Q1 2014 Earnings Call Transcript

Transcript Call Date 01/30/2014

Operator: Good day everyone, and welcome everyone to the Viacom First Quarter 2014 Earnings Release Teleconference. Today's call is being recorded.

At this time, I would like to turn the call over to Senior Vice President of Investor Relations, Mr. Jim Bombassei. Please go ahead, sir.

James Bombassei - SVP, IR: Good morning, everyone, and thank you for taking the time to joining us for our earnings call for the December quarter. Joining me for today's discussion are Sumner Redstone, our Chairman; Philippe Dauman, our President and CEO; Tom Dooley, our Chief Operating Officer; and Wade Davis, our Chief Financial Officer.

Please note that in addition to our press release, we have slides and trending schedules containing supplemental information available on our website.

I want to refer you to Page 2 of the web presentation and remind you that certain statements made on this call are forward-looking statements that involve risks and uncertainties. These risks and uncertainties are discussed in more detail in our filings with the SEC. Today's remarks will focus on adjusted results, reconciliations for non-GAAP financial information discussed on this call can be found in our earnings release or on our website.

Now, I'll turn the call over to Sumner.

Sumner M. Redstone - Executive Chairman of the Board and Founder: Thanks, Jim. Good morning everyone and thank you for joining us. Viacom continued to deliver great audience experiences, strong returns for our shareholders, our leadership (has been) well-positioned for many, many years to come, and we are extremely excited about the future.

Now I will turn this call over to my good friend, Viacom's CEO, the wisest man I have ever met, my friend, Philippe Dauman.

Philippe Dauman - President and CEO: Thank you so much, Sumner. Good morning, everyone. Thanks for joining us to discuss the first quarter of our 2014 fiscal year.

Viacom turned in a solid performance in the December quarter. We delivered strong double-digit growth in both our quarterly earnings and operating income.

Our Media Networks achieved strong top and bottom line growth, thanks in part to continued rating strength at many of our networks, among them Nickelodeon, which regained its long-held perch as the top cable network among kids 2 to 11.

It was a great start to what we expect to be a strong fiscal year, in which we will continue to invest consistently in original content and connect with our audiences in a growing number of ways across platforms and geographies.

Let's take a quick look at Viacom's financial performance for the quarter. Tom and Wade will go into greater detail in a few moments.

Revenues were at $3.2 billion in the quarter, a decline of 4%, reflecting increased Media Networks revenues, which are more than offset by declines in Filmed Entertainment due to the number and timing of releases in the quarter.

Operating income increased to $960 million, up 20%, thanks to improved performance across the Company. Adjusted net earnings from continuing operations increased 19% to $547 million. Adjusted diluted earnings per share were up 32% to $1.20.

Viacom's balance sheet remained strong and the Company remains steadfast in its commitment to returning significant value to our shareholders, while continuing to invest in the growth of our business. We delivered about $1.1 billion in capital directly to shareholders in the quarter through share repurchases and dividend. This includes $850 million in share repurchases under our ongoing stock repurchase program.

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