Vivendi's First Half 2006 Earnings Results

Business Wire, Sept 7, 2006

PARIS -- Vivendi

--  Good performance for the first half of 2006 with a 10.9%
        increase in adjusted net income

    --  2006 adjusted net income guidance confirmed, with at least 16%
        growth

Note: this press release contains consolidated unaudited earnings established under IFRS, reviewed by auditors and Vivendi's audit committee. Considering the practices of major European companies with respect to the application of IFRS and the accounting impact of acquisitions, Vivendi has made changes to the presentation of its consolidated statement of earnings and its consolidated statement of cash flows as well as the operating performances of its business segments and of the Group. Those changes are detailed in Appendix I. These earnings were reviewed by the Management Board on August 29, 2006 and examined by the Supervisory Board on September 6, 2006.

--Earnings, attributable to equity holders of the parent, of EUR1,862 million, an increase of 48.1 %.

--Adjusted net income(1) , attributable to equity holders of the parent, of EUR1,378 million, a 10.9 % increase.

--Adjusted earnings before interest and income taxes(2) (EBITA) of EUR2,348 million, an increase of 11.1 % on a comparable basis(3), thanks to the good performance of all business units, which are all profitable.

--Vivendi confirms its 2006 adjusted net income guidance of at least a 16% increase, with a dividend distribution rate at a minimum of 50% of adjusted net income. In accordance with its new definition, 2006 adjusted net income should be at EUR2.6 billion.

Comments of Jean-Bernard Levy, Chairman of Vivendi's Management Board

"In the first half of 2006, Vivendi once again achieved substantial improvement in operating performance, thereby demonstrating that it has been pursuing the right strategy. This was true of all our businesses, in terms of both revenue and earnings.

Adjusted net income, a good indicator of our ability to generate profits, was up by about 11%. Vivendi is well on its way to meeting its targets for the full year. Adjusted net income in 2006 should increase by 16% to a total of EUR2.6 billion. We will continue to distribute at least 50% of adjusted net income to our shareholders, so the 2006 dividend will be higher than the 2005 dividend.

During the first half, Vivendi consolidated its competitive standing in its various business segments. The merger of Canal and TPS currently under way--and just approved by France's competition authority--will enable us to build a top-ranked player in French pay-TV under our exclusive control. We have also increased our stake in NBC Universal and Universal Music Group by buying out Matsushita's holdings, and expanded our interest in Neuf Cegetel. In a period requiring high expenditures in infrastructure, we are in a strong position to leverage the growing consumer demand for entertainment and services made possible by broadband Internet and mobile telecommunications.

Our outlook for the next five years provides ample proof of our strengths and potential. We have every reason to be confident in our future."

New presentation of the consolidated statement of earnings

Considering the practices of major European companies, Vivendi has made, as of June 30, 2006, the following changes to the presentation of its consolidated statement of earnings as well as the operating performances of its business segments and of the Group.

The most significant changes in the new presentation which impact the definition of the adjusted net income are the elimination of amortization of intangible assets acquired through business combinations and the replacement of earnings from operations (EFO) by adjusted earnings before interest and income taxes (EBITA), as the key operating performance measure of the business units. The main difference between EBITA and EFO is the amortization of intangible assets acquired through business combinations that is excluded from EBITA.

Vivendi considers that these non-GAAP measures are relevant indicators of the Group's operating and financial performance.

If this new presentation had occurred in 2005, 2005 net adjusted income would have been EUR2,218 million (versus EUR2,078 million with the former presentation) and 2005 EBITA of EUR3,985 million (versus an EFO of EUR3,746 million with the former presentation).

The dividend distribution rate of will now be fixed on the new definition of adjusted net income as described above. Vivendi intends to distribute, each year, at least 50% of the adjusted net income.

Comments on Vivendi's First Half 2006 Earnings

Revenues increased to EUR9,610 million compared to EUR9,131 million for the half-year ended June 30, 2005, representing an increase of 5.2%. On a comparable basis, revenues amounted to EUR9,572 million compared to EUR9,046 million, an increase of 5.8% ( 4.6% at constant currency). All of the Group's businesses contributed to this improvement.

EBITA totaled EUR2,348 million compared to EUR2,121 million for the half-year ended June 30, 2005. On a comparable basis, EBITA was up 11.1% ( 10.3% at constant currency), to reach EUR2,348 million (compared to EUR2,114 million for the half-year ended June 30, 2005). In the first half of 2006, each business unit generated positive EBITA.