Viacom, Inc. (NASDAQ:VIAB) Q4 2017 Earnings Conference Call Transcript
Nov 16, 2017 • 08:30 am ET
Good day, everyone, and welcome to the Viacom Fourth Quarter 2017 Earnings Release Conference Call. Today's call is being recorded. At this time, I'd like to turn the call over to the SVP of IR, Mr. Jim Bombassei. Please go ahead, sir.
Good morning, everyone. Thank you for taking the time to join us for our September quarter's earnings call. Joining me for today's discussion are Bob Bakish, our President and CEO; and Wade Davis, our CFO.
(Forward-Looking Cautionary Statements) Today's remarks will focus on adjusted results. Reconciliations for non-GAAP financial information discussed on this call can be found in our earnings release or on our website.
Now I'll turn the call over to Bob.
Thanks, Jim, and good morning, everyone. Thanks so much for joining us. Let me start by highlighting what a difference a year makes. Last year, on the Q4 call, when I had just been announced as acting CEO, Viacom reported meaningful declines across all key financial metrics. This quarter's and this year's performance is dramatically stronger. Comparing year-over-year performance for 2017 versus 2016 on a like-for-like basis, excluding Telefe and foreign exchange, consolidated revenues improved 5% versus a decline of 5%, adjusted operating income was flat versus a decline of 30%, and operating free cash flow grew by more than $300 million versus a decline of over $1 billion in 2016. Finally, as part of our commitment to a strong balance sheet and maintaining investment-grade metrics, since February, we paid down approximately $2 billion of debt, a reduction of 15%. This is an area we continue to be focused on, and you will see further delevering over the course of 2018. Our momentum has been driven by the new strategy we introduced in February, a strategy we have spent the last nine months aggressively executing against. Our momentum is also the product of the many organizational and operational changes we have made to support that strategy. And it's not just financial metrics that have improved, it's operating metrics as well. Throughout 2017, we set out to fundamentally stabilize and revitalize the business, and that is exactly what we've done.
First, you see it in the flagship brands, which we have prioritized and put on a path to broader exposure. It's a strategy that's working. We closed the quarter with U.S. ratings across the portfolio up 3% and flagships up 6%. This ratings story extends internationally as well, where each and every one of our flagship brands as well as our general entertainment cornerstones, Channel 5 and Telefe, achieved growth in share for the first time ever. At the same time, we've made progress in broadening the expression of our brands, particularly with respect to features at Paramount, where we have a slate of branded films coming in 2019. Second, you see it in the partnerships that we've strengthened. In distribution, per our strategy, we have, in fact, grown our business beyond carriage to include data, advertising and coproduction. Our renewed agreements with Altice and, more recently,