Net Earnings From Continuing Operations Up 5% to $340 Million
EPS From Continuing Operations Up 14% to $.48 Per Diluted Share
Free Cash Flow of $1.59 Billion for the First Nine Months of 2007
NEW YORK, Nov. 1 /PRNewswire-FirstCall/ -- CBS Corporation (NYSE: CBS.A
and CBS) today reported results for the third quarter ended September 30,
2007.
"CBS continues to position itself for future growth during this time of
extraordinary opportunity," said Sumner Redstone, Executive Chairman, CBS
Corporation. "Leslie and his team have done an exceptional job of creating
and distributing compelling, mass-appeal programming to the growing list of
platforms around the world while expanding CBS's new media properties. At
the same time, all of us at CBS remain focused on producing strong free
cash flow and returning value to our shareholders in the form of dividends,
which we have steadily increased."
"In the third quarter, we once again delivered on our promise to return
capital to shareholders while driving solid EPS growth," said Leslie
Moonves, President and CEO, CBS Corporation. "The operating performance of
our core businesses delivered the healthy free cash flow that allowed us to
raise our quarterly cash dividend to an annualized $1.00 per share and
repurchase an additional $1.6 billion of our stock during the quarter. We
also continue to refine our asset portfolio and aggressively pursue
higher-growth businesses that complement our core operations, like the
purchase of SignStorey, a leading distributor of programming and
advertising content to retail stores in the attractive out-of-home market.
At the same time, we have further invested in the CBS Audience Network,
CBS.com and CBS Mobile, and our online extensions of our radio and TV
stations, all of which play an important role in building audiences which
are attractive to a broad range of existing and new advertisers."
Third Quarter 2007 Results
Revenues of $3.3 billion for the third quarter of 2007 decreased 3%
from $3.4 billion for the same quarter last year, reflecting lower
television license fees, the impact of radio and television station
divestitures and the absence of UPN, which ceased broadcasting in September
2006.
Operating income before depreciation and amortization ("OIBDA") of
$757.6 million for the third quarter of 2007 increased from $755.9 million
and operating income of $645.8 million decreased slightly from $646.4
million for the same prior-year period, as increases at Television, Outdoor
and Publishing, as well as lower residual costs, were offset by a decline
at Radio. Stock-based compensation expense for the third quarter of 2007
was $29.3 million versus $20.9 million for the same quarter in 2006.
Net earnings from continuing operations for the third quarter of 2007
increased 5% to $340.2 million from $323.6 million for the same prior-year
period. Diluted earnings per share from continuing operations of $.48
increased 14% from $.42 per diluted share for the same prior-year period
due primarily to lower shares outstanding in 2007. Net earnings increased
8% to $343.3 million from $316.9 million for the third quarter of 2006, and
diluted earnings per share increased 17% to $.48 per diluted share from
$.41 per diluted share for the third quarter of 2006. Net earnings included
net earnings from discontinued operations of $3.1 million for the third
quarter of 2007 versus a net loss from discontinued operations of $6.7
million, or $.01 per diluted share, for the same period last year.
Free cash flow for the third quarter of 2007 was $265.5 million versus
$431.8 million for the same prior-year period. The decrease in the third
quarter 2007 free cash flow reflects lower tax refunds and cash interest
income, higher capital expenditures and the timing of programming
investments. On September 5, 2007, the Company repurchased approximately 51
million shares of its Class B Common Stock for $1.6 billion, subject to
adjustment, through an accelerated share repurchase transaction. Total
shares outstanding at September 30, 2007 were 671.6 million. On September
4, 2007, the Company announced an increase in the quarterly cash dividend
of 14% from $.22 to $.25 per share and approximately $168 million was paid
to stockholders on October 1, 2007.
Nine Months 2007 Results
For the nine months ended September 30, 2007, revenues of $10.3 billion
decreased 1% from $10.4 billion for the same prior-year period, principally
reflecting lower television license fees, the absence of UPN and the impact
of radio and television station divestitures. These decreases were
partially offset by revenues from the 2007 telecast of Super Bowl XLI on
CBS Network and revenue growth at Outdoor and Publishing. OIBDA of $2.3
billion and operating income of $1.9 billion were flat as compared to the
first nine months of 2006, as increases at Publishing and Outdoor and lower
residual costs were offset by a decline at Radio. Stock-based compensation
expense was $80.8 million for the first nine months of 2007 versus $51.7
million for the same prior-year period.
Net earnings from continuing operations for the first nine months of
2007 were $957.7 million, or $1.30 per diluted share. Net earnings from
continuing operations for the same period last year were $1.0 billion, or
$1.36 per diluted share, which included tax benefits of $132.9 million, or
$.17 per diluted share, from income tax settlements. On an adjusted basis,
excluding tax benefits from income tax settlements in both years and the
pre-tax gain and related tax effect of station divestitures, net earnings
from continuing operations increased 8% to $986.9 million for the first
nine months of 2007 from $915.0 million primarily due to a lower effective
income tax rate in 2007. Adjusted diluted earnings per share from
continuing operations increased 13% to $1.34 from $1.19 for the same
prior-year period, due in part to lower shares outstanding in 2007. Net
earnings were $960.8 million, or $1.30 per diluted share, compared to $1.3
billion, or $1.72 per diluted share, for the first nine months of 2006. Net
earnings included net earnings from discontinued operations of $3.1 million
for the first nine months of 2007 versus $277.6 million, or $.36 per
diluted share, for the same prior-year period, which principally reflected
the gain on the sale of Paramount Parks.
Free cash flow for the first nine months of 2007 was $1.59 billion
versus $1.62 billion for the same prior-year period. During the first nine
months of 2007, the Company repurchased a total of 106.9 million shares of
its common stock for $3.4 billion, subject to adjustment, which contributed
to a 13% reduction in shares outstanding.
Business Outlook
When comparing full year 2007 to 2006 on a reported basis, revenues
will be down 2% to 3% as we have disposed of certain lower-margin,
slower-growth assets, including 39 radio stations, 9 television stations,
UPN, and the non- renewal of several of our urban outdoor transit
contracts. Operating income in 2007 will be comparable to 2006 due to the
above factors and higher expense for stock-based compensation.
The long-term outlook remains unchanged. The Company is positioned to
deliver rates of growth as follows: low single-digit growth in revenues,
mid single-digit growth in operating income and high single-digit growth in
earnings per share.
Consolidated and Segment Results
The tables below present the Company's revenues, OIBDA and operating
income by segment for the three and nine months ended September 30, 2007
and 2006 (dollars in millions). Reconciliations of all non-GAAP measures to
reported results have been included at the end of this earnings release.
Three Months Ended Nine Months Ended
September 30, Better/ September 30, Better/
Revenues 2007 2006 (Worse)% 2007 2006 (Worse)%
Television $2,077.6 $2,150.6 (3)% $6,813.6 $6,926.1 (2)%
Radio 445.7 508.1 (12) 1,306.6 1,461.7 (11)
Outdoor 552.2 536.2 3 1,568.7 1,522.8 3
Publishing 214.2 197.4 9 643.8 554.5 16
Eliminations (8.3) (13.5) 39 (18.6) (27.8) 33
Total Revenues $3,281.4 $3,378.8 (3)% $10,314.1 $10,437.3 (1)%
Three Months Ended Nine Months Ended
September 30, Better/ September 30, Better/
OIBDA 2007 2006 (Worse)% 2007 2006 (Worse)%
Television $476.1 $457.1 4% $1,424.6 $1,416.2 1%
Radio 169.6 210.2 (19) 521.3 608.7 (14)
Outdoor 153.5 142.1 8 422.0 401.2 5
Publishing 23.8 22.7 5 67.7 39.1 73
Corporate (41.3) (41.3) - (109.7) (108.7) (1)
Residual costs (24.1) (34.9) 31 (72.4) (105.5) 31
Total OIBDA $757.6 $755.9 -% $2,253.5 $2,251.0 -%
Three Months Ended Nine Months Ended
September 30, Better/ September 30, Better/
Operating Income 2007 2006 (Worse)% 2007 2006 (Worse)%
Television $430.9 $414.4 4% $1,287.1 $1,289.1 -%
Radio 162.0 201.7 (20) 498.2 583.9 (15)
Outdoor 99.8 88.5 13 262.1 240.9 9
Publishing 21.6 20.3 6 61.1 32.2 90
Corporate (44.4) (43.6) (2) (119.1) (115.7) (3)
Residual costs (24.1) (34.9) 31 (72.4) (105.5) 31
Total Operating
Income $645.8 $646.4 -% $1,917.0 $1,924.9 -%
Television (CBS Television Network, CBS Television Stations, CBS
Paramount Network Television, CBS Television Distribution, Showtime
Networks and CSTV Networks)
Television revenues for the third quarter of 2007 decreased 3% to $2.08
billion from $2.15 billion for the same prior-year period reflecting lower
television license fees and advertising revenues partially offset by higher
affiliate revenues. Television license fees decreased 9% reflecting the
timing of foreign syndication and fewer titles available for domestic
syndication versus the prior year which included the domestic syndication
sale of CSI: Miami. Advertising revenues decreased 4% as underlying growth
was more than offset by the absence of UPN and the impact of television
station divestitures. Affiliate revenues increased 5% reflecting rate
increases and subscriber growth at both Showtime Networks and CSTV
Networks.
Television OIBDA and operating income for the third quarter of 2007
both increased 4% to $476.1 million and $430.9 million, respectively,
primarily due to higher profits from the mix of titles in syndication,
underlying advertising revenue growth and higher affiliate revenues.
Television results included stock-based compensation of $14.9 million and
$10.1 million for the third quarter of 2007 and 2006, respectively.
Radio (CBS Radio)
Radio revenues for the third quarter of 2007 decreased 12% to $445.7
million from $508.1 million for the same prior-year period, reflecting the
impact of the previously announced radio station sales in ten markets, as
well as weakness in advertising sales. On a "same station" basis, excluding
divested stations, Radio revenues decreased 7% from the third quarter of
2006.
Radio OIBDA for the third quarter of 2007 decreased 19% to $169.6
million and operating income decreased 20% to $162.0 million, resulting
from the decline in advertising sales, the impact of station divestitures
and the absence of a 2006 gain of $11.6 million on the sale of a building.
Radio results included stock-based compensation of $3.9 million and $3.8
million for the third quarter of 2007 and 2006, respectively.
Outdoor (CBS Outdoor)
Outdoor revenues for the third quarter of 2007 increased 3% to $552.2
million from $536.2 million for the same prior-year period, principally
reflecting a 13% increase in Europe and Asia due to favorable fluctuations
in foreign exchange rates and growth in the U.K., Italy and France markets.
In constant dollars, Outdoor revenues were flat for the quarter. North
America revenues for the third quarter decreased 2% from the prior year as
growth of 7% in U.S. billboards, 15% in Canada and 13% in Mexico was more
than offset by a 30% decline in U.S. transit and displays, reflecting the
non-renewal of marginally profitable transit and street furniture contracts
in New York City and Chicago.
Outdoor OIBDA increased 8% to $153.5 million and operating income
increased 13% to $99.8 million for the third quarter of 2007, reflecting
growth in North America and Europe and Asia. North America OIBDA increased
8% to $134.3 million and operating income increased 14% to $89.3 million,
led by growth in the U.S. billboard business. Europe and Asia OIBDA
increased 12% to $19.2 million and operating income increased 6% to $10.5
million, driven by the revenue increase partially offset by higher transit
lease costs, primarily in the U.K. Outdoor results included stock-based
compensation of $1.5 million and $1.1 million for the third quarter of 2007
and 2006, respectively.
On October 5, 2007, the Company acquired SignStorey, a leader in the
distribution of video programming and advertising content to retail stores,
which has been renamed CBS Outernet, for $71.5 million.
Publishing (Simon & Schuster)
Publishing revenues for the third quarter of 2007 increased 9% to
$214.2 million from $197.4 million for the same prior-year period,
principally reflecting higher sales from top-selling titles including
Become A Better You by Joel Osteen and the continued success of The Secret
by Rhonda Byrne. OIBDA increased 5% to $23.8 million from $22.7 million and
operating income increased 6% to $21.6 million from $20.3 million,
reflecting the revenue increase and lower bad debt expense partially offset
by higher royalty expenses, employee-related costs, volume-driven
advertising and selling expenses and digital archive costs. Publishing
results included stock-based compensation of $.9 million and $.5 million
for the third quarter of 2007 and 2006, respectively.
Corporate
Corporate expenses before depreciation expense of $41.3 million for the
third quarter of 2007 remained flat with the same prior-year period.
Corporate expenses included stock-based compensation of $8.1 million and
$5.4 million for the third quarter of 2007 and 2006, respectively.
Residual Costs
Residual costs primarily include pension and postretirement benefits
costs for benefit plans retained by the Company for previously divested
businesses. For the quarter, residual costs decreased to $24.1 million from
$34.9 million for the same prior-year period, primarily due to the
recognition of lower actuarial losses and the impact of $250 million of
discretionary contributions made during 2006 to pre-fund one of the
Company's qualified pension plans.
Interest Expense
Interest expense of $141.7 million for the third quarter of 2007
increased from $140.1 million for the same prior-year period.
Interest Income
Interest income of $30.0 million for the third quarter of 2007
decreased from $41.4 million for the same prior-year period, primarily
reflecting lower average cash balances as a result of the two accelerated
share repurchase transactions in 2007.
Other Items, Net
"Other items, net" for the first nine months of 2007 included a pre-tax
gain of $12.6 million resulting from the divestitures of television and
radio stations.
Provision for Income Taxes
For the third quarter, the Company's effective income tax rate
decreased to 32.8% for 2007 from 38.7% for 2006 due primarily to lower
state and foreign income taxes in 2007. For the nine-month period, the
effective income tax rate was 38.4% for 2007 versus 31.7% for 2006. The
effective income tax rate for the nine-month period of 2007 reflected the
tax impact of the station divestitures and a benefit from income tax
settlements. The nine-month period of 2006 reflected benefits from income
tax settlements of $132.9 million. Excluding the tax impact of the 2007
station divestitures and the tax benefits from income tax settlements in
both years, the effective income tax rate for the nine-month period
decreased to 36.1% for 2007 from 40.3% for 2006, principally resulting from
lower state and foreign income taxes.
About CBS Corporation
CBS Corporation (NYSE: CBS.A and CBS) is a mass media company with
constituent parts that reach back to the beginnings of the broadcast
industry, as well as newer businesses that operate on the leading edge of
the media industry. The Company, through its many and varied operations,
combines broad reach with well-positioned local businesses, all of which
provide it with an extensive distribution network by which it serves
audiences and advertisers in all 50 states and key international markets.
It has operations in virtually every field of media and entertainment,
including broadcast television (CBS and The CW - a joint venture between
CBS Corporation and Warner Bros. Entertainment), cable television (Showtime
and CSTV Networks), local television (CBS Television Stations), television
production and syndication (CBS Paramount Network Television and CBS
Television Distribution), radio (CBS Radio), advertising on out-of-home
media (CBS Outdoor), publishing (Simon & Schuster), interactive media (CBS
Interactive), music (CBS Records), licensing and merchandising (CBS
Consumer Products) and video/DVD (CBS Home Entertainment). For more
information, log on to http://www.cbscorporation.com.
Cautionary Statement Concerning Forward-looking Statements
This news release contains both historical and forward-looking
statements. All statements, including Business Outlook, other than
statements of historical fact are, or may be deemed to be, forward-looking
statements within the meaning of section 27A of the Securities Act of 1933
and section 21E of the Securities Exchange Act of 1934. These
forward-looking statements are not based on historical facts, but rather
reflect the Company's current expectations concerning future results and
events. Similarly, statements that describe our objectives, plans or goals
are or may be forward-looking statements. These forward-looking statements
involve known and unknown risks, uncertainties and other factors that are
difficult to predict and which may cause the actual results, performance or
achievements of the Company to be different from any future results,
performance and achievements expressed or implied by these statements.
These risks, uncertainties and other factors include, among others:
advertising market conditions generally; changes in the public acceptance
of the Company's programming; changes in technology and its effect on
competition in the Company's markets; changes in the Federal Communications
laws and regulations; the impact of piracy on the Company's products, the
impact of the consolidation in the market for the Company's programming;
other domestic and global economic, business, competitive and/or other
regulatory factors affecting the Company's businesses generally; and other
factors described in the Company's news releases and filings with the
Securities and Exchange Commission including but not limited to the
Company's most recent Form 10-K. The forward-looking statements included in
this document are made only as of the date of this document, and under
section 27A of the Securities Act and section 21E of the Exchange Act, we
do not have any obligation to publicly update any forward-looking
statements to reflect subsequent events or circumstances.
CBS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited; all amounts, except per share amounts, are in millions)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
Revenues $3,281.4 $3,378.8 $10,314.1 $10,437.3
Operating income 645.8 646.4 1,917.0 1,924.9
Interest expense (141.7) (140.1) (427.0) (425.2)
Interest income 30.0 41.4 103.1 72.5
Loss on early
extinguishment of debt - - - (6.0)
Other items, net (8.3) (9.2) (5.5) (27.3)
Earnings before
income taxes 525.8 538.5 1,587.6 1,538.9
Provision for
income taxes (172.5) (208.4) (610.4) (487.6)
Equity in loss of
affiliated companies,
net of tax (13.0) (6.1) (19.8) (3.1)
Minority interest,
net of tax (.1) (.4) .3 (.3)
Net earnings from
continuing operations 340.2 323.6 957.7 1,047.9
Net earnings (loss)
from discontinued
operations 3.1 (6.7) 3.1 277.6
Net earnings $343.3 $316.9 $960.8 $1,325.5
Basic earnings per common share:
Net earnings from
continuing operations $.48 $.42 $1.32 $1.37
Net earnings (loss)
from discontinued
operations $- $(.01) $- $.36
Net earnings $.49 $.41 $1.32 $1.73
Diluted earnings per common share:
Net earnings from
continuing operations $.48 $.42 $1.30 $1.36
Net earnings (loss)
from discontinued
operations $- $(.01) $- $.36
Net earnings $.48 $.41 $1.30 $1.72
Weighted average number of
common shares outstanding:
Basic 707.1 766.0 728.0 764.5
Diluted 715.4 774.2 736.5 770.2
Dividends per common share $.25 $.20 $.69 $.54
CBS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited; Dollars in millions)
At At
September 30, December 31,
2007 2006
Assets
Cash and cash equivalents $1,226.0 $3,074.6
Receivables, net 2,592.9 2,824.0
Programming and other inventory 792.2 982.9
Prepaid expenses and other current assets 1,132.2 1,262.6
Total current assets 5,743.3 8,144.1
Property and equipment 4,581.6 4,274.6
Less accumulated depreciation and
amortization 1,737.1 1,460.8
Net property and equipment 2,844.5 2,813.8
Programming and other inventory 1,645.9 1,665.6
Goodwill 19,081.5 18,821.5
Intangible assets 10,240.4 10,425.0
Other assets 1,546.1 1,638.8
Total Assets $41,101.7 $43,508.8
Liabilities and Stockholders' Equity
Accounts payable $375.6 $502.3
Participants' share and royalties payable 614.3 767.5
Program rights 974.9 906.9
Current portion of long-term debt 19.8 15.0
Accrued expenses and other current liabilities 2,278.6 2,207.8
Total current liabilities 4,263.2 4,399.5
Long-term debt 7,035.9 7,027.3
Other liabilities 8,603.4 8,558.5
Minority interest 1.1 1.0
Stockholders' equity 21,198.1 23,522.5
Total Liabilities and Stockholders' Equity $41,101.7 $43,508.8
CBS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited; Dollars in millions)
Nine Months Ended
September 30,
2007 2006
Operating activities:
Net earnings $960.8 $1,325.5
Less: Net earnings from discontinued operations 3.1 277.6
Net earnings from continuing operations 957.7 1,047.9
Adjustments to reconcile net earnings from
continuing operations to net cash flow
provided by operating activities:
Depreciation and amortization 336.5 326.1
Stock-based compensation 80.8 51.7
Equity in loss of affiliated companies, net of tax 19.8 3.1
Distribution from affiliated companies 4.9 9.8
Change in assets and liabilities, net of
effects of acquisitions 491.4 380.2
Net cash flow from (used for) operating
activities attributable to discontinued
operations 4.8 (74.0)
Net cash flow provided by operating activities 1,895.9 1,744.8
Investing activities:
Capital expenditures (302.2) (195.7)
Acquisitions, net of cash acquired (329.1) (75.3)
Proceeds from dispositions 346.3 1,262.9
Investments in and advances to affiliated
companies (20.9) (48.6)
Net receipts from Viacom Inc. related to the
Separation 174.9 28.4
Other, net (1.2) (.8)
Net cash flow used for investing activities
attributable to discontinued operations - (34.5)
Net cash flow (used for) provided by
investing activities (132.2) 936.4
Financing Activities:
Repayment of notes (660.0) (832.0)
Proceeds from issuance of notes 678.0 -
Borrowings from (repayments to) banks,
including commercial paper, net 1.9 (4.5)
Payment of capital lease obligations (12.6) (10.9)
Purchase of Company common stock (3,351.3) (6.1)
Dividends (472.4) (365.8)
Proceeds from exercise of stock options 195.2 58.0
Excess tax benefit from stock-based compensation 8.9 1.4
Net cash flow used for financing activities (3,612.3) (1,159.9)
Net increase (decrease) in cash and cash
equivalents (1,848.6) 1,521.3
Cash and cash equivalents at beginning of
period 3,074.6 1,655.3
Cash and cash equivalents at end of period $1,226.0 $3,176.6
CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(Unaudited; Dollars in millions)
Operating Income Before Depreciation and Amortization ("OIBDA")
The following tables set forth the Company's Operating Income before
Depreciation and Amortization for the three and nine months ended September
30, 2007 and 2006. The Company defines "Operating Income before
Depreciation and Amortization" ("OIBDA") as net earnings adjusted to
exclude the following line items presented in its Statements of Operations:
Net earnings (loss) from discontinued operations; Minority interest, net of
tax; Equity in loss of affiliated companies, net of tax; Provision for
income taxes; Other items, net; Loss on early extinguishment of debt;
Interest income; Interest expense; and Depreciation and amortization.
The Company uses OIBDA, among other things, to evaluate the Company's
operating performance, to value prospective acquisitions and as one of
several components of incentive compensation targets for certain management
personnel, and this measure is among the primary measures used by
management for planning and forecasting of future periods. This measure is
an important indicator of the Company's operational strength and
performance of its business because it provides a link between
profitability and operating cash flow. The Company believes the
presentation of this measure is relevant and useful for investors because
it allows investors to view performance in a manner similar to the method
used by the Company's management, helps improve their ability to understand
the Company's operating performance and makes it easier to compare the
Company's results with other companies that have different financing and
capital structures or tax rates. In addition, this measure is also among
the primary measures used externally by the Company's investors, analysts
and peers in its industry for purposes of valuation and comparing the
operating performance of the Company to other companies in its industry.
Since OIBDA is not a measure of performance calculated in accordance with
generally accepted accounting principles ("GAAP"), it should not be considered
in isolation of, or as a substitute for, net earnings as an indicator of
operating performance. OIBDA, as the Company calculates it, may not be
comparable to similarly titled measures employed by other companies. In
addition, this measure does not necessarily represent funds available for
discretionary use, and is not necessarily a measure of the Company's ability
to fund its cash needs. As OIBDA excludes certain financial information
compared with net earnings, the most directly comparable GAAP financial
measure, users of this financial information should consider the types of
events and transactions which are excluded. The Company provides the
following reconciliations of Total OIBDA to Net earnings and OIBDA for each
segment to such segment's operating income, the most directly comparable
amounts reported under GAAP.
Three Months Ended September 30, 2007
Depreciation Operating
OIBDA and Income (Loss)
Amortization
Television $476.1 $(45.2) $430.9
Radio 169.6 (7.6) 162.0
Outdoor 153.5 (53.7) 99.8
Publishing 23.8 (2.2) 21.6
Corporate (41.3) (3.1) (44.4)
Residual costs (24.1) - (24.1)
Total $757.6 $(111.8) $645.8
Three Months Ended September 30, 2006
Depreciation Operating
OIBDA and Income (Loss)
Amortization
Television $457.1 $(42.7) $414.4
Radio 210.2 (8.5) 201.7
Outdoor 142.1 (53.6) 88.5
Publishing 22.7 (2.4) 20.3
Corporate (41.3) (2.3) (43.6)
Residual costs (34.9) - (34.9)
Total $755.9 $(109.5) $646.4
Three Months Ended September 30,
2007 2006
Total operating income before depreciation &
amortization $757.6 $755.9
Depreciation and amortization (111.8) (109.5)
Operating income 645.8 646.4
Interest expense (141.7) (140.1)
Interest income 30.0 41.4
Other items, net (8.3) (9.2)
Earnings before income taxes 525.8 538.5
Provision for income taxes (172.5) (208.4)
Equity in loss of affiliated companies,
net of tax (13.0) (6.1)
Minority interest, net of tax (.1) (.4)
Net earnings from continuing operations 340.2 323.6
Net earnings (loss) from discontinued operations 3.1 (6.7)
Net earnings $343.3 $316.9
Nine Months Ended September 30, 2007
Depreciation Operating
OIBDA and Income (Loss)
Amortization
Television $1,424.6 $(137.5) $1,287.1
Radio 521.3 (23.1) 498.2
Outdoor 422.0 (159.9) 262.1
Publishing 67.7 (6.6) 61.1
Corporate (109.7) (9.4) (119.1)
Residual costs (72.4) - (72.4)
Total $2,253.5 $(336.5) $1,917.0
Nine Months Ended September 30, 2006
Depreciation Operating
OIBDA and Income (Loss)
Amortization
Television $1,416.2 $(127.1) $1,289.1
Radio 608.7 (24.8) 583.9
Outdoor 401.2 (160.3) 240.9
Publishing 39.1 (6.9) 32.2
Corporate (108.7) (7.0) (115.7)
Residual costs (105.5) - (105.5)
Total $2,251.0 $(326.1) $1,924.9
Nine Months Ended September 30,
2007 2006
Total operating income before depreciation &
amortization $2,253.5 $2,251.0
Depreciation and amortization (336.5) (326.1)
Operating income 1,917.0 1,924.9
Interest expense (427.0) (425.2)
Interest income 103.1 72.5
Loss on early extinguishment of debt - (6.0)
Other items, net (5.5) (27.3)
Earnings before income taxes 1,587.6 1,538.9
Provision for income taxes (610.4) (487.6)
Equity in loss of affiliated companies,
net of tax (19.8) (3.1)
Minority interest, net of tax .3 (.3)
Net earnings from continuing operations 957.7 1,047.9
Net earnings from discontinued operations 3.1 277.6
Net earnings $960.8 $1,325.5
Free Cash Flow
Free cash flow reflects the Company's net cash flow from operating
activities less capital expenditures and operating cash flow of
discontinued operations. The Company uses free cash flow, among other
measures, to evaluate its operating performance. Management believes free
cash flow provides investors with an important perspective on the cash
available to service debt, make strategic acquisitions and investments,
maintain its capital assets, satisfy its tax obligations and fund ongoing
operations and working capital needs. As a result, free cash flow is a
significant measure of the Company's ability to generate long term value.
It is useful for investors to know whether this ability is being enhanced
or degraded as a result of the Company's operating performance. The Company
believes the presentation of free cash flow is relevant and useful for
investors because it allows investors to view performance in a manner
similar to the method used by management. In addition, free cash flow is
also a primary measure used externally by the Company's investors, analysts
and peers in its industry for purposes of valuation and comparing the
operating performance of the Company to other companies in its industry.
As free cash flow is not a measure of performance calculated in
accordance with GAAP, free cash flow should not be considered in isolation
of, or as a substitute for, net earnings as an indicator of operating
performance or net cash flow provided by operating activities as a measure
of liquidity. Free cash flow, as the Company calculates it, may not be
comparable to similarly titled measures employed by other companies. In
addition, free cash flow does not necessarily represent funds available for
discretionary use and is not necessarily a measure of the Company's ability
to fund its cash needs. As free cash flow deducts capital expenditures and
operating cash flow of discontinued operations from net cash flow provided
by operating activities, the most directly comparable GAAP financial
measure, users of this financial information should consider the types of
events and transactions which are not reflected. The Company provides below
a reconciliation of free cash flow to net cash flow provided by operating
activities, the most directly comparable amount reported under GAAP.
The following table presents a reconciliation of the Company's net cash
flow provided by operating activities to free cash flow:
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
Net cash flow provided by
operating activities $365.9 $407.3 $1,895.9 $1,744.8
Less capital expenditures 95.6 82.5 302.2 195.7
Less operating cash flow of
discontinued operations 4.8 (107.0) 4.8 (74.0)
Free cash flow $265.5 $431.8 $1,588.9 $1,623.1
The following table presents a summary of the Company's cash flows:
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
Net cash flow provided
by operating activities $365.9 $407.3 $1,895.9 $1,744.8
Net cash flow (used for)
provided by investing
activities $(89.2) $(171.9) $(132.2) $936.4
Net cash flow used
for financing activities $(1,847.5) $(120.6) $(3,612.3) $(1,159.9)
2007 and 2006 Nine Month Adjusted Results
The following tables reconcile financial measures excluding the impact of
the 2007 pre-tax gain and related tax provision of the television and radio
station divestitures and the 2007 and 2006 tax benefits from the settlement of
certain income tax audits, to the reported measures included in this earnings
release. The Company believes that adjusting its financial results for the
impact of these items is relevant and useful for investors because it allows
investors to view performance in a manner similar to the method used by the
Company's management, provides a clearer perspective on the current underlying
performance of the Company and makes it easier to compare the Company's year-
over-year results.
Nine Months Ended September 30, 2007
2007 Station Tax 2007 Increase
Reported Divestitures Benefits Adjusted vs.
(a) (b) 2006
Adjusted
Revenues $10,314.1 $- $- $10,314.1
OIBDA 2,253.5 - - 2,253.5
Operating income 1,917.0 - - 1,917.0
Interest expense (427.0) - - (427.0)
Interest income 103.1 - - 103.1
Other items, net (5.5) (12.6) - (18.1)
Earnings before
income taxes 1,587.6 (12.6) - 1,575.0
Provision for
income taxes (610.4) 49.7 (7.9) (568.6)
Effective income
tax rate 38.4% 36.1%
Equity in loss
of affiliated
companies, net of tax (19.8) - - (19.8)
Minority interest,
net of tax .3 - - .3
Net earnings from
continuing operations $957.7 $37.1 $(7.9) $986.9 8%
Diluted EPS from
continuing operations $1.30 $.05 $(.01) $1.34 13%
Diluted weighted
average number
of common shares
outstanding 736.5 736.5 736.5 736.5
Nine Months Ended September 30, 2006
2006 Tax 2006
Reported Benefits(b) Adjusted
Revenues $10,437.3 $- $10,437.3
OIBDA 2,251.0 - 2,251.0
Operating income 1,924.9 - 1,924.9
Interest expense (425.2) - (425.2)
Interest income 72.5 - 72.5
Loss on early extinguishment
of debt (6.0) - (6.0)
Other items, net (27.3) - (27.3)
Earnings before income taxes 1,538.9 - 1,538.9
Provision for income taxes (487.6) (132.9) (620.5)
Effective income tax rate 31.7% 40.3%
Equity in loss of affiliated
companies, net of tax (3.1) - (3.1)
Minority interest, net of tax (.3) - (.3)
Net earnings from continuing
operations $1,047.9 $(132.9) $915.0
Diluted EPS from
continuing operations $1.36 $(.17) $1.19
Diluted weighted average
number of common shares
outstanding 770.2 770.2 770.2
(a) Impact of the pre-tax gain and related tax provision of the
divestitures of television and radio stations.
(b) Tax benefits from the settlement of certain income tax audits.
Radio Segment "Same Station" Reconciliation
In connection with the previously announced sales of 39 radio stations
in ten of its smaller markets, the Company has completed the sales of its
stations in six of these markets (24 stations) and expects to close on the
remaining markets by early 2008. The following table presents the revenues
for the Radio segment on a "same station" basis, which excludes all
revenues for the divested stations, for all periods presented. The Company
believes that adjusting the revenues of the Radio segment for the impact of
station divestitures provides investors with a clearer perspective on the
current underlying financial performance of the Radio segment.
Three Months Ended Nine Months Ended
September 30, September 30,
Better/ Better/
2007 2006 (Worse)% 2007 2006 (Worse)%
Radio revenues, as
reported $445.7 $508.1 (12%) $1,306.6 $1,461.7 (11%)
Divested stations (4.1) (35.3) n/m (16.3) (100.9) n/m
Radio revenues, "same
station" basis $441.6 $472.8 (7%) $1,290.3 $1,360.8 (5%)
n/m - not meaningful
SOURCE CBS Corporation
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http://www.prnewswire.com/comp/965075.html / (CBS)
CONTACT:
Press: Gil Schwartz, Executive Vice
President, Corporate Communications, +1-212-975-2121,
gdschwartz@cbs.com, Dana McClintock, Senior Vice President,
Corporate Communications, +1-212-975-1077, dlmcclintock@cbs.com,
or Investors: Martin Shea, Executive Vice President, Investor
Relations, +1-212-975-8571, marty.shea@cbs.com, Debra Wichser,
Vice President, Investor Relations, +1-212-975-3718,
debra.wichser@cbs.com
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