|
|
|
|
|
|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the quarterly period ended June 30, 2015
|
¨
|
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 July 15, 2015
|
|
Class A common stock, par value $0.001 per share
|
|
50,323,739
|
|
Class B common stock, par value $0.001 per share
|
|
347,460,112
|
|
|
|
|
Page
|
|
||
|
||
|
Consolidated Statements of Earnings for the quarter and nine months ended June 30, 2015 and 2014
|
|
|
Consolidated Statements of Comprehensive Income for the quarter and nine months ended June 30, 2015 and 2014
|
|
|
Consolidated Balance Sheets as of June 30, 2015 and September 30, 2014
|
|
|
Consolidated Statements of Cash Flows for the
nine months ended June 30, 2015 and 2014
|
|
|
||
|
|
|
|
||
|
Quarter Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||
(in millions, except per share amounts)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Revenues
|
$
|
3,058
|
|
|
$
|
3,421
|
|
|
$
|
9,480
|
|
|
$
|
9,792
|
|
Expenses:
|
|
|
|
|
|
|
|
||||||||
Operating
|
1,252
|
|
|
1,565
|
|
|
4,931
|
|
|
4,577
|
|
||||
Selling, general and administrative
|
666
|
|
|
718
|
|
|
2,118
|
|
|
2,134
|
|
||||
Depreciation and amortization
|
56
|
|
|
52
|
|
|
168
|
|
|
163
|
|
||||
Restructuring
|
—
|
|
|
—
|
|
|
206
|
|
|
—
|
|
||||
Total expenses
|
1,974
|
|
|
2,335
|
|
|
7,423
|
|
|
6,874
|
|
||||
Operating income
|
1,084
|
|
|
1,086
|
|
|
2,057
|
|
|
2,918
|
|
||||
Interest expense, net
|
(166
|
)
|
|
(158
|
)
|
|
(492
|
)
|
|
(459
|
)
|
||||
Equity in net earnings of investee companies
|
28
|
|
|
22
|
|
|
103
|
|
|
58
|
|
||||
Loss on extinguishment of debt
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
||||
Other items, net
|
—
|
|
|
3
|
|
|
(30
|
)
|
|
—
|
|
||||
Earnings from continuing operations before provision for income taxes
|
946
|
|
|
942
|
|
|
1,638
|
|
|
2,506
|
|
||||
Provision for income taxes
|
(301
|
)
|
|
(288
|
)
|
|
(528
|
)
|
|
(784
|
)
|
||||
Net earnings from continuing operations
|
645
|
|
|
654
|
|
|
1,110
|
|
|
1,722
|
|
||||
Discontinued operations, net of tax
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Net earnings (Viacom and noncontrolling interests)
|
645
|
|
|
653
|
|
|
1,110
|
|
|
1,721
|
|
||||
Net earnings attributable to noncontrolling interests
|
(54
|
)
|
|
(43
|
)
|
|
(72
|
)
|
|
(62
|
)
|
||||
Net earnings attributable to Viacom
|
$
|
591
|
|
|
$
|
610
|
|
|
$
|
1,038
|
|
|
$
|
1,659
|
|
Amounts attributable to Viacom:
|
|
|
|
|
|
|
|
||||||||
Net earnings from continuing operations
|
$
|
591
|
|
|
$
|
611
|
|
|
$
|
1,038
|
|
|
$
|
1,660
|
|
Discontinued operations, net of tax
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Net earnings attributable to Viacom
|
$
|
591
|
|
|
$
|
610
|
|
|
$
|
1,038
|
|
|
$
|
1,659
|
|
Basic earnings per share attributable to Viacom:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
1.49
|
|
|
$
|
1.43
|
|
|
$
|
2.57
|
|
|
$
|
3.80
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net earnings
|
$
|
1.49
|
|
|
$
|
1.43
|
|
|
$
|
2.57
|
|
|
$
|
3.80
|
|
Diluted earnings per share attributable to Viacom:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
1.47
|
|
|
$
|
1.40
|
|
|
$
|
2.54
|
|
|
$
|
3.73
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net earnings
|
$
|
1.47
|
|
|
$
|
1.40
|
|
|
$
|
2.54
|
|
|
$
|
3.73
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
397.5
|
|
|
428.0
|
|
|
403.6
|
|
|
436.4
|
|
||||
Diluted
|
401.2
|
|
|
435.8
|
|
|
408.0
|
|
|
444.8
|
|
||||
Dividends declared per share of Class A and Class B common stock
|
$
|
0.40
|
|
|
$
|
0.33
|
|
|
$
|
1.06
|
|
|
$
|
0.93
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||
(in millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net earnings (Viacom and noncontrolling interests)
|
$
|
645
|
|
|
$
|
653
|
|
|
$
|
1,110
|
|
|
$
|
1,721
|
|
Other comprehensive income/(loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
73
|
|
|
(7
|
)
|
|
(189
|
)
|
|
26
|
|
||||
Defined benefit pension plans
|
43
|
|
|
—
|
|
|
22
|
|
|
—
|
|
||||
Cash flow hedges
|
2
|
|
|
—
|
|
|
2
|
|
|
1
|
|
||||
Available for sale securities
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other comprehensive income/(loss) (Viacom and noncontrolling interests)
|
119
|
|
|
(7
|
)
|
|
(165
|
)
|
|
27
|
|
||||
Comprehensive income
|
764
|
|
|
646
|
|
|
945
|
|
|
1,748
|
|
||||
Less: Comprehensive income attributable to noncontrolling interest
|
57
|
|
|
44
|
|
|
69
|
|
|
64
|
|
||||
Comprehensive income attributable to Viacom
|
$
|
707
|
|
|
$
|
602
|
|
|
$
|
876
|
|
|
$
|
1,684
|
|
|
|
|
|
|
|
|
|
(in millions, except par value)
|
June 30,
2015 |
|
September 30,
2014 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
421
|
|
|
$
|
1,000
|
|
Receivables, net
|
2,720
|
|
|
3,066
|
|
||
Inventory, net
|
841
|
|
|
846
|
|
||
Prepaid and other assets
|
433
|
|
|
340
|
|
||
Total current assets
|
4,415
|
|
|
5,252
|
|
||
Property and equipment, net
|
937
|
|
|
1,016
|
|
||
Inventory, net
|
3,890
|
|
|
3,897
|
|
||
Goodwill
|
11,472
|
|
|
11,535
|
|
||
Intangibles, net
|
356
|
|
|
399
|
|
||
Other assets
|
1,025
|
|
|
948
|
|
||
Total assets
|
$
|
22,095
|
|
|
$
|
23,047
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
331
|
|
|
$
|
475
|
|
Accrued expenses
|
711
|
|
|
969
|
|
||
Participants' share and residuals
|
797
|
|
|
993
|
|
||
Program obligations
|
664
|
|
|
703
|
|
||
Deferred revenue
|
266
|
|
|
259
|
|
||
Current portion of debt
|
267
|
|
|
18
|
|
||
Other liabilities
|
794
|
|
|
518
|
|
||
Total current liabilities
|
3,830
|
|
|
3,935
|
|
||
Noncurrent portion of debt
|
12,816
|
|
|
12,681
|
|
||
Participants' share and residuals
|
255
|
|
|
403
|
|
||
Program obligations
|
362
|
|
|
459
|
|
||
Deferred tax liabilities, net
|
365
|
|
|
266
|
|
||
Other liabilities
|
1,321
|
|
|
1,340
|
|
||
Redeemable noncontrolling interest
|
206
|
|
|
216
|
|
||
Commitments and contingencies (Note 6)
|
|
|
|
|
|
||
Viacom stockholders' equity:
|
|
|
|
||||
Class A common stock, par value $0.001, 375.0 authorized; 50.3 and 50.9 outstanding, respectively
|
—
|
|
|
—
|
|
||
Class B common stock, par value $0.001, 5,000.0 authorized; 347.6 and 363.3 outstanding, respectively
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
9,981
|
|
|
9,772
|
|
||
Treasury stock, 398.0 and 377.0 common shares held in treasury, respectively
|
(20,725
|
)
|
|
(19,225
|
)
|
||
Retained earnings
|
14,071
|
|
|
13,465
|
|
||
Accumulated other comprehensive loss
|
(455
|
)
|
|
(293
|
)
|
||
Total Viacom stockholders' equity
|
2,872
|
|
|
3,719
|
|
||
Noncontrolling interests
|
68
|
|
|
28
|
|
||
Total equity
|
2,940
|
|
|
3,747
|
|
||
Total liabilities and equity
|
$
|
22,095
|
|
|
$
|
23,047
|
|
|
|
|
|
|
Nine Months Ended
June 30, |
||||||
(in millions)
|
2015
|
|
2014
|
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net earnings (Viacom and noncontrolling interests)
|
$
|
1,110
|
|
|
$
|
1,721
|
|
Discontinued operations, net of tax
|
—
|
|
|
1
|
|
||
Net earnings from continuing operations
|
1,110
|
|
|
1,722
|
|
||
Reconciling items:
|
|
|
|
||||
Depreciation and amortization
|
168
|
|
|
163
|
|
||
Feature film and program amortization
|
3,475
|
|
|
2,884
|
|
||
Equity-based compensation
|
72
|
|
|
93
|
|
||
Equity in net earnings and distributions from investee companies
|
(99
|
)
|
|
(30
|
)
|
||
Deferred income taxes
|
38
|
|
|
(198
|
)
|
||
Operating assets and liabilities, net of acquisitions:
|
|
|
|
||||
Receivables
|
317
|
|
|
51
|
|
||
Inventory, program rights and participations
|
(3,885
|
)
|
|
(3,239
|
)
|
||
Accounts payable and other current liabilities
|
(23
|
)
|
|
42
|
|
||
Other, net
|
(93
|
)
|
|
(125
|
)
|
||
Cash provided by operations
|
1,080
|
|
|
1,363
|
|
||
INVESTING ACTIVITIES
|
|
|
|
||||
Acquisitions and investments, net
|
5
|
|
|
(5
|
)
|
||
Capital expenditures
|
(90
|
)
|
|
(81
|
)
|
||
Net cash flow used in investing activities
|
(85
|
)
|
|
(86
|
)
|
||
FINANCING ACTIVITIES
|
|
|
|
||||
Borrowings
|
990
|
|
|
1,484
|
|
||
Debt repayments
|
(600
|
)
|
|
(600
|
)
|
||
Purchase of treasury stock
|
(1,548
|
)
|
|
(2,681
|
)
|
||
Dividends paid
|
(405
|
)
|
|
(401
|
)
|
||
Excess tax benefits on equity-based compensation awards
|
45
|
|
|
80
|
|
||
Exercise of stock options
|
142
|
|
|
159
|
|
||
Other, net
|
(131
|
)
|
|
(154
|
)
|
||
Net cash flow used in financing activities
|
(1,507
|
)
|
|
(2,113
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(67
|
)
|
|
18
|
|
||
Net change in cash and cash equivalents
|
(579
|
)
|
|
(818
|
)
|
||
Cash and cash equivalents at beginning of period
|
1,000
|
|
|
2,403
|
|
||
Cash and cash equivalents at end of period
|
$
|
421
|
|
|
$
|
1,585
|
|
|
|
|
|
Inventory
(in millions)
|
June 30,
2015 |
|
September 30,
2014 |
||||
Film inventory:
|
|
|
|
||||
Released, net of amortization
|
$
|
754
|
|
|
$
|
664
|
|
Completed, not yet released
|
6
|
|
|
131
|
|
||
In process and other
|
853
|
|
|
436
|
|
||
Total film inventory, net of amortization
|
1,613
|
|
|
1,231
|
|
||
Original programming:
|
|
|
|
||||
Released, net of amortization
|
1,126
|
|
|
1,409
|
|
||
In process and other
|
717
|
|
|
631
|
|
||
Total original programming, net of amortization
|
1,843
|
|
|
2,040
|
|
||
Acquired program rights, net of amortization
|
1,177
|
|
|
1,367
|
|
||
Home entertainment inventory
|
98
|
|
|
105
|
|
||
Total inventory, net
|
4,731
|
|
|
4,743
|
|
||
Less: current portion
|
(841
|
)
|
|
(846
|
)
|
||
Total inventory-noncurrent, net
|
$
|
3,890
|
|
|
$
|
3,897
|
|
|
|
|
|
Debt
(in millions)
|
June 30,
2015 |
|
September 30,
2014 |
||||
Senior Notes and Debentures:
|
|
|
|
||||
Senior notes due February 2015, 1.250%
|
$
|
—
|
|
|
$
|
600
|
|
Senior notes due September 2015, 4.250%
|
250
|
|
|
250
|
|
||
Senior notes due April 2016, 6.250%
|
917
|
|
|
916
|
|
||
Senior notes due December 2016, 2.500%
|
399
|
|
|
398
|
|
||
Senior notes due April 2017, 3.500%
|
498
|
|
|
497
|
|
||
Senior notes due October 2017, 6.125%
|
499
|
|
|
498
|
|
||
Senior notes due September 2018, 2.500%
|
497
|
|
|
495
|
|
||
Senior notes due April 2019, 2.200%
|
398
|
|
|
398
|
|
||
Senior notes due September 2019, 5.625%
|
551
|
|
|
551
|
|
||
Senior notes due December 2019, 2.750%
|
398
|
|
|
—
|
|
||
Senior notes due March 2021, 4.500%
|
493
|
|
|
492
|
|
||
Senior notes due December 2021, 3.875%
|
592
|
|
|
591
|
|
||
Senior notes due June 2022, 3.125%
|
296
|
|
|
295
|
|
||
Senior notes due March 2023, 3.250%
|
297
|
|
|
296
|
|
||
Senior notes due September 2023, 4.250%
|
1,232
|
|
|
1,230
|
|
||
Senior notes due April 2024, 3.875%
|
543
|
|
|
543
|
|
||
Senior debentures due December 2034, 4.850%
|
592
|
|
|
—
|
|
||
Senior debentures due April 2036, 6.875%
|
1,066
|
|
|
1,065
|
|
||
Senior debentures due October 2037, 6.750%
|
75
|
|
|
75
|
|
||
Senior debentures due February 2042, 4.500%
|
243
|
|
|
243
|
|
||
Senior debentures due March 2043, 4.375%
|
1,084
|
|
|
1,081
|
|
||
Senior debentures due June 2043, 4.875%
|
246
|
|
|
246
|
|
||
Senior debentures due September 2043, 5.850%
|
1,227
|
|
|
1,227
|
|
||
Senior debentures due April 2044, 5.250%
|
544
|
|
|
544
|
|
||
Capital lease and other obligations
|
146
|
|
|
168
|
|
||
Total debt
|
13,083
|
|
|
12,699
|
|
||
Less: current portion
|
(267
|
)
|
|
(18
|
)
|
||
Total noncurrent portion of debt
|
$
|
12,816
|
|
|
$
|
12,681
|
|
|
|
|
|
•
|
2.750%
Senior Notes due December 2019 with an aggregate principal amount of
$400 million
at a price equal to
99.986%
of the principal amount.
|
•
|
4.850%
Senior Debentures due December 2034 with an aggregate principal amount of
$600 million
at a price equal to
99.543%
of the principal amount.
|
Net Periodic Benefit Cost/(Income)
(in millions)
|
Quarter Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||
2015
|
|
2014
|
|
2015
|
|
2014
|
|||||||||
Interest cost
|
$
|
10
|
|
|
$
|
11
|
|
|
$
|
32
|
|
|
$
|
35
|
|
Expected return on plan assets
|
(11
|
)
|
|
(13
|
)
|
|
(35
|
)
|
|
(38
|
)
|
||||
Recognized actuarial loss
|
2
|
|
|
1
|
|
|
5
|
|
|
1
|
|
||||
Loss on pension settlement
|
—
|
|
|
—
|
|
|
24
|
|
|
—
|
|
||||
Net periodic benefit cost/(income)
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
26
|
|
|
$
|
(2
|
)
|
|
|
|
|
|
|
|
|
Redeemable Noncontrolling Interest
|
Nine Months Ended
June 30, |
||||||
(in millions)
|
2015
|
|
2014
|
||||
Beginning balance
|
$
|
216
|
|
|
$
|
200
|
|
Net earnings
|
11
|
|
|
14
|
|
||
Distributions
|
(16
|
)
|
|
(15
|
)
|
||
Translation adjustment
|
(9
|
)
|
|
14
|
|
||
Redemption value adjustment
|
4
|
|
|
1
|
|
||
Ending Balance
|
$
|
206
|
|
|
$
|
214
|
|
|
|
|
|
|
Nine Months Ended
June 30, 2015 |
|
Nine Months Ended
June 30, 2014 |
||||||||||||||||||||
Stockholders’ Equity
(in millions)
|
Total Viacom Stockholders' Equity
|
|
Noncontrolling Interests
|
|
Total Equity
|
|
Total Viacom Stockholders' Equity
|
|
Noncontrolling Interests
|
|
Total Equity
|
||||||||||||
Beginning Balance
|
$
|
3,719
|
|
|
$
|
28
|
|
|
$
|
3,747
|
|
|
$
|
5,193
|
|
|
$
|
(3
|
)
|
|
$
|
5,190
|
|
Net earnings
|
1,038
|
|
|
72
|
|
|
1,110
|
|
|
1,659
|
|
|
62
|
|
|
1,721
|
|
||||||
Other comprehensive income/(loss)
(1)
|
(162
|
)
|
|
(3
|
)
|
|
(165
|
)
|
|
25
|
|
|
2
|
|
|
27
|
|
||||||
Noncontrolling interests
|
(4
|
)
|
|
(29
|
)
|
|
(33
|
)
|
|
(1
|
)
|
|
(26
|
)
|
|
(27
|
)
|
||||||
Dividends declared
|
(428
|
)
|
|
—
|
|
|
(428
|
)
|
|
(409
|
)
|
|
—
|
|
|
(409
|
)
|
||||||
Purchase of treasury stock
|
(1,500
|
)
|
|
—
|
|
|
(1,500
|
)
|
|
(2,550
|
)
|
|
—
|
|
|
(2,550
|
)
|
||||||
Equity-based compensation and other
|
209
|
|
|
—
|
|
|
209
|
|
|
234
|
|
|
—
|
|
|
234
|
|
||||||
Ending Balance
|
$
|
2,872
|
|
|
$
|
68
|
|
|
$
|
2,940
|
|
|
$
|
4,151
|
|
|
$
|
35
|
|
|
$
|
4,186
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 Restructuring Liability
|
|
|
|
|
|
|
|
||||||||
(in millions)
|
Media Networks
|
|
Filmed Entertainment
|
|
Corporate
|
|
Total
|
||||||||
March 31, 2015
|
$
|
137
|
|
|
$
|
57
|
|
|
$
|
12
|
|
|
$
|
206
|
|
Severance payments
|
(23
|
)
|
|
(3
|
)
|
|
(2
|
)
|
|
(28
|
)
|
||||
June 30, 2015
|
$
|
114
|
|
|
$
|
54
|
|
|
$
|
10
|
|
|
$
|
178
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Common Shares Outstanding and Anti-dilutive Common Shares
|
Quarter Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||
(in millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
Weighted average number of common shares outstanding, basic
|
397.5
|
|
|
428.0
|
|
|
403.6
|
|
|
436.4
|
|
Dilutive effect of equity awards
|
3.7
|
|
|
7.8
|
|
|
4.4
|
|
|
8.4
|
|
Weighted average number of common shares outstanding, diluted
|
401.2
|
|
|
435.8
|
|
|
408.0
|
|
|
444.8
|
|
|
|
|
|
|
|
|
|
||||
Anti-dilutive common shares
|
8.1
|
|
|
2.1
|
|
|
5.6
|
|
|
0.8
|
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow Information
|
Nine Months Ended
June 30, |
||||||
(in millions)
|
2015
|
|
2014
|
||||
Cash paid for interest
|
$
|
479
|
|
|
$
|
416
|
|
Cash paid for income taxes
|
$
|
388
|
|
|
$
|
686
|
|
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
|
||||||||
June 30, 2015
|
|
|
|
|
|
|
|
||||||||
Marketable securities
|
$
|
116
|
|
|
$
|
116
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
116
|
|
|
$
|
116
|
|
|
$
|
—
|
|
|
$
|
—
|
|
September 30, 2014
|
|
|
|
|
|
|
|
||||||||
Marketable securities
|
$
|
107
|
|
|
$
|
107
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
||||
Total
|
$
|
99
|
|
|
$
|
107
|
|
|
$
|
(8
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
Revenues by Segment
|
Quarter Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||
(in millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Media Networks
|
$
|
2,597
|
|
|
$
|
2,591
|
|
|
$
|
7,703
|
|
|
$
|
7,507
|
|
Filmed Entertainment
|
479
|
|
|
856
|
|
|
1,858
|
|
|
2,368
|
|
||||
Eliminations
|
(18
|
)
|
|
(26
|
)
|
|
(81
|
)
|
|
(83
|
)
|
||||
Total revenues
|
$
|
3,058
|
|
|
$
|
3,421
|
|
|
$
|
9,480
|
|
|
$
|
9,792
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Income/(Loss)
|
Quarter Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||
(in millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Media Networks
|
$
|
1,114
|
|
|
$
|
1,121
|
|
|
$
|
3,121
|
|
|
$
|
3,184
|
|
Filmed Entertainment
|
48
|
|
|
55
|
|
|
(11
|
)
|
|
(8
|
)
|
||||
Corporate expenses
|
(58
|
)
|
|
(61
|
)
|
|
(176
|
)
|
|
(164
|
)
|
||||
Eliminations
|
1
|
|
|
1
|
|
|
3
|
|
|
(1
|
)
|
||||
Equity-based compensation
|
(21
|
)
|
|
(30
|
)
|
|
(72
|
)
|
|
(93
|
)
|
||||
Restructuring and programming charges
|
—
|
|
|
—
|
|
|
(784
|
)
|
|
—
|
|
||||
Loss on pension settlement
|
—
|
|
|
—
|
|
|
(24
|
)
|
|
—
|
|
||||
Operating income
|
1,084
|
|
|
1,086
|
|
|
2,057
|
|
|
2,918
|
|
||||
Interest expense, net
|
(166
|
)
|
|
(158
|
)
|
|
(492
|
)
|
|
(459
|
)
|
||||
Equity in net earnings of investee companies
|
28
|
|
|
22
|
|
|
103
|
|
|
58
|
|
||||
Loss on extinguishment of debt
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
||||
Other items, net
|
—
|
|
|
3
|
|
|
(30
|
)
|
|
—
|
|
||||
Earnings from continuing operations before provision for income taxes
|
$
|
946
|
|
|
$
|
942
|
|
|
$
|
1,638
|
|
|
$
|
2,506
|
|
|
|
|
|
|
|
|
|
Total Assets
|
June 30,
2015 |
|
September 30,
2014 |
||||
(in millions)
|
|
||||||
Media Networks
|
$
|
17,140
|
|
|
$
|
17,647
|
|
Filmed Entertainment
|
5,874
|
|
|
5,440
|
|
||
Corporate/Eliminations
|
(919
|
)
|
|
(40
|
)
|
||
Total assets
|
$
|
22,095
|
|
|
$
|
23,047
|
|
|
|
|
|
Revenues by Component
|
Quarter Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||
(in millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Advertising
|
$
|
1,223
|
|
|
$
|
1,249
|
|
|
$
|
3,762
|
|
|
$
|
3,698
|
|
Feature film
|
433
|
|
|
775
|
|
|
1,712
|
|
|
2,203
|
|
||||
Affiliate fees
|
1,244
|
|
|
1,224
|
|
|
3,522
|
|
|
3,404
|
|
||||
Ancillary
|
176
|
|
|
199
|
|
|
565
|
|
|
570
|
|
||||
Eliminations
|
(18
|
)
|
|
(26
|
)
|
|
(81
|
)
|
|
(83
|
)
|
||||
Total revenues
|
$
|
3,058
|
|
|
$
|
3,421
|
|
|
$
|
9,480
|
|
|
$
|
9,792
|
|
|
|
|
|
|
|
|
|
CBS Related Party Transactions
|
Quarter Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||
(in millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Consolidated Statement of Earnings
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
32
|
|
|
$
|
47
|
|
|
$
|
124
|
|
|
$
|
158
|
|
Operating expenses
|
$
|
42
|
|
|
$
|
66
|
|
|
$
|
190
|
|
|
$
|
219
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
June 30,
2015 |
|
September 30,
2014 |
||||||||
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
||||||||
Accounts receivable
|
|
|
|
|
$
|
4
|
|
|
$
|
5
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
|
|
|
|
$
|
1
|
|
|
$
|
2
|
|
||||
Participants’ share and residuals, current
|
|
|
|
|
69
|
|
|
100
|
|
||||||
Program obligations, current
|
|
|
|
|
79
|
|
|
87
|
|
||||||
Program obligations, noncurrent
|
|
|
|
|
65
|
|
|
104
|
|
||||||
Other liabilities
|
|
|
|
|
4
|
|
|
9
|
|
||||||
Total due to CBS
|
|
|
|
|
$
|
218
|
|
|
$
|
302
|
|
||||
|
|
|
|
|
|
|
|
Other Related Party Transactions
|
Quarter Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||
(in millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Consolidated Statement of Earnings
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
24
|
|
|
$
|
29
|
|
|
$
|
82
|
|
|
$
|
109
|
|
Operating expenses
|
$
|
9
|
|
|
$
|
7
|
|
|
$
|
30
|
|
|
$
|
37
|
|
Selling, general and administrative
|
$
|
(5
|
)
|
|
$
|
(4
|
)
|
|
$
|
(11
|
)
|
|
$
|
(10
|
)
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
June 30,
2015 |
|
September 30,
2014 |
||||||||
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
||||||||
Account receivable
|
|
|
|
|
$
|
53
|
|
|
$
|
84
|
|
||||
Other assets
|
|
|
|
|
2
|
|
|
1
|
|
||||||
Total due from other related parties
|
|
|
|
|
$
|
55
|
|
|
$
|
85
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
|
|
|
|
$
|
7
|
|
|
$
|
2
|
|
||||
Other liabilities
|
|
|
|
|
45
|
|
|
37
|
|
||||||
Total due to other related parties
|
|
|
|
|
$
|
52
|
|
|
$
|
39
|
|
||||
|
|
|
|
|
|
|
|
|
Quarter Ended
June 30, |
|
Better/(Worse)
|
|
Nine Months Ended
June 30, |
|
Better/(Worse)
|
||||||||||||||||||||||
(in millions, except per share amounts)
|
2015
|
|
2014
|
|
$
|
|
%
|
|
2015
|
|
2014
|
|
$
|
|
%
|
||||||||||||||
Revenues
|
$
|
3,058
|
|
|
$
|
3,421
|
|
|
$
|
(363
|
)
|
|
(11
|
)%
|
|
$
|
9,480
|
|
|
$
|
9,792
|
|
|
$
|
(312
|
)
|
|
(3
|
)%
|
Operating income
|
1,084
|
|
|
1,086
|
|
|
(2
|
)
|
|
—
|
|
|
2,057
|
|
|
2,918
|
|
|
(861
|
)
|
|
(30
|
)
|
||||||
Adjusted operating income
|
1,084
|
|
|
1,086
|
|
|
(2
|
)
|
|
—
|
|
|
2,865
|
|
|
2,918
|
|
|
(53
|
)
|
|
(2
|
)
|
||||||
Net earnings from continuing operations attributable to Viacom
|
591
|
|
|
611
|
|
|
(20
|
)
|
|
(3
|
)
|
|
1,038
|
|
|
1,660
|
|
|
(622
|
)
|
|
(37
|
)
|
||||||
Adjusted net earnings from continuing operations attributable to Viacom
|
591
|
|
|
618
|
|
|
(27
|
)
|
|
(4
|
)
|
|
1,596
|
|
|
1,647
|
|
|
(51
|
)
|
|
(3
|
)
|
||||||
Diluted EPS from continuing operations
|
1.47
|
|
|
1.40
|
|
|
0.07
|
|
|
5
|
|
|
2.54
|
|
|
3.73
|
|
|
(1.19
|
)
|
|
(32
|
)
|
||||||
Adjusted diluted EPS from continuing operations
|
$
|
1.47
|
|
|
$
|
1.42
|
|
|
$
|
0.05
|
|
|
4
|
%
|
|
$
|
3.91
|
|
|
$
|
3.70
|
|
|
$
|
0.21
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
June 30, |
|
Better/(Worse)
|
|
Nine Months Ended
June 30, |
|
Better/(Worse)
|
||||||||||||||||||||||
(in millions)
|
2015
|
|
2014
|
|
$
|
|
%
|
|
2015
|
|
2014
|
|
$
|
|
%
|
||||||||||||||
Revenues by Component
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Advertising
|
$
|
1,223
|
|
|
$
|
1,249
|
|
|
$
|
(26
|
)
|
|
(2
|
)%
|
|
$
|
3,762
|
|
|
$
|
3,698
|
|
|
$
|
64
|
|
|
2
|
%
|
Affiliate fees
|
1,244
|
|
|
1,224
|
|
|
20
|
|
|
2
|
|
|
3,522
|
|
|
3,404
|
|
|
118
|
|
|
3
|
|
||||||
Ancillary
|
130
|
|
|
118
|
|
|
12
|
|
|
10
|
|
|
419
|
|
|
405
|
|
|
14
|
|
|
3
|
|
||||||
Total revenues by component
|
$
|
2,597
|
|
|
$
|
2,591
|
|
|
$
|
6
|
|
|
—
|
|
|
$
|
7,703
|
|
|
$
|
7,507
|
|
|
$
|
196
|
|
|
3
|
%
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Operating
|
$
|
944
|
|
|
$
|
907
|
|
|
$
|
(37
|
)
|
|
(4
|
)%
|
|
$
|
2,888
|
|
|
$
|
2,636
|
|
|
$
|
(252
|
)
|
|
(10
|
)%
|
Selling, general and administrative
|
497
|
|
|
527
|
|
|
30
|
|
|
6
|
|
|
1,570
|
|
|
1,579
|
|
|
9
|
|
|
1
|
|
||||||
Depreciation and amortization
|
42
|
|
|
36
|
|
|
(6
|
)
|
|
(17
|
)
|
|
124
|
|
|
108
|
|
|
(16
|
)
|
|
(15
|
)
|
||||||
Total expenses
|
$
|
1,483
|
|
|
$
|
1,470
|
|
|
$
|
(13
|
)
|
|
(1
|
)%
|
|
$
|
4,582
|
|
|
$
|
4,323
|
|
|
$
|
(259
|
)
|
|
(6
|
)%
|
Adjusted Operating Income
|
$
|
1,114
|
|
|
$
|
1,121
|
|
|
$
|
(7
|
)
|
|
(1
|
)%
|
|
$
|
3,121
|
|
|
$
|
3,184
|
|
|
$
|
(63
|
)
|
|
(2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
June 30, |
|
Better/(Worse)
|
|
Nine Months Ended
June 30, |
|
Better/(Worse)
|
||||||||||||||||||||||
(in millions)
|
2015
|
|
2014
|
|
$
|
|
%
|
|
2015
|
|
2014
|
|
$
|
|
%
|
||||||||||||||
Revenues by Component
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Theatrical
|
$
|
20
|
|
|
$
|
264
|
|
|
$
|
(244
|
)
|
|
(92
|
)%
|
|
$
|
394
|
|
|
$
|
652
|
|
|
$
|
(258
|
)
|
|
(40
|
)%
|
Home entertainment
|
199
|
|
|
284
|
|
|
(85
|
)
|
|
(30
|
)
|
|
709
|
|
|
813
|
|
|
(104
|
)
|
|
(13
|
)
|
||||||
License fees
|
214
|
|
|
227
|
|
|
(13
|
)
|
|
(6
|
)
|
|
609
|
|
|
738
|
|
|
(129
|
)
|
|
(17
|
)
|
||||||
Ancillary
|
46
|
|
|
81
|
|
|
(35
|
)
|
|
(43
|
)
|
|
146
|
|
|
165
|
|
|
(19
|
)
|
|
(12
|
)
|
||||||
Total revenues by component
|
$
|
479
|
|
|
$
|
856
|
|
|
$
|
(377
|
)
|
|
(44
|
)%
|
|
$
|
1,858
|
|
|
$
|
2,368
|
|
|
$
|
(510
|
)
|
|
(22
|
)%
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Operating
|
$
|
328
|
|
|
$
|
685
|
|
|
$
|
357
|
|
|
52
|
%
|
|
$
|
1,550
|
|
|
$
|
2,023
|
|
|
$
|
473
|
|
|
23
|
%
|
Selling, general and administrative
|
90
|
|
|
102
|
|
|
12
|
|
|
12
|
|
|
280
|
|
|
302
|
|
|
22
|
|
|
7
|
|
||||||
Depreciation and amortization
|
13
|
|
|
14
|
|
|
1
|
|
|
7
|
|
|
39
|
|
|
51
|
|
|
12
|
|
|
24
|
|
||||||
Total expenses
|
$
|
431
|
|
|
$
|
801
|
|
|
$
|
370
|
|
|
46
|
%
|
|
$
|
1,869
|
|
|
$
|
2,376
|
|
|
$
|
507
|
|
|
21
|
%
|
Adjusted Operating Income/(Loss)
|
$
|
48
|
|
|
$
|
55
|
|
|
$
|
(7
|
)
|
|
(13
|
)%
|
|
$
|
(11
|
)
|
|
$
|
(8
|
)
|
|
$
|
(3
|
)
|
|
(38
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions, except per share amounts)
|
|||||||||||||||
|
Nine Months Ended
June 30, 2014 |
||||||||||||||
|
Operating
Income
|
|
Pre-tax Earnings from Continuing Operations
|
|
Net Earnings from Continuing Operations
Attributable to Viacom |
|
Diluted
EPS from Continuing Operations |
||||||||
Reported results
|
$
|
2,918
|
|
|
$
|
2,506
|
|
|
$
|
1,660
|
|
|
$
|
3.73
|
|
Factors Affecting Comparability:
|
|
|
|
|
|
|
|
||||||||
Loss on extinguishment of debt
|
—
|
|
|
11
|
|
|
7
|
|
|
0.02
|
|
||||
Discrete tax benefits
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
(0.05
|
)
|
||||
Adjusted results
|
$
|
2,918
|
|
|
$
|
2,517
|
|
|
$
|
1,647
|
|
|
$
|
3.70
|
|
|
|
|
|
|
|
|
|
•
|
2.750%
Senior Notes due December 2019 with an aggregate principal amount of
$400 million
at a price equal to
99.986%
of the principal amount.
|
•
|
4.850%
Senior Debentures due December 2034 with an aggregate principal amount of
$600 million
at a price equal to
99.543%
of the principal amount.
|
Exhibit No.
|
|
Description of Exhibit
|
|
|
|
10.1*
|
|
Amendment, dated May 20, 2015, to Employment Agreement between Viacom Inc. and Michael D. Fricklas, dated October 2, 2009 (incorporated by reference to Exhibit 10.17 to the Annual Report on Form 10-K of Viacom Inc. filed February 11, 2010), as amended by Letter Agreement dated August 6, 2012 (incorporated by reference to Exhibit 10.21 to the Annual Report on Form 10-K of Viacom Inc. filed November 15, 2012) (File No. 001-32686).
|
|
|
|
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: August 6, 2015
|
By:
|
|
/s/ W
ADE
D
AVIS
|
|
|
|
Wade Davis
|
|
|
|
Executive Vice President, Chief Financial Officer
|
|
|
|
|
Date: August 6, 2015
|
By:
|
|
/s/ K
ATHERINE
G
ILL
-C
HAREST
|
|
|
|
Katherine Gill-Charest
|
|
|
|
Senior Vice President, Controller
(Chief Accounting Officer)
|
|
|
Very truly yours,
|
||
|
|
|
|
|
|
|
VIACOM INC.
|
||
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Scott Mills
|
|
|
|
|
Scott Mills
|
|
|
|
|
Executive Vice President,
|
|
|
|
|
Chief Administrative Officer
|
|
|
|
|
|
|
ACCEPTED AND AGREED:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Michael D. Fricklas
|
|
|
|
|
Michael D. Fricklas
|
|
|
|
|
|
|
|
|
|
Dated:
|
5/29/2015
|
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Viacom Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
a.
|
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;
|
b.
|
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;
|
c.
|
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
|
d.
|
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
|
5.
|
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):
|
a.
|
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
|
b.
|
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.
|
|
/s/
P
HILIPPE
P.
D
AUMAN
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Viacom Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
a.
|
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;
|
b.
|
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;
|
c.
|
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
|
d.
|
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
|
5.
|
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):
|
a.
|
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
|
b.
|
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.
|
|
/s/ W
ADE
D
AVIS
|
|
Executive Vice President, Chief Financial Officer
|
1.
|
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/
P
HILIPPE
P.
D
AUMAN
|
|
Philippe P. Dauman
|
|
August 6, 2015
|
|
1.
|
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ W
ADE
D
AVIS
|
|
Wade Davis
|
|
August 6, 2015
|
|