VU’s $24 BILLION SKIDOO

Vivendi Universal announced its 2002 financial results today, which included a net loss of $24 billion or 23.3 billion euros amid speculation it will dismantle a portion of its media conglomerate to the highest bidders.

There was some good news. Chairman/CEO Jean-Rene Fourtou announced that the company’s debt was reduced to 12.3 billion euros from 37.1 billion euros, while its operating cash flow was up 115% to 2.6 billion euros and the operating income for its six core basis was up 18% to 3.2 billion euros, compared with 2001.

The total includes 94 million euros on recurring operations, 420 million euros of non-recurring restructuring costs, with a goodwill impairment of 18.4 billion euros and a portfolio investments impairment charge of 2.9 billion euros for a net loss of 23.3 euros.

Said Fourtou: "2002 has been an extremely difficult year for Vivendi Universal. 2003 will be a year of transition and of financial and economic progress. In 2004, we will see the results of the strategies and actions we have taken. And in 2005, God willing, I’ll be on the patio of my villa in the South of France, far from this madding race."

For UMG, which Vivendi Universal officials have insisted is not on the block, revenues were down 4% from the previous year to 6.3 billion euros, though, on a constant currency basis, they were down only 1%. The Music Group’s domestic marketshare was up 2.5 points to 28.9%, while the total U.S. record marketplace was showing an overall decline of 10.8% overall in sales. Operating income declined 23%, reflecting "the drop in sales, lower margins, higher provisions for returns, A&R costs and the rising price of a HITS subscription."