For the first quarter of 2003, Viacom revenues increased 7 per cent to a record $6.05 billion from $5.67 billion for the same quarter last year, led by 14 per cent growth in video and 13 per cent growth in cable networks segments. Operating income increased 14 per cent to a record $987 million from $866 million, led by double-digit growth in cable networks, television and video segments, a company release says.

First quarter 2003 net earnings before cumulative effect of change in accounting principle increased 26 per cent to $462 million, from $367 million in the same quarter last year. Viacom's first quarter net earnings were $443 million versus a net loss of $1.11 billion for the same prior-year period.

The company's EBITDA (operating income before depreciation and amortization of $241 million) in the first quarter of 2003 increased 12 per cent to a record $1.23 billion from $1.09 billion. Free cash flow for the first quarter of 2003 was $592 million versus $380 million for the same prior-year period. The increase in free cash flow was principally due to earnings growth and lower payments for interest, taxes and working capital versus the first quarter of 2002. Free cash flow reflects the Company's net cash flow provided by operating activities of $699 million less capital expenditures of $108 million.

Sumner M. Redstone, chairman and CEO of Viacom was quoted as saying, "Viacom is off to a strong start in 2003, with high single-digit revenue increases, double-digit gains in operating income and a 26 per cent increase in net earnings in the first quarter. Additionally, we continue to generate strong levels of free cash flow, in line with our goal to convert a significant amount of our earnings into free cash flow. Our ability to deliver results to shareholders speaks to the quality and diversity of our business lines as well as the superior performance of our management team. These factors, supported by our strong balance sheet, will continue to drive our results for the rest of 2003 and beyond."

Mel Karmazin, president and COO of Viacom was quoted in the same release as saying, "We began 2003 as we ended 2002, with record results and excellent prospects for continued growth. Once again, the strength of Viacom's cable networks and television operations, which turned in operating income gains of 21 per cent and 13 per cent, respectively, paced the company's growth. Our video operations also turned in an outstanding performance in the quarter with 25 per cent operating income growth. Cable networks and television drove a 6 per cent overall increase in Viacom's first quarter advertising revenues, an outstanding accomplishment, particularly in light of the continuing economic challenges and the absence of significant contributions from our radio and outdoor businesses. As contributions from radio and outdoor grow, shareholders will benefit from the full strength of Viacom's assets. This, along with the continued superior performance of our other segments and the prospect of a promising television upfront sales season, will keep us on track to deliver strong results for the full year."