Viacom Inc. (VIA)

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Viacom, Inc. (VIA)

Q2 2008 Earnings Call

July 29, 2008 4:30 pm ET



Jim Bombassei – Sr. VP IR

Sumner Redstone - Chairman

Philippe Dauman – President & CEO

Thomas Dooley – CFO & CAO


Mark Wienkes - Goldman Sachs

Michael Nathanson - Sanford Bernstein

Jason Bazinet – Citigroup

Benjamin Swinburne - Morgan Stanley

Richard Greenfield – Pali Research

Jessica Reif-Cohen – Merrill Lynch

Douglas Mitchelson – Deutsche Bank

Imran Khan – JP Morgan

Jason Helfstein - Oppenheimer
Michael Morris - UBS




Good day everyone and welcome to the Viacom second quarter 2008 earnings release teleconference. At this time I would like to turn the call over to the Senior Vice President of Investor Relations, Mr. Jim Bombassei; please go ahead sir.

Jim Bombassei

Good afternoon everyone. Thank you for taking the time to join us for our second quarter earnings call. Joining me for today’s discussion are Sumner Redstone, our Chairman; Philippe Dauman, our President and CEO; Thomas Dooley, our Chief Administrative Officer and CFO; and Jimmy Barge, our 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 one 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.

And now I would like to turn the call over to Sumner.

Sumner Redstone


Good afternoon everyone, I thank you for joining us today. The past few months as you know have been challenging times for many companies and the media industry is not immune to the negative impact of the current economy.

I understand the frustration of shareholders, indeed to a greater degree then many who have recently seen business prospects, share prices fall and are falling victim to the broader economic [inaudible]. However I have also witnessed more than a few economic cycles so I also know there is opportunity even in difficult times, companies that have strong and enduring attributes such as vibrant brands, a global reach and the visionary and seasoned management.

Companies like Viacom; they will be ultimately the winners. There are a multitude of reasons for optimism of Viacom, as we look out over the horizon both near and long-term. And many of these Philippe will discuss on this call today. But my optimism is fueled by a highly competitive landscape and the unprecedented pace of technological innovation both of which will result in escalating growth opportunities for companies with the right assets and the right capabilities.

I’m sure it’ll come as no surprise to anyone that I believe that companies that possess the very best content, they will ultimately emerge as the winners and of course, there is no better example of that kingly capability then Viacom. That’s why Paramount is the number one studio in [inaudible] this year. That’s why we have powerful global media networks that are top performers in countries around the world.

And that’s why MTV gains have a runaway hit franchise in Rock Band. And most important Philippe, Thomas and the rest of the leadership team remain intensely focused on implementing the right plans that will make the most of those successes and many others and unlock the full portfolio of our portfolio. They are capitalizing on size and shifts in the media today to cultivate new and attractive sources of revenue for tomorrow.

That’s how we will continue to deliver greater value to all of you, our shareholders. And now Philippe, it’s yours.

Philippe Dauman

Thank you Sumner and good afternoon everyone. I am pleased that you could join us today. Over the course of the second quarter like many companies, Viacom was faced with an increasingly challenging economic environment which resulted in a slowdown in advertising overall. Nevertheless as you see from our second quarter results, the diversity of our revenue streams provides us with greater stability then others.

In addition to consistently solid affiliate and ancillary revenue growth, increasingly solid performance of our motion picture business continues to help us mitigate challenges on the advertising front. Furthermore we move forward with several initiatives to improve efficiencies and protect our operating margins. As a result we delivered solid double-digit growth in operating income and diluted earnings per share the second quarter as compared with the prior year’s adjusted results.

With the short-term outlook for the economy difficult to predict, we are continuing to improve our organization and business processes across the company. These enduring changes will enable us to continue to succeed in the near-term and as the economy recovers we will be better positioned to capitalize on the opportunities that will emerge in the marketplace.

Importantly we remain on track to deliver double-digit EPS growth for the full year 2008. Today we will cover the following areas: a quick review of our second quarter results; a few highlights from our media networks business including an update on our successful upfront; Paramount has had a terrific first half of the year and I’ll touch on our upcoming plans; finally Thomas will take you through our numbers and discuss the drivers behind those results. Then we will be happy to take your questions.

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