Document
false--09-30Q3201900013399470.20.40.20.40.0010.0010.0010.0013750000005000000000375000000500000000049400000353700000494000003543000000.06250.058750.068750.052500.048500.0450.048750.043750.06750.038750.027500.038750.02250.031250.0450.03250.056250.03450.05850.04255000000130000000100000000000000000039310000039250000032000000000000000000 0001339947 2018-10-01 2019-06-30 0001339947 us-gaap:CommonClassBMember 2018-10-01 2019-06-30 0001339947 us-gaap:CommonClassAMember 2018-10-01 2019-06-30 0001339947 us-gaap:CommonClassBMember 2019-07-31 0001339947 us-gaap:CommonClassAMember 2019-07-31 0001339947 2018-04-01 2018-06-30 0001339947 2017-10-01 2018-06-30 0001339947 2019-04-01 2019-06-30 0001339947 2018-09-30 0001339947 2019-06-30 0001339947 us-gaap:CommonClassAMember 2019-06-30 0001339947 us-gaap:CommonClassAMember 2018-09-30 0001339947 us-gaap:CommonClassBMember 2018-09-30 0001339947 us-gaap:CommonClassBMember 2019-06-30 0001339947 2017-09-30 0001339947 2018-06-30 0001339947 us-gaap:NoncontrollingInterestMember 2018-04-01 2018-06-30 0001339947 us-gaap:RetainedEarningsMember 2018-04-01 2018-06-30 0001339947 us-gaap:ParentMember 2018-04-01 2018-06-30 0001339947 us-gaap:CommonStockMember 2018-04-01 2018-06-30 0001339947 us-gaap:TreasuryStockMember 2018-04-01 2018-06-30 0001339947 us-gaap:ParentMember 2018-06-30 0001339947 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-06-30 0001339947 us-gaap:RetainedEarningsMember 2018-06-30 0001339947 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-04-01 2018-06-30 0001339947 us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember 2018-04-01 2018-06-30 0001339947 us-gaap:ParentMember 2018-03-31 0001339947 2018-03-31 0001339947 us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember 2018-06-30 0001339947 us-gaap:TreasuryStockMember 2018-03-31 0001339947 us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember 2018-03-31 0001339947 us-gaap:NoncontrollingInterestMember 2018-03-31 0001339947 us-gaap:CommonStockMember 2018-03-31 0001339947 us-gaap:RetainedEarningsMember 2018-03-31 0001339947 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-03-31 0001339947 us-gaap:CommonStockMember 2018-06-30 0001339947 us-gaap:TreasuryStockMember 2018-06-30 0001339947 us-gaap:NoncontrollingInterestMember 2018-06-30 0001339947 us-gaap:RetainedEarningsMember 2017-10-01 2018-06-30 0001339947 us-gaap:ParentMember 2017-10-01 2018-06-30 0001339947 us-gaap:RetainedEarningsMember 2017-09-30 0001339947 us-gaap:TreasuryStockMember 2017-10-01 2018-06-30 0001339947 us-gaap:CommonStockMember 2017-10-01 2018-06-30 0001339947 us-gaap:NoncontrollingInterestMember 2017-10-01 2018-06-30 0001339947 us-gaap:TreasuryStockMember 2017-09-30 0001339947 us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember 2017-10-01 2018-06-30 0001339947 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-10-01 2018-06-30 0001339947 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-09-30 0001339947 us-gaap:ParentMember 2017-09-30 0001339947 us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember 2017-09-30 0001339947 us-gaap:NoncontrollingInterestMember 2017-09-30 0001339947 us-gaap:CommonStockMember 2017-09-30 0001339947 us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember 2018-10-01 2019-06-30 0001339947 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-10-01 2019-06-30 0001339947 us-gaap:CommonStockMember 2018-10-01 2019-06-30 0001339947 us-gaap:RetainedEarningsMember 2018-10-01 2019-06-30 0001339947 us-gaap:NoncontrollingInterestMember 2018-10-01 2019-06-30 0001339947 viab:ASC606ASU201616andASU201601Member us-gaap:NoncontrollingInterestMember 2018-09-30 0001339947 us-gaap:ParentMember 2018-10-01 2019-06-30 0001339947 us-gaap:TreasuryStockMember 2018-10-01 2019-06-30 0001339947 us-gaap:ParentMember 2019-06-30 0001339947 us-gaap:NoncontrollingInterestMember 2018-09-30 0001339947 us-gaap:NoncontrollingInterestMember 2019-06-30 0001339947 viab:ASC606ASU201616andASU201601Member us-gaap:RetainedEarningsMember 2018-09-30 0001339947 viab:ASC606ASU201616andASU201601Member us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember 2018-09-30 0001339947 us-gaap:CommonStockMember 2019-06-30 0001339947 us-gaap:RetainedEarningsMember 2018-09-30 0001339947 us-gaap:ParentMember 2018-09-30 0001339947 us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember 2018-09-30 0001339947 us-gaap:TreasuryStockMember 2018-09-30 0001339947 viab:ASC606ASU201616andASU201601Member 2018-09-30 0001339947 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0001339947 viab:ASC606ASU201616andASU201601Member us-gaap:TreasuryStockMember 2018-09-30 0001339947 us-gaap:RetainedEarningsMember 2019-06-30 0001339947 viab:ASC606ASU201616andASU201601Member us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-09-30 0001339947 us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember 2019-06-30 0001339947 us-gaap:TreasuryStockMember 2019-06-30 0001339947 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-09-30 0001339947 viab:ASC606ASU201616andASU201601Member us-gaap:ParentMember 2018-09-30 0001339947 us-gaap:CommonStockMember 2018-09-30 0001339947 viab:ASC606ASU201616andASU201601SharesMember us-gaap:CommonStockMember 2018-09-30 0001339947 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0001339947 us-gaap:NoncontrollingInterestMember 2019-04-01 2019-06-30 0001339947 us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0001339947 us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember 2019-03-31 0001339947 us-gaap:TreasuryStockMember 2019-03-31 0001339947 us-gaap:RetainedEarningsMember 2019-03-31 0001339947 us-gaap:CommonStockMember 2019-04-01 2019-06-30 0001339947 2019-03-31 0001339947 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0001339947 us-gaap:ParentMember 2019-04-01 2019-06-30 0001339947 us-gaap:TreasuryStockMember 2019-04-01 2019-06-30 0001339947 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0001339947 us-gaap:NoncontrollingInterestMember 2019-03-31 0001339947 us-gaap:CommonStockMember 2019-03-31 0001339947 us-gaap:ParentMember 2019-03-31 0001339947 us-gaap:AccountingStandardsUpdate201409Member us-gaap:CalculatedUnderRevenueGuidanceInEffectBeforeTopic606Member 2019-04-01 2019-06-30 0001339947 us-gaap:AccountingStandardsUpdate201409Member us-gaap:CalculatedUnderRevenueGuidanceInEffectBeforeTopic606Member 2018-10-01 2019-06-30 0001339947 srt:MinimumMember us-gaap:AccountingStandardsUpdate201616Member 2018-10-01 2019-06-30 0001339947 us-gaap:AccountingStandardsUpdate201616Member 2018-10-01 0001339947 us-gaap:AccountingStandardsUpdate201409Member 2018-10-01 0001339947 srt:MaximumMember us-gaap:AccountingStandardsUpdate201616Member 2018-10-01 2019-06-30 0001339947 us-gaap:AccountingStandardsUpdate201707Member 2017-10-01 2018-06-30 0001339947 us-gaap:AccountingStandardsUpdate201409Member us-gaap:CalculatedUnderRevenueGuidanceInEffectBeforeTopic606Member 2019-06-30 0001339947 us-gaap:AccountingStandardsUpdate201601Member 2018-10-01 0001339947 srt:RestatementAdjustmentMember viab:PlutoTVDomain 2019-03-01 0001339947 viab:PlutoTVDomain 2018-10-01 2019-06-30 0001339947 viab:PlutoTVDomain 2019-03-01 2019-03-01 0001339947 viab:PlutoTVDomain 2019-03-01 0001339947 viab:OriginalProgrammingMember 2019-06-30 0001339947 viab:FilmInventoryMember 2018-09-30 0001339947 viab:FilmInventoryMember 2019-06-30 0001339947 viab:OriginalProgrammingMember 2018-09-30 0001339947 viab:TelevisionProductionsMember 2018-09-30 0001339947 viab:TelevisionProductionsMember 2019-06-30 0001339947 viab:JuniorSubordinatedDebenturesFebruary20575YearHybridMember 2018-10-01 2019-06-30 0001339947 srt:MaximumMember viab:RevolvingCreditAgreementMember us-gaap:LondonInterbankOfferedRateLIBORMember 2018-10-01 2019-06-30 0001339947 srt:MinimumMember viab:RevolvingCreditAgreementMember us-gaap:LondonInterbankOfferedRateLIBORMember 2018-10-01 2019-06-30 0001339947 viab:RevolvingCreditAgreementMember 2018-10-01 2019-06-30 0001339947 viab:RevolvingCreditAgreementMember 2019-06-30 0001339947 viab:SeniorNotesandSeniorandJuniorDebenturesMember 2018-09-30 0001339947 viab:SeniorNotesandSeniorandJuniorDebenturesMember 2019-06-30 0001339947 viab:JuniorSubordinatedDebentureFebruary205710YearHybridMember 2018-09-30 0001339947 viab:SeniorNotesDec2021Member 2019-06-30 0001339947 viab:SeniorDebenturesOct2037Member 2018-09-30 0001339947 viab:SeniorNotesMarch2023Member 2019-06-30 0001339947 viab:SeniorNotesFebruary2022Member 2019-06-30 0001339947 viab:SeniorDebenturesDecember2034Member 2019-06-30 0001339947 viab:SeniorDebenturesDueFeb2042Member 2019-06-30 0001339947 viab:SeniorNotesDec2019Member 2018-09-30 0001339947 viab:SeniorDebenturesJune2043Member 2019-06-30 0001339947 viab:SeniorNotesDec2021Member 2018-09-30 0001339947 viab:SeniorNotesApril2024Member 2018-09-30 0001339947 viab:SeniornotesdueSeptember2023Member 2019-06-30 0001339947 viab:SeniornotesdueSeptember2023Member 2018-09-30 0001339947 viab:JuniorSubordinatedDebenturesFebruary20575YearHybridMember 2019-06-30 0001339947 viab:SeniordebenturesdueSeptember2043Member 2019-06-30 0001339947 viab:SeniordebenturesdueSeptember2043Member 2018-09-30 0001339947 viab:SeniorNotesSept2019Member 2018-09-30 0001339947 viab:SeniorNotesdueOctober2026Member 2019-06-30 0001339947 viab:SeniorNotesJune2022Member 2019-06-30 0001339947 viab:SeniorNotesMarch2021Member 2019-06-30 0001339947 viab:SeniorNotesMarch2023Member 2018-09-30 0001339947 viab:SeniorNotesdueOctober2026Member 2018-09-30 0001339947 viab:SeniorDebenturesMarch2043Member 2019-06-30 0001339947 viab:SeniorNotesMarch2021Member 2018-09-30 0001339947 viab:SeniorDebenturesApril2044Member 2018-09-30 0001339947 viab:SeniorDebenturesApril2044Member 2019-06-30 0001339947 viab:SeniorNotesDec2019Member 2019-06-30 0001339947 viab:JuniorSubordinatedDebentureFebruary205710YearHybridMember 2019-06-30 0001339947 viab:SeniorDebenturesApril2036Member 2018-09-30 0001339947 viab:SeniorDebenturesApril2036Member 2019-06-30 0001339947 viab:SeniorDebenturesDecember2034Member 2018-09-30 0001339947 viab:SeniorDebenturesJune2043Member 2018-09-30 0001339947 viab:SeniorDebenturesDueFeb2042Member 2018-09-30 0001339947 viab:SeniorNotesJune2022Member 2018-09-30 0001339947 viab:SeniorNotesSept2019Member 2019-06-30 0001339947 viab:JuniorSubordinatedDebenturesFebruary20575YearHybridMember 2018-09-30 0001339947 viab:SeniorNotesApril2024Member 2019-06-30 0001339947 viab:SeniorDebenturesOct2037Member 2019-06-30 0001339947 viab:SeniorNotesFebruary2022Member 2018-09-30 0001339947 viab:SeniorDebenturesMarch2043Member 2018-09-30 0001339947 2018-10-01 0001339947 viab:PrimarilyOver3YearsMember 2018-10-01 2019-06-30 0001339947 viab:ContractliabilitiesnoncurrentincludedinOtherliabilitiesMember 2019-06-30 0001339947 viab:FilmedEntertainmentMember 2018-10-01 2019-06-30 0001339947 viab:FilmedEntertainmentMember 2019-04-01 2019-06-30 0001339947 viab:ContractliabilitiesnoncurrentincludedinOtherliabilitiesMember 2018-10-01 0001339947 us-gaap:OtherNoncurrentAssetsMember 2018-10-01 0001339947 us-gaap:OtherNoncurrentAssetsMember 2019-06-30 0001339947 viab:FilmEntertainmentMember 2019-04-01 2019-06-30 0001339947 viab:MediaNetworksMember 2019-04-01 2019-06-30 0001339947 viab:MediaNetworksMember 2018-10-01 2019-06-30 0001339947 viab:OtherRelatedCostsMember viab:MediaNetworksMember 2019-04-01 2019-06-30 0001339947 us-gaap:EmployeeSeveranceMember 2019-04-01 2019-06-30 0001339947 viab:OtherRelatedCostsMember viab:Corporate1Member 2018-10-01 2019-06-30 0001339947 viab:Corporate1Member 2018-10-01 2019-06-30 0001339947 us-gaap:EmployeeSeveranceMember viab:FilmEntertainmentMember 2019-04-01 2019-06-30 0001339947 viab:Corporate1Member 2019-04-01 2019-06-30 0001339947 viab:OtherExitActivitiesMember viab:MediaNetworksMember 2019-04-01 2019-06-30 0001339947 viab:OtherRelatedCostsMember viab:Corporate1Member 2019-04-01 2019-06-30 0001339947 viab:OtherExitActivitiesMember 2018-10-01 2019-06-30 0001339947 viab:OtherRelatedCostsMember 2018-10-01 2019-06-30 0001339947 viab:OtherExitActivitiesMember viab:Corporate1Member 2019-04-01 2019-06-30 0001339947 viab:OtherExitActivitiesMember viab:Corporate1Member 2018-10-01 2019-06-30 0001339947 us-gaap:EmployeeSeveranceMember viab:FilmEntertainmentMember 2018-10-01 2019-06-30 0001339947 us-gaap:EmployeeSeveranceMember viab:Corporate1Member 2019-04-01 2019-06-30 0001339947 viab:FilmEntertainmentMember 2018-10-01 2019-06-30 0001339947 us-gaap:EmployeeSeveranceMember viab:MediaNetworksMember 2019-04-01 2019-06-30 0001339947 us-gaap:EmployeeSeveranceMember 2018-10-01 2019-06-30 0001339947 viab:OtherRelatedCostsMember viab:FilmEntertainmentMember 2018-10-01 2019-06-30 0001339947 us-gaap:EmployeeSeveranceMember viab:Corporate1Member 2018-10-01 2019-06-30 0001339947 viab:OtherExitActivitiesMember 2019-04-01 2019-06-30 0001339947 viab:OtherRelatedCostsMember 2019-04-01 2019-06-30 0001339947 viab:OtherExitActivitiesMember viab:FilmEntertainmentMember 2018-10-01 2019-06-30 0001339947 viab:OtherExitActivitiesMember viab:FilmEntertainmentMember 2019-04-01 2019-06-30 0001339947 viab:OtherExitActivitiesMember viab:MediaNetworksMember 2018-10-01 2019-06-30 0001339947 us-gaap:EmployeeSeveranceMember viab:MediaNetworksMember 2018-10-01 2019-06-30 0001339947 viab:OtherRelatedCostsMember viab:FilmEntertainmentMember 2019-04-01 2019-06-30 0001339947 viab:OtherRelatedCostsMember viab:MediaNetworksMember 2018-10-01 2019-06-30 0001339947 viab:OtherRelatedCostsMember 2017-10-01 2018-06-30 0001339947 viab:OtherRelatedCostsMember viab:MediaNetworksMember 2018-04-01 2018-06-30 0001339947 viab:OtherExitActivitiesMember viab:MediaNetworksMember 2017-10-01 2018-06-30 0001339947 viab:OtherExitActivitiesMember viab:MediaNetworksMember 2018-04-01 2018-06-30 0001339947 viab:OtherExitActivitiesMember 2017-10-01 2018-06-30 0001339947 viab:OtherRelatedCostsMember viab:FilmEntertainmentMember 2017-10-01 2018-06-30 0001339947 us-gaap:EmployeeSeveranceMember viab:FilmEntertainmentMember 2017-10-01 2018-06-30 0001339947 us-gaap:EmployeeSeveranceMember viab:MediaNetworksMember 2017-10-01 2018-06-30 0001339947 viab:Corporate1Member 2017-10-01 2018-06-30 0001339947 viab:FilmEntertainmentMember 2018-04-01 2018-06-30 0001339947 us-gaap:EmployeeSeveranceMember viab:FilmEntertainmentMember 2018-04-01 2018-06-30 0001339947 us-gaap:EmployeeSeveranceMember viab:MediaNetworksMember 2018-04-01 2018-06-30 0001339947 us-gaap:EmployeeSeveranceMember 2017-10-01 2018-06-30 0001339947 viab:OtherRelatedCostsMember viab:Corporate1Member 2018-04-01 2018-06-30 0001339947 viab:OtherExitActivitiesMember viab:FilmEntertainmentMember 2018-04-01 2018-06-30 0001339947 viab:OtherRelatedCostsMember viab:Corporate1Member 2017-10-01 2018-06-30 0001339947 viab:OtherExitActivitiesMember viab:FilmEntertainmentMember 2017-10-01 2018-06-30 0001339947 viab:MediaNetworksMember 2017-10-01 2018-06-30 0001339947 viab:OtherRelatedCostsMember 2018-04-01 2018-06-30 0001339947 viab:MediaNetworksMember 2018-04-01 2018-06-30 0001339947 viab:OtherExitActivitiesMember viab:Corporate1Member 2017-10-01 2018-06-30 0001339947 viab:OtherExitActivitiesMember viab:Corporate1Member 2018-04-01 2018-06-30 0001339947 viab:OtherRelatedCostsMember viab:FilmEntertainmentMember 2018-04-01 2018-06-30 0001339947 us-gaap:EmployeeSeveranceMember viab:Corporate1Member 2018-04-01 2018-06-30 0001339947 viab:OtherExitActivitiesMember 2018-04-01 2018-06-30 0001339947 viab:Corporate1Member 2018-04-01 2018-06-30 0001339947 us-gaap:EmployeeSeveranceMember 2018-04-01 2018-06-30 0001339947 viab:FilmEntertainmentMember 2017-10-01 2018-06-30 0001339947 us-gaap:EmployeeSeveranceMember viab:Corporate1Member 2017-10-01 2018-06-30 0001339947 viab:OtherRelatedCostsMember viab:MediaNetworksMember 2017-10-01 2018-06-30 0001339947 viab:AllocatedShareBasedCompensationExpenseMember 2017-10-01 2018-06-30 0001339947 viab:AllocatedShareBasedCompensationExpenseMember 2018-10-01 2019-06-30 0001339947 viab:FilmEntertainmentMember 2018-09-30 0001339947 viab:Corporate1Member 2019-06-30 0001339947 viab:MediaNetworksMember 2018-09-30 0001339947 viab:Corporate1Member 2018-09-30 0001339947 viab:FilmEntertainmentMember 2019-06-30 0001339947 viab:MediaNetworksMember 2019-06-30 0001339947 viab:Viacom18Member 2017-10-01 2018-06-30 0001339947 viab:Viacom18Member 2018-06-30 0001339947 viab:FutureProductionCostsMember 2019-06-30 0001339947 viab:NetInvestmentsInForeignOperationsMember 2019-06-30 0001339947 viab:NetInvestmentsInForeignOperationsMember 2018-09-30 0001339947 viab:FutureProductionCostsMember 2018-09-30 0001339947 viab:SeniorNotesandSeniorandJuniorDebenturesMember us-gaap:FairValueInputsLevel1Member 2018-09-30 0001339947 us-gaap:FairValueInputsLevel2Member 2018-09-30 0001339947 us-gaap:FairValueInputsLevel2Member 2019-06-30 0001339947 viab:SeniorNotesandSeniorandJuniorDebenturesMember us-gaap:FairValueInputsLevel1Member 2019-06-30 0001339947 us-gaap:FairValueInputsLevel1Member 2019-06-30 0001339947 us-gaap:FairValueInputsLevel1Member 2018-09-30 0001339947 viab:LicensefeesMember viab:FilmEntertainmentMember 2017-10-01 2018-06-30 0001339947 viab:RevenueReconcilingItemsMember 2018-04-01 2018-06-30 0001339947 viab:LicensefeesMember viab:FilmEntertainmentMember 2018-04-01 2018-06-30 0001339947 viab:HomeentertainmentMember viab:FilmEntertainmentMember 2018-04-01 2018-06-30 0001339947 us-gaap:AdvertisingMember viab:MediaNetworksMember 2018-10-01 2019-06-30 0001339947 viab:AncillaryRevenueMember viab:FilmEntertainmentMember 2017-10-01 2018-06-30 0001339947 viab:RevenueReconcilingItemsMember 2019-04-01 2019-06-30 0001339947 viab:RevenueReconcilingItemsMember 2017-10-01 2018-06-30 0001339947 viab:AffiliateFeesRevenueMember viab:MediaNetworksMember 2019-04-01 2019-06-30 0001339947 viab:ConsumerproductsrecreationandliveeventsMember viab:MediaNetworksMember 2019-04-01 2019-06-30 0001339947 viab:TheatricalMember viab:FilmEntertainmentMember 2017-10-01 2018-06-30 0001339947 viab:AffiliateFeesRevenueMember viab:MediaNetworksMember 2018-10-01 2019-06-30 0001339947 us-gaap:AdvertisingMember viab:MediaNetworksMember 2017-10-01 2018-06-30 0001339947 viab:ConsumerproductsrecreationandliveeventsMember viab:MediaNetworksMember 2018-04-01 2018-06-30 0001339947 viab:TheatricalMember viab:FilmEntertainmentMember 2018-10-01 2019-06-30 0001339947 viab:AffiliateFeesRevenueMember viab:MediaNetworksMember 2018-04-01 2018-06-30 0001339947 viab:HomeentertainmentMember viab:FilmEntertainmentMember 2017-10-01 2018-06-30 0001339947 us-gaap:AdvertisingMember viab:MediaNetworksMember 2019-04-01 2019-06-30 0001339947 viab:AffiliateFeesRevenueMember viab:MediaNetworksMember 2017-10-01 2018-06-30 0001339947 viab:AncillaryRevenueMember viab:FilmEntertainmentMember 2019-04-01 2019-06-30 0001339947 viab:LicensefeesMember viab:FilmEntertainmentMember 2018-10-01 2019-06-30 0001339947 viab:ConsumerproductsrecreationandliveeventsMember viab:MediaNetworksMember 2018-10-01 2019-06-30 0001339947 us-gaap:AdvertisingMember viab:MediaNetworksMember 2018-04-01 2018-06-30 0001339947 viab:ConsumerproductsrecreationandliveeventsMember viab:MediaNetworksMember 2017-10-01 2018-06-30 0001339947 viab:AncillaryRevenueMember viab:FilmEntertainmentMember 2018-04-01 2018-06-30 0001339947 viab:TheatricalMember viab:FilmEntertainmentMember 2018-04-01 2018-06-30 0001339947 viab:TheatricalMember viab:FilmEntertainmentMember 2019-04-01 2019-06-30 0001339947 viab:RevenueReconcilingItemsMember 2018-10-01 2019-06-30 0001339947 viab:HomeentertainmentMember viab:FilmEntertainmentMember 2019-04-01 2019-06-30 0001339947 viab:LicensefeesMember viab:FilmEntertainmentMember 2019-04-01 2019-06-30 0001339947 viab:AncillaryRevenueMember viab:FilmEntertainmentMember 2018-10-01 2019-06-30 0001339947 viab:HomeentertainmentMember viab:FilmEntertainmentMember 2018-10-01 2019-06-30 0001339947 us-gaap:IntersegmentEliminationMember 2018-04-01 2018-06-30 0001339947 us-gaap:IntersegmentEliminationMember 2017-10-01 2018-06-30 0001339947 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2018-04-01 2018-06-30 0001339947 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2017-10-01 2018-06-30 0001339947 us-gaap:IntersegmentEliminationMember 2019-04-01 2019-06-30 0001339947 us-gaap:IntersegmentEliminationMember 2018-10-01 2019-06-30 0001339947 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2018-10-01 2019-06-30 0001339947 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2019-04-01 2019-06-30 0001339947 viab:CorporateandEliminationsMember 2018-09-30 0001339947 viab:CorporateandEliminationsMember 2019-06-30 0001339947 viab:NaiMember 2019-04-01 2019-06-30 0001339947 viab:NaiMember 2018-04-01 2018-06-30 0001339947 viab:CbsMember 2018-04-01 2018-06-30 0001339947 viab:CbsMember 2017-10-01 2018-06-30 0001339947 viab:CbsMember 2019-06-30 0001339947 viab:CbsMember 2018-09-30 0001339947 viab:CbsMember 2019-04-01 2019-06-30 0001339947 viab:CbsMember 2018-10-01 2019-06-30 0001339947 viab:OtherRelatedPartiesMember 2018-09-30 0001339947 viab:OtherRelatedPartiesMember 2017-10-01 2018-06-30 0001339947 viab:OtherRelatedPartiesMember 2019-06-30 0001339947 viab:OtherRelatedPartiesMember 2019-04-01 2019-06-30 0001339947 viab:OtherRelatedPartiesMember 2018-10-01 2019-06-30 0001339947 viab:OtherRelatedPartiesMember 2018-04-01 2018-06-30 iso4217:USD xbrli:shares xbrli:shares viab:Segment iso4217:USD xbrli:pure


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
 
 
FORM 10-Q
 
 
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2019
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
    
For the transition period from                      to                     
Commission File Number 001-32686
 
 
 
 
VIACOM INC.
(Exact name of registrant as specified in its charter)
Delaware
20-3515052
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
 
 
 
 
1515 Broadway
New York, NY 10036
(212258-6000
(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive offices)
 
 
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes     No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes      No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer      Accelerated filer     Non-accelerated filer     Smaller reporting company     Emerging growth company 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes     No  
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbols
 
Name of each exchange on which registered
Class A common stock, par value $0.001 per share
 
VIA
 
NASDAQ Global Select Market
Class B common stock, par value $0.001 per share
 
VIAB
 
NASDAQ Global Select Market
The number of Class A common stock, par value $0.001 per share outstanding at July 31, 2019 was 49,430,524. The number of Class B common stock, par value $0.001 per share outstanding at July 31, 2019 was 353,964,838.
 


Table of Contents

VIACOM INC.
INDEX TO FORM 10-Q
 
 
 
Page
 
 
 
 
 
 
 
 
 
 
 


Table of Contents

PART I – FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (Unaudited).
VIACOM INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
 
  
Quarter Ended 
 June 30,
 
Nine Months Ended 
 June 30,
(in millions, except per share amounts)
2019
 
2018
 
2019
 
2018
Revenues
$
3,357

 
$
3,237

 
$
9,405

 
$
9,458

Expenses:
 
 
 
 
 
 
 
Operating
1,717

 
1,681

 
4,924

 
4,925

Selling, general and administrative
828

 
738

 
2,255

 
2,248

Depreciation and amortization
55

 
51

 
159

 
159

Restructuring and related costs

 
15

 
95

 
200

Legal settlement

 

 
40

 

Total expenses
2,600

 
2,485

 
7,473

 
7,532

Operating income
757

 
752

 
1,932

 
1,926

Interest expense, net
(119
)
 
(138
)
 
(364
)
 
(428
)
Equity in net earnings of investee companies

 
2

 
1

 
5

Gain on marketable securities
29

 

 
21

 

Gain on extinguishment of debt

 

 
18

 
25

Other items, net
(1
)
 
(9
)
 
(13
)
 
(41
)
Earnings from continuing operations before provision for income taxes
666

 
607

 
1,595

 
1,487

Provision for income taxes
(122
)
 
(93
)
 
(352
)
 
(158
)
Net earnings from continuing operations
544

 
514

 
1,243

 
1,329

Discontinued operations, net of tax
6

 
11

 
22

 
23

Net earnings (Viacom and noncontrolling interests)
550

 
525

 
1,265

 
1,352

Net earnings attributable to noncontrolling interests
(6
)
 
(3
)
 
(24
)
 
(27
)
Net earnings attributable to Viacom
$
544

 
$
522

 
$
1,241

 
$
1,325

Amounts attributable to Viacom:
 
 
 
 
 
 
 
Net earnings from continuing operations
$
538

 
$
511

 
$
1,219

 
$
1,302

Discontinued operations, net of tax
6

 
11

 
22

 
23

Net earnings attributable to Viacom
$
544

 
$
522

 
$
1,241

 
$
1,325

Basic earnings per share attributable to Viacom:
 
 
 
 
 
 
 
Continuing operations
$
1.33

 
$
1.27

 
$
3.02

 
$
3.23

Discontinued operations
0.02

 
0.03

 
0.06

 
0.06

Net earnings
$
1.35

 
$
1.30

 
$
3.08

 
$
3.29

Diluted earnings per share attributable to Viacom:
 
 
 
 
 
 
 
Continuing operations
$
1.33

 
$
1.27

 
$
3.02

 
$
3.23

Discontinued operations
0.02

 
0.02

 
0.05

 
0.06

Net earnings
$
1.35

 
$
1.29

 
$
3.07

 
$
3.29

Weighted average number of common shares outstanding:
 
 
 
 
 
 
 
Basic
403.5

 
402.8

 
403.3

 
402.6

Diluted
404.0

 
403.3

 
403.7

 
402.9

 
 
 
 
 
 
 
 
 See accompanying notes to Consolidated Financial Statements

1

Table of Contents

VIACOM INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
  
Quarter Ended 
 June 30,
 
Nine Months Ended 
 June 30,
(in millions)
2019
 
2018
 
2019
 
2018
Net earnings (Viacom and noncontrolling interests)
$
550

 
$
525

 
$
1,265

 
$
1,352

Other comprehensive income/(loss), net of tax:
 
 
 
 
 
 
 
Foreign currency translation adjustments
(8
)
 
(228
)
 
(50
)
 
(175
)
Defined benefit pension plans
1

 
1

 
2

 
4

Cash flow hedges
2

 
(3
)
 
6

 
(3
)
Available-for-sale securities

 
9

 

 
22

Other comprehensive income/(loss) (Viacom and noncontrolling interests)
(5
)
 
(221
)
 
(42
)
 
(152
)
Comprehensive income
545

 
304

 
1,223

 
1,200

Less: Comprehensive income attributable to noncontrolling interest
5

 
1

 
23

 
25

Comprehensive income attributable to Viacom
$
540

 
$
303

 
$
1,200

 
$
1,175

 
 
 
 
 
 
 
 
 See accompanying notes to Consolidated Financial Statements

2

Table of Contents

VIACOM INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)

(in millions, except par value)
June 30,
2019
 
September 30,
2018
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
722

 
$
1,557

Receivables, net
3,386

 
3,141

Inventory, net
819

 
896

Prepaid and other assets
515

 
482

Total current assets
5,442

 
6,076

Property and equipment, net
891

 
919

Inventory, net
3,963

 
3,848

Goodwill
11,886

 
11,609

Intangibles, net
328

 
313

Other assets
1,138

 
1,018

Total assets
$
23,648

 
$
23,783

LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
441

 
$
433

Accrued expenses
837

 
848

Participants’ share and residuals
711

 
719

Program obligations
730

 
662

Deferred revenue
474

 
398

Current portion of debt
320

 
567

Other liabilities
490

 
427

Total current liabilities
4,003

 
4,054

Noncurrent portion of debt
8,638

 
9,515

Participants’ share and residuals
430

 
523

Program obligations
335

 
498

Deferred tax liabilities, net
318

 
296

Other liabilities
1,191

 
1,186

Redeemable noncontrolling interest
250

 
246

Commitments and contingencies (Note 7)


 


Viacom stockholders’ equity:
 
 
 
Class A common stock, par value $0.001, 375.0 authorized; 49.4 and 49.4 outstanding, respectively

 

Class B common stock, par value $0.001, 5,000.0 authorized; 354.3 and 353.7 outstanding, respectively

 

Additional paid-in capital
10,157

 
10,145

Treasury stock, 392.5 and 393.1 common shares held in treasury, respectively
(20,541
)
 
(20,562
)
Retained earnings
19,656

 
18,561

Accumulated other comprehensive loss
(832
)
 
(737
)
Total Viacom stockholders’ equity
8,440

 
7,407

Noncontrolling interests
43

 
58

Total equity
8,483

 
7,465

Total liabilities and equity
$
23,648

 
$
23,783

 
 
 
 
 See accompanying notes to Consolidated Financial Statements

3

Table of Contents

VIACOM INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

  
Nine Months Ended 
 June 30,
(in millions)
2019
 
2018
OPERATING ACTIVITIES
 
 
 
Net earnings (Viacom and noncontrolling interests)
$
1,265

 
$
1,352

Discontinued operations, net of tax
(22
)
 
(23
)
Net earnings from continuing operations
1,243

 
1,329

Reconciling items:
 
 
 
Depreciation and amortization
159

 
159

Feature film and program amortization
3,234

 
3,402

Equity-based compensation
41

 
45

Deferred income taxes
36

 
27

Gain on marketable securities
(21
)
 

Operating assets and liabilities, net of acquisitions:
 
 
 
Receivables
(232
)
 
(211
)
Production and programming
(3,320
)
 
(3,373
)
Accounts payable and other current liabilities
7

 
(384
)
Other, net
(44
)
 
3

Net cash provided by operating activities
1,103

 
997

 
 
 
 
INVESTING ACTIVITIES
 
 
 
Acquisitions and investments, net
(396
)
 
(90
)
Capital expenditures
(119
)
 
(102
)
Proceeds received from asset sales
5

 
57

Grantor trust proceeds
4

 
7

Net cash used in investing activities
(506
)
 
(128
)
 
 
 
 
FINANCING ACTIVITIES
 
 
 
Debt repayments
(1,100
)
 
(1,000
)
Dividends paid
(242
)
 
(241
)
Exercise of stock options

 
2

Other, net
(87
)
 
(70
)
Net cash used in financing activities
(1,429
)
 
(1,309
)
Effect of exchange rate changes on cash and cash equivalents
(3
)
 
(20
)
Net change in cash and cash equivalents
(835
)
 
(460
)
Cash and cash equivalents at beginning of period
1,557

 
1,389

Cash and cash equivalents at end of period
$
722

 
$
929

 
 
 
 
 See accompanying notes to Consolidated Financial Statements

4

Table of Contents

VIACOM INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
 
Quarter Ended 
 June 30, 2019
(in millions, except per share amounts)
Common
Stock
(shares)
 
Common
Stock/
Additional Paid-In Capital
 
Treasury
Stock
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Loss
 
Total Viacom
Stockholders’
Equity
 
Noncontrolling
Interests
 
Total
Equity
March 31, 2019
403.3

 
$
10,161

 
$
(20,554
)
 
$
19,197

 
$
(828
)
 
$
7,976

 
$
49

 
$
8,025

Net earnings

 

 

 
544

 

 
544

 
6

 
550

Other comprehensive income, net of income tax expense of $1

 

 

 

 
(4
)
 
(4
)
 
(1
)
 
(5
)
Noncontrolling interests

 

 

 
(4
)
 

 
(4
)
 
(11
)
 
(15
)
Dividends declared ($0.20 per share for both Class A and B)

 

 

 
(81
)
 

 
(81
)
 

 
(81
)
Equity-based compensation and other
0.4

 
(4
)
 
13

 

 

 
9

 

 
9

June 30, 2019
403.7

 
$
10,157

 
$
(20,541
)
 
$
19,656

 
$
(832
)
 
$
8,440

 
$
43

 
$
8,483

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended 
 June 30, 2019
(in millions, except per share amounts)
Common
Stock
(shares)
 
Common
Stock/
Additional Paid-In Capital
 
Treasury
Stock
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Loss
 
Total Viacom
Stockholders’
Equity
 
Noncontrolling
Interests
 
Total
Equity
September 30, 2018
403.1

 
$
10,145

 
$
(20,562
)
 
$
18,561

 
$
(737
)
 
$
7,407

 
$
58

 
$
7,465

Adoption of New Accounting Pronouncements(1)

 

 

 
113

 
(54
)
 
59

 

 
59

Adjusted beginning balance,
October 1, 2018
403.1

 
10,145

 
(20,562
)
 
18,674

 
(791
)
 
7,466

 
58

 
7,524

Net earnings

 

 

 
1,241

 

 
1,241

 
24

 
1,265

Other comprehensive loss, net of income tax expense of $2

 

 

 

 
(41
)
 
(41
)
 
(1
)
 
(42
)
Noncontrolling interests

 

 

 
(13
)
 

 
(13
)
 
(38
)
 
(51
)
Dividends declared ($0.60 per share for both Class A and B)

 

 

 
(244
)
 

 
(244
)
 

 
(244
)
Equity-based compensation and other
0.6

 
12

 
21

 
(2
)
 

 
31

 

 
31

June 30, 2019
403.7

 
$
10,157

 
$
(20,541
)
 
$
19,656

 
$
(832
)
 
$
8,440

 
$
43

 
$
8,483

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Represents the adoption of Accounting Standards Codification (“ASC”) 606 - Revenue from Contracts with Customers, Accounting Standards Update (“ASU”) 2016-16 - Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory and ASU 2016-01 - Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. See Note 1 of the Consolidated Financial Statements for details.

See accompanying notes to Consolidated Financial Statements


VIACOM INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(continued)
(Unaudited)
 
Quarter Ended 
 June 30, 2018
(in millions, except per share amounts)
Common
Stock
(shares)
 
Common
Stock/
Additional Paid-In Capital
 
Treasury
Stock
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Loss
 
Total Viacom
Stockholders’
Equity
 
Noncontrolling
Interests
 
Total
Equity
March 31, 2018
402.6

 
$
10,147

 
$
(20,580
)
 
$
17,762

 
$
(549
)
 
$
6,780

 
$
74

 
$
6,854

Net earnings

 

 

 
522

 

 
522

 
3

 
525

Other comprehensive loss, net of income tax expense of $2

 

 

 

 
(219
)
 
(219
)
 
(2
)
 
(221
)
Noncontrolling interests

 

 

 
1

 

 
1

 
(10
)
 
(9
)
Dividends declared ($0.20 per share for both Class A and B)

 

 

 
(81
)
 

 
(81
)
 

 
(81
)
Equity-based compensation and other
0.5

 
(15
)
 
18

 
43

 
(43
)
 
3

 

 
3

June 30, 2018
403.1

 
$
10,132

 
$
(20,562
)
 
$
18,247

 
$
(811
)
 
$
7,006

 
$
65

 
$
7,071

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended 
 June 30, 2018
(in millions, except per share amounts)
Common
Stock
(shares)
 
Common
Stock/
Additional Paid-In Capital
 
Treasury
Stock
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Loss
 
Total Viacom
Stockholders’
Equity
 
Noncontrolling
Interests
 
Total
Equity
September 30, 2017
402.4

 
$
10,119

 
$
(20,590
)
 
$
17,124

 
$
(618
)
 
$
6,035

 
$
84

 
$
6,119

Net earnings

 

 

 
1,325

 

 
1,325

 
27

 
1,352

Other comprehensive loss, net of income tax expense of $15

 

 

 

 
(150
)
 
(150
)
 
(2
)
 
(152
)
Noncontrolling interests

 

 

 
(2
)
 

 
(2
)
 
(44
)
 
(46
)
Dividends declared ($0.60 per share for both Class A and B)

 

 

 
(243
)
 

 
(243
)
 

 
(243
)
Equity-based compensation and other
0.7

 
13

 
28

 
43

 
(43
)
 
41

 

 
41

June 30, 2018
403.1

 
$
10,132

 
$
(20,562
)
 
$
18,247

 
$
(811
)
 
$
7,006

 
$
65

 
$
7,071

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

See accompanying notes to Consolidated Financial Statements

5

Table of Contents
VIACOM INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




NOTE 1. BASIS OF PRESENTATION
Description of Business
Viacom creates entertainment experiences that drive conversation and culture around the world. Through television, film, digital media, live events, merchandise and solutions, our brands connect with diverse, young and young at heart audiences in more than 180 countries. Viacom operates through two reportable segments: Media Networks and Filmed Entertainment. The Media Networks segment provides entertainment content, services and related branded products for consumers in targeted demographics attractive to advertisers, content distributors and retailers through our global media brands including flagship brands Nickelodeon, MTV, BET, Comedy Central and Paramount Network. The Filmed Entertainment segment develops, produces, finances, acquires and distributes films, television programming and other entertainment content through its Paramount Pictures, Paramount Players, Paramount Animation and Paramount Television divisions, in various markets and media worldwide, for itself and for third parties. It partners on various projects with key Viacom brands, including Nickelodeon Movies, MTV Films and BET Films. References in this document to “Viacom,” “Company,” “we,” “us” and “our” mean Viacom Inc. and our consolidated subsidiaries, unless the context requires otherwise.
Unaudited Interim Financial Statements
The accompanying unaudited consolidated quarterly financial statements have been prepared on a basis consistent with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules of the Securities and Exchange Commission (“SEC”). In the opinion of management, the accompanying unaudited financial statements reflect all adjustments, consisting of only normal and recurring adjustments, necessary for a fair statement of our results of operations, financial position and cash flows for the periods presented. The results of operations for the periods presented are not necessarily indicative of the results expected for the fiscal year ending September 30, 2019 (“fiscal 2019”) or any future period. These financial statements should be read in conjunction with our Form 10-K for the year ended September 30, 2018, as filed with the SEC on November 16, 2018 (the “2018 Form 10-K”).
Use of Estimates
Preparing financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities as of the dates presented and the reported amounts of revenues and expenses during the periods presented. Significant estimates inherent in the preparation of the accompanying Consolidated Financial Statements include estimates of film ultimate revenues, product returns, potential outcome of uncertain tax positions, fair value of acquired assets and liabilities, fair value of equity-based compensation and pension benefit assumptions. Estimates are based on past experience and other considerations reasonable under the circumstances. Actual results may differ from these estimates.
Revenue Recognition
We recognize revenue when control of a good or service is transferred to a customer. We consider control to be transferred when the customer has the ability to direct the use of and obtain substantially all of the remaining benefits of that good or service. Significant judgments in the determination of the amount and timing of revenue from contracts with customers include the identification of distinct performance obligations in contracts containing bundled advertising sales and content licenses and the allocation of the consideration among individual performance obligations within these arrangements based on their relative standalone selling prices.
Advertising Revenues: Revenue from the sale of advertising earned by the Media Networks segment is recognized when the advertisement is aired. Advertising revenues are principally generated from the sale of advertising campaigns comprised of multiple commercial units. In contracts with guaranteed impressions, we have identified the overall advertising campaign as the performance obligation to be satisfied over time, and impressions delivered against the satisfaction of our guarantee as the measure of progress. To the extent amounts billed exceed the amount of revenue recognized by applying the measure of progress, such amounts are deferred until the impression guarantee has been satisfied. For arrangements that do not include impression guarantees, the individual spots are the performance obligation, and consideration is allocated among the individual advertising spots based on relative standalone selling prices.
Affiliate Revenues: In the Media Networks segment, content is primarily distributed through its live network feeds via content license arrangements with affiliate partners, including cable television operators, direct-to-home satellite operators and mobile networks.
We also license our content through television, subscription video-on-demand (“SVOD”) and over-the-top (“OTT”) distributors, syndication and transactional video-on-demand. As discussed further in the Filmed Entertainment Revenues section below, revenue associated with these arrangements is recognized upon a transfer of control, which occurs upon delivery and availability for airing by the licensee.

6

Table of Contents
VIACOM INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

Affiliate revenues from cable television operators, direct-to-home satellite television operators and mobile networks are recognized by the Media Networks segment as the live feeds are provided to the distributor, representing a transfer of control. The performance obligation under such affiliate agreements is a license to our content via the continuous delivery of live linear feeds, and may also include a license to programming for video-on-demand (“VOD”) viewing. Both performance obligations are satisfied over the term of the agreement. The majority of our affiliate revenues relate to sales-based royalties for which we receive a contractual rate per subscriber. Revenue for these contracts is recognized when the sale to the end customer occurs, which is generally concurrent with the delivery of the linear feeds based on the number of subscribers the customer has at the time of delivery.
Consumer Products, Recreation and Live Events Revenues: Revenue associated with consumer products, recreation and live event contracts is typically recognized utilizing contractual royalty rates applied to sales amounts reported by licensees. When consumer products and recreation agreements include minimum guaranteed consideration, revenue is recognized as sales occur by the licensee or ratably if the sales-based consideration is not expected to exceed a minimum guaranteed amount of consideration. For live events, we recognize revenue when the event is held.
Filmed Entertainment Revenues: In the Filmed Entertainment segment, we license our content through theatrical releases, television, SVOD and OTT distributors, and through transactional video-on-demand. We also distribute our films through DVD and Blu-ray sales through wholesale and retail partners.
Revenue from the licensing of film and television exhibition rights, including broadcast and cable television networks, SVOD and other OTT services, is recognized upon a transfer of control, which occurs upon delivery and availability for airing by the licensee. Each individual title delivered represents a separate performance obligation. For renewals or extensions of licensing arrangements, revenue related to the renewal or extension is recognized upon the start of the renewal or extension period to the extent the content has been delivered to the customer. SVOD and other OTT arrangements include content made available to distributors on one or more dates for a fixed fee. Consideration for such arrangements is allocated among the titles and episodes based on relative standalone selling prices. Estimation of standalone selling prices requires judgment, which can impact the timing and amount of revenue that we recognize.
In determining the transaction price of a contract, an adjustment is made if payment from our customer occurs either significantly before or after performance, resulting in a significant financing component. Applying a practical expedient in the new standard, we do not assess whether a significant financing component exists if the period between when we perform our obligations under the contract and when the customer pays is one year or less.
In transactional video-on-demand and similar arrangements, our performance obligation is to provide the content to our distribution customers that provide our content to end users. These contracts provide for sales-based royalties based on the number of underlying transactions with end users. Revenue for transactional video-on-demand and similar arrangements is recognized as the content is exhibited based on end-customer purchases as reported by distributors. Similarly, revenue from licensing of our content through electronic sell-through means is recognized as each title is downloaded by the end customer, as the customer is able to use the license immediately upon download. For sales of DVDs and Blu-ray discs to wholesalers and retailers, revenue is recognized upon the later of physical delivery to the customer or the date that restrictions on sales by the retailers are lifted.
Theatrical revenue is recognized from theatrical distribution of films during the exhibition period. These agreements take the form of sales-based royalties and revenue is recognized when the sale to the end customer occurs.
Revenue Allowances: We record a provision for sales returns and allowances at the time of sale based upon an estimate of future returns, rebates and other incentives (“estimated returns”). In determining estimated returns, we consider numerous sources of qualitative and quantitative evidence including forecasted sales data, customers’ rights of return, units shipped and units remaining at retail, historical return rates for similar product, current economic trends, competitive environment, promotions and sales strategies. Reserves for sales returns and allowances are recorded as a liability in the Consolidated Balance Sheet. Reserves for accounts receivable are based on amounts estimated to be uncollectible and are recorded as a contra-receivable.
Gross versus Net Revenue: We earn and recognize revenues under certain third-party distribution and outsourced advertising sales agreements. In such cases, determining whether revenue should be reported on a gross or net basis is based on management’s assessment of which party controls the good or service being transferred to the customer.
Recently Adopted Accounting Pronouncements
Revenue Recognition
On October 1, 2018, we adopted ASC Topic 606 - Revenue from Contracts with Customers, a comprehensive revenue recognition model that supersedes the previous revenue recognition requirements. The guidance provides a five step framework to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration it

7

Table of Contents
VIACOM INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

expects to be entitled to in exchange for those goods or services. The new standard impacts the timing of revenue recognition for renewals and extensions of existing licensing agreements for intellectual property, which are now recognized as revenue when the renewal term begins rather than when the agreement is extended or renewed under previous guidance. We adopted the standard using the modified retrospective method for all contracts not completed as of the date of adoption, which resulted in a cumulative effect adjustment of $106 million to decrease the opening retained earnings balance for our 2019 fiscal year, substantially all related to television license arrangements in our Filmed Entertainment segment.
The following tables present the amount each applicable financial statement line item on our Consolidated Statement of Earnings and Consolidated Balance Sheet would have increased/(decreased) if renewals and extensions of existing licensing agreements for intellectual property were recognized under previous accounting guidance:
Consolidated Statement of Earnings Impact
(in millions, except per share amounts)
Quarter Ended 
 June 30, 2019
 
Nine Months Ended 
 June 30, 2019
Revenues
$
(52
)
 
$
(99
)
Operating expenses
(24
)
 
(41
)
Operating income
(28
)
 
(58
)
Provision for income taxes
(6
)
 
(14
)
Net earnings from continuing operations
$
(22
)
 
$
(44
)
Net earnings (Viacom and noncontrolling interests)
$
(22
)
 
$
(44
)
Net earnings attributable to Viacom
$
(22
)
 
$
(44
)
Basic EPS from continuing operations
$
(0.05
)
 
$
(0.11
)
Diluted EPS from continuing operations
$
(0.05
)
 
$
(0.11
)
 
 
 
 

Consolidated Balance Sheet Impact
(in millions)
June 30, 2019
ASSETS
 
Receivables, net
$
(4
)
Inventory, net
(11
)
Prepaid and other assets
(2
)
Other assets
67

LIABILITIES AND EQUITY
 
Accrued expenses
$
2

Participants’ share and residuals (current)
14

Other liabilities (current)
(56
)
Deferred revenue
(1
)
Participants’ share and residuals (noncurrent)
41

Other liabilities (noncurrent)
(13
)
Retained earnings
63

 
 

In addition, the adoption of ASC 606 resulted in a classification change on the Consolidated Balance Sheet in which reserves related to sales returns and allowances were reclassified to Other Liabilities - current. Such amount, which was $63 million as of June 30, 2019, was previously presented as a reduction to Receivables, net.
Income Taxes
On October 1, 2018, we adopted ASU 2016-16 - Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory. ASU 2016-16 requires the tax effects of intercompany transactions, other than sales of inventory, to be recognized currently, eliminating an exception under the previous GAAP in which the tax effects of intra-entity asset transfers were deferred until the transferred asset was sold to a third party or otherwise recovered through use. Under the modified retrospective method, we recorded a net cumulative adjustment of $165 million to increase the opening retained earnings balance for our 2019 fiscal year, principally related to deferred tax assets that will be amortized over the next 12 to 15 years.
Financial Instruments
On October 1, 2018, we adopted ASU 2016-01 - Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, which addresses certain aspects of recognition, measurement, presentation and disclosure of certain financial instruments. Among other provisions, the new guidance requires the fair value measurement of equity

8

Table of Contents
VIACOM INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

investments. For equity investments without readily determinable fair values, entities have the option to either measure these investments at fair value or to apply a measurement alternative at cost adjusted for changes in observable prices minus impairment. All changes in measurement are recognized in net income. We adopted the standard for our marketable securities using the modified retrospective method, which resulted in a transition adjustment to reclassify $54 million, net of tax, of accumulated other comprehensive income related to our marketable securities to increase the opening retained earnings balance. For our investments without readily determinable fair values, or non-marketable securities, we have adopted the standard prospectively and elected to apply the measurement alternative described above. Gains and losses resulting from the movements in fair value of equity investments are recorded in the Consolidated Statements of Earnings.
Statement of Cash Flows
On October 1, 2018, we adopted ASU 2016-15 - Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, which addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The new standard impacts our Consolidated Statements of Cash Flows by increasing cash flow from operating activities and decreasing cash flow from financing activities in periods when debt prepayment or debt extinguishment costs are paid. We adopted the standard retrospectively.
Pension Benefits
On October 1, 2018, we adopted ASU 2017-07 - Compensation - Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires the service cost component of net periodic cost to be presented in the income statement with other current compensation costs for related employees. The other components of net periodic cost are required to be presented in the income statement outside of operating income. We adopted the standard retrospectively, which resulted in $1 million of other components of net periodic costs in the nine months ended June 30, 2018 to be reclassified from Selling, general and administrative to Other items, net in the Consolidated Statements of Earnings. As a practical expedient, we used amounts previously disclosed in the prior comparative period’s interim consolidated financial statements as the adjustments that were applied retrospectively.
Accounting Pronouncements Not Yet Adopted
Improvements to Accounting for Costs of Films and License Agreements for Program Materials
In March 2019, the FASB issued ASU 2019-02 - Entertainment - Films - Other Assets - Film Costs and Entertainment - Broadcasters - Intangibles - Goodwill and Other. ASU 2019-02 aligns the accounting for production costs of an episodic television series with the accounting for production costs of films by removing the content distinction for capitalization. The guidance also requires that an entity test a film or license agreement for program material for impairment at a film group level when the film or license agreement is predominantly monetized with other films and/or license agreements. Further, the guidance requires that an entity reassess estimates of the use of a film in a film group and account for changes, if any, prospectively. The guidance will be effective for the first interim period of our 2021 fiscal year, with early adoption permitted. We are currently evaluating the impact of the new standard on our consolidated financial statements.
Derivatives and Hedging
In August 2017, the FASB issued ASU 2017-12 - Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities. Among other provisions, ASU 2017-12 expands the eligibility of hedging strategies that qualify for hedge accounting, changes the assessment of hedge effectiveness and modifies the presentation and disclosure of hedging activities. The guidance will be effective for the first interim period of our 2020 fiscal year, with early adoption permitted. We are currently evaluating the impact of the new standard on our consolidated financial statements.
Financial Instruments
In June 2016, the FASB issued ASU 2016-13 - Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments. Subsequently, ASU 2018-19 has been issued that amends and/or clarifies the application of ASU 2016-13. Among other provisions, the ASU introduces a new impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a forward-looking “expected loss” model that will replace the current “incurred loss” model and generally will result in earlier recognition of allowances for losses. The guidance will be effective for the first interim period of our 2021 fiscal year, with early adoption in fiscal year 2020 permitted. We are currently evaluating the impact of the new standard.
Leases
In February 2016, the FASB issued ASU 2016-02 - Leases. Subsequent ASUs have also been issued that amend and/or clarify the application of ASU 2016-02. ASU 2016-02 requires lessees to recognize a right-of-use asset and a lease liability on the balance sheet for most leases. For income statement purposes, leases will be classified as either operating or finance, generally resulting in straight-line expense recognition for operating leases (similar to current operating leases) and accelerated expense recognition for financing leases (similar to current capital leases). The guidance will be effective for the first interim period of

9

Table of Contents
VIACOM INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

our 2020 fiscal year, with early adoption permitted. The guidance provides an option to either (1) adopt retrospectively and recognize a cumulative-effect adjustment at the beginning of the earliest period presented in the financial statements or (2) recognize a cumulative-effect adjustment at the beginning of the period of adoption. We are evaluating the adoption methodology and the impact of the new guidance on our consolidated financial statements.
NOTE 2. ACQUISITION
Pluto TV
On March 1, 2019, we acquired Pluto Inc., the provider of the free streaming television service Pluto TV in the U.S., for $324 million, net of cash acquired. The purchase price excludes $18 million of post-combination expenses that are subject to continuous employment and will be recognized over the required service period in the Consolidated Statements of Earnings within Selling, general and administrative expenses. Pluto TV will advance our key strategic priorities, including expanding our presence across next-generation distribution platforms and accelerating growth in our advanced marketing solutions business.
The following table summarizes our allocation of the purchase price as of the acquisition date. Due to the timing of the acquisition, these amounts are provisional and subject to change. We will finalize these amounts as we obtain the information necessary to complete the measurement process. Any changes resulting from facts and circumstances that existed as of the acquisition date may result in adjustments to the provisional amounts recognized at the acquisition date.
 
 
 
Purchase Price Allocation
(in millions)
 
 
 
   Receivables, net(1)
 
$
31

   Prepaid and other assets
 
3

   Goodwill(1)
 
277

   Intangible assets
 
41

   Other assets, noncurrent
 
8

Assets acquired
 
360

   Accounts payable
 
27

   Accrued expenses
 
4

   Other liabilities, noncurrent
 
5

Liabilities assumed
 
36

 
 
$
324

 
 
 

(1) In the quarter and nine months ended June 30, 2019, there was a $1 million measurement period adjustment resulting in a reduction to Receivables, net and a $2 million measurement period adjustment reflecting additional Goodwill, which were recognized at the acquisition date.
The goodwill, which is not deductible for tax purposes, reflects the expected Company-specific synergies arising from the acquisition and is included in the Media Networks segment. Intangible assets consist of distribution relationships, developed technology and trade names with useful lives of 5 years.
The operating results of Pluto TV from the date of acquisition through June 30, 2019 were not material.

10

Table of Contents
VIACOM INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

NOTE 3. INVENTORY
Inventory
(in millions)
June 30,
2019
 
September 30,
2018
Film inventory:
 
 
 
Released, net of amortization
$
478

 
$
454

Completed, not yet released
58

 
11

In process and other
753

 
713

 
1,289

 
1,178

Television productions:
 
 
 
Released, net of amortization
40

 
6

In process and other
216

 
201

 
256

 
207

Original programming:
 
 
 
Released, net of amortization
1,189

 
1,124

In process and other
795

 
757

 
1,984

 
1,881

Acquired program rights, net of amortization
1,195

 
1,411

Home entertainment inventory
58

 
67

Total inventory, net
4,782

 
4,744

Less current portion