Viacom is a leading global entertainment content company whose family of prominent and respected brands includes the multiplatform properties of MTV Networks BET Networks Paramount Pictures Paramount Home Entertainment and DreamWorks. MTV Networks a unit of Viacom is one of the world's leading creators of programming and content across all media platforms. MTV Networks connects with its audiences through its robust consumer products businesses and its more than three hundred interactive properties worldwide including online broadband wireless and interactive television services and also has licensing agreements joint ventures and syndication deals whereby all of its programming services can be seen worldwide. Viacom Inc. has a market cap of $1.19 billion; its shares were traded at around $20.66 with a P/E ratio of 8.6 and P/S ratio of 0.1.
Highlight of Business Operations:To better align our organization and cost structure with recent economic conditions, we undertook a strategic review of our businesses in the fourth quarter of 2008, which resulted in $454 million of restructuring and other charges. As a result of these initiatives, we expect to save approximately $200 million in 2009. Approximately half of the savings result from the restructuring charges which were principally comprised of workforce reductions and will be realized via lower compensation costs primarily included as a component of selling, general and administrative expenses. We expect to continue to experience similar levels of savings from the headcount reductions in future years, subject to the performance of our operations which may require further changes to our headcount, either increases or decreases, to effectively and efficiently manage our operations. In 2009, our cash savings will be partially offset by remaining severance payments to be made pursuant to our restructuring plan. With respect to the other charges, the savings are primarily related to reduced programming amortization attributable to abandoned programming included as a component of operating expenses, and will diminish ratably through 2011. Despite these savings, overall programming expenses are likely to grow in the future as we continue to invest in programming in the normal course of business. During the first quarter of 2009, our total expense reduction of $87 million includes approximately $50 million in cost savings related to these initiatives. We will continue to evaluate the impact of current and future economic conditions on our various businesses and consider alternatives which, if undertaken, could result in future restructuring charges.
Operating expenses decreased $61 million, or 3%, to $1.748 billion in the first quarter of 2009. Distribution and other costs decreased $78 million, or 10%, to $706 million driven by lower manufacturing costs related to Rock Band. Production and programming expenses increased $17 million, or 2%, to $1.042 billion. Our continuing investment in programming was partially offset by reduced amortization attributable to the programming abandoned in the fourth quarter of 2008.
Operating income decreased $125 million, or 22%, to $442 million in the first quarter of 2009. Media Networks contributed $65 million of the decline, with lower ancillary and advertising revenues more than offsetting the benefit from our lower expenses and increased affiliate fee revenues. Filmed Entertainment contributed $60 million of the decline, resulting from lower revenues which more than offset benefits from the reduction in our overall film slate and fourth quarter 2008 restructuring initiatives.
Other items, net, reflects expenses of $19 million in the first quarter of 2009, compared with $3 million in the first quarter of 2008. The increase in other expenses is principally due to a $31 million unfavorable variance in foreign exchange losses partially offset by the impact of a $12 million non-cash impairment charge taken in the first quarter of 2008.
Worldwide revenues decreased $152 million, or 8%, to $1.865 billion in the first quarter of 2009. The declines in ancillary revenues and advertising revenues were partially offset by an increase in affiliate fees. Foreign exchange had a 2-percentage point negative impact on worldwide revenues. Domestic revenues decreased to $1.626 billion in the first quarter of 2009 from $1.731 billion in the first quarter of 2008, a decline of $105 million, or 6%. International revenues decreased to $239 million in the first quarter of 2009, from $286 million in the first quarter of 2008, a decline of $47 million or 16%, with a 13-percentage point negative impact from foreign exchange.
Operating expenses decreased $64 million, or 8%, to $715 million in the first quarter of 2009. Distribution and other expenses declined $81 million driven principally by lower manufacturing costs related to Rock Band. Production and programming expenses increased $17 million, or 3%, reflecting higher expenses associated with our continuing investment in programming, partially offset by 5 percentage points of benefit from reduced amortization attributable to the programming abandoned in the fourth quarter of 2008.
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