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"We have reached or surpassed all of our targets. We are the only group in the business not to have issued a profit warning last year."
——Jean-Marie Messier, Chairman VU

VIVENDI UNIVERSAL EARNINGS

Accounting Charges are Water Under the Bridge
France is like a whole different country, with their different words for everything and their own accounting practices.

Vivendi Universal reported an $11.8 billion loss for 2001, mostly due to various acquisitions, and plans a $13.63 billion charge to write down goodwill—which in non-accounting terms means the difference between the amount paid for an asset and its book value. The company is in the midst of changing its accounting practices to be inline with U.S. accounting customs. Damn, if we’d wanted to understand the way accounting practices vary from country to country, we would have been accountants, not brain surgeons.

Last year, Vivendi bought Houghton Mifflin publishing, MP3.com and is in the process of buying back the film and television operations of USA Networks.

2001’s loss compares to a $2 billion profit the year before. Revenue grew from $36.2 billion in 2000 to $49.9 billion in 2001.

Said VU chairman Jean-Marie Messier in a call to analysts, "We have reached or surpassed all of our targets. We are the only group in the business not to have issued a profit warning last year."

The music division posted pro forma EBITDA of $970 million and pro forma revenues of $5.3 billion, with the reporting noting "these results represent the best financial results in the music industry."

The company pointed out that 2001 was bad year for the music industry, putting a positive spin on Universal Music Group’s performance. Pointing out that fewer albums in 2001 sold 5 million copies than in 2000 and that UMG’s Top 10-selling albums sold 35% less than the year before, the report noted that UMG’s overall unit sales declined only 1%. It also noted that UMG labels won 32 Grammys.

Looking forward, the company says that "except for an expected weak first quarter, the quality of the 2002 slate of releases is expected to result in an increase in market share, and for EBITDA to grow faster than revenue." It adds that the 2002 release schedule includes records from Shania Twain, U2, Bon Jovi, Limp Bizkit, Nelly, Eminem, Sting, Shaggy and Dr. Dre. Limp Bizkit and Eminem listed as assets in a financial report—dude, that rocks.

Vivendi stock closed down 44 cents to $41.25.

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