Company to Recognize Pre-Tax Charge of Approximately $785 Million in
Quarter Ended March 31; Annual Cost Savings Will Total Approximately
$350 Million
NEW YORK--(BUSINESS WIRE)--
Viacom Inc. (NASDAQ:VIAB, VIA) today announced the elements of its
strategic realignment, including initiatives designed to promote greater
cross-brand collaboration, focus on new growth areas, and improve
operational efficiency and financial performance.
Following a company-wide review across its worldwide Media Networks,
Filmed Entertainment operations and corporate functions, Viacom is
implementing significant strategic and operational improvements,
including reorganizing three of its domestic network groups into two new
organizations. The new structure realigns sales, marketing, creative and
support functions, increases efficiencies in program and product
development, enhances opportunities to share expertise, and promotes
greater cross-marketing and cross channel programming activity. The
Company is also reallocating resources to expand its capabilities in
critical business areas including data analysis, technology development
and consumer insights, reflecting the rapidly changing media
marketplace, shifting consumer behavior and evolving measurement
practices.
President and CEO Philippe Dauman said, "Viacom has a powerful
combination of world-class brands and popular content that is driving
our business across the globe. We will continue to lead the way in
connecting our vibrant brands to audiences through both traditional and
innovative new platforms. This strategic realignment, which is largely
completed, will allow us to sharpen our focus on driving long-term
growth in a rapidly changing industry. We will transition rapidly into
the future, generate substantial cost savings and continue to increase
our investment in original programming to bring our audiences great
content in new and groundbreaking ways."
In connection with the realignment, Viacom will recognize a pre-tax
charge in the second fiscal quarter of 2015 of approximately $785
million. The charge reflects the impact of write-downs of
underperforming programming, including the abandonment of select
acquired titles, as well as costs associated with workforce reductions.
The charge also reflects accelerated amortization of programming
expenses associated with a change in the Company's ultimate revenue
projections for certain original programming genres that have been
impacted by changing media consumption habits.
The initiatives are expected to provide ongoing annual savings of
approximately $350 million. The savings in fiscal 2015 are expected to
be approximately $175 million.
In light of these actions and previously discussed strategic
acquisitions anticipated in the current fiscal year that could total
approximately $400 million, Viacom will temporarily pause share
purchases under its current $20 billion stock repurchase program in
order to stay within its target leverage ratio. The repurchase program
has returned $15 billion to shareholders since its inception in October
2010, including $1.5 billion in the first half of fiscal 2015. The
Company anticipates resuming stock repurchases no later than October
2015, when it begins its next fiscal year.
Mr. Dauman added, "We remain steadfastly committed to returning capital
to shareholders through stock buybacks as well as our ongoing dividend
program. This temporary pause reflects our history of sound financial
management and our commitment to operating within Viacom's target
leverage ratio."
Viacom will report results for the fiscal second quarter ended March 31,
on April 30, 2015.
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 our 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
measured audience acceptance of our programs, motion pictures and other
entertainment content on the various platforms on which they are
distributed; technological developments and their effect in our markets
and on consumer behavior; competition for content, audiences,
advertising and distribution; the impact of piracy; economic
fluctuations in advertising and retail markets, and economic conditions
generally; fluctuations in our results due to the timing, mix and
availability of our motion pictures and other programming; the potential
for loss of carriage or other reduction in the distribution of our
content; changes in the Federal communications laws and regulations;
evolving cybersecurity and similar risks; other domestic and global
economic, business, competitive and/or regulatory factors affecting our
businesses generally; and other factors described in our news releases
and filings with the Securities and Exchange Commission, including but
not limited to our 2014 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 we do 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 our
website at http://www.viacom.com.
About Viacom
Viacom is home to premier global media brands that create compelling
television programs, motion pictures, short-form video, apps, games,
consumer products, social media and other entertainment content for
audiences in more than 165 countries and territories. Viacom's media
networks, including Nickelodeon, CMT, Nick Jr., TeenNick, Nicktoons, TV
Land, Nick at Nite, MTV, VH1, Comedy Central, SPIKE, Logo, BET, CENTRIC,
Channel 5 (UK), Tr3s, Paramount Channel and VIVA, reach a cumulative 3.2
billion television subscribers worldwide. Paramount Pictures is a major
global producer and distributor of filmed entertainment.
For more information about Viacom and its businesses, visit www.viacom.com.
Keep up with Viacom news by following Viacom's blog at blog.viacom.com
and Twitter feed at www.twitter.com/viacom.
Viacom
Media
Jeremy Zweig, 212-846-7503
jeremy.zweig@viacom.com
or
Investors
James
Bombassei, 212-258-6377
james.bombassei@viacom.com
or
Pamela
Yi, 212-846-7581
pamela.yi@viacom.com
Source: Viacom Inc.
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