Time Warner CFO Howard Averill is bullish on HBO’s plan unveiled today to launch a cable-free Internet service next year, and as part of the company’s new strategic plan he says spending on productions is expected to grow by more than $4 billion to $18B.
Spending on production to grow by more than $4B to $18B.
About 17% of Time Warner revenue comes from advertising, lowest among peers — and isn’t a major growth driver in company plans.
$400M restructuring charge coming in 1H of 2015. But it will result in $450M in annual savings, most of it in 2015. A significant charge at Turner, less than $400M, from program cancellation to clear shelf space for originals.
In 2014, will benefit from settlement with IRS. Will help earnings per share. Detail to come on November 5, when Time Warner unveils Q3 earnings.
HBO OTT offering “will meaningfully accelerate HBO revenue” and could result in “hundreds of millions in additional profit.” Also kids strategy, and consumer products, could add “hundreds of millions” in profit.
We’re very confident in the plan because it’s rooted in reasonable assumptions.
Share repurchases to remain a key part of capital plan.
Interested in M&A if it improves existing businesses, but there are no must-haves. We don’t need to do anything sizeable. Our recent history is a good guide to how we approach M&A.
And that’s the financial report. Now everyone;s back for Q&A.
