FOOL CONFERENCE CALL SYNOPSIS*
By Debora Tidwell (MF Debit)

The Seagram Company, Ltd. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: VO)") else Response.Write("(NYSE: VO)") end if %>
1430 Peel Street
Montreal, Quebec H3A 1S9 Canada
(514) 849-5271
(212) 572-7000

UNION CITY, CA (February 13, 1997)/FOOLWIRE/ --- The Seagram Company reported second quarter results on January 29th. Total company revenue grew 5% to over $3.7 billion and EBITDA before unusual items increased 10% to $530 million. The EBITDA comparison excludes the $290 million pre-tax re-engineering charge for their beverage operations which they took last year in this quarter and a $64 million pre-tax gain on the sale of Universal's publishing operations in this year's quarter. Excluding the unusual items in both years, operating income increased 15% to $337 million. Operating income, including the unusual items, was $401 million compared with $4 million last year.

Interest expense, which is partially offset by dividend income from the DuPont and Time Warner investments, was $4 million below last year due to the proceeds from the Putnam sale, which came in very late in the quarter, and lower average borrowing rates. Their underlying effective tax rate was 40% in the second quarter and 39% for the six months. The income tax provision this year included $64 million of taxes on the gain from the sale of Putnam. On an after-tax basis, the sale of Putnam was a break-even. The tax provision in last year's second quarter included a $79 million benefit related to the re-engineering charge. In the second quarter, net income was $161 million or $0.43 per share compared with $185 million or $0.50 per share excluding the re-engineering charge last year. Including the charge last year, they reported a net loss of $26 million or $(0.07) per share.

SPIRITS & WINE GROUP RESULTS. Attributed revenues of $1.7 billion were below last year and were what they had anticipated for the quarter. EBITDA increased 9% to $315 million. North America, once again, outperformed the group as it did last quarter. Revenues in Europe and Asia/Pacific declined for the same reasons they did in the first quarter -- increased competitive pressure and the impact on volumes of price increases taken last Spring. The competitive pricing environment, while perhaps better than it was last year at this time, is still difficult. In Europe, they experienced revenue declines in Germany principally due to Mumm Sec. Excluding Germany, the European revenues were about 2% higher for the quarter. In Asia, they had volume declines in Greater China and Duty Free. In the quarter, spirit and wine volume fell 4% as the performance of their key brands was mixed. Most of their brands in North America performed exceptionally well, especially Absolut and Captain Morgan. Crown Royal volumes, which declined in the quarter following an August price increase, were up for the six-month period.

Some of their key international brands were down versus last year and plan including Mumm Sec, Chivas, Royal Salute, and Martell. One quarter's numbers can be very misleading in the sense that, if there is a price increase at the beginning of the quarter and everyone bought in anticipation of that price increase the previous quarter and let it run through the system that quarter, the quarter numbers for both quarters in question would be misleading. The spirits and wine group EBITDA gain of $25 million was driven principally by their North American performance, higher per case margins from recent price increases, and continuing efficiencies from re-engineering. They are not backing off anticipating double-digit growth for the spirits and wine group EBITDA this year, but sales have been disappointing up to now. They expect that to change. But they expected spirits and wine sales up this quarter and they were wrong about that. They think they have sorted out the problem in distribution in China. They think the worst is behind them in Mumm Sec in Germany. In Taiwan, there was a lot of product stored prior to price increases that has also now gone through the system. They are increasing their distribution in Korea. They have added a distributor to go to a very significant portion of the market that developed that they were not covering and that is a very important market for them. The core demand trends in Asia/Pacific are good. Competition is tough, pricing is difficult, but they are still expecting North America to remain strong and they expect sales to be up.

BRAND SPENDING DURING THE QUARTER. Brand spending varied from region to region but, overall, it was down reflecting timing and in line with the volume shortfall. They continue to expect an increase in advertising expenses for fiscal 1997.

SEAGRAM BEVERAGE GROUP. The Seagram beverage group had another strong quarter. Revenues grew 5% to $508 million and EBITDA increased 14% to $65 million. Tropicana Pure Premium led the way once again with volume increases of 8% in North America. Tropicana/Dole's share of the total US chilled orange juice market declined by less than 1% to 40% due to the decrease in the more price-sensitive "from concentrate" product, Season's Best, which they took a price increase in. Their share of the most important not-from-concentrate orange juice market held at 71% driven by the continued success of the flagship Pure Premium and the introduction of a new flavor, Tangerine Orange. Internationally, Tropicana/Dole recorded higher volumes in Asia and the UK, which were offset by volume shortfalls in France. The Tropicana/Dole international is down 8% in the quarter, but the results are compared to a four-month quarter last year when Tropicana/Dole went from reporting a one-month lag to a current basis in France. So there was four month's of French business reported last year and there is only 3 months this year as it will be going forward. On a normalized basis, revenues were up slightly. One of Tropicana/Dole's objectives this year is to improve its margins. They increased in the second quarter to 12.8% from 11.7% last year despite a significant increase in advertising expenditures. Improved consumer and customer focus and increased operating efficiencies from their re-engineering initiatives have all contributed to the margin growth. Prior to the freezing weather in January in Florida, they expected a record orange crop in 1997 and there was some talk about pressure for lower prices at retail. The freezing weather caused damage to both the orange and the grapefruit crop and will result in a reduction in crop size and juice yield, but they don't expect that damage to be too severe and the lower crop yield should help maintain price stability at retail. They don't expect a major impact on supply or cost from their point of view.

UNIVERSAL DIVISION. They continue to make progress. Revenues increased 9% and EBITDA rose 13% to $150 million before the pre-tax gain from the publishing sale. Filmed entertainment revenues were just short of last year's and EBITDA increased slightly to $65 million.

UNIVERSAL MOTION PICTURE GROUP. The motion picture group's results were slightly above last year's, primarily due to the successful theatrical results from The Nutty Professor and Twister. Video sales were good for those movies in the second quarter. They have 3 big films out in the second half, 2 out in the third quarter although one very late in the quarter. Dante's Peak was released February 7th. Liar Liar with Jim Carrey will be released March 24th. Jurassic Park: The Lost World will be released on Memorial Day. This will be a big year in terms of films for Universal. The follow on video sales should be good if the movies do well too. They are adopting a "blockbuster" strategy, but are utilizing some outside sources of financing to spread the risk. The reason for the strategy is the simple fact that big "blockbuster" films make the most money.

UNIVERSAL TELEVISION GROUP. Television EBITDA declined. Universal did recognize higher income from new international pay and free television agreements. However, deficit spending on network television production was considerably higher this year. Universal, including the Brillstein/Grey shows, now has 9 half-hour and 7 one-hour shows on network television compared with 2 half-hour and 7 one-hour shows this time last year. In December, Universal acquired Gannett Multimedia Entertainment unit which includes several syndicated talk shows. Thus far, the new programs have not been as successful as they hoped and they have yet to break into the top 20. To-date, Pat Fuller has been cancelled (a talk show). Spy Games, Feds, The Naked Truth for Brillstein/Grey, Just Shoot Me from Brillstein/Grey, and Politically Incorrect are ordered for mid-season. Shows that returned from the Fall of 1996 season are Coach, Sliders, New York Undercover, Hercules, Xena, Sally Jesse Raphael, Jerry Springer, News Radio, Jeff Foxworthy, and the Steve Harvey Show. They currently have orders for the Fall 1997 season for Law and Order and two new shows -- Roar and Time Cop. They expect the deficit spending in television to be there for awhile. As they have said all along, they are making every effort to deficit spend by having successful network shows. The deficit spending, however, is somewhat offset by international, particularly the deals they have done in Germany which is clustered together. In general, the television group has come further faster than they thought it would when they bought Universal. Some of the shows they have on the air they wish they were doing better but sometimes it takes awhile to build. They also have a number of new pickups that they are pleased about. The international rollout of their television library continues to be important. Sally Jesse Raphael is doing very well. It's household rating is about 3.9 and that is very respectable for that sector. The cable network business, depending on who you're dealing with, and particularly sci-fi is still a very good growth business.

STATUS ON VIACOM LAWSUIT. With regard to Viacom, they just submitted their post-trial briefs and they have until February 7th to respond to the other side's briefs at which point the judge has the opportunity should he wish to ask questions of either side and that would obviously take a little time. He may not ask any questions. Therefore, they expect the judge to render an opinion perhaps by the end of February, but they would be very surprised if it were later than the end of March.

UNIVERSAL MUSIC DIVISION. As they expected, music had an excellent quarter. Revenues were up over 40% and EBITDA rose 67% to $45 million despite continued investment in new artists and labels and continued international expansion. They benefitted from a considerably improved chart position this quarter. From October through December, Universal's share of the US music business was 13.7% compared to 8.7% a year ago. For two weeks during the quarter, Universal was the number one music company in the United States. This is the first time in over two decades that Universal ranked first in the music industry. While Innerscope, a label they purchased in February of last year, contributed heavily to their marketshare gain, their improvement was broadly based. They had 6 number one albums during the quarter including Geffen's Counting Crows and Nirvana, Innerscope's No Doubt and Bush, and Tupac Shakur and Snoop Doggy Dog. No Doubt's Tragic Kingdom has been the best selling album in the US for 7 straight weeks, from late December to mid-January. They do not expect they will hold this share for the full year ending in June, as their upcoming release schedule is not as strong as it was last quarter. But they are gratified that their investment in new artists and labels is working.

UNIVERSAL RECREATION DIVISION. There is only one remaining business line at Universal now that they have sold Putnam -- the recreation and other line now includes their recreation operation, retail stores, their Sega Gameworks joint venture, and their New Media ventures as well as publishing up to the time of the sale. The 5% decline in EBITDA this quarter was primarily due to publishing, which had several strong releases last year that they did not have this year. In addition, they had startup costs for Sega Gameworks which will open its first location-based entertainment center in Seattle in March. Theme park revenues and EBITDA rose significantly due to a higher attendance and per capita spending in their Hollywood and Orlando parks. In Hollywood, attendance rose 9% as did per capita spending. In Orlando, attendance and spending were up 7%. The two new attractions, Jurassic Park the ride in Hollywood and Terminator 2 3D in Florida were primarily responsible for the improved results.

CORPORATE ITEMS. Debt was $3.5 billion at the end of December and their book equity was $9.4 billion or approximately $25.5 per share. They purchased 1.8 million shares in the quarter at a cost of $66 million. Their total shares repurchased for calendar 1996 were 6.7 million shares at an average price of $33.76. The total cost was $225 million. They still have some authorization left to repurchase additional shares and will be opportunistic in their buybacks this year.

* A Fool conference call synopsis represents an effort to highlight the salient points of a conference call and should not be taken as an authoritative accounting or transcription of the entire event. Note: Statements made by a company other than historical information may constitute forward-looking statements for which the company can claim protection under the Safe Harbor Act. Please consult the company's filings with the SEC for information on risk factors which might cause actual results to differ materially from the information contained in these forward-looking statements.