Page 177 - 2012 Annual Report

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VIVENDI l 2012 l Annual Report
FINANCIAL REPORT – CONSOLIDATED FINANCIAL STATEMENTS – STATUTORY AUDITORS’ REPORT ON THE
CONSOLIDATED FINANCIAL STATEMENTS – STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS –
STATUTORY FINANCIAL STATEMENTS 4
4
I - 2012 FINANCIAL REPORT
SECTION 2 EARNINGS ANALYSIS
2.2. EARNINGS REVIEW
Adjusted net income amounted to €2,550 million (or €1.96 per share(1) )
compared to €2,952 million (or €2.30 per share) in 2011. This €402 million
decrease (-13.6%) in adjusted net income resulted primarily from:
✱ a €577 million decrease in EBITA to a total of €5,283 million (compared
to €5,860 million in 2011). This change mainly reflected the decline
in the performances of SFR (-€678 million, including the €187 million
restructuring charges), Maroc Telecom Group (-€102 million, including
the €79 million restructuring charges), and Canal+ Group (-€38 million,
including the -€51 million impact of the acquisition of the D8 and D17
channels and the new activities in Poland, partially offset by the
operating performances of Activision Blizzard (+€138 million), GVT
(+€92 million), and Universal Music Group (+€18 million) including
-€98 million in EMI Recorded Music integration costs and restructuring
charges;
✱ a €87 million increase in interest expense, resulting from the impact
of the increase in the average outstanding Financial Net Debt
(-€127 million), partially offset by the decrease of the average interest
rate on Financial Net Debt (+€40 million);
✱ a €66 million decrease mainly attributable to the balance of the
contractual dividend paid by GE to Vivendi in January 2011 as part of
the completion of the sale by Vivendi of its interest in NBC Universal;
✱ a €20 million decrease resulting from income from equity affiliates;
✱ a €69 million decrease in income tax expense. This change notably
reflected the impact of the decline in the group’s business segments
taxable income (+€264 million), primarily related to SFR, partially
offset by the €181 million decrease in current tax savings related to
Vivendi SA’s tax group and Consolidated Global Profit Tax Systems.
This decrease notably included the impact of the changes in French
Tax Law in 2011 and 2012, mainly the capping of the deduction for tax
losses carried forward at 50% of taxable income (compared to 60%
in 2011); and
✱ a €279 million decrease in adjusted net income attributable to
non-controlling interests, mainly resulting from the acquisition in
June 2011 of Vodafone’s non-controlling interest in SFR (€242 million).
(1) For details of the adjusted net income per share, please refer to Appendix 1 of this Financial Report.
Breakdown of the main items from the Statement of Earnings
Revenues were €28,994 million, compared to €28,813 million in 2011,
a €181 million increase (+0.6%, or -0.7% at constant currency). For a
breakdown of revenues by business segment, please refer to Section 4
of this Financial Report.
Costs of revenues amounted to €14,364 million, compared to
€14,391 million in 2011, a €27 million decrease (-0.2%).
Margin from operations increased by €208 million to €14,630 million,
compared to €14,422 million in 2011 (+1.4%).
Selling, general and administrative expenses, excluding the
amortization of intangible assets acquired through business combinations,
amounted to €8,995 million, compared to €8,401 million in 2011, a
€594 million increase (+7.1%).
Depreciation and amortization of tangible and intangible assets
are included either in the cost of revenues or in selling, general and
administrative expenses. Depreciation and amortization, excluding
amortization of intangible assets acquired through business combinations,
amounted to €2,682 million (compared to €2,534 million in 2011), an
additional €148 million charge (+5.8%). This change primarily resulted
from the increase in the depreciation of telecommunication network
assets at Maroc Telecom Group and GVT.
Restructuring charges and other operating charges and income
amounted to a net charge of €352 million, compared to a net charge of
€161 million in 2011, a €191 million increase. In 2012, they primarily
included restructuring charges of SFR (€187 million) and Maroc Telecom
Group (€79 million), restructuring charges and integration costs at UMG
(€98 million), as well as transition costs incurred by Canal+ Group as
part of the acquisition of the free-to-air channels D8 and D17 in France
and the pay-TV platform “n” in Poland (€11 million). Moreover, in 2012,
other operating charges included the €66 million fine ordered against
SFR by the French Competition Authority in December 2012. In 2011,
restructuring charges amounted to €100 million, of which €67 million
at UMG and €19 million at Activision Blizzard. In 2011, other operating
charges included the €30 million fine ordered in September 2011 by the
French Competition Authority on Canal+ Group, as part of the audit related
to the compliance with the commitments undertaken by Canal+ Group in
connection with the merger of CanalSatellite and TPS in January 2007.