QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Title of each class | Trading Symbols | Name of each exchange on which registered | ||
Page | ||
Quarter Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
(in millions, except per share amounts) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Revenues | $ | $ | $ | $ | |||||||||||
Expenses: | |||||||||||||||
Operating | |||||||||||||||
Selling, general and administrative | |||||||||||||||
Depreciation and amortization | |||||||||||||||
Restructuring and related costs | |||||||||||||||
Legal settlement | |||||||||||||||
Total expenses | |||||||||||||||
Operating income | |||||||||||||||
Interest expense, net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Equity in net earnings of investee companies | |||||||||||||||
Gain on marketable securities | |||||||||||||||
Gain on extinguishment of debt | |||||||||||||||
Other items, net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Earnings from continuing operations before provision for income taxes | |||||||||||||||
Provision for income taxes | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net earnings from continuing operations | |||||||||||||||
Discontinued operations, net of tax | |||||||||||||||
Net earnings (Viacom and noncontrolling interests) | |||||||||||||||
Net earnings attributable to noncontrolling interests | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net earnings attributable to Viacom | $ | $ | $ | $ | |||||||||||
Amounts attributable to Viacom: | |||||||||||||||
Net earnings from continuing operations | $ | $ | $ | $ | |||||||||||
Discontinued operations, net of tax | |||||||||||||||
Net earnings attributable to Viacom | $ | $ | $ | $ | |||||||||||
Basic earnings per share attributable to Viacom: | |||||||||||||||
Continuing operations | $ | $ | $ | $ | |||||||||||
Discontinued operations | |||||||||||||||
Net earnings | $ | $ | $ | $ | |||||||||||
Diluted earnings per share attributable to Viacom: | |||||||||||||||
Continuing operations | $ | $ | $ | $ | |||||||||||
Discontinued operations | |||||||||||||||
Net earnings | $ | $ | $ | $ | |||||||||||
Weighted average number of common shares outstanding: | |||||||||||||||
Basic | |||||||||||||||
Diluted | |||||||||||||||
Quarter Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
(in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net earnings (Viacom and noncontrolling interests) | $ | $ | $ | $ | |||||||||||
Other comprehensive income/(loss), net of tax: | |||||||||||||||
Foreign currency translation adjustments | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Defined benefit pension plans | |||||||||||||||
Cash flow hedges | ( | ) | ( | ) | |||||||||||
Available-for-sale securities | |||||||||||||||
Other comprehensive income/(loss) (Viacom and noncontrolling interests) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Comprehensive income | |||||||||||||||
Less: Comprehensive income attributable to noncontrolling interest | |||||||||||||||
Comprehensive income attributable to Viacom | $ | $ | $ | $ | |||||||||||
(in millions, except par value) | June 30, 2019 | September 30, 2018 | |||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | $ | |||||
Receivables, net | |||||||
Inventory, net | |||||||
Prepaid and other assets | |||||||
Total current assets | |||||||
Property and equipment, net | |||||||
Inventory, net | |||||||
Goodwill | |||||||
Intangibles, net | |||||||
Other assets | |||||||
Total assets | $ | $ | |||||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | $ | |||||
Accrued expenses | |||||||
Participants’ share and residuals | |||||||
Program obligations | |||||||
Deferred revenue | |||||||
Current portion of debt | |||||||
Other liabilities | |||||||
Total current liabilities | |||||||
Noncurrent portion of debt | |||||||
Participants’ share and residuals | |||||||
Program obligations | |||||||
Deferred tax liabilities, net | |||||||
Other liabilities | |||||||
Redeemable noncontrolling interest | |||||||
Commitments and contingencies (Note 7) | |||||||
Viacom stockholders’ equity: | |||||||
Class A common stock, par value $0.001, 375.0 authorized; 49.4 and 49.4 outstanding, respectively | |||||||
Class B common stock, par value $0.001, 5,000.0 authorized; 354.3 and 353.7 outstanding, respectively | |||||||
Additional paid-in capital | |||||||
Treasury stock, 392.5 and 393.1 common shares held in treasury, respectively | ( | ) | ( | ) | |||
Retained earnings | |||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Total Viacom stockholders’ equity | |||||||
Noncontrolling interests | |||||||
Total equity | |||||||
Total liabilities and equity | $ | $ | |||||
Nine Months Ended June 30, | |||||||
(in millions) | 2019 | 2018 | |||||
OPERATING ACTIVITIES | |||||||
Net earnings (Viacom and noncontrolling interests) | $ | $ | |||||
Discontinued operations, net of tax | ( | ) | ( | ) | |||
Net earnings from continuing operations | |||||||
Reconciling items: | |||||||
Depreciation and amortization | |||||||
Feature film and program amortization | |||||||
Equity-based compensation | |||||||
Deferred income taxes | |||||||
Gain on marketable securities | ( | ) | |||||
Operating assets and liabilities, net of acquisitions: | |||||||
Receivables | ( | ) | ( | ) | |||
Production and programming | ( | ) | ( | ) | |||
Accounts payable and other current liabilities | ( | ) | |||||
Other, net | ( | ) | |||||
Net cash provided by operating activities | |||||||
INVESTING ACTIVITIES | |||||||
Acquisitions and investments, net | ( | ) | ( | ) | |||
Capital expenditures | ( | ) | ( | ) | |||
Proceeds received from asset sales | |||||||
Grantor trust proceeds | |||||||
Net cash used in investing activities | ( | ) | ( | ) | |||
FINANCING ACTIVITIES | |||||||
Debt repayments | ( | ) | ( | ) | |||
Dividends paid | ( | ) | ( | ) | |||
Exercise of stock options | |||||||
Other, net | ( | ) | ( | ) | |||
Net cash used in financing activities | ( | ) | ( | ) | |||
Effect of exchange rate changes on cash and cash equivalents | ( | ) | ( | ) | |||
Net change in cash and cash equivalents | ( | ) | ( | ) | |||
Cash and cash equivalents at beginning of period | |||||||
Cash and cash equivalents at end of period | $ | $ | |||||
Quarter Ended June 30, 2019 | ||||||||||||||||||||||||||||||
(in millions, except per share amounts) | Common Stock (shares) | Common Stock/ Additional Paid-In Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Viacom Stockholders’ Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||
March 31, 2019 | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||
Net earnings | — | |||||||||||||||||||||||||||||
Other comprehensive income, net of income tax expense of $1 | — | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Noncontrolling interests | — | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Dividends declared ($0.20 per share for both Class A and B) | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||
Equity-based compensation and other | ( | ) | ||||||||||||||||||||||||||||
June 30, 2019 | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||
Nine Months Ended June 30, 2019 | ||||||||||||||||||||||||||||||
(in millions, except per share amounts) | Common Stock (shares) | Common Stock/ Additional Paid-In Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Viacom Stockholders’ Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||
September 30, 2018 | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||
Adoption of New Accounting Pronouncements(1) | ( | ) | ||||||||||||||||||||||||||||
Adjusted beginning balance, October 1, 2018 | ( | ) | ( | ) | ||||||||||||||||||||||||||
Net earnings | — | |||||||||||||||||||||||||||||
Other comprehensive loss, net of income tax expense of $2 | — | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Noncontrolling interests | — | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Dividends declared ($0.60 per share for both Class A and B) | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||
Equity-based compensation and other | ( | ) | ||||||||||||||||||||||||||||
June 30, 2019 | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||
Quarter Ended June 30, 2018 | ||||||||||||||||||||||||||||||
(in millions, except per share amounts) | Common Stock (shares) | Common Stock/ Additional Paid-In Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Viacom Stockholders’ Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||
March 31, 2018 | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||
Net earnings | — | |||||||||||||||||||||||||||||
Other comprehensive loss, net of income tax expense of $2 | — | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Noncontrolling interests | — | ( | ) | ( | ) | |||||||||||||||||||||||||
Dividends declared ($0.20 per share for both Class A and B) | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||
Equity-based compensation and other | ( | ) | ( | ) | ||||||||||||||||||||||||||
June 30, 2018 | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||
Nine Months Ended June 30, 2018 | ||||||||||||||||||||||||||||||
(in millions, except per share amounts) | Common Stock (shares) | Common Stock/ Additional Paid-In Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Viacom Stockholders’ Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||
September 30, 2017 | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||
Net earnings | — | |||||||||||||||||||||||||||||
Other comprehensive loss, net of income tax expense of $15 | — | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Noncontrolling interests | — | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Dividends declared ($0.60 per share for both Class A and B) | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||
Equity-based compensation and other | ( | ) | ||||||||||||||||||||||||||||
June 30, 2018 | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||
Consolidated Statement of Earnings Impact (in millions, except per share amounts) | Quarter Ended June 30, 2019 | Nine Months Ended June 30, 2019 | |||||
Revenues | $ | ( | ) | $ | ( | ) | |
Operating expenses | ( | ) | ( | ) | |||
Operating income | ( | ) | ( | ) | |||
Provision for income taxes | ( | ) | ( | ) | |||
Net earnings from continuing operations | $ | ( | ) | $ | ( | ) | |
Net earnings (Viacom and noncontrolling interests) | $ | ( | ) | $ | ( | ) | |
Net earnings attributable to Viacom | $ | ( | ) | $ | ( | ) | |
Basic EPS from continuing operations | $ | ( | ) | $ | ( | ) | |
Diluted EPS from continuing operations | $ | ( | ) | $ | ( | ) | |
Consolidated Balance Sheet Impact (in millions) | June 30, 2019 | ||
ASSETS | |||
Receivables, net | $ | ( | ) |
Inventory, net | ( | ) | |
Prepaid and other assets | ( | ) | |
Other assets | |||
LIABILITIES AND EQUITY | |||
Accrued expenses | $ | ||
Participants’ share and residuals (current) | |||
Other liabilities (current) | ( | ) | |
Deferred revenue | ( | ) | |
Participants’ share and residuals (noncurrent) | |||
Other liabilities (noncurrent) | ( | ) | |
Retained earnings | |||
Purchase Price Allocation (in millions) | ||||
Receivables, net(1) | $ | |||
Prepaid and other assets | ||||
Goodwill(1) | ||||
Intangible assets | ||||
Other assets, noncurrent | ||||
Assets acquired | ||||
Accounts payable | ||||
Accrued expenses | ||||
Other liabilities, noncurrent | ||||
Liabilities assumed | ||||
$ | ||||
Inventory (in millions) | June 30, 2019 | September 30, 2018 | |||||
Film inventory: | |||||||
Released, net of amortization | $ | $ | |||||
Completed, not yet released | |||||||
In process and other | |||||||
Television productions: | |||||||
Released, net of amortization | |||||||
In process and other | |||||||
Original programming: | |||||||
Released, net of amortization | |||||||
In process and other | |||||||
Acquired program rights, net of amortization | |||||||
Home entertainment inventory | |||||||
Total inventory, net | |||||||
Less current portion | |||||||
Noncurrent portion | $ | $ | |||||
Debt (in millions) | June 30, 2019 | September 30, 2018 | |||||
Senior Notes and Debentures: | |||||||
Senior notes due September 2019, 5.625% | $ | $ | |||||
Senior notes due December 2019, 2.750% | |||||||
Senior notes due March 2021, 4.500% | |||||||
Senior notes due December 2021, 3.875% | |||||||
Senior notes due February 2022, 2.250% | |||||||
Senior notes due June 2022, 3.125% | |||||||
Senior notes due March 2023, 3.250% | |||||||
Senior notes due September 2023, 4.250% | |||||||
Senior notes due April 2024, 3.875% | |||||||
Senior notes due October 2026, 3.450% | |||||||
Senior debentures due December 2034, 4.850% | |||||||
Senior debentures due April 2036, 6.875% | |||||||
Senior debentures due October 2037, 6.750% | |||||||
Senior debentures due February 2042, 4.500% | |||||||
Senior debentures due March 2043, 4.375% | |||||||
Senior debentures due June 2043, 4.875% | |||||||
Senior debentures due September 2043, 5.850% | |||||||
Senior debentures due April 2044, 5.250% | |||||||
Junior Debentures: | |||||||
Junior subordinated debentures due February 2057, 5.875% | |||||||
Junior subordinated debentures due February 2057, 6.250% | |||||||
Capital lease and other obligations | |||||||
Total debt | |||||||
Less current portion | |||||||
Noncurrent portion | $ | $ | |||||
Net Periodic Benefit Cost (in millions) | Quarter Ended June 30, | Nine Months Ended June 30, | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Interest cost | $ | $ | $ | $ | |||||||||||
Expected return on plan assets | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Recognized actuarial loss | |||||||||||||||
Net periodic benefit cost | $ | $ | $ | $ | |||||||||||
Redeemable Noncontrolling Interest (in millions) | Nine Months Ended June 30, | ||||||
2019 | 2018 | ||||||
Beginning balance | $ | $ | |||||
Net earnings | |||||||
Distributions | ( | ) | ( | ) | |||
Translation adjustment | ( | ) | ( | ) | |||
Redemption value adjustment | |||||||
Ending Balance | $ | $ | |||||
Restructuring, Related Costs and Programming Charges (in millions) | Nine Months Ended June 30, 2019 | ||||||||||||||
Media Networks | Filmed Entertainment | Corporate | Total | ||||||||||||
Severance (1) | $ | $ | $ | $ | |||||||||||
Exit costs | |||||||||||||||
Other related costs | |||||||||||||||
Restructuring and related costs | |||||||||||||||
Programming | |||||||||||||||
Total | $ | $ | $ | $ | |||||||||||
Restructuring and Related Costs (in millions) | Quarter Ended June 30, 2018 | Nine Months Ended June 30, 2018 | |||||||||||||||||||||||||||||
Media Networks | Filmed Entertainment | Corporate | Total | Media Networks | Filmed Entertainment | Corporate | Total | ||||||||||||||||||||||||
Severance (1) | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Exit costs | |||||||||||||||||||||||||||||||
Other related costs | |||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Severance Liability (in millions) | Media Networks | Filmed Entertainment | Corporate | Total | |||||||||||
September 30, 2018 | $ | $ | $ | $ | |||||||||||
Accruals | |||||||||||||||
Severance payments | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
June 30, 2019 | $ | $ | $ | $ | |||||||||||
Weighted Average Number of Common Shares Outstanding and Anti-dilutive Common Shares (in millions) | Quarter Ended June 30, | Nine Months Ended June 30, | |||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
Weighted average number of common shares outstanding, basic | |||||||||||
Dilutive effect of equity awards | |||||||||||
Weighted average number of common shares outstanding, diluted | |||||||||||
Anti-dilutive common shares | |||||||||||
Supplemental Cash Flow Information (in millions) | Nine Months Ended June 30, | ||||||
2019 | 2018 | ||||||
Cash paid for interest | $ | $ | |||||
Cash paid for income taxes | $ | $ |
Revenues by Segment (in millions) | Quarter Ended June 30, | Nine Months Ended June 30, | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Media Networks | $ | $ | $ | $ | |||||||||||
Filmed Entertainment | |||||||||||||||
Eliminations | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Total revenues | $ | $ | $ | $ | |||||||||||
Adjusted Operating Income/(Loss) (in millions) | Quarter Ended June 30, | Nine Months Ended June 30, | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Media Networks | $ | $ | $ | $ | |||||||||||
Filmed Entertainment | ( | ) | |||||||||||||
Corporate expenses | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Eliminations | ( | ) | ( | ) | ( | ) | |||||||||
Equity-based compensation | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Restructuring, related costs and programming charges (1) | ( | ) | ( | ) | ( | ) | |||||||||
Legal settlement | ( | ) | |||||||||||||
Operating income | |||||||||||||||
Interest expense, net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Equity in net earnings of investee companies | |||||||||||||||
Gain on marketable securities | |||||||||||||||
Gain on extinguishment of debt | |||||||||||||||
Other items, net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Earnings from continuing operations before provision for income taxes | $ | $ | $ | $ | |||||||||||
Total Assets (in millions) | June 30, 2019 | September 30, 2018 | |||||
Media Networks | $ | $ | |||||
Filmed Entertainment | |||||||
Corporate/Eliminations | |||||||
Total assets | $ | $ | |||||
Revenues by Component (in millions) | Quarter Ended June 30, | Nine Months Ended June 30, | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Media Networks | |||||||||||||||
Advertising | $ | $ | $ | $ | |||||||||||
Affiliate | |||||||||||||||
Consumer products, recreation and live events | |||||||||||||||
Filmed Entertainment | |||||||||||||||
Theatrical | |||||||||||||||
Home entertainment | |||||||||||||||
Licensing | |||||||||||||||
Ancillary | |||||||||||||||
Eliminations | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Total revenues | $ | $ | $ | $ | |||||||||||
CBS Related Party Transactions (in millions) | Quarter Ended June 30, | Nine Months Ended June 30, | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Consolidated Statements of Earnings | |||||||||||||||
Revenues | $ | $ | $ | $ | |||||||||||
Operating expenses | $ | $ | $ | $ | |||||||||||
June 30, 2019 | September 30, 2018 | ||||||||||||||
Consolidated Balance Sheets | |||||||||||||||
Accounts receivable | $ | $ | |||||||||||||
Accounts payable | $ | 1 | $ | — | |||||||||||
Participants’ share and residuals, current | |||||||||||||||
Program obligations, current | |||||||||||||||
Program obligations, noncurrent | |||||||||||||||
Other liabilities | |||||||||||||||
Total due to CBS | $ | $ | |||||||||||||
Other Related Party Transactions (in millions) | Quarter Ended June 30, | Nine Months Ended June 30, | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Consolidated Statements of Earnings | |||||||||||||||
Revenues | $ | $ | $ | $ | |||||||||||
Operating expenses | $ | $ | $ | $ | |||||||||||
June 30, 2019 | September 30, 2018 | ||||||||||||||
Consolidated Balance Sheets | |||||||||||||||
Accounts receivable | $ | $ | |||||||||||||
Other assets | |||||||||||||||
Total due from other related parties | $ | $ | |||||||||||||
Accounts payable | $ | $ | |||||||||||||
Other liabilities | |||||||||||||||
Total due to other related parties | $ | $ | |||||||||||||
Quarter Ended June 30, | Better/(Worse) | Nine Months Ended June 30, | Better/(Worse) | ||||||||||||||||||||||||||
(in millions, except per share amounts) | 2019 | 2018 | $ | % | 2019 | 2018 | $ | % | |||||||||||||||||||||
GAAP | |||||||||||||||||||||||||||||
Revenues | $ | 3,357 | $ | 3,237 | $ | 120 | 4 | % | $ | 9,405 | $ | 9,458 | $ | (53 | ) | (1 | )% | ||||||||||||
Operating income | 757 | 752 | 5 | 1 | 1,932 | 1,926 | 6 | — | |||||||||||||||||||||
Net earnings from continuing operations attributable to Viacom | 538 | 511 | 27 | 5 | 1,219 | 1,302 | (83 | ) | (6 | ) | |||||||||||||||||||
Diluted earnings per share from continuing operations | 1.33 | 1.27 | 0.06 | 5 | 3.02 | 3.23 | (0.21 | ) | (7 | ) | |||||||||||||||||||
Non-GAAP* | |||||||||||||||||||||||||||||
Adjusted operating income | $ | 757 | $ | 767 | $ | (10 | ) | (1 | )% | $ | 2,144 | $ | 2,126 | $ | 18 | 1 | % | ||||||||||||
Adjusted net earnings from continuing operations attributable to Viacom | 484 | 475 | 9 | 2 | 1,320 | 1,259 | 61 | 5 | |||||||||||||||||||||
Adjusted diluted earnings per share from continuing operations | 1.20 | 1.18 | 0.02 | 2 | 3.27 | 3.12 | 0.15 | 5 | |||||||||||||||||||||
* See “Factors Affecting Comparability” section below for a reconciliation of our reported results to our adjusted results, which are calculated on a non-GAAP basis. |
(in millions, except per share amounts) | |||||||||||||||||||
Quarter Ended June 30, 2019 | |||||||||||||||||||
Operating Income | Earnings from Continuing Operations Before Provision for Income Taxes | Provision for Income Taxes | Net Earnings from Continuing Operations Attributable to Viacom | Diluted EPS from Continuing Operations | |||||||||||||||
Reported results (GAAP) | $ | 757 | $ | 666 | $ | 122 | $ | 538 | $ | 1.33 | |||||||||
Factors Affecting Comparability: | |||||||||||||||||||
Gain on marketable securities | — | (29 | ) | (7 | ) | (22 | ) | (0.05 | ) | ||||||||||
Discrete tax benefit | — | — | 32 | (32 | ) | (0.08 | ) | ||||||||||||
Adjusted results (Non-GAAP) | $ | 757 | $ | 637 | $ | 147 | $ | 484 | $ | 1.20 | |||||||||
(in millions, except per share amounts) | |||||||||||||||||||
Nine Months Ended June 30, 2019 | |||||||||||||||||||
Operating Income | Earnings from Continuing Operations Before Provision for Income Taxes | Provision for Income Taxes | Net Earnings from Continuing Operations Attributable to Viacom | Diluted EPS from Continuing Operations | |||||||||||||||
Reported results (GAAP) | $ | 1,932 | $ | 1,595 | $ | 352 | $ | 1,219 | $ | 3.02 | |||||||||
Factors Affecting Comparability: | |||||||||||||||||||
Restructuring, related costs and programming charges | 172 | 172 | 40 | 132 | 0.32 | ||||||||||||||
Legal settlement | 40 | 40 | 9 | 31 | 0.08 | ||||||||||||||
Gain on extinguishment of debt | — | (18 | ) | (4 | ) | (14 | ) | (0.03 | ) | ||||||||||
Gain on marketable securities | — | (21 | ) | (5 | ) | (16 | ) | (0.04 | ) | ||||||||||
Discrete tax benefit | — | — | 32 | (32 | ) | (0.08 | ) | ||||||||||||
Adjusted results (Non-GAAP) | $ | 2,144 | $ | 1,768 | $ | 424 | $ | 1,320 | $ | 3.27 | |||||||||
(in millions, except per share amounts) | |||||||||||||||||||
Quarter Ended June 30, 2018 | |||||||||||||||||||
Operating Income | Earnings from Continuing Operations Before Provision for Income Taxes | Provision for Income Taxes | Net Earnings from Continuing Operations Attributable to Viacom | Diluted EPS from Continuing Operations | |||||||||||||||
Reported results (GAAP) | $ | 752 | $ | 607 | $ | 93 | $ | 511 | $ | 1.27 | |||||||||
Factors Affecting Comparability: | |||||||||||||||||||
Restructuring and related costs | 15 | 15 | 4 | 11 | 0.03 | ||||||||||||||
Discrete tax benefit | — | — | 47 | (47 | ) | (0.12 | ) | ||||||||||||
Adjusted results (Non-GAAP) | $ | 767 | $ | 622 | $ | 144 | $ | 475 | $ | 1.18 | |||||||||
(in millions, except per share amounts) | |||||||||||||||||||
Nine Months Ended June 30, 2018 | |||||||||||||||||||
Operating Income | Earnings from Continuing Operations Before Provision for Income Taxes | Provision for Income Taxes | Net Earnings from Continuing Operations Attributable to Viacom | Diluted EPS from Continuing Operations | |||||||||||||||
Reported results (GAAP) | $ | 1,926 | $ | 1,487 | $ | 158 | $ | 1,302 | $ | 3.23 | |||||||||
Factors Affecting Comparability: | |||||||||||||||||||
Restructuring and related costs | 200 | 200 | 48 | 152 | 0.38 | ||||||||||||||
Gain on extinguishment of debt | — | (25 | ) | (6 | ) | (19 | ) | (0.05 | ) | ||||||||||
Gain on asset sale | — | (16 | ) | — | (16 | ) | (0.04 | ) | |||||||||||
Investment impairment | — | 46 | 10 | 36 | 0.09 | ||||||||||||||
Discrete tax benefit | — | — | 196 | (196 | ) | (0.49 | ) | ||||||||||||
Adjusted results (Non-GAAP) | $ | 2,126 | $ | 1,692 | $ | 406 | $ | 1,259 | $ | 3.12 | |||||||||
Restructuring, Related Costs and Programming Charges (in millions) | Nine Months Ended June 30, 2019 | ||||||||||||||
Media Networks | Filmed Entertainment | Corporate | Total | ||||||||||||
Severance | $ | 23 | $ | 14 | $ | 4 | $ | 41 | |||||||
Exit costs | 51 | — | — | 51 | |||||||||||
Other related costs | — | — | 3 | 3 | |||||||||||
Restructuring and related costs | 74 | 14 | 7 | 95 | |||||||||||
Programming | 74 | 3 | — | 77 | |||||||||||
Total | $ | 148 | $ | 17 | $ | 7 | $ | 172 | |||||||
Restructuring and Related Costs (in millions) | Quarter Ended June 30, 2018 | Nine Months Ended June 30, 2018 | |||||||||||||||||||||||||||||
Media Networks | Filmed Entertainment | Corporate | Total | Media Networks | Filmed Entertainment | Corporate | Total | ||||||||||||||||||||||||
Severance | $ | — | $ | — | $ | — | $ | — | $ | 123 | $ | — | $ | — | $ | 123 | |||||||||||||||
Exit costs | — | — | — | — | 40 | — | — | 40 | |||||||||||||||||||||||
Other related costs | — | — | 15 | 15 | — | — | 37 | 37 | |||||||||||||||||||||||
Total | $ | — | $ | — | $ | 15 | $ | 15 | $ | 163 | $ | — | $ | 37 | $ | 200 | |||||||||||||||
Quarter Ended June 30, | Better/(Worse) | Nine Months Ended June 30, | Better/(Worse) | ||||||||||||||||||||||||||
(in millions) | 2019 | 2018 | $ | % | 2019 | 2018 | $ | % | |||||||||||||||||||||
Revenues by Component | |||||||||||||||||||||||||||||
Advertising | $ | 1,226 | $ | 1,191 | $ | 35 | 3 | % | $ | 3,489 | $ | 3,604 | $ | (115 | ) | (3 | )% | ||||||||||||
Affiliate | 1,189 | 1,203 | (14 | ) | (1 | ) | 3,497 | 3,550 | (53 | ) | (1 | ) | |||||||||||||||||
Consumer products, recreation and live events | 89 | 108 | (19 | ) | (18 | ) | 283 | 337 | (54 | ) | (16 | ) | |||||||||||||||||
Total revenues by component | 2,504 | 2,502 | 2 | — | 7,269 | 7,491 | (222 | ) | (3 | ) | |||||||||||||||||||
Expenses | |||||||||||||||||||||||||||||
Operating | 1,078 | 1,072 | (6 | ) | (1 | ) | 3,045 | 3,165 | 120 | 4 | |||||||||||||||||||
Selling, general and administrative | 633 | 589 | (44 | ) | (7 | ) | 1,753 | 1,780 | 27 | 2 | |||||||||||||||||||
Depreciation and amortization | 45 | 42 | (3 | ) | (7 | ) | 128 | 127 | (1 | ) | (1 | ) | |||||||||||||||||
Total expenses | 1,756 | 1,703 | (53 | ) | (3 | ) | 4,926 | 5,072 | 146 | 3 | |||||||||||||||||||
Adjusted Operating Income | $ | 748 | $ | 799 | $ | (51 | ) | (6 | )% | $ | 2,343 | $ | 2,419 | $ | (76 | ) | (3 | )% | |||||||||||
Quarter Ended June 30, | Better/(Worse) | Nine Months Ended June 30, | Better/(Worse) | ||||||||||||||||||||||||||
(in millions) | 2019 | 2018 | $ | % | 2019 | 2018 | $ | % | |||||||||||||||||||||
Revenues by Component | |||||||||||||||||||||||||||||
Theatrical | $ | 152 | $ | 208 | $ | (56 | ) | (27 | )% | $ | 473 | $ | 358 | $ | 115 | 32 | % | ||||||||||||
Home entertainment | 161 | 119 | 42 | 35 | 493 | 465 | 28 | 6 | |||||||||||||||||||||
Licensing | 521 | 404 | 117 | 29 | 1,056 | 1,094 | (38 | ) | (3 | ) | |||||||||||||||||||
Ancillary | 43 | 41 | 2 | 5 | 206 | 140 | 66 | 47 | |||||||||||||||||||||
Total revenues by component | 877 | 772 | 105 | 14 | 2,228 | 2,057 | 171 | 8 | |||||||||||||||||||||
Expenses | |||||||||||||||||||||||||||||
Operating | 665 | 641 | (24 | ) | (4 | ) | 1,892 | 1,849 | (43 | ) | (2 | ) | |||||||||||||||||
Selling, general and administrative | 117 | 79 | (38 | ) | (48 | ) | 284 | 257 | (27 | ) | (11 | ) | |||||||||||||||||
Depreciation and amortization | 10 | 8 | (2 | ) | (25 | ) | 28 | 28 | — | — | |||||||||||||||||||
Total expenses | 792 | 728 | (64 | ) | (9 | ) | 2,204 | 2,134 | (70 | ) | (3 | ) | |||||||||||||||||
Adjusted Operating Income/Loss | $ | 85 | $ | 44 | $ | 41 | 93 | % | $ | 24 | $ | (77 | ) | $ | 101 | NM | |||||||||||||
Change in cash and cash equivalents (in millions) | Nine Months Ended June 30, | Better/(Worse) | |||||||||
2019 | 2018 | $ | |||||||||
Net cash provided by operating activities | $ | 1,103 | $ | 997 | $ | 106 | |||||
Net cash used in investing activities | (506 | ) | (128 | ) | (378 | ) | |||||
Net cash used in financing activities | (1,429 | ) | (1,309 | ) | (120 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | (3 | ) | (20 | ) | 17 | ||||||
Decrease in cash and cash equivalents | $ | (835 | ) | $ | (460 | ) | $ | (375 | ) | ||
Reconciliation of net cash provided by operating activities to free cash flow | |||||||||||
Net cash provided by operating activities (GAAP) | $ | 1,103 | $ | 997 | $ | 106 | |||||
Capital expenditures | (119 | ) | (102 | ) | (17 | ) | |||||
Free cash flow (Non-GAAP) | $ | 984 | $ | 895 | $ | 89 | |||||
Exhibit No. | Description of Exhibit | |
31.1* | ||
31.2* | ||
32.1* | ||
32.2* | ||
101.INS* | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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 8, 2019 | By: | /s/ WADE DAVIS | |
Wade Davis | |||
Executive Vice President, Chief Financial Officer | |||
Date: August 8, 2019 | By: | /s/ KATHERINE GILL-CHAREST | |
Katherine Gill-Charest | |||
Senior Vice President, Controller and Chief Accounting 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/ ROBERT M. BAKISH | |
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/ WADE DAVIS | |
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/ ROBERT M. BAKISH | |
Robert M. Bakish | |
President and Chief Executive Officer | |
August 8, 2019 |
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/ WADE DAVIS | |
Wade Davis | |
Executive Vice President, Chief Financial Officer | |
August 8, 2019 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net earnings (Viacom and noncontrolling interests) | $ (550) | $ (525) | $ (1,265) | $ (1,352) |
Other comprehensive income/(loss), net of tax: | ||||
Foreign currency translation adjustments | (8) | (228) | (50) | (175) |
Defined benefit pension plans | 1 | 1 | 2 | 4 |
Cash flow hedges | 2 | (3) | 6 | (3) |
Available-for-sale securities | 0 | 9 | 0 | 22 |
Other comprehensive income/(loss) (Viacom and noncontrolling interests) | (5) | (221) | (42) | (152) |
Comprehensive income | 545 | 304 | 1,223 | 1,200 |
Less: Comprehensive income attributable to noncontrolling interest | 5 | 1 | 23 | 25 |
Comprehensive income attributable to Viacom | $ 540 | $ 303 | $ 1,200 | $ 1,175 |
CONSOLIDATED BALANCE SHEET (Parenthetical) (unaudited) - $ / shares shares in Millions |
Jun. 30, 2019 |
Sep. 30, 2018 |
---|---|---|
Treasury Stock (shares) | 392.5 | 393.1 |
Common Class A | ||
Common Stock, Par or Stated Value Per Share (in usd per share) | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 375.0 | 375.0 |
Common Stock, Shares, Outstanding | 49.4 | 49.4 |
Common Class B | ||
Common Stock, Par or Stated Value Per Share (in usd per share) | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 5,000.0 | 5,000.0 |
Common Stock, Shares, Outstanding | 354.3 | 353.7 |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) Statement of Stockholders Equity Parenthetical - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Statement of Stockholders' Equity Parenthetical [Abstract] | ||||
Other Comprehensive Income (Loss), Tax | $ 0 | $ 5 | $ 1 | $ 13 |
Common Stock, Dividends, Per Share, Declared | $ 0.2 | $ 0.2 | $ 0.4 | $ 0.4 |
Basis of Presentation (Note) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | BASIS OF PRESENTATION Description of Business Viacom creates entertainment experiences that drive conversation and culture around the world. Through television, film, digital media, live events, merchandise and solutions, our brands connect with diverse, young and young at heart audiences in more than 180 countries. Viacom operates through two reportable segments: Media Networks and Filmed Entertainment. The Media Networks segment provides entertainment content, services and related branded products for consumers in targeted demographics attractive to advertisers, content distributors and retailers through our global media brands including flagship brands Nickelodeon, MTV, BET, Comedy Central and Paramount Network. The Filmed Entertainment segment develops, produces, finances, acquires and distributes films, television programming and other entertainment content through its Paramount Pictures, Paramount Players, Paramount Animation and Paramount Television divisions, in various markets and media worldwide, for itself and for third parties. It partners on various projects with key Viacom brands, including Nickelodeon Movies, MTV Films and BET Films. References in this document to “Viacom,” “Company,” “we,” “us” and “our” mean Viacom Inc. and our consolidated subsidiaries, unless the context requires otherwise. Unaudited Interim Financial Statements The accompanying unaudited consolidated quarterly financial statements have been prepared on a basis consistent with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules of the Securities and Exchange Commission (“SEC”). In the opinion of management, the accompanying unaudited financial statements reflect all adjustments, consisting of only normal and recurring adjustments, necessary for a fair statement of our results of operations, financial position and cash flows for the periods presented. The results of operations for the periods presented are not necessarily indicative of the results expected for the fiscal year ending September 30, 2019 (“fiscal 2019”) or any future period. These financial statements should be read in conjunction with our Form 10-K for the year ended September 30, 2018, as filed with the SEC on November 16, 2018 (the “2018 Form 10-K”). Use of Estimates Preparing financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities as of the dates presented and the reported amounts of revenues and expenses during the periods presented. Significant estimates inherent in the preparation of the accompanying Consolidated Financial Statements include estimates of film ultimate revenues, product returns, potential outcome of uncertain tax positions, fair value of acquired assets and liabilities, fair value of equity-based compensation and pension benefit assumptions. Estimates are based on past experience and other considerations reasonable under the circumstances. Actual results may differ from these estimates. Revenue Recognition We recognize revenue when control of a good or service is transferred to a customer. We consider control to be transferred when the customer has the ability to direct the use of and obtain substantially all of the remaining benefits of that good or service. Significant judgments in the determination of the amount and timing of revenue from contracts with customers include the identification of distinct performance obligations in contracts containing bundled advertising sales and content licenses and the allocation of the consideration among individual performance obligations within these arrangements based on their relative standalone selling prices. Advertising Revenues: Revenue from the sale of advertising earned by the Media Networks segment is recognized when the advertisement is aired. Advertising revenues are principally generated from the sale of advertising campaigns comprised of multiple commercial units. In contracts with guaranteed impressions, we have identified the overall advertising campaign as the performance obligation to be satisfied over time, and impressions delivered against the satisfaction of our guarantee as the measure of progress. To the extent amounts billed exceed the amount of revenue recognized by applying the measure of progress, such amounts are deferred until the impression guarantee has been satisfied. For arrangements that do not include impression guarantees, the individual spots are the performance obligation, and consideration is allocated among the individual advertising spots based on relative standalone selling prices. Affiliate Revenues: In the Media Networks segment, content is primarily distributed through its live network feeds via content license arrangements with affiliate partners, including cable television operators, direct-to-home satellite operators and mobile networks. We also license our content through television, subscription video-on-demand (“SVOD”) and over-the-top (“OTT”) distributors, syndication and transactional video-on-demand. As discussed further in the Filmed Entertainment Revenues section below, revenue associated with these arrangements is recognized upon a transfer of control, which occurs upon delivery and availability for airing by the licensee. Affiliate revenues from cable television operators, direct-to-home satellite television operators and mobile networks are recognized by the Media Networks segment as the live feeds are provided to the distributor, representing a transfer of control. The performance obligation under such affiliate agreements is a license to our content via the continuous delivery of live linear feeds, and may also include a license to programming for video-on-demand (“VOD”) viewing. Both performance obligations are satisfied over the term of the agreement. The majority of our affiliate revenues relate to sales-based royalties for which we receive a contractual rate per subscriber. Revenue for these contracts is recognized when the sale to the end customer occurs, which is generally concurrent with the delivery of the linear feeds based on the number of subscribers the customer has at the time of delivery. Consumer Products, Recreation and Live Events Revenues: Revenue associated with consumer products, recreation and live event contracts is typically recognized utilizing contractual royalty rates applied to sales amounts reported by licensees. When consumer products and recreation agreements include minimum guaranteed consideration, revenue is recognized as sales occur by the licensee or ratably if the sales-based consideration is not expected to exceed a minimum guaranteed amount of consideration. For live events, we recognize revenue when the event is held. Filmed Entertainment Revenues: In the Filmed Entertainment segment, we license our content through theatrical releases, television, SVOD and OTT distributors, and through transactional video-on-demand. We also distribute our films through DVD and Blu-ray sales through wholesale and retail partners. Revenue from the licensing of film and television exhibition rights, including broadcast and cable television networks, SVOD and other OTT services, is recognized upon a transfer of control, which occurs upon delivery and availability for airing by the licensee. Each individual title delivered represents a separate performance obligation. For renewals or extensions of licensing arrangements, revenue related to the renewal or extension is recognized upon the start of the renewal or extension period to the extent the content has been delivered to the customer. SVOD and other OTT arrangements include content made available to distributors on one or more dates for a fixed fee. Consideration for such arrangements is allocated among the titles and episodes based on relative standalone selling prices. Estimation of standalone selling prices requires judgment, which can impact the timing and amount of revenue that we recognize. In determining the transaction price of a contract, an adjustment is made if payment from our customer occurs either significantly before or after performance, resulting in a significant financing component. Applying a practical expedient in the new standard, we do not assess whether a significant financing component exists if the period between when we perform our obligations under the contract and when the customer pays is one year or less. In transactional video-on-demand and similar arrangements, our performance obligation is to provide the content to our distribution customers that provide our content to end users. These contracts provide for sales-based royalties based on the number of underlying transactions with end users. Revenue for transactional video-on-demand and similar arrangements is recognized as the content is exhibited based on end-customer purchases as reported by distributors. Similarly, revenue from licensing of our content through electronic sell-through means is recognized as each title is downloaded by the end customer, as the customer is able to use the license immediately upon download. For sales of DVDs and Blu-ray discs to wholesalers and retailers, revenue is recognized upon the later of physical delivery to the customer or the date that restrictions on sales by the retailers are lifted. Theatrical revenue is recognized from theatrical distribution of films during the exhibition period. These agreements take the form of sales-based royalties and revenue is recognized when the sale to the end customer occurs. Revenue Allowances: We record a provision for sales returns and allowances at the time of sale based upon an estimate of future returns, rebates and other incentives (“estimated returns”). In determining estimated returns, we consider numerous sources of qualitative and quantitative evidence including forecasted sales data, customers’ rights of return, units shipped and units remaining at retail, historical return rates for similar product, current economic trends, competitive environment, promotions and sales strategies. Reserves for sales returns and allowances are recorded as a liability in the Consolidated Balance Sheet. Reserves for accounts receivable are based on amounts estimated to be uncollectible and are recorded as a contra-receivable. Gross versus Net Revenue: We earn and recognize revenues under certain third-party distribution and outsourced advertising sales agreements. In such cases, determining whether revenue should be reported on a gross or net basis is based on management’s assessment of which party controls the good or service being transferred to the customer. Recently Adopted Accounting Pronouncements Revenue Recognition On October 1, 2018, we adopted ASC Topic 606 - Revenue from Contracts with Customers, a comprehensive revenue recognition model that supersedes the previous revenue recognition requirements. The guidance provides a five step framework to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. The new standard impacts the timing of revenue recognition for renewals and extensions of existing licensing agreements for intellectual property, which are now recognized as revenue when the renewal term begins rather than when the agreement is extended or renewed under previous guidance. We adopted the standard using the modified retrospective method for all contracts not completed as of the date of adoption, which resulted in a cumulative effect adjustment of $106 million to decrease the opening retained earnings balance for our 2019 fiscal year, substantially all related to television license arrangements in our Filmed Entertainment segment. The following tables present the amount each applicable financial statement line item on our Consolidated Statement of Earnings and Consolidated Balance Sheet would have increased/(decreased) if renewals and extensions of existing licensing agreements for intellectual property were recognized under previous accounting guidance:
In addition, the adoption of ASC 606 resulted in a classification change on the Consolidated Balance Sheet in which reserves related to sales returns and allowances were reclassified to Other Liabilities - current. Such amount, which was $63 million as of June 30, 2019, was previously presented as a reduction to Receivables, net. Income Taxes On October 1, 2018, we adopted ASU 2016-16 - Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory. ASU 2016-16 requires the tax effects of intercompany transactions, other than sales of inventory, to be recognized currently, eliminating an exception under the previous GAAP in which the tax effects of intra-entity asset transfers were deferred until the transferred asset was sold to a third party or otherwise recovered through use. Under the modified retrospective method, we recorded a net cumulative adjustment of $165 million to increase the opening retained earnings balance for our 2019 fiscal year, principally related to deferred tax assets that will be amortized over the next 12 to 15 years. Financial Instruments On October 1, 2018, we adopted ASU 2016-01 - Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, which addresses certain aspects of recognition, measurement, presentation and disclosure of certain financial instruments. Among other provisions, the new guidance requires the fair value measurement of equity investments. For equity investments without readily determinable fair values, entities have the option to either measure these investments at fair value or to apply a measurement alternative at cost adjusted for changes in observable prices minus impairment. All changes in measurement are recognized in net income. We adopted the standard for our marketable securities using the modified retrospective method, which resulted in a transition adjustment to reclassify $54 million, net of tax, of accumulated other comprehensive income related to our marketable securities to increase the opening retained earnings balance. For our investments without readily determinable fair values, or non-marketable securities, we have adopted the standard prospectively and elected to apply the measurement alternative described above. Gains and losses resulting from the movements in fair value of equity investments are recorded in the Consolidated Statements of Earnings. Statement of Cash Flows On October 1, 2018, we adopted ASU 2016-15 - Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, which addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The new standard impacts our Consolidated Statements of Cash Flows by increasing cash flow from operating activities and decreasing cash flow from financing activities in periods when debt prepayment or debt extinguishment costs are paid. We adopted the standard retrospectively. Pension Benefits On October 1, 2018, we adopted ASU 2017-07 - Compensation - Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires the service cost component of net periodic cost to be presented in the income statement with other current compensation costs for related employees. The other components of net periodic cost are required to be presented in the income statement outside of operating income. We adopted the standard retrospectively, which resulted in $1 million of other components of net periodic costs in the nine months ended June 30, 2018 to be reclassified from Selling, general and administrative to Other items, net in the Consolidated Statements of Earnings. As a practical expedient, we used amounts previously disclosed in the prior comparative period’s interim consolidated financial statements as the adjustments that were applied retrospectively. Accounting Pronouncements Not Yet Adopted Improvements to Accounting for Costs of Films and License Agreements for Program Materials In March 2019, the FASB issued ASU 2019-02 - Entertainment - Films - Other Assets - Film Costs and Entertainment - Broadcasters - Intangibles - Goodwill and Other. ASU 2019-02 aligns the accounting for production costs of an episodic television series with the accounting for production costs of films by removing the content distinction for capitalization. The guidance also requires that an entity test a film or license agreement for program material for impairment at a film group level when the film or license agreement is predominantly monetized with other films and/or license agreements. Further, the guidance requires that an entity reassess estimates of the use of a film in a film group and account for changes, if any, prospectively. The guidance will be effective for the first interim period of our 2021 fiscal year, with early adoption permitted. We are currently evaluating the impact of the new standard on our consolidated financial statements. Derivatives and Hedging In August 2017, the FASB issued ASU 2017-12 - Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities. Among other provisions, ASU 2017-12 expands the eligibility of hedging strategies that qualify for hedge accounting, changes the assessment of hedge effectiveness and modifies the presentation and disclosure of hedging activities. The guidance will be effective for the first interim period of our 2020 fiscal year, with early adoption permitted. We are currently evaluating the impact of the new standard on our consolidated financial statements. Financial Instruments In June 2016, the FASB issued ASU 2016-13 - Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments. Subsequently, ASU 2018-19 has been issued that amends and/or clarifies the application of ASU 2016-13. Among other provisions, the ASU introduces a new impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a forward-looking “expected loss” model that will replace the current “incurred loss” model and generally will result in earlier recognition of allowances for losses. The guidance will be effective for the first interim period of our 2021 fiscal year, with early adoption in fiscal year 2020 permitted. We are currently evaluating the impact of the new standard. Leases In February 2016, the FASB issued ASU 2016-02 - Leases. Subsequent ASUs have also been issued that amend and/or clarify the application of ASU 2016-02. ASU 2016-02 requires lessees to recognize a right-of-use asset and a lease liability on the balance sheet for most leases. For income statement purposes, leases will be classified as either operating or finance, generally resulting in straight-line expense recognition for operating leases (similar to current operating leases) and accelerated expense recognition for financing leases (similar to current capital leases). The guidance will be effective for the first interim period of our 2020 fiscal year, with early adoption permitted. The guidance provides an option to either (1) adopt retrospectively and recognize a cumulative-effect adjustment at the beginning of the earliest period presented in the financial statements or (2) recognize a cumulative-effect adjustment at the beginning of the period of adoption. We are evaluating the adoption methodology and the impact of the new guidance on our consolidated financial statements.
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Acquisition (Notes) |
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Business Combination Disclosure [Text Block] | ACQUISITION Pluto TV On March 1, 2019, we acquired Pluto Inc., the provider of the free streaming television service Pluto TV in the U.S., for $324 million, net of cash acquired. The purchase price excludes $18 million of post-combination expenses that are subject to continuous employment and will be recognized over the required service period in the Consolidated Statements of Earnings within Selling, general and administrative expenses. Pluto TV will advance our key strategic priorities, including expanding our presence across next-generation distribution platforms and accelerating growth in our advanced marketing solutions business. The following table summarizes our allocation of the purchase price as of the acquisition date. Due to the timing of the acquisition, these amounts are provisional and subject to change. We will finalize these amounts as we obtain the information necessary to complete the measurement process. Any changes resulting from facts and circumstances that existed as of the acquisition date may result in adjustments to the provisional amounts recognized at the acquisition date.
(1) In the quarter and nine months ended June 30, 2019, there was a $1 million measurement period adjustment resulting in a reduction to Receivables, net and a $2 million measurement period adjustment reflecting additional Goodwill, which were recognized at the acquisition date. The goodwill, which is not deductible for tax purposes, reflects the expected Company-specific synergies arising from the acquisition and is included in the Media Networks segment. Intangible assets consist of distribution relationships, developed technology and trade names with useful lives of 5 years. The operating results of Pluto TV from the date of acquisition through June 30, 2019 were not material.
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Inventory |
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Inventory | INVENTORY
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | DEBT Our total debt consists of the following:
In the nine months ended June 30, 2019, we redeemed $1.128 billion of senior notes and debentures for a redemption price of $1.100 billion. As a result, we recognized a pre-tax extinguishment gain of $18 million, net of $10 million of unamortized debt costs and transaction fees. Our 5.875% Junior subordinated debentures due February 2057 and 6.250% Junior subordinated debentures due February 2057 accrue interest at the stated fixed rates until February 28, 2022 and February 28, 2027, respectively, on which dates the rates will switch to floating rates based on three-month LIBOR plus 3.895% and 3.899%, respectively, reset quarterly. These debentures can be called by us at any time after the expiration of the fixed-rate period. The total unamortized discount and issuance fees and expenses related to our notes and debentures outstanding was $413 million and $431 million as of June 30, 2019 and September 30, 2018, respectively. Credit Facility In February 2019, we amended our revolving credit agreement, originally dated as of October 8, 2010, to, among other things, extend the maturity date of the $2.5 billion revolving credit facility from November 18, 2019 to February 11, 2024. The credit facility is used for general corporate purposes and to support commercial paper outstanding, if any. The borrowing rate under the amended credit facility is LIBOR plus a margin ranging from 1% to 1.625% based on our current public debt rating. The credit facility has one principal financial covenant that requires our total consolidated leverage to be less than 4.50x (which we may elect to increase to 5.0x for up to four consecutive quarters following a qualifying acquisition) as of the last day of each fiscal quarter. We met this covenant as of June 30, 2019. Total consolidated leverage is the ratio of our consolidated indebtedness as of the last day of each quarter to the consolidated EBITDA (each as defined in the amended credit agreement) for the trailing twelve-month period. As of June 30, 2019, there were no amounts outstanding under the credit facility.
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Pension Benefits |
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Pension Benefits | PENSION BENEFITSThe components of net periodic benefit cost for our defined benefit pension plans, which are currently frozen to future benefit accruals, are set forth below. Net periodic benefit cost, other than service cost, if any, is presented in the Consolidated Statements of Earnings within Other items, net.
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Redeemable Noncontrolling Interest |
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Noncontrolling Interest Disclosure | REDEEMABLE NONCONTROLLING INTEREST We are subject to a redeemable put option, payable in a foreign currency, with respect to an international subsidiary. The put option expires in December 2022 and is classified as Redeemable noncontrolling interest in the Consolidated Balance Sheets. The activity reflected within redeemable noncontrolling interest is as follows:
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Commitments and Contingencies |
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Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Commitments As more fully described in Note 11 of the 2018 Form 10-K, our commitments primarily consist of programming and talent commitments, operating and capital lease arrangements, and purchase obligations for goods and services. These arrangements result from our normal course of business and represent obligations that may be payable over several years. Contingencies We have certain indemnification obligations with respect to leases primarily associated with the previously discontinued operations of Famous Players Inc. (“Famous Players”). In addition, we have certain indemnities provided by the acquirer of Famous Players. These lease commitments amounted to approximately $111 million as of June 30, 2019 and are presented in the Consolidated Balance Sheets within Other liabilities. The amount of lease commitments varies over time depending on expiration or termination of individual underlying leases, or of the related indemnification obligation, and foreign exchange rates, among other things. We may also have exposure for certain other expenses related to the leases, such as property taxes and common area maintenance. We believe our accrual is sufficient to meet any future obligations based on our consideration of available financial information, the lessees’ historical performance in meeting their lease obligations and the underlying economic factors impacting the lessees’ business models.
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Revenues (Notes) |
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Jun. 30, 2019 | |
Revenues [Abstract] | |
Revenue from Contract with Customer [Text Block] | REVENUES Contract Balances The timing of revenue recognition, billings and cash collections results in receivables and contract liabilities in the Consolidated Balance Sheets. Current receivables were $3.386 billion and $3.117 billion as of June 30, 2019 and October 1, 2018, respectively. Noncurrent receivables are principally related to long-term television license arrangements at Filmed Entertainment and SVOD and other OTT arrangements at Media Networks. Noncurrent receivables, included within Other assets - noncurrent in our Consolidated Balance Sheets, were $393 million and $380 million as of June 30, 2019 and October 1, 2018, respectively. Such amounts are due in accordance with the underlying terms of the respective agreements. We have determined that credit loss allowances are generally not considered necessary for these amounts. When consideration is received from a customer prior to satisfying, or partially satisfying, a performance obligation under the terms of a contract, a contract liability is recorded. Contract liabilities are recognized as revenue when control of the products or services is transferred to the customer. Our contract liabilities primarily relate to advertising sales arrangements where revenues have been deferred due to impression guarantees, consumer products arrangements with minimum guarantees and advance payments under content licensing arrangements. Contract liabilities are primarily short term and shown as Deferred revenue in our Consolidated Balance Sheets. Current deferred revenue was $474 million and $402 million as of June 30, 2019 and October 1, 2018, respectively. Noncurrent deferred revenue, included within Other liabilities in our Consolidated Balance Sheets, was $54 million and $67 million as of June 30, 2019 and October 1, 2018, respectively. Revenue recognized in the nine months ended June 30, 2019 relating to contract liabilities as of September 30, 2018 was $290 million. Performance Obligations Satisfied in Previous Periods Under certain contracts we provide licenses to functional intellectual property where revenue is recognized based on sales to the end customer. These types of contracts can result in recognition of revenue in a period subsequent to the period in which our performance obligation is satisfied, and are primarily entered into by our Filmed Entertainment reporting segment. We recognized approximately $67 million of revenue during the quarter ended June 30, 2019 from performance obligations satisfied, or partially satisfied, prior to March 31, 2019. We recognized approximately $133 million of revenue during the nine months ended June 30, 2019 from performance obligations satisfied, or partially satisfied, prior to September 30, 2018. These revenues were primarily related to the distribution of film and television content through transactional electronic sell-through and VOD. Future Performance Obligations As of June 30, 2019, unrecognized revenues attributable to performance obligations not yet satisfied under various long-term contracts were approximately $3.0 billion. This revenue is generally expected to be recognized over a period of up to 10 years, but the majority will be recognized over the next three years. Our most significant remaining performance obligations relate to film and television content licensing arrangements, as well as affiliate and other arrangements that contain minimum guarantees. The amount disclosed does not include: (i) revenues related to performance obligations that are part of a contract that have an original expected duration of one year or less and (ii) content license contracts for which variable consideration is determined based on the customer's subsequent sale or usage.
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Restructuring |
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Restructuring | RESTRUCTURING, RELATED COSTS AND PROGRAMMING CHARGES During fiscal 2018, we launched a program of cost transformation initiatives to improve our margins. We recognized pre-tax charges of $172 million in the nine months ended June 30, 2019, associated with continuing initiatives primarily related to recent management changes and reorganization at Media Networks, comprised of $95 million of restructuring and related costs and $77 million of programming charges. The charges, as detailed in the table below, included severance charges, exit costs principally resulting from vacating certain leased properties, related costs comprised of third-party professional services and programming charges. The programming charges resulted from decisions by management newly in place, as part of our 2018 restructuring activities, to cease the use of certain programming, and are included within Operating expenses in the Consolidated Statement of Earnings.
(1) Includes equity-based compensation expense of $1 million in the nine months ended June 30, 2019 and $6 million in the nine months ended June 30, 2018. Our severance liability by reportable segment is as follows:
As of June 30, 2019, of the remaining $126 million liability, $91 million was classified within Other liabilities – current in the Consolidated Balance Sheets, with the remaining $35 million classified within Other liabilities – noncurrent. We expect to complete these restructuring actions in fiscal 2019. Amounts classified as noncurrent are expected to be substantially paid through 2021, in accordance with applicable contractual terms. In addition, we made payments related to exit costs of $22 million in the nine months ended June 30, 2019.
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Income Taxes |
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Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | INCOME TAXES As of December 31, 2018, all relevant provisions of the Tax Cuts and Jobs Act (the “Act”), enacted on December 22, 2017, became applicable to us. Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act, provided a measurement period of one year from the date of enactment for which provisional amounts could be recorded. As of one year from enactment, we completed our analysis with regard to the Act and therefore do not have any remaining provisional amounts recorded in the Consolidated Balance Sheet. As guidance regarding the Act continues to be forthcoming, the application of such guidance may result in additional charges to our income tax provision. We have also elected to account for the effects of global intangible low tax income as a component of income tax expense in the period the tax arises. Our effective income tax rate was 18.3% and 22.1% in the quarter and nine months ended June 30, 2019, respectively. A net discrete tax benefit of $32 million in the quarter and nine months ended June 30, 2019, taken together with the discrete tax impact of the restructuring and related costs, programming charges, legal settlement, gain on extinguishment of debt and the gain on marketable securities, decreased the effective income tax rate by 4.8 and 1.9 percentage points in the quarter and nine months, respectively. The net discrete tax benefit in the quarter was principally related to a tax benefit triggered by the bankruptcy of an investee. Our effective income tax rate was 15.3% and 10.6% in the quarter and nine months ended June 30, 2018, respectively. A net discrete tax benefit of $47 million in the quarter and $196 million in the nine months, taken together with the discrete tax impact of the restructuring and related costs, investment impairment and gain on debt extinguishment, reduced the effective income tax rate by 7.9 and 13.4 percentage points in the quarter and nine months, respectively. The net discrete tax benefit in the quarter was principally related to a tax accounting method change granted by the Internal Revenue Service and the release of tax reserves with respect to certain effectively settled tax positions. In addition to the items in the quarter, the net discrete tax benefit in the nine months was principally related to tax reform, as well as the measurement of the deferred tax balances from the retroactive reenactment of legislation allowing for accelerated tax deductions on certain qualified film and television productions.
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Earnings Per Share | EARNINGS PER SHARE Basic earnings per common share is computed by dividing Net earnings attributable to Viacom by the weighted average number of common shares outstanding during the period. The determination of diluted earnings per common share includes the weighted average number of common shares plus the dilutive effect of equity awards based upon the application of the treasury stock method. Anti-dilutive common shares were excluded from the calculation of diluted earnings per common share. The following table sets forth the weighted average number of common shares outstanding used in determining basic and diluted earnings per common share and anti-dilutive common shares:
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Supplemental Cash Flow and Other Information |
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Supplemental Cash Flow and Other Information | SUPPLEMENTAL CASH FLOW AND OTHER INFORMATION Our supplemental cash flow information is as follows:
Equity Awards During the nine months ended June 30, 2019, we granted 2.9 million stock options and 2.1 million performance and restricted share units to employees with a weighted average grant date fair value of $7.31 and $31.09 per share, respectively. During the nine months ended June 30, 2018, we granted 2.4 million stock options and 1.5 million performance and restricted share units to employees with a weighted average grant date fair value of $8.83 and $32.42 per share, respectively. Investments During the nine months ended June 30, 2018, we recognized an impairment loss of $46 million to write off certain cost method investments. We also completed the sale of a 1% equity interest in Viacom18 to our joint venture partner for $20 million, resulting in a gain of $16 million. The impairment charge and gain on asset sale were included in Other items, net in the Consolidated Statements of Earnings. Variable Interest Entities In the normal course of business, we enter into joint ventures or make investments with business partners that support our underlying business strategy and provide us the ability to enter new markets to expand the reach of our brands, develop new programming and/or distribute our existing content. In certain instances, an entity in which we make an investment may qualify as a variable interest entity (“VIE”). In determining whether we are the primary beneficiary of a VIE, we assess whether we have the power to direct matters that most significantly impact the activities of the VIE and have the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. Our Consolidated Balance Sheets include amounts related to consolidated VIEs totaling $44 million in assets and $4 million in liabilities as of June 30, 2019, and $72 million in assets and $5 million in liabilities as of September 30, 2018. The consolidated VIEs’ revenues, expenses and operating income were not significant for all periods presented. Legal Settlement During the quarter ended March 31, 2019, a commercial dispute arose and was settled for $40 million.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The fair value of our marketable securities was $101 million and $80 million as of June 30, 2019 and September 30, 2018, respectively, which is included within Other assets, noncurrent on our Consolidated Balance Sheets, as determined utilizing a market approach based on quoted market prices in active markets at period end (Level 1 in the fair value hierarchy). The carrying value of non-marketable equity investments was $139 million as of June 30, 2019. The fair value of our notes and debentures outstanding was approximately $10.1 billion and $10.5 billion as of June 30, 2019 and September 30, 2018, respectively. The valuation of our publicly traded debt is based on quoted prices in active markets (Level 1 in the fair value hierarchy). The fair value of our foreign exchange contracts was a liability of $1 million and $8 million as of June 30, 2019 and September 30, 2018, respectively, as determined utilizing a market-based approach (Level 2 in the fair value hierarchy). The notional value of all foreign exchange contracts was $725 million and $642 million as of June 30, 2019 and September 30, 2018, respectively. As of June 30, 2019, $433 million related to future production costs and $292 million related to our foreign currency balances. As of September 30, 2018, $345 million related to future production costs and $297 million related to our foreign currency balances.
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Reportable Segments (Disclosure) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reportable Segments | REPORTABLE SEGMENTS The following tables set forth our financial performance by reportable segment. Our reportable segments have been determined in accordance with our internal management structure. We manage our operations through two reportable segments: (i) Media Networks and (ii) Filmed Entertainment. Typical intersegment transactions include the purchase of advertising by the Filmed Entertainment segment on Media Networks’ properties and the licensing of Filmed Entertainment’s feature film and television content by Media Networks. The elimination of such intercompany transactions in our consolidated financial statements is included within eliminations in the tables below. Our measure of segment performance is adjusted operating income. Adjusted operating income is defined as operating income, before equity-based compensation and certain other items identified as affecting comparability, when applicable.
(1) Includes equity-based compensation expense of $1 million in the nine months ended June 30, 2019 and $6 million in the nine months ended June 30, 2018.
During the first quarter of fiscal 2019, we changed our presentation of revenues by component to better align the revenue classification to the inherent nature of the underlying revenue transactions. Amounts previously reported as ancillary revenues in Media Networks were renamed to consumer products, recreation and live events. Further, certain components of Media Networks revenue, including syndication and download-to-own revenues, previously reported within ancillary revenues were reclassified to affiliate revenues. Amounts previously reported as feature film revenues in Filmed Entertainment were disaggregated among (i) theatrical, (ii) home entertainment and (iii) licensing. Prior period amounts have been recast to conform to the current presentation.
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Related Party Transactions | RELATED PARTY TRANSACTIONS National Amusements, Inc. (“National Amusements”), directly and indirectly, is the controlling stockholder of both Viacom and CBS Corporation (“CBS”). National Amusements owns shares in Viacom representing approximately 79.8% of the voting interest in Viacom and approximately 9.9% of Viacom’s combined common stock. National Amusements is controlled by Sumner M. Redstone, our Chairman Emeritus, who is the Chairman and Chief Executive Officer of National Amusements, through the Sumner M. Redstone National Amusements Trust (the “SMR Trust”), which owns shares in National Amusements representing 80% of the voting interest of National Amusements. The shares representing the other 20% of the voting interest of National Amusements are held through a trust controlled by Shari E. Redstone, who is Mr. Redstone’s daughter, the non-executive Vice Chair of Viacom’s Board of Directors, the non-executive Vice Chair of CBS’s board of directors, and the President and a member of the Board of Directors of National Amusements. The shares of National Amusements held by the SMR Trust are voted solely by Mr. Redstone until such time as his incapacity or death. Upon Mr. Redstone’s incapacity or death, Ms. Redstone will also become a trustee of the SMR Trust and the shares of National Amusements held by the SMR Trust will be voted by the trustees of the SMR Trust. The current trustees include Mr. Redstone, who is also a member of the Board of Directors of National Amusements and serves as Chairman Emeritus of CBS. Transactions between Viacom and related parties are overseen by our Governance and Nominating Committee. Viacom and National Amusements Related Party Transactions National Amusements licenses films in the ordinary course of business for its movie theaters from all major studios, including Paramount. During the nine months ended June 30, 2019 and 2018, Paramount earned revenues from National Amusements in connection with these licenses in the aggregate amount of approximately $4 million and $5 million, respectively. Viacom and CBS Corporation Related Party Transactions In the ordinary course of business, we are involved in transactions with CBS and its various businesses that result in the recognition of revenues and expenses by us. Transactions with CBS are settled in cash. Our Filmed Entertainment segment earns revenues and recognizes expenses associated with its distribution of certain television products into the home entertainment market on behalf of CBS. Pursuant to its agreement with CBS, Paramount distributes CBS’s library of television and other content on DVD and Blu-ray disc on a worldwide basis. Under the terms of the agreement, Paramount is entitled to retain a fee based on a percentage of gross receipts and is generally responsible for all out-of-pocket costs, which are recoupable prior to any participation amounts paid. Paramount also earns revenues from CBS through leasing of studio space and licensing of certain film products. Our Media Networks segment recognizes advertising revenues and licenses television programming from CBS. The cost of the programming purchases is initially recorded as acquired program rights inventory and amortized over the estimated period that revenues will be generated. Both of our segments recognize advertising expenses related to the placement of advertisements with CBS. The following table summarizes the transactions with CBS as included in our consolidated financial statements:
Other Related Party Transactions In the ordinary course of business, we are involved in related party transactions with equity investees. These related party transactions primarily relate to the provision of advertising services, licensing of film and programming content and distribution of films, for which the impact on our consolidated financial statements is as follows:
All other related party transactions were not material in the periods presented.
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Basis of Presentation Basis of Presentation (Policies) |
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Revenue Policy [Abstract] | |
Revenue [Policy Text Block] | Revenue Recognition We recognize revenue when control of a good or service is transferred to a customer. We consider control to be transferred when the customer has the ability to direct the use of and obtain substantially all of the remaining benefits of that good or service. Significant judgments in the determination of the amount and timing of revenue from contracts with customers include the identification of distinct performance obligations in contracts containing bundled advertising sales and content licenses and the allocation of the consideration among individual performance obligations within these arrangements based on their relative standalone selling prices. Advertising Revenues: Revenue from the sale of advertising earned by the Media Networks segment is recognized when the advertisement is aired. Advertising revenues are principally generated from the sale of advertising campaigns comprised of multiple commercial units. In contracts with guaranteed impressions, we have identified the overall advertising campaign as the performance obligation to be satisfied over time, and impressions delivered against the satisfaction of our guarantee as the measure of progress. To the extent amounts billed exceed the amount of revenue recognized by applying the measure of progress, such amounts are deferred until the impression guarantee has been satisfied. For arrangements that do not include impression guarantees, the individual spots are the performance obligation, and consideration is allocated among the individual advertising spots based on relative standalone selling prices. Affiliate Revenues: In the Media Networks segment, content is primarily distributed through its live network feeds via content license arrangements with affiliate partners, including cable television operators, direct-to-home satellite operators and mobile networks. We also license our content through television, subscription video-on-demand (“SVOD”) and over-the-top (“OTT”) distributors, syndication and transactional video-on-demand. As discussed further in the Filmed Entertainment Revenues section below, revenue associated with these arrangements is recognized upon a transfer of control, which occurs upon delivery and availability for airing by the licensee. Affiliate revenues from cable television operators, direct-to-home satellite television operators and mobile networks are recognized by the Media Networks segment as the live feeds are provided to the distributor, representing a transfer of control. The performance obligation under such affiliate agreements is a license to our content via the continuous delivery of live linear feeds, and may also include a license to programming for video-on-demand (“VOD”) viewing. Both performance obligations are satisfied over the term of the agreement. The majority of our affiliate revenues relate to sales-based royalties for which we receive a contractual rate per subscriber. Revenue for these contracts is recognized when the sale to the end customer occurs, which is generally concurrent with the delivery of the linear feeds based on the number of subscribers the customer has at the time of delivery. Consumer Products, Recreation and Live Events Revenues: Revenue associated with consumer products, recreation and live event contracts is typically recognized utilizing contractual royalty rates applied to sales amounts reported by licensees. When consumer products and recreation agreements include minimum guaranteed consideration, revenue is recognized as sales occur by the licensee or ratably if the sales-based consideration is not expected to exceed a minimum guaranteed amount of consideration. For live events, we recognize revenue when the event is held. Filmed Entertainment Revenues: In the Filmed Entertainment segment, we license our content through theatrical releases, television, SVOD and OTT distributors, and through transactional video-on-demand. We also distribute our films through DVD and Blu-ray sales through wholesale and retail partners. Revenue from the licensing of film and television exhibition rights, including broadcast and cable television networks, SVOD and other OTT services, is recognized upon a transfer of control, which occurs upon delivery and availability for airing by the licensee. Each individual title delivered represents a separate performance obligation. For renewals or extensions of licensing arrangements, revenue related to the renewal or extension is recognized upon the start of the renewal or extension period to the extent the content has been delivered to the customer. SVOD and other OTT arrangements include content made available to distributors on one or more dates for a fixed fee. Consideration for such arrangements is allocated among the titles and episodes based on relative standalone selling prices. Estimation of standalone selling prices requires judgment, which can impact the timing and amount of revenue that we recognize. In determining the transaction price of a contract, an adjustment is made if payment from our customer occurs either significantly before or after performance, resulting in a significant financing component. Applying a practical expedient in the new standard, we do not assess whether a significant financing component exists if the period between when we perform our obligations under the contract and when the customer pays is one year or less. In transactional video-on-demand and similar arrangements, our performance obligation is to provide the content to our distribution customers that provide our content to end users. These contracts provide for sales-based royalties based on the number of underlying transactions with end users. Revenue for transactional video-on-demand and similar arrangements is recognized as the content is exhibited based on end-customer purchases as reported by distributors. Similarly, revenue from licensing of our content through electronic sell-through means is recognized as each title is downloaded by the end customer, as the customer is able to use the license immediately upon download. For sales of DVDs and Blu-ray discs to wholesalers and retailers, revenue is recognized upon the later of physical delivery to the customer or the date that restrictions on sales by the retailers are lifted. Theatrical revenue is recognized from theatrical distribution of films during the exhibition period. These agreements take the form of sales-based royalties and revenue is recognized when the sale to the end customer occurs. Revenue Allowances: We record a provision for sales returns and allowances at the time of sale based upon an estimate of future returns, rebates and other incentives (“estimated returns”). In determining estimated returns, we consider numerous sources of qualitative and quantitative evidence including forecasted sales data, customers’ rights of return, units shipped and units remaining at retail, historical return rates for similar product, current economic trends, competitive environment, promotions and sales strategies. Reserves for sales returns and allowances are recorded as a liability in the Consolidated Balance Sheet. Reserves for accounts receivable are based on amounts estimated to be uncollectible and are recorded as a contra-receivable. Gross versus Net Revenue: We earn and recognize revenues under certain third-party distribution and outsourced advertising sales agreements. In such cases, determining whether revenue should be reported on a gross or net basis is based on management’s assessment of which party controls the good or service being transferred to the customer.
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Basis of Presentation Basis of Presentation - Table 1 - (Tables) |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statement of Earnings Effect Under Previous Revenue Recognition Guidance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statement of Earnings Under Previous Revenue Recognition Guidance [Table Text Block] | The following tables present the amount each applicable financial statement line item on our Consolidated Statement of Earnings and Consolidated Balance Sheet would have increased/(decreased) if renewals and extensions of existing licensing agreements for intellectual property were recognized under previous accounting guidance:
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Basis of Presentation Basis of Presentation - Table 2 - (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Effect Under Previous Revenue Recognition Guidance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Effect Under Previous Revenue Recognition Guidance [Table Text Block] |
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Acquisition (Tables) |
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition [Table Text Block] |
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Inventory (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Balances |
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Debt (Tables) |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Our total debt consists of the following:
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Pension Benefits (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Periodic Benefit Cost (Table) | The components of net periodic benefit cost for our defined benefit pension plans, which are currently frozen to future benefit accruals, are set forth below. Net periodic benefit cost, other than service cost, if any, is presented in the Consolidated Statements of Earnings within Other items, net.
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Redeemable Noncontrolling Interest (Tables) |
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interest [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable Noncontrolling Interest | The activity reflected within redeemable noncontrolling interest is as follows:
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Restructuring, related costs and programming charges (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs [Table Text Block] |
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Severance liability (Tables) |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Severance Liability by Type of Cost [Table Text Block] | Our severance liability by reportable segment is as follows:
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Shares Outstanding and Anti-dilutive Common Shares | The following table sets forth the weighted average number of common shares outstanding used in determining basic and diluted earnings per common share and anti-dilutive common shares:
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Supplemental Cash Flow and Other Information (Tables) |
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information | Our supplemental cash flow information is as follows:
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Reportable Segments (Tables) |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues by Segment |
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Adjusted Operating Income (Loss) |
(1) Includes equity-based compensation expense of $1 million in the nine months ended June 30, 2019 and $6 million in the nine months ended June 30, 2018. |
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Total Assets |
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Revenues by Component |
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Related Party Transactions (Tables) |
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Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Persons Transactions (Tables) | The following table summarizes the transactions with CBS as included in our consolidated financial statements:
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Related Parties Transactions (Tables) | In the ordinary course of business, we are involved in related party transactions with equity investees. These related party transactions primarily relate to the provision of advertising services, licensing of film and programming content and distribution of films, for which the impact on our consolidated financial statements is as follows:
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Inventory (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Sep. 30, 2018 |
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Film inventory: | ||
Released, net of amortization | $ 478 | $ 454 |
Completed, not yet released | 58 | 11 |
In process and other | 753 | 713 |
Television productions: | ||
Released, net of amortization | 40 | 6 |
In process and other | 216 | 201 |
Original programming: | ||
Released, net of amortization | 1,189 | 1,124 |
In process and other | 795 | 757 |
Acquired program rights, net of amortization | 1,195 | 1,411 |
Home entertainment inventory | 58 | 67 |
Total inventory, net | 4,782 | 4,744 |
Less current portion | 819 | 896 |
Noncurrent portion | 3,963 | 3,848 |
Film Inventory | ||
Inventory Net [Line Items] | ||
Total Inventory Net Of Amortization | 1,289 | 1,178 |
Television Productions | ||
Inventory Net [Line Items] | ||
Total Inventory Net Of Amortization | 256 | 207 |
Original Programming | ||
Inventory Net [Line Items] | ||
Total Inventory Net Of Amortization | $ 1,984 | $ 1,881 |
Debt Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
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Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Sep. 30, 2018 |
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Debt Instrument [Line Items] | |||||
Extinguishment of Debt, Amount | $ 1,128 | ||||
Repayments of Debt | 1,100 | ||||
Gain on extinguishment of debt | $ 0 | $ 0 | 18 | $ 25 | |
Write off of Deferred Debt Issuance Cost | $ 10 | ||||
Junior subordinated debentures due February 2057, 5.875% | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate Terms | Our 5.875% Junior subordinated debentures due February 2057 and 6.250% Junior subordinated debentures due February 2057 accrue interest at the stated fixed rates until February 28, 2022 and February 28, 2027, respectively, on which dates the rates will switch to floating rates based on three-month LIBOR plus 3.895% and 3.899%, respectively, reset quarterly. These debentures can be called by us at any time after the expiration of the fixed-rate period. | ||||
Senior Notes and Senior and Junior Debentures | |||||
Debt Instrument [Line Items] | |||||
Unamortized net discount related to notes and debentures | $ 413 | $ 413 | $ 431 |
Credit Facility Narrative (Details) $ in Millions |
9 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Debt Instrument [Line Items] | |
Long-term Line of Credit | $ 0 |
Revolving Credit Agreement | |
Debt Instrument [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 2,500 |
Line of Credit Facility, Covenant Terms | The credit facility has one principal financial covenant that requires our total consolidated leverage to be less than 4.50x (which we may elect to increase to 5.0x for up to four consecutive quarters following a qualifying acquisition) as of the last day of each fiscal quarter. We met this covenant as of June 30, 2019. Total consolidated leverage is the ratio of our consolidated indebtedness as of the last day of each quarter to the consolidated EBITDA (each as defined in the amended credit agreement) for the trailing twelve-month period. |
Revolving Credit Agreement | LIBOR | Minimum | |
Debt Instrument [Line Items] | |
Margin rate | 1.00% |
Revolving Credit Agreement | LIBOR | Maximum | |
Debt Instrument [Line Items] | |
Margin rate | 1.625% |
Pension Benefits (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Net Periodic Benefit Cost Abstract | ||||
Interest cost | $ 10 | $ 9 | $ 29 | $ 26 |
Expected return on plan assets | (10) | (10) | (30) | (30) |
Recognized actuarial loss | 1 | 1 | 4 | 5 |
Net periodic benefit cost | $ 1 | $ 0 | $ 3 | $ 1 |
Redeemable Noncontrolling Interest (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Redeemable Noncontrolling Interest [Roll Forward] | ||
Beginning balance | $ 246 | $ 248 |
Net earnings | 10 | 13 |
Distributions | (13) | (14) |
Translation adjustment | (6) | (4) |
Redemption value adjustment | 13 | 2 |
Ending Balance | $ 250 | $ 245 |
Commitments and Contingencies (Details) $ in Millions |
Jun. 30, 2019
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Recorded liability for lease indemnifications | $ 111 |
Revenues Contract Balances (Details) - USD ($) $ in Millions |
9 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Oct. 01, 2018 |
Sep. 30, 2018 |
|
Receivables, Net, Current | $ 3,386 | $ 3,117 | $ 3,141 |
Deferred Revenue, Current | 474 | 402 | $ 398 |
Contract with Customer, Liability, Revenue Recognized | 290 | ||
Other Noncurrent Assets [Member] | |||
Accounts Receivable, after Allowance for Credit Loss, Noncurrent | 393 | 380 | |
Contract liabilities, noncurrent (included in Other liabilities) [Member] | |||
Deferred Revenue, Noncurrent | $ 54 | $ 67 |
Revenues Performance Obligations Satisfied in Previous Periods (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
Filmed Entertainment [Member] | ||
Performance Obligations Satisfied in Previous Periods [Line Items] | ||
Contract with Customer, Performance Obligation Satisfied in Previous Period | $ 67 | $ 133 |
Revenues Future Performance Obligations (Details) $ in Billions |
9 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Revenues [Abstract] | |
Revenue, Remaining Performance Obligation, Amount | $ 3.0 |
Revenue, remaining performance obligation, period | 10 years |
Primarily Over 3 Years [Member] | |
Revenue, remaining performance obligation, period | 3 years |
Severance Reserve Rollforward (Details) $ in Millions |
9 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Severance Liability [Roll Forward] | |
Severance reserve, beginning balance | $ 195 |
Accruals | 41 |
Severance payments | (110) |
Severance reserve, ending balance | 126 |
Media Networks | |
Severance Liability [Roll Forward] | |
Severance reserve, beginning balance | 149 |
Accruals | 23 |
Severance payments | (73) |
Severance reserve, ending balance | 99 |
Filmed Entertainment | |
Severance Liability [Roll Forward] | |
Severance reserve, beginning balance | 23 |
Accruals | 14 |
Severance payments | (20) |
Severance reserve, ending balance | 17 |
Corporate | |
Severance Liability [Roll Forward] | |
Severance reserve, beginning balance | 23 |
Accruals | 4 |
Severance payments | (17) |
Severance reserve, ending balance | $ 10 |
Restructuring Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Sep. 30, 2018 |
|||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring Charges and Programming Inventory Restructure | [1] | $ 0 | $ 15 | $ 172 | $ 200 | ||
Restructuring Charges and Programming Inventory Restructure, Net of Tax | 0 | 172 | |||||
Restructuring and related costs | 0 | 15 | 95 | 200 | |||
Restructuring and Related Costs | 0 | $ 15 | 95 | 200 | |||
Programming inventory restructure | 0 | 77 | |||||
Restructuring Reserve | 126 | 126 | $ 195 | ||||
Restructuring Reserve, Period Increase (Decrease) | 41 | ||||||
Restructuring Reserve Settled with Cash Severance | 110 | ||||||
Restructuring Reserve, Current | 91 | 91 | |||||
Restructuring Reserve, Noncurrent | $ 35 | 35 | |||||
Restructuring Reserve Settled with Cash Exit Costs | 22 | ||||||
Allocated Share-Based Compensation Expense [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring Charges and Programming Inventory Restructure | $ 1 | $ 6 | |||||
|
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Income Tax Disclosure [Abstract] | ||||
Effective Income Tax Rate Reconciliation, Percent | 18.30% | 15.30% | 22.10% | 10.60% |
Effective Income Tax Rate Reconciliation,Other Reconciling Items, Percent | (4.80%) | (7.90%) | (1.90%) | (13.40%) |
Net Discrete Tax Benefit | $ 32 | $ 47 | $ 32 | $ 196 |
Earnings Per Share (Details) - shares shares in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Common Shares Outstanding and Anti-dilutive Common Shares [Abstract] | ||||
Weighted average number of common shares outstanding, basic | 403.5 | 402.8 | 403.3 | 402.6 |
Dilutive effect of equity awards | 0.5 | 0.5 | 0.4 | 0.3 |
Weighted average number of common shares outstanding, diluted | 404.0 | 403.3 | 403.7 | 402.9 |
Anti-dilutive common shares | 17.6 | 18.9 | 19.2 | 19.2 |
Supplemental Cash Flow and Other Information (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Supplemental Cash Flow Information [Abstract] | ||
Cash paid for interest | $ 347 | $ 403 |
Cash paid for income taxes | $ 217 | $ 95 |
Supplemental Cash Flow and Other Information Narrative (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Sep. 30, 2018 |
|
Supplemental Cash Flow and Other Information [Abstract] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 2.9 | 2.4 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 2.1 | 1.5 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 7.31 | $ 8.83 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ 31.09 | $ 32.42 | |||
Investment [Line Items] | |||||
Cost-method Investments, Other than Temporary Impairment | $ 46 | ||||
Variable Interest Entities [Abstract] | |||||
Variable Interest Entity, Consolidated, Carrying Amount, Assets | $ 44 | $ 44 | $ 72 | ||
Variable Interest Entity, Consolidated, Carrying Amount, Liabilities | 4 | 4 | $ 5 | ||
Gain (Loss) Related to Litigation Settlement | $ 0 | $ 0 | $ (40) | $ 0 | |
Viacom18 [Member] | |||||
Investment [Line Items] | |||||
Equity Method Investment, Ownership Percentage Sold | 1.00% | 1.00% | |||
Proceeds from Sale of Equity Method Investments | $ 20 | ||||
Equity Method Investment, Realized Gain (Loss) on Disposal | $ (16) |
Fair Value Measurements (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Sep. 30, 2018 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Non-Marketable Securities | $ 139 | |
Notional value of foreign currency contracts | 725 | $ 642 |
Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities, Noncurrent | 101 | 80 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative, Fair Value, Net | (1) | (8) |
Net Investments In Foreign Operations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notional value of foreign currency contracts | 292 | 297 |
Future Production Costs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notional value of foreign currency contracts | 433 | 345 |
Senior Notes and Senior and Junior Debentures [Member] | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt Instrument, Fair Value Disclosure | $ 10,100 | $ 10,500 |
Reportable Segments - Narrative (Details) |
9 Months Ended |
---|---|
Jun. 30, 2019
Segment
| |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 2 |
Reportable Segments - Revenues by Segment (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Segment Reporting Information [Line Items] | ||||
Revenues | $ 3,357 | $ 3,237 | $ 9,405 | $ 9,458 |
Eliminations | (24) | (37) | (92) | (90) |
Media Networks | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 2,504 | 2,502 | 7,269 | 7,491 |
Filmed Entertainment | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 877 | $ 772 | $ 2,228 | $ 2,057 |
Reportable Segments - Adjusted Operating Income (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|||
Segment Reporting Information [Line Items] | ||||||
Restructuring, related costs and programming charges (1) | [1] | $ 0 | $ 15 | $ 172 | $ 200 | |
Gain (Loss) Related to Litigation Settlement | 0 | 0 | (40) | 0 | ||
Operating income | 757 | 752 | 1,932 | 1,926 | ||
Interest expense, net | (119) | (138) | (364) | (428) | ||
Equity in net earnings of investee companies | 0 | 2 | 1 | 5 | ||
Gain/(loss) on marketable securities | 29 | 0 | 21 | 0 | ||
Gain on extinguishment of debt | 0 | 0 | 18 | 25 | ||
Other items, net | (1) | (9) | (13) | (41) | ||
Earnings from continuing operations before provision for income taxes | 666 | 607 | 1,595 | 1,487 | ||
Media Networks | ||||||
Segment Reporting Information [Line Items] | ||||||
Adjusted operating income (loss) by Segment | 748 | 799 | 2,343 | 2,419 | ||
Filmed Entertainment | ||||||
Segment Reporting Information [Line Items] | ||||||
Adjusted operating income (loss) by Segment | 85 | 44 | 24 | (77) | ||
Corporate expenses | ||||||
Segment Reporting Information [Line Items] | ||||||
Corporate expenses | (65) | (60) | (182) | (175) | ||
Eliminations | ||||||
Segment Reporting Information [Line Items] | ||||||
Eliminations | 3 | (6) | (1) | (2) | ||
Selling, General and Administrative Expenses | ||||||
Segment Reporting Information [Line Items] | ||||||
Equity-based compensation | $ (14) | $ (10) | (40) | (39) | ||
Allocated Share-Based Compensation Expense [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Restructuring, related costs and programming charges (1) | $ 1 | $ 6 | ||||
|
Reportable Segments - Total Assets (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Sep. 30, 2018 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Total assets | $ 23,648 | $ 23,783 |
Media Networks | ||
Segment Reporting Information [Line Items] | ||
Total assets | 17,811 | 17,576 |
Filmed Entertainment | ||
Segment Reporting Information [Line Items] | ||
Total assets | 5,537 | 5,297 |
Corporate/Eliminations | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 300 | $ 910 |
Reportable Segments - Revenues by Component (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Revenue from External Customer [Line Items] | ||||
Total revenues | $ (3,357) | $ (3,237) | $ (9,405) | $ (9,458) |
Eliminations - Revenue [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | (24) | (37) | (92) | (90) |
Media Networks | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | (2,504) | (2,502) | (7,269) | (7,491) |
Media Networks | Advertising [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | (1,226) | (1,191) | (3,489) | (3,604) |
Media Networks | Affiliate Revenue [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | (1,189) | (1,203) | (3,497) | (3,550) |
Media Networks | Consumer products, recreation and live events [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | (89) | (108) | (283) | (337) |
Filmed Entertainment | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | (877) | (772) | (2,228) | (2,057) |
Filmed Entertainment | Theatrical [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | (152) | (208) | (473) | (358) |
Filmed Entertainment | Home entertainment [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | (161) | (119) | (493) | (465) |
Filmed Entertainment | Licensing [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | (521) | (404) | (1,056) | (1,094) |
Filmed Entertainment | Ancillary | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | $ (43) | $ (41) | $ (206) | $ (140) |
Related Party Transactions Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Related Party Transaction [Line Items] | ||
Ownership Percent Of Class A Stock By Controlling Stockholder | 79.80% | |
Ownership Percent Of Class A And Class B Stock By Controlling Stockholder | 9.90% | |
Percentage Of Voting Interest Controlled By The Chairman Of The Controlling Stockholder Entity | 80.00% | |
Percentage Of Voting Interest Controlled By Non-Chairman Member Of The Controlling Stockholder Entity | 20.00% | |
NAI | ||
Related Party Transaction [Line Items] | ||
Revenue from Related Parties | $ 4 | |
Revenues Earned From Additional Related Persons | $ 5 |
Related Party Transactions (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Sep. 30, 2018 |
|
CBS | |||||
Consolidated Statements of Earnings | |||||
Revenues | $ 29 | $ 21 | $ 80 | $ 90 | |
Operating expenses | 5 | 25 | 67 | 110 | |
Consolidated Balance Sheets [Abstract] | |||||
Accounts receivable | 5 | 5 | $ 7 | ||
Participants’ share and residuals, current | 40 | 40 | 58 | ||
Program obligations, current | 26 | 26 | 38 | ||
Program obligations, noncurrent | 16 | 16 | 32 | ||
Other liabilities | 0 | 0 | 2 | ||
Total due to CBS and other related parties | 83 | 83 | 130 | ||
Other Related Parties | |||||
Consolidated Statements of Earnings | |||||
Revenues | 10 | 7 | 35 | 38 | |
Operating expenses | 1 | $ 3 | 5 | $ 8 | |
Consolidated Balance Sheets [Abstract] | |||||
Accounts receivable | 25 | 25 | 43 | ||
Other assets | 3 | 3 | 3 | ||
Total due from CBS and other related parties | 28 | 28 | 46 | ||
Accounts payable | 6 | 6 | 7 | ||
Other liabilities | 1 | 1 | 2 | ||
Total due to CBS and other related parties | $ 7 | $ 7 | $ 9 |
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