VIACOM: FULL-YEAR REVENUES UP, LOSSES DOWN

Cable, radio, television and film conglomerate Viacom Inc. posted gains in both full-year revenue and EBITDA (earnings before interest, taxes, depreciation and amortization), narrowing the company’s net loss year-over-year, according to results released today for both the full year and the fourth quarter ended December 31.

For the full year 2001, Viacom saw a 16% increase in revenues to $23.22 billion and a 28% gain in EBITDA to $4.55 billion. On a pro forma basis, which treats Viacom’s merger with CBS and other media property transactions as if they occurred on Jan. 1, 2000 and excludes a one-time $512 million charge associated with Blockbuster write-offs and MTV and UPN restructuring costs, revenues were $23.20 billion and EBITDA $5.07 billion, compared with pro forma revenues of $23.09 billion and pro forma EBITDA of $5.0 billion in 2000. These gains were in line with Viacom's targets for the year.

For the fourth quarter, revenues were $6.04 billion and EBITDA $1.06 billion, compared to revenues of $6.36 billion and EBITDA of $1.36 billion in Q4 2000. Pro forma, Q4 revenues were $6.04 billion and EBITDA $1.22 billion, versus pro forma revenues of $6.31 billion and pro forma EBITDA of $1.35 billion for the same quarter in 2000.

This all adds up to a net loss of $224 million, or $.13 per share, for the year and a net loss of $43 million, or $.02 per share, for the fourth quarter. In 2000, Viacom reported a net loss of $816 million, or $.67 per share, for the year and Q4 2000 net earnings of $30 million, or $.02 per share.

In cable, including MTV Networks, TNN, CMT, BET and Showtime, pro forma revenues increased 4% to $4.28 billion and pro forma EBITDA increased 19% to $1.76 billion for the year, thanks to in part to growth in cable affiliate fees. For the quarter, pro forma revenues and EBITDA were $1.16 billion and $528 million, compared to $1.20 billion and $459 million the year before. Revenues suffered because of the ad slump, but EBITDA grew thanks to efforts to keep costs in line. For the 19th consecutive quarter, MTV was the No. 1 cable network for the core 12-to 24-year-old audience.

The ad slump also hit Infinity, Viacom’s radio and outdoor-advertising unit. For the year, pro forma revenues were $3.67 billion, EBITDA $1.52 billion, compared to pro forma revenues of $3.97 billion and EBITDA of $1.74 billion for 2000. For the quarter, pro forma revenues were $938 million and EBITDA $385 million, compared to pro forma revenues of $1.05 billion and EBITDA of $483 million in 2000.

Separately, Viacom announced its intent to purchase KCAL-TV in Los Angeles, which, along with its existing L.A. station KCBS-TV brings to eight the number of markets in which the company owns two television outlets. KCAL will become part of the Viacom Television Stations Group of the Company's CBS Television Division, which consists of 16 CBS and 18 UPN television stations reaching 9 of the top 10 television markets in the U.S.

Representatives of the prestigious Arthur Andersen accounting firm were not available to comment on Viacom’s latest earnings report. Former Enron chief executive Kenneth Lay, however, did have this to say: “I wish to assert my Fifth Amendment rights on the grounds that my response to whatever it is you’re talking about may incriminate me.”