Attached files
| file | filename |
|---|---|
| EX-99.1 - PRESS RELEASE - Viacom Inc. | dex991.htm |
| 8-K - FORM 8-K - Viacom Inc. | d8k.htm |
| EX-99.2 - TRANSCRIPT OF EARNINGS TELECONFERENCE CALL OF VIACOM INC. - Viacom Inc. | dex992.htm |
    Results
for the Quarter and Fiscal Year Ended September 30, 2010 November 11,
2010 Exhibit 99.3 |
 2
Cautionary Statement Concerning Forward-Looking Statements
This
presentation
contains
both
historical
and
forward-looking
statements.
All
statements
which
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
or
goals,
and
involve
known
and
unknown
risks,
uncertainties
and
other
factors
that
are
difficult
to
predict
and
which
may
cause
actual
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;
the
impact
of
piracy;
competition
for
audiences
and
distribution;
fluctuations
in
the
Company’s
results
due
to
the
timing,
mix
and
availability
of
the
Company’s
motion
pictures;
economic
conditions
generally,
and
in
advertising
and
retail
markets
in
particular;
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
its
annual
report
on
Form
10-K
and
reports
on
Form
10-Q
and
Form
8-K.
The
forward-looking
statements
included
in
this
presentation
are
made
only
as
of
the
date
of
this
presentation,
and
the
Company
does
not
have
any
obligation
to
publicly
update
any
forward-looking
statements
to
reflect
subsequent
events
or
circumstances.
Reconciliations
for
any
non-GAAP
financial
information
contained
in
this
presentation
are
included
in
this
presentation
or
found
on
the
Company’s
website
at
www.viacom.com.
This
presentation
is
a
supplement
to,
and
should
be
read
in
conjunction
with,
Viacom’s
earnings
release
for
the
quarter
and
the
nine-month
fiscal
year
ended
September
30,
2010.
As
previously
announced,
Viacom
changed
its
fiscal
year
end
to
September
30
commencing
with
the
fiscal
year
2010.
Viacom
also
announced
that
it
plans
to
sell
Harmonix,
which
developed
the
Rock
Band
music
video
game
franchise.
Accordingly,
the
Company
reclassified
the
business
as
a
discontinued
operation
and
has
recast
its
results
from
previous
periods
to
reflect
this
change. |
 3
($ In Millions, except per share amounts)
Reported Results
Note:
n/m
–
not
meaningful
Quarter ended
Nine months ended
September 30,
September 30,
2010
B/(W) 2009
2010
B/(W) 2009
Revenues
3,330
$
5%
9,337
$
1%
Expenses
(2,387)
(5%)
(6,828)
2%
D&A
(72)
6%
(222)
5%
Equity-Based
Compensation
(34)
(13%)
(80)
(13%)
Restructuring
-
-
-
n/m
Operating Income
837
4%
2,207
16%
Net Earnings from
Continuing Operations
Attributable to Viacom
488
7%
1,175
23%
Diluted EPS from
Continuing Operations
0.80
7%
1.92
22%
Weighted Average
Diluted Shares
611.3
-
610.7
- |
 4
See
page
5
for
footnotes
and
pages
15
-
20
for
a
reconciliation
to
GAAP
results.
($ In Millions, except per share amounts)
Adjusted Results
Quarter ended
Nine months ended
September 30,
September 30,
2010
B/(W) 2009
2010
B/(W) 2009
Revenues
3,330
$
5%
9,337
$
1%
Expenses
(2,387)
(5%)
(6,828)
2%
D&A
(72)
6%
(222)
5%
Equity-Based Compensation
(34)
(13%)
(80)
(13%)
Adjusted Operating Income
837
4%
2,207
14%
Adjusted Net Earnings from
Continuing Operations
Attributable to Viacom
461
7%
1,148
20%
Adjusted Diluted EPS from
Continuing Operations
0.75
6%
1.88
20%
Weighted Average
Diluted Shares
611.3
-
610.7
-
(1)
(2)
(1)
(2) |
 5
Footnotes
1.
Adjusted
results
for
the
quarter
and
nine
months
ended
September
30,
2010
exclude
$27
million
of
discrete
tax
benefits
principally
related
to
the
disposition
of
certain
assets
($0.05
per
share
for
the
quarter
and
$0.04
per
share
for
the
nine
months).
2.
Adjusted
results
for
the
quarter
ended
September
30,
2009
exclude
an
$84
million
pre-tax
loss
on
the
early
extinguishment
of
a
portion
of
the
Company’s
5.75%
Senior
Notes
due
2011
($52
million
after-tax,
$0.08
per
share)
and
$74
million
of
discrete
tax
benefits,
the
majority
of
which
were
the
result
of
effectively
settled
audits
($0.12
per
share).
Adjusted
results
for
the
nine
months
ended
September
30,
2009
exclude
the
loss
on
the
early
extinguishment
of
the
Company’s
5.75%
Senior
Notes
due
2011
($0.09
per
share)
and
the
discrete
tax
benefits
($0.12
per
share)
noted
above,
and
$33
million
of
pre-tax
severance
expenses
($21mm
after-tax,
$0.03
per
share)
attributable
to
the
Media
Networks
and
Filmed
Entertainment
segments,
which
occurred
in
the
2nd
quarter
of
2009. |
   6
Free Cash Flow
($ In Millions)
1)
See Page 22 for information on the reduction in asset securitization and debt
extinguishment premium paid in 2009, the definitions of operating free cash
flow and free cash flow, and reconciliations to cash provided by operations.
Note:
n/m
–
not
meaningful
Quarter ended
Nine months ended
September 30,
September 30,
2010
B/(W) 2009
2010
B/(W) 2009
Operating Income
837
$
4%
2,207
$
16%
Depreciation & Amortization
72
(6%)
222
(5%)
Capital Expenditures
(59)
(69%)
(105)
(40%)
Cash Interest
(53)
(8%)
(270)
(1%)
Cash Taxes
(295)
n/m
(806)
n/m
Working Capital & Other
(191)
n/m
(216)
50%
Operating Free Cash Flow
(1)
311
$
(55%)
1,032
$
1%
Discontinued Operations, net
(6)
n/m
10
n/m
Reduction in
Asset Securitization
(1)
-
n/m
-
n/m
Debt Retirement Premium
(1)
-
n/m
-
n/m
Free Cash Flow
(1)
305
$
(43%)
1,042
$
59% |
 7
$750
$600
$193
$837
$250
$1,500
$500
$550
$1,750
$250
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
Debt & Cash
($ In Millions)
Note: Chart excludes capital leases and other obligations. Maturity dates in the
chart are on a fiscal year basis. At 9/30/10, we had a single $3.25 billion
credit facility due December 2010, which we terminated in October 2010 in
connection with entering into a new $2.0 billion credit facility. At 9/30/10,
no amounts were outstanding under the $3.25 billion facility.
Public Debt
Cash & Cash Equivalents
September 30, 2010
Bank Debt / Commercial Paper
0
$
Total Floating Rate Debt
0
$
5.75% Senior Notes due April 2011
193
4.375% Senior Notes due September 2014
597
4.25% Senior Notes due September 2015
250
6.25% Senior Notes due April 2016
1,496
6.125% Senior Notes due October 2017
497
5.625% Senior Notes due September 2019
554
6.875% Senior Debentures due April 2036
1,735
6.75% Senior Debentures due October 2037
248
6.85% Senior Notes due December 2055
750
Capital Leases and Other Obligations
432
Total Fixed Rate Debt
6,752
Total Debt
6,752
$
Cash & Cash Equivalents
837
$
Net Debt
5,915
$
Fiscal Year |
   8
Share Repurchases
(In Millions)
Note: Commenced repurchases under the $4 billion stock repurchase program on October
1, 2010. Quarter Ended
September 30, 2010
October 1 through
November 10, 2010
Cost of Repurchase
n/a
$162
Shares Repurchased
n/a
4.3 |
    SEGMENT
HIGHLIGHTS |
   10
Media Networks –
Revenues by Type
($ In Millions)
Quarter ended
Nine months ended
September 30,
September 30,
2010
B/(W) 2009
2010
B/(W) 2009
Advertising
1,169
$
7%
3,251
$
5%
Affiliate
799
10%
2,372
10%
Ancillary
160
1%
454
11%
Total
2,128
$
8%
6,077
$
7% |
   11
Media Networks –
Financial Results
($ In Millions)
Note:
n/m
–
not
meaningful
Quarter ended
Nine months ended
September 30,
September 30,
2010
B/(W) 2009
2010
B/(W) 2009
Revenues
2,128
$
8%
6,077
$
7%
Expenses
(1,207)
(7%)
(3,530)
(7%)
D&A
(48)
8%
(148)
2%
Adjusted Operating
Income
873
9%
2,399
9%
Equity-Based
Compensation
(11)
15%
(27)
(4%)
Restructuring
Charges
-
n/m
-
n/m
Operating Income
862
$
9%
2,372
$
10% |
   12
Filmed Entertainment –
Revenues by Type
($ In Millions)
Quarter ended
Nine months ended
September 30,
September 30,
2010
B/(W) 2009
2010
B/(W) 2009
Theatrical
372
$
3%
1,283
$
4%
Home Entertainment
406
(13%)
951
(30%)
TV License Fees
372
18%
938
-
Ancillary
81
4%
190
12%
Total
1,231
$
1%
3,362
$
(9%) |
 13
Filmed Entertainment –
Significant Theatrical Releases
Qtr ended September 30, 2010
Qtr ended September 30, 2009
The Last Airbender
G.I. Joe: The Rise of Cobra
Dinner for Schmucks
The Goods: Live Hard, Sell Hard |
   14
Filmed Entertainment –
Financial Results
($ In Millions)
Note:
n/m
–
not
meaningful
Quarter ended
Nine months ended
September 30,
September 30,
2010
B/(W) 2009
2010
B/(W) 2009
Revenues
1,231
$
1%
3,362
$
(9%)
Expenses
(1,157)
(3%)
(3,255)
11%
D&A
(22)
8%
(69)
8%
Adjusted Operating
Income
52
(29%)
38
n/m
Equity-Based
Compensation
(2)
50%
(5)
17%
Restructuring
Charges
-
n/m
-
n/m
Operating Income
50
$
(28%)
33
$
n/m |
    APPENDIX RECONCILIATIONS |
 16
Supplemental
Disclosures:
Non-GAAP Financial Information
Non-GAAP
measures,
including
consolidated
operating
free
cash
flow,
free
cash
flow
and
adjusted
results
that
exclude
restructuring
charges,
early
extinguishment
of
debt
and
discrete
tax
benefits,
are
relevant
and
useful
information
for
investors
because
they
clarify
the
Company's
actual
operating
performance,
make
it
easier
to
compare
the
Company's
results
with
those
of
other
companies
and
allow
investors
to
review
performance
in
the
same
way
as
the
Company's
management.
These
measures
are
not
calculated
in
accordance
with
GAAP.
They
should
not
be
considered
in
isolation
of,
or
as
a
substitute
for,
cash
flow
provided
by
operations,
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. |
  17
Supplemental Disclosures:
Non-GAAP Financial Information
($ In Millions)
Quarter ended September 30, 2010
Operating
Income
Pre-tax
Earnings from
Continuing
Operations
(1)
Net Earnings
from Continuing
Operations
Attributable to
Viacom
(2)
Diluted EPS
from
Continuing
Operations
Reported Results
837
$
724
$
488
$
0.80
$
Factors affecting
comparability:
Discrete Tax
Benefits
(5)
-
-
(27)
(0.05)
Adjusted Results
837
$
724
$
461
$
0.75
$
See page 20 for footnotes. |
 18
Supplemental Disclosures:
Non-GAAP Financial Information
($ In Millions)
Nine Months Ended September 30, 2010
Operating
Income
Pre-tax
Earnings from
Continuing
Operations
(1)
Net Earnings
from Continuing
Operations
Attributable to
Viacom
(2)
Diluted EPS
from
Continuing
Operations
Reported Results
2,207
$
1,812
$
1,175
$
1.92
$
Factors affecting
comparability:
Discrete Tax
Benefits
(5)
-
-
(27)
(0.04)
Adjusted Results
2,207
$
1,812
$
1,148
$
1.88
$
See page 20 for footnotes. |
 19
Supplemental Disclosures:
Non-GAAP Financial Information
($ In Millions)
Quarter ended September 30, 2009
Operating
Income
Pre-tax
Earnings from
Continuing
Operations
(1)
Net Earnings
from Continuing
Operations
Attributable to
Viacom
(2)
Diluted EPS
from
Continuing
Operations
Reported Results
801
$
596
$
454
$
0.75
$
Factors affecting
comparability:
Extinguishment
of Debt
(4)
-
84
52
0.08
Discrete Tax
Benefits
(5)
-
-
(74)
(0.12)
Adjusted Results
801
$
680
$
432
$
0.71
$
See page 20 for footnotes. |
  20
Supplemental Disclosures:
Non-GAAP Financial Information
($ In Millions)
Nine Months Ended September 30, 2009
Operating
Income
Pre-tax
Earnings from
Continuing
Operations
(1)
Net Earnings
from Continuing
Operations
Attributable to
Viacom
(2)
Diluted EPS
from
Continuing
Operations
Reported Results
1,904
$
1,391
$
954
$
1.57
$
Factors affecting
comparability:
Restructuring
Charges
(3)
33
33
21
0.03
Extinguishment
of Debt
(4)
-
84
52
0.09
Discrete Tax
Benefits
(5)
-
-
(74)
(0.12)
Adjusted Results
1,937
$
1,508
$
953
$
1.57
$
See page 20 for footnotes. |
 21
1.
Pre-tax earnings from continuing operations represent earnings before provision
for income taxes.
2.
The tax impact has been calculated using the rates applicable to
the adjustments
presented.
3.
For
the
nine
months
ended
September
30,
2009,
adjusted
results
exclude
$33
million
of
severance
expenses
attributable
to
the
Media
Networks
and
Filmed
Entertainment
segments, which occurred in the 2nd quarter of 2009.
4.
For the quarter and nine months ended September 30, 2009, adjusted results exclude
an $84 million pre-tax loss on the early extinguishment of a portion of
the Company’s 5.75% Senior Notes due 2011.
5.
For the quarter and nine months ended September 30, 2010, adjusted results exclude
$27 million of discrete tax benefits primarily related to the disposition of
certain assets. For the quarter and nine months ended September 30,
2009, adjusted results exclude $74 million of the discrete tax benefits, the
majority of which were the result of effectively settled audits.
Footnotes –
Pages 16 -
19 |
   22
Supplemental Disclosures:
Non-GAAP Financial Information
1)
The Company defines free cash flow as cash provided by operations minus capital
expenditures. Free cash flow is a non-GAAP measure. Management
believes free cash flow provides investors with an important perspective on the
Company’s liquidity, including ability to service debt and make investments in
our businesses. 2)
For comparison purposes, 2010 and 2009 operating free cash flow exclude discontinued
operations. 2009 operating free cash flow also excludes a loss on the early
extinguishment of a portion of the Company’s 5.75% Senior Notes due 2011
of $84 million and a scheduled reduction in the level of participation by a sponsor
in one of the Company’s asset securitization programs, which the Company
elected not to replace, of $175 million. The Company terminated its asset
securitization programs in April 2010.
3)
The Company defines operating free cash flow as cash provided by
operations minus capital expenditures plus (or
minus) uses (or sources) of cash related to its asset securitization program, the
early extinguishment of debt and discontinued operations.
Operating free cash flow is a non-GAAP measure. Management believes operating free cash
flow provides investors with an important perspective on the Company’s liquidity
from ongoing activities. Quarter ended
Nine months ended
September 30,
September 30,
2010
2009
2010
2009
Cash Provided By Operations
364
$
572
$
1,147
$
732
$
Capital Expenditures
(59)
(35)
(105)
(75)
Free Cash Flow
(1)
305
$
537
$
1,042
$
657
$
Discontinued Operations, net
6
70
(10)
106
Reduction in Asset Securitization
(2)
-
-
-
175
Debt Retirement Premium
(2)
-
84
-
84
Operating Free Cash Flow
(3)
311
$
691
$
1,032
$
1,022
$ |
 |