|TIME WARNER INC. filed this Form 8-K on 08/02/2017|
any HBO original series ever. Opening night viewership for the season premieres of Ballers and Insecure increased 41% and 45%, respectively, compared to their premieres last season. HBO and Cinemax recently launched on Hulus live and on-demand platforms.
Revenues increased 12% ($330 million) to $3.0 billion due to higher theatrical and videogames revenues, partially offset by lower television revenues. The increase in theatrical revenues was mainly due to the box office release of Wonder Woman, and higher home entertainment revenues primarily related to the release of The LEGO Batman Movie and carryover from Fantastic Beasts and Where to Find Them. Videogames revenues benefited from a higher number and favorable mix of releases in the current year period, including Injustice 2. Television revenues declined primarily due to lower initial telecast revenues.
Operating Income decreased 28% ($85 million) to $223 million, as the growth in revenues was partially offset by higher associated film costs and print and advertising expenses primarily associated with the mix and number of film and games releases. Operating Income in last years quarter also included a gain on the sale of Flixster.
Adjusted Operating Income increased 20% ($44 million) to $261 million. Adjusted Operating Income in last years quarter excluded the gain on the sale of Flixster.
Through July 31, Wonder Woman grossed approximately $800 million at the worldwide box office and is the highest-grossing live-action film by a female director ever, the third-highest Warner Bros. movie ever at the domestic box office, grossing approximately $400 million, and the second-highest grossing movie of 2017 to date domestically. Warner Bros. received 50 Primetime Emmy nominations, its most in over a decade. Heading into the 2017-2018 television season, Warner Bros. is once again the #1 producer of primetime shows for the broadcast networks, a position it has held for 9 consecutive seasons and 14 of the last 15 seasons, with 34 series on broadcast networks, the most in Warner Bros. history. In total, Warner Bros. will produce over 65 series for the upcoming season across all networks and services. Warner Bros. and DC Entertainments Injustice 2 was the highest-grossing console game in the second quarter of 2017.
CONSOLIDATED NET INCOME AND PER SHARE RESULTS
For the three months ended June 30, 2017, the Company had Income from Continuing Operations attributable to Time Warner Inc. shareholders of $1.1 billion and EPS of $1.34. This compares to Income from Continuing Operations attributable to Time Warner Inc. shareholders for the second quarter of 2016 of $1.0 billion and EPS of $1.20. EPS benefited from the comparison to losses related to debt financing transactions at one of the Companys equity investees in last years quarter and fair value gains on investments, partially offset by the decline in Operating Income.
Adjusted EPS was $1.33 for the three months ended June 30, 2017, compared to $1.29 for last years second quarter. The increase in Adjusted EPS primarily reflects lower interest expense.
For the second quarters of 2017 and 2016, the Company had Net Income attributable to Time Warner Inc. shareholders of $1.1 billion and $1.0 billion, respectively.
USE OF NON-GAAP FINANCIAL MEASURES
The Company utilizes Adjusted Operating Income (Loss), Adjusted Operating Income margin and Adjusted EPS, among other measures, to evaluate the performance of its businesses. These measures are considered important indicators of the operational strength of the Companys businesses. Some limitations of Adjusted Operating Income (Loss), Adjusted Operating Income margin and Adjusted EPS are that they do not reflect certain charges that affect the operating results of the Companys businesses and they involve judgment as to whether items affect fundamental operating performance.