARNINGS OF UNCONSOLIDATED COMPANIES
E million 2003 2002 Change
------- ------- --------
Veolia Environnement + 33 + 235 - 202
VUE subsidiaries - 26 - 36 + 10
SFD + 98 - 1 + 99
VTI subsidiaries - 18 - 175 + 157
Internet - - 74 + 74
.
Other - 16 - 48 + 32
------- ------- --------
Total + 71 - 99 +170
Excluding impairment losses recorded by Veolia Environnement and the impairment losses recorded in respect to certain VUE affiliates. PROBABLE PROBABLE. That which has the appearance of truth; that which appears to be founded in reason. ACCOUNTING IMPACT OF THE NBC UNIVERSAL TRANSACTION IN 2004 At December 31, 2003, the fair value of VUE denominated in US dollars exceeded its carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. also denominated in US dollars. However, due to the evolution of the US dollar/euro exchange rate through December 31, 2003 since the date of Vivendi Universal's acquisition of Universal Studios in December 2000 and the date of Vivendi Universal's acquisition of the entertainment assets of InterActiveCorp in May 2002, a cumulative foreign currency loss is recorded in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with French GAAP as a reduction to shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. through the currency translation adjustment account. The foreign currency loss has no impact on net income in 2003 but will impact 2004 net income (estimated loss at E2.7 billion at December 31, 2003 level of the dollar rate). It will be partially offset by the capital gain in dollars on the transaction. This transaction has no impact on Vivendi Universal's 2003 accounts. EVENTUAL ACCOUNTING AND CASH IMPACTS OF THE EXPENSES OF THE CALL OPTION OF VEOLIA ENVIRONNEMENT ON OR BEFORE DECEMBER 23, 2004 If the call options on Veolia Environnement shares are exercised on or before December 23, 2004, the cash sales sales made for ready, money, in distinction from those on which credit is given; stocks sold, to be delivered on the day of transaction. See also: Cash of the assets should amount to E2.2 billion and would produce a capital gain without cash tax impact of approximately E2.2 billion. Note: This press release contains consolidated results established under French Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (French GAAP). |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion