Viacom Reports Record First Quarter 2001 Results

- Reported Revenues Increase 90% to a Record $5.75 Billion

- EBITDA Up 145% to a Record $1.15 Billion, Up 15% on a Pro Forma Basis

- Pro Forma Free Cash Flow Totals $648 Million, Up 20% on a

Per Share Basis



Apr 24, 2001, 01:00 ET from Viacom Inc.

    NEW YORK, April 24 /PRNewswire Interactive News Release/ -- Viacom Inc.
 (NYSE:   VIA and VIA.B) today reported record results for the first quarter
 ended March 31, 2001, led by gains in nearly every business unit including
 significant increases in its Cable Networks, Television and Entertainment
 segments.
     For the first quarter of 2001, Viacom's reported revenues rose 90% to
 $5.75 billion from $3.03 billion in the same quarter last year, and reported
 EBITDA (earnings before interest, taxes, depreciation and amortization)
 increased 145% to $1.15 billion, from $470 million in the first quarter of
 2000.
     Reported free cash flow for the first quarter of 2001 was $586 million, up
 169% from $218 million in the same quarter last year and after-tax cash flow
 of $691 million climbed 114% over after-tax cash flow of $323 million for the
 same quarter last year.  The Company considers free cash flow to be an
 important measure of performance because it reflects the resources available
 to the Company after interest, taxes and capital expenditures that can be used
 to invest in the business, acquire additional assets, strengthen the balance
 sheet and repurchase stock.
     Viacom's first quarter 2001 performance was led by the sharply higher
 results in the Cable Networks, Television and Entertainment segments.  Cable
 Networks reported EBITDA increased 53% to $359 million and Television reported
 EBITDA rose 168% to $315 million.  Cable Networks posted a 17% increase in pro
 forma EBITDA to $365 million, versus $312 million in the first quarter of
 2000.  Television pro forma EBITDA rose 14% to $315 million, versus
 $276 million in the same quarter last year.  The Entertainment segment
 reported and pro forma EBITDA increased 17% to $64 million, compared with
 $55 million in the first quarter of 2000.  Infinity outperformed the
 out-of-home market and also made major EBITDA contributions in the quarter,
 despite challenges created by the steep fall-off of advertising by Internet
 companies, which created an unusually robust advertising market during the
 first half of last year.
     "Viacom's results for the first quarter of 2001 highlight the Company's
 ability to deliver sustained growth and are another demonstration that the
 internal growth and acquisition strategies put into effect with the original
 acquisition of Viacom continue to pay off in rich rewards for stockholders,"
 said Sumner M. Redstone, Chairman and Chief Executive Officer of Viacom.  "The
 breadth of our high-growth, high-margin businesses, our leadership positions
 and strong brands enable us to produce superior short-term and long-term
 results, even while we continue to strengthen our balance sheet and enhance
 value for stockholders through our share repurchase programs."
     Mel Karmazin, President and Chief Operating Officer of Viacom, said, "We
 are pleased with our record first quarter financial results, particularly our
 ability to generate significant free cash flow growth at a rate well beyond
 any other company in our industry.  Other notable accomplishments in the
 quarter included the swift integration of the BET acquisition, the
 breakthrough programming successes of the CBS Network, double-digit
 advertising increases at MTV, VH1 and BET, the successful relaunch of the TNN
 cable network, the box-office strength of the Paramount film lineup and the
 acquisition of the outstanding shares of Infinity.  All these significant
 achievements will benefit the Company well into the future.
     "With our powerful and highly integrated media assets that are in the
 forefront of the highest growth sectors and a management team completely
 focused on generating superior returns in any environment," Mr. Karmazin
 added, "Viacom has all the attributes necessary to generate significant future
 growth for stockholders."
     On a pro forma basis, first quarter 2001 revenues of $5.77 billion
 increased 6%, compared with revenues of $5.44 billion for the first quarter of
 2000; and first quarter 2001 EBITDA rose 15% to $1.15 billion, versus EBITDA
 of $1.0 billion for the same year-earlier period.  The increase in EBITDA was
 driven by revenue growth coupled with cost savings attributable to the merger
 of Viacom with CBS and modest growth in operating costs.  Pro forma free cash
 flow per share for the first quarter of 2001 climbed 20% to $.36 per share, or
 $648 million, compared with pro forma free cash flow of $.30 per share, or
 $542 million, in the first quarter last year.  Pro forma after-tax cash flow
 for the first quarter of 2001 increased 8% to $753 million, or $.42 per share,
 compared with pro forma after-tax cash flow of $699 million, or $.38 per
 share, for the same year earlier period.
     Pro forma results reflect the Viacom/CBS merger, as well as other
 acquisitions and divestitures, including the acquisitions of BET and the
 minority interest of Infinity, as if they had occurred at the beginning of
 each period presented.
     Principally as a result of significantly higher amortization of goodwill
 resulting from the merger with CBS, Viacom reported a net loss before
 cumulative effect of change in accounting principle of $7 million, or zero
 cents per share, for the first quarter of 2001.  This compares with net
 earnings before cumulative effect of change in accounting principle of
 $68 million, or $.10 per share, in the first quarter of 2000.
 
     Business Outlook
     The Company expects second quarter pro forma EBITDA to grow in the
 mid-single digits, versus last year.  For the full year 2001, the Company
 believes its businesses are well positioned to dramatically outperform the
 industry and deliver 20% annual EBITDA growth to $6.2 billion.  Achieving this
 growth is dependent on several factors during the second half of the year.
 The most prominent factors are the results from the upcoming broadcast and
 cable upfront advertising markets, which the Company expects will show
 significant growth compared with the first half of the year, and the effect of
 labor conditions on the availability of programming for the new fall season.
 The Company believes the current downside risk resulting from these factors is
 5% of its full-year EBITDA target.
 
     Segment Results (First Quarter 2001 versus First Quarter 2000)
     The table below presents first quarter 2001 and 2000 Revenues and EBITDA
 on a reported and pro forma basis.
 
     First Quarter
     (dollars in             Reported                    Pro Forma
      millions)           2001      2000    B/(W)%    2001      2000    B/(W)%
 
     Revenues:
     Cable Networks      $982.4    $771.1     27%    $998.9    $970.6       3%
     Television         2,030.8     528.1     285   2,030.8   1,888.0        8
     Infinity             835.6        --     n/m     834.9     871.4      (4)
     Entertainment        595.2     522.6      14     595.2     522.6       14
     Video              1,307.9   1,211.1       8   1,307.9   1,211.1        8
     Publishing           121.9     112.8       8     121.9     112.8        8
     Intercompany
      eliminations      (121.6)   (119.9)     (1)   (121.6)   (141.1)       14
     Total Revenues    $5,752.2  $3,025.8     90%  $5,768.0  $5,435.4       6%
 
     EBITDA:
     Cable Networks      $359.4    $235.5     53%    $365.4    $312.4      17%
     Television           314.7     117.3     168     314.7     276.4       14
     Infinity             323.1        --     n/m     321.7     338.5      (5)
     Entertainment         63.8      54.7      17      63.8      54.7       17
     Video                160.5     150.3       7     160.5     150.3        7
     Publishing             2.2     (1.7)     n/m       2.2     (1.7)      n/m
     Segment Total      1,223.7     556.1     120   1,228.3   1,130.6        9
     Corporate
      expenses/
      eliminations       (51.3)    (86.5)      41    (51.3)    (99.6)       48
     Residual costs of
      discontinued
      operations         (23.5)        --     n/m    (23.5)    (31.5)       25
     Total EBITDA      $1,148.9    $469.6    145%  $1,153.5    $999.5      15%
 
     n/m - not meaningful
 
     Cable Networks (MTV Networks (MTVN) including MTV, VH1, Nickelodeon, Nick
 at Nite, TV Land,TNN: The National Network and CMT; BET; and Showtime Networks
 Inc.)
     Cable Networks pro forma EBITDA of $365 million increased 17%, on pro
 forma revenue growth of 3% to $999 million.  Higher pro forma revenues were
 led by double-digit revenue growth at MTV, VH1, BET, Showtime Networks and TV
 Land.  Pro forma EBITDA increases principally reflect higher cable affiliate
 and DBS revenues and modest growth in operating costs.  Subscriber growth
 continued in the quarter; Nickelodeon and TNN passed the 80 million-subscriber
 mark and VH1 now reaches over 76 million subscribers.  For the 16th
 consecutive quarter, MTV was the No. 1 cable network for the core 12-24 year
 old audience while also experiencing four consecutive quarters of growth for
 12-34 year-olds.  MTV kicked off 2001 with a 20% ratings increase among the
 12-34 year-old audience compared to first quarter 2000.  Showtime
 subscriptions increased 26% over the prior year by approximately 6.2 million
 to 29.6 million subscriptions at March 31, 2001.
     The Company completed its acquisition of BET on January 23, 2001 for
 approximately $3 billion consisting principally of Viacom Class B Common Stock
 and the assumption of debt.  Pro forma results assume the acquisition of the
 CBS Cable Networks, TNN and CMT, and the acquisition of BET, had occurred on
 January 1, 2000.
 
     Television (CBS and UPN Television Networks and Stations; Television
 Production and Syndication)
     Television segment's pro forma revenues increased 8% to $2.03 billion and
 pro forma EBITDA increased 14% to $315 million, led by the CBS Network, which
 achieved double-digit revenue growth in primetime with increased ratings and
 pricing.  Television's revenue growth was driven by strong first quarter
 programming on the CBS Network, including "Super Bowl XXXV," "Survivor: The
 Australian Outback," "CSI: Crime Scene Investigation," the continued success
 of its Monday night line-up and the timing of the National Semifinals of the
 "NCAA Men's Basketball Championship Tournament."  In the quarter, the CBS
 Network moved into the No. 1 spot in households and viewers.  Television
 revenues also increased reflecting strong television production and
 syndication of several successful shows, including "Frasier," "Judge Judy" and
 "7th Heaven."  United Paramount Network also continues to deliver improved
 results.
     Pro forma results assume that the CBS merger and the acquisition of the
 remaining 50% interest of UPN had occurred on January 1, 2000.  Included in
 the pro forma results for first quarter 2000 are losses of approximately
 $31 million for iWon.com, which was previously a minority-owned, consolidated
 subsidiary.  In 2001, iWon.com is accounted for under the equity method.
 
     Infinity (Radio Stations, Outdoor Advertising Properties)
     Infinity's pro forma revenues of $835 million and pro forma EBITDA of
 $322 million decreased 4% and 5%, respectively, reflecting difficult
 comparisons with the first quarter of 2000, which benefited from an
 exceptionally strong advertising environment including very strong demand from
 Internet companies.  Operating expenses, as a percentage of revenues, were
 essentially flat compared with the prior year.  Infinity continues to maintain
 its strong margins and has gained market share by outpacing the out-of-home
 market.
     On February 21, 2001, the Company completed its merger with Infinity,
 acquiring all of the issued and outstanding shares of Infinity common stock
 that it did not already own, or approximately 36%, for a total purchase price
 of approximately $13.4 billion.  Pro forma results assume the acquisition of
 Infinity had occurred on January 1, 2000 and also assume the completion of all
 acquisitions and related divestitures of radio and outdoor properties by
 Infinity had occurred at the beginning of each period presented.
 
     Entertainment (Paramount Pictures, Famous Players, Famous Music Publishing
 and Paramount Parks)
     Entertainment's revenues of $595 million increased 14% and EBITDA of
 $64 million increased 17% principally driven by higher domestic theatrical,
 foreign home video and network features revenues.  Domestic theatrical
 revenues include Paramount's successful box office releases of "Save the Last
 Dance," "Down to Earth" and "Enemy at the Gates" as well as the continuing
 contributions from "What Women Want."  Higher foreign home video revenues were
 led by continuing contributions from the successful international release of
 "Mission: Impossible 2," while higher features network revenues include
 contributions from "Deep Impact" and "The Truman Show."  Theaters' EBITDA,
 benefiting from lower overhead, increased for the first quarter of 2001
 despite flat attendance.
 
     Video (Blockbuster)
     Video revenues increased 8% to $1.31 billion primarily driven by the
 increase in the number of company-operated stores and higher worldwide same
 store sales.  Worldwide same store sales, including rental and retail product,
 increased 5.3%, and worldwide same store rental revenues increased 6.6%.
 Rental revenues increased 9% over the comparable prior year's quarter driven
 by significant growth in DVD rental activity.  EBITDA increased 7% to
 $161 million.  Blockbuster ended the first quarter of 2001 with 7,723
 company-owned and franchise stores, a net increase of 475 stores over the
 first quarter of 2000 of which 29 company-owned stores were added in the first
 quarter 2001.  Viacom owns approximately 82% of Blockbuster (NYSE:   BBI).
 
     Publishing (Simon & Schuster)
     Publishing reported higher revenues of $122 million, an increase of 8%,
 and EBITDA of $2 million, an increase of $4 million, principally due to
 increased sales in the Pocket Books division.  Publishing's best-selling
 titles in the first quarter included "Dreamcatcher" by Stephen King, "Before I
 Say Goodbye" by Mary Higgins Clark, "End of the Rainbow" by V.C. Andrews and
 "An Hour Before Daylight" by Jimmy Carter.
 
     Corporate Expenses/Eliminations
     Pro forma corporate expenses, excluding intersegment profit eliminations,
 decreased 46% to $24 million.  Included in the reported corporate
 expenses/eliminations of $51 million for the first quarter of 2001 are
 intersegment profit eliminations of $27 million.
 
     Other Matters
     On February 1, 2001, the Company announced a new $2.0 billion stock
 repurchase program and through April 20, 2001, had repurchased approximately
 4.7 million shares of the Company's Class B common stock for approximately
 $225 million.
     The United States Court of Appeals, DC Circuit, granted the Company's
 motion for interim relief from the FCC's national broadcast station ownership
 cap, which prohibits a company from owning stations that reach more than 35%
 of the nation's television households.  As a result of the favorable ruling,
 the Company will not be required to divest broadcast stations in excess of
 that cap, pending the outcome of further proceedings in that court.
     On April 19, 2001, The Federal Communications Commission voted to
 eliminate the dual network rule and will now permit a "Big Four" network to
 own UPN and/or The WB.  The Company is now free to maintain ownership of CBS
 and UPN.
     Viacom is the No. 1 platform in the world for advertisers, with preeminent
 positions in broadcast and cable television, radio, outdoor advertising, and
 online.  With programming that appeals to audiences in every demographic
 category across virtually all media, the company is a leader in the creation,
 promotion, and distribution of entertainment, news, sports, and music.
 Viacom's well-known brands include CBS, MTV, Nickelodeon, VH1, BET, Paramount
 Pictures, Infinity, UPN, TNN: The National Network, CMT, Showtime, Blockbuster
 and Simon & Schuster.  More information about Viacom and its businesses is
 available at http://www.viacom.com.
 
     Cautionary Statement Concerning Forward-looking Statements
 This document contains both historical and forward-looking statements.  All
 statements, including Business Outlook, other than statements of historical
 fact are, or may be deemed to be, forward-looking statements within the
 meaning of section 27A of the Securities Act of 1933 and section 21E of the
 Securities Exchange Act of 1934.  These forward-looking statements are not
 based on historical facts, but rather reflect the Company's current
 expectations concerning future results and events.  Similarly, statements that
 describe our objectives, plans or goals are or may be forward-looking
 statements.  These forward-looking statements involve known and unknown risks,
 uncertainties and other factors which may cause the actual results,
 performance or achievements of the Company to be different from any future
 results, performance and achievements expressed or implied by these
 statements.  The following important factors, among others, could affect
 future results, causing these results to differ materially from those
 expressed in our forward-looking statements: advertising market conditions,
 particularly in the upfront market; changes in the public acceptance of the
 Company's programming; labor conditions in the entertainment business; changes
 in technology and its effect on competition in the Company's markets; changes
 in the Federal Communications Laws and Regulations and the outcome of related
 court cases; and other economic, business, competitive and/or regulatory
 factors affecting the Company's businesses generally.  The forward-looking
 statements included in this document are made only as of the date of this
 document and under section 27A of the Securities Act and section 21E of the
 Exchange Act, we do not have any obligation to publicly update any
 forward-looking statements to reflect subsequent events or circumstances.
 
                          VIACOM INC. AND SUBSIDIARIES
                       CONDENSED STATEMENTS OF OPERATIONS
      (Unaudited; all amounts, except per share amounts, are in millions)
 
                                                       Three months ended
                                                             March 31,
                                                      2001            2000
 
     Revenues                                        $5,752.2       $3,025.8
 
     Operating income                                  $403.7         $240.4
 
     Other income (expense):
      Interest expense, net                           (245.5)        (113.0)
      Other items, net                                  (9.8)            1.7
     Earnings before income taxes                       148.4          129.1
 
      Provision for income taxes                      (123.5)         (58.1)
      Equity in loss of affiliated companies,
       net of tax                                      (27.1)          (6.1)
      Minority interest, net of tax                     (5.1)            3.1
     Net earnings (loss) before cumulative effect
      of change in accounting principle                 (7.3)           68.0
      Cumulative effect of change in accounting
        principle, net of tax                              --        (452.3)
     Net loss                                          $(7.3)       $(384.3)
 
     Earnings (loss) per common share:
     Basic:
      Net earnings (loss) before cumulative effect
       of change in accounting principle                  $--          $0.10
     Net loss                                             $--         $(0.55)
     Diluted:
      Net earnings (loss) before cumulative
       effect of change in accounting principle           $--          $0.10
     Net loss                                             $--         $(0.54)
 
     Weighted average number of common shares:
      Basic                                           1,628.4          694.8
      Diluted                                         1,628.4          711.5
 
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SOURCE Viacom Inc.
    NEW YORK, April 24 /PRNewswire Interactive News Release/ -- Viacom Inc.
 (NYSE:   VIA and VIA.B) today reported record results for the first quarter
 ended March 31, 2001, led by gains in nearly every business unit including
 significant increases in its Cable Networks, Television and Entertainment
 segments.
     For the first quarter of 2001, Viacom's reported revenues rose 90% to
 $5.75 billion from $3.03 billion in the same quarter last year, and reported
 EBITDA (earnings before interest, taxes, depreciation and amortization)
 increased 145% to $1.15 billion, from $470 million in the first quarter of
 2000.
     Reported free cash flow for the first quarter of 2001 was $586 million, up
 169% from $218 million in the same quarter last year and after-tax cash flow
 of $691 million climbed 114% over after-tax cash flow of $323 million for the
 same quarter last year.  The Company considers free cash flow to be an
 important measure of performance because it reflects the resources available
 to the Company after interest, taxes and capital expenditures that can be used
 to invest in the business, acquire additional assets, strengthen the balance
 sheet and repurchase stock.
     Viacom's first quarter 2001 performance was led by the sharply higher
 results in the Cable Networks, Television and Entertainment segments.  Cable
 Networks reported EBITDA increased 53% to $359 million and Television reported
 EBITDA rose 168% to $315 million.  Cable Networks posted a 17% increase in pro
 forma EBITDA to $365 million, versus $312 million in the first quarter of
 2000.  Television pro forma EBITDA rose 14% to $315 million, versus
 $276 million in the same quarter last year.  The Entertainment segment
 reported and pro forma EBITDA increased 17% to $64 million, compared with
 $55 million in the first quarter of 2000.  Infinity outperformed the
 out-of-home market and also made major EBITDA contributions in the quarter,
 despite challenges created by the steep fall-off of advertising by Internet
 companies, which created an unusually robust advertising market during the
 first half of last year.
     "Viacom's results for the first quarter of 2001 highlight the Company's
 ability to deliver sustained growth and are another demonstration that the
 internal growth and acquisition strategies put into effect with the original
 acquisition of Viacom continue to pay off in rich rewards for stockholders,"
 said Sumner M. Redstone, Chairman and Chief Executive Officer of Viacom.  "The
 breadth of our high-growth, high-margin businesses, our leadership positions
 and strong brands enable us to produce superior short-term and long-term
 results, even while we continue to strengthen our balance sheet and enhance
 value for stockholders through our share repurchase programs."
     Mel Karmazin, President and Chief Operating Officer of Viacom, said, "We
 are pleased with our record first quarter financial results, particularly our
 ability to generate significant free cash flow growth at a rate well beyond
 any other company in our industry.  Other notable accomplishments in the
 quarter included the swift integration of the BET acquisition, the
 breakthrough programming successes of the CBS Network, double-digit
 advertising increases at MTV, VH1 and BET, the successful relaunch of the TNN
 cable network, the box-office strength of the Paramount film lineup and the
 acquisition of the outstanding shares of Infinity.  All these significant
 achievements will benefit the Company well into the future.
     "With our powerful and highly integrated media assets that are in the
 forefront of the highest growth sectors and a management team completely
 focused on generating superior returns in any environment," Mr. Karmazin
 added, "Viacom has all the attributes necessary to generate significant future
 growth for stockholders."
     On a pro forma basis, first quarter 2001 revenues of $5.77 billion
 increased 6%, compared with revenues of $5.44 billion for the first quarter of
 2000; and first quarter 2001 EBITDA rose 15% to $1.15 billion, versus EBITDA
 of $1.0 billion for the same year-earlier period.  The increase in EBITDA was
 driven by revenue growth coupled with cost savings attributable to the merger
 of Viacom with CBS and modest growth in operating costs.  Pro forma free cash
 flow per share for the first quarter of 2001 climbed 20% to $.36 per share, or
 $648 million, compared with pro forma free cash flow of $.30 per share, or
 $542 million, in the first quarter last year.  Pro forma after-tax cash flow
 for the first quarter of 2001 increased 8% to $753 million, or $.42 per share,
 compared with pro forma after-tax cash flow of $699 million, or $.38 per
 share, for the same year earlier period.
     Pro forma results reflect the Viacom/CBS merger, as well as other
 acquisitions and divestitures, including the acquisitions of BET and the
 minority interest of Infinity, as if they had occurred at the beginning of
 each period presented.
     Principally as a result of significantly higher amortization of goodwill
 resulting from the merger with CBS, Viacom reported a net loss before
 cumulative effect of change in accounting principle of $7 million, or zero
 cents per share, for the first quarter of 2001.  This compares with net
 earnings before cumulative effect of change in accounting principle of
 $68 million, or $.10 per share, in the first quarter of 2000.
 
     Business Outlook
     The Company expects second quarter pro forma EBITDA to grow in the
 mid-single digits, versus last year.  For the full year 2001, the Company
 believes its businesses are well positioned to dramatically outperform the
 industry and deliver 20% annual EBITDA growth to $6.2 billion.  Achieving this
 growth is dependent on several factors during the second half of the year.
 The most prominent factors are the results from the upcoming broadcast and
 cable upfront advertising markets, which the Company expects will show
 significant growth compared with the first half of the year, and the effect of
 labor conditions on the availability of programming for the new fall season.
 The Company believes the current downside risk resulting from these factors is
 5% of its full-year EBITDA target.
 
     Segment Results (First Quarter 2001 versus First Quarter 2000)
     The table below presents first quarter 2001 and 2000 Revenues and EBITDA
 on a reported and pro forma basis.
 
     First Quarter
     (dollars in             Reported                    Pro Forma
      millions)           2001      2000    B/(W)%    2001      2000    B/(W)%
 
     Revenues:
     Cable Networks      $982.4    $771.1     27%    $998.9    $970.6       3%
     Television         2,030.8     528.1     285   2,030.8   1,888.0        8
     Infinity             835.6        --     n/m     834.9     871.4      (4)
     Entertainment        595.2     522.6      14     595.2     522.6       14
     Video              1,307.9   1,211.1       8   1,307.9   1,211.1        8
     Publishing           121.9     112.8       8     121.9     112.8        8
     Intercompany
      eliminations      (121.6)   (119.9)     (1)   (121.6)   (141.1)       14
     Total Revenues    $5,752.2  $3,025.8     90%  $5,768.0  $5,435.4       6%
 
     EBITDA:
     Cable Networks      $359.4    $235.5     53%    $365.4    $312.4      17%
     Television           314.7     117.3     168     314.7     276.4       14
     Infinity             323.1        --     n/m     321.7     338.5      (5)
     Entertainment         63.8      54.7      17      63.8      54.7       17
     Video                160.5     150.3       7     160.5     150.3        7
     Publishing             2.2     (1.7)     n/m       2.2     (1.7)      n/m
     Segment Total      1,223.7     556.1     120   1,228.3   1,130.6        9
     Corporate
      expenses/
      eliminations       (51.3)    (86.5)      41    (51.3)    (99.6)       48
     Residual costs of
      discontinued
      operations         (23.5)        --     n/m    (23.5)    (31.5)       25
     Total EBITDA      $1,148.9    $469.6    145%  $1,153.5    $999.5      15%
 
     n/m - not meaningful
 
     Cable Networks (MTV Networks (MTVN) including MTV, VH1, Nickelodeon, Nick
 at Nite, TV Land,TNN: The National Network and CMT; BET; and Showtime Networks
 Inc.)
     Cable Networks pro forma EBITDA of $365 million increased 17%, on pro
 forma revenue growth of 3% to $999 million.  Higher pro forma revenues were
 led by double-digit revenue growth at MTV, VH1, BET, Showtime Networks and TV
 Land.  Pro forma EBITDA increases principally reflect higher cable affiliate
 and DBS revenues and modest growth in operating costs.  Subscriber growth
 continued in the quarter; Nickelodeon and TNN passed the 80 million-subscriber
 mark and VH1 now reaches over 76 million subscribers.  For the 16th
 consecutive quarter, MTV was the No. 1 cable network for the core 12-24 year
 old audience while also experiencing four consecutive quarters of growth for
 12-34 year-olds.  MTV kicked off 2001 with a 20% ratings increase among the
 12-34 year-old audience compared to first quarter 2000.  Showtime
 subscriptions increased 26% over the prior year by approximately 6.2 million
 to 29.6 million subscriptions at March 31, 2001.
     The Company completed its acquisition of BET on January 23, 2001 for
 approximately $3 billion consisting principally of Viacom Class B Common Stock
 and the assumption of debt.  Pro forma results assume the acquisition of the
 CBS Cable Networks, TNN and CMT, and the acquisition of BET, had occurred on
 January 1, 2000.
 
     Television (CBS and UPN Television Networks and Stations; Television
 Production and Syndication)
     Television segment's pro forma revenues increased 8% to $2.03 billion and
 pro forma EBITDA increased 14% to $315 million, led by the CBS Network, which
 achieved double-digit revenue growth in primetime with increased ratings and
 pricing.  Television's revenue growth was driven by strong first quarter
 programming on the CBS Network, including "Super Bowl XXXV," "Survivor: The
 Australian Outback," "CSI: Crime Scene Investigation," the continued success
 of its Monday night line-up and the timing of the National Semifinals of the
 "NCAA Men's Basketball Championship Tournament."  In the quarter, the CBS
 Network moved into the No. 1 spot in households and viewers.  Television
 revenues also increased reflecting strong television production and
 syndication of several successful shows, including "Frasier," "Judge Judy" and
 "7th Heaven."  United Paramount Network also continues to deliver improved
 results.
     Pro forma results assume that the CBS merger and the acquisition of the
 remaining 50% interest of UPN had occurred on January 1, 2000.  Included in
 the pro forma results for first quarter 2000 are losses of approximately
 $31 million for iWon.com, which was previously a minority-owned, consolidated
 subsidiary.  In 2001, iWon.com is accounted for under the equity method.
 
     Infinity (Radio Stations, Outdoor Advertising Properties)
     Infinity's pro forma revenues of $835 million and pro forma EBITDA of
 $322 million decreased 4% and 5%, respectively, reflecting difficult
 comparisons with the first quarter of 2000, which benefited from an
 exceptionally strong advertising environment including very strong demand from
 Internet companies.  Operating expenses, as a percentage of revenues, were
 essentially flat compared with the prior year.  Infinity continues to maintain
 its strong margins and has gained market share by outpacing the out-of-home
 market.
     On February 21, 2001, the Company completed its merger with Infinity,
 acquiring all of the issued and outstanding shares of Infinity common stock
 that it did not already own, or approximately 36%, for a total purchase price
 of approximately $13.4 billion.  Pro forma results assume the acquisition of
 Infinity had occurred on January 1, 2000 and also assume the completion of all
 acquisitions and related divestitures of radio and outdoor properties by
 Infinity had occurred at the beginning of each period presented.
 
     Entertainment (Paramount Pictures, Famous Players, Famous Music Publishing
 and Paramount Parks)
     Entertainment's revenues of $595 million increased 14% and EBITDA of
 $64 million increased 17% principally driven by higher domestic theatrical,
 foreign home video and network features revenues.  Domestic theatrical
 revenues include Paramount's successful box office releases of "Save the Last
 Dance," "Down to Earth" and "Enemy at the Gates" as well as the continuing
 contributions from "What Women Want."  Higher foreign home video revenues were
 led by continuing contributions from the successful international release of
 "Mission: Impossible 2," while higher features network revenues include
 contributions from "Deep Impact" and "The Truman Show."  Theaters' EBITDA,
 benefiting from lower overhead, increased for the first quarter of 2001
 despite flat attendance.
 
     Video (Blockbuster)
     Video revenues increased 8% to $1.31 billion primarily driven by the
 increase in the number of company-operated stores and higher worldwide same
 store sales.  Worldwide same store sales, including rental and retail product,
 increased 5.3%, and worldwide same store rental revenues increased 6.6%.
 Rental revenues increased 9% over the comparable prior year's quarter driven
 by significant growth in DVD rental activity.  EBITDA increased 7% to
 $161 million.  Blockbuster ended the first quarter of 2001 with 7,723
 company-owned and franchise stores, a net increase of 475 stores over the
 first quarter of 2000 of which 29 company-owned stores were added in the first
 quarter 2001.  Viacom owns approximately 82% of Blockbuster (NYSE:   BBI).
 
     Publishing (Simon & Schuster)
     Publishing reported higher revenues of $122 million, an increase of 8%,
 and EBITDA of $2 million, an increase of $4 million, principally due to
 increased sales in the Pocket Books division.  Publishing's best-selling
 titles in the first quarter included "Dreamcatcher" by Stephen King, "Before I
 Say Goodbye" by Mary Higgins Clark, "End of the Rainbow" by V.C. Andrews and
 "An Hour Before Daylight" by Jimmy Carter.
 
     Corporate Expenses/Eliminations
     Pro forma corporate expenses, excluding intersegment profit eliminations,
 decreased 46% to $24 million.  Included in the reported corporate
 expenses/eliminations of $51 million for the first quarter of 2001 are
 intersegment profit eliminations of $27 million.
 
     Other Matters
     On February 1, 2001, the Company announced a new $2.0 billion stock
 repurchase program and through April 20, 2001, had repurchased approximately
 4.7 million shares of the Company's Class B common stock for approximately
 $225 million.
     The United States Court of Appeals, DC Circuit, granted the Company's
 motion for interim relief from the FCC's national broadcast station ownership
 cap, which prohibits a company from owning stations that reach more than 35%
 of the nation's television households.  As a result of the favorable ruling,
 the Company will not be required to divest broadcast stations in excess of
 that cap, pending the outcome of further proceedings in that court.
     On April 19, 2001, The Federal Communications Commission voted to
 eliminate the dual network rule and will now permit a "Big Four" network to
 own UPN and/or The WB.  The Company is now free to maintain ownership of CBS
 and UPN.
     Viacom is the No. 1 platform in the world for advertisers, with preeminent
 positions in broadcast and cable television, radio, outdoor advertising, and
 online.  With programming that appeals to audiences in every demographic
 category across virtually all media, the company is a leader in the creation,
 promotion, and distribution of entertainment, news, sports, and music.
 Viacom's well-known brands include CBS, MTV, Nickelodeon, VH1, BET, Paramount
 Pictures, Infinity, UPN, TNN: The National Network, CMT, Showtime, Blockbuster
 and Simon & Schuster.  More information about Viacom and its businesses is
 available at http://www.viacom.com.
 
     Cautionary Statement Concerning Forward-looking Statements
 This document contains both historical and forward-looking statements.  All
 statements, including Business Outlook, other than statements of historical
 fact are, or may be deemed to be, forward-looking statements within the
 meaning of section 27A of the Securities Act of 1933 and section 21E of the
 Securities Exchange Act of 1934.  These forward-looking statements are not
 based on historical facts, but rather reflect the Company's current
 expectations concerning future results and events.  Similarly, statements that
 describe our objectives, plans or goals are or may be forward-looking
 statements.  These forward-looking statements involve known and unknown risks,
 uncertainties and other factors which may cause the actual results,
 performance or achievements of the Company to be different from any future
 results, performance and achievements expressed or implied by these
 statements.  The following important factors, among others, could affect
 future results, causing these results to differ materially from those
 expressed in our forward-looking statements: advertising market conditions,
 particularly in the upfront market; changes in the public acceptance of the
 Company's programming; labor conditions in the entertainment business; changes
 in technology and its effect on competition in the Company's markets; changes
 in the Federal Communications Laws and Regulations and the outcome of related
 court cases; and other economic, business, competitive and/or regulatory
 factors affecting the Company's businesses generally.  The forward-looking
 statements included in this document are made only as of the date of this
 document and under section 27A of the Securities Act and section 21E of the
 Exchange Act, we do not have any obligation to publicly update any
 forward-looking statements to reflect subsequent events or circumstances.
 
                          VIACOM INC. AND SUBSIDIARIES
                       CONDENSED STATEMENTS OF OPERATIONS
      (Unaudited; all amounts, except per share amounts, are in millions)
 
                                                       Three months ended
                                                             March 31,
                                                      2001            2000
 
     Revenues                                        $5,752.2       $3,025.8
 
     Operating income                                  $403.7         $240.4
 
     Other income (expense):
      Interest expense, net                           (245.5)        (113.0)
      Other items, net                                  (9.8)            1.7
     Earnings before income taxes                       148.4          129.1
 
      Provision for income taxes                      (123.5)         (58.1)
      Equity in loss of affiliated companies,
       net of tax                                      (27.1)          (6.1)
      Minority interest, net of tax                     (5.1)            3.1
     Net earnings (loss) before cumulative effect
      of change in accounting principle                 (7.3)           68.0
      Cumulative effect of change in accounting
        principle, net of tax                              --        (452.3)
     Net loss                                          $(7.3)       $(384.3)
 
     Earnings (loss) per common share:
     Basic:
      Net earnings (loss) before cumulative effect
       of change in accounting principle                  $--          $0.10
     Net loss                                             $--         $(0.55)
     Diluted:
      Net earnings (loss) before cumulative
       effect of change in accounting principle           $--          $0.10
     Net loss                                             $--         $(0.54)
 
     Weighted average number of common shares:
      Basic                                           1,628.4          694.8
      Diluted                                         1,628.4          711.5
 
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 SOURCE  Viacom Inc.