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Time Warner Inc. (TWX)
Q1 2009 Earnings Call
April 29, 2009 10:300 AM ET
Doug Shapiro - Vice President, Investor Relations
Jeffrey L. Bewkes - Chairman and Chief Executive Officer
John K. Martin - Executive Vice President and Chief Financial Officer
Spencer Wang - Credit Suisse
Jason Bazinet - Citigroup
Anthony Diclemente - Barclays Capital
Tuna Amobi - Standard & Poor's
Michael Morris - UBS
Douglas Mitchelson - Deutsche Bank Securities
Richard Greenfield - Pali Research
Jessica Reif-Cohen - BAS-ML
Previous Statements by TWX
» Time Warner Inc. Q3 2009 Earnings Call Transcript
» Time Warner Inc. Q2 2009 Earnings Call Transcript
» Time Warner Q4 2008 Earnings Call Transcript
And now I will turn the call over to Doug Shapiro, Vice President of Investor Relations. Sir, you may begin.
Thanks and sorry again for the delays.
This morning, we issued two press releases, one detailing our results for the first quarter and the other reaffirming our 2009 business outlook. Before we begin, there are a few items I need to cover.
First, we refer to certain non-GAAP financial measures. Schedules setting out reconciliations of these historical non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release, our trending schedules. These reconciliations are available on our website at timewarner.com/investors. A reconciliation of our expected future financial performance is also included in the business outlook release that's available on our website.
Second, today's announcement includes certain forward-looking statements which are based on management's current expectations. Actual results may vary materially from those expressed or implied by these statements due to various factors. These factors are discussed in detail in Time Warner's SEC filings, including its most recent Form 10-K and Form 10-Q. Time Warner is under no obligation, and in fact, expressly disclaims any obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
Finally, I'd like to point out the updated trending schedules that were posted on our website this morning include a recap financial information for 2007 and 2008.
Thanks and let me now turn the call over to Jeff.
Jeffrey L. Bewkes
Thanks, Doug. Good morning everyone. I hope you can hear us. I'll just jump right in. This quarter we completed the Cable spin, a big step forward in reshaping Time Warner
So, today we're a much more content focused company. And with the advantages of our brands and our scale, I think we're formally on track to achieve our key goals: to make Time Warner the leading content company in the world and to improve our stockholders' returns. We performed to that in line this quarter with what we anticipated, despite the obviously challenging economic environment.
Advertising at AOL and Time Inc. especially is proving even tougher than we expected, when we last talked a few months ago.
Home video has improved somewhat since the fourth quarter but remains challenged. Nevertheless, we posted relatively solid growth from our content businesses in the quarter with Content Group's adjusted OIBDA up 3%. And this morning as you saw we reaffirmed our outlook for the year.
Looking ahead to longer term, we need to do four things to drive the company forward. First, leverage our brands and our operating scale to make the best content. As consumer entertainment choices increase, we're seeing hits growing in their value. And of course nobody can make only hits, but the scale of our operations helps us to achieve better economics from the content we make. And those superior economics coupled with our strong brands, helps us to attract the best project and the best talent.
Second, we need to operate our businesses as efficiently as possible. Last year we took major cost savings steps at New Line Time Inc. incorporate. This year we're taking further measures at AOL and Warner Bros. And these are well under. This isn't just a matter of one-time reductions, we will remain as you have seen us do over the last 18 months, focused on improving our efficiency and our productivity across the entire company.
Third, we need to expand our presence internationally, with a particular focus on certain key regions. Last month, for example, we announced an investment and a channel partnership with CME, one of the premier media companies in Central and Eastern Europe.
This deal was a natural extension of our efforts to expand our networks globally because CME is ideally positioned to benefit as the economy there re-bounced and as the TV business in those countries continues to develop towards multi-channel.
And then fourth, we need to develop new business models that exploit changes in consumer usage and in technology. We get a lot of questions about how the economics of our content businesses will evolve. We've always used our leadership position to advance models that improve our economics and we will continue to do that.
I would like to give you just a few examples. Turner was one of the first able programmers to foresee the conversions of offline and online inventory and so Turner pioneered the idea of multi-platform bar. According to Nielsen, CNN is by far the most integrated brand on TV. That's the largest audience of combined television and online users of any network whether it's a broadcast or a cable network. And this broad reach enable CNN to attract more advertisers across more category in any of its competitors and to sell more multi-platform ads than anybody or consider HBO which has been consistently innovating since its launch in 1972. It was the first cable network to broadcast on a satellite, the first to offer multiplex channels, the first to offer (inaudible).