Time Warner Businesses Report Record First-Quarter EBITDA Cable Posts Record Quarter -- First Time in 18 Months -- Core Content Businesses Publishing, Music, Filmed Entertainment and HBO -- Post Combined 13% EBITDA Growth in the Quarter.
First Quarter 1995 1994 TIME WARNER Publishing $ 77 $ 70 Music 173 147 ENTERTAINMENT GROUP Filmed Entertainment 125 117 BroadcastingDThe WB Network (21) D ProgrammingDHBO 71 61 Cable 256 244
Combined EBITDA $ 681 $ 639
Combined Revenues $3,890 $3,485
Commenting on the company's first-quarter performance, Chairman and CEO Gerald M. Levin, said: "I am pleased that for the first time as Time Warner all five of our core businesses have posted record first-quarter results and that our cable division is again showing strength in achieving its first record-breaking quarter in 18 months. Our content businesses -- publishing, music, filmed entertainment, and HBO -- continued their excellent performance with a combined 13% EBITDA growth in the quarter. Looking forward, I expect the strong results from our businesses to continue." Separately, Time Warner reported first-quarter EBITDA for its wholly owned Publishing and Music Groups of $250 million, up 15% on revenues of $1.817 billion, compared to $217 million of EBITDA on revenues of $1.558 billion in the first quarter of 1994. Time Warner also reported $22 million of pretax income from its equity in the Entertainment Group in the first quarter, compared to $45 million for the same period in 1994. For the quarter, Time Warner reported a net loss of $47 million, compared to $51 million for the same period a year ago. The net loss applicable to common shares was $50 million for the quarter, compared to $54 million for the same period of 1994. Net loss per common share was $.13, compared to $.14 in the first quarter of 1994.
First quarter EBITDA for Time Inc., the company's publishing division, was $77 million, up 10%, compared to $70 million for the year-earlier period. The quarter's strong results were driven by gains in magazine advertising and the overall performance of Sports Illustrated, People, Time and Fortune, despite significant increases in postage and paper costs. Also contributing to the quarter was the company's book businesses, which in the quarter had 11 bestsellers. Sports Illustrated was named Magazine of the Year by Advertising Age magazine and two of Time Inc.'s magazines won National Magazine Awards in the quarter. Entertainment Weekly won for general excellence and Martha Stewart Living won for magazine design.
Warner Music Group posted record first-quarter EBITDA of $173 million, up 18%, compared to $147 million in the first quarter of 1994. Contributing to the year's results were significant increases in U.S. and internationally recorded music sales as well as revenue gains from music publishing. Top worldwide selling artists include Van Halen, Adina Howard, Green Day, Hootie and the Blowfish and Mariya Takeuchi. In the quarter, the Warner Music Group continued to improve its overall international market share while in the U.S., the company continued its significant lead with a market share 50% greater than its closest competitor.
ENTERTAINMENT GROUP FILMED ENTERTAINMENT
First-quarter EBITDA from the company's Filmed Entertainment division (including Six Flags) was a record $125 million versus $117 million for the comparable 1994 period. Contributing to Warner Bros.' record quarter was the success at the domestic box office of Just Cause, Disclosure and Outbreak. Internationally, theatrical revenues were driven by the success of Interview With The Vampire, Disclosure and The Specialist, all of which have exceeded $100 million at the international box office. Warner Bros. also benefited from the continued strong performance of its worldwide home video and television distribution operations. Warner Bros. Television's "ER" and "Friends" are the top rated new shows on network television for the 1994/1995 broadcast season.
BROADCASTING -- THE WB NETWORK
The WB Network recorded a loss of $21 million in the quarter due to planned start-up costs of its new national broadcast operations. The WB, launched on Jan. 11, 1995, reaches 80% of U.S. households. The Wednesday night lineup features four comedies: The Wayans Bros., The Parent Hood, Unhappily Ever-After and Muscle. In addition to its primetime programming, in the fall of 1995 The WB will unveil a new children's programming service, Kids' WB, which will feature six half-hours on Saturday mornings and two half-hour morning series on weekdays.
The Programming HBO business had record first-quarter EBITDA of $71 million, up 16%, compared to $61 million for the year-earlier period. The quarter's results reflect a significant increase in subscribers to both HBO and Cinemax, due primarily to continued strong growth in cable as well as increases in direct broadcast satellite (DBS) distribution. In March, HBO received a George Foster Peabody Award for Barbra Streisand: The Concert.
Time Warner Cable's EBITDA was a first-quarter record $256 million, up 5% from $244 million in the year-earlier period. Contributing to the quarter's results were increases in basic subscribers as well as revenue gains from pay TV and advertising. In a year-over-year comparison, Time Warner Cable subscribers grew at a 5% rate, the fastest growth rate in four years. On April 1, Time Warner completed the formation of its joint venture with Advance-Newhouse, thereby increasing the number of customers it serves to over 9 million. Later this year with the closing of the acquisitions of Summit Communications, KBLCOM and Cablevision Industries, Time Warner Cable will manage 11.5 million subscribers, giving Time Warner Cable 34 clusters with over 100,000 subscribers. Time Warner Inc. is the world's leading media and entertainment company, with interests in magazine and book publishing, recorded music and music publishing, filmed entertainment, broadcasting and theme parks and cable television and cable television programming. -0-Attachments: (1) Consolidated Income Statement (2) Notes
TIME WARNER INC.
CONSOLIDATED STATEMENT OF OPERATIONS
BY BUSINESS SEGMENT
(In millions, except per share amounts)
Three Months Ended
1995 1994 Revenues: Publishing $ 831 $ 751 Music 991 812 Intersegment elimination (5) (5)
Total revenues $1,817 $1,558
Operating income before
depreciation and amortization: Publishing $ 77 $ 70 Music 173 147
Depreciation and amortization (112) (105)
Operating income 138 112
Equity in pretax income of Entertainment
Group, substantially all TWE 22 45 Interest and other, net (155) (158) Corporate expenses (20) (18)
Loss before income taxes (15) (19) Income taxes (32) (32)
Net loss (47) (51) Preferred dividend requirements (3) (3)
Net loss applicable to common shares $ (50) $ (54)
Net loss per common share $(0.13) $(0.14)
Average common shares 379.5 378.6 -0-
COMBINED STATEMENT OF OPERATIONS
BY BUSINESS SEGMENT
(In millions; unaudited)
Three Months Ended
1995 1994 Revenues: Filmed Entertainment $1,207 $1,083 Broadcasting - The WB Network 3 - Programming - HBO 390 362 Cable 578 551 Intersegment elimination (105) (69)
Total revenues $2,073 $1,927
Operating income before
depreciation and amortization: Filmed Entertainment $ 125 $ 117 Broadcasting - The WB Network (21) - Programming - HBO 71 61 Cable 256 244
Depreciation and amortization (230) (216)
Operating income 201 206
Interest and other, net (164) (146) Corporate services (15) (15)
Income before income taxes 22 45 Income taxes (11) (4)
Net income $ 11 $ 41
TIME WARNER INC. AND ENTERTAINMENT GROUP NOTES TO STATEMENTS OF OPERATIONS
Note 1: Entertainment Group
The Entertainment Group consists of the Filmed Entertainment, Broadcasting-The WB Network, Programming-HBO and Cable businesses, substantially all of which are owned by Time Warner Entertainment Company, L.P. (TWE), a Delaware limited partnership in which subsidiaries of Time Warner are the general partners and subsidiaries of ITOCHU Corporation, Toshiba Corporation and U S WEST, Inc. are the unaffiliated limited partners. The operating results of the Entertainment Group are reported by Time Warner on a deconsolidated basis. No portion of TWE's net income for the three months ended March 31, 1995 and 1994 was allocated to the limited partners. Within the Entertainment Group, the revenues and operating results of Filmed Entertainment include the revenues and operating results of Warner Bros. and Six Flags.
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: Time Warner
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|Date:||Apr 17, 1995|
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