Viacom Reports Second Quarter Results

• Delivered Year-over-Year Growth in Reported and Adjusted Diluted
  Earnings Per Share
• Sequentially Improved Domestic Advertising Revenue Growth, Driven
  by Acceleration in Advanced Marketing Solutions
• Delivered Ninth Straight Quarter of Year-over-Year Improvement in
  Paramount Adjusted Operating Income
• Saw Early Momentum in Pluto TV Integration, with Monthly Active
  Users Growing to Approximately 16 Million in April
• Achieved Significant Distribution Gains, with Renewed and Expanded
  AT&T Agreement, Carriage on Charter and fuboTV OTT Packages, and
  Content Deal with T-Mobile

NEW YORK–(BUSINESS WIRE)–Viacom Inc. (NASDAQ: VIAB, VIA) today reported financial results for the
quarter ended March 31st, 2019.

STATEMENT FROM BOB BAKISH, PRESIDENT & CEO

“This quarter we executed strongly on our strategic priorities and made
significant progress in advancing our evolution. We grew viewership
share at our flagship networks, accelerated our Advanced Marketing
Solutions and continued our momentum at Paramount Pictures. We also
achieved important milestones in expanding our distribution across
traditional, digital and mobile platforms, while dramatically improving
our audience reach through the integration of Pluto TV. As the media
landscape continues to segment across price points, we’re confident in
our strategy, strong results and the opportunities ahead as we continue
to position Viacom for the future.”

FILMED ENTERTAINMENT

Paramount Pictures delivered its ninth straight quarter of improved
year-over-year adjusted operating income, largely driven by gains at the
global box office and monetization of library IP.

• Adjusted OI increased by $20 million YOY.
• Total revenue declined 1%, as strong growth in theatrical and
  ancillary revenues was offset by lower licensing revenues.
• Theatrical revenue more than tripled, driven by strong carryover
  performance and current quarter releases.
  • Paramount has delivered three consecutive quarters of
    year-over-year growth in worldwide theatrical revenue.
• Licensing revenue was primarily impacted by the timing of TV
  production availabilities and comparisons to last year’s
  direct-to-SVOD release of certain films.
• Growth in worldwide ancillary revenue was primarily driven by a new
  music rights licensing agreement.

Operational Highlights

• Paramount continued its global box office momentum in the fiscal
  second quarter, driven by Bumblebee and What Men Want.
• Pet Sematary, released in FQ3 and adapted from Stephen King’s
  horror novel, performed well in theaters.
• Paramount’s film slate for the remainder of fiscal 2019 includes:
  • Rocketman, the highly anticipated biographical musical film
    about Elton John – debuting in the U.S. in May.
  • Dora and the Lost City of Gold, a live action film based on
    Nickelodeon’s Dora the Explorer franchise – scheduled for
    release in August.
• Paramount Television’s momentum continued, with 22 shows ordered to or
  in production.
  • Delivered critically acclaimed Boomerang to BET in the
    quarter, with a second season announced in April.
  • Producing a third season of Tom Clancy’s Jack Ryan for
    Amazon, as well as a second season of The Haunting of Hill
    House for Netflix.

MEDIA NETWORKS

Viacom Media Networks achieved meaningful distribution on new and
existing platforms, while growing Advanced Marketing Solutions and
viewership share across flagship networks.

• Domestic advertising revenue growth rate improved for the second
  quarter, driven by accelerating growth in Advanced Marketing Solutions
  (AMS).
  • AMS revenue increased 76% in the quarter compared to 54% in the
    fiscal first quarter, benefiting from the Pluto TV integration.
  • This year’s late Easter timing had a 1% unfavorable impact on the
    domestic ad sales growth rate.
• Domestic affiliate revenue declined due to SVOD library licensing,
  which was halted while finalizing Pluto TV’s content strategy.
  Contractual rate increases were largely offset by subscriber declines.
• International revenue was impacted by foreign exchange, macroeconomic
  headwinds in the U.K. and the timing of SVOD.
• The decrease in revenue from consumer products, recreation and live
  events resulted from softness in certain consumer product franchises
  internationally.
• Adjusted OI declined 3%, reflecting lower revenue, partially offset by
  the timing and mix of original program launches, and cost
  transformation savings.

Operational Highlights

• Viacom maintained the #1 share of basic cable viewing with key
  domestic audiences in the quarter, including the 2-49, 2-11, 12-17,
  18-34 and African American demos.
• In Live+SD viewing, Viacom flagships grew share by 2% YOY.
  • Comedy Central delivered its eighth consecutive quarter of share
    growth – up 12% YOY.
  • MTV was the fastest growing network in primetime among the top 30
    broadcast and cable networks, and increased share for the eighth
    straight quarter – up 5% YOY.
  • Paramount Network earned its second consecutive quarter of share
    growth – up 3% YOY.

• Viacom had more top 10 and top 30 original cable series in the quarter
  than any other cable family among key demos.
• Internationally, Channel 5 delivered its third consecutive quarter of
  growth in viewership share, while Telefe maintained its #1 position
  and grew share for the fourth straight quarter.
• Viacom Digital Studios (VDS) continued to grow digital consumption in
  the quarter, with original programming and content from flagship
  brands.
  • Video views grew 69% YOY to 6.4B and more than doubled watch time
    YOY with nearly 10B minutes viewed.
  • Comedy Central delivered its best quarter ever for digital video
    streams and watch time – up 40% and 71% YOY, respectively.

• Studio production continued to expand globally.
  • Awesomeness’ PEN15 premiered on Hulu to outstanding
    reviews, with a second season announced in May.
  • Awesomeness produced the recently released Netflix film, The
    Perfect Date, and upcoming Netflix series, Trinkets.
  • Viacom International Studios continued to grow its global
    footprint, with new production centers in Madrid and Manchester
    announced in April.

SPOTLIGHT ON DISTRIBUTION & PLUTO TV

Viacom advanced its distribution across traditional and virtual
MVPDs, mobile and direct-to-consumer; expanded product line with Pluto
TV acquisition.

In March, Viacom reached a new long-term deal with AT&T:

• Includes broad carriage of Viacom brands on DirecTV and U-Verse.
• Viacom has renewed or extended the vast majority of its subscriber
  base.

Expanded carriage on vMVPDs:

• Gained carriage on AT&T’s DirecTV Now Plus and Max offerings.
• Added to fuboTV’s live TV streaming service and Charter Spectrum TV
  Essentials.

Growing momentum in mobile:

• Announced a significant content distribution agreement as the
  cornerstone of T-Mobile’s forthcoming mobile video service.
• Added MTV, Nick and TV Land to AT&T Watch.
• Viacom International Media Networks (VIMN) launched MTV Play on U.K.
  mobile provider EE and Paramount+, a cross-brand streaming video
  service, on Telia in Finland.
  • VIMN now has 22 mobile-only content deals with 18 operators in 30+
    countries.

Broadened SVOD and direct-to-consumer distribution:

• Nickelodeon’s Noggin crossed 2.5M subscribers globally.
• Noggin, Nick Hits, Comedy Central Now and MTV Hits will be offered as
  Apple TV Channels in the all-new Apple TV App for iPhone, iPad and
  Apple TV later this month, on Samsung this spring and on Mac this fall.
• In April, Paramount+ signed its first Latin American partnership with
  NET in Brazil and Claro video in the rest of Latin America, including
  on mobile.

Accelerated growth in free streaming TV with Pluto TV:

• At the end of April, monthly active users grew to approximately 16
  million, up 31% since December 2018.
• Announced several new distribution and content deals:
  • Comcast recently announced the inclusion of Pluto TV in its
    Xfinity Flex service, and Pluto TV will be coming to Xfinity X1
    soon.
  • Grew roster of 150+ content partners with recent additions of CNN,
    BBC and Major League Soccer.
• Viacom launched 14 library channels on Pluto TV, broadening the
  content offering to kids, women and African Americans.
  • Launching Pluto Latino, its U.S. Hispanic channels, in July.
• International plans include launches in Latin America and Switzerland,
  and expansion in the U.K., Germany and Austria.

BALANCE SHEET AND LIQUIDITY

Viacom continued its focus on de-levering the balance sheet and
delivered improvements in free cash flow.

• At March 31, 2019, gross debt outstanding was $8.96 billion. Adjusted
  gross debt was $8.31 billion.
• For the six months ended March 31, 2019, net cash provided by
  operating activities increased $420 million to $719 million.
• For the six months ended March 31, 2019, free cash flow increased $407
  million to $642 million.

About Viacom

Viacom creates entertainment experiences that drive conversation and
culture around the world. Through television, film, digital media, live
events, merchandise and solutions, our brands connect with diverse,
young and young at heart audiences in more than 180 countries.

For more information about Viacom and its businesses, visit
www.viacom.com. Viacom may also use social media channels to communicate
with its investors and the public about the company, its brands and
other matters, and those communications could be deemed to be material
information. Investors and others are encouraged to review posts on
Viacom’s Twitter feed (twitter.com/viacom),
Facebook page (facebook.com/viacom)
and LinkedIn profile (linkedin.com/company/viacom).

Cautionary Statement Concerning Forward-Looking Statements

This news release contains both historical and forward-looking
statements. All statements that are not statements of historical fact
are, or may be deemed to be, forward-looking statements. Forward-looking
statements reflect our current expectations concerning future results,
objectives, plans and goals, and involve known and unknown risks,
uncertainties and other factors that are difficult to predict and which
may cause future results, performance or achievements to differ. These
risks, uncertainties and other factors include, among others:
technological developments, alternative content offerings and their
effects in our markets and on consumer behavior; competition for
content, audiences, advertising and distribution in a swiftly
consolidating industry; the public acceptance of our brands, programs,
films and other entertainment content on the various platforms on which
they are distributed; the impact on our advertising revenues of declines
in linear television viewing, deficiencies in audience measurement and
advertising market conditions; the potential for loss of carriage or
other reduction in the distribution of our content; evolving
cybersecurity and similar risks; the failure, destruction or breach of
our critical satellites or facilities; content theft; increased costs
for programming, films and other rights; the loss of key talent;
domestic and global political, economic and/or regulatory factors
affecting our businesses generally; volatility in capital markets or a
decrease in our debt ratings; a potential inability to realize the
anticipated goals underlying our ongoing investments in new businesses,
products, services and technologies; fluctuations in our results due to
the timing, mix, number and availability of our films and other
programming; potential conflicts of interest arising from our ownership
structure with a controlling stockholder; and other factors described in
our news releases and filings with the Securities and Exchange
Commission, including but not limited to our 2018 Annual Report on Form
10-K and reports on Form 10-Q and Form 8-K. The forward-looking
statements included in this document are made only as of the date of
this document, and we do not have any obligation to publicly update any
forward-looking statements to reflect subsequent events or
circumstances. If applicable, reconciliations for any non-GAAP financial
information contained in this news release are included in this news
release or available on our website at ir.viacom.com.

SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES

We utilize certain financial measures that are not in accordance with
accounting principles generally accepted in the United States of America
(“GAAP”), including consolidated adjusted operating income, adjusted
earnings from continuing operations before provision for income taxes,
adjusted provision for income taxes, adjusted net earnings from
continuing operations attributable to Viacom and adjusted diluted
earnings per share (“EPS”) from continuing operations, to evaluate our
actual operating performance and for planning and forecasting of future
periods.

We also utilize free cash flow, which is a non-GAAP financial measure,
because we believe the use of this measure provides investors with an
important perspective on our liquidity, including our ability to service
debt and make investments in our business.

In addition, because foreign currency headwinds can be significant and
unpredictable and are outside of our control, we provide certain
financial information on a constant currency basis, excluding the impact
of currency fluctuations, in order to provide a clearer view of our
operating performance. This information compares results between periods
as if exchange rates had remained constant period-over-period. We
calculate this information by converting current-period local currency
results using prior-year period average foreign currency exchange rates.

We believe that each of these adjusted measures provides relevant and
useful information for investors because they clarify our actual
operating performance, make it easier to compare our results with those
of other companies, facilitate period-to-period comparisons of our
business performance and allow investors to review performance in the
same way as our management. Since these are not measures of performance
calculated in accordance with GAAP, they should not be considered in
isolation of, or as a substitute for, operating income, earnings from
continuing operations before provision for income taxes, provision for
income taxes, net earnings from continuing operations attributable to
Viacom, diluted EPS from continuing operations and net cash provided by
operating activities as indicators of operating performance and they may
not be comparable to similarly titled measures employed by other
companies.

The following tables reconcile our results of operations reported in
accordance with GAAP for the quarters and six months ended March 31,
2019 and 2018 to adjusted results that exclude the impact of certain
items identified as affecting comparability (non-GAAP).

Contacts

Press:
Justin Dini
Senior
Vice President, Corporate Communications
(212) 846-2724
[email protected]

Justin
Blaber
Senior Director, Corporate Communications
(212)
846-3139
[email protected]

Pranita
Sookai
Director, Corporate Communications
(212) 846-7553
[email protected]

Investors:
James
Bombassei
Senior Vice President, Investor Relations and
Treasurer
(212) 258-6377
[email protected]

Jaime
Morris
Vice President, Investor Relations
(212) 846-5237
[email protected]

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