Financial Report and Audited Consolidated Financial Statements for the Year Ended December 31, 2016 February 23, 2017 VIVENDI Société anonyme with a Management Board and a Supervisory Board with a share capital of €7,078,983,142.00 Head Office: 42 avenue de Friedland – 75380 PARIS CEDEX 08 – FRANCE IMPORTANT NOTICE: READERS ARE STRONGLY ADVISED TO READ THE IMPORTANT DISCLAIMERS AT THE END OF THIS FINANCIAL REPORT. Thursday February 23, 2017 SELECTED KEY CONSOLIDATED FINANCIAL DATA ........................................................................................................................................ 5 I- 2016 FINANCIAL REPORT ................................................................................................................................................................................. 7 1 EARNINGS ANALYSIS: GROUP AND BUSINESS SEGMENTS ........................................................................................................................... 7 1.1 CONSOLIDATED STATEMENT OF EARNINGS AND ADJUSTED STATEMENT OF EARNINGS .......................................................................................... 8 1.2 EARNINGS ANALYSIS: GROUP.......................................................................................................................................................................... 8 1.3 DETAILED ANALYSIS OF THE MAIN ITEMS FROM THE STATEMENT OF EARNINGS ................................................................................................... 10 1.4 PERFORMANCE ANALYSIS: BUSINESS SEGMENTS ............................................................................................................................................ 13 2 TREASURY AND CAPITAL RESOURCES ........................................................................................................................................................ 21 2.1 NET CASH POSITION AND EQUITY PORTFOLIO .................................................................................................................................................. 21 2.2 CHANGES IN NET CASH POSITION ................................................................................................................................................................. 23 2.3 CASH FLOW FROM OPERATIONS ANALYSIS ...................................................................................................................................................... 24 2.4 ANALYSIS OF INVESTING AND FINANCING ACTIVITIES ....................................................................................................................................... 26 3 OUTLOOK ................................................................................................................................................................................................. 27 4 FORWARD-LOOKING STATEMENTS ........................................................................................................................................................... 27 5 OTHER DISCLAIMERS ............................................................................................................................................................................... 27 II- APPENDIX TO THE FINANCIAL REPORT: UNAUDITED SUPPLEMENTARY FINANCIAL DATA ........................................................ 28 1 QUARTERLY REVENUES, INCOME FROM OPERATIONS AND EBITA BY BUSINESS SEGMENT ..................................................................................... 28 III- CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016 .............................................................. 30 STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS ....................................................................... 30 CONSOLIDATED STATEMENT OF EARNINGS ................................................................................................................................................ 32 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME................................................................................................................... 33 CONSOLIDATED STATEMENT OF FINANCIAL POSITION ............................................................................................................................ 34 CONSOLIDATED STATEMENT OF CASH FLOWS ........................................................................................................................................... 35 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY ........................................................................................................................... 36 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ....................................................................................................................... 38 NOTE 1 ACCOUNTING POLICIES AND VALUATION METHODS ................................................................................................................................ 38 NOTE 2 MAJOR CHANGES IN THE CONSOLIDATION SCOPE AND THE EQUITY PORTFOLIO .......................................................................................... 53 NOTE 3 SEGMENT DATA ............................................................................................................................................................................... 57 NOTE 4 EBIT .............................................................................................................................................................................................. 61 NOTE 5 FINANCIAL CHARGES AND INCOME ...................................................................................................................................................... 62 NOTE 6 INCOME TAXES ................................................................................................................................................................................ 63 NOTE 7 EARNINGS PER SHARE ....................................................................................................................................................................... 67 NOTE 8 CHARGES AND INCOME DIRECTLY RECOGNIZED IN EQUITY ....................................................................................................................... 68 NOTE 9 GOODWILL ...................................................................................................................................................................................... 69 NOTE 10 CONTENT ASSETS AND COMMITMENTS ............................................................................................................................................... 72 NOTE 11 INVESTMENTS IN EQUITY AFFILIATES ................................................................................................................................................... 74 NOTE 12 FINANCIAL ASSETS ........................................................................................................................................................................... 77 NOTE 13 NET WORKING CAPITAL ..................................................................................................................................................................... 78 NOTE 14 CASH POSITION ................................................................................................................................................................................ 79 NOTE 15 EQUITY ........................................................................................................................................................................................... 80 NOTE 16 PROVISIONS .................................................................................................................................................................................... 81 NOTE 17 EMPLOYEE BENEFITS ......................................................................................................................................................................... 82 NOTE 18 SHARE-BASED COMPENSATION PLANS ................................................................................................................................................ 87 NOTE 19 BORROWINGS AND OTHER FINANCIAL LIABILITIES AND FINANCIAL RISK MANAGEMENT ............................................................................... 91 NOTE 20 CONSOLIDATED CASH FLOW STATEMENT ............................................................................................................................................ 96 NOTE 21 RELATED PARTIES ............................................................................................................................................................................. 97 NOTE 22 CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS .................................................................................................................... 100 NOTE 23 LITIGATION .................................................................................................................................................................................... 105 NOTE 24 MAJOR CONSOLIDATED ENTITIES OR ENTITIES ACCOUNTED FOR UNDER THE EQUITY METHOD ..................................................................... 113 NOTE 25 STATUTORY AUDITORS FEES ............................................................................................................................................................