Viacom (VIAWE) 8-K Viacom Reports Quarterly and Nine-month Fiscal 2010 Results

Results for the Quarter and Fiscal Year Ended September 30, 2010

November 11, 2010

Exhibit 99.3

2

Cautionary Statement Concerning Forward-Looking Statements

This

presentation

contains

both

historical

and

forward-looking

statements.

All

statements

which

are

not

statements

of

historical

fact

are,

or

may

be

deemed

to

be,

forward-looking

statements.

Forward-looking

statements

reflect

the

Company’s

current

expectations

concerning

future

results,

objectives,

plans

or

goals,

and

involve

known

and

unknown

risks,

uncertainties

and

other

factors

that

are

difficult

to

predict

and

which

may

cause

actual

results,

performance

or

achievements

to

differ.

These

risks,

uncertainties

and

other

factors

include,

among

others:

the

public

acceptance

of

the

Company’s

programs,

motion

pictures

and

other

entertainment

content

on

the

various

platforms

on

which

they

are

distributed;

technological

developments

and

their

effect

in

the

Company’s

markets

and

on

consumer

behavior;

the

impact

of

piracy;

competition

for

audiences

and

distribution;

fluctuations

in

the

Company’s

results

due

to

the

timing,

mix

and

availability

of

the

Company’s

motion

pictures;

economic

conditions

generally,

and

in

advertising

and

retail

markets

in

particular;

changes

in

the

Federal

communications

laws

and

regulations;

other

domestic

and

global

economic,

business,

competitive

and/or

regulatory

factors

affecting

the

Company’s

businesses

generally;

and

other

factors

described

in

the

Company’s

news

releases

and

filings

with

the

Securities

and

Exchange

Commission,

including

its

annual

report

on

Form

10-K

and

reports

on

Form

10-Q

and

Form

8-K.

The

forward-looking

statements

included

in

this

presentation

are

made

only

as

of

the

date

of

this

presentation,

and

the

Company

does

not

have

any

obligation

to

publicly

update

any

forward-looking

statements

to

reflect

subsequent

events

or

circumstances.

Reconciliations

for

any

non-GAAP

financial

information

contained

in

this

presentation

are

included

in

this

presentation

or

found

on

the

Company’s

website

at

www.viacom.com.

This

presentation

is

a

supplement

to,

and

should

be

read

in

conjunction

with,

Viacom’s

earnings

release

for

the

quarter

and

the

nine-month

fiscal

year

ended

September

30,

2010.

As

previously

announced,

Viacom

changed

its

fiscal

year

end

to

September

30

commencing

with

the

fiscal

year

2010.

Viacom

also

announced

that

it

plans

to

sell

Harmonix,

which

developed

the

Rock

Band

music

video

game

franchise.

Accordingly,

the

Company

reclassified

the

business

as

a

discontinued

operation

and

has

recast

its

results

from

previous

periods

to

reflect

this

change.   

3

($ In Millions, except per share amounts)

Reported Results

Note:

n/m

–

not

meaningful

Quarter ended

Nine months ended

September 30,

September 30,

2010

B/(W) 2009

2010

B/(W) 2009

Revenues

3,330

$   

5%

9,337

$   

1%

Expenses

(2,387)

(5%)

(6,828)

2%

D&A

(72)

6%

(222)

5%

Equity-Based

Compensation

(34)

(13%)

(80)

(13%)

Restructuring

-

-

-

n/m

Operating Income

837

4%

2,207

16%

Net Earnings from

Continuing Operations

Attributable to Viacom

488

7%

1,175

23%

Diluted EPS from

Continuing Operations

0.80

7%

1.92

22%

Weighted Average

Diluted Shares

611.3

-

610.7

-

4

See

page

5

for

footnotes

and

pages

15

-

20

for

a

reconciliation

to

GAAP

results.

($ In Millions, except per share amounts)

Adjusted Results

Quarter ended

Nine months ended

September 30,

September 30,

2010

B/(W) 2009

2010

B/(W) 2009

Revenues

3,330

$   

5%

9,337

$   

1%

Expenses

(2,387)

(5%)

(6,828)

2%

D&A

(72)

6%

(222)

5%

Equity-Based Compensation

(34)

(13%)

(80)

(13%)

Adjusted Operating Income

837

4%

2,207

14%

Adjusted Net Earnings from

Continuing Operations

Attributable to Viacom

461

7%

1,148

20%

Adjusted Diluted EPS from

Continuing Operations

0.75

6%

1.88

20%

Weighted Average

Diluted Shares

611.3

-

610.7

-

(1)

(2)

(1)

(2)

5

Footnotes

1.

Adjusted

results

for

the

quarter

and

nine

months

ended

September

30,

2010

exclude

$27

million

of

discrete

tax

benefits

principally

related

to

the

disposition

of

certain

assets

($0.05

per

share

for

the

quarter

and

$0.04

per

share

for

the

nine

months).

2.

Adjusted

results

for

the

quarter

ended

September

30,

2009

exclude

an

$84

million

pre-tax

loss

on

the

early

extinguishment

of

a

portion

of

the

Company’s

5.75%

Senior

Notes

due

2011

($52

million

after-tax,

$0.08

per

share)

and

$74

million

of

discrete

tax

benefits,

the

majority

of

which

were

the

result

of

effectively

settled

audits

($0.12

per

share). 

Adjusted

results

for

the

nine

months

ended

September

30,

2009

exclude

the

loss

on

the

early

extinguishment

of

the

Company’s

5.75%

Senior

Notes

due

2011

($0.09

per

share)

and

the

discrete

tax

benefits

($0.12

per

share)

noted

above,

and

$33

million

of

pre-tax

severance

expenses

($21mm

after-tax,

$0.03

per

share)

attributable

to

the

Media

Networks

and

Filmed

Entertainment

segments,

which

occurred

in

the

2nd

quarter

of

2009.

6

Free Cash Flow

($ In Millions)

1)

See Page 22 for information on the reduction in asset securitization and debt extinguishment premium paid in 2009, the

definitions of operating free cash flow and free cash flow, and reconciliations to cash provided by operations.

Note:

n/m

–

not

meaningful

Quarter ended

Nine months ended

September 30,

September 30,

2010

B/(W) 2009

2010

B/(W) 2009

Operating Income

837

$      

4%

2,207

$   

16%

Depreciation & Amortization

72

(6%)

222

(5%)

Capital Expenditures

(59)

(69%)

(105)

(40%)

Cash Interest

(53)

(8%)

(270)

(1%)

Cash Taxes

(295)

n/m

(806)

n/m

Working Capital & Other

(191)

n/m

(216)

50%

Operating Free Cash Flow

(1)

311

$      

(55%)

1,032

$   

1%

Discontinued Operations, net

(6)

n/m

10

n/m

Reduction in

Asset Securitization

(1)

-

n/m

-

n/m

Debt Retirement Premium

(1)

-

n/m

-

n/m

Free Cash Flow

(1)

305

$      

(43%)

1,042

$   

59%

7

$750

$600

$193

$837

$250

$1,500

$500

$550

$1,750

$250

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

Debt & Cash

($ In Millions)

Note: Chart excludes capital leases and other obligations. Maturity dates in the chart are on a fiscal year basis.

At 9/30/10, we had a single $3.25 billion credit facility due December 2010, which we terminated in October 2010 in

connection with entering into a new $2.0 billion credit facility.  At 9/30/10, no amounts were outstanding under the

$3.25 billion facility.

Public Debt

Cash & Cash Equivalents

September 30, 2010

Bank Debt / Commercial Paper

0

$             

Total Floating Rate Debt

0

$             

5.75% Senior Notes due April 2011

193

4.375% Senior Notes due September 2014

597

4.25% Senior Notes due September 2015

250

6.25% Senior Notes due April 2016

1,496

6.125% Senior Notes due October 2017

497

5.625% Senior Notes due September 2019

554

6.875% Senior Debentures due April 2036

1,735

6.75% Senior Debentures due October 2037

248

6.85% Senior Notes due December 2055

750

Capital Leases and Other Obligations

432

Total Fixed Rate Debt

6,752

Total Debt

6,752

$     

Cash & Cash Equivalents

837

$         

Net Debt

5,915

$     

Fiscal Year

8

Share Repurchases

(In Millions)

Note: Commenced repurchases under the $4 billion stock repurchase program on October 1, 2010.

Quarter Ended

September 30, 2010

October 1 through

November 10, 2010

Cost of Repurchase

n/a

$162

Shares Repurchased

n/a

4.3

SEGMENT HIGHLIGHTS

10

Media Networks –

Revenues by Type

($ In Millions)

Quarter ended

Nine months ended

September 30,

September 30,

2010

B/(W) 2009

2010

B/(W) 2009

Advertising

1,169

$   

7%

3,251

$   

5%

Affiliate

799

10%

2,372

10%

Ancillary

160

1%

454

11%

Total

2,128

$   

8%

6,077

$   

7%

11

Media Networks –

Financial Results

($ In Millions)

Note:

n/m

–

not

meaningful

Quarter ended

Nine months ended

September 30,

September 30,

2010

B/(W) 2009

2010

B/(W) 2009

Revenues

2,128

$   

8%

6,077

$   

7%

Expenses

(1,207)

(7%)

(3,530)

(7%)

D&A

(48)

8%

(148)

2%

Adjusted Operating

Income

873

9%

2,399

9%

Equity-Based

Compensation

(11)

15%

(27)

(4%)

Restructuring

Charges

-

n/m

-

n/m

Operating Income

862

$      

9%

2,372

$   

10%

12

Filmed Entertainment –

Revenues by Type

($ In Millions)

Quarter ended

Nine months ended

September 30,

September 30,

2010

B/(W) 2009

2010

B/(W) 2009

Theatrical

372

$      

3%

1,283

$   

4%

Home Entertainment

406

(13%)

951

(30%)

TV License Fees

372

18%

938

-

Ancillary

81

4%

190

12%

Total

1,231

$   

1%

3,362

$   

(9%)

13

Filmed Entertainment –

Significant Theatrical Releases

Qtr ended September 30, 2010

Qtr ended September 30, 2009

The Last Airbender

G.I. Joe: The Rise of Cobra

Dinner for Schmucks

The Goods: Live Hard, Sell Hard

14

Filmed Entertainment –

Financial Results

($ In Millions)

Note:

n/m

–

not

meaningful

Quarter ended

Nine months ended

September 30,

September 30,

2010

B/(W) 2009

2010

B/(W) 2009

Revenues

1,231

$   

1%

3,362

$   

(9%)

Expenses

(1,157)

(3%)

(3,255)

11%

D&A

(22)

8%

(69)

8%

Adjusted Operating

Income

52

(29%)

38

n/m

Equity-Based

Compensation

(2)

50%

(5)

17%

Restructuring

Charges

-

n/m

-

n/m

Operating Income

50

$        

(28%)

33

$        

n/m

APPENDIX RECONCILIATIONS

16

Supplemental

Disclosures:

Non-GAAP Financial Information

Non-GAAP

measures,

including

consolidated

operating

free

cash

flow,

free

cash

flow

and

adjusted

results

that

exclude

restructuring

charges,

early

extinguishment

of

debt

and

discrete

tax

benefits,

are

relevant

and

useful

information

for

investors

because

they

clarify

the

Company's

actual

operating

performance,

make

it

easier

to

compare

the

Company's

results

with

those

of

other

companies

and

allow

investors

to

review

performance

in

the

same

way

as

the

Company's

management.

These

measures

are

not

calculated

in

accordance

with

GAAP.

They

should

not

be

considered

in

isolation

of,

or

as

a

substitute

for,

cash

flow

provided

by

operations,

operating

income,

net

earnings

from

continuing

operations

attributable

to

Viacom

and

diluted

EPS

as

indicators

of

operating

performance

and

they

may

not

be

comparable

to

similarly

titled

measures

employed

by

other

companies.

17

Supplemental Disclosures:

Non-GAAP Financial Information

($ In Millions)

Quarter ended September 30, 2010

Operating

Income

Pre-tax

Earnings from

Continuing

Operations

(1)

Net Earnings

from Continuing

Operations

Attributable to

Viacom

(2)

Diluted EPS

from

Continuing

Operations

Reported Results

837

$         

724

$                   

488

$                       

0.80

$             

Factors affecting

comparability:

Discrete Tax

Benefits

(5)

-

-

(27)

(0.05)

Adjusted Results

837

$         

724

$                   

461

$                       

0.75

$             

See page 20 for footnotes.

18

Supplemental Disclosures:

Non-GAAP Financial Information

($ In Millions)

Nine Months Ended September 30, 2010

Operating

Income

Pre-tax

Earnings from

Continuing

Operations

(1)

Net Earnings

from Continuing

Operations

Attributable to

Viacom

(2)

Diluted EPS

from

Continuing

Operations

Reported Results

2,207

$      

1,812

$               

1,175

$                    

1.92

$             

Factors affecting

comparability:

Discrete Tax

Benefits

(5)

-

-

(27)

(0.04)

Adjusted Results

2,207

$      

1,812

$               

1,148

$                    

1.88

$             

See page 20 for footnotes.

19

Supplemental Disclosures:

Non-GAAP Financial Information

($ In Millions)

Quarter ended September 30, 2009

Operating

Income

Pre-tax

Earnings from

Continuing

Operations

(1)

Net Earnings

from Continuing

Operations

Attributable to

Viacom

(2)

Diluted EPS

from

Continuing

Operations

Reported Results

801

$         

596

$                   

454

$                       

0.75

$             

Factors affecting

comparability:

Extinguishment

of Debt

(4)

-

84

52

0.08

Discrete Tax

Benefits

(5)

-

-

(74)

(0.12)

Adjusted Results

801

$         

680

$                   

432

$                       

0.71

$             

See page 20 for footnotes.

20

Supplemental Disclosures:

Non-GAAP Financial Information

($ In Millions)

Nine Months Ended September 30, 2009

Operating

Income

Pre-tax

Earnings from

Continuing

Operations

(1)

Net Earnings

from Continuing

Operations

Attributable to

Viacom

(2)

Diluted EPS

from

Continuing

Operations

Reported Results

1,904

$      

1,391

$               

954

$                       

1.57

$             

Factors affecting

comparability:

Restructuring

Charges

(3)

33

33

21

0.03

Extinguishment

of Debt

(4)

-

84

52

0.09

Discrete Tax

Benefits

(5)

-

-

(74)

(0.12)

Adjusted Results

1,937

$      

1,508

$               

953

$                       

1.57

$             

See page 20 for footnotes.

21

1.

Pre-tax earnings from continuing operations represent earnings before provision for

income taxes.

2.

The tax impact has been calculated using the rates applicable to

the adjustments

presented.

3.

For

the

nine

months

ended

September

30,

2009,

adjusted

results

exclude

$33

million

of

severance

expenses

attributable

to

the

Media

Networks

and

Filmed

Entertainment

segments, which occurred in the 2nd quarter of 2009.

4.

For the quarter and nine months ended September 30, 2009, adjusted results exclude an

$84 million pre-tax loss on the early extinguishment of a portion of the Company’s 5.75%

Senior Notes due 2011.

5.

For the quarter and nine months ended September 30, 2010, adjusted results exclude $27

million of discrete tax benefits primarily related to the disposition of certain assets.  For the

quarter and nine months ended September 30, 2009, adjusted results exclude $74 million

of the discrete tax benefits, the majority of which were the result of effectively settled

audits.

Footnotes –

Pages 16 -

19

22

Supplemental Disclosures:

Non-GAAP Financial Information

1)

The Company defines free cash flow as cash provided by operations minus capital expenditures.  Free cash flow is a

non-GAAP measure.  Management believes free cash flow provides investors with an important perspective on the

Company’s liquidity, including ability to service debt and make investments in our businesses.

2)

For comparison purposes, 2010 and 2009 operating free cash flow exclude discontinued operations. 2009 operating free

cash flow also excludes a loss on the early extinguishment of a portion of the Company’s 5.75% Senior Notes due 2011

of $84 million and a scheduled reduction in the level of participation by a sponsor in one of the Company’s asset

securitization programs, which the Company elected not to replace, of $175 million.  The Company terminated its asset

securitization programs in April 2010.

3)

The Company defines operating free cash flow as cash provided by

operations minus capital expenditures plus (or

minus) uses (or sources) of cash related to its asset securitization program, the early extinguishment of debt and 

discontinued operations.  Operating free cash flow is a non-GAAP measure.  Management believes operating free cash

flow provides investors with an important perspective on the Company’s liquidity from ongoing activities.

Quarter ended

Nine months ended

September 30,

September 30,

2010

2009

2010

2009

Cash Provided By Operations

364

$        

572

$        

1,147

$     

732

$        

Capital Expenditures

(59)

(35)

(105)

(75)

Free Cash Flow

(1)

305

$        

537

$        

1,042

$     

657

$        

Discontinued Operations, net

6

70

(10)

106

Reduction in Asset Securitization

(2)

-

-

-

175

Debt Retirement Premium

(2)

-

84

-

84

Operating Free Cash Flow

(3)

311

$        

691

$        

1,032

$     

1,022

$