Philippe Dauman, Executive Chairman, President and Chief Executive Officer of Viacom, said, "As the media industry continues to evolve quickly, Viacom is generating sustainable opportunities using great new content, innovative technology, marketing and data applications, along with the benefits of our substantial footprint in key international growth markets. Our investments in new content have led to higher ratings at most of our networks, including VH1, Spike, BET, TV Land, CMT and Nick at Nite, as well as Nickelodeon, which recaptured its lead as the top network for kids 2 to 11. In addition, we saw significant sequential improvement in domestic advertising sales, due to the success of our new programming and our highly-desirable new advertising products. Paramount is off to a strong start in 2016, with a promising and diverse film lineup throughout the year, and our Paramount Television unit is also thriving.
Most of Viacom's major networks have seen year-over-year ratings improvement. (source: Nielsen)
"2015 was a challenging year operationally as we redesigned ourselves and adapted to significant industry disruption. Our first fiscal quarter of 2016 reflected these challenges. However, our revitalized organization and our investments in content, technology and strategic innovation are now beginning to bear fruit. Although our industry continues to face headwinds, we expect our positive momentum to continue and build throughout the year."
Quarterly revenues declined 6% to $3.15 billion. Media Networks revenues declined 3% to $2.57 billion. Absent an unfavorable 1% impact of foreign exchange, Media Networks revenues decreased 2%. Domestic advertising revenues declined 4%, as pricing increases were more than offset by a decline in traditional ratings at some of Viacom's networks. Worldwide advertising revenues decreased 3%, reflecting an unfavorable 1% impact of foreign exchange. International advertising revenues declined 2%, driven by an 8% adverse effect of foreign exchange. Absent the impact of foreign exchange, international advertising revenues increased 6%, driven principally by growth in Europe. Domestic affiliate revenues were substantially flat due to the impact from the timing of product available under certain distribution agreements. International affiliate revenues decreased 6%, driven by a 9% unfavorable impact of foreign exchange. Absent the impact of foreign exchange, international affiliate revenues increased 3%.
Filmed Entertainment revenues decreased by 15% to $612 million, as an increase in license fees was more than offset by declines in theatrical and home entertainment revenues. Excluding foreign exchange, which had a 3% unfavorable impact, worldwide revenues declined 12%. Worldwide theatrical revenues decreased $75 million in the quarter, as carryover revenues decreased $46 million, principally due to an unfavorable comparison with the strong performance of Teenage Mutant Ninja Turtles in the first fiscal quarter of 2015. Worldwide home entertainment revenues decreased $77 million in the quarter, primarily reflecting a comparison with carryover revenues from Transformers: Age of Extinction in the first quarter of 2015. License fees increased 25%, to $237 million in the quarter, primarily driven by the licensing of certain titles for subscription video-on-demand services and television.
Quarterly adjusted operating income declined 13% to $839 million, primarily driven by the timing and mix of current quarter Filmed Entertainment releases, as well as lower contributions from films in release across post-theatrical distribution windows. Media Networks adjusted operating income declined 4% to $1.06 billion, driven by the decline in revenues, partially offset by decreased expenses. Absent a 1% adverse impact of foreign exchange, Media Networks adjusted operating income declined 3%. Filmed Entertainment reported an adjusted operating loss of $146 million for the quarter, compared with an operating loss of $60 million in the previous year's quarter.
Quarterly adjusted net earnings attributable to Viacom declined to $470 million. Adjusted diluted earnings per share for the quarter decreased 9% to $1.18. Foreign exchange had an unfavorable $0.02 impact on adjusted diluted EPS.
Debt
At December 31, 2015, total debt outstanding was $12.57 billion, compared with $12.29 billion at September 30, 2015. The Company's cash balances were $327 million at December 31, 2015, a decrease from $506 million at September 30, 2015.
You can read Viacom's press release announcing the company's Q3 2015 quarterly earnings in full, including tables of Viacom's statements and balance sheets, here on BusinessWire.com.
About Viacom
Viacom is home to premier global media brands that create compelling television programs, motion pictures, short-form content, apps, games, consumer products, social media experiences, and other entertainment content for audiences in 180 countries. Viacom's media networks, including Nickelodeon, Comedy Central, MTV, VH1, Spike, BET, CMT, TV Land, Nick at Nite, Nick Jr., Channel 5 (UK), Logo, Nicktoons, TeenNick and Paramount Channel, reach over 3.5 billion cumulative 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. Viacom may also use social media channels to communicate with its investors and the public about the company, its brands and other matters, and those communications could be deemed to be material information. Investors and others are encouraged to review posts on Viacom's company blog (blog.viacom.com), Twitter feed (twitter.com/viacom) and Facebook page (facebook.com/viacom).
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 Viacom's 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 public acceptance of Viacom's brands, programs, motion pictures and other entertainment content on the various platforms on which they are distributed; the impact of inadequate audience measurement on Viacom's program ratings, advertising revenues and affiliate fees; technological developments and their effect in Viacom's 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 Viacom's results due to the timing, mix, number and availability of Viacom's motion pictures and other programming; the potential for loss of carriage or other reduction in the distribution of Viacom content; changes in the Federal communications or other laws and regulations; evolving cybersecurity and similar risks; other domestic and global economic, business, competitive and/or regulatory factors affecting Viacom's businesses generally; and other factors described in Viacom's news releases and filings with the Securities and Exchange Commission, including but not limited to Viacom's 2015 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 the official Viacom website at http://www.viacom.com.
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