Viacom Reports Sharply Higher Results For Fiscal 2011 Second Quarter

Double-Digit Growth in Media Networks and Filmed Entertainment Revenues Drove a 37% Increase in Adjusted Operating Income

Viacom Inc. reported substantial increases in revenues and profit for the fiscal 2011 second quarter ended March 31, 2011, driven by strong growth across its Media Networks and Filmed Entertainment segments and improving profit margins. Revenues in the quarter increased 20% to $3.27 billion on double-digit growth in theatrical, advertising, home entertainment and television license revenues. Adjusted operating income grew 37% to $760 million, driven by increased profits in both Media Networks and Filmed Entertainment. Adjusted net earnings from continuing operations attributable to Viacom surged 69% to $430 million with adjusted diluted EPS from continuing operations of $0.72, a 71% improvement over the prior year's adjusted results of $0.42 per share.

Sumner M. Redstone, Executive Chairman of Viacom, said, "Viacom's proven creative firepower and disciplined financial management are fueling our profitability and allowing us to deliver increasing value to our shareholders."

Philippe Dauman, President and Chief Executive Officer of Viacom, said, "This was an outstanding quarter, reflecting our continued operating momentum. Our ability to translate industry-leading research and creative ingenuity into hit programming makes our branded networks a gateway to some of the most highly valued audiences around the globe. We attracted new advertisers in the quarter and expanded the reach of our content onto new distribution platforms.

"Our networks aired top-rated shows for nearly every demographic. MTV's Jersey Shore was the number one series across all of television with its target audience, which helped to boost the network's prime-time ratings nearly 65% for the quarter. Nickelodeon was once again the top-rated network for kids and total viewers with four of the top five preschool series on all television, cable's top three animated series and the number one show among tweens, global sensation iCarly. Record-breaking performances from Comedy Central original series and specials, such as Tosh.0 and its two late-night leaders, drove double-digit ratings gains in prime time. BET's investment in programming continued to yield audience gains, particularly in prime time.

"Paramount Pictures delivered outstanding results this past quarter as it benefited from a strong slate of films in theatres as well as home entertainment releases. The studio is looking forward to releasing several of the most anticipated movies of the summer, including next weekend's premiere of Marvel's Thor, which will be followed by DreamWorks Animation's Kung Fu Panda 2, J.J. Abrams' Super 8 and the third installment of our global franchise, Transformers: Dark of the Moon.

"The strength of our results has enabled us to accelerate the pace of our stock buyback program as we continue to focus on returning capital to our shareholders."

Quarterly revenues of $3.27 billion increased 20% from $2.73 billion in the prior year. Media Networks delivered $2.08 billion in revenues, an 11% improvement over the prior year period. This increase reflects continuing growth in advertising revenues, which were up 12% worldwide in the quarter. Domestic ad sales grew 11%, marking the fifth consecutive quarter of sequential improvement in Viacom's domestic ad sales growth rate.Worldwide affiliate revenues grew 9% to $851 million. Worldwide ancillary revenues were up 10% in the quarter to $155 million primarily due to growth in television syndication and consumer products revenues.

Filmed Entertainment revenues increased 38% to $1.23 billion due principally to higher theatrical and home entertainment revenues. Viacom's theatrical revenues, which grew 50% to $401 million in the quarter, reflect a higher year-over-year contribution from carryover titles such as True Grit, Little Fockers and The Fighter, as well as increased revenues from the current quarter's releases, led by Rango.

Home entertainment revenues rose 38% to $410 million due to the strength and increased number of releases in the quarter compared with the 2010 quarter. Television license fees grew 30% to $336 million, due to higher network television and syndication fees. Ancillary revenues improved 25% to $79 million.