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Time Warner (TWX)
Q3 2010 Earnings Call
November 03, 2010 10:30 am ET
John Martin - Chief Financial Officer and Executive Vice President
Jeffrey Bewkes - Chairman and Chief Executive Officer
Douglas Shapiro - Head of Investor Relations
Imran Khan - JP Morgan Chase & Co
Spencer Wang - Crédit Suisse AG
Anthony DiClemente - Barclays Capital
Benjamin Swinburne - Morgan Stanley
Richard Greenfield - BTIG, LLC
Michael Nathanson - Sanford Bernstein
Jason Bazinet - Citigroup Inc
Douglas Mitchelson - Deutsche Bank AG
Previous Statements by TWX
» Time Warner Q2 2010 Earnings Call Transcript
» Time Warner Q1 2010 Earnings Call Transcript
» Time Warner Inc. Q4 2009 Earnings Call Transcript
Thanks a lot. This morning, we issued two press releases, one detailing our results for the third quarter and the other updating our 2010 full year business outlook. Before we begin, there are two 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 and trending schedules. These reconciliations are available on our website at timewarner.com/investors. Reconciliations of our expected future financial performance are also included in the business outlook release that's on our site.
And 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.
Thank you, and I'll turn the call over to Jeff.
Thanks, Doug. Thanks, everyone, for listening this morning. We had another strong quarter, and we're on track for another terrific year. More important, we're positioning ourselves to take advantage of the opportunities that digital distribution will bring. This quarter, Turner, again, posed a double-digit advertising growth. We're continuing to benefit from strong demand for our inventory on TNT and TBS. And while we have ratings challenges at CNN that we are addressing, we've had solid ratings growth at several of our other Networks, including truTV, Turner and Adult Swim.
We saw outstanding results from our most important new content this quarter. On TNT, our new show, Rizzoli & Isles, became the number one original series of all time on ad-supported Cable. On HBO, Boardwalk Empire is on track to become the most watched first year series in the network's history.
At Warner Bros, our blockbuster movie, Inception, generated over $800 million at the global box office, and we're having a great start to new television season. In addition to the success of our returning shows like Two and a Half Men, The Big Bang Theory and The Mentalist, a new show, Mike & Molly, is the number one new comedy on TV.
Looking forward, we expect improved ratings performance at our biggest entertainment Networks in the fourth quarter, driven by our strong lineup of original, the debut of Conan's new show next Monday and outstanding recent performance from our sports program. In fact, our coverage of the Major League Baseball American League championship series was the most watched league championship ever on TBS. And NBA Opening Night was the most watched regular season NBA game ever on Cable TV. This should enable us to continue capitalize on the solid demand in the scatter market, with pricing up 15% to 20% over the healthy prices that we saw in the 2010, 2011 upfront.
And we're excited about the films that we're premiering this month. As you all know, Harry Potter and the Deathly Hallows opens in a few weeks. And just this weekend, we're opening Due Date from the Hangover Director, Todd Phillips, which could be another sleeper hit. All that momentum gives us the confidence to, again, raise our full year outlook. We now expect adjusted earnings per share to grow at a rate in the high 20s over 2009. And last year was a year when we grew adjusted earnings per share by 29%.
John will walk you through the results in detail in a few minutes. But overall, it's shaping up to be another very good year. I'd like to shift gears now and update you on a bigger picture issue that has made plenty of headlines in the way and that's the impact of digital distribution on our businesses. Clearly, digital distribution present some new challenges for the industry, but we believe that the opportunities significantly outweigh the risks. The unequivocal good news is that digital distribution offers consumers a better experience, with more choice, more convenience and more control. As a result, there's more demand than ever for the kind of high-quality content that we make, and it's a testament to that demand that so many companies are devoting so many resources to finding new ways to distribute and monetize our films and our TV shows and magazines.
The question, of course, is how do we take advantage of these opportunities in a way that both enhances the consumer experience and enhances our economics. First, we're supporting an array of Networks to allow consumers to access Time Warner content on whatever device they want, wherever and whenever they want in a way that's attractive and convenient for them and economically beneficial for us. In other words, buy our content once and use it in multiple places. Think of it as content everywhere. I'll talk more about this idea in a moment.