|
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|
|
|
|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the quarterly period ended December 31, 2013
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from
to
|
|
|
|
DELAWARE
|
20-3515052
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification Number)
|
|
|
|
|
|
|
Class of Stock
|
|
Shares Outstanding
as of January 15, 2014
|
|
Class A common stock, par value $0.001 per share
|
|
51,042,384
|
|
Class B common stock, par value $0.001 per share
|
|
387,010,782
|
|
|
|
Page
|
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||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
||
|
Quarter Ended
December 31, |
||||||
(in millions, except per share amounts)
|
2013
|
|
2012
|
||||
Revenues
|
$
|
3,197
|
|
|
$
|
3,314
|
|
Expenses:
|
|
|
|
||||
Operating
|
1,474
|
|
|
1,763
|
|
||
Selling, general and administrative
|
704
|
|
|
697
|
|
||
Depreciation and amortization
|
59
|
|
|
57
|
|
||
Total expenses
|
2,237
|
|
|
2,517
|
|
||
Operating income
|
960
|
|
|
797
|
|
||
Interest expense, net
|
(149
|
)
|
|
(110
|
)
|
||
Equity in net earnings of investee companies
|
26
|
|
|
24
|
|
||
Other items, net
|
—
|
|
|
7
|
|
||
Earnings from continuing operations before provision for income taxes
|
837
|
|
|
718
|
|
||
Provision for income taxes
|
(280
|
)
|
|
(236
|
)
|
||
Net earnings from continuing operations
|
557
|
|
|
482
|
|
||
Discontinued operations, net of tax
|
—
|
|
|
(3
|
)
|
||
Net earnings (Viacom and noncontrolling interests)
|
557
|
|
|
479
|
|
||
Net earnings attributable to noncontrolling interests
|
(10
|
)
|
|
(9
|
)
|
||
Net earnings attributable to Viacom
|
$
|
547
|
|
|
$
|
470
|
|
Amounts attributable to Viacom:
|
|
|
|
||||
Net earnings from continuing operations
|
$
|
547
|
|
|
$
|
473
|
|
Discontinued operations, net of tax
|
—
|
|
|
(3
|
)
|
||
Net earnings attributable to Viacom
|
$
|
547
|
|
|
$
|
470
|
|
Basic earnings per share attributable to Viacom:
|
|
|
|
||||
Continuing operations
|
$
|
1.23
|
|
|
$
|
0.94
|
|
Discontinued operations
|
—
|
|
|
—
|
|
||
Net earnings
|
$
|
1.23
|
|
|
$
|
0.94
|
|
Diluted earnings per share attributable to Viacom:
|
|
|
|
||||
Continuing operations
|
$
|
1.20
|
|
|
$
|
0.93
|
|
Discontinued operations
|
—
|
|
|
(0.01
|
)
|
||
Net earnings
|
$
|
1.20
|
|
|
$
|
0.92
|
|
Weighted average number of common shares outstanding:
|
|
|
|
||||
Basic
|
444.9
|
|
|
501.5
|
|
||
Diluted
|
454.0
|
|
|
509.1
|
|
||
Dividends declared per share of Class A and Class B common stock
|
$
|
0.30
|
|
|
$
|
0.275
|
|
|
|
|
|
|
Quarter Ended
December 31, |
||||||
(in millions)
|
2013
|
|
2012
|
||||
Net earnings (Viacom and noncontrolling interests)
|
$
|
557
|
|
|
$
|
479
|
|
Other comprehensive income, net of tax:
|
|
|
|
||||
Foreign currency translation adjustments
|
26
|
|
|
(18
|
)
|
||
Defined benefit pension plans, net of income tax expense of $0 and $11, respectively
|
—
|
|
|
14
|
|
||
Cash flow hedges, net of income tax (benefit) of $0 and $(6), respectively
|
—
|
|
|
7
|
|
||
Available for sale securities, net of income tax expense of $0 and $1, respectively
|
—
|
|
|
3
|
|
||
Other comprehensive income (Viacom and noncontrolling interests)
|
26
|
|
|
6
|
|
||
Comprehensive income
|
583
|
|
|
485
|
|
||
Less: Comprehensive income attributable to noncontrolling interests
|
11
|
|
|
7
|
|
||
Comprehensive income attributable to Viacom
|
$
|
572
|
|
|
$
|
478
|
|
|
|
|
|
(in millions, except par value)
|
December 31,
2013 |
|
September 30,
2013 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,417
|
|
|
$
|
2,403
|
|
Receivables, net
|
2,916
|
|
|
2,987
|
|
||
Inventory, net
|
728
|
|
|
770
|
|
||
Deferred tax assets, net
|
60
|
|
|
58
|
|
||
Prepaid and other assets
|
326
|
|
|
508
|
|
||
Total current assets
|
5,447
|
|
|
6,726
|
|
||
Property and equipment, net
|
1,025
|
|
|
1,040
|
|
||
Inventory, net
|
4,156
|
|
|
3,945
|
|
||
Goodwill
|
11,092
|
|
|
11,079
|
|
||
Intangibles, net
|
266
|
|
|
279
|
|
||
Other assets
|
792
|
|
|
760
|
|
||
Total assets
|
$
|
22,778
|
|
|
$
|
23,829
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
242
|
|
|
$
|
316
|
|
Accrued expenses
|
789
|
|
|
1,074
|
|
||
Participants’ share and residuals
|
1,090
|
|
|
1,110
|
|
||
Program rights obligations
|
556
|
|
|
576
|
|
||
Deferred revenue
|
218
|
|
|
230
|
|
||
Current portion of debt
|
18
|
|
|
18
|
|
||
Other liabilities
|
310
|
|
|
466
|
|
||
Total current liabilities
|
3,223
|
|
|
3,790
|
|
||
Noncurrent portion of debt
|
11,868
|
|
|
11,867
|
|
||
Participants’ share and residuals
|
376
|
|
|
437
|
|
||
Program rights obligations
|
500
|
|
|
527
|
|
||
Deferred tax liabilities, net
|
621
|
|
|
649
|
|
||
Other liabilities
|
1,185
|
|
|
1,169
|
|
||
Redeemable noncontrolling interest
|
206
|
|
|
200
|
|
||
Commitments and contingencies (Note 7)
|
|
|
|
|
|
||
Viacom stockholders’ equity:
|
|
|
|
||||
Class A common stock, par value $0.001, 375.0 authorized; 51.0 and 51.1 outstanding, respectively
|
—
|
|
|
—
|
|
||
Class B common stock, par value $0.001, 5,000.0 authorized; 388.5 and 398.2 outstanding, respectively
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
9,513
|
|
|
9,490
|
|
||
Treasury stock, 346.6 and 336.3 common shares held in treasury, respectively
|
(16,675
|
)
|
|
(15,825
|
)
|
||
Retained earnings
|
12,040
|
|
|
11,629
|
|
||
Accumulated other comprehensive loss
|
(76
|
)
|
|
(101
|
)
|
||
Total Viacom stockholders’ equity
|
4,802
|
|
|
5,193
|
|
||
Noncontrolling interests
|
(3
|
)
|
|
(3
|
)
|
||
Total equity
|
4,799
|
|
|
5,190
|
|
||
Total liabilities and equity
|
$
|
22,778
|
|
|
$
|
23,829
|
|
|
|
|
|
|
Quarter Ended
December 31, |
||||||
(in millions)
|
2013
|
|
2012
|
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net earnings (Viacom and noncontrolling interests)
|
$
|
557
|
|
|
$
|
479
|
|
Discontinued operations, net of tax
|
—
|
|
|
3
|
|
||
Net earnings from continuing operations
|
557
|
|
|
482
|
|
||
Reconciling items:
|
|
|
|
||||
Depreciation and amortization
|
59
|
|
|
57
|
|
||
Feature film and program amortization
|
907
|
|
|
1,022
|
|
||
Equity-based compensation
|
32
|
|
|
31
|
|
||
Equity in net earnings and distributions from investee companies
|
(22
|
)
|
|
(15
|
)
|
||
Deferred income taxes
|
(30
|
)
|
|
61
|
|
||
Operating assets and liabilities, net of acquisitions:
|
|
|
|
||||
Receivables
|
90
|
|
|
(45
|
)
|
||
Inventory, program rights and participations
|
(1,185
|
)
|
|
(912
|
)
|
||
Accounts payable and other current liabilities
|
(121
|
)
|
|
(75
|
)
|
||
Other, net
|
6
|
|
|
(37
|
)
|
||
Cash provided by operations
|
293
|
|
|
569
|
|
||
INVESTING ACTIVITIES
|
|
|
|
||||
Acquisitions and investments, net of cash acquired
|
6
|
|
|
(10
|
)
|
||
Capital expenditures
|
(20
|
)
|
|
(36
|
)
|
||
Net cash flow used in investing activities
|
(14
|
)
|
|
(46
|
)
|
||
FINANCING ACTIVITIES
|
|
|
|
||||
Borrowings
|
—
|
|
|
242
|
|
||
Stock repurchases
|
(970
|
)
|
|
(700
|
)
|
||
Dividends paid
|
(271
|
)
|
|
(277
|
)
|
||
Excess tax benefits on equity-based compensation awards
|
5
|
|
|
16
|
|
||
Exercise of stock options
|
11
|
|
|
73
|
|
||
Other, net
|
(42
|
)
|
|
(49
|
)
|
||
Net cash flow used in financing activities
|
(1,267
|
)
|
|
(695
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
2
|
|
|
(5
|
)
|
||
Net change in cash and cash equivalents
|
(986
|
)
|
|
(177
|
)
|
||
Cash and cash equivalents at beginning of period
|
2,403
|
|
|
848
|
|
||
Cash and cash equivalents at end of period
|
$
|
1,417
|
|
|
$
|
671
|
|
|
|
|
|
Weighted Average Number of Common Shares Outstanding and Anti-dilutive Common Shares
|
Quarter Ended
December 31, |
||||
(in millions)
|
2013
|
|
2012
|
||
Weighted average number of common shares outstanding, basic
|
444.9
|
|
|
501.5
|
|
Dilutive effect of equity awards
|
9.1
|
|
|
7.6
|
|
Weighted average number of common shares outstanding, diluted
|
454.0
|
|
|
509.1
|
|
Anti-dilutive common shares
|
—
|
|
|
7.3
|
|
|
|
|
|
Inventory
(in millions)
|
December 31,
2013 |
|
September 30,
2013 |
||||
Film inventory:
|
|
|
|
||||
Released, net of amortization
|
$
|
651
|
|
|
$
|
570
|
|
Completed, not yet released
|
12
|
|
|
40
|
|
||
In process and other
|
777
|
|
|
653
|
|
||
Total film inventory, net of amortization
|
1,440
|
|
|
1,263
|
|
||
Original programming:
|
|
|
|
||||
Released, net of amortization
|
1,416
|
|
|
1,343
|
|
||
In process and other
|
561
|
|
|
590
|
|
||
Total original programming, net of amortization
|
1,977
|
|
|
1,933
|
|
||
Acquired program rights, net of amortization
|
1,335
|
|
|
1,391
|
|
||
Home entertainment inventory, net of allowance of $79 and $75, respectively
|
132
|
|
|
128
|
|
||
Total inventory, net
|
4,884
|
|
|
4,715
|
|
||
Less current portion
|
(728
|
)
|
|
(770
|
)
|
||
Total inventory-noncurrent, net
|
$
|
4,156
|
|
|
$
|
3,945
|
|
|
|
|
|
Debt
(in millions)
|
December 31,
2013 |
|
September 30,
2013 |
||||
Senior Notes and Debentures:
|
|
|
|
||||
Senior notes due September 2014, 4.375%
|
$
|
599
|
|
|
$
|
599
|
|
Senior notes due February 2015, 1.250%
|
600
|
|
|
600
|
|
||
Senior notes due September 2015, 4.250%
|
250
|
|
|
250
|
|
||
Senior notes due April 2016, 6.250%
|
917
|
|
|
917
|
|
||
Senior notes due December 2016, 2.500%
|
398
|
|
|
398
|
|
||
Senior notes due April 2017, 3.500%
|
498
|
|
|
497
|
|
||
Senior notes due October 2017, 6.125%
|
499
|
|
|
499
|
|
||
Senior notes due September 2018, 2.500%
|
497
|
|
|
497
|
|
||
Senior notes due September 2019, 5.625%
|
552
|
|
|
552
|
|
||
Senior notes due March 2021, 4.500%
|
494
|
|
|
494
|
|
||
Senior notes due December 2021, 3.875%
|
592
|
|
|
592
|
|
||
Senior notes due June 2022, 3.125%
|
296
|
|
|
296
|
|
||
Senior notes due March 2023, 3.250%
|
298
|
|
|
298
|
|
||
Senior notes due September 2023, 4.250%
|
1,238
|
|
|
1,237
|
|
||
Senior debentures due April 2036, 6.875%
|
1,072
|
|
|
1,072
|
|
||
Senior debentures due October 2037, 6.750%
|
76
|
|
|
76
|
|
||
Senior debentures due February 2042, 4.500%
|
245
|
|
|
245
|
|
||
Senior debentures due March 2043, 4.375%
|
1,086
|
|
|
1,085
|
|
||
Senior debentures due June 2043, 4.875%
|
249
|
|
|
249
|
|
||
Senior debentures due September 2043, 5.850%
|
1,242
|
|
|
1,242
|
|
||
Capital lease and other obligations
|
188
|
|
|
190
|
|
||
Total debt
|
11,886
|
|
|
11,885
|
|
||
Less current portion
|
(18
|
)
|
|
(18
|
)
|
||
Total noncurrent portion of debt
|
$
|
11,868
|
|
|
$
|
11,867
|
|
|
|
|
|
Net Periodic Benefit (Income) Costs
(in millions)
|
Quarter Ended
December 31, |
||||||
2013
|
|
2012
|
|||||
Service cost
|
$
|
—
|
|
|
$
|
8
|
|
Interest cost
|
12
|
|
|
11
|
|
||
Expected return on plan assets
|
(13
|
)
|
|
(11
|
)
|
||
Recognized actuarial loss
|
—
|
|
|
3
|
|
||
Prior service cost
|
—
|
|
|
1
|
|
||
Net periodic benefit (income) costs
|
$
|
(1
|
)
|
|
$
|
12
|
|
|
|
|
|
Financial Asset (Liability)
|
|
|
Quoted Prices In
Active Markets for
Identical Assets
|
|
Significant Other
Observable
Inputs
|
|
Significant
Unobservable
Inputs
|
||||||||
(in millions)
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
December 31, 2013
|
|
|
|
|
|
|
|
||||||||
Marketable securities
|
$
|
97
|
|
|
$
|
97
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
97
|
|
|
$
|
97
|
|
|
$
|
—
|
|
|
$
|
—
|
|
September 30, 2013
|
|
|
|
|
|
|
|
||||||||
Marketable securities
|
$
|
89
|
|
|
$
|
89
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
Total
|
$
|
87
|
|
|
$
|
89
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2013
|
|
As of December 31, 2012
|
||||||||||||||||||||
Stockholders’ Equity
(in millions)
|
Total Viacom Stockholders' Equity
|
|
Noncontrolling Interests
|
|
Total Equity
|
|
Total Viacom Stockholders' Equity
|
|
Noncontrolling Interests
|
|
Total Equity
|
||||||||||||
Balance at beginning of period
|
$
|
5,193
|
|
|
$
|
(3
|
)
|
|
$
|
5,190
|
|
|
$
|
7,448
|
|
|
$
|
(9
|
)
|
|
$
|
7,439
|
|
Net earnings
|
547
|
|
|
10
|
|
|
557
|
|
|
470
|
|
|
9
|
|
|
479
|
|
||||||
Other comprehensive income (loss)
|
25
|
|
|
1
|
|
|
26
|
|
|
8
|
|
|
(2
|
)
|
|
6
|
|
||||||
Noncontrolling interests
|
(2
|
)
|
|
(11
|
)
|
|
(13
|
)
|
|
(1
|
)
|
|
(7
|
)
|
|
(8
|
)
|
||||||
Dividends declared
|
(134
|
)
|
|
—
|
|
|
(134
|
)
|
|
(140
|
)
|
|
—
|
|
|
(140
|
)
|
||||||
Purchase of treasury stock
|
(850
|
)
|
|
—
|
|
|
(850
|
)
|
|
(700
|
)
|
|
—
|
|
|
(700
|
)
|
||||||
Equity-based compensation and other
|
23
|
|
|
—
|
|
|
23
|
|
|
80
|
|
|
—
|
|
|
80
|
|
||||||
Balance at end of period
|
$
|
4,802
|
|
|
$
|
(3
|
)
|
|
$
|
4,799
|
|
|
$
|
7,165
|
|
|
$
|
(9
|
)
|
|
$
|
7,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring Liability
|
|
Media Networks
|
Filmed Entertainment
|
Total
|
||||||
(in millions)
|
|
|
|
|
||||||
September 30, 2013
|
|
$
|
76
|
|
$
|
27
|
|
$
|
103
|
|
Severance payments
|
|
(8
|
)
|
(6
|
)
|
(14
|
)
|
|||
December 31, 2013
|
|
$
|
68
|
|
$
|
21
|
|
$
|
89
|
|
|
|
|
|
|
Supplemental Cash Flow Information
|
Quarter Ended
December 31, |
||||||
(in millions)
|
2013
|
|
2012
|
||||
Cash paid for interest
|
$
|
122
|
|
|
$
|
155
|
|
Cash paid for income taxes
|
$
|
124
|
|
|
$
|
59
|
|
Redeemable Noncontrolling Interest
|
Quarter Ended
December 31, |
||||||
(in millions)
|
2013
|
|
2012
|
||||
Beginning balance
|
$
|
200
|
|
|
$
|
179
|
|
Net earnings
|
6
|
|
|
5
|
|
||
Distributions
|
(8
|
)
|
|
(8
|
)
|
||
Translation adjustment
|
6
|
|
|
(2
|
)
|
||
Redemption value adjustment
|
2
|
|
|
1
|
|
||
Ending Balance
|
$
|
206
|
|
|
$
|
175
|
|
|
|
|
|
Revenues by Segment
|
Quarter Ended
December 31, |
||||||
(in millions)
|
2013
|
|
2012
|
||||
Media Networks
|
$
|
2,541
|
|
|
$
|
2,394
|
|
Filmed Entertainment
|
681
|
|
|
975
|
|
||
Eliminations
|
(25
|
)
|
|
(55
|
)
|
||
Total revenues
|
$
|
3,197
|
|
|
$
|
3,314
|
|
|
|
|
|
Adjusted Operating Income (Loss)
|
Quarter Ended
December 31, |
||||||
(in millions)
|
2013
|
|
2012
|
||||
Media Networks
|
$
|
1,114
|
|
|
$
|
1,030
|
|
Filmed Entertainment
|
(74
|
)
|
|
(139
|
)
|
||
Corporate expenses
|
(51
|
)
|
|
(60
|
)
|
||
Equity-based compensation
|
(32
|
)
|
|
(31
|
)
|
||
Eliminations
|
3
|
|
|
(3
|
)
|
||
Operating income
|
960
|
|
|
797
|
|
||
Interest expense, net
|
(149
|
)
|
|
(110
|
)
|
||
Equity in net earnings of investee companies
|
26
|
|
|
24
|
|
||
Other items, net
|
—
|
|
|
7
|
|
||
Earnings from continuing operations before provision for income taxes
|
$
|
837
|
|
|
$
|
718
|
|
|
|
|
|
Total Assets
|
December 31,
2013 |
|
September 30,
2013 |
||||
(in millions)
|
|
||||||
Media Networks
|
$
|
16,778
|
|
|
$
|
16,653
|
|
Filmed Entertainment
|
5,381
|
|
|
5,647
|
|
||
Corporate/Eliminations
|
619
|
|
|
1,529
|
|
||
Total assets
|
$
|
22,778
|
|
|
$
|
23,829
|
|
|
|
|
|
Revenues by Component
|
Quarter Ended
December 31, |
||||||
(in millions)
|
2013
|
|
2012
|
||||
Advertising
|
$
|
1,325
|
|
|
$
|
1,269
|
|
Feature film
|
595
|
|
|
896
|
|
||
Affiliate fees
|
1,066
|
|
|
972
|
|
||
Ancillary
|
236
|
|
|
232
|
|
||
Eliminations
|
(25
|
)
|
|
(55
|
)
|
||
Total revenues
|
$
|
3,197
|
|
|
$
|
3,314
|
|
|
|
|
|
CBS Related Party Transactions
|
|
|
Quarter Ended
December 31, |
||||||||
(in millions)
|
|
|
|
|
2013
|
|
2012
|
||||
Consolidated Statement of Earnings
|
|
|
|
|
|
|
|
||||
Revenue
|
|
|
|
|
$
|
73
|
|
|
$
|
81
|
|
Operating expenses
|
|
|
|
|
$
|
96
|
|
|
$
|
98
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
December 31,
2013 |
|
September 30,
2013 |
||||
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
||||
Accounts receivable
|
|
|
|
|
$
|
5
|
|
|
$
|
5
|
|
Other assets
|
|
|
|
|
—
|
|
|
—
|
|
||
Total due from CBS
|
|
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
|
|
|
|
|
|
|
||||
Accounts payable
|
|
|
|
|
$
|
5
|
|
|
$
|
3
|
|
Participants' share and residuals, current
|
|
|
|
|
101
|
|
|
115
|
|
||
Program rights obligations, current
|
|
|
|
|
87
|
|
|
99
|
|
||
Program rights obligations, noncurrent
|
|
|
|
|
126
|
|
|
139
|
|
||
Other liabilities
|
|
|
|
|
15
|
|
|
15
|
|
||
Total due to CBS
|
|
|
|
|
$
|
334
|
|
|
$
|
371
|
|
|
|
|
|
|
|
|
|
Other Related Party Transactions
|
|
|
Quarter Ended
December 31, |
||||||||
(in millions)
|
|
|
|
|
2013
|
|
2012
|
||||
Consolidated Statement of Earnings
|
|
|
|
|
|
|
|
||||
Revenue
|
|
|
|
|
$
|
13
|
|
|
$
|
36
|
|
Operating expenses
|
|
|
|
|
$
|
2
|
|
|
4
|
|
|
Selling, general and administrative
|
|
|
|
|
$
|
(2
|
)
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
December 31,
2013 |
|
September 30,
2013 |
||||
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
||||
Account receivable
|
|
|
|
|
$
|
64
|
|
|
$
|
84
|
|
Other assets
|
|
|
|
|
1
|
|
|
1
|
|
||
Total due from other related parties
|
|
|
|
|
$
|
65
|
|
|
$
|
85
|
|
|
|
|
|
|
|
|
|
||||
Accounts payable
|
|
|
|
|
$
|
6
|
|
|
$
|
4
|
|
Other liabilities
|
|
|
|
|
28
|
|
|
26
|
|
||
Total due to other related parties
|
|
|
|
|
$
|
34
|
|
|
$
|
30
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
December 31, |
|
Better/
(Worse)
|
|||||||||||
(in millions, except per share amounts)
|
2013
|
|
2012
|
|
$
|
|
%
|
|||||||
Revenues
|
$
|
3,197
|
|
|
$
|
3,314
|
|
|
$
|
(117
|
)
|
|
(4
|
)%
|
Operating income
|
960
|
|
|
797
|
|
|
163
|
|
|
20
|
|
|||
Net earnings from continuing operations attributable to Viacom
|
547
|
|
|
473
|
|
|
74
|
|
|
16
|
|
|||
Adjusted net earnings from continuing operations attributable to Viacom
|
547
|
|
|
461
|
|
|
86
|
|
|
19
|
|
|||
Diluted EPS from continuing operations
|
1.20
|
|
|
0.93
|
|
|
0.27
|
|
|
29
|
|
|||
Adjusted diluted EPS from continuing operations
|
$
|
1.20
|
|
|
$
|
0.91
|
|
|
$
|
0.29
|
|
|
32
|
%
|
|
|
|
|
|
|
|
|
|
Quarter Ended
December 31, |
|
Better/
(Worse)
|
|||||||||||
(in millions)
|
2013
|
|
2012
|
|
$
|
|
%
|
|||||||
Revenues by Component
|
|
|
|
|
|
|
|
|||||||
Advertising
|
$
|
1,325
|
|
|
$
|
1,269
|
|
|
$
|
56
|
|
|
4
|
%
|
Affiliate fees
|
1,066
|
|
|
972
|
|
|
94
|
|
|
10
|
|
|||
Ancillary
|
150
|
|
|
153
|
|
|
(3
|
)
|
|
(2
|
)
|
|||
Total revenues by component
|
$
|
2,541
|
|
|
$
|
2,394
|
|
|
$
|
147
|
|
|
6
|
%
|
Expenses
|
|
|
|
|
|
|
|
|||||||
Operating
|
$
|
868
|
|
|
$
|
833
|
|
|
$
|
(35
|
)
|
|
(4
|
)%
|
Selling, general and administrative
|
523
|
|
|
497
|
|
|
(26
|
)
|
|
(5
|
)
|
|||
Depreciation and amortization
|
36
|
|
|
34
|
|
|
(2
|
)
|
|
(6
|
)
|
|||
Total expenses
|
$
|
1,427
|
|
|
$
|
1,364
|
|
|
$
|
(63
|
)
|
|
(5
|
)%
|
Adjusted Operating Income
|
$
|
1,114
|
|
|
$
|
1,030
|
|
|
$
|
84
|
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
Quarter Ended
December 31, |
|
Better/(Worse)
|
|||||||||||
(in millions)
|
2013
|
|
2012
|
|
$
|
|
%
|
|||||||
Revenues by Component
|
|
|
|
|
|
|
|
|||||||
Theatrical
|
$
|
159
|
|
|
$
|
328
|
|
|
$
|
(169
|
)
|
|
(52
|
)%
|
Home entertainment
|
216
|
|
|
341
|
|
|
(125
|
)
|
|
(37
|
)
|
|||
Television license fees
|
220
|
|
|
227
|
|
|
(7
|
)
|
|
(3
|
)
|
|||
Ancillary
|
86
|
|
|
79
|
|
|
7
|
|
|
9
|
|
|||
Total revenues by component
|
$
|
681
|
|
|
$
|
975
|
|
|
$
|
(294
|
)
|
|
(30
|
)%
|
Expenses
|
|
|
|
|
|
|
|
|||||||
Operating
|
$
|
634
|
|
|
$
|
982
|
|
|
$
|
348
|
|
|
35
|
%
|
Selling, general & administrative
|
100
|
|
|
110
|
|
|
10
|
|
|
9
|
|
|||
Depreciation & amortization
|
21
|
|
|
22
|
|
|
1
|
|
|
5
|
|
|||
Total expenses
|
$
|
755
|
|
|
$
|
1,114
|
|
|
$
|
359
|
|
|
32
|
%
|
Adjusted Operating Income/(Loss)
|
$
|
(74
|
)
|
|
$
|
(139
|
)
|
|
$
|
65
|
|
|
47
|
%
|
|
|
|
|
|
|
|
|
(in millions, except per share amounts)
|
|||||||||||||||
|
Quarter Ended
December 31, 2012 |
||||||||||||||
|
Operating
Income
|
|
Pre-tax Earnings
from Continuing
Operations
|
|
Net Earnings from
Continuing Operations
Attributable to Viacom
|
|
Diluted
EPS from
Continuing
Operations
|
||||||||
Reported results
|
$
|
797
|
|
|
$
|
718
|
|
|
$
|
473
|
|
|
$
|
0.93
|
|
Factors Affecting Comparability:
|
|
|
|
|
|
|
|
||||||||
Discrete tax benefits
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
(0.02
|
)
|
||||
Adjusted results
|
$
|
797
|
|
|
$
|
718
|
|
|
$
|
461
|
|
|
$
|
0.91
|
|
|
|
|
|
|
|
|
|
|
Total Number
of Shares
Purchased
|
|
Average Price
Paid per Share
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
(1)
|
|
Approximate
Dollar Value of
Shares that May
Yet Be Purchased
Under Program
|
||||||
Open Market Purchases
|
(thousands)
|
|
(dollars)
|
|
(thousands)
|
|
(millions)
|
||||||
Month ended October 31, 2013
|
2,766
|
|
|
$
|
83.15
|
|
|
2,766
|
|
|
$
|
9,670
|
|
Month ended November 30, 2013
|
3,095
|
|
|
$
|
80.77
|
|
|
3,095
|
|
|
$
|
9,420
|
|
Month ended December 31, 2013
|
4,442
|
|
|
$
|
83.30
|
|
|
4,442
|
|
|
$
|
9,050
|
|
Total
|
10,303
|
|
|
|
|
10,303
|
|
|
|
||||
|
|
|
|
|
|
|
|
(1)
|
There is no expiration date for the program.
|
Exhibit No.
|
|
Description of Exhibit
|
10.1*
|
|
Summary of Viacom Inc. Compensation for Outside Directors.
|
|
|
|
10.2*
|
|
Viacom Inc. Deferred Compensation Plan for Outside Directors, as amended and restated as of November 13, 2013.
|
|
|
|
10.3*
|
|
Viacom Inc. 2011 RSU Plan for Outside Directors, as amended and restated as of November 13, 2013.
|
|
|
|
10.4*
|
|
Amendment No. 1, dated January 16, 2014, to the Viacom Inc. 2011 RSU Plan for Outside Directors, as amended and restated as of November 13, 2013.
|
|
|
|
31.1*
|
|
Certification of the Chief Executive Officer of Viacom Inc. pursuant to Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2*
|
|
Certification of the Chief Financial Officer of Viacom Inc. pursuant to Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1*
|
|
Certification of the Chief Executive Officer of Viacom Inc. furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2*
|
|
Certification of the Chief Financial Officer of Viacom Inc. furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS*
|
|
XBRL Instance Document.
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
*
|
Filed herewith
|
|
VIACOM INC.
|
||
|
|
|
|
Date: January 30, 2014
|
By:
|
|
/s/ W
ADE
D
AVIS
|
|
|
|
Wade Davis
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Executive Vice President, Chief Financial Officer
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Date: January 30, 2014
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By:
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/s/ K
ATHERINE
G
ILL
-C
HAREST
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Katherine Gill-Charest
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Senior Vice President, Controller
(Chief Accounting Officer)
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•
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An annual Board retainer of $100,000, payable in equal installments quarterly in advance. The Vice Chair of the Board receives an annual retainer of $200,000.
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•
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The Chairs of the Audit and Compensation Committees each receive an annual retainer of $20,000, payable in equal installments quarterly in advance, and the members of those Committees receive a per meeting attendance fee of $2,000.
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•
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The Chair of the Governance and Nominating Committee receives an annual retainer of $15,000, payable in equal installments quarterly in advance, and the members of that Committee receive a per meeting attendance fee of $1,500.
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•
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An annual grant on January 31st of each year of Restricted Share Units (RSUs) of Class B Common Stock, the number of which is determined by dividing (i) $175,000 by (ii) the fair market value of one share of Class B Common Stock on The NASDAQ Stock Market on the date of grant. The RSUs vest one year from the date of grant and are payable to outside directors in shares of Class B Common Stock upon vesting unless the outside director elects to defer settlement of the RSUs to a future date. Outside directors are entitled to receive dividend equivalents on the RSUs in the event the Company pays a regular cash dividend on its Class B Common Stock.
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3.
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Deferred Compensation Accounts
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(i)
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First, on the first day of each calendar quarter, any dollar amount remaining in such account from the preceding calendar quarter, plus all dollar amounts for fees and any cash dividends credited to such account during the preceding calendar quarter and (without duplication) meeting fees earned during the preceding calendar quarter, shall be credited with interest computed in the manner described in Paragraph 3(a) above.
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(ii)
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Next, beginning on January 1, 2014 and the first day of each subsequent calendar quarter, the Participant shall receive an automatic grant of restricted stock units under the RSU Plan based on the dollar amount in such account after the adjustments pursuant to Section 3(b)(i) above,
plus
the dollar amount of deferred quarterly retainer fees credited on such day to this account. Upon the making of such grant (which, under the terms of the RSU Plan, may include fractional restricted stock units), the dollar amount in the Participant’s Stock Unit Account shall be reset to zero.
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(iii)
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Subject to Section 3(c) below, Class A Common Stock Unit Shares and Class B Common Stock Unit Shares (collectively “Stock Unit Shares”) and any other stock unit shares held in the Stock Unit Account (“Other Stock Unit Shares”) credited to a Participant’s Stock Unit Account prior to January 1, 2014 shall continue to be held in the Stock Unit Account, but no additional Class A Common Stock Unit Shares or Class B Common Stock Unit Shares or Other Stock Unit Shares shall be credited to a Participant’s Stock Unit Account on or after January 1, 2014.
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(i)
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Participants whose Stock Unit Account is credited with Stock Unit Shares as of October 1, 2013 will be given a one-time opportunity to irrevocably elect to have their Stock Unit Shares settled by delivery of shares of Viacom Inc. Class B Common Stock delivered under the RSU Plan rather than by cash payment under this Plan. The number of shares of Viacom Inc. Class B Common Stock to which a Participant making such election shall be entitled shall equal (A) the number of Class B Common Stock Unit Shares credited to the Participant’s Stock Unit Account as of December 31, 2013
plus
(B) the number obtained by multiplying (1) a fraction the numerator of which is the closing market price for Viacom Inc. Class A Common Stock on the NASDAQ Global Select Market on December 31, 2013 and the denominator of which is the closing market price for Viacom Inc. Class B Common Stock on such market on such date times (2) the number of Class A Common Stock Unit Shares credited to the Participant’s Stock Unit Account as of such date.
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(ii)
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Participants whose Stock Unit Account is credited with Other Stock Unit Shares as of October 1, 2013 will be given a one-time opportunity to irrevocably elect to have their Other Stock Unit Shares settled by delivery of Viacom Inc. Class B Common Stock delivered under the RSU Plan rather than by cash payment under this Plan. The number of shares of Viacom Inc. Class B Common Stock to which a Participant making such election shall be entitled shall equal the number obtained by multiplying (A) a fraction the numerator of which is the closing market price for the stock for which Stock Unit Shares are held on December 31, 2013 and the denominator of which is the closing market price for Viacom Inc. Class B Common Stock on such date, times (B) the number of such Other Stock Unit Shares credited to the Participant’s Stock Unit Account as of such date.
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(iii)
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Any fractional shares resulting from such calculations shall be held as a cash credit to the Participant’s Stock Unit Account and shall be governed by Section 3(b). A Participant’s elections under this Section 3(c) shall not alter in any manner the payment schedule for the settlement of the Participant’s Stock Unit Account, the timing of which shall be governed by the payment election previously made by the Participant under this Plan.
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Viacom Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/
S
/ P
HILIPPE
P. D
AUMAN
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President and Chief Executive Officer
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Viacom Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/
S
/ W
ADE
D
AVIS
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Executive Vice President, Chief Financial Officer
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1.
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the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/
S
/ P
HILIPPE
P. D
AUMAN
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Philippe P. Dauman
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January 30, 2014
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1.
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the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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S
/ W
ADE
D
AVIS
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Wade Davis
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January 30, 2014
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