Fourth Quarter Adjusted OIBDA Up 11% to $569.2 Million Fourth
Quarter Adjusted Net Earnings Up 23% to $171.1 Million Fourth
Quarter Adjusted Diluted EPS Up 19% to $.25 NEW YORK, Feb. 18
/PRNewswire-FirstCall/ -- CBS Corporation (NYSE: CBS.A; CBS) today
reported results for the fourth quarter and full year ended
December 31, 2009. "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." Fourth Quarter 2009 Results 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 Results 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. Consolidated and Segment Results In the fourth
quarter of 2009, the Company realigned its operating segments to
more effectively highlight its long-term strategy of investing in
content businesses and capitalizing on its strong local presence.
The tables below present the Company's revenues by segment and
type, and its adjusted OIBDA and operating income (loss) by segment
for the three and twelve months ended December 31, 2009 and 2008
(dollars in millions). Three Months Ended Twelve Months Ended
December 31, December 31, Revenues by Segment 2009 2008 2009 2008
------------------- ---- ---- ---- ---- Entertainment $1,815.3
$1,746.0 $6,976.7 $6,878.8 Cable Networks 347.1 320.7 1,347.2
1,264.5 Publishing 220.0 245.1 793.5 857.7 ---------- ----- -----
----- ----- Content Group 2,382.4 2,311.8 9,117.4 9,001.0 Local
Broadcasting 680.0 735.8 2,359.7 2,950.4 Outdoor 483.7 526.3
1,722.6 2,170.6 ------- ----- ----- ------- ------- Local Group
1,163.7 1,262.1 4,082.3 5,121.0 Eliminations (47.7) (47.0) (185.1)
(171.6) ------------ ----- ----- ------ ------ Total Revenues
$3,498.4 $3,526.9 $13,014.6 $13,950.4 -------------- --------
-------- --------- --------- Three Months Ended Twelve Months Ended
December 31, December 31, Revenues by Type 2009 2008 2009 2008
---------------- ---- ---- ---- ---- Advertising $2,351.5 $2,386.7
$8,171.4 $9,239.9 Content licensing and distribution 658.1 711.5
3,120.4 3,157.6 Affiliate and subscription fees 422.2 350.1 1,462.3
1,289.4 Other 66.6 78.6 260.5 263.5 ----- ---- ---- ----- -----
Total Revenues $3,498.4 $3,526.9 $13,014.6 $13,950.4 --------------
-------- -------- --------- --------- Three Months Ended Twelve
Months Ended December 31, December 31, Adjusted OIBDA 2009 2008
2009 2008 -------------- ---- ---- ---- ---- Entertainment $190.8
$174.1 $875.9 $1,022.8 Cable Networks 152.8 104.8 461.0 389.5
Publishing 13.6 28.3 50.2 88.2 ---------- ---- ---- ---- ----
Content Group 357.2 307.2 1,387.1 1,500.5 Local Broadcasting 227.5
173.5 512.9 820.0 Outdoor 68.8 98.4 168.7 467.4 ------- ---- ----
----- ----- Local Group 296.3 271.9 681.6 1,287.4 Corporate (49.1)
(50.7) (147.1) (157.1) Residual costs (35.9) (16.0) (115.7) (79.2)
Eliminations .7 .7 (2.2) 2.7 ------------ --- --- ---- --- Adjusted
OIBDA 569.2 513.1 1,803.7 2,554.3 Impairment Charges (178.3) (64.2)
(210.0) (14,181.4) ------------------ ------ ----- ------ ---------
Total OIBDA $390.9 $448.9 $1,593.7 $(11,627.1) ----------- ------
------ -------- ---------- Three Months Ended Twelve Months Ended
Adjusted Operating December 31, December 31, Income (Loss) 2009
2008 2009 2008 ------------------ ---- ---- ---- ---- Entertainment
$146.9 $125.1 $699.9 $882.7 Cable Networks 147.0 98.6 437.4 364.3
Publishing 11.9 26.1 42.5 78.7 ---------- ---- ---- ---- ----
Content Group 305.8 249.8 1,179.8 1,325.7 Local Broadcasting 204.1
147.0 422.4 720.3 Outdoor 1.0 35.2 (96.9) 223.5 ------- --- ----
----- ----- Local Group 205.1 182.2 325.5 943.8 Corporate (53.9)
(54.3) (166.0) (170.3) Residual costs (35.9) (16.0) (115.7) (79.2)
Eliminations .7 .7 (2.2) 2.7 ------------ --- --- ---- --- Adjusted
Operating Income 421.8 362.4 1,221.4 2,022.7 Impairment Charges
(178.3) (64.2) (210.0) (14,181.4) ------------------ ------ -----
------ --------- Total Operating Income (Loss) $243.5 $298.2
$1,011.4 $(12,158.7) --------------- ------ ------ --------
---------- Entertainment (CBS Television Network, CBS Television
Studios, CBS Studios International, CBS Television Distribution,
CBS Films and CBS Interactive) Fourth Quarter Entertainment
revenues of $1.82 billion for the fourth quarter of 2009 increased
4% from the same prior-year period as 8% growth in advertising
revenues at the CBS Television Network was partially offset by
lower CBS Interactive advertising sales, which decreased 5% versus
the prior year. Entertainment OIBDA and operating income for the
fourth quarter of 2009 increased 10% to $190.8 million and 17% to
$146.9 million, respectively, driven by higher advertising revenues
at the Network and the absence of 2008 restructuring charges,
partially offset by higher investment in programming and content.
Full Year Entertainment revenues of $6.98 billion for 2009
increased 1% from $6.88 billion for 2008 due to higher 2009
domestic and international syndication sales and a full year's
results from CNET Networks, which the Company acquired in June
2008. These increases were partially offset by lower Network
advertising revenues during the first half of 2009 and the impact
of a new international syndication arrangement for the CSI
franchise in 2008. For 2009, Entertainment adjusted OIBDA decreased
14% to $875.9 million from $1.02 billion for 2008 primarily due to
lower advertising sales and higher investment in programming and
content. In 2008, the Writers Guild of America strike reduced
programming costs for the 2007/2008 broadcast season. The adjusted
OIBDA decline was partially offset by higher profits from
syndication sales and lower restructuring charges in 2009.
Operating income for 2009 was $699.9 million versus an operating
loss of $2.91 billion for 2008, which included an impairment charge
of $3.80 billion to reduce the carrying value of goodwill. Cable
Networks (Showtime Networks and CBS College Sports Network) Fourth
Quarter Cable Networks revenues for the fourth quarter of 2009
increased 8% to $347.1 million from $320.7 million for the same
prior-year period due to rate increases and growth in subscriptions
at both Showtime Networks and CBS College Sports Network. Showtime
Networks subscriptions totaled 61.3 million as of December 31,
2009, up by 2.6 million, or 4%, from December 31, 2008, and CBS
College Sports Network subscriptions of 34.8 million were up by 9.5
million, or 38%. Cable Networks OIBDA of $152.8 million and
operating income of $147.0 million were up 46% and 49%,
respectively, for the fourth quarter of 2009, due to higher
affiliate fees and the mix of Showtime original series and
theatrical programming. Full Year Cable Networks revenues for 2009
increased 7% to $1.35 billion from $1.26 billion for the same
prior-year period due to rate increases and growth in subscriptions
at Showtime Networks and CBS College Sports Network. Cable Networks
OIBDA of $461.0 million and operating income of $437.4 million were
up 18% and 20%, respectively, driven by the revenue increase,
partially offset by higher advertising for new Showtime original
series. Publishing (Simon & Schuster) Fourth Quarter Publishing
revenues for the fourth quarter of 2009 decreased 10% to $220.0
million from $245.1 million for the same prior-year period in the
soft retail market. Best-selling titles in the fourth quarter of
2009 included Under the Dome by Stephen King and It's Your Time by
Joel Osteen. Publishing OIBDA of $13.6 million and operating income
of $11.9 million for the fourth quarter of 2009 decreased 52% and
54%, respectively. The revenue decline and higher royalty expenses
were partially offset by lower production costs and lower operating
expenses resulting from cost-savings initiatives. Full Year
Publishing revenues for 2009 decreased 7% to $793.5 million from
$857.7 million for the same prior-year period due to the soft
retail market and the unfavorable impact of foreign exchange rate
changes. Best-selling titles in 2009 included Glenn Beck's Arguing
with Idiots and Under the Dome by Stephen King. Publishing OIBDA of
$50.2 million and operating income of $42.5 million for 2009
decreased 43% and 46%, respectively. The revenue decline and higher
royalty expenses were partially offset by lower production costs,
as well as lower operating expenses resulting from cost-savings
initiatives. Local Broadcasting (CBS Television Stations and CBS
Radio) Fourth Quarter Local Broadcasting revenues for the fourth
quarter of 2009 decreased 8% to $680.0 million from $735.8 million
for the same prior-year period reflecting lower radio and political
advertising sales. Revenues for CBS Television Stations decreased
3% to $358.2 million from $369.3 million, and CBS Radio revenues
decreased 12% to $322.2 million from $366.7 million for the same
prior-year period, partially reflecting radio station divestitures.
Non-political advertising sales increased 11% for CBS Television
Stations and were flat for Local Broadcasting. Local Broadcasting
adjusted OIBDA for the fourth quarter of 2009 increased 31% to
$227.5 million from $173.5 million, primarily due to the absence of
prior year restructuring charges, a gain from the sale of
broadcasting spectrum in 2009, and lower operating expenses as a
result of cost-savings initiatives, partially offset by lower
advertising revenues, including politicals. Operating income for
the fourth quarter of 2009 was $25.8 million, and included
impairment charges of $178.3 million to reduce the carrying value
of FCC broadcast licenses in certain radio markets. Operating
income for the same prior-year period was $82.8 million, and
included impairment charges of $64.2 million primarily related to
radio station divestitures. Full Year Local Broadcasting revenues
for 2009 decreased 20% to $2.36 billion from $2.95 billion for the
same prior-year period, primarily due to lower local non-political
radio and television advertising sales during the first three
quarters and lower political advertising for the year. CBS
Television Stations revenues for 2009 decreased 20% to $1.14
billion from $1.41 billion for the same prior-year period, and CBS
Radio revenues for 2009 decreased 21% to $1.22 billion from $1.54
billion for the same prior-year period. Non-political advertising
sales decreased 17% for CBS Television Stations and 18% for Local
Broadcasting. Local Broadcasting adjusted OIBDA for 2009 decreased
37% to $512.9 million from $820.0 million primarily due to lower
advertising sales, including politicals, which were partially
offset by lower restructuring charges, a gain from the sale of
broadcasting spectrum in 2009 and lower operating expenses as a
result of cost-savings initiatives. Operating income for 2009 was
$212.4 million, which included impairment charges of $210.0
million, versus an operating loss of $6.81 billion in 2008, which
included impairment charges of $7.53 billion to reduce the carrying
value of goodwill and intangible assets. Outdoor (CBS Outdoor)
Fourth Quarter Outdoor revenues for the fourth quarter of 2009
decreased 8% to $483.7 million from $526.3 million for the same
prior-year period, reflecting the soft worldwide advertising
marketplace. In constant dollars, Outdoor revenues decreased 12%
from the fourth quarter of 2008. Americas revenues (comprising
North and South America) of $300.4 million for the fourth quarter
of 2009 decreased 8% (10% in constant dollars) from $327.6 million
for the same prior-year period. Europe and Asia revenues of $183.3
million decreased 8% (15% in constant dollars) from $198.7 million
for the same quarter last year. Outdoor OIBDA for the fourth
quarter of 2009 decreased 30% to $68.8 million from $98.4 million
for the same prior-year period principally driven by the revenue
decline. Operating income was $1.0 million for the fourth quarter
of 2009 versus $35.2 million for the same quarter last year.
Outdoor's franchise and lease costs are generally fixed in nature
and, with lower revenues, certain transit contracts are operating
at their minimum guarantee levels, reducing OIBDA and operating
income margins in the fourth quarter of 2009. Full Year Outdoor
revenues for 2009 decreased 21% to $1.72 billion from $2.17 billion
for the same prior-year period, as a result of the soft worldwide
advertising marketplace and the unfavorable impact of foreign
exchange rate changes. In constant dollars, Outdoor revenues
decreased 17% from 2008. Americas revenues of $1.11 billion for
2009 decreased 16% (15% in constant dollars) from $1.33 billion for
2008. Europe and Asia revenues of $609.8 million for 2009 decreased
27% (20% in constant dollars) from $838.6 million for 2008. For
2009, Outdoor adjusted OIBDA of $168.7 million decreased 64% from
$467.4 million for 2008, with the revenue decline partially offset
by lower employee-related costs resulting from restructuring and
cost-savings initiatives. Outdoor reported an operating loss of
$96.9 million for 2009 versus an operating loss of $2.63 billion
for 2008, which included impairment charges of $2.86 billion to
reduce the carrying value of goodwill and intangible assets. About
CBS Corporation CBS Corporation is a mass media company with
constituent parts that reach back to the beginnings of the
broadcast industry, as well as newer businesses that operate on the
leading edge of the media industry. The Company, through its many
and varied operations, combines broad reach with well-positioned
local businesses, all of which provide it with an extensive
distribution network by which it serves audiences and advertisers
in all 50 states and key international markets. It has operations
in virtually every field of media and entertainment, including
broadcast television (CBS and The CW - a joint venture between CBS
Corporation and Warner Bros. Entertainment), cable television
(Showtime Networks and CBS College Sports Network), local
television (CBS Television Stations), television production and
syndication (CBS Television Studios, CBS Studios International and
CBS Television Distribution), radio (CBS Radio), advertising on
out-of-home media (CBS Outdoor), publishing (Simon & Schuster),
interactive media (CBS Interactive), music (CBS Records), licensing
and merchandising (CBS Consumer Products), video/DVD (CBS Home
Entertainment) and motion pictures (CBS Films). For more
information, log on to http://www.cbscorporation.com/. Cautionary
Statement Concerning Forward-looking Statements This news release
contains both historical and forward-looking statements. All
statements other than statements of historical fact are, or may be
deemed to be, forward-looking statements within the meaning of
section 27A of the Securities Act of 1933 and section 21E of the
Securities Exchange Act of 1934. These forward-looking statements
are not based on historical facts, but rather reflect the Company's
current expectations concerning future results and events.
Similarly, statements that describe our objectives, plans or goals
are or may be forward-looking statements. These forward-looking
statements involve known and unknown risks, uncertainties and other
factors that are difficult to predict and which may cause the
actual results, performance or achievements of the Company to be
different from any future results, performance or achievements
expressed or implied by these statements. These risks,
uncertainties and other factors include, among others: advertising
market conditions generally; changes in the public acceptance of
the Company's programming; changes in technology and its effect on
competition in the Company's markets; changes in the Federal
Communications laws and regulations; the impact of piracy on the
Company's products, the impact of the consolidation in the market
for the Company's programming; other domestic and global economic,
business, competitive and/or other regulatory factors affecting the
Company's businesses generally; the impact of union activity,
including possible strikes or work stoppages or the Company's
inability to negotiate favorable terms for contract renewals; 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 most recent Form 10-K, Form 10-Qs and Form
8-Ks. The forward-looking statements included in this document are
made only as of the date of this document, and under section 27A of
the Securities Act and section 21E of the Exchange Act, we do not
have any obligation to publicly update any forward-looking
statements to reflect subsequent events or circumstances. CBS
CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF
OPERATIONS -----------------------------------------------
(Unaudited; all amounts, except per share amounts, are in millions)
Three Months Ended Twelve Months Ended December 31, December 31,
2009 2008 2009 2008 ---- ---- ---- ---- Revenues $3,498.4 $3,526.9
$13,014.6 $13,950.4 -------- -------- -------- --------- ---------
Operating income (loss) 243.5 298.2 1,011.4 (12,158.7) Interest
expense (139.5) (138.8) (542.0) (546.6) Interest income 1.7 3.0 6.0
42.2 Gain (loss) on early extinguishment of debt - 8.4 (29.8) 8.4
Other items, net (2.2) (3.8) (2.6) 79.6 ---------------- ---- ----
---- ---- Earnings (loss) before income taxes 103.5 167.0 443.0
(12,575.1) (Provision) benefit for income taxes (37.4) (28.6)
(182.8) 919.3 Equity in loss of investee companies, net of tax
(7.3) (2.3) (33.7) (17.6) -------------------- ---- ---- -----
----- Net earnings (loss) $58.8 $136.1 $226.5 $(11,673.4)
------------------- ----- ------ ------ ---------- Basic net
earnings (loss) per common share $.09 $.20 $.34 $(17.43) Diluted
net earnings (loss) per common share $.09 $.20 $.33 $(17.43)
Weighted average number of common shares outstanding: Basic 674.8
670.9 673.6 669.8 Diluted 690.3 674.7 682.9 669.8 Dividends per
common share $.05 $.27 $.20 $1.06 -------------------- ---- ----
---- ----- CBS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED
BALANCE SHEETS ------------------------------------- (Unaudited;
Dollars in millions) At At December 31, December 31, 2009 2008
------------ ------------ Assets Cash and cash equivalents $716.7
$419.5 Receivables, net 2,900.2 2,749.9 Programming and other
inventory 1,085.0 1,027.3 Prepaid expenses and other current assets
935.0 1,019.2 ---------------------------------- ----- -------
Total current assets 5,636.9 5,215.9 -------------------- -------
------- Property and equipment 4,998.0 4,899.5 Less accumulated
depreciation and amortization 2,139.3 1,891.2
--------------------------------- ------- ------- Net property and
equipment 2,858.7 3,008.3 -------------------------- -------
------- Programming and other inventory 1,464.2 1,578.1 Goodwill
8,667.5 8,647.8 Intangible assets 6,753.7 7,104.2 Other assets
1,581.0 1,526.6 ------------ ------- ------- Total Assets $26,962.0
$27,080.9 ------------ --------- --------- Liabilities and
Stockholders' Equity Accounts payable $436.4 $462.8 Participants'
share and royalties payable 955.0 962.3 Program rights 729.2 840.1
Current portion of long-term debt 443.6 21.3 Accrued expenses and
other current liabilities 2,182.3 2,514.4
---------------------------------- ------- ------- Total current
liabilities 4,746.5 4,800.9 ------------------------- -------
------- Long-term debt 6,553.3 6,974.8 Other liabilities 6,642.8
6,707.9 Stockholders' equity 9,019.4 8,597.3 --------------------
------- ------- Total Liabilities and Stockholders' Equity
$26,962.0 $27,080.9 ----------------------------------- ---------
--------- CBS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS
----------------------------------------------- (Unaudited; Dollars
in millions) Twelve Months Ended December 31, 2009 2008 ---- ----
Operating Activities: Net earnings (loss) $226.5 $(11,673.4)
Adjustments to reconcile net earnings (loss) to net cash flow
provided by operating activities: Depreciation and amortization
582.3 531.6 Impairment charges 210.0 14,181.4 Deferred income tax
provision (benefit) 216.4 (1,221.7) Write-down of investments 7.7
71.1 Loss (gain) on early extinguishment of debt 29.8 (8.4) Net
gain on dispositions (21.4) (133.3) Stock-based compensation 135.6
137.9 Equity in loss of investee companies, net of tax and
distributions 36.0 23.4 Decrease to accounts receivable
securitization program (150.0) - Change in assets and liabilities,
net of effects of acquisitions (333.5) 237.9
---------------------------------------- ------ ----- Net cash flow
provided by operating activities 939.4 2,146.5
----------------------------------- ----- ------- Investing
Activities: Acquisitions, net of cash acquired (26.1) (2,035.3)
Capital expenditures (261.6) (474.1) Investments in and advances to
investee companies (55.6) (40.2) Proceeds from dispositions 128.8
198.2 (Purchases) proceeds from sales of investments (34.2) 212.7
Other investing activities (.5) (15.4) --------------------------
--- ----- Net cash flow used for investing activities (249.2)
(2,154.1) -------------------------------- ------ --------
Financing Activities: Repayments to banks, including commercial
paper, net (1.5) (5.3) Proceeds from issuance of senior notes 974.4
- Repayment of senior notes (1,007.5) (183.2) Payment of capital
lease obligations (15.6) (17.2) Dividends (297.3) (705.4) Purchase
of Company common stock (18.7) (46.4) Proceeds from exercise of
stock options - 31.2 Other financing activities (26.8) 6.5
-------------------------- ----- --- Net cash flow used for
financing activities (393.0) (919.8)
-------------------------------- ------ ------ Net increase
(decrease) in cash and cash equivalents 297.2 (927.4) Cash and cash
equivalents at beginning of year 419.5 1,346.9
----------------------------------------- ----- ------- Cash and
cash equivalents at end of year $716.7 $419.5
---------------------------------------- ------ ------ CBS
CORPORATION AND SUBSIDIARIES SUPPLEMENTAL DISCLOSURES REGARDING
NON-GAAP FINANCIAL INFORMATION (Unaudited; Dollars in millions)
Operating Income (Loss) Before Depreciation and Amortization The
following tables set forth the Company's Operating Income (Loss)
Before Depreciation and Amortization ("OIBDA") for the three and
twelve months ended December 31, 2009 and 2008. The Company defines
OIBDA as net earnings (loss) adjusted to exclude the following line
items presented in its Statements of Operations: Equity in loss of
investee companies, net of tax; (Provision) benefit for income
taxes; Other items, net; Gain (loss) on early extinguishment of
debt; Interest income; Interest expense; and Depreciation and
amortization. The Company defines "Adjusted OIBDA" as OIBDA before
impairment charges. The Company presents OIBDA before impairment
charges on a segment basis as the primary measure of profit and
loss for its operating segments in accordance with Financial
Accounting Standards Board guidance for segment reporting. The
Company uses OIBDA, among other things, to evaluate the Company's
operating performance, to value prospective acquisitions and as one
of several components of incentive compensation targets for certain
management personnel, and this measure is among the primary
measures used by management for planning and forecasting of future
periods. This measure is an important indicator of the Company's
operational strength and performance of its business because it
provides a link between profitability and operating cash flow. The
Company believes the presentation of this measure is relevant and
useful for investors because it allows investors to view
performance in a manner similar to the method used by the Company's
management, helps improve their ability to understand the Company's
operating performance and makes it easier to compare the Company's
results with other companies that have different financing and
capital structures or tax rates. In addition, this measure is also
among the primary measures used externally by the Company's
investors, analysts and peers in its industry for purposes of
valuation and comparing the operating performance of the Company to
other companies in its industry. Since OIBDA is not a measure of
performance calculated in accordance with accounting principles
generally accepted in the United States ("GAAP"), it should not be
considered in isolation of, or as a substitute for, net earnings
(loss) as an indicator of operating performance. OIBDA, as the
Company calculates it, may not be comparable to similarly titled
measures employed by other companies. In addition, this measure
does not necessarily represent funds available for discretionary
use, and is not necessarily a measure of the Company's ability to
fund its cash needs. As OIBDA excludes certain financial
information compared with net earnings (loss), the most directly
comparable GAAP financial measure, users of this financial
information should consider the types of events and transactions
which are excluded. The Company provides the following
reconciliations of total OIBDA to net earnings (loss) and Adjusted
OIBDA for each segment to such segment's operating income (loss),
the most directly comparable amounts reported under GAAP. CBS
CORPORATION AND SUBSIDIARIES SUPPLEMENTAL DISCLOSURES REGARDING
NON-GAAP FINANCIAL INFORMATION (continued) (Unaudited; Dollars in
millions) Three Months Ended December 31, 2009
------------------------------------ Depreciation Adjusted
Operating Adjusted and Operating Impairment Income OIBDA
Amortization Income (Loss) Charges (Loss) -------- ------------
------------- ---------- --------- Entertainment $190.8 $(43.9)
$146.9 $- $146.9 Cable Networks 152.8 (5.8) 147.0 - 147.0
Publishing 13.6 (1.7) 11.9 - 11.9 ---------- ---- ---- ---- ---
---- Content Group 357.2 (51.4) 305.8 - 305.8 Local Broadcasting
227.5 (23.4) 204.1 (178.3) 25.8 Outdoor 68.8 (67.8) 1.0 - 1.0
------- ---- ----- --- --- --- Local Group 296.3 (91.2) 205.1
(178.3) 26.8 Corporate (49.1) (4.8) (53.9) - (53.9) Residual costs
(35.9) - (35.9) - (35.9) Eliminations .7 - .7 - .7 ------------ ---
--- --- --- --- Total $569.2 $(147.4) $421.8 $(178.3) $243.5 -----
------ ------- ------ ------- ------ Three Months Ended December
31, 2008 ------------------------------------ Adjusted Depreciation
Operating Operating Adjusted and Income Impairment Income OIBDA
Amortization (Loss) Charges (Loss) -------- ------------ ---------
---------- --------- Entertainment $174.1 $(49.0) $125.1 $- $125.1
Cable Networks 104.8 (6.2) 98.6 - 98.6 Publishing 28.3 (2.2) 26.1 -
26.1 ---------- ---- ---- ---- --- ---- Content Group 307.2 (57.4)
249.8 - 249.8 Local Broadcasting 173.5 (26.5) 147.0 (64.2) 82.8
Outdoor 98.4 (63.2) 35.2 - 35.2 ------- ---- ----- ---- --- ----
Local Group 271.9 (89.7) 182.2 (64.2) 118.0 Corporate (50.7) (3.6)
(54.3) - (54.3) Residual costs (16.0) - (16.0) - (16.0)
Eliminations .7 - .7 - .7 ------------ --- --- --- --- --- Total
$513.1 $(150.7) $362.4 $(64.2) $298.2 ----- ------ ------- ------
------ ------ Three Months Ended December 31, 2009 2008 ---- ----
Adjusted OIBDA $569.2 $513.1 Impairment Charges (178.3) (64.2)
------------------ ------ ----- Total OIBDA 390.9 448.9
Depreciation and amortization (147.4) (150.7)
----------------------------- ------ ------ Operating income 243.5
298.2 Interest expense (139.5) (138.8) Interest income 1.7 3.0 Gain
on early extinguishment of debt - 8.4 Other items, net (2.2) (3.8)
---------------- ---- ---- Earnings before income taxes 103.5 167.0
Provision for income taxes (37.4) (28.6) Equity in loss of investee
companies, net of tax (7.3) (2.3) -------------------------- ----
---- Net earnings $58.8 $136.1 ------------ ----- ------ CBS
CORPORATION AND SUBSIDIARIES SUPPLEMENTAL DISCLOSURES REGARDING
NON-GAAP FINANCIAL INFORMATION (continued) (Unaudited; Dollars in
millions) Twelve Months Ended December 31, 2009
------------------------------------- Depreciation Adjusted
Operating Adjusted and Operating Impairment Income OIBDA
Amortization Income (Loss) Charges (Loss) -------- ------------
------------- ---------- --------- Entertainment $875.9 $(176.0)
$699.9 $- $699.9 Cable Networks 461.0 (23.6) 437.4 - 437.4
Publishing 50.2 (7.7) 42.5 - 42.5 ---------- ---- ---- ---- ---
---- Content Group 1,387.1 (207.3) 1,179.8 - 1,179.8 Local
Broadcasting 512.9 (90.5) 422.4 (210.0) 212.4 Outdoor 168.7 (265.6)
(96.9) - (96.9) ------- ----- ------ ----- --- ----- Local Group
681.6 (356.1) 325.5 (210.0) 115.5 Corporate (147.1) (18.9) (166.0)
- (166.0) Residual costs (115.7) - (115.7) - (115.7) Eliminations
(2.2) - (2.2) - (2.2) ------------ ---- --- ---- --- ---- Total
$1,803.7 $(582.3) $1,221.4 $(210.0) $1,011.4 ----- -------- -------
-------- ------- -------- Twelve Months Ended December 31, 2008
------------------------------------- Depreciation Adjusted
Operating Adjusted and Operating Impairment Income OIBDA
Amortization Income (Loss) Charges (Loss) -------- ------------
------------- ---------- --------- Entertainment $1,022.8 $(140.1)
$882.7 $(3,796.8) $(2,914.1) Cable Networks 389.5 (25.2) 364.3 -
364.3 Publishing 88.2 (9.5) 78.7 - 78.7 ---------- ---- ---- ----
--- ---- Content Group 1,500.5 (174.8) 1,325.7 (3,796.8) (2,471.1)
Local Broadcasting 820.0 (99.7) 720.3 (7,529.4) (6,809.1) Outdoor
467.4 (243.9) 223.5 (2,855.2) (2,631.7) ------- ----- ------ -----
-------- -------- Local Group 1,287.4 (343.6) 943.8 (10,384.6)
(9,440.8) Corporate (157.1) (13.2) (170.3) - (170.3) Residual costs
(79.2) - (79.2) - (79.2) Eliminations 2.7 - 2.7 - 2.7 ------------
--- --- --- --- --- Total $2,554.3 $(531.6) $2,022.7 $(14,181.4)
$(12,158.7) ----- -------- ------- -------- ---------- ----------
Twelve Months Ended December 31, 2009 2008 ---- ---- Adjusted OIBDA
$1,803.7 $2,554.3 Impairment Charges (210.0) (14,181.4)
------------------ ------ --------- Total OIBDA 1,593.7 (11,627.1)
Depreciation and amortization (582.3) (531.6)
----------------------------- ------ ------ Operating income (loss)
1,011.4 (12,158.7) Interest expense (542.0) (546.6) Interest income
6.0 42.2 Gain (loss) on early extinguishment of debt (29.8) 8.4
Other items, net (2.6) 79.6 ---------------- ---- ---- Earnings
(loss) before income taxes 443.0 (12,575.1) (Provision) benefit for
income taxes (182.8) 919.3 Equity in loss of investee companies,
net of tax (33.7) (17.6) -------------------------- ----- ----- Net
earnings (loss) $226.5 $(11,673.4) ------------------- ------
---------- CBS CORPORATION AND SUBSIDIARIES SUPPLEMENTAL
DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION (continued)
(Unaudited; Dollars in millions) Free Cash Flow Free cash flow
reflects the Company's net cash flow provided by operating
activities less capital expenditures and increases/(decreases) to
the accounts receivable securitization program. The Company uses
free cash flow, among other measures, to evaluate its operating
performance and as one of several components of incentive
compensation targets for certain management personnel. Management
believes free cash flow provides investors with an important
perspective on the cash available to service debt, make strategic
acquisitions and investments, maintain its capital assets, satisfy
its tax obligations and fund ongoing operations and working capital
needs. As a result, free cash flow is a significant measure of the
Company's ability to generate long term value. It is useful for
investors to know whether this ability is being enhanced or
degraded as a result of the Company's operating performance. The
Company believes the presentation of free cash flow is relevant and
useful for investors because it allows investors to view
performance in a manner similar to the method used by management.
In addition, free cash flow is also a primary measure used
externally by the Company's investors, analysts and peers in its
industry for purposes of valuation and comparing the operating
performance of the Company to other companies in its industry. The
Company considers its decision to either increase or decrease its
accounts receivable securitization program a financing decision,
the result of which does not affect the underlying operating
performance of the Company. Accordingly, the Company's calculation
of free cash flow does not include the impact of changes in its
accounts receivable securitization program. As free cash flow is
not a measure of performance calculated in accordance with GAAP,
free cash flow should not be considered in isolation of, or as a
substitute for, net earnings (loss) as an indicator of operating
performance or net cash flow provided by operating activities as a
measure of liquidity. Free cash flow, as the Company calculates it,
may not be comparable to similarly titled measures employed by
other companies. In addition, free cash flow does not necessarily
represent funds available for discretionary use and is not
necessarily a measure of the Company's ability to fund its cash
needs. As free cash flow deducts capital expenditures and
increases/(decreases) to the accounts receivable securitization
program from net cash flow provided by operating activities, the
most directly comparable GAAP financial measure, users of this
financial information should consider the types of events and
transactions which are not reflected. The Company provides below a
reconciliation of free cash flow to net cash flow provided by
operating activities, the most directly comparable amount reported
under GAAP. The following table presents a reconciliation of the
Company's net cash flow provided by operating activities to free
cash flow: Three Months Ended Twelve Months Ended December 31,
December 31, 2009 2008 2009 2008 ---- ---- ---- ---- Net cash flow
provided by operating activities $371.5 $432.8 $939.4 $2,146.5
Exclude: Decrease to accounts receivable securitization program - -
150.0 - Capital expenditures (76.1) (124.5) (261.6) (474.1)
-------------------- ----- ------ ------ ------ Free cash flow
$295.4 $308.3 $827.8 $1,672.4 -------------- ------ ------ ------
-------- The following table presents a summary of the Company's
cash flows: Three Months Ended Twelve Months Ended December 31,
December 31, 2009 2008 2009 2008 ---- ---- ---- ---- Net cash flow
provided by operating activities $371.5 $432.8 $939.4 $2,146.5 Net
cash flow used for investing activities $(63.7) $(199.0) $(249.2)
$(2,154.1) Net cash flow used for financing activities $(64.9)
$(367.4) $(393.0) $(919.8) ---------------------- ------ -------
------- ------- CBS CORPORATION AND SUBSIDIARIES SUPPLEMENTAL
DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION (continued)
(Unaudited; all amounts, except per share amounts, are in millions)
2009 and 2008 Adjusted Results The following tables reconcile
financial measures excluding impairment charges, certain tax items
and dispositions to the reported measures included in this earnings
release. The Company believes that adjusting its financial results
for the impact of these items is relevant and useful for investors
because it allows investors to view performance in a manner similar
to the method used by the Company's management and provides a
clearer perspective on the current underlying performance of the
Company, and adjusting each period's results on the same basis
makes it easier to compare the Company's year-over-year results.
Three Months Ended December 31, 2009
------------------------------------ 2009 Impairment Tax 2009
Reported Charges(a) Items(b) Other Adjusted -------- --------------
-------- ----- -------- Revenues $3,498.4 $- $- $- $3,498.4
-------- -------- --- --- --- -------- OIBDA 390.9 178.3 - - 569.2
----- ----- ----- --- --- ----- Operating income 243.5 178.3 - -
421.8 Interest expense (139.5) - - - (139.5) Interest income 1.7 -
- - 1.7 Other items, net (2.2) 7.7 - - 5.5 ---------------- ----
--- --- --- --- Earnings before income taxes 103.5 186.0 - - 289.5
Provision for income taxes (37.4) (72.5) (1.3) - (111.2)
------------- ----- ----- ---- --- ------ Effective income tax rate
36.1% 38.4% ---------------- ---- ---- Equity in loss of investee
companies, net of tax (7.3) .1 - - (7.2) ----------------- ---- ---
--- --- ---- Net earnings $58.8 $113.6 $(1.3) $- $171.1
------------ ----- ------ ----- --- ------ Diluted EPS $.09 $.16 $-
$- $.25 Diluted weighted average number of common shares
outstanding 690.3 690.3 ------------- ----- ----- Three Months
Ended December 31, 2008 ------------------------------------ 2008
Impairment Tax 2008 Reported Charges(a) Items(b) Other(c) Adjusted
-------- -------------- -------- ------- -------- Revenues $3,526.9
$- $- $- $3,526.9 -------- -------- --- --- --- -------- OIBDA
448.9 64.2 - - 513.1 ----- ----- ---- --- --- ----- Operating
income 298.2 64.2 - - 362.4 Interest expense (138.8) - - - (138.8)
Interest income 3.0 - - - 3.0 Gain on early extinguishment of debt
8.4 - - - 8.4 Other items, net (3.8) 14.7 - (2.6) 8.3 ------------
---- ---- --- ---- --- Earnings before income taxes 167.0 78.9 -
(2.6) 243.3 Provision for income taxes (28.6) (37.0) (37.1) 1.0
(101.7) ------------- ----- ----- ----- --- ------ Effective income
tax rate 17.1% 41.8% ----------- ---- ---- Equity in loss of
investee companies, net of tax (2.3) - - - (2.3) ---------------
---- --- --- --- ---- Net earnings $136.1 $41.9 $(37.1) $(1.6)
$139.3 ------------ ------ ----- ------ ----- ------ Diluted EPS
$.20 $.06 $(.05) $- $.21 Diluted weighted average number of common
shares outstanding 674.7 674.7 ------------- ----- ----- (a)
Reflects pre-tax non-cash impairment charges to reduce goodwill and
FCC broadcast licenses at Local Broadcasting as well as
other-than-temporary declines in the market value of investments.
(b) Reflects tax benefits resulting from the settlement of federal
and state income tax audits and the reduction of deferred tax
assets associated with stock-based compensation. (c) Gain on sale
of investment in Sundance Channel. CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(continued) (Unaudited; all amounts, except per share amounts, are
in millions) Twelve Months Ended December 31, 2009
------------------------------------- 2009 Impairment Tax 2009
Reported Charges(a) Items(c) Other Adjusted -------- --------------
-------- ----- -------- Revenues $13,014.6 $- $- $- $13,014.6
-------- --------- --- --- --- --------- OIBDA 1,593.7 210.0 - -
1,803.7 ----- ------- ----- --- --- ------- Operating income
1,011.4 210.0 - - 1,221.4 Interest expense (542.0) - - - (542.0)
Interest income 6.0 - - - 6.0 Loss on early extinguishment of debt
(29.8) - - - (29.8) Other items, net (2.6) 7.7 - - 5.1
---------------- ---- --- --- --- --- Earnings before income taxes
443.0 217.7 - - 660.7 Provision for income taxes (182.8) (81.1)
(4.4) - (268.3) ------------- ------ ----- ---- --- ------
Effective income tax rate 41.3% 40.6% ---------------- ---- ----
Equity in loss of investee companies, net of tax (33.7) .1 - -
(33.6) ----------------- ----- --- --- --- ----- Net earnings
$226.5 $136.7 $(4.4) $- $358.8 ------------ ------ ------ ----- ---
------ Diluted EPS $.33 $.20 $(.01) $- $.53 Diluted weighted
average number of common shares outstanding 682.9 682.9
------------- ----- ----- Twelve Months Ended December 31, 2008
------------------------------------- 2008 Impairment Tax 2008
Reported Charges(b) Items(c) Other(d) Adjusted --------
------------- -------- ------- -------- Revenues $13,950.4 $- $- $-
$13,950.4 -------- --------- --- --- --- --------- OIBDA (11,627.1)
14,181.4 - - 2,554.3 ----- --------- ---- --- --- ------- Operating
income (loss) (12,158.7) 14,181.4 - - 2,022.7 Interest expense
(546.6) - - - (546.6) Interest income 42.2 - - - 42.2 Gain on early
extinguishment of debt 8.4 - - - 8.4 Other items, net 79.6 71.1 -
(129.8) 20.9 ------------ ---- ---- --- ------ ---- Earnings (loss)
before income taxes (12,575.1) 14,252.5 - (129.8) 1,547.6
(Provision) benefit for income taxes 919.3 (1,482.5) (32.4) 49.9
(545.7) ------------ ----- -------- ----- ---- ------ Effective
income tax rate 7.3% 35.3% ----------- --- ---- Equity in loss of
investee companies, net of tax (17.6) - - - (17.6) ---------------
----- --- --- --- ----- Net earnings (loss) $(11,673.4) $12,770.0
$(32.4) $(79.9) $984.3 ------------ ---------- --------- ------
------ ------ Diluted EPS $(17.43) $19.07 $(.05) $(.12) $1.46
Diluted weighted average number of common shares outstanding 669.8
674.2 ------------- ----- ----- (a) Reflects pre-tax non-cash
impairment charges to reduce goodwill and FCC broadcast licenses at
Local Broadcasting as well as other-than-temporary declines in the
market value of investments. (b) Reflects non-cash impairment
charges to reduce goodwill and other intangible assets at
Entertainment, Local Broadcasting and Outdoor as well as
other-than-temporary declines in the market value of investments.
(c) Reflects tax benefits resulting from the settlement of federal
and state income tax audits and the reduction of deferred tax
assets associated with stock-based compensation. (d) Gain on sale
of investment in Sundance Channel. DATASOURCE: CBS Corporation
CONTACT: Press: Gil Schwartz, Executive Vice President, Corporate
Communications, +1-212-975-2121, , or Dana McClintock, Senior Vice
President, Corporate Communications, +1-212-975-1077, , or Andrea
Prochniak, Vice President, Corporate Communications,
+1-212-975-1942, , or investors: Adam Townsend, Executive Vice
President, Investor Relations, +1-212-975-5292, . Web Site:
http://www.cbscorporation.com/ Company News On-Call:
http://www.prnewswire.com/comp/965075.html
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