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Viacom to take $785M pre-tax charge in reorganization

Big changes coming to Viacom

Viacom will take a $785 million pre-tax charge during the recently-ended quarter as part of a reorganization, the company said Monday.

The media company said in a release that it would "temporarily pause" share purchases under its $20 billion buyback program because of charges from its realignment and planned acquisitions. Viacom President and CEO Philippe Dauman said the firm remains "steadfastly committed to returning capital to shareholders," citing "sound financial management" for the moratorium.

Viacom explained the fiscal year second-quarter charge reflects the "write-downs of underperforming programming," and costs tied to layoffs. The figure also includes "accelerated amortization of programming expenses" tied to revenue projections impacted by "changing media consumption habits," the company said.

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The company said its realignment plan includes "significant strategic and operational improvements" such as reorganizing domestic network groups. The media firm is also "reallocating resources to expand its capabilities in critical business areas including data analysis, technology development and consumer insights, reflecting the rapidly changing media marketplace, shifting consumer behavior and evolving measurement practices," the release said.

Viacom said that the reorganization initiatives are expected to afford ongoing annual savings of about $350 million. In fiscal year 2015, those savings should amount to about $175 million, the company said.

"This strategic realignment, which is largely completed, will allow us to sharpen our focus on driving long-term growth in a rapidly changing industry," Dauman said in the release. "We will transition rapidly into the future, generate substantial cost savings and continue to increase our investment in original programming to bring our audiences great content in new and groundbreaking ways."