NEW YORK, Feb. 15, 2018
/PRNewswire/ -- CBS Corporation (NYSE: CBS.A and CBS) today
reported results for the 2017 fourth quarter and full year,
including all-time quarterly and annual highs in revenues and
adjusted diluted earnings per share ("EPS").
"I'm very pleased to report that CBS turned in outstanding
fourth-quarter results, including double-digit revenue growth and
our 32nd consecutive quarter of EPS growth, capping off
a very strong year in 2017," said Leslie
Moonves, Chairman and Chief Executive Officer, CBS
Corporation. "The CBS Corporation produces many of the
most-valuable programming franchises in the world, reaching more
viewers than anyone else. This gives us a tremendous advantage as
streaming becomes more central to our distribution strategy. As a
result, we now have nearly five million subscribers at CBS All
Access and Showtime OTT combined. When you add this to our
retrans and skinny bundle subscribers, our total subscriber base
continues to grow at an accelerated pace. With the backdrop of this
changing business model, and the completed separation of our radio
business during the fourth quarter, we now have even greater
visibility into our operations. Specifically, we expect 2018 to be
another strong year for the CBS Corporation, with revenue growth in
the high-single digits and EPS growth in the high teens from the
record $4.40 we're reporting to you
today. So we feel very good about the growth path before us, and we
continue to have great confidence in our ability to deliver for our
shareholders."
Fourth Quarter 2017 Results
Revenues for the fourth quarter of 2017 increased 11% to a
record $3.92 billion from
$3.52 billion for the fourth quarter
of 2016. Content licensing and distribution revenues grew 33%,
driven by strong growth from both domestic and international
licensing sales. Affiliate and subscription fee revenues were up
20%, led by 31% growth in retransmission revenues and fees from CBS
Television Network affiliated stations as well as growth from
digital initiatives, including the Company's owned streaming
subscription services. Advertising revenues decreased 3% due to
record political advertising sales in the fourth quarter of
2016.
Operating income for the fourth quarter of 2017 was $343 million compared with $484 million for the prior-year period. Adjusted
operating income of $739 million
increased 1% despite significantly lower high-margin political
advertising sales and an increased investment in programming,
including for the Company's digital growth initiatives. Adjusted
operating income excludes restructuring charges and charges
associated with pension derisking activities during the fourth
quarter of 2017 and 2016.
Net earnings from continuing operations were $40 million for the fourth quarter of 2017
compared with $271 million for the
same quarter last year. Comparability was affected by several
discrete items, including the aforementioned charges and a charge
of $129 million in the fourth quarter
of 2017 associated with the enactment of federal tax legislation.
Adjusted net earnings from continuing operations of $455 million increased 6% from $428 million, driven by the higher adjusted
operating income and a lower effective income tax rate in 2017
compared with the prior year.
For the fourth quarter of 2017, the Company reported a net loss
of $41 million compared with a net
loss of $113 million for the fourth
quarter of 2016. The results of CBS Radio Inc. ("CBS Radio") have
been included in discontinued operations through the date of its
disposition. For the fourth quarter of 2017, the results included a
noncash loss recognized in connection with the split-off of CBS
Radio, and for the fourth quarter of 2016, the results included an
impairment charge at CBS Radio. Adjusted net earnings for the
fourth quarter of 2017 decreased 1% to $473
million from $476 million for
the same prior-year period.
Diluted EPS from continuing operations for the fourth quarter of
2017 was $.10 compared with
$.63 for the same quarter in 2016.
Adjusted diluted EPS grew 8% to $1.20
from $1.11, driven by lower weighted
average shares outstanding resulting from the shares retired in
connection with the split-off of CBS Radio and the Company's share
repurchase program.
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.
Split-off of CBS Radio Inc.
On November 17, 2017, the Company
announced the completion of the split-off of CBS Radio through an
exchange offer, in which the Company accepted 17.9 million shares
of CBS Corp. Class B Common Stock from its stockholders in exchange
for the 101.4 million shares of CBS Radio common stock that it
owned. Immediately following the exchange offer, CBS Radio was
combined with a subsidiary of Entercom Communications Corp.
("Entercom") in a merger, and each share of CBS Radio common stock
was converted into one share of Entercom Class A common stock. CBS
Radio has been presented in discontinued operations in the
consolidated financial statements for all periods presented.
Pension Settlement
During the fourth quarter of 2017, the Company purchased a group
annuity contract, under which an insurance company has permanently
assumed the Company's obligation to pay and administer pension
benefits to certain of the Company's pension plan participants, or
their designated beneficiaries, who had been receiving pension
benefits. The purchase of this group annuity contract reduced the
Company's outstanding pension benefit obligation by approximately
$800 million, representing
approximately 20% of the total obligations of the Company's
qualified pension plans, and was funded with pension plan assets.
In connection with this transaction, the Company recorded a
one-time accounting charge of $352
million in the fourth quarter of 2017, reflecting the
accelerated recognition of a portion of unamortized actuarial
losses in the plan. Additionally, during the fourth quarter of
2017, the Company made a discretionary contribution of $500 million to prefund its qualified plans.
Free Cash Flow, Balance Sheet and Liquidity
For the fourth quarter of 2017, operating cash flow from
continuing operations was an outflow of $142
million, which included a discretionary contribution of
$500 million to prefund the Company's
qualified pension plans, compared with an inflow of $337 million for the same prior-year period. For
the 2017 full year, operating cash flow from continuing operations
was $793 million compared with
$1.45 billion for 2016. Operating
cash flow for the full year 2017 included discretionary
contributions of $600 million to
prefund the Company's qualified pension plans and for 2016 included
CBS's broadcast of Super Bowl 50. Operating cash flow from
continuing operations for 2017 benefited from higher affiliate and
subscription fee revenues. Free cash flow was $102 million for the fourth quarter of 2017
compared with $252 million for the
same prior-year period, and for the 2017 full year it was
$989 million compared with
$1.26 billion in 2016.
In November 2017, the Company
issued $400 million of 2.90% senior
notes due 2023 and $500 million of
3.70% senior notes due 2028. The Company used the net proceeds from
these issuances to redeem its $500
million outstanding 5.75% senior notes due 2020. The
remaining net proceeds were used for general corporate purposes,
including the aforementioned fourth quarter contribution to the
Company's pension plans and the repayment of short-term borrowings,
including commercial paper.
Full Year 2017 Results
Full year 2017 revenues increased 4% to a record $13.69 billion from $13.17
billion in 2016. The growth was led by 26% higher affiliate
and subscription fee revenues, driven by 27% higher retransmission
revenues and fees from CBS Television Network affiliated stations;
Showtime Networks' distribution of the Floyd
Mayweather/Conor McGregor
pay-per-view boxing event; and growth from digital initiatives,
including the Company's owned streaming subscription services.
Content licensing and distribution revenues also contributed to the
revenue increase and were up 8%, reflecting growth in international
and domestic licensing sales. These increases were partially offset
by 9% lower advertising revenues, mainly resulting from the 2016
broadcast of Super Bowl 50 on the CBS Television Network and
record political advertising sales in the prior-year period.
Operating income decreased 8% to $2.42
billion for 2017 from $2.62
billion for 2016. Operating income for both years included
charges for pension settlements and restructuring activities which
affected comparability. Adjusted operating income decreased 1% to
$2.82 billion in 2017 from
$2.86 billion in 2016, reflecting a
mix of lower-margin revenues in 2017 and an increased investment in
programming.
Net earnings from continuing operations were $1.31 billion for 2017 compared with $1.55 billion for 2016. Comparability was
affected by several discrete items, including the aforementioned
charges and a charge in 2017 associated with the enactment of
federal tax legislation. Adjusted net earnings from continuing
operations increased 3% to $1.71
billion for 2017 from $1.66
billion mainly reflecting a lower effective income tax rate
in 2017.
Net earnings were $357 million for
2017 compared with $1.26 billion for
2016. Net earnings included the results of CBS Radio through the
date of its disposition, which are presented in discontinued
operations. For 2017, discontinued operations included a net loss
of $105 million from the split-off of
CBS Radio and a market value adjustment of $980 million recorded prior to the split-off to
reduce the carrying value of CBS Radio, and for 2016 included
impairment charges of $444 million
($427 million, net of tax) at CBS
Radio. Adjusted net earnings were down 3% to $1.79 billion for 2017 from $1.84 billion for 2016.
Diluted EPS from continuing operations was $3.22 for 2017 compared with $3.46 for 2016. Adjusted diluted EPS for 2017 was
$4.40, up 7% from $4.11 in 2016, benefiting from lower shares
outstanding. During 2017, the Company repurchased a total of 34.1
million shares, including the shares retired in connection with the
split-off of CBS Radio.
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; operating income (loss) excluding pension settlement charges,
restructuring and merger and acquisition-related costs, and other
operating items, net, by segment ("Segment Operating Income"); and
depreciation and amortization by segment for the three and twelve
months ended December 31, 2017, and 2016.
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
Revenues by
Segment
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Entertainment
|
$
|
2,818
|
|
|
$
|
2,394
|
|
|
$
|
9,164
|
|
|
$
|
8,877
|
|
Cable
Networks
|
547
|
|
|
501
|
|
|
2,501
|
|
|
2,160
|
|
Publishing
|
235
|
|
|
209
|
|
|
830
|
|
|
767
|
|
Local
Media
|
450
|
|
|
526
|
|
|
1,668
|
|
|
1,779
|
|
Corporate/Eliminations
|
(129)
|
|
|
(112)
|
|
|
(471)
|
|
|
(417)
|
|
Total
Revenues
|
$
|
3,921
|
|
|
$
|
3,518
|
|
|
$
|
13,692
|
|
|
$
|
13,166
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
Revenues by
Type
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Advertising
|
$
|
1,745
|
|
|
$
|
1,796
|
|
|
$
|
5,753
|
|
|
$
|
6,288
|
|
Content licensing and
distribution
|
1,191
|
|
|
893
|
|
|
3,952
|
|
|
3,673
|
|
Affiliate and
subscription fees
|
923
|
|
|
770
|
|
|
3,758
|
|
|
2,978
|
|
Other
|
62
|
|
|
59
|
|
|
229
|
|
|
227
|
|
Total
Revenues
|
$
|
3,921
|
|
|
$
|
3,518
|
|
|
$
|
13,692
|
|
|
$
|
13,166
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
Segment Operating
Income (Loss)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Entertainment
|
$
|
465
|
|
|
$
|
371
|
|
|
$
|
1,554
|
|
|
$
|
1,519
|
|
Cable
Networks
|
201
|
|
|
219
|
|
|
996
|
|
|
959
|
|
Publishing
|
44
|
|
|
36
|
|
|
132
|
|
|
119
|
|
Local
Media
|
137
|
|
|
216
|
|
|
492
|
|
|
618
|
|
Corporate
|
(108)
|
|
|
(109)
|
|
|
(355)
|
|
|
(354)
|
|
Adjusted Operating
Income
|
739
|
|
|
733
|
|
|
2,819
|
|
|
2,861
|
|
Pension settlement
charges
|
(352)
|
|
|
(211)
|
|
|
(352)
|
|
|
(211)
|
|
Restructuring and
merger and acquisition-related costs
|
(63)
|
|
|
(38)
|
|
|
(63)
|
|
|
(38)
|
|
Other operating
items, net
|
19
|
|
|
—
|
|
|
19
|
|
|
9
|
|
Total Operating
Income
|
$
|
343
|
|
|
$
|
484
|
|
|
$
|
2,423
|
|
|
$
|
2,621
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
Depreciation and
Amortization
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Entertainment
|
$
|
30
|
|
|
$
|
29
|
|
|
$
|
115
|
|
|
$
|
117
|
|
Cable
Networks
|
6
|
|
|
6
|
|
|
23
|
|
|
23
|
|
Publishing
|
1
|
|
|
2
|
|
|
6
|
|
|
6
|
|
Local
Media
|
11
|
|
|
11
|
|
|
45
|
|
|
44
|
|
Corporate
|
9
|
|
|
9
|
|
|
34
|
|
|
35
|
|
Total Depreciation
and Amortization
|
$
|
57
|
|
|
$
|
57
|
|
|
$
|
223
|
|
|
$
|
225
|
|
Entertainment (CBS Television Network, CBS Television
Studios, CBS Studios International, CBS Television Distribution,
Network Ten, CBS Interactive, and CBS Films)
Entertainment revenues of $2.82
billion for the fourth quarter of 2017 increased 18% from
$2.39 billion for the same prior-year
period. This increase was led by 38% growth in content licensing
and distribution revenues, driven by strong growth in both domestic
and international licensing sales. Affiliate and subscription fees
also contributed to the revenue increase and were up 40%, led by
higher station affiliation fees and growth from digital
initiatives, including CBS All Access and third-party live
television streaming offerings. Advertising revenues increased 4%
for the quarter, driven by the inclusion of the results of Network
Ten, one of three major commercial broadcast networks in
Australia, which the Company
acquired in mid-November.
Entertainment operating income of $465
million for the fourth quarter of 2017 increased 25% from
$371 million for the same prior-year
period, primarily reflecting the revenue growth, which was
partially offset by an increased investment in programming,
including costs for CBS All Access.
Cable Networks (Showtime Networks, CBS Sports Network,
and Smithsonian Networks)
Cable Networks revenues of $547
million for the fourth quarter of 2017 increased 9% from
$501 million for the same prior-year
period, driven by higher revenues from the Showtime digital
streaming subscription offering and growth from the licensing of
Showtime content.
Cable Networks operating income of $201
million for the fourth quarter of 2017 decreased 8% to
$219 million for the same prior-year
period, reflecting an increased investment in programming.
Publishing (Simon & Schuster)
Publishing revenues of $235
million for the fourth quarter of 2017 increased 12% from
$209 million for the same prior-year
period. This increase was led by higher print book sales and
digital audio sales. Bestselling titles for the fourth quarter of
2017 included Leonardo da
Vinci by Walter Isaacson,
Principles by Ray Dalio, and
It by Stephen King.
Publishing operating income of $44
million for the fourth quarter of 2017 increased 22% from
$36 million for the same prior-year
period, mainly reflecting the higher revenues.
Local Media (CBS Television Stations)
Local Media revenues of $450
million for the fourth quarter of 2017 decreased 14% from
$526 million for the same quarter in
2016, which benefited from record political advertising sales.
Growth in retransmission revenues partially offset the decline.
Local Media operating income for the fourth quarter of 2017 of
$137 million decreased 37% from
$216 million for the same prior-year
period, primarily reflecting the decline in high-margin political
advertising sales.
Corporate
Corporate expenses for the fourth quarter of 2017 decreased 1%
to $108 million from $109 million for the same prior-year period,
primarily reflecting lower employee-related costs.
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 Ten Australia, CBS Television Studios, CBS
Studios International, CBS Television Distribution, CBS Consumer
Products, CBS Home Entertainment, CBS Interactive, CBS Films,
Showtime Networks, CBS Sports Network, Pop (a joint venture between
CBS Corporation and Lionsgate), Smithsonian Networks, Simon &
Schuster, CBS Television Stations, and CBS EcoMedia.
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 for 2018. 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; 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; effects relating to the
Company exploring, entering into, and/or consummating any potential
transaction with Viacom Inc.; 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 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 (the "SEC") 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,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
3,921
|
|
|
$
|
3,518
|
|
|
$
|
13,692
|
|
|
$
|
13,166
|
|
Operating
income
|
343
|
|
|
484
|
|
|
2,423
|
|
|
2,621
|
|
Interest
expense
|
(121)
|
|
|
(107)
|
|
|
(457)
|
|
|
(411)
|
|
Interest
income
|
19
|
|
|
10
|
|
|
64
|
|
|
32
|
|
Loss on early
extinguishment of debt
|
(44)
|
|
|
—
|
|
|
(49)
|
|
|
—
|
|
Other items,
net
|
(11)
|
|
|
(5)
|
|
|
(2)
|
|
|
(12)
|
|
Earnings from
continuing operations before income taxes
|
186
|
|
|
382
|
|
|
1,979
|
|
|
2,230
|
|
Provision for income
taxes
|
(154)
|
|
|
(104)
|
|
|
(633)
|
|
|
(628)
|
|
Equity in earnings
(loss) of investee companies, net of tax
|
8
|
|
|
(7)
|
|
|
(37)
|
|
|
(50)
|
|
Net earnings from
continuing operations
|
40
|
|
|
271
|
|
|
1,309
|
|
|
1,552
|
|
Net loss from
discontinued operations, net of tax
|
(81)
|
|
|
(384)
|
|
|
(952)
|
|
|
(291)
|
|
Net earnings
(loss)
|
$
|
(41)
|
|
|
$
|
(113)
|
|
|
$
|
357
|
|
|
$
|
1,261
|
|
Basic net earnings
(loss) per common share:
|
|
|
|
|
|
|
|
Net earnings from
continuing operations
|
$
|
.10
|
|
|
$
|
.64
|
|
|
$
|
3.26
|
|
|
$
|
3.50
|
|
Net loss from
discontinued operations
|
$
|
(.21)
|
|
|
$
|
(.91)
|
|
|
$
|
(2.37)
|
|
|
$
|
(.66)
|
|
Net earnings
(loss)
|
$
|
(.10)
|
|
|
$
|
(.27)
|
|
|
$
|
.89
|
|
|
$
|
2.84
|
|
|
|
|
|
|
|
|
|
Diluted net
earnings (loss) per common share:
|
|
|
|
|
|
|
|
Net earnings from
continuing operations
|
$
|
.10
|
|
|
$
|
.63
|
|
|
$
|
3.22
|
|
|
$
|
3.46
|
|
Net loss from
discontinued operations
|
$
|
(.21)
|
|
|
$
|
(.90)
|
|
|
$
|
(2.34)
|
|
|
$
|
(.65)
|
|
Net earnings
(loss)
|
$
|
(.10)
|
|
|
$
|
(.26)
|
|
|
$
|
.88
|
|
|
$
|
2.81
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
391
|
|
|
424
|
|
|
401
|
|
|
444
|
|
Diluted
|
395
|
|
|
429
|
|
|
407
|
|
|
448
|
|
|
|
|
|
|
|
|
|
Dividends per
common share
|
$
|
.18
|
|
|
$
|
.18
|
|
|
$
|
.72
|
|
|
$
|
.66
|
|
CBS
CORPORATION AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
(Unaudited; in
millions)
|
|
|
At
|
|
|
At
|
|
|
December 31,
2017
|
|
December 31,
2016
|
Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
285
|
|
|
|
|
$
|
598
|
|
|
Receivables,
net
|
|
3,697
|
|
|
|
|
3,314
|
|
|
Programming and other
inventory
|
|
1,828
|
|
|
|
|
1,427
|
|
|
Prepaid expenses and
other current assets
|
|
462
|
|
|
|
|
419
|
|
|
Current assets of
discontinued operations
|
|
1
|
|
|
|
|
305
|
|
|
Total current
assets
|
|
6,273
|
|
|
|
|
6,063
|
|
|
Property and
equipment
|
|
3,051
|
|
|
|
|
2,935
|
|
|
Less accumulated
depreciation and amortization
|
|
1,771
|
|
|
|
|
1,694
|
|
|
Net property and
equipment
|
|
1,280
|
|
|
|
|
1,241
|
|
|
Programming and other
inventory
|
|
2,881
|
|
|
|
|
2,439
|
|
|
Goodwill
|
|
4,891
|
|
|
|
|
4,864
|
|
|
Intangible
assets
|
|
2,666
|
|
|
|
|
2,633
|
|
|
Other
assets
|
|
2,840
|
|
|
|
|
2,707
|
|
|
Assets of
discontinued operations
|
|
12
|
|
|
|
|
4,291
|
|
|
Total
Assets
|
|
$
|
20,843
|
|
|
|
|
$
|
24,238
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
231
|
|
|
|
|
$
|
148
|
|
|
Participants' share
and royalties payable
|
|
986
|
|
|
|
|
1,024
|
|
|
Program
rights
|
|
373
|
|
|
|
|
290
|
|
|
Commercial
paper
|
|
679
|
|
|
|
|
450
|
|
|
Current portion of
long-term debt
|
|
19
|
|
|
|
|
23
|
|
|
Accrued expenses and
other current liabilities
|
|
1,652
|
|
|
|
|
1,618
|
|
|
Current liabilities
of discontinued operations
|
|
32
|
|
|
|
|
155
|
|
|
Total current
liabilities
|
|
3,972
|
|
|
|
|
3,708
|
|
|
Long-term
debt
|
|
9,464
|
|
|
|
|
8,902
|
|
|
Other
liabilities
|
|
5,387
|
|
|
|
|
5,488
|
|
|
Liabilities of
discontinued operations
|
|
42
|
|
|
|
|
2,451
|
|
|
Total Stockholders'
Equity
|
|
1,978
|
|
|
|
|
3,689
|
|
|
Total Liabilities and
Stockholders' Equity
|
|
$
|
20,843
|
|
|
|
|
$
|
24,238
|
|
|
CBS CORPORATION
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Unaudited; in
millions)
|
|
|
Twelve Months
Ended
|
|
December
31,
|
|
|
2017
|
|
|
|
2016
|
|
Operating
Activities:
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
|
357
|
|
|
|
|
$
|
1,261
|
|
|
Less: Net loss from
discontinued operations
|
|
(952)
|
|
|
|
|
(291)
|
|
|
Net earnings from
continuing operations
|
|
1,309
|
|
|
|
|
1,552
|
|
|
Adjustments to
reconcile net earnings from continuing operations to net cash
flow
provided by operating activities from continuing
operations:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
223
|
|
|
|
|
225
|
|
|
Stock-based
compensation
|
|
179
|
|
|
|
|
165
|
|
|
Net gain on
disposition and write-down of assets
|
|
(9)
|
|
|
|
|
(18)
|
|
|
Equity in loss of
investee companies, net of tax and distributions
|
|
38
|
|
|
|
|
53
|
|
|
Change in assets and
liabilities, net of investing and financing activities
|
|
(947)
|
|
|
|
|
(523)
|
|
|
Net cash flow
provided by operating activities from continuing
operations
|
|
793
|
|
|
|
|
1,454
|
|
|
Net cash flow
provided by operating activities from discontinued
operations
|
|
94
|
|
|
|
|
231
|
|
|
Net cash flow
provided by operating activities
|
|
887
|
|
|
|
|
1,685
|
|
|
Investing
Activities:
|
|
|
|
|
|
|
|
Acquisitions
(including acquired television library), net of cash
acquired
|
|
(270)
|
|
|
|
|
(92)
|
|
|
Capital
expenditures
|
|
(185)
|
|
|
|
|
(196)
|
|
|
Investments in and
advances to investee companies
|
|
(110)
|
|
|
|
|
(81)
|
|
|
Proceeds from sale of
investments
|
|
10
|
|
|
|
|
—
|
|
|
Proceeds from
dispositions
|
|
11
|
|
|
|
|
20
|
|
|
Other investing
activities
|
|
21
|
|
|
|
|
15
|
|
|
Net cash flow used
for investing activities from continuing operations
|
|
(523)
|
|
|
|
|
(334)
|
|
|
Net cash flow used
for investing activities from discontinued operations
|
|
(24)
|
|
|
|
|
(6)
|
|
|
Net cash flow used
for investing activities
|
|
(547)
|
|
|
|
|
(340)
|
|
|
Financing
Activities:
|
|
|
|
|
|
|
|
Proceeds from
short-term debt borrowings, net
|
|
229
|
|
|
|
|
450
|
|
|
Proceeds from
issuance of senior notes
|
|
1,773
|
|
|
|
|
684
|
|
|
Repayment of senior
notes and debentures
|
|
(1,244)
|
|
|
|
|
(199)
|
|
|
Proceeds from debt
borrowings of CBS Radio
|
|
40
|
|
|
|
|
1,452
|
|
|
Repayment of debt
borrowings of CBS Radio
|
|
(43)
|
|
|
|
|
(110)
|
|
|
Payment of capital
lease obligations
|
|
(18)
|
|
|
|
|
(18)
|
|
|
Dividends
|
|
(296)
|
|
|
|
|
(288)
|
|
|
Purchase of Company
common stock
|
|
(1,111)
|
|
|
|
|
(2,997)
|
|
|
Payment of payroll
taxes in lieu of issuing shares for stock-based
compensation
|
|
(89)
|
|
|
|
|
(58)
|
|
|
Proceeds from
exercise of stock options
|
|
91
|
|
|
|
|
21
|
|
|
Excess tax benefit
from stock-based compensation
|
|
—
|
|
|
|
|
17
|
|
|
Other financing
activities
|
|
(9)
|
|
|
|
|
—
|
|
|
Net cash flow used
for financing activities
|
|
(677)
|
|
|
|
|
(1,046)
|
|
|
Net (decrease)
increase in cash and cash equivalents
|
|
(337)
|
|
|
|
|
299
|
|
|
Cash and cash
equivalents at beginning of year
(includes $24 (2017)
and $6 (2016) of discontinued operations cash)
|
|
622
|
|
|
|
|
323
|
|
|
Cash and cash
equivalents at end of year
(includes $24 (2016)
of discontinued operations cash)
|
|
$
|
285
|
|
|
|
|
$
|
622
|
|
|
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, 2017
and 2016. The Company defines "Adjusted Operating Income" as
operating income excluding pension settlement charges,
restructuring charges, merger and acquisition-related costs, 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,
|
|
2017
|
|
2016
|
Adjusted operating
income
|
|
$
|
739
|
|
|
|
|
$
|
733
|
|
|
Pension settlement
charges
|
|
(352)
|
|
|
|
|
(211)
|
|
|
Restructuring and
merger and acquisition-related costs
|
|
(63)
|
|
|
|
|
(38)
|
|
|
Other operating
items, net
|
|
19
|
|
|
|
|
—
|
|
|
Operating
income
|
|
343
|
|
|
|
|
484
|
|
|
Interest
expense
|
|
(121)
|
|
|
|
|
(107)
|
|
|
Interest
income
|
|
19
|
|
|
|
|
10
|
|
|
Loss on early
extinguishment of debt
|
|
(44)
|
|
|
|
|
—
|
|
|
Other items,
net
|
|
(11)
|
|
|
|
|
(5)
|
|
|
Earnings from
continuing operations before income taxes
|
|
186
|
|
|
|
|
382
|
|
|
Provision for income
taxes
|
|
(154)
|
|
|
|
|
(104)
|
|
|
Equity in earnings
(loss) of investee companies, net of tax
|
|
8
|
|
|
|
|
(7)
|
|
|
Net earnings from
continuing operations
|
|
40
|
|
|
|
|
271
|
|
|
Net loss from
discontinued operations, net of tax
|
|
(81)
|
|
|
|
|
(384)
|
|
|
Net
loss
|
|
$
|
(41)
|
|
|
|
|
$
|
(113)
|
|
|
|
|
|
Twelve Months
Ended December 31,
|
|
2017
|
|
2016
|
Adjusted operating
income
|
|
$
|
2,819
|
|
|
|
|
$
|
2,861
|
|
|
Pension settlement
charges
|
|
(352)
|
|
|
|
|
(211)
|
|
|
Restructuring and
merger and acquisition-related costs
|
|
(63)
|
|
|
|
|
(38)
|
|
|
Other operating
items, net
|
|
19
|
|
|
|
|
9
|
|
|
Operating
income
|
|
2,423
|
|
|
|
|
2,621
|
|
|
Interest
expense
|
|
(457)
|
|
|
|
|
(411)
|
|
|
Interest
income
|
|
64
|
|
|
|
|
32
|
|
|
Loss on early
extinguishment of debt
|
|
(49)
|
|
|
|
|
—
|
|
|
Other items,
net
|
|
(2)
|
|
|
|
|
(12)
|
|
|
Earnings from
continuing operations before income taxes
|
|
1,979
|
|
|
|
|
2,230
|
|
|
Provision for income
taxes
|
|
(633)
|
|
|
|
|
(628)
|
|
|
Equity in loss of
investee companies, net of tax
|
|
(37)
|
|
|
|
|
(50)
|
|
|
Net earnings from
continuing operations
|
|
1,309
|
|
|
|
|
1,552
|
|
|
Net loss from
discontinued operations, net of tax
|
|
(952)
|
|
|
|
|
(291)
|
|
|
Net
earnings
|
|
$
|
357
|
|
|
|
|
$
|
1,261
|
|
|
CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL
DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(continued)
(Unaudited; in millions)
Free Cash Flow
The Company defines free cash flow as its 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 calculation of free cash flow includes capital
expenditures because investment in capital expenditures is a use of
cash that is directly related to the Company's operations. 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 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 a primary measure 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 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 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, 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
that are not reflected in free cash flow. The following table
presents a reconciliation of the Company's free cash flow to net
cash flow provided by (used for) operating activities:
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net cash flow (used
for) provided by operating activities
|
$
|
(100)
|
|
|
$
|
379
|
|
|
$
|
887
|
|
|
$
|
1,685
|
|
Capital
expenditures
|
(73)
|
|
|
(85)
|
|
|
(185)
|
|
|
(196)
|
|
Exclude discretionary
pension plan contributions, net of tax
|
(317)
|
|
|
—
|
|
|
(381)
|
|
|
—
|
|
Exclude operating
cash flow from discontinued operations
|
42
|
|
|
42
|
|
|
94
|
|
|
231
|
|
Free cash
flow
|
$
|
102
|
|
|
$
|
252
|
|
|
$
|
989
|
|
|
$
|
1,258
|
|
The following table presents a summary of the Company's cash
flows:
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net cash flow (used
for) provided by operating activities
|
$
|
(100)
|
|
|
$
|
379
|
|
|
$
|
887
|
|
|
$
|
1,685
|
|
Net cash flow used
for investing activities
|
$
|
(130)
|
|
|
$
|
(159)
|
|
|
$
|
(547)
|
|
|
$
|
(340)
|
|
Net cash flow
provided by (used for) financing activities
|
$
|
341
|
|
|
$
|
223
|
|
|
$
|
(677)
|
|
|
$
|
(1,046)
|
|
CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL
DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(continued)
(Unaudited; in millions, except per share
amounts)
2017 and 2016 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, 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
|
$
|
343
|
|
|
$
|
352
|
|
|
|
$
|
63
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
(19)
|
|
|
|
$
|
—
|
|
|
|
$
|
739
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
margin (f)
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(121)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(121)
|
|
|
Interest
income
|
19
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19
|
|
|
Loss on early
extinguishment of debt
|
(44)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
44
|
|
|
|
—
|
|
|
|
—
|
|
|
Other items,
net
|
(11)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
8
|
|
|
|
—
|
|
|
|
(3)
|
|
|
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 loss 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)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
3
|
|
|
|
|
—
|
|
|
|
96
|
|
|
|
18
|
|
|
Net earnings
(loss)
|
$
|
(41)
|
|
|
$
|
237
|
|
|
|
$
|
39
|
|
|
|
|
$
|
132
|
|
|
|
|
$
|
10
|
|
|
|
$
|
96
|
|
|
|
$
|
473
|
|
|
Diluted EPS
from
continuing operations
|
$
|
.10
|
|
|
$
|
.60
|
|
|
|
$
|
.10
|
|
|
|
|
$
|
.33
|
|
|
|
|
$
|
.03
|
|
|
|
$
|
—
|
|
|
|
$
|
1.15
|
|
|
Diluted
EPS
|
$
|
(.10)
|
|
|
$
|
.60
|
|
|
|
$
|
.10
|
|
|
|
|
$
|
.33
|
|
|
|
|
$
|
.03
|
|
|
|
$
|
.24
|
|
|
|
$
|
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) 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)
|
|
|
Three Months Ended
December 31, 2016
|
|
Reported
|
|
Pension
Settlement
Charge (a)
|
|
Restructuring
and Merger and
Acquisition-
Related Costs (b)
|
|
Discontinued
Operations
Items (c)
|
|
Other
(d)
|
|
Adjusted
|
|
Revenues
|
$
|
3,518
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
3,518
|
|
|
Operating
income
|
$
|
484
|
|
|
|
$
|
211
|
|
|
|
|
$
|
38
|
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
margin (e)
|
14
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(107)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
(107)
|
|
|
Interest
income
|
10
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
10
|
|
|
Other items,
net
|
(5)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
(5)
|
|
|
Earnings from
continuing operations before
income taxes
|
382
|
|
|
|
211
|
|
|
|
|
38
|
|
|
|
|
—
|
|
|
|
—
|
|
|
631
|
|
|
Provision for income
taxes
|
(104)
|
|
|
|
(81)
|
|
|
|
|
(15)
|
|
|
|
|
—
|
|
|
|
—
|
|
|
(200)
|
|
|
Effective income tax
rate
|
27.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
investee
companies, net of tax
|
(7)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
4
|
|
|
(3)
|
|
|
Net earnings from
continuing operations
|
271
|
|
|
|
130
|
|
|
|
|
23
|
|
|
|
|
—
|
|
|
|
4
|
|
|
428
|
|
|
Net earnings (loss)
from
discontinued operations,
net
of tax
|
(384)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
432
|
|
|
|
—
|
|
|
48
|
|
|
Net
earnings
|
$
|
(113)
|
|
|
|
$
|
130
|
|
|
|
|
$
|
23
|
|
|
|
|
$
|
432
|
|
|
|
$
|
4
|
|
|
$
|
476
|
|
|
Diluted EPS
from
continuing operations
|
$
|
.63
|
|
|
|
$
|
.30
|
|
|
|
|
$
|
.05
|
|
|
|
|
$
|
—
|
|
|
|
$
|
.01
|
|
|
$
|
1.00
|
|
|
Diluted
EPS
|
$
|
(.26)
|
|
|
|
$
|
.30
|
|
|
|
|
$
|
.05
|
|
|
|
|
$
|
1.01
|
|
|
|
$
|
.01
|
|
|
$
|
1.11
|
|
|
Diluted weighted
average
number of common
shares outstanding
|
429
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
429
|
|
|
|
(a) Reflects a
charge for the settlement of pension obligations resulting from the
completion of the Company's offer to former employees to
receive
lump-sum distributions of their
pension benefits.
|
(b) Reflects
restructuring charges at Entertainment, Cable Networks, Publishing,
Local Media, and Corporate, primarily for the reorganization of
certain
business operations, and professional
fees associated with merger and acquisition activities.
|
(c) Reflects a
noncash impairment charge of $444 million ($427 million, net of
tax) to reduce the carrying value of CBS Radio's goodwill and
FCC
licenses to their fair value and
restructuring charges at CBS Radio.
|
(d) Reflects the
write-down of an international television joint venture to its fair
value.
|
(e) 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
|
$
|
2,423
|
|
|
$
|
352
|
|
|
|
$
|
63
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
(19)
|
|
|
|
—
|
|
|
|
$
|
2,819
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
margin (f)
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(457)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(457)
|
|
|
Interest
income
|
64
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
64
|
|
|
Loss on early
extinguishment of debt
|
(49)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
49
|
|
|
|
—
|
|
|
|
—
|
|
|
Other items,
net
|
(2)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
8
|
|
|
|
—
|
|
|
|
6
|
|
|
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
from
discontinued
operations,
net
of tax
|
(952)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
(42)
|
|
|
|
|
—
|
|
|
|
1,080
|
|
|
|
86
|
|
|
Net
earnings
|
$
|
357
|
|
|
$
|
237
|
|
|
|
$
|
39
|
|
|
|
|
$
|
65
|
|
|
|
|
$
|
13
|
|
|
|
$
|
1,080
|
|
|
|
$
|
1,791
|
|
|
Diluted EPS
from
continuing operations
|
$
|
3.22
|
|
|
$
|
.58
|
|
|
|
$
|
.10
|
|
|
|
|
$
|
.26
|
|
|
|
|
$
|
.03
|
|
|
|
$
|
—
|
|
|
|
$
|
4.19
|
|
|
Diluted
EPS
|
$
|
.88
|
|
|
$
|
.58
|
|
|
|
$
|
.10
|
|
|
|
|
$
|
.16
|
|
|
|
|
$
|
.03
|
|
|
|
$
|
2.65
|
|
|
|
$
|
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) Primarily
reflects a net provisional charge of $129 million resulting from
the enactment of federal tax legislation in December 2017; a tax
benefit of
$22 million from the resolution of
certain state income tax matters; and, in discontinued operations,
a tax benefit from the resolution of a tax matter in
a foreign jurisdiction relating to a
previously disposed business.
|
(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) Reflects a
net loss of $105 million on the split-off of CBS Radio, a market
value adjustment of $980 million recorded prior to the split-off to
reduce the
carrying value of CBS Radio to the
value indicated by the stock valuation of Entercom; restructuring
charges at 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, 2016
|
|
Reported
|
|
Pension
Settlement
Charge
(a)
|
|
Restructuring
and
Merger
and
Acquisition-
Related Costs (b)
|
|
Tax Items
(c)
|
|
Discontinued
Operations
Items (d)
|
|
Other
(e)
|
|
Adjusted
|
|
Revenues
|
$
|
13,166
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
13,166
|
|
|
Operating
income
|
$
|
2,621
|
|
|
|
$
|
211
|
|
|
|
|
$
|
38
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
(9)
|
|
|
$
|
2,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
margin (f)
|
20
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(411)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
(411)
|
|
|
Interest
income
|
32
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
32
|
|
|
Other items,
net
|
(12)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
(12)
|
|
|
Earnings from
continuing
operations before
income taxes
|
2,230
|
|
|
|
211
|
|
|
|
|
38
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(9)
|
|
|
2,470
|
|
|
Provision for income
taxes
|
(628)
|
|
|
|
(81)
|
|
|
|
|
(15)
|
|
|
|
(47)
|
|
|
|
—
|
|
|
|
4
|
|
|
(767)
|
|
|
Effective income tax
rate
|
28.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in loss of
investee
companies, net of tax
|
(50)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10
|
|
|
(40)
|
|
|
Net earnings from
continuing operations
|
1,552
|
|
|
|
130
|
|
|
|
|
23
|
|
|
|
(47)
|
|
|
|
—
|
|
|
|
5
|
|
|
1,663
|
|
|
Net earnings (loss)
from
discontinued operations,
net
of tax
|
(291)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
36
|
|
|
|
432
|
|
|
|
—
|
|
|
177
|
|
|
Net
earnings
|
$
|
1,261
|
|
|
|
$
|
130
|
|
|
|
|
$
|
23
|
|
|
|
$
|
(11)
|
|
|
|
$
|
432
|
|
|
|
$
|
5
|
|
|
$
|
1,840
|
|
|
Diluted EPS
from
continuing operations
|
$
|
3.46
|
|
|
|
$
|
.29
|
|
|
|
|
$
|
.05
|
|
|
|
$
|
(.10)
|
|
|
|
$
|
—
|
|
|
|
$
|
.01
|
|
|
$
|
3.71
|
|
|
Diluted
EPS
|
$
|
2.81
|
|
|
|
$
|
.29
|
|
|
|
|
$
|
.05
|
|
|
|
$
|
(.02)
|
|
|
|
$
|
.96
|
|
|
|
$
|
.01
|
|
|
$
|
4.11
|
|
|
Diluted weighted
average
number of common
shares outstanding
|
448
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
448
|
|
|
|
(a) Reflects a
charge for the settlement of pension obligations resulting from the
completion of the Company's offer to former employees to receive
lump-
sum distributions of their pension
benefits.
|
(b) Reflects
restructuring charges at Entertainment, Cable Networks, Publishing,
Local Media, and Corporate, primarily for the reorganization of
certain
business operations, and professional
fees associated with merger and acquisition activities.
|
(c) Reflects a
one-time tax benefit associated with a multiyear adjustment to a
tax deduction, which was approved by the IRS during the third
quarter of
2016 and, included in discontinued
operations, a charge from the resolution of a tax matter in a
foreign jurisdiction relating to a previously disposed
business.
|
(d) Reflects a
noncash impairment charge of $444 million ($427 million, net of
tax) to reduce the carrying value of CBS Radio's goodwill and FCC
licenses
to their fair value and restructuring
charges at CBS Radio.
|
(e) Reflects a
gain from the sale of an internet business in China, a multiyear,
retroactive impact of a new operating tax, and write-downs of an
international
television joint venture to its fair
value.
|
(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-2017-fourth-quarter-and-full-year-results-300599735.html
SOURCE CBS Corporation