NEW YORK, Feb. 11, 2016
/PRNewswire/ -- CBS Corporation (NYSE: CBS.A and CBS) today
reported results for the fourth quarter and full year of 2015,
including its highest-ever quarter in revenue and adjusted net
earnings from continuing operations per diluted share ("EPS").
"We had a terrific fourth quarter, and CBS is now in position to
build strong momentum throughout 2016," said Leslie Moonves, Chairman, President and Chief
Executive Officer, CBS Corporation. "Our base businesses are
growing well, thanks to the strength of our premium content and the
continued improvement in the advertising marketplace. In addition,
with Super Bowl 50 here in the first quarter and political
spending ramping up into the fourth, we expect 2016 will be a very
good year for advertising. At the same time, our other high-margin
revenue streams continue to thrive. Retransmission consent and
reverse compensation are set to hit $1
billion in 2016 — a year earlier than expected — and are on
pace to surpass $2 billion in 2020.
The international market is extremely exciting as well, with demand
for our CBS programming higher than ever and new deals that are
changing the way we license the Showtime brand overseas. Plus, our
new streaming services — CBS All Access, CBSN, and Showtime
over the top — are attracting a whole new set of younger viewers on
better economic terms. So no matter how quickly the digital world
changes — and no matter how viewers want their content — CBS is
positioned to succeed."
Fourth Quarter 2015 Results
Revenues of $3.91 billion for the
fourth quarter of 2015 were up 6% from $3.68
billion for the prior-year period. The growth was driven by
a 16% increase in content licensing and distribution revenues,
reflecting higher international television licensing sales.
Affiliate and subscription fees grew 13%, driven by continued
increases in retransmission revenues and fees from CBS Television
Network affiliated stations. Advertising revenues increased 1%, led
by 8% growth in network advertising, which was partially offset by
the benefit to Local Broadcasting in 2014 from political
revenues.
Operating income for the fourth quarter of 2015 was $357 million, including a pretax noncash
impairment charge of $484 million
($297 million, net of tax benefit) to
reduce the carrying value of radio FCC licenses to their fair value
and a gain from the sale of an Internet business in China of $120
million ($128 million,
including tax benefit). On an adjusted basis, operating income of
$747 million for the fourth quarter
of 2015 grew 6% from operating income of $707 million from the same prior-year period,
primarily reflecting the higher revenues.
For the fourth quarter of 2015, net earnings from continuing
operations was $251 million, or
$.53 per diluted share, and included
several discrete items that totaled $185
million, net of tax, or $.39
per diluted share.
On an adjusted basis, net earnings from continuing operations
were $436 million, an 8% increase
from net earnings from continuing operations of $402 million for the same prior-year period,
principally driven by the higher adjusted operating income.
Adjusted EPS for the fourth quarter of 2015 grew 19%, to
$.92, from EPS of $.77 for the same prior-year period. During the
fourth quarter of 2015, weighted average shares outstanding were
474 million, down from 523 million in the prior-year period, as a
result of the Company's ongoing share repurchase program.
Adjusted results for the fourth quarter of 2015 excluded
restructuring charges of $26 million
($16 million, net of tax benefit),
and the above-mentioned impairment charge and gain from the sale of
an Internet business in China. No
adjustments were made to reported results for the fourth quarter of
2014.
Reconciliations of non-GAAP measures to reported results are
included at the end of this earnings release.
Full Year 2015 Results
Full year 2015 revenues were $13.89
billion, up 1% from $13.81
billion in 2014. The growth was driven by a 15% increase in
affiliate and subscription fees, reflecting higher rates, as well
as increased revenues from pay-per-view boxing events. Advertising
revenues decreased 3%, reflecting a decline in local advertising
revenues as a result of the benefit to 2014 from the midterm
elections and lower radio advertising. Overall advertising revenues
benefited from a 1% increase in network advertising, primarily
driven by higher scatter pricing in the second half of the year,
which offset the impact of broadcasting fewer sporting events on
the CBS Television Network. Content licensing and distribution
revenues were down 2%, reflecting lower domestic television
licensing revenues, which were partially offset by higher
international television licensing revenues.
For 2015, operating income of $2.42
billion included the previously mentioned impairment charge
and gains from the sales of Internet businesses in China of $139
million. On an adjusted basis, operating income of
$2.84 billion in 2015 decreased 4%
from $2.97 billion in 2014,
reflecting an increased investment in programming and digital
distribution initiatives.
Net earnings from continuing operations in 2015 were
$1.40 billion, or $2.87 per diluted share, and included several
discrete items that totaled $215
million, net of tax, or $.44
per diluted share.
On an adjusted basis, net earnings from continuing operations
were $1.62 billion in 2015 compared
with $1.66 billion in 2014,
principally because of the lower adjusted operating income.
Adjusted EPS was $3.31 in 2015, up
12% from $2.96 in 2014. Weighted
average shares outstanding were 489 million in 2015, down from 561
million in the prior year, as a result of the Company's ongoing
share repurchase program as well as the split-off of Outdoor
Americas Inc. ("Outdoor Americas") in the third quarter of
2014.
Adjusted results for 2015 excluded restructuring charges, an
impairment charge, and gains from the sales of Internet businesses
in China. For 2014, adjusted
operating income excluded restructuring charges and an impairment
charge. For 2014, adjusted net earnings from continuing operations
and adjusted EPS also excluded a loss on early extinguishment of
debt. Reconciliations of non-GAAP measures to reported results are
included at the end of this earnings release.
Net earnings per diluted share of $5.27 for 2014 included a gain of $1.56 billion, or $2.78 per diluted share, recognized in connection
with the split-off of Outdoor Americas.
Free Cash Flow, Balance Sheet and Liquidity
For the fourth quarter of 2015, free cash flow was $680 million compared with $880 million for the same prior-year period. For
the 2015 full year, free cash flow was $1.23
billion compared with $1.00
billion in 2014, and operating cash flow from continuing
operations was $1.42 billion compared
with $1.21 billion for the prior
year. These increases principally reflect premiums paid in 2014 in
connection with the Company's debt refinancing.
During the fourth quarter of 2015, the Company repurchased 10.6
million shares of CBS Corp. Class B Common Stock for $500 million. For the full year, the Company
repurchased 51.7 million shares for $2.80
billion, leaving $2.00 billion
of authorization remaining under the Company's share repurchase
program at December 31, 2015. The Company expects to complete
its share repurchase program by the end of 2016, subject to market
conditions.
Consolidated and Segment Results (dollars in
millions)
The tables below present the Company's revenues by segment and
type, operating income (loss) excluding restructuring charges,
impairment charges, and gain on sales of businesses by segment
("Segment Operating Income"), and depreciation and amortization by
segment for the three and twelve months ended December 31,
2015, and 2014.
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
Revenues by
Segment
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Entertainment
|
$
|
2,460
|
|
|
$
|
2,260
|
|
|
$
|
8,438
|
|
|
$
|
8,309
|
|
Cable
Networks
|
562
|
|
|
499
|
|
|
2,242
|
|
|
2,176
|
|
Publishing
|
233
|
|
|
215
|
|
|
780
|
|
|
778
|
|
Local
Broadcasting
|
719
|
|
|
785
|
|
|
2,607
|
|
|
2,756
|
|
Eliminations
|
(64)
|
|
|
(78)
|
|
|
(181)
|
|
|
(213)
|
|
Total
Revenues
|
$
|
3,910
|
|
|
$
|
3,681
|
|
|
$
|
13,886
|
|
|
$
|
13,806
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
Revenues by
Type
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Advertising
|
$
|
2,159
|
|
|
$
|
2,147
|
|
|
$
|
7,018
|
|
|
$
|
7,204
|
|
Content licensing and
distribution
|
1,014
|
|
|
873
|
|
|
3,903
|
|
|
3,990
|
|
Affiliate and
subscription fees
|
680
|
|
|
601
|
|
|
2,724
|
|
|
2,362
|
|
Other
|
57
|
|
|
60
|
|
|
241
|
|
|
250
|
|
Total
Revenues
|
$
|
3,910
|
|
|
$
|
3,681
|
|
|
$
|
13,886
|
|
|
$
|
13,806
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
Segment Operating
Income (Loss)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Entertainment
|
$
|
347
|
|
|
$
|
253
|
|
|
$
|
1,294
|
|
|
$
|
1,316
|
|
Cable
Networks
|
228
|
|
|
241
|
|
|
945
|
|
|
974
|
|
Publishing
|
34
|
|
|
25
|
|
|
114
|
|
|
101
|
|
Local
Broadcasting
|
232
|
|
|
292
|
|
|
765
|
|
|
878
|
|
Corporate
|
(94)
|
|
|
(104)
|
|
|
(275)
|
|
|
(295)
|
|
Adjusted Operating
Income
|
747
|
|
|
707
|
|
|
2,843
|
|
|
2,974
|
|
Restructuring
charges
|
(26)
|
|
|
—
|
|
|
(81)
|
|
|
(26)
|
|
Impairment
charges
|
(484)
|
|
|
—
|
|
|
(484)
|
|
|
(52)
|
|
Gain on sales of
businesses
|
120
|
|
|
—
|
|
|
139
|
|
|
—
|
|
Total Operating
Income
|
$
|
357
|
|
|
$
|
707
|
|
|
$
|
2,417
|
|
|
$
|
2,896
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
Depreciation and
Amortization
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Entertainment
|
$
|
31
|
|
|
$
|
34
|
|
|
$
|
126
|
|
|
$
|
139
|
|
Cable
Networks
|
6
|
|
|
6
|
|
|
23
|
|
|
23
|
|
Publishing
|
2
|
|
|
2
|
|
|
6
|
|
|
6
|
|
Local
Broadcasting
|
19
|
|
|
21
|
|
|
79
|
|
|
87
|
|
Corporate
|
7
|
|
|
8
|
|
|
30
|
|
|
26
|
|
Total Depreciation
and Amortization
|
$
|
65
|
|
|
$
|
71
|
|
|
$
|
264
|
|
|
$
|
281
|
|
Entertainment (CBS Television Network, CBS Television
Studios, CBS Global Distribution Group, CBS Interactive, and CBS
Films)
Entertainment revenues of $2.46
billion for the fourth quarter of 2015 grew 9% from
$2.26 billion for the same prior-year
period. The increase was driven by 8% growth in network advertising
revenues, resulting from a strong scatter market. In addition,
affiliate and subscription fees were up 45%, and content licensing
and distribution revenues grew 7% as a result of increased
international television licensing revenues.
Entertainment operating income for the fourth quarter of 2015
was $347 million, up from
$253 million for the same prior-year
period, primarily reflecting the increased revenues.
Cable Networks (Showtime Networks, CBS Sports Network,
and Smithsonian Networks)
Cable Networks revenues of $562
million for the fourth quarter of 2015 rose 13% from
$499 million for the same quarter in
2014, driven by higher revenues from the international licensing of
Showtime original series.
Cable Networks operating income was $228
million for the fourth quarter of 2015 compared to
$241 million for the same prior-year
period, as the fourth quarter of 2014 benefited from the licensing
of higher-margin titles.
Publishing (Simon & Schuster)
Publishing revenues for the fourth quarter of 2015 of
$233 million rose 8% from
$215 million for the same prior-year
period, driven by growth in print book sales. Digital books
represented 21% of total Publishing revenues during the quarter.
Bestselling titles for the quarter included The Bazaar of Bad
Dreams by Stephen King and
Crippled America by Donald J.
Trump.
Publishing operating income for the fourth quarter of 2015 was
$34 million, up from $25 million for the same prior-year period,
primarily reflecting the higher revenues.
Local Broadcasting (CBS Television Stations and CBS
Radio)
Local Broadcasting revenues for the fourth quarter of 2015 were
$719 million compared with
$785 million in the same prior-year
period. CBS Television Stations revenues declined 11%, as 2014
benefited from strong political spending associated with midterm
elections. Growth in affiliate and subscription fees partially
offset the decline. CBS Radio revenues were down 5%, reflecting
continued softness in the radio advertising marketplace and lower
political advertising.
Local Broadcasting operating income for the fourth quarter of
2015 was $232 million compared with
$292 million for the same prior-year
period, primarily reflecting the lower revenues.
Corporate
Corporate expenses for the fourth quarter of 2015 decreased 10%
to $94 million from $104 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, radio, local TV, film, and interactive and socially
responsible media. CBS's businesses include CBS Television Network,
The CW (a joint venture between CBS Corporation and Warner Bros.
Entertainment), CBS Television Studios, CBS Global Distribution
Group (CBS Studios International and 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, CBS Radio 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. 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; the
impact of negotiations or the loss of affiliation agreements or
retransmission agreements; 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 filings with the
Securities and Exchange Commission including but not limited to the
Company's most recent Form 10-K, Form 10-Qs and Form 8-Ks. The
forward-looking statements included in this document are made only
as of the date of this document, and under section 27A of the
Securities Act and section 21E of the Exchange Act, we do not have
any obligation to publicly update any forward-looking statements to
reflect subsequent events or circumstances.
CBS CORPORATION
AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited; in
millions, except per share amounts)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
3,910
|
|
|
$
|
3,681
|
|
|
$
|
13,886
|
|
|
$
|
13,806
|
|
Operating
income
|
357
|
|
|
707
|
|
|
2,417
|
|
|
2,896
|
|
Interest
expense
|
(103)
|
|
|
(87)
|
|
|
(392)
|
|
|
(363)
|
|
Interest
income
|
6
|
|
|
3
|
|
|
24
|
|
|
13
|
|
Loss on early
extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(352)
|
|
Other items,
net
|
(3)
|
|
|
(20)
|
|
|
(26)
|
|
|
(30)
|
|
Earnings from
continuing operations before income taxes
|
257
|
|
|
603
|
|
|
2,023
|
|
|
2,164
|
|
Provision for income
taxes
|
(8)
|
|
|
(201)
|
|
|
(587)
|
|
|
(762)
|
|
Equity in earnings
(loss) of investee companies, net of tax
|
2
|
|
|
—
|
|
|
(33)
|
|
|
(48)
|
|
Net earnings from
continuing operations
|
251
|
|
|
402
|
|
|
1,403
|
|
|
1,354
|
|
Net earnings from
discontinued operations, net of tax
|
10
|
|
|
11
|
|
|
10
|
|
|
1,605
|
|
Net
earnings
|
$
|
261
|
|
|
$
|
413
|
|
|
$
|
1,413
|
|
|
$
|
2,959
|
|
Basic net earnings
per common share:
|
|
|
|
|
|
|
|
Net earnings from
continuing operations
|
$
|
.54
|
|
|
$
|
.78
|
|
|
$
|
2.90
|
|
|
$
|
2.46
|
|
Net earnings from
discontinued operations
|
$
|
.02
|
|
|
$
|
.02
|
|
|
$
|
.02
|
|
|
$
|
2.92
|
|
Net
earnings
|
$
|
.56
|
|
|
$
|
.80
|
|
|
$
|
2.92
|
|
|
$
|
5.38
|
|
|
|
|
|
|
|
|
|
Diluted net
earnings per common share:
|
|
|
|
|
|
|
|
Net earnings from
continuing operations
|
$
|
.53
|
|
|
$
|
.77
|
|
|
$
|
2.87
|
|
|
$
|
2.41
|
|
Net earnings from
discontinued operations
|
$
|
.02
|
|
|
$
|
.02
|
|
|
$
|
.02
|
|
|
$
|
2.86
|
|
Net
earnings
|
$
|
.55
|
|
|
$
|
.79
|
|
|
$
|
2.89
|
|
|
$
|
5.27
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
469
|
|
|
515
|
|
|
484
|
|
|
550
|
|
Diluted
|
474
|
|
|
523
|
|
|
489
|
|
|
561
|
|
|
|
|
|
|
|
|
|
Dividends per
common share
|
$
|
.15
|
|
|
$
|
.15
|
|
|
$
|
.60
|
|
|
$
|
.54
|
|
CBS CORPORATION
AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
(Unaudited; in
millions)
|
|
|
At
|
|
|
At
|
|
|
December 31,
2015
|
|
December 31,
2014
|
Assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
323
|
|
|
|
|
$
|
428
|
|
|
Receivables,
net
|
|
3,628
|
|
|
|
|
3,459
|
|
|
Programming and other
inventory
|
|
1,271
|
|
|
|
|
922
|
|
|
Prepaid expenses and
other current assets
|
|
525
|
|
|
|
|
676
|
|
|
Total current
assets
|
|
5,747
|
|
|
|
|
5,485
|
|
|
Property and
equipment
|
|
3,243
|
|
|
|
|
3,164
|
|
|
Less accumulated
depreciation and amortization
|
|
1,838
|
|
|
|
|
1,731
|
|
|
Net property and
equipment
|
|
1,405
|
|
|
|
|
1,433
|
|
|
Programming and other
inventory
|
|
1,957
|
|
|
|
|
1,817
|
|
|
Goodwill
|
|
6,481
|
|
|
|
|
6,698
|
|
|
Intangible
assets
|
|
5,514
|
|
|
|
|
6,008
|
|
|
Other
assets
|
|
2,661
|
|
|
|
|
2,494
|
|
|
Total
Assets
|
|
$
|
23,765
|
|
|
|
|
$
|
23,935
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
192
|
|
|
|
|
$
|
302
|
|
|
Participants' share
and royalties payable
|
|
1,013
|
|
|
|
|
999
|
|
|
Program
rights
|
|
374
|
|
|
|
|
404
|
|
|
Commercial
paper
|
|
—
|
|
|
|
|
616
|
|
|
Current portion of
long-term debt
|
|
222
|
|
|
|
|
20
|
|
|
Accrued expenses and
other current liabilities
|
|
1,759
|
|
|
|
|
1,692
|
|
|
Total current
liabilities
|
|
3,560
|
|
|
|
|
4,033
|
|
|
Long-term
debt
|
|
8,226
|
|
|
|
|
6,476
|
|
|
Other
liabilities
|
|
6,344
|
|
|
|
|
6,338
|
|
|
Liabilities of
discontinued operations
|
|
72
|
|
|
|
|
118
|
|
|
Total Stockholders'
Equity
|
|
5,563
|
|
|
|
|
6,970
|
|
|
Total Liabilities and
Stockholders' Equity
|
|
$
|
23,765
|
|
|
|
|
$
|
23,935
|
|
|
CBS CORPORATION
AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited; in
millions)
|
|
|
|
Twelve Months
Ended
|
|
December
31,
|
|
|
2015
|
|
|
|
2014
|
|
Operating
Activities:
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
|
1,413
|
|
|
|
|
$
|
2,959
|
|
|
Less: Net earnings
from discontinued operations
|
|
10
|
|
|
|
|
1,605
|
|
|
Net earnings from
continuing operations
|
|
1,403
|
|
|
|
|
1,354
|
|
|
Adjustments to
reconcile net earnings from continuing operations to net cash flow
provided by operating activities from continuing
operations:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
264
|
|
|
|
|
281
|
|
|
Impairment
charges
|
|
484
|
|
|
|
|
52
|
|
|
Gain on sales of
businesses
|
|
(139)
|
|
|
|
|
—
|
|
|
Stock-based
compensation
|
|
174
|
|
|
|
|
154
|
|
|
Equity in loss of
investee companies, net of tax and distributions
|
|
36
|
|
|
|
|
57
|
|
|
Change in assets and
liabilities, net of investing and financing activities
|
|
(803)
|
|
|
|
|
(688)
|
|
|
Net cash flow
provided by operating activities from continuing
operations
|
|
1,419
|
|
|
|
|
1,210
|
|
|
Net cash flow (used
for) provided by operating activities from discontinued
operations
|
|
(25)
|
|
|
|
|
65
|
|
|
Net cash flow
provided by operating activities
|
|
1,394
|
|
|
|
|
1,275
|
|
|
Investing
Activities:
|
|
|
|
|
|
|
|
Acquisitions, net of
cash acquired
|
|
(15)
|
|
|
|
|
(27)
|
|
|
Capital
expenditures
|
|
(193)
|
|
|
|
|
(206)
|
|
|
Investments in and
advances to investee companies
|
|
(98)
|
|
|
|
|
(98)
|
|
|
Proceeds from sale of
investments
|
|
81
|
|
|
|
|
12
|
|
|
Proceeds from
dispositions
|
|
385
|
|
|
|
|
7
|
|
|
Other investing
activities
|
|
(3)
|
|
|
|
|
(4)
|
|
|
Net cash flow
provided by (used for) investing activities from continuing
operations
|
|
157
|
|
|
|
|
(316)
|
|
|
Net cash flow used
for investing activities from discontinued operations
|
|
(3)
|
|
|
|
|
(285)
|
|
|
Net cash flow
provided by (used for) investing activities
|
|
154
|
|
|
|
|
(601)
|
|
|
Financing
Activities:
|
|
|
|
|
|
|
|
(Repayments of)
proceeds from short-term debt borrowings, net
|
|
(616)
|
|
|
|
|
141
|
|
|
Proceeds from
issuance of senior notes
|
|
1,959
|
|
|
|
|
1,728
|
|
|
Repayment of notes
and debentures
|
|
—
|
|
|
|
|
(1,152)
|
|
|
Payment of capital
lease obligations
|
|
(17)
|
|
|
|
|
(17)
|
|
|
Dividends
|
|
(300)
|
|
|
|
|
(292)
|
|
|
Purchase of Company
common stock
|
|
(2,813)
|
|
|
|
|
(3,595)
|
|
|
Payment of payroll
taxes in lieu of issuing shares for stock-based
compensation
|
|
(96)
|
|
|
|
|
(146)
|
|
|
Proceeds from
exercise of stock options
|
|
142
|
|
|
|
|
283
|
|
|
Excess tax benefit
from stock-based compensation
|
|
88
|
|
|
|
|
243
|
|
|
Other financing
activities
|
|
—
|
|
|
|
|
(3)
|
|
|
Net cash flow used
for financing activities from continuing operations
|
|
(1,653)
|
|
|
|
|
(2,810)
|
|
|
Net cash flow
provided by financing activities from discontinued
operations
|
|
—
|
|
|
|
|
2,167
|
|
|
Net cash flow used
for financing activities
|
|
(1,653)
|
|
|
|
|
(643)
|
|
|
Net (decrease)
increase in cash and cash equivalents
|
|
(105)
|
|
|
|
|
31
|
|
|
Cash and cash
equivalents at beginning of period
(includes $29 (2014)
of discontinued operations cash)
|
|
428
|
|
|
|
|
397
|
|
|
Cash and cash
equivalents at end of period
|
|
$
|
323
|
|
|
|
|
$
|
428
|
|
|
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, 2015
and the twelve months ended December 31, 2014. The Company
defines "Adjusted Operating Income" as operating income excluding
restructuring charges, impairment charges, and gain on sales of
businesses, 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 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 because they provide a link
between profitability and operating cash flow. 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.
Because Adjusted Operating Income is not a measure of
performance 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 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, 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.
CBS CORPORATION
AND SUBSIDIARIES
SUPPLEMENTAL
DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(continued)
(Unaudited; in
millions)
|
|
|
Three Months Ended
December 31,
|
|
2015
|
|
2014
|
Adjusted operating
income
|
|
$
|
747
|
|
|
|
|
$
|
707
|
|
|
Restructuring
charges
|
|
(26)
|
|
|
|
|
—
|
|
|
Impairment
charge
|
|
(484)
|
|
|
|
|
—
|
|
|
Gain on sales of
businesses
|
|
120
|
|
|
|
|
—
|
|
|
Operating
income
|
|
357
|
|
|
|
|
707
|
|
|
Interest
expense
|
|
(103)
|
|
|
|
|
(87)
|
|
|
Interest
income
|
|
6
|
|
|
|
|
3
|
|
|
Other items,
net
|
|
(3)
|
|
|
|
|
(20)
|
|
|
Earnings from
continuing operations before income taxes
|
|
257
|
|
|
|
|
603
|
|
|
Provision for income
taxes
|
|
(8)
|
|
|
|
|
(201)
|
|
|
Equity in earnings of
investee companies, net of tax
|
|
2
|
|
|
|
|
—
|
|
|
Net earnings from
continuing operations
|
|
251
|
|
|
|
|
402
|
|
|
Net earnings from
discontinued operations, net of tax
|
|
10
|
|
|
|
|
11
|
|
|
Net
earnings
|
|
$
|
261
|
|
|
|
|
$
|
413
|
|
|
|
|
|
Twelve Months
Ended December 31,
|
|
2015
|
|
2014
|
Adjusted operating
income
|
|
$
|
2,843
|
|
|
|
|
$
|
2,974
|
|
|
Restructuring
charges
|
|
(81)
|
|
|
|
|
(26)
|
|
|
Impairment
charges
|
|
(484)
|
|
|
|
|
(52)
|
|
|
Gain on sales of
businesses
|
|
139
|
|
|
|
|
—
|
|
|
Operating
income
|
|
2,417
|
|
|
|
|
2,896
|
|
|
Interest
expense
|
|
(392)
|
|
|
|
|
(363)
|
|
|
Interest
income
|
|
24
|
|
|
|
|
13
|
|
|
Loss on early
extinguishment of debt
|
|
—
|
|
|
|
|
(352)
|
|
|
Other items,
net
|
|
(26)
|
|
|
|
|
(30)
|
|
|
Earnings from
continuing operations before income taxes
|
|
2,023
|
|
|
|
|
2,164
|
|
|
Provision for income
taxes
|
|
(587)
|
|
|
|
|
(762)
|
|
|
Equity in loss of
investee companies, net of tax
|
|
(33)
|
|
|
|
|
(48)
|
|
|
Net earnings from
continuing operations
|
|
1,403
|
|
|
|
|
1,354
|
|
|
Net earnings from
discontinued operations, net of tax
|
|
10
|
|
|
|
|
1,605
|
|
|
Net
earnings
|
|
$
|
1,413
|
|
|
|
|
$
|
2,959
|
|
|
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 including 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. 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
net cash flow provided by operating activities to free cash
flow.
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net cash flow
provided by operating activities
|
$
|
771
|
|
|
$
|
987
|
|
|
$
|
1,394
|
|
|
$
|
1,275
|
|
Capital
expenditures
|
(89)
|
|
|
(94)
|
|
|
(193)
|
|
|
(206)
|
|
Exclude operating
cash flow from discontinued operations
|
2
|
|
|
13
|
|
|
(25)
|
|
|
65
|
|
Free cash
flow
|
$
|
680
|
|
|
$
|
880
|
|
|
$
|
1,226
|
|
|
$
|
1,004
|
|
The following table presents a summary of the Company's cash
flows:
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net cash flow
provided by operating activities
|
$
|
771
|
|
|
$
|
987
|
|
|
$
|
1,394
|
|
|
$
|
1,275
|
|
Net cash flow
provided by (used for) investing activities
|
$
|
260
|
|
|
$
|
(133)
|
|
|
$
|
154
|
|
|
$
|
(601)
|
|
Net cash flow used
for financing activities
|
$
|
(841)
|
|
|
$
|
(604)
|
|
|
$
|
(1,653)
|
|
|
$
|
(643)
|
|
CBS CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL
DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(continued)
(Unaudited; in millions, except per share amounts)
2015 and 2014 Adjusted Results
The following tables reconcile adjusted financial results to the
reported results 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 adjusting
each period's results on the same basis makes it easier to compare
the Company's year-over-year results.
|
Three Months Ended
December 31, 2015
|
|
2015
Reported
|
|
Restructuring
Charges (a)
|
|
Impairment Charge
(b)
|
|
Gain on Sale
of
Business (c)
|
|
2015
Adjusted
|
|
Revenues
|
$
|
3,910
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,910
|
|
|
Operating
income
|
357
|
|
|
26
|
|
|
484
|
|
|
(120)
|
|
|
747
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
margin (d)
|
9
|
%
|
|
|
|
|
|
|
|
19
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(103)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(103)
|
|
|
Interest
income
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
Other items,
net
|
(3)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3)
|
|
|
Earnings from
continuing operations
before income taxes
|
257
|
|
|
26
|
|
|
484
|
|
|
(120)
|
|
|
647
|
|
|
Provision for income
taxes
|
(8)
|
|
|
(10)
|
|
|
(187)
|
|
|
(8)
|
|
|
(213)
|
|
|
Effective income tax
rate
|
3
|
%
|
|
|
|
|
|
|
|
33
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
investee companies,
net of tax
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
Net earnings from
continuing operations
|
$
|
251
|
|
|
$
|
16
|
|
|
$
|
297
|
|
|
$
|
(128)
|
|
|
$
|
436
|
|
|
Diluted EPS from
continuing operations
|
$
|
.53
|
|
|
$
|
.03
|
|
|
$
|
.63
|
|
|
$
|
(.27)
|
|
|
$
|
.92
|
|
|
Diluted weighted
average number of
common shares outstanding
|
474
|
|
|
|
|
|
|
|
|
474
|
|
|
|
(a)
Restructuring charges at Entertainment and Local Broadcasting
primarily for the reorganization of certain business
operations.
(b) Reflects a
noncash impairment charge to reduce the carrying value of radio FCC
licenses to their fair value.
(c) Reflects a
gain from the sale of an Internet business in China.
(d) Operating
income margin is defined as Operating Income or Adjusted Operating
Income divided by revenues.
|
CBS CORPORATION
AND SUBSIDIARIES
SUPPLEMENTAL
DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(continued)
(Unaudited; in
millions, except per share amounts)
|
|
|
Twelve Months
Ended December 31, 2015
|
|
2015
Reported
|
|
Restructuring
Charges (a)
|
|
Impairment Charge
(b)
|
|
Gain on Sales
of
Businesses (c)
|
|
2015
Adjusted
|
|
Revenues
|
$
|
13,886
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,886
|
|
|
Operating
income
|
2,417
|
|
|
81
|
|
|
484
|
|
|
(139)
|
|
|
2,843
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
margin (d)
|
17
|
%
|
|
|
|
|
|
|
|
20
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(392)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(392)
|
|
|
Interest
income
|
24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
Other items,
net
|
(26)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26)
|
|
|
Earnings from
continuing operations before income taxes
|
2,023
|
|
|
81
|
|
|
484
|
|
|
(139)
|
|
|
2,449
|
|
|
Provision for income
taxes
|
(587)
|
|
|
(32)
|
|
|
(187)
|
|
|
8
|
|
|
(798)
|
|
|
Effective income tax
rate
|
29
|
%
|
|
|
|
|
|
|
|
33
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in loss of
investee companies,
net
of tax
|
(33)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33)
|
|
|
Net earnings from
continuing operations
|
$
|
1,403
|
|
|
$
|
49
|
|
|
$
|
297
|
|
|
$
|
(131)
|
|
|
$
|
1,618
|
|
|
Diluted EPS from
continuing operations
|
$
|
2.87
|
|
|
$
|
.10
|
|
|
$
|
.61
|
|
|
$
|
(.27)
|
|
|
$
|
3.31
|
|
|
Diluted weighted
average number of common shares outstanding
|
489
|
|
|
|
|
|
|
|
|
489
|
|
|
|
|
Twelve Months
Ended December 31, 2014
|
|
2014
Reported
|
|
Restructuring
Charges (e)
|
|
Impairment Charge
(b)
|
|
Extinguishment of
Debt
|
|
2014
Adjusted
|
|
Revenues
|
$
|
13,806
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,806
|
|
|
Operating
income
|
2,896
|
|
|
26
|
|
|
52
|
|
|
—
|
|
|
2,974
|
|
|
Operating income
margin (d)
|
21
|
%
|
|
|
|
|
|
|
|
22
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(363)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(363)
|
|
|
Interest
income
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
Loss on early
extinguishment of debt
|
(352)
|
|
|
—
|
|
|
—
|
|
|
352
|
|
|
—
|
|
|
Other items,
net
|
(30)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30)
|
|
|
Earnings from
continuing operations before income taxes
|
2,164
|
|
|
26
|
|
|
52
|
|
|
352
|
|
|
2,594
|
|
|
Provision for income
taxes
|
(762)
|
|
|
(10)
|
|
|
22
|
|
|
(133)
|
|
|
(883)
|
|
|
Effective income tax
rate
|
35
|
%
|
|
|
|
|
|
|
|
34
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in loss of
investee companies,
net
of tax
|
(48)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(48)
|
|
|
Net earnings from
continuing operations
|
$
|
1,354
|
|
|
$
|
16
|
|
|
$
|
74
|
|
|
$
|
219
|
|
|
$
|
1,663
|
|
|
Diluted EPS from
continuing operations
|
$
|
2.41
|
|
|
$
|
.03
|
|
|
$
|
.13
|
|
|
$
|
.39
|
|
|
$
|
2.96
|
|
|
Diluted weighted
average number of common shares outstanding
|
561
|
|
|
|
|
|
|
|
|
561
|
|
|
|
(a)
Restructuring charges at Entertainment and Local Broadcasting
primarily for the reorganization of certain business operations and
other exit costs.
(b) In 2015,
reflects a noncash impairment charge to reduce the carrying value
of radio FCC licenses to their fair value. In 2014, reflects a
noncash impairment
charge to reduce goodwill
at Local Broadcasting in connection with a radio station
swap.
(c) Reflects
gains from the sales of Internet businesses in China.
(d) Operating
income margin is defined as Operating Income or Adjusted Operating
Income divided by revenues.
(e)
Restructuring charges at Entertainment, Publishing, Local
Broadcasting and Corporate primarily for the reorganization and
closure of certain business operations and other exit
costs.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cbs-corporation-reports-2015-fourth-quarter-and-full-year-results-300219074.html
SOURCE CBS Corporation