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Time Warner Inc. Reports Financial Results for 2005 Full Year and Fourth Quarter

by on February 2, 2006

Time Warner Inc. on Wednesday reported financial results for its fourth quarter and full year ended December 31, 2005.

For the quarter, revenues climbed 7% over the same period in 2004 to $11.9 billion, driven by increases at the Filmed Entertainment, Cable, Networks and Publishing segments. Adjusted Operating Income rose 18% to $2.9 billion, reflecting double-digit increases at the Networks, Filmed Entertainment, Cable and Publishing segments. Operating Income improved 37% to $2.2 billion. The company earned $0.29 per share for the three months ended December 31, 2005, compared with $0.24 in last year’s fourth quarter.

For the year, revenues rose 4% over 2004 to $43.7 billion, reflecting increases at the company’s Cable, Networks, Publishing and Filmed Entertainment reporting segments. Adjusted Operating Income climbed to $10.7 billion, up 8% from $9.9 billion in the prior year, driven by double-digit growth at the Cable and Networks segments as well as gains at the AOL and Publishing segments. Operating Income decreased to $4.5 billion in 2005 from $6.2 billion in 2004 — reflecting primarily the costs associated with securities litigation. Cash Provided by Operations amounted to $5.0 billion, and Free Cash Flow grew to $4.4 billion. As of December 31, 2005, Net Debt was $16.1 billion, essentially flat compared to the beginning of 2005, reflecting payments made in connection with securities litigation and government investigations, repurchases of common stock, and dividends. Earnings per share for the year ended December 31, 2005 came in at $0.62, compared to $0.68 in 2004.

Regarding the company’s earnings, Time Warner CEO Dick Parson had this to say:

“I’m pleased with our Company’s 2005 financial performance that drew strength from across our businesses — led by double-digit gains at our Cable and Networks segments. We achieved all of our full-year financial objectives, and each of our businesses made significant progress against its respective operating and competitive goals. In 2005, our film studios combined to top the domestic and global box offices as well as U.S. home video sales; TNT and TBS continued to lead their competitors in key audiences; and Time Inc. again ranked first in U.S. magazine advertising. Time Warner Cable set new records in its video, data and voice subscription growth for the year, while we made important strategic progress at AOL. At the same time, we continued to allocate our capital to targeted high-growth, strategic opportunities inside and outside the Company, including our $12.5 billion stock repurchase plan.

Our scale and closely related, industry-leading businesses give Time Warner significant competitive advantages and strategic flexibility in today’s rapidly changing environment. In the coming year, we’ll continue to derive real value from our unique opportunities and deliver on our top priority for our shareholders: to provide a highly competitive near-term return while building sustainable value.”

[Source: Business Wire]

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