TIME WARNER BUSINESSES REPORT RECORD FIRST QUARTER; Combined EBITDA Growth 32%; Warner Bros., HBO and Cable Post Record First Quarters; Time Warner Cable's Internal Growth Rate is 13% in the Quarter.NEW YORK--(BUSINESS WIRE)--April 15, 1996--Time Warner Inc. (Time Warner Time Warner Inc. (NYSE: TWX), formerly known as AOL Time Warner, is the world's largest media and entertainment conglomerate headquartered in New York City, with major operations in film, television, publishing, Internet service and telecommunications. ) and Time Warner Entertainment Company, L.P. (TWE TWE Test of Written English TWE ThinkWave Educator (teacher productivity application) TWE That Was Easy TWE tap water enema TWE Threat Warning Equipment TWE Transitional Work Experience TWE Triangle Wind Ensemble ), reported record combined earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
BROS Benefits and Retirement Operations Section (King County, Washington) BROS Barnes and Richmond Operatic Society (London, UK) ., HBO Hyperbaric oxygen therapy (HBO) A form of oxygen therapy in which the patient breathes oxygen in a pressurized chamber. Mentioned in: Ozone Therapy and Time Warner Cable This article or section needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. all posted records. Below are EBITDA and revenues for the first quarter (in millions):
First Quarter
1996 1995
TIME WARNER Publishing $ 80 $ 77 Music 146 173 Cable 112 --- ENTERTAINMENT GROUP Filmed Entertainment 136 123 Six Flags Theme Parks(a) --- 2 Broadcasting--The WB Network (24) (21) Programming--HBO 81 71 Cable 368 256 Combined EBITDA $ 899 $ 681 Combined Revenues $4,555 $3,890 (a) Deconsolidated as of June 23, 1995, as Six Flags is now 49% owned.
Commenting on the company's first-quarter performance, Chairman
and CEO Gerald M. Levin said: "I am very pleased by the performance
of our cable group, which generated an internal growth rate of 13% and
is now positioned to return on a full-year basis to its strong
historical growth pattern. I am also very pleased that Warner Bros.
and HBO again had record quarters, continuing their strong growth.
Though publishing gains were modest in the quarter, I remain
confident that the division will finish the year with double-digit
growth. While Time Warner's music business retained its leading
domestic market share, the overexpansion of the domestic retail music
business has negatively impacted the entire music industry. Yet, I
expect that Time Warner's music businesses will improve over the
course of the year."
Mr. Levin continued, "In April, Time Warner issued a new series
of exchangeable preferred stock which realized the cash value of a
portion of our preferred equity in Time Warner Entertainment. These
proceeds will be used to reduce debt by $1.6 billion. Our debt-
reduction program now stands at $3.2 billion. As we go forward, we
will continue to strengthen our balance sheet and our financial
ratios."
Separately, Time Warner reported first-quarter EBITDA for its
wholly owned Publishing, Music, and Cable operations of $338 million
on revenues of $2.068 billion, compared to $250 million of EBITDA on
revenues of $1.817 billion in the first quarter of 1995. Time Warner
also reported $116 million of pretax income from its equity in the
Entertainment Group in the first quarter, compared to $22 million for
the same period in 1995.
For the quarter, Time Warner reported a loss of $93 million,
before an extraordinary loss of $26 million on the retirement of
convertible debt, compared to a net loss of $47 million for the same
period a year ago. The net loss per common share was $.32 before the
extraordinary item, and $.39 after, compared to $.13 in the first
quarter of 1995.
PUBLISHING
First quarter EBITDA for Time Inc., the company's publishing
division, was $80 million, compared to $77 million for the
year-earlier period. Contributing to the quarter's results were
strong advertising performance from the company's People, Sports
Illustrated, Entertainment Weekly and Southern Living magazines.
These gains were partially offset by the increases in year-over-year
magazine paper costs as well as development spending in new
direct-marketing businesses. Five of Time Inc.'s magazines -- Sports
Illustrated, Fortune, Vibe, Sports Illustrated For Kids and Life --
were nominated for seven National Magazine Awards in the quarter.
MUSIC
Warner Music Group posted first-quarter EBITDA of $146 million,
compared to $173 million in the first quarter of 1995. While Warner
Music Group's domestic recorded-music business maintained its
dominant market position (over 21%), there was a decline in domestic
revenues due to an increase in the reserve for returns caused by the
softness in the overexpanded U.S. retail marketplace, as well as
weakness in the direct-marketing business. Domestic results were
partially offset by modest gains in international recorded music
revenue and growth in music publishing. Top worldwide-selling
artists include Alanis Morissette, Madonna, Hootie & the Blowfish,
Enya, Stone Temple Pilots, Simply Red and Tori Amos. In the quarter,
Warner Music Group won 23 Grammys, more than any other company,
including Alanis Morissette's wins for Album of the Year, Best Rock
Album, Best Rock Song and Best Female Rock Performance, Seal's for
Song of the Year, Record of the Year, Best Male Pop Performance and
Hootie & the Blowfish's wins for Best New Artist and Best Pop
Performance By a Duo or Group with Vocals.
FILMED ENTERTAINMENT
First-quarter EBITDA from the company's Filmed Entertainment
division was a record $136 million, up 11%, versus $123 million for
the comparable 1995 period. Contributing to Warner Bros.' record
quarter was the success at the domestic box office of Executive
Decision. Internationally, theatrical revenues were driven by the
success of Ace Ventura 2: When Nature Calls and Heat. Warner Bros.
also benefited from the continued strong performance of its worldwide
home video and television distribution operations.
BROADCASTING--THE WB NETWORK
The WB Network recorded a loss of $24 million in the quarter,
compared to $21 million a year ago due to costs associated with the
rollout of its national broadcast operations. The increased loss is
due to the expansion of programming in September 1995 to two nights
of primetime scheduling, and the unveiling of Kids' WB, which
features six half hours on Saturday mornings and two half-hour
daytime series on weekdays. The WB, launched on Jan. 11, 1995,
reaches 80% of U.S. households.
PROGRAMMING HBO
The Programming HBO business had an all-time record quarterly
EBITDA as well as a record first-quarter EBITDA of $81 million, up
14%, compared to $71 million for the year-earlier period. The
quarter's results reflect continued subscriber growth for both HBO
and Cinemax. In March, the HBO documentary One Survivor Remembers
received an Academy Award in the category of Best Achievement in
Documentary Short Subjects.
CABLE
Time Warner Cable posted an all-time record combined-quarter
EBITDA of $480 million, up 13%, from the comparable prior-year period
pro forma results that reflect all of the cable mergers,
acquisitions, and partnerships from the beginning of 1995. Time
Warner Inc.'s cable operations -- comprised primarily of the KBLCOM,
Summit and Cablevision Industries properties acquired over the past
year -- generated first-quarter EBITDA of $112 million. Time Warner
Entertainment's cable operations reported first-quarter EBITDA of
$368 million. This double-digit growth reflects an increase in basic
cable revenues bolstered by an internal subscriber growth rate
approaching 6%, as well as gains in both pay-per-view and advertising
revenues. Time Warner Cable now serves over 11.7 million subscribers
and passes nearly 20% of television households.
Time Warner Inc., the world's leading media company, consists of
three fundamental businesses: entertainment, news and information and
telecommunications, with interests in filmed entertainment,
television production, broadcasting, recorded music, music
publishing, cable-television programming, theme parks, magazines,
book publishing and cable-television systems.
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To receive a copy of this press release through the Internet, access
Time Warner's Factfinder located at http://pathfinder.com/Corp/
CONTACT: Edward Adler
(212) 484-6630
Attachments: (1) Consolidated Statement of Operations (2) Notes to Statement of Operations -0-
TIME WARNER INC.
CONSOLIDATED STATEMENT OF OPERATIONS
BY BUSINESS SEGMENT
(In millions, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
1996 1995
Revenues: Publishing $879 $831 Music 983 991 Cable 217 -- Intersegment elimination (11) (5) Total revenues $2,068 $1,817
Business segment operating income
before depreciation and amortization:
Publishing $ 80 $ 77
Music 146 173
Cable 112 --
338 250
Depreciation and amortization (228) (112) Business segment operating income 110 138
Equity in pretax income of Entertainment
Group, substantially all TWE 116 22
Interest and other, net (296) (155)
Corporate expenses (18) (20)
Loss before income taxes (88) (15) Income tax provision (5) (32) Loss before extraordinary item (93) (47) Extraordinary loss on retirement of debt, net of $17 million income tax benefit (26) -- Net loss (119) (47) Preferred dividend requirements (34) (3) Net loss applicable to common shares $(153) $ (50) Loss per common share: Loss before extraordinary item $(0.32) $(0.13) Net loss $(0.39) $(0.13) Average common shares 391.7 379.5 -0-
ENTERTAINMENT GROUP
COMBINED STATEMENT OF OPERATIONS
BY BUSINESS SEGMENT
(In millions; unaudited)
Three Months Ended
March 31,
1996 1995
Revenues: Filmed Entertainment $1,218 $1,184 Six Flags Theme Parks -- 23 Broadcasting - The WB Network 15 3 Programming - HBO 419 390 Cable 947 578 Intersegment elimination (112) (105) Total revenues $2,487 $2,073
Business segment operating income
before depreciation and amortization:
Filmed Entertainment $ 136 $ 123
Six Flags Theme Parks -- 2
Broadcasting - The WB Network (24) (21)
Programming - HBO 81 71
Cable 368 256
561 431
Depreciation and amortization (290) (230) Business segment operating income 271 201 Interest and other, net (88) (164) Minority interest (50) -- Corporate services (17) (15) Income before income taxes 116 22 Income tax provision (18) (11) Net income $ 98 $ 11
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TIME WARNER INC. AND ENTERTAINMENT GROUP
NOTES TO STATEMENTS OF OPERATIONS
Note 1: Basis of Presentation
Time Warner has interests in three fundamental areas of business:
Entertainment, consisting principally of interests in recorded music
and music publishing, filmed entertainment, broadcasting, theme parks
and cable television programming; News and Information, consisting
principally of interests in magazine publishing, book publishing and
direct marketing; and Telecommunications, consisting principally of
interests in cable television systems. Substantially all of Time
Warner's interests in filmed entertainment, broadcasting, theme
parks, cable television programming and most of its cable television
systems are held through Time Warner Entertainment Company, L.P.
("TWE"), a partnership in which Time Warner owns general and limited
partnership interests in 74.49% of the pro rata priority capital
("Series A Capital") and residual equity capital ("Residual Capital")
of TWE and 100% of the senior priority capital ("Senior Capital") and
junior priority capital ("Series B Capital") of TWE. The remaining
25.51% limited partnership interests in the Series A Capital and
Residual Capital of TWE are held by a subsidiary of US WEST, Inc.
Time Warner does not consolidate TWE and certain related companies
(the "Entertainment Group") for financial reporting purposes. No
portion of TWE's net income for the three months ended March 31, 1996
and 1995 was allocated to the limited partnership interests.
The 1996 operating results of Time Warner reflect the acquisitions
of Summit Communications Group, Inc. effective as of May 2, 1995,
KBLCOM Incorporated effective as of July 6, 1995 and Cablevision
Industries Corporation and related companies effective as of January
4, 1996. The 1996 operating results of the Entertainment Group
reflect the formation of the TWE-Advance/Newhouse Partnership
effective as of April 1, 1995, the deconsolidation of Six Flags
Entertainment Corporation ("Six Flags") effective as of June 23, 1995
and the consolidation of Paragon Communications effective as of July
6, 1995. The operating results of Six Flags prior to June 23, 1995
are reported separately to facilitate comparability.
Note 2: Income Taxes The relationship between income before income taxes and income tax expense of Time Warner is affected by the amortization of goodwill and certain other financial statement expenses that are not deductible for income tax purposes. Income tax expense of Time Warner includes all income taxes related to its allocable share of partnership income and its equity in the income tax expense of corporate subsidiaries of the Entertainment Group. CONTACT: Edward Edward killed his father at his mother’s instigation. [Br. Balladry: Edward in Benét, 302] See : Patricide Adler Ad·ler , Alfred 1870-1937. Austrian psychiatrist. He rejected Sigmund Freud's emphasis on sexuality and theorized that neurotic behavior is an overcompensation for feelings of inferiority. (212) 484-6630 |
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