Vivendi Universal: Positive impact of IFRS

Vivendi Universal: Positive impact of IFRS

    Business Editors

    PARIS--(BUSINESS WIRE)--April 14, 2005--Vivendi Universal (Paris Bourse: EX FP; NYSE: V)

    -- Note: These IFRS results were established under Vivendi
    Universal's management responsibility. These results were
    presented to the Audit Committee on April 11, 2005 and were
    subject to audit procedures by the statutory auditors who
    issued positive assurance on the GAAP information presented.

    Beginning January 1, 2005, Vivendi Universal's (Paris Bourse: EX FP; NYSE: V) consolidated financial statements will be prepared in accordance with the applicable International Financial Reporting Standards (IFRS)(1), as approved by the European Union.
    The quarterly, half-year and annual financial reports for 2005 will be published in accordance with the IFRS and will include comparative figures for 2004 prepared under the same standards.

    Principal impacts of the IFRS transition on 2004 financial statements

--	Shareholders' equity of EUR 15,798 million as of December 31, 2004, compared to EUR 13,621 million in French GAAP.
--	Revenues (on a comparable basis(2)) of EUR 18,724 million, compared to EUR 18,893 million in French GAAP.
--	Operating income (on a comparable basis) of EUR 3,137 million, compared to EUR 3,117 million in French GAAP.
--	Net income of EUR 3,821 million, compared to a profit of EUR 754 million in French GAAP. In particular, this improvement takes into account the positive impact of the cancellation under IFRS of the foreign currency translation adjustment associated with the NBC Universal transaction as of January 1st, 2004 (approximately EUR 2,490 million, non-cash) and the goodwill amortization (EUR 638 million).
--	Adjusted net income(3) of EUR 1,309 million, compared to EUR 1,380 million in French GAAP.
--	Financial net debt(4) of EUR 4,724 million as of December 31, 2004, compared to EUR 3,135 million in French GAAP. In particular, this difference takes into account the forward agreement to purchase an additional 16% stake in Maroc Telecom for EUR 1.1 billion. In IFRS, financial net debt represents 29.9% of Shareholders' equity, to be compared with 23% in French GAAP.

    Adoption of IFRS does not require any major change for Vivendi Universal in terms of financial information.

    Impacts on the statement of financial position

    Certain statements of financial position items are reclassified. Assets held for sale (VUE) are identified and minority interest and other equity are included in equity.
    Commitments to repurchase minority interests are recorded in the statement of financial position (in financial debt offset mainly through minority interests and goodwill).

    Impacts on the statement of earnings

    Impacts relate to the presentation of revenues of telecommunications operators, the identification of assets held disposed of or discontinued, recognition of share-based payments (stock option plans and group savings plans), the elimination of goodwill amortization and the mark-to-market of financial instruments (derivative instruments and certain assets).

    Impacts on the statement of cash flows

    There are no changes other than the identification of discontinued operations (VUE).

    A comprehensive and detailed documentation on the transition to IFRS is available at www.vivendiuniversal.com and http://finance.vivendiuniversal.com.

    Next publications of Vivendi Universal financial reports (under IFRS with 2004 comparative figures under IFRS):

    First Quarter 2005 Revenues: April 27, 2005.

    First Quarter 2005 Earnings: May 19, 2005.

    Second Quarter 2005 Revenues: July 28, 2005.

    Second Quarter 2005 Earnings: September 13, 2005.

    Important Disclaimer

    This press release contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are outside our control, including but not limited to the risks that: certain accounting methods and/or options adopted herein may be modified at a later date; the expected impacts from the adoption of IFRS may not occur in the manner or according to the timing set forth herein; the expected dates for transitioning to IFRS reporting may not occur as projected herein; as well as any additional risks described in the documents Vivendi Universal has filed previously with the U.S. Securities and Exchange Commission and/or the French Autorite des Marches Financiers. Investors and security holders may obtain a free copy of documents filed by Vivendi Universal with the U.S. Securities and Exchange Commission at www.sec.gov or directly from Vivendi Universal. Vivendi Universal does not undertake, nor has any obligation, to provide, update or revise any forward-looking statements.

(1) Given the remaining uncertainties regarding the standards and interpretations that will be applicable as of December 31, 2005, Vivendi Universal reserves the right to modify certain accounting methods and options adopted today. Uncertainties remain in particular regarding certain important standards and interpretations: recognition of commitments to repurchase minority interests and accounting for customer loyalty programs by telecommunications operators.

(2) The comparable basis, a non GAAP measure, mainly illustrates the impact of the divestitures at Canal+ Group (Canal+ Nordic, etc.), of Kencell and Monaco Telecom, and includes the full consolidation of Mauritel by Maroc Telecom as if these transactions had occurred at the beginning of 2004. In addition, comparable basis illustrates under French GAAP the effect of the divestiture of VUE, which, under IFRS GAAP is recorded as a discontinued operation as from January 1, 2004. The results on a comparable basis are not necessarily indicative of the combined results that would have occurred had the events in question actually occurred at the beginning of 2004.

(3) Adjusted net income does not include, in particular, most non-operating and non-recurring items, income tax and the minority interest in adjustments. It does take into account part of the benefit arising on the Consolidated Global Profits Tax System, as from January 1, 2004.

(4) In French GAAP, Financial net debt includes financial gross debt less cash and cash equivalents. Under IFRS, financial net debt includes financial gross debt (including commitments to repurchase minority interests) less cash and cash equivalents, as well as derivative financial instruments and cash deposit backing financing.

APPENDIX I

VIVENDI UNIVERSAL CONSOLIDATED STATEMENT OF EARNINGS (IFRS standards)

--------------- Year Ended December 31, 2004 (In millions of euros, --------------- except per share amounts)

Revenues EUR 18,932 Cost of Revenues (9,885) --------------- Margin from operations 9,047 Selling, general and administrative expenses (5,788) Other operating expenses (100) --------------- Earnings from operations 3,159 Other income from ordinary activities 89 Other charges from ordinary activities (25) Income from equity affiliates 244 --------------- Earnings before interest and income taxes 3,467 Interest (414) Other financial charges (430) Other financial income 1,693 --------------- Interest and other financial income and charges 849 --------------- Earnings before income taxes and discontinued operations 4,316 Provision for income taxes (298) --------------- Earnings from continuing operations 4,018 Earnings from discontinued operations 860 --------------- Earnings for the year EUR 4,878 =============== Attributable to: Minority interests 1,057 Equity holders of the parent EUR 3,821 Earnings attributable to discontinued operations per share - basic 0.75 Earnings attributable to discontinued operations per share - diluted 0.75

Earnings attributable to the equity holders of the parent per share - basic EUR 3.34 Earnings attributable to the equity holders of the parent per share - diluted EUR 3.32

APPENDIX II

VIVENDI UNIVERSAL CONSOLIDATED STATEMENT OF FINANCIAL POSITION (IFRS standards)

----------- ----------- January 1, December 31, (In millions of euros) 2004 2004 ----------- ----------- ASSETS Goodwill, net EUR 12,969 EUR 13,181 Media/Entertainment non current content assets, net 2,971 2,431 Other intangible assets, net 2,362 2,177 Property, plant and equipment, net 5,768 4,882 Investments in equity affiliates 2,096 5,773 Non current derivative instruments 79 125 Cash deposits backing financing 230 59 Other non current financial assets 3,653 3,628 Deferred income tax assets 1,094 1,388 Other non current assets 87 451 ----------- ----------- Non current assets 31,309 34,095 ----------- ----------- Inventories 364 315 Current income tax receivables 373 772 Media/Entertainment current content assets, net 583 418 Accounts receivable and other 5,673 4,682 Current derivative instruments 64 132 Other short-term financial assets 30 30 Cash and equivalents 2,726 3,159 ----------- ----------- 9,813 9,508 Assets held for sale 13,897 180 ----------- ----------- Current assets 23,710 9,688 ----------- ----------- TOTAL ASSETS EUR 55,019 EUR 43,783 =========== ===========

EQUITY AND LIABILITIES Share Capital EUR 5,893 EUR 5,899 Additional paid-in capital 7,234 7,313 Retained earnings and others (277) 2,586 Equity associated with assets held for sale 231 - ----------- ----------- Equity attributable to equity holders of the parent 13,081 15,798 Minority interests 3,961 2,643 ----------- ----------- TOTAL EQUITY 17,042 18,441

Non current provisions 843 795 Long-term debt 7,416 5,357 Deferred income tax liabilities 3,670 3,395 Other non current liabilities 2,669 2,833 ----------- ----------- Non current liabilities 14,598 12,380 ----------- ----------- Accounts payable 9,441 8,357 Current income tax payables 1,157 1,298 Current provisions 355 357 Short-term borrowings 5,611 2,842 ----------- ----------- 16,564 12,854 Liabilities associated with assets held for sale 6,815 108 ----------- ----------- Current liabilities 23,379 12,962 ----------- ----------- TOTAL LIABILITIES 37,977 25,342 ----------- ----------- TOTAL EQUITY AND LIABILITIES EUR 55,019 EUR 43,783 =========== ===========

--30--AC/ny*

CONTACT: Media: Paris Antoine Lefort, +33 (0) 1 71 71 11 80 or Agnes Vetillart, +33 (0) 1 71 71 30 82 or Alain Delrieu, +33 (0) 1 71 71 10 86 or New York Flavie Lemarchand-Wood, +(1) 212.572.1118 or Investor Relations: Paris Daniel Scolan, +33 (0) 171 71 32 91 or Laurence Daniel, +33 (0) 171 71 12 33 or Edouard Lassalle, +33 (0) 171 71 30 45 or New York Eileen McLaughlin, +(1) 212.572.8961

KEYWORD: FRANCE INTERNATIONAL EUROPE INDUSTRY KEYWORD: ENTERTAINMENT EARNINGS SOURCE: Vivendi Universal

Copyright Business Wire 2005