NEW YORK, Feb. 14, 2019
/PRNewswire/ -- CBS Corporation (NYSE: CBS.A and CBS) today
reported results for the 2018 fourth quarter and full year,
including all-time highs in revenues, adjusted operating income,
and adjusted diluted earnings per share ("EPS") for both the
quarter and the year.
"CBS delivered our best-ever quarterly and full year results as
we continue to position our Company for even stronger long-term
growth," said Joe Ianniello,
President and Acting Chief Executive Officer, CBS Corporation. "Our
strategy of creating more of the premium content that audiences
want and making it available across new and traditional platforms
continues to pay off, driving quarterly increases in subscribers at
CBS and Showtime, both consecutively and year over year. In
addition, we are generating significant momentum with our
direct-to-consumer platforms, which provide a great return on
investment and represent one of our most powerful long-term growth
drivers. In fact, we have now reached 8 million direct-to-consumer
subscribers between CBS All Access and Showtime, nearly two
years ahead of our original schedule. As a result, we have set a
new target of 25 million domestic subs combined from both of these
direct-to-consumer services by 2022. All of this success is fueled
by the must-have programming we have from across our key
established content brands. Once again, the CBS Television Network
is #1 in viewers, and thanks to the strength of our entertainment
lineup and marquee sporting events, we are confident we will end
the season as the most-watched network for the 11th
consecutive year. At Showtime, we are growing our audience with our
year-round lineup of buzzworthy original series, from
Shameless and Ray
Donovan to Billions and The Chi, as well
as our premier boxing events. So we are set for another great year
in 2019 as we continue to distinguish ourselves as a global
multiplatform premium content company and steer our strategic focus
toward scaling our direct-to-consumer subscribers."
Fourth Quarter 2018 Results
Revenues for the fourth quarter of 2018 increased 3% to
$4.02 billion from $3.92 billion for the fourth quarter of 2017.
Advertising revenues increased 7%, driven by record political
advertising sales from the 2018 midterm elections, and the growth
was achieved despite the absence of Thursday Night Football,
which was broadcast by the CBS Television Network in 2017.
Affiliate and subscription fee revenues were up 11%, led by 53%
growth in the Company's direct-to-consumer streaming services and
increases in retransmission revenues, fees from CBS Television
Network affiliated stations, and revenues from virtual MVPDs.
Content licensing and distribution revenues decreased 11%, mainly
as a result of the timing of international licensing sales and
several large domestic sales that occurred in the fourth quarter of
2017.
Operating income for the fourth quarter of 2018 decreased 10% to
$647 million from $716 million for the same prior-year period and
included costs for restructuring and other corporate matters as
well as programming charges, which affected the comparability of
results. Adjusted operating income was up 10% to $837 million from $760
million for the fourth quarter of 2017, reflecting higher
revenues in 2018 and lower programming costs associated with the
absence of Thursday Night Football. Operating income also
included an increased investment in content and digital
initiatives.
Net earnings from continuing operations were $561 million for the fourth quarter of 2018
compared with $40 million for the
fourth quarter of 2017. Comparability was affected by the
aforementioned discrete items as well as a tax benefit in 2018 from
the reversal of a valuation allowance and charges in 2017 for a
pension settlement and the enactment of new federal tax legislation
in December 2017. Adjusted net
earnings from continuing operations increased 24% to $565 million from $455
million for the fourth quarter of 2017. This increase was
led by the higher adjusted operating income and a lower effective
income tax rate in 2018 compared with the prior year, as a result
of the aforementioned tax legislation.
Diluted EPS from continuing operations for the fourth quarter of
2018 was $1.49 compared with
$.10 for the same quarter in 2017.
Adjusted diluted EPS grew 25% to $1.50 from $1.20,
driven by higher earnings and lower weighted average shares
outstanding.
Details of the discrete items excluded from financial results
and reconciliations of adjusted results to their most directly
comparable GAAP financial measures are included at the end of this
earnings release.
Cash Flow
For the fourth quarter of 2018, operating cash flow from
continuing operations was $246
million compared with an outflow of $142 million for the fourth quarter of 2017,
which included a discretionary contribution of $500 million to prefund the Company's qualified
pension plans. For the full year, operating cash flow from
continuing operations was $1.43
billion for 2018 compared with $793
million for 2017, which included discretionary contributions
of $600 million to prefund the
Company's qualified pension plans. Adjusted free cash flow was
$180 million for the fourth quarter
of 2018 compared with $102 million
for the same prior-year period, and for the full year, it was
$1.26 billion for 2018, up 27% from
$989 million in 2017. The increase
for the full year was driven by lower cash payments for income
taxes in 2018 and growth in affiliate and subscription fees, which
were partially offset by a higher investment in content. During the
quarter, the Company repurchased 2.1 million of its shares for
$100 million, and for the full year,
the Company repurchased 11.5 million of its shares for $600 million.
Full Year 2018 Results
Full year 2018 revenues increased 6% to $14.51 billion from $13.69
billion in 2017, reflecting growth across each of the
Company's main revenue streams. Advertising revenues grew 8%,
driven by a record year for political advertising sales in 2018 and
Network 10, which was acquired in the fourth quarter of 2017. These
increases were partially offset by the absence of the National
Semifinals and National Championship games of the NCAA Division
I Men's Basketball Championship ("NCAA Tournament") and five
Thursday Night Football games, which were broadcast by the
CBS Television Network in 2017. Content licensing and distribution
revenues increased 3%. Affiliate and subscription fees were up 7%,
driven by 62% growth from the Company's direct-to-consumer
streaming services and increases in retransmission revenues, fees
from CBS Television Network affiliated stations, and revenues from
virtual MVPDs. These increases were partially offset by Showtime
Networks' distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event in
2017.
Operating income decreased 3% to $2.77
billion for 2018 from $2.86
billion for 2017. Operating income included costs for
restructuring and other corporate matters as well as programming
charges, which affected comparability. Adjusted operating income
increased 5% to $3.05 billion in 2018
from $2.91 billion in 2017. The
growth principally reflects the higher revenues, which were
partially offset by an increased investment in content and the
expansion of the Company's digital initiatives.
Net earnings from continuing operations increased 50% to
$1.96 billion for 2018 from
$1.31 billion for 2017. Comparability
was affected by the aforementioned discrete items as well as a tax
benefit in 2018 from the reversal of a valuation allowance and
charges in 2017 associated with a pension settlement and the
enactment of new federal tax legislation. Adjusted net earnings
from continuing operations increased 16% to $1.98 billion for 2018 from $1.71 billion, driven by the growth in adjusted
operating income and a lower effective income tax rate in 2018.
Diluted EPS from continuing operations increased 60% to
$5.14 for 2018 from $3.22 for 2017. Adjusted diluted EPS grew 18% to
$5.19 for 2018 from $4.40 in 2017. The increase was driven by the
higher earnings and lower weighted average shares outstanding.
Details of the discrete items excluded from financial results
and reconciliations of adjusted results to their most directly
comparable GAAP financial measures are included at the end of this
earnings release.
Consolidated and Segment Results (dollars in
millions)
The tables below present the Company's revenues by segment and
type; segment operating income (loss) and depreciation and
amortization by segment for the three and twelve months ended
December 31, 2018, and 2017. CBS Sports Network, which was
previously included in the Cable Networks segment, is now presented
within the Entertainment segment. Results for all periods presented
have been reclassified to conform to this presentation.
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
Revenues by
Segment
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Entertainment
|
$
|
2,833
|
|
|
$
|
2,856
|
|
|
$
|
10,178
|
|
|
$
|
9,306
|
|
Cable
Networks
|
551
|
|
|
508
|
|
|
2,204
|
|
|
2,355
|
|
Publishing
|
218
|
|
|
235
|
|
|
825
|
|
|
830
|
|
Local
Media
|
561
|
|
|
450
|
|
|
1,830
|
|
|
1,668
|
|
Corporate/Eliminations
|
(139)
|
|
|
(128)
|
|
|
(523)
|
|
|
(467)
|
|
Total
Revenues
|
$
|
4,024
|
|
|
$
|
3,921
|
|
|
$
|
14,514
|
|
|
$
|
13,692
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
Revenues by
Type
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Advertising
|
$
|
1,872
|
|
|
$
|
1,745
|
|
|
$
|
6,195
|
|
|
$
|
5,753
|
|
Content licensing and
distribution
|
1,057
|
|
|
1,191
|
|
|
4,081
|
|
|
3,952
|
|
Affiliate and
subscription fees
|
1,027
|
|
|
923
|
|
|
4,003
|
|
|
3,758
|
|
Other
|
68
|
|
|
62
|
|
|
235
|
|
|
229
|
|
Total
Revenues
|
$
|
4,024
|
|
|
$
|
3,921
|
|
|
$
|
14,514
|
|
|
$
|
13,692
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
Segment Operating
Income (Loss)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Entertainment
|
$
|
438
|
|
|
$
|
465
|
|
|
$
|
1,675
|
|
|
$
|
1,578
|
|
Cable
Networks
|
193
|
|
|
207
|
|
|
915
|
|
|
999
|
|
Publishing
|
46
|
|
|
45
|
|
|
144
|
|
|
136
|
|
Local
Media
|
239
|
|
|
139
|
|
|
609
|
|
|
497
|
|
Corporate
|
(79)
|
|
|
(96)
|
|
|
(295)
|
|
|
(305)
|
|
Adjusted Operating
Income
|
837
|
|
|
760
|
|
|
3,048
|
|
|
2,905
|
|
Restructuring and
other corporate matters
|
(105)
|
|
|
(63)
|
|
|
(195)
|
|
|
(63)
|
|
Programming
charges
|
(85)
|
|
|
—
|
|
|
(85)
|
|
|
—
|
|
Other operating
items, net
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
Total Operating
Income
|
$
|
647
|
|
|
$
|
716
|
|
|
$
|
2,768
|
|
|
$
|
2,861
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
Depreciation and
Amortization
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Entertainment
|
$
|
31
|
|
|
$
|
31
|
|
|
$
|
125
|
|
|
$
|
118
|
|
Cable
Networks
|
4
|
|
|
5
|
|
|
18
|
|
|
20
|
|
Publishing
|
2
|
|
|
1
|
|
|
6
|
|
|
6
|
|
Local
Media
|
10
|
|
|
11
|
|
|
43
|
|
|
45
|
|
Corporate
|
8
|
|
|
9
|
|
|
31
|
|
|
34
|
|
Total Depreciation
and Amortization
|
$
|
55
|
|
|
$
|
57
|
|
|
$
|
223
|
|
|
$
|
223
|
|
Entertainment (CBS Television Network, CBS Television
Studios, CBS Global Distribution Group, Network 10, CBS
Interactive, CBS Sports Network, and CBS Films)
Entertainment revenues of $2.83
billion for the fourth quarter of 2018 decreased 1% from
$2.86 billion for the same prior-year
period, reflecting 14% lower content licensing and distribution
revenues, mainly as a result of the timing of international
licensing sales and several large domestic sales in the fourth
quarter of 2017. Affiliate and subscription fees grew 17%, led by
growth from CBS All Access and higher revenues from station
affiliation fees and virtual MVPDs. Advertising revenues increased
2%, reflecting revenues from Network 10, which was acquired in the
fourth quarter of 2017. This increase was partially offset by the
absence of the broadcast of Thursday Night Football in 2018.
Underlying CBS Network advertising for the fourth quarter of 2018
increased 2% from last year's fourth quarter.
Entertainment operating income of $438
million for the fourth quarter of 2018 decreased 6% from
$465 million for the same prior-year
period, primarily reflecting the lower revenues and an increased
investment in content and digital initiatives. These decreases were
partially offset by the absence of programming costs associated
with Thursday Night Football.
Cable Networks (Showtime Networks and Smithsonian
Networks)
Cable Networks revenues of $551
million for the fourth quarter of 2018 increased 8% from
$508 million for the same prior-year
period, driven by growth from the Showtime subscription
streaming service, higher international licensing sales, and
revenues from the Deontay Wilder/Tyson
Fury pay-per-view boxing event in December 2018.
Cable Networks operating income of $193
million for the fourth quarter of 2018 decreased 7% from
$207 million for the same prior-year
period, reflecting an increased investment in programming.
Publishing (Simon & Schuster)
Publishing revenues of $218
million for the fourth quarter of 2018 decreased 7% from
$235 million for the same prior-year
period, reflecting lower print book sales. Bestselling titles for
the fourth quarter of 2018 included Elevation by
Stephen King and Queen of Air and
Darkness by Cassandra Clare.
Publishing operating income of $46
million for the fourth quarter of 2018 increased 2% from
$45 million for the same prior-year
period, reflecting lower production costs.
Local Media (CBS Television Stations and CBS
Local Digital Media)
Local Media revenues grew 25% to $561
million for the fourth quarter of 2018 from $450 million for the same quarter in 2017. The
growth was driven by higher advertising revenues, reflecting record
political advertising sales from the U.S. midterm elections, and
11% growth in retransmission and subscription fees.
Local Media operating income for the fourth quarter of 2018 of
$239 million increased 72% from
$139 million for the same prior-year
period, mainly as a result of the higher revenues.
Corporate
Corporate expenses for the fourth quarter of 2018 decreased 18%
to $79 million from $96 million for the same prior-year period,
primarily reflecting lower executive compensation costs.
Adoption of New Accounting Standards
During the first quarter of 2018, the Company adopted two new
accounting standards. Changes from these standards include the
presentation of net periodic pension and postretirement benefit
costs on the statement of operations; the recognition of revenue
from the renewal of license agreements at the beginning of the
license periods rather than upon execution of such agreements; and
the presentation of revenues from the distribution of third-party
content at the gross amount received from the customer, with a
corresponding increase to operating expenses. For more information
regarding the effects of these accounting changes, refer to the
Company's annual report on Form 10-K for the year ended
December 31, 2018.
About CBS Corporation:
CBS Corporation (NYSE: CBS.A
and CBS) is a mass media company that creates and distributes
industry-leading content across a variety of platforms to audiences
around the world. The Company has businesses with origins that date
back to the dawn of the broadcasting age as well as new ventures
that operate on the leading edge of media. CBS owns the
most-watched television network in the U.S. and one of the world's
largest libraries of entertainment content, making its brand - "the
Eye" - one of the most recognized in business. The Company's
operations span virtually every field of media and entertainment,
including cable, publishing, local TV, film, and interactive and
socially responsible media. CBS' businesses include CBS Television
Network, The CW (a joint venture between CBS Corporation and Warner
Bros. Entertainment), Network 10 Australia, CBS Television Studios,
CBS Global Distribution Group, CBS Consumer Products, CBS Home
Entertainment, CBS Interactive, CBS Sports Network, CBS Films,
Showtime Networks, Pop (a joint venture between CBS Corporation and
Lionsgate), Smithsonian Networks, Simon & Schuster, CBS
Television Stations, CBS EcoMedia, and CBS Experiences. For more
information, go 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, including the Company's expectations concerning its
revenues and EPS. 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: changes in the public acceptance of the
Company's content; advertising market conditions generally; changes
in technology and its effect on competition in the Company's
markets; changes in the federal communications laws and
regulations; increased programming costs and investments; the
impact of piracy on the Company's products; the impact of the
consolidation in the market for the Company's content; the impact
of negotiations or the loss of affiliation agreements or
retransmission agreements; the outcomes of investigation-related
legal actions, which are inherently unpredictable, and any
associated costs; the uncertainties arising from leadership changes
at the Company; the impact of union activity, including possible
strikes or work stoppages or the Company's inability to negotiate
favorable terms for contract renewals; other domestic and global
economic, business, competitive, technological and/or other
regulatory factors affecting the Company's businesses generally;
and other factors described in the Company's filings with the U.S.
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 we do not undertake 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
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
4,024
|
|
|
$
|
3,921
|
|
|
$
|
14,514
|
|
|
$
|
13,692
|
|
Operating
income
|
647
|
|
|
716
|
|
|
2,768
|
|
|
2,861
|
|
Interest
expense
|
(118)
|
|
|
(121)
|
|
|
(467)
|
|
|
(457)
|
|
Interest
income
|
14
|
|
|
19
|
|
|
57
|
|
|
64
|
|
Loss on early
extinguishment of debt
|
—
|
|
|
(44)
|
|
|
—
|
|
|
(49)
|
|
Pension settlement
charge
|
—
|
|
|
(352)
|
|
|
—
|
|
|
(352)
|
|
Other items,
net
|
(17)
|
|
|
(32)
|
|
|
(69)
|
|
|
(88)
|
|
Earnings from
continuing operations before income taxes
|
526
|
|
|
186
|
|
|
2,289
|
|
|
1,979
|
|
Benefit (provision)
for income taxes
|
39
|
|
|
(154)
|
|
|
(273)
|
|
|
(633)
|
|
Equity in earnings
(loss) of investee companies, net of tax
|
(4)
|
|
|
8
|
|
|
(56)
|
|
|
(37)
|
|
Net earnings from
continuing operations
|
561
|
|
|
40
|
|
|
1,960
|
|
|
1,309
|
|
Net loss from
discontinued operations, net of tax
|
—
|
|
|
(81)
|
|
|
—
|
|
|
(952)
|
|
Net earnings
(loss)
|
$
|
561
|
|
|
$
|
(41)
|
|
|
$
|
1,960
|
|
|
$
|
357
|
|
|
|
|
|
|
|
|
|
Basic net earnings
(loss) per common share:
|
|
|
|
|
|
|
|
Net earnings from
continuing operations
|
$
|
1.50
|
|
|
$
|
.10
|
|
|
$
|
5.20
|
|
|
$
|
3.26
|
|
Net loss from
discontinued operations
|
$
|
—
|
|
|
$
|
(.21)
|
|
|
$
|
—
|
|
|
$
|
(2.37)
|
|
Net earnings
(loss)
|
$
|
1.50
|
|
|
$
|
(.10)
|
|
|
$
|
5.20
|
|
|
$
|
.89
|
|
|
|
|
|
|
|
|
|
Diluted net
earnings (loss) per common share:
|
|
|
|
|
|
|
|
Net earnings from
continuing operations
|
$
|
1.49
|
|
|
$
|
.10
|
|
|
$
|
5.14
|
|
|
$
|
3.22
|
|
Net loss from
discontinued operations
|
$
|
—
|
|
|
$
|
(.21)
|
|
|
$
|
—
|
|
|
$
|
(2.34)
|
|
Net earnings
(loss)
|
$
|
1.49
|
|
|
$
|
(.10)
|
|
|
$
|
5.14
|
|
|
$
|
.88
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
374
|
|
|
391
|
|
|
377
|
|
|
401
|
|
Diluted
|
377
|
|
|
395
|
|
|
381
|
|
|
407
|
|
CBS CORPORATION
AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
(Unaudited; in
millions)
|
|
|
At
|
|
|
At
|
|
|
December 31,
2018
|
|
December 31,
2017
|
Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
322
|
|
|
|
|
$
|
285
|
|
|
Receivables,
net
|
|
4,041
|
|
|
|
|
3,697
|
|
|
Programming and other
inventory
|
|
1,988
|
|
|
|
|
1,828
|
|
|
Prepaid expenses and
other current assets
|
|
401
|
|
|
|
|
463
|
|
|
Total current
assets
|
|
6,752
|
|
|
|
|
6,273
|
|
|
Property and
equipment
|
|
2,926
|
|
|
|
|
2,947
|
|
|
Less accumulated
depreciation and amortization
|
|
1,717
|
|
|
|
|
1,701
|
|
|
Net property and
equipment
|
|
1,209
|
|
|
|
|
1,246
|
|
|
Programming and other
inventory
|
|
3,883
|
|
|
|
|
2,881
|
|
|
Goodwill
|
|
4,920
|
|
|
|
|
4,891
|
|
|
Intangible
assets
|
|
2,638
|
|
|
|
|
2,666
|
|
|
Other
assets
|
|
2,424
|
|
|
|
|
2,852
|
|
|
Assets held for
sale
|
|
33
|
|
|
|
|
34
|
|
|
Total
Assets
|
|
$
|
21,859
|
|
|
|
|
$
|
20,843
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
201
|
|
|
|
|
$
|
231
|
|
|
Participants' share
and royalties payable
|
|
1,177
|
|
|
|
|
986
|
|
|
Accrued programming
and production costs
|
|
704
|
|
|
|
|
497
|
|
|
Commercial
paper
|
|
674
|
|
|
|
|
679
|
|
|
Current portion of
long-term debt
|
|
13
|
|
|
|
|
19
|
|
|
Accrued expenses and
other current liabilities
|
|
1,804
|
|
|
|
|
1,560
|
|
|
Total current
liabilities
|
|
4,573
|
|
|
|
|
3,972
|
|
|
Long-term
debt
|
|
9,465
|
|
|
|
|
9,464
|
|
|
Other
liabilities
|
|
5,017
|
|
|
|
|
5,429
|
|
|
Stockholders'
Equity
|
|
2,804
|
|
|
|
|
1,978
|
|
|
Total Liabilities and
Stockholders' Equity
|
|
$
|
21,859
|
|
|
|
|
$
|
20,843
|
|
|
CBS CORPORATION
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Unaudited; in
millions)
|
|
|
Twelve Months
Ended
|
|
December
31,
|
|
|
2018
|
|
|
|
2017
|
|
Operating
Activities:
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
|
1,960
|
|
|
|
|
$
|
357
|
|
|
Less: Net loss from
discontinued operations, net of tax
|
|
—
|
|
|
|
|
(952)
|
|
|
Net earnings from
continuing operations
|
|
1,960
|
|
|
|
|
1,309
|
|
|
Adjustments to
reconcile net earnings from continuing operations to net cash
flow provided by
operating activities from continuing operations:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
223
|
|
|
|
|
223
|
|
|
Stock-based
compensation
|
|
146
|
|
|
|
|
179
|
|
|
Net loss (gain) on
disposition and write-down of assets
|
|
1
|
|
|
|
|
(9)
|
|
|
Equity in loss of
investee companies, net of tax and distributions
|
|
58
|
|
|
|
|
38
|
|
|
Change in assets and
liabilities, net of investing and financing activities
|
|
(963)
|
|
|
|
|
(947)
|
|
|
Net cash flow
provided by operating activities from continuing
operations
|
|
1,425
|
|
|
|
|
793
|
|
|
Net cash flow
provided by operating activities from discontinued
operations
|
|
1
|
|
|
|
|
94
|
|
|
Net cash flow
provided by operating activities
|
|
1,426
|
|
|
|
|
887
|
|
|
Investing
Activities:
|
|
|
|
|
|
|
|
Investments in and
advances to investee companies
|
|
(124)
|
|
|
|
|
(110)
|
|
|
Capital
expenditures
|
|
(165)
|
|
|
|
|
(185)
|
|
|
Acquisitions
(including acquired television library), net of cash
acquired
|
|
(31)
|
|
|
|
|
(270)
|
|
|
Proceeds from sale of
investments
|
|
—
|
|
|
|
|
10
|
|
|
Proceeds from
dispositions
|
|
—
|
|
|
|
|
11
|
|
|
Other investing
activities
|
|
(5)
|
|
|
|
|
21
|
|
|
Net cash flow used
for investing activities from continuing operations
|
|
(325)
|
|
|
|
|
(523)
|
|
|
Net cash flow used
for investing activities from discontinued operations
|
|
(23)
|
|
|
|
|
(24)
|
|
|
Net cash flow used
for investing activities
|
|
(348)
|
|
|
|
|
(547)
|
|
|
Financing
Activities:
|
|
|
|
|
|
|
|
(Repayments of)
proceeds from short-term debt borrowings, net
|
|
(5)
|
|
|
|
|
229
|
|
|
Proceeds from
issuance of senior notes
|
|
—
|
|
|
|
|
1,773
|
|
|
Repayment of senior
notes
|
|
—
|
|
|
|
|
(1,244)
|
|
|
Proceeds from debt
borrowings of CBS Radio
|
|
—
|
|
|
|
|
40
|
|
|
Repayment of debt
borrowings of CBS Radio
|
|
—
|
|
|
|
|
(43)
|
|
|
Payment of capital
lease obligations
|
|
(16)
|
|
|
|
|
(18)
|
|
|
Dividends
|
|
(276)
|
|
|
|
|
(296)
|
|
|
Purchase of Company
common stock
|
|
(586)
|
|
|
|
|
(1,111)
|
|
|
Payment of payroll
taxes in lieu of issuing shares for stock-based
compensation
|
|
(59)
|
|
|
|
|
(89)
|
|
|
Proceeds from
exercise of stock options
|
|
27
|
|
|
|
|
91
|
|
|
Other financing
activities
|
|
(6)
|
|
|
|
|
(9)
|
|
|
Net cash flow used
for financing activities
|
|
(921)
|
|
|
|
|
(677)
|
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
|
157
|
|
|
|
|
(337)
|
|
|
Cash and cash
equivalents at beginning of year
(includes $24 (2017)
of discontinued operations cash)
|
|
285
|
|
|
|
|
622
|
|
|
Cash, cash
equivalents and restricted cash at end of year
(includes $120 (2018)
of restricted cash)
|
|
$
|
442
|
|
|
|
|
$
|
285
|
|
|
CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL
DISCLOSURES REGARDING NON-GAAP FINANCIAL
INFORMATION
(Unaudited; in millions)
Adjusted Operating Income and Segment Operating Income
The following tables set forth the Company's Adjusted Operating
Income for the three and twelve months ended December 31, 2018
and 2017. The Company defines "Adjusted Operating Income" as
operating income excluding costs for restructuring and other
corporate matters, programming charges, and other operating items,
net, each where applicable. For each individual reportable segment
Adjusted Operating Income is also known as "Segment Operating
Income." The Company presents Segment Operating Income as the
primary measure of profit and loss for its reportable segments in
accordance with Financial Accounting Standards Board ("FASB")
guidance for segment reporting.
The Company uses Adjusted Operating Income (or Segment Operating
Income for each segment), as well as Adjusted Operating Income
Margin, to, among other things, evaluate the Company's operating
performance, to value prospective acquisitions and as one of
several components of incentive compensation targets for certain
management personnel. These measures are among the primary measures
used by management for planning and forecasting of future periods,
and they are important indicators of the Company's operational
strength and business performance. The Company believes these
measures are 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 investors'
understanding of the Company's operating performance, and make it
easier for investors to compare the Company's results with other
companies that have different financing and capital structures or
tax rates. In addition, these are among the primary measures used
externally by the Company's investors, analysts and industry peers
for purposes of valuation and for the comparison of the Company's
operating performance to other companies in its industry, and to
compare the Company's year-over-year results.
Because Adjusted Operating Income is a measure of performance
not 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, operating income or net earnings (loss) as an
indicator of operating performance. Adjusted Operating Income, 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 Adjusted Operating Income
excludes certain financial information that is included in
operating income and net earnings (loss), the most directly
comparable GAAP financial measures, users of this financial
information should consider the types of events and transactions
which are excluded. The Company provides the following
reconciliation of Adjusted Operating Income to operating income and
net earnings (loss).
CBS CORPORATION
AND SUBSIDIARIES
|
SUPPLEMENTAL
DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(continued)
|
(Unaudited; in
millions)
|
|
|
Three Months Ended
December 31,
|
|
2018
|
|
2017
|
Adjusted operating
income
|
|
$
|
837
|
|
|
|
|
$
|
760
|
|
|
Restructuring and
other corporate matters
|
|
(105)
|
|
|
|
|
(63)
|
|
|
Programming
charges
|
|
(85)
|
|
|
|
|
—
|
|
|
Other operating
items, net
|
|
—
|
|
|
|
|
19
|
|
|
Operating
income
|
|
647
|
|
|
|
|
716
|
|
|
Interest
expense
|
|
(118)
|
|
|
|
|
(121)
|
|
|
Interest
income
|
|
14
|
|
|
|
|
19
|
|
|
Loss on early
extinguishment of debt
|
|
—
|
|
|
|
|
(44)
|
|
|
Pension settlement
charge
|
|
—
|
|
|
|
|
(352)
|
|
|
Other items,
net
|
|
(17)
|
|
|
|
|
(32)
|
|
|
Earnings from
continuing operations before income taxes
|
|
526
|
|
|
|
|
186
|
|
|
Benefit (provision)
for income taxes
|
|
39
|
|
|
|
|
(154)
|
|
|
Equity in earnings
(loss) of investee companies, net of tax
|
|
(4)
|
|
|
|
|
8
|
|
|
Net earnings from
continuing operations
|
|
561
|
|
|
|
|
40
|
|
|
Net loss from
discontinued operations, net of tax
|
|
—
|
|
|
|
|
(81)
|
|
|
Net earnings
(loss)
|
|
$
|
561
|
|
|
|
|
$
|
(41)
|
|
|
|
|
|
Twelve Months
Ended December 31,
|
|
2018
|
|
2017
|
Adjusted operating
income
|
|
$
|
3,048
|
|
|
|
|
$
|
2,905
|
|
|
Restructuring and
other corporate matters
|
|
(195)
|
|
|
|
|
(63)
|
|
|
Programming
charges
|
|
(85)
|
|
|
|
|
—
|
|
|
Other operating
items, net
|
|
—
|
|
|
|
|
19
|
|
|
Operating
income
|
|
2,768
|
|
|
|
|
2,861
|
|
|
Interest
expense
|
|
(467)
|
|
|
|
|
(457)
|
|
|
Interest
income
|
|
57
|
|
|
|
|
64
|
|
|
Loss on early
extinguishment of debt
|
|
—
|
|
|
|
|
(49)
|
|
|
Pension settlement
charge
|
|
—
|
|
|
|
|
(352)
|
|
|
Other items,
net
|
|
(69)
|
|
|
|
|
(88)
|
|
|
Earnings from
continuing operations before income taxes
|
|
2,289
|
|
|
|
|
1,979
|
|
|
Provision for income
taxes
|
|
(273)
|
|
|
|
|
(633)
|
|
|
Equity in loss of
investee companies, net of tax
|
|
(56)
|
|
|
|
|
(37)
|
|
|
Net earnings from
continuing operations
|
|
1,960
|
|
|
|
|
1,309
|
|
|
Net loss from
discontinued operations, net of tax
|
|
—
|
|
|
|
|
(952)
|
|
|
Net
earnings
|
|
$
|
1,960
|
|
|
|
|
$
|
357
|
|
|
CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL
DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(continued)
(Unaudited; in millions)
Free Cash Flow and Adjusted Free Cash Flow
The Company defines free cash flow as net cash flow provided by
(used for) operating activities before operating cash flow from
discontinued operations, and less capital expenditures; and
adjusted free cash flow as net cash flow provided by (used for)
operating activities before operating cash flow from discontinued
operations and discretionary contributions to prefund the Company's
pension plans, and less capital expenditures. The Company's
calculations of free cash flow and adjusted free cash flow include
capital expenditures because investment in capital expenditures is
a use of cash that is directly related to the Company's operations.
Adjusted free cash flow excludes discretionary contributions to
prefund the Company's pension plans because management assesses the
Company's ability to generate operating cash flows without
considering the impact from discretionary pension contributions,
and decisions regarding the timing of pension plan funding are not
dependent on the level of operating cash flows generated during the
period. 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 and adjusted free cash flow
provide 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 and adjusted free cash
flow are significant measures 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 and adjusted 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 and adjusted free cash flow are among several
components of incentive compensation targets for certain management
personnel. In addition, free cash flow and adjusted free cash flow
are primary measures used externally by the Company's investors,
analysts and industry peers for purposes of valuation and
comparison of the Company's operating performance to other
companies in its industry.
As free cash flow and adjusted free cash flow are not measures
calculated in accordance with GAAP, free cash flow and adjusted
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 and
adjusted free cash flow, as the Company calculates them, may not be
comparable to similarly titled measures employed by other
companies. In addition, free cash flow and adjusted free cash flow
as measures of liquidity have certain limitations, do
not necessarily represent funds available for discretionary
use, and are not necessarily measures of the Company's ability to
fund its cash needs. When comparing free cash flow and adjusted
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 that are not reflected in free cash flow or
adjusted free cash flow.
CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL
DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(continued)
(Unaudited; in millions)
The following table presents a reconciliation of the Company's
net cash flow provided by (used for) operating activities to free
cash flow and adjusted free cash flow:
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net cash flow
provided by (used for) operating activities
|
$
|
246
|
|
|
$
|
(100)
|
|
|
$
|
1,426
|
|
|
$
|
887
|
|
Capital
expenditures
|
(66)
|
|
|
(73)
|
|
|
(165)
|
|
|
(185)
|
|
Less: Operating cash
flow from discontinued operations
|
—
|
|
|
42
|
|
|
1
|
|
|
94
|
|
Free cash
flow
|
180
|
|
|
(215)
|
|
|
1,260
|
|
|
608
|
|
Less: Discretionary
pension plan contributions, net of tax
|
—
|
|
|
(317)
|
|
|
—
|
|
|
(381)
|
|
Adjusted free cash
flow
|
$
|
180
|
|
|
$
|
102
|
|
|
$
|
1,260
|
|
|
$
|
989
|
|
The following table presents a summary of the Company's cash
flows:
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net cash flow
provided by (used for) operating activities
|
$
|
246
|
|
|
$
|
(100)
|
|
|
$
|
1,426
|
|
|
$
|
887
|
|
Net cash flow used
for investing activities
|
$
|
(129)
|
|
|
$
|
(130)
|
|
|
$
|
(348)
|
|
|
$
|
(547)
|
|
Net cash flow
provided by (used for) financing activities
|
$
|
143
|
|
|
$
|
341
|
|
|
$
|
(921)
|
|
|
$
|
(677)
|
|
CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL
DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(continued)
(Unaudited; in millions, except per share
amounts)
2018 and 2017 Adjusted Results
The following tables reconcile adjusted financial results to their
most directly comparable GAAP financial measures. 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; provides a clearer perspective on
the underlying performance of the Company; and makes it easier for
investors, analysts, and peers to compare the Company's operating
performance to other companies in its industry and to compare the
Company's year-over-year results.
|
Three Months Ended
December 31, 2018
|
|
Reported
|
Restructuring
and Other
Corporate
Matters (a)
|
|
Programming
Charges (b)
|
|
Tax
Items
(c)
|
|
Adjusted
|
|
Revenues
|
$
|
4,024
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
$
|
4,024
|
|
|
Operating
income
|
$
|
647
|
|
|
$
|
105
|
|
|
|
|
$
|
85
|
|
|
|
|
$
|
—
|
|
|
|
$
|
837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
margin (d)
|
16
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
21
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(118)
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
(118)
|
|
|
Interest
income
|
14
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
14
|
|
|
Other items,
net
|
(17)
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
(17)
|
|
|
Earnings before
income taxes
|
526
|
|
|
105
|
|
|
|
|
85
|
|
|
|
|
—
|
|
|
|
716
|
|
|
Benefit (provision)
for income taxes
|
39
|
|
|
(25)
|
|
|
|
|
(21)
|
|
|
|
|
(140)
|
|
|
|
(147)
|
|
|
Effective income tax
rate
|
(7.4)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
20.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in loss of
investee companies, net of tax
|
(4)
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
(4)
|
|
|
Net
earnings
|
$
|
561
|
|
|
$
|
80
|
|
|
|
|
$
|
64
|
|
|
|
|
$
|
(140)
|
|
|
|
$
|
565
|
|
|
Diluted
EPS
|
$
|
1.49
|
|
|
$
|
.21
|
|
|
|
|
$
|
.17
|
|
|
|
|
$
|
(.37)
|
|
|
|
$
|
1.50
|
|
|
Diluted weighted
average number of
common shares
outstanding
|
377
|
|
|
|
|
|
|
|
|
|
|
|
|
|
377
|
|
|
|
|
(a)
|
Primarily reflects
restructuring charges of $42 million ($31 million, net of tax) at
Entertainment, Local Media and Corporate, primarily for the
reorganization and closure of certain business operations, and
professional fees and other costs associated with corporate
matters.
|
(b)
|
Reflects charges
resulting from the implementation of changes to the Company's
programming strategy, primarily at CBS Films.
|
(c)
|
Reflects the reversal
of a valuation allowance relating to capital loss carryforwards
that will be utilized in connection with the sale of CBS Television
City in the first quarter of 2019.
|
(d)
|
Operating income
margin is defined as operating income or Adjusted Operating Income
divided by revenues.
|
CBS CORPORATION
AND SUBSIDIARIES
|
SUPPLEMENTAL
DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(continued)
|
(Unaudited; in
millions, except per share amounts)
|
|
|
Three Months Ended
December 31, 2017
|
|
Reported
|
|
Pension
Settlement
Charge
(a)
|
|
Restructuring
Charges (b)
|
|
Tax
Items (c)
|
|
Other
(d)
|
Discontinued
Operations
Items (e)
|
|
Adjusted
|
|
Revenues
|
$
|
3,921
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
3,921
|
|
|
Operating
income
|
$
|
716
|
|
|
$
|
—
|
|
|
|
$
|
63
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
(19)
|
|
|
|
$
|
—
|
|
|
|
$
|
760
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
margin (f)
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(121)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(121)
|
|
|
Interest
income
|
19
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19
|
|
|
Loss on
early
extinguishment of debt
|
(44)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
44
|
|
|
|
—
|
|
|
|
—
|
|
|
Pension settlement
charge
|
(352)
|
|
|
352
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Other items,
net
|
(32)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
8
|
|
|
|
—
|
|
|
|
(24)
|
|
|
Earnings from
continuing
operations
before income
taxes
|
186
|
|
|
352
|
|
|
|
63
|
|
|
|
|
—
|
|
|
|
|
33
|
|
|
|
—
|
|
|
|
634
|
|
|
Provision for income
taxes
|
(154)
|
|
|
(115)
|
|
|
|
(24)
|
|
|
|
|
129
|
|
|
|
|
(23)
|
|
|
|
—
|
|
|
|
(187)
|
|
|
Effective income tax
rate
|
82.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
investee
companies, net of tax
|
8
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8
|
|
|
Net earnings
from continuing
operations
|
40
|
|
|
237
|
|
|
|
39
|
|
|
|
|
129
|
|
|
|
|
10
|
|
|
|
—
|
|
|
|
455
|
|
|
Net earnings (loss)
from discontinued
operations,
net of tax
|
(81)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
99
|
|
|
|
18
|
|
|
Net earnings
(loss)
|
$
|
(41)
|
|
|
$
|
237
|
|
|
|
$
|
39
|
|
|
|
|
$
|
129
|
|
|
|
|
$
|
10
|
|
|
|
$
|
99
|
|
|
|
$
|
473
|
|
|
Diluted EPS from
continuing
operations
|
$
|
.10
|
|
|
$
|
.60
|
|
|
|
$
|
.10
|
|
|
|
|
$
|
.33
|
|
|
|
|
$
|
.03
|
|
|
|
$
|
—
|
|
|
|
$
|
1.15
|
|
|
Diluted
EPS
|
$
|
(.10)
|
|
|
$
|
.60
|
|
|
|
$
|
.10
|
|
|
|
|
$
|
.33
|
|
|
|
|
$
|
.03
|
|
|
|
$
|
.25
|
|
|
|
$
|
1.20
|
|
|
Diluted weighted
average number of
common shares
outstanding
|
395
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
395
|
|
|
|
|
(a)
|
Reflects a pension
settlement charge resulting from the transfer of pension
obligations to an insurance company through the purchase of a group
annuity contract.
|
(b)
|
Reflects
restructuring charges at Entertainment, Publishing, Local Media and
Corporate primarily for the reorganization of certain business
operations.
|
(c)
|
Reflects a net
provisional charge resulting from the enactment of federal tax
legislation in December 2017.
|
(d)
|
Includes a net gain
relating to the disposition of property and equipment, a charge for
the early extinguishment of debt and the write-down of an
investment to its fair value.
|
(e)
|
Primarily reflects a
loss on the split-off of CBS Radio and adjustments to the loss on
disposal of the Company's Outdoor advertising business.
|
(f)
|
Operating income
margin is defined as Operating Income or Adjusted Operating Income
divided by revenues.
|
CBS CORPORATION
AND SUBSIDIARIES
|
SUPPLEMENTAL
DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(continued)
|
(Unaudited; in
millions, except per share amounts)
|
|
|
Twelve Months
Ended December 31, 2018
|
|
Reported
|
|
Restructuring
and Other
Corporate
Matters
(a)
|
|
Programming
Charges (b)
|
Tax Items
(c)
|
|
Adjusted
|
|
Revenues
|
$
|
14,514
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
14,514
|
|
|
Operating
income
|
$
|
2,768
|
|
|
|
$
|
195
|
|
|
|
|
$
|
85
|
|
|
|
$
|
—
|
|
|
|
$
|
3,048
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
margin (d)
|
19
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
21
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(467)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(467)
|
|
|
Interest
income
|
57
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
57
|
|
|
Other items,
net
|
(69)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(69)
|
|
|
Earnings before
income taxes
|
2,289
|
|
|
|
195
|
|
|
|
|
85
|
|
|
|
—
|
|
|
|
2,569
|
|
|
Provision for income
taxes
|
(273)
|
|
|
|
(46)
|
|
|
|
|
(21)
|
|
|
|
(194)
|
|
|
|
(534)
|
|
|
Effective income tax
rate
|
11.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
20.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in loss of
investee companies, net of tax
|
(56)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(56)
|
|
|
Net
earnings
|
$
|
1,960
|
|
|
|
$
|
149
|
|
|
|
|
$
|
64
|
|
|
|
$
|
(194)
|
|
|
|
$
|
1,979
|
|
|
Diluted
EPS
|
$
|
5.14
|
|
|
|
$
|
.39
|
|
|
|
|
$
|
.17
|
|
|
|
$
|
(.51)
|
|
|
|
$
|
5.19
|
|
|
Diluted weighted
average number of common shares outstanding
|
381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
381
|
|
|
|
|
(a)
|
Primarily reflects
restructuring charges of $67 million ($50 million, net of tax) at
Entertainment, Publishing, Local Media and Corporate, primarily for
the reorganization and closure of certain business operations, and
professional fees and other costs associated with corporate
matters.
|
(b)
|
Reflects charges
resulting from the implementation of changes to the Company's
programming strategy, primarily at CBS Films.
|
(c)
|
Reflects the reversal
of a valuation allowance of $140 million relating to capital loss
carryforwards that will be utilized in connection with the sale of
CBS Television City in the first quarter of 2019, and a net tax
benefit of $54 million associated with tax law changes.
|
(d)
|
Operating income
margin is defined as operating income or Adjusted Operating Income
divided by revenues.
|
CBS CORPORATION
AND SUBSIDIARIES
|
SUPPLEMENTAL
DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(continued)
|
(Unaudited; in
millions, except per share amounts)
|
|
|
Twelve Months
Ended December 31, 2017
|
|
Reported
|
|
Pension
Settlement
Charge
(a)
|
|
Restructuring
Charges (b)
|
|
Tax
Items (c)
|
|
Other
(d)
|
Discontinued
Operations
Items (e)
|
|
Adjusted
|
|
Revenues
|
$
|
13,692
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
13,692
|
|
|
Operating
income
|
$
|
2,861
|
|
|
$
|
—
|
|
|
|
$
|
63
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
(19)
|
|
|
|
$
|
—
|
|
|
|
$
|
2,905
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
margin (f)
|
21
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(457)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(457)
|
|
|
Interest
income
|
64
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
64
|
|
|
Loss on
early
extinguishment of debt
|
(49)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
49
|
|
|
|
—
|
|
|
|
—
|
|
|
Pension settlement
charge
|
(352)
|
|
|
352
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Other items,
net
|
(88)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
8
|
|
|
|
—
|
|
|
|
(80)
|
|
|
Earnings from
continuing
operations before
income taxes
|
1,979
|
|
|
352
|
|
|
|
63
|
|
|
|
|
—
|
|
|
|
|
38
|
|
|
|
—
|
|
|
|
2,432
|
|
|
Provision for income
taxes
|
(633)
|
|
|
(115)
|
|
|
|
(24)
|
|
|
|
|
107
|
|
|
|
|
(25)
|
|
|
|
—
|
|
|
|
(690)
|
|
|
Effective income tax
rate
|
32.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in loss of
investee
companies, net of tax
|
(37)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(37)
|
|
|
Net earnings
from continuing
operations
|
1,309
|
|
|
237
|
|
|
|
39
|
|
|
|
|
107
|
|
|
|
|
13
|
|
|
|
—
|
|
|
|
1,705
|
|
|
Net earnings (loss)
from discontinued
operations, net of
tax
|
(952)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
1,038
|
|
|
|
86
|
|
|
Net
earnings
|
$
|
357
|
|
|
$
|
237
|
|
|
|
$
|
39
|
|
|
|
|
$
|
107
|
|
|
|
|
$
|
13
|
|
|
|
$
|
1,038
|
|
|
|
$
|
1,791
|
|
|
Diluted EPS
from continuing
operations
|
$
|
3.22
|
|
|
$
|
.58
|
|
|
|
$
|
.10
|
|
|
|
|
$
|
.26
|
|
|
|
|
$
|
.03
|
|
|
|
$
|
—
|
|
|
|
$
|
4.19
|
|
|
Diluted
EPS
|
$
|
.88
|
|
|
$
|
.58
|
|
|
|
$
|
.10
|
|
|
|
|
$
|
.26
|
|
|
|
|
$
|
.03
|
|
|
|
$
|
2.55
|
|
|
|
$
|
4.40
|
|
|
Diluted weighted
average
number of common
shares outstanding
|
407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
407
|
|
|
|
|
(a)
|
Reflects a pension
settlement charge resulting from the transfer of pension
obligations to an insurance company through the purchase of a group
annuity contract.
|
(b)
|
Reflects
restructuring charges at Entertainment, Publishing, Local Media and
Corporate primarily for the reorganization of certain business
operations.
|
(c)
|
Reflects a net
provisional charge of $129 million resulting from the enactment of
federal tax legislation in December 2017 and a tax benefit in the
first quarter of 2017 of $22 million from the resolution of certain
state income tax matters.
|
(d)
|
Includes a net gain
relating to the disposition of property and equipment, a charge for
the early extinguishment of debt and the write-down of an
investment to its fair value.
|
(e)
|
Primarily reflects a
net loss of $105 million on the split-off of CBS Radio Inc., a
noncash charge of $980 million recorded prior to the split-off to
adjust the carrying value of CBS Radio Inc. to the value indicated
by the stock valuation of Entercom; a restructuring charge of $7
million ($4 million, net of tax) at CBS Radio Inc.; adjustments to
the loss on disposal of the Company's Outdoor advertising business;
and a tax benefit of $45 million from the resolution of a tax
matter in a foreign jurisdiction relating to a previously disposed
business.
|
(f)
|
Operating income
margin is defined as Operating Income or Adjusted Operating Income
divided by revenues.
|
View original
content:http://www.prnewswire.com/news-releases/cbs-corporation-reports-2018-fourth-quarter-and-full-year-results-300796239.html
SOURCE CBS Corporation