MUMBAI: US media conglomerate Time Warner has announced that its revenues rose four per cent over 2005 to $44.2 billion, reflecting increases at the company’s cable and networks segments.
Time Warner chairman and CEO Dick Parsons said, “I am delighted that 2006 proved to be a good year for Time Warner. Taken together, our businesses performed well, and we achieved all of our announced financial objectives. We successfully executed on our strategy – enabling us to lead our industry and lay the foundation for creating significant new value. At the same time, we returned billions of dollars directly to our shareholders through dividends and stock repurchases.
“We expect 2007 to be another superb year for Time Warner. Our businesses are well positioned to generate strong operating and financial performances. On the strategic front, we aim to create substantial incremental value by completing the integration of our recently acquired cable systems, further developing AOL’s online advertising business, and driving digital initiatives across the entire company.
“In addition, we will continue to allocate our capital effectively, including the expected completion of our current $20 billion stock repurchase programme during the first half of 2007.”
Fourth-quarter revenues climbed by eight per cent over the same period in 2005 to $12.5 billion, driven by increases at the cable and networks segments. In its networks division which comprises of Turner Broadcasting and HBO revenues for the year rose by seven per cent ($703 million) to $10.3 billion, benefiting from growth in subscription, ad and content revenues, including the consolidation of Court TV ($253 million) from January 1, 2006.
Subscription revenues climbed nine per cent ($498 million), due to higher rates and, to a lesser extent, increased subscribers at Turner and HBO, as well as the consolidation of Court TV ($84 million). Included in the prior year results was a $22 million benefit from the resolution of certain contractual agreements at Turner. Ad revenues were up four per cent ($111 million), led by a 13 per cent increase at Turner, including Court TV ($164 million), offset primarily by the cessation of The WB Network’s operations in September 2006.
Content revenues increased seven per cent ($70 million), due mainly to higher sales of HBO’s original programming, including the domestic cable sale of The Sopranos, offset partially by lower syndication sales of Sex and the City and the prior year licensing revenues from Everybody Loves Raymond, which ended its broadcast run in 2005.
At AOL revenues for the year declined by five per cent ($417 million) to $7.9 billion, due to a 14 per cent decrease ($971 million) in Subscription revenues, offset in part by a 41 per cent increase ($548 million) in ad revenues.
The lower subscription revenues resulted mainly from a decline in domestic AOL brand subscribers, which related partially to AOL’s strategy, implemented in August 2006, of offering its e-mail, certain software and other products free of charge to Internet users. Ad revenues reflected strong growth in display advertising, advertising run on third-party Web sites generated by Advertising.com and paid-search advertising.
In the film segment revenues decreased by 11 per cent ($1.3 billion) to $10.6 billion, due to difficult comparisons to the prior year record performance at Warner Bros. In 2005, Warner Bros. finished number one in worldwide theatrical box office, driven by the success of Harry Potter and the Goblet of Fire, Charlie and the Chocolate Factory and Batman Begins.
In addition, a strong theatrical slate contributed to a record performance at Warner Home Video during 2005. These difficult comparisons and the lower performance of the theatrical slate in 2006 led to a decline at Warner Home Video in 2006.
