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Warner Posts 4th-Quarter Profit of $111.2 Million

February 12, 1986

Warner Communications, the entertainment and communications giant, posted a fourth-quarter profit of $111.2 million in contrast with a loss a year earlier.

Warner also reported that it earned $195.3 million for the full year, compared to a net loss in 1984, and said its film and record divisions turned in their best years ever. The fourth-quarter profit included an after-tax gain of $86 million resulting from the sale of its interest in two cable-television channels.

Warner sold its interest in Showtime-The Movie Channel during the fourth quarter.

In addition, Warner's results reflected its equity interest in the gain that the cable company Warner Amex realized on the sale of its interests in MTV Networks Inc. and in Showtime. Warner owns half of Warner Amex but has agreed to purchase the rest of it in a deal that should close shortly.

A year ago, Warner reported a fourth-quarter net loss of $203.7 million that included a $225-million loss from discontinued operations.

Revenue for the quarter rose 20.4% to $644 million from $535.4 million a year earlier.

For the year, Warner's profit included an after-tax gain of $94.2 million on the sale of the interests in Showtime and MTV, as well as the sale of a portion of its interest in Hasbro Inc.

Revenue rose 10.4% to $2.23 billion from $2.02 billion in 1984.

Steven J. Ross, chairman and chief executive, said that the company's total debt was reduced to $510 million at the end of 1985 from $840 million at the end of 1984 and that the company's interest expenses continue to decline.

Warner's filmed entertainment division posted operating income for the year of $160.2 million on record revenue of $1.2 billion.

Its recorded music division posted operating income for the year of $112.7 million on revenue of $912.3 million, both new highs.

Its broadcast and cable division, which includes results from Warner Amex, had a profit for the year of $6.3 million, compared to a loss of $51.6 million in 1984.

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