Annual report 2014

Financial Report | Statutory Auditors’ Report on the Consolidated Financial Statements |

Consolidated

Financial Statements

| Statutory Auditors’ Report on the Financial Statements | Statutory Financial Statements

Note 7. Earnings per share

6.6. Tax audits

The fiscal year ended on December 31, 2014 and prior years are open to

tax audits by the respective tax authorities in the jurisdictions in which

Vivendi has or had operations. Various tax authorities have proposed

adjustments to the taxable income reported for prior years. It is not

possible, at this stage of the current tax audits, to accurately assess the

impact that could result from an unfavorable outcome of these audits.

Vivendi Management believes that these tax audits should not have a

material unfavorable impact on the financial position or liquidity of the

group.

Regarding Vivendi SA, in respect of the Consolidated Global Profit Tax

System, the consolidated income reported for fiscal years 2006, 2007, and

2008 is under audit by the French tax authorities. This tax audit began in

January 2010. In addition, in January 2011, the French tax authorities

began a tax audit on the consolidated income reported for fiscal

year 2009 and in February 2013, the French tax authorities expanded the

audit to include the consolidated income reported for fiscal year 2010.

Finally, the audit of Vivendi SA’s tax group System for the years 2011

and 2012 began in July 2013. As of December 31, 2014, all of these

audits were ongoing. Vivendi Management believes that it has solid

legal grounds to defend its positions for determining the taxable income

for the fiscal years under audit. In any event, a provision for the impact

of the Consolidated Global Profit Tax System in 2011 has been accrued

(€409 million), notwithstanding the decision of the Administrative Court

of Montreuil on October 6, 2014, subject to the appeal filed by the Tax

Authorities (please refer to Note 6.1), as well as a provision for the

impact in relation to the use of tax credits in 2012 (€231 million).

In respect of the US tax group, the fiscal years ending December 31, 2005,

2006, and 2007 were under a tax audit. The final outcome of this tax

audit did not materially impact the amount of tax attributes. Vivendi’s US

tax group was also under audit for the fiscal years ending December 31,

2008, 2009, and 2010. This tax audit has now been completed and its

final outcome did not materially impact the amount of tax attributes. In

June 2014, the US tax authorities began a tax audit for fiscal years 2011

and 2012, and in December 2014, stated that they undertook a tax audit

for fiscal year 2013. As of December 31, 2014, the audit with respect to

these fiscal years was ongoing. Vivendi Management believes that it has

solid legal grounds to defend its positions for determining the taxable

income for the fiscal years under audit.

Note 7.

Earnings per share

Year ended December 31,

2014

2013

Basic

Diluted

Basic

Diluted

Earnings

(in millions of euros)

Earnings from continuing operations attributable to Vivendi SA shareowners

(290)

Earnings from discontinued operations attributable to Vivendi SA shareowners

5,034

1,924

1,921

Earnings attributable to Vivendi SA shareowners

4,744

1,967

1,964

Number of shares

(in millions)

Weighted average number of shares outstanding

(a)

1,345.8

1,330.6

Potential dilutive effects related to share-based compensation

(b)

5.5

4.7

Adjusted weighted average number of shares

1,345.8

1,351.3

1,330.6

1,335.3

Earnings per share

(in euros)

Earnings from continuing operations attributable to Vivendi SA shareowners per share

(0.22)

0.03

Earnings from discontinued operations attributable to Vivendi SA shareowners per share

3.74

3.73

1.45

1.44

Earnings attributable to Vivendi SA shareowners per share

3.52

3.51

1.48

1.47

(a)

Net of treasury shares (please refer to Note 17).

(b)

Does not include accretive instruments as of December 31, 2014 and 2013, which could be potentially dilutive. The balance of common shares in

connection with Vivendi SA’s share-based compensation plans is presented in Note 20.2.1.

239

Annual Report 2014