Vivendi Reports Q3Vivendi Reports Q3

Vivendi Reports Q3

November 16, 2006

4 Min Read

PARIS -- First Nine Months of 2006

• Earnings, attributable to equity holders of the parent, of €3,423 million, an increase of 79.9 %.

• Adjusted net income1 , attributable to equity holders of the parent, of €2,109 million, a 16.3 %increase.

• Adjusted earnings before interest and income taxes2 (EBITA) of €3,648 million, an increase of

14.4 % on a comparable basis3, due to the good performance of all business units, which allhave increasing profits.

• Increased operating margin.

Third Quarter of 2006

• Earnings, attributable to equity holders of the parent, of €1,561 million, an increase of141.6 %.

• Adjusted net income, attributable to equity holders of the parent, of €731 million, a 28.2 %increase.

• Adjusted earnings before interest and income taxes (EBITA) of €1,300 million, an increase of20.9 % on a comparable basis, thanks to the good performance of each business unit.

Vivendi confirms the guidance for its 2006 adjusted net income, attributable to equity holders ofthe parent, of at least a 16% increase, with a dividend distribution rate of a minimum of 50% ofadjusted net income.

Adjusted net income, attributable to equity holders of the parent, should reach €2.6 billion.

1 Adjusted net income, attributable to equity holders of the parent, is detailed in Appendix V.

2 Adjusted earnings before interest and income taxes (EBITA) is detailed in Appendix I.

3 Comparable basis essentially illustrates the effect of the divestitures or abandonment of operations that occurred in 2005 and 2006 (mainly NC Numéricâble in2005 and the Paris Saint-Germain soccer club (PSG) in 2006 at Canal+ Group, and Annuaire Express SFR’s phone directory activities in 2005) and includes the fullconsolidation of stakes in distribution subsidiaries at SFR as if these transactions had occurred as of January 1, 2005. Comparable basis results are notnecessarily indicative of the results that would have occurred had the events actually occurred at the beginning of 2005.

2

Comments on Vivendi’s First Nine Months of 2006 Earnings

Revenues increased to €14,499 million compared to €14,005 million for the first nine months of 2005, representingan increase of €494 million (+ 3.5%).

On a comparable basis, revenues amounted to €14,462 million compared to €13,896 million, an increase of 4.1%(+3.6% at constant currency). All of the Group’s businesses contributed to this improvement.

EBITA totaled €3,648 million compared to €3,196 million for the first nine months of 2005. On a comparable basis,EBITA was up €459 million, representing an increase of 14.4% (+14.1% at constant currency), to reach €3,648 million(compared to €3,189 million for the first nine months of 2005). For the first nine months of 2006, each business unitgenerated positive and growing EBITA.

Operating margin (EBITA on revenues) rate was at 25.2% in 2006 versus 22.8% in 2005.Income from equity affiliates totaled €245 million compared to €225 million for the first nine months of 2005,representing an increase of €20 million. Income from NBC Universal’s earnings amounted to €216 million for the firstnine months of 2006 compared to €255 million for the same period in 2005.

Other financial charges and income included an income of €218 million compared to €271 million for the firstnine months of 2005, representing a €53 million decrease. For the first nine months of 2006, they mainly included thecapital gain on the sale of Veolia Environnement shares (€834 million), offset by the capital losses incurred on thePTC shares (€496 million) and on the sale of the DuPont shares (€98 million). For the same period in 2005, they mainlyincluded the positive impact of the unwinding of InterActiveCorp’s interest in VUE (€194 million).

Provision for income taxes resulted in an income of €518 million, compared to a charge of €537 million for thefirst nine months of 2005. Items included in this amount are the gain related to the settlement of the DuPontlitigation (€1,019 million) and the tax savings generated by the Consolidated Global Profit Tax System (€447 millioncompared to €391 million for the same period in 2005).

Earnings attributable to equity holders of the parent amounted to €3,423 million (basic earnings per share of€2.97 and €2.94 on a diluted basis), compared to €1,903 million for the first nine months of 2005 (basic earnings pershare of €1.66 and €1.64 on a diluted basis), representing an increase of 79.9%.

Adjusted net income attributable to equity holders of the parent amounted to €2,109 million (basic adjustedearnings per share of €1.83 and €1.81 on a diluted basis), compared to €1,813 million for the first nine months of2005 (basic adjusted earnings per share of €1.58 and €1.57 on a diluted basis), representing an increase of 16.3%.

The difference between earnings attributable to equity holders of the parent and adjusted net income attributable toequity holders of the parent is €1,314 million, and mainly includes the gain related to the settlement of the taxdispute on the DuPont shares (€921 million), the capital gain generated on the sale of the Veolia Environnementshares (€834 million), offset by the capital loss incurred on the PTC shares (-€496 million).

Vivendi

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