Time Warner Reaps In Record Income
Time Warner Inc. reported operating income before amortization of intangible assets (EBITA) of US$1.17 billion on revenues of $6.55 billion for the first quarter of 2000. In the first quarter of 1999, EBITA was $1.24 billion on revenues of $6.09 billion. EBITA grew 13% for the first quarter when normalized for certain items described below affecting the comparability of operating results. Revenue grew 8% for the quarter on a normalized basis. For the first quarter, basic net income per common share, when normalized to exclude the aggregate effect of the nonrecurring items, was $.05 in 2000, compared to breakeven in 1999. On a reported basis, Time Warner had a first-quarter net loss of $.08 per common share in 2000, compared to net income of $.10 per common share during the same period in 1999. Time Warner's chairman and CEO Gerald M. Levin said, "I am pleased with our record operating results and strong EBITA growth rate of 13% for the first quarter of 2000, which puts us on an early track for another record-breaking year. We remain focused on delivering impressive quarterly results, coupled with realizing all the opportunities presented by our pending merger with AOL. In the three months following our agreement to merge with AOL, we have collaborated on dozens of commercial relationships. This has set the tone for the creation of a vibrant and fast-growing company, a world leader in content, communications and commerce." Leading the good performance was the cable networks division with a record EBITA of $364 million, up 18%, versus $309 million a year earlier. The Turner cable networks' 20% EBITA growth resulted from a 23% revenue growth led by strong gains in both subscription and advertising revenues, partially offset by lower World Championship Wrestling results. HBO's 15% EBITA growth reflects increased subscription revenues for HBO and Cinemax. TBS Superstation and Turner Network Television (TNT) ended the first quarter with seven of the 10 highest-rated theatrical motion pictures on basic cable. Cartoon Network posted its best ever first quarter in prime-time ratings and delivery among households, kids 2-11 and kids 6-11. EBITA for Time Inc. Publishing was a record $117 million, up 14%, versus $103 million on a normalized basis for the comparable 1999 period. First quarter EBITA for filmed entertainment was an operating record of $194 million, up 21%, versus $160 million on a normalized basis for the comparable 1999 period. The current quarter's results benefited from increases in Warner Bros.' home video and television businesses and TBS' film library operations, partially offset by lower results from Warner Bros.' consumer products operations. First-quarter theatrical revenues were boosted from the U.S. box-office success of Warner Bros.' THE GREEN MILE ($136 million to date). In home video, DVD revenues grew over 75% led by THE MATRIX and POKEMON. The EBITA for cable ventures was a record $485 million, up from $403 million a year previous. EBITA grew 13% when normalized for the effects of certain transactions, including net pretax gains of $28 million recognized in 2000, relating to the sale or exchange of cable television systems and investments. The cable division's strong double-digit growth reflects significant increases in revenues from basic cable, deployment of digital and high-speed Internet services and advertising. The losers for the company were the WB Television Network and Time Warner Digital Media. The WB showed a loss of $31 million for the quarter, however it was an improvement of 24% over the loss of $41 million from a year ago. The results reflect higher broadcast revenues, as well as reduced start-up costs for The WB Network 100+ Station Group. Giving a boost is the Kids' WB! weekend line-up, which continues to be the number one network as compared to its broadcast and cable competition on a season-to-date basis. The digital media division had a loss of $30 million, reflecting start-up activities associated with the company's digital media businesses.