April 29, 2015 Last Updated 7:31 am

Time Warner reports revenue climbed 5%, adjusted operating income up

Adjusted Operating Income grew 12% to a record $1.8 billion, company says it has repurchased 14 million shares for $1.1 billion year-to-date

NEW YORK, NY – April 29, 2015 — Time Warner Inc. today reported financial results for its first quarter ended March 31, 2015.

Chairman and Chief Executive Officer Jeff Bewkes said: “We got off to a very strong start in 2015, with Revenues up 5%, and Adjusted Operating Income growing 12% to a quarterly record of $1.8 billion. This led to a 23% increase in Adjusted EPS and puts us on track to achieve our goals for the year. We accomplished a lot in the quarter, led by Turner, which had its best quarter ever, with audience growth across a number of its networks. The NCAA Men’s Basketball Tournament was a huge multiplatform success, with its highest average television viewership in over two decades helping make TBS the #1 ad-supported cable network in primetime among adults 18-49 in the quarter. And March Madness Live served more than 80 million live video streams and grew its usage by almost 20% over last year’s tournament. Warner Bros. led the domestic box office for the quarter on the strength of American Sniper, which brought in well over $500 million globally. Warner Bros. also continued to lead the industry in television production, including the #1 comedy and unscripted series among adults 18-49 on television this season. HBO once again grew domestic subscribers in the quarter while continuing to gain acclaim for groundbreaking programming such as the recent documentaries Going Clear: Scientology and the Prison of Belief and The Jinx: The Life and Deaths of Robert Durst. The return of Game of Thrones reached a new premiere high, while also providing the backdrop for the highly-anticipated launch of HBO NOW, our standalone streaming version of HBO – which is off to a great start. Reflecting our strong commitment to provide direct returns to shareholders, we returned more than $1.4 billion in dividends and share repurchases year-to-date.”

Company Results

Revenues increased 5% to $7.1 billion due to growth across all divisions. Adjusted Operating Income grew 12% to $1.8 billion due to growth at Turner, offset in part by declines at Warner Bros. and Home Box Office. Operating Income decreased 13% to $1.8 billion primarily due to a $441 million gain in the prior year quarter in connection with the sale and leaseback of the Company’s space in Time Warner Center. Adjusted Operating Income and Operating Income margins were both 25% in the first quarter of 2015 compared to 24% and 30%, respectively, in the prior year quarter.

The Company posted Adjusted Diluted Income per Common Share from Continuing Operations (“Adjusted EPS”) of $1.19, up 23% from $0.97 for the year-ago quarter. Diluted Income per Common Share from Continuing Operations was $1.10 compared to $1.50 in the prior year quarter.

For the first three months of 2015, Cash Provided by Operations from Continuing Operations reached $1.0 billion and Free Cash Flow totaled $1.0 billion. As of March 31, 2015, Net Debt was $20.2 billion, up from $19.9 billion at the end of 2014, due to share repurchases, dividends and investments and acquisitions, partially offset by the generation of Free Cash Flow.

Refer to “Use of Non-GAAP Financial Measures” in this release for a discussion of the non-GAAP financial measures used in this release and the reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

Stock Repurchase Program Update

From January 1, 2015 through April 24, 2015, the Company repurchased approximately 14 million shares of common stock for approximately $1.1 billion. At April 24, 2015, approximately $3.4 billion remained available for repurchases under the Company’s stock repurchase program.

Segment Performance

The schedule below reflects Time Warner’s financial performance for the three months ended March 31, by line of business (millions).


Source: Time Warner

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