Revenues Up 13 Percent at Viacom

NEW YORK, August 2: Second-quarter revenues at Viacom were
$3.19 billion, a 13-percent increase, but profit remained flat at $434 million,
down 1 percent on last year’s $437.3 million.

Operating income in the second quarter rose 6 percent to
$702 million, which includes the impact of approximately $11 million of Media
Networks restructuring charges. Net earnings from continuing operations for the
quarter increased 4 percent to $433 million. This included $65 million in
after-tax income related to a $94 million gain on the sale of MTV Networks'
investment in Russia. The gain was partially offset by a $22 million after-tax
impairment charge to write off an investment in Amp'd Mobile, which filed for
bankruptcy, and after-tax Media Networks restructuring charges of $7 million.

"We continued to make significant strides this past
quarter to better position Viacom for future growth, both domestically and
abroad," said Philippe P. Dauman, the president and CEO of Viacom.
"Our Media Networks made substantial investments in original programming
for the television screen, while expanding our branded presence across digital
platforms. We launched a number of new, narrowly targeted websites this past
quarter, providing richer experiences for our highly engaged consumers. This
helped drive an average of 85 million unique visitors per month to our branded
sites globally, a 68 percent increase over second quarter of last year. As part
of our international strategy, we announced the formation of a joint venture in
India that will include television, film and digital media content across
numerous brands in this rapidly growing market. We also sold our equity stake
in MTV Networks' Russian investment, but will maintain a prominent presence in
that market through a licensing agreement. These moves are part of our effort
to establish the optimal business structure in each market to increase the
value and profitability of our international business."

Dauman continued: "Our Filmed Entertainment segment
delivered an outstanding quarter of results with multiple box office hits,
including Blades of Glory, Disturbia and the distribution of DreamWorks Animation's Shrek
the Third. We are very pleased with the
success of Transformers, our
summer tentpole released in early July, which is well positioned to become a
new franchise property. We also just announced the completion of the sale of
Famous Music, and intend to invest those proceeds into growing our businesses
and buying back our stock."

Media Networks’ revenues were up 10 percent to $1.9 billion,
with worldwide advertising revenues up 6 percent to $1.15 billion, affiliate
fees up 15 percent to $577 million and ancillary revenues up 16 percent to $198
million. Operating income for Media Networks was $734.2 million, reflecting a
3-percent increase.

Filmed entertainment revenue jumped 20 percent to $1.3
billion, reflecting a 35-percent increase in home entertainment revenues to
$545 million and a 34-percent increase in theatrical revenues to $437 million,
partially offset by a 12-percent decrease in television license fees. Operating
income soared from $4.8 million to $21.4 million.