The award-winning Anita Santiago Advertising has been known for the past 20 years for its breakthrough Hispanic marketing campaigns on behalf of clients such as IKEA, Wells Fargo, California’s anti-smoking efforts and UnitedHealthcare. Copia Creative, a strategic branding agency founded in 2001 by Michelle Adelson, focuses on positioning, corporate identity and packaging for clients including Applied Materials and Crowell Weedon.

“Recent studies show that clients are increasingly looking for more value from their marketing agencies. They’re insisting that their agencies integrate the messaging across all platforms and disciplines,” said Joe Phelps, CEO and founder, “and we’re ideally structured to meet those demands.”

Phelps points out that for more than a dozen years, The Phelps Group has been the only agency in Southern California ranked on both the top advertising and the top public relations charts. “We’re one of the few agencies that truly integrates both channels. With the addition of Copia’s branding experience and Santiago’s Hispanic expertise, I doubt there’s another agency in California that offers our breadth of true IMC.”

Anita Santiago veterans Francisco Letelier, creative, and Sofia Escamilla, media, will lead the new Hispanic marketing discipline at the agency. Michelle Adelson and the former Copia Creative personnel will focus their strategic planning talents on The Phelps Group’s clients. Matthew Puopolo will continue Copia’s business consulting services. “Both agencies share our belief that culturally sensitive integrated marketing and a commitment to a client-based team approach, supported by full-feedback processes produce optimal results for our clients,” said Phelps.

These acquisitions brought 15 full-time associates and several part-time personnel to The Phelps Group.

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BIM is the leading provider of locally-focused advertising, content and technical solutions for local media websites, with the BIM Local Ad Network (now including TitanTV.com and associated guide products) reaching over 43 million monthly unique visitors, and ranked #12 in the News-Information category according to comScore. By acquiring TitanTV, BIM now offers its publisher and advertising clients a rapidly expanding menu of data tools and content distribution solutions.

“We are very excited to welcome the talented staff of TitanTV to BIM, an influx of talent which provides tremendous engineering expertise and capability for our product roadmap. We look forward to connecting with the hundreds of TitanTV clients currently using MediaStar tools or SHVERA products and to delivering best-of-breed platform solutions,” said Timur Yarnall, Broadcast Interactive’s co-founder and CEO.

BIM and TitanTV clients will now have access to an integrated suite of technology services, advertising tools, and a market-leading content syndication platform through one integrated partnership.

Mick Rinehart, TitanTV VP Product Management, noted “BIM is a unique strategic partner with the financial and development resources to invest in the growth of TitanTV products and services. BIM management has already demonstrated a strong commitment to providing enhanced tools for our customers. ”

“The acquisition of TitanTV positions BIM for aggressive growth in the near-term,” said BIM cofounder and Chairman Stephen Benedek. “We anticipate evaluating further acquisitions given BIM’s clean balance sheet and existing opportunities in the space.”

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The acquisition extends News Corporation’s presence in fast-growing Middle East markets in partnership with one of the region’s strongest media companies. Rotana, which is owned by HRH Prince Alwaleed Bin Talal, operates one of the largest TV networks and ad sales operations in the region and owns the largest Arabic film library. Additionally, it has built the leading record label in the Middle East, managing many of the most popular artists in the region and controlling the biggest Arabic music catalogue. Rotana also operates an expanding radio network and a wide array of digital services.

James Murdoch, Chairman and Chief Executive, Europe and Asia, News Corporation, said: “A stake in Rotana expands our presence in a region with a young and growing population, where GDP growth is set to outstrip that of more developed economies in the years ahead. Rotana is a leading player in the Middle East and we look forward to working together.”

Prince Alwaleed Bin Talal said: “We are delighted to have this partnership with News Corporation. As one of the world’s most global media companies, it has an unrivalled record in developing businesses at scale around the world. This investment will strengthen our existing relationship, building Rotana’s presence across the region and expanding its reach to the Arab Diaspora around the world.”

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“Rocksteady demonstrated its professionalism and extraordinary development abilities with Batman: Arkham Asylum,” said Kevin Tsujihara, president, Warner Bros. Home Entertainment Group. “This arrangement is a great strategic fit and we are very pleased to solidify our relationship with this talented development team.”

Founded in 2004 in London, England, Rocksteady specializes in developing action-adventure video games, including Batman: Arkham Asylum, one of the most critically acclaimed games of 2009. The title has enjoyed robust sales, shipping over three million units worldwide, and has garnered numerous industry awards.

“We are proud to strengthen our association with WBIE, a world class publisher that we have enjoyed working with since we began developing Batman: Arkham Asylum,” said Jamie Walker, studio director, Rocksteady Studios. Sefton Hill, games director, added, “The Rocksteady team is very much looking forward to creating more great games based on widely recognized Warner Bros. brands like Batman.”

Warner Bros. continues to grow its games business through key acquisitions, building internal development capabilities, leveraging its global video distribution infrastructure, and focusing on developing major games franchises such as Batman, Mortal Kombat, The Lord of the Rings and LEGO.

“With the successful release of Batman: Arkham Asylum, a franchise that is a key focus for Warner Bros., Rocksteady has proven that they have the expertise to create hit games with mass appeal,” said Martin Tremblay, president, Warner Bros. Interactive Entertainment. “We are currently working with Rocksteady on the sequel to Batman: Arkham Asylum and look forward to bringing the continuation of the franchise to fans worldwide.”

“We are delighted to be deepening our relationship with London-based Rocksteady Studios, one of the UK’s most respected games developers and 2009 recipient of the VGA’s coveted ’studio of the year’ award,” said Josh Berger, president and managing director, Warner Bros. UK. “Rocksteady clearly has the talent, expertise and technology to make great games and we are fortunate to continue working closely with them as we further expand our games portfolio.”

In 2007, Warner Bros. acquired TT Games, developer of the hit LEGO-based game franchises, including LEGO Star Wars, LEGO Indiana Jones and LEGO Batman, which have wide appeal with players of all ages. In early 2009, Warner Bros. acquired Snowblind Studios to develop its The Lord of the Rings games franchise, with the first title expected to be released in 2011. Most recently, Warner Bros. purchased the primary assets of Midway Games. Midway published the Mortal Kombat franchise, which has sold over 26 million units worldwide, and owned a robust IP catalog and broadly applicable game engine technology. As part of the transaction, Warner Bros. acquired two talented development studios to focus on the Mortal Kombat franchise as well as other key properties.

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GBS owns and operates WWWK Latina 105.5 FM and Latina 105.com with coverage in the Florida Keys, Homestead, Kendall and South Miami.  The broadcasting operations cover 70% of South Beach, Downtown Miami, Coral Gables, South Miami and Doral and is the first and only Latin Tropical Hits radio station in South Florida. 

“We are extremely pleased with the acquisition of GBS,” stated Nydia Del Valle, President and CEO for ConnectedMedia Technologies, Inc. “Miami is the third largest Hispanic market in the United States and we feel this is an important move in our overall strategy as we continue to grow our company through investments in Hispanic media and technology. 

“Not only does GBS, through LATINA 105.5FM, play the best tropical hits that appeal to a broad and loyal audience, it also engages in the production and distribution of television programming, content and internet broadcasting through LaMusicaChristiana.TV and Tvhumor.tv, and publishes the Spanish-language Newspaper LatinaNoticias.com.”

Joseph (Felipe) Taveras, CEO for GBS stated, “We’re extremely pleased to be joined with ConnectedMedia Technologies and be an integral part of their strategic plan.  The additional funding for GBS will help us keep and attract the best of the best in our most critical asset – human resources.”

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Additionally, Source and AIM announced a relationship under which Source will provide circulation services and newsstand marketing support to AIM’s enthusiast titles.

Active Interest Media’s Equine Network will include the print magazine titles EQUUS, Horse & Rider, Practical Horseman, Dressage Today, Arabian Horse World, Discover Horses and EquiManagement, and the online properties Equisearch.com, Equine.com, HorseBooksEtc.com and DiscoverHorses.com, from Source Interlink Media as well as the magazines Spin to Win Rodeo and Trail Rider and the online properties MyHorse.com, HitchUpMagazine.com and HorselinkMagazine.com from the Horse Media Group.

American Cowboy magazine and website will join the newly formed AIM Equine Network. The total audience offered by the new group is over 700,000 readers and 600,000 unique visitors per month. According to MRI, the sport has grown 15% in the last five years.

“The world of horses is a quintessential enthusiast market and fits perfectly with our strategy and capabilities at Active Interest Media,” said Efrem “Skip” Zimbalist III, CEO of AIM.  Andy Clurman, Chief Operating Officer, added, “This is a rare opportunity to bring together two great publishing groups, their leading brands, and excellent teams to serve horse enthusiasts.  We look forward to working with the equine communities to serve their media and information needs and to help promote their activities.”

Jim Gillis, President and Chief Operating Officer of Source said, “AIM has earned a reputation of being a special interest media company that truly understands and is able to fulfill the needs of the enthusiast. It’s an outstanding opportunity for every stakeholder with our equine brands to become part of this special interest media family. We all expect great things to come from this merger.”

Chris Argentieri, Chief Operating Officer of Source Interlink Media, added, ” We look forward to a close relationship with AIM as we work together to leverage our circulation and newsstand expertise to assist AIM in continuing to grow and strengthen their world class enthusiast brands.”

Tom Winsor, General Manager for HMG, said, “This is an exciting development for our employees, and certainly for our advertisers and readers. The new group will be far and away the most comprehensive collection of equine titles and online properties created and managed by horse people, for the benefit of horse people. It’s this passion that’s made each magazine and website so successful and will make them even more so as a group.”

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“Throughout the past year, Leslie and his team did all the right things to position CBS for a vibrant future, and the results we’re reporting today speak to our momentum,” said Sumner Redstone, Executive Chairman, CBS Corporation.  “We’ve managed through the year with financial prudence, while at the same time continuing to invest in our top-quality content businesses and maintain our industry-leading position.  I’m very excited about all that we can achieve going forward.”

“As we promised, each quarter in 2009 improved on the one before – culminating in our best performance of the year in the fourth quarter,” said Leslie Moonves, President and Chief Executive Officer, CBS Corporation.  “The good news is, the rising revenue trends are continuing into 2010.”

Moonves continued:  “We see a number of very positive signs at both our Content Group and our Local Group.  The CBS Television Network is again #1 this season and up in every key demographic year-over-year, and we’ve added two new hits – both of which are wholly-owned by CBS.  Cable Networks’ subscriber and profit growth continues, and traffic to CBS Interactive sites hit new records during the quarter.  Meanwhile, both national and local advertising are improving substantially – with dramatic gains in scatter and sales pacing for the Network and our TV Stations in the first quarter.  Local radio stations are pacing well above last year’s first quarter, and Outdoor has reached last year’s levels.  And with growing retransmission and affiliate fees, we’ve established a substantial secondary revenue stream.  At the same time, we continue to manage our cost structure to deliver better efficiencies in any economy, and have improved our liquidity position – all of which we believe will help us better capitalize on the ongoing economic recovery in 2010.”
Revenues for the fourth quarter of 2009 totaled $3.50 billion, down less than 1% versus $3.53 billion for the same prior-year quarter.  Higher national advertising sales, growth in affiliate and subscription fees, and improvement in the local television marketplace, were offset by lower radio, outdoor and political advertising sales, and continued softness in the publishing retail market.   

Adjusted operating income before depreciation and amortization (“OIBDA”) was $569.2 million for the fourth quarter of 2009, up 11% versus $513.1 million for last year’s fourth quarter, driven by higher affiliate and subscription fees, including retransmission revenues, combined with lower expenses as a result of cost-savings initiatives.  Results for the fourth quarter also reflect lower restructuring charges, which were substantially offset by lower political advertising sales.   

Adjusted operating income was $421.8 million for the fourth quarter of 2009, up 16% from $362.4 million for the same quarter last year. 

Reported operating income was $243.5 million for the fourth quarter of 2009 versus $298.2 million for the same quarter last year.

Adjusted net earnings increased 23% to $171.1 million, or $.25 per diluted share, up 19%, for the fourth quarter of 2009 versus $139.3 million, or $.21 per diluted share, for the same quarter last year.

Reported net earnings were $58.8 million, or $.09 per diluted share, for the fourth quarter of 2009 versus $136.1 million, or $.20 per diluted share, for the same quarter last year. 

Free cash flow for the fourth quarter of 2009 was $295.4 million versus $308.3 million for the fourth quarter of 2008, reflecting the timing of interest payments partially offset by lower discretionary contributions in 2009 to pre-fund the Company’s qualified pension plans. 

Adjusted results for the fourth quarter exclude impairment charges and tax benefits resulting from the settlement of federal and state income tax audits.  The Company recorded pre-tax non-cash impairment charges during the fourth quarter of 2009 to reduce the carrying value of FCC broadcast licenses in certain radio markets.  During the fourth quarter of 2008, the Company recorded pre-tax non-cash impairment charges related to radio station divestitures.  Reconciliations of all non-GAAP measures to reported quarterly results are included at the end of this earnings release.
Full year 2009 revenues were $13.01 billion, down 7% versus $13.95 billion for the prior year, reflecting lower local non-political advertising sales during the first three quarters of 2009 and lower political advertising for the year, partially offset by higher affiliate and subscription fees.

Adjusted OIBDA for 2009 was $1.80 billion, down 29% versus $2.55 billion for 2008, reflecting lower local advertising sales, including politicals, partially offset by higher affiliate and subscription fees, a reduction in expenses resulting from cost-savings initiatives and lower restructuring charges in 2009.

Adjusted operating income for 2009 was $1.22 billion, down 40% versus $2.02 billion for 2008.

Reported operating income was $1.01 billion for 2009 versus an operating loss of $12.16 billion for 2008.

Adjusted net earnings were $358.8 million, or $.53 per diluted share, for 2009 versus $984.3 million, or $1.46 per diluted share, for 2008. 

Reported net earnings were $226.5 million, or $.33 per diluted share, for 2009 versus a net loss of $11.67 billion, or a loss of $17.43 per diluted share, for 2008.

Free cash flow was $827.8 million for 2009 versus $1.67 billion for 2008, reflecting lower adjusted OIBDA and higher investment in programming and content, partially offset by lower cash taxes and capital expenditures.  

Adjusted results for the full year exclude impairment charges; tax benefits resulting from the settlement of federal and state income tax audits; and reductions of deferred tax assets associated with stock-based compensation in both 2009 and 2008; and a gain on the sale of the Company’s investment in Sundance Channel in 2008.  During 2009, the Company recorded pre-tax non-cash impairment charges to reduce the carrying value of radio FCC broadcast licenses and goodwill.  During 2008, the Company recorded pre-tax non-cash impairment charges to reduce the carrying value of goodwill and intangible assets.  Reconciliations of all non-GAAP measures to reported annual results are included at the end of this earnings release.

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Operating costs excluding depreciation, amortization and severance declined 16.3 percent in the fourth quarter of 2009 versus the fourth quarter of 2008. On a GAAP basis, the Company’s operating costs declined 15.5 percent in the fourth quarter of 2009 versus the fourth quarter of 2008. For the year operating costs declined by approximately $475 million as a result of reductions in nearly all major expense categories.

Diluted earnings per share from continuing operations excluding severance and special items were $.44 per share in the fourth quarter of 2009 compared with $.36 per share in the same period of 2008. On a GAAP basis, the Company had diluted earnings per share from continuing operations of $.48 per share in the fourth quarter of 2009 compared with $.19 per share in the fourth quarter of 2008.

The Company has reduced its debt by over $290 million to $769 million from its balance at the end of 2008 of $1.059 billion. As of the end of the quarter, excluding $67 million in letters of credit, there were no outstanding borrowings under the Company’s $400 million revolving credit facility.

Total revenues were down 11.5 percent in the quarter, a significant improvement from the third quarter decline of 16.9 percent.

“We were pleased to see advertisers increase their rate of spending across our newspapers, Web sites and other platforms as advertising trends improved during the fourth quarter,” said Janet Robinson, president and CEO. “Our results also reflect our ability to restructure our cost base, introduce new products and innovations, leverage our brand strength and extend our reach to new audiences.

“In the fourth quarter total advertising revenues declined approximately 15 percent compared with the fourth quarter of 2008, as a 20 percent decrease in print advertising was offset in part by growth in digital advertising, which rose nearly 11 percent. While the advertising market remains challenging, the rate of decline across the major advertising categories – national, retail and classified – lessened as the quarter progressed.

“Circulation revenues increased 2 percent as we were able to command higher subscription and newsstand prices at The New York Times and The Boston Globe. This growth demonstrates the strong demand and loyalty for our high quality news and information in print, even as the content marketplace becomes increasingly digital.

“Once again we were encouraged by the strong performance at the About Group, whose fourth-quarter operating profit rose 80 percent to $18 million. The Group’s advertising revenues grew 23 percent on healthy gains in both cost-per-click and display advertising.

“We continued to capitalize on our ability to aggressively manage our expenses, as evidenced in an approximately 16 percent decline in operating costs. And we remain focused on securing strong performance on costs as we continue to reposition our Company for the evolving media marketplace.

“Looking ahead, visibility remains limited for advertising. In the first quarter of 2010, we expect the rate of decline for print advertising to continue to improve modestly from the fourth quarter of 2009, while digital advertising is expected to perform in line with the fourth-quarter level.

“Lastly, we havebeguntaking steps to enhance our digital strategy by planning to introduce apaid model for NYTimes.com in 2011, to create an additional revenue stream while preservingour robust advertising business. We continue to embrace innovative new platforms and devices that provide rich experiences for our content.”

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David Zaslav, Discovery’s President and Chief Executive Officer, said, “The strength of Discovery’s performance throughout 2009 reflected the quality of our distribution platform and content assets and our focus on delivering real operating leverage. The affiliate fees we generate across the globe provided consistent resiliency throughout this past year, while the ratings growth across our networks and the value of our unique content enabled advertising to grow despite the weak environment. Our revenue growth, combined with thoughtful cost management, increased our operating efficiency, translating into double-digit Adjusted OIBDA (1) and free cash flow growth. As we look to 2010, we remain focused on further monetizing our ratings momentum in an improving advertising environment, continuing to strengthen our distribution platforms and relationships and, most importantly, delivering high quality content to our viewers.”
Fourth quarter revenues of $964 million increased $60 million, or 7%, over the fourth quarter a year ago as 22% growth at International Networks and 3% growth at U.S. Networks was partially offset by a $21 million or 30% decline at Commerce, Education and Other as a result of the transition to a new commerce licensing model. Adjusted Operating Income Before Depreciation and Amortization (1) (“OIBDA”) grew to $390 million, an increase of $28 million or 8% versus the fourth quarter a year ago, mainly driven by a 42% increase at International Networks partially offset by a 4% decline at U.S. Networks due to content impairment charges of $22 million. Adjusted OIBDA margin of 40% for the fourth quarter was in-line with the same period a year ago.

Fourth quarter net income available to Discovery Communications, Inc., stockholders of $155 million ($0.36 per diluted share) grew $49 million compared to $106 million ($0.25 per diluted share) for the fourth quarter a year ago. The increased results primarily reflect the growth in Adjusted OIBDA, lower restructuring and impairment charges and an increase in Other non-operating income, partially offset by a $28 million expense in the current quarter from the change in the fair value of the mark-to-market share-based compensation, compared with a benefit of $22 million in the fourth quarter a year ago.

Free cash flow was $236 million for the fourth quarter, an increase of $108 million or 84% from the same period for 2008. Free cash flow is defined as cash flows from operating activities less acquisitions of property and equipment.

Full year 2009 revenues of $3,516 million increased $73 million, or 2%, over 2008 revenues, primarily driven by 4% growth at U.S. Networks and 3% growth at International Networks. Adjusted OIBDA increased 12% to $1,464 million led by 8% growth at U.S. Networks and 16% growth at International Networks. Adjusted OIBDA margin for the full year increased to 42% from 38% in 2008.

Full year net income available to Discovery Communications, Inc. stockholders from continuing operations of $552 million ($1.30 per diluted share) grew $278 million versus $274 million ($0.85 per diluted share) a year ago. The increased results primarily reflect the higher Adjusted OIBDA, a net of tax gain on the sale of Discovery Kids channel and an increase in Other non-operating income, partially offset by a $205 million expense in the current year related to the change in the fair value of the mark-to-market share-based compensation, which was a benefit of $69 million in the prior year. 2008 net income also included $128 million of minority interest primarily associated with the Advanced Newhouse ownership prior to the transaction that resulted in Discovery Communications, Inc. becoming a public company.

Free cash flow was $551 million for the full year, an increase of $84 million or 18% from 2008. Free cash flow includes $108 million in taxes paid related to the sale of 50% of the Discovery Kids channel and $64 million of additional tax payments related to prior periods. Excluding these taxes, free cash flow for 2009 increased $256 million or 55% compared to the same period in 2008.

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Headquartered in Evansville, Indiana, ARSgroup has helped top advertisers measure, optimize and predict the effectiveness of their advertising messages for more than 40 years. ARSgroup’s ARS Persuasion methodology is one of the world’s most widely documented and independently validated predictive measures of the persuasive effectiveness of advertising creative. ARS Persuasion scores have been shown through third-party validation to equate with higher sales and market share. ARSgroup’s extensive knowledge base and proven models have helped many of the world’s leading advertisers optimize their messaging in both the U.S. and international markets. ARS has a roster of marquee customers in a wide variety of consumer product categories, including the Consumer Packaged Goods, Retail and Pharmaceutical industries. The company has received numerous awards for advertising research, including an Advertising Research Foundation Ogilvy award in 2009 for work on Walmart’s “Earth Month” campaign.

ARSgroup’s product suite evaluates and quantifies the impact of campaigns comprised of any combination of touch points, including television, print, radio, outdoor and digital. From strategy development to the various stages of creative development to in-market validation, ARSgroup helps local and global marketers build and cultivate strong brands and services. ARSgroup’s areas of expertise include: brand strategy, all stages of creative development, campaign evaluation across all marketing and media channels, media planning and strategy, return-on-investment, and forecasting. The company provides solutions and consulting to advertisers and agencies across traditional and digital marketing including: media mix optimization, media budget allocation, media and message connection, channel selection, digital media and emerging platforms.

“The acquisition of ARSgroup marks an important step forward at an opportune time for comScore in the area of cross-media measurement,” said Dr. Magid Abraham, comScore President & CEO. “As the advertising market continues to become more fragmented as it migrates toward various emerging digital content channels, understanding how to measure the effectiveness of one’s advertising messages has never been more important. We believe that the high quality, proven research tools and practices of the ARSgroup will powerfully complement comScore’s existing product suite, allowing us to strengthen our portfolio of advertising measurement services. We are excited about the opportunity to leverage ARS’s expertise and proprietary IP to build innovative solutions in the online measurement space and to provide leading cross media measurement solutions for the measurement of advertising effectiveness.”

“We are excited to become a part of comScore and the opportunity to provide exciting additions to comScore’s existing global suite of products,” said Jeff Cox, CEO of ARSgroup. “comScore’s world-class brand, broad global footprint, commitment to research quality, and massive data processing infrastructure should not only enable us to continue to deliver the value that our clients have come to expect from ARSgroup, but should allow us to expand our offerings globally. comScore and ARS share a common passion for innovation. By putting the two companies together, we’ll provide an even broader set of tools to help our mutual clients measure the changing dynamics of advertising across all media.”

The transaction is subject to customary closing conditions, following completion of which ARSgroup will be renamed comScore ARS and Mr. Cox will be named an Executive Vice President of comScore. 

comScore anticipates closing the transaction in March 2010 and expects ARS to fuel incremental growth for comScore in 2010.

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