Viacom Reports Double-Digit Revenue And Earnings Growth For Third Quarter 2013 - Revenues Up 14%; Adjusted Net Earnings Up 24%; Adjusted Diluted EPS Increased 33%

- Domestic Affiliate Revenues Up 28%; Domestic Advertising Revenues Rose 6%

- Company Doubles Stock Repurchase Program to $20 Billion

NEW YORK, Aug. 2, 2013 /PRNewswire-FirstCall/ --

Fiscal Year 2013 Results



























































Quarter Ended





Nine Months Ended





June 30,


B/(W)



June 30,


B/(W)









2013 vs.








2013 vs.

(in millions, except per share amounts)



2013


2012


2012


2013


2012


2012




















Revenues


$

3,693


$

3,241


14

%


$

10,142


$

10,524


(4)

%

Operating income



1,085



903


20




2,729



2,851


(4)


Net earnings from continuing operations attributable to Viacom



647



523


24




1,601



1,702


(6)


Adjusted net earnings from continuing operations attributable to Viacom*



635



512


24




1,577



1,638


(4)


Diluted EPS from continuing operations



1.32



0.99


33




3.20



3.13


2


Adjusted diluted EPS from continuing operations*


$

1.29


$

0.97


33

%


$

3.15


$

3.01


5

%




















* Adjusted measures referenced in this release are detailed in the Supplemental Disclosures at the end of this release.

Viacom Inc. (NASDAQ: VIAB, VIA) today reported financial results for the fiscal third quarter, which ended June 30, 2013.  Revenues increased 14% to $3.69 billion, reflecting higher revenues in both the Media Networks and Filmed Entertainment segments.  Operating income rose 20% to $1.09 billion, as higher Media Networks affiliate fees and advertising revenues more than offset the impact of increased Filmed Entertainment distribution costs for two tentpole releases in the quarter.  Adjusted net earnings from continuing operations attributable to Viacom increased 24% to $635 million, and adjusted diluted earnings per share from continuing operations were up 33% to $1.29 per diluted share. 

(Logo: http://photos.prnewswire.com/prnh/20110811/NY51392LOGO )

Viacom also announced today that the Board of Directors approved a significant expansion of the Class B stock repurchase program to $20 billion, from $10 billion.  Under this expansion, the Company anticipates continuing its ongoing quarterly pace of share repurchases.  In addition, over the next several months the Company will augment its overall buyback pace with purchases of an additional $2.0 billion of shares under the $20 billion program.  

Sumner M. Redstone, Executive Chairman of Viacom, said, "Viacom's strong results in the quarter once again demonstrated the value of our world-leading brands, global reach and devoted audiences.  With an improving economy, Viacom is poised for continued success."

Philippe Dauman, President and Chief Executive Officer of Viacom, said, "Viacom's aggressive investment in content, outstanding operational execution and fiscal discipline helped deliver a strong quarter with double-digit revenue and profit growth.  Domestic advertising revenue gains continued to accelerate at our Media Networks, as new, original programming drives improving ratings momentum.  Viacom is also expanding partnerships with traditional cable operators and new digital distributors to deliver solid affiliate revenue gains.  In a crowded summer season, Paramount's tentpoles – Star Trek Into Darkness and World War Z – achieved critical and box office success, and the studio has a promising slate remaining through calendar 2013 and beyond.

"The significant expansion of Viacom's stock repurchase program highlights the confidence we have in our business and the value of Viacom's stock.  We will continue to focus on maintaining a strong and flexible balance sheet, which supports robust investments in our brands and franchises as well as substantial capital return to shareholders."

Revenues



























































Quarter Ended





Nine Months Ended





June 30,


B/(W)



June 30,


B/(W)









2013 vs.








2013 vs.

(in millions)



2013


2012


2012


2013


2012


2012




















Media Networks


$

2,569


$

2,266


13

%


$

7,196


$

6,904


4

%

Filmed Entertainment



1,158



1,006


15




3,074



3,733


(18)


Eliminations



(34)



(31)


NM




(128)



(113)


NM 





















Total revenues


$

3,693


$

3,241


14

%


$

10,142


$

10,524


(4)

%




















NM - Not Meaningful









 

Quarterly revenues increased 14% over the prior year, to $3.69 billion.  Media Networks revenues rose 13% to $2.57 billion, driven by increases in affiliate fees and advertising revenues.  Affiliate revenues grew 28% domestically and rose 26% worldwide, due to the benefit of digital distribution arrangements and rate increases.  Excluding the impact of digital distribution arrangements, which are affected by the timing of available programming, the domestic affiliate revenue growth rate was in the high single digits.  Domestic advertising revenues rose 6%, due in part to increased ratings, and worldwide advertising revenues rose 5%.

Filmed Entertainment revenues rose 15% to $1.16 billion.  Worldwide theatrical revenues were $464 million, an increase of 64% from the prior year, reflecting substantial carryover revenues from releases in the March 2013 quarter, as well as stronger results from current quarter releases Star Trek Into Darkness, World War Z, and Pain and Gain, compared to titles released in the June 2012 quarter.  Worldwide home entertainment revenues declined 10%, largely due to lower carryover revenues. 

 

Operating Income (Loss)



























































Quarter Ended





Nine Months Ended





June 30,


B/(W)



June 30,


B/(W)









2013 vs.








2013 vs.

(in millions)



2013


2012


2012


2013


2012


2012




















Media Networks


$

1,158


$

934


24

%


$

3,061


$

2,956


4

%

Filmed Entertainment



17



46


(63)




(57)



130


NM 


Corporate expenses



(54)



(43)


(26)




(171)



(144)


(19)


Equity-based compensation



(35)



(35)


-




(95)



(92)


(3)


Eliminations



(1)



1


NM 




(9)



1


NM 








































Operating income


$

1,085


$

903


20

%


$

2,729


$

2,851


(4)

%




















NM - Not Meaningful











 

Quarterly operating income increased 20% to $1.09 billion in the quarter, reflecting higher overall revenues partially offset by increased operating expenses, primarily in the Filmed Entertainment segment. 

Quarterly adjusted net earnings from continuing operations attributable to Viacom were $635 million, an increase of 24%, principally driven by the increase in operating income.  Adjusted diluted earnings per share from continuing operations for the quarter were $1.29, a 33% improvement from the prior year's comparable quarter. 

Stock Repurchase Program

For the quarter ended June 30, 2013, Viacom repurchased 10.5 million shares under its stock repurchase program, for an aggregate purchase price of $700 million.  As of June 30, 2013, Viacom had 478 million shares of common stock outstanding.  As of August 1, 2013, Viacom had $12.4 billion remaining in its $20 billion stock repurchase program.    

Debt

At June 30, 2013, total debt outstanding, including capital lease obligations, was $8.91 billion, compared with $8.15 billion at September 30, 2012.  The Company's cash balances were $1.14 billion at June 30, 2013, an increase from $848 million at September 30, 2012.

About Viacom

Viacom is home to the world's premier entertainment brands that connect with audiences through compelling content across television, motion picture, online and mobile platforms in over 160 countries and territories. With media networks reaching approximately 700 million global subscribers, Viacom's leading brands include MTV, VH1, CMT, Logo, BET, CENTRIC, Nickelodeon, Nick Jr., TeenNick, Nicktoons, Nick at Nite, COMEDY CENTRAL, TV Land, SPIKE, Tr3s, Paramount Channel and VIVA. Paramount Pictures, America's oldest film studio and creator of many of the most beloved motion pictures, continues today as a major global producer and distributor of filmed entertainment. Viacom operates a large portfolio of branded digital media experiences, including many of the world's most popular properties for entertainment, community and casual online gaming.

For more information about Viacom and its businesses, visit www.viacom.com. Viacom may also use social media channels to communicate with its investors and the public about the company, its brands and other matters, and those communications could be deemed to be material information. Investors and others are encouraged to review posts on Viacom's company blog (blog.viacom.com), Twitter feed (www.twitter.com/viacom) and Facebook page (http://www.facebook.com/viacom).

Cautionary Statement Concerning Forward-Looking Statements

This news release contains both historical and forward-looking statements. All statements that are not statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements reflect the Company's current expectations concerning future results, objectives, plans and goals, and involve known and unknown risks, uncertainties and other factors that are difficult to predict and which may cause future results, performance or achievements to differ. These risks, uncertainties and other factors include, among others: the public acceptance of the Company's programs, motion pictures and other entertainment content on the various platforms on which they are distributed; technological developments and their effect in the Company's markets and on consumer behavior; competition for audiences and distribution; the impact of piracy; economic conditions generally, and in advertising and retail markets in particular; fluctuations in the Company's results due to the timing, mix and availability of the Company's motion pictures and other programming; changes in the Federal communications laws and regulations; other domestic and global economic, business, competitive and/or regulatory factors affecting the Company's businesses generally; and other factors described in the Company's news releases and filings with the Securities and Exchange Commission, including but not limited to its 2012 Annual Report on Form 10-K and reports on Form 10-Q and Form 8-K. The forward-looking statements included in this document are made only as of the date of this document, and the Company does not have any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances. If applicable, reconciliations for any non-GAAP financial information contained in this news release are included in this news release or available on the Company's website at http://www.viacom.com .


 


VIACOM INC.

CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)
















Quarter Ended


Nine Months Ended



June 30,


June 30,

(in millions, except per share amounts)


2013


2012


2013


2012














Revenues


$

3,693


$

3,241


$

10,142


$

10,524

Expenses:













       Operating



1,845



1,599



5,147



5,429

       Selling, general and administrative



705



682



2,091



2,066

       Depreciation and amortization



58



57



175



178














       Total expenses



2,608



2,338



7,413



7,673














Operating income



1,085



903



2,729



2,851

Interest expense, net



(114)



(104)



(334)



(312)

Equity in net earnings of investee companies



6



10



46



25

Loss on extinguishment of debt



-



-



-



(21)

Other items, net



(2)



(7)



(1)



(12)














Earnings from continuing operations before provision for income taxes



975



802



2,440



2,531














Provision for income taxes



(309)



(266)



(803)



(795)














Net earnings from continuing operations



666



536



1,637



1,736

Discontinued operations, net of tax



(4)



11



(10)



(371)














Net earnings (Viacom and noncontrolling interests)



662



547



1,627



1,365














Net earnings attributable to noncontrolling interests



(19)



(13)



(36)



(34)














Net earnings attributable to Viacom


$

643


$

534


$

1,591


$

1,331














Amounts attributable to Viacom:













      Net earnings from continuing operations


$

647


$

523


$

1,601


$

1,702

      Discontinued operations, net of tax



(4)



11



(10)



(371)














      Net earnings attributable to Viacom


$

643


$

534


$

1,591


$

1,331














Basic earnings per share attributable to Viacom:













      Continuing operations


$

1.34


$

1.00


$

3.25


$

3.17

      Discontinued operations



(0.01)



0.02



(0.02)



(0.69)

      Net earnings


$

1.33


$

1.02


$

3.23


$

2.48














Diluted earnings per share attributable to Viacom:













      Continuing operations


$

1.32


$

0.99


$

3.20


$

3.13

      Discontinued operations



(0.01)



0.02



(0.02)



(0.68)

      Net earnings


$

1.31


$

1.01


$

3.18


$

2.45














Weighted average number of common shares outstanding:













      Basic



482.6



523.7



492.1



537.3

      Diluted



491.9



530.4



500.5



544.1














Dividends declared per share of Class A and Class B common stock


$

0.30


$

0.275


$

0.85


$

0.775














 

VIACOM INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)




June 30,



September 30,




2013



2012

(in millions, except par value)














ASSETS







Current assets:







           Cash and cash equivalents


$

1,144


$

848

           Receivables, net



2,904



2,533

           Inventory, net



794



832

           Deferred tax assets, net



46



68

           Prepaid and other assets



520



572








                      Total current assets



5,408



4,853

Property and equipment, net



1,013



1,068

Inventory, net



3,921



4,205

Goodwill



11,061



11,045

Intangibles, net



293



328

Other assets



768



751








Total assets


$

22,464


$

22,250








LIABILITIES AND EQUITY














Current liabilities:







           Accounts payable


$

229


$

255

           Accrued expenses



951



943

           Participants' share and residuals



1,047



989

           Program rights obligations



554



569

           Deferred revenue



241



230

           Current portion of debt



20



18

           Other liabilities



727



826








                      Total current liabilities



3,769



3,830








Noncurrent portion of debt



8,893



8,131

Participants' share and residuals



423



533

Program rights obligations



476



642

Deferred tax liabilities, net



502



5

Other liabilities



1,416



1,491

Redeemable noncontrolling interest



173



179








Commitments and contingencies














Viacom stockholders' equity:







           Class A Common stock, par value $0.001, 375.0 authorized; 51.1 and 51.1







                outstanding, respectively



-



-

           Class B Common stock, par value $0.001, 5,000.0 authorized; 427.1 and 455.9







                outstanding, respectively



-



1

           Additional paid-in capital



9,229



8,916

           Treasury stock, 302.6 and 267.1 common shares held in treasury, respectively



(13,125)



(11,025)

           Retained earnings



10,986



9,820

           Accumulated other comprehensive loss



(276)



(264)








                      Total Viacom stockholders' equity



6,814



7,448








Noncontrolling interests



(2)



(9)








Total equity



6,812



7,439








Total liabilities and equity


$

22,464


$

22,250








 

SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION

The following tables reconcile our results for the quarter and nine months ended June 30, 2013 and 2012 to adjusted results that exclude the impact of certain items identified as affecting comparability ("Factors Affecting Comparability"), including the extinguishment of debt and discrete tax benefits.  We use consolidated adjusted operating income, adjusted net earnings from continuing operations attributable to Viacom and adjusted diluted earnings per share ("EPS") from continuing operations, as applicable, among other measures, to evaluate our actual operating performance and for planning and forecasting of future periods.  We believe that the adjusted results provide relevant and useful information for investors because they clarify our actual operating performance, make it easier to compare Viacom's results with those of other companies and allow investors to review performance in the same way as our management.  Since these are not measures of performance calculated in accordance with accounting principles generally accepted in the United States of America ("GAAP"), they should not be considered in isolation of, or as a substitute for, operating income, net earnings from continuing operations attributable to Viacom and diluted EPS as indicators of operating performance, and they may not be comparable to similarly titled measures employed by other companies. 

 


(in millions, except per share amounts)

























Quarter Ended


June 30, 2013












Diluted EPS






Pre-tax Earnings



Net Earnings from



from



Operating



from Continuing



Continuing Operations



Continuing



Income



Operations



Attributable to Viacom



Operations













Reported results

$

1,085


$

975


$

647


$

1.32

Factors Affecting Comparability:












              Discrete tax benefits(1)


-



-



(12)



(0.03)













Adjusted results

$

1,085


$

975


$

635


$

1.29






































Nine Months Ended


June 30, 2013












Diluted EPS






Pre-tax Earnings



Net Earnings from



from



Operating



from Continuing



Continuing Operations



Continuing



Income



Operations



Attributable to Viacom



Operations













Reported results

$

2,729


$

2,440


$

1,601


$

3.20

Factors Affecting Comparability:












              Discrete tax benefits(1)


-



-



(24)



(0.05)













Adjusted results

$

2,729


$

2,440


$

1,577


$

3.15


























Quarter Ended


June 30, 2012












Diluted EPS






Pre-tax Earnings



Net Earnings from



from



Operating



from Continuing



Continuing Operations



Continuing



Income



Operations



Attributable to Viacom



Operations













Reported results

$

903


$

802


$

523


$

0.99

Factors Affecting Comparability:












              Discrete tax benefits(1)


-



-



(11)



(0.02)













Adjusted results

$

903


$

802


$

512


$

0.97


























Nine Months Ended


June 30, 2012












Diluted EPS






Pre-tax Earnings



Net Earnings from



from



Operating



from Continuing



Continuing Operations



Continuing



Income



Operations



Attributable to Viacom



Operations













Reported results

$

2,851


$

2,531


$

1,702


$

3.13

Factors Affecting Comparability:












              Extinguishment of debt(2)


-



21



13



0.02

              Discrete tax benefits(1)


-



-



(77)



(0.14)













Adjusted results

$

2,851


$

2,552


$

1,638


$

3.01













 

(1)     Adjusted results for the quarter and nine months ended June 30, 2013 exclude $12 million and $24 million of discrete tax benefits, respectively. The benefits recognized principally reflect the release of tax reserves with respect to certain effectively settled tax positions.  Adjusted results for the quarter and nine months ended June 30, 2012 exclude $11 million and $77 million of discrete tax benefits, respectively. The benefits recognized in the quarter principally reflect the release of tax reserves with respect to certain effectively settled tax positions. The benefits recognized earlier in fiscal 2012 related to certain operating and capital loss carryforwards.

(2)     Adjusted results for the nine months ended June 30, 2012 exclude a pre-tax debt extinguishment loss of $21 million on the redemption of all $750 million of our outstanding 6.850% Senior Notes due 2055. The tax impact has been calculated using the rate applicable to this adjustment.

SOURCE Viacom Inc.



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