NEW YORK, May 1, 2012 /PRNewswire/ -- CBS Corporation
(NYSE: CBS.A and CBS) today reported results for the first quarter
ended March 31, 2012.
"As great as these last few years have been, this quarter tops
it all," said Sumner Redstone, Executive Chairman, CBS Corporation.
"What's most exciting is that we are poised to benefit from all of
the strategic actions we've taken – and continue to take – for a
long, long time. We have the best content and the right management
to ensure success, and as a result, I have never been more
confident about our Company's future than I am today."
"The transformation of CBS's business model continues, and I am
extremely pleased that we posted record results," said Leslie Moonves, President and Chief Executive
Officer, CBS Corporation. "Our ability to capitalize on the
fundamental shifts in our industry has led to the growth of
significant new revenue streams and has also allowed us to increase
our share of non-advertising revenue. At the same time, we continue
to benefit from underlying advertising growth. Of course, the
cornerstone of our ability to drive earnings will always come back
to our success in creating premium content. In that regard, we
greatly look forward to building on our leading position when we
unveil our new primetime schedule in a couple of weeks. We will
then sell that lineup into what we're confident will be a very
healthy upfront marketplace, and begin anew the process of
monetizing our programming through the burgeoning content value
chain. So, with political dollars due to ramp up in the back half
of 2012, and with the syndication programming pipeline we have
established for 2013, we look forward to the future with great
confidence."
First Quarter 2012 Results
Revenues of $3.92 billion for the
first quarter of 2012 increased 12% from $3.51 billion for the same prior-year period.
This increase was led by content licensing and distribution
revenues, which were up 39%, driven by licensing agreements for
digital streaming as well as international and domestic syndication
sales. Advertising revenues increased 5%, reflecting growth in
network primetime and sports advertising, including the timing of
the semifinals of the NCAA Division I Men's Basketball
Championship ("NCAA Tournament"), which aired during the first
quarter of 2012 versus the second quarter of 2011. Affiliate and
subscription fee revenues rose 7%, led by growth at Cable Networks
and higher retransmission revenues.
Operating income before depreciation and amortization ("OIBDA")
of $773 million increased 34% in the
first quarter of 2012 from $576
million for the same prior-year period. OIBDA before
impairment charges, which excludes a noncash impairment charge of
$11 million relating to radio station
divestitures, rose 36% to $784
million.
Operating income of $642 million
for the first quarter of 2012 increased 47% from $437 million for the same prior-year period, and
the operating income margin rose four percentage points, to 16%.
The operating income growth and margin expansion were primarily
driven by increases in high-margin revenue streams.
Net earnings were $363 million for
the first quarter of 2012, or $.54
per diluted share, up from $202
million, or $.29 per diluted
share, for last year's first quarter, reflecting the operating
income growth as well as lower weighted average shares outstanding
as a result of the Company's share repurchase program. Net earnings
include a gain of $16 million, net of
tax ($25 million before tax) on early
extinguishment of debt. The impact of this item on net earnings was
offset by a noncash impairment charge of $14
million, net of tax ($11
million before tax).
Reconciliations of all non-GAAP measures to reported results are
included at the end of this earnings release.
Free Cash Flow, Balance Sheet and Liquidity
Free cash flow was $607 million
for the first quarter of 2012, compared with $853 million for the first quarter a year ago.
The free cash flow comparison was affected by the timing of
programming payments. The Company generated cash flow from
operating activities of $646 million
for the three months ended March 31,
2012, versus $894 million for
the comparable prior-year period.
During the first quarter of 2012, the Company issued
$700 million of 3.375% senior notes
due March 1, 2022, and used the net
proceeds to redeem, at face value, its $700
million of 6.750% senior notes due March 27, 2056. The refinancing of this debt is
expected to result in an annualized net interest expense savings of
$22 million. As of March 31, 2012, the Company's cash balance was
$794 million, debt outstanding was
$5.92 billion, and there were no
credit facility borrowings.
Also during the quarter, the Company repurchased 9.0 million
shares of CBS Corp. Class B Common Stock for $269 million, at an average cost of approximately
$30 per share. Since the inception of
the share repurchase program in January of 2011, the Company has
repurchased 51.2 million shares for $1.29
billion, at an average cost of approximately $25 per share, leaving $1.71 billion of authorization remaining at
March 31, 2012.
Consolidated and Segment Results (dollars in
millions)
The tables below present the Company's revenues by segment and
type and its OIBDA before impairment charges and operating income
(loss), by segment for the three months ended March 31, 2012, and 2011. Reconciliations of all
non-GAAP measures to reported results are included at the end of
this earnings release.
|
|
|
Three
Months Ended
|
|
March
31,
|
|
Revenues by Segment
|
|
2012
|
|
|
2011
|
|
|
Entertainment
|
$
|
2,318
|
|
$
|
1,994
|
|
|
Cable
Networks
|
|
452
|
|
|
393
|
|
|
Publishing
|
|
176
|
|
|
155
|
|
|
|
|
Content
Group
|
|
2,946
|
|
|
2,542
|
|
|
Local
Broadcasting
|
|
622
|
|
|
621
|
|
|
Outdoor
|
|
416
|
|
|
413
|
|
|
|
|
Local
Group
|
|
1,038
|
|
|
1,034
|
|
|
Eliminations
|
|
(60)
|
|
|
(66)
|
|
|
|
Total
Revenues
|
$
|
3,924
|
|
$
|
3,510
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
|
|
|
March
31,
|
|
Revenues by Type
|
|
2012
|
|
|
2011
|
|
|
Advertising
|
$
|
2,398
|
|
$
|
2,292
|
|
|
Content
licensing and distribution
|
|
1,017
|
|
|
734
|
|
|
Affiliate
and subscription fees
|
|
455
|
|
|
426
|
|
|
Other
|
|
54
|
|
|
58
|
|
|
|
Total
Revenues
|
$
|
3,924
|
|
$
|
3,510
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
|
|
|
March
31,
|
|
OIBDA
before Impairment Charges
|
|
2012
|
|
|
2011
|
|
|
Entertainment
|
$
|
411
|
|
$
|
268
|
|
|
Cable
Networks
|
|
209
|
|
|
153
|
|
|
Publishing
|
|
10
|
|
|
7
|
|
|
|
|
Content
Group
|
|
630
|
|
|
428
|
|
|
Local
Broadcasting
|
|
171
|
|
|
169
|
|
|
Outdoor
|
|
53
|
|
|
49
|
|
|
|
|
Local
Group
|
|
224
|
|
|
218
|
|
|
Corporate
|
|
(58)
|
|
|
(52)
|
|
|
Residual
costs
|
|
(12)
|
|
|
(19)
|
|
|
Eliminations
|
|
—
|
|
|
1
|
|
|
|
OIBDA
before Impairment Charges
|
|
784
|
|
|
576
|
|
|
Impairment
charges
|
|
(11)
|
|
|
—
|
|
|
|
Total
OIBDA
|
$
|
773
|
|
$
|
576
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
March
31,
|
|
Operating Income (Loss)
|
|
2012
|
|
|
2011
|
|
|
Entertainment
|
$
|
370
|
|
$
|
230
|
|
|
Cable
Networks
|
|
204
|
|
|
147
|
|
|
Publishing
|
|
8
|
|
|
5
|
|
|
|
|
Content
Group
|
|
582
|
|
|
382
|
|
|
Local
Broadcasting
|
|
138
|
|
|
143
|
|
|
Outdoor
|
|
(2)
|
|
|
(12)
|
|
|
|
|
Local
Group
|
|
136
|
|
|
131
|
|
|
Corporate
|
|
(64)
|
|
|
(58)
|
|
|
Residual
costs
|
|
(12)
|
|
|
(19)
|
|
|
Eliminations
|
|
—
|
|
|
1
|
|
|
|
Total
Operating Income
|
$
|
642
|
|
$
|
437
|
Entertainment (CBS Television Network, CBS Television
Studios, CBS Studios International, CBS Television Distribution,
CBS Films and CBS Interactive)
Entertainment revenues for the first quarter of 2012 increased
16% to $2.32 billion from
$1.99 billion for the same prior-year
period, principally driven by the licensing of television
programming for digital streaming and syndication, higher
advertising revenues, and increases in retransmission revenues.
Advertising revenue grew 8%, with four of the percentage points
from the timing of the semifinals of the NCAA Tournament.
Entertainment OIBDA for the first quarter of 2012 increased 53%
to $411 million from $268 million for the same prior-year period, and
the OIBDA margin improved five percentage points to 18%. These
increases were primarily driven by growth in high-margin
revenues.
Cable Networks (Showtime Networks, CBS Sports Network
and Smithsonian Networks)
Cable Networks revenues for the first quarter of 2012 increased
15% to $452 million from $393 million for the same prior-year period. The
revenue growth was driven by higher licensing revenues from the
digital streaming of Showtime original series as well as
increases in rates and subscriptions at Showtime Networks and
Smithsonian Networks.
Cable Networks OIBDA for the first quarter of 2012 increased 37%
to $209 million from $153 million for the same prior-year period,
reflecting revenue growth and lower costs from the timing of
programming expenses.
Publishing (Simon & Schuster)
Publishing revenues for the first quarter of 2012 increased 14%
to $176 million from $155 million for the same prior-year period,
reflecting strong growth in the sales of more profitable digital
content as well as higher print book sales. Sales of digital
content increased 64% in the quarter and represented approximately
26% of Publishing's total revenues, the highest to date. Best
selling titles in the first quarter included Kill Shot by
Vince Flynn and Lone Wolf by Jodi
Picoult. The first quarter of 2012 also benefited from the
continued success of fourth quarter releases Steve Jobs by Walter
Isaacson and 11/22/63
by Stephen King.
Publishing OIBDA for the first quarter of 2012 increased 43% to
$10 million from $7 million for the same prior-year period. This
increase was primarily driven by growth in digital and print book
sales, which was partially offset by higher costs related to legal
matters.
Local Broadcasting (CBS Television Stations and CBS
Radio)
Local Broadcasting revenues of $622
million in the first quarter of 2012 remained flat compared
with the same prior-year period. Increased spending by automotive
manufacturers and retailers as well as higher retransmission
revenues were offset by lower advertising spending from the
utilities and service industries. For the first quarter of 2012,
CBS Television Stations revenues increased 2% from the same quarter
last year, while CBS Radio revenues decreased 2%.
Local Broadcasting OIBDA before impairment charges for the first
quarter of 2012 increased 1% to $171
million from OIBDA of $169
million for the same prior-year period, primarily driven by
the revenue growth. OIBDA before impairment charges excludes a
first quarter 2012 impairment charge of $11
million related to radio station divestitures.
Outdoor (CBS Outdoor)
Outdoor revenues for the first quarter of 2012 increased 1% to
$416 million from $413 million for the same prior-year period,
driven by increased revenues in the Americas (comprised of
North America and South America), partially offset by the
unfavorable impact of foreign exchange rate changes. Revenues in
the Americas increased 4% in constant dollars. Growth in the U.S.
billboards and displays businesses was partially offset by the
impact of the nonrenewal of the Toronto transit contract, which negatively
affected the Americas revenue comparison by two percentage points.
Revenues for Europe decreased 2%
in constant dollars because of the nonrenewal of certain contracts
as well as weakness in the European economy.
Outdoor OIBDA for the first quarter of 2012 increased 8% to
$53 million from $49 million for the same prior-year period
principally because of the higher revenues.
Corporate
Corporate expenses before depreciation expense were $58 million for the first quarter of 2012
compared with $52 million for the
same quarter last year, reflecting increased compensation expenses
primarily associated with the Company's higher stock price.
Residual Costs
Residual costs include pension and postretirement benefits costs
for plans retained by the Company for previously divested
businesses. Residual costs decreased $7
million to $12 million for the
first quarter of 2012 from $19
million for the same quarter last year, primarily because of
the benefit from the prefunding of pension plans during 2011.
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, Smithsonian Networks and CBS 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), licensing and merchandising
(CBS Consumer Products), video/DVD (CBS Home Entertainment), motion
pictures (CBS Films), and sustainable media (EcoMedia). For
more information, log on to 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 STATEMENTS OF
OPERATIONS
|
(Unaudited; in millions, except per share
amounts)
|
|
|
|
|
Three
Months Ended
|
|
|
|
March
31,
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
3,924
|
|
$
|
3,510
|
|
|
|
|
|
|
|
|
Operating
income
|
|
642
|
|
|
437
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(110)
|
|
|
(110)
|
|
|
Interest
income
|
|
2
|
|
|
2
|
|
|
Gain on
early extinguishment of debt
|
|
25
|
|
|
—
|
|
|
Other
items, net
|
|
12
|
|
|
9
|
Earnings before income taxes
|
|
571
|
|
|
338
|
|
|
|
|
|
|
|
|
|
Provision
for income taxes
|
|
(203)
|
|
|
(122)
|
|
|
Equity in
loss of investee companies, net of tax
|
|
(5)
|
|
|
(14)
|
Net
earnings
|
$
|
363
|
|
$
|
202
|
|
|
|
|
|
|
|
|
Basic
net earnings per common share
|
$
|
.56
|
|
$
|
.30
|
|
|
|
|
|
|
|
|
Diluted
net earnings per common share
|
$
|
.54
|
|
$
|
.29
|
|
|
|
|
|
|
|
|
Weighted average number of common shares
outstanding:
|
|
|
|
|
|
|
Basic
|
|
650
|
|
|
674
|
|
Diluted
|
|
667
|
|
|
693
|
|
|
|
|
|
|
|
|
Dividends per common share
|
$
|
.10
|
|
$
|
.05
|
CBS
CORPORATION AND SUBSIDIARIES
|
CONSOLIDATED BALANCE SHEETS
|
(Unaudited; in millions)
|
|
|
|
|
At
|
|
At
|
|
|
|
March
31, 2012
|
|
December 31, 2011
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
794
|
|
|
$
|
660
|
Receivables, net
|
|
3,332
|
|
|
|
3,254
|
Programming and other inventory
|
|
574
|
|
|
|
735
|
Prepaid
expenses and other current assets
|
|
1,083
|
|
|
|
894
|
|
|
Total
current assets
|
|
5,783
|
|
|
|
5,543
|
Property
and equipment
|
|
5,372
|
|
|
|
5,334
|
|
Less
accumulated depreciation and amortization
|
|
2,914
|
|
|
|
2,824
|
|
|
Net
property and equipment
|
|
2,458
|
|
|
|
2,510
|
Programming and other inventory
|
|
1,425
|
|
|
|
1,496
|
Goodwill
|
|
8,630
|
|
|
|
8,620
|
Intangible
assets
|
|
6,555
|
|
|
|
6,526
|
Other
assets
|
|
1,542
|
|
|
|
1,502
|
Total
Assets
|
$
|
26,393
|
|
|
$
|
26,197
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders'
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
$
|
339
|
|
|
$
|
410
|
Participants' share and royalties payable
|
|
892
|
|
|
|
938
|
Program
rights
|
|
784
|
|
|
|
577
|
Current
portion of long-term debt
|
|
22
|
|
|
|
24
|
Accrued
expenses and other current liabilities
|
|
2,113
|
|
|
|
1,984
|
|
|
Total
current liabilities
|
|
4,150
|
|
|
|
3,933
|
Long-term
debt
|
|
5,902
|
|
|
|
5,958
|
Other
liabilities
|
|
6,337
|
|
|
|
6,398
|
Total
Stockholders' Equity
|
|
10,004
|
|
|
|
9,908
|
Total
Liabilities and Stockholders' Equity
|
$
|
26,393
|
|
|
$
|
26,197
|
CBS
CORPORATION AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
(Unaudited; in millions)
|
|
|
|
Three
Months Ended
|
|
|
March
31,
|
|
|
|
2012
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
Operating Activities:
|
|
|
|
|
|
|
Net
earnings
|
$
|
363
|
|
|
$
|
202
|
Adjustments to reconcile net earnings to net cash
flow
|
|
|
|
|
|
|
|
provided
by operating activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
131
|
|
|
|
139
|
|
Stock-based compensation
|
|
42
|
|
|
|
34
|
|
Impairment
charges
|
|
11
|
|
|
|
—
|
|
Gain on
early extinguishment of debt
|
|
(25)
|
|
|
|
—
|
|
Equity in
loss of investee companies, net of tax and distributions
|
|
6
|
|
|
|
16
|
|
Change in
assets and liabilities, net of effects of acquisitions
|
|
118
|
|
|
|
503
|
Net
cash flow provided by operating activities
|
|
646
|
|
|
|
894
|
Investing Activities:
|
|
|
|
|
|
|
|
Acquisitions, net of cash acquired
|
|
(69)
|
|
|
|
(53)
|
|
Capital
expenditures
|
|
(39)
|
|
|
|
(41)
|
|
Investments in and advances to investee
companies
|
|
(34)
|
|
|
|
(26)
|
|
Proceeds
from dispositions
|
|
—
|
|
|
|
13
|
|
Other
investing activities
|
|
2
|
|
|
|
4
|
Net
cash flow used for investing activities
|
|
(140)
|
|
|
|
(103)
|
Financing Activities:
|
|
|
|
|
|
|
|
Proceeds
from issuance of notes
|
|
690
|
|
|
|
—
|
|
Repayment
of notes
|
|
(700)
|
|
|
|
(2)
|
|
Payment of
capital lease obligations
|
|
(5)
|
|
|
|
(4)
|
|
Payment of
contingent consideration
|
|
(33)
|
|
|
|
—
|
|
Dividends
|
|
(69)
|
|
|
|
(37)
|
|
Purchase
of Company common stock
|
|
(260)
|
|
|
|
(250)
|
|
Payment of
payroll taxes in lieu of issuing shares for stock-based
compensation
|
|
(87)
|
|
|
|
(46)
|
|
Proceeds
from exercise of stock options
|
|
36
|
|
|
|
10
|
|
Excess tax
benefit from stock-based compensation
|
|
56
|
|
|
|
35
|
|
Other
financing activities
|
|
—
|
|
|
|
(5)
|
Net
cash flow used for financing activities
|
|
(372)
|
|
|
|
(299)
|
Net
increase in cash and cash equivalents
|
|
134
|
|
|
|
492
|
Cash and
cash equivalents at beginning of period
|
|
660
|
|
|
|
480
|
Cash
and cash equivalents at end of period
|
$
|
794
|
|
|
$
|
972
|
CBS
CORPORATION AND SUBSIDIARIES
|
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP
FINANCIAL INFORMATION
|
(Unaudited; in millions)
|
|
Operating
Income (Loss) Before Depreciation and Amortization ("OIBDA") and
OIBDA Before Impairment Charges
|
|
The
following tables set forth the Company's OIBDA and OIBDA before
impairment charges for the three months ended March 31, 2012 and
OIBDA for the three months ended March 31, 2011. The Company
defines OIBDA as net earnings (loss) adjusted to exclude the
following line items presented in its Consolidated Statements of
Operations: Equity in earnings (loss) of investee companies, net of
tax; Provision for income taxes; Other items, net; Gain on early
extinguishment of debt; Interest income; Interest expense; and
Depreciation and amortization. The Company defines "OIBDA before
impairment charges" as OIBDA excluding impairment
charges.
|
|
The
Company uses OIBDA and OIBDA before impairment charges, as well as
OIBDA margin and OIBDA before impairment charges margin, 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 these measures are among the primary measures used by
management for planning and forecasting of future periods. These
measures are important indicators of the Company's operational
strength and performance of its business because they provide a
link between profitability and operating cash flow. The Company
believes the presentation of these measures is relevant and useful
for investors because they allow investors to view performance in a
manner similar to the method used by the Company's management, help
improve their ability to understand the Company's operating
performance and make it easier to compare the Company's results
with other companies that have different financing and capital
structures or tax rates. In addition, these measures are 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 and OIBDA before impairment charges are not measures of
performance calculated in accordance with accounting principles
generally accepted in the United States ("GAAP"), they 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 and OIBDA before impairment charges
exclude 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 OIBDA and OIBDA before impairment
charges to net earnings (loss), and OIBDA or OIBDA before
impairment charges for each segment to such segment's operating
income (loss), the most directly comparable amounts reported under
GAAP.
|
|
|
Three
Months Ended March 31, 2012
|
|
OIBDA
Before
Impairment
Charges
|
|
Depreciation
and Amortization
|
Impairment
Charges
|
Operating
Income/(Loss)
|
|
|
Entertainment
|
$
|
411
|
|
$
|
(41)
|
|
$
|
—
|
|
$
|
370
|
Cable
Networks
|
|
209
|
|
|
(5)
|
|
|
—
|
|
|
204
|
Publishing
|
|
10
|
|
|
(2)
|
|
|
—
|
|
|
8
|
|
|
Content
Group
|
|
630
|
|
|
(48)
|
|
|
—
|
|
|
582
|
Local
Broadcasting
|
|
171
|
|
|
(22)
|
|
|
(11)
|
|
|
138
|
Outdoor
|
|
53
|
|
|
(55)
|
|
|
—
|
|
|
(2)
|
|
|
Local
Group
|
|
224
|
|
|
(77)
|
|
|
(11)
|
|
|
136
|
Corporate
|
|
(58)
|
|
|
(6)
|
|
|
—
|
|
|
(64)
|
Residual
Costs
|
|
(12)
|
|
|
—
|
|
|
—
|
|
|
(12)
|
Eliminations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
$
|
784
|
|
$
|
(131)
|
|
$
|
(11)
|
|
$
|
642
|
|
Margin(a)
|
|
20%
|
|
|
|
|
|
|
|
|
16%
|
|
|
|
Three
Months Ended March 31, 2011
|
|
OIBDA
|
|
Depreciation
and Amortization
|
Impairment
Charges
|
Operating
Income/(Loss)
|
|
Entertainment
|
$
|
268
|
|
$
|
(38)
|
|
$
|
—
|
|
$
|
230
|
Cable
Networks
|
|
153
|
|
|
(6)
|
|
|
—
|
|
|
147
|
Publishing
|
|
7
|
|
|
(2)
|
|
|
—
|
|
|
5
|
|
|
Content
Group
|
|
428
|
|
|
(46)
|
|
|
—
|
|
|
382
|
Local
Broadcasting
|
|
169
|
|
|
(26)
|
|
|
—
|
|
|
143
|
Outdoor
|
|
49
|
|
|
(61)
|
|
|
—
|
|
|
(12)
|
|
|
Local
Group
|
|
218
|
|
|
(87)
|
|
|
—
|
|
|
131
|
Corporate
|
|
(52)
|
|
|
(6)
|
|
|
—
|
|
|
(58)
|
Residual
Costs
|
|
(19)
|
|
|
—
|
|
|
—
|
|
|
(19)
|
Eliminations
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Total
|
$
|
576
|
|
$
|
(139)
|
|
$
|
—
|
|
$
|
437
|
|
Margin(a)
|
|
16%
|
|
|
|
|
|
|
|
|
12%
|
|
|
|
|
Three
Months Ended March 31,
|
|
|
|
|
2012
|
|
|
2011
|
OIBDA
before impairment charges
|
$
|
784
|
|
$
|
576
|
|
|
Impairment
charges
|
|
(11)
|
|
|
—
|
Total
OIBDA
|
|
773
|
|
|
576
|
|
|
Depreciation and amortization
|
|
(131)
|
|
|
(139)
|
Operating
income
|
|
642
|
|
|
437
|
|
|
Interest
expense
|
|
(110)
|
|
|
(110)
|
|
|
Interest
income
|
|
2
|
|
|
2
|
|
|
Gain on
early extinguishment of debt
|
|
25
|
|
|
—
|
|
|
Other
items, net
|
|
12
|
|
|
9
|
Earnings
before income taxes
|
|
571
|
|
|
338
|
|
|
Provision
for income taxes
|
|
(203)
|
|
|
(122)
|
|
|
Equity in
loss of investee companies, net of tax
|
|
(5)
|
|
|
(14)
|
Net
earnings
|
$
|
363
|
|
$
|
202
|
(a) Margin
is defined as OIBDA, OIBDA before impairment charges or operating
income, as applicable, divided by revenues.
|
|
|
Free Cash
Flow
|
|
The
Company defines free cash flow as its net cash flow provided by
(used for) operating activities less capital expenditures.
The Company's calculation of free cash flow includes capital
expenditures since investment in capital expenditures is a use of
cash that is directly related to the Company's operations. The
Company's net cash flow provided by (used for) operating activities
is the most directly comparable GAAP financial measure.
|
|
Management
believes free cash flow provides investors with an important
perspective on the cash available to the Company 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 evaluate the cash generated from the Company's
underlying operations in a manner similar to the method used by
management. Free cash flow is one of several components of
incentive compensation targets for certain management
personnel. 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.
|
|
As free
cash flow is not a measure calculated in accordance with GAAP, free
cash flow should not be considered in isolation of, or as a
substitute for, either net cash flow provided by (used for)
operating activities as a measure of liquidity or net earnings
(loss) as a measure of operating performance. 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 as a measure of liquidity has certain limitations,
and 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. When comparing free cash flow
to net cash flow provided by (used for) 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 in free cash flow.
|
|
The
following table presents a reconciliation of the Company's net cash
flow provided by operating activities to free cash flow:
|
|
|
|
Three
Months Ended
|
|
March
31,
|
|
|
2012
|
|
|
|
2011
|
Net cash
flow provided by operating activities
|
$
|
646
|
|
|
$
|
894
|
Capital
expenditures
|
|
(39)
|
|
|
|
(41)
|
Free cash
flow
|
$
|
607
|
|
|
$
|
853
|
|
|
|
|
|
|
|
|
|
The
following table presents a summary of the Company's cash
flows:
|
|
|
Three
Months Ended
|
|
March
31,
|
|
|
2012
|
|
|
|
2011
|
Net cash
flow provided by operating activities
|
$
|
646
|
|
|
$
|
894
|
Net cash
flow used for investing activities
|
$
|
(140)
|
|
|
$
|
(103)
|
Net cash
flow used for financing activities
|
$
|
(372)
|
|
|
$
|
(299)
|
|
|
|
|
|
|
|
|
|
SOURCE CBS Corporation