For the first time since the merger that created Time Warner, the company posted full-year net profits. Four of the company’s operating divisions — music , filmed entertainment, HBO and cable — boasted record gains, and the fifth, publishing, posted increases.
For 1992, Time Warner reported net income of $ 86 million vs. a loss of $ 99 million for 1991. Fourth-quarter net income spiked up 51% to $ 68 million, vs. $ 45 million for the year-earlier period.
But because of $ 542 million paid out in preferred dividends, the company recorded a full-year loss per common share of $ 1.46, compared with a loss of $ 2.40 per share in 1991 when $ 692 million was paid out in preferred dividends.
The loss per common share for the fourth quarter was 25 cents after preferred dividends of $ 93 million compared with a loss of 29 cents per share after preferred dividends of $ 107 million for the ’91 period.
The results for 1992 and 1991 each include non-cash amortization charges in excess of $ 500 million associated with Time Inc.’s 1989 acquisition of Warner Communications.
Revenue for the year rose 9% to $ 13.07 billion from $ 12.02 billion in 1991. Revenue for the quarter rose 9.7% to $ 3.72 billion from $ 3.39 billion a year earlier.
Full-year earnings before interest, taxes, depreciation and amortization — EBITDA (an accepted indicator of a company’s operating performance) — totaled $ 2.515 billion, up 11% from 1991’s $ 2.263 billion.
The 1991 full-year results include a $ 60 million one-time charge taken against EBITDA in the third quarter for restructuring of the company’s publishing division. Time Warner recorded EBITDA of $ 731 million in the fourth quarter, compared to $ 677 million in the year-earlier period.
Wall Street analysts said the operating results were very much in line with their expectations. “There are no surprises here,” said Manny Gerard of Gerard Klauer Mattison & Co.
“1992 was a year of significant achievement for Time Warner which resulted in an improved balance sheet and strong business performance,” said chairman and CEO Gerald Levin, in a statement announcing the results.
In addition to improved operating performance, “Our debt maturities were lengthened and our senior debt achieved investment grade ratings. We established Time Warner Entertainment, launched our strategic alliance with Toshiba and Itochu (formerly C. Itoh) and repurchased the 18.7% of American Television & Communications we did not already own.
“In addition, we increased the common stock dividend and split our stock four for one. Since year end, we’ve made further progress — announcing the redemption of all the series D preferred stock, which will substantially improve our common share results.”
The company has raised about $ 3 billion over the past two months through a series of new debt and securities offerings that have enabled it to redeem all 65 million of its Series D preferred stock, which had been paying an 11% dividend in new stock.
Last week, the company filed a shelf registration with the Securities & Exchange Commission for up to $ 1.5 billion of debt securities, which will be used to retire a portion of its $ 3 billion of Series C preferred stock.
Full-year operating earnings for the company’s Filmed Entertainment division were a record $ 410 million. Fourth-quarter operating earnings was a record $ 92 million, bolstered by the strong box office results for the “The Bodyguard” ($ 111 million domestically and over $ 200 million internationally as of Feb. 7) and “Forever Young” ($ 52 million domestically).
Warner Bros. was No. 1 in domestic box office share for the second year in a row in 1992 and the third time in four years.
The company said worldwide theatrical revenues, worldwide homevideo sales and international syndications sales also set records.
The Warner Music Group posted record full-year operating earnings of $ 585 million.
Operating earnings for the fourth quarter were a record $ 196 million.
Worldwide sales were led by mega-hits from Eric Clapton, Madonna, Metallica, Simply Red, R.E.M., Enya, Luis Miguel and En Vogue.
The company’s Programming-HBO division posted record year-end operating earnings of $ 215 million. Fourth-quarter operating earnings were up 19% to $ 56 million. The year-end subscriber count for Home Box Office and Cinemax stood at 23.7 million, compared to 23.6 million in 1991.
Time Warner Cable’s full-year EBITDA rose 12% to $ 977 million. Fourth-quarter operating earnings increased 13% to a record $ 255 million. The company credited an increase in revenues from subscribers and advertising for the improved results. The division’s subscriber base totaled 7.1 million at year end ’92, up from 6.7 million in 1991.
The only operating division not posting record results, Publishing logged year-end operating earnings of $ 328 million vs. $ 246 million in ’91, after a one-time $ 60 million restructuring charge in the ’91 third quarter. Fourth-quarter operating earnings were $ 132 million.
The company said the division was helped by magazine circulation and advertising revenue increases, led by strong performances by People, Southern Living and Entertainment Weekly. Time Life Inc., a direct-marketer of books, music and videos, also posted a record year.
Time Warner’s stock closed unchaged yesterday at $ 34.50.