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viacom Q208%20Web%20Deck%20FINAL%207.29

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This document summarizes Viacom's financial results for the second quarter and first half of 2008. Key highlights include: - Revenues for Q2 2008 increased 21% to $3.9 billion and increased 18% to $7 billion for the first half. - Operating income for Q2 2008 increased 13% to $792 million and increased 19% to $1.4 billion for the first half. - Earnings per share from continuing operations for Q2 2008 increased 2% to $0.64 and increased 15% to $1.06 for the first half. - Media Networks revenues increased 11% in Q2 2008 and 14% for the first half, driven by increases in affiliate fees

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2nd QUARTER 2008 RESULTS July 29, 2008
Cautionary Statement Concerning Forward-Looking Statements This presentation contains both historical and forward-looking statements. All statements, including Business Outlook, which are not statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements reflect the Company’s current expectations concerning future results, objectives, plans and goals, and involve known and unknown risks, uncertainties and other factors that are difficult to predict and which may cause actual results, performance or achievements to differ. These risks, uncertainties and other factors include, among others: advertising market conditions; the public acceptance of and ratings for the Company’s feature films, programs, digital services and other content, as well as related advertisements; competition for advertising dollars; technological developments and their effect in the Company’s markets and on consumer behavior; fluctuations in the Company’s results due to the timing, mix and availability of the Company’s programming, films and other content; changes in the Federal communications laws and regulations; the impact of piracy; the impact of increased scale in parties involved in the distribution and aggregation of the Company’s products and program services to consumers and advertisers; the impact of union activity; other domestic and global economic, business, competitive and/or regulatory factors affecting the Company’s businesses generally; and other factors described in the Company’s news releases and filings with the Securities and Exchange Commission, including but not limited to the Company’s 2007 Annual Report on Form 10-K and reports on Form 10-Q and Form 8-K. The forward-looking statements included in this presentation are made only as of the date of this presentation, and the Company does not have any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances. Reconciliations for any non-GAAP financial information contained in this presentation are included in this presentation or found on the Company’s website at www.viacom.com. This presentation is a supplement to, and should be read in conjunction with, Viacom’s earnings release for the second quarter ended June 30, 2008. Page 1
Reported Results ($ In Millions, except per share amounts) 2nd Quarter Year-to-Date 2008 B/(W) 2007 2008 B/(W) 2007 Revenues $ 3,857 21% $ 6,974 18% Expenses (2,946) (24%) (5,384) (19%) Equity Compensation (22) (22%) (42) - D&A (97) 1% (189) 3% Operating Income 792 13% 1,359 19% Net Earnings, 406 (6%) 676 6% Continuing Operations Diluted EPS, 0.64 2% 1.06 15% Continuing Operations Weighted Average 630.1 8% 635.5 8% Diluted Shares Page 2
Adjusted Results ($ In Millions, except per share amounts) 2nd Quarter Year-to-Date 2008 B/(W) 2007 (2) 2008 (1) B/(W) 2007 (2) Revenues $ 3,857 21% $ 6,974 18% (25%) (2) (5,384) (1) (21%) (2) Adjusted Expenses (2,946) Equity Compensation (22) (22%) (42) - D&A (97) 1% (189) 3% (2) (1) (2) Adjusted Operating Income 792 11% 1,359 12% Adjusted Net Earnings, 10% (2) (1) (2) 406 688 14% Continuing Operations Adjusted Diluted EPS, (2) (1) (2) 0.64 19% 1.08 23% Continuing Operations Weighted Average 630.1 8% 635.5 8% Diluted Shares See Page 4 for footnotes. Page 3
Footnotes 1. 2008 adjusted results for the six months ended June 30, 2008 exclude a $12 million pre-tax non-cash impairment of an investment in which the Company holds a minority interest ($12 million after-tax, $0.02 per share). 2. 2007 2Q adjusted results exclude $11 million of pre-tax expenses related to Media Networks restructuring charges, principally severance, affecting MTV Networks domestic and international operations ($8 million after-tax, $0.01 per share); $151 million pre-tax gain on the sale of equity investment ($94 million after-tax, $0.13 per share); and $36 million pre-tax non-cash impairment of investment ($22 million after-tax, $0.03 per share). 2007 adjusted results for the six months ended June 30, 2008 exclude $67 million of pre-tax expenses related to Media Networks restructuring charges, principally severance, affecting MTV Networks domestic and international operations ($42 million after-tax, $0.06 per share); $151 million pre-tax gain on the sale of equity investment ($94 million after-tax, $0.13 per share); and $36 million non-cash pre-tax impairment of investment ($22 million after-tax, $0.03 per share) See pages 16 - 20 for a reconciliation to GAAP results. Page 4
Free Cash Flow ($ In Millions) 2nd Quarter Year-to-Date 2008 B/(W) 2007 2008 B/(W) 2007 Operating Income $ 792 13% $ 1,359 19% Depreciation & Amortization 97 (1%) 189 (3%) Capital Expenditures (94) (135%) (182) (125%) Cash Interest (213) (11%) (250) (5%) (295) n/m (439) (161%) Cash Taxes Working Capital & Other (469) n/m (856) n/m (1) $ (182) n/m $ (179) n/m Free Cash Flow 1) See Page 21 for the definition and reconciliation of free cash flow to cash provided by (used in) operations. Note: n/m – not meaningful Page 5
Debt & Cash ($ In Millions) June 30, 2008 Commercial Paper / Bank Debt $ 1,766 Floating Rate Senior Notes due 2009 750 Total Floating Rate Debt 2,516 5.75% Senior Notes due 2011 1,495 6.25% Senior Notes due 2016 1,495 6.125% Senior Notes due 2017 497 6.875% Senior Debentures due 2036 1,734 6.75% Senior Debentures due 2037 248 6.85% Senior Notes due 2055 750 Note Payable 161 Capital Leases and Other 347 Total Fixed Rate Debt 6,727 Total Debt $ 9,243 Cash & Cash Equivalents $737 Page 6
Share Repurchase Program (In Millions) Six Months Ended YTD through 2Q 2008 6/30/2008 7/28/2008 Cost of Repurchase $446 $860 $912 Shares Repurchased 12.2 22.6 24.4 Quarter End Shares Outstanding 622.8 Remaining program availability as of 7/28/08 is $1.6 billion Page 7
SEGMENT HIGHLIGHTS
Media Networks – Revenues by Type ($ In Millions) 2nd Quarter Year-to-Date 2008 B/(W) 2007 2008 B/(W) 2007 Advertising $ 1,173 2% $ 2,221 5% Affiliate 656 12% 1,293 12% Ancillary 307 62% 639 67% Total $ 2,136 11% $ 4,153 14% Page 9
Media Networks – Financial Results ($ In Millions) 2nd Quarter Year-to-Date 2008 B/(W) 2007 2008 B/(W) 2007 Revenues $ 2,136 11% $ 4,153 14% Expenses (1,298) (18%) (2,551) (22%) Equity Compensation (8) 11% (15) 6% D&A (65) 8% (128) 9% Operating Income, Before 765 3% 1,459 4% Restructuring Charges Restructuring Charges (1) - n/m - n/m $ 765 4% $ 1,459 9% Operating Income 1) 2007 results include $11 million and $67 million, respectively, of expenses related to Media Networks restructuring charges, principally severance, affecting MTV Networks domestic and international operations for the quarter and six months ended June 30, 2007. Note: n/m – not meaningful Page 10
Filmed Entertainment – Revenues by Type ($ In Millions) 2nd Quarter Year-to-Date 2008 B/(W) 2007 2008 B/(W) 2007 Theatrical $ 805 84% $ 1,052 50% Home Entertainment 612 12% 1,111 16% TV License Fees 300 4% 640 7% Ancillary 54 35% 114 43% Total $ 1,771 35% $ 2,917 25% Page 11
Filmed Entertainment – Theatrical Releases 2Q 2008 2Q 2007 Shine A Light Disturbia The Ruins Year Of The Dog Iron Man Next Son of Rambow Shrek, the Third Indiana Jones 4 A Mighty Heart Foot Fist Way Kung Fu Panda The Love Guru Page 12
Filmed Entertainment – Financial Results ($ In Millions) 2nd Quarter Year-to-Date 2008 B/(W) 2007 2008 B/(W) 2007 Revenues $ 1,771 35% $ 2,917 25% Expenses (1,655) (31%) (2,837) (20%) Equity Compensation (4) n/m (6) (50%) D&A (26) (13%) (51) (13%) Operating Income $ 86 291% $ 23 n/m Note: n/m – not meaningful Page 13
Business Outlook For the three year period from 2008 through 2010, Viacom expects to deliver low double-digit annual growth in diluted earnings per share from continuing operations. This outlook is based on adjusted earnings and reflects growth from 2007 adjusted diluted earnings per share from continuing operations of $2.36. See the Supplemental Disclosures for a description of adjusted results and tables detailing those adjustments that impact the current and prior year. Page 14
APPENDIX RECONCILIATIONS
Supplemental Disclosures – Non-GAAP Financial Information Non-GAAP measures, including free cash flow and adjusted results that exclude non-operating investment gains and losses, discrete taxes, impairment charges and restructuring charges, where applicable, are relevant and useful information for investors because they allow investors to view performance in a manner similar to the method used by the Company's management, help improve their ability to understand the Company's operating performance and make it easier to compare the Company's results with other companies. These measures are not calculated in accordance with GAAP. They should not be considered in isolation of, or as a substitute for, net cash flow from operations, operating income, net earnings from continuing operations and diluted EPS from continuing operations as indicators of operating performance. Such non-GAAP measures, as calculated by the Company, may not be comparable to similarly titled measures employed by other companies. Page 16
Supplemental Disclosures – Non-GAAP Financial Information ($ In Millions, Except Per Share Amounts) Six Months Ended June 30, 2008 Pre-tax Net Earnings Diluted EPS Earnings from from Operating from Continuing Continuing Income Continuing Operations(1) Operations(2) Operations Reported Results $ 1,359 $ 1,088 $ 676 $ 1.06 Adjustments: Impairment of - 12 12 0.02 Investment (3) Adjusted Results $ 1,359 $ 1,100 $ 688 $ 1.08 See Page 20 for footnotes. Page 17
Supplemental Disclosures – Non-GAAP Financial Information ($ In Millions, Except Per Share Amounts) Quarter ended June 30, 2007 Pre-tax Net Earnings Diluted EPS Operating Earnings from from from Continuing Continuing Income Continuing Operations(1) (2) Operations Operations Reported Results $ 702 $ 706 $ 433 $ 0.63 Adjustments: Media Networks 11 11 8 0.01 (4) Restructuring Activities Gain on sale of equity - (151) (94) (0.13) investment (5) Impairment of Investment (6) - 36 22 0.03 Adjusted Results $ 713 $ 602 $ 369 $ 0.54 See Page 20 for footnotes. Page 18
Supplemental Disclosures – Non-GAAP Financial Information ($ In Millions, Except Per Share Amounts) Six Months Ended June 30, 2007 Pre-tax Net Earnings Diluted EPS Operating Earnings from from from Continuing Continuing Income Continuing (1) (2) Operations Operations Operations Reported Results $ 1,143 $ 1,037 $ 635 $ 0.92 Adjustments: Media Networks 67 67 42 0.06 (4) Restructuring Activities Gain on sale of equity - (151) (94) (0.13) investment (5) Impairment of Investment (6) - 36 22 0.03 Adjusted Results $ 1,210 $ 989 $ 605 $ 0.88 See Page 20 for footnotes. Page 19
Footnotes – Pages 17 - 19 1. Pre-tax earnings represent earnings from continuing operations before provision for income taxes and minority interest. 2. The tax impact of adjustments has been calculated where appropriate using the applicable rates in effect for the period presented. 3. 2008 adjusted results for the six months ended June 30, 2008 exclude a $12 million non- cash impairment of an investment in which the Company holds a minority interest. 4. 2007 adjusted results exclude $11 million and $67 million, respectively, of expenses related to Media Networks restructuring charges, principally severance, affecting MTV Networks domestic and international operations for the quarter and six months ended June 30, 2007. 5. The Company sold its non-controlling investment in MTV Russia for $191 million and recognized a pre-tax gain of $151 million. 6. The Company recorded a pre-tax non-cash impairment charge of $36 million to write off its investment in Amp’d Mobile which filed for bankruptcy. Page 20
Supplemental Disclosures – Non-GAAP Financial Information ($ In Millions) 2nd Quarter Year-to-Date 2008 2007 2008 2007 Cash Provided By (Used In) Operations $ (88) $ 456 $ 3 $ 805 (94) (40) (182) (81) Capital Expenditures Free Cash Flow (1) $ (182) $ 416 $ (179) $ 724 1. The Company defines free cash flow as cash provided by (used in) operations minus capital expenditures. Free cash flow is a non-GAAP measure. Management believes free cash flow provides investors with an important perspective on the Company’s liquidity, including ability to service debt, make strategic acquisitions and investments, and repurchase stock. Page 21
viacom Q208%20Web%20Deck%20FINAL%207.29

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viacom Q208%20Web%20Deck%20FINAL%207.29

  • 1. 2nd QUARTER 2008 RESULTS July 29, 2008
  • 2. Cautionary Statement Concerning Forward-Looking Statements This presentation contains both historical and forward-looking statements. All statements, including Business Outlook, which are not statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements reflect the Company’s current expectations concerning future results, objectives, plans and goals, and involve known and unknown risks, uncertainties and other factors that are difficult to predict and which may cause actual results, performance or achievements to differ. These risks, uncertainties and other factors include, among others: advertising market conditions; the public acceptance of and ratings for the Company’s feature films, programs, digital services and other content, as well as related advertisements; competition for advertising dollars; technological developments and their effect in the Company’s markets and on consumer behavior; fluctuations in the Company’s results due to the timing, mix and availability of the Company’s programming, films and other content; changes in the Federal communications laws and regulations; the impact of piracy; the impact of increased scale in parties involved in the distribution and aggregation of the Company’s products and program services to consumers and advertisers; the impact of union activity; other domestic and global economic, business, competitive and/or regulatory factors affecting the Company’s businesses generally; and other factors described in the Company’s news releases and filings with the Securities and Exchange Commission, including but not limited to the Company’s 2007 Annual Report on Form 10-K and reports on Form 10-Q and Form 8-K. The forward-looking statements included in this presentation are made only as of the date of this presentation, and the Company does not have any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances. Reconciliations for any non-GAAP financial information contained in this presentation are included in this presentation or found on the Company’s website at www.viacom.com. This presentation is a supplement to, and should be read in conjunction with, Viacom’s earnings release for the second quarter ended June 30, 2008. Page 1
  • 3. Reported Results ($ In Millions, except per share amounts) 2nd Quarter Year-to-Date 2008 B/(W) 2007 2008 B/(W) 2007 Revenues $ 3,857 21% $ 6,974 18% Expenses (2,946) (24%) (5,384) (19%) Equity Compensation (22) (22%) (42) - D&A (97) 1% (189) 3% Operating Income 792 13% 1,359 19% Net Earnings, 406 (6%) 676 6% Continuing Operations Diluted EPS, 0.64 2% 1.06 15% Continuing Operations Weighted Average 630.1 8% 635.5 8% Diluted Shares Page 2
  • 4. Adjusted Results ($ In Millions, except per share amounts) 2nd Quarter Year-to-Date 2008 B/(W) 2007 (2) 2008 (1) B/(W) 2007 (2) Revenues $ 3,857 21% $ 6,974 18% (25%) (2) (5,384) (1) (21%) (2) Adjusted Expenses (2,946) Equity Compensation (22) (22%) (42) - D&A (97) 1% (189) 3% (2) (1) (2) Adjusted Operating Income 792 11% 1,359 12% Adjusted Net Earnings, 10% (2) (1) (2) 406 688 14% Continuing Operations Adjusted Diluted EPS, (2) (1) (2) 0.64 19% 1.08 23% Continuing Operations Weighted Average 630.1 8% 635.5 8% Diluted Shares See Page 4 for footnotes. Page 3
  • 5. Footnotes 1. 2008 adjusted results for the six months ended June 30, 2008 exclude a $12 million pre-tax non-cash impairment of an investment in which the Company holds a minority interest ($12 million after-tax, $0.02 per share). 2. 2007 2Q adjusted results exclude $11 million of pre-tax expenses related to Media Networks restructuring charges, principally severance, affecting MTV Networks domestic and international operations ($8 million after-tax, $0.01 per share); $151 million pre-tax gain on the sale of equity investment ($94 million after-tax, $0.13 per share); and $36 million pre-tax non-cash impairment of investment ($22 million after-tax, $0.03 per share). 2007 adjusted results for the six months ended June 30, 2008 exclude $67 million of pre-tax expenses related to Media Networks restructuring charges, principally severance, affecting MTV Networks domestic and international operations ($42 million after-tax, $0.06 per share); $151 million pre-tax gain on the sale of equity investment ($94 million after-tax, $0.13 per share); and $36 million non-cash pre-tax impairment of investment ($22 million after-tax, $0.03 per share) See pages 16 - 20 for a reconciliation to GAAP results. Page 4
  • 6. Free Cash Flow ($ In Millions) 2nd Quarter Year-to-Date 2008 B/(W) 2007 2008 B/(W) 2007 Operating Income $ 792 13% $ 1,359 19% Depreciation & Amortization 97 (1%) 189 (3%) Capital Expenditures (94) (135%) (182) (125%) Cash Interest (213) (11%) (250) (5%) (295) n/m (439) (161%) Cash Taxes Working Capital & Other (469) n/m (856) n/m (1) $ (182) n/m $ (179) n/m Free Cash Flow 1) See Page 21 for the definition and reconciliation of free cash flow to cash provided by (used in) operations. Note: n/m – not meaningful Page 5
  • 7. Debt & Cash ($ In Millions) June 30, 2008 Commercial Paper / Bank Debt $ 1,766 Floating Rate Senior Notes due 2009 750 Total Floating Rate Debt 2,516 5.75% Senior Notes due 2011 1,495 6.25% Senior Notes due 2016 1,495 6.125% Senior Notes due 2017 497 6.875% Senior Debentures due 2036 1,734 6.75% Senior Debentures due 2037 248 6.85% Senior Notes due 2055 750 Note Payable 161 Capital Leases and Other 347 Total Fixed Rate Debt 6,727 Total Debt $ 9,243 Cash & Cash Equivalents $737 Page 6
  • 8. Share Repurchase Program (In Millions) Six Months Ended YTD through 2Q 2008 6/30/2008 7/28/2008 Cost of Repurchase $446 $860 $912 Shares Repurchased 12.2 22.6 24.4 Quarter End Shares Outstanding 622.8 Remaining program availability as of 7/28/08 is $1.6 billion Page 7
  • 10. Media Networks – Revenues by Type ($ In Millions) 2nd Quarter Year-to-Date 2008 B/(W) 2007 2008 B/(W) 2007 Advertising $ 1,173 2% $ 2,221 5% Affiliate 656 12% 1,293 12% Ancillary 307 62% 639 67% Total $ 2,136 11% $ 4,153 14% Page 9
  • 11. Media Networks – Financial Results ($ In Millions) 2nd Quarter Year-to-Date 2008 B/(W) 2007 2008 B/(W) 2007 Revenues $ 2,136 11% $ 4,153 14% Expenses (1,298) (18%) (2,551) (22%) Equity Compensation (8) 11% (15) 6% D&A (65) 8% (128) 9% Operating Income, Before 765 3% 1,459 4% Restructuring Charges Restructuring Charges (1) - n/m - n/m $ 765 4% $ 1,459 9% Operating Income 1) 2007 results include $11 million and $67 million, respectively, of expenses related to Media Networks restructuring charges, principally severance, affecting MTV Networks domestic and international operations for the quarter and six months ended June 30, 2007. Note: n/m – not meaningful Page 10
  • 12. Filmed Entertainment – Revenues by Type ($ In Millions) 2nd Quarter Year-to-Date 2008 B/(W) 2007 2008 B/(W) 2007 Theatrical $ 805 84% $ 1,052 50% Home Entertainment 612 12% 1,111 16% TV License Fees 300 4% 640 7% Ancillary 54 35% 114 43% Total $ 1,771 35% $ 2,917 25% Page 11
  • 13. Filmed Entertainment – Theatrical Releases 2Q 2008 2Q 2007 Shine A Light Disturbia The Ruins Year Of The Dog Iron Man Next Son of Rambow Shrek, the Third Indiana Jones 4 A Mighty Heart Foot Fist Way Kung Fu Panda The Love Guru Page 12
  • 14. Filmed Entertainment – Financial Results ($ In Millions) 2nd Quarter Year-to-Date 2008 B/(W) 2007 2008 B/(W) 2007 Revenues $ 1,771 35% $ 2,917 25% Expenses (1,655) (31%) (2,837) (20%) Equity Compensation (4) n/m (6) (50%) D&A (26) (13%) (51) (13%) Operating Income $ 86 291% $ 23 n/m Note: n/m – not meaningful Page 13
  • 15. Business Outlook For the three year period from 2008 through 2010, Viacom expects to deliver low double-digit annual growth in diluted earnings per share from continuing operations. This outlook is based on adjusted earnings and reflects growth from 2007 adjusted diluted earnings per share from continuing operations of $2.36. See the Supplemental Disclosures for a description of adjusted results and tables detailing those adjustments that impact the current and prior year. Page 14
  • 17. Supplemental Disclosures – Non-GAAP Financial Information Non-GAAP measures, including free cash flow and adjusted results that exclude non-operating investment gains and losses, discrete taxes, impairment charges and restructuring charges, where applicable, are relevant and useful information for investors because they allow investors to view performance in a manner similar to the method used by the Company's management, help improve their ability to understand the Company's operating performance and make it easier to compare the Company's results with other companies. These measures are not calculated in accordance with GAAP. They should not be considered in isolation of, or as a substitute for, net cash flow from operations, operating income, net earnings from continuing operations and diluted EPS from continuing operations as indicators of operating performance. Such non-GAAP measures, as calculated by the Company, may not be comparable to similarly titled measures employed by other companies. Page 16
  • 18. Supplemental Disclosures – Non-GAAP Financial Information ($ In Millions, Except Per Share Amounts) Six Months Ended June 30, 2008 Pre-tax Net Earnings Diluted EPS Earnings from from Operating from Continuing Continuing Income Continuing Operations(1) Operations(2) Operations Reported Results $ 1,359 $ 1,088 $ 676 $ 1.06 Adjustments: Impairment of - 12 12 0.02 Investment (3) Adjusted Results $ 1,359 $ 1,100 $ 688 $ 1.08 See Page 20 for footnotes. Page 17
  • 19. Supplemental Disclosures – Non-GAAP Financial Information ($ In Millions, Except Per Share Amounts) Quarter ended June 30, 2007 Pre-tax Net Earnings Diluted EPS Operating Earnings from from from Continuing Continuing Income Continuing Operations(1) (2) Operations Operations Reported Results $ 702 $ 706 $ 433 $ 0.63 Adjustments: Media Networks 11 11 8 0.01 (4) Restructuring Activities Gain on sale of equity - (151) (94) (0.13) investment (5) Impairment of Investment (6) - 36 22 0.03 Adjusted Results $ 713 $ 602 $ 369 $ 0.54 See Page 20 for footnotes. Page 18
  • 20. Supplemental Disclosures – Non-GAAP Financial Information ($ In Millions, Except Per Share Amounts) Six Months Ended June 30, 2007 Pre-tax Net Earnings Diluted EPS Operating Earnings from from from Continuing Continuing Income Continuing (1) (2) Operations Operations Operations Reported Results $ 1,143 $ 1,037 $ 635 $ 0.92 Adjustments: Media Networks 67 67 42 0.06 (4) Restructuring Activities Gain on sale of equity - (151) (94) (0.13) investment (5) Impairment of Investment (6) - 36 22 0.03 Adjusted Results $ 1,210 $ 989 $ 605 $ 0.88 See Page 20 for footnotes. Page 19
  • 21. Footnotes – Pages 17 - 19 1. Pre-tax earnings represent earnings from continuing operations before provision for income taxes and minority interest. 2. The tax impact of adjustments has been calculated where appropriate using the applicable rates in effect for the period presented. 3. 2008 adjusted results for the six months ended June 30, 2008 exclude a $12 million non- cash impairment of an investment in which the Company holds a minority interest. 4. 2007 adjusted results exclude $11 million and $67 million, respectively, of expenses related to Media Networks restructuring charges, principally severance, affecting MTV Networks domestic and international operations for the quarter and six months ended June 30, 2007. 5. The Company sold its non-controlling investment in MTV Russia for $191 million and recognized a pre-tax gain of $151 million. 6. The Company recorded a pre-tax non-cash impairment charge of $36 million to write off its investment in Amp’d Mobile which filed for bankruptcy. Page 20
  • 22. Supplemental Disclosures – Non-GAAP Financial Information ($ In Millions) 2nd Quarter Year-to-Date 2008 2007 2008 2007 Cash Provided By (Used In) Operations $ (88) $ 456 $ 3 $ 805 (94) (40) (182) (81) Capital Expenditures Free Cash Flow (1) $ (182) $ 416 $ (179) $ 724 1. The Company defines free cash flow as cash provided by (used in) operations minus capital expenditures. Free cash flow is a non-GAAP measure. Management believes free cash flow provides investors with an important perspective on the Company’s liquidity, including ability to service debt, make strategic acquisitions and investments, and repurchase stock. Page 21