CBS Corporation (ticker: CBS, exchange: New York Stock Exchange (.N))
News Release -
6-Aug-2009
CBS Corporation Reports Second Quarter 2009 Results NEW YORK, Aug. 6 /PRNewswire-FirstCall/ -- CBS Corporation (NYSE: CBS.A
and CBS) today reported results for the second quarter ended June 30, 2009,
with revenues of $3.01 billion, adjusted earnings per share of $.08 on a
diluted basis and free cash flow of $351.7 million.
"Leslie and his management team continue to run CBS with a sure and steady
hand," said Sumner Redstone, Executive Chairman, CBS Corporation. "We are
focused on what matters most: maintaining financial flexibility and
positioning the Company as one of the leading beneficiaries in an economic
recovery. I am proud of the work our people do each day to achieve these
goals, and confident in CBS's bright future."
"As we anticipated, early signs of a recovery took hold in the second
quarter, and our revenue, profit and EPS trends were all better than in the
first quarter," said Leslie Moonves, President and Chief Executive Officer,
CBS Corporation. "We continue to believe that the back half of the year will
be considerably stronger than the first. We are particularly encouraged by
the strong performance of our many content businesses. Following a season
where we were the only Network to grow in all key demos, CBS is again alone in
adding viewers this summer, and well positioned to carry that momentum into
the fall. We also have a strong slate of syndication titles in the pipeline
for release between now and year-end. And we continue to see the benefits of
the aggressive steps we have taken to reduce expenses throughout the Company.
As the U.S. economy improves, we are confident we can deliver stronger
financial results in both the near and longer term."
Second Quarter 2009 Results
Revenues for the second quarter of 2009 totaled $3.01 billion compared to
$3.39 billion for the same quarter last year due to lower advertising sales,
as the softness in the advertising marketplace continued during the second
quarter. The decline in advertising sales was partially offset by the
acquisition of CNET Networks ("CNET").
Operating income before depreciation and amortization ("OIBDA") for the
second quarter of 2009 was $387.4 million compared with $760.4 million for
last year's second quarter. Operating income was $242.2 million versus $637.0
million for the same quarter last year. In both cases, lower advertising
sales were partially offset by lower expenses associated with cost-savings
initiatives and the acquisition of CNET.
Adjusted net earnings for the second quarter of 2009 exclude two items.
During the second quarter, the Company utilized the proceeds from new debt
offerings to repurchase senior notes due 2010 resulting in a pre-tax loss on
early extinguishment of debt of $30.5 million. In addition, the Company had a
$23.3 million reduction of deferred tax assets associated with stock-based
compensation. On an adjusted basis, excluding these two items, net earnings
for the second quarter of 2009 were $57.4 million, or $.08 per diluted share,
versus $330.1 million, or $.49 per diluted share, for the same quarter last
year reflecting lower operating income. Adjusted results for the second
quarter of 2008 exclude a pre-tax gain of $127.2 million on the sale of the
Company's investment in Sundance Channel.
Reported net earnings were $15.4 million, or $.02 per diluted share, for
the second quarter of 2009 versus net earnings of $408.4 million, or $.61 per
diluted share, for the same quarter last year, reflecting lower operating
income.
Free cash flow for the second quarter of 2009 was $351.7 million.
First Half 2009 Results
Revenues were $6.17 billion for the first half of 2009 versus $7.05
billion for the same prior-year period reflecting lower advertising sales and
lower television license fees, primarily due to the absence of the initial
benefit in 2008 of the international self-distribution arrangement for the CSI
franchise, which was previously distributed by a third-party. These declines
were partially offset by the acquisition of CNET and higher affiliate
revenues.
OIBDA for the first half of 2009 was $637.2 million versus $1.40 billion
for the same prior-year period, and operating income was $349.7 million versus
$1.16 billion for the same prior-year period. These decreases were due to the
decline in advertising sales, as well as higher television series costs in the
absence of the 2008 Writer's Guild of America ("WGA") strike. These were
partially offset by the acquisition of CNET, lower expenses associated with
cost-savings initiatives and lower restructuring charges in 2009.
On an adjusted basis, net earnings for the first half of 2009 were $20.4
million, or $.03 per diluted share, versus $574.4 million, or $.85 per diluted
share, for the same period last year principally driven by lower operating
income. Adjusted results for the first half of 2009 exclude a pre-tax loss of
$29.8 million on early extinguishment of debt and a $42.1 million reduction of
deferred tax assets associated with stock-based compensation. Adjusted
results for the first half of 2008 exclude a pre-tax gain of $127.2 million on
the sale of the Company's investment in Sundance Channel.
The Company reported a net loss of $39.9 million, or a loss of $.06 per
diluted share, for the first half of 2009 versus net earnings of $652.7
million, or $.97 per diluted share, for the same prior-year period,
principally driven by lower operating income.
Free cash flow was $556.0 million for the first half of 2009.
Business Outlook
The Company continues to expect full year 2009 OIBDA to be in the range of
$1.725 billion to $1.925 billion.
Consolidated and Segment Results
The tables below present the Company's revenues, OIBDA and operating
income (loss) by segment for the three and six months ended June 30, 2009 and
2008 (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 Six Months Ended
June 30, June 30,
Revenues 2009 2008 2009 2008
---------- ---- ----- ---- -----
Television $1,947.5 $2,160.9 $4,178.1 $4,705.6
Radio 322.0 416.4 581.7 779.9
Outdoor 434.1 598.1 814.0 1,095.0
Interactive 126.4 40.2 260.0 93.1
Publishing 181.4 186.0 343.1 387.6
Eliminations (5.1) (7.9) (10.7) (13.4)
---------- ----- ----- ----- -----
Total Revenues $3,006.3 $3,393.7 $6,166.2 $7,047.8
-------------- -------- -------- -------- --------
Three Months Ended Six Months Ended
June 30, June 30,
OIBDA 2009 2008 2009 2008
----- ---- ----- ---- -----
Television $306.7 $512.4 $535.4 $960.8
Radio 95.3 158.6 147.5 280.9
Outdoor 42.2 153.6 67.3 255.1
Interactive 5.7 (16.8) 13.9 (15.7)
Publishing 8.1 17.0 8.2 34.1
Corporate (34.7) (41.9) (63.2) (67.9)
Residual costs (35.9) (22.5) (71.9) (44.9)
-------------- ----- ----- ----- -----
Total OIBDA $387.4 $760.4 $637.2 $1,402.4
-------------- -------- -------- -------- --------
Three Months Ended Six Months Ended
June 30, June 30,
Operating Income (Loss) 2009 2008 2009 2008
----------------------- ---- ----- ---- -----
Television $264.4 $468.1 $449.1 $872.9
Radio 86.0 150.7 129.7 265.7
Outdoor (24.8) 92.4 (63.0) 136.5
Interactive (14.1) (21.3) (25.7) (24.0)
Publishing 6.1 14.6 4.0 29.2
Corporate (39.5) (45.0) (72.5) (74.2)
Residual costs (35.9) (22.5) (71.9) (44.9)
-------------- ----- ----- ----- -----
Total Operating Income $242.2 $637.0 $349.7 $1,161.2
---------------------- ------ ------ ------ --------
Television (CBS Television Network, CBS Television Stations, CBS
Television Studios, CBS Television Distribution, CBS College Sports Network
and Showtime Networks)
Television revenues for the second quarter of 2009 decreased 10% to $1.95
billion from $2.16 billion for the same prior-year period primarily due to
lower advertising sales, home entertainment revenues and television license
fees partially offset by higher affiliate revenues. The following table
presents revenues by type for the Television segment for the three months
ended June 30, 2009 and 2008.
Three Months Ended June 30,
---------------------------
Television Revenues by % of % of
Type 2009 Total 2008 Total
---------------------- ---- ----- ---- -----
Advertising sales $1,154.4 59% $1,333.6 62%
Television license fees 347.9 18 368.5 17
Affiliate revenues 328.8 17 299.9 14
Home entertainment 44.4 2 82.7 4
Other 72.0 4 76.2 3
----- ---- -- ---- --
Total Television
Revenues $1,947.5 100% $2,160.9 100%
---------------- -------- --- -------- ---
Advertising sales for the Television segment decreased 13% due to softness
in the advertising marketplace, primarily at the local level. Television
license fees were down 6% primarily due to the absence of the initial benefit
in 2008 of the international self-distribution arrangement for the CSI
franchise, which was previously distributed by a third-party. Affiliate
revenues were up 10% over the prior-year primarily due to growth in
subscriptions and rate increases at Showtime Networks and higher
retransmission revenues.
Television OIBDA and operating income for the second quarter of 2009
decreased 40% to $306.7 million and 44% to $264.4 million, respectively,
resulting from lower advertising sales as well as higher television series
costs in the absence of the 2008 WGA strike, partially offset by lower
expenses as a result of restructuring and cost-savings initiatives. Second
quarter 2009 results also include a $14.0 million charge to write down
programming inventory to its net realizable value and $4.1 million of
restructuring charges principally related to exiting a broadcasting equipment
lease upon completion of the digital conversion.
Radio (CBS Radio)
Radio revenues for the second quarter of 2009 decreased 23% to $322.0
million from $416.4 million for the same prior-year period, primarily due to
continued weakness in the radio advertising marketplace.
Radio OIBDA and operating income for the second quarter of 2009 decreased
40% to $95.3 million and 43% to $86.0 million, respectively, due to the
aforementioned lower advertising sales. This decrease is partially offset by
lower talent and employee-related costs resulting from restructuring and
cost-savings initiatives.
Outdoor (CBS Outdoor)
Outdoor revenues for the second quarter of 2009 decreased 27% to $434.1
million from $598.1 million for the same prior-year period, reflecting the
soft worldwide advertising marketplace and the unfavorable impact of foreign
exchange rate changes as the U.S. dollar strengthened in the second quarter.
In constant dollars, Outdoor revenues decreased 21% from the second quarter of
2008.
North America revenues for the second quarter of 2009 decreased 22% (20%
in constant dollars) to $278.1 million from $354.8 million for the same
prior-year period, primarily due to lower revenues from the U.S. billboards
business and changes in foreign exchange rates. For the second quarter of
2009, International revenues decreased 36% (24% in constant dollars) to $156.0
million from $243.3 million for the same quarter last year primarily as a
result of lower advertising sales in the soft European marketplace and foreign
exchange rate changes.
Outdoor OIBDA for the second quarter of 2009 decreased 73% to $42.2
million from $153.6 million for the same prior-year period. Outdoor reported
an operating loss of $24.8 million for the second quarter of 2009 versus
operating income of $92.4 million for the same quarter last year. Outdoor's
franchise and lease costs are generally fixed in nature and, with lower
revenues in the difficult worldwide advertising marketplace, many of Outdoor's
current transit contracts are operating at their minimum guarantee levels,
which significantly reduced OIBDA and operating income margins in the second
quarter of 2009. Second quarter results also include restructuring charges
related to headcount reductions of $2.5 million in 2009 and $2.6 million in
2008.
For the second quarter of 2009, North America reported OIBDA of $62.4
million, a decrease of 51% from the same quarter last year, and operating
income of $15.1 million versus $79.7 million for the same quarter last year.
For the second quarter, International reported an OIBDA loss of $20.2 million
in 2009 versus income of $26.9 million for the same prior-year period and an
operating loss of $39.9 million in 2009 versus operating income of $12.7
million for the same prior-year period. The operating loss for International
was negatively affected by higher depreciation expense in the second quarter
of 2009 versus the same quarter last year.
Interactive (CBS Interactive)
Interactive revenues for the second quarter of 2009 increased to $126.4
million from $40.2 million for the same quarter last year, reflecting the
acquisition of CNET. On a comparable basis, Interactive revenues decreased 8%
from the second quarter of 2008.
Interactive OIBDA of $5.7 million for the second quarter of 2009 increased
from a loss of $16.8 million for the same prior-year period primarily due to
the acquisition of CNET. Interactive reported an operating loss of $14.1
million for the second quarter of 2009 versus an operating loss of $21.3
million for the same quarter last year resulting from depreciation and
amortization expense associated with higher fixed and intangible asset
balances as a result of the CNET acquisition.
Publishing (Simon & Schuster)
Publishing revenues for the second quarter of 2009 decreased 2% to $181.4
million from $186.0 million for the same prior-year period principally
reflecting the unfavorable impact of foreign exchange rate changes.
Publishing OIBDA and operating income for the second quarter of 2009
decreased 52% to $8.1 million and 58% to $6.1 million, respectively. These
decreases were largely driven by higher author royalties and restructuring
charges of $2.2 million related to headcount reductions partially offset by
lower employee-related expenses resulting from cost-savings initiatives.
Corporate
Corporate expenses before depreciation expense decreased 17% to $34.7
million for the second quarter of 2009 from $41.9 million for the same
prior-year period primarily reflecting the favorable impact from the early
termination of a real estate lease arrangement.
Residual Costs
Residual costs primarily include pension and postretirement benefits costs
for benefit plans retained by the Company for previously divested businesses.
Residual costs increased to $35.9 million for the second quarter of 2009 from
$22.5 million for the same quarter last year primarily as a result of pension
plan asset performance.
Interest Expense
Interest expense of $133.9 million for the second quarter of 2009
decreased from $134.3 million for the same prior-year period.
Interest Income
Interest income of $1.1 million for the second quarter of 2009 decreased
from $15.2 million for the same quarter last year reflecting lower average
cash balances and lower interest rates.
Loss on Early Extinguishment of Debt
The Company recognized a $30.5 million loss on early extinguishment of
debt in the second quarter of 2009 associated with the repurchase of senior
notes due 2010.
Other Items, Net
"Other items, net" for the second quarter of 2009 was a net loss of $3.5
million principally reflecting foreign currency exchange losses. "Other items,
net" for the same prior-year period included a pre-tax gain of $127.2 million
on the sale of the Company's investment in Sundance Channel.
Provision for Income Taxes
For the second quarter, the Company's provision for income taxes was $56.9
million for 2009 and $232.9 million for 2008 on earnings before income taxes
of $75.4 million for 2009 and $642.8 million for 2008. The second quarter
2009 income tax provision includes a $23.3 million reduction of deferred tax
assets associated with stock-based compensation. On an adjusted basis,
excluding the impact of this reduction of deferred tax assets and
divestitures, the second quarter effective income tax rate was 42.9% for 2009
versus 35.7% for 2008.
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 Networks and CBS College Sports
Network), local television (CBS Television Stations), television production
and syndication (CBS Television Studios and CBS Television Distribution),
radio (CBS Radio), advertising on out-of-home media (CBS Outdoor), publishing
(Simon & Schuster), interactive media (CBS Interactive), music (CBS Records),
licensing and merchandising (CBS Consumer Products), video/DVD (CBS Home
Entertainment), in-store media (CBS Outernet) and motion pictures (CBS Films).
For more information, log on to www.cbscorporation.com.
Cautionary Statement Concerning Forward-looking Statements
This news release contains both historical and forward-looking statements.
All statements, 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 or achievements expressed or
implied by these statements. These risks, uncertainties and other factors
include, among others: advertising market conditions generally; changes in the
public acceptance of the Company's programming; changes in technology and its
effect on competition in the Company's markets; changes in the Federal
Communications laws and regulations; the impact of piracy on the Company's
products, the impact of the consolidation in the market for the Company's
programming; other domestic and global economic, business, competitive and/or
other regulatory factors affecting the Company's businesses generally; the
impact of union activity, including possible strikes or work stoppages or the
Company's inability to negotiate favorable terms for contract renewals; and
other factors described in the Company's news releases and filings with the
Securities and Exchange Commission including but not limited to the Company's
most recent Form 10-K. 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 Six Months Ended
June 30, June 30,
2009 2008 2009 2008
---- ---- ---- ----
Revenues $3,006.3 $3,393.7 $6,166.2 $7,047.8
-------- -------- -------- -------- --------
Operating income 242.2 637.0 349.7 1,161.2
Interest expense (133.9) (134.3) (267.1) (273.0)
Interest income 1.1 15.2 2.7 32.8
Loss on early
extinguishment of debt (30.5) - (29.8) -
Other items, net (3.5) 124.9 (15.4) 124.7
---------------- ---- ----- ----- -----
Earnings before income
taxes 75.4 642.8 40.1 1,045.7
Provision for income taxes (56.9) (232.9) (65.7) (384.2)
Equity in loss of investee
companies, net of tax (3.1) (1.5) (14.3) (8.8)
-------------------------- ---- ---- ----- ----
Net earnings (loss) $15.4 $408.4 $(39.9) $652.7
------------------ ----- ------ ------ ------
Basic net earnings (loss)
per common share $.02 $.61 $(.06) $.98
Diluted net earnings
(loss) per common share $.02 $.61 $(.06) $.97
Weighted average number of
common shares
outstanding:
Basic 673.4 669.4 672.5 668.7
Diluted 680.2 674.3 672.5 674.0
Dividends per common share $.05 $.27 $.10 $.52
-------------------------- ---- ---- ---- ----
CBS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited; Dollars in millions)
At At
June 30, December 31,
2009 2008
---- ----
Assets
Cash and cash equivalents $341.5 $419.5
Receivables, net 2,677.2 2,749.9
Programming and other inventory 648.5 1,027.3
Prepaid expenses and other current assets 1,043.9 996.1
----------------------------------------- ------- -----
Total current assets 4,711.1 5,192.8
-------------------- ------- -------
Property and equipment 5,032.4 4,899.5
Less accumulated depreciation and
amortization 2,074.0 1,891.2
--------------------------------- ------- -------
Net property and equipment 2,958.4 3,008.3
-------------------------- ------- -------
Programming and other inventory 1,459.5 1,578.1
Goodwill 8,659.4 8,647.8
Intangible assets 7,037.9 7,104.2
Other assets 1,199.6 1,358.1
Total Assets $26,025.9 $26,889.3
------------ --------- ---------
Liabilities and Stockholders' Equity
Accounts payable $384.0 $462.8
Participants' share and royalties payable 1,012.1 962.3
Program rights 691.5 840.1
Current portion of long-term debt 22.5 21.3
Accrued expenses and other current
liabilities 2,026.8 2,514.4
---------------------------------- ------- -------
Total current liabilities 4,136.9 4,800.9
------------------------- ------- -------
Long-term debt 6,964.3 6,974.8
Other liabilities 6,314.6 6,516.3
Stockholders' equity 8,610.1 8,597.3
Total Liabilities and Stockholders' Equity $26,025.9 $26,889.3
------------------------------------------ --------- ---------
CBS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited; Dollars in millions)
Six Months Ended
June 30,
2009 2008
---- ----
Operating activities:
Net earnings (loss) $(39.9) $652.7
Adjustments to reconcile net earnings
(loss) to net cash flow
provided by operating activities:
Depreciation and amortization 287.5 241.2
Stock-based compensation 66.8 72.2
Loss on early extinguishment of debt 29.8 -
Equity in loss of investee companies, net
of tax and distributions 15.8 14.6
Decrease to accounts receivable
securitization program (300.0) -
Change in assets and liabilities, net of
effects of acquisitions 335.3 641.7
---------------------------------------- ----- -----
Net cash flow provided by operating
activities 395.3 1,622.4
----------------------------------- ----- -------
Investing activities:
Acquisitions, net of cash acquired (9.3) (1,886.2)
Capital expenditures (139.3) (220.2)
Investments in and advances to investee
companies (23.7) (18.2)
Purchases of marketable securities (35.6) (20.8)
Proceeds from dispositions 22.5 360.4
Proceeds from sales of marketable
securities - 10.0
Other, net (.4) (13.7)
---------- --- -----
Net cash flow used for investing activities (185.8) (1,788.7)
------------------------------------------- ------ --------
Financing activities:
Repayments to banks, including commercial
paper, net (2.3) (4.0)
Proceeds from issuance of senior notes 974.4 -
Repayment of senior notes (1,007.5) -
Payment of capital lease obligations (7.7) (9.4)
Dividends (228.6) (343.2)
Purchase of Company common stock (16.5) (44.7)
Proceeds from exercise of stock options - 31.2
Excess tax benefit from stock-based
compensation .7 3.4
----------------------------------- -- ---
Net cash flow used for financing activities (287.5) (366.7)
------------------------------------------- ------ ------
Net decrease in cash and cash equivalents (78.0) (533.0)
Cash and cash equivalents at beginning of
period 419.5 1,346.9
----------------------------------------- ----- -------
Cash and cash equivalents at end of period $341.5 $813.9
------------------------------------------ ------ ------
CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(Unaudited; Dollars in millions)
Operating Income Before Depreciation and Amortization
The following tables set forth the Company's Operating Income Before
Depreciation and Amortization ("OIBDA") for the three and six months ended
June 30, 2009 and 2008. The Company defines OIBDA as net earnings (loss)
adjusted to exclude the following line items presented in its Statements of
Operations: Equity in loss of investee companies, net of tax; Provision 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 (loss) as an indicator
of operating performance. OIBDA, as the Company calculates it, may not be
comparable to similarly titled measures employed by other companies. In
addition, this measure does not necessarily represent funds available for
discretionary use, and is not necessarily a measure of the Company's ability
to fund its cash needs. As OIBDA excludes certain financial information
compared with net earnings (loss), the most directly comparable GAAP financial
measure, users of this financial information should consider the types of
events and transactions which are excluded. The Company provides the
following reconciliations of total OIBDA to net earnings (loss) and OIBDA for
each segment to such segment's operating income (loss), the most directly
comparable amounts reported under GAAP.
CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(continued)
(Unaudited; Dollars in millions)
Three Months Ended June 30, 2009
--------------------------------
Depreciation Operating
OIBDA and Amortization Income (Loss)
----- ------------------ ---------------
Television $306.7 $(42.3) $264.4
Radio 95.3 (9.3) 86.0
Outdoor 42.2 (67.0) (24.8)
Interactive 5.7 (19.8) (14.1)
Publishing 8.1 (2.0) 6.1
Corporate (34.7) (4.8) (39.5)
Residual costs (35.9) - (35.9)
-------------- ----- ------ -----
Total $387.4 $(145.2) $242.2
----- ------ ------- ------
Three Months Ended June 30, 2008
--------------------------------
Depreciation Operating
OIBDA and Amortization Income (Loss)
----- ------------------ ---------------
Television $512.4 $(44.3) $468.1
Radio 158.6 (7.9) 150.7
Outdoor 153.6 (61.2) 92.4
Interactive (16.8) (4.5) (21.3)
Publishing 17.0 (2.4) 14.6
Corporate (41.9) (3.1) (45.0)
Residual costs (22.5) - (22.5)
-------------- ----- - -----
Total $760.4 $(123.4) $637.0
----- ------ ------- ------
Three Months Ended June 30,
2009 2008
---- ----
Total OIBDA $387.4 $760.4
Depreciation and amortization (145.2) (123.4)
----------------------------- ------ ------
Operating income 242.2 637.0
Interest expense (133.9) (134.3)
Interest income 1.1 15.2
Loss on early extinguishment of debt (30.5) -
Other items, net (3.5) 124.9
---------------- ---- -----
Earnings before income taxes 75.4 642.8
Provision for income taxes (56.9) (232.9)
Equity in loss of investee
companies, net of tax (3.1) (1.5)
-------------------------- ---- ----
Net earnings $15.4 $408.4
------------ ----- ------
CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(continued)
(Unaudited; Dollars in millions)
Six Months Ended June 30, 2009
------------------------------
Depreciation Operating
OIBDA and Amortization Income (Loss)
----- ------------------ ---------------
Television $535.4 $(86.3) $449.1
Radio 147.5 (17.8) 129.7
Outdoor 67.3 (130.3) (63.0)
Interactive 13.9 (39.6) (25.7)
Publishing 8.2 (4.2) 4.0
Corporate (63.2) (9.3) (72.5)
Residual costs (71.9) - (71.9)
-------------- ----- ------- -----
Total $637.2 $(287.5) $349.7
----- ------ ------- ------
Six Months Ended June 30, 2008
------------------------------
Depreciation Operating
OIBDA and Amortization Income (Loss)
----- ------------------ ---------------
Television $960.8 $(87.9) $872.9
Radio 280.9 (15.2) 265.7
Outdoor 255.1 (118.6) 136.5
Interactive (15.7) (8.3) (24.0)
Publishing 34.1 (4.9) 29.2
Corporate (67.9) (6.3) (74.2)
Residual costs (44.9) - (44.9)
-------------- ----- ------ -----
Total $1,402.4 $(241.2) $1,161.2
----- -------- ------- --------
Six Months Ended June 30,
2009 2008
---- ----
Total OIBDA $637.2 $1,402.4
Depreciation and amortization (287.5) (241.2)
----------------------------- ------ ------
Operating income 349.7 1,161.2
Interest expense (267.1) (273.0)
Interest income 2.7 32.8
Loss on early extinguishment of debt (29.8) -
Other items, net (15.4) 124.7
---------------- ----- -----
Earnings before income taxes 40.1 1,045.7
Provision for income taxes (65.7) (384.2)
Equity in loss of investee companies,
net of tax (14.3) (8.8)
------------------------------------- ----- ----
Net earnings (loss) $(39.9) $652.7
------------------ ------ ------
CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(continued)
(Unaudited; Dollars in millions)
Free Cash Flow
Free cash flow reflects the Company's net cash flow provided by (used for)
operating activities less capital expenditures and increases/(decreases) to
the accounts receivable securitization program. The Company uses free cash
flow, among other measures, to evaluate its operating performance. 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 (loss) as an indicator of operating performance
or net cash flow provided by (used for) operating activities as a measure of
liquidity. Free cash flow, as the Company calculates it, may not be
comparable to similarly titled measures employed by other companies. In
addition, free cash flow does not necessarily represent funds available for
discretionary use and is not necessarily a measure of the Company's ability to
fund its cash needs. As free cash flow deducts capital expenditures and
increases/(decreases) to the accounts receivable securitization program from
net cash flow provided by (used for) operating activities, the most directly
comparable GAAP financial measure, users of this financial information should
consider the types of events and transactions which are not reflected. The
Company provides below a reconciliation of free cash flow to net cash flow
provided by (used for) 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 Six Months Ended
June 30, June 30,
2009 2008 2009 2008
---- ---- ---- ----
Net cash flow provided by
operating activities $416.8 $595.6 $395.3 $1,622.4
Add back: Decrease to accounts
receivable securitization - - 300.0 -
program
Less: Capital expenditures 65.1 131.4 139.3 220.2
-------------------------- ---- ----- ----- -----
Free cash flow $351.7 $464.2 $556.0 $1,402.2
-------------- ------ ------ ------ --------
The following table presents a summary of the Company's cash flows:
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
---- ---- ---- ----
Net cash flow provided by
operating activities $416.8 $595.6 $395.3 $1,622.4
Net cash flow used for
investing activities $(78.1) $(1,831.3) $(185.8) $(1,788.7)
Net cash flow used for
financing activities $(236.8) $(209.3) $(287.5) $(366.7)
---------------------- ------- ------- ------- -------
CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(continued)
(Unaudited; all amounts, except per share amounts, are in millions)
2009 and 2008 Adjusted Results
The following tables reconcile financial measures excluding dispositions,
early extinguishment of debt and reduction of deferred tax assets associated
with stock-based compensation, 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.
Three Months Ended June 30, 2009
2009
Adjusted
Non- vs.
2009 Comparable 2009 2008
Reported Items Adjusted Adjusted
-------- ---------- -------- --------
Revenues $3,006.3 $- $3,006.3
-------- -------- -------- --------
OIBDA 387.4 - 387.4
-------- -------- -------- --------
Operating income 242.2 - 242.2
Interest expense (133.9) - (133.9)
Interest income 1.1 - 1.1
Loss on early
extinguishment
of debt (30.5) 30.5(a) -
Other items, net (3.5) - (3.5)
---------------- -------- -------- --------
Earnings before
income taxes 75.4 30.5 105.9
Provision for
income taxes (56.9) (11.8)(a) (45.4)
23.3 (b)
Effective income
tax rate 75.5% 42.9%
---------------- -------- --------
Equity in loss of
investee companies,
net of tax (3.1) - (3.1)
---------------- -------- ----- -------
Net earnings $15.4 $42.0 $57.4 (83)%
---------------- -------- ----- -------
Diluted EPS $.02 $.06 $.08 (84)%
Diluted weighted
average number of
common shares
outstanding 680.2 680.2 680.2
---------------- -------- ----- ------
Three Months Ended June 30, 2008
--------------------------------
2008 Non-Comparable Adjusted
Reported Items 2008
---------- -------------- --------
Revenues $3,393.7 $- $3,393.7
-------- -------- -- --------
OIBDA 760.4 - 760.4
----- ----- - -----
Operating income 637.0 - 637.0
Interest expense (134.3) - (134.3)
Interest income 15.2 - 15.2
Other items, net 124.9
(127.2)(c) (2.3)
---------------- ---------- -------------- ----
Earnings before income taxes 642.8 (127.2) 515.6
Provision for income taxes (232.9) 48.9 (c) (184.0)
-------------------------- ---------- -------------- ------
Effective income tax rate 36.2% 35.7%
------------------------- ---- ----
Equity in loss of investee
companies, net of tax (1.5) - (1.5)
-------------------------- ---- ---- ----
Net earnings $408.4 $(78.3) $330.1
------------ ------ ------ ------
Diluted EPS $.61 $(.12) $.49
Diluted weighted average
number of
common shares outstanding 674.3 674.3 674.3
------------------------- ----- ----- -----
(a) Loss on early extinguishment of debt.
(b) Reduction of deferred tax assets associated with stock-based
compensation.
(c) Gain on sale of investment in Sundance Channel.
CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(continued)
(Unaudited; all amounts, except per share amounts, are in millions)
Six Months Ended June 30, 2009
2009
Adjusted
Non- vs.
2009 Comparable 2009 2008
Reported Items Adjusted Adjusted
-------- ---------- -------- --------
Revenues $6,166.2 $- $6,166.2
-------- -------- ---- --------
OIBDA 637.2 - 637.2
-------- -------- ---- --------
Operating income 349.7 - 349.7
Interest expense (267.1) - (267.1)
Interest income 2.7 - 2.7
Loss on early
extinguishment
of debt (29.8) 29.8(a) -
Other items, net (15.4) - (15.4)
-------- -------- ---- --------
Earnings before
income taxes 40.1 29.8 69.9
Provision for
income taxes (65.7) (11.6)(a) (35.2)
42.1 (b)
Effective income
tax rate 163.8% 50.4%
---------------- ----- -----
Equity in loss
of investee
companies,
net of tax (14.3) - (14.3)
Net earnings (loss) $(39.9) $60.3 $20.4 (96)%
Diluted EPS $(.06) $.09 $.03 (96)%
Diluted weighted
average number of
common shares
outstanding 672.5 672.5 678.2
Six Months Ended June 30, 2008
------------------------------
2008 Non-Comparable Adjusted
Reported Items 2008
-------- -------------- --------
Revenues $7,047.8 $- $7,047.8
-------- -------- ----- --------
OIBDA 1,402.4 - 1,402.4
----- ------- - -------
Operating income 1,161.2 - 1,161.2
Interest expense (273.0) - (273.0)
Interest income 32.8 - 32.8
Other items, net 124.7
(127.2)(c) (2.5)
---------------- ---------- -------------- ----
Earnings before income taxes 1,045.7 (127.2) 918.5
Provision for income taxes (384.2)
48.9 (c) (335.3)
-------------------------- ---------- -------------- ------
Effective income tax rate 36.7% 36.5%
------------------------- ---- ----
Equity in loss of investee
companies, net of tax (8.8) - (8.8)
-------------------------- ---- ----- ----
Net earnings $652.7 $(78.3) $574.4
------------ ------ ------ ------
Diluted EPS $.97 $(.12) $.85
Diluted weighted average number
of
common shares outstanding 674.0 674.0 674.0
------------------------- ----- ----- -----
(a) Loss on early extinguishment of debt.
(b) Reduction of deferred tax assets associated with stock-based
compensation.
(c) Gain on sale of investment in Sundance Channel.
CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(continued)
(Unaudited; Dollars in millions)
Interactive Segment Comparable Revenues Reconciliation
The Company acquired CNET on June 30, 2008. The following table presents
the revenues for the Interactive segment on a comparable basis, which includes
the revenues of CNET for all periods presented and excludes the impact of
divested interactive businesses and foreign exchange rate changes. The
Company believes that adjusting the revenues of the Interactive segment to
include CNET prior to acquisition and exclude the impact of divested
interactive businesses and foreign exchange rate changes provides investors
with a clearer perspective on the current underlying financial performance of
the Interactive segment.
Three Months Ended Six Months Ended
June 30, Better/ June 30, Better/
2009 2008 (Worse)% 2009 2008 (Worse)%
---- ---- ------ ---- ---- -------
Interactive
revenues, as
reported $126.4 $40.2 214% $260.0 $93.1 179%
CNET revenues
prior to June
30, 2008
acquisition - 102.4 n/m - 193.8 n/m
Divested interactive
businesses - (2.7) n/m - (5.0) n/m
Foreign exchange
rate changes - (3.0) n/m - (5.1) n/m
---------------- ---- ---- ------ ---- ---- -------
Interactive
revenues,
comparable
basis $126.4 $136.9 (8)% $260.0 $276.8 (6)%
-------------- ------ ---- ------ ------ ----- -------
n/m - not meaningful
Business Outlook
The following table presents the Company's business outlook for 2009,
which is based on 2008 results adjusted to exclude impairment charges.
Twelve Months Ended December 31, 2008
2009
2008 Impairment 2008 Business
Reported Charges Adjusted Outlook
---------- ---------- -------- ---------
OIBDA $(11,627.1) $14,181.4 $2,554.3 $1.725
billion
to
$1.925
billion
Depreciation and
amortization (531.6) - (531.6)
---------------- ----------- -------- --------
Operating
income (loss) $(12,158.7) $14,181.4 $2,022.7
---------------- ------------ --------- --------
SOURCE CBS Corporation
-0- 08/06/2009
/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 Andrea Prochniak, Vice President, Corporate
Communications, +1-212-975-0053, andrea.prochniak@cbs.com, or Investors: Adam
Townsend, Executive Vice President, Investor Relations, +1-212-975-5292,
adam.townsend@cbs.com, or Debra Wichser, Vice President, Investor Relations,
+1-212-975-3718, debra.wichser@cbs.com/
/Web Site: http://www.cbscorporation.com /
(CBS CBS CBS.A)
CO: CBS Corporation
ST: New York
IN: TVN RAD
SU: ERN ERP CCA
PR
-- NY57737 --
7737 08/06/2009 16:00 EDT http://www.prnewswire.com
|
CBS Corporation
