Viacom Inc. (VIA)

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Viacom, Inc. (VIA)

Q4 2008 Earnings Call

February 12, 2009 8:30 am ET


Jim Bombassei - Senior Vice President of Investor Relations

Sumner Redstone – Chairman

Philippe Dauman - President and CEO

Tom Dooley - Chief Administrative Officer and CFO

Jimmy Barge - Controller and Head of Tax and Treasury


Michael Nathanson - Sanford Bernstein

Benjamin Swinburne - Morgan Stanley

Jessica Reif-Cohen – Bank of America Securities-Merrill Lynch

Spencer Wang - Credit Suisse

Jason Bazinet – Citi

Tuna Amobi - Standard & Poor’s

Imran Khan – JP Morgan



(Operator Instructions) Welcome to the Viacom Fourth Quarter 2008 Earnings Release Teleconference. I would like to turn the call over to the Senior Vice President of Investor Relations, Mr. Jim Bombassei.

Jim Bombassei

Thank you for taking the time to join us for our fourth quarter and full year earnings call. Joining me for today’s discussion are Sumner Redstone, our Chairman; Philippe Dauman, our President and CEO; Tom Dooley, Chief Administrative Officer and CFO; and Jimmy Barge, Controller and Head of Tax and Treasury.

Please note that in addition to our press release we have slides containing supplemental information available on our website. Before we begin let me refer you to page number two in the web presentation and remind you that certain statements made on this call are forward looking statements that involve risks and uncertainties. These risks and uncertainties are discussed in more detail in our filings with the SEC. Reconciliations for non-GAAP financial information discussed on this call can be found in our earnings release or on our website.

Now I’ll turn the call over to Sumner.

Sumner Redstone

Viacom’s results, like nearly every company here and all around the world reflect the harsh economic climate that took hold in the second half of the year and particularly in the fourth quarter. We are clearly in one of the most pronounced economic troughs in generations. Indeed, I may be the only person on the call who has been around long enough to remember the last time we experienced the kind of economic challenges all of us are facing today.

My long experience also gives me great optimism. I am hopeful that this recessionary period will be short lived. I am certain of one thing; Viacom will weather this storm and emerge even stronger than ever before. The reason for my confidence is particularly because Viacom has all the attributes necessary to win, particularly in these challenging times.

We have a clear focus of content, we have the creative fire power to keep the hits coming, we possess powerful brands that move across platforms and command audience loyalty here and all around the world and most important, a resourceful and highly strategic management team, with the experience and with the skill to keep Viacom on the right course. Indeed, Viacom’s current strength in this environment is a tribute to Philippe and to Tom as well as to the entire management team.

Now, since I know many of you are interested in the status of negotiations between National Amusements and its creditors let me give you a brief update on the ongoing process. I want to remind you that National Amusements is more than just a holding company. National owns and operates movie theatres with more than 1,500 screens in the United States, United Kingdom and Latin America and Russia.

Unlike most of National’s competitors our operations are built for the most part on land that National owns. That’s something which I have insisted on from the beginning and that provides National with valuable real estate assets.

As I mentioned in November, as a result of the unprecedented combination of a covenant issue and the extraordinary market dislocation, National took the highly unusual step of selling a limited amount of Viacom and CBS non-voting shares. Since that sale, I can confirm that National has not sold and does not expect to be required by its lenders to sell any additional shares of CBS and Viacom, not a share.

A committee of National’s directors who have no executive role at either Viacom or CBS is working closely with National’s advisors and their creditors to reach a resolution. Constructive dialogue is continuing and I must tell you it has been very substantial progress since I last spoke to you. Indeed, I have been advised that an agreement acceptable to all parties is now within reach. Naturally, because the discussions are continuing, I cannot comment further. I ask that you hold your questions on this topic for now.

Now I want to thank you and turn this over to my good friend, that great executor, Philippe Dauman.

Philippe Dauman

We all know that 2008 was a difficult year for everyone and that these difficulties are persisting as we begin 2009. The economic downdraft hit hard in the later part of the year and we were not excluded. At the same time, we made strong progress at Viacom in strengthening our brands, our content, our organizational structure and our financial position.

Even as we performed well during the first part of the year, we recognize the serious threats to the economy as we approached mid year. We took a number of actions right away to temper the near term affect and prepare for tougher times ahead. While no one predicted just how far the economy would fall or the pace that decline I believe our early actions helped to mitigate the impact on our businesses.

During periods of uncertainty, among the most important assets are a strong balance sheet and a strong cash position. We focused on this early and will continue to do so. I have confidence that our early and decisive action and our continuing vigilance from aggressive cash management to prudent investments in the business to restructuring the organization position us well to operate effectively without diminishing our focus on building the long term value of our brands.

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